UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________

Form 10-Q


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	~~March 31,~~June 30, 2022


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

Commission file number 1-10235

IDEX CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware

36-3555336

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

3100 Sanders Road,

Suite 301,

Northbrook,

Illinois

60062

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (847) 498-7070

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, par value $.01 per share

IEX

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Table of Contents

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Number of shares of common stock of IDEX Corporation outstanding as of ~~April~~July 22, 2022: ~~76,005,607.~~75,475,605.

Table of Contents

TABLE OF CONTENTS


Part I. Financial Information
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Equity	4
	Condensed Consolidated Statements of Cash Flows	56
	Notes to Condensed Consolidated Financial Statements	67
	Note 1. Basis of Presentation and Significant Accounting Policies	67
	Note 2. Acquisitions	67
	Note 3. Business Segments	1012
	Note 4. Revenue	1113
	Note 5. Earnings Per Common Share	1416
	Note 6. Inventories	1517
	Note 7. Goodwill and Intangible Assets	1517
	Note 8. Accrued Expenses	1619
	Note 9. Other Noncurrent Liabilities	1719
	Note 10. Borrowings	1720
	Note 11. Fair Value Measurements	1821
	Note 12. Leases	1922
	Note 13. Restructuring Expenses and Asset Impairments	2023
	Note 14. Other Comprehensive (Loss) Income	2225
	Note 15. Share Repurchases	2226
	Note 16. Share-Based Compensation	2226
	Note 17. Retirement Benefits	2630
	Note 18. Legal Proceedings	2731
	Note 19. Income Taxes	2731
	~~Note 20. Subsequent Events~~	27
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2832
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4049
Item 4.	Controls and Procedures	4049

Part II. Other Information
Item 1.	Legal Proceedings	4150
Item 1A.	Risk Factors	4150
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4150
Item 6.	Exhibits	4251
Signatures		4352

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

IDEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions, except per share amounts)

(unaudited)


		March 31, 2022		December 31, 2021			June 30, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	733.2	$	855.4	Cash and cash equivalents	$	557.8	$	855.4
Receivables, less allowance for doubtful accounts of $7.5 at March 31, 2022 and $7.2 at December 31, 2021		411.2		356.4
Receivables, less allowance for doubtful accounts of $7.9 at June 30, 2022 and $7.2 at December 31, 2021						Receivables, less allowance for doubtful accounts of $7.9 at June 30, 2022 and $7.2 at December 31, 2021	425.7		356.4
Inventories	Inventories	428.5		370.4		Inventories	457.4		370.4
Other current assets	Other current assets	108.4		95.8		Other current assets	110.4		95.8
Total current assets	Total current assets	1,681.3		1,678.0		Total current assets	1,551.3		1,678.0
Property, plant and equipment - net	Property, plant and equipment - net	325.8		327.3		Property, plant and equipment - net	323.3		327.3
Goodwill	Goodwill	2,213.5		2,167.7		Goodwill	2,238.6		2,167.7
Intangible assets - net	Intangible assets - net	629.2		597.3		Intangible assets - net	655.0		597.3
Other noncurrent assets	Other noncurrent assets	149.9		146.9		Other noncurrent assets	144.6		146.9
Total assets	Total assets	$	4,999.7	$	4,917.2	Total assets	$	4,912.8	$	4,917.2
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities	Current liabilities					Current liabilities
Trade accounts payable	Trade accounts payable	$	210.2	$	178.8	Trade accounts payable	$	214.4	$	178.8
Accrued expenses	Accrued expenses	258.1		259.8		Accrued expenses	254.0		259.8

Dividends payable	Dividends payable	—		41.4		Dividends payable	45.4		41.4
Total current liabilities	Total current liabilities	468.3		480.0		Total current liabilities	513.8		480.0
Long-term borrowings	Long-term borrowings	1,190.6		1,190.3		Long-term borrowings	1,190.9		1,190.3
Deferred income taxes	Deferred income taxes	196.6		196.4		Deferred income taxes	189.6		196.4
Other noncurrent liabilities	Other noncurrent liabilities	245.3		247.4		Other noncurrent liabilities	230.5		247.4
Total liabilities	Total liabilities	2,100.8		2,114.1		Total liabilities	2,124.8		2,114.1
Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	0		0
Shareholders’ equity	Shareholders’ equity					Shareholders’ equity
Preferred stock:	Preferred stock:					Preferred stock:
Authorized: 5,000,000 shares, $.01 per share par value; Issued: None	Authorized: 5,000,000 shares, $.01 per share par value; Issued: None	—		—		Authorized: 5,000,000 shares, $.01 per share par value; Issued: None	—		—
Common stock:	Common stock:					Common stock:
Authorized: 150,000,000 shares, $.01 per share par value	Authorized: 150,000,000 shares, $.01 per share par value					Authorized: 150,000,000 shares, $.01 per share par value
Issued: 90,070,399 shares at March 31, 2022 and 90,067,996 shares at December 31, 2021		0.9		0.9
Issued: 90,075,084 shares at June 30, 2022 and 90,067,996 shares at December 31, 2021						Issued: 90,075,084 shares at June 30, 2022 and 90,067,996 shares at December 31, 2021	0.9		0.9
Additional paid-in capital	Additional paid-in capital	802.2		795.6		Additional paid-in capital	809.1		795.6
Retained earnings	Retained earnings	3,266.5		3,126.5		Retained earnings	3,313.8		3,126.5
Treasury stock at cost: 13,972,023 shares at March 31, 2022 and 13,872,555 shares at December 31, 2021		(1,082.1)		(1,050.3)
Treasury stock at cost: 14,405,163 shares at June 30, 2022 and 13,872,555 shares at December 31, 2021						Treasury stock at cost: 14,405,163 shares at June 30, 2022 and 13,872,555 shares at December 31, 2021	(1,165.8)		(1,050.3)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(88.5)		(69.6)		Accumulated other comprehensive loss	(169.8)		(69.6)
Total shareholders’ equity	Total shareholders’ equity	2,899.0		2,803.1		Total shareholders’ equity	2,788.2		2,803.1
Noncontrolling interest	Noncontrolling interest	(0.1)		—		Noncontrolling interest	(0.2)		—
Total equity	Total equity	2,898.9		2,803.1		Total equity	2,788.0		2,803.1
Total liabilities and equity	Total liabilities and equity	$	4,999.7	$	4,917.2	Total liabilities and equity	$	4,912.8	$	4,917.2

See Notes to Condensed Consolidated Financial Statements

Table of Contents

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(unaudited)


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2022			2021			2022		2021		2022		2021
Net sales	Net sales		$	751.1		$	652.0	Net sales	$	796.1	$	686.0	$	1,547.2	$	1,338.0
Cost of sales	Cost of sales		408.6			359.4		Cost of sales	439.2		379.9		847.8		739.3
Gross profit	Gross profit		342.5			292.6		Gross profit	356.9		306.1		699.4		598.7
Selling, general and administrative expenses	Selling, general and administrative expenses		154.3			134.9		Selling, general and administrative expenses	167.5		144.6		321.8		279.5
Restructuring expenses and asset impairments	Restructuring expenses and asset impairments		0.6			2.2		Restructuring expenses and asset impairments	2.8		3.2		3.4		5.4
Operating income	Operating income		187.6			155.5		Operating income	186.6		158.3		374.2		313.8
Other income - net			(2.3)			(0.8)
Other expense (income) - net								Other expense (income) - net	—		17.2		(2.3)		16.4
Interest expense	Interest expense		9.5			10.7		Interest expense	9.5		11.2		19.0		21.9
Income before income taxes	Income before income taxes		180.4			145.6		Income before income taxes	177.1		129.9		357.5		275.5
Provision for income taxes	Provision for income taxes		40.5			32.9		Provision for income taxes	39.0		27.7		79.5		60.6
Net income	Net income		139.9			112.7		Net income	138.1		102.2		278.0		214.9
Net loss attributable to noncontrolling interest	Net loss attributable to noncontrolling interest		0.1			—		Net loss attributable to noncontrolling interest	0.1		—		0.2		—
Net income attributable to IDEX	Net income attributable to IDEX		$	140.0		$	112.7	Net income attributable to IDEX	$	138.2	$	102.2	$	278.2	$	214.9

Earnings per common share:	Earnings per common share:							Earnings per common share:
Basic earnings per common share attributable to IDEX	Basic earnings per common share attributable to IDEX		$	1.84		$	1.48	Basic earnings per common share attributable to IDEX	$	1.82	$	1.34	$	3.66	$	2.83
Diluted earnings per common share attributable to IDEX	Diluted earnings per common share attributable to IDEX		$	1.83		$	1.48	Diluted earnings per common share attributable to IDEX	$	1.81	$	1.34	$	3.65	$	2.81

Share data:	Share data:							Share data:
Basic weighted average common shares outstanding	Basic weighted average common shares outstanding		76.1			75.9		Basic weighted average common shares outstanding	75.8		76.0		76.0		75.9
Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding		76.4			76.3		Diluted weighted average common shares outstanding	76.1		76.4		76.2		76.4

See Notes to Condensed Consolidated Financial Statements

Table of Contents

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(unaudited)


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2022			2021			2022		2021		2022		2021
Net income	Net income		$	139.9		$	112.7	Net income	$	138.1	$	102.2	$	278.0	$	214.9
Other comprehensive loss:	Other comprehensive loss:							Other comprehensive loss:
Reclassification adjustments for derivatives, net of tax	Reclassification adjustments for derivatives, net of tax		—			0.7		Reclassification adjustments for derivatives, net of tax	—		1.8		—		2.5
Pension and other postretirement adjustments, net of tax	Pension and other postretirement adjustments, net of tax		0.6			0.8		Pension and other postretirement adjustments, net of tax	0.6		9.2		1.2		10.0
Cumulative translation adjustment	Cumulative translation adjustment		(19.5)			(48.5)		Cumulative translation adjustment	(81.9)		20.3		(101.4)		(28.2)
Other comprehensive loss	Other comprehensive loss		(18.9)			(47.0)		Other comprehensive loss	(81.3)		31.3		(100.2)		(15.7)
Comprehensive income	Comprehensive income		121.0			65.7		Comprehensive income	56.8		133.5		177.8		199.2
Comprehensive loss attributable to noncontrolling interest	Comprehensive loss attributable to noncontrolling interest		—			—		Comprehensive loss attributable to noncontrolling interest	0.1		—		0.2		—
Comprehensive income attributable to IDEX	Comprehensive income attributable to IDEX		$	121.0		$	65.7	Comprehensive income attributable to IDEX	$	56.9	$	133.5	$	178.0	$	199.2

See Notes to Condensed Consolidated Financial Statements

Table of Contents

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in millions)

(unaudited)

Accumulated Other Comprehensive Loss
Common
Stock and
Additional
Paid-In Capital Retained
Earnings Cumulative
Translation
Adjustment Retirement
Benefits
Adjustment Treasury
Stock Total
Shareholders’
Equity Noncontrolling Interest Total Equity
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) — 140.0 — — — 140.0 (0.1) 139.9
Cumulative translation adjustment — — (19.5) — — (19.5) — (19.5)
Net change in retirement obligations (net of tax of $0.2) — — — 0.6 — 0.6 — 0.6
Issuance of 73,755 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $1.7) — — — — 1.4 1.4 — 1.4
Repurchase of 147,500 shares of common stock — — — — (28.3) (28.3) (28.3)
Shares surrendered for tax withholding — — — — (4.9) (4.9) — (4.9)
Share-based compensation 6.6 — — — — 6.6 — 6.6
Balance, March 31, 2022 $ 803.1 $ 3,266.5 $ (81.7) $ (6.8) $ (1,082.1) $ 2,899.0 $ (0.1) $ 2,898.9

Accumulated Other Comprehensive Loss
Common
Stock and
Additional
Paid-In Capital Retained
Earnings Cumulative
Translation
Adjustment Retirement
Benefits
Adjustment Cumulative
Unrealized Gain (Loss) on
Derivatives Treasury
Stock Total
Shareholders’
Equity Noncontrolling Interest Total Equity
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 — 112.7 — — — — 112.7 — 112.7
Cumulative translation adjustment — — (48.5) — — — (48.5) — (48.5)
Net change in retirement obligations (net of tax of $0.3) — — — 0.8 — — 0.8 — 0.8
Net change on derivatives designated as cash flow hedges (net of tax of $0.2) — — — — 0.7 — 0.7 — 0.7
Issuance of 106,122 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $1.9) — — — — — 3.2 3.2 — 3.2
Shares surrendered for tax withholding — — — — — (5.4) (5.4) — (5.4)
Share-based compensation 6.2 — — — — — 6.2 — 6.2
Balance, March 31, 2021 $ 782.3 $ 2,954.2 $ (35.1) $ (23.6) $ (1.8) $ (1,066.1) $ 2,609.9 $ 0.1 $ 2,610.0


					Accumulated Other Comprehensive Loss
	Common Stock and Additional Paid-In Capital		Retained Earnings		Cumulative Translation Adjustment		Retirement Benefits Adjustment		Treasury Stock		Total Shareholders’ Equity		Noncontrolling Interest		Total Equity
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)	—		140.0		—		—		—		140.0		(0.1)		139.9
Cumulative translation adjustment	—		—		(19.5)		—		—		(19.5)		—		(19.5)
Net change in retirement obligations (net of tax of $0.2)	—		—		—		0.6		—		0.6		—		0.6
Issuance of 73,755 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $1.7)	—		—		—		—		1.4		1.4		—		1.4
Repurchase of 147,500 shares of common stock	—		—		—		—		(28.3)		(28.3)				(28.3)
Shares surrendered for tax withholding	—		—		—		—		(4.9)		(4.9)		—		(4.9)
Share-based compensation	6.6		—		—		—		—		6.6		—		6.6
Balance, March 31, 2022	$	803.1	$	3,266.5	$	(81.7)	$	(6.8)	$	(1,082.1)	$	2,899.0	$	(0.1)	$	2,898.9
Net income (loss)	—		138.2		—		—		—		138.2		(0.1)		138.1
Cumulative translation adjustment	—		—		(81.9)		—		—		(81.9)				(81.9)
Net change in retirement obligations (net of tax of $0.5)	—		—		—		0.6		—		0.6		—		0.6
Issuance of 42,408 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $0.4)	—		—		—		—		3.8		3.8		—		3.8
Repurchase of 474,690 shares of common stock	—		—		—		—		(87.5)		(87.5)		—		(87.5)
Share-based compensation	6.9		—		—		—		—		6.9		—		6.9
Cash dividends declared - $1.20 per common share outstanding	—		(90.9)		—		—		—		(90.9)		—		(90.9)
Balance, June 30, 2022	$	810.0	$	3,313.8	$	(163.6)	$	(6.2)	$	(1,165.8)	$	2,788.2	$	(0.2)	$	2,788.0

Table of Contents

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in millions)

(unaudited)


					Accumulated Other Comprehensive Loss
	Common Stock and Additional Paid-In Capital		Retained Earnings		Cumulative Translation Adjustment		Retirement Benefits Adjustment		Cumulative Unrealized Gain (Loss) on Derivatives		Treasury Stock		Total Shareholders’ Equity		Noncontrolling Interest		Total Equity
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	—		112.7		—		—		—		—		112.7		—		112.7
Cumulative translation adjustment	—		—		(48.5)		—		—		—		(48.5)		—		(48.5)
Net change in retirement obligations (net of tax of $0.3)	—		—		—		0.8		—		—		0.8		—		0.8
Net change on derivatives designated as cash flow hedges (net of tax of $0.2)	—		—		—		—		0.7		—		0.7		—		0.7
Issuance of 106,122 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $1.9)	—		—		—		—		—		3.2		3.2		—		3.2
Shares surrendered for tax withholding	—		—		—		—		—		(5.4)		(5.4)		—		(5.4)
Share-based compensation	6.2		—		—		—		—		—		6.2		—		6.2
Balance, March 31, 2021	$	782.3	$	2,954.2	$	(35.1)	$	(23.6)	$	(1.8)	$	(1,066.1)	$	2,609.9	$	0.1	$	2,610.0
Net income	—		102.2		—		—		—		—		102.2		—		102.2
Cumulative translation adjustment	—		—		20.3		—		—		—		20.3		—		20.3
Net change in retirement obligations (net of tax of $2.8)	—		—		—		9.2		—		—		9.2		—		9.2
Net change on derivatives designated as cash flow hedges (net of tax of $0.5)	—		—		—		—		1.8		—		1.8		—		1.8
Issuance of 67,476 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $0.6)	—		—		—		—		—		7.5		7.5		—		7.5
Shares surrendered for tax withholding	—		—		—		—		—		(0.1)		(0.1)		—		(0.1)
Share-based compensation	4.3		—		—		—		—		—		4.3		—		4.3
Cash dividends declared - $1.08 per common share outstanding	—		(82.3)		—		—		—		—		(82.3)		—		(82.3)
Balance, June 30, 2021	$	786.6	$	2,974.1	$	(14.8)	$	(14.4)	$	—	$	(1,058.7)	$	2,672.8	$	0.1	$	2,672.9

See Notes to Condensed Consolidated Financial Statements

Table of Contents

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(unaudited)


		Three Months Ended March 31,					Six Months Ended June 30,
		2022		2021			2022		2021
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income	Net income	$	139.9	$	112.7	Net income	$	278.0	$	214.9
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of assets	Gain on sale of assets	(2.7)		—		Gain on sale of assets	(2.6)		—
Asset impairments	Asset impairments	—		0.1		Asset impairments	0.2		0.2
Depreciation and amortization	Depreciation and amortization	12.2		10.6		Depreciation and amortization	24.7		21.5
Amortization of intangible assets	Amortization of intangible assets	15.3		11.0		Amortization of intangible assets	32.2		24.5
Amortization of debt issuance expenses	Amortization of debt issuance expenses	0.4		0.4		Amortization of debt issuance expenses	0.8		1.0
Share-based compensation expense	Share-based compensation expense	6.6		6.2		Share-based compensation expense	13.5		10.5
Deferred income taxes	Deferred income taxes	1.0		0.5		Deferred income taxes	(0.2)		(14.0)
Non-cash interest expense associated with forward starting swaps	Non-cash interest expense associated with forward starting swaps	—		0.9		Non-cash interest expense associated with forward starting swaps	—		3.3
Termination of the U.S. pension plan						Termination of the U.S. pension plan	—		9.7
Changes in (net of the effect from acquisitions/divestitures and foreign exchange):	Changes in (net of the effect from acquisitions/divestitures and foreign exchange):					Changes in (net of the effect from acquisitions/divestitures and foreign exchange):
Receivables	Receivables	(49.0)		(46.3)		Receivables	(68.7)		(46.3)
Inventories	Inventories	(50.2)		(7.5)		Inventories	(84.5)		(20.9)
Other current assets	Other current assets	(12.7)		3.3		Other current assets	(17.8)		0.1
Trade accounts payable	Trade accounts payable	28.1		20.0		Trade accounts payable	36.2		22.6
Deferred revenue	Deferred revenue	6.4		11.1		Deferred revenue	1.3		15.5
Accrued expenses	Accrued expenses	(16.3)		(11.1)		Accrued expenses	(22.5)		2.3
Other - net	Other - net	0.7		(2.6)		Other - net	1.4		0.7
Net cash flows provided by operating activities	Net cash flows provided by operating activities	79.7		109.3		Net cash flows provided by operating activities	192.0		245.6
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(16.1)		(14.6)		Purchases of property, plant and equipment	(31.7)		(30.6)
Acquisition of businesses, net of cash acquired	Acquisition of businesses, net of cash acquired	(114.7)		(106.2)		Acquisition of businesses, net of cash acquired	(234.9)		(575.6)

