ame-20200930
false2020Q3000103786812-31us-gaap:AccountingStandardsUpdate201613Memberus-gaap:AccountingStandardsUpdate201613MemberP2Y61us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentus-gaap:OtherLiabilitiesNoncurrentRestricted stock granted to employees prior to 2018 generally vests four years after the grant date (cliff vesting) and is subject to accelerated vesting due to certain events, including doubling of the grant price of the Company’s common stock as of the close of business during any five consecutive trading daysRestricted stock granted to non-employee directors generally vests two years after the grant date (cliff vesting) and is subject to accelerated vesting due to certain events, including doubling of the grant price of the Company’s common stock as of the close of business during any five consecutive trading days.2525252533.3333.3333.3333.3333.3333.3300010378682020-01-012020-09-30xbrli:shares00010378682020-10-23iso4217:USD00010378682020-07-012020-09-3000010378682019-07-012019-09-3000010378682019-01-012019-09-30iso4217:USDxbrli:shares00010378682020-09-3000010378682019-12-3100010378682019-09-300001037868us-gaap:CommonStockMember2020-06-300001037868us-gaap:CommonStockMember2019-06-300001037868us-gaap:CommonStockMember2019-12-310001037868us-gaap:CommonStockMember2018-12-310001037868us-gaap:CommonStockMember2020-07-012020-09-300001037868us-gaap:CommonStockMember2019-07-012019-09-300001037868us-gaap:CommonStockMember2020-01-012020-09-300001037868us-gaap:CommonStockMember2019-01-012019-09-300001037868us-gaap:CommonStockMember2020-09-300001037868us-gaap:CommonStockMember2019-09-300001037868us-gaap:AdditionalPaidInCapitalMember2020-06-300001037868us-gaap:AdditionalPaidInCapitalMember2019-06-300001037868us-gaap:AdditionalPaidInCapitalMember2019-12-310001037868us-gaap:AdditionalPaidInCapitalMember2018-12-310001037868us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001037868us-gaap:AdditionalPaidInCapitalMember2019-07-012019-09-300001037868us-gaap:AdditionalPaidInCapitalMember2020-01-012020-09-300001037868us-gaap:AdditionalPaidInCapitalMember2019-01-012019-09-300001037868us-gaap:AdditionalPaidInCapitalMember2020-09-300001037868us-gaap:AdditionalPaidInCapitalMember2019-09-300001037868us-gaap:RetainedEarningsMember2020-06-300001037868us-gaap:RetainedEarningsMember2019-06-300001037868us-gaap:RetainedEarningsMember2019-12-310001037868us-gaap:RetainedEarningsMember2018-12-310001037868us-gaap:RetainedEarningsMember2020-07-012020-09-300001037868us-gaap:RetainedEarningsMember2019-07-012019-09-300001037868us-gaap:RetainedEarningsMember2020-01-012020-09-300001037868us-gaap:RetainedEarningsMember2019-01-012019-09-300001037868srt:RevisionOfPriorPeriodAccountingStandardsUpdateAdjustmentMemberus-gaap:RetainedEarningsMember2020-06-300001037868srt:RevisionOfPriorPeriodAccountingStandardsUpdateAdjustmentMemberus-gaap:RetainedEarningsMember2019-12-310001037868us-gaap:RetainedEarningsMember2020-09-300001037868us-gaap:RetainedEarningsMember2019-09-300001037868us-gaap:AccumulatedTranslationAdjustmentMember2020-06-300001037868us-gaap:AccumulatedTranslationAdjustmentMember2019-06-300001037868us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310001037868us-gaap:AccumulatedTranslationAdjustmentMember2018-12-310001037868us-gaap:AccumulatedTranslationAdjustmentMember2020-07-012020-09-300001037868us-gaap:AccumulatedTranslationAdjustmentMember2019-07-012019-09-300001037868us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-09-300001037868us-gaap:AccumulatedTranslationAdjustmentMember2019-01-012019-09-300001037868us-gaap:AccumulatedTranslationAdjustmentMember2020-09-300001037868us-gaap:AccumulatedTranslationAdjustmentMember2019-09-300001037868us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-06-300001037868us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-06-300001037868us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-12-310001037868us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2018-12-310001037868us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-07-012020-09-300001037868us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-07-012019-09-300001037868us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-01-012020-09-300001037868us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-01-012019-09-300001037868us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-09-300001037868us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-09-300001037868us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300001037868us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-300001037868us-gaap:TreasuryStockMember2020-06-300001037868us-gaap:TreasuryStockMember2019-06-300001037868us-gaap:TreasuryStockMember2019-12-310001037868us-gaap:TreasuryStockMember2018-12-310001037868us-gaap:TreasuryStockMember2020-07-012020-09-300001037868us-gaap:TreasuryStockMember2019-07-012019-09-300001037868us-gaap:TreasuryStockMember2020-01-012020-09-300001037868us-gaap:TreasuryStockMember2019-01-012019-09-300001037868us-gaap:TreasuryStockMember2020-09-300001037868us-gaap:TreasuryStockMember2019-09-3000010378682018-12-310001037868srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-01-012020-09-300001037868srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-09-300001037868us-gaap:OtherNoncurrentLiabilitiesMember2020-09-300001037868us-gaap:OtherNoncurrentLiabilitiesMember2019-12-3100010378682020-10-012020-09-3000010378682020-01-012019-12-3100010378682020-10-01srt:MinimumMember2020-09-300001037868srt:MaximumMember2020-10-012020-09-300001037868country:USame:ElectronicInstrumentsGroupMember2020-07-012020-09-300001037868country:USame:ElectromechanicalGroupMember2020-07-012020-09-300001037868country:US2020-07-012020-09-300001037868country:USame:ElectronicInstrumentsGroupMember2020-01-012020-09-300001037868country:USame:ElectromechanicalGroupMember2020-01-012020-09-300001037868country:US2020-01-012020-09-300001037868country:GBame:ElectronicInstrumentsGroupMember2020-07-012020-09-300001037868country:GBame:ElectromechanicalGroupMember2020-07-012020-09-300001037868country:GB2020-07-012020-09-300001037868country:GBame:ElectronicInstrumentsGroupMember2020-01-012020-09-300001037868country:GBame:ElectromechanicalGroupMember2020-01-012020-09-300001037868country:GB2020-01-012020-09-300001037868us-gaap:EuropeanUnionMemberame:ElectronicInstrumentsGroupMember2020-07-012020-09-300001037868us-gaap:EuropeanUnionMemberame:ElectromechanicalGroupMember2020-07-012020-09-300001037868us-gaap:EuropeanUnionMember2020-07-012020-09-300001037868us-gaap:EuropeanUnionMemberame:ElectronicInstrumentsGroupMember2020-01-012020-09-300001037868us-gaap:EuropeanUnionMemberame:ElectromechanicalGroupMember2020-01-012020-09-300001037868us-gaap:EuropeanUnionMember2020-01-012020-09-300001037868srt:AsiaMemberame:ElectronicInstrumentsGroupMember2020-07-012020-09-300001037868srt:AsiaMemberame:ElectromechanicalGroupMember2020-07-012020-09-300001037868srt:AsiaMember2020-07-012020-09-300001037868srt:AsiaMemberame:ElectronicInstrumentsGroupMember2020-01-012020-09-300001037868srt:AsiaMemberame:ElectromechanicalGroupMember2020-01-012020-09-300001037868srt:AsiaMember2020-01-012020-09-300001037868ame:OtherForeignCountriesMemberame:ElectronicInstrumentsGroupMember2020-07-012020-09-300001037868ame:OtherForeignCountriesMemberame:ElectromechanicalGroupMember2020-07-012020-09-300001037868ame:OtherForeignCountriesMember2020-07-012020-09-300001037868ame:OtherForeignCountriesMemberame:ElectronicInstrumentsGroupMember2020-01-012020-09-300001037868ame:OtherForeignCountriesMemberame:ElectromechanicalGroupMember2020-01-012020-09-300001037868ame:OtherForeignCountriesMember2020-01-012020-09-300001037868ame:InternationalMemberame:ElectronicInstrumentsGroupMember2020-07-012020-09-300001037868ame:InternationalMemberame:ElectromechanicalGroupMember2020-07-012020-09-300001037868ame:InternationalMember2020-07-012020-09-300001037868ame:InternationalMemberame:ElectronicInstrumentsGroupMember2020-01-012020-09-300001037868ame:InternationalMemberame:ElectromechanicalGroupMember2020-01-012020-09-300001037868ame:InternationalMember2020-01-012020-09-300001037868ame:ElectronicInstrumentsGroupMember2020-07-012020-09-300001037868ame:ElectromechanicalGroupMember2020-07-012020-09-300001037868ame:ElectronicInstrumentsGroupMember2020-01-012020-09-300001037868ame:ElectromechanicalGroupMember2020-01-012020-09-300001037868us-gaap:NonUsMember2020-07-012020-09-300001037868us-gaap:NonUsMember2020-01-012020-09-300001037868country:USame:ElectronicInstrumentsGroupMember2019-07-012019-09-300001037868country:USame:ElectromechanicalGroupMember2019-07-012019-09-300001037868country:US2019-07-012019-09-300001037868country:USame:ElectronicInstrumentsGroupMember2019-01-012019-09-300001037868country:USame:ElectromechanicalGroupMember2019-01-012019-09-300001037868country:US2019-01-012019-09-300001037868country:GBame:ElectronicInstrumentsGroupMember2019-07-012019-09-300001037868country:GBame:ElectromechanicalGroupMember2019-07-012019-09-300001037868country:GB2019-07-012019-09-300001037868country:GBame:ElectronicInstrumentsGroupMember2019-01-012019-09-300001037868country:GBame:ElectromechanicalGroupMember2019-01-012019-09-300001037868country:GB2019-01-012019-09-300001037868us-gaap:EuropeanUnionMemberame:ElectronicInstrumentsGroupMember2019-07-012019-09-300001037868us-gaap:EuropeanUnionMemberame:ElectromechanicalGroupMember2019-07-012019-09-300001037868us-gaap:EuropeanUnionMember2019-07-012019-09-300001037868us-gaap:EuropeanUnionMemberame:ElectronicInstrumentsGroupMember2019-01-012019-09-300001037868us-gaap:EuropeanUnionMemberame:ElectromechanicalGroupMember2019-01-012019-09-300001037868us-gaap:EuropeanUnionMember2019-01-012019-09-300001037868srt:AsiaMemberame:ElectronicInstrumentsGroupMember2019-07-012019-09-300001037868srt:AsiaMemberame:ElectromechanicalGroupMember2019-07-012019-09-300001037868srt:AsiaMember2019-07-012019-09-300001037868srt:AsiaMemberame:ElectronicInstrumentsGroupMember2019-01-012019-09-300001037868srt:AsiaMemberame:ElectromechanicalGroupMember2019-01-012019-09-300001037868srt:AsiaMember2019-01-012019-09-300001037868ame:OtherForeignCountriesMemberame:ElectronicInstrumentsGroupMember2019-07-012019-09-300001037868ame:OtherForeignCountriesMemberame:ElectromechanicalGroupMember2019-07-012019-09-300001037868ame:OtherForeignCountriesMember2019-07-012019-09-300001037868ame:OtherForeignCountriesMemberame:ElectronicInstrumentsGroupMember2019-01-012019-09-300001037868ame:OtherForeignCountriesMemberame:ElectromechanicalGroupMember2019-01-012019-09-300001037868ame:OtherForeignCountriesMember2019-01-012019-09-300001037868ame:InternationalMemberame:ElectronicInstrumentsGroupMember2019-07-012019-09-300001037868ame:InternationalMemberame:ElectromechanicalGroupMember2019-07-012019-09-300001037868ame:InternationalMember2019-07-012019-09-300001037868ame:InternationalMemberame:ElectronicInstrumentsGroupMember2019-01-012019-09-300001037868ame:InternationalMemberame:ElectromechanicalGroupMember2019-01-012019-09-300001037868ame:InternationalMember2019-01-012019-09-300001037868ame:ElectronicInstrumentsGroupMember2019-07-012019-09-300001037868ame:ElectromechanicalGroupMember2019-07-012019-09-300001037868ame:ElectronicInstrumentsGroupMember2019-01-012019-09-300001037868ame:ElectromechanicalGroupMember2019-01-012019-09-300001037868us-gaap:NonUsMember2019-07-012019-09-300001037868us-gaap:NonUsMember2019-01-012019-09-300001037868ame:ElectronicInstrumentsGroupMemberame:ProcessAndAnalyticalInstrumentationMember2020-07-012020-09-300001037868ame:ProcessAndAnalyticalInstrumentationMember2020-07-012020-09-300001037868ame:ElectronicInstrumentsGroupMemberame:ProcessAndAnalyticalInstrumentationMember2020-01-012020-09-300001037868ame:ProcessAndAnalyticalInstrumentationMember2020-01-012020-09-300001037868ame:AerospaceAndPowerMemberame:ElectronicInstrumentsGroupMember2020-07-012020-09-300001037868ame:AerospaceAndPowerMemberame:ElectromechanicalGroupMember2020-07-012020-09-300001037868ame:AerospaceAndPowerMember2020-07-012020-09-300001037868ame:AerospaceAndPowerMemberame:ElectronicInstrumentsGroupMember2020-01-012020-09-300001037868ame:AerospaceAndPowerMemberame:ElectromechanicalGroupMember2020-01-012020-09-300001037868ame:AerospaceAndPowerMember2020-01-012020-09-300001037868ame:AutomationAndEngineeredSolutionsMemberame:ElectromechanicalGroupMember2020-07-012020-09-300001037868ame:AutomationAndEngineeredSolutionsMember2020-07-012020-09-300001037868ame:AutomationAndEngineeredSolutionsMemberame:ElectromechanicalGroupMember2020-01-012020-09-300001037868ame:AutomationAndEngineeredSolutionsMember2020-01-012020-09-300001037868ame:ElectronicInstrumentsGroupMemberame:ProcessAndAnalyticalInstrumentationMember2019-07-012019-09-300001037868ame:ProcessAndAnalyticalInstrumentationMember2019-07-012019-09-300001037868ame:ElectronicInstrumentsGroupMemberame:ProcessAndAnalyticalInstrumentationMember2019-01-012019-09-300001037868ame:ProcessAndAnalyticalInstrumentationMember2019-01-012019-09-300001037868ame:AerospaceAndPowerMemberame:ElectronicInstrumentsGroupMember2019-07-012019-09-300001037868ame:AerospaceAndPowerMemberame:ElectromechanicalGroupMember2019-07-012019-09-300001037868ame:AerospaceAndPowerMember2019-07-012019-09-300001037868ame:AerospaceAndPowerMemberame:ElectronicInstrumentsGroupMember2019-01-012019-09-300001037868ame:AerospaceAndPowerMemberame:ElectromechanicalGroupMember2019-01-012019-09-300001037868ame:AerospaceAndPowerMember2019-01-012019-09-300001037868ame:AutomationAndEngineeredSolutionsMemberame:ElectromechanicalGroupMember2019-07-012019-09-300001037868ame:AutomationAndEngineeredSolutionsMember2019-07-012019-09-300001037868ame:AutomationAndEngineeredSolutionsMemberame:ElectromechanicalGroupMember2019-01-012019-09-300001037868ame:AutomationAndEngineeredSolutionsMember2019-01-012019-09-300001037868us-gaap:TransferredAtPointInTimeMemberame:ElectronicInstrumentsGroupMember2020-07-012020-09-300001037868us-gaap:TransferredAtPointInTimeMemberame:ElectromechanicalGroupMember2020-07-012020-09-300001037868us-gaap:TransferredAtPointInTimeMember2020-07-012020-09-300001037868us-gaap:TransferredAtPointInTimeMemberame:ElectronicInstrumentsGroupMember2020-01-012020-09-300001037868us-gaap:TransferredAtPointInTimeMemberame:ElectromechanicalGroupMember2020-01-012020-09-300001037868us-gaap:TransferredAtPointInTimeMember2020-01-012020-09-300001037868us-gaap:TransferredOverTimeMemberame:ElectronicInstrumentsGroupMember2020-07-012020-09-300001037868ame:ElectromechanicalGroupMemberus-gaap:TransferredOverTimeMember2020-07-012020-09-300001037868us-gaap:TransferredOverTimeMember2020-07-012020-09-300001037868us-gaap:TransferredOverTimeMemberame:ElectronicInstrumentsGroupMember2020-01-012020-09-300001037868ame:ElectromechanicalGroupMemberus-gaap:TransferredOverTimeMember2020-01-012020-09-300001037868us-gaap:TransferredOverTimeMember2020-01-012020-09-300001037868us-gaap:TransferredAtPointInTimeMemberame:ElectronicInstrumentsGroupMember2019-07-012019-09-300001037868us-gaap:TransferredAtPointInTimeMemberame:ElectromechanicalGroupMember2019-07-012019-09-300001037868us-gaap:TransferredAtPointInTimeMember2019-07-012019-09-300001037868us-gaap:TransferredAtPointInTimeMemberame:ElectronicInstrumentsGroupMember2019-01-012019-09-300001037868us-gaap:TransferredAtPointInTimeMemberame:ElectromechanicalGroupMember2019-01-012019-09-300001037868us-gaap:TransferredAtPointInTimeMember2019-01-012019-09-300001037868us-gaap:TransferredOverTimeMemberame:ElectronicInstrumentsGroupMember2019-07-012019-09-300001037868ame:ElectromechanicalGroupMemberus-gaap:TransferredOverTimeMember2019-07-012019-09-300001037868us-gaap:TransferredOverTimeMember2019-07-012019-09-300001037868us-gaap:TransferredOverTimeMemberame:ElectronicInstrumentsGroupMember2019-01-012019-09-300001037868ame:ElectromechanicalGroupMemberus-gaap:TransferredOverTimeMember2019-01-012019-09-300001037868us-gaap:TransferredOverTimeMember2019-01-012019-09-3000010378682020-01-012020-09-300001037868us-gaap:FairValueMeasurementsRecurringMember2020-09-300001037868us-gaap:FairValueMeasurementsRecurringMember2019-12-310001037868us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-09-300001037868us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-09-300001037868us-gaap:CarryingReportedAmountFairValueDisclosureMember2019-12-310001037868us-gaap:EstimateOfFairValueFairValueDisclosureMember2019-12-31iso4217:CAD0001037868us-gaap:ForeignExchangeForwardMembercurrency:CAD2020-09-300001037868us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberame:BritishPoundDenominatedLoansMember2020-09-300001037868us-gaap:ForeignExchangeContractMemberame:EuroLoanMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-30xbrli:pure0001037868us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-01-012020-09-300001037868srt:MinimumMember2020-09-300001037868srt:MaximumMember2020-09-300001037868ame:TwoThousandAndTwentyConsolidatedAcquisitionMember2020-01-012020-01-310001037868ame:TwoThousandAndTwentyConsolidatedAcquisitionMember2020-01-310001037868ame:TwoThousandAndTwentyConsolidatedAcquisitionMember2020-09-300001037868us-gaap:TradeNamesMemberame:TwoThousandAndTwentyConsolidatedAcquisitionMember2020-07-012020-09-300001037868ame:TwoThousandAndTwentyConsolidatedAcquisitionMember2020-07-012020-09-300001037868ame:TwoThousandAndTwentyConsolidatedAcquisitionMemberus-gaap:CustomerRelationshipsMember2020-07-012020-09-300001037868ame:TwoThousandAndTwentyConsolidatedAcquisitionMemberame:PurchasedTechnologyMember2020-07-012020-09-300001037868ame:TwoThousandAndTwentyConsolidatedAcquisitionMemberame:PurchasedTechnologyMember2020-01-012020-09-300001037868ame:KymeraInternationalMember2020-01-012020-03-310001037868ame:KymeraInternationalMemberus-gaap:OtherIncomeMember2020-01-012020-03-310001037868ame:ElectronicInstrumentsGroupMember2019-12-310001037868ame:ElectromechanicalGroupMember2019-12-310001037868ame:ElectronicInstrumentsGroupMember2020-09-300001037868ame:ElectromechanicalGroupMember2020-09-30iso4217:GBP0001037868us-gaap:SeniorNotesMember2020-07-012020-09-300001037868us-gaap:SeniorNotesMember2020-09-300001037868us-gaap:ShareBasedCompensationAwardTrancheOneMember2020-01-012020-09-300001037868us-gaap:ShareBasedCompensationAwardTrancheTwoMember2020-01-012020-09-300001037868ame:RestrictedStockGrantedPriorDateMember2020-01-012020-09-300001037868ame:NonEmployeeDirectorsRestrictedStockMember2020-01-012020-09-3000010378682019-01-012019-12-310001037868ame:NonVestedStockOptionsMember2020-09-300001037868us-gaap:RestrictedStockMember2019-12-310001037868us-gaap:RestrictedStockMember2020-01-012020-09-300001037868us-gaap:RestrictedStockMember2020-09-300001037868ame:PerformanceRestrictedStockUnitsMemberame:OfficersAndKeyManagementEmployeesMember2020-01-012020-03-310001037868ame:PerformanceRestrictedStockUnitsMemberame:OfficersAndKeyManagementEmployeesMembersrt:MinimumMember2020-01-012020-03-310001037868srt:MaximumMemberame:PerformanceRestrictedStockUnitsMemberame:OfficersAndKeyManagementEmployeesMember2020-01-012020-03-310001037868ame:PerformanceRestrictedStockUnitsMember2020-09-300001037868us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001037868us-gaap:ShareBasedCompensationAwardTrancheThreeMemberus-gaap:EmployeeStockOptionMember2020-01-012020-09-300001037868us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:EmployeeStockOptionMember2020-01-012020-09-300001037868us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:EmployeeStockOptionMember2020-01-012020-09-300001037868ame:ShareBasedPaymentArrangementTrancheFourMemberus-gaap:EmployeeStockOptionMember2020-01-012020-09-300001037868us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:EmployeeStockOptionMember2018-01-012018-01-010001037868us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:EmployeeStockOptionMember2018-01-012018-01-010001037868us-gaap:ShareBasedCompensationAwardTrancheThreeMemberus-gaap:EmployeeStockOptionMember2018-01-012018-01-010001037868us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:RestrictedStockMember2018-01-012018-01-010001037868us-gaap:RestrictedStockMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2018-01-012018-01-010001037868us-gaap:RestrictedStockMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2018-01-012018-01-01ame:Site0001037868ame:HccMember2020-01-012020-09-300001037868ame:HccMember2020-09-300001037868ame:HccMember2019-12-31ame:unit_Lawsuit0001037868ame:ReductionInWorkforceMember2020-01-012020-09-300001037868ame:ReductionInWorkforceMemberus-gaap:CostOfSalesMember2020-01-012020-09-300001037868ame:ReductionInWorkforceMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-012020-09-300001037868ame:ReductionInWorkforceMemberus-gaap:OperatingSegmentsMemberame:ElectronicInstrumentsGroupMember2020-01-012020-09-300001037868ame:ReductionInWorkforceMemberus-gaap:OperatingSegmentsMemberame:ElectromechanicalGroupMember2020-01-012020-09-30
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 10-Q
_________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                     
Commission File Number 1-12981
_________________________
AMETEK, Inc.
(Exact name of registrant as specified in its charter)
_________________________
Delaware
(State or other jurisdiction of
incorporation or organization)

