Item 8. Financial Statements and Supplementary Data.

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Item 8. Financial Statements and Supplementary Data.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America, and as defined in Exchange Act Rule 13a-15(f).

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting.

Management has used the framework set forth in the report entitled “Internal Control — Integrated Framework” (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission to assess the effectiveness of the Company’s internal control over financial reporting. Management excluded Nexsight, KZValve and Muon Group (Note 2 - Acquisitions and Divestitures) from its assessment of internal controls over financial reporting as these acquisitions occurred in 2022. This exclusion is in accordance with the general guidance from the Staff of the Securities and Exchange Commission that an assessment of a recently acquired business may be omitted from the scope of management’s assessment of internal control over financial reporting for one year following the acquisition. The total assets (excluding goodwill and intangible assets) and net sales of current year acquisitions represented were each approximately 3 percent of the Consolidated Financial Statement amounts as of and for the year ended December 31, 2022. Based on that assessment, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2022.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which appears herein.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of IDEX Corporation

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of IDEX Corporation and subsidiaries (the “Company”) as of December 31, 2022, based on criteria established in Internal 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, 2022, based on criteria established in Internal 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, 2022, of the Company and our report dated February 23, 2023, expressed an unqualified opinion on those financial statements.

As described in Management’s Report on Internal Control over Financial Reporting, management excluded Nexsight, KZValve and Muon Group from its assessment of internal control over financial reporting as these acquisitions occurred in the twelve months ended December 31, 2022. The combined net sales and total assets of these acquisitions represented approximately 3 percent for each of the consolidated financial statement amounts as of and for the year ended December 31, 2022. Accordingly, our audit did not include the internal control over financial reporting at these acquired companies.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ DELOITTE & TOUCHE LLP


Chicago, Illinois
February 23, 2023

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of IDEX Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of IDEX Corporation and subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, equity and cash flows, for each of the three years in the period ended December 31, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, 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, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our 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 5 to the Financial Statements

Critical Audit Matter Description

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 recorded to source documents and determined that revenue was recognized appropriately.
For the revenue populations subject to detail testing, we tested the completeness of revenue by making selections from reciprocal populations (e.g., cash receipts) 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 and market and customer trends and compared our independent expectations to the revenue recorded by management.


/s/ DELOITTE & TOUCHE LLP


Chicago, Illinois
February 23, 2023

We have served as the Company’s auditor since 1987.

IDEX CORPORATION

CONSOLIDATED BALANCE SHEETS


	As of December 31,
	2022		2021
	(Dollars in millions except per share amounts)
ASSETS
Current assets
Cash and cash equivalents	$	430.2	$	855.4
Receivables - net	442.8		356.4
Inventories	470.9		370.4
Other current assets	55.4		95.8
Total current assets	1,399.3		1,678.0
Property, plant and equipment - net	382.1		327.3
Goodwill	2,638.1		2,167.7
Intangible assets - net	947.8		597.3
Other noncurrent assets	144.6		146.9
Total assets	$	5,511.9	$	4,917.2
LIABILITIES AND EQUITY
Current liabilities
Trade accounts payable	$	208.9	$	178.8
Accrued expenses	289.1		259.8
Dividends payable	45.6		41.4
Total current liabilities	543.6		480.0
Long-term borrowings	1,468.7		1,190.3
Deferred income taxes	264.2		196.4
Other noncurrent liabilities	195.8		247.4
Total liabilities	2,472.3		2,114.1
Commitments and contingencies (Note 11)
Shareholders’ equity
Preferred stock:
Authorized: 5,000,000 shares, $.01 per share par value; Issued: None	—		—
Common stock:
Authorized: 150,000,000 shares, $.01 per share par value
Issued: 90,064,988 shares at December 31, 2022 and 90,067,996 shares at December 31, 2021	0.9		0.9
Additional paid-in capital	817.2		795.6
Retained earnings	3,531.7		3,126.5
Treasury stock at cost: 14,451,032 shares at December 31, 2022 and 13,872,555 shares at December 31, 2021	(1,184.3)		(1,050.3)
Accumulated other comprehensive loss	(126.2)		(69.6)
Total shareholders’ equity	3,039.3		2,803.1
Noncontrolling interest	0.3		—
Total equity	3,039.6		2,803.1
Total liabilities and equity	$	5,511.9	$	4,917.2

See Notes to Consolidated Financial Statements.

IDEX CORPORATION

CONSOLIDATED STATEMENTS OF INCOME


	For the Year Ended December 31,
	2022		2021		2020
	(In millions except per share amounts)
Net sales	$	3,181.9	$	2,764.8	$	2,351.6
Cost of sales	1,755.0		1,540.3		1,324.2
Gross profit	1,426.9		1,224.5		1,027.4
Selling, general and administrative expenses	652.7		578.2		494.9
Restructuring expenses and asset impairments	22.8		9.3		11.8
Operating income	751.4		637.0		520.7
Gain on sale of business	(34.8)		—		—
Other (income) expense - net	(3.9)		16.2		5.6
Interest expense	40.7		41.0		44.8
Income before income taxes	749.4		579.8		470.3
Provision for income taxes	162.7		130.5		92.5
Net income	586.7		449.3		377.8
Net loss attributable to noncontrolling interest	0.2		0.1		—
Net income attributable to IDEX	$	586.9	$	449.4	$	377.8

Earnings per common share:
Basic earnings per common share attributable to IDEX	$	7.74	$	5.91	$	4.98
Diluted earnings per common share attributable to IDEX	$	7.71	$	5.88	$	4.94

Share data:
Basic weighted average common shares outstanding	75.7		76.0		75.7
Diluted weighted average common shares outstanding	76.0		76.4		76.4

See Notes to Consolidated Financial Statements.

IDEX CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	For the Year Ended December 31,
	2022		2021		2020
	(In millions)
Net income	$	586.7	$	449.3	$	377.8
Other comprehensive (loss) income:
Reclassification adjustments for derivatives, net of tax	—		2.5		4.6
Pension and other postretirement adjustments, net of tax	18.3		17.0		1.4
Cumulative translation adjustment	(74.9)		(75.6)		107.8
Other comprehensive (loss) income	(56.6)		(56.1)		113.8
Comprehensive income	530.1		393.2		491.6
Comprehensive loss attributable to noncontrolling interest	0.2		—		—
Comprehensive income attributable to IDEX	$	530.3	$	393.2	$	491.6

See Notes to Consolidated Financial Statements.

IDEX CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY


	Common Stock and Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss						Treasury Stock		Total Shareholders’ Equity		Noncontrolling Interest		Total Equity
	Cumulative Translation Adjustment		Retirement Benefits Adjustments		Cumulative Unrealized Gain (Loss) on Derivatives
	(Dollars in millions except share and per share amounts)
Balance, December 31, 2019	$	761.3	$	2,615.1	$	(94.4)	$	(25.8)	$	(7.1)	$	(985.9)	$	2,263.2	$	—	$	2,263.2
Net income	—		377.8		—		—		—		—		377.8		—		377.8
Cumulative translation adjustment	—		—		107.8		—		—		—		107.8		—		107.8
Net change in retirement obligations (net of tax of $0.1)	—		—		—		1.4		—		—		1.4		—		1.4
Net change on derivatives designated as cash flow hedges (net of tax of $1.4)	—		—		—		—		4.6		—		4.6		—		4.6
Issuance of 688,563 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $5.0)	—		—		—		—		—		44.6		44.6		—		44.6
Repurchase of 876,423 shares of common stock	—										(110.3)		(110.3)		—		(110.3)
Share-based compensation	14.8		—		—		—		—		—		14.8		—		14.8
Shares surrendered for tax withholding	—		—		—		—		—		(12.3)		(12.3)		—		(12.3)
Cash dividends declared - $2.00 per common share outstanding	—		(151.4)		—		—		—		—		(151.4)		—		(151.4)
Contributions received from joint venture partner	—		—		—		—		—		—		—		0.1		0.1
Balance, December 31, 2020	$	776.1	$	2,841.5	$	13.4	$	(24.4)	$	(2.5)	$	(1,063.9)	$	2,540.2	$	0.1	$	2,540.3
Net income (loss)	—		449.4		—		—		—		—		449.4		(0.1)		449.3
Cumulative translation adjustment	—		—		(75.6)		—		—		—		(75.6)		—		(75.6)
Net change in retirement obligations (net of tax of $5.3)	—		—		—		17.0		—		—		17.0		—		17.0
Net change on derivatives designated as cash flow hedges (net of tax of $0.8)	—		—		—		—		2.5		—		2.5		—		2.5
Issuance of 258,875 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $3.1)	—		—		—		—		—		19.7		19.7		—		19.7
Share-based compensation	20.4		—		—		—		—		—		20.4		—		20.4
Shares surrendered for tax withholding	—		—		—		—		—		(6.1)		(6.1)		—		(6.1)
Cash dividends declared - $2.16 per common share outstanding	—		(164.4)		—		—		—		—		(164.4)		—		(164.4)
Balance, December 31, 2021	$	796.5	$	3,126.5	$	(62.2)	$	(7.4)	$	—	$	(1,050.3)	$	2,803.1	$	—	$	2,803.1
Net income (loss)	—		586.9		—		—		—		—		586.9		(0.2)		586.7
Cumulative translation adjustment	—		—		(74.9)		—		—		—		(74.9)		—		(74.9)
Net change in retirement obligations (net of tax of $6.8)	—		—		—		18.3		—		—		18.3		—		18.3
Issuance of 243,895 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $3.1)	—		—		—		—		—		19.3		19.3		—		19.3
Repurchase of 795,423 shares of common stock	—		—		—		—		—		(148.1)		(148.1)		—		(148.1)
Share-based compensation	21.6		—		—		—		—		—		21.6		—		21.6
Shares surrendered for tax withholding	—		—		—		—		—		(5.2)		(5.2)		—		(5.2)
Cash dividends declared - $2.40 per common share outstanding	—		(181.7)		—		—		—		—		(181.7)		—		(181.7)
Contributions received from joint venture partner	—		—		—		—		—		—		—		0.5		0.5
Balance, December 31, 2022	$	818.1	$	3,531.7	$	(137.1)	$	10.9	$	—	$	(1,184.3)	$	3,039.3	$	0.3	$	3,039.6

See Notes to Consolidated Financial Statements.

IDEX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Year Ended December 31,
	2022		2021		2020
	(In millions)
Cash flows from operating activities
Net income	$	586.7	$	449.3	$	377.8
Adjustments to reconcile net income to net cash provided by operating activities:
Gains on sales of assets	(3.5)		—		—
Gain on sale of business	(34.8)		—		—
Asset impairments	17.4		0.8		3.1
Depreciation	50.7		46.6		41.7
Amortization of intangible assets	69.0		56.4		41.8
Amortization of debt issuance expenses	1.7		1.7		1.7
Share-based compensation expense	21.6		20.4		14.8
Deferred income taxes	(18.5)		(6.1)		8.2
Non-cash interest expense associated with forward starting swaps	—		3.3		6.0
Termination of the U.S. pension plan, net of curtailment	—		8.6		—
Changes in (net of the effect from acquisitions/divestitures and foreign exchange):
Receivables	(71.7)		(49.4)		20.9
Inventories	(72.4)		(46.1)		36.5
Other current assets	(0.5)		9.0		(10.3)
Trade accounts payable	17.6		22.9		2.7
Deferred revenue	(25.0)		19.8		39.0
Accrued expenses	16.6		25.8		(13.7)
Other - net	2.5		2.3		(0.9)
Net cash flows provided by operating activities	557.4		565.3		569.3
Cash flows from investing activities
Purchases of property, plant and equipment	(68.0)		(72.7)		(51.6)
Acquisition of businesses, net of cash acquired	(945.6)		(577.4)		(123.1)
Note receivable from collaborative partner	(3.0)		(4.2)		—
Proceeds from disposal of fixed assets	8.9		—		—
Proceeds from sale of business, net of cash remitted	49.4		—		—
Purchase of marketable securities	—		(45.2)		—
Proceeds from sale of marketable securities	39.7		—		—
Other - net	1.4		1.4		2.1
Net cash flows used in investing activities	(917.2)		(698.1)		(172.6)
Cash flows from financing activities
Borrowings under revolving credit facilities	210.4		—		150.0
Payments under revolving credit facilities	(135.0)		—		(150.0)
Proceeds from issuance of long-term borrowings	200.0		499.4		499.1
Payment of long-term borrowings	—		(350.1)		(300.4)
Payment of make-whole redemption premium	—		(6.7)		(6.8)
Debt issuance costs	(2.3)		(4.6)		(4.7)
Dividends paid	(177.4)		(161.1)		(151.8)
Proceeds from stock option exercises	19.3		19.7		44.6
Repurchases of common stock	(148.1)		—		(110.3)
Shares surrendered for tax withholding	(5.2)		(6.1)		(12.3)
Contributions received from joint venture partner	0.5		—		—
Net cash flows used in financing activities	(37.8)		(9.5)		(42.6)
Effect of exchange rate changes on cash and cash equivalents	(27.6)		(28.2)		39.2
Net (decrease) increase in cash and cash equivalents	(425.2)		(170.5)		393.3
Cash and cash equivalents at beginning of year	855.4		1,025.9		632.6
Cash and cash equivalents at end of year	$	430.2	$	855.4	$	1,025.9
Supplemental cash flow information
Cash paid for:
Interest	$	37.1	$	36.0	$	35.2
Income taxes - net	175.6		118.2		87.2

See Notes to Consolidated Financial Statements.

IDEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Significant Accounting Policies

Business

IDEX is an applied solutions provider specializing in the manufacture of fluid and metering technologies, health and science technologies and fire, safety and other diversified products built to customers’ specifications. IDEX’s products are sold in niche markets across a wide range of industries throughout the world. The Company’s products and services include positive displacement pumps, valves, small volume provers, flow meters, injectors and other fluid-handling pump modules and systems, flow monitoring and other services, precision fluidics, micro-precision components, rotary lobe pumps, roll compaction and drying systems, pneumatic components and sealing solutions, including very high precision, low-flow rate pumping solutions, high performance molded and extruded sealing components, custom mechanical and shaft seals, engineered hygienic mixers and valves, biocompatible medical devices and implantables, air compressors and blowers, optical components and coatings, laboratory and commercial equipment, precision photonic solutions, precision gear and peristaltic pump technologies, firefighting pumps, valves and controls, rescue tools, lifting bags and other components and systems for the fire and rescue industry, engineered stainless steel banding and clamping devices and precision equipment for dispensing, metering and mixing colorants and paints. These products and services are grouped into three reportable segments: Fluid & Metering Technologies (“FMT”), Health & Science Technologies (“HST”) and Fire & Safety/Diversified Products (“FSDP”).

Principles of Consolidation

The Consolidated Financial Statements include the Company and its subsidiaries. All intercompany transactions and accounts have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The principal areas of estimation reflected in the financial statements are revenue recognition, sales returns and allowances, allowance for credit losses, inventory valuation, recoverability of long-lived assets, valuation of goodwill and intangible assets, income taxes, product warranties, contingencies and litigation, insurance-related items, defined benefit retirement plans and purchase accounting related to acquisitions.

Revenue Recognition

The Company accounts for a contract with a customer when it has approval from both parties, the rights and payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. The Company determines the appropriate revenue recognition by analyzing the terms and conditions of the contract. Revenue is recognized when control of products or services is transferred to a customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring the products or providing the services. Control is transferred to customers when performance obligations within a contract are satisfied. A performance obligation is a promise to transfer a distinct product or service to a customer.

For contracts that require complex design, manufacturing and installation activities, certain performance obligations may not be separately identifiable and, therefore, not distinct. As a result, the entire contract is accounted for as a single performance obligation. For contracts that include distinct products or services that are substantially the same and have the same pattern of transfer to the customer over time, they are recognized as a series of distinct products or services. Certain contracts have multiple performance obligations for which the Company allocates the transaction price to each performance obligation using an estimate of the standalone selling price of each distinct product or service and recognizes as revenue when, or as, the performance obligation is satisfied. For product sales, each product sold to a customer generally represents a distinct performance obligation. In such cases, the observable standalone sales are used to determine the standalone selling price. In certain cases, the Company may be required to estimate the standalone selling price using the expected cost plus margin approach, under which it forecasts the expected costs of satisfying a performance obligation and then adds an appropriate margin for the distinct product or service.

The Company’s performance obligations are satisfied at either a point in time or over time as work progresses. Revenue recognized at a point in time is approximately 96% while revenue recognized over time is approximately 4%. For performance obligations satisfied at a point in time, generally revenue recognition occurs with the transfer of control of the asset, which is in line with shipping terms. For performance obligations satisfied over time, revenue is recognized 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 ratably over the contract term for service revenue. The Company defines service revenue as revenue from activities that are not associated with the design, development or manufacture of a product or the delivery of a software license.

When accounting for over-time contracts, the Company uses an input measure to determine the extent of progress towards completion of the performance obligation. The Company believes this measure of progress best depicts the transfer of control to the customer which occurs as the Company incurs costs on its contracts. Incurred cost represents work performed, which corresponds with the transfer of control to the customer. Contract costs include labor, material and overhead. Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred.

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

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

Shipping and Handling Costs

Shipping and handling costs are included in Cost of Sales and are recognized as a period expense during the period in which they are incurred.

Advertising Costs

Advertising costs of $14.9 million, $10.7 million and $9.9 million for 2022, 2021 and 2020, respectively, are expensed as incurred within Selling, general and administrative expenses.

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with an original maturity of 3 months or less to be cash and cash equivalents.

Marketable Securities

From time to time, the Company may hold investments in marketable securities, which are recorded in Other current assets in the Consolidated Balance Sheets. These investments are recorded at fair value, with gains and losses, dividends and interest income included in Other (income) expense - net in the Consolidated Statements of Income. See Note 9 for further discussion on the marketable securities held by the Company.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recorded at face amount less an allowance for credit losses. The allowance is an estimate based on historical collection experience, current and future economic and market conditions and a review of the current status of each customer's trade accounts receivable. Management evaluates the aging of the accounts receivable balances and the financial

condition of its customers and all other forward-looking information that is reasonably available to estimate the amount of accounts receivable that may not be collected in the future and records the appropriate provision.

Inventories

The Company states inventories at the lower of cost or net realizable value. Cost, which includes material, labor and overhead, is determined on a first in, first out basis. The Company makes adjustments to reduce the cost of inventory to its net realizable value, if required, for estimated excess, obsolete, zero usage or impaired balances. Factors influencing these adjustments include changes in market demand, product life cycle and engineering changes.

Impairment of Long-Lived Assets

A long-lived asset is reviewed for impairment if an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below its carrying value, as measured by comparing its net book value to the projected undiscounted future cash flows generated by its use. A long-lived asset impairment exists when the carrying value of the asset exceeds its fair value. The amount and timing of the impairment charge for an asset requires the estimation of future cash flows to determine the fair value of the asset. An impaired asset is recorded at its estimated fair value based on a discounted cash flow analysis. Refer to Note 15 for further discussion on impairment of long-lived assets.

Goodwill and Indefinite-Lived Intangible Assets

Accounting Standards Codification (“ASC”) 350, Goodwill and Other Intangible Assets, requires that the Company review the carrying value of goodwill and indefinite-lived intangible assets annually, or if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company evaluates the recoverability of these assets as of October 31 based on the estimated fair value of each of the 13 reporting units and the indefinite-lived intangible assets. See Note 6 for further discussion on goodwill and indefinite-lived intangible assets.

Borrowing Expenses

Expenses incurred in securing and issuing debt are capitalized and included as a reduction of Long-term borrowings. These amounts are amortized over the life of the related borrowing and the related amortization is included in Interest expense in the Consolidated Statements of Income.

Earnings per Common Share

Diluted earnings per common share (“EPS”) attributable to IDEX is computed by dividing Net income attributable to IDEX by the weighted average number of shares of common stock (basic) plus common stock equivalents outstanding (diluted) during the year. Common stock equivalents consist of stock options, which have been included in the calculation of weighted average shares outstanding using the treasury stock method, restricted stock and performance share units.

ASC 260, Earnings per Share, concludes that all outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends participate in undistributed earnings with common shareholders. If awards are considered participating securities, the Company is required to apply the two-class method of computing basic and diluted earnings per share. The Company has determined that its outstanding shares of restricted stock are participating securities. Accordingly, Diluted EPS attributable to IDEX was computed using the two-class method prescribed by ASC 260.

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


	2022	2021	2020
	(In millions)
Basic weighted average common shares outstanding	75.7	76.0	75.7
Dilutive effect of stock options, restricted stock and performance share units	0.3	0.4	0.7
Diluted weighted average common shares outstanding	76.0	76.4	76.4

Options to purchase approximately 0.5 million, 0.3 million and 0.3 million shares of common stock in 2022, 2021 and 2020, respectively, were not included in the computation of diluted EPS attributable to IDEX because the effect of their inclusion would have been antidilutive.

Share-Based Compensation

The Company accounts for share-based payments in accordance with ASC 718, Compensation-Stock Compensation. Accordingly, the Company expenses the fair value of the awards made under its share-based compensation plans. That cost is recognized in the Consolidated Financial Statements over the requisite service period of the grants. See Note 16 for further discussion on share-based compensation.

Depreciation and Amortization

Property and equipment are stated at cost, with depreciation and amortization provided using the straight-line method over the following estimated useful lives:


Land improvements			8 to 12 years
Buildings and improvements			8 to 30 years
Machinery, equipment and other			3 to 12 years
Office and transportation equipment			2 to 10 years

Certain identifiable intangible assets are amortized over their estimated useful lives using the straight-line method. The estimated useful lives used in the computation of amortization of identifiable intangible assets are as follows:


Patents			5 to 20 years
Trade names			5 to 20 years
Customer relationships			5 to 20 years
Unpatented technology			7 to 20 years
Software			5 years

Research and Development Expenditures

Costs associated with engineering activities, including research and development, are expensed in the period incurred and are included in Cost of sales.

Total engineering expenses, which include research and development as well as application and support engineering, were $95.4 million, $82.9 million and $82.3 million in 2022, 2021 and 2020, respectively. Research and development expenses, which include costs associated with developing new products and major improvements to existing products, were $61.4 million, $50.1 million and $48.2 million in 2022, 2021 and 2020, respectively.

Foreign Currency Translation and Transaction

The functional currency of substantially all operations outside the United States is the respective local currency. Accordingly, those foreign currency balance sheet accounts have been translated using the exchange rates in effect as of the balance sheet date and the income statement amounts have been translated using the average monthly exchange rates for the year. Translation adjustments from year to year have been reported in Accumulated other comprehensive loss in the Consolidated Balance Sheets. Foreign currency transaction gains and losses from transactions denominated in a currency other than the functional currency of the subsidiary involved are reported within Other (income) expense - net in the Consolidated Statements of Income. Net (gain) loss for the years ended December 31, 2022, 2021 and 2020 was $(0.8) million, $1.1 million and $3.0 million, respectively.

Income Taxes

Income tax expense includes U.S., state, local and international income taxes. Deferred tax assets and liabilities are recognized for the tax consequences of temporary differences between the financial reporting and the tax bases of existing assets and liabilities and for loss carryforwards. The tax rate used to determine the deferred tax assets and liabilities is the enacted tax rate for the year and the manner in which the differences are expected to reverse. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. See Note 13 for further discussion on income taxes.

Concentration of Credit Risk

The Company is not dependent on a single customer as its largest customer accounted for less than 3% of net sales for all years presented.

Recently Adopted Accounting Standards

In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-10, Government Assistance (ASC 832): Disclosures by Business Entities about Government Assistance, which requires entities to provide certain annual disclosures when they (1) have received government assistance and (2) use a grant or contribution accounting model by analogy to other accounting guidance. The Company adopted this standard on a prospective basis for the annual period beginning January 1, 2022. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

Recently Issued Accounting Standards

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which adds contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with revenue recognition guidance. ASU 2021-08 is effective for annual periods beginning after December 15, 2022 and interim periods therein. Early adoption is permitted. Entities should apply the ASU’s provisions prospectively to business combinations occurring on or after the effective date of the amendments. The adoption of this standard is not expected to have a material impact on the Company’s Consolidated Financial Statements.

2. Acquisitions and Divestitures

All of the Company’s acquisitions of businesses have been accounted for under ASC 805, Business Combinations. Accordingly, the assets and liabilities of the acquired companies, after adjustments to reflect the fair values assigned to the assets and liabilities, have been included in the Company’s Consolidated Financial Statements from their respective dates of acquisition. The results of operations of Flow Management Devices, LLC (“Flow MD”) (acquired February 28, 2020), Qualtek Manufacturing, Inc. (“Qualtek”) (acquired November 23, 2020), ABEL Pumps, L.P. and certain of its affiliates (“ABEL”) (acquired March 10, 2021), Airtech Group, Inc., US Valve Corporation and related entities (“Airtech”) (acquired June 14, 2021), Nexsight, LLC and its businesses Envirosight, WinCan, MyTana and Pipeline Renewal Technologies (“Nexsight”) (acquired February 28, 2022), KZ CO. (“KZValve”) (acquired May 2, 2022) and Muon B.V. and its subsidiaries (“Muon Group”) (acquired November 18, 2022) have been included in the Company’s Consolidated Financial Statements since the respective dates of acquisition. The results of operations of Knight have been included in the Company’s Consolidated Financial Statements through the date of disposition on September 9, 2022. Supplemental pro forma information has not been provided as the acquisitions and divestiture did not have a material impact on the Company’s Consolidated Financial Statements individually or in the aggregate.

2022 Acquisitions

Nexsight

On February 28, 2022, the Company acquired Nexsight in a partial stock and asset acquisition. Nexsight complements and creates synergies with the Company’s existing iPEK and ADS business units that design and create sewer crawlers, inspection and monitoring systems and software applications that allow teams to identify, anticipate and correct wastewater system issues remotely. Headquartered in Randolph, New Jersey, Nexsight operates in the Company’s Water reporting unit within the FMT segment. Nexsight was acquired for cash consideration of $112.5 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $56.5 million and $49.8 million, respectively. The goodwill is partially deductible for tax purposes.

The Company made a preliminary allocation of the purchase price for the Nexsight acquisition as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy. As the Company continues to obtain additional information about these assets and liabilities, and continues to integrate the newly acquired business, the Company will refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company will continue to make required adjustments to the purchase price allocation prior to the completion of the measurement period.

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


(In millions)	Total
Current assets, net of cash acquired	$	16.6
Property, plant and equipment	2.0
Goodwill	56.5
Intangible assets	49.8
Other noncurrent assets	4.4
Total assets acquired	129.3
Current liabilities	(11.2)
Deferred income taxes	(1.8)
Other noncurrent liabilities	(3.8)
Net assets acquired	$	112.5

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

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


(In millions, except weighted average life)	Total		Weighted Average Life
Trade names	$	13.5	15
Customer relationships	31.5		10
Software	4.8		5
Acquired intangible assets	$	49.8

KZValve

On May 2, 2022, the Company acquired KZValve in an asset acquisition. KZValve is a leading manufacturer of electric valves and controllers used primarily in agricultural applications. KZValve augments and expands IDEX’s agricultural portfolio, complementing Banjo’s current fluid management solutions for these applications. Headquartered in Greenwood, Nebraska, KZValve operates in the Company’s Agriculture reporting unit within the FMT segment. KZValve was acquired for cash consideration of $120.1 million. The entire purchase was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $56.4 million and $52.0 million, respectively. The goodwill is deductible for tax purposes.

The Company made a preliminary allocation of the purchase price for the KZValve acquisition as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy. As the Company continues to obtain additional information about these assets and liabilities, and continues to integrate the newly acquired business, the Company will refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company will continue to make required adjustments to the purchase price allocation prior to the completion of the measurement period.

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


(In millions)	Total
Current assets, net of cash acquired	9.7
Property, plant and equipment	1.8
Goodwill	56.4
Intangible assets	52.0
Deferred income taxes	0.2
Other noncurrent assets	1.0
Total assets acquired	121.1
Current liabilities	(1.0)
Net assets acquired	$	120.1

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

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


(In millions, except weighted average life)	Total		Weighted Average Life
Trade names	$	7.5	15
Customer relationships	36.0		13
Unpatented technology	8.5		10
Acquired intangible assets	$	52.0

Muon Group

On November 18, 2022, the Company acquired the stock of Muon Group. Muon Group manufactures highly precise flow paths in a variety of materials that enable the movement of various liquids and gases in critical applications for medical, semiconductor, food processing, digital printing and filtration technologies. Muon Group maintains operations in Hapert, the Netherlands; Eerbeek, the Netherlands; Wijchen, the Netherlands; Dorset in the United Kingdom and Pune, India and operates in the Company’s Scientific Fluidics & Optics reporting unit within the HST segment. Muon Group was acquired for cash consideration of $713.0 million. The purchase price was funded with $342.6 million of cash on hand, $170.4 million of proceeds from the Company's Revolving Facility and $200.0 million of proceeds from the Company's Term Facility. Goodwill and intangible assets recognized as part of this transaction were $391.1 million and $319.1 million, respectively. The goodwill is not deductible for tax purposes.

