~~Item 6.~~ ~~Selected Financial Data.~~⁽¹⁾

(Dollars in thousands, except per share data) 2017 2016 2015 2014 2013
RESULTS OF OPERATIONS
Net sales $ 2,287,312
$ 2,113,043
$ 2,020,668
$ 2,147,767
$ 2,024,130
Gross profit 1,026,678
930,767
904,315
949,315
873,364
Selling, general and administrative expenses 524,940
492,398
474,156
500,719
468,806
Loss (gain) on sale of businesses - net (9,273 ) 22,298
(18,070 ) —
—
Restructuring expenses 8,455
3,674
11,239
13,672
—
Operating income 502,556
412,397
436,990
434,924
404,558
Other (income) expense - net 2,394
(1,731 ) 3,009
589
9,223
Interest expense 44,889
45,616
41,636
41,895
42,206
Provision for income taxes 118,016
97,403
109,538
113,054
97,914
Net income 337,257
271,109
282,807
279,386
255,215
Earnings per share: ⁽²⁾

— basic $ 4.41
$ 3.57
$ 3.65
$ 3.48
$ 3.11
— diluted $ 4.36
$ 3.53
$ 3.62
$ 3.45
$ 3.09
Weighted average shares outstanding:
— basic 76,232
75,803
77,126
79,715
81,517
— diluted 77,333
76,758
77,972
80,728
82,489
Year-end shares outstanding 76,694
76,441
76,535
78,766
81,196
Cash dividends per share $ 1.48
$ 1.36
$ 1.28
$ 1.12
$ 0.89
FINANCIAL POSITION
Current assets $ 1,004,043
$ 822,721
$ 862,684
$ 1,075,791
$ 990,953
Current liabilities 360,975
309,158
309,597
411,968
304,609
Current ratio 2.8
2.7
2.8
2.6
3.3
Operating working capital ⁽³⁾
406,823
396,739
370,213
366,209
350,881
Total assets⁽⁴⁾
$ 3,399,628
$ 3,154,944
$ 2,805,443
$ 2,903,463
$ 2,881,118
Total borrowings ⁽⁴⁾
859,046
1,015,281
840,794
859,345
767,417
Shareholders’ equity 1,886,542
1,543,894
1,443,291
1,486,451
1,572,989
PERFORMANCE MEASURES AND OTHER DATA
Percent of net sales:
Gross profit 44.9 % 44.0 % 44.8 % 44.2 % 43.1 %
Selling, general and administrative expenses 23.0 % 23.3 % 23.5 % 23.3 % 23.2 %
Operating income 22.0 % 19.5 % 21.6 % 20.3 % 20.0 %
Income before income taxes 19.9 % 17.4 % 19.4 % 18.3 % 17.4 %
Net income 14.7 % 12.8 % 14.0 % 13.0 % 12.6 %
Capital expenditures $ 43,858
$ 38,242
$ 43,776
$ 47,997
$ 31,536
Depreciation and amortization 84,216
86,892
78,120
76,907
79,334
Return on average assets ⁽⁵⁾
10.3 % 9.1 % 9.9 % 9.7 % 9.0 %
Borrowings as a percent of capitalization ⁽⁵⁾
31.3 % 39.7 % 36.8 % 36.6 % 32.8 %
Return on average shareholders’ equity⁽⁵⁾
19.7 % 18.2 % 19.3 % 18.3 % 16.8 %
Employees at year end 7,167
7,158
6,801
6,712
6,787
NON-GAAP MEASURES⁽⁶⁾

EBITDA $ 584,378
$ 501,020
$ 512,101
$ 511,242
$ 474,669
EBITDA margin 25.5 % 23.7 % 25.3 % 23.8 % 23.5 %
Adjusted EBITDA $ 583,560
$ 530,546
$ 505,270
$ 524,914
$ 474,669
Adjusted EBITDA margin
25.5 % 25.1 % 25.0 % 24.4 % 23.5 %
Adjusted operating income $ 501,738
$ 438,369
$ 430,159
$ 448,596
$ 404,558
Adjusted operating margin 21.9 % 20.7 % 21.3 % 20.9 % 20.0 %
Adjusted net income
$ 333,667
$ 288,373
$ 277,229
$ 288,823
$ 255,215
Adjusted earnings per share
$ 4.31
$ 3.75
$ 3.55
$ 3.57
$ 3.09
Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations.


~~(1)~~	~~For additional detail, see Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data.”~~


~~(2)~~	~~Calculated by applying the two-class method of allocating earnings to common stock and participating securities as required by Accounting Standards Codification (“ASC”) 260,~~ ~~Earnings Per Share~~.


~~(3)~~	~~Operating working capital is defined as inventory plus accounts receivable minus accounts payable.~~

~~(4)~~

In the fourth quarter of fiscal year 2015, the Company adopted Accounting Standards Update 2015-03 regarding simplifying the presentation of debt issuance costs. The update was applied retrospectively to all periods presented in accordance with the provisions of the update. Refer to Note 1 for additional information related to ASU 2015-03 in the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data.”

~~(5)~~

Return on average assets is calculated as: Net income / (Current year Total assets + Prior year Total assets) / 2; Borrowings as a percent of capitalization is calculated as: (Long-term borrowings + Short-term borrowings) / (Long-term borrowings + Short-term borrowings + Total shareholders’ equity); Return on average shareholders’ equity is calculated as Net Income / (Current year Total shareholders’ equity + Prior year Total shareholders’ equity) / 2

~~(6)~~

Set forth below are reconciliations of Adjusted operating income, Adjusted net income, Adjusted EPS, EBITDA and Adjusted EBITDA to the comparable measures of net income and operating income, as determined in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”). We have reconciled Adjusted operating income to Operating income; Adjusted net income to Net income; Adjusted EPS to EPS; consolidated EBITDA, segment EBITDA, adjusted EBITDA, and adjusted segment EBITDA to net income. The reconciliation of segment EBITDA to net income was performed on a consolidated basis due to the fact that we do not allocate consolidated interest expense or the consolidated provision for income taxes to our segments.

~~Management uses Adjusted operating income, Adjusted net income,~~The following discussion and ~~Adjusted EPS as metrics by which to measure performance of~~analysis should be read in conjunction with the Company since they exclude items that are not reflective of ongoing operations, such as gains/losses on the sale of businesses, restructuring expenses, and pension settlements. Management also supplements its U.S. GAAP financial statements with adjusted information to provide investors with greater insight, transparency, and a more comprehensive understanding of the information used by management in its financial and operational decision making.

EBITDA means earnings before interest, income taxes, depreciation and amortization. Given the acquisitive nature of the Company which results in a higher level of amortization expense from recently acquired businesses, management uses EBITDA as an internal operating metric to provide another representation of the businesses’ performance across our three segments and for enterprise valuation purposes. EBITDA is also used to calculate certain financial covenants, as discussed in Note 5 of the Notes toCompany’s Consolidated Financial Statements and related notes in ~~Part II,~~ this annual report. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. The Company’s actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Item ~~8, “Financial Statements~~1A, “Risk Factors” and ~~Supplementary Data.~~elsewhere in this annual report.

This discussion includes certain non-GAAP financial measures that have been defined and reconciled to their most directly comparable measures that are in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) later in this Item under the headings “Non-GAAP Disclosures” and “Free Cash Flow.” ~~In addition, EBITDA~~This discussion also includes Operating working capital which has been ~~adjusted for items that are not reflective of ongoing operations, such as gains/losses on~~defined later in this Item under the sale of businesses, restructuring expenses, and pension settlements to arrive at Adjusted EBITDA. Management believes that Adjusted EBITDA is useful as a performance indicator of ongoing operations. We believe that Adjusted EBITDA is also useful to some investors as an indicator of the strength and performance of the Company and its segments’ ongoing business operations and a way to evaluate and compare operating performance and value companies within our industry. The definition of Adjusted EBITDA used here may differ from that used by other companies.

heading “Cash Flow Summary.” The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures prepared in accordance with U.S. GAAP. The financial results prepared in accordance with U.S. GAAP and the reconciliations from these results should be carefully evaluated.

2022 Overview

1. Reconciliations of Consolidated EBITDA

For the Years Ended December 31,
2017 2016 2015 2014 2013
(In thousands)
Net income $ 337,257
$ 271,109
$ 282,807
$ 279,386
$ 255,215
+ Provision for income taxes 118,016
97,403
109,538
113,054
97,914
+ Interest expense 44,889
45,616
41,636
41,895
42,206
+ Depreciation and amortization 84,216
86,892
78,120
76,907
79,334
EBITDA 584,378
501,020
512,101
511,242
474,669
+ Restructuring expenses 8,455
3,674
11,239
13,672
—
+ Loss (gain) on sale of businesses - net (9,273 ) 22,298
(18,070 ) —
—
+ Pension settlement —
3,554
—
—
—
Adjusted EBITDA $ 583,560
$ 530,546
$ 505,270
$ 524,914
$ 474,669

Net sales $ 2,287,312
$ 2,113,043
$ 2,020,668
$ 2,147,767
$ 2,024,130
EBITDA margin 25.5 % 23.7 % 25.3 % 23.8 % 23.5 %
Adjusted EBITDA margin 25.5 % 25.1 % 25.0 % 24.4 % 23.5 %

2. Reconciliations of Segment EBITDA

For the Years Ended December 31,
2017 2016 2015
FMT HST FSDP FMT HST FSDP FMT HST FSDP
(In thousands)
EBITDA $ 263,610
$ 225,649
$ 159,610
$ 242,892
$ 200,980
$ 135,400
$ 233,008
$ 200,953
$ 123,249
+ Restructuring expenses 3,374
4,696
255
932
1,117
1,425
7,090
3,408
576
+ Pension settlement —
—
—
2,032
—
540
—
—
—
Adjusted EBITDA $ 266,984
$ 230,345
$ 159,865
$ 245,856
$ 202,097
$ 137,365
$ 240,098
$ 204,361
$ 123,825

Net sales $ 880,957
$ 820,131
$ 587,533
$ 849,101
$ 744,809
$ 520,009
$ 860,792
$ 738,996
$ 423,915
EBITDA margin 29.9 % 27.5 % 27.2 % 28.6 % 27.0 % 26.0 % 27.1 % 27.2 % 29.1 %
Adjusted EBITDA margin 30.3 % 28.1 % 27.2 % 29.0 % 27.1 % 26.4 % 27.9 % 27.7 % 29.2 %

3. Reconciliations of Consolidated Reported-to-Adjusted Operating Income and Margin

For the Years Ended December 31,
2017 2016 2015 2014 2013
(In thousands)
Operating income $ 502,556
$ 412,397
$ 436,990
$ 434,924
$ 404,558
+ Restructuring expenses 8,455
3,674
11,239
13,672
—
+ Loss (gain) on sale of businesses - net (9,273 ) 22,298
(18,070 ) —
—
Adjusted operating income $ 501,738
$ 438,369
$ 430,159
$ 448,596
$ 404,558

Net sales $ 2,287,312
$ 2,113,043
$ 2,020,668
$ 2,147,767
$ 2,024,130

Operating margin 22.0 % 19.5 % 21.6 % 20.3 % 20.0 %
Adjusted operating margin 21.9 % 20.7 % 21.3 % 20.9 % 20.0 %

4. Reconciliations of Segment Reported-to-Adjusted Operating Income and Margin

For the Years Ended December 31,
2017 2016 2015
FMT HST FSDP FMT HST FSDP FMT HST FSDP
(In thousands)
Operating income $ 241,030
$ 179,567
$ 147,028
$ 217,500
$ 153,691
$ 123,605
$ 206,419
$ 158,364
$ 117,346
+ Restructuring expenses 3,374
4,696
255
932
1,117
1,425
7,090
3,408
576
Adjusted operating income $ 244,404
$ 184,263
$ 147,283
$ 218,432
$ 154,808
$ 125,030
$ 213,509
$ 161,772
$ 117,922

Net sales $ 880,957
$ 820,131
$ 587,533
$ 849,101
$ 744,809
$ 520,009
$ 860,792
$ 738,996
$ 423,915

Operating margin 27.4 % 21.9 % 25.0 % 25.6 % 20.6 % 23.8 % 24.0 % 21.4 % 27.7 %
Adjusted operating margin 27.7 % 22.5 % 25.1 % 25.7 % 20.8 % 24.0 % 24.8 % 21.9 % 27.8 %

5. Reconciliations of Reported-to-Adjusted Net Income and EPS

For the Years Ended December 31,
2017 2016 2015 2014 2013
(In thousands)
Net income $ 337,257
$ 271,109
$ 282,807
$ 279,386
$ 255,215
+ Restructuring expenses 8,455
3,674
11,239
13,672
—
+ Tax impact on restructuring expenses (2,772 ) (1,299 ) (3,586 ) (4,235 ) —
+ Loss (gain) on sale of businesses (9,273 ) 22,298
(18,070 ) —
—
+ Tax impact on loss (gain) on sale of businesses —
(9,706 ) 4,839
—
—
+ Pension settlement —
3,554
—
—
—
+ Tax impact on pension settlement —
(1,257 ) —
—
—
Adjusted net income $ 333,667
$ 288,373
$ 277,229
$ 288,823
$ 255,215

EPS $ 4.36
$ 3.53
$ 3.62
$ 3.45
$ 3.09
+ Restructuring expenses 0.11
0.05
0.14
0.17
—
+ Tax impact on restructuring expenses (0.04 ) (0.02 ) (0.04 ) (0.05 ) —
+ Loss (gain) on sale of businesses (0.12 ) 0.29
(0.23 ) —
—
+ Tax impact on loss (gain) on sale of businesses —
(0.13 ) 0.06
—
—
+ Pension settlement —
0.05
—
—
—
+ Tax impact on pension settlement —
(0.02 ) —
—
—
Adjusted EPS $ 4.31
$ 3.75
$ 3.55
$ 3.57
$ 3.09

Diluted weighted average shares 77,333
76,758
77,972
80,728
82,489

6. Reconciliations of EBITDA to Net Income (dollars in thousands)

For the Year Ended December 31, 2017
FMT HST FSDP Corporate IDEX
Operating income (loss) $ 241,030
$ 179,567
$ 147,028
$ (65,069 ) $ 502,556
- Other (income) expense - net 1,007
(795 ) 1,959
223
2,394
+ Depreciation and amortization 23,587
45,287
14,541
801
84,216
EBITDA 263,610
225,649
159,610
(64,491 ) 584,378
- Interest expense 44,889
- Provision for income taxes 118,016
- Depreciation and amortization 84,216
Net income $ 337,257

Net sales (eliminations) $ 880,957
$ 820,131
$ 587,533
$ (1,309 ) $ 2,287,312

Operating margin 27.4 % 21.9 % 25.0 % n/m
22.0 %
EBITDA margin 29.9 % 27.5 % 27.2 % n/m
25.5 %

For the Year Ended December 31, 2016
FMT HST FSDP Corporate IDEX
Operating income (loss) $ 217,500
$ 153,691
$ 123,605
$ (82,399 ) $ 412,397
- Other (income) expense - net 3,066
(1,991 ) 161
(2,967 ) (1,731 )
+ Depreciation and amortization 28,458
45,298
11,956
1,180
86,892
EBITDA 242,892
200,980
135,400
(78,252 ) 501,020
- Interest expense 45,616
- Provision for income taxes 97,403
- Depreciation and amortization 86,892
Net income $ 271,109

Net sales (eliminations) $ 849,101
$ 744,809
$ 520,009
$ (876 ) $ 2,113,043

Operating margin 25.6 % 20.6 % 23.8 % n/m
19.5 %
EBITDA margin 28.6 % 27.0 % 26.0 % n/m
23.7 %

For the Year Ended December 31, 2015
FMT HST FSDP Corporate IDEX
Operating income (loss) $ 206,419
$ 158,364
$ 117,346
$ (45,139 ) $ 436,990
- Other (income) expense - net 1,073
238
148
1,550
3,009
+ Depreciation and amortization 27,662
42,827
6,051
1,580
78,120
EBITDA 233,008
200,953
123,249
(45,109 ) 512,101
- Interest expense 41,636
- Provision for income taxes 109,538
- Depreciation and amortization 78,120
Net income $ 282,807

Net sales (eliminations) $ 860,792
$ 738,996
$ 423,915
$ (3,035 ) $ 2,020,668

Operating margin 24.0 % 21.4 % 27.7 % n/m
21.6 %
EBITDA margin 27.1 % 27.2 % 29.1 % n/m
25.3 %

7. Reconciliation of the Change in Net Sales to Net Organic Sales

For the Year Ended December 31,
2017 2016 2015
FMT HST FSDP IDEX FMT HST FSDP IDEX FMT HST FSDP IDEX
Change in net sales 4 % 10 % 13 % 8 % (1 )% 1 % 23 % 5 % (4 )% (2 )% (16 )% (6 )%
- Net impact from acquisitions/divestitures (2 )% 3 % 9 % 2 % 1 % 3 % 27 % 7 % 2 % 2 % — % 2 %
- Impact from FX — % (1 )% — % — % (1 )% (1 )% (1 )% (1 )% (4 )% (3 )% (6 )% (4 )%
Change in organic net sales 6 % 8 %
4 %
6 % (1 )% (1 )%
(3 )%
(1 )% (2 )% (1 )%
(10 )%
(4 )%

~~Refer to Management’s Discussion and Analysis for definition and further discussion on organic sales.~~

~~Item 7.~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~

~~2017~~ ~~Overview and Outlook~~

~~The Company has three reportable business segments: Fluid & Metering Technologies, Health & Science Technologies and Fire & Safety/Diversified Products. Within our three reportable segments,~~

In 2022, the Company ~~maintains thirteen platforms, where we~~achieved a record year in sales driven by robust demand. The Company’s ability to capture price amid inflation pressures and its focus on execution drove record earnings per share. Finally, the Company deployed record capital, within its existing portfolio, with the acquisition of three businesses - Nexsight, KZValve and Muon Group - and through share repurchases to support our future goals.

Select key financial results for the year ended December 31, 2022 when compared to 2021 were as follows:

•Sales of $3.2 billion increased 15%; organic sales were up 13%.

•Net income of $586.7 million increased 31%; Net income margin of 18.4% increased 210 basis points.

•Diluted EPS attributable to IDEX of $7.71 increased $1.83, or 31%; Adjusted diluted EPS attributable to IDEX of $8.12 increased $1.25, or 18%.

•Adjusted EBITDA of $884.2 million increased 16%; Adjusted EBITDA margin of 27.9% increased 20 basis points.

•Cash flows provided by operating activities of $557.4 million were down as higher earnings were more than offset by an increased investment in working capital. Free cash flow of $489.4 million was 79% of adjusted net income attributable to IDEX.

Focus for 2023

During 2023, the Company’s primary focus will be on:

•Foundational Execution. During 2021 and 2022, the Company experienced both double-digit organic growth and ~~strategic acquisitions. Each of our thirteen platforms is also~~ a ~~reporting unit, where we annually test for goodwill impairment.~~

~~The Fluid & Metering Technologies segment designs, produces,~~challenging operating environment characterized by global supply chain constraints, record inflation and distributes positive displacement pumps, flow meters, valves, injectors, and other fluid-handling pump modules and systems and provides flow monitoring and other services for the food, chemical, general industrial, water & wastewater, agriculture, and energy industries. The Fluid & Metering Technologies segment contains the Energy platform (comprised of Corken, Liquid Controls, SAMPI, and Toptech), the Valves platform (comprised of Alfa Valvole, Richter, and Aegis), the Water platform (comprised of Pulsafeeder, OBL, Knight, ADS, Trebor, and iPEK), the Pumps platform (comprised of Viking and Warren Rupp), and the Agriculture platform (comprised of Banjo).

The Health & Science Technologies segment designs, produces, and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems used in beverage, food processing, pharmaceutical, and cosmetics, pneumatic components and sealing solutions, including very high precision, low-flow rate pumping solutions required in analytical instrumentation, clinical diagnostics, and drug discovery, high performance molded and extruded sealing components, biocompatible medical devices and implantables, air compressors used in medical, dental, and industrial applications, optical components and coatings for applications in the fields of scientific research, defense, biotechnology, life sciences, aerospace, telecommunications, and electronics manufacturing, laboratory and commercial equipment used in the production of micro and nano scale materials, precision photonic solutions used in life science, research, and defense markets, and precision gear and peristaltic pump technologies that meet exacting original equipment manufacturer specifications. The Health & Science Technologies segment contains the Scientific Fluidics & Optics platform (comprised of Eastern Plastics, Rheodyne, Sapphire Engineering, Upchurch Scientific, ERC, CiDRA Precision Services, thinXXS, CVI Melles Griot, Semrock, and AT Films), the Sealing Solutions platform (comprised of Precision Polymer Engineering, FTL Seals Technology, Novotema, and SFC Koenig) the Gast platform, the Micropump platform, and the Material Processing Technologies platform (comprised of Quadro, Fitzpatrick, Microfluidics, and Matcon).

The Fire & Safety/Diversified Products segment produces firefighting pumps and controls, valves, monitors, nozzles, rescue tools, lifting bags and other components and systems for the fire and rescue industry, engineered stainless steel banding and clamping devices used in a variety of industrial and commercial applications, and precision equipment for dispensing, metering, and mixing colorants and paints used in a variety of retail and commercial businesses around the world. The Fire & Safety/Diversified Products segment is comprisedcontinuing effects of the ~~Fire & Safety platform (comprised of Class 1, Hale, Akron Brass, AWG Fittings, Godiva, Dinglee, Hurst Jaws of Life, Lukas, and Vetter),~~COVID-19 environment. In 2023, the ~~Band-It platform, and the Dispensing platform.~~

~~Our 2017 financial results were as follows:~~

~~Sales of $2.3 billion increased 8%, reflecting a 6% increase in organic sales (excluding acquisitions and divestitures) and a 2% increase due to acquisitions/divestitures.~~

~~Operating income of $502.6 million was up 22% and operating margin of 22.0% was up 250 basis points, respectively, from the prior year.~~

~~Net income increased 24% to $337.3 million.~~

~~Diluted EPS of $4.36 increased $0.83, or 24%, compared to 2016.~~

Our 2017 financial results, adjusted for $8.5 million of restructuring expense and a $9.3 million gain on sale of a business, compared to our 2016 financial results, adjusted for $3.7 million of restructuring expense, a $3.6 million pension settlement charge and a $22.3 million lossCompany will renew its focus on the ~~sale~~core elements of ~~businesses - net, were as follows (these non-GAAP measures~~its operating model that are designed to drive efficiency, innovation and growth. As market conditions continue to evolve, the Company believes it will leverage its process-driven fundamental business practices to drive above-market growth and operational excellence.

•Building Great Global Teams. The Company’s teams have ~~been reconciled~~demonstrated their ability to ~~U.S. GAAP measures in Item 6, “Selected Financial Data”):~~

~~Adjusted operating income of $501.7 million was up 14%~~quickly adapt to challenges and ~~adjusted operating margin of 21.9% was up 120 basis points, respectively, from the prior year.~~

~~Adjusted net income increased 16% to $333.7 million.~~

~~Adjusted EPS of $4.31 was 15% higher than prior year adjusted EPS of $3.75.~~

~~Based on continued order strength in the fourth quarter,~~changing conditions as well as ~~benefits from our~~to solve critical problems for customers. The Company is committed to cultivating talent to fuel future growth ~~initiatives~~ and ~~segmentation efforts, we project approximately 5% organic revenue growth in 2018. Full year 2018 EPS is expected~~onboarding leaders who are committed to IDEX core values, talent development and creating an inspiring Company culture. Diversity, Equity and Inclusion continues to be an area of focus, creating environments where people feel they belong and can bring their true selves to work every day.

•Capital Deployment. The Company deployed $1.5 billion over the last two years on growth business opportunities, will continue to identify both organic and inorganic opportunities and believes there will be a high quality pipeline for potential acquisitions. The Company believes that its strong operating cash flow and balance sheet enable deployment

Table of Contents

of additional capital to acquire IDEX-like businesses in ~~the range of $4.90~~2023 to ~~$5.10.~~further strengthen its portfolio. The Company anticipates that 2023 organic investment opportunities will be in line with 2022 spending.

Results of Operations

The following is a discussion and analysis of ~~our~~the Company’s results of operations for ~~each of~~ the ~~three years in the period~~year ended December 31, ~~2017.~~2022 compared with the year ended December 31, 2021. For ~~purposes of this Item, reference is made~~the discussion related to the ~~Consolidated Statements~~consolidated results of Operations in Part II, Item 8, “Financial Statements and Supplementary Data.” Segment operating income excludes unallocated corporate operating expenses. Management’s primary measurements of segment performance are sales, operating income, and operating margin.

Inoperations for the following discussion, and throughout this report, references to organic sales, a non-GAAP measure, refers to sales from continuing operations calculated according to generally accepted accounting principles inyear ended December 31, 2021 compared with the United States but excludes (1) the impact of foreign currency translation and (2) sales from acquired or divested businesses during the first twelve months of ownership or divestiture. The portion of sales attributable to foreign currency translation is calculated as the difference between (a) the period-to-period change in organic sales and (b) the period-to-period change in organic sales after applying prior period foreign exchange ratesyear ended December 31, 2020, refer to the ~~current~~Company’s Annual Report on Form 10-K for the year ~~period. Management believes that reporting organic sales provides useful information to investors by helping identify underlying growth trends in our business~~ended December 31, 2021, which was filed with the Securities and facilitating easier comparisons of our revenue performance with prior and future periods and to our peers. The Company excludes the effect of foreign currency translation from organic sales because foreign currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. The Company excludes the effect of acquisitions and divestitures because the nature, size, and number of acquisitions and divestitures can vary dramatically from period to period and between the Company and its peers and can also obscure underlying business trends and make comparisons of long-term performance difficult.Exchange Commission (“SEC”) on February 24, 2022.

