Percentage of effectiveness on net investment hedges

[Table of Contents](#iee2f14225b9a4b108d08cd0fe2886fa0_7)AMETEK, Inc.Notes to Consolidated Financial StatementsMarch 31, 2022(Unaudited)The following table provides the estimated fair values of the Company’s financial instrument liabilities, for which fair value is measured for disclosure purposes only, compared to the recorded amounts at March 31, 2022 and December 31, 2021:

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|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | March 31, 2022 |  | December 31, 2021 |
|  | RecordedAmount |  | Fair Value |  | RecordedAmount |  | Fair Value |
|  | (In thousands) |
| Long-term debt (including current portion) | $ | (2,208,928) |  |  | $ | (2,243,340) |  |  | $ | (2,233,705) |  |  | $ | (2,378,930) |  |

The fair value of net short-term borrowings approximates the carrying value. Net short-term borrowings are valued as level 2 liabilities as they are corroborated by observable market data. The Company’s net long-term debt is all privately held with no public market for this debt, therefore, the fair value of net long-term debt was computed based on comparable current market data for similar debt instruments and is considered a level 3 liability.6.    Hedging ActivitiesThe Company has designated certain foreign-currency-denominated long-term borrowings as hedges of the net investment in certain foreign operations. As of March 31, 2022, these net investment hedges included British-pound-and Euro-denominated long-term debt. These borrowings were designed to create net investment hedges in certain designated foreign subsidiaries. The Company designated the British-pound- and Euro-denominated loans referred to above as hedging instruments to offset translation gains or losses on the net investment due to changes in the British pound and Euro exchange rates. These net investment hedges are evidenced by management’s contemporaneous documentation supporting the hedge designation. Any gain or loss on the hedging instruments (the debt) following hedge designation is reported in accumulated other comprehensive income in the same manner as the translation adjustment on the hedged investment based on changes in the spot rate, which is used to measure hedge effectiveness.At March 31, 2022, the Company had $295.9 million of British-pound-denominated loans, which were designated as a hedge against the net investment in British pound functional currency foreign subsidiaries. At March 31, 2022, the Company had $596.2 million in Euro-denominated loans, which were designated as a hedge against the net investment in Euro functional currency foreign subsidiaries. As a result of the British-pound- and Euro-denominated loans designated and 100% effective as net investment hedges, $23.7 million of pre-tax currency remeasurement gains have been included in the foreign currency translation component of other comprehensive income for the three months ended March 31, 2022.7.    Inventories, net

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|  |  |  |  |  |  |  |  |  |  |  |  |
|  | March 31,2022 |  | December 31,2021 |
|  | (In thousands) |
| Finished goods and parts | $ | 106,667  |  |  | $ | 89,985  |  |
| Work in process | 142,472  |  |  | 122,356  |  |
| Raw materials and purchased parts | 617,333  |  |  | 556,834  |  |
| Total inventories, net | $ | 866,472  |  |  | $ | 769,175  |  |

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