(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code) | ||||||||||||||||||||||||||
Former name, former address and former fiscal year, if changed since last report: N/A | ||||||||||||||||||||||||||
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||||||||||||||
Title of each class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||||||||||||||||||||
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||
Smaller reporting company | Emerging growth company | ||||||||||||||||
Page | |||||
No. | |||||
(Amounts in thousands, except per share data) | Three Months Ended March 31, | ||||||||||
2024 | 2023 | ||||||||||
Sales | $ | $ | |||||||||
Cost of sales | ( | ( | |||||||||
Gross profit | |||||||||||
Selling, general and administrative expense | ( | ( | |||||||||
Net earnings from affiliates | |||||||||||
Operating income | |||||||||||
Interest expense | ( | ( | |||||||||
Interest income | |||||||||||
Other income (expense), net | ( | ( | |||||||||
Earnings (loss) before income taxes | |||||||||||
Provision for income taxes | ( | ( | |||||||||
Net earnings (loss), including noncontrolling interests | |||||||||||
Less: Net earnings attributable to noncontrolling interests | ( | ( | |||||||||
Net earnings (loss) attributable to Flowserve Corporation | $ | $ | |||||||||
Net earnings (loss) per share attributable to Flowserve Corporation common shareholders: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | |||||||||||
Weighted average shares – basic | |||||||||||
Weighted average shares – diluted | |||||||||||
(Amounts in thousands) | Three Months Ended March 31, | ||||||||||
2024 | 2023 | ||||||||||
Net earnings (loss), including noncontrolling interests | $ | $ | |||||||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustments, net of taxes of $ | ( | ||||||||||
Pension and other postretirement effects, net of taxes of $ | ( | ||||||||||
Cash flow hedging activity, net of taxes of $( | ( | ||||||||||
Other comprehensive income (loss) | ( | ||||||||||
Comprehensive income (loss), including noncontrolling interests | |||||||||||
Comprehensive (income) loss attributable to noncontrolling interests | ( | ( | |||||||||
Comprehensive income (loss) attributable to Flowserve Corporation | $ | $ |
(Amounts in thousands, except par value) | March 31, | December 31, | |||||||||
2024 | 2023 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance for expected credit losses of $ | |||||||||||
Contract assets, net of allowance for expected credit losses of $ | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net of accumulated depreciation of $ | |||||||||||
Operating lease right-of-use assets, net | |||||||||||
Goodwill | |||||||||||
Deferred taxes | |||||||||||
Other intangible assets, net | |||||||||||
Other assets, net of allowance for expected credit losses of $ | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Contract liabilities | |||||||||||
Debt due within one year | |||||||||||
Operating lease liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt due after one year | |||||||||||
Operating lease liabilities | |||||||||||
Retirement obligations and other liabilities | |||||||||||
Contingencies (See Note 10) | |||||||||||
Shareholders’ equity: | |||||||||||
Common shares, $ | |||||||||||
Shares authorized – | |||||||||||
Shares issued – | |||||||||||
Capital in excess of par value | |||||||||||
Retained earnings | |||||||||||
Treasury shares, at cost – | ( | ( | |||||||||
Deferred compensation obligation | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total Flowserve Corporation shareholders’ equity | |||||||||||
Noncontrolling interests | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Total Flowserve Corporation Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital in Excess of Par Value | Retained Earnings | Deferred Compensation Obligation | Accumulated Other Comprehensive Income (Loss) | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | Non- controlling Interests | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance — January 1, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock activity under stock plans | — | — | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Repurchases of common shares | — | — | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Other, net | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance — March 31, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance — January 1, 2023 | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock activity under stock plans | — | — | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other, net | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance — March 31, 2023 | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements. |
(Amounts in thousands) | Three Months Ended March 31, | ||||||||||
2024 | 2023 | ||||||||||
Cash flows – Operating activities: | |||||||||||
Net earnings (loss), including noncontrolling interests | $ | $ | |||||||||
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization of intangible and other assets | |||||||||||
Stock-based compensation | |||||||||||
Foreign currency, asset write downs and other non-cash adjustments | ( | ||||||||||
Change in assets and liabilities: | |||||||||||
Accounts receivable, net | ( | ( | |||||||||
Inventories | ( | ( | |||||||||
Contract assets, net | ( | ||||||||||
Prepaid expenses and other, net | ( | ( | |||||||||
Accounts payable | |||||||||||
Contract liabilities | ( | ||||||||||
Accrued liabilities | |||||||||||
Retirement obligations and other liabilities | ( | ||||||||||
Net deferred taxes | ( | ||||||||||
Net cash flows provided (used) by operating activities | |||||||||||
Cash flows – Investing activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Other | ( | ||||||||||
Net cash flows provided (used) by investing activities | ( | ( | |||||||||
Cash flows – Financing activities: | |||||||||||
Payments on term loan | ( | ( | |||||||||
Proceeds under other financing arrangements | |||||||||||
Payments under other financing arrangements | ( | ( | |||||||||
Repurchases of common shares | ( | ||||||||||
Payments related to tax withholding for stock-based compensation | ( | ( | |||||||||
Payments of dividends | ( | ( | |||||||||
Other | ( | ( | |||||||||
Net cash flows provided (used) by financing activities | ( | ( | |||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
Net change in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ |
Three Months Ended March 31, 2024 | |||||||||||||||||
(Amounts in thousands) | FPD | FCD | Total | ||||||||||||||
Original Equipment | $ | $ | $ | ||||||||||||||
Aftermarket | |||||||||||||||||
$ | $ | $ | |||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||
FPD | FCD | Total | |||||||||||||||
Original Equipment | $ | $ | $ | ||||||||||||||
Aftermarket | |||||||||||||||||
$ | $ | $ |
Three Months Ended March 31, 2024 | |||||||||||||||||
(Amounts in thousands) | FPD | FCD | Total | ||||||||||||||
North America(1) | $ | $ | $ | ||||||||||||||
Latin America(2) | |||||||||||||||||
Middle East and Africa | |||||||||||||||||
Asia Pacific | |||||||||||||||||
Europe | |||||||||||||||||
$ | $ | $ | |||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||
FPD | FCD | Total | |||||||||||||||
North America(1) | $ | $ | $ | ||||||||||||||
Latin America(2) | |||||||||||||||||
Middle East and Africa | |||||||||||||||||
Asia Pacific | |||||||||||||||||
Europe | |||||||||||||||||
$ | $ | $ |
(Amounts in thousands) | Contract Assets, net (Current) | Long-term Contract Assets, net(1) | Contract Liabilities (Current) | Long-term Contract Liabilities(2) | |||||||||||||||||||
Beginning balance, January 1, 2024 | $ | $ | $ | $ | |||||||||||||||||||
Revenue recognized that was included in contract liabilities at the beginning of the period | ( | ( | |||||||||||||||||||||
Revenue recognized in the period in excess of billings | |||||||||||||||||||||||
Billings arising during the period in excess of revenue recognized | |||||||||||||||||||||||
Amounts transferred from contract assets to receivables | ( | ( | |||||||||||||||||||||
Currency effects and other, net | ( | ( | |||||||||||||||||||||
Ending balance, March 31, 2024 | $ | $ | $ | $ | |||||||||||||||||||
(Amounts in thousands) | Contract Assets, net (Current) | Long-term Contract Assets, net(1) | Contract Liabilities (Current) | Long-term Contract Liabilities(2) | |||||||||||||||||||
Beginning balance, January 1, 2023 | $ | $ | $ | $ | |||||||||||||||||||
Revenue recognized that was included in contract liabilities at the beginning of the period | ( | ||||||||||||||||||||||
Revenue recognized in the period in excess of billings | |||||||||||||||||||||||
Billings arising during the period in excess of revenue recognized | |||||||||||||||||||||||
Amounts transferred from contract assets to receivables | ( | ||||||||||||||||||||||
Currency effects and other, net | ( | ||||||||||||||||||||||
Ending balance, March 31, 2023 | $ | $ | $ | $ |
(Amounts in thousands) | Accounts receivables | Short-term contract assets | |||||||||
Beginning balance, January 1, 2024 | $ | $ | |||||||||
Charges to cost and expenses, net of recoveries | |||||||||||
Write-offs | ( | ( | |||||||||
Currency effects and other, net | ( | ||||||||||
Ending balance, March 31, 2024 | $ | $ | |||||||||
Beginning balance, January 1, 2023 | $ | $ | |||||||||
Charges to cost and expenses, net of recoveries | |||||||||||
Write-offs | ( | ||||||||||
Currency effects and other, net | ( | ||||||||||
Ending balance, March 31, 2023 | $ | $ |
(Amounts in thousands) | 2024 | 2023 | |||||||||
Balance at January 1, | $ | $ | |||||||||
Currency effects and other, net | ( | ( | |||||||||
Balance at March 31, | $ | $ |
Three Months Ended March 31, 2024 | |||||||||||
Shares | Weighted Average Grant-Date Fair Value | ||||||||||
Number of unvested shares: | |||||||||||
Outstanding as of January 1, 2024 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding as of March 31, 2024 | $ |
March 31, | December 31, | ||||||||||
(Amounts in thousands) | 2024 | 2023 | |||||||||
Current derivative assets | $ | $ | |||||||||
Noncurrent derivative assets | |||||||||||
Current derivative liabilities | |||||||||||
Noncurrent derivative liabilities |
Three Months Ended March 31, | |||||||||||
(Amounts in thousands) | 2024 | 2023 | |||||||||
Gains (losses) recognized in income | $ | $ | ( |
March 31, | December 31, | ||||||||||
(Amounts in thousands, except percentages) | 2024 | 2023 | |||||||||
$ | $ | ||||||||||
Term Loan, interest rate of | |||||||||||
Finance lease obligations and other borrowings | |||||||||||
Debt and finance lease obligations | |||||||||||
Less amounts due within one year | |||||||||||
Total debt due after one year | $ | $ |
March 31, | December 31, | ||||||||||
