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 Iridian Spectral Technologies and STC Material Solutions from its assessment of internal controls over financial reporting as these acquisitions occurred in 2023 (see Note 2 in the Notes to the Consolidated Financial Statements for further detail). 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 approximately one percent and zero percent, respectively, of the Consolidated Financial Statement amounts as of and for the year ended December 31, 2023. Based on that assessment, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2023.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, 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, 2023, 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, 2023, 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, 2023, of the Company and our report dated February 22, 2024, expressed an unqualified opinion on those financial statements.

As described in Management’s Report on Internal Control over Financial Reporting, management excluded Iridian Spectral Technologies and STC Material Solutions from its assessment of internal control over financial reporting as these acquisitions occurred in the twelve months ended December 31, 2023. The combined total assets and net sales of these acquisitions represented approximately one percent and zero percent, respectively, of the consolidated financial statement amounts as of and for the year ended December 31, 2023. 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 22, 2024

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, 2023 and 2022, the related consolidated statements of income, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, 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, 2023, 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 22, 2024, 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 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 22, 2024

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

IDEX CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)


	For the Year Ended December 31,
	2023		2022		2021
Net sales	$	3,273.9	$	3,181.9	$	2,764.8
Cost of sales	1,827.0		1,755.0		1,540.3
Gross profit	1,446.9		1,426.9		1,224.5
Selling, general and administrative expenses	703.5		652.7		578.2
Restructuring expenses and asset impairments	10.9		22.8		9.3
Operating income	732.5		751.4		637.0
Gain on sale of businesses - net	(84.7)		(34.8)		—
Other expense (income) - net	5.2		(3.9)		16.2
Interest expense	51.7		40.7		41.0
Income before income taxes	760.3		749.4		579.8
Provision for income taxes	164.7		162.7		130.5
Net income	595.6		586.7		449.3
Net loss attributable to noncontrolling interest	0.5		0.2		0.1
Net income attributable to IDEX	$	596.1	$	586.9	$	449.4

Earnings per common share:
Basic earnings per common share attributable to IDEX	$	7.87	$	7.74	$	5.91
Diluted earnings per common share attributable to IDEX	$	7.85	$	7.71	$	5.88

Share data:
Basic weighted average common shares outstanding	75.6		75.7		76.0
Diluted weighted average common shares outstanding	75.9		76.0		76.4

See Notes to Consolidated Financial Statements.

IDEX CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)


	For the Year Ended December 31,
	2023		2022		2021
Net income	$	595.6	$	586.7	$	449.3
Other comprehensive loss:
Reclassification adjustments for derivatives, net of tax	—		—		2.5
Pension and other postretirement adjustments, net of tax	(7.4)		18.3		17.0
Cumulative translation adjustment	87.8		(74.9)		(75.6)
Other comprehensive income (loss)	80.4		(56.6)		(56.1)
Comprehensive income	676.0		530.1		393.2
Comprehensive loss attributable to noncontrolling interest	0.5		0.2		—
Comprehensive income attributable to IDEX	$	676.5	$	530.3	$	393.2

See Notes to Consolidated Financial Statements.

IDEX CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars in millions, except per share amounts)


	As of December 31,
	2023		2022
ASSETS
Current assets
Cash and cash equivalents	$	534.3	$	430.2
Receivables - net	427.8		442.8
Inventories - net	420.8		470.9
Other current assets	63.4		55.4
Total current assets	1,446.3		1,399.3
Property, plant and equipment - net	430.3		382.1
Goodwill	2,838.3		2,638.1
Intangible assets - net	1,011.8		947.8
Other noncurrent assets	138.5		144.6
Total assets	$	5,865.2	$	5,511.9
LIABILITIES AND EQUITY
Current liabilities
Trade accounts payable	$	179.7	$	208.9
Accrued expenses	271.5		289.1
Current portion of long-term borrowings	0.6		—
Dividends payable	48.5		45.6
Total current liabilities	500.3		543.6
Long-term borrowings - net	1,325.1		1,468.7
Deferred income taxes	291.9		264.2
Other noncurrent liabilities	206.7		195.8
Total liabilities	2,324.0		2,472.3
Commitments and contingencies (Note 10)
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: 90,073,413 shares at December 31, 2023 and 90,064,988 shares at December 31, 2022	0.9		0.9
Additional paid-in capital	839.0		817.2
Retained earnings	3,934.3		3,531.7
Treasury stock at cost: 14,344,820 shares at December 31, 2023 and 14,451,032 shares at December 31, 2022	(1,187.0)		(1,184.3)
Accumulated other comprehensive loss	(45.8)		(126.2)
Total shareholders’ equity	3,541.4		3,039.3
Noncontrolling interest	(0.2)		0.3
Total equity	3,541.2		3,039.6
Total liabilities and equity	$	5,865.2	$	5,511.9

See Notes to Consolidated Financial Statements.

IDEX CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in millions except share and per share amounts)


	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
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
Net issuance of 228,567 shares of common stock (net of tax of $3.1)	—		—		—		—		—		13.6		13.6		—		13.6
Share-based compensation	20.4		—		—		—		—		—		20.4		—		20.4
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
Net issuance of 216,946 shares of common stock (net of tax of $3.1)	—		—		—		—		—		14.1		14.1		—		14.1
Repurchase of 795,423 shares of common stock	—		—		—		—		—		(148.1)		(148.1)		—		(148.1)
Share-based compensation	21.6		—		—		—		—		—		21.6		—		21.6
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
Net income (loss)	—		596.1		—		—		—		—		596.1		(0.5)		595.6
Cumulative translation adjustment	—		—		87.8		—		—		—		87.8		—		87.8
Net change in retirement obligations (net of tax of $(2.3))	—		—		—		(7.4)		—		—		(7.4)		—		(7.4)
Net issuance of 230,812 shares of common stock (net of tax of $2.8)	—		—		—		—		—		21.5		21.5		—		21.5
Repurchase of 124,600 shares of common stock	—		—		—		—		—		(24.2)		(24.2)		—		(24.2)
Share-based compensation	21.8		—		—		—		—		—		21.8		—		21.8
Cash dividends declared - $2.56 per common share outstanding	—		(193.5)		—		—		—		—		(193.5)		—		(193.5)
Balance, December 31, 2023	$	839.9	$	3,934.3	$	(49.3)	$	3.5	$	—	$	(1,187.0)	$	3,541.4	$	(0.2)	$	3,541.2

See Notes to Consolidated Financial Statements.

IDEX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)


	For the Year Ended December 31,
	2023		2022		2021
Cash flows from operating activities
Net income	$	595.6	$	586.7	$	449.3
Adjustments to reconcile net income to net cash flows provided by operating activities:
Gain on sale of businesses - net	(84.7)		(34.8)		—
Asset impairments	0.8		17.4		0.8
Credit loss on note receivable from collaborative partner	7.7		—		—
Depreciation	57.2		50.7		46.6
Amortization of intangible assets	94.9		69.0		56.4
Share-based compensation expense	21.8		21.6		20.4
Deferred income taxes	(14.7)		(18.5)		(6.1)
Non-cash interest expense associated with forward starting swaps	—		—		3.3
Termination of the U.S. pension plan, net of curtailment	—		—		8.6
Changes in (net of the effect from acquisitions/divestitures and foreign currency translation):
Receivables - net	20.5		(71.7)		(49.4)
Inventories - net	66.2		(72.4)		(46.1)
Other current assets	(6.5)		(0.5)		9.0
Trade accounts payable	(25.3)		17.6		22.9
Deferred revenue	12.7		(25.0)		19.8
Accrued expenses	(34.8)		16.6		25.8
Other - net	5.3		0.7		4.0
Net cash flows provided by operating activities	716.7		557.4		565.3
Cash flows from investing activities
Capital expenditures	(89.9)		(68.0)		(72.7)
Acquisition of businesses, net of cash acquired	(311.8)		(945.6)		(577.4)
Proceeds from sale of businesses, net of cash remitted	118.6		49.4		—
Purchases of marketable securities	(29.0)		—		(45.2)
Proceeds from sale of marketable securities	24.8		39.7		—
Other - net	3.5		7.3		(2.8)
Net cash flows used in investing activities	(283.8)		(917.2)		(698.1)
Cash flows from financing activities
Borrowings under revolving credit facilities	—		210.4		—
Payments under revolving credit facilities	—		(135.0)		—
Proceeds from issuance of long-term borrowings	100.0		200.0		499.4
Payment of long-term borrowings	(250.0)		—		(350.1)
Payment of make-whole redemption premium	—		—		(6.7)
Cash dividends paid to shareholders	(190.7)		(177.4)		(161.1)
Proceeds from share issuances, net of shares withheld for taxes	21.5		14.1		13.6
Repurchases of common stock	(24.2)		(148.1)		—
Other	(1.3)		(1.8)		(4.6)
Net cash flows used in financing activities	(344.7)		(37.8)		(9.5)
Effect of exchange rate changes on cash and cash equivalents	15.9		(27.6)		(28.2)
Net increase (decrease) in cash and cash equivalents	104.1		(425.2)		(170.5)
Cash and cash equivalents at beginning of year	430.2		855.4		1,025.9
Cash and cash equivalents at end of year	$	534.3	$	430.2	$	855.4
Supplemental cash flow information
Cash paid for:
Interest	$	50.8	$	37.1	$	36.0
Income taxes - net	199.5		175.6		118.2

See Notes to Consolidated Financial Statements.

IDEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

**1.**Significant Accounting Policies

Business

IDEX is an applied solutions provider specializing in the manufacturing 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, powder and liquid processing technologies, 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, 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, or Net sales, is recognized when control of the products or services is transferred to a customer at 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.

The majority of the Company's contracts have a single performance obligation which represents, in most cases, the product being sold to the customer. Some contracts include multiple performance obligations such as a product and related installation, extended warranty, software and/or maintenance services. For contracts with multiple performance obligations, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation.

The Company’s performance obligations are satisfied at either a point in time or over time as work progresses. For performance obligations satisfied at a point in time, revenue is recognized when control transfers to the customer, typically upon shipment. For performance obligations in which the Company transfers control of a product or service over time, revenue is recognized over time as work is performed. Typically, this results when the Company performs services over time or the Company creates a product with no alternative use and has an enforceable right to payment for its performance to date.

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. For product sales, each product sold to a customer generally represents a distinct performance obligation. 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. 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.

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. Revenue is recognized 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. 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.

Contract Assets and Liabilities

The timing of billings and cash collections can result in customer receivables, billings in excess of revenue recognized, advance payments or deposits. 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.

Contract liabilities include advance payments, deposits and billings in excess of revenue recognized and 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.

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 $15.9 million, $14.9 million and $10.7 million for 2023, 2022 and 2021, 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 expense (income) - net in the Consolidated Statements of Income. See Note 8 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. The Company groups and evaluates these long-lived assets for impairment at the lowest level at which individual cash flows can be identified. A long-lived asset impairment exists when the carrying value of the asset group exceeds its fair value. The amount and timing of the impairment charge for an asset group requires the estimation of future cash flows, which are then discounted to determine the fair value of the asset group. An impaired asset group is recorded at its estimated fair value. Refer to Note 14 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 (“ASC 350”), 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 reporting unit 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 - net. 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 common shares outstanding (basic) plus common stock equivalents outstanding (diluted) during the year. Common stock equivalents consist of restricted stock, performance share units and stock options, which have been included in the calculation of weighted average common shares outstanding using the treasury stock method.

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


	2023	2022	2021
	(In millions)
Basic weighted average common shares outstanding	75.6	75.7	76.0
Dilutive effect of restricted stock, performance share units and stock options	0.3	0.3	0.4
Diluted weighted average common shares outstanding	75.9	76.0	76.4

Options to purchase shares of common stock that were not included in the computation of Diluted EPS attributable to IDEX because the effect of their inclusion would have been antidilutive were as follows:


			2023						2022						2021
Antidilutive shares not included in Diluted EPS attributable to IDEX			0.2						0.5						0.3

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 granted 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 15 for further discussion on share-based compensation.

Depreciation and Amortization

Property and equipment are stated at cost, with depreciation 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			15 to 20 years
Customer relationships			5 to 20 years
Unpatented technology			8 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 $107.5 million, $95.4 million and $82.9 million in 2023, 2022 and 2021, respectively. Research and development expenses, which include costs associated with developing new products and major improvements to existing products, were $68.4 million, $61.4 million and $50.1 million in 2023, 2022 and 2021, 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 expense (income) - net in the Consolidated Statements of Income. Net transaction loss (gain) for the years ended December 31, 2023, 2022 and 2021 was $7.3 million, $(0.8) million and $1.1 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 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 12 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 October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. The Company adopted this standard on a prospective basis for the annual period beginning January 1, 2023. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

Recently Issued Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves the disclosures required for reportable segments in the Company’s annual and interim financial

statements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Adoption of this ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on the Company’s Consolidated Financial Statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosures of specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on the Company’s Consolidated Financial Statements and disclosures.

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 Balance Sheets from their respective dates of acquisition. The results of operations of businesses acquired have been included in the Company’s Consolidated Statements of Income since the respective dates of acquisition. The results of operations of divestitures have been included in the Company’s Consolidated Statements of Income through the respective dates of disposition. Supplemental pro forma information has not been provided as the acquisitions did not have a material impact on the Company’s Consolidated Financial Statements individually or in the aggregate. In addition, the divestitures did not represent a strategic shift that had a major effect on operations and financial results and, therefore, did not qualify for presentation as discontinued operations.

2023 Acquisitions

Iridian

On May 19, 2023, the Company acquired Iridian Spectral Technologies (“Iridian”) in a stock acquisition. Iridian is a global leader in designing and manufacturing thin-film, multi-layer optical filters serving the laser communications, telecommunications and life sciences markets and expands the Company’s array of optical technology offerings. Headquartered in Ottawa, Canada, Iridian operates in the Company’s Scientific Fluidics & Optics reporting unit within the HST segment. Iridian was acquired for cash consideration of $109.8 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $52.7 million and $45.6 million, respectively. The goodwill is not deductible for tax purposes.

The Company made a preliminary allocation of the purchase price for the Iridian 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, primarily related to the valuations of 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:


	Total
Current assets, net of cash acquired	$	10.6
Property, plant and equipment	19.9
Goodwill	52.7
Intangible assets	45.6
Other noncurrent assets	5.4
Total assets acquired	134.2
Current liabilities	(1.2)
Deferred income taxes	(18.3)
Other noncurrent liabilities	(4.9)
Net assets acquired(1)	$	109.8

(1) During the fourth quarter of 2023, the Company finalized the net working capital of the assets and liabilities acquired, resulting in a $0.5 million adjustment to reduce the purchase price of the Iridian business.

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:


	Total		Weighted Average Life
Trade names	$	5.2	15
Customer relationships	29.3		12
Unpatented technology	11.1		11
Acquired intangible assets	$	45.6

STC

On December 14, 2023, the Company acquired STC Material Solutions (“STC”) in a stock acquisition. STC specializes in the design and manufacturing of technical ceramics and hermetic sealing products for the most extreme, mission critical applications in the semiconductor, aerospace and defense, industrial technology, medical technology and energy markets. Headquartered in St. Albans, Vermont, with additional operations in Santa Ana, California, STC operates in the Company’s Scientific Fluidics & Optics reporting unit within the HST segment. STC was acquired for cash consideration of $202.0 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $104.0 million and $95.3 million, respectively. The goodwill is not deductible for tax purposes.

The Company made a preliminary allocation of the purchase price for the STC 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, primarily related to the valuations of 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:


	Total
Current assets, net of cash acquired	$	16.7
Property, plant and equipment	12.5
Goodwill	104.0
Intangible assets	95.3
Other noncurrent assets	3.1
Total assets acquired	231.6
Current liabilities	(5.4)
Deferred income taxes	(21.7)
Other noncurrent liabilities	(2.5)
Net assets acquired	$	202.0

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


	Total		Weighted Average Life
Trade names	$	9.3	15
Customer relationships	66.0		15
Unpatented technology	20.0		11
Acquired intangible assets	$	95.3

2022 Acquisitions

Nexsight

On February 28, 2022, the Company acquired Nexsight, LLC and its businesses Envirosight, WinCan, MyTana and Pipeline Renewal Technologies (“Nexsight”) in a partial stock and partial 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 $54.7 million and $49.8 million, respectively. The goodwill is partially deductible for tax purposes.

The Company finalized the 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.

