IDEX (IEX) 10-K risk factor changes: FY2018 vs FY2017

In [removed: 2017, 51%] [added: 2018, 49%] of the Company’s sales were derived from domestic operations while [removed: 49%] [added: 51%] were derived from international operations.

The Company’s largest end markets include [added: industrial,] life sciences and medical technologies, fire and rescue, oil [removed: &] [added: and] gas, paint and coatings, chemical processing, agriculture, water [removed: &] [added: and] wastewater treatment and optical filters and components.

In [removed: 2017,] [added: 2018,] approximately [removed: 49%] [added: 51%] of our total sales were to customers outside the U.S. We expect our international operations and export sales to continue to be significant for the foreseeable future.

| • | changes in tariff and trade [removed: barriers] [added: barriers, including recently imposed tariffs with respect to certain products imported from China or exported to China,] and import or export licensing requirements; and |

Maintaining and improving our competitive position will require continued investment by us in manufacturing, engineering, quality standards, marketing, customer service and [removed: support,] [added: support] and our distribution networks.

Our competitors may develop products that are superior to our [removed: products,] [added: products] or may develop methods of more efficiently and effectively providing products and services or may adapt more quickly than us to new technologies or evolving customer requirements.

We may not be able to compete successfully with our existing competitors or with [added: new competitors.]

We are currently involved in pending and threatened [removed: legal and regulatory proceedings, including asbestos-related litigation and various] legal, regulatory and other proceedings arising in the ordinary course of business.

For additional detail related to this risk, see Item 3, “Legal [removed: Proceedings.”][added: Proceedings” and Note 9 in Part II, Item 8, “Financial Statements and Supplementary Data.”]

At December 31, [removed: 2017,] [added: 2018,] goodwill and intangible assets totaled [removed: $1,704.2] [added: $1,698.0] million and [removed: $414.7] [added: $383.3] million, respectively.

These assets [added: primarily] result from our acquisitions, representing the excess of the purchase price over the fair value of the tangible net assets we have acquired.

[removed: Any determination requiring the write-off of a significant portion of our] goodwill or identifiable intangible assets would adversely impact our results of operations and net worth.

See Note [removed: 4] [added: 5] in Part II, Item 8, “Financial Statements and Supplementary Data” for further discussion on goodwill and intangible assets.

The ability of our customers to finance capital investment and maintenance may also be [added: affected by the conditions in their industries.]

The availability of highly qualified talent is [removed: limited,] [added: limited] and the competition for talent is robust.

If these systems [added: (or the systems of our customers or third-party hosting services)] are damaged, cease to function [removed: properly,] [added: properly] or are subject to cyber-security attacks, such as those involving unauthorized access, malicious software and/or other intrusions, we could experience production downtimes, operational delays, other detrimental impacts on our operations or ability to provide products and services to our customers, the compromising of confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems or networks, financial losses from remedial actions, loss of business or potential liability, [added: penalties, fines] and/or damage to our reputation.

While we attempt to mitigate these risks by employing a number of measures, including employee training, technical security [removed: controls,] [added: controls] and maintenance of backup and protective systems, our systems, networks, products and services remain potentially vulnerable to known or unknown threats, any of which could have a material adverse effect on our business, financial condition or results of operations.

Our internal control policies and procedures may not always protect us from reckless or criminal acts [removed: committed by our employees or third-party intermediaries.]

The changes included in the Tax Act [removed: are] [added: were] broad and complex.

| • | effects of the United Kingdom’s decision to exit the European Union and related potential disruption to trade; |

| | |

| --- | --- |

A failure to continue to develop and deliver new, innovative and competitive products to the market could limit our sales growth and negatively impact our business, financial condition, results of operations and cash flow.

We are also exposed to risks if the U.S. Federal Reserve raises its benchmark interest rate, which may reduce the availability and increase the cost of obtaining new debt and refinancing existing indebtedness.

Any determination requiring the write-off of a significant portion of our

Challenges with Respect to Labor Availability Could Negatively Impact our Ability to Operate or Grow our Business.

Our success depends in part on the ability of our businesses to proactively attract, motivate and retain a qualified and highly skilled workforce in an intensely competitive labor market.

A failure to attract, motivate and retain highly skilled personnel could adversely affect our operating results or our ability to operate or grow our business.

Further, given the unpredictability, nature and scope of cyber-security attacks, it is possible that potential vulnerabilities could go undetected for an extended period.

committed by our employees or third-party intermediaries.

The Company finalized the impact of the reduction in the corporate rate and the deemed repatriation transition tax based upon the Company’s interpretations of the Tax Act.

However, additional guidance issued by the Internal Revenue Service, the U.S. Department of Treasury or any other applicable taxing authority or actions taken by the Company may result in a different impact.

In addition, foreign jurisdictions may enact tax legislation that could significantly affect our ongoing operations.

Aspects of U.S. tax reform could also lead foreign jurisdictions to respond by enacting additional tax legislation that is unfavorable to us.

new competitors.

affected by the conditions in their industries.

While the Company is able to make reasonable estimates of the impact of the reduction in the corporate rate and the deemed repatriation transition tax, the final impact of the Tax Act may differ from these estimates, due to, among other things, changes in the Company’s interpretations and assumptions, additional guidance that may be issued by either the Internal Revenue Service or the U.S. Department of Treasury, and actions the Company may take.

[removed: 2017] [added: 2018] Overview and Outlook

IDEX is an applied solutions company specializing in [added: the manufacture of] fluid and metering technologies, health and science [removed: technologies,] [added: technologies] and fire, safety and other diversified products built to customers’ specifications.

IDEX’s products are sold in niche markets [removed: to] [added: across] a wide range of industries throughout the world.

Within our three reportable segments, the Company maintains [removed: thirteen] [added: 13] platforms, where we focus on organic growth and strategic acquisitions.

Each of our [removed: thirteen] [added: 13] platforms is also a reporting [removed: unit, where] [added: unit that] we annually test [removed: for] goodwill [added: for] impairment.

The Fluid & Metering Technologies segment designs, [removed: produces,] [added: produces] and distributes positive displacement pumps, flow meters, [removed: valves, injectors,] [added: injectors] and other fluid-handling pump modules and systems and provides flow monitoring and other services for the food, chemical, general industrial, water [removed: &] [added: and] wastewater, [removed: agriculture,] [added: agriculture] and energy industries.

The Fluid & Metering Technologies segment contains the Energy platform (comprised of Corken, Liquid Controls, [removed: SAMPI,] [added: SAMPI] and Toptech), the Valves platform (comprised of Alfa Valvole, [removed: Richter,] [added: Richter] and Aegis), the Water platform (comprised of Pulsafeeder, OBL, Knight, ADS, [removed: Trebor,] [added: Trebor] and iPEK), the Pumps platform (comprised of Viking and Warren [removed: Rupp),] [added: Rupp)] and the Agriculture platform (comprised of Banjo).

The Health & Science Technologies segment designs, [removed: produces,] [added: 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, [removed: pharmaceutical,] [added: pharmaceutical] and cosmetics, pneumatic components and sealing solutions, including very high precision, low-flow rate pumping solutions required in analytical instrumentation, clinical [removed: diagnostics,] [added: diagnostics] and drug discovery, high performance molded and extruded sealing components, biocompatible medical devices and implantables, air compressors used in medical, [removed: dental,] [added: dental] and industrial applications, optical components and coatings for applications in the fields of scientific research, defense, biotechnology, [removed: life sciences,] aerospace, [removed: telecommunications,] [added: telecommunications] and electronics manufacturing, laboratory and commercial equipment used in the production of micro and nano scale materials, precision photonic solutions used in life [removed: science, research,] [added: sciences, research] and defense [removed: markets,] [added: 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, [removed: and] AT [removed: Films),] [added: Films and FLI),] the Sealing Solutions platform (comprised of Precision Polymer Engineering, FTL Seals Technology, [removed: Novotema,] [added: Novotema] and SFC Koenig) the Gast platform, the Micropump [removed: platform,] [added: platform] and the Material Processing Technologies platform (comprised of Quadro, Fitzpatrick, [removed: Microfluidics,] [added: Microfluidics] and Matcon).

The Fire & Safety/Diversified Products segment [added: designs,] produces [added: and develops] firefighting [removed: pumps] [added: pumps, valves] and controls, [removed: valves, monitors, nozzles,] rescue tools, lifting bags and other components and systems for the fire and rescue industry, engineered stainless steel banding and clamping devices used in a variety of industrial and commercial [removed: applications,] [added: 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, AWG Fittings, Godiva, Dinglee, Hurst Jaws of Life, [removed: Lukas,] [added: Lukas] and Vetter), the Band-It [removed: platform,] [added: platform] and the Dispensing platform.

Our [removed: 2017] [added: 2018] financial results were as follows:

| • | Sales of [removed: $2.3] [added: $2.5] billion increased [removed: 8%,] [added: 9%,] reflecting [removed: a 6%] [added: an 8%] increase in organic sales [removed: (excluding acquisitions] and [removed: divestitures) and] a [removed: 2%] [added: 1%] increase due to [removed: acquisitions/divestitures.] [added: foreign currency translation.] |

| • | Operating income of [removed: $502.6] [added: $569.1] million was up [removed: 22%] [added: 13%] and operating margin of [removed: 22.0%] [added: 22.9%] was up [removed: 250] [added: 90] basis [removed: points, respectively,] [added: points] from the prior year. |

| • | Net income increased [removed: 24%] [added: 22%] to [removed: $337.3] [added: $410.6] million. |

Our [removed: 2017] [added: 2018] financial results, adjusted for [removed: $8.5] [added: $12.1] million of restructuring [removed: expense and a $9.3 million gain on sale of a business,] [added: expense,] compared to our [removed: 2016] [added: 2017] financial results, adjusted for [removed: $3.7] [added: $8.5] million of restructuring [removed: expense, a $3.6 million pension settlement charge] [added: expense] and a [removed: $22.3] [added: $9.3] million [removed: loss] [added: gain] on [removed: the] sale of [removed: businesses - net,] [added: a business,] were as follows (these non-GAAP measures have been reconciled to U.S. GAAP measures in Item 6, “Selected Financial Data”):

| • | Adjusted operating income of [removed: $501.7] [added: $581.2] million was up [removed: 14%] [added: 16%] and adjusted operating margin of [removed: 21.9%] [added: 23.4%] was up [removed: 120] [added: 150] basis [removed: points, respectively,] [added: points] from the prior year. |

| • | Adjusted net income increased [removed: 16%] [added: 26%] to [removed: $333.7] [added: $419.6] million. |

| • | Adjusted EPS of [removed: $4.31] [added: $5.41] was [removed: 15%] [added: 26%] higher than prior year adjusted EPS of [removed: $3.75.] [added: $4.31.] |

The following is a discussion and analysis of our results of operations for each of the three years in the period ended December 31, [removed: 2017.][added: 2018.]

Management’s primary measurements of segment performance are sales, operating [removed: income,] [added: income] and operating margin.

The Company excludes the effect of acquisitions and divestitures because [added: they can obscure underlying business trends and make comparisons of long-term performance difficult due to] the [added: varying] nature, [removed: size,] [added: size] and number of [removed: acquisitions and divestitures can vary dramatically] [added: transactions] from period to period and between the Company and its [removed: peers and can also obscure underlying business trends and make comparisons of long-term performance difficult.][added: peers.]

Sales in 2017 were $2.3 billion, an 8% increase from [removed: last year.][added: 2016.]

In 2017, Fluid & Metering Technologies contributed 38% of sales and 42% of [added: total segment] operating income; Health & Science Technologies contributed 36% of sales and 32% of [added: total segment] operating income; and Fire & Safety/Diversified Products contributed 26% of sales and 26% of [added: total segment] operating income.

[removed: Sales within our Pumps platform] increased compared to 2016 due to strength in the upstream oil market and the improving economy as well as a strong U.S. distribution channel.

| Operating income [added: (loss)] | 179,567 | | | | 153,691 | | | | 17 | % | |

This increase reflected an 8% increase in organic sales, a 3% increase from acquisitions / divestitures (Acquisitions: thinXXS - December 2017 and SFC Koenig - September 2016 / Divestitures: CVI Korea - December 2016 and CVI Japan - September 2016) and 1% of [removed: unfavorable] [added: favorable] foreign currency translation.

Sales of $587.5 million increased $67.5 million, or [removed: 13%,] [added: 13.0%,] in 2017 compared with 2016.