(Amounts in thousands) | 2024 | 2023 | |||||||||
Raw materials | $ | $ | |||||||||
Work in process | |||||||||||
Finished goods | |||||||||||
Less: Excess and obsolete reserve | ( | ( | |||||||||
Inventories | $ | $ |
Three Months Ended March 31, | |||||||||||
(Amounts in thousands, except per share data) | 2024 | 2023 | |||||||||
Net earnings of Flowserve Corporation | $ | $ | |||||||||
Earnings attributable to common and participating shareholders | $ | $ | |||||||||
Weighted average shares: | |||||||||||
Common stock | |||||||||||
Participating securities | |||||||||||
Denominator for basic earnings per common share | |||||||||||
Effect of potentially dilutive securities | |||||||||||
Denominator for diluted earnings per common share | |||||||||||
Earnings per common share: | |||||||||||
Basic | $ | $ | |||||||||
Diluted |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Beginning claims(1) | |||||||||||
New claims | |||||||||||
Resolved claims | ( | ( | |||||||||
Other(2) | ( | ||||||||||
Ending claims(1) |
(Amounts in thousands) | 2024 | 2023 | |||||||||
Beginning balance, January 1, | $ | $ | |||||||||
Asbestos liability adjustments, net | ( | ||||||||||
Cash payment activity | ( | ( | |||||||||
Other, net | ( | ( | |||||||||
Ending balance, March 31, | $ | $ |
U.S. Defined Benefit Plans | Non-U.S. Defined Benefit Plans | Postretirement Medical Benefits | |||||||||||||||||||||||||||||||||
(Amounts in millions) | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Amortization of unrecognized prior service cost and other costs | |||||||||||||||||||||||||||||||||||
Amortization of unrecognized net loss | |||||||||||||||||||||||||||||||||||
Net periodic cost recognized | $ | $ | $ | $ | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Dividends declared per share | $ | $ |
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||
(Amounts in thousands) | FPD | FCD | Subtotal–Reportable Segments | Eliminations and All Other | Consolidated Total | ||||||||||||||||||||||||
Sales to external customers | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Intersegment sales | ( | — | |||||||||||||||||||||||||||
Segment operating income | ( | ||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||
FPD | FCD | Subtotal–Reportable Segments | Eliminations and All Other | Consolidated Total | |||||||||||||||||||||||||
Sales to external customers | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Intersegment sales | ( | — | |||||||||||||||||||||||||||
Segment operating income | ( |
2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
(Amounts in thousands) | Foreign currency translation items(1) | Pension and other post-retirement effects | Cash flow hedging activity (2) | Total | Foreign currency translation items(1) | Pension and other post-retirement effects | Cash flow hedging activity (2) | Total | |||||||||||||||||||||||||||||||||||||||
Balance - January 1, | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications (3) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCL | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Net current-period other comprehensive income (loss) (3) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Balance - March 31, | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended March 31, | ||||||||||||||||||||
(Amounts in thousands) | Affected line item in the statement of income | 2024(1) | 2023(1) | |||||||||||||||||
Pension and other postretirement effects | ||||||||||||||||||||
Amortization of actuarial losses(2) | Other income (expense), net | $ | ( | $ | ( | |||||||||||||||
Prior service costs(2) | Other income (expense), net | ( | ( | |||||||||||||||||
Tax benefit (expense) | ( | |||||||||||||||||||
Net of tax | $ | ( | $ | ( | ||||||||||||||||
Cash flow hedging activity | ||||||||||||||||||||
Amortization of Treasury rate lock | Interest income (expense) | $ | ( | $ | ( | |||||||||||||||
Tax benefit (expense) | ||||||||||||||||||||
Net of tax | $ | $ | ( |
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||
(Amounts in thousands) | FPD | FCD | Subtotal–Reportable Segments | All Other | Consolidated Total | ||||||||||||||||||||||||
Realignment Charges | |||||||||||||||||||||||||||||
Restructuring Charges | |||||||||||||||||||||||||||||
COS | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
SG&A | |||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | |||||||||||||||||||||||||
Non-Restructuring Charges | |||||||||||||||||||||||||||||
COS | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
SG&A | |||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | |||||||||||||||||||||||||
Total Realignment Charges | |||||||||||||||||||||||||||||
COS | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
SG&A | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||
(Amounts in thousands) | FPD | FCD | Subtotal–Reportable Segments | All Other | Consolidated Total | ||||||||||||||||||||||||
Realignment Charges | |||||||||||||||||||||||||||||
Restructuring Charges | |||||||||||||||||||||||||||||
COS | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||
SG&A | |||||||||||||||||||||||||||||
$ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||
Non-Restructuring Charges | |||||||||||||||||||||||||||||
COS | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
SG&A | |||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | |||||||||||||||||||||||||
Total Realignment Charges | |||||||||||||||||||||||||||||
COS | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
SG&A | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Inception to Date | |||||||||||||||||||||||||||||
(Amounts in thousands) | FPD | FCD | Subtotal–Reportable Segments | All Other | Consolidated Total | ||||||||||||||||||||||||
Realignment Charges | |||||||||||||||||||||||||||||
Restructuring Charges | |||||||||||||||||||||||||||||
COS | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
SG&A | |||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | |||||||||||||||||||||||||
Non-Restructuring Charges | |||||||||||||||||||||||||||||
COS | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
SG&A | |||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | |||||||||||||||||||||||||
Total Realignment Charges | |||||||||||||||||||||||||||||
COS | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
SG&A | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||
(Amounts in thousands) | Severance | Contract Termination | Asset Write-Downs (Gains) | Other | Total | ||||||||||||||||||||||||
COS | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
SG&A | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||
(Amounts in thousands) | Severance | Contract Termination | Asset Write-Downs (Gains) | Other | Total | ||||||||||||||||||||||||
COS | $ | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||
SG&A | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Inception to Date | |||||||||||||||||||||||||||||
(Amounts in thousands) | Severance | Contract Termination | Asset Write-Downs (Gains) | Other | Total | ||||||||||||||||||||||||
COS | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
SG&A | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
(Amounts in thousands) | 2024 | 2023 | |||||||||
Balance at January 1, | $ | $ | |||||||||
Charges, net of adjustments | |||||||||||
Cash expenditures | ( | ( | |||||||||
Other non-cash adjustments, including currency | ( | ( | |||||||||
Balance at March 31, | $ | $ |
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||
(Amounts in thousands) | FPD | FCD | Subtotal–Reportable Segments | Eliminations and All Other | Consolidated Total | ||||||||||||||||||||||||
Total Realignment Charges | |||||||||||||||||||||||||||||
COS | $ | 5,044 | $ | 767 | $ | 5,811 | $ | (138) | $ | 5,673 | |||||||||||||||||||
SG&A | 1,041 | 114 | 1,155 | 339 | 1,494 | ||||||||||||||||||||||||
Total | $ | 6,085 | $ | 881 | $ | 6,966 | $ | 201 | $ | 7,167 | |||||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||
(Amounts in thousands) | FPD | FCD | Subtotal–Reportable Segments | Eliminations and All Other | Consolidated Total | ||||||||||||||||||||||||
Total Realignment Charges | |||||||||||||||||||||||||||||
COS | $ | 390 | $ | 11 | $ | 401 | $ | (199) | $ | 202 | |||||||||||||||||||
SG&A | 2,050 | $ | 8,906 | 10,956 | 5,721 | 16,677 | |||||||||||||||||||||||
Total | $ | 2,440 | $ | 8,917 | $ | 11,357 | $ | 5,522 | $ | 16,879 |
Three Months Ended March 31, | |||||||||||
(Amounts in millions) | 2024 | 2023 | |||||||||
Bookings | $ | 1,038.3 | $ | 1,057.2 | |||||||
Sales | 1,087.5 | 980.3 |
Three Months Ended March 31, | |||||||||||
(Amounts in millions, except percentages) | 2024 | 2023 | |||||||||
Gross profit | $ | 339.0 | $ | 296.8 | |||||||
Gross profit margin | 31.2 | % | 30.3 | % |
Three Months Ended March 31, | |||||||||||
(Amounts in millions, except percentages) | 2024 | 2023 | |||||||||
SG&A | $ | 228.4 | $ | 244.3 | |||||||
SG&A as a percentage of sales | 21.0 | % | 24.9 | % |
Three Months Ended March 31, | |||||||||||
(Amounts in millions) | 2024 | 2023 | |||||||||
Net earnings from affiliates | $ | 2.5 | $ | 4.6 |
Three Months Ended March 31, | |||||||||||
(Amounts in millions, except percentages) | 2024 | 2023 | |||||||||
Operating income | $ | 113.1 | $ | 57.2 | |||||||
Operating income as a percentage of sales | 10.4 | % | 5.8 | % |
Three Months Ended March 31, | |||||||||||
(Amounts in millions) | 2024 | 2023 | |||||||||
Interest expense | $ | (15.3) | $ | (16.2) | |||||||
Interest income | 1.2 | 1.5 |
Three Months Ended March 31, | |||||||||||
(Amounts in millions) | 2024 | 2023 | |||||||||
Other income (expense), net | $ | (0.9) | $ | (8.0) |
Three Months Ended March 31, | |||||||||||
(Amounts in millions, except percentages) | 2024 | 2023 | |||||||||
Provision for (benefit from) income taxes | $ | 20.1 | $ | 4.5 | |||||||
Effective tax rate | 20.5 | % | 12.9 | % |
Three Months Ended March 31, | |||||||||||
(Amounts in millions) | 2024 | 2023 | |||||||||
Other comprehensive income (loss) | $ | (26.9) | $ | 13.1 |
Three Months Ended March 31, | |||||||||||
(Amounts in millions, except percentages) | 2024 | 2023 | |||||||||
Bookings | $ | 703.5 | $ | 728.5 | |||||||
Sales | 769.4 | 700.1 | |||||||||
Gross profit | 247.9 | 221.4 | |||||||||
Gross profit margin | 32.2 | % | 31.6 | % | |||||||
SG&A | 139.7 | 147.0 | |||||||||
Segment operating income | 110.9 | 79.1 | |||||||||
Segment operating income as a percentage of sales | 14.4 | % | 11.3 | % |
Three Months Ended March 31, | |||||||||||
(Amounts in millions, except percentages) | 2024 | 2023 | |||||||||
Bookings | $ | 341.1 | $ | 332.0 | |||||||
Sales | 320.5 | 281.6 | |||||||||
Gross profit | 92.7 | 80.3 | |||||||||
Gross profit margin | 28.9 | % | 28.5 | % | |||||||
SG&A | 58.0 | 61.8 | |||||||||