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	$	16.6
Property, plant and equipment	2.0
Goodwill	54.7
Intangible assets	49.8
Other noncurrent assets	4.3
Total assets acquired	127.4
Current liabilities	(9.2)
Deferred income taxes	(1.9)
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:


	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 KZ CO. (“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 finalized the 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.

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	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

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


	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 B.V. and its subsidiaries (“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, England 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 (as defined below) and $200.0 million of proceeds from the Company's Term Facility (as defined below). Goodwill and intangible assets recognized as part of this transaction were $396.6 million and $319.1 million, respectively. The goodwill is not deductible for tax purposes.

The Company finalized the 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.

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	$	51.4
Property, plant and equipment	57.6
Goodwill	396.6
Intangible assets	319.1
Other noncurrent assets	9.6
Total assets acquired	834.3
Current liabilities	(26.8)
Deferred income taxes	(83.5)
Other noncurrent liabilities	(11.0)
Net assets acquired	$	713.0

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


	Total		Weighted Average Life
Trade names	$	38.3	15
Customer relationships	212.4		13
Unpatented technology	68.4		11
Acquired intangible assets	$	319.1

2021 Acquisitions

ABEL

On March 10, 2021, the Company acquired the stock of ABEL Pumps, L.P. and certain of its affiliates (“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:


	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:


	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 Group, Inc., US Valve Corporation and related entities (“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

Acquisition-Related Costs

The Company incurred acquisition costs related to completed, pending and potential acquisitions, including those that ultimately were not completed. These costs were recorded in Selling, general and administrative expenses. The Company also incurred fair value inventory step-up charges associated with completed acquisitions. These costs were recorded in Cost of sales. A summary of the acquisition costs and the fair value inventory step-up charges recorded in the years ended December 31, 2023, 2022 and 2021 are presented in the following table:


	2023		2022		2021
Acquisition costs	$	7.3	$	6.8	$	6.5
Fair value inventory step-up charges	$	1.6	$	8.5	$	11.6

Divestitures

The Company periodically reviews its businesses relative to its core business and customers and evaluates if refinements may be needed. As such, from time to time, the Company may sell various businesses or assets for a variety of reasons. Any resulting gain or loss recognized due to divestitures is recorded within Gain on sale of businesses - net in the Consolidated Statements of Income.

On December 29, 2023, the Company completed the sale of Novotema, SpA (“Novotema”) for proceeds of $8.3 million, net of cash remitted, resulting in a loss on the sale of $9.1 million. There was no income tax impact associated with this transaction in the Consolidated Statements of Income due to the participation exemption of its consolidated group. The results of Novotema were reported in the Sealing Solutions reporting unit within the HST segment.

On August 3, 2023, the Company completed the sale of Micropump, Inc. (“Micropump”) for proceeds of $110.3 million, net of cash remitted, resulting in a pre-tax gain on the sale of $93.8 million. The divestiture resulted in $22.7 million of income tax expense in the Consolidated Statements of Income during the year ended December 31, 2023. Micropump was its own reporting unit and its results were reported within the HST segment.

On September 9, 2022, the Company completed the sale of Knight LLC (“Knight”) for proceeds of $49.4 million, net of cash remitted, resulting in a pre-tax gain on the sale of $34.8 million. The divestiture resulted in $5.5 million of income tax expense in the Consolidated Statements of Income during the year ended December 31, 2022. The results of Knight were reported in the Water reporting unit within the FMT segment.

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 maintains operations in Dammam, Saudi Arabia and operates in the Company’s Sealing Solutions reporting unit within the HST segment. The Company has contributed $0.7 million for 55% of the share capital while the third-party partner has contributed $0.6 million for 45% of the share capital. The Joint Venture has been selling since July 2022. Since IDEX controls the entity, IDEX has consolidated the Joint Venture and recorded a Noncontrolling interest in its Consolidated Financial Statements.

During 2021 and 2022, a subsidiary of IDEX funded a total of $7.2 million in promissory notes as an investment in a start-up company that provides communication technology to improve individual performance and team coordination for firefighters’ responses, which aligns with IDEX’s FSDP segment’s strategic plan. On a quarterly basis, the Company evaluates whether an allowance for credit losses is required for these promissory notes and measures the allowance using the current expected credit loss model. During the second quarter of 2023, IDEX determined that its investment may no longer be recoverable. As a result, IDEX recorded a credit loss of $7.7 million in Other expense (income) - net in the Consolidated Statements of Income and a reserve in Other noncurrent assets on the Consolidated Balance Sheets for the full amount of the principal and accrued interest outstanding. During the fourth quarter of 2023, IDEX converted the promissory notes to equity, resulting in a cost method investment with zero value.

4. Balance Sheet Components


	December 31,
	2023		2022
RECEIVABLES - NET
Customers	$	419.0	$	431.3
Other	16.3		19.5
Total	435.3		450.8
Less allowance for credit losses	7.5		8.0
Total receivables - net	$	427.8	$	442.8
INVENTORIES - NET
Raw materials and components parts	$	268.1	$	301.2
Work in process	44.5		54.3
Finished goods	108.2		115.4
Total inventories - net	$	420.8	$	470.9
PROPERTY, PLANT AND EQUIPMENT - NET
Land and improvements	$	30.8	$	35.2
Buildings and improvements	234.7		214.2
Machinery, equipment and other	551.0		492.4
Office and transportation equipment	106.0		100.6
Construction in progress	53.5		56.4
Total	976.0		898.8
Less accumulated depreciation and amortization	545.7		516.7
Total property, plant and equipment - net	$	430.3	$	382.1
ACCRUED EXPENSES
Payroll and related items	$	97.1	$	102.7
Management incentive compensation	16.4		26.4
Income taxes payable	18.5		30.2
Insurance	11.4		11.2
Warranty	9.1		8.1
Deferred revenue	55.9		44.7
Lease liability	22.0		21.6
Restructuring	2.1		1.4
Accrued interest	4.5		5.5
Pension and retiree medical obligations	3.4		3.3
Other	31.1		34.0
Total accrued expenses	$	271.5	$	289.1
OTHER NONCURRENT LIABILITIES
Pension and retiree medical obligations	$	65.1	$	55.1
Transition tax payable	5.0		9.1
Deferred revenue	17.3		15.0
Lease liability	98.1		96.6
Other	21.2		20.0
Total other noncurrent liabilities	$	206.7	$	195.8

The valuation and qualifying account activity for the years ended December 31, 2023 and 2022 is as follows:


	2023		2022
ALLOWANCE FOR CREDIT LOSSES
Beginning balance January 1	$	8.0	$	7.2
Charged to costs and expenses, net of recoveries	0.6		2.2
Utilization	(1.2)		(1.2)
Other adjustments, including acquisitions and Foreign currency translation	0.1		(0.2)
Ending balance December 31	$	7.5	$	8.0

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, or Net sales, 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, 2023, 2022 and 2021 was as follows:


	For the Year Ended December 31,
	2023		2022		2021
Pumps	$	402.9	$	396.5	$	345.1
Water	345.8		307.8		255.3
Energy	209.3		191.3		169.0
Agriculture	159.6		152.8		107.4
Valves	129.5		118.9		121.9
Intersegment elimination	(2.9)		(1.1)		(0.7)
Fluid & Metering Technologies	1,244.2		1,166.2		998.0
Scientific Fluidics & Optics(1)	681.5		639.0		508.0
Performance Pneumatic Technologies	250.0		257.6		182.2
Sealing Solutions	242.3		266.0		264.2
Material Processing Technologies	120.7		138.1		134.5
Micropump(2)	21.9		38.5		32.9
Intersegment elimination	(2.9)		(2.4)		(2.8)
Health & Science Technologies	1,313.5		1,336.8		1,119.0
Fire & Safety	431.9		400.1		377.5
Dispensing	167.5		167.5		169.6
BAND-IT	119.4		111.6		100.8
Intersegment elimination	(2.6)		(0.3)		(0.1)
Fire & Safety/Diversified Products	716.2		678.9		647.8
Total net sales	$	3,273.9	$	3,181.9	$	2,764.8

(1) The year ended December 31, 2022 includes the acceleration of previously deferred revenue of $17.9 million as a result of a customer’s decision to discontinue further investment in commercializing its COVID-19 testing application. See Note 14 for further detail.

(2) Revenue from Micropump (sold on August 3, 2023) has been included in the Company’s Consolidated Statements of Income through the date of disposition. See Note 2 for further detail.

