UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________

Form 10-Q


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	~~June~~September 30, 2020


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

Commission file number 1-10235

IDEX CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware

36-3555336

(State or other jurisdiction of
incorporation or organization)

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

~~1925 West Field Court,~~3100 Sanders Road,

Suite ~~200,~~301,

~~Lake Forest,~~Northbrook,

Illinois

~~60045~~60062

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number: (847) 498-7070

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

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, par value $.01 per share

IEX

New York Stock Exchange

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

Yes ☑ No ☐

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

Yes ☑ No ☐

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

Table of Contents

Large accelerated filer

☑

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

Yes ☐ No ☑

Number of shares of common stock of IDEX Corporation outstanding as of ~~July 17,~~October 23, 2020: ~~75,510,410.~~75,705,784.

Table of Contents

TABLE OF CONTENTS


Part I. Financial Information
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Shareholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3233
	Cautionary Statement Under the Private Securities Litigation Reform Act	3233
	Overview	3233
	Results of Operations	3435
	Liquidity and Capital Resources	4041
	Non-GAAP Disclosures	4243
	Critical Accounting Policies	4849
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4849
Item 4.	Controls and Procedures	4850

Part II. Other Information
Item 1.	Legal Proceedings	4951
Item 1A.	Risk Factors	4951
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5052
Item 6.	Exhibits	5153
Signatures			5254

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

IDEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands except share and per share amounts)

(unaudited)


		June 30, 2020		December 31, 2019			September 30, 2020		December 31, 2019
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	746,348	$	632,581	Cash and cash equivalents	$	877,758	$	632,581
Receivables, less allowance for doubtful accounts of $5,890 at June 30, 2020 and $6,347 at December 31, 2019		270,255		298,186
Receivables, less allowance for doubtful accounts of $6,089 at September 30, 2020 and $6,347 at December 31, 2019						Receivables, less allowance for doubtful accounts of $6,089 at September 30, 2020 and $6,347 at December 31, 2019	275,432		298,186
Inventories	Inventories	324,931		293,467		Inventories	302,410		293,467
Other current assets	Other current assets	55,716		37,211		Other current assets	65,152		37,211
Total current assets	Total current assets	1,397,250		1,261,445		Total current assets	1,520,752		1,261,445
Property, plant and equipment - net	Property, plant and equipment - net	281,852		280,316		Property, plant and equipment - net	293,304		280,316
Goodwill	Goodwill	1,842,730		1,779,745		Goodwill	1,863,577		1,779,745
Intangible assets - net	Intangible assets - net	422,228		388,031		Intangible assets - net	417,080		388,031
Other noncurrent assets	Other noncurrent assets	129,532		104,375		Other noncurrent assets	130,882		104,375
Total assets	Total assets	$	4,073,592	$	3,813,912	Total assets	$	4,225,595	$	3,813,912
LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY					LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities	Current liabilities					Current liabilities
Trade accounts payable	Trade accounts payable	$	137,413	$	138,463	Trade accounts payable	$	134,782	$	138,463
Accrued expenses	Accrued expenses	225,931		180,290		Accrued expenses	236,937		180,290
Short-term borrowings	Short-term borrowings	228		388		Short-term borrowings	150		388
Dividends payable	Dividends payable	37,735		38,736		Dividends payable	37,830		38,736
Total current liabilities	Total current liabilities	401,307		357,877		Total current liabilities	409,699		357,877
Long-term borrowings	Long-term borrowings	1,044,445		848,864		Long-term borrowings	1,044,112		848,864
Deferred income taxes	Deferred income taxes	150,417		146,574		Deferred income taxes	151,924		146,574
Other noncurrent liabilities	Other noncurrent liabilities	216,386		197,368		Other noncurrent liabilities	223,331		197,368
Total liabilities	Total liabilities	1,812,555		1,550,683		Total liabilities	1,829,066		1,550,683
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies
Shareholders’ equity	Shareholders’ equity					Shareholders’ equity
Preferred stock:	Preferred stock:					Preferred stock:
Authorized: 5,000,000 shares, $.01 per share par value; Issued: NaN	Authorized: 5,000,000 shares, $.01 per share par value; Issued: NaN	—		—		Authorized: 5,000,000 shares, $.01 per share par value; Issued: NaN	0		0
Common stock:	Common stock:					Common stock:
Authorized: 150,000,000 shares, $.01 per share par value	Authorized: 150,000,000 shares, $.01 per share par value					Authorized: 150,000,000 shares, $.01 per share par value
Issued: 89,921,782 shares at June 30, 2020 and 89,948,374 shares at December 31, 2019		899		899
Issued: 89,919,727 shares at September 30, 2020 and 89,948,374 shares at December 31, 2019						Issued: 89,919,727 shares at September 30, 2020 and 89,948,374 shares at December 31, 2019	899		899
Additional paid-in capital	Additional paid-in capital	772,669		760,453		Additional paid-in capital	778,469		760,453
Retained earnings	Retained earnings	2,712,312		2,615,131		Retained earnings	2,778,130		2,615,131
Treasury stock at cost: 14,451,474 shares at June 30, 2020 and 13,860,340 shares at December 31, 2019		(1,095,288)		(985,909)
Treasury stock at cost: 14,260,042 shares at September 30, 2020 and 13,860,340 shares at December 31, 2019						Treasury stock at cost: 14,260,042 shares at September 30, 2020 and 13,860,340 shares at December 31, 2019	(1,079,720)		(985,909)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(129,555)		(127,345)		Accumulated other comprehensive income (loss)	(81,249)		(127,345)
Total shareholders’ equity	Total shareholders’ equity	2,261,037		2,263,229		Total shareholders’ equity	2,396,529		2,263,229
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	4,073,592	$	3,813,912	Total liabilities and shareholders’ equity	$	4,225,595	$	3,813,912

See Notes to Condensed Consolidated Financial Statements

Table of Contents

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except per share amounts)

(unaudited)


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Net sales	Net sales	$	561,249	$	642,099	$	1,155,711	$	1,264,330	Net sales	$	581,113	$	624,246	$	1,736,824	$	1,888,576
Cost of sales	Cost of sales	326,449		349,762		648,955		688,159		Cost of sales	329,613		342,268		978,568		1,030,427
Gross profit	Gross profit	234,800		292,337		506,756		576,171		Gross profit	251,500		281,978		758,256		858,149
Selling, general and administrative expenses	Selling, general and administrative expenses	120,365		134,928		252,380		270,980		Selling, general and administrative expenses	117,370		128,257		369,750		399,237

Restructuring expenses	Restructuring expenses	3,841		2,126		3,841		2,126		Restructuring expenses	2,917		11,956		6,758		14,082
Operating income	Operating income	110,594		155,283		250,535		303,065		Operating income	131,213		141,765		381,748		444,830
Other (income) expense - net	Other (income) expense - net	6,460		(378)		8,025		(518)		Other (income) expense - net	(704)		1,219		7,321		701
Interest expense	Interest expense	12,439		11,011		23,316		21,932		Interest expense	10,642		11,330		33,958		33,262
Income before income taxes	Income before income taxes	91,695		144,650		219,194		281,651		Income before income taxes	121,275		129,216		340,469		410,867
Provision for income taxes	Provision for income taxes	20,831		31,441		46,332		58,174		Provision for income taxes	17,427		24,022		63,759		82,196
Net income	Net income	$	70,864	$	113,209	$	172,862	$	223,477	Net income	$	103,848	$	105,194	$	276,710	$	328,671

Basic earnings per common share	Basic earnings per common share	$	0.94	$	1.50	$	2.29	$	2.96	Basic earnings per common share	$	1.38	$	1.39	$	3.66	$	4.34
Diluted earnings per common share	Diluted earnings per common share	$	0.93	$	1.48	$	2.27	$	2.92	Diluted earnings per common share	$	1.37	$	1.37	$	3.64	$	4.30

Share data:	Share data:									Share data:
Basic weighted average common shares outstanding	Basic weighted average common shares outstanding	75,171		75,460		75,459		75,450		Basic weighted average common shares outstanding	75,352		75,698		75,423		75,532
Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding	75,937		76,387		76,198		76,334		Diluted weighted average common shares outstanding	75,960		76,577		76,119		76,415

See Notes to Condensed Consolidated Financial Statements

Table of Contents

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Net income	Net income	$	70,864	$	113,209	$	172,862	$	223,477	Net income	$	103,848	$	105,194	$	276,710	$	328,671
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Reclassification adjustments for derivatives, net of tax	Reclassification adjustments for derivatives, net of tax	2,116		1,224		3,310		2,451		Reclassification adjustments for derivatives, net of tax	672		1,210		3,982		3,661
Pension and other postretirement adjustments, net of tax	Pension and other postretirement adjustments, net of tax	(631)		1,256		1,665		2,518		Pension and other postretirement adjustments, net of tax	291		1,663		1,956		4,181
Cumulative translation adjustment	Cumulative translation adjustment	19,271		2,628		(7,185)		(653)		Cumulative translation adjustment	47,343		(37,825)		40,158		(38,478)

Other comprehensive income (loss)	Other comprehensive income (loss)	20,756		5,108		(2,210)		4,316		Other comprehensive income (loss)	48,306		(34,952)		46,096		(30,636)
Comprehensive income	Comprehensive income	$	91,620	$	118,317	$	170,652	$	227,793	Comprehensive income	$	152,154	$	70,242	$	322,806	$	298,035

See Notes to Condensed Consolidated Financial Statements

Table of Contents

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands except share amounts)

(unaudited)


						Accumulated Other Comprehensive Income (Loss)																			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			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, 2019	Balance, December 31, 2019	$	761,352	$	2,615,131	$	(94,353)	$	(25,809)	$	(7,183)	$	(985,909)	$	2,263,229	Balance, December 31, 2019	$	761,352	$	2,615,131	$	(94,353)	$	(25,809)	$	(7,183)	$	(985,909)	$	2,263,229
Net income	Net income	—		101,998		—		—		—		—		101,998		Net income	—		101,998		—		—		—		—		101,998
Cumulative translation adjustment	Cumulative translation adjustment	—		—		(26,456)		—		—		—		(26,456)		Cumulative translation adjustment	—		—		(26,456)		—		—		—		(26,456)
Net change in retirement obligations (net of tax of $578)	Net change in retirement obligations (net of tax of $578)	—		—		—		2,296		—		—		2,296		Net change in retirement obligations (net of tax of $578)	—		—		—		2,296		—		—		2,296
Net change on derivatives designated as cash flow hedges (net of tax of $351)	Net change on derivatives designated as cash flow hedges (net of tax of $351)	—		—		—		—		1,194		—		1,194		Net change on derivatives designated as cash flow hedges (net of tax of $351)	—		—		—		—		1,194		—		1,194
Issuance of 131,757 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $3,061)	Issuance of 131,757 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $3,061)	—		—		—		—		—		2,089		2,089		Issuance of 131,757 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $3,061)	—		—		—		—		—		2,089		2,089
Repurchase of 866,823 shares of common stock	Repurchase of 866,823 shares of common stock	—		—		—		—		—		(108,907)		(108,907)		Repurchase of 866,823 shares of common stock	—		—		—		—		—		(108,907)		(108,907)
Shares surrendered for tax withholding	Shares surrendered for tax withholding	—		—		—		—		—		(12,119)		(12,119)		Shares surrendered for tax withholding	—		—		—		—		—		(12,119)		(12,119)
Share-based compensation	Share-based compensation	6,463		—		—		—		—		—		6,463		Share-based compensation	6,463		—		—		—		—		—		6,463

Balance, March 31, 2020	Balance, March 31, 2020	$	767,815	$	2,717,129	$	(120,809)	$	(23,513)	$	(5,989)	$	(1,104,846)	$	2,229,787	Balance, March 31, 2020	$	767,815	$	2,717,129	$	(120,809)	$	(23,513)	$	(5,989)	$	(1,104,846)	$	2,229,787
Net income	Net income	—		70,864		—		—		—		—		70,864		Net income	—		70,864		—		—		—		—		70,864

Cumulative translation adjustment	Cumulative translation adjustment	—		—		19,271		—		—		—		19,271		Cumulative translation adjustment	—		—		19,271		—		—		—		19,271
Net change in retirement obligations (net of tax of $62)	Net change in retirement obligations (net of tax of $62)	—		—		—		(631)		—		—		(631)		Net change in retirement obligations (net of tax of $62)	—		—		—		(631)		—		—		(631)
Net change on derivatives designated as cash flow hedges (net of tax of $623)	Net change on derivatives designated as cash flow hedges (net of tax of $623)	—		—		—		—		2,116		—		2,116		Net change on derivatives designated as cash flow hedges (net of tax of $623)	—		—		—		—		2,116		—		2,116
Issuance of 145,263 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $594)	Issuance of 145,263 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $594)	—		—		—		—		—		11,022		11,022		Issuance of 145,263 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $594)	—		—		—		—		—		11,022		11,022
Repurchase of 9,600 shares of common stock	Repurchase of 9,600 shares of common stock	—		—		—		—		—		(1,435)		(1,435)		Repurchase of 9,600 shares of common stock	—		—		—		—		—		(1,435)		(1,435)
Shares surrendered for tax withholding	Shares surrendered for tax withholding	—		—		—		—		—		(29)		(29)		Shares surrendered for tax withholding	—		—		—		—		—		(29)		(29)
Share-based compensation	Share-based compensation	5,753		—		—		—		—		—		5,753		Share-based compensation	5,753		—		—		—		—		—		5,753
Cash dividends declared - $1.00 per common share outstanding	Cash dividends declared - $1.00 per common share outstanding	—		(75,681)		—		—		—		—		(75,681)		Cash dividends declared - $1.00 per common share outstanding	—		(75,681)		—		—		—		—		(75,681)
Balance, June 30, 2020	Balance, June 30, 2020	$	773,568	$	2,712,312	$	(101,538)	$	(24,144)	$	(3,873)	$	(1,095,288)	$	2,261,037	Balance, June 30, 2020	$	773,568	$	2,712,312	$	(101,538)	$	(24,144)	$	(3,873)	$	(1,095,288)	$	2,261,037
Net income																Net income	—		103,848		—		—		—		—		103,848
Cumulative translation adjustment																Cumulative translation adjustment	—		—		47,343		—		—		—		47,343
Net change in retirement obligations (net of tax of $171)																Net change in retirement obligations (net of tax of $171)	—		—		—		291		—		—		291
Net change on derivatives designated as cash flow hedges (net of tax of $197)																Net change on derivatives designated as cash flow hedges (net of tax of $197)	—		—		—		—		672		—		672
Issuance of 191,432 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $837)																Issuance of 191,432 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $837)	—		—		—		—		—		15,618		15,618

Shares surrendered for tax withholding																Shares surrendered for tax withholding	—		—		—		—		—		(50)		(50)
Share-based compensation																Share-based compensation	5,800		—		—		—		—		—		5,800
Cash dividends declared - $0.50 per common share outstanding																Cash dividends declared - $0.50 per common share outstanding	—		(38,030)		—		—		—		—		(38,030)
Balance, September 30, 2020																Balance, September 30, 2020	$	779,368	$	2,778,130	$	(54,195)	$	(23,853)	$	(3,201)	$	(1,079,720)	$	2,396,529

See Notes to Condensed Consolidated Financial Statements

Table of Contents

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Continued)

(in thousands except share amounts)

(unaudited)


						Accumulated Other Comprehensive Income (Loss)																			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			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, 2018	Balance, December 31, 2018	$	739,240	$	2,342,079	$	(94,420)	$	(22,740)	$	(12,065)	$	(957,454)	$	1,994,640	Balance, December 31, 2018	$	739,240	$	2,342,079	$	(94,420)	$	(22,740)	$	(12,065)	$	(957,454)	$	1,994,640
Net income	Net income	—		110,268		—		—		—		—		110,268		Net income	—		110,268		—		—		—		—		110,268
Adjustment for adoption of ASU 2016-02	Adjustment for adoption of ASU 2016-02	—		28		—		—		—		—		28		Adjustment for adoption of ASU 2016-02	—		28		—		—		—		—		28
Cumulative translation adjustment	Cumulative translation adjustment	—		—		(3,281)		—		—		—		(3,281)		Cumulative translation adjustment	—		—		(3,281)		—		—		—		(3,281)
Net change in retirement obligations (net of tax of $438)	Net change in retirement obligations (net of tax of $438)	—		—		—		1,262		—		—		1,262		Net change in retirement obligations (net of tax of $438)	—		—		—		1,262		—		—		1,262
Net change on derivatives designated as cash flow hedges (net of tax of $361)	Net change on derivatives designated as cash flow hedges (net of tax of $361)	—		—		—		—		1,227		—		1,227		Net change on derivatives designated as cash flow hedges (net of tax of $361)	—		—		—		—		1,227		—		1,227
Issuance of 264,090 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $3,415)	Issuance of 264,090 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $3,415)	—		—		—		—		—		8,870		8,870		Issuance of 264,090 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $3,415)	—		—		—		—		—		8,870		8,870
Repurchase of 369,810 shares of common stock	Repurchase of 369,810 shares of common stock	—		—		—		—		—		(51,706)		(51,706)		Repurchase of 369,810 shares of common stock	—		—		—		—		—		(51,706)		(51,706)
Shares surrendered for tax withholding	Shares surrendered for tax withholding	—		—		—		—		—		(11,479)		(11,479)		Shares surrendered for tax withholding	—		—		—		—		—		(11,479)		(11,479)
Share-based compensation	Share-based compensation	5,403		—		—		—		—		—		5,403		Share-based compensation	5,403		—		—		—		—		—		5,403
Balance, March 31, 2019	Balance, March 31, 2019	$	744,643	$	2,452,375	$	(97,701)	$	(21,478)	$	(10,838)	$	(1,011,769)	$	2,055,232	Balance, March 31, 2019	$	744,643	$	2,452,375	$	(97,701)	$	(21,478)	$	(10,838)	$	(1,011,769)	$	2,055,232
Net income	Net income	—		113,209		—		—		—		—		113,209		Net income	—		113,209		—		—		—		—		113,209

Cumulative translation adjustment	Cumulative translation adjustment	—		—		2,628		—		—		—		2,628		Cumulative translation adjustment	—		—		2,628		—		—		—		2,628
Net change in retirement obligations (net of tax of $435)	Net change in retirement obligations (net of tax of $435)	—		—		—		1,256		—		—		1,256		Net change in retirement obligations (net of tax of $435)	—		—		—		1,256		—		—		1,256
Net change on derivatives designated as cash flow hedges (net of tax of $359)	Net change on derivatives designated as cash flow hedges (net of tax of $359)	—		—		—		—		1,224		—		1,224		Net change on derivatives designated as cash flow hedges (net of tax of $359)	—		—		—		—		1,224		—		1,224
Issuance of 169,785 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $679)	Issuance of 169,785 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $679)	—		—		—		—		—		11,891		11,891		Issuance of 169,785 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $679)	—		—		—		—		—		11,891		11,891
Repurchase of 19,143 shares of common stock	Repurchase of 19,143 shares of common stock	—		—		—		—		—		(2,962)		(2,962)		Repurchase of 19,143 shares of common stock	—		—		—		—		—		(2,962)		(2,962)
Shares surrendered for tax withholding	Shares surrendered for tax withholding	—		—		—		—		—		(30)		(30)		Shares surrendered for tax withholding	—		—		—		—		—		(30)		(30)
Share-based compensation	Share-based compensation	5,266		—		—		—		—		—		5,266		Share-based compensation	5,266		—		—		—		—		—		5,266
Cash dividends declared - $1.00 per common share outstanding	Cash dividends declared - $1.00 per common share outstanding	—		(75,673)		—		—		—		—		(75,673)		Cash dividends declared - $1.00 per common share outstanding	—		(75,673)		—		—		—		—		(75,673)
Balance, June 30, 2019	Balance, June 30, 2019	$	749,909	$	2,489,911	$	(95,073)	$	(20,222)	$	(9,614)	$	(1,002,870)	$	2,112,041	Balance, June 30, 2019	$	749,909	$	2,489,911	$	(95,073)	$	(20,222)	$	(9,614)	$	(1,002,870)	$	2,112,041

Net income																Net income	—		105,194		—		—		—		—		105,194
Cumulative translation adjustment																Cumulative translation adjustment	—		—		(37,825)		—		—		—		(37,825)
Net change in retirement obligations (net of tax of $525)																Net change in retirement obligations (net of tax of $525)	—		—		—		1,663		—		—		1,663
Net change on derivatives designated as cash flow hedges (net of tax of $356)																Net change on derivatives designated as cash flow hedges (net of tax of $356)	—		—		—		—		1,210		—		1,210
Issuance of 215,823 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $1,171)																Issuance of 215,823 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $1,171)	—		—		—		—		—		14,834		14,834
Shares surrendered for tax withholding																Shares surrendered for tax withholding	—		—		—		—		—		(1,074)		(1,074)
Share-based compensation																Share-based compensation	5,692		—		—		—		—		—		5,692
Cash dividends declared - $0.50 per common share outstanding																Cash dividends declared - $0.50 per common share outstanding	—		(38,682)		—		—		—		—		(38,682)
Balance, September 30, 2019																Balance, September 30, 2019	$	755,601	$	2,556,423	$	(132,898)	$	(18,559)	$	(8,404)	$	(989,110)	$	2,163,053

See Notes to Condensed Consolidated Financial Statements

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IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


		Six Months Ended June 30,							Nine Months Ended September 30,
		2020		2019			2020		2019
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income	Net income	$	172,862	$	223,477	Net income	$	276,710	$	328,671
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:

Asset impairments						Asset impairments	85		9,680
Depreciation and amortization	Depreciation and amortization	20,591		19,870		Depreciation and amortization	30,851		29,599
Amortization of intangible assets	Amortization of intangible assets	20,032		17,953		Amortization of intangible assets	31,123		27,747
Amortization of debt issuance expenses	Amortization of debt issuance expenses	976		669		Amortization of debt issuance expenses	1,351		1,013
Share-based compensation expense	Share-based compensation expense	13,665		14,413		Share-based compensation expense	21,155		20,620
Deferred income taxes	Deferred income taxes	2,421		10,685		Deferred income taxes	1,323		11,528
Non-cash interest expense associated with forward starting swaps	Non-cash interest expense associated with forward starting swaps	4,284		3,171		Non-cash interest expense associated with forward starting swaps	5,153		4,737
Changes in (net of the effect from acquisitions):	Changes in (net of the effect from acquisitions):					Changes in (net of the effect from acquisitions):
Receivables	Receivables	34,253		(14,177)		Receivables	33,291		(2,071)
Inventories	Inventories	(9,529)		(21,007)		Inventories	17,920		(16,987)
Other current assets	Other current assets	(18,421)		(12,382)		Other current assets	(27,655)		(19,186)
Trade accounts payable	Trade accounts payable	(6,842)		17,276		Trade accounts payable	(11,496)		2,807
Accrued expenses	Accrued expenses	17,776		(39,602)		Accrued expenses	24,333		(23,222)
Other - net	Other - net	2,145		(508)		Other - net	3,755		1,966
Net cash flows provided by operating activities	Net cash flows provided by operating activities	254,213		219,838		Net cash flows provided by operating activities	407,899		376,902
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(21,085)		(25,742)		Purchases of property, plant and equipment	(39,438)		(36,773)