Segment operating income | 34.7 | 18.5 | |||||||||
Segment operating income as a percentage of sales | 10.8 | % | 6.6 | % |
Three Months Ended March 31, | |||||||||||
(Amounts in millions) | 2024 | 2023 | |||||||||
Net cash flows provided (used) by operating activities | $ | 62.3 | $ | 26.6 | |||||||
Net cash flows provided (used) by investing activities | (13.6) | (16.5) | |||||||||
Net cash flows provided (used) by financing activities | (54.2) | (43.8) |
Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program (1) | Maximum Number of Shares (or Approximate Dollar Value) That May Yet Be Purchased Under the Program (in millions) | ||||||||||||||||||||
Period | |||||||||||||||||||||||
January 1 - 31 | 268 | (2) | $ | 39.99 | — | $ | 96.1 | ||||||||||||||||
February 1 - 29 | 210,097 | (3) | 42.72 | — | 300.0 | ||||||||||||||||||
March 1 - 31 | 233 | (2) | 44.55 | 57,000 | 297.5 | ||||||||||||||||||
Total | 210,598 | $ | 42.72 | 57,000 |
Exhibit No. | Description | |||||||
Restated Certificate of Incorporation of Flowserve Corporation, as amended and restated effective May 20, 2021 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-13179)) filed on May 25, 2021). | ||||||||
Flowserve Corporation By-Laws, as amended and restated effective April 12, 2023 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-13179) filed on April 12, 2023). | ||||||||
Form of 2024 Performance Restricted Stock Unit Agreement for certain officers pursuant to the Flowserve Corporation 2020 Long-Term Incentive Plan.* | ||||||||
Form of 2024 Restricted Stock Unit Agreement for certain officers pursuant to the Flowserve Corporation 2020 Long-Term Incentive Plan.* | ||||||||
Flowserve Corporation Senior Management Retirement Plan, amended and restated effective January 1, 2024 (incorporated by reference to Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K (File No. 001-13179) for the year ended December 31, 2023).* | ||||||||
Flowserve Corporation Retirement Savings Plan, amended and restated effective January 1, 2024 (incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K (File No. 001-13179) for the year ended December 31, 2023).* | ||||||||
Flowserve Corporation Supplemental Retirement Savings Plan effective January 1, 2024 (incorporated by reference to Exhibit 10.15 to the Registrant's Annual Report on Form 10-K (File No. 001-13179) for the year ended December 31, 2023).* | ||||||||
Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2024, formatted in Inline XBRL (included as Exhibit 101) |
FLOWSERVE CORPORATION | |||||||||||
Date: | April 29, 2024 | /s/ Amy B. Schwetz | |||||||||
Amy B. Schwetz | |||||||||||
Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
Date: | April 29, 2024 | /s/ Scott K. Vopni | |||||||||
Scott K. Vopni | |||||||||||
Vice President and Chief Accounting Officer (Principal Accounting Officer) |
/s/ Robert Scott Rowe | ||
Robert Scott Rowe | ||
President and Chief Executive Officer (Principal Executive Officer) |
Appendix B Jurisdiction Specific Provisions |
This Appendix B includes terms and conditions applicable to Participants in the countries, states, and jurisdictions covered by this Appendix A. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan and the Agreement to which this Appendix A is attached The securities, exchange control and other laws in effect in the respective countries (and, as applicable, states and jurisdictions) are often complex and change frequently. As a result, the Company strongly recommends that the Participant not rely on the information noted herein as the only source of information relating to the consequences of the Participant’s participation in the Plan, as the information may be out of date by the time the Performance Shares are settled or the Participant sells the shares of Common Stock acquired In addition, the information contained in this Appendix B is general in nature and may not apply to the Participant’s particular situation, and the Company is not in a position to assure the Participant of any particular result. Accordingly, the Participant is advised to seek appropriate professional advice as to how the applicable laws in his or her jurisdiction may apply to his or her situation If the Participant (i) is a citizen or resident of a jurisdiction other than the one in which he or she is currently working and/or residing, (ii) transfers employment or residency to another jurisdiction after the Performance Share grant date, (iii) changes employment status to a consultant position, or (iv) is considered a resident of another jurisdiction for local law purposes, the Company shall, in its sole discretion, determine the extent to which the special terms and conditions contained herein shall apply to the Participant unless the special terms and conditions contained herein specifically address that circumstance. | |||||||||||
/s/ Robert Scott Rowe | ||
Robert Scott Rowe | ||
President and Chief Executive Officer (Principal Executive Officer) |
/s/ R. Scott Rowe | ||||||||
R. Scott Rowe | ||||||||
President and Chief Executive Officer (Principal Executive Officer) |
/s/ Amy B. Schwetz | ||
Amy B. Schwetz | ||
Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
/s/ R. Scott Rowe | ||||||||
R. Scott Rowe | ||||||||
President and Chief Executive Officer (Principal Executive Officer) |
/s/ Amy B. Schwetz | ||
Amy B. Schwetz | ||
Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
/($.*'$FRI,F3*%.J7,FRI
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Net earnings, including noncontrolling interests | $ 77,915 | $ 29,996 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments, net of taxes | (28,244) | 13,506 |
Pension and other postretirement effects, net of taxes | 1,376 | (443) |
Cash flow hedging activity, net of taxes | (5) | 30 |
Other comprehensive income (loss) | (26,873) | 13,093 |
Comprehensive income (loss), including noncontrolling interests | 51,042 | 43,089 |
Comprehensive (income) loss attributable to noncontrolling interests | (3,482) | (68) |
Comprehensive income (loss) attributable to Flowserve Corporation | $ 47,560 | $ 43,021 |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation, taxes | $ 828 | $ 717 |
Pension and other postretirement effects, taxes | 76 | (12) |
Cash flow hedging activity, taxes | $ (35) | $ (9) |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Current assets: | ||
Allowance for doubtful accounts | $ 78,305 | $ 80,013 |
Contract asset, allowance for doubtful accounts | 4,986 | 4,993 |
Accumulated depreciation on property, plant and equipment | 1,162,548 | 1,158,451 |
Other assets, allowance for credit loss | $ 66,357 | $ 66,864 |
Shareholders’ equity: | ||
Common shares, par value (in dollars per share) | $ 1.25 | $ 1.25 |
Common shares, shares authorized (in shares) | 305,000 | 305,000 |
Common shares, shares issued (in shares) | 176,793 | 176,793 |
Treasury shares (in shares) | 45,372 | 45,885 |
Basis of Presentation and Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Accounting Policies | Basis of Presentation and Accounting Policies Basis of Presentation The accompanying condensed consolidated balance sheet as of March 31, 2024 and December 31, 2023, and the related condensed consolidated statements of income, condensed consolidated statements of comprehensive income (loss), condensed consolidated statements of shareholders' equity for the three months ended March 31, 2024 and 2023 and condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 of Flowserve Corporation are unaudited. In management’s opinion, all adjustments comprising normal recurring adjustments necessary for fair statement of such condensed consolidated financial statements have been made. The accompanying condensed consolidated financial statements and notes in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 ("Quarterly Report") are presented as permitted by Regulation S-X and do not contain certain information included in our annual financial statements and notes thereto. Accordingly, the accompanying condensed consolidated financial information should be read in conjunction with the audited consolidated financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2023 ("2023 Annual Report"). Coronavirus ("COVID-19") and Related Impacts - We continue to assess any remaining impacts of COVID-19 on all aspects of our business and geographies, including with respect to our associates, customers and communities, supply chain impacts and labor availability issues. COVID-related supply chain, logistics and labor availability impacts decreased when compared to 2023 and 2022 and have generally stabilized. The Company's condensed consolidated financial statements presented reflect management's estimates and assumptions regarding the effects of COVID-19 as of the date of the condensed consolidated financial statements. Russia and Ukraine Conflict - In response to the Russia-Ukraine conflict, several countries, including the United States, have imposed economic sanctions and export controls on certain industry sectors and parties in Russia. As a result of this conflict, including the aforementioned sanctions and overall instability in the region, in March 2022 we permanently ceased all Company operations in Russia and are currently taking the necessary steps to wind down in the country. We continue to monitor the situation involving Russia and Ukraine and its impact on the rest of our global business. This includes the macroeconomic impact, including with respect to global supply chain issues and inflationary pressures. We reevaluated our financial exposure as of March 31, 2024 and made a $2 million adjustment during the period ended March 31, 2024 to reduce the existing reserves. To date, impacts have not been material to our business and we do not currently expect that any incremental impact in future quarters, including any financial impacts caused by our cancellation of customer contracts and ceasing of operations in Russia, will be material to the Company. Terminated Acquisition — On February 9, 2023, the Company entered into a definitive agreement to acquire all of the outstanding equity of Velan Inc., a manufacturer of highly engineered industrial valves. In October 2023, the Company received notice that the required French foreign investment screening approval was not obtained. As a result, the transaction was terminated. Acquisition related expenses incurred during 2023 associated with the transaction were $7.3 million. Accounting Developments Pronouncements Implemented In September 2022, the FASB issued ASU No. 2022-04, "Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations." The amendments require a buyer that uses supplier finance programs to make annual disclosures about the