Note receivable from collaborative partner						Note receivable from collaborative partner	—		(4.2)
Proceeds from disposal of fixed assets	Proceeds from disposal of fixed assets	6.5		0.2		Proceeds from disposal of fixed assets	6.6		0.2
Other - net	Other - net	(0.1)		1.1		Other - net	(0.1)		0.9
Net cash flows used in investing activities	Net cash flows used in investing activities	(124.4)		(119.5)		Net cash flows used in investing activities	(260.1)		(609.3)
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities

Proceeds from issuance of long-term borrowings						Proceeds from issuance of long-term borrowings	—		499.4
Payment of long-term borrowings						Payment of long-term borrowings	—		(350.0)

Payment of make-whole redemption premium						Payment of make-whole redemption premium	—		(6.7)
Debt issuance costs						Debt issuance costs	—		(4.6)
Dividends paid	Dividends paid	(41.4)		(38.1)		Dividends paid	(86.9)		(79.2)
Proceeds from stock option exercises	Proceeds from stock option exercises	1.4		3.2		Proceeds from stock option exercises	5.2		10.7
Repurchases of common stock	Repurchases of common stock	(26.3)		—		Repurchases of common stock	(110.4)		—
Shares surrendered for tax withholding	Shares surrendered for tax withholding	(4.9)		(5.4)		Shares surrendered for tax withholding	(4.9)		(5.5)
Other - net	Other - net	(0.1)		(0.1)		Other - net	(0.1)		(0.1)
Net cash flows used in financing activities		(71.3)		(40.4)
Net cash flows (used in) provided by financing activities						Net cash flows (used in) provided by financing activities	(197.1)		64.0
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(6.2)		(17.2)		Effect of exchange rate changes on cash and cash equivalents	(32.4)		(11.8)
Net decrease in cash	Net decrease in cash	(122.2)		(67.8)		Net decrease in cash	(297.6)		(311.5)
Cash and cash equivalents at beginning of year	Cash and cash equivalents at beginning of year	855.4		1,025.9		Cash and cash equivalents at beginning of year	855.4		1,025.9
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	733.2	$	958.1	Cash and cash equivalents at end of period	$	557.8	$	714.4

Supplemental cash flow information	Supplemental cash flow information					Supplemental cash flow information
Cash paid for:	Cash paid for:					Cash paid for:
Interest	Interest	$	0.4	$	0.5	Interest	$	18.5	$	17.2
Income taxes	Income taxes	15.4		18.3		Income taxes	86.9		72.7

See Notes to Condensed Consolidated Financial Statements

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

1. Basis of Presentation and Significant Accounting Policies

The Condensed Consolidated Financial Statements of IDEX Corporation (“IDEX” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to interim financial information and the instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended. The statements are unaudited but include all adjustments, consisting only of recurring items, except as noted, that the Company considers necessary for a fair presentation of the information set forth herein. The results of operations for the three and six months ended ~~March 31,~~June 30, 2022 are not necessarily indicative of the results to be expected for the entire year.

The Condensed Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in this report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Issued Accounting Standards

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 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 list of exceptions to the 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 after the effective date of the amendments. The adoption of this standard is not expected to have a material impact on the Company’s Condensed Consolidated Financial Statements.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Accounting Standards Codification (“ASC”) 832): Disclosures by Business Entities about Government Assistance, which requires entities to provide certain annual disclosures when they (1) have received government assistance and (2) use a grant or contribution accounting model by analogy to other accounting guidance. ASU 2021-10 is effective for annual periods beginning after December 15, 2021. Early adoption is permitted, and entities may apply the ASU’s provisions prospectively or retrospectively. The adoption of this standard is not expected to have a material impact on the Company’s Condensed Consolidated Financial Statements.

2. Acquisitions

All of the Company’s acquisitions of businesses have been accounted for under ASC 805, Business Combinations. Accordingly, the assets and liabilities of the acquired companies, after adjustments to reflect the fair values assigned to assets and liabilities, have been included in the Company’s Condensed Consolidated Financial Statements from their respective dates of acquisition. The results of operations of ABEL Pumps, L.P. and certain of its affiliates (“ABEL”) ~~and~~, Airtech Group, Inc., US Valve Corporation and related entities (“Airtech”), Nexsight, LLC and its businesses Envirosight, WinCan, MyTana and Pipeline Renewal Technologies (“Nexsight”) and KZ CO. (“KZValve”) have been included in the Company’s Condensed Consolidated Financial Statements since the dates of acquisition on March 10, 2021, ~~and~~ June 14, 2021, February 28, 2022 and May 2, 2022, respectively. Supplemental pro forma information has not been provided as the acquisitions did not have a material impact on the Company’s Condensed Consolidated Financial Statements individually or in the aggregate.

2022 ~~Acquisition~~Acquisitions

Nexsight

On February 28, 2022, the Company acquired Nexsight ~~LLC and its businesses Envirosight, WinCan, MyTana and Pipeline Renewal Technologies (“Nexsight”)~~ in a partial stock and asset acquisition. Nexsight complements and creates synergies with the 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 Company’s Water reporting unit within the Fluid & Metering Technologies (“FMT”) segment. Nexsight was acquired for cash consideration of $114.7 million. The entire

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were ~~$55.0~~$58.3 million and $49.8 million, respectively. The goodwill is partially deductible for tax purposes.

The Company made a preliminary allocation of the purchase price for the 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 continues to obtain additional information about these assets and liabilities, including intangible asset appraisals, inventory valuation and accrued expenses, 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:


	Total
Current assets, net of cash acquired	$	~~18.3~~16.6
Property, plant and equipment	2.0
Goodwill	~~55.0~~58.3
Intangible assets	49.8
Other noncurrent assets	~~6.0~~4.4
Total assets acquired	131.1
Current liabilities	~~(10.5)~~(11.1)
Deferred income taxes	~~(1.6)~~(1.0)
Other noncurrent liabilities	(4.3)
Net assets acquired	$	114.7

Acquired intangible assets consist of trade names, customer relationships and software. 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:


	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 May 2, 2022, the Company acquired KZValve in an asset acquisition. KZValve is a leading manufacturer of electric valves and controllers used primarily in agricultural applications. KZValve will augment and expand IDEX’s agricultural portfolio, complementing Banjo’s current fluid management solutions for these applications. Headquartered in Greenwood, Nebraska, KZValve operates in the Company’s Agriculture reporting unit within the FMT segment. KZValve was acquired for cash consideration of $120.2 million. The entire purchase was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $56.6 million and $52.0 million, respectively. The goodwill is deductible for tax purposes.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

The Company made a preliminary allocation of the purchase price for the KZValve 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, inventory valuation and accrued expenses, 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:


	Total
Current assets, net of cash acquired	$	9.7
Property, plant and equipment	1.8
Goodwill	56.6
Intangible assets	52.0
Deferred income taxes	0.1
Other noncurrent assets	1.0
Total assets acquired	121.2
Current liabilities	(1.0)


Net assets acquired	$	120.2

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:


	Total		Weighted Average Life
Trade names	$	7.5	15
Customer relationships	36.0		13
Unpatented technology	8.5		10
Acquired intangible assets	$	52.0

The Company incurred ~~$0.9~~$1.7 million and $2.6 million of acquisition-related transaction costs during the three and six months ended ~~March 31, 2022.~~June 30, 2022, respectively. 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 $0.1 million and $0.3 million of fair value inventory step-up charges associated with the completed 2022 acquisitions of Nexsight and KZValve, respectively, in Cost of sales during the three and six months ended June 30, 2022.

2021 Acquisitions

ABEL

On March 10, 2021, the Company acquired the stock of ABEL. ABEL designs and manufactures highly engineered reciprocating positive displacement pumps for a 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 Company’s Pumps reporting unit within the FMT segment. ABEL was acquired for cash consideration of $106.3 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $42.7 million and $46.0 million, respectively. The goodwill is not deductible for tax purposes.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

~~with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $42.7 million and $46.0 million, respectively. The 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:


	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:


	Total		Weighted Average Life
Trade names	$	9.0	15
Customer relationships	30.0		13
Unpatented technology	7.0		11
Acquired intangible assets	$	46.0

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

Airtech

On June 14, 2021, the Company acquired the stock of Airtech. Airtech designs and manufactures a 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 Company’s Performance Pneumatic Technologies reporting unit within the Health & Science Technologies (“HST”) segment. Airtech was acquired for cash consideration of $471.0 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were ~~$268.6~~$268.5 million and $202.3 million, respectively. The goodwill is not deductible for tax purposes.

The Company ~~made a preliminary~~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. As the Company continues to obtain additional information about these assets and liabilities, including intangible asset appraisals, inventory valuation and accrued expenses, 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~~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:


	Total
Current assets, net of cash acquired	$	45.3
Property, plant and equipment	4.8
Goodwill	~~268.6~~268.5
Intangible assets	202.3
Other noncurrent assets	~~10.1~~10.2
Total assets acquired	531.1
Current liabilities	~~(11.1)~~(11.8)
Deferred income taxes	~~(40.6)~~(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 ~~$1.4~~$2.3 million and $3.7 million of acquisition-related costs during the three and six months ended ~~March 31, 2021.~~June 30, 2021, respectively. 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 a ~~$0.7 million~~ fair value inventory step-up charge associated with the completed 2021 acquisition of ABEL in Cost of sales, of which $1.8 million was recorded during the three months ended ~~March 31,~~June 30, 2021 and $2.5 million was recorded during the six months ended June 30, 2021.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

3. Business Segments

IDEX has 3 reportable business segments: Fluid & Metering Technologies (“FMT”), Health & Science Technologies (“HST”) and Fire & Safety/Diversified Products (“FSDP”).

The FMT segment designs, produces and distributes positive displacement pumps, valves, small volume provers, flow meters, injectors and other fluid-handling pump modules and systems and provides flow monitoring and other services for the food, chemical, general industrial, water and wastewater, agriculture and energy industries.

The HST segment designs, produces and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems, pneumatic components and sealing 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 and precision gear and peristaltic pump technologies. HST serves a variety of end markets, including food and beverage, pharmaceutical and biopharmaceutical, cosmetics, marine, chemical, wastewater and water treatment, life sciences, research and defense markets.

The FSDP segment designs, produces and develops firefighting pumps, valves and controls, 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.

Information on the Company’s business segments is presented below based on the nature of the products and services offered. The Company evaluates its performance based on several factors, of which sales, operating income and operating margin are the primary financial measures. Intersegment sales are accounted for at fair value as if the sales were to third parties.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2022			2021			2022		2021		2022		2021
Net sales	Net sales							Net sales
Fluid & Metering Technologies	Fluid & Metering Technologies							Fluid & Metering Technologies
External customers	External customers		$	271.9		$	243.0	External customers	$	299.5	$	250.9	$	571.4	$	493.9
Intersegment sales	Intersegment sales		0.1			0.3		Intersegment sales	0.4		0.4		0.5		0.7
Total segment sales	Total segment sales		272.0			243.3		Total segment sales	299.9		251.3		571.9		494.6
Health & Science Technologies	Health & Science Technologies							Health & Science Technologies
External customers	External customers		314.6			249.5		External customers	325.4		274.3		640.0		523.8
Intersegment sales	Intersegment sales		0.6			0.9		Intersegment sales	0.6		0.7		1.2		1.6
Total segment sales	Total segment sales		315.2			250.4		Total segment sales	326.0		275.0		641.2		525.4
Fire & Safety/Diversified Products	Fire & Safety/Diversified Products							Fire & Safety/Diversified Products
External customers	External customers		164.6			159.5		External customers	171.2		160.8		335.8		320.3
Intersegment sales	Intersegment sales		0.1			—		Intersegment sales	—		—		0.1		—
Total segment sales	Total segment sales		164.7			159.5		Total segment sales	171.2		160.8		335.9		320.3
Intersegment elimination	Intersegment elimination		(0.8)			(1.2)		Intersegment elimination	(1.0)		(1.1)		(1.8)		(2.3)
Total net sales	Total net sales		$	751.1		$	652.0	Total net sales	$	796.1	$	686.0	$	1,547.2	$	1,338.0
Operating income (loss) (1)	Operating income (loss) (1)							Operating income (loss) (1)
Fluid & Metering Technologies	Fluid & Metering Technologies		$	80.4		$	62.9	Fluid & Metering Technologies	$	82.9	$	63.5	$	163.3	$	126.4
Health & Science Technologies	Health & Science Technologies		83.6			66.6		Health & Science Technologies	86.5		76.0		170.1		142.6
Fire & Safety/Diversified Products	Fire & Safety/Diversified Products		40.5			44.6		Fire & Safety/Diversified Products	39.9		42.8		80.4		87.4
Corporate office and other	Corporate office and other		(16.9)			(18.6)		Corporate office and other	(22.7)		(24.0)		(39.6)		(42.6)
Total operating income	Total operating income		$	187.6		$	155.5	Total operating income	$	186.6	$	158.3	$	374.2	$	313.8


		March 31, 2022		December 31, 2021			June 30, 2022		December 31, 2021
Assets	Assets					Assets
Fluid & Metering Technologies	Fluid & Metering Technologies	$	1,635.6	$	1,458.8	Fluid & Metering Technologies	$	1,742.6	$	1,458.8
Health & Science Technologies	Health & Science Technologies	2,182.6		2,138.3		Health & Science Technologies	2,119.9		2,138.3
Fire & Safety/Diversified Products	Fire & Safety/Diversified Products	905.2		892.5		Fire & Safety/Diversified Products	906.2		892.5
Corporate office and other	Corporate office and other	276.3		427.6		Corporate office and other	144.1		427.6
Total assets	Total assets	$	4,999.7	$	4,917.2	Total assets	$	4,912.8	$	4,917.2

(1) Segment operating income (loss) excludes net unallocated corporate operating expenses.

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~~IDEX CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share amounts)~~

~~(unaudited)~~

4. Revenue

Disaggregation of Revenue

The Company has a comprehensive offering of products, including technologies, built to customers’ specifications that are sold in niche markets throughout the world. The Company disaggregates its revenue from contracts with customers by reporting unit and geographical region for each segment as the Company believes it best depicts how the amount, nature, timing and uncertainty of its revenue and cash flows are affected by economic factors. Revenue was attributed to geographical region based on the location of the customer. The following tables present revenue disaggregated by reporting unit and geographical region.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

Revenue by reporting unit for the three and six months ended ~~March 31,~~June 30, 2022 and 2021 was as follows:


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2022			2021			2022		2021		2022		2021
Pumps	Pumps		$	97.4		$	82.3	Pumps	$	104.5	$	89.1	$	201.9	$	171.4
Water(1)	Water(1)		64.4			58.7		Water(1)	81.6		65.5		146.0		124.2
Energy	Energy		48.3			45.3		Energy	44.7		40.1		93.0		85.4
Agriculture	Agriculture		32.3			26.0		Agriculture	38.1		25.1		70.4		51.1
Valves(1)	Valves(1)		29.6			31.0		Valves(1)	31.0		31.5		60.6		62.5
Intersegment elimination	Intersegment elimination		(0.1)			(0.3)		Intersegment elimination	(0.4)		(0.4)		(0.5)		(0.7)
Fluid & Metering Technologies	Fluid & Metering Technologies		271.9			243.0		Fluid & Metering Technologies	299.5		250.9		571.4		493.9
Scientific Fluidics & Optics	Scientific Fluidics & Optics		141.2			114.4		Scientific Fluidics & Optics	149.2		130.4		290.4		244.8
Sealing Solutions	Sealing Solutions		70.2			65.6		Sealing Solutions	68.0		69.1		138.2		134.7
Performance Pneumatic Technologies~~(2)~~	Performance Pneumatic Technologies~~(2)~~		62.0			32.9		Performance Pneumatic Technologies~~(2)~~	65.1		30.3		127.1		63.2
Material Processing Technologies	Material Processing Technologies		33.7			29.9		Material Processing Technologies	34.8		36.5		68.5		66.4
Micropump	Micropump		8.1			7.6		Micropump	8.9		8.7		17.0		16.3
Intersegment elimination	Intersegment elimination		(0.6)			(0.9)		Intersegment elimination	(0.6)		(0.7)		(1.2)		(1.6)
Health & Science Technologies	Health & Science Technologies		314.6			249.5		Health & Science Technologies	325.4		274.3		640.0		523.8
Fire & Safety	Fire & Safety		95.7			96.8		Fire & Safety	99.8		98.0		195.5		194.8
Dispensing	Dispensing		41.6			36.9		Dispensing	43.8		38.9		85.4		75.8
BAND-IT	BAND-IT		27.4			25.8		BAND-IT	27.6		23.9		55.0		49.7
Intersegment elimination	Intersegment elimination		(0.1)			—		Intersegment elimination	—		—		(0.1)		—
Fire & Safety/Diversified Products	Fire & Safety/Diversified Products		164.6			159.5		Fire & Safety/Diversified Products	171.2		160.8		335.8		320.3
Total net sales	Total net sales		$	751.1		$	652.0	Total net sales	$	796.1	$	686.0	$	1,547.2	$	1,338.0

(1) During the third quarter of 2021, the Company merged a business in the Water reporting unit with a business in the Valves reporting unit. Revenue for each reporting unit has been restated to reflect this change for the three and six months ended ~~March 31,~~June 30, 2021.