Performance in ~~2017~~2022 Compared with ~~2016~~2021


	Year Ended December 31,						Change
(Dollars in millions, except per share amounts)	2022			2021			$		% / bps
Net sales	$	3,181.9		$	2,764.8		$	417.1	15	%
Cost of sales	1,755.0			1,540.3			214.7		14	%
Gross profit	1,426.9			1,224.5			202.4		17	%
Gross margin	44.8		%	44.3		%	n/a		50 bps
Selling, general and administrative expenses	652.7			578.2			74.5		13	%
Restructuring expenses and asset impairments	22.8			9.3			13.5		145	%
Operating income	751.4			637.0			114.4		18	%
Operating margin	23.6		%	23.0		%	n/a		60 bps
Gain on sale of business	(34.8)			—			(34.8)		100	%
Other (income) expense - net	(3.9)			16.2			(20.1)		(124	%)
Interest expense	40.7			41.0			(0.3)		(1	%)
Income before income taxes	749.4			579.8			169.6		29	%
Provision for income taxes	162.7			130.5			32.2		25	%
Effective tax rate	21.7		%	22.5		%	n/a		(80) bps
Net income attributable to IDEX	$	586.9		$	449.4		$	137.5	31	%
Diluted earnings per common share attributable to IDEX	$	7.71		$	5.88		$	1.83	31	%

(In thousands) 2017 2016 Change
Net sales $ 2,287,312
$ 2,113,043
8 %
Operating income 502,556
412,397
22 %
Operating margin 22.0 % 19.5 % 250
bps
Net Sales

Sales ~~in 2017 were $2.3 billion, an 8% increase from last year. This increase reflects~~increased 15%, reflecting a 6%13% increase in organic sales, a 5% increase from acquisitions (Muon Group - November 2022, KZValve - May 2022, Nexsight - February 2022, Airtech - June 2021 and ABEL - March 2021) net of divestitures (Knight LLC and its related affiliates (“Knight”) - September 2022), a 1% increase from the acceleration of previously deferred revenue related to the exit of a COVID-19 testing application (see Note 15 in the Notes to the Consolidated Financial Statements for further detail) and a ~~2% increase~~4% unfavorable impact from ~~acquisitions/divestitures (Acquisitions: thinXXS - December 2017; SFC Koenig - September 2016; AWG Fittings - July 2016~~foreign currency translation. Sales increased 23% domestically and ~~Akron Brass - March 2016 / Divestitures: Faure Herman - October 2017; CVI Korea - December 2016; IETG - October 2016; CVI Japan - September 2016~~7% internationally, and ~~Hydra-Stop - July 2016). Sales~~sales to customers outside the U.S. ~~represented~~were approximately ~~49%~~48% and 52% of total sales in ~~2017 compared with 50% in 2016.~~2022 and 2021, respectively.

~~In 2017, Fluid & Metering Technologies contributed 38%~~

Cost of Sales and Gross Margin

Cost of sales increased due to higher sales volume, inflation and 42% of operating income; Health & Science Technologies contributed 36% of sales and 32% of operating income; and Fire & Safety/Diversified Products contributed 26% of sales and 26% of operating income.

acquisitions. Both Gross profit ~~of $1.0 billion in 2017 increased $95.9 million, or 10%, from 2016, while gross~~and Gross margin increased ~~90 basis points~~primarily due to ~~44.9%~~higher volume leverage, favorable price/cost and productivity and the acceleration of previously deferred revenue related to the exit of a COVID-19 testing application, partially offset by increases in ~~2017 from 44.0% in 2016. The increase in gross~~employee-related costs. Gross profit ~~and margin is primarily~~also increased as a result of ~~increased sales volume~~acquisitions, net of the Knight divestiture, partially offset by an unfavorable impact from foreign currency translation.

Selling, General and ~~the dilutive impact in the prior year attributable to $14.7 million of fair value inventory step-up charges from 2016 acquisitions.~~Administrative Expenses

Selling, general and administrative (“SG&A&A”) expenses increased primarily due to ~~$524.9 million in 2017 from $492.4 million in 2016. The $32.5 million increase is mainly attributable to $15.2 million of net incremental~~the impact from acquisitions, ~~and divestitures~~including amortization, as well as higher ~~variable compensation~~discretionary spending, resource investments and ~~stock compensation expense. As~~employee-related costs. Additionally, the prior year included a ~~percentage~~$3.5 million impact of ~~sales, SG&A expenses were 23.0% for 2017 and 23.3% for 2016.~~

~~In 2017, the Company divested its Faure Herman business~~a settlement for a ~~pre-tax gain~~corporate transaction indemnity that did not reoccur in 2022.

Table of ~~$9.3 million. In 2016, the Company divested four businesses during the year (Hydra-Stop - July 2016; CVI Japan - September 2016; IETG - October 2016;~~Contents

Restructuring Expenses and ~~CVI Korea - December 2016) for a pre-tax loss-net of $22.3 million.~~Asset Impairments

~~In 2017~~Restructuring expenses and 2016, the Company incurred pre-tax restructuring expenses totaling $8.5 million and $3.7 million, respectively, as part of initiatives that support the implementation of key strategic efforts designed to facilitate long-term, sustainable growth through cost reduction actions primarily consisting of employee reductions and facility rationalization.

~~Operating income of $502.6 million in 2017~~asset impairments increased ~~from $412.4 million in 2016,~~ primarily due to an asset impairment related to the exit of a ~~gain on a divestiture in 2017 compared to a net loss on four divestitures in 2016, higher sales volume and the $14.7 million of fair value inventory step- up charges from 2016 acquisitions,~~COVID-19 testing application, partially offset by ~~higher restructuring~~lower severance costs in ~~2017~~2022. See Note 15 in the Notes to the Consolidated Financial Statements for further detail.

Operating Income

Operating income increased 18%, reflecting a 19% increase in organic operating income, a 2% increase from acquisitions net of divestitures (Knight - September 2022), a 1% favorable net impact from the exit of a COVID-19 testing application, partially offset by a 4% unfavorable impact from foreign currency translation. The increase in organic operating income is attributable to higher volume leverage, favorable price/cost and ~~overall~~operational productivity, partially offset by increases in employee-related costs, discretionary spending and resource investments.

Operating Margin

Operating margin increased 60 basis points, reflecting a 130 basis point increase in organic operating margin, partially offset by a 70 basis point decrease due to acquisitions primarily driven by higher ~~SG&A costs~~amortization. The increase in ~~2017~~organic operating margin is primarily due to higher ~~variable~~volume leverage, favorable price/cost and ~~share-based compensation as well as outside consulting costs. Operating margin~~operational productivity, partially offset by increases in employee-related costs, discretionary spending and resource investments.

Gain on Sale of ~~22.0%~~Business

In the third quarter of 2022, the Company completed the sale of Knight for proceeds of $49.4 million, net of cash remitted, resulting in ~~2017 was up 250 basis points from 19.5% in 2016 primarily due to the~~a pre-tax gain on the sale of ~~a business in 2017 compared to a net loss on the sale~~$34.8 million. The Company recorded $5.5 million of ~~businesses in 2016, the dilutive impact~~income tax expense associated with this transaction as Provision for income taxes in the ~~prior~~Consolidated Statements of Income during the year ~~due to $14.7 million of fair value inventory step-up charges from 2016 acquisitions, as well as higher volume and productivity initiatives.~~ended December 31, 2022.

Other (Income) Expense - Net

Other (income) expense - net ~~changed~~was $3.9 million of income in 2022 compared to $16.2 million of expense in 2021. The prior year included an $8.6 million noncash loss related to the termination of the U.S. pension plan, net of curtailment and an $8.6 million loss on early debt redemption. Additionally, 2022 included $3.1 million of gains on the sale of assets and $2.5 million of foreign currency transaction gains, partially offset by ~~$4.1~~$2.3 million ~~from income~~ of ~~$1.7 million in 2016 to~~losses on trading securities.

Interest Expense

Interest expense ~~of $2.4 million in 2017 mainly~~decreased primarily due to ~~a $4.7 million foreign exchange gain~~lower weighted average interest rates on ~~intercompany loans~~the Company’s indebtedness, partially offset by an increase in the amount of debt outstanding compared with 2021 due to borrowings under the Term Facility and the Revolving Facility, both of which were used to fund the acquisition of Muon Group. Additionally, the prior year included $1.6 million of interest expense for the interest rate contract associated with the 4.20% Senior Notes that did not ~~repeat~~reoccur in ~~2017 due to the fact that the Company entered into foreign currency exchange contracts to minimize the earnings impact associated with these intercompany loans.~~2022.

~~Interest expense decreased to $44.9 million in 2017 from $45.6 million in 2016.~~

Income Taxes

The ~~decrease was primarily due to slightly lower borrowings in 2017 compared with 2016.~~

~~The~~Company’s provision for income taxes is based upon estimated annual tax rates for the year applied to federal, state, and foreign income. The provision for income taxes increased $32.2 million to ~~$118.0~~$162.7 million in ~~2017~~2022 as compared ~~to $97.4~~with $130.5 million in ~~2016.~~2021 due to higher earnings. The 2022 effective tax rate of 21.7% decreased ~~to 25.9% in 2017~~ compared ~~to 26.4% in 2016~~with the 2021 effective tax rate of 22.5% primarily due to tax benefits realized from the ~~enactment~~divestiture of Knight as well as from realizing foreign currency impacts in connection with the funding of the ~~Tax Cuts~~acquisition of Muon Group.

Results of Reportable Business Segments

The Company has three reportable segments: Fluid & Metering Technologies (“FMT”), Health & Science Technologies (“HST”) and ~~Jobs Act (the “Tax Act”~~Fire & Safety/Diversified Products (“FSDP”). For a detailed description of the operations within each segment, please refer to Part I, Item 1, a“Business” of this Annual Report on Form 10-K.

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Within its three reportable segments, the Company maintains 13 reporting units where the Company focuses on organic growth and strategic acquisitions. Management’s primary measurements of segment performance are sales, Adjusted EBITDA and Adjusted EBITDA margin.

During the fourth quarter of 2022, the Company changed the segment measure of profit and loss used by the Chief Operating Decision Maker ("CODM") in accordance with Accounting Standards Codification ("ASC") 280, Segment Reporting, from operating income to Adjusted EBITDA. The change in segment measure of profit and loss aligns with how the CODM allocates resources and evaluates the performance of the business. It also allows the Company to better assess operating results over time since it excludes items that are not reflective of ongoing operations. For further discussion related to the Company’s change in the ~~permanent reinvestment assertion related to certain foreign subsidiaries~~segment measure of profit and loss used by the CODM as well as the ~~incurrence~~definition of ~~certain foreign income withholding taxes~~Adjusted EBITDA, refer to Note 14 in ~~the prior year. These amounts were offset by the prior year tax benefits on the divestitures of CVI Korea~~Part II, Item 8, “Financial Statements and CVI Japan, certain return-to-provision adjustments, a partial change in the assertion of permanent reinvestment of certain foreign earnings, as well as the mix of global pre-tax income among jurisdictions.Supplementary Data.”

On December 22, 2017, the President of the United States signed into law the Tax Act. The Tax Act included significant changes to the existing tax law, including, but not limited to, a permanent reduction to the U.S. federal corporate income tax rate from 35% to 21%, effective January 1, 2018, and the creation of a territorial tax system with a one-time repatriation tax on deferred foreign income (“Transition Tax”). We have estimated our provision for income taxes in accordance with the Tax Act and guidance available as of the date of this filing and as a result have recorded a net $0.1 million tax benefit in the fourth quarter of 2017, the period in which the legislation was enacted. Although the net effect from the Tax Act was a $0.1 million tax benefit, there were several offsetting adjustments, including: a $40.6 million provisional tax benefit related to the remeasurement of certain deferred tax assets and liabilities, based on the rates at which they are expected to reverse in the future; $30.3 million of provisional tax expense related to the one-time Transition Tax on the mandatory deemed repatriation of foreign earnings based on cumulative foreign earnings of $779.0 million; and an additional $10.2 million of tax expense primarily related to the removal of the permanent reinvestment representation with respect to certain of its subsidiaries in Canada, Italy, and Germany.

The Tax Act also establishes new provisions that will affect the Company’s 2018 results, including but not limited to, a reduction in the U.S. corporate tax rate on domestic operations from 35 percent to 21 percent; a tax on certain income from foreign operations (Global Intangible Low-Tax Income, or “GILTI”); a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; the repeal of the domestic manufacturing deduction; and limitations on the deductibility of certain employee compensation.

~~On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118,~~ ~~Income Tax Accounting Implications of the Tax Cuts and Jobs Act~~ (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provision of the tax laws that were in effect immediately before the enactment of the Tax Act. While the Company is able to make reasonable estimates of the impact of the reduction in corporate rate and the deemed repatriation transition tax, the final impact of the Tax Act may differ from these estimates, due to, among other things, changes in the Company’s interpretations and assumptions, additional guidance that may be issued by either the Internal Revenue Service or the U.S. Department of Treasury, and actions the Company may take. SAB 118 provides up to a one-year window for companies to finalize the accounting for the impacts of this new legislation and the Company anticipates finalizing its accounting during 2018. The Company has determined the following items are provisional amounts and reasonable estimates as of December 31, 2017: $40.6 million of deferred tax benefit recorded in connection with the remeasurement of certain deferred

tax assets and liabilities, $30.3 million of current tax expense recorded in connection with the Transition Tax on the mandatory deemed repatriation of foreign earnings and $9.2 million of deferred tax expense recorded in connection with the removal of the permanent reinvestment representation with respect to certain of its subsidiaries in Canada, Italy and Germany.

~~Net income for the year of $337.3 million increased from $271.1 million in 2016. Diluted earnings per share in 2017 of $4.36 increased $0.83 from $3.53 in 2016.~~

Fluid & Metering Technologies Segment


	Year Ended December 31,								Components of Change
(Dollars in millions)	2022			2021			Change		Organic		Acq/Div(1)		Foreign Currency		Total
Net sales	$	1,167.3		$	998.7		17	%	13	%	7	%	(3	%)	17	%
Adjusted EBITDA	374.2			297.0			26	%	23	%	6	%	(3	%)	26	%
Adjusted EBITDA margin	32.1		%	29.7		%	240 bps		280 bps		(40) bps		—		240 bps

(In thousands) 2017 2016 Change
Net sales $ 880,957
$ 849,101
4 %
Operating income 241,030
217,500
11 %
Operating margin 27.4 % 25.6 % 180
bps

(1) Acquisitions included KZValve in May 2022, Nexsight in February 2022 and ABEL in March 2021. Divestitures included Knight in September 2022. Based on the timing of its acquisition, ABEL results for the first two months of 2022 are reflected in the acquisitions/divestitures column while the remaining year-over-year impact is included in the organic column.

•Sales ~~of $881.0 million~~ increased $31.9 million, or 4%, in 2017 compared with 2016. This increase reflected a 6% increase in organic sales and a 2% decline from divestitures (Faure Herman - October 2017; IETG - October 2016; and Hydra-Stop - July 2016). In 2017, sales were up 7%24% domestically and ~~down 1%~~9% internationally. Sales to customers outside the U.S. were approximately ~~42%~~43% and 47% of total segment sales in ~~2017 compared with 44%~~2022 and 2021, respectively.

•The change in ~~2016.~~

~~Sales within our Energy platform decreased compared~~organic sales was attributed to ~~2016 primarily~~increases in the Pumps reporting unit due to ~~the impact of the 2017 divestiture as well as a large, non-recurring project in 2016 and weakness~~continued favorable demand in the ~~midstream oil~~industrial and gas markets, partially offset by continued strength within the aviation market, increased market share in LPG mobile and increasing truck builds. Sales within our Pumps platform increased compared to 2016 due to strength in the upstream oil market and the improving economy as well as a strong U.S. distribution channel. Sales within the Water platform decreased slightly compared to 2016 primarily due to the Hydra-Stop and IETG divestitures, partially offset by increased municipal spending and share gain from new product development. Sales within our Agriculture platform increased year over year due to increased demand across both OEM and distribution channels as well as pre-season order strength in the fourth quarter of 2017. Sales within the Valves platform increased over 2016 as a result of strong global industrialenergy markets as well as strong price capture. Additionally, there were increases in the Energy reporting unit due to a continued rebound in the refined fuel, liquefied petroleum gas and aviation markets as well as improved operational performance, increases in the Agriculture reporting unit due to strong market performance driven by favorable commodity prices and global demand for crops and increases in the Water reporting unit due to an ~~uptick in chemical markets.~~overall positive municipal water market and water-saving targeted growth initiatives.

~~Operating income and operating~~•Adjusted EBITDA margin of ~~$241.0 million and 27.4%, respectively, were higher than~~32.1% increased 240 basis points compared with 29.7% in 2021. The change in Adjusted EBITDA margin was attributed to the ~~$217.5 million and 25.6%, respectively, recorded in 2016, primarily~~following:

◦Organic Adjusted EBITDA margin increased 280 basis points due to strong price/cost, favorable productivity ~~initiatives~~ and higher ~~volume.~~volume leverage, partially offset by increases in employee-related costs, discretionary spending and resource investments.

◦Acquisitions negatively impacted Adjusted EBITDA margin by 40 basis points due to the dilutive impact from acquisitions on overall FMT Adjusted EBITDA margin.

Health & Science Technologies Segment


	Year Ended December 31,								Components of Change
(Dollars in millions)	2022			2021			Change		Organic		Acq/Div(1)		Other(2)		Foreign Currency		Total
Net sales	$	1,339.2		$	1,121.8		19	%	15	%	6	%	2	%	(4	%)	19	%
Adjusted net sales(3)	1,321.3			1,121.8			17	%	15	%	6	%	—		(4	%)	17	%
Adjusted EBITDA	411.8			355.9			16	%	13	%	6	%	—		(3	%)	16	%
Adjusted EBITDA margin	31.2		%	31.7		%	(50) bps		(70) bps		—		—		20 bps		(50) bps

(1) Acquisitions included Muon Group in November 2022 and Airtech in June 2021. Based on the timing of its acquisition, Airtech results for the first six months of 2022 are reflected in the acquisitions/divestitures column while the remaining year-over-year impact is included in the organic column.

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(In thousands) 2017 2016 Change
Net sales $ 820,131
$ 744,809
10 %
Operating income 179,567
153,691
17 %
Operating margin 21.9 % 20.6 % 130
bps

Sales of $820.1 million increased $75.3 million, or 10%, in 2017 compared with 2016. This increase reflected an 8% increase in organic sales, a 3% increase from acquisitions / divestitures (Acquisitions: thinXXS - December 2017 and SFC Koenig - September 2016 / Divestitures: CVI Korea - December 2016 and CVI Japan - September 2016) and 1% of unfavorable foreign currency translation. In 2017, sales increased 10% both domestically and internationally. Sales to customers outside the U.S. were approximately 55% of total segment sales in both 2017 and 2016.

Sales within our Scientific Fluidics & Optics platform increased compared to 2016 due to strong demand in all primary end markets, including analytical instrumentation, in-vitro diagnostics and biotechnology, DNA sequencing and semiconductor, partially offset by(2)Includes the impact of the ~~CVI Japan and CVI Korea divestitures in 2016. Sales within our Material Processing Technologies platform were relatively flat compared to the prior year primarily due to the impact~~acceleration of strategic changes in product focus which resulted in discontinued products, offset by global strength in the food and pharma end markets and a strong project funnel. Sales within our Sealing Solutions platform increased significantly compared to 2016 due to the full year impactpreviously deferred revenue of the SFC Koenig acquisition in 2016 as well as strength in the semiconductor market and an uptick in the oil and gas, mining and automotive markets. Sales in our Gast platform remained relatively flat year over year primarily due to the impact of OEM headwinds during the first half of 2017 offset by increasing demand in industrial and dental markets. Sales within our Micropump platform increased year over year due to solid demand in the North American industrial markets.

~~Operating income and operating margin of $179.6~~$17.9 million and 21.9%, respectively, in 2017 were up from $153.7 million and 20.6%, respectively, in 2016, primarily due to higher volume and the dilutive impact of the inventory step-up charge related to the SFC Koenig acquisition in the prior year, partially offset by higher restructuring expenses in 2017, costs associated with site consolidations within the Material Processing Technologies and the Scientific Fluidics & Optics platforms as well as additional engineering investments and operational challenges as a result of a customer’s decision to discontinue further investment in commercializing its COVID-19 testing application. See Note 15 in the ~~strong growth within~~Notes to Consolidated Financial Statements for further detail.

(3) Adjusted net sales is calculated as net sales less the ~~segment.~~acceleration of previously deferred revenue related to the exit of a COVID-19 testing application. It is used in the calculation of Adjusted EBITDA margin for the full year 2022. Refer to Non-GAAP Disclosures in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further details.

~~Fire & Safety/Diversified Products Segment~~

(In thousands) 2017 2016 Change
Net sales $ 587,533
$ 520,009
13 %
Operating income 147,028
123,605
19 %
Operating margin 25.0 % 23.8 % 120
bps

•Sales ~~of $587.5 million~~ increased $67.5 million, or 13%, in 2017 compared with 2016. This increase reflected a 4% increase in organic sales and a 9% increase due to acquisitions (AWG Fittings - July 2016 and Akron Brass - March 2016). In 2017, sales increased 9%32% domestically and ~~17%~~10% internationally. Sales to customers outside the U.S. were approximately 52% and 56% of total segment sales in ~~2017~~2022 and 2021, respectively.

•The change in organic sales was attributed to increases in the Scientific Fluidics & Optics reporting unit due to strong demand across the analytical instrumentation and life sciences markets, favorable but slowing demand in the semiconductor market and targeted growth initiatives tied to Next Gen Sequencing and satellite broadband, in the Performance Pneumatics Technologies reporting unit driven by strength in the industrial market, price capture and targeted growth initiatives tied to fuel cells and in the Sealing Solutions reporting unit due to favorable performance in the semiconductor, oil and gas and automotive markets.

•Adjusted EBITDA margin of 31.2% decreased 50 basis points compared with ~~51%~~31.7% in ~~2016.~~2021. The change in Adjusted EBITDA margin was attributed to the following:

~~Sales within our Dispensing platform~~◦Organic Adjusted EBITDA margin decreased ~~slightly compared to 2016~~70 basis points due to ~~declining markets~~increases in ~~Latin America~~employee-related costs, discretionary spending and ~~U.S. retail,~~resource investments, partially offset by growing strength in Europe and Asia. Sales increased in our Band-It platform compared to the prior year as a result of rebounding energy markets as well as strength across the transportation and industrial markets and increasing demand in Asia and Latin America. Sales within our Fire & Safety platform increased significantly compared to 2016 primarily due to the full year impact of the prior year acquisitions as well as strength in municipal and North American OEM markets.

~~Operating income of $147.0 million and operating margin of 25.0% were higher than the $123.6 million and 23.8%, respectively, in 2016, primarily due to~~ higher volume leverage and productivity, as well as the full year impact of the Akron Brass and AWG Fittings acquisitions on 2017 financial results and the inclusion of $7.5 million of fair value inventory step-up charges related to the acquisitions in the prior year period.favorable price/cost.

~~Performance in 2016 Compared with 2015~~◦Foreign currency positively impacted Adjusted EBITDA margin by 20 basis points.

(In thousands) 2016 2015 Change
Net sales $ 2,113,043
$ 2,020,668
5 %
Operating income 412,397
436,990
(6 )%
Operating margin 19.5 % 21.6 % (210 ) bps

Sales in 2016 were $2.1 billion, a 5% increase from 2015. This increase reflects a 1% decrease in organic sales, a 1% decrease from foreign currency translation and a 7% increase from acquisitions/divestitures (Acquisitions: SFC Koenig - September 2016; AWG Fittings - July 2016; Akron Brass - March 2016; CiDRA Precision Services - July 2015; Alfa Valvole - June 2015 and Novotema - June 2015. Divestitures: CVI Korea - December 2016; IETG - October 2016; CVI Japan - September 2016; Hydra-Stop - July 2016 and Ismatec - July 2015). Sales to customers outside the U.S. represented approximately 50% of total sales in both 2016 and 2015.

~~In 2016, Fluid & Metering Technologies contributed 40% of sales and 44% of operating income; Health & Science Technologies contributed 35% of sales and 31% of operating income; and~~ Fire & Safety/Diversified Products ~~contributed 25% of sales and 25% of operating income.~~

Gross profit of $930.8 million in 2016 increased $26.5 million, or 3%, from 2015, while gross margin decreased 80 basis points to 44.0% in 2016 from 44.8% in 2015. The increase in gross profit is primarily a result of increased sales volume as a result of acquisitions, while the margin decrease is mainly attributable to $14.7 million of fair value inventory step-up charges from 2016 acquisitions compared to $3.4 million from 2015 acquisitions.

SG&A expenses increased to $492.4 million in 2016 from $474.2 million in 2015. The $18.2 million increase is mainly attributable to $41.4 million of incremental costs from new acquisitions, partially offset by current year divestitures and cost savings from prior year restructuring actions. As a percentage of sales, SG&A expenses were 23.3% for 2016 and 23.5% for 2015.

During 2016, the Company recorded a $22.3 million pre-tax loss on the sale of businesses related to the four divestitures during the year (Hydra-Stop - July 2016; CVI Japan - September 2016; IETG - October 2016; and CVI Korea - December 2016), compared to the $18.1 million pre-tax gain on the sale of a business in 2015 (Ismatec - July 2015).

