Roper Technologies (ROP) 10-K risk factor changes: FY2012 vs FY2011

As of December 31, [removed: 2011,] [added: 2012,] we had [removed: $1.09] [added: $2.02] billion in total consolidated indebtedness.

In addition, we had [removed: $707 million] [added: $1.4 billion] undrawn availability under our senior unsecured credit facility, as well as the ability to request additional term loans or revolving credit commitments under our credit facility not to exceed $350 million in aggregate.

Most of these transactions and balances are denominated in euros, Canadian dollars, British pounds [removed: and] [added: or] Danish krone.

Sales by our operating companies whose functional currency is not the U.S. dollar represented [removed: approximately 27%] [added: 25%] of our total net sales for the year ended December 31, [removed: 2011] [added: 2012] compared to [removed: 25%] [added: 27%] for the year ended December 31, [removed: 2010.][added: 2011.]

These sales accounted for 15% of our net sales for [added: each of] the years ended December 31, [removed: 2011] [added: 2012] and December 31, [removed: 2010.][added: 2011.]

As of and for the year ended December 31, [removed: 2011, 29%] [added: 2012, 27%] of our net sales and [removed: 21%] [added: 22%] of our long-lived assets, excluding goodwill and intangibles, were attributable to operations outside the U.S. We expect our international operations to contribute materially to our business for the foreseeable future.

| [removed: |] · | adverse changes in a specific [removed: country’s] [added: country's] or [removed: region’s] [added: region's] political or economic conditions, particularly in emerging markets; |

| [removed: |] · | trade protection measures and import or export requirements; |

| [removed: |] · | subsidies or increased access to capital for firms that are currently, or may emerge as, competitors in countries in which we have operations; |

| [removed: |] · | partial or total expropriation; |

| [removed: |] · | potentially negative consequences from changes in tax laws; |

| [removed: |] · | difficulty in staffing and managing widespread operations; |

| [removed: |] · | differing labor regulations; |

| [removed: |] · | differing protection of intellectual property; and |

| [removed: |] · | unexpected changes in regulatory requirements. |

We intend to [removed: continue to] seek additional acquisition [removed: opportunities] [added: opportunities,] both to expand into new markets and to enhance our position in existing markets.

Our insurance costs increased in prior periods and may [removed: continue to] increase in the future.

We believe [removed: that] we have adequately accrued estimated losses, principally related to deductible amounts under our insurance policies, with respect to all product liability and other claims, based upon our past experience and available facts.

To remain competitive, we must develop new products, respond to new technologies and [removed: periodically] enhance our existing products in a timely manner.

We anticipate that we may have to adjust prices [removed: of many of our products] to stay competitive.

Accordingly, [removed: any] [added: a] downturn in these or other markets in which we participate could materially adversely affect us.

At December 31, [removed: 2011,] [added: 2012,] goodwill totaled [removed: $2.87] [added: $3.87] billion compared to [removed: $3.20] [added: $3.69] billion of [removed: stockholders’] [added: stockholders'] equity, and represented [removed: 54%] [added: 55%] of our total assets of [removed: $5.32] [added: $7.07] billion.

If future operating performance at one or more of our business units were to fall significantly below current levels, if competing or alternative technologies [removed: emerge] [added: emerge, if interest rates rise] or if business valuations decline, we could incur a non-cash charge to operating earnings.

Many of our products rely on proprietary technology; therefore we believe that the development and protection of intellectual property rights through patents, copyrights, trade secrets, trademarks, confidentiality agreements and other contractual provisions [removed: is] [added: are] important to the future success of our business.

[removed: Current and future actions] [added: Actions] to enforce these rights may result in substantial costs and diversion of resources and we make no assurances that any such actions will be successful.

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We are a diversified growth company that designs, manufactures and distributes energy systems and controls, medical and scientific imaging products and software, industrial technology products and [removed: radio frequency products] [added: RF products, services] and [removed: services.][added: application software.]

We market these products and services to [removed: selected segments of] a broad range of markets including RF applications, medical, water, energy, research, education, software-as-a-service ("SaaS")-based information networks, security and other niche markets.

A discussion of our significant accounting policies can also be found in the notes to our Consolidated Financial Statements for the year ended December 31, [removed: 2011] [added: 2012] included in this Annual Report.

At December 31, [removed: 2011,] [added: 2012,] our allowance for doubtful accounts receivable was [removed: $8.2] [added: $12.5] million and our allowance for sales returns and sales credits was [removed: $2.4] [added: $3.5] million, for a total of [removed: $10.6] [added: $16.0] million, or [removed: 2.4%] [added: 3.0%] of total gross accounts receivable.

The total allowance at December 31, [removed: 2011] [added: 2012] was [removed: $0.3] [added: $5.4] million higher than at December 31, [removed: 2010.][added: 2011.]

The allowance will continue to fluctuate as a percentage of sales based on specific identification of allowances needed due to changes in our [removed: business as well as] [added: business,] the write-off of uncollectible [removed: receivables.][added: receivables, and the addition of reserve balances at acquired businesses.]

At December 31, [removed: 2011,] [added: 2012,] inventory reserves for excess and obsolete inventory were [removed: $35.2] [added: $42.0] million, or [removed: 14.7%] [added: 18.0%] of gross inventory cost, as compared to [removed: $32.5] [added: $35.2] million, or [removed: 15.4%] [added: 14.7%] of gross inventory cost, at December 31, [removed: 2010.][added: 2011.]

Our expense for warranty obligations was less than 1% of net sales for each of the years ended December 31, [added: 2012,] 2011, [removed: 2010,] and [removed: 2009.][added: 2010.]

During the year ended December 31, [removed: 2011,] [added: 2012,] we recognized revenue of [removed: approximately $151.5] [added: $145.5] million using this method, primarily for major turn-key, longer term toll and traffic and energy projects.

[removed: Approximately $131.0] [added: We recognized $151.5] million and [removed: $142.5] [added: $131.0] million of revenue [removed: was recognized] using this method during the years ended December 31, [removed: 2010] [added: 2011] and December 31, [removed: 2009,] [added: 2010,] respectively.

At December 31, [removed: 2011, $132.1] [added: 2012, $190.4] million of revenue related to unfinished percentage-of-completion contracts had yet to be recognized.

During [removed: 2011,] [added: 2012,] our effective income tax rate was [removed: 29.4%,] [added: 29.6%,] which was [added: slightly] higher than the [removed: 2010] [added: 2011] rate of [removed: 28.1%] [added: 29.4%] due primarily to a [removed: foreign tax credit received in 2010 which did not recur] [added: decrease] in [removed: 2011.][added: research and development ("R&D") deductions.]

Various assumptions are utilized including forecasted operating results, strategic plans, economic projections, anticipated future cash flows, the [removed: weighted average] [added: weighted-average] cost of capital, comparable transactions, market data and earnings multiples.

While we use reasonable and timely information to prepare our cash flow and discount rate assumptions, actual future cash flows or market conditions could differ significantly resulting in future [added: non-cash] impairment charges related to recorded goodwill balances.

Total goodwill includes [removed: 26] [added: 27] reporting units with individual amounts ranging from zero to [removed: $536] [added: $992] million.

We concluded that the fair value of each of our reporting units was substantially in excess of its carrying [removed: value] [added: value, with no impairment indicated] as of December 31, [removed: 2011, and thus no goodwill impairment was identified.][added: 2012.]

[removed: Roper conducts these reviews for all of its reporting units and] [added: Trade names are determined to have an] indefinite [removed: lived intangibles] [added: useful economic life and are not amortized, but separately tested for impairment] during the fourth quarter of the fiscal year or on an interim basis if an event occurs that [removed: it] [added: indicates the fair value] is more likely than not [removed: the fair value of the intangible asset is] below [removed: its] [added: the] carrying value.