Acquisition of businesses, net of cash acquired	Acquisition of businesses, net of cash acquired	(120,839)		—		Acquisition of businesses, net of cash acquired	(118,159)		(87,180)

Proceeds from disposal of fixed assets	Proceeds from disposal of fixed assets	2,114		780		Proceeds from disposal of fixed assets	2,230		957
Other - net	Other - net	(636)		501		Other - net	(238)		407
Net cash flows (used in) investing activities		(140,446)		(24,461)
Net cash flows used in investing activities						Net cash flows used in investing activities	(155,605)		(122,589)
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities

Borrowings under revolving credit facilities	Borrowings under revolving credit facilities	150,000		—		Borrowings under revolving credit facilities	150,000		0
Proceeds from issuance of 3.0% Senior Notes	Proceeds from issuance of 3.0% Senior Notes	499,100		—		Proceeds from issuance of 3.0% Senior Notes	499,100		0
Payment of 4.5% Senior Notes	Payment of 4.5% Senior Notes	(300,000)		—		Payment of 4.5% Senior Notes	(300,000)		0
Payments under revolving credit facilities	Payments under revolving credit facilities	(150,000)		—		Payments under revolving credit facilities	(150,000)		0

Payments under other long-term borrowings						Payments under other long-term borrowings	(352)		(49,923)
Payment of make-whole redemption premium	Payment of make-whole redemption premium	(6,756)		—		Payment of make-whole redemption premium	(6,756)		0
Debt issuance costs	Debt issuance costs	(4,166)		—		Debt issuance costs	(4,741)		0
Dividends paid	Dividends paid	(76,498)		(71,283)		Dividends paid	(114,248)		(109,227)
Proceeds from stock option exercises	Proceeds from stock option exercises	13,111		20,761		Proceeds from stock option exercises	28,729		35,595
Repurchases of common stock	Repurchases of common stock	(110,342)		(54,668)		Repurchases of common stock	(110,342)		(54,668)
Shares surrendered for tax withholding	Shares surrendered for tax withholding	(12,148)		(11,509)		Shares surrendered for tax withholding	(12,198)		(12,583)

Other - net	Other - net	(251)		(1,929)		Other - net	0		(1,865)
Net cash flows provided by (used in) financing activities		2,050		(118,628)
Net cash flows used in financing activities						Net cash flows used in financing activities	(20,808)		(192,671)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(2,050)		33		Effect of exchange rate changes on cash and cash equivalents	13,691		(12,064)
Net increase in cash	Net increase in cash	113,767		76,782		Net increase in cash	245,177		49,578
Cash and cash equivalents at beginning of year	Cash and cash equivalents at beginning of year	632,581		466,407		Cash and cash equivalents at beginning of year	632,581		466,407
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	746,348	$	543,189	Cash and cash equivalents at end of period	$	877,758	$	515,985

Supplemental cash flow information	Supplemental cash flow information					Supplemental cash flow information
Cash paid for:	Cash paid for:					Cash paid for:
Interest	Interest	$	16,089	$	18,282	Interest	$	16,415	$	18,832
Income taxes	Income taxes	21,781		55,702		Income taxes	66,268		84,326
Significant non-cash activities:						Significant non-cash activities:

Debt acquired with acquisition of business						Debt acquired with acquisition of business	$	0	$	51,130

See Notes to Condensed Consolidated Financial Statements

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IDEX CORPORATION

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 ~~six~~nine months ended ~~June~~September 30, 2020 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, 2019.

Recently Adopted Accounting Standards

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit losses (Topic 326): Measurement of Credit Losses on Financial Instruments and in November 2018 issued a subsequent amendment, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 replaces the prior “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. ASU 2018-19 affects loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables and any other financial assets not excluded from the scope of this amendment that represent the contractual right to receive cash. ASU 2016-13 and ASU 2018-19 should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. The Company adopted this standard on January 1, 2020 using the prospective transition approach. The adoption of this standard did not have a material impact on our condensed consolidated financial statements.

2. Acquisitions and Divestitures

All of the Company’s acquisitions of businesses have been accounted for under Accounting Standards Codification (“ASC”) 805, Business Combinations. Accordingly, the accounts of the acquired companies, after adjustments to reflect the fair values assigned to assets and liabilities, have been included in the Company’s condensed consolidated financial statements from their respective dates of acquisition. The results of operations of the acquired companies have been included in the Company’s condensed consolidated results since the date of each acquisition.

The Company incurred acquisition-related transaction costs of ~~$0.7~~$1.3 million and ~~$0.4~~$0.6 million in the three months ended ~~June~~September 30, 2020 and 2019, respectively, and ~~$1.8~~$3.1 million and ~~$0.7~~$1.3 million in the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, respectively. These costs were recorded in Selling, general and administrative expenses and were related to completed transactions, pending transactions and potential transactions, including transactions that ultimately were not completed. The Company also incurred a $4.1 million fair value inventory step-up charge associated with the completed 2020 acquisition of Flow Management Devices, LLC (“Flow MD”) described below in the nine months ended September 30, 2020 and a $3.3 million fair value inventory step-up charge associated with the completed 2019 acquisition of Velcora Holding AB (“Velcora”) described below in the three and nine months ended September 30, 2019. These charges were recorded in Cost of sales.

2020 Acquisition

On February 28, 2020, the Company acquired the stock of Flow ~~Management Devices, LLC (“Flow MD”),~~MD, a privately held provider of flow measurement systems that ensure custody transfer accuracy in the oil and gas industry. Flow MD engineers and manufactures small volume provers. Headquartered in Phoenix, AZ, with operations in Houston, TX and Pittsburgh, PA, Flow MD operates in our Energy group within the Fluid & Metering Technologies segment. Flow MD was acquired for cash consideration of ~~$120.8~~$118.2 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were ~~$63.0~~$61.7 million and $53.0 million, respectively. The goodwill is deductible for tax purposes.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

The Company made an initial allocation of the purchase price for the Flow MD acquisition as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy. As the Company continues to obtain additional information about these assets and liabilities, including intangible asset appraisals, inventory valuation and accrued expenses, and continues to learn more about the newly acquired business, we will refine the estimates of fair value and more accurately allocate the

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~~IDEX CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(unaudited)~~

purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company will continue to make required adjustments to the purchase price allocation prior to the completion of the measurement period.

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


(In thousands)	Total
Current assets, net of cash acquired	$	~~32,805~~32,980
Property, plant and equipment	~~4,587~~4,230
Goodwill	~~63,007~~61,739
Intangible assets	53,000
Other noncurrent assets	~~1,291~~1,344
Total assets acquired	~~154,690~~153,293
Current liabilities	~~(34,059)~~(35,554)
Deferred income taxes	~~537~~749
Other noncurrent liabilities	(329)
Net assets acquired(1)	$	~~120,839~~118,159

(1) During the third quarter of 2020, the Company finalized the purchase price of the Flow MD business, resulting in a $2.7 million adjustment to the purchase price.

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

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


(In thousands, except weighted average life)	Total		Weighted Average Life
Trade names	$	6,000	15
Customer relationships	31,500		10
Unpatented technology	15,500		20
Acquired intangible assets	$	53,000

2019 Acquisition

On July 18, 2019, the Company acquired the stock of Velcora ~~Holding AB (“Velcora”)~~ and its operating subsidiaries, Roplan and Steridose. Roplan is a global manufacturer of custom mechanical and shaft seals for a variety of end markets including food and beverage, marine, chemical, wastewater and water treatment. Steridose develops engineered hygienic mixers and valves for the global biopharmaceutical industry. Both companies are headquartered in Sweden but also have operations in China, the United Kingdom and the United States. Roplan and Steridose operate in our Health & Science Technologies segment. Velcora was acquired for cash consideration of $87.2 million and the assumption of $51.1 million of debt. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $86.6 million and $48.2 million, respectively. The goodwill is not deductible for tax purposes.

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

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

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


(In thousands)	Total
Current assets, net of cash acquired	$	20,248
Property, plant and equipment	1,656
Goodwill	86,613
Intangible assets	48,183
Other noncurrent assets	788
Total assets acquired	157,488
Current liabilities	(7,630)
Long-term borrowings	(51,130)
Deferred income taxes	(11,094)
Other noncurrent liabilities	(454)
Net assets acquired	$	87,180

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


(In thousands, except weighted average life)	Total		Weighted Average Life
Trade names	$	7,089	15
Customer relationships	34,677		12
Unpatented technology	6,417		9
Acquired intangible assets	$	48,183

On September 3, 2019, the Company settled the debt assumed in the Velcora acquisition and incurred a loss on early retirement of $0.7 million which was recorded in Other (income) expense - net in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2019.

3. Joint Venture

On May 12, 2020, a subsidiary of IDEX entered into a joint venture agreement with a third party to form a limited liability company (the “Joint Venture”) that will manufacture and sell high performance elastomer seals for the oil and gas industry to customers within the Kingdom of Saudi Arabia as well as export these high performance elastomer seals outside of the Kingdom of Saudi Arabia. The Joint Venture will be headquartered in Damman, Saudi Arabia and will operate in our Sealing Solutions platform within the Health & Science Technologies segment. IDEX will contribute $0.6 million and will own 55% of the share capital while the third party partner will contribute $0.5 million and will own 45% of the share capital. As of ~~June~~September 30, 2020, the Joint Venture had not yet been funded or begun its operations. Since we will control the entity, we expect to consolidate the Joint Venture and record a noncontrolling interest in our financial statements once funding occurs and operations begin, both of which are currently expected to occur during the ~~third~~fourth quarter of 2020.

4. Business Segments

IDEX has 3 reportable business segments: Fluid & Metering Technologies, Health & Science Technologies and Fire & Safety/Diversified Products.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

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

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~~IDEX CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(unaudited)~~

The Health & Science Technologies (“HST”) segment designs, produces and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems 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, custom mechanical and shaft seals for a variety of end markets including food and beverage, marine, chemical, wastewater and water treatment, engineered hygienic mixers and valves for the global biopharmaceutical industry, 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, 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.

The Fire & Safety/Diversified Products (“FSDP”) segment designs, produces and develops firefighting pumps, valves and controls, rescue tools, lifting bags and other components and systems for the fire and rescue industry, engineered stainless steel banding and clamping devices used in a variety of industrial and commercial applications and precision equipment for dispensing, metering and mixing colorants and paints used in a variety of retail and commercial businesses around the world.

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

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Net sales	Net sales									Net sales
Fluid & Metering Technologies	Fluid & Metering Technologies									Fluid & Metering Technologies
External customers	External customers	$	218,922	$	246,111	$	445,634	$	488,447	External customers	$	220,553	$	240,758	$	666,187	$	729,205
Intersegment sales	Intersegment sales	190		78		339		264		Intersegment sales	194		103		533		367
Total segment sales	Total segment sales	219,112		246,189		445,973		488,711		Total segment sales	220,747		240,861		666,720		729,572
Health & Science Technologies	Health & Science Technologies									Health & Science Technologies
External customers	External customers	215,234		232,172		438,690		456,860		External customers	219,671		228,988		658,361		685,848
Intersegment sales	Intersegment sales	434		81		1,037		683		Intersegment sales	707		622		1,744		1,305
Total segment sales	Total segment sales	215,668		232,253		439,727		457,543		Total segment sales	220,378		229,610		660,105		687,153
Fire & Safety/Diversified Products	Fire & Safety/Diversified Products									Fire & Safety/Diversified Products
External customers	External customers	127,093		163,816		271,387		319,023		External customers	140,889		154,500		412,276		473,523
Intersegment sales	Intersegment sales	(17)		227		13		1,179		Intersegment sales	7		43		20		1,222
Total segment sales	Total segment sales	127,076		164,043		271,400		320,202		Total segment sales	140,896		154,543		412,296		474,745
Intersegment elimination	Intersegment elimination	(607)		(386)		(1,389)		(2,126)		Intersegment elimination	(908)		(768)		(2,297)		(2,894)
Total net sales	Total net sales	$	561,249	$	642,099	$	1,155,711	$	1,264,330	Total net sales	$	581,113	$	624,246	$	1,736,824	$	1,888,576
Operating income	Operating income									Operating income
Fluid & Metering Technologies	Fluid & Metering Technologies	$	50,938	$	74,146	$	117,709	$	146,012	Fluid & Metering Technologies	$	58,402	$	77,481	$	176,111	$	223,493
Health & Science Technologies	Health & Science Technologies	48,007		56,763		100,650		110,917		Health & Science Technologies	49,912		40,170		150,562		151,087
Fire & Safety/Diversified Products	Fire & Safety/Diversified Products	28,837		43,614		66,874		83,942		Fire & Safety/Diversified Products	37,103		41,967		103,977		125,909
Corporate office	Corporate office	(17,188)		(19,240)		(34,698)		(37,806)		Corporate office	(14,204)		(17,853)		(48,902)		(55,659)
Total operating income	Total operating income	110,594		155,283		250,535		303,065		Total operating income	131,213		141,765		381,748		444,830
Interest expense	Interest expense	12,439		11,011		23,316		21,932		Interest expense	10,642		11,330		33,958		33,262
Other (income) expense - net	Other (income) expense - net	6,460		(378)		8,025		(518)		Other (income) expense - net	(704)		1,219		7,321		701
Income before income taxes	Income before income taxes	$	91,695	$	144,650	$	219,194	$	281,651	Income before income taxes	$	121,275	$	129,216	$	340,469	$	410,867


		June 30, 2020		December 31, 2019			September 30, 2020		December 31, 2019
Assets	Assets					Assets
Fluid & Metering Technologies	Fluid & Metering Technologies	$	1,318,336	$	1,150,712	Fluid & Metering Technologies	$	1,327,303	$	1,150,712
Health & Science Technologies	Health & Science Technologies	1,509,374		1,507,108		Health & Science Technologies	1,535,745		1,507,108
Fire & Safety/Diversified Products	Fire & Safety/Diversified Products	781,693		825,398		Fire & Safety/Diversified Products	838,747		825,398
Corporate office	Corporate office	464,189		330,694		Corporate office	523,800		330,694
Total assets	Total assets	$	4,073,592	$	3,813,912	Total assets	$	4,225,595	$	3,813,912

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

5. Revenue

IDEX is an applied solutions company specializing in the manufacture of fluid and metering technologies, health and science technologies and fire, safety and other diversified products built to customers’ specifications. The Company’s products include industrial pumps, provers, compressors, flow meters, injectors, valves and related controls for use in a wide variety of process applications; precision fluidics solutions, including pumps, valves, degassing equipment, corrective tubing, fittings and complex manifolds, optical filters and specialty medical equipment and devices for use in life science applications; precision-engineered equipment for dispensing, metering and mixing paints; and engineered products for industrial and commercial markets, including fire and rescue, transportation equipment, oil and gas, electronics and communications.

Revenue is recognized when control of products or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for transferring those products or providing those services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. We determine the appropriate revenue recognition for our contracts with customers by analyzing the type, terms and conditions of each contract or arrangement with a customer.

Disaggregation of Revenue

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

Revenue by reporting unit for the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 was as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Energy	Energy	$	55,814	$	40,608	$	94,328	$	80,006	Energy	$	56,155	$	42,876	$	150,483	$	122,882
Valves	Valves	25,714		29,809		51,921		59,191		Valves	26,901		30,764		78,822		89,955
Water	Water	54,730		65,148		113,066		126,280		Water	59,822		62,611		172,888		188,891
Pumps	Pumps	60,555		87,125		142,385		175,385		Pumps	59,585		84,936		201,970		260,321
Agriculture	Agriculture	22,299		23,499		44,273		47,849		Agriculture	18,284		19,674		62,557		67,523
Intersegment elimination	Intersegment elimination	(190)		(78)		(339)		(264)		Intersegment elimination	(194)		(103)		(533)		(367)
Fluid & Metering Technologies	Fluid & Metering Technologies	218,922		246,111		445,634		488,447		Fluid & Metering Technologies	220,553		240,758		666,187		729,205
Scientific Fluidics & Optics	Scientific Fluidics & Optics	106,564		109,554		212,706		216,862		Scientific Fluidics & Optics	100,569		108,869		313,275		325,731
Sealing Solutions	Sealing Solutions	45,201		46,431		100,531		96,937		Sealing Solutions	50,726		51,389		151,257		148,326
Gast	Gast	28,039		37,399		55,385		71,308		Gast	32,173		32,699		87,558		104,007
Micropump	Micropump	7,272		8,271		14,987		17,026		Micropump	7,273		8,273		22,260		25,299
Material Processing Technologies	Material Processing Technologies	28,592		30,598		56,118		55,410		Material Processing Technologies	29,637		28,380		85,755		83,790
Intersegment elimination	Intersegment elimination	(434)		(81)		(1,037)		(683)		Intersegment elimination	(707)		(622)		(1,744)		(1,305)
Health & Science Technologies	Health & Science Technologies	215,234		232,172		438,690		456,860		Health & Science Technologies	219,671		228,988		658,361		685,848
Fire & Safety	Fire & Safety	92,295		103,257		186,363		202,705		Fire & Safety	94,065		100,389		280,428		303,094
BAND-IT	BAND-IT	16,303		27,758		41,536		55,670		BAND-IT	22,692		26,087		64,228		81,757
Dispensing	Dispensing	18,478		33,028		43,501		61,827		Dispensing	24,139		28,067		67,640		89,894
Intersegment elimination	Intersegment elimination	17		(227)		(13)		(1,179)		Intersegment elimination	(7)		(43)		(20)		(1,222)
Fire & Safety/Diversified Products	Fire & Safety/Diversified Products	127,093		163,816		271,387		319,023		Fire & Safety/Diversified Products	140,889		154,500		412,276		473,523
Total net sales	Total net sales	$	561,249	$	642,099	$	1,155,711	$	1,264,330	Total net sales	$	581,113	$	624,246	$	1,736,824	$	1,888,576

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

Revenue by geographical region for the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 was as follows:


		Three Months Ended June 30, 2020															Three Months Ended September 30, 2020
		FMT		HST		FSDP		IDEX			FMT		HST		FSDP		IDEX
U.S.	U.S.	$	134,299	$	93,103	$	63,640	$	291,042	U.S.	$	122,352	$	98,943	$	65,369	$	286,664
North America, excluding U.S.	North America, excluding U.S.	11,359		4,526		5,031		20,916		North America, excluding U.S.	13,706		5,417		5,680		24,803
Europe	Europe	39,386		56,000		31,176		126,562		Europe	43,855		59,509		37,437		140,801
Asia	Asia	24,349		57,806		21,543		103,698		Asia	26,010		52,197		25,378		103,585
Other ⁽¹⁾	Other ⁽¹⁾	9,719		4,233		5,686		19,638		Other (1)	14,824		4,312		7,032		26,168
Intersegment elimination	Intersegment elimination	(190)		(434)		17		(607)		Intersegment elimination	(194)		(707)		(7)		(908)
Total net sales	Total net sales	$	218,922	$	215,234	$	127,093	$	561,249	Total net sales	$	220,553	$	219,671	$	140,889	$	581,113


		Three Months Ended June 30, 2019															Three Months Ended September 30, 2019
		FMT		HST		FSDP		IDEX			FMT		HST		FSDP		IDEX
U.S.	U.S.	$	139,786	$	106,193	$	78,898	$	324,877	U.S.	$	133,710	$	103,891	$	74,306	$	311,907
North America, excluding U.S.	North America, excluding U.S.	14,628		5,497		6,418		26,543		North America, excluding U.S.	13,652		5,450		6,726		25,828
Europe	Europe	43,949		65,798		43,813		153,560		Europe	46,830		65,339		38,078		150,247
Asia	Asia	32,353		50,502		26,744		109,599		Asia	30,182		51,378		26,317		107,877
Other ⁽¹⁾	Other ⁽¹⁾	15,473		4,263		8,170		27,906		Other (1)	16,487		3,552		9,116		29,155
Intersegment elimination	Intersegment elimination	(78)		(81)		(227)		(386)		Intersegment elimination	(103)		(622)		(43)		(768)
Total net sales	Total net sales	$	246,111	$	232,172	$	163,816	$	642,099	Total net sales	$	240,758	$	228,988	$	154,500	$	624,246


		Six Months Ended June 30, 2020															Nine Months Ended September 30, 2020
		FMT		HST		FSDP		IDEX			FMT		HST		FSDP		IDEX
U.S.	U.S.	$	262,077	$	189,099	$	138,571	$	589,747	U.S.	$	384,429	$	288,042	$	203,940	$	876,411
North America, excluding U.S.	North America, excluding U.S.	25,035		10,494		11,300		46,829		North America, excluding U.S.	38,741		15,911		16,980		71,632
Europe	Europe	84,051		123,087		71,246		278,384		Europe	127,906		182,596		108,683		419,185
Asia	Asia	51,134		109,145		38,122		198,401		Asia	77,144		161,342		63,500		301,986
Other ⁽¹⁾	Other ⁽¹⁾	23,676		7,902		12,161		43,739		Other (1)	38,500		12,214		19,193		69,907
Intersegment elimination	Intersegment elimination	(339)		(1,037)		(13)		(1,389)		Intersegment elimination	(533)		(1,744)		(20)		(2,297)
Total net sales	Total net sales	$	445,634	$	438,690	$	271,387	$	1,155,711	Total net sales	$	666,187	$	658,361	$	412,276	$	1,736,824


		Six Months Ended June 30, 2019															Nine Months Ended September 30, 2019
		FMT		HST		FSDP		IDEX			FMT		HST		FSDP		IDEX
U.S.	U.S.	$	277,935	$	205,244	$	153,575	$	636,754	U.S.	$	411,645	$	309,135	$	227,881	$	948,661
North America, excluding U.S.	North America, excluding U.S.	27,685		10,389		12,398		50,472		North America, excluding U.S.	41,337		15,839		19,124		76,300
Europe	Europe	87,573		135,170		86,875		309,618		Europe	134,403		200,509		124,953		459,865
Asia	Asia	64,270		98,561		50,304		213,135		Asia	94,452		149,939		76,621		321,012
Other ⁽¹⁾	Other ⁽¹⁾	31,248		8,179		17,050		56,477		Other (1)	47,735		11,731		26,166		85,632
Intersegment elimination	Intersegment elimination	(264)		(683)		(1,179)		(2,126)		Intersegment elimination	(367)		(1,305)		(1,222)		(2,894)
Total net sales	Total net sales	$	488,447	$	456,860	$	319,023	$	1,264,330	Total net sales	$	729,205	$	685,848	$	473,523	$	1,888,576

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

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

Contract Balances

The timing of revenue recognition, billings and cash collections can result in customer receivables, advance payments or billings in excess of revenue recognized. Customer receivables include both amounts billed and currently due from customers as well as unbilled amounts (contract assets) and are included in Receivables on our Condensed Consolidated Balance Sheets. Amounts are billed in accordance with contractual terms or as work progresses. Unbilled amounts arise when the timing of billing differs from the timing of revenue recognized, such as when contract provisions require specific milestones to be met before a customer can be billed. Unbilled amounts primarily relate to performance obligations satisfied over time when the cost-to-cost method is utilized and the revenue recognized exceeds the amount billed to the customer as there is not yet a right to invoice in accordance with contractual terms. Unbilled amounts are recorded as a contract asset when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract. Customer receivables are recorded at face amount less an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for expected losses as a result of customers’ inability to make required payments. Management evaluates the aging of customer receivable balances, the financial condition of its customers, historical trends and the time outstanding of specific balances to estimate the amount of customer receivables that may not be collected in the future and records the appropriate provision.