This increase reflected a 4% increase in organic sales and a 9% [removed: increase] [added: decline] due to acquisitions (AWG Fittings - July 2016 and Akron Brass - March 2016).

Performance in [removed: 2016] [added: 2018] Compared with [removed: 2015][added: 2017]

Sales in [removed: 2016] [added: 2018] were [removed: $2.1] [added: $2.5] billion, a [removed: 5%] [added: 9%] increase from [removed: 2015.][added: last year.]

Sales to customers outside the U.S. represented approximately [removed: 50%] [added: 51%] of total sales in [removed: both 2016 and 2015.][added: 2018 compared with 49% in 2017.]

In [removed: 2016,] [added: 2018,] Fluid & Metering Technologies contributed [removed: 40%] [added: 38%] of sales and [removed: 44%] [added: 42%] of [added: total segment] operating income; Health & Science Technologies contributed [removed: 35%] [added: 36%] of sales and [removed: 31%] [added: 32%] of [added: total segment] operating income; and Fire & Safety/Diversified Products contributed [removed: 25%] [added: 26%] of sales and [removed: 25%] [added: 26%] of [added: total segment] operating income.

As a percentage of sales, SG&A expenses were [removed: 23.3%] [added: 21.6%] for [removed: 2016] [added: 2018] and [removed: 23.5%] [added: 23.0%] for [removed: 2015.][added: 2017.]

[removed: During 2016,] [added: In 2018 and 2017,] the Company [removed: recorded] [added: incurred] pre-tax restructuring expenses totaling [removed: $3.7] [added: $12.1] million [added: and $8.5 million, respectively,] as part of initiatives that support the implementation of key strategic efforts designed to facilitate long-term, sustainable growth through cost reduction actions primarily consisting of employee reductions and facility rationalization.

Operating margin of [removed: 19.5%] [added: 22.9%] in [removed: 2016] [added: 2018] was [removed: down 210] [added: up 90] basis points from [removed: 21.6%] [added: 22.0%] in [removed: 2015] [added: 2017] primarily due to [removed: the loss on] [added: higher volume and productivity initiatives, partially offset by] the [removed: sale of businesses in 2016 compared to a] gain on the sale of a business in [removed: 2015, partially offset by productivity improvements] [added: 2017] and [removed: lower] [added: higher] restructuring costs [removed: year over year.][added: in 2018.]

The provision for income taxes [removed: decreased] [added: increased] to [removed: $97.4] [added: $118.4] million in [removed: 2016] [added: 2018] compared to [removed: $109.5] [added: $118.0] million in [removed: 2015.][added: 2017.]

Net income for the year of [removed: $271.1] [added: $410.6] million [removed: decreased] [added: increased] from [removed: the $282.8] [added: $337.3] million in [removed: 2015.][added: 2017.]

This [removed: decrease] [added: increase] reflected a [removed: 1% decline] [added: 7% increase] in organic [removed: sales,] [added: sales and] a 1% [removed: increase] [added: favorable impact] from [removed: acquisitions (Alfa Valvole - June 2015) and 1% of unfavorable] foreign currency translation.

In [removed: 2016,] [added: 2018,] sales were [removed: flat] [added: up 5%] domestically and [removed: decreased approximately 3%] [added: 12%] internationally.

| • | Diluted EPS of $5.29 increased $0.93, or 21%, compared to 2017. |

Although trade tensions persist and the geopolitical environment remains uncertain, we are confident in our outlook given our market leading positions in our diversified portfolio and our track record of strong execution in volatile times.

Consistent with our long-term strategic objective to grow faster than underlying market growth, we are projecting 4 to 5 percent organic revenue growth in 2019 and full year 2019 EPS is expected to be in the range of $5.60 to $5.80.

| (In thousands) | 2018 | | | | 2017 | | | | Change | | |

| Net sales | $ | 2,483,666 | | | $ | 2,287,312 | | | 9 | % | |

| Operating income | 569,088 | | | | 502,556 | | | | 13 | % | |

This increase reflects an 8% increase in organic sales and a 1% favorable impact from foreign currency translation.

Gross profit of $1.1 billion in 2018 increased $91.2 million, or 9%, from 2017, while gross margin increased 10 basis points to 45.0% in 2018 from 44.9% in 2017.

The increase in gross profit and margin is primarily a result of productivity initiatives and volume leverage, partially offset by higher engineering costs.

Selling, general and administrative (“SG&A”) expenses increased to $536.7 million in 2018 from $524.9 million in 2017.

The $11.8 million increase is mainly attributable to a stamp duty tax in Switzerland associated with the restructuring of intercompany loans and higher stock compensation.

Operating income of $569.1 million in 2018 increased from $502.6 million in 2017, primarily due to volume leverage, partially offset by the gain on the sale of a business in 2017 and higher restructuring costs in 2018.

Other (income) expense - net changed by $6.4 million, from expense of $2.4 million in 2017 to income of $4.0 million in 2018 mainly due to a foreign currency transaction gain on intercompany loans in 2018.

Interest expense decreased to $44.1 million in 2018 from $44.9 million in 2017.

The decrease was primarily due to slightly lower borrowings on the revolving credit facility during 2018 compared to 2017.

The effective tax rate decreased to 22.4% in 2018 compared to 25.9% in 2017 due to the enactment of the Tax Cuts and Jobs Act (the “Tax Act”), including the one-time Transition Tax incurred in 2017 on the mandatory deemed repatriation of foreign earnings, the 14% decrease in the U.S. statutory income tax rate and the introduction of the Foreign-Derived Intangible Income (“FDII”) deduction, as well as the excess tax benefits related to share-based compensation.

These amounts were offset by the removal of the domestic production activities deduction, the new Global Intangible Low-Taxed Income (“GILTI”) provision, increased limitation on the deductibility of executive compensation and the mix of global pre-tax income among jurisdictions.

Diluted earnings per share in 2018 of $5.29 increased $0.93 from $4.36 in 2017.

| (In thousands) | 2018 | | | | 2017 | | | | Change | | |

| Net sales | $ | 951,552 | | | $ | 880,957 | | | 8 | % | |

| Operating income | 275,060 | | | | 241,030 | | | | 14 | % | |

| Operating margin | 28.9 | | % | | 27.4 | | % | | 150 | | bps |

Sales of $951.6 million increased $70.6 million, or 8%, in 2018 compared with 2017.

This increase reflected a 9% increase in organic sales and a 1% favorable impact from foreign currency translation, partially offset by a 2% decline from a divestiture (Faure Herman - October 2017).

Sales within our Pumps platform increased compared to 2017 due to strength in the North American industrial distribution market as well as strength in the oil and gas end market and lease automated custody transfer (“LACT”) products.

Sales within the Water platform increased compared to 2017 due to strong international sales and increased project demand.

Sales within our Agriculture platform increased year over year due to broad based demand across both OEM and distribution channels in North America and Europe.

Sales within the Valves platform increased over 2017 primarily due to strong demand within the chemical end market in Europe and Asia.

Sales within our Energy platform decreased slightly compared to 2017 primarily as a result of the divestiture of our Faure Herman business in October 2017, partially offset by strong truck builds and project gains in the LPG end market.

| (In thousands) | 2018 | | | | 2017 | | | | Change | | |

| Net sales | $ | 896,419 | | | $ | 820,131 | | | 9 | % | |

| Operating income | 205,679 | | | | 179,567 | | | | 15 | % | |

| Operating margin | 22.9 | | % | | 21.9 | | % | | 100 | | bps |

Sales of $896.4 million increased $76.3 million, or 9%, in 2018 compared with 2017.

This increase reflected a 6% increase in organic sales, a 2% increase from acquisitions (FLI - July 2018 and thinXXS - December 2017) and a 1% favorable impact

from foreign currency translation.

Sales within our Scientific Fluidics & Optics platform increased compared to 2017 due to new product introductions, market share gains, strong demand across our end markets, including IVD, biotechnology, semiconductor and defense and the Finger Lakes Instrumentation and thinXXS acquisitions.

Sales within our Material Processing Technologies platform increased compared to 2017 primarily due to the timing of several large projects in 2018 and continued demand within the pharmaceutical end market in Asia, partially offset by the impact of strategic changes in product focus which resulted in discontinued product offerings in 2017.

Sales within our Sealing Solutions platform increased compared to 2017 due to the extremely strong global demand in the semiconductor end market and strength in the energy, automotive and industrial end markets.

Sales in our Gast platform increased compared to 2017 primarily due to the impact of OEM tailwinds and higher distribution volume as well as new product introductions.

| | |

| --- | --- |

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

Based on continued order strength in the fourth quarter, as well as benefits from our growth initiatives and segmentation efforts, we project approximately 5% organic revenue growth in 2018.

Full year 2018 EPS is expected to be in the range of $4.90 to $5.10.

On December 22, 2017, the President of the United States signed into law the Tax Act.

The Tax Act included significant changes to the existing tax law, including, but not limited to, a permanent reduction to the U.S. federal corporate income tax rate from 35% to 21%, effective January 1, 2018, and the creation of a territorial tax system with a one-time repatriation tax on deferred foreign income (“Transition Tax”).

We have estimated our provision for income taxes in accordance with the Tax Act and guidance available as of the date of this filing and as a result have recorded a net $0.1 million tax benefit in the fourth quarter of 2017, the period in which the legislation was enacted.

Although the net effect from the Tax Act was a $0.1 million tax benefit, there were several offsetting adjustments, including: a $40.6 million provisional tax benefit related to the remeasurement of certain deferred tax assets and liabilities, based on the rates at which they are expected to reverse in the future; $30.3 million of provisional tax expense related to the one-time Transition Tax on the mandatory deemed repatriation of foreign earnings based on cumulative foreign earnings of $779.0 million; and an additional $10.2 million of tax expense primarily related to the removal of the permanent reinvestment representation with respect to certain of its subsidiaries in Canada, Italy, and Germany.

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

On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Act.

SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740.

In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete.

To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements.

If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provision of the tax laws that were in effect immediately before the enactment of the Tax Act.

While the Company is able to make reasonable estimates of the impact of the reduction in corporate rate and the deemed repatriation transition tax, the final impact of the Tax Act may differ from these estimates, due to, among other things, changes in the Company’s interpretations and assumptions, additional guidance that may be issued by either the Internal Revenue Service or the U.S. Department of Treasury, and actions the Company may take.

SAB 118 provides up to a one-year window for companies to finalize the accounting for the impacts of this new legislation and the Company anticipates finalizing its accounting during 2018.

The Company has determined the following items are provisional amounts and reasonable estimates as of December 31, 2017: $40.6 million of deferred tax benefit recorded in connection with the remeasurement of certain deferred

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

| (In thousands) | 2016 | | | | 2015 | | | | Change | | |

| Net sales | $ | 2,113,043 | | | $ | 2,020,668 | | | 5 | % | |

| Operating income | 412,397 | | | | 436,990 | | | | (6 | )% | |

| Operating margin | 19.5 | | % | | 21.6 | | % | | (210 | ) | bps |

This increase reflects a 1% decrease in organic sales, a 1% decrease from foreign currency translation and a 7% increase from acquisitions/divestitures (Acquisitions: SFC Koenig - September 2016; AWG Fittings - July 2016; Akron Brass - March 2016; CiDRA Precision Services - July 2015; Alfa Valvole - June 2015 and Novotema - June 2015.

Divestitures: CVI Korea - December 2016; IETG - October 2016; CVI Japan - September 2016; Hydra-Stop - July 2016 and Ismatec - July 2015).

Gross profit of $930.8 million in 2016 increased $26.5 million, or 3%, from 2015, while gross margin decreased 80 basis points to 44.0% in 2016 from 44.8% in 2015.

The increase in gross profit is primarily a result of increased sales volume as a result of acquisitions, while the margin decrease is mainly attributable to $14.7 million of fair value inventory step-up charges from 2016 acquisitions compared to $3.4 million from 2015 acquisitions.

SG&A expenses increased to $492.4 million in 2016 from $474.2 million in 2015.

The $18.2 million increase is mainly attributable to $41.4 million of incremental costs from new acquisitions, partially offset by current year divestitures and cost savings from prior year restructuring actions.

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

In 2015, the Company recorded $11.2 million of restructuring expenses mainly attributable to employee severance from headcount reductions across all three segments and corporate.

