☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(

~~(972) 443-6500~~972

)

443-6500

(Registrant’s telephone number, including area code)

Former name, former address and former fiscal year, if changed since last report: N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, $1.25 Par Value

FLS

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ☑ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). þ☑ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” ~~“large accelerated filer” and~~ “smaller reporting ~~company”~~company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

~~Large accelerated filer~~ þ

~~Accelerated filer~~ ¨

~~Non-accelerated filer~~ ¨ ~~(do not check if a smaller reporting company)~~

~~Smaller reporting company~~ ¨

~~Emerging growth company~~ ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨Yes þ☐ No☑

AsAs of October ~~23, 2017~~ 25, 2022 there ~~were 130,635,017~~were 130,695,866shares of the issuer’s common stock outstanding.

FLOWSERVE CORPORATION

PART I — FINANCIAL INFORMATION

Item 1.Financial Statements

FLOWSERVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


(Amounts in thousands, except per share data)	Three Months Ended September 30,
	2022		2021
Sales	$	872,881	$	866,118
Cost of sales	(633,304)		(612,626)
Gross profit	239,577		253,492
Selling, general and administrative expense	(221,142)		(200,862)

Net earnings from affiliates	5,782		4,732
Operating income	24,217		57,362
Interest expense	(11,582)		(14,746)
Loss on extinguishment of debt	—		(563)
Interest income	1,141		827
Other income (expense), net	28,676		(1,504)
Earnings before income taxes	42,452		41,376
(Provision for) benefit from income taxes	(1,817)		10,433
Net earnings, including noncontrolling interests	40,635		51,809
Less: Net earnings attributable to noncontrolling interests	(2,235)		(2,024)
Net earnings attributable to Flowserve Corporation	$	38,400	$	49,785
Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic	$	0.29	$	0.38
Diluted	0.29		0.38

Weighted average shares - basic	130,703		130,242
Weighted average shares - diluted	131,402		130,789

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


(Amounts in thousands)	Three Months Ended September 30,
	2022		2021
Net earnings, including noncontrolling interests	$	40,635	$	51,809
Other comprehensive income (loss):
Foreign currency translation adjustments, net of taxes of $(3,183) and $(1,274), respectively	(89,282)		(15,561)
Pension and other postretirement effects, net of taxes of $(213) and $(471), respectively	6,161		4,955
Cash flow hedging activity, net of taxes of $(9) and $414, respectively	29		(1,347)
Other comprehensive income (loss)	(83,092)		(11,953)
Comprehensive income (loss), including noncontrolling interests	(42,457)		39,856
Comprehensive (income) loss attributable to noncontrolling interests	(2,144)		(2,021)
Comprehensive income (loss) attributable to Flowserve Corporation	$	(44,601)	$	37,835

FLOWSERVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


(Amounts in thousands, except per share data)	Nine Months Ended September 30,
	2022		2021
Sales	$	2,576,161	$	2,621,604
Cost of sales	(1,877,108)		(1,838,974)
Gross profit	699,053		782,630
Selling, general and administrative expense	(621,956)		(609,965)
Gain on sale of business	—		1,806
Net earnings from affiliates	14,821		11,157
Operating income	91,918		185,628
Interest expense	(33,337)		(45,847)
Loss on extinguishment of debt	—		(8,173)
Interest income	2,938		1,893
Other income (expense), net	28,152		(20,717)
Earnings before income taxes	89,671		112,784
(Provision for) benefit from income taxes	(16,618)		3,929
Net earnings, including noncontrolling interests	73,053		116,713
Less: Net earnings attributable to noncontrolling interests	(5,694)		(7,495)
Net earnings attributable to Flowserve Corporation	$	67,359	$	109,218
Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic	$	0.52	$	0.84
Diluted	0.51		0.83

Weighted average shares - basic	130,604		130,325
Weighted average shares - diluted	131,233		130,867

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Amounts in thousands) Nine Months Ended September 30,
2017 2016
Net earnings, including noncontrolling interests $ 110,216
$ 73,620
Other comprehensive income (loss):
Foreign currency translation adjustments, net of taxes of $(50,964) and $7,492, respectively 85,777
(12,577 )
Pension and other postretirement effects, net of taxes of $(996) and $(3,545), respectively (1,102 ) 9,655
Cash flow hedging activity, net of taxes of $(34) and $(620), respectively 96
1,763
Other comprehensive income (loss) 84,771
(1,159 )
Comprehensive income, including noncontrolling interests 194,987
72,461
Comprehensive income attributable to noncontrolling interests (2,169 ) (1,983 )
Comprehensive income attributable to Flowserve Corporation $ 192,818
$ 70,478


(Amounts in thousands)	Nine Months Ended September 30,
	2022		2021
Net earnings, including noncontrolling interests	$	73,053	$	116,713
Other comprehensive income (loss):
Foreign currency translation adjustments, net of taxes of $(23,788) and $(7,021), respectively	(170,187)		(12,452)
Pension and other postretirement effects, net of taxes of $(925) and $(1,414), respectively	16,318		11,273
Cash flow hedging activity, net of taxes of $(27) and $348, respectively	87		(1,130)
Other comprehensive income (loss)	(153,782)		(2,309)
Comprehensive income (loss), including noncontrolling interests	(80,729)		114,404
Comprehensive (income) loss attributable to noncontrolling interests	(6,941)		(7,654)
Comprehensive income (loss) attributable to Flowserve Corporation	$	(87,670)	$	106,750

