A Diversified Growth Company
Simple Ideas.
Powerful Results.
Roper 2010 Annual Report
Roper 2010 Annual Report
Roper is a diversified growth company
and a constituent of the S&P 500, Fortune
1000, and Russell 1000 indices. We provide
engineered products and solutions that
create global leadership positions across
a diverse set of niche markets. These markets
include water, energy, transportation, medical,
education, and SaaS-based information networks.
Financial Highlights
(in millions)
Sales
Net Earnings
EBITDA
2006
2007
2008
2009
2010
$ 1,701
$ 2,102
$ 2,306
$ 2,050
$2,386
$ 189
$ 246
$ 282
$ 239
$ 323
$ 420
$ 529
$ 593
$ 502
$ 638
Free Cash Flow
$ 230
$ 314
$ 404
$ 342
$ 471
10000
10000
8000
8000
6000
6000
4000
4000
2000
2000
0
0
12/31/00
12/31/00
12/31/01
12/31/01
12/31/02
12/31/02
12/31/03
12/31/03
12/31/04
12/31/04
12/31/05
12/31/05
12/31/06
12/31/06
12/31/07
12/31/07
12/31/08
12/31/08
12/31/09
12/31/09
12/31/10
12/31/10
03/31/11
03/31/11
Roper Market Capitalization
(in millions)
$8,221
$3,396
$1,012
Period
ended: 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
3/31/2011
We deliver compelling cash flow through
outstanding execution. We invest to create
new value for our shareholders.
60
50
40
30
20
10
0
30
25
20
15
10
5
0
S&P 500
Roper
S&P 500
Roper
8
7
6
5
4
3
2
1
0
S&P 500
Roper
Roper 2010 Annual Report
Behind Our Asset-light Business Model.
How light is Roper’s asset-light model? Consider that in 2010 we generated
$7.81 of revenue for every $1.00 of gross fixed assets. S&P 500 industrial
peers required nearly five times more. By sustaining an asset-light
business model, we invest cash for growth instead of using cash to support
a high fixed asset infrastructure. Simple ideas generating powerful results.
BLUE BAND BACKGROUND IS ONLY FOR
PROOFING TO SEE TEXT YOU CAN DELETE BLUE BAC
Simple
Ideas.
Gross Profit % of Sales
EBITDA % of Sales
53%
27%
31%
18%
Sales Per Dollar of
Gross Fixed Assets
$7.81
$1.63
Niche Markets * Win with Customer Intimacy and Technology Solutions * High Gross Margins
Empowered & Focused Business Unit Leadership * Asset-light Business with Recurring Revenue
Reinvest in Existing Businesses * Deploy Excess Cash into Value Added Acquisitions
These aren’t just catch phrases. They are the simple ideas that guide our strategy. The ideas that define who we
are as a company. And just as significantly, place boundaries around who we are not.
By consistently executing these simple ideas, we have built a family of high-performing businesses with leadership
positions in niche markets. And our focus on cash generation provides the fuel for continued growth as we enter a
new decade.
Roper
S&P
500
Industrials
Roper
S&P
500
Industrials
Roper
S&P
500
Industrials
Source: Bloomberg publicly reported trailing twelve month simple average as of February 1, 2011
*Gross Fixed Assets: Net PP&E plus Accumulated Depreciation
page 2
page 3
The Results Are In.
Our simple ideas, combined with nimble execution and outstanding oper-
ating performance, led to record results for 2010. Sales increased 16%
over 2009 to $2.4 billion. Net earnings were up 35% to $323 million. And
free cash flow increased 38% to $471 million.
Roper 2010 Annual Report
Powerful
BLUE BAND BACKGROUND IS ONLY FOR
PROOFING TO SEE TEXT YOU CAN DELETE BLUE BAC
Results.
Net Sales
(in millions)
$2,386
$1,454
$504
EBITDA
(in millions)
$638
$335
$112
Free Cash Flow*
(in millions)
$471
$257
$52
By leveraging scale and agility—in our end markets, our businesses, and our governance system—we have
successfully executed over a sustained period, during both favorable and difficult economic periods. How
successfully? Over the past decade, Roper’s sales have increased by an annual rate of 17%. Net earnings have
grown 21% per year. And free cash flow has increased 25% per year. These powerful results have added more
than $6 billion to our market capitalization.
a2000
a2005
a2010
a2000
a2005
a2010
a2000
a2005
a2010
2000
2005
2010
2000
2005
2010
2000
2005
2010
* Free Cash Flow = Operating Cash Flow Less Capital Expenditures
page 4
page 5
page 5
2500
2000
1500
1000
500
0
800
700
600
500
400
300
200
100
0
500
400
300
200
100
0
Roper 2010 Annual Report
TO OUR SHAREHOLDERS
As we entered the new decade in 2010, we expected to
A Proven Business Model
get off to a fast start and we certainly did. In fact, it was
During the recession, we demonstrated the strength of
an all-time record year for Roper. Virtually every financial
the Company and its business model. We were pleased
indicator registered historic results for the Company—
by the resiliency of our niche businesses, which held
bookings, sales, gross profit, operating profit, EBITDA,
or gained share during the downturn, a testament to
and net earnings. We generated record-setting operat-
the solutions they deliver for their customers every day.
ing cash flow of a half-billion dollars, which represented
Our competitive advantages—technology leadership,
155 percent of net earnings. Free cash flow margins reached
application engineering expertise, and superior customer
20 percent of sales. Perhaps even better news is we expect
intimacy—enabled us to succeed in the marketplace.
to establish new records in 2011.
These past few years reinforced our belief that daily busi-
Our performance will continue to be driven by the simple
ness decisions are best made by those closest to their
ideas that have transformed the enterprise over the prior
markets and customers. By utilizing common tools such
decade—focusing on cash return disciplines, seeking
as break-even and detailed profitability analyses, our
and maintaining leadership positions in niche markets,
business leaders thoughtfully reduced costs with preci-
generating high gross margins, developing outstanding
sion in late 2008 and 2009 while maintaining flexibility to
operational teams, delivering compelling cash flow using
meet customer demand in 2010. As a result, 2010 gross
our asset-light business model, deploying capital to drive
margin increased to 53.4 percent and we achieved an all-
internal growth, and continuing to acquire new businesses
time record EBITDA margin of 26.7 percent. We could not
with great growth prospects.
have asked for more nimble execution by our business
leaders throughout this period.
“Roper today enjoys the benefits of a decade-long investment strategy
that has created compelling long-term performance.”
page 6
Despite the downturn, we continued to make meaningful
Growing Software Platform
internal growth investments in the development of new
In July 2010, we acquired iTradeNetwork, Inc., the leading
products and the improvement of our sales effectiveness in
global provider of software-as-a-service (SaaS)-based
areas that showed promising opportunities. These targeted
trading network and business intelligence solutions to the
investments helped drive our 2010 organic sales growth.
food industry. iTradeNetwork’s leading software solutions
We enter 2011 with a record backlog of $785 million.
serve more than 6,200 customers transacting over $250
billion annually, allowing distributors, manufacturers, oper-
Our asset-light business model continues to provide
ators, and retailers to reduce supply chain costs, grow
rewards for shareholders, allowing our businesses to act
revenue, and strengthen trading partner relationships.
nimbly in the face of volatile market conditions. Additionally,
our teams did an outstanding job staying focused on
iTradeNetwork is an excellent addition to our growing
growth and cash in 2010: While sales increased 16 per-
SaaS businesses, complementing the outstanding soft-
cent over 2009, our key working capital components—the
ware services platforms we have built with our CBORD,
combination of receivables and inventory minus payables
Horizon and Freight Matching businesses. iTradeNetwork
and accruals—decreased 26 percent by year-end.
operates a unique platform that generates significant
Comparison of 10-year Cumulative total Shareholder Return
Comparison of 10 year cumulative total shareholder return
Roper Industries, Inc.
S&P 500
500
400
300
200
100
0
S & P Roper
Roper Industries
$500
$400
$300
$200
$100
$0
a2000
a2001
a2002
a2003
a2004
a2005
a2006
a2007
a2008
a2009
a2010
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
page 7
Roper 2010 Annual Report
“ Our teams did an outstanding job staying focused on growth
and cash in 2010: While sales increased 16% over 2009,
our key working capital components—the combination of
receivables and inventory minus payables and accruals—
decreased 26% by year-end.”
cash flow with low working capital requirements and over
input costs. We have built a business model that relies
95% recurring revenue. The acquisition gives us further
more on intellectual capital than fixed assets. Our busi-
scale to pursue additional acquisitions in the software
nesses have consistently demonstrated their agility and
solutions space, where we continue to see many attractive
nimbleness in volatile markets. Our family of SaaS-based
opportunities.
information businesses is providing an exciting new plat-
form of opportunities for additional investment. Our cash
We invested nearly $900 million in acquisitions during the
conversion execution has grown significantly, providing
15-month period from fourth quarter 2009 through 2010.
compelling cash flow to self-fund investment opportunities
We enter 2011 with a balance sheet that is stronger than
and add power to our balance sheet.
ever, providing us the capacity to do one of the things we
do best: invest cash into new growth opportunities that
As we look forward to another record year in 2011, we can
create shareholder value.
assure you that Roper’s next decade of performance will
Perspective and Opportunity
Roper today enjoys the benefits of a decade-long invest-
ment strategy that has created compelling long-term per-
formance. We have moved into more stable end markets
that possess long-term sustained demand and offer excit-
ing growth opportunities. Our asset-light businesses con-
sume few raw materials and have limited exposure to higher
be based on the same strengths that have produced its
success over the past 10 years: the consistent application of
simple ideas combined with disciplined execution to
generate powerful results.
Brian Jellison
Chairman and Chief Executive Officer
page 8
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2010
□ 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 1-12273
Roper Industries, Inc.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
51-0263969
(I.R.S. Employer
Identification No.)
6901 Professional Parkway East, Suite 200
Sarasota, Florida 34240
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (941) 556-2601
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class
Common Stock, $0.01 Par Value
Name of Each Exchange
on Which Registered
New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes □ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934. □ Yes No
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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and
will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. □
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§223.405) 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, or a smaller reporting
company (as defined in Rule 12b-2 of the Exchange Act).
Large accelerated filer □ Accelerated filer □ Non-accelerated filer □ Smaller reporting company
Indicate by check mark if the registrant is a shell company (as defined in Rule 12-b2 of the Act). □ Yes No
Based on the closing sale price on the New York Stock Exchange on June 30, 2010, the aggregate market value of the voting and non-voting
common stock held by non-affiliates of the registrant was: $5,335,038,039.
Number of shares of Registrant’s Common Stock outstanding as of February 18, 2011: 95,336,634.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s Proxy Statement to be furnished to Stockholders in connection with its Annual Meeting of Stockholders to be
held on June 1, 2011, are incorporated by reference into Part III of this Annual Report on Form 10-K.
TABLE OF CONTENTS ROPER INDUSTRIES, INC.
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010
PART I
Item 1.
Business 4
Item 1A.
Risk Factors 7
Item 1B.
Unresolved Staff Comments 11
Item 2.
Properties 11
Item 3.
Legal Proceedings 11
Item 4.
Removed and Reserved 11
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 12
Item 6.
Selected Financial Data 14
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations 15
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk 24
Item 8.
Financial Statements and Supplementary Data 25
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 48
Item 9A.
Controls and Procedures 48
Item 9B.
Other Information 48
PART III
Item 10.
Directors, Executive Officers and Corporate Governance 49
Item 11.
Executive Compensation 49
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 49
Item 13.
Certain Relationships and Related Transactions, and Director Independence 49
Item 14.
Principal Accountant Fees and Services 49
PART IV
Item 15.
Exhibits and Financial Statement Schedules 50
Signatures 53
page 2 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 3
INFORMATION ABOUT FORwARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (“Annual Report”) includes and incorporates by reference “forward-looking statements” within the
meaning of the federal securities laws. In addition, we, or our executive officers on our behalf, may from time to time make forward-
looking statements in reports and other documents we file with the SEC or in connection with oral statements made to the press,
potential investors or others. All statements that are not historical facts are “forward-looking statements.” The words “estimate,” “plan,”
“project,” “intend,” “expect,” “believe,” “anticipate,” and similar expressions identify forward-looking statements. These forward-looking
statements include statements regarding our expected financial position, business, financing plans, business strategy, business prospects,
revenues, working capital, liquidity, capital needs, interest costs and income, in each case relating to our company as a whole, as well as
statements regarding acquisitions, potential acquisitions and the benefits of acquisitions.
Forward-looking statements are estimates and projections reflecting our best judgment and involve a number of risks and uncertainties
that could cause actual results to differ materially from those suggested by the forward-looking statements. These statements are based
on our management’s beliefs and assumptions, which in turn are based on currently available information. Examples of forward-looking
statements in this report include but are not limited to our expectations regarding our ability to generate operating cash flows and reduce
debt and associated interest expense and our expectations regarding growth through acquisitions. Important assumptions relating to
the forward-looking statements include, among others, assumptions regarding demand for our products, the cost, timing and success
of product upgrades and new product introductions, raw materials costs, expected pricing levels, the timing and cost of expected capital
expenditures, expected outcomes of pending litigation, competitive conditions, general economic conditions and expected synergies
relating to acquisitions, joint ventures and alliances. These assumptions could prove inaccurate. Although we believe that the estimates
and projections reflected in the forward-looking statements are reasonable, our expectations may prove to be incorrect. Important factors
that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include:
• general economic conditions;
• difficulty making acquisitions and successfully integrating acquired businesses;
• any unforeseen liabilities associated with future acquisitions;
• limitations on our business imposed by our indebtedness;
• unfavorable changes in foreign exchange rates;
• difficulties associated with exports;
• risks and costs associated with our international sales and operations;
• increased directors’ and officers’ liability and other insurance costs;
• risk of rising interest rates;
• product liability and insurance risks;
• increased warranty exposure;
• future competition;
• the cyclical nature of some of our markets;
• reduction of business with large customers;
• risks associated with government contracts;
• changes in the supply of, or price for, raw materials, parts and components;
• environmental compliance costs and liabilities;
• risks and costs associated with asbestos-related litigation;
• potential write-offs of our substantial intangible assets;
• our ability to successfully develop new products;
• failure to protect our intellectual property;
• economic disruption caused by terrorist attacks, health crises or other unforeseen events; and
• the factors discussed in Item 1A to this Annual Report under the heading “Risk Factors.”
page 2 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 3
we believe these forward-looking statements are reasonable. However, you should not place undue reliance on any forward-looking
statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made,
and we undertake no obligation to publicly update any of them in light of new information or future events.
PART I
ITEM 1. BUSINESS
OUR BUSINESS
Roper Industries, Inc. (“Roper” or the “Company”) was incorporated on December 17, 1981 under the laws of the State of Delaware.
we are a diversified growth company that designs, manufactures and distributes medical and scientific imaging products and software,
energy systems and controls, industrial technology products and radio frequency (“RF”) products and services. we market these products
and services to selected segments of a broad range of markets including RF applications, medical, water, energy, research, education, food
and food services, security and other niche markets.
we pursue consistent and sustainable growth in sales and earnings by emphasizing continuous improvement in the operating performance
of our existing businesses and by acquiring other carefully selected businesses that offer high value-added services, engineered products
and solutions and are capable of achieving growth and maintaining high margins. we compete in many niche markets and believe that
we are the market leader or a competitive alternative to the market leader in the majority of these markets.
MARKET SHARE, MARKET ExPANSION, AND PRODUCT DEVELOPMENT
Leadership with Engineered Content for Niche Markets—we maintain a leading position in many of our markets. we believe our market
positions are attributable to the technical sophistication of our products, the applications expertise used to create our advanced products
and systems, and our distribution and service capabilities. Our operating units grow their businesses through new product development
and development of new applications and services for existing products to satisfy customer needs. In addition, our operating units grow
our customer base by expanding our distribution, selling other products through our existing channels and entering adjacent markets.
Diversified End Markets and Geographic Reach—Over the past decade, we have strategically expanded the number of end markets we
serve to expand our opportunities for growth. we have a global presence, with sales of products manufactured and exported from the
United States (“U.S.”) and manufactured abroad and sold to customers outside the U.S. totaling $944 million in 2010. Information regard-
ing our international operations is set forth in Note 15 of the notes to Consolidated Financial Statements included in this Annual Report.
Research and Development—we conduct applied research and development to improve the quality and performance of our products and
to develop new technologies and products. Our research and development spending was $102.4 million in 2010 as compared to $83.4 and
$87.4 million in 2009 and 2008, respectively. Research and development expense as a percentage of sales increased to 4.3% in 2010 from
4.1% in 2009. The percentage has increased as the mix of our businesses shifts to higher technology, medical and software platforms.
OUR BUSINESS SEGMENTS
Our operations are reported in four segments based upon common customers, markets, sales channels, technologies and common cost
opportunities. The segments are: Medical & Scientific Imaging, Energy Systems and Controls, Industrial Technology and RF Technology.
Financial information about our business segments is presented in Note 15 of the notes to Consolidated Financial Statements.
MEDICAL & SCIENTIFIC IMAGING
Our Medical & Scientific Imaging segment principally offers products and software in medical applications, high-performance digital
imaging products and software and handheld and vehicle mount computers. These products and solutions are provided through six
U.S.-based and one Canadian-based operating units. For 2010, this segment had net sales of $548.7 million, representing 23.0% of our
total net sales.
Medical Products and Software—we manufacture and sell patient positioning devices for use in radiation oncology and supply
diagnostic and therapeutic disposable products used in ultrasound imaging for minimally invasive medical procedures. we also design
and manufacture a non-invasive instrument for portable ultrasound bladder volume measurement and a video laryngoscope designed
to enable rapid intubation even in the most difficult settings.
Digital Imaging Products and Software—we manufacture and sell extremely sensitive, high-performance charged couple device
(“CCD”) and complementary metal oxide semiconductor (“CMOS”) cameras, detectors and related software for a variety of scientific
and industrial uses, which require high resolution and/or high speed digital video, including transmission electron microscopy and spec-
troscopy applications. we principally sell these products for use within academic, government research, semiconductor, security and
other end-user markets such as biological and material science. They are frequently incorporated into products by original equipment
manufacturers (“OEMs”).
page 4 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 5
Handheld and Vehicle Mount Computers and Software—we manufacture and sell fully rugged handheld and vehicle mount
computers for utility (principally water management) and non-utility markets.
Backlog—Our Medical & Scientific Imaging segment companies have lead times of up to several months on many of their product sales,
although standard products are often shipped within two weeks of receipt of order. Blanket purchase orders are placed by certain OEM
and end-users, with continuing requirements for fulfillment over specified periods of time. The segment’s backlog of firm unfilled orders,
including blanket purchase orders, totaled $103.8 million at December 31, 2010, as compared to $73.7 million at December 31, 2009.
Distribution and Sales—Distribution and sales occur through direct sales personnel, manufacturers’ representatives, value-added resellers
(“VARs”), OEMs and distributors.
ENERGY SYSTEMS AND CONTROLS
Our Energy Systems and Controls segment principally produces control systems, fluid properties testing equipment, industrial valves
and controls, vibration sensors and non-destructive inspection and measurement products and solutions, which are provided through
six U.S.-based operating units. For 2010, this segment had net sales of $503.9 million, representing 21.1% of our total net sales.
Control Systems—we manufacture control systems and panels and provide related engineering and commissioning services for
turbomachinery applications, predominately in energy markets.
Fluid Properties Testing Equipment—we manufacture and sell automated and manual test equipment to determine physical and
elemental properties, such as sulfur and nitrogen content, flash point, viscosity, freeze point and distillation range of liquids and gases
for the petroleum and other industries.
Industrial Valves and Controls—we manufacture and distribute a variety of valves, sensors, switches and control products used on
engines, compressors, turbines and other powered equipment for the oil and gas, pipeline, power generation, marine engine and general
industrial markets. Many of these products are designed for use in hazardous environments.
Sensors and Controls—we manufacture sensors and control equipment including pressure sensors, temperature sensors, measure-
ment instruments and control software for global rubber, plastics and process industries.
Non-destructive Inspection and Measurement Instrumentation—we manufacture non-destructive inspection and measurement
solutions including measurement probes, robotics, vibration sensors, switches and transmitters. These solutions are applied principally
in energy markets. Many of these products are designed for use in hazardous environments.
Backlog—The Energy Systems and Controls operating units’ sales reflect a combination of standard products and large engineered
projects. Standard products generally ship within two weeks of receipt of order, and large engineered projects may have lead times of
several months. As such, backlog may fluctuate depending upon the timing of large project awards. This segment’s backlog of firm
unfilled orders totaled $104.5 million at December 31, 2010 compared to $70.9 million at December 31, 2009.
Distribution and Sales—Distribution and sales occur through direct sales offices, manufacturers’ representatives and distributors.
