IDEX (IEX) 10-K risk factor changes: FY2019 vs FY2018

In addition to the factors affecting specific business operations identified in connection with the description of our operations and the financial results of our operations elsewhere in this report, the most significant of these factors are [removed: as follows:][added: included below.]

[removed: Changes] [added: Changes] in U.S. or International Economic Conditions Could [added: Materially] Adversely Affect the Sales and Profitability of Our [removed: Businesses.][added: Businesses.]

In [removed: 2018, 49%] [added: 2019, 50%] of the Company’s sales were derived from domestic operations while [removed: 51%] [added: 50%] were derived from international operations.

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

A slowdown in the U.S. or global economy and, in particular, any of these specific end markets could [added: materially] reduce the Company’s sales and profitability.

[removed: Change] [added: Change] to [removed: Political] [added: Geopolitical] and Economic Conditions in the U.S. and Foreign Countries in Which We Operate Could Adversely Affect Our [removed: Business.][added: Business.]

In [removed: 2018,] [added: 2019,] approximately [removed: 51%] [added: 50%] 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.

Any of these events could have [removed: an] [added: a materially] adverse impact on our business and operations.

[removed: Our] [added: Our] Inability to Continue to Develop New Products Could Limit Our Sales [removed: Growth.][added: Growth.]

[removed: Our] [added: Our] Growth Strategy Includes Acquisitions and We May Not be Able to Make Acquisitions of Suitable Candidates or Integrate Acquisitions [removed: Successfully.][added: Successfully.]

Acquisitions involve numerous risks, including the assumption of undisclosed or unindemnified liabilities, difficulties in the assimilation of the operations, technologies, services and products of the acquired companies and the diversion of management’s [removed: attention from other business concerns.]

[removed: The] [added: The] Markets We Serve are Highly Competitive and this Competition Could Reduce our Sales and Operating [removed: Margins.][added: Margins.]

[removed: We] [added: We] are Dependent on the Availability of Raw Materials, Parts and Components Used in Our [removed: Products.][added: Products.]

The availability and prices for raw materials, parts and components may be subject to curtailment or change due to, among other things, suppliers’ allocations to other purchasers, interruptions in production by suppliers, [added: including due to geopolitical unrest, unfavorable economic or industry conditions, labor disruptions, catastrophic weather events, natural disasters or the occurrence of a contagious disease or illness,] changes in exchange rates and prevailing price levels.

[removed: Significant] [added: Significant] Movements in Foreign Currency Exchange Rates May Harm Our Financial [removed: Results.][added: Results.]

We are exposed to fluctuations in foreign currency exchange rates, particularly with respect to the Euro, Swiss Franc, Canadian Dollar, British Pound, Indian [removed: Rupee and] [added: Rupee,] Chinese [removed: Renminbi.][added: Renminbi and Swedish Krona.]

For additional detail related to this risk, see Part II, Item 7A, “Quantitative and Qualitative [removed: Disclosure] [added: Disclosures] About Market Risk.”

[removed: Fluctuations] [added: Fluctuations] in Interest Rates Could Adversely Affect Our Results of Operations and Financial [removed: Position.][added: Position.]

We maintain a revolving credit facility, which bears interest at either an alternate base rate or [removed: an] adjusted LIBOR [removed: rate] plus, in each case, an applicable margin based on the Company's senior, unsecured, long-term debt [removed: rating.][added: rating or the Company’s applicable leverage ratio.]

[removed: An] [added: An] Unfavorable Outcome of Any of Our Pending Contingencies or Litigation Could Adversely Affect [removed: Us.][added: Us.]

For additional detail related to this risk, see Item 3, “Legal Proceedings” and Note [removed: 9] [added: 10] in Part II, Item 8, “Financial Statements and Supplementary Data.”

[removed: Our] [added: Our] Intangible Assets, Including Goodwill, are a Significant Portion of Our Total Assets and a Write-off of Our Intangible Assets or Goodwill Would Adversely Impact Our Operating Results and Significantly Reduce Our Net [removed: Worth.][added: Worth.]

At December 31, [removed: 2018,] [added: 2019,] goodwill and intangible assets totaled [removed: $1,698.0] [added: $1,779.7] million and [removed: $383.3] [added: $388.0] million, respectively.

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

[removed: A] [added: A] Significant or Sustained Decline in Commodity Prices, Including Oil, Could Negatively Impact the Levels of Expenditures by Certain of Our [removed: Customers.][added: Customers.]

[removed: Our] [added: Our] Success Depends on Our Executive Management and Other Key [removed: Personnel.][added: Personnel.]

[removed: Challenges] [added: Challenges] with Respect to Labor Availability Could Negatively Impact our Ability to Operate or Grow our [removed: Business.][added: Business.]

[removed: Our] [added: Our] Business Operations May Be Adversely Affected by Information Systems Interruptions or [removed: Intrusion.][added: Intrusion.]

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

[removed: Failure] [added: Failure] To Comply with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act or Other Applicable Anti-bribery Laws Could Have an Adverse Effect on Our [removed: Business.][added: Business.]

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

Current global economic events and conditions may amplify many of these risks.

These risks are not the only risks that may affect us.

Additional risks that we are not aware of or do not believe are material at the time of this filing may also become important factors that adversely affect our business.

| • | risks related to other government regulation or required compliance with local laws; |

| • | changes in tariff and trade barriers, including the recent impact of the first phase of the trade agreement between the United States and China; and |

| | |

| --- | --- |

| • | geopolitical events, including natural disasters, public health issues, political instability, terrorism, insurrection or war. |

attention from other business concerns.

For additional detail related to this risk, see Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk."

Additionally, any labor stoppages or labor disruptions, including due to geopolitical unrest, unfavorable economic or industry conditions, catastrophic weather events, natural disasters or the occurrence of a contagious disease or illness could adversely affect our operating results or our ability to operate or grow our business.

Further, given the

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

| • | political instability, terrorism, insurrection or war. |

goodwill or identifiable intangible assets would adversely impact our results of operations and net worth.

committed by our employees or third-party intermediaries.

Changes in Applicable Tax Regulations and Resolutions of Tax Disputes Could Negatively Affect Our Financial Results.

The Company is subject to taxation in the U.S. and numerous foreign jurisdictions.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”).

The changes included in the Tax Act were broad and complex.

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.

The Health & Science Technologies segment designs, produces and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems used in beverage, food processing, pharmaceutical and cosmetics, pneumatic components and sealing solutions, including very high precision, low-flow rate pumping solutions required in analytical instrumentation, clinical diagnostics and drug discovery, high performance molded and extruded sealing components, [added: custom mechanical and shaft seals for a variety of end markets including food and beverage, marine, chemical, wastewater and water treatment, engineered hygienic mixers and valves for the global biopharmaceutical industry,] biocompatible medical devices and implantables, air compressors used in medical, dental and industrial applications, optical components and coatings for applications in the fields of scientific research, defense, biotechnology, aerospace, telecommunications and electronics manufacturing, laboratory and commercial equipment used in the production of micro and nano scale materials, precision photonic solutions used in life sciences, research and defense markets and precision gear and peristaltic pump technologies that meet exacting original equipment manufacturer specifications.