1100 Cassatt Road
Berwyn, Pennsylvania
(Address of principal executive offices)
14-1682544
(I.R.S. Employer
Identification No.)

19312-1177
(Zip Code)
Registrant’s telephone number, including area code: (610647-2121
_________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes     No  
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
(Do not check if a smaller reporting company)
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
_________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
Common StockAMENew York Stock Exchange
The number of shares of the registrant’s common stock outstanding as of the latest practicable date was: Common Stock, $0.01 Par Value, outstanding at October 23, 2020 was 230,064,856 shares.



AMETEK, Inc.
Form 10-Q
Table of Contents
Page
2

Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AMETEK, Inc.
Consolidated Statement of Income
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Net sales$1,126,942 $1,276,633 $3,341,082 $3,853,736 
Cost of sales732,705 823,262 2,226,547 2,512,722 
Selling, general and administrative123,496 152,315 384,764 461,289 
Total operating expenses856,201 975,577 2,611,311 2,974,011 
Operating income270,741 301,056 729,771 879,725 
Interest expense(21,187)(21,308)(66,597)(65,436)
Other (expense) income, net(1,479)(5,517)142,428 (12,521)
Income before income taxes248,075 274,231 805,602 801,768 
Provision for income taxes43,494 53,482 154,188 161,248 
Net income$204,581 $220,749 $651,414 $640,520 
Basic earnings per share$0.89 $0.97 $2.84 $2.82 
Diluted earnings per share$0.88 $0.96 $2.82 $2.79 
Weighted average common shares outstanding:
Basic shares229,576 228,041 229,254 227,493 
Diluted shares231,460 229,560 230,904 229,191 
Dividends declared and paid per share$0.18 $0.14 $0.54 $0.42 
See accompanying notes.
3

Table of Contents
AMETEK, Inc.
Condensed Consolidated Statement of Comprehensive Income
(In thousands)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Total comprehensive income$229,713 $198,102 $650,908 $633,135 
See accompanying notes.
4

Table of Contents
AMETEK, Inc.
Consolidated Balance Sheet
(In thousands)
September 30,
2020
December 31,
2019
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$1,304,838 $393,030 
Receivables, net614,773 744,760 
Inventories, net584,753 624,567 
Other current assets138,654 263,414 
Total current assets2,643,018 2,025,771 
Property, plant and equipment, net508,645 548,908 
Right of use assets, net166,728 179,679 
Goodwill4,188,754 4,047,539 
Other intangibles, net2,644,404 2,762,872 
Investments and other assets281,837 279,790 
Total assets$10,433,386 $9,844,559 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt, net$505,030 $497,449 
Accounts payable324,837 377,219 
Customer advanced payments175,834 156,818 
Income taxes payable40,771 30,292 
Accrued liabilities and other357,022 364,080 
Total current liabilities1,403,494 1,425,858 
Long-term debt, net2,295,810 2,271,292 
Deferred income taxes541,516 536,140 
Other long-term liabilities488,374 495,777 
Total liabilities4,729,194 4,729,067 
Stockholders’ equity:
Common stock2,671 2,662 
Capital in excess of par value890,585 832,821 
Retained earnings6,914,976 6,387,612 
Accumulated other comprehensive loss(533,645)(533,139)
Treasury stock(1,570,395)(1,574,464)
Total stockholders’ equity5,704,192 5,115,492 
Total liabilities and stockholders’ equity$10,433,386 $9,844,559 
See accompanying notes.
5

Table of Contents
AMETEK, Inc.
Consolidated Statement of Stockholders’ Equity
(In thousands)
(Unaudited)
Three months ended September 30,Nine Months Ended
September 30,
2020201920202019
Capital stock
Preferred stock, $0.01 par value
$— $— $— $— 
Common stock, $0.01 par value
Balance at the beginning of the period2,668 2,654 2,662 2,640 
Shares issued3 3 9 17 
Balance at the end of the period2,671 2,657 2,671 2,657 
Capital in excess of par value
Balance at the beginning of the period860,771 759,775 832,821 706,743 
Issuance of common stock under employee stock plans18,989 19,347 27,886 56,933 
Share-based compensation costs10,825 13,558 29,878 29,004 
Balance at the end of the period890,585 792,680 890,585 792,680 
Retained earnings
Balance at the beginning of the period6,751,686 6,009,968 6,387,612 5,653,811 
Net income204,581 220,749 651,414 640,520 
Cash dividends paid(41,291)(31,883)(123,690)(95,498)
Adoption of ASU 2016-13 — (360)— 
Other 2  3 
Balance at the end of the period6,914,976 6,198,836 6,914,976 6,198,836 
Accumulated other comprehensive (loss) income
Foreign currency translation:
Balance at the beginning of the period(315,252)(292,790)(286,248)(302,138)
Translation adjustments46,922 (44,543)(2,103)(38,368)
Change in long-term intercompany notes9,003 (11,292)7,979 (12,312)
Net investment hedge instruments gain (loss), net of tax of $10,459 and $(9,736) for the quarter ended September 30, 2020 and 2019 and $3,681 and $(11,086) for the nine months ended September 30, 2020 and 2019, respectively
(32,476)30,231 (11,431)34,424 
Balance at the end of the period(291,803)(318,394)(291,803)(318,394)
Defined benefit pension plans:
Balance at the beginning of the period(243,525)(243,036)(246,891)(248,950)
Amortization of net actuarial loss (gain) and other, net of tax of $(531) and $(873) for the quarter ended September 30, 2020 and 2019, and $(1,593) and $(2,620) for the nine months ended September 30, 2020 and 2019, respectively
1,683 2,957 5,049 8,871 
Balance at the end of the period(241,842)(240,079)(241,842)(240,079)
Accumulated other comprehensive loss at the end of the period(533,645)(558,473)(533,645)(558,473)
Treasury stock
Balance at the beginning of the period(1,569,908)(1,569,790)(1,574,464)(1,570,184)
Issuance of common stock under employee stock plans(414)346 8,638 7,062 
Purchase of treasury stock(73)(291)(4,569)(6,613)
Balance at the end of the period(1,570,395)(1,569,735)(1,570,395)(1,569,735)
Total stockholders’ equity$5,704,192 $4,865,965 $5,704,192 $4,865,965 
See accompanying notes.
6

Table of Contents
AMETEK, Inc.
Condensed Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
Nine months ended September 30,
20202019
Cash provided by (used for):
Operating activities:
Net income$651,414 $640,520 
Adjustments to reconcile net income to total operating activities:
Depreciation and amortization190,398 169,935 
Deferred income taxes(4,532)13,397 
Share-based compensation expense29,878 29,004 
Gain on sale of business(141,020) 
Gain on sale of facilities(7,523)(4,529)
Net change in assets and liabilities, net of acquisitions176,743 (82,604)
Pension contributions(5,110)(2,505)
Other, net4,850 8,996 
Total operating activities895,098 772,214 
Investing activities:
Additions to property, plant and equipment(37,164)(61,525)
Purchases of businesses, net of cash acquired(116,509)(122,149)
Proceeds from sale of business245,311  
Proceeds from sale of facilities9,508 8,263 
Other, net(2,457)2,059 
Total investing activities98,689 (173,352)
Financing activities:
Net change in short-term borrowings109,997 (258,211)
Proceeds from long-term borrowings 100,000 
Repayments of long-term borrowings(102,947) 
Repurchases of common stock(4,569)(6,613)
Cash dividends paid(123,690)(95,498)
Proceeds from stock option exercises39,880 59,645 
Other, net(3,389)(7,249)
Total financing activities(84,718)(207,926)
Effect of exchange rate changes on cash and cash equivalents2,739 (9,535)
Increase in cash and cash equivalents911,808 381,401 
Cash and cash equivalents:
Beginning of period393,030 353,975 
End of period$1,304,838 $735,376 
See accompanying notes.
7

Table of Contents
AMETEK, Inc.
Notes to Consolidated Financial Statements
September 30, 2020
(Unaudited)

1.    Basis of Presentation
The accompanying consolidated financial statements are unaudited. AMETEK, Inc. (the “Company”) believes that all adjustments (which primarily consist of normal recurring accruals) necessary for a fair presentation of the consolidated financial position of the Company at September 30, 2020, the consolidated results of its operations for the three and nine months ended September 30, 2020 and 2019 and its cash flows for the nine months ended September 30, 2020 and 2019 have been included. Quarterly results of operations are not necessarily indicative of results for the full year. The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the U.S. Securities and Exchange Commission.
COVID-19
On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic. As a result of market and economic conditions, in accordance with the guidelines set forth in ASC 350 and ASC 360, the Company performed an analysis for potential interim impairment indicators of its intangible and other long-lived assets. As of September 30, 2020, the Company concluded there were no indicators of impairment that resulted in a triggering event to perform an interim test of impairment of goodwill, other indefinite-lived intangibles, or long-lived assets.
2.    Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
Effective January 1, 2020, the Company adopted ASU No. 2016-13,  Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments  (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13  provides guidance on the estimation of current expected credit losses on financial instruments, including trade receivables. ASU 2016-13  requires entities to consider a broad range of information to estimate expected credit losses, including increased forward-looking information, which may result in earlier recognition of losses when compared to prior standards. The adoption of ASU 2016-13  was a decrease to net Accounts Receivable and a decrease to Retained Earnings of $0.4 million. See Note 3 - Revenues, for further discussion.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (“ASU 2018-13”), which changes the fair value measurement disclosure requirements of ASC Topic 820, Fair Value Measurement (“ASC 820”), by eliminating, modifying and adding to those requirements. ASU 2018-13 also modifies the disclosure objective paragraphs of ASC 820 to eliminate (1) “at a minimum” from the phrase “an entity shall disclose at a minimum” and (2) other similar “open ended” disclosure requirements to promote the appropriate exercise of discretion by entities. The Company prospectively adopted ASU 2018-13, effective January 1, 2020, and the adoption did not have a significant impact on the Company’s consolidated results of operations, financial position, cash flows and financial statement disclosures.
In August 2018, the FASB issued ASU No. 2018-15, Intangibles–Goodwill and Other–Internal-Use Software (“ASU 2018-15”), that requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance in ASC Topic 350, Intangibles–Goodwill and Other. ASU 2018-15 requires a customer to disclose the nature of its hosting arrangements that are service contracts and provide disclosures as if the deferred implementation costs were a separate, major depreciable asset class. The Company prospectively adopted ASU 2018-15, effective January 1, 2020, and the adoption did not have a significant impact on the Company’s consolidated results of operations, financial position, cash flows and financial statement disclosures.
8