Operating income of $412.4 million in 2016 decreased from $437.0 million in 2015, primarily as a result of the impact of the four divestitures in 2016 and the associated loss compared to the one divestiture in 2015 and the associated gain as well as the incremental fair value inventory step-up charges related to the 2016 acquisitions, partially offset by the reversal of $4.7 million of contingent consideration related to a 2015 acquisition and lower restructuring costs recorded in 2016 compared to 2015.

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

Interest expense increased to $45.6 million in 2016 from $41.6 million in 2015.

The increase was primarily due to the $200 million series of Senior Notes issued in 2016 and higher borrowings outstanding on the Revolving Facility.

The effective tax rate decreased to 26.4% in 2016 compared to 27.9% in 2015, due to tax benefits on the divestitures of CVI Korea and CVI Japan, certain return-to-provision adjustments and the early adoption of ASU 2016-09 and the related tax effects of share based payments now recognized as a reduction to income tax expense.

These adjustments were offset by the incurrence of additional foreign withholding taxes, the prior year revaluation of the Italian deferred tax liability related to the reduction in the Italian statutory tax rate and tax expense on the divestiture of the Hydra-Stop product line and the prior year divestiture of the Ismatec product line as well as the mix of global pre-tax income among jurisdictions.

Diluted earnings per share in 2016 of $3.53 decreased $0.09 from $3.62 in 2015.

| Net sales | $ | 849,101 | | | $ | 860,792 | | | (1 | )% | |

| Operating income | 217,500 | | | | 206,419 | | | | 5 | % | |

See Note [removed: 6] [added: 7 in Part II, Item 8, “Financial Statements and Supplementary Data,”] for further discussion.

The foreign currency transaction (gains) losses for the years ending December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] were [removed: $20.5] [added: $(2.4)] million, [removed: $(6.2)] [added: $20.5] million, and [removed: $(0.1)] [added: $(6.2)] million, respectively, and are reported within Other (income) expense-net [removed: on] [added: in] the Consolidated Statements of Operations.

Of the [added: $(2.4) million and] $20.5 million reported as foreign currency transaction [added: (gains)] losses for the [removed: period] [added: years] ending December 31, [added: 2018 and] 2017, [removed: $20.2] [added: $0.9] million [removed: was] [added: and $20.2 million, respectively, were] due to intercompany loans established in conjunction with the SFC Koenig acquisition.

As of December 31, 2018, the Company did not have any derivative instruments outstanding.

The Company does not have significant interest rate exposure due to substantially all of the $851,078 of debt outstanding as of December 31, 2018 being fixed rate debt.

At December 31, 2017, the Company had outstanding foreign currency exchange contracts with a combined notional value of €180 million that have not been designated as hedges for accounting purposes.

These contracts are used to minimize the economic impact and reduce the variability on earnings due to foreign currency fluctuations between the Swiss Franc and the Euro associated with certain intercompany loans that were established in conjunction with the SFC Koenig acquisition.

The change in the fair value of the foreign currency exchange contracts and the corresponding foreign currency gain or loss on the revaluation of the intercompany loans are both recorded through earnings each period as incurred within Other (income) expense - net in the Consolidated Statements of Operations.

During the year ended December 31, 2017, the Company recorded a gain of $19.8 million within Other (income) expense - net related to these foreign currency exchange contracts and recorded a foreign currency transaction loss of $20.2 million within Other (income) expense - net related to these intercompany loans.

The Company’s interest rate exposure is primarily related to its $862.2 million of total debt outstanding at December 31, 2017.

Approximately 1% of the debt is priced at interest rates that float with the market.

A 50 basis point movement in the interest rate on the floating rate debt would result in an approximate $0.1 million annualized increase or decrease in interest expense and cash flows.

The remaining debt is fixed rate debt.

IDEX Corporation (“IDEX,” the “Company,” “us,” “our,” or “we”) is a Delaware corporation incorporated on September 24, 1987.

The Company is an applied solutions business that sells an extensive array of pumps, valves, flow meters and other fluidics systems and components and engineered products to customers in a variety of markets around the world.

All of the Company’s business activities are carried out through wholly-owned subsidiaries.

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

Within our three reportable segments, the Company maintains 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 contains the Energy platform (comprised of Corken, Liquid Controls, SAMPI and Toptech), the Valves platform (comprised of Alfa Valvole, Richter and Aegis), the Water platform (comprised of Pulsafeeder, OBL, Knight, ADS, Trebor and iPEK), the Pumps platform (comprised of Viking and Warren Rupp) and the Agriculture platform (comprised of Banjo).

The Health & Science Technologies segment contains the Scientific Fluidics & Optics platform (comprised of Eastern Plastics, Rheodyne, Sapphire Engineering, Upchurch Scientific, ERC, CiDRA Precision Services, thinXXS Microtechnology (“thinXXS”), CVI Melles Griot, Semrock, AT Films and Finger Lakes Instrumentation (“FLI”)), the Sealing Solutions platform (comprised of Precision Polymer Engineering, FTL Seals Technology, Novotema and SFC Koenig), the Gast platform, the Micropump platform and the Material Processing Technologies platform (comprised of Quadro, Fitzpatrick, Microfluidics and Matcon).

The Fire & Safety/Diversified Products segment is comprised of the Fire & Safety platform (comprised of Class 1, Hale, Godiva, Akron Brass, Weldon, AWG Fittings, Dinglee, Hurst Jaws of Life, Lukas and Vetter), the Band-It platform and the Dispensing platform.

IDEX believes that each of its reporting units is a leader in its product and service areas.

The Company also believes that its strong financial performance has been attributable to its ability to design and engineer specialized quality products, coupled with its ability to identify and successfully consummate and integrate strategic acquisitions.

FLUID & METERING TECHNOLOGIES SEGMENT

The Fluid & Metering Technologies segment designs, produces and distributes positive displacement pumps, 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.

Fluid & Metering Technologies application-specific pump and metering solutions serve a diverse range of end markets, including industrial infrastructure (fossil fuels, refined and alternative fuels and water and wastewater), chemical processing, agriculture, food and beverage, pulp and paper, transportation, plastics and resins, electronics and electrical, construction and mining, pharmaceutical and bio-pharmaceutical, machinery and numerous other specialty niche markets.


Fluid & Metering Technologies accounted for 38%, 38% and 40% of IDEX’s sales in 2018, 2017 and 2016, respectively, with approximately 43% of its 2018 sales to customers outside the U.S. The segment accounted for 42%, 42% and 44% of total segment operating income in 2018, 2017 and 2016, respectively.

Energy.

Energy consists of the Company’s Corken, Liquid Controls, SAMPI and Toptech businesses.

Energy is a leading supplier of flow meters, electronic registration and control products, rotary vane and turbine pumps, reciprocating piston compressors and terminal automation control systems.

Applications for Liquid Controls and SAMPI consist of positive displacement flow meters and electronic registration and control products, including mobile and stationary metering installations for wholesale and retail distribution of petroleum and liquefied petroleum gas, aviation refueling and industrial metering and dispensing of liquids and gases.

Corken products consist of positive-displacement rotary vane pumps, single and multistage regenerative turbine pumps and small horsepower reciprocating piston compressors.

Toptech supplies terminal automation hardware and software to control and manage inventories as well as transactional data and invoicing to customers in the oil, gas and refined-fuels markets.

Energy maintains facilities in Lake Bluff, Illinois (Liquid Controls products); Longwood, Florida and Zwijndrecht, Belgium (Toptech products); Oklahoma City, Oklahoma (Corken products); and Altopascio, Italy (SAMPI products).

Approximately 42% of Energy’s 2018 sales were to customers outside the U.S.

Valves.

Valves consists of the Company’s Alfa Valvole, Richter and Aegis businesses.

Valves is a leader in the design, manufacture and sale of specialty valve products for use in the chemical, petro-chemical, energy and sanitary markets as well as a leading producer of fluoroplastic lined corrosion-resistant magnetic drive and mechanical seal pumps, shut-off, control and safety valves for corrosive, hazardous, contaminated, pure and high-purity fluids.

Alfa Valvole’s products are used in various industrial fields for fluid control, in both gas and liquid form, in all sectors of plant engineering, cosmetics, detergents, food industry, electric energy, pharmaceutical, chemical plants, petrochemical plants, oil, heating/air conditioning and also on ships, ferries and marine oil platforms.

Richter’s products offer superior solutions for demanding and complex pump and valve applications in the process industry.

Aegis produces specialty chemical processing valves for use in the chemical, petro-chemical, chlor-alkali and pulp and paper industries.

Valves maintains operations in Casorezzo, Italy (Alfa Valvole products); Cedar Falls, Iowa, Kempen, Germany and Suzhou, China (Richter products); and Geismar, Louisiana (Aegis products).

Approximately 82% of Valves’ 2018 sales were to customers outside the U.S.

Water.

Water consists of the Company’s ADS, iPEK, Knight, Trebor, Pulsafeeder and OBL businesses.

Water is a leading provider of metering technology, flow monitoring products and underground surveillance services for wastewater markets, alloy and non-metallic gear pumps, peristaltic pumps, transfer pumps as well as dispensing equipment for industrial laundries, commercial dishwashing and chemical metering.

ADS’ products and services provide comprehensive integrated solutions that enable industry, municipalities and government agencies to analyze and measure the capacity, quality and integrity of wastewater collection systems,

including the maintenance and construction of such systems.

iPEK supplies remote controlled systems used for infrastructure inspection.

Knight is a leading manufacturer of pumps and dispensing equipment for industrial laundries, commercial dishwashing and chemical metering.

[added: The Company] and [added: its subsidiaries are party to legal proceedings as described in Note 9 in Part II, Item 8, “Commitments and] Contingencies,” and such disclosure is incorporated by reference into this Item 3, “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 [removed: suppliers,] [added: suppliers] and were not manufactured by the Company or any of the defendant subsidiaries.

The Company and its subsidiaries are party to legal proceedings as described in Note 8 in Part II, Item 8, “Commitments

| | For the [removed: Fiscal Year Ended] [added: fiscal year ended] December 31, [removed: 2017] [added: 2018] |

| 1925 West Field Court, [added: Suite 200,] Lake Forest, Illinois | | 60045 |

Registrant’s telephone [removed: number:][added: number, including area code:]

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T [added: (232.405 of this chapter)] during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K [added: (229.405 of this chapter)] is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting [added: company or an emerging growth] company.

See the definitions of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer,”] “smaller reporting company” [added: and “emerging growth company”] in Rule 12b-2 of the Exchange Act.

| Emerging growth company ¨ | | [removed: (Do not check if a smaller reporting company)] | | | | |

The aggregate market value, as of the last business day of the registrant’s most recently completed second fiscal quarter, of the common stock (based on the June 30, [removed: 2017] [added: 2018] closing price of [removed: $113.01)] [added: $136.48)] held by non-affiliates of IDEX Corporation was [removed: $8,634,426,211.][added: $10,446,083,118.]

The number of shares outstanding of IDEX Corporation’s common stock, par value $.01 per share, as of February [removed: 14, 2018] [added: 15, 2019] was [removed: 76,535,263.][added: 75,792,814.]