The composition of Customer receivables was as follows:


		June 30, 2020		December 31, 2019			September 30, 2020		December 31, 2019
Billed receivables	Billed receivables	$	261,248	$	286,196	Billed receivables	$	266,074	$	286,196
Unbilled receivables	Unbilled receivables	11,139		11,922		Unbilled receivables	10,385		11,922
Total customer receivables	Total customer receivables	$	272,387	$	298,118	Total customer receivables	$	276,459	$	298,118

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

The composition of Deferred revenue was as follows:


		June 30, 2020		December 31, 2019			September 30, 2020		December 31, 2019
Deferred revenue - current	Deferred revenue - current	$	38,493	$	17,633	Deferred revenue - current	$	41,840	$	17,633
Deferred revenue - noncurrent	Deferred revenue - noncurrent	1,615		2,129		Deferred revenue - noncurrent	5,100		2,129
Total deferred revenue	Total deferred revenue	$	40,108	$	19,762	Total deferred revenue	$	46,940	$	19,762

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. A contract’s transaction price is allocated to each performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For our contracts that require complex design, manufacturing and installation activities, certain performance obligations may not be separately identifiable from other performance obligations in the contract and, therefore, not distinct. As a result, the entire contract is accounted for as a single performance obligation. For our contracts that include distinct products or services that are substantially the same and have the same pattern of transfer to the customer over time, they are recognized as a series of distinct products or services. Certain of our contracts have multiple performance obligations for which we allocate the transaction price to each performance obligation using an estimate of the standalone selling price of each distinct product or service in the contract. For product sales, each product sold to a customer generally represents a distinct performance

Table of Content

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

obligation. In such cases, the observable standalone sales are used to determine the standalone selling price. In certain cases, we may be required to estimate standalone selling price using the expected cost plus margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct product or service.

Our performance obligations are satisfied at a point in time or over time as work progresses. Performance obligations are supported by contracts with customers that provide a framework for the nature of the distinct product or service or bundle of products and services. We define service revenue as revenue from activities that are not associated with the design, development or manufacture of a product or the delivery of a software license.

Revenue from products and services transferred to customers at a point in time approximated 95% of total revenues in both the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019. Revenue on these contracts is recognized when obligations under the terms of the contract with our customer are satisfied. Generally, this occurs with the transfer of control of the asset, which is in line with shipping terms.

Revenue from products and services transferred to customers over time ~~approximated~~approximated 5% of total revenues in both the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019. Revenue earned by certain business units within the Water, Energy, Material Processing Technologies (“MPT”) and Dispensing reporting units is recognized over time because control transfers continuously to our customers. When accounting for over-time contracts, we use an input measure to determine the extent of progress towards completion of the performance obligation. For certain business units within the Water, Energy and MPT reporting units, revenue is recognized over time as work is performed based on the relationship between actual costs incurred to date for each contract and the total estimated costs for such contract at completion of the performance obligation (i.e. the cost-to-cost method). We believe this measure of progress best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Incurred cost represents work performed, which corresponds with the transfer of control to the customer. Contract costs include labor, material and overhead. Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. For certain business units within the Energy and Dispensing reporting units, revenue is recognized ratably over the contract term.

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

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

6. Earnings Per Common Share

Earnings per common share (“EPS”) is 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.

ASC 260, Earnings Per Share, concludes 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, EPS was computed using the two-class method prescribed by ASC 260.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

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


		Three Months Ended June 30,			Six Months Ended June 30,				Three Months Ended September 30,		Nine Months Ended September 30,
		2020	2019	2020	2019		2020	2019	2020	2019
Basic weighted average common shares outstanding	Basic weighted average common shares outstanding	75,171	75,460	75,459	75,450	Basic weighted average common shares outstanding	75,352	75,698	75,423	75,532
Dilutive effect of stock options, restricted stock and performance share units	Dilutive effect of stock options, restricted stock and performance share units	766	927	739	884	Dilutive effect of stock options, restricted stock and performance share units	608	879	696	883
Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding	75,937	76,387	76,198	76,334	Diluted weighted average common shares outstanding	75,960	76,577	76,119	76,415

Options to purchase approximately ~~0.6~~0.3 million shares of common stock for each of the three months ended ~~June~~September 30, 2020 and 2019, and 0.6 million shares of common stock for each of the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, respectively, were not included in the computation of diluted EPS because the effect of their inclusion would have been antidilutive.

7. Inventories

The components of inventories as of ~~June~~September 30, 2020 and December 31, 2019 were:


		June 30, 2020		December 31, 2019			September 30, 2020		December 31, 2019
Raw materials and component parts	Raw materials and component parts	$	188,848	$	182,382	Raw materials and component parts	$	187,244	$	182,382
Work in process	Work in process	38,803		28,761		Work in process	30,093		28,761
Finished goods	Finished goods	97,280		82,324		Finished goods	85,073		82,324
Total inventories	Total inventories	$	324,931	$	293,467	Total inventories	$	302,410	$	293,467

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

8. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the ~~six~~nine months ended ~~June~~September 30, 2020, by reportable business segment, were as follows:


		FMT		HST		FSDP		IDEX			FMT		HST		FSDP		IDEX
Goodwill	Goodwill	$	599,646	$	981,592	$	399,138	$	1,980,376	Goodwill	$	599,646	$	981,592	$	399,138	$	1,980,376
Accumulated goodwill impairment losses	Accumulated goodwill impairment losses	(20,721)		(149,820)		(30,090)		(200,631)		Accumulated goodwill impairment losses	(20,721)		(149,820)		(30,090)		(200,631)
Balance at December 31, 2019	Balance at December 31, 2019	578,925		831,772		369,048		1,779,745		Balance at December 31, 2019	578,925		831,772		369,048		1,779,745
Foreign currency translation	Foreign currency translation	217		(1,946)		(91)		(1,820)		Foreign currency translation	4,726		9,832		5,737		20,295
Acquisitions	Acquisitions	63,007		—		—		63,007		Acquisitions	61,739		0		0		61,739

Acquisition adjustments	Acquisition adjustments	—		1,798		—		1,798		Acquisition adjustments	0		1,798		0		1,798
Balance at June 30, 2020		$	642,149	$	831,624	$	368,957	$	1,842,730
Balance at September 30, 2020										Balance at September 30, 2020	$	645,390	$	843,402	$	374,785	$	1,863,577

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 ~~six~~nine months of 2020, 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, 2019, all reporting units had fair values in excess of their carrying values.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset at ~~June~~September 30, 2020 and December 31, 2019:


		At June 30, 2020											At December 31, 2019											At September 30, 2020						At December 31, 2019
		Gross Carrying Amount		Accumulated Amortization		Net		Weighted Average Life	Gross Carrying Amount		Accumulated Amortization		Net				Gross Carrying Amount		Accumulated Amortization		Net		Weighted Average Life	Gross Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets:	Amortized intangible assets:															Amortized intangible assets:
Patents	Patents	$	4,382	$	(3,135)	$	1,247	12	$	6,678	$	(5,276)	$	1,402		Patents	$	2,865	$	(1,668)	$	1,197	10	$	6,678	$	(5,276)	$	1,402
Trade names	Trade names	126,703		(66,739)		59,964		16	123,062		(64,938)		58,124			Trade names	128,393		(69,568)		58,825		16	123,062		(64,938)		58,124
Customer relationships	Customer relationships	308,347		(107,600)		200,747		13	275,575		(96,252)		179,323			Customer relationships	313,977		(115,815)		198,162		13	275,575		(96,252)		179,323

Unpatented technology	Unpatented technology	117,216		(47,933)		69,283		13	101,721		(43,561)		58,160			Unpatented technology	119,233		(51,307)		67,926		13	101,721		(43,561)		58,160
Other	Other	700		(613)		87		10	700		(578)		122			Other	700		(630)		70		10	700		(578)		122
Total amortized intangible assets	Total amortized intangible assets	557,348		(226,020)		331,328			507,736		(210,605)		297,131			Total amortized intangible assets	565,168		(238,988)		326,180			507,736		(210,605)		297,131
Indefinite-lived intangible assets:	Indefinite-lived intangible assets:															Indefinite-lived intangible assets:
Banjo trade name	Banjo trade name	62,100		—		62,100			62,100		—		62,100			Banjo trade name	62,100		—		62,100			62,100		—		62,100
Akron Brass trade name	Akron Brass trade name	28,800		—		28,800			28,800		—		28,800			Akron Brass trade name	28,800		—		28,800			28,800		—		28,800
Total intangible assets	Total intangible assets	$	648,248	$	(226,020)	$	422,228		$	598,636	$	(210,605)	$	388,031	��	Total intangible assets	$	656,068	$	(238,988)	$	417,080		$	598,636	$	(210,605)	$	388,031

The Banjo trade name and the Akron Brass trade name are indefinite-lived intangible assets which are tested for impairment on an annual basis in accordance with ASC 350 or more frequently if events or changes in circumstances indicate that the assets might be impaired. In the first ~~six~~nine months of 2020, there were no events or circumstances that would have required an interim impairment test on these indefinite-lived intangible assets. The Company uses the relief-from-royalty method, a form of the income approach, to determine the fair value of these trade names. The relief-from-royalty method is dependent on a number of significant management assumptions, including estimates of revenues, royalty rates and discount rates.

In the first ~~six~~nine months of 2020, the outbreak of the novel coronavirus (“COVID-19”) resulted in government lockdown mandates globally that forced us to both reduce hours and temporarily close some facilities. These events required that an interim impairment test be performed on the definite-lived intangible assets at one of the Company’s businesses. The impairment test did ~~not~~0t result in an impairment charge.

In the second quarter of 2019, the Company began to evaluate strategic alternatives for one of its businesses in the HST segment. Prior to making a final decision on the options that were presented for this business, the business was informed in the third quarter of 2019 of the loss of its largest customer. As a result, the Company accelerated its restructuring activities for this business and a decision was made to wind down the business over time. This event required an interim impairment test be performed on certain of its definite-lived intangible assets, which resulted in an impairment charge of $7.1 million, consisting of $6.1 million related to customer relationships and $1.0 million related to unpatented technology. This charge was recorded as Restructuring expense in the three and nine months ended September 30, 2019. See Note 15 for further discussion.

Amortization of intangible assets was ~~$10.5~~$11.1 million and ~~$20.0~~$31.1 million for the three and ~~six~~nine months ended ~~June~~September 30, 2020, respectively. Amortization of intangible assets was ~~$9.0~~$9.7 million and ~~$18.0~~$27.7 million for the three and ~~six~~nine months ended ~~June~~September 30, 2019, respectively. Based on the intangible asset balances as of ~~June~~September 30, 2020, amortization expense is expected to approximate ~~$21.2~~$10.8 million for the remaining ~~six~~three months of 2020, ~~$41.5~~$42.2 million in 2021, ~~$39.6~~$40.3 million in 2022, ~~$36.9~~$37.6 million in 2023 and ~~$35.1~~$35.8 million in 2024.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

9. Accrued Expenses

The components of accrued expenses as of ~~June~~September 30, 2020 and December 31, 2019 were:


		June 30, 2020		December 31, 2019			September 30, 2020		December 31, 2019
Payroll and related items	Payroll and related items	$	69,250	$	77,556	Payroll and related items	$	75,658	$	77,556
Management incentive compensation	Management incentive compensation	8,590		14,408		Management incentive compensation	10,945		14,408
Income taxes payable	Income taxes payable	43,585		9,905		Income taxes payable	31,279		9,905
Insurance	Insurance	11,345		8,240		Insurance	11,955		8,240
Warranty	Warranty	7,184		5,581		Warranty	7,082		5,581
Deferred revenue	Deferred revenue	38,493		17,633		Deferred revenue	41,840		17,633
Lease liability	Lease liability	16,584		15,235		Lease liability	15,896		15,235
Restructuring	Restructuring	4,452		6,110		Restructuring	4,026		6,110
Liability for uncertain tax positions	Liability for uncertain tax positions	—		890		Liability for uncertain tax positions	0		890
Accrued interest	Accrued interest	3,702		1,735		Accrued interest	12,774		1,735
Contingent consideration for acquisition	Contingent consideration for acquisition	—		3,375		Contingent consideration for acquisition	0		3,375
Other	Other	22,746		19,622		Other	25,482		19,622
Total accrued expenses	Total accrued expenses	$	225,931	$	180,290	Total accrued expenses	$	236,937	$	180,290

10. Other Noncurrent Liabilities

The components of other noncurrent liabilities as of ~~June~~September 30, 2020 and December 31, 2019 were:


		June 30, 2020		December 31, 2019			September 30, 2020		December 31, 2019
Pension and retiree medical obligations	Pension and retiree medical obligations	$	83,915	$	87,478	Pension and retiree medical obligations	$	86,325	$	87,478
Transition tax payable	Transition tax payable	13,750		11,292		Transition tax payable	14,208		11,292
Liability for uncertain tax positions	Liability for uncertain tax positions	1,071		3,008		Liability for uncertain tax positions	1,071		3,008
Deferred revenue	Deferred revenue	1,615		2,129		Deferred revenue	5,100		2,129

Lease liability	Lease liability	94,503		69,928		Lease liability	93,507		69,928

Other	Other	21,532		23,533		Other	23,120		23,533
Total other noncurrent liabilities	Total other noncurrent liabilities	$	216,386	$	197,368	Total other noncurrent liabilities	$	223,331	$	197,368

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

11. Borrowings

Borrowings at ~~June~~September 30, 2020 and December 31, 2019 consisted of the following:


		June 30, 2020		December 31, 2019			September 30, 2020		December 31, 2019
Revolving Facility	Revolving Facility	$	—	$	—	Revolving Facility	$	0	$	0
4.50% Senior Notes, due December 2020	4.50% Senior Notes, due December 2020	—		300,000		4.50% Senior Notes, due December 2020	0		300,000
4.20% Senior Notes, due December 2021	4.20% Senior Notes, due December 2021	350,000		350,000		4.20% Senior Notes, due December 2021	350,000		350,000
3.20% Senior Notes, due June 2023	3.20% Senior Notes, due June 2023	100,000		100,000		3.20% Senior Notes, due June 2023	100,000		100,000
3.37% Senior Notes, due June 2025	3.37% Senior Notes, due June 2025	100,000		100,000		3.37% Senior Notes, due June 2025	100,000		100,000
3.00% Senior Notes, due May 2030	3.00% Senior Notes, due May 2030	500,000		—		3.00% Senior Notes, due May 2030	500,000		0
Other borrowings	Other borrowings	368		622		Other borrowings	275		622
Total borrowings	Total borrowings	1,050,368		850,622		Total borrowings	1,050,275		850,622
Less current portion	Less current portion	228		388		Less current portion	150		388
Less deferred debt issuance costs	Less deferred debt issuance costs	4,656		983		Less deferred debt issuance costs	5,019		983
Less unaccreted debt discount	Less unaccreted debt discount	1,039		387		Less unaccreted debt discount	994		387
Total long-term borrowings	Total long-term borrowings	$	1,044,445	$	848,864	Total long-term borrowings	$	1,044,112	$	848,864

On April 29, 2020, the Company completed a public offering of $500.0 million in aggregate principal amount of 3.0% Senior Notes due 2030 (the “3.0% Senior Notes”). The net proceeds from the offering were approximately ~~$494.9~~$494.4 million, after deducting the issuance discount of $0.9 million, the underwriting commission of $3.3 million and offering expenses of ~~$0.9~~$1.4 million. The net proceeds were used to redeem and repay the $300.0 million aggregate principal amount outstanding of its 4.5% Senior Notes due December 15, 2020 and the related accrued interest and a make-whole redemption premium, with the balance used for general corporate purposes. The 3.0% Senior Notes bear interest at a rate of 3.0% per annum, which is payable semi-annually in arrears on May 1 and November 1 of each year. The 3.0% Senior Notes mature on May 1, 2030.

The Company may redeem all or a portion of the 3.0% Senior Notes at any time prior to maturity at the redemption prices set forth in the Note Indenture (“Indenture”) governing the 3.0% Senior Notes. The Indenture and 3.0% Notes contain covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale-leaseback transactions and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all of the Company’s assets. The terms of the 3.0% Senior Notes also require the Company to make an offer to repurchase the 3.0% Senior Notes upon a change of control triggering event (as defined in the Indenture) at a price equal to 101% of the principal amount plus accrued and unpaid interest, if any. The Indenture also provides for customary events of default, which include nonpayment, breach of covenants in the Indenture and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, the Trustee or holders of at least 25% of the then outstanding 3.0% Senior Notes may declare the principal amount of all of the 3.0% Senior Notes to be due and payable immediately.

On April 27, 2020, the Company provided notice of its election to redeem early, on May 27, 2020, the $300.0 million aggregate principal amount outstanding of its 4.5% Senior Notes at a redemption price of $300.0 million plus a make-whole redemption premium of $6.8 million and accrued and unpaid interest of $6.1 million using proceeds from the Company’s 3.0% Senior Notes. In addition, the Company recognized the remaining $1.4 million of the pre-tax amount included in Accumulated other comprehensive income (loss) in shareholders’ equity related to the interest rate exchange agreement associated with the 4.5% Senior Notes and wrote off the remaining $0.1 million of deferred issuance costs and $0.1 million of the debt issuance discount associated with the 4.5% Senior Notes for a total loss on early debt redemption of $8.4 million which was recorded within Other (income) expense - net in the Condensed Consolidated Statements of Operations.

Terms and fees of the Credit Agreement are essentially the same as the prior credit agreement except for certain fees and interest rate pricing that are more favorable to the Company.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

The Credit Agreement consists of a revolving credit facility (the “Revolving Facility”) in an aggregate principal amount of $800 million with a final maturity date of May 31, 2024. 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 from 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 $400 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 under the Credit Agreement.

Borrowings under the Credit Agreement bear interest, at either an alternate base rate or adjusted LIBOR plus, in each case, an applicable margin. Such applicable margin is based on the lower of the Company’s senior, unsecured, long-term debt rating or the Company’s applicable leverage ratio and can range from 0.00% to 1.275%. Based on the Company’s leverage ratio at ~~June~~September 30, 2020, the applicable margin was 1.00% resulting in a weighted average interest rate of ~~1.32%~~1.23% for the ~~six~~nine months ended ~~June~~September 30, 2020. Interest is payable (a) in the case of base rate loans, quarterly, and (b) in the case of LIBOR loans, on the last day of the applicable interest period selected, or every three months from the effective date of such interest period for interest periods exceeding three months.

The Credit Agreement requires payment to the lenders of a facility fee based upon the amount of the lenders’ commitments under the credit facility from time to time, determined based on the lower of the Company’s senior, unsecured long-term debt rating or the Company’s applicable leverage ratio. Voluntary prepayments of any loans and voluntary reductions of the unutilized portion of the commitments under the Credit Agreement are permissible without penalty, subject to break funding payments and minimum notice and minimum reduction amount requirements.

The Credit Agreement contains customary affirmative and negative covenants for senior unsecured credit agreements, including an interest coverage ratio test and a leverage ratio test, in each case tested quarterly and, in the case of the leverage ratio, with an option to increase the ratio for 12 months in connection with certain acquisitions. The negative covenants include restrictions on the Company’s 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), make certain subsidiary dividends or distributions, engage in materially different lines of businesses and allow subsidiaries to incur certain additional debt.

The Credit Agreement also contains customary events of default (subject to grace periods, as appropriate).

At ~~June~~September 30, 2020, there was no0 balance outstanding under the Revolving Facility and ~~$7.1~~$7.0 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility at ~~June~~September 30, 2020 of approximately ~~$792.9~~$793.0 million.

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

The 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

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

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 a payment event of default, any holder of the Notes affected thereby may declare all of the Notes held by it due and payable immediately. In the case of any other event of default, a majority of the holders of the Notes may declare all of the Notes to be due and payable immediately.

On December 9, 2011, the Company completed a public offering of $350.0 million 4.2% senior notes due December 15, 2021 (“4.2% Senior Notes”). The net proceeds from the offering of $346.2 million, after deducting a $0.9 million issuance discount, a $2.3 million underwriting commission and $0.6 million of offering expenses, were used to repay $306.0 million of outstanding bank indebtedness, with the balance used for general corporate purposes. The 4.2% Senior Notes bear interest at a rate of 4.2% per annum, which is payable semi-annually in arrears on each June 15th and December 15th. The Company may redeem all or a portion of the 4.2% Senior Notes at any time prior to maturity at the redemption prices set forth in the Note Indenture governing the 4.2% Senior Notes. The Company may issue additional debt from time to time pursuant to the Indenture. The Indenture and 4.2% Senior Notes contain covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale-leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all of the Company’s assets. The terms of the 4.2% Senior Notes also require the Company to make an offer to repurchase the 4.2% Senior Notes upon a change of control triggering event (as defined in the Indenture) at a price equal to 101% of their principal amount plus accrued and unpaid interest, if any.

There are 2 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 3.00 to 1 and a maximum leverage ratio of 3.50 to 1, which is the ratio of the Company’s consolidated total debt to its consolidated earnings before interest, income taxes, depreciation and amortization (“EBITDA”). In the case of the leverage ratio under the Revolving Facility, there is an option to increase the ratio to 4.00 for 12 months in connection with certain acquisitions. At ~~June~~September 30, 2020, the Company was in compliance with both of these financial covenants. There are no financial covenants relating to the 3.0% Senior Notes or 4.2% Senior Notes; however, both are subject to cross-default provisions.

12. 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 types of cash flow hedges the Company enters into include foreign currency exchange contracts designed to minimize the earnings impact on certain intercompany loans as well as interest rate exchange agreements designed to reduce the impact of interest rate changes on future interest expense that effectively convert a portion of floating-rate debt to fixed-rate debt.

The effective portion of gains or losses on interest rate exchange agreements is reported in accumulated other comprehensive income (loss) in shareholders’ equity and reclassified into net income in the same period or periods in which the hedged transaction affects net income. 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 in net income during the period of change. See Note 16 for the amount of loss reclassified into net income for interest rate contracts for the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019. As of ~~June~~September 30, 2020, the Company did not have any interest rate contracts outstanding.