Revenue by geographical region for the years ended December 31, 2023, 2022 and 2021 was as follows:


	For the Year Ended December 31, 2023
	FMT		HST		FSDP		IDEX
U.S.	$	695.7	$	575.5	$	371.9	$	1,643.1
North America, excluding U.S.	70.3		22.6		33.4		126.3
Europe	213.8		439.9		166.7		820.4
Asia	177.6		249.4		108.5		535.5
Other(1)	89.7		29.0		38.3		157.0
Intersegment elimination	(2.9)		(2.9)		(2.6)		(8.4)
Total net sales	$	1,244.2	$	1,313.5	$	716.2	$	3,273.9


	For the Year Ended December 31, 2022
	FMT		HST		FSDP		IDEX
U.S.(2)	$	660.8	$	646.9	$	343.3	$	1,651.0
North America, excluding U.S.	71.5		25.8		35.3		132.6
Europe(2)	194.6		379.7		160.9		735.2
Asia	157.8		261.3		104.2		523.3
Other(1)	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
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(1)	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

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

(2) The HST segment includes the acceleration of $17.9 million of previously deferred revenue as a result of 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 14 for further detail.

Performance Obligations

Revenue from products and services transferred to customers at a point in time was approximately 95% and over time was approximately 5% in each of the years ended December 31, 2023, 2022, and 2021.

Contract Balances

The composition of customer receivables was as follows:


	December 31, 2023		December 31, 2022
Billed receivables	$	408.1	$	421.3
Unbilled receivables	10.9		10.0
Total customer receivables	$	419.0	$	431.3

The composition of deferred revenue was as follows:


	December 31, 2023		December 31, 2022
Deferred revenue - current	$	55.9	$	44.7
Deferred revenue - noncurrent	17.3		15.0
Total deferred revenue	$	73.2	$	59.7

6. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for 2023 and 2022, by reportable business segment, were as follows:


	FMT		HST		FSDP		Total
Goodwill	$	701.7	$	1,264.3	$	402.3	$	2,368.3
Accumulated goodwill impairment losses	(20.7)		(149.8)		(30.1)		(200.6)
Balance at January 1, 2022	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
Measurement period adjustments	0.3		0.9		—		1.2
Divestitures	(5.6)		—		—		(5.6)
Balance at December 31, 2022	780.2		1,495.0		362.9		2,638.1
Foreign currency translation	6.6		38.6		5.7		50.9
Acquisitions	—		156.7		—		156.7
Measurement period adjustments	(1.8)		5.4		—		3.6
Divestitures	—		(11.0)		—		(11.0)
Balance at December 31, 2023	$	785.0	$	1,684.7	$	368.6	$	2,838.3

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 reporting units as determined in accordance with ASC 350 as of October 31, 2023, the Company’s annual impairment test date, with no impairment noted. 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 earnings before interest, income taxes, depreciation and amortization (“EBITDA”) and the forward looking 2024 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 2023 and 2022, 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, 2023 and 2022:


	At December 31, 2023							At December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Net		Weighted Average Life	Gross Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets:
Patents	$	2.7	$	(2.0)	$	0.7	12	$	2.9	$	(1.8)	$	1.1
Trade names	171.9		(54.3)		117.6		15	186.5		(71.4)		115.1
Customer relationships	860.7		(228.7)		632.0		13	772.2		(184.9)		587.3
Unpatented technology	233.5		(66.3)		167.2		12	207.1		(57.8)		149.3
Software	5.3		(1.9)		3.4		5	4.8		(0.7)		4.1
Total amortized intangible assets	1,274.1		(353.2)		920.9		13	1,173.5		(316.6)		856.9
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	$	1,365.0	$	(353.2)	$	1,011.8		$	1,264.4	$	(316.6)	$	947.8

The Banjo and Akron Brass trade names are indefinite-lived intangible assets that were also tested for impairment as of October 31, 2023, with no impairments noted. 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 2023 and 2022, there were no events or circumstances that would have required an interim impairment test.

Amortization of intangible assets was $94.9 million, $69.0 million and $56.4 million in 2023, 2022 and 2021, respectively. Based on the intangible asset balances as of December 31, 2023, expected amortization expense for the years 2024 through 2028 is as follows:


Maturity of Intangible Assets	Estimated Amortization
2024	$	98.8
2025	97.3
2026	95.7
2027	92.4
2028	89.4

7. Borrowings

Borrowings at December 31, 2023 and 2022 consisted of the following:


	2023		2022
3.20% Senior Notes, repaid in June 2023 (the “3.20% Senior Notes”)	$	—	$	100.0
3.37% Senior Notes, due June 2025 (the “3.37% Senior Notes”)	100.0		100.0
5.13% Senior Notes, due June 2028 (the “5.13% Senior Notes”)	100.0		—
3.00% Senior Notes, due May 2030 (the “3.00% Senior Notes”)	500.0		500.0
2.625% Senior Notes, due June 2031 (the “2.625% Senior Notes”)	500.0		500.0
$800.0 million Revolving Facility, due November 2027 (the “Revolving Facility”)	81.0		77.7
$200.0 million Term Facility, due November 2027 (the “Term Facility”)	50.0		200.0
Other borrowings	2.3		0.1
Total borrowings	1,333.3		1,477.8
Less current portion	0.6		—
Less deferred debt issuance costs	6.5		7.9
Less unaccreted debt discount	1.1		1.2
Long-term borrowings	$	1,325.1	$	1,468.7

Revolving Credit Facility and Term Facility

On November 1, 2022, the Company entered into an amended and restated credit agreement (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, and other agents party thereto. The Credit Agreement consists of a revolving credit facility in an aggregate principal amount of $800 million and a term credit 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 and financing of acquisitions. 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. During 2023, the Company repaid $150.0 million of the $200.0 million previously outstanding under the Term Facility.

Borrowings under the Credit Agreement bear interest, at either an alternate base rate or Term SOFR (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 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 weighted-average interest rate for borrowings outstanding under the Revolving Facility was 4.22% during 2023 and 3.32% during 2022 for the period following the issuance of the Revolving Facility. The weighted-average interest rate for borrowings outstanding under the Term Facility was 6.22% during 2023 and 5.83% during 2022 for the period following the issuance of the Term Facility.

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 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.

At December 31, 2023, there was $81.0 million outstanding under the Revolving Facility and $3.4 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility of approximately $715.6 million.

Senior Notes

On June 13, 2023, the Company completed a private placement of $100.0 million aggregate principal amount of 5.13% Senior Notes due June 13, 2028 pursuant to a Note Purchase and Master Note Agreement, dated as of June 13, 2023, among the Company, NYL Investors LLC (“New York Life”) and certain affiliates of New York Life identified as Purchasers of the 5.13% Senior Notes therein. The 5.13% Senior 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 used the proceeds from the 5.13% Senior Notes issuance to repay the 3.20% Senior Notes due June 13, 2023.

Inclusive of the 5.13% Senior Notes, at December 31, 2023, the Company has $1.2 billion in senior notes outstanding at various interest rates detailed in the table above (the “Senior Notes”). Interest on the Senior Notes is payable semi-annually in arrears during the second and fourth quarters of the year. The Senior 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. Subject to the terms of the respective indenture, the Company may redeem all or a portion of the Senior Notes at any time prior to maturity at the redemption prices set forth in the indenture. The terms of the 2.625% Senior Notes and the 3.00% Senior Notes also require the Company to make an offer to repurchase the 2.625% Senior Notes and 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 terms of the 3.37% Senior Notes and the 5.13% Senior Notes also require the Company to make an offer to repurchase the 3.37% Senior Notes and the 5.13% Senior Notes upon a change of control (as defined in the note purchase agreement) of the Company at a price equal to 100% of the principal amount plus accrued and unpaid interest, if any.

Covenants

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. Those two covenants include 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 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. 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. At December 31, 2023, the Company was in compliance with all covenants under our borrowing arrangements.

Total borrowings at December 31, 2023 have scheduled maturities as follows:


Maturity of Borrowings
2024	$	0.6
2025	100.9
2026	0.5
2027	131.3
2028	100.0
Thereafter	1,000.0
Total borrowings	$	1,333.3

8. 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, 2023 and 2022:


	Basis of Fair Value Measurements
	December 31, 2023		December 31, 2022
	Level 1		Level 1
Trading securities - mutual funds held in nonqualified SERP(1)	$	10.5	$	7.5
Available-for-sale securities - equities(2)	4.4		—

(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, 2023, the securities are included in Other current assets on the Company’s Consolidated Balance Sheets and are available for overnight cash settlement, if necessary, to fund current operations.

