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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _____________________________ 
Form 10-Q
 
þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2016March 31, 2017
OR
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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.)
  
1925 West Field Court, Lake Forest, Illinois 60045
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number: (847) 498-7070
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  þ    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).
Yes  þ    No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer  þ
 
Accelerated filer  ¨
 
Non-accelerated filer ¨
 
Smaller reporting company  ¨
    (Do not check if a 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. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  ¨   No   þ 
Number of shares of common stock of IDEX Corporation outstanding as of October 18, 2016: 76,242,245.
April 19, 2017: 76,307,919.
 



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TABLE OF CONTENTS
 
 
Item 1.
 
 
 
 
 
 
Item 2.
 
 
 
 
 
Item 3.
Item 4.
  
 
Item 1.
Item 2.
Item 6.


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PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements.

IDEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share amounts)
(unaudited)
 
September 30, 2016 December 31, 2015March 31, 2017 December 31, 2016
ASSETS      
Current assets      
Cash and cash equivalents$239,397
 $328,018
$216,095
 $235,964
Receivables, less allowance for doubtful accounts of $8,753 at September 30, 2016 and $7,812 at December 31, 2015287,329
 260,000
Inventories — net276,013
 239,124
Receivables, less allowance for doubtful accounts of $7,483 at March 31, 2017 and $8,078 at December 31, 2016294,707
 272,813
Inventories257,900
 252,859
Other current assets54,614
 35,542
54,978
 61,085
Total current assets857,353
 862,684
823,680
 822,721
Property, plant and equipment — net261,092
 240,945
250,114
 247,816
Goodwill1,662,892
 1,396,529
1,645,565
 1,632,592
Intangible assets — net462,430
 287,837
428,583
 435,504
Other noncurrent assets18,697
 17,448
15,843
 16,311
Total assets$3,262,464
 $2,805,443
$3,163,785
 $3,154,944
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current liabilities      
Trade accounts payable$117,430
 $128,911
$135,462
 $128,933
Accrued expenses160,816
 153,672
142,670
 152,852
Notes payable and current portion of long-term borrowings1,171
 1,087
Short-term borrowings323
 1,046
Dividends payable25,940
 25,927

 26,327
Total current liabilities305,357
 309,597
278,455
 309,158
Long-term borrowings1,099,601
 839,707
950,283
 1,014,235
Deferred income taxes182,688
 110,483
171,438
 166,427
Other noncurrent liabilities120,075
 102,365
122,304
 121,230
Total liabilities1,707,721
 1,362,152
1,522,480
 1,611,050
Commitments and contingencies
 

 
Shareholders’ equity      
Preferred stock:      
Authorized: 5,000,000 shares, $.01 per share par value; Issued: None
 

 
Common stock:      
Authorized: 150,000,000 shares, $.01 per share par value      
Issued: 90,202,449 shares at September 30, 2016 and 90,151,131 shares at December 31, 2015902
 902
Issued: 90,190,717 shares at March 31, 2017 and 90,200,951 shares at December 31, 2016902
 902
Additional paid-in capital692,730
 679,623
702,644
 697,213
Retained earnings1,803,060
 1,666,680
1,910,638
 1,834,739
Treasury stock at cost: 13,907,807 shares at September 30, 2016 and 13,616,592 shares at December 31, 2015(794,364) (757,416)
Treasury stock at cost: 13,636,301 shares at March 31, 2017 and 13,760,266 shares at December 31, 2016(794,442) (787,307)
Accumulated other comprehensive income (loss)(147,585) (146,498)(178,437) (201,653)
Total shareholders’ equity1,554,743
 1,443,291
1,641,305
 1,543,894
Total liabilities and shareholders’ equity$3,262,464
 $2,805,443
$3,163,785
 $3,154,944
See Notes to Condensed Consolidated Financial Statements

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IDEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
 
Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 Three Months Ended 
 March 31,
2016 2015 2016 2015 2017 2016
Net sales$530,356
 $503,791
 $1,582,624
 $1,520,870
 $553,552
 $502,572
Cost of sales299,467
 280,531
 884,342
 839,954
 302,611
 279,237
Gross profit230,889
 223,260
 698,282
 680,916
 250,941
 223,335
Selling, general and administrative expenses119,965
 114,794
 371,825
 360,784
 130,473
 119,990
Restructuring expenses
 4,723
 
 4,723
 4,797
 
Loss (gain) on sale of businesses - net2,067
 (18,070) 2,067
 (18,070)
Operating income108,857
 121,813
 324,390
 333,479
 115,671
 103,345
Other (income) expense - net(2,364) (693) (4,982) (1,589) (308) 44
Interest expense11,913
 10,229
 33,607
 31,410
 11,552
 10,489
Income before income taxes99,308
 112,277
 295,765
 303,658
 104,427
 92,812
Provision for income taxes29,435
 32,772
 82,003
 88,614
 28,528
 24,682
Net income$69,873
 $79,505
 $213,762
 $215,044
 $75,899
 $68,130
           
Basic earnings per common share$0.92
 $1.03
 $2.81
 $2.77
 $0.99
 $0.90
Diluted earnings per common share$0.91
 $1.02
 $2.78
 $2.75
 $0.99
 $0.89
           
Share data:           
Basic weighted average common shares outstanding75,819
 76,831
 75,753
 77,431
 76,115
 75,749
Diluted weighted average common shares outstanding76,880
 77,646
 76,742
 78,266
 76,894
 76,699
See Notes to Condensed Consolidated Financial Statements

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IDEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 Three Months Ended 
 March 31,
2016 2015 2016 2015 2017 2016
Net income$69,873
 $79,505
 $213,762
 $215,044
 $75,899
 $68,130
Other comprehensive income (loss)           
Reclassification adjustments for derivatives, net of tax1,082
 1,114
 3,272
 3,370
 1,042
 1,097
Pension and other postretirement adjustments, net of tax594
 818
 1,856
 2,418
 1,124
 671
Cumulative translation adjustment353
 (16,936) (10,473) (49,830) 21,050
 16,217
Reclassification of foreign currency translation to earnings upon sale of subsidiaries4,258
 (4,725) 4,258
 (4,725)
Other comprehensive income (loss)6,287
 (19,729) (1,087) (48,767) 23,216
 17,985
Comprehensive income$76,160
 $59,776
 $212,675
 $166,277
 $99,115
 $86,115
See Notes to Condensed Consolidated Financial Statements

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IDEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands except share amounts)
(unaudited)
 
     
Accumulated Other Comprehensive
Income (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
Balance, December 31, 2015$680,525
 $1,666,680
 $(92,979) $(30,901) $(22,618) $(757,416) $1,443,291
Net income
 213,762
 
 
 
 
 213,762
Cumulative translation adjustment
 
 (6,215) 
 
 
 (6,215)
Net change in retirement obligations (net of tax of $964)
 
 
 1,856
 
 
 1,856
Net change on derivatives designated as cash flow hedges (net of tax of $1,872)
 
 
 
 3,272
 
 3,272
Issuance of 447,378 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options251
 
 
 
 
 22,901
 23,152
Repurchase of 738,593 shares of common stock
 
 
 
 
 (54,950) (54,950)
Unvested shares surrendered for tax withholding
 
 
 
 
 (4,899) (4,899)
Share-based compensation12,856
 
 
 
 
 
 12,856
Cash dividends declared - $1.02 per common share outstanding
 (77,382) 
 
 
 
 (77,382)
Balance, September 30, 2016$693,632
 $1,803,060
 $(99,194) $(29,045) $(19,346) $(794,364) $1,554,743
     
Accumulated Other Comprehensive
Income (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
Balance, December 31, 2016$698,115
 $1,834,739
 $(155,544) $(27,852) $(18,257) $(787,307) $1,543,894
Net income
 75,899
 
 
 
 
 75,899
Cumulative translation adjustment
 
 21,050
 
 
 
 21,050
Net change in retirement obligations (net of tax of $552)
 
 
 1,124
 
 
 1,124
Net change on derivatives designated as cash flow hedges (net of tax of $635)
 
 
 
 1,042
 
 1,042
Issuance of 205,965 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $4,221)

 
 
 
 
 6,074
 6,074
Repurchase of 82,000 shares of common stock
 
 
 
 
 (7,562) (7,562)
Unvested shares surrendered for tax withholding
 
 
 
 
 (5,647) (5,647)
Share-based compensation5,431
 
 
 
 
 
 5,431
Balance, March 31, 2017$703,546
 $1,910,638
 $(134,494) $(26,728) $(17,215) $(794,442) $1,641,305
See Notes to Condensed Consolidated Financial Statements

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IDEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended September 30,Three Months Ended March 31,
2016 20152017 2016
Cash flows from operating activities      
Net income$213,762
 $215,044
$75,899
 $68,130
Adjustments to reconcile net income to net cash provided by operating activities:      
Loss (gain) on sale of businesses - net2,067
 (18,070)
Depreciation and amortization28,360
 26,634
8,903
 9,067
Amortization of intangible assets35,964
 31,340
11,789
 10,890
Amortization of debt issuance costs1,150
 1,233
329
 378
Share-based compensation expense15,325
 14,735
6,159
 6,442
Deferred income taxes4,880
 1,473
1,293
 2,950
Excess tax benefit from share-based compensation
 (4,350)
Non-cash interest expense associated with forward starting swaps5,144
 5,287
1,677
 1,724
Changes in (net of effect from acquisitions and divestitures):   
Changes in (net of effect from acquisitions):   
Receivables(2,178) (1,417)(20,058) (19,267)
Inventories22,250
 (6,474)(2,761) (270)
Other current assets(18,276) (2,742)6,570
 (6,597)
Trade accounts payable(16,696) (4,002)5,188
 6,451
Accrued expenses(2,982) 2,067
(11,565) (6,641)
Other - net(4,446) 1,023
1,556
 (2,892)
Net cash flows provided by operating activities284,324
 261,781
84,979
 70,365
Cash flows from investing activities      
Additions of property, plant and equipment(28,642) (32,611)(10,162) (8,650)
Acquisition of businesses, net of cash acquired(510,001) (193,163)
 (221,556)
Proceeds from sale of businesses, net of cash sold32,529
 27,677
Other - net(73) 647
546
 91
Net cash flows used in investing activities(506,187) (197,450)
Net cash flows (used in) investing activities(9,616) (230,115)
Cash flows from financing activities      
Borrowings under revolving facilities460,524
 383,621
13,000
 275,391
Proceeds from 3.20% Senior Notes100,000
 
Proceeds from 3.37% Senior Notes100,000
 
Payments under revolving facilities(402,172) (295,934)(80,224) (20,994)
Payment of 2.58% Senior Euro Notes
 (88,420)
Debt issuance costs(246) (1,698)
Dividends paid(77,367) (71,673)(26,327) (24,662)
Proceeds from stock option exercises23,154
 15,167
6,074
 8,258
Excess tax benefit from share-based compensation
 4,350
Purchase of common stock(57,272) (177,772)(7,005) (46,864)
Shares surrendered for tax withholding(4,899) (3,217)
Unvested shares surrendered for tax withholding(5,647) (4,717)
Other - net738
 
Net cash flows provided by (used in) financing activities141,722
 (235,576)(99,391) 186,412
Effect of exchange rate changes on cash and cash equivalents(8,480) (31,410)4,159
 3,765
Net increase (decrease) in cash(88,621) (202,655)(19,869) 30,427
Cash and cash equivalents at beginning of year328,018
 509,137
235,964
 328,018
Cash and cash equivalents at end of period$239,397
 $306,482
$216,095
 $358,445
      
Supplemental cash flow information      
Cash paid for:      
Interest$18,261
 $18,069
$760
 $965
Income taxes - net77,250
 70,217
5,888
 9,516
Significant non-cash activities:   
Contingent consideration for acquisition
 4,705
See Notes to Condensed Consolidated Financial Statements

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IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)

1.    Basis of Presentation and Significant Accounting Policies
The Condensed Consolidated Financial Statements of IDEX Corporation (“IDEX,” “we,” “our,” 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 nine months ended September 30, 2016March 31, 2017 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, 20152016.
Recently Adopted Accounting Standards
In March 2016,2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09,2017-07, ImprovementsImproving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends the requirements related to Employee Share-Based Payment Accounting, which simplifies several aspectsthe income statement presentation of the accountingcomponents of net periodic benefit cost for employee share-based payment transactions, includinga company’s sponsored defined benefit pension and other postretirement plans. Under this ASU, companies are required to disaggregate the accountingcurrent service cost component from the other components of net benefit cost and present it with other current compensation costs for income taxes, forfeitures, and statutory tax withholding requirements, as well as classificationrelated employees in the income statement and present the other components elsewhere in the income statement and outside of cash flows.income from operations if such a subtotal is presented. This ASU also requires companies to disclose the income statement lines that contain the other components if they are not presented on appropriately described separate lines. In addition, only the service cost component of periodic net benefit cost is eligible for capitalization. The Company elected to early adopt this standard in the quarter ended March 31, 2016.2017 as presenting the service cost within income from operations is more indicative of our current pension cost. The Company appliedadopted this standard prospectivelyretrospectively and thus prior periods have not been adjusted.
The impact of the adoption resulted in the following:
The Company recorded a tax benefit of $1.2$0.8 million was reclassified from Selling, general and $5.4 million within Provision for income taxesadministrative expenses to Other (income) expense - net for the three and nine months ended September 30,March 31, 2016 respectively, related to the excess tax benefit on stock options, restricted stock and performance share units. Priorconform to adoption this amount would have been recorded as a reduction of additional paid-in capital. This change could create volatility in the Company’s effective tax rate.
current period presentation. The Company elected not to change our policy on accounting for forfeituresapply the practical expedient that permits the use of previously disclosed service cost and continued to estimateother costs from the total numberprior year’s pension and other postretirement benefit plan footnote in the comparative periods as appropriate estimates when retrospectively changing the presentation of awards for whichthese costs in the requisite service period will not be rendered.
income statement. The Company no longer reclassifiesincluded the excess tax benefit from operating activities to financing activities inrequired disclosures and the statement of cash flows.
The Company excluded the excess tax benefitschanges resulting from the assumed proceeds available to repurchase sharesadoption of this standard in the computation of our diluted earnings per share for the three and nine months ended September 30, 2016. This increased our diluted weighted average common shares outstanding by 198 thousand and 174 thousand shares for the three and nine months ended September 30, 2016, respectively.
Recently Issued Accounting StandardsNote 16.
In August 2016,January 2017, the FASB issued ASU 2016-15,2017-04, ClassificationSimplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test. Under this ASU, if the carrying amount of Certain Cash Receiptsa reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to the excess, limited to the total amount of goodwill allocated to the reporting unit. This ASU also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, Cash Payments (a consensusif it fails that qualitative test, to perform Step 2 of the FASB Emerging Issues Task Force). This ASU addressesgoodwill impairment test. In addition, companies will be required to disclose the following eight specific cash flow issues: Debt prepaymentamount of goodwill allocated to each reporting unit with a zero or debt extinguishment costs; settlementnegative carrying amount of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. Thisnet assets. The Company early adopted this standard is effective for fiscal years beginning after December 15,on January 1, 2017. The Company doesadoption of this standard did not believe the guidance will have a material impact on our consolidated financial statements.