[removed: Roper evaluates] [added: We evaluate] whether there has been an impairment of identifiable intangible assets with definite useful economic lives, or of the remaining life of such assets, when certain indicators of impairment are present.

| | | Years ended December 31, | | | | | | | | | [added: | |]

| | | [removed: 2011] [added: 2012] | | | [removed: 2010] | [added: 2011] | | [removed: 2009] | | [added: 2010] | [added: | |]

| Net sales | | | | | | | | | | | [added: | |]

| Industrial Technology | | $ | [removed: 737,356] [added: 795,240] | | [added: |] $ | [removed: 607,564] [added: 737,356] | | [added: |] $ | [removed: 536,219] [added: 607,564] | |

| Energy Systems and Controls(1) | | | [removed: 597,802] [added: 646,116] | | | [removed: 503,897] | [added: 597,802] | | [removed: 440,919] | | [added: 503,897 | |]

| Medical and Scientific Imaging(2) | | | [removed: 610,617] [added: 703,835] | | | [removed: 548,718] | [added: 610,617] | | [removed: 354,776] | | [added: 548,718 | |]

| RF Technology(3) | | | [removed: 851,314] [added: 848,298] | | | [removed: 725,933] | [added: 851,314] | | [removed: 717,754] | | [added: 725,933 | |]

| Total | | $ | [removed: 2,797,089] [added: 2,993,489] | | [added: |] $ | [removed: 2,386,112] [added: 2,797,089] | | [added: |] $ | [removed: 2,049,668] [added: 2,386,112] | |

| Gross profit: | | | | | | | | | | | [added: | |]

| Industrial Technology | | | [removed: 49.8] [added: 51.6] | % | | [removed: 51.0] | [added: 49.8 |] % | | [removed: 47.6] | [added: 51.0 |] % |

| Energy Systems and Controls | | | [removed: 55.5] [added: 56.3] | | | [removed: 53.7] | [added: 55.5] | | [removed: 53.1] | | [added: 53.7 | |]

| Medical and Scientific Imaging | | | [removed: 63.3] [added: 64.4] | | | [removed: 61.3] | [added: 63.3] | | [removed: 56.5] | | [added: 61.3 | |]

| RF Technology | | | [removed: 50.6] [added: 52.4] | | | [removed: 49.4] | [added: 50.6] | | [removed: 49.3] | | [added: 49.4 | |]

| Total | | | [removed: 54.2] [added: 55.8] | | | [removed: 53.4] | [added: 54.2] | | [removed: 50.9] | | [added: 53.4 | |]

| Operating profit: | | | | | | | | | | | [added: | |]

| Industrial Technology | | | [removed: 28.2] [added: 30.8] | % | | [removed: 26.7] | [added: 28.2 |] % | | [removed: 23.1] | [added: 26.7 |] % |

| Energy Systems and Controls | | | [removed: 26.4] [added: 27.8] | | | [removed: 23.9] | [added: 26.4] | | [removed: 21.0] | | [added: 23.9 | |]

| Medical and Scientific Imaging | | | [removed: 24.3] [added: 26.6] | | | [removed: 23.8] | [added: 24.3] | | [removed: 20.9] | | [added: 23.8 | |]

| RF Technology | | | [removed: 23.8] [added: 26.3] | | | [removed: 20.8] | [added: 23.8] | | [removed: 21.5] | | [added: 20.8 | |]

| Total | | | [removed: 25.6] [added: 27.9] | | | [removed: 23.6] | [added: 25.6] | | [removed: 21.7] | | [added: 23.6 | |]

| Corporate administrative expenses | | | [removed: (2.0] [added: (2.6] | )% | | [removed: (2.1] | [added: (2.0 |] )% | | [removed: (2.4] | [added: (2.1 |] )% |

| Income from continuing operations | | | [removed: 23.6] [added: 25.3] | | | [removed: 21.6] | [added: 23.6] | | [removed: 19.3] | | [added: 21.6 | |]

On August 22, 2012, we acquired 100% of the shares of Sunquest Information Systems, Inc. ("Sunquest"), a leading provider of diagnostic and laboratory software solutions to healthcare providers, in a $1.416 billion all-cash transaction.

We acquired Sunquest in order to complement and expand our medical platform.

On January 2, 2013, subsequent to the fourth quarter of 2012, the American Taxpayer Relief Act of 2012 (ATRA) was enacted which retroactively reinstated and extended certain tax provisions, including the Federal Research and Development Tax Credit from January 1, 2012 to December 31, 2013.

As a result, the Company expects its income tax provision for the first quarter of 2013 will include a discrete tax benefit, which is estimated to be approximately $3 million.

The ATRA also reinstated and extended the exclusion from U.S. federal taxable income of certain interest, dividends, rents and royalty income of foreign affiliates, as well as the tax benefits of the credits associated with that income.

This provision is retroactively reinstated to January 1, 2012 and, as a result, the Company expects its income tax provision for the first quarter of 2013 will include a discrete tax benefit which is estimated to be approximately $3 million.

However, negative industry or economic trends, disruptions to our business, actual results significantly below projections, unexpected significant changes or planned changes in the use of the assets, divestitures and market capitalization declines may have a negative effect on the fair value of our reporting units.

We conduct these reviews for all of our reporting units using the relief-from-royalty method, which we believe to be an acceptable methodology due to its common use by valuations specialists in determining the fair value of intangible assets.

This methodology assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these assets.

The fair value of each trade name is determined by applying a royalty rate to a projection of net sales discounted using a risk adjusted rate of capital.

Each royalty rate is determined based on the profitability of the reporting unit to which it relates and observed market royalty rates.

Sales growth rates are determined after considering current and future economic conditions, recent sales trends, discussions with customers, planned timing of new product launches or other variables.

Reporting units resulting from recent acquisitions generally represent the highest risk of impairment, which typically decreases as the businesses are integrated into our enterprise and positioned for improved future sales growth.

The assessment of fair value for impairment purposes requires significant judgments to be made by management.

Although our forecasts are based on assumptions that are considered reasonable by management and consistent with the plans and estimates management is using to operate the underlying businesses, there is significant judgment in determining the expected results attributable to the reporting units.

Changes in estimates or the application of alternative assumptions could produce significantly different results.

No impairment resulted from the annual reviews performed in 2012; however, the fair value of the trade names of one of our reporting units in the RF Technology segment could have fallen below the carrying value at December 31, 2012, had the assumed sales growth been less than that used in the assessment.

The reporting unit is a relatively recent acquisition, therefore we do not believe that impairment is probable; however, it is possible that the trade name could become impaired in the future, at which point we would be required to record a non-cash impairment charge to reduce the carrying level of the trade names at the reporting unit.

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| (1) | Includes results from the acquisition of United Controls Group, Inc. from September 26, 2011. |

The increase was the result of organic sales growth of 4%, contributions from acquisitions of 4% and an unfavorable effect from foreign exchange of 1%.

Acquisitions added $94.3 million in sales, while organic sales increased 1% due to increased sales in our medical and electron microscopy businesses, offset by declines in sales of scientific imaging products.

Selling, general and administrative expenses ("SG&A") as a percentage of net sales decreased to 37.8% in the year ended December 31, 2012 as compared to 39.0% in the year ended December 31, 2011 due to investments in new products in the medical businesses in 2011 that did not recur in 2012.

Operating margins were 26.6% in the year ended December 31, 2012 as compared to 24.3% in the year ended December 31, 2011.

The increase in organic sales was primarily due to increased demand in industrial process and nuclear plant inspection end markets.

The impact from foreign exchange was a negative 2%.

Gross margins were 56.3% in the year ended December 31, 2012, compared to 55.5% in the year ended December 31, 2011, due to operating leverage from higher sales volume.

SG&A expenses as a percentage of net sales were 28.4% as compared to 29.1% in the prior year due to operating leverage from higher sales volume.

Operating margins were 27.8% in the year ended December 31, 2012 as compared to 26.4% in the year ended December 31, 2011.

The increase was due to broad-based growth in nearly all businesses in the segment, with particular strength in our materials testing business and fluid handling businesses, offset in part by a negative 2% impact from foreign exchange.

Gross margins were 51.6% for the year ended December 31, 2012 as compared to 49.8% in the year ended December 31, 2011 due to operating leverage on higher sales volume as well as a $5.5 million one-time reduction to cost of goods sold at one of our businesses.

This reduction is due to the cumulative effect of an accounting system error which caused the cost of goods sold to be overstated for several years by quarterly and annually immaterial amounts.

SG&A expenses as a percentage of net sales were 20.8%, as compared to 21.5% in the prior year, due primarily to operating leverage on higher sales volume.

The resulting operating profit margins were 30.8% in the year ended December 31, 2012 as compared to 28.2% in the year ended December 31, 2011.

Organic sales were flat as growth in toll and traffic systems was offset by a large installation project in gas network monitoring during 2011 that has since been completed.

Gross margins were 52.4% in 2012 as compared to 50.6% in the prior year due to product mix.

SG&A as a percentage of sales in the year ended December 31, 2012 was 26.1%, a decrease from 26.8% in the prior year due to lower spending, particularly in selling expense related to toll projects.

On June 3, 2011, we purchased the assets of NDI Holding Corp. (“Northern Digital”), a provider of 3-D measurement technology for medical applications in computer-assisted surgery and computer-assisted therapy.

On September 26, 2011, we purchased the shares of United Controls Group, Inc. (“UCG”), a manufacturer of control systems in the oil and gas industry.