During 2016, the Company recorded pre-tax restructuring expenses totaling $3.7 million as part of initiatives that support the implementation of key strategic efforts designed to facilitate long-term, sustainable growth through cost reduction actions primarily consisting of employee reductions and facility rationalization. In 2015, the Company recorded $11.2 million of restructuring expenses mainly attributable to employee severance from headcount reductions across all three segments and corporate.

Operating income of $412.4 million in 2016 decreased from $437.0 million in 2015, primarily as a result of the impact of the four divestitures in 2016 and the associated loss compared to the one divestiture in 2015 and the associated gain as well as the incremental fair value inventory step-up charges related to the 2016 acquisitions, partially offset by the reversal of $4.7 million of contingent consideration related to a 2015 acquisition and lower restructuring costs recorded in 2016 compared to 2015. Operating margin of 19.5% in 2016 was down 210 basis points from 21.6% in 2015 primarily due to the loss on the sale of businesses in 2016 compared to a gain on the sale of a business in 2015, partially offset by productivity improvements and lower restructuring costs year over year.

Other (income) expense - net changed by $4.7 million from expense of $3.0 million in 2015 to income of $1.7 million in 2016 mainly due to $4.7 million of foreign currency transaction gains on intercompany loans that were established in conjunction with the SFC Koenig acquisition.

Interest expense increased to $45.6 million in 2016 from $41.6 million in 2015. The increase was primarily due to the $200 million series of Senior Notes issued in 2016 and higher borrowings outstanding on the Revolving Facility.

The provision for income taxes is based upon estimated annual tax rates for the year applied to federal, state and foreign income. The provision for income taxes decreased to $97.4 million in 2016 compared to $109.5 million in 2015. The effective tax rate decreased to 26.4% in 2016 compared to 27.9% in 2015, due to tax benefits on the divestitures of CVI Korea and CVI Japan, certain return-to-provision adjustments and the early adoption of ASU 2016-09 and the related tax effects of share based payments now recognized as a reduction to income tax expense. These adjustments were offset by the incurrence of additional foreign withholding taxes, the prior year revaluation of the Italian deferred tax liability related to the reduction in the Italian statutory tax rate and tax expense on the divestiture of the Hydra-Stop product line and the prior year divestiture of the Ismatec product line as well as the mix of global pre-tax income among jurisdictions.

~~Net income for the year of $271.1 million decreased from the $282.8 million in 2015. Diluted earnings per share in 2016 of $3.53 decreased $0.09 from $3.62 in 2015.~~

~~Fluid & Metering Technologies~~ Segment


	Year Ended December 31,								Components of Change
(Dollars in millions)	2022			2021			Change		Organic		Acq/Div	Other	Foreign Currency		Total
Net sales	$	679.2		$	647.9		5	%	9	%	—	—	(4	%)	5	%
Adjusted EBITDA	183.9			185.7			(1	%)	4	%	—	—	(5	%)	(1	%)
Adjusted EBITDA margin	27.1		%	28.7		%	(160) bps		(140) bps		—	(10) bps	(10) bps		(160) bps

(In thousands) 2016 2015 Change
Net sales $ 849,101
$ 860,792
(1 )%
Operating income 217,500
206,419
5 %
Operating margin 25.6 % 24.0 % 160
bps

•Sales of $849.1 million decreased $11.7 million, or 1%, in 2016 compared with 2015. This decrease reflected a 1% decline in organic sales, a 1% increase from acquisitions (Alfa Valvole - June 2015) and 1% of unfavorable foreign currency translation. In 2016, sales were flatincreased 8% domestically and ~~decreased approximately 3%~~2% internationally. Sales to customers outside the U.S. were approximately ~~44%~~50% and 51% of total segment sales in ~~both 2016~~2022 and ~~2015.~~2021, respectively.

~~Sales within our Energy platform increased compared~~•The change in organic sales was attributed to ~~2015 primarily~~increases in the Fire & Safety reporting unit due to acceptance of targeted growth initiatives, price realization and backlog execution, in the BAND-IT reporting unit due to strength ~~within~~in the ~~aviation~~energy market driven by increases in oil prices and in the automotive market driven by share gain as well as continued favorable industrial performance and in the Dispensing reporting unit due to continued favorable paint market, North American project volume and strong performance in India.

•Adjusted EBITDA margin of 27.1% decreased 160 basis points compared with 28.7% in 2021. The change in Adjusted EBITDA margin was primarily attributed to organic Adjusted EBITDA margin which decreased 140 basis points due to increases in employee-related costs and discretionary spending as well as compressed price/cost, partially offset by ~~continued weakness~~higher volume leverage.

Performance in 2021 Compared with 2020

Due to the change in segment measure of profit and loss discussed above, the following discussion and analysis of the Company’s segment results of operations for the year ended December 31, 2021 compared with the year ended December 31, 2020 has been updated to include Adjusted EBITDA margin for comparative purposes.

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Fluid & Metering Technologies Segment


	Year Ended December 31,								Components of Change
(Dollars in millions)	2021			2020			Change		Organic		Acq/Div(1)		Other	Foreign Currency		Total
Net sales	$	998.7		$	896.3		11	%	6	%	4	%	—	1	%	11	%
Adjusted EBITDA	297.0			271.5			9	%	6	%	2	%	—	1	%	9	%
Adjusted EBITDA margin	29.7		%	30.3		%	(60) bps		(10) bps		(40) bps		—	(10) bps		(60) bps

(1) Acquisitions included ABEL in March 2021 and Flow MD in February 2020. Based on the timing of its acquisition, Flow MD results for the first quarter of 2021 are reflected in the ~~propane and oil and gas markets as well as challenges~~acquisitions/divestitures column while the remaining year-over-year impact is included in the ~~mobile end market.~~ organic column.

•Sales within our Pumps platform (formerly Industrial) decreased compared to 2015 due to weakness in the North American industrial distribution market. Sales within the Water platform decreased due to the divestitures of Hydra-Stop and IETG and slowing demand in the chemical end market, partially offset by increased municipal spending. Sales within our Agriculture platform increased year over year due to increased demand in the second half of 2016 from both OEMs and distributors in anticipation of the 2017 planting season. Sales within the Valves platform, which was created in the third quarter of 2015, increased as a result of the full year impact of the Alfa Valvole acquisition, offset by a challenging oil & gas market and overall weakness in the European market.

Operating income and operating margin of $217.5 million and 25.6%, respectively, were higher than the $206.4 million and 24.0%, respectively, recorded in 2015, primarily due to the full year impact of the Alfa Valvole acquisition as well as productivity initiatives, partially offset by lower volume.

~~Health & Science Technologies Segment~~

(In thousands) 2016 2015 Change
Net sales $ 744,809
$ 738,996
1 %
Operating income (loss) 153,691
158,364
(3 )%
Operating margin 20.6 % 21.4 % (80 ) bps

Sales of $744.8 million increased $5.8 million, or 1%, in 2016 compared with 2015. This increase reflected a 1% decrease in organic sales, a 3% increase from acquisitions / divestitures (Acquisitions: SFC Koenig - September 2016; CiDRA Precision Services - July 2015 and Novotema - May 2015. Divestitures: CVI Korea - December 2016 and CVI Japan - September 2016) and 1% of unfavorable foreign currency translation. In 2016, sales decreased 1%5% domestically and ~~increased 3%~~19% internationally. Sales to customers outside the U.S. were approximately ~~55%~~47% and 44% of total segment sales in ~~both 2016~~2021 and ~~2015.~~2020, respectively.

•The change in organic sales was attributed to increases in the Pumps reporting unit due to recovery within the industrial market, in the Water reporting unit due to recovery of the municipal water market and water-saving growth projects and in the Agriculture reporting unit due to increased global demand, partially offset by a decrease in the Energy reporting unit due to a decline in capital spending in the oil and gas markets.

•Adjusted EBITDA margin of 29.7% decreased 60 basis points compared with 30.3% in 2020. The change in Adjusted EBITDA margin was attributed to the following:

◦Organic Adjusted EBITDA margin decreased 10 basis points due to increases to inventory reserves associated with COVID-19 new product development opportunities not materializing and resource investments, partially offset by higher volume leverage and favorable price/cost.

◦Acquisitions negatively impacted Adjusted EBITDA margin by 40 basis points due to the dilutive impact from acquisitions on overall FMT Adjusted EBITDA margin, which was primarily driven by the Flow MD acquisition.

◦Foreign currency negatively impacted Adjusted EBITDA margin by 10 basis points.

Health & Science Technologies Segment


	Year Ended December 31,								Components of Change
(Dollars in millions)	2021			2020			Change		Organic		Acq/Div(1)		Other	Foreign Currency		Total
Net sales	$	1,121.8		$	896.0		25	%	18	%	5	%	—	2	%	25	%
Adjusted EBITDA	355.9			250.9			42	%	33	%	7	%	—	2	%	42	%
Adjusted EBITDA margin	31.7		%	28.0		%	370 bps		390 bps		—		—	(20) bps		370 bps

(1) Acquisitions included Airtech in June 2021.

•Sales ~~within our~~increased 27% domestically and 24% internationally. Sales to customers outside the U.S. were approximately 56% and 57% of total segment sales in 2021 and 2020, respectively.

•The change in organic sales was attributed to increases in the Scientific Fluidics & Optics ~~platform were down year over year~~reporting unit due to ~~slowed~~recovery within the analytical instrumentation market as well as increased microfluidics and optics demand, in the industrial and laser optics end markets as well as the impact of the CVI Japan and CVI Korea divestitures in 2016 and the Ismatec divestiture in 2015 partially offset by strong demand in the core biotech and in-vitro diagnostic markets coupled with the full year impact of the CiDRA Precision Services acquisition and a strong semiconductor market. Sales within our Material Processing Technologies platform decreased compared to 2015Sealing Solutions reporting unit due to challenges in the North American markets which offset strength in the European and Indian pharma markets. Sales within our Sealing Solutions platform increased compared to 2015 due to the full year impact of the Novotema acquisition in 2015, the 2016 acquisition of SFC Koenig and continued strength in the semiconductor ~~markets,~~market and improvements in the automotive market and in the Material Processing Technologies reporting unit due to increased demand in the food and pharmaceutical markets.

•Adjusted EBITDA margin of 31.7% increased 370 basis points compared with 28.0% in 2020. The change in Adjusted EBITDA margin was attributed to the following:

◦Organic Adjusted EBITDA margin increased 390 basis points due to volume leverage and favorable price/cost, partially offset by ~~pressure in the oil & gas market. Sales in our Gast and Micropump platforms decreased year over year due to continued softness in the North American industrial distribution markets.~~targeted reinvestment.

~~Operating income and operating~~◦Foreign currency negatively impacted Adjusted EBITDA margin by 20 basis points.

Table of $153.7 million and 20.6%, respectively, in 2016 were down from $158.4 million and 21.4%, respectively, in 2015, primarily due to the inventory step-up charges related to the SFC Koenig acquisition, the incremental impact of divestitures, partially offset by volume increases.Contents

Fire & Safety/Diversified Products Segment


	Year Ended December 31,								Components of Change
(Dollars in millions)	2021			2020			Change		Organic		Acq/Div	Other	Foreign Currency		Total
Net sales	$	647.9		$	562.9		15	%	13	%	—	—	2	%	15	%
Adjusted EBITDA	185.7			161.5			15	%	13	%	—	—	2	%	15	%
Adjusted EBITDA margin	28.7		%	28.7		%	—		(10) bps		—	—	10 bps		—

(In thousands) 2016 2015 Change
Net sales $ 520,009
$ 423,915
23 %
Operating income 123,605
117,346
5 %
Operating margin 23.8 % 27.7 % (390 ) bps

•Sales ~~of $520.0 million~~ increased $96.1 million, or 23%, in 2016 compared with 2015. This increase reflected a 3% decline in organic sales, a 27% increase due to acquisitions (AWG Fittings - July 2016 and Akron Brass - March 2016) and 1% of unfavorable foreign currency translation. In 2016, sales increased 28%17% domestically and ~~18%~~13% internationally. Sales to customers outside the U.S. were approximately 51% and 52% of total segment sales in ~~2016 compared with 52%~~2021 and 2020, respectively.

•The change in ~~2015.~~

~~Sales within our~~organic sales was attributed to increases in the Dispensing ~~platform increased year over year~~reporting unit due to strong demand in the paint market and in the BAND-IT reporting unit due to improvements in the aerospace, energy and industrial markets, partially offset by a decrease in the Fire & Safety reporting unit due to a ~~strong Asian market~~lack of large tenders for rescue tools and North America Fire OEM supply chain constraints slowing order to revenue conversion.

•Adjusted EBITDA margin of 28.7% was flat compared with 2020. The change in Adjusted EBITDA margin was attributed to the ~~overall strength of the X-Smart product sales,~~following:

◦Organic Adjusted EBITDA margin decreased 10 basis points due to unfavorable price/cost and mix, partially offset by ~~the foreign~~higher volume.

◦Foreign currency ~~impact caused~~positively impacted Adjusted EBITDA margin by the strength of the U.S. dollar and challenges within the European markets. Sales decreased in our Band-It platform compared to 2015 as a result of declines in the oil & gas market, offset by strength in the transportation industry and the rebound of the European and Asian markets. Sales within our Fire & Safety platform increased compared to 2015 primarily due to the Akron Brass and AWG Fittings acquisitions as well as increased sales due to new product development, partially offset by project delays in Asia and large projects in Europe in 2015 which did not reoccur.10 basis points.

Operating income of $123.6 million was higher than the $117.3 million in 2015, while operating margin of 23.8% was lower than the 27.7% in 2015, primarily due to the dilutive impact of acquisitions on margins and the inventory step-up charges related to the Akron Brass and AWG Fittings acquisitions. The higher operating income is primarily related to the impact of 2016 acquisitions.

Liquidity and Capital Resources

~~Operating Activities~~

Cash flows from operating activities increased $32.8 million, or 8.2%, to $432.8 million in 2017, primarily due to higher earnings in 2017. At December 31, 2017, working capital was $643.1 million and the Company’s current ratio was 2.78 to 1. At December 31, 2017, the Company’s cash and cash equivalents totaled $376.0 million, of which $219.6 million was held outside of the United States.Liquidity

~~Investing Activities~~

Cash flows used in investing activities decreased $454.5 million to $54.7 million in 2017, primarily as a result of $471.8 million less cash paid for acquisitions, $17.3 million of lower proceeds from the sale of businesses, and $6.0 million of higher proceeds from fixed asset disposals, partially offset by $5.6 million of higher capital expenditures.

Cash flows from operations were more than adequate to fund capital expenditures of $43.9 million and $38.2 million in 2017 and 2016, respectively. Capital expenditures were generally for machinery and equipment that improved productivity, although a portion was for business system technology, replacement of equipment, and construction of new facilities. Management believes that the Company has ample capacity in its plants and equipment to meet demand increases for future growth in the intermediate term.

The Company acquired thinXXS in December 2017 for cash consideration of $38.2 million and the assumption of $1.2 million in debt. The purchase price for this acquisition was funded with cash on hand. The Company acquired Akron Brass in March 2016 for cash consideration of $221.4 million; AWG Fittings in July 2016 for cash consideration of $47.5 million (€42.8 million); and SFC Koenig in September 2016 for cash consideration of $241.1 million (€215.9 million). The purchase prices for the 2016 acquisitions were funded with both cash on hand and borrowings under the Company’s revolving facilities.

~~Financing Activities~~

Cash flows from financing activities changed from $46.5 million of cash provided by financing activities in 2016 to $277.4 million of cash used in financing activities in 2017, primarily as a result of higher payments under revolving facilities (net of borrowings) and proceeds from the issuance of $200.0 million senior notes, partially offset by a reduction of $28.2 million of purchases of common stock in 2017 and $7.3 million of lower proceeds from the exercise of stock options.

On June 13, 2016, the Company completed a private placement of $100 million aggregate principal amount of 3.20% Senior Notes due June 13, 2023 and $100 million aggregate principal amount of 3.37% Senior Notes due June 13, 2025 (collectively, the “Notes”) pursuant to a Note Purchase Agreement, dated June 13, 2016 (the “Purchase Agreement”). Each series of Notes bears interest at the stated amount per annum, which is payable semi-annually in arrears on each June 13^th ~~and December 13~~^th. The Notes are unsecured obligations of the Company and rank pari passu in right of payment with all of the Company’s other unsecured, unsubordinated debt. The Company may at any time prepay all, or any portion of the Notes; provided that such portion is greater than 5% of the aggregate principal amount of Notes then outstanding. In the event of a prepayment, the Company will pay an amount equal to par plus accrued interest plus a make-whole amount. In addition, the Company may repurchase the Notes by making an offer to all holders of the Notes, subject to certain conditions.

The Company maintains a revolving credit facility (the “Revolving Facility”), which is a $700.0 million unsecured, multi-currency bank credit facility expiring on June 23, 2020. At December 31, 2017, there was $10.7 million outstanding under the Revolving Facility and $7.2 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility at December 31, 2017 of $682.1 million. Borrowings under the Revolving Facility bear interest, at either an alternate base rate or an adjusted LIBOR rate plus, in each case, an applicable margin. This applicable margin is based on the Company’s senior, unsecured, long-term debt rating and can range from .005% to 1.50%. Based on the Company’s credit rating at December 31, 2017, the applicable margin was 1.10%. Given the fact that LIBOR was negative at December 31, 2017, the default interest rate is equal to the applicable margin, resulting in a weighted average interest rate of 1.10% at December 31, 2017. Interest is payable (a) in the case of base rate loans, quarterly,management’s current expectations and ~~(b) in~~currently available information, the case of LIBOR rate loans, on the maturity date of the borrowing, or quarterly from the effective date for borrowings exceeding three months. The Company may request increases in the lending commitments under the Credit Agreement, but the aggregate lending commitments pursuant to such increases may not exceed $350.0 million. An annual Revolving Facility fee, also based on the Company’s credit rating, is currently 15 basis points and is payable quarterly.

~~On June 9, 2015, the Company paid the balance of the 2.58% Senior Euro Notes, upon its maturity, using cash on hand.~~

On December 9, 2011, the Company completed a public offering of $350.0 million 4.2% senior notes due December 15, 2021 (“4.2% Senior Notes”). The net proceeds from the offering of $346.2 million, after deducting a $0.9 million issuance discount, a $2.3 million underwriting commission and $0.6 million of offering expenses, were used to repay $306.0 million of outstanding

bank indebtedness, with the balance used for general corporate purposes. The 4.2% Senior Notes bear interest at a rate of 4.2% per annum, which is payable semi-annually in arrears on each June 15 and December 15. The Company may redeem all or part of the 4.2% Senior Notes at any time prior to maturity at the redemption prices set forth in the Note Indenture governing the 4.2% Senior Notes. The Company may issue additional debt from time to time pursuant to the Indenture. The Indenture and 4.2% Senior Notes contain covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale-leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all the Company’s assets. The terms of the 4.2% Senior Notes also require the Company to make an offer to repurchase the 4.2% Senior Notes upon a change of control triggering event (as defined in the Indenture) at a price equal to 101% of their principal amount plus accrued and unpaid interest, if any.

On December 6, 2010, the Company completed a public offering of $300.0 million 4.5% senior notes due December 15, 2020 (“4.5% Senior Notes”). The net proceeds from the offering of $295.7 million, after deducting a $1.6 million issuance discount, a $1.9 million underwriting commission and $0.8 million of offering expenses, were used to repay $250.0 million of outstanding bank indebtedness, with the balance used for general corporate purposes. The 4.5% Senior Notes bear interest at a rate of 4.5% per annum, which is payable semi-annually in arrears on each June 15 and December 15. The Company may redeem all or a portion of the 4.5% Senior Notes at any time prior to maturity at the redemption prices set forth in the Note Indenture governing the 4.5% Senior Notes. The Company may issue additional debt from time to time pursuant to the Indenture. The Indenture and 4.5% Senior Notes contain covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale-leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all the Company’s assets. The terms of the 4.5% Senior Notes also require the Company to make an offer to repurchase the 4.5% Senior Notes upon a change of control triggering event (as defined in the Indenture) at a price equal to 101% of their principal amount plus accrued and unpaid interest, if any.

There are two key financial covenants that the Company is required to maintain in connection with the Revolving Facility and the Notes, a minimum interest coverage ratio of 3.0 to 1 and a maximum leverage ratio of 3.50 to 1. At December 31, 2017, the Company was in compliance with both of these financial covenants, as the Company’s interest coverage ratio was 13.64 to 1 and the leverage ratio was 1.45 to 1. There are no financial covenants relating to the 4.5% Senior Notes or 4.2% Senior Notes; however, both are subject to cross-default provisions.

On December 1, 2015 the Company’s Board of Directors approved an increase of $300.0 million in the authorized level for repurchases of common stock. Repurchases under the program will be funded with future cash flow generation or borrowings available under the Revolving Facility. During 2017, the Company purchased a total of 0.3 million shares at a cost of $29.1 million compared to 0.7 million shares purchased in 2016 at a cost of $55.0 million. As of December 31, 2017, there was $551 million of repurchase authorization remaining.

~~The~~ Company believes current cash, cash from operations and cash available under the Revolving Facility will be sufficient to meet its operating cash requirements, planned capital expenditures, interest and principal payments on all borrowings, pension and postretirement funding requirements, ~~authorized~~ share repurchases and ~~annual~~quarterly dividend payments to holders of the Company’s common stock for the ~~next twelve months.~~foreseeable future. Additionally, in the event that suitable businesses are available for acquisition upon acceptable terms, the Company may obtain all or a portion of the financing for these acquisitions through the incurrence of additional borrowings. ~~As of~~

At December 31, ~~2017, $10.7~~2022, working capital was $855.7 million and the Company’s current ratio was 2.6 to 1. At December 31, 2022, the Company’s cash and cash equivalents totaled $430.2 million, of which $373.1 million was held outside of the United States. At December 31, 2022, there was $77.7 million outstanding under the Revolving Facility ~~with $7.2~~and $7.9 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility of $714.4 million. The Company believes that additional borrowings through various financing alternatives remain available, if required.

Cash Flow Summary

The following table is derived from the Consolidated Statements of Cash Flows:


	Year Ended December 31,
(In millions)	2022		2021
Net cash flows provided by (used in):
Operating activities	$	557.4	$	565.3
Investing activities	(917.2)		(698.1)
Financing activities	(37.8)		(9.5)

Operating Activities

Cash flows provided by operating activities decreased $7.9 million to $557.4 million in 2022 as higher earnings were more than offset by an increased investment in working capital.

Operating working capital, calculated as Receivables - net plus Inventories minus Trade accounts payable, is used by management as a measurement of operational results as well as the short-term liquidity of the Company. The following table details operating working capital as of December 31, 2022 and 2021:

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(In millions)	2022		2021
Receivables - net	$	442.8	$	356.4
Inventories	470.9		370.4
Less: Trade accounts payable	208.9		178.8
Operating working capital	$	704.8	$	548.0

Operating working capital increased $156.8 million to $704.8 million at December 31, ~~2017~~2022. Acquisitions, divestitures and foreign currency translation contributed $31.9 million to the increase in operating working capital. Excluding those items, Receivables - net increased $63.1 million as a result of ~~approximately $682.1 million.~~higher volume; Inventories increased $79.0 million to support production amid supply chain challenges; and Trade accounts payable increased $17.2 million due to higher inventory purchases.

Investing Activities

~~Contractual~~

Cash flows used in investing activities increased $219.1 million to $917.2 million in 2022, primarily due to higher cash outflows for acquisitions with the addition of Muon Group, KZValve and Nexsight in 2022 compared to Airtech and ABEL in 2021, partially offset by proceeds received from both the sale of Knight and the sale of marketable securities in 2022 as well as higher proceeds from asset sales in 2022 compared to 2021.

Financing Activities

Cash flows used in financing activities increased $28.3 million from $9.5 million in 2021 to $37.8 million in 2022. During 2022, the Company repurchased 795,423 shares at a cost of $148.1 million, paid $177.4 million in dividends, borrowed $210.4 million under the Revolving Facility and $200.0 million under the Term Facility and repaid $135.0 million of the Revolving Facility. During 2021, the Company issued $500.0 million of 2.625% Senior Notes, redeemed $350.0 million of 4.20% Senior Notes and paid $161.1 million in dividends.

Free Cash Flow

The Company believes free cash flow, a non-GAAP measure, is an important measure of performance because it provides a measurement of cash generated from operations that is available for payment obligations such as operating cash requirements, planned capital expenditures, interest and principal payments on all borrowings, pension and postretirement funding requirements and quarterly dividend payments to holders of the Company’s common stock as well as for funding acquisitions and share repurchases. Free cash flow is calculated as cash flows provided by operating activities less capital expenditures.

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


	Year Ended December 31,
(Dollars in millions)	2022			2021
Cash flows provided by operating activities	$	557.4		$	565.3
Less: capital expenditures	(68.0)			(72.7)
Free cash flow	$	489.4		$	492.6
Free cash flow as a percent of adjusted net income attributable to IDEX(1)	79.2		%	93.8		%

(1) Free cash flow as a percent of adjusted net income attributable to IDEX reflects the impact of excluding acquisition-related intangible asset amortization, net of related taxes, from adjusted net income attributable to IDEX in both periods presented.

The decrease in free cash flow as compared to 2021 is due to the increases in working capital discussed above, which more than offset higher earnings.