In February 2016,July 2015, the FASB issued ASU 2016-02,2015-11, LeasesSimplifying the Measurement of Inventory, which introduces a new lessee model that will require most leases to be recorded on. Under this guidance, entities utilizing the balance sheetFIFO or average cost method should measure inventory at the lower of cost or net realizable value, whereas net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and eliminates the required use of bright line tests in current U.S. GAAP for determining lease classification. This standard is effective for fiscal years beginning after December 15, 2018.transportation. The Company is currently evaluating theadopted this guidance on January 1, 2017. The adoption of this standard did not have a material impact of the new guidance on our consolidated financial statements.
Recently Issued Accounting Standards
In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, which clarifies the definition of a business and assists entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. Under this guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset or group of similar assets, the assets acquired would not represent a business. In addition, in order to be considered a business, an acquisition would have to include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The amended guidance also narrows the definition of outputs by more closely aligning it with how outputs are described in FASB guidance for revenue recognition. This guidance is effective for interim and annual periods for the

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IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)



Company on January 1, 2018, with early adoption permitted. The Company does not believe the guidance will have a material impact on its consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The standard introduces a new lessee model that will require most leases to be recorded on the balance sheet and eliminates the required use of bright line tests in current U.S. GAAP for determining lease classification. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. This standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Companies are permitted to adopt the standard early and a modified retrospective application is required. The Company is currently evaluating the impact of adopting the new guidance on its consolidated financial statements.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers,, which introduceswill replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a new five-step
model for recognizing revenue recognition model.from contracts with customers. Under ASU 2014-09, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption. The FASB has also issued the following standards which clarify ASU 2014-09 and have the same effective date as the original standard: ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net); ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing; and ASU 2016-12,Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients.; and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.
In 2016, we established an implementation team and analyzed the impact of the standard by surveying business units and reviewing contracts to identify potential differences that may result from applying the requirements of the new standard. We made significant progress on our contract reviews during 2016 and the first quarter of 2017. While we are continuing to assess all potential impacts of the new standard, we currently believe that the most significant potential change relates to contracts for the development, manufacture and sale of customized products in our Health & Science Technologies segment. Due to the complexity of certain contracts in our Health & Science Technologies segment, the actual revenue recognition treatment required under the standard will be dependent on contract-specific terms. However, under the new standard we expect revenue recognition to remain substantially unchanged as the contract reviews support the recognition of revenue at a point in time, which is consistent with our current revenue recognition model. We also expect revenue recognition related to the Fluid & Metering Technologies segment and the Fire & Safety/Diversified Products segment to remain substantially unchanged. The implementation team has reported these initial findings and progress of the project to the Audit Committee. The Company is currentlystill evaluating the impact of the new guidance on ourits consolidated financial statements and has not yet determined the method by which weit will adopt the standard in 2018.

2.    Acquisitions and Divestitures
All of the Company’s acquisitions have been accounted for under FASB Accounting Standards Codification (“ASC”)ASC 805, Business Combinations. Accordingly, the accounts of the acquired companies, after adjustments to reflect fair values assigned to assets and liabilities, have been included in the Company’s consolidated financial statements from their respective dates of acquisition.
The Company incurred $1.6$0.1 million and $0.9$1.0 million of acquisition-related transaction costs in the three months ended September 30,March 31, 2017 and 2016, and 2015, respectively, and $4.0 million and $2.1 million in the nine months ended September 30, 2016 and 2015, 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. During the three and nine months ended September 30,March 31, 2016, the Company recorded $4.6$2.2 million and $10.4 million, respectively, of fair value inventory step-up charges in Cost of sales associated with the completed 2016 acquisitions. During the threeacquisition of Akron Brass Holding Corporation (“Akron Brass”).

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and nine months ended September 30, 2015, the Company recorded within Cost of sales $2.7 million and $3.4 million, respectively, of fair value inventory charges associated with completed 2015 acquisitions.where otherwise indicated)
(unaudited)



2016 Acquisitions
On March 16, 2016, the Company acquired the stock of Akron Brass, Holding Corporation (“Akron Brass”), a producer of a large array of engineered life–safety products for the safety and emergency response markets, which includes apparatus valves, monitors, nozzles, specialty lighting, electronic vehicle–control systems and firefighting hand tools. The business was acquired to complement and create synergies with our existing Hale, Class 1, and Godiva businesses. Headquartered in Wooster, Ohio, Akron Brass had annual revenues in its most recent fiscal year of approximately $120 million and operates in our Fire & Safety/Diversified Products segment. Akron Brass was acquired for cash consideration of $221.4 million. The purchase price was funded with borrowings under the Company’s revolving facilities. GoodwillThe final goodwill and intangible assets recognized as part of the transaction were $125.1$124.6 million and $90.4 million, respectively. The goodwill is not deductible for tax purposes.
On July 1, 2016, the Company acquired the stock of AWG Fittings GmbH (“AWG Fittings”), a producer of engineered products for the safety and emergency response markets, including valves, monitors and nozzles. The business was acquired to complement and create synergies with our existing Hale, Class 1, Godiva and Akron Brass businesses. Headquartered in Ballendorf, Germany, AWG Fittings had annual revenues in its most recent fiscal year of approximately $40 million and operates in our Fire & Safety/Diversified Products segment. AWG Fittings was acquired for cash consideration of $47.5 million (€42.8 million). The purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of the transaction were $22.7$22.1 million and $10.3 million, respectively. The goodwill is not deductible for tax purposes.
On August 31, 2016, the Company acquired the stock of SFC Koenig AG (“SFC Koenig”), a producer of highly engineered expanders and check valves for critical applications across the transportation, hydraulic, aviation and medical markets. Headquartered in Dietikon, Switzerland, SFC Koenig had annual revenues in its most recent fiscal year of approximately $63 million and operates in our Health & Science Technologies segment. SFC Koenig was acquired for cash consideration of $241.1 million (€215.9 million). The purchase price was funded with cash on hand and borrowings under the Company’s revolving

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



facilities. Goodwill and intangible assets recognized as part of the transaction were $132.4$144.4 million and $114.7$117.0 million, respectively. The goodwill is not deductible for tax purposes.
The Company made initial allocationsis continuing to evaluate the valuation of certain income tax liabilities associated with the SFC Koenig acquisition and is in the process of finalizing the purchase price for the Akron Brass, AWG Fittings and SFC Koenig acquisitions as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. As the Company obtains additional information about these assets and liabilities and learns more about the newly acquired businesses, we 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.allocation. The Company will make appropriate adjustments to the purchase price allocationallocations prior to the completion of the measurement period, as required.
The preliminary allocation Only items identified as of the acquisition costs to the assets acquired and liabilities assumed, based on their estimated fair values, are as follows:
  Akron Brass AWG Fittings SFC Koenig Total
Current assets, net of cash acquired $44,126
 $18,317
 $35,568
 $98,011
Property, plant and equipment 12,195
 6,847
 6,566
 25,608
Goodwill 125,090
 22,733
 132,381
 280,204
Intangible assets 90,400
 10,279
 114,737
 215,416
Deferred income taxes 
 2,524
 
 2,524
Total assets acquired 271,811
 60,700
 289,252
 621,763
Current liabilities (7,081) (4,762) (12,858) (24,701)
Deferred income taxes (36,886) 
 (29,809) (66,695)
Other noncurrent liabilities (6,445) (8,444) (5,477) (20,366)
Net assets acquired $221,399
 $47,494
 $241,108
 $510,001
Acquired intangible assets consist of trade names, customer relationships and unpatented technology. The goodwill recordeddate will be considered for the acquisitions reflect the strategic fit, revenue and earnings growth potential of these businesses.
Of the $215.4 million of acquired intangible assets, $28.8 million was assigned to the Akron Brass trade name and is not subject to amortization. The acquired intangible assets and weighted average amortization periods are as follows:
 Total Weighted Average Life
Trade names$14,423
 15
Customer relationships130,598
 13
Unpatented technology41,595
 13
Amortized intangible assets186,616
  
Indefinite lived - Akron Brass trade name28,800
  
Total acquired intangible assets$215,416
  

2015 Acquisitions
On May 29, 2015, the Company acquired the stock of Novotema, SpA (“Novotema”), a leader in the design, manufacture and sale of specialty sealing solutions for use in the building products, gas control, transportation, industrial and water markets. The business was acquired to complement and create synergies with our existing Sealing Solutions platform. Located in Villongo, Italy, Novotema operates in our Health & Science Technologies segment. Novotema was acquired for cash consideration of $61.1 million (€56 million). The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $34.3 million and $20.0 million, respectively. The $34.3 million of goodwill is not deductible for tax purposes.
On June 10, 2015, the Company acquired the stock of Alfa Valvole, S.r.l (“Alfa”), a leader in the design, manufacture and sale of specialty valve products for use in the chemical, petro-chemical, energy and sanitary markets. The business was acquired

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



to expand our valve capabilities. Located in Casorezzo, Italy, Alfa operates in our Fluid & Metering Technologies segment. Alfa was acquired for cash consideration of $112.6 million (€99.8 million). The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $69.6 million and $32.1 million, respectively. The $69.6 million of goodwill is not deductible for tax purposes.
On July 1, 2015, the Company acquired the membership interests of CiDRA Precision Services, LLC (“CPS”), a leader in the design, manufacture and sale of microfluidic components serving the life science, health and industrial markets. The business was acquired to provide a critical building block to our emerging microfluidic and nanofluidics capabilities. Located in Wallingford, Connecticut, CPS operates within our Health & Sciences Technologies segment. CPS was acquired for an aggregate purchase price of $24.2 million, consisting of $19.5 million in cash and contingent consideration valued at $4.7 million as of the opening balance sheet date. The contingent consideration was based on the achievement of financial objectives during the 12-month period following the close. Based on potential outcomes, the undiscounted amount of all the future payments that the Company could have been required to make under the contingent consideration arrangement was between $0 and $5.5 million. During the six months ended June 30, 2016, the Company re-evaluated the contingent consideration arrangement and fully reversed the $4.7 million liability based on CPS’s actual operating results from July 1, 2015 to June 30, 2016. The $4.7 million reversal was recognized as a benefit within Selling, general and administrative expenses, of which $3.7 million was recognized in March 2016 and the remaining $1.0 million was recognized in June 2016. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $9.7 million and $12.3 million, respectively. The $9.7 million of goodwill is deductible for tax purposes.
On December 1, 2015 the Company acquired the assets of a complementary product line within our Fluid & Metering Technologies segment. The purchase price and goodwill associated with this transaction were $1.9 million and $0.7 million, respectively.subsequent adjustment.
2016 Divestitures
The Company periodically reviews its operations for businesses which may no longer be aligned with its strategic objectives and focus on core business and customers. Any resulting gain or loss recognized due to divestitures is recorded on the Consolidated Statement of Operations within Loss (gain) on sale of businesses - net.
On July 29, 2016, the Company completed the sale of its Hydra-Stop product line for $15.0 million in cash, resulting in a pre-tax gain on the sale of $5.8 million. In addition, the Company can earn up to $2 million based on the achievement of financial objectives for net sales in 2016 and 2017.  The Company earned $1.0 million for the achievement of 2016 net sales objectives, which represents the maximum earn out for 2016. The Company can earn an additional $1.0 million based on 2017 net sales. The results of Hydra-Stop were reported within the Fluid & Metering Technologies segment as part of the Water platform, and generated $7.5 million of revenues in 2016 through the date of sale.
On September 9, 2016, the Company completed the sale of its Melles Griot KK (“CVI Japan”) subsidiary for $17.5 million in cash, resulting in a pre-tax loss on the sale of $7.9 million. The results of Melles Griot KKCVI Japan were reported within the Health & Science Technologies segment as part of the IDEX Optics and Photonics platform, and generated $13.1 million of revenues in 2016 through the date of sale.
2015 Divestitures
On July 31, 2015,October 10, 2016, the Company completed the sale of its Ismatec product lineIETG and 40Seven subsidiaries for $27.7$2.7 million in cash, resulting in a pre-tax gainloss on the sale of $18.1$4.2 million. The results of IsmatecIETG and 40Seven were reported within the Fluid & Metering Technologies segment and generated $8.3 million of revenues in 2016 through the date of sale.
On December 30, 2016, the Company completed the sale of its Korea Electro-Optics Co., Ltd. (“CVI Korea”) subsidiary for $3.8 million in cash, resulting in a pre-tax loss on the sale of $16.0 million. The results of CVI Korea were reported within the Health & Science Technologies segment as part of the Scientific Fluidics platform, and generated $5.3$11.7 million of revenues in 20152016 through the date of sale.


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



3.    Business Segments
The Company has three reportable business segments: Fluid & Metering Technologies, Health & Science Technologies and Fire & Safety/Diversified Products.
The Fluid & Metering Technologies segment designs, produces and distributes positive displacement pumps, valves, 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 & wastewater, agriculture and wastewaterenergy industries. The Health & Science Technologies segment designs, produces and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems used in beverage, food processing, pharmaceutical and cosmetics, pneumatic components and sealing solutions, including very high precision, low-flow rate pumping solutions required in analytical instrumentation, clinical diagnostics and drug discovery, high performance molded and extruded sealing components, biocompatible medical devices and implantables, air compressors used in medical, dental and industrial applications,

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



optical components and coatings for applications in the fields of scientific research, defense, biotechnology, aerospace, semi-conductor, telecommunications and electronics manufacturing, laboratory and commercial equipment used in the production of micro and nano scale materials, precision photonic solutions used in life sciences, research and defense markets, and precision gear and peristaltic pump technologies that meet exacting original equipment manufacturer specifications. The Fire & Safety/Diversified Products segment produces firefighting pumps and controls, apparatus valves, monitors, nozzles, rescue tools, lifting bags and other components and systems for the fire and rescue industry, engineered stainless steel banding and clamping devices used in a variety of industrial and commercial applications, and precision equipment for dispensing, metering and mixing colorants and paints used in a variety of retail and commercial businesses around the world.
Information on the Company’s business segments is presented below, based on the nature of products and services offered. The Company evaluates performance based on several factors, of which operating income is the primary financial measure. Intersegment sales are accounted for as if the sales were to third parties.
 
 Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 2016 2015 2016 2015
Net sales       
Fluid & Metering Technologies       
External customers$208,164
 $211,971
 $641,508
 $644,886
Intersegment sales171
 130
 480
 756
Total group sales208,335
 212,101
 641,988
 645,642
Health & Science Technologies       
External customers183,453
 184,816
 556,157
 550,612
Intersegment sales111
 77
 318
 1,806
Total group sales183,564
 184,893
 556,475
 552,418
Fire & Safety/Diversified Products       
External customers138,739
 107,004
 384,959
 325,372
Intersegment sales28
 5
 37
 200
Total group sales138,767
 107,009
 384,996
 325,572
Intersegment elimination(310) (212) (835) (2,762)
Total net sales$530,356
 $503,791
 $1,582,624
 $1,520,870
Operating income       
Fluid & Metering Technologies$55,600
 $46,910
 $160,866
 $154,665
Health & Science Technologies37,204
 38,371
 119,028
 117,888
Fire & Safety/Diversified Products32,189
 32,536
 91,709
 91,180
Corporate office income (expense) and other (1)
(16,136) 3,996
 (47,213) (30,254)
Total operating income108,857
 121,813
 324,390
 333,479
Interest expense11,913
 10,229
 33,607
 31,410
Other (income) expense - net(2,364) (693) (4,982) (1,589)
Income before income taxes$99,308
 $112,277
 $295,765
 $303,658
(1) 2016 includes a $2.1 million loss on sale of businesses and 2015 includes an $18.1 million gain on the sale of business.


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



September 30,
2016
 December 31,
2015
 Three Months Ended 
 March 31,
Assets   
 2017 
2016 (1)
Net sales    
Fluid & Metering Technologies    
External customers $216,655
 $211,709
Intersegment sales 115
 134
Total group sales 216,770
 211,843
Health & Science Technologies    
External customers 199,575
 186,251
Intersegment sales 104
 92
Total group sales 199,679
 186,343
Fire & Safety/Diversified Products    
External customers 137,322
 104,612
Intersegment sales 125
 6
Total group sales 137,447
 104,618
Intersegment elimination (344) (232)
Total net sales $553,552
 $502,572
Operating income    
Fluid & Metering Technologies$1,084,118
 $1,125,266
 $57,813
 $51,703
Health & Science Technologies1,323,130
 1,108,302
 42,238
 40,682
Fire & Safety/Diversified Products741,427
 448,867
 32,626
 25,654
Corporate office113,789
 123,008
Total assets$3,262,464
 $2,805,443
Corporate office expense and other (2)
 (17,006) (14,694)
Total operating income 115,671
 103,345
Interest expense 11,552
 10,489
Other (income) expense - net (308) 44
Income before income taxes $104,427
 $92,812
(1) Certain amounts in the prior year income statement have been reclassified to conform to the current presentation due to the early adoption of ASU 2017-07.
(1) Certain amounts in the prior year income statement have been reclassified to conform to the current presentation due to the early adoption of ASU 2017-07.
(2) Corporate office expense for the three months ended March 31, 2016 includes a $3.7 million benefit from the reversal of the contingent consideration related to a 2015 acquisition.
(2) Corporate office expense for the three months ended March 31, 2016 includes a $3.7 million benefit from the reversal of the contingent consideration related to a 2015 acquisition.