In 2010 and 2011, the Company entered into 2 separate forward starting interest rate exchange agreements 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 terms of the respective debt instruments. Approximately ~~$3.5~~$3.4 million of the pre-tax amount included in Accumulated other comprehensive income (loss) in shareholders’ equity at ~~June~~September 30, 2020 related to the 4.2% Senior Notes ~~and~~ will be recognized in net income over the next 12 months as the underlying hedged transaction is realized. In conjunction with the early redemption of the 4.5% Senior Notes on May 27, 2020, the Company accelerated the recognition of the remaining $1.4 million of the pre-tax amount included in Accumulated other comprehensive income (loss) in shareholders’ equity related to the 4.5% Senior Notes and recorded such as Other (income) expense - net during the ~~three and six~~nine months ended ~~June~~September 30, 2020 in the Condensed Consolidated Statements of Operations.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

13. Fair Value Measurements

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

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

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

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

The following table summarizes the basis used to measure the Company’s financial assets (liabilities) at fair value on a recurring basis in the balance sheets at ~~June~~September 30, 2020 and December 31, 2019:

Basis of Fair Value Measurements
Balance at June 30, 2020 Level 1 Level 2 Level 3
Available for sale securities $ 11,415 $ 11,415 $ — $ —


	Basis of Fair Value Measurements
	Balance at September 30, 2020		Level 1		Level 2		Level 3
Available for sale securities	$	12,136	$	12,136	$	0	$	0


		Basis of Fair Value Measurements															Basis of Fair Value Measurements
		Balance at December 31, 2019		Level 1		Level 2		Level 3			Balance at December 31, 2019		Level 1		Level 2		Level 3
Available for sale securities	Available for sale securities	$	10,462	$	10,462	$	—	$	—	Available for sale securities	$	10,462	$	10,462	$	0	$	0
Contingent consideration	Contingent consideration	3,375		—		—		3,375		Contingent consideration	3,375		0		0		3,375

There were no transfers of assets or liabilities between Level 1 and Level 2 during the three and ~~six~~nine months ended ~~June~~September 30, 2020 or the year ended December 31, 2019.

As of December 31, 2019, the Company utilized a Monte Carlo simulation to determine the fair value of the contingent consideration associated with the acquisition of Finger Lakes Instrumentation as of the acquisition date. In March 2020, the Company and the seller reached an agreement to settle the contingency for $3.0 million, which was paid in April 2020.

The carrying values of our cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate their fair values because of the short term nature of these instruments. At ~~June~~September 30, 2020, the fair value of the outstanding indebtedness under our 3.0% Senior Notes, 3.2% Senior Notes, 3.37% Senior Notes, 4.2% Senior Notes and other borrowings based on quoted market prices and current market rates for debt with similar credit risk and maturity was approximately ~~$1,115.7~~$1,136.3 million compared to the carrying value of $1,049.3 million. At December 31, 2019, the fair value of the outstanding indebtedness under our 3.2% Senior Notes, 3.37% Senior Notes, 4.5% Senior Notes, 4.2% Senior Notes and other borrowings based on quoted market prices and current market rates for debt with similar credit risk and maturity was approximately $876.0 million compared to the carrying value of $850.2 million. These fair value measurements are classified as Level 2 within the fair value hierarchy since they are determined based upon significant inputs observable in the market, including interest rates on recent financing transactions to entities with a credit rating similar to ours.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

14. Leases

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

Certain leases include 1 or more options to renew. The exercise of lease renewal options is at the Company’s sole discretion. There are currently no renewal periods included in any of the leases’ respective lease terms as they are not reasonably certain of being exercised. The Company does not have any material purchase options.

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

Supplemental balance sheet information related to leases as of ~~June~~September 30, 2020 and December 31, 2019 was as follows:


		Balance Sheet Caption	June 30, 2020		December 31, 2019			Balance Sheet Caption	September 30, 2020		December 31, 2019
Operating leases:	Operating leases:						Operating leases:
Building right-of-use assets - net	Building right-of-use assets - net	Other noncurrent assets	$	101,881	$	75,381	Building right-of-use assets - net	Other noncurrent assets	$	100,904	$	75,381
Equipment right-of-use assets - net	Equipment right-of-use assets - net	Other noncurrent assets	6,202		6,993		Equipment right-of-use assets - net	Other noncurrent assets	5,431		6,993
Total right-of-use assets - net	Total right-of-use assets - net		$	108,083	$	82,374	Total right-of-use assets - net		$	106,335	$	82,374
Operating leases:	Operating leases:						Operating leases:
Current lease liabilities	Current lease liabilities	Accrued expenses	$	16,584	$	15,235	Current lease liabilities	Accrued expenses	$	15,896	$	15,235
Noncurrent lease liabilities	Noncurrent lease liabilities	Other noncurrent liabilities	94,503		69,928		Noncurrent lease liabilities	Other noncurrent liabilities	93,507		69,928
Total lease liabilities	Total lease liabilities		$	111,087	$	85,163	Total lease liabilities		$	109,403	$	85,163

In the second quarter of 2019, the Company began to evaluate strategic alternatives for one of its businesses in the HST segment. Prior to making a final decision on the options that were presented for this business, the business was informed in the third quarter of 2019 of the loss of its largest customer. As a result, the Company accelerated its restructuring activities for this business and a decision was made to wind down the business over time. This event required an interim impairment test be performed on its long-lived assets, which resulted in an impairment charge of $0.6 million related to its building right-of-use asset. This charge was recorded as Restructuring expense in the Condensed Consolidated Statements of Operations. See Note 15 for further discussion.

The components of lease cost for the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 were as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Operating lease cost ⁽¹⁾	Operating lease cost ⁽¹⁾	$	5,986	$	6,195	$	12,314	$	11,570	Operating lease cost (1)	$	7,349	$	4,817	$	19,663	$	16,387
Variable lease cost	Variable lease cost	313		625		954		1,218		Variable lease cost	426		436		1,380		1,654
Total lease expense	Total lease expense	$	6,299	$	6,820	$	13,268	$	12,788	Total lease expense	$	7,775	$	5,253	$	21,043	$	18,041

⁽¹⁾ Includes short-term leases.

Supplemental cash flow information related to leases for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 was as follows:


		Six Months Ended June 30, 2020		Six Months Ended June 30, 2019			Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of operating lease liabilities	Cash paid for amounts included in the measurement of operating lease liabilities	$	12,225	$	6,071	Cash paid for amounts included in the measurement of operating lease liabilities	$	19,198	$	15,813
Right-of-use assets obtained in exchange for new operating lease liabilities	Right-of-use assets obtained in exchange for new operating lease liabilities	34,298		4,180		Right-of-use assets obtained in exchange for new operating lease liabilities	36,707		6,899

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

Other supplemental information related to leases as of ~~June~~September 30, 2020 and December 31, 2019 was as follows:


Lease Term and Discount Rate	Lease Term and Discount Rate	June 30, 2020		December 31, 2019		Lease Term and Discount Rate	September 30, 2020		December 31, 2019
Weighted-average remaining lease term (years):	Weighted-average remaining lease term (years):					Weighted-average remaining lease term (years):
Operating leases - building and equipment	Operating leases - building and equipment	9.80		9.61		Operating leases - building and equipment	9.65		9.61
Operating leases - vehicles	Operating leases - vehicles	1.98		1.92		Operating leases - vehicles	2.01		1.92
Weighted-average discount rate:	Weighted-average discount rate:					Weighted-average discount rate:
Operating leases - building and equipment	Operating leases - building and equipment	3.60	%	4.08	%	Operating leases - building and equipment	3.57	%	4.08	%
Operating leases - vehicles	Operating leases - vehicles	2.64	%	2.99	%	Operating leases - vehicles	2.51	%	2.99	%

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

Total lease liabilities at ~~June~~September 30, 2020 have scheduled maturities as follows:


Maturity of Lease Liabilities	Maturity of Lease Liabilities	Operating Leases ⁽¹⁾		Maturity of Lease Liabilities	Operating Leases (1)
2020 (excluding the six months ended June 30, 2020)		$	9,941
2020 (excluding the nine months ended September 30, 2020)				2020 (excluding the nine months ended September 30, 2020)	$	5,080
2021	2021	17,794		2021	18,593
2022	2022	15,372		2022	15,863
2023	2023	13,245		2023	13,195
2024	2024	11,001		2024	11,289
Thereafter	Thereafter	66,503		Thereafter	67,451
Total lease payments	Total lease payments	133,856		Total lease payments	131,471
Less: Imputed interest	Less: Imputed interest	(22,769)		Less: Imputed interest	(22,068)
Present value of lease liabilities	Present value of lease liabilities	$	111,087	Present value of lease liabilities	$	109,403

⁽¹⁾ Excludes ~~$0.2~~$0.2 million of legally binding minimum lease payments for leases signed but not yet commenced.

Total lease liabilities at December 31, 2019 had scheduled maturities as follows:


Maturity of Lease Liabilities	Operating Leases
2020	$	18,449
2021	15,070
2022	10,647
2023	8,894
2024	7,037
Thereafter	44,284
Total lease payments	104,381
Less: Imputed interest	(19,218)
Present value of lease liabilities	$	85,163

15. Restructuring

During the year ended December 31, 2019 and the three and nine months ended ~~June~~September 30, 2020, the Company recorded accruals for restructuring costs incurred to facilitate long-term, sustainable growth through cost reduction actions, consisting of employee reductions and facility rationalization. Restructuring costs include severance benefits, exit costs and asset impairment charges and are included in Restructuring expenses in the Condensed Consolidated Statements of Operations. Severance costs primarily

consist of severance benefits through payroll continuation, COBRA subsidies, outplacement services,

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

~~consist of severance benefits through payroll continuation, COBRA subsidies, outplacement services,~~ conditional separation costs and employer tax liabilities, while exit costs primarily consist of lease exit and contract termination costs.

In the second quarter of 2019, the Company began to evaluate strategic alternatives for one of its businesses in the HST segment. Prior to making a final decision on the options that were presented for this business, the business was informed in the third quarter of 2019 of the loss of its largest customer. As a result, the Company accelerated its restructuring activities for this business and a decision was made to wind down the business over time. This event required an interim impairment test be performed on the long-lived tangible and intangible assets of the business, which resulted in an impairment charge of $9.7 million, consisting of $6.1 million related to a customer relationships intangible asset, $1.0 million related to an unpatented technology intangible asset, $2.0 million related to property, plant and equipment and $0.6 million related to a building right-of-use asset. This charge was recorded as Restructuring expense in the Condensed Consolidated Statements of Operations.

Pre-tax restructuring expenses by segment for the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 were as follows:


											Three Months Ended September 30, 2020
		Severance Costs		Exit Costs		Asset Impairment		Total			Severance Costs		Exit Costs		Asset Impairment		Total
Fluid & Metering Technologies	Fluid & Metering Technologies	$	1,848	$	—	$	—	$	1,848	Fluid & Metering Technologies	$	500	$	0	$	85	$	585
Health & Science Technologies	Health & Science Technologies	1,184		—		—		1,184		Health & Science Technologies	978		0		0		978
Fire & Safety/Diversified Products	Fire & Safety/Diversified Products	641		—		—		641		Fire & Safety/Diversified Products	1,249		0		0		1,249
Corporate/Other	Corporate/Other	168		—		—		168		Corporate/Other	105		0		0		105
Total restructuring costs	Total restructuring costs	$	3,841	$	—	$	—	$	3,841	Total restructuring costs	$	2,832	$	0	$	85	$	2,917


	Three Months Ended September 30, 2019
	Severance Costs		Exit Costs		Asset Impairment		Total
Fluid & Metering Technologies	$	0	$	0	$	0	$	0
Health & Science Technologies	1,164		352		9,680		11,196
Fire & Safety/Diversified Products	104		0		0		104
Corporate/Other	656		0		0		656
Total restructuring costs	$	1,924	$	352	$	9,680	$	11,956


	Nine Months Ended September 30, 2020
	Severance Costs		Exit Costs		Asset Impairment		Total
Fluid & Metering Technologies	$	2,348	$	0	$	85	$	2,433
Health & Science Technologies	2,162		0		0		2,162
Fire & Safety/Diversified Products	1,890		0		0		1,890
Corporate/Other	273		0		0		273
Total restructuring costs	$	6,673	$	0	$	85	$	6,758

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)


	Nine Months Ended September 30, 2019
	Severance Costs		Exit Costs		Asset Impairment		Total
Fluid & Metering Technologies	$	930	$	0	$	0	$	930
Health & Science Technologies	1,210		636		9,680		11,526
Fire & Safety/Diversified Products	923		0		0		923
Corporate/Other	703		0		0		703
Total restructuring costs	$	3,766	$	636	$	9,680	$	14,082

Restructuring accruals of ~~$4.5~~$4.0 million and $6.1 million at ~~June~~September 30, 2020 and December 31, 2019, respectively, are reflected in Accrued expenses on the Condensed Consolidated Balance Sheets. Severance benefits are expected to be paid by the end of the year using cash from operations. The changes in the restructuring accrual for the ~~six~~nine months ended ~~June~~September 30, 2020 are as follows:


	Restructuring
Balance at January 1, 2020	$	6,110
Restructuring expenses	~~3,841~~6,758
Payments, utilization and other	~~(5,499)~~(8,842)
Balance at ~~June~~September 30, 2020	$	~~4,452~~4,026

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

16. Other Comprehensive Income (Loss)

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


		Three Months Ended June 30, 2020										Three Months Ended June 30, 2019											Three Months Ended September 30, 2020				Three Months Ended September 30, 2019
		Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax			Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Cumulative translation adjustment	Cumulative translation adjustment	$	19,271	$	—	$	19,271	$	2,628	$	—	$	2,628	Cumulative translation adjustment	$	47,343	$	0	$	47,343	$	(37,825)	$	0	$	(37,825)
Pension and other postretirement adjustments	Pension and other postretirement adjustments	(569)		(62)		(631)		1,691		(435)		1,256		Pension and other postretirement adjustments	462		(171)		291		2,188		(525)		1,663
Reclassification adjustments for derivatives	Reclassification adjustments for derivatives	2,739		(623)		2,116		1,583		(359)		1,224		Reclassification adjustments for derivatives	869		(197)		672		1,566		(356)		1,210
Total other comprehensive income (loss)	Total other comprehensive income (loss)	$	21,441	$	(685)	$	20,756	$	5,902	$	(794)	$	5,108	Total other comprehensive income (loss)	$	48,674	$	(368)	$	48,306	$	(34,071)	$	(881)	$	(34,952)


		Six Months Ended June 30, 2020										Six Months Ended June 30, 2019											Nine Months Ended September 30, 2020				Nine Months Ended September 30, 2019
		Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax			Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Cumulative translation adjustment	Cumulative translation adjustment	$	(7,185)	$	—	$	(7,185)	$	(653)	$	—	$	(653)	Cumulative translation adjustment	$	40,158	$	0	$	40,158	$	(38,478)	$	0	$	(38,478)
Pension and other postretirement adjustments	Pension and other postretirement adjustments	2,305		(640)		1,665		3,391		(873)		2,518		Pension and other postretirement adjustments	2,767		(811)		1,956		5,579		(1,398)		4,181
Reclassification adjustments for derivatives	Reclassification adjustments for derivatives	4,284		(974)		3,310		3,171		(720)		2,451		Reclassification adjustments for derivatives	5,153		(1,171)		3,982		4,737		(1,076)		3,661
Total other comprehensive income (loss)	Total other comprehensive income (loss)	$	(596)	$	(1,614)	$	(2,210)	$	5,909	$	(1,593)	$	4,316	Total other comprehensive income (loss)	$	48,078	$	(1,982)	$	46,096	$	(28,162)	$	(2,474)	$	(30,636)

The following table summarizes the amounts reclassified from accumulated other comprehensive income (loss) to net income during the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019:


		Three Months Ended June 30,						Six Months Ended June 30,								Three Months Ended September 30,					Nine Months Ended September 30,
		2020		2019		2020		2019		Income Statement Caption		2020		2019		2020		2019		Income Statement Caption
Pension and other postretirement plans:	Pension and other postretirement plans:										Pension and other postretirement plans:
Amortization of net (gain) loss	Amortization of net (gain) loss	$	(569)	$	1,691	$	2,305	$	3,391	Other (income) expense - net	Amortization of net (gain) loss	$	462	$	2,188	$	2,767	$	5,579	Other (income) expense - net
Total before tax	Total before tax	(569)		1,691		2,305		3,391			Total before tax	462		2,188		2,767		5,579
Provision for income taxes	Provision for income taxes	(62)		(435)		(640)		(873)			Provision for income taxes	(171)		(525)		(811)		(1,398)
Total net of tax	Total net of tax	$	(631)	$	1,256	$	1,665	$	2,518		Total net of tax	$	291	$	1,663	$	1,956	$	4,181
Derivatives:	Derivatives:										Derivatives:
Reclassification adjustments	Reclassification adjustments	$	2,739	$	1,583	$	4,284	$	3,171	Interest expense, Other (income) expense -net	Reclassification adjustments	$	869	$	1,566	$	5,153	$	4,737	Interest expense, Other (income) expense -net
Total before tax	Total before tax	2,739		1,583		4,284		3,171			Total before tax	869		1,566		5,153		4,737
Provision for income taxes	Provision for income taxes	(623)		(359)		(974)		(720)			Provision for income taxes	(197)		(356)		(1,171)		(1,076)
Total net of tax	Total net of tax	$	2,116	$	1,224	$	3,310	$	2,451		Total net of tax	$	672	$	1,210	$	3,982	$	3,661

17. Common and Preferred Stock

On March 17, 2020, the Company’s Board of Directors approved an increase of $500.0 million in the authorized level of repurchases of common stock. This approval is in addition to the prior repurchase authorizations of the Board of Directors of $300.0 million on December 1, 2015 and $400.0 million on November 6, 2014. These authorizations have no expiration date. Repurchases under the program will be funded with future cash flow generation or borrowings available under the Revolving Facility. During the ~~six~~nine months ended ~~June~~September 30, 2020, the Company repurchased a total of 876 thousand shares at a cost of $110.3 million. During the ~~six~~nine months ended ~~June~~September 30, 2019, the Company repurchased a total of 389 thousand shares at a cost of $54.7 million. As of ~~June~~September 30, 2020, the amount of share repurchase authorizations remaining was $712.0 million.

At ~~June~~September 30, 2020 and December 31, 2019, 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. NaN preferred stock was outstanding at ~~June~~September 30, 2020 or December 31, 2019.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

18. Share-Based Compensation

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

Stock Options

Stock options generally vest ratably over four years. 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 June 30,			Six Months Ended June 30,				Three Months Ended September 30,		Nine Months Ended September 30,
		2020	2019	2020	2019		2020	2019	2020	2019
Weighted average fair value of grants	Weighted average fair value of grants	$29.26	$34.82	$34.26	$35.16	Weighted average fair value of grants	$31.60	$27.72	$34.22	$35.15
Dividend yield	Dividend yield	1.34%	1.18%	1.15%	1.18%	Dividend yield	1.18%	1.27%	1.15%	1.18%
Volatility	Volatility	22.17%	23.31%	22.01%	24.78%	Volatility	23.71%	22.33%	22.04%	24.78%
Risk-free interest rate	Risk-free interest rate	0.95% - 1.12%	2.37% - 2.62%	1.42% - 1.68%	2.53% - 3.04%	Risk-free interest rate	0.14% - 0.70%	1.75% - 1.77%	1.40% - 1.66%	2.53% - 3.04%
Expected life (in years)	Expected life (in years)	5.76	5.86	5.80	5.87	Expected life (in years)	5.81	4.65	5.80	5.87

Total compensation cost for stock options is as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Cost of goods sold	Cost of goods sold	$	97	$	90	$	282	$	282	Cost of goods sold	$	107	$	74	$	389	$	356
Selling, general and administrative expenses	Selling, general and administrative expenses	2,127		1,986		5,272		4,526		Selling, general and administrative expenses	2,177		2,137		7,449		6,663
Total expense before income taxes	Total expense before income taxes	2,224		2,076		5,554		4,808		Total expense before income taxes	2,284		2,211		7,838		7,019
Income tax benefit	Income tax benefit	(218)		(284)		(585)		(652)		Income tax benefit	(216)		(288)		(801)		(940)
Total expense after income taxes	Total expense after income taxes	$	2,006	$	1,792	$	4,969	$	4,156	Total expense after income taxes	$	2,068	$	1,923	$	7,037	$	6,079

A summary of the Company’s stock option activity as of ~~June~~September 30, 2020 and changes during the ~~six~~nine months ended ~~June~~September 30, 2020 are presented in the following table:


Stock Options	Stock Options	Shares	Weighted Average Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value		Stock Options	Shares	Weighted Average Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2020	Outstanding at January 1, 2020	1,386,539	$	103.58	6.95	$	94,764,140	Outstanding at January 1, 2020	1,386,539	$	103.58	6.95	$	94,764,140
Granted	Granted	346,545	172.93					Granted	351,780	172.87
Exercised	Exercised	(171,636)	76.39					Exercised	(364,063)	78.91
Forfeited	Forfeited	(47,655)	140.09					Forfeited	(61,511)	142.11
Outstanding at June 30, 2020		1,513,793	$	121.40	7.30	$	60,494,544
Vested and expected to vest as of June 30, 2020		1,416,714	$	62.92	7.19	$	59,585,070
Exercisable at June 30, 2020		823,003	$	96.53	6.10	$	51,004,523
Outstanding at September 30, 2020								Outstanding at September 30, 2020	1,312,745	$	127.20	7.30	$	72,470,296
Vested and expected to vest as of September 30, 2020								Vested and expected to vest as of September 30, 2020	1,231,073	$	125.14	7.20	$	70,508,425
Exercisable at September 30, 2020								Exercisable at September 30, 2020	570,901	$	96.07	5.75	$	49,295,129

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 ~~June~~September 30, 2020 and changes during the ~~six~~nine months ended ~~June~~September 30, 2020 are presented as follows:

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)


Restricted Stock	Restricted Stock	Shares	Weighted-Average Grant Date Fair Value		Restricted Stock	Shares	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2020	Unvested at January 1, 2020	130,248	$	124.61	Unvested at January 1, 2020	130,248	$	124.61
Granted	Granted	36,365	167.81		Granted	38,795	168.28
Vested	Vested	(38,703)	95.03		Vested	(39,578)	95.17
Forfeited	Forfeited	(11,665)	140.16		Forfeited	(16,435)	140.96
Unvested at June 30, 2020		116,245	$	146.64
Unvested at September 30, 2020					Unvested at September 30, 2020	113,030	$	147.08

Dividends are paid on restricted stock awards and their fair value is equal to the market price of the Company’s stock at the date of the grant.

