Item 6. Selected Financial Data.(1)

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Item 6. Selected Financial Data.(1)



(Dollars in thousands, except per share data)	2016			2015			2014			2013			2012
RESULTS OF OPERATIONS
Net sales	$	2,113,043		$	2,020,668		$	2,147,767		$	2,024,130		$	1,954,258
Gross profit	930,767			904,315			949,315			873,364			803,700
Selling, general and administrative expenses	498,994			479,408			504,419			477,851			444,490
Loss (gain) on sale of businesses - net	22,298			(18,070		)	—			—			—
Restructuring expenses	3,674			11,239			13,672			—			32,473
Asset impairments	—			—			—			—			198,519
Operating income	405,801			431,738			431,224			395,513			128,218
Other (income) expense - net	(8,327		)	(2,243		)	(3,111		)	178			(236		)
Interest expense	45,616			41,636			41,895			42,206			42,250
Provision for income taxes	97,403			109,538			113,054			97,914			48,574
Net income	271,109			282,807			279,386			255,215			37,630
Earnings per share (2)
— basic	$	3.57		$	3.65		$	3.48		$	3.11		$	0.45
— diluted	$	3.53		$	3.62		$	3.45		$	3.09		$	0.45
Weighted average shares outstanding
— basic	75,803			77,126			79,715			81,517			82,689
— diluted	76,758			77,972			80,728			82,489			83,641
Year-end shares outstanding	76,441			76,535			78,766			81,196			82,727
Cash dividends per share	$	1.36		$	1.28		$	1.12		$	0.89		$	0.80
FINANCIAL POSITION
Current assets	$	822,721		$	862,684		$	1,075,791		$	990,953		$	881,865
Current liabilities	309,158			309,597			411,968			304,609			291,427
Current ratio	2.7			2.8			2.6			3.3			3.0
Operating working capital (3)	396,739			370,213			366,209			350,881			373,704
Total assets (4)	$	3,154,944		$	2,805,443		$	2,903,463		$	2,881,118		$	2,777,821
Total borrowings (4)	1,015,281			840,794			859,345			767,417			779,007
Shareholders’ equity	1,543,894			1,443,291			1,486,451			1,572,989			1,464,998
PERFORMANCE MEASURES AND OTHER DATA
Percent of net sales:
Gross profit	44.0		%	44.8		%	44.2		%	43.1		%	41.1		%
Selling, general and administrative expenses	23.6		%	23.7		%	23.5		%	23.6		%	22.7		%
Operating income	19.2		%	21.4		%	20.1		%	19.5		%	6.6		%
Income before income taxes	17.4		%	19.4		%	18.3		%	17.4		%	4.4		%
Net income	12.8		%	14.0		%	13.0		%	12.6		%	1.9		%
Capital expenditures	$	38,242		$	43,776		$	47,997		$	31,536		$	35,520
Depreciation and amortization	86,892			78,120			76,907			79,334			78,312
Return on average assets (5)	9.1		%	9.9		%	9.7		%	9.0		%	1.3		%
Borrowings as a percent of capitalization (5)	39.7		%	36.8		%	36.6		%	32.8		%	34.7		%
Return on average shareholders’ equity (5)	18.2		%	19.3		%	18.3		%	16.8		%	2.5		%
Employees at year end	7,158			6,801			6,712			6,787			6,717
Record holders at year end	7,030			6,760			6,500			6,500			6,700
NON-GAAP MEASURES (6)
EBITDA	$	501,020		$	512,101		$	511,242		$	474,669		$	206,766
EBITDA margin	23.7		%	25.3		%	23.8		%	23.5		%	10.6		%
Adjusted EBITDA	$	530,546		$	505,270		$	524,914		$	474,669		$	437,758
Adjusted EBITDA margin	25.1		%	25.0		%	24.4		%	23.5		%	22.4		%
Adjusted operating income	$	435,327		$	424,907		$	444,896		$	395,513		$	359,210
Adjusted operating margin	20.6		%	21.0		%	20.7		%	19.5		%	18.4		%
Adjusted net income	$	288,373		$	277,229		$	288,823		$	255,215		$	224,067
Adjusted earnings per share	$	3.75		$	3.55		$	3.57		$	3.09		$	2.68


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


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


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


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

(4)

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


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

(5)

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


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

(6)

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

Management uses Adjusted operating income, Adjusted net income, 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 gains/losses on the sale of businesses, restructuring expenses, and pension settlements. Management also supplements its U.S. GAAP financial statements with adjusted information to provide investors with greater insight, transparency, and a more comprehensive understanding of the information used by management in its financial and operational decision making.