INDUSTRIAL TECHNOLOGY
Our Industrial Technology segment produces industrial pumps, equipment and consumables for materials analysis, industrial leak testing
equipment, flow measurement and metering equipment and water meter and automatic meter reading (“AMR”) products and systems.
These products and solutions are provided through six U.S.-based and two European-based operating units. For 2010, this segment had
net sales of $607.6 million, representing 25.5% of our total net sales.
Industrial Pumps—we manufacture and distribute a wide variety of pumps. These pumps vary significantly in complexity and in
pumping method employed, which allows for the movement and application of a diverse range of liquids and solids including low and
high viscosity liquids, high solids content slurries and chemicals. Our pumps are used in large and diverse sets of end markets such as
oil and gas, agricultural, water and wastewater, chemical and general industrial.
Materials Analysis Equipment and Consumables—we manufacture and sell equipment and supply various types of consumables
necessary to prepare materials samples for testing and analysis. These products are used mostly within the academic, government
research, electronics, material science, basic materials, steel and automotive end-user markets.
Industrial Leak Testing Equipment—we manufacture and sell products and systems to test for leaks and confirm the integrity of
assemblies and sub-assemblies in automotive, medical and industrial applications.
Flow Measurement Equipment—we manufacture and distribute turbine and positive displacement flow meters, emissions measure-
ment equipment and flow meter calibration products for aerospace, automotive, power generation and other industrial applications.
page 4 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 5
Water Meter and AMR Products and Systems—we manufacture and distribute several classes of water meter products serving the
residential, commercial and industrial water management markets, and several lines of automatic meter reading products and systems
serving these markets.
Backlog—The Industrial Technology operating units’ sales reflect a combination of standard products and specially engineered, application-
specific products. Standard products are typically shipped within two weeks of receipt of order, with certain valve and pump products
shipped on an immediate basis. Application-specific products typically ship within 6 to 12 weeks following receipt of order. However,
larger project orders and blanket purchase orders for certain OEMs may extend shipment for longer periods. This segment’s backlog of
firm unfilled orders, including blanket purchase orders, totaled $114.0 million at December 31, 2010, as compared to $52.1 million at
December 31, 2009.
Distribution and Sales—Distribution and sales occur through direct sales personnel, manufacturers’ representatives and distributors.
RF TECHNOLOGY
Our RF Technology segment provides radio frequency identification (“RFID”) communication technology and software solutions that
are used primarily in toll and traffic systems and processing, security and access control, campus card systems, software-as-a-service in
the freight matching and food industries and metering and remote monitoring applications. These products and solutions are provided
through six U.S.-based and one European-based operating units. This segment had sales of $725.9 million for the year ended December
31, 2010, representing 30.4% of our total net sales.
Toll and Traffic Systems—we manufacture and sell toll tags and monitoring systems as well as provide transaction and violation
processing services for toll and traffic systems to both governmental and private sector entities. In addition, we provide intelligent traffic
systems that assist customers in improving traffic flow and infrastructure utilization.
Card Systems/Integrated Security Solutions—we provide card systems and integrated security solutions to education, healthcare
and other markets. In the education and healthcare markets, we also provide an integrated nutrition management solution.
Software-as-a-Service—we maintain electronic marketplaces that match 1) available capacity of trucking units with the available
loads of freight to be moved from location to location throughout North America and 2) food suppliers, distributors and vendors, primarily
in the perishable food sector.
Metering and Remote Monitoring—we manufacture and sell meter reading, data logging and pressure control products for use in
water, gas and electricity applications. we also provide network monitoring, leakage reduction and pressure control services in water and
gas distribution networks.
Backlog—The RF Technology operating units’ sales reflect a combination of standard products, large engineered projects, and multi-year
operations and maintenance contracts. Standard products generally ship within two weeks of receipt of order, and large engineered projects
may have lead times of several months. As such, backlog may fluctuate depending upon the timing of large project awards. This segment’s
backlog of firm unfilled orders totaled $463.1 million at December 31, 2010 compared to $368.8 million at December 31, 2009.
Distribution and Sales—Distribution and sales occur through direct sales personnel, manufacturers’ representatives and distributors.
MATERIALS AND SUPPLIERS
we believe that most materials and supplies we use are readily available from numerous sources and suppliers throughout the world.
However, some of our components and sub-assemblies are currently available from a limited number of suppliers. Some high-performance
components for digital imaging products can be in short supply and/or suppliers have occasional difficulty manufacturing such components
to our specifications. we regularly investigate and identify alternative sources where possible, and we believe that these conditions equally
affect our competitors. Thus far, supply shortages have not had a material adverse effect on Roper’s sales although delays in shipments
have occurred following such supply interruptions.
ENVIRONMENTAL MATTERS AND OTHER GOVERNMENTAL REGULATION
Our operations and properties are subject to laws and regulations relating to environmental protection, including laws and regulations
governing air emissions, water discharges, waste management and workplace safety. we use, generate and dispose of hazardous substances
and waste in our operations and, as a result, could be subject to potentially material liabilities relating to the investigation and clean-up
of contaminated properties and related claims. we are required to conform our operations and properties to these laws and adapt to
regulatory requirements in all countries as these requirements change. In connection with our acquisitions, we may assume significant
environmental liabilities, some of which we may not be aware of, or may not be quantifiable, at the time of acquisition. In addition, new
page 6 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 7
laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the
imposition of new requirements could increase our costs or subject us to new or increased liabilities.
CUSTOMERS
No customer accounted for 10% or more of net sales for 2010 for any segment or for Roper as a whole.
COMPETITION
Generally, our products and solutions face significant competition, usually from a limited number of competitors. we believe that we are
a leader in most of our markets, and no single company competes with us over a significant number of product lines. Competitors might
be large or small in size, often depending on the life cycle and maturity of the technology employed. we compete primarily on product
quality, performance, innovation, technology, price, applications expertise, distribution channel access and customer service capabilities.
PATENTS AND TRADEMARKS
In addition to trade secrets, unpatented know-how, and other intellectual property rights, we own or license the rights under a number
of patents, trademarks and copyrights relating to certain of our products and businesses. we also employ various methods, including
confidentiality and non-disclosure agreements with employees, to protect our trade secrets and know-how. we believe that our operating
units are not substantially dependent on any single patent, trademark, copyright, or other item of intellectual property or group of patents,
trademarks or copyrights.
EMPLOYEES
As of December 31, 2010, we had approximately 8,050 total employees, with approximately 5,870 located in the United States. Approximately
180 of our employees are subject to collective bargaining agreements. we have not experienced any work stoppages and consider our
relations with our employees to be good.
AVAILABLE INFORMATION
All reports filed electronically by Roper with the United States Securities and Exchange Commission (“SEC”), including our annual
report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and our annual proxy statements, as well as any
amendments to those reports, are accessible at no cost on our website at www.roperind.com. These filings are also accessible on the
SEC’s website at www.sec.gov. You may also read and copy any material Roper files with the SEC at the SEC’s Public Reference Room at
100 F Street, N.E., washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The Company’s Corporate Governance Guidelines; the charters of the Audit Committee, the Compensation
Committee, and the Nominating and Governance Committee; and the Code of Business Conduct & Ethics are also available on the
Company’s website. Any amendment to the Code of Business Conduct and Ethics and any waiver applicable to our directors, executive
officers or senior financial officers will be posted on our website within the time period required by the SEC and the New York Stock
Exchange (the “NYSE”).
we have included the Chief Executive Officer and the Chief Financial Officer certifications regarding Roper’s public disclosure required by
Section 302 of the Sarbanes-Oxley Act of 2002 as Exhibits 31.1 and 31.2 of this report. Additionally, Roper filed with the NYSE the Chief
Executive Officer certification regarding Roper’s compliance with the NYSE’s Corporate Governance Listing Standards (the “Listing
Standards”) pursuant to Section 303A.12(a) of the Listing Standards. The certification was filed with the NYSE on June 29, 2010 and
indicated that the Chief Executive Officer was not aware of any violations of the Listing Standards by the Company.
ITEM 1A. RISK FACTORS
RISKS RELATING TO OUR BUSINESS
Our indebtedness may affect our business and may restrict our operating flexibility.
As of December 31, 2010, we had $1.34 billion in total consolidated indebtedness. In addition, we had $468 million undrawn availability
under our senior unsecured credit facility, as well as the ability to request additional term loans or revolving credit commitments not to
exceed $350 million in aggregate. Our total consolidated debt could increase using this additional borrowing capacity. Subject to restric-
tions contained in our credit facility, we may incur additional indebtedness in the future, including indebtedness incurred to finance, or
which is assumed in connection with, acquisitions.
page 6 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 7
Our level of indebtedness and the debt servicing costs associated with that indebtedness could have important effects on our operations
and business strategy. For example, our indebtedness could:
• place us at a competitive disadvantage relative to our competitors, some of which have lower debt service obligations and greater
financial resources;
• limit our ability to borrow additional funds;
• limit our ability to complete future acquisitions;
• limit our ability to pay dividends;
• limit our ability to make capital expenditures; and
• increase our vulnerability to general adverse economic and industry conditions.
Our ability to make scheduled principal payments of, to pay interest on, or to refinance our indebtedness and to satisfy our other debt
obligations will depend upon our future operating performance, which may be affected by factors beyond our control. In addition, there
can be no assurance that future borrowings or equity financing will be available to us on favorable terms for the payment or refinancing
of our indebtedness. If we are unable to service our indebtedness, our business, financial condition and results of operations would be
materially adversely affected.
Our credit facility contains covenants requiring us to achieve certain financial and operating results and maintain compliance with spec-
ified financial ratios. Our ability to meet the financial covenants or requirements in our credit facility may be affected by events beyond
our control, and we may not be able to satisfy such covenants and requirements. A breach of these covenants or our inability to comply
with the financial ratios, tests or other restrictions contained in our facility could result in an event of default under this facility. Upon
the occurrence of an event of default under our credit facility, and the expiration of any grace periods, the lenders could elect to declare
all amounts outstanding under the facility, together with accrued interest, to be immediately due and payable. If this were to occur, our
assets may not be sufficient to fully repay the amounts due under this facility or our other indebtedness.
Unfavorable changes in foreign exchange rates may significantly harm our business.
Several of our operating companies have transactions and balances denominated in currencies other than the U.S. dollar. Most of these
transactions and balances are denominated in euros, Canadian dollars, British pounds and Danish krone. Sales by our operating companies
whose functional currency is not the U.S. dollar represented approximately 25% of our total net sales for the year ended December 31,
2010 compared to 23% for the year ended December 31, 2009. Unfavorable changes in exchange rates between the U.S. dollar and those
currencies could significantly reduce our reported sales and earnings. At present, we do not hedge against foreign currency risks.
We export a significant portion of our products. Difficulties associated with the export of our products could harm our business.
Sales to customers outside the U.S. by our businesses located in the U.S. account for a significant portion of our net sales. These sales
accounted for approximately 15% of our net sales for the years ended December 31, 2010 and December 31, 2009. we are subject to risks
that could limit our ability to export our products or otherwise reduce the demand for these products in our foreign markets. Such risks
include, without limitation, the following:
• unfavorable changes in or noncompliance with U.S. and other jurisdictions’ export requirements;
• restrictions on the export of technology and related products;
• unfavorable changes in or noncompliance with U.S. and other jurisdictions’ export policies to certain countries;
• unfavorable changes in the import policies of our foreign markets; and
• a general economic downturn in our foreign markets.
The occurrence of any of these events could reduce the foreign demand for our products or could limit our ability to export our products
and, therefore, could have a material negative effect on our future sales and earnings.
Economic, political and other risks associated with our international operations could adversely affect our business.
As of and for the year ended December 31, 2010, approximately 26% of our net sales and 18% of our long-lived assets, excluding goodwill
and intangibles, were attributable to operations outside the U.S. we expect our international operations to contribute materially to our
business for the foreseeable future. Our international operations are subject to varying degrees of risk inherent in doing business outside
the U.S. including, without limitation, the following:
• adverse changes in a specific country’s or region’s political or economic conditions, particularly in emerging markets;
• trade protection measures and import or export requirements;
page 8 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 9
• subsidies or increased access to capital for firms that are currently, or may emerge as, competitors in countries in which we have
operations;
• partial or total expropriation;
• potentially negative consequences from changes in tax laws;
• difficulty in staffing and managing widespread operations;
• differing labor regulations;
• differing protection of intellectual property; and
• unexpected changes in regulatory requirements.
The occurrence of any of these events could materially harm our business.
Our growth strategy includes acquisitions. We may not be able to identify suitable acquisition candidates, complete acquisitions or
integrate acquisitions successfully.
Our future growth is likely to depend to some degree on our ability to acquire and successfully integrate new businesses. we intend to
continue to seek additional acquisition opportunities both to expand into new markets and to enhance our position in existing markets.
There are no assurances, however, that we will be able to successfully identify suitable candidates, negotiate appropriate terms, obtain
financing on acceptable terms, complete proposed acquisitions, successfully integrate acquired businesses or expand into new markets.
Once acquired, operations may not achieve anticipated levels of revenues or profitability.
Acquisitions involve risks, including difficulties in the integration of the operations, technologies, services and products of the acquired
companies and the diversion of management’s attention from other business concerns. Although our management will endeavor to eval-
uate the risks inherent in any particular transaction, there are no assurances that we will properly ascertain all such risks. In addition,
prior acquisitions have resulted, and future acquisitions could result, in the incurrence of substantial additional indebtedness and other
expenses. Future acquisitions may also result in potentially dilutive issuances of equity securities. Difficulties encountered with acquisi-
tions may have a material adverse effect on our business, financial condition and results of operations.
Product liability, insurance risks and increased insurance costs could harm our operating results.
Our business exposes us to product liability risks that are inherent in the design, manufacturing and distribution of our products. In
addition, certain of our products are used in hazardous environments. we currently have product liability insurance; however, we may
not be able to maintain our insurance at a reasonable cost or in sufficient amounts to protect us against losses. we also maintain other
insurance policies, including directors’ and officers’ liability insurance. Our insurance costs increased in prior periods and may continue
to increase in the future. we believe that we have adequately accrued estimated losses, principally related to deductible amounts under
our insurance policies, with respect to all product liability and other claims, based upon our past experience and available facts. However,
a successful product liability or other claim or series of claims brought against us could have a material adverse effect on our business,
financial condition and results of operations. In addition, a significant increase in our insurance costs could have an adverse impact on
our operating results.
Our operating results could be adversely affected by a reduction of business with our large customers.
In some of our businesses, we derive a significant amount of revenue from large customers. The loss or reduction of any significant
contracts with any of these customers could materially reduce our revenue and cash flows. Additionally, many of our customers are
government entities. In many situations, government entities can unilaterally terminate or modify our existing contracts without cause
and without penalty to the government agency.
We face intense competition. If we do not compete effectively, our business may suffer.
we face intense competition from numerous competitors. Our products compete primarily on the basis of product quality, performance,
innovation, technology, price, applications expertise, system and service flexibility and established customer service capabilities. we may
not be able to compete effectively on all of these fronts or with all of our competitors. In addition, new competitors may emerge, and
product lines may be threatened by new technologies or market trends that reduce the value of these product lines. To remain competi-
tive, we must develop new products, respond to new technologies and periodically enhance our existing products in a timely manner.
we anticipate that we may have to adjust prices of many of our products to stay competitive.
Changes in the supply of, or price for, raw materials, parts and components used in our products could affect our business.
The availability and prices of raw materials, parts and components are subject to curtailment or change due to, among other things,
suppliers’ allocations to other purchasers, interruptions in production by suppliers, changes in exchange rates and prevailing price levels.
page 8 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 9
Some high-performance components for digital imaging products may be in short supply and/or suppliers may have occasional difficulty
manufacturing these components to meet our specifications. In addition, some of our products are provided by sole-source suppliers.
Any change in the supply of, or price for, these parts and components, as well as any increases in commodity prices, particularly copper,
could affect our business, financial condition and results of operations.
Environmental compliance costs and liabilities could increase our expenses and adversely affect our financial condition.
Our operations and properties are subject to laws and regulations relating to environmental protection, including air emissions, water
discharges, waste management and workplace safety. These laws and regulations can result in the imposition of substantial fines and
sanctions for violations and could require the installation of pollution control equipment or operational changes to limit pollution emis-
sions and/or decrease the likelihood of accidental hazardous substance releases. we must conform our operations and properties to these
laws and adapt to regulatory requirements in the countries in which we operate as these requirements change.
we use and generate hazardous substances and wastes in our operations and, as a result, could be subject to potentially material liabilities
relating to the investigation and clean-up of contaminated properties and to claims alleging personal injury. we have experienced, and
expect to continue to experience, costs relating to compliance with environmental laws and regulations. In connection with our acquisi-
tions, we may assume significant environmental liabilities, some of which we may not be aware of at the time of acquisition. In addition,
new laws and regulations, 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.
Some of the industries in which we operate are cyclical, and, accordingly, our business is subject to changes in the economy.
Some of the business areas in which we operate are subject to specific industry and general economic cycles. Certain businesses are
subject to industry cycles, including but not limited to, the industrial and energy markets. Accordingly, any downturn in these or other
markets in which we participate could materially adversely affect us. If demand changes and we fail to respond accordingly, our results
of operations could be materially adversely affected in any given quarter. The business cycles of our different operations may occur
contemporaneously. Consequently, the effect of an economic downturn may have a magnified negative effect on our business.
Our intangible assets are valued at an amount that is high relative to our total assets, and a write-off of our intangible assets would
negatively affect our results of operations and total capitalization.
Our total assets reflect substantial intangible assets, primarily goodwill. At December 31, 2010, goodwill totaled $2.73 billion compared
to $2.75 billion of stockholders’ equity, which was 54% of our total assets of $5.07 billion. The goodwill results from our acquisitions,
representing the excess of cost over the fair value of the net assets we have acquired. we assess at least annually whether there has been
an impairment in the value of our intangible assets. If future operating performance at one or more of our business units were to fall
significantly below current levels, if competing or alternative technologies emerge or if business valuations decline, we could incur a
non-cash charge to operating earnings. Any determination requiring the write-off of a significant portion of unamortized intangible
assets would negatively affect our results of operations and total capitalization, the effect of which could be material.
We depend on our ability to develop new products, and any failure to develop or market new products could adversely affect our business.
The future success of our business will depend, in part, on our ability to design and manufacture new competitive products and to enhance
existing products so that our products can be sold with high margins. This product development may require substantial internal invest-
ment. There can be no assurance that unforeseen problems will not occur with respect to the development, performance or market
acceptance of new technologies or products or that we will otherwise be able to successfully develop and market new products. Failure of
our products to gain market acceptance or our failure to successfully develop and market new products could reduce our margins, which
would have an adverse effect on our business, financial condition and results of operations.
Our technology is important to our success and our failure to protect this technology could put us at a competitive disadvantage.
Many of our products rely on proprietary technology; therefore we believe that the development and protection of intellectual property
rights through patents, copyrights, trade secrets, trademarks, confidentiality agreements and other contractual provisions is important
to the future success of our business. Despite our efforts to protect proprietary rights, unauthorized parties or competitors may copy or
otherwise obtain and use our products or technology. Current and future actions to enforce these rights may result in substantial costs
and diversion of resources and we make no assurances that any such actions will be successful.
Any business disruptions due to political instability, armed hostilities, incidents of terrorism or natural disasters could adversely
impact our financial performance.
page 10 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 11
If terrorist activity, armed conflict, political instability or natural disasters occur in the U.S. or other locations, such events may negatively
impact our operations, cause general economic conditions to deteriorate or cause demand for our products to decline. A prolonged
economic slowdown or recession could reduce the demand for our products, and therefore, negatively affect our future sales and profits.
Any of these events could have a significant impact on our business, financial condition or results of operations.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None
ITEM 2. PROPERTIES
Roper’s corporate offices, consisting of 22,000 square feet of leased space, are located at 6901 Professional Parkway East, Sarasota, Florida.
we have established 114 principal locations around the world to support our operations, of which 50 are manufacturing facilities, and the
remaining 64 locations provide sales, service and administrative support functions. we consider our facilities to be in good operating
condition and adequate for their present use and believe that we have sufficient capacity to meet our anticipated operating requirements.
The following table summarizes the size, location and usage of our principal properties as of December 31, 2010.
Segment
Industrial Technology
Energy Systems & Controls
Medical & Scientific Imaging
RF Technology
Region
U.S.
Canada
Europe
Asia
Mexico
U.S.
Canada
Europe
Asia
U.S.
Canada
Europe
U.S.