There were no transfers of assets or liabilities between Level 1 and Level 2 in 2023 or 2022.

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.

The following table provides the fair value of the outstanding indebtedness described in Note 7, which is based on quoted market prices and current market rates for debt with similar credit risk and maturity, as well as the carrying value. 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.


	December 31, 2023				December 31, 2022
	Fair Value		Carrying Amount		Fair Value		Carrying Amount
Total Borrowings, less unaccreted debt discount	$	1,203.5	$	1,332.2	$	1,328.7	$	1,476.6

9. Leases

The Company has commitments under operating leases for certain office facilities, warehouses, manufacturing plants, equipment (which includes both office and plant equipment) and vehicles used in its operations. Leases with an initial term of 12 months or less are not recorded on the balance sheet and 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 contain provisions for future rent increases or have rental payments that are adjusted periodically for inflation or based on usage. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company does not have any significant leases that have not yet commenced.

Supplemental balance sheet information related to leases as of December 31, 2023 and 2022 was as follows:


	Balance Sheet Caption	December 31, 2023		December 31, 2022
Right-of-Use (“ROU”) Assets:
Building ROU assets - net	Other noncurrent assets	$	110.7	$	104.4
Equipment ROU assets - net	Other noncurrent assets	7.6		5.6
Total ROU assets - net		$	118.3	$	110.0
Lease Liabilities:
Current lease liabilities	Accrued expenses	$	22.0	$	21.6
Noncurrent lease liabilities	Other noncurrent liabilities	98.1		96.6
Total lease liabilities		$	120.1	$	118.2

The components of lease cost for the years ended December 31, 2023, 2022 and 2021 were as follows:


	2023		2022		2021
Fixed lease cost (1)	$	33.0	$	30.8	$	31.5
Variable lease cost	2.7		2.3		2.3
Total lease expense	$	35.7	$	33.1	$	33.8

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

Supplemental cash flow information related to leases for the years ended December 31, 2023, 2022 and 2021 was as follows:


	2023		2022		2021
	(In millions)
Cash paid for amounts included in the measurement of lease liabilities	$	33.6	$	31.7	$	31.2
Right-of-use assets obtained in exchange for new lease liabilities	29.0		19.0		16.0

Other supplemental information related to leases as of December 31, 2023 and 2022 was as follows:


Lease Term and Discount Rate	December 31, 2023		December 31, 2022
Weighted-average remaining lease term (years):
Building and equipment	7.00		7.43
Vehicles	2.63		2.14
Weighted-average discount rate:
Building and equipment	3.71	%	3.41	%
Vehicles	3.43	%	1.70	%

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

Total lease liabilities at December 31, 2023 have scheduled maturities as follows:


Maturity of Lease Liabilities
2024	$	20.6
2025	23.3
2026	20.7
2027	15.9
2028	13.5
Thereafter	39.8
Total lease payments	133.8
Less: Imputed interest	(13.7)
Present value of lease liabilities	$	120.1

10. 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:


	2023		2022		2021
Beginning balance, January 1	$	8.1	$	7.6	$	7.4
Provision for warranties	5.8		3.0		3.4
Claim settlements	(4.7)		(4.1)		(3.8)
Other adjustments, including acquisitions, divestitures and foreign currency translation	(0.1)		1.6		0.6
Ending balance, December 31	$	9.1	$	8.1	$	7.6

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.

11. 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. During 2023, the Company repurchased a total of 124,600 shares at a cost of $24.2 million. 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. As of December 31, 2023, the amount of share repurchase authorization remaining was $539.7 million.

12. Income Taxes

Pretax income for 2023, 2022 and 2021 was taxed in the following jurisdictions:


	2023		2022		2021
U.S.	$	534.1	$	516.5	$	350.2
Foreign	226.2		232.9		229.6
Total	$	760.3	$	749.4	$	579.8

The provision (benefit) for income taxes for 2023, 2022 and 2021 was as follows:


	2023		2022		2021
Current
U.S.	$	103.8	$	102.8	$	64.7
State and local	13.7		14.5		11.0
Foreign	61.9		63.9		60.9
Total current	179.4		181.2		136.6
Deferred
U.S.	(11.1)		(12.2)		(4.1)
State and local	1.7		(1.0)		(1.4)
Foreign	(5.3)		(5.3)		(0.6)
Total deferred	(14.7)		(18.5)		(6.1)
Total provision for income taxes	$	164.7	$	162.7	$	130.5

Deferred tax assets (liabilities) at December 31, 2023 and 2022 were:


	2023		2022
Allowances and accruals	$	18.8	$	21.1
Employee and retiree benefit plans	20.9		17.8
Inventories	10.8		12.0
Foreign tax credit and other carryforwards	14.8		15.0
Lease liabilities	25.8		26.9
Right of use assets	(24.7)		(25.9)
Depreciation and amortization	(322.1)		(301.3)
Taxes on undistributed foreign earnings	(21.0)		(18.4)
Other	0.7		5.6
Total gross deferred tax (liabilities)	(276.0)		(247.2)
Valuation allowance	(14.4)		(15.0)
Total deferred tax (liabilities), net of valuation allowances	$	(290.4)	$	(262.2)

The deferred tax assets and liabilities recognized in the Company’s Consolidated Balance Sheets as of December 31, 2023 and 2022 were:


	2023		2022
Noncurrent deferred tax asset - Other noncurrent assets	$	1.5	$	2.0
Noncurrent deferred tax liabilities - Deferred income taxes	(291.9)		(264.2)
Net deferred tax liabilities	$	(290.4)	$	(262.2)

The Company had prepaid income taxes, recorded within Other current assets on the Consolidated Balance Sheets, of $14.3 million and $15.1 million as of December 31, 2023 and 2022, 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 2023, 2022 and 2021 are shown in the following table:


	2023				2022				2021
Pretax income	$	760.3			$	749.4			$	579.8
Provision for income taxes:
Computed amount at statutory rate of 21%	$	159.7	21.0	%	$	157.4	21.0	%	$	121.8	21.0	%
State and local income tax (net of federal tax benefit)	12.6		1.7	%	11.4		1.5	%	8.0		1.4	%
Taxes on non-U.S. earnings-net of foreign tax credits	10.8		1.4	%	12.4		1.7	%	9.2		1.6	%
Global Intangible Low-Taxed Income	—		—	%	2.0		0.3	%	0.4		0.1	%
Foreign-Derived Intangible Income Deduction	(11.3)		(1.5	%)	(11.9)		(1.6	%)	(7.5)		(1.3	%)
Share-based payments	(2.0)		(0.3	%)	(2.6)		(0.4	%)	(3.5)		(0.6	%)
Other	(5.1)		(0.6	%)	(6.0)		(0.8	%)	2.1		0.3	%
Total provision for income taxes	$	164.7	21.7	%	$	162.7	21.7	%	$	130.5	22.5	%

The Company has $54.9 million and $45.3 million of permanently reinvested earnings of non-U.S. subsidiaries as of December 31, 2023 and 2022, respectively. No deferred U.S. income taxes have been provided on the $54.9 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 $8.2 million and $6.8 million as of December 31, 2023 and 2022, respectively.

During the years ended December 31, 2023, 2022 and 2021, the Company repatriated $134.1 million, $199.9 million and $116.0 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 2023, 2022 and 2021 is as follows:


	2023		2022		2021
Beginning balance January 1	$	—	$	0.1	$	1.1
Gross increases for tax positions of prior years	—		—		0.1
Gross decreases for tax positions of prior years	—		—		(0.3)
Settlements	—		—		(0.2)
Lapse of statute of limitations	—		(0.1)		(0.6)
Ending balance December 31	$	—	$	—	$	0.1

As of December 31, 2023, the Company has no remaining unrecognized tax benefits that would affect the Company’s effective tax rate. The tax years 2018-2022 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, 2023, the Company has minimal deferred tax assets on non-U.S. and U.S. state net operating loss carryforwards of $0.3 million and $0.6 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, 2023, the Company has deferred tax assets on non-U.S. capital loss carryforwards of $3.1 million with a full valuation allowance. The non-U.S. capital loss can be carried forward indefinitely.