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Cash Requirements

Contractual Obligations

~~Our~~

The Company’s contractual obligations include borrowings and related interest, purchase obligations, pension and ~~postretirement~~post-retirement medical benefit plans, rental payments under operating leases, payments under capital leases, a transition tax payable and other ~~long-term~~ obligations arising in the ordinary course of ~~business.~~business (such as acquisition commitments). There are no identifiable events or uncertainties, including the lowering of ~~our~~the Company’s credit rating, which would accelerate payment or maturity of any of these commitments or obligations.

~~The following table summarizes our significant~~ For a description of the funding requirements related to the Company’s contractual obligations, refer to Note 4 (transition tax payable), Note 7 (borrowings and ~~commercial commitments at~~related interest), Note 10 (lease obligations) and Note 18 (pension and post-retirement obligations) in the Notes to Consolidated Financial Statements, respectively. As of December 31, ~~2017, and~~2022, the ~~future periods in~~Company’s purchase obligations, consisting primarily of inventory commitments, totaled approximately $364.4 million, of which ~~such obligations are~~$336.4 million is expected to be settled during 2023 and the remainder thereafter.

Capital Expenditures

Capital expenditures generally include machinery and equipment that support growth and improved productivity, tooling, business system technology, replacement of equipment and investments in ~~cash.~~new facilities. The Company believes it has sufficient operating cash flows to continue to meet current obligations and invest in planned capital expenditures. In ~~addition,~~2022 and 2021, cash flows from operations were more than adequate to fund capital expenditures of $68.0 million and $72.7 million, respectively. The Company recently invested a significant amount of capital to expand the ~~table reflects~~China facility which was completed in late 2022 and the ~~timing~~India facility which is expected to be completed in early 2023, ultimately doubling the Company’s historic capacity in each of ~~principal~~these countries. Otherwise, management considers its facilities suitable and adequate for the Company’s operations and believes it has ample capacity in its plants and equipment to meet demand increases for future growth in the intermediate term, especially given its operational improvement initiatives that usually increase capacity.

Debt Repayment

As of December 31, 2022, the Company has $100.0 million of 3.20% Senior Notes due June 2023. The Company expects to either refinance or repay the Notes using the available borrowing capacity of the Revolving Facility, due November 2027.

Share Repurchases

The Company repurchased 795,423 shares at a cost of $148.1 million in 2022. There were no share repurchases in 2021. As of December 31, 2022, the amount of share repurchase authorization remaining was $563.8 million. For additional information regarding the Company’s share repurchase program, refer to Note 12 in the Notes to Consolidated Financial Statements.

Covenants

The key financial covenants that the Company is required to maintain in connection with the Revolving Facility, the Term Facility and the 2016 Private Placement Notes, are a minimum interest coverage ratio of 3.0 to 1 and a maximum leverage ratio of 3.50 to 1. At December 31, 2022, the Company was in compliance with both of these financial covenants, as the Company’s interest coverage ratio was 24.39 to 1 for covenant calculation purposes and the leverage ratio was 1.55 to 1. There are no financial covenants relating to the 2.625% Senior Notes or the 3.00% Senior Notes; however, both are subject to cross-default provisions. For a discussion of the Company’s Revolving Facility and Senior Notes as well as the associated covenants, refer to Note 7 in the Notes to Consolidated Financial Statements.

Credit Ratings

The Company’s credit ratings, which were independently developed by the following credit agencies, are detailed below:

•S&P Global Ratings affirmed the Company’s corporate credit rating of BBB (stable outlook) in August 2022.

•Moody’s Investors Service affirmed the Company’s corporate credit rating of Baa2 (stable outlook) in December 2021.

•Fitch Ratings affirmed the Company’s corporate credit rating of BBB+ (stable outlook) in March 2022.

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Dividends

The Company increased its quarterly cash dividend by 11% from $0.54 per common share in 2021 to $0.60 per common share in 2022. Total dividend payments to common shareholders were $177.4 million in 2022 compared with $161.1 million in 2021.

Critical Accounting Estimates

The Company believes that the application of the following accounting policy, which is important to its financial position and results of operations, requires significant judgments and estimates on ~~outstanding borrowings. Additional detail regarding these obligations is provided~~the part of management. For a summary of all of the Company’s accounting policies, including the accounting policy discussed below, see Note 1 in the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data.”

Payments Due by Period Total
Less
Than
1 Year

1-3
Years

3-5
Years

More
Than
5 Years
(In thousands)
Borrowings ⁽¹⁾
$ 1,006,865
$ 37,147
$ 381,853
$ 377,840
$ 210,025
Operating lease obligations 64,859
15,992
21,529
11,904
15,434
Capital lease obligations ⁽²⁾
268
258
10
—
—
Purchase obligations ⁽³⁾
137,685
132,152
3,716
1,389
428
Repatriation tax payable 30,301
2,424
4,848
4,848
18,181
Pension and post-retirement obligations 112,621
13,602
22,288
22,021
54,710
Total contractual obligations ⁽⁴⁾
$ 1,352,599
$ 201,575
$ 434,244
$ 418,002
$ 298,778


~~(1)~~	~~Includes interest payments based on contractual terms and current interest rates for variable debt.~~


~~(2)~~	~~Consists primarily of tangible personal property leases.~~


~~(3)~~	~~Consists primarily of inventory commitments.~~


~~(4)~~	~~Comprises liabilities recorded on the balance sheet of $993.9 million, and obligations not recorded on the balance sheet of $358.7 million.~~

~~Critical Accounting Policies~~

We believe that the application of the following accounting policies, which are important to our financial position and results of operations, require significant judgments and estimates on the part of management. For a summary of all of our accounting policies, including the accounting policies discussed below, see Note 1 of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data.”

~~Revenue recognition~~ — The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability of the sales price is reasonably assured. For product sales, delivery does not occur until the products have been shipped and risk of loss has been transferred to the customer. Revenue from services is recognized when the services are provided or ratably over the contract term. Some arrangements with customers may include multiple deliverables, including the combination of products and services. In such cases, the Company has identified these as separate elements in accordance with ASC 605-25, ~~Revenue Recognition-Multiple-Element Arrangements~~, and recognizes revenue consistent with the policy for each separate element based on the relative selling price method. Revenues from certain long-term contracts are recognized on the percentage-of-completion method. Percentage-of-completion is measured principally by the percentage of costs incurred to date for each contract to the estimated total costs for such contract at completion. Provisions for estimated losses on uncompleted long-term contracts are made in the period in which such losses are determined. Due to uncertainties inherent in the estimation process, it is reasonably possible that completion costs, including those arising from contract penalty provisions and final contract settlements, will be revised in the near-term. Such revisions to costs and income are recognized in the period in which the revisions are determined.

The Company records allowances for discounts, product returns and customer incentives at the time of sale as a reduction of revenue as such allowances can be reliably estimated based on historical experience and known trends. The Company also offers product warranties and accrues its estimated exposure for warranty claims at the time of sale based upon the length of the warranty period, warranty costs incurred and any other related information known to the Company.

Goodwill ~~long-lived~~ and intangible assets — The Company evaluates the recoverability of certain noncurrent assets utilizing various estimation processes. An impairment of a long-lived asset exists when the asset’s carrying amount exceeds its fair value, and is recorded when the carrying amount is not recoverable through future operations. An impairment of an indefinite-lived intangible asset or goodwill exists when the carrying amount of the intangible asset or goodwill exceeds its fair value. Assessments of possible impairments of long-lived or indefinite-lived intangible assets or goodwill are made if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Additionally, testing for possible impairments of recorded indefinite-lived intangible asset balances and goodwill is performed annually. On October 31, or more frequently if triggering events occur, the Company compares the fair value of each reporting unit to the carrying amount of each reporting unit to determine if a goodwill impairment exists. The amount andtiming of impairment charges for these assets require the estimation of future cash flows to determine the fair value of the related assets. In 2017 and 2016, the Company concluded that certain long-lived assets had a fair value that was less than the carrying value of the assets, resulting in zero and $0.2 million of long-lived asset impairment charges, respectively.

The Company’s business acquisitions result in recording goodwill and other intangible assets, which affect the amount of amortization expense and possible impairment expense that the Company will incur in future periods. The Company evaluates the recoverability of certain noncurrent assets utilizing various estimation processes. The Company follows the guidance prescribed in ~~ASC~~Accounting Standards Codification (“ASC”) 350, Goodwill and Other Intangible Assets, to test goodwill and intangible assets for impairment. The Company determines the fair value of each reporting unit utilizing an income approach (discounted cash flows) weighted 50% and a market approach (consisting of a comparable public company multiples methodology) weighted 50%. The Company uses the relief-from-royalty method, a form of the income approach, to determine the fair value of its indefinite-lived intangible assets. The relief-from-royalty method is dependent on a number of significant management assumptions, including estimates of revenues, royalty rates and discount rates. To determine the reasonableness of the calculated fair values, the Company reviews the assumptions to ensure that neither the income approach nor the market approach yielded significantly different valuations. Based on the results of the Company’s annual impairment test at October 31, 2022, all reporting units had fair values substantially in excess of their carrying values.

The key assumptions are updated every year for each reporting unit for the income and market approaches used to determine the fair value. Various assumptions are utilized including forecasted operating results, annual operating plans, strategic plans, economic projections, anticipated future cash flows, the weighted average cost of capital, market data and market multiples. The assumptions that have the most significant effect on the fair value calculations are the weighted average cost of capital, market multiples, forecasted EBITDA and terminal growth rates. The ~~2017 and 2016~~following assumption ranges ~~for these three assumptions~~were utilized by the Company ~~are as follows:~~in 2022 and 2021:

Assumptions

2022
Range

~~2017~~
~~Range~~

~~2016~~
2021
Range

Weighted average cost of capital

9.75% to 11.50%

~~8.75%~~

8.25% to ~~10.5%~~

~~9.0% to 12.0%~~9.75%

Market multiples

10.0x to 19.0x

~~11.0x~~

13.0x to ~~20.0x~~

~~9.5x to 17.5x~~22.0x

Terminal growth rates

~~3.0%~~2.5% to 3.5%

~~In assessing~~

See Note 6 for further discussion on goodwill and indefinite-lived intangible assets.

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Non-GAAP Disclosures

Set forth below are reconciliations of each of Organic sales, Adjusted net sales, Adjusted net income attributable to IDEX, Adjusted diluted earnings per share (“EPS”) attributable to IDEX, Consolidated Adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”) and Consolidated Adjusted EBITDA margin to its respective most directly comparable U.S. GAAP measure. Management uses these metrics to measure performance of the Company since they exclude items that are not reflective of ongoing operations, such as fair value inventory step-up charges, restructuring expenses and asset impairments, the impact from the exit of a COVID-19 testing application, gain on sale of a business, gains on sales of assets, the impact of the settlement of a corporate transaction indemnity, the loss on early debt redemption, the noncash loss related to the termination of the U.S. pension plan, net of curtailment and acquisition-related intangible asset amortization. Management also supplements its U.S. GAAP financial statements with adjusted information to provide investors with greater insight, transparency and a more comprehensive understanding of the information used by management in its financial and operational decision making.

This report references organic sales and organic operating income, non-GAAP measures, that exclude (1) the impact of foreign currency translation and (2) sales and operating income, respectively, from acquired or divested businesses during the first 12 months of ownership or prior to divestiture and (3) the impact from the exit of a COVID-19 testing application. The portion of sales and operating income attributable to foreign currency translation is calculated as the difference between (a) the period-to-period change in organic sales and organic operating income, respectively, and (b) the period-to-period change in organic sales and organic operating income, respectively, after applying prior period foreign exchange rates to the current year period. Management believes that reporting ~~units,~~organic sales and organic operating income provides useful information to investors by helping to identify underlying growth trends in the Company’s business and facilitating easier comparisons of the Company’s revenue and operating performance with prior and future periods and to its peers. The Company excludes the effect of foreign currency translation from organic sales and organic operating income because foreign currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. The Company excludes the effect of acquisitions and divestitures because they can obscure underlying business trends and make comparisons of long-term performance difficult due to the varying nature, size and number of transactions from period to period and between the Company ~~considers both~~and its peers. The Company excludes the ~~market approach~~impact from the exit of a COVID-19 testing application because it is not reflective of ongoing operations and ~~the income approach. Under the market approach, the fair value~~can obscure underlying business trends.

Management believes that Adjusted EBITDA, which is EBITDA adjusted for items that are not reflective of ongoing operations, is useful as a performance indicator of ongoing operations. The Company believes that Adjusted EBITDA is useful to investors as an indicator of the ~~reporting unit~~strength and performance of the Company and its segments’ ongoing business operations and a way to evaluate and compare operating performance and value companies within the Company’s industry. Management believes that Adjusted EBITDA margin is ~~determined~~useful for the same reason as Adjusted EBITDA. The definition of Adjusted EBITDA used here may differ from that used by other companies.

This report also references free cash flow. This non-GAAP measure is discussed and reconciled to its most directly comparable GAAP measure in the section above titled “Free Cash Flow.”

The non-GAAP financial measures disclosed by the ~~respective trailing twelve month EBITDA and the forward looking 2018 EBITDA (50% each), based on multiples of comparable public companies. The market approach is dependent on~~Company should not be considered a number of significant management assumptions including forecasted EBITDA and selected market multiples. Under the income approach, the fair value of the reporting unit is determined based on the present value of estimated future cash flows. The income approach is dependent on a number of significant management assumptions including estimates of operating results, capital expenditures, net working capital requirements, long-term growth rates and discount rates. Weighting was equally attributedsubstitute for, or superior to, ~~both the market and income approaches (50% each) in arriving at the fair value of the reporting units.~~

~~The Banjo trade name and the Akron Brass trade name are indefinite-lived intangible assets which are tested for impairment on an annual basis~~financial measures prepared in accordance with ~~ASC 350~~U.S. GAAP. Due to rounding, numbers presented throughout this and other documents may not add up or ~~more frequently if events or changes~~recalculate precisely. The financial results prepared in ~~circumstances indicate that~~accordance with U.S. GAAP and the ~~assets might~~reconciliations from these results should be ~~impaired. The Company uses~~carefully evaluated.


1. Reconciliations of the Change in Net Sales to Organic Net Sales

	For the Years Ended December 31,
	2022								2021
	FMT		HST		FSDP		IDEX		FMT		HST		FSDP		IDEX
Change in net sales	17	%	19	%	5	%	15	%	11	%	25	%	15	%	18	%
- Net impact from acquisitions/divestitures	7	%	6	%	—	%	5	%	4	%	5	%	—	%	4	%
- Impact from foreign currency	(3	%)	(4	%)	(4	%)	(4	%)	1	%	2	%	2	%	2	%
- Impact from the exit of a COVID-19 testing application(1)	—	%	2	%	—	%	1	%	—	%	—	%	—	%	—	%
Change in organic net sales	13	%	15	%	9	%	13	%	6	%	18	%	13	%	12	%

(1)Represents the ~~relief-from-royalty method,~~acceleration of previously deferred revenue of $17.9 million as a ~~form~~result of ~~the income approach,~~a customer’s decision to determine the fair value of these trade names. The relief-from-royalty method is dependent on a number of significant management assumptions, including estimates of revenues, royalty rates and discount rates.

~~In 2017 and 2016, there were no events that occurred or circumstances that changed that would have required a review other than as of our annual test date.~~

~~Defined benefit retirement plans —~~ ~~The plan obligations and related assets of the defined benefit retirement plans are presented~~discontinue further investment in commercializing its COVID-19 testing application. See Note ~~15 of~~1 5 in the Notes to Consolidated Financial Statements for further detail.


2. Reconciliations of Reported-to-Adjusted Net Income and Diluted EPS

(In millions, except per share amounts)	For the Years Ended December 31,
	2022		2021
Reported net income attributable to IDEX	$	586.9	$	449.4
+ Restructuring expenses and asset impairments	4.5		9.3
+ Tax impact on restructuring expenses and asset impairments	(0.9)		(2.2)
+ Fair value inventory step-up charges	8.5		11.6
+ Tax impact on fair value inventory step-up charges	(2.2)		(2.7)
- Net impact from the exit of a COVID-19 testing application(1)	(1.1)		—
+ Tax impact on the exit of a COVID-19 testing application	0.3		—
- Gain on sale of business	(34.8)		—
+ Tax impact on gain on sale of business	5.5		—
- Gains on sales of assets	(2.7)		—
+ Tax impact on gains on sales of assets	0.6		—
+ Loss on early debt redemption	—		8.6
+ Tax impact on loss on early debt redemption	—		(1.8)
+ Termination of the U.S. pension plan, net of curtailment	—		8.6
+ Tax impact on termination of the U.S. pension plan, net of curtailment	—		(1.9)
+ Corporate transaction indemnity	—		3.5
+ Tax impact on corporate transaction indemnity	—		(0.8)
+ Acquisition-related intangible asset amortization	69.0		56.4
+ Tax impact on acquisition-related intangible asset amortization	(15.5)		(12.9)
Adjusted net income attributable to IDEX	$	618.1	$	525.1

Reported diluted EPS attributable to IDEX	$	7.71	$	5.88
+ Restructuring expenses and asset impairments	0.06		0.12
+ Tax impact on restructuring expenses and asset impairments	(0.01)		(0.03)
+ Fair value inventory step-up charges	0.11		0.15
+ Tax impact on fair value inventory step-up charges	(0.03)		(0.04)
- Net impact from the exit of a COVID-19 testing application(1)	(0.01)		—
+ Tax impact on the exit of a COVID-19 testing application	—		—
- Gain on sale of business	(0.46)		—
+ Tax impact on gain on sale of business	0.07		—
- Gains on sales of assets	(0.03)		—
+ Tax impact on gains on sales of assets	0.01		—
+ Loss on early debt redemption	—		0.11
+ Tax impact on loss on early debt redemption	—		(0.02)
+ Termination of the U.S. pension plan, net of curtailment	—		0.11
+ Tax impact on termination of the U.S. pension plan, net of curtailment	—		(0.02)
+ Corporate transaction indemnity	—		0.05
+ Tax impact on corporate transaction indemnity	—		(0.01)
+ Acquisition-related intangible asset amortization	0.91		0.74
+ Tax impact on acquisition-related intangible asset amortization	(0.21)		(0.17)
Adjusted diluted EPS attributable to IDEX	$	8.12	$	6.87

Diluted weighted average shares outstanding	76.0		76.4

(1)Represents the net impact of the acceleration of previously deferred revenue of $17.9 million and an impairment charge of $16.8 million as a result of a customer’s decision to discontinue further investment in Part II, Item 8, “Financial Statements and Supplementary Data.” Level 1 assets are valued using unadjusted quoted prices for identical assets in active markets. Level 2 assets are valued using quoted prices or other observable inputs for similar assets. Level 3 assets are valued using unobservable inputs, but reflect the assumptions market participants would use in pricing the assets. Plan obligations and the annual pension expense are determined by consulting with actuaries using a number of assumptions provided by the Company. Key assumptions commercializing its COVID-19 testing application. See Note 15 in the ~~determination~~Notes to Consolidated Financial Statements for further detail.


3. Reconciliations of Net Income to Adjusted EBITDA and Net Sales to Adjusted Net Sales

(Dollars in millions)
	For the Year Ended December 31, 2022
	FMT			HST			FSDP			Corporate		IDEX
Reported net income	$	—		$	—		$	—		$	—	$	586.7
+ Provision for income taxes	—			—			—			—		162.7
+ Interest expense	—			—			—			—		40.7
- Other income (expense) - net	—			—			—			—		3.9
- Gain on sale of business	—			—			—			—		34.8
Operating income (loss)	334.0			334.9			166.6			(84.1)		751.4
+ Other income (expense) - net	1.8			1.9			2.4			(2.2)		3.9
+ Depreciation	16.1			25.7			8.4			0.5		50.7
+ Amortization	20.8			41.6			6.6			—		69.0
+ Fair value inventory step-up charges	0.4			8.1			—			—		8.5
+ Restructuring expenses and asset impairments	2.3			0.7			1.4			0.1		4.5
- Net impact from the exit of a COVID-19 testing application(1)	—			(1.1)			—			—		(1.1)
- Gains on sales of assets	(1.2)			—			(1.5)			—		(2.7)
Adjusted EBITDA	$	374.2		$	411.8		$	183.9		$	(85.7)	$	884.2

Net sales (eliminations)	$	1,167.3		$	1,339.2		$	679.2		$	(3.8)	$	3,181.9
- Impact from the exit of a COVID-19 testing application (1)				(17.9)								(17.9)
Adjusted net sales (eliminations)				$	1,321.3							$	3,164.0

Net income margin												18.4		%
Adjusted EBITDA margin	32.1		%	31.2		%	27.1		%	n/m		27.9		%

(1)Represents the net impact of the ~~annual pension expense include the discount rate, the rate~~acceleration of ~~salary increases,~~previously deferred revenue of $17.9 million and ~~the estimated future return on plan assets. To the extent actual amounts differ from these assumptions and estimated amounts, results could be adversely affected.~~

~~The Society~~an impairment charge of ~~Actuaries releases annual updates~~$16.8 million as a result of a customer’s decision to ~~mortality tables, which update life expectancy assumptions. IDEX adopts these annual updates and,~~discontinue further investment in consideration of these tables, we modified the mortality assumptions used in determining our pension and post-retirement benefit obligations as of December 31, 2017, which will have a related impact on our annual benefit expense in future years. New mortality tables may result in additional funding requirements dependent upon the funded status of our plans. These expectations presume all other assumptions remain constant and there are no changes to applicable funding regulations.

~~Changes~~ commercializing its COVID-19 testing application. See Note 15 in the ~~discount rate assumptions will impact the (gain) loss amortization and interest cost components~~Notes to Consolidated Financial Statements for further detail.


	For the Year Ended December 31, 2021
	FMT			HST			FSDP			Corporate		IDEX
Reported net income	$	—		$	—		$	—		$	—	$	449.3
+ Provision for income taxes	—			—			—			—		130.5
+ Interest expense	—			—			—			—		41.0
- Other income (expense) - net	—			—			—			—		(16.2)
Operating income (loss)	259.3			288.9			169.3			(80.5)		637.0
+ Other income (expense) - net	(6.1)			(0.5)			(1.2)			(8.4)		(16.2)
+ Depreciation	15.9			21.6			8.6			0.5		46.6
+ Amortization	14.6			35.1			6.7			—		56.4
+ Fair value inventory step-up charges	2.5			9.1			—			—		11.6
+ Restructuring expenses and asset impairments	4.5			1.7			0.5			2.6		9.3
+ Corporate transaction indemnity	—			—			—			3.5		3.5
+ Loss on early debt redemption	—			—			—			8.6		8.6
+ Termination of the U.S. pension plan, net of curtailment	6.3			—			1.8			0.5		8.6
Adjusted EBITDA	$	297.0		$	355.9		$	185.7		$	(73.2)	$	765.4

Net sales (eliminations)	$	998.7		$	1,121.8		$	647.9		$	(3.6)	$	2,764.8

Net income margin												16.3		%
Adjusted EBITDA margin	29.7		%	31.7		%	28.7		%	n/m		27.7		%


	For the Year Ended December 31, 2020
	FMT			HST			FSDP			Corporate		IDEX
Reported net income	$	—		$	—		$	—		$	—	$	377.8
+ Provision for income taxes	—			—			—			—		92.5
+ Interest expense	—			—			—			—		44.8
- Other income (expense) - net	—			—			—			—		(5.6)
Operating income (loss)	235.0			206.4			144.2			(64.9)		520.7
+ Other income (expense) - net	0.9			—			(0.4)			(6.1)		(5.6)
+ Depreciation	14.8			17.8			8.5			0.6		41.7
+ Amortization	11.1			24.0			6.7			—		41.8
+ Fair value inventory step-up charges	4.1			—			—			—		4.1
+ Restructuring expenses and asset impairments	5.6			2.7			2.5			1.0		11.8
+ Loss on early debt redemption	—			—			—			8.4		8.4
Adjusted EBITDA	$	271.5		$	250.9		$	161.5		$	(61.0)	$	622.9

Net sales (eliminations)	$	896.3		$	896.0		$	562.9		$	(3.6)	$	2,351.6

Net income margin												16.1		%
Adjusted EBITDA margin	30.3		%	28.0		%	28.7		%	n/m		26.5		%

Table of the projected benefit obligation (“PBO”), which in turn, may impact the Company’s funding decisions if the PBO exceeds plan assets. Each 100 basis point increase in the discount rate will cause a corresponding decrease in the PBO of approximately $29 million based upon the December 31, 2017 data. Each 100 basis point decrease in the discount rate will cause a corresponding increase in the PBO of approximately $35 million based upon the December 31, 2017 data.Contents

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The Company is subject to market risk associated with changes in foreign currency exchange rates and interest ~~rates.~~rates as well as inflationary factors. The Company may, from time to time, enter into foreign currency forward contracts and interest rate swaps on its debt when it believes there is a financial advantage in doing so. A treasury risk management policy, adopted by the Board of Directors, describes the procedures and controls over derivative financial and commodity instruments, including foreign currency forward contracts and interest rate swaps. Under the policy, the Company does not use financial or commodity derivative instruments for trading purposes and the use of these instruments is subject to strict approvals by senior officers. Typically, the use of derivative instruments is limited to foreign currency forward contracts and interest rate swaps on the Company’s outstanding long-term debt.