Total compensation cost for restricted stock awards is as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Cost of goods sold	Cost of goods sold	$	77	$	64	$	186	$	202	Cost of goods sold	$	69	$	(10)	$	255	$	192
Selling, general and administrative expenses	Selling, general and administrative expenses	864		1,037		1,846		2,325		Selling, general and administrative expenses	963		1,094		2,809		3,419
Total expense before income taxes	Total expense before income taxes	941		1,101		2,032		2,527		Total expense before income taxes	1,032		1,084		3,064		3,611
Income tax benefit	Income tax benefit	(197)		(205)		(426)		(480)		Income tax benefit	(217)		(204)		(643)		(684)
Total expense after income taxes	Total expense after income taxes	$	744	$	896	$	1,606	$	2,047	Total expense after income taxes	$	815	$	880	$	2,421	$	2,927

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. Cash-settled restricted stock awards are recorded at fair value on a quarterly basis using the market price of the Company’s stock on the last day of the quarter. A summary of the Company’s unvested cash-settled restricted stock activity as of ~~June~~September 30, 2020 and changes during the ~~six~~nine months ended ~~June~~September 30, 2020 are presented in the following table:


Cash-Settled Restricted Stock	Cash-Settled Restricted Stock	Shares	Weighted-Average Fair Value		Cash-Settled Restricted Stock	Shares	Weighted-Average Fair Value
Unvested at January 1, 2020	Unvested at January 1, 2020	74,560	$	172.08	Unvested at January 1, 2020	74,560	$	172.08
Granted	Granted	20,670	173.21		Granted	20,670	173.21
Vested	Vested	(24,405)	172.96		Vested	(24,810)	172.98
Forfeited	Forfeited	(3,470)	158.04		Forfeited	(5,020)	182.41
Unvested at June 30, 2020		67,355	$	158.04
Unvested at September 30, 2020					Unvested at September 30, 2020	65,400	$	182.41

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 June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Cost of goods sold	Cost of goods sold	$	241	$	336	$	312	$	836	Cost of goods sold	$	283	$	118	$	595	$	954
Selling, general and administrative expenses	Selling, general and administrative expenses	925		1,167		1,114		2,697		Selling, general and administrative expenses	1,319		435		2,433		3,132
Total expense before income taxes	Total expense before income taxes	1,166		1,503		1,426		3,533		Total expense before income taxes	1,602		553		3,028		4,086
Income tax benefit	Income tax benefit	(120)		(159)		(136)		(346)		Income tax benefit	(150)		(67)		(286)		(413)
Total expense after income taxes	Total expense after income taxes	$	1,046	$	1,344	$	1,290	$	3,187	Total expense after income taxes	$	1,452	$	486	$	2,742	$	3,673

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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.


		Six Months Ended June 30,				Nine Months Ended September 30,
		2020	2019		2020	2019
Weighted average fair value of grants	Weighted average fair value of grants	$224.14	$207.26	Weighted average fair value of grants	$224.14	$207.26
Dividend yield	Dividend yield	—%	—%	Dividend yield	0%	0%
Volatility	Volatility	19.5%	19.11%	Volatility	19.5%	19.11%
Risk-free interest rate	Risk-free interest rate	1.30%	2.49%	Risk-free interest rate	1.30%	2.49%
Expected life (in years)	Expected life (in years)	2.94	2.83	Expected life (in years)	2.94	2.83

A summary of the Company’s performance share unit activity as of ~~June~~September 30, 2020 and changes during the ~~six~~nine months ended ~~June~~September 30, 2020 are presented in the following table:


Performance Share Units	Performance Share Units	Shares	Weighted-Average Grant Date Fair Value		Performance Share Units	Shares	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2020	Unvested at January 1, 2020	100,575	$	178.97	Unvested at January 1, 2020	100,575	$	178.97
Granted	Granted	42,690	224.14		Granted	42,690	224.14
Vested	Vested	—	—		Vested	0	0
Forfeited	Forfeited	(5,010)	211.81		Forfeited	(6,095)	212.47
Unvested at June 30, 2020		138,255	$	184.27
Unvested at September 30, 2020					Unvested at September 30, 2020	137,170	$	216.26

On December 31, 2019, 54,545 performance share units vested. Based on the Company’s relative total shareholder return rank during the three year period ended December 31, 2019, the Company achieved a 250% payout factor and issued 136,370 common shares in February 2020.

Total compensation cost for performance share units is as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Cost of goods sold	Cost of goods sold	$	—	$	—	$	—	$	—	Cost of goods sold	$	0	$	0	$	0	$	0
Selling, general and administrative expenses	Selling, general and administrative expenses	2,604		2,173		4,653		3,545		Selling, general and administrative expenses	2,572		2,359		7,225		5,904
Total expense before income taxes	Total expense before income taxes	2,604		2,173		4,653		3,545		Total expense before income taxes	2,572		2,359		7,225		5,904
Income tax benefit	Income tax benefit	(59)		(203)		(108)		(251)		Income tax benefit	(49)		(196)		(157)		(447)
Total expense after income taxes	Total expense after income taxes	$	2,545	$	1,970	$	4,545	$	3,294	Total expense after income taxes	$	2,523	$	2,163	$	7,068	$	5,457

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

As of ~~June~~September 30, 2020, there was ~~$16.9~~$14.9 million of total unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 1.4 years, ~~$7.7~~$6.8 million of total unrecognized compensation cost related to restricted stock that is expected to be recognized over a weighted-average period of ~~1.2~~1.1 years, ~~$4.1~~$3.9 million of total unrecognized compensation cost related to cash-settled restricted shares that is expected to be recognized over a weighted-average period of ~~1.1~~1.0 years and ~~$11.9~~$9.9 million of total unrecognized compensation cost related to performance share units that is expected to be recognized over a weighted-average period of ~~1.1~~1.0 years.

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

19. 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.


		Pension Benefits															Pension Benefits
		Three Months Ended June 30,															Three Months Ended September 30,
		2020						2019							2020				2019
		U.S.		Non-U.S.		U.S.		Non-U.S.			U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	Service cost	$	35	$	541	$	209	$	460	Service cost	$	34	$	539	$	484	$	462
Interest cost	Interest cost	190		263		764		361		Interest cost	312		263		764		355
Expected return on plan assets	Expected return on plan assets	(978)		(291)		(801)		(262)		Expected return on plan assets	(927)		(291)		(801)		(258)

Settlement loss recognized										Settlement loss recognized	326		0		486		0
Net amortization	Net amortization	(159)		426		486		280		Net amortization	643		427		487		276
Net periodic benefit cost		$	(912)	$	939	$	658	$	839
Net periodic (benefit) cost										Net periodic (benefit) cost	$	388	$	938	$	1,420	$	835


		Pension Benefits															Pension Benefits
		Six Months Ended June 30,															Nine Months Ended September 30,
		2020						2019							2020				2019
		U.S.		Non-U.S.		U.S.		Non-U.S.			U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	Service cost	$	69	$	1,081	$	417	$	924	Service cost	$	103	$	1,620	$	901	$	1,386
Interest cost	Interest cost	651		526		1,528		726		Interest cost	963		789		2,292		1,081
Expected return on plan assets	Expected return on plan assets	(1,877)		(582)		(1,602)		(526)		Expected return on plan assets	(2,804)		(873)		(2,403)		(784)

Settlement loss recognized										Settlement loss recognized	702		0		486		0
Net amortization and settlement effect	Net amortization and settlement effect	585		852		973		564		Net amortization and settlement effect	852		1,279		1,460		840
Net periodic benefit cost		$	(572)	$	1,877	$	1,316	$	1,688
Net periodic (benefit) cost										Net periodic (benefit) cost	$	(184)	$	2,815	$	2,736	$	2,523


		Other Postretirement Benefits															Other Postretirement Benefits
		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Service cost	Service cost	$	154	$	140	$	309	$	280	Service cost	$	154	$	141	$	463	$	421
Interest cost	Interest cost	157		212		313		424		Interest cost	156		212		469		636
Net amortization	Net amortization	(136)		(158)		(272)		(317)		Net amortization	(135)		(159)		(407)		(476)
Net periodic benefit cost		$	175	$	194	$	350	$	387
Net periodic (benefit) cost										Net periodic (benefit) cost	$	175	$	194	$	525	$	581

The Company expects to contribute approximately $3.0 million to its defined benefit plans and $1.1 million to its other postretirement benefit plans in 2020. During the first ~~six~~nine months of 2020, the Company contributed a total of ~~$0.1~~$3.0 million to fund these plans.

Effective September 30, 2019, the IDEX Corporation Retirement Plan (“Plan”), a U.S. defined benefit plan, was amended to freeze the accrual of retirement benefits for all participants. This action impacted fewer than 60 participants, as the Plan had been closed to new entrants as of December 31, 2004 and frozen as of December 31, 2005 for all but certain older, longer service participants. Subsequent to the freeze, termination of the Plan was approved in November 2019. Participants were notified in February 2020 and the Plan was terminated in May 2020. As a result of the termination, the settlement threshold was reached ~~during the first half of~~in early 2020 and the Company recorded a charge of ~~$0.4~~$0.7 million to Other (income) expense - net in the Condensed Consolidated Statements of Operations for the ~~six~~nine months ended ~~June~~September 30, 2020. The settlement threshold was also ~~triggered the remeasurement of net periodic benefit cost~~reached in 2019, resulting in the Company recording a ~~reduction~~charge of ~~$0.6~~$0.5 million toin Other (income) expense - net in the Condensed Consolidated Statements of Operations for the ~~six~~nine months ended ~~June~~September 30, 2020 as a result of significant decreases in discount rates and strong asset performance in the first half of 2020. As of June 30, 2020, the Plan’s funded status is 108%, with assets valued at $94.8 million and liabilities of $87.6 million.

2019. The settlement also

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IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(unaudited)

triggered the remeasurement of net periodic benefit cost resulting in a reduction of $1.0 million to Other (income) expense - net in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2020 as a result of significant decreases in discount rates and strong asset performance in 2020. As of September 30, 2020, the Plan’s funded status is 110%, with assets valued at $93.4 million and liabilities of $84.8 million.

20. Legal Proceedings

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

21. 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 decreased to ~~$20.8~~$17.4 million for the three months ended ~~June~~September 30, 2020 compared to ~~$31.4~~$24.0 million during the same period in 2019. The effective tax rate ~~increased~~decreased to ~~22.7%~~14.4% for the three months ended ~~June~~September 30, 2020 compared to ~~21.7%~~18.6% during the same period in 2019 primarily due to ~~a $0.7 million decrease~~benefits associated with the finalization of the Global Intangible Low-Tax Income (“GILTI”) regulations in the ~~excess tax benefits related to share-based compensation compared to the prior year period.~~third quarter of 2020.

The provision for income taxes decreased to ~~$46.3~~$63.8 million for the ~~six~~nine months ended ~~June~~September 30, 2020 from ~~$58.2~~$82.2 million during the same period in 2019. The effective tax rate ~~increased~~decreased to ~~21.1%~~18.7% for the ~~six~~nine months ended ~~June~~September 30, 2020 compared to ~~20.7%~~20.0% during the same period in 2019 primarily due to ~~a $1.4 million decrease~~benefits associated with the finalization of the GILTI regulations in the ~~excess tax benefits related to share-based compensation compared to the prior year period.~~third quarter of 2020.

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. However, these unrecognized tax benefits are long-term in nature and will not change within the next ~~twelve~~12 months.

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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,” “Liquidity and Capital Resources” and “Results of Operations” sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements may relate to, among other things, the anticipated continuing effects of the coronavirus pandemic, including with respect to the Company’s sales, facility closures, supply chains and access to capital, capital expenditures, acquisitions, cost reductions, cash flow, cash requirements, revenues, earnings, market conditions, global economies, plant and equipment capacity and operating improvements, and are indicated by words or phrases such as “anticipates,” “estimates,” “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: the duration of the coronavirus pandemic and the continuing effects of the coronavirus on our ability to operate our business and facilities, on our customers, on supply chains and on the U.S. and global economy generally; 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 the Company’s results, particularly in light of the low levels of order backlogs it typically maintains; the Company’s ability to make acquisitions and to integrate and operate acquired businesses on a profitable basis; the relationship of the U.S. dollar to other currencies and its impact on pricing and cost competitiveness; political and economic conditions in foreign countries in which the Company operates; developments with respect to trade policy and tariffs; interest rates; capacity utilization and the effect this has on costs; labor markets; market conditions and material costs; and developments with respect to contingencies, such as litigation and environmental matters. Additional factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the “Risk Factors” section included in the Company’s most recent annual report on Form 10-K and the Company’s subsequent quarterly reports, including this quarterly report on Form 10-Q, filed with the Securities and Exchange Commission (“SEC”) and the other risks discussed in the Company’s filings with the SEC. The forward-looking statements included here are only made as of the date of this report, and management undertakes no obligation to publicly update them to reflect subsequent events or circumstances, except as may be required by law. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented here.

Overview

IDEX Corporation (“IDEX,” “we,” “our,” or the “Company”) is an applied solutions company specializing in the manufacture of fluid and metering technologies, health and science technologies and fire, safety and other diversified products built to customers’ specifications. IDEX’s products are sold in niche markets across a wide range of industries throughout the world. Accordingly, IDEX’s businesses are affected by levels of industrial activity and economic conditions in the U.S. and in other countries where it does business and by the relationship of the U.S. Dollar to other currencies. Levels of capacity utilization and capital spending in certain industries and overall industrial activity are important factors that influence the demand for IDEX’s products.

The Company has three reportable business segments: Fluid & Metering Technologies, Health & Science Technologies and Fire & Safety/Diversified Products. Within our three reportable segments, the Company maintains 13 platforms where we focus on organic growth and strategic acquisitions. Each of our 13 platforms is also a reporting unit that we annually test for goodwill impairment.

The Fluid & Metering Technologies segment designs, produces and distributes positive displacement pumps, small volume provers, flow meters, injectors and other fluid-handling pump modules and systems and provides flow monitoring and other services for the food, chemical, general industrial, water and wastewater, agriculture and energy industries. The Fluid & Metering Technologies segment contains the Energy platform (comprised of Corken, Liquid Controls, SAMPI, Toptech and Flow Management Devices, LLC (“Flow MD”)), the Valves platform (comprised of Alfa Valvole, Richter and Aegis), the Water platform (comprised of Pulsafeeder, OBL, Knight, ADS, Trebor and iPEK), the Pumps platform (comprised of Viking and Warren Rupp) and the Agriculture platform (comprised of Banjo).

The Health & Science Technologies segment designs, produces and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems used in beverage, food processing, pharmaceutical and cosmetics, pneumatic components and sealing solutions, including very high precision, low-

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flow rate pumping solutions required in analytical instrumentation, clinical diagnostics and drug discovery, high performance molded and extruded sealing components, custom mechanical and shaft seals for a variety of end markets including food and beverage, marine, chemical, wastewater and water treatment, engineered hygienic mixers and valves for the global biopharmaceutical industry, 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, 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. The Health & Science Technologies segment contains the Scientific Fluidics & Optics platform (comprised of Eastern Plastics, Rheodyne, Sapphire Engineering, Upchurch Scientific, ERC, CiDRA Precision Services, thinXXS, CVI Melles Griot, Semrock, Advanced Thin Films and FLI), the Sealing Solutions platform (comprised of Precision Polymer Engineering, FTL Seals Technology, Novotema, SFC Koenig and Velcora), the Gast platform, the Micropump platform and the Material Processing Technologies platform (comprised of Quadro, Fitzpatrick, Microfluidics and Matcon).

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

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 from continuing operations calculated according to accounting principles generally accepted in the United States of America (“U.S. GAAP”) but excludes (1) the impact of foreign currency translation and (2) sales from acquired or divested businesses during the first ~~twelve~~12 months of ownership or divestiture. The portion of sales attributable to foreign currency translation is calculated as the difference between (a) the period-to-period change in organic sales and (b) the period-to-period change in organic sales after applying prior period foreign exchange 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~~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.

EBITDA, a non-GAAP measure, means earnings before interest, income taxes, depreciation and amortization. Given the acquisitive nature of the Company, which results in a higher level of amortization expense from recently acquired businesses, management uses EBITDA as an internal operating metric to provide another representation of the businesses’ performance across our three segments and for enterprise valuation purposes. 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 that EBITDA margin is useful for the same reason as EBITDA. EBITDA is also used to calculate certain financial covenants, as discussed in Note 11 in the Notes to Condensed 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 gross profit, Adjusted operating income, Adjusted net income, Adjusted EBITDA 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, a fair value inventory step-up charge and a loss on early debt redemption. Management also uses free cash flow as a measure of operating performance because it provides management a measurement

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of cash generated from operations that is available for mandatory payment obligations and investment opportunities. Each of Adjusted gross profit, Adjusted operating income, Adjusted net income, Adjusted EBITDA, ~~and~~ Adjusted EPS and free cash flow are ~~non-~~

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~~GAAP~~non-GAAP measures and have been reconciled to their most directly comparable GAAP measures in this Item 2 under the heading “Non-GAAP Disclosures.”

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.

Some of our key financial results for the three months ended ~~June~~September 30, 2020 when compared to the same period in the prior year are as follows:

•Sales of ~~$561.2~~$581.1 million decreased ~~13%~~7%; organic sales (which excludes acquisitions and foreign currency translation) were down ~~17%~~12%.

•Operating income of ~~$110.6~~$131.2 million decreased ~~29%~~7%. Adjusted for $2.9 million of restructuring expenses, adjusted operating income decreased 15% to $134.1 million.

•Net income of $103.8 million decreased 1%. Adjusted for $2.2 million of restructuring expenses, net of related tax benefit, adjusted net income decreased 9% to $106.1 million.

•EBITDA of $153.3 million was 26% of sales and covered interest expense by over 14 times. Adjusted EBITDA of $156.2 million was 27% of sales and covered interest expense by almost 15 times.

•Diluted EPS of $1.37 was flat. Adjusted EPS of $1.40 decreased 12 cents, or 8%.

Some of our key financial results for the nine months ended September 30, 2020 when compared to the same period in the prior year are as follows:

•Sales of $1,736.8 million decreased 8%; organic sales (which excludes acquisitions and foreign currency translation) were down 11%.

•Operating income of $381.7 million decreased 14%. Adjusted for a $4.1 million fair value inventory step-up charge and ~~$3.8~~$6.8 million of restructuring expenses, adjusted operating income decreased ~~25%~~15% to ~~$118.5~~$392.6 million.

•Net income of ~~$70.9~~$276.7 million decreased ~~37%~~16%. Adjusted for the $3.2 million fair value inventory step-up charge, ~~$3.0~~$5.2 million of restructuring expenses and a $6.5 million loss on early debt redemption, all net of related tax benefits, adjusted net income decreased ~~27%~~15% to ~~$83.6~~$291.6 million.

•EBITDA of ~~$124.8 million was 22% of sales and covered interest expense by 10 times. Adjusted EBITDA of $141.1~~$436.4 million was 25% of sales and covered interest expense by ~~over 11 times.~~

•~~Diluted EPS of $0.93 decreased 55 cents, or 37%. Adjusted EPS of $1.10 decreased 40 cents, or 27%.~~

~~Some of our key financial results for the six months ended June 30, 2020 when compared to the same period in the prior year are as follows:~~

•~~Sales of $1,155.7 million decreased 9%; organic sales (which excludes acquisitions and foreign currency translation) were down 11%.~~

•Operating income of $250.5 million decreased 17%. Adjusted for a $4.1 million fair value inventory step-up charge and $3.8 million of restructuring expenses, adjusted operating income decreased 15% to $258.5 million.

•Net income of $172.9 million decreased 23%. Adjusted for a $3.2 million fair value inventory step-up charge, $3.0 million of restructuring expenses and a $6.5 million loss on early debt redemption, all net of related tax benefits, adjusted net income decreased 18% to $185.6 million.

•~~EBITDA of $283.1 million was 25% of sales and covered interest expense by over 12~~almost 13 times. Adjusted EBITDA of ~~$299.5~~$455.7 million was 26% of sales and covered interest expense by over 13 times.

•Diluted EPS of ~~$2.27~~$3.64 decreased 6566 cents, or ~~22%~~15%. Adjusted EPS of ~~$2.44~~$3.84 decreased 5063 cents, or ~~17%~~14%.

Results of Operations

The following is a discussion and analysis of our results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019. Segment operating income and EBITDA exclude unallocated corporate operating expenses of ~~$17.2~~$14.2 million and ~~$19.2~~$17.9 million for the three months ended ~~June~~September 30, 2020 and 2019, respectively, and ~~$34.7~~$48.9 million and ~~$37.8~~$55.7 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, respectively.

The Company ~~continues~~has adapted to help in the fight against COVID-19 with several of our businesses playing critical roles in keeping essential activities operating. We also continue to be focused on making sure our employees are safe and our operations have the ability to deliver the products neededpivoting to support many products that are being used in the fight against COVID-19. We have placed safety atop our list of priorities, implementing protocols at all of our facilities, including temperature taking, social distancing, enhanced cleaning and face coverings. These measures have enabled successful business continuity, allowing our facilities to remain in operation with only temporary shutdowns at the initial onset of the COVID-19 ~~battle. Most of our sites are considered essential businesses and~~pandemic. Although we have remained ~~open during~~in operation throughout the ~~pandemic. However,~~pandemic, satisfying customer needs in part through our focus on the ~~virus did cause several~~development and manufacturing of ~~our sites to temporarily shut down for cleaning due to employees testing positive for COVID-19. All such sites returned to operations within a short period of time.~~products used in the fight against COVID-19, the pandemic and the enacted containment measures have adversely affected our business and results of ~~operations and the~~operations. The businesses of our customers ~~who are purchasing less product in response to~~have been harmed by the economic conditions caused by ~~COVID-19. The Company expects the months ahead will remain challenging~~COVID-19 and as ~~this global pandemic continues and, based~~a result, our customers are purchasing less product than they have historically purchased outside of these conditions. Based on currently available information and management's current expectations, the Company anticipates that organic sales will be down approximately 123 to 175 percent in the ~~third~~fourth quarter of ~~2020. Based on management's current expectations,~~2020 but we believe our strong balance sheet, with over ~~$1.5~~$1.6 billion of liquidity and gross leverage of ~~1.6~~1.7 times, will provide IDEX the necessary capital to navigate the COVID-19 pandemic for the foreseeable future. Additionally, IDEX ~~has~~ implemented ~~certain~~ cost reduction actions, including employee reductions, and ~~has maintained~~continues to maintain a tight cost control environment. Despite our expectations and the actions taken to reduce costs, we can provide no assurances that access to our invested cash, cash equivalents or short-term investments will not be impacted by adverse conditions in the financial markets, including, without limitation, as a result of the impact of the COVID-19 pandemic and we ~~cannot predict how long the COVID-19 pandemic will continue. Moreover,~~

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cannot predict how long the COVID-19 pandemic will continue. Moreover, COVID-19 and related measures to contain its impact have caused material disruptions in both national and global financial markets and economies. The continuing impact of COVID-19 and the enacted containment measures cannot be predicted and may continue to adversely affect, perhaps materially, our business, results of operations, financial condition and liquidity.

Consolidated Results for the Three Months Ended ~~June~~September 30, 2020 Compared with the Same Period in 2019


(In thousands)	(In thousands)	Three Months Ended June 30,										(In thousands)	Three Months Ended September 30,
		2020			2019				2020				2019
Net sales	Net sales	$	561,249		$	642,099		Net sales	$	581,113			$	624,246
Operating income	Operating income	110,594			155,283			Operating income	131,213				141,765
Operating margin	Operating margin	19.7		%	24.2		%	Operating margin	22.6		%		22.7		%

Sales in the ~~second~~third quarter of 2020 were ~~$561.2~~$581.1 million, which was a ~~13%~~7% decrease compared to the same period in 2019. This reflects a ~~17%~~12% decrease in organic sales, ~~and~~partially offset by a 1% ~~unfavorable~~favorable impact from foreign currency translation ~~partially offset by~~and a 5%4% increase from acquisitions (Flow MD - February 2020 and Velcora - July 2019). Sales to customers outside the U.S. represented approximately ~~48%~~51% of total sales in the ~~second~~third quarter of 2020 compared to ~~49%~~50% during the same period in 2019.