On December 1, 2011, we purchased the shares of Trinity Integrated Systems Ltd. (“Trinity”), a specialist provider of requirements capture, safety lifecycle management and engineering software tools, and safety and control system solutions to the oil and gas, industrial process and control markets.

Identifiable intangible assets that are determined to have an indefinite useful economic life are not amortized, but separately tested for impairment annually using a one-step fair value based approach.

No impairment resulted from the annual reviews performed in 2011.

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| (1) | Includes results from the acquisitions of UCG from September 26, 2011 and Trinity from December 1, 2011. |

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Our overall gross profit percentage was 54.2% for the year ended December 31, 2011, as compared to 53.4% for the year ended December 31, 2010.

Our Energy Systems and Controls and RF Technology segments both experienced higher gross margins due to higher sales volume while maintaining a relatively flat cost structure.

Our Industrial Technology segment gross margins decreased slightly due to product mix.

Selling, general and administrative (“SG&A”) expenses increased $94.2 million to $855.0 million in 2011 as compared to $760.8 million in 2010, while decreasing as a percentage of net sales to 30.6% for the year ended December 31, 2011 as compared to 31.9% for the year ended December 31, 2010.

The decrease in percentage of net sales is due to operating leverage on higher sales volume, offset in part by increased research and development spending of $19 million as we continued to invest in new product development.

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The increase was the result of internal sales growth of 7.8% as well as a full year of sales from our 2009 acquisitions of UTS and Verathon and five months of sales from iTrade.

Net sales of these acquisitions accounted for approximately $179 million of additional sales in 2010 over 2009.

Acquisitions added $147.9 million in sales, while organic sales increased 12.5% due to broad-based increases in medical, imaging and handheld computer markets.

The increase in sales was due to broad-based recovery in the markets served by the segment which led to increased demand for our instruments, valves and sensors sold into these markets.

The increase was due to a broad based economic recovery in the industrial end markets, strong sales growth in our Neptune water meter business and increased sales in our materials testing businesses as customer manufacturing facilities which had experienced slowdowns or temporary shutdowns in 2009 came back on line or increased production.

Internal sales decreased 3.2% due to delays in transportation projects due to temporary reductions in state and local governmental funding.

Partial year results from the acquisition of iTrade and full-year results of UTS added 4.3%.

In 2009, in order to mitigate the effects of the weakened global economy on our financial results, we committed to certain severance and related cost-control actions.

The cost of these actions during the year ended December 31, 2009 totaled $12.4 million, $4.1 million of which was recorded as cost of goods sold and the remaining $8.3 million as SG&A expense.

We had no additional material severance and related cost control actions in 2010 or 2011.

Our overall gross profit percentage was 53.4% for the year ended December 31, 2010, as compared to 50.9% for the year ended December 31, 2009.

Our Industrial Technology and Energy Systems and Controls segments both experienced higher gross margins due to higher sales volume while maintaining a relatively flat cost structure.

Our RF Technology segment gross margins were relatively unchanged.

Selling, general and administrative expenses increased $113.1 million to $760.8 million in 2010 as compared to $647.7 million in 2009, while increasing as a percentage of net sales to 31.9% for the year ended December 31, 2010 as compared to 31.6% for the year ended December 31, 2009.

The full year inclusion of Verathon accounted for $72 million of the increase.

In addition, our research and development spending increased $19 million as we continued to invest in new product development.

Other income for the year ended December 31, 2009 was $3.5 million, primarily due to a pre-tax gain of $4.1 million related to the sale of certain assets of our satellite communications business, partially offset by a $0.4 million pre-tax debt extinguishment charge for the early repayment of our term loan and foreign exchange losses at our non-U.S. based companies.

This decrease was due primarily to certain foreign tax planning initiatives and an increase in the Section 199 qualifying production activities deduction.

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| Industrial Technology | | $ | 669,882 | | $ | 528,208 | | 26.8 | % |

| Energy Systems and Controls | | | 538,861 | | | 427,003 | | 26.2 | |

| Medical and Scientific Imaging | | | 578,957 | | | 349,132 | | 65.8 | |

| RF Technology | | | 748,536 | | | 719,666 | | 4.0 | |

| Total | | $ | 2,536,236 | | $ | 2,024,009 | | 25.3 | % |

In our RF Technology segment, internal orders decreased by 1.1%, which was more than offset by acquisition growth.

At December 31, [removed: 2011,] [added: 2012,] we had a combination of fixed and floating rate borrowings.

Our credit facility contains a [removed: $750 million variable rate revolver; however, there were no outstanding] [added: $1.5 billion variable-rate] revolver [added: with outstanding] borrowings [added: of $100 million] at December 31, [removed: 2011.][added: 2012.]

Our [added: $400 million senior notes due 2017,] $500 million senior notes due 2019 [added: and $500 million senior notes due 2022] have [removed: a] fixed interest [removed: rate] [added: rates] of [removed: 6.25%,] [added: 1.850%, 3.125%] and [added: 6.250%, respectively, and] our [removed: $67] [added: $12] million senior unsecured convertible notes have a fixed interest rate of 3.75%.

The swaps, which are designated as fair value hedges, effectively convert the notes to a [removed: weighted average variable rate] [added: weighted-average variable-rate] obligation with a spread of 4.377% plus LIBOR.

At December 31, [removed: 2011,] [added: 2012,] the prevailing market rates for our [removed: long term] [added: long-term] notes were between [removed: 2.5%] [added: 0.3% higher] and [removed: 5.1%] [added: 4.5%] lower than the fixed rates on our debt instruments.

At December 31, [removed: 2011,] [added: 2012,] our outstanding variable-rate [removed: borrowing was] [added: borrowings were] the [added: $100 million of outstanding revolver borrowings and the] $500 million senior notes due 2013.

An increase in interest rates of 1% would increase our annualized interest costs by [removed: $5.0] [added: $6.0] million.

Sales by companies whose functional currency was not the U.S. dollar were [removed: 27%] [added: 25%] of our total sales [added: in 2012] and [removed: 63%] [added: 60%] of these sales were by companies with a European functional currency.

The U.S. dollar was [removed: weaker] [added: stronger] against most currencies throughout most of [removed: 2011] [added: 2012] as compared to [removed: 2010,] [added: 2011,] which resulted in [removed: an increase] [added: a decrease] in sales of [removed: 1.4%] [added: 1.0%] due to foreign currency exchange.

If these currency exchange rates had been 10% different throughout [removed: 2011] [added: 2012] compared to currency exchange rates actually experienced, the impact on our net earnings would have been approximately [removed: 2.7%.][added: 2.5%.]

The changes in these currency exchange rates relative to the U.S. dollar at December 31, [removed: 2011] [added: 2012] compared to currency exchange rates at December 31, [removed: 2010] [added: 2011] resulted in a [removed: decrease] [added: pre-tax increase] in net assets of [removed: $11.0] [added: $23.6] million that was reported as a component of comprehensive earnings, [removed: $5.1] [added: $12.7] million of which was attributed to goodwill.

We are a diversified growth company that designs, manufactures and distributes radio frequency [removed: (“RF”) products] [added: ("RF") products, services] and [removed: services,] [added: application software,] industrial technology products, energy systems and controls and medical and scientific imaging products and software.

We market these products and services to [removed: selected segments of] a broad range of markets including RF applications, medical, water, energy, research, education, software-as-a-service ("SaaS")-based information networks, security and other niche markets.

We believe our market positions are attributable to the technical sophistication of our [removed: products,] [added: products and software,] the applications expertise used to create our advanced products and systems, and our distribution and service capabilities.

Diversified End Markets and Geographic Reach \- We have a global presence, with sales of products [removed: manufactured and exported from the United States (“U.S.”) and manufactured abroad and sold] to customers outside the U.S. totaling $1.2 billion in [removed: 2011.][added: 2012.]

Information regarding our international operations is set forth in Note [removed: 15] [added: 14] of the notes to Consolidated Financial Statements included in this Annual Report.

Our research and development spending was [removed: $121.7] [added: $125.9] million in [removed: 2011] [added: 2012] as compared to [removed: $102.4] [added: $121.7] and [removed: $83.4] [added: $102.4] million in [removed: 2010] [added: 2011] and [removed: 2009,] [added: 2010,] respectively.

Research and development expense as a percentage of sales [removed: increased] [added: decreased] to [removed: 4.4%] [added: 4.2%] in [removed: 2011] [added: 2012] from [removed: 4.3%] [added: 4.4%] in [removed: 2010.][added: 2011.]

Financial information about our business segments is presented in Note [removed: 15] [added: 14] of the notes to Consolidated Financial Statements.