Canada
Europe
Office
Leased
Office & Manufacturing
Leased
Owned
(amounts in thousands of square feet)
53
36
31
9
—
—
—
26
11
86
—
8
818
11
17
294
—
88
—
60
289
44
20
30
212
92
30
142
—
—
524
—
479
—
—
—
—
128
34
127
—
—
—
—
16
ITEM 3. LEGAL PROCEEDINGS
we are defendants in various lawsuits involving product liability, employment practices and other matters, none of which we believe will
have a material adverse effect on our consolidated financial position or results of operations. The majority of such claims are subject to
insurance coverage.
we and/or one of our subsidiaries are named as defendants, along with many other companies, in asbestos-related personal injury or
wrongful death actions. The allegations in these actions are vague, general and speculative. Given the state of these claims, it is not
possible to determine the potential liability, if any.
ITEM 4. REMOVED AND RESERVED
page 10 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 11
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
Our common stock trades on the NYSE under the symbol “ROP”. The table below sets forth the range of high and low sales prices for our
common stock as reported by the NYSE as well as cash dividends declared during each of our 2010 and 2009 quarters.
2010
4th Quarter
3rd Quarter
2nd Quarter
1st Quarter
2009
4th Quarter
3rd Quarter
2nd Quarter
1st Quarter
High
Low
Declared
Cash Dividends
$78.43
$64.98
65.59
63.91
58.34
54.78
55.47
50.08
$55.04
$47.50
53.05
47.99
45.73
42.27
41.03
36.96
$0.1100
0.0950
0.0950
0.0950
$0.0950
0.0825
0.0825
0.0825
Based on information available to us and our transfer agent, we believe that as of February 18, 2011 there were 231 record holders of our
common stock.
Dividends—we have declared a cash dividend in each quarter since our February 1992 initial public offering and we have annually
increased our dividend rate since our initial public offering. In November 2010, our Board of Directors increased the quarterly dividend
paid January 28, 2011 to $0.110 per share from $0.095 per share, an increase of 15.8%. The timing, declaration and payment of future
dividends will be at the sole discretion of our Board of Directors and will depend upon our profitability, financial condition, capital needs,
future prospects and other factors deemed relevant by our Board of Directors.
Recent Sales of Unregistered Securities—In 2010, there were no sales of unregistered securities.
page 12 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 13
Performance Graph—This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorpo-
rated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act.
The following graph compares, for the five-year period ended December 31, 2010, the cumulative total stockholder return for the Company’s
common stock, the Standard and Poor’s 500 Stock Index (the “S&P 500”) and the Standard and Poor’s 500 Industrials Index (the “S&P
500 Industrials”). Measurement points are the last trading day of each of our fiscal years ended December 31, 2005, December 31, 2006,
December 31, 2007, December 31, 2008, December 31, 2009 and December 31, 2010. The graph assumes that $100 was invested on
December 31, 2005 in the common stock of the Company, the S&P 500 and the S&P 500 Industrials and assumes reinvestment of any
dividends. The stock price performance on the following graph is not necessarily indicative of future stock price performance.
Roper Industries, Inc.
S&P 500
S&P 500 Industrials
12/31/05
12/31/06
12/31/07
12/31/08
12/31/09
12/31/10
100.00
100.00
100.00
127.83
115.80
113.29
159.85
122.16
126.92
111.56
76.96
76.25
135.59
97.33
92.21
199.18
111.99
116.86
250
200
150
100
50
0
2005
2006
2007
2008
2009
2010
Roper Industries, Inc.
S&P 500
S&P Industrials
The information set forth in Item 12 “Securities Authorized for Issuance under Equity Compensation Plans” is incorporated herein
by reference.
page 12 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 13
ITEM 6. SELECTED FINANCIAL DATA
You should read the table below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and our Consolidated Financial Statements and related notes included in this Annual Report (amounts in thousands, except
per share data).
Operations data:
Net sales
Gross profit
Income from operations
Net earnings
Per share data:
Basic earnings per share
Diluted earnings per share
Dividends declared
Balance sheet data:
working capital
Total assets
Long-term debt, less current portion
Stockholders’ equity
Years Ended December 31,
2010(1)
2009(2)
2008(3)
2007(4)
2006(5)
$ 2,386,112
1,275,126
514,294
322,580
$ 2,049,668
1,043,138
395,396
239,481
$ 2,306,371
1,188,288
486,161
281,874
$ 2,102,049
1,058,395
438,354
245,705
$ 1,700,734
861,325
337,653
189,285
$
3.42
3.34
0.3950
$
2.64
2.58
0.3425
$
3.15
3.01
0.3000
$
2.78
2.64
0.2675
$
2.18
2.08
0.2414
$ 458,446
5,069,524
1,247,703
2,750,907
$ 392,734
4,327,736
1,040,962
2,421,490
$ 239,400
3,971,538
1,033,689
2,003,934
$ 291,047
3,453,184
727,489
1,794,643
$
53,946
2,995,359
726,881
1,496,004
(1) Includes results from the acquisitions of Heartscape, Inc. from February 22, 2010 and iTradeNetwork, Inc. from July 27, 2010.
(2) Includes results from the acquisitions of United Toll Systems, LLC. from October 30, 2009 and Verathon, Inc. from December 3, 2009.
(3) Includes results from the acquisitions of CBORD Holdings Corp. from February 20, 2008, Chalwyn Ltd. from June 18, 2008, Getloaded.com, LLC
from July 17, 2008, Horizon Software Holdings, Inc. from August 27, 2008 and Technolog Holdings Ltd. from September 10, 2008.
(4) Includes results from the acquisitions of JLT Mobile Computers, Inc. from February 21, 2007, DJ Instruments from February 28, 2007, Roda Deaco
Valve, Ltd. from March 22, 2007, Dynamic Instruments, Inc. from June 21, 2007, and Black Diamond Advanced Technology, LLC from September
24, 2007.
(5) Includes results from the acquisitions of Sinmed Holding International BV from April 5, 2006, Intellitrans, LLC from April 26, 2006, Lumenera
Corporation from July 25, 2006, AC Analytic Controls BV from August 8, 2006 and Dynisco Parent, Inc. from November 30, 2006.
page 14 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 15
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion in conjunction with “Selected Financial Data” and our Consolidated Financial Statements and
related Notes included in this Annual Report.
OVERVIEw
we are a diversified growth company that designs, manufactures and distributes energy systems and controls, medical and scientific
imaging products and software, industrial technology products and radio frequency products and services. we market these products and
services to selected segments of a broad range of markets including RF applications, medical, water, energy, research, education, food and
food services, security and other niche markets.
we pursue consistent and sustainable growth in earnings by emphasizing continuous improvement in the operating performance of
our existing businesses and by acquiring other carefully selected businesses. Our acquisitions have represented both bolt-ons and new
strategic platforms. we strive for high cash and earnings returns from our acquisition investments. On February 22, 2010, we purchased
the assets of Heartscape, Inc., including a technology with the capability to improve the speed and accuracy of detecting heart attacks.
On July 27, 2010, we purchased iTradeNetwork, Inc. (“iTrade”), a global provider of software-as-a-service (“SaaS”) based trading network
and business intelligence solutions primarily to the perishable food market.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Our Consolidated Financial Statements are prepared in conformity with generally accepted accounting principles in the United States,
(“GAAP”). A discussion of our significant accounting policies can also be found in the notes to our Consolidated Financial Statements for
the year ended December 31, 2010 included in this Annual Report.
GAAP offers acceptable alternative methods for accounting for certain issues affecting our financial results, such as determining inventory
cost, depreciating long-lived assets and recognizing revenue. we have not changed the application of acceptable accounting methods or
the significant estimates affecting the application of these principles in the last three years in a manner that had a material effect on our
financial statements.
The preparation of financial statements in accordance with GAAP requires the use of estimates, assumptions, judgments and interpreta-
tions that can affect the reported amounts of assets, liabilities, revenues and expenses, the disclosure of contingent assets and liabilities
and other supplemental disclosures.
The development of accounting estimates is the responsibility of our management. Our management discusses those areas that require
significant judgments with the audit committee of our Board of Directors. The audit committee has reviewed all financial disclosures
in our annual filings with the SEC. Although we believe the positions we have taken with regard to uncertainties are reasonable, others
might reach different conclusions and our positions can change over time as more information becomes available. If an accounting
estimate changes, its effects are accounted for prospectively or through a cumulative catch up adjustment.
Our most significant accounting uncertainties are encountered in the areas of accounts receivable collectibility, inventory valuation,
future warranty obligations, revenue recognition (percentage-of-completion), income taxes and goodwill and indefinite-lived asset analyses.
These issues, except for income taxes, which are not allocated to our business segments, affect each of our business segments. These
issues are evaluated using a combination of historical experience, current conditions and relatively short-term forecasting.
page 14 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 15
Accounts receivable collectibility is based on the economic circumstances of customers and credits given to customers after shipment
of products, including in certain cases credits for returned products. Accounts receivable are regularly reviewed to determine customers
who have not paid within agreed upon terms, whether these amounts are consistent with past experiences, what historical experience
has been with amounts deemed uncollectible and the impact that current and near-term forecast economic conditions might have on
collection efforts in general and with specific customers. The returns and other sales credit allowance is an estimate of customer returns,
exchanges, discounts or other forms of anticipated concessions and is treated as a reduction in revenue. The returns and other sales
credits histories are analyzed to determine likely future rates for such credits. At December 31, 2010, our allowance for doubtful accounts
receivable was $7.9 million and our allowance for sales returns and sales credits was $2.4 million, for a total of $10.3 million, or 2.6% of
total gross accounts receivable. This percentage is influenced by the risk profile of the underlying receivables, and the timing of write-
offs of accounts deemed uncollectible. The total allowance at December 31, 2010 was $0.8 million lower than at December 31, 2009. The
allowance will continue to fluctuate as a percentage of sales based on specific identification of allowances needed due to changes in our
business as well as the write-off of uncollectible receivables.
we regularly compare inventory quantities on hand against anticipated future usage, which we determine as a function of historical
usage or forecasts related to specific items in order to evaluate obsolescence and excessive quantities. when we use historical usage, this
information is also qualitatively compared to business trends to evaluate the reasonableness of using historical information as an esti-
mate of future usage. At December 31, 2010, inventory reserves for excess and obsolete inventory were $32.5 million, or 15.4% of gross
inventory cost, as compared to $29.0 million, or 14.0% of gross inventory cost, at December 31, 2009. The inventory reserve as a percent
of gross inventory cost will continue to fluctuate based upon specific identification of reserves needed based upon changes in our business
as well as the physical disposal of obsolete inventory.
Most of our sales are covered by warranty provisions that generally provide for the repair or replacement of qualifying defective items
for a specified period after the time of sale, typically 12 months. Future warranty obligations are evaluated using, among other factors,
historical cost experience, product evolution and customer feedback. Our expense for warranty obligations was less than 1% of net sales
for each of the years ended December 31, 2010, 2009, and 2008.
Revenues related to the use of the percentage-of-completion method of accounting are dependent on total costs incurred compared with
total estimated costs for a project. During the year ended December 31, 2010, we recognized revenue of approximately $131.0 million
using this method, primarily for major turn-key, longer term toll and traffic and energy projects. Approximately $142.5 million and
$127.9 million of revenue was recognized using this method during the years ended December 31, 2009 and December 31, 2008, respec-
tively. At December 31, 2010, approximately $157.7 million of revenue related to unfinished percentage-of-completion contracts had yet
to be recognized. Contracts accounted for under this method are generally not significantly different in profitability from revenues
accounted for under other methods.
Income taxes can be affected by estimates of whether and within which jurisdictions future earnings will occur and if, how and when cash
is repatriated to the United States, combined with other aspects of an overall income tax strategy. Additionally, taxing jurisdictions could
retroactively disagree with our tax treatment of certain items, and some historical transactions have income tax effects going forward.
Accounting rules require these future effects to be evaluated using current laws, rules and regulations, each of which can change at any
time and in an unpredictable manner. During 2010, our effective income tax rate was 28.1%, which was lower than the 2009 rate of 29.5%
due primarily to certain foreign tax planning initiatives and an increase in the Section 199 qualifying production activities deduction.
we account for goodwill in a purchase business combination as the excess of the cost over the fair value of net assets acquired. Business
combinations can also result in other intangible assets being recognized. Amortization of intangible assets, if applicable, occurs over
their estimated useful lives. Goodwill, which is not amortized, is tested for impairment using a two-step method on an annual basis
(or an interim basis if an event occurs that might reduce the fair value of a reporting unit below its carrying value). Total goodwill includes
25 different business components with individual amounts ranging from zero to approximately $536 million. Identifiable intangible
assets that are determined to have an indefinite useful economic life are not amortized, but separately tested for impairment on an
annual basis using a one-step fair value based approach. we conduct these reviews for all of our reporting units during the fourth quarter
of the fiscal year. No impairment resulted from the annual reviews performed in 2010.
page 16 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 17
RESULTS OF OPERATIONS
The following table sets forth selected information for the years indicated. Dollar amounts are in thousands and percentages are of
net sales.
Net sales:
Industrial Technology
Energy Systems and Controls(1)
Medical & Scientific Imaging(2)
RF Technology(3)
Total
Gross profit:
Industrial Technology
Energy Systems and Controls
Medical & Scientific Imaging
RF Technology
Total
Operating profit:
Industrial Technology
Energy Systems and Controls
Medical & Scientific Imaging
RF Technology
Total
Corporate administrative expenses
Income from continuing operations
Interest expense
Loss on extinguishment of debt
Other income
Income from continuing operations before taxes
Income taxes
Net earnings
Years Ended December 31,
2010
2009
2008
$ 607,564
$ 536,219
$ 687,622
503,897
548,718
725,933
440,919
354,776
717,754
548,214
375,542
694,993
$ 2,386,112
$ 2,049,668
$ 2,306,371
51.0%
47.6%
48.5%
53.7
61.3
49.4
53.4
53.1
56.5
49.3
50.9
53.8
55.0
50.8
51.5
26.7%
23.1%
25.9%
23.9
23.8
20.8
23.6
(2.1)%
21.6
(2.8)
—
—
18.8
(5.3)
13.5%
21.0
20.9
21.5
21.7
23.1
19.9
23.0
23.4
(2.4)%
(2.3)%
19.3
(2.9)
—
0.2
16.6
(4.9)
21.1
(2.6)
(0.1)
0.2
18.6
(6.4)
11.7%
12.2%
(1) Includes results from the acquisitions of Tech-Pro from March 20, 2008, and Chalwyn from June 18, 2008.
(2) Includes results from the acquisition of Verathon from December 3, 2009.
(3) Includes results from the acquisitions of CBORD from February 20, 2008, Getloaded from July 17, 2008, Horizon from August 27, 2008, Technolog from September 10,
2008, UTS from October 30, 2009 and iTrade from July 27, 2010.
page 16 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 17
YEAR ENDED DECEMBER 31, 2010 COMPARED TO YEAR ENDED DECEMBER 31, 2009
Net sales for the year ended December 31, 2010 were $2.39 billion as compared to sales of $2.05 billion for the year ended December 31,
2009, an increase of 16.4%. The increase was the result of internal sales growth of 7.8% as well as a full year of sales from our 2009
acquisitions of UTS and Verathon and five months of sales from iTrade. Net sales of these acquisitions accounted for approximately $179
million of additional sales in 2010 over 2009.
Our Medical & Scientific Imaging segment reported a $193.9 million or 54.7% increase in net sales for the year ended December 31, 2010
over the year ended December 31, 2009. Acquisitions added $147.9 million in sales, while organic sales increased 12.5% due to broad-
based increases in medical, imaging and handheld computer markets. The impact from foreign exchange was a positive 1.0%, resulting in
internal growth of 13.5%.
In our Energy Systems and Controls segment, net sales for the year ended December 31, 2010 increased by $63.0 million or 14.3% over
the year ended December 31, 2009. The increase in sales was due to broad-based recovery in the markets served by the segment which led
to increased demand for our instruments, valves and sensors sold into these markets.
Net sales for our Industrial Technology segment increased by $71.3 million or 13.3% for the year ended December 31, 2010 over the year
ended December 31, 2009. The increase was due to a broad based economic recovery in the industrial end markets, strong sales growth
in our Neptune water meter business and increased sales in our materials testing businesses as customer manufacturing facilities which
had experienced slowdowns or temporary shutdowns in 2009 came back on line or increased production.
In our RF Technology segment, net sales for the year ended December 31, 2010 increased by $8.2 million or 1.1% over the year ended
December 31, 2009. Internal sales decreased 3.2% due to delays in transportation projects due to temporary reductions in state and local
governmental funding. Partial year results from the acquisition of iTrade and full-year results of UTS added 4.3%.
In 2009, in order to mitigate the effects of the weakened global economy on our financial results, we committed to certain severance
and related cost-control actions. The cost of these actions during the year ended December 31, 2009 totaled $12.4 million, $4.1 million of
which was recorded as cost of goods sold and the remaining $8.3 million as selling, general and administrative (“SG&A”) expense. As of
December 31, 2010, $12.0 million in cash payments had been made, with the remaining $0.4 million reported as accrued liabilities, which
are expected to be paid in 2011. we had no additional material severance and related cost-control actions in 2010.
Our overall gross profit percentage was 53.4% for the year ended December 31, 2010, as compared to 50.9% for the year ended December
31, 2009. Our Industrial Technology and Energy Systems and Controls segments both experienced higher gross margins due to higher
sales volume while maintaining a relatively flat cost structure. Medical & Scientific Imaging segment gross margins increased primarily
due to additional sales from medical products which have a higher gross margin. Our RF Technology segment gross margins were rela-
tively unchanged.
Selling, general and administrative expenses increased $113.1 million to $760.8 million in 2010 as compared to $647.7 million in 2009,
while increasing as a percentage of net sales to 31.9% for the year ended December 31, 2010 as compared to 31.6% for the year ended
December 31, 2009. The full-year inclusion of Verathon accounted for $72 million of the increase. In addition, our research and develop-
ment spending increased $19 million as we continued to invest in new product development.
Interest expense increased $8.0 million, or 13.6%, for the year ended December 31, 2010 compared to the year ended December 31, 2009.
The increase is due primarily to higher interest rates in the current year, which accounted for approximately $5 million of the increase,
and a higher average debt balance throughout 2010.
Other income for the year ended December 31, 2010 was $0.6 million, which was primarily due to gain on sale of assets offset by foreign
exchange losses. Other income for the year ended December 31, 2009 was $3.5 million, primarily due to a pre-tax gain of $4.1 million
related to the sale of certain assets of our satellite communications business, partially offset by a $0.4 million pre-tax debt extinguishment
charge for the early repayment of our term loan and foreign exchange losses at our non-U.S.-based companies.
During 2010, our effective income tax rate was 28.1% versus 29.5% in 2009. This decrease was due primarily to certain foreign tax plan-
ning initiatives and an increase in the Section 199 qualifying production activities deduction.
At December 31, 2010, the functional currencies of our European subsidiaries were weaker, and the Canadian dollar stronger, against the
U.S. dollar compared to currency exchange rates at December 31, 2009. The net result of these changes led to a decrease in the foreign
exchange component of comprehensive earnings of $19.8 million in the year ending December 31, 2010. Approximately $15.5 million of
these adjustments related to goodwill and are not expected to directly affect our projected future cash flows. For the entire year of 2010,
operating profit decreased by less than 0.5% due to fluctuations in non-U.S. currencies.
page 18 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 19
The following table summarizes our net order information for the years ended December 31, 2010 and 2009 (dollar amounts in thousands).
Industrial Technology
Energy Systems and Controls
Medical & Scientific Imaging
RF Technology
Total
2010
2009
Change
$ 669,882
$ 528,208
538,861
578,957
748,536
427,003
349,132
719,666
$ 2,536,236
$ 2,024,009
26.8%
26.2
65.8
4.0
25.3%
The increase in orders was due to internal growth of 15.8%, as well as orders from acquisitions which added $195 million. Our Industrial
Technology and Energy Systems and Controls segments experienced strong internal growth throughout 2010, as did our Medical &
Scientific Imaging segment which also experienced an increase of $159 million due to 2009 acquisitions. In our RF Technology segment,
internal orders decreased by 1.1%, which was more than offset by acquisition growth.
The following table summarizes order backlog information at December 31, 2010 and 2009 (dollar amounts in thousands). Our policy is
to include in backlog only orders scheduled for shipment within twelve months.
Industrial Technology
Energy Systems and Controls
Medical & Scientific Imaging
RF Technology
Total
2010
2009
Change
$ 113,981
$
52,079
118.9%
104,466
103,769
463,115
70,901
73,747
368,762
47.3
40.7
25.6
$ 785,358
$ 565,489
38.9%
YEAR ENDED DECEMBER 31, 2009 COMPARED TO YEAR ENDED DECEMBER 31, 2008
Net sales for the year ended December 31, 2009 were $2.05 billion as compared to sales of $2.31 billion for the year ended December 31,
2008, a decrease of 11.1%. This decrease was the result of the worldwide economic slump experienced throughout 2009. Our 2009 results
included a full year of sales from our 2008 acquisitions of CBORD, Tech-Pro, Chalwyn, Getloaded, Horizon and Technolog. These results
also included two months from UTS and one month from Verathon. Net sales of these acquisitions accounted for approximately $79 mil-
lion of additional sales in 2009 over 2008 that was offset by a decrease in sales of our other business of $335 million, or 15%, which
includes negative organic growth of 14% and a 1% negative foreign exchange impact.