The Company made a preliminary allocation of the purchase price for the Muon Group acquisition as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy. As the Company continues to obtain additional information about these assets and liabilities, including intangible asset appraisals, and continues to integrate the newly acquired business, the Company will refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company will continue to make required adjustments to the purchase price allocation prior to the completion of the measurement period.

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


(In millions)	Total
Current assets, net of cash acquired	$	53.0
Property, plant and equipment	61.6
Goodwill	391.1
Intangible assets	319.1
Other noncurrent assets	7.4
Total assets acquired	832.2
Current liabilities	(25.9)
Deferred income taxes	(83.9)
Other noncurrent liabilities	(9.4)
Net assets acquired	$	713.0

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


(In millions, except weighted average life)	Total		Weighted Average Life
Trade names	$	38.3	15
Customer relationships	212.4		13
Unpatented technology	68.4		11
Acquired intangible assets	$	319.1

The Company incurred $6.8 million of acquisition-related costs in 2022. These costs were recorded in Selling, general and administrative expenses and were related to completed transactions, pending transactions and potential transactions, including transactions that ultimately were not completed. The Company also recorded $0.1 million, $0.3 million, and $8.1 million of fair value inventory step-up charges associated with the completed 2022 acquisitions of Nexsight, KZValve and Muon Group, respectively, in Cost of sales for the year ended December 31, 2022.

2021 Acquisitions

ABEL

On March 10, 2021, the Company acquired the stock of ABEL. ABEL designs and manufactures highly engineered reciprocating positive displacement pumps for a variety of end markets, including mining, marine, power, water, wastewater and other general industries. Headquartered in Büchen, Germany, with sales and service locations in Madrid, Spain, and subsequent to the acquisition, with operations in Mansfield, Ohio, ABEL operates in the Company’s Pumps reporting unit within the FMT segment. ABEL was acquired for cash consideration of $106.3 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $42.7 million and $46.0 million, respectively. The goodwill is not deductible for tax purposes.

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

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


(In millions)	Total
Current assets, net of cash acquired	$	18.1
Property, plant and equipment	4.0
Goodwill	42.7
Intangible assets	46.0
Deferred income taxes	2.6
Other noncurrent assets	0.1
Total assets acquired	113.5
Current liabilities	(7.1)
Other noncurrent liabilities	(0.1)
Net assets acquired	$	106.3

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


(In millions, except weighted average life)	Total		Weighted Average Life
Trade names	$	9.0	15
Customer relationships	30.0		13
Unpatented technology	7.0		11
Acquired intangible assets	$	46.0

Airtech

On June 14, 2021, the Company acquired the stock of Airtech. Airtech designs and manufactures a wide range of highly-engineered pressure technology products, including vacuum pumps, regenerative blowers, compressor systems and valves for a variety of end markets, including alternative energy, food processing, medical, packaging and transportation. Headquartered in Rutherford, New Jersey, with primary manufacturing operations in Werneck, Germany and Shenzhen, China, Airtech operates in the Company’s Performance Pneumatic Technologies reporting unit within the HST segment. Airtech was acquired for cash consideration of $471.0 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $268.5 million and $202.3 million, respectively. The goodwill is not deductible for tax purposes.

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

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


	Total
Current assets, net of cash acquired	$	45.3
Property, plant and equipment	4.8
Goodwill	268.5
Intangible assets	202.3
Other noncurrent assets	10.2
Total assets acquired	531.1
Current liabilities	(11.8)
Deferred income taxes	(39.9)
Other noncurrent liabilities	(8.4)
Net assets acquired	$	471.0

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


	Total		Weighted Average Life
Trade names	$	15.4	15
Customer relationships	162.9		13
Unpatented technology	24.0		11
Acquired intangible assets	$	202.3

The Company incurred $6.5 million of acquisition-related costs in 2021. These costs were recorded in Selling, general and administrative expenses and were related to completed transactions, pending transactions and potential transactions, including transactions that ultimately were not completed. The Company also recorded $2.5 million and $9.1 million of fair value inventory step-up charges associated with the completed 2021 acquisitions of ABEL and Airtech, respectively, in Cost of sales for the year ended December 31, 2021.

2020 Acquisitions

Flow MD

On February 28, 2020, the Company acquired the membership interests of Flow MD, a privately held provider of flow measurement systems that ensure custody transfer accuracy in the oil and gas industry. Flow MD engineers and manufactures small volume provers. Headquartered in Phoenix, Arizona, with operations in Houston, Texas and Pittsburgh, Pennsylvania, Flow MD operates in the Company’s Energy reporting unit within the FMT segment. Flow MD was acquired for cash consideration of $121.2 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $60.0 million and $53.0 million, respectively. The goodwill is deductible for tax purposes.

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

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


	Total
Current assets, net of cash acquired	$	32.9
Property, plant and equipment	4.2
Goodwill	60.0
Intangible assets	53.0
Deferred income taxes	2.5
Other noncurrent assets	1.3
Total assets acquired	153.9
Current liabilities	(32.3)
Other noncurrent liabilities	(0.4)
Net assets acquired	$	121.2

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


	Total		Weighted Average Life
Trade names	$	6.0	15
Customer relationships	31.5		10
Unpatented technology	15.5		20
Acquired intangible assets	$	53.0

Qualtek

On November 23, 2020, the Company acquired Qualtek, a manufacturer of high quality specialty metal components and parts by providing vertically integrated tool and die, metal stamping and metal finishing services. Headquartered in Colorado Springs, Colorado, Qualtek operates in the BAND-IT reporting unit within the FSDP segment. Qualtek was acquired for cash consideration of $1.9 million. The entire purchase price was funded with cash on hand. Goodwill recognized as part of this transaction was $1.1 million. The goodwill recorded for the acquisition reflects the strategic fit, revenue and earnings growth potential of this business. The goodwill is deductible for tax purposes.

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

The Company incurred $4.3 million of acquisition-related costs in 2020. These costs were recorded in Selling, general and administrative expenses and were related to completed transactions, pending transactions and potential transactions, including transactions that ultimately were not completed. The Company also recorded $4.1 million and $0.1 million of fair value inventory step-up charges associated with the completed 2020 acquisitions of Flow MD and Qualtek, respectively, in Cost of sales for the year ended December 31, 2020.

Divestitures

The Company periodically reviews its operations for businesses which may no longer be aligned with its strategic objectives and its focus on core business and customers.

On September 9, 2022, the Company completed the sale of Knight for proceeds of $49.4 million, net of cash remitted, resulting in a pre-tax gain on the sale of $34.8 million, which was recorded to Gain on sale of business in the Consolidated Statements of Income. The Company recorded $5.5 million of income tax expense associated with this transaction as Provision for income taxes in the Consolidated Statements of Income through the date of disposition during the year ended December 31, 2022. The results of Knight were reported within the FMT segment. The Company concluded that this divestiture did not meet the criteria for reporting the results of Knight as a discontinued operation.

3. Collaborative Investments

On May 12, 2020, a subsidiary of IDEX entered into a joint venture agreement with a third party to form a limited liability company (the “Joint Venture”) that manufactures and sells high performance elastomer seals for the oil and gas industry to customers within the Kingdom of Saudi Arabia as well as exports these high performance elastomer seals outside of the Kingdom of Saudi Arabia. The Joint Venture is headquartered in Dammam, Saudi Arabia and operates in the Company’s Sealing Solutions reporting unit within the HST segment. During the year ended December 31, 2020, the Company contributed $0.1 million for 55% of the share capital while the third party partner contributed $0.1 million for 45% of the share capital. During the year ended December 31, 2021, the Company contributed an additional $0.6 million and during the year ended December 31, 2022, the third party partner contributed an additional $0.5 million. The Joint Venture has incurred start-up expenses and began sales in July 2022. Since IDEX controls the entity, IDEX has consolidated the Joint Venture and recorded a Noncontrolling interest in its Consolidated Financial Statements.

On June 29, 2021, a subsidiary of IDEX funded a $4.2 million convertible promissory note to a start-up company that provides communication technology to improve individual performance and team coordination for firefighters’ responses. The investment aligns with the FSDP segment’s strategic plan to reduce response time and greatly increase life-safety outcomes and is an extension of FSDP’s smart and connected products. The note bears paid-in-kind interest at a rate of 5% per annum and is secured by the Company’s interest in the intellectual property of the start-up company. Unless earlier converted, the principal amount outstanding and the related accrued interest are due upon the earliest of (a) June 28, 2024, (b) a change in control or (c) when declared due and payable by the Company upon an event of default. On December 22, 2022, the subsidiary of IDEX funded an additional $3.0 million promissory note, which bears paid-in-kind interest at a rate of 5% per annum and is secured by the Company’s interest in the intellectual property of the start-up company. The principal amount outstanding and the related accrued interest are due upon the earliest of (a) December 21, 2025, (b) a change in control or (c) when declared due and payable by the Company upon an event of default.

The notes are included in Other noncurrent assets on the Company’s Consolidated Balance Sheets. In addition, the Company recorded $0.3 million and $0.1 million of accrued interest in Other noncurrent assets on the Company’s Consolidated Balance Sheets for the years ended December 31, 2022 and 2021, respectively. The Company measures the allowance for credit losses under the current expected credit loss model. As of December 31, 2022 and 2021, no allowance for credit losses was recorded.

4. Balance Sheet Components


	December 31,
	2022		2021
	(In millions)
RECEIVABLES
Customers	$	431.3	$	354.9
Other	19.5		8.7
Total	450.8		363.6
Less allowance for credit losses	8.0		7.2
Total receivables - net	$	442.8	$	356.4
INVENTORIES
Raw materials and components parts	$	301.2	$	229.4
Work in process	54.3		47.4
Finished goods	115.4		93.6
Total inventories	$	470.9	$	370.4
PROPERTY, PLANT AND EQUIPMENT
Land and improvements	$	35.2	$	39.1
Buildings and improvements	214.2		197.9
Machinery, equipment and other	492.4		467.8
Office and transportation equipment	100.6		96.7
Construction in progress	56.4		30.5
Total	898.8		832.0
Less accumulated depreciation and amortization	516.7		504.7
Total property, plant and equipment - net	$	382.1	$	327.3
ACCRUED EXPENSES
Payroll and related items	$	102.7	$	91.5
Management incentive compensation	26.4		25.0
Income taxes payable	30.2		17.9
Insurance	11.2		11.0
Warranty	8.1		7.6
Deferred revenue	44.7		49.0
Lease liability	21.6		17.6
Restructuring	1.4		2.8
Accrued interest	5.5		3.6
Pension and retiree medical obligations	3.3		3.5
Other	34.0		30.3
Total accrued expenses	$	289.1	$	259.8
OTHER NONCURRENT LIABILITIES
Pension and retiree medical obligations	$	55.1	$	82.2
Transition tax payable	9.1		14.1
Deferred revenue	15.0		32.2
Lease liability	96.6		93.4
Other	20.0		25.5
Total other noncurrent liabilities	$	195.8	$	247.4

The valuation and qualifying account activity for the years ended December 31, 2022 and 2021 is as follows:


	2022		2021
	(In millions)
ALLOWANCE FOR CREDIT LOSSES
Beginning balance January 1	$	7.2	$	6.1
Charged to costs and expenses, net of recoveries	2.2		1.5
Utilization	(1.2)		(0.9)
Other adjustments, including acquisitions and currency translation	(0.2)		0.5
Ending balance December 31	$	8.0	$	7.2

5. Revenue

Disaggregation of Revenue

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

Revenue by reporting unit for the years ended December 31, 2022, 2021 and 2020 was as follows:


	For the Year Ended December 31,
	2022		2021		2020
	(In millions)
Pumps	$	396.5	$	345.1	$	265.3
Water	307.8		255.3		225.3
Energy	191.3		169.0		200.0
Agriculture	152.8		107.4		87.1
Valves	118.9		121.9		118.6
Intersegment elimination	(1.1)		(0.7)		(0.9)
Fluid & Metering Technologies	1,166.2		998.0		895.4
Scientific Fluidics & Optics(1)	639.0		508.0		415.8
Sealing Solutions	266.0		264.2		207.6
Performance Pneumatic Technologies	257.6		182.2		122.9
Material Processing Technologies	138.1		134.5		120.0
Micropump	38.5		32.9		29.7
Intersegment elimination	(2.4)		(2.8)		(2.6)
Health & Science Technologies	1,336.8		1,119.0		893.4
Fire & Safety	400.1		377.5		376.3
Dispensing	167.5		169.6		98.5
BAND-IT	111.6		100.8		88.1
Intersegment elimination	(0.3)		(0.1)		(0.1)
Fire & Safety/Diversified Products	678.9		647.8		562.8
Total net sales	$	3,181.9	$	2,764.8	$	2,351.6

(1) The year ended December 31, 2022 includes the acceleration of $17.9 million of previously deferred revenue related to a customer’s decision to discontinue further investment in commercializing its COVID-19 testing application. See Note 15 for further detail.

Revenue by geographical region for the years ended December 31, 2022, 2021 and 2020 was as follows:


	For the Year Ended December 31, 2022
	FMT		HST		FSDP		IDEX
	(In millions)
U.S.(1)	$	660.8	$	646.9	$	343.3	$	1,651.0
North America, excluding U.S.	71.5		25.8		35.3		132.6
Europe(1)	194.6		379.7		160.9		735.2
Asia	157.8		261.3		104.2		523.3
Other (2)	82.6		25.5		35.5		143.6
Intersegment elimination	(1.1)		(2.4)		(0.3)		(3.8)
Total net sales	$	1,166.2	$	1,336.8	$	678.9	$	3,181.9


	For the Year Ended December 31, 2021
	FMT		HST		FSDP		IDEX
	(In millions)
U.S.	$	532.9	$	489.7	$	317.0	$	1,339.6
North America, excluding U.S.	61.6		23.7		28.5		113.8
Europe	197.2		341.0		161.5		699.7
Asia	143.7		241.8		110.0		495.5
Other (2)	63.3		25.6		30.9		119.8
Intersegment elimination	(0.7)		(2.8)		(0.1)		(3.6)
Total net sales	$	998.0	$	1,119.0	$	647.8	$	2,764.8


	For the Year Ended December 31, 2020
	FMT		HST		FSDP		IDEX
	(In millions)
U.S.	$	505.8	$	387.6	$	269.9	$	1,163.3
North America, excluding U.S.	52.8		21.3		23.2		97.3
Europe	174.9		249.8		149.2		573.9
Asia	109.1		221.2		94.2		424.5
Other (2)	53.7		16.1		26.4		96.2
Intersegment elimination	(0.9)		(2.6)		(0.1)		(3.6)
Total net sales	$	895.4	$	893.4	$	562.8	$	2,351.6

(1) HST revenue includes the acceleration of $17.9 million of previously deferred revenue related to a customer’s decision to discontinue further investment in commercializing its COVID-19 testing application, of which $9.5 million was recognized in the U.S. and $8.4 million was recognized in Europe in the year ended December 31, 2022. See Note 15 for further detail.