At As of December 31, ~~2017,~~2022, the Company ~~had outstanding foreign currency exchange contracts with a combined notional value of €180 million that~~did not have not been designated as hedges for accounting purposes. These contracts are used to minimize the economic impact and reduce the variability on earnings due to foreign currency fluctuations between the Swiss Franc and the Euro associated with certain intercompany loans that were established in conjunction with the SFC Koenig acquisition. The change in the fair value of the foreign currency exchange contracts and the corresponding foreign currency gain or loss on the revaluation of the intercompany loans are both recorded through earnings each period as incurred within Other (income) expense - net in the Consolidated Statements of Operations. During the year ended December 31, 2017, the Company recorded a gain of $19.8 million within Other (income) expense - net related to these foreign currency exchange contracts and recorded a foreign currency transaction loss of $20.2 million within Other (income) expense - net related to these intercompany loans. See Note 6 for further discussion.any derivative instruments outstanding.

Foreign Currency Exchange Rates

The Company’s foreign currency exchange rate risk is limited principally to the Euro, Swiss Franc, British Pound, Canadian Dollar, Indian Rupee, Chinese Renminbi, Swedish Krona and ~~Chinese Renminbi.~~Brazilian Real. The Company manages its foreign exchange risk principally through invoicing customers in the same currency as the source of products. The foreign currency transaction (gains) losses for the ~~years ending~~periods ended December 31, ~~2017, 2016~~2022, 2021 and ~~2015~~2020 were ~~$20.5~~$(0.8) million ~~$(6.2)~~, $1.1 million and ~~$(0.1)~~$3.0 million, respectively, and are reported within Other ~~(income) expense-net~~(Income) Expense - Net on the Consolidated Statements of ~~Operations. Of the $20.5 million reported as foreign currency transaction losses for the period ending December 31, 2017, $20.2 million was due to intercompany loans established~~Income. See Note 1 in ~~conjunction with the SFC Koenig acquisition. See Note 6~~Part II, Item 8, “Financial Statements and Supplementary Data,” for further discussion.

Interest Rate Fluctuations

The ~~Company’s~~Company has interest rate exposure ~~is primarily related~~due to ~~its $862.2~~$277.7 million of ~~total~~the $1,477.8 million debt outstanding at December 31, ~~2017. Approximately 1%~~2022 being floating rate debt. The Company’s Revolving Facility and Term Facility both bear interest at either an alternate base rate or adjusted Term SOFR (or appropriate alternative currency reference rates) plus, in each case, an applicable margin based on the lower of the Company’s senior, unsecured, long-term debt ~~is priced at interest rates that float~~rating or the Company’s applicable leverage ratio. At December 31, 2022, there was $77.7 million outstanding under the Revolving Facility with ~~the market. A 50 basis point movement in the~~an interest rate of 3.32% and $200.0 million outstanding under the Term Facility with an interest rate of 5.83%.

Inflation Risk

We source a wide variety of materials and components from a network of global suppliers. While materials are typically available from numerous suppliers, they are subject to price fluctuations, which could have a negative impact on our results. We seek to minimize the ~~floating rate debt would result in an approximate $0.1 million annualized increase or decrease in interest expense~~effects of inflation and ~~cash flows. The remaining debt is fixed rate debt.~~changing prices through price increases to maintain reasonable gross margins.

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Item 8.Financial Statements and Supplementary Data.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

~~Our management~~

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America, and as defined in Exchange Act Rule 13a-15(f).

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting.

Management has used the framework set forth in the report entitled “Internal Control — Integrated Framework” (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission to assess the effectiveness of the Company’s internal control over financial reporting. Management excluded Nexsight, KZValve and Muon Group (Note 2 - Acquisitions and Divestitures) from its assessment of internal controls over financial reporting as these acquisitions occurred in 2022. This exclusion is in accordance with the general guidance from the Staff of the Securities and Exchange Commission that an assessment of a recently acquired business may be omitted from the scope of management’s assessment of internal control over financial reporting for one year following the acquisition. The total assets (excluding goodwill and intangible assets) and net sales of current year acquisitions represented were each approximately 3 percent of the Consolidated Financial Statement amounts as of and for the year ended December 31, 2022. Based on that assessment, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, ~~2017.~~2022.

The effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2017,~~2022, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which appears herein.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors ~~and Stockholders~~ of IDEX Corporation

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of IDEX Corporation and subsidiaries (the “Company”) as of December 31, ~~2017~~,2022, based on criteria established in Internal ~~Control-Integrated~~Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2017~~,2022, based on criteria established in Internal ~~Control-Integrated~~Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, ~~2017,~~2022, of the Company and our report dated February ~~22, 2018~~,23, 2023, expressed an unqualified opinion on those financial statements.

As described in Management’s Report on Internal Control over Financial Reporting, management excluded Nexsight, KZValve and Muon Group from its assessment of internal control over financial reporting as these acquisitions occurred in the twelve months ended December 31, 2022. The combined net sales and total assets of these acquisitions represented approximately 3 percent for each of the consolidated financial statement amounts as of and for the year ended December 31, 2022. Accordingly, our audit did not include the internal control over financial reporting at these acquired companies.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) 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 (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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

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/s/ DELOITTE & TOUCHE LLP


Chicago, Illinois
February ~~22, 2018~~23, 2023

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors ~~and Stockholders~~ of IDEX Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of IDEX Corporation and subsidiaries (the ~~“Company”~~"Company") as of December 31, ~~2017~~2022 and ~~2016~~,2021, the related consolidated statements of ~~operations,~~income, comprehensive income, ~~shareholders’~~ equity and cash flows, for each of the three years in the period ended December 31, ~~2017~~,2022, and the related notes (collectively referred to as the ~~“financial statements”~~"financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2017~~2022 and ~~2016~~,2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2017~~,2022, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the ~~Company’s~~Company's internal control over financial reporting as of December 31, ~~2017~~,2022, based on criteria established inInternal ~~Control-Integrated~~Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February ~~22, 2018~~,23, 2023, expressed an unqualified opinion on the ~~Company’s~~Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the ~~Company’s~~Company's management. Our responsibility is to express an opinion on the ~~Company’s~~Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the 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 financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue - Disaggregation of Revenue - Refer to Note 5 to the Financial Statements

Critical Audit Matter Description

The Company is a highly diversified business with a wide range of products and services that are offered in various markets throughout the world. The Company’s business activities are carried out by numerous individual business units, which offer a unique set of products and include niche markets within specific geographic areas.

We identified revenue as a critical audit matter given the disaggregated nature of the Company’s operations and business units generating revenue. This required extensive audit effort due to the volume of the underlying transactions and distinctiveness of each individual business unit. High levels of auditor judgment were necessary to determine the nature, timing, and extent of audit procedures and the level of disaggregation within the Company at which to perform such procedures, especially given limited market data for certain products or geographic areas.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s revenue transactions included the following, among others:

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•We tested internal controls within the relevant revenue business processes, including controls over revenue recognition and controls over the review of significant revenue transactions and operating results.

•For a sample of revenue transactions, we performed detail transaction testing by agreeing the amounts recorded to source documents and determined that revenue was recognized appropriately.

•For the revenue populations subject to detail testing, we tested the completeness of revenue by making selections from reciprocal populations (e.g., cash receipts) and determined whether the transaction was recorded as a sale in the general ledger.

•For revenue transactions not subject to detail transaction testing, we aggregated the revenue transactions at the reporting unit level and performed substantive analytical procedures. We developed independent expectations of revenue based on data derived from published industry indices and market and customer trends and compared our independent expectations to the revenue recorded by management.


/s/ DELOITTE & TOUCHE LLP

~~/s/ DELOITTE & TOUCHE LLP~~
Chicago, Illinois
February 23, 2023
~~Chicago, Illinois~~
~~February 22, 2018~~

We have served as the Company’s auditor since 1987.

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IDEX CORPORATION

CONSOLIDATED BALANCE SHEETS


	As of December 31,
	2022		2021
	(Dollars in millions except per share amounts)
ASSETS
Current assets
Cash and cash equivalents	$	430.2	$	855.4
Receivables - net	442.8		356.4
Inventories	470.9		370.4
Other current assets	55.4		95.8
Total current assets	1,399.3		1,678.0
Property, plant and equipment - net	382.1		327.3
Goodwill	2,638.1		2,167.7
Intangible assets - net	947.8		597.3
Other noncurrent assets	144.6		146.9
Total assets	$	5,511.9	$	4,917.2
LIABILITIES AND EQUITY
Current liabilities
Trade accounts payable	$	208.9	$	178.8
Accrued expenses	289.1		259.8
Dividends payable	45.6		41.4
Total current liabilities	543.6		480.0
Long-term borrowings	1,468.7		1,190.3
Deferred income taxes	264.2		196.4
Other noncurrent liabilities	195.8		247.4
Total liabilities	2,472.3		2,114.1
Commitments and contingencies (Note 11)
Shareholders’ equity
Preferred stock:
Authorized: 5,000,000 shares, $.01 per share par value; Issued: None	—		—
Common stock:
Authorized: 150,000,000 shares, $.01 per share par value
Issued: 90,064,988 shares at December 31, 2022 and 90,067,996 shares at December 31, 2021	0.9		0.9
Additional paid-in capital	817.2		795.6
Retained earnings	3,531.7		3,126.5
Treasury stock at cost: 14,451,032 shares at December 31, 2022 and 13,872,555 shares at December 31, 2021	(1,184.3)		(1,050.3)
Accumulated other comprehensive loss	(126.2)		(69.6)
Total shareholders’ equity	3,039.3		2,803.1
Noncontrolling interest	0.3		—
Total equity	3,039.6		2,803.1
Total liabilities and equity	$	5,511.9	$	4,917.2

As of December 31,
2017 2016

(In thousands except share and
per share amounts)
ASSETS
Current assets
Cash and cash equivalents $ 375,950
$ 235,964
Receivables — net 294,166
272,813
Inventories 259,724
252,859
Other current assets 74,203
61,085
Total current assets 1,004,043
822,721
Property, plant and equipment — net 258,350
247,816
Goodwill 1,704,158
1,632,592
Intangible assets — net 414,746
435,504
Other noncurrent assets 18,331
16,311
Total assets $ 3,399,628
$ 3,154,944
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Trade accounts payable $ 147,067
$ 128,933
Accrued expenses 184,705
152,852
Short-term borrowings 258
1,046
Dividends payable 28,945
26,327
Total current liabilities 360,975
309,158
Long-term borrowings 858,788
1,014,235
Deferred income taxes 137,638
166,427
Other noncurrent liabilities 155,685
121,230
Total liabilities 1,513,086
1,611,050
Commitments and contingencies (Note 8)

Shareholders’ equity
Preferred stock:
Authorized: 5,000,000 shares, $.01 per share par value; Issued: none —
—
Common stock:
Authorized: 150,000,000 shares, $.01 per share par value; Issued: 90,162,211 shares at December 31, 2017 and 90,200,951 shares at December 31, 2016 902
902
Additional paid-in capital 716,906
697,213
Retained earnings 2,057,915
1,834,739
Treasury stock at cost: 13,468,675 shares at December 31, 2017 and 13,760,266 shares at December 31, 2016 (799,674 ) (787,307 )
Accumulated other comprehensive loss (89,507 ) (201,653 )
Total shareholders’ equity 1,886,542
1,543,894
Total liabilities and shareholders’ equity $ 3,399,628
$ 3,154,944

See Notes to Consolidated Financial Statements.

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IDEX CORPORATION

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~INCOME


	For the Year Ended December 31,
	2022		2021		2020
	(In millions except per share amounts)
Net sales	$	3,181.9	$	2,764.8	$	2,351.6
Cost of sales	1,755.0		1,540.3		1,324.2
Gross profit	1,426.9		1,224.5		1,027.4
Selling, general and administrative expenses	652.7		578.2		494.9
Restructuring expenses and asset impairments	22.8		9.3		11.8
Operating income	751.4		637.0		520.7
Gain on sale of business	(34.8)		—		—
Other (income) expense - net	(3.9)		16.2		5.6
Interest expense	40.7		41.0		44.8
Income before income taxes	749.4		579.8		470.3
Provision for income taxes	162.7		130.5		92.5
Net income	586.7		449.3		377.8
Net loss attributable to noncontrolling interest	0.2		0.1		—
Net income attributable to IDEX	$	586.9	$	449.4	$	377.8

Earnings per common share:
Basic earnings per common share attributable to IDEX	$	7.74	$	5.91	$	4.98
Diluted earnings per common share attributable to IDEX	$	7.71	$	5.88	$	4.94

Share data:
Basic weighted average common shares outstanding	75.7		76.0		75.7
Diluted weighted average common shares outstanding	76.0		76.4		76.4

For the Year Ended December 31,
2017 2016 2015
(In thousands except per share amounts)
Net sales $ 2,287,312
$ 2,113,043
$ 2,020,668
Cost of sales 1,260,634
1,182,276
1,116,353
Gross profit 1,026,678
930,767
904,315
Selling, general and administrative expenses 524,940
492,398
474,156
Loss (gain) on sale of businesses - net (9,273 ) 22,298
(18,070 )
Restructuring expenses 8,455
3,674
11,239
Operating income 502,556
412,397
436,990
Other (income) expense - net 2,394
(1,731 ) 3,009
Interest expense 44,889
45,616
41,636
Income before income taxes 455,273
368,512
392,345
Provision for income taxes 118,016
97,403
109,538
Net income $ 337,257
$ 271,109
$ 282,807
Earnings per common share:
Basic earnings per common share $ 4.41
$ 3.57
$ 3.65
Diluted earnings per common share $ 4.36
$ 3.53
$ 3.62
Share data:
Basic weighted average common shares outstanding 76,232
75,803
77,126
Diluted weighted average common shares outstanding 77,333
76,758
77,972

See Notes to Consolidated Financial Statements.

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IDEX CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	For the Year Ended December 31,
	2022		2021		2020
	(In millions)
Net income	$	586.7	$	449.3	$	377.8
Other comprehensive (loss) income:
Reclassification adjustments for derivatives, net of tax	—		2.5		4.6
Pension and other postretirement adjustments, net of tax	18.3		17.0		1.4
Cumulative translation adjustment	(74.9)		(75.6)		107.8
Other comprehensive (loss) income	(56.6)		(56.1)		113.8
Comprehensive income	530.1		393.2		491.6
Comprehensive loss attributable to noncontrolling interest	0.2		—		—
Comprehensive income attributable to IDEX	$	530.3	$	393.2	$	491.6

For the Year Ended December 31,
2017 2016 2015
(In thousands)
Net income $ 337,257
$ 271,109
$ 282,807
Other comprehensive income (loss):
Reclassification adjustments for derivatives, net of tax 4,210
4,361
4,531
Pension and other postretirement adjustments, net of tax (1,302 ) 3,049
9,415
Foreign currency adjustments:
Cumulative translation adjustment 110,421
(76,822 ) (63,441 )
Tax effect of reversal of indefinite assertion on certain intercompany loans (3,932 ) —
—
Reclassification of foreign currency translation to earnings upon sale of businesses 2,749
14,257
(4,725 )
Other comprehensive income (loss) 112,146
(55,155 ) (54,220 )
Comprehensive income $ 449,403
$ 215,954
$ 228,587

See Notes to Consolidated Financial Statements.

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IDEX CORPORATION

CONSOLIDATED STATEMENTS OF ~~SHAREHOLDERS’~~ EQUITY


	Common Stock and Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss						Treasury Stock		Total Shareholders’ Equity		Noncontrolling Interest		Total Equity
					Cumulative Translation Adjustment		Retirement Benefits Adjustments		Cumulative Unrealized Gain (Loss) on Derivatives
	(Dollars in millions except share and per share amounts)
Balance, December 31, 2019	$	761.3	$	2,615.1	$	(94.4)	$	(25.8)	$	(7.1)	$	(985.9)	$	2,263.2	$	—	$	2,263.2
Net income	—		377.8		—		—		—		—		377.8		—		377.8
Cumulative translation adjustment	—		—		107.8		—		—		—		107.8		—		107.8
Net change in retirement obligations (net of tax of $0.1)	—		—		—		1.4		—		—		1.4		—		1.4
Net change on derivatives designated as cash flow hedges (net of tax of $1.4)	—		—		—		—		4.6		—		4.6		—		4.6
Issuance of 688,563 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $5.0)	—		—		—		—		—		44.6		44.6		—		44.6
Repurchase of 876,423 shares of common stock	—										(110.3)		(110.3)		—		(110.3)
Share-based compensation	14.8		—		—		—		—		—		14.8		—		14.8
Shares surrendered for tax withholding	—		—		—		—		—		(12.3)		(12.3)		—		(12.3)
Cash dividends declared - $2.00 per common share outstanding	—		(151.4)		—		—		—		—		(151.4)		—		(151.4)
Contributions received from joint venture partner	—		—		—		—		—		—		—		0.1		0.1
Balance, December 31, 2020	$	776.1	$	2,841.5	$	13.4	$	(24.4)	$	(2.5)	$	(1,063.9)	$	2,540.2	$	0.1	$	2,540.3
Net income (loss)	—		449.4		—		—		—		—		449.4		(0.1)		449.3
Cumulative translation adjustment	—		—		(75.6)		—		—		—		(75.6)		—		(75.6)
Net change in retirement obligations (net of tax of $5.3)	—		—		—		17.0		—		—		17.0		—		17.0
Net change on derivatives designated as cash flow hedges (net of tax of $0.8)	—		—		—		—		2.5		—		2.5		—		2.5
Issuance of 258,875 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $3.1)	—		—		—		—		—		19.7		19.7		—		19.7
Share-based compensation	20.4		—		—		—		—		—		20.4		—		20.4
Shares surrendered for tax withholding	—		—		—		—		—		(6.1)		(6.1)		—		(6.1)
Cash dividends declared - $2.16 per common share outstanding	—		(164.4)		—		—		—		—		(164.4)		—		(164.4)
Balance, December 31, 2021	$	796.5	$	3,126.5	$	(62.2)	$	(7.4)	$	—	$	(1,050.3)	$	2,803.1	$	—	$	2,803.1
Net income (loss)	—		586.9		—		—		—		—		586.9		(0.2)		586.7
Cumulative translation adjustment	—		—		(74.9)		—		—		—		(74.9)		—		(74.9)
Net change in retirement obligations (net of tax of $6.8)	—		—		—		18.3		—		—		18.3		—		18.3
Issuance of 243,895 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $3.1)	—		—		—		—		—		19.3		19.3		—		19.3
Repurchase of 795,423 shares of common stock	—		—		—		—		—		(148.1)		(148.1)		—		(148.1)
Share-based compensation	21.6		—		—		—		—		—		21.6		—		21.6
Shares surrendered for tax withholding	—		—		—		—		—		(5.2)		(5.2)		—		(5.2)
Cash dividends declared - $2.40 per common share outstanding	—		(181.7)		—		—		—		—		(181.7)		—		(181.7)
Contributions received from joint venture partner	—		—		—		—		—		—		—		0.5		0.5
Balance, December 31, 2022	$	818.1	$	3,531.7	$	(137.1)	$	10.9	$	—	$	(1,184.3)	$	3,039.3	$	0.3	$	3,039.6

Common
Stock and
Additional
Paid-In Capital

Retained
Earnings

Accumulated Other Comprehensive
Income (Loss)

Treasury
Stock

Total
Shareholders’
Equity

Cumulative
Translation
Adjustment

Retirement
Benefits
Adjustments

Cumulative
Unrealized
Gain (Loss) on
Derivatives

(In thousands except share and per share amounts)
Balance, December 31, 2014 $ 648,451
$ 1,483,821
$ (24,813 ) $ (40,316 ) $ (27,149 ) $ (553,543 ) $ 1,486,451
Net income —
282,807
—
—
—
—
282,807
Cumulative translation adjustment —
—
(68,166 ) —
—
—
(68,166 )
Net change in retirement obligations (net of tax of $3,842) —
—
—
9,415
—
—
9,415
Net change on derivatives designated as cash flow hedges (net of tax of $2,499) —
—
—
—
4,531
—
4,531
Issuance of 685,501 shares of common stock from issuance of unvested shares, exercise of stock options and deferred compensation plans (net of tax of $3,794) 14,545
—
—
—
—
9,937
24,482
Repurchase of 2,811,002 shares of common stock —
(210,551 ) (210,551 )
Share-based compensation 17,529
—
—
—
—
—
17,529
Unvested shares surrendered for tax withholding —
—
—
—
—
(3,259 ) (3,259 )
Cash dividends declared — $1.28 per common share outstanding —
(99,948 ) —
—
—
—
(99,948 )
Balance, December 31, 2015 $ 680,525
$ 1,666,680
$ (92,979 ) $ (30,901 ) $ (22,618 ) $ (757,416 ) $ 1,443,291
Net income —
271,109
—
—
—
—
271,109
Cumulative translation adjustment —
—
(62,565 ) —
—
—
(62,565 )
Net change in retirement obligations (net of tax of $2,107) —
—
—
3,049
—
—
3,049
Net change on derivatives designated as cash flow hedges (net of tax of $2,490) —
—
—
—
4,361
—
4,361
Issuance of 594,919 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $5,305) 253
—
—
—
—
29,987
30,240
Repurchase of 738,593 shares of common stock —
—
—
—
—
(54,950 ) (54,950 )
Share-based compensation 17,337
—
—
—
—
—
17,337
Unvested shares surrendered for tax withholding —
—
—
—
—
(4,928 ) (4,928 )
Cash dividends declared — $1.36 per common share outstanding —
(103,050 ) —
—
—
—
(103,050 )
Balance, December 31, 2016 $ 698,115
$ 1,834,739
$ (155,544 ) $ (27,852 ) $ (18,257 ) $ (787,307 ) $ 1,543,894
Net income —
337,257
—
—
—
—
337,257
Cumulative translation adjustment —
—
113,170
—
—
—
113,170
Net change in retirement obligations (net of tax of $239) —
—
—
(1,302 ) —
—
(1,302 )
Net change on derivatives designated as cash flow hedges (net of tax of $2,445) —
—
—
—
4,210
—
4,210
Issuance of 557,591 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $6,027) —
—
—
—
—
22,935
22,935
Repurchase of 266,000 shares of common stock —
—
—
—
—
(29,074 ) (29,074 )
Share-based compensation 19,693
—
—
—
—
—
19,693
Unvested shares surrendered for tax withholding —
—
—
—
—
(6,228 ) (6,228 )
Tax effect of reversal of indefinite assertion on certain intercompany loans —
—
(3,932 ) —
—
—
(3,932 )
Cash dividends declared — $1.48 per common share outstanding —
(114,081 ) —
—
—
—
(114,081 )
Balance, December 31, 2017 $ 717,808
$ 2,057,915
$ (46,306 ) $ (29,154 ) $ (14,047 ) $ (799,674 ) $ 1,886,542

~~See Notes to Consolidated Financial Statements.~~

~~IDEX CORPORATION~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

For the Year Ended December 31,
2017 2016 2015
(In thousands)
Cash flows from operating activities
Net income $ 337,257
$ 271,109
$ 282,807
Adjustments to reconcile net income to net cash provided by operating activities:
Loss (gain) on sale of fixed assets - net 315
(28 ) (114 )
Loss (gain) on sale of businesses - net (9,273 ) 22,298
(18,070 )
Asset impairments —
205
795
Depreciation and amortization 38,314
37,854
35,694
Amortization of intangible assets 45,902
49,038
42,426
Amortization of debt issuance expenses 1,320
1,295
1,612
Share-based compensation expense 24,405
20,326
20,048
Deferred income taxes (33,742 ) (17,308 ) (339 )
Excess tax benefit from share-based compensation —
—
(5,265 )
Non-cash interest expense associated with forward starting swaps 6,655
6,851
7,030
Pension settlement —
3,554
—
Changes in (net of the effect from acquisitions and divestitures):
Receivables (15,803 ) 302
8,832
Inventories 760
32,747
4,557
Other current assets (20,031 ) (22,006 ) (2,728 )
Trade accounts payable 12,556
73
(2,828 )
Accrued expenses 19,710
(5,470 ) (16,672 )
Other — net 24,408
(923 ) 2,536
Net cash flows provided by operating activities 432,753
399,917
360,321
Cash flows from investing activities
Purchases of property, plant and equipment (43,858 ) (38,242 ) (43,776 )
Acquisition of businesses, net of cash acquired (38,161 ) (510,001 ) (195,013 )
Proceeds from fixed asset disposals 6,011
49
894
Proceeds from sale of businesses, net of cash sold 21,795
39,064
27,677
Other — net (533 ) (69 ) (273 )
Net cash flows (used in) investing activities (54,746 ) (509,199 ) (210,491 )
Cash flows from financing activities
Borrowings under revolving credit facilities 33,000
501,529
414,032
Proceeds from issuance of 3.20% Senior Notes —
100,000
—
Proceeds from issuance of 3.37% Senior Notes —
100,000
—
Payment of 2.58% Senior Euro Notes —
—
(88,420 )
Payments under revolving credit facilities (200,618 ) (520,125 ) (333,630 )
Debt issuance costs —
(246 ) (1,739 )
Dividends paid (111,172 ) (102,650 ) (96,172 )
Proceeds from stock option exercises 22,935
30,240
19,217
Excess tax benefit from share-based compensation —
—
5,265
Purchases of common stock (29,074 ) (57,272 ) (210,822 )
Unvested shares surrendered for tax withholding (6,228 ) (4,928 ) (3,259 )
Settlement of foreign exchange contracts 13,736
—
—
Net cash flows provided by (used in) financing activities (277,421 ) 46,548
(295,528 )
Effect of exchange rate changes on cash and cash equivalents 39,400
(29,320 ) (35,421 )
Net increase (decrease) in cash 139,986
(92,054 ) (181,119 )
Cash and cash equivalents at beginning of year 235,964
328,018
509,137
Cash and cash equivalents at end of period $ 375,950
$ 235,964
$ 328,018
Supplemental cash flow information
Cash paid for:
Interest $ 36,818
$ 37,067
$ 33,502
Income taxes - net 104,852
109,399
112,613
Significant non-cash activities:
Contingent consideration for acquisition —
—
4,705

See Notes to Consolidated Financial Statements.

