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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
Form 10-Q

☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the quarterly period ended | March 31, 2020

OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the transition period from | to

Commission file number 1-10235
IDEX CORP ORATION
(Exact Name of Registrant as Specified in its Charter)

| Delaware |  | 36-3555336
| (State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
| 1925 West Field Court, | Suite 200, | Lake Forest, | Illinois |  | 60045
| (Address of principal executive offices) |  | (Zip Code)

Registrant’s telephone number: (847) 498-7070
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class |  | Trading Symbol(s) |  | Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share |  | IEX |  | New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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Large accelerated filer | ☑ |  | Accelerated filer ☐ |  | Non-accelerated filer ☐ |  | Smaller reporting company | ☐
Emerging growth company | ☐ |  |  |  |  |  |  |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☑
Number of shares of common stock of IDEX Corporation outstanding as of April 17, 2020: 75,391,873.

Table of Contents
TABLE OF CONTENTS

Part I. Financial Information |
Item 1. | Financial Statements | 1
| Condensed Consolidated Balance Sheets | 1
| Condensed Consolidated Statements of Operations | 2
| Condensed Consolidated Statements of Comprehensive Income | 3
| Condensed Consolidated Statements of Shareholders’ Equity | 4
| Condensed Consolidated Statements of Cash Flows | 5
| Notes to Condensed Consolidated Financial Statements | 6
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 27
| Cautionary Statement Under the Private Securities Litigation Reform Act | 27
| Overview | 27
| Results of Operations | 29
| Liquidity and Capital Resources | 32
| Non-GAAP Disclosures | 33
| Critical Accounting Policies | 36
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 36
Item 4. | Controls and Procedures | 36
Part II. Other Information |
Item 1. | Legal Proceedings | 37
Item 1A. | Risk Factors | 37
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 38
Item 6. | Exhibits | 39
Signatures | 40

Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
IDEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share amounts)
(unaudited)

| March 31, 2020 |  | December 31, 2019
ASSETS |  |  |
Current assets |  |  |
Cash and cash equivalents | $ | 569,219 |  |  | $ | 632,581 |
Receivables, less allowance for doubtful accounts of $5,894 at March 31, 2020 and $6,347 at December 31, 2019 | 327,835 |  |  | 298,186 |
Inventories | 340,581 |  |  | 293,467 |
Other current assets | 51,437 |  |  | 37,211 |
Total current assets | 1,289,072 |  |  | 1,261,445 |
Property, plant and equipment - net | 283,276 |  |  | 280,316 |
Goodwill | 1,831,973 |  |  | 1,779,745 |
Intangible assets - net | 426,205 |  |  | 388,031 |
Other noncurrent assets | 113,151 |  |  | 104,375 |
Total assets | $ | 3,943,677 |  |  | $ | 3,813,912 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |
Current liabilities |  |  |
Trade accounts payable | $ | 157,724 |  |  | $ | 138,463 |
Accrued expenses | 208,847 |  |  | 180,290 |
Short-term borrowings | 319 |  |  | 388 |
Dividends payable | — |  |  | 38,736 |
Total current liabilities | 366,890 |  |  | 357,877 |
Long-term borrowings | 999,020 |  |  | 848,864 |
Deferred income taxes | 148,189 |  |  | 146,574 |
Other noncurrent liabilities | 199,791 |  |  | 197,368 |
Total liabilities | 1,713,890 |  |  | 1,550,683 |
Commitments and contingencies |  |  |
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: 89,902,247 shares at March 31, 2020 and 89,948,374 shares at December 31, 2019 | 899 |  |  | 899 |
Additional paid-in capital | 766,916 |  |  | 760,453 |
Retained earnings | 2,717,129 |  |  | 2,615,131 |
Treasury stock at cost: 14,587,137 shares at March 31, 2020 and 13,860,340 shares at December 31, 2019 | (1,104,846 | ) |  | (985,909 | )
Accumulated other comprehensive income (loss) | (150,311 | ) |  | (127,345 | )
Total shareholders’ equity | 2,229,787 |  |  | 2,263,229 |
Total liabilities and shareholders’ equity | $ | 3,943,677 |  |  | $ | 3,813,912 |

See Notes to Condensed Consolidated Financial Statements
1

Table of Contents
IDEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)

|  | Three Months Ended March 31,
|  | 2020 |  | 2019
Net sales |  | $ | 594,462 |  |  | $ | 622,231 |
Cost of sales |  | 322,506 |  |  | 338,397 |
Gross profit |  | 271,956 |  |  | 283,834 |
Selling, general and administrative expenses |  | 132,015 |  |  | 136,052 |
Operating income |  | 139,941 |  |  | 147,782 |
Other (income) expense - net |  | 1,565 |  |  | (140 | )
Interest expense |  | 10,877 |  |  | 10,921 |
Income before income taxes |  | 127,499 |  |  | 137,001 |
Provision for income taxes |  | 25,501 |  |  | 26,733 |
Net income |  | $ | 101,998 |  |  | $ | 110,268 |
Basic earnings per common share |  | $ | 1.35 |  |  | $ | 1.46 |
Diluted earnings per common share |  | $ | 1.33 |  |  | $ | 1.44 |
Share data: |  |  |  |
Basic weighted average common shares outstanding |  | 75,740 |  |  | 75,442 |
Diluted weighted average common shares outstanding |  | 76,452 |  |  | 76,284 |

See Notes to Condensed Consolidated Financial Statements
2

Table of Contents
IDEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)

|  | Three Months Ended March 31,
|  | 2020 |  | 2019
Net income |  | $ | 101,998 |  |  | $ | 110,268 |
Other comprehensive income (loss): |  |  |  |
Reclassification adjustments for derivatives, net of tax |  | 1,194 |  |  | 1,227 |
Pension and other postretirement adjustments, net of tax |  | 2,296 |  |  | 1,262 |
Cumulative translation adjustment |  | (26,456 | ) |  | (3,281 | )
Other comprehensive income (loss) |  | (22,966 | ) |  | (792 | )
Comprehensive income |  | $ | 79,032 |  |  | $ | 109,476 |

See Notes to Condensed Consolidated Financial Statements
3

Table of Contents
IDEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands except share amounts)
(unaudited)

|  |  |  |  | Accumulated Other Comprehensive Income (Loss) |  |  |  |
| Common Stock and Additional Paid-In Capital |  | Retained Earnings |  | Cumulative Translation Adjustment |  | Retirement Benefits Adjustment |  | Cumulative Unrealized Gain (Loss) on Derivatives |  | Treasury Stock |  | Total Shareholders’ Equity
Balance, December 31, 2019 | $ | 761,352 |  |  | $ | 2,615,131 |  |  | $ | (94,353 | ) |  | $ | (25,809 | ) |  | $ | (7,183 | ) |  | $ | (985,909 | ) |  | $ | 2,263,229 |
Net income | — |  |  | 101,998 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 101,998 |
Cumulative translation adjustment | — |  |  | — |  |  | (26,456 | ) |  | — |  |  | — |  |  | — |  |  | (26,456 | )
Net change in retirement obligations (net of tax of $578) | — |  |  | — |  |  | — |  |  | 2,296 |  |  | — |  |  | — |  |  | 2,296 |
Net change on derivatives designated as cash flow hedges (net of tax of $351) | — |  |  | — |  |  | — |  |  | — |  |  | 1,194 |  |  | — |  |  | 1,194 |
Issuance of 131,757 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $3,061) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,089 |  |  | 2,089 |
Repurchase of 866,823 shares of common stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (108,907 | ) |  | (108,907 | )
Shares surrendered for tax withholding | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (12,119 | ) |  | (12,119 | )
Share-based compensation | 6,463 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 6,463 |
Balance, March 31, 2020 | $ | 767,815 |  |  | $ | 2,717,129 |  |  | $ | (120,809 | ) |  | $ | (23,513 | ) |  | $ | (5,989 | ) |  | $ | (1,104,846 | ) |  | $ | 2,229,787 |

|  |  |  |  | Accumulated Other Comprehensive Income (Loss) |  |  |  |
| Common Stock and Additional Paid-In Capital |  | Retained Earnings |  | Cumulative Translation Adjustment |  | Retirement Benefits Adjustment |  | Cumulative Unrealized Gain (Loss) on Derivatives |  | Treasury Stock |  | Total Shareholders’ Equity
Balance, December 31, 2018 | $ | 739,240 |  |  | $ | 2,342,079 |  |  | $ | (94,420 | ) |  | $ | (22,740 | ) |  | $ | (12,065 | ) |  | $ | (957,454 | ) |  | $ | 1,994,640 |
Net income | — |  |  | 110,268 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 110,268 |
Adjustment for adoption of ASU 2016-02 | — |  |  | 28 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 28 |
Cumulative translation adjustment | — |  |  | — |  |  | (3,281 | ) |  | — |  |  | — |  |  | — |  |  | (3,281 | )
Net change in retirement obligations (net of tax of $438) | — |  |  | — |  |  | — |  |  | 1,262 |  |  | — |  |  | — |  |  | 1,262 |
Net change on derivatives designated as cash flow hedges (net of tax of $361) | — |  |  | — |  |  | — |  |  | — |  |  | 1,227 |  |  | — |  |  | 1,227 |
Issuance of 264,090 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $3,415) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8,870 |  |  | 8,870 |
Repurchase of 369,810 shares of common stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (51,706 | ) |  | (51,706 | )
Shares surrendered for tax withholding | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (11,479 | ) |  | (11,479 | )
Share-based compensation | 5,403 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,403 |
Balance, March 31, 2019 | $ | 744,643 |  |  | $ | 2,452,375 |  |  | $ | (97,701 | ) |  | $ | (21,478 | ) |  | $ | (10,838 | ) |  | $ | (1,011,769 | ) |  | $ | 2,055,232 |

See Notes to Condensed Consolidated Financial Statements
4

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IDEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

| Three Months Ended March 31,
| 2020 |  | 2019
Cash flows from operating activities |  |  |
Net income | $ | 101,998 |  |  | $ | 110,268 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
Depreciation and amortization | 10,453 |  |  | 9,660 |
Amortization of intangible assets | 9,544 |  |  | 8,999 |
Amortization of debt issuance expenses | 343 |  |  | 335 |
Share-based compensation expense | 6,730 |  |  | 7,560 |
Deferred income taxes | 2,012 |  |  | 3,027 |
Non-cash interest expense associated with forward starting swaps | 1,545 |  |  | 1,588 |
Changes in (net of the effect from acquisitions): |  |  |
Receivables | (24,190 | ) |  | (21,402 | )
Inventories | (23,717 | ) |  | (18,548 | )
Other current assets | (14,267 | ) |  | (7,119 | )
Trade accounts payable | 14,146 |  |  | 17,488 |
Accrued expenses | 2,060 |  |  | (24,606 | )
Other - net | (1,897 | ) |  | 1,413 |
Net cash flows provided by operating activities | 84,760 |  |  | 88,663 |
Cash flows from investing activities |  |  |
Purchases of property, plant and equipment | (12,762 | ) |  | (12,875 | )
Acquisition of businesses, net of cash acquired | (120,839 | ) |  | — |
Proceeds from disposal of fixed assets | 41 |  |  | 629 |
Other - net | (160 | ) |  | (195 | )
Net cash flows used in investing activities | (133,720 | ) |  | (12,441 | )
Cash flows from financing activities |  |  |
Borrowings under revolving credit facilities | 150,000 |  |  | — |
Dividends paid | (38,736 | ) |  | (33,446 | )
Proceeds from stock option exercises | 2,089 |  |  | 8,870 |
Repurchases of common stock | (108,907 | ) |  | (50,797 | )
Shares surrendered for tax withholding | (12,119 | ) |  | (11,479 | )
Other - net | (129 | ) |  | (129 | )
Net cash flows used in financing activities | (7,802 | ) |  | (86,981 | )
Effect of exchange rate changes on cash and cash equivalents | (6,600 | ) |  | 482 |
Net increase (decrease) in cash | (63,362 | ) |  | (10,277 | )
Cash and cash equivalents at beginning of year | 632,581 |  |  | 466,407 |
Cash and cash equivalents at end of period | $ | 569,219 |  |  | $ | 456,130 |
Supplemental cash flow information |  |  |
Cash paid for: |  |  |
Interest | $ | 276 |  |  | $ | 323 |
Income taxes | 10,492 |  |  | 13,911 |