Table of Contents
AMETEK, Inc.
Notes to Consolidated Financial Statements
September 30, 2020
(Unaudited)
Recent Accounting Pronouncements
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021. Early adoption is permitted and the amendments in this ASU should be applied on a retrospective basis to all periods presented. The Company has not determined the impact ASU 2019-12 may have on the Company’s consolidated results of operations, financial position, cash flows or financial statement disclosures.
In August 2018, the FASB issued ASU No. 2018-14, Compensation–Retirement Benefits–Defined Benefit Plans–General (“ASU 2018-14”), which changes the disclosure requirements of ASC Topic 715, Compensation – Retirement Benefits, by eliminating, modifying and adding to those requirements. ASU 2018-14 is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted and the amendments in this ASU should be applied on a retrospective basis to all periods presented. The Company has not determined the impact ASU 2018-14 may have on the Company’s consolidated financial statement disclosures.
3.    Revenues
The outstanding contract asset and liability accounts were as follows:
20202019
(In thousands)
Contract assets—January 1$73,039 $58,266 
Contract assets – September 3068,157 78,010 
Change in contract assets – (decrease) increase(4,882)19,744 
Contract liabilities – January 1167,306 146,162 
Contract liabilities – September 30198,660 152,897 
Change in contract liabilities – increase(31,354)(6,735)
Net change$(36,236)$13,009 
The net change for the nine months ended September 30, 2020 was primarily driven by the receipt of advance payments from customers exceeding the recognition of revenue as performance obligations were satisfied. For the nine months ended September 30, 2020 and 2019, the Company recognized revenue of $120.6 million and $123.6 million, respectively, that was previously included in the beginning balance of contract liabilities.
Contract assets are reported as a component of Other current assets in the consolidated balance sheet. At September 30, 2020 and December 31, 2019, $22.9 million and $10.6 million of Customer advanced payments (contract liabilities), respectively, were recorded in Other long-term liabilities in the consolidated balance sheets.
Applying the practical expedient available under ASC 606, the remaining performance obligations exceeding one year as of September 30, 2020 and December 31, 2019 were $322.0 million and $233.3 million, respectively. Remaining performance obligations represent the transaction price of firm, non-cancelable orders, with expected delivery dates to customers greater than one year from the balance sheet date, for which the performance obligation is unsatisfied or partially unsatisfied. These performance obligations will be substantially satisfied within two to three years.
Geographic Areas
Information about the Company’s operations in different geographic areas for the three and nine months ended September 30, 2020 is shown below. Net sales were attributed to geographic areas based on the location of the customer.
9

Table of Contents
AMETEK, Inc.
Notes to Consolidated Financial Statements
September 30, 2020
(Unaudited)
Three months ended September 30, 2020Nine months ended September 30, 2020
EIG
EMG
Total
EIGEMGTotal
(In thousands)
United States$379,744 $198,440 $578,184 $1,125,046 $622,498 $1,747,544 
International(1):
United Kingdom11,488 28,657 40,145 39,708 84,547 124,255 
European Union countries97,028 78,851 175,879 282,605 246,944 529,549 
Asia188,254 47,496 235,750 514,189 138,862 653,051 
Other foreign countries71,858 25,126 96,984 208,931 77,752 286,683 
Total international368,628 180,130 548,758 1,045,433 548,105 1,593,538 
Consolidated net sales$748,372 $378,570 $1,126,942 $2,170,479 $1,170,603 $3,341,082 
________________
(1)    Includes U.S. export sales of $303.2 million and $866.3 million for the three and nine months ended September 30, 2020, respectively.
Information about the Company’s operations in different geographic areas for the three and nine months ended September 30, 2019 is shown below. Net sales were attributed to geographic areas based on the location of the customer.
Three months ended September 30, 2019Nine months ended September 30, 2019
EIGEMGTotalEIGEMGTotal
(In thousands)
United States$421,629 $252,343 $673,972 $1,250,564 $764,001 $2,014,565 
International(1):
United Kingdom19,538 34,319 53,857 47,885 100,657 148,542 
European Union countries99,180 98,357 197,537 302,800 308,138 610,938 
Asia190,419 46,347 236,766 569,553 142,035 711,588 
Other foreign countries84,786 29,715 114,501 271,908 96,195 368,103 
Total international393,923 208,738 602,661 1,192,146 647,025 1,839,171 
Consolidated net sales$815,552 $461,081 $1,276,633 $2,442,710 $1,411,026 $3,853,736 
______________
(1)    Includes U.S. export sales of $317.6 million and $965.1 million for the three and nine months ended September 30, 2019, respectively.
Major Products and Services
The Company’s major products and services in the reportable segments were as follows:
Three months ended September 30, 2020Nine months ended September 30, 2020
EIGEMGTotalEIGEMGTotal
(In thousands)
Process and analytical instrumentation$557,570 $ $557,570 $1,589,550 $ $1,589,550 
Aerospace and power190,802 116,126 306,928 580,929 347,510 928,439 
Automation and engineered solutions 262,444 262,444  823,093 823,093 
Consolidated net sales$748,372 $378,570 $1,126,942 $2,170,479 $1,170,603 $3,341,082 

10

Table of Contents
AMETEK, Inc.
Notes to Consolidated Financial Statements
September 30, 2020
(Unaudited)
Three months ended September 30, 2019Nine months ended September 30, 2019
EIGEMGTotalEIGEMGTotal
(In thousands)
Process and analytical instrumentation$586,430 $— $586,430 $1,747,708 $— $1,747,708 
Aerospace and power229,122 123,228 352,350 695,002 362,498 1,057,500 
Automation and engineered solutions337,853 337,853 — 1,048,528 1,048,528 
Consolidated net sales$815,552 $461,081 $1,276,633 $2,442,710 $1,411,026 $3,853,736 
Timing of Revenue Recognition
Three months ended September 30, 2020Nine months ended September 30, 2020
EIG
EMG
Total
EIGEMGTotal
(In thousands)
Products transferred at a point in time$603,602 $346,237 $949,839 $1,762,310 $1,049,798 $2,812,108 
Products and services transferred over time144,770 32,333 177,103 408,169 120,805 528,974 
Consolidated net sales$748,372 $378,570 $1,126,942 $2,170,479 $1,170,603 $3,341,082 

Three months ended September 30, 2019Nine months ended September 30, 2019
EIG
EMG
Total
EIGEMGTotal
(In thousands)
Products transferred at a point in time$652,950 $416,280 $1,069,230 $1,984,938 $1,286,060 $3,270,998 
Products and services transferred over time162,602 44,801 207,403 457,772 124,966 582,738 
Consolidated net sales$815,552 $461,081 $1,276,633 $2,442,710 $1,411,026 $3,853,736 
Product Warranties
The Company provides limited warranties in connection with the sale of its products. The warranty periods for products sold vary among the Company’s operations, but the majority do not exceed one year. The Company calculates its warranty expense provision based on its historical warranty experience and adjustments are made periodically to reflect actual warranty expenses. Product warranty obligations are reported as a component of Accrued liabilities and other in the consolidated balance sheet.
Changes in the accrued product warranty obligation were as follows:
Nine Months Ended September 30,
20202019
(In thousands)
Balance at the beginning of the period$27,611 $23,482 
Accruals for warranties issued during the period9,766 14,342 
Settlements made during the period(11,513)(13,335)
Warranty accruals related to acquired businesses and other during the period2,594 617 
Balance at the end of the period$28,458 $25,106 
Accounts Receivable
The Company maintains allowances for estimated losses resulting from the inability of customers to meet their financial obligations to the Company. The Company recognizes an allowance for doubtful accounts, on all accounts receivable, which considers the length of time receivables are past due, customers’ billing exposure, ability to pay, and contract terms. The Company also considers general and market business conditions, country, and political risk. Balances are written off when determined to be uncollectible.
At September 30, 2020, the Company recorded $614.8 million of accounts and notes receivable, net of allowances of $12.6 million. Changes in the allowance were not material for the three and nine months ended September 30, 2020.
11

Table of Contents
AMETEK, Inc.
Notes to Consolidated Financial Statements
September 30, 2020
(Unaudited)
4.    Earnings Per Share
The calculation of basic earnings per share is based on the weighted average number of common shares considered outstanding during the periods. The calculation of diluted earnings per share reflects the effect of all potentially dilutive securities (principally outstanding stock options and restricted stock grants). Securities that are anti-dilutive have been excluded and are not significant. The number of weighted average shares used in the calculation of basic earnings per share and diluted earnings per share was as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
(In thousands)
Weighted average shares:
Basic shares229,576 228,041 229,254 227,493 
Equity-based compensation plans1,884 1,519 1,650 1,698 
Diluted shares231,460 229,560 230,904 229,191 
5.    Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
The Company utilizes a valuation hierarchy for disclosure of the inputs to the valuations used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
The following table provides the Company’s assets that are measured at fair value on a recurring basis, consistent with the fair value hierarchy, at September 30, 2020 and December 31, 2019:
September 30, 2020December 31, 2019
Fair Value
Fair Value
(In thousands)
Mutual fund investments$8,177 $8,390 
The fair value of mutual fund investments, which are valued as level 1 investments, was based on quoted market prices. The mutual fund investments are shown as a component of investments and other assets on the consolidated balance sheet.
For the nine months ended September 30, 2020 and 2019, gains and losses on the investments noted above were not significant. No transfers between level 1 and level 2 investments occurred during the nine months ended September 30, 2020 and 2019.
Financial Instruments
Cash, cash equivalents and mutual fund investments are recorded at fair value at September 30, 2020 and December 31, 2019 in the accompanying consolidated balance sheet.
12

Table of Contents
AMETEK, Inc.
Notes to Consolidated Financial Statements
September 30, 2020
(Unaudited)
The following table provides the estimated fair values of the Company’s financial instrument liabilities, for which fair value is measured for disclosure purposes only, compared to the recorded amounts at September 30, 2020 and December 31, 2019:
September 30, 2020December 31, 2019
Recorded
Amount
Fair Value
Recorded
Amount
Fair Value
(In thousands)
Long-term debt, net (including current portion)$(2,299,924)$(2,492,828)$(2,382,041)$(2,531,549)
The fair value of net short-term borrowings approximates the carrying value. Net short-term borrowings are valued as level 2 liabilities as they are corroborated by observable market data. The Company’s net long-term debt is all privately held with no public market for this debt, therefore, the fair value of net long-term debt was computed based on comparable current market data for similar debt instruments and is considered a level 3 liability.
Foreign Currency
At September 30, 2020, the Company had a Canadian dollar forward contract for a total notional value of 24.0 million Canadian dollars and an immaterial unrealized gain outstanding. For the nine months ended September 30, 2020 and 2019, realized gains and losses on foreign currency forward contracts were not significant. The Company does not typically designate its foreign currency forward contracts as hedges.
6.    Hedging Activities
The Company has designated certain foreign-currency-denominated long-term borrowings as hedges of the net investment in certain foreign operations. As of September 30, 2020, these net investment hedges included British-pound-and Euro-denominated long-term debt. These borrowings were designed to create net investment hedges in certain designated foreign subsidiaries. The Company designated the British-pound- and Euro-denominated loans referred to above as hedging instruments to offset translation gains or losses on the net investment due to changes in the British pound and Euro exchange rates. These net investment hedges are evidenced by management’s contemporaneous documentation supporting the hedge designation. Any gain or loss on the hedging instruments (the debt) following hedge designation is reported in accumulated other comprehensive income in the same manner as the translation adjustment on the hedged investment based on changes in the spot rate, which is used to measure hedge effectiveness.
At September 30, 2020, the Company had $290.7 million of British-pound-denominated loans, which were designated as a hedge against the net investment in British pound functional currency foreign subsidiaries. At September 30, 2020, the Company had $670.8 million in Euro-denominated loans, which were designated as a hedge against the net investment in Euro functional currency foreign subsidiaries. As a result of the British-pound- and Euro-denominated loans designated and 100% effective as net investment hedges, $15.1 million of pre-tax currency remeasurement losses have been included in the foreign currency translation component of other comprehensive income for the nine months ended September 30, 2020.
7.    Inventories, net
September 30,
2020
December 31,
2019
(In thousands)
Finished goods and parts$83,093 $99,773 
Work in process110,593 118,240 
Raw materials and purchased parts391,067 406,554 
Total inventories, net$584,753 $624,567 
13