In order to mitigate the effects of the weakened global economy on our financial results, we committed to certain severance and related
cost-control actions during the year ended December 31, 2009. The cost of these actions totaled $12.4 million, $4.1 million of which was
recorded as cost of goods sold and the remaining $8.3 million as selling, general and administrative (“SG&A”) expense. As of December
31, 2010, $12.0 million in cash payments had been made, with the remaining $0.4 million reported as accrued liabilities, which are
expected to be paid in 2011. we had no additional material severance and related cost-control actions in 2010. The impact of these costs
on our business segment results is included below.
Our Medical & Scientific Imaging segment reported a $20.8 million or 5.5% decrease in net sales for the year ended December 31, 2009
over the year ended December 31, 2008. Organic sales decreased 7.3% due to lower shipments to research and imaging markets and the
impact from foreign exchange was negative 1.6%. These declines were slightly offset by one month of sales from Verathon.
In our Energy Systems and Controls segment, net sales for the year ended December 31, 2009 decreased by $107.3 million or 19.6% over
the year ended December 31, 2008. we experienced negative internal growth of approximately $108.5 million or 19.9%, which includes a
2.2% negative foreign exchange impact. The decrease in sales was due to broad-based weakness in the markets serviced by the segment
which led to reduced demand for our instruments, valves and sensors sold into these markets.
Net sales for our Industrial Technology segment decreased by $151.4 million or 22.0% for the year ended December 31, 2009 over the
year ended December 31, 2008. The decrease was due to a generally weak economy, fewer projects for automatic meter reading deploy-
ment at Neptune and the slowdown or temporary shutdowns of many customer manufacturing facilities which impacted our materials
testing business.
In our RF Technology segment, net sales for the year ended December 31, 2009 increased by $22.8 million or 3.3% over the year ended
December 31, 2008. Internal sales decreased 6.2% due to weakness in security markets and lower hardware and tag sales related to trans-
portation projects. Partial year results from the acquisition of UTS and full-year results of 2008 acquisitions added 9.3%.
page 18 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 19
Our overall gross profit percentage was 50.9% for the year ended December 31, 2009, as compared to 51.5% for the year ended December
31, 2008. The $4.1 million in restructuring charges included in cost of goods sold represented 0.2% as a percentage of net sales in 2009,
as our restructuring and other cost containment actions at the business unit level nearly offset the negative operating leverage on
decreased sales. Our Industrial Technology and Energy Systems and Controls segments both experienced lower gross margins due to the
decline in sales as a result of weakness in their end markets. Medical & Scientific Imaging segment gross margins increased primarily
due to favorable product mix, lower costs and favorable leverage due to a record fourth quarter sales performance. Our RF Technology
segment gross margins were negatively impacted by an unfavorable product mix due to higher service revenue and lower hardware ship-
ments in transportation end markets.
Selling, general and administrative expenses decreased $54.4 million to $647.7 million in 2009 as compared to $702.1 million in 2008,
while increasing as a percentage of net sales to 31.6% for the year ended December 31, 2009 as compared to 30.4% for the year ended
December 31, 2008. The change is primarily due to negative operating leverage on lower sales. Included in the 2009 expense were
restructuring costs of $8.3 million.
Interest expense decreased $2.3 million, or 3.7%, for the year ended December 31, 2009 compared to the year ended December 31, 2008,
primarily due to the inclusion in 2008 of amortization of the debt discount on our convertible notes, which ceased on January 15, 2009.
Other income for the year ended December 31, 2009 was $2.9 million, which was primarily due to a pre-tax gain of $4.1 million related to
the sale of certain assets of our satellite communications business, partially offset by a $0.4 million pre-tax debt extinguishment charge
for the early repayment of our term loan and foreign exchange losses at our non-U.S.-based companies. Other income for the year ended
December 31, 2008 was $3.5 million, primarily due to foreign exchange gains at our non-U.S.-based companies, offset by a $3.1 million
pre-tax debt extinguishment charge in the third quarter of 2008 related to the refinancing of our credit facility.
During 2009, our effective income tax rate was 29.5% versus 34.3% in 2008. This decrease was due primarily to certain foreign tax plan-
ning initiatives, our decision to permanently reinvest prior earnings in certain foreign jurisdictions, the release of reserves related to
uncertain tax provisions and an approximately $1.8 million discrete benefit related to the resolution of a tax item in a foreign jurisdiction.
At December 31, 2009, the functional currencies of our European and Canadian subsidiaries were stronger against the U.S. dollar compared
to currency exchange rates at December 31, 2008. The net result of these changes led to an increase in the foreign exchange component
of comprehensive earnings of $42.4 million in the year ending December 31, 2009. Approximately $28.2 million of these adjustments
related to goodwill and are not expected to directly affect our projected future cash flows. For the entire year of 2009, operating profit
decreased by approximately 1% due to fluctuations in non-U.S. currencies.
The following table summarizes our net order information for the years ended December 31, 2009 and 2008 (dollar amounts in thousands).
Industrial Technology
Energy Systems and Controls
Medical & Scientific Imaging
RF Technology
Total
2009
2008
Change
$ 528,208
$ 656,176
427,003
349,132
719,666
541,472
383,543
722,670
(19.5)%
(21.1)
(9.0)
(0.4)
$ 2,024,009
$ 2,303,861
(12.1)%
The decrease in orders is due to overwhelming weaknesses in world markets, however, order backlog as of December 31, 2009, only
decreased by 4.1% as compared to December 31, 2008. This was due primarily to a fourth quarter order increase in our Medical &
Scientific Imaging and RF Technology segments.
The following table summarizes order backlog information at December 31, 2009 and 2008 (dollar amounts in thousands). Our policy
is to include in backlog only orders scheduled for shipment within twelve months.
Industrial Technology
Energy Systems and Controls
Medical & Scientific Imaging
RF Technology
Total
2009
2008
Change
$ 52,079
$
59,128
70,901
73,747
368,762
84,997
80,020
365,669
$ 565,489
$ 589,814
(11.9)%
(16.6)
(7.8)
0.8
(4.1)%
page 20 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 21
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Selected cash flows for the years ended December 31, 2010, 2009 and 2008 are as follows (in millions):
Cash provided by/(used in):
Operating activities
Investing activities
Financing activities
2010
2009
2008
$ 499.5
$ 367.5
$ 434.4
(563.3)
167.6
(374.2)
(13.6)
(739.3)
187.9
Operating Activities—The increase in cash provided by operating activities in 2010 was primarily due to higher earnings over the prior
year, increased compensation-related accruals related to higher income levels in 2010 and increased intangible amortization related to
recent acquisitions.
Investing Activities—Cash used by investing activities during 2010, 2009, and 2008 were primarily business acquisitions.
Financing Activities—Cash provided by financing activities during each of these years was primarily debt borrowings for acquisitions
partially offset by debt payments made using cash from operations and in 2009 also included $121 million of proceeds from issuance of
common stock, net of issuance costs. Cash used by financing activities in all periods was primarily debt repayments.
Net working capital (current assets, excluding cash, less total current liabilities, excluding debt) was $281.4 million at December 31, 2010
compared to $337.8 million at December 31, 2009. we acquired negative net working capital of $5.9 million through business acquisi-
tions during 2010.
Total debt was $1.3 billion at December 31, 2010 (32.8% of total capital) compared to $1.2 billion at December 31, 2009 (32.3% of total
capital). Our increased debt at December 31, 2010 compared to December 31, 2009 was due to borrowings for 2010 acquisitions, partially
offset by debt payments made using cash from operations.
Our senior unsecured credit facility originally consisted of a two-year $350 million term loan and a five-year $750 million revolving loan;
however, the term loan portion was repaid in September 2009 and cannot be reborrowed. The weighted-average interest rate on the
revolver borrowings under the facility at December 31, 2010 was 1.56%. At December 31, 2010, our debt consisted of $91 million in senior
subordinated convertible notes due in 2034, $500 million of senior notes due 2013, $500 million of senior notes due 2019, and $230
million outstanding under the revolving loan. In addition, we had $6.0 million of other debt in the form of capital leases and several
smaller facilities that allow for borrowings or the issuance of letters of credit in foreign locations to support our non-U.S. businesses. The
Company had $55.3 million of outstanding letters of credit at December 31, 2010, of which $51.9 million were covered by our lending
group, thereby reducing its remaining revolving credit capacity commensurately. we expect that our available borrowing capacity, com-
bined with existing cash balances and cash flows expected to be generated from existing businesses, will be sufficient to fund normal
operating requirements and finance additional acquisitions.
we were in compliance with all debt covenants related to our credit facilities throughout the year ended December 31, 2010.
Capital expenditures of $28.6 million, $25.9 million and $30.0 million were incurred during 2010, 2009, and 2008, respectively. In the
future, we expect capital expenditures as a percentage of sales to be between 1.0% and 1.5% of annual net sales.
DESCRIPTION OF CERTAIN INDEBTEDNESS
Senior Unsecured Credit Facility—On July 7, 2008, the Company entered into a senior unsecured credit facility with JPMorgan Chase
Bank, N.A., as administrative agent, and a syndicate of lenders. The credit facility is composed of a five-year $750 million revolving credit
facility maturing July 7, 2013 and, as originally issued, a $350 million term loan facility originally maturing July 7, 2010. The $350 million
term loan was repaid early in September 2009. The Company may also, subject to compliance with specified conditions, request additional
term loans or revolving credit commitments in an aggregate amount not to exceed $350 million.
The credit facility contains affirmative and negative covenants which, among other things, limit our ability to incur new debt, prepay
subordinated debt, make certain investments and acquisitions, sell assets and grant liens, make restricted payments (including the payment
of dividends on our common stock) and capital expenditures, or change our line of business. we also are subject to financial covenants
which require us to limit our consolidated total leverage ratio and to maintain a consolidated interest coverage ratio. The most restrictive
covenant is the consolidated total leverage ratio which is limited to 3.5.
page 20 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 21
Senior Notes Due 2019—In September 2009, we completed a public offering of $500 million aggregate principal amount of 6.25% senior
unsecured notes due September 2019. Net proceeds of $496 million were used to pay off our $350 million term loan originally due July
2010 and the outstanding revolver balance under our credit facility. we recorded a $0.4 million non-cash debt extinguishment charge
related to the early repayment of the term loan portion of the facility.
The notes bear interest at a fixed rate of 6.25% per year, payable semi-annually in arrears on March 1 and September 1 of each year,
beginning March 1, 2010.
we may redeem some of all of these notes at any time or from time to time, at 100% of their principal amount, plus a make-whole premium
based on a spread to U.S. Treasury securities.
The notes are unsecured senior obligations of the Company and rank equally in right of payment with all of our existing and future unse-
cured and unsubordinated indebtedness. The notes are effectively subordinated to any of our existing and future secured indebtedness to
the extent of the value of the collateral securing such indebtedness. The notes are not guaranteed by any of our subsidiaries and are effec-
tively subordinated to all existing and future indebtedness and other liabilities of our subsidiaries.
Senior Notes Due 2013—On August 6, 2008, we issued $500 million aggregate principal amount of 6.625% senior notes due August 15,
2013. These notes bear interest at a fixed rate of 6.625% per year, payable semi-annually in arrears on February 15 and August 15 of each
year, beginning February 15, 2009. The interest payable on the notes is subject to adjustment if either Moody’s Investors Service or
Standard & Poor’s Ratings Services downgrades the rating assigned to the notes.
we may redeem some or all of the notes at any time or from time to time, at 100% of their principal amount plus a make-whole premium
based on a spread to U.S. Treasury securities as described in the indenture relating to the notes.
The notes are unsecured senior obligations of the Company and rank equally in right of payment with all of the Company’s existing
and future unsecured and unsubordinated indebtedness. The notes are effectively subordinated to any of the Company’s existing and
future secured indebtedness to the extent of the value of the collateral securing such indebtedness. The notes are not guaranteed by
any of the Company’s subsidiaries and are effectively subordinated to all existing and future indebtedness and other liabilities of the
Company’s subsidiaries.
During 2009, we entered into an aggregate notional amount of $500 million in interest rate swaps designated as fair value hedges, which
effectively changed our $500 million senior notes due 2013 with a fixed interest rate of 6.625% to a variable-rate obligation at a weighted-
average spread of 4.377% plus the three-month London Interbank Offered Rate (“LIBOR”). Due to the application of fair value hedge
accounting for the swaps, the notes are shown in the balance sheet net of a $14.1 million fair value adjustment at December 31, 2010 and
$(3.2) million at December 31, 2009.
Senior Subordinated Convertible Notes—In December 2003, we issued $230 million of senior subordinated convertible notes at an origi-
nal issue discount of 60.498%, resulting in an effective yield of 3.75% per year to maturity. Interest on the notes was payable semi-annually,
beginning July 15, 2004, until January 15, 2009, after which cash interest will not be paid on the notes prior to maturity unless contingent
cash interest becomes payable. Since January 15, 2009, interest is recognized at the effective rate of 3.75% and represents accrual of origi-
nal issue discount, excluding any contingent cash interest that may become payable. we will pay contingent cash interest to the holders
of the notes during any six-month period commencing after January 15, 2009 if the average trading price of a note for a five trading-day
measurement period preceding the applicable six-month period equals 120% or more of the sum of the issue price, accrued original issue
discount and accrued cash interest, if any, for such note. The contingent cash interest payable per note in respect of any six-month period
will equal the annual rate of 0.25%. In accordance with this criterion, contingent interest has been paid for each six-month period since
January 15, 2009.
The notes are unsecured senior subordinated obligations, rank junior to our existing and future senior secured indebtedness and rank
equally with our existing and future senior subordinated indebtedness.
As originally issued, each $1,000 principal amount of the notes will be convertible at the option of the holder into 12.422 shares of our
common stock (giving effect to the 2-for-1 stock split effective August 26, 2005 and subject to further adjustment), if (i) the sale price of
our common stock reaches, or the trading price of the notes falls below, specified thresholds, (ii) if the notes are called for redemption or
(iii) if specified corporate transactions have occurred. Upon conversion, we would have the right to deliver, in lieu of common stock, cash
or a combination of cash and common stock. On November 19, 2004, the Company began a consent solicitation to amend the notes such
that the Company would pay the same conversion value upon conversion of the notes, but would change how the conversion value is
paid. In lieu of receiving exclusively shares of common stock or cash upon conversion, noteholders would receive cash up to the value
page 22 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 23
of the accreted principal amount of the notes converted and, at the Company’s option, any remainder of the conversion value would be
paid in cash or shares of common stock. The consent solicitation was successfully completed on December 6, 2004 and the amended
conversion provisions were adopted.
As of September 30, 2005, the senior subordinated convertible notes were reclassified from long-term to short-term debt as the notes
became convertible on October 1, 2005 based upon the Company’s common stock trading above the trigger price for at least 20 trading
days during the 30 consecutive trading-day period ending on September 30, 2005.
Holders may require us to purchase all or a portion of their notes on January 15, 2014, January 15, 2019, January 15, 2024, and January
15, 2029, at stated prices plus accrued cash interest, if any, including contingent cash interest, if any. we may only pay the purchase price
of such notes in cash and not in common stock.
we may redeem for cash all or a portion of the notes at any time at redemption prices equal to the sum of the issue price plus accrued
original issue discount and accrued cash interest, if any, including contingent cash interest, if any, on such notes to the applicable
redemption date.
The Company includes in its diluted weighted-average common share calculation an increase in shares based upon the difference
between the Company’s average closing stock price for the period and the conversion price of $31.80, plus accretion. This is calculated
using the treasury stock method.
CONTRACTUAL CASH OBLIGATIONS AND OTHER COMMERCIAL COMMITMENTS
AND CONTINGENCIES
The following tables quantify our contractual cash obligations and commercial commitments at December 31, 2010 (in thousands).
Total
2011
2012
2013
2014
2015
Thereafter
Payments Due in Fiscal Year
$1,335,073
$ 90,981
$ —
$ 744,092
281,250
5,972
119,387
31,250
2,361
31,769
31,250
1,331
25,084
31,250
831
19,603
$ —
31,250
416
14,373
$ —
31,250
397
10,742
$500,000
125,000
636
17,816
$1,741,682
$ 156,361
$ 57,665
$ 795,776
$ 46,039
$ 42,389
$643,452
Amounts Expiring in Fiscal Year
Total Amount
Committed
2011
2012
2013
2014
2015
Thereafter
Contractual Cash Obligations(1)
Long-term debt
Senior note interest(2)
Capital leases
Operating leases
Total
Other Commercial Commitments
Standby letters of credit and
bank guarantees
$ 55,333
$ 47,939
$ 1,125
$
502
$
339
$
139
$ 5,288
(1) we have excluded $29 million related to the liability for uncertain tax positions from the tables as the current portion is not material, and we are not able to reasonably
estimate the timing of the long-term portion of the liability. See Note 8 of the notes to Consolidated Financial Statements.
(2) we have excluded interest on the Senior notes due 2013, as they have been effectively converted to variable-rate debt due to interest rate swaps. See “Description of Certain
Indebtedness” above.
At December 31, 2010, we had outstanding surety bonds of $317 million.
At December 31, 2010 and 2009, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities
often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-
balance sheet arrangements or other contractually narrow or limited purposes.
we believe that internally generated cash flows and the remaining availability under our credit facilities will be adequate to finance normal
operating requirements and future acquisition activities. Although we maintain an active acquisition program, any future acquisitions
will be dependent on numerous factors and it is not feasible to reasonably estimate if or when any such acquisitions will occur and what
the impact will be on our activities, financial condition and results of operations. we may also explore alternatives to attract additional
capital resources.
page 22 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 23
we anticipate that our recently acquired businesses as well as our other businesses will generate positive cash flows from operating
activities, and that these cash flows will permit the reduction of currently outstanding debt in accordance with the repayment schedule.
However, the rate at which we can reduce our debt during 2011 (and reduce the associated interest expense) will be affected by, among
other things, the financing and operating requirements of any new acquisitions and the financial performance of our existing companies.
None of these factors can be predicted with certainty.
RECENTLY ISSUED ACCOUNTING STANDARDS
See Note 1 of our notes to Consolidated Financial Statements for information regarding the effect of new accounting pronouncements on
our financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
we are exposed to interest rate risks on our outstanding borrowings, and to foreign currency exchange risks on our transactions
denominated in currencies other than the U.S. dollar. we are also exposed to equity market risks pertaining to the traded price of our
common stock.
At December 31, 2010, we had a combination of fixed and floating rate borrowings. Our credit facility contains a $750 million variable-
rate revolver. At December 31, 2010, the weighted-average interest rate was 1.56% on the outstanding revolver balance of $230 million.
Our $500 million senior notes due 2019 have a fixed interest rate of 6.25%, and our $91 million senior unsecured convertible notes have
a fixed interest rate of 3.75%. Our $500 million senior notes due 2013 have a fixed interest rate of 6.625%; however, in October 2009 we
entered into three interest rate swap agreements totaling $500 million that expire August 2013. The swaps, which are designated as
fair value hedges, effectively convert the notes to a weighted-average variable-rate obligation with a spread of 4.377% plus LIBOR. At
December 31, 2010, the prevailing market rates for our long-term notes were between 1.5% and 4.1% lower than the fixed rates on our
debt instruments.
At December 31, 2010, our outstanding variable-rate borrowings were $230 million in revolver borrowings and the $500 million senior
notes due 2013. An increase in interest rates of 1% would increase our annualized interest costs by $7.3 million.
Several of our businesses have transactions and balances denominated in currencies other than the U.S. dollar. Most of these transactions
or balances are denominated in euros, Canadian dollars, British pounds or Danish krone. Sales by companies whose functional currency
was not the U.S. dollar were 25% of our total sales and 64% of these sales were by companies with a European functional currency. The
U.S. dollar strengthened against most currencies and weakened against the Canadian dollar throughout 2010, which resulted in an
increase in sales of less than 1% due to foreign currency exchange. If these currency exchange rates had been 10% different throughout
2010 compared to currency exchange rates actually experienced, the impact on our net earnings would have been approximately 3.2%.
The changes in these currency exchange rates relative to the U.S. dollar during 2010 compared to currency exchange rates at December
31, 2009 resulted in a decrease in net assets of $19.8 million that was reported as a component of comprehensive earnings, $15.5 million
of which was attributed to goodwill. Goodwill changes from currency exchange rate changes do not directly affect our reported earnings
or cash flows.