See Notes to Condensed Consolidated Financial Statements
5

Table of Contents
IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
1. Basis of Presentation and Significant Accounting Policies
The Condensed Consolidated Financial Statements of IDEX Corporation (“IDEX,” “we,” “our,” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to interim financial information and the instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended. The statements are unaudited but include all adjustments, consisting only of recurring items, except as noted, that the Company considers necessary for a fair presentation of the information set forth herein. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the entire year.
The Condensed Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in this report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
Recently Adopted Accounting Standards
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit losses (Topic 326): Measurement of Credit Losses on Financial Instruments and in November 2018 issued a subsequent amendment, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 replaces the prior “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. ASU 2018-19 affects loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope of this amendment that represent the contractual right to receive cash. ASU 2016-13 and ASU 2018-19 should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. The Company adopted this standard on January 1, 2020 using the prospective transition approach. The adoption of this standard did not have a material impact on our condensed consolidated financial statements.
2. Acquisitions and Divestitures
All of the Company’s acquisitions of businesses have been accounted for under ASC 805, Business Combinations. Accordingly, the accounts of the acquired companies, after adjustments to reflect the fair values assigned to assets and liabilities, have been included in the Company’s condensed consolidated financial statements from their respective dates of acquisition.
The Company incurred acquisition-related transaction costs of $1.1 million and $0.3 million in the three months ended March 31, 2020 and 2019, respectively. These costs were recorded in Selling, general and administrative expenses and were related to completed transactions, pending transactions and potential transactions, including transactions that ultimately were not completed.
2020 Acquisition
On February 28, 2020, the Company acquired the stock of Flow Management Devices, LLC (“Flow MD”), a privately held provider of flow measurement systems that ensure custody transfer accuracy in the oil and gas industry. Flow MD engineers and manufactures small volume provers. Headquartered in Phoenix, AZ, with operations in Houston, TX and Pittsburgh, PA, Flow MD operates in our Energy group within the Fluid & Metering Technologies segment. Flow MD was acquired for cash consideration of $120.8 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $63.4 million and $49.5 million, respectively. The goodwill is deductible for tax purposes.
The Company made an initial allocation of the purchase price for the Flow MD acquisition as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy. As the Company continues to obtain additional information about these assets and liabilities, including intangible asset appraisals, inventory valuation and accrued expenses, and continues to learn more about the newly acquired business, we 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.
6

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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
The preliminary allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date, is as follows:

(In thousands) | Total
Current assets, net of cash acquired | $ | 35,494 |
Property, plant and equipment | 4,587 |
Goodwill | 63,374 |
Intangible assets | 49,500 |
Other noncurrent assets | 1,291 |
Total assets acquired | 154,246 |
Current liabilities | (34,059 | )
Deferred income taxes | 981 |
Other noncurrent liabilities | (329 | )
Net assets acquired | $ | 120,839 |

Acquired intangible assets consist of trade names, customer relationships and unpatented technology. The goodwill recorded for the acquisition reflects the strategic fit, revenue and earnings growth potential of this business.
The acquired intangible assets and weighted average amortization periods are as follows:

(In thousands, except weighted average life) | Total |  | Weighted Average Life
Trade names | $ | 6,000 |  |  | 15
Customer relationships | 28,000 |  |  | 10
Unpatented technology | 15,500 |  |  | 20
Acquired intangible assets | $ | 49,500 |  |  |

2019 Acquisition
On July 18, 2019, the Company acquired the stock of Velcora Holding AB (“Velcora”) and its operating subsidiaries, Roplan and Steridose. Roplan is a global manufacturer of custom mechanical and shaft seals for a variety of end markets including food and beverage, marine, chemical, wastewater and water treatment. Steridose develops engineered hygienic mixers and valves for the global biopharmaceutical industry. Both companies are headquartered in Sweden, with operations in China, the United Kingdom and the United States and operate in our Health & Science Technologies segment. Velcora was acquired for cash consideration of $87.2 million and the assumption of $51.1 million of debt. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $86.4 million and $48.2 million, respectively. The goodwill is not deductible for tax purposes.
The Company made an initial allocation of the purchase price for the Velcora acquisition as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy. As the Company continues to obtain additional information about these assets and liabilities and continues to learn more about these businesses, we 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 make required adjustments to the purchase price allocation prior to the completion of the measurement period.
7

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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
The preliminary allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date, is as follows:

(In thousands) | Total
Current assets, net of cash acquired | $ | 20,414 |
Property, plant and equipment | 1,656 |
Goodwill | 86,447 |
Intangible assets | 48,183 |
Other noncurrent assets | 788 |
Total assets acquired | 157,488 |
Current liabilities | (7,630 | )
Long-term borrowings | (51,130 | )
Deferred income taxes | (11,094 | )
Other noncurrent liabilities | (454 | )
Net assets acquired | $ | 87,180 |

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

(In thousands, except weighted average life) | Total |  | Weighted Average Life
Trade names | $ | 7,089 |  |  | 15
Customer relationships | 34,677 |  |  | 12
Unpatented technology | 6,417 |  |  | 9
Acquired intangible assets | $ | 48,183 |  |  |

3. Business Segments
IDEX has three reportable business segments: Fluid & Metering Technologies, Health & Science Technologies and Fire & Safety/Diversified Products.
The Fluid & Metering Technologies (“FMT”) segment designs, produces and distributes positive displacement pumps, 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.
The Health & Science Technologies (“HST”) segment designs, produces and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems used in beverage, food processing, pharmaceutical and cosmetics, pneumatic components and sealing solutions, including very high precision, low-flow rate pumping solutions required in analytical instrumentation, clinical diagnostics and drug discovery, high performance molded and extruded sealing components, custom mechanical and shaft seals for a variety of end markets including food and beverage, marine, chemical, wastewater and water treatment, engineered hygienic mixers and valves for the global biopharmaceutical industry, biocompatible medical devices and implantables, air compressors used in medical, dental and industrial applications, optical components and coatings for applications in the fields of scientific research, defense, biotechnology, aerospace, telecommunications and electronics manufacturing, laboratory and commercial equipment used in the production of micro and nano scale materials, precision photonic solutions used in life sciences, research and defense markets and precision gear and peristaltic pump technologies that meet exacting original equipment manufacturer specifications.
The Fire & Safety/Diversified Products (“FSDP”) segment designs, produces and develops firefighting pumps, valves and controls, rescue tools, lifting bags and other components and systems for the fire and rescue industry, engineered stainless steel
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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
banding and clamping devices used in a variety of industrial and commercial applications and precision equipment for dispensing, metering and mixing colorants and paints used in a variety of retail and commercial businesses around the world.
Information on the Company’s business segments is presented below based on the nature of products and services offered. The Company evaluates performance based on several factors, of which sales, operating income and operating margin are the primary financial measures. Intersegment sales are accounted for at fair value as if the sales were to third parties.

|  | Three Months Ended March 31,
|  | 2020 |  | 2019
Net sales |  |  |  |
Fluid & Metering Technologies |  |  |  |
External customers |  | $ | 226,712 |  |  | $ | 242,336 |
Intersegment sales |  | 149 |  |  | 186 |
Total segment sales |  | 226,861 |  |  | 242,522 |
Health & Science Technologies |  |  |  |
External customers |  | 223,456 |  |  | 224,688 |
Intersegment sales |  | 603 |  |  | 602 |
Total segment sales |  | 224,059 |  |  | 225,290 |
Fire & Safety/Diversified Products |  |  |  |
External customers |  | 144,294 |  |  | 155,207 |
Intersegment sales |  | 30 |  |  | 952 |
Total segment sales |  | 144,324 |  |  | 156,159 |
Intersegment elimination |  | (782 | ) |  | (1,740 | )
Total net sales |  | $ | 594,462 |  |  | $ | 622,231 |
Operating income |  |  |  |
Fluid & Metering Technologies |  | $ | 66,771 |  |  | $ | 71,866 |
Health & Science Technologies |  | 52,643 |  |  | 54,154 |
Fire & Safety/Diversified Products |  | 38,037 |  |  | 40,328 |
Corporate office |  | (17,510 | ) |  | (18,566 | )
Total operating income |  | 139,941 |  |  | 147,782 |
Interest expense |  | 10,877 |  |  | 10,921 |
Other (income) expense - net |  | 1,565 |  |  | (140 | )
Income before income taxes |  | $ | 127,499 |  |  | $ | 137,001 |

| March 31, 2020 |  | December 31, 2019
Assets |  |  |
Fluid & Metering Technologies | $ | 1,349,083 |  |  | $ | 1,150,712 |
Health & Science Technologies | 1,488,273 |  |  | 1,507,108 |
Fire & Safety/Diversified Products | 797,271 |  |  | 825,398 |
Corporate office | 309,050 |  |  | 330,694 |
Total assets | $ | 3,943,677 |  |  | $ | 3,813,912 |

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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
4. Revenue
IDEX is an applied solutions company specializing in the manufacture of fluid and metering technologies, health and science technologies and fire, safety and other diversified products built to customers’ specifications. The Company’s products include industrial pumps, provers, compressors, flow meters, injectors, valves and related controls for use in a wide variety of process applications; precision fluidics solutions, including pumps, valves, degassing equipment, corrective tubing, fittings and complex manifolds, optical filters and specialty medical equipment and devices for use in life science applications; precision-engineered equipment for dispensing, metering and mixing paints; and engineered products for industrial and commercial markets, including fire and rescue, transportation equipment, oil and gas, electronics and communications.
Revenue is recognized when control of products or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for transferring those products or providing those services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. We determine the appropriate revenue recognition for our contracts with customers by analyzing the type, terms and conditions of each contract or arrangement with a customer.
Disaggregation of Revenue
We have a comprehensive offering of products, including technologies, built to customers’ specifications that are sold in niche markets throughout the world. We disaggregate our revenue from contracts with customers by reporting unit and geographical region for each of our segments as we believe it best depicts how the amount, nature, timing and uncertainty of our revenue and cash flows are affected by economic factors. Revenue was attributed to geographical region based on the location of the customer. The following tables present our revenue disaggregated by reporting unit and geographical region.
Revenue by reporting unit for the three months ended March 31, 2020 and 2019 was as follows:

|  | Three Months Ended March 31,
|  | 2020 |  | 2019
Energy |  | $ | 38,514 |  |  | $ | 39,398 |
Valves |  | 26,207 |  |  | 29,382 |
Water |  | 58,336 |  |  | 61,132 |
Pumps |  | 81,830 |  |  | 88,260 |
Agriculture |  | 21,974 |  |  | 24,350 |
Intersegment elimination |  | (149 | ) |  | (186 | )
Fluid & Metering Technologies |  | 226,712 |  |  | 242,336 |
Scientific Fluidics & Optics |  | 106,142 |  |  | 107,308 |
Sealing Solutions |  | 55,330 |  |  | 50,506 |
Gast |  | 27,346 |  |  | 33,909 |
Micropump |  | 7,715 |  |  | 8,755 |
Material Processing Technologies |  | 27,526 |  |  | 24,812 |
Intersegment elimination |  | (603 | ) |  | (602 | )
Health & Science Technologies |  | 223,456 |  |  | 224,688 |
Fire & Safety |  | 94,068 |  |  | 99,448 |
BAND-IT |  | 25,233 |  |  | 27,912 |
Dispensing |  | 25,023 |  |  | 28,799 |
Intersegment elimination |  | (30 | ) |  | (952 | )
Fire & Safety/Diversified Products |  | 144,294 |  |  | 155,207 |
Total net sales |  | $ | 594,462 |  |  | $ | 622,231 |

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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
Revenue by geographical region for the three months ended March 31, 2020 and 2019 was as follows:

| Three Months Ended March 31, 2020
| FMT |  | HST |  | FSDP |  | IDEX
U.S. | $ | 127,778 |  |  | $ | 95,996 |  |  | $ | 74,931 |  |  | $ | 298,705 |
North America, excluding U.S. | 13,676 |  |  | 5,968 |  |  | 6,269 |  |  | 25,913 |
Europe | 44,665 |  |  | 67,087 |  |  | 40,070 |  |  | 151,822 |
Asia | 26,785 |  |  | 51,339 |  |  | 16,579 |  |  | 94,703 |
Other (1) | 13,957 |  |  | 3,669 |  |  | 6,475 |  |  | 24,101 |
Intersegment elimination | (149 | ) |  | (603 | ) |  | (30 | ) |  | (782 | )
Total net sales | $ | 226,712 |  |  | $ | 223,456 |  |  | $ | 144,294 |  |  | $ | 594,462 |

| Three Months Ended March 31, 2019
| FMT |  | HST |  | FSDP |  | IDEX
U.S. | $ | 138,149 |  |  | $ | 99,051 |  |  | $ | 74,677 |  |  | $ | 311,877 |
North America, excluding U.S. | 13,057 |  |  | 4,892 |  |  | 5,980 |  |  | 23,929 |
Europe | 43,624 |  |  | 69,372 |  |  | 43,062 |  |  | 156,058 |
Asia | 31,917 |  |  | 48,059 |  |  | 23,560 |  |  | 103,536 |
Other (1) | 15,775 |  |  | 3,916 |  |  | 8,880 |  |  | 28,571 |
Intersegment elimination | (186 | ) |  | (602 | ) |  | (952 | ) |  | (1,740 | )
Total net sales | $ | 242,336 |  |  | $ | 224,688 |  |  | $ | 155,207 |  |  | $ | 622,231 |