Gross profit of ~~$234.8~~$251.5 million in the ~~second~~third quarter of 2020 decreased ~~$57.5~~$30.5 million, or ~~20%~~11%, compared to the same period in 2019, and gross margin of ~~41.8%~~43.3% in the ~~second~~third quarter of 2020 decreased ~~370~~190 basis points from ~~45.5%~~45.2% during the same period in ~~2019. Gross profit and gross margin decreased compared to the prior year period~~2019 as a result of ~~reduced~~lower volume and business mix, ~~the dilutive impact to margins from the recent acquisitions and a fair value inventory step-up charge included in the current year period.~~partially offset by price.

Selling, general and administrative expenses decreased to ~~$120.4~~$117.4 million in the ~~second~~third quarter of 2020 from ~~$134.9~~$128.3 million during the same period in 2019. The decrease is primarily due to restructuring savings, discretionary cost controls and lower variable costs. Corporate costs of ~~$17.0~~$14.1 million in the ~~second~~third quarter of 2020 decreased from ~~$19.2~~$17.2 million during the same period in 2019 primarily as a result of tightly controlling discretionary spending in the current year, restructuring savings and ~~restructuring savings.~~lower variable costs. As a percentage of sales, selling, general and administrative expenses were ~~21.4%~~20.2% for the ~~second~~third quarter of 2020, updown 40 basis points compared to ~~21.0%~~20.6% during the same period in 2019.

The Company incurred ~~$3.8~~$2.9 million of restructuring expenses in the ~~second~~third quarter of 2020 compared with ~~$2.1~~$12.0 million during the same period in ~~2019~~2019. The restructuring expenses in the third quarter of 2020 primarily related to severance benefits for cost reduction actions primarily consisting of employee reductions due to lower demand as a result of the COVID-19 pandemic. The restructuring expenses in the third quarter of 2019 included severance benefits of $1.9 million and exit costs of $0.4 million as well as an asset impairment charge of $9.7 million. In the second quarter of ~~2020 all related~~2019, the Company began to ~~severance benefits.~~evaluate strategic alternatives for one of its businesses in the HST segment. Prior to making a final decision on the options that were presented for this business, the business was informed in the third quarter of 2019 of the loss of its largest customer. As a result, the Company accelerated its restructuring activities for this business and a decision was made to wind down the business over time, requiring the asset impairment charge.

Operating income of ~~$110.6~~$131.2 million and operating margin of ~~19.7%~~22.6% in the ~~second~~third quarter of 2020 were down from ~~$155.3~~$141.8 million and ~~24.2%~~22.7%, respectively, during the same period in 2019. The decreases in operating income and operating margin were driven by lower ~~sales~~ volume ~~the dilutive impact to margins from the recent acquisitions, the fair value inventory step-up charge~~ and ~~higher restructuring expenses in 2020,~~business mix, partially offset by price, restructuring savings, tightly controlling discretionary spending in the current year and ~~an overall reduction~~the asset impairment and fair value inventory step-up charges that occurred in ~~variable expenses.~~the third quarter of 2019.

Other (income) expense - net increased to ~~$6.5~~$0.7 million of ~~expense~~income in the ~~second~~third quarter of 2020 compared to ~~$0.4~~$1.2 million of ~~income~~expense during the same period in 2019, primarily due to a $0.7 million loss on early retirement of Velcora debt assumed at acquisition in the third quarter of 2019 that did not reoccur in 2020, $0.5 million of higher gains on pension-related investments, $0.5 million of lower foreign currency transaction losses in 2020 compared to the same period in 2019 ~~primarily due to an $8.4 million loss on early debt redemption, partially offset by $1.5~~and $0.3 million of lower pension expense in 2020 ~~and $1.2 million of higher gains on pension-related investments.~~.

Interest expense of ~~$12.4~~$10.6 million in the ~~second~~third quarter of 2020 was ~~higher~~lower than the ~~$11.0~~$11.3 million in the same period of 2019 due to ~~borrowings under the Revolving Facility in 2020 and~~lower interest expense on the new 3.0% Senior Notes issued during the second quarter of 2020.

The provision for income taxes decreased to ~~$20.8~~$17.4 million for the ~~second~~third quarter of 2020 compared to ~~$31.4~~$24.0 million during the same period in 2019. The effective tax rate ~~increased~~decreased to ~~22.7%~~14.4% for the ~~second~~third quarter of 2020 compared to ~~21.7%~~18.6% during the

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same period in 2019 primarily due to ~~a decrease~~benefits associated with the finalization of the Global Intangible Low-Tax Income (“GILTI”) regulations in the ~~excess tax benefits related to share-based compensation.~~third quarter of 2020.

Net income in the ~~second~~third quarter of 2020 of ~~$70.9~~$103.8 million decreased from ~~$113.2~~$105.2 million during the same period in 2019. Diluted earnings per share in the ~~second~~third quarter of 2020 of ~~$0.93 decreased $0.55, or 37%,~~$1.37 was flat compared to the same period in 2019.

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For the three months ended ~~June~~September 30, 2020, Fluid & Metering Technologies contributed ~~39%~~38% of sales, 40% of operating income and ~~39%~~40% of EBITDA; Health & Science Technologies contributed 38% of sales, ~~37%~~34% of operating income and ~~39%~~36% of EBITDA; and Fire & Safety/Diversified Products contributed ~~23%~~24% of sales, ~~23%~~26% of operating income and ~~22%~~24% of EBITDA. These percentages are calculated on the basis of total segment (not total Company) sales, operating income and EBITDA.

Fluid & Metering Technologies Segment


(In thousands)	(In thousands)	Three Months Ended June 30,										(In thousands)	Three Months Ended September 30,
		2020			2019				2020				2019
Net sales	Net sales	$	219,112		$	246,189		Net sales	$	220,747			$	240,861
Operating income	Operating income	50,938			74,146			Operating income	58,402				77,481
Operating margin	Operating margin	23.2		%	30.1		%	Operating margin	26.5		%		32.2		%

Sales of ~~$219.1~~$220.7 million decreased ~~$27.1~~$20.1 million, or ~~11%~~8%, in the ~~second~~third quarter of 2020 compared to the same period in 2019. This reflects a ~~20%~~17% decrease in organic sales, ~~and~~partially offset by a 1% ~~unfavorable~~favorable impact from foreign currency translation ~~partially offset by a 10%~~and an 8% percent increase from acquisitions (Flow MD - February 2020). In the ~~second~~third quarter of 2020, sales decreased 4%9% domestically and ~~20%~~8% internationally compared to the same period in 2019. Sales to customers outside the U.S. were approximately ~~39%~~45% of total segment sales in the ~~second~~third quarters of both 2020 and 2019.

Sales within our Pumps platform decreased in the third quarter of 2020 compared to ~~43% during~~ the same period in ~~2019.~~

2019 due to continued market declines in industrial and oil and gas markets, compounded by the continued impact of the COVID-19 pandemic driving reduced capital spending. Sales within our Valves platform decreased in the ~~second~~third quarter of 2020 compared to the same period in 2019 due to the softening global industrial landscape and lower energy prices driving decreases in capital spending. Sales within our Agriculture platform decreased in the ~~second~~third quarter of 2020 compared to the same period in 2019 due to timing of pre-season programs and decreased demand across both the agricultural and industrial original equipment manufacturer (“OEM”) markets. Sales within our Pumps platform decreased in the second quarter of 2020 compared to the same period in 2019 due to continued market declines in industrial and oil and gas markets, compounded by the impact of the COVID-19 pandemic driving reduced capital spending. Sales within our Water platform decreased in the ~~second~~third quarter of 2020 compared to the same period in 2019 primarily due to project delays from the ~~non-repeat~~impact of ~~large projects across the U.S.~~COVID-19 and ~~Asia.~~market softness. Sales within our Energy platform increased in the ~~second~~third quarter of 2020 compared to the same period in 2019 due to the acquisition of Flow MD, partially offset by declining capital spending in the oil and gas markets.

Operating income of ~~$50.9~~$58.4 million and operating margin of ~~23.2%~~26.5% in the ~~second~~third quarter of 2020 were lower than ~~$74.1~~$77.5 million and ~~30.1%~~32.2%, respectively, recorded during the same period in 2019, primarily due to lower volume and ~~the impact of the Flow MD acquisition as well as a fair value inventory step-up charge and~~ higher restructuring expenses, ~~included in the current year period,~~ partially offset by price, restructuring savings and ~~lower variable costs.~~tightly controlling discretionary spending in the current year.

Health & Science Technologies Segment


(In thousands)	(In thousands)	Three Months Ended June 30,										(In thousands)	Three Months Ended September 30,
		2020			2019				2020				2019
Net sales	Net sales	$	215,668		$	232,253		Net sales	$	220,378			$	229,610
Operating income	Operating income	48,007			56,763			Operating income	49,912				40,170
Operating margin	Operating margin	22.3		%	24.4		%	Operating margin	22.6		%		17.5		%

Sales of ~~$215.7~~$220.4 million decreased ~~$16.6~~$9.2 million, or 7%4%, in the ~~second~~third quarter of 2020 compared to the same period in 2019. This reflects a ~~10%~~6% decrease in organic sales, ~~and~~partially offset by a 1% ~~unfavorable~~favorable impact from foreign currency translation ~~partially offset by~~and a 4%1% increase from acquisitions (Velcora - July 2019). In the ~~second~~third quarter of 2020, sales decreased ~~12%~~5% domestically and 3% internationally compared to the same period in 2019. Sales to customers outside the U.S. were approximately ~~57%~~55% of total segment sales in both the ~~second~~third quarters of 2020 and 2019.

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Sales within our Micropump platform decreased in the third quarter of 2020 compared to ~~54% during~~ the same period in ~~2019.~~

2019 due to lower demand from customers in the inkjet printing market. Sales within our Scientific Fluidics & Optics platform decreased in the third quarter of 2020 compared to the same period in 2019 due to the impact of the COVID-19 pandemic which limited or delayed investments in Analytical Instrumentation due to lab closures and IVD/Bio due to lower demand for non-COVID applications, partially offset by increased demand for microfluidics and optical solutions supporting COVID-19 testing applications. Sales within our Gast platform decreased in the ~~second~~third quarter of 2020 compared to the same period in 2019 primarily due to the non-repeat of a large customer project and a slowdown across various industrial end markets, partially offset by new initiatives in response to the COVID-19 pandemic. Sales within our Micropump platform decreased in the second quarter of 2020 compared to the same period in 2019 due to lower demand from customers in the inkjet printing market. Sales within our Scientific Fluidics & Optics platform decreased in the second quarter of 2020 compared to the same period in 2019 due to the impact of the COVID-19 pandemic which limited investment by hospitals and laboratories in new Analytical Instrumentation equipment, partially offset by increased demand for microfluidics and optical solutions supporting COVID-19 testing. Sales within our Material Processing Technologies platform decreased in the second quarter of 2020 compared to the same period in

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2019 primarily due to lower overall demand as a result of the COVID-19 pandemic and the non-repeat of large projects from the prior year, partially offset by strong volumes in the pharmaceutical industry in response to the COVID-19 pandemic. Sales within our Sealing Solutions platform decreased in the ~~second~~third quarter of 2020 compared to the same period in 2019 primarily due to disruption in the automotive and oil and gas markets, partially offset by the Velcora acquisition and the recovery in the semiconductor market. Sales within our Material Processing Technologies platform increased in the third quarter of 2020 compared to the same period in 2019 primarily due to strong volumes in the food and pharmaceutical industries.

Operating income of ~~$48.0~~$49.9 million and operating margin of ~~22.3%~~22.6% in the ~~second~~third quarter of 2020 were ~~lower~~higher than ~~$56.8~~$40.2 million and ~~24.4%~~17.5%, respectively, recorded during the same period in 2019, primarily due to ~~lower volume,~~ the ~~impact of~~asset impairment and fair value inventory-step up charges that occurred in the ~~Velcora acquisition and higher restructuring expenses, partially offset by~~prior year period, price, restructuring savings and tightly controlling discretionary spending in the current year, partially offset by lower ~~variable costs.~~volume and the impact on margins from the Velcora acquisition.

Fire & Safety/Diversified Products Segment


(In thousands)	(In thousands)	Three Months Ended June 30,										(In thousands)	Three Months Ended September 30,
		2020			2019				2020				2019
Net sales	Net sales	$	127,076		$	164,043		Net sales	$	140,896			$	154,543
Operating income	Operating income	28,837			43,614			Operating income	37,103				41,967
Operating margin	Operating margin	22.7		%	26.6		%	Operating margin	26.3		%		27.2		%

Sales of ~~$127.1~~$140.9 million decreased ~~$37.0~~$13.6 million, or ~~23%~~9%, in the ~~second~~third quarter of 2020 compared to the same period in 2019. This reflects a ~~22%~~10% decrease in organic sales, ~~and~~partially offset by a 1% ~~unfavorable~~favorable impact from foreign currency translation. In the ~~second~~third quarter of 2020, sales decreased ~~19%~~12% domestically and ~~26%~~6% internationally compared to the same period in 2019. Sales to customers outside the U.S. were approximately ~~50%~~54% of total segment sales in the ~~second~~third quarter of 2020 compared to 52% during the same period in 2019.

Sales within our Dispensing platform decreased in the ~~second~~third quarter of 2020 compared to the same period in 2019 primarily due to ~~customer shutdowns and disruption~~the non-repeat of large projects in ~~the paint market as a result of the COVID-19 pandemic.~~North America. Sales within our Band-It platform decreased in the ~~second~~third quarter of 2020 compared to the same period in 2019 due to ~~customer shutdowns~~continued softness in the industrial and transportation ~~market~~markets as a result of the COVID-19 pandemic and lower capital spending in the energy markets. Sales within our Fire & Safety platform decreased in the ~~second~~third quarter of 2020 compared to the same period in 2019 due to ~~fewer~~timing of large projects and market softness globally for the Fire ~~and Rescue businesses.~~business.

Operating income of ~~$28.8~~$37.1 million ~~in the second quarter of 2020 was lower than $43.6 million during the same period in 2019~~ and operating margin of ~~22.7%~~26.3% in the ~~second~~third quarter of 2020 ~~was~~were lower than ~~the 26.6%~~$42.0 million and 27.2%, respectively, during the same period in 2019. Operating income and operating margin decreased compared to the prior period as a result of lower volume and ~~business mix,~~higher restructuring expenses, partially offset by price, ~~and~~ restructuring savings ~~as well as lower variable costs~~ and ~~lower restructuring expenses.~~tightly controlling discretionary spending in the current year.

Consolidated Results for the ~~Six~~Nine Months Ended ~~June~~September 30, 2020 Compared with the Same Period in 2019


(In thousands)	(In thousands)	Six Months Ended June 30,										(In thousands)	Nine Months Ended September 30,
		2020			2019				2020				2019
Net sales	Net sales	$	1,155,711		$	1,264,330		Net sales	$	1,736,824			$	1,888,576
Operating income	Operating income	250,535			303,065			Operating income	381,748				444,830
Operating margin	Operating margin	21.7		%	24.0		%	Operating margin	22.0		%		23.6		%

Sales in the first ~~six~~nine months of 2020 were ~~$1,155.7~~$1,736.8 million, which was ~~a 9%~~an 8% decrease compared to the same period in 2019. This reflects an 11% decrease in organic sales, ~~and a 1% unfavorable impact from foreign currency translation,~~ partially offset by a 3% increase from acquisitions (Flow MD - February 2020 and Velcora - July 2019). Sales to customers outside the U.S. represented approximately ~~49%~~50% of total sales in the first ~~six~~nine months of 2020 ~~compared to 50% during the same period in~~and 2019.

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Gross profit of ~~$506.8~~$758.3 million in the first ~~six~~nine months of 2020 decreased ~~$69.4~~$99.9 million, or 12%, compared to the same period in 2019 and gross margin of ~~43.8%~~43.7% in the first ~~six~~nine months of 2020 decreased ~~180~~170 basis points from ~~45.6%~~45.4% during the same period in 2019. Both gross profit and gross margin decreased compared to the prior year period primarily due to ~~reduced~~lower volume and business ~~mix, the dilutive impact to margins from the recent acquisitions and a fair value inventory step-up charge included in the current year period.~~mix.

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Selling, general and administrative expenses decreased to ~~$252.4~~$369.8 million in the first ~~six~~nine months of 2020 from ~~$271.0~~$399.2 million during the same period in 2019, primarily due to restructuring savings and lower variable costs. Corporate costs decreased to ~~$34.5~~$48.6 million in the first ~~six~~nine months of 2020 compared to ~~$37.8~~$55.0 million during the same period in 2019 primarily due to tightly controlling discretionary spending in the current year, restructuring savings and ~~restructuring savings.~~lower variable costs. As a percentage of sales, selling, general and administrative expenses were ~~21.8%~~21.3% for the first ~~six~~nine months of 2020, up 4020 basis points compared to ~~21.4%~~21.1% during the same period in 2019.

The Company incurred ~~$3.8~~$6.8 million of restructuring expenses in the first ~~six~~nine months of 2020 compared with ~~$2.1~~$14.1 million during the same period in ~~2019~~2019. The restructuring expenses in the first nine months of 2020 primarily related to severance benefits for cost reduction actions primarily consisting of employee reductions due to lower demand as a result of the COVID-19 pandemic. The restructuring expenses in the ~~first six months~~third quarter of ~~2020 all related~~2019 included severance benefits of $3.8 million and exit costs of $0.6 million as well as an asset impairment charge of $9.7 million. In the second quarter of 2019, the Company began to ~~severance benefits.~~evaluate strategic alternatives for one of its businesses in the HST segment. Prior to making a final decision on the options that were presented for this business, the business was informed in the third quarter of 2019 of the loss of its largest customer. As a result, the Company accelerated its restructuring activities for this business and a decision was made to wind down the business over time, requiring the asset impairment charge.

Operating income of ~~$250.5~~$381.7 million and operating margin of ~~21.7%~~22.0% in the first ~~six~~nine months of 2020 were down from the ~~$303.1~~$444.8 million and ~~24.0%~~23.6%, respectively, recorded during the same period in 2019. The decreases in operating income and operating margin are primarily due to lower ~~sales~~ volume, the dilutive impact toon margins from the ~~recent acquisitions,~~Velcora acquisition and the fair value inventory step-up charge, ~~and higher~~partially offset by price, lower restructuring expenses in 2020 ~~partially offset by price, restructuring savings~~ and an overall reduction in variable ~~expenses.~~costs.

Other (income) expense - net was ~~$8.0~~$7.3 million of expense in the first ~~six~~nine months of 2020 compared to ~~$0.5~~$0.7 million of ~~income~~expense during the same period in 2019, primarily due to an $8.4 million loss on early debt redemption, partially offset by $1.7 million of lower pension expense in 2020.

Interest expense of ~~$23.3~~$34.0 million in the first ~~six~~nine months of 2020 was higher than the ~~$21.9~~$33.3 million in the same period of 2019 due to borrowings under the Revolving Facility in 2020, ~~and~~partially offset by lower interest expense on the new 3.0% Senior Notes issued during the second quarter of 2020.

The provision for income taxes decreased to ~~$46.3~~$63.8 million in the first ~~six~~nine months of 2020 compared to ~~$58.2~~$82.2 million during the same period in 2019. The effective tax rate ~~increased~~decreased to ~~21.1%~~18.7% in the first ~~six~~nine months of 2020 compared to ~~20.7%~~20.0% during the same period in 2019 primarily due to ~~a decrease~~benefits associated with the finalization of the GILTI regulations in the ~~excess tax benefits related to share-based compensation.~~third quarter of 2020.

Net income of ~~$172.9~~$276.7 million in the first ~~six~~nine months of 2020 decreased from ~~$223.5~~$328.7 million during the same period in 2019. Diluted earnings per share of ~~$2.27~~$3.64 in the first ~~six~~nine months of 2020 decreased ~~$0.65,~~$0.66, or ~~22%~~15%, compared to the same period in 2019.

For the ~~six~~nine months ended ~~June~~September 30, 2020, Fluid & Metering Technologies contributed ~~39%~~38% of sales, 41% of operating income and 40% of EBITDA; Health & Science Technologies contributed 38% of sales, 35% of operating income and 37% of EBITDA; and Fire & Safety/Diversified Products contributed ~~23%~~24% of sales, 24% of operating income and 23% of EBITDA. These percentages are calculated on the basis of total segment (not total Company) sales, operating income and EBITDA.

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Fluid & Metering Technologies Segment


(In thousands)	(In thousands)	Six Months Ended June 30,										(In thousands)	Nine Months Ended September 30,
		2020			2019				2020				2019
Net sales	Net sales	$	445,973		$	488,711		Net sales	$	666,720			$	729,572
Operating income	Operating income	117,709			146,012			Operating income	176,111				223,493
Operating margin	Operating margin	26.4		%	29.9		%	Operating margin	26.4		%		30.6		%

Sales of ~~$446.0~~$666.7 million decreased ~~$42.7~~$62.9 million, or 9%, in the first ~~six~~nine months of 2020 compared to the same period in 2019. This reflects a ~~13%~~15% decrease in organic sales, ~~and a 1% unfavorable impact from foreign currency translation,~~ partially offset by a 5%6% increase from acquisitions (Flow MD - February 2020). In the first ~~six~~nine months of 2020, sales decreased 6%7% domestically and ~~13%~~11% internationally compared to the same period in 2019. Sales to customers outside the U.S. were approximately ~~41%~~42% of total segment sales in the first ~~six~~nine months of 2020 compared to ~~43%~~44% during the same period in 2019.

Sales within our Pumps platform decreased in the first nine months of 2020 compared to the same period in 2019 due to continued market declines in industrial and oil and gas markets, compounded by the continued impact of the COVID-19 pandemic, driving declines across most end markets and geographies. Sales within our Valves platform decreased in the first ~~six~~nine months of 2020 compared to the same period in 2019 due to the softening global industrial landscape and lower energy prices driving decreases in capital spending. Sales within our Water platform decreased in the first nine months of 2020 compared to the same period in 2019 primarily due to lower project volumes across the U.S. and Asia. Sales within our Agriculture platform decreased in the first ~~six~~nine months of 2020 compared to the same period in 2019 due to decreased demand across both the agricultural and industrial OEM markets. Sales within our Pumps platform decreased in the first six months of 2020 compared to the same period in 2019 due to continued market declines in industrial and oil and gas markets, compounded by the impact of the COVID-19 pandemic, driving declines across most end markets and geographies. Sales within our Water

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~~platform decreased in the first six months of 2020 compared to the same period in 2019 primarily due to lower project volumes across the U.S. and Asia. Sales within our~~ Energy platform increased in the first ~~six~~nine months of 2020 compared to the same period in 2019 due to the acquisition of Flow MD, partially offset by declining capital spending in the oil and gas markets.