program’s key terms, the balance sheet presentation of related amounts, the confirmed amount outstanding at the end of the period and associated roll-forward information. Only the amount outstanding at the end of the period must be disclosed in interim periods following the year of adoption. The amendments are effective for all entities for fiscal years beginning after December 15, 2022 on a retrospective basis, including interim periods within those fiscal years, except for the requirement to disclose roll-forward information, which is effective prospectively for fiscal years beginning after December 15, 2023. We adopted ASU No. 2022-04 effective January 1, 2023. We partner with two banks to offer our suppliers the option of participating in a supplier financing program and receive payment early. Under the program agreement, we must reimburse each bank for approved and valid invoices in accordance with the originally agreed upon terms with the supplier. We have no obligation for fees, subscription, service, commissions or otherwise with either bank. We also have no obligation for pledged assets or other forms of guarantee and may terminate either program agreement with appropriate notice. As of March 31, 2024, and December 31, 2023, $7.8 million and $13.5 million, respectively, remained outstanding with the supply chain financing partner banks and recorded within accounts payable on our condensed consolidated balance sheet. In March 2023, the FASB issued ASU No. 2023-01, "Leases (Topic 842): Common Control Arrangements." The amendments permits leasehold improvements to be amortized over the useful life of the asset when the lessee controls the use of the underlying asset and the lease is between common control entities. The amendments further allow entities to account for leasehold improvements as a transfer of assets between entities under common control through an equity adjustment when the lessee is no longer in control of the underlying asset. The amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The adoption of this ASU did not have a material impact on our condensed consolidated balance sheets, condensed consolidated statements of income or condensed consolidated statements of cash flows. In March 2023, the FASB issued ASU No. 2023-02, "Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method." The amendments allow companies to account for all of their tax equity investments using the proportional amortization method if certain conditions are met. Companies can elect to apply the proportional amortization method on a tax-credit-program-by-tax-credit-program basis rather than unilaterally or on an individual investment basis. The amendments are effective on either a modified retrospective or retrospective basis for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, depending on whether the company elects to evaluate its investments for which it still expects to receive income tax credits or other income tax benefits as of the beginning of the period of adoption or at the beginning of the earliest period presented. The adoption of this ASU did not have a material impact on our condensed consolidated balance sheets, condensed consolidated statements of income or condensed consolidated statements of cash flows. Pronouncements Not Yet Implemented In August 2023, the FASB issued ASU No. 2023-05, "Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement." The amendments require that newly formed joint ventures measure the net assets and liabilities contributed at fair value. Subsequent measurement is in accordance with the requirements for acquirers of a business in Sections 805-10-35, 805-20-35, and 805-30-35, and other generally accepted accounting principles. The amendments are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025, but companies may elect to apply the amendments retrospectively to joint ventures formed prior to January 1, 2025, if it has sufficient information. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued (or made available for issuance), either prospectively or retrospectively. We do not expect the impact of this ASU to be material. In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures." The amendments enhance the disclosure requirements of significant segment expenses and other segment items. The amendments are effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The amendments are to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. Early adoption is permitted. We are evaluating the impact of this ASU on our disclosures. In December 2023, the FASB issued ASU No. 2023-08, "Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60)." The amendments require that assets that qualify as a crypto asset, in accordance with the new guidance, must be recorded and subsequently valued at fair value at each reporting period, recognizing changes within net income of the same period. The amendments also require that companies present crypto assets measured at fair value separately from other intangible assets on the balance sheet with changes related to the remeasurement of crypto assets reported separately from changes in carrying amounts of other intangible assets in the income statement. Specific disclosure is required around the activity of crypto assets during the reporting period. The amendments are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. We do not own crypto assets, and therefore, do not expect the impact of this ASU to be material. In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740)." The amendments require that entities on an annual basis disclose specific categories in the rate reconciliation, provide additional information for reconciling items that meet a quantitative threshold, and disclose specific information about income taxes paid. The amendments eliminate previously required disclosures around changes in unrecognized tax benefits and cumulative amounts of certain temporary difference. The amendments are effective prospectively for annual periods beginning after December 15, 2024. Early adoption is permitted. We are evaluating the impact of this ASU on our disclosures.
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition The majority of our revenues relate to customer orders that typically contain a single commitment of goods or services which have lead times under a year. Longer lead time and more complex contracts with our customers typically have multiple commitments of goods and services, including any combination of designing, developing, manufacturing, modifying, installing and commissioning of flow management equipment and providing services and parts related to the performance of such products. Control transfers over time when the customer is able to direct the use of and obtain substantially all of the benefits of our work as we perform. Service-related revenues do not typically represent a significant portion of contracts with our customers and do not meet the thresholds requiring separate disclosure. Revenue from products and services transferred to customers over time accounted for approximately 17% and 14% of total revenue for the three-month period ended March 31, 2024 and 2023, respectively. Our primary method for recognizing revenue over time is the percentage of completion ("POC") method. If control does not transfer over time, then control transfers at a point in time. We recognize revenue at a point in time at the level of each performance obligation based on the evaluation of certain indicators of control transfer, such as title transfer, risk of loss transfer, customer acceptance and physical possession. Revenue from products and services transferred to customers at a point in time accounted for approximately 83% and 86% of total revenue for the three-month period ended March 31, 2024 and 2023, respectively. Refer to Note 2 to our consolidated financial statements included in our 2023 Annual Report for a more comprehensive discussion of our policies and accounting practices of revenue recognition. Disaggregated Revenue We conduct our operations through two business segments based on the type of product and how we manage the business: •Flowserve Pumps Division ("FPD") designs and manufactures custom, highly engineered pumps, pre-configured industrial pumps, pump systems, mechanical seals, auxiliary systems and replacement parts and related services; and •Flow Control Division ("FCD") designs, manufactures and distributes a broad portfolio of engineered-to-order and configured-to-order isolation valves, control valves, valve automation products and related equipment. Our revenue sources are derived from our original equipment manufacturing and our aftermarket sales and services. Our original equipment revenues are generally related to originally designed, manufactured, distributed and installed equipment that can range from pre-configured, short-cycle products to more customized, highly engineered equipment ("Original Equipment"). Our aftermarket sales and services are derived from sales of replacement equipment, as well as maintenance, advanced diagnostic, repair and retrofitting services ("Aftermarket"). Each of our two business segments generate Original Equipment and Aftermarket revenues. The following tables present our customer revenues disaggregated by revenue source:
Our customer sales are diversified geographically. The following tables present our revenues disaggregated by geography, based on the shipping addresses of our customers:
(1) North America represents the United States and Canada. (2) Latin America includes Mexico. On March 31, 2024, the aggregate transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations related to contracts having an original expected duration in excess of one year was approximately $637 million. We estimate recognition of approximately $427 million of this amount as revenue in the remainder of 2024 and an additional $210 million in 2025 and thereafter. Contract Balances We receive payment from customers based on a contractual billing schedule and specific performance requirements as established in our contracts. We record billings as accounts receivable when an unconditional right to consideration exists. A contract asset represents revenue recognized in advance of our right to bill the customer under the terms of a contract. A contract liability represents our contractual billings in advance of revenue recognized for a contract. The following tables present beginning and ending balances of contract assets and contract liabilities, current and long-term, for the three months ended March 31, 2024 and 2023:
___________________________________ (1) Included in other assets, net. (2) Included in retirement obligations and other liabilities.