(1) Other includes: South America, Middle East, Australia and Africa.
Contract Balances
The timing of revenue recognition, billings and cash collections can result in customer receivables, advance payments or billings in excess of revenue recognized. Customer receivables include both amounts billed and currently due from customers as well as unbilled amounts (contract assets) and are included in Receivables on our Condensed 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. Customer receivables are recorded at face amount less an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for expected losses as a result of customers’ inability to make required payments. Management evaluates the aging of customer receivable balances, the financial condition of its customers, historical trends and the time outstanding of specific balances to estimate the amount of customer receivables that may not be collected in the future and records the appropriate provision.
The composition of Customer receivables was as follows:

| March 31, 2020 |  | December 31, 2019
Billed receivables | $ | 319,077 |  |  | $ | 286,196 |
Unbilled receivables | 10,054 |  |  | 11,922 |
Total customer receivables | $ | 329,131 |  |  | $ | 298,118 |

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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
Advance payments, deposits and billings in excess of revenue recognized are included in Deferred revenue which is classified as current or noncurrent based on the timing of when we expect to recognize the revenue. The current portion is included in Accrued expenses and the noncurrent portion is included in Other noncurrent liabilities on our Condensed Consolidated Balance Sheets. Advance payments or 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. We generally receive advance payments from customers related to maintenance services which we recognize ratably over the service term. We also receive deposits from customers on certain orders which we recognize as revenue at a point in time. Billings in excess of revenue recognized represent contract liabilities and primarily relate to performance obligations satisfied over time when the cost-to-cost method is utilized and revenue cannot yet be recognized as the Company has not completed the corresponding performance obligation. Contract liabilities are derecognized when revenue is recognized and the performance obligation is satisfied.
The composition of Deferred revenue was as follows:

| March 31, 2020 |  | December 31, 2019
Deferred revenue - current | $ | 43,563 |  |  | $ | 17,633 |
Deferred revenue - noncurrent | 1,850 |  |  | 2,129 |
Total deferred revenue | $ | 45,413 |  |  | $ | 19,762 |

Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. A contract’s transaction price is allocated to each performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For our contracts that require complex design, manufacturing and installation activities, certain performance obligations may not be separately identifiable from other performance obligations in the contract and, therefore, not distinct. As a result, the entire contract is accounted for as a single performance obligation. For our contracts that include distinct products or services that are substantially the same and have the same pattern of transfer to the customer over time, they are recognized as a series of distinct products or services. Certain of our contracts have multiple performance obligations for which we allocate the transaction price to each performance obligation using an estimate of the standalone selling price of each distinct product or service in the contract. For product sales, each product sold to a customer generally represents a distinct performance obligation. In such cases, the observable standalone sales are used to determine the standalone selling price. In certain cases, we may be required to estimate standalone selling price using the expected cost plus margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct product or service.
Our performance obligations are satisfied at a point in time or over time as work progresses. Performance obligations are supported by contracts with customers that provide a framework for the nature of the distinct product or service or bundle of products and services. We define service revenue as revenue from activities that are not associated with the design, development or manufacture of a product or the delivery of a software license.
Revenue from products and services transferred to customers at a point in time approximated 96% of total revenues in both the three months ended March 31, 2020 and 2019. Revenue recognized at a point in time relates to the majority of our product sales. Revenue on these contracts is recognized when obligations under the terms of the contract with our customer are satisfied. Generally, this occurs with the transfer of control of the asset, which is in line with shipping terms.
Revenue from products and services transferred to customers over time approximated 4% of total revenues in both the three months ended March 31, 2020 and 2019. Revenue earned by certain business units within the Water, Energy, Material Processing Technologies (“MPT”) and Dispensing reporting units is recognized over time because control transfers continuously to our customers. When accounting for over-time contracts, we use an input measure to determine the extent of progress towards completion of the performance obligation. For certain business units within the Water, Energy and MPT reporting units, revenue is recognized over time as work is performed based on the relationship between actual costs incurred to date for each contract and the total estimated costs for such contract at completion of the performance obligation (i.e. the cost-to-cost method). We believe this measure of progress best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Incurred cost represents work performed, which corresponds with the transfer of control to the customer. Contract costs include labor, material and overhead. Contract estimates are based on various assumptions to project the outcome of future events. These
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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
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. For certain business units within the Energy and Dispensing reporting units, revenue is recognized ratably over the contract term.
As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our estimates regularly. Due to uncertainties inherent in the estimation process, it is reasonably possible that completion costs, 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, we recognize provisions for estimated losses on uncompleted 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.
5. Earnings Per Common Share
Earnings per common share (“EPS”) is computed by dividing net income by the weighted average number of shares of common stock (basic) plus common stock equivalents outstanding (diluted) during the period. Common stock equivalents consist of stock options, which have been included in the calculation of weighted average shares outstanding using the treasury stock method, restricted stock and performance share units.
ASC 260, Earnings Per Share, concludes that all outstanding unvested share-based payment awards that contain rights to nonforfeitable 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, EPS was computed using the two-class method prescribed by ASC 260.
Basic weighted average shares outstanding reconciles to diluted weighted average shares outstanding as follows:

|  | Three Months Ended March 31,
|  | 2020 |  | 2019
Basic weighted average common shares outstanding |  | 75,740 |  |  | 75,442 |
Dilutive effect of stock options, restricted stock and performance share units |  | 712 |  |  | 842 |
Diluted weighted average common shares outstanding |  | 76,452 |  |  | 76,284 |

Options to purchase approximately 0.6 million shares of common stock for both the three months ended March 31, 2020 and 2019 were not included in the computation of diluted EPS because the effect of their inclusion would have been antidilutive.
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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
6. Inventories
The components of inventories as of March 31, 2020 and December 31, 2019 were:

| March 31, 2020 |  | December 31, 2019
Raw materials and component parts | $ | 204,491 |  |  | $ | 182,382 |
Work in process | 42,021 |  |  | 28,761 |
Finished goods | 94,069 |  |  | 82,324 |
Total inventories | $ | 340,581 |  |  | $ | 293,467 |

Inventories are stated at the lower of cost or net realizable value. Cost, which includes material, labor and factory overhead, is determined on a first in, first out basis.
7. Goodwill and Intangible Assets
The changes in the carrying amount of goodwill for the three months ended March 31, 2020, by reportable business segment, were as follows:

| FMT |  | HST |  | FSDP |  | IDEX
Goodwill | $ | 599,646 |  |  | $ | 981,592 |  |  | $ | 399,138 |  |  | $ | 1,980,376 |
Accumulated goodwill impairment losses | (20,721 | ) |  | (149,820 | ) |  | (30,090 | ) |  | (200,631 | )
Balance at December 31, 2019 | 578,925 |  |  | 831,772 |  |  | 369,048 |  |  | 1,779,745 |
Foreign currency translation | (1,643 | ) |  | (8,856 | ) |  | (2,278 | ) |  | (12,777 | )
Acquisitions | 63,374 |  |  | — |  |  | — |  |  | 63,374 |
Acquisition adjustments | — |  |  | 1,631 |  |  | — |  |  | 1,631 |
Balance at March 31, 2020 | $ | 640,656 |  |  | $ | 824,547 |  |  | $ | 366,770 |  |  | $ | 1,831,973 |

ASC 350, Goodwill and Other Intangible Assets, requires that goodwill be tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. In the first three months of 2020, there were no events or circumstances that would have required an interim impairment test. Annually, on October 31, goodwill and other acquired intangible assets with indefinite lives are tested for impairment. Based on the results of our annual impairment test at October 31, 2019, all reporting units had fair values in excess of their carrying values.
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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset at March 31, 2020 and December 31, 2019:

| At March 31, 2020 |  |  |  | At December 31, 2019
| Gross Carrying Amount |  | Accumulated Amortization |  | Net |  | Weighted Average Life |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net
Amortized intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |
Patents | $ | 6,735 |  |  | $ | (5,428 | ) |  | $ | 1,307 |  |  | 11 |  | $ | 6,678 |  |  | $ | (5,276 | ) |  | $ | 1,402 |
Trade names | 127,840 |  |  | (66,305 | ) |  | 61,535 |  |  | 16 |  | 123,062 |  |  | (64,938 | ) |  | 58,124 |
Customer relationships | 302,284 |  |  | (101,098 | ) |  | 201,186 |  |  | 13 |  | 275,575 |  |  | (96,252 | ) |  | 179,323 |
Unpatented technology | 116,387 |  |  | (45,215 | ) |  | 71,172 |  |  | 13 |  | 101,721 |  |  | (43,561 | ) |  | 58,160 |
Other | 700 |  |  | (595 | ) |  | 105 |  |  | 10 |  | 700 |  |  | (578 | ) |  | 122 |
Total amortized intangible assets | 553,946 |  |  | (218,641 | ) |  | 335,305 |  |  |  |  | 507,736 |  |  | (210,605 | ) |  | 297,131 |
Indefinite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |
Banjo trade name | 62,100 |  |  | — |  |  | 62,100 |  |  |  |  | 62,100 |  |  | — |  |  | 62,100 |
Akron Brass trade name | 28,800 |  |  | — |  |  | 28,800 |  |  |  |  | 28,800 |  |  | — |  |  | 28,800 |
Total intangible assets | $ | 644,846 |  |  | $ | (218,641 | ) |  | $ | 426,205 |  |  |  |  | $ | 598,636 |  |  | $ | (210,605 | ) |  | $ | 388,031 |

The Banjo trade name and the Akron Brass trade name are indefinite-lived intangible assets which 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. In the first three months of 2020, there were no events or circumstances that would have required an interim impairment test on these indefinite-lived intangible assets. 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 the first three months of 2020, the outbreak of the novel coronavirus (“COVID-19”) resulted in government lockdown mandates globally as well as deteriorating business conditions that have forced us to both reduce hours and temporarily close some facilities. These events required that an interim impairment test be performed on the definite-lived intangible assets at one of the Company’s businesses. The impairment test did not result in an impairment charge.
Amortization of intangible assets was $9.5 million and $9.0 million for the three months ended March 31, 2020 and 2019, respectively. Based on the intangible asset balances as of March 31, 2020, amortization expense is expected to approximate $31.5 million for the remaining nine months of 2020, $40.8 million in 2021, $38.9 million in 2022, $36.1 million in 2023 and $34.4 million in 2024.
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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
8. Accrued Expenses
The components of accrued expenses as of March 31, 2020 and December 31, 2019 were:

| March 31, 2020 |  | December 31, 2019
Payroll and related items | $ | 60,959 |  |  | $ | 77,556 |
Management incentive compensation | 4,469 |  |  | 14,408 |
Income taxes payable | 26,977 |  |  | 9,905 |
Insurance | 10,979 |  |  | 8,240 |
Warranty | 7,152 |  |  | 5,581 |
Deferred revenue | 43,563 |  |  | 17,633 |
Lease liability | 16,117 |  |  | 15,235 |
Restructuring | 2,962 |  |  | 6,110 |
Liability for uncertain tax positions | — |  |  | 890 |
Accrued interest | 10,448 |  |  | 1,735 |
Contingent consideration for acquisition | 3,000 |  |  | 3,375 |
Other | 22,221 |  |  | 19,622 |
Total accrued expenses | $ | 208,847 |  |  | $ | 180,290 |

9. Other Noncurrent Liabilities
The components of other noncurrent liabilities as of March 31, 2020 and December 31, 2019 were:

| March 31, 2020 |  | December 31, 2019
Pension and retiree medical obligations | $ | 82,543 |  |  | $ | 87,478 |
Transition tax payable | 11,292 |  |  | 11,292 |
Liability for uncertain tax positions | 3,629 |  |  | 3,008 |
Deferred revenue | 1,850 |  |  | 2,129 |
Lease liability | 80,802 |  |  | 69,928 |
Other | 19,675 |  |  | 23,533 |
Total other noncurrent liabilities | $ | 199,791 |  |  | $ | 197,368 |

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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
10. Borrowings
Borrowings at March 31, 2020 and December 31, 2019 consisted of the following:

| March 31, 2020 |  | December 31, 2019
Revolving Facility | $ | 150,000 |  |  | $ | — |
4.50% Senior Notes, due December 2020 | 300,000 |  |  | 300,000 |
4.20% Senior Notes, due December 2021 | 350,000 |  |  | 350,000 |
3.20% Senior Notes, due June 2023 | 100,000 |  |  | 100,000 |
3.37% Senior Notes, due June 2025 | 100,000 |  |  | 100,000 |
Other borrowings | 483 |  |  | 622 |
Total borrowings | 1,000,483 |  |  | 850,622 |
Less current portion | 319 |  |  | 388 |
Less deferred debt issuance costs | 830 |  |  | 983 |
Less unaccreted debt discount | 314 |  |  | 387 |
Total long-term borrowings | $ | 999,020 |  |  | $ | 848,864 |