~~(2)~~ This reporting unit was previously named Gast and was renamed Performance Pneumatic Technologies upon the acquisition of Airtech on June 14, 2021. Prior to the acquisition date, amounts reflect only the Gast business.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

Revenue by geographical region for the three and six months ended ~~March 31,~~June 30, 2022 and 2021 was as follows:


		Three Months Ended March 31, 2022									Three Months Ended June 30, 2022
		FMT		HST		FSDP		IDEX			FMT		HST		FSDP		IDEX
U.S.	U.S.	$	150.0	$	152.0	$	76.5	$	378.5	U.S.	$	170.5	$	157.7	$	85.0	$	413.2
North America, excluding U.S.	North America, excluding U.S.	17.3		7.5		10.9		35.7		North America, excluding U.S.	16.6		9.5		8.5		34.6
Europe	Europe	48.7		91.3		45.0		185.0		Europe	51.8		92.5		42.0		186.3
Asia	Asia	36.5		58.8		23.4		118.7		Asia	41.2		60.8		26.6		128.6
Other (1)	Other (1)	19.5		5.6		8.9		34.0		Other (1)	19.8		5.5		9.1		34.4
Intersegment elimination	Intersegment elimination	(0.1)		(0.6)		(0.1)		(0.8)		Intersegment elimination	(0.4)		(0.6)		—		(1.0)
Total net sales	Total net sales	$	271.9	$	314.6	$	164.6	$	751.1	Total net sales	$	299.5	$	325.4	$	171.2	$	796.1


		Three Months Ended March 31, 2021									Three Months Ended June 30, 2021
		FMT		HST		FSDP		IDEX			FMT		HST		FSDP		IDEX
U.S.	U.S.	$	131.0	$	93.7	$	75.5	$	300.2	U.S.	$	131.1	$	113.9	$	71.8	$	316.8
North America, excluding U.S.	North America, excluding U.S.	14.8		7.1		7.2		29.1		North America, excluding U.S.	14.1		4.4		8.2		26.7
Europe	Europe	48.6		76.8		42.6		168.0		Europe	52.7		95.5		45.4		193.6
Asia	Asia	33.7		67.7		26.9		128.3		Asia	37.9		51.3		26.8		116.0
Other (1)	Other (1)	15.2		5.1		7.3		27.6		Other (1)	15.5		9.9		8.6		34.0
Intersegment elimination	Intersegment elimination	(0.3)		(0.9)		—		(1.2)		Intersegment elimination	(0.4)		(0.7)		—		(1.1)
Total net sales	Total net sales	$	243.0	$	249.5	$	159.5	$	652.0	Total net sales	$	250.9	$	274.3	$	160.8	$	686.0


	Six Months Ended June 30, 2022
	FMT		HST		FSDP		IDEX
U.S.	$	320.5	$	309.7	$	161.5	$	791.7
North America, excluding U.S.	33.9		17.0		19.4		70.3
Europe	100.5		183.8		87.0		371.3
Asia	77.7		119.6		50.0		247.3
Other (1)	39.3		11.1		18.0		68.4
Intersegment elimination	(0.5)		(1.2)		(0.1)		(1.8)
Total net sales	$	571.4	$	640.0	$	335.8	$	1,547.2


	Six Months Ended June 30, 2021
	FMT		HST		FSDP		IDEX
U.S.	$	262.1	$	207.6	$	147.3	$	617.0
North America, excluding U.S.	28.9		11.5		15.4		55.8
Europe	101.3		172.3		88.0		361.6
Asia	71.6		119.0		53.7		244.3
Other (1)	30.7		15.0		15.9		61.6
Intersegment elimination	(0.7)		(1.6)		—		(2.3)
Total net sales	$	493.9	$	523.8	$	320.3	$	1,338.0

(1) Other includes: South America, Middle East, Australia and Africa.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

Performance Obligations

The Company’s performance obligations are satisfied either at a point in time or over time as work progresses. Revenue from products and services transferred to customers at a point in time approximated 96% and 95% of total revenues in ~~both~~ the three months ended ~~March 31,~~June 30, 2022 and 2021, respectively, and 96% in both the six months ended June 30, 2022 and 2021. Revenue from products and services transferred to customers over time approximated 4% and 5% of total revenues in ~~both~~ the three months ended ~~March 31,~~June 30, 2022 and 2021, respectively, and 4% in both the six months ended June 30, 2022 and 2021.

Contract Balances

The timing of revenue recognition, billings and cash collections can result in customer receivables, advance payments or billings in excess of revenue recognized. Customer receivables include both amounts billed and currently due from customers as well as unbilled amounts (contract assets) and are included in Receivables on the Condensed Consolidated Balance Sheets. Amounts are billed in accordance with contractual terms or as work progresses. Unbilled amounts arise when the timing of billing differs from the timing of revenue recognized, such as when contract provisions require specific milestones to be met before a customer can be billed. Unbilled amounts primarily relate to performance obligations satisfied over time when the cost-to-cost method is utilized and the revenue recognized exceeds the amount billed to the customer as there is not yet a right to invoice in accordance with contractual terms. Unbilled amounts are recorded as a contract asset when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract.

The composition of ~~Customer~~customer receivables was as follows:

~~Table of Contents~~

~~IDEX CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share amounts)~~

~~(unaudited)~~


		March 31, 2022		December 31, 2021			June 30, 2022		December 31, 2021
Billed receivables	Billed receivables	$	397.3	$	344.0	Billed receivables	$	411.6	$	344.0
Unbilled receivables	Unbilled receivables	10.1		10.9		Unbilled receivables	9.9		10.9
Total customer receivables	Total customer receivables	$	407.4	$	354.9	Total customer receivables	$	421.5	$	354.9

Advance payments, deposits and billings in excess of revenue recognized are included in Deferred revenue, which is classified as current or noncurrent based on the timing of when the Company expects to recognize the revenue. The current portion is included in Accrued expenses and the noncurrent portion is included in Other noncurrent liabilities on the Condensed Consolidated Balance Sheets. Advance payments and deposits represent contract liabilities and are recorded when customers remit contractual cash payments in advance of the Company satisfying performance obligations under contractual arrangements, including those with performance obligations satisfied over time. The Company generally receives advance payments from customers related to maintenance services which are recognized ratably over the service term. The Company also receives deposits from customers on certain orders which the Company recognizes as revenue at a point in time. Billings in excess of revenue recognized represent contract liabilities and primarily relate to performance obligations satisfied over time when the cost-to-cost method is utilized and revenue cannot yet be recognized as the Company has not completed the corresponding performance obligation. Contract liabilities are derecognized when revenue is recognized and the performance obligation is satisfied.

The composition of Deferred revenue was as follows:


		March 31, 2022		December 31, 2021			June 30, 2022		December 31, 2021
Deferred revenue - current	Deferred revenue - current	$	59.8	$	49.0	Deferred revenue - current	$	57.3	$	49.0
Deferred revenue - noncurrent	Deferred revenue - noncurrent	30.8		32.2		Deferred revenue - noncurrent	28.4		32.2
Total deferred revenue	Total deferred revenue	$	90.6	$	81.2	Total deferred revenue	$	85.7	$	81.2

5. Earnings Per Common Share

Diluted earnings per common share (“EPS”) attributable to IDEX is computed by dividing net income attributable to IDEX by the weighted average number of shares of common stock (basic) plus common stock equivalents outstanding (diluted) during the period. 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.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

ASC 260, Earnings Per Share, concludes that all outstanding unvested share-based payment awards that contain rights to 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:


		Three Months Ended March 31,		Three Months Ended June 30,				Six Months Ended June 30,
			2022		2021		2022	2021	2022	2021
Basic weighted average common shares outstanding	Basic weighted average common shares outstanding		76.1		75.9	Basic weighted average common shares outstanding	75.8	76.0	76.0	75.9
Dilutive effect of stock options, restricted stock and performance share units	Dilutive effect of stock options, restricted stock and performance share units		0.3		0.4	Dilutive effect of stock options, restricted stock and performance share units	0.3	0.4	0.2	0.5
Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding		76.4		76.3	Diluted weighted average common shares outstanding	76.1	76.4	76.2	76.4

Options to purchase approximately 0.5 million and 0.3 million shares of common stock for the three months ended ~~March 31,~~June 30, 2022 and 2021, respectively, and 0.5 million and 0.3 million shares of common stock for the six months ended June 30, 2022 and 2021, respectively, were not included in the computation of diluted EPS attributable to IDEX because the effect of their inclusion would have been antidilutive.

~~Table of Contents~~

~~IDEX CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share amounts)~~

~~(unaudited)~~

6. Inventories

The components of inventories as of ~~March 31,~~June 30, 2022 and December 31, 2021 were:


		March 31, 2022		December 31, 2021			June 30, 2022		December 31, 2021
Raw materials and component parts	Raw materials and component parts	$	262.8	$	229.4	Raw materials and component parts	$	286.0	$	229.4
Work in process	Work in process	53.0		47.4		Work in process	54.1		47.4
Finished goods	Finished goods	112.7		93.6		Finished goods	117.3		93.6
Total inventories	Total inventories	$	428.5	$	370.4	Total inventories	$	457.4	$	370.4

Inventories are stated at the lower of cost or net realizable value. Cost, which includes material, labor and overhead, is determined on a first in, first out basis.

7. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the ~~three~~six months ended ~~March 31,~~June 30, 2022, by reportable business segment, were as follows:


		FMT		HST		FSDP		IDEX			FMT		HST		FSDP		IDEX
Goodwill	Goodwill	$	701.7	$	1,264.3	$	402.3	$	2,368.3	Goodwill	$	701.7	$	1,264.3	$	402.3	$	2,368.3
Accumulated goodwill impairment losses	Accumulated goodwill impairment losses	(20.7)		(149.8)		(30.1)		(200.6)		Accumulated goodwill impairment losses	(20.7)		(149.8)		(30.1)		(200.6)
Balance at December 31, 2021	Balance at December 31, 2021	681.0		1,114.5		372.2		2,167.7		Balance at December 31, 2021	681.0		1,114.5		372.2		2,167.7
Foreign currency translation	Foreign currency translation	(2.3)		(5.8)		(2.4)		(10.5)		Foreign currency translation	(9.7)		(24.7)		(10.8)		(45.2)
Acquisitions	Acquisitions	55.0		—		—		55.0		Acquisitions	114.9		—		—		114.9
Acquisition adjustments	Acquisition adjustments	0.3		1.0		—		1.3		Acquisition adjustments	0.3		0.9		—		1.2
Balance at March 31, 2022		$	734.0	$	1,109.7	$	369.8	$	2,213.5
Balance at June 30, 2022										Balance at June 30, 2022	$	786.5	$	1,090.7	$	361.4	$	2,238.6

ASC 350, Goodwill and Other Intangible Assets, requires that goodwill be tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. In the first ~~three~~six months of 2022, there were no events or

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

circumstances that would have required an interim impairment test. Annually, on October 31, goodwill and other acquired intangible assets with indefinite lives are tested for impairment. Based on the results of the Company’s annual impairment test at October 31, 2021, all reporting units had fair values in excess of their carrying values.

~~Table of Contents~~

~~IDEX CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share amounts)~~

~~(unaudited)~~

The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset at ~~March 31,~~June 30, 2022 and December 31, 2021:


		At March 31, 2022							At December 31, 2021							At June 30, 2022							At December 31, 2021
		Gross Carrying Amount		Accumulated Amortization		Net		Weighted Average Life	Gross Carrying Amount		Accumulated Amortization		Net			Gross Carrying Amount		Accumulated Amortization		Net		Weighted Average Life	Gross Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets:	Amortized intangible assets:														Amortized intangible assets:
Patents	Patents	$	3.2	$	(2.1)	$	1.1	10	$	3.2	$	(2.0)	$	1.2	Patents	$	3.0	$	(1.9)	$	1.1	10	$	3.2	$	(2.0)	$	1.2
Trade names	Trade names	153.6		(74.7)		78.9		15	140.9		(72.4)		68.5		Trade names	157.9		(76.2)		81.7		15	140.9		(72.4)		68.5
Customer relationships	Customer relationships	524.6		(152.6)		372.0		13	495.9		(144.2)		351.7		Customer relationships	551.1		(159.7)		391.4		13	495.9		(144.2)		351.7
Unpatented technology	Unpatented technology	143.0		(61.5)		81.5		13	143.8		(58.8)		85.0		Unpatented technology	148.4		(63.0)		85.4		13	143.8		(58.8)		85.0
Software	Software	4.8		—		4.8		5	—		—		—		Software	4.7		(0.2)		4.5		5	—		—		—
Total amortized intangible assets	Total amortized intangible assets	829.2		(290.9)		538.3			783.8		(277.4)		506.4		Total amortized intangible assets	865.1		(301.0)		564.1			783.8		(277.4)		506.4
Indefinite-lived intangible assets:	Indefinite-lived intangible assets:														Indefinite-lived intangible assets:
Banjo trade name	Banjo trade name	62.1		—		62.1			62.1		—		62.1		Banjo trade name	62.1		—		62.1			62.1		—		62.1
Akron Brass trade name	Akron Brass trade name	28.8		—		28.8			28.8		—		28.8		Akron Brass trade name	28.8		—		28.8			28.8		—		28.8
Total intangible assets	Total intangible assets	$	920.1	$	(290.9)	$	629.2		$	874.7	$	(277.4)	$	597.3	Total intangible assets	$	956.0	$	(301.0)	$	655.0		$	874.7	$	(277.4)	$	597.3

The Banjo trade name and the Akron Brass trade name are indefinite-lived intangible assets which are tested for impairment on an annual basis in accordance with ASC 350 or more frequently if events or changes in circumstances indicate that the assets might be impaired. Based on the results of the Company’s annual impairment test at October 31, 2021, these indefinite-lived intangible assets had fair values in excess of their carrying values. In the first ~~three~~six months of 2022, there were no events or circumstances that would have required an interim impairment test on these indefinite-lived intangible assets.

Amortization of intangible assets was ~~$15.3~~$16.9 million and ~~$11.0~~$32.2 million for the three and six months ended ~~March 31,~~June 30, 2022, respectively. Amortization of intangible assets was $13.5 million and $24.5 million for the three and six months ended June 30, 2021, respectively. Based on the intangible asset balances as of ~~March 31,~~June 30, 2022, amortization expense is expected to approximate ~~$49.5~~$34.4 million for the remaining ~~nine~~six months of 2022, ~~$62.9~~$65.9 million in 2023, ~~$58.4~~$61.4 million in 2024, ~~$56.8~~$59.8 million in 2025 and ~~$54.9~~$58.0 million in 2026.

~~8. Accrued Expenses~~

~~The components of accrued expenses as of March 31, 2022 and December 31, 2021 were:~~

March 31,
2022 December 31,
2021
Payroll and related items $ 68.4 $ 91.5
Management incentive compensation 8.0 25.0
Income taxes payable 39.5 17.9
Insurance 11.7 11.0
Warranty 7.8 7.6
Deferred revenue 59.8 49.0
Lease liability 18.8 17.6
Restructuring 1.2 2.8
Accrued interest 12.2 3.6
Pension and retiree medical obligations 3.5 3.5
Other 27.2 30.3
Total accrued expenses $ 258.1 $ 259.8

1618

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

8. Accrued Expenses

The components of accrued expenses as of June 30, 2022 and December 31, 2021 were:


	June 30, 2022		December 31, 2021
Payroll and related items	$	78.9	$	91.5
Management incentive compensation	15.3		25.0
Income taxes payable	19.7		17.9
Insurance	11.2		11.0
Warranty	8.2		7.6
Deferred revenue	57.3		49.0
Lease liability	18.6		17.6
Restructuring	2.9		2.8
Accrued interest	3.3		3.6
Pension and retiree medical obligations	3.5		3.5
Other	35.1		30.3
Total accrued expenses	$	254.0	$	259.8

9. Other Noncurrent Liabilities

The components of other noncurrent liabilities as of ~~March 31,~~June 30, 2022 and December 31, 2021 were:


		March 31, 2022		December 31, 2021			June 30, 2022		December 31, 2021
Pension and retiree medical obligations	Pension and retiree medical obligations	$	82.4	$	82.2	Pension and retiree medical obligations	$	78.9	$	82.2
Transition tax payable	Transition tax payable	14.1		14.1		Transition tax payable	9.1		14.1

Deferred revenue	Deferred revenue	30.8		32.2		Deferred revenue	28.4		32.2
Lease liability	Lease liability	96.6		93.4		Lease liability	94.2		93.4
Other	Other	21.2		25.5		Other	19.9		25.5
Total other noncurrent liabilities	Total other noncurrent liabilities	$	245.3	$	247.4	Total other noncurrent liabilities	$	230.5	$	247.4

Table of Contents

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

10. Borrowings

Borrowings at ~~March 31,~~June 30, 2022 and December 31, 2021 consisted of the following:


		March 31, 2022		December 31, 2021			June 30, 2022		December 31, 2021

3.20% Senior Notes, due June 2023(1)	3.20% Senior Notes, due June 2023(1)	$	100.0	$	100.0	3.20% Senior Notes, due June 2023(1)	$	100.0	$	100.0
3.37% Senior Notes, due June 2025	3.37% Senior Notes, due June 2025	100.0		100.0		3.37% Senior Notes, due June 2025	100.0		100.0
3.00% Senior Notes, due May 2030	3.00% Senior Notes, due May 2030	500.0		500.0		3.00% Senior Notes, due May 2030	500.0		500.0
2.625% Senior Notes, due June 2031	2.625% Senior Notes, due June 2031	500.0		500.0		2.625% Senior Notes, due June 2031	500.0		500.0
$800.0 million revolving credit facility, due May 2024 (“Revolving Facility”)~~(1)~~(2)	$800.0 million revolving credit facility, due May 2024 (“Revolving Facility”)~~(1)~~(2)	—		—		$800.0 million revolving credit facility, due May 2024 (“Revolving Facility”)~~(1)~~(2)	—		—
Other borrowings	Other borrowings	0.1		0.1		Other borrowings	0.1		0.1
Total borrowings	Total borrowings	1,200.1		1,200.1		Total borrowings	1,200.1		1,200.1

Less deferred debt issuance costs	Less deferred debt issuance costs	8.2		8.4		Less deferred debt issuance costs	7.9		8.4
Less unaccreted debt discount	Less unaccreted debt discount	1.3		1.4		Less unaccreted debt discount	1.3		1.4
Total long-term borrowings	Total long-term borrowings	$	1,190.6	$	1,190.3	Total long-term borrowings	$	1,190.9	$	1,190.3

(1) As of June 30, 2022, the $100.0 million 3.20% Senior Notes, due in June 2023, have not been classified as short-term borrowings on the Condensed Consolidated Balance Sheets as the Company has the ability and intent to either refinance or repay the Notes using the available borrowing capacity of the Revolving Facility, due May 2024. As a result, the 3.20% Senior Notes remain classified as long-term borrowings in the Condensed Consolidated Balance Sheets as of June 30, 2022.

(2)At ~~March 31,~~June 30, 2022, there was no balance outstanding under the Revolving Facility and ~~$7.1~~$7.2 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility at ~~March 31,~~June 30, 2022 of approximately ~~$792.9~~$792.8 million.

At ~~March 31,~~June 30, 2022, the Company was in compliance with covenants contained in the credit agreement associated with the Revolving Facility as well as other long-term debt agreements.

Issuance of 2.625% Senior Notes in 2021

On May 28, 2021, the Company completed a public offering of $500.0 million in aggregate principal amount of 2.625% Senior Notes due June 2031 (the “2.625% Senior Notes”). The net proceeds from the offering were approximately $494.7 million, after deducting the issuance discount of $0.6 million, the underwriting commission of $3.3 million and offering expenses of $1.4 million. ~~The net proceeds were used~~

On May 17, 2021, the Company provided notice of its election to redeem ~~and repay~~early, on June 16, 2021, the $350.0 million aggregate principal amount ~~outstanding~~ of its then outstanding 4.20% Senior Notes ~~due December 15, 2021 and~~at a ~~$6.7~~redemption price of $350.0 million plus a make-whole redemption premium of $6.7 million using proceeds from the Company’s 2.625% Senior Notes discussed above. In addition, the Company recognized the remaining $1.3 million of the pre-tax amount included in Accumulated other comprehensive loss in shareholders’ equity related to the interest rate exchange agreement associated with the 4.20% Senior Notes. The Company wrote off the remaining ~~balance used~~$0.1 million of deferred issuance costs and $0.1 million of the debt issuance discount associated with the 4.20% Senior Notes as well as $0.4 million of deferred taxes for ~~general corporate purposes.~~a total loss on early debt redemption of $8.6 million, which was recorded within Other expense (income) - net in the Condensed Consolidated Statements of Income during the three and six months ended June 30, 2021.