 March 31,
2017
 December 31,
2016
Assets   
Fluid & Metering Technologies$1,079,230
 $1,065,670
Health & Science Technologies1,281,976
 1,266,036
Fire & Safety/Diversified Products709,135
 705,735
Corporate office93,444
 117,503
Total assets$3,163,785
 $3,154,944


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



4.    Earnings Per Common Share
Earnings per common share (“EPS”) are computed by dividing net income 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, and shares issuable in connection with certain deferred compensation agreements (“DCUs”).units.
ASC 260, Earnings Per Share, provides that all outstanding unvested share-based payment awards that contain rights to nonforfeitable 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, earnings per common share are computed using the more dilutive of the treasury stock method and the two-class method prescribed by ASC 260.
Basic weighted average shares reconciles to diluted weighted average shares as follows:
 
Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 Three Months Ended 
 March 31,
2016 2015 2016 2015 2017 2016
Basic weighted average common shares outstanding75,819
 76,831
 75,753
 77,431
 76,115
 75,749
Dilutive effect of stock options, restricted stock, performance share units and DCUs1,061
 815
 989
 835
Dilutive effect of stock options, restricted stock, and performance share units 779
 950
Diluted weighted average common shares outstanding76,880
 77,646
 76,742
 78,266
 76,894
 76,699
Options to purchase approximately 0.10.3 million and 0.91.4 million shares of common stock for the three and nine months ended September 30,March 31, 2017, and 2016, respectively, and 0.9 million and 0.5 million shares of common stock for the three and nine months ended September 30, 2015 were not included in the computation of diluted EPS because the effect of their inclusion would be antidilutive.

5.    Inventories
The components of inventories as of September 30, 2016March 31, 2017 and December 31, 20152016 were:
 
September 30,
2016
 December 31,
2015
March 31,
2017
 December 31,
2016
Raw materials and component parts$166,205
 $141,671
$158,236
 $154,278
Work in process37,001
 32,387
38,460
 34,832
Finished goods72,807
 65,066
61,204
 63,749
Total$276,013
 $239,124
$257,900
 $252,859
Inventories are stated at the lower of cost or market.net realizable value. Cost, which includes material, labor and factory overhead, is determined on a FIFO basis.


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



6.    Goodwill and Intangible Assets
The changes in the carrying amount of goodwill for the ninethree months ended September 30, 2016March 31, 2017, by reportable business segment, were as follows:
 
 
Fluid &
Metering
Technologies
 
Health &
Science
Technologies
 
Fire & Safety/
Diversified
Products
 Total
Balance at December 31, 2015$584,770
 $590,605
 $221,154
 $1,396,529
Foreign currency translation3,151
 (4,820) 1,638
 (31)
Acquisitions
 132,381
 147,823
 280,204
Disposition of businesses(3,594) (9,140) 
 (12,734)
Acquisition adjustments(1,623) 547
 
 (1,076)
Balance at September 30, 2016$582,704
 $709,573
 $370,615
 $1,662,892
 
Fluid &
Metering
Technologies
 
Health &
Science
Technologies
 
Fire & Safety/
Diversified
Products
 Total
Balance at December 31, 2016$573,437
 $699,299
 $359,856
 $1,632,592
Foreign currency translation3,068
 5,732
 3,474
 12,274
Acquisition adjustments
 636
 63
 699
Balance at March 31, 2017$576,505
 $705,667
 $363,393
 $1,645,565
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 months of 2017, there were no events or 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 our annual impairment test at October 31, 2015,2016, all reporting units had a fair value that was more than 70% greater than the carrying value, except for our IDEX Optics and Photonics (“IOP”) and Valves reporting units. Our IOP reporting unit had a fair value that was approximately 20% in excess of the carrying value and our Valves reporting unit had a fair value near its carrying value as a result of the formation of this reporting unit in conjunction with our Alfa acquisition in June 2015. Due to the divestitures in the third quarter of 2016, the Company performed interim impairment tests at the Water and IOP reporting units. As a result of these interim impairment tests, the Company concluded that both reporting units had fair values in excess of their carrying values. The WaterIn addition to performing our annual impairment test, we also performed interim impairment tests due to the divestitures in the third and fourth quarters of 2016 as well as the reorganization of certain reporting unitunits. As a result of these impairment tests, the Company concluded that the reporting units had a fair value that was significantlyvalues in excess of itstheir carrying value and the IOP reporting unit had a fair value thatvalues, which was approximately 20% in excess of its carrying value, both of which are consistent with our annual impairment test at October 31, 2015.2016.

     The following table provides the gross carrying value and accumulated amortization for each major class of intangible assets at September 30, 2016March 31, 2017 and December 31, 20152016:
 
At September 30, 2016   At December 31, 2015At March 31, 2017   At December 31, 2016
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:                      
Patents$10,180
 $(6,772) $3,408
 11 $10,202
 $(6,175) $4,027
$9,863
 $(6,809) $3,054
 11 $9,856
 $(6,635) $3,221
Trade names118,983
 (42,190) 76,793
 16 110,658
 (38,696) 71,962
114,403
 (44,714) 69,689
 16 113,428
 (42,653) 70,775
Customer relationships384,141
 (162,524) 221,617
 12 257,071
 (144,134) 112,937
334,735
 (130,996) 203,739
 12 369,087
 (161,065) 208,022
Non-compete agreements
 
 
 3 794
 (775) 19
Unpatented technology117,455
 (48,281) 69,174
 11 78,562
 (42,745) 35,817
102,260
 (41,392) 60,868
 12 106,747
 (44,516) 62,231
Other6,599
 (6,061) 538
 10 6,554
 (5,579) 975
829
 (496) 333
 10 6,527
 (6,172) 355
Total amortized intangible assets637,358
 (265,828) 371,530
 463,841
 (238,104) 225,737
562,090
 (224,407) 337,683
 605,645
 (261,041) 344,604
Indefinite lived intangible assets:                      
Banjo trade name62,100
 
 62,100
 62,100
 
 62,100
62,100
 
 62,100
 62,100
 
 62,100
Akron Brass trade name28,800
 
 28,800
 
 
 
28,800
 
 28,800
 28,800
 
 28,800
Total intangible assets$728,258
 $(265,828) $462,430
 $525,941
 $(238,104) $287,837
$652,990
 $(224,407) $428,583
 $696,545
 $(261,041) $435,504
The Banjo trade name is an indefinite livedindefinite-lived intangible asset which is tested for impairment on an annual basis in accordance with ASC 350 or more frequently if events or changes in circumstances indicate that the asset might be impaired. In the first ninethree months of 2017, there were no events or circumstances that would have required an interim impairment test. Based on the results of our annual impairment test at October 31, 2016, the fair value of the Banjo trade name was greater than 25% in excess of the carrying value.
The Akron Brass trade name is an indefinite-lived intangible asset that was acquired as a result of the Akron Brass acquisition in March 2016 and is tested for impairment on an annual basis in accordance with ASC 350 or more frequently if events or changes in circumstances indicate that the asset might be impaired. In the first three months of 2017, there were no events or circumstances

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



months of 2016, there were no triggering events or changes that would have required a review.an interim impairment test. Based on the results of our annual impairment test at October 31, 2015,2016, the fair value of the Banjo trade name was greater than 20% in excess of the carrying value.
The Akron Brass trade name is an indefinite lived intangible asset that was generatednear its carrying value as a result of the Akron Brass acquisition of this business in March 2016 and it will be tested for impairment on an annual basis in accordance with ASC 350 or more frequently if events or changes in circumstances indicate that the asset might be impaired.2016.
Amortization of intangible assets was $12.8$11.8 million and $11.2$10.9 million for the three months ended September 30,March 31, 2017 and 2016, and 2015, respectively. Amortization of intangible assets was $28.4 million and $26.6 million for the nine months ended September 30, 2016 and 2015, respectively. Based on the intangible asset balances as of September 30, 2016,March 31, 2017, amortization expense is expected to approximate $14.0$31.7 million for the remaining threenine months of 2016, $40.3 million in 2017, $34.5$35.2 million in 2018, $33.0$33.2 million in 2019, and $32.2$32.0 million in 2020.2020 and $30.8 million in 2021.

7.    Accrued Expenses
The components of accrued expenses as of September 30, 2016March 31, 2017 and December 31, 20152016 were:
 
September 30,
2016
 December 31,
2015
March 31,
2017
 December 31,
2016
Payroll and related items$62,703
 $67,209
$54,041
 $67,600
Management incentive compensation13,755
 12,599
6,582
 16,339
Income taxes payable11,409
 3,836
13,393
 8,808
Insurance8,979
 9,505
9,420
 9,416
Warranty6,036
 7,936
5,887
 5,628
Deferred revenue11,200
 9,885
15,463
 12,607
Restructuring2,258
 6,636
4,148
 3,893
Liability for uncertain tax positions2,711
 3,498
2,359
 1,366
Accrued interest11,518
 1,230
10,449
 1,663
Contingent consideration for acquisition
 4,705
Other30,247
 26,633
20,928
 25,532
Total accrued expenses$160,816
 $153,672
$142,670
 $152,852

8.    Other Noncurrent Liabilities
The components of other noncurrent liabilities as of September 30, 2016March 31, 2017 and December 31, 20152016 were:
 
September 30,
2016
 December 31,
2015
March 31,
2017
 December 31,
2016
Pension and retiree medical obligations$98,422
 $76,190
$98,656
 $93,604
Liability for uncertain tax positions3,030
 4,252
2,079
 2,623
Deferred revenue1,828
 3,763
2,361
 2,442
Other16,795
 18,160
19,208
 22,561
Total other noncurrent liabilities$120,075
 $102,365
$122,304
 $121,230


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IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)



9.    Borrowings
Borrowings at September 30, 2016March 31, 2017 and December 31, 20152016 consisted of the following:
 
September 30,
2016
 December 31,
2015
March 31,
2017
 December 31,
2016
Revolving Facility$255,130
 $195,000
$105,342
 $169,579
4.5% Senior Notes, due December 2020300,000
 300,000
300,000
 300,000
4.2% Senior Notes, due December 2021350,000
 350,000
350,000
 350,000
3.2% Senior Notes, due June 2023100,000


100,000

100,000
3.37% Senior Notes, due June 2025100,000


100,000

100,000
Other borrowings1,562
 2,436
527
 1,294
Total borrowings1,106,692
 847,436
955,869
 1,020,873
Less current portion1,171
 1,087
323
 1,046
Less deferred debt issuance costs4,664
 5,203
4,133
 4,399
Less unaccreted debt discount1,256
 1,439
1,130
 1,193
Total long-term borrowings$1,099,601
 $839,707
$950,283
 $1,014,235
On June 13, 2016, the Company completed a private placement of $100 million aggregate principal amount of 3.20% Senior Notes due June 13, 2023 and $100 million aggregate principal amount of 3.37% Senior Notes due June 13, 2025 (collectively, the ���Notes”“Notes”) pursuant to a Note Purchase Agreement, dated June 13, 2016 (the “Purchase Agreement”). Each series of Notes bears interest at the stated amount per annum, which is payable semi-annually in arrears on each June 13th and December 13th. The Notes are unsecured obligations of the Company and rank pari passu in right of payment with all of the Company’s other unsecured, unsubordinated debt. The Company may at any time prepay all, or any portion of the Notes; provided that such portion is greater than 5% of the aggregate principal amount of Notes then outstanding. In the event of a prepayment, the Company will pay an amount equal to par plus accrued interest plus a make-whole amount. In addition, the Company may repurchase Notes by making an offer to all holders of the Notes, subject to certain conditions.
The Purchase Agreement contains certain covenants that restrict the Company’s ability to, among other things, transfer or sell assets, incur indebtedness, create liens, transact with affiliates and engage in certain mergers or consolidations or other change of control transactions. In addition, the Company must comply with a leverage ratio and interest coverage ratio, as further described below, and the Purchase Agreement also limits the outstanding principal amount of priority debt that may be incurred by the Company to 15% of consolidated assets. The Purchase Agreement provides for customary events of default. In the case of an event of default arising from specified events of bankruptcy or insolvency, all of the outstanding Notes will become due and payable immediately without further action or notice. In the case of payment event of default, any holder of the Notes affected thereby may declare all the Notes held by it due and payable immediately. In the case of any other event of default, a majority of the holders of Notes may declare all of the Notes to be due and payable immediately.
On June 23, 2015, the Company entered into a credit agreement (the “Credit Agreement”) along with certain of its subsidiaries, as borrowers (the “Borrowers”), Bank of America, N.A., as administrative agent, swing line lender and an issuer of letters of credit, with other agents party thereto. The Credit Agreement replacesreplaced the Company’s existing five-year, $700 million credit agreement, dated as of June 27, 2011, which was due to expire on June 27, 2016.
The Credit Agreement consists of a revolving credit facility (the “Revolving Facility”) in an aggregate principal amount of $700 million, with a final maturity date of June 23, 2020. The maturity date may be extended under certain conditions for an additional one-year term. Up to $75 million of the Revolving Facility is available for the issuance of letters of credit. Additionally, up to $50 million of the Revolving Facility is available to the Company for swing line loans, available on a same-day basis.
Proceeds of the Revolving Facility are available for use by the Borrowers for acquisitions, working capital and other general corporate purposes, including refinancing existing debt of the Company and its subsidiaries. The Company may request increases in the lending commitments under the Credit Agreement, but the aggregate lending commitments pursuant to such increases may not exceed $350 million. The Company has the right, subject to certain conditions set forth in the Credit Agreement, to designate certain foreign subsidiaries of the Company as borrowers under the Credit Agreement. In connection with any such designation,
the Company is required to guarantee the obligations of any such subsidiaries.

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



Borrowings under the Credit Agreement bear interest, at either an alternate base rate or an adjusted LIBOR rate plus, in each case, an applicable margin. Such applicable margin is based on the Company’s senior, unsecured, long-term debt rating and can range from .005% to 1.50%. Based on the Company’s credit rating at September 30, 2016,March 31, 2017, the applicable margin was 1.10%, resulting in a weighted average interest rate of 1.34%1.51% at September 30, 2016.March 31, 2017. Interest is payable (a) in the case of base rate loans, quarterly, and (b) in the case of LIBOR rate loans, on the maturity date of the borrowing, or quarterly from the effective date for borrowings exceeding three months.
The Credit Agreement requires payment to the lenders of a facility fee based upon (a) the amount of the lenders’ commitments under the credit facility from time to time and (b) the applicable corporate credit ratings of the Company. Voluntary prepayments of any loans and voluntary reductions of the unutilized portion of the commitments under the credit facility are permissible without penalty, subject to break funding payments and minimum notice and minimum reduction amount requirements.
The negative covenants include, among other things, limitations (each of which is subject to customary exceptions for
financings of this type) on our ability to grant liens; enter into transactions resulting in fundamental changes (such as mergers or sales of all or substantially all of the assets of the Company); restrict subsidiary dividends or other subsidiary distributions; enter into transactions with the Company’s affiliates; and incur certain additional subsidiary debt.
The Credit Agreement also contains customary events of default (subject to grace periods, as appropriate) including among others: nonpayment of principal, interest or fees; breach of the representations or warranties in any material respect; breach of the financial, affirmative or negative covenants; payment default on, or acceleration of, other material indebtedness; bankruptcy or insolvency; material judgments entered against the Company or any of its subsidiaries; certain specified events under the Employee Retirement Income Security Act of 1974, as amended; certain changes in control of the Company; and the invalidity or unenforceability of the Credit Agreement or other documents associated with the Credit Agreement.
At September 30, 2016, $255.1March 31, 2017, $105.3 million was outstanding under the Revolving Facility, with $8.2$9.1 million of outstanding letters of credit, resulting in net available borrowing capacity under the Revolving Facility at September 30, 2016March 31, 2017 of approximately $436.7$585.6 million.
Other borrowings of $1.6 million at September 30, 2016 consisted primarily of debt at international locations maintained for working capital purposes. Interest is payable on the outstanding debt balances at rates ranging from 0.9% to 2.8% per annum.
There are two key financial covenants that the Company is required to maintain in connection with the Revolving Facility and the Notes, a minimum interest coverage ratio of 3.0 to 1 and a maximum leverage ratio of 3.50 to 1.1, which is the ratio of the Company’s consolidated total debt to its consolidated EBITDA. At September 30, 2016,March 31, 2017, the Company was in compliance with both of these financial covenants. There are no financial covenants relating to the 4.5% Senior Notes or 4.2% Senior Notes; however, both are subject to cross-default provisions.