On June 13, 2016, the Company completed a private placement of a $100 million aggregate principal amount of 3.20% Senior Notes due June 13, 2023 and a $100 million aggregate principal amount of 3.37% Senior Notes due June 13, 2025 (collectively, the “Notes”) pursuant to a Note Purchase Agreement dated June 13, 2016 (the “Purchase Agreement”). Each series of Notes bears interest at the stated amount per annum, which is payable semi-annually in arrears on each June 13 th and December 13 th. The Notes are unsecured obligations of the Company and rank pari passu in right of payment with all of the Company’s other unsecured, unsubordinated debt. The Company may at any time prepay all, or any portion of the Notes, provided that such portion is greater than 5% of the aggregate principal amount of the Notes then outstanding. In the event of a prepayment, the Company will pay an amount equal to par plus accrued interest plus a make-whole amount. In addition, the Company may repurchase the Notes by making an offer to all holders of the Notes, subject to certain conditions.
The Purchase Agreement contains certain covenants that restrict the Company’s ability to, among other things, transfer or sell assets, incur indebtedness, create liens, transact with affiliates and engage in certain mergers or consolidations or other change of control transactions. In addition, the Company must comply with a leverage ratio and interest coverage ratio, as further described below, and the Purchase Agreement also limits the outstanding principal amount of priority debt that may be incurred by the Company to 15% of consolidated assets. The Purchase Agreement provides for customary events of default. In the case of an event of default arising from specified events of bankruptcy or insolvency, all of the outstanding Notes will become due and payable immediately without further action or notice. In the case of a payment event of default, any holder of the Notes affected thereby may declare all of the Notes held by it due and payable immediately. In the case of any other event of default, a majority of the holders of the Notes may declare all of the Notes to be due and payable immediately.
On May 31, 2019, the Company entered into a credit agreement (the “Credit Agreement”) along with certain of its subsidiaries, as borrowers (the “Borrowers”), Bank of America, N.A., as administrative agent, swing line lender and an issuer of letters of credit, with other agents party thereto. The Credit Agreement replaced the Company’s prior five-year, $700 million credit agreement, dated as of June 23, 2015, which was due to expire in June 2020.
Terms and fees of the Credit Agreement are essentially the same as the prior credit agreement except for certain fees and interest rate pricing that are more favorable to the Company.
The Credit Agreement consists of a revolving credit facility (the “Revolving Facility”) in an aggregate principal amount of $800 million with a final maturity date of May 31, 2024. The maturity date may be extended under certain conditions for an additional one-year term. Up to $75 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 acquisitions, working capital and other general corporate purposes, including refinancing existing debt of the Company and its subsidiaries. The Company may request increases
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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
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.
Borrowings under the Credit Agreement bear interest, at either an alternate base rate or adjusted LIBOR plus, in each case, an applicable margin. Such applicable margin is based on the lower 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%. Based on the Company’s leverage ratio at March 31, 2020, the applicable margin was 0.90% resulting in a weighted average interest rate of 1.82% at March 31, 2020. Interest is payable (a) in the case of base rate loans, quarterly, and (b) in the case of LIBOR loans, on the last day of the applicable interest period selected, or every three months from the effective date of such interest period for interest periods exceeding three months.
The Credit Agreement 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, determined based on the lower of the Company’s senior, unsecured long-term debt rating or the Company’s applicable leverage ratio. Voluntary prepayments of any loans and voluntary reductions of the unutilized portion of the commitments under the Credit Agreement are permissible without penalty, subject to break funding payments and minimum notice and minimum reduction amount requirements.
The Credit Agreement contains customary affirmative and negative covenants for senior unsecured credit agreements, including an interest coverage ratio test and a leverage ratio test, in each case tested quarterly and, in the case of the leverage ratio, with an option to increase the ratio for 12 months in connection with certain acquisitions. The negative covenants include restrictions on the Company’s ability to grant liens, enter into transactions resulting in fundamental changes (such as mergers or sales of all or substantially all of the assets of the Company), make certain subsidiary dividends or distributions, engage in materially different lines of businesses and allow subsidiaries to incur certain additional debt.
The Credit Agreement also contains customary events of default (subject to grace periods, as appropriate).
At March 31, 2020, there was $150.0 million balance outstanding under the Revolving Facility and $7.8 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility at March 31, 2020 of approximately $642.2 million.
As of March 31, 2020, $300.0 million 4.5% Senior Notes are due in December 2020 but have not been classified as short-term borrowings on the Condensed Consolidated Balance Sheets as the Company has the ability and intent to either refinance or repay the Notes using the available borrowing capacity of the Revolving Facility. As a result, the 4.5% Senior Notes remain classified as long-term borrowings on the Condensed Consolidated Balance Sheets as of March 31, 2020.
There are two key financial covenants that the Company is required to maintain in connection with the Revolving Facility and the Notes: a minimum interest coverage ratio of 3.00 to 1 and a maximum leverage ratio of 3.50 to 1, which is the ratio of the Company’s consolidated total debt to its consolidated earnings before interest, income taxes, depreciation and amortization (“EBITDA”). In the case of the leverage ratio under the Revolving Facility, there is an option to increase the ratio to 4.00 for 12 months in connection with certain acquisitions. At March 31, 2020, the Company was in compliance with both of these financial covenants. There are no financial covenants relating to the 4.5% Senior Notes or 4.2% Senior Notes; however, both are subject to cross-default provisions.
11. Derivative Instruments
The Company enters into cash flow hedges from time to time to reduce the exposure to variability in certain expected future cash flows. The types of cash flow hedges the Company enters into include foreign currency exchange contracts designed to minimize the earnings impact on certain intercompany loans as well as interest rate exchange agreements designed to reduce the impact of interest rate changes on future interest expense that effectively convert a portion of floating-rate debt to fixed-rate debt.
The effective portion of gains or losses on interest rate exchange agreements is reported in accumulated other comprehensive income (loss) in shareholders’ equity and reclassified into net income in the same period or periods in which the hedged transaction affects net income. The remaining gain or loss in excess of the cumulative change in the present value of future cash flows or the hedged item, if any, is recognized in net income during the period of change. See Note 15 for the amount of loss reclassified into
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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
net income for interest rate contracts for the three months ended March 31, 2020 and 2019. As of March 31, 2020, the Company did not have any interest rate contracts outstanding.
In 2010 and 2011, the Company entered into two separate forward starting interest rate exchange agreements in anticipation of the issuance of the 4.2% Senior Notes and the 4.5% Senior Notes. The Company cash settled these two interest rate contracts in 2010 and 2011 for a total of $68.9 million, which is being amortized into interest expense over the 10 year terms of the respective debt instruments. Approximately $5.3 million of the pre-tax amount included in Accumulated other comprehensive income (loss) in shareholders’ equity at March 31, 2020 will be recognized in net income over the next 12 months as the underlying hedged transactions are realized.
Fair values relating to derivative financial instruments reflect the estimated amounts that the Company would receive or pay to sell or buy the contracts based on quoted market prices of comparable contracts at each balance sheet date.
12. 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 March 31, 2020 and December 31, 2019:

| Basis of Fair Value Measurements
| Balance at March 31, 2020 |  | Level 1 |  | Level 2 |  | Level 3
Available for sale securities | $ | 9,250 |  |  | $ | 9,250 |  |  | $ | — |  |  | $ | — |
Contingent consideration | 3,000 |  |  | — |  |  | — |  |  | 3,000 |

| Basis of Fair Value Measurements
| Balance at December 31, 2019 |  | Level 1 |  | Level 2 |  | Level 3
Available for sale securities | $ | 10,462 |  |  | $ | 10,462 |  |  | $ | — |  |  | $ | — |
Contingent consideration | 3,375 |  |  | — |  |  | — |  |  | 3,375 |

There were no transfers of assets or liabilities between Level 1 and Level 2 during the three months ended March 31, 2020 or the year ended December 31, 2019.
As of December 31, 2019, the Company utilized a Monte Carlo simulation to determine the fair value of the contingent consideration associated with the acquisition of Finger Lakes Instrumentation as of the acquisition date. In March 2020, the Company and the seller reached an agreement to settle the contingency for $3.0 million, which was paid in April 2020. As of March 31, 2020, $3.0 million of contingent consideration was included in Accrued expenses on the Condensed Consolidated Balance Sheets.
The carrying values of our cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate their fair values because of the short term nature of these instruments. At March 31, 2020, the fair value of the outstanding indebtedness under our Revolving Facility, 3.2% Senior Notes, 3.37% Senior Notes, 4.5% Senior Notes, 4.2% Senior Notes and
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
other borrowings based on quoted market prices and current market rates for debt with similar credit risk and maturity was approximately $1,000.1 million compared to the carrying value of $1,000.2 million. At December 31, 2019, the fair value of the outstanding indebtedness under our 3.2% Senior Notes, 3.37% Senior Notes, 4.5% Senior Notes, 4.2% Senior Notes and other borrowings based on quoted market prices and current market rates for debt with similar credit risk and maturity was approximately $876.0 million compared to the carrying value of $850.2 million. 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 ours.
13. Leases
The Company leases certain office facilities, warehouses, manufacturing plants, equipment (which includes both office and plant equipment) and vehicles under operating leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.
Certain leases include one or more options to renew. The exercise of lease renewal options is at the Company’s sole discretion. There are currently no renewal periods included in any of the leases’ respective lease terms as they are not reasonably certain of being exercised. The Company does not have any material purchase options.
Certain of our lease agreements have rental payments that are adjusted periodically for inflation or that are based on usage. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Supplemental balance sheet information related to leases as of March 31, 2020 and December 31, 2019 was as follows:

| Balance Sheet Caption | March 31, 2020 |  | December 31, 2019
Operating leases: |  |  |  |
Building right-of-use assets - net | Other noncurrent assets | $ | 88,156 |  |  | $ | 75,381 |
Equipment right-of-use assets - net | Other noncurrent assets | 5,872 |  |  | 6,993 |
Total right-of-use assets - net |  | $ | 94,028 |  |  | $ | 82,374 |
Operating leases: |  |  |  |
Current lease liabilities | Accrued expenses | $ | 16,117 |  |  | $ | 15,235 |
Noncurrent lease liabilities | Other noncurrent liabilities | 80,802 |  |  | 69,928 |
Total lease liabilities |  | $ | 96,919 |  |  | $ | 85,163 |

The components of lease cost for the three months ended March 31, 2020 and 2019 were as follows:

| Three Months Ended March 31, 2020 |  | Three Months Ended March 31, 2019
Operating lease cost (1) | $ | 6,328 |  |  | $ | 5,375 |
Variable lease cost | 641 |  |  | 593 |
Total lease expense | $ | 6,969 |  |  | $ | 5,968 |

(1) Includes short-term leases.
Supplemental cash flow information related to leases for the three months ended March 31, 2020 and 2019 was as follows:

| Three Months Ended March 31, 2020 |  | Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of operating lease liabilities | $ | 6,038 |  |  | $ | 5,539 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 17,024 |  |  | 1,809 |

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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
Other supplemental information related to leases as of March 31, 2020 and December 31, 2019 was as follows:

Lease Term and Discount Rate | March 31, 2020 |  | December 31, 2019
Weighted-average remaining lease term (years): |  |  |
Operating leases - building and equipment | 9.84 |  |  | 9.61 |
Operating leases - vehicles | 1.92 |  |  | 1.92 |
Weighted-average discount rate: |  |  |
Operating leases - building and equipment | 3.75 | % |  | 4.08 | %
Operating leases - vehicles | 2.93 | % |  | 2.99 | %

The Company uses its incremental borrowing rate to determine the present value of the lease payments.
Total lease liabilities at March 31, 2020 have scheduled maturities as follows:

Maturity of Lease Liabilities | Operating Leases (1)
2020 (excluding the three months ended March 31, 2020) | $ | 14,121 |
2021 | 16,206 |
2022 | 13,201 |
2023 | 10,812 |
2024 | 8,773 |
Thereafter | 54,945 |
Total lease payments | 118,058 |
Less: Imputed interest | (21,139 | )
Present value of lease liabilities | $ | 96,919 |

(1) Excludes $6.4 million of legally binding minimum lease payments for leases signed but not yet commenced.
Total lease liabilities at December 31, 2019 had scheduled maturities as follows:

Maturity of Lease Liabilities | Operating Leases
2020 | $ | 18,449 |
2021 | 15,070 |
2022 | 10,647 |
2023 | 8,894 |
2024 | 7,037 |
Thereafter | 44,284 |
Total lease payments | 104,381 |
Less: Imputed interest | (19,218 | )
Present value of lease liabilities | $ | 85,163 |

14. Restructuring

During the year ended December 31, 2019, the Company recorded accruals for restructuring costs incurred to facilitate long-term, sustainable growth through cost reduction actions, consisting of employee reductions and facility rationalization. Restructuring accruals of $3.0 million and $6.1 million at March 31, 2020 and December 31, 2019, respectively, are reflected in Accrued expenses on our Condensed Consolidated Balance Sheets. Severance benefits are expected to be paid by the end of the year using cash from operations. The changes in the restructuring accrual for the three months ended March 31, 2020 are as follows:
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)

| Restructuring
Balance at January 1, 2020 | $ | 6,110 |
Restructuring expenses | — |
Payments, utilization and other | (3,148 | )
Balance at March 31, 2020 | $ | 2,962 |