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Allowance for Expected Credit Losses |
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Credit Loss [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Expected Credit Losses | Allowance for Expected Credit Losses The allowance for credit losses is an estimate of the credit losses expected over the life of our financial assets and instruments. We assess and measure expected credit losses on a collective basis when similar risk characteristics exist, including market, geography, credit risk and remaining duration. Financial assets and instruments that do not share risk characteristics are evaluated on an individual basis. Our estimate of the allowance is assessed and quantified using internal and external valuation information relating to past events, current conditions and reasonable and supportable forecasts over the contractual terms of an asset. Our primary exposure to expected credit losses is through our accounts receivables and contract assets. For these financial assets, we record an allowance for expected credit losses that, when deducted from the gross asset balance, presents the net amount expected to be collected. Primarily, our experience of historical credit losses provides the basis for our estimation of the allowance. We estimate the allowance based on an aging schedule and according to historical losses as determined from our history of billings and collections. Additionally, we adjust the allowance for factors that are specific to our customers’ credit risk such as financial difficulties, liquidity issues, insolvency, and country and geopolitical risks. We also consider both the current and forecasted macroeconomic conditions as of the reporting date. As identified and needed, we adjust the allowance and recognize adjustments in the income statement each period. Accounts receivable are written off against the allowance in the period when the receivable is deemed to be uncollectible and further collection efforts have ceased. Subsequent recoveries of previously written off amounts are reflected as a reduction to credit impairment losses in the condensed consolidated statements of income. Contract assets represent a conditional right to consideration for satisfied performance obligations that become a receivable when the conditions are satisfied. Generally, contract assets are recorded when contractual billing schedules differ from revenue recognition based on timing and are managed through the revenue recognition process. Based on our historical credit loss experience, the current expected credit loss for contract assets is estimated to be approximately 1% of the asset balance. The following table presents the changes in the allowance for expected credit losses for our accounts receivable and short-term contract assets for the three months ended March 31, 2024 and 2023:
Our allowance on long-term receivables, included in other assets, net, represents receivables with collection periods longer than 12 months and the balance primarily consists of reserved receivables associated with the national oil company in Venezuela. The following table presents the changes in the allowance for long-term receivables for the three months ended March 31, 2024 and 2023:
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Stock-Based Compensation Plans |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Plans | Stock-Based Compensation Plans We maintain the Flowserve Corporation 2020 Long-Term Incentive Plan (“2020 Plan”), which is a shareholder approved plan authorizing the issuance of 12,500,000 shares of our common stock in the form of restricted shares, restricted share units and performance-based units (collectively referred to as "Restricted Shares"), incentive stock options, non-statutory stock options, stock appreciation rights and bonus stock. Of the shares of common stock authorized under the 2020 Plan, 7,100,632 were available for issuance as of March 31, 2024. Restricted Shares primarily vest over a three-year period. Restricted Shares granted to employees who retire and have achieved at least 55 years of age and 10 years of service continue to vest over the original vesting period ("55/10 Provision"). As of March 31, 2024, 114,943 stock options with a weighted average exercise price of $48.63 and a weighted average remaining contractual life of 3 years were outstanding and exercisable. No stock options have been granted or vested since 2020. Restricted Shares – Awards of Restricted Shares are valued at the closing market price of our common stock on the date of grant. The unearned compensation is amortized to compensation expense over the vesting period of the restricted shares, except for awards related to the 55/10 Provision which are expensed in the period granted for awards issued prior to 2024. For awards of Restricted Shares granted beginning in 2024 and subject to the 55/10 Provision, compensation expense is recognized over a required six-month service period. We had unearned compensation of $39.2 million at March 31, 2024, which is expected to be recognized over a remaining weighted-average period of approximately two years. This amount will be recognized into net earnings in prospective periods as the awards vest. The total fair value of Restricted Shares vested during the three months ended March 31, 2024 and 2023 was $25.7 million and $21.8 million, respectively. We recorded stock-based compensation expense of $8.7 million ($6.7 million after-tax) and $10.0 million ($7.7 million after-tax) for the three months ended March 31, 2024 and 2023, respectively. The following table summarizes information regarding Restricted Shares:
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Derivative Instruments and Hedges |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedges | Derivative Instruments and Hedges Our risk management and foreign currency derivatives and hedging policy specifies the conditions under which we may enter into derivative contracts. See Note 7 for additional information on our derivatives. We enter into foreign exchange forward contracts to hedge our cash flow risks associated with transactions denominated in currencies other than the local currency of the operation engaging in the transaction. We have not elected hedge accounting for our foreign exchange forward contracts and the changes in the fair values are recognized immediately in our condensed consolidated statements of income. Foreign exchange forward contracts with third parties had a notional value of $640.2 million and $656.6 million at March 31, 2024 and December 31, 2023, respectively. At March 31, 2024, the length of foreign exchange forward contracts currently in place ranged from 2 days to 20 months. We are exposed to risk from credit-related losses resulting from nonperformance by counterparties to our financial instruments. We perform credit evaluations of our counterparties under foreign exchange forward contracts agreements and expect all counterparties to meet their obligations. We have not experienced credit losses from our counterparties. The fair values of foreign exchange forward contracts are summarized below:
Current and noncurrent derivative assets are reported in our condensed consolidated balance sheets in prepaid expenses and other and other assets, net, respectively. Current and noncurrent derivative liabilities are reported in our condensed consolidated balance sheets in accrued liabilities and retirement obligations and other liabilities, respectively. The impact of net changes in the fair values of foreign exchange forward contracts are summarized below:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt, including finance lease obligations, net of discounts and debt issuance costs, consisted of:
Senior Credit Facility As discussed in Note 12 to our consolidated financial statements included in our 2023 Annual Report, our credit agreement (the "Senior Credit Agreement") provides a $800.0 million unsecured revolving credit facility (the "Revolving Credit Facility"), which includes a $750.0 million sublimit for the issuance of letters of credit and a $30.0 million sublimit for swing line loans, and a $300 million unsecured term loan facility (the "Term Loan") with a maturity date of September 13, 2026. On February 3, 2023, we amended and restated our credit agreement (the “Amendment”) which (i) replaced LIBOR with Secured Overnight Financing Rate (“SOFR”) as the benchmark reference rate, (ii) lowered the Material Acquisition (as defined in the Senior Credit Facility) threshold from $250.0 million to $200.0 million and (iii) extended compliance dates for certain financial covenants. We believe this Amendment will provide greater flexibility and additional liquidity under our Senior Credit Facility as we continue to pursue our business goals and strategy. Most other terms and conditions under the previous Senior Credit Facility remained unchanged. The interest rates per annum applicable to the Revolving Credit Facility, other than with respect to swing line loans, are adjusted Term Secured Overnight Financing Rate ("Adjusted Term SOFR") plus between 1.000% to 1.750%, depending on our debt rating by either Moody’s Investors Service, Inc. ("Moody's") or Standard & Poor’s Financial Services LLC ("S&P"), or, at our option, the Base Rate (as defined in the Senior Credit Agreement) plus between 0.000% to 0.750% depending on our debt rating by either Moody’s or S&P. An additional credit spread adjustment of 0.100% is included within Adjusted Term SOFR to account for the transition from LIBOR to SOFR. At March 31, 2024, the interest rate on the Revolving Credit Facility was the Adjusted Term SOFR plus 1.375% in the case of Adjusted Term SOFR loans and the Base Rate plus 0.375% in the case of Base Rate loans. In addition, a commitment fee is payable quarterly in arrears on the daily unused portions of the Revolving Credit Facility. The commitment fee will be between 0.080% and 0.250% of unused amounts under the Revolving Credit Facility depending on our debt rating by either Moody’s or S&P. The commitment fee was 0.175% (per annum) during the period ended March 31, 2024. Under the terms and conditions of the Senior Credit Agreement, interest rates per annum applicable to the Term Loan are stated as Adjusted Term SOFR plus between 0.875% to 1.625%, depending on the Company’s debt rating by either Moody’s or S&P, or, at the option of the Company, the Base Rate plus between 0.000% to 0.625% depending on the Company’s debt rating by either Moody’s or S&P. At March 31, 2024, the interest rate on the Term Loan was Adjusted Term SOFR plus 1.250% in the case of Adjusted Term SOFR loans and the Base Rate plus 0.250% in the case of Base Rate loans. As of March 31, 2024 and December 31, 2023, we had no revolving loans outstanding under the Senior Credit Facility and we had outstanding letters of credit of $127.8 million and $127.1 million, respectively. In April 2024 the Company borrowed $100.0 million on the Revolving Credit Facility for general corporate purposes and, as of April 29, 2024, the Company has $100 million outstanding. After consideration of the outstanding letters of credit as of March 31, 2024, the amount available for borrowings under the Senior Credit Facility was limited to $672.2 million. As of December 31, 2023, the amount available for borrowings under our Revolving Credit Facility was $672.9 million. We have scheduled repayments of $15.0 million due in each of the next four quarters on our Term Loan. Our compliance with applicable financial covenants under the Senior Notes and Senior Credit Facility are tested quarterly. We were in compliance with all applicable covenants as of March 31, 2024.
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Fair Value |
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Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models may be applied. Assets and liabilities recorded at fair value in our condensed consolidated balance sheets are categorized by hierarchical levels based upon the level of judgment associated with the inputs used to measure their fair values. Recurring fair value measurements are limited to investments in derivative instruments. The fair value measurements of our derivative instruments are determined using models that maximize the use of the observable market inputs including interest rate curves and both forward and spot prices for currencies, and are classified as Level II under the fair value hierarchy. The fair values of our derivatives are included in Note 5. The carrying value of our financial instruments as reflected in our condensed consolidated balance sheets approximates fair value, with the exception of our long-term debt. The estimated fair value of our long-term debt, excluding the Senior Notes, approximates the carrying value and is determined using Level II inputs under the fair value hierarchy. The carrying value of our debt is included in Note 6. The estimated fair value of our Senior Notes at March 31, 2024 was $858.5 million compared to the carrying value of $990.6 million. The estimated fair value of the Senior Notes is based on Level I quoted market rates. The carrying amounts of our other financial instruments (e.g., cash and cash equivalents, accounts receivable, net, accounts payable and short-term debt) approximated fair value due to their short-term nature at March 31, 2024 and December 31, 2023.
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consisted of the following:
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Earnings (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The following is a reconciliation of net earnings of Flowserve Corporation and weighted average shares for calculating net earnings per common share. Earnings per weighted average common share outstanding was calculated as follows:
Diluted earnings per share above is based upon the weighted average number of shares as determined for basic earnings per share plus shares potentially issuable in conjunction with stock options and Restricted Shares.
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Legal Matters and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal Matters and Contingencies | Legal Matters and Contingencies Asbestos-Related Claims We are a defendant in a substantial number of lawsuits that seek to recover damages for personal injury allegedly caused by exposure to asbestos-containing products manufactured and/or distributed by our heritage companies in the past. Typically, these lawsuits have been brought against multiple defendants in state and federal courts. While the overall number of asbestos-related claims in which we or our predecessors have been named has generally declined in recent years, the number of such claims may fluctuate or increase between periods, and there can be no assurance that this trend will continue, or that the average cost per claim to us will not further increase. Asbestos-containing materials incorporated into any such products were encapsulated and used as internal components of process equipment, and we do not believe that significant emission of asbestos fibers occurred during the use of this equipment. Our practice is to vigorously contest and resolve these claims, and we have been successful in resolving a majority of claims with little or no payment, other than legal fees. Activity related to asbestos claims during the periods indicated was as follows:
____________________ (1) Beginning and ending claims data in each period excludes inactive claims, as the Company assumes that inactive cases will not be pursued further by the respective plaintiffs. A claim is classified as inactive either due to inactivity over a period of three years or if designated as inactive by the applicable court. (2) Represents the net change in claims as a result of the reclassification of active cases as inactive and inactive cases as active during the period indicated. Cases moved from active to inactive status are removed from the claims count without being accounted for as a "Resolved claim", and cases moved from inactive status to active status are added back to the claims count without being accounted for as a “New claim”. The following table presents the changes in the estimated asbestos liability:
During both of the three months ended March 31, 2024 and 2023 the Company incurred expenses (net of insurance) of approximately $1.8 million to defend, resolve or otherwise dispose of outstanding claims, including legal and other related expenses. These expenses are included within selling, general and administrative ("SG&A") in our condensed consolidated statements of income. The Company had cash inflows (outflows) (net of insurance and/or indemnity) to defend, resolve or otherwise dispose of outstanding claims, including legal and other related expenses of approximately $(3.7) million and $(5.6) million, respectively, during the three months ended March 31, 2024 and 2023, respectively. Historically, a high percentage of resolved claims have been covered by applicable insurance or indemnities from other companies, and we believe that a portion of existing claims should continue to be covered by insurance or indemnities, in whole or in part. We believe that our reserve for asbestos claims and the receivable for recoveries from insurance carriers that we have recorded for these claims reflect reasonable and probable estimates of these amounts. Our estimate of our ultimate exposure for asbestos claims, however, is subject to significant uncertainties, including the timing and number and types of new claims, unfavorable court rulings, judgments or settlement terms and ultimate costs to settle. Additionally, the continued viability of carriers may also impact the amount of probable insurance recoveries. We believe that these uncertainties could have a material adverse impact on our business, financial condition, results of operations and cash flows, though we currently believe the likelihood is remote. Additionally, we have claims pending against certain insurers that, if in future periods are resolved more favorably than reflected in the recorded receivables, would result in discrete gains in the applicable quarter. Other We are also a defendant in a number of other lawsuits, including product liability claims, that are insured, subject to the applicable deductibles, arising in the ordinary course of business, and we are also involved in other uninsured routine litigation incidental to our business. We currently believe none of such litigation, either individually or in the aggregate, is material to our business, operations or overall financial condition. However, litigation is inherently unpredictable, and resolutions or dispositions of claims or lawsuits by settlement or otherwise could have an adverse impact on our financial position, results of operations or cash flows for the reporting period in which any such resolution or disposition occurs. Although none of the aforementioned potential liabilities can be quantified with absolute certainty except as otherwise indicated above, we have established or adjusted reserves covering exposures relating to contingencies, to the extent believed to be reasonably estimable and probable based on past experience and available facts. While additional exposures beyond these reserves could exist, they currently cannot be estimated. We will continue to evaluate and update the reserves as necessary and appropriate.