Operating income of ~~$117.7~~$176.1 million and operating margin of 26.4% in the first ~~six~~nine months of 2020 were lower than the ~~$146.0~~$223.5 million and ~~29.9%~~30.6%, respectively, recorded in the first ~~six~~nine months of 2019, primarily due to lower volume ~~and the impact of the Flow MD acquisition~~ as well as higher restructuring expenses and a fair value inventory step-up charge ~~and higher restructuring expenses~~ included in the current year period, partially offset by the impact of the Flow MD acquisition, price, restructuring savings and ~~lower variable costs.~~tightly controlling discretionary spending in the current year.

Health & Science Technologies Segment


(In thousands)	(In thousands)	Six Months Ended June 30,										(In thousands)	Nine Months Ended September 30,
		2020			2019				2020				2019
Net sales	Net sales	$	439,727		$	457,543		Net sales	$	660,105			$	687,153
Operating income	Operating income	100,650			110,917			Operating income	150,562				151,087
Operating margin	Operating margin	22.9		%	24.2		%	Operating margin	22.8		%		22.0		%

Sales of ~~$439.7~~$660.1 million decreased ~~$17.8~~$27.0 million, or 4%, in the first ~~six~~nine months of 2020 compared to the same period in 2019. This reflects a 7% decrease in organic sales, ~~and a 1% unfavorable impact from foreign currency translation,~~ partially offset by a 4%3% increase from acquisitions (Velcora - July 2019). In the first ~~six~~nine months of 2020, sales decreased 8%7% domestically and 1%2% internationally compared to the same period in 2019. Sales to customers outside the U.S. were approximately ~~57.0%~~56% of total segment sales in the first ~~six~~nine months of 2020 compared to 55% during the same period in 2019.

Sales within our Gast platform decreased in the first ~~six~~nine months of 2020 compared to the same period in 2019 primarily due to the non-repeat of a large customer project and a slowdown across various industrial end markets, partially offset by new initiatives in response to the COVID-19 pandemic. Sales within our Micropump platform decreased in the first ~~six~~nine months of 2020 compared to the same period in 2019 due to weakness in core printing and industrial distribution. Sales within our Scientific Fluidics & Optics platform decreased in the first ~~six~~nine months of 2020 compared to the same period in 2019 due to the impact of the COVID-19 pandemic, which limited ~~investment by hospitals and laboratories~~or delayed investments in ~~new~~ Analytical Instrumentation ~~equipment,~~and IVD/Bio due to lab closures and lower demand for non-COVID applications, partially offset by increased demand for microfluidics and optical solutions supporting COVID-19 testing. Sales within our Material Processing Technologies platform increased in the first six months of 2020 compared to the same period in 2019 primarily due to strong volumes in the pharmaceutical industry in response to the COVID-19 pandemic, partially offset by the non-repeat of large projects from the prior year.testing applications. Sales within our Sealing Solutions platform increased in the first ~~six~~nine months of 2020 compared to the same period in 2019 primarily due to the Velcora acquisition and the recovery in the semiconductor market, partially offset by disruption in the automotive and oil and gas markets. Sales within our Material Processing Technologies platform increased in the first nine months of 2020 compared to the same period in 2019 primarily due

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to strong volumes in the food and pharmaceutical industry in response to the COVID-19 pandemic, partially offset by the non-repeat of large projects from the prior year.

Operating income of ~~$100.7~~$150.6 million ~~and operating margin of 22.9%~~ in the first ~~six~~nine months of 2020 ~~were~~was lower than the ~~$110.9~~$151.1 million ~~and 24.2%, respectively,~~ recorded during the same period in 2019 while operating margin of 22.8% in the first nine months of 2020 was higher than the 22.0% recorded during the same period in 2019. The decrease in operating income was primarily due to lower ~~volume,~~volume. The increase in operating margin was due to restructuring savings, tightly controlling discretionary spending in the current year and lower restructuring expenses in the current period, partially offset by the dilutive impact toon margins offrom the Velcora ~~acquisition and higher restructuring expenses, partially offset by price, restructuring savings and lower variable costs.~~acquisition.

Fire & Safety/Diversified Products Segment


(In thousands)	(In thousands)	Six Months Ended June 30,										(In thousands)	Nine Months Ended September 30,
		2020			2019				2020				2019
Net sales	Net sales	$	271,400		$	320,202		Net sales	$	412,296			$	474,745
Operating income	Operating income	66,874			83,942			Operating income	103,977				125,909
Operating margin	Operating margin	24.6		%	26.2		%	Operating margin	25.2		%		26.5		%

Sales of ~~$271.4~~$412.3 million decreased ~~$48.8~~$62.4 million, or ~~15%~~13%, in the first ~~six~~nine months of 2020 compared to the same period in 2019. This reflects a ~~14%~~13% decrease in organic ~~sales and a 1% unfavorable impact from foreign currency translation.~~sales. In the first ~~six~~nine months of 2020, sales decreased ~~10%~~11% domestically and ~~20%~~16% internationally compared to the same period in 2019. Sales to customers outside the U.S. were approximately ~~49%~~51% of total segment sales in the first ~~six~~nine months of 2020 compared with 52% during the same period in 2019.

Sales within our Dispensing platform decreased in the first ~~six~~nine months of 2020 compared to the same period in 2019 primarily due to ~~customer shutdowns and disruption in the paint market~~lower capital spending by customers as a result of the COVID-19 pandemic. Sales within

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our Band-It platform decreased in the first ~~six~~nine months of 2020 compared to the same period in 2019 due to customer shutdowns in the transportation market as a result of the COVID-19 pandemic and lower capital spending in the energy markets. Sales within our Fire & Safety platform decreased in the first ~~six~~nine months of 2020 compared to the same period in 2019 due to fewer large projects and market softness globally for the Fire and Rescue businesses.

Operating income of ~~$66.9~~$104.0 million and operating margin of ~~24.6%~~25.2% in the first ~~six~~nine months of 2020 were lower than the ~~$83.9~~$125.9 million and ~~26.2%~~26.5%, respectively, recorded during the same period in 2019, primarily due to lower volume and ~~business mix,~~higher restructuring expenses, partially offset by price, ~~and~~ restructuring savings ~~as well as lower variable costs~~ and ~~lower restructuring expenses.~~tightly controlling discretionary spending in the current year.

Liquidity and Capital Resources

Operating Activities

Cash flows from operating activities for the first ~~six~~nine months of 2020 increased ~~$34.4~~$31.0 million, or ~~16%~~8%, to ~~$254.2~~$407.9 million compared to the first ~~six~~nine months of 2019 due to favorable working capital, partially offset by lower earnings. At ~~June~~September 30, 2020, working capital was ~~$995.9~~$1,111.1 million and the Company’s current ratio was ~~3.5~~3.7 to 1. At ~~June~~September 30, 2020, the Company’s cash and cash equivalents totaled ~~$746.3~~$877.8 million, of which ~~$411.2~~$483.3 million was held outside of the United States. The COVID-19 pandemic has impacted and may continue to impact the Company’s operating cash flows through direct and secondary effects on the Company’s operations, customers and supply chain. Although the Company has been able to operate through the COVID-19 pandemic with only temporary shutdowns at the onset of the pandemic, any future disruptions due to operational shutdowns may impact the Company’s ability to operate as well as generate operating cash flow. Based on currently available information and management’s current expectations, the Company anticipates that it has sufficient cash on hand and sufficient access to capital to continue to fund operations for the foreseeable future. However, the continuing impact of COVID-19 and ~~the COVID-19~~its associated containment measures cannot be predicted with certainty and may increase our borrowing costs and other costs of capital and otherwise adversely affect our business, results of operations, financial condition and liquidity, and we cannot assure that we will have access to external financing at times and on terms we consider acceptable, or at all, or that we will not experience other liquidity issues going forward.

Investing Activities

Cash flows used in investing activities for the first ~~six~~nine months of 2020 increased ~~$116.0~~by $33.0 million to ~~$140.4~~$155.6 million compared to the same period in 2019, primarily due to ~~$120.8 million spent on~~ the acquisition of Flow MD and higher capital expenditures in 2020.

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Cash flows from operations were more than adequate to fund capital expenditures of ~~$21.1~~$39.4 million and ~~$25.7~~$36.8 million in the first ~~six~~nine months of 2020 and 2019, respectively. The COVID-19 pandemic has impacted and may continue to impact the Company’s operating cash flows, which may lead to ~~a reduction~~reductions in capital expenditures. The Company believes it has sufficient operating cash flow to continue to meet current obligations and invest in ~~required currently~~ planned capital expenditures. Capital expenditures ~~were~~are generally expenditures for machinery and equipment that ~~supported~~support growth, improved productivity, tooling, business system technology, replacement of equipment and investments in new facilities. Management believes that the Company has ample capacity in its plants and equipment to meet demand increases for future growth in the intermediate term.

Financing Activities

Cash flows ~~provided by~~used in financing activities for the first ~~six~~nine months of 2020 were ~~$2.1~~$20.8 million compared to ~~$118.6~~$192.7 million used in financing activities during the same period in 2019, primarily as a result of proceeds from the issuance of the 3.0% Senior Notes and the repayment of debt assumed in the Velcora acquisition in the third quarter of 2019, partially offset by the early payment of the 4.5% Senior Notes as well as higher share repurchases and dividends paid in 2020.

On April 29, 2020, the Company completed a public offering of $500.0 million in aggregate principal amount of its 3.0% Senior Notes due 2030 (the “3.0% Senior Notes”). The net proceeds from the offering were approximately ~~$494.9~~$494.4 million, after deducting the issuance discount of $0.9 million, the underwriting commission of $3.3 million and offering expenses of ~~$0.9~~$1.4 million. The net proceeds were used to redeem and repay the $300.0 million aggregate principal amount outstanding of its 4.5% Senior Notes due December 15, 2020 and the related accrued interest and make-whole premium, with the balance used for general corporate purposes. The 3.0% Senior Notes bear interest at a rate of 3.0% per annum, which is payable semi-annually in arrears on May 1 and November 1 of each year. The 3.0% Senior Notes mature on May 1, 2030.

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Senior Notes. In addition, the Company recognized the remaining $1.4 million of the pre-tax amount included in Accumulated other comprehensive income (loss) in shareholders’ equity related to the interest rate exchange agreement associated with the 4.5% Senior Notes as well as the remaining $0.1 million of deferred issuance costs and $0.1 million of the debt issuance discount associated with the 4.5% Senior Notes for a total loss on early debt redemption of $8.4 million which was recorded within Other (income) expense - net in the Condensed Consolidated Statements of Operations.

On May 31, 2019, 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 consists of a revolving credit facility (the “Revolving Facility”), which is an $800.0 million unsecured, multi-currency bank credit facility maturing on May 31, 2024. The Credit Agreement replaced the Company’s prior five-year, $700 million credit agreement, dated as of June 23, 2015, which was due to expire in June 2020. At ~~June~~September 30, 2020, there was no balance outstanding under the Revolving Facility and ~~$7.1~~$7.0 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility of ~~$792.9~~$793.0 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 under the Credit Agreement.

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provided that such portion is greater than 5% of the aggregate principal amount of the Notes then outstanding. In the event of a prepayment, the Company will pay an amount equal to par plus accrued interest plus a make-whole amount. In addition, the Company may repurchase the Notes by making an offer to all holders of the Notes, subject to certain conditions.

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 3.00 to 1 and a maximum leverage ratio of 3.50 to 1. In the case of the leverage ratio, there is an option to increase the ratio to 4.00 for 12 months in connection with certain acquisitions. At ~~June~~September 30, 2020, the Company was in compliance with both of these financial covenants, as the Company’s interest coverage ratio was ~~14.64~~14.60 to 1 and the leverage ratio was ~~1.62~~1.7 to 1. There are no financial covenants relating to the 3.0% Senior Notes or the 4.2% Senior Notes; however, both are subject to cross-default provisions.

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~~$300.0~~ $300.0 million on December 1, 2015 and $400.0 million on November 6, 2014. Repurchases under the program will be funded with future cash flow generation or borrowings available under the Revolving Facility. During the ~~six~~nine months ended ~~June~~September 30, 2020, the Company repurchased a total of 876 thousand shares at a cost of $110.3 million. During the ~~six~~nine months ended ~~June~~September 30, 2019, the Company repurchased a total of 389 thousand shares at a cost of $54.7 million. As of ~~June~~September 30, 2020, the amount of share repurchase authorization remaining is $712.0 million.

Although the COVID-19 pandemic has impacted and may continue to impact the Company’s operating cash flows, based on management’s current expectations and currently available information, the Company believes current cash, cash from operations and cash available under the Revolving Facility will be sufficient to meet its operating cash requirements, planned capital expenditures, interest and principal payments on all borrowings, pension and postretirement funding requirements and ~~annual~~quarterly dividend payments to holders of the Company’s common stock for the ~~remainder of 2020.~~foreseeable future. Additionally, in the event that suitable businesses are available for acquisition upon acceptable terms, the Company may obtain all or a portion of the financing for these acquisitions through the incurrence of additional borrowings. At ~~June~~September 30, 2020, there was no balance outstanding under the Revolving Facility and ~~$7.1~~$7.0 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility of ~~$792.9~~$793.0 million. The Company believes that additional borrowings through various financing alternatives remain available if required. However, the continuing impact of COVID-19 and ~~the COVID-19~~its associated containment measures cannot be predicted with certainty and may increase our borrowing costs and other costs of capital and otherwise adversely affect our business, results of operations, financial condition and liquidity, and we cannot assure that we will have access to external financing at times and on terms we consider acceptable, or at all, or that we will not experience other liquidity issues going forward.

Non-GAAP Disclosures

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

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EBITDA means earnings before interest, income taxes, depreciation and amortization. Given the acquisitive nature of the Company, which results in a higher level of amortization expense from recently acquired businesses, management uses EBITDA as an internal operating metric to provide another representation of the businesses’ performance across our three segments and for enterprise valuation purposes. 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 that EBITDA margin is useful for the same reason as EBITDA. EBITDA is also used to calculate certain financial covenants, as discussed in Note 11 in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, “Financial Statements.”

This report references organic sales, a non-GAAP measure, that refers to sales from continuing operations calculated according to U.S. GAAP but excludes (1) the impact of foreign currency translation and (2) sales from acquired or divested businesses during the first ~~twelve~~12 months of ownership or divestiture. The portion of sales attributable to foreign currency translation is calculated as the difference between (a) the period-to-period change in organic sales and (b) the period-to-period change in organic sales after applying prior period foreign exchange rates to the current year period. Management believes that reporting organic sales provides useful information to investors by helping to 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~~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 gross profit, Adjusted operating income, Adjusted net income, Adjusted EPS and Adjusted EBITDA 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, a fair value inventory step-up charge and a loss on early debt redemption. Management also supplements its U.S. GAAP financial statements with adjusted information to provide investors with greater

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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.


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

		Three Months Ended June 30, 2020															Three Months Ended September 30, 2020
		FMT		HST		FSDP		IDEX			FMT		HST		FSDP		IDEX
Change in net sales	Change in net sales	(11)	%	(7)	%	(23)	%	(13)	%	Change in net sales	(8)	%	(4)	%	(9)	%	(7)	%
- Impact from acquisitions/divestitures	- Impact from acquisitions/divestitures	10	%	4	%	—	%	5	%	- Impact from acquisitions/divestitures	8	%	1	%	—	%	4	%
- Impact from foreign currency	- Impact from foreign currency	(1)	%	(1)	%	(1)	%	(1)	%	- Impact from foreign currency	1	%	1	%	1	%	1	%
Change in organic net sales	Change in organic net sales	(20)	%	(10)	%	(22)	%	(17)	%	Change in organic net sales	(17)	%	(6)	%	(10)	%	(12)	%

Six Months Ended June 30, 2020
FMT HST FSDP IDEX
Change in net sales (9) % (4) % (15) % (9) %
- Impact from acquisitions/divestitures 5 % 4 % — % 3 %
- Impact from foreign currency (1) % (1) % (1) % (1) %
Change in organic net sales (13) % (7) % (14) % (11) %

2. Reconciliations of Reported-to-Adjusted Gross Profit and Margin
(dollars in thousands) Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Gross profit $ 234,800 $ 292,337 $ 506,756 $ 576,171
+ Fair value inventory step-up charge 4,107 — 4,107 —
Adjusted gross profit $ 238,907 $ 292,337 $ 510,863 $ 576,171
Net Sales $ 561,249 $ 642,099 $ 1,155,711 $ 1,264,330
Gross profit margin 41.8 % 45.5 % 43.8 % 45.6 %
Adjusted gross profit margin 42.6 % 45.5 % 44.2 % 45.6 %




	Nine Months Ended September 30, 2020
	FMT		HST		FSDP		IDEX
Change in net sales	(9)	%	(4)	%	(13)	%	(8)	%
- Impact from acquisitions/divestitures	6	%	3	%	—	%	3	%
- Impact from foreign currency	—	%	—	%	—	%	—	%
Change in organic net sales	(15)	%	(7)	%	(13)	%	(11)	%

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3. Reconciliations of Reported-to-Adjusted Operating Income and Margin
(dollars in thousands) Three Months Ended June 30, 2020
FMT HST FSDP Corporate IDEX
Reported operating income (loss) $ 50,938 $ 48,007 $ 28,837 $ (17,188) $ 110,594
+ Restructuring expenses 1,848 1,184 641 168 3,841
+ Fair value inventory step-up charge 4,107 — — — 4,107
Adjusted operating income (loss) $ 56,893 $ 49,191 $ 29,478 $ (17,020) $ 118,542
Net sales (eliminations) $ 219,112 $ 215,668 $ 127,076 $ (607) $ 561,249
Operating margin 23.2 % 22.3 % 22.7 % n/m 19.7 %
Adjusted operating margin 26.0 % 22.8 % 23.2 % n/m 21.1 %


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

(dollars in thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Gross profit	$	251,500		$	281,978		$	758,256		$	858,149
+ Fair value inventory step-up charge	—			3,340			4,107			3,340
Adjusted gross profit	$	251,500		$	285,318		$	762,363		$	861,489

Net sales	$	581,113		$	624,246		$	1,736,824		$	1,888,576

Gross profit margin	43.3		%	45.2		%	43.7		%	45.4		%
Adjusted gross profit margin	43.3		%	45.7		%	43.9		%	45.6		%

Three Months Ended June 30, 2019
FMT HST FSDP Corporate IDEX
Reported operating income (loss) $ 74,146 $ 56,763 $ 43,614 $ (19,240) $ 155,283
+ Restructuring expenses 930 330 819 47 2,126
Adjusted operating income (loss) $ 75,076 $ 57,093 $ 44,433 $ (19,193) $ 157,409
Net sales (eliminations) $ 246,189 $ 232,253 $ 164,043 $ (386) $ 642,099
Operating margin 30.1 % 24.4 % 26.6 % n/m 24.2 %
Adjusted operating margin 30.5 % 24.6 % 27.1 % n/m 24.5 %



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

(dollars in thousands)	Three Months Ended September 30, 2020
	FMT			HST			FSDP			Corporate		IDEX
Reported operating income (loss)	$	58,402		$	49,912		$	37,103		$	(14,204)	$	131,213
+ Restructuring expenses	585			978			1,249			105		2,917

+ Fair value inventory step-up charge	—			—			—			—		—
Adjusted operating income (loss)	$	58,987		$	50,890		$	38,352		$	(14,099)	$	134,130

Net sales (eliminations)	$	220,747		$	220,378		$	140,896		$	(908)	$	581,113

Operating margin	26.5		%	22.6		%	26.3		%	n/m		22.6		%
Adjusted operating margin	26.7		%	23.1		%	27.2		%	n/m		23.1		%



	Three Months Ended September 30, 2019
	FMT			HST			FSDP			Corporate		IDEX
Reported operating income (loss)	$	77,481		$	40,170		$	41,967		$	(17,853)	$	141,765
+ Restructuring expenses	—			11,196			104			656		11,956
+ Fair value inventory step-up charge	—			3,340			—			—		3,340
Adjusted operating income (loss)	$	77,481		$	54,706		$	42,071		$	(17,197)	$	157,061

Net sales (eliminations)	$	240,861		$	229,610		$	154,543		$	(768)	$	624,246

Operating margin	32.2		%	17.5		%	27.2		%	n/m		22.7		%
Adjusted operating margin	32.2		%	23.8		%	27.2		%	n/m		25.2		%

Six Months Ended June 30, 2020
FMT HST FSDP Corporate IDEX
Reported operating income (loss) $ 117,709 $ 100,650 $ 66,874 $ (34,698) $ 250,535
+ Restructuring expenses 1,848 1,184 641 168 3,841
+ Fair value inventory step-up charge 4,107 — — — 4,107
Adjusted operating income (loss) $ 123,664 $ 101,834 $ 67,515 $ (34,530) $ 258,483
Net sales (eliminations) $ 445,973 $ 439,727 $ 271,400 $ (1,389) $ 1,155,711
Operating margin 26.4 % 22.9 % 24.6 % n/m 21.7 %
Adjusted operating margin 27.7 % 23.2 % 24.9 % n/m 22.4 %

Six Months Ended June 30, 2019
FMT HST FSDP Corporate IDEX
Reported operating income (loss) $ 146,012 $ 110,917 $ 83,942 $ (37,806) $ 303,065
+ Restructuring expenses 930 330 819 47 2,126
Adjusted operating income (loss) $ 146,942 $ 111,247 $ 84,761 $ (37,759) $ 305,191
Net sales (eliminations) $ 488,711 $ 457,543 $ 320,202 $ (2,126) $ 1,264,330
Operating margin 29.9 % 24.2 % 26.2 % n/m 24.0 %
Adjusted operating margin 30.1 % 24.3 % 26.5 % n/m 24.1 %

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4. Reconciliations of Reported-to-Adjusted Net Income and EPS
(in thousands, except EPS) Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Reported net income $ 70,864 $ 113,209 $ 172,862 $ 223,477
+ Restructuring expenses 3,841 2,126 3,841 2,126
+ Tax impact on restructuring expenses (837) (560) (837) (560)
+ Fair value inventory step-up charge 4,107 — 4,107 —
+ Tax impact on fair value inventory step-up charge (932) — (932) —
+ Loss on early debt redemption 8,421 — 8,421 —
+ Tax impact on loss on early debt redemption (1,912) — (1,912) —
Adjusted net income $ 83,552 $ 114,775 $ 185,550 $ 225,043

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Reported EPS $ 0.93 $ 1.48 $ 2.27 $ 2.92
+ Restructuring expenses 0.05 0.03 0.05 0.03
+ Tax impact on restructuring expenses (0.01) (0.01) (0.01) (0.01)
+ Fair value inventory step-up charge 0.05 — 0.05 —
+ Tax impact on fair value inventory step-up charge (0.01) — (0.01) —
+ Loss on early debt redemption 0.11 — 0.11 —
+ Tax impact on loss on early debt redemption (0.02) — (0.02) —
Adjusted EPS $ 1.10 $ 1.50 $ 2.44 2.44 $ 2.94
Diluted weighted average shares 75,937 76,387 76,198 76,334