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IDEX CORPORATION ~~AND SUBSIDIARIES~~

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Year Ended December 31,
	2022		2021		2020
	(In millions)
Cash flows from operating activities
Net income	$	586.7	$	449.3	$	377.8
Adjustments to reconcile net income to net cash provided by operating activities:
Gains on sales of assets	(3.5)		—		—
Gain on sale of business	(34.8)		—		—
Asset impairments	17.4		0.8		3.1
Depreciation	50.7		46.6		41.7
Amortization of intangible assets	69.0		56.4		41.8
Amortization of debt issuance expenses	1.7		1.7		1.7
Share-based compensation expense	21.6		20.4		14.8
Deferred income taxes	(18.5)		(6.1)		8.2
Non-cash interest expense associated with forward starting swaps	—		3.3		6.0
Termination of the U.S. pension plan, net of curtailment	—		8.6		—
Changes in (net of the effect from acquisitions/divestitures and foreign exchange):
Receivables	(71.7)		(49.4)		20.9
Inventories	(72.4)		(46.1)		36.5
Other current assets	(0.5)		9.0		(10.3)
Trade accounts payable	17.6		22.9		2.7
Deferred revenue	(25.0)		19.8		39.0
Accrued expenses	16.6		25.8		(13.7)
Other - net	2.5		2.3		(0.9)
Net cash flows provided by operating activities	557.4		565.3		569.3
Cash flows from investing activities
Purchases of property, plant and equipment	(68.0)		(72.7)		(51.6)
Acquisition of businesses, net of cash acquired	(945.6)		(577.4)		(123.1)
Note receivable from collaborative partner	(3.0)		(4.2)		—
Proceeds from disposal of fixed assets	8.9		—		—
Proceeds from sale of business, net of cash remitted	49.4		—		—
Purchase of marketable securities	—		(45.2)		—
Proceeds from sale of marketable securities	39.7		—		—
Other - net	1.4		1.4		2.1
Net cash flows used in investing activities	(917.2)		(698.1)		(172.6)
Cash flows from financing activities
Borrowings under revolving credit facilities	210.4		—		150.0
Payments under revolving credit facilities	(135.0)		—		(150.0)
Proceeds from issuance of long-term borrowings	200.0		499.4		499.1
Payment of long-term borrowings	—		(350.1)		(300.4)
Payment of make-whole redemption premium	—		(6.7)		(6.8)
Debt issuance costs	(2.3)		(4.6)		(4.7)
Dividends paid	(177.4)		(161.1)		(151.8)
Proceeds from stock option exercises	19.3		19.7		44.6
Repurchases of common stock	(148.1)		—		(110.3)
Shares surrendered for tax withholding	(5.2)		(6.1)		(12.3)
Contributions received from joint venture partner	0.5		—		—
Net cash flows used in financing activities	(37.8)		(9.5)		(42.6)
Effect of exchange rate changes on cash and cash equivalents	(27.6)		(28.2)		39.2
Net (decrease) increase in cash and cash equivalents	(425.2)		(170.5)		393.3
Cash and cash equivalents at beginning of year	855.4		1,025.9		632.6
Cash and cash equivalents at end of year	$	430.2	$	855.4	$	1,025.9
Supplemental cash flow information
Cash paid for:
Interest	$	37.1	$	36.0	$	35.2
Income taxes - net	175.6		118.2		87.2

See Notes to Consolidated Financial Statements.

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IDEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.Significant Accounting Policies

Business

IDEX is an applied solutions ~~company~~provider specializing in the manufacture of fluid and metering technologies, health and science technologies and fire, safety and other diversified products built to customers’ specifications. IDEX’s products are sold in niche markets toacross a wide range of industries throughout the world. The Company’s products and services include ~~industrial~~positive displacement pumps, ~~compressors,~~valves, small volume provers, flow meters, injectors and other fluid-handling pump modules and systems, flow monitoring and other services, precision fluidics, micro-precision components, rotary lobe pumps, roll compaction and drying systems, pneumatic components and sealing solutions, including very high precision, low-flow rate pumping solutions, high performance molded and extruded sealing components, custom mechanical and shaft seals, engineered hygienic mixers and valves, biocompatible medical devices and implantables, air compressors and blowers, optical components and coatings, laboratory and commercial equipment, precision photonic solutions, precision gear and peristaltic pump technologies, firefighting pumps, valves and ~~related~~ controls, rescue tools, lifting bags and other components and systems for ~~use in a wide variety of process applications;~~the fire and rescue industry, engineered stainless steel banding and clamping devices and precision fluidics solutions, including pumps, valves, degassing equipment, corrective tubing, fittings, and complex manifolds, optical filters and specialty medical equipment and devices for use in life science applications; precision-engineered equipment for dispensing, metering and mixing ~~paints;~~colorants and ~~engineered~~paints. These products ~~for industrial~~ and ~~commercial markets, including fire and rescue, transportation equipment, oil & gas, electronics, and communications. These activities~~services are grouped into three reportable segments: Fluid & Metering Technologies (“FMT”), Health & Science Technologies (“HST”) and Fire & Safety/Diversified ~~Products.~~Products (“FSDP”).

Principles of Consolidation

The ~~consolidated financial statements~~Consolidated Financial Statements include the Company and its subsidiaries. All intercompany transactions and accounts have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The principal areas of estimation reflected in the financial statements are revenue recognition, sales returns and allowances, allowance for ~~doubtful accounts,~~credit losses, inventory valuation, recoverability of long-lived assets, valuation of goodwill and intangible assets, income taxes, product warranties, contingencies and litigation, insurance-related items, defined benefit retirement plans and purchase accounting related to acquisitions.

Revenue Recognition

The Company ~~recognizes revenue~~accounts for a contract with a customer when ~~persuasive evidence of an arrangement exists, delivery~~it has ~~occurred,~~approval from both parties, the ~~sales price is fixed or determinable,~~rights and payment terms are identified, the contract has commercial substance and collectability of the ~~sales~~consideration is probable. The Company determines the appropriate revenue recognition by analyzing the terms and conditions of the contract. Revenue is recognized when control of products or services is transferred to a customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring the products or providing the services. Control is transferred to customers when performance obligations within a contract are satisfied. A performance obligation is a promise to transfer a distinct product or service to a customer.

For contracts that require complex design, manufacturing and installation activities, certain performance obligations may not be separately identifiable and, therefore, not distinct. As a result, the entire contract is accounted for as a single performance obligation. For contracts that include distinct products or services that are substantially the same and have the same pattern of transfer to the customer over time, they are recognized as a series of distinct products or services. Certain contracts have multiple performance obligations for which the Company allocates the transaction price to each performance obligation using an estimate of the standalone selling price of each distinct product or service and recognizes as revenue when, or as, the performance obligation is ~~reasonably assured.~~satisfied. For product sales, ~~delivery does not occur until the products have been shipped and risk of loss has been transferred~~each product sold to the customer. Revenue from services is recognized when the services are provided or ratably over the contract term. Some arrangements with customers may include multiple deliverables, including the combination of products and services.a customer generally represents a distinct performance obligation. In such cases, the observable standalone sales are used to determine the standalone selling price. In certain cases, the Company ~~has identified these~~may be required to estimate the standalone selling price using the expected cost plus margin approach, under which it forecasts the expected costs of satisfying a performance obligation and then adds an appropriate margin for the distinct product or service.

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The Company’s performance obligations are satisfied at either a point in time or over time as ~~separate elements~~work progresses. Revenue recognized at a point in ~~accordance with Accounting Standards Codification (“ASC”) 605-25,~~ ~~Revenue Recognition-Multiple-Element Arrangements, and recognizes~~time is approximately 96% while revenue ~~consistent~~recognized over time is approximately 4%. For performance obligations satisfied at a point in time, generally revenue recognition occurs with the ~~policy for each separate element~~transfer of control of the asset, which is in line with shipping terms. For performance obligations satisfied over time, revenue is recognized as work is performed based on the ~~relative selling price method. Revenues from certain long-term contracts are recognized on the percentage-of-completion method. Percentage-of-completion is measured principally by the percentage of~~relationship between actual costs incurred to date for each contract toand the total estimated ~~total~~ costs for such contract at ~~completion. Provisions~~completion of the performance obligation (i.e. the cost-to-cost method) or ratably over the contract term for service revenue. The Company defines service revenue as revenue from activities that are not associated with the design, development or manufacture of a product or the delivery of a software license.

When accounting for over-time contracts, the Company uses an input measure to determine the extent of progress towards completion of the performance obligation. The Company believes this measure of progress best depicts the transfer of control to the customer which occurs as the Company incurs costs on its contracts. Incurred cost represents work performed, which corresponds with the transfer of control to the customer. Contract costs include labor, material and overhead. Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer. Revenues, including estimated ~~losses on uncompleted long-term~~fees or profits, are recorded proportionally as costs are incurred.

As a significant change in one or more of these estimates could affect the profitability of the Company’s contracts, ~~are made in~~ the ~~period in which such losses are determined.~~Company reviews and updates its estimates regularly. Due to uncertainties inherent in the estimation process, it is reasonably possible that completion costs, including those arising from contract penalty provisions and final contract settlements, will be ~~revised in the near-term.~~revised. Such revisions to costs and income are recognized in the period in which the revisions are determined as a cumulative catch-up adjustment. The impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, the Company recognizes provisions for estimated losses on incomplete contracts in the period in which such losses are determined.

The Company records allowances for discounts and product returns ~~and customer incentives~~ at the time of sale as a reduction of revenue as such allowances can be reliably estimated based on historical experience and known trends. The Company also offers product warranties (primarily assurance-type) and accrues its estimated exposure for warranty claims at the time of sale based upon the length of the warranty period, warranty costs incurred and any other related information known to the Company.

Shipping and Handling Costs

Shipping and handling costs are included in Cost of ~~sales~~Sales and are recognized as a period expense during the period in which they are incurred.

Advertising Costs

Advertising costs of ~~$15.8~~$14.9 million ~~$15.3~~, $10.7 million and ~~$16.1~~$9.9 million for ~~2017, 2016~~2022, 2021 and ~~2015,~~2020, respectively, are expensed as incurred within Selling, general and administrative expenses.

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with an original maturity of ~~90 days~~3 months or less to be cash and cash equivalents.

Marketable Securities

From time to time, the Company may hold investments in marketable securities, which are recorded in Other current assets in the Consolidated Balance Sheets. These investments are recorded at fair value, with gains and losses, dividends and interest income included in Other (income) expense - net in the Consolidated Statements of Income. See Note 9 for further discussion on the marketable securities held by the Company.

Accounts Receivable and Allowance for ~~Doubtful Accounts~~Credit Losses

Accounts receivable are recorded at face ~~amounts~~amount less an allowance for ~~doubtful accounts.~~credit losses. The ~~Company maintains allowances for doubtful~~allowance is an estimate based on historical collection experience, current and future economic and market conditions and a review of the current status of each customer's trade accounts ~~for estimated losses as a result of customers’ inability to make required payments.~~receivable. Management evaluates the aging of the accounts receivable balances and the financial

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condition of its customers ~~historical trends~~ and ~~the time outstanding of specific balances~~all other forward-looking information that is reasonably available to estimate the amount of accounts receivable that may not be collected in the future and records the appropriate provision.

Inventories

The Company states inventories at the lower of cost or net realizable value. Cost, which includes material, labor and ~~factory~~ overhead, is determined on a ~~FIFO~~first in, first out basis. ~~We make~~The Company makes adjustments to reduce the cost of inventory to its net realizable value, if required, for estimated excess, ~~obsolescence~~obsolete, zero usage or impaired balances. Factors influencing these adjustments include changes in market demand, product life cycle and engineering changes.

Impairment of Long-Lived Assets

~~Long-lived assets are~~

A long-lived asset is reviewed for impairment if an event occurs or circumstances change that would more likely than not reduce the fair value of ~~a long-lived~~the asset below its carrying ~~amount,~~value, as measured by comparing ~~their~~its net book value to the projected undiscounted future cash flows generated by ~~their~~its use. A long-lived asset impairment exists when the carrying ~~amount~~value of the asset exceeds its fair value. The amount andtiming of the impairment ~~charges~~charge for ~~these assets require~~an asset requires the estimation of future cash flows to determine the fair value of the ~~related assets. Impaired assets are~~asset. An impaired asset is recorded at ~~their~~its estimated fair value based on a discounted cash flow analysis. In 2017, 2016, and 2015, the Company concluded that certain long-lived assets had a fair value that was less than the carrying value of the assets, resulting in zero, $0.2 million and $0.8 million, respectively,Refer to Note 15 for further discussion on impairment of long-lived ~~asset impairment charges.~~assets.

Goodwill and Indefinite-Lived Intangible Assets

~~In accordance with ASC~~

Accounting Standards Codification (“ASC”) 350, Goodwill and Other Intangible Assets, requires that the Company ~~reviews~~review the carrying value of goodwill and indefinite-lived intangible assets annually, ~~on October 31,~~ or if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying ~~amount.~~value. The Company evaluates the recoverability of these assets as of October 31 based on the estimated fair value of each of the ~~thirteen~~13 reporting units and the indefinite-lived intangible assets. See Note 46 for a further discussion on goodwill and indefinite-lived intangible assets.

Borrowing Expenses

Expenses incurred in securing and issuing debt are capitalized and included as a reduction of Long-term borrowings. These amounts are amortized over the life of the related borrowing and the related amortization is included in Interest ~~expense.~~expense in the Consolidated Statements of Income.

Earnings per Common Share

~~Earnings~~

Diluted earnings per common share (“EPS”) attributable to IDEX is computed by dividing ~~net~~Net income attributable to IDEX by the weighted average number of shares of common stock (basic) plus common stock equivalents outstanding (diluted) ~~outstanding~~ during the year. Common stock equivalents consist of stock options, which have been included in the calculation of weighted average shares outstanding using the treasury stock method, restricted stock and performance share units.

ASC 260, Earnings per Share, concludes that all outstanding unvested share-based payment awards that contain rights to ~~nonforfeitable~~non-forfeitable dividends participate in undistributed earnings with common shareholders. If awards are considered participating securities, the Company is required to apply the two-class method of computing basic and diluted earnings per share. The Company has determined that its outstanding shares of restricted stock are participating securities. Accordingly, Diluted EPS attributable to IDEX was computed using the two-class method prescribed by ASC 260.

Basic weighted average shares outstanding reconciles to diluted weighted average shares outstanding as follows:


	2022	2021	2020
	(In millions)
Basic weighted average common shares outstanding	75.7	76.0	75.7
Dilutive effect of stock options, restricted stock and performance share units	0.3	0.4	0.7
Diluted weighted average common shares outstanding	76.0	76.4	76.4

2017 2016 2015
(In thousands)
Basic weighted average common shares outstanding 76,232
75,803
77,126
Dilutive effect of stock options, restricted stock and performance share units 1,101
955
846
Diluted weighted average common shares outstanding 77,333
76,758
77,972

Options to purchase approximately ~~zero, 0.9~~0.5 million, 0.3 million and ~~0.9~~0.3 million shares of common stock in ~~2017, 2016~~2022, 2021 and ~~2015,~~2020, respectively, were not included in the computation of diluted EPS attributable to IDEX because the effect of their inclusion would have been antidilutive.

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Share-Based Compensation

The Company accounts for share-based payments in accordance with ASC 718, Compensation-Stock Compensation. Accordingly, the Company expenses the fair value of the awards made under its share-based compensation plans. That cost is recognized in the ~~consolidated financial statements~~Consolidated Financial Statements over the requisite service period of the grants. See Note 1316 for further discussion on share-based compensation.

Depreciation and Amortization

Property and equipment are stated at cost, with depreciation and amortization provided using the straight-line method over the following estimated useful lives:



Land improvements			8 to 12 years
Buildings and improvements			8 to 30 years
Machinery, equipment and other			3 to 12 years
Office and transportation equipment			32 to 10 years

Certain identifiable intangible assets are amortized over their estimated useful lives using the straight-line method. The estimated useful lives used in the computation of amortization of identifiable intangible assets are as follows:



Patents		5 ~~to 17 years~~
~~Trade names~~	10 to 20 years
~~Customer relationships~~Trade names		65 to 20 years
~~Unpatented technology and other~~Customer relationships		65 to 20 years
Unpatented technology		7 to 20 years
Software		5 years

Research and Development Expenditures

Costs associated with engineering activities, including research and development, are expensed in the period incurred and are included in Cost of sales.

Total engineering expenses, which include research and development as well as application and support engineering, were ~~$76.4~~$95.4 million, ~~$68.8~~$82.9 million and ~~$61.2~~$82.3 million in ~~2017~~, ~~2016~~2022, 2021 and ~~2015~~,2020, respectively. Research and development expenses, which include costs associated with developing new products and major improvements to existing products, were ~~$42.4~~$61.4 million, ~~$39.4~~$50.1 million and ~~$33.6~~$48.2 million in ~~2017, 2016~~2022, 2021 and ~~2015, respectively.~~2020, respectively.

Foreign Currency Translation and Transaction

The functional currency of substantially all operations outside the United States is the respective local currency. Accordingly, those foreign currency balance sheet accounts have been translated using the exchange rates in effect as of the balance sheet ~~date. Income~~date and the income statement amounts have been translated using the average monthly exchange ~~rate~~rates for the year. ~~The gains and losses resulting from changes in exchange rates~~Translation adjustments from year to year have been reported in Accumulated other comprehensive loss in the Consolidated Balance Sheets. ~~The foreign~~Foreign currency transaction gains and losses ~~(gains) for~~from transactions denominated in a currency other than the ~~periods ending December 31, 2017, 2016 and 2015 were $20.5 million, $(6.2) million, and $(0.1) million, respectively, and~~functional currency of the subsidiary involved are reported within Other (income) expense - net onin the Consolidated Statements of ~~Operations. Of the $20.5 million reported as foreign currency transaction losses~~Income. Net (gain) loss for the ~~period ending~~years ended December 31, ~~2017, $20.2~~2022, 2021 and 2020 was $(0.8) million ~~was due to intercompany loans established in conjunction with the SFC Koenig acquisition. See Note 6 for further discussion.~~, $1.1 million and $3.0 million, respectively.

Income Taxes

Income tax expense includes ~~United States,~~U.S., state, local and international income taxes. Deferred tax assets and liabilities are recognized for the tax consequences of temporary differences between the financial reporting and the tax ~~basis~~bases of existing assets and liabilities and for loss carryforwards. The tax rate used to determine the deferred tax assets and liabilities is the enacted tax rate for the year and the manner in which the differences are expected to reverse. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized.

~~Refer to~~ See Note 1013 for further discussion on income taxes.

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Concentration of Credit Risk

The Company is not dependent on a single customer as its largest customer accounted for less than 2%3% of net sales for all years presented.

Recently Adopted Accounting Standards

In ~~March 2017,~~November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~2017-07,~~ ~~Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~2021-10, Government Assistance (ASC 832): Disclosures by Business Entities about Government Assistance, which ~~amends the requirements related~~requires entities to ~~the income statement presentation of the components of net periodic benefit cost for~~provide certain annual disclosures when they (1) have received government assistance and (2) use a ~~company’s sponsored defined benefit pension and~~grant or contribution accounting model by analogy to other postretirement plans. Under this ASU, companies are required to disaggregate the current service cost component from the other components of net benefit cost and present it with other current compensation costs for related employees in the income statement and present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented. This ASU also requires companies to disclose the income statement lines that contain the other components if they are not presented on appropriately described separate lines. In addition, only the service cost component of periodic net benefit cost is eligible for capitalization. The Company elected to early adopt this standard in the quarter ended March 31, 2017 as presenting the service cost within income from operations is more indicative of our current pension cost.accounting guidance. The Company adopted this standard ~~retrospectively and thus $6.6 million was reclassified from Selling, general and administrative expenses to Other (income) expense - net~~on a prospective basis for the twelve months ended December 31, 2016, and $5.3 million was reclassified from Selling, general and administrative expenses to Other (income) expense - net for the twelve months ended December 31, 2015 to conform to currentannual period presentation. The Company elected to apply the practical expedient that permits the use of previously disclosed service cost and other costs from the prior year’s pension and other postretirement benefit plan footnote in the comparative periods as appropriate estimates when retrospectively changing the presentation of these costs in the income statement. The Company included the required disclosures and the changes resulting from the adoption of this standard in Note 15.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment~~, which eliminates Step 2 from the goodwill impairment test. Under this ASU, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to the excess, limited to the total amount of goodwill allocated to the reporting unit. This ASU also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. In addition, companies will be required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. The Company early adopted this standard onbeginning January 1, ~~2017.~~2022. The adoption of this standard did not have a material impact on ~~our consolidated financial statements.~~the Company’s Consolidated Financial Statements.

Recently Issued Accounting Standards

In ~~July 2015,~~October 2021, the FASB issued ASU ~~2015-11,~~ ~~Simplifying~~2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which adds contract assets and contract liabilities to the ~~Measurement~~list of ~~Inventory. Under this guidance, entities utilizing~~exceptions to the ~~FIFO~~recognition and measurement principles that apply to business combinations and requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with revenue recognition guidance. ASU 2021-08 is effective for annual periods beginning after December 15, 2022 and interim periods therein. Early adoption is permitted. Entities should apply the ASU’s provisions prospectively to business combinations occurring on or ~~average cost method should measure inventory at~~after the ~~lower~~effective date of ~~cost or net realizable value, where net realizable value is defined as~~ the ~~estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal~~

~~and transportation. The Company adopted this guidance on January 1, 2017.~~amendments. The adoption of this standard ~~did~~is not expected to have a material impact on ~~our consolidated financial statements.~~the Company’s Consolidated Financial Statements.

~~New Accounting Pronouncements~~

~~In January 2017, the FASB issued ASU 2017-01,~~ ~~Clarifying the Definition of a Business~~, which clarifies the definition of a business and assists entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. Under this guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset or group of similar assets, the assets acquired would not represent a business. In addition, in order to be considered a business, an acquisition would have to include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The amended guidance also narrows the definition of outputs by more closely aligning it with how outputs are described in FASB guidance for revenue recognition. This guidance is effective for interim and annual periods for the Company on January 1, 2018, with early adoption permitted. The Company does not believe the guidance will have a material impact on its consolidated financial statements.

~~In October 2016, the FASB issued ASU 2016-16,~~ ~~Intra-Entity Transfers of Assets Other Than Inventory, which amends ASC 740,~~ ~~Income Taxes~~. This ASU requires that the income tax consequences of an intra-entity asset transfer other than inventory are recognized at the time of the transfer. An entity will continue to recognize the income tax consequences of an intercompany transfer of inventory when the inventory is sold to a third party. The update is effective for financial statements issued for fiscal years beginning after December 15, 2017. The ASU requires adoption on a modified-retrospective basis through a cumulative adjustment to retained earnings at the beginning of the period of adoption. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Classification of Certain Cash Receipts and Cash Payments~~ (a consensus of the FASB Emerging Issues Task Force). This ASU addresses the following eight specific cash flow issues: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. This standard is effective for fiscal years beginning after December 15, 2017. The Company does not believe the guidance will have a material impact on our consolidated financial statements.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases~~, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The standard introduces a new lessee model that will require most leases to be recorded on the balance sheet and eliminates the required use of bright line tests in current U.S. GAAP for determining lease classification. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. This standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Companies are permitted to adopt the standard early and a modified retrospective application is permitted. The new guidance requires adoption on a retrospective basis unless it is impracticable to apply, in which case the company would be required to apply the amendments prospectively as of the earliest date practicable. The Company is currently evaluating the impact of adopting the new guidance on our consolidated financial statements.

~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers,~~ which will replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a new five-step model for recognizing revenue from contracts with customers. Under ASU 2014-09, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption. The FASB has also issued the following standards which clarify ASU 2014-09 and have the same effective date as the original standard: ASU 2016-08, ~~Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net); ASU 2016-10,~~ ~~Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing; ASU 2016-12~~,~~Revenue from Contracts with Customers:~~

~~Narrow-Scope Improvements and Practical Expedients; and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.~~

In 2016, we established an implementation team and analyzed the impact of the standard by surveying business units and reviewing contracts to identify potential differences that may result from applying the requirements of the new standard. We have completed our contract reviews. The contract reviews generally supported the recognition of revenue at a point in time, which is consistent with the current revenue recognition model used by most of our business units. As a result, we expect revenue recognition to remain substantially unchanged under the new standard. For our business units that currently recognize revenue under a percentage of completion model, we also expect revenue recognition to remain substantially unchanged as the contract reviews supported the recognition of revenue over time. The implementation team has reported these findings to the Audit Committee. The Company has implemented the appropriate changes to its processes, systems and controls to comply with the new guidance and is currently evaluating new disclosure requirements. The Company expects to adopt the standard in 2018 using the modified retrospective method and does not expect the adoption to have an impact on our consolidated financial statements.