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Pension and Postretirement Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Postretirement Benefits | Pension and Postretirement Benefits Components of the net periodic cost for pension and postretirement benefits for the three months ended March 31, 2024 and 2023 were as follows:
The components of net periodic cost for pension and postretirement benefits other than service costs are included in other income (expense), net in our condensed consolidated statements of income. In August 2023, we amended the Company-sponsored qualified defined benefit pension plan in the United States (the "Qualified Plan") for non-union employees to discontinue future benefit accruals under the Qualified Plan and freeze existing accrued benefits effective January 1, 2025. Benefits earned by participants under the Qualified Plan prior to January 1, 2025, are not affected. We also amended the Company-sponsored non-qualified defined benefit pension plan in the United States (the "Non-Qualified Plan") that provides enhanced retirement benefits to select members of management. The Qualified Plan and the Non-Qualified Plan were closed to new entrants effective January 1, 2024, and September 1, 2023, respectively. The amendments resulted in a curtailment of both plans during the year ended December 31, 2023. The curtailment loss incurred and the change in projected benefit obligation was immaterial.
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Shareholders' Equity |
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Shareholders' Equity | Shareholders’ Equity Dividends – Generally, our dividend date-of-record is in the last month of the quarter, and the dividend is paid the following month. Any subsequent dividends will be reviewed by our Board of Directors and declared in its discretion. Dividends declared per share were as follows:
Share Repurchase Program – In 2014, our Board of Directors approved a $500.0 million share repurchase authorization. As of December 31, 2023, we had $96.1 million of remaining capacity under the prior share repurchase authorization. Effective February 19, 2024, the Board of Directors approved an increase in our total remaining capacity under the share repurchase program to $300.0 million. Our share repurchase program does not have an expiration date and we reserve the right to limit or terminate the repurchase program at any time without notice. We repurchased 57,000 shares of our outstanding common stock for $2.5 million during the three months ended March 31, 2024, compared to no repurchases of shares for the same period in 2023. As of March 31, 2024, we had $297.5 million of remaining capacity under our current share repurchase program.
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Income Taxes |
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Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended March 31, 2024, we earned $98.1 million before taxes and recorded a provision for income taxes of $20.1 million resulting in an effective tax rate of 20.5%. The effective tax rate varied from the U.S. federal statutory rate for the three months ended March 31, 2024 primarily due to the net impact of foreign operations and state income taxes. For the three months ended March 31, 2023, we earned $34.4 million before taxes and recorded a provision for income taxes of $4.5 million resulting in an effective tax rate of 12.9%. The effective tax rate varied from the U.S. federal statutory rate for the three months ended March 31, 2023 primarily due to the benefits of a tax planning strategy, partially offset by the net impact of foreign operations and state income taxes. As of March 31, 2024, the amount of unrecognized tax benefits increased by $1.1 million from December 31, 2023. With limited exception, we are no longer subject to U.S. federal income tax audits for years through 2017, state and local income tax audits for years through 2017 or non-U.S. income tax audits for years through 2016. We are currently under examination for various years in Austria, Canada, China, Germany, India, Indonesia, Italy, Kenya, Madagascar, Malaysia, Mexico, Morocco, the Philippines, Saudi Arabia, Singapore, Switzerland, the United States and Venezuela. It is reasonably possible that within the next 12 months the effective tax rate will be impacted by the resolution of some or all of the matters audited by various taxing authorities. It is also reasonably possible that we will have the statute of limitations close in various taxing jurisdictions within the next 12 months. As such, we estimate we could record a reduction in our tax expense of approximately $5 million within the next 12 months. The Company maintains a full valuation allowance against the net deferred tax assets in certain foreign tax jurisdictions as of March 31, 2024. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of net deferred tax assets. We assess our forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets in determining the sufficiency of our valuation allowance. Failure to achieve forecasted taxable income in the applicable tax jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in our effective tax rate on future earnings. It is possible that there may be sufficient positive evidence to release a portion of the remaining valuation allowance in those foreign jurisdictions. Release of the valuation allowance would result in a benefit to income tax expense for the period the release is recorded, which could have a material impact on net earnings. The timing and amount of the potential valuation allowance release are subject to significant management judgment and the level of profitability achieved. On December 20, 2021 the Organisation for Economic Co-operation and Development (“OECD”) released the Model GloBE Rules for Pillar Two defining a 15% global minimum tax rate for large multinational corporations. Many countries continue to consider changes in their tax laws and regulations based on the Pillar Two proposals. We are continuing to evaluate the impact of these proposed and enacted legislative changes as new guidance becomes available. Some of these legislative changes could result in double taxation of our non-U.S. earnings, a reduction in the tax benefit received from our tax incentives, or other impacts to our effective tax rate and tax liabilities. As of March 31, 2024, the company is not expecting material impacts under currently enacted legislation.
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Segment Information |
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Segment Information | Segment Information The following is a summary of the financial information of the reportable segments reconciled to the amounts reported in the condensed consolidated financial statements:
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Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table presents the changes in AOCL, net of tax for the three months ended March 31, 2024 and 2023:
________________________________ (1) Includes foreign currency translation adjustments attributable to noncontrolling interests of $(7.0) million and $5.8 million at January 1, 2024 and 2023, respectively, and $7.2 million and $2.7 million at March 31, 2024 and 2023, respectively. (2) Other comprehensive loss before reclassifications and amounts reclassified from AOCL to interest expense related to designated cash flow hedges. (3) Amounts in parentheses indicate an increase to AOCL. The following table presents the reclassifications out of AOCL:
__________________________________ (1) Amounts in parentheses indicate decreases to income. None of the reclassified amounts have a noncontrolling interest component. (2) These AOCL components are included in the computation of net periodic pension cost. See Note 11 for additional details.
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Realignment Programs |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realignment Programs | Realignment Programs In the first quarter of 2023, we identified and initiated certain realignment activities concurrent with the consolidation of our FPD aftermarket and pump operations into a single operating model. This consolidated operating model is designed to better align our go to market strategy with our product offerings, enable end-to-end lifecycle responsibility and accountability, and to facilitate more efficient operations. During 2023 we also initiated certain product and portfolio optimization activities. Additionally, we committed to an estimated $50 million in cost reduction efforts to begin in 2023. Collectively, the above realignment activities are referred to as the "2023 Realignment Programs." The activities of the 2023 Realignment Programs were identified and implemented in phases throughout 2023 and are continuing into 2024. The realignment activities consist of restructuring and non-restructuring charges. Restructuring charges represent costs associated with the relocation of certain business activities and facility closures and include related severance costs. Non-restructuring charges are primarily employee severance associated with the workforce reductions and professional service fees. Expenses are primarily reported in cost of sales ("COS") or SG&A, as applicable, in our condensed consolidated statements of income. We currently anticipate a total investment in realignment activities that have been evaluated and initiated of approximately $100 million of which $18 million is estimated to be non-cash. There are certain remaining realignment activities that are currently being evaluated, but have not yet been approved and therefore are not included in the above anticipated total investment. Generally, the aforementioned charges will be paid in cash, except for asset write-downs, which are non-cash charges. The following is a summary of total charges, net of adjustments, incurred related to our 2023 Realignment Programs:
The following is a summary of total inception to date charges, net of adjustments, related to the 2023 Realignment Programs:
Restructuring charges represent costs associated with the relocation or reorganization of certain business activities and facility closures and include costs related to employee severance at closed facilities, contract termination costs, asset write-downs and other costs. Severance costs primarily include costs associated with involuntary termination benefits. Contract termination costs include costs related to the termination of operating leases or other contract termination costs. Asset write-downs include accelerated depreciation of fixed assets, accelerated amortization of intangible assets, divestiture of certain non-strategic assets and inventory write-downs. Other costs generally include costs related to employee relocation, asset relocation, vacant facility costs (i.e., taxes and insurance) and other charges. Restructuring charges include charges related to approved, but not yet announced, facility closures. The following is a summary of restructuring charges, net of adjustments, for our restructuring activities related to our 2023 Realignment Programs:
The following is a summary of total inception to date restructuring charges, net of adjustments, related to our 2023 Realignment Programs:
The following represents the activity, primarily severance charges from reductions in force, related to the restructuring reserves for the three months ended March 31, 2024 and 2023:
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Basis of Presentation and Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated balance sheet as of March 31, 2024 and December 31, 2023, and the related condensed consolidated statements of income, condensed consolidated statements of comprehensive income (loss), condensed consolidated statements of shareholders' equity for the three months ended March 31, 2024 and 2023 and condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 of Flowserve Corporation are unaudited. In management’s opinion, all adjustments comprising normal recurring adjustments necessary for fair statement of such condensed consolidated financial statements have been made. The accompanying condensed consolidated financial statements and notes in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 ("Quarterly Report") are presented as permitted by Regulation S-X and do not contain certain information included in our annual financial statements and notes thereto. Accordingly, the accompanying condensed consolidated financial information should be read in conjunction with the audited consolidated financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2023 ("2023 Annual Report").