Portions of the proxy statement with respect to the IDEX Corporation [removed: 2018] [added: 2019] annual meeting of stockholders (the [removed: “2018] [added: “2019] Proxy Statement”) are incorporated by reference into Part III of this Form 10-K.

| Item 1. | [removed: [Business](#s6EBC30E6ED535FEAABA4947DF0940E3A)] [added: [Business](#sAE65CF445AD75880888DB0EF6CC589E1)] | [removed: [1](#s6EBC30E6ED535FEAABA4947DF0940E3A)] [added: [1](#sAE65CF445AD75880888DB0EF6CC589E1)] |

| Item 1A. | [Risk [removed: Factors](#s345BD061B37E562E8D3875525F2C0F02)] [added: Factors](#sB20ED42E59B854E08142D947C817549A)] | [removed: [10](#s345BD061B37E562E8D3875525F2C0F02)] [added: [11](#sB20ED42E59B854E08142D947C817549A)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#sED23E8BE6DBD5D918BA83882490679A9)] [added: Comments](#s643C6089D0BA5138B113DDE82A6AECE7)] | [removed: [12](#sED23E8BE6DBD5D918BA83882490679A9)] [added: [14](#s643C6089D0BA5138B113DDE82A6AECE7)] |

| Item 2. | [removed: [Properties](#s1A018A0D9AF8535CBF253281CA03D2F0)] [added: [Properties](#sA8753F59594F5F3482BD64EF24C78D82)] | [removed: [12](#s1A018A0D9AF8535CBF253281CA03D2F0)] [added: [14](#sA8753F59594F5F3482BD64EF24C78D82)] |

| Item 3. | [Legal [removed: Proceedings](#s524977D4BDFC5E338E030948A2BF1C1E)] [added: Proceedings](#s7F35F69D1D32584B8476467C02BDC26C)] | [removed: [13](#s758233D234D7502C9C71C9D921D781B9)] [added: [14](#s2C692E026BD75B5C9CBFB882359A6333)] |

| Item 4. | [Mine Safety [removed: Disclosures](#s758233D234D7502C9C71C9D921D781B9)] [added: Disclosures](#s2C692E026BD75B5C9CBFB882359A6333)] | [removed: [13](#s758233D234D7502C9C71C9D921D781B9)] [added: [14](#s2C692E026BD75B5C9CBFB882359A6333)] |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sBF430FE6B9B35D289902ED4982921047)] [added: Securities](#s98C1B7E1483B592E897762B3A6B16186)] | [removed: [14](#sBF430FE6B9B35D289902ED4982921047)] [added: [15](#s98C1B7E1483B592E897762B3A6B16186)] |

| Item 6. | [Selected Financial [removed: Data](#sE91E6AFDD76B58AFB60DCBA70D65077C)] [added: Data](#s6A2DA370F7AE57949BE875BDD930CDAB)] | [removed: [16](#sE91E6AFDD76B58AFB60DCBA70D65077C)] [added: [17](#s6A2DA370F7AE57949BE875BDD930CDAB)] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sB63581622546575B85D89730AAFCFF3B)] [added: Operations](#sD68DE195725A50459F1B2B7EB704DC81)] | [removed: [17](#sB63581622546575B85D89730AAFCFF3B)] [added: [18](#sD68DE195725A50459F1B2B7EB704DC81)] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sAE00A32E0BAF53E6B51C8F6AE3FBDE81)] [added: Risk](#sC949DA8BDFB15DB485EFC5D515117B0D)] | [removed: [28](#sAE00A32E0BAF53E6B51C8F6AE3FBDE81)] [added: [28](#sC949DA8BDFB15DB485EFC5D515117B0D)] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#s1932F5DCD9FE52FE94AE2B57C624900A)] [added: Data](#sDB7731AB43335D4AB6E115D08F47F6B0)] | [removed: [29](#s1932F5DCD9FE52FE94AE2B57C624900A)] [added: [29](#sDB7731AB43335D4AB6E115D08F47F6B0)] |

| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s227BB0F2B97E537A82DCB37F0AF43570)] [added: Disclosure](#s8C694ADDBC5A5761A7FA31D8E12BC7A2)] | [removed: [73](#s227BB0F2B97E537A82DCB37F0AF43570)] [added: [75](#s8C694ADDBC5A5761A7FA31D8E12BC7A2)] |

| Item 9A. | [Controls and [removed: Procedures](#sD49FA9D4898D5F6CBAD307766627AFA7)] [added: Procedures](#s99FA8544E15B59A39177057B47D5629E)] | [removed: [73](#sD49FA9D4898D5F6CBAD307766627AFA7)] [added: [75](#s99FA8544E15B59A39177057B47D5629E)] |

| Item 9B. | [Other [removed: Information](#sF6242BD2A6FC5A909606DAA40F07CE3F)] [added: Information](#sD8BCCB09C8E653BF8990958E533C7FB4)] | [removed: [73](#sF6242BD2A6FC5A909606DAA40F07CE3F)] [added: [75](#sD8BCCB09C8E653BF8990958E533C7FB4)] |

| Item 10. | [Directors, Executive Officers and Corporate [removed: Governance](#sB67C17855D305166A4A1840D88A1FAB4)] [added: Governance](#s26E70EC1DA015E7A82140DEAF00217B3)] | [removed: [75](#sB67C17855D305166A4A1840D88A1FAB4)] [added: [76](#s26E70EC1DA015E7A82140DEAF00217B3)] |

| Item 11. | [Executive [removed: Compensation](#s27D76120E28C5C1CBBCDF3BCA5B6C15E)] [added: Compensation](#s79C45E651A4A5EE6BAADA13725AABF26)] | [removed: [75](#s27D76120E28C5C1CBBCDF3BCA5B6C15E)] [added: [76](#s79C45E651A4A5EE6BAADA13725AABF26)] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#sD4197380E2C3590E9A18B4AD95B53EE5)] [added: Matters](#s300FFDFB99BF52E0B62E675ECDC6B4D9)] | [removed: [75](#sD4197380E2C3590E9A18B4AD95B53EE5)] [added: [76](#s300FFDFB99BF52E0B62E675ECDC6B4D9)] |

| Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s5D7DFB555BFF5FFFA0B2DD8299116ECA)] [added: Independence](#sB9FEB112E45052D6A18EBBDF2FC4087B)] | [removed: [75](#s5D7DFB555BFF5FFFA0B2DD8299116ECA)] [added: [76](#sB9FEB112E45052D6A18EBBDF2FC4087B)] |

| Item 14. | [Principal Accountant Fees and [removed: Services](#s8EFE4B479F5556DE82CD53C66ACD304F)] [added: Services](#s2A5679E71EDC5F9AA891DDE6D8BC818F)] | [removed: [75](#s8EFE4B479F5556DE82CD53C66ACD304F)] [added: [76](#s2A5679E71EDC5F9AA891DDE6D8BC818F)] |

| Item 15. | [Exhibits and Financial Statement [removed: Schedules](#s738BEB1AB43854B0867CD6AB936B417D)] [added: Schedules](#s3A84DA4C8B3050F7A1858E00DA135DF6)] | [removed: [76](#s738BEB1AB43854B0867CD6AB936B417D)] [added: [77](#s3A84DA4C8B3050F7A1858E00DA135DF6)] |

| Item 16. | [removed: Form] [added: [Form] 10-K [removed: Summary] [added: Summary](#s6522AAB4BA4352099BADA50AED66008D)] | [removed: [80](#sADE65413352F52858339E422B6F39151)] [added: [81](#s6522AAB4BA4352099BADA50AED66008D)] |

The risks and uncertainties include, but are not limited to, the following: economic and political consequences resulting from terrorist attacks and wars; levels of industrial activity and economic conditions in the U.S. and other countries around the world; pricing [removed: pressures,] [added: 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 [removed: IDEX Corporation’s] [added: the Company’s] results, particularly in light of the low levels of order backlogs it typically maintains; [removed: its] [added: 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 [removed: company] [added: Company] operates; [added: 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.

10-K 1 iex-20181231x10k.htm

| [Signatures](#s6DB5EBFD20905CB19ED69CDB27C9248B) | | [82](#s6DB5EBFD20905CB19ED69CDB27C9248B) |

10-K 1 iex-20171231x10k.htm 10-K

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| [Signatures](#sC045130AC30C589BB48BF5100F396881) | | [81](#sC045130AC30C589BB48BF5100F396881) |

| Item 1. | Business. |

IDEX Corporation (“IDEX,” the “Company,” “us,” “our,” or “we”) is a Delaware corporation incorporated on September 24, 1987.

The Company is an applied solutions business that sells an extensive array of pumps, valves, flow meters and other fluidics systems and components and engineered products to customers in a variety of markets around the world.

All of the Company’s business activities are carried out through wholly-owned subsidiaries.

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

Within our three reportable segments, the Company maintains thirteen platforms, where we focus on organic growth and strategic acquisitions.

Each of our thirteen platforms is also a reporting unit, where we annually test for goodwill impairment.

The Fluid & Metering Technologies segment contains the Energy platform (comprised of Corken, Liquid Controls, SAMPI, and Toptech), the Valves platform (comprised of Alfa Valvole, Richter, and Aegis), the Water platform (comprised of Pulsafeeder, OBL, Knight, ADS, Trebor, and iPEK), the Pumps platform (comprised of Viking and Warren Rupp), and the Agriculture platform (comprised of Banjo).

The Health & Science Technologies segment contains the Scientific Fluidics & Optics platform (comprised of Eastern Plastics, Rheodyne, Sapphire Engineering, Upchurch Scientific, ERC, CiDRA Precision Services, thinXXS Microtechnology, CVI Melles Griot, Semrock, and AT Films), the Sealing Solutions platform (comprised of Precision Polymer Engineering, FTL Seals Technology, Novotema, and SFC Koenig), the Gast platform, the Micropump platform, and the Material Processing Technologies platform (comprised of Quadro, Fitzpatrick, Microfluidics, and Matcon).

The Fire & Safety/Diversified Products segment is comprised of the Fire & Safety platform (comprised of Class 1, Hale, Godiva, Akron Brass, AWG Fittings, Dinglee, Hurst Jaws of Life, Lukas, and Vetter), the Band-It platform, and the Dispensing platform.

IDEX believes that each of its reporting units is a leader in its product and service areas.

The Company also believes that its strong financial performance has been attributable to its ability to design and engineer specialized quality products, coupled with its ability to identify and successfully consummate and integrate strategic acquisitions.

FLUID & METERING TECHNOLOGIES SEGMENT

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

Fluid & Metering Technologies application-specific pump and metering solutions serve a diverse range of end markets, including industrial infrastructure (fossil fuels, refined & alternative fuels, and water & wastewater), chemical processing, agriculture, food & beverage, pulp and paper, transportation, plastics and resins, electronics and electrical, construction & mining, pharmaceutical and bio-pharmaceutical, machinery, and numerous other specialty niche markets.


Fluid & Metering Technologies accounted for 38%, 40% and 43% of IDEX’s sales in 2017, 2016 and 2015, respectively, with approximately 42% of its 2017 sales to customers outside the U.S. The segment accounted for 42%, 44% and 43% of IDEX’s operating income in 2017, 2016 and 2015, respectively.

Energy.

Energy consists of the Company’s Corken, Liquid Controls, SAMPI, and Toptech businesses.

Energy is a leading supplier of flow meters, electronic registration and control products, rotary vane and turbine pumps, reciprocating piston compressors, and terminal automation control systems.

Applications for Liquid Controls and SAMPI consist of positive displacement flow meters and electronic registration and control products, including mobile and stationary metering installations for wholesale and retail distribution of petroleum and liquefied petroleum gas, aviation refueling, and industrial metering and dispensing of liquids and gases.

Corken products consist of positive-displacement rotary vane pumps, single and multistage regenerative turbine pumps, and small horsepower reciprocating piston compressors.

Toptech supplies terminal automation hardware and software to control and manage inventories as well as transactional data and invoicing to customers in the oil, gas, and refined-fuels markets.

Energy maintains facilities in Lake Bluff, Illinois (Liquid Controls products); Longwood, Florida and Zwijndrecht, Belgium (Toptech products); Oklahoma City, Oklahoma (Corken products); and Altopascio, Italy (SAMPI products).

Approximately 45% of Energy’s 2017 sales were to customers outside the U.S.

Valves.

Valves consists of the Company’s Alfa Valvole, Richter, and Aegis businesses.

Valves is a leader in the design, manufacture and sale of specialty valve products for use in the chemical, petro-chemical, energy, and sanitary markets as well as a leading producer of fluoroplastic lined corrosion-resistant magnetic drive and mechanical seal pumps, shut-off, control and safety valves for corrosive, hazardous, contaminated, pure and high-purity fluids.

Alfa Valvole’s products are used in various industrial fields for fluid control, in both gas and liquid form, in all sectors of plant engineering, cosmetics, detergents, food industry, electric energy, pharmaceutical, chemical plants, petrochemical plants, oil, heating/air conditioning, and also on ships, ferries and marine oil platforms.

Richter’s products offer superior solutions for demanding and complex pump applications in the process industry.

Aegis produces specialty chemical processing valves for use in the chemical, petro-chemical, chlor-alkali, and pulp & paper industries.

Valves maintains operations in Casorezzo, Italy (Alfa Valvole products); Cedar Falls, Iowa, Kempen, Germany, and Suzhou, China (Richter products); and Geismar, Louisiana (Aegis products).

Approximately 82% of Valves’ 2017 sales were to customers outside the U.S.

Water.

The Company’s principal plants and offices have an aggregate floor space area of approximately [removed: 4.4] [added: 4.6] million square feet, of which [removed: 2.8] [added: 3.0] million square feet [removed: (63%)] [added: (65%)] is located in the U.S. and approximately 1.6 million square feet [removed: (37%)] [added: (35%)] is located outside the U.S., primarily in Germany (9%), U.K. (7%), Italy [removed: (7%),] [added: (6%),] India (3%), China (2%), Canada (2%), Switzerland (2%) and The [added: Netherlands (2%).]