2. Acquisitions and Divestitures

All of the Company’s acquisitions of businesses have been accounted for under ASC 805, Business Combinations. Accordingly, the ~~accounts~~assets and liabilities of the acquired companies, after adjustments to reflect the fair values assigned to the assets and liabilities, have been included in the Company’s ~~consolidated financial statements~~Consolidated Financial Statements from their respective dates of acquisition. The results of operations of ~~the acquired companies~~Flow Management Devices, LLC (“Flow MD”) (acquired February 28, 2020), Qualtek Manufacturing, Inc. (“Qualtek”) (acquired November 23, 2020), ABEL Pumps, L.P. and certain of its affiliates (“ABEL”) (acquired March 10, 2021), Airtech Group, Inc., US Valve Corporation and related entities (“Airtech”) (acquired June 14, 2021), Nexsight, LLC and its businesses Envirosight, WinCan, MyTana and Pipeline Renewal Technologies (“Nexsight”) (acquired February 28, 2022), KZ CO. (“KZValve”) (acquired May 2, 2022) and Muon B.V. and its subsidiaries (“Muon Group”) (acquired November 18, 2022) have been included in the Company’s ~~consolidated~~Consolidated Financial Statements since the respective dates of acquisition. The results ~~since~~of operations of Knight have been included in the Company’s Consolidated Financial Statements through the date of ~~each acquisition.~~disposition on September 9, 2022. Supplemental pro forma information has not been provided as the acquisitions and divestiture did not have a material impact on the Company’s ~~consolidated results of operations~~Consolidated Financial Statements individually or in the aggregate.

~~2017 Acquisition~~

2022 Acquisitions

Nexsight

On ~~December 8, 2017,~~February 28, 2022, the Company acquired Nexsight in a partial stock and asset acquisition. Nexsight complements and creates synergies with the ~~stock of thinXXS Microtechnology AG (“thinXXS”), a leader~~Company’s existing iPEK and ADS business units that design and create sewer crawlers, inspection and monitoring systems and software applications that allow teams to identify, anticipate and correct wastewater system issues remotely. Headquartered in Randolph, New Jersey, Nexsight operates in the ~~design, manufacture, and sale of microfluidic components serving~~Company’s Water reporting unit within the point of care, veterinary, and life science markets. The business was acquired to complement our existing CiDRA Precision Services business and expand on our microfluidic and nanofluidic capabilities. Headquartered in Zweibrücken, Germany, thinXXS operates in our Health & Science TechnologiesFMT segment. ~~thinXXS~~Nexsight was acquired for cash consideration of ~~$38.2 million and the assumption of $1.2 million of debt.~~$112.5 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of ~~the~~this transaction were ~~$23.9~~$56.5 million and ~~$11.8~~$49.8 million, respectively. The goodwill is ~~not~~partially deductible for tax purposes.

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The Company made ~~an initial~~a preliminary allocation of the purchase price for the ~~thinXXS~~Nexsight acquisition as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy. As the Company ~~obtains~~continues to obtain additional information about these assets and liabilities, ~~including tangible~~ and ~~intangible asset appraisals, and learns more about~~continues to integrate the newly acquired business, wethe Company will refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company will continue to make ~~appropriate~~required adjustments to the purchase price allocation prior to the completion of the measurement ~~period, as required.~~period.

The ~~Company incurred $1.3 million~~preliminary allocation of ~~acquisition-related transaction costs in 2017. These costs were~~the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date, is as follows:


(In millions)	Total
Current assets, net of cash acquired	$	16.6
Property, plant and equipment	2.0
Goodwill	56.5
Intangible assets	49.8
Other noncurrent assets	4.4
Total assets acquired	129.3
Current liabilities	(11.2)
Deferred income taxes	(1.8)
Other noncurrent liabilities	(3.8)
Net assets acquired	$	112.5

Acquired intangible assets consist of trade names, customer relationships and software. The goodwill recorded ~~in Selling, general~~for the acquisition reflects the strategic fit, revenue and ~~administrative expenses~~earnings growth potential of this business.

The acquired intangible assets and ~~were related to completed transactions, pending transactions and potential transactions, including transactions that ultimately were not completed.~~weighted average amortization periods are as follows:

~~2016 Acquisitions~~


(In millions, except weighted average life)	Total		Weighted Average Life
Trade names	$	13.5	15
Customer relationships	31.5		10
Software	4.8		5
Acquired intangible assets	$	49.8

KZValve

On ~~March 16, 2016,~~May 2, 2022, the Company acquired ~~the stock~~KZValve in an asset acquisition. KZValve is a leading manufacturer of ~~Akron Brass Holding Corporation (“Akron Brass”), a producer of a large array of engineered life–safety products~~electric valves and controllers used primarily in agricultural applications. KZValve augments and expands IDEX’s agricultural portfolio, complementing Banjo’s current fluid management solutions for the safety and emergency response markets, which includes apparatus valves, monitors, nozzles, specialty lighting, electronic vehicle–control systems and firefighting hand tools. The business was acquired to complement and create synergies with our existing Hale, Class 1, and Godiva businesses.these applications. Headquartered in ~~Wooster, Ohio, Akron Brass~~Greenwood, Nebraska, KZValve operates in ~~our Fire & Safety/Diversified Products~~the Company’s Agriculture reporting unit within the FMT segment. ~~Akron Brass~~KZValve was acquired for cash consideration of ~~$221.4~~$120.1 million. The entire purchase price was funded with borrowings under the Company’s revolving facilities. Goodwill and intangible assets recognized as part of the transaction were $124.6 million and $90.4 million, respectively. The goodwill is not deductible for tax purposes.

On July 1, 2016, the Company acquired the stock of AWG Fittings GmbH (“AWG Fittings”), a producer of engineered products for the safety and emergency response markets, including valves, monitors and nozzles. The business was acquired to complement and create synergies with our existing Hale, Class 1, Godiva and Akron Brass businesses. Headquartered in Ballendorf,

~~Germany, AWG Fittings operates in our Fire & Safety/Diversified Products segment. AWG Fittings was acquired for cash consideration of $47.5 million (€42.8 million). The purchase price~~ was funded with cash on hand. Goodwill and intangible assets recognized as part of ~~the~~this transaction were ~~$22.1~~$56.4 million and ~~$10.3~~$52.0 million, respectively. The goodwill is ~~not~~ deductible for tax purposes.

~~On August 31, 2016, the~~

The Company ~~acquired the stock of SFC Koenig AG (“SFC Koenig”),~~made a producer of highly engineered expanders and check valves for critical applications across the transportation, hydraulic, aviation and medical markets. Headquartered in Dietikon, Switzerland, SFC Koenig operates in our Health & Science Technologies segment. SFC Koenig was acquired for cash consideration of $241.1 million (€215.9 million). The purchase price was funded with cash on hand and borrowings under the Company’s revolving facilities. Goodwill and intangible assets recognized as part of the transaction were $141.3 million and $117.0 million, respectively. The goodwill is not deductible for tax purposes.

~~The~~preliminary allocation of the purchase price for the KZValve acquisition ~~costs~~as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy. As the Company continues to obtain additional information about these assets and liabilities, and continues to integrate the newly acquired business, the Company will refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company will continue to make required adjustments to the purchase price allocation prior to the completion of the measurement period.

The preliminary allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values at ~~their respective~~the acquisition ~~dates,~~date, is as follows:

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Akron Brass AWG Fittings SFC Koenig Total
(In thousands)
Accounts receivable $ 14,523
$ 5,867
$ 9,190
$ 29,580
Inventory 29,157
11,766
20,639
61,562
Other assets, net of cash acquired 446
565
4,501
5,512
Property, plant and equipment 12,195
6,595
4,637
23,427
Goodwill 124,643
22,055
141,298
287,996
Intangible assets 90,400
10,279
116,998
217,677
Deferred income taxes —
3,928
—
3,928
Total assets acquired 271,364
61,055
297,263
629,682
Current liabilities (7,081 ) (5,117 ) (11,704 ) (23,902 )
Deferred income taxes (36,439 ) —
(36,168 ) (72,607 )
Other noncurrent liabilities (6,445 ) (8,444 ) (8,283 ) (23,172 )
Net assets acquired $ 221,399
$ 47,494
$ 241,108
$ 510,001


(In millions)	Total
Current assets, net of cash acquired	9.7
Property, plant and equipment	1.8
Goodwill	56.4
Intangible assets	52.0
Deferred income taxes	0.2
Other noncurrent assets	1.0
Total assets acquired	121.1
Current liabilities	(1.0)
Net assets acquired	$	120.1

Acquired intangible assets consist of trade names, customer relationships and unpatented technology. The goodwill recorded for the ~~acquisitions~~acquisition reflects the strategic fit, revenue and earnings growth potential of ~~these businesses.~~this business.

~~Of the $217.7 million of acquired intangible assets, $28.8 million was assigned to the Akron Brass trade name and is not subject to amortization.~~

The acquired intangible assets and weighted average amortization periods are as follows:


(In millions, except weighted average life)	Total		Weighted Average Life
Trade names	$	7.5	15
Customer relationships	36.0		13
Unpatented technology	8.5		10
Acquired intangible assets	$	52.0

Muon Group

On November 18, 2022, the Company acquired the stock of Muon Group. Muon Group manufactures highly precise flow paths in a variety of materials that enable the movement of various liquids and gases in critical applications for medical, semiconductor, food processing, digital printing and filtration technologies. Muon Group maintains operations in Hapert, the Netherlands; Eerbeek, the Netherlands; Wijchen, the Netherlands; Dorset in the United Kingdom and Pune, India and operates in the Company’s Scientific Fluidics & Optics reporting unit within the HST segment. Muon Group was acquired for cash consideration of $713.0 million. The purchase price was funded with $342.6 million of cash on hand, $170.4 million of proceeds from the Company's Revolving Facility and $200.0 million of proceeds from the Company's Term Facility. Goodwill and intangible assets recognized as part of this transaction were $391.1 million and $319.1 million, respectively. The goodwill is not deductible for tax purposes.

The Company made a preliminary allocation of the purchase price for the Muon Group acquisition as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy. As the Company continues to obtain additional information about these assets and liabilities, including intangible asset appraisals, and continues to integrate the newly acquired business, the Company will refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company will continue to make required adjustments to the purchase price allocation prior to the completion of the measurement period.

The preliminary allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date, is as follows:

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(In thousands, except weighted average life) Total Weighted Average Life
Trade names $ 14,078
15
Customer relationships 134,519
13
Unpatented technology 40,280
13
Amortized intangible assets 188,877

Indefinite lived - Akron Brass trade name 28,800

Total acquired intangible assets $ 217,677


(In millions)	Total
Current assets, net of cash acquired	$	53.0
Property, plant and equipment	61.6
Goodwill	391.1
Intangible assets	319.1
Other noncurrent assets	7.4
Total assets acquired	832.2
Current liabilities	(25.9)
Deferred income taxes	(83.9)
Other noncurrent liabilities	(9.4)
Net assets acquired	$	713.0

Acquired intangible assets consist of trade names, customer relationships and unpatented technology. The goodwill recorded for the acquisition reflects the strategic fit, revenue and earnings growth potential of this business.

The acquired intangible assets and weighted average amortization periods are as follows:


(In millions, except weighted average life)	Total		Weighted Average Life
Trade names	$	38.3	15
Customer relationships	212.4		13
Unpatented technology	68.4		11
Acquired intangible assets	$	319.1

The Company incurred ~~$4.7~~$6.8 million of acquisition-related ~~transaction~~ costs in ~~2016.~~2022. These costs were recorded in Selling, general and administrative expenses and were related to completed transactions, pending transactions and potential transactions, including transactions that ultimately were not completed. The Company also ~~incurred $14.7~~recorded $0.1 million, $0.3 million, and $8.1 million of ~~non-cash acquisition~~ fair value inventory step-up charges associated with the completed ~~2016 acquisitions. These charges were recorded~~2022 acquisitions of Nexsight, KZValve and Muon Group, respectively, in Cost of ~~sales.~~sales for the year ended December 31, 2022.

~~2015~~

2021 Acquisitions

ABEL

On ~~May 29, 2015,~~March 10, 2021, the Company acquired the stock of ~~Novotema, SpA (“Novotema”),~~ABEL. ABEL designs and manufactures highly engineered reciprocating positive displacement pumps for a ~~leader~~variety of end markets, including mining, marine, power, water, wastewater and other general industries. Headquartered in Büchen, Germany, with sales and service locations in Madrid, Spain, and subsequent to the acquisition, with operations in Mansfield, Ohio, ABEL operates in the ~~design, manufacture and sale of specialty sealing solutions for use in~~Company’s Pumps reporting unit within the ~~building products, gas control, transportation, industrial and water markets.~~

~~The business was acquired to complement and create synergies with our existing Sealing Solutions platform. Located in Villongo, Italy, Novotema operates in our Health & Science Technologies~~FMT segment. ~~Novotema~~ABEL was acquired for cash consideration of ~~$61.1 million (€56 million).~~$106.3 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were ~~$34.3~~$42.7 million and ~~$20.0~~$46.0 million, respectively. The ~~$34.3 million of~~ goodwill is not deductible for tax purposes.

The Company finalized the allocation of the purchase price for the ABEL acquisition as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy.

The final allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date, is as follows:

Table of Contents


(In millions)	Total
Current assets, net of cash acquired	$	18.1
Property, plant and equipment	4.0
Goodwill	42.7
Intangible assets	46.0
Deferred income taxes	2.6
Other noncurrent assets	0.1
Total assets acquired	113.5
Current liabilities	(7.1)
Other noncurrent liabilities	(0.1)
Net assets acquired	$	106.3

The acquired intangible assets and weighted average amortization periods are as follows:


(In millions, except weighted average life)	Total		Weighted Average Life
Trade names	$	9.0	15
Customer relationships	30.0		13
Unpatented technology	7.0		11
Acquired intangible assets	$	46.0

Airtech

On June ~~10, 2015,~~14, 2021, the Company acquired the stock of ~~Alfa Valvole, S.r.l (“Alfa Valvole”),~~Airtech. Airtech designs and manufactures a ~~leader~~wide range of highly-engineered pressure technology products, including vacuum pumps, regenerative blowers, compressor systems and valves for a variety of end markets, including alternative energy, food processing, medical, packaging and transportation. Headquartered in Rutherford, New Jersey, with primary manufacturing operations in Werneck, Germany and Shenzhen, China, Airtech operates in the ~~design, manufacture and sale of specialty valve products for use in~~Company’s Performance Pneumatic Technologies reporting unit within the chemical, petro-chemical, energy and sanitary markets. The business was acquired to expand our valve capabilities. Located in Casorezzo, Italy, Alfa Valvole operates in our Fluid & Metering TechnologiesHST segment. ~~Alfa Valvole~~Airtech was acquired for cash consideration of ~~$112.6 million (€99.8 million).~~$471.0 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were ~~$69.6~~$268.5 million and ~~$32.1~~$202.3 million, respectively. The ~~$69.6 million of~~ goodwill is not deductible for tax purposes.

The Company finalized the allocation of the purchase price for the Airtech acquisition as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy.

The final allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date, is as follows:

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	Total
Current assets, net of cash acquired	$	45.3
Property, plant and equipment	4.8
Goodwill	268.5
Intangible assets	202.3
Other noncurrent assets	10.2
Total assets acquired	531.1
Current liabilities	(11.8)
Deferred income taxes	(39.9)
Other noncurrent liabilities	(8.4)
Net assets acquired	$	471.0

The acquired intangible assets and weighted average amortization periods are as follows:


	Total		Weighted Average Life
Trade names	$	15.4	15
Customer relationships	162.9		13
Unpatented technology	24.0		11
Acquired intangible assets	$	202.3

The Company incurred $6.5 million of acquisition-related costs in 2021. These costs were recorded in Selling, general and administrative expenses and were related to completed transactions, pending transactions and potential transactions, including transactions that ultimately were not completed. The Company also recorded $2.5 million and $9.1 million of fair value inventory step-up charges associated with the completed 2021 acquisitions of ABEL and Airtech, respectively, in Cost of sales for the year ended December 31, 2021.

2020 Acquisitions

Flow MD

On ~~July 1, 2015,~~February 28, 2020, the Company acquired the membership interests of ~~CiDRA Precision Services, LLC (“CPS” or “CiDRA Precision Services”),~~Flow MD, a ~~leader~~privately held provider of flow measurement systems that ensure custody transfer accuracy in the ~~design, manufacture~~oil and ~~sale of microfluidic components serving the life science, health~~gas industry. Flow MD engineers and ~~industrial markets. The business was acquired to provide a critical building block to our emerging microfluidic~~manufactures small volume provers. Headquartered in Phoenix, Arizona, with operations in Houston, Texas and ~~nanofluidic capabilities. Located in Wallingford, Connecticut, CPS~~Pittsburgh, Pennsylvania, Flow MD operates in ~~our Health & Science Technologies~~the Company’s Energy reporting unit within the FMT segment. ~~CPS~~Flow MD was acquired for ~~an aggregate purchase price~~cash consideration of $24.2 million, consisting of $19.5 million in cash and contingent consideration valued at $4.7 million as of the opening balance sheet date. The contingent consideration was based on the achievement of financial objectives during the 12-month period following the close. Based on potential outcomes, the undiscounted amount of all the future payments that the Company could have been required to make under the contingent consideration arrangement was between $0 and $5.5$121.2 million. During the six months ended June 30, 2016, the Company re-evaluated the contingent consideration arrangement and fully reversed the $4.7 million liability based on CPS’s actual operating results from July 1, 2015 to June 30, 2016. The $4.7 million reversal was recognized as a benefit within Selling, general and administrative expenses, of which $3.7 million was recognized in March 2016 and the remaining $1.0 million was recognized in June 2016. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were ~~$9.7~~$60.0 million and ~~$12.3~~$53.0 million, respectively. The ~~$9.7 million of~~ goodwill is deductible for tax purposes.

On December 1, 2015, the Company acquired the assets of a complementary product line within our Fluid & Metering Technologies segment. The purchase price and goodwill associated with this transaction were $1.9 million and $0.7 million, respectively.

The Company finalized the allocation of the purchase price for the Flow MD acquisition ~~costs~~as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy.

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The final allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values at ~~their respective~~the acquisition ~~dates,~~date, is as follows:


	Total
Current assets, net of cash acquired	$	32.9
Property, plant and equipment	4.2
Goodwill	60.0
Intangible assets	53.0
Deferred income taxes	2.5
Other noncurrent assets	1.3
Total assets acquired	153.9
Current liabilities	(32.3)
Other noncurrent liabilities	(0.4)
Net assets acquired	$	121.2

Novotema Alfa Valvole CPS Other Total
(In thousands)
Accounts receivable $ 8,029
$ 13,487
$ 945
$ —
$ 22,461
Inventory 2,886
11,036
442
1,102
15,466
Other assets, net of cash acquired 1,866
3,367
79
—
5,312
Property, plant and equipment 11,844
8,395
1,105
—
21,344
Goodwill 34,316
69,568
9,739
748
114,371
Intangible assets 20,011
32,058
12,290
—
64,359
Total assets acquired 78,952
137,911
24,600
1,850
243,313
Current liabilities (7,760 ) (11,279 ) (420 ) —
(19,459 )
Deferred income taxes (7,803 ) (12,622 ) —
—
(20,425 )
Other noncurrent liabilities (2,291 ) (1,420 ) —
—
(3,711 )
Net assets acquired $ 61,098
$ 112,590
$ 24,180
$ 1,850
$ 199,718

The acquired intangible assets and weighted average amortization periods are as follows:


	Total		Weighted Average Life
Trade names	$	6.0	15
Customer relationships	31.5		10
Unpatented technology	15.5		20
Acquired intangible assets	$	53.0

(In thousands, except weighted average life) Total
Weighted
Average
Life
Trade names $ 9,247
15
Customer relationships 44,401
12
Unpatented technology 10,711
8
Total acquired intangible assets $ 64,359

Qualtek

On November 23, 2020, the Company acquired Qualtek, a manufacturer of high quality specialty metal components and parts by providing vertically integrated tool and die, metal stamping and metal finishing services. Headquartered in Colorado Springs, Colorado, Qualtek operates in the BAND-IT reporting unit within the FSDP segment. Qualtek was acquired for cash consideration of $1.9 million. The entire purchase price was funded with cash on hand. Goodwill recognized as part of this transaction was $1.1 million. The goodwill recorded for the acquisition reflects the strategic fit, revenue and earnings growth potential of this business. The goodwill is deductible for tax purposes.

The Company finalized its allocation of the purchase price for the Qualtek acquisition as of the acquisition date based on its understanding of the fair value of the acquired assets. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy.

The Company incurred ~~$2.6~~$4.3 million of acquisition-related ~~transaction~~ costs in ~~2015.~~2020. These costs were recorded in Selling, general and administrative ~~expense~~expenses and were related to completed transactions, pending transactions and potential transactions, including transactions that ultimately were not completed. The Company also ~~incurred $3.4~~recorded $4.1 million and $0.1 million of ~~non-cash acquisition~~ fair value inventory step-up charges ~~in 2015. These charges were recorded~~associated with the completed 2020 acquisitions of Flow MD and Qualtek, respectively, in Cost of ~~sales.~~sales for the year ended December 31, 2020.

Divestitures

The Company periodically reviews its operations for businesses which may no longer be aligned with its strategic objectives and ~~focuses~~its focus on core business and customers. ~~Any resulting gain or loss recognized due to divestitures is recorded within Loss (gain) on sale~~

Table of businesses - net. The Company concluded that none of the divestitures that took place during the years ended December 31, 2017, 2016 and 2015 met the new criteria for reporting discontinued operations.Contents

On ~~October 31, 2017,~~September 9, 2022, the Company completed the sale of ~~its Faure Herman subsidiary~~Knight for ~~$21.8~~proceeds of $49.4 million, innet of cash remitted, resulting in a pre-tax gain on the sale of ~~$9.3 million. There~~$34.8 million, which was no income tax expense associated with this transaction. The results of Faure Herman were reported within the Fluid & Metering Technologies segment and generated $14.1 million of revenues in 2017 through the date of sale.

~~On July 29, 2016, the Company completed the~~recorded to Gain on sale of ~~its Hydra-Stop product line for $15.0 million~~business in ~~cash, resulting in a pre-tax gain on~~ the ~~sale~~Consolidated Statements of $5.8 million. In addition, the Company earned $1.0 million for the achievement of 2016 net sales objectives, which represents the maximum earn out for 2016, and the Company can earn an additional $1.0 million if 2017 net sales objectives are achieved.Income. The Company recorded ~~$2.8~~$5.5 million of income tax expense associated with this transaction as Provision for income taxes in the Consolidated Statements of Income through the date of disposition during the year ended December 31, ~~2016.~~2022. The results of ~~Hydra-Stop~~Knight were reported within the ~~Fluid & Metering Technologies~~FMT segment. The Company concluded that this divestiture did not meet the criteria for reporting the results of Knight as a discontinued operation.

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3. Collaborative Investments

On May 12, 2020, a subsidiary of IDEX entered into a joint venture agreement with a third party to form a limited liability company (the “Joint Venture”) that manufactures and sells high performance elastomer seals for the oil and gas industry to customers within the Kingdom of Saudi Arabia as well as exports these high performance elastomer seals outside of the Kingdom of Saudi Arabia. The Joint Venture is headquartered in Dammam, Saudi Arabia and operates in the Company’s Sealing Solutions reporting unit within the HST segment ~~and generated $7.5 million of revenues in 2016 through~~. During the ~~date of sale.~~

~~On September 9, 2016,~~year ended December 31, 2020, the Company ~~completed~~contributed $0.1 million for 55% of the ~~sale~~share capital while the third party partner contributed $0.1 million for 45% of ~~its Melles Griot KK (“CVI Japan”) subsidiary for $17.5~~the share capital. During the year ended December 31, 2021, the Company contributed an additional $0.6 million ~~in cash, resulting in a pre-tax loss on the sale of $7.9 million. The Company recorded $3.4 million of income tax benefit associated with this transaction~~and during the year ended December 31, ~~2016.~~2022, the third party partner contributed an additional $0.5 million. The ~~results of CVI Japan were reported within~~Joint Venture has incurred start-up expenses and began sales in July 2022. Since IDEX controls the ~~Health & Science Technologies segment~~entity, IDEX has consolidated the Joint Venture and ~~generated $13.1 million of revenues~~recorded a Noncontrolling interest in ~~2016 through the date of sale.~~its Consolidated Financial Statements.

On ~~October 10, 2016,~~June 29, 2021, a subsidiary of IDEX funded a $4.2 million convertible promissory note to a start-up company that provides communication technology to improve individual performance and team coordination for firefighters’ responses. The investment aligns with the FSDP segment’s strategic plan to reduce response time and greatly increase life-safety outcomes and is an extension of FSDP’s smart and connected products. The note bears paid-in-kind interest at a rate of 5% per annum and is secured by the Company’s interest in the intellectual property of the start-up company. Unless earlier converted, the principal amount outstanding and the related accrued interest are due upon the earliest of (a) June 28, 2024, (b) a change in control or (c) when declared due and payable by the Company ~~completed~~upon an event of default. On December 22, 2022, the ~~sale~~subsidiary of ~~its IETG~~IDEX funded an additional $3.0 million promissory note, which bears paid-in-kind interest at a rate of 5% per annum and ~~40Seven subsidiaries for $2.7 million~~is secured by the Company’s interest in ~~cash, resulting~~the intellectual property of the start-up company. The principal amount outstanding and the related accrued interest are due upon the earliest of (a) December 21, 2025, (b) a change in ~~a pre-tax loss~~control or (c) when declared due and payable by the Company upon an event of default.

The notes are included in Other noncurrent assets on the sale of $4.2 million. There was no income tax impact associated with this transaction. The results of IETG and 40Seven were reported within the Fluid & Metering Technologies segment and generated $8.3 million of revenues in 2016 through the date of sale.