5. Reconciliations of EBITDA to Net Income
(dollars in thousands) Three Months Ended June 30, 2020
FMT HST FSDP Corporate IDEX
Operating income (loss) $ 50,938 $ 48,007 $ 28,837 $ (17,188) $ 110,594
- Other (income) expense - net (82) 472 123 5,947 6,460
+ Depreciation and amortization 6,809 9,917 3,796 104 20,626
EBITDA 57,829 57,452 32,510 (23,031) 124,760
- Interest expense 12,439
- Provision for income taxes 20,831
- Depreciation and amortization 20,626
Net income $ 70,864
Net sales (eliminations) $ 219,112 $ 215,668 $ 127,076 $ (607) $ 561,249
Operating margin 23.2 % 22.3 % 22.7 % n/m 19.7 %
EBITDA margin 26.4 % 26.6 % 25.6 % n/m 22.2 %

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Three Months Ended June 30, 2019
FMT HST FSDP Corporate IDEX
Operating income (loss) $ 74,146 $ 56,763 $ 43,614 $ (19,240) $ 155,283
- Other (income) expense - net 239 80 (140) (557) (378)
+ Depreciation and amortization 5,640 9,635 3,717 172 19,164
EBITDA 79,547 66,318 47,471 (18,511) 174,825
- Interest expense 11,011
- Provision for income taxes 31,441
- Depreciation and amortization 19,164
Net income $ 113,209
Net sales (eliminations) $ 246,189 $ 232,253 $ 164,043 $ (386) $ 642,099
Operating margin 30.1 % 24.4 % 26.6 % n/m 24.2 %
EBITDA margin 32.3 % 28.6 % 28.9 % n/m 27.2 %



	Nine Months Ended September 30, 2020
	FMT			HST			FSDP			Corporate		IDEX
Reported operating income (loss)	$	176,111		$	150,562		$	103,977		$	(48,902)	$	381,748
+ Restructuring expenses	2,433			2,162			1,890			273		6,758

+ Fair value inventory step-up charge	4,107			—			—			—		4,107
Adjusted operating income (loss)	$	182,651		$	152,724		$	105,867		$	(48,629)	$	392,613

Net sales (eliminations)	$	666,720		$	660,105		$	412,296		$	(2,297)	$	1,736,824

Operating margin	26.4		%	22.8		%	25.2		%	n/m		22.0		%
Adjusted operating margin	27.4		%	23.1		%	25.7		%	n/m		22.6		%

Six Months Ended June 30, 2020
FMT HST FSDP Corporate IDEX
Operating income (loss) $ 117,709 $ 100,650 $ 66,874 $ (34,698) $ 250,535
- Other (income) expense - net 684 (59) (192) 7,592 8,025
+ Depreciation and amortization 12,207 20,576 7,555 285 40,623
EBITDA 129,232 121,285 74,621 (42,005) 283,133
- Interest expense 23,316
- Provision for income taxes 46,332
- Depreciation and amortization 40,623
Net income $ 172,862
Net sales (eliminations) $ 445,973 $ 439,727 $ 271,400 $ (1,389) $ 1,155,711
Operating margin 26.4 % 22.9 % 24.6 % n/m 21.7 %
EBITDA margin 29.0 % 27.6 % 27.5 % n/m 24.5 %



	Nine Months Ended September 30, 2019
	FMT			HST			FSDP			Corporate		IDEX
Reported operating income (loss)	$	223,493		$	151,087		$	125,909		$	(55,659)	$	444,830
+ Restructuring expenses	930			11,526			923			703		14,082
+ Fair value inventory step-up charge	—			3,340			—			—		3,340
Adjusted operating income (loss)	$	224,423		$	165,953		$	126,832		$	(54,956)	$	462,252

Net sales (eliminations)	$	729,572		$	687,153		$	474,745		$	(2,894)	$	1,888,576

Operating margin	30.6		%	22.0		%	26.5		%	n/m		23.6		%
Adjusted operating margin	30.8		%	24.2		%	26.7		%	n/m		24.5		%

Six Months Ended June 30, 2019
FMT HST FSDP Corporate IDEX
Operating income (loss) $ 146,012 $ 110,917 $ 83,942 $ (37,806) $ 303,065
- Other (income) expense - net 317 364 365 (1,564) (518)
+ Depreciation and amortization 11,146 19,142 7,179 356 37,823
EBITDA 156,841 129,695 90,756 (35,886) 341,406
- Interest expense 21,932
- Provision for income taxes 58,174
- Depreciation and amortization 37,823
Net income $ 223,477
Net sales (eliminations) $ 488,711 $ 457,543 $ 320,202 $ (2,126) $ 1,264,330
Operating margin 29.9 % 24.2 % 26.2 % n/m 24.0 %
EBITDA margin 32.1 % 28.3 % 28.3 % n/m 27.0 %



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

(in thousands, except EPS)	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Reported net income	$	103,848	$	105,194	$	276,710	$	328,671
+ Restructuring expenses	2,917		11,956		6,758		14,082
+ Tax impact on restructuring expenses	(703)		(2,776)		(1,540)		(3,336)
+ Fair value inventory step-up charge	—		3,340		4,107		3,340
+ Tax impact on fair value inventory step-up charge	—		(735)		(932)		(735)
+ Loss on early debt redemption	—		—		8,421		—
+ Tax impact on loss on early debt redemption	—		—		(1,912)		—
Adjusted net income	$	106,062	$	116,979	$	291,612	$	342,022

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6. Reconciliations of EBITDA to Adjusted EBITDA
(dollars in thousands) Three Months Ended June 30, 2020
FMT HST FSDP Corporate IDEX
EBITDA⁽¹⁾
$ 57,829 $ 57,452 $ 32,510 $ (23,031) $ 124,760
+ Restructuring expenses 1,848 1,184 641 168 3,841
+ Fair value inventory step-up charge 4,107 — — — 4,107
+ Loss on early debt redemption — — — 8,421 8,421
Adjusted EBITDA $ 63,784 $ 58,636 $ 33,151 $ (14,442) $ 141,129
Adjusted EBITDA margin 29.1 % 27.2 % 26.1 % n/m 25.1 %




	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020			2019
Reported EPS	$	1.37	$	1.37	$	3.64		$	4.30
+ Restructuring expenses	0.04		0.16		0.09			0.18
+ Tax impact on restructuring expenses	(0.01)		(0.04)		(0.02)			(0.04)
+ Fair value inventory step-up charge	—		0.04		0.05			0.04
+ Tax impact on fair value inventory step-up charge	—		(0.01)		(0.01)			(0.01)
+ Loss on early debt redemption	—		—		0.11			—
+ Tax impact on loss on early debt redemption	—		—		(0.02)			—
Adjusted EPS	$	1.40	$	1.52	$	3.84	3.84	$	4.47

Diluted weighted average shares	75,960		76,577		76,119			76,415

Three Months Ended June 30, 2019
FMT HST FSDP Corporate IDEX
EBITDA⁽¹⁾
$ 79,547 $ 66,318 $ 47,471 $ (18,511) $ 174,825
+ Restructuring expenses 930 330 819 47 2,126
Adjusted EBITDA $ 80,477 $ 66,648 $ 48,290 $ (18,464) $ 176,951
Adjusted EBITDA margin 32.7 % 28.7 % 29.4 % n/m 27.6 %



5. Reconciliations of EBITDA to Net Income

(dollars in thousands)	Three Months Ended September 30, 2020
	FMT			HST			FSDP			Corporate		IDEX
Operating income (loss)	$	58,402		$	49,912		$	37,103		$	(14,204)	$	131,213
- Other (income) expense - net	(719)			(32)			340			(293)		(704)
+ Depreciation and amortization	7,163			10,230			3,854			104		21,351
EBITDA	66,284			60,174			40,617			(13,807)		153,268
- Interest expense												10,642
- Provision for income taxes												17,427
- Depreciation and amortization												21,351
Net income												$	103,848

Net sales (eliminations)	$	220,747		$	220,378		$	140,896		$	(908)	$	581,113
Operating margin	26.5		%	22.6		%	26.3		%	n/m		22.6		%
EBITDA margin	30.0		%	27.3		%	28.8		%	n/m		26.4		%

Six Months Ended June 30, 2020
FMT HST FSDP Corporate IDEX
EBITDA⁽¹⁾
$ 129,232 $ 121,285 $ 74,621 $ (42,005) $ 283,133
+ Restructuring expenses 1,848 1,184 641 168 3,841
+ Fair value inventory step-up charge 4,107 — — — 4,107
+ Loss on early debt redemption — — — 8,421 8,421
Adjusted EBITDA $ 135,187 $ 122,469 $ 75,262 $ (33,416) $ 299,502
Adjusted EBITDA margin 30.3 % 27.9 % 27.7 % n/m 25.9 %



	Three Months Ended September 30, 2019
	FMT			HST			FSDP			Corporate		IDEX
Operating income (loss)	$	77,481		$	40,170		$	41,967		$	(17,853)	$	141,765
- Other (income) expense - net	295			1,272			(92)			(256)		1,219
+ Depreciation and amortization	5,507			10,296			3,566			154		19,523
EBITDA	82,693			49,194			45,625			(17,443)		160,069
- Interest expense												11,330
- Provision for income taxes												24,022
- Depreciation and amortization												19,523
Net income												$	105,194

Net sales (eliminations)	$	240,861		$	229,610		$	154,543		$	(768)	$	624,246
Operating margin	32.2		%	17.5		%	27.2		%	n/m		22.7		%
EBITDA margin	34.3		%	21.4		%	29.5		%	n/m		25.6		%

Six Months Ended June 30, 2019
FMT HST FSDP Corporate IDEX
EBITDA⁽¹⁾
$ 156,841 $ 129,695 $ 90,756 $ (35,886) $ 341,406
+ Restructuring expenses 930 330 819 47 2,126
Adjusted EBITDA $ 157,771 $ 130,025 $ 91,575 $ (35,839) $ 343,532
Adjusted EBITDA margin 32.3 % 28.4 % 28.6 % n/m 27.2 %

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	Nine Months Ended September 30, 2020
	FMT			HST			FSDP			Corporate		IDEX
Operating income (loss)	$	176,111		$	150,562		$	103,977		$	(48,902)	$	381,748
- Other (income) expense - net	(35)			(91)			148			7,299		7,321
+ Depreciation and amortization	19,370			30,806			11,409			389		61,974
EBITDA	195,516			181,459			115,238			(55,812)		436,401
- Interest expense												33,958
- Provision for income taxes												63,759
- Depreciation and amortization												61,974
Net income												$	276,710

Net sales (eliminations)	$	666,720		$	660,105		$	412,296		$	(2,297)	$	1,736,824
Operating margin	26.4		%	22.8		%	25.2		%	n/m		22.0		%
EBITDA margin	29.3		%	27.5		%	28.0		%	n/m		25.1		%


	Nine Months Ended September 30, 2019
	FMT			HST			FSDP			Corporate		IDEX
Operating income (loss)	$	223,493		$	151,087		$	125,909		$	(55,659)	$	444,830
- Other (income) expense - net	612			1,636			273			(1,820)		701
+ Depreciation and amortization	16,653			29,438			10,745			510		57,346
EBITDA	239,534			178,889			136,381			(53,329)		501,475
- Interest expense												33,262
- Provision for income taxes												82,196
- Depreciation and amortization												57,346
Net income												$	328,671

Net sales (eliminations)	$	729,572		$	687,153		$	474,745		$	(2,894)	$	1,888,576
Operating margin	30.6		%	22.0		%	26.5		%	n/m		23.6		%
EBITDA margin	32.8		%	26.0		%	28.7		%	n/m		26.6		%



6. Reconciliations of EBITDA to Adjusted EBITDA

(dollars in thousands)	Three Months Ended September 30, 2020
	FMT			HST			FSDP			Corporate		IDEX
EBITDA(1)	$	66,284		$	60,174		$	40,617		$	(13,807)	$	153,268
+ Restructuring expenses	585			978			1,249			105		2,917
+ Fair value inventory step-up charge	—			—			—			—		—

Adjusted EBITDA	$	66,869		$	61,152		$	41,866		$	(13,702)	$	156,185

Adjusted EBITDA margin	30.3		%	27.7		%	29.7		%	n/m		26.9		%

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	Three Months Ended September 30, 2019
	FMT			HST			FSDP			Corporate		IDEX
EBITDA(1)	$	82,693		$	49,194		$	45,625		$	(17,443)	$	160,069
+ Restructuring expenses	—			11,196			104			656		11,956
+ Fair value inventory step-up charge	—			3,340			—			—		3,340
Adjusted EBITDA	$	82,693		$	63,730		$	45,729		$	(16,787)	$	175,365

Adjusted EBITDA margin	34.3		%	27.8		%	29.6		%	n/m		28.1		%




	Nine Months Ended September 30, 2020
	FMT			HST			FSDP			Corporate		IDEX
EBITDA(1)	$	195,516		$	181,459		$	115,238		$	(55,812)	$	436,401
+ Restructuring expenses	2,433			2,162			1,890			273		6,758
+ Fair value inventory step-up charge	4,107			—			—			—		4,107
+ Loss on early debt redemption	—			—			—			8,421		8,421
Adjusted EBITDA	$	202,056		$	183,621		$	117,128		$	(47,118)	$	455,687

Adjusted EBITDA margin	30.3		%	27.8		%	28.4		%	n/m		26.2		%



	Nine Months Ended September 30, 2019
	FMT			HST			FSDP			Corporate		IDEX
EBITDA(1)	$	239,534		$	178,889		$	136,381		$	(53,329)	$	501,475
+ Restructuring expenses	930			11,526			923			703		14,082
+ Fair value inventory step-up charge	—			3,340			—			—		3,340
Adjusted EBITDA	$	240,464		$	193,755		$	137,304		$	(52,626)	$	518,897

Adjusted EBITDA margin	33.0		%	28.2		%	28.9		%	n/m		27.5		%

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


7. Reconciliations of Cash Flows from Operating Activities to Free Cash Flow	7. Reconciliations of Cash Flows from Operating Activities to Free Cash Flow													7. Reconciliations of Cash Flows from Operating Activities to Free Cash Flow

(dollars in thousands)	(dollars in thousands)	Three Months Ended June 30,						Six Months Ended June 30,							(dollars in thousands)	Three Months Ended September 30,					Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019				2020		2019
Cash flows from operating activities	Cash flows from operating activities	$	169,453	$	131,175	$	254,213	$	219,838	Cash flows from operating activities	$	153,686	$	157,064			$	407,899	$	376,902
- Capital expenditures	- Capital expenditures	8,323		12,867		21,085		25,742		- Capital expenditures	18,353		11,031				39,438		36,773
Free cash flow	Free cash flow	$	161,130	$	118,308	$	233,128	$	194,096	Free cash flow	$	135,333	$	146,033			$	368,461	$	340,129

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Critical Accounting Policies

As discussed in the Annual Report on Form 10-K for the year ended December 31, 2019, the preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. See Part 1, Notes to the Condensed Consolidated Financial Statements, Note 1 Basis of Presentation and Significant Accounting Policies. There have been no changes to the Company’s critical accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2019.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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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, describes the procedures and controls over derivative financial and commodity instruments, including foreign currency forward contracts and interest rate swaps. Under the policy, the Company does not use financial or commodity derivative instruments for trading purposes, and the use of these instruments is subject to strict approvals by senior officers. Typically, the use of derivative instruments is limited to foreign currency forward contracts and interest rate swaps on the Company’s outstanding long-term debt. As of ~~June~~September 30, 2020, the Company did not have any derivative instruments outstanding.

Foreign Currency Exchange Rates

The Company’s foreign currency exchange rate risk is limited principally to the Euro, Swiss Franc, British Pound, Canadian Dollar, Indian Rupee, Chinese Renminbi and Swedish Krona. The Company manages its foreign exchange risk principally through invoicing customers in the same currency as the source of products. The effect of transaction gains and losses is reported within Other (income) expense-net in the Condensed Consolidated Statements of Operations.

Interest Rate Fluctuation

The Company does not have significant interest rate exposure due to all of the ~~$1,044.7~~$1,044.3 million of debt outstanding as of ~~June~~September 30, 2020 being 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 SEC Rule 13a-15(b), the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded, as of ~~June~~September 30, 2020, 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 control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company and its subsidiaries are party to legal proceedings as described in Note 20 in Part I, Item 1, “Legal Proceedings,” and such disclosure is incorporated by reference into this Item 1, “Legal Proceedings.” In addition, 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 and the United Kingdom. Most of the claims resolved to date have been dismissed without payment. The balance of the claims have been settled for various immaterial amounts. Only one case has been tried, resulting in a verdict for the Company’s business unit. No provision has been made in the financial statements of the Company, other than for insurance deductibles in the ordinary course, and the Company does not currently believe the asbestos-related claims will have a material adverse effect on the Company’s business, financial position, results of operations or cash flows.

Item 1A. Risk Factors

In light of current global economic events and conditions experienced during the ~~six~~nine months ended ~~June~~September 30, 2020, the following factors are present risks to the Company. Aside from these risk factors, there have been no changes to the Company’s risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2019 that have a material impact on our condensed consolidated financial statements.

Our business, results of operations and financial condition have been and may continue to be materially adversely impacted by the recent coronavirus (COVID-19) ~~outbreak.~~pandemic.

The ~~outbreak of the~~ novel coronavirus (COVID-19) ~~has been~~pandemic is a ~~rapidly developing~~rapidly-changing situation ~~around the globe~~ that has negatively impacted and could continue to negatively impact the global economy. Our operating results are subject to fluctuations based on general economic conditions and have been adversely affected by the ~~worsening~~negative general economic conditions. The extent to which COVID-19 continues to impact our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak and business closures or business disruptions for our Company, our suppliers and our customers.

~~Continuing~~The deterioration in economic conditions ~~has~~ materially reduced, and could continue to reduce, the Company’s sales and profitability. ~~Any bankruptcy or~~The financial distress of our customers have experienced due to the deterioration in economic conditions has resulted in and could continue to result in reduced sales and decreased collectability of accounts receivable which ~~would~~has and could continue to negatively impact our results of operations. Based on currently available information and management’s current expectations, we believe the Company’s organic sales will be down approximately 123 to 175 percent in the ~~third~~fourth quarter of 2020. ~~The~~Any changes in or resurgence of the COVID-19 outbreak could also have a material impact on our ability to get the raw materials, parts and components we need to manufacture our products as our suppliers face disruptions in their businesses, closures or bankruptcy as a result of the COVID-19 outbreak. We depend greatly on our suppliers for items that are essential to the manufacturing of our products. Although we have not experienced material supply chain disruptions to date, if our suppliers fail to meet our manufacturing needs in the future, it would delay our production and our product shipments to customers and negatively affect our operations.

U.S and international government responses to the COVID-19 outbreak have included “shelter in place”, “stay at home” and similar types of orders. These orders exempt certain individuals needed to maintain continuity of operations of critical infrastructure sectors as determined by the U.S. federal ~~government.~~and international governmental bodies. Although the Company’s operations are currently considered essential and exempt ~~the~~(and in some regions government lockdown mandates ~~forced us to temporarily close some facilities, although these facilities~~ have ~~since reopened. If~~been lifted), if any of the applicable exemptions are curtailed or revoked in the future, including in response to any COVID-19 resurgence, that would adversely impact our business, operating results and financial condition. Furthermore, to the extent these exemptions do not extend to our key suppliers and customers, this would also adversely impact our business, operating results and financial condition. We have also implemented work-from-home policies for certain “non-essential” ~~employees, which~~employees. Although these work-from-home policies have not negatively impacted our business in any material respect to date, the COVID-19

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outbreak is dynamic and any future resurgences could negatively impact productivity, disrupt conduct of our business in the ordinary course and delay our production timelines.

Due to the large remote workforce populations, we may also face informational technology infrastructure and connectivity issues from the vendors that we rely on for certain information technologies to administer, store and support the

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Company’s multiple business activities. IDEX is heavily dependent on the availability and support of our technology landscape, several of which are provided by external third party service providers (e.g., Microsoft, AT&T and Verizon). Although we have not suffered any disruptions to date, any future disruptions in their operations could also negatively impact our business, operating results and financial condition.

To the extent the COVID-19 outbreak continues to adversely affect our business and financial results, it may also have the effect of heightening many of the other risks described in the risk factors included in the Annual Report on Form 10-K for the year ended December 31, 2019, such as those relating to our international operations, our ability to develop new products, our ability to execute on our growth strategy of acquisitions, our dependency on raw materials, parts and components, the effects on movements in foreign currency exchange rates on our ~~company,~~Company, the effects on our ~~company~~Company that result from declines in commodity prices and our reliance on labor availability to operate and grow our business.

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 ~~June~~September 30, 2020:

Period Total Number of
Shares Purchased Average Price
Paid per Share
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs⁽¹⁾
Approximate Dollar
Value that May Yet
be Purchased
Under the Plans
or Programs⁽¹⁾
April 1, 2020 to April 30, 2020 — $ — — $ 713,435,602
May 1, 2020 to May 31, 2020 — — — 713,435,602
June 1, 2020 to June 30, 2020 9,600 149.44 9,600 712,001,005
Total 9,600 $ 149.44 9,600 $ 712,001,005


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Approximate Dollar Value that May Yet be Purchased Under the Plans or Programs(1)
July 1, 2020 to July 31, 2020	—	$	—	—	$	712,001,005
August 1, 2020 to August 31, 2020	—	—		—	712,001,005
September 1, 2020 to September 30, 2020	—	—		—	712,001,005
Total	—	$	—	—	$	712,001,005

(1)On March 17, 2020, the Company’s Board of Directors approved an increase of $500.0 million in the authorized level of repurchases of common stock. This approval is in addition to the prior repurchase authorizations of the Board of Directors of $300.0 million on December 1, 2015 and $400.0 million on November 6, 2014. These authorizations have no expiration date.

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Item 6. Exhibits.

Exhibit
Number

Description

~~4.1~~

Third Supplemental Indenture, dated as of April 29, 2020, between the Company and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit No. 4.2 to the Current Report of IDEX Corporation on Form 8-K filed April 29, 2020, Commission File No. 1-10235).

~~4.2~~

~~Form of 3.0% Senior Note due 2030 (included as Exhibit A in Exhibit 4.1 hereto).~~

*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 ~~June~~September 30, 2020 formatted in Inline eXtensible Business Reporting Language (iXBRL) includes: (i) the Cover Page, (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Operations, (iv) the Condensed Consolidated Statements of Comprehensive Income, (v) the Condensed Consolidated Statements of Shareholders’ Equity, (vi) the Condensed Consolidated Statements of Cash Flows, and (vii) Notes to the Condensed Consolidated Financial Statements.

*104

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

* Filed herewith

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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 and Chief Accounting Officer (Principal Accounting Officer)

Date: ~~July 24,~~October 28, 2020

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