þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
FOR THE FISCAL YEAR ENDED DECEMBER 31, | ||
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
New York | 31-0267900 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
5215 N. O’Connor Boulevard | 75039 | |
Suite 2300, Irving, Texas | (Zip Code) | |
(Address of principal executive offices) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock, $1.25 Par Value | New York Stock Exchange |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
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ITEM 1. | BUSINESS. |
• oil and gas | 39 | % | ||
• chemical | % | |||
• general industries(1) | % | |||
• power generation | % | |||
• water | 6 |
% |
(1) | General industries also includes sales to distributors, whose end customers typically operate in the industries we primarily |
• North America | 35 | % | ||
• Europe | 28 | % | ||
• Middle East and Africa | 11 | % | ||
• Asia Pacific | 18 | % | ||
• Latin America | 8 | % |
• | Flowserve Pump Division (“FPD”) for engineered pumps, industrial pumps and related services; | |
• | Flow Control Division (“FCD”) for engineered and industrial valves, control valves, actuators and controls and related services; and | |
• | Flow Solutions Division (“FSD”) for precision mechanical seals and related products and services. |
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Centrifugal Pumps | Positive Displacement Pumps | Specialty Products & Systems | ||
• Chemical Process ANSI and ISO | • Reciprocating | • Hydraulic Decoking Systems | ||
• Petroleum Process API 610 | • Gear | • Reactor Recycle Systems | ||
• Horizontal Between Bearing Single stage | • Twin Screw | • Cryogenic Liquid Expander | ||
• Horizontal Between Bearing Multi stage | • Ionic Gas Compression | |||
• Vertical | • Thrusters | |||
• Submersible Motor | ||||
• Nuclear |
• ACEC | • | |
• Aldrich | • | |
• Byron Jackson | • | |
• Cameron | • Sier-Bath | |
• Durco | • TKL | |
• | • United Centrifugal | |
• | • Western Land Roller | |
• | • Wilson-Snyder | |
• | • Worthington | |
• Jeumont-Schneider | • Worthington-Simpson | |
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• | • | |
• Control Valves | • | |
• Ball Valves | • Intelligent Positioners | |
• Gate Valves | • Electric/Electronic Actuators | |
• Globe Valves | • Pneumatic Actuators | |
• Check Valves | • Hydraulic Actuators | |
• Butterfly Valves | • Diaphragm Actuators | |
• Lined Plug Valves | • Switches | |
• Lubricated Plug Valves | • Steam Traps | |
• | ||
• Condensate and Energy Recovery Systems | ||
• | • | |
• Diagnostic Software | • Digital Communications | |
• Electro Pneumatic Positioners | • | |
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• Accord | • NAF | |
• Anchor/Darling | • NAVAL | |
• Argus | • Noble Alloy | |
• Atomac | • Norbro | |
• Automax | • Nordstrom | |
• Battig | • PMV | |
• Durco | • P+W | |
• Edward | • Serck Audco | |
• Gestra | • Schmidt Armaturen | |
• Kammer | • Valtek | |
• Limitorque | • Vogt | |
• McCANNA/MARPAC | • Worcester Controls |
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• Cartridge Seals | • Gas Barrier Seals | |
• Dry-Running Seals | • Couplings | |
• Metal Bellow Seals | • Service and Repair | |
• Elastomeric Seals | • Accessories and Support Systems | |
• Slurry Seals | • Monitoring and Diagnostics | |
• Split Seals |
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• BW Seals | • Interseal | |
• Durametallic | • Pacific Wietz | |
• Five Star Seal | • Pac-Seal | |
• Flowserve | • QRCtm | |
• Flowstar | • ReadySeal | |
• GASPACtm | • LifeCycle Advantage |
• | high-temperature, | |
• | ||
• | ||
• | ||
• |
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Also available on | ||
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ITEM 1A. | RISK FACTORS. |
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• | changes in foreign currency exchange rates; | |
• | instability in a specific country’s or region’s political or economic conditions, particularly in emerging markets and the Middle East; | |
• | trade protection measures, such as tariff increases, and import and export licensing and control requirements; | |
• | potentially negative consequences from changes in tax |
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• | difficulty in staffing and managing widespread operations; | |
• | difficulty of enforcing agreements and collecting receivables through some foreign legal systems; | |
• | differing and, in some cases, more stringent labor regulations; | |
• | partial or total expropriation; | |
• | differing protection of intellectual property; | |
• | unexpected changes in regulatory requirements; | |
• | inability to repatriate income or capital; and | |
• | difficulty in administering and enforcing corporate policies, which may be different than the normal business practices of local cultures. |
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• | loss of key employees or customers of the acquired company; | |
• | conforming the acquired company’s standards, processes, procedures and controls, including accounting systems and controls, with our | |
• | coordinating operations that are increased in scope, geographic diversity and complexity; | |
• | retooling and reprogramming of equipment; | |
• | hiring additional management and other critical personnel; and | |
• | the diversion of management’s attention from ourday-to-day operations. |
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ITEM 1B. | UNRESOLVED STAFF COMMENTS. |
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ITEM 2. | PROPERTIES. |
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Number | Approximate | Number | Approximate | |||||||||||||
of Plants | Square Footage | of Plants | Square Footage | |||||||||||||
FPD | ||||||||||||||||
U.S. | 8 | 1,390,000 | 7 | 1,283,000 | ||||||||||||
Non-U.S. | 20 | 2,557,000 | 19 | 3,107,000 | ||||||||||||
FCD | ||||||||||||||||
U.S. | 5 | 1,027,000 | 5 | 1,027,000 | ||||||||||||
Non-U.S. | 15 | 1,394,000 | 11 | 1,332,000 | ||||||||||||
FSD | ||||||||||||||||
U.S. | 4 | 204,000 | 1 | 130,000 | ||||||||||||
Non-U.S. | 5 | 260,000 | 3 | 233,000 |
ITEM 3. | LEGAL PROCEEDINGS. |
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ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
ITEM 5. | MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
2007 | 2006 | 2005 | 2008 | 2007 | ||||||||||||
First Quarter | $ | 58.34/$48.98 | $ | 58.46/$40.91 | $ | 27.72/$23.69 | $111.41/$80.05 | $58.34/$48.98 | ||||||||
Second Quarter | $ | 72.42/$58.23 | $ | 60.75/$48.70 | $ | 31.25/$25.16 | $138.53/$104.81 | $72.42/$58.23 | ||||||||
Third Quarter | $ | 78.14/$63.53 | $ | 55.54/$47.84 | $ | 37.78/$29.73 | $141.35/$81.17 | $78.14/$63.53 | ||||||||
Fourth Quarter | $ | 101/$75.39 | $ | 55.28/$48.52 | $ | 39.75/$32.75 | $87.50/$37.92 | $101.00/$75.39 |
Declaration Date | Record Date | Payment Date | Dividend Per Share | |||||
November 15, 2007 | December 26, 2007 | January 9, 2008 | $ | 0.15 | ||||
August 16, 2007 | September 26, 2007 | October 10, 2007 | $ | 0.15 | ||||
May 17, 2007 | June 27, 2007 | July 11, 2007 | $ | 0.15 | ||||
February 28, 2007 | March 28, 2007 | April 11, 2007 | $ | 0.15 |
Declaration Date | Record Date | Payment Date | Dividend Per Share | |||||||||
November 20, 2008 | December 24, 2008 | January 7, 2009 | $ | 0.25 | ||||||||
August 14, 2008 | September 24, 2008 | October 8, 2008 | 0.25 | |||||||||
May 30, 2008 | June 25, 2008 | July 9, 2008 | 0.25 | |||||||||
February 27, 2008 | March 26, 2008 | April 9, 2008 | 0.25 |
Declaration Date | Record Date | Payment Date | Dividend Per Share | |||||||||
November 15, 2007 | December 26, 2007 | January 9, 2008 | $ | 0.15 | ||||||||
August 16, 2007 | September 26, 2007 | October 10, 2007 | 0.15 | |||||||||
May 17, 2007 | June 27, 2007 | July 11, 2007 | 0.15 | |||||||||
February 28, 2007 | March 28, 2007 | April 11, 2007 | 0.15 |
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Maximum Number of | ||||||||||||||||
Shares (or | ||||||||||||||||
Total Number of | Approximate Dollar | |||||||||||||||
Total Number | Shares Purchased as | Value) That May Yet | ||||||||||||||
of Shares | Average Price Paid | Part of Publicly | Be Purchased Under | |||||||||||||
Period | Purchased | per Share | Announced Plan | the Plan | ||||||||||||
(In millions) | ||||||||||||||||
October 1-31 | 383 | (1) | $ | 59.68 | — | $ | 165.0 | |||||||||
November 1-30 | 572,484 | (2) | 49.42 | 570,000 | 136.8 | |||||||||||
December 1-31 | 43,392 | (3) | 43.46 | 42,000 | 135.0 | |||||||||||
Total | 616,259 | $ | 49.00 | 612,000 | ||||||||||||
(1) | Includes a total of 383 shares that were tendered by employees to satisfy minimum tax withholding amounts for restricted stock awards at an average price per share of $59.68. | |
(2) | Includes a total of 292 shares that were tendered by employees to satisfy minimum tax withholding amounts for restricted stock awards at an average price per share of $51.25, and includes 2,192 shares of common stock purchased at a price of $61.97 per share by a rabbi trust that we established in connection with our director deferral plans pursuant to which non-employee directors may elect to defer directors’ quarterly cash compensation to be paid at a later date in the form of common stock. | |
(3) | Includes a total of 1,392 shares that were tendered by employees to satisfy minimum tax withholding amounts for restricted stock awards at an average price per share of $52.03. |
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Indexed Returns | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year Ending | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Base | Base | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Period | Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company/Index | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||
Flowserve Corporation | 100 | 141.18 | 186.21 | 267.48 | 341.24 | 655.82 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Flowserve | $ | 100.00 | $ | 131.90 | $ | 189.46 | $ | 241.71 | $ | 464.55 | $ | 251.68 | ||||||||||||||||||||||||||||||||||||||||||||||||
S&P 500 Index | 100 | 128.68 | 142.69 | 149.70 | 173.34 | 182.86 | 100.00 | 110.88 | 116.32 | 134.69 | 142.09 | 89.52 | ||||||||||||||||||||||||||||||||||||||||||||||||
S&P 500 Industrial Machinery | 100 | 138.36 | 163.44 | 160.26 | 183.01 | 221.83 | 100.00 | 118.13 | 115.83 | 132.27 | 160.33 | 96.12 | ||||||||||||||||||||||||||||||||||||||||||||||||
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ITEM 6. | SELECTED FINANCIAL DATA |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||
2007 | 2006(a) | 2005(b) | 2004(c) | 2003(d) | 2008 | 2007 | 2006(a) | 2005(b) | 2004(c) | |||||||||||||||||||||||||||||||||||
(Amounts in thousands, except per share data and ratios) | (Amounts in thousands, except per share data and ratios) | |||||||||||||||||||||||||||||||||||||||||||
RESULTS OF OPERATIONS | ||||||||||||||||||||||||||||||||||||||||||||
Sales | $ | 3,762,694 | $ | 3,061,063 | $ | 2,695,277 | $ | 2,522,489 | $ | 2,248,852 | $ | 4,473,473 | $ | 3,762,694 | $ | 3,061,063 | $ | 2,695,277 | $ | 2,522,489 | ||||||||||||||||||||||||
Gross profit | 1,247,722 | 1,007,302 | 870,561 | 763,158 | 684,126 | 1,580,312 | 1,247,722 | 1,007,302 | 870,561 | 763,158 | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expense | (856,501 | ) | (782,503 | ) | (684,271 | ) | (605,145 | ) | (514,229 | ) | (984,403 | ) | (856,501 | ) | (782,503 | ) | (684,271 | ) | (605,145 | ) | ||||||||||||||||||||||||
Integration expense | — | — | — | — | (15,786 | ) | ||||||||||||||||||||||||||||||||||||||
Restructuring expense | — | — | — | — | (2,162 | ) | ||||||||||||||||||||||||||||||||||||||
Operating income | 409,916 | 239,619 | 198,823 | 166,079 | 154,761 | 612,872 | 409,916 | 239,619 | 198,823 | 166,079 | ||||||||||||||||||||||||||||||||||
Interest expense | (60,119 | ) | (65,688 | ) | (74,125 | ) | (80,407 | ) | (83,720 | ) | (51,293 | ) | (60,119 | ) | (65,688 | ) | (74,125 | ) | (80,407 | ) | ||||||||||||||||||||||||
Provision for income taxes | (104,294 | ) | (73,238 | ) | (40,583 | ) | (42,097 | ) | (18,165 | ) | (147,721 | ) | (104,294 | ) | (73,238 | ) | (40,583 | ) | (42,097 | ) | ||||||||||||||||||||||||
Income from continuing operations | 255,774 | 114,038 | 51,419 | 28,751 | 51,252 | 442,413 | 255,774 | 114,038 | 51,419 | 28,751 | ||||||||||||||||||||||||||||||||||
Income from continuing operations per share (diluted) | 4.46 | 2.00 | 0.91 | 0.52 | 0.93 | 7.74 | 4.46 | 2.00 | 0.91 | 0.52 | ||||||||||||||||||||||||||||||||||
Net earnings | 255,774 | 115,032 | 17,074 | 27,069 | 45,237 | 442,413 | 255,774 | 115,032 | 17,074 | 27,069 | ||||||||||||||||||||||||||||||||||
Net earnings per share (diluted) | 4.46 | 2.02 | 0.30 | 0.49 | 0.82 | 7.74 | 4.46 | 2.02 | 0.30 | 0.49 | ||||||||||||||||||||||||||||||||||
Cash flows from operating activities | 417,365 | 163,186 | 127,445 | 267,501 | 181,304 | 406,025 | 417,365 | 163,186 | 127,445 | 267,501 | ||||||||||||||||||||||||||||||||||
Cash dividends declared per share | 0.60 | — | — | — | — | 1.00 | 0.60 | — | — | — | ||||||||||||||||||||||||||||||||||
FINANCIAL CONDITION | ||||||||||||||||||||||||||||||||||||||||||||
Working capital | $ | 646,591 | $ | 418,846 | $ | 398,356 | $ | 358,116 | $ | 468,317 | $ | 724,429 | $ | 646,591 | $ | 418,846 | $ | 398,356 | 358,116 | |||||||||||||||||||||||||
Total assets | 3,520,421 | 2,869,235 | 2,613,664 | 2,650,368 | 2,693,976 | 4,023,694 | 3,520,421 | 2,869,235 | 2,613,664 | 2,650,368 | ||||||||||||||||||||||||||||||||||
Total debt | 557,976 | 564,569 | 665,136 | 701,844 | 950,748 | 573,348 | 557,976 | 564,569 | 665,136 | 701,844 | ||||||||||||||||||||||||||||||||||
Retirement obligations and other liabilities | 426,469 | 408,094 | 396,013 | 397,655 | 370,201 | 502,314 | 426,469 | 408,094 | 396,013 | 397,655 | ||||||||||||||||||||||||||||||||||
Shareholders’ equity | 1,292,977 | 1,020,586 | 853,406 | 886,558 | 835,927 | 1,367,767 | 1,292,977 | 1,020,586 | 853,406 | 886,558 | ||||||||||||||||||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||||||||
Return on average net assets | 13.8 | % | 8.1 | % | 5.6 | % | 5.1 | % | 4.6 | % | 20.3 | % | 13.8 | % | 8.1 | % | 5.6 | % | 5.1 | % | ||||||||||||||||||||||||
Net debt to net capital ratio | 12.5 | % | 32.6 | % | 40.0 | % | 41.9 | % | 51.8 | % | 6.9 | % | 12.5 | % | 32.6 | % | 40.0 | % | 41.9 | % |
(a) | Results of operations in 2006 include stock option expense of $6.9 million as a result of adoption of the provisions of Statement of Financial Accounting Standard No. 123(R), “Share-Based Payment,” resulting in a reduction in after tax net earnings of $5.5 million. | |
(b) | Results of operations in 2005 include a loss on debt extinguishment of $27.7 million and a $30.1 million impairment of assets held for sale related to our General Services Group, which is included in discontinued operations, resulting in a reduction in after tax net earnings of $40.2 million. | |
(c) | Financial condition in 2004 includes the effects of the accounts receivable securitization, which increased cash by $60.0 million, reduced accounts receivable by $48.7 million and increased total debt by $11.3 million. | |
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ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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• | Flowserve Pump Division (“FPD”): engineered and industrial pumps, pump systems, submersible motors and related services; | |
• | Flow Control Division (“FCD”): engineered and industrial valves, control valves, actuators, controls and related services; and | |
• | Flow Solutions Division (“FSD”): mechanical seals, auxiliary systems and parts and related services. |
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• | expanding our global presence to capture business in the developing geographic market | |
• | utilizing low-cost sourcing opportunities to remain competitive in the global economy; and | |
• | attracting and retaining the global intellectual capital required to support our global growth plans in new geographical areas. |
• | driving improved customer fulfillment through metrics such as on-time delivery, cost reduction, quality, cycle time reduction and warranty cost reduction as a percentage of sales; | |
• | continuing to develop a culture of continuous improvement that delivers maximum productivity and cost efficiencies; and | |
• | implementing global functional competencies to drive standardized processes. |
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• | utilizing these capabilities to drive employee engagement through our training programs and facilitate our cross-divisional and functional development assignments; |
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• | developing talent acquisition programs such as our engineering recruitment program to address critical talent needs to support our emerging markets and global growth; | |
• | capturing the intellectual capital in the current workforce, disseminating it throughout our company and sharing it | |
• | creating a total compensation program that provides our associates with equitable opportunities that are competitive and linked to business and individual performance; and | |
• | building a diversified organization with a strong ethical and compliance culture based on transparency and trust. |
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2007 | 2006 | 2005 | ||||||||||
(Amounts in millions) | ||||||||||||
Bookings — continuing operations | $ | 4,318.7 | $ | 3,617.0 | $ | 2,931.9 | ||||||
Bookings — discontinued operations(1) | — | — | 90.4 | |||||||||
Total bookings | 4,318.7 | 3,617.0 | 3,022.3 | |||||||||
Backlog (at period end) | 2,276.6 | 1,630.0 | 994.1 |
2008 | 2007 | 2006 | ||||||||||
(Amounts in millions) | ||||||||||||
Bookings | $ | 5,105.7 | $ | 4,318.7 | $ | 3,617.0 | ||||||
Backlog (at period end) | 2,825.1 | 2,276.6 | 1,630.0 |
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2007 | 2006 | 2005 | ||||||||||
(Amounts in millions) | ||||||||||||
Sales | $ | 3,762.7 | $ | 3,061.1 | $ | 2,695.3 |
2008 | 2007 | 2006 | ||||||||||
(Amounts in millions) | ||||||||||||
Sales | $ | 4,473.5 | $ | 3,762.7 | $ | 3,061.1 |
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2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in millions) | (Amounts in millions) | |||||||||||||||||||||||
Gross profit | $ | 1,247.7 | $ | 1,007.3 | $ | 870.6 | $ | 1,580.3 | $ | 1,247.7 | $ | 1,007.3 | ||||||||||||
Gross profit margin | 33.2 | % | 32.9 | % | 32.3 | % | 35.3 | % | 33.2 | % | 32.9 | % |
2007 | 2006 | 2005 | ||||||||||
(Amounts in millions) | ||||||||||||
SG&A expense | $ | 856.5 | $ | 782.5 | $ | 684.3 | ||||||
SG&A expense as a percentage of sales | 22.8 | % | 25.6 | % | 25.4 | % |
2008 | 2007 | 2006 | ||||||||||
(Amounts in millions) | ||||||||||||
SG&A | $ | 984.4 | $ | 856.5 | $ | 782.5 | ||||||
SG&A as a percentage of sales | 22.0 | % | 22.8 | % | 25.6 | % |
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2007 | 2006 | 2005 | ||||||||||
(Amounts in millions) | ||||||||||||
Net earnings from affiliates | $ | 18.7 | $ | 14.8 | $ | 12.5 |
2008 | 2007 | 2006 | ||||||||||
(Amounts in millions) | ||||||||||||
Net earnings from affiliates | $ | 17.0 | $ | 18.7 | $ | 14.8 |
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in millions) | (Amounts in millions) | |||||||||||||||||||||||
Operating income | $ | 409.9 | $ | 239.6 | $ | 198.8 | $ | 612.9 | $ | 409.9 | $ | 239.6 | ||||||||||||
Operating income as a percentage of sales | 10.9 | % | 7.8 | % | 7.4 | % | 13.7 | % | 10.9 | % | 7.8 | % |
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2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in millions) | (Amounts in millions) | |||||||||||||||||||||||
Interest expense | $ | (60.1 | ) | $ | (65.7 | ) | $ | (74.1 | ) | $ | (51.3 | ) | $ | (60.1 | ) | $ | (65.7 | ) | ||||||
Interest income | 4.3 | 7.6 | 3.4 | 8.4 | 4.3 | 7.6 | ||||||||||||||||||
Loss on early extinguishment of debt | (0.4 | ) | (0.7 | ) | (27.7 | ) |
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2008 | 2007 | 2006 | ||||||||||
(Amounts in millions) | ||||||||||||
Other income, net | $ | 20.2 | $ | 5.9 | $ | 5.7 |
2007 | 2006 | 2005 | ||||||||||
(Amounts in millions) | ||||||||||||
Other income (expense), net | $ | 6.4 | $ | 6.4 | $ | (8.4 | ) |
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in millions) | (Amounts in millions) | |||||||||||||||||||||||
Provision for income taxes | $ | 104.3 | $ | 73.2 | $ | 40.6 | $ | 147.7 | $ | 104.3 | $ | 73.2 | ||||||||||||
Effective tax rate | 29.0 | % | 39.1 | % | 44.1 | % | 25.0 | % | 29.0 | % | 39.1 | % |
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2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in millions) | (Amounts in millions, except per share amounts) | |||||||||||||||||||||||
Income from continuing operations | $ | 255.8 | $ | 114.0 | $ | 51.4 | $ | 442.4 | $ | 255.8 | $ | 114.0 | ||||||||||||
Net earnings(1) | 255.8 | 115.0 | 17.1 | 442.4 | 255.8 | 115.0 | ||||||||||||||||||
Net earnings per share from continuing operations — diluted | 4.46 | 2.00 | 0.91 | 7.74 | 4.46 | 2.00 | ||||||||||||||||||
Net earnings per share — diluted | 4.46 | 2.02 | 0.30 | 7.74 | 4.46 | 2.02 | ||||||||||||||||||
Average diluted shares | 57.3 | 56.9 | 56.7 | 57.2 | 57.3 | 56.9 |
(1) | Net earnings in 2006 includes a gain of $1.0 million from discontinued operations, representing the reduction in the loss on the sale of |
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2007 | 2006 | 2005 | ||||||||||
(Amounts in millions) | ||||||||||||
Other comprehensive income (expense) | $ | 69.0 | $ | 63.5 | $ | (63.7 | ) |
2008 | 2007 | 2006 | ||||||||||
(Amounts in millions) | ||||||||||||
Other comprehensive (expense) income | $ | (189.9 | ) | $ | 69.0 | $ | 63.5 |
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Flowserve Pump Division | Flowserve Pump Division | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in millions) | (Amounts in millions) | |||||||||||||||||||||||
Bookings | $ | 2,551.4 | $ | 2,110.9 | $ | 1,575.7 | $ | 3,040.3 | $ | 2,551.4 | $ | 2,110.9 | ||||||||||||
Sales | 2,095.4 | 1,617.7 | 1,398.4 | 2,514.8 | 2,095.4 | 1,617.7 | ||||||||||||||||||
