ROPER TECHNOLOGIES INCROP
ROPER TECHNOLOGIES INC Fair Value Disclosure
Fair Value
Financial assets and liabilities are valued using market prices on active markets (Level 1), less active markets (Level 2), and little or no market activity (Level 3). Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments, identical instruments in less active markets, or models using market observable inputs. Level 3 instrument valuations typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.
Debt – As of December 31, 2025 and 2024, the total estimated fair value of Roper’s fixed-rate senior notes was $8,287.4 and $7,005.2, respectively. The fair values of the senior notes are based on the trading prices of each series of notes, which the Company has determined to be Level 2 in the FASB fair value hierarchy.
Indicor Equity Investment – In November 2022, Roper completed the divestiture of a majority 51% equity stake in Indicor to CD&R. In connection with the Indicor Transaction, the Company initially retained a 49% equity interest in Indicor valued at $535.0 as of the transaction close date. This initial valuation was based on the implied equity value associated with the sale price of the 51% equity interest in Indicor to CD&R for approximately $829, inclusive of the Unit Adjustment received by CD&R as discussed below. During 2023, we revised our valuation methodology to utilize the market multiple approach consisting of comparable guideline public companies revenue and earnings multiples to estimate the fair value of this investment, net of the Unit Adjustment discussed below. Our valuation methodology was updated in 2023 given the passage of time since the transaction date and in consideration of observable market data, including Indicor’s divestiture of its CCC business unit to Honeywell International Inc. on June 30, 2023 for approximately $670.
As part of this investment, Roper is required to make quarterly payments (“Unit Adjustment”), to CD&R, either (i) in cash, with total payments of approximately $29 per year on a pretax basis, or (ii) in-kind through the transfer of Roper’s equity interests in Indicor to CD&R, of approximately 1.7% ownership interest on an annual basis. Roper intends to continue making these quarterly payments in-kind. Roper’s valuation of the Unit Adjustment is based on an expected investment horizon of 5 years from the date of the Indicor Transaction. The Company’s obligation to make such quarterly payments will cease upon the earlier of:
•Indicor achieving $425.0 of earnings before interest, taxes, depreciation, and amortization in any three twelve-month periods, whether or not consecutive; or
•Upon the initial public offering of Indicor.
In the event of a sale of Indicor, CD&R would be entitled to a liquidation preference equal to its initial investment of approximately $829, plus any Unit Adjustment paid in-kind. Management’s valuation as of December 31, 2025 assumes the expected exit of the Indicor equity investment is an initial public offering which is not subject to the liquidation preference. Roper’s approval is required prior to a sale of Indicor for a value that would trigger the liquidation preference. As of December 31, 2025, management does not expect a liquidation preference associated with the investment to negatively impact the realization of cash upon any disposition.
The assessment of fair value for this equity investment requires significant judgments to be made by management. Although our assumptions are considered reasonable and are consistent with the plans and estimates, there is significant judgment applied in determining fair value. Changes in estimates or the application of alternative assumptions could produce significantly different results. The fair value of the investment reflects management’s estimate of assumptions that market participants would use in pricing the equity interest, which the Company has determined to be Level 3 in the FASB fair value hierarchy.
The following table provides a reconciliation of the fair value for our equity investment in Indicor measured using Level 3 inputs:
| Year ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Beginning balance | $ | 772.3 | $ | 675.9 | |||||||
| Change in fair value | 24.0 | 96.4 | |||||||||
| Ending balance | $ | 796.3 | $ | 772.3 | |||||||
The Company received $5.1, $10.8, and $32.5 of dividend distributions from Indicor during the years ended December 31, 2025, 2024, and 2023, respectively, which are reported within “Equity investments gain, net” in our Consolidated Statements of Earnings. These dividend distributions were intended to offset certain cash taxes payable associated with Roper’s ownership stake and were contemplated in the determination of the fair value for the equity investment in Indicor.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 22, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 25, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 26, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.