10.    Derivative Instruments
The Company enters into cash flow hedges from time to time to reduce the exposure to variability in certain expected future cash flows. The type of cash flow hedges the Company enters into includes foreign currency contracts and interest rate exchange agreementscontracts that effectively convert a portion of floating-rate debt to fixed-rate debt and are designed to reduce the impact of interest rate changes on future interest expense.
The effective portion of gains or losses on interest rate exchange agreementscontracts is reported in accumulatedAccumulated other comprehensive income (loss) in shareholders’Shareholders’ equity and reclassified into net income in the same period or periods in which the hedged transaction affects net income. See Note 13 for the amount of loss reclassified into income for interest rate contracts for the nine months ended September 30, 2016 and 2015. The remaining gain or loss in excess of the cumulative change in the present value of future cash flows or the hedged item, if any, is recognized into net income during the period of change.
Fair values relating to derivative financial instruments reflect See Note 13 for the estimated amounts thatamount of loss reclassified into income for interest rate contracts for the Company would receive or pay to sell or buy the contracts based on quoted market prices of comparable contracts at each balance sheet date.three months ended March 31, 2017 and 2016. As of September 30, 2016,March 31, 2017, the Company did not have any interest rate contracts outstanding.
In 2010 and 2011, the Company entered into two separate forward starting interest rate contracts in anticipation of the issuance of the 4.2% Senior Notes and the 4.5% Senior Notes. The Company cash settled these two interest rate contracts in 2010 and 2011 for a total of $68.9 million, which is being amortized into interest expense over the 10 year term of the debt instruments. Approximately $6.7$6.6 million of the pre-tax amount included in accumulated other comprehensive income (loss) in shareholders’ equity at March 31, 2017 will be recognized to net income over the next 12 months as the underlying hedged transactions are realized.

During the three months ended March 31, 2017, the Company entered into four foreign currency forward contracts with a combined notional value of €180 million that have not been designated as hedges for accounting purposes. These contracts are used to manage foreign currency exposure related to changes in the value of intercompany loans caused by changes in foreign

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



equityexchange rates. The change in the fair value of the foreign currency forward contracts and the corresponding change in the fair value of the intercompany loans of the Company are both recorded through earnings each period as incurred.  During the three months ended March 31, 2017, the Company recorded a net gain of $0.4 million within Other income (expense) - net in the Condensed Consolidated Statements of Operations related to these forward contracts.

Fair values relating to derivative financial instruments reflect the estimated amounts that the Company would receive or pay to sell or buy the contracts based on quoted market prices of comparable contracts at September 30, 2016 will be recognized to net income overeach balance sheet date. The following table sets forth the next 12 monthsfair value amounts of derivative instruments held by the Company as the underlying hedged transactions are realized.of March 31, 2017 and December 31, 2016:

  Fair Value Assets (Liabilities)  
  March 31, 2017 December 31, 2016 Balance Sheet Caption
  (In thousands)  
Forward exchange contracts $(373) $
 Accrued expenses

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 at fair value on a recurring basis in the balance sheets at September 30, 2016March 31, 2017 and December 31, 20152016:
 
Basis of Fair Value MeasurementsBasis of Fair Value Measurements
Balance at 
 September 30, 2016
 Level 1 Level 2 Level 3Balance at 
 March 31, 2017
 Level 1 Level 2 Level 3
Money market investment$18,210
 $18,210
 $
 $
Available for sale securities5,705
 5,705
 
 
$5,071
 $5,071
 $
 $
Foreign exchange contracts(373) 
 (373) 
 
 Basis of Fair Value Measurements
 Balance at 
 December 31, 2015
 Level 1 Level 2 Level 3
Money market investment$21,931
 $21,931
 $
 $
Available for sale securities4,794
 4,794
 
 
Contingent consideration(4,705) 
 
 (4,705)
 Basis of Fair Value Measurements
 Balance at 
 December 31, 2016
 Level 1 Level 2 Level 3
Available for sale securities$5,369
 $5,369
 $
 $
There were no transfers of assets or liabilities between Level 1 and Level 2 during the three and nine months ended September 30, 2016March 31, 2017 or the year ended December 31, 2015.
In determining the fair value of the contingent consideration potentially due on the acquisition of CPS, the Company used probability weighted estimates of EBITDA during the earn-out period. The $4.7 million represented management’s best estimate of the liability as of the opening balance sheet date and December 31, 2015, based on a range of outcomes of CPS’s 12 month operating results, from July 1, 2015 to June 30, 2016. During the six months ended June 30, 2016, the Company re-evaluated the contingent consideration arrangement and fully reversed the $4.7 million liability based on CPS’s actual operating results from July 1, 2015 to June 30, 2016. The $4.7 million reversal was recognized as a benefit within Selling, general and administrative expenses, of which $3.7 million was recognized in March 2016 and the remaining $1.0 million was recognized in June 2016.
The carrying value of our cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates their fair values because of the short term nature of these instruments. At September 30, 2016March 31, 2017, the fair value of the outstanding indebtedness under our Revolving Facility, 3.2% Senior Notes, 3.37% Senior Notes, 4.5% Senior Notes and 4.2% Senior Notes, based on quoted market prices and current market rates for debt with similar credit risk and maturity, was approximately $1,143.2$974.2 million compared to the carrying value of $1,103.9$954.2 million. This fair value measurement is classified as Level 2 within the fair value hierarchy since it is determined based upon significant inputs observable in the market, including interest rates on recent financing transactions to entities with a credit rating similar to ours.


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



12.    Restructuring
During the fourthfirst quarter of 2015,2017, the Company recorded restructuring costs of $4.8 million as part of the 20152016 restructuring initiatives that support the implementation of key strategic efforts designed to facilitate long-term, sustainable growth through cost reduction actions, primarily consisting of employee reductions.reductions and facility rationalization. The restructuring costs included severance benefits for 97 employees. The costs incurred related to these initiatives were included in Restructuring expenses in the Consolidated Statements of Operations while the related accruals were included in Accrued expenses in the Consolidated Balance Sheets. Severance costs primarily consisted of severance benefits through payroll continuation, COBRA subsidies, outplacement services, conditional separation costs and employer tax liabilities.liabilities, while exit costs primarily consisted of asset disposals or impairments.
Pre-tax restructuring expenses by segment for the three months ended March 31, 2017 are as follows:
  Severance Costs Exit Costs Total
  (In thousands)
Fluid & Metering Technologies $1,566
 $
 $1,566
Health & Science Technologies 2,470
 558
 3,028
Fire & Safety/Diversified Products 73
 
 73
Corporate/Other 130
 
 130
Total restructuring costs $4,239
 $558
 $4,797
Restructuring accruals of $2.3$4.1 million and $6.6$3.9 million at September 30, 2016March 31, 2017 and December 31, 2015,2016, respectively, are recorded in Accrued expenses in the Consolidated Balance Sheets. Severance benefits are expected to be paid inby the next six monthsend of the year using cash from operations. The changes in the restructuring accrual for the ninethree months ended September 30, 2016March 31, 2017 are as follows:
  Restructuring
Balance at January 1, 2016 $6,636
Payments, utilization and other (4,378)
Balance at September 30, 2016 $2,258
  Restructuring
  (In thousands)
Balance at January 1, 2017 $3,893
Restructuring expenses 4,797
Payments, utilization and other (4,542)
Balance at March 31, 2017 $4,148
    
13.    Other Comprehensive Income (Loss)
The components of other comprehensive income (loss) are as follows:
            
 Three Months Ended 
 September 30, 2016
 Three Months Ended 
 September 30, 2015
 Pre-tax Tax Net of tax Pre-tax Tax Net of tax
Cumulative translation adjustment$4,611
 $
 $4,611
 $(21,661) $
 $(21,661)
Pension and other postretirement adjustments915
 (321) 594
 1,215
 (397) 818
Reclassification adjustments for derivatives1,701
 (619) 1,082
 1,748
 (634) 1,114
Total other comprehensive income (loss)$7,227
 $(940) $6,287
 $(18,698) $(1,031) $(19,729)
Nine Months Ended 
 September 30, 2016
 Nine Months Ended 
 September 30, 2015
Three Months Ended 
 March 31, 2017
 Three Months Ended 
 March 31, 2016
Pre-tax Tax Net of tax Pre-tax Tax Net of taxPre-tax Tax Net of tax Pre-tax Tax Net of tax
Cumulative translation adjustment$(6,215) $
 $(6,215) $(54,555) $
 $(54,555)$21,050
 $
 $21,050
 $16,217
 $
 $16,217
Pension and other postretirement adjustments2,820
 (964) 1,856
 3,605
 (1,187) 2,418
1,676
 (552) 1,124
 993
 (322) 671
Reclassification adjustments for derivatives5,144
 (1,872) 3,272
 5,287
 (1,917) 3,370
1,677
 (635) 1,042
 1,724
 (627) 1,097
Total other comprehensive income (loss)$1,749
 $(2,836) $(1,087) $(45,663) $(3,104) $(48,767)$24,403
 $(1,187) $23,216
 $18,934
 $(949) $17,985


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



The following table summarizes the amounts reclassified from accumulated other comprehensive income to net income during the three and ninethree months ended September 30, 2016March 31, 2017 and 20152016:
 
Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
  Three Months Ended 
 March 31,
 
2016 2015 2016 2015  2017 2016 
Pension and other postretirement plans             
Amortization of service cost$915
 $1,215
 $2,820
 $3,605
  $1,676
 $993
 
Total before tax915
 1,215
 2,820
 3,605
  1,676
 993
 
Provision for income taxes(321) (397) (964) (1,187)  (552) (322) 
Total net of tax$594
 $818
 $1,856
 $2,418
  $1,124
 $671
 
Derivatives             
Reclassification adjustments$1,701
 $1,748
 $5,144
 $5,287
  $1,677
 $1,724
 
Total before tax1,701
 1,748
 5,144
 5,287
  1,677
 1,724
 
Provision for income taxes(619) (634) (1,872) (1,917)  (635) (627) 
Total net of tax$1,082
 $1,114
 $3,272
 $3,370
  $1,042
 $1,097
 

The Company recognizes net periodic benefitthe service cost component in both Selling, general and administrative expenses and Cost of sales, depending on the functional area of the underlying employees included in the plans.

14.    Common and Preferred Stock
On December 1, 2015, the Company’s Board of Directors approved a $300.0 million increase in the authorized level for repurchases of common stock. Repurchases will be funded with future cash flow generation or borrowings available under the Revolving Facility. During the ninethree months ended September 30, 2016,March 31, 2017, the Company purchased a total of 73982 thousand shares at a cost of $55.0 million.$7.6 million, of which $0.6 million was settled in April 2017. During the ninethree months ended September 30, 2015,March 31, 2016, the Company purchased 2.4 million628 thousand shares at a cost of $179.4$45.8 million, of which $4.3$1.2 million was settled in October 2015.April 2016. As of September 30, 2016,March 31, 2017, the amount of share repurchase authorization remaining is $580.0$572.4 million.
At September 30, 2016March 31, 2017 and December 31, 20152016, the Company had 150 million shares of authorized common stock, with a par value of $.01 per share, and 5 million shares of authorized preferred stock, with a par value of $.01 per share. No preferred stock was outstanding at September 30, 2016March 31, 2017 or December 31, 20152016.

15.    Share-Based Compensation

Stock Options
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.
  
Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 Three Months Ended 
 March 31,
2016 2015 2016 2015 2017 2016
Weighted average fair value of option grants$21.88 $19.98 $18.47 $20.34 $24.11 $18.40
Dividend yield1.53% 1.65% 1.69% 1.44% 1.45% 1.70%
Volatility29.60% 29.64% 29.71% 29.91% 29.41% 29.71%
Risk-free forward interest rate0.51% - 2.01% 0.29% - 3.37% 0.53% - 2.50% 0.24% - 2.82% 0.82% - 3.04% 0.53% - 2.50%
Expected life (in years)5.91 6.16 5.91 5.93 5.83 5.91

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



Total compensation cost for stock options is as follows:
 
Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 Three Months Ended 
 March 31,
2016 2015 2016 2015 2017 2016
Cost of goods sold$92
 $91
 $354
 $441
 $186
 $119
Selling, general and administrative expenses1,278
 1,297
 5,084
 4,987
 2,284
 2,295
Total expense before income taxes1,370
 1,388
 5,438
 5,428
 2,470
 2,414
Income tax benefit(441) (440) (1,727) (1,709) (747) (760)
Total expense after income taxes$929
 $948
 $3,711
 $3,719
 $1,723
 $1,654
A summary of the Company’s stock option activity as of September 30, 2016,March 31, 2017, and changes during the ninethree months ended September 30, 2016,March 31, 2017, are presented in the following table:
 
Stock OptionsShares 
Weighted
Average
Price
 
Weighted-Average
Remaining
Contractual Term
 
Aggregate
Intrinsic
Value
Shares 
Weighted
Average
Price
 
Weighted-Average
Remaining
Contractual Term
 
Aggregate
Intrinsic
Value
Outstanding at January 1, 20162,266,433
 $54.05
 6.58 $51,918,028
Outstanding at January 1, 20171,987,946
 $61.83
 6.84 $56,144,876
Granted558,420
 75.01
  427,895
 93.17
  
Exercised(526,918) 43.52
  (110,112) 55.17
  
Forfeited(162,969) 72.69
  (25,755) 77.15
  
Outstanding at September 30, 20162,134,966
 $60.71
 6.95 $70,154,123
Vested and expected to vest as of September 30, 20162,013,213
 $59.83
 6.84 $67,927,238
Exercisable at September 30, 20161,092,881
 $48.34
 5.40 $49,426,856
Outstanding at March 31, 20172,279,974
 $67.87
 7.25 $58,471,654
Vested and expected to vest as of March 31, 20172,117,100
 $66.61
 7.10 $56,949,565
Exercisable at March 31, 20171,188,689
 $54.28
 5.67 $46,633,546

Restricted Stock
Restricted stock awards generally cliff vest after three years for employees and non-employee directors. Unvested restricted stock carries dividend and voting rights and the sale of the shares is restricted prior to the date of vesting. A summary of the Company’s restricted stock activity as of September 30, 2016,March 31, 2017, and changes during the ninethree months ended September 30, 2016,March 31, 2017, are presented as follows:

Restricted StockShares Weighted-Average
Grant Date Fair
Value
Shares Weighted-Average
Grant Date Fair
Value
Unvested at January 1, 2016272,755
 $65.90
Unvested at January 1, 2017217,898
 $76.19
Granted75,640
 78.66
55,440
 93.05
Vested(104,427) 51.73
(62,994) 71.02
Forfeited(25,440) 74.54
(11,725) 79.24
Unvested at September 30, 2016218,528
 $76.08
Unvested at March 31, 2017198,619
 $82.36
Dividends are paid on restricted stock awards, whose fair value is equal to the market price of the Company’s stock at the date of the grant.