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

Performance Obligations

The Company’s performance obligations are satisfied either at a point in time or over time as work progresses. Revenue from products and services transferred to customers at a point in time approximated 96% of total revenues in the year ended December 31, 2022 and 95% of total revenues in each of the years ended December 31, 2021 and 2020. Revenue from products and services transferred to customers over time approximated 4% of total revenues in the year ended December 31, 2022 and 5% of total revenues in each of the years ended December 31, 2021 and 2020.

Contract Balances

The timing of revenue recognition, billings and cash collections can result in customer receivables, advance payments or billings in excess of revenue recognized. Customer receivables include both amounts billed and currently due from customers as well as unbilled amounts (contract assets) and are included in Receivables - net on the Consolidated Balance Sheets. Amounts are billed in accordance with contractual terms or as work progresses. Unbilled amounts arise when the timing of billing differs from the timing of revenue recognized, such as when contract provisions require specific milestones to be met before a customer can be billed. Unbilled amounts primarily relate to performance obligations satisfied over time when the cost-to-cost method is utilized and the revenue recognized exceeds the amount billed to the customer as there is not yet a right to invoice in accordance with contractual terms. Unbilled amounts are recorded as a contract asset when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract.

The composition of customer receivables was as follows:


	December 31, 2022		December 31, 2021
	(In millions)
Billed receivables	$	421.3	$	344.0
Unbilled receivables	10.0		10.9
Total customer receivables	$	431.3	$	354.9

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

The composition of deferred revenue was as follows:


	December 31, 2022		December 31, 2021
	(In millions)
Deferred revenue - current	$	44.7	$	49.0
Deferred revenue - noncurrent	15.0		32.2
Total deferred revenue(1)	$	59.7	$	81.2

(1) The balance as of December 31, 2022 has been reduced by the acceleration of previously deferred revenue of $17.9 million related to a customer’s decision to discontinue further investment in commercializing its COVID-19 testing application. See Note 15 for further detail.

6. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for 2022 and 2021, by reportable business segment, were as follows:


	FMT		HST		FSDP		Total
	(In millions)
Goodwill	$	670.4	$	1,012.5	$	413.3	$	2,096.2
Accumulated goodwill impairment losses	(20.7)		(149.8)		(30.1)		(200.6)
Balance at January 1, 2021	649.7		862.7		383.2		1,895.6
Foreign currency translation	(10.7)		(15.7)		(11.0)		(37.4)
Acquisitions	42.4		267.6		—		310.0
Disposition of businesses	—		(0.1)		—		(0.1)
Acquisition adjustments	(0.4)		—		—		(0.4)
Balance at December 31, 2021	681.0		1,114.5		372.2		2,167.7
Foreign currency translation	(8.4)		(11.5)		(9.3)		(29.2)
Acquisitions	112.9		391.1		—		504.0
Disposition of businesses	(5.6)		—		—		(5.6)
Acquisition adjustments	0.3		0.9		—		1.2
Balance at December 31, 2022	$	780.2	$	1,495.0	$	362.9	$	2,638.1

Goodwill represents the purchase price in excess of the net amount assigned to the assets acquired and liabilities assumed and was tested for impairment at each of the Company’s 13 reporting units as of October 31, 2022, the Company’s annual impairment test date. In assessing the fair value of the reporting units, the Company considers both the market approach and the income approach. Under the market approach, the fair value of the reporting unit is determined by the respective trailing 12 month EBITDA and the forward looking 2023 EBITDA (50% each), based on multiples of comparable public companies. The market approach is dependent on a number of significant management assumptions including forecasted EBITDA and selected market multiples. Under the income approach, the fair value of the reporting unit is determined based on the present value of estimated future cash flows. The income approach is dependent on a number of significant management assumptions including estimates of operating results, capital expenditures, net working capital requirements, long-term growth rates and discount rates. Weighting was equally attributed to both the market and the income approaches (50% each) in arriving at the fair value of the reporting units. In 2022 and 2021, there were no events or circumstances that would have required an interim impairment test.

The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset at December 31, 2022 and 2021:


	At December 31, 2022							At December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net		Weighted Average Life	Gross Carrying Amount		Accumulated Amortization		Net
			(In millions)							(In millions)
Amortized intangible assets:
Patents	$	2.9	$	(1.8)	$	1.1	12	$	3.2	$	(2.0)	$	1.2
Trade names	186.5		(71.4)		115.1		15	140.9		(72.4)		68.5
Customer relationships	772.2		(184.9)		587.3		13	495.9		(144.2)		351.7
Unpatented technology	207.1		(57.8)		149.3		12	143.8		(58.8)		85.0
Software	4.8		(0.7)		4.1		5	—		—		—
Total amortized intangible assets	1,173.5		(316.6)		856.9			783.8		(277.4)		506.4
Indefinite-lived intangible assets:
Banjo trade name	62.1		—		62.1			62.1		—		62.1
Akron Brass trade name	28.8		—		28.8			28.8		—		28.8
Total intangible assets	$	1,264.4	$	(316.6)	$	947.8		$	874.7	$	(277.4)	$	597.3

The Banjo trade name and the Akron Brass trade name are indefinite-lived intangible assets that were also tested for impairment as of October 31, 2022, the Company’s annual impairment test date. These indefinite-lived intangible assets are tested for impairment on an annual basis in accordance with ASC 350 or more frequently if events or changes in circumstances indicate that the assets might be impaired. The Company uses the relief-from-royalty method, a form of the income approach, to determine the fair value of these trade names. The relief-from-royalty method is dependent on a number of significant management assumptions, including estimates of revenues, royalty rates and discount rates. In 2022 and 2021, there were no events or circumstances that would have required an interim impairment test.

Amortization of intangible assets was $69.0 million, $56.4 million and $41.8 million in 2022, 2021 and 2020, respectively. Based on the intangible asset balances as of December 31, 2022, amortization expense is expected to approximate $91.2 million in 2023, $86.7 million in 2024, $85.3 million in 2025, $83.6 million in 2026 and $79.8 million in 2027.

7. Borrowings

Borrowings at December 31, 2022 and 2021 consisted of the following:


	2022		2021
	(In millions)
3.20% Senior Notes, due June 2023(1)	$	100.0	$	100.0
3.37% Senior Notes, due June 2025	100.0		100.0
3.00% Senior Notes, due May 2030	500.0		500.0
2.625% Senior Notes, due June 2031	500.0		500.0
$800.0 million Revolving Credit Facility, due November 2027	77.7		—
$200.0 million Term Facility, due November 2027	200.0		—
Other borrowings	0.1		0.1
Total borrowings	1,477.8		1,200.1
Less current portion	—		—
Less deferred debt issuance costs	7.9		8.4
Less unaccreted debt discount	1.2		1.4
Long-term borrowings	$	1,468.7	$	1,190.3

(1)As of December 31, 2022, the $100.0 million 3.20% Senior Notes, due in June 2023, have not been classified as Short-term borrowings on the Consolidated Balance Sheets as the Company has the ability and intent to either refinance or repay these Notes using the available borrowing capacity of the Revolving Facility, due November 2027. As a result, the 3.20% Senior Notes remain classified as Long-term borrowings on the Consolidated Balance Sheets as of December 31, 2022.

Revolving Credit Facility and Term Facility

On November 1, 2022, the Company amended and restated that certain five-year $800 million Credit Agreement, dated as of May 31, 2019 that was due to expire in May 2024 (the “Original Credit Agreement” and, as amended and restated, the “Credit Agreement”) along with certain of its subsidiaries, as borrowers (the “Borrowers”), Bank of America, N.A., as administrative agent, swing line lender and an issuer of letters of credit, with other agents party thereto. The Credit Agreement consists of a revolving credit facility (the “Revolving Facility”) in an aggregate principal amount of $800 million and a term credit facility (the “Term Facility”) available to the Company in an aggregate principal amount of $200 million, both of which have a final maturity date of November 1, 2027. The maturity date of the Revolving Facility may be extended under certain conditions for an additional one-year term. Up to $100 million of the Revolving Facility is available for the issuance of letters of credit. Additionally, up to $50 million of the Revolving Facility is available to the Company for swing line loans, available on a same-day basis.

Proceeds of the Revolving Facility are available for use by the Borrowers for working capital and other general corporate purposes, including refinancing existing debt of the Company and its subsidiaries. The Company may request increases in the lending commitments under the Credit Agreement, but the aggregate lending commitments pursuant to such increases may not exceed $400 million. The Company has the right, subject to certain conditions set forth in the Credit Agreement, to designate certain foreign subsidiaries of the Company as borrowers under the Credit Agreement. In connection with any such designation, the Company is required to guarantee the obligations of any such subsidiaries under the Credit Agreement. Proceeds from the Credit Agreement were used by the Company to pay a portion of the consideration for the acquisition of Muon Group.

Borrowings under the Credit Agreement bear interest, at either an alternate base rate or Term SOFR rate (or appropriate alternative currency reference rates) plus, in each case, an applicable margin. Such applicable margin is based on the better of the Company’s senior, unsecured, long-term debt rating or the Company’s applicable leverage ratio and can range from 0.00% to 1.275%. Interest is payable (a) in the case of base rate loans, quarterly, and (b) in the case of Term SOFR rate loans, on the last day of the applicable interest period selected, or every three months from the effective date of such interest period for interest periods exceeding three months.

The Credit Agreement gives the Company the option to enter into a future environmental, social and governance amendment by which pricing may be adjusted pursuant to the Company’s performance measured against certain key performance indicators agreed by the Company and BofA Securities, Inc., as sustainability coordinator.

The Credit Agreement requires payment to the lenders of a facility fee based upon the amount of the lenders’ commitments under the credit facility from time to time, equal to the applicable interest rate times the actual daily amount of the Revolving Facility. Voluntary prepayments of any loans and voluntary reductions of the unutilized portion of the commitments under the credit facility are permissible without penalty, subject to break funding payments and minimum notice and minimum reduction amount requirements.

The Credit Agreement contains customary affirmative and negative covenants for such senior unsecured credit agreements. There are two key financial covenants that the Company is required to maintain in connection with the Credit Agreement and the Senior Notes, excluding the 3.00% Senior Notes and the 2.625% Senior Notes which have no financial covenants, a minimum interest coverage ratio of 3.0 to 1 and a maximum leverage ratio of 3.50 to 1, which is the ratio of the Company’s consolidated total debt to its consolidated earnings before interest, income taxes, depreciation and amortization (“EBITDA”), both of which are tested quarterly and in the case of the leverage ratio, there is an option to increase the ratio to 4.00 for 12 months in connection with certain acquisitions. At December 31, 2022, the Company was in compliance with each financial covenant under the Credit Agreement and the Senior Notes, excluding the 3.00% Senior Notes and the 2.625% Senior Notes which have no financial covenants. While there are no financial covenants relating to the 3.00% Senior Notes and the 2.625% Senior Notes, they are subject to cross-default provisions. The negative covenants include restrictions on the Company’s ability to grant liens, enter into transactions resulting in fundamental changes (such as mergers or sales of all or substantially all of the assets of the Company), make certain subsidiary dividends or distributions, engage in materially different lines of businesses and allow subsidiaries to incur certain additional debt.

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

At December 31, 2022, there was $77.7 million outstanding under the Revolving Facility with an interest rate of 3.32% and $7.9 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility of approximately $714.4 million. In addition, there was $200.0 million outstanding under the Term Facility with an interest rate of 5.83%.

Issuance of 2.625% Senior Notes in 2021

On May 28, 2021, the Company completed a public offering of $500.0 million in aggregate principal amount of 2.625% Senior Notes due June 2031 (the “2.625% Senior Notes”). The net proceeds from the offering were approximately $494.7 million, after deducting the issuance discount of $0.6 million, the underwriting commission of $3.3 million and offering expenses of $1.4 million. The net proceeds were used to redeem and repay the $350.0 million aggregate principal amount outstanding of its 4.20% Senior Notes due December 15, 2021 (the “4.20% Senior Notes”) and a $6.7 million make-whole redemption premium, with the remaining balance used for general corporate purposes. The 2.625% Senior Notes bear interest at a rate of 2.625% per annum, which is payable semi-annually in arrears on June 15 and December 15 of each year. The 2.625% Senior Notes mature on June 15, 2031. The 2.625% Senior Notes were issued under an Indenture, dated as of December 6, 2010 (the “Base Indenture”), between the Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”), as supplemented by the Fourth Supplemental Indenture, dated as of May 28, 2021 (the “Supplemental Indenture” and, together with the Base Indenture and other supplements thereto, the “Indenture”), between the Company and the Trustee.

The Company may redeem all or a portion of the 2.625% Senior Notes at any time prior to maturity at the redemption prices set forth in the Indenture. The Indenture and the 2.625% Senior Notes contain covenants that limit the Company’s ability to, among other things, incur certain liens, enter into certain sale and leaseback transactions and enter into certain mergers, consolidations and transfers of substantially all of the Company’s assets. The terms of the 2.625% Senior Notes also require the Company to make an offer to repurchase the 2.625% Senior Notes upon a change of control triggering event (as defined in the Indenture) at a price equal to 101% of the principal amount plus accrued and unpaid interest, if any. The Indenture also

provides for customary events of default, which include nonpayment, breach of covenants or warranties in the Indenture and certain events of bankruptcy, insolvency or reorganization. Generally, if an event of default occurs, the Trustee or holders of at least 25% of the then outstanding 2.625% Senior Notes may declare the principal amount of all of the 2.625% Senior Notes to be due and payable immediately.