Gross profit | 596.6 | 457.4 | 395.8 | 786.0 | 596.6 | 457.4 | ||||||||||||||||||
Gross profit margin | 28.5 | % | 28.3 | % | 28.3 | % | 31.3 | % | 28.5 | % | 28.3 | % | ||||||||||||
Segment operating income | 274.2 | 172.7 | 149.8 | 391.0 | 274.2 | 172.7 | ||||||||||||||||||
Segment operating income as a percentage of sales | 13.1 | % | 10.7 | % | 10.7 | % | 15.5 | % | 13.1 | % | 10.7 | % | ||||||||||||
Backlog (at period end) | 1,775.3 | 1,263.3 | 703.5 | 2,253.1 | 1,775.3 | 1,263.3 |
38
40
3941
Flow Control Division | Flow Control Division | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in millions) | (Amounts in millions) | |||||||||||||||||||||||
Bookings — continuing operations | $ | 1,245.7 | $ | 1,060.9 | $ | 936.0 | ||||||||||||||||||
Bookings — discontinued operations | — | — | 90.4 | |||||||||||||||||||||
Total bookings | 1,245.7 | 1,060.9 | 1,026.4 | |||||||||||||||||||||
Bookings | $ | 1,486.4 | $ | 1,245.7 | $ | 1,060.9 | ||||||||||||||||||
Sales | 1,163.2 | 994.8 | 894.3 | 1,381.7 | 1,163.2 | 994.8 | ||||||||||||||||||
Gross profit | 405.8 | 338.3 | 287.7 | 497.7 | 405.8 | 338.3 | ||||||||||||||||||
Gross profit margin | 34.9 | % | 34.0 | % | 32.2 | % | 36.0 | % | 34.9 | % | 34.0 | % | ||||||||||||
Segment operating income | 163.7 | 115.9 | 92.1 | 218.4 | 163.7 | 115.9 | ||||||||||||||||||
Segment operating income as a percentage of sales | 14.1 | % | 11.6 | % | 10.3 | % | 15.8 | % | 14.1 | % | 11.6 | % | ||||||||||||
Backlog (at period end) | 414.8 | 314.3 | 240.6 | 482.9 | 414.8 | 314.3 |
4042
41
43
Flow Solutions Division | Flow Solutions Division | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in millions) | (Amounts in millions) | |||||||||||||||||||||||
Bookings | $ | 592.5 | $ | 505.0 | $ | 463.4 | $ | 668.8 | $ | 592.5 | $ | 505.0 | ||||||||||||
Sales | 564.5 | 496.6 | 443.6 | 653.7 | 564.5 | 496.6 | ||||||||||||||||||
Gross profit | 252.6 | 219.0 | 194.9 | 299.1 | 252.6 | 219.0 | ||||||||||||||||||
Gross profit margin | 44.7 | % | 44.1 | % | 43.9 | % | 45.8 | % | 44.7 | % | 44.1 | % | ||||||||||||
Segment operating income | 111.5 | 98.5 | 87.5 | 127.3 | 111.5 | 98.5 | ||||||||||||||||||
Segment operating income as a percentage of sales | 19.8 | % | 19.8 | % | 19.7 | % | 19.5 | % | 19.8 | % | 19.8 | % | ||||||||||||
Backlog (at period end) | 109.4 | 74.4 | 61.2 | 118.2 | 109.4 | 74.4 |
4244
2007 | 2006 | 2005 | ||||||||||
(Amounts in millions) | ||||||||||||
Net cash flows provided by operating activities | $ | 417.4 | $ | 163.2 | $ | 127.4 | ||||||
Net cash flows used by investing activities | (77.1 | ) | (77.7 | ) | (39.3 | ) | ||||||
Net cash flows used by financing activities | (49.8 | ) | (114.5 | ) | (53.3 | ) |
2008 | 2007 | 2006 | ||||||||||
(Amounts in millions) | ||||||||||||
Net cash flows provided by operating activities | $ | 406.0 | $ | 417.4 | $ | 163.2 | ||||||
Net cash flows used by investing activities | (117.2 | ) | (77.1 | ) | (77.7 | ) | ||||||
Net cash flows used by financing activities | (182.7 | ) | (49.8 | ) | (114.5 | ) |
45
43
46
44
2007 | 2006 | 2005 | ||||||||||
(Amounts in millions) | ||||||||||||
Capital expenditures | $ | 89.0 | $ | 73.5 | $ | 49.3 | ||||||
Depreciation expense | 67.8 | 60.5 | 59.8 |
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Amounts in millions) | (Amounts in thousands) | |||||||||||||||
Term Loan, interest rate of 6.40% in 2007 and 6.88% in 2006 | $ | 555,379 | $ | 558,220 | ||||||||||||
Capital lease obligations and other | 2,597 | 6,349 | ||||||||||||||
Term Loan, interest rate of 2.99% in 2008 and 6.40% in 2007 | $ | 549,697 | $ | 555,379 | ||||||||||||
Capital lease obligations and other borrowings | 23,651 | 2,597 | ||||||||||||||
Debt and capital lease obligations | 557,976 | 564,569 | 573,348 | 557,976 | ||||||||||||
Less amounts due within one year | 7,181 | 8,050 | 27,731 | 7,181 | ||||||||||||
Total debt due after one year | $ | 550,795 | $ | 556,519 | $ | 545,617 | $ | 550,795 | ||||||||
45
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48
49
Payments Due by Period | Payments Due By Period | |||||||||||||||||||||||||||||||||||||||
Beyond 5 | Beyond 5 | |||||||||||||||||||||||||||||||||||||||
Within 1 Year | 1-3 Years | 3-5 Years | Years | Total | Within 1 Year | 1-3 Years | 3-5 Years | Years | Total | |||||||||||||||||||||||||||||||
(Amounts in millions) | (Amounts in millions) | |||||||||||||||||||||||||||||||||||||||
Long-term debt | $ | 5.7 | $ | 11.4 | $ | 538.3 | $ | — | $ | 555.4 | $ | 5.7 | $ | 143.5 | $ | 400.6 | $ | — | $ | 549.8 | ||||||||||||||||||||
Fixed interest payments(1) | 2.5 | 1.9 | — | — | 4.4 | 8.3 | 2.7 | — | — | 11.0 | ||||||||||||||||||||||||||||||
Variable interest payments(2) | 34.9 | 68.5 | 45.2 | — | 148.6 | 16.2 | 32.0 | 5.4 | — | 53.6 | ||||||||||||||||||||||||||||||
Capital lease obligations | 0.2 | 0.5 | — | — | 0.7 | 0.3 | 1.1 | — | — | 1.4 | ||||||||||||||||||||||||||||||
Operating leases | 34.5 | 50.0 | 27.8 | 15.2 | 127.5 | 45.3 | 66.4 | 39.0 | 33.8 | 184.5 | ||||||||||||||||||||||||||||||
Purchase obligations:(3) | ||||||||||||||||||||||||||||||||||||||||
Inventory | 517.5 | 11.1 | — | — | 528.6 | 649.8 | 48.6 | — | — | 698.4 | ||||||||||||||||||||||||||||||
Non-inventory | 55.7 | 3.3 | 0.3 | — | 59.3 | 47.5 | 2.9 | 1.8 | — | 52.2 | ||||||||||||||||||||||||||||||
Retirement and postretirement benefits(4) | 44.3 | 94.5 | 94.8 | 236.4 | 470.0 | |||||||||||||||||||||||||||||||||||
Pension and postretirement benefits(4) | 45.2 | 93.7 | 98.3 | 265.0 | 502.2 | |||||||||||||||||||||||||||||||||||
Total | $ | 695.3 | $ | 241.2 | $ | 706.4 | $ | 251.6 | $ | 1,894.5 | $ | 818.3 | $ | 390.9 | $ | 545.1 | $ | 298.8 | $ | 2,053.1 | ||||||||||||||||||||
(1) | Fixed interest payments | |
(2) | Variable interest payments under our Credit Facilities were estimated using a base rate of three-month LIBOR as of December 31, | |
(3) | Purchase obligations are presented at the face value of the purchase order, excluding the effects of early termination provisions. Actual payments could be less than amounts presented herein. | |
(4) | Retirement and postretirement benefits represent estimated benefit payments for our U.S. andnon-U.S. defined benefit plans and our postretirement medical plan, as more fully described below and in Note |
Commitment Expiration by Period | Commitment Expiration By Period | |||||||||||||||||||||||||||||||||||||||
Beyond 5 | Beyond 5 | |||||||||||||||||||||||||||||||||||||||
Within 1 Year | 1-3 Years | 3-5 Years | Years | Total | Within 1 Year | 1-3 Years | 3-5 Years | Years | Total | |||||||||||||||||||||||||||||||
(Amounts in millions) | (Amounts in millions) | |||||||||||||||||||||||||||||||||||||||
Letters of credit | $ | 332.8 | $ | 118.3 | $ | 27.4 | $ | 2.3 | $ | 480.8 | $ | 339.8 | $ | 140.4 | $ | 39.1 | $ | 6.0 | $ | 525.3 | ||||||||||||||||||||
Surety bonds | 29.6 | 0.3 | 1.0 | — | 30.9 | 27.7 | 7.0 | 1.0 | — | 35.7 | ||||||||||||||||||||||||||||||
Total | $ | 362.4 | $ | 118.6 | $ | 28.4 | $ | 2.3 | $ | 511.7 | $ | 367.5 | $ | 147.4 | $ | 40.1 | $ | 6.0 | $ | 561.0 | ||||||||||||||||||||
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50
U.S. Plan | Non-U.S. Plans | U.S. Plan | Non-U.S. Plans | |||||||||||||||||||||||||||||
Asset category | 2007 | 2006 | 2007 | 2006 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||
Equity securities | 65 | % | 65 | % | 50 | % | 50 | % | 66 | % | 65 | % | 47 | % | 50 | % | ||||||||||||||||
Fixed income | 25 | % | 25 | % | 47 | % | 38 | % | 30 | % | 25 | % | 51 | % | 47 | % | ||||||||||||||||
Other | 10 | % | 10 | % | 3 | % | 12 | % | 4 | % | 10 | % | 2 | % | 3 | % |
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51
U.S. Plan | Non-U.S. Plans | U.S. Plan | Non-U.S. Plans | |||||||||||||
Weighted average assumptions used to determine benefit obligations: | ||||||||||||||||
Weighted average assumptions used to determine Benefit Obligations: | ||||||||||||||||
Discount rate | 6.25 | % | 5.61 | % | 6.75 | % | 5.47 | % | ||||||||
Rate of increase in compensation levels | 4.50 | 3.32 | 4.80 | 3.07 | ||||||||||||
Weighted average assumptions used to determine net cost: | ||||||||||||||||
Weighted average assumptions used to determine 2008 net pension expense: | ||||||||||||||||
Long-term rate of return on assets | 7.75 | % | 5.91 | % | 8.00 | % | 4.35 | % | ||||||||
Discount rate | 5.75 | 4.78 | 6.25 | 5.61 | ||||||||||||
Rate of increase in compensation levels | 4.50 | 3.23 | 4.50 | 3.32 |
0.5% | 0.5% | |||||||
Increase | Decrease | |||||||
(Amounts in millions) | ||||||||
U.S. defined benefit pension plan: | ||||||||
Effect on pension expense | $ | (1.0 | ) | $ | 0.9 | |||
Effect on Projected Benefit Obligation | (11.5 | ) | 12.0 | |||||
Non-U.S. defined benefit pension plans: | ||||||||
Effect on pension expense | (1.1 | ) | 1.3 | |||||
Effect on Projected Benefit Obligation | (19.2 | ) | 21.7 | |||||
U.S. Postretirement medical plans: | ||||||||
Effect on postretirement medical expense | (0.3 | ) | (0.3 | ) | ||||
Effect on Projected Benefit Obligation | (1.9 | ) | 1.9 |
0.5% | 0.5% | |||||||
Increase | Decrease | |||||||
(Amounts in millions) | ||||||||
U.S. defined benefit pension plan: | ||||||||
Effect on net pension expense | $ | (0.9 | ) | $ | 0.9 | |||
Effect on Benefit Obligation | (11.1 | ) | 11.5 | |||||
Non-U.S. defined benefit pension plans: | ||||||||
Effect on net pension expense | (0.8 | ) | 1.4 | |||||
Effect on Benefit Obligation | (12.9 | ) | 14.5 | |||||
U.S. Postretirement medical plans: | ||||||||
Effect on postretirement medical expense | 0.1 | (0.2 | ) | |||||
Effect on Benefit Obligation | (1.3 | ) | 1.3 |
49
0.5% | 0.5% | |||||||
Increase | Decrease | |||||||
(Amounts in millions) | ||||||||
U.S. defined benefit pension plan: | ||||||||
Effect on pension expense | $ | (1.1 | ) | $ | 1.1 | |||
Effect on Projected Benefit Obligation | N/A | N/A | ||||||
Non-U.S. defined benefit pension plans: | ||||||||
Effect on pension expense | (0.6 | ) | 0.6 | |||||
Effect on Projected Benefit Obligation | N/A | N/A | ||||||
U.S. Postretirement medical plans: | ||||||||
Effect on postretirement medical expense | N/A | N/A | ||||||
Effect on Projected Benefit Obligation | N/A | N/A |
0.5% | 0.5% | |||||||
Increase | Decrease | |||||||
(Amounts in millions) | ||||||||
U.S. defined benefit pension plan: | ||||||||
Effect on net pension expense | $ | (1.3 | ) | $ | 1.3 | |||
Effect on Benefit Obligation | N/A | N/A | ||||||
Non-U.S. defined benefit pension plans: | ||||||||
Effect on net pension expense | (1.1 | ) | 1.1 | |||||
Effect on Benefit Obligation | N/A | N/A | ||||||
U.S. Postretirement medical plans: | ||||||||
Effect on postretirement medical expense | N/A | N/A | ||||||
Effect on Benefit Obligation | N/A | N/A |
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50
53
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54
• | Discount rates are estimated using high quality debt securities based on corporate or government bond yields with a duration matching the expected benefit payments. For the U.S. and the United Kingdom, the discount rates are obtained from an analysis of publicly-traded investment-grade corporate bonds to establish a weighted average discount rate for each plan. For plans in the EURO zone we use the most applicable IBOXX Euro corporate AA bond indices. For other countries or regions without a corporate AA bond market, government bond rates are used. Our discount rate assumptions are impacted by changes in general economic and market conditions that affect interest rates on long-term high-quality debt securities, as well as the duration of our plans’ liabilities. |
55
• | Health care cost trend rates are developed based upon historical retiree cost trend data, long-term health care outlook and industry benchmarks. | |
• | The inflation assumptions are based upon both our specific trends and nationally expected trends. | |
• | The expected rates of return on plan assets are derived from reviews of asset allocation strategies, expected long-term performance of asset classes, risks and other factors adjusted for our specific investment strategy. These rates are impacted by changes in general market conditions, but because they are long-term in nature, short-term market changes do not significantly impact the rates. Changes to our target asset allocation also impact these rates. | |
• | Retirement rates are based upon actual and projected plan experience. | |
• | Mortality rates are based on published actuarial tables relevant to the countries in which we have plans. | |
• | The expected rates of compensation increase reflect estimates of the change in future compensation levels due to general price levels, seniority, age and other factors. |
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54
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
5558
Impact on Net | ||||
Currency | Earnings | |||
Euro | $ | 12.2 | ||
Australian dollar | 1.4 | |||
Singapore dollar | 1.1 | |||
Canadian dollar | 1.1 | |||
Indian rupee | 1.1 | |||
Mexican peso | 0.9 | |||
British pound | 0.9 | |||
Chinese yuan renminbi | 0.6 | |||
Venezuelan bolivar | 0.5 | |||
Argentinean peso | 0.4 | |||
Brazilian real | 0.4 | |||
Saudi Arabian riyal | 0.3 | |||
Swiss franc | 0.3 | |||
South African rand | 0.2 | |||
Swedish krona | 0.2 | |||
Other | 0.6 | |||
Total | $ | 22.2 | ||
Other Comprehensive Income (Expense) | Other Comprehensive (Expense) Income | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in millions) | (Amounts in thousands) | |||||||||||||||||||||||
Reclassification to earnings for settlements during the year: | ||||||||||||||||||||||||
Forward contracts | $ | — | $ | 35 | $ | 125 | ||||||||||||||||||
Forward exchange contracts | $ | — | $ | — | $ | 35 | ||||||||||||||||||
Interest rate swap agreements | 1,553 | 529 | 1,284 | (2,863 | ) | 1,553 | 529 | |||||||||||||||||
Change in fair value: | ||||||||||||||||||||||||
Forward contracts | — | — | 28 | |||||||||||||||||||||
Forward exchange contracts | — | — | — | |||||||||||||||||||||
Interest rate swap agreements | (5,458 | ) | 133 | 1,547 | (1,243 | ) | (5,458 | ) | 133 | |||||||||||||||
Year ended December 31 | $ | (3,905 | ) | $ | 697 | $ | 2,984 | $ | (4,106 | ) | $ | (3,905 | ) | $ | 697 | |||||||||
5659
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
5760
December 31, | ||||||||
2007 | 2006 | |||||||
(Amounts in thousands, except per share data) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 370,575 | $ | 67,000 | ||||
Restricted cash | 2,663 | 3,457 | ||||||
Accounts receivable, net | 666,733 | 551,815 | ||||||
Inventories, net | 680,199 | 547,373 | ||||||
Deferred taxes | 105,221 | 95,027 | ||||||
Prepaid expenses and other | 71,380 | 38,209 | ||||||
Total current assets | 1,896,771 | 1,302,881 | ||||||
Property, plant and equipment, net | 488,892 | 442,892 | ||||||
Goodwill | 853,265 | 851,123 | ||||||
Deferred taxes | 13,816 | 25,731 | ||||||
Other intangible assets, net | 134,734 | 143,358 | ||||||
Other assets, net | 132,943 | 103,250 | ||||||
Total assets | $ | 3,520,421 | $ | 2,869,235 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 513,169 | $ | 412,869 | ||||
Accrued liabilities | 723,026 | 458,230 | ||||||
Debt due within one year | 7,181 | 8,050 | ||||||
Deferred taxes | 6,804 | 4,887 | ||||||
Total current liabilities | 1,250,180 | 884,036 | ||||||
Long-term debt due after one year | 550,795 | 556,519 | ||||||
Retirement obligations and other liabilities | 426,469 | 408,094 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ equity: | ||||||||
Common shares, $1.25 par value | 73,394 | 73,289 | ||||||
Shares authorized — 120,000 | ||||||||
Shares issued — 58,715 and 58,631, respectively | ||||||||
Capital in excess of par value | 561,732 | 543,159 | ||||||
Retained earnings | 774,366 | 582,767 | ||||||
1,409,492 | 1,199,215 | |||||||
Treasury shares, at cost — 2,406 and 2,609 shares, respectively | (101,781 | ) | (95,262 | ) | ||||
Deferred compensation obligation | 6,650 | 6,973 | ||||||
Accumulated other comprehensive loss | (21,384 | ) | (90,340 | ) | ||||
Total shareholders’ equity | 1,292,977 | 1,020,586 | ||||||
Total liabilities and shareholders’ equity | $ | 3,520,421 | $ | 2,869,235 | ||||
58
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(Amounts in thousands, except per share data) | ||||||||||||
Sales | $ | 3,762,694 | $ | 3,061,063 | $ | 2,695,277 | ||||||
Cost of sales | (2,514,972 | ) | (2,053,761 | ) | (1,824,716 | ) | ||||||
Gross profit | 1,247,722 | 1,007,302 | 870,561 | |||||||||
Selling, general and administrative expense | (856,501 | ) | (782,503 | ) | (684,271 | ) | ||||||
Net earnings from affiliates | 18,695 | 14,820 | 12,533 | |||||||||
Operating income | 409,916 | 239,619 | 198,823 | |||||||||
Interest expense | (60,119 | ) | (65,688 | ) | (74,125 | ) | ||||||
Interest income | 4,324 | 7,607 | 3,399 | |||||||||
Loss on early extinguishment of debt | (429 | ) | (694 | ) | (27,744 | ) | ||||||
Other income (expense), net | 6,376 | 6,432 | (8,351 | ) | ||||||||
Earnings before income taxes | 360,068 | 187,276 | 92,002 | |||||||||
Provision for income taxes | (104,294 | ) | (73,238 | ) | (40,583 | ) | ||||||
Income from continuing operations | 255,774 | 114,038 | 51,419 | |||||||||
Discontinued operations, net of tax | — | — | (31,846 | ) | ||||||||
Gain (loss) from sale of discontinued operations, net of tax | — | 994 | (2,499 | ) | ||||||||
Net earnings | $ | 255,774 | $ | 115,032 | $ | 17,074 | ||||||
Net earnings per share: | ||||||||||||
Basic: | ||||||||||||
Continuing operations | $ | 4.53 | $ | 2.04 | $ | 0.93 | ||||||
Discontinued operations | — | 0.02 | (0.62 | ) | ||||||||
Net earnings | $ | 4.53 | $ | 2.06 | $ | 0.31 | ||||||
Diluted: | ||||||||||||
Continuing operations | $ | 4.46 | $ | 2.00 | $ | 0.91 | ||||||
Discontinued operations | — | 0.02 | (0.61 | ) | ||||||||
Net earnings | $ | 4.46 | $ | 2.02 | $ | 0.30 | ||||||
Cash dividends declared per share | $ | 0.60 | $ | — | $ | — |
59
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(Amounts in thousands) | ||||||||||||
Net earnings | $ | 255,774 | $ | 115,032 | $ | 17,074 | ||||||
Other comprehensive income (expense): | ||||||||||||
Foreign currency translation adjustments, net of tax | 48,678 | 38,920 | (34,846 | ) | ||||||||
Pension and other postretirement effects, net of tax | 24,183 | 23,886 | (31,881 | ) | ||||||||
Cash flow hedging activity, net of tax | (3,905 | ) | 697 | 2,984 | ||||||||
Other comprehensive income (expense) | 68,956 | 63,503 | (63,743 | ) | ||||||||
Comprehensive income (loss) | $ | 324,730 | $ | 178,535 | $ | (46,669 | ) | |||||
60
Year Ended December 31, | ||||||||||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||
COMMON STOCK | ||||||||||||||||||||||||
Beginning balance — January 1 | 58,631 | $ | 73,289 | 57,614 | $ | 72,018 | 57,614 | $ | 72,018 | |||||||||||||||
Stock issuance under stock option plans | 84 | 105 | 1,017 | 1,271 | — | — | ||||||||||||||||||
Ending balance — December 31 | 58,715 | $ | 73,394 | 58,631 | $ | 73,289 | 57,614 | $ | 72,018 | |||||||||||||||
CAPITAL IN EXCESS OF PAR VALUE | ||||||||||||||||||||||||
Beginning balance — January 1 | $ | 543,159 | $ | 477,201 | $ | 472,180 | ||||||||||||||||||
Stock activity under stock plans | (19,164 | ) | 13,023 | 7,299 | ||||||||||||||||||||
Restricted stock grants | — | — | (10,087 | ) | ||||||||||||||||||||
Adoption of SFAS No. 123(R) | — | 9,059 | — | |||||||||||||||||||||
Stock-based compensation | 25,306 | 25,089 | 7,691 | |||||||||||||||||||||
Tax benefit associated with stock-based compensation | 12,431 | 18,787 | 118 | |||||||||||||||||||||
Ending balance — December 31 | $ | 561,732 | $ | 543,159 | $ | 477,201 | ||||||||||||||||||
RETAINED EARNINGS | ||||||||||||||||||||||||
Beginning balance — January 1 | $ | 582,767 | $ | 467,735 | $ | 450,661 | ||||||||||||||||||
Adoption of FIN No. 48 | (29,819 | ) | — | $ | — | |||||||||||||||||||
Net earnings | 255,774 | 115,032 | 17,074 | |||||||||||||||||||||
Cash dividends declared | (34,356 | ) | — | — | ||||||||||||||||||||
Ending balance — December 31 | $ | 774,366 | $ | 582,767 | $ | 467,735 | ||||||||||||||||||
TREASURY STOCK | ||||||||||||||||||||||||
Beginning balance — January 1 | (2,609 | ) | $ | (95,262 | ) | (1,640 | ) | $ | (37,547 | ) | (2,146 | ) | $ | (48,171 | ) | |||||||||
Repurchases of common shares | (707 | ) | (39,550 | ) | (1,300 | ) | (68,412 | ) | — | — | ||||||||||||||
Adoption of SFAS No. 123(R) | — | — | (583 | ) | (9,059 | ) | — | — | ||||||||||||||||
Stock activity under stock plans | 910 | 33,031 | 914 | 19,756 | 506 | 10,624 | ||||||||||||||||||
Ending balance — December 31 | (2,406 | ) | $ | (101,781 | ) | (2,609 | ) | $ | (95,262 | ) | (1,640 | ) | $ | (37,547 | ) | |||||||||
DEFERRED COMPENSATION OBLIGATION | ||||||||||||||||||||||||
Beginning balance — January 1 | $ | 6,973 | $ | 4,656 | $ | 6,784 | ||||||||||||||||||
Increases to obligation for new deferrals | 416 | 2,350 | 723 | |||||||||||||||||||||
Compensation obligations satisfied | (739 | ) | (33 | ) | (2,851 | ) | ||||||||||||||||||
Ending balance — December 31 | $ | 6,650 | $ | 6,973 | $ | 4,656 | ||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ||||||||||||||||||||||||
Beginning balance — January 1 | $ | (90,340 | ) | $ | (130,657 | ) | $ | (66,914 | ) | |||||||||||||||
Foreign currency translation adjustments, net of tax | 48,678 | 38,920 | (34,846 | ) | ||||||||||||||||||||
Pension and other postretirement effects, net of tax | 24,183 | 23,886 | (31,881 | ) | ||||||||||||||||||||
Adoption of SFAS No. 158, net of tax | — | (23,186 | ) | — | ||||||||||||||||||||
Cash flow hedging activity, net of tax | (3,905 | ) | 697 | 2,984 | ||||||||||||||||||||
Ending balance — December 31 | $ | (21,384 | ) | $ | (90,340 | ) | $ | (130,657 | ) | |||||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
Beginning balance — January 1 | 56,022 | $ | 1,020,586 | 55,974 | $ | 853,406 | 55,468 | $ | 886,558 | |||||||||||||||
Net changes in shareholders’ equity | 287 | 272,391 | 48 | 167,180 | 506 | (33,152 | ) | |||||||||||||||||
Ending balance — December 31 | 56,309 | $ | 1,292,977 | 56,022 | $ | 1,020,586 | 55,974 | $ | 853,406 | |||||||||||||||
December 31, | ||||||||
2008 | 2007 | |||||||
(Amounts in thousands, except per share data) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 471,792 | $ | 370,575 | ||||