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

Our [removed: 2018] [added: 2019] financial results were as follows:

| • | Sales of $2.5 billion [removed: increased 9%,] [added: were flat,] reflecting [removed: an 8%] [added: a 1%] increase in organic sales and a 1% increase due to [added: acquisitions (Velcora - July 2019 and FLI - July 2018), offset by a 2% decrease due to] foreign currency translation. |

| • | Operating income of [removed: $569.1] [added: $579.0] million was up [removed: 13%] [added: 2%] and operating margin of [removed: 22.9%] [added: 23.2%] was up [removed: 90] [added: 30] basis points from the prior year. |

| • | Net income increased [removed: 22%] [added: 4%] to [removed: $410.6] [added: $425.5] million. |

Our [removed: 2018] [added: 2019] financial results, adjusted for [removed: $12.1] [added: $21.0] million of restructuring [removed: expense,] [added: expense and a $3.3 million fair value inventory step-up charge,] compared to 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,] 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: $581.2] [added: $603.4] million was up [removed: 16%] [added: 4%] and adjusted operating margin of [removed: 23.4%] [added: 24.2%] was up [removed: 150] [added: 80] basis points from the prior year. |

| • | Adjusted net income increased [removed: 26%] [added: 6%] to [removed: $419.6] [added: $444.2] million. |

| • | Adjusted EPS of [removed: $5.41] [added: $5.80] was [removed: 26%] [added: 7%] higher than prior year adjusted EPS of [removed: $4.31.] [added: $5.41.] |

[removed: Results] [added: Results] of [removed: Operations][added: Operations]

The following is a discussion and analysis of our results of operations for [removed: each of] the [removed: three years in] [added: year ended December 31, 2019 compared to] the [removed: period] [added: year] ended December 31, 2018.

In the following discussion, and throughout this report, references to organic sales, a non-GAAP measure, refers to sales from continuing operations calculated according to [removed: generally accepted accounting principles in the United States] [added: U.S. GAAP] but excludes (1) the impact of foreign currency translation and (2) sales from acquired or divested businesses during the first twelve months of ownership or divestiture.

[removed: Performance in 2018 Compared with 2017][added: Performance in 2019 Compared with 2018]

| [removed: (In thousands)] [added: (In thousands)] | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: Change] [added: Change] | | |

| Net sales | $ | [removed: 2,483,666] [added: 2,494,573] | | | $ | [removed: 2,287,312] [added: 2,483,666] | | | [removed: 9] [added: —] | [removed: %] | |

| Operating income | [removed: 569,088] [added: 579,003] | | | | [removed: 502,556] [added: 569,088] | | | | [removed: 13] [added: 2] | % | |

| Operating margin | [removed: 22.9] [added: 21.9] | | % | | [removed: 22.0] [added: 22.9] | | % | | [removed: 90] [added: (100] | [added: )] | bps |

Sales in [removed: 2018] [added: 2019] were $2.5 billion, [removed: a 9% increase from] [added: which was flat compared with] last year.

This increase [removed: reflects an 8%] [added: reflected a 2%] increase in organic [removed: sales and] [added: sales, partially offset by] a 1% [removed: favorable] [added: unfavorable] impact from foreign currency translation.

Sales to customers outside the U.S. represented approximately [removed: 51%] [added: 50%] of total sales in [removed: 2018] [added: 2019] compared with [removed: 49%] [added: 51%] in [removed: 2017.][added: 2018.]

In [removed: 2018,] [added: 2019,] Fluid & Metering Technologies contributed 38% of sales and [removed: 42%] [added: 44%] of total segment operating income; Health & Science Technologies contributed [removed: 36%] [added: 37%] of sales and [removed: 32%] [added: 31%] of total segment operating income; and Fire & Safety/Diversified Products contributed [removed: 26%] [added: 25%] of sales and [removed: 26%] [added: 25%] of total segment operating income.

Gross profit of $1.1 billion in [removed: 2018] [added: 2019] increased [removed: $91.2] [added: $7.1] million, or [removed: 9%,] [added: 1%,] from [removed: 2017,] [added: 2018,] while gross margin increased 10 basis points to [removed: 45.0%] [added: 45.1%] in [removed: 2018] [added: 2019] from [removed: 44.9%] [added: 45.0%] in [removed: 2017.][added: 2018.]

The increase in gross profit and margin is primarily a [removed: result of productivity initiatives] [added: due to price capture] and [removed: volume leverage,] [added: productivity initiatives,] partially offset by [added: a fair value inventory step-up charge, inflation and] higher engineering costs.

Selling, general and administrative (“SG&A”) expenses [removed: increased] [added: decreased] to [removed: $536.7] [added: $525.0] million in [removed: 2018] [added: 2019] from [removed: $524.9] [added: $536.7] million in [removed: 2017.][added: 2018.]

As a percentage of sales, SG&A expenses were [removed: 21.6%] [added: 21.2%] for [removed: 2018] [added: 2019] and [removed: 23.0%] [added: 21.6%] for [removed: 2017.][added: 2018.]

In [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the Company incurred pre-tax restructuring expenses totaling [removed: $12.1] [added: $21.0] million and [removed: $8.5] [added: $12.1] million, respectively, [removed: as part of initiatives that support the implementation of key strategic efforts designed] to facilitate long-term, sustainable growth through cost reduction [removed: actions] [added: actions,] primarily consisting of employee [removed: reductions and] [added: reductions,] facility [removed: rationalization.]

Other (income) expense - net changed by [removed: $6.4] [added: $5.7] million, from [removed: expense] [added: income] of [removed: $2.4] [added: $4.0] million in [removed: 2017] [added: 2018] to [removed: income] [added: expense] of [removed: $4.0] [added: $1.8] million in [removed: 2018] [added: 2019] mainly due to [removed: a] foreign currency transaction [removed: gain on intercompany loans] [added: gains] in [removed: 2018.][added: 2018 that did not repeat in 2019.]

The provision for income taxes [removed: increased] [added: decreased] to [removed: $118.4] [added: $107.4] million in [removed: 2018] [added: 2019] compared to [removed: $118.0] [added: $118.4] million in [removed: 2017.][added: 2018.]

Net income for the year of [removed: $410.6] [added: $425.5] million increased from [removed: $337.3] [added: $410.6] million in [removed: 2017.][added: 2018.]

Diluted earnings per share in [removed: 2018] [added: 2019] of [removed: $5.29] [added: $5.56] increased [removed: $0.93] [added: $0.27] from [removed: $4.36] [added: $5.29] in [removed: 2017.][added: 2018.]

[removed: Fluid] [added: Fluid] & Metering Technologies [removed: Segment][added: Segment]

| Net sales | $ | [removed: 951,552] [added: 957,028] | | | $ | [removed: 880,957] [added: 951,552] | | | [removed: 8] [added: 1] | % | |

| Operating income | [removed: 275,060] [added: 285,256] | | | | [removed: 241,030] [added: 275,060] | | | | [removed: 14] [added: 4] | % | |

| Operating margin | [removed: 28.9] [added: 29.8] | | % | | [removed: 27.4] [added: 28.9] | | % | | [removed: 150] [added: 90] | | bps |

This increase reflected a [removed: 9%] [added: 1%] increase in organic sales and a [removed: 1% favorable impact] [added: 2% increase] from [removed: foreign currency translation,] [added: acquisitions (Velcora - July 2019 and FLI - July 2018),] partially offset by a [removed: 2% decline] [added: 1% unfavorable impact] from [removed: a divestiture (Faure Herman - October 2017).][added: foreign currency translation.]

In [removed: 2018,] [added: 2019,] sales were [removed: up 5%] [added: flat] domestically and [removed: 12%] [added: up 1%] internationally.

Sales to customers outside the U.S. were approximately [removed: 43%] [added: 55%] of total segment sales in [removed: 2018] [added: 2019] compared with [removed: 42%] [added: 56%] in [removed: 2017.][added: 2018.]

Sales within our Pumps platform increased compared to [removed: 2017] [added: 2018] due to strength in the North American industrial [removed: distribution] market [removed: as well as strength] in the [removed: oil and gas end market] [added: first half of the year] and lease automated custody transfer (“LACT”) [removed: products.][added: product growth.]

Operating income and operating margin of [removed: $275.1] [added: $285.3] million and [removed: 28.9%,] [added: 29.8%,] respectively, were higher than the [removed: $241.0] [added: $275.1] million and [removed: 27.4%,] [added: 28.9%,] respectively, recorded in [removed: 2017,] [added: 2018,] primarily due to [removed: higher volume] [added: increased volume, price capture] and productivity [removed: initiatives, partially offset by higher restructuring expenses in 2018 and the divestiture in 2017.][added: initiatives.]

*The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related notes in this annual report.

This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties.

Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Item 1A, “Risk Factors” and elsewhere in this annual report.*

2019 Overview

| • | Diluted EPS of $5.56 increased $0.27, or 5%, compared to 2018. |

For discussion related to the results of operations for the year ended December 31, 2018 compared to the year ended December 31, 2017, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 28, 2019.

The $11.7 million decrease is primarily due to lower variable compensation expenses and tighter cost controls in 2019 as well as a stamp duty charge in Switzerland in 2018.

rationalization and impairment charges.

The restructuring expenses included severance benefits of $9.8 million, exit costs of $1.1 million and impairment charges of $10.1 million.

In the second quarter of 2019, the Company began to evaluate strategic alternatives for one of its businesses in the HST segment.

Prior to making a final decision on the options that were presented for this business, the business was informed in the third quarter of 2019 of the loss of its largest customer.

As a result,the Company accelerated its restructuring activities for this business and a decision was made to wind down the business over time, requiring a $9.7 million impairment charge.

In addition, in the fourth quarter of 2019, the Company completed the consolidation of one of its facilities into the Optics Center of Excellence in Rochester, New York, which resulted in a $0.4 million impairment charge.

Operating income of $579.0 million in 2019 increased from $569.1 million in 2018, and operating margin of 23.2% in 2019 was up 30 basis points from 22.9% in 2018.

Both operating income and operating margin increased compared to 2018 primarily due to price capture, productivity initiatives and tighter cost controls in 2019, partially offset by inflation and sales mix.

Interest expense increased to $44.3 million in 2019 from $44.1 million in 2018.

The increase was primarily due to interest on debt assumed in the Velcora acquisition, which has been subsequently retired.

The effective tax rate decreased to 20.2% in 2019 compared to 22.4% in 2018 due to an increase in the excess tax benefits related to share-based compensation, a partial change in the assertion of permanent reinvestment of certain foreign tax earnings in 2018, and the mix of global pre-tax income among jurisdictions.

| (In thousands) | 2019 | | | | 2018 | | | | Change | | |

Sales of $957.0 million increased $5.5 million, or 1%, in 2019 compared with 2018.

Sales within our Energy platform increased slightly compared to 2018 due to market demand stability, despite lower capital investment as a result of declines in fuel prices.

Sales within our Water platform were flat compared to 2018 as municipal markets remained fairly consistent.

Sales within our Agriculture platform decreased compared to 2018 due to challenging market conditions from geopolitical uncertainty and depressed commodity prices.

| (In thousands) | 2019 | | | | 2018 | | | | Change | | |

Sales of $914.4 million increased $18.0 million, or 2%, in 2019 compared with 2018.

Sales in our Gast platform increased compared to 2018 due to strong demand related to our targeted growth initiatives.

Sales within our Material Processing Technologies platform decreased compared to 2018 due to project timing.

Sales within our Micropump platform decreased compared to 2018 due to end market demand volatility.

Operating income and operating margin of $200.2 million and 21.9%, respectively, in 2019 were down from $205.7 million and 22.9%, respectively, in 2018, primarily due to the impairment charges and the fair value inventory step-up charge, partially offset by price capture and tighter cost controls in 2019.

| (In thousands) | 2019 | | | | 2018 | | | | Change | | |

Sales of $626.8 million decreased $10.3 million, or 2%, in 2019 compared with 2018.

Sales within our Dispensing platform decreased compared to 2018 due to the timing of large projects in 2018 that did not reoccur in 2019.

Sales in our Band-It platform increased compared to 2018 due to strength in transportation markets, partially offset by weakness in the industrial end market.

Cash flows used in financing activities decreased $62.4 million to $227.6 million in 2019, primarily as a result of lower share repurchases in 2019, partially offset by higher debt repayments due to the repayment of debt assumed in the Velcora acquisition and higher dividends paid in 2019.

On May 31, 2019, the Company entered into a credit agreement (the “Credit Agreement”) along with certain of its subsidiaries, as borrowers (the “Borrowers”), Bank of America, N.A., as administrative agent, swing line lender and an issuer of letters of credit, with other agents party thereto.

The Credit Agreement replaced the Company’s prior five-year, $700 million credit agreement, dated as of June 23, 2015, which was due to expire in June 2020.

The Company has the right, subject to certain conditions set forth in the Credit Agreement, to designate certain foreign

subsidiaries of the Company as borrowers under the Credit Agreement.

In connection with any such designation, the Company is required to guarantee the obligations of any such subsidiaries under the Credit Agreement.

The terms of the 4.5% Senior Notes also require the Company to make

2018 Overview and Outlook

| • | 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.

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

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

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.

In 2017, the Company divested its Faure Herman business for a pre-tax gain of $9.3 million.

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.

Operating margin of 22.9% in 2018 was up 90 basis points from 22.0% in 2017 primarily due to higher volume and productivity initiatives, partially offset by the gain on the sale of a business in 2017 and higher restructuring costs 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 provision for income taxes is based upon estimated annual tax rates for the year applied to federal, state and foreign income.

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.

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

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.

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

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

from foreign currency translation.

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.

Operating income and operating margin of $205.7 million and 22.9%, respectively, in 2018 were up from $179.6 million and 21.9%, respectively, in 2017, primarily due to higher volume and productivity initiatives, partially offset by higher restructuring expenses in the current year related to site consolidations.

Sales of $637.0 million increased $49.5 million, or 8%, in 2018 compared with 2017.

Sales within our Dispensing platform increased compared to 2017 due to strong global demand led by the U.S. and Asia.

Sales increased in our Band-It platform compared to 2017 due to market share gain across all global regions, strength in the energy, automotive and industrial end markets and several large project gains.

Sales within our Fire & Safety platform increased compared to 2017 primarily due to OEM and distribution strength as well as strong demand for rescue tools across all geographies.

Performance in 2017 Compared with 2016

| (In thousands) | 2017 | | | | 2016 | | | | Change | | |

| Net sales | $ | 2,287,312 | | | $ | 2,113,043 | | | 8 | % | |

| Operating income | 502,556 | | | | 412,397 | | | | 22 | % | |

| Operating margin | 22.0 | | % | | 19.5 | | % | | 250 | | bps |

Sales in 2017 were $2.3 billion, an 8% increase from 2016.

This increase reflects a 6% increase in organic sales and a 2% increase from acquisitions/divestitures (Acquisitions: thinXXS - December 2017; SFC Koenig - September 2016; AWG Fittings - July 2016 and Akron Brass - March 2016 / Divestitures: Faure Herman - October 2017; CVI Korea - December 2016; IETG - October 2016; CVI Japan - September 2016 and Hydra-Stop - July 2016).

Sales to customers outside the U.S. represented approximately 49% of total sales in 2017 compared with 50% in 2016.

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

Gross profit of $1.0 billion in 2017 increased $95.9 million, or 10%, from 2016, while gross margin increased 90 basis points to 44.9% in 2017 from 44.0% in 2016.

The increase in gross profit and margin is primarily a result of increased sales volume and the dilutive impact in the prior year attributable to $14.7 million of fair value inventory step-up charges from 2016 acquisitions.

Under the policy, the Company does not use financial or commodity derivative instruments for trading purposes, [removed: and the use of these instruments is subject to strict approvals by senior officers.]

As of December 31, [removed: 2018,] [added: 2019,] the Company did not have any derivative instruments outstanding.

[removed: Foreign] [added: Foreign] Currency Exchange [removed: Rates][added: Rates]

The Company’s foreign currency exchange rate risk is limited principally to the Euro, Swiss Franc, British Pound, Canadian Dollar, Indian [removed: Rupee and] [added: Rupee,] Chinese [removed: Renminbi.][added: Renminbi and Swedish Krona.]

The foreign currency transaction [removed: (gains)] losses [added: (gains)] for the [removed: years] [added: periods] ending December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017] were [removed: $(2.4) million, $20.5] [added: $3.3] million, [added: $(2.4) million] and [removed: $(6.2)] [added: $20.5] million, respectively, and are reported within Other (income) [removed: expense-net in] [added: expense - net on] the Consolidated Statements of Operations.