The trading price of our common stock influences the valuation of stock award grants and the effects these grants have on our results of
operations. The stock price also influences the computation of potentially dilutive common stock which includes both stock awards and
the premium over the conversion price on senior subordinated convertible notes to determine diluted earnings per share. The stock price
also affects our employees’ perceptions of programs that involve our common stock. we believe the quantification of the effects of these
changing prices on our future earnings and cash flows is not readily determinable.
page 24 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 25
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEx TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firm (PricewaterhouseCoopers LLP)
Consolidated Balance Sheets as of December 31, 2010 and 2009
Consolidated Statements of Earnings for the Years ended December 31, 2010, 2009 and 2008
Consolidated Statements of Stockholders’ Equity and Comprehensive Earnings
for the Years ended December 31, 2010, 2009 and 2008
Consolidated Statements of Cash Flows for the Years ended December 31, 2010, 2009 and 2008
Notes to Consolidated Financial Statements
Supplementary Data:
Schedule II—Consolidated Valuation and Qualifying Accounts for the Years ended December 31, 2010, 2009 and 2008
Page
26
27
28
29
30
31
47
page 24 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 25
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders of Roper Industries, Inc.:
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of earnings, of stockholders’
equity and comprehensive earnings and of cash flows, present fairly, in all material respects, the financial position of Roper Industries,
Inc. and its subsidiaries at December 31, 2010 and December 31, 2009, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 2010 in conformity with accounting principles generally accepted in the United States
of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly,
in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December
31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement
schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control
over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our
responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company’s internal
control over financial reporting based on our integrated audits. we conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial
reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. we believe that our audits provide a reasonable basis
for our opinions.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the mainte-
nance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded iTradeNetwork, Inc. from
its assessment of internal control over financial reporting as of December 31, 2010, because it was acquired by the Company in a purchase
business combination during 2010. we have also excluded iTradeNetwork, Inc. from our audit of internal control over financial reporting.
iTradeNetwork, Inc. is a wholly-owned subsidiary whose total assets and total revenues represent 0.3% and 1.4%, respectively, of the
related consolidated financial statement amounts as of and for the year ended December 31, 2010.
PricewaterhouseCoopers LLP
Atlanta, Georgia
February 25, 2011
page 26 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 27
ROPER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2010 and 2009
(In thousands, except per share data)
Assets
Cash and cash equivalents
Accounts receivable, net
Inventories, net
Deferred taxes
Unbilled receivables
Other current assets
Total current assets
Property, plant and equipment, net
Goodwill
Other intangible assets, net
Deferred taxes
Other assets
Total assets
Liabilities and Stockholders’ Equity
Accounts payable
Accrued liabilities
Income taxes payable
Deferred taxes
Current portion of long-term debt, net
Total current liabilities
Long-term debt, net of current portion
Deferred taxes
Other liabilities
Total liabilities
Commitments and contingencies (Note 14)
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 2,000 shares authorized; none outstanding
Common stock, $0.01 par value per share; 350,000 shares authorized;
97,122 shares issued and 95,088 outstanding at December 31, 2010 and
95,768 shares issued and 93,618 outstanding at December 31, 2009.
Additional paid-in capital
Retained earnings
Accumulated other comprehensive earnings
Treasury stock 2,034 shares at December 31, 2010 and 2,150 shares at December 31, 2009.
Total stockholders’ equity
Total liabilities and stockholders’ equity
See accompanying notes to consolidated financial statements.
2010
2009
$ 270,394
403,337
178,559
32,894
75,620
37,287
998,091
103,487
2,727,780
1,104,513
57,850
77,803
$ 167,708
381,658
178,795
27,306
57,153
58,125
870,745
109,493
2,388,432
868,900
33,123
57,043
$ 5,069,524
$ 4,327,736
$ 137,778
298,080
—
10,445
93,342
539,645
1,247,703
465,001
66,268
$ 110,103
253,441
—
1,671
112,796
478,011
1,040,962
328,299
58,974
2,318,617
1,906,246
—
—
971
1,045,286
1,680,849
43,978
(20,177)
958
982,321
1,395,586
63,945
(21,320)
2,750,907
2,421,490
$ 5,069,524
$ 4,327,736
page 26 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 27
ROPER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
Years Ended December 31, 2010, 2009 and 2008
(Dollar and share amounts in thousands, except per share data)
2010
2009
2008
Years Ended December 31,
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Income from operations
Interest expense
Loss on extinguishment of debt
Other income
Earnings before income taxes
Income taxes
Net earnings
Earnings per share:
Basic
Diluted
weighted-average common shares outstanding:
Basic
Diluted
See accompanying notes to consolidated financial statements.
$ 2,386,112
1,110,986
1,275,126
760,832
514,294
66,533
—
633
448,394
125,814
$ 2,049,668
1,006,530
1,043,138
647,742
395,396
58,544
403
3,319
339,768
100,287
$ 2,306,371
1,118,083
1,188,288
702,127
486,161
60,819
3,133
6,607
428,816
146,942
$ 322,580
$ 239,481
$ 281,874
$
$
3.42
3.34
$
$
2.64
2.58
$
$
3.15
3.01
94,242
96,653
90,685
92,820
89,468
93,699
page 28 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 29
ROPER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE EARNINGS
Years Ended December 31, 2010, 2009 and 2008
(In thousands, except per share data)
Shares
Amount
Common Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Earnings
Treasury
Stock
Total
Stockholders’
Equity
Comprehensive
Earnings
Balances at December 31, 2007
88,773
$ 910
$ 774,568
$ 932,473
$108,732
$ (22,040)
$ 1,794,643
$ 285,771
Net earnings
Stock option exercises
Treasury stock sold
Currency translation adjustments,
net of $9,404 tax
Stock-based compensation
Restricted stock grants
Stock option tax benefit
Reduction in unrealized gain on
derivative, shown net of $(291) tax
Dividends declared ($0.30 per share)
—
462
34
—
—
452
—
—
—
—
5
—
—
—
4
—
—
—
—
11,032
1,555
—
30,905
(7,967)
5,643
281,874
—
—
—
—
—
—
—
—
—
(26,880)
—
—
—
(86,679)
—
—
—
(540)
—
—
—
339
—
—
—
—
—
—
281,874
11,037
1,894
(86,679)
30,905
(7,963)
5,643
(540)
(26,880)
$ 281,874
—
—
(86,679)
—
—
—
(540)
—
Balances at December 31, 2008
89,721
$ 919
$ 815,736
$ 1,187,467
$ 21,513
$ (21,701)
$ 2,003,934
$ 194,655
Net earnings
Stock option exercises
Treasury stock sold
Currency translation adjustments,
net of $5,257 tax
Stock-based compensation
Restricted stock grants
Stock option tax benefit,
net of shortfalls
Issuance of common stock,
net of issue costs
Conversion of senior subordinated
convertible notes
Dividends declared ($0.34 per share)
—
421
38
—
—
87
—
2,300
1,051
—
—
4
—
—
—
1
—
23
11
—
—
10,502
1,312
—
26,660
(3,648)
2,032
121,427
239,481
—
—
—
—
—
—
—
8,300
—
—
(31,362)
—
—
—
42,432
—
—
—
—
—
—
—
—
381
—
—
—
—
—
—
—
239,481
10,506
1,693
42,432
26,660
(3,647)
2,032
121,450
8,311
(31,362)
$ 239,481
—
—
42,432
—
—
—
—
—
—
Balances at December 31, 2009
93,618
$ 958
$ 982,321
$ 1,395,586
$ 63,945
$ (21,320)
$ 2,421,490
$ 281,913
Net earnings
Stock option exercises
Stock issued for Lumenera contingent
consideration
Treasury stock sold
Currency translation adjustments,
net of $153 tax
Stock-based compensation
Restricted stock grants
Stock option tax benefit,
net of shortfalls
Conversion of senior subordinated
convertible notes
Dividends declared ($0.40 per share)
—
864
86
29
—
—
165
—
326
—
—
8
—
—
—
—
2
—
3
—
—
29,039
4,740
1,405
—
23,980
(4,547)
7,282
1,066
—
322,580
—
—
—
—
—
—
—
—
(37,317)
—
—
—
—
(19,967)
—
—
—
—
—
—
—
851
292
—
—
—
—
—
—
322,580
29,047
$ 322,580
—
5,591
1,697
(19,967)
23,980
(4,545)
7,282
1,069
(37,317)
—
—
(19,967)
—
—
—
—
—
Balances at December 31, 2010
95,088
$971
$ 1,045,286
$ 1,680,849
$ 43,978
$ (20,177)
$2,750,907
$302,613
See accompanying notes to consolidated financial statements.
page 28 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 29
ROPER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOwS
Years Ended December 31, 2010, 2009 and 2008
(In thousands)
Cash flows from operating activities:
Net earnings
Adjustments to reconcile net earnings to cash flows from operating activities:
Depreciation and amortization of property, plant and equipment
Amortization of intangible assets
Amortization of deferred financing costs
Non-cash stock compensation
Changes in operating assets and liabilities, net of acquired businesses:
Accounts receivable
Inventories
Unbilled receivables
Accounts payable and accrued liabilities
Income taxes
Other, net
Cash provided by operating activities
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired
Capital expenditures
Proceeds from sale of assets
Other, net
Cash used in investing activities
Cash flows from financing activities:
Proceeds from senior notes
Proceeds from/(payments on) senior unsecured term loan
Borrowings/(payments) under revolving line of credit, net
Principal payments on convertible notes
Repayment of borrowings under prior credit facility
Principal payments on term notes under prior credit facility
Debt issuance costs
Cash dividends to stockholders
Treasury stock sales
Stock award tax excess windfall benefit
Proceeds from issuance of common stock, net of issue costs
Proceeds from stock option exercises
Other
Cash provided by/(used in) financing activities
Effect of exchange rate changes on cash
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supplemental disclosures:
Cash paid for:
Interest
Income taxes, net of refunds received
Noncash investing activities:
Net assets of businesses acquired:
Fair value of assets, including goodwill
Liabilities assumed
Cash paid, net of cash acquired
See accompanying notes to consolidated financial statements.
Years Ended December 31,
2010
2009
2008
$ 322,580
$ 239,481
$ 281,874
36,728
86,293
2,362
25,150
(9,697)
(5,687)
(16,115)
52,540
10,123
(4,737)
34,163
69,285
2,573
27,476
26,978
31,081
4,015
(58,801)
(6,225)
(2,527)
33,900
66,941
2,267
30,905
14,609
(8,728)
(950)
9,209
(2,675)
7,086
499,540
367,499
434,438
(536,413)
(28,591)
6,068
(4,338)
(354,561)
(25,885)
11,218
(4,964)
(704,764)
(30,047)
1,746
(6,229)
(563,274)
(374,192)
(739,294)
—
500,000
— (350,000)
(139,000)
(124,270)
500,000
350,000
313,000
—
— (908,620)
(49,125)
—
(10,226)
(4,708)
(25,887)
(29,823)
1,894
1,693
5,359
2,813
121,450
—
11,037
10,506
487
(2,258)
190,000
(23,411)
—
—
—
(35,706)
1,697
6,364
—
29,047
(382)
167,609
(13,597)
187,919
(1,189)
9,929
(13,762)
102,686
167,708
(10,361)
178,069
(130,699)
308,768
$ 270,394
$ 167,708
$ 178,069
$ 64,831
$ 47,867
$ 39,063
$ 109,327
$ 103,699
$ 144,258
$ 687,017
(150,604)
$ 384,055
(29,494)
$ 774,164
(69,400)
$ 536,413
$ 354,561
$ 704,764
page 30 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 31
ROPER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2010, 2009 and 2008
(1) SUMMARY OF ACCOUNTING POLICIES
Basis of Presentation—These financial statements present consolidated information for Roper Industries, Inc. and its subsidiaries
(“Roper” or the “Company”). All significant intercompany accounts and transactions have been eliminated.
Nature of the Business—Roper is a diversified growth company that designs, manufactures and distributes energy systems and controls,
medical and scientific imaging products and software, industrial technology products and radio frequency products and services. Roper
markets these products and services to selected segments of a broad range of markets, including radio frequency applications, medical,
water, energy, research, education, food and food services, security and other niche markets.
Accounts Receivable—Accounts receivable were stated net of an allowance for doubtful accounts and sales allowances of $10.3 million
and $11.2 million at December 31, 2010 and 2009, respectively. Outstanding accounts receivable balances are reviewed periodically, and
allowances are provided at such time that management believes reasonable doubt exists that such balances will be collected within a
reasonable period of time. The returns and other sales credit allowance is an estimate of customer returns, exchanges, discounts or other
forms of anticipated concessions and is treated as a reduction in revenue.
Cash and Cash Equivalents—Roper considers highly liquid financial instruments with remaining maturities at acquisition of three
months or less to be cash equivalents. Roper had $10 million in cash equivalents at December 31, 2010 and none at December 31, 2009.
Earnings Per Share—Basic earnings per share were calculated using net earnings and the weighted-average number of shares of common
stock outstanding during the respective year. Diluted earnings per share were calculated using net earnings and the weighted-average
number of shares of common stock and potential common stock outstanding during the respective year. Potentially dilutive common
stock consisted of stock options and the premium over the conversion price on our senior subordinated convertible notes based upon the
trading price of the Company’s common stock. The effects of potential common stock were determined using the treasury stock method
(in thousands):
Basic shares outstanding
Effect of potential common stock
Common stock awards
Senior subordinated convertible notes
Diluted shares outstanding
Years Ended December 31,
2010
2009
2008
94,242
90,685
89,468
1,009
1,402
853
1,282
1,155
3,076
96,653
92,820
93,699
As of and for the years ended December 31, 2010, 2009 and 2008, there were 1,143,000, 2,125,000 and 190,000 outstanding stock options,
respectively, that were not included in the determination of diluted earnings per share because doing so would have been antidilutive.
Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities. Actual results could differ from those estimates.
Foreign Currency Translation—Assets and liabilities of subsidiaries whose functional currency is not the U.S. dollar were translated at
the exchange rate in effect at the balance sheet date, and revenues and expenses were translated at average exchange rates for the period
in which those entities were included in Roper’s financial results. Translation adjustments are reflected as a component of other compre-
hensive earnings.
Goodwill and Other Intangibles—Roper accounts for goodwill in a purchase business combination as the excess of the cost over the fair
value of net assets acquired. Business combinations can also result in other intangible assets being recognized. Amortization of intangible
assets, if applicable, occurs over their estimated useful lives. Goodwill, which is not amortized, is tested for impairment using a two-step
method on an annual basis (or an interim basis if an event occurs that might reduce the fair value of a reporting unit below its carrying
value). Total goodwill includes 25 different business components with individual amounts ranging from zero to approximately $536 mil-
lion. Identifiable intangible assets that are determined to have an indefinite useful economic life are not amortized, but separately tested
for impairment annually using a one-step fair value based approach. Roper conducts these reviews for all of its reporting units during the
fourth quarter of the fiscal year. No impairment resulted from the annual reviews performed in 2010.
page 30 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 31
Impairment of Long-Lived Assets—The Company determines whether there has been an impairment of long-lived assets, excluding
goodwill and identifiable intangible assets that are determined to have indefinite useful economic lives, when certain indicators of
impairment are present. In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an
evaluation of recoverability would be performed. If an evaluation is required, the estimated future gross, undiscounted cash flows associ-
ated with the asset would be compared to the asset’s carrying amount to determine if a write-down to market value is required. Future
adverse changes in market conditions or poor operating results of underlying long-lived assets could result in losses or an inability to
recover the carrying value of the long-lived assets that may not be reflected in the assets’ current carrying value, thereby possibly requir-
ing an impairment charge in the future.
Income Taxes—Roper is a U.S.-based multinational company and the calculation of its worldwide provision for income taxes requires
analysis of many factors, including income tax systems that vary from country to country, and the United States’ treatment of non-U.S.
earnings. The Company provides U.S. income taxes for unremitted earnings of foreign subsidiaries that are not considered permanently
reinvested overseas. As of December 31, 2010, the approximate amount of earnings of foreign subsidiaries that the Company considers
permanently reinvested and for which deferred taxes have not been provided was approximately $616 million. Because of the availability
of U.S. foreign tax credits, it is not practicable to determine the U.S. federal income tax liability that would be payable if such earnings
were not reinvested indefinitely.
Certain assets and liabilities have different bases for financial reporting and income tax purposes. Deferred income taxes have been
provided for these differences.
Interest Rate Risk—The Company manages interest rate risk by maintaining a combination of fixed- and variable-rate debt, which may
include interest rate swaps to convert fixed-rate debt to variable-rate debt, or to convert variable-rate debt to fixed-rate debt. Interest rate
swaps are recorded at fair value in the balance sheet as an asset or liability, and the changes in fair values of both the swap and the
hedged item are recorded as interest expense in current earnings.
Inventories—Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first-out method. The Company
writes down its inventory for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and the
estimated market value based upon assumptions about future demand and market conditions.
Other Comprehensive Earnings—Comprehensive earnings includes net earnings and all other non-owner sources of changes in a com-
pany’s net assets. The differences between net earnings and comprehensive earnings were currency translation adjustments, net of tax.
Property, Plant and Equipment and Depreciation and Amortization—Property, plant and equipment is stated at cost less accumulated
depreciation and amortization. Depreciation and amortization are provided for using principally the straight-line method over the estimated
useful lives of the assets as follows:
Buildings
Machinery
Other equipment
20–30 years
8–12 years
3–5 years
Capitalized Software—The Company accounts for capitalized software under applicable accounting guidance which, among other provi-
sions, requires capitalization of certain internal-use software costs once certain criteria are met. Overhead, general and administrative
and training costs are not capitalized. Capitalized software was $17.3 million and $16.0 million at December 31, 2010 and 2009,
respectively.
Research and Development—Research and development costs include salaries and benefits, rents, supplies, and other costs related to
products under development. Research and development costs are expensed in the period incurred and totaled $102.4 million, $83.4
million and $87.4 million for the years ended December 31, 2010, 2009 and 2008, respectively.
Revenue Recognition and Product Warranties—The Company recognizes revenue when all of the following criteria are met:
• persuasive evidence of an arrangement exists,
• delivery has occurred or services have been rendered,
• the seller’s price to the buyer is fixed or determinable, and
• collectibility is reasonably assured.
page 32 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 33
In addition, the Company recognizes revenue from the sale of product when title and risk of loss pass to the customer, which is generally
when product is shipped. The Company recognizes revenue from services when such services are rendered or, if applicable, upon cus-
tomer acceptance. Revenues under certain relatively long-term and relatively large-value construction projects are recognized under the
percentage-of-completion method using the ratio of costs incurred to total estimated costs as the measure of performance. The Company
recognized revenues of approximately $131.0 million, $142.5 million and $127.9 million for the years ended December 31, 2010, 2009 and
2008, respectively, using this method. Estimated losses on any projects are recognized as soon as such losses become known.
The Company sells certain of its products to customers with a product warranty that allows customers to return a defective product dur-
ing a specified warranty period following the purchase in exchange for a replacement product, repair at no cost to the customer or the
issuance of a credit to the customer. The Company accrues its estimated exposure to warranty claims based upon current and historical
product sales data, warranty costs incurred and any other related information known to the Company.
Stock-Based Compensation—The Company recognizes expense for the grant date fair value of its employee stock option awards on a
straight-line basis over the employee’s requisite service period (generally the vesting period of the award). The fair value of its option
awards is estimated using the Black-Scholes option valuation model and recognizes the expense of all share-based awards. The Company
presents the cash flows resulting from the tax benefits arising from tax deductions in excess of the compensation cost recognized for
stock award exercises (excess tax benefits) as financing cash flows.
Recently Released Accounting Pronouncements—In October 2009, the FASB issued amendments to the accounting and disclosure
for revenue recognition. These amendments, effective for fiscal years beginning on or after June 15, 2010 (early adoption is permitted),
modify the criteria for recognizing revenue in multiple element arrangements and the scope of what constitutes a non-software deliver-
able. The Company implemented the amendments on January 1, 2011, and expects that the impact on its results of operations, financial
condition and cash flows will be immaterial.
In September 2009, the FASB issued guidance on the measurement of liabilities at fair value, effective as of the beginning of the next
interim or annual reporting period after issuance. The adoption of this guidance did not have an impact on Roper’s results of operations,
financial condition or cash flows.
(2) BUSINESS ACQUISITIONS
2010 Acquisitions—During the year ended December 31, 2010, Roper completed two business combinations. The results of operations
of the acquired companies have been included in Roper’s consolidated results since the date of each acquisition. Supplemental pro forma
information has not been provided as the acquisitions did not have a material impact on Roper’s consolidated results of operations indi-
vidually or in aggregate.
The aggregate purchase price of 2010 acquisitions totaled $538 million of cash. The Company recorded approximately $320 million in
other identifiable intangibles and $350 million in goodwill, $115 million of which was recorded due to a deferred tax liability related to
intangible assets, in connection with these acquisitions. The majority of the goodwill is not expected to be deductible for tax purposes.
The Company expensed transaction costs of $1.9 million related to these acquisitions.
iTrade Acquisition—The largest of the 2010 acquisitions was the purchase of all outstanding shares of iTradeNetwork, Inc. on July 27,
2010. iTrade, whose operations are reported in the RF Technology segment, is a global provider of software-as-a-service (“SaaS”)-based
trading network and business intelligence solutions primarily to the perishable food market. iTrade’s principal facilities are located in
Pleasanton, California. The aggregate gross purchase price was $523 million of cash.
The Company acquired iTrade in order to complement and expand existing software services at other Roper businesses. The following
table (in thousands) summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition.
Current assets
Other assets
Intangible assets
Goodwill
Total assets acquired
Current liabilities
Other liabilities
Net assets acquired
July 27, 2010
$ 14,174
2,998
313,600
341,243
672,015
(20,225)
(128,841)
$ 522,949
page 32 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 33
On February 22, 2010, Roper purchased the assets of Heartscape, Inc, including a technology with the capability to improve the speed
and accuracy of detecting heart attacks. The operations of Heartscape are reported in the Medical & Scientific Imaging segment.
Of the $320 million of acquired intangible assets acquired in 2010, $35 million was assigned to trade names that are not subject to amor-
tization. The remaining $285 million of acquired intangible assets have a weighted-average useful life of approximately 14 years. The
intangible assets that make up that amount include customer relationships of $234 million (15-year weighted-average useful life) and
unpatented technology of $51 million (8-year weighted-average useful life).
2009 Acquisitions—During the year ended December 31, 2009, Roper completed two business combinations. The results of operations
of the acquired companies have been included in Roper’s consolidated results since the date of each acquisition. Supplemental pro forma
information has not been provided as the acquisitions did not have a material impact on Roper’s consolidated results of operations indi-
vidually or in aggregate.
The aggregate purchase price of 2009 acquisitions totaled $353 million. Roper recorded approximately $246 million in goodwill and
$126 million in other identifiable intangibles in connection with these acquisitions. The majority of the goodwill is not expected to be
deductible for tax purposes. The Company recorded $2.2 million in transaction costs related to these acquisitions.
On October 30, 2009, Roper purchased the assets of United Toll Systems, LLC, which provides software and in-lane hardware systems
for toll and traffic markets. The operations of UTS are reported in the RF Technology segment.
On December 3, 2009, Roper purchased Verathon, Inc., a leading global provider of proprietary medical devices and services, in order to
expand our medical product lines. The results of Verathon are reported in the Medical & Scientific Imaging segment.
Of the $126 million of acquired intangible assets, $27 million was assigned to trade names that are not subject to amortization. The
remaining $99 million of acquired intangible assets have a weighted-average useful life of approximately 10 years. The intangible assets
that make up that amount include customer relationships of $46 million (14-year weighted-average useful life), unpatented technology
of $53 million (7-year weighted-average useful life) and protective rights of $0.5 million (3-year weighted-average useful life).
2008 Acquisitions—During the year ended December 31, 2008, Roper completed six business combinations. The results of operations
of the acquired companies have been included in Roper’s consolidated results since the date of each acquisition. Supplemental pro forma
information has not been provided as the acquisitions did not have a material impact on Roper’s consolidated results of operations
individually or in aggregate.
CBORD Acquisition—The largest of the 2008 acquisitions was the purchase of all outstanding shares of CBORD Holdings Corporation
on February 20, 2008. CBORD, whose operations are reported in the RF Technology segment, is a provider of card systems and integrated
security solutions to higher education, healthcare and other markets. CBORD’s principal facilities are located in Ithaca, New York. The
aggregate gross purchase price was $375 million of cash, which includes amounts incurred for direct external transaction costs associated
with the acquisition.
Roper acquired CBORD due to growth prospects in CBORD’s end markets of education and healthcare. In addition, CBORD has excellent
customer retention and strong recurring revenues. Roper also sees opportunities to realize complementary technologies within the
RF Technology segment to CBORD’s product offerings.
The allocation of the purchase resulted in $158 million of identifiable intangible assets, and $257 million of goodwill. The following table
(in thousands) summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition.
Current assets
Other assets
Intangible assets
Goodwill
Total assets acquired
Current liabilities
Other liabilities
Net assets acquired
February 20, 2008
$ 32,831
4,916
158,180
256,693
452,620
(34,823)
(42,887)
$374,910
page 34 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 35
Of the $158 million of acquired intangible assets, $28 million was assigned to trade names that are not subject to amortization. The
remaining $130 million of acquired intangible assets have a weighted-average useful life of approximately 15 years. The intangible assets
that make up that amount include customer relationships of $114 million (20-year weighted-average useful life), unpatented technology
of $12 million (6-year weighted-average useful life), and protective rights of $4 million (5-year weighted-average useful life).
The majority of the $257 million of goodwill is not expected to be deductible for tax purposes.
Other 2008 Acquisitions—The aggregate purchase price of all other acquisitions made in 2008 totaled $331 million, which includes
amounts incurred for direct external transaction costs associated with the acquisitions. Roper recorded approximately $219 million in
goodwill and $122 million in other identifiable intangibles in connection with these acquisitions. The majority of the goodwill is not
expected to be deductible for tax purposes.
On March 20, 2008, Roper acquired the assets of Tech-Pro, Inc. a provider of industrial test instruments and software in our Energy
Systems & Controls segment.
On June 18, 2008, Roper acquired all of the outstanding shares of Chalwyn Limited, a U.K.-based air shut-off valve provider in our Energy
Systems & Controls segment.
On July 17, 2008, Roper acquired the assets, intellectual property and domain name of Getloaded.com, LLC, which adds new subscribers
for our freight matching services in the RF Technology segment.
On August 27, 2008, Roper acquired the assets of Horizon Software Holdings, Inc., a leading provider of comprehensive software solutions
and related services that complements CBORD’s higher education business to allow us to better serve the entire education spectrum. The
operations of Horizon are reported in the RF Technology segment.
On September 10, 2008, Roper acquired all of the outstanding shares of Technolog Holdings Limited, a U.K.-based end-to-end solutions
provider for network monitoring, pressure management, automatic meter reading and smart metering solutions. The operations of
Technolog are reported in the RF Technology segment.
Of the $122 million of acquired intangible assets, $22 million was assigned to trade names that are not subject to amortization. The
remaining $100 million of acquired intangible assets have a weighted-average useful life of approximately 13 years. The intangible assets
that make up that amount include customer relationships of $82 million (14-year weighted-average useful life), unpatented technology
of $14 million (9-year weighted-average useful life), protective rights of $2 million (7-year weighted-average useful life) and backlog of
$2 million (1-year weighted-average useful life).
(3) INVENTORIES
The components of inventories at December 31 were as follows (in thousands):
Raw materials and supplies
work in process
Finished products
Inventory reserves
(4) PROPERTY, PLANT AND EQUIPMENT
The components of property, plant and equipment at December 31 were as follows (in thousands):
Land
Buildings
Machinery and other equipment
Accumulated depreciation and amortization
2010
2009
$ 113,415
$ 111,546
26,358
71,302
(32,516)
24,557
71,729
(29,037)
$ 178,559
$ 178,795
2010
2009
$
4,194
$
5,068
68,077
239,940
312,211
(208,724)
68,912
231,768
305,748
(196,255)
$ 103,487
$ 109,493
Depreciation expense was $36,728, $34,163 and $33,900 for the years ended December 31, 2010, 2009 and 2008, respectively.
page 34 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 35
(5) GOODwILL
(In thousands)
Balances at December 31, 2008
Goodwill acquired
Currency translation adjustments
Reclassifications and other
Medical
Industrial
Technology
Energy Systems
and Scientific
RF
and Controls
Imaging
Technology
Total
$ 423,661
$ 381,656
—
7,412
—
—
4,894
(3,343)
$ 400,478
215,747
7,561
—
$ 913,057
$ 2,118,852
30,220
8,326
(1,237)
245,967
28,193
(4,580)
Balances at December 31, 2009
$ 431,073
$ 383,207
$ 623,786
$ 950,366
$ 2,388,432
Goodwill acquired
Currency translation adjustments
Reclassifications and other
—
(11,071)
—
—
(2,554)
(58)
8,593
804
4,808
341,243
(2,657)
240
349,836
(15,478)
4,990
Balances at December 31, 2010
$420,002
$380,595
$637,991
$1,289,192
$ 2,727,780
Goodwill acquired during the year ended December 31, 2010 was attributable to the acquisitions of Heartscape and iTrade. The reclassifi-
cations and other are due primarily to contingent consideration payments related to acquisitions completed prior to January 1, 2009.
(6) OTHER INTANGIBLE ASSETS, NET
(In thousands)
Assets subject to amortization:
Customer-related intangibles
Unpatented technology
Software
Patents and other protective rights
Backlog
Trade secrets
Assets not subject to amortization:
Trade names
Balances at December 31, 2009
Assets subject to amortization:
Customer-related intangibles
Unpatented technology
Software
Patents and other protective rights
Backlog
Trade secrets
Assets not subject to amortization:
Trade names
Balances at December 31, 2010
Accumulated
Net
Cost
Amortization
Book Value
$ 730,213
$ (181,070)
$ 549,143
124,278
53,408
32,762
1,920
2,773
192,455
(33,769)
(30,739)
(20,187)
(1,920)
(1,224)
90,509
22,669
12,575
—
1,549
—
192,455
$ 1,137,809
$ (268,909)
$ 868,900
$ 960,013
$(235,885)
$ 724,128
175,819
49,095
25,505
—
1,604
229,386
(54,376)
(30,182)
(15,292)
—
(1,174)
121,443
18,913
10,213
—
430
—
229,386
$ 1,441,422
$(336,909)
$ 1,104,513
Amortization expense of other intangible assets was $83.7 million, $66.8 million, and $64.0 million during the years ended 2010, 2009
and 2008, respectively. Amortization expense is expected to be $87.5 million in 2011, $84.7 million in 2012, $82.6 million in 2013, $74.6
million in 2014 and $61.0 million in 2015.
page 36 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 37
(7) ACCRUED LIABILITIES
Accrued liabilities at December 31 were as follows (in thousands):
wages and other compensation
Deferred revenue
Interest
Customer deposits
Commissions
Accrued dividend
warranty
Billings in excess of cost
Other
(8) INCOME TAxES
2010
2009
$ 91,181
$ 70,164
93,498
26,404
13,941
12,086
10,456
7,038
6,763
36,713
78,077
26,452
8,378
9,522
8,894
7,341
9,955
34,658
$ 298,080
$ 253,441
Earnings before income taxes for the years ended December 31, 2010, 2009 and 2008 consisted of the following components (in thousands):
United States
Other
2010
2009
2008
$ 270,281
178,113
$ 210,559
129,209
$ 260,247
168,569
$ 448,394
$ 339,768
$ 428,816
Components of income tax expense for the years ended December 31, 2010, 2009 and 2008 were as follows (in thousands):
Current:
Federal
State
Foreign
Deferred:
Federal
Foreign
2010
2009
2008
$ 93,594
$ 54,636
$ 77,920
8,185
32,706
(23,107)
14,436
6,990
23,720
14,880
61
12,309
40,739
17,028
(1,054)
$ 125,814
$ 100,287
$ 146,942
Reconciliations between the statutory federal income tax rate and the effective income tax rate for the years ended December 31, 2010,
2009 and 2008 were as follows:
Federal statutory rate
Foreign rate differential
R&D tax credits
State taxes, net of federal benefit
Foreign tax credit
Other, net
2010
2009
2008
35.0%
(4.3)
(0.6)
1.6
(2.4)
(1.2)
35.0%
(3.9)
(0.6)
1.8
—
(2.8)
35.0%
(2.6)
(0.4)
2.1
—
0.2
28.1%
29.5%
34.3%
The deferred income tax balance sheet accounts arise from temporary differences between the amount of assets and liabilities recognized
for financial reporting and tax purposes.
page 36 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 37
Components of the deferred tax assets and liabilities at December 31 were as follows (in thousands):
Deferred tax assets:
Reserves and accrued expenses
Inventories
Net operating loss carryforwards
R&D credits
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Reserves and accrued expenses
Amortizable intangible assets
Plant and equipment
Other
Total deferred tax liabilities
2010
2009
$ 76,386
$ 49,806
6,672
7,529
953
(796)
5,854
4,008
761
—
$ 90,744
$ 60,429
$ 33,884
$ 38,885
435,143
289,326
6,419
—
1,545
214
$ 475,446
$ 329,970
The Company records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their realizability exists. Roper
has certain foreign operations that are in a cumulative loss position for the three-year period ended December 31, 2010. For purposes
of assessing the realization of the deferred tax assets in those operations, the cumulative taxable loss position is considered significant
negative evidence and has caused us to conclude that the Company will not be able to realize the deferred tax assets in the future. As
of December 31, 2010, the Company recorded a full valuation allowance of $0.8 million on the deferred tax assets of those certain
foreign operations.
At December 31, 2010, Roper had approximately $17.7 million of U.S. federal net operating loss carryforwards. If not utilized, these carry-
forwards will expire in years 2023 through 2029. Additionally, Roper had foreign tax credit carryforwards and research and development
credit carryforwards. Roper has not recognized a valuation allowance since management has determined that it is more likely than not
that the results of future operations will generate sufficient taxable income to realize these deferred tax assets.
The Company provides income taxes for unremitted earnings of foreign subsidiaries that are not considered permanently reinvested
overseas. As of December 31, 2010, the approximate amount of earnings of foreign subsidiaries that the Company considers permanently
reinvested and for which deferred taxes have not been provided was approximately $615.5 million. Because of the availability of U.S.
foreign tax credits, it is not practicable to determine the U.S. federal income tax liability that would be payable if such earnings were not
reinvested indefinitely.
The Company recognizes in the consolidated financial statements only those tax positions determined to be “more likely than not” of
being sustained upon examination based on the technical merits of the positions. A reconciliation of the beginning and ending amount
of unrecognized tax benefits is as follows (in thousands):
Beginning balance
Additions for tax positions of prior periods
Additions for tax positions of the current period
Additions due to acquisitions
Reductions for tax positions of prior periods
Settlements with taxing authorities
Lapse of applicable statute of limitations
Ending balance
2010
2009
2008
$ 22,922
$ 22,638
$ 20,773
203
3,169
3,546
(565)
—
156
4,750
—
(250)
(224)
(4,510)
(4,148)
960
3,086
—
—
(1,609)
(572)
$ 24,765
$ 22,922
$ 22,638
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $12.1 million. Interest and penal-
ties related to unrecognized tax benefits are classified as a component of income tax expense and totaled $0.6 million in 2010. Accrued
interest and penalties were $4.1 million at December 31, 2010 and $3.5 million at December 31, 2009. During the next twelve months,
it is expected that the unrecognized tax benefits will be reduced by a net $0.8 million, due mainly to a lapse in the applicable statute
of limitations.
page 38 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 39
The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state, city and foreign jurisdic-
tions. The Company’s federal income tax returns for 2007 through the current period remain subject to examination and the relevant
state, city and foreign statutes vary. There are no current tax examinations in progress where the Company expects the assessment of
any significant additional tax in excess of amounts reserved.
(9) LONG-TERM DEBT
In September 2009, the Company completed a public offering of $500 million aggregate principal amount of 6.25% senior unsecured
notes due September 2019. The notes bear interest at a fixed rate of 6.25% per year, payable semi-annually in arrears on March 1 and
September 1 of each year, beginning March 1, 2010.
Roper may redeem some of all of these notes at any time or from time to time, at 100% of their principal amount, plus a make-whole
premium based on a spread to U.S. Treasury securities.
The notes are unsecured senior obligations of the Company and rank equally in right of payment with all of Roper’s existing and future
unsecured and unsubordinated indebtedness. The notes are effectively subordinated to any of its existing and future secured indebtedness
to the extent of the value of the collateral securing such indebtedness. The notes are not guaranteed by any of Roper’s subsidiaries and
are effectively subordinated to all existing and future indebtedness and other liabilities of Roper’s subsidiaries.
On August 6, 2008, Roper issued $500 million aggregate principal amount of 6.625% senior notes due August 15, 2013. The notes bear
interest at a fixed rate of 6.625% per year, payable semi-annually in arrears on February 15 and August 15 of each year, beginning
February 15, 2009. The interest payable on the notes is subject to adjustment if either Moody’s Investors Service or Standard & Poor’s
Ratings Services downgrades the rating assigned to the notes.
Roper may redeem some or all of the notes at any time or from time to time, at 100% of their principal amount plus a make-whole premium
based on a spread to U.S. Treasury securities as described in the indenture relating to the notes.
The notes are unsecured senior obligations of the Company and rank equally in right of payment with all of the Company’s existing and
future unsecured and unsubordinated indebtedness. The notes are effectively subordinated to any of the Company’s existing and future
secured indebtedness to the extent of the value of the collateral securing such indebtedness. The notes are not guaranteed by any of the
Company’s subsidiaries and are effectively subordinated to all existing and future indebtedness and other liabilities of the Company’s
subsidiaries.
On July 7, 2008, the Company entered into an unsecured credit facility with JPMorgan Chase Bank, N.A., as administrative agent, and a
syndicate of lenders. The facility was originally composed of a $350 million term loan facility maturing July 7, 2010 and a five-year $750
million revolving credit facility maturing July 7, 2013; however, the $350 million term loan was repaid in September 2009. The Company
recorded a $0.4 million non-cash pre-tax debt extinguishment charge in the third quarter of 2009 related to the early termination of the
term loan. This charge reflects the unamortized fees associated with the term loan. The Company may also, subject to compliance with
specified conditions, request additional term loans or revolving credit commitments in an aggregate amount not to exceed $350 million.
In 2008, Roper recorded a $3.1 million non-cash pre-tax debt extinguishment charge in connection with the prepayment of the previous
credit facility. This charge reflects the unamortized fees associated with the facility.
Other debt includes $91 million of senior subordinated convertible notes due 2034.
Total debt at December 31 consisted of the following (in thousands):
$750 million revolving credit facility
Senior Notes due 2013(1)
Senior Notes due 2019
Senior Subordinated Convertible Notes
Other
Total debt
Less current portion
Long-term debt
(1) Shown net of fair value swap adjustment of $14,092 at December 31, 2010 and $(3,175) at December 31, 2009.
2010
2009
$ 230,000
$
40,000
514,092
500,000
90,981
5,972
1,341,045
93,342
496,825
500,000
110,579
6,354
1,153,758
112,796
$ 1,247,703
$ 1,040,962
page 38 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 39
Roper’s principal unsecured credit facility, $1.0 billion senior notes and senior subordinated convertible notes provide substantially all of
Roper’s daily external financing requirements. The interest rate on the borrowings under the credit facility is calculated based upon vari-
ous recognized indices plus a margin as defined in the credit agreement. At December 31, 2010, the weighted-average interest rate on the
revolver loan was 1.56%. At December 31, 2010, Roper’s debt consisted of $1.0 billion of senior notes, $91 million in senior subordinated
convertible notes and a $230 million revolver balance. In addition, the Company had $6.0 million of other debt in the form of capital
leases, several smaller facilities that allow for borrowings or the issuance of letters of credit in foreign locations to support Roper’s non-U.S.
businesses and $55 million of outstanding letters of credit at December 31, 2010.
In December 2003, the Company issued through a public offering $230 million of 3.75% subordinated convertible notes due in 2034 at
an original issue discount of 60.498% (the “Convertible Notes”). The Convertible Notes are subordinated in right of payment and collat-
eral to all of Roper’s existing and future senior debt. Cash interest on the notes was paid semi-annually until January 15, 2009, after
which interest is recognized at the effective rate of 3.75% and represents accrual of original issue discount, and only contingent cash
interest may be paid. Contingent cash interest may be paid during any six-month period if the average trading price of a note for a five
trading-day measurement period preceding the applicable six-month period equals 120% or more of the sum of the issue price, accrued
original issue discount and accrued cash interest, if any, for such note. The contingent cash interest payable per note in respect of any
six-month period will equal the annual rate of 0.25%. In accordance with this criterion, contingent interest has been paid for each six-
month period since January 15, 2009. Holders receive cash up to the value of the accreted principal amount of the notes converted and, at
the Company’s option, any remainder of the conversion value may be paid in cash or shares of common stock. Holders may require Roper
to purchase all or a portion of their notes on January 15, 2014 at a price of $475.66 per note, on January 15, 2019 at a price of $572.76 per
note, on January 15, 2024 at a price of $689.68 per note, and on January 15, 2029 at a price of $830.47 per note, in each case plus accrued
cash interest, if any, and accrued contingent cash interest, if any. The Company may only pay the purchase price of such notes in cash
and not in common stock. In addition, if Roper experiences a change in control, each holder may require Roper to purchase for cash all or
a portion of such holder’s notes at a price equal to the sum of the issue price plus accrued original issue discount for non-tax purposes,
accrued cash interest, if any, and accrued contingent cash interest, if any, to the date of purchase.