As of December 31, 2023, the Company has deferred tax assets with a full valuation allowance recorded against foreign tax credit carryforwards for U.S. federal purposes of approximately $10.6 million. The U.S. federal foreign tax credit carryforward will expire between 2029 and 2033.

13. Business Segments and Geographic Information

IDEX has three reportable business segments: FMT, HST and FSDP. When determining these reportable segments, the Company aggregated operating segments based on their similar economic and operating characteristics.

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 biopharmaceutical, machinery and numerous other specialty niche markets.

The HST segment designs, produces and distributes a wide range of precision fluidics, positive displacement pumps, powder and liquid processing technologies, 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 and precision photonic solutions. HST serves a variety of end markets, including food and beverage, life sciences, analytical instruments, pharmaceutical and biopharmaceutical, industrial, semiconductor, 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 contracted with terms equivalent to those of an arm’s-length transaction.


	2023		2022		2021
NET SALES
Fluid & Metering Technologies
External customers	$	1,244.2	$	1,166.2	$	998.0
Intersegment sales	2.9		1.1		0.7
Total segment sales	1,247.1		1,167.3		998.7
Health & Science Technologies
External customers	1,313.5		1,336.8		1,119.0
Intersegment sales	2.9		2.4		2.8
Total segment sales	1,316.4		1,339.2		1,121.8
Fire & Safety/Diversified Products
External customers	716.2		678.9		647.8
Intersegment sales	2.6		0.3		0.1
Total segment sales	718.8		679.2		647.9
Intersegment eliminations	(8.4)		(3.8)		(3.6)
Net sales	$	3,273.9	$	3,181.9	$	2,764.8
ADJUSTED EBITDA
Fluid & Metering Technologies	$	416.1	$	374.2	$	297.0
Health & Science Technologies	359.5		411.8		355.9
Fire & Safety/Diversified Products	208.6		183.9		185.7
Segment Adjusted EBITDA	984.2		969.9		838.6
Corporate and other(1)	(84.6)		(85.7)		(73.2)
Adjusted EBITDA	899.6		884.2		765.4
Interest expense	(51.7)		(40.7)		(41.0)
Depreciation	(57.2)		(50.7)		(46.6)
Amortization of intangible assets	(94.9)		(69.0)		(56.4)
Fair value inventory step-up charges	(1.6)		(8.5)		(11.6)
Restructuring expenses and asset impairments	(10.9)		(4.5)		(9.3)
Net impact from the exit of a COVID-19 testing application(2)	—		1.1		—
Corporate transaction indemnity	—		—		(3.5)
Gain on sale of businesses - net	84.7		34.8		—
Gains on sales of assets	—		2.7		—
Credit loss on note receivable from collaborative partner(3)	(7.7)		—		—
Loss on early debt redemption	—		—		(8.6)
Termination of the U.S. pension plan, net of curtailment	—		—		(8.6)
Income before income taxes	$	760.3	$	749.4	$	579.8

(1) Corporate expenses that can be identified with a segment have been included in determining segment results. The remainder is included in Corporate and other.

(2) Represents the acceleration of previously deferred revenue of $17.9 million, net of 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 in the HST segment in 2022 that did not reoccur in 2023. See Note 14 in the Notes to Consolidated Financial Statements for further detail.

(3) Represents a reserve recorded on an investment with a collaborative partner that may no longer be recoverable. See Note 3 in the Notes to Consolidated Financial Statements for further detail.


	2023		2022		2021
ASSETS
Fluid & Metering Technologies	$	1,674.7	$	1,676.9	$	1,458.8
Health & Science Technologies	3,262.4		2,931.1		2,138.3
Fire & Safety/Diversified Products	792.6		771.8		892.5
Corporate and other	135.5		132.1		427.6
Total assets	$	5,865.2	$	5,511.9	$	4,917.2
DEPRECIATION AND AMORTIZATION OF INTANGIBLE ASSETS
Fluid & Metering Technologies	$	36.8	$	36.9	$	30.5
Health & Science Technologies	99.0		67.3		56.7
Fire & Safety/Diversified Products	15.3		15.0		15.3
Corporate and other	1.0		0.5		0.5
Total depreciation and amortization	$	152.1	$	119.7	$	103.0
CAPITAL EXPENDITURES
Fluid & Metering Technologies	$	24.2	$	25.3	$	21.0
Health & Science Technologies	55.1		32.0		41.5
Fire & Safety/Diversified Products	9.7		10.5		9.5
Corporate and other	0.9		0.2		0.7
Total capital expenditures	$	89.9	$	68.0	$	72.7

Information about the Company’s long-lived assets in different geographical regions for the years ended December 31, 2023, 2022 and 2021 is shown below.


	2023		2022		2021
LONG-LIVED ASSETS — PROPERTY, PLANT AND EQUIPMENT
U.S.	$	219.2	$	191.7	$	188.3
North America, excluding U.S.	24.0		4.7		5.4
Europe	138.4		136.8		98.9
Asia	48.3		48.8		34.5
Other(1)	0.4		0.1		0.2
Total long-lived assets - net	$	430.3	$	382.1	$	327.3

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

14. Restructuring Expenses and Asset Impairments

From time to time, the Company incurs expenses to facilitate long-term sustainable growth through cost reduction actions, consisting of employee reductions, facility rationalization and contract termination costs. These 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.

2023 Initiative

During the year ended December 31, 2023, the Company incurred severance costs related to employee reductions in conjunction with cost mitigation efforts as a result of current market conditions, contract termination costs and asset impairments.

Pre-tax Restructuring expenses and asset impairments by segment for the 2023 initiative were as follows:


	Severance Costs		Exit Costs		Asset Impairments		Total
Fluid & Metering Technologies	$	1.5	$	0.6	$	0.8	$	2.9
Health & Science Technologies	6.4		0.2		—		6.6
Fire & Safety/Diversified Products	0.7		0.2		—		0.9
Corporate/Other	0.5		—		—		0.5
Total restructuring costs	$	9.1	$	1.0	$	0.8	$	10.9

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 the Company’s 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 it 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
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 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
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

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


	Restructuring Initiatives
Balance at January 1, 2022	$	2.8
Restructuring expenses(1)	5.4
Payments, utilization and other	(6.8)
Balance at December 31, 2022	1.4
Restructuring expenses(2)	10.1
Payments, utilization and other	(9.4)
Balance at December 31, 2023	$	2.1

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

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

15. 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 restricted stock, performance share units and stock options 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, 2023 totaled 15.6 million, of which 1.7 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 the 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 stock option fair values and assumptions for the years ended December 31, 2023, 2022, and 2021 are disclosed below:


	Years Ended December 31,
	2023	2022	2021
Weighted average fair value of grants	$59.77	$42.66	$38.88
Dividend yield	1.09%	1.14%	1.01%
Volatility	27.14%	25.23%	23.78%
Risk-free interest rate	4.15%	2.01%	0.12% - 1.54%
Expected life (in years)	4.50	4.90	5.70

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, 2023, and changes during the year ended December 31, 2023, are presented in the following table:


	Shares	Weighted Average Price		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Stock Options
Outstanding at January 1, 2023	1,015,572	$	161.45	6.94	$	67.9
Granted	246,195	222.52
Exercised	(196,050)	133.90
Forfeited	(82,450)	201.67
Outstanding at December 31, 2023	983,267	$	178.86	6.88	$	39.3
Vested and expected to vest at December 31, 2023	954,222	$	177.96	6.82	$	38.9
Exercisable at December 31, 2023	497,612	$	153.99	5.47	$	31.5

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 2023, 2022 and 2021 was $14.9 million, $17.4 million and $21.4 million, respectively. In 2023, 2022 and 2021, cash received from options exercised was $26.3 million, $19.3 million and $19.7 million, respectively, while the actual tax benefit realized for the tax deductions from stock options exercised totaled $3.1 million, $3.7 million and $4.5 million, respectively.

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


	Years Ended December 31,
	2023		2022		2021
Cost of sales	$	0.6	$	0.5	$	0.5
Selling, general and administrative expenses(1)	9.3		8.7		8.0
Total expense before income taxes	9.9		9.2		8.5
Income tax benefit	(1.0)		(0.8)		(0.8)
Total expense after income taxes	$	8.9	$	8.4	$	7.7

(1) The year ended December 31, 2023 includes $0.5 million of lower expense due to executive forfeitures, largely offset by $0.4 million of higher expense due to timing of accelerated stock compensation costs for retiree eligible participants compared with 2022.