On May 17, 2021, the Company provided notice of its election to redeem early, on June 16, 2021, the $350.0 million aggregate principal amount outstanding of its 4.20% Senior Notes at a redemption price of $350.0 million plus a make-whole redemption premium of $6.7 million using proceeds from the Company’s 2.625% Senior Notes. In addition, the Company recognized the remaining $1.3 million of the pre-tax amount included in Accumulated other comprehensive loss in Shareholders’ equity related to the interest rate exchange agreement associated with the 4.20% Senior Notes and wrote off the remaining $0.1 million of deferred issuance costs and $0.1 million of the debt issuance discount associated with the 4.20% Senior Notes as well as $0.4 million of deferred taxes for a total loss on early debt redemption of $8.6 million which was recorded within Other (income) expense - net in the Consolidated Statements of Income.

Issuance of 3.00% Senior Notes in 2020

On April 29, 2020, the Company completed a public offering of $500.0 million in aggregate principal amount of 3.00% Senior Notes due May 2030 (the “3.00% Senior Notes”). The net proceeds from the offering were approximately $494.4 million, after deducting the issuance discount of $0.9 million, the underwriting commission of $3.3 million and offering expenses of $1.4 million. The net proceeds were used to redeem and repay the $300.0 million aggregate principal amount outstanding of its 4.50% Senior Notes due December 15, 2020 (the “4.50% Senior Notes”) and the related accrued interest and a make-whole redemption premium, with the remaining balance used for general corporate purposes. The 3.00% Senior Notes bear interest at a rate of 3.00% per annum, which is payable semi-annually in arrears on May 1 and November 1 of each year. The 3.00% Senior Notes mature on May 1, 2030.

The Company may redeem all or a portion of the 3.00% Senior Notes at any time prior to maturity at the redemption prices set forth in the Indenture governing the 3.00% Senior Notes. The Indenture and 3.00% Senior Notes contain covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale-leaseback transactions and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all of the Company’s assets. The terms of the 3.00% Senior Notes also require the Company to make an offer to repurchase the 3.00% Senior Notes upon a change of control triggering event (as defined in the Indenture) at a price equal to 101% of the principal amount plus accrued and unpaid interest, if any. The Indenture also provides for customary events of default, which include nonpayment, breach of covenants in the Indenture and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, the Trustee or holders of at least 25% of the then outstanding 3.00% Senior Notes may declare the principal amount of all of the 3.00% Senior Notes to be due and payable immediately.

On April 27, 2020, the Company provided notice of its election to redeem early, on May 27, 2020, the $300.0 million aggregate principal amount outstanding of its 4.50% Senior Notes at a redemption price of $300.0 million plus a make-whole redemption premium of $6.8 million and accrued and unpaid interest of $6.1 million using proceeds from the Company’s 3.00% Senior Notes. In addition, the Company recognized the remaining $1.4 million of the pre-tax amount included in Accumulated other comprehensive loss in Shareholders’ equity related to the interest rate exchange agreement associated with the 4.50% Senior Notes and wrote off the remaining $0.1 million of deferred issuance costs and $0.1 million of the debt issuance discount associated with the 4.50% Senior Notes for a total loss on early debt redemption of $8.4 million which was recorded within Other (income) expense - net in the Consolidated Statements of Income.

Issuance of 3.20% Senior Notes and 3.37% Senior Notes in 2016

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

The Purchase Agreement contains certain covenants that restrict the Company’s ability to, among other things, transfer or sell assets, incur indebtedness, create liens, transact with affiliates and engage in certain mergers or consolidations or other change of control transactions. In addition, the Company must comply with the leverage ratio and interest coverage ratio described above and the Purchase Agreement also limits the outstanding principal amount of priority debt that may be incurred by the Company to 15% of consolidated assets. The Purchase Agreement provides for customary events of default. In the case of an event of default arising from specified events of bankruptcy or insolvency, all of the outstanding 2016 Private Placement Notes will become due and payable immediately without further action or notice. In the case of payment event of default, any holder of the 2016 Private Placement Notes affected thereby may declare all of the 2016 Private Placement Notes held by it due and payable immediately. In the case of any other event of default, a majority of the holders of the 2016 Private Placement Notes may declare all of the 2016 Private Placement Notes to be due and payable immediately.

Total borrowings at December 31, 2022 have scheduled maturities as follows:


(In millions)
2023	$	100.0
2024	—
2025	100.1
2026	—
2027	277.7
Thereafter	1,000.0
Total borrowings	$	1,477.8

8. Derivative Instruments

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

The effective portion of gains or losses on interest rate exchange agreements is reported in Accumulated other comprehensive loss in Shareholders’ equity and reclassified into net income in the same period or periods in which the hedged transaction affects net income. The remaining gain or loss in excess of the cumulative change in the present value of future cash flows or the hedged item, if any, is recognized in net income during the period of change. See Note 17 for the amount of loss reclassified into net income for interest rate contracts for the years ended December 31, 2021 and 2020. As of December 31, 2022, the Company did not have any interest rate contracts outstanding.

In 2010 and 2011, the Company entered into two separate forward starting interest rate exchange agreements in anticipation of the issuance of the 4.50% Senior Notes and the 4.20% Senior Notes. The Company cash settled these two interest rate contracts in 2010 and 2011 for a total of $68.9 million, which was being amortized into interest expense over the 10 year terms of the respective debt instruments. In conjunction with the early redemption of the 4.50% Senior Notes on May 27, 2020, the Company accelerated the recognition of the remaining $1.4 million of the pre-tax amount included in Accumulated other comprehensive loss in Shareholders’ equity related to the 4.50% Senior Notes and recorded it within Other (income) expense - net in the Consolidated Statements of Income during the year ended December 31, 2020. In conjunction with the early redemption of the 4.20% Senior Notes on June 16, 2021, the Company accelerated the recognition of the remaining $1.3 million of the pre-tax amount included in Accumulated other comprehensive loss in Shareholders’ equity related to the 4.20% Senior Notes and recorded it within Other (income) expense - net in the Consolidated Statements of Income during the year ended December 31, 2021. As of December 31, 2022 and 2021, there was no balance in Accumulated other comprehensive loss related to the cumulative unrealized gain (loss) on derivatives.

The amount of expense reclassified into interest expense for interest rate contracts for the years ended December 31, 2021 and 2020 was $3.3 million and $6.0 million, respectively.

9. Fair Value Measurements

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

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs, other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The following table summarizes the basis used to measure the Company’s financial assets (liabilities) at fair value on a recurring basis in the balance sheets at December 31, 2022 and 2021:


	Basis of Fair Value Measurements
	Balance at December 31, 2022		Level 1		Level 2		Level 3
	(In millions)
Trading securities - mutual funds held in nonqualified SERP(1)	$	7.5	$	7.5	$	—	$	—


	Basis of Fair Value Measurements
	Balance at December 31, 2021		Level 1		Level 2		Level 3
	(In millions)
Trading securities - mutual funds held in nonqualified SERP(1)	$	11.6	$	11.6	$	—	$	—
Available-for-sale securities - equities(2)	45.3		45.3		—		—

(1) The Supplemental Executive Retirement Plan (“SERP”) investment assets are offset by a SERP liability which represents the Company’s obligation to distribute SERP funds to participants.

(2) At December 31, 2021, the securities were included in Other current assets on the Company’s Consolidated Balance Sheets and were available for overnight cash settlement, if necessary, to fund current operations. During the fourth quarter of 2022, the Company sold the securities for €39.9 million (or $39.7 million) which were originally purchased for €40.0 million (or $45.3 million). The proceeds from the sale of these securities were used to contribute cash for the acquisition of Muon Group.

There were no transfers of assets or liabilities between Level 1 and Level 2 in 2022 or 2021.

The carrying values of the Company’s cash and cash equivalents, accounts receivable, marketable securities, accounts payable and accrued expenses approximate fair value because of the short term nature of these instruments. At December 31, 2022 and 2021, the fair value of the outstanding indebtedness described in N o te 7 based on quoted market prices and current market rates for debt with similar credit risk and maturity was approximately $1,328.7 million and $1,219.9 million, respectively, compared to the carrying value of $1,476.6 million and $1,198.7 million, respectively. These fair value measurements are classified as Level 2 within the fair value hierarchy since they are determined based upon significant inputs observable in the market, including interest rates on recent financing transactions to entities with a credit rating similar to the Company’s rating.

10. Leases

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

Certain leases include one or more options to renew. The exercise of lease renewal options is at the Company’s sole discretion. The Company does not include renewal periods in any of the leases’ terms until the renewal is executed as they are generally not reasonably certain of being exercised. The Company does not have any material purchase options.

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

Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 was as follows:


	Balance Sheet Caption	December 31, 2022		December 31, 2021
		(In millions)
Right-of-Use (“ROU”) Assets:
Building ROU assets - net - operating	Other noncurrent assets	$	104.4	$	101.0
Equipment ROU assets - net - operating	Other noncurrent assets	5.6		6.2
Equipment ROU assets - net - financing	Property, plant and equipment - net	6.1		—
Total ROU assets - net		$	116.1	$	107.2
Lease Liabilities:
Current lease liabilities	Accrued expenses	$	21.6	$	17.6
Noncurrent lease liabilities	Other noncurrent liabilities	96.6		93.4
Total lease liabilities		$	118.2	$	111.0

Refer to Note 15 for discussion on impairment of building right-of-use assets.

The components of lease cost for the years ended December 31, 2022, 2021 and 2020 were as follows:


	2022		2021		2020
	(In millions)
Fixed lease cost (1)	$	30.8	$	31.5	$	29.5
Variable lease cost	2.3		2.3		1.9
Total lease expense	$	33.1	$	33.8	$	31.4

(1) Includes short-term leases, which are immaterial.

Supplemental cash flow information related to leases for the years ended December 31, 2022, 2021 and 2020 was as follows:


	2022		2021		2020
	(In millions)
Cash paid for amounts included in the measurement of lease liabilities	$	31.7	$	31.2	$	28.7
Right-of-use assets obtained in exchange for new lease liabilities	19.0		16.0		40.4

Other supplemental information related to leases as of December 31, 2022 and 2021 was as follows:


Lease Term and Discount Rate	December 31, 2022		December 31, 2021
Weighted-average remaining lease term (years):
Operating leases - building and equipment	7.43		8.50
Operating leases - vehicles	2.14		2.34
Financing leases - equipment	2.05		—
Weighted-average discount rate:
Operating leases - building and equipment	3.41	%	3.27	%
Operating leases - vehicles	1.70	%	1.08	%
Financing leases - equipment	4.48	%	—

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

Total lease liabilities at December 31, 2022 have scheduled maturities as follows:


Maturity of Lease Liabilities
	(In millions)
2023	$	24.4
2024	21.7
2025	19.9
2026	15.6
2027	12.7
Thereafter	40.1
Total lease payments	134.4
Less: Imputed interest	(16.2)
Present value of lease liabilities	$	118.2

Total lease liabilities at December 31, 2021 had scheduled maturities as follows:


Maturity of Lease Liabilities
	(In millions)
2022	$	20.1
2023	18.3
2024	15.6
2025	13.3
2026	12.0
Thereafter	48.3
Total lease payments	127.6
Less: Imputed interest	(16.6)
Present value of lease liabilities	$	111.0

11. Commitments and Contingencies

Warranty costs are provided for at the time of sale. The warranty provision is based on historical costs and adjusted for specific known claims. A rollforward of the warranty reserve is as follows:


	2022		2021		2020
	(In millions)
Beginning balance at January 1	$	7.6	$	7.4	$	5.6
Provision for warranties	3.0		3.4		3.0
Claim settlements	(4.1)		(3.8)		(2.7)
Other adjustments, including acquisitions, divestitures and currency translation	1.6		0.6		1.5
Ending balance at December 31	$	8.1	$	7.6	$	7.4

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

12. Share Repurchases

On March 17, 2020, the Company’s Board of Directors approved an increase of $500.0 million in the authorized level of repurchases of common stock. This approval is in addition to the prior repurchase authorizations of the Board of Directors of $300.0 million on December 1, 2015. These authorizations have no expiration date. Repurchases under the program will be funded with future cash flow generation or borrowings available under the Revolving Facility. During 2022, the Company repurchased a total of 795,423 shares at a cost of $148.1 million. There were no share repurchases during 2021. During 2020, the Company repurchased a total of 876,423 shares at a cost of $110.3 million. As of December 31, 2022, the amount of share repurchase authorization remaining was $563.8 million.

At December 31, 2022 and 2021, the Company had 150 million shares of authorized common stock, with a par value of $.01 per share, and five million shares of authorized preferred stock, with a par value of $.01 per share. No preferred stock was outstanding at December 31, 2022 or 2021.

13. Income Taxes

Pretax income for 2022, 2021 and 2020 was taxed in the following jurisdictions:


	2022		2021		2020
	(In millions)
U.S.	$	516.5	$	350.2	$	296.3
Foreign	232.9		229.6		174.0
Total	$	749.4	$	579.8	$	470.3

The provision (benefit) for income taxes for 2022, 2021 and 2020 was as follows:


	2022		2021		2020
	(In millions)
Current
U.S.	$	102.8	$	64.7	$	29.5
State and local	14.5		11.0		4.6
Foreign	63.9		60.9		50.2
Total current	181.2		136.6		84.3
Deferred
U.S.	(12.2)		(4.1)		10.1
State and local	(1.0)		(1.4)		1.5
Foreign	(5.3)		(0.6)		(3.4)
Total deferred	(18.5)		(6.1)		8.2
Total provision for income taxes	$	162.7	$	130.5	$	92.5

Deferred tax assets (liabilities) at December 31, 2022 and 2021 were:


	2022		2021
	(In millions)
Allowances and accruals	$	21.1	$	10.3
Employee and retiree benefit plans	17.8		23.6
Inventories	12.0		11.7
Foreign tax credit and other carryforwards	15.0		11.9
Lease liabilities	26.9		(24.8)
Right of use assets	(25.9)		25.7
Depreciation and amortization	(301.3)		(222.0)
Other	(12.8)		(16.6)
Total gross deferred tax (liabilities)	(247.2)		(180.2)
Valuation allowance	(15.0)		(11.9)
Total deferred tax (liabilities), net of valuation allowances	$	(262.2)	$	(192.1)

The deferred tax assets and liabilities recognized in the Company’s Consolidated Balance Sheets as of December 31, 2022 and 2021 were:


	2022		2021
	(In millions)
Noncurrent deferred tax asset - Other noncurrent assets	$	2.0	$	4.3
Noncurrent deferred tax liabilities - Deferred income taxes	(264.2)		(196.4)
Net deferred tax liabilities	$	(262.2)	$	(192.1)

The Company had prepaid income taxes, recorded within Other current assets on the Consolidated Balance Sheets, of $15.1 million and $9.1 million as of December 31, 2022 and 2021, respectively.