Approximately [removed: 3.0] [added: 3.1] million square feet (68%) of the principal plant and office floor area is owned by the Company and the balance is held under lease.

Approximately 1.7 million square feet [removed: (39%)] [added: (38%)] of the principal plant and office floor area is held by business units in the Fluid & Metering Technologies segment; [removed: 1.3] [added: 1.4] million square feet [removed: (30%)] [added: (29%)] is held by business units in the Health & Science Technologies segment; and [removed: 1.2] [added: 1.3] million square feet [removed: (26%)] [added: (28%)] is held by business units in the Fire & Safety/Diversified Products segment.

Netherlands (2%).

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

The Company’s common stock trades on the New York Stock Exchange.

As of February 14, 2018, there were approximately 4,715 stockholders of record of our common stock and there were 76,535,263 shares outstanding.

The high and low sales prices of the common stock per share and the dividends paid per share during the last two years are as follows:

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| | 2017 | | | | | | | | | | | | 2016 | | | | | | | | | | |

| | High | | | | Low | | | | Dividends | | | | High | | | | Low | | | | Dividends | | |

| First Quarter | $ | 96.24 | | | $ | 88.29 | | | $ | 0.34 | | | $ | 84.05 | | | $ | 67.20 | | | $ | 0.32 | |

| Second Quarter | 114.94 | | | | 91.60 | | | | 0.37 | | | | 87.18 | | | | 77.93 | | | | 0.34 | | |

| Third Quarter | 124.54 | | | | 110.25 | | | | 0.37 | | | | 95.33 | | | | 79.91 | | | | 0.34 | | |

| Fourth Quarter | 135.70 | | | | 120.93 | | | | 0.37 | | | | 95.76 | | | | 82.05 | | | | 0.34 | | |

Our payment of dividends in the future will be determined by our Board of Directors and will depend on business conditions, our earnings and other factors.

For information pertaining to securities authorized for issuance under equity compensation plans and the related weighted average exercise price, see Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

The Company’s purchases of common stock during the quarter ended December 31, 2017 are as follows:

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Period | Total Number of Shares Purchased | | | Average Price Paid per Share | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | | | Maximum Dollar Value that May Yet be Purchased Under the Plans or Programs(1) | | |

| October 1, 2017 to October 31, 2017 | 44,000 | | | $ | 123.79 | | | 44,000 | | | $ | 550,936,062 | |

| November 1, 2017 to November 30, 2017 | — | | | — | | | | — | | | 550,936,062 | | |

| December 1, 2017 to December 31, 2017 | — | | | — | | | | — | | | 550,936,062 | | |

| Total | 44,000 | | | $ | — | | | 44,000 | | | $ | 550,936,062 | |

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

Performance Graph.

The following table compares total stockholder returns over the last five years to the Standard & Poor’s (the “S&P”) 500 Index, the S&P Midcap Industrials Sector Index and the Russell 2000 Index assuming the value of the investment in our common stock and each index was $100 on December 31, 2012.

Total return values for our common stock, the S&P 500 Index, S&P Midcap Industrials Sector Index and the Russell 2000 Index were calculated on cumulative total return values assuming reinvestment of dividends.

The stockholder return shown on the graph below is not necessarily indicative of future performance.


| | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | 12/12 | | | 12/13 | | | 12/14 | | | 12/15 | | | 12/16 | | | 12/17 | | |

| IDEX Corporation | $ | 100.00 | | $ | 158.71 | | $ | 167.29 | | $ | 164.65 | | $ | 193.55 | | $ | 283.62 | |

| S&P 500 Index | $ | 100.00 | | $ | 129.60 | | $ | 144.36 | | $ | 143.31 | | $ | 156.98 | | $ | 187.47 | |

| S&P Midcap 400 Industrials Sector Index | $ | 100.00 | | $ | 142.45 | | $ | 142.88 | | $ | 136.77 | | $ | 173.79 | | $ | 212.37 | |

| Russell 2000 Index | $ | 100.00 | | $ | 137.00 | | $ | 141.84 | | $ | 133.74 | | $ | 159.78 | | $ | 180.79 | |

The Company’s common stock trades on the New York Stock Exchange under the symbol “IEX”.

As of February 15, 2019, there were approximately 5,151 stockholders of record of our common stock and there were 75,792,814 shares outstanding.

Our payment of dividends in the future will be determined by our Board of Directors and will depend on business conditions, our earnings and other factors.

For information pertaining to securities authorized for issuance under equity compensation plans and the related weighted average exercise price, see Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

The Company’s purchases of common stock during the quarter ended December 31, 2018 are as follows:

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | |

| Period | Total Number of Shares Purchased | | | Average Price Paid per Share | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | | | Maximum Dollar Value that May Yet be Purchased Under the Plans or Programs(1) | | |

| October 1, 2018 to October 31, 2018 | 172,705 | | | $ | 132.14 | | | 172,705 | | | $ | 476,454,817 | |

| November 1, 2018 to November 30, 2018 | 420,000 | | | 134.26 | | | | 420,000 | | | 420,066,720 | | |

| December 1, 2018 to December 31, 2018 | 324,666 | | | 132.62 | | | | 324,666 | | | 377,010,479 | | |

| Total | 917,371 | | | $ | 133.28 | | | 917,371 | | | $ | 377,010,479 | |

| | |

| --- | --- |

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

Performance Graph.

The following table compares total stockholder returns over the last five years to the Standard & Poor’s (the “S&P”) 500 Index, the S&P Midcap Industrials Sector Index and the Russell 2000 Index assuming the value of the investment in our common stock and each index was $100 on December 31, 2013.

Total return values for our common stock, the S&P 500 Index, S&P Midcap Industrials Sector Index and the Russell 2000 Index were calculated on cumulative total return values assuming reinvestment of dividends.

The stockholder return shown on the graph below is not necessarily indicative of future performance.


| | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | |

| | 12/13 | | | 12/14 | | | 12/15 | | | 12/16 | | | 12/17 | | | 12/18 | | |

| IDEX Corporation | $ | 100.00 | | $ | 105.40 | | $ | 103.74 | | $ | 121.95 | | $ | 178.70 | | $ | 170.97 | |

| S&P 500 Index | $ | 100.00 | | $ | 111.39 | | $ | 110.58 | | $ | 121.13 | | $ | 144.65 | | $ | 135.63 | |

| S&P Midcap 400 Industrials Sector Index | $ | 100.00 | | $ | 100.30 | | $ | 96.01 | | $ | 122.00 | | $ | 149.08 | | $ | 125.40 | |

| Russell 2000 Index | $ | 100.00 | | $ | 103.53 | | $ | 97.62 | | $ | 116.63 | | $ | 131.96 | | $ | 115.89 | |

| (Dollars in thousands, except per share data) | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Net sales | $ | [removed: 2,287,312] [added: 2,483,666] | | | $ | [removed: 2,113,043] [added: 2,287,312] | | | $ | [removed: 2,020,668] [added: 2,113,043] | | | $ | [removed: 2,147,767] [added: 2,020,668] | | | $ | [removed: 2,024,130] [added: 2,147,767] | |

| Gross profit | [removed: 1,026,678] [added: 1,117,895] | | | | [removed: 930,767] [added: 1,026,678] | | | | [removed: 904,315] [added: 930,767] | | | | [removed: 949,315] [added: 904,315] | | | | [removed: 873,364] [added: 949,315] | | |

| Selling, general and administrative expenses | [removed: 524,940] [added: 536,724] | | | | [removed: 492,398] [added: 524,940] | | | | [removed: 474,156] [added: 492,398] | | | | [removed: 500,719] [added: 474,156] | | | | [removed: 468,806] [added: 500,719] | | |

| Loss (gain) on sale of businesses - net | [added: — | | | |] (9,273 | | ) | | 22,298 | | | | (18,070 | | ) | | — | | | [removed: | — | | |]

| Restructuring expenses | [removed: 8,455] [added: 12,083] | | | | [removed: 3,674] [added: 8,455] | | | | [removed: 11,239] [added: 3,674] | | | | [removed: 13,672] [added: 11,239] | | | | [removed: —] [added: 13,672] | | |

| Operating income | [removed: 502,556] [added: 569,088] | | | | [removed: 412,397] [added: 502,556] | | | | [removed: 436,990] [added: 412,397] | | | | [removed: 434,924] [added: 436,990] | | | | [removed: 404,558] [added: 434,924] | | |

| Other (income) expense - net | [added: (3,985 | | ) | |] 2,394 | | | | (1,731 | | ) | | 3,009 | | | | 589 | | | [removed: | 9,223 | | |]

| Interest expense | [removed: 44,889] [added: 44,134] | | | | [removed: 45,616] [added: 44,889] | | | | [removed: 41,636] [added: 45,616] | | | | [removed: 41,895] [added: 41,636] | | | | [removed: 42,206] [added: 41,895] | | |

| Provision for income taxes | [removed: 118,016] [added: 118,366] | | | | [removed: 97,403] [added: 118,016] | | | | [removed: 109,538] [added: 97,403] | | | | [removed: 113,054] [added: 109,538] | | | | [removed: 97,914] [added: 113,054] | | |

| Net income | [removed: 337,257] [added: 410,573] | | | | [removed: 271,109] [added: 337,257] | | | | [removed: 282,807] [added: 271,109] | | | | [removed: 279,386] [added: 282,807] | | | | [removed: 255,215] [added: 279,386] | | |

| — basic | $ | [removed: 4.41] [added: 5.36] | | | $ | [removed: 3.57] [added: 4.41] | | | $ | [removed: 3.65] [added: 3.57] | | | $ | [removed: 3.48] [added: 3.65] | | | $ | [removed: 3.11] [added: 3.48] | |

| — diluted | $ | [removed: 4.36] [added: 5.29] | | | $ | [removed: 3.53] [added: 4.36] | | | $ | [removed: 3.62] [added: 3.53] | | | $ | [removed: 3.45] [added: 3.62] | | | $ | [removed: 3.09] [added: 3.45] | |

| — basic | [removed: 76,232] [added: 76,412] | | | | [removed: 75,803] [added: 76,232] | | | | [removed: 77,126] [added: 75,803] | | | | [removed: 79,715] [added: 77,126] | | | | [removed: 81,517] [added: 79,715] | | |

| — diluted | [removed: 77,333] [added: 77,563] | | | | [removed: 76,758] [added: 77,333] | | | | [removed: 77,972] [added: 76,758] | | | | [removed: 80,728] [added: 77,972] | | | | [removed: 82,489] [added: 80,728] | | |

| Year-end shares outstanding | [removed: 76,694] [added: 75,953] | | | | [removed: 76,441] [added: 76,694] | | | | [removed: 76,535] [added: 76,441] | | | | [removed: 78,766] [added: 76,535] | | | | [removed: 81,196] [added: 78,766] | | |

| Cash dividends per share | $ | [removed: 1.48] [added: 1.72] | | | $ | [removed: 1.36] [added: 1.48] | | | $ | [removed: 1.28] [added: 1.36] | | | $ | [removed: 1.12] [added: 1.28] | | | $ | [removed: 0.89] [added: 1.12] | |

| Current assets | $ | [removed: 1,004,043] [added: 1,092,532] | | | $ | [removed: 822,721] [added: 1,004,043] | | | $ | [removed: 862,684] [added: 822,721] | | | $ | [removed: 1,075,791] [added: 862,684] | | | $ | [removed: 990,953] [added: 1,075,791] | |

| Current liabilities | [removed: 360,975] [added: 364,661] | | | | [removed: 309,158] [added: 360,975] | | | | [removed: 309,597] [added: 309,158] | | | | [removed: 411,968] [added: 309,597] | | | | [removed: 304,609] [added: 411,968] | | |

| Current ratio | [removed: 2.8] [added: 3.0] | | | | [removed: 2.7] [added: 2.8] | | | | [removed: 2.8] [added: 2.7] | | | | [removed: 2.6] [added: 2.8] | | | | [removed: 3.3] [added: 2.6] | | |

| Operating working capital (3) | [removed: 406,823] [added: 451,552] | | | | [removed: 396,739] [added: 406,823] | | | | [removed: 370,213] [added: 396,739] | | | | [removed: 366,209] [added: 370,213] | | | | [removed: 350,881] [added: 366,209] | | |