EBITDA means earnings before interest, income taxes, depreciation and amortization. Given the acquisitive nature of the Company which results in a higher level of amortization expense from recently acquired businesses, management uses EBITDA as an internal operating metric to provide another representation of the businesses’ performance across our three segments and for enterprise valuation purposes. EBITDA is also used to calculate certain financial covenants, as discussed in Note 5 of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data.” In addition, EBITDA has been adjusted for items that are not reflective of ongoing operations, such as gains/losses on the sale of businesses, restructuring expenses, and pension settlements to arrive at Adjusted EBITDA. Management believes that Adjusted EBITDA is useful as a performance indicator of ongoing operations. We believe that Adjusted EBITDA is also useful to some investors as an indicator of the strength and performance of the Company and its segments’ ongoing business operations and a way to evaluate and compare operating performance and value companies within our industry. The definition of Adjusted EBITDA used here may differ from that used by other companies.

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



1. Reconciliations of Consolidated EBITDA

	For the Years Ended December 31,
	2016			2015			2014			2013			2012
	(In thousands)
Net income	$	271,109		$	282,807		$	279,386		$	255,215		$	37,630
+ Provision for income taxes	97,403			109,538			113,054			97,914			48,574
+ Interest expense	45,616			41,636			41,895			42,206			42,250
+ Depreciation and amortization	86,892			78,120			76,907			79,334			78,312
EBITDA	501,020			512,101			511,242			474,669			206,766
+ Restructuring expenses	3,674			11,239			13,672			—			32,473
+ Loss (gain) on sale of businesses - net	22,298			(18,070		)	—			—			—
+ Pension settlement	3,554			—			—			—			—
+ Asset impairments	—			—			—			—			198,519
Adjusted EBITDA	$	530,546		$	505,270		$	524,914		$	474,669		$	437,758

Net sales	$	2,113,043		$	2,020,668		$	2,147,767		$	2,024,130		$	1,954,258
EBITDA margin	23.7		%	25.3		%	23.8		%	23.5		%	10.6		%
Adjusted EBITDA margin	25.1		%	25.0		%	24.4		%	23.5		%	22.4		%



2. Reconciliations of Segment EBITDA

	For the Years Ended December 31,
	2016									2015									2014
	FMT			HST			FSDP			FMT			HST			FSDP			FMT			HST			FSDP
	(In thousands)
EBITDA	$	242,892		$	200,980		$	135,400		$	233,008		$	200,953		$	123,249		$	243,899		$	196,019		$	138,067
+ Restructuring expenses	932			1,117			1,425			7,090			3,408			576			6,413			4,912			1,034
+ Pension settlement	2,032			—			540			—			—			—			—			—			—
Adjusted EBITDA	$	245,856		$	202,097		$	137,365		$	240,098		$	204,361		$	123,825		$	250,312		$	200,931		$	139,101

Net sales	$	849,101		$	744,809		$	520,009		$	860,792		$	738,996		$	423,915		$	899,588		$	752,021		$	502,749
EBITDA margin	28.6		%	27.0		%	26.0		%	27.1		%	27.2		%	29.1		%	27.1		%	26.1		%	27.5		%
Adjusted EBITDA margin	29.0		%	27.1		%	26.4		%	27.9		%	27.7		%	29.2		%	27.8		%	26.7		%	27.7		%



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

	For the Years Ended December 31,
	2016			2015			2014			2013			2012
	(In thousands)
Operating income	$	405,801		$	431,738		$	431,224		$	395,513		$	128,218
+ Restructuring expenses	3,674			11,239			13,672			—			32,473
+ Loss (gain) on sale of businesses - net	22,298			(18,070		)	—			—			—
+ Asset impairments	—			—			—			—			198,519
+ Pension settlement	3,554			—			—			—			—
Adjusted operating income	$	435,327		$	424,907		$	444,896		$	395,513		$	359,210

Net sales	$	2,113,043		$	2,020,668		$	2,147,767		$	2,024,130		$	1,954,258

Operating margin	19.2		%	21.4		%	20.1		%	19.5		%	6.6		%
Adjusted operating margin	20.6		%	21.0		%	20.7		%	19.5		%	18.4		%



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

	For the Years Ended December 31,
	2016									2015									2014
	FMT			HST			FSDP			FMT			HST			FSDP			FMT			HST			FSDP
	(In thousands)
Operating income	$	214,242		$	153,722		$	121,888		$	204,506		$	157,948		$	115,745		$	216,886		$	152,999		$	130,494
+ Restructuring expenses	932			1,117			1,425			7,090			3,408			576			6,413			4,912			1,034
+ Pension settlement	2,032			—			540			—			—			—			—			—			—
Adjusted operating income	$	217,206		$	154,839		$	123,853		$	211,596		$	161,356		$	116,321		$	223,299		$	157,911		$	131,528

Net sales	$	849,101		$	744,809		$	520,009		$	860,792		$	738,996		$	423,915		$	899,588		$	752,021		$	502,749

Operating margin	25.2		%	20.6		%	23.4		%	23.8		%	21.4		%	27.3		%	24.1		%	20.3		%	26.0		%
Adjusted operating margin	25.6		%	20.8		%	23.8		%	24.6		%	21.8		%	27.4		%	24.8		%	21.0		%	26.2		%