FLOWSERVE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

FLOWSERVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)


	Total Flowserve Corporation Shareholders’ Equity
				Capital in Excess of Par Value		Retained Earnings					Deferred Compensation Obligation		Accumulated Other Comprehensive Income (Loss)				Total Equity
	Common Stock							Treasury Stock							Non- controlling Interests
	Shares	Amount						Shares	Amount
	(Amounts in thousands)
Balance — July 1, 2022	176,793	$	220,991	$	500,013	$	3,666,935	(46,377)	$	(2,037,839)	$	6,921	$	(635,618)	$	32,490	$	1,753,893

Stock activity under stock plans	—	—		(129)		—		1	81		29		—		—		(19)
Stock-based compensation	—			6,860		—		—	—		—		—		—		6,860

Net earnings	—	—		—		38,400		—	—		—		—		2,235		40,635
Cash dividends declared	—	—		—		(26,518)		—	—		—		—		—		(26,518)

Other comprehensive income (loss), net of tax	—	—		—		—		—	—		—		(83,001)		(91)		(83,092)


Balance — September 30, 2022	176,793	$	220,991	$	506,744	$	3,678,817	(46,376)	$	(2,037,758)	$	6,950	$	(718,619)	$	34,634	$	1,691,759

Balance — July 1, 2021	176,793	$	220,991	$	494,221	$	3,677,117	(46,806)	$	(2,058,279)	$	7,077	$	(600,143)	$	29,708	$	1,770,692

Stock activity under stock plans	—	—		(237)		—		2	111		68		—		—		(58)
Stock-based compensation	—	—		7,138		—		—	—		—		—		—		7,138

Net earnings	—	—		—		49,785		—	—		—		—		2,024		51,809
Cash dividends declared	—	—		—		(26,395)		—	—		—		—		—		(26,395)

Other comprehensive income (loss), net of tax	—	—		—		—		—	—		—		(11,950)		(3)		(11,953)


Balance — September 30, 2021	176,793	$	220,991	$	501,122	$	3,700,507	(46,804)	$	(2,058,168)	$	7,145	$	(612,093)	$	31,729	$	1,791,233
See accompanying notes to condensed consolidated financial statements.

FLOWSERVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)


	Total Flowserve Corporation Shareholders’ Equity
				Capital in Excess of Par Value		Retained Earnings					Deferred Compensation Obligation		Accumulated Other Comprehensive Income (Loss)				Total Equity
	Common Stock							Treasury Stock							Non- controlling Interests
	Shares	Amount						Shares	Amount
	(Amounts in thousands)
Balance — January 1, 2022	176,793	$	220,991	$	506,386	$	3,691,023	(46,794)	$	(2,057,706)	$	7,214	$	(563,589)	$	33,026	$	1,837,345

Stock activity under stock plans	—	—		(23,399)		—		418	19,948		(264)		—		—		(3,715)
Stock-based compensation	—	—		23,757		—		—	—		—		—		—		23,757

Net earnings	—	—		—		67,359		—	—		—		—		5,694		73,053
Cash dividends declared	—	—		—		(79,565)		—	—		—		—		—		(79,565)

Other comprehensive income (loss), net of tax	—	—		—		—		—	—		—		(155,030)		1,248		(153,782)

Other, net	—	—		—		—		—	—		—		—		(5,334)		(5,334)
Balance — September 30, 2022	176,793	$	220,991	$	506,744	$	3,678,817	(46,376)	$	(2,037,758)	$	6,950	$	(718,619)	$	34,634	$	1,691,759

Balance — January 1, 2021	176,793	$	220,991	$	502,227	$	3,670,543	(46,768)	$	(2,059,309)	$	6,164	$	(609,625)	$	30,330	$	1,761,321

Stock activity under stock plans	—	—		(24,715)		—		404	18,672		981		—		—		(5,062)
Stock-based compensation	—	—		23,610		—		—	—		—		—		—		23,610

Net earnings	—	—		—		109,218		—	—		—		—		7,495		116,713
Cash dividends declared	—	—		—		(79,254)		—	—		—		—		—		(79,254)
Repurchases of common shares	—	—		—		—		(440)	(17,531)		—		—		—		(17,531)
Other comprehensive income (loss), net of tax	—	—		—		—		—	—		—		(2,468)		159		(2,309)

Other, net	—	—		—		—		—	—		—		—		(6,255)		(6,255)
Balance — September 30, 2021	176,793	$	220,991	$	501,122	$	3,700,507	(46,804)	$	(2,058,168)	$	7,145	$	(612,093)	$	31,729	$	1,791,233
See accompanying notes to condensed consolidated financial statements.

FLOWSERVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

See accompanying notes to condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.Basis of Presentation and Accounting Policies

Basis of Presentation

The accompanying condensed consolidated balance sheet as of September 30, ~~2017~~,2022 and December 31, 2021, and the related condensed consolidated statements of income, ~~and~~condensed consolidated statements of comprehensive income (loss), condensed consolidated statements of shareholders' equity for the three and nine months ended September 30, ~~2017~~2022 and ~~2016~~,2021 and ~~the~~ condensed consolidated statements of cash flows for the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021 of Flowserve Corporation are unaudited. In management’s opinion, all adjustments comprising normal recurring adjustments necessary for fair statement of such condensed consolidated financial statements have been made. ~~Where applicable, prior~~Prior period information has been updated to conform to current year presentation.

The accompanying condensed consolidated financial statements and notes in this Quarterly Report on Form 10-Q for the quarterly period ended September 30, ~~2017~~2022 ("Quarterly Report") are presented as permitted by Regulation S-X and do not contain certain information included in our annual financial statements and notes thereto. Accordingly, the accompanying condensed consolidated financial information should be read in conjunction with the audited consolidated financial statements presented in our Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2016~~2021 ("~~2016~~2021 Annual Report").

~~Revision~~Coronavirus Pandemic ("COVID-19") - During the first nine months of 2022, we continued to ~~Previously Reported Financial Information~~ –~~As previously disclosed in our Quarterly Report on Form 10-Q for~~respond to the ~~quarterly period ended June 30, 2017, we identified accounting errors focused mainly at two~~macroeconomic and global economic impacts caused by COVID-19. Many of our ~~non-U.S. sites~~suppliers have experienced varying lengths of production and shipping delays related to the effects of COVID-19. These conditions have had an adverse impact on the speed at which we can manufacture and ship our products to customers, and have also led to an increase in logistics, transportation and freight costs. As a result of the ~~inventory, accounts receivable, cost of sales~~macroeconomic impacts, we have also experienced labor constraints and selling, general and administrative balances for prior periods through the first quarter of 2017. We assessed these errors, individually and in the aggregate, and concluded that they were not material to any prior annual or interim period. However, to facilitate comparisons among periods we revised our previously issued audited consolidated financial information which is included in our 2016 Annual Report and unauditedinflationary pressures. The Company's condensed consolidated financial ~~information for~~statements presented reflect management's estimates and assumptions regarding the ~~interim periods included~~effects of COVID-19 as of the date of the condensed consolidated financial statements.

Russia and Ukraine Conflict - In response to the ongoing military conflict in ~~our Form 10-Q/A~~Ukraine, several countries, including the United States, have imposed economic sanctions and ~~Form 10-Q for~~export controls on certain industry sectors and parties in Russia. As a result of this conflict, including the ~~quarters ended March 31, 2017~~aforementioned sanctions and ~~June 30, 2017, respectively. We also corrected the timing of immaterial previously recorded out-of-period adjustments and reflected them~~overall instability in the ~~revised prior period financial statements, where applicable. See Note 2 for more information.~~

~~Brazil Long-Lived Asset Impairment~~ –region, in February 2022 we stopped accepting new orders in Russia and temporarily suspended fulfillment of existing orders. In March 2022, we made the ~~second quarter~~decision to permanently cease all Company operations in Russia. We have commenced the necessary actions to cease operations of ~~2017, due~~our Russian subsidiary, including taking steps to ~~continued capital spending declines in~~cancel existing contracts with customers, terminate our approximately 50 Russia-based employees and terminate other related contractual commitments, and currently expect this process to be substantially complete by the ~~Brazilian oil and gas market and economic and political circumstances, including the indictment~~end of 2022. As a result of the ~~former president,~~conflict and the ~~decision was made to scale back~~resulting macroeconomic impacts we have also experienced supply shortages and inflationary pressures.

In 2021, our Russian subsidiary had approximately $14 million of sales with an additional $36 million of sales from certain of our ~~operations in Brazil.~~other foreign subsidiaries into the Russian market. As of March 31, 2022, the net assets held on our Russian subsidiary's balance sheet were $2.7 million, including $7.1 million of cash, $3.6 million of accounts receivables, a ~~result in the second quarter of 2017, we tested our related long-lived assets, which primarily consist of property, plant~~$9.3 million net intercompany payable position and ~~equipment, for recoverability and recorded a $26.0 million impairment charge to selling, general and administrative expense ("SG&A") within our Engineered Product Division ("EPD") segment.~~

~~Venezuela~~ – Our operations in Venezuela primarily consist of a service center that performs service and repair activities. Our Venezuelan subsidiary's sales for the three and nine months ended September 30, 2017 represented less than 0.5% of consolidated sales and its assets at September 30, 2017 represented less than 0.5% of total consolidated assets. Assets primarily consisted of United States ("U.S.") dollar-denominated monetary assets and bolivar-denominated non-monetary assets at September 30, 2017.other immaterial amounts. In addition, certain of our other foreign subsidiaries had open contracts with Russian customers that were subsequently cancelled for which revenue had been previously recognized over time utilizing the percentage of completion ("POC") method. