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What changed in Ametek's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Ametek's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+135 added−146 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-22)

Top changes in Ametek's 2024 10-K

135 paragraphs added · 146 removed · 118 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

36 edited+3 added−5 removed54 unchanged
Biggest changeIn 2023, the Company achieved record sales of $6,597.0 million, an increase of 7.3% from 2022 due to a 4% organic sales increase and a 3% increase from acquisitions. Diluted earnings per share for 2023 were a record $5.67, an increase of $0.66 or 13.2%, compared with $5.01 per diluted share in 2022.
Biggest changeDiluted earnings per share for 2024 were a record $5.93, an increase of $0.26 or 4.5%, compared with $5.67 per diluted share in 2023. Recent Acquisitions AMETEK spent $117.5 million in cash in October 2024, net of cash acquired, to purchase Virtek Vision International ("Virtek"), a leading provider of advanced laser-based projection and inspection systems.
Operational Excellence initiatives have yielded lower operating and administrative costs, shortened manufacturing cycle times, resulted in higher cash flow from operations and increased customer satisfaction. They also have played a key role in achieving synergies from newly acquired companies. Strategic Acquisitions . Acquisitions are a key to achieving the goals of the AMETEK Growth Model.
Operational Excellence initiatives have yielded lower operating and administrative costs, shortened manufacturing cycle times, resulted in higher cash flow from operations and increased customer satisfaction. They also have played a key role in achieving synergies with newly acquired companies. Strategic Acquisitions . Acquisitions are a key to achieving the goals of the AMETEK Growth Model.
As a result, AMETEK has maintained a consistent investment in new product development and engineering. AMETEK's businesses help solve our customers' most complex challenges with differentiated technology solutions. In 2023, AMETEK added to its highly differentiated product portfolio with a range of new products across many of its businesses. AMETEK focuses on cash generation and capital deployment.
As a result, AMETEK has maintained a consistent investment in new product development and engineering. AMETEK's businesses help solve our customers' most complex challenges with differentiated technology solutions. In 2024, AMETEK added to its highly differentiated product portfolio with a range of new products across many of its businesses. AMETEK focuses on cash generation and capital deployment.
Additionally, we strive to protect health and safety in every aspect of our enterprise – from the way we design, manufacture and deliver our products to the way our customers use them. We continue to drive towards our goal of zero lost-time work incidents. In 2023, we achieved a lost-time incident rate that was significantly below the industry average.
Additionally, we strive to protect health and safety in every aspect of our enterprise – from the way we design, manufacture and deliver our products to the way our customers use them. We continue to drive towards our goal of zero lost-time work incidents. In 2024, we achieved a lost-time incident rate that was significantly below the industry average.
AMETEK has historically experienced growth outside the United States, reflecting an expanding international customer base, investments in its global infrastructure and the attractive growth potential of its businesses in overseas markets. While Europe remains its largest overseas market, AMETEK has pursued growth opportunities worldwide, especially in key emerging markets.
AMETEK has experienced significant growth outside the United States, reflecting an expanding international customer base, investments in its global infrastructure and the attractive growth potential of its businesses in overseas markets. While Europe remains its largest overseas market, AMETEK has pursued growth opportunities worldwide, especially in key emerging markets.
Customers EIG is not dependent on any single customer such that the loss of that customer would have a material adverse effect on EIG’s operations. Approximately 6% of EIG’s 2023 net sales were made to its five largest customers. No single customer comprises more than 2% of net sales.
Customers EIG is not dependent on any single customer such that the loss of that customer would have a material adverse effect on EIG’s operations. Approximately 6% of EIG’s 2024 net sales were made to its five largest customers. No single customer comprises more than 2% of net sales.
Experienced Management Team . Another component of AMETEK’s success is the strength of its management team and that team’s commitment to improving Company performance. AMETEK senior management has extensive industry experience and an average of approximately 25 years of AMETEK service.
Experienced Management Team . Another component of AMETEK’s success is the strength of its management team and that team’s commitment to improving Company performance. AMETEK senior management has extensive industry experience and an average of approximately 23 years of AMETEK service.
Business Strategy AMETEK is committed to achieving earnings growth through the successful implementation of the AMETEK Growth Model. The goal of that model is double-digit annual percentage growth in sales and earnings per share over the business cycle, strong cash flow generation, and a superior return on total capital.
Business Strategy AMETEK is committed to achieving earnings growth through the successful implementation of the AMETEK Growth Model. The goal of the Growth Model is high single digit annual percentage growth in sales and double digit annual percentage growth in earnings per share over the business cycle, strong cash flow generation, and a superior return on total capital.
Paragon's product portfolio includes single-use and consumable surgical instruments and implantable components sold to a diverse blue-chip customer base of leading medical device manufacturers. Paragon expands the Company's presence in the MedTech space and provides access to new market segments with strong growth rates. Aerospace Markets and Products Aerospace sales represented 30% of EMG’s 2023 net sales.
Paragon's product portfolio includes single-use and consumable surgical instruments and implantable components sold to a diverse blue-chip customer base of leading medical device manufacturers. Paragon expands the Company's presence in the MedTech space and provides access to new market segments with strong growth rates. Aerospace Markets and Products Aerospace sales represented 27% of EMG’s 2024 net sales.
In its effort to achieve best-cost manufacturing, AMETEK had operating facilities, as of December 31, 2023, in China, Czechia, Malaysia, Mexico, and Serbia. These facilities offer proximity to customers and provide opportunities for increasing international sales. Acquisitions also have allowed AMETEK to achieve operating synergies by consolidating operations, product lines and distribution channels, benefiting both of AMETEK’s operating groups.
In its effort to achieve best-cost manufacturing, AMETEK has operating facilities, as of December 31, 2024, in China, Czechia, Malaysia, Mexico, and Serbia. These facilities offer proximity to customers and provide opportunities for increasing international sales. Acquisitions also have allowed AMETEK to achieve operating synergies by consolidating operations, product lines and distribution channels, benefiting both of AMETEK’s operating groups.
Our compensation programs are designed to provide competitive salaries and benefit programs to attract, retain and motivate a world-class workforce. Selected employees participate in short- and long-term incentive programs that align employee and shareholder interests and promote long-term retention.
Our compensation programs are designed to provide competitive salaries and benefit programs to attract, retain and motivate a world-class 9 Table of Contents workforce. Selected employees participate in short and long-term incentive programs that align employee and shareholder interests and promote long-term retention.
It also looks for businesses that provide attractive growth opportunities aligned with strong secular growth themes, often in new and emerging markets. Through these and prior acquisitions, AMETEK’s management team has developed considerable skill in identifying, acquiring and integrating new businesses.
It also looks for businesses that provide attractive growth opportunities aligned with strong secular growth themes, often in new and emerging markets. AMETEK’s management team has developed considerable skill in identifying, acquiring and integrating new businesses.
Federal Employment Information Report (EEO-1) for 2022 is available at www.ametek.com.
Federal Employment Information Report (EEO-1) for 2023 is available at www.ametek.com.
Customers EMG is not dependent on any single customer such that the loss of that customer would have a material adverse effect on EMG’s operations. Approximately 8% of EMG’s 2023 net sales were made to its five largest customers. No single customer comprises greater than 2% of net sales.
Customers EMG is not dependent on any single customer such that the loss of that customer would have a material adverse effect on EMG’s operations. Approximately 14% of EMG’s 2024 net sales were made to its five largest customers. No single customer comprises greater than 4% of net sales.
EIG is a leader in many of the specialized markets it serves. Products supplied to these markets include process control instruments for the life sciences, pharmaceutical, semiconductor, automation, power, food and beverage, oil and gas, and petrochemical industries. It provides a growing range of instruments to the research and laboratory equipment, ultra-precision manufacturing, optics, medical, and test and measurement markets.
Products supplied to these markets include process control instruments for the life sciences, pharmaceutical, semiconductor, automation, power, food and beverage, oil and gas, and petrochemical industries. It provides a growing range of instruments to the research and laboratory equipment, ultra-precision manufacturing, optics, medical, and test and measurement markets.
Since the beginning of 2019 through December 31, 2023, AMETEK has completed 15 acquisitions with annualized sales totaling approximately $1.6 billion. AMETEK targets companies that offer a compelling strategic, technical and cultural fit. It seeks to acquire businesses in adjacent markets with complementary products and technologies.
Since the beginning of 2020 through December 31, 2024, AMETEK has completed 14 acquisitions with annualized sales totaling approximately $1.4 billion. AMETEK targets companies that offer a compelling strategic, technical and cultural fit. It seeks to acquire businesses in adjacent markets with complementary products and technologies.
AMETEK maintains significant market share in a number of targeted niche markets through its ability to produce and deliver high-quality, differentiated products at competitive prices. EIG has significant market positions in niche segments of the process, power and industrial, and aerospace markets. EMG holds significant positions in niche segments of the aerospace and defense, automation and medical markets.
Those advantages include: Significant Market Share . AMETEK maintains significant market share in a number of targeted niche markets through its ability to produce and deliver high-quality, differentiated products at competitive prices. EIG has significant market positions in niche segments of the process, power and industrial, and aerospace markets.
In 2023, 45% of EMG’s net sales were to customers outside the United States. At December 31, 2023, EMG employed approximately 10,000 people, of whom approximately 2,100 were covered by collective bargaining agreements. At December 31, 2023, EMG had operating facilities in the United States, the United Kingdom, China, Germany, France, Italy, Poland, Mexico, Serbia, Czechia, Malaysia, and Taiwan.
In 2024, 41% of EMG’s net sales were to customers outside the United States. At December 31, 2024, EMG employed approximately 9,500 people, of whom approximately 2,300 were covered by collective bargaining agreements. At December 31, 2024, EMG had operating facilities in the United States, the United Kingdom, China, Germany, France, Italy, Poland, Mexico, Serbia, Czechia, Malaysia, and Taiwan.
It has grown sales in Latin America and Asia by strategically building, acquiring and expanding manufacturing facilities. AMETEK also has expanded its sales, service, and engineering capabilities globally. Recently acquired businesses have further added to AMETEK’s international presence. New Product Development . New products are essential to AMETEK’s long-term growth.
It has grown sales in Latin America and Asia by driving its global and market expansion strategy and initiatives. AMETEK also has expanded its sales, service, and engineering capabilities globally. Recently acquired businesses have further added to AMETEK’s international presence. New Product Development . New products are essential to AMETEK’s long-term growth.
Technological and Development Capabilities . AMETEK believes it has certain technological advantages over its competitors that allow it to maintain its leading market positions. Historically, the Company has demonstrated an ability to develop innovative new products and solutions that support customer needs.
EMG holds significant positions in niche segments of the aerospace and defense, automation and medical markets. Technological and Development Capabilities . AMETEK believes it has certain technological advantages over its competitors that allow it to maintain its leading market positions. Historically, the Company has demonstrated an ability to develop innovative new products and solutions that support customer needs.
Acquired in August 2023, UEI is a designer and manufacturer of high-performance test, measurement, simulation and control solutions. UEI's innovative solutions complement the Company's existing testing and data acquisition expertise.
Amplifier Research's diverse product portfolio complements the Company's existing capabilities in the electromagnetic compatibility testing market. Acquired in August 2023, UEI is a designer and manufacturer of high-performance test, measurement, simulation and control solutions. UEI's innovative solutions complement the Company's existing testing and data acquisition expertise.
The Company achieved these results from organic sales growth, contributions from recent acquisitions, as well as the Company's Operational Excellence initiatives. See "Results of Operations" in Part II, Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations for further details.
The Company achieved these results from contributions from recent acquisitions, as well as the Company's Operational Excellence initiatives. See "Results of Operations" in Part II, Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations for further details. In 2024, the Company achieved record sales of $6,941.2 million, an increase of 5.2% from 2023.
AMETEK is also committed to paying a consistently increasing cash dividend. 3 Table of Contents Attracting, retaining, and developing talent is critical to the success and sustainability of the AMETEK Growth Model as our employees are responsible for successfully driving these strategies. 2023 Overview Operating Performance In 2023, the Company posted record sales, operating income, operating margins, net income, diluted earnings per share, orders, backlog, and operating cash flow.
Attracting, retaining, and developing talent is critical to the success and sustainability of the AMETEK Growth Model as our employees are responsible for successfully driving these strategies. 2024 Overview Operating Performance In 2024, the Company posted record sales, operating income, net income, diluted earnings per share, and operating cash flow.
Description of Business Described below are the products and markets of each reportable segment: EIG EIG is a leader in the design and manufacture of advanced analytical, test and measurement instruments for the process, aerospace, medical, research, power and industrial markets. Its growth is based on the strategies outlined in the AMETEK Growth Model.
Description of Business Described below are the products and markets of each reportable segment: EIG EIG is a leader in the design and manufacture of advanced analytical, test and measurement instruments for the process, aerospace, medical, research, power and industrial markets. EIG is a leader in many of the specialized markets it serves.
The Foundation’s mission is to empower AMETEK colleagues making a positive impact in their local communities, with a focus on health and welfare, civic and social service programs, and education. 9 Table of Contents As of December 31, 2023, we have approximately 21,500 employees.
Giving back to our community is an important part of our culture. Established in 1960, the AMETEK Foundation’s mission is to empower AMETEK colleagues making a positive impact in their local communities, with a focus on health and welfare, civic and social service programs, and education. As of December 31, 2024, we have approximately 21,500 employees.
Products and Services AMETEK’s products are marketed and sold worldwide through two operating groups: Electronic Instruments (“EIG”) and Electromechanical (“EMG”). Electronic Instruments is a leader in the design and manufacture of advanced instruments for the process, power and industrial, and aerospace markets. Electromechanical is a differentiated supplier of precision motion control solutions, thermal management systems, specialty metals and electrical interconnects.
Products and Services AMETEK’s products are marketed and sold worldwide through two operating groups: Electronic Instruments (“EIG”) and Electromechanical (“EMG”). Electronic Instruments is a leader in the design and manufacture of advanced instruments for the process, power and industrial, and aerospace markets.
AMETEK generates strong cash flow given its asset-light business model and strong operational execution. This cash flow supports AMETEK’s capital deployment strategy with its primary focus on strategic, value-enhancing acquisitions.
AMETEK generates strong cash flow given its asset-light business model and strong operational execution. This cash flow supports AMETEK’s capital 3 Table of Contents deployment strategy with its primary focus on strategic, value-enhancing acquisitions. AMETEK is also committed to paying a consistently increasing cash dividend.
Automation and Engineered Solutions Markets and Products Automation and Engineered Solution sales represented 70% of EMG’s 2023 net sales. These businesses produce precision motion control solutions, brushless motors, blowers and pumps, heat exchangers and other electromechanical systems.
EMG also shares operating facilities with EIG in China, Serbia, and Mexico. Automation and Engineered Solutions Markets and Products Automation and Engineered Solution sales represented 73% of EMG’s 2024 net sales. These businesses produce precision motion control solutions, brushless motors, blowers and pumps, heat exchangers and other electromechanical systems.
AMETEK operates in highly specialized aerospace market segments in which it has proven technological or manufacturing advantages versus its competition. Among its more significant competitive advantages is its 70-year-plus reputation as an established aerospace supplier. AMETEK has long-standing relationships with the world’s leading commercial and military aircraft, jet engine and original equipment manufacturers and aerospace system integrators.
AMETEK operates in highly specialized aerospace market segments in which it has proven technological or manufacturing advantages versus its competition. Among its more significant competitive advantages is its 70-year-plus reputation as an established aerospace supplier.
Its instruments are used for precision measurement in a number of applications, including radiation detection, trace element and materials analysis, nanotechnology research, ultraprecise manufacturing, advanced optical metrology, and test and measurement. Acquired in September 2022, Navitar is a designer and manufacturer of customized, fully integrated optical imaging systems, components, and software.
Its instruments are used for precision measurement in a number of applications, including radiation detection, trace element and materials analysis, nanotechnology research, ultraprecise manufacturing, advanced optical metrology, and test and measurement. Acquired in October 2024, Virtek is a leading provider of advanced laser-based projection and inspection systems.
AMETEK also is a leading provider of spare part sales, repairs and overhaul services to commercial aerospace. 5 Table of Contents Acquired in October 2023, Amplifier Research is a leading provider of amplifiers and electromagnetic compatibility testing equipment. Amplifier Research's diverse product portfolio complements the Company's existing capabilities in the electromagnetic compatibility testing market.
AMETEK has long-standing relationships with the world’s 5 Table of Contents leading commercial and military aircraft, jet engine and original equipment manufacturers and aerospace system integrators. AMETEK also is a leading provider of spare part sales, repairs and overhaul services to commercial aerospace. Acquired in October 2023, Amplifier Research is a leading provider of amplifiers and electromagnetic compatibility testing equipment.
EIG supplies the aerospace industry with aircraft 4 Table of Contents and engine sensors, monitoring systems, embedded computing systems, power supplies, fuel and fluid measurement systems, and data acquisition systems. In 2023, 48% of EIG’s net sales were to customers outside the United States.
EIG supplies the aerospace industry with aircraft 4 Table of Contents and engine sensors, monitoring systems, embedded computing systems, power supplies, fuel and fluid measurement systems, and data acquisition systems. In many instances, EIG's products differ from or are technologically superior to its competitors’ products.
At December 31, 2023, EIG employed approximately 11,800 people, of whom approximately 800 were covered by collective bargaining agreements. At December 31, 2023, EIG had operating facilities in the United States, the United Kingdom, Germany, Canada, China, Denmark, Finland, France, Switzerland, Argentina, Austria, Serbia, and Mexico. EIG also shares operating facilities with EMG in China and Mexico.
At December 31, 2024, EIG had operating facilities in the United States, the United Kingdom, Germany, Canada, Denmark, Finland, France, Switzerland, Argentina, Austria, Serbia, and Mexico. EIG also shares operating facilities with EMG in China, Serbia, and Mexico. Process and Analytical Instrumentation Markets and Products Process and analytical instrumentation sales represented 69% of EIG’s 2024 net sales.
Its end markets include aerospace and defense, medical, automation and other industrial markets. Competitive Strengths Management believes AMETEK has significant competitive advantages that help strengthen and sustain its market positions. Those advantages include: Significant Market Share .
Electromechanical is a differentiated supplier of precision motion control solutions, highly engineered medical components and devices, thermal management systems, specialty metals and electrical interconnects. Its end markets include aerospace and defense, medical, automation and other industrial markets. Competitive Strengths Management believes AMETEK has significant competitive advantages that help strengthen and sustain its market positions.
Navitar's market leading optical components and solutions complement the Company's existing optics portfolio. Aerospace and Power Instrumentation Markets and Products Aerospace and Power Instrumentation sales represented 29% of EIG’s 2023 net sales. These businesses produce a wide array of instrumentation, systems and sensors for applications in the aerospace, power and industrial markets.
Virtek's advanced 3D laser projectors, smart cameras, and quality control inspection systems complement the Company's existing Creaform business capabilities. Aerospace and Power Instrumentation Markets and Products Aerospace and Power Instrumentation sales represented 31% of EIG’s 2024 net sales. These businesses produce a wide array of instrumentation, systems and sensors for applications in the aerospace, power and industrial markets.
In many instances, EIG's products differ from or are technologically superior to its competitors’ products. EIG has achieved competitive advantage through continued investment in research, development and engineering to develop market-leading products and solutions that serve niche markets. EIG has also has expanded its sales and service capabilities globally to serve its customers.
EIG has achieved competitive advantage through continued investment in research, development and engineering to develop market-leading products and solutions that serve niche markets. In 2024, 51% of EIG’s net sales were to customers outside the United States. At December 31, 2024, EIG employed approximately 11,600 people, of whom approximately 900 were covered by collective bargaining agreements.
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Recent Acquisitions AMETEK spent $2,237.9 million in cash, net of cash acquired, to purchase four businesses: In March 2023, AMETEK acquired Bison Gear & Engineering Corp. ("Bison"), a designer and manufacturer of custom motion control solutions. In August 2023, AMETEK acquired United Electronic Industries ("UEI"), a designer and manufacturer of high-performance test, measurement, simulation and control solutions.
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Financing In the third quarter of 2024, the Company paid in full, at maturity, a $300 million in aggregate principal amount of 3.73% senior notes.
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In October 2023, AMETEK acquired Amplifier Research Corp. ("Amplifier Research"), a leading provider of amplifiers and electromagnetic compatibility testing equipment. In December 2023, AMETEK acquired Paragon Medical ("Paragon"), a leading provider of highly engineered medical components and instruments.
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Recently Adopted Accounting Pronouncement In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires disclosure of significant segment expenses and other segment items on an annual and interim basis under ASC 280.
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Process and Analytical Instrumentation Markets and Products Process and analytical instrumentation sales represented 71% of EIG’s 2023 net sales.
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The Company retrospectively adopted ASU 2023-07, effective December 31, 2024, and the adoption resulted in additional disclosures in the Reportable Segments footnote.
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Acquired in October 2022, RTDS is a leading provider of real-time power simulation systems used by utilities, and research and education institutions in the development and testing of the electric power grid and renewable energy applications. RTDS's solutions complement the Company's existing power instruments businesses.
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Giving back to our community is an important part of our culture. Established in 1960, the AMETEK Foundation is the charitable giving arm of AMETEK.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs of December 31, 2023, we have manufacturing operations in 20 countries outside the United States, with significant operations in Canada, China, France, Germany, Mexico, Serbia, Poland and the United Kingdom.
Biggest changeAs a result of our growth strategy, we anticipate that the percentage of sales outside the United States will increase in the future. As of December 31, 2024, we have manufacturing operations in 20 countries outside the United States, with significant operations in Canada, China, France, Germany, Mexico, Serbia, Poland and the United Kingdom.
Demand for our products and services is also sensitive to changes in 10 Table of Contents customer order patterns, which may be affected by announced price changes, changes in incentive programs, new product introductions and customer inventory levels. Any of these factors could adversely affect our growth and results of operations in any given period.
Demand for our products and services is also sensitive to changes in customer order patterns, which may be affected by announced price changes, changes in incentive programs, new 10 Table of Contents product introductions and customer inventory levels. Any of these factors could adversely affect our growth and results of operations in any given period.
Although we have been successful with our acquisition strategy in the past, our ability to successfully effectuate acquisitions will be dependent upon a number of factors, including: • Our ability to identify acceptable acquisition candidates; • The impact of increased competition for acquisitions, which may increase acquisition costs, affect our ability to consummate acquisitions on favorable terms, and result in us assuming a greater portion of the seller’s liabilities; • Successfully integrating acquired businesses, including integrating the management, technological and operational processes, procedures and controls of the acquired businesses with those of our existing operations; • Adequate financing for acquisitions being available on terms acceptable to us; • Unexpected losses of key employees, customers and suppliers of acquired businesses; • Mitigating assumed, contingent and unknown liabilities; and • Challenges in managing the increased scope, geographic diversity and complexity of our operations.
Although we have been successful with our acquisition strategy in the past, our ability to successfully effectuate acquisitions will be dependent upon a number of factors, including: • Our ability to identify acceptable acquisition candidates; • The impact of increased competition for acquisitions, which may increase acquisition costs, affect our ability to consummate acquisitions on favorable terms, and result in us assuming a greater portion of the seller’s liabilities; 14 Table of Contents • Successfully integrating acquired businesses, including integrating the management, technological and operational processes, procedures and controls of the acquired businesses with those of our existing operations; • Adequate financing for acquisitions being available on terms acceptable to us; • Unexpected losses of key employees, customers and suppliers of acquired businesses; • Mitigating assumed, contingent and unknown liabilities; and • Challenges in managing the increased scope, geographic diversity and complexity of our operations.
In addition, new laws and regulations, new classification of hazardous materials, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new clean-up requirements could require us to incur costs or become the basis for new or increased liabilities that could have a material adverse effect on our business, financial condition and results of operations.
In addition, new laws and regulations, new classification of hazardous materials, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new clean-up requirements could require us to incur costs or become the basis for new or increased liabilities that 15 Table of Contents could have a material adverse effect on our business, financial condition and results of operations.
Although we maintain cyber risk insurance, damages and claims arising from such incidents may not be covered or may exceed the amount of any insurance available. 14 Table of Contents Risks Related to Our Acquisitions Our growth strategy includes strategic acquisitions. We may not be able to consummate future acquisitions or successfully integrate recent and future acquisitions.
Although we maintain cyber risk insurance, damages and claims arising from such incidents may not be covered or may exceed the amount of any insurance available. Risks Related to Our Acquisitions Our growth strategy includes strategic acquisitions. We may not be able to consummate future acquisitions or successfully integrate recent and future acquisitions.
Upon the occurrence of an event of default under a Debt 16 Table of Contents Facility, and the expiration of any grace periods, the lenders could elect to declare all amounts outstanding under one or more of our other Debt Facilities, together with accrued interest, to be immediately due and payable.
Upon the occurrence of an event of default under a Debt Facility, and the expiration of any grace periods, the lenders could elect to declare all amounts outstanding under one or more of our other Debt Facilities, together with accrued interest, to be immediately due and payable.
We cannot predict the form any such new laws or regulations will take or the impact any of these laws and regulations will have on our business or operations. 13 Table of Contents We operate in highly competitive industries, which may adversely affect our results of operations or ability to expand our business. Our markets are highly competitive.
We cannot predict the form any such new laws or regulations will take or the impact any of these laws and regulations will have on our business or operations. We operate in highly competitive industries, which may adversely affect our results of operations or ability to expand our business. Our markets are highly competitive.
There can be no assurance that our business will not be adversely affected by increased competition in the markets in which it operates or that our products will be able to compete successfully with those of our competitors.
There can be 13 Table of Contents no assurance that our business will not be adversely affected by increased competition in the markets in which it operates or that our products will be able to compete successfully with those of our competitors.
For example, increased strength in the U.S. dollar will increase the effective price of our 11 Table of Contents products sold overseas, which may adversely affect sales or require us to lower our prices.
For example, increased strength in the U.S. dollar will increase the effective price of our products sold overseas, which may adversely affect sales or require us to lower our prices.
Any determination requiring the impairment of a significant portion of goodwill or other intangible assets would negatively affect our financial condition and results of operations. Item 1B. Unresolved Staff Comments None.
Any 16 Table of Contents determination requiring the impairment of a significant portion of goodwill or other intangible assets would negatively affect our financial condition and results of operations. Item 1B. Unresolved Staff Comments None.
In addition, our consolidated financial statements are presented in U.S. dollars, and we must translate our assets, liabilities, sales and expenses into U.S. dollars for external reporting purposes.
In addition, our consolidated financial statements are presented in U.S. dollars, and we must translate our assets, liabilities, sales and 11 Table of Contents expenses into U.S. dollars for external reporting purposes.
Our businesses, operations and facilities are subject to a number of federal, state, local and foreign environmental and occupational health and safety laws and regulations concerning, among other things, air 15 Table of Contents emissions, discharges to waters and the use, manufacturing, generation, handling, storage, transportation and disposal of hazardous substances and wastes.
Our businesses, operations and facilities are subject to a number of federal, state, local and foreign environmental and occupational health and safety laws and regulations concerning, among other things, air emissions, discharges to waters and the use, manufacturing, generation, handling, storage, transportation and disposal of hazardous substances and wastes. Environmental risks are inherent in many of our manufacturing operations.
At December 31, 2023, goodwill and other intangible assets, net of accumulated amortization, totaled $10,612.9 million or 71% of our total assets. The goodwill results from our acquisitions, representing the excess of cost over the estimated fair value of the net tangible and other identifiable intangible assets we have acquired.
At December 31, 2024, goodwill and other intangible assets, net of accumulated amortization, totaled $10,471.1 million or 72% of our total assets. The goodwill results from our acquisitions, representing the excess of cost over the estimated fair value of the net tangible and other identifiable intangible assets we have acquired.
These initiatives are often complex, and a failure to implement them properly may, in addition to not meeting projected cost savings or benefits, adversely affect our business and operations. Foreign and domestic economic, political, legal, compliance and business factors could negatively affect our international sales and operations.
These initiatives are often complex, and a failure to implement them properly may, in addition to not meeting projected cost savings or benefits, adversely affect our business and operations. Foreign and domestic economic, political, legal, compliance and business factors could negatively affect our international sales and operations. International sales for 2024 and 2023 represented 47.4% of our consolidated net sales.
Environmental risks are inherent in many of our manufacturing operations. Certain laws provide that a current or previous owner or operator of property may be liable for the costs of investigating, removing and remediating hazardous materials at such property, regardless of whether the owner or operator knew of, or was responsible for, the presence of such hazardous materials.
Certain laws provide that a current or previous owner or operator of property may be liable for the costs of investigating, removing and remediating hazardous materials at such property, regardless of whether the owner or operator knew of, or was responsible for, the presence of such hazardous materials.
Removed
International sales for 2023 and 2022 represented 47.4% and 48.7% of our consolidated net sales, respectively. As a result of our growth strategy, we anticipate that the percentage of sales outside the United States will increase in the future.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also maintain good relationships with law enforcement agencies to remain informed on potential cyber risks. 17 Table of Contents Mandatory cybersecurity training is conducted eight times a year for all of AMETEK’s employees with email access. The training provides critical information on how employees can protect themselves and AMETEK against cybersecurity risks.
Biggest changeWe also maintain good relationships with law enforcement agencies to remain informed on potential cyber risks. Mandatory cybersecurity training is conducted eight times a year for all of AMETEK’s employees with email access. The training provides critical information on how employees can protect themselves and AMETEK against cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Company believes that all facilities have been adequately maintained, are in good operating condition, and are suitable for our current needs.
Biggest changeThe Company believes that all facilities have been adequately maintained, are in good operating condition, and are suitable for our current needs. 17 Table of Contents
Item 2. Properties At December 31, 2023, the Company conducted business from office and operating facilities at owned and leased locations throughout the United States and select global markets. The Company leases a facility in Berwyn, Pennsylvania for its corporate headquarters.
Item 2. Properties At December 31, 2024, the Company conducted business from office and operating facilities at owned and leased locations throughout the United States and select global markets. The Company leases a facility in Berwyn, Pennsylvania for its corporate headquarters.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following table reflects purchases of AMETEK, Inc. common stock by the Company during the three months ended December 31, 2023: Period Total Number of Shares Purchased (1)(2) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan (2) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan October 1, 2023 to October 31, 2023 — $ — — $ 817,325,034 November 1, 2023 to November 30, 2023 8,323 143.46 8,323 816,130,993 December 1, 2023 to December 31, 2023 — — — 816,130,993 Total 8,323 $ 143.46 8,323 _____________________ (1) Represents shares surrendered to the Company to satisfy tax withholding obligations in connection with employees’ share-based compensation awards.
Biggest changeIssuer Purchases of Equity Securities The following table reflects purchases of AMETEK, Inc. common stock by the Company during the three months ended December 31, 2024: Period Total Number of Shares Purchased (1)(2) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan (2) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan October 1, 2024 to October 31, 2024 — $ — — $ 748,135,553 November 1, 2024 to November 30, 2024 105,801 179.68 105,801 729,125,335 December 1, 2024 to December 31, 2024 739,179 184.08 739,179 593,058,748 Total 844,980 $ 183.53 844,980 _____________________ (1) Represents shares surrendered to the Company to satisfy tax withholding obligations in connection with employees’ share-based compensation awards.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The principal market on which the Company’s common stock is traded is the New York Stock Exchange and it is traded under the symbol “AME.” On January 31, 2024, there were approximately 1,700 holders of record of the Company’s common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The principal market on which the Company’s common stock is traded is the New York Stock Exchange and it is traded under the symbol “AME.” On January 31, 2025, there were approximately 1,700 holders of record of the Company’s common stock.
AMETEK’s stock price is a component of both indices. The performance graph and table assume a $100 investment made on December 31, 2018 and reinvestment of all dividends. The stock performance shown on the graph below is based on historical data and is not necessarily indicative of future stock price performance.
AMETEK’s stock price is a component of both indices. The performance graph and table assume a $100 investment made on December 31, 2019 and reinvestment of all dividends. The stock performance shown on the graph below is based on historical data and is not necessarily indicative of future stock price performance.
Such purchases may be effected from time to time in the open market or in private transactions, subject to market conditions and at management’s discretion. 19 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plan Information The following table sets forth information as of December 31, 2023 regarding all of the Company’s existing compensation plans pursuant to which equity securities are authorized for issuance to employees and non-employee directors: Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 2,741,164 $ 101.20 5,526,792 Equity compensation plans not approved by security holders — — — Total 2,741,164 $ 101.20 5,526,792 20 Table of Contents Stock Performance Graph The following graph and accompanying table compare the cumulative total stockholder return for AMETEK over the last five years ended December 31, 2023 with total returns for the same period for the Standard and Poor’s (“S&P”) 500 Index and S&P 500 Industrials.
Such purchases may be effected from time to time in the open market or in private transactions, subject to market conditions and at management’s discretion. 19 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plan Information The following table sets forth information as of December 31, 2024 regarding all of the Company’s existing compensation plans pursuant to which equity securities are authorized for issuance to employees and non-employee directors: Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 2,139,951 $ 114.33 5,131,945 Equity compensation plans not approved by security holders — — — Total 2,139,951 $ 114.33 5,131,945 20 Table of Contents Stock Performance Graph The following graph and accompanying table compare the cumulative total stockholder return for AMETEK over the last five years ended December 31, 2024 with total returns for the same period for the Standard and Poor’s (“S&P”) 500 Index and S&P 500 Industrials.
Under its share repurchase program, the Company repurchased approximately 55,800 shares of its common stock for $7.8 million in 2023 and approximately 2,673,000 shares of its common stock for $332.8 million in 2022. The objective and rationale of the share repurchases is to enhance shareholder value through the opportunistic repurchases of the Company’s common stock.
Under its share repurchase program, the Company repurchased approximately 1,258,200 shares of its common stock for $223.1 million in 2024 and approximately 55,800 shares of its common stock for $7.8 million in 2023. The objective and rationale of the share repurchases is to enhance shareholder value through the opportunistic repurchases of the Company’s common stock.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN December 31, 2018 2019 2020 2021 2022 2023 AMETEK, Inc. $ 100.00 $ 148.26 $ 181.23 $ 221.68 $ 212.10 $ 251.99 S&P 500 Index 100.00 131.49 155.68 200.37 164.08 207.21 S&P 500 Industrials 100.00 129.37 143.68 174.02 164.49 194.31 Item 6. Reserved 21 Table of Contents
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN December 31, 2019 2020 2021 2022 2023 2024 AMETEK, Inc. $ 100.00 $ 122.23 $ 149.52 $ 143.06 $ 169.96 $ 186.99 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 S&P 500 Industrials 100.00 111.06 134.52 127.15 150.20 176.44 Item 6. Reserved 21 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe increase in net sales for 2023 was due to a 4% organic sales increase and a 3% increase from acquisitions. • Net income for 2023 was a record $1,313.2 million, an increase of $153.7 million or 13.3%, compared with $1,159.5 million in 2022. • Diluted earnings per share for 2023 were a record $5.67, an increase of $0.66 or 13.2%, compared with $5.01 per diluted share in 2022. • Cash provided by operating activities totaled a record $1,735.3 million in 2023, an increase of $585.9 million or 51.0%, compared with cash provided by operating activities of $1,149.4 million in 2022. • The Company's backlog of unfilled orders at December 31, 2023 was a record $3,534.1 million. • During 2023, the Company spent $2,237.9 million in cash, net of cash acquired, to purchase four businesses: • In March 2023, AMETEK acquired Bison Gear & Engineering Corp.
Biggest changeHighlights in 2024 were: • Net sales for 2024 were a record $6,941.2 million, an increase of $344.2 million or 5.2%, compared with net sales of $6,597.0 million in 2023. • Net income for 2024 was a record $1,376.1 million, an increase of $62.9 million or 4.8%, compared with $1,313.2 million in 2023. • Diluted earnings per share for 2024 were a record $5.93, an increase of $0.26 or 4.5%, compared with $5.67 per diluted share in 2023. • Cash provided by operating activities totaled a record $1,828.8 million in 2024, an increase of $93.5 million or 5.4%, compared with cash provided by operating activities of $1,735.3 million in 2023. • The Company's backlog of unfilled orders at December 31, 2024 was $3,403.2 million. • In October 2024, the Company spent $117.5 million in cash, net of cash acquired, to purchase Virtek Vision International ("Virtek"), a leading provider of advanced laser-based projection and inspection systems. • EBITDA (earnings before interest, income taxes, depreciation, and amortization) was a record $2,151.6 million in 2024, compared with $2,014.7 million in 2023. • In the third quarter of 2024, the Company paid in full, at maturity, a $300 million in aggregate principal amount of 3.73% senior notes. • The Company continued its emphasis on investment in research, development and engineering, spending $371.9 million in 2024.
The Company can elect to perform a qualitative analysis to determine if it is more likely than not that the fair values of its indefinite-lived intangible assets are less than the respective carrying values of those assets. The Company elected to bypass performing the qualitative screen. The Company may elect to perform the qualitative analysis in future periods.
The Company can elect to perform a qualitative analysis to determine if it is more likely than not that the fair values of its indefinite-lived intangible assets are less than the respective carrying values of those assets. The Company elected to bypass the performing the qualitative screen. The Company may elect to perform the qualitative analysis in future periods.
Free cash flow is presented because the Company is aware that it is used by rating agencies, securities analysts, investors and other parties in evaluating the Company. The following table presents the reconciliation of cash flow from operating activities reported in accordance with U.S.
Free cash flow is presented because the Company is aware that it is used by rating agencies, securities analysts, investors and other parties in 26 Table of Contents evaluating the Company. The following table presents the reconciliation of cash flow from operating activities reported in accordance with U.S.
The Company wishes to take advantage of the “safe harbor” provisions of the PSLRA by cautioning readers that numerous important factors in some cases have caused, and in the future could cause, the Company’s actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company.
The Company wishes to take advantage of the “safe harbor” provisions of the PSLRA by cautioning readers that numerous important factors in some cases have caused, and in the future could cause, the Company’s actual 29 Table of Contents results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company.
The net debt-to-capital ratio is presented because the Company is aware that this measure is used by third parties in evaluating the 25 Table of Contents Company. (See "Non-GAAP Financial Measures" for a reconciliation of U.S. GAAP measures to comparable non-GAAP measures).
The net debt-to-capital ratio is presented because the Company is aware that this measure is used by third parties in evaluating the Company. (See "Non-GAAP Financial Measures" for a reconciliation of U.S. GAAP measures to comparable non-GAAP measures).
Because of the uncertainty inherent in such estimates, actual results may differ materially from the estimates used. Below are the policies used in preparing the Company's financial statements that management believes are the most dependent upon the application of estimates and assumptions.
Because of the uncertainty inherent in such estimates, actual results may differ materially from the estimates used. Below are the policies used in preparing 27 Table of Contents the Company's financial statements that management believes are the most dependent upon the application of estimates and assumptions.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021 can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission on February 22, 2024.
EBITDA (earnings before interest, income taxes, depreciation and amortization) was $2,014.7 million in 2023, compared with $1,829.7 million in 2022. Free cash flow and EBITDA are presented because the Company is aware that they are measures used by third parties in evaluating the Company. (See "Non-GAAP Financial Measures" for a reconciliation of U.S. GAAP measures to comparable non-GAAP measures).
EBITDA (earnings before interest, income taxes, depreciation and amortization) was $2,151.7 million in 2024, compared with $2,014.7 million in 2023. Free cash flow and EBITDA are presented because the Company is aware that they are measures used by third parties in evaluating the Company. (See "Non-GAAP Financial Measures" for a reconciliation of U.S. GAAP measures to comparable non-GAAP measures).
In 2023, the Company posted record sales, operating income, operating margins, net income, diluted earnings per share, orders, backlog, and operating cash flow. Positive market trends, the Company's record backlog, contributions from recent acquisitions, and continued focus on and implementation of Operational Excellence initiatives had a positive impact on 2023 results.
In 2024, the Company posted record sales, operating income, net income, diluted earnings per share, and operating cash flow. Positive market trends, the Company's backlog, contributions from recent acquisitions, and continued focus on and implementation of Operational Excellence initiatives had a positive impact on 2024 results.
Based on experience with these arrangements, the Company believes that any obligations that may arise will not be material to its financial position. 26 Table of Contents Non-GAAP Financial Measures EBITDA represents earnings before interest, income taxes, depreciation and amortization.
Based on experience with these arrangements, the Company believes that any obligations that may arise will not be material to its financial position. Non-GAAP Financial Measures EBITDA represents earnings before interest, income taxes, depreciation and amortization.
While the Company uses the best available information to prepare its cash flow and discount rate assumptions, actual future cash flows or market conditions could differ significantly resulting in future impairment charges related to recorded intangible balances.
While the Company uses the 28 Table of Contents best available information to prepare its cash flow and discount rate assumptions, actual future cash flows or market conditions could differ significantly resulting in future impairment charges related to recorded intangible balances.
Leases expire over a range of years from 2024 to 2032. Most of the leases contain renewal or purchase options, subject to various terms and conditions. See Note 14 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information on the nature and timing of lease obligations.
See Note 10 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information on the nature and timing of debt obligations. Leases expire over a range of years from 2025 to 2038. Most of the leases contain renewal or purchase options, subject to various terms and conditions.
GAAP to free cash flow: Year Ended December 31, 2023 2022 2021 (In millions) Cash provided by operating activities $ 1,735.3 $ 1,149.4 $ 1,160.5 Deduct: Capital expenditures (136.2) (139.0) (110.7) Free cash flow $ 1,599.1 $ 1,010.4 $ 1,049.8 Net debt represents total debt, net minus cash and cash equivalents.
GAAP to free cash flow: Year Ended December 31, 2024 2023 2022 (In millions) Cash provided by operating activities $ 1,828.8 $ 1,735.3 $ 1,149.4 Deduct: Capital expenditures (127.1) (136.2) (139.0) Free cash flow $ 1,701.7 $ 1,599.1 $ 1,010.4 Net debt represents total debt, net minus cash and cash equivalents.
The following table presents the reconciliation of net income reported in accordance with U.S. generally accepted accounting principles (“GAAP”) to EBITDA: Year Ended December 31, 2023 2022 2021 (In millions) Net income $ 1,313.2 $ 1,159.5 $ 990.1 Add (deduct): Interest expense 81.8 83.2 80.4 Interest income (11.1) (1.7) (1.4) Income taxes 293.2 269.2 233.1 Depreciation 122.5 113.7 108.5 Amortization 215.1 205.8 183.6 Total adjustments 701.5 670.2 604.2 EBITDA $ 2,014.7 $ 1,829.7 $ 1,594.3 Free cash flow represents cash flow from operating activities less capital expenditures.
The following table presents the reconciliation of net income reported in accordance with U.S. generally accepted accounting principles (“GAAP”) to EBITDA: Year Ended December 31, 2024 2023 2022 (In millions) Net income $ 1,376.1 $ 1,313.2 $ 1,159.5 Add (deduct): Interest expense 113.0 81.8 83.2 Interest income (5.8) (11.1) (1.7) Income taxes 285.4 293.2 269.2 Depreciation 135.3 122.5 113.7 Amortization 247.7 215.1 205.8 Total adjustments 775.6 701.5 670.2 EBITDA $ 2,151.7 $ 2,014.7 $ 1,829.7 Free cash flow represents cash flow from operating activities less capital expenditures.
Cash used by investing activities totaled $2,376.4 million in 2023, compared with cash used by investing activities of $552.8 million in 2022.
Cash used by investing activities totaled $244.8 million in 2024, compared with cash used by investing activities of $2,376.4 million in 2023.
The debt-to-capital ratio was 27.5% at December 31, 2023, compared with 24.2% at December 31, 2022. The net debt-to-capital ratio (total debt, net less cash and cash equivalents divided by the sum of net debt and stockholders’ equity) was 25.0% at December 31, 2023, compared with 21.4% at December 31, 2022.
The debt-to-capital ratio was 17.7% at December 31, 2024, compared with 27.5% at December 31, 2023. The net debt-to-capital ratio (total debt, net less cash and cash equivalents divided by the sum of net debt and stockholders’ equity) was 15.0% at December 31, 2024, compared with 25.0% at December 31, 2023.
Total international sales for 2023 were $3,128.2 million or 47.4% of net sales, an increase of $131.9 million or 4.4%, compared with international sales of $2,996.3 million or 48.7% of net sales in 2022. The increase in 23 Table of Contents international sales was primarily driven by strong demand in Europe and Asia as well as contributions from recent acquisitions.
Total international sales for 2024 were $3,291.7 million or 47.4% of net sales, an increase of $163.5 million or 5.2%, compared with international sales of $3,128.2 million or 47.4% of net sales in 2023. The increase in international sales was primarily driven by strong demand in Europe and Asia, as well as contributions from the 2023 acquisitions.
Results of Operations for the year ended December 31, 2023 compared with the year ended December 31, 2022 Net sales for 2023 were $6,597.0 million, an increase of $446.5 million or 7.3%, compared with net sales of $6,150.5 million in 2022.
Results of Operations for the year ended December 31, 2024 compared with the year ended December 31, 2023 Net sales for 2024 were $6,941.2 million, an increase of $344.2 million or 5.2%, compared with net sales of $6,597.0 million in 2023.
Selling, general and administrative expenses for 2023 were $677.0 million or 10.3% of net sales, an increase of $32.4 million or 5.0%, compared with $644.6 million or 10.5% of net sales in 2022. Selling expenses increased primarily due to the increase in net sales discussed above.
Selling, general and administrative expenses for 2024 were $696.9 million or 10.0% of net sales, an increase of $19.9 million or 2.9%, compared with $677.0 million or 10.3% of net sales in 2023. Selling expenses increased primarily due to the increase in net sales discussed above.
The Company performs either a qualitative or quantitative analysis to determine if it is more likely than not that the fair values of its reporting units are less than the respective carrying values of those reporting units.
The Company performs either a qualitative or quantitative analysis to determine if it is more likely than not that the fair values of its reporting units are less than the respective carrying values of those reporting units. The Company elected to bypass performing the qualitative screen and performed a quantitative analysis of the goodwill impairment test in the current year.
GAAP to net debt: December 31, 2023 2022 (In millions) Total debt, net $ 3,313.3 $ 2,385.0 Less: Cash and cash equivalents (409.8) (345.4) Net debt 2,903.5 2,039.6 Stockholders’ equity 8,730.2 7,476.5 Capitalization (net debt plus stockholders’ equity) $ 11,633.7 $ 9,516.1 Net debt as a percentage of capitalization 25.0 % 21.4 % 27 Table of Contents Internal Reinvestment Capital Expenditures Capital expenditures were $136.2 million or 2.1% of net sales in 2023, compared with $139.0 million or 2.3% of net sales in 2022.
GAAP to net debt: December 31, 2024 2023 (In millions) Total debt, net $ 2,079.7 $ 3,313.3 Less: Cash and cash equivalents (374.0) (409.8) Net debt 1,705.7 2,903.5 Stockholders’ equity 9,655.3 8,730.2 Capitalization (net debt plus stockholders’ equity) $ 11,361.0 $ 11,633.7 Net debt as a percentage of capitalization 15.0 % 25.0 % Internal Reinvestment Capital Expenditures Capital expenditures were $127.1 million or 1.8% of net sales in 2024, compared with $136.2 million or 2.1% of net sales in 2023.
Environmental Matters Information with respect to environmental matters is set forth in Note 13 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
All such expenditures were directed toward the development of new products and solutions and the improvement of existing products and solutions. Environmental Matters Information with respect to environmental matters is set forth in Note 13 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
The increase in cash provided by operating activities for 2023 was primarily due to improved working capital management and higher net income. Free cash flow (cash flow provided by operating activities less capital expenditures) was $1,599.1 million in 2023, compared with $1,010.4 million in 2022.
The increase in cash provided by operating activities for 2023 was primarily due to higher net income, net of higher noncash depreciation and amortization expense related to recent acquisitions, and improved working capital management. Free cash flow (cash flow provided by operating activities less capital expenditures) was $1,701.7 million in 2024, compared with $1,599.1 million in 2023.
At December 31, 2023, goodwill and other indefinite-lived intangible assets totaled $7,471.4 million or 49.7% of the Company’s total assets. The Company completed its required annual qualitative goodwill impairment test in the fourth quarter of 2023 and determined that the carrying values of the Company’s goodwill was not impaired.
At December 31, 2024, goodwill and other indefinite-lived intangible assets totaled $7,579.2 million or 51.8% of the Company’s total assets. The Company completed its required annual impairment tests in the fourth quarter of 2024 and determined that the carrying values of the Company’s goodwill and indefinite-lived intangibles were not impaired.
Cost of sales for 2023 was $4,212.5 million or 63.9% of net sales, an increase of $207.2 million or 5.2%, compared with $4,005.3 million or 65.1% of net sales for 2022. The cost of sales increase was primarily due to the net sales increase discussed above.
Cost of sales for 2024 was $4,464.7 million or 64.3% of net sales, an increase of $252.2 million or 6.0%, compared with $4,212.5 million or 63.9% of net sales for 2023. The cost of sales increase was primarily due to the net sales increase discussed above.
In 2023, the Company paid $2,237.9 million, net of cash acquired, to purchase Bison Gear & Engineering Corp., United Electronic Industries, Amplifier Research Corp. and Paragon Medical, compared to $429.7 million, net of cash acquired, to purchase Navitar, Inc. and RTDS Technologies Inc. in 2022.
In 2024, the Company paid $117.5 million, net of cash acquired, to purchase Virtek Vision International, compared to $2,237.9 million, net of cash acquired, to purchase Bison Gear & Engineering Corp., United Electronic Industries, Amplifier Research Corp. and Paragon Medical in 2023.
The increase in net sales for 2023 was due to a 4% organic sales increase and a 3% increase from acquisitions. EIG net sales were $4,624.3 million in 2023, an increase of 9.3%, compared with $4,229.4 million in 2022. EMG net sales were $1,972.7 million in 2023, an increase of 2.7%, compared with $1,921.2 million in 2022.
The increase in net sales for 2024 was due to a 7% increase from acquisitions, partially offset by a 2% organic sales decline. EIG net sales were $4,659.9 million in 2024, an increase of 0.8%, compared with $4,624.3 million in 2023. EMG net sales were $2,281.3 million in 2024, an increase of 15.6%, compared with $1,972.7 million in 2023.
Export shipments from the United States, which are included in total international sales, were $1,732.4 million in 2023, an increase of $43.7 million or 2.6%, compared with $1,688.7 million in 2022. Orders for 2023 were $6,912.4 million, an increase of $273.3 million or 4.1% compared with $6,639.1 million in 2022.
Export shipments from the United States, which are included in total international sales, were $1,880.8 million in 2024, an increase of $148.4 million or 8.6%, compared with $1,732.4 million in 2023. Orders for 2024 were $6,810.3 million, a decrease of $102.1 million or 1.5% compared with $6,912.4 million in 2023.
The Company utilizes this cash to fund its international operations, as well as to acquire international businesses. The Company is in compliance with all covenants, including financial covenants, for all of its debt agreements.
At December 31, 2024, the Company had $361.5 million in cash outside the United States, compared with $375.9 million at December 31, 2023. The Company utilizes this cash to fund its international operations, as well as to acquire international businesses. The Company is in compliance with all covenants, including financial covenants, for all of its debt agreements.
The net sales increase was due to a 5% increase from acquisitions, partially offset by an organic sales decrease. EMG’s operating income was $496.6 million for 2023, a decrease of $7.0 million or 1.4%, compared with $503.6 million in 2022. EMG’s operating margins were 25.2% of net sales for 2023, compared with 26.2% of net sales in 2022.
The net sales increase was due to a 2% increase from acquisitions, partially offset by a 1% organic sales decrease. EIG’s operating income was a record $1,428.4 million for 2024, an increase of $117.4 million or 9.0%, compared with $1,311.0 million in 2023.
Contractual Obligations and Other Commitments Material contractual obligations arising in the normal course of business primarily consist of purchase obligations, long-term debt and related interest payments, and leases. See Note 10 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information on the nature and timing of debt obligations.
See Note 14 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information on the nature and timing of lease obligations. Purchase obligations primarily consist of contractual commitments to purchase certain inventories at fixed prices.
Subsequent Event Effective February 9, 2024, the Company’s Board of Directors approved a 12% increase in the quarterly cash dividend on the Company’s common stock to $0.28 per common share from $0.25 per common share.
Effective February 7, 2025, the Company's Board of Directors approved an 11% increase in the quarterly cash dividend on its common stock to $0.31 per share from $0.28 per share. Effective February 7, 2025, the Company's Board of Directors approved a $1.25 billion share repurchase authorization.
At December 31, 2023, the Company had $1,116.0 million outstanding on the revolver with a maturity date of May 2027. The amount outstanding under the revolver that the Company expects, but is not required, to repay in 2024 is recorded in current liabilities on the consolidated balance sheet at December 31, 2023.
The amount outstanding under the revolver that the Company expects, but is not required, to repay in 2025 is recorded in current liabilities on the consolidated balance sheet at December 31, 2024. In the third quarter of 2024, the Company paid in full, at maturity, a $300 million in aggregate principal amount of 3.73% senior notes.
In 2023, the Company repurchased approximately 0.1 million shares of its common stock for $7.8 million, compared with $332.8 million used for repurchases of approximately 2.7 million shares in 2022. Effective May 5, 2022, the Company's Board of Directors approved a $1 billion share repurchase authorization.
In 2024, the Company repurchased approximately 1.2 million shares of its common stock for $212.0 million, compared with $7.8 million used for repurchases of approximately 0.1 million shares in 2023. At December 31, 2024, $604.1 million was available under the Company’s Board of Directors authorization for future share repurchases.
If performed, the quantitative goodwill impairment test uses a discounted cash flow analysis to determine the fair value of each reporting unit, which considers cash flows discounted at an appropriate discount rate.
The Company may elect to perform a qualitative analysis in future periods. The Company principally relies on a discounted cash flow analysis to determine the fair value of each reporting unit, which considers cash flows discounted at an appropriate discount rate.
As a result of all of the Company’s cash flow activities in 2023, cash and cash equivalents at December 31, 2023 totaled $409.8 million, compared with $345.4 million at December 31, 2022. At December 31, 2023, the Company had $375.9 million in cash outside the United States, compared with $344.0 million at December 31, 2022.
Proceeds from the exercise of employee stock options were $66.9 million in 2024, compared with $50.9 million in 2023. As a result of all of the Company’s cash flow activities in 2024, cash and cash equivalents at December 31, 2024 totaled $374.0 million, compared with $409.8 million at December 31, 2023.
Effective February 9, 2023, the Company’s Board of Directors approved a 14% increase in the quarterly cash dividend on the Company’s common stock to $0.25 per common share from $0.22 per common share. Proceeds from the exercise of employee stock options were $50.9 million in 2023, compared with $49.9 million in 2022.
Additional financing activities for 2024 included cash dividends paid of $258.8 million, compared with $230.3 million in 2023. Effective February 9, 2024, the Company’s Board of Directors approved a 12% increase in the quarterly cash dividend on the Company’s common stock to $0.28 per common share from $0.25 per common share.
The Company undertakes no obligation to 30 Table of Contents publicly update any forward-looking statements, whether as a result of new information, subsequent events or otherwise, unless required by the securities laws to do so.
Some, but not all, of the factors or uncertainties that could cause actual results to differ from present expectations are set forth above and under Item 1A. Risk Factors. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, subsequent events or otherwise, unless required by the securities laws to do so.
During 2023, the Company recorded lower pension income of $21.1 million and higher acquisition-related due diligence expense compared to 2022. The effective tax rate for 2023 was 18.3%, compared with 18.8% in 2022. See Note 9 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for further details.
See Note 9 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for further details. Net income for 2024 was $1,376.1 million, an increase of $62.9 million or 4.8%, compared with $1,313.2 million in 2023.
Additions to property, plant and equipment totaled $136.2 million in 2023, compared with $139.0 million in 2022. Cash provided by financing activities totaled $697.3 million in 2023, compared with $575.7 million of cash used by financing activities in 2022. At December 31, 2023, total debt, net was $3,313.3 million, compared with $2,385.0 million at December 31, 2022.
Additions to property, plant and equipment totaled $127.1 million in 2024, compared with $136.2 million in 2023. 24 Table of Contents Cash used by financing activities totaled $1,602.5 million in 2024, compared with $697.3 million of cash provided by financing activities in 2023.
Consolidated operating income was $1,707.5 million or 25.9% of net sales for 2023, an increase of $206.8 million or 13.8%, compared with $1,500.7 million or 24.4% of net sales in 2022. Other expense, net was $19.3 million for 2023, compared with $11.2 million of other income in 2022, a change of $30.5 million.
General and administrative expenses for 2024 were $105.3 million, compared with $100.1 million in 2023. Consolidated operating income was $1,779.6 million or 25.6% of net sales for 2024, an increase of $72.1 million or 4.2%, compared with $1,707.5 million or 25.9% of net sales in 2023.
The Company has standby letters of credit and surety bonds of $193.6 million related to performance and payment guarantees at December 31, 2023.
At December 31, 2024, the Company had $695.9 million of purchase obligations due within one year and $66.0 million of purchase obligations due in more than one year. The Company has standby letters of credit and surety bonds of $173.1 million related to performance and payment guarantees at December 31, 2024.
In 2023, total borrowings increased by $892.3 million, compared with a decrease of $73.7 million in 2022. At December 31, 2023, the Company had available borrowing capacity of $1,829.3 million under its revolving credit facility and term loan, including the $700 million accordion feature.
At December 31, 2024, the Company had available borrowing capacity of $2,020.3 million under its revolving credit facility and term loan, excluding the $700 million accordion feature. At December 31, 2024, the Company had $230.0 million outstanding on the revolver with a maturity date of May 2027.
Segment Results EIG’s net sales totaled $4,624.3 million for 2023, an increase of $394.9 million or 9.3%, compared with $4,229.4 million in 2022. The net sales increase was due to a 6% organic sales increase and a 3% increase from acquisitions.
EMG’s net sales totaled a record $2,281.3 million for 2024, an increase of $308.6 million or 15.6%, compared with $1,972.7 million in 2023. The net sales increase was due to a 20% increase from acquisitions, partially offset by a 5% organic sales decrease.
The Company also benefited from its strategic initiatives under AMETEK's four key strategies: Operational Excellence, Strategic Acquisitions, Global & Market Expansion and New Products. Highlights in 2023 were: • Net sales for 2023 were a record $6,597.0 million, an increase of $446.5 million or 7.3%, compared with net sales of $6,150.5 million in 2022.
The Company also benefited from its strategic initiatives under AMETEK's four key strategies: Operational Excellence, Strategic Acquisitions, Global & Market Expansion and New Products.
EIG's operating margins increased in 2023 compared to 2022 due to the sales increase discussed above, as well as continued benefits from the Company's Operational Excellence initiatives. 24 Table of Contents EMG’s net sales totaled $1,972.7 million for 2023, an increase of $51.5 million or 2.7%, compared with $1,921.2 million in 2022.
EIG’s operating margins were a record 30.7% of net sales for 2024, compared with 28.3% of net sales in 2023. EIG's operating margins increased in 2024 compared to 2023 due to the continued benefits from the Company's Operational Excellence initiatives.
Excluding the dilutive impact of the 2023 acquisitions and the gain on the sale of a facility, EMG operating margins increased 70 basis points compared to 2022. Liquidity and Capital Resources Cash provided by operating activities totaled $1,735.3 million in 2023, an increase of $585.9 million or 51.0%, compared with cash provided by operating activities of $1,149.4 million in 2022.
Liquidity and Capital Resources Cash provided by operating activities totaled $1,828.8 million in 2024, an increase of $93.5 million or 5.4%, compared with cash provided by operating activities of $1,735.3 million in 2023.
The increase in orders was due to a 7% increase from acquisitions, a 1% favorable effect of foreign currency translation, partially offset by an organic order decrease. The Company’s backlog of unfilled orders at December 31, 2023 was a record $3,534.1 million, an increase of $315.5 million or 9.8%, compared with $3,218.6 million at December 31, 2022.
The Company’s backlog of unfilled orders at December 31, 2024 was $3,403.2 million, a decrease of $130.9 million or 3.7%, compared with $3,534.1 million at December 31, 2023. Segment operating income for 2024 was $1,884.9 million, an increase of $77.4 million or 4.3%, compared with segment operating income of $1,807.5 million in 2023.
EMG's operating margins were negatively impacted by the dilutive impact of the 2023 acquisitions. In 2022, EMG's operating income included a $7.1 million gain on the sale of a facility, which increased EMG operating margins by 40 basis points.
EMG's operating margins were negatively impacted by the dilutive impact of the 2023 acquisitions. EMG's operating income and operating margins for 2024 included $29.2 million of integration costs related to the Paragon acquisition, which negatively impacted segment operating margins by 130 basis points.
Additionally, the Company considers historical returns on comparable fixed-income and equity investments and adjusts its estimate as deemed appropriate. • Income Taxes. The process of providing for income taxes and determining the related balance sheet accounts requires management to assess uncertainties, make judgments regarding outcomes and utilize estimates.
There can be no assurance that goodwill or indefinite-lived intangibles impairment will not occur in the future. • Income Taxes. The process of providing for income taxes and determining the related balance sheet accounts requires management to assess uncertainties, make judgments regarding outcomes and utilize estimates.
Net income for 2023 was $1,313.2 million, an increase of $153.7 million or 13.3%, compared with $1,159.5 million in 2022. Diluted earnings per share for 2023 were $5.67, an increase of $0.66 or 13.2%, compared with $5.01 per diluted share in 2022.
Diluted earnings per share for 2024 were $5.93, an increase of $0.26 or 4.5%, compared with $5.67 per diluted share in 2023. Segment Results EIG’s net sales totaled a record $4,659.9 million for 2024, an increase of $35.6 million or 0.8%, compared with $4,624.3 million in 2023.
These amounts included research and development expenses of $220.8 million, $198.8 million and $194.2 million in 2023, 2022, and 2021, respectively. All such expenditures were directed toward the development of new products and solutions and the improvement of existing products and solutions.
Research, development and engineering costs were $371.9 million in 2024, $351.7 million in 2023 and $322.1 million in 2022. These amounts included research and development expenses of $236.6 million, $220.8 million and $198.8 million in 2024, 2023, and 2022, respectively.
In 2023, approximately 64% of capital expenditures were for improvements to existing equipment or additional equipment to increase productivity and expand capacity. Capital expenditures in 2024 are expected to be approximately 2% of net sales, with a continued emphasis on spending to improve productivity.
Capital expenditures in 2025 are expected to be approximately 2% of net sales, with a continued emphasis on spending to improve productivity. Research, Development and Engineering The Company is committed to, and has consistently invested in, research, development and engineering activities to design and develop new and improved products and solutions.
EIG’s operating income was $1,311.0 million for 2023, an increase of $221.3 million or 20.3%, compared with $1,089.7 million in 2022. EIG’s operating margins were 28.3% of net sales for 2023, compared with 25.8% of net sales in 2022.
The organic sales decrease for 2024 is due to customer inventory normalization in our automation and engineered solutions core businesses. EMG’s operating income was $456.5 million for 2024, a decrease of $40.1 million or 8.1%, compared with $496.6 million in 2023. EMG’s operating margins were 20.0% of net sales for 2024, compared with 25.2% of net sales in 2023.
Removed
("Bison"), a designer and manufacturer of custom motion control solutions. • In August 2023, AMETEK acquired United Electronic Industries ("UEI"), a designer and manufacturer of high-performance test, measurement, simulation and control solutions. • In October 2023, AMETEK acquired Amplifier Research Corp.
Added
Approximately 27% of sales in 2024 were from products introduced in the past three years. 22 Table of Contents Results of Operations The following “Results of Operations of the year ended December 31, 2024 compared with the year ended December 31, 2023” section presents an analysis of the Company’s consolidated operating results displayed in the Consolidated Statement of Income.
Removed
("Amplifier Research"), a leading provider of amplifiers and electromagnetic compatibility testing equipment. 22 Table of Contents • In December 2023, AMETEK acquired Paragon Medical ("Paragon"), a leading provider of highly engineered medical components and instruments. • EBITDA (earnings before interest, income taxes, depreciation, and amortization) was a record $2,014.7 million in 2023, compared with $1,829.7 million in 2022. • The Company continued its emphasis on investment in research, development and engineering, spending $351.7 million in 2023.
Added
The decrease in orders was due to a 2% organic order decrease, a 1% unfavorable effect of foreign currency translation, partially offset by a 2% increase from acquisitions. The organic orders decrease is due to customer inventory normalization in our automation and engineered solutions core businesses.
Removed
Approximately 25% of sales in 2023 were from products introduced in the past three years.
Added
Segment operating income, as a percentage of net sales, decreased to 27.2% in 2024, compared with 27.4% in 2023. Segment operating income and operating margins in 2024 included $29.2 million of integration costs related to the Paragon acquisition, which negatively impacted segment operating margins by 40 basis points.
Removed
Results of Operations The following table sets forth net sales and income by reportable segment and on a consolidated basis: Year Ended December 31, 2023 2022 2021 (In thousands) Net sales: Electronic Instruments $ 4,624,250 $ 4,229,353 $ 3,763,758 Electromechanical 1,972,700 1,921,177 1,782,756 Consolidated net sales $ 6,596,950 $ 6,150,530 $ 5,546,514 Operating income and income before income taxes: Segment operating income: Electronic Instruments $ 1,310,962 $ 1,089,729 $ 958,183 Electromechanical 496,569 503,593 437,378 Total segment operating income 1,807,531 1,593,322 1,395,561 Corporate administrative expenses (100,072) (92,630) (86,891) Consolidated operating income 1,707,459 1,500,692 1,308,670 Interest expense (81,795) (83,186) (80,381) Other (expense) income, net (19,252) 11,186 (5,119) Consolidated income before income taxes $ 1,606,412 $ 1,428,692 $ 1,223,170 ______________________ The following “Results of Operations of the year ended December 31, 2023 compared with the year ended December 31, 2022” section presents an analysis of the Company’s consolidated operating results displayed in the Consolidated Statement of Income.
Added
The dilutive impact of the 2023 acquisitions negatively impacted segment operating margins by 110 basis points in 2024. Excluding the dilutive impact of the 2023 acquisitions and the Paragon integration costs, segment operating margins increased 130 basis points compared to 2023, due to the continued benefits from the Company's Operational Excellence initiatives.
Removed
Segment operating income for 2023 was $1,807.5 million, an increase of $214.2 million or 13.4%, compared with segment operating income of $1,593.3 million in 2022. Segment operating income, as a percentage of net sales, increased to 27.4% in 2023, compared with 25.9% in 2022.
Added
Other expense, net was $5.1 million for 2024, compared with $19.3 million of other expense in 2023, a change of $14.2 million. During 2024, the Company recorded higher pension income of $6.5 million and lower acquisition-related due diligence expense compared to 2023. 23 Table of Contents The effective tax rate for 2024 was 17.2%, compared with 18.3% in 2023.
Removed
Segment operating income and operating margins were positively impacted by the increase in sales discussed above, which was primarily driven by our higher margin businesses, as well as continued benefits from the Company's Operational Excellence initiatives.
Added
The dilutive impact of the 2023 acquisitions negatively impacted EMG operating margins by 270 basis points in 2024. Excluding the dilutive impact of the 2023 acquisitions and the Paragon integration costs, EMG operating margins decreased 120 basis points compared to 2023, due to the organic sales decrease discussed above.
Removed
General and administrative expenses for 2023 were $100.1 million, compared with $92.6 million in 2022. The general and administrative expenses in 2023 include higher employee compensation costs compared to 2022.
Added
At December 31, 2024, total debt, net was $2,079.7 million, compared with $3,313.3 million at December 31, 2023. In 2024, total borrowings decreased by $1,189.7 million, compared with an increase of $892.3 million in 2023.
Removed
On May 12, 2022, the Company along with certain of its foreign subsidiaries amended and restated its Credit Agreement dated as of September 22, 2011, as amended and restated as of March 10, 2016 and as further amended and restated as of October 30, 2018, with the lenders, JPMorgan Chase Bank, N.A., as Administrative Agent and Bank of America, N.A., PNC Bank, National Association, Trust Bank and Wells Fargo Bank, National Association, as Co-Syndication Agents.
Added
Subsequent Events On January 6, 2025, the Company established a commercial paper program under which it may issue short-term, unsecured commercial paper notes. Amounts available under the commercial paper program may be borrowed, repaid and re-borrowed, with the aggregate face or principal amount of the notes outstanding under the commercial paper program at any time not to exceed $2.3 billion.
Removed
The credit agreement amends and restates the Company’s existing revolving credit facility to increase the size from $1.5 billion to $2.3 billion and terminates the $800 million term loan. The credit agreement places certain restrictions on allowable additional indebtedness. In November 2021, the Company further amended the Credit Agreement to address the cessation of LIBOR on certain currencies.
Added
The notes will have maturities of up to 364 days from the date of issue. The Company intends the commercial paper program to provide additional financing flexibility for various purposes including acquisitions. The Company expects that outstanding indebtedness of the Company under both the revolving credit facility and the commercial paper program will not exceed $2.3 billion at any time.
Removed
This authorization replaces an earlier $500 million share repurchase authorization approved by the Board in February 2019. At December 31, 2023, $816.1 million was available under the Company’s Board of Directors authorization for future share repurchases. Additional financing activities for 2023 included cash dividends paid of $230.3 million, compared with $202.2 million in 2022.
Added
This new authorization replaces the previous $1 billion share repurchase authorization approved in May 2022. 25 Table of Contents Acquisition subsequent to December 31, 2024 In January 2025, the Company acquired Kern Microtechnik ("Kern"), a leading manufacturer of high-precision machining and optical inspection solutions supporting a wide range of applications within the medical, semiconductor, research, and space markets.
Removed
Purchase obligations primarily consist of contractual commitments to purchase certain inventories at fixed prices. At December 31, 2023, the Company had $723.6 million of purchase obligations due within one year and $66.4 million of purchase obligations due in more than one year.
Added
Kern has annual sales of approximately 50 million Euros. Kern will join EIG. Contractual Obligations and Other Commitments Material contractual obligations arising in the normal course of business primarily consist of purchase obligations, long-term debt and related interest payments, and leases.
Removed
Research, Development and Engineering The Company is committed to, and has consistently invested in, research, development and engineering activities to design and develop new and improved products and solutions. Research, development and engineering costs before customer reimbursement were $351.7 million in 2023, $322.1 million in 2022 and $299.6 million in 2021.
Added
While there are always changes in assumptions to reflect changing business and market conditions, the Company’s overall methodology and the population of assumptions used have remained unchanged. In order to evaluate the sensitivity of the goodwill impairment test to changes in the fair value calculations, the Company applied a hypothetical 10% decrease in fair values of each reporting unit.
Removed
When testing goodwill for impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely 28 Table of Contents than not that the estimated fair value of a reporting unit is less than its carrying amount.
Added
The 2024 results (expressed as a percentage of carrying value for the respective reporting unit) showed that, despite the hypothetical 10% decrease in fair value, the fair values of the Company’s reporting units still exceeded their respective carrying values by 95% to 388%.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+1 added−1 removed3 unchanged
Biggest changeForeign currency transactions have not had a significant effect on the operating results reported by the Company because revenues and costs associated with the revenues are generally transacted in the same foreign currencies. The primary commodities to which the Company has market exposure are raw material purchases of nickel, aluminum, copper, steel, titanium, and gold.
Biggest changeForeign currency transactions have not had a significant effect on the operating results reported by the Company because revenues and costs associated with the revenues are generally transacted in the same foreign currencies.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk The Company’s primary exposures to market risk are fluctuations in interest rates, foreign currency exchange rates and commodity prices, which could impact its financial condition and results of operations. The Company addresses its exposure to these risks through its normal operating and financing activities.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk The Company’s primary exposures to market risk are fluctuations in interest rates and foreign currency exchange rates, which could impact its financial condition and results of operations. The Company addresses its exposure to these risks through its normal operating and financing activities.
Based on a hypothetical ten percent adverse movement in interest rates, commodity prices or foreign currency exchange rates, the Company’s best estimate is that the potential losses in future earnings, fair value of risk-sensitive financial instruments and cash flows are not material, although the actual effects may differ materially from the hypothetical analysis. 31 Table of Contents
Based on a hypothetical ten percent adverse movement in interest rates or foreign currency exchange rates, the Company’s best estimate is that the potential losses in future earnings, fair value of risk-sensitive financial instruments and cash flows are not material, although the actual effects may differ materially from the hypothetical analysis. 30 Table of Contents
Exposure to foreign currency rate fluctuation is modest, monitored, and when possible, mitigated through the use of local borrowings and occasional derivative financial instruments in the foreign currency affected. The effect of translating foreign subsidiaries’ balance sheets into U.S. dollars is included in other comprehensive income within stockholders’ equity.
In the event a natural hedge is not available, the Company takes steps to mitigate foreign currency risk through the use of local borrowings and occasional derivative financial instruments in the currency affected. The effect of translating foreign subsidiaries’ balance sheets into U.S. dollars is included in other comprehensive income within stockholders’ equity.
Removed
Exposure to price changes in these commodities are generally mitigated through adjustments in selling prices of the ultimate product and purchase order pricing arrangements, although forward contracts are sometimes used to manage some of those exposures.
Added
The Company evaluates foreign currency exposures on a centralized basis and aims to balance, where possible, non-functional currency denominated assets to non-functional currency denominated liabilities to have a natural hedge and minimize foreign exchange impacts.

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