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Terminated Acquisition | Terminated Acquisition — On February 9, 2023, the Company entered into a definitive agreement to acquire all of the outstanding equity of Velan Inc., a manufacturer of highly engineered industrial valves. In October 2023, the Company received notice that the required French foreign investment screening approval was not obtained. As a result, the transaction was terminated. Acquisition related expenses incurred during 2023 associated with the transaction were $7.3 million. |
Accounting developments | Accounting Developments Pronouncements Implemented In September 2022, the FASB issued ASU No. 2022-04, "Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations." The amendments require a buyer that uses supplier finance programs to make annual disclosures about the program’s key terms, the balance sheet presentation of related amounts, the confirmed amount outstanding at the end of the period and associated roll-forward information. Only the amount outstanding at the end of the period must be disclosed in interim periods following the year of adoption. The amendments are effective for all entities for fiscal years beginning after December 15, 2022 on a retrospective basis, including interim periods within those fiscal years, except for the requirement to disclose roll-forward information, which is effective prospectively for fiscal years beginning after December 15, 2023. We adopted ASU No. 2022-04 effective January 1, 2023. We partner with two banks to offer our suppliers the option of participating in a supplier financing program and receive payment early. Under the program agreement, we must reimburse each bank for approved and valid invoices in accordance with the originally agreed upon terms with the supplier. We have no obligation for fees, subscription, service, commissions or otherwise with either bank. We also have no obligation for pledged assets or other forms of guarantee and may terminate either program agreement with appropriate notice. As of March 31, 2024, and December 31, 2023, $7.8 million and $13.5 million, respectively, remained outstanding with the supply chain financing partner banks and recorded within accounts payable on our condensed consolidated balance sheet. In March 2023, the FASB issued ASU No. 2023-01, "Leases (Topic 842): Common Control Arrangements." The amendments permits leasehold improvements to be amortized over the useful life of the asset when the lessee controls the use of the underlying asset and the lease is between common control entities. The amendments further allow entities to account for leasehold improvements as a transfer of assets between entities under common control through an equity adjustment when the lessee is no longer in control of the underlying asset. The amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The adoption of this ASU did not have a material impact on our condensed consolidated balance sheets, condensed consolidated statements of income or condensed consolidated statements of cash flows. In March 2023, the FASB issued ASU No. 2023-02, "Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method." The amendments allow companies to account for all of their tax equity investments using the proportional amortization method if certain conditions are met. Companies can elect to apply the proportional amortization method on a tax-credit-program-by-tax-credit-program basis rather than unilaterally or on an individual investment basis. The amendments are effective on either a modified retrospective or retrospective basis for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, depending on whether the company elects to evaluate its investments for which it still expects to receive income tax credits or other income tax benefits as of the beginning of the period of adoption or at the beginning of the earliest period presented. The adoption of this ASU did not have a material impact on our condensed consolidated balance sheets, condensed consolidated statements of income or condensed consolidated statements of cash flows. Pronouncements Not Yet Implemented In August 2023, the FASB issued ASU No. 2023-05, "Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement." The amendments require that newly formed joint ventures measure the net assets and liabilities contributed at fair value. Subsequent measurement is in accordance with the requirements for acquirers of a business in Sections 805-10-35, 805-20-35, and 805-30-35, and other generally accepted accounting principles. The amendments are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025, but companies may elect to apply the amendments retrospectively to joint ventures formed prior to January 1, 2025, if it has sufficient information. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued (or made available for issuance), either prospectively or retrospectively. We do not expect the impact of this ASU to be material. In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures." The amendments enhance the disclosure requirements of significant segment expenses and other segment items. The amendments are effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The amendments are to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. Early adoption is permitted. We are evaluating the impact of this ASU on our disclosures. In December 2023, the FASB issued ASU No. 2023-08, "Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60)." The amendments require that assets that qualify as a crypto asset, in accordance with the new guidance, must be recorded and subsequently valued at fair value at each reporting period, recognizing changes within net income of the same period. The amendments also require that companies present crypto assets measured at fair value separately from other intangible assets on the balance sheet with changes related to the remeasurement of crypto assets reported separately from changes in carrying amounts of other intangible assets in the income statement. Specific disclosure is required around the activity of crypto assets during the reporting period. The amendments are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. We do not own crypto assets, and therefore, do not expect the impact of this ASU to be material. In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740)." The amendments require that entities on an annual basis disclose specific categories in the rate reconciliation, provide additional information for reconciling items that meet a quantitative threshold, and disclose specific information about income taxes paid. The amendments eliminate previously required disclosures around changes in unrecognized tax benefits and cumulative amounts of certain temporary difference. The amendments are effective prospectively for annual periods beginning after December 15, 2024. Early adoption is permitted. We are evaluating the impact of this ASU on our disclosures.
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Fair Value | Fair ValueFair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models may be applied. Assets and liabilities recorded at fair value in our condensed consolidated balance sheets are categorized by hierarchical levels based upon the level of judgment associated with the inputs used to measure their fair values. Recurring fair value measurements are limited to investments in derivative instruments. The fair value measurements of our derivative instruments are determined using models that maximize the use of the observable market inputs including interest rate curves and both forward and spot prices for currencies, and are classified as Level II under the fair value hierarchy. The fair values of our derivatives are included in Note 5. |
Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following tables present our customer revenues disaggregated by revenue source:
Our customer sales are diversified geographically. The following tables present our revenues disaggregated by geography, based on the shipping addresses of our customers:
(1) North America represents the United States and Canada. (2) Latin America includes Mexico.
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Contract liabilities | The following tables present beginning and ending balances of contract assets and contract liabilities, current and long-term, for the three months ended March 31, 2024 and 2023:
___________________________________ (1) Included in other assets, net. (2) Included in retirement obligations and other liabilities.
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Allowance for Expected Credit Losses (Tables) |
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Summary of Changes in Allowance for Expected Credit Losses for Trade Receivables | The following table presents the changes in the allowance for expected credit losses for our accounts receivable and short-term contract assets for the three months ended March 31, 2024 and 2023:
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Summary of Changes in Allowance for Expected Credit Losses for Contract Assets | The following table presents the changes in the allowance for expected credit losses for our accounts receivable and short-term contract assets for the three months ended March 31, 2024 and 2023:
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Summary of Changes in Allowance for Expected Credit Losses for Long-term Receivables | The following table presents the changes in the allowance for long-term receivables for the three months ended March 31, 2024 and 2023:
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Stock-Based Compensation Plans (Tables) |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information Regarding Restricted Shares | The following table summarizes information regarding Restricted Shares:
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Derivative Instruments and Hedges (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value of Forward Exchange Contracts not Designated as Hedging Instruments | The fair values of foreign exchange forward contracts are summarized below:
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Impact of Net Changes in Fair Values of Forward Exchange Contracts Not Designated as Hedging Instruments | The impact of net changes in the fair values of foreign exchange forward contracts are summarized below:
|
Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Including Capital Lease Obligations | Debt, including finance lease obligations, net of discounts and debt issuance costs, consisted of:
|
Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Components of Inventory | Inventories consisted of the following:
|
Earnings (Loss) Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Net Earnings Per Common Share and Weighted Average Common Share Outstanding | The following is a reconciliation of net earnings of Flowserve Corporation and weighted average shares for calculating net earnings per common share. Earnings per weighted average common share outstanding was calculated as follows:
|
Legal Matters and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loss Contingencies by Contingency | Activity related to asbestos claims during the periods indicated was as follows:
____________________ (1) Beginning and ending claims data in each period excludes inactive claims, as the Company assumes that inactive cases will not be pursued further by the respective plaintiffs. A claim is classified as inactive either due to inactivity over a period of three years or if designated as inactive by the applicable court. (2) Represents the net change in claims as a result of the reclassification of active cases as inactive and inactive cases as active during the period indicated. Cases moved from active to inactive status are removed from the claims count without being accounted for as a "Resolved claim", and cases moved from inactive status to active status are added back to the claims count without being accounted for as a “New claim”.
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Reconciliation Of Liability For Asbestos And Environmental Claims | The following table presents the changes in the estimated asbestos liability:
|
Pension and Postretirement Benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Cost for Pension and Postretirement Benefits | Components of the net periodic cost for pension and postretirement benefits for the three months ended March 31, 2024 and 2023 were as follows:
|
Statement of Shareholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Dividends Declared | Dividends declared per share were as follows:
|
Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information of Reportable Segments | The following is a summary of the financial information of the reportable segments reconciled to the amounts reported in the condensed consolidated financial statements:
|
Accumulated Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the changes in AOCL, net of tax for the three months ended March 31, 2024 and 2023:
________________________________ (1) Includes foreign currency translation adjustments attributable to noncontrolling interests of $(7.0) million and $5.8 million at January 1, 2024 and 2023, respectively, and $7.2 million and $2.7 million at March 31, 2024 and 2023, respectively. (2) Other comprehensive loss before reclassifications and amounts reclassified from AOCL to interest expense related to designated cash flow hedges. (3) Amounts in parentheses indicate an increase to AOCL.