The Provision for income taxes differs from the amount calculated by applying the statutory federal income tax rate to pretax income. The calculated amount and the differences for 2022, 2021 and 2020 are shown in the following table:


	2022				2021				2020
	(In millions)
Pretax income	$	749.4			$	579.8			$	470.3
Provision for income taxes:
Computed amount at statutory rate of 21%	$	157.4	21.0	%	$	121.8	21.0	%	$	98.8	21.0	%
State and local income tax (net of federal tax benefit)	11.4		1.5	%	8.0		1.4	%	5.9		1.3	%
Taxes on non-U.S. earnings-net of foreign tax credits	12.4		1.7	%	9.2		1.6	%	8.4		1.8	%
Global Intangible Low-Taxed Income	2.0		0.3	%	0.4		0.1	%	(2.7)		(0.6	%)
Foreign-Derived Intangible Income Deduction	(11.9)		(1.6	%)	(7.5)		(1.3	%)	(4.9)		(1.0	%)
Share-based payments	(2.6)		(0.4	%)	(3.5)		(0.6	%)	(9.8)		(2.1	%)
Other	(6.0)		(0.8	%)	2.1		0.3	%	(3.2)		(0.7	%)
Total provision for income taxes	$	162.7	21.7	%	$	130.5	22.5	%	$	92.5	19.7	%

The Company has $45.3 million and $40.6 million of permanently reinvested earnings of non-U.S. subsidiaries as of December 31, 2022 and 2021, respectively. No deferred U.S. income taxes have been provided on the $45.3 million of earnings that are considered to be permanently reinvested. The Company does not expect these earnings to incur U.S. taxes when ultimately repatriated other than potentially U.S. federal, state and local taxes on foreign exchange gains or losses recognized on the distribution of such earnings. Such distributions could also be subject to additional foreign withholding and foreign income taxes. The amount of unrecognized deferred income tax liabilities on currently permanently reinvested earnings is estimated to be $6.8 million and $6.1 million as of December 31, 2022 and 2021, respectively.

During the years ended December 31, 2022, 2021 and 2020, the Company repatriated $199.9 million, $116.0 million and $27.0 million of foreign earnings, respectively. These actual distributions resulted in no incremental income tax expense other than tax impacts on foreign exchange gains or losses. These repatriations represent distributions of previously taxed income.

A reconciliation of the beginning and ending amount of unrecognized tax benefits for 2022, 2021 and 2020 is as follows:


	2022		2021		2020
	(In millions)
Beginning balance January 1	$	0.1	$	1.1	$	3.7
Gross increases for tax positions of prior years	—		0.1		—
Gross decreases for tax positions of prior years	—		(0.3)		—
Settlements	—		(0.2)		(2.6)
Lapse of statute of limitations	(0.1)		(0.6)		—
Ending balance December 31	$	—	$	0.1	$	1.1

As of December 31, 2022, the Company has no remaining unrecognized tax benefits that would affect the Company’s effective tax rate. The tax years 2017-2021 remain open to examination by major taxing jurisdictions. Due to the potential federal, state, and foreign examinations, it is reasonably possible that the Company’s gross unrecognized tax benefits balance may change.

As of December 31, 2022, the Company has minimal deferred tax assets on non-U.S. and U.S. state net operating loss carryforwards of $0.1 million and $0.8 million, respectively. The entire balance of net operating losses across jurisdictions, the majority of which relates to acquisitions, is available to be carried forward indefinitely. There is no valuation allowance as it is more-likely-than-not that the net operating losses will be realized.

As of December 31, 2022, the Company has deferred tax assets on non-U.S. capital loss carryforwards of $3.0 million with a full valuation allowance. The non-U.S. capital loss can be carried forward indefinitely.

As of December 31, 2022, the Company has deferred tax assets with a full valuation allowance recorded against foreign tax credit carryforwards for U.S. federal purposes of approximately $11.9 million. The U.S. federal foreign tax credit carryforward will expire between 2029 and 2032.

14. Business Segments and Geographic Information

IDEX has three reportable business segments: FMT, HST and FSDP.

The FMT segment designs, produces and distributes positive displacement pumps, valves, small volume provers, flow meters, injectors and other fluid-handling pump modules and systems and provides flow monitoring and other services for the food, chemical, general industrial, water and wastewater, agriculture and energy industries. FMT 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), energy, chemical processing, agriculture, food and beverage, semiconductor, pulp and paper, automotive/transportation, plastics and resins, electronics and electrical, construction and mining, pharmaceutical and bio-pharmaceutical, machinery and numerous other specialty niche markets.

The HST segment designs, produces and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems, micro-precision components, pneumatic components and sealing solutions, high performance molded and extruded sealing components, custom mechanical and shaft seals, engineered hygienic mixers and valves, biocompatible medical devices and implantables, air compressors and blowers, optical components and coatings, laboratory and commercial equipment, precision photonic solutions and precision gear and peristaltic pump technologies. HST serves a variety of end markets, including food and beverage, life sciences, analytical instruments, pharmaceutical and biopharmaceutical, industrial, semiconductor, digital printing, automotive/transportation, medical/dental, energy, cosmetics, marine, chemical, wastewater and water treatment, research and aerospace/defense markets.

The FSDP segment designs, produces and distributes firefighting pumps, valves and controls, rescue tools, lifting bags and other components and systems for the fire and rescue industry, engineered stainless steel banding and clamping devices used in a variety of industrial and commercial applications in the automotive, energy and industrial markets and precision equipment for dispensing, metering and mixing colorants and paints used in a variety of retail and commercial businesses in the paint and industrial markets around the world.

Information on the Company’s business segments is presented below based on the nature of the products and services offered. The Company uses Adjusted EBITDA as its principal measure of segment performance. Intersegment sales are accounted for at fair value as if the sales were to third parties.

During the fourth quarter of 2022, the Company changed the segment measure of profit and loss used by the Chief Operating Decision Maker ("CODM") in accordance with ASC 280, Segment Reporting, from operating income to Adjusted EBITDA. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, or EBITDA, before fair value inventory step-up charges, restructuring expenses and asset impairments, the impact from the exit of a COVID-19 testing application, the gain on sale of a business, the gains on sales of assets, the impact of the settlement of a corporate transaction indemnity, the loss on early debt redemption and the noncash loss related to the termination of the U.S. pension plan, net of curtailment. The change in segment measure of profit and loss aligns with how the CODM allocates resources and evaluates the performance of the business. It also allows the Company to better assess operating results over time since it excludes items that are not reflective of ongoing operations.


	2022		2021		2020
	(In millions)
NET SALES
Fluid & Metering Technologies
External customers	$	1,166.2	$	998.0	$	895.4
Intersegment sales	1.1		0.7		0.9
Total segment sales	1,167.3		998.7		896.3
Health & Science Technologies
External customers	1,336.8		1,119.0		893.4
Intersegment sales	2.4		2.8		2.6
Total segment sales	1,339.2		1,121.8		896.0
Fire & Safety/Diversified Products
External customers	678.9		647.8		562.8
Intersegment sales	0.3		0.1		0.1
Total segment sales	679.2		647.9		562.9
Intersegment eliminations	(3.8)		(3.6)		(3.6)
Net sales	$	3,181.9	$	2,764.8	$	2,351.6
ADJUSTED EBITDA
Fluid & Metering Technologies	$	374.2	$	297.0	$	271.5
Health & Science Technologies	411.8		355.9		250.9
Fire & Safety/Diversified Products	183.9		185.7		161.5
Segment Adjusted EBITDA	969.9		838.6		683.9
Corporate and other	(85.7)		(73.2)		(61.0)
Adjusted EBITDA	884.2		765.4		622.9
- Interest expense	(40.7)		(41.0)		(44.8)
- Depreciation	(50.7)		(46.6)		(41.7)
- Amortization	(69.0)		(56.4)		(41.8)
- Fair value inventory step-up charges	(8.5)		(11.6)		(4.1)
- Restructuring expenses and asset impairments	(4.5)		(9.3)		(11.8)
- Net impact from the exit of a COVID-19 testing application(1)	1.1		—		—
- Corporate transaction indemnity	—		(3.5)		—
+ Gain on sale of business	34.8		—		—
+ Gain on sales of assets	2.7		—		—
- Loss on early debt redemption	—		(8.6)		(8.4)
- Termination of the U.S. pension plan, net of curtailment	—		(8.6)		—
Income before income taxes	$	749.4	$	579.8	$	470.3

(1) Represents the net impact of the acceleration of previously deferred revenue of $17.9 million and an impairment charge of $16.8 million as a result of a customer’s decision to discontinue further investment in commercializing its COVID-19 testing application. See Note 15 in the Notes to Consolidated Financial Statements for further detail.


	2022		2021		2020
	(In millions)
ASSETS
Fluid & Metering Technologies	$	1,676.9	$	1,458.8	$	1,387.0
Health & Science Technologies	2,931.1		2,138.3		1,576.1
Fire & Safety/Diversified Products	771.8		892.5		891.9
Corporate and other	132.1		427.6		559.4
Total assets	$	5,511.9	$	4,917.2	$	4,414.4
DEPRECIATION AND AMORTIZATION (1)
Fluid & Metering Technologies	$	36.9	$	30.5	$	25.9
Health & Science Technologies	67.3		56.7		41.8
Fire & Safety/Diversified Products	15.0		15.3		15.2
Corporate and other	0.5		0.5		0.6
Total depreciation and amortization	$	119.7	$	103.0	$	83.5
CAPITAL EXPENDITURES
Fluid & Metering Technologies	$	25.3	$	21.0	$	11.9
Health & Science Technologies	32.0		41.5		27.7
Fire & Safety/Diversified Products	10.5		9.5		8.9
Corporate and other	0.2		0.7		3.1
Total capital expenditures	$	68.0	$	72.7	$	51.6

(1) Excludes amortization of debt issuance expenses.

Information about the Company’s long-lived assets in different geographical regions for the years ended December 31, 2022, 2021 and 2020 is shown below.


	2022		2021		2020
	(In millions)
LONG-LIVED ASSETS — PROPERTY, PLANT AND EQUIPMENT
U.S.	$	191.7	$	188.3	$	169.2
North America, excluding U.S.	4.7		5.4		5.0
Europe	136.8		98.9		100.0
Asia	48.8		34.5		24.0
Other(1)	0.1		0.2		0.1
Total long-lived assets - net	$	382.1	$	327.3	$	298.3

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

15. Restructuring Expenses and Asset Impairments

During 2022, 2021 and 2020, the Company incurred restructuring costs to facilitate long-term sustainable growth through cost reduction actions, consisting of employee reductions, facility rationalization and contract termination costs. Restructuring costs include severance costs, exit costs and asset impairments and are included in Restructuring expenses and asset impairments in the Consolidated Statements of Income. Severance costs primarily consist of severance benefits through payroll continuation, COBRA subsidies, outplacement services, conditional separation costs and employer tax liabilities, while exit costs primarily consist of lease exit and contract termination costs.

2022 Initiative

During the year ended December 31, 2022, the restructuring costs incurred by the Company primarily related to asset impairments. In addition, the Company also incurred severance costs related to employee reductions.

In the second quarter of 2020, the Company engaged in the development of a COVID-19 testing application with a customer at one of its businesses in the HST segment. As part of this contract, the customer fully funded the $28.7 million investment needed to complete the development and production of microfluidic cartridges during 2020 and 2021. The costs incurred by the Company were primarily recorded as Property, plant and equipment – net in the Consolidated Balance Sheets and were being depreciated over the expected life of the assets, while the reimbursement was recorded as deferred revenue in the Consolidated Balance Sheets and was being recognized as units were shipped.

In the third quarter of 2022, the Company was informed by the customer of its decision to discontinue further investment in commercializing its COVID-19 testing application. This event was deemed a triggering event, which required an interim impairment test be performed on the property, plant and equipment related to this contract, resulting in an impairment charge of $16.8 million that was recorded as Restructuring expenses and asset impairments in the Consolidated Statements of Income during the year ended December 31, 2022. In addition, the Company accelerated previously deferred revenue of $17.9 million related to units that are no longer expected to be shipped and recorded as Net sales in the Consolidated Statements of Income during the year ended December 31, 2022.

Pre-tax restructuring expenses and asset impairments by segment for the 2022 initiative were as follows:


	Severance Costs		Exit Costs		Asset Impairments		Total
	(In millions)
Fluid & Metering Technologies	$	1.9	$	0.3	$	0.5	$	2.7
Health & Science Technologies	1.2		—		16.8		18.0
Fire & Safety/Diversified Products	1.7		—		0.1		1.8
Corporate/Other	0.3		—		—		0.3
Total restructuring costs	$	5.1	$	0.3	$	17.4	$	22.8

2021 Initiative

During the year ended year ended December 31, 2021, the Company incurred severance costs related to employee reductions. In addition, the Company consolidated certain facilities within the FMT segment which resulted in asset impairments of $0.8 million related to property, plant and equipment that was not relocated to the new locations.

Pre-tax restructuring expenses and asset impairments by segment for the 2021 initiative were as follows:


	Severance Costs		Exit Costs		Asset Impairments		Total
	(In millions)
Fluid & Metering Technologies	$	3.7	$	—	$	0.8	$	4.5
Health & Science Technologies	1.7		—		—		1.7
Fire & Safety/Diversified Products	0.5		—		—		0.5
Corporate/Other	2.6		—		—		2.6
Total restructuring costs	$	8.5	$	—	$	0.8	$	9.3

2020 Initiative

During the year ended December 31, 2020, the Company incurred severance costs related to employee reductions and exit costs related to early lease terminations. In addition, in the fourth quarter of 2020, the Company consolidated certain facilities within the FMT segment, which resulted in an impairment charge of $2.5 million. The Company also relocated its corporate office, which resulted in an impairment charge of $0.6 million.