The Convertible Notes are classified as short-term debt as the notes became convertible on October 1, 2005 based upon the Company’s
common stock trading above the trigger price for at least 20 trading days during the 30 consecutive trading-day periods ending on
September 30, 2005.
The adoption of accounting guidance regarding convertible debt instruments that may be settled in cash upon either mandatory or
optional conversion on January 1, 2009 impacted the historical accounting for Roper’s Convertible Notes as of December 6, 2004, the
date that the notes were modified to allow holders to receive cash only for accreted principal upon settlement of the notes with any
remainder of the conversion value payable in cash or common stock, thus qualifying the notes for treatment under the new guidance.
The required retrospective adoption resulted in a decrease in long-term debt (debt discount) of $26.5 million, an increase in deferred
tax liabilities of $9.3 million, and an increase in additional paid-in capital of $17.3 million at December 9, 2004. The debt discount was
amortized using the effective interest rate method based on an annual effective rate of 7.0%, which represented a market interest rate for
similar debt without a conversion option on the modification date. The debt discount was amortized through January 15, 2009, the first
date that holders of the notes could exercise their put option and Roper could exercise its call option.
The Company was required to separately account for the liability and equity components of the Convertible Notes in a manner that
reflects Roper’s nonconvertible debt borrowing rate when interest cost is recognized. Interest expense related to the notes was as follows
(amounts in thousands):
Contractual (stated) interest
Amortization of debt discount
Interest expense
Years Ended December 31,
2010
$ 3,812
—
$ 3,812
2009
$ 5,209
301
$ 5,510
2008
$ 8,625
7,139
$ 15,764
page 40 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 41
At December 31, 2010, the conversion price on the outstanding notes was $424.84. If converted at December 31, 2010, the value would
have exceeded the $91 million principal amount of the notes by approximately $112 million and would result in the issuance of 1,481,000
shares of our common stock.
Our unsecured credit facility contains affirmative and negative covenants which, among other things, limit our ability to incur new debt,
prepay subordinated debt, make certain investments and acquisitions, sell assets and grant liens, make restricted payments (including
the payment of dividends on our common stock) and capital expenditures, or change our line of business. we also are subject to financial
covenants which require us to limit our consolidated total leverage ratio and to maintain a consolidated interest coverage ratio. The most
restrictive covenant is the consolidated total leverage ratio which is limited to 3.5.
The Company was in compliance with its debt covenants throughout the years ended December 31, 2010 and 2009.
Future maturities of long-term debt during each of the next five years ending December 31 and thereafter were as follows (in thousands):
2011
2012
2013
2014
2015
Thereafter
(10) FAIR VALUE
$
93,342
1,331
744,923
416
397
500,636
$1,341,045
Roper’s long-term debt at December 31, 2010 included $500 million of fixed-rate senior notes due 2019, with a fair value of approximately
$552 million, and $500 million of fixed-rate senior notes due 2013, with a fair value of approximately $552 million, based on the trading
prices of the notes. Short-term debt included $91 million of fixed-rate convertible notes which were at fair value due to the short term
nature of the debt. Most of Roper’s other borrowings at December 31, 2010 were at various interest rates that adjust relatively frequently
under its credit facility. The fair value for each of these borrowings at December 31, 2010 was estimated to be the face value of these
borrowings.
In October 2009, Roper entered into interest rate swap agreements with an aggregate notional amount of $500 million. The swaps are
designated as fair value hedges and effectively changed our $500 million senior notes due 2013 with a fixed interest rate of 6.625% to a
variable-rate obligation at a weighted-average spread of 4.377% plus LIBOR. The Company has determined the swaps to be Level 2 in the
FASB fair value hierarchy. To account for the fair value hedge, the swap is recorded at fair value in the balance sheet as an asset or liabil-
ity, and the changes in fair values of both the interest rate swap and the hedged senior notes due 2013 are recorded as interest expense.
The fair value of the swap was an asset balance of $14.1 million at December 31, 2010 and a liability balance of $3.2 million at December
31, 2009. The corresponding change in the fair value of the notes being hedged was a $14.1 million increase at December 31, 2010 and a
$3.2 million decrease at December 31, 2009. The impact on earnings was immaterial in the years ended December 31, 2010 and 2009.
(11) RETIREMENT AND OTHER BENEFIT PLANS
Roper maintains ten defined contribution retirement plans under the provisions of Section 401(k) of the Internal Revenue Code covering
substantially all U.S. employees not subject to collective bargaining agreements. Roper partially matches employee contributions. Costs
related to these plans were $14.0 million, $11.9 million and $12.9 million for 2010, 2009 and 2008, respectively.
Roper also maintains various defined benefit retirement plans covering employees of non-U.S. and certain U.S. subsidiaries and a plan
that supplements certain employees for the contribution ceiling applicable to the Section 401(k) plans. The costs and accumulated benefit
obligations associated with each of these plans were not material.
page 40 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 41
(12) STOCK-BASED COMPENSATION
The Roper Industries, Inc. Amended and Restated 2006 Incentive Plan (“2006 Plan”) is a stock-based compensation plan used to grant
incentive stock options, nonqualified stock options, restricted stock, stock appreciation rights or equivalent instruments to the Company’s
employees, officers, directors and consultants. The 2006 Plan replaced the Amended and Restated 2000 Incentive Plan (“2000 Plan”), and
no additional grants will be made from the 2000 Plan or the Non-employee Director Plan. The number of shares reserved for issuance
under the 2006 plan is 8,000,000, plus the 17,000 remaining shares that were available to grant under the 2000 Plan at June 28, 2006,
plus any shares underlying outstanding awards under the 2000 plan that terminate or expire unexercised, or are cancelled, forfeited or
lapse for any reason subsequent to June 28, 2006. At December 31, 2010, 3,522,000 shares were available to grant.
In the Roper Industries, Inc., Employee Stock Purchase Plan (“ESPP”), all employees in the U.S. and Canada are eligible to designate up
to 10% of eligible earnings to purchase Roper’s common stock at a 5% discount to the average closing price of its common stock at the
beginning and end of a quarterly offering period. The common stock sold to the employees may be either treasury stock, stock purchased
on the open market, or newly issued shares.
Stock based compensation expense for the years ended December 31, 2010, 2009 and 2008 was as follows (in millions):
Stock based compensation
Tax benefit recognized in net income
windfall tax benefit/(shortfall), net
2010
$25.2
8.8
7.3
2009
$27.5
9.6
2.0
2008
$30.9
10.8
5.6
Stock Options—Stock options are typically granted at prices not less than 100% of market value of the underlying stock at the date of
grant. Stock options typically vest over a period of up to three to five years from the grant date and generally expire seven to ten years
after the grant date. The Company recorded $9.0 million, $9.1 million, and $8.2 million of compensation expense relating to outstanding
options during 2010, 2009 and 2008, respectively, as a component of corporate and certain segment general and administrative expenses.
The Company estimates the fair value of its option awards using the Black-Scholes option valuation model that uses the assumptions
noted in the following table. The stock volatility for each grant is measured using the weighted average of historical daily price changes of
the Company’s common stock over the most recent period equal to the expected life of the grant. The expected term of options granted is
derived from historical data to estimate option exercises and employee terminations, and represents the period of time that options granted
are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield
curve in effect at the time of grant. The weighted-average fair value of options granted in 2010, 2009 and 2008 were calculated using
the following weighted-average assumptions:
weighted-average fair value ($)
Risk-free interest rate (%)
Average expected option life (years)
Expected volatility (%)
Expected dividend yield (%)
2010
17.00
2.32
5.38
34.55
0.72
2009
12.68
1.78
5.37
32.24
0.78
2008
12.83
2.87
5.02
21.10
0.53
The following table summarizes the Company’s activities with respect to its stock option plans for the year ended December 31, 2010.
Outstanding at January 1, 2010
Granted
Exercised
Canceled
Outstanding at December 31, 2010
Exercisable at December 31, 2010
Number
of Shares
4,238,000
614,000
(865,000)
(54,000)
3,933,000
2,432,000
weighted-Average
Exercise Price
weighted-Average
Aggregate
Per Share
Contractual Term
Intrinsic Value
$39.39
51.75
33.44
54.89
42.32
$37.09
5.37
3.63
$134,171,000
$ 95,666,000
page 42 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 43
The following table summarizes information for stock options outstanding at December 31, 2010:
Exercise Price
$14.73–20.00
20.01–30.00
30.01–40.00
40.01–50.00
50.01–60.00
60.01–66.44
$14.73–66.44
Outstanding Options
Exercisable Options
Average
Average Remaining
Average
Number
Exercise Price
Life (Years)
Number
Exercise Price
334,000
586,000
276,000
779,000
1,914,000
44,000
3,933,000
$18.98
21.79
31.91
42.69
53.53
64.01
$42.32
1.9
1.8
1.3
5.7
7.5
8.3
5.4
334,000
586,000
276,000
445,000
777,000
14,000
2,432,000
$18.98
21.79
31.91
43.29
54.23
63.99
$37.09
At December 31, 2010, there was $12.8 million of total unrecognized compensation expense related to nonvested options granted to both
employees and directors under the Company’s share-based payment plans. That cost is expected to be recognized over a weighted-average
period of 1.8 years. The total intrinsic value of options exercised in 2010, 2009 and 2008 was $27.5 million, $10.5 million and $16.3 million,
respectively. Cash received from option exercises under all plans in 2010 and 2009 was approximately $29.0 million and $10.5 million,
respectively.
Restricted Stock Grants—During 2010 and 2009, the Company granted 260,000 and 206,000 shares, respectively, of restricted stock to
certain employee and director participants under the 2006 Plan. Restricted stock grants generally vest over a period of 1 to 3 years. The
weighted-average fair value of the shares granted in 2010 was $52.92 per share. The Company recorded approximately $16.2 million,
$18.3 million and $22.7 million of compensation expense related to outstanding shares of restricted stock held by employees and directors
during 2010, 2009 and 2008, respectively. A summary of the Company’s nonvested shares activity for 2010 is as follows:
Nonvested at January 1, 2010
Granted
Vested
Forfeited
Nonvested at December 31, 2010
Number
of Shares
701,000
260,000
(290,000)
(1,000)
670,000
weighted-Average
Fair Value
$51.83
52.92
59.18
46.29
$52.64
At December 31, 2010, there was $13.2 million of total unrecognized compensation expense related to nonvested shares granted to both
employees and directors under the Company’s share-based payment plans. That cost is expected to be recognized over a weighted-average
period of 2.0 years. There were 290,000 and 295,000 shares that vested during 2010 and 2009, respectively. Unrecognized compensation
expense related to nonvested shares of restricted stock grants is recorded as a reduction to additional paid-in capital in stockholders’
equity at December 31, 2010.
Employee Stock Purchase Plan—During 2010, 2009 and 2008, participants of the ESPP purchased 29,000, 38,000 and 34,000 shares,
respectively, of Roper’s common stock for total consideration of $1.7 million, $1.7 million, and $1.9 million, respectively. All of these
shares were purchased from Roper’s treasury shares. The Company had no compensation expense relating to the stock purchase plan
during 2010, 2009 and 2008.
(13) COMMON STOCK TRANSACTIONS
On December 29, 2009, the Company completed a public offering of 2,300,000 shares of common stock for proceeds of approximately
$121.4 million, net of $0.8 million of costs associated with the offering.
page 42 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 43
(14) CONTINGENCIES
Roper, in the ordinary course of business, is the subject of, or a party to, various pending or threatened legal actions, including product
liability and employment practices. It is vigorously contesting all lawsuits that, in general, are based upon claims of the kind that have
been customary over the past several years. After analyzing the Company’s contingent liabilities on a gross basis and, based upon past
experience with resolution of its product liability and employment practices claims and the limits of the primary, excess, and umbrella
liability insurance coverages that are available with respect to pending claims, management believes that adequate provision has been
made to cover any potential liability not covered by insurance, and that the ultimate liability, if any, arising from these actions should not
have a material adverse effect on the consolidated financial position, results of operations or cash flows of Roper.
Over recent years there has been a significant increase in certain U.S. states in asbestos-related litigation claims against numerous indus-
trial companies. Roper or its subsidiaries have been named defendants in some such cases. No significant resources have been required
by Roper to respond to these cases and Roper believes it has valid defenses to such claims and, if required, intends to defend them vigor-
ously. Given the state of these claims it is not possible to determine the potential liability, if any.
Roper’s rent expense was approximately $29.1 million, $27.0 million and $24.8 million for 2010, 2009 and 2008, respectively. Roper’s
future minimum property lease commitments totaled $111.8 million at December 31, 2010. These commitments included $28.0 million
in 2011, $22.8 million in 2012, $18.5 million in 2013, $14.0 million in 2014, $10.7 million in 2015 and $17.8 million thereafter.
A summary of the Company’s warranty accrual activity is presented below (in thousands):
Balance, beginning of year
Additions charged to costs and expenses
Deductions
Other
Balance, end of year
2010
2009
2008
$ 7,341
$ 9,885
$ 8,486
5,671
(5,895)
(79)
4,416
(7,659)
699
9,920
(8,415)
(106)
$ 7,038
$ 7,341
$ 9,885
Other included warranty balances at acquired businesses at the dates of acquisition, the effects of foreign currency translation adjustments,
reclassifications and other.
At December 31, 2010, the Company had outstanding surety bonds of $317 million.
(15) SEGMENT AND GEOGRAPHIC AREA INFORMATION
Roper’s operations are reported in four segments around common customers, markets, sales channels, technologies and common cost
opportunities. The segments are: Industrial Technology, Energy Systems and Controls, Medical & Scientific Imaging, and RF Technology.
Products included within the Industrial Technology segment are industrial pumps, flow measurement and metering equipment, industrial
valves and controls, and equipment and consumables for materials analysis and industrial leak testing. The Energy Systems and Controls
segment’s products include control systems, equipment and consumables for fluid properties testing, vibration sensors and other non-
destructive inspection and measurement products and services. The Medical & Scientific Imaging segment offers medical products and
software, high performance digital imaging products and software and handheld and vehicle mounted computers. The RF Technology
segment includes products and systems related to comprehensive toll and traffic systems and processing, security and access control,
campus card systems, software-as-a-service applications in the freight matching and food industries and utility metering and remote
monitoring applications. Roper’s management structure and internal reporting are aligned consistently with these four segments.
There were no material transactions between Roper’s business segments during 2010, 2009 and 2008. Sales between geographic areas
are primarily of finished products and are accounted for at prices intended to represent third-party prices. Operating profit by business
segment and by geographic area is defined as net sales less operating costs and expenses. These costs and expenses do not include
unallocated corporate administrative expenses. Items below income from operations on Roper’s statement of earnings are not allocated
to business segments.
Identifiable assets are those assets used primarily in the operations of each business segment or geographic area. Corporate assets were
principally comprised of cash, recoverable insurance claims, deferred compensation assets, unamortized deferred financing costs and
property and equipment.
page 44 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 45
Selected financial information by business segment for 2010, 2009 and 2008 follows (in thousands):
Industrial
Technology
Energy Systems
and Controls
Medical
and Scientific
Imaging
RF
Technology
Corporate
Total
2010
Net sales
Operating profit
Assets:
Operating assets
Intangible assets, net
Other
Total
Capital expenditures
Depreciation and other
amortization
2009
Net sales
Operating profit
Assets:
Operating assets
Intangible assets, net
Other
Total
Capital expenditures
Depreciation and other amortization
2008
Net sales
Operating profit
Assets:
Operating assets
Intangible assets, net
Other
Total
Capital expenditures
Depreciation and other amortization
$607,564
162,009
179,458
610,542
47,451
8,849
23,660
$ 536,219
123,959
165,651
635,147
(51)
13,977
24,636
$ 687,622
178,270
184,445
639,988
6,814
12,385
24,899
$503,897
120,427
166,554
518,849
76,686
3,466
18,472
$ 440,919
92,788
166,461
532,022
8,016
3,185
18,736
$ 548,214
126,609
199,049
538,367
3,522
6,618
19,568
790,500
3,832,293
(36,505)
4,586,288
28,591
123,021
$548,718
130,558
170,955
791,611
24,694
$ 725,933
150,711
$ —
(49,411)
$2,386,112
514,294
256,016
1,911,291
(91,099)
17,517
—
(94,237)
7,269
8,976
27,991
52,709
31
189
$ 354,776
74,183
$ 717,754
154,430
$ —
(49,964)
$2,049,668
395,396
172,805
787,884
7,219
2,126
16,691
238,249
1,302,279
(27,825)
6,291
43,183
13,894
—
(33,281)
306
202
757,060
3,257,332
(45,922)
3,968,470
25,885
103,448
$ 375,542
74,739
$ 694,993
159,787
$ —
(53,244)
$2,306,371
486,161
126,657
473,655
24,322
2,895
17,780
246,785
1,270,862
(12,975)
7,905
38,439
6,375
—
(8,510)
244
2,422
763,311
2,922,872
13,173
3,699,356
30,047
103,108
Summarized data for Roper’s U.S. and foreign operations (principally in Canada, Europe and Asia) for 2010, 2009 and 2008, based upon
the country of origin of the Roper entity making the sale, was as follows (in thousands):
2010
Sales to unaffiliated customers
Sales between geographic areas
Net sales
Long-lived assets
2009
Sales to unaffiliated customers
Sales between geographic areas
Net sales
Long-lived assets
2008
Sales to unaffiliated customers
Sales between geographic areas
Net sales
Long-lived assets
United States
Non-U.S.
Eliminations
Total
$1,758,797
125,202
$ 627,315
174,265
$ —
(299,467)
$ 2,386,112
—
$1,883,999
$ 801,580
$(299,467)
$ 2,386,112
$ 104,147
$ 29,834
$ —
$ 133,981
$ 1,526,390
87,323
$ 523,278
126,093
$ —
(213,416)
$ 2,049,668
—
$ 1,613,713
$ 649,371
$ (213,416)
$ 2,049,668
$ 124,382
$ 28,922
$ —
$ 153,304
$ 1,709,844
102,954
$ 596,507
182,551
$ —
(285,505)
$ 2,306,351
—
$ 1,812,798
$ 779,058
$ (285,505)
$ 2,306,351
$ 122,005
$ 29,131
$ —
$ 151,136
page 44 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 45
Export sales from the United States during the years ended December 31, 2010, 2009 and 2008 were $358 million, $301 million and $358
million, respectively. In the year ended December 31, 2010, these exports were shipped primarily to Asia (34%), Europe (27%), Canada
(11%), Middle East (11%), South America (6%) and other (11%).
Sales to customers outside the United States accounted for a significant portion of Roper’s revenues. Sales are attributed to geographic
areas based upon the location where the product is ultimately shipped. Roper’s net sales for the years ended December 31, 2010, 2009 and
2008 are shown below by region, except for Canada, which is presented separately as it is the only country in which Roper has had greater
than 5% of total sales for any of the three years presented (in thousands).
2010
Canada
Europe
Asia
Middle East
Rest of the world
Total
2009
Canada
Europe
Asia
Middle East
Rest of the world
Total
2008
Canada
Europe
Asia
Middle East
Rest of the world
Total
Industrial
Technology
Energy Systems
and Scientific
RF
and Controls
Imaging
Technology
Total
Medical
$ 44,678
$ 27,360
91,815
49,232
2,805
22,328
135,019
100,094
34,912
55,280
$ 15,306
126,116
79,343
5,853
15,169
$ 35,270
$ 122,614
64,605
5,389
22,387
10,542
417,555
234,058
65,957
103,319
$210,858
$352,665
$241,787
$138,193
$ 943,503
$ 40,121
79,000
41,364
4,040
12,256
$ 25,746
118,770
85,323
28,121
48,657
$ 7,251
$ 30,184
$ 103,302
98,328
65,687
2,162
9,424
48,849
6,157
28,316
11,042
344,947
198,531
62,639
81,379
$ 176,781
$ 306,617
$ 182,852
$ 124,548
$ 790,798
$ 39,831
110,590
50,333
3,766
27,406
$ 40,951
171,627
90,265
23,506
58,330
$ 8,814
111,373
69,820
1,576
7,732
$ 30,909
$ 120,505
21,372
4,473
34,418
11,993
414,962
214,891
63,266
105,461
$ 231,926
$ 384,679
$ 199,315
$ 103,165
$ 919,085
(16) CONCENTRATION OF RISK
Financial instruments which potentially subject the Company to credit risk consist primarily of cash, cash equivalents and trade receivables.
The Company maintains cash and cash equivalents with various major financial institutions. Cash equivalents include investments in
commercial paper of companies with high credit ratings, investments in money market securities and securities backed by the U.S.