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

[removed: Interest] [added: Interest] Rate [removed: Fluctuations][added: Fluctuations]

The Company does not have significant interest rate exposure due to substantially all of the [removed: $851,078] [added: $850,622] of debt outstanding as of December 31, [removed: 2018] [added: 2019] being fixed rate debt.

and the use of these instruments is subject to strict approvals by senior officers.

[removed: ][added: ]

The [removed: Fluid & Metering Technologies] [added: FMT] 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 [removed: Health & Science Technologies] [added: HST] 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, [removed: Novotema and] [added: Novotema,] SFC [removed: Koenig),] [added: Koenig and Velcora Holding AB (“Velcora”)),] the Gast platform, the Micropump platform and the Material Processing Technologies platform (comprised of Quadro, Fitzpatrick, Microfluidics and Matcon).

The [removed: Fire & Safety/Diversified Products] [added: FSDP] 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.

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 [removed: identify and] successfully [removed: consummate] [added: identify, acquire] and integrate strategic acquisitions.

[removed: FLUID] [added: FLUID] & METERING TECHNOLOGIES [removed: SEGMENT][added: SEGMENT]

[removed: ][added: ]

Fluid & Metering Technologies accounted for [removed: 38%,] 38% [removed: and 40%] of IDEX’s sales in [removed: 2018, 2017] [added: each of 2019, 2018] and [removed: 2016,] [added: 2017,] respectively, with approximately 43% of its [removed: 2018] [added: 2019] sales to customers outside the U.S. The segment accounted for [removed: 42%,] [added: 44%,] 42% and [removed: 44%] [added: 42%] of total segment operating income in [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively.

[added: *Energy.*] Energy consists of the Company’s Corken, Liquid Controls, SAMPI and Toptech businesses.

Approximately [removed: 42%] [added: 44%] of Energy’s [removed: 2018] [added: 2019] sales were to customers outside the U.S.

[added: *Valves.*] Valves consists of the Company’s Alfa Valvole, Richter and Aegis businesses.

Approximately [removed: 82%] [added: 78%] of Valves’ [removed: 2018] [added: 2019] sales were to customers outside the U.S.

[added: *Water.*] Water consists of the Company’s ADS, iPEK, Knight, Trebor, Pulsafeeder and OBL businesses.

Approximately [removed: 42%] [added: 44%] of Water’s [removed: 2018] [added: 2019] sales were to customers outside the U.S.

[added: *Pumps.*] Pumps consists of the Company’s Viking and Warren Rupp businesses.

Approximately [removed: 38%] [added: 37%] of Pumps’ [removed: 2018] [added: 2019] sales were to customers outside the U.S.

[added: *Agriculture.*] Agriculture consists of the Company’s Banjo business.

Its products are used in agriculture (approximately [removed: 72%] [added: 71%] of revenue) and industrial (approximately [removed: 28%] [added: 29%] of revenue) applications.

Approximately [removed: 19%] [added: 20%] of Banjo’s [removed: 2018] [added: 2019] sales were to customers outside the U.S.

[removed: HEALTH] [added: HEALTH] & SCIENCE TECHNOLOGIES [removed: SEGMENT][added: SEGMENT]

The Health & Science Technologies segment designs, produces and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems used in beverage, food processing, pharmaceutical and cosmetics, pneumatic components and sealing solutions, including very high precision, low-flow rate pumping solutions required in analytical instrumentation, clinical diagnostics and drug discovery, high performance molded and extruded sealing components, [added: custom mechanical and shaft seals for a variety of end markets including food and beverage, marine, chemical, wastewater and water treatment, engineered hygienic mixers and valves for the global biopharmaceutical industry,] biocompatible medical devices and implantables, air compressors used in medical, dental and industrial applications, optical components and coatings for applications in the fields of scientific research, defense, biotechnology, aerospace, telecommunications and electronics manufacturing, laboratory and commercial equipment used in the production of micro and nano scale materials, precision photonic solutions used in life sciences, research and defense markets and precision gear and peristaltic pump technologies that meet exacting original equipment manufacturer specifications.

[removed: ][added: ]

Health & Science Technologies accounted for [removed: 36%,] [added: 37%,] 36% and [removed: 35%] [added: 36%] of IDEX’s sales in [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively, with approximately [removed: 56%] [added: 55%] of its [removed: 2018] [added: 2019] sales to customers outside the U.S. The segment accounted for [removed: 32%,] [added: 31%,] 32% and [removed: 31%] [added: 32%] of total segment operating income in [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively.

[added: *Scientific Fluidics & Optics.*] Scientific Fluidics & Optics consists of the Company’s Eastern Plastics, Rheodyne, Sapphire Engineering, Upchurch Scientific, ERC, CiDRA Precision Services, thinXXS, CVI Melles Griot, Semrock, AT Films (including Precision Photonics products) and FLI businesses.

Approximately 51% of Scientific Fluidics & Optics’ [removed: 2018] [added: 2019] sales were to customers outside the U.S.

[added: *Sealing Solutions.*] Sealing Solutions consists of the Company’s Precision Polymer Engineering, FTL Seals Technology, [removed: Novotema and] [added: Novotema,] SFC Koenig [added: and Velcora] businesses.

Approximately [removed: 77%] [added: 78%] of Sealing Solutions’ [removed: 2018] [added: 2019] sales were to customers outside the U.S.

[added: *Gast.*] The Gast business is a leading manufacturer of air-moving products, including air motors, low-range and medium-range vacuum pumps, vacuum generators, regenerative blowers and fractional horsepower compressors.

Approximately [removed: 27%] [added: 25%] of Gast’s [removed: 2018] [added: 2019] sales were to customers outside the U.S.

[added: *Micropump.*] Micropump, headquartered in Vancouver, Washington, is a leader in small, precision-engineered, magnetically and electromagnetically driven rotary gear, piston and centrifugal pumps.

Approximately [removed: 71%] [added: 74%] of Micropump’s [removed: 2018] [added: 2019] sales were to customers outside the U.S.

[added: *Material Processing Technologies.*] Material Processing Technologies consists of the Company’s Quadro, Fitzpatrick, Microfluidics and Matcon businesses.

Approximately [removed: 65%] [added: 61%] of Material Processing Technologies’ [removed: 2018] [added: 2019] sales were to customers outside the U.S.

[removed: FIRE] [added: FIRE] & SAFETY/DIVERSIFIED PRODUCTS [removed: SEGMENT][added: SEGMENT]

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

[removed: ][added: ]

The Fire & Safety/Diversified Products segment accounted for [removed: 26%,] [added: 25%,] 26% and [removed: 25%] [added: 26%] of IDEX’s sales in [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively, with approximately [removed: 53%] [added: 52%] of its [removed: 2018] [added: 2019] sales to customers outside the U.S. The segment accounted for [removed: 26%,] [added: 25%,] 26% and [removed: 25%] [added: 26%] of total segment operating income in [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively.

[added: *Fire & Safety.*] Fire & Safety consists of the Company’s Class 1, Hale, Godiva, Akron Brass, AWG Fittings, Dinglee, Hurst Jaws of Life, Lukas and Vetter businesses, which produce truck-mounted and portable fire pumps, stainless steel valves, monitors, apparatus valves, nozzles, foam and compressed air foam systems, pump modules and pump kits, electronic controls and information systems, conventional and networked electrical systems, mechanical components for the fire, rescue and specialty vehicle markets, hydraulic, battery, gas and electric-operated rescue equipment, hydraulic re-railing equipment, hydraulic tools for industrial applications, recycling cutters, pneumatic lifting and sealing bags for vehicle and aircraft rescue, environmental protection and disaster control and shoring equipment for vehicular or structural collapse.

Approximately [removed: 52%] [added: 50%] of Fire & Safety’s [removed: 2018] [added: 2019] sales were to customers outside the U.S.

[added: *Band-It.*] Band-It is a leading producer of high-quality stainless steel banding, buckles and clamping systems.

Velcora and its operating subsidiaries, Roplan and Steridose, are headquartered in Sweden with operations in China, the United Kingdom and the United States.