Pre-tax restructuring expenses and asset impairments by segment for the 2020 initiative were as follows:


	Severance Costs		Exit Costs		Asset Impairments		Total
	(In millions)
Fluid & Metering Technologies	$	2.9	$	0.2	$	2.5	$	5.6
Health & Science Technologies	2.7		—		—		2.7
Fire & Safety/Diversified Products	2.5		—		—		2.5
Corporate/Other	0.4		—		0.6		1.0
Total restructuring costs	$	8.5	$	0.2	$	3.1	$	11.8

Restructuring accruals reflected in Accrued expenses in the Company’s Consolidated Balance Sheets are as follows:


	Restructuring Initiatives
	(In millions)
Balance at January 1, 2021	$	3.9
Restructuring expenses(1)	8.5
Payments, utilization and other	(9.6)
Balance at December 31, 2021	2.8
Restructuring expenses(2)	5.4
Payments, utilization and other	(6.8)
Balance at December 31, 2022	$	1.4

(1) Excludes $0.8 million of asset impairments related to property, plant and equipment.

(2) Excludes $17.4 million of asset impairments related to property, plant and equipment.

16. Share-Based Compensation

The Company maintains two share-based compensation plans for executives, non-employee directors and certain key employees that authorize the granting of stock options, restricted stock, performance share units and other types of awards consistent with the purpose of the plans. The number of shares authorized for issuance under the Company’s plans as of December 31, 2022 totaled 15.6 million, of which 2.0 million shares were available for future issuance.

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

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

Stock Options

Stock options granted under the Company’s plans are generally non-qualified and are granted with an exercise price equal to the market price of the Company’s stock on the date of grant. The fair value of each option grant was estimated on the date of the grant using the Binomial lattice option pricing model (for options granted before March 2021) or the Black Scholes valuation model (for options granted after February 2021). The adoption of the Black Scholes model in 2021 was driven by a review of option exercise history, which more closely aligned with the methodology of the Black Scholes model. Stock options generally vest ratably over four years, with vesting beginning one year from the date of grant, and generally expire 10 years from the date of grant. The service period for certain retiree eligible participants is accelerated.

Weighted average option fair values and assumptions for the periods specified are as follows:


	Years Ended December 31,
	2022	2021	2020
Weighted average fair value of grants	$42.66	$38.88	$34.22
Dividend yield	1.14%	1.01%	1.15%
Volatility	25.23%	23.78%	22.04%
Risk-free interest rate	2.01%	0.12% - 1.54%	1.39% - 1.66%
Expected life (in years)	4.90	5.70	5.80

The assumptions are as follows:

The Company estimated volatility using its historical share price performance over the contractual term of the option (for the Binomial lattice option pricing model) or over the expected life of the option (for the Black Scholes valuation model).
The Company uses historical data to estimate the expected life of the option. The expected life assumption for options granted before March 2021 is an output of the Binomial lattice option pricing model, which incorporates vesting provisions, rate of voluntary exercise and rate of post-vesting termination over the contractual life of the option to define expected employee behavior. The expected life assumption for options granted after March 2021 is based on IDEX’s own exercise and cancellation history, adjusted for current vesting schedules.
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the option (for the Binomial lattice option pricing model) or commensurate with the expected life of the option (for the Black Scholes valuation model). For options granted before March 2021, the Company presents the range of risk-free one-year forward rates, derived from the U.S. treasury yield curve, utilized in the Binomial lattice option pricing model. For options granted after March 2021, the Company presents the spot rate used in the Black Scholes valuation model.
The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the option.

A summary of the Company’s stock option activity as of December 31, 2022, and changes during the year ended December 31, 2022 is presented as follows:


	Shares	Weighted Average Price		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
	(Dollars in millions except weighted average price)
Stock Options
Outstanding at January 1, 2022	1,008,586	$	147.60	6.97	$	89.5
Granted	288,855	190.43
Exercised	(171,061)	112.67
Forfeited/Expired	(110,808)	186.25
Outstanding at December 31, 2022	1,015,572	$	161.45	6.94	$	67.9
Vested and expected to vest at December 31, 2022	982,705	$	160.46	6.88	$	66.7
Exercisable at December 31, 2022	489,720	$	134.20	5.41	$	46.1

The intrinsic value for stock options outstanding and exercisable is defined as the difference between the market value of the Company’s common stock as of the end of the period and the grant price. The total intrinsic value of options exercised in 2022, 2021 and 2020 was $17.4 million, $21.4 million and $41.3 million, respectively. In 2022, 2021 and 2020, cash received from options exercised was $19.3 million, $19.7 million and $44.6 million, respectively, while the actual tax benefit realized for the tax deductions from stock options exercised totaled $3.7 million, $4.5 million and $8.7 million, respectively.

Total compensation cost for stock options is recorded in the Consolidated Statements of Income as follows:


	Years Ended December 31,
	2022		2021		2020
	(In millions)
Cost of goods sold	$	0.5	$	0.5	$	0.5
Selling, general and administrative expenses	8.7		8.0		7.6
Total expense before income taxes	9.2		8.5		8.1
Income tax benefit	(0.8)		(0.8)		(0.9)
Total expense after income taxes	$	8.4	$	7.7	$	7.2

As of December 31, 2022, there was $8.8 million of total unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 1.3 years.

Restricted Stock

Restricted stock awards generally cliff vest after three years for employees and non-employee directors. The service period for certain retiree eligible participants is accelerated. Unvested restricted stock carries dividend and voting rights and the sale of the shares is restricted prior to the date of vesting. Dividends are paid on restricted stock awards and their fair value is equal to the market price of the Company’s stock at the date of the grant. A summary of the Company’s restricted stock activity as of December 31, 2022, and changes during the year ended December 31, 2022 is as follows:


Restricted Stock	Shares	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2022	107,475	$	169.58
Granted	56,200	192.72
Vested	(30,786)	157.63
Forfeited	(28,507)	191.95
Unvested at December 31, 2022	104,382	$	179.45

Total compensation cost for restricted stock is recorded in the Consolidated Statements of Income as follows:


	Years Ended December 31,
	2022		2021		2020
	(In millions)
Cost of goods sold	$	0.3	$	0.4	$	0.3
Selling, general and administrative expenses	6.4		5.1		3.9
Total expense before income taxes	6.7		5.5		4.2
Income tax benefit	(1.2)		(1.1)		(0.9)
Total expense after income taxes	$	5.5	$	4.4	$	3.3

As of December 31, 2022, there was $5.7 million of total unrecognized compensation cost related to restricted stock that is expected to be recognized over a weighted-average period of 1.0 year.

Cash-Settled Restricted Stock

The Company also maintains a cash-settled share based compensation plan for certain employees. Cash-settled restricted stock awards generally cliff vest after three years. The service period for certain retiree eligible participants is accelerated. Cash-settled restricted stock awards are recorded at fair value on a quarterly basis using the market price of the Company’s stock on the last day of the quarter. Dividend equivalents are paid on certain cash-settled restricted stock awards. A summary of the Company’s unvested cash-settled restricted stock activity as of December 31, 2022, and changes during the year ended December 31, 2022 is as follows:


Cash-Settled Restricted Stock	Shares	Weighted-Average Fair Value
Unvested at January 1, 2022	57,949	$	236.32
Granted	27,375	196.20
Vested	(20,676)	190.67
Forfeited	(7,292)	228.33
Unvested at December 31, 2022	57,356	$	228.33

Total compensation cost for cash-settled restricted stock is recorded in the Consolidated Statements of Income as follows:


	Years Ended December 31,
	2022		2021		2020
	(In millions)
Cost of goods sold	$	0.1	$	0.7	$	0.9
Selling, general and administrative expenses	2.6		4.3		3.7
Total expense before income taxes	2.7		5.0		4.6
Income tax benefit	(0.2)		(0.4)		(0.4)
Total expense after income taxes	$	2.5	$	4.6	$	4.2

At December 31, 2022 and 2021, the Company has accrued $4.8 million and $5.9 million, respectively, for cash-settled restricted stock in Accrued expenses in the Consolidated Balance Sheets and has accrued $2.8 million and $2.8 million, respectively, for cash-settled restricted stock in Other noncurrent liabilities in the Consolidated Balance Sheets.

Performance Share Units

Beginning in 2013, the Company granted performance share units to selected key employees that may be earned based on IDEX total shareholder return over the three-year period following the date of grant. Performance share units are expected to be made annually and are paid out at the end of a three-year period based on the Company’s performance. Performance is measured by determining the percentile rank of the total shareholder return of IDEX common stock in relation to the total shareholder return of companies in the S&P 500 Index for the three-year period following the date of grant. The payment of awards following the three-year award period will be based on performance achieved in accordance with the scale set forth in

the plan agreement and may range from 0 percent to 250 percent of the initial grant. A target payout of 100 percent is earned if total shareholder return is equal to the 50th percentile of the peer group. Performance share units earn dividend equivalents for the award period, which will be paid to participants with the award payout at the end of the period based on the actual number of performance share units that are earned. Payments made at the end of the award period will be in the form of stock for performance share units and will be in cash for dividend equivalents. The Company’s performance share units are market condition awards, have been assessed at fair value on the date of grant using a Monte Carlo simulation model and are expensed ratably over the three-year term of the awards. The Company granted 31,370, 29,020 and 42,690 performance share units in 2022, 2021 and 2020, respectively.

Weighted average performance share unit fair values and assumptions for the period specified are as follows:


	Years Ended December 31,
	2022	2021	2020
Weighted average fair value of grants	$235.54	$247.49	$224.14
Dividend yield	—%	—%	—%
Volatility	28.09%	28.60%	19.50%
Risk-free interest rate	1.73%	0.33%	1.30%
Expected life (in years)	2.93	2.93	2.94

The assumptions are as follows:

The Company estimated volatility using its historical share price performance over the remaining performance period as of the grant date.
The Company uses a Monte Carlo simulation model that uses an expected life commensurate with the performance period. As a result, the expected life of the performance share units was assumed to be the period from the grant date to the end of the performance period.
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with a term commensurate with the remaining performance period.
Total Shareholder Return is determined assuming that dividends are reinvested in the issuing entity over the performance period, which is mathematically equivalent to utilizing a 0% dividend yield.

A summary of the Company’s performance share unit activity as of December 31, 2022, and changes during the year ended December 31, 2022, is as follows:


Performance Share Units	Shares	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2022	52,025	$	236.75
Granted	31,370	235.54
Vested(1)	—	—
Forfeited	(12,480)	235.88
Unvested at December 31, 2022	70,915	$	236.66

(1) The performance period for the 2020 grants ended as of January 31, 2023. The 2020 grants achieved a 173% payout factor and the Company issued 31,334 common shares in February 2023 for awards that vested in 2023.

Total compensation cost for performance share units is recorded in the Consolidated Statements of Income as follows:


	Years Ended December 31,
	2022		2021		2020
	(In millions)
Cost of goods sold	$	—	$	—	$	—
Selling, general and administrative expenses	6.0		6.4		2.6
Total expense before income taxes	6.0		6.4		2.6
Income tax benefit	(0.2)		(0.3)		(0.2)
Total expense after income taxes	$	5.8	$	6.1	$	2.4

As of December 31, 2022, there was $3.5 million of total unrecognized compensation cost related to performance share units that is expected to be recognized over a weighted-average period of 0.9 years.

17. Other Comprehensive (Loss) Income

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


	For the Year Ended December 31, 2022						For the Year Ended December 31, 2021
	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
	(In millions)
Cumulative translation adjustment	$	(74.9)	$	—	$	(74.9)	$	(75.6)	$	—	$	(75.6)
Pension and other postretirement adjustments
Net gain (loss) arising during the year	24.6		(6.7)		17.9		12.0		(2.9)		9.1
Amortization and settlement loss, net of curtailment gain	0.5		(0.1)		0.4		10.3		(2.4)		7.9
Pension and other postretirement adjustments	25.1		(6.8)		18.3		22.3		(5.3)		17.0
Reclassification adjustments for derivatives	—		—		—		3.3		(0.8)		2.5
Total other comprehensive loss	$	(49.8)	$	(6.8)	$	(56.6)	$	(50.0)	$	(6.1)	$	(56.1)


	For the Year Ended December 31, 2020
	Pre-tax		Tax		Net of tax
	(In millions)
Cumulative translation adjustment	$	107.8	$	—	$	107.8
Pension and other postretirement adjustments
Net (loss) gain arising during the year	(1.5)		0.1		(1.4)
Amortization/recognition of settlement loss	2.9		(0.1)		2.8
Pension and other postretirement adjustments	1.4		—		1.4
Reclassification adjustments for derivatives	6.0		(1.4)		4.6
Total other comprehensive income (loss)	$	115.2	$	(1.4)	$	113.8

The amounts reclassified from Accumulated Other Comprehensive (Loss) Income to Net Income are summarized as follows:


	For the Year Ended December 31,
	2022		2021		2020		Income Statement Caption
	(In millions)
Pension and other postretirement plans:
Amortization of service cost	$	0.5	$	1.8	$	2.9	Other (income) expense - net
Settlement loss recognized			10.5		—		Other (income) expense - net
Curtailment gain recognized			(2.0)		—		Other (income) expense - net
Total before tax	0.5		10.3		2.9
Provision for income taxes	(0.1)		(2.4)		(0.1)
Total net of tax	$	0.4	$	7.9	$	2.8
Derivatives:
Reclassification adjustments	$	—	$	3.3	$	6.0	Interest expense, Other (income) expense - net
Total before tax	—		3.3		6.0
Provision for income taxes	—		(0.8)		(1.4)
Total net of tax	$	—	$	2.5	$	4.6

18. Retirement Benefits

The Company sponsors several qualified and nonqualified defined benefit and defined contribution pension plans as well as other post-retirement plans for its employees. The Company uses a measurement date of December 31 for its defined benefit pension plans and post-retirement medical plans. The Company employs the measurement date provisions of ASC 715, Compensation-Retirement Benefits, which require the measurement date of plan assets and liabilities to coincide with the sponsor’s year end.

The IDEX Corporation Retirement Plan (“Plan”), a U.S. defined benefit plan, was terminated in May 2020. As a result of the termination, the settlement threshold was reached in early 2020 and the Company recorded a settlement charge of $0.9 million in Other (income) expense - net in the Consolidated Statements of Income for the year ended December 31, 2020. The settlement also triggered the remeasurement of net periodic benefit cost resulting in a reduction of $1.0 million to Other (income) expense - net in the Consolidated Statements of Income for the year ended December 31, 2020 as a result of significant decreases in discount rates and strong asset performance in 2020.