1720

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

11. Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The standard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

•Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 2: Inputs, other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

•Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The following table summarizes the basis used to measure the Company’s financial assets (liabilities) at fair value on a recurring basis in the balance sheets at ~~March 31,~~June 30, 2022 and December 31, 2021:


		Basis of Fair Value Measurements									Basis of Fair Value Measurements
		Balance at March 31, 2022		Level 1		Level 2		Level 3			Balance at June 30, 2022		Level 1		Level 2		Level 3
Trading securities - mutual funds held in nonqualified SERP(1)	Trading securities - mutual funds held in nonqualified SERP(1)	$	10.2	$	10.2	$	—	$	—	Trading securities - mutual funds held in nonqualified SERP(1)	$	9.5	$	9.5	$	—	$	—
Available-for-sale securities - equities(2)	Available-for-sale securities - equities(2)	44.5		44.5		—		—		Available-for-sale securities - equities(2)	41.8		41.8		—		—


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

(1) The Supplemental Executive Retirement Plan (“SERP”) investment assets are offset by a SERP liability which represents the Company’s obligation to distribute SERP funds to participants.

(2) At ~~March 31,~~June 30, 2022 and December 31, 2021, the securities are included in Other current assets on the Company’s Condensed Consolidated Balance Sheets and are available for overnight cash settlement, if necessary, to fund current operations.

There were no transfers of assets or liabilities between Level 1 and Level 2 during the three and six months ended ~~March 31,~~June 30, 2022 or the year ended December 31, 2021.

The carrying values of the Company’s cash and cash equivalents, accounts receivable, marketable securities, accounts payable and accrued expenses approximate fair value because of the short term nature of these instruments. At ~~March 31,~~June 30, 2022 and December 31, 2021, the fair value of the outstanding indebtedness described in Note 10 based on quoted market prices and current market rates for debt with similar credit risk and maturity was approximately ~~$1,121.2~~$1,054.8 million and $1,219.9 million, respectively, compared to the carrying value of $1,198.8 million and $1,198.7 million, respectively. These fair value measurements are classified as Level 2 within the fair value hierarchy since they are determined based upon significant inputs observable in the market, including interest rates on recent financing transactions to entities with a credit rating similar to the Company’s rating.

1821

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

12. Leases

The Company leases certain office facilities, warehouses, manufacturing plants, equipment (which includes both office and plant equipment) and vehicles under operating leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Certain leases include 1 or more options to renew. The exercise of lease renewal options is at the Company’s sole discretion. The Company does not include renewal periods in any of the leases’ terms until the renewal is executed as they are generally not reasonably certain of being exercised. The Company does not have any material purchase options.

Certain of the Company’s lease agreements have rental payments that are adjusted periodically for inflation or that are based on usage. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Supplemental balance sheet information related to leases as of ~~March 31,~~June 30, 2022 and December 31, 2021 was as follows:


		Balance Sheet Caption	March 31, 2022		December 31, 2021			Balance Sheet Caption	June 30, 2022		December 31, 2021
Operating leases:	Operating leases:						Operating leases:
Building right-of-use assets - net	Building right-of-use assets - net	Other noncurrent assets	$	105.4	$	101.0	Building right-of-use assets - net	Other noncurrent assets	$	103.2	$	101.0
Equipment right-of-use assets - net	Equipment right-of-use assets - net	Other noncurrent assets	5.8		6.2		Equipment right-of-use assets - net	Other noncurrent assets	5.3		6.2
Total right-of-use assets - net	Total right-of-use assets - net		$	111.2	$	107.2	Total right-of-use assets - net		$	108.5	$	107.2
Operating leases:	Operating leases:						Operating leases:
Current lease liabilities	Current lease liabilities	Accrued expenses	$	18.8	$	17.6	Current lease liabilities	Accrued expenses	$	18.6	$	17.6
Noncurrent lease liabilities	Noncurrent lease liabilities	Other noncurrent liabilities	96.6		93.4		Noncurrent lease liabilities	Other noncurrent liabilities	94.2		93.4
Total lease liabilities	Total lease liabilities		$	115.4	$	111.0	Total lease liabilities		$	112.8	$	111.0

The components of lease cost for the three and six months ended ~~March 31,~~June 30, 2022 and 2021 were as follows:


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2022			2021			2022		2021		2022		2021
Operating lease cost (1)	Operating lease cost (1)		$	7.4		$	7.4	Operating lease cost (1)	$	9.0	$	7.1	$	16.4	$	14.5
Variable lease cost	Variable lease cost		0.4			0.6		Variable lease cost	0.8		0.6		1.2		1.2
Total lease expense	Total lease expense		$	7.8		$	8.0	Total lease expense	$	9.8	$	7.7	$	17.6	$	15.7

(1) Includes short-term leases, which are immaterial.

Supplemental cash flow information related to leases for the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021 was as follows:


		Three Months Ended March 31,					Six Months Ended June 30,
		2022		2021			2022		2021
Cash paid for amounts included in the measurement of operating lease liabilities	Cash paid for amounts included in the measurement of operating lease liabilities	$	7.4	$	6.4	Cash paid for amounts included in the measurement of operating lease liabilities	$	16.9	$	13.6
Right-of-use assets obtained in exchange for new operating lease liabilities	Right-of-use assets obtained in exchange for new operating lease liabilities	8.3		3.5		Right-of-use assets obtained in exchange for new operating lease liabilities	9.3		6.2

1922

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

Other supplemental information related to leases as of ~~March 31,~~June 30, 2022 and December 31, 2021 was as follows:


Lease Term and Discount Rate	Lease Term and Discount Rate	March 31, 2022		December 31, 2021		Lease Term and Discount Rate	June 30, 2022		December 31, 2021
Weighted-average remaining lease term (years):	Weighted-average remaining lease term (years):					Weighted-average remaining lease term (years):
Operating leases - building and equipment	Operating leases - building and equipment	8.12		8.50		Operating leases - building and equipment	7.92		8.50
Operating leases - vehicles	Operating leases - vehicles	2.25		2.34		Operating leases - vehicles	2.21		2.34
Weighted-average discount rate:	Weighted-average discount rate:					Weighted-average discount rate:
Operating leases - building and equipment	Operating leases - building and equipment	3.16	%	3.27	%	Operating leases - building and equipment	3.19	%	3.27	%
Operating leases - vehicles	Operating leases - vehicles	1.02	%	1.08	%	Operating leases - vehicles	1.06	%	1.08	%

The Company uses its incremental borrowing rate to determine the present value of the lease payments.

Total lease liabilities at ~~March 31,~~June 30, 2022 have scheduled maturities as follows:


Maturity of Lease Liabilities	Maturity of Lease Liabilities	Operating Leases		Maturity of Lease Liabilities	Operating Leases
2022 (excluding the three months ended March 31, 2022)		$	16.2
2022 (excluding the six months ended June 30, 2022)				2022 (excluding the six months ended June 30, 2022)	$	10.7
2023	2023	20.1		2023	20.5
2024	2024	17.3		2024	17.7
2025	2025	15.3		2025	16.0
2026	2026	13.3		2026	13.8
Thereafter	Thereafter	49.3		Thereafter	49.6
Total lease payments	Total lease payments	131.5		Total lease payments	128.3
Less: Imputed interest	Less: Imputed interest	(16.1)		Less: Imputed interest	(15.5)
Present value of lease liabilities	Present value of lease liabilities	$	115.4	Present value of lease liabilities	$	112.8

13. Restructuring Expenses and Asset Impairments

During the three and six months ended ~~March 31,~~June 30, 2022 and 2021, the Company incurred restructuring ~~expenses and asset impairments of $0.6 million and $2.2 million, respectively. These~~ costs ~~were incurred~~ to facilitate long-term sustainable growth through cost reduction actions, consisting of employee reductions, facility rationalization and contract termination ~~costs and asset impairments.~~costs. Restructuring costs include severance ~~benefits,~~costs, exit costs and asset impairments and are included in Restructuring expenses and asset impairments in the Condensed Consolidated Statements of Income. Severance costs primarily consist of severance benefits through payroll continuation, COBRA subsidies, outplacement services, conditional separation costs and employer tax liabilities, while exit costs primarily consist of lease exit and contract termination costs.

2022 Initiative

During the three and six months ended ~~March 31,~~June 30, 2022, the Company incurred ~~severance~~restructuring costs primarily related to employee reductions.

Pre-tax restructuring expenses and asset impairments by segment for the three and six months ended ~~March 31,~~June 30, 2022 were as follows:

2023

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)


		Three Months Ended March 31, 2022									Three Months Ended June 30, 2022
		Severance Costs		Exit Costs		Asset Impairment		Total			Severance Costs		Exit Costs		Asset Impairment		Total
Fluid & Metering Technologies	Fluid & Metering Technologies	$	0.3	$	—	$	—	$	0.3	Fluid & Metering Technologies	$	1.2	$	0.3	$	0.2	$	1.7
Health & Science Technologies	Health & Science Technologies	0.1		—		—		0.1		Health & Science Technologies	0.1		—		—		0.1
Fire & Safety/Diversified Products	Fire & Safety/Diversified Products	—		—		—		—		Fire & Safety/Diversified Products	1.0		—		—		1.0
Corporate/Other	Corporate/Other	0.2		—		—		0.2		Corporate/Other	—		—		—		—
Total restructuring costs	Total restructuring costs	$	0.6	$	—	$	—	$	0.6	Total restructuring costs	$	2.3	$	0.3	$	0.2	$	2.8


	Six Months Ended June 30, 2022
	Severance Costs		Exit Costs		Asset Impairment		Total
Fluid & Metering Technologies	$	1.5	$	0.3	$	0.2	$	2.0
Health & Science Technologies	0.2		—		—		0.2
Fire & Safety/Diversified Products	1.0		—		—		1.0
Corporate/Other	0.2		—		—		0.2
Total restructuring costs	$	2.9	$	0.3	$	0.2	$	3.4

2021 Initiative

During the three and six months ended ~~March 31,~~June 30, 2021, the Company incurred severance costs related to employee reductions. In addition, the Company consolidated certain facilities within the FMT segment, which resulted in an impairment ~~charge of $0.1 million~~charges related to property, plant and equipment that was not relocated to the new ~~location.~~locations.

Pre-tax restructuring expenses and asset impairments by segment for the three and six months ended ~~March 31,~~June 30, 2021 were as follows:


		Three Months Ended March 31, 2021									Three Months Ended June 30, 2021
		Severance Costs		Exit Costs		Asset Impairment		Total			Severance Costs		Exit Costs		Asset Impairment		Total
Fluid & Metering Technologies	Fluid & Metering Technologies	$	0.8	$	—	$	0.1	$	0.9	Fluid & Metering Technologies	$	1.8	$	—	$	0.1	$	1.9
Health & Science Technologies	Health & Science Technologies	0.6		—		—		0.6		Health & Science Technologies	0.5		—		—		0.5
Fire & Safety/Diversified Products	Fire & Safety/Diversified Products	0.1		—		—		0.1		Fire & Safety/Diversified Products	0.1		—		—		0.1
Corporate/Other	Corporate/Other	0.6		—		—		0.6		Corporate/Other	0.7		—		—		0.7
Total restructuring costs	Total restructuring costs	$	2.1	$	—	$	0.1	$	2.2	Total restructuring costs	$	3.1	$	—	$	0.1	$	3.2



	Six Months Ended June 30, 2021
	Severance Costs		Exit Costs		Asset Impairment		Total
Fluid & Metering Technologies	$	2.6	$	—	$	0.2	$	2.8
Health & Science Technologies	1.1		—		—		1.1
Fire & Safety/Diversified Products	0.2		—		—		0.2
Corporate/Other	1.3		—		—		1.3
Total restructuring costs	$	5.2	$	—	$	0.2	$	5.4

Restructuring accruals reflected in Accrued expenses in the Company’s Condensed Consolidated Balance Sheets are as follows:

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)


	Restructuring Initiatives
Balance at January 1, 2022	$	2.8
Restructuring expenses	~~0.6~~3.2
Payments, utilization and other	~~(2.2)~~(3.1)
Balance at ~~March 31,~~June 30, 2022	$	~~1.2~~2.9

14. Other Comprehensive (Loss) Income

The components of Other comprehensive (loss) income are as follows:



	Three Months Ended June 30, 2022						Three Months Ended June 30, 2021
	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Cumulative translation adjustment	$	(81.9)	$	—	$	(81.9)	$	20.3	$	—	$	20.3
Pension and other postretirement adjustments	1.1		(0.5)		0.6		12.0		(2.8)		9.2
Reclassification adjustments for derivatives	—		—		—		2.3		(0.5)		1.8
Total other comprehensive (loss) income	$	(80.8)	$	(0.5)	$	(81.3)	$	34.6	$	(3.3)	$	31.3


	Six Months Ended June 30, 2022						Six Months Ended June 30, 2021
	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Cumulative translation adjustment	$	(101.4)	$	—	$	(101.4)	$	(28.2)	$	—	$	(28.2)
Pension and other postretirement adjustments	1.9		(0.7)		1.2		13.1		(3.1)		10.0
Reclassification adjustments for derivatives	—		—		—		3.2		(0.7)		2.5
Total other comprehensive loss	$	(99.5)	$	(0.7)	$	(100.2)	$	(11.9)	$	(3.8)	$	(15.7)

The amounts reclassified from Accumulated other comprehensive loss to net income during the three and six months ended June 30, 2022 and 2021 are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021		Income Statement Caption
Pension and other postretirement plans:
Amortization of net (gain) loss	$	1.1	$	12.0	$	1.9	$	13.1	Other expense (income) - net
Total before tax	1.1		12.0		1.9		13.1
Provision for income taxes	(0.5)		(2.8)		(0.7)		(3.1)
Total net of tax	$	0.6	$	9.2	$	1.2	$	10.0
Derivatives:
Reclassification adjustments	$	—	$	2.3	$	—	$	3.2	Interest expense
Total before tax	—		2.3		—		3.2
Provision for income taxes	—		(0.5)		—		(0.7)
Total net of tax	$	—	$	1.8	$	—	$	2.5

In conjunction with the early redemption of the 4.20% Senior Notes discussed in Note 1 0, the Company recognized the remaining $1.3 million of the pre-tax amount included in Accumulated other comprehensive loss in shareholders’ equity related to the affiliated interest rate contract in Other expense (income) - net in the Condensed Consolidated Statements of Income during the three and six months ended June 30, 2021.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

~~14. Other Comprehensive (Loss) Income~~

~~The components of Other comprehensive (loss) income are as follows:~~

Three Months Ended March 31, 2022 Three Months Ended March 31, 2021
Pre-tax Tax Net of tax Pre-tax Tax Net of tax
Cumulative translation adjustment $ (19.5) $ — $ (19.5) $ (48.5) $ — $ (48.5)
Pension and other postretirement adjustments 0.8 (0.2) 0.6 1.1 (0.3) 0.8
Reclassification adjustments for derivatives — — — 0.9 (0.2) 0.7
Total other comprehensive (loss) income $ (18.7) $ (0.2) $ (18.9) $ (46.5) $ (0.5) $ (47.0)

~~The amounts reclassified from Accumulated other comprehensive loss to net income during the three months ended March 31, 2022 and 2021 are as follows:~~

Three Months Ended March 31,
2022 2021 Income Statement Caption
Pension and other postretirement plans:
Amortization of net (gain) loss $ 0.8 $ 1.1 Other expense (income) - net
Total before tax 0.8 1.1
Provision for income taxes (0.2) (0.3)
Total net of tax $ 0.6 $ 0.8
Derivatives:
Reclassification adjustments $ — $ 0.9 Interest expense
Total before tax — 0.9
Provision for income taxes — (0.2)
Total net of tax $ — $ 0.7

15. Share Repurchases

On March 17, 2020, the Company’s Board of Directors approved an increase of $500.0 million in the authorized level of repurchases of common stock. This approval is in addition to the prior repurchase authorization of the Board of Directors of $300.0 million on December 1, 2015. These authorizations have no expiration date. Repurchases under the program will be funded with future cash flow generation or borrowings available under the Revolving Facility. During the ~~three~~six months ended ~~March 31,~~June 30, 2022, the Company repurchased a total of ~~147,500~~622,190 shares at a cost of ~~$28.3~~$115.8 million, of which ~~$2.0~~$5.4 million was settled in ~~April~~July 2022. There were no share repurchases during the ~~three~~six months ended ~~March 31,~~June 30, 2021. As of ~~March 31,~~June 30, 2022, the amount of share repurchase authorization remaining was ~~$683.7~~$596.2 million.

16. Share-Based Compensation

The Company typically grants equity awards annually at its regularly scheduled first quarter meeting of the Board of Directors based on the recommendation from the Compensation Committee.

The Company’s policy is to recognize compensation cost on a straight-line basis, assuming forfeitures, over the requisite service period for the entire award. Classification of stock compensation cost within the Condensed Consolidated Statements of Income is consistent with classification of cash compensation for the same employees.

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~~IDEX CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share amounts)~~

~~(unaudited)~~

Stock Options

Stock options generally vest ratably over four years, with vesting beginning one year from the date of grant, and generally expire 10 years from the date of grant. The service period for certain retiree eligible participants is accelerated. Weighted average option fair values and assumptions for the periods specified are disclosed below. The fair value of each option grant was estimated on the date of the grant using the Binomial lattice option pricing model (for options granted before March 2021) or the Black Scholes valuation model (for options granted after February 2021). The adoption of the Black Scholes model in 2021 was driven by a review of option exercise history, which more closely aligned with the methodology of the Black Scholes model.


		Three Months Ended March 31,		Three Months Ended June 30,				Six Months Ended June 30,
			2022		2021		2022	2021	2022	2021
Weighted average fair value of grants	Weighted average fair value of grants		$41.66		$38.59	Weighted average fair value of grants	$46.33	$43.89	$41.74	$38.63
Dividend yield	Dividend yield		1.14%		1.01%	Dividend yield	1.14%	0.94%	1.14%	1.01%
Volatility	Volatility		25.15%		23.73%	Volatility	25.39%	24.67%	25.15%	23.74%
Risk-free interest rate	Risk-free interest rate		1.83%		0.09% - 1.57%	Risk-free interest rate	2.98%	0.76% - 0.91%	1.85%	0.10% - 1.56%
Expected life (in years)	Expected life (in years)		4.90		5.74	Expected life (in years)	4.90	4.90	4.90	5.73

Total compensation cost for stock options is recorded in the Condensed Consolidated Statements of Income as follows:


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2022			2021			2022		2021		2022		2021
Cost of goods sold	Cost of goods sold		$	0.3		$	0.2	Cost of goods sold	$	—	$	0.1	$	0.3	$	0.3
Selling, general and administrative expenses	Selling, general and administrative expenses		3.1			2.7		Selling, general and administrative expenses	2.8		1.8		5.9		4.5
Total expense before income taxes	Total expense before income taxes		3.4			2.9		Total expense before income taxes	2.8		1.9		6.2		4.8
Income tax benefit	Income tax benefit		(0.3)			(0.3)		Income tax benefit	(0.2)		(0.1)		(0.5)		(0.4)
Total expense after income taxes	Total expense after income taxes		$	3.1		$	2.6	Total expense after income taxes	$	2.6	$	1.8	$	5.7	$	4.4

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

A summary of the Company’s stock option activity as of ~~March 31,~~June 30, 2022 and changes during the ~~three~~six months ended ~~March 31,~~June 30, 2022 are presented in the following table:


Stock Options	Stock Options	Shares	Weighted Average Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value		Stock Options	Shares	Weighted Average Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
		(Dollars in millions except weighted average price)							(Dollars in millions except weighted average price)
Outstanding at January 1, 2022	Outstanding at January 1, 2022	1,008,586	$	147.60	6.97	$	89.5	Outstanding at January 1, 2022	1,008,586	$	147.60	6.97	$	89.5
Granted	Granted	263,985	189.37					Granted	268,775	189.38
Exercised	Exercised	(12,746)	108.26					Exercised	(43,041)	120.69
Forfeited	Forfeited	(31,378)	175.33					Forfeited	(59,052)	180.68
Outstanding at March 31, 2022		1,228,447	$	156.28	7.40	$	45.3
Vested and expected to vest as of March 31, 2022		1,168,490	$	154.60	7.30	$	45.0
Exercisable at March 31, 2022		622,233	$	127.04	5.80	$	40.6
Outstanding at June 30, 2022								Outstanding at June 30, 2022	1,175,268	$	156.48	7.17	$	35.7
Vested and expected to vest as of June 30, 2022								Vested and expected to vest as of June 30, 2022	1,124,569	$	154.99	7.08	$	35.5
Exercisable at June 30, 2022								Exercisable at June 30, 2022	589,478	$	126.79	5.55	$	33.3

As of ~~March 31,~~June 30, 2022, there was ~~$15.4~~$15.0 million of total unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 1.1 years.