Our Medical and Scientific Imaging segment principally offers products and software in medical applications, [added: and] high performance digital imaging [removed: products and software and handheld and vehicle mount computers.][added: products.]

These products and solutions are provided through [removed: eight] [added: nine] operating units.

For [removed: 2011,] [added: 2012,] this segment had net sales of [removed: $610.6] [added: $703.8] million, representing [removed: 21.8%] [added: 23.5%] of our total net sales.

We [removed: also] design and manufacture a non-invasive instrument for portable ultrasound bladder volume measurement and a video laryngoscope designed to enable rapid intubation even in the most difficult settings.

Digital Imaging Products and Software - We manufacture and sell extremely sensitive, high-performance [added: electron filters,] charged couple device [removed: (“CCD”)] [added: ("CCD")] and complementary metal oxide semiconductor [removed: (“CMOS”)] [added: ("CMOS")] cameras, detectors and related software for a variety of scientific and industrial uses, which require high resolution and/or high speed digital video, including [removed: transmission] electron microscopy and spectroscopy applications.

[removed: Backlog –] Our Medical and Scientific Imaging segment companies have lead times of up to several months on many of their product sales, although standard products are often shipped within two weeks of receipt of order.

Distribution and [removed: Sales - Distribution and] sales occur through direct sales [removed: personnel, manufacturers’ representatives, value added resellers (“VARs”), OEMs] [added: offices, manufacturers' representatives] and distributors.

For [removed: 2011,] [added: 2012,] this segment had net sales of [removed: $597.8] [added: $646.1] million, representing [removed: 21.4%] [added: 21.6%] of our total net sales.

Fluid Properties Testing Equipment - We manufacture and sell [removed: automated and manual] test equipment to determine physical and elemental properties, such as sulfur and nitrogen content, flash point, viscosity, freeze point and distillation range of liquids and gases [added: primarily] for the petroleum [removed: and other industries.][added: industry.]

Industrial Valves and Controls - We manufacture and distribute [removed: a variety of] valves, sensors, switches and control products used on engines, compressors, turbines and other powered equipment for the oil and gas, pipeline, power generation, marine engine and general industrial markets.

These solutions are applied principally in [added: nuclear] energy markets.

[removed: Backlog -] The Energy Systems and Controls operating [removed: units’] [added: units'] sales reflect a combination of standard products and large engineered projects.

Our Industrial Technology segment produces [removed: water and] fluid handling pumps, equipment and consumables for materials analysis, leak testing equipment, flow measurement and metering equipment and water meter and automatic meter reading [removed: (“AMR”)] [added: ("AMR")] products and systems.

For [removed: 2011,] [added: 2012,] this segment had net sales of [removed: $737.4] [added: $795.2] million, representing [removed: 26.4%] [added: 26.6%] of our total net sales.

[removed: Water and] Fluid Handling Pumps - We manufacture and sell a wide variety of pumps.

These pumps vary significantly in complexity and in pumping method employed, which allows for the movement and application of a diverse range of [removed: liquids and solids including] low and high viscosity liquids, high solids content slurries and chemicals.

Our pumps are used in [removed: large and diverse sets of] end markets such as oil and gas, agricultural, water and wastewater, chemical and general industrial.

These products are used mostly within the [removed: academic, government research, electronics,] material science, [removed: basic materials, steel] [added: steel, automotive, electronics, mining] and [removed: automotive] [added: research] end-user markets.

Water Meter and AMR Products and Systems - We manufacture and distribute [removed: several classes of] water meter products serving the residential, commercial and industrial water management markets, and several lines of automatic meter reading products and systems serving these markets.

[removed: Backlog -] The Industrial Technology operating [removed: units’] [added: units'] sales reflect a combination of standard products and specially engineered, application-specific products.

Standard products are typically shipped within two weeks of receipt of [removed: order, with certain valve and pump products shipped on an immediate basis.][added: order.]

This segment had sales of [removed: $851.3] [added: $848.3] million for the year ended December 31, [removed: 2011,] [added: 2012,] representing [removed: 30.4%] [added: 28.3%] of our total net sales.

Card Systems/Integrated Security Solutions - We provide card systems and integrated security solutions [added: primarily] to [removed: education,] [added: education and] health care [removed: and other] markets.

[removed: Backlog -] The RF Technology operating [removed: units’] [added: units'] sales reflect a combination of standard products, large engineered projects, and multi-year operations and maintenance contracts.

Our operations and properties are subject to laws and regulations relating to environmental protection, including [removed: laws and regulations] [added: those] governing air emissions, water discharges, waste management and workplace safety.

We use, generate and dispose of hazardous substances and waste in our operations [removed: and, as a result,] [added: and] could be subject to material liabilities relating to the investigation and clean-up of contaminated properties and related claims.

In addition, new laws and regulations, [removed: stricter enforcement of existing laws and regulations,] the discovery of previously unknown contamination or the imposition of new requirements could increase our costs or subject us to new or increased liabilities.

No customer accounted for 10% or more of net sales for [removed: 2011] [added: 2012] for any [removed: segment] [added: of our segments] or for Roper as a whole.

Competitors might be large or small in size, often depending on the [removed: life cycle and maturity] [added: size] of the [removed: technology employed.][added: niche market we serve.]

As of December 31, [removed: 2011,] [added: 2012,] we had [removed: approximately 8,570 total] [added: 9,475] employees, with [removed: approximately 6,060] [added: 6,707] located in the United States.

[removed: Approximately 210 of our] [added: We have 214] employees [added: who] are subject to collective bargaining agreements.

The information posted on our website is not incorporated into [removed: the] [added: this] Annual Report.

On August 22, 2012, we acquired 100% of the shares of Sunquest Information Systems, Inc. ("Sunquest"), a leading provider of diagnostic and laboratory software solutions to healthcare providers, in a $1.416 billion all-cash transaction.

We acquired Sunquest in order to complement and expand our medical platform.

We also provide diagnostic and laboratory software solutions to healthcare providers.

We also provide an integrated nutrition management solution used by food service customers.

Backlog

Our policy is to include only firm unfilled orders shippable within twelve months in backlog.

Backlog was $828 million at December 31, 2012, and $785 million at December 31, 2011.

Distribution and Sales

In addition, our Medical and Scientific Imaging segment also sells through value added resellers ("VARs") and OEMs.

The percentage has increased as the mix of our businesses shifts to higher technology, medical and software platforms.

Handheld and Vehicle Mount Computers and Software - We manufacture and sell fully rugged handheld and vehicle mount computers for utility (principally water management) and non-utility markets.

The segment’s backlog of firm unfilled orders shippable within twelve months, including blanket purchase orders, totaled $118.6 million at December 31, 2011, as compared to $103.8 million at December 31, 2010.

This segment’s backlog of firm unfilled orders shippable within twelve months totaled $120.5 million at December 31, 2011 compared to $104.5 million at December 31, 2010.

Distribution and Sales - Distribution and sales occur through direct sales offices, manufacturers’ representatives and distributors.

This segment’s backlog of firm unfilled orders shippable within twelve months, including blanket purchase orders, totaled $141.8 million at December 31, 2011, as compared to $114.0 million at December 31, 2010.

Distribution and Sales - Distribution and sales occur through direct sales personnel, manufacturers’ representatives and distributors.

In the education and health care markets, we also provide an integrated nutrition management solution.

This segment’s backlog of firm unfilled orders shippable within twelve months totaled $447.4 million at December 31, 2011 compared to $463.1 million at December 31, 2010.

Information pertaining to legal proceedings can be found in Note 13 to the Consolidated Financial Statements included in this Annual Report, and is incorporated by reference herein.

We are defendants in various lawsuits involving product liability, employment practices and other matters, none of which we believe will have a material adverse effect on our consolidated financial position or results of operations.

The majority of such claims are subject to insurance coverage.

We and/or one of our subsidiaries are named as defendants, along with many other companies, in asbestos-related personal injury or wrongful death actions.

The allegations in these actions are vague, general and speculative.

Given the state of these claims, it is not possible to determine the potential liability, if any.

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

For the fiscal year ended December 31, [removed: 2011][added: 2012]

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

For the transition period from [removed: ___] [added: ______________] to [removed: ___][added: ______________]

Based on the closing sale price on the New York Stock Exchange on June 30, [removed: 2011,] [added: 2012,] the aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant was: [removed: $8,071,156,496.][added: $9,748,714,212.]

Number of shares of [removed: registrant’s] [added: registrant's] Common Stock outstanding as of February [removed: 17, 2012: 96,892,635.][added: 20, 2013: 98,891,400.]