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IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)




Total compensation cost for restricted shares is as follows:
 
Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 Three Months Ended 
 March 31,
2016 2015 2016 2015 2017 2016
Cost of goods sold$64
 $9
 $325
 $245
 $152
 $128
Selling, general and administrative expenses751
 449
 3,249
 3,962
 1,253
 1,530
Total expense before income taxes815
 458
 3,574
 4,207
 1,405
 1,658
Income tax benefit(216) (184) (1,053) (1,239) (439) (513)
Total expense after income taxes$599
 $274
 $2,521
 $2,968
 $966
 $1,145

Cash-Settled Restricted Stock
The Company also maintains a cash-settled share based compensation plan for certain employees. Cash-settled restricted stock awards generally cliff vest after three years. A summary of the Company’s unvested cash-settled restricted stock activity as of September 30, 2016,March 31, 2017, and changes during the ninethree months ended September 30, 2016,March 31, 2017, are presented in the following table:
Cash-Settled Restricted StockShares Weighted-Average
Fair Value
Shares Weighted-Average
Fair Value
Unvested at January 1, 2016110,860
 $76.61
Unvested at January 1, 2017103,790
 $90.06
Granted39,450
 93.57
33,505
 93.51
Vested(35,960) 72.54
(26,300) 91.96
Forfeited(9,465) 93.57
(7,550) 93.51
Unvested at September 30, 2016104,885
 $93.57
Unvested at March 31, 2017103,445
 $93.51
Dividend equivalents are paid on certain cash-settled restricted stock awards. Total compensation cost for cash-settled restricted stock is as follows:
Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 Three Months Ended 
 March 31,
2016 2015 2016 2015 2017 2016
Cost of goods sold$307
 $29
 $627
 $533
 $248
 $189
Selling, general and administrative expenses881
 164
 1,842
 1,089
 430
 500
Total expense before income taxes1,188
 193
 2,469
 1,622
 678
 689
Income tax benefit(170) (28) (354) (251) (142) (98)
Total expense after income taxes$1,018
 $165
 $2,115
 $1,371
 $536
 $591


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IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)



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 and Nine Months Ended September 30, Three Months Ended March 31,
 2016 2015 2017 2016
Weighted average fair value of performance share units $111.42 $95.07 $115.74 $111.42
Dividend yield —% —% —% —%
Volatility 17.99% 19.14% 17.36% 17.99%
Risk-free forward interest rate 0.89% 1.01% 1.45% 0.89%
Expected life (in years) 2.86 2.86 2.85 2.86
 A summary of the Company’s performance share unit activity as of September 30, 2016,March 31, 2017, and changes during the ninethree months ended September 30, 2016,March 31, 2017, are presented in the following table:

Performance Share UnitsShares Weighted-Average
Grant Date Fair
Value
Shares Weighted-Average
Grant Date Fair
Value
Unvested at January 1, 2016146,275
 $94.80
Unvested at January 1, 2017137,055
 $104.18
Granted85,130
 111.42
65,530
 115.76
Vested
 

 
Forfeited(31,025) 99.52
Unvested at September 30, 2016200,380
 $101.13
Forfeited and other(3,925) 100.95
Unvested at March 31, 2017198,660
 $108.06
The Company granted 43,80063,325 performance share units in February 2013,2014, which vested on December 31, 2015.2016. Based on the Company’s relative total shareholder return rank during the three year period ended December 31, 2015,2016, the Company achieved a 200%141% payout that resulted in 87,60089,288 shares issued in February 2016.2017.
Total compensation cost for performance share units is as follows:
 
Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 Three Months Ended 
 March 31,
2016 2015 2016 2015 2017 2016
Cost of goods sold$
 $
 $
 $
 $
 $
Selling, general and administrative expenses348
 953
 3,844
 3,478
 1,606
 1,681
Total expense before income taxes348
 953
 3,844
 3,478
 1,606
 1,681
Income tax benefit(98) (323) (1,266) (1,161) (507) (535)
Total expense after income taxes$250
 $630
 $2,578
 $2,317
 $1,099
 $1,146
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 Consolidated Statements of Operations is consistent with classification of cash compensation for the same employees.
As of September 30, 2016March 31, 2017, there was $11.916.6 million of total unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 1.51.6 years, $107.5 million of total unrecognized compensation cost related to restricted stock that is expected to be recognized over a weighted-average period of 1.11.2 years, $4.6 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 years, and $7.6$10.7 million of total unrecognized compensation cost related to performance share units that is expected to be recognized over a weighted-average period of 1.11.2 years.


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IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)



16.    Retirement Benefits
The Company sponsors several qualified and nonqualified defined benefit and defined contribution pension plans and other postretirement 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. As disclosed in Note 1, the Company elected to early adopt ASU 2017-17 during the quarter ended March 31, 2017. As a result, the Company recorded Interest cost, Expected return on plan assets, and Net amortization within Other (income) expense - net. The Company adopted this standard retrospectively and thus $0.8 million was reclassified from Selling, general and administrative expenses to Other (income) expense - net for the three months ended March 31, 2016 to conform to current period presentation.
        
 Pension Benefits
 Three Months Ended September 30,
 2016 2015
 U.S. Non-U.S. U.S. Non-U.S.
Service cost$181
 $331
 $214
 $377
Interest cost788
 344
 956
 437
Expected return on plan assets(1,233) (203) (1,186) (282)
Net amortization766
 241
 906
 405
Net periodic benefit cost$502
 $713
 $890
 $937
Pension BenefitsPension Benefits
Nine Months Ended September 30,Three Months Ended March 31,
2016 20152017 2016
U.S. Non-U.S. U.S. Non-U.S.U.S. Non-U.S. U.S. Non-U.S.
Service cost$769
 $934
 $965
 $1,134
$254
 $482
 $294
 $299
Interest cost2,282
 1,049
 2,831
 1,305
660
 308
 747
 350
Expected return on plan assets(3,583) (642) (3,682) (838)(944) (264) (1,175) (219)
Net amortization2,420
 722
 2,585
 1,334
642
 382
 827
 238
Net periodic benefit cost$1,888
 $2,063
 $2,699
 $2,935
$612
 $908
 $693
 $668
 
Other Postretirement BenefitsOther Postretirement Benefits
Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended March 31,
2016 2015 2016 2015 2017 2016
Service cost$181
 $168
 $494
 $506
 $152
 $132
Interest cost224
 208
 622
 626
 204
 174
Net amortization(154) (95) (462) (314) (198) (154)
Net periodic benefit cost$251
 $281
 $654
 $818
 $158
 $152
The Company previously disclosed in its financial statements for the year ended December 31, 20152016, that it expected to contribute approximately $6.15.8 million to its defined benefit plans and $0.90.1 million to its other postretirement benefit plans in 20162017. As of September 30, 2016March 31, 2017, the Company now expectscontinues to expect to contribute $4.5approximately $5.8 million to its defined benefit plans and $0.9$0.1 million to its other postretirement benefit plans in 2016.2017. The Company contributed a total of $4.5$0.6 million during the first ninethree months of 20162017 to fund these plans.
During the third quarter of 2016, the Company implemented a program offering certain former U.S. employees with a vested pension benefit an option to take a one-time lump sum distribution rather than future monthly pension payments. The Company expects to make approximately $8.0 million to $10.0 million in payments from the plans in connection with this action and to incur an estimated pre-tax settlement loss of $3.0 million to $6.0 million in the fourth quarter of 2016. However, since the final result of the offering is presently unknown, these amounts are subject to change.

17.    Legal Proceedings
The Company is party to various legal proceedings arising in the ordinary course of business, none of which are expected to have a material impact on its financial condition, results of operations or cash flows.


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IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)




18.    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 decreasedincreased to $29.4$28.5 million in the third quarter of 2016three months ended March 31, 2017 from $32.8$24.7 million in the same period of 2015.2016. The effective tax rate increased to 29.6%27.3% for the third quarter of 2016three months ended March 31, 2017 compared to 29.2%26.6% in the same period of 20152016 due to the incurrence of an additional $5.2 million of foreign withholding taxes, tax expense as a result of the divestiture of the Hydra-Stop product line and the prior year divestiture of the Ismatec product line. These unfavorable items were offset by tax benefits as a result of the divestiture of Melles Griot KK, certain return-to-provision adjustments, the early adoption of ASU 2016-09 and the related tax effects of share based payments now recognized in income, the enactment of the Protecting Americans from Tax Hikes Act of 2015 on December 18, 2015 which, beginning in 2015, permanently extended the U.S. R&D credit, as well as the mix of global pre-tax income among jurisdictions.

The provision for income taxes decreased to $82.0 million in the nine months ended September 30, 2016 from $88.6 million in the same period of 2015. The effective tax rate decreased to 27.7% for the nine months ended September 30, 2016 compared to 29.2% in the same period of 2015 due tax benefits as a result of the divestiture of Melles Griot KK, certain return-to-provision adjustments, the early adoption of ASU 2016-09 and the related tax effects of share based payments now recognized in income, the enactment of the Protecting Americans from Tax Hikes Act of 2015 on December 18, 2015 which, beginning in 2015, permanently extended the U.S. R&D credit, as well as the mix of global pre-tax income among jurisdictions. These favorable items were offset by the incurrence of additional $5.2 million of foreign withholding taxes and tax expense as a result of the divestiture of the Hydra-Stop product line and the prior year divestiture of the Ismatec product line.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. Due to the potential for resolution of federal, state and foreign examinations, and the expiration of various statutes of limitation, it is reasonably possible that the Company’s gross unrecognized tax benefits balance may change within the next twelve months by a range of zero to $2.7$2.4 million.

19.    Subsequent Events

On October 10, 2016, the Company entered into a definitive agreement and completed the sale of its IETG and 40Seven subsidiaries, based in Leeds, United Kingdom for cash consideration of $2.8 million, subject to customary post-closing adjustments. The results of the subsidiaries were reported within the Fluid & Metering Technologies segment and generated revenues of $12 million in 2015.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Statement Under the Private Securities Litigation Reform Act
This quarterly report on Form 10-Q, including the “Overview and Outlook” and the “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, capital expenditures, acquisitions, cost reductions, cash flow, revenues, earnings, market conditions, global economies and operating improvements, and are indicated by words or phrases such as “anticipate,” “estimate,” “plans,” “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: economic and political consequences resulting from terrorist attacks and wars; levels of industrial activity and economic conditions in the U.S. and other countries around the world; pricing pressures and other competitive factors, and levels of capital spending in certain industries, - all of which could have a material impact on order rates and IDEX’sIDEX Corporation’s results, particularly in light of the low levels of order backlogs it typically maintains; its 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; interest rates; capacity utilization and the effect this has on costs; labor markets; market conditions and material costs; and developments with respect to contingencies, such as litigation and environmental matters. 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.

Overview and Outlook
IDEX is an applied solutions company specializing in 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 to 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 among theimportant factors that influence the demand for IDEX’s products.
The Company has three reportable business segments: Fluid & Metering Technologies (“FMT”), Health & Science Technologies (“HST”) and Fire & Safety/Diversified Products (“FSDP”). Within our three reportable segments, the Company maintains fifteenthirteen platforms, where we focus on organic growth and strategic acquisitions. Each of our fifteenthirteen platforms is also a reporting unit, where we annually test goodwill for impairment.
The Fluid & Metering Technologies segment contains the Energy (comprised of Corken, Faure Herman, Liquid Controls, SAMPI, and Toptech), Valves (comprised of Alfa Valvole)Valvole, Richter, and Aegis), Water (comprised of Pulsafeeder, OBL, Knight, ADS, Trebor, and iPEK), IndustrialPumps (comprised of Richter, Viking Aegis,and Warren Rupp, and Trebor)Rupp), and AgriculturalAgriculture (comprised of Banjo) platforms. The Health & Science Technologies segment contains the IDEXScientific Fluidics & Optics & Photonics (comprised of Eastern Plastics, Rheodyne, Sapphire Engineering, Upchurch Scientific, ERC, CiDRA Precision Services, CVI Melles Griot, Semrock, and AT Films), Scientific FluidicsSealing Solutions (comprised of Eastern Plastics, Rheodyne, SapphirePrecision Polymer Engineering, Upchurch, ERC,FTL Seals Technology, Novotema, and CiDRA Precision Services)SFC Koenig), Gast, Micropump,

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and Material Processing Technologies (comprised of Quadro, Fitzpatrick, Microfluidics, and Matcon), Sealing Solutions (comprised of PPE, FTL, Novotema and SFC Koenig), Micropump, and Gast platforms. The Fire & Safety/Diversified Products segment is comprised of the Dispensing, Rescue (comprised of Lukas, Vetter, Hurst Jaws of Life, and Dinglee), Band-It, and Fire Suppression& Safety (comprised of Class 1, Hale, Akron Brass, AWG Fittings, Godiva, Dinglee, Hurst Jaws of Life, Lukas, and Godiva)Vetter), Band-It, and Dispensing platforms. 
The Fluid & Metering Technologies segment designs, produces and distributes positive displacement pumps, flow meters, valves, injectors, and other fluid-handling pump modules and systems and provides flow monitoring and other services for the food, chemical, general industrial, water and& wastewater, agriculturalagriculture and energy industries.
The Health & Science Technologies segment designs, produces and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems used in beverage, food processing, pharmaceutical and cosmetics, pneumatic components and sealing solutions, including very high precision, low-flow rate pumping solutions required in analytical instrumentation, clinical diagnostics and drug discovery, high performance molded and extruded sealing components, biocompatible medical devices and implantables, air compressors used in medical, dental and industrial applications, optical components and coatings for applications in the fields of scientific research, defense, biotechnology, life sciences, aerospace, telecommunications and electronics manufacturing, laboratory and commercial equipment used in the production of micro and nano scale materials, precision photonic solutions used in life sciences, research and defense markets, and precision gear and peristaltic pump technologies that meet exacting original equipment manufacturer specifications.

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The Fire & Safety/Diversified Products segment produces firefighting pumps and controls, valves, monitors, nozzles, rescue tools, lifting bags and other components and systems for the fire and rescue industry, engineered stainless steel banding and clamping devices used in a variety of industrial and commercial applications, and precision equipment for dispensing, metering and mixing colorants and paints used in a variety of retail and commercial businesses around the world.
Management’s primary measurements of segment performance are sales, operating income, and operating margin. In addition, due to the highly acquisitive nature of the Company, the determination of operating income includes amortization of acquired intangible assets and, as a result, management reviews depreciation and amortization as a percentage of sales. These measures are monitored by management and significant changes in operating results versus current trends in end markets and variances from forecasts are analyzed with segment management.
This report references organic sales, a non-GAAP measure, that refers to sales calculated according to U.S. GAAP but excluding amounts from acquired or divested businesses during the first twelve months after acquisition or divestiture and the impact of foreign currency translation. The portion of sales attributable to foreign currency translation is calculated as the difference between (a) the period-to-period change in organic sales and (b) the period-to-period change in organic sales after applying prior period foreign exchange rates to the current year period. Management believes that reporting organic sales provides useful information to investors by helping identify underlying growth trends in our business and facilitating easier comparisons of our revenue performance with prior and future periods and to our peers. The Company excludes the effect of foreign currency translation from organic sales because foreign currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. The Company excludes the effect of acquisitions and divestitures because the nature, size, and number can vary dramatically from period to period and between the Company and its peers and can also obscure underlying business trends and make comparisons of long-term performance difficult.
EBITDA means earnings before interest, income taxes, depreciation and amortization. Given the acquisitive nature of the Company, which results in a higher level of amortization expense at recently acquired businesses, management uses EBITDA as an internal operating metric to provide another representation of the businesses performance across our three segments and for enterprise valuation purposes. 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 our industry. Management believes EBITDA margin is useful for the same reason as EBITDA. EBITDA is also used to calculate certain financial covenants, as discussed in Note 9 of the Notes to Consolidated Financial Statements in Part I, Item 1, “Financial Statements.”
Organic sales have been reconciled to net sales and EBITDA has been reconciled to net income in Item 2 under the heading “Non-GAAP Disclosures.” The reconciliation of segment EBITDA to net income was performed on a consolidated basis due to the fact that we do not allocate consolidated interest expense or the consolidated provision for income taxes to our segments.

Management uses Adjusted operating income, Adjusted net income, and Adjusted EPS as metrics by which to measure performance of the Company since they exclude items that are not reflective of ongoing operations, such as restructuring expenses.
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, and the financial results prepared in accordance with U.S. GAAP and the reconciliations from these results should be carefully evaluated.
Some
24

Table of our key financial results for the three months ended September 30, 2016 when compared to the same period from the prior year are as follows:Contents
Sales of $530 million increased 5%; organic sales (which excludes acquisitions, divestitures and foreign currency translation) were down 2%.
Operating income of $109 million decreased 11%. Adjusted operating income of $111 million increased 2%.
Net income decreased 12% to $70 million or 13% of sales.
EBITDA of $133 million was 25% of sales and covered interest expense by more than 11 times.
Diluted EPS of $0.91 decreased 11 cents, or 11%. Adjusted EPS of $0.92 increased 3 cents, or 3%.
Some of our key financial results for the ninethree months ended September 30, 2016March 31, 2017 when compared to the same period from the prior year are as follows:
Sales of $1.6 billion$554 million increased 4%10%; organic sales (which excludes acquisitions, divestitures and foreign currency translation) were down 2%up 5%.
Operating income of $324$116 million decreased 3%increased 12%. Adjusted operating income of $326120 million, adjusted for $4.8 million of restructuring charges, increased 2%17%.
Net income decreased 1%increased 11% to $214$76 million or 14% of sales. Adjusted net income of $79 million, adjusted for $3 million of restructuring charges net of tax benefit, increased 16% or 14% of sales.
EBITDA of $394$137 million was 25% of sales and covered interest expense by nearly 12 times.
Diluted EPS of $2.78$0.99 increased 310 cents, or 1%11%. Adjusted EPS of $2.79$1.03 increased 1714 cents, or 6%16%.