Restricted Stock

Restricted stock awards generally cliff vest after three years for employees and non-employee directors. The service period for certain retiree eligible participants is accelerated. Unvested restricted stock carries dividend and voting rights and the sale of

~~Table of Contents~~

~~IDEX CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share amounts)~~

~~(unaudited)~~

the shares is restricted prior to the date of vesting. Dividends are paid on restricted stock awards and their fair value is equal to the market price of the Company’s stock at the date of the grant. A summary of the Company’s restricted stock activity as of ~~March 31,~~June 30, 2022 and changes during the ~~three~~six months ended ~~March 31,~~June 30, 2022 are presented in the following table:


Restricted Stock	Restricted Stock	Shares	Weighted-Average Grant Date Fair Value		Restricted Stock	Shares	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2022	Unvested at January 1, 2022	107,475	$	169.58	Unvested at January 1, 2022	107,475	$	169.58
Granted	Granted	25,290	189.50		Granted	41,160	189.13
Vested	Vested	(18,793)	145.12		Vested	(24,428)	148.60
Forfeited	Forfeited	(3,720)	182.13		Forfeited	(8,570)	184.27
Unvested at March 31, 2022		110,252	$	177.89
Unvested at June 30, 2022					Unvested at June 30, 2022	115,637	$	179.88

Total compensation cost for restricted stock is recorded in the Condensed Consolidated Statements of Income as follows:


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2022			2021			2022		2021		2022		2021
Cost of goods sold	Cost of goods sold		$	0.2		$	0.2	Cost of goods sold	$	—	$	—	$	0.2	$	0.2
Selling, general and administrative expenses	Selling, general and administrative expenses		1.6			1.4		Selling, general and administrative expenses	1.6		1.2		3.2		2.6
Total expense before income taxes	Total expense before income taxes		1.8			1.6		Total expense before income taxes	1.6		1.2		3.4		2.8
Income tax benefit	Income tax benefit		(0.4)			(0.3)		Income tax benefit	(0.2)		(0.3)		(0.6)		(0.6)
Total expense after income taxes	Total expense after income taxes		$	1.4		$	1.3	Total expense after income taxes	$	1.4	$	0.9	$	2.8	$	2.2

As of ~~March 31,~~June 30, 2022, there was ~~$8.6~~$10.9 million of total unrecognized compensation cost related to restricted stock that is expected to be recognized over a weighted-average period of ~~1.1~~1.2 years.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

Cash-Settled Restricted Stock

The Company also maintains a cash-settled ~~share based~~share-based compensation plan for certain employees. Cash-settled restricted stock awards generally cliff vest after three years. The service period for certain retiree eligible participants is accelerated. Cash-settled restricted stock awards are recorded at fair value on a quarterly basis using the market price of the Company’s stock on the last day of the quarter. Dividend equivalents are paid on certain cash-settled restricted stock awards. A summary of the Company’s unvested cash-settled restricted stock activity as of ~~March 31,~~June 30, 2022 and changes during the ~~three~~six months ended ~~March 31,~~June 30, 2022 are presented in the following table:

Cash-Settled Restricted Stock Shares Weighted-Average
Fair Value
Unvested at January 1, 2022 57,949 $ 236.32
Granted 21,645 189.24
Vested (17,724) 192.27
Forfeited (1,820) 191.73
Unvested at March 31, 2022 60,050 $ 191.73

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Cash-Settled Restricted Stock	Shares	Weighted-Average Fair Value
Unvested at January 1, 2022	57,949	$	236.32
Granted	22,880	189.19
Vested	(19,362)	191.75
Forfeited	(4,062)	181.63
Unvested at June 30, 2022	57,405	$	181.63

~~IDEX CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share amounts)~~

~~(unaudited)~~

Total compensation (benefit) cost for cash-settled restricted stock is recorded in the Condensed Consolidated Statements of Income as follows:


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2022			2021			2022		2021		2022		2021
Cost of goods sold	Cost of goods sold		$	(0.1)		$	0.2	Cost of goods sold	$	0.1	$	0.2	$	—	$	0.4
Selling, general and administrative expenses	Selling, general and administrative expenses		0.5			1.3		Selling, general and administrative expenses	(0.5)		1.0		—		2.3
Total expense before income taxes(1)			0.4			1.5
Total (benefit) expense before income taxes(1)								Total (benefit) expense before income taxes(1)	(0.4)		1.2		—		2.7
Income tax benefit	Income tax benefit		—			(0.1)		Income tax benefit	—		(0.1)		—		(0.2)
Total expense after income taxes			$	0.4		$	1.4
Total (benefit) expense after income taxes								Total (benefit) expense after income taxes	$	(0.4)	$	1.1	$	—	$	2.5

(1) The 2021 amount was previously included in Share-based compensation expense on the Condensed Consolidated Statements of Cash Flows. This amount has been reclassified to Accrued expenses and Other-net such that the amount presented in Share-based compensation expense on the Condensed Consolidated Statements of Cash Flows relates solely to non-cash awards for both periods presented. There was no change to the reported amount of net cash flows provided by operating activities for 2021 as a result of the reclassification.

As of ~~March 31,~~June 30, 2022, there was ~~$4.7~~$4.9 million of total unrecognized compensation cost related to cash-settled restricted shares that is expected to be recognized over a weighted-average period of ~~1.2~~1.3 years.

Performance Share Units

Weighted average performance share unit fair values and assumptions for the period specified are disclosed below. The performance share units are market condition awards and have been assessed at fair value on the date of grant using a Monte Carlo simulation model.

Three Months Ended March 31,
2022 2021
Weighted average fair value of grants $235.54 $247.49
Dividend yield —% —%
Volatility 28.09% 28.6%
Risk-free interest rate 1.73% 0.33%
Expected life (in years) 2.93 2.93

~~A summary of the Company’s performance share unit activity as of March 31, 2022 and changes during the three months ended March 31, 2022 are presented in the following table:~~

Performance Share Units Shares Weighted-Average
Grant Date Fair
Value
Unvested at January 1, 2022 52,025 $ 236.75
Granted 31,370 235.54
Vested — 0
Forfeited (5,510) 235.75
Unvested at March 31, 2022 77,885 $ 236.60

~~On December 31, 2021, 29,840 performance share units vested. Based on the Company’s relative total shareholder return rank during the~~ ~~three~~ ~~year period ended December 31, 2021, the Company achieved a 143% payout factor and issued 42,688 common shares in February 2022 for awards that vested in 2021.~~


	Six Months Ended June 30,
	2022	2021
Weighted average fair value of grants	$235.54	$247.49
Dividend yield	—%	—%
Volatility	28.09%	28.6%
Risk-free interest rate	1.73%	0.33%
Expected life (in years)	2.93	2.93

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

A summary of the Company’s performance share unit activity as of June 30, 2022 and changes during the six months ended June 30, 2022 are presented in the following table:


Performance Share Units	Shares	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2022	52,025	$	236.75
Granted	31,370	235.54
Vested	—	0
Forfeited	(8,080)	235.97
Unvested at June 30, 2022	75,315	$	236.61

On December 31, 2021, 29,840 performance share units vested. Based on the Company’s relative total shareholder return rank during the three year period ended December 31, 2021, the Company achieved a 143% payout factor and issued 42,688 common shares in February 2022 for awards that vested in 2021.

Total compensation cost for performance share units is recorded in the Condensed Consolidated Statements of Income as follows:


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2022			2021			2022		2021		2022		2021
Cost of goods sold	Cost of goods sold		$	—		$	—	Cost of goods sold	$	—	$	—	$	—	$	—
Selling, general and administrative expenses	Selling, general and administrative expenses		1.3			1.7		Selling, general and administrative expenses	2.5		1.2		3.8		2.9
Total expense before income taxes	Total expense before income taxes		1.3			1.7		Total expense before income taxes	2.5		1.2		3.8		2.9
Income tax benefit	Income tax benefit		(0.1)			—		Income tax benefit	—		(0.1)		(0.1)		(0.1)
Total expense after income taxes	Total expense after income taxes		$	1.2		$	1.7	Total expense after income taxes	$	2.5	$	1.1	$	3.7	$	2.8

As of ~~March 31,~~June 30, 2022, there was ~~$8.8~~$8.5 million of total unrecognized compensation cost related to performance share units that is expected to be recognized over a weighted-average period of 0.9 years.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

17. Retirement Benefits

The Company sponsors several qualified and nonqualified defined benefit and defined contribution pension plans as well as other post-retirement plans for its employees. The following tables provide the components of net periodic benefit cost for its major defined benefit plans and its other postretirement plans.


		Pension Benefits									Pension Benefits
		Three Months Ended March 31,									Three Months Ended June 30,
		2022				2021					2022				2021
		U.S.		Non-U.S.		U.S.		Non-U.S.			U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	Service cost	$	—	$	0.5	$	—	$	0.5	Service cost	$	0.1	$	0.4	$	0.1	$	0.5
Interest cost	Interest cost	0.1		0.2		0.1		0.2		Interest cost	—		0.3		0.1		0.2
Expected return on plan assets	Expected return on plan assets	(0.1)		(0.3)		(0.2)		(0.2)		Expected return on plan assets	—		(0.3)		(0.6)		(0.3)
Settlement loss recognized										Settlement loss recognized	—		—		10.5		—
Net amortization	Net amortization	0.1		0.2		0.1		0.5		Net amortization	—		0.2		0.1		0.6
Net periodic (benefit) cost		$	0.1	$	0.6	$	—	$	1.0
Net periodic cost										Net periodic cost	$	0.1	$	0.6	$	10.2	$	1.0


									Pension Benefits
			Other Postretirement Benefits						Six Months Ended June 30,
		Three Months Ended March 31,			2022						2021
			2022			2021			U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	Service cost		$	0.2		$	0.2	Service cost	$	0.1	$	0.9	$	0.1	$	1.0
Interest cost	Interest cost		0.1			0.1		Interest cost	0.1		0.5		0.2		0.4
Expected return on plan assets								Expected return on plan assets	(0.1)		(0.6)		(0.8)		(0.5)
Settlement loss recognized								Settlement loss recognized	—		—		10.5		—
Net amortization	Net amortization		(0.1)			(0.2)		Net amortization	0.1		0.4		0.2		1.1
Net periodic cost			$	0.2		$	0.1
Net periodic (benefit) cost								Net periodic (benefit) cost	$	0.2	$	1.2	$	10.2	$	2.0


	Other Postretirement Benefits
	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Service cost	$	0.1	$	0.1	$	0.3	$	0.3
Interest cost	0.2		0.1		0.3		0.2
Net amortization	(0.1)		(0.1)		(0.2)		(0.3)
Net periodic cost	$	0.2	$	0.1	$	0.4	$	0.2

The Company expects to contribute approximately $4.0 million to its defined benefit plans and $1.2 million to its other post-retirement benefit plans in 2022. During the first ~~three~~six months of 2022, the Company contributed a total of ~~$1.3~~$2.6 million to fund these plans.

The IDEX Corporation Retirement Plan (“Plan”), a U.S. defined benefit plan, was terminated in May 2020. During the second quarter of 2021, the Company settled its remaining obligations under the Plan. The Company recognized a net loss of $9.7 million, which was recorded within Other expense (income) - net. The net loss consisted of $10.7 million related to previously deferred pension related costs, partially offset by $1.0 million related to an increase in plan assets remaining after the settlement. As of ~~March 31,~~June 30, 2022, the Company has ~~$7.9~~$4.4 million of surplus assets from the Plan included in Other current assets on the Company’s Condensed Consolidated Balance Sheets that will be used to fund the Company’s other retirement benefit plans over the next twelve months.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

18. Legal Proceedings

The Company and certain of its subsidiaries are involved in pending and threatened legal, regulatory and other proceedings arising in the ordinary course of business. These proceedings may pertain to matters such as product liability or contract disputes, and may also involve governmental inquiries, inspections, audits or investigations relating to issues such as tax matters, intellectual property, environmental, health and safety issues, governmental regulations, employment and other matters. Although the results of such legal proceedings cannot be predicted with certainty, the Company believes that the ultimate disposition of these matters will not have a material adverse effect, individually or in the aggregate, on the Company’s business, financial condition, results of operations or cash flows.

19. Income Taxes

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 to ~~$40.5~~$39.0 million for the three months ended ~~March 31,~~June 30, 2022 from ~~$32.9~~$27.7 million during the same period in 2021. The effective tax rate increased to 22.1% for the three months ended June 30, 2022 from 21.3% during the same period in 2021 primarily due to a decrease in the excess tax benefits related to share-based compensation.

The provision for income taxes increased to $79.5 million for the six months ended June 30, 2022 from $60.6 million during the same period in 2021. The effective tax rate of ~~22.4%~~22.2% for the ~~three~~six months ended ~~March 31,~~June 30, 2022 ~~decreased slightly~~increased compared with ~~22.6%~~22.0% during the same period in 2021 due to a ~~mix of global pre-tax income across jurisdictions.~~

~~20. Subsequent Events~~

~~On March 30, 2022,~~decrease in the ~~Company entered into a definitive agreement~~excess tax benefits related to acquire KZ CO. ("KZValve") for cash consideration of $120.0 million, subject to customary post-closing adjustments. KZValve, based in Greenwood, Nebraska, is a leading manufacturer of electric valves and controllers used primarily in agricultural applications. KZValve will augment and expand IDEX's agricultural portfolio, complementing Banjo's current fluid management solutions for these applications. With annual sales of approximately $28.0 million, KZValve will be part of the Company’s Agriculture reporting unit within the FMT segment. The Company expects to close the transaction by the end of the second quarter of 2022, subject to regulatory approval and customary closing conditions.

share-based compensation.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and related notes in this quarterly 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 1A, “Risk Factors” in the Company’s most recent annual report on Form 10-K and under the heading “Cautionary Statement Under the Private Securities Litigation Reform Act” discussed elsewhere in this quarterly report.

This discussion also includes certain non-GAAP financial measures that have been defined and reconciled to their most directly comparable U.S. GAAP measures later in this Item under the headings “Non-GAAP Disclosures” and “Free Cash Flow.” This discussion also includes Operating working capital, which has been defined later in this Item under the 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.

Overview

IDEX is an applied solutions company 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 across a wide range of industries throughout the world. Accordingly, IDEX’s businesses are affected by levels of industrial activity and economic conditions in the U.S. and in other countries where it does business and by the relationship of the U.S. dollar to other currencies. Levels of capacity utilization and capital spending in certain industries and overall industrial activity are important factors that influence the demand for IDEX’s products.

During the ~~three~~six months ended ~~March 31,~~June 30, 2022, the Company achieved a record ~~quarter in~~ sales ~~operating margin and earnings per share~~ driven by robust ~~demand and strong operating performance.~~demand. Teams ~~successfully navigated~~continued to navigate the ~~challenging~~difficult economic environment arising ~~primarily~~ from material availability and logistical challenges ~~and also continued~~in order to deliver for customers. The Company expanded operating margin as its highly differentiated product portfolio enabled strong price capture amid inflation pressures and its focus on operational productivity yielded positive results. Finally, the Company deployed additional capital, both within its existing portfolio and with the ~~acquisition~~acquisitions of Nexsight and KZValve to the IDEX family of businesses as well as through share repurchases.

Select key financial results for the three months ended ~~March 31,~~June 30, 2022 when compared to the same period in the prior year are as follows:

•Sales of ~~$751.1~~$796.1 million increased ~~15%~~16%; organic sales (which excludes acquisitions/divestitures and foreign currency translation) were up 12%.

•Operating income of ~~$187.6~~$186.6 million increased ~~21%~~18%. Adjusted operating income increased ~~18%~~14% to ~~$187.6~~$189.8 million.

•Operating margin of ~~25.0%~~23.4% was up ~~110~~30 basis points. Adjusted operating margin decreased 60 basis points to 23.8%.

•Net income attributable to IDEX of $138.2 million increased 35%. Adjusted net income attributable to IDEX increased 15% to $153.6 million.

•Adjusted EBITDA of $219.2 million was 28% of sales.

•Diluted EPS attributable to IDEX of $1.81 increased $0.47, or 35%. Adjusted EPS attributable to IDEX of $2.02 increased $0.27, or 15%.

Select key financial results for the six months ended June 30, 2022 when compared to the same period in the prior year are as follows:

•Sales of $1.5 billion increased 16%; organic sales (which excludes acquisitions/divestitures and foreign currency translation) were up 12%.

•Operating income of $374.2 million increased 19%. Adjusted operating income increased 16% to $377.4 million.

•Operating margin of 24.2% was up 70 basis points. Adjusted operating margin increased 7010 basis points to ~~25.0%~~24.4%.

•Net income attributable to IDEX of ~~$140.0~~$278.2 million increased ~~24%~~29%. Adjusted net income attributable to IDEX increased ~~21%~~18% to ~~$149.8~~$303.4 million.

•Adjusted EBITDA of ~~$214.7~~$433.9 million was ~~29%~~28% of sales.

•Diluted EPS attributable to IDEX of ~~$1.83~~$3.65 increased ~~$0.35,~~$0.84, or ~~24%~~30%. Adjusted EPS attributable to IDEX of ~~$1.96~~$3.98 increased ~~$0.34,~~$0.62, or ~~21%~~18%.

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•Cash flows provided by operating activities of ~~$79.7~~$192.0 million were down due to increases in working capital, partially offset by higher earnings. Free cash flow of ~~$63.6~~$160.3 million was ~~42%~~53% of adjusted net income attributable to IDEX.

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Results of Operations

The following is a discussion and analysis of the Company’s results of operations for the three and six months ended ~~March 31,~~June 30, 2022 compared with the three and six months ended ~~March 31,~~June 30, 2021.