Portions of the [removed: registrant’s] [added: registrant's] Proxy Statement to be furnished to Stockholders in connection with its Annual Meeting of Stockholders to be held on [removed: June 4, 2012,] [added: May 24, 2013,] are incorporated by reference into Part III of this Annual Report on Form [removed: 10-K][added: 10-K.]

FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, [removed: 2011][added: 2012]

10-K 1 roper10-k_2012.htm

10-K 1 cy2011_10-k.htm

| --- | --- |

Quantitative and Qualitative Disclosures about Market Risk [removed: 25][added: 26]

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure [removed: 55][added: 54]

Controls and Procedures [removed: 55][added: 54]

Other Information [removed: 55][added: 54]

Directors, Executive Officers and Corporate Governance [removed: 56][added: 55]

Executive Compensation [removed: 56][added: 55]

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters [removed: 56][added: 55]

Certain Relationships and Related Transactions and Director Independence [removed: 56][added: 55]

Principal Accountant Fees and Services [removed: 56][added: 55]

Exhibits and Financial Statement Schedules [removed: 57][added: 56]

| | Signatures | [removed: 60] [added: 59] |

All statements that are not historical facts are [removed: “forward-looking statements.” The] [added: "forward-looking statements." Forward-looking statements may be indicated by] words [removed: “estimate,” “plan,” “project,” “intend,” “expect,” “believe,” “anticipate,”] [added: or phrases such as "anticipate," "estimate," "plans," "expects," "projects," "should," "will," "believes" or "intends"] and similar [removed: expressions identify forward-looking statements.][added: words and phrases.]

[removed: Forward-looking statements are estimates and projections reflecting our best judgment and] [added: They] involve [removed: a number of] risks and uncertainties that could cause actual results to differ materially from those [removed: suggested by the] [added: expressed or implied in any] forward-looking [removed: statements.][added: statement.]

Examples of forward-looking statements in this report include but are not limited to [added: statements regarding operating results, the success of] our [added: internal operating plans, our] expectations regarding our ability to generate operating cash flows and reduce debt and associated interest [removed: expense] [added: expense, profit] and [added: cash flow expectations, the prospects for newly acquired businesses to be integrated and contribute to future growth and] our expectations regarding growth through acquisitions.

These statements reflect management's current beliefs and are not guarantees of future performance.

These forward-looking statements include, but are not limited to, statements regarding our expected financial position, business, financing plans, business strategy, business prospects, revenues, working capital, liquidity, capital needs, interest costs and income, in each case relating to our company as a whole, as well as statements regarding acquisitions, potential acquisitions and the benefits of acquisitions.

These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information.

Our corporate offices, consisting of [removed: 22,000] [added: 24,000] square feet of leased space, are located at 6901 Professional Parkway East, Sarasota, Florida.

We have established [removed: 114] [added: 120] principal locations around the world to support our operations, of which [removed: 53] [added: 51] are [removed: manufacturing] [added: manufacturing, assembly and testing] facilities, and the remaining [removed: 61] [added: 69] locations provide sales, service and administrative support functions.

The following table summarizes the size, location and usage of our principal properties as of December 31, [removed: 2011.][added: 2012.]

| [removed: Industrial Technology] | | (amounts in thousands of square feet) | | | |

| | Europe | [removed: 10] [added: 30] | | 20 | 128 |

| | Asia | [removed: 6] [added: 19] | | [removed: 30] [added: 61] | [removed: 34] [added: 33] |

| | Europe | [removed: 17] [added: 31] | | 44 | \- |

| | Europe | [removed: 15] [added: 14] | | [removed: 5] [added: 7] | 16 |

| Industrial Technology | | | | | |

| | US | 57 | | 288 | 504 |

| | US | 45 | | 254 | \- |

| | US | 184 | | 240 | 127 |

| | Canada | \- | | 108 | \- |

| | Asia | 28 | | \- | \- |

| | US | 799 | | 96 | \- |

| | US | 48 | | 294 | 524 |

| | US | \- | | 262 | \- |

| | US | 89 | | 212 | 127 |

| | Canada | \- | | 151 | \- |

| | US | 789 | | 123 | \- |

The table below sets forth the range of high and low sales prices for our common stock as reported by the NYSE as well as cash dividends declared during each of our [removed: 2011] [added: 2012] and [removed: 2010] [added: 2011] quarters.

Based on information available to us and our transfer agent, we believe that as of February [removed: 17, 2012] [added: 19, 2013] there were [removed: 205] [added: 185] record holders of our common stock.

In November [removed: 2011,] [added: 2012,] our Board of Directors increased the quarterly dividend paid [removed: January 27,] [added: December 28,] 2012 to [removed: $0.1375] [added: $0.165] per share from [removed: $0.1100] [added: $0.1375] per share, an increase of [removed: 25.0%.][added: 20%.]

Recent Sales of Unregistered Securities - In [removed: 2011,] [added: 2012,] there were no sales of unregistered securities.

The following graph compares, for the five year period ended December 31, [removed: 2011,] [added: 2012,] the cumulative total stockholder return for our common stock, the Standard and [removed: Poor’s] [added: Poor's] 500 Stock Index (the [removed: “S&P 500”)] [added: "S&P 500")] and the Standard and [removed: Poor’s] [added: Poor's] 500 Industrials Index (the [removed: “S&P] [added: "S&P] 500 [removed: Industrials”).][added: Industrials").]

Measurement points are the last trading day of each of our fiscal years ended December 31, [removed: 2006,] 2007, 2008, 2009, [removed: 2010] [added: 2010, 2011] and [removed: 2011.][added: 2012.]

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

| 2012 | 4th Quarter | $ 113.14 | $ 106.31 | $ 0.1650 |

| | 3rd Quarter | 111.08 | 93.73 | 0.1375 |

| | 2nd Quarter | 102.99 | 95.24 | 0.1375 |

| | 1st Quarter | 100.71 | 88.02 | 0.1375 |

| | 12/31/07 | 12/31/08 | 12/31/09 | 12/31/10 | 12/31/11 | 12/31/12 |

| Roper Industries, Inc. | 100.00 | 69.79 | 84.83 | 124.61 | 142.41 | 184.08 |

| S&P 500 | 100.00 | 63.00 | 79.67 | 91.67 | 93.61 | 108.59 |

| S&P 500 Industrials | 100.00 | 60.08 | 72.65 | 92.07 | 91.53 | 105.58 |

| 2010 | 4th Quarter | $ 78.43 | $ 64.98 | $ 0.1100 |

| | 3rd Quarter | 65.59 | 54.78 | 0.0950 |

| | 2nd Quarter | 63.91 | 55.47 | 0.0950 |

| | 1st Quarter | 58.34 | 50.08 | 0.0950 |

| | 12/31/06 | 12/31/07 | 12/31/08 | 12/31/09 | 12/31/10 | 12/31/11 |

| Roper Industries, Inc. | 100.00 | 125.05 | 87.27 | 106.07 | 155.82 | 178.09 |

| S&P 500 | 100.00 | 105.49 | 66.46 | 84.05 | 96.71 | 98.75 |

| S&P 500 Industrials | 100.00 | 112.03 | 67.30 | 81.39 | 103.15 | 102.54 |

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

| | | [removed: 2011(1)] [added: 2012(1)] | | | [removed: 2010(2)] [added: 2011(2)] | | | [removed: 2009(3)] [added: 2010(3)] | | | [removed: 2008(4)] [added: 2009(4)] | | | [removed: 2007(5)] [added: 2008(5)] | | |

| Net sales | | $ | [removed: 2,797,089] [added: 2,993,489] | | $ | [removed: 2,386,112] [added: 2,797,089] | | $ | [removed: 2,049,668] [added: 2,386,112] | | $ | [removed: 2,306,371] [added: 2,049,668] | | $ | [removed: 2,102,049] [added: 2,306,371] | |

| Gross profit | | | [added: 1,671,717 | | |] 1,515,564 | | | 1,275,126 | | | 1,043,138 | | | 1,188,288 | | [removed: | 1,058,395 | |]

| Income from operations | | | [added: 757,587 | | |] 660,539 | | | 514,294 | | | 395,396 | | | 486,161 | | [removed: | 438,354 | |]

| Net earnings | | | [added: 483,360 | | |] 427,247 | | | 322,580 | | | 239,481 | | | 281,874 | | [removed: | 245,705 | |]

| Basic earnings per share | | $ | [removed: 4.45] [added: 4.95] | | $ | [removed: 3.42] [added: 4.45] | | $ | [removed: 2.64] [added: 3.42] | | $ | [removed: 3.15] [added: 2.64] | | $ | [removed: 2.78] [added: 3.15] | |

| Diluted earnings per share | | | [added: 4.86 | | |] 4.34 | | | 3.34 | | | 2.58 | | | 3.01 | | [removed: | 2.64 | |]