Table of Contents
AMETEK, Inc.
Notes to Consolidated Financial Statements
September 30, 2020
(Unaudited)
8.    Leases
The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. The Company has lease agreements which include lease and non-lease components, which the Company has elected to account for as a single lease component for all classes of underlying assets. Lease expense for variable lease components are recognized when the obligation is probable.
Operating leases are included in right of use assets, accrued liabilities and other, and other long-term liabilities on our consolidated balance sheets. Operating lease right of use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease payments are recognized as lease expense on a straight-line basis over the lease term. The Company has no material finance leases. The Company primarily leases buildings (real estate) and automobiles which are classified as operating leases. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As an implicit interest rate is not readily determinable in our leases, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
The lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. Options for lease renewals have been excluded from the lease term (and lease liability) for the majority of the Company’s leases as the reasonably certain threshold is not met. In a small number of the Company’s leases, the options for renewals have been included in the lease term as the reasonably certain threshold is met due to the Company having significant economic incentive for extending the lease.
Lease payments included in the measurement of the lease liability are comprised of fixed payments, variable payments that depend on an index or rate and amounts probable to be payable under the exercise of the Company option to purchase the underlying asset if reasonably certain.
Variable lease payments not dependent on a rate or index associated with the Company’s leases are recognized when the events, activities, or circumstances in the lease agreement on which those payments are assessed are probable. Variable lease payments are presented as operating expense in the Company’s income statement in the same line item as expense arising from fixed lease payments.
The Company has commitments under operating leases for certain facilities, vehicles and equipment used in its operations. Cash used in operations for operating leases was not materially different from operating lease expense for the nine months ended September 30, 2020 and September 30, 2019. The Company's leases have initial lease terms ranging from one month to 14 years. Certain lease agreements contain provisions for future rent increases.
The components of lease expense were as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
(In thousands)
Operating lease cost$10,715 $10,500 $31,704 $29,209 
Variable lease cost1,611 543 3,701 3,073 
Total lease cost$12,326 $11,043 $35,405 $32,282 
14

Table of Contents
AMETEK, Inc.
Notes to Consolidated Financial Statements
September 30, 2020
(Unaudited)
Supplemental balance sheet information related to leases was as follows:
September 30,
2020
December 31,
2019
(In thousands)
Right of use assets, net$166,728 $179,679 
Lease liabilities included in Accrued Liabilities and other43,219 43,025 
Lease liabilities included in Other long-term liabilities129,286 142,620 
Total lease liabilities$172,505 $185,645 
Supplemental cash flow information and other information related to leases was as follows:
Nine Months Ended
September 30,
20202019
(In thousands)
Right-of-use assets obtained in exchange for new operating liabilities$25,981 $12,952 
Weighted-average remaining lease terms—operating leases (years)5.565.93
Weighted-average discount rate—operating leases3.56 %3.81 %
Maturities of lease liabilities as of September 30, 2020 were as follows:
Lease Liability Maturity Analysis
Operating Leases
(In thousands)
Remaining 2020$12,793 
202146,702 
202238,489 
202329,394 
202419,764 
Thereafter42,595 
Total lease payments189,737 
Less: imputed interest17,232 
$172,505 
The Company does not have any significant leases that have not yet commenced.
9.    Acquisition and Divestiture
Acquisition
The Company spent $116.5 million in cash, net of cash acquired, to acquire IntelliPower in January 2020. IntelliPower designs and manufactures a broad portfolio of ruggedized solutions including uninterruptible power systems, external battery packs, power distribution units and power conditioners. IntelliPower was privately held and is headquartered in Orange, California. IntelliPower is part of EIG.
15

Table of Contents
AMETEK, Inc.
Notes to Consolidated Financial Statements
September 30, 2020
(Unaudited)
The following table represents the allocation of the purchase price for the net assets of the IntelliPower acquisition based on the estimated fair values at acquisition (in millions):
Property, plant and equipment$1.8 
Goodwill58.0 
Other intangible assets59.5 
Deferred income taxes(13.1)
Net working capital and other(1)
10.3 
Total cash paid$116.5 
________________
(1)Includes $6.4 million in accounts receivable, whose fair value, contractual cash flows and expected cash flows are approximately equal.
The amount allocated to goodwill is reflective of the benefits the Company expects to realize as IntelliPower’s products and solutions broaden the Company’s differentiated product offerings in the power systems and instruments sectors.
At September 30, 2020, the purchase price allocated to other intangible assets of $59.5 million consists of $9.0 million of indefinite-lived intangible trade names, which are not subject to amortization. The remaining $50.5 million of other intangible assets consists of $38.0 million of customer relationships, which are being amortized over a period of 20 years, and $12.5 million of purchased technology, which is being amortized over a period of 15 years. Amortization expense for each of the next five years for the 2020 acquisition is expected to approximate $3 million per year.
The Company finalized the measurement of certain tangible assets and liabilities for its 2020 acquisition of IntelliPower, as well as the accounting for income taxes. The Company finalized the measurement of its goodwill and other intangible assets related to its fourth quarter of 2019 acquisition of Gatan, which had no material impact to the Company's Statement of Income.
The IntelliPower acquisition had an immaterial impact on reported net sales, net income and diluted earnings per share for the three and nine months ended September 30, 2020. Had the acquisition been made at the beginning of 2020 or 2019, unaudited pro forma net sales, net income and diluted earnings per share for the three and nine months ended September 30, 2020 and 2019, respectively, would not have been materially different than the amounts reported.
Divestiture
The Company completed its sale of Reading Alloys to Kymera International in March 2020 for net cash proceeds of $245.3 million. The sale resulted in a pretax gain of $141.0 million, recorded in Other income (expense), net in the Consolidated Statement of Income, and income tax expense of approximately $31.4 million in connection with the sale. Reading Alloys revenue and costs were reported within the EMG segment through the date of sale.
10.    Goodwill
The changes in the carrying amounts of goodwill by segment were as follows:
EIGEMGTotal
(In millions)
Balance at December 31, 2019$2,892.2 $1,155.3 $4,047.5 
Goodwill acquired58.0  58.0 
Purchase price allocation adjustments and other75.2 (0.2)75.0 
Foreign currency translation adjustments5.3 3.0