Restricted cash | 264 | 2,663 | ||||||
Accounts receivable, net | 808,522 | 666,733 | ||||||
Inventories, net | 834,612 | 680,199 | ||||||
Deferred taxes | 126,890 | 105,221 | ||||||
Prepaid expenses and other | 90,345 | 71,380 | ||||||
Total current assets | 2,332,425 | 1,896,771 | ||||||
Property, plant and equipment, net | 547,235 | 488,892 | ||||||
Goodwill | 828,395 | 853,265 | ||||||
Deferred taxes | 32,561 | 13,816 | ||||||
Other intangible assets, net | 121,919 | 134,734 | ||||||
Other assets, net | 161,159 | 132,943 | ||||||
Total assets | $ | 4,023,694 | $ | 3,520,421 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 598,498 | $ | 513,169 | ||||
Accrued liabilities | 967,099 | 723,026 | ||||||
Debt due within one year | 27,731 | 7,181 | ||||||
Deferred taxes | 14,668 | 6,804 | ||||||
Total current liabilities | 1,607,996 | 1,250,180 | ||||||
Long-term debt due after one year | 545,617 | 550,795 | ||||||
Retirement obligations and other liabilities | 502,314 | 426,469 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ equity: | ||||||||
Common shares, $1.25 par value | 73,477 | 73,394 | ||||||
Shares authorized — 120,000 Shares issued — 58,781 and 58,715, respectively | ||||||||
Capital in excess of par value | 586,371 | 561,732 | ||||||
Retained earnings | 1,159,634 | 774,366 | ||||||
1,819,482 | 1,409,492 | |||||||
Treasury shares, at cost — 3,566 and 2,406 shares, respectively | (248,073 | ) | (101,781 | ) | ||||
Deferred compensation obligation | 7,678 | 6,650 | ||||||
Accumulated other comprehensive loss | (211,320 | ) | (21,384 | ) | ||||
Total shareholders’ equity | 1,367,767 | 1,292,977 | ||||||
Total liabilities and shareholders’ equity | $ | 4,023,694 | $ | 3,520,421 | ||||
61
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(Amounts in thousands) | ||||||||||||
Cash flows — Operating activities: | ||||||||||||
Net earnings | $ | 255,774 | $ | 115,032 | $ | 17,074 | ||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||
Depreciation | 67,836 | 60,498 | 59,845 | |||||||||
Amortization of intangible and other assets | 9,875 | 10,498 | 10,043 | |||||||||
Amortization of deferred loan costs | 1,752 | 1,718 | 3,594 | |||||||||
Write-off of unamortized deferred loan costs and discount | 429 | 694 | 11,307 | |||||||||
Loss on early extinguishment of debt | — | — | 16,437 | |||||||||
Net (gain) loss on the disposition of assets | (7,613 | ) | 1,444 | 2,039 | ||||||||
Excess tax benefits from stock-based payment arrangements | (11,936 | ) | (17,406 | ) | — | |||||||
(Gain) loss on sale of discontinued operations | — | (1,656 | ) | 3,814 | ||||||||
Impairment of assets | — | — | 30,067 | |||||||||
Stock-based compensation | 25,345 | 25,089 | 13,796 | |||||||||
Net earnings from affiliates, net of dividends received | (10,616 | ) | (6,663 | ) | (7,779 | ) | ||||||
Change in assets and liabilities, net of acquisitions: | ||||||||||||
Accounts receivable, net | (82,372 | ) | (40,826 | ) | (37,192 | ) | ||||||
Inventories, net | (101,783 | ) | (98,364 | ) | (20,603 | ) | ||||||
Prepaid expenses and other | (26,568 | ) | (6,548 | ) | 3,648 | |||||||
Other assets, net | (9,790 | ) | (8,905 | ) | 3,798 | |||||||
Accounts payable | 75,200 | 58,736 | 28,831 | |||||||||
Accrued liabilities and income taxes payable | 230,559 | 76,690 | 47,644 | |||||||||
Retirement obligations and other liabilities | 18,956 | (11,365 | ) | (31,353 | ) | |||||||
Net deferred taxes | (17,683 | ) | 4,520 | (27,565 | ) | |||||||
Net cash flows provided by operating activities | 417,365 | 163,186 | 127,445 | |||||||||
Cash flows — Investing activities: | ||||||||||||
Capital expenditures | (88,975 | ) | (73,528 | ) | (49,271 | ) | ||||||
Proceeds from sale of discontinued operations | — | 3,656 | 13,590 | |||||||||
Proceeds from disposal of assets | 13,404 | — | — | |||||||||
Payments for acquisitions, net of cash acquired | (2,312 | ) | (7,978 | ) | — | |||||||
Change in restricted cash | 794 | 171 | (3,628 | ) | ||||||||
Net cash flows used by investing activities | (77,089 | ) | (77,679 | ) | (39,309 | ) | ||||||
Cash flows — Financing activities: | ||||||||||||
Proceeds from issuance of long-term debt | — | — | 600,000 | |||||||||
Excess tax benefits from stock-based payment arrangements | 11,936 | 17,406 | — | |||||||||
Payments on long-term debt | (2,841 | ) | (105,281 | ) | (21,500 | ) | ||||||
Payment of deferred loan costs | (1,399 | ) | — | (9,322 | ) | |||||||
Repurchase of Term Loans Senior and Subordinated Notes (includes premiums paid of $16.5 million) | — | — | (607,043 | ) | ||||||||
Net payments under other financing arrangements | (3,751 | ) | (3,412 | ) | (16,519 | ) | ||||||
Repurchase of common shares | (44,798 | ) | (63,165 | ) | — | |||||||
Payments of dividends | (25,681 | ) | — | — | ||||||||
Proceeds from stock option activity | 16,693 | 39,915 | 1,111 | |||||||||
Net cash flows used by financing activities | (49,841 | ) | (114,537 | ) | (53,273 | ) | ||||||
Effect of exchange rate changes on cash | 13,140 | 3,166 | (5,758 | ) | ||||||||
Net change in cash and cash equivalents | 303,575 | (25,864 | ) | 29,105 | ||||||||
Cash and cash equivalents at beginning of year | 67,000 | 92,864 | 63,759 | |||||||||
Cash and cash equivalents at end of year | $ | 370,575 | $ | 67,000 | $ | 92,864 | ||||||
Income taxes paid (net of refunds) | $ | 64,663 | $ | 65,825 | $ | 40,698 | ||||||
Interest paid | $ | 59,550 | $ | 63,866 | $ | 72,987 | ||||||
Non-cash financing of fixed assets | $ | — | $ | 8,041 | $ | — |
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(Amounts in thousands, except per share data) | ||||||||||||
Sales | $ | 4,473,473 | $ | 3,762,694 | $ | 3,061,063 | ||||||
Cost of sales | (2,893,161 | ) | (2,514,972 | ) | (2,053,761 | ) | ||||||
Gross profit | 1,580,312 | 1,247,722 | 1,007,302 | |||||||||
Selling, general and administrative expense | (984,403 | ) | (856,501 | ) | (782,503 | ) | ||||||
Net earnings from affiliates | 16,963 | 18,695 | 14,820 | |||||||||
Operating income | 612,872 | 409,916 | 239,619 | |||||||||
Interest expense | (51,293 | ) | (60,119 | ) | (65,688 | ) | ||||||
Interest income | 8,392 | 4,324 | 7,607 | |||||||||
Other income, net | 20,163 | 5,947 | 5,738 | |||||||||
Earnings before income taxes | 590,134 | 360,068 | 187,276 | |||||||||
Provision for income taxes | (147,721 | ) | (104,294 | ) | (73,238 | ) | ||||||
Income from continuing operations | 442,413 | 255,774 | 114,038 | |||||||||
Gain from sale of discontinued operations, net of tax | — | — | 994 | |||||||||
Net earnings | $ | 442,413 | $ | 255,774 | $ | 115,032 | ||||||
Net earnings per share: | ||||||||||||
Basic: | ||||||||||||
Continuing operations | $ | 7.82 | $ | 4.53 | $ | 2.04 | ||||||
Discontinued operations | — | — | 0.02 | |||||||||
Net earnings | $ | 7.82 | $ | 4.53 | $ | 2.06 | ||||||
Diluted: | ||||||||||||
Continuing operations | $ | 7.74 | $ | 4.46 | $ | 2.00 | ||||||
Discontinued operations | — | — | 0.02 | |||||||||
Net earnings | $ | 7.74 | $ | 4.46 | $ | 2.02 | ||||||
Cash dividends declared per share | $ | 1.00 | $ | 0.60 | $ | — |
62
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(Amounts in thousands) | ||||||||||||
Net earnings | $ | 442,413 | $ | 255,774 | $ | 115,032 | ||||||
Other comprehensive (expense) income: | ||||||||||||
Foreign currency translation adjustments, net of tax | (125,853 | ) | 48,678 | 38,920 | ||||||||
Pension and other postretirement effects, net of tax | (59,977 | ) | 24,183 | 23,886 | ||||||||
Cash flow hedging activity, net of tax | (4,106 | ) | (3,905 | ) | 697 | |||||||
Other comprehensive (expense) income | (189,936 | ) | 68,956 | 63,503 | ||||||||
Comprehensive income | $ | 252,477 | $ | 324,730 | $ | 178,535 | ||||||
63
Capital | Accumulated | |||||||||||||||||||||||||||||||||||
in Excess | Deferred | Other | Total | |||||||||||||||||||||||||||||||||
Common Stock | of Par | Retained | Treasury Stock | Compensation | Comprehensive | Shareholders’ | ||||||||||||||||||||||||||||||
Shares | Amount | Value | Earnings | Shares | Amount | Obligation | Loss | Equity | ||||||||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||||||||||||
Balance — January 1, 2006 | 57,614 | $ | 72,018 | $ | 477,201 | $ | 467,735 | (1,640 | ) | $ | (37,547 | ) | $ | 4,656 | $ | (130,657 | ) | $ | 853,406 | |||||||||||||||||
Stock activity under stock plans | 1,017 | 1,271 | 13,023 | — | 914 | 19,756 | — | — | 34,050 | |||||||||||||||||||||||||||
Adoption of SFAS No. 123R | — | — | 9,059 | — | (583 | ) | (9,059 | ) | — | — | — | |||||||||||||||||||||||||
Stock-based compensation | — | — | 25,089 | — | — | — | — | — | 25,089 | |||||||||||||||||||||||||||
Tax benefit associated with stock-based compensation | — | — | 18,787 | — | — | — | — | — | 18,787 | |||||||||||||||||||||||||||
Net earnings | — | — | — | 115,032 | — | — | — | — | 115,032 | |||||||||||||||||||||||||||
Repurchase of common shares | — | — | — | — | (1,300 | ) | (68,412 | ) | — | — | (68,412 | ) | ||||||||||||||||||||||||
Increases to obligation for new deferrals | — | — | — | — | — | — | 2,350 | — | 2,350 | |||||||||||||||||||||||||||
Compensation obligations satisfied | — | — | — | — | — | — | (33 | ) | — | (33 | ) | |||||||||||||||||||||||||
Foreign currency translation adjustments, net of tax | — | — | — | — | — | — | — | 38,920 | 38,920 | |||||||||||||||||||||||||||
Pension and other postretirement effects, net of tax | — | — | — | — | — | — | — | 23,886 | 23,886 | |||||||||||||||||||||||||||
Adoption of SFAS No. 158, net of tax | — | — | — | — | — | — | — | (23,186 | ) | (23,186 | ) | |||||||||||||||||||||||||
Cash flow hedging activity, net of tax | — | — | — | — | — | — | — | 697 | 697 | |||||||||||||||||||||||||||
Balance — December 31, 2006 | 58,631 | $ | 73,289 | $ | 543,159 | $ | 582,767 | (2,609 | ) | $ | (95,262 | ) | $ | 6,973 | $ | (90,340 | ) | $ | 1,020,586 | |||||||||||||||||
Stock activity under stock plans | 84 | 105 | (19,164 | ) | — | 910 | 33,031 | — | — | 13,972 | ||||||||||||||||||||||||||
Stock-based compensation | — | — | 25,306 | 40 | — | — | — | — | 25,346 | |||||||||||||||||||||||||||
Tax benefit associated with stock-based compensation | — | — | 12,431 | — | — | — | — | — | 12,431 | |||||||||||||||||||||||||||
Adoption of FIN No. 48 | — | — | — | (29,819 | ) | — | — | — | — | (29,819 | ) | |||||||||||||||||||||||||
Net earnings | — | — | — | 255,774 | — | — | — | — | 255,774 | |||||||||||||||||||||||||||
Cash dividends declared | — | — | — | (34,396 | ) | — | — | — | — | (34,396 | ) | |||||||||||||||||||||||||
Repurchase of common shares | — | — | — | — | (707 | ) | (39,550 | ) | — | — | (39,550 | ) | ||||||||||||||||||||||||
Increases to obligation for new deferrals | — | — | — | — | — | — | 416 | — | 416 | |||||||||||||||||||||||||||
Compensation obligations satisfied | — | — | — | — | — | — | (739 | ) | — | (739 | ) | |||||||||||||||||||||||||
Foreign currency translation adjustments, net of tax | — | — | — | — | — | — | — | 48,678 | 48,678 | |||||||||||||||||||||||||||
Pension and other postretirement effects, net of tax | — | — | — | — | — | — | — | 24,183 | 24,183 | |||||||||||||||||||||||||||
Cash flow hedging activity, net of tax | — | — | — | — | — | — | — | (3,905 | ) | (3,905 | ) | |||||||||||||||||||||||||
Balance — December 31, 2007 | 58,715 | $ | 73,394 | $ | 561,732 | $ | 774,366 | (2,406 | ) | $ | (101,781 | ) | $ | 6,650 | $ | (21,384 | ) | $ | 1,292,977 | |||||||||||||||||
Stock activity under stock plans | 66 | 83 | (20,200 | ) | — | 581 | 18,658 | — | — | (1,459 | ) | |||||||||||||||||||||||||
Stock-based compensation | — | — | 32,642 | 61 | — | — | — | — | 32,703 | |||||||||||||||||||||||||||
Tax benefit associated with stock-based compensation | — | — | 12,197 | — | — | — | — | — | 12,197 | |||||||||||||||||||||||||||
Net earnings | — | — | — | 442,413 | — | — | — | — | 442,413 | |||||||||||||||||||||||||||
Cash dividends declared | — | — | — | (57,206 | ) | — | — | — | — | (57,206 | ) | |||||||||||||||||||||||||
Repurchase of common shares | — | — | — | — | (1,741 | ) | (164,950 | ) | — | — | (164,950 | ) | ||||||||||||||||||||||||
Increases to obligation for new deferrals | — | — | — | — | — | — | 1,544 | — | 1,544 | |||||||||||||||||||||||||||
Compensation obligations satisfied | — | — | — | — | — | — | (516 | ) | — | (516 | ) | |||||||||||||||||||||||||
Foreign currency translation adjustments, net of tax | — | — | — | — | — | — | — | (125,853 | ) | (125,853 | ) | |||||||||||||||||||||||||
Pension and other postretirement effects, net of tax | — | — | — | — | — | — | — | (59,977 | ) | (59,977 | ) | |||||||||||||||||||||||||
Cash flow hedging activity, net of tax | — | — | — | — | — | — | — | (4,106 | ) | (4,106 | ) | |||||||||||||||||||||||||
Balance — December 31, 2008 | 58,781 | $ | 73,477 | $ | 586,371 | $ | 1,159,634 | (3,566 | ) | $ | (248,073 | ) | $ | 7,678 | $ | (211,320 | ) | $ | 1,367,767 | |||||||||||||||||
64
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(Amounts in thousands) | ||||||||||||
Cash flows — Operating activities: | ||||||||||||
Net earnings | $ | 442,413 | $ | 255,774 | $ | 115,032 | ||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||
Depreciation | 71,584 | 67,836 | 60,498 | |||||||||
Amortization of intangible and other assets | 9,858 | 9,875 | 10,498 | |||||||||
Amortization of deferred loan costs | 1,822 | 1,752 | 1,718 | |||||||||
Write-off of unamortized deferred loan costs and discount | — | 429 | 694 | |||||||||
Net (gain) loss on the disposition of assets | (5,688 | ) | (7,613 | ) | 1,444 | |||||||
Gain on bargain purchase | (2,809 | ) | — | — | ||||||||
Excess tax benefits from stock-based payment arrangements | (12,531 | ) | (11,936 | ) | (17,406 | ) | ||||||
Loss on sale of discontinued operations | — | (1,656 | ) | |||||||||
Stock-based compensation | 32,703 | 25,345 | 25,089 | |||||||||
Net earnings from affiliates, net of dividends received | (8,519 | ) | (10,616 | ) | (6,663 | ) | ||||||
Change in assets and liabilities, net of acquisitions: | ||||||||||||
Accounts receivable, net | (195,097 | ) | (82,372 | ) | (40,826 | ) | ||||||
Inventories, net | (195,529 | ) | (101,783 | ) | (98,364 | ) | ||||||
Prepaid expenses and other | (21,664 | ) | (26,568 | ) | (6,548 | ) | ||||||
Other assets, net | (18,179 | ) | (9,790 | ) | (8,905 | ) | ||||||
Accounts payable | 99,768 | 75,200 | 58,736 | |||||||||
Accrued liabilities and income taxes payable | 228,944 | 230,559 | 76,690 | |||||||||
Retirement obligations and other liabilities | 31,542 | 18,956 | (11,365 | ) | ||||||||
Net deferred taxes | (52,593 | ) | (17,683 | ) | 4,520 | |||||||
Net cash flows provided by operating activities | 406,025 | 417,365 | 163,186 | |||||||||
Cash flows — Investing activities: | ||||||||||||
Capital expenditures | (126,932 | ) | (88,975 | ) | (73,528 | ) | ||||||
Proceeds from sale of discontinued operations | — | — | 3,656 | |||||||||
Proceeds from disposal of assets | 7,311 | 13,404 | — | |||||||||
Payments for acquisitions, net of cash acquired | — | (2,312 | ) | (7,978 | ) | |||||||
Change in restricted cash | 2,399 | 794 | 171 | |||||||||
Net cash flows used by investing activities | (117,222 | ) | (77,089 | ) | (77,679 | ) | ||||||
Cash flows — Financing activities: | ||||||||||||
Excess tax benefits from stock-based payment arrangements | 12,531 | 11,936 | 17,406 | |||||||||
Payments on long-term debt | (5,682 | ) | (2,841 | ) | (105,281 | ) | ||||||
Payment of deferred loan costs | — | (1,399 | ) | — | ||||||||
Net borrowings (payments) under other financing arrangements | 14,938 | (3,751 | ) | (3,412 | ) | |||||||
Repurchase of common shares | (164,950 | ) | (44,798 | ) | (63,165 | ) | ||||||
Payments of dividends | (51,481 | ) | (25,681 | ) | — | |||||||
Proceeds from stock option activity | 11,940 | 16,693 | 39,915 | |||||||||
Net cash flows used by financing activities | (182,704 | ) | (49,841 | ) | (114,537 | ) | ||||||
Effect of exchange rate changes on cash | (4,882 | ) | 13,140 | 3,166 | ||||||||
Net change in cash and cash equivalents | 101,217 | 303,575 | (25,864 | ) | ||||||||
Cash and cash equivalents at beginning of year | 370,575 | 67,000 | 92,864 | |||||||||
Cash and cash equivalents at end of year | $ | 471,792 | $ | 370,575 | $ | 67,000 | ||||||
Income taxes paid (net of refunds) | $ | 112,545 | $ | 64,663 | $ | 65,825 | ||||||
Interest paid | 49,634 | 59,550 | 63,866 | |||||||||
Non-cash financing of fixed assets | — | — | 8,041 |
65
1. | SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING DEVELOPMENTS |
• | Revenue recognition, net of liquidated damages and other delivery penalties; | |
• | Income taxes, deferred taxes, tax valuation allowances and tax reserves; | |
• | Reserves for | |
• | Retirement and postretirement benefits; and | |
• | Valuation of goodwill, indefinite-lived intangible assets and other long-lived assets. |
6366
67
64
68
65
69
Buildings and improvements | 10 to 40 years | |||
Furniture and fixtures | 3 to 7 years | |||
Machinery and equipment | 3 to 12 years | |||
Capital leases (based on lease term) | 3 to 25 years |
66
70
• | we deem the hedge to be ineffective and determine that the designation of the derivative as a hedging instrument is no longer appropriate; | |
• | the derivative no longer effectively offsets changes in the cash flows of a hedged item (such as firm commitments or contracts); | |
• | the derivative expires, terminates or is sold; or | |
• | occurrence of the contracted or committed transaction is no longer probable, or will not occur in the originally expected period. |
67
71
68
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in thousands, except per share amounts) | (Amounts in thousands, except per share amounts) | |||||||||||||||||||||||
Income from continuing operations | $ | 255,774 | $ | 114,038 | $ | 51,419 | $ | 442,413 | $ | 255,774 | $ | 114,038 | ||||||||||||
Net earnings | $ | 255,774 | $ | 115,032 | $ | 17,074 | $ | 442,413 | $ | 255,774 | $ | 115,032 | ||||||||||||
Denominator for basic earnings per share — weighted average shares | 56,449 | 55,963 | 55,473 | 56,601 | 56,449 | 55,963 | ||||||||||||||||||
Effect of potentially dilutive securities | 840 | 942 | 1,217 | 579 | 840 | 942 | ||||||||||||||||||
Denominator for diluted earnings per share — weighted average shares | 57,289 | 56,905 | 56,690 | 57,180 | 57,289 | 56,905 | ||||||||||||||||||
Net earnings per share: | ||||||||||||||||||||||||
Basic: | ||||||||||||||||||||||||
Continuing operations | $ | 4.53 | $ | 2.04 | $ | 0.93 | $ | 7.82 | $ | 4.53 | $ | 2.04 | ||||||||||||
Net earnings | 4.53 | 2.06 | 0.31 | 7.82 | 4.53 | 2.06 | ||||||||||||||||||
Diluted: | ||||||||||||||||||||||||
Continuing operations | $ | 4.46 | $ | 2.00 | $ | 0.91 | $ | 7.74 | $ | 4.46 | $ | 2.00 | ||||||||||||
Net earnings | 4.46 | 2.02 | 0.30 | 7.74 | 4.46 | 2.02 |
72
69
70
73
• | ||
• | ||
• | ||
• | ||
• |
74
71
2. | DISPOSITIONS |
75
2005 | ||||
(Amounts in millions) | ||||
Sales | $ | 103.1 | ||
Cost of sales | 87.5 | |||
Selling, general and administrative expense | 57.5 | |||
Interest expense | 0.7 | |||
Other income (expense), net | 0.3 | |||
Loss before income taxes | (42.9 | ) | ||
Income tax benefit | 11.1 | |||
Results for discontinued operations, net of tax | $ | (31.8 | ) | |
72
3. | ACQUISITIONS |
4. | GOODWILL AND OTHER INTANGIBLE ASSETS |
December 31, 2007 | December 31, 2008 | |||||||||||||||||||||||||||||||||||||||||||||||
Useful Life | Beginning | Change Due | Ending Gross | Accumulated | Useful Life | Beginning | Change Due | Ending Gross | Accumulated | |||||||||||||||||||||||||||||||||||||||
(Years) | Gross Amount | to Currency | Other(3) | Amount | Amortization | (Years) | Gross Amount | to Currency | Other | Amount | Amortization | |||||||||||||||||||||||||||||||||||||
(Amounts in thousands, except years) | (Amounts in thousands, except years) | |||||||||||||||||||||||||||||||||||||||||||||||
Finite-lived intangible assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Engineering drawings(1) | 10-20 | $ | 81,443 | $ | 789 | $ | — | $ | 82,232 | $ | (33,706 | ) | 10-20 | $ | 82,232 | $ | (864 | ) | $ | — | $ | 81,368 | $ | (37,846 | ) | |||||||||||||||||||||||
Distribution networks | 5-15 | 13,868 | — | — | 13,868 | (6,866 | ) | 5-15 | 13,868 | — | — | 13,868 | (7,813 | ) | ||||||||||||||||||||||||||||||||||
Software | 10 | 5,900 | — | — | 5,900 | (4,356 | ) | 10 | 5,900 | — | — | 5,900 | (4,946 | ) | ||||||||||||||||||||||||||||||||||
Patents | 10 | 29,268 | 776 | — | 30,044 | (15,766 | ) | 10 | 30,044 | (1,462 | ) | — | 28,582 | (17,512 | ) | |||||||||||||||||||||||||||||||||
Other | 3-40 | 15,686 | 695 | (3,800 | ) | 12,581 | (11,401 | ) | 3-40 | 12,581 | (269 | ) | — | 12,312 | (12,098 | ) | ||||||||||||||||||||||||||||||||
$ | 146,165 | $ | 2,260 | $ | (3,800 | ) | $ | 144,625 | $ | (72,095 | ) | $ | 144,625 | $ | (2,595 | ) | $ | — | $ | 142,030 | $ | (80,215 | ) | |||||||||||||||||||||||||
Indefinite-lived intangible assets(2) | $ | 62,768 | $ | 921 | $ | — | $ | 63,689 | $ | (1,485 | ) | $ | 63,689 | $ | (2,100 | ) | $ | — | $ | 61,589 | $ | (1,485 | ) | |||||||||||||||||||||||||
76
December 31, 2006 | December 31, 2007 | |||||||||||||||||||||||||||||||||||||||||||||||
Useful Life | Beginning | Change Due | Ending Gross | Accumulated | Useful Life | Beginning | Change Due | Ending Gross | Accumulated | |||||||||||||||||||||||||||||||||||||||
(Years) | Gross Amount | to Currency | Acquisitions(4) | Amount | Amortization | (Years) | Gross Amount | to Currency | Other(3) | Amount | Amortization | |||||||||||||||||||||||||||||||||||||
(Amounts in thousands, except years) | (Amounts in thousands, except years) | |||||||||||||||||||||||||||||||||||||||||||||||
Finite-lived intangible assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Engineering drawings(1) | 10-22.5 | $ | 80,434 | $ | 1,009 | $ | — | $ | 81,443 | $ | (28,308 | ) | 10-20 | $ | 81,443 | $ | 789 | $ | — | $ | 82,232 | $ | (33,706 | ) | ||||||||||||||||||||||||
Distribution networks | 15 | 13,868 | — | — | 13,868 | (5,861 | ) | 5-15 | 13,868 | — | — | 13,868 | (6,866 | ) | ||||||||||||||||||||||||||||||||||
Software | 10 | 5,900 | — | — | 5,900 | (3,786 | ) | 10 | 5,900 | — | — | 5,900 | (4,356 | ) | ||||||||||||||||||||||||||||||||||