| Total assets [removed: (4)] | $ | [removed: 3,399,628] [added: 3,473,857] | | | $ | [removed: 3,154,944] [added: 3,399,628] | | | $ | [removed: 2,805,443] [added: 3,154,944] | | | $ | [removed: 2,903,463] [added: 2,805,443] | | | $ | [removed: 2,881,118] [added: 2,903,463] | |

| Total borrowings [removed: (4)] | [removed: 859,046] [added: 848,818] | | | | [removed: 1,015,281] [added: 859,046] | | | | [removed: 840,794] [added: 1,015,281] | | | | [removed: 859,345] [added: 840,794] | | | | [removed: 767,417] [added: 859,345] | | |

| Shareholders’ equity | [removed: 1,886,542] [added: 1,994,640] | | | | [removed: 1,543,894] [added: 1,886,542] | | | | [removed: 1,443,291] [added: 1,543,894] | | | | [removed: 1,486,451] [added: 1,443,291] | | | | [removed: 1,572,989] [added: 1,486,451] | | |

| Gross profit | [removed: 44.9] [added: 45.0] | | % | | [removed: 44.0] [added: 44.9] | | % | | [removed: 44.8] [added: 44.0] | | % | | [removed: 44.2] [added: 44.8] | | % | | [removed: 43.1] [added: 44.2] | | % |

| Selling, general and administrative expenses | [removed: 23.0] [added: 21.6] | | % | | [removed: 23.3] [added: 23.0] | | % | | [removed: 23.5] [added: 23.3] | | % | | [removed: 23.3] [added: 23.5] | | % | | [removed: 23.2] [added: 23.3] | | % |

| Operating income | [removed: 22.0] [added: 22.9] | | % | | [removed: 19.5] [added: 22.0] | | % | | [removed: 21.6] [added: 19.5] | | % | | [removed: 20.3] [added: 21.6] | | % | | [removed: 20.0] [added: 20.3] | | % |

| Income before income taxes | [removed: 19.9] [added: 21.3] | | % | | [removed: 17.4] [added: 19.9] | | % | | [removed: 19.4] [added: 17.4] | | % | | [removed: 18.3] [added: 19.4] | | % | | [removed: 17.4] [added: 18.3] | | % |

| Net income | [removed: 14.7] [added: 16.5] | | % | | [removed: 12.8] [added: 14.7] | | % | | [removed: 14.0] [added: 12.8] | | % | | [removed: 13.0] [added: 14.0] | | % | | [removed: 12.6] [added: 13.0] | | % |

| Capital expenditures | $ | [removed: 43,858] [added: 56,089] | | | $ | [removed: 38,242] [added: 43,858] | | | $ | [removed: 43,776] [added: 38,242] | | | $ | [removed: 47,997] [added: 43,776] | | | $ | [removed: 31,536] [added: 47,997] | |

| Depreciation and amortization | [removed: 84,216] [added: 77,544] | | | | [removed: 86,892] [added: 84,216] | | | | [removed: 78,120] [added: 86,892] | | | | [removed: 76,907] [added: 78,120] | | | | [removed: 79,334] [added: 76,907] | | |

| Return on average assets [removed: (5)] [added: (4)] | [removed: 10.3] [added: 11.9] | | % | | [removed: 9.1] [added: 10.3] | | % | | [removed: 9.9] [added: 9.1] | | % | | [removed: 9.7] [added: 9.9] | | % | | [removed: 9.0] [added: 9.7] | | % |

| Borrowings as a percent of capitalization [removed: (5)] [added: (4)] | [removed: 31.3] [added: 29.9] | | % | | [removed: 39.7] [added: 31.3] | | % | | [removed: 36.8] [added: 39.7] | | % | | [removed: 36.6] [added: 36.8] | | % | | [removed: 32.8] [added: 36.6] | | % |

| Return on average shareholders’ equity [removed: (5)] [added: (4)] | [removed: 19.7] [added: 21.2] | | % | | [removed: 18.2] [added: 19.7] | | % | | [removed: 19.3] [added: 18.2] | | % | | [removed: 18.3] [added: 19.3] | | % | | [removed: 16.8] [added: 18.3] | | % |

| Employees at year end | [removed: 7,167] [added: 7,352] | | | | [removed: 7,158] [added: 7,167] | | | | [removed: 6,801] [added: 7,158] | | | | [removed: 6,712] [added: 6,801] | | | | [removed: 6,787] [added: 6,712] | | |

| NON-GAAP MEASURES [removed: (6)] [added: (5)] | | | | | | | | | | | | | | | | | | | |

| EBITDA | $ | [removed: 584,378] [added: 650,617] | | | $ | [removed: 501,020] [added: 584,378] | | | $ | [removed: 512,101] [added: 501,020] | | | $ | [removed: 511,242] [added: 512,101] | | | $ | [removed: 474,669] [added: 511,242] | |

| EBITDA margin | [removed: 25.5] [added: 26.2] | | % | | [removed: 23.7] [added: 25.5] | | % | | [removed: 25.3] [added: 23.7] | | % | | [removed: 23.8] [added: 25.3] | | % | | [removed: 23.5] [added: 23.8] | | % |

| Adjusted EBITDA | $ | [removed: 583,560] [added: 662,700] | | | $ | [removed: 530,546] [added: 583,560] | | | $ | [removed: 505,270] [added: 530,546] | | | $ | [removed: 524,914] [added: 505,270] | | | $ | [removed: 474,669] [added: 524,914] | |

| Adjusted EBITDA margin | [removed: 25.5] [added: 26.7] | | % | | [removed: 25.1] [added: 25.5] | | % | | [removed: 25.0] [added: 25.1] | | % | | [removed: 24.4] [added: 25.0] | | % | | [removed: 23.5] [added: 24.4] | | % |

Also set forth below is a reconciliation of the change in organic net sales to the comparable measure of net sales as determined in accordance with U.S. GAAP, which represents the year-over-year consistency in net sales after excluding the impact from acquisitions/divestitures and foreign currency translation.

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | 2018 | | | | | | | | | | | | 2017 | | | | | | | | | | | | 2016 | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | |

| | For the Years Ended December 31, | | | | | | | | | | | | | | | | | | |

| | (In thousands) | | | | | | | | | | | | | | | | | | |

| \+ Restructuring expenses | 12,083 | | | | 8,455 | | | | 3,674 | | | | 11,239 | | | | 13,672 | | |

| \+ Loss (gain) on sale of businesses - net | — | | | | (9,273 | | ) | | 22,298 | | | | (18,070 | | ) | | — | | |

| | | | | | | | | | | | | | | | | | | | |

| Net sales | $ | 2,483,666 | | | $ | 2,287,312 | | | $ | 2,113,043 | | | $ | 2,020,668 | | | $ | 2,147,767 | |

| | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | For the Years Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | 2018 | | | | | | | | | | | | 2017 | | | | | | | | | | | | 2016 | | | | | | | | | | |

| | FMT | | | | HST | | | | FSDP | | | | FMT | | | | HST | | | | FSDP | | | | FMT | | | | HST | | | | FSDP | | |

| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| \+ Restructuring expenses | 2,458 | | | | 5,904 | | | | 2,184 | | | | 3,374 | | | | 4,696 | | | | 255 | | | | 932 | | | | 1,117 | | | | 1,425 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net sales | $ | 951,552 | | | $ | 896,419 | | | $ | 637,028 | | | $ | 880,957 | | | $ | 820,131 | | | $ | 587,533 | | | $ | 849,101 | | | $ | 744,809 | | | $ | 520,009 | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | |

| | For the Years Ended December 31, | | | | | | | | | | | | | | | | | | |

| | |

| --- | --- |

| (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.” |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Operating income (loss) | | $ | 206,419 | | | $ | 158,364 | | | $ | 117,346 | | | $ | (45,139 | ) | | $ | 436,990 | |

| \- Other (income) expense - net | | 1,073 | | | | 238 | | | | 148 | | | | 1,550 | | | | 3,009 | | |

| \+ Depreciation and amortization | | 27,662 | | | | 42,827 | | | | 6,051 | | | | 1,580 | | | | 78,120 | | |

| EBITDA | | 233,008 | | | | 200,953 | | | | 123,249 | | | | (45,109 | | ) | | 512,101 | | |

| Net income | | | | | | | | | | | | | | | | | | $ | 282,807 | |

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

| Operating margin | | 24.0 | | % | | 21.4 | | % | | 27.7 | | % | | n/m | | | | 21.6 | | % |

| EBITDA margin | | 27.1 | | % | | 27.2 | | % | | 29.1 | | % | | n/m | | | | 25.3 | | % |

Based on that assessment, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, [removed: 2017.][added: 2018.]

The effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which appears herein.

To the [added: shareholders and the] Board of Directors [removed: and Stockholders] of IDEX Corporation

We have audited the internal control over financial reporting of IDEX Corporation and subsidiaries (the “Company”) as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal [removed: Control-Integrated] [added: Control - Integrated] Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal [removed: Control-Integrated] [added: Control - Integrated] Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, [removed: 2017,] [added: 2018,] of the Company and our report dated February [removed: 22, 2018,] [added: 28, 2019,] expressed an unqualified opinion on those financial statements.

We have audited the accompanying consolidated balance sheets of IDEX Corporation and subsidiaries (the [removed: “Company”)] [added: "Company")] as of December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash [removed: flows] [added: flows,] for each of the three years in the period ended December 31, [removed: 2017,] [added: 2018,] and the related notes (collectively referred to as the [removed: “financial statements”).][added: "financial statements").]

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2017,] [added: 2018,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the [removed: Company’s] [added: Company's] internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal [removed: Control-Integrated] [added: Control - Integrated] Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 22, 2018,] [added: 28, 2019,] expressed an unqualified opinion on the [removed: Company’s] [added: Company's] internal control over financial reporting.

| | [added: 2018 | | | |] 2017 | | | | 2016 | | |

| Cash and cash equivalents [removed: | $] [added: at beginning of year] | 375,950 | | | [removed: $] | 235,964 | | [added: | | 328,018 | | |]

| Receivables [removed: —] [added: -] net | [removed: 294,166] [added: 312,192] | | | | [removed: 272,813] [added: 294,166] | | |

| Inventories | [removed: 259,724] [added: 279,995] | | | | [removed: 252,859] [added: 259,724] | | |

| Other current assets | [removed: 74,203] [added: 33,938] | | | | [removed: 61,085] [added: 74,203] | | |

| Total current assets | [removed: 1,004,043] [added: 1,092,532] | | | | [removed: 822,721] [added: 1,004,043] | | |

| Property, plant and equipment [removed: —] [added: -] net | [removed: 258,350] [added: 281,220] | | | | [removed: 247,816] [added: 258,350] | | |

| Goodwill | [removed: 1,704,158] [added: 1,697,955] | | | | [removed: 1,632,592] [added: 1,704,158] | | |

| Intangible assets [removed: —] [added: -] net | [removed: 414,746] [added: 383,327] | | | | [removed: 435,504] [added: 414,746] | | |

| Other noncurrent assets | [removed: 18,331] [added: 18,823] | | | | [removed: 16,311] [added: 18,331] | | |

| Total assets | $ | [added: 3,473,857 | | | $ |] 3,399,628 | | | $ | 3,154,944 | |

| Trade accounts payable | $ | [removed: 147,067] [added: 143,196] | | | $ | [removed: 128,933] [added: 147,067] | |

| Accrued expenses | [removed: 184,705] [added: 187,536] | | | | [removed: 152,852] [added: 184,705] | | |

| Short-term borrowings | [removed: 258] [added: 483] | | | | [removed: 1,046] [added: 258] | | |

| Dividends payable | [removed: 28,945] [added: 33,446] | | | | [removed: 26,327] [added: 28,945] | | |

| Total current liabilities | [removed: 360,975] [added: 364,661] | | | | [removed: 309,158] [added: 360,975] | | |

| Long-term borrowings | [removed: 858,788] [added: 848,335] | | | | [removed: 1,014,235] [added: 858,788] | | |

| Deferred income taxes | [removed: 137,638] [added: 128,007] | | | | [removed: 166,427] [added: 137,638] | | |

| Other noncurrent liabilities | [removed: 155,685] [added: 138,214] | | | | [removed: 121,230] [added: 155,685] | | |

| Total liabilities | [removed: 1,513,086] [added: 1,479,217] | | | | [removed: 1,611,050] [added: 1,513,086] | | |

| Commitments and contingencies (Note [removed: 8)] [added: 9)] | | | | | | | |

| Authorized: 150,000,000 shares, $.01 per share par value; Issued: [removed: 90,162,211] [added: 90,112,028] shares at December 31, [removed: 2017] [added: 2018] and [removed: 90,200,951] [added: 90,162,211] shares at December 31, [removed: 2016] [added: 2017] | [removed: 902] [added: 901] | | | | 902 | | |

| Additional paid-in capital | [removed: 716,906] [added: 738,339] | | | | [removed: 697,213] [added: 716,906] | | |

| Retained earnings | [removed: 2,057,915] [added: 2,342,079] | | | | [removed: 1,834,739] [added: 2,057,915] | | |

| Treasury stock at cost: [removed: 13,468,675] [added: 14,159,251] shares at December 31, [removed: 2017] [added: 2018] and [removed: 13,760,266] [added: 13,468,675] shares at December 31, [removed: 2016] [added: 2017] | [removed: (799,674] [added: (957,454] | | ) | | [removed: (787,307] [added: (799,674] | | ) |

| Accumulated other comprehensive loss | [removed: (89,507] [added: (129,225] | | ) | | [removed: (201,653] [added: (89,507] | | ) |

| Total shareholders’ equity | [removed: 1,886,542] [added: 1,994,640] | | | | [removed: 1,543,894] [added: 1,886,542] | | |

| Total liabilities and shareholders’ equity | $ | [removed: 3,399,628] [added: 3,473,857] | | | $ | [removed: 3,154,944] [added: 3,399,628] | |

| | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Net sales | $ | [removed: 2,287,312] [added: 2,483,666] | | | $ | [removed: 2,113,043] [added: 2,287,312] | | | $ | [removed: 2,020,668] [added: 2,113,043] | |

| Cost of sales | [removed: 1,260,634] [added: 1,365,771] | | | | [removed: 1,182,276] [added: 1,260,634] | | | | [removed: 1,116,353] [added: 1,182,276] | | |