~~On December 30, 2016,~~Company’s Consolidated Balance Sheets. In addition, the Company ~~completed the sale~~recorded $0.3 million and $0.1 million of ~~its Korea Electro-Optics Co., Ltd. (“CVI Korea”) subsidiary for $3.8 million~~accrued interest in ~~cash, resulting in a pre-tax loss~~Other noncurrent assets on the ~~sale of $16.0 million. The Company recorded $9.1 million of income tax benefit associated with this transaction during~~Company’s Consolidated Balance Sheets for the ~~year~~years ended December 31, ~~2016. The results of CVI Korea were reported within the Health & Science Technologies segment~~2022 and ~~generated $11.7 million of revenues in 2016 through the date of sale.~~

~~On July 31, 2015, the Company completed the sale of its Ismatec product line for $27.7 million in cash, resulting in a pre-tax gain on the sale of $18.1 million.~~2021, respectively. The Company ~~recorded $4.8 million~~measures the allowance for credit losses under the current expected credit loss model. As of ~~income tax expense associated with this transaction during the year ended~~ December 31, ~~2015. The results~~2022 and 2021, no allowance for credit losses was recorded.

Table of ~~Ismatec were reported in the Health & Science Technologies segment and generated $5.3 million of revenues in 2015 through the date of sale.~~Contents

3.4. Balance Sheet Components


	December 31,
	2022		2021
	(In millions)
RECEIVABLES
Customers	$	431.3	$	354.9
Other	19.5		8.7
Total	450.8		363.6
Less allowance for credit losses	8.0		7.2
Total receivables - net	$	442.8	$	356.4
INVENTORIES
Raw materials and components parts	$	301.2	$	229.4
Work in process	54.3		47.4
Finished goods	115.4		93.6
Total inventories	$	470.9	$	370.4
PROPERTY, PLANT AND EQUIPMENT
Land and improvements	$	35.2	$	39.1
Buildings and improvements	214.2		197.9
Machinery, equipment and other	492.4		467.8
Office and transportation equipment	100.6		96.7
Construction in progress	56.4		30.5
Total	898.8		832.0
Less accumulated depreciation and amortization	516.7		504.7
Total property, plant and equipment - net	$	382.1	$	327.3
ACCRUED EXPENSES
Payroll and related items	$	102.7	$	91.5
Management incentive compensation	26.4		25.0
Income taxes payable	30.2		17.9
Insurance	11.2		11.0
Warranty	8.1		7.6
Deferred revenue	44.7		49.0
Lease liability	21.6		17.6
Restructuring	1.4		2.8
Accrued interest	5.5		3.6
Pension and retiree medical obligations	3.3		3.5
Other	34.0		30.3
Total accrued expenses	$	289.1	$	259.8
OTHER NONCURRENT LIABILITIES
Pension and retiree medical obligations	$	55.1	$	82.2
Transition tax payable	9.1		14.1
Deferred revenue	15.0		32.2
Lease liability	96.6		93.4
Other	20.0		25.5
Total other noncurrent liabilities	$	195.8	$	247.4

December 31,
2017 2016
(In thousands)
RECEIVABLES
Customers $ 297,796
$ 275,250
Other 4,134
5,641
Total 301,930
280,891
Less allowance for doubtful accounts 7,764
8,078
Total receivables — net $ 294,166
$ 272,813
INVENTORIES
Raw materials and components parts $ 169,676
$ 154,278
Work in process 33,668
34,832
Finished goods 56,380
63,749
Total $ 259,724
$ 252,859
PROPERTY, PLANT AND EQUIPMENT
Land and improvements $ 32,984
$ 33,883
Buildings and improvements 175,467
169,261
Machinery, equipment and other 356,728
328,779
Office and transportation equipment 96,541
98,355
Construction in progress 14,715
10,373
Total 676,435
640,651
Less accumulated depreciation and amortization 418,085
392,835
Total property, plant and equipment — net $ 258,350
$ 247,816
ACCRUED EXPENSES
Payroll and related items $ 75,869
$ 67,600
Management incentive compensation 24,320
16,339
Income taxes payable 28,033
8,808
Insurance 9,424
9,416
Warranty 6,281
5,628
Deferred revenue 11,031
12,607
Restructuring 4,180
3,893
Liability for uncertain tax positions 1,745
1,366
Accrued interest 1,759
1,663
Other 22,063
25,532
Total accrued expenses $ 184,705
$ 152,852
OTHER NONCURRENT LIABILITIES
Pension and retiree medical obligations $ 99,646
$ 93,604
Transition tax payable 27,877
—
Liability for uncertain tax positions 1,047
2,623
Deferred revenue 3,297
2,442
Other 23,818
22,561
Total other noncurrent liabilities $ 155,685
$ 121,230

Table of Contents

The valuation and qualifying account activity for the years ended December 31, ~~2017, 2016~~2022 and ~~2015~~2021 is as follows:


											2022		2021
	2017			2016			2015				(In millions)
	(In thousands)
ALLOWANCE FOR DOUBTFUL ACCOUNTS ⁽¹⁾
ALLOWANCE FOR CREDIT LOSSES										ALLOWANCE FOR CREDIT LOSSES
Beginning balance January 1	$	8,078		$	7,812		$	6,961		Beginning balance January 1	$	7.2	$	6.1
Charged to costs and expenses, net of recoveries	720			1,425			1,556			Charged to costs and expenses, net of recoveries	2.2		1.5
Utilization	(1,418		)	(1,585		)	(1,009		)	Utilization	(1.2)		(0.9)
Currency translation and other	384			426			304
Other adjustments, including acquisitions and currency translation										Other adjustments, including acquisitions and currency translation	(0.2)		0.5
Ending balance December 31	$	7,764		$	8,078		$	7,812		Ending balance December 31	$	8.0	$	7.2



Title of ~~Each Class~~each class	Trading Symbol(s)	Name of ~~Each Exchange~~each exchange on ~~Which Registered~~which registered
Common Stock, par value $.01 per share	IEX	New York Stock Exchange


Name	Age	Years of Service	Position
Eric D. Ashleman	55	14	Chief Executive Officer and President
William K. Grogan	44	11	Senior Vice President and Chief Financial Officer
Lisa M. Anderson	46	6	Senior Vice President, General Counsel and Corporate Secretary
Melissa S. Flores	40	12	Senior Vice President and Chief Human Resources Officer
Marc Uleman	59	11	Senior Vice President, Group Executive, Health & Science Technologies
Roopa Unnikrishnan	51	1	Senior Vice President, Strategy and Corporate Development



Name	Age	Years of Service	Position
Andrew K. Silvernail	47	9	Chairman of the Board and Chief Executive Officer
William K. Grogan	39	6	Senior Vice President and Chief Financial Officer
Eric D. Ashleman	50	9	Senior Vice President and Chief Operating Officer
Denise R. Cade	55	2	Senior Vice President, General Counsel and Corporate Secretary
Daniel J. Salliotte	51	13	Senior Vice President-Corporate Strategy, Mergers & Acquisitions and Treasury
Michael J. Yates	52	12	Vice President and Chief Accounting Officer
Jeffrey D. Bucklew	47	6	Senior Vice President-Chief Human Resources Officer
James MacLennan	54	6	Senior Vice President-Chief Information Officer



	2017						2016
	High		Low		Dividends		High		Low		Dividends
First Quarter	$	96.24	$	88.29	$	0.34	$	84.05	$	67.20	$	0.32
Second Quarter	114.94		91.60		0.37		87.18		77.93		0.34
Third Quarter	124.54		110.25		0.37		95.33		79.91		0.34
Fourth Quarter	135.70		120.93		0.37		95.76		82.05		0.34


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value that May Yet be Purchased Under the Plans or Programs
October 1, 2022 to October 31, 2022	6,800	$	199.04	6,800	$	563,841,420
November 1, 2022 to November 30, 2022	—	—		—	563,841,420
December 1, 2022 to December 31, 2022	—	—		—	563,841,420
Total	6,800	$	199.04	6,800	$	563,841,420



þ☑		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	~~For the Fiscal Year Ended December 31, 2017~~



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the ~~Transition Period From~~transition period from to


	Year Ended December 31, 2022			Year Ended December 31, 2021
	FMT	HST	FSDP	FMT	HST	FSDP
Net Sales	37%	42%	21%	36%	41%	23%
Adjusted EBITDA(1)	39%	42%	19%	36%	42%	22%


	Domestic	International
FMT	57%		43%
Pumps	57%		43%
Water	58%		42%
Energy	62%		38%
Valves	14%		86%
Agriculture	77%		23%

HST	48%		52%
Scientific Fluidics & Optics	49%		51%
Sealing Solutions	24%		76%
Performance Pneumatic Technologies	81%		19%
Material Processing Technologies	38%		62%
Micropump	28%		72%

FSDP	50%		50%
Fire & Safety	53%		47%
Dispensing	40%		60%
BAND-IT	57%		43%

IDEX	52%		48%


	Square footage (in millions)
		Location		Owned/Leased
	Total	Domestic	International	Owned	Leased
Fluid & Metering Technologies	2.0	1.4	0.6	1.3	0.7
Health & Science Technologies	2.0	1.0	1.0	0.7	1.3
Fire & Safety/Diversified Products	1.2	0.6	0.6	0.9	0.3
Other(1)	0.3	0.1	0.2	0.1	0.2
Total	5.5	3.1	2.4	3.0	2.5


~~Item 5.~~	~~Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.~~



Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾	Maximum Dollar Value that May Yet be Purchased Under the Plans or Programs⁽¹⁾
October 1, 2017 to October 31, 2017	44,000	$	123.79	44,000	$	550,936,062
November 1, 2017 to November 30, 2017	—	—		—	550,936,062
December 1, 2017 to December 31, 2017	—	—		—	550,936,062
Total	44,000	$	—	44,000	$	550,936,062


~~(1)~~	On December 1, 2015, the Company’s Board of Directors approved an increase of $300.0 million in the authorized level of repurchases of common stock. This followed the prior Board of Directors approved repurchase authorization of $400.0 million that was announced by the Company on November 6, 2014. These authorizations have no expiration date.


	12/17		12/18		12/19		12/20		12/21		12/22
IDEX Corporation	$	100.00	$	96.84	$	133.58	$	156.55	$	187.57	$	183.39
S&P 500 Index	$	100.00	$	95.62	$	125.72	$	148.85	$	191.58	$	156.88
S&P Midcap 400 Industrials Sector Index	$	100.00	$	85.11	$	113.67	$	132.41	$	170.07	$	150.52
Russell 2000 Index	$	100.00	$	88.99	$	111.70	$	134.00	$	153.85	$	122.41



	12/12		12/13		12/14		12/15		12/16		12/17
IDEX Corporation	$	100.00	$	158.71	$	167.29	$	164.65	$	193.55	$	283.62
S&P 500 Index	$	100.00	$	129.60	$	144.36	$	143.31	$	156.98	$	187.47
S&P Midcap 400 Industrials Sector Index	$	100.00	$	142.45	$	142.88	$	136.77	$	173.79	$	212.37
Russell 2000 Index	$	100.00	$	137.00	$	141.84	$	133.74	$	159.78	$	180.79


~~Item 1.~~	~~Business.~~



2. Reconciliations of Segment EBITDA

	For the Years Ended December 31,
	2017									2016									2015
	FMT			HST			FSDP			FMT			HST			FSDP			FMT			HST			FSDP
	(In thousands)
EBITDA	$	263,610		$	225,649		$	159,610		$	242,892		$	200,980		$	135,400		$	233,008		$	200,953		$	123,249
+ Restructuring expenses	3,374			4,696			255			932			1,117			1,425			7,090			3,408			576
+ Pension settlement	—			—			—			2,032			—			540			—			—			—
Adjusted EBITDA	$	266,984		$	230,345		$	159,865		$	245,856		$	202,097		$	137,365		$	240,098		$	204,361		$	123,825

Net sales	$	880,957		$	820,131		$	587,533		$	849,101		$	744,809		$	520,009		$	860,792		$	738,996		$	423,915
EBITDA margin	29.9		%	27.5		%	27.2		%	28.6		%	27.0		%	26.0		%	27.1		%	27.2		%	29.1		%
Adjusted EBITDA margin	30.3		%	28.1		%	27.2		%	29.0		%	27.1		%	26.4		%	27.9		%	27.7		%	29.2		%



6. Reconciliations of EBITDA to Net Income (dollars in thousands)

	For the Year Ended December 31, 2017
	FMT			HST			FSDP			Corporate			IDEX
Operating income (loss)	$	241,030		$	179,567		$	147,028		$	(65,069	)	$	502,556
- Other (income) expense - net	1,007			(795		)	1,959			223			2,394
+ Depreciation and amortization	23,587			45,287			14,541			801			84,216
EBITDA	263,610			225,649			159,610			(64,491		)	584,378
- Interest expense													44,889
- Provision for income taxes													118,016
- Depreciation and amortization													84,216
Net income													$	337,257

Net sales (eliminations)	$	880,957		$	820,131		$	587,533		$	(1,309	)	$	2,287,312

Operating margin	27.4		%	21.9		%	25.0		%	n/m			22.0		%
EBITDA margin	29.9		%	27.5		%	27.2		%	n/m			25.5		%




	For the Year Ended December 31, 2016
	FMT			HST			FSDP			Corporate			IDEX
Operating income (loss)	$	217,500		$	153,691		$	123,605		$	(82,399	)	$	412,397
- Other (income) expense - net	3,066			(1,991		)	161			(2,967		)	(1,731		)
+ Depreciation and amortization	28,458			45,298			11,956			1,180			86,892
EBITDA	242,892			200,980			135,400			(78,252		)	501,020
- Interest expense													45,616
- Provision for income taxes													97,403
- Depreciation and amortization													86,892
Net income													$	271,109

Net sales (eliminations)	$	849,101		$	744,809		$	520,009		$	(876	)	$	2,113,043

Operating margin	25.6		%	20.6		%	23.8		%	n/m			19.5		%
EBITDA margin	28.6		%	27.0		%	26.0		%	n/m			23.7		%




	For the Year Ended December 31, 2015
	FMT			HST			FSDP			Corporate			IDEX
Operating income (loss)	$	206,419		$	158,364		$	117,346		$	(45,139	)	$	436,990
- Other (income) expense - net	1,073			238			148			1,550			3,009
+ Depreciation and amortization	27,662			42,827			6,051			1,580			78,120
EBITDA	233,008			200,953			123,249			(45,109		)	512,101
- Interest expense													41,636
- Provision for income taxes													109,538
- Depreciation and amortization													78,120
Net income													$	282,807

Net sales (eliminations)	$	860,792		$	738,996		$	423,915		$	(3,035	)	$	2,020,668

Operating margin	24.0		%	21.4		%	27.7		%	n/m			21.6		%
EBITDA margin	27.1		%	27.2		%	29.1		%	n/m			25.3		%



Payments Due by Period	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
	(In thousands)
Borrowings ⁽¹⁾	$	1,006,865	$	37,147	$	381,853	$	377,840	$	210,025
Operating lease obligations	64,859		15,992		21,529		11,904		15,434
Capital lease obligations ⁽²⁾	268		258		10		—		—
Purchase obligations ⁽³⁾	137,685		132,152		3,716		1,389		428
Repatriation tax payable	30,301		2,424		4,848		4,848		18,181
Pension and post-retirement obligations	112,621		13,602		22,288		22,021		54,710
Total contractual obligations ⁽⁴⁾	$	1,352,599	$	201,575	$	434,244	$	418,002	$	298,778



	Common Stock and Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)									Treasury Stock			Total Shareholders’ Equity
	Common Stock and Additional Paid-In Capital		Retained Earnings			Cumulative Translation Adjustment			Retirement Benefits Adjustments			Cumulative Unrealized Gain (Loss) on Derivatives			Treasury Stock			Total Shareholders’ Equity
	(In thousands except share and per share amounts)
Balance, December 31, 2014	$	648,451	$	1,483,821		$	(24,813	)	$	(40,316	)	$	(27,149	)	$	(553,543	)	$	1,486,451
Net income	—		282,807			—			—			—			—			282,807
Cumulative translation adjustment	—		—			(68,166		)	—			—			—			(68,166		)
Net change in retirement obligations (net of tax of $3,842)	—		—			—			9,415			—			—			9,415
Net change on derivatives designated as cash flow hedges (net of tax of $2,499)	—		—			—			—			4,531			—			4,531
Issuance of 685,501 shares of common stock from issuance of unvested shares, exercise of stock options and deferred compensation plans (net of tax of $3,794)	14,545		—			—			—			—			9,937			24,482
Repurchase of 2,811,002 shares of common stock	—														(210,551		)	(210,551		)
Share-based compensation	17,529		—			—			—			—			—			17,529
Unvested shares surrendered for tax withholding	—		—			—			—			—			(3,259		)	(3,259		)
Cash dividends declared — $1.28 per common share outstanding	—		(99,948		)	—			—			—			—			(99,948		)
Balance, December 31, 2015	$	680,525	$	1,666,680		$	(92,979	)	$	(30,901	)	$	(22,618	)	$	(757,416	)	$	1,443,291
Net income	—		271,109			—			—			—			—			271,109
Cumulative translation adjustment	—		—			(62,565		)	—			—			—			(62,565		)
Net change in retirement obligations (net of tax of $2,107)	—		—			—			3,049			—			—			3,049
Net change on derivatives designated as cash flow hedges (net of tax of $2,490)	—		—			—			—			4,361			—			4,361
Issuance of 594,919 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $5,305)	253		—			—			—			—			29,987			30,240
Repurchase of 738,593 shares of common stock	—		—			—			—			—			(54,950		)	(54,950		)
Share-based compensation	17,337		—			—			—			—			—			17,337
Unvested shares surrendered for tax withholding	—		—			—			—			—			(4,928		)	(4,928		)
Cash dividends declared — $1.36 per common share outstanding	—		(103,050		)	—			—			—			—			(103,050		)
Balance, December 31, 2016	$	698,115	$	1,834,739		$	(155,544	)	$	(27,852	)	$	(18,257	)	$	(787,307	)	$	1,543,894
Net income	—		337,257			—			—			—			—			337,257
Cumulative translation adjustment	—		—			113,170			—			—			—			113,170
Net change in retirement obligations (net of tax of $239)	—		—			—			(1,302		)	—			—			(1,302		)
Net change on derivatives designated as cash flow hedges (net of tax of $2,445)	—		—			—			—			4,210			—			4,210
Issuance of 557,591 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $6,027)	—		—			—			—			—			22,935			22,935
Repurchase of 266,000 shares of common stock	—		—			—			—			—			(29,074		)	(29,074		)
Share-based compensation	19,693		—			—			—			—			—			19,693
Unvested shares surrendered for tax withholding	—		—			—			—			—			(6,228		)	(6,228		)
Tax effect of reversal of indefinite assertion on certain intercompany loans	—		—			(3,932		)	—			—			—			(3,932		)
Cash dividends declared — $1.48 per common share outstanding	—		(114,081		)	—			—			—			—			(114,081		)
Balance, December 31, 2017	$	717,808	$	2,057,915		$	(46,306	)	$	(29,154	)	$	(14,047	)	$	(799,674	)	$	1,886,542



	Akron Brass			AWG Fittings			SFC Koenig			Total
(In thousands)
Accounts receivable	$	14,523		$	5,867		$	9,190		$	29,580
Inventory	29,157			11,766			20,639			61,562
Other assets, net of cash acquired	446			565			4,501			5,512
Property, plant and equipment	12,195			6,595			4,637			23,427
Goodwill	124,643			22,055			141,298			287,996
Intangible assets	90,400			10,279			116,998			217,677
Deferred income taxes	—			3,928			—			3,928
Total assets acquired	271,364			61,055			297,263			629,682
Current liabilities	(7,081		)	(5,117		)	(11,704		)	(23,902		)
Deferred income taxes	(36,439		)	—			(36,168		)	(72,607		)
Other noncurrent liabilities	(6,445		)	(8,444		)	(8,283		)	(23,172		)
Net assets acquired	$	221,399		$	47,494		$	241,108		$	510,001



	Novotema			Alfa Valvole			CPS			Other		Total
(In thousands)
Accounts receivable	$	8,029		$	13,487		$	945		$	—	$	22,461
Inventory	2,886			11,036			442			1,102		15,466
Other assets, net of cash acquired	1,866			3,367			79			—		5,312
Property, plant and equipment	11,844			8,395			1,105			—		21,344
Goodwill	34,316			69,568			9,739			748		114,371
Intangible assets	20,011			32,058			12,290			—		64,359
Total assets acquired	78,952			137,911			24,600			1,850		243,313
Current liabilities	(7,760		)	(11,279		)	(420		)	—		(19,459		)
Deferred income taxes	(7,803		)	(12,622		)	—			—		(20,425		)
Other noncurrent liabilities	(2,291		)	(1,420		)	—			—		(3,711		)
Net assets acquired	$	61,098		$	112,590		$	24,180		$	1,850	$	199,718



(In thousands, except weighted average life)	Total		Weighted Average Life
Trade names	$	9,247	15
Customer relationships	44,401		12
Unpatented technology	10,711		8
Total acquired intangible assets	$	64,359


~~(1)~~	~~Includes provision for doubtful accounts, sales returns and sales discounts granted to customers.~~


	December 31, 2022		December 31, 2021
	(In millions)
Billed receivables	$	421.3	$	344.0
Unbilled receivables	10.0		10.9
Total customer receivables	$	431.3	$	354.9



	Fluid & Metering Technologies			Health & Science Technologies			Fire & Safety/ Diversified Products			Total
	(In thousands)
Goodwill	$	605,491		$	740,425		$	251,244		$	1,597,160
Accumulated goodwill impairment losses	(20,721		)	(149,820		)	(30,090		)	(200,631		)
Balance at January 1, 2016	584,770			590,605			221,154			1,396,529
Foreign currency translation	(5,951		)	(23,559		)	(7,972		)	(37,482		)
Acquisitions	—			143,719			146,674			290,393
Disposition of businesses	(3,759		)	(12,013		)	—			(15,772		)
Acquisition adjustments	(1,623		)	547			—			(1,076		)
Balance at December 31, 2016	573,437			699,299			359,856			1,632,592
Foreign currency translation	15,748			19,225			18,206			53,179
Acquisitions	—			23,929			—			23,929
Disposition of business	(3,121		)	—			—			(3,121		)
Acquisition adjustments	—			(2,421		)	—			(2,421		)
Balance at December 31, 2017	$	586,064		$	740,032		$	378,062		$	1,704,158


	At December 31, 2022							At December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net		Weighted Average Life	Gross Carrying Amount		Accumulated Amortization		Net
			(In millions)							(In millions)
Amortized intangible assets:
Patents	$	2.9	$	(1.8)	$	1.1	12	$	3.2	$	(2.0)	$	1.2
Trade names	186.5		(71.4)		115.1		15	140.9		(72.4)		68.5
Customer relationships	772.2		(184.9)		587.3		13	495.9		(144.2)		351.7
Unpatented technology	207.1		(57.8)		149.3		12	143.8		(58.8)		85.0
Software	4.8		(0.7)		4.1		5	—		—		—
Total amortized intangible assets	1,173.5		(316.6)		856.9			783.8		(277.4)		506.4
Indefinite-lived intangible assets:
Banjo trade name	62.1		—		62.1			62.1		—		62.1
Akron Brass trade name	28.8		—		28.8			28.8		—		28.8
Total intangible assets	$	1,264.4	$	(316.6)	$	947.8		$	874.7	$	(277.4)	$	597.3



	At December 31, 2017								At December 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net		Weighted Average Life	Gross Carrying Amount		Accumulated Amortization			Net
			(In thousands)								(In thousands)
Amortized intangible assets:
Patents	$	9,633	$	(7,143	)	$	2,490	11	$	9,856	$	(6,635	)	$	3,221
Trade names	117,206		(50,604		)	66,602		16	113,428		(42,653		)	70,775
Customer relationships	317,316		(124,566		)	192,750		13	369,087		(161,065		)	208,022
Unpatented technology	91,166		(29,428		)	61,738		13	106,747		(44,516		)	62,231
Other	839		(573		)	266		10	6,527		(6,172		)	355
Total amortized intangible assets	536,160		(212,314		)	323,846			605,645		(261,041		)	344,604
Indefinite-lived intangible assets:
Banjo trade name	62,100		—			62,100			62,100		—			62,100
Akron Brass trade name	28,800		—			28,800			28,800		—			28,800
Total intangible assets	$	627,060	$	(212,314	)	$	414,746		$	696,545	$	(261,041	)	$	435,504


(In millions)
2023	$	100.0
2024	—
2025	100.1
2026	—
2027	277.7
Thereafter	1,000.0
Total borrowings	$	1,477.8



(In thousands)
2018	$	1,436
2019	10
2020	310,740
2021	350,000
2022	—
Thereafter	200,000
Total borrowings	$	862,186



	Fair Value Assets (Liabilities)
	December 31, 2017		December 31, 2016		Balance Sheet Caption
	(In thousands)
Foreign currency exchange contracts	$	5,779	$	—	Other current assets


	Basis of Fair Value Measurements
	Balance at December 31, 2022		Level 1		Level 2		Level 3
	(In millions)
Trading securities - mutual funds held in nonqualified SERP(1)	$	7.5	$	7.5	$	—	$	—


	Basis of Fair Value Measurements
	Balance at December 31, 2021		Level 1		Level 2		Level 3
	(In millions)
Trading securities - mutual funds held in nonqualified SERP(1)	$	11.6	$	11.6	$	—	$	—
Available-for-sale securities - equities(2)	45.3		45.3		—		—



	Operating		Capital
	(In thousands)
2018	$	15,992	$	258
2019	12,064		10
2020	9,465		—
2021	6,904		—
2022	4,999		—
2023 and thereafter	15,435		—
	$	64,859	$	268