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Given the Company’s current outlook, we are projecting fourthsecond quarter 20162017 adjusted EPS in the range of $0.92$1.04 to $0.94$1.06 with full year 20162017 adjusted EPS of $3.72$4.00 to $3.74.$4.10. We are also projecting full year organic revenue growth at 5%expectations of 3% to 4% with full year organic revenue of negative 1%.2% to 3% growth in the second quarter.

Results of Operations
The following is a discussion and analysis of our results of operations for the three and ninethree month periods ended September 30, 2016March 31, 2017 and 20152016. Segment operating income and EBITDA excludesexclude unallocated corporate operating expenses of $16.1$17.0 million and operating income of $4.0$14.7 million for the three months ended September 30,March 31, 2017 and 2016, and 2015, respectively, and unallocated corporate operating expenses of $47.2 million and $30.3 million for the nine months ended September 30, 2016 and 2015, respectively. Corporate operating expenses include a net loss on sale of businesses of $2.1 million for the three and nine months ended September 30, 2016 and an $18.1 million gain on sale of businesses for the three and nine months ended September 30, 2015.

Consolidated Results for the Three Months Ended September 30, 2016 Compared with the Same Period of 2015
(In thousands)Three Months Ended 
 September 30,
 2016 2015
Net sales$530,356
 $503,791
Operating income108,857
 121,813
Operating margin20.5% 24.2%
For the third quarter of 2016, Fluid & Metering Technologies contributed 39% of sales, 44% of operating income and 43% of EBITDA; Health & Science Technologies accounted for 35% of sales, 30% of operating income and 33% of EBITDA; and Fire & Safety/Diversified Products represented 26% of sales, 26% of operating income and 24% of EBITDA. These percentages are calculated on the basis of total segment (not total Company) sales, operating income and EBITDA.
Sales in the three months ended September 30, 2016 were $530.4 million, a 5% increase from the comparable period last year. This increase reflects an 8% net increase from acquisitions (Novotema - June 2015, Alfa - June 2015, CPS - July 2015, Akron Brass - March 2016, AWG Fittings - July 2016 and SFC Koenig - September 2016) and divestitures (Ismatec - July 2015, Hydra- Stop - July 2016 and Melles Griot KK - September 2016), 1% unfavorable foreign currency translation and a 2% decrease in organic sales. Sales to customers outside the U.S. represented approximately 48% of total sales in the third quarter of 2016 compared to 52% during the same period in 2015.
Gross profit of $230.9 million in the third quarter of 2016 increased $7.6 million, or 3%, from the same period in 2015. Gross margin of 43.5% in the third quarter of 2016 decreased 80 basis points from 44.3% during the same period in 2015. The decrease in gross margin is primarily due to $4.6 million in fair value inventory step-up charges related to the AWG Fittings and SFC Koenig acquisitions. The increase in gross profit is primarily due to the Akron Brass acquisition.
Selling, general and administrative expenses increased to $120.0 million in the third quarter of 2016 from $114.8 million during the same period of 2015. The increase is primarily related to $10.5 million of incremental costs from acquisitions, partially offset by the benefits from prior year restructuring actions and cost controls. As a percentage of sales, selling, general and administrative expenses were 22.6% for the third quarter of 2016, down 20 basis points from the 22.8% for the same period of 2015.
Operating income of $108.9 million, in the third quarter of 2016, was down from the $121.8 million recorded during the same period in 2015, while operating margin of 20.5% for the third quarter of 2016, was down compared to 24.2% recorded during the same period in 2015. The decrease in operating income and operating margin was primarily due to an $18.1 million gain on sale of a business in 2015 compared to a $2.1 million loss on sale of businesses in 2016 and higher fair value inventory step-up charges related to 2016 acquisitions, partially offset by the incremental impact of acquisitions and prior year restructuring actions.
Other (income) expense - net was $(2.4) million in the third quarter of 2016 compared with $(0.7) million of other (income) expense - net recorded in the same period in 2015, primarily due to higher foreign currency translation gains in 2016.
Interest expense of $11.9 million in the third quarter of 2016 was up from $10.2 million in 2015 primarily as a result of higher borrowings outstanding on the Revolving Facility and the Notes.
The provision for income taxes is based upon estimated annual tax rates for the year applied to federal, state and foreign income. The provision for income taxes of $29.4 million for the third quarter of 2016 decreased compared to $32.8 million recorded in the same period of 2015. The effective tax rate increased to 29.6% for the third quarter of 2016 compared to 29.2% in the same period of 2015 due to the incurrence of an additional $5.2 million of foreign withholding taxes, tax expense as a result of the

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divestiture of the Hydra-Stop product line and the prior year divestiture of the Ismatec product line. These unfavorable items were offset by tax benefits as a result of the divestiture of Melles Griot KK, certain return-to-provision adjustments, the early adoption of ASU 2016-09 and the related tax effects of share based payments now recognized in income, the enactment of the Protecting Americans from Tax Hikes Act of 2015 on December 18, 2015 which, beginning in 2015, permanently extended the U.S. R&D credit, as well as the mix of global pre-tax income among jurisdictions.
Net income in the third quarter of 2016 of $69.9 million decreased from $79.5 million during the same period of 2015. Diluted earnings per share in the third quarter of 2016 of $0.91 decreased $0.11, or 11%, compared with the same period in 2015.
Fluid & Metering Technologies Segment
(In thousands)Three Months Ended 
 September 30,
 2016 2015
Net sales$208,335
 $212,101
Operating income55,600
 46,910
Operating margin26.7% 22.1%
Sales of $208.3 million decreased $3.8 million, or 2%, in the third quarter of 2016 compared with the same period of 2015. This reflects a 1% decrease from divestitures (Hydra-Stop - July 2016) and a 1% unfavorable foreign currency translation. In the third quarter of 2016, sales increased 4% domestically and decreased 9% internationally compared to the same period in 2015. Sales to customers outside the U.S. were approximately 43% of total segment sales during the third quarter of 2016 compared with 46% during the same period in 2015.
Sales decreased in our Energy platform in the third quarter of 2016 compared to the same period of 2015 due to challenges in the mobile and LPG markets partially offset by strength in the downstream OEM and aviation markets. Sales within our Industrial platform decreased compared to the third quarter of 2015 due to continued softness in the North American industrial distribution market driven by oil & gas end markets and lower project volume. Sales decreased in the Water platform compared to the third quarter of 2015, due to the divestiture of the Hydra-Stop product line as well as weakness in the United Kingdom and the chemical end market, partially offset by an increase in U.S. municipal service revenue. Sales within the Agricultural platform increased compared to the third quarter of 2015 as a result of increased sales volume to U.S. OEMs. Sales in the Valves platform decreased compared to 2015 as a result of softness in the oil and natural gas markets.
Operating income and operating margin of $55.6 million and 26.7%, respectively, were higher than the $46.9 million and 22.1% recorded in the third quarter of 2015, primarily due to prior year restructuring actions and a fair value inventory step-up charge associated with the Alfa acquisition.
Health & Science Technologies Segment
(In thousands)Three Months Ended 
 September 30,
 2016 2015
Net sales$183,564
 $184,893
Operating income37,204
 38,371
Operating margin20.3% 20.8%
Sales of $183.6 million decreased $1.3 million, or 1%, in the third quarter of 2016 compared with the same period in 2015. This reflects a 1% decrease in organic revenue, a 2% net increase from an acquisition (SFC Koenig - September 2016) and divestitures (Ismatec - July 2015 and Melles Griot KK - September 2016) and 2% unfavorable foreign currency translation. In the third quarter of 2016, sales increased 10% domestically and decreased 8% internationally. Sales to customers outside the U.S. were approximately 53% of total segment sales in the third quarter of 2016 compared with 58% during the same period in 2015.
Sales within our Material Processing Technologies platform decreased compared to the third quarter of 2015 primarily due to the delivery of large capital projects in 2015, partially offset by strength in the pharmaceutical business. Sales increased compared to the third quarter of 2015 within our Scientific Fluidics platform due to continued strong demand in the analytical instrumentation, in-vitro diagnostic and bio end markets, partially offset by the July 2015 disposition of our Ismatec product line. Sales within our Sealing Solutions platform increased compared to the third quarter of 2015 due to the acquisition of SFC Koenig and continued strength in semi-conductor markets, partially offset by continued softness in the oil & gas and heavy equipment markets. Sales within our Optics and Photonics platform decreased compared to the third quarter of 2015 due to the divestiture of Melles Griot KK and a slow down in the Korean business unit, partially offset by strength in the optical systems & shutters and optical filters

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end markets. Sales within our Gast platforms decreased compared to the third quarter of 2015 due to continued softness in the North American industrial markets. Sales within the Micropump platform increased compared to the third quarter of 2015 due to project wins within the printing end market.
Operating income and operating margin of $37.2 million and 20.3%, respectively, in the third quarter of 2016 were down from the $38.4 million and 20.8% recorded in the same period of 2015, primarily due to a fair value inventory charge associated with the SFC Koenig acquisition, partially offset by prior year restructuring charges.
Fire & Safety/Diversified Products Segment
(In thousands)Three Months Ended 
 September 30,
 2016 2015
Net sales$138,767
 $107,009
Operating income32,189
 32,536
Operating margin23.2% 30.4%
Sales of $138.8 million increased $31.8 million, or 30%, in the third quarter of 2016 compared with the same period in 2015. This reflects a 6% decrease in organic revenue, 38% increase from acquisitions (Akron Brass - March 2016 and AWG Fittings - July 2016) and 2% unfavorable foreign currency translation. In the third quarter of 2016, sales increased 38% domestically and 22% internationally. Sales to customers outside the U.S. were approximately 48% of total segment sales in the third quarter of 2016 compared to 51% in the same period of 2015.
Sales within our Dispensing platform were flat compared to the third quarter of 2015. Sales within our Band-It platform decreased compared to the third quarter of 2015 due to declines in upstream oil & gas sales and North American industrial, partially offset by strength in automotive end markets. Sales within our Fire Suppression platform increased due to the acquisitions of Akron Brass and AWG Fittings. Sales within our Rescue platform were down compared to 2015 primarily due to large projects in eastern Europe in the prior year.
Operating income of $32.2 million in the third quarter of 2016 was lower than $32.5 million in the third quarter of 2015 due to the Akron Brass and AWG Fittings acquisitions, partially offset by the fair value inventory step-up charge associated with the AWG Fittings acquisition. Operating margin of 23.2% in the third quarter of 2016 was lower than the 30.4% recorded in the third quarter of 2015 primarily due to the fair value inventory step-up charge related to the AWG Fittings acquisition and the dilutive impact of current year acquisitions resulting from a higher level of amortization as compared to the existing businesses.
Consolidated Results for the NineThree Months Ended September 30, 2016March 31, 2017 Compared with the Same Period of 20152016
 
(In thousands)Nine Months Ended 
 September 30,
Three Months Ended 
 March 31,
2016 20152017 2016
Net sales$1,582,624
 $1,520,870
$553,552
 $502,572
Operating income324,390
 333,479
115,671
 103,345
Operating margin20.5% 21.9%20.9% 20.6%
For the ninethree months ended September 30, 2016,March 31, 2017, Fluid & Metering Technologies contributed 41%39% of sales, 43%44% of operating income and 42%41% of EBITDA; Health & Science Technologies contributed 35%36% of sales, 32% of operating income and 35% of EBITDA; and Fire & Safety/Diversified Products contributed 24%25% of sales, 25%24% of operating income and 23%24% of EBITDA. These percentages are calculated on the basis of total segment (not total Company) sales, operating income and EBITDA.
Sales in the ninethree months ended September 30, 2016March 31, 2017 were $1,582.6553.6 million, which was a 4%10% increase compared to the same period last year. This reflects a 2% decrease5% increase in organic sales, a 7% net favorable impact from acquisitions (Alfa - June 2015; Novotema - June 2015; CPS - July 2015; Akron(Akron Brass - March 2016, AWG Fittings - July 2016 and SFC Koenig - September 2016) and divestitures (Ismatec - July 2015, Hydra-Stop(Hydra-Stop - July 2016, and Melles Griot KKCVI Japan - September 2016, IETG - October 2016, and CVI Korea - December 2016) and 1%2% unfavorable foreign currency translation. Sales to customers outside the U.S. represented approximately 50%49% of total sales in the first ninethree months of 20162017 compared with 49%51% during the same period in 2015.2016.
Gross profit of $698.3$250.9 million in the first ninethree months of 20162017 increased $17.4$27.6 million, or 3%12%, from the same period in 2015.2016. Gross margin of 44.1%45.3% in the first ninethree months of 2016 decreased 702017 increased 90 basis points from 44.8%44.4% during the same period in 2015,

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2016, primarily due to higherproductivity, volume leverage and a $2.2 million fair value inventory step-up charges related tocharge in the 2016 acquisition.prior year period. Gross profit increased compared to 20152016 as a result of a full yearquarter of prior year acquisitions and the 2016 Akron Brass acquisition.acquisitions.
Selling, general and administrative expenses increased to $371.8$130.5 million in the first ninethree months of 20162017 from $360.8$120.0 million during the same period of 2015.2016. The change is due to $25.1$12.6 million of net incremental costs from acquisitions and divestitures, offset by benefits from prior period restructuring and cost controls and a $4.7 million reversal of a contingent consideration from a 2015 acquisition.controls. As a percentage of sales, selling, general and administrative expenses were 23.5% for the first ninethree months of 2016,2017, down 30 basis points compared to 23.8% during the same period of 2015.2016.
Other (income) expense - net in the first three months of 2017 was $(5.0)flat compared with the same period in 2016.
Interest expense of $11.6 million in the first ninethree months of 2016 compared with $(1.6) million of other (income) expense - net recorded in the same period in 2015, primarily due to higher foreign currency translation gains in the current year to date period.
Interest expense of $33.6 million in the first nine months of 20162017 was up from $31.4$10.5 million in 20152016 primarily as a result of higher borrowings outstanding on the Revolving Facility and the Notes.Notes issued in June 2016.