To the shareholders and the Board of Directors of IDEX Corporation

| February 28, 2019 | |

| | 2018 | | | | 2017 | | |

| Cash and cash equivalents | $ | 466,407 | | | $ | 375,950 | |

| Net income | $ | 410,573 | | | $ | 337,257 | | | $ | 271,109 | |

| Net income | — | | | | 410,573 | | | | — | | | | — | | | | — | | | | — | | | | 410,573 | | |

| Adjustment for adoption of ASU 2016-16 | — | | | | (645 | | ) | | — | | | | — | | | | — | | | | — | | | | (645 | | ) |

| Adjustment for adoption of ASU 2018-02 | — | | | | 6,435 | | | | — | | | | (3,411 | | ) | | (3,024 | | ) | | — | | | | — | | |

| Repurchase of 1,273,961 shares of common stock | — | | | | — | | | | — | | | | — | | | | — | | | | (173,926 | | ) | | (173,926 | | ) |

| Balance, December 31, 2018 | $ | 739,240 | | | $ | 2,342,079 | | | $ | (94,420 | ) | | $ | (22,740 | ) | | $ | (12,065 | ) | | $ | (957,454 | ) | | $ | 1,994,640 | |

| Net income | $ | 410,573 | | | $ | 337,257 | | | $ | 271,109 | |

| Loss (gain) on sale of businesses - net | — | | | | (9,273 | | ) | | 22,298 | | |

| Purchase of intellectual property | (4,000 | | ) | | — | | | | — | | |

| Capital expenditures for construction of new leased facility | 11,616 | | | | — | | | | — | | |

Revenue is recognized when control of the promised 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.

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 distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

Our performance obligations are satisfied at a point in time or over time as work progresses.

Revenue from products and services transferred to customers at a point in time 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.

Certain units recognize revenue over time because control transfers continuously to our customers.

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) or 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 will be revised.

The impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified.

The Company’s other revenue not accounted for under Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), is not material to its results of operations.

The Company maintains an allowance for doubtful accounts for estimated losses as a result of customers’ inability to make required payments.

In 2018 and 2017, the Company concluded that there were no long-lived assets with a fair value that was less than the carrying value.

Common stock equivalents consist of stock

In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows an entity to reclassify the stranded tax effects in accumulated other comprehensive income (loss) to retained earnings in the statement of shareholders’ equity.

The adoption resulted in an increase of $6.4 million to Retained earnings and a corresponding change of $6.4 million to Accumulated other comprehensive income (loss) at January 1, 2018.

The Company adopted this standard on January 1, 2018 and accounted for the purchase of the intellectual property assets from Phantom Controls utilizing this guidance.

See Note 5 for further information.

The Company adopted this standard on a modified retrospective basis on January 1, 2018.

The adoption resulted in a decrease of $7.3 million to Other current assets, a decrease of $6.7 million to Deferred income taxes and a decrease of $0.6 million to Retained earnings at January 1, 2018.

combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle.

The Company adopted this standard on January 1, 2018 using the modified retrospective approach applied to contracts that were not completed as of January 1, 2018.

The Company elected the following practical expedients: significant financing component, sales tax presentation, contract costs, shipping and handling activities and disclosures.

See Note 4 for further details on revenue.

In July 2018, the FASB also issued the following standards which clarify ASU 2016-02 and have the same effective date as the original standard: ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases (Topic 842): Targeted Improvements.

| | |

| --- | --- |

| February 22, 2018 | |

| Balance, December 31, 2014 | $ | 648,451 | | | $ | 1,483,821 | | | $ | (24,813 | ) | | $ | (40,316 | ) | | $ | (27,149 | ) | | $ | (553,543 | ) | | $ | 1,486,451 | |

| Net income | — | | | | 282,807 | | | | — | | | | — | | | | — | | | | — | | | | 282,807 | | |

| Repurchase of 2,811,002 shares of common stock | — | | | | | | | | | | | | | | | | | | | | (210,551 | | ) | | (210,551 | | ) |

| Excess tax benefit from share-based compensation | — | | | | — | | | | (5,265 | | ) |

| Payment of 2.58% Senior Euro Notes | — | | | | — | | | | (88,420 | | ) |

| Excess tax benefit from share-based compensation | — | | | | — | | | | 5,265 | | |

| Cash and cash equivalents at beginning of year | 235,964 | | | | 328,018 | | | | 509,137 | | |

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability of the sales price is reasonably assured.

For product sales, delivery does not occur until the products have been shipped and risk of loss has been transferred to the customer.

Revenue from services is recognized when the services are provided or ratably over the contract term.

Some arrangements with customers may include multiple deliverables, including the combination of products and services.

In such cases, the Company has identified these as separate elements in accordance with Accounting Standards Codification (“ASC”) 605-25, Revenue Recognition-Multiple-Element Arrangements, and recognizes revenue consistent with the policy for each separate element based on the relative selling price method.

Revenues from certain long-term contracts are recognized on the percentage-of-completion method.

Percentage-of-completion is measured principally by the percentage of costs incurred to date for each contract to the estimated total costs for such contract at completion.

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends the requirements related to the income statement presentation of the components of net periodic benefit cost for a company’s sponsored defined benefit pension and other postretirement plans.

Under this ASU, companies are required to disaggregate the current service cost component from the other components of net benefit cost and present it with other current compensation costs for related employees in the income statement and present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented.

This ASU also requires companies to disclose the income statement lines that contain the other components if they are not presented on appropriately described separate lines.

In addition, only the service cost component of periodic net benefit cost is eligible for capitalization.

The Company elected to early adopt this standard in the quarter ended March 31, 2017 as presenting the service cost within income from operations is more indicative of our current pension cost.

The Company adopted this standard retrospectively and thus $6.6 million was reclassified from Selling, general and administrative expenses to Other (income) expense - net for the twelve months ended December 31, 2016, and $5.3 million was reclassified from Selling, general and administrative expenses to Other (income) expense - net for the twelve months ended December 31, 2015 to conform to current period presentation.

The Company elected to apply the practical expedient that permits the use of previously disclosed service cost and other costs from the prior year’s pension and other postretirement benefit plan footnote in the comparative periods as appropriate estimates when retrospectively changing the presentation of these costs in the income statement.

The Company included the required disclosures and the changes resulting from the adoption of this standard in Note 15.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test.

Under this ASU, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to the excess, limited to the total amount of goodwill allocated to the reporting unit.

This ASU also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.

In addition, companies will be required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory.

Under this guidance, entities utilizing the FIFO or average cost method should measure inventory at the lower of cost or net realizable value, where net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal

and transportation.

This guidance is effective for interim and annual periods for the Company on January 1, 2018, with early adoption permitted.

The Company does not believe the guidance will have a material impact on its consolidated financial statements.

The update is effective for financial statements issued for fiscal years beginning after December 15, 2017.

The ASU requires adoption on a modified-retrospective basis through a cumulative adjustment to retained earnings at the beginning of the period of adoption.

The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.

This standard is effective for fiscal years beginning after December 15, 2017.

The Company does not believe the guidance will have a material impact on our consolidated financial statements.

Companies are permitted to adopt the standard early and a modified retrospective application is permitted.

Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, [removed: 2017.][added: 2018.]

Management’s Report on Internal Control Over Financial Reporting appearing on page [removed: 29] [added: 34] of this report is incorporated into this Item 9A by reference.

None.

On February 22, 2018, the Company entered into an amended and restated employment agreement with its Chief Executive Officer, Andrew K.

Silvernail, effective as of February 22, 2018 (the “Employment Agreement”), replacing his previous employment agreement, dated February 19, 2016.

The Employment Agreement provides for a term of approximately four years (expiring December 31, 2021).

Under the terms of the Employment Agreement, Mr. Silvernail will be entitled to the following: (i) an annual base salary of $1,000,000 subject to increase (but not decrease) in the discretion of the Board of Directors after an annual review; (ii) an annual incentive cash bonus under the IDEX Corporation Incentive Award Plan (the “IAP”) or other bonus plan as may be in

effect for senior executives and annual consideration for long-term equity awards under the IAP; and (iii) in addition to normal employee benefits offered to the Company’s officers, Mr. Silvernail will be permitted to use IDEX’s corporate aircraft for up to 25 hours of personal travel (as well as an additional 25 hours of use subject to reimbursement by Mr. Silvernail of the incremental costs for such additional hours of use) and will be provided with an automobile allowance in accordance with Company policy.

Under the terms of the Employment Agreement, if Mr. Silvernail’s employment is terminated by the Company other than for “cause” and not in connection with a “change in control” (each as defined in the Employment Agreement), then, subject to his execution and non-revocation of a general release of claims and his continued compliance with applicable restrictive covenants, he will receive (i) continuing salary payments and health benefits for 24 months following termination, (ii) a pro rata portion of his annual bonus for the year in which his termination occurs (based on the portion of the year he was employed), (iii) a payment equal to 200% of his base salary payable over 24 months commencing approximately 60 days after his termination, (iv) fully accelerated vesting and immediate exercisability of all unvested time-based equity awards (the “time-based acceleration”) with such time-based equity awards remaining exercisable for one year following the date of termination of his employment or until expiration of the option term, if earlier, (v) vesting of all unvested performance-based equity awards granted prior to February 22, 2018, on the December 31 following his termination of employment with respect to that number of shares of the Company’s common stock (or performance units or dividend equivalents, as applicable) based on the performance level achieved with respect to the performance goal(s) under each such award from the beginning date of the performance period applicable thereto through such December 31, and (vi) vesting of all unvested performance-based equity awards granted on or following February 22, 2018, at the end of the applicable performance period with respect to that number of shares of Company common stock (or performance units or dividend equivalents, as applicable) based on the performance level achieved through the end of such performance period ((v) and (vi), as applicable, the “performance-based acceleration”).

If Mr. Silvernail’s employment is terminated due to his disability or death, he or his estate, as applicable, will receive (i) a pro rata portion of his annual bonus for the year in which his termination occurs (based on the portion of the year he was employed), (ii) time-based acceleration, with such time-based awards granted before February 22, 2018, remaining exercisable for one year following the date of termination of employment or until expiration of the option term, if earlier, and those granted on or following February 22, 2018, remaining exercisable for five years following the date of termination of employment, or until expiration of the term, if earlier and (iii) performance-based acceleration.

If Mr. Silvernail’s employment is terminated due to his retirement, he will receive (i) the time-based acceleration, with such time-based awards granted before February 22, 2018, remaining exercisable for one year following the date of termination of employment or until expiration of the option term, if earlier, and with those granted on or following February 22, 2018, remaining exercisable for five years following the date of termination of employment or until expiration of the option term, if earlier and (ii) performance-based acceleration.