| Dividends declared | | | [added: 0.5775 | | |] 0.4675 | | | 0.3950 | | | 0.3425 | | | 0.3000 | | [removed: | 0.2675 | |]

| Working capital [added: (6)] | | $ | [removed: 561,277] [added: 159,332] | | $ | [removed: 458,446] [added: 561,277] | | $ | [removed: 392,734] [added: 458,446] | | $ | [removed: 239,400] [added: 392,734] | | $ | [removed: 291,047] [added: 239,400] | |

| Total assets | | | [added: 7,071,104 | | |] 5,319,417 | | | 5,069,524 | | | 4,327,736 | | | 3,971,538 | | [removed: | 3,453,184 | |]

| Long-term debt, less current portion | | | [added: 1,503,107 | | |] 1,015,110 | | | 1,247,703 | | | 1,040,962 | | | 1,033,689 | | [removed: | 727,489 | |]

| [removed: Stockholders’] [added: Stockholders'] equity | | | [added: 3,687,726 | | |] 3,195,096 | | | 2,750,907 | | | 2,421,490 | | | 2,003,934 | | [removed: | 1,794,643 | |]

| [removed: (1)] [added: (2)] | Includes results from the acquisitions of NDI Holding Corp. from June 3, 2011, United Controls Group, Inc. from September 26, 2011 and Trinity Integrated Systems Ltd. from December 1, 2011. |

| [removed: (2)] [added: (3)] | Includes results from the acquisitions of Heartscape, Inc. from February 22, 2010 and iTradeNetwork, Inc. from July 27, 2010. |

| [removed: (3)] [added: (4)] | Includes results from the acquisitions of United Toll Systems, LLC from October 30, 2009 and Verathon, Inc. from December 3, 2009. |

| [removed: (4)] [added: (5)] | Includes results from the acquisitions of CBORD Holdings Corp. from February 20, 2008, Chalwyn Ltd. from June 18, 2008, Getloaded.com, LLC from July 17, 2008, Horizon Software Holdings, Inc. from August 27, 2008 and Technolog Holdings Ltd. from September 10, 2008. |

| (1) | Includes results from the acquisition of Sunquest Information Systems, Inc. from August 22, 2012. |

| (6) | At December 31, 2012, there were $500 million of senior notes outstanding that mature on August 15, 2013, thus requiring a classification as short-term debt, included in working capital. |

| --- | --- |

| (5) | Includes results from the acquisitions of JLT Mobile Computers, Inc. from February 21, 2007, DJ Instruments from February 28, 2007, Roda Deaco Valve, Ltd. from March 22, 2007, Dynamic Instruments, Inc. from June 21, 2007, and Black Diamond Advanced Technology, LLC from September 24, 2007. |

| Consolidated Balance Sheets as of December 31, [removed: 2011] [added: 2012] and [removed: 2010] [added: 2011] | 29 |

| Consolidated Statements of Earnings for the Years ended December 31, [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009] [added: 2010] | 30 |

| Consolidated Statements of [removed: Stockholders’] [added: Stockholders'] Equity [removed: and Comprehensive Earnings] for the Years ended December 31, [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009] [added: 2010] | [removed: 31] [added: 32] |

| Consolidated Statements of Cash Flows for the Years ended December 31, [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009] [added: 2010] | [removed: 32] [added: 33] |

| Schedule II - Consolidated Valuation and Qualifying Accounts for the Years ended December 31, [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009] [added: 2010] | [removed: 54] [added: 53] |

To the [removed: Shareholders] [added: Stockholders] of Roper Industries, Inc.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of earnings, of stockholders' equity and comprehensive earnings and of cash flows, present fairly, in all material respects, the financial position of Roper Industries, Inc. and its subsidiaries at December [removed: 31, 2011] [added: 31,2012] and December 31, [removed: 2010,] [added: 2011,] and the results of their operations and their cash flows for each of the three years in the period ended December 31, [removed: 2011] [added: 2012] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2011,] [added: 2012,] based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

As described in Management's Report on Internal Control over Financial Reporting, management has excluded [removed: NDI Holding Corp., United Controls Group, Inc., and Trinity Integrated Systems Ltd.] [added: acquisitions completed during 2012] from its assessment of internal control over financial reporting as of December 31, [removed: 2011,] [added: 2012] because they were acquired by the Company in purchase business combinations during [removed: 2011.][added: 2012.]

We have also excluded [removed: NDI Holding Corp., United Controls Group, Inc., and Trinity Integrated Systems Ltd.] [added: acquisitions completed during 2012] from our audit of internal control over financial reporting.

[removed: NDI Holding Corp., United Controls Group, Inc., and Trinity Integrated Systems Ltd.] [added: These acquisitions] are wholly-owned subsidiaries whose [removed: aggregated] total assets and total revenues represent [removed: 0.5%] [added: 2.1%] and [removed: 1.1%] [added: 1.1%,] respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, [removed: 2011.][added: 2012.]

December 31, [removed: 2011] [added: 2012] and [removed: 2010][added: 2011]

| | | [added: 2012 | | | |] 2011 | | | | 2010 | | |

| Cash and cash [removed: equivalents] [added: equivalents, beginning of year] | | [removed: $] | 338,101 | | | [removed: $] | 270,394 | | [added: | | 167,708 | |]

| Accounts receivable, net | | | [removed: 439,134] [added: 526,408] | | | | [removed: 403,337] [added: 439,134] | |

| Inventories, net | | | [removed: 204,758] [added: 190,867] | | | | [removed: 178,559] [added: 204,758] | |

| Deferred taxes | | | [removed: 38,004] [added: 41,992] | | | | [removed: 32,894] [added: 38,004] | |

| Unbilled receivables | | | [removed: 63,829] [added: 72,193] | | | | [removed: 75,620] [added: 63,829] | |

| Other current assets | | | [removed: 31,647] [added: 43,492] | | | | [removed: 37,287] [added: 31,647] | |

| Total current assets | | | [removed: 1,115,473] [added: 1,245,542] | | | | [removed: 998,091] [added: 1,115,473] | |

| Property, plant and equipment, net | | | [removed: 108,775] [added: 110,397] | | | | [removed: 103,487] [added: 108,775] | |

| Goodwill | | | [removed: 2,866,426] [added: 3,868,857] | | | | [removed: 2,727,780] [added: 2,866,426] | |

| Other intangible assets, net | | | [removed: 1,094,142] [added: 1,698,867] | | | | [removed: 1,104,513] [added: 1,094,142] | |

| Deferred taxes | | | [removed: 63,006] [added: 78,644] | | | | [removed: 57,850] [added: 63,006] | |

| Other assets | | | [removed: 71,595] [added: 68,797] | | | | [removed: 77,803] [added: 71,595] | |

| Total assets | | $ | [removed: 5,319,417] [added: 7,071,104] | | | $ | [removed: 5,069,524] [added: 5,319,417] | |

| Accounts payable | | $ | [removed: 141,943] [added: 138,340] | | | $ | [removed: 137,778] [added: 141,943] | |

| Income taxes payable | | | [removed: 8,895] [added: \-] | | | | [removed: \-] [added: 8,895] | |

| Deferred taxes | | | [removed: 10,548] [added: 3,868] | | | | [removed: 10,445] [added: 10,548] | |

| Current portion of long-term debt, net | | | [removed: 69,906] [added: 519,015] | | | | [removed: 93,342] [added: 69,906] | |

| Total current liabilities | | | [removed: 554,196] [added: 1,086,210] | | | | [removed: 539,645] [added: 554,196] | |

| Long-term debt, net of current portion | | | [removed: 1,015,110] [added: 1,503,107] | | | | [removed: 1,247,703] [added: 1,015,110] | |

| Deferred taxes | | | [removed: 482,603] [added: 707,278] | | | | [removed: 465,001] [added: 482,603] | |

| Other liabilities | | | [removed: 72,412] [added: 86,783] | | | | [removed: 66,268] [added: 72,412] | |

| Total liabilities | | | [removed: 2,124,321] [added: 3,383,378] | | | | [removed: 2,318,617] [added: 2,124,321] | |

| Commitments and contingencies (Note [removed: 14)] [added: 13)] | | | | | | | | |

| Preferred stock, $0.01 par value per share; [removed: 2,000] [added: 1,000] shares authorized; none outstanding | | | \- | | | | \- | |

| Common stock, $0.01 par value per share; 350,000 shares authorized; [removed: 98,684] [added: 100,588] shares issued and [removed: 96,678] [added: 98,604] outstanding at December 31, [removed: 2011] [added: 2012] and [removed: 97,122] [added: 98,684] shares issued and [removed: 95,088] [added: 96,678] outstanding at December 31, [removed: 2010] [added: 2011] | | | [removed: 987] [added: 1,006] | | | | [removed: 971] [added: 987] | |

| Additional paid-in capital | | | [removed: 1,117,093] [added: 1,158,001] | | | | [removed: 1,045,286] [added: 1,117,093] | |

| Retained earnings | | | [removed: 2,063,110] [added: 2,489,858] | | | | [removed: 1,680,849] [added: 2,063,110] | |

| Consolidated Statements of Comprehensive Income for the Years ended December 31, 2012, 2011 and 2010 | 31 |