Patents | 9.5-15.5 | 28,032 | 1,236 | — | 29,268 | (12,898 | ) | 10 | 29,268 | 776 | — | 30,044 | (15,766 | ) | ||||||||||||||||||||||||||||||||||
Other | 3-40 | 14,287 | 683 | 716 | 15,686 | (13,237 | ) | 3-40 | 15,686 | 695 | (3,800 | ) | 12,581 | (11,401 | ) | |||||||||||||||||||||||||||||||||
$ | 142,521 | $ | 2,928 | $ | 716 | $ | 146,165 | $ | (64,090 | ) | $ | 146,165 | $ | 2,260 | $ | (3,800 | ) | $ | 144,625 | $ | (72,095 | ) | ||||||||||||||||||||||||||
Indefinite-lived intangible assets(2) | $ | 57,760 | $ | 1,608 | $ | 3,400 | $ | 62,768 | $ | (1,485 | ) | $ | 62,768 | $ | 921 | $ | — | $ | 63,689 | $ | (1,485 | ) | ||||||||||||||||||||||||||
(1) | Engineering drawings represent the estimated fair value associated with specific acquired product and component schematics. | |
(2) | Accumulated amortization for indefinite-lived intangible assets relates to amounts recorded prior to the implementation date of SFAS No. | |
(3) | During 2007, our Flow Control Division wrote-off an expired and fully amortized non-compete agreement. | |
Amortization | ||||
Expense | ||||
(Amounts in thousands) | ||||
Actual for year ending December 31, 2008 | $ | 8,120 | ||
Estimate for year ending December 31, 2009 | 9,943 | |||
Estimate for year ending December 31, 2010 | 9,692 | |||
Estimate for year ending December 31, 2011 | 9,139 | |||
Estimate for year ending December 31, 2012 | 5,730 | |||
Estimate for the year ending December 31, 2013 | 4,027 | |||
Thereafter | 23,284 |
7377
Amortization | ||||
Expense | ||||
(Amounts in thousands) | ||||
Actual for year ending December 31, 2007 | $ | 11,804 | ||
Estimate for year ending December 31, 2008 | 11,363 | |||
Estimate for year ending December 31, 2009 | 11,363 | |||
Estimate for year ending December 31, 2010 | 11,111 | |||
Estimate for year ending December 31, 2011 | 9,139 | |||
Estimate for year ending December 31, 2012 | 5,730 | |||
Thereafter | 27,224 |
Flowserve | Flow | Flow | Flowserve | Flow | Flow | |||||||||||||||||||||||||||
Pump | Control | Solutions | Total | Pump | Control | Solutions | Total | |||||||||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||||||||||
Balance — January 1, 2006 | $ | 456,762 | $ | 346,795 | $ | 31,306 | $ | 834,863 | ||||||||||||||||||||||||
Acquisitions | 1,203 | — | 1,060 | 2,263 | ||||||||||||||||||||||||||||
Currency translation | 2,708 | 9,490 | 1,799 | 13,997 | ||||||||||||||||||||||||||||
Balance — December 31, 2006 | $ | 460,673 | $ | 356,285 | $ | 34,165 | $ | 851,123 | ||||||||||||||||||||||||
Balance — January 1, 2007 | $ | 460,673 | $ | 356,285 | $ | 34,165 | $ | 851,123 | ||||||||||||||||||||||||
Acquisitions and purchase adjustments | 2,774 | — | — | 2,774 | 2,774 | — | — | 2,774 | ||||||||||||||||||||||||
Resolution of tax contingencies | — | (5,207 | ) | — | (5,207 | ) | — | (5,207 | ) | — | (5,207 | ) | ||||||||||||||||||||
Dispositions | (2,059 | ) | (332 | ) | — | (2,391 | ) | (2,059 | ) | (332 | ) | — | (2,391 | ) | ||||||||||||||||||
Currency translation | 3,043 | 1,843 | 2,080 | 6,966 | 3,043 | 1,843 | 2,080 | 6,966 | ||||||||||||||||||||||||
Balance — December 31, 2007 | $ | 464,431 | $ | 352,589 | $ | 36,245 | $ | 853,265 | $ | 464,431 | $ | 352,589 | $ | 36,245 | $ | 853,265 | ||||||||||||||||
Acquisitions | — | — | 230 | 230 | ||||||||||||||||||||||||||||
Resolution of tax contingencies | (1,100 | ) | (1,100 | ) | ||||||||||||||||||||||||||||
Currency translation(1) | (2,256 | ) | (20,846 | ) | (898 | ) | (24,000 | ) | ||||||||||||||||||||||||
Balance — December 31, 2008 | $ | 462,175 | $ | 330,643 | $ | 35,577 | $ | 828,395 | ||||||||||||||||||||||||
(1) | The currency impact in Flow Control in 2008 is primarily related to goodwill recorded in the United Kingdom. |
5. | FACTORING OF ACCOUNTS RECEIVABLE |
6. | INVENTORIES |
December 31, | ||||||||
2008 | 2007 | |||||||
(Amounts in thousands) | ||||||||
Raw materials | $ | 241,953 | $ | 221,265 | ||||
Work in process | 635,490 | 499,656 | ||||||
Finished goods | 264,746 | 246,832 | ||||||
Less: Progress billings | (250,289 | ) | (223,980 | ) | ||||
Less: Excess and obsolete reserve | (57,288 | ) | (63,574 | ) | ||||
Inventories, net | $ | 834,612 | $ | 680,199 | ||||
7478
December 31, | ||||||||
2007 | 2006 | |||||||
(Amounts in thousands) | ||||||||
Raw materials | $ | 221,265 | $ | 167,224 | ||||
Work in process | 499,656 | 354,808 | ||||||
Finished goods | 246,832 | 225,157 | ||||||
Less: Progress billings | (223,980 | ) | (140,056 | ) | ||||
Less: Excess and obsolete reserve | (63,574 | ) | (59,760 | ) | ||||
Inventories, net | $ | 680,199 | $ | 547,373 | ||||
7. | STOCK-BASED COMPENSATION PLANS |
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||
Stock | Restricted | Stock | Restricted | Stock | Restricted | |||||||||||||||||||||||||||||||
Options | Shares | Total | Options | Shares | Total | Options(1) | Shares | Total | ||||||||||||||||||||||||||||
(Amounts in millions) | ||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | $ | 1.4 | $ | 31.3 | $ | 32.7 | $ | 3.5 | $ | 21.8 | $ | 25.3 | $ | 12.3 | $ | 12.8 | $ | 25.1 | ||||||||||||||||||
Related income tax benefit | (0.3 | ) | (9.6 | ) | (9.9 | ) | (1.0 | ) | (6.8 | ) | (7.8 | ) | (3.0 | ) | (3.9 | ) | (6.9 | ) | ||||||||||||||||||
Net stock-based compensation expense | $ | 1.1 | $ | 21.7 | $ | 22.8 | $ | 2.5 | $ | 15.0 | $ | 17.5 | $ | 9.3 | $ | 8.9 | $ | 18.2 | ||||||||||||||||||
(1) | Includes the $3.8 million ($5.6 million pre-tax) modification charge recorded in August 2006 as discussed below in “Modifications” since the charge we would have recognized in accordance with FIN No. 44, “Accounting for Certain Transactions involving Stock Compensation — an interpretation of APB Opinion No. 25,” would have approximated the charge recognized in accordance with SFAS No. 123(R), “Share-Based Payment.” |
Year Ended December 31, | ||||||||||||||||||||||||
2007 | 2006 | |||||||||||||||||||||||
Stock | Restricted | Stock | Restricted | |||||||||||||||||||||
Options | Stock | Total | Options(1) | Stock | Total | |||||||||||||||||||
(Amounts in millions) | ||||||||||||||||||||||||
Stock-based compensation expense | $ | 3.5 | $ | 21.8 | $ | 25.3 | $ | 12.3 | $ | 12.8 | $ | 25.1 | ||||||||||||
Related income tax benefit | (1.0 | ) | (6.8 | ) | (7.8 | ) | (3.0 | ) | (3.9 | ) | (6.9 | ) | ||||||||||||
Net stock-based compensation expense | $ | 2.5 | $ | 15.0 | $ | 17.5 | $ | 9.3 | $ | 8.9 | $ | 18.2 | ||||||||||||
7579
(Amounts in | ||||
thousands, except | ||||
per share amounts) | ||||
Net earnings, as reported | $ | 17,074 | ||
Restricted stock compensation expense included in net earnings, net of tax | 8,692 | |||
Less: Stock-based employee compensation expense determined under fair value method for all awards, net of tax | (11,359 | ) | ||
Pro forma net earnings | $ | 14,407 | ||
Net earnings per share — basic: | ||||
As reported | $ | 0.31 | ||
Pro forma | 0.26 | |||
Net earnings per share — diluted: | ||||
As reported | $ | 0.30 | ||
Pro forma | 0.25 |
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||||||||||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | Weighted | Weighted | |||||||||||||||||||||||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | |||||||||||||||||||||||||||||||||||||||||||
Exercise | Exercise | Exercise | Exercise | Exercise | Exercise | |||||||||||||||||||||||||||||||||||||||||||
Shares | Price | Shares | Price | Shares | Price | Shares | Price | Shares | Price | Shares | Price | |||||||||||||||||||||||||||||||||||||
Number of shares under option: | ||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding — beginning of year | 1,462,032 | $ | 30.27 | 2,966,326 | $ | 23.00 | 2,820,160 | $ | 21.93 | 677,193 | $ | 36.19 | 1,462,032 | $ | 30.27 | 2,966,326 | $ | 23.00 | ||||||||||||||||||||||||||||||
Granted | — | — | 319,850 | 49.81 | 456,048 | 29.57 | — | — | — | — | 319,850 | 49.81 | ||||||||||||||||||||||||||||||||||||
Exercised | (745,379 | ) | 24.64 | (1,872,742 | ) | 21.74 | (49,717 | ) | 19.96 | (368,460 | ) | 33.23 | (745,379 | ) | 24.64 | (1,872,742 | ) | 21.74 | ||||||||||||||||||||||||||||||
Cancelled | (39,460 | ) | 35.06 | (40,806 | ) | 33.97 | (260,165 | ) | 23.46 | (5,633 | ) | 47.47 | (39,460 | ) | 35.06 | (40,806 | ) | 33.97 | ||||||||||||||||||||||||||||||
Modified(1) | — | — | 89,404 | 24.55 | — | — | — | — | — | — | 89,404 | 24.55 | ||||||||||||||||||||||||||||||||||||
Outstanding — end of year | 677,193 | $ | 36.19 | 1,462,032 | $ | 30.27 | 2,966,326 | $ | 23.00 | 303,100 | $ | 39.58 | 677,193 | $ | 36.19 | 1,462,032 | $ | 30.27 | ||||||||||||||||||||||||||||||
Exercisable — end of year | 344,817 | $ | 30.92 | 779,225 | $ | 23.87 | 2,323,190 | $ | 21.83 | 194,383 | $ | 33.59 | 344,817 | $ | 30.92 | 779,225 | $ | 23.87 | ||||||||||||||||||||||||||||||
(1) | Options originally expiring in 2005 that had their expiration dates extended contingent upon shareholder approval, which was obtained on August 24, 2006, as discussed below in “Modifications.” |
Weighted | ||||||||||||||||||||
Average | Options Outstanding | Options Exercisable | ||||||||||||||||||
Remaining | Weighted Average | Weighted Average | ||||||||||||||||||
Range of Exercise | Contractual | Number | Exercise Price per | Number | Exercise Price per | |||||||||||||||
Prices per Share | Life | Outstanding | Share | Outstanding | Share | |||||||||||||||
$12.12 — 18.18 | 1.92 | 12,700 | $ | 15.98 | 12,700 | $ | 15.98 | |||||||||||||
$18.19 — 24.24 | 4.53 | 23,375 | 19.47 | 23,375 | 19.47 | |||||||||||||||
$24.25 — 30.30 | 4.42 | 47,092 | 25.70 | 47,092 | 25.70 | |||||||||||||||
$30.31 — 36.36 | 6.43 | 45,815 | 32.50 | 45,815 | 32.50 | |||||||||||||||
$36.37 — 42.42 | 6.95 | 10,167 | 39.39 | 10,167 | 39.39 | |||||||||||||||
$42.43 — 48.48 | 7.12 | 106,618 | 48.17 | 40,900 | 48.17 | |||||||||||||||
$48.49 — 54.54 | 7.81 | 44,500 | 52.72 | 9,334 | 53.76 | |||||||||||||||
$54.55 — 60.60 | 7.35 | 12,833 | 59.12 | 5,000 | 60.02 | |||||||||||||||
303,100 | $ | 39.58 | 194,383 | $ | 33.59 | |||||||||||||||
7680
Weighted | ||||||||||||||||||||
Average | Options Outstanding | Options Exercisable | ||||||||||||||||||
Remaining | Weighted Average | Weighted Average | ||||||||||||||||||
Range of Exercise | Contractual | Number | Exercise Price per | Number | Exercise Price per | |||||||||||||||
Prices per Share | Life | Outstanding | Share | Outstanding | Share | |||||||||||||||
$12.12 — 18.18 | 2.77 | 28,600 | $ | 16.64 | 28,600 | $ | 16.64 | |||||||||||||
$18.19 — 24.24 | 5.54 | 66,065 | 20.60 | 66,065 | 20.60 | |||||||||||||||
$24.25 — 30.30 | 6.15 | 135,912 | 25.91 | 78,845 | 25.97 | |||||||||||||||
$30.31 — 36.36 | 7.52 | 169,502 | 32.17 | 94,918 | 32.40 | |||||||||||||||
$36.37 — 42.42 | 7.96 | 14,300 | 39.39 | 9,133 | 39.39 | |||||||||||||||
$42.43 — 48.48 | 8.13 | 188,481 | 48.17 | 54,254 | 48.17 | |||||||||||||||
$48.49 — 54.54 | 8.78 | 51,833 | 52.87 | 6,168 | 53.94 | |||||||||||||||
$54.55 — 60.60 | 8.34 | 22,500 | 58.45 | 6,834 | 58.24 | |||||||||||||||
677,193 | $ | 36.19 | 344,817 | $ | 30.92 | |||||||||||||||
Year Ended December 31, | ||||||||
2006 | 2005 | |||||||
Risk-free interest rate | 4.7 | % | 4.6 | % | ||||
Dividend yield | — | — | ||||||
Stock volatility | 41.4 | % | 43.2 | % | ||||
Average expected life (years) | 5.8 | 6.4 | ||||||
Forfeiture rate | 10.3 | % | 9.7 | % |
77
Year Ended December 31, 2007 | Year Ended December 31, 2008 | |||||||||||||||
Weighted Average | Weighted | |||||||||||||||
Grant-Date Fair | Average Grant- | |||||||||||||||
Shares | Value | Shares | Date Fair Value | |||||||||||||
Number of unvested shares: | ||||||||||||||||
Number of unvested Restricted Shares: | ||||||||||||||||
Outstanding — beginning of year | 800,523 | $ | 37.91 | 1,092,178 | $ | 47.87 | ||||||||||
Granted | 651,511 | 53.40 | 426,573 | 101.77 | ||||||||||||
Vested | (320,559 | ) | 35.00 | (384,550 | ) | 39.67 | ||||||||||
Cancelled | (39,297 | ) | 41.45 | (53,964 | ) | 67.31 | ||||||||||
Unvested restricted stock | 1,092,178 | $ | 47.87 | |||||||||||||
Unvested Restricted Shares | 1,080,237 | $ | 71.11 | |||||||||||||
81
78
8. | DERIVATIVES AND HEDGING ACTIVITIES |
79
82
Other Comprehensive Income (Expense) | Other Comprehensive (Expense) Income | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||
Reclassification to earnings for settlements during the year: | ||||||||||||||||||||||||
Forward contracts | $ | — | $ | 35 | $ | 125 | ||||||||||||||||||
Forward exchange contracts | $ | — | $ | — | $ | 35 | ||||||||||||||||||
Interest rate swap agreements | 1,553 | 529 | 1,284 | (2,863 | ) | 1,553 | 529 | |||||||||||||||||
Change in fair value: | ||||||||||||||||||||||||
Forward contracts | — | — | 28 | |||||||||||||||||||||
Forward exchange contracts | — | — | — | |||||||||||||||||||||
Interest rate swap agreements | (5,458 | ) | 133 | 1,547 | (1,243 | ) | (5,458 | ) | 133 | |||||||||||||||
Year ended December 31 | $ | (3,905 | ) | $ | 697 | $ | 2,984 | $ | (4,106 | ) | $ | (3,905 | ) | $ | 697 | |||||||||
9. | FAIR VALUE OF FINANCIAL INSTRUMENTS |
83
Total | Level I | Level II | Level III | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
Derivative assets | $ | 12,436 | $ | — | $ | 12,436 | $ | — | ||||||||
Deferred compensation assets and other investments | 14,594 | 6,760 | — | 7,834 | ||||||||||||
Total assets | $ | 27,030 | $ | 6,760 | $ | 12,436 | $ | 7,834 | ||||||||
Total | Level I | Level II | Level III | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
Derivative liabilities | $ | 26,284 | $ | — | $ | 26,284 | $ | — | ||||||||
Deferred compensation liabilities | 3,143 | — | — | 3,143 | ||||||||||||
Total liabilities | $ | 29,427 | $ | — | $ | 26,284 | $ | 3,143 | ||||||||
10. | DETAILS OF CERTAIN CONSOLIDATED BALANCE SHEET CAPTIONS |
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||
Trade receivables | $ | 609,984 | $ | 504,862 | $ | 766,294 | $ | 609,984 | ||||||||
Other receivables | 70,968 | 60,088 | 65,895 | 70,968 | ||||||||||||
Allowance for doubtful accounts | (14,219 | ) | (13,135 | ) | ||||||||||||
Less: allowance for doubtful accounts | (23,667 | ) | (14,219 | ) | ||||||||||||
Accounts receivable, net | $ | 666,733 | $ | 551,815 | $ | 808,522 | $ | 666,733 | ||||||||
December 31, | ||||||||
2008 | 2007 | |||||||
(Amounts in thousands) | ||||||||
Land | $ | 70,906 | $ | 73,786 | ||||
Buildings, improvements, furniture and fixtures | 512,186 | 495,912 | ||||||
Machinery, equipment, capital leases and construction in progress | 559,134 | 494,474 | ||||||
Gross property, plant and equipment | 1,142,226 | 1,064,172 | ||||||
Less: accumulated depreciation | (594,991 | ) | (575,280 | ) | ||||
Property, plant and equipment, net | $ | 547,235 | $ | 488,892 | ||||
8084
December 31, | ||||||||
2007 | 2006 | |||||||
(Amounts in thousands) | ||||||||
Land | $ | 73,786 | $ | 69,531 | ||||
Buildings, improvements, furniture and fixtures | 495,912 | 422,838 | ||||||
Machinery, equipment, capital leases and construction in progress | 494,474 | 459,556 | ||||||
Gross property, plant and equipment | 1,064,172 | 951,925 | ||||||
Less accumulated depreciation | (575,280 | ) | (509,033 | ) | ||||
Property, plant and equipment, net | $ | 488,892 | $ | 442,892 | ||||
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||
Investments in equity method affiliates | $ | 64,126 | $ | 50,060 | $ | 56,185 | $ | 64,126 | ||||||||
Deferred loan costs | 6,781 | 7,562 | ||||||||||||||
Deferred compensation funding | 18,200 | 22,221 | ||||||||||||||
Long-term receivables, net | 37,609 | 16,183 | ||||||||||||||
Deferred compensation | 16,074 | 18,200 | ||||||||||||||
Other | 43,836 | 23,407 | 51,291 | 34,434 | ||||||||||||
Other assets, net | $ | 132,943 | $ | 103,250 | $ | 161,159 | $ | 132,943 | ||||||||
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||
Wages, compensation and other benefits | $ | 216,859 | $ | 170,348 | $ | 268,481 | $ | 216,859 | ||||||||
Insurance expense | 3,812 | 3,582 | ||||||||||||||
Interest expense | 773 | 1,642 | ||||||||||||||
Cash dividends payable | 9,234 | 439 | 14,965 | 9,234 | ||||||||||||
Commissions and royalties | 33,718 | 25,538 | 32,842 | 33,718 | ||||||||||||
Customer deposits | 189,230 | 74,851 | 337,553 | 189,230 | ||||||||||||
Progress billings in excess of accumulated costs | 62,896 | 44,523 | 90,815 | 62,896 | ||||||||||||
Warranty costs | 34,408 | 28,578 | ||||||||||||||
Warranty costs and late delivery penalties | 59,754 | 54,242 | ||||||||||||||
Sales and use tax expense | 11,464 | 8,127 | 10,833 | 11,464 | ||||||||||||
Legal and environmental matters | 14,216 | 14,721 | 8,166 | 14,216 | ||||||||||||
Income tax | 44,935 | 4,516 | 51,222 | 44,935 | ||||||||||||
Derivative liabilities | 23,563 | 6,408 | ||||||||||||||
Other | 101,481 | 81,365 | 68,905 | 79,824 | ||||||||||||
Accrued liabilities | $ | 723,026 | $ | 458,230 | $ | 967,099 | $ | 723,026 | ||||||||
8185
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||
Retirement and postretirement benefits | $ | 221,517 | $ | 253,212 | ||||||||||||
Pension and postretirement benefits | $ | 274,348 | $ | 221,517 | ||||||||||||
Deferred taxes | 43,313 | 36,608 | 17,388 | 43,313 | ||||||||||||
Deferred compensation | 20,627 | 13,920 | 8,055 | 20,627 | ||||||||||||
Derivative contracts | 1,791 | 632 | ||||||||||||||
Insurance accruals | 17,663 | 7,853 | ||||||||||||||
Minority interest | 7,240 | 4,096 | 6,431 | 7,240 | ||||||||||||
Other | 131,981 | 99,626 | 178,429 | 125,919 | ||||||||||||
Retirement obligations and other liabilities | $ | 426,469 | $ | 408,094 | $ | 502,314 | $ | 426,469 | ||||||||
EQUITY METHOD INVESTMENTS |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008(1) | 2007 | 2006 | |||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||
Revenues | $ | 382,974 | $ | 295,545 | $ | 260,279 | $ | 318,468 | $ | 382,974 | $ | 295,545 | ||||||||||||
Gross profit | 96,935 | 79,599 | 68,303 | 85,051 | 96,935 | 79,599 | ||||||||||||||||||
Income before provision for income taxes | 62,972 | 48,337 | 39,509 | 59,869 | 62,972 | 48,337 | ||||||||||||||||||
Provision for income taxes | (20,200 | ) | (14,033 | ) | (13,111 | ) | (14,615 | ) | (20,200 | ) | (14,033 | ) | ||||||||||||
Net income | $ | 42,772 | $ | 34,304 | $ | 26,398 | $ | 45,254 | $ | 42,772 | $ | 34,304 | ||||||||||||
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2008(1) | 2007 | |||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||
Current assets | $ | 218,444 | $ | 188,797 | $ | 166,511 | $ | 218,444 | ||||||||
Noncurrent assets | 60,301 | 48,316 | 43,444 | 60,301 | ||||||||||||
Total assets | $ | 278,745 | $ | 237,113 | $ | 209,955 | $ | 278,745 | ||||||||
Current liabilities | $ | 99,768 | $ | 91,798 | $ | 77,482 | $ | 99,768 | ||||||||
Noncurrent liabilities | 31,125 | 24,292 | 10,574 | 31,125 | ||||||||||||
Shareholders’ equity | 147,852 | 121,023 | 121,899 | 147,852 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 278,745 | $ | 237,113 | $ | 209,955 | $ | 278,745 | ||||||||
8286
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008(1) | 2007 | 2006 | |||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||
Equity income based on stated ownership percentages | $ | 18,974 | $ | 14,820 | $ | 11,505 | $ | 18,971 | $ | 18,974 | $ | 14,820 | ||||||||||||
Adjustments due to amortization of basis differences, timing of GAAP adjustments and other adjustments | (279 | ) | — | 1,028 | ||||||||||||||||||||
Adjustments due to currency translation, U.S. GAAP conformity, dividend distributions, taxes on dividends and other adjustments | (2,008 | ) | (279 | ) | — | |||||||||||||||||||
Equity in income from investees | $ | 18,695 | $ | 14,820 | $ | 12,533 | $ | 16,963 | $ | 18,695 | $ | 14,820 | ||||||||||||
(1) | As discussed in Note 3, effective March 1, 2008, we purchased the remaining 50% interest in Niigata, resulting in the full consolidation of Niigata as of that date. Prior to this transaction, our 50% interest was recorded using the equity method of accounting. As a result, Niigata’s income statement information includes only the first two months of 2008. | |
(2) | The provision for income taxes is based on the tax laws and rates in the countries in which our investees operate. The taxation regimes vary not only by their nominal rates, but also by the allowability of deductions, credits and other benefits. |
DEBT AND LEASE OBLIGATIONS |
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||
Term Loan, interest rate of 6.40% in 2007 and 6.88% in 2006 | $ | 555,379 | $ | 558,220 | ||||||||||||
Capital lease obligations and other | 2,597 | 6,349 | ||||||||||||||
Term Loan, interest rate of 2.99% in 2008 and 6.40% in 2007 | $ | 549,697 | $ | 555,379 | ||||||||||||
Capital lease obligations and other borrowings | 23,651 | 2,597 | ||||||||||||||
Debt and capital lease obligations | 557,976 | 564,569 | 573,348 | 557,976 | ||||||||||||
Less amounts due within one year | 7,181 | 8,050 | 27,731 | 7,181 | ||||||||||||
Total debt due after one year | $ | 550,795 | $ | 556,519 | $ | 545,617 | $ | 550,795 | ||||||||
Capital Leases & | Capital Leases & | |||||||||||||||||||||||
Term Loans | Other | Total | Term Loans | Other | Total | |||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||
2008 | $ | 5,682 | $ | 1,499 | $ | 7,181 | ||||||||||||||||||
2009 | 5,682 | 648 | 6,330 | $ | 5,682 | $ | 22,049 | $ | 27,731 | |||||||||||||||
2010 | 5,682 | 450 | 6,132 | 5,682 | 1,602 | 7,284 | ||||||||||||||||||
2011 | 137,779 | — | 137,779 | 137,779 | — | 137,779 | ||||||||||||||||||
2012 | 400,554 | — | 400,554 | 400,554 | — | 400,554 | ||||||||||||||||||
Thereafter | — | — | — | |||||||||||||||||||||
Total | $ | 555,379 | $ | 2,597 | $ | 557,976 | $ | 549,697 | $ | 23,651 | $ | 573,348 | ||||||||||||
8387
84
88
Year Ended December 31, | (Amounts in thousands) | |||||||
2008 | $ | 34,564 | ||||||
2009 | 28,089 | $ | 45,300 | |||||
2010 | 21,907 | 37,521 | ||||||
2011 | 15,648 | 28,848 | ||||||
2012 | 12,136 | 21,497 | ||||||
2013 | 17,477 | |||||||
Thereafter | 15,179 | 33,847 | ||||||
Total minimum lease payments | $ | 127,523 | $ | 184,490 | ||||
85
89
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||
Service cost | $ | 16,417 | $ | 14,864 | $ | 14,832 | $ | 16,685 | $ | 16,417 | $ | 14,864 | ||||||||||||
Interest cost | 16,372 | 15,538 | 15,549 | 17,743 | 16,372 | 15,538 | ||||||||||||||||||
Expected return on plan assets | (17,006 | ) | (15,751 | ) | (16,444 | ) | (20,150 | ) | (17,006 | ) | (15,751 | ) | ||||||||||||