Performance for the Three and Six Months Ended ~~March 31,~~June 30, 2022 Compared with the Same ~~Period~~Periods in 2021


		Three Months Ended March 31,	Change								Three Months Ended June 30,							Six Months Ended June 30,
(Dollars in millions, except per share amounts)	(Dollars in millions, except per share amounts)		2022			2021			$			% / bps		(Dollars in millions, except per share amounts)	2022			2021			% / bps Change		2022			2021			% / bps Change
Net sales	Net sales		$	751.1		$	652.0		$	99.1		15	%	Net sales	$	796.1		$	686.0		16	%	$	1,547.2		$	1,338.0		16	%
Cost of sales	Cost of sales		408.6			359.4			49.2			14	%	Cost of sales	439.2			379.9			16	%	847.8			739.3			15	%
Gross profit	Gross profit		342.5			292.6			49.9			17	%	Gross profit	356.9			306.1			17	%	699.4			598.7			17	%
Gross margin	Gross margin		45.6		%	44.9		%	n/a			70 bps		Gross margin	44.8		%	44.6		%	20 bps		45.2		%	44.7		%	50 bps
Selling, general and administrative expenses	Selling, general and administrative expenses		154.3			134.9			19.4			14	%	Selling, general and administrative expenses	167.5			144.6			16	%	321.8			279.5			15	%
Restructuring expenses and asset impairments	Restructuring expenses and asset impairments		0.6			2.2			(1.6)			(73	%)	Restructuring expenses and asset impairments	2.8			3.2			(13	%)	3.4			5.4			(37	%)
Operating income	Operating income		187.6			155.5			32.1			21	%	Operating income	186.6			158.3			18	%	374.2			313.8			19	%
Operating margin	Operating margin		25.0		%	23.9		%	n/a			110 bps		Operating margin	23.4		%	23.1		%	30 bps		24.2		%	23.5		%	70 bps
Other income - net			(2.3)			(0.8)			(1.5)			188	%
Other expense (income) - net														Other expense (income) - net	—			17.2			(100	%)	(2.3)			16.4			(114	%)
Interest expense	Interest expense		9.5			10.7			(1.2)			(11	%)	Interest expense	9.5			11.2			(15	%)	19.0			21.9			(13	%)
Income before income taxes	Income before income taxes		180.4			145.6			34.8			24	%	Income before income taxes	177.1			129.9			36	%	357.5			275.5			30	%
Provision for income taxes	Provision for income taxes		40.5			32.9			7.6			23	%	Provision for income taxes	39.0			27.7			41	%	79.5			60.6			31	%
Effective tax rate	Effective tax rate		22.4		%	22.6		%	n/a			(20) bps		Effective tax rate	22.1		%	21.3		%	80 bps		22.2		%	22.0		%	20 bps
Net income attributable to IDEX	Net income attributable to IDEX		$	140.0		$	112.7		$	27.3		24	%	Net income attributable to IDEX	$	138.2		$	102.2		35	%	$	278.2		$	214.9		29	%
Diluted earnings per common share attributable to IDEX	Diluted earnings per common share attributable to IDEX		$	1.83		$	1.48		$	0.35		24	%	Diluted earnings per common share attributable to IDEX	$	1.81		$	1.34		35	%	$	3.65		$	2.81		30	%

Net Sales

Sales in the second quarter of 2022 increased 16%, reflecting a 12% increase in organic sales, a 7% increase from acquisitions (KZValve - May 2022, Nexsight - February 2022 and Airtech - June 2021) and a 3% unfavorable impact from foreign currency translation. Sales increased 31% domestically and 4% internationally, and sales to customers outside the U.S. were approximately 48% of total sales in the second quarter of 2022 compared to 54% during the same period in 2021.

Sales in the first six months of 2022 increased ~~15%~~16%, reflecting a 12% increase in organic sales, a 5%6% increase from acquisitions ~~(Airtech~~(KZValve - May 2022, Nexsight - February 2022, Airtech - June 2021 and ABEL - March 2021) and a 2% unfavorable impact from foreign currency translation. Sales increased ~~26%~~28% domestically and 6%5% internationally, and sales to customers outside the U.S. were approximately ~~50%~~49% of total sales in the first ~~quarter~~six months of 2022 compared to 54% during the same period in 2021.

Cost of Sales and Gross Margin

Cost of sales in both the three and six months ended June 30, 2022 increased due to higher sales volume, inflation and acquisitions. Both gross profit and gross margin increased primarily due to higher volume leverage and strong operational productivity together with favorable price/cost, partially offset by higher employee-related costs. ~~Additionally, gross~~Gross profit also increased as a result of acquisitions.

Selling, General and Administrative Expenses

Selling, general and administrative ~~(“SG&A)~~ expenses in both the three and six months ended June 30, 2022 increased primarily due to the impact from acquisitions, including amortization as well as higher discretionary spending, resource investments and employee-related costs ~~amortization from acquisitions, discretionary spending and resource investments~~ compared with the same ~~period~~periods in 2021. Additionally, the three and six months ended June 30, 2021

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included a $3.9 million charge related to recording a contingent reserve for a Corporate transaction indemnity that did not reoccur in 2022.

Restructuring Expenses and Asset Impairments

Restructuring expenses and asset impairments decreased in both the three and six months ended June 30, 2022 primarily due to lower severance benefits ~~and asset impairments~~ related to ~~the consolidation of certain facilities in 2021 that did not reoccur in 2022.~~employee reductions.

Operating Income

Operating income for the second quarter of 2022 increased ~~21%~~18%, reflecting ~~an 18%~~a 15% increase in organic operating income, a 3%5% increase from acquisitions (KZValve - May 2022, Nexsight - February 2022 and Airtech - June ~~2021 and ABEL - March~~ 2021) and a 1%2% favorable impact from lower restructuring costs, partially offset by a 2%3% unfavorable impact from foreign currency translation. The increase in operating income is attributable to the operating margin drivers discussed below.

Operating income for the first six months of 2022 increased 19%, reflecting a 17% increase in organic operating income, a 4% increase from acquisitions (KZValve - May 2022, Nexsight - February 2022, Airtech - June 2021 and ABEL - March 2021) and a 1% favorable impact from lower restructuring costs, partially offset by a 3% unfavorable impact from foreign currency translation. The increase in operating income is attributable to the operating margin drivers discussed below.

Operating Margin

Operating margin for the second quarter of 2022 increased ~~110~~30 basis points, reflecting a ~~130~~60 basis point increase in organic operating margin, ~~and~~ a 3010 basis point favorable impact from lower restructuring costs and a 10 basis point favorable impact from foreign currency translation, partially offset by a 4050 basis point decrease due to acquisitions primarily driven by higher ~~amortization and a 10 basis point unfavorable impact from foreign currency translation.~~amortization. The increase in organic operating margin is primarily due to the gross margin drivers discussed above, partially offset by higher discretionary spending and resource investments.

~~Other income - net~~Operating margin for the first six months of 2022 increased 70 basis points, reflecting a 90 basis point increase in organic operating margin and a 20 basis point favorable impact from lower restructuring costs, partially offset by a 40 basis point decrease due to acquisitions primarily driven by higher amortization. The increase in organic operating margin is primarily due to ~~higher gains on~~ ~~asset sales,~~the gross margin drivers discussed above, partially offset by ~~a decrease in the fair market value of~~ ~~marketable securities.~~higher discretionary spending and resource investments.

29Other Expense (Income) - Net

~~Table~~

Other expense (income) - net decreased in both the three and six months ended June 30, 2022. The three and six months ended June 30, 2021 included a $9.7 million noncash loss related to the termination of ~~Contents~~the U.S. pension plan and an $8.6 million loss on early debt redemption. Additionally, the first six months of 2022 included $2.6 million of gains on the sale of assets.

Interest Expense

Interest expense decreased in both the three and six months ended June 30, 2022 primarily due to lower interest rates on the Company’s indebtedness, partially offset by an increase in the amount of debt outstanding compared with the same periods in 2021.

Income Taxes

~~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 in both the three and six months ended June 30, 2022 compared with the same ~~period~~periods in 2021 primarily due to higher ~~earnings while the~~earnings. The effective tax rate ~~slightly~~ ~~decreased~~increased to 22.1% and 22.2% for the three and six months ended June 30, 2022, respectively, compared with 21.3% and 22.0% during the same ~~period~~periods in ~~2021~~2021. The increase in both periods is primarily due to a decrease in the ~~mix of global pre-tax income across jurisdictions.~~excess tax benefits related to share-based compensation.

Results of Reportable Business Segments

The Company has three reportable segments: Fluid & Metering Technologies (“FMT”), Health & Science Technologies (“HST”) and Fire & Safety/Diversified Products (“FSDP”).

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•The FMT segment designs, produces and distributes positive displacement pumps, valves, small volume provers, flow meters, injectors and other fluid-handling pump modules and systems and provides flow monitoring and other services for the food, chemical, general industrial, water and wastewater, agriculture and energy industries.

•The HST segment designs, produces and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems, pneumatic components and sealing 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 and precision gear and peristaltic pump technologies. HST serves a variety of end markets, including food and beverage, pharmaceutical and biopharmaceutical, cosmetics, marine, chemical, wastewater and water treatment, life sciences, research and defense markets.

•The FSDP segment designs, produces and distributes firefighting pumps, valves and controls, rescue tools, lifting bags, 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.

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, operating income and operating margin. The table below illustrates the three reportable segments and the reporting units within each segment.

FMT

HST

FSDP

Pumps

Scientific Fluidics & Optics

Fire & Safety

Water

Sealing Solutions

Dispensing

Energy

Performance Pneumatic Technologies

BAND-IT

Valves

Material Processing Technologies

Agriculture

Micropump

The table below illustrates the percentages of the share of sales and operating income contributed by each segment on the basis of total segments (not total Company) for the three and six months ended ~~March 31,~~June 30, 2022.


		Three Months Ended March 31, 2022			Three Months Ended June 30, 2022										Six Months Ended June 30, 2022
			FMT			HST		FSDP		IDEX			FMT		HST		FSDP		IDEX		FMT		HST		FSDP		IDEX
Sales	Sales		36	%		42	%	22	%	100	%	Sales	38	%	41	%	21	%	100	%	37	%	41	%	22	%	100	%
Operating Income(1)	Operating Income(1)		39	%		41	%	20	%	100	%	Operating Income(1)	40	%	41	%	19	%	100	%	40	%	41	%	19	%	100	%

(1) Segment operating income excludes unallocated corporate operating expenses of ~~$16.9~~$22.7 million and $39.6 million for the three and six months ended ~~March 31,~~June 30, 2022, respectively. .

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Fluid & Metering Technologies Segment


		Three Months Ended March 31,							Components of Change						Three Months Ended June 30,							Components of Change
(Dollars in millions)	(Dollars in millions)	2022			2021			Change	Organic	Acq/Div(1)	Restructuring	Foreign Currency	Total	(Dollars in millions)	2022			2021			Change	Organic	Acq/Div(1)	Restructuring	Foreign Currency	Total
Net sales	Net sales	$	272.0		$	243.3		12%	11%	2%	—	(1%)	12%	Net sales	$	299.9		$	251.3		19%	13%	9%	—	(3%)	19%
Operating income	Operating income	80.4			62.9			28%	27%	—	2%	(1%)	28%	Operating income	82.9			63.5			31%	29%	3%	1%	(2%)	31%
Operating margin	Operating margin	29.5		%	25.8		%	370 bps	380 bps	(40) bps	30 bps	—	370 bps	Operating margin	27.7		%	25.3		%	240 bps	330 bps	(120) bps	20 bps	10 bps	240 bps


	Six Months Ended June 30,							Components of Change
(Dollars in millions)	2022			2021			Change	Organic	Acq/Div(1)(2)	Restructuring	Foreign Currency	Total
Net sales	$	571.9		$	494.6		16%	12%	6%	—	(2%)	16%
Operating income	163.3			126.4			29%	27%	2%	2%	(2%)	29%
Operating margin	28.6		%	25.5		%	310 bps	360 bps	(80) bps	30 bps	—	310 bps

(1)Acquisitions included KZValve - May 2022 and Nexsight - February 2022.

(2) 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 fluctuation is included in the organic column.

•The change in organic sales for both the three and six months ended June 30, 2022 was attributed to increases in the Pumps reporting unit due to ~~strong~~continued favorable demand in the industrial market and a rebound in the energy ~~markets,~~market, in the Agriculture reporting unit due to favorable commodity prices and global demand for crops and in the ~~Water~~Energy reporting unit due to ~~strong demand~~a rebound in the ~~municipal~~refined fuel, liquefied petroleum gas and ~~industrial water markets as well as water saving growth projects.~~aviation markets.

•Sales in the second quarter of 2022 increased ~~15%~~30% domestically and 9%8% internationally. Sales to customers outside the U.S. were approximately ~~45%~~43% of total segment sales in the second quarter of 2022 compared with 48% during the same period in 2021.

•Sales in the first six months of 2022 increased 22% domestically and 8% internationally. Sales to customers outside the U.S. were approximately 44% of total segment sales in the first ~~quarter~~six months of 2022 compared with ~~46%~~47% during the same period in 2021.

•Operating margin of ~~29.5%~~27.7% for the second quarter of 2022 increased ~~370~~240 basis points compared with ~~25.8%~~25.3% during the same period in 2021. The change in operating margin was attributed to the following:

◦Organic operating margin increased 330 basis points due to higher volume leverage and strong operational productivity together with favorable price/cost, partially offset by increases in employee-related costs, discretionary spending and resource investments.

◦Acquisitions negatively impacted operating margin by 120 basis points primarily due to:

▪Incremental intangible asset amortization of $2.0 million related to the Nexsight and KZValve acquisitions, which unfavorably impacted operating margin by 60 basis points; and

▪The dilutive impact from the Nexsight and KZValve acquisitions on overall FMT operating margin.

◦Lower restructuring costs favorably impacted operating margin by 20 basis points.

◦Foreign currency translation favorably impacted operating margin by 10 basis points.

•Operating margin of 28.6% for the first six months of 2022 increased 310 basis points compared with 25.5% during the same period in 2021. The change in operating margin was attributed to the following:

◦Organic operating margin increased ~~380~~360 basis points due to higher volume leverage and strong operational productivity together with favorable price/cost and positive mix, partially offset by increases in employee-related costs, discretionary spending and resource investments. ~~Additionally, the prior year period was unfavorably~~

◦Acquisitions negatively impacted operating margin by ~~increases in inventory reserves associated with COVID-19 new product development opportunities not materializing and the fair value inventory step-up charge~~80 basis points primarily due to:

▪Incremental intangible asset amortization of $2.5 million related to the ABEL, ~~acquisition.~~Nexsight and KZValve acquisitions, which unfavorably impacted operating margin by 50 basis points; and

▪The dilutive impact from the ABEL, Nexsight and KZValve acquisitions on overall FMT operating margin.

◦Lower restructuring costs favorably impacted operating margin by 30 basis points.

◦~~Acquisitions negatively impacted operating margin by 40 basis points due to:~~

▪~~Incremental intangible asset amortization from the ABEL acquisition of $0.6 million, which negatively impacted operating margin by 20 basis points; and~~

▪~~The dilutive impact from the ABEL acquisition on overall FMT operating margin.~~

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Health & Science Technologies Segment


		Three Months Ended March 31,							Components of Change						Three Months Ended June 30,							Components of Change
(Dollars in millions)	(Dollars in millions)	2022			2021			Change	Organic	Acq/Div(1)	Restructuring	Foreign Currency	Total	(Dollars in millions)	2022			2021			Change	Organic	Acq/Div(1)	Restructuring	Foreign Currency	Total
Net sales	Net sales	$	315.2		$	250.4		26%	16%	11%	—	(1%)	26%	Net sales	$	326.0		$	275.0		19%	12%	10%	—	(3%)	19%
Operating income	Operating income	83.6			66.6			26%	19%	7%	1%	(1%)	26%	Operating income	86.5			76.0			14%	7%	8%	1%	(2%)	14%
Operating margin	Operating margin	26.5		%	26.6		%	(10) bps	50 bps	(80) bps	20 bps	—	(10) bps	Operating margin	26.5		%	27.6		%	(110) bps	(90) bps	(60) bps	10 bps	30 bps	(110) bps


	Six Months Ended June 30,							Components of Change
(Dollars in millions)	2022			2021			Change	Organic	Acq/Div(1)	Restructuring	Foreign Currency	Total
Net sales	$	641.2		$	525.4		22%	14%	11%	—	(3%)	22%
Operating income	170.1			142.6			19%	12%	8%	1%	(2%)	19%
Operating margin	26.5		%	27.1		%	(60) bps	(30) bps	(70) bps	20 bps	20 bps	(60) bps

(1) Acquisitions included Airtech in June 2021.

•The change in organic sales for both the three and six months ended June 30, 2022 was attributed to increases in the Scientific Fluidics & Optics reporting unit due to strong market demand across analytical instrumentation, life ~~science~~sciences, core diagnostics and semiconductor markets as well as targeted growth initiatives tied to ~~next generation sequencing and~~ satellite broadband. Additionally, increases in the Sealing Solutions reporting unit were driven by strong demand in the semiconductor, oil and gas and industrial markets and increases in the Performance Pneumatics Technologies reporting unit were driven by strength in the industrial ~~market.~~market as well as price capture.

•Sales in the second quarter of 2022 increased ~~62%~~39% domestically and 5% internationally. Sales to customers outside the U.S. were approximately 52% of total segment sales in the second quarter of 2022 compared with 59% during the same period in 2021.

•Sales in the first six months of 2022 increased 49% domestically and 4% internationally. Sales to customers outside the U.S. were approximately 52% of total segment sales in the first ~~quarter~~six months of 2022 compared with ~~63%~~61% during the same period in 2021.

•Operating margin of 26.5% for the second quarter of 2022 decreased 10110 basis points compared with ~~26.6%~~27.6% during the same period in 2021. The change in operating margin was attributed to the following:

◦Organic operating margin ~~increased 50~~decreased 90 basis points ~~due to~~as higher volume leverage and favorable price/cost ~~which~~ were more than offset by ~~the dilutive impact of amortization related to Airtech as well as~~ higher employee-related costs, resource investments and discretionary ~~spending and resource investments.~~spending.

◦~~Lower restructuring costs favorably impacted operating margin by 20 basis points.~~

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◦Acquisitions negatively impacted operating margin by 8060 basis points as the contributions of the Airtech business were more than offset by incremental intangible asset amortization of $3.9 million, which ~~negatively~~unfavorably impacted operating margin by 130 basis points.

◦Lower restructuring costs favorably impacted operating margin by 10 basis points.

◦Foreign currency translation favorably impacted operating margin by 30 basis points.

•Operating margin of 26.5% for the first six months of 2022 decreased 60 basis points compared with 27.1% during the same period in 2021. The change in operating margin was attributed to the following:

◦Organic operating margin decreased 30 basis points due to higher volume leverage and favorable price/cost which were more than offset by higher employee-related costs, resource investments and discretionary spending.

◦Acquisitions negatively impacted operating margin by 70 basis points as the contributions of the Airtech business were more than offset by incremental intangible asset amortization of $7.9 million, which unfavorably impacted operating margin by 130 basis points.

◦Lower restructuring costs favorably impacted operating margin by 20 basis points.

◦Foreign currency translation favorably impacted operating margin by 20 basis points.