As of December 31, 2023, there was $9.4 million of total unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 1.4 years.

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, 2023, and changes during the year ended December 31, 2023, are presented in the following table:


Restricted Stock	Shares	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2023	104,382	$	179.45
Granted	46,660	217.01
Vested	(24,076)	175.42
Forfeited	(14,075)	201.92
Unvested at December 31, 2023	112,891	$	193.03

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


	Years Ended December 31,
	2023		2022		2021
Cost of sales	$	0.5	$	0.3	$	0.4
Selling, general and administrative expenses(1)	5.2		6.4		5.1
Total expense before income taxes	5.7		6.7		5.5
Income tax benefit	(1.2)		(1.2)		(1.1)
Total expense after income taxes	$	4.5	$	5.5	$	4.4

(1) The year ended December 31, 2023 includes $0.5 million of lower expense due to timing of accelerated stock compensation costs for retiree eligible participants compared with 2022.

As of December 31, 2023, there was $6.9 million of total unrecognized compensation cost related to restricted stock that is expected to be recognized over a weighted-average period of 1.1 years.

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, 2023, and changes during the year ended December 31, 2023, are presented in the following table:


Cash-Settled Restricted Stock	Shares	Weighted-Average Fair Value
Unvested at January 1, 2023	57,356	$	228.33
Granted	20,940	225.02
Vested	(16,071)	228.86
Forfeited	(5,570)	217.11
Unvested at December 31, 2023	56,655	$	217.11

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


	Years Ended December 31,
	2023		2022		2021
Cost of sales	$	0.3	$	0.1	$	0.7
Selling, general and administrative expenses	3.1		2.6		4.3
Total expense before income taxes	3.4		2.7		5.0
Income tax benefit	(0.2)		(0.2)		(0.4)
Total expense after income taxes	$	3.2	$	2.5	$	4.6

At December 31, 2023 and 2022, the Company has accrued $4.2 million and $4.8 million, respectively, for cash-settled restricted stock in Accrued expenses in the Consolidated Balance Sheets and has accrued $2.9 million and $2.8 million, respectively, for cash-settled restricted stock in Other noncurrent liabilities in the Consolidated Balance Sheets.

As of December 31, 2023, there was $4.1 million of total unrecognized compensation cost related to cash-settled restricted stock that is expected to be recognized over a weighted-average period of 1.0 year.

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 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.

Weighted average performance share unit fair values and assumptions for the years ended December 31, 2023, 2022, and 2021 are disclosed below:


	Years Ended December 31,
	2023	2022	2021
Weighted average fair value of grants	$308.18	$235.54	$247.49
Dividend yield	—%	—%	—%
Volatility	27.00%	28.09%	28.60%
Risk-free interest rate	4.37%	1.73%	0.33%
Expected life (in years)	2.94	2.93	2.93

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, 2023, and changes during the year ended December 31, 2023, are presented in the following table:


Performance Share Units	Shares	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2023	70,915	$	236.66
Granted	28,030	308.18
Vested	(18,105)	226.86
Forfeited	(13,385)	263.06
Unvested at December 31, 2023	67,455	$	265.15

The performance period for the 2021 grants ended as of January 31, 2024. The 2021 grants achieved a 50% payout factor and the Company issued 9,606 common shares in February 2024 for awards that vested in 2024.

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


	Years Ended December 31,
	2023		2022		2021
Cost of goods sold	$	—	$	—	$	—
Selling, general and administrative expenses(1)	6.0		6.0		6.4
Total expense before income taxes	6.0		6.0		6.4
Income tax benefit	(0.3)		(0.2)		(0.3)
Total expense after income taxes	$	5.7	$	5.8	$	6.1

(1) The year ended December 31, 2023 includes $0.8 million of higher expense due to timing of accelerated stock compensation costs for retiree eligible participant, offset by $0.8 million of lower expense due to executive forfeitures compared with 2022.

As of December 31, 2023, there was $2.5 million of total unrecognized compensation cost related to performance share units that is expected to be recognized over a weighted-average period of 1.0 year.

16. Other Comprehensive Income (Loss)

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


	For the Year Ended December 31, 2023						For the Year Ended December 31, 2022
	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Cumulative translation adjustment	$	87.8	$	—	$	87.8	$	(74.9)	$	—	$	(74.9)
Pension and other postretirement adjustments
Net (loss) gain arising during the year	(8.2)		1.9		(6.3)		24.6		(6.7)		17.9
Amortization and settlement gain	(1.5)		0.4		(1.1)		0.5		(0.1)		0.4
Pension and other postretirement adjustments	(9.7)		2.3		(7.4)		25.1		(6.8)		18.3
Reclassification adjustments for derivatives	—		—		—		—		—		—
Total other comprehensive income (loss)	$	78.1	$	2.3	$	80.4	$	(49.8)	$	(6.8)	$	(56.6)


	For the Year Ended December 31, 2021
	Pre-tax		Tax		Net of tax
Cumulative translation adjustment	$	(75.6)	$	—	$	(75.6)
Pension and other postretirement adjustments
Net gain (loss) arising during the year	12.0		(2.9)		9.1
Amortization and settlement loss, net of curtailment gain	10.3		(2.4)		7.9
Pension and other postretirement adjustments	22.3		(5.3)		17.0
Reclassification adjustments for derivatives(1)	3.3		(0.8)		2.5
Total other comprehensive (loss)	$	(50.0)	$	(6.1)	$	(56.1)

(1) Includes the acceleration of $1.3 million of the remaining accumulated other comprehensive loss resulting from the cash settlement of a forward starting interest rate exchange agreement, which was cash settled in 2011. The amounts were recognized in Other expense (income) - net in the Consolidated Statements of Income during the year ended December 31, 2021 in connection with the early redemption of the related debt instrument.

The amounts reclassified from Accumulated other comprehensive loss to net income are summarized as follows:


	For the Year Ended December 31,
	2023		2022		2021		Income Statement Caption
Pension and other postretirement plans:
Amortization of actuarial (gains) losses and prior service costs	$	(1.4)	$	0.5	$	1.8	Other expense (income) - net
Settlement (gain) loss recognized	(0.1)		—		10.5		Other expense (income) - net
Curtailment gain recognized	—		—		(2.0)		Other expense (income) - net
Total before tax	(1.5)		0.5		10.3
Provision for income taxes	0.4		(0.1)		(2.4)
Total net of tax	$	(1.1)	$	0.4	$	7.9
Derivatives:
Reclassification adjustments(1)	$	—	$	—	$	3.3	Interest expense
Total before tax	—		—		3.3
Provision for income taxes	—		—		(0.8)
Total net of tax	$	—	$	—	$	2.5

17. 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.

During the year ended December 31, 2021, the Company settled its remaining obligations under the IDEX Corporation Retirement Plan (“Plan”), a U.S. defined benefit plan which was terminated in May 2020, 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 expense (income) - 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.

The following table provides a reconciliation of the changes in the benefit obligation and fair value of plan assets over the two-year period ended December 31, 2023 and a statement of the funded status at December 31 for both years.