February 25, 2013

| Cash and cash equivalents | | $ | 370,590 | | | $ | 338,101 | |

| Accrued compensation | | | 110,724 | | | | 105,958 | |

| Other accrued liabilities | | | 128,351 | | | | 122,185 | |

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

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

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years ended December 31, 2012, 2011 and 2010

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

| Other comprehensive income, net of tax: | | | | | | | | | | | | |

| Foreign currency translation adjustments | | | 23,633 | | | | (10,178 | ) | | | (19,967 | ) |

| Unrecognized pension gain | | | 1,104 | | | | \- | | | | \- | |

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

| Total other comprehensive income/(loss), net of tax | | | 24,737 | | | | (10,178 | ) | | | (19,967 | ) |

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

| Comprehensive income | | | 508,097 | | | | 417,069 | | | | 302,613 | |

Years ended December 31, 2012, 2011 and 2010

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

| Net earnings | | \- | | | \- | | | \- | | | 483,360 | | | | \- | | | \- | | | 483,360 | |

| Stock option exercises | | 1,389 | | | 14 | | | 56,086 | | | \- | | | | \- | | | \- | | | 56,100 | |

| Treasury stock sold | | 22 | | | \- | | | 1,977 | | | \- | | | | \- | | | 218 | | | 2,195 | |

| Restricted stock activity | | 187 | | | 2 | | | (18,424 | ) | | \- | | | | \- | | | \- | | | (18,422 | ) |

| Deferred pension gain | | \- | | | \- | | | \- | | | \- | | | | 1,104 | | | \- | | | 1,104 | |

| Balances at December 31, 2012 | | 98,604 | | $ | 1,006 | | $ | 1,158,001 | | $ | 2,489,858 | | | $ | 58,537 | | $ | (19,676 | ) | $ | 3,687,726 | |

Years ended December 31, 2012, 2011 and 2010

| Net earnings | | $ | 483,360 | | | $ | 427,247 | | | $ | 322,580 | |

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

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

| Redemption premium on convertible debt | | | (76,641 | ) | | | \- | | | | \- | |

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

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

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

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

See accompanying notes to consolidated financial statements.

ROPER INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years ended December 31, 2012, 2011 and 2010

All significant intercompany accounts and transactions have been eliminated.

| --- | --- |

February 24, 2012

| | | | | | | | | |

| Accrued liabilities | | | 322,904 | | | | 298,080 | |

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

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

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

| Balances at December 31, 2008 | 89,721 | | $ | 919 | | $ | 815,736 | | $ | 1,187,467 | | $ | 21,513 | | $ | (21,701 | ) | $ | 2,003,934 | | $ | 194,655 | |

| Net earnings | \- | | | \- | | | \- | | | 239,481 | | | \- | | | \- | | | 239,481 | | $ | 239,481 | |

| Stock option exercises | 421 | | | 4 | | | 10,502 | | | \- | | | \- | | | \- | | | 10,506 | | | \- | |

| Treasury stock sold | 38 | | | \- | | | 1,312 | | | \- | | | \- | | | 381 | | | 1,693 | | | \- | |

| Restricted stock activity | 87 | | | 1 | | | (3,648 | ) | | \- | | | \- | | | \- | | | (3,647 | ) | | \- | |

| Issuance of common stock, net of issue costs | 2,300 | | | 23 | | | 121,427 | | | \- | | | \- | | | \- | | | 121,450 | | | \- | |

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

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

| Proceeds from/(payments on) senior unsecured term loan | | | \- | | | \- | | | (350,000 | ) |

| Proceeds from issuance of common stock, net of issue costs | | | \- | | | \- | | | 121,450 | |

| Cash and cash equivalents, beginning of year | | | 270,394 | | | 167,708 | | | 178,069 | |

Identifiable intangible assets that are determined to have an indefinite useful economic life are not amortized, but separately tested for impairment annually using a one-step fair value based approach.

The differences between net earnings and comprehensive earnings were currency translation adjustments, net of tax.

Recently Released Accounting Pronouncements - In September 2011, the Financial Accounting Standards Board ("FASB") issued updated accounting guidance which allows entities to perform a qualitative assessment on goodwill impairment to determine whether it is more likely than not (defined as having a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test.

In June 2011, the FASB issued updated accounting guidance which requires entities to present comprehensive income, which is currently presented in the Consolidated Condensed Statement of Stockholders’ Equity, either as a single continuous statement of comprehensive income or as two separate but consecutive statements.

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011, with early adoption permitted.

In October 2009, the FASB issued amendments to the accounting and disclosure for revenue recognition.

These amendments, effective for fiscal years beginning on or after June 15, 2010, modify the criteria for recognizing revenue in multiple element arrangements and the scope of what constitutes a non-software deliverable.

The Company implemented the amendments on January 1, 2011.

The impact on its results of operations, financial condition and cash flows was immaterial.

| Goodwill | | | 335,971 | |

| Other liabilities | | | (128,841 | ) |

The Company recorded $2.2 million in transaction costs related to these acquisitions.

On October 30, 2009, Roper purchased the assets of United Toll Systems, LLC, which provides software and in-lane hardware systems for toll and traffic markets.

The operations of UTS are reported in the RF Technology segment.

On December 3, 2009, Roper purchased Verathon, Inc., a leading global provider of proprietary medical devices and services, in order to expand its medical product lines.

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

| | | $ | 204,758 | | $ | 178,559 | |

| | | | 338,315 | | | 312,211 | |

| | | $ | 108,775 | | $ | 103,487 | |

| Balances at December 31, 2009 | | $ | 431,073 | | $ | 383,207 | | $ | 623,786 | | $ | 950,366 | | $ | 2,388,432 | |

| Goodwill acquired | | | \- | | | \- | | | 8,593 | | | 341,243 | | | 349,836 | |

| Currency translation adjustments | | | (11,071 | ) | | (2,554 | ) | | 804 | | | (2,657 | ) | | (15,478 | ) |

Based on our evaluation under the framework in Internal Control-Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2011.][added: 2012.]

Our internal control over financial reporting as of December 31, [removed: 2011] [added: 2012] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Our management excluded [removed: Northern Digital, UCG and Trinity] [added: acquisitions completed during 2012] from its assessment of internal control over financial reporting as of December 31, [removed: 2011, because they were acquired by us in purchase business combinations during 2011.][added: 2012.]

[removed: Northern Digital, UCG and Trinity] [added: These acquisitions] are wholly-owned subsidiaries whose excluded aggregate assets represent [removed: 0.5%,] [added: 2.1%,] and whose aggregate total revenues represent 1.1%, of the related consolidated financial statement amounts as of and for the year ended December 31, [removed: 2011.][added: 2012.]

Based on this evaluation, we have concluded that our disclosure controls and procedures are effective as of December 31, [removed: 2011.][added: 2012.]

There was no change in our internal control over financial reporting that occurred during the fourth quarter of [removed: 2011] [added: 2012] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There were no disclosures of any information required to be filed on Form 8-K during the fourth quarter of [removed: 2011] [added: 2012] that were not filed.