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Fire & Safety/Diversified Products Segment


		Three Months Ended March 31,							Components of Change						Three Months Ended June 30,							Components of Change
(Dollars in millions)	(Dollars in millions)	2022			2021			Change	Organic	Acq/Div	Restructuring	Foreign Currency	Total	(Dollars in millions)	2022			2021			Change	Organic	Acq/Div	Restructuring	Foreign Currency	Total
Net sales	Net sales	$	164.7		$	159.5		3%	5%	—	—	(2%)	3%	Net sales	$	171.2		$	160.8		7%	11%	—	—	(4%)	7%
Operating income	Operating income	40.5			44.6			(9%)	(6)	—	—	(3%)	(9%)	Operating income	39.9			42.8			(7%)	(1%)	—	(2%)	(4%)	(7%)
Operating margin	Operating margin	24.6		%	27.9		%	(330) bps	(320) bps	—	10 bps	(20) bps	(330) bps	Operating margin	23.3		%	26.6		%	(330) bps	(290) bps	—	(50) bps	10 bps	(330) bps


	Six Months Ended June 30,							Components of Change
(Dollars in millions)	2022			2021			Change	Organic	Acq/Div	Restructuring	Foreign Currency	Total
Net sales	$	335.9		$	320.3		5%	8%	—	—	(3%)	5%
Operating income	80.4			87.4			(8%)	(3%)	—	(1%)	(4%)	(8%)
Operating margin	23.9		%	27.3		%	(340) bps	(310) bps	—	(20) bps	(10) bps	(340) bps

•The change in organic sales for both the three and six months ended June 30, 2022 was driven by an increase in the Dispensing reporting unit due to North American project volume and strong demand in the paint market. Additionally, increases in the Fire & Safety reporting unit were due to targeted growth initiatives and increases in the BAND-IT reporting unit were due to strong performance in the transportation, energy and industrial ~~markets, as the automotive market continued to be challenged by supply-chain related customer delays.~~markets.

•Sales in the second quarter of 2022 increased 1%18% domestically ~~and 5%~~but decreased 3% internationally. Sales to customers outside the U.S. were approximately ~~54%~~50% of total segment sales in the second quarter of 2022 compared with 55% during the same period in 2021.

•Sales in the first six months of 2022 increased 10% domestically and 1% internationally. Sales to customers outside the U.S. were approximately 52% of total segment sales in the first ~~quarter~~six months of 2022 compared with ~~53%~~54% during the same period in 2021.

•Operating margin of ~~24.6%~~23.3% for the second quarter of 2022 decreased 330 basis points compared with ~~27.9%~~26.6% during the same period in 2021. The change in ~~organic~~ operating margin was attributed to the following:

◦Organic operating margin decreased 290 basis points due to higher employee-related costs and discretionary spending as well as compressed price/cost due to long-term original equipment manufacturer contracts, partially offset by higher volume and positive mix.

◦Higher restructuring costs unfavorably impacted operating margin by 50 basis points.

◦Foreign currency translation favorably impacted operating margin by 10 basis points.

•Operating margin of 23.9% for the first six months of 2022 decreased 340 basis points compared with 27.3% during the same period in 2021. The change in operating margin was attributed to the following:

◦Organic operating margin decreased 310 basis points due to higher discretionary spending and employee-related costs as well as compressed price/cost due to long-term original equipment manufacturer contracts, partially offset by higher volume.

◦Higher restructuring costs unfavorably impacted operating margin by 20 basis points.

◦Foreign currency translation unfavorably impacted operating margin by 10 basis points.

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Liquidity and Capital Resources

Liquidity

Although the COVID-19 pandemic (including the emergence of variant strains) has impacted and may continue to impact the Company’s operating cash flows, based on management’s current expectations and currently available information, 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, share repurchases and quarterly dividend payments to holders of the Company’s common stock for the 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.

At ~~March 31,~~June 30, 2022, working capital was ~~$1,213.0~~$1,037.5 million and the Company’s current ratio was ~~3.6~~3.0 to 1. At ~~March 31,~~June 30, 2022, the Company’s cash and cash equivalents totaled ~~$733.2~~$557.8 million, of which ~~$467.7~~$473.5 million was held outside of the United States. As of ~~March 31,~~June 30, 2022, there was no balance outstanding under the Revolving Facility and ~~$7.1~~$7.2 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility of ~~$792.9~~$792.8 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 Condensed Consolidated Statements of Cash Flows:


		Three Months Ended March 31,					Six Months Ended June 30,
(In millions)	(In millions)	2022		2021		(In millions)	2022		2021
Net cash flows provided by (used in):	Net cash flows provided by (used in):					Net cash flows provided by (used in):
Operating activities	Operating activities	$	79.7	$	109.3	Operating activities	$	192.0	$	245.6
Investing activities	Investing activities	(124.4)		(119.5)		Investing activities	(260.1)		(609.3)
Financing activities	Financing activities	(71.3)		(40.4)		Financing activities	(197.1)		64.0

Operating Activities

Cash flows provided by operating activities decreased ~~$29.6~~$53.6 million to ~~$79.7~~$192.0 million, primarily due to increases in working capital discussed below, partially offset by higher earnings.

Operating working capital, calculated as accounts receivable plus inventory minus 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 ~~March 31,~~June 30, 2022 and December 31, 2021:


(In millions)	(In millions)	March 31, 2022		December 31, 2021		(In millions)	June 30, 2022		December 31, 2021
Receivables - net	Receivables - net	$	411.2	$	356.4	Receivables - net	$	425.7	$	356.4
Inventories	Inventories	428.5		370.4		Inventories	457.4		370.4
Less: Trade accounts payable	Less: Trade accounts payable	210.2		178.8		Less: Trade accounts payable	214.4		178.8
Operating working capital	Operating working capital	$	629.5	$	548.0	Operating working capital	$	668.7	$	548.0

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Operating working capital increased ~~$81.5~~$120.7 million to ~~$629.5~~$668.7 million at ~~March 31,~~June 30, 2022, with acquisition, divestiture and foreign currency translation impacts ~~primarily~~ driving a net ~~$13.0~~$34.3 million of the increase. Excluding these impacts, accounts receivable increased ~~$45.6~~$47.7 million as a result of higher volume; inventories increased ~~$46.9~~$62.4 million to support production amid supply chain difficulties; and trade accounts payable increased ~~$24.0~~$23.7 million due to higher inventory purchases.

Investing Activities

Cash flows used in investing activities ~~increased $4.9~~ decreased $349.2 million to ~~$124.4~~$260.1 million, primarily due to ~~higher~~lower cash outflows for acquisitions with the addition of KZValve and Nexsight in 2022 compared to Airtech and ABEL in 2021 and ~~for capital expenditures as the Company continues the expansion of its China and India facilities, partially offset by~~ higher proceeds from asset ~~sales.~~sales in 2022 compared to 2021.

Financing Activities

Cash flows used in financing activities ~~increased~~in the six months ended June 30, 2022 were $197.1 million compared to cash flows provided by ~~$30.9~~financing activities of $64.0 million ~~to $71.3 million.~~in the prior year period. During 2022, the Company repurchased ~~147,500~~622,190 shares at a cost of ~~$28.3~~$115.8 million, of which ~~$2.0~~$5.4 million did not settle until ~~April,~~July, and paid ~~$41.4~~$86.9 million in dividends. During 2021, the Company ~~did not repurchase any shares~~issued $500.0 million of 2.625% Senior Notes, redeemed $350.0 million of 4.20% Senior Notes and paid ~~$38.1~~$79.2 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 planned capital expenditures, interest and principal payments on all borrowings and quarterly dividend payments to holders of the Company’s common stock as well as for funding ~~acquisitions.~~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:


		Three Months Ended March 31,							Six Months Ended June 30,
(Dollars in millions)	(Dollars in millions)	2022			2021			(Dollars in millions)	2022			2021
Cash flows provided by operating activities	Cash flows provided by operating activities	$	79.7		$	109.3		Cash flows provided by operating activities	$	192.0		$	245.6
Less: Capital expenditures	Less: Capital expenditures	(16.1)			(14.6)			Less: Capital expenditures	(31.7)			(30.6)
Free cash flow	Free cash flow	$	63.6		$	94.7		Free cash flow	$	160.3		$	215.0
Free cash flow as a percent of adjusted net income attributable to IDEX(1)	Free cash flow as a percent of adjusted net income attributable to IDEX(1)	42.5		%	76.7		%	Free cash flow as a percent of adjusted net income attributable to IDEX(1)	52.8		%	83.7		%

(1) Free cash flow as a percent of adjusted net income attributable to IDEX ~~now~~ 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.

Cash Requirements

~~Pending Acquisitions~~

On ~~March 30, 2022, the Company entered into a definitive agreement to acquire KZValve for cash consideration of~~ ~~$120.0 million. The Company expects to close the transaction by the end of the~~ ~~second quarter of 2022, subject to regulatory approval and customary closing conditions.~~

Capital Expenditures

Capital expenditures are generally expenditures for machinery and equipment that support growth and improved productivity, tooling, business system technology, replacement of equipment and investments in new facilities. Cash flows from operations were more than adequate to fund capital expenditures of ~~$16.1~~$31.7 million and ~~$14.6~~$30.6 million in the first ~~quarters~~six months of 2022 and 2021, respectively. The Company believes it has sufficient operating cash flow to continue to meet current obligations and invest in planned capital expenditures.

Share Repurchases

During the six months ended June 30, 2022, the Company repurchased 622,190 shares at a cost of $115.8 million, of which $5.4 million did not settle until July. There were no share repurchases during the six months ended June 30, 2021. As of

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~~Share Repurchases~~

During the three months ended March 31, 2022, the Company repurchased 147,500 shares at a cost of $28.3 million, of which $2.0 million did not settle until April. There were no share repurchases during the three months ended March 31, 2021. As of March 31,June 30, 2022, the amount of share repurchase authorization remaining was ~~$683.7~~$596.2 million. For additional information regarding the Company’s share repurchase program, refer to Note 15 in the Notes to Condensed Consolidated Financial Statements.

Subsequent to ~~March 31,~~June 30, 2022 and through ~~April~~July 22, 2022, the Company has repurchased ~~60,362~~140,112 shares at a cost of ~~$11.7~~$25.8 million.

Covenants

There are two key financial covenants that the Company is required to maintain in connection with the Revolving Facility, the 3.20% Senior Notes and the 3.37% Senior Notes, a minimum interest coverage ratio of 3.0 to 1 and a maximum leverage ratio of 3.50 to 1. At ~~March 31,~~June 30, 2022, the Company was in compliance with both of these financial covenants, as the Company’s interest coverage ratio was ~~21.68~~23.38 to 1 for covenant calculation purposes and the leverage ratio was ~~1.46~~1.40 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.

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 June 2021.

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

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

Critical Accounting Estimates

As discussed in the Annual Report on Form 10-K for the year ended December 31, 2021, the preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amount 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. There have been no changes to the Company’s critical accounting estimates described in the Annual Report on Form 10-K for the year ended December 31, 2021.

Non-GAAP Disclosures

Set forth below are reconciliations of each of Organic sales, Adjusted gross profit (and adjusted gross margin), Adjusted operating income (and adjusted operating margin), Adjusted net income attributable to IDEX, Adjusted diluted earnings per share (“EPS”) attributable to IDEX, Earnings before interest, income taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA 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, ~~and~~ gains on sales of ~~assets.~~assets, a charge related to recording a contingent reserve for a Corporate transaction indemnity, the loss on early debt redemption and the noncash loss related to the termination of the U.S. pension plan. Adjusted net income attributable to IDEX and Adjusted diluted EPS attributable to IDEX also exclude 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. The reconciliation of segment EBITDA and Adjusted segment EBITDA to net income was performed on a consolidated basis due to the fact that the Company does not allocate consolidated interest expense or the consolidated provision for income taxes to its segments.

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. 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

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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 organic sales and organic operating income provides useful information to investors by helping to identify underlying growth trends in the

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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 and its peers.

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 the Company’s three segments and for enterprise valuation purposes. Management believes that EBITDA is useful to investors as an indicator of the strength and performance of the Company and a way to evaluate and compare operating performance and value companies within the Company’s industry. Management believes that EBITDA margin is useful for the same reason as EBITDA. EBITDA is also used to calculate certain financial covenants such as EBITDA interest coverage, which is EBITDA divided by consolidated interest expense. In addition, this report presents Adjusted EBITDA, which is EBITDA adjusted for items that are not reflective of ongoing operations as discussed above and Adjusted EBITDA interest coverage, which is Adjusted EBITDA divided by consolidated interest expense. Management believes that Adjusted EBITDA is useful as a performance indicator of ongoing operations. The Company believes 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 the Company’s industry. 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 U.S. GAAP measure in the section above titled “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.


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

		Three Months Ended March 31, 2022									Three Months Ended June 30, 2022
		FMT		HST		FSDP		IDEX			FMT		HST		FSDP		IDEX
Change in net sales	Change in net sales	12	%	26	%	3	%	15	%	Change in net sales	19	%	19	%	7	%	16	%
- Net impact from acquisitions/divestitures	- Net impact from acquisitions/divestitures	2	%	11	%	—	%	5	%	- Net impact from acquisitions/divestitures	9	%	10	%	—		7	%
- Impact from foreign currency		(1	%)	(1	%)	(2	%)	(2	%)
- Impact on foreign currency										- Impact on foreign currency	(3	%)	(3	%)	(4	%)	(3	%)
Change in organic net sales	Change in organic net sales	11	%	16	%	5	%	12	%	Change in organic net sales	13	%	12	%	11	%	12	%




	Six Months Ended June 30, 2022
	FMT		HST		FSDP		IDEX
Change in net sales	16	%	22	%	5	%	16	%
- Net impact from acquisitions/divestitures	6	%	11	%	—		6	%
- Impact from foreign currency	(2	%)	(3	%)	(3	%)	(2	%)
Change in organic net sales	12	%	14	%	8	%	12	%

2. Reconciliations of Reported-to-Adjusted Gross Profit and Margin
Three Months Ended March 31,
2022 2021
Gross profit $ 342.5 $ 292.6
+ Fair value inventory step-up charge — 0.7
Adjusted gross profit $ 342.5 $ 293.3
Net sales $ 751.1 $ 652.0
Gross margin 45.6 % 44.9 %
Adjusted gross margin 45.6 % 45.0 %

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3. Reconciliations Reported-to-Adjusted Operating Income and Margin
Three Months Ended March 31,
2022 2021
FMT HST FSDP Corporate IDEX FMT HST FSDP Corporate IDEX
Reported operating income (loss) $ 80.4 $ 83.6 $ 40.5 $ (16.9) $ 187.6 $ 62.9 $ 66.6 $ 44.6 $ (18.6) $ 155.5
+ Restructuring expenses and asset impairments — — — — — 0.9 0.6 0.1 0.6 2.2
+ Fair value inventory step-up charge — — — — — 0.7 — — — 0.7
Adjusted operating income (loss) $ 80.4 $ 83.6 $ 40.5 $ (16.9) $ 187.6 $ 64.5 $ 67.2 $ 44.7 $ (18.0) $ 158.4
Net sales (eliminations) $ 272.0 $ 315.2 $ 164.7 $ (0.8) $ 751.1 $ 243.3 $ 250.4 $ 159.5 $ (1.2) $ 652.0
Reported operating margin 29.5 % 26.5 % 24.6 % n/m 25.0 % 25.8 % 26.6 % 27.9 % n/m 23.9 %
Adjusted operating margin 29.5 % 26.5 % 24.6 % n/m 25.0 % 26.5 % 26.9 % 28.0 % n/m 24.3 %


2. Reconciliations of Reported-to-Adjusted Gross Profit and Margin

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Gross profit	$	356.9		$	306.1		$	699.4		$	598.7
+ Fair value inventory step-up charges	0.4			1.8			0.4			2.5
Adjusted gross profit	$	357.3		$	307.9		$	699.8		$	601.2

Net sales	$	796.1		$	686.0		$	1,547.2		$	1,338.0

Gross margin	44.8		%	44.6		%	45.2		%	44.7		%
Adjusted gross margin	44.9		%	44.9		%	45.2		%	44.9		%

4. Reconciliations of Reported-to-Adjusted Net Income and Diluted EPS
Three Months Ended March 31,
2022 2021
Reported net income attributable to IDEX $ 140.0 $ 112.7
+ Restructuring expenses and asset impairments — 2.2
+ Tax impact on restructuring expenses and asset impairments — (0.5)
+ Fair value inventory step-up charge — 0.7
+ Tax impact on fair value inventory step-up charge — (0.2)
- Gains on sales of assets (2.7) —
+ Tax impact on gains on sales of assets 0.6 —
+ Acquisition-related intangible asset amortization 15.3 11.0
+ Tax impact on acquisition-related intangible asset amortization (3.4) (2.5)
Adjusted net income attributable to IDEX $ 149.8 $ 123.4

Three Months Ended March 31,
2022 2021
Reported diluted EPS attributable to IDEX $ 1.83 $ 1.48
+ Restructuring expenses and asset impairments — 0.03
+ Tax impact on restructuring expenses and asset impairments — (0.01)
+ Fair value inventory step-up charge — 0.01
+ Tax impact on fair value inventory step-up charge — —
- Gains on sales of assets (0.03) —
+ Tax impact on gains on sales of assets 0.01 —
+ Acquisition-related intangible asset amortization 0.20 0.14
+ Tax impact on acquisition-related intangible asset amortization (0.05) (0.03)
Adjusted diluted EPS attributable to IDEX $ 1.96 $ 1.62
Diluted weighted average shares outstanding 76.4 76.3


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

	Three Months Ended June 30,
	2022														2021
	FMT			HST			FSDP			Corporate		IDEX			FMT			HST			FSDP			Corporate		IDEX
Reported operating income (loss)	$	82.9		$	86.5		$	39.9		$	(22.7)	$	186.6		$	63.5		$	76.0		$	42.8		$	(24.0)	$	158.3
+ Restructuring expenses and asset impairments	1.7			0.1			1.0			—		2.8			1.9			0.5			0.1			0.7		3.2
+ Fair value inventory step-up charges	0.4			—			—			—		0.4			1.8			—			—			—		1.8
+ Corporate transaction indemnity	—			—			—			—		—			—			—			—			3.9		3.9
Adjusted operating income (loss)	$	85.0		$	86.6		$	40.9		$	(22.7)	$	189.8		$	67.2		$	76.5		$	42.9		$	(19.4)	$	167.2

Net sales (eliminations)	$	299.9		$	326.0		$	171.2		$	(1.0)	$	796.1		$	251.3		$	275.0		$	160.8		$	(1.1)	$	686.0

Reported operating margin	27.7		%	26.5		%	23.3		%	n/m		23.4		%	25.3		%	27.6		%	26.6		%	n/m		23.1		%
Adjusted operating margin	28.4		%	26.5		%	23.9		%	n/m		23.8		%	26.7		%	27.8		%	26.7		%	n/m		24.4		%

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5. Reconciliations of EBITDA to Net Income
Three Months Ended March 31,
2022 2021
FMT HST FSDP Corporate IDEX FMT HST FSDP Corporate IDEX
Reported operating income (loss) $ 80.4 $ 83.6 $ 40.5 $ (16.9) $ 187.6 $ 62.9 $ 66.6 $ 44.6 $ (18.6) $ 155.5
+ Other income (expense), net 1.6 0.2 1.6 (1.1) 2.3 — 0.4 0.3 0.1 0.8
+ Depreciation and amortization 7.6 16.0 3.8 0.1 27.5 7.1 10.5 3.9 0.1 21.6
EBITDA 89.6 99.8 1.0 45.9 2.0 (17.9) 217.4 70.0 77.5 48.8 (18.4) 177.9
- Interest expense 9.5 10.7
- Provision for income taxes 40.5 32.9
- Depreciation and amortization 27.5 21.6
Reported net income $ 139.9 $ 112.7
Net sales (eliminations) $ 272.0 $ 315.2 $ 164.7 $ (0.8) $ 751.1 $ 243.3 $ 250.4 $ 159.5 $ (1.2) $ 652.0
Reported operating margin 29.5 % 26.5 % 24.6 % n/m 25.0 % 25.8 % 26.6 % 27.9 % n/m 23.9 %
EBITDA margin 32.9 % 31.7 % 27.9 % n/m 28.9 % 28.7 % 31.0 % 30.5 % n/m 27.3 %
EBITDA interest coverage 22.9 16.5