15. Other Comprehensive Income (Loss)
The components of Other comprehensive income (loss) are as follows:

| Three Months Ended March 31, 2020 |  | Three Months Ended March 31, 2019
| Pre-tax |  | Tax |  | Net of tax |  | Pre-tax |  | Tax |  | Net of tax
Cumulative translation adjustment | $ | (26,456 | ) |  | $ | — |  |  | $ | (26,456 | ) |  | $ | (3,281 | ) |  | $ | — |  |  | $ | (3,281 | )
Pension and other postretirement adjustments | 2,874 |  |  | (578 | ) |  | 2,296 |  |  | 1,700 |  |  | (438 | ) |  | 1,262 |
Reclassification adjustments for derivatives | 1,545 |  |  | (351 | ) |  | 1,194 |  |  | 1,588 |  |  | (361 | ) |  | 1,227 |
Total other comprehensive income (loss) | $ | (22,037 | ) |  | $ | (929 | ) |  | $ | (22,966 | ) |  | $ | 7 |  |  | $ | (799 | ) |  | $ | (792 | )

The following table summarizes the amounts reclassified from accumulated other comprehensive income (loss) to net income during the three months ended March 31, 2020 and 2019:

|  | Three Months Ended March 31, |
|  | 2020 |  | 2019 | Income Statement Caption
Pension and other postretirement plans: |  |  |  |  |
Amortization of net (gain) loss |  | $ | 2,874 |  |  | $ | 1,700 |  | Other (income) expense - net
Total before tax |  | 2,874 |  |  | 1,700 |  |
Provision for income taxes |  | (578 | ) |  | (438 | ) |
Total net of tax |  | $ | 2,296 |  |  | $ | 1,262 |  |
Derivatives: |  |  |  |  |
Reclassification adjustments |  | $ | 1,545 |  |  | $ | 1,588 |  | Interest expense
Total before tax |  | 1,545 |  |  | 1,588 |  |
Provision for income taxes |  | (351 | ) |  | (361 | ) |
Total net of tax |  | $ | 1,194 |  |  | $ | 1,227 |  |

16. Common and Preferred Stock
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 and $400.0 million on November 6, 2014. These authorizations have no expiration date. Repurchases under the program will be funded with future cash flow generation or borrowings available under the Revolving Facility. During the three months ended March 31, 2020, the Company repurchased a total of 867 thousand shares at a cost of $108.9 million. During the three months ended March 31, 2019, the Company repurchased a total of 370 thousand shares at a cost of $51.7 million, of which $0.9 million was settled in April 2019. As of March 31, 2020, the amount of share repurchase authorizations remaining was $713.4 million.
At March 31, 2020 and December 31, 2019, the Company had 150 million shares of authorized common stock, with a par value of $.01 per share, and five million shares of authorized preferred stock, with a par value of $.01 per share. No preferred stock was outstanding at March 31, 2020 or December 31, 2019.
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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
17. Share-Based Compensation
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.
Stock Options
Stock options generally vest ratably over four years. Weighted average option fair values and assumptions for the periods specified are disclosed below. The fair value of each option grant was estimated on the date of the grant using the Binomial lattice option pricing model.

|  | Three Months Ended March 31,
|  | 2020 |  | 2019
Weighted average fair value of grants |  | $34.34 |  | $35.17
Dividend yield |  | 1.15% |  | 1.18%
Volatility |  | 22.01% |  | 24.79%
Risk-free interest rate |  | 1.43% - 1.68% |  | 2.53% - 3.05%
Expected life (in years) |  | 5.80 |  | 5.87

Total compensation cost for stock options is as follows:

|  | Three Months Ended March 31,
|  | 2020 |  | 2019
Cost of goods sold |  | $ | 185 |  |  | $ | 192 |
Selling, general and administrative expenses |  | 3,145 |  |  | 2,540 |
Total expense before income taxes |  | 3,330 |  |  | 2,732 |
Income tax benefit |  | (367 | ) |  | (368 | )
Total expense after income taxes |  | $ | 2,963 |  |  | $ | 2,364 |

A summary of the Company’s stock option activity as of March 31, 2020 and changes during the three months ended March 31, 2020 are presented in the following table:

Stock Options | Shares |  | Weighted Average Price |  | Weighted-Average Remaining Contractual Term |  | Aggregate Intrinsic Value
Outstanding at January 1, 2020 | 1,386,539 |  |  | $ | 103.58 |  |  | 6.95 |  | $ | 94,764,140 |
Granted | 341,285 |  |  | 173.31 |  |  |  |  |
Exercised | (27,978 | ) |  | 74.68 |  |  |  |  |
Forfeited | (22,665 | ) |  | 131.64 |  |  |  |  |
Outstanding at March 31, 2020 | 1,677,181 |  |  | $ | 117.88 |  |  | 7.36 |  | $ | 48,014,239 |
Vested and expected to vest as of March 31, 2020 | 1,214,651 |  |  | $ | 80.14 |  |  | 4.78 |  | $ | 36,239,484 |
Exercisable at March 31, 2020 | 562,925 |  |  | $ | 80.05 |  |  | 5.38 |  | $ | 32,686,084 |

Restricted Stock
Restricted stock awards generally cliff vest after three years for employees and non-employee directors. Unvested restricted stock carries dividend and voting rights and the sale of the shares is restricted prior to the date of vesting. A summary of the Company’s restricted stock activity as of March 31, 2020 and changes during the three months ended March 31, 2020 are presented as follows:
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)

Restricted Stock | Shares |  | Weighted-Average Grant Date Fair Value
Unvested at January 1, 2020 | 130,248 |  |  | $ | 124.61 |
Granted | 26,670 |  |  | 173.25 |
Vested | (37,761 | ) |  | 94.52 |
Forfeited | (6,990 | ) |  | 128.12 |
Unvested at March 31, 2020 | 112,167 |  |  | $ | 146.01 |

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.
Total compensation cost for restricted stock awards is as follows:

|  | Three Months Ended March 31,
|  | 2020 |  | 2019
Cost of goods sold |  | $ | 109 |  |  | $ | 138 |
Selling, general and administrative expenses |  | 982 |  |  | 1,288 |
Total expense before income taxes |  | 1,091 |  |  | 1,426 |
Income tax benefit |  | (229 | ) |  | (275 | )
Total expense after income taxes |  | $ | 862 |  |  | $ | 1,151 |

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. 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. A summary of the Company’s unvested cash-settled restricted stock activity as of March 31, 2020 and changes during the three months ended March 31, 2020 are presented in the following table:

Cash-Settled Restricted Stock | Shares |  | Weighted-Average Fair Value
Unvested at January 1, 2020 | 74,560 |  |  | $ | 172.08 |
Granted | 20,365 |  |  | 173.35 |
Vested | (24,240 | ) |  | 173.35 |
Forfeited | (805 | ) |  | 138.11 |
Unvested at March 31, 2020 | 69,880 |  |  | $ | 138.11 |

Dividend equivalents are paid on certain cash-settled restricted stock awards. Total compensation cost for cash-settled restricted stock is as follows:

|  | Three Months Ended March 31,
|  | 2020 |  | 2019
Cost of goods sold |  | $ | 71 |  |  | $ | 500 |
Selling, general and administrative expenses |  | 189 |  |  | 1,530 |
Total expense before income taxes |  | 260 |  |  | 2,030 |
Income tax benefit |  | (16 | ) |  | (187 | )
Total expense after income taxes |  | $ | 244 |  |  | $ | 1,843 |

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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
Performance Share Units
Weighted average performance share unit fair values and assumptions for the period specified are disclosed below. The performance share units are market condition awards and have been assessed at fair value on the date of grant using a Monte Carlo simulation model.

| Three Months Ended March 31,
| 2020 |  | 2019
Weighted average fair value of grants | $224.14 |  | $203.06
Dividend yield | —% |  | —%
Volatility | 19.5% |  | 19.08%
Risk-free interest rate | 1.30% |  | 2.53%
Expected life (in years) | 2.94 |  | 2.84

A summary of the Company’s performance share unit activity as of March 31, 2020 and changes during the three months ended March 31, 2020 are presented in the following table:

Performance Share Units | Shares |  | Weighted-Average Grant Date Fair Value
Unvested at January 1, 2020 | 100,575 |  |  | $ | 178.97 |
Granted | 42,690 |  |  | 224.14 |
Vested | — |  |  | — |
Forfeited | (4,185 | ) |  | 211.73 |
Unvested at March 31, 2020 | 139,080 |  |  | $ | 215.46 |

On December 31, 2019, 54,545 performance share units vested. Based on the Company’s relative total shareholder return rank during the three year period ended December 31, 2019, the Company achieved a 250% payout factor and issued 136,370 common shares in February 2020.
Total compensation cost for performance share units is as follows:

|  | Three Months Ended March 31,
|  | 2020 |  | 2019
Cost of goods sold |  | $ | — |  |  | $ | — |
Selling, general and administrative expenses |  | 2,049 |  |  | 1,372 |
Total expense before income taxes |  | 2,049 |  |  | 1,372 |
Income tax benefit |  | (49 | ) |  | (48 | )
Total expense after income taxes |  | $ | 2,000 |  |  | $ | 1,324 |

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 Condensed Consolidated Statements of Operations is consistent with classification of cash compensation for the same employees.
As of March 31, 2020, there was $19.3 million of total unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 1.5 years, $7.7 million of total unrecognized compensation cost related to restricted stock that is expected to be recognized over a weighted-average period of 1.2 years, $4.2 million of total unrecognized compensation cost related to cash-settled restricted shares that is expected to be recognized over a weighted-average period of 1.2 years and $14.1 million of total unrecognized compensation cost related to performance share units that is expected to be recognized over a weighted-average period of 1.1 years.
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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
18. Retirement Benefits
The Company sponsors several qualified and nonqualified defined benefit and defined contribution pension plans and other postretirement plans for its employees. The following tables provide the components of net periodic benefit cost for its major defined benefit plans and its other postretirement plans.

| Pension Benefits
| Three Months Ended March 31,
| 2020 |  | 2019
| U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S.
Service cost | $ | 34 |  |  | $ | 540 |  |  | $ | 208 |  |  | $ | 464 |
Interest cost | 461 |  |  | 263 |  |  | 764 |  |  | 365 |
Expected return on plan assets | (899 | ) |  | (291 | ) |  | (801 | ) |  | (264 | )
Net amortization and settlement effect | 744 |  |  | 426 |  |  | 487 |  |  | 284 |
Net periodic benefit cost | $ | 340 |  |  | $ | 938 |  |  | $ | 658 |  |  | $ | 849 |

| Other Postretirement Benefits
|  | Three Months Ended March 31,
|  | 2020 |  | 2019
Service cost |  | $ | 155 |  |  | $ | 140 |
Interest cost |  | 156 |  |  | 212 |
Net amortization |  | (136 | ) |  | (159 | )
Net periodic benefit cost |  | $ | 175 |  |  | $ | 193 |