Roplan is a global manufacturer of custom mechanical and shaft seals for a variety of end markets including food and beverage, marine, chemical, wastewater and water treatment.

Steridose develops engineered hygienic mixers and valves for the global biopharmaceutical industry.

Information about Our Executive Officers

Energy.

Valves.

Water.

Pumps.

Agriculture.

Scientific Fluidics & Optics.

Sealing Solutions.

Gast.

Micropump.

Material Processing Technologies.

Fire & Safety.

Band-It.

Dispensing.

The principal customers for our products are discussed immediately above by product category in each segment.

Executive Officers of the Registrant

| James MacLennan | | 55 | | 7 | | Senior Vice President-Chief Information Officer |

Mr. MacLennan has served as the Senior Vice President-Chief Information Officer since joining IDEX in March 2012.

Prior to joining IDEX, Mr. MacLennan had a dual role as CIO for Pactiv LLC and Vice President of IT for Reynolds Services Inc.

The Company and its subsidiaries are party to legal proceedings as described in Note [removed: 9] [added: 10] 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.

[removed: UNITED STATES SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: Form 10-K][added: Form 10-K]

| [removed: þ] [added: ☑] | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: | | For] [added: For] the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2018 |][added: 2019]

| [removed: ¨] [added: ☐] | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

| | [removed: For] [added: For] the transition period from [removed: to] [added: to] |

[removed: Commission] [added: Commission] file [removed: number 1-10235][added: number 1-10235]

[removed: (Exact] [added: *(Exact] name of registrant as specified in its [removed: charter)][added: charter)*]

| [removed: Delaware] | [added: Delaware] | [removed: 36-3555336] | [added: | | | 36-3555336 |]

| [removed: (State] [added: | *(State] or other jurisdiction [removed: of incorporation] [added: of* *incorporation] or [removed: organization)] [added: organization)*] | | [removed: (I.R.S. Employer Identification No.)] | [added: | | *(I.R.S. Employer* *Identification No.)* |]

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

| [removed: (Address] [added: | *(Address] of principal executive [removed: offices)] [added: offices)*] | | [removed: (Zip Code)] | [added: | | *(Zip Code)* |]

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

[removed: (847) 498-7070][added: (847) 498-7070]

[removed: Securities] [added: Securities] Registered Pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of Each [removed: Class] [added: Class] | [added: Trading Symbol(s)] | [removed: Name] [added: Name] of Each Exchange on Which [removed: Registered] [added: Registered] |

| Common Stock, par value $.01 per share | [added: IEX] | New York Stock Exchange |

[removed: Securities] [added: Securities] Registered Pursuant to Section 12(g) of the [removed: Act:][added: Act:]

[removed: None][added: None]

Yes [removed: ¨] [added: ☐] No þ

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

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

| Large accelerated filer [removed: þ] | [added: ☑] | [added: |] Accelerated filer [removed: ¨] [added: ☐] | | Non-accelerated filer [removed: ¨] [added: ☐] | | Smaller reporting company [removed: ¨] | [added: ☐ |]

| Emerging growth company [removed: ¨] | [added: ☐] | | | | | | [added: | |]

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

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 [removed: 30, 2018] [added: 28, 2019] closing price of [removed: $136.48)] [added: $172.14)] held by non-affiliates of IDEX Corporation was [removed: $10,446,083,118.][added: $12,993,666,859.]

The number of shares outstanding of IDEX Corporation’s common stock, par value $.01 per share, as of February [removed: 15, 2019] [added: 18, 2020] was [removed: 75,792,814.][added: 76,205,390.]

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Portions of the proxy statement with respect to the IDEX Corporation [removed: 2019] [added: 2020] annual meeting of stockholders (the [removed: “2019] [added: “2020] Proxy Statement”) are incorporated by reference into Part III of this Form 10-K.

[removed: Table] [added: Table] of [removed: Contents][added: Contents]

| [removed: PART I.] [added: PART I.] | | |

| Item 1. | [removed: [Business](#sAE65CF445AD75880888DB0EF6CC589E1)] [added: [Business](#sA230FAB48E2D58659947CC68175F50C8)] | [removed: [1](#sAE65CF445AD75880888DB0EF6CC589E1)] [added: [1](#sA230FAB48E2D58659947CC68175F50C8)] |

| Item 1A. | [Risk [removed: Factors](#sB20ED42E59B854E08142D947C817549A)] [added: Factors](#sF5B9236B44F052AD912F6B1CF9CBB9DE)] | [removed: [11](#sB20ED42E59B854E08142D947C817549A)] [added: [11](#sF5B9236B44F052AD912F6B1CF9CBB9DE)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#s643C6089D0BA5138B113DDE82A6AECE7)] [added: Comments](#s46013F7F21185F7A9F68268FE4CD3AD0)] | [removed: [14](#s643C6089D0BA5138B113DDE82A6AECE7)] [added: [14](#s46013F7F21185F7A9F68268FE4CD3AD0)] |

| Item 2. | [removed: [Properties](#sA8753F59594F5F3482BD64EF24C78D82)] [added: [Properties](#s0F82E106DA5B53E792E88FEABED5BB55)] | [removed: [14](#sA8753F59594F5F3482BD64EF24C78D82)] [added: [14](#s0F82E106DA5B53E792E88FEABED5BB55)] |

| Item 3. | [Legal [removed: Proceedings](#s7F35F69D1D32584B8476467C02BDC26C)] [added: Proceedings](#s57736993294257CF861CC838003DF998)] | [removed: [14](#s2C692E026BD75B5C9CBFB882359A6333)] [added: [14](#s2BC99FDE518B541C8DD503F804F502B1)] |

| Item 4. | [Mine Safety [removed: Disclosures](#s2C692E026BD75B5C9CBFB882359A6333)] [added: Disclosures](#s2BC99FDE518B541C8DD503F804F502B1)] | [removed: [14](#s2C692E026BD75B5C9CBFB882359A6333)] [added: [14](#s2BC99FDE518B541C8DD503F804F502B1)] |

| [removed: PART II.] [added: PART II.] | | |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s98C1B7E1483B592E897762B3A6B16186)] [added: Securities](#s9DCDE18A61A7524CBD0CD7BDAEAC23FC)] | [removed: [15](#s98C1B7E1483B592E897762B3A6B16186)] [added: [15](#s9DCDE18A61A7524CBD0CD7BDAEAC23FC)] |

UNITED STATES

IDEX CORPORATION

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

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| [Signatures](#s6C9D6B24DAE55CC4ADF05935582E50C9) | | [83](#s6C9D6B24DAE55CC4ADF05935582E50C9) |

10-K 1 iex-20181231x10k.htm

IDEX CORPORATION

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (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.

(Check one):

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

The Company’s principal plants and offices have an aggregate floor space area of approximately [removed: 4.6] [added: 4.7] million square feet, of which [removed: 3.0] [added: 3.1] million square feet [removed: (65%)] [added: (66%)] is located in the U.S. and approximately 1.6 million square feet [removed: (35%)] [added: (34%)] is located outside the U.S., primarily in Germany [removed: (9%),] [added: (10%),] U.K. [removed: (7%), Italy] (6%), [added: Italy (5%),] India (3%), China (2%), [removed: Canada] [added: Sweden] (2%), [removed: Switzerland] [added: Canada] (2%) and The Netherlands (2%).

Approximately [removed: 3.1] [added: 2.9] million square feet [removed: (68%)] [added: (61%)] of the principal plant and office floor area is owned by the Company and the balance is held under lease.

Approximately [removed: 1.7] [added: 1.9] million square feet [removed: (38%)] [added: (39%)] of the principal plant and office floor area is held by business units in the Fluid & Metering Technologies segment; 1.4 million square feet [removed: (29%)] [added: (30%)] is held by business units in the Health & Science Technologies segment; and [removed: 1.3] [added: 1.2] million square feet [removed: (28%)] [added: (26%)] is held by business units in the Fire & Safety/Diversified Products segment.