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

	For the Years Ended December 31,
	2016			2015			2014			2013		2012
	(In thousands)
Net income	$	271,109		$	282,807		$	279,386		$	255,215	$	37,630
+ Restructuring expenses	3,674			11,239			13,672			—		32,473
+ Tax impact on restructuring expenses	(1,299		)	(3,586		)	(4,235		)	—		(9,547		)
+ Loss (gain) on sale of businesses	22,298			(18,070		)	—			—		—
+ Tax impact on loss (gain) on sale of businesses	(9,706		)	4,839			—			—		—
+ Asset impairments	—			—			—			—		198,519
+Tax impact on asset impairments	—			—			—			—		(35,008		)
+ Pension settlement	3,554			—			—			—		—
+ Tax impact on pension settlement	(1,257		)	—			—			—		—
Adjusted net income	$	288,373		$	277,229		$	288,823		$	255,215	$	224,067

EPS	$	3.53		$	3.62		$	3.45		$	3.09	$	0.45
+ Restructuring expenses	0.05			0.14			0.17			—		0.39
+ Tax impact on restructuring expenses	(0.02		)	(0.04		)	(0.05		)	—		(0.11		)
+ Loss (gain) on sale of businesses	0.29			(0.23		)	—			—		—
+ Tax impact on loss (gain) on sale of businesses	(0.13		)	0.06			—			—		—
+ Asset impairments	—			—			—			—		2.37
+Tax impact on asset impairments	—			—						—		(0.42		)
+ Pension settlement	0.05			—			—			—		—
+ Tax impact on pension settlement	(0.02		)	—			—			—		—
Adjusted EPS	$	3.75		$	3.55		$	3.57		$	3.09	$	2.68

Diluted weighted average shares	76,758			77,972			80,728			82,489		83,641



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

	For the Year Ended December 31, 2016
	FMT			HST			FSDP			Corporate			IDEX
Operating income (loss)	$	214,242		$	153,722		$	121,888		$	(84,051	)	$	405,801
- Other (income) expense - net	(192		)	(1,960		)	(1,556		)	(4,619		)	(8,327		)
+ Depreciation and amortization	28,458			45,298			11,956			1,180			86,892
EBITDA	242,892			200,980			135,400			(78,252		)	501,020
- Interest expense													45,616
- Provision for income taxes													97,403
- Depreciation and amortization													86,892
Net income													$	271,109

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

Operating margin	25.2		%	20.6		%	23.4		%	n/m			19.2		%
EBITDA margin	28.6		%	27.0		%	26.0		%	n/m			23.7		%



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

	For the Year Ended December 31, 2015
	FMT			HST			FSDP			Corporate			IDEX
Operating income (loss)	$	204,506		$	157,948		$	115,745		$	(46,461	)	$	431,738
- Other (income) expense - net	(840		)	(178		)	(1,453		)	228			(2,243		)
+ Depreciation and amortization	27,662			42,827			6,051			1,580			78,120
EBITDA	233,008			200,953			123,249			(45,109		)	512,101
- Interest expense													41,636
- Provision for income taxes													109,538
- Depreciation and amortization													78,120
Net income													$	282,807

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

Operating margin	23.8		%	21.4		%	27.3		%	n/m			21.4		%
EBITDA margin	27.1		%	27.2		%	29.1		%	n/m			25.3		%



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

	For the Year Ended December 31, 2014
	FMT			HST			FSDP			Corporate			IDEX
Operating income (loss)	$	216,886		$	152,999		$	130,494		$	(69,155	)	$	431,224
- Other (income) expense - net	(560		)	(542		)	(990		)	(1,019		)	(3,111		)
+ Depreciation and amortization	26,453			42,478			6,583			1,393			76,907
EBITDA	243,899			196,019			138,067			(66,743		)	511,242
- Interest expense													41,895
- Provision for income taxes													113,054
- Depreciation and amortization													76,907
Net income													$	279,386

Net sales (eliminations)	$	899,588		$	752,021		$	502,749		$	(6,591	)	$	2,147,767

Operating margin	24.1		%	20.3		%	26.0		%	n/m			20.1		%
EBITDA margin	27.1		%	26.1		%	27.5		%	n/m			23.8		%



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

	For the Years Ended December 31,
	2016								2015								2014
	FMT		HST		FSDP		IDEX		FMT		HST		FSDP		IDEX		FMT		HST		FSDP		IDEX
Change in net sales	(1	)%	1	%	23	%	5	%	(4	)%	(2	)%	(16	)%	(6	)%	3	%	5	%	13	%	6	%
- Net impact from acquisitions/divestitures	1	%	3	%	27	%	7	%	2	%	2	%	—	%	2	%	1	%	—	%	—	%	1	%
- Impact from FX	(1	)%	(1	)%	(1	)%	(1	)%	(4	)%	(3	)%	(6	)%	(4	)%	—	%	1	%	—	%	—	%
Change in organic net sales	(1	)%	(1	)%	(3	)%	(1	)%	(2	)%	(1	)%	(10	)%	(4	)%	2	%	4	%	13	%	5	%

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