Settlement and curtailment of benefits | — | — | (266 | ) | ||||||||||||||||||||
Amortization of unrecognized prior service benefit | (1,356 | ) | (1,347 | ) | (1,459 | ) | (1,326 | ) | (1,356 | ) | (1,347 | ) | ||||||||||||
Amortization of unrecognized net loss | 6,115 | 6,353 | 4,974 | 4,607 | 6,115 | 6,353 | ||||||||||||||||||
U.S. pension expense | $ | 20,542 | $ | 19,657 | $ | 17,186 | ||||||||||||||||||
U.S. net pension expense | $ | 17,559 | $ | 20,542 | $ | 19,657 | ||||||||||||||||||
December 31, | ||||||||
2008 | 2007 | |||||||
(Amounts in thousands) | ||||||||
Benefit Obligation | $ | 304,341 | $ | 297,319 | ||||
Plan assets, at fair value | 196,042 | 251,215 | ||||||
Funded status | $ | (108,299 | ) | $ | (46,104 | ) | ||
December 31, | ||||||||
2008 | 2007 | |||||||
(Amounts in thousands) | ||||||||
Current liabilities | $ | (368 | ) | $ | (378 | ) | ||
Noncurrent liabilities | (107,931 | ) | (45,726 | ) | ||||
Funded status | $ | (108,299 | ) | $ | (46,104 | ) | ||
8690
Year Ended December 31, | ||||||||
2007 | 2006 | |||||||
(Amounts in thousands) | ||||||||
Benefit obligation | $ | 297,319 | $ | 295,549 | ||||
Plan assets, at fair value | 251,215 | 242,045 | ||||||
Funded status | $ | (46,104 | ) | $ | (53,504 | ) | ||
Accumulated other comprehensive loss, net of tax: | ||||||||
Unrecognized net loss | $ | (52,345 | ) | $ | (60,522 | ) | ||
Unrecognized prior service benefit | 3,972 | 5,205 | ||||||
Deferred tax asset | (27,127 | ) | (31,996 | ) | ||||
Net amount recognized | 29,396 | 33,809 | ||||||
Funded status | $ | (46,104 | ) | $ | (53,504 | ) | ||
Year Ended December 31, | ||||||||
2007 | 2006 | |||||||
(Amounts in thousands) | ||||||||
Current liabilities | $ | (378 | ) | $ | (370 | ) | ||
Noncurrent liabilities | (45,726 | ) | (53,134 | ) | ||||
Funded status | $ | (46,104 | ) | $ | (53,504 | ) | ||
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(Amounts in thousands) | ||||||||||||
Balance — January 1 | $ | (48,741 | ) | $ | (55,682 | ) | $ | (65,622 | ) | |||
Increase (decrease) in minimum liability included in other comprehensive income prior to adoption of SFAS No. 158 | — | — | 10,290 | |||||||||
Adoption of SFAS No. 158 | — | — | (350 | ) | ||||||||
Amortization of net loss | 2,866 | 3,593 | — | |||||||||
Amortization of prior service benefit | (825 | ) | (797 | ) | — | |||||||
Net (loss) gain arising during the year | (60,945 | ) | 4,532 | |||||||||
New prior service cost arising during the year | (459 | ) | (387 | ) | — | |||||||
Balance — December 31 | $ | (108,104 | ) | $ | (48,741 | ) | $ | (55,682 | ) | |||
December 31, | ||||||||
2008 | 2007 | |||||||
(Amounts in thousands) | ||||||||
Unrecognized net loss | $ | (110,720 | ) | $ | (52,345 | ) | ||
Unrecognized prior service benefit | 2,616 | 3,972 | ||||||
Accumulated other comprehensive loss, net of tax: | $ | (108,104 | ) | $ | (48,373 | ) | ||
2007 | 2006 | 2005 | ||||||||||
(Amounts in thousands) | ||||||||||||
Balance — January 1 | $ | (55,682 | ) | $ | (65,622 | ) | $ | (53,668 | ) | |||
Increase (decrease) in minimum liability included in other comprehensive income prior to adoption of SFAS No. 158 | — | 10,290 | (11,954 | ) | ||||||||
Adoption of SFAS No. 158 | — | (350 | ) | — | ||||||||
Amortization of net loss | 3,593 | — | — | |||||||||
Amortization of prior service benefit | (797 | ) | — | — | ||||||||
Net gain arising during the year | 4,532 | |||||||||||
New prior service benefit | (387 | ) | — | — | ||||||||
Balance — December 31 | $ | (48,741 | ) | $ | (55,682 | ) | $ | (65,622 | ) | |||
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Weighted average assumptions used to determine Benefit Obligations: | ||||||||||||
Discount rate | 6.75 | % | 6.25 | % | 5.75 | % | ||||||
Rate of increase in compensation levels | 4.80 | 4.50 | 4.50 | |||||||||
Weighted average assumptions used to determine net pension expense: | ||||||||||||
Long-term rate of return on assets | 8.00 | % | 7.75 | % | 7.50 | % | ||||||
Discount rate | 6.25 | 5.75 | 5.50 | |||||||||
Rate of increase in compensation levels | 4.50 | 4.50 | 4.50 |
8791
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Weighted average assumptions used to determine benefit obligations: | ||||||||||||
Discount rate | 6.25 | % | 5.75 | % | 5.50 | % | ||||||
Rate of increase in compensation levels | 4.50 | 4.50 | 4.50 | |||||||||
Weighted average assumptions used to determine net cost: | ||||||||||||
Long-term rate of return on assets | 7.75 | % | 7.50 | % | 8.25 | % | ||||||
Discount rate | 5.75 | 5.50 | 5.75 | |||||||||
Rate of increase in compensation levels | 4.50 | 4.50 | 4.50 |
Year Ended December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||
Beginning benefit obligations | $ | 295,549 | $ | 294,291 | ||||||||||||
Beginning Benefit Obligations | $ | 297,319 | $ | 295,549 | ||||||||||||
Service cost | 16,417 | 14,864 | 16,685 | 16,417 | ||||||||||||
Interest cost | 16,372 | 15,538 | 17,743 | 16,372 | ||||||||||||
Plan amendments | 660 | 27 | 737 | 660 | ||||||||||||
Actuarial gain | (8,351 | ) | (3,365 | ) | (8,134 | ) | (8,351 | ) | ||||||||
Benefits paid | (23,328 | ) | (25,806 | ) | (20,009 | ) | (23,328 | ) | ||||||||
Ending benefit obligations | $ | 297,319 | $ | 295,549 | ||||||||||||
Ending Benefit Obligations | $ | 304,341 | $ | 297,319 | ||||||||||||
Accumulated benefit obligations | $ | 297,319 | $ | 295,549 | $ | 304,341 | $ | 297,319 | ||||||||
Year Ended December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||
Beginning plan assets | $ | 242,045 | $ | 207,155 | $ | 251,215 | $ | 242,045 | ||||||||
Return on plan assets | 16,369 | 24,391 | (85,960 | ) | 16,369 | |||||||||||
Company contributions | 16,129 | 36,305 | 50,797 | 16,129 | ||||||||||||
Benefits paid | (23,328 | ) | (25,806 | ) | (20,009 | ) | (23,328 | ) | ||||||||
Ending plan assets | $ | 251,215 | $ | 242,045 | $ | 196,043 | $ | 251,215 | ||||||||
(1) | The significant decline in return on plan assets in 2008 is primarily a result of recent declines in global debt and equity markets, and will be amortized to income over the remaining expected service period. |
Expected benefit payments: | ||||
2009 | $ | 29.3 | ||
2010 | 31.8 | |||
2011 | 31.2 | |||
2012 | 32.0 | |||
2013 | 33.9 | |||
2014-2018 | 176.1 |
8892
Company contributions — 2008 | $ | 30.4 | ||
Expected benefit payments: | ||||
2008 | $ | 25.5 | ||
2009 | 28.0 | |||
2010 | 28.5 | |||
2011 | 27.3 | |||
2012 | 28.6 | |||
2013-2017 | 161.1 |
Target Allocation at December 31, | Percentage of Actual Plan Assets at December 31, | Percentage of Actual Plan | ||||||||||||||||||||||||||||||
Asset Category | 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||||||||||
Target Allocation at December 31, | Assets at December 31, | |||||||||||||||||||||||||||||||
Asset category | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||||||
Equity securities | 65 | % | 65 | % | 65 | % | 65 | % | 65 | % | 65 | % | 66 | % | 65 | % | ||||||||||||||||
Fixed income | 25 | % | 25 | % | 25 | % | 25 | % | 35 | % | 25 | % | 30 | % | 25 | % | ||||||||||||||||
Other | 10 | % | 10 | % | 10 | % | 10 | % | 0 | % | 10 | % | 4 | % | 10 | % |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||
Service cost | $ | 4,576 | $ | 6,019 | $ | 5,087 | $ | 3,631 | $ | 4,576 | $ | 6,019 | ||||||||||||
Interest cost | 12,466 | 10,795 | 10,663 | 13,372 | 12,466 | 10,795 | ||||||||||||||||||
Expected return on plan assets | (7,516 | ) | (6,006 | ) | (5,740 | ) | (5,429 | ) | (7,516 | ) | (6,006 | ) | ||||||||||||
Settlement and curtailment of benefits | 363 | 745 | 43 | 40 | 363 | 745 | ||||||||||||||||||
Amortization of unrecognized net loss | 1,715 | 2,483 | 1,403 | 375 | 1,715 | 2,483 | ||||||||||||||||||
Non-U.S. pension expense | $ | 11,604 | $ | 14,036 | $ | 11,456 | ||||||||||||||||||
Non-U.S. net pension expense | $ | 11,989 | $ | 11,604 | $ | 14,036 | ||||||||||||||||||
89
Year Ended December 31, | ||||||||
2007 | 2006 | |||||||
(Amounts in thousands) | ||||||||
Benefit obligation | $ | 257,664 | $ | 264,053 | ||||
Plan assets, at fair value | 131,128 | 123,093 | ||||||
Funded status | $ | (126,536 | ) | $ | (140,960 | ) | ||
Accumulated other comprehensive loss, net of tax: | ||||||||
Unrecognized net loss | $ | (22,695 | ) | $ | (38,045 | ) | ||
Net deferred tax liability (asset) | 541 | (4,572 | ) | |||||
Net amount recognized | (104,382 | ) | (98,343 | ) | ||||
Funded status | $ | (126,536 | ) | $ | (140,960 | ) | ||
December 31, | ||||||||
2008 | 2007 | |||||||
(Amounts in thousands) | ||||||||
Benefit Obligation | $ | 228,070 | $ | 257,664 | ||||
Plan assets, at fair value | 92,935 | 131,128 | ||||||
Funded status | $ | (135,135 | ) | $ | (126,536 | ) | ||
93
(1) | The net deferred tax liability in 2007 includes the effect of the reversal of a valuation allowance in 2007. See Note 17 for discussion of valuation allowances. |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||
Noncurrent assets | $ | 764 | $ | 247 | $ | 446 | $ | 764 | ||||||||
Current liabilities | (6,898 | ) | (6,280 | ) | (6,686 | ) | (6,898 | ) | ||||||||
Noncurrent liabilities | (120,402 | ) | (134,927 | ) | (128,895 | ) | (120,402 | ) | ||||||||
Funded status | $ | (126,536 | ) | $ | (140,960 | ) | $ | (135,135 | ) | $ | (126,536 | ) | ||||
Year Ended December 31, | ||||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||
Balance — January 1 | $ | (38,045 | ) | $ | (22,110 | ) | $ | (8,434 | ) | $ | (22,695 | ) | $ | (38,045 | ) | $ | (22,110 | ) | ||||||
Increase (decrease) in minimum liability included in other comprehensive income prior to adoption of SFAS No. 158 | — | 8,563 | (13,676 | ) | — | — | 8,563 | |||||||||||||||||
Adoption of SFAS No. 158 | — | (24,498 | ) | — | — | — | (24,498 | ) | ||||||||||||||||
Amortization of net loss | 1,578 | — | — | 255 | 1,578 | — | ||||||||||||||||||
Net gain arising during the year | 14,817 | — | — | |||||||||||||||||||||
Currency exchange impact | (1,045 | ) | — | — | ||||||||||||||||||||
Net (loss) gain arising during the year | (18,001 | ) | 14,817 | — | ||||||||||||||||||||
Currency translation impact | 6,285 | (1,045 | ) | — | ||||||||||||||||||||
Balance — December 31 | $ | (22,695 | ) | $ | (38,045 | ) | $ | (22,110 | ) | $ | (34,156 | ) | $ | (22,695 | ) | $ | (38,045 | ) | ||||||
December 31, | ||||||||
2008 | 2007 | |||||||
(Amounts in thousands) | ||||||||
Unrecognized net loss | $ | (34,156 | ) | $ | (22,695 | ) | ||
Accumulated other comprehensive loss, net of tax: | $ | (34,156 | ) | $ | (22,695 | ) | ||
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Weighted average assumptions used to determine Benefit Obligations: | ||||||||||||
Discount rate | 5.47 | % | 5.61 | % | 4.78 | % | ||||||
Rate of increase in compensation levels | 3.07 | 3.32 | 3.23 | |||||||||
Weighted average assumptions used to determine net pension expense: | ||||||||||||
Long-term rate of return on assets | 4.35 | % | 5.91 | % | 5.46 | % | ||||||
Discount rate | 5.61 | 4.78 | 4.43 | |||||||||
Rate of increase in compensation levels | 3.32 | 3.23 | 3.19 |
9094
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(Amounts in thousands) | ||||||||||||
Weighted average assumptions used to determine benefit obligations: | ||||||||||||
Discount rate | 5.61 | % | 4.78 | % | 4.43 | % | ||||||
Rate of increase in compensation levels | 3.32 | 3.23 | 3.19 | |||||||||
Weighted average assumptions used to determine net cost: | ||||||||||||
Long-term rate of return on assets | 5.91 | % | 5.46 | % | 6.00 | % | ||||||
Discount rate | 4.78 | 4.43 | 5.12 | |||||||||
Rate of increase in compensation levels | 3.23 | 3.19 | 3.05 |
Year Ended December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||
Beginning benefit obligations | $ | 264,053 | $ | 239,758 | ||||||||||||
Beginning Benefit Obligations | $ | 257,664 | $ | 264,053 | ||||||||||||
Service cost | 4,576 | 6,019 | 3,631 | 4,576 | ||||||||||||
Interest cost | 12,466 | 10,795 | 13,372 | 12,466 | ||||||||||||
Employee contributions | 751 | 627 | 709 | 751 | ||||||||||||
Plan amendments, curtailments and other | (109 | ) | 29 | — | (109 | ) | ||||||||||
Plan settlements(1) | — | (4,167 | ) | |||||||||||||
Actuarial gain(2) | (23,863 | ) | (6,752 | ) | ||||||||||||
Actuarial loss (gain)(1) | 8,986 | (23,863 | ) | |||||||||||||
Net benefits and expenses paid | (14,981 | ) | (11,553 | ) | (15,063 | ) | (14,981 | ) | ||||||||
Currency exchange impact | 14,771 | 29,297 | ||||||||||||||
Ending benefit obligations | $ | 257,664 | $ | 264,053 | ||||||||||||
Currency translation impact(2) | (41,229 | ) | 14,771 | |||||||||||||
Ending Benefit Obligations | $ | 228,070 | $ | 257,664 | ||||||||||||
Accumulated benefit obligations | $ | 237,707 | $ | 242,219 | $ | 211,699 | $ | 237,707 | ||||||||
(1) | The | |
(2) | The |
December 31, | ||||||||
2008 | 2007 | |||||||
(Amounts in thousands) | ||||||||
Beginning plan assets | $ | 131,128 | $ | 123,093 | ||||
Return on plan assets(1) | (14,909 | ) | 3,123 | |||||
Employee contributions | 709 | 751 | ||||||
Company contributions | 20,234 | 16,216 | ||||||
Currency translation impact(2) | (29,164 | ) | 2,926 | |||||
Net benefits and expenses paid | (15,063 | ) | (14,981 | ) | ||||
Ending plan assets | $ | 92,935 | $ | 131,128 | ||||
(1) | The significant decline in return on plan assets in 2008 is primarily a result of recent declines in global debt and equity markets. The losses that will be amortized to income over the remaining service period. | |
(2) | The decrease in the |
9195
Year Ended December 31, | ||||||||
2007 | 2006 | |||||||
(Amounts in thousands) | ||||||||
Beginning plan assets | $ | 123,093 | $ | 104,475 | ||||
Return on plan assets | 3,123 | 7,873 | ||||||
Employee contributions | 751 | 627 | ||||||
Company contributions | 16,216 | 11,634 | ||||||
Currency exchange impact | 2,926 | 13,841 | ||||||
Plan settlements(1) | — | (4,063 | ) | |||||
Acquisitions | — | 259 | ||||||
Net benefits and expenses paid | (14,981 | ) | (11,553 | ) | ||||
Ending plan assets | $ | 131,128 | $ | 123,093 | ||||
Company contributions — 2008 | $ | 12.6 | ||||||
Estimated company contributions — 2009 | $ | 12.8 | ||||||
Expected benefit payments: | ||||||||
2008 | $ | 11.5 | ||||||
2009 | 12.0 | $ | 9.7 | |||||
2010 | 11.9 | 9.4 | ||||||
2011 | 12.7 | 10.5 | ||||||
2012 | 13.3 | 12.1 | ||||||
2013-2017 | 49.6 | |||||||
2013 | 11.5 | |||||||
2014-2018 | 72.6 |
Target Allocation at December 31, | Percentage of Actual Plan Assets at December 31, | Percentage of Actual Plan | ||||||||||||||||||||||||||||||
Asset Category | 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||||||||||
Target Allocation at December 31, | Assets at December 31, | |||||||||||||||||||||||||||||||
Asset category | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||||||
Equity securities | 50 | % | 48 | % | 50 | % | 50 | % | 48 | % | 50 | % | 47 | % | 50 | % | ||||||||||||||||
Fixed income | 50 | % | 41 | % | 47 | % | 38 | % | 51 | % | 50 | % | 51 | % | 47 | % | ||||||||||||||||
Other | 0 | % | 11 | % | 3 | % | 12 | % | 1 | % | 0 | % | 2 | % | 3 | % |
92
Year Ended December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||
Projected benefit obligation | $ | 453,316 | $ | 439,199 | ||||||||||||
Benefit Obligation | $ | 530,944 | $ | 453,316 | ||||||||||||
Accumulated benefit obligation | 447,339 | 433,398 | 515,128 | 447,339 | ||||||||||||
Fair value of plan assets | 282,585 | 258,226 | 287,113 | 282,585 |
96
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||
Service cost | $ | 87 | $ | 106 | $ | 122 | $ | 67 | $ | 87 | $ | 106 | ||||||||||||
Interest cost | 3,675 | 3,842 | 4,139 | 3,531 | 3,675 | 3,842 | ||||||||||||||||||
Amortization of unrecognized prior service benefit | (4,285 | ) | (4,329 | ) | (4,147 | ) | (2,514 | ) | (4,285 | ) | (4,329 | ) | ||||||||||||
Amortization of unrecognized net loss | 466 | 1,054 | 683 | 33 | 466 | 1,054 | ||||||||||||||||||
Postretirement benefit expense | $ | (57 | ) | $ | 673 | $ | 797 | |||||||||||||||||
Net postretirement benefit expense (income) | $ | 1,117 | $ | (57 | ) | $ | 673 | |||||||||||||||||
Year Ended December 31, | ||||||||
2007 | 2006 | |||||||
(Amounts in thousands) | ||||||||
Postretirement benefit obligation | $ | 62,267 | $ | 71,382 | ||||
Funded status | $ | (62,267 | ) | $ | (71,382 | ) | ||
Accumulated other comprehensive loss, net of tax: | ||||||||
Unrecognized net loss | $ | (2,792 | ) | $ | (7,340 | ) | ||
Unrecognized prior service benefit | 5,128 | 7,785 | ||||||
Deferred tax liability | 1,309 | 258 | ||||||
Net amount recognized | (65,912 | ) | (72,085 | ) | ||||
Funded status | $ | (62,267 | ) | $ | (71,382 | ) | ||
December 31, | ||||||||
2008 | 2007 | |||||||
(Amounts in thousands) | ||||||||
Postretirement Benefit Obligation | $ | 43,064 | $ | 62,267 | ||||
Funded status | $ | (43,064 | ) | $ | (62,267 | ) | ||
93
Year Ended December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||
Current liabilities | $ | (7,285 | ) | $ | (7,942 | ) | $ | (6,199 | ) | $ | (7,285 | ) | ||||
Noncurrent liabilities | (54,982 | ) | (63,440 | ) | (36,865 | ) | (54,982 | ) | ||||||||
Funded status | $ | (62,267 | ) | $ | (71,382 | ) | $ | (43,064 | ) | $ | (62,267 | ) | ||||
2007 | 2006 | 2005 | Year Ended December 31, | |||||||||||||||||||||
(Amounts in thousands) | 2008 | 2007 | 2006 | |||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||
�� | ||||||||||||||||||||||||
Balance — January 1 | $ | 445 | $ | — | $ | — | $ | 2,336 | $ | 445 | $ | — | ||||||||||||
Adoption of SFAS No. 158 | — | 445 | — | — | — | 445 | ||||||||||||||||||
Amortization of net loss | 299 | — | — | 21 | 299 | — | ||||||||||||||||||
Amortization of prior service benefit | (2,745 | ) | — | — | (1,611 | ) | (2,745 | ) | — | |||||||||||||||
Net gain arising during the year | 4,337 | — | — | 12,437 | 4,337 | — | ||||||||||||||||||
Balance — December 31 | $ | 2,336 | $ | 445 | $ | — | $ | 13,183 | $ | 2,336 | $ | 445 | ||||||||||||
Year Ended December 31, | ||||||||
2007 | 2006 | |||||||
(Amounts in thousands) | ||||||||
Beginning accumulated postretirement benefit obligation | $ | 71,382 | $ | 73,794 | ||||
Service cost | 87 | 106 | ||||||
Interest cost | 3,675 | 3,842 | ||||||
Employee contributions | 2,950 | 2,687 | ||||||
Medicare subsidies receivable | 500 | 500 | ||||||
Actuarial gain(1) | (6,761 | ) | (503 | ) | ||||
Net benefits and expenses paid | (9,566 | ) | (9,044 | ) | ||||
Ending accumulated postretirement benefit obligation | $ | 62,267 | $ | 71,382 | ||||
Expected | Medicare | |||||||
Cash Flows | Subsidy | |||||||
(Amounts in millions) | ||||||||
2008 | $ | 7.3 | $ | 0.5 | ||||
2009 | 7.1 | 0.6 | ||||||
2010 | 7.0 | 0.5 | ||||||
2011 | 6.7 | 0.5 | ||||||
2012 | 6.2 | 0.5 | ||||||
2013-2017 | 25.7 | 2.1 |
9497
December 31, | ||||||||
2008 | 2007 | |||||||
(Amounts in thousands) | ||||||||
Unrecognized net gain (loss) | $ | 9,666 | $ | (2,792 | ) | |||
Unrecognized prior service benefit | 3,517 | 5,128 | ||||||
Accumulated other comprehensive loss, net of tax: | $ | 13,183 | $ | 2,336 | ||||
Year Ended December 31, | ||||||||
2008 | 2007 | |||||||
(Amounts in | ||||||||
thousands) | ||||||||
Beginning postretirement Benefit Obligation | $ | 62,267 | $ | 71,382 | ||||
Service cost | 67 | 87 | ||||||
Interest cost | 3,531 | 3,675 | ||||||
Employee contributions | 2,935 | 2,950 | ||||||
Medicare subsidies receivable | 500 | 500 | ||||||
Actuarial gain(1) | (19,412 | ) | (6,761 | ) | ||||
Net benefits and expenses paid | (6,824 | ) | (9,566 | ) | ||||
Ending postretirement Benefit Obligation | $ | 43,064 | $ | 62,267 | ||||
(1) | The increase in the actuarial gain in 2008 primarily reflects the impact of the changes in assumptions related to employee retention rates in the plans based on recent trends. |
Expected | Medicare | |||||||
Payments | Subsidy | |||||||
2009 | $ | 6.2 | $ | 0.4 | ||||
2010 | 5.7 | 0.4 | ||||||
2011 | 5.1 | 0.3 | ||||||
2012 | 4.6 | 0.3 | ||||||
2013 | 4.2 | 0.3 | ||||||
2014-2018 | 16.3 | 1.2 |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
Weighted average assumptions used to determine benefit obligations: | ||||||||||||||||||||||||
Weighted average assumptions used to determine Benefit Obligations: | ||||||||||||||||||||||||
Discount rate | 6.25 | % | 5.75 | % | 5.50 | % | 6.50 | % | 6.25 | % | 5.75 | % | ||||||||||||
Weighted average assumptions used to determine net cost: | ||||||||||||||||||||||||
Weighted average assumptions used to determine net expense: | ||||||||||||||||||||||||
Discount rate | 5.75 | % | 5.50 | % | 5.75 | % | 6.25 | % | 5.75 | % | 5.50 | % | ||||||||||||
Expected return on plan assets | — | — | — | — | — | — |
98
1% Increase | 1% Decrease | 1% Increase | 1% Decrease | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
Effect on postretirement benefit obligation | $ | 1,490 | $ | (1,333 | ) | |||||||||||
Effect on postretirement Benefit Obligation | $ | 826 | $ | (749 | ) | |||||||||||
Effect on service cost plus interest cost | 86 | (77 | ) | 80 | (72 | ) |
LEGAL MATTERS AND CONTINGENCIES |
95
99
96100
97
101
WARRANTY RESERVE |
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||
Balance — January 1 | $ | 29,314 | $ | 29,737 | $ | 27,675 | $ | 34,471 | $ | 29,314 | $ | 29,737 | ||||||||||||
Accruals for warranty expense, net of adjustments | 25,637 | 23,418 | 26,072 | 32,428 | 25,637 | 23,418 | ||||||||||||||||||
Settlements made | (20,480 | ) | (23,841 | ) | (24,010 | ) | (29,963 | ) | (20,480 | ) | (23,841 | ) | ||||||||||||
Balance — December 31 | $ | 34,471 | $ | 29,314 | $ | 29,737 | $ | 36,936 | $ | 34,471 | $ | 29,314 | ||||||||||||
16. | SHAREHOLDERS’ EQUITY |
17. | INCOME TAXES |
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(Amounts in thousands) | ||||||||||||
Current: | ||||||||||||
U.S. federal | $ | 11,612 | $ | 24,640 | $ | 24,630 | ||||||
Non-U.S. | 135,797 | 100,601 | 53,442 | |||||||||
State and local | 5,172 | 3,211 | 1,105 | |||||||||
Total current | 152,581 | 128,452 | 79,177 | |||||||||
Deferred: | ||||||||||||
U.S. federal | 3,250 | 5,571 | (1,355 | ) | ||||||||
Non-U.S. | (6,462 | ) | (22,106 | ) | (3,470 | ) | ||||||
State and local | (1,648 | ) | (7,623 | ) | (1,114 | ) | ||||||
Total deferred | $ | (4,860 | ) | $ | (24,158 | ) | $ | (5,939 | ) | |||
Total provision | $ | 147,721 | $ | 104,294 | $ | 73,238 | ||||||