[removed: PART II][added: PART II]

As of February [removed: 15, 2019,] [added: 18, 2020,] there were approximately [removed: 5,151] [added: 5,416] stockholders of record of our common stock and there were [removed: 75,792,814] [added: 76,205,390] shares outstanding.

The Company’s purchases of common stock during the quarter ended December 31, [removed: 2018] [added: 2019] are as follows:

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

[added: 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, [removed: 2013.][added: 2014.]

[removed: ][added: ]

| October 1, 2019 to October 31, 2019 | — | | | $ | — | | | — | | | $ | 322,342,564 | |

| November 1, 2019 to November 30, 2019 | — | | | — | | | | — | | | 322,342,564 | | |

| December 1, 2019 to December 31, 2019 | — | | | — | | | | — | | | 322,342,564 | | |

| Total | — | | | $ | — | | | — | | | $ | 322,342,564 | |

| | 12/14 | | | 12/15 | | | 12/16 | | | 12/17 | | | 12/18 | | | 12/19 | | |

| IDEX Corporation | $ | 100.00 | | $ | 98.42 | | $ | 115.70 | | $ | 169.54 | | $ | 162.20 | | $ | 220.97 | |

| S&P 500 Index | $ | 100.00 | | $ | 99.27 | | $ | 108.74 | | $ | 129.86 | | $ | 121.76 | | $ | 156.92 | |

| S&P Midcap 400 Industrials Sector Index | $ | 100.00 | | $ | 95.72 | | $ | 121.64 | | $ | 148.61 | | $ | 125.03 | | $ | 165.04 | |

| Russell 2000 Index | $ | 100.00 | | $ | 94.29 | | $ | 112.65 | | $ | 127.46 | | $ | 111.94 | | $ | 138.50 | |

The information contained in this Performance Graph section shall not be deemed to be “soliciting material” or “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

| 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 | |

Performance Graph.

| | 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 | |

| [removed: (Dollars] [added: (Dollars] in thousands, except per share [removed: data)] [added: data)] | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| [removed: RESULTS] [added: RESULTS] OF [removed: OPERATIONS] [added: OPERATIONS] | | | | | | | | | | | | | | | | | | | |

| Net sales | $ | [removed: 2,483,666] [added: 2,494,573] | | | $ | [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] | |

| Gross profit | [removed: 1,117,895] [added: 1,125,034] | | | | [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] | | |

| Selling, general and administrative expenses | [removed: 536,724] [added: 524,987] | | | | [removed: 524,940] [added: 536,724] | | | | [removed: 492,398] [added: 524,940] | | | | [removed: 474,156] [added: 492,398] | | | | [removed: 500,719] [added: 474,156] | | |

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

| Restructuring expenses | [removed: 12,083] [added: 21,044] | | | | [removed: 8,455] [added: 12,083] | | | | [removed: 3,674] [added: 8,455] | | | | [removed: 11,239] [added: 3,674] | | | | [removed: 13,672] [added: 11,239] | | |

| Operating income | [removed: 569,088] [added: 579,003] | | | | [removed: 502,556] [added: 569,088] | | | | [removed: 412,397] [added: 502,556] | | | | [removed: 436,990] [added: 412,397] | | | | [removed: 434,924] [added: 436,990] | | |

| Other (income) expense - net | [added: 1,759 | | | |] (3,985 | | ) | | 2,394 | | | | (1,731 | | ) | | 3,009 | | | [removed: | 589 | | |]

| Interest expense | [removed: 44,134] [added: 44,341] | | | | [removed: 44,889] [added: 44,134] | | | | [removed: 45,616] [added: 44,889] | | | | [removed: 41,636] [added: 45,616] | | | | [removed: 41,895] [added: 41,636] | | |

| Provision for income taxes | [removed: 118,366] [added: 107,382] | | | | [removed: 118,016] [added: 118,366] | | | | [removed: 97,403] [added: 118,016] | | | | [removed: 109,538] [added: 97,403] | | | | [removed: 113,054] [added: 109,538] | | |

| Net income | [removed: 410,573] [added: 425,521] | | | | [removed: 337,257] [added: 410,573] | | | | [removed: 271,109] [added: 337,257] | | | | [removed: 282,807] [added: 271,109] | | | | [removed: 279,386] [added: 282,807] | | |

| — basic | $ | [removed: 5.36] [added: 5.62] | | | $ | [removed: 4.41] [added: 5.36] | | | $ | [removed: 3.57] [added: 4.41] | | | $ | [removed: 3.65] [added: 3.57] | | | $ | [removed: 3.48] [added: 3.65] | |

| — diluted | $ | [removed: 5.29] [added: 5.56] | | | $ | [removed: 4.36] [added: 5.29] | | | $ | [removed: 3.53] [added: 4.36] | | | $ | [removed: 3.62] [added: 3.53] | | | $ | [removed: 3.45] [added: 3.62] | |

| — basic | [removed: 76,412] [added: 75,594] | | | | [removed: 76,232] [added: 76,412] | | | | [removed: 75,803] [added: 76,232] | | | | [removed: 77,126] [added: 75,803] | | | | [removed: 79,715] [added: 77,126] | | |

| — diluted | [removed: 77,563] [added: 76,454] | | | | [removed: 77,333] [added: 77,563] | | | | [removed: 76,758] [added: 77,333] | | | | [removed: 77,972] [added: 76,758] | | | | [removed: 80,728] [added: 77,972] | | |

| Year-end shares outstanding | [removed: 75,953] [added: 76,088] | | | | [removed: 76,694] [added: 75,953] | | | | [removed: 76,441] [added: 76,694] | | | | [removed: 76,535] [added: 76,441] | | | | [removed: 78,766] [added: 76,535] | | |

| Cash dividends per share | $ | [removed: 1.72] [added: 2.00] | | | $ | [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: FINANCIAL POSITION] [added: FINANCIAL POSITION] | | | | | | | | | | | | | | | | | | | |

| Current assets | $ | [removed: 1,092,532] [added: 1,261,445] | | | $ | [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] | |

| Current liabilities | [removed: 364,661] [added: 357,877] | | | | [removed: 360,975] [added: 364,661] | | | | [removed: 309,158] [added: 360,975] | | | | [removed: 309,597] [added: 309,158] | | | | [removed: 411,968] [added: 309,597] | | |

| Current ratio | [removed: 3.0] [added: 3.5] | | | | [removed: 2.8] [added: 3.0] | | | | [removed: 2.7] [added: 2.8] | | | | [removed: 2.8] [added: 2.7] | | | | [removed: 2.6] [added: 2.8] | | |

| Operating working capital (3) | [removed: 451,552] [added: 453,190] | | | | [removed: 406,823] [added: 448,991] | | | | [removed: 396,739] [added: 406,823] | | | | [removed: 370,213] [added: 396,739] | | | | [removed: 366,209] [added: 370,213] | | |

| Total assets | $ | [removed: 3,473,857] [added: 3,813,912] | | | $ | [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] | |

| Total borrowings | [removed: 848,818] [added: 849,252] | | | | [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] | | |

| Shareholders’ equity | [removed: 1,994,640] [added: 2,263,229] | | | | [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: PERFORMANCE] [added: PERFORMANCE] MEASURES AND OTHER [removed: DATA] [added: DATA] | | | | | | | | | | | | | | | | | | | |

| Gross profit | [removed: 45.0] [added: 45.1] | | % | | [removed: 44.9] [added: 45.0] | | % | | [removed: 44.0] [added: 44.9] | | % | | [removed: 44.8] [added: 44.0] | | % | | [removed: 44.2] [added: 44.8] | | % |

| Selling, general and administrative expenses | [removed: 21.6] [added: 21.0] | | % | | [removed: 23.0] [added: 21.6] | | % | | [removed: 23.3] [added: 23.0] | | % | | [removed: 23.5] [added: 23.3] | | % | | [removed: 23.3] [added: 23.5] | | % |

| Operating income | [removed: 22.9] [added: 23.2] | | % | | [removed: 22.0] [added: 22.9] | | % | | [removed: 19.5] [added: 22.0] | | % | | [removed: 21.6] [added: 19.5] | | % | | [removed: 20.3] [added: 21.6] | | % |