If Mr. Silvernail’s employment is terminated by the Company without cause or by him for “good reason” (as defined in the Employment Agreement), in either case, in contemplation of or within the 24 month period following a change in control, then, subject to his execution and non-revocation of a general release of claims and his continued compliance with applicable restrictive covenants, he will receive (i) continuing salary payments and health benefits for 36 months following termination, (ii) a pro rata portion of his annual bonus for the year in which his termination occurs (based on the portion of the year he was employed), (iii) a payment equal to 300% of his base salary, payable over 36 months commencing approximately 60 days after his termination, (iv) fully accelerated vesting and immediate exercisability of all unvested time-based equity awards and (v) in lieu of performance-based acceleration, a cash payment in respect of all performance-based equity awards with respect to which he has not yet received payment, based on the performance level achieved with respect to the performance goal(s) under each such award from the beginning date of the performance period applicable thereto through such change in control, with such cash payment adjusted to reflect hypothetical earnings (equal to the lesser of the Barclays Long Aaa US Corporate Index or 120% of the applicable federal long-term rate, in each case, determined as of the first business day of November of the calendar year preceding the change in control and compounded) for the period between such change in control and the date of payment.

In addition, to the extent that any payment or benefit received in connection with a change in control would be subject to an excise tax under Section 4999 of the Internal Revenue Code, such payments and/or benefits will be subject to a “best pay cap” reduction if such reduction would result in a greater net after-tax benefit to Mr. Silvernail than receiving the full amount of such payments.

The Employment Agreement contains confidentiality covenants by Mr. Silvernail, which apply indefinitely.

The foregoing description of Mr. Silvernail’s Employment Agreement is qualified in its entirety by reference to its terms, which is filed as Exhibit 10.5 to this Form 10-K.

Information under the headings “Election of Directors”; “Board Committees”; “Section 16(a) Beneficial Ownership Reporting Compliance”; and “Corporate Governance” in the [removed: 2018] [added: 2019] Proxy Statement is incorporated into this Item 10 by reference.

Information under the heading “Executive Compensation” in the [removed: 2018] [added: 2019] Proxy Statement is incorporated into this Item 11 by reference.

| | |

| --- | --- |

| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |

Information under the heading “Security Ownership” in the 2018 Proxy Statement is incorporated into this Item 12 by reference.

Equity Compensation Plan Information

Information with respect to the Company’s equity compensation plans as of December 31, 2017 is as follows:

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Plan Category | Number of Securities To be Issued Upon Exercise of Outstanding Options, Warrants and Rights | | | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans(1) | |

| Equity compensation plans approved by the Company’s stockholders | 2,301,882 | | | $ | 71.07 | | | 4,911,112 | |

(1) Includes an indeterminate number of shares underlying deferred compensation units (“DCUs”) granted under the Directors Deferred Compensation Plan and Deferred Compensation Plan for Non-officer Presidents which are issuable under the Company’s Incentive Award Plan.

Also includes an indeterminate number of shares underlying DCUs granted under the Deferred Compensation Plan for Officers, which shares are issuable under the Incentive Award Plan.

The number of DCUs granted under these plans is determined by dividing the amount deferred by the closing price of the common stock the day before the date of deferral.

The DCUs are entitled to receive dividend equivalents which are reinvested in DCUs based on the same formula for investment of a participant’s deferral.

Information under the heading “Security Ownership” in the 2019 Proxy Statement is incorporated into this Item 12 by reference.

Equity Compensation Plan Information

Information with respect to the Company’s equity compensation plans as of December 31, 2018 is as follows:

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | |

| Plan Category | Number of Securities To be Issued Upon Exercise of Outstanding Options, Warrants and Rights | | | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans(1) | |

| Equity compensation plans approved by the Company’s stockholders | 2,030,145 | | | $ | 85.08 | | | 4,287,423 | |

| | |

| --- | --- |

| (1) | Includes an indeterminate number of shares underlying deferred compensation units (“DCUs”) granted under the Directors Deferred Compensation Plan and Deferred Compensation Plan for Non-officer Presidents which are issuable under the Company’s Incentive Award Plan. Also includes an indeterminate number of shares underlying DCUs granted under the Deferred Compensation Plan for Officers, which shares are issuable under the Incentive Award Plan. The number of DCUs granted under these plans is determined by dividing the amount deferred by the closing price of the common stock the day before the date of deferral. The DCUs are entitled to receive dividend equivalents which are reinvested in DCUs based on the same formula for investment of a participant’s deferral. |

Information under the headings, “Corporate Governance” and “Board Committees” in the [removed: 2018] [added: 2019] Proxy Statement is incorporated into this Item 13 by reference.

Information under the heading “Principal Accountant Fees and Services” in the [removed: 2018] [added: 2019] Proxy Statement is incorporated into this Item 14 by reference.

[added: | (A) | 1.] Financial Statements [added: |]

[added: |] (B) [added: |] Exhibit Index [added: |]

| 3.1 | | | [Restated Certificate of Incorporation of IDEX Corporation as amended to [removed: date](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-12312017xex31.htm)] [added: date (incorporated by reference to Exhibit 3.1 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-12312017xex31.htm)] |

| 10.2 | | | [IDEX Corporation Form of Director Indemnification [removed: Agreement](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex102.htm)] [added: Agreement (incorporated by reference to Exhibit 10.2 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex102.htm)] |

| 10.5 | | [Amended and Restated Employment Agreement dated February 22, 2018 between IDEX Corporation and Andrew K. [removed: Silvernail](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex105.htm)] [added: Silvernail (incorporated by reference to Exhibit 10.5 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex105.htm)] |

| 10.8 | | [IDEX Amended and Restated Non-Employee Director Compensation Policy, effective January 1, [removed: 2018](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex108.htm)] [added: 2018 (incorporated by reference to Exhibit 10.8 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex108.htm)] |

| 10.19 | | | [Amendment of Letter Agreement dated January 16, 2012, between IDEX Corporation and Jeffrey D. Bucklew, effective January 12, [removed: 2018](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/ex1019bucklew.htm)] [added: 2018 (incorporated by reference to Exhibit 10.19 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/ex1019bucklew.htm)] |

| 10.22 | | | [Letter Agreement between IDEX Corporation and William K. Grogan, dated December 30, [removed: 2016.](http://www.sec.gov/Archives/edgar/data/832101/000083210117000016/iex-20161231xex1022.htm)] [added: 2016](http://www.sec.gov/Archives/edgar/data/832101/000083210117000016/iex-20161231xex1022.htm) (incorporated by reference to Exhibit 10.22 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2016, Commission File No. 1-10235)] |

| 10.26 | | | [Form of IDEX Corporation Performance Share Unit Award Agreement - Stock Settled, effective February [removed: 2018](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1026.htm)] [added: 2018 (incorporated by reference to Exhibit 10.26 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1026.htm)] |

| 10.27 | | | [Form of IDEX Corporation Restricted Stock Award Agreement, effective February [removed: 2018](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1027.htm)] [added: 2018 (incorporated by reference to Exhibit 10.27 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1027.htm)] |

| 10.28 | | | [Form of IDEX Corporation Restricted Stock Unit Agreement for Directors, effective February [removed: 2018](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1028.htm)] [added: 2018 (incorporated by reference to Exhibit 10.28 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1028.htm)] |

| 10.29 | | | [Form of IDEX Corporation Performance Share Unit Award Agreement - Cash Settled, effective February [removed: 2018](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-2017x1231xex1029.htm)] [added: 2018 (incorporated by reference to Exhibit 10.29 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-2017x1231xex1029.htm)] |

| 10.30 | | | [Form of IDEX Corporation Stock Option Agreement, effective February [removed: 2018](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1030.htm)] [added: 2018 (incorporated by reference to Exhibit 10.30 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1030.htm)] |

| 10.31 | | | [Form of IDEX Corporation Stock Option Agreement - Cash Settled, effective February [removed: 2018](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1031.htm)] [added: 2018 (incorporated by reference to Exhibit 10.31 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1031.htm)] |

| 10.32 | | | [Form of IDEX Corporation Restricted Stock Unit Award Agreement - Cash Settled, effective February [removed: 2018](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1032.htm)] [added: 2018 (incorporated by reference to Exhibit 10.32 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1032.htm)] |

| 10.33 | | | [Form of IDEX Corporation Restricted Stock Unit Award Agreement, effective December [removed: 2015](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1033.htm)] [added: 2015 (incorporated by reference to Exhibit 10.33 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1033.htm)] |

| 10.34 | | | [Form of IDEX Corporation Confidential Information, Work Product and Restrictive Covenant [removed: Agreement](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1034.htm)] [added: Agreement (incorporated by reference to Exhibit 10.34 to the Annual Report of IDEX Corporation on Form 10-K for the fiscal year ended December 31, 2017, Commission File No. 1-10235)](http://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex1034.htm)] |

| [removed: 12] [added: 21] | | | [removed: [Ratio] [added: [Subsidiaries] of [removed: Earnings to Fixed Charges](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-201712x31xex12.htm)] [added: IDEX](https://www.sec.gov/Archives/edgar/data/832101/000083210119000005/iex-201812x31xex21.htm)] |

| [removed: 21] [added: 23] | | | [removed: [Subsidiaries] [added: [Consent] of [removed: IDEX](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-201712x31xex21.htm)] [added: Deloitte & Touche LLP](https://www.sec.gov/Archives/edgar/data/832101/000083210119000005/iex-20181231xex23.htm)] |

| 31.1 | | | [Certification of Chief Executive Officer Pursuant to Rule 13a-14 (a) or Rule 15d-14 [removed: (a)](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex311.htm)] [added: (a)](https://www.sec.gov/Archives/edgar/data/832101/000083210119000005/iex-20181231xex311.htm)] |

| 31.2 | | | [Certification of Chief Financial Officer Pursuant to Rule 13a-14 (a) or Rule 15d-14 [removed: (a)](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex312.htm)] [added: (a)](https://www.sec.gov/Archives/edgar/data/832101/000083210119000005/iex-20181231xex312.htm)] |

| *32.1 | | | [Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States [removed: Code](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex321.htm)] [added: Code](https://www.sec.gov/Archives/edgar/data/832101/000083210119000005/iex-20181231xex321.htm)] |

| *32.2 | | | [Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States [removed: Code](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex322.htm)] [added: Code](https://www.sec.gov/Archives/edgar/data/832101/000083210119000005/iex-20181231xex322.htm)] |

| 101 | | | The following materials from IDEX Corporation’s Annual Report on Form 10-K for the year ended December 31, [removed: 2017] [added: 2018] formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets at December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] (ii) the Consolidated Statements of Operations for the three years ended December 31, [removed: 2017,] [added: 2018,] (iii) the Consolidated Statements of Comprehensive Income for the three years ended December 31, [removed: 2017,] [added: 2018,] (iv) the Consolidated Statements of Shareholders’ Equity for the three years ended December 31, [removed: 2017,] [added: 2018,] (v) the Consolidated Statements of Cash Flows for the three years ended December 31, [removed: 2017,] [added: 2018,] and (vi) Notes to the Consolidated Financial Statements. |

| | |

| --- | --- |

| | |

| --- | --- |

(A) 1.

| | | | |

| 23 | | | [Consent of Deloitte & Touche LLP](https://www.sec.gov/Archives/edgar/data/832101/000083210118000019/iex-20171231xex23.htm) |

Date: February [removed: 22, 2018][added: 28, 2019]

| Andrew K. Silvernail | | | February [removed: 22, 2018] [added: 28, 2019] | |

| William K. Grogan | | | February [removed: 22, 2018] [added: 28, 2019] | |

| Michael J. Yates | | | February [removed: 22, 2018] [added: 28, 2019] | |

| Mark A. Beck | | | February [removed: 22, 2018] [added: 28, 2019] | |

| Mark A. Buthman | | | February [removed: 22, 2018] [added: 28, 2019] | |

| William M. Cook | | | February [removed: 22, 2018] [added: 28, 2019] | |

| Katrina L. Helmkamp | | | February [removed: 22, 2018] [added: 28, 2019] | |

| Ernest J. Mrozek | | | February [removed: 22, 2018] [added: 28, 2019] | |

| Livingston L. Satterthwaite | | | February [removed: 22, 2018] [added: 28, 2019] | |

| Cynthia J. Warner | | | February [removed: 22, 2018] [added: 28, 2019] | |

| /s/ DAVID C. PARRY | | Director | | |

| David C. Parry | | | February 28, 2019 | |

| | | | | |