The Company previously disclosed in its financial statements for the year ended December 31, 2019, that it expected to contribute approximately $3.0 million to its defined benefit plans and $1.1 million to its other postretirement benefit plans in 2020. During the first three months of 2020, the Company contributed a total of $0.1 million to fund these plans.
Effective September 30, 2019, the IDEX Corporation Retirement Plan (“Plan”), a U.S. defined benefit plan, was amended to freeze the accrual of retirement benefits for all participants. This action impacted fewer than 60 participants, as the Plan had been closed to new entrants as of December 31, 2004 and frozen as of December 31, 2005 for all but certain older, longer service participants. Subsequent to the freeze, termination of the Plan was approved in November 2019. Participants were notified in February 2020 and the Plan will be terminated in May 2020. As a result, settlements have been triggered in the first quarter of 2020 and the Company recorded a charge of $0.3 million to Other (income) expense - net in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2020. In addition, the Plan’s funded status at March 31, 2020 is 105%, with assets valued at $89.1 million and liabilities of $84.6 million.
19. Legal Proceedings
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.
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IDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
(unaudited)
20. Income Taxes
The Company’s provision for income taxes is based upon estimated annual tax rates for the year applied to federal, state and foreign income. The provision for income taxes decreased to $25.5 million for the three months ended March 31, 2020 compared to $26.7 million during the same period in 2019. The effective tax rate increased to 20.0% for the three months ended March 31, 2020 compared to 19.5% during the same period in 2019 primarily due to a decrease in the excess tax benefits related to share-based compensation.
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Due to the potential for resolution of federal, state and foreign examinations, and the expiration of various statutes of limitation, it is reasonably possible that the Company’s gross unrecognized tax benefits balance may change. However, these unrecognized tax benefits are long-term in nature and will not change within the next twelve months.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement Under the Private Securities Litigation Reform Act
This quarterly report on Form 10-Q, including the “Overview,” “Liquidity and Capital Resources” and “Results of Operations” sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements may relate to, among other things, the anticipated effects of the coronavirus pandemic, including with respect to the Company’s sales, facility closures, supply chains and access to capital, capital expenditures, acquisitions, cost reductions, cash flow, cash requirements, revenues, earnings, market conditions, global economies, plant and equipment capacity and operating improvements, and are indicated by words or phrases such as “anticipates,” “estimates,” “plans,” “expects,” “projects,” “forecasts,” “should,” “could,” “will,” “management believes,” “the Company believes,” “the Company intends,” and similar words or phrases. These statements are subject to inherent uncertainties and risks that could cause actual results to differ materially from those anticipated at the date of this report. The risks and uncertainties include, but are not limited to, the following: the duration of the coronavirus pandemic and the effects of the coronavirus on our ability to operate our business and facilities, on our customers, on supply chains and on the U.S. and global economy generally; economic and political consequences resulting from terrorist attacks and wars; levels of industrial activity and economic conditions in the U.S. and other countries around the world; pricing pressures and other competitive factors and levels of capital spending in certain industries, all of which could have a material impact on order rates and the Company’s results, particularly in light of the low levels of order backlogs it typically maintains; the Company’s ability to make acquisitions and to integrate and operate acquired businesses on a profitable basis; the relationship of the U.S. dollar to other currencies and its impact on pricing and cost competitiveness; political and economic conditions in foreign countries in which the Company operates; developments with respect to trade policy and tariffs; interest rates; capacity utilization and the effect this has on costs; labor markets; market conditions and material costs; and developments with respect to contingencies, such as litigation and environmental matters. Additional factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the “Risk Factors” section included in the Company’s most recent annual report on Form 10-K and the Company’s subsequent quarterly reports, including this quarterly report on Form 10-Q, filed with the Securities and Exchange Commission (“SEC”) and the other risks discussed in the Company’s filings with the SEC. The forward-looking statements included here are only made as of the date of this report, and management undertakes no obligation to publicly update them to reflect subsequent events or circumstances, except as may be required by law. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented here.
Overview
IDEX Corporation (“IDEX,” “we,” “our,” or the “Company”) is an applied solutions company specializing in the manufacture of fluid and metering technologies, health and science technologies and fire, safety and other diversified products built to customers’ specifications. IDEX’s products are sold in niche markets across a wide range of industries throughout the world. Accordingly, IDEX’s businesses are affected by levels of industrial activity and economic conditions in the U.S. and in other countries where it does business and by the relationship of the U.S. Dollar to other currencies. Levels of capacity utilization and capital spending in certain industries and overall industrial activity are important factors that influence the demand for IDEX’s products.
The Company has three reportable business segments: Fluid & Metering Technologies, Health & Science Technologies and Fire & Safety/Diversified Products. Within our three reportable segments, the Company maintains 13 platforms, where we focus
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on organic growth and strategic acquisitions. Each of our 13 platforms is also a reporting unit that we annually test goodwill for impairment.
The Fluid & Metering Technologies segment designs, produces and distributes positive displacement pumps, 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. The Fluid & Metering Technologies segment contains the Energy platform (comprised of Corken, Liquid Controls, SAMPI, Toptech and Flow Management Devices, LLC (“Flow MD”)), the Valves platform (comprised of Alfa Valvole, Richter and Aegis), the Water platform (comprised of Pulsafeeder, OBL, Knight, ADS, Trebor and iPEK), the Pumps platform (comprised of Viking and Warren Rupp) and the Agriculture platform (comprised of Banjo).
The Health & Science Technologies segment designs, produces and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems used in beverage, food processing, pharmaceutical and cosmetics, pneumatic components and sealing solutions, including very high precision, low-flow rate pumping solutions required in analytical instrumentation, clinical diagnostics and drug discovery, high performance molded and extruded sealing components, custom mechanical and shaft seals for a variety of end markets including food and beverage, marine, chemical, wastewater and water treatment, engineered hygienic mixers and valves for the global biopharmaceutical industry, biocompatible medical devices and implantables, air compressors used in medical, dental and industrial applications, optical components and coatings for applications in the fields of scientific research, defense, biotechnology, aerospace, telecommunications and electronics manufacturing, laboratory and commercial equipment used in the production of micro and nano scale materials, precision photonic solutions used in life sciences, research and defense markets and precision gear and peristaltic pump technologies that meet exacting original equipment manufacturer specifications. The Health & Science Technologies segment contains the Scientific Fluidics & Optics platform (comprised of Eastern Plastics, Rheodyne, Sapphire Engineering, Upchurch Scientific, ERC, CiDRA Precision Services, thinXXS, CVI Melles Griot, Semrock, Advanced Thin Films and FLI), the Sealing Solutions platform (comprised of Precision Polymer Engineering, FTL Seals Technology, Novotema, SFC Koenig and Velcora), the Gast platform, the Micropump platform and the Material Processing Technologies platform (comprised of Quadro, Fitzpatrick, Microfluidics and Matcon).
The Fire & Safety/Diversified Products segment designs, produces and develops 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 and precision equipment for dispensing, metering and mixing colorants and paints used in a variety of retail and commercial businesses around the world. The Fire & Safety/Diversified Products segment is comprised of the Fire & Safety platform (comprised of Class 1, Hale, Akron Brass, Weldon, AWG Fittings, Godiva, Dinglee, Hurst Jaws of Life, Lukas and Vetter), the BAND-IT platform and the Dispensing platform.
Management’s primary measurements of segment performance are sales, operating income and operating margin. In addition, due to the highly acquisitive nature of the Company, the determination of operating income includes amortization of acquired intangible assets and as a result, management reviews depreciation and amortization as a percentage of sales. These measures are monitored by management and significant changes in operating results versus current trends in end markets and variances from forecasts are analyzed with segment management.
This report references organic sales, a non-GAAP measure, that refers to sales from continuing operations calculated according to accounting principles generally accepted in the United States of America (“U.S. GAAP”) but excludes (1) the impact of foreign currency translation and (2) sales from acquired or divested businesses during the first twelve months of ownership or divestiture. The portion of sales attributable to foreign currency translation is calculated as the difference between (a) the period-to-period change in organic sales and (b) the period-to-period change in organic sales after applying prior period foreign exchange rates to the current year period. Management believes that reporting organic sales provides useful information to investors by helping identify underlying growth trends in our business and facilitating easier comparisons of our revenue performance with prior and future periods and to our peers. The Company excludes the effect of foreign currency translation from organic sales because foreign currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. The Company excludes the effect of acquisitions and divestitures because they can obscure underlying business trends and make comparisons of long term performance difficult due to the varying nature, size and number of transactions from period to period and between the Company and its peers.
EBITDA, a non-GAAP measure, means earnings before interest, income taxes, depreciation and amortization. Given the acquisitive nature of the Company, which results in a higher level of amortization expense from recently acquired businesses, management uses EBITDA as an internal operating metric to provide another representation of the businesses’ performance across our three segments and for enterprise valuation purposes. Management believes that EBITDA is useful to investors as an indicator of the strength and performance of the Company and a way to evaluate and compare operating performance and value companies within our industry. Management believes that EBITDA margin is useful for the same reason as EBITDA. EBITDA is also used
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to calculate certain financial covenants, as discussed in Note 10 in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, “Financial Statements.”
Organic sales have been reconciled to net sales and EBITDA has been reconciled to net income under the heading “Non-GAAP Disclosures.” The reconciliation of segment EBITDA to net income was performed on a consolidated basis due to the fact that we do not allocate consolidated interest expense or the consolidated provision for income taxes to our segments.
The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures prepared in accordance with U.S. GAAP. The financial results prepared in accordance with U.S. GAAP and the reconciliations from these results should be carefully evaluated.
Some of our key financial results for the three months ended March 31, 2020 when compared to the same period in the prior year are as follows:

• | Sales of $594.5 million decreased 4%; organic sales (which excludes acquisitions and foreign currency translation) were down 5%.

• | Operating income of $139.9 million decreased 5%.

• | Net income of $102.0 million decreased 7%.

• | EBITDA of $158.4 million was 27% of sales and covered interest expense by almost 15 times.

• | Diluted EPS of $1.33 decreased 11 cents, or 8%.

Results of Operations
The following is a discussion and analysis of our results of operations for the three months ended March 31, 2020 and 2019. Segment operating income and EBITDA exclude unallocated corporate operating expenses of $17.5 million and $18.6 million for the three months ended March 31, 2020 and 2019, respectively.
The Company continues to help in the fight against COVID-19 with several of our businesses playing critical roles in keeping essential societal functions going. For example, IDEX China is manufacturing hospital grade air compressors for portable ventilators, Vetter is building triage tents for hospitals around the world, Gast is producing thousands of compressors used in mobile sanitizing spray carts, Warren Rupp is selling pumps used in the production of hand sanitizers and IDEX Health and Science designs and manufactures components and sub-systems being used in instruments that have sequenced the RNA of COVID-19 to test for and track the spread of the disease, identify potential treatments and ultimately develop a vaccine.
We are focused on making sure our employees are safe and our operations have the ability to deliver the products needed to support the COVID-19 battle. Most of our sites have been deemed vital operations and remain open, however, the virus has caused a few of our sites to shut down on a temporary basis due to government mandates globally. This has primarily occurred in China, Italy and India with most coming back on line with varying levels of capacity. The Company expects the weeks and months ahead will be especially challenging as this global pandemic continues to progress and, based on currently available information and management’s current expectations, the Company anticipates that sales will be down 15 to 25 percent in the second quarter of 2020. Based on management’s current expectations, we believe our strong balance sheet, with over $1.2 billion of liquidity and gross leverage of 1.5 times, will provide IDEX the necessary capital to navigate the COVID-19 pandemic for a significant period of time. However, we can provide no assurances that access to our invested cash, cash equivalents or short-term investments will not be impacted by adverse conditions in the financial markets, including, without limitation, as a result of the impact of the COVID-19 pandemic and we cannot predict how long the COVID-19 pandemic will continue. Moreover, COVID-19 and related measures to contain its impact have caused material disruptions in both national and global financial markets and economies. The future impact of COVID-19 and the enacted containment measures cannot be predicted and may adversely affect, perhaps materially, our business, results of operations, financial condition and liquidity.
Consolidated Results for the Three Months Ended March 31, 2020 Compared with the Same Period in 2019

(In thousands) | Three Months Ended March 31,
| 2020 |  | 2019
Net sales | $ | 594,462 |  |  | $ | 622,231 |
Operating income | 139,941 |  |  | 147,782 |
Operating margin | 23.5 | % |  | 23.8 | %

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Sales in the first quarter of 2020 were $594.5 million, which was a 4% decrease compared to the same period in 2019. This reflects a 5% decrease in organic sales and a 1% unfavorable impact from foreign currency translation, partially offset by a 2% increase from acquisitions. Sales to customers outside the U.S. represented approximately 50% of total sales in the first quarter s of both 2020 and 2019.
Gross profit of $272.0 million in the first quarter of 2020 decreased $11.9 million, or 4%, compared to the same period in 2019, and gross margin of 45.7% in the first quarter of 2020 increased 10 basis points from 45.6% during the same period in 2019. Gross profit decreased compared to the prior year period as a result of reduced volume. The increase in gross margin was driven by price, productivity initiatives and an overall tight cost control environment, partially offset by reduced volume.
Selling, general and administrative expenses decreased to $132.0 million in the first quarter of 2020 from $136.1 million during the same period in 2019. The decrease is primarily due to lower variable compensation costs as well as an overall tight cost control environment. Corporate costs of $17.5 million in the first quarter of 2020 decreased from $18.6 million in the same period of 2019 primarily as a result of tightly controlling discretionary spending and lower variable compensation costs in 2020. As a percentage of sales, selling, general and administrative expenses were 22.2% for the first quarter of 2020, up 40 basis points compared to 21.8% during the same period in 2019.
Operating income of $139.9 million and operating margin of 23.5% in the first quarter of 2020 were down from $147.8 million and 23.8%, respectively, during the same period in 2019. The decrease in operating income was driven by our lower sales volume and our operating margin is lower primarily due to the dilutive impact of the acquisition of Velcora and lower volume leverage, partially offset by gross margin expansion as well as an overall reduction in variable expenses.
Other (income) expense - net increased to $1.6 million of expense in the first quarter of 2020 compared to $0.1 million of income during the same period in 2019, primarily due to a loss on available for sale securities and a pension settlement charge in 2020.
Interest expense of $10.9 million in the first quarter of 2020 was flat compared to the same period of 2019.
The provision for income taxes decreased to $25.5 million for the three months ended March 31, 2020 compared to $26.7 million for the same period in 2019. The effective tax rate increased to 20.0% for the first quarter of 2020 compared to 19.5% for the same period in 2019 primarily due to a decrease in the excess tax benefits related to share-based compensation.
Net income in the first quarter of 2020 of $102.0 million decreased from $110.3 million during the same period in 2019. Diluted earnings per share in the first quarter of 2020 of $1.33 decreased $0.11, or 8%, compared to the same period in 2019.
For the three months ended March 31, 2020, Fluid & Metering Technologies contributed 38% of sales, 42% of operating income and 40% of EBITDA; Health & Science Technologies contributed 38% of sales, 34% of operating income and 36% of EBITDA; and Fire & Safety/Diversified Products contributed 24% of sales, 24% of operating income and 24% of EBITDA. These percentages are calculated on the basis of total segment (not total Company) sales, operating income and EBITDA.
Fluid & Metering Technologies Segment

(In thousands) | Three Months Ended March 31,
| 2020 |  | 2019
Net sales | $ | 226,861 |  |  | $ | 242,522 |
Operating income | 66,771 |  |  | 71,866 |
Operating margin | 29.4 | % |  | 29.6 | %