98102
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(Amounts in thousands) | ||||||||||||
Current: | ||||||||||||
U.S. federal | $ | 24,640 | $ | 24,630 | $ | 7,404 | ||||||
Non-U.S | 100,601 | 53,442 | 44,813 | |||||||||
State and local | 3,211 | 1,105 | 17 | |||||||||
Total current | 128,452 | 79,177 | 52,234 | |||||||||
Deferred: | ||||||||||||
U.S. federal | 5,571 | (1,355 | ) | (9,092 | ) | |||||||
Non-U.S | (22,106 | ) | (3,470 | ) | (275 | ) | ||||||
State and local | (7,623 | ) | (1,114 | ) | (2,284 | ) | ||||||
Total deferred | $ | (24,158 | ) | $ | (5,939 | ) | $ | (11,651 | ) | |||
Total provision | $ | 104,294 | $ | 73,238 | $ | 40,583 | ||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in millions) | (Amounts in millions) | |||||||||||||||||||||||
Statutory federal income tax at 35% | $ | 126.0 | $ | 65.5 | $ | 32.2 | $ | 206.5 | $ | 126.0 | $ | 65.5 | ||||||||||||
Foreign impact, net | (20.3 | ) | 4.7 | 11.5 | (50.8 | ) | (20.3 | ) | 4.7 | |||||||||||||||
Change in valuation allowances | (11.0 | ) | (2.5 | ) | (1.7 | ) | (6.5 | ) | (11.0 | ) | (2.5 | ) | ||||||||||||
State and local income taxes, net | 3.2 | 0.8 | 0.1 | 3.5 | 3.2 | 0.8 | ||||||||||||||||||
Extraterritorial income exclusion | — | (2.6 | ) | (1.9 | ) | — | — | (2.6 | ) | |||||||||||||||
Meals and entertainment | 0.9 | 0.8 | 0.8 | 1.2 | 0.9 | 0.8 | ||||||||||||||||||
Other | 5.5 | 6.5 | (0.4 | ) | (6.2 | ) | 5.5 | 6.5 | ||||||||||||||||
Total | $ | 104.3 | $ | 73.2 | $ | 40.6 | $ | 147.7 | $ | 104.3 | $ | 73.2 | ||||||||||||
Effective tax rate | 29.0 | % | 39.1 | % | �� | 44.1 | % | 25.0 | % | 29.0 | % | 39.1 | % | |||||||||||
99
103
100
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||
Deferred tax assets related to: | ||||||||||||||||
Retirement benefits | $ | 54,931 | $ | 60,795 | $ | 56,119 | $ | 54,931 | ||||||||
Net operating loss carryforwards | 30,708 | 52,041 | 31,305 | 30,708 | ||||||||||||
Compensation accruals | 50,505 | 43,585 | 67,386 | 50,505 | ||||||||||||
Inventories | 27,904 | 29,620 | 29,530 | 27,904 | ||||||||||||
Credit carryforwards | 18,077 | 28,456 | 3,502 | 18,077 | ||||||||||||
Warranty and accrued liabilities | 24,979 | 26,176 | 25,273 | 24,979 | ||||||||||||
Restructuring charge | 161 | 177 | 762 | 161 | ||||||||||||
Other | 6,225 | 3,065 | 10,588 | 6,225 | ||||||||||||
Total deferred tax assets | 213,490 | 243,915 | 224,465 | 213,490 | ||||||||||||
Valuation allowances | (22,138 | ) | (33,733 | ) | (17,208 | ) | (22,138 | ) | ||||||||
Net deferred tax assets | 191,352 | 210,182 | 207,257 | 191,352 | ||||||||||||
Deferred tax liabilities related to: | ||||||||||||||||
Property, plant and equipment | (25,543 | ) | (34,945 | ) | (13,789 | ) | (25,543 | ) | ||||||||
Goodwill and intangibles | (61,990 | ) | (49,919 | ) | (65,396 | ) | (61,990 | ) | ||||||||
Unrealized foreign exchange gain | (28,435 | ) | (26,670 | ) | 3,825 | (28,435 | ) | |||||||||
Foreign losses subject to recapture | (5 | ) | (9,802 | ) | — | (5 | ) | |||||||||
Foreign equity investments | (6,459 | ) | (9,583 | ) | (4,501 | ) | (6,459 | ) | ||||||||
Total deferred tax liabilities | (122,432 | ) | (130,919 | ) | (79,861 | ) | (122,432 | ) | ||||||||
Deferred tax assets, net | $ | 68,920 | $ | 79,263 | $ | 127,396 | $ | 68,920 | ||||||||
104
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(Amounts in thousands) | ||||||||||||
U.S | $ | 91,348 | $ | 59,542 | $ | (32,978 | ) | |||||
Non-U.S | 268,720 | 127,734 | 124,980 | |||||||||
Total | $ | 360,068 | $ | 187,276 | $ | 92,002 | ||||||
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(Amounts in thousands) | ||||||||||||
U.S. | $ | 129,323 | $ | 91,348 | $ | 59,542 | ||||||
Non-U.S. | 460,811 | 268,720 | 127,734 | |||||||||
Total | $ | 590,134 | $ | 360,068 | $ | 187,276 | ||||||
101
105
Balance — January 1, 2007 | $ | 114.9 | ||||||||||
2008 | 2007 | |||||||||||
Balance — January 1 | $ | 145.0 | $ | 114.9 | ||||||||
Gross amount of increases and decreases in unrecognized tax benefits resulting from tax positions taken: | ||||||||||||
During a prior year | 13.7 | 11.3 | 13.7 | |||||||||
During the current period | 12.6 | 22.3 | 12.6 | |||||||||
Decreases in unrecognized tax benefits relating to: | ||||||||||||
Settlements with taxing authorities | (2.1 | ) | (0.9 | ) | (2.1 | ) | ||||||
Lapse of the applicable statute of limitations | (1.6 | ) | (43.6 | ) | (1.6 | ) | ||||||
Increases in unrecognized tax benefits relating to foreign currency translation adjustments | 7.5 | |||||||||||
(Decreases) increases in unrecognized tax benefits relating to foreign currency translation adjustments | (3.3 | ) | 7.5 | |||||||||
Balance — December 31, 2007 | $ | 145.0 | ||||||||||
Balance — December 31 | $ | 130.8 | $ | 145.0 | ||||||||
BUSINESS SEGMENT INFORMATION |
102
• | Flowserve Pump Division; | |
• | Flow Control Division; and | |
• | Flow Solutions Division. |
106
Subtotal — | Subtotal — | |||||||||||||||||||||||||||||||||||||||||||||||
Flowserve | Flow | Flow | Reportable | Consolidated | Flowserve | Flow | Flow | Reportable | Consolidated | |||||||||||||||||||||||||||||||||||||||
Pump | Control | Solutions | Segments | All Other | Total | Pump | Control | Solutions | Segments | All Other(1) | Total | |||||||||||||||||||||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2007: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2008: | ||||||||||||||||||||||||||||||||||||||||||||||||
Sales to external customers | $ | 2,093,856 | $ | 1,156,738 | $ | 506,053 | $ | 3,756,647 | $ | 6,047 | $ | 3,762,694 | $ | 2,512,826 | $ | 1,375,187 | $ | 580,069 | $ | 4,468,082 | $ | 5,391 | $ | 4,473,473 | ||||||||||||||||||||||||
Intersegment sales | 1,510 | 6,431 | 58,447 | 66,388 | (66,388 | ) | — | 1,960 | 6,509 | 73,610 | 82,079 | (82,079 | ) | — | ||||||||||||||||||||||||||||||||||
Segment operating income | 274,196 | 163,654 | 111,532 | 549,382 | (139,466 | ) | 409,916 | 390,985 | 218,433 | 127,252 | 736,670 | (123,798 | ) | 612,872 | ||||||||||||||||||||||||||||||||||
Depreciation and amortization | 33,709 | 25,789 | 7,825 | 67,323 | 10,388 | 77,711 | 37,826 | 26,485 | 8,533 | 72,844 | 8,598 | 81,442 | ||||||||||||||||||||||||||||||||||||
Identifiable assets | 1,792,864 | 988,416 | 292,439 | 3,073,719 | 446,702 | 3,520,421 | 2,039,719 | 1,049,974 | 318,953 | 3,408,646 | 615,048 | 4,023,694 | ||||||||||||||||||||||||||||||||||||
Capital expenditures | 48,284 | 19,092 | 11,168 | 78,544 | 10,431 | 88,975 | 55,319 | 41,195 | 16,665 | 113,179 | 13,753 | 126,932 |
Subtotal — | ||||||||||||||||||||||||
Flowserve | Flow | Flow | Reportable | Consolidated | ||||||||||||||||||||
Pump | Control | Solutions | Segments | All Other(1) | Total | |||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||
Year Ended December 31, 2007: | ||||||||||||||||||||||||
Sales to external customers | $ | 2,093,856 | $ | 1,156,738 | $ | 506,053 | $ | 3,756,647 | $ | 6,047 | $ | 3,762,694 | ||||||||||||
Intersegment sales | 1,510 | 6,431 | 58,447 | 66,388 | (66,388 | ) | — | |||||||||||||||||
Segment operating income | 274,196 | 163,654 | 111,532 | 549,382 | (139,466 | ) | 409,916 | |||||||||||||||||
Depreciation and amortization | 33,709 | 25,789 | 7,825 | 67,323 | 10,388 | 77,711 | ||||||||||||||||||
Identifiable assets | 1,792,864 | 988,416 | 292,439 | 3,073,719 | 446,702 | 3,520,421 | ||||||||||||||||||
Capital expenditures | 48,284 | 19,092 | 11,168 | 78,544 | 10,431 | 88,975 |
Subtotal — | ||||||||||||||||||||||||
Flowserve | Flow | Flow | Reportable | Consolidated | ||||||||||||||||||||
Pump | Control | Solutions | Segments | All Other | Total | |||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||
Year Ended December 31, 2006: | ||||||||||||||||||||||||
Sales to external customers | $ | 1,613,611 | $ | 991,862 | $ | 450,502 | $ | 3,055,975 | $ | 5,088 | $ | 3,061,063 | ||||||||||||
Intersegment sales | 4,113 | 2,972 | 46,118 | 53,203 | (53,203 | ) | — | |||||||||||||||||
Segment operating income | 172,724 | 115,869 | 98,525 | 387,118 | (147,499 | ) | 239,619 | |||||||||||||||||
Depreciation and amortization | 31,269 | 25,920 | 6,514 | 63,703 | 7,293 | 70,996 | ||||||||||||||||||
Identifiable assets | 1,508,472 | 925,673 | 252,504 | 2,686,649 | 182,586 | 2,869,235 | ||||||||||||||||||
Capital expenditures | 29,731 | 18,251 | 15,389 | 63,371 | 10,157 | 73,528 |
(1) | The increase in identifiable assets for “All Other” in 2008 and 2007 is primarily a result of increased cash balances. |
103107
Subtotal — | ||||||||||||||||||||||||
Flowserve | Flow | Flow | Reportable | Consolidated | ||||||||||||||||||||
Pump | Control | Solutions | Segments | All Other | Total | |||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||
Year Ended December 31, 2005: | ||||||||||||||||||||||||
Sales to external customers | $ | 1,394,545 | $ | 889,608 | $ | 406,093 | $ | 2,690,246 | $ | 5,031 | $ | 2,695,277 | ||||||||||||
Intersegment sales | 3,901 | 4,681 | 37,548 | 46,130 | (46,130 | ) | — | |||||||||||||||||
Segment operating income | 149,823 | 92,057 | 87,512 | 329,392 | (130,569 | ) | 198,823 | |||||||||||||||||
Depreciation and amortization | 32,597 | 25,497 | 6,053 | 64,147 | 5,741 | 69,888 | ||||||||||||||||||
Identifiable assets | 1,324,826 | 880,714 | 208,763 | 2,414,303 | 199,361 | 2,613,664 | ||||||||||||||||||
Capital expenditures | 18,012 | 11,418 | 7,153 | 36,583 | 12,688 | 49,271 |
Year Ended December 31, 2008 | ||||||||||||||||
Long-Lived | ||||||||||||||||
Sales | Percentage | Assets | Percentage | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
United States | $ | 1,547,448 | 34.6 | % | $ | 1,062,577 | 64.1 | % | ||||||||
Europe(1) | 2,119,196 | 47.4 | % | 446,153 | 26.9 | % | ||||||||||
Other(2) | 806,829 | 18.0 | % | 149,978 | 9.0 | % | ||||||||||
Consolidated total | 4,473,473 | 100.0 | % | 1,658,708 | 100.0 | % | ||||||||||
Year Ended December 31, 2007 | ||||||||||||||||
Long-Lived | ||||||||||||||||
Sales | Percentage | Assets | Percentage | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
United States | $ | 1,381,981 | 36.7 | % | $ | 1,020,708 | 63.4 | % | ||||||||
Europe(1) | 1,767,418 | 47.0 | % | 449,343 | 27.9 | % | ||||||||||
Other(2) | 613,295 | 16.3 | % | 139,783 | 8.7 | % | ||||||||||
Consolidated total | $ | 3,762,694 | 100.0 | % | $ | 1,609,834 | 100.0 | % | ||||||||
Year Ended December 31, 2006 | ||||||||||||||||
Long-Lived | ||||||||||||||||
Sales | Percentage | Assets | Percentage | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
United States | $ | 1,213,636 | 39.6 | % | $ | 1,006,965 | 65.4 | % | ||||||||
Europe(1) | 1,354,212 | 44.3 | % | 423,570 | 27.5 | % | ||||||||||
Other(2) | 493,215 | 16.1 | % | 110,088 | 7.1 | % | ||||||||||
Consolidated total | $ | 3,061,063 | 100.0 | % | $ | 1,540,623 | 100.0 | % | ||||||||
Year Ended December 31, 2005 | ||||||||||||||||
Long-Lived | ||||||||||||||||
Sales | Percentage | Assets | Percentage | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
United States | $ | 1,076,043 | 39.9 | % | $ | 999,782 | 68.0 | % | ||||||||
Europe(1) | 1,183,139 | 43.9 | % | 383,349 | 26.1 | % | ||||||||||
Other(2) | 436,095 | 16.2 | % | 86,947 | 5.9 | % | ||||||||||
Consolidated total | $ | 2,695,277 | 100.0 | % | $ | 1,470,078 | 100.0 | % | ||||||||
(1) | In 2008, 2007 and 2006, Germany accounted for approximately 10% of consolidated sales. No individual country within this group represents | |
(2) |
104
108
ACCUMULATED OTHER COMPREHENSIVE LOSS |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2007(1) | 2006(1)(2) | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||
Foreign currency translation adjustments | $ | 50,368 | $ | 1,690 | $ | (37,230 | ) | $ | (75,485 | ) | $ | 50,368 | $ | 1,690 | ||||||||||
Pension and other postretirement effects | (69,100 | ) | (70,097 | ) | (93,983 | ) | (129,077 | ) | (69,100 | ) | (70,097 | ) | ||||||||||||
Adoption of SFAS No. 158 | — | (23,186 | ) | — | — | — | (23,186 | ) | ||||||||||||||||
Cash flow hedging activity | (2,652 | ) | 1,253 | 556 | (6,758 | ) | (2,652 | ) | 1,253 | |||||||||||||||
Accumulated other comprehensive loss | $ | (21,384 | ) | $ | (90,340 | ) | $ | (130,657 | ) | $ | (211,320 | ) | $ | (21,384 | ) | $ | (90,340 | ) | ||||||
(1) | The decrease in foreign currency translation adjustments in 2008 primarily represents a strengthening of the U.S. dollar exchange rate versus the Euro and the British pound at December 31, 2008 as compared with December 31, 2007. The increase in foreign currency translation adjustments in 2007 and 2006 is due primarily to the weakening of the U.S. dollar exchange rate versus the Euro. | |
(2) | The decrease in pension and other postretirement effects in |
Year Ended December 31, 2007 | Year Ended December 31, 2008 | |||||||||||||||||||||||
Before-Tax | After-Tax | Before-Tax | After-Tax | |||||||||||||||||||||
Amount | Income Tax | Amount | Amount | Income Tax | Amount | |||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||
Foreign currency translation adjustments | $ | 52,651 | $ | (3,973 | ) | $ | 48,678 | (127,687 | ) | 1,834 | $ | (125,853 | ) | |||||||||||
Pension and other postretirement effects | 35,033 | 10,850 | 24,183 | (97,731 | ) | 37,754 | (59,977 | ) | ||||||||||||||||
Cash flow hedging activity | (6,102 | ) | 2,197 | (3,905 | ) | (6,416 | ) | 2,310 | (4,106 | ) | ||||||||||||||
Other comprehensive income (expense) | $ | 81,582 | $ | 9,074 | $ | 68,956 | ||||||||||||||||||
Other comprehensive (expense) income | $ | (231,834 | ) | $ | 41,898 | $ | (189,936 | ) | ||||||||||||||||
Year Ended December 31, 2007 | ||||||||||||
Before-Tax | After-Tax | |||||||||||
Amount | Income Tax | Amount | ||||||||||
(Amounts in thousands) | ||||||||||||
Foreign currency translation adjustments | $ | 52,651 | $ | (3,973 | ) | $ | 48,678 | |||||
Pension and other postretirement effects | 35,033 | 10,850 | 24,183 | |||||||||
Cash flow hedging activity | (6,102 | ) | 2,197 | (3,905 | ) | |||||||
Other comprehensive income | $ | 81,582 | $ | 9,074 | $ | 68,956 | ||||||
Year Ended December 31, 2006 | ||||||||||||
Before-Tax | After-Tax | |||||||||||
Amount | Income Tax | Amount | ||||||||||
(Amounts in thousands) | ||||||||||||
Foreign currency translation adjustments | $ | 45,564 | $ | (6,644 | ) | $ | 38,920 | |||||
Pension and other postretirement effects | 32,571 | (8,685 | ) | 23,886 | ||||||||
Cash flow hedging activity | 994 | (297 | ) | 697 | ||||||||
Other comprehensive income (expense) | $ | 79,129 | $ | (15,626 | ) | $ | 63,503 | |||||
105109
Year Ended December 31, 2005 | ||||||||||||
Before-Tax | After-Tax | |||||||||||
Amount | Income Tax | Amount | ||||||||||
(Amounts in thousands) | ||||||||||||
Foreign currency translation adjustments | $ | (37,782 | ) | $ | 2,936 | $ | (34,846 | ) | ||||
Pension and other postretirement effects | (40,097 | ) | 8,216 | (31,881 | ) | |||||||
Cash flow hedging activity | 4,923 | (1,939 | ) | 2,984 | ||||||||
Other comprehensive income (expense) | $ | (72,956 | ) | $ | 9,213 | $ | (63,743 | ) | ||||
QUARTERLY FINANCIAL DATA (UNAUDITED) |
2007 | 2008 | |||||||||||||||||||||||||||||||
Quarter | 4th | 3rd | 2nd | 1st | 4th | 3rd | 2nd | 1st | ||||||||||||||||||||||||
Sales | $ | 1,109.4 | $ | 919.2 | $ | 930.7 | $ | 803.4 | $ | 1,169.0 | $ | 1,153.6 | $ | 1,157.6 | $ | 993.3 | ||||||||||||||||
Gross profit | 366.2 | 313.6 | 302.4 | 265.5 | 411.6 | 404.9 | 418.0 | 345.8 | ||||||||||||||||||||||||
Earnings before income taxes | 128.1 | 95.0 | 84.0 | 53.0 | 159.9 | 144.0 | 161.0 | 125.2 | ||||||||||||||||||||||||
Net earnings | 95.9 | 63.1 | 63.2 | 33.6 | 114.4 | 117.0 | 122.9 | 88.1 | ||||||||||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||||||||||
Basic | $ | 1.70 | $ | 1.12 | $ | 1.12 | $ | 0.60 | $ | 2.05 | $ | 2.06 | $ | 2.16 | $ | 1.55 | ||||||||||||||||
Diluted | $ | 1.67 | $ | 1.10 | $ | 1.11 | $ | 0.59 | 2.03 | 2.04 | 2.13 | 1.53 |
2006 | ||||||||||||||||
Quarter | 4th | 3rd | 2nd | 1st | ||||||||||||
Sales | $ | 883.5 | $ | 770.8 | $ | 752.9 | $ | 653.9 | ||||||||
Gross profit | 286.9 | 249.8 | 252.6 | 218.0 | ||||||||||||
Earnings before income taxes | 51.7 | 45.3 | 62.6 | 27.7 | ||||||||||||
Income from continuing operations | 33.3 | 28.5 | 33.6 | 18.6 | ||||||||||||
Gain from discontinued operations | 0.2 | 0.8 | — | — | ||||||||||||
Net earnings | 33.5 | 29.3 | 33.6 | 18.6 | ||||||||||||
Earnings per share (basic): | ||||||||||||||||
Continuing operations | $ | 0.59 | $ | 0.51 | $ | 0.60 | $ | 0.34 | ||||||||
Discontinued operations | — | 0.02 | — | — | ||||||||||||
Net earnings | $ | 0.59 | $ | 0.53 | $ | 0.60 | $ | 0.34 | ||||||||
Earnings per share (diluted): | ||||||||||||||||
Continuing operations | $ | 0.58 | $ | 0.49 | $ | 0.58 | $ | 0.32 | ||||||||
Discontinued operations | — | 0.02 | — | — | ||||||||||||
Net earnings | $ | 0.58 | $ | 0.51 | $ | 0.58 | $ | 0.32 | ||||||||
2007 | ||||||||||||||||
Quarter | 4th | 3rd | 2nd | 1st | ||||||||||||
Sales | $ | 1,109.4 | $ | 919.2 | $ | 930.7 | $ | 803.4 | ||||||||
Gross profit | 366.2 | 313.6 | 302.4 | 265.5 | ||||||||||||
Earnings before income taxes | 128.1 | 95.0 | 84.0 | 53.0 | ||||||||||||
Net earnings | 95.9 | 63.1 | 63.2 | 33.6 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 1.70 | $ | 1.12 | $ | 1.12 | $ | 0.60 | ||||||||
Diluted | 1.67 | 1.10 | 1.11 | 0.59 |
106
SUBSEQUENT EVENTS |
107110
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL |
ITEM 9A. | CONTROLS AND PROCEDURES |
111
108
ITEM 9B. | OTHER |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. |
ITEM 11. | EXECUTIVE COMPENSATION. |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. |
ITEM 14. | PRINCIPAL |
112
ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES. |
Schedule II — Valuation and Qualifying Accounts | F-1 |
109
110
Exhibit | ||||
No. | Description | |||
3 | .1 | Restated Certificate of Incorporation of Flowserve Corporation, filed as Exhibit 3.(i) to Flowserve Corporation’s Current Report onForm 8-K/A, dated August 16, 2006. | ||
3 | .2 | Amended and Restated By-Laws of Flowserve Corporation, effective as of January 1, 2008 and filed as Exhibit 2.1 to Flowserve Corporation’s Current Report onForm 8-K, dated December 19, 2007. | ||
4 | .1 | Lease agreement and indenture, dated as of January 1, 1995 and bond purchase agreement, dated January 27, 1995, in connection with an 8% Taxable Industrial Development Revenue Bond, City of Albuquerque, New Mexico. (Relates to a class of indebtedness that does not exceed 10% of the total assets of the Company. The Company will furnish a copy of the documents to the Commission upon request.) | ||
10 | .1 | Credit Agreement, dated as of August 12, 2005, among the Company, the lenders referred therein, and Bank of America, N.A., as swingline lender, administrative agent and collateral agent, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K, dated as of August 17, 2005. | ||
10 | .2 | Amendment and Waiver, dated December 20, 2005 and effective December 23, 2005, to that certain Credit Agreement, dated as of August 12, 2005, among the Company, the financial institutions from time to time party thereto, and Bank of America, N.A., as Swingline Lender, Administrative Agent and Collateral Agent, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K, dated as of December 30, 2005. | ||
10 | .3 | Second Amendment dated as of May 8, 2006 and effective as of May 16, 2006 to that certain Credit Agreement dated as of August 12, 2005, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K, dated as of May 19, 2006. | ||
10 | .4 | Third Amendment to Credit Agreement and First Amendment to Pledge Agreement dated as of August 7, 2007, among Flowserve Corporation, the lenders named therein and Bank of America, N.A., as administrative agent, swingline lender and collateral agent, filed as Exhibit 10.6 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended June 30, 2007. | ||
10 | .5 | Flowserve Corporation Director Cash Deferral Plan, as amended and restated in connection with the bifurcation of the Flowserve Corporation Director Deferral Plan, effective October 1, 2000, filed as Exhibit 10.3 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | ||
10 | .6 | Amendment to the Flowserve Corporation Amended and Restated Director Cash Deferral Plan, dated December 14, 2005, filed as Exhibit 10.67 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | ||
10 | .7 | Flowserve Corporation Director Stock Deferral Plan, as amended and restated in connection with the bifurcation of the Flowserve Corporation Director Deferral Plan, effective October 1, 2000, filed as Exhibit 10.3 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | ||
10 | .8 | First Master Benefit Trust Agreement, dated October 1, 1987, filed as Exhibit 10.24 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1987.* | ||
10 | .9 | Amendment No. 1 to the First Master Benefit Trust Agreement, dated October 1, 1987, filed as Exhibit 10.24 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1993.* | ||
10 | .10 | Amendment No. 2 to First Master Benefit Trust Agreement, dated October 1, 1987, filed as Exhibit 10.25 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1994.* | ||
10 | .11 | Amendment to Master Benefit Trust Agreement, filed as Exhibit 10.45 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | ||
10 | .12 | Amendment to The Duriron Company, Inc. First Master Benefit Trust Agreement, dated December 14, 2005, filed as Exhibit 10.66 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | ||
10 | .13 | Second Master Benefit Trust Agreement, dated October 1, 1987, filed as Exhibit 10.12 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1987.* | ||
10 | .14 | First Amendment to Second Master Benefit Trust Agreement, dated December 22, 1994, filed as Exhibit 10.26 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1994.* | ||
10 | .15 | Flowserve Corporation Long-Term Cash Incentive Plan, as amended and restated in connection with the bifurcation of the Flowserve Corporation Long-Term Incentive Plan, effective October 1, 2000, filed as Exhibit 10.10 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* |
111
Exhibit | ||||
No. | Description | |||
10 | .16 | Flowserve Corporation Long-Term Stock Incentive Plan, as amended and restated in connection with the bifurcation of the Flowserve Corporation Long-Term Incentive Plan, effective October 1, 2000, filed as Exhibit 10.10 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | ||