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Operating income of $324.4$115.7 million in the first ninethree months of 20162017 was downup from the $333.5$103.3 million recorded during the same period in 2015,2016, while operating margin of 20.5%20.9% was downup from 21.9%20.6% recorded in the same period of 2015.2016. The decreaseincrease in operating income and margin is primarily due to higheroperational efficiency and a $2.2 million fair value inventory step-up charges related to currentcharge in the prior year acquisitions and higher gain on sale of businesses in 2015,period, partially offset by $4.8 million of restructuring-related charges in the $4.7 million benefit from the reversal of the contingent consideration related to a prior year acquisition and prior year restructuring.current period.
The provision for income taxes is based upon estimated annual tax rates for the year applied to federal, state and foreign income. The provision for income taxes of $82.0$28.5 million for the first ninethree months of 20162017 decreasedincreased compared to $88.6$24.7 million recorded in the same period of 20152016. The effective tax rate decreasedincreased to 27.7%27.3% for the first ninethree months of 20162017 compared to 29.2%26.6% in the same period of 20152016 due to tax benefits as a result of the divestiture of Melles Griot KK, certain return-to-provision adjustments, the early adoption of ASU 2016-09 and the related tax effects of share based payments now recognized in income, the enactment of the Protecting Americans from Tax Hikes Act of 2015 on December 18, 2015 which, beginning in 2015, permanently extended the U.S. R&D credit, as well as the mix of global pre-tax income among jurisdictions. These adjustments were offset by the incurrence of an additional $5.2 million of foreign withholding taxes, and tax expense as a result of the divestiture of the Hydra-Stop product line and the prior year divestiture of the Ismatec product line.
Net income in the first ninethree months of 20162017 of $213.8$75.9 million decreasedincreased from $215.0$68.1 million during the same period of 2015.2016. Diluted earnings per share in the first ninethree months of 20162017 of $2.78$0.99 increased $0.03,$0.10, or 1%11%, compared with the same period in 2015.2016.
Fluid & Metering Technologies Segment
(In thousands)Nine Months Ended 
 September 30,
Three Months Ended 
 March 31,
2016 20152017 2016
Net sales$641,988
 $645,642
$216,770
 $211,843
Operating income160,866
 154,665
57,813
 51,703
Operating margin25.1% 24.0%26.7% 24.4%
Sales of $642.0$216.8 million decreased by 1%increased $4.9 million, or 2%, in the first ninethree months of 20162017 compared with the same period of 2015.2016. This reflects a 1% decrease6% increase in organic sales, a 1% favorable net3% unfavorable impact from acquisitions (Alfa - June 2015) and divestitures (Hydra-Stop - July 2016 and IETG - October 2016), and a 1% unfavorable impact from foreign currency translation. In the first ninethree months of 20162017, sales decreased 2%increased 8% domestically and increased 1%decreased 5% internationally compared to the same period in 2015.2016. Sales to customers outside the U.S. were approximately 44%41% of total segment sales during the first ninethree months of 20162017 andcompared with 44% during the same period in 20152016.
Sales within our Energy platform were down slightlyflat in the first ninethree months of 20162017 compared to the same period of 20152016 primarily due to challengesas a result of strong oil & gas project orders, a healthy US aviation project funnel and a stable stationary market offset by continued weakness in the North American LPG mobile market and LPG end markets, partially offset by large international project shipments and strength within the aviation market.lower than expected truck builds. Sales within our IndustrialPumps platform decreasedincreased compared to the first ninethree months of 20152016 due to softnessstrength in theoil & gas upstream markets, as well as a solid North American industrial distribution market primarily as a result of the continued depression in the oil & gas market, softening of mining end markets and lowerhigher project volume. Sales within the Water platform were flat compareddecreased in the first three months of 2017 due to the first nine months of 2015 due toHydra-Stop and IETG divestitures, partially offset with an increase in municipal spending coupled with the mild winter offset by slowing demand in the United Kingdom and chemicalhealth care end market and the divestiture of the Hydra-Stop product line.markets. Sales within our Agricultural platform decreasedincreased in the first ninethree months of 20162017 compared to the same period of 20152016 due to continued overall softness within OEM markets.strong global demand across North America, Europe and Latin America. Sales in the Valves platform increasedwere up in the first three months of 2017 compared to the prior year period as a result of accelerated improvements in Europe as well as a strong global automotive market and the Alfa acquisition in June 2015 and thus only had sales during a portion of the prior year.

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petro-chemical end market.
Operating income and operating margins of $160.9$57.8 million and 25.1%26.7%, respectively, in the first ninethree months of 20162017 were higher than the $154.751.7 million and 24.0%24.4%, respectively, recorded in the first ninethree months of 2015,2016, primarily due to a full year ofproductivity, higher volume and the Alfa acquisition included in the 2016 results andbenefit from prior period restructuring expenses incurred in the prior period.initiatives, partially offset by current period restructuring expenses.
Health & Science Technologies Segment
(In thousands)Nine Months Ended 
 September 30,
Three Months Ended 
 March 31,
2016 20152017 2016
Net sales$556,475
 $552,418
$199,679
 $186,343
Operating income119,028
 117,888
42,238
 40,682
Operating margin21.4% 21.3%21.2% 21.8%
Sales of $556.5$199.7 million increased $4.1$13.3 million, or 1%7%, in the first ninethree months of 20162017 compared with the same period in 2015.2016. This reflects a 2%5% increase in organic sales, a 5% net favorable impact from acquisitions (Novotema - June 2015, CPS - July 2015 and SFC(SFC Koenig - September 2016) and divestitures (Ismatec(CVI Japan - July 2015September 2016 and Melles Griot KKCVI Korea - SeptemberDecember 2016) and a 1%3% unfavorable impact from foreign currency translation. In the first ninethree months of 20162017, sales decreased 1%increased 15% domestically and increased 2% internationally. Sales to customers outside the U.S. were approximately 55% of total segment sales in the first ninethree months of 20162017 compared with 54%58% during the same period in 20152016.

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Sales within our Material Processing Technologies platform were flatdecreased in the first three months of 2017 compared to the first nine months of 2015.same period in 2016 due to the timing on pharmaceutical project shipments. Sales within our Scientific Fluidics & Optics platform were updown compared to the first ninethree months of 20152016 due to the CVI Japan and CVI Korea divestitures, partially offset by strong demand in all primary end markets, including analytical instrumentation, IVD, and the full-year impact of the CPS acquisition, partially offset by the July 2015 divestiture of our Ismatec product line.life sciences. Sales within our Sealing Solutions platform increased compared to the first ninethree months of 20152016 due to the inclusion of a full yearquarter of the Novotema acquisition, the SFC Koenig acquisition andas well as continued strength in the semi-conductor markets, partially offset by the weakened heavy equipment marketsemiconductor and continued softness in the oil & gastransportation end markets. Sales within our Optics and PhotonicsGast platform decreased compared to the first ninethree months of 20152016, primarily due to weakness in the optical systems & shutters and laser optics end markets and the divestitureimpact of Melles Griot KK, partially offset by stability within semi-conductor end markets.OEM headwinds. Sales within our Gast and Micropump platformsplatform decreased compared to the first ninethree months of 20152016 due to declinescontinued weakness in theprinting markets partially offset by increasing demand in North American industrial distribution markets.
Operating income and operating margin of $119.0$42.2 million and 21.4%, respectively, in the first ninethree months of 2016 were2017 was up from the $117.9$40.7 million and 21.3%, respectively, recorded in the same period of 2015,2016, primarily due to higher volume and productivity improvements within the segment, partially offset by 2017 restructuring expenses related to site consolidations within the inventory step-up charges associated withMaterial Processing Technologies platform. Operating margin of 21.2% in the SFC Koenig acquisition.first three months of 2017 was down from the 21.8% recorded in the same period of 2016, primarily due to the site consolidation related restructuring expenses.
Fire & Safety/Diversified Products Segment
(In thousands)Nine Months Ended 
 September 30,
Three Months Ended 
 March 31,
2016 20152017 2016
Net sales$384,996
 $325,572
$137,447
 $104,618
Operating income91,709
 91,180
32,626
 25,654
Operating margin23.8% 28.0%23.7% 24.5%
Sales of $385.0137.4 million increased $59.432.8 million, or 18%31%, in the first ninethree months of 20162017 compared with the same period in 20152016. This reflects a 5% decline1% increase in organic revenue, a 24%33% favorable acquisition impact (Akron Brass - March 2016 and AWG Fittings - July 2016) and a 1%3% unfavorable impact from foreign currency translation. In the first ninethree months of 20162017, sales increased 23%43% domestically and increased 14%22% internationally, compared with the same period in 2015.2016. Sales to customers outside the U.S. were approximately 51%52% of total segment sales in the first ninethree months of 20162017 compared to 52%56% during the same period of 20152016.
Sales within our Dispensing platform increaseddecreased compared to the first ninethree months of 2015,2016, primarily driven by stronglower X-Smart sales in Asia and continued strength in deliveries to North American retailers.large European projects from the prior year that did not repeat. Sales within our Band-It platform decreased compared to the first nine months of 2015, primarily due to the decline in upstream oil & gas markets, partially offset by strength within the transportation end markets. Sales within our Fire Suppression platform increased compared to the first ninethree months of 20152016 due to solid growth in the energy and transportation markets, partially offset by lack of project funding in Asia. Sales within our Fire & Safety platform increased compared to the first three months of 2016 primarily due to a full quarter of the Akron Brass and AWG Fittings acquisitions. Sales within our Rescue platform were down compared to 2015, primarily due to project delays in Asian markets and large projects in eastern Europeacquisitions as well as strength in the prior year.

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Industrial market.
Operating income of $91.7$32.6 million in the first ninethree months of 20162017 was higher than the $91.2$25.7 million recorded in the same period of 20152016 while operating margin of 23.8%23.7% recorded in the first ninethree months of 20162017 was lower than the 28.0%24.5% recorded for the same period of 2015.2016. The lower operating margin was due to the fair value inventory step-up charge related to the Akron Brass and AWG Fittings acquisitions and the dilutive impact of currentprior year acquisitions resulting from a higher level of amortization asand a lower operating margin run rate from the acquired businesses compared to the existing businesses.historical businesses within the segment. The higher operating income was due to the incremental impact of the currentprior year acquisitions.

Liquidity and Capital Resources
Operating Activities
At September 30, 2016,March 31, 2017, the Company’s cash and cash equivalents totaled $239.4$216.1 million, of which $216.0$186.8 million was held outside of the United States. At September 30, 2016March 31, 2017, working capital was $552.0$545.2 million and the current ratio was 2.83.0 to 1. Cash flows from operating activities for the first ninethree months of 20162017 increased $22.5$14.6 million, or 9%21%, to $284.3$85.0 million compared to the first ninethree months of 2015,2016, due to improved working capital performance,higher net income and lower bonusU.S. federal income tax payments, and the early adoption of ASU 2016-09 which no longer requires the excess tax benefit from share-based compensation to be shown as a reduction within cash flows from operating activities, partially offset by higher U.S. federal income taxbonus payments.
Investing Activities
Cash flows used in investing activities for the first ninethree months of 2016 increased $308.72017 decreased $220.5 million to $506.2$9.6 million compared to the same period in 2015,2016, primarily due to $510.0$221.6 million spent on the acquisitionsacquisition of Akron Brass, AWG Fittings, and SFC Koenig in 2016 compared to $193.2 spent on the acquisitions of Alfa, Novotema, and CPS in 2015, partially offset by $4.0 million in lower capital expenditures and $4.9 million in lower proceeds from sale of businesses.    Brass.
Cash flows provided by operating activities were more than adequate to fund capital expenditures of $28.6$10.2 million and $32.6$8.7 million in the first ninethree months of 20162017 and 20152016, respectively. Capital expenditures were generally for machinery and equipment

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that improved productivity, tooling, business system technology, replacement of equipment and investments in new facilities. Management believes the Company has sufficient capacity in its plants and equipment to meet expected needs for future growth.
Financing Activities
Cash flows provided byused in financing activities for the first ninethree months of 2017 was $141.7$99.4 million compared to cash flows used inprovided by financing activities of $235.6$186.4 million in the same period of 2015,2016, primarily as a result of increased borrowings to fund the Akron Brass acquisition, combined withpartially offset by lower stock repurchases and higher payments under revolving facilities in 20162017 compared to the comparablesame period in 2015.2016.
On June 13, 2016, the Company completed a private placement of $100 million aggregate principal amount of 3.20% Senior Notes due June 13, 2023 and $100 million aggregate principal amount of 3.37% Senior Notes due June 13, 2025 (collectively, the “Notes”) pursuant to a Note Purchase Agreement, dated June 13, 2016 (the “Purchase Agreement”). Each series of Notes bears interest at the stated amount per annum, which is payable semi-annually in arrears on each June 13th and December 13th. The Notes are unsecured obligations of the Company and rank pari passu in right of payment with all of the Company’s other unsecured, unsubordinated debt. The Company may at any time prepay all, or any portion of the Notes; provided that such portion is greater than 5% of the aggregate principal amount of Notes then outstanding. In the event of a prepayment, the Company will pay an amount equal to par plus accrued interest plus a make-whole amount. In addition, the Company may repurchase Notes by making an offer to all holders of the Notes, subject to certain conditions.
The Credit Agreement consists of the Revolving Facility, which is a $700.0 million unsecured, multi-currency bank credit facility expiring on June 23, 2020. At September 30, 2016March 31, 2017, there were $255.1$105.3 million of outstanding borrowings under the Revolving Facility and outstanding letters of credit totaled approximately $8.2$9.1 million. The net available borrowing capacity under the Revolving Facility at September 30, 2016March 31, 2017, was approximately $436.7$585.6 million. Borrowings under the Revolving Facility bear interest, at either an alternate base rate or an adjusted LIBOR rate plus, in each case, an applicable margin. Such applicable margin is based on the Company’s senior, unsecured, long-term debt rating and can range from .005% to 1.50%. Based on the Company’s credit rating at September 30, 2016March 31, 2017, the applicable margin was 1.10%, resulting in a weighted average interest rate of 1.34%1.51% at September 30, 2016.March 31, 2017. Interest is payable (a) in the case of base rate loans, quarterly, and (b) in the case of LIBOR rate loans, on the maturity date of the borrowing, or quarterly from the effective date for borrowings exceeding three months. An annual Revolving Facility fee, also based on the Company’s credit rating, is currently 15 basis points and is payable quarterly.
There are two key financial covenants that the Company is required to maintain in connection with the Revolving Facility and the Notes, which require a minimum interest coverage ratio of 3.0 to 1 and a maximum leverage ratio of 3.50 to 1. At September 30, 2016March 31, 2017, the Company was in compliance with both of these financial covenants, as the Company’s interest coverage ratio was 12.2511.65 to 1 and the leverage ratio was 1.981.78 to 1. There are no financial covenants relating to the 4.5% Senior Notes or 4.2% Senior Notes; however, both are subject to cross-default provisions.

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On December 1, 2015, the Company’s Board of Directors approved a $300.0 million increase in the authorized level for repurchases of common stock. Repurchases under the program will be funded with future cash flow generation or borrowings available under the Revolving Facility. During the first ninethree months of 20162017, the Company purchased a total of 73982 thousand shares at a cost of $55.0 million.$7.6 million, of which $0.6 million settled in April 2017. During the ninethree months ended September 30, 2015,March 31, 2016, the Company purchased 2.4 million628 thousand shares at a cost of $179.4$45.8 million, of which $4.3$1.2 million was settled in October 2015.April 2016. As of September 30, 2016,March 31, 2017, the amount of share repurchase authorization remaining is $580.0572.4 million.
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 on all borrowings, pension and postretirement funding requirements, expected share repurchases and annual dividend payments to holders of the Company’s stock for the remainder of 2016.2017. 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.

Non-GAAP Disclosures

Set forth below are reconciliations of Adjusted operating income, Adjusted net income, Adjusted EPS, and EBITDA to the comparable measures of net income and operating income, as determined in accordance with generally accepted accounting principles in the U.S. GAAP.(“U.S. GAAP”). We have reconciled Adjusted operating income to Operating income; Adjusted net income to Net income; Adjusted EPS to EPS; consolidated EBITDA and segment EBITDA to net income. The reconciliation of segment EBITDA to net income was performed on a consolidated basis due to the fact that we do not allocate consolidated interest expense or the consolidated provision for income taxes to our segments.
EBITDA means earnings before interest, income taxes, depreciation and amortization. Given the acquisitive nature of the Company, which results in a higher level of amortization expense at recently acquired businesses, management uses EBITDA as an internal operating metric to provide another representation of the businesses performance across our three segments and for

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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 our industry. Management believes EBITDA margin is useful for the same reason as EBITDA. EBITDA is also used to calculate certain financial covenants, as discussed in Note 9 of the Notes to Consolidated Financial Statements in Part I, Item 1, “Financial Statements.”
This report references organic sales, a non-GAAP measure, that refers to sales calculated according to U.S. GAAP but excluding amounts from acquired or divested businesses during the first twelve months after acquisition or divestiture and the impact of foreign currency translation. The portion of sales attributable to foreign currency translation is calculated as the difference between (a) the period-to-period change in organic sales and (b) the period-to-period change in organic sales after applying prior period foreign exchange rates to the current year period. Management believes that reporting organic sales provides useful information to investors by helping identify underlying growth trends in our business and facilitating easier comparisons of our revenue performance with prior and future periods and to our peers. The Company excludes the effect of foreign currency translation from organic sales because foreign currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. The Company excludes the effect of acquisitions and divestitures because 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.

Management uses Adjusted operating income, Adjusted net income, and Adjusted EPS as metrics by which to measure performance of the Company since they exclude items that are not reflective of ongoing operations, such as restructuring expenses. 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.

In addition to measuring our cash flow generation and usage based upon the operating, investing and financing classifications included in the Condensed Consolidated Statements of Cash Flows, we also measure free cash flow (a non-GAAP measure) which represents net cash provided by operating activities minus capital expenditures. We believe that free cash flow is an important measure of operating performance because it provides management a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.
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.
     