Sales of $226.9 million decreased $15.7 million, or 6%, in the first quarter of 2020 compared to the same period in 2019. This reflects a 5% decrease in organic sales and a 1% unfavorable impact from foreign currency translation. In the first quarter of 2020, sales decreased 8% domestically and 5% internationally compared to the same period in 2019. Sales to customers outside the U.S. were approximately 44% and 43% of total segment sales in the first quarter s of 2020 and 2019, respectively.
Sales within our Valves platform decreased in the first quarter of 2020 compared to the same period in 2019 due to the softening global industrial landscape and lower energy prices driving decreases in capital spending. Sales within our Agriculture platform decreased in the first quarter of 2020 compared to the same period in 2019 due to decreased demand across both the agricultural and industrial original equipment manufacturer (“OEM”) markets. Sales within our Pumps platform decreased in the first quarter of 2020 compared to the same period in 2019 due to declines across most end markets and geographies due to decreases in the
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industrial and oil and gas markets. Sales within our Water platform decreased in the first quarter of 2020 compared to the same period in 2019 primarily due to lower projects across the U.S. and Asia. Sales within our Energy platform decreased slightly in the first quarter of 2020 compared to the same period in 2019 due to soft liquefied petroleum gas (“LPG”) demand and delays with Italian customers.
Operating income of $66.8 million and operating margin of 29.4% in the first quarter of 2020 were lower than $71.9 million and 29.6%, respectively, recorded during the same period in 2019, primarily due to lower volume, partially offset by price and productivity initiatives.
Health & Science Technologies Segment

(In thousands) | Three Months Ended March 31,
| 2020 |  | 2019
Net sales | $ | 224,059 |  |  | $ | 225,290 |
Operating income | 52,643 |  |  | 54,154 |
Operating margin | 23.5 | % |  | 24.0 | %

Sales of $224.1 million decreased $1.2 million, or 1%, in the first quarter of 2020 compared to the same period in 2019. This reflects a 4% decrease in organic sales and a 1% unfavorable impact from foreign currency translation, partially offset by a 4% increase from acquisitions. In the first quarter of 2020, sales decreased 3% domestically and increased 1% internationally compared to the same period in 2019. Sales to customers outside the U.S. were approximately 57% and 56% of total segment sales in the first quarter s of 2020 and 2019, respectively.
Sales within our Gast platform decreased in the first quarter of 2020 compared to the same period in 2019 primarily due to the non-repeat of a large customer project and a slowdown across various industrial end markets. Sales within our Micropump platform decreased in the first quarter of 2020 compared to the same period in 2019 due to weakness in core printing and industrial distribution. Sales within our Scientific Fluidics & Optics platform decreased in the first quarter of 2020 compared to the same period in 2019 due to a decline in Analytical Instrumentation OEM volume. Sales within our Material Processing Technologies platform increased in the first quarter of 2020 compared to the same period in 2019 primarily due to a strong backlog of pharma and food and beverage projects. Sales within our Sealing Solutions platform increased in the first quarter of 2020 compared to the same period in 2019 primarily due to the dilutive impact of the acquisition of Velcora and recovery in the semiconductor end market, partially offset by continued softness in the automotive and industrial end markets.
Operating income of $52.6 million and operating margin of 23.5% in the first quarter of 2020 were lower than $54.2 million and 24.0%, respectively, recorded during the same period in 2019, primarily due to the impact of the Velcora acquisition amortization and lower volume, partially offset by price and productivity initiatives.
Fire & Safety/Diversified Products Segment

(In thousands) | Three Months Ended March 31,
| 2020 |  | 2019
Net sales | $ | 144,324 |  |  | $ | 156,159 |
Operating income | 38,037 |  |  | 40,328 |
Operating margin | 26.4 | % |  | 25.8 | %

Sales of $144.3 million decreased $11.8 million, or 8%, in the first quarter of 2020 compared to the same period in 2019. This reflects a 7% decrease in organic sales and a 1% unfavorable impact from foreign currency translation. In the first quarter of 2020, sales were flat domestically and decreased 15% internationally compared to the same period in 2019. Sales to customers outside the U.S. were approximately 48% of total segment sales in the first quarter of 2020 compared to 52% during the same period in 2019.
Sales within our Dispensing platform decreased in the first quarter of 2020 compared to the same period in 2019 primarily due to lower volume in Europe and customer shutdowns across Asia. Sales within our Band-It platform decreased in the first quarter of 2020 compared to the same period in 2019 due to softness in the transportation and energy markets. Sales within our Fire & Safety platform decreased in the first quarter of 2020 compared to the same period in 2019 due to lower large project tenders globally for the Rescue business.
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Operating income of $38.0 million in the first quarter of 2020 was lower than $40.3 million during the same period in 2019 and operating margin of 26.4% in the first quarter of 2020 was higher than the 25.8% during the same period in 2019. Operating income decreased compared to the prior period as a result of reduced volume. The increase in operating margin was primarily due to business mix, price and productivity initiatives, partially offset by reduced volume.
Liquidity and Capital Resources
Operating Activities
Cash flows from operating activities for the first three months of 2020 decreased $3.9 million, or 4%, to $84.8 million compared to the first three months of 2019 due to lower earnings, partially offset by a favorable change in accrued expenses. At March 31, 2020, working capital was $922.2 million and the Company’s current ratio was 3.5 to 1. At March 31, 2020, the Company’s cash and cash equivalents totaled $569.2 million, of which $362.9 million was held outside of the United States. The COVID-19 pandemic may impact the Company’s future operating cash flows through direct and secondary effects on the Company’s operations, customers and supply chain. Temporary disruptions due to operational shutdowns may impact the Company’s ability to operate as well as generate operating cash flow. Based on currently available information and management’s current expectations, the Company anticipates that it has sufficient cash on hand and sufficient access to capital to continue to fund operations for a significant period of time. However, COVID-19 and related measures to contain its impact have caused material disruptions in both national and global financial markets and economies. The future impact of COVID-19 and the COVID-19 containment measures cannot be predicted with certainty and may increase our borrowing costs and other costs of capital and otherwise adversely affect our business, results of operations, financial condition and liquidity, and we cannot assure that we will have access to external financing at times and on terms we consider acceptable, or at all, or that we will not experience other liquidity issues going forward.
Investing Activities
Cash flows used in investing activities for the first three months of 2020 increased $121.3 million to $133.7 million compared to the same period in 2019 primarily due to $120.8 million spent on the acquisition of Flow MD in 2020.
Cash flows from operations were more than adequate to fund capital expenditures of $12.8 million and $12.9 million in the first three months of 2020 and 2019, respectively. The COVID-19 pandemic may impact the Company’s future operating cash flows, which may lead to a reduction in capital expenditures. The Company believes it has sufficient operating cash flow to meet current obligations and invest in required currently planned capital expenditures. Capital expenditures were generally for machinery and equipment that supported growth, improved productivity, tooling, business system technology, replacement of equipment and investments in new facilities. Management believes that the Company has ample capacity in its plants and equipment to meet demand increases for future growth in the intermediate term.
Financing Activities
Cash flows used in financing activities for the first three months of 2020 were $7.8 million compared to $87.0 million during the same period in 2019, primarily as a result of borrowings under the Revolving Facility, partially offset by higher share repurchases and dividends paid in 2020.
On June 13, 2016, the Company completed a private placement of a $100 million aggregate principal amount of 3.20% Senior Notes due June 13, 2023 and a $100 million aggregate principal amount of 3.37% Senior Notes due June 13, 2025 (collectively, the “Notes”) pursuant to a Note Purchase Agreement, dated June 13, 2016 (the “Purchase Agreement”). Each series of Notes bears interest at the stated amount per annum, which is payable semi-annually in arrears on each June 13 th and December 13 th. The Notes are unsecured obligations of the Company and rank pari passu in right of payment with all of the Company’s other unsecured, unsubordinated debt. The Company may at any time prepay all, or any portion of the Notes; provided that such portion is greater than 5% of the aggregate principal amount of the Notes then outstanding. In the event of a prepayment, the Company will pay an amount equal to par plus accrued interest plus a make-whole amount. In addition, the Company may repurchase the Notes by making an offer to all holders of the Notes, subject to certain conditions.
On May 31, 2019, the Company entered into a credit agreement (the “Credit Agreement”) along with certain of its subsidiaries, as borrowers (the “Borrowers”), Bank of America, N.A., as administrative agent, swing line lender and an issuer of letters of credit, with other agents party thereto. The Credit Agreement consists of a revolving credit facility (the “Revolving Facility”), which is an $800.0 million unsecured, multi-currency bank credit facility maturing on May 31, 2024. The Credit Agreement replaced the Company’s prior five-year, $700 million credit agreement, dated as of June 23, 2015, which was due to expire in June 2020. At
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March 31, 2020, there was $150.0 million outstanding under the Revolving Facility and $7.8 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility of $642.2 million.
Borrowings under the Revolving Facility bear interest, at either an alternate base rate or adjusted LIBOR plus, in each case, an applicable margin. Such applicable margin is based on the lower 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%. Based on the Company’s leverage ratio at March 31, 2020, the applicable margin was 0.90% resulting in a weighted average interest rate of 1.82% at March 31, 2020. Interest is payable (a) in the case of base rate loans, quarterly, and (b) in the case of LIBOR 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 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.
There are two key financial covenants that the Company is required to maintain in connection with the Revolving Facility and the Notes, a minimum interest coverage ratio of 3.00 to 1 and a maximum leverage ratio of 3.50 to 1. In the case of the leverage ratio, there is an option to increase the ratio to 4.00 for 12 months in connection with certain acquisitions. At March 31, 2020, the Company was in compliance with both of these financial covenants, as the Company’s interest coverage ratio was 16.20 to 1 and the leverage ratio was 1.44 to 1. There are no financial covenants relating to the 4.5% Senior Notes or 4.2% Senior Notes; however, both are subject to cross-default provisions.
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 and $400.0 million on November 6, 2014. Repurchases under the program will be funded with future cash flow generation or borrowings available under the Revolving Facility. During the three months ended March 31, 2020, the Company repurchased a total of 867 thousand shares at a cost of $108.9 million. During the three months ended March 31, 2019, the Company repurchased a total of 370 thousand shares at a cost of $51.7 million, of which $0.9 million was settled in April 2019. As of March 31, 2020, the amount of share repurchase authorization remaining is $713.4 million.
Although the COVID-19 pandemic may impact the Company’s future operating cash flows, based on management’s current expectations and currently available information, the Company believes current cash, cash from operations and cash available under the Revolving Facility will be sufficient to meet its operating cash requirements, planned capital expenditures, interest and principal payments on all borrowings, pension and postretirement funding requirements and annual dividend payments to holders of the Company’s common stock for the remainder of 2020. Additionally, in the event that suitable businesses are available for acquisition upon acceptable terms, the Company may obtain all or a portion of the financing for these acquisitions through the incurrence of additional borrowings. The Company may also consider accelerating the funding of debt which matures later in the year subject to market conditions. At March 31, 2020, there was $150.0 million outstanding under the Revolving Facility and $7.8 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility of $642.2 million. The Company believes that additional borrowings through various financing alternatives remain available if required. However, COVID-19 and related measures to contain its impact have caused material disruptions in both national and global financial markets and economies. The future impact of COVID-19 and the COVID-19 containment measures cannot be predicted with certainty and may increase our borrowing costs and other costs of capital and otherwise adversely affect our business, results of operations, financial condition and liquidity, and we cannot assure that we will have access to external financing at times and on terms we consider acceptable, or at all, or that we will not experience other liquidity issues going forward.
Non-GAAP Disclosures
Set forth below are reconciliations of EBITDA to the comparable measure of net income, as determined in accordance with U.S. GAAP. We have reconciled consolidated EBITDA and segment EBITDA to net income. The reconciliation of segment EBITDA to net income was performed on a consolidated basis due to the fact that we do not allocate consolidated interest expense or the consolidated provision for income taxes to our segments.
EBITDA means earnings before interest, income taxes, depreciation and amortization. Given the acquisitive nature of the Company, which results in a higher level of amortization expense from recently acquired businesses, management uses EBITDA as an internal operating metric to provide another representation of the businesses’ performance across our three segments and for enterprise valuation purposes. Management believes that EBITDA is useful to investors as an indicator of the strength and performance of the Company and a way to evaluate and compare operating performance and value companies within our industry.
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Management believes that EBITDA margin is useful for the same reason as EBITDA. EBITDA is also used to calculate certain financial covenants, as discussed in Note 10 in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, “Financial Statements.”
This report references organic sales, a non-GAAP measure, that refers to sales from continuing operations calculated according to U.S. GAAP but excludes (1) the impact of foreign currency translation and (2) sales from acquired or divested businesses during the first twelve months of ownership or divestiture. The portion of sales attributable to foreign currency translation is calculated as the difference between (a) the period-to-period change in organic sales and (b) the period-to-period change in organic sales after applying prior period foreign exchange rates to the current year period. Management believes that reporting organic sales provides useful information to investors by helping identify underlying growth trends in our business and facilitating easier comparisons of our revenue performance with prior and future periods and to our peers. The Company excludes the effect of foreign currency translation from organic sales because foreign currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. The Company excludes the effect of acquisitions and divestitures because they can obscure underlying business trends and make comparisons of long term performance difficult due to the varying nature, size and number of transactions from period to period and between the Company and its peers.
In addition to measuring our cash flow generation and usage based upon the operating, investing and financing classifications included in the Condensed Consolidated Statements of Cash Flows, we also measure free cash flow (a non-GAAP measure) which represents net cash provided by operating activities minus capital expenditures. We believe that free cash flow is an important measure of operating performance because it provides management a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.
The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures prepared in accordance with U.S. GAAP. The financial results prepared in accordance with U.S. GAAP and the reconciliations from these results should be carefully evaluated.