10 | .17 | 2007 Flowserve Corporation Long-Term Stock Incentive Plan, effective January 1, 2007, filed as Appendix A to the Company’s Proxy Statement, dated April 13, 2007.* | ||
10 | .18 | 2007 Flowserve Corporation Annual Incentive Plan, effective January 1, 2007, filed as Appendix B to the Company’s Proxy Statement, dated April 13, 2007.* | ||
10 | .19 | Flowserve Corporation Deferred Compensation Plan, filed as Exhibit 10.23 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | ||
10 | .20 | Amendment No. 1 to the Flowserve Corporation Deferred Compensation Plan, as amended and restated, effective June 1, 2000, filed as Exhibit 10.50 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2002.* | ||
10 | .21 | Amendment to the Flowserve Corporation Deferred Compensation Plan, dated December 14, 2005, filed as Exhibit 10.70 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | ||
10 | .22 | Amendment No. 3 to the Flowserve Corporation Deferred Compensation Plan, as amended and restated effective June 1, 2000 (filed herewith). | ||
10 | .23 | The Duriron Company, Inc. 1997 Stock Option Plan, attached as Exhibit A to the Company’s Proxy Statement, filed on March 17, 1997.* | ||
10 | .24 | First Amendment to the Flowserve Corporation 1997 Stock Option Plan, filed as Exhibit 10.28 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 1998* | ||
10 | .25 | Amendment No. 2 to the Flowserve Corporation 1997 Stock Option Plan, filed as Exhibit 10.29 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1999.* | ||
10 | .26 | Amendment No. 3 to the Flowserve Corporation 1997 Stock Option Plan, filed as Exhibit 10.29 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | ||
10 | .27 | Flowserve Corporation 1998 Restricted Stock Plan, attached as Appendix A to the Company’s 1999 Proxy Statement, filed on April 9, 1998.* | ||
10 | .28 | Amendment No. 1 to the Flowserve Corporation 1998 Restricted Stock Plan, filed as Exhibit 10 to the Company’s Quarterly Report onForm 10-Q for the quarter ended March 31, 1999.* | ||
10 | .29 | Amendment No. 2 to the Flowserve Corporation 1998 Restricted Stock Plan, filed as Exhibit 10.1 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 1999.* | ||
10 | .30 | Amendment No. 3 to the Flowserve Corporation 1998 Restricted Stock Plan, filed as Exhibit 10.37 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | ||
10 | .31 | Amendment No. 4 to the Flowserve Corporation 1998 Restricted Stock Plan, filed as Exhibit 10.1 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2001.* | ||
10 | .32 | Amendment No. 5 to the Flowserve Corporation 1998 Restricted Stock Plan, filed as Exhibit 4.16 to the Company’s Registration Statement onForm S-8, filed September 29, 2006.* | ||
10 | .33 | Flowserve Corporation 1998 Restricted Stock Dividend Plan, effective October 1, 2000, filed as Exhibit 10.38 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000. | ||
10 | .34 | Flowserve Corporation 1999 Stock Option Plan, attached as Exhibit A to the Company’s 1999 Proxy Statement, filed on March 15, 1999.* | ||
10 | .35 | Amendment No. 1 to the Flowserve Corporation 1999 Stock Option Plan, filed as Exhibit 10.31 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1999.* | ||
10 | .36 | Amendment No. 2 to the Flowserve Corporation 1999 Stock Option Plan, filed as Exhibit 10.32 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | ||
10 | .37 | Flowserve Corporation Officer Severance Plan, amended and restated effective January 1, 2007, filed as Exhibit 10.1 to the Company’s Quarterly Report onForm 10-K for the Quarter ended March 31, 2007.* | ||
10 | .38 | Flowserve Corporation Executive Officer Change In Control Severance Plan, amended and restated effective November 12, 2007 (filed herewith).* |
112
Exhibit | ||||
No. | Description | |||
10 | .39 | Flowserve Corporation Officer Change In Control Severance Plan, amended and restated effective November 12, 2007 (filed herewith).* | ||
10 | .40 | Flowserve Corporation Key Management Change In Control Severance Plan, amended and restated effective November 12, 2007 (filed herewith).* | ||
10 | .41 | Flowserve Corporation Executive Officer Life Insurance Plan, effective January 1, 2004, filed as Exhibit 10.51 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005.* | ||
10 | .42 | Flowserve Corporation Senior Management Retirement Plan, amended and restated effective January 1, 2008 (filed herewith).* | ||
10 | .43 | Flowserve Corporation Supplemental Executive Retirement Plan, amended and restated effective November 12, 2007 (filed herewith).* | ||
10 | .44 | Employment Extension Agreement between Flowserve Corporation and Lewis M. Kling, dated as of May 29, 2007, filed as Exhibit 10.1 to Flowserve Corporation’s Current Report onForm 8-K dated May 30, 2007.* | ||
10 | .45 | Employment Agreement between Flowserve Corporation and Mark A. Blinn, dated as of May 7, 2007, filed as Exhibit 10.2 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended March 31, 2007.* | ||
10 | .46 | Employment Agreement between the Company and Lewis M. Kling, dated July 28, 2005, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K, dated as of August 3, 2005.* | ||
10 | .47 | Flowserve Corporation 2004 Stock Compensation Plan, effective April 21, 2004, filed as Appendix A to the Company’s Proxy Statement, dated May 10, 2004.* | ||
10 | .48 | Form of Performance Restricted Stock Unit Agreement with non-competition covenant, pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan, filed as Exhibit 10.2 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended June 30, 2007.* | ||
10 | .49 | Form of Performance Restricted Stock Unit Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan, filed as Exhibit 10.3 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended June 30, 2007.* | ||
10 | .50 | Form of Restricted Stock Agreement with non-competition covenant, pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan, filed as Exhibit 10.4 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended June 30, 2007.* | ||
10 | .51 | Form of Restricted Stock Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan, filed as Exhibit 10.5 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended June 30, 2007.* | ||
10 | .52 | Form of Restricted Stock Agreement with total shareholder return and return on net assets performance measures, pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan, filed as Exhibit 10.6 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended June 30, 2007.* | ||
10 | .53 | Form of Restricted Stock Agreement pursuant to the Company’s 2004 Stock Compensation Plan, filed as Exhibit 10.59 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | ||
10 | .54 | Form of Incentive Stock Option Agreement pursuant to the Company’s 2004 Stock Compensation Plan, filed as Exhibit 10.60 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | ||
10 | .55 | Form of Non-Qualified Stock Option Agreement pursuant to the Company’s 2004 Stock Compensation Plan, filed as Exhibit 10.61 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | ||
10 | .56 | Form of Restricted Stock Agreement for certain officers pursuant to the Company’s 2004 Stock Compensation Plan, filed as Exhibit 10.3 to the Company’s Current Report onForm 8-K, dated as of March 9, 2006.* | ||
10 | .57 | Form of Incentive Stock Option Agreement for certain officers pursuant to the Company’s 2004 Stock Compensation Plan filed as Exhibit 10.4 to the Company’s Current Report onForm 8-K, dated March 9, 2006.* |
113
Exhibit | ||||
No. | Description | |||
10 | .58 | The Duriron Company, Inc. Incentive Compensation Plan for Key Employees as Amended and Restated, effective January 1, 1992, filed as Exhibit 10.68 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005.* | ||
10 | .59 | Amendment to The Duriron Company, Inc. Incentive Compensation Plan for Key Employees as Amended and Restated, effective January 1, 1992, dated December 14, 2005, filed as Exhibit 10.63 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | ||
10 | .60 | Duriron Equity Incentive Plan, as amended and restated effective July 21, 1995, filed as Exhibit 10.25 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1995.* | ||
10 | .61 | Duriron Company, Inc. Deferred Compensation Plan for Executives, filed as Exhibit 10.72 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005.* | ||
10 | .62 | Duriron Company, Inc. Deferred Compensation Plan for Directors, effective December 31, 1987, filed as Exhibit 10.73 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005.* | ||
10 | .63 | Flowserve Corporation Amended and Restated Non-Employee Directors’ Stock Option Plan, as amended and restated on December 29, 2005, filed as Exhibit 10.74 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005.* | ||
10 | .64 | Form of Restrictive Covenants Agreement entered into on March 6, 2006 between the Company and each of Linda P. Jojo, Thomas L. Pajonas and Paul W. Fehlman, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K, dated as of March 9, 2006.* | ||
10 | .65 | Form of Restrictive Covenants Agreement entered into on March 6, 2006 between the Company and each of Lewis M. Kling, Mark A. Blinn, Ronald F. Shuff, John H. Jacko, Jr., Mark D. Dailey, Thomas E. Ferguson, Andrew J. Beall, Jerry L. Rockstroh, Richard J. Guiltinan, Jr., and Deborah K. Bethune, filed as Exhibit 10.2 to the Company’s Current Report onForm 8-K, dated as of March 9, 2006.* | ||
14 | .1 | Flowserve Financial Management Code of Ethics adopted by the Company’s principal executive officer and CEO, principal financial officer and CFO, principal accounting officer and controller, and other senior financial managers filed as Exhibit 14.1 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2002. | ||
21 | .1 | Subsidiaries of the Company (filed herewith). | ||
23 | .1 | Consent of PricewaterhouseCoopers LLP (filed herewith). | ||
31 | .1 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | ||
31 | .2 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | ||
32 | .1 | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). | ||
32 | .2 | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). |
114
By: | /s/ Lewis M. Kling |
Signature | Title | Date | ||||
/s/ Kevin E. Sheehan Kevin E. Sheehan | Non-Executive Chairman of the Board | February | ||||
/s/ Lewis M. Kling Lewis M. Kling | President, Chief Executive Officer and Director (Principal Executive Officer) | February | ||||
/s/ Mark A. Blinn Mark A. Blinn | Senior Vice President, Chief Financial Officer and Latin America Operations (Principal Financial Officer) | February | ||||
/s/ Richard J. Guiltinan, Jr. Richard J. Guiltinan, Jr. | Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer) | February | ||||
/s/ Gayla J. Delly Gayla J. Delly | Director | February 25, 2009 | ||||
/s/ John R. Friedery John R. Friedery | Director | February 25, 2009 | ||||
/s/ Joseph E. Harlan Joseph E. Harlan | Director | February 25, 2009 | ||||
/s/ Michael F. Johnston Michael F. Johnston | Director | February | ||||
/s/ Rick J. Mills Rick J. Mills | Director | February 25, 2009 | ||||
/s/ James O. Rollans James O. Rollans | Director | February | ||||
115114
Column A | Column B | Column C | Column D | Column E | Column B | Column C | Column D | Column E | ||||||||||||||||||||||||||||||||
Additions | Additions | |||||||||||||||||||||||||||||||||||||||
Charged to | Charged to | |||||||||||||||||||||||||||||||||||||||
Other | Other | |||||||||||||||||||||||||||||||||||||||
Additions | Accounts— | Additions | Accounts— | |||||||||||||||||||||||||||||||||||||
Balance at | Charged to | Acquisitions | Balance at | Charged to | Acquisitions | Column E | ||||||||||||||||||||||||||||||||||
Beginning of | Cost and | and Related | Deductions | Balance at | Beginning of | Cost and | and Related | Deductions | Balance at | |||||||||||||||||||||||||||||||
Description | Year | Expenses | Adjustments | from Reserve | End of Year | Year | Expenses | Adjustments | From Reserve | end of Year | ||||||||||||||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||||||||||||||||||
Year ended December 31, 2008 | ||||||||||||||||||||||||||||||||||||||||
Allowance for doubtful accounts(a): | $ | 14,219 | $ | 21,457 | $ | — | $ | (12,009 | ) | $ | 23,667 | |||||||||||||||||||||||||||||
Deferred tax asset valuation allowance(b): | 22,138 | 3,564 | 1,620 | (10,114 | ) | 17,208 | ||||||||||||||||||||||||||||||||||
Year ended December 31, 2007: | ||||||||||||||||||||||||||||||||||||||||
Allowance for doubtful accounts(a): | $ | 13,135 | $ | 3,341 | $ | — | $ | (2,257 | ) | $ | 14,219 | 13,135 | 3,341 | — | (2,257 | ) | 14,219 | |||||||||||||||||||||||
Deferred tax asset valuation allowance(b): | $ | 33,733 | $ | 6,922 | $ | (574 | ) | $ | (17,943 | ) | $ | 22,138 | 33,733 | 6,922 | (574 | ) | (17,943 | ) | 22,138 | |||||||||||||||||||||
Year ended December 31, 2006: | ||||||||||||||||||||||||||||||||||||||||
Allowance for doubtful accounts(a): | $ | 14,271 | $ | 1,148 | $ | — | $ | (2,284 | ) | $ | 13,135 | 14,271 | 1,148 | — | (2,284 | ) | 13,135 | |||||||||||||||||||||||
Deferred tax asset valuation allowance(b): | $ | 30,401 | $ | 6,036 | $ | — | $ | (2,704 | ) | $ | 33,733 | 30,401 | 6,036 | — | (2,704 | ) | 33,733 | |||||||||||||||||||||||
Year ended December 31, 2005: | ||||||||||||||||||||||||||||||||||||||||
Allowance for doubtful accounts(a): | $ | 7,281 | $ | 3,594 | $ | 3,431 | $ | (35 | ) | $ | 14,271 | |||||||||||||||||||||||||||||
Deferred tax asset valuation allowance(b): | $ | 34,208 | $ | 3,999 | $ | 3,304 | $ | (11,110 | ) | �� | $ | 30,401 |
(a) | Deductions from reserve represent accounts written off, net of recoveries, and reductions due to improved aging of receivables. | |
(b) | Deductions from reserve result from the expiration or utilization of net operating losses and foreign tax credits previously reserved. |
F-1
Exhibit | Exhibit | Exhibit | ||||||
No. | No. | Description | No. | Description | ||||
3 | .1 | Restated Certificate of Incorporation of Flowserve Corporation, filed as Exhibit 3.(i) to Flowserve Corporation’s Current Report onForm 8-K/A, dated August 16, 2006. | 3 | .1 | Restated Certificate of Incorporation of Flowserve Corporation (incorporated by reference to Exhibit 3.(i) to the Registrant’s Current Report onForm 8-K/A, dated August 16, 2006). | |||
3 | .2 | Amended and Restated By-Laws of Flowserve Corporation, effective as of January 1, 2008 and filed as Exhibit 2.1 to Flowserve Corporation’s Current Report onForm 8-K, dated December 19, 2007. | 3 | .2 | Amended and Restated By-Laws of Flowserve Corporation, effective as of November 20, 2008 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report onForm 8-K, dated November 21, 2008). | |||
4 | .1 | Lease agreement and indenture, dated as of January 1, 1995 and bond purchase agreement, dated January 27, 1995, in connection with an 8% Taxable Industrial Development Revenue Bond, City of Albuquerque, New Mexico. (Relates to a class of indebtedness that does not exceed 10% of the total assets of the Company. The Company will furnish a copy of the documents to the Commission upon request.) | 4 | .1 | Lease agreement and indenture, dated as of January 1, 1995 and bond purchase agreement, dated January 27, 1995, in connection with an 8% Taxable Industrial Development Revenue Bond, City of Albuquerque, New Mexico. (Relates to a class of indebtedness that does not exceed 10% of the total assets of the Company. The Company will furnish a copy of the documents to the Commission upon request.) | |||
10 | .1 | Credit Agreement, dated as of August 12, 2005, among the Company, the lenders referred therein, and Bank of America, N.A., as swingline lender, administrative agent and collateral agent, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K, dated as of August 17, 2005. | 10 | .1 | Credit Agreement, dated as of August 12, 2005, among the Company, the lenders referred therein, and Bank of America, N.A., as swingline lender, administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report onForm 8-K, dated August 17, 2005). | |||
10 | .2 | Amendment and Waiver, dated December 20, 2005 and effective December 23, 2005, to that certain Credit Agreement, dated as of August 12, 2005, among the Company, the financial institutions from time to time party thereto, and Bank of America, N.A., as Swingline Lender, Administrative Agent and Collateral Agent, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K, dated as of December 30, 2005. | 10 | .2 | Amendment and Waiver, dated December 20, 2005 and effective December 23, 2005, to that certain Credit Agreement, dated as of August 12, 2005, among the Company, the financial institutions from time to time party thereto, and Bank of America, N.A., as Swingline Lender, Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report onForm 8-K, dated December 30, 2005). | |||
10 | .3 | Second Amendment dated as of May 8, 2006 and effective as of May 16, 2006 to that certain Credit Agreement dated as of August 12, 2005, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K, dated as of May 19, 2006. | 10 | .3 | Second Amendment dated as of May 8, 2006 and effective as of May 16, 2006 to that certain Credit Agreement dated as of August 12, 2005 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report onForm 8-K, dated as of May 19, 2006). | |||
10 | .4 | Third Amendment to Credit Agreement and First Amendment to Pledge Agreement dated as of August 7, 2007, among Flowserve Corporation, the lenders named therein and Bank of America, N.A., as administrative agent, swingline lender and collateral agent, filed as Exhibit 10.6 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended June 30, 2007. | 10 | .4 | Third Amendment to Credit Agreement and First Amendment to Pledge Agreement dated as of August 7, 2007, among Flowserve Corporation, the lenders named therein and Bank of America, N.A., as administrative agent, swingline lender and collateral agent (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2007). | |||
10 | .5 | Flowserve Corporation Director Cash Deferral Plan, as amended and restated in connection with the bifurcation of the Flowserve Corporation Director Deferral Plan, effective October 1, 2000, filed as Exhibit 10.3 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | 10 | .5 | Letter of Credit Agreement, dated as of September 14, 2007 among Flowserve B.V., as an Applicant, Flowserve Corporation, as an Applicant and as Guarantor, the Additional Applicants from time to time as a party hereto, the various Lenders from time to time party as a hereto, and ABN AMRO Bank, N.V., as Administrative Agent and an Issuing Bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report onForm 8-K, dated September 19, 2007). | |||
10 | .6 | Amendment to the Flowserve Corporation Amended and Restated Director Cash Deferral Plan, dated December 14, 2005, filed as Exhibit 10.67 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | 10 | .6 | First Amendment to Letter of Credit Agreement, dated as of September 11, 2008 among Flowserve Corporation, Flowserve B.V. and other subsidiaries of the Company party thereto, ABN AMRO Bank, N.V., as Administrative Agent and an Issuing Bank, and the other financial institutions party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report onForm 8-K, dated September 16, 2008). | |||
10 | .7 | Flowserve Corporation Director Stock Deferral Plan, as amended and restated in connection with the bifurcation of the Flowserve Corporation Director Deferral Plan, effective October 1, 2000, filed as Exhibit 10.3 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | 10 | .7+ | Amended and Restated Flowserve Corporation Director Cash Deferral Plan, effective January 1, 2009.* | |||
10 | .8 | First Master Benefit Trust Agreement, dated October 1, 1987, filed as Exhibit 10.24 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1987.* | 10 | .8+ | Amended and Restated Flowserve Corporation Director Stock Deferral Plan, dated effective January 1, 2009.* | |||
10 | .9 | Amendment No. 1 to the First Master Benefit Trust Agreement, dated October 1, 1987, filed as Exhibit 10.24 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1993.* | 10 | .9 | First Master Benefit Trust Agreement, dated October 1, 1987 (incorporated by reference to Exhibit 10.24 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 1987).* | |||
10 | .10 | Amendment No. 2 to First Master Benefit Trust Agreement, dated October 1, 1987, filed as Exhibit 10.25 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1994.* | 10 | .10 | Amendment No. 1 to the First Master Benefit Trust Agreement, dated October 1, 1987 (incorporated by reference to Exhibit 10.24 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 1993).* | |||
10 | .11 | Amendment to Master Benefit Trust Agreement, filed as Exhibit 10.45 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | 10 | .11 | Amendment No. 2 to First Master Benefit Trust Agreement, dated October 1, 1987 (incorporated by reference to Exhibit 10.25 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 1994).* | |||
10 | .12 | Amendment to The Duriron Company, Inc. First Master Benefit Trust Agreement, dated December 14, 2005, filed as Exhibit 10.66 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | 10 | .12 | Amendment to Master Benefit Trust Agreement (incorporated by reference to Exhibit 10.45 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2000).* | |||
10 | .13 | Second Master Benefit Trust Agreement, dated October 1, 1987, filed as Exhibit 10.12 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1987.* | 10 | .13 | Amendment to The Duriron Company, Inc. First Master Benefit Trust Agreement, dated December 14, 2005 (incorporated by reference to Exhibit 10.66 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2004).* | |||
10 | .14 | First Amendment to Second Master Benefit Trust Agreement, dated December 22, 1994, filed as Exhibit 10.26 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1994.* | 10 | .14 | Second Master Benefit Trust Agreement, dated October 1, 1987 (incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 1987).* | |||