Reconciliations of Reported-to-Adjusted Operating Income  
1. Reconciliations of Reported-to-Adjusted Operating Income1. Reconciliations of Reported-to-Adjusted Operating Income  
(in thousands) Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 Three Months Ended 
 March 31,
 2016 2015 2016 2015 2017 2016
Reported operating income $108,857
 $121,813
 $324,390
 $333,479
 $115,671
 $103,345
+ Restructuring expenses 
 4,723
 
 4,723
 4,797
 
+ Loss (gain) on sale of businesses - net 2,067
 (18,070) 2,067
 (18,070)
Adjusted operating income $110,924
 $108,466
 $326,457
 $320,132
 $120,468
 $103,345
            
Net sales 530,356
 503,791
 1,582,624
 1,520,870
 553,552
 502,572
Operating margin 20.5% 24.2% 20.5% 21.9% 20.9% 20.6%
Adjusted operating margin 20.9% 21.5% 20.6% 21.0% 21.8% 20.6%

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Reconciliations of Reported-to-Adjusted Net Income  
2. Reconciliations of Reported-to-Adjusted Net Income2. Reconciliations of Reported-to-Adjusted Net Income  
(in thousands) Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 Three Months Ended 
 March 31,
 2016 2015 2016 2015 2017 2016
Reported net income $69,873
 $79,505
 $213,762
 $215,044
 $75,899
 $68,130
+ Restructuring expenses 
 4,723
 
 4,723
 4,797
 
+ Tax impact on restructuring expenses 
 (1,638) 
 (1,638) (1,529) 
+ Loss (gain) on sale of businesses - net 2,067
 (18,070) 2,067
 (18,070)
+ Tax impact on loss (gain) on sales of businesses - net (1,467) 4,839
 (1,467) 4,839
Adjusted net income $70,473
 $69,359
 $214,362
 $204,898
 $79,167
 $68,130
            
Reconciliations of Reported-to-Adjusted EPS   
3. Reconciliations of Reported-to-Adjusted EPS3. Reconciliations of Reported-to-Adjusted EPS   
(shares in thousands) Three Months Ended 
 September 30,
 Nine Months Ended 
 September 30,
 Three Months Ended 
 March 31,
 2016 2015 2016 2015 2017 2016
Reported EPS $0.91
 $1.02
 $2.78
 $2.75
 $0.99
 $0.89
+ Restructuring expenses 
 0.06
 
 0.06
 0.06
 
+ Tax impact on restructuring expenses 
 (0.02) 
 (0.02) (0.02) 
+ Loss (gain) on sale of businesses - net 0.03
 (0.23) 0.03
 (0.23)
+ Tax impact on loss (gain) on sale of businesses - net (0.02) 0.06
 (0.02) 0.06
Adjusted EPS $0.92
 $0.89
 $2.79
 $2.62
 $1.03
 $0.89
            
Diluted weighted average shares 76,880
 77,646
 76,742
 78,266
 76,894
 76,699
           
4. Reconciliations of Reported-to-Adjusted Operating Income and Margin
(dollars in thousands) Three months ended March 31, 2017
  FMT HST FSDP Corporate IDEX
Reported operating income (loss) $57,813
 $42,238
 $32,626
 $(17,006) $115,671
 + Restructuring expenses 1,566
 3,028
 73
 130
 4,797
Adjusted operating income (loss) $59,379
 $45,266
 $32,699
 $(16,876) $120,468
           
Net sales (eliminations) $216,770
 $199,679
 $137,447
 $(344) $553,552
           
Operating margin 26.7% 21.2% 23.7% n/m
 20.9%
Adjusted operating margin 27.4% 22.7% 23.8% n/m
 21.8%

Reconciliation of EBITDA to Net Income          
(in thousands) Three Months Ended September 30, 2016
  FMT HST FSDP Corporate Office Total IDEX
Operating income (loss) $55,600
 $37,204
 $32,189
 $(16,136) $108,857
- Other (income) expense - net (136) (375) (498) (1,355) (2,364)
+ Depreciation & amortization 7,168
 11,163
 3,584
 277
 22,192
EBITDA 62,904
 48,742
 36,271
 (14,504) 133,413
- Interest expense         11,913
- Provision for income taxes         29,435
- Depreciation and amortization         22,192
Net income 
 
 
   $69,873
           
Net sales (intersegment eliminations) $208,335
 $183,564
 $138,767
 $(310) $530,356
Operating margin 26.7% 20.3% 23.2% n/m
 20.5%
EBITDA margin 30.2% 26.6% 26.1% n/m
 25.2%
           
5. Reconciliations of Reported-to-Adjusted Operating Income and Margin
(dollars in thousands) Three months ended March 31, 2016
  FMT HST FSDP Corporate IDEX
Reported operating income (loss) $51,703
 $40,682
 $25,654
 $(14,694) $103,345
 + Restructuring expenses 
 
 
 
 
Adjusted operating income (loss) $51,703
 $40,682
 $25,654
 $(14,694) $103,345
           
Net sales (eliminations) $211,843
 $186,343
 $104,618
 $(232) $502,572
           
Operating margin 24.4% 21.8% 24.5% n/m
 20.6%
Adjusted operating margin 24.4% 21.8% 24.5% n/m
 20.6%

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Reconciliation of EBITDA to Net Income          
(in thousands) Three Months Ended September 30, 2015
  FMT HST FSDP Corporate Office Total IDEX
Operating income (loss) $46,910
 $38,371
 $32,536
 $3,996
 $121,813
- Other (income) expense - net (82) (877) (247) 513
 (693)
+ Depreciation & amortization 7,311
 11,179
 1,513
 374
 20,377
EBITDA 54,303
 50,427
 34,296
 3,857
 142,883
- Interest expense         10,229
- Provision for income taxes         32,772
- Depreciation and amortization         20,377
Net income         $79,505
           
Net sales (intersegment eliminations) $212,101
 $184,893
 $107,009
 $(212) $503,791
Operating margin 22.1% 20.8% 30.4% n/m
 24.2%
EBITDA margin 25.6% 27.3% 32.0% n/m
 28.4%
     
Reconciliation of EBITDA to Net Income  
6. Reconciliation of EBITDA to Net Income  
(in thousands) Nine Months Ended September 30, 2016 Three Months Ended March 31, 2017
 FMT HST FSDP Corporate Office Total IDEX FMT HST FSDP Corporate IDEX
Operating income (loss) $160,866
 $119,028
 $91,709
 $(47,213) $324,390
 $57,813
 $42,238
 $32,626
 $(17,006) $115,671
- Other (income) expense - net (350) (1,505) (1,342) (1,785) (4,982) 30
 143
 36
 (517) (308)
+ Depreciation and amortization 22,011
 33,044
 8,316
 953
 64,324
 5,644
 11,264
 3,577
 207
 20,692
EBITDA 183,227
 153,577
 101,367
 (44,475) 393,696
 63,427
 53,359
 36,167
 (16,282) 136,671
- Interest expense         33,607
         11,552
- Provision for income taxes         82,003
         28,528
- Depreciation and amortization         64,324
         20,692
Net income 
 
 
   $213,762
 
 
 
   $75,899
                    
Net sales (intersegment eliminations) $641,988
 $556,475
 $384,996
 $(835) $1,582,624
 $216,770
 $199,679
 $137,447
 $(344) $553,552
Operating margin 25.1% 21.4% 23.8% n/m
 20.5% 26.7% 21.2% 23.7% n/m
 20.9%
EBITDA margin 28.5% 27.6% 26.3% n/m
 24.9% 29.3% 26.7% 26.3% n/m
 24.7%
7. Reconciliation of EBITDA to Net Income          
(in thousands) Three Months Ended March 31, 2016
  FMT HST FSDP Corporate IDEX
Operating income (loss) $51,703
 $40,682
 $25,654
 $(14,694) $103,345
 - Other (income) expense - net 135
 (390) 160
 139
 44
+ Depreciation and amortization 7,256
 10,861
 1,482
 358
 19,957
EBITDA 58,824
 51,933
 26,976
 (14,475) 123,258
- Interest expense         10,489
- Provision for income taxes         24,682
- Depreciation and amortization         19,957
Net income 
 
 
   $68,130
           
Net sales (intersegment eliminations) $211,843
 $186,343
 $104,618
 $(232) $502,572
Operating margin 24.4% 21.8% 24.5% n/m
 20.6%
EBITDA margin 27.8% 27.9% 25.8% n/m
 24.5%

34
8. Reconciliation of Net Sales to Net Organic Sales Three Months Ended March 31, 2017
  FMT HST FSDP IDEX
         
Change in net sales 2 % 7 % 31 % 10 %
- Net impact from acquisitions/divestitures (3)% 5 % 33 % 7 %
- Impact from foreign currency (1)% (3)% (3)% (2)%
Change in net organic sales 6 % 5 % 1 % 5 %

9. Reconciliation of Net Sales to Net Organic Sales Three Months Ended March 31, 2016
  FMT HST FSDP IDEX
         
Change in net sales (3)% 4 % (2)%  %
- Impact from acquisitions 3 % 3 % 5 % 4 %
- Impact from foreign currency (1)% (1)% (1)% (1)%
Change in net organic sales (5)% 2 % (6)% (3)%

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Reconciliation of EBITDA to Net Income          
(in thousands) Nine Months Ended September 30, 2015
  FMT HST FSDP Corporate Office Total IDEX
Operating income (loss) $154,665
 $117,888
 $91,180
 $(30,254) $333,479
 - Other (income) expense - net (894) (347) (1,091) 743
 (1,589)
+ Depreciation and amortization 20,321
 31,874
 4,574
 1,205
 57,974
EBITDA 175,880
 150,109
 96,845
 (29,792) 393,042
- Interest expense         31,410
- Provision for income taxes         88,614
- Depreciation and amortization         57,974
Net income 
 
 
   $215,044
           
Net sales (intersegment eliminations) $645,642
 $552,418
 $325,572
 $(2,762) $1,520,870
Operating margin 24.0% 21.3% 28.0% n/m
 21.9%
EBITDA margin 27.2% 27.2% 29.7% n/m
 25.8%
       
10. Reconciliations of Free Cash Flow
(in thousands) For the Quarter Ended
  March 31, December 31,
  2017 2016 2016
Cash flow from operating activities $84,979
 $70,365
 $115,593
 - Capital expenditures 10,162
 8,650
 9,600
Free cash flow $74,817
 $61,715
 $105,993




Reconciliation of Net Sales to Net Organic Sales Three Months Ended September 30, 2016
  FMT HST FSDP Total IDEX
         
Change in net sales (2)% (1)% 30 % 5 %
- Net impact from acquisitions/divestitures (1)% 2 % 38 % 8 %
- Impact from foreign currency (1)% (2)% (2)% (1)%
Net organic sales  % (1)% (6)% (2)%

Reconciliation of Net Sales to Net Organic Sales Nine Months Ended September 30, 2016
  FMT HST FSDP Total IDEX
         
Change in net sales (1)% 1 % 18 % 4 %
- Net impact from acquisitions/divestitures 1 % 2 % 24 % 7 %
- Impact from foreign currency (1)% (1)% (1)% (1)%
Net organic sales (1)%  % (5)% (2)%

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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. 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, provides for 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 derivative financial or commodity 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.
Foreign Currency Exchange Rates
The Company’s foreign currency exchange rate risk is limited principally to the Euro, British Pound, Canadian Dollar, Swiss Franc, Indian Rupee and Chinese Renminbi. The Company manages its foreign exchange risk principally through invoicing customers in the same currency as the cost incurred to produce our products. The effect of transaction gains and losses is reported within other (income) expense-net on the Consolidated Statements of Operations.
Interest Rate Fluctuation
The Company’s interest rate exposure is primarily related to the $1.1$1.0 billion of total debt outstanding at September 30, 2016.March 31, 2017. Approximately 23%11% of the debt, representing the amount drawn on the Revolving Facility at September 30, 2016,March 31, 2017, is priced at interest rates that float with the market. A 50 basis point movement in the interest rate on the floating rate debt would result in an approximate $1.3$0.5 million annualized increase or decrease in interest expense and cash flows. The remaining debt is fixed rate debt.

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 Rule 13a-15(b) promulgated under the Securities Exchange Act, 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 the Company’s 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 as of September 30, 2016March 31, 2017, that the Company’s disclosure controls and procedures were effective.
There has been no change in the Company’s internal controls 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 controls over financial reporting.

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PART II. OTHER INFORMATION
 
Item 1.Legal Proceedings.
The Company and six 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. Claims have been filed in jurisdictions throughout the United States. Most of the claims resolved to date have been dismissed without payment. The balance have been settled for various insignificant 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.
The Company is also party to various other legal proceedings arising in the ordinary course of business, none of which are expected to have a material impact on its financial condition, results of operations or cash flows.
 
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 September 30, 2016March 31, 2017:
 
Period
Total Number of
Shares Purchased
 
Average Price
Paid per Share
 
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs(1)
 
Maximum Dollar
Value that May Yet
be Purchased
Under the Plans
or Programs(1)
July 1, 2016 to July 31, 201612,600
 $84.17
 12,600
 $580,010,084
August 1, 2016 to August 31, 2016
 
 
 580,010,084
September 1, 2016 to September 30, 2016
 
 
 580,010,084
Total12,600
 $84.17
 12,600
 $580,010,084
Period
Total Number of
Shares Purchased
 
Average Price
Paid per Share
 
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs(1)
 
Maximum Dollar
Value that May Yet
be Purchased
Under the Plans
or Programs(1)
January 1, 2017 to January 31, 2017
 $
 
 $580,010,084
February 1, 2017 to February 28, 201736,000
 91.60
 36,000
 576,712,400
March 1, 2017 to March 31, 201746,000
 92.71
 46,000
 572,447,713
Total82,000
 $92.22
 82,000
 $572,447,713
 
(1)
On December 1, 2015, the Company announced that its Board of Directors had increased the authorized level for repurchases of its common stock by $300.0 million. This followed the prior Board of Directors repurchase authorization of $400.0 million, announced by the Company on November 6, 2014. These authorizations have no expiration date.

Item 6.Exhibits.
The exhibits listed in the accompanying “Exhibit Index” are filed or furnished as part of this report.


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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/ MICHAEL J. YATES
  Michael J. Yates
  Vice President Chief Financial Officer and Chief Accounting Officer (Principal Accounting and Financial Officer)
Date: October 25, 2016April 26, 2017

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EXHIBIT INDEX
 
Exhibit
Number
 Description
3.1 Restated Certificate of Incorporation of IDEX Corporation (incorporated by reference to Exhibit No. 3.1 to the Registration Statement on Form S-1 of IDEX, et al., Registration No. 33-21205, as filed on April 21, 1988)
  
3.1(a) Amendment to Restated Certificate of Incorporation of IDEX Corporation (incorporated by reference to Exhibit No. 3.1(a) to the Quarterly Report of IDEX on Form 10-Q for the quarter ended March 31, 1996, Commission File No. 1-10235)
  
3.1(b) Amendment to Restated Certificate of Incorporation of IDEX Corporation (incorporated by reference to Exhibit No. 3.1(b) to the Current Report of IDEX on Form 8-K dated March 24, 2005, Commission File No. 1-10235)
  
3.2 Amended and Restated By-Laws of IDEX Corporation (incorporated by reference to Exhibit No. 3.1 to the Current Report of IDEX Corporation on Form 8-K filed November 14, 2011, Commission File No. 1-10235)
   
3.2(a) Amended and Restated Article III, Section 13 of the Amended and Restated By-Laws of IDEX Corporation (incorporated by reference to Exhibit No. 3.2(a) to Post-Effective Amendment No. 3 to the Registration Statement on Form S-1 of IDEX, et al., Registration No. 33-21205, as filed on February 12, 1990)
   
*10.1Amendment to Letter Agreement dated September 24, 2015, between IDEX Corporation and Denise R. Cade, effective as of April 24, 2017. **
*10.2Amendment to Letter Agreement dated February 12, 2014, between IDEX Corporation and Eric D. Ashleman, effective as of April 24, 2017. **
*10.3Amendment to Letter Agreement dated December 30, 2016, between IDEX Corporation and William K. Grogan, effective as of April 24, 2017. **
*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 September 30, 2016March 31, 2017 formatted in XBRL includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Earnings, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statement of Shareholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements.
   
* Filed herewith
** Management contract or compensatory plan or agreement.

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