	Six Months Ended June 30,
	2022														2021
	FMT			HST			FSDP			Corporate		IDEX			FMT			HST			FSDP			Corporate		IDEX
Reported operating income (loss)	$	163.3		$	170.1		$	80.4		$	(39.6)	$	374.2		$	126.4		$	142.6		$	87.4		$	(42.6)	$	313.8
+ Restructuring expenses and asset impairments	1.7			0.1			1.0			—		2.8			2.8			1.1			0.2			1.3		5.4
+ Fair value inventory step-up charges	0.4			—			—			—		0.4			2.5			—			—			—		2.5
+ Corporate transaction indemnity	—			—			—			—		—			—			—			—			3.9		3.9
Adjusted operating income (loss)	$	165.4		$	170.2		$	81.4		$	(39.6)	$	377.4		$	131.7		$	143.7		$	87.6		$	(37.4)	$	325.6

Net sales (eliminations)	$	571.9		$	641.2		$	335.9		$	(1.8)	$	1,547.2		$	494.6		$	525.4		$	320.3		$	(2.3)	$	1,338.0

Reported operating margin	28.6		%	26.5		%	23.9		%	n/m		24.2		%	25.5		%	27.1		%	27.3		%	n/m		23.5		%
Adjusted operating margin	28.9		%	26.5		%	24.2		%	n/m		24.4		%	26.6		%	27.3		%	27.3		%	n/m		24.3		%

6. Reconciliations of EBITDA to Adjusted EBITDA
Three Months Ended March 31,
2022 2021
FMT HST FSDP Corporate IDEX FMT HST FSDP Corporate IDEX
EBITDA(1)
$ 89.6 $ 99.8 $ 45.9 $ (17.9) $ 217.4 $ 70.0 $ 77.5 $ 48.8 $ (18.4) $ 177.9
+ Restructuring expenses and asset impairments — — — — — 0.9 0.6 0.1 0.6 2.2
+ Fair value inventory step-up charge — — — — — 0.7 — — — 0.7
- Gains on sales of assets (1.2) — (1.5) — (2.7) — — — — —
Adjusted EBITDA $ 88.4 $ 99.8 $ 44.4 $ (17.9) $ 214.7 $ 71.6 $ 78.1 $ 48.9 $ (17.8) $ 180.8
Adjusted EBITDA margin 32.5 % 31.7 % 26.9 % n/m 28.6 % 29.4 % 31.2 % 30.6 % n/m 27.7 %
Adjusted EBITDA interest coverage 22.6 16.8



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

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Reported net income attributable to IDEX	$	138.2	$	102.2	$	278.2	$	214.9
+ Restructuring expenses and asset impairments	2.8		3.2		2.8		5.4
+ Tax impact on restructuring expenses and asset impairments	(0.7)		(0.9)		(0.7)		(1.4)
+ Fair value inventory step-up charges	0.4		1.8		0.4		2.5
+ Tax impact on fair value inventory step-up charges	(0.1)		(0.5)		(0.1)		(0.7)
- Gains on sales of assets	—		—		(2.7)		—
+ Tax impact on gains on sales of assets	—		—		0.6		—
+ Corporate transaction indemnity	—		3.9		—		3.9
+ Tax impact on Corporate transaction indemnity	—		(0.9)		—		(0.9)
+ Loss on early debt redemption	—		8.6		—		8.6
+ Tax impact on loss on early debt redemption	—		(1.8)		—		(1.8)
+ Termination of the U.S. pension plan	—		9.7		—		9.7
+ Tax impact on termination of the U.S. pension plan	—		(2.1)		—		(2.1)
+ Acquisition-related intangible asset amortization	16.9		13.5		32.2		24.5
+ Tax impact on acquisition-related intangible asset amortization	(3.9)		(3.1)		(7.3)		(5.6)
Adjusted net income attributable to IDEX	$	153.6	$	133.6	$	303.4	$	257.0

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	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Reported diluted EPS attributable to IDEX	$	1.81	$	1.34	$	3.65	$	2.81
+ Restructuring expenses and asset impairments	0.04		0.04		0.04		0.07
+ Tax impact on restructuring expenses and asset impairments	(0.01)		(0.01)		(0.01)		(0.02)
+ Fair value inventory step-up charges	—		0.02		—		0.03
+ Tax impact on fair value inventory step-up charges	—		(0.01)		—		(0.01)
- Gains on sales of assets	—		—		(0.03)		—
+ Tax impact on gains on sales of assets	—		—		0.01		—
+ Corporate transaction indemnity	—		0.05		—		0.05
+ Tax impact on Corporate transaction indemnity	—		(0.01)		—		(0.01)
+ Loss on early debt redemption	—		0.11		—		0.11
+ Tax impact on loss on early debt redemption	—		(0.02)		—		(0.02)
+ Termination of the U.S. pension plan	—		0.13		—		0.13
+ Tax impact on termination of the U.S. pension plan	—		(0.03)		—		(0.03)
+ Acquisition-related intangible asset amortization	0.22		0.18		0.42		0.32
+ Tax impact on acquisition-related intangible asset amortization	(0.04)		(0.04)		(0.10)		(0.07)
Adjusted diluted EPS attributable to IDEX	$	2.02	$	1.75	$	3.98	$	3.36

Diluted weighted average shares outstanding	76.1		76.4		76.2		76.4



5. Reconciliations of EBITDA to Net Income

	Three Months Ended June 30,
	2022														2021
	FMT			HST			FSDP			Corporate		IDEX			FMT			HST			FSDP			Corporate		IDEX
Reported operating income (loss)	$	82.9		$	86.5		$	39.9		$	(22.7)	$	186.6		$	63.5		$	76.0		$	42.8		$	(24.0)	$	158.3
+ Other income (expense), net	0.2			1.2			0.5			(1.9)		—			(5.6)			(0.3)			(2.1)			(9.2)		(17.2)
+ Depreciation and amortization	9.8			15.8			3.7			0.1		29.4			7.9			12.6			3.8			0.1		24.4
EBITDA	92.9			103.5			44.1			(24.5)		216.0			65.8			88.3			44.5			(33.1)		165.5
- Interest expense												9.5														11.2
- Provision for income taxes												39.0														27.7
- Depreciation and amortization												29.4														24.4
Reported net income												$	138.1													$	102.2

Net sales (eliminations)	$	299.9		$	326.0		$	171.2		$	(1.0)	$	796.1		$	251.3		$	275.0		$	160.8		$	(1.1)	$	686.0

Reported operating margin	27.7		%	26.5		%	23.3		%	n/m		23.4		%	25.3		%	27.6		%	26.6		%	n/m		23.1		%
EBITDA margin	31.0		%	31.8		%	25.8		%	n/m		27.1		%	26.2		%	32.1		%	27.7		%	n/m		24.1		%
EBITDA interest coverage												22.7														14.8

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	Six Months Ended June 30,
	2022														2021
	FMT			HST			FSDP			Corporate		IDEX			FMT			HST			FSDP			Corporate		IDEX
Reported operating income (loss)	$	163.3		$	170.1		$	80.4		$	(39.6)	$	374.2		$	126.4		$	142.6		$	87.4		$	(42.6)	$	313.8
+ Other income (expense), net	1.8			1.4			2.1			(3.0)		2.3			(5.6)			0.1			(1.8)			(9.1)		(16.4)
+ Depreciation and amortization	17.4			31.8			7.5			0.2		56.9			15.0			23.1			7.7			0.2		46.0
EBITDA	182.5			203.3			90.0			(42.4)		433.4			135.8			165.8			93.3			(51.5)		343.4
- Interest expense												19.0														21.9
- Provision for income taxes												79.5														60.6
- Depreciation and amortization												56.9														46.0
Reported net income												$	278.0													$	214.9

Net sales (eliminations)	$	571.9		$	641.2		$	335.9		$	(1.8)	$	1,547.2		$	494.6		$	525.4		$	320.3		$	(2.3)	$	1,338.0

Reported operating margin	28.6		%	26.5		%	23.9		%	n/m		24.2		%	25.5		%	27.1		%	27.3		%	n/m		23.5		%
EBITDA margin	31.9		%	31.7		%	26.8		%	n/m		28.0		%	27.5		%	31.5		%	29.1		%	n/m		25.7		%
EBITDA interest coverage												22.8														15.6



6. Reconciliations of EBITDA to Adjusted EBITDA

	Three Months Ended June 30,
	2022														2021
	FMT			HST			FSDP			Corporate		IDEX			FMT			HST			FSDP			Corporate		IDEX
EBITDA(1)	$	92.9		$	103.5		$	44.1		$	(24.5)	$	216.0		$	65.8		$	88.3		$	44.5		$	(33.1)	$	165.5
+ Restructuring expenses and asset impairments	1.7			0.1			1.0			—		2.8			1.9			0.5			0.1			0.7		3.2
+ Fair value inventory step-up charges	0.4			—			—			—		0.4			1.8			—			—			—		1.8

+ Corporate transaction indemnity	—			—			—			—		—			—			—			—			3.9		3.9
+ Loss on early debt redemption	—			—			—			—		—			—			—			—			8.6		8.6
+ Termination of the U.S. pension plan	—			—			—			—		—			6.3			—			1.8			1.6		9.7
Adjusted EBITDA	$	95.0		$	103.6		$	45.1		$	(24.5)	$	219.2		$	75.8		$	88.8		$	46.4		$	(18.3)	$	192.7

Adjusted EBITDA margin	31.7		%	31.8		%	26.4		%	n/m		27.5		%	30.2		%	32.2		%	28.9		%	n/m		28.1		%
Adjusted EBITDA interest coverage												23.0														17.2

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	Six Months Ended June 30,
	2022														2021
	FMT			HST			FSDP			Corporate		IDEX			FMT			HST			FSDP			Corporate		IDEX
EBITDA(1)	$	182.5		$	203.3		$	90.0		$	(42.4)	$	433.4		$	135.8		$	165.8		$	93.3		$	(51.5)	$	343.4
+ Restructuring expenses and asset impairments	1.7			0.1			1.0			—		2.8			2.8			1.1			0.2			1.3		5.4
+ Fair value inventory step-up charges	0.4			—			—			—		0.4			2.5			—			—			—		2.5
- Gains on sales of assets	(1.2)			—			(1.5)			—		(2.7)			—			—			—			—		—
+ Corporate transaction indemnity	—			—			—			—		—			—			—			—			3.9		3.9
+ Loss on early debt redemption	—			—			—			—		—			—			—			—			8.6		8.6
+ Termination of the U.S. pension plan	—			—			—			—		—			6.3			—			1.8			1.6		9.7
Adjusted EBITDA	$	183.4		$	203.4		$	89.5		$	(42.4)	$	433.9		$	147.4		$	166.9		$	95.3		$	(36.1)	$	373.5

Adjusted EBITDA margin	32.1		%	31.7		%	26.6		%	n/m		28.0		%	29.8		%	31.7		%	29.8		%	n/m		27.9		%
Adjusted EBITDA interest coverage												22.8														17.0

(1) EBITDA, a non-GAAP financial measure, is reconciled to net income, its most directly comparable U.S. GAAP financial measure, immediately above in Table 5.

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Cautionary Statement Under the Private Securities Litigation Reform Act

This quarterly report on Form 10-Q, including the “Overview,” “Results of Operations” and “Liquidity and Capital Resources” sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements may relate to, among other things, the Company’s expected organic sales growth and expected earnings per share, and the assumptions underlying these expectations, ~~plant and equipment capacity for future growth and the anticipated timing and effects of planned facility expansion, the duration of supply chain challenges,~~ anticipated future acquisition behavior and capital deployment, availability of cash and financing alternatives, the ~~anticipated timing~~intent to refinance or repay the Notes using the available borrowing capacity of the ~~closing of the Company's acquisition of KZValve and~~Revolving Facility, the anticipated benefits of the Company’s acquisitions, including the acquisitions of Airtech, Nexsight, KZValve and ~~KZValve,~~ABEL, and are indicated by words or phrases such as “anticipates,” “estimates,” “plans,” “guidance,” “expects,” “projects,” “forecasts,” “should,” “could,” “will,” “management believes,” “the Company believes,” “the Company intends” and similar words or phrases. These statements are subject to inherent uncertainties and risks that could cause actual results to differ materially from those anticipated at the date of this report. The risks and uncertainties include, but are not limited to, the following: the impact of health epidemics and pandemics, including the COVID-19 pandemic, and the impact of related governmental actions, on the Company’s ability to operate its business and facilities, on its customers, on supply chains and on the U.S. and global economy generally; economic and political consequences resulting from terrorist attacks and wars, including ~~Russia’s~~Russia's invasion of Ukraine and the global response to this invasion, which, along with the ongoing effects of the COVID-19 pandemic, could have an adverse impact on the ~~Company’s~~Company's business by creating disruptions in the global supply chain and by potentially having an adverse impact on the global economy; levels of industrial activity and economic conditions in the U.S. and other countries around the ~~world;~~world, including uncertainties in the financial markets; pricing pressures, including inflation and rising interest rates, and other competitive factors and levels of capital spending in certain industries, all of which could have a material impact on order rates and the Company’s results; the Company’s ability to make acquisitions and to integrate and operate acquired businesses on a profitable basis; the relationship of the U.S. dollar to other currencies and its impact on pricing and cost competitiveness; political and economic conditions in foreign countries in which the Company operates; developments with respect to trade policy and tariffs; interest rates; capacity utilization and the effect this has on costs; labor markets; supply chain backlogs, including risks affecting component availability, labor inefficiencies and freight logistical challenges; market conditions and material costs; risks related to environmental, social and corporate governance (“ESG”) issues, including those related to climate change and sustainability; and developments with respect to contingencies, such as litigation and environmental matters. Additional factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the “Risk Factors” section included in the Company’s most recent annual report on Form 10-K and the Company’s subsequent quarterly reports filed with the Securities and Exchange Commission (“SEC”) and the other risks discussed in the Company’s filings with the SEC. The forward-looking statements included here are only made as of the date of this report, and management undertakes no obligation to publicly update them to reflect subsequent events or circumstances, except as may be required by law. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented here.

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Item 3. 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 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. As of ~~March 31,~~June 30, 2022, the Company did not have 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 and Swedish Krona. The Company manages its foreign exchange risk principally through invoicing customers in the same currency as the source of products. Foreign currency transaction gains and losses are reported within Other ~~income~~expense (income) - net in the Condensed Consolidated Statements of Operations.

Interest Rate Fluctuations

The Company does not have significant interest rate exposure due to all of the $1,200.1 million of debt outstanding as of ~~March 31,~~June 30, 2022 being fixed rate debt. The Company’s Revolving Facility bears interest at either an alternate base rate or adjusted LIBOR plus, in each case, an applicable margin. At ~~March 31,~~June 30, 2022, there was no balance outstanding under the Revolving Facility.

Inflation Risk

We source a wide variety of materials and components from a network of global suppliers. While such 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 effects of inflation and changing prices through price increases to maintain reasonable gross margins.

Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by SEC Rule 13a-15(b), the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of ~~March 31,~~June 30, 2022.

There has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company and its subsidiaries are party to legal proceedings arising in the ordinary course of business as described in Note 18 in Part I, Item 1, “Legal Proceedings,” and such disclosure is incorporated by reference into this Item 1, “Legal Proceedings.”

The Company’s threshold for disclosing material environmental legal proceedings involving a government authority where potential monetary sanctions are involved is $1.0 million.

In addition, the Company and ~~six~~seven of its subsidiaries are presently named as defendants in a number of lawsuits claiming various asbestos-related personal injuries, allegedly as a result of exposure to products manufactured with components that contained asbestos. These components were acquired from third party suppliers and were not manufactured by the Company or any of the defendant subsidiaries. To date, the majority of the Company’s settlements and legal costs, except for costs of coordination, administration, insurance investigation and a portion of defense costs, have been covered in full by insurance, subject to applicable deductibles. However, the Company cannot predict whether and to what extent insurance will be available to continue to cover these settlements and legal costs, or how insurers may respond to claims that are tendered to them. Asbestos-related claims have been filed in jurisdictions throughout the United States and the United Kingdom. Most of the claims resolved to date have been dismissed without payment. The balance of the claims have been settled for various immaterial amounts. Only one case has been tried, resulting in a verdict for the Company’s business unit. No provision has been made in the financial statements of the Company, other than for insurance deductibles in the ordinary course, and the Company does not currently believe the asbestos-related claims will have a material adverse effect on the Company’s business, financial position, results of operations or cash flows.

Item 1A. Risk Factors

There have been no material changes with respect to risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about the Company’s purchases of its common stock during the quarter ended ~~March 31,~~June 30, 2022:

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)
Approximate Dollar
Value that May Yet
be Purchased
Under the Plans
or Programs(1)
January 1, 2022 to January 31, 2022 — $ — — $ 712,001,005
February 1, 2022 to February 28, 2022 40,000 189.23 40,000 704,431,750
March 1, 2022 to March 31, 2022 107,500 192.41 107,500 683,747,520
Total 147,500 $ 191.55 147,500 $ 683,747,520


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)	Approximate Dollar Value that May Yet be Purchased Under the Plans or Programs(1)
April 1, 2022 to April 30, 2022	78,662	$	192.89	78,662	$	668,574,300
May 1, 2022 to May 31, 2022	146,406	186.16		146,406	641,319,438
June 1, 2022 to June 30, 2022	249,622	180.82		249,622	596,182,072
Total	474,690	$	184.47	474,690	$	596,182,072

(1)On March 17, 2020, the Company’s Board of Directors approved an increase of $500.0 million in the authorized level of repurchases of common stock. This approval is in addition to the prior repurchase authorization of the Board of Directors of $300.0 million on December 1, 2015. These authorizations have no expiration date.

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Item 6. Exhibits.


Exhibit Number						Description



10.1,*						~~Letter Agreement between IDEX Corporation and Melissa S. Flores, dated as of January 7, 2021~~

31.1*						Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes Oxley Act of 2002

31.2*						Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes Oxley Act of 2002

32.1*						Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350

32.2*						Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

101*						The following financial information from IDEX Corporation's Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~June 30, 2022 formatted in Inline eXtensible Business Reporting Language (iXBRL) includes: (i) the Cover Page, (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Income, (iv) the Condensed Consolidated Statements of Comprehensive Income, (v) the Condensed Consolidated Statements of Equity, (vi) the Condensed Consolidated Statements of Cash Flows, and (vii) Notes to the Condensed Consolidated Financial Statements.

104*						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith.

** Management contract or compensatory plan or agreement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			IDEX Corporation

			By:			/s/ WILLIAM K. GROGAN
						William K. Grogan
						Senior Vice President and Chief Financial Officer (Principal Financial Officer)

			By:			/s/ ALLISON S. LAUSAS
						Allison S. Lausas
						Vice President and Chief Accounting Officer (Principal Accounting Officer)

Date: ~~April~~July 27, 2022

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