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Reclassifications out of Accumulated Other Comprehensive Income (Loss) | The following table presents the reclassifications out of AOCL:
__________________________________ (1) Amounts in parentheses indicate decreases to income. None of the reclassified amounts have a noncontrolling interest component. (2) These AOCL components are included in the computation of net periodic pension cost. See Note 11 for additional details.
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Realignment Programs (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | The following is a summary of total charges, net of adjustments, incurred related to our 2023 Realignment Programs:
The following is a summary of total inception to date charges, net of adjustments, related to the 2023 Realignment Programs:
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Schedule of Restructuring Reserve by Type of Cost | The following is a summary of restructuring charges, net of adjustments, for our restructuring activities related to our 2023 Realignment Programs:
The following is a summary of total inception to date restructuring charges, net of adjustments, related to our 2023 Realignment Programs:
The following represents the activity, primarily severance charges from reductions in force, related to the restructuring reserves for the three months ended March 31, 2024 and 2023:
|
Basis of Presentation and Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Adjustment to existing reserves | $ 2,000 | |||
Sales | 1,087,479 | $ 980,305 | ||
Cash and cash equivalents | 531,981 | 404,726 | $ 545,678 | $ 434,971 |
Accounts receivable, net | 914,357 | 881,869 | ||
Supplier finance program payable | 7,800 | 13,500 | ||
Velan Inc | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Business Combination, Acquisition Related Costs | $ 7,300 | |||
Operating Segments | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Sales | 1,087,479 | 980,305 | ||
FPD | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Sales | 768,763 | 699,478 | ||
FPD | Operating Segments | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Sales | $ 768,763 | $ 699,478 |
Revenue Recognition (Narrative) (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024
USD ($)
segments
|
Mar. 31, 2023 |
|
Disaggregation of Revenue [Line Items] | ||
Number of operating segments | segments | 2 | |
Revenue, remaining performance obligation, amount | $ 637 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, amount | 427 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, amount | $ 210 | |
Transferred over Time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from products and services | 17.00% | 14.00% |
Transferred at Point in Time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from products and services | 83.00% | 86.00% |
Allowance for Expected Credit Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Credit Loss [Abstract] | ||
Contract assets, allowance for credit loss as a percentage of assets | 1.00% | |
Accounts receivables | ||
Beginning balance | $ 80,013 | $ 83,062 |
Charges to cost and expenses, net of recoveries | 4,316 | 2,440 |
Currency effects and other, net | (1,382) | 1,340 |
Ending balance | 78,305 | 82,517 |
Short-term contract assets | ||
Beginning balance | 4,993 | 5,819 |
Charges to cost and expenses, net of recoveries | 0 | 0 |
Currency effects and other, net | 3 | (230) |
Ending balance | 4,986 | 5,589 |
Long-term Receivables | ||
Beginning balance | 66,864 | 66,377 |
Currency effects and other, net | (507) | (802) |
Ending balance | 66,357 | 65,575 |
Write-offs | (4,642) | (4,325) |
Write-offs | $ (10) | $ 0 |
Stock-Based Compensation Plans (Information Regarding Restricted Shares) (Details) - Restricted Stock |
3 Months Ended |
---|---|
Mar. 31, 2024
$ / shares
shares
| |
Shares | |
Outstanding, Shares, Beginning balance (in shares) | shares | 1,741,486 |
Granted, Shares (in shares) | shares | 730,434 |
Vested, Shares (in shares) | shares | (702,095) |
Forfeited, Shares (in shares) | shares | (34,982) |
Outstanding, Shares, Ending balance (in shares) | shares | 1,734,843 |
Weighted Average Grant-Date Fair Value | |
Outstanding, Weighted Average Grant-Date Fair Value, Beginning balance (in dollars per share) | $ / shares | $ 36.06 |
Granted, Weighted Average Grant-Date Fair Value (in dollars per share) | $ / shares | 41.81 |
Vested, Weighted Average Grant-Date Fair Value (in dollars per share) | $ / shares | 36.63 |
Forfeited, Weighted Average Grant-Date Fair Value (in dollars per share) | $ / shares | 32.76 |
Outstanding, Weighted Average Grant-Date Fair Value, Ending balance (in dollars per share) | $ / shares | $ 38.32 |
Derivative Instruments and Hedges (Textual) (Details) - Not Designated as Hedging Instrument - Forward Exchange Contract - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Derivative [Line Items] | ||
Derivative, notional amount | $ 640.2 | $ 656.6 |
Minimum remaining maturity of foreign currency derivatives | 2 days | |
Maximum remaining maturity of foreign currency derivatives | 20 months |
Derivative Instruments and Hedges (Fair Value Balance Sheet Disclosures) (Details) - Not Designated as Hedging Instrument - Foreign Exchange Contract - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Derivative [Line Items] | ||
Current derivative assets | $ 2,387 | $ 1,915 |
Noncurrent derivative assets | 0 | 17 |
Current derivative liabilities | 2,223 | 3,855 |
Noncurrent derivative liabilities | $ 37 | $ 5 |
Derivative Instruments and Hedges (Fair Value of Forward Exchange Contracts) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Forward Contracts | ||
Derivative [Line Items] | ||
Gains (losses) recognized in income | $ 5,288 | $ (1,983) |
Debt (Schedule of Debt) (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Debt Instrument [Line Items] | ||
Debt issuance costs, net | $ 5,164 | |
Finance lease obligations and other borrowings | $ 23,353 | 23,467 |
Debt and finance lease obligations | 1,218,764 | 1,233,550 |
Less amounts due within one year | 66,428 | 66,243 |
Total debt due after one year | $ 1,152,336 | 1,167,307 |
2030 USD Senior notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 3.50% | |
Debt Instrument, Unamortized Discount | $ 4,332 | |
Debt issuance costs, net | 4,479 | |
Long-term debt | $ 495,668 | 495,521 |
2032 USD Senior Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 2.80% | |
Debt Instrument, Unamortized Discount | $ 5,021 | |
Long-term debt | 494,979 | 494,836 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Debt issuance costs, net | $ 236 | $ 274 |
Effective interest rate (as a percent) | 6.70% | 6.70% |
Long-term debt | $ 204,764 | $ 219,726 |
Fair Value (Details) $ in Millions |
Mar. 31, 2024
USD ($)
|
---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Senior notes | $ 990.6 |
Estimate of Fair Value Measurement | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Senior notes | $ 858.5 |
Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Net Components of Inventory | ||
Raw materials | $ 420,515 | $ 407,979 |
Work in process | 309,443 | 302,655 |
Finished goods | 263,080 | 278,787 |
Less: Excess and obsolete reserve | (109,697) | (109,484) |
Inventories | $ 883,341 | $ 879,937 |
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Earnings Per Share [Abstract] | ||
Net earnings of Flowserve Corporation | $ 74,220 | $ 26,766 |
Earnings attributable to common and participating shareholders | $ 74,220 | $ 26,766 |
Weighted average shares: | ||
Common stock (in shares) | 131,464,000 | 130,886,000 |
Participating securities (in shares) | 46,000 | 44,000 |
Denominator for basic earnings per common share (in shares) | 131,510,000 | 130,930,000 |
Effect of potentially dilutive securities (in shares) | 858,000 | 824,000 |
Denominator for diluted earnings per common share (in shares) | 132,368,000 | 131,754,000 |
Earnings per common share: | ||
Basic (in dollars per share) | $ 0.56 | $ 0.20 |
Diluted (in dollars per share) | $ 0.56 | $ 0.20 |
Legal Matters and Contingencies (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024
USD ($)
claim
|
Mar. 31, 2023
USD ($)
claim
|
|
Liability for Asbestos and Environmental Claims, Net [Roll Forward] | ||
Beginning claims | 8,236 | 8,139 |
New claims | 617 | 577 |
Resolved claims | (847) | (640) |
Other | 219 | (5) |
Ending claims | 8,225 | 8,071 |
Loss contingency expense | $ | $ 1.8 | |
Payments For (Proceeds From) Insurance Settlements | $ | $ (3.7) | $ (5.6) |
Legal Matters and Contingencies - Estimated Asbestos Liability (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Liability for Asbestos and Environmental Claims, Net [Roll Forward] | ||
Beginning balance, January 1, | $ 102,903 | $ 98,652 |
Asbestos liability adjustments, net | 0 | (106) |
Cash payment activity | (1,919) | (3,766) |
Other, net | (1,592) | (1,495) |
Ending balance, March 31, | $ 99,392 | $ 93,285 |
Shareholders' Equity (Details) - USD ($) |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Feb. 19, 2024 |
Dec. 31, 2023 |
Dec. 31, 2016 |
|
Equity, Class of Treasury Stock [Line Items] | |||||
Cash dividends declared per share (in dollars per share) | $ 0.21 | $ 0.20 | |||
Authorized amount to be repurchased | $ 300,000,000 | ||||
Repurchase of shares (in shares) | 57,000 | 0 | |||
Treasury stock acquired | $ 2,500,000 | ||||
Remaining authorized repurchase capacity | $ 297,500,000 | $ 96,100,000 | |||
Share repurchase program 2014 | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Authorized amount to be repurchased | $ 500,000,000 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Income before income tax | $ 98,057 | $ 34,449 |
Income tax expense | $ 20,142 | $ 4,453 |
Effective tax rate (as a percent) | 20.50% | 12.90% |
Unrecognized tax benefits, period decrease | $ 1,100 | |
Unrecognized tax benefits approximate amount of estimated reduction within the next twelve months | $ 5,000 |
Accumulated Other Comprehensive Income (Loss) (Reclassifications out of AOCI) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net of tax | $ (854) | $ (452) |
Amortization of actuarial losses | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Reclassification | (630) | (283) |
Prior service costs | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Reclassification | (153) | (151) |
Pension and other post-retirement effects | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Tax benefit (expense) | (76) | 12 |
Net of tax | (859) | (422) |
Cash flow hedging activity | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Reclassification | (30) | (39) |
Tax benefit (expense) | 35 | 9 |
Net of tax | $ 5 | $ (30) |
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