Government. At times such amounts may exceed the F.D.I.C. limits. The Company limits the amount of credit exposure with any one
financial institution and believes that no significant concentration of credit risk exists with respect to cash investments.
Trade receivables subject the company to the potential for credit risk with customers. To reduce credit risk, the Company performs
ongoing evaluations of its customers’ financial condition.
page 46 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 47
(17) QUARTERLY FINANCIAL DATA (UNAUDITED)
(In thousands, except per share data)
2010
Net sales
Gross profit
Income from operations
Net earnings
Earnings from continuing operations per common share:
Basic
Diluted
2009
Net sales
Gross profit
Income from operations
Net earnings
Earnings from continuing operations per common share:
Basic
Diluted
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
$ 534,441
$ 567,104
$ 605,088
$ 679,479
279,565
100,716
59,725
301,947
119,187
71,281
321,749
128,233
84,263
371,865
166,158
107,311
0.64
0.62
0.76
0.74
0.89
0.87
1.13
1.10
$ 505,444
251,136
86,792
51,559
$ 504,910
255,070
95,964
59,588
$ 485,676
245,520
91,872
56,410
$ 553,638
291,412
120,768
71,924
0.57
0.56
0.66
0.64
0.62
0.61
0.79
0.77
The sum of the four quarters may not agree with the total for the year due to rounding.
SCHEDULE II—CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 2010, 2009 and 2008
(In thousands)
Allowance for doubtful accounts and sales allowances
2010
2009
2008
Reserve for inventory obsolescence
2010
2009
2008
Balance at
Beginning
of Year
$11,187
12,658
11,907
$29,037
30,108
28,390
Additions
Charged to Costs
and Expenses
Deductions
Other
$ 1,558
2,762
5,953
$12,905
8,789
6,321
$ (2,900)
$ 504
(4,874)
(5,402)
$ (9,125)
(10,508)
(4,063)
641
200
$(301)
648
(540)
Balance at
End of Year
$10,349
11,187
12,658
$32,516
29,037
30,108
Deductions from the allowance for doubtful accounts represented the net write-off of uncollectible accounts receivable. Deductions from
the inventory obsolescence reserve represented the disposal of obsolete items.
Other included the allowance for doubtful accounts and reserve for inventory obsolescence of acquired businesses at the dates of acqui-
sition, the effects of foreign currency translation adjustments for those companies whose functional currency was not the U.S. dollar,
reclassifications and other.
page 46 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 47
ITEM 9. CHANGES IN AND DISAGREEMENTS wITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in accountants or disagreements with accountants on accounting and financial disclosure.
ITEM 9A. CONTROLS AND PROCEDURES
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate control over financial reporting, as such term is defined in
Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our principal
executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial
reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission. Based on our evaluation under the framework in Internal Control—Integrated Framework, our management
concluded that our internal control over financial reporting was effective as of December 31, 2010. The Company’s internal control over
financial reporting as of December 31, 2010 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting
firm, as stated in their report which is included herein.
Management excluded iTrade from its assessment of internal control over financial reporting as of December 31, 2010, because it was
acquired by the Company in a purchase business combination during 2010. iTrade is a wholly-owned subsidiary whose excluded aggregate
assets represent 0.3%, and whose aggregate total revenues represent 1.4%, of the related consolidated financial statement amounts as of
and for the year ended December 31, 2010.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As required by SEC rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as
of the end of the period covered by this report. This evaluation was carried out under the supervision and with the participation of our
management, including our principal executive officer and principal financial officer. Based on this evaluation, we have concluded that
our disclosure controls and procedures are effective as of December 31, 2010.
Disclosure controls and procedures are our controls and other procedures designed to ensure that information required to be disclosed by
us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that we file or submit
under the Exchange Act are accumulated and communicated to our management, including our principal executive officer and principal
financial officer, as appropriate, to allow timely decisions regarding required disclosure.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There was no change in the Company’s internal control over financial reporting that occurred during the fourth quarter that has materi-
ally affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
There were no disclosures of any information required to be filed on Form 8-K during the fourth quarter of 2010 that were not filed.
page 48 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 49
PART III
Except as otherwise indicated, the following information required by the Instructions to Form 10-K is incorporated herein by reference
from the sections of the Roper Proxy Statement for the annual meeting of shareholders to be held on June 1, 2011, as specified below:
ITEM 10. DIRECTORS, ExECUTIVE OFFICERS AND CORPORATE GOVERNANCE
“Proposal 1: Election of Directors;” “Section 16(a) Beneficial Ownership Reporting Compliance;” “Corporate Governance;” “Executive
Officers;” “Audit Committee Report;” and “Board Committees and Meetings.”
ITEM 11. ExECUTIVE COMPENSATION
“Compensation Discussion and Analysis;” “Executive Compensation;” “Director Compensation;” “Compensation Committee Interlocks
and Insider Participation;” and “Compensation Committee Report.”
ITEM 12. SECURITY OwNERSHIP OF CERTAIN BENEFICIAL OwNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
“Beneficial Ownership.”
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table provides information as of December 31, 2010 regarding compensation plans (including individual compensation
arrangements) under which our equity securities are authorized for issuance.
(a)
(b)
(c)
Number of Securities to
weighted-Average
Number of Securities Remaining
Be Issued Upon Exercise
Exercise Price of
Available for Future Issuance Under
of Outstanding Options,
Outstanding Options,
Equity Compensation Plans (Excluding
Plan Category
warrants and Rights
warrants and Rights
Securities Reflected in Column (a))
Equity Compensation Plans Approved
by Shareholders(1)
Equity Compensation Plans Not Approved
by Shareholders
Total
3,933,000
—
3,933,000
$42.32
—
$42.32
3,522,000
—
3,522,000
(1) Consists of the 1991 Stock Option Plan, the Amended and Restated 2000 Stock Incentive Plan, the 1993 Stock Plan for Non-Employee Directors (no additional equity
awards may be granted under these three plans) and the 2006 Incentive Plan.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
DIRECTOR INDEPENDENCE
“Review and Approval of Related Party Transactions” and “Director Independence.”
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Fees paid to the Company’s independent registered public accounting firm are disclosed under the caption “Proposal 2: Ratification of
the Appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for the Year Ending December
31, 2010.”
page 48 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 49
PART IV
ITEM 15. ExHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as a part of this Annual Report.
(1) Consolidated Financial Statements: The following consolidated financial statements are included in Part II, Item 8 of this report.
Consolidated Balance Sheets as of December 31, 2010 and 2009
Consolidated Statements of Earnings for the years ended December 31, 2010, 2009 and 2008
Consolidated Statements of Stockholders’ Equity and Comprehensive Earnings for the years ended December 31, 2010, 2009
and 2008
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008
Notes to Consolidated Financial Statements
(2) Consolidated Valuation and Qualifying Accounts for the years ended December 31, 2010, 2009 and 2008
(b)
Exhibits
Exhibit No.
Description of Exhibit
(a)3.1
(b)3.2
(c)3.3
(d)3.4
(e)3.5
(f )4.2
4.3
(g)4.4
(h)4.5
(i)4.6
( j)4.7
(k)4.8
(l)4.9
Amended and Restated Certificate of Incorporation.
Amended and Restated By-Laws.
Certificate of Amendment, amending Restated Certificate of Incorporation.
Certificate Eliminating References to Roper Industries, Inc.’s Series A Preferred Stock from the Certificate of
Incorporation of Roper Industries, Inc. dated November 16, 2006.
Certificate of Amendment, amending Restated Certificate of Incorporation.
Indenture between Roper Industries, Inc. and SunTrust Bank, dated as of November 28, 2003.
Form of Debt Securities (included in Exhibit 4.2).
First Supplemental Indenture between Roper Industries, Inc. and SunTrust Bank, dated as of December 29, 2003.
Second Supplemental Indenture between Roper Industries, Inc. and Sun Trust Bank, dated as of December 7, 2004.
Indenture between Roper Industries, Inc. and wells Fargo Bank, dated as of August 4, 2008.
Form of Note.
Form of 6.625% Notes due 2013.
Form of 6.25% Senior Notes due 2019.
(m)10.01
Form of Amended and Restated Indemnification Agreement.†
(n)10.02
(o)10.03
(p)10.04
(q)10.05
(r)10.06
Employee Stock Purchase Plan, as amended and restated.†
2000 Stock Incentive Plan, as amended.†
Non-Qualified Retirement Plan, as amended.†
Brian D. Jellison Employment Agreement, dated as of December 29, 2008.†
Timothy J. winfrey offer letter dated May 20, 2002.†
page 50 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 51
Exhibit No.
Description of Exhibit
(continued)
(s)10.07
(t)10.08
(u)10.09
(v)10.10
(v)10.11
(w)10.12
(x)10.13
(y)10.14
(y)10.15
(y)10.16
(y)10.17
(y)10.18
(z)10.19
(aa)10.20
(bb)10.21
21.1
23.1
31.1
31.2
32.1
Credit Agreement, dated as of July 7, 2008, among Roper Industries, Inc., as parent borrower, the foreign subsidiary
borrowers of Roper Industries, Inc. from time to time parties thereto, the several lenders from time to time parties
thereto, Bank of Tokyo-Mitsubishi UFJ Trust Company and BNP Paribas, as documentation agents, wachovia Capital
Markets, LLC and Banc of America Securities, LLC, as syndication agents, and JPMorgan Chase Bank, N.A., as admin-
istrative agent.
Form of Executive Officer Restricted Stock Award Agreement.†
Brian D. Jellison Restricted Stock Unit Award Agreement.†
Offer letter for John Humphrey, dated March 31, 2006.†
2006 Incentive Plan, as amended.†
Form of Restricted Stock Agreement for Employee Directors.†
Form of Restricted Stock Agreement for Non-Employee Directors.†
Form of Restricted Stock Agreement for Employees.†
Form of Incentive Stock Option Agreement.†
Form of Non-Statutory Stock Option Agreement.†
Director Compensation Plan, as amended.†
David B. Liner offer letter dated July 21, 2005.†
Amendment to John Humphrey offer letter.†
Amendment to Timothy J. winfrey offer letter.†
Amendment to David B. Liner offer letter.†
List of Subsidiaries, filed herewith.
Consent of Independent Registered Public Accounting Firm, filed herewith.
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer, filed herewith.
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer, filed herewith.
Section 1350 Certification of Chief Executive and Chief Financial Officers, filed herewith.
101.INS
xBRL Instance Document, furnished herewith.
101.SCH
xBRL Taxonomy Extension Schema Document, furnished herewith.
101.CAL
101.DEF
101.LAB
101.PRE
xBRL Taxonomy Extension Calculation Linkbase Document, furnished herewith.
xBRL Taxonomy Extension Definition Linkbase Document, furnished herewith.
xBRL Taxonomy Extension Label Linkbase Document, furnished herewith.
xBRL Taxonomy Extension Presentation Linkbase Document, furnished herewith.
(a) Incorporated herein by reference to Exhibit 3.1 to the Roper Industries, Inc. Quarterly Report on Form 10-Q filed March 17, 2003 (file no. 1-12273),
as amended by the Certificate Eliminating References to the Company’s Series A Preferred Stock from the Certificate of Incorporation of Roper
Industries, Inc. dated November 16, 2006, incorporated herein by reference to Exhibit 3.1 to the Roper Industries, Inc. Current Report on Form 8-K
filed November 16, 2006 (file no. 1-12273).
(b) Incorporated herein by reference to Exhibit 3.1 to the Roper Industries, Inc. Current Report on Form 8-K filed February 19, 2009 (file no. 1-12273).
(c) Incorporated herein by reference to Exhibit 10.1 to the Roper Industries, Inc. Quarterly Report on Form 10-Q filed August 9, 2006 (file no. 1-12273)
(d) Incorporated herein by reference to Exhibit 3.1 to the Roper Industries, Inc. Current Report on Form 8-K filed November 17, 2006 (file no. 1-12273).
page 50 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 51
(e) Incorporated herein by reference to Exhibit 3.1 to the Roper Industries, Inc. Quarterly Report on Form 10-Q filed on August 9, 2007 (file no.
1-12273).
(f) Incorporated herein by reference to Exhibit 4.2 to the Roper Industries, Inc. Pre-Effective Amendment No. 1 to the Registration Statement on Form
S-3 filed November 28, 2003 (file no. 333-110491).
(g) Incorporated herein by reference to Exhibit 4.1 to the Roper Industries, Inc. Current Report on Form 8-K filed January 13, 2004 (file no. 1-12273).
(h) Incorporated herein by reference to Exhibit 4.1 to the Roper Industries, Inc. Current Report on Form 8-K filed December 7, 2004 (file no. 1-12273).
(i) Incorporated herein by reference to Exhibit 4.2 to the Roper Industries, Inc. Quarterly Report on Form 10-Q filed on November 7, 2008 (file no. 1-12273).
(j) Incorporated herein by reference to Exhibit 4.2 to the Registration Statement on Form S-3 filed July 29, 2008 (file no. 333-152590).
(k) Incorporated herein by reference to Exhibit 4.09 to the Roper Industries, Inc. Current Report on Form 8-K filed August 4, 2008 (file no. 1-12273).
(l) Incorporated herein by reference to Exhibit 4.1 to the Roper Industries, Inc. Current Report on Form 8-K filed September 2, 2009 (file no. 1-12273).
(m) Incorporated herein by reference to Exhibit 10.04 to the Roper Industries, Inc. Quarterly Report on Form 10-Q filed August 31, 1999 (file no.
1-12273).
(n) Incorporated herein by reference to Exhibit 10.1 to the Roper Industries, Inc. Quarterly Report on Form 10-Q filed November 5, 2010 (file no. 1-12273).
(o) Incorporated herein by reference to Exhibit 10.05 to the Roper Industries, Inc. Annual Report on Form 10-K filed March 2, 2009 (file no. 1-12273).
(p) Incorporated herein by reference to Exhibit 10.06 to the Roper Industries, Inc. Annual Report on Form 10-K filed March 2, 2009 (file no. 1-12273).
(q) Incorporated herein by reference to Exhibit 10.07 to the Roper Industries, Inc. Annual Report on Form 10-K filed March 2, 2009 (file no. 1-12273).
(r) Incorporated herein by reference to Exhibits 10.06 and 10.09 to the Roper Industries, Inc. Annual Report on Form 10-K/A filed November 3, 2003
(file no. 1-12273).
(s) Incorporated herein by reference to Exhibit 10.1 to the Roper Industries, Inc. Current Report on Form 8-K filed July 7, 2008 (file no. 1-12273).
(t) Incorporated herein by reference to Exhibits 99.1 and 99.2 to the Roper Industries, Inc. Current Report on Form 8-K filed December 30, 2004
(file no. 1-12273).
(u) Incorporated herein by reference to Exhibit 10.1 to the Roper Industries, Inc. Quarterly Report on Form 10-Q filed August 9, 2006 (file no. 1-12273).
(v) Incorporated herein by reference to Exhibit 10.1 to the Roper Industries, Inc. Quarterly Report on Form 10-Q filed November 7, 2008 (file no. 1-12273).
(w) Incorporated herein by reference to Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to the Roper Industries, Inc. Current Report on Form 8-K filed December
6, 2006 (file no. 1-12273).
(x) Incorporated herein by reference to Exhibit 10.01 to the Roper Industries, Inc. Quarterly Report on Form 10-Q filed May 7, 2009 (file no. 1-12273).
(y) Incorporated herein by reference to Exhibit 10.20 to the Roper Industries, Inc. Annual Report on Form 10-K filed March 2, 2009 (file no. 1-12273).
(z) Incorporated herein by reference to Exhibit 10.21 to the Roper Industries, Inc. Annual Report on Form 10-K filed March 2, 2009 (file no. 1-12273).
(aa) Incorporated herein by reference to Exhibit 10.22 to the Roper Industries, Inc. Annual Report on Form 10-K filed March 2, 2009 (file no. 1-12273).
(bb) Incorporated herein by reference to Exhibit 10.23 to the Roper Industries, Inc. Annual Report on Form 10-K filed March 2, 2009 (file no. 1-12273).
† Management contract or compensatory plan or arrangement.
page 52 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 53
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Roper has duly caused this Report to be
signed on its behalf by the undersigned, therewith duly authorized.
ROPER INDUSTRIES, INC.
(Registrant)
By: /S/ BRIAN D. JELLISON
Brian D. Jellison, President and Chief Executive Officer
February 25, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on
behalf of Roper and in the capacities and on the dates indicated.
/S/ BRIAN D. JELLISON
Brian D. Jellison
/S/ JOHN HUMPHREY
John Humphrey
/S/ PAUL J. SONI
Paul J. Soni
/S/ DAVID w. DEVONSHIRE
President, Chief Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer)
Vice President, Chief Financial Officer
(Principal Financial Officer)
Vice President and Controller
(Principal Accounting Officer)
February 25, 2011
February 25, 2011
February 25, 2011
David w. Devonshire
Director
February 25, 2011
/S/ JOHN F. FORT, III
John F. Fort, III
/S/ ROBERT D. JOHNSON
Robert D. Johnson
/S/ ROBERT E. KNOwLING
Robert E. Knowling
/S/ wILBUR J. PREZZANO
wilbur J. Prezzano
/S/ RICHARD F. wALLMAN
Richard F. wallman
/S/ CHRISTOPHER wRIGHT
Christopher wright
Director
Director
Director
Director
Director
Director
February 25, 2011
February 25, 2011
February 25, 2011
February 25, 2011
February 25, 2011
February 25, 2011
page 52 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 53
ExHIBIT 31.1
I, Brian D. Jellison, certify that:
1. I have reviewed this Annual Report on Form 10-K of Roper Industries, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of finan-
cial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equiv-
alent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: February 25, 2011
/s/ Brian D. Jellison
Brian D. Jellison
Chairman of the Board, President and Chief Executive Officer
(Principal Executive Officer)
page 54 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 55
ExHIBIT 31.2
I, John Humphrey, certify that:
1. I have reviewed this Annual Report on Form 10-K of Roper Industries, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of finan-
cial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equiv-
alent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: February 25, 2011
/s/ John Humphrey
John Humphrey
Vice President, Chief Financial Officer
(Principal Financial Officer)
page 54 Roper Industries, Inc. 2010 Annual Report
Roper Industries, Inc. 2010 Annual Report page 55
ExHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OxLEY ACT OF 2002
In connection with the Annual Report of Roper Industries, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2010,
as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Brian D. Jellison, Chief Executive Officer of the
Company, and John Humphrey, Chief Financial Officer of the Company, both hereby certifies, pursuant to 18 U.S.C. 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of
the Company.
Date: February 25, 2011
/s/ Brian D. Jellison
Brian D. Jellison
Chairman of the Board, President and Chief Executive Officer
(Principal Executive Officer)
/s/ John Humphrey
John Humphrey
Vice President, Chief Financial Officer
(Principal Financial Officer)
This certificate is being made for the exclusive purpose of compliance of the Company with the requirements of Section 906 of the
Sarbanes-Oxley Act of 2002, and may not be disclosed, distributed or used by any person or for any reason other than specifically
required by law.
page 56 Roper Industries, Inc. 2010 Annual Report
Roper 2010 Annual Report
Board of Directors
Brian D. Jellison(4)
David W. Devonshire(1) (4)
John F. Fort III(2)
Robert D. Johnson(2) (4)
Robert E. knowling, Jr.(1) (3)
Wilbur J. Prezzano(2) (3) (4)
Richard Wallman(1) (3)
Christopher Wright(1) (3)
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
(3) Member of the Nominating and Governance Committee
(4) Member of the Executive Committee
Shareholder Information
ticker Symbol: ROP
Roper’s common stock is listed on the New York Stock
Exchange with options trading conducted on the Chicago
Board Options Exchange.
Annual Report on Form 10-K
Any shareholder wishing a copy of Roper’s 2010 Annual
Report on Form 10-k filed with the Securities and Exchange
Commission may obtain one without charge by contacting:
Investor Relations
Roper Industries, Inc.
6901 Professional Parkway East, Suite 200
Sarasota, Florida 34240
+1 (941) 556-2601
Investor-relations@roperind.com
transfer Agent
American Stock Transfer & Trust Company
59 Maiden Lane
New York, New York 10038
+1 (800) 937-5449
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLC
Atlanta, Georgia U.S.A.
m
o
c
.
s
r
o
n
n
o
c
-
n
a
r
r
u
c
.
w
w
w
/
.
c
n
I
,
s
r
o
n
n
o
C
&
n
a
r
r
u
C
y
b
n
g
i
s
e
D
t
r
o
p
e
R
l
a
u
n
n
A
Roper Industries, Inc.
6901 Professional Parkway East
Suite 200
Sarasota, Florida 34240
Phone: +1 (941) 556-2601
Fax: +1 (941) 556-2670
www.roperind.com