During the year ended December 31, 2021, the Company settled its remaining obligations under the Plan through a combination of lump-sum payments to eligible participants who elected them, and through the purchase of annuities from Legal and General, an A rated third-party insurer. The Company recognized a net loss of $9.7 million, which was recorded within Other (income) expense - net. The net loss consisted of $10.7 million related to previously deferred pension related costs, partially offset by $1.0 million related to an increase in plan assets remaining after the settlement. As of December 31, 2021, the Plan had surplus assets of approximately $10.2 million, representing cash equivalents held in a trust. These plan assets were included in Other current assets on the Company’s Consolidated Balance Sheets. These plan assets were used to fund other retirement benefit plans and were fully depleted as of December 31, 2022.

The following table provides a reconciliation of the changes in the benefit obligations and fair value of plan assets over the two-year period ended December 31, 2022 and a statement of the funded status at December 31 for both years.


	Pension Benefits								Other Benefits
	2022				2021				2022		2021
	U.S.		Non-U.S.		U.S.		Non-U.S.
	(In millions)
CHANGE IN BENEFIT OBLIGATION
Obligation at January 1	$	10.6	$	104.3	$	94.0	$	115.7	$	23.6	$	24.2
Service cost	0.1		1.8		0.1		2.0		0.7		0.7
Interest cost	0.2		1.0		0.3		0.7		0.5		0.4
Plan amendments	—		—		—		(0.5)		—		—
Benefits paid	(0.6)		(0.8)		(3.3)		(3.0)		(1.0)		(0.7)
Actuarial gain	(2.0)		(27.8)		(1.9)		(5.3)		(7.3)		(0.8)
Currency translation	—		(6.1)		—		(6.0)		(0.1)		—
Settlements	—		(0.1)		(78.6)		—		—		—
Curtailments	—		—		—		—		—		(0.2)
Acquisition/Divestiture	—		2.7		—		—		—		—
Other	—		0.7		—		0.7		—		—
Obligation at December 31	$	8.3	$	75.7	$	10.6	$	104.3	$	16.4	$	23.6
CHANGE IN PLAN ASSETS
Fair value of plan assets at January 1	$	17.0	$	46.1	$	100.0	$	42.2	$	—	$	—
Actual return on plan assets	(2.0)		(10.5)		(0.5)		4.2		—		—
Employer contributions	0.4		2.8		0.4		2.9		1.0		0.7
Benefits paid	(0.6)		(0.8)		(3.3)		(3.0)		(1.0)		(0.7)
Currency translation	—		(2.5)		—		(0.9)		—		—
Settlements	—		(0.1)		(78.6)		—		—		—
Acquisition/Divestiture	—		2.0		—		—		—		—
Other	(10.1)		0.8		(1.0)		0.7		—		—
Fair value of plan assets at December 31	$	4.7	$	37.8	$	17.0	$	46.1	$	—	$	—
Funded status at December 31	$	(3.6)	$	(37.9)	$	6.4	$	(58.2)	$	(16.4)	$	(23.6)
COMPONENTS ON THE CONSOLIDATED BALANCE SHEETS
Other current assets	$	—	$	—	$	10.2	$	—	$	—	$	—
Other noncurrent assets	—		0.5		—		0.1		—		—
Current liabilities	(0.7)		(1.5)		(0.8)		(1.5)		(1.1)		(1.2)
Other noncurrent liabilities	(2.9)		(36.9)		(3.0)		(56.8)		(15.3)		(22.4)
Net asset (liability) at December 31	$	(3.6)	$	(37.9)	$	6.4	$	(58.2)	$	(16.4)	$	(23.6)

The pension benefits actuarial gain in 2022 was primarily driven by the increase in the discount rates from 2021 to 2022. The U.S. pension actuarial gain was partially offset by a small experience loss. The non-U.S. pension actuarial gain was partially offset by inflation-related and small experience losses recognized during the year.

The other benefits actuarial gain in 2022 was primarily driven by the increase in the discount rates from 2021 to 2022 with additional gains from updated participant data and claims experience, partially offset by updated trend assumptions for the U.S. plans.

The accumulated benefit obligation (“ABO”) for all defined benefit pension plans was $81.9 million and $110.7 million at December 31, 2022 and 2021, respectively.

The weighted average assumptions used in the measurement of the Company’s benefit obligation at December 31, 2022 and 2021 were as follows:


	U.S. Plans				Non-U.S. Plans				Other Benefits
	2022		2021		2022		2021		2022		2021
Discount rate	5.17	%	2.52	%	3.75	%	1.25	%	5.21	%	2.70	%
Rate of compensation increase	—	%	—	%	2.44	%	2.31	%	—	%	—	%
Cash balance interest credit rate	—	%	—	%	2.42	%	1.00	%	—	%	—	%

The pretax amounts recognized in Accumulated other comprehensive loss on the Consolidated Balance Sheets as of December 31, 2022 and 2021 were as follows:


	Pension Benefits								Other Benefits
	2022				2021				2022		2021
	U.S.		Non-U.S.		U.S.		Non-U.S.
	(In millions)
Prior service cost (credit)	$	0.1	$	(0.5)	$	0.1	$	(0.5)	$	(0.4)	$	(0.5)
Net loss (gain)	1.9		(5.5)		2.1		12.6		(9.9)		(3.0)
Total	$	2.0	$	(6.0)	$	2.2	$	12.1	$	(10.3)	$	(3.5)

The components of the net periodic cost (benefit) for the plans in 2022, 2021 and 2020 are as follows:


	Pension Benefits
	2022				2021				2020
	U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.
	(In millions)
Service cost	$	0.1	$	1.8	$	0.1	$	2.0	$	0.1	$	2.2
Interest cost	0.2		1.0		0.3		0.7		1.3		1.1
Expected return on plan assets	(0.2)		(1.3)		(0.9)		(1.0)		(3.8)		(1.2)
Settlement loss recognized	—		—		10.5		—		0.9		(0.4)
Net amortization	0.3		0.6		0.4		2.1		1.2		1.7
Net periodic cost (benefit)	$	0.4	$	2.1	$	10.4	$	3.8	$	(0.3)	$	3.4


	Other Benefits
	2022		2021		2020
	(In millions)
Service cost	$	0.7	$	0.7	$	0.6
Interest cost	0.5		0.4		0.6
Curtailment gain recognized	—		(2.0)		—
Net amortization	(0.5)		(0.6)		(0.5)
Net periodic cost (benefit)	$	0.7	$	(1.5)	$	0.7

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

The assumptions used in determining the net periodic cost (benefit) were as follows:


	U.S. Plans						Non-U.S. Plans
	2022		2021		2020		2022		2021		2020
Discount rate	2.52	%	2.14	%	Various*		1.25	%	0.95	%	1.33	%
Expected return on plan assets	2.63	%	2.40	%	4.00	%	2.87	%	2.41	%	3.00	%
Rate of compensation increase	—	%	—	%	—	%	2.31	%	2.32	%	2.29	%

*For the IDEX Corporation Retirement Plan, a discount rate of 3.07% was used to determine the net periodic (benefit) cost for the period January 1, 2020 through March 31, 2020, a discount rate of 2.97% was used to determine the net periodic (benefit) cost for the period April 1, 2020 through June 30, 2020, a discount rate of 2.41% was used to determine the net periodic (benefit) cost for the period July 1, 2020 through September 30, 2020 and a discount rate of 2.36% was used to determine the net periodic (benefit) cost for the period October 1, 2020 through December 31, 2020 as a result of the quarterly remeasurements that occurred in conjunction with the termination of the Plan.

For the Pulsafeeder, Inc. Pension Plan for Hourly Employees at Rochester, New York, a discount rate of 3.21% was used to determine the net periodic (benefit) cost for the period January 1, 2020 through June 30, 2020 and a discount rate of 2.62% was used to determine the net periodic (benefit) cost for the period July 1, 2020 through December 31, 2020 as a result of the remeasurement that occurred in conjunction with the ratification of the collective bargaining agreement.


	Other Benefits
	2022		2021		2020
Discount rate	2.70	%	2.20	%	3.09	%
Expected return on plan assets	—	%	—	%	—	%
Rate of compensation increase	—	%	—	%	4.00	%

The pretax change recognized in Accumulated other comprehensive loss on the Consolidated Balance Sheet in 2022 is as follows:


	Pension Benefits				Other Benefits
	U.S.		Non-U.S.
	(In millions)
Net gain (loss) in current year	$	(0.1)	$	16.0	$	7.3
Prior service cost	—		—		—
Amortization of prior service cost (credit)	0.3		(0.1)		(0.1)
Amortization of net loss (gain)	—		0.8		(0.3)
Exchange rate effect on amounts in other comprehensive income	—		1.4		(0.1)
Total	$	0.2	$	18.1	$	6.8

The discount rates for the Company’s plans are derived by matching the plan’s cash flows to a yield curve that provides the equivalent yields on zero-coupon bonds for each maturity. The discount rate selected is the rate that produces the same present value of cash flows.

In selecting the expected rate of return on plan assets, the Company considers the historical returns and expected returns on plan assets. The expected returns are evaluated using asset return class, variance and correlation assumptions based on the plan’s target asset allocation and current market conditions.

Prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10% of the greater of the benefit obligation or the market value of assets are amortized over the average remaining service period of active participants.

Costs of defined contribution plans were $16.1 million, $12.8 million and $12.5 million for 2022, 2021 and 2020, respectively.

The Company, through its subsidiaries, participates in certain multi-employer pension plans covering approximately 216 participants under U.S. collective bargaining agreements. None of these plans are considered individually significant to the Company as contributions to these plans totaled $0.8 million, $1.0 million, and $1.1 million for 2022, 2021 and 2020, respectively.

For measurement purposes, a 5.59% weighted average annual rate of increase in the per capita cost of covered health care benefits was assumed for 2022. The rate was assumed to decrease gradually each year to a rate of 4.00% for 2040, and remain at that level thereafter.

Plan Assets

The Company’s pension plan weighted average asset allocations at December 31, 2022 and 2021, by asset category, were as follows:


	U.S. Plans				Non-U.S. Plans
	2022		2021		2022		2021
Equity securities	9	%	4	%	13	%	18	%
Fixed income securities	84	%	33	%	19	%	22	%
Cash/Commingled Funds/Other (1)	7	%	63	%	68	%	60	%
Total	100	%	100	%	100	%	100	%

The basis used to measure the defined benefit plans’ assets at fair value at December 31, 2022 and 2021 is summarized as follows:


	Basis of Fair Value Measurement
	Outstanding Balances		Level 1		Level 2		Level 3
As of December 31, 2022	(In millions)
Equity
U.S. Large Cap	$	0.2	$	0.2	$	—	$	—
U.S. Small / Mid Cap	2.5		—		2.5		—
International	2.5		0.8		1.7		—
Fixed Income
U.S. Intermediate	1.6		—		1.6		—
U.S. Long Term	3.8		—		3.8		—
U.S. High Yield	0.4		—		0.4		—
International	5.4		0.2		5.2		—
Other Commingled Funds(1)	23.7		—		—		23.7
Cash and Equivalents	1.0		0.4		0.6		—
Other	1.4		—		1.4		—
	$	42.5	$	1.6	$	17.2	$	23.7

(1)Other commingled funds represent pooled institutional investments in non-U.S. plans.


	Basis of Fair Value Measurement
	Outstanding Balances		Level 1		Level 2		Level 3
As of December 31, 2021	(In millions)
Equity
U.S. Large Cap	$	0.3	$	0.3	$	—	$	—
U.S. Small / Mid Cap	4.6		—		4.6		—
International	4.2		1.0		3.2		—
Fixed Income
U.S. Intermediate	1.9		—		1.9		—
U.S. Long Term	5.4		—		5.4		—
U.S. High Yield	0.7		—		0.7		—
International	7.5		0.3		7.2		—
Other Commingled Funds(1)	23.7		—		—		23.7
Cash and Equivalents	12.1		11.0		1.1		—
Other	2.7		—		2.7		—
	$	63.1	$	12.6	$	26.8	$	23.7

(1)Other commingled funds represent pooled institutional investments in non-U.S. plans.

Equities that are valued using quoted prices are valued at the published market prices. Equities in a common collective trust or a registered investment company that are valued using significant other observable inputs are valued at the net asset value (“NAV”) provided by the fund administrator. The NAV is based on the value of the underlying assets owned by the fund minus its liabilities. Fixed income securities that are valued using significant other observable inputs are valued at prices obtained from independent financial service industry-recognized vendors.

Investment Policies and Strategies

The investment objective of the U.S. plan, consistent with prudent standards for preservation of capital and maintenance of liquidity, is to earn the highest possible total rate of return consistent with the plan’s tolerance for risk. The general asset allocation guidelines for plan assets are that “equities” will constitute 10% and “fixed income” obligations, including cash, will constitute 90% of the market value of total fund assets.

The investment objective of the UK plan, consistent with prudent standards for preservation of capital and maintenance of liquidity, is to earn a target return of UK Gilts plus approximately 3.1% per year. The general asset allocation guidelines for plan assets are that “equities” will constitute from 57% to 67% of the market value of total fund assets with a target of 62%, and “fixed income” obligations, including cash, will constitute from 33% to 43% with a target of 38%. The UK Plan also has a framework in place such that if the funding position (which is monitored daily) improves to a certain level, the asset allocation will switch out of equities into fixed income assets in order to lower the level of risk of the investments.

The term “equities” includes common stock, while the term “fixed income” includes obligations with contractual payments and a specific maturity date. Diversification of assets is employed to ensure that adverse performance of one security or security class does not have an undue detrimental impact on the portfolio as a whole. Diversification is interpreted to include diversification by type, characteristic and number of investments as well as by investment style of designated investment fund managers. No restrictions are placed on the selection of individual investments by the investment fund managers. The total fund performance and the performance of the investment fund managers is reviewed on a regular basis using an appointed professional independent advisor. As of December 31, 2022, there were no shares of the Company’s stock held in plan assets.

Cash Flows

The Company expects to contribute approximately $3.9 million to its defined benefit plans and $1.1 million to its other postretirement benefit plans in 2023. The Company also expects to contribute approximately $16.2 million to its defined contribution plan and $12.1 million to its 401(k) savings plan in 2023 using cash on hand.

Estimated Future Benefit Payments

The future estimated benefit payments for the next five years and the five years thereafter are as follows:


Estimated Future Benefits
	(In millions)
2023	$	6.2
2024	6.0
2025	6.0
2026	6.2
2027	6.2
2028 to 2032	30.7
Total Estimated Future Benefit Payments	$	61.3

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