1. Reconciliations of the Change in Net Sales to Organic Net Sales |  |  |  |  |  |  |
| Three Months Ended March 31, 2020
| FMT |  | HST |  | FSDP |  | IDEX
Change in net sales | (6 | )% |  | (1 | )% |  | (8 | )% |  | (4 | )%
- Impact from acquisitions/divestitures | — | % |  | 4 | % |  | — | % |  | 2 | %
- Impact from foreign currency | (1 | )% |  | (1 | )% |  | (1 | )% |  | (1 | )%
Change in organic net sales | (5 | )% |  | (4 | )% |  | (7 | )% |  | (5 | )%

2. Reconciliations of EBITDA to Net Income |  |  |  |  |  |  |  |  |

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| Three Months Ended March 31, 2020
| FMT |  | HST |  | FSDP |  | Corporate |  | IDEX
Operating income (loss) | $ | 66,771 |  |  | $ | 52,643 |  |  | $ | 38,037 |  |  | $ | (17,510 | ) |  | $ | 139,941 |
- Other (income) expense - net | 766 |  |  | (531 | ) |  | (315 | ) |  | 1,645 |  |  | 1,565 |
+ Depreciation and amortization | 5,398 |  |  | 10,659 |  |  | 3,759 |  |  | 181 |  |  | 19,997 |
EBITDA | 71,403 |  |  | 63,833 |  |  | 42,111 |  |  | (18,974 | ) |  | 158,373 |
- Interest expense |  |  |  |  |  |  |  |  | 10,877 |
- Provision for income taxes |  |  |  |  |  |  |  |  | 25,501 |
- Depreciation and amortization |  |  |  |  |  |  |  |  | 19,997 |
Net income |  |  |  |  |  |  |  |  | $ | 101,998 |
Net sales (eliminations) | $ | 226,861 |  |  | $ | 224,059 |  |  | $ | 144,324 |  |  | $ | (782 | ) |  | $ | 594,462 |
Operating margin | 29.4 | % |  | 23.5 | % |  | 26.4 | % |  | n/m |  |  | 23.5 | %
EBITDA margin | 31.5 | % |  | 28.5 | % |  | 29.2 | % |  | n/m |  |  | 26.6 | %

| Three Months Ended March 31, 2019
| FMT |  | HST |  | FSDP |  | Corporate |  | IDEX
Operating income (loss) | $ | 71,866 |  |  | $ | 54,154 |  |  | $ | 40,328 |  |  | $ | (18,566 | ) |  | $ | 147,782 |
- Other (income) expense - net | 78 |  |  | 284 |  |  | 505 |  |  | (1,007 | ) |  | (140 | )
+ Depreciation and amortization | 5,506 |  |  | 9,507 |  |  | 3,462 |  |  | 184 |  |  | 18,659 |
EBITDA | 77,294 |  |  | 63,377 |  |  | 43,285 |  |  | (17,375 | ) |  | 166,581 |
- Interest expense |  |  |  |  |  |  |  |  | 10,921 |
- Provision for income taxes |  |  |  |  |  |  |  |  | 26,733 |
- Depreciation and amortization |  |  |  |  |  |  |  |  | 18,659 |
Net income |  |  |  |  |  |  |  |  | $ | 110,268 |
Net sales (eliminations) | $ | 242,522 |  |  | $ | 225,290 |  |  | $ | 156,159 |  |  | $ | (1,740 | ) |  | $ | 622,231 |
Operating margin | 29.6 | % |  | 24.0 | % |  | 25.8 | % |  | n/m |  |  | 23.8 | %
EBITDA margin | 31.9 | % |  | 28.1 | % |  | 27.7 | % |  | n/m |  |  | 26.8 | %

3. Reconciliations of Cash Flows from Operating Activities to Free Cash Flow |  |
| Three Months Ended
(dollars in thousands) | March 31, | December 31,
| 2020 |  | 2019 |  | 2019
Cash flows from operating activities | $ | 84,760 |  |  | $ | 88,663 |  |  | $ | 151,160 |
- Capital expenditures | 12,762 |  |  | 12,875 |  |  | 14,139 |
Free cash flow | $ | 71,998 |  |  | $ | 75,788 |  |  | $ | 137,021 |

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Critical Accounting Policies
As discussed in the Annual Report on Form 10-K for the year ended December 31, 2019, the preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amount 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. See Part 1, Notes to the Condensed Consolidated Financial Statements, Note 1 Basis of Presentation and Significant Accounting Policies. There have been no changes to the Company’s critical accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2019.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is subject to market risk associated with changes in foreign currency exchange rates and interest rates. The Company may, from time to time, enter into foreign currency forward contracts and interest rate swaps on its debt when it believes there is a financial advantage in doing so. A treasury risk management policy, adopted by the Board of Directors, describes the procedures and controls over derivative financial and commodity instruments, including foreign currency forward contracts and interest rate swaps. Under the policy, the Company does not use financial or commodity derivative instruments for trading purposes, and the use of these instruments is subject to strict approvals by senior officers. Typically, the use of derivative instruments is limited to foreign currency forward contracts and interest rate swaps on the Company’s outstanding long-term debt. As of March 31, 2020, the Company did not have any derivative instruments outstanding.
Foreign Currency Exchange Rates
The Company’s foreign currency exchange rate risk is limited principally to the Euro, Swiss Franc, British Pound, Canadian Dollar, Indian Rupee, Chinese Renminbi and Swedish Krona. The Company manages its foreign exchange risk principally through invoicing customers in the same currency as the source of products. The effect of transaction gains and losses is reported within Other (income) expense-net in the Condensed Consolidated Statements of Operations.
Interest Rate Fluctuation
The Company’s interest rate exposure is primarily related to the $999.3 million of total debt outstanding at March 31, 2020. Approximately 15% of the debt, representing the amount drawn on the Revolving Facility at March 31, 2020, is priced at interest rates that float with the market. A 50 basis point movement in the interest rate on the floating rate debt would result in an approximate $0.8 million annualized increase or decrease in interest expense and cash flows. The remaining debt is fixed rate debt.
Item 4. Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As required by SEC Rule 13a-15(b), the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded, as of March 31, 2020, that the Company’s disclosure controls and procedures were effective.
There has been no change in the Company’s internal controls over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company and its subsidiaries are party to legal proceedings as described in Note 19 in Part I, Item 1, “Legal Proceedings,” and such disclosure is incorporated by reference into this Item 1, “Legal Proceedings.” In addition, the Company and six of its subsidiaries are presently named as defendants in a number of lawsuits claiming various asbestos-related personal injuries, allegedly as a result of exposure to products manufactured with components that contained asbestos. These components were acquired from third party suppliers and were not manufactured by the Company or any of the defendant subsidiaries. To date, the majority of the Company’s settlements and legal costs, except for costs of coordination, administration, insurance investigation and a portion of defense costs, have been covered in full by insurance, subject to applicable deductibles. However, the Company cannot predict whether and to what extent insurance will be available to continue to cover these settlements and legal costs, or how insurers may respond to claims that are tendered to them. Claims have been filed in jurisdictions throughout the United States and the United Kingdom. Most of the claims resolved to date have been dismissed without payment. The balance of the claims have been settled for various immaterial amounts. Only one case has been tried, resulting in a verdict for the Company’s business unit. No provision has been made in the financial statements of the Company, other than for insurance deductibles in the ordinary course, and the Company does not currently believe the asbestos-related claims will have a material adverse effect on the Company’s business, financial position, results of operations or cash flows.
Item 1A. Risk Factors
In light of current global economic events and conditions experienced during the quarter ended March 31, 2020, the following factors are present risks to the Company. Aside from these risk factors, there have been no changes to the Company’s risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2019 that have a material impact on our condensed consolidated financial statement.
Our business, results of operations and financial condition may be materially adversely impacted by the recent coronavirus (COVID-19) outbreak.
The recent outbreak of the novel coronavirus (COVID-19) is a rapidly developing situation around the globe that has negatively impacted and could continue to negatively impact the global economy. Our operating results will be subject to fluctuations based on general economic conditions and the extent to which COVID-19 may ultimately impact our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease and the duration of the outbreak and business closures or business disruptions for our Company, our suppliers and our customers.
Deterioration in economic conditions could materially reduce the Company’s sales and profitability. Any bankruptcy or financial distress of our customers due to deterioration in economic conditions could result in reduced sales and decreased collectability of accounts receivable which would negatively impact our results of operations. Based on currently available information and management’s current expectations, we believe the Company’s sales may be down 15 to 25 percent in the second quarter of 2020. The COVID-19 outbreak could also have a material impact on our ability to get the raw materials, parts and components we need to manufacture our products as our suppliers face disruptions in their businesses, closures or bankruptcy as a result of the COVID-19 outbreak. We depend greatly on our suppliers for items that are essential to the manufacturing of our products. If our suppliers fail to meet our manufacturing needs, it would delay our production and our product shipments to customers and negatively affect our operations.
U.S and international government responses to the COVID-19 outbreak have included “shelter in place”, “stay at home” and similar types of orders. These orders exempt certain individuals needed to maintain continuity of operations of critical infrastructure sectors as determined by the federal government. Although the Company’s operations are currently considered essential and exempt, the government lockdown mandates as well as deteriorating business conditions have forced us to temporarily close some facilities, although these facilities have since reopened. If any of the applicable exemptions are curtailed or revoked in the future, that would adversely impact our business, operating results and financial condition. Furthermore, to the extent these exemptions do not extend to our key suppliers and customers, this would also adversely impact our business, operating results and financial condition. We have also implemented work-from-home policies for certain “non-essential” employees, which could negatively impact productivity, disrupt conduct of our business in the ordinary course and delay our production timelines.
Due to the large remote workforce populations, we may also face informational technology infrastructure and connectivity issues from the vendors that we rely on for certain information technologies to administer, store and support the Company’s multiple business activities. IDEX is heavily dependent on the availability and support of our technology landscape, several of
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which are provided by external third party service providers (e.g., Microsoft, AT&T and Verizon). Disruptions in their operations could also negatively impact our business, operating results and financial condition.
To the extent the COVID-19 outbreak adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in the risk factors included in the Annual Report on Form 10-K for the year ended December 31, 2019, such as those relating to our international operations, our ability to develop new products, our ability to execute on our growth strategy of acquisitions, our dependency on raw materials, parts and components, the effects on movements in foreign currency exchange rates on our company, the effects on our company that result from declines in commodity prices and our reliance on labor availability to operate and grow our business.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information about the Company’s purchases of its common stock during the quarter ended March 31, 2020:

Period | Total Number of Shares Purchased |  | Average Price Paid per Share |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) |  | Approximate Dollar Value that May Yet be Purchased Under the Plans or Programs(1)
January 1, 2020 to January 31, 2020 | — |  |  | $ | — |  |  | — |  |  | $ | 322,342,564 |
February 1, 2020 to February 29, 2020 | 15,000 |  |  | 150.47 |  |  | 15,000 |  |  | 320,085,450 |
March 1, 2020 to March 31, 2020 | 851,823 |  |  | 125.20 |  |  | 851,823 |  |  | 713,435,602 |
Total | 866,823 |  |  | $ | 125.64 |  |  | 866,823 |  |  | $ | 713,435,602 |

(1) | 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 and $400.0 million on November 6, 2014. These authorizations have no expiration date.

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Item 6. Exhibits.

Exhibit Number |  | Description
*31.1 |  | Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes Oxley Act of 2002
*31.2 |  | Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes Oxley Act of 2002
*32.1 |  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350
*32.2 |  | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
*101 |  | The following financial information from IDEX Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 formatted in Inline eXtensible Business Reporting Language (iXBRL) includes: (i) the Cover Page, (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Operations, (iv) the Condensed Consolidated Statements of Comprehensive Income, (v) the Condensed Consolidated Statements of Shareholders’ Equity, (vi) the Condensed Consolidated Statements of Cash Flows, and (vii) Notes to the Condensed Consolidated Financial Statements.
*104 |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* Filed herewith

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| IDEX Corporation
| By: | /s/ WILLIAM K. GROGAN
|  | William K. Grogan
|  | Senior Vice President and Chief Financial Officer (Principal Financial Officer)
| By: | /s/ MICHAEL J. YATES
|  | Michael J. Yates
|  | Vice President and Chief Accounting Officer (Principal Accounting Officer)

Date: April 24, 2020
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