10 | .15 | Flowserve Corporation Long-Term Cash Incentive Plan, as amended and restated in connection with the bifurcation of the Flowserve Corporation Long-Term Incentive Plan, effective October 1, 2000, filed as Exhibit 10.10 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* |
Exhibit | Exhibit | Exhibit | ||||||
No. | No. | Description | No. | Description | ||||
10 | .16 | Flowserve Corporation Long-Term Stock Incentive Plan, as amended and restated in connection with the bifurcation of the Flowserve Corporation Long-Term Incentive Plan, effective October 1, 2000, filed as Exhibit 10.10 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | 10 | .15 | First Amendment to Second Master Benefit Trust Agreement, dated December 22, 1994 (incorporated by reference to Exhibit 10.26 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 1994).* | |||
10 | .17 | 2007 Flowserve Corporation Long-Term Stock Incentive Plan, effective January 1, 2007, filed as Appendix A to the Company’s Proxy Statement, dated April 13, 2007.* | 10 | .16+ | Amendment to The Duriron Company, Inc. First Master Benefit Trust Agreement and The Duriron, Inc. Second Master Benefit Trust Agreement, dated December 22, 2008.* | |||
10 | .18 | 2007 Flowserve Corporation Annual Incentive Plan, effective January 1, 2007, filed as Appendix B to the Company’s Proxy Statement, dated April 13, 2007.* | 10 | .17 | Flowserve Corporation Long-Term Cash Incentive Plan, as amended and restated in connection with the bifurcation of the Flowserve Corporation Long-Term Incentive Plan, effective October 1, 2000 (incorporated by reference to Exhibit 10.10 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2000).* | |||
10 | .19 | Flowserve Corporation Deferred Compensation Plan, filed as Exhibit 10.23 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | 10 | .18 | Flowserve Corporation Long-Term Stock Incentive Plan, as amended and restated in connection with the bifurcation of the Flowserve Corporation Long-Term Incentive Plan, effective October 1, 2000 (incorporated by reference to Exhibit 10.10 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2000).* | |||
10 | .20 | Amendment No. 1 to the Flowserve Corporation Deferred Compensation Plan, as amended and restated, effective June 1, 2000, filed as Exhibit 10.50 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2002.* | 10 | .19 | 2007 Flowserve Corporation Long-Term Stock Incentive Plan, effective January 1, 2007 (incorporated by reference to Appendix A to the Registrant’s Proxy Statement, dated April 13, 2007).* | |||
10 | .21 | Amendment to the Flowserve Corporation Deferred Compensation Plan, dated December 14, 2005, filed as Exhibit 10.70 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | 10 | .20 | 2007 Flowserve Corporation Annual Incentive Plan, effective January 1, 2007 (incorporated by reference to Appendix B to the Registrant’s Proxy Statement, dated April 13, 2007).* | |||
10 | .22 | Amendment No. 3 to the Flowserve Corporation Deferred Compensation Plan, as amended and restated effective June 1, 2000 (filed herewith). | 10 | .21+ | Amendment Number One to the 2007 Flowserve Corporation Annual Incentive Plan, dated December 18, 2008.* | |||
10 | .23 | The Duriron Company, Inc. 1997 Stock Option Plan, attached as Exhibit A to the Company’s Proxy Statement, filed on March 17, 1997.* | 10 | .22 | Flowserve Corporation Deferred Compensation Plan (incorporated by reference to Exhibit 10.23 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2000).* | |||
10 | .24 | First Amendment to the Flowserve Corporation 1997 Stock Option Plan, filed as Exhibit 10.28 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 1998* | 10 | .23 | Amendment No. 1 to the Flowserve Corporation Deferred Compensation Plan, as amended and restated, effective June 1, 2000 (incorporated by reference to Exhibit 10.50 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2002).* | |||
10 | .25 | Amendment No. 2 to the Flowserve Corporation 1997 Stock Option Plan, filed as Exhibit 10.29 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1999.* | 10 | .24 | Amendment to the Flowserve Corporation Deferred Compensation Plan, dated December 14, 2005 (incorporated by reference to Exhibit 10.70 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2004).* | |||
10 | .26 | Amendment No. 3 to the Flowserve Corporation 1997 Stock Option Plan, filed as Exhibit 10.29 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | 10 | .25 | Amendment No. 3 to the Flowserve Corporation Deferred Compensation Plan, as amended and restated effective June 1, 2000 (incorporated by reference to Exhibit 10.22 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2007).* | |||
10 | .27 | Flowserve Corporation 1998 Restricted Stock Plan, attached as Appendix A to the Company’s 1999 Proxy Statement, filed on April 9, 1998.* | 10 | .26 | Flowserve Corporation 1999 Stock Option Plan (incorporated by reference to Exhibit A to the Registrant’s 1999 Proxy Statement, filed on March 15, 1999).* | |||
10 | .28 | Amendment No. 1 to the Flowserve Corporation 1998 Restricted Stock Plan, filed as Exhibit 10 to the Company’s Quarterly Report onForm 10-Q for the quarter ended March 31, 1999.* | 10 | .27 | Amendment No. 1 to the Flowserve Corporation 1999 Stock Option Plan (incorporated by reference to Exhibit 10.31 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 1999).* | |||
10 | .29 | Amendment No. 2 to the Flowserve Corporation 1998 Restricted Stock Plan, filed as Exhibit 10.1 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 1999.* | 10 | .28 | Amendment No. 2 to the Flowserve Corporation 1999 Stock Option Plan (incorporated by reference to Exhibit 10.32 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2000).* | |||
10 | .30 | Amendment No. 3 to the Flowserve Corporation 1998 Restricted Stock Plan, filed as Exhibit 10.37 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | 10 | .29 | Amendment No. 3 to the Flowserve Corporation 1999 Stock Option Plan (incorporated by reference to Exhibit 10.12 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2008).* | |||
10 | .31 | Amendment No. 4 to the Flowserve Corporation 1998 Restricted Stock Plan, filed as Exhibit 10.1 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2001.* | 10 | .30+ | Flowserve Corporation Officer Severance Plan, amended and restated effective January 1, 2009.* | |||
10 | .32 | Amendment No. 5 to the Flowserve Corporation 1998 Restricted Stock Plan, filed as Exhibit 4.16 to the Company’s Registration Statement onForm S-8, filed September 29, 2006.* | 10 | .31 | Flowserve Corporation Executive Officer Change In Control Severance Plan, amended and restated effective November 12, 2007 (incorporated by reference to Exhibit 10.38 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2007).* | |||
10 | .33 | Flowserve Corporation 1998 Restricted Stock Dividend Plan, effective October 1, 2000, filed as Exhibit 10.38 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000 | 10 | .32 | Flowserve Corporation Officer Change In Control Severance Plan, amended and restated effective November 12, 2007 (incorporated by reference to Exhibit 10.39 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2007).* | |||
10 | .34 | Flowserve Corporation 1999 Stock Option Plan, attached as Exhibit A to the Company’s 1999 Proxy Statement, filed on March 15, 1999.* | 10 | .33 | Flowserve Corporation Key Management Change In Control Severance Plan, amended and restated effective November 12, 2007 (incorporated by reference to Exhibit 10.40 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2007).* | |||
10 | .35 | Amendment No. 1 to the Flowserve Corporation 1999 Stock Option Plan, filed as Exhibit 10.31 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1999.* | 10 | .34 | Flowserve Corporation Senior Management Retirement Plan, amended and restated effective January 1, 2008 (incorporated by reference to Exhibit 10.42 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2007).* | |||
10 | .36 | Amendment No. 2 to the Flowserve Corporation 1999 Stock Option Plan, filed as Exhibit 10.32 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000.* | ||||||
10 | .37 | Flowserve Corporation Officer Severance Plan, amended and restated effective January 1, 2007, filed as Exhibit 10.1 to the Company’s Quarterly Report onForm 10-K for the Quarter ended March 31, 2007.* | ||||||
10 | .38 | Flowserve Corporation Executive Officer Change In Control Severance Plan, amended and restated effective November 12, 2007 (filed herewith).* | ||||||
10 | .39 | Flowserve Corporation Officer Change In Control Severance Plan, amended and restated effective November 12, 2007 (filed herewith).* |
Exhibit | Exhibit | Exhibit | ||||||
No. | No. | Description | No. | Description | ||||
10 | .40 | Flowserve Corporation Key Management Change In Control Severance Plan, amended and restated effective November 12, 2007 (filed herewith).* | 10 | .35 | Flowserve Corporation Supplemental Executive Retirement Plan, amended and restated effective November 12, 2007 (incorporated by reference to Exhibit 10.43 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2007).* | |||
10 | .41 | Flowserve Corporation Executive Officer Life Insurance Plan, effective January 1, 2004, filed as Exhibit 10.51 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005.* | 10 | .36 | Employment Agreement between Flowserve Corporation and Mark A. Blinn, dated as of May 7, 2007 (incorporated by reference to Exhibit 10.2 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended March 31, 2007).* | |||
10 | .42 | Flowserve Corporation Senior Management Retirement Plan, amended and restated effective January 1, 2008 (filed herewith).* | 10 | .37+ | Amendment Number One to the Mark Blinn Employment Agreement between Flowserve Corporation and Mark A. Blinn, dated November 19, 2008.* | |||
10 | .43 | Flowserve Corporation Supplemental Executive Retirement Plan, amended and restated effective November 12, 2007 (filed herewith).* | 10 | .38+ | Amendment Number Two to the Mark Blinn Employment Agreement between Flowserve Corporation and Mark A. Blinn, dated February 23, 2009.* | |||
10 | .44 | Employment Extension Agreement between Flowserve Corporation and Lewis M. Kling, dated as of May 29, 2007, filed as Exhibit 10.1 to Flowserve Corporation’s Current Report onForm 8-K dated May 30, 2007.* | 10 | .39 | Employment Agreement between Flowserve Corporation and Lewis M. Kling, dated July 28, 2005 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report onForm 8-K, dated as of August 3, 2005).* | |||
10 | .45 | Employment Agreement between Flowserve Corporation and Mark A. Blinn, dated as of May 7, 2007, filed as Exhibit 10.2 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended March 31, 2007.* | 10 | .40 | Employment Extension Agreement between Flowserve Corporation and Lewis M. Kling, dated as of May 29, 2007 (incorporated by reference to Exhibit 10.1 to Flowserve Corporation’s Current Report onForm 8-K dated May 30, 2007).* | |||
10 | .46 | Employment Agreement between the Company and Lewis M. Kling, dated July 28, 2005, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K, dated as of August 3, 2005.* | 10 | .41+ | Amendment to Employment Agreement between Flowserve Corporation and Lewis M. Kling, dated November 19, 2008.* | |||
10 | .47 | Flowserve Corporation 2004 Stock Compensation Plan, effective April 21, 2004, filed as Appendix A to the Company’s Proxy Statement, dated May 10, 2004.* | 10 | .42 | Flowserve Corporation 2004 Stock Compensation Plan, effective April 21, 2004 (incorporated by reference to Appendix A to the Registrant’s 2004 Proxy Statement, dated May 10, 2004).* | |||
10 | .48 | Form of Performance Restricted Stock Unit Agreement with non-competition covenant, pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan, filed as Exhibit 10.2 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended June 30, 2007.* | 10 | .43 | Amendment Number One to the Flowserve Corporation 2004 Stock Compensation Plan, effective March 6, 2008 (incorporated by reference to Exhibit 10.10 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2008).* | |||
10 | .49 | Form of Performance Restricted Stock Unit Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan, filed as Exhibit 10.3 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended June 30, 2007.* | 10 | .44 | Amendment Number Two to the Flowserve Corporation 2004 Stock Compensation Plan, effective March 7, 2008 (incorporated by reference to Exhibit 10.11 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2008).* | |||
10 | .50 | Form of Restricted Stock Agreement with non-competition covenant, pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan, filed as Exhibit 10.4 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended June 30, 2007.* | 10 | .45 | Form of Performance Restricted Stock Unit Agreement with non-competition covenant, pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2007).* | |||
10 | .51 | Form of Restricted Stock Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan, filed as Exhibit 10.5 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended June 30, 2007.* | 10 | .46 | Form of Performance Restricted Stock Unit Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2007).* | |||
10 | .52 | Form of Restricted Stock Agreement with total shareholder return and return on net assets performance measures, pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan, filed as Exhibit 10.6 to Flowserve Corporation’s Quarterly Report onForm 10-Q for the Quarter ended June 30, 2007.* | 10 | .47 | Form of Restricted Stock Agreement with non-competition covenant, pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2007).* | |||
10 | .53 | Form of Restricted Stock Agreement pursuant to the Company’s 2004 Stock Compensation Plan, filed as Exhibit 10.59 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | 10 | .48 | Form of Restricted Stock Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2007).* | |||
10 | .54 | Form of Incentive Stock Option Agreement pursuant to the Company’s 2004 Stock Compensation Plan, filed as Exhibit 10.60 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | 10 | .49 | Form of Restricted Stock Agreement with total shareholder return and return on net assets performance measures, pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2007).* | |||
10 | .55 | Form of Non-Qualified Stock Option Agreement pursuant to the Company’s 2004 Stock Compensation Plan, filed as Exhibit 10.61 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | 10 | .50 | Form of Restricted Stock Agreement pursuant to the Registrant’s 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.59 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2004).* | |||
10 | .56 | Form of Restricted Stock Agreement for certain officers pursuant to the Company’s 2004 Stock Compensation Plan, filed as Exhibit 10.3 to the Company’s Current Report onForm 8-K, dated as of March 9, 2006.* | 10 | .51 | Form of Incentive Stock Option Agreement pursuant to the Flowserve Corporation 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.60 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2004).* | |||
10 | .57 | Form of Incentive Stock Option Agreement for certain officers pursuant to the Company’s 2004 Stock Compensation Plan filed as Exhibit 10.4 to the Company’s Current Report onForm 8-K, dated March 9, 2006.* | 10 | .52 | Form of Non-Qualified Stock Option Agreement pursuant to the Flowserve Corporation 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.61 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2004).* | |||
10 | .58 | The Duriron Company, Inc. Incentive Compensation Plan for Key Employees as Amended and Restated, effective January 1, 1992, filed as Exhibit 10.68 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005.* |
Exhibit | Exhibit | Exhibit | ||||||
No. | No. | Description | No. | Description | ||||
10 | .59 | Amendment to The Duriron Company, Inc. Incentive Compensation Plan for Key Employees as Amended and Restated, effective January 1, 1992, dated December 14, 2005, filed as Exhibit 10.63 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.* | 10 | .53 | Form of Restricted Stock Agreement for certain officers pursuant to the Flowserve Corporation 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report onForm 8-K, dated as of March 9, 2006).* | |||
10 | .60 | Duriron Equity Incentive Plan, as amended and restated effective July 21, 1995, filed as Exhibit 10.25 to the Company’s Annual Report onForm 10-K for the year ended December 31, 1995.* | 10 | .54 | Form of Incentive Stock Option Agreement for certain officers pursuant to the Flowserve Corporation 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report onForm 8-K, dated March 9, 2006).* | |||
10 | .61 | Duriron Company, Inc. Deferred Compensation Plan for Executives, filed as Exhibit 10.72 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005.* | 10 | .55 | Form of Performance Restricted Stock Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan issued to Lewis M. Kling for the 2008 annual equity grant (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2008).* | |||
10 | .62 | Duriron Company, Inc. Deferred Compensation Plan for Directors, effective December 31, 1987, filed as Exhibit 10.73 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005.* | 10 | .56 | Form of Restricted Stock Unit Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan issued to Lewis M. Kling for the 2008 annual equity grant (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2008).* | |||
10 | .63 | Flowserve Corporation Amended and Restated Non-Employee Directors’ Stock Option Plan, as amended and restated on December 29, 2005, filed as Exhibit 10.74 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005.* | 10 | .57 | Form A of Performance Restricted Stock Unit Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2008).* | |||
10 | .64 | Form of Restrictive Covenants Agreement entered into on March 6, 2006 between the Company and each of Linda P. Jojo, Thomas L. Pajonas and Paul W. Fehlman, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K, dated as of March 9, 2006.* | 10 | .58 | Form B of Performance Restricted Stock Unit Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2008).* | |||
10 | .65 | Form of Restrictive Covenants Agreement entered into on March 6, 2006 between the Company and each of Lewis M. Kling, Mark A. Blinn, Ronald F. Shuff, John H. Jacko, Jr., Mark D. Dailey, Thomas E. Ferguson, Andrew J. Beall, Jerry L. Rockstroh, Richard J. Guiltinan, Jr., and Deborah K. Bethune, filed as Exhibit 10.2 to the Company’s Current Report onForm 8-K, dated as of March 9, 2006.* | 10 | .59 | Amendment Number One to the Form A and Form B Performance Restricted Stock Unit Agreements pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan, dated March 27, 2008 (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2008).* | |||
14 | .1 | Flowserve Financial Management Code of Ethics adopted by the Company’s principal executive officer and CEO, principal financial officer and CFO, principal accounting officer and controller, and other senior financial managers filed as Exhibit 14.1 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2002. | 10 | .60 | Form A of Restricted Stock Unit Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2008).* | |||
21 | .1 | Subsidiaries of the Company (filed herewith). | 10 | .61 | Form B of Restricted Stock Unit Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2008).* | |||
23 | .1 | Consent of PricewaterhouseCoopers LLP (filed herewith). | 10 | .62 | Form A of Restricted Stock Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.8 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2008).* | |||
31 | .1 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | 10 | .63 | Form B of Restricted Stock Agreement pursuant to Flowserve Corporation’s 2004 Stock Compensation Plan (incorporated by reference to Exhibit 10.9 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2008).* | |||
31 | .2 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | 10 | .64 | Flowserve Corporation Amended and Restated Non-Employee Directors’ Stock Option Plan, as amended and restated on December 29, 2005 (incorporated by reference to Exhibit 10.74 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2005).* | |||
32 | .1 | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). | 10 | .65 | Form of Restrictive Covenants Agreement entered into on March 6, 2006 between the Company and each of Thomas L. Pajonas and Paul W. Fehlman (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report onForm 8-K, dated as of March 9, 2006).* | |||
32 | .2 | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). | 10 | .66 | Form of Restrictive Covenants Agreement entered into on March 6, 2006 between the Company and each of Lewis M. Kling, Mark A. Blinn, Ronald F. Shuff, John H. Jacko, Jr., Mark D. Dailey, Thomas E. Ferguson, Andrew J. Beall, Jerry L. Rockstroh, Richard J. Guiltinan, Jr., and Deborah K. Bethune (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report onForm 8-K, dated as of March 9, 2006).* | |||
14 | .1 | Flowserve Financial Management Code of Ethics adopted by the Flowserve Corporation principal executive officer and CEO, principal financial officer and CFO, principal accounting officer and controller, and other senior financial managers (incorporated by reference to Exhibit 14.1 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2002). | ||||||
21 | .1+ | Subsidiaries of the Registrant. | ||||||
23 | .1+ | Consent of PricewaterhouseCoopers LLP. | ||||||
31 | .1+ | Certification of Chief Executive Officer pursuant to Exchange ActRules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
Exhibit | ||||
No. | Description | |||
31 | .2+ | Certification of Chief Financial Officer pursuant to Exchange ActRules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32 | .1+ | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
32 | .2+ | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
* | Management contracts and compensatory plans and arrangements required to be filed as exhibits to this Annual Report onForm 10-K. |
+ | Filed herewith. |