Except as otherwise indicated, the following information required by the Instructions to Form 10-K is incorporated herein by reference from the sections of the Roper Proxy Statement for the annual meeting of shareholders to be held on [removed: June 4, 2012,] [added: May 24, 2013,] as specified below:

The following table provides information as of December 31, [removed: 2011] [added: 2012] regarding compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance.

| Plan Category | [added: |] (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | [added: | | |] (b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | [added: | | |] (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | [added: | |]

| Equity Compensation Plans [added: Not] Approved by Shareholders [removed: (1)] | [removed: 4,549,506] | [removed: $ 52.15] | [removed: 4,549,506] [added: \-] | [added: | | | \- | | | | \- | |]

| Equity Compensation Plans [removed: Not] Approved by Shareholders [added: (1)] | [removed: \-] | [removed: \-] | [removed: \-] [added: 3,490,100] | [added: | | $ | 66.07 | | | | 6,941,775 | |]

| (1) | Consists of the [removed: 1991 Stock Option Plan, the] Amended and Restated 2000 Stock Incentive [removed: Plan, the 1993 Stock] Plan [removed: for Non-Employee Directors] (no additional equity awards may be granted under [removed: these three plans)] [added: this plan)] and the [added: Amended and Restated] 2006 Incentive Plan. |

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

| Total | | | 3,490,100 | | | $ | 66.07 | | | | 6,941,775 | |

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

| Total | 4,549,506 | $ 52.15 | 4,549,506 |

Fees paid to the [removed: Company’s] [added: Company's] independent registered public accounting firm are disclosed under the caption [removed: “Proposal 2:] [added: "Proposal 5:] Ratification of the Appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for the Year Ending December 31, [removed: 2012.”][added: 2013."]

| [removed: |] (1) | Consolidated Financial Statements: The following consolidated financial statements are included in Part II, Item 8 of this report. |

Consolidated Balance Sheets as of December 31, [removed: 2011] [added: 2012] and [removed: 2010][added: 2011]

Consolidated Statements of Earnings for the years ended December 31, [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009][added: 2010]

Consolidated Statements of [removed: Stockholders’] [added: Stockholders'] Equity and Comprehensive Earnings for the years ended December 31, [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009][added: 2010]

Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009][added: 2010]

| [removed: |] (2) | Consolidated Valuation and Qualifying Accounts for the years ended December 31, [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009] [added: 2010] |

| [removed: (a)3.1] [added: (b)3.1] | | Amended and Restated Certificate of Incorporation. |

| [removed: (b)3.2] [added: (c)3.2] | | Amended and Restated By-Laws. |

| [removed: (c)3.3] [added: (d)3.3] | | Certificate of Amendment, amending Restated Certificate of Incorporation. |

| [removed: (d)3.4] [added: (e)3.4] | | Certificate Eliminating References to Roper Industries, [removed: Inc.’s] [added: Inc.'s] Series A Preferred Stock from the Certificate of Incorporation of Roper Industries, Inc. dated November 16, 2006. |

| [removed: (e)3.5] [added: (f)3.5] | | Certificate of Amendment, amending Restated Certificate of Incorporation. |

| [removed: (f)4.2] [added: (g)4.2] | | Indenture between Roper Industries, Inc. and SunTrust Bank, dated as of November 28, 2003. |

| [removed: (g)4.4] [added: (h)4.4] | | First Supplemental Indenture between Roper Industries, Inc. and SunTrust Bank, dated as of December 29, 2003. |

| [removed: (h)4.5] [added: (i)4.5] | | Second Supplemental Indenture between Roper Industries, Inc. and [removed: Sun Trust] [added: SunTrust] Bank, dated as of December 7, 2004. |

| [removed: (i)4.6] [added: (j)4.6] | | Indenture between Roper Industries, Inc. and Wells Fargo Bank, dated as of August 4, 2008. |

| [removed: (j)4.7] [added: (k)4.7] | | Form of Note. |

| [removed: (k)4.8] [added: (l)4.8] | | Form of 6.625% Notes due 2013. |

| [removed: (l)4.9] [added: (m)4.9] | | Form of 6.25% Senior Notes due 2019. |

| [removed: (m)10.01] [added: (o)10.01] | | Form of Amended and Restated Indemnification Agreement. † |

| [removed: (n)10.02] [added: (p)10.02] | | Employee Stock Purchase Plan, as amended and restated. † |

| [removed: (o)10.03] [added: (q)10.03] | | 2000 Stock Incentive Plan, as amended. † |

| [removed: (p)10.04] [added: (r)10.04] | | Non-Qualified Retirement Plan, as amended. † |

| [removed: (q)10.05] [added: (s)10.05] | | Brian D. Jellison Employment Agreement, dated as of December 29, 2008. † |

| [removed: (s)10.07] [added: (t)10.06] | | Credit Agreement, dated as of July [removed: 7, 2008,] [added: 27, 2012,] among Roper Industries, Inc., as parent borrower, the foreign subsidiary borrowers of Roper Industries, Inc. from time to time parties thereto, the several lenders from time to time parties thereto, Bank of Tokyo-Mitsubishi UFJ [removed: Trust Company] [added: Ltd., Barclays Bank PLC, Mizuho Corporate Bank, Ltd.] and [removed: BNP Paribas,] [added: SunTrust Bank,] as documentation agents, [removed: Wachovia Capital Markets, LLC] [added: Wells Fargo Bank, N.A.] and [removed: Banc] [added: Bank] of America Securities, [removed: LLC,] [added: N.A.,] as syndication agents, and JPMorgan Chase Bank, N.A., as administrative agent. |

| [removed: (t)10.08] [added: (u)10.07] | | Form of Executive Officer Restricted Stock Award Agreement. † |

| [removed: (u)10.09] [added: (u)10.08] | | Brian D. Jellison Restricted Stock Unit Award Agreement. † |

| [removed: (v)10.10] [added: (v)10.09] | | Offer letter for John Humphrey, dated March 31, 2006. † |

| [removed: (w)10.12] [added: (x)10.11] | | Form of Restricted Stock Agreement for [removed: Employee] [added: Non-Employee] Directors. † |

| [removed: (x)10.13] [added: (x)10.12] | | Form of Restricted Stock Agreement for [removed: Non-Employee Directors.] [added: Employees.] † |

| [removed: (y)10.15] [added: (x)10.13] | | Form of Incentive Stock Option Agreement. † |

| [removed: (y)10.16] [added: (x)10.14] | | Form of Non-Statutory Stock Option Agreement. † |

| [removed: (y)10.17] [added: (y)10.15] | | Director Compensation Plan, as amended. † |

| [removed: (y)10.18] [added: (z)10.16] | | David B. Liner offer letter dated July 21, 2005. † |

| [removed: (z)10.19] [added: (z)10.17] | | Amendment to John Humphrey offer letter. † |

| [removed: (bb)10.21] [added: (z)10.18] | | Amendment to David B. Liner offer letter. † |

| | [removed: (a)] [added: (b)] | Incorporated herein by reference to Exhibit 3.1 to the Roper Industries, Inc. Quarterly Report on Form 10-Q filed March 17, 2003 (file no. 1-12273), as amended by the Certificate Eliminating References to the [removed: Company’s] [added: Company's] Series A Preferred Stock from the Certificate of Incorporation of Roper Industries, Inc. dated November 16, 2006, incorporated herein by reference to Exhibit 3.1 to the Roper Industries, Inc. Current Report on Form 8-K filed November [removed: 16,] [added: 17,] 2006 (file no. 1-12273). |

| | [removed: (b)] [added: (c)] | Incorporated herein by reference to Exhibit [removed: 3.2] [added: 3.1] to the Roper Industries, Inc. Current Report on Form 8-K filed [removed: March 22,2011] [added: April 24, 2012] (file no. 1-12273). |

| | [removed: (c)] [added: (v)] | Incorporated herein by reference to Exhibit 10.1 to the Roper Industries, Inc. Quarterly Report on Form 10-Q filed August 9, 2006 (file no. [removed: 1-12273)] [added: 1-12273).] |

| | [removed: (d)] [added: (e)] | Incorporated herein by reference to Exhibit 3.1 to the Roper Industries, Inc. Current Report on Form 8-K filed November 17, 2006 (file no. 1-12273). |

| | [removed: (e)] [added: (f)] | Incorporated herein by reference to Exhibit 3.1 to the Roper Industries, Inc. Quarterly Report on Form 10-Q filed on August 9, 2007 (file no. 1-12273). |

| --- | --- |

| --- | --- |

| (a)2.1 | | Stock Purchase Agreement, dated as of July 28, 2012 among Sunquest Holdings, Inc., the selling shareholders named therein and Roper Industries, Inc. |

| (n)4.10 | | Form of 1.850% Senior Notes due 2017. |

| 4.11 | | Form of 3.125% Senior Notes due 2022. (included in Exhibit 4.10). |

| (w)10.10 | | Amended and Restated 2006 Incentive Plan. † |

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

| (r)10.06 | | Timothy J. Winfrey offer letter dated May 20, 2002. † |

| (v)10.11 | | 2006 Incentive Plan, as amended. † |

| (y)10.14 | | Form of Restricted Stock Agreement for Employees. † |

| (aa)10.20 | | Amendment to Timothy J. Winfrey offer letter. † |

| | (aa) | Incorporated herein by reference to Exhibit 10.22 to the Roper Industries, Inc. Annual Report on Form 10-K filed March 2, 2009 (file no. 1-12273). |

| | (bb) | Incorporated herein by reference to Exhibit 10.23 to the Roper Industries, Inc. Annual Report on Form 10-K filed March 2, 2009 (file no. 1-12273). |