	Pension Benefits								Other Benefits
	2023				2022				2023		2022
	U.S.		Non-U.S.		U.S.		Non-U.S.
CHANGE IN BENEFIT OBLIGATION
Obligation at January 1	$	8.3	$	75.7	$	10.6	$	104.3	$	16.4	$	23.6
Service cost	0.1		1.2		0.1		1.8		0.4		0.7
Interest cost	0.4		2.8		0.2		1.0		0.8		0.5
Plan amendments	—		—		—		—		—		—
Benefits paid	(0.7)		(1.4)		(0.6)		(0.8)		(0.9)		(1.0)
Actuarial loss (gain)	0.4		6.2		(2.0)		(27.8)		0.5		(7.3)
Currency translation	—		5.2		—		(6.1)		—		(0.1)
Settlements	—		(3.0)		—		(0.1)		—		—
Curtailments	—		—		—		—		—		—
Acquisition/Divestiture	—		1.0		—		2.7		—		—
Other	0.4		0.8		—		0.7		—		—
Obligation at December 31	$	8.9	$	88.5	$	8.3	$	75.7	$	17.2	$	16.4
CHANGE IN PLAN ASSETS
Fair value of plan assets at January 1	$	4.7	$	37.8	$	17.0	$	46.1	$	—	$	—
Actual return on plan assets	(0.3)		0.9		(2.0)		(10.5)		—		—
Employer contributions	0.4		3.3		0.4		2.8		0.9		1.0
Benefits paid	(0.7)		(1.4)		(0.6)		(0.8)		(0.9)		(1.0)
Currency translation	—		3.2		—		(2.5)		—		—
Settlements	—		(3.0)		—		(0.1)		—		—
Acquisition/Divestiture	—		—		—		2.0		—		—
Other	0.2		0.9		(10.1)		0.8		—		—
Fair value of plan assets at December 31	$	4.3	$	41.7	$	4.7	$	37.8	$	—	$	—
Funded status at December 31	$	(4.6)	$	(46.8)	$	(3.6)	$	(37.9)	$	(17.2)	$	(16.4)
COMPONENTS ON THE CONSOLIDATED BALANCE SHEETS
Other current assets	$	—	$	—	$	—	$	—	$	—	$	—
Other noncurrent assets	—		1.5		—		0.5		—		—
Current liabilities	(0.7)		(1.7)		(0.7)		(1.5)		(1.1)		(1.1)
Other noncurrent liabilities	(3.9)		(46.6)		(2.9)		(36.9)		(16.1)		(15.3)
Net asset (liability) at December 31	$	(4.6)	$	(46.8)	$	(3.6)	$	(37.9)	$	(17.2)	$	(16.4)

The pension benefits actuarial loss in 2023 was primarily driven by the decrease in the discount rates from 2022 to 2023. The increase in the Eurozone inflation rate contributed further to the reported Non-U.S. pension actuarial loss.

The other benefits actuarial loss in 2023 was primarily driven by the decrease in the discount rates from 2022 to 2023 with additional losses from the updated medical trend assumptions for the U.S. plans, partially offset by gains from updated participants data.

The accumulated benefit obligation for all defined benefit pension plans was $94.6 million and $81.9 million at December 31, 2023 and 2022, respectively.

The weighted average assumptions used in the measurement of the Company’s benefit obligation at December 31, 2023 and 2022 were as follows:


	U.S. Plans				Non-U.S. Plans				Other Benefits
	2023		2022		2023		2022		2023		2022
Discount rate	4.93	%	5.17	%	3.01	%	3.75	%	4.90	%	5.21	%
Rate of compensation increase	—	%	—	%	2.55	%	2.44	%	—	%	—	%
Cash balance interest credit rate	—	%	—	%	1.43	%	2.42	%	—	%	—	%

The pretax amounts recognized in Accumulated other comprehensive loss on the Consolidated Balance Sheets as of December 31, 2023 and 2022 were as follows:


	Pension Benefits								Other Benefits
	2023				2022				2023		2022
	U.S.		Non-U.S.		U.S.		Non-U.S.
Prior service cost (credit)	$	0.2	$	(0.4)	$	0.1	$	(0.5)	$	(0.3)	$	(0.4)
Net loss (gain)	2.7		1.8		1.9		(5.5)		(8.6)		(9.9)
Total	$	2.9	$	1.4	$	2.0	$	(6.0)	$	(8.9)	$	(10.3)

The components of the net periodic cost (benefit) for the plans in 2023, 2022 and 2021 are as follows:


	Pension Benefits
	2023				2022				2021
	U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	$	0.1	$	1.2	$	0.1	$	1.8	$	0.1	$	2.0
Interest cost	0.4		2.8		0.2		1.0		0.3		0.7
Expected return on plan assets	(0.2)		(1.6)		(0.2)		(1.3)		(0.9)		(1.0)
Settlement (gain) loss recognized	—		(0.1)		—		—		10.5		—
Net amortization	0.1		(0.6)		0.3		0.6		0.4		2.1
Net periodic cost	$	0.4	$	1.7	$	0.4	$	2.1	$	10.4	$	3.8


	Other Benefits
	2023		2022		2021
Service cost	$	0.4	$	0.7	$	0.7
Interest cost	0.8		0.5		0.4
Curtailment gain recognized	—		—		(2.0)
Net amortization	(0.9)		(0.5)		(0.6)
Net periodic cost (benefit)	$	0.3	$	0.7	$	(1.5)

The Company recognizes the service cost component in both Cost of sales and Selling, general and administrative expenses in the Consolidated Statements of Income depending on the functional area of the underlying employees and the interest cost, expected return on plan assets and net amortization components in Other expense (income) - net in the Consolidated Statements of Income.

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


	U.S. Plans						Non-U.S. Plans
	2023		2022		2021		2023		2022		2021
Discount rate	5.17	%	2.52	%	2.14	%	3.75	%	1.25	%	0.95	%
Expected return on plan assets	4.65	%	2.63	%	2.40	%	4.17	%	2.87	%	2.41	%
Rate of compensation increase	—	%	—	%	—	%	2.44	%	2.31	%	2.32	%


	Other Benefits
	2023		2022		2021
Discount rate	5.21	%	2.70	%	2.20	%
Expected return on plan assets	—	%	—	%	—	%
Rate of compensation increase	—	%	—	%	—	%

The pretax change recognized in Accumulated other comprehensive loss on the Consolidated Balance Sheet in 2023 is as follows:


	Pension Benefits				Other Benefits
	U.S.		Non-U.S.
Net loss in current year	$	(0.9)	$	(6.9)	$	(0.4)
Prior service cost	(0.1)		—		—
Amortization of prior service credit	—		(0.1)		(0.1)
Amortization of net loss (gain)	0.1		(0.5)		(0.9)
Exchange rate effect on amounts in other comprehensive income	—		0.1		—
Total	$	(0.9)	$	(7.4)	$	(1.4)

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 $16.8 million, $16.1 million and $12.8 million for 2023, 2022 and 2021, respectively.

The Company, through its subsidiaries, participates in a multi-employer pension plan covering approximately 211 participants under U.S. collective bargaining agreements. None of these plans are considered individually significant to the Company as contributions to these plans totaled $0.9 million, $0.8 million, and $1.0 million for 2023, 2022 and 2021, respectively.

For measurement purposes, a 6.23% weighted average annual rate of increase in the per capita cost of covered health care benefits was assumed for 2023. 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, 2023 and 2022, by asset category, were as follows:


	U.S. Plans				Non-U.S. Plans
	2023		2022		2023		2022
Equity securities	9	%	9	%	10	%	13	%
Fixed income securities	79	%	84	%	22	%	19	%
Cash/Commingled Funds/Other (1)	12	%	7	%	68	%	68	%
Total	100	%	100	%	100	%	100	%

The basis used to measure the defined benefit plans’ assets at fair value at December 31, 2023 and 2022 is summarized as follows:


	Basis of Fair Value Measurement
	Outstanding Balances		Level 1		Level 2		Level 3
As of December 31, 2023
Equity
U.S. Large Cap	$	0.2	$	0.2	$	—	$	—
U.S. Small / Mid Cap	2.1		—		2.1		—
International	2.4		0.8		1.6		—
Fixed Income
U.S. Intermediate	2.5		—		2.5		—
U.S. Long Term	3.3		—		3.3		—
U.S. High Yield	0.5		—		0.5		—
International	6.4		0.2		6.2		—
Other Commingled Funds(1)	25.8		—		—		25.8
Cash and Equivalents	1.1		0.6		0.5		—
Other	1.7		—		1.7		—
	$	46.0	$	1.8	$	18.4	$	25.8

(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, 2022
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.

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 2.6% per year. The general asset allocation guidelines for plan assets are that “equities” will constitute from 35% to 45% of the market value of total fund assets with a target of 40%, and “fixed income” obligations, including cash, will constitute from 55% to 65% with a target of 60%. 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, 2023, there were no shares of the Company’s stock held in plan assets.

Cash Flows

The Company expects to contribute approximately $3.6 million to its defined benefit plans and $1.1 million to its other postretirement benefit plans in 2024. The Company also expects to contribute approximately $17.3 million to its defined contribution plan and $13.5 million to its 401(k) savings plan in 2024 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
2024	$	6.9
2025	6.6
2026	6.6
2027	6.6
2028	6.6
2029 to 2033	33.0
Total Estimated Future Benefit Payments	$	66.3

Previous: Item 7A. Quantitative and Qualitative Disclosures About Market Risk. · Next: Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.