| Income before income taxes | [removed: 21.3] [added: 21.4] | | % | | [removed: 19.9] [added: 21.3] | | % | | [removed: 17.4] [added: 19.9] | | % | | [removed: 19.4] [added: 17.4] | | % | | [removed: 18.3] [added: 19.4] | | % |

| Net income | [removed: 16.5] [added: 17.1] | | % | | [removed: 14.7] [added: 16.5] | | % | | [removed: 12.8] [added: 14.7] | | % | | [removed: 14.0] [added: 12.8] | | % | | [removed: 13.0] [added: 14.0] | | % |

| Capital expenditures | $ | [removed: 56,089] [added: 50,912] | | | $ | [removed: 43,858] [added: 56,089] | | | $ | [removed: 38,242] [added: 43,858] | | | $ | [removed: 43,776] [added: 38,242] | | | $ | [removed: 47,997] [added: 43,776] | |

| Depreciation and amortization | [removed: 77,544] [added: 76,876] | | | | [removed: 84,216] [added: 77,544] | | | | [removed: 86,892] [added: 84,216] | | | | [removed: 78,120] [added: 86,892] | | | | [removed: 76,907] [added: 78,120] | | |

| Return on average assets (4) | [removed: 11.9] [added: 11.7] | | % | | [removed: 10.3] [added: 11.9] | | % | | [removed: 9.1] [added: 10.3] | | % | | [removed: 9.9] [added: 9.1] | | % | | [removed: 9.7] [added: 9.9] | | % |

| Borrowings as a percent of capitalization (4) | [removed: 29.9] [added: 27.3] | | % | | [removed: 31.3] [added: 29.9] | | % | | [removed: 39.7] [added: 31.3] | | % | | [removed: 36.8] [added: 39.7] | | % | | [removed: 36.6] [added: 36.8] | | % |

| Return on average shareholders’ equity (4) | [removed: 21.2] [added: 20.0] | | % | | [removed: 19.7] [added: 21.2] | | % | | [removed: 18.2] [added: 19.7] | | % | | [removed: 19.3] [added: 18.2] | | % | | [removed: 18.3] [added: 19.3] | | % |

| Employees at year end | [removed: 7,352] [added: 7,439] | | | | [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: NON-GAAP MEASURES (5)] [added: NON-GAAP MEASURES (5)] | | | | | | | | | | | | | | | | | | | |

| EBITDA | $ | [removed: 650,617] [added: 654,120] | | | $ | [removed: 584,378] [added: 650,617] | | | $ | [removed: 501,020] [added: 584,378] | | | $ | [removed: 512,101] [added: 501,020] | | | $ | [removed: 511,242] [added: 512,101] | |

| (1) | This selected financial data should be read in conjunction with our Consolidated Financial Statements and related Notes in Part II, Item 8, “Financial Statements and Supplementary Data” and with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” |

Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional discussion of organic net sales.

| \+ Fair value inventory step-up charge | 3,340 | | | | — | | | | — | | | | — | | | | — | | |

| Adjusted EBITDA | $ | 678,504 | | | $ | 662,700 | | | $ | 583,560 | | | $ | 530,546 | | | $ | 505,270 | |

| Net sales | $ | 2,494,573 | | | $ | 2,483,666 | | | $ | 2,287,312 | | | $ | 2,113,043 | | | $ | 2,020,668 | |

| EBITDA margin | 26.2 | | % | | 26.2 | | % | | 25.5 | | % | | 23.7 | | % | | 25.3 | | % |

| Adjusted EBITDA margin | 27.2 | | % | | 26.7 | | % | | 25.5 | | % | | 25.1 | | % | | 25.0 | | % |

| | 2019 | | | | | | | | | | | | 2018 | | | | | | | | | | | | 2017 | | | | | | | | | | |

| \+ Fair value inventory step-up charge | | | | | 3,340 | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | |

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

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

| \+ Restructuring expenses | 21,044 | | | | 12,083 | | | | 8,455 | | | | 3,674 | | | | 11,239 | | |

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

| \+ Fair value inventory step-up charge | 3,340 | | | | — | | | | — | | | | — | | | | — | | |

| Adjusted operating income | $ | 603,387 | | | $ | 581,171 | | | $ | 501,738 | | | $ | 438,369 | | | $ | 430,159 | |

| Net sales | $ | 2,494,573 | | | $ | 2,483,666 | | | $ | 2,287,312 | | | $ | 2,113,043 | | | $ | 2,020,668 | |

| Adjusted operating margin | 24.2 | | % | | 23.4 | | % | | 21.9 | | % | | 20.7 | | % | | 21.3 | | % |

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

| | 2019 | | | | | | | | | | | | 2018 | | | | | | | | | | | | 2017 | | | | | | | | | | |

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

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

| \+ Restructuring expenses | 2,879 | | | | 14,249 | | | | 1,364 | | | | 2,458 | | | | 5,904 | | | | 2,184 | | | | 3,374 | | | | 4,696 | | | | 255 | | |

| \+ Fair value inventory step-up charge | — | | | | 3,340 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | |

| Net sales | $ | 957,028 | | | $ | 914,446 | | | $ | 626,770 | | | $ | 951,552 | | | $ | 896,419 | | | $ | 637,028 | | | $ | 880,957 | | | $ | 820,131 | | | $ | 587,533 | |

| 5. Reconciliations of Consolidated Reported-to-Adjusted Gross Profit and Margin | | | | | | | | | | | | | | | | | | | |

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

| | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | | | 2015 | | |

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

| Gross profit | $ | 1,125,034 | | | $ | 1,117,895 | | | $ | 1,026,678 | | | $ | 930,767 | | | $ | 904,315 | |

| \+ Fair value inventory step-up charge | 3,340 | | | | — | | | | — | | | | — | | | | — | | |

| Adjusted gross profit | $ | 1,128,374 | | | $ | 1,117,895 | | | $ | 1,026,678 | | | $ | 930,767 | | | $ | 904,315 | |

| Net sales | $ | 2,494,573 | | | $ | 2,483,666 | | | $ | 2,287,312 | | | $ | 2,113,043 | | | $ | 2,020,668 | |

| Gross margin | 45.1 | | % | | 45.0 | | % | | 44.9 | | % | | 44.0 | | % | | 44.8 | | % |

| Adjusted gross margin | 45.2 | | % | | 45.0 | | % | | 44.9 | | % | | 44.0 | | % | | 44.8 | | % |

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

| | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | | | 2015 | | |

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

| Net income | $ | 425,521 | | | $ | 410,573 | | | $ | 337,257 | | | $ | 271,109 | | | $ | 282,807 | |

| \+ Restructuring expenses | 21,044 | | | | 12,083 | | | | 8,455 | | | | 3,674 | | | | 11,239 | | |

| \+ Fair value inventory step-up charge | 3,340 | | | | — | | | | — | | | | — | | | | — | | |

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

| Operating income (loss) | $ | 217,500 | | | $ | 153,691 | | | $ | 123,605 | | | $ | (82,399 | ) | | $ | 412,397 | |

| \- Other (income) expense - net | 3,066 | | | | (1,991 | | ) | | 161 | | | | (2,967 | | ) | | (1,731 | | ) |

| \+ Depreciation and amortization | 28,458 | | | | 45,298 | | | | 11,956 | | | | 1,180 | | | | 86,892 | | |

| EBITDA | 242,892 | | | | 200,980 | | | | 135,400 | | | | (78,252 | | ) | | 501,020 | | |

| Net income | | | | | | | | | | | | | | | | | $ | 271,109 | |

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

| Operating margin | 25.6 | | % | | 20.6 | | % | | 23.8 | | % | | n/m | | | | 19.5 | | % |

| EBITDA margin | 28.6 | | % | | 27.0 | | % | | 26.0 | | % | | n/m | | | | 23.7 | | % |

[removed: MANAGEMENT’S] [added: MANAGEMENT’S] REPORT ON INTERNAL CONTROL OVER FINANCIAL [removed: REPORTING][added: REPORTING]

Based on that assessment, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, [removed: 2018.][added: 2019.]

The effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which appears herein.

[removed: REPORT] [added: REPORT] OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING [removed: FIRM][added: FIRM]

[removed: Opinion] [added: Opinion] on Internal Control over Financial [removed: Reporting][added: Reporting]

We have audited the internal control over financial reporting of IDEX Corporation and subsidiaries (the “Company”) as of December 31, [removed: 2018,] [added: 2019,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated Framework [removed: (2013)] [added: (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: 2018,] [added: 2019,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated Framework [removed: (2013)] [added: (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: 2018,] [added: 2019,] of the Company and our report dated February [removed: 28, 2019,] [added: 21, 2020,] expressed an unqualified opinion on those financial statements.

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

[removed: Definition] [added: Definition] and Limitations of Internal Control over Financial [removed: Reporting][added: Reporting]

[removed: Opinion] [added: Opinion] on the Financial [removed: Statements][added: Statements]

We have audited the accompanying consolidated balance sheets of IDEX Corporation and subsidiaries (the "Company") as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2018,] [added: 2019,] and the related notes (collectively referred to as the "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: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2018,] [added: 2019,] 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 Company's internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated Framework [removed: (2013)] [added: (2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 28, 2019,] [added: 21, 2020,] expressed an unqualified opinion on the Company's internal control over financial reporting.

[removed: IDEX CORPORATION][added: IDEX CORPORATION]

[removed: CONSOLIDATED] [added: CONSOLIDATED] BALANCE [removed: SHEETS][added: SHEETS]

| | [removed: As] [added: As] of December [removed: 31,] [added: 31,] | | | | | | |

| | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | [added: | 2017 | | |]

| | [removed: (In] [added: (In] thousands except share [removed: and per] [added: and per] share [removed: amounts)] [added: amounts)] | | | | | | |

| [removed: ASSETS] [added: ASSETS] | | | | | | | |

| Cash and cash equivalents [removed: | $] [added: at beginning of year] | 466,407 | | | [removed: $] | 375,950 | | [added: | | 235,964 | | |]

| Receivables - net | [removed: 312,192] [added: 298,186] | | | | [removed: 294,166] [added: 312,192] | | |

| Inventories | [removed: 279,995] [added: 293,467] | | | | [removed: 259,724] [added: 279,995] | | |

| Other current assets | [removed: 33,938] [added: 37,211] | | | | [removed: 74,203] [added: 33,938] | | |

| Total current assets | [removed: 1,092,532] [added: 1,261,445] | | | | [removed: 1,004,043] [added: 1,092,532] | | |

| Property, plant and equipment - net | [removed: 281,220] [added: 280,316] | | | | [removed: 258,350] [added: 281,220] | | |

| Goodwill | [removed: 1,697,955] [added: 1,779,745] | | | | [removed: 1,704,158] [added: 1,697,955] | | |

| Intangible assets - net | [removed: 383,327] [added: 388,031] | | | | [removed: 414,746] [added: 383,327] | | |

| Other noncurrent assets | [removed: 18,823] [added: 104,375] | | | | [removed: 18,331] [added: 18,823] | | |

| Total assets | $ | [added: 3,813,912 | | | $ |] 3,473,857 | | | $ | 3,399,628 | |

| [removed: LIABILITIES] [added: LIABILITIES] AND SHAREHOLDERS’ [removed: EQUITY] [added: EQUITY] | | | | | | | |

| Trade accounts payable | $ | [removed: 143,196] [added: 138,463] | | | $ | [removed: 147,067] [added: 143,196] | |

| Accrued expenses | [removed: 187,536] [added: 180,290] | | | | [removed: 184,705] [added: 187,536] | | |

| Short-term borrowings | [removed: 483] [added: 388] | | | | [removed: 258] [added: 483] | | |

| Dividends payable | [removed: 33,446] [added: 38,736] | | | | [removed: 28,945] [added: 33,446] | | |

| Total current liabilities | [removed: 364,661] [added: 357,877] | | | | [removed: 360,975] [added: 364,661] | | |

| Long-term borrowings | [removed: 848,335] [added: 848,864] | | | | [removed: 858,788] [added: 848,335] | | |

| Deferred income taxes | [removed: 128,007] [added: 146,574] | | | | [removed: 137,638] [added: 128,007] | | |

| Other noncurrent liabilities | [removed: 138,214] [added: 197,368] | | | | [removed: 155,685] [added: 138,214] | | |

| Total liabilities | [removed: 1,479,217] [added: 1,550,683] | | | | [removed: 1,513,086] [added: 1,479,217] | | |

| February 21, 2020 | |

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Basis for Opinion

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue - Disaggregation of Revenue - Refer to Note 4 to the Financial Statements

The Company is a highly diversified business with a wide range of products and services that are offered in various markets throughout the world.

The Company’s business activities are carried out by numerous individual business units, which offer a unique set of products and include niche markets within specific geographic areas.

We identified revenue as a critical audit matter given the disaggregated nature of the Company’s operations and business units generating revenue.

This required extensive audit effort due to the volume of the underlying transactions and distinctiveness of each individual business unit.

High levels of auditor judgment were necessary to determine the nature, timing, and extent of audit procedures and the level of disaggregation within the Company at which to perform such procedures, especially given limited market data for certain products or geographic areas.

*How the Critical Audit Matter Was Addressed in the Audit*

Our audit procedures related to the Company’s revenue transactions included the following, among others:

| • | We tested internal controls within the relevant revenue business processes, including controls over revenue recognition and controls over the review of significant revenue transactions and operating results. |

| • | For a sample of revenue transactions, we performed detail transaction testing by agreeing the amounts recognized to |

source documents and determined that revenue was recorded appropriately.

| • | For the revenue populations subject to detail testing, we tested the completeness of revenue by making selections from reciprocal populations (e.g., shipping logs) and determined whether the transaction was recorded as a sale in the general ledger. |

| • | For revenue transactions not subject to detail transaction testing, we aggregated the revenue transactions at the reporting unit level and performed substantive analytical procedures. We developed independent expectations of revenue based on data derived from published industry indices, market and customer trends, and the results of our detail revenue testing for similar business units and markets and compared these expectations to the revenue recorded by management. |

| February 21, 2020 | |

| | 2019 | | | | 2018 | | |

| Cash and cash equivalents | $ | 632,581 | | | $ | 466,407 | |

IDEX CORPORATION

IDEX CORPORATION

| Net income | $ | 425,521 | | | $ | 410,573 | | | $ | 337,257 | |

IDEX CORPORATION

| Net income | — | | | | 425,521 | | | | — | | | | — | | | | — | | | | — | | | | 425,521 | | |

| Adjustment for adoption of ASU 2016-02 | — | | | | 28 | | | | — | | | | — | | | | — | | | | — | | | | 28 | | |

| Share-based compensation | 22,112 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 22,112 | | |

| Balance, December 31, 2019 | $ | 761,352 | | | $ | 2,615,131 | | | $ | (94,353 | ) | | $ | (25,809 | ) | | $ | (7,183 | ) | | $ | (985,909 | ) | | $ | 2,263,229 | |

IDEX CORPORATION

| Net income | $ | 425,521 | | | $ | 410,573 | | | $ | 337,257 | |

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

| Payments under other long-term borrowings | (50,057 | | ) | | — | | | | — | | |

| Other - net | (1,865 | | ) | | — | | | | — | | |

| Debt acquired with acquisition of business | 51,130 | | | | — | | | | — | | |

IDEX CORPORATION

In the second quarter of 2019, the Company began to evaluate strategic alternatives for one of its businesses in the Health & Science Technologies (“HST”) segment.

Prior to making a final decision on the options that were presented for this business, the business was informed in the third quarter of 2019 of the loss of its largest customer.

As a result, the Company accelerated its restructuring activities for this business and a decision was made to wind down the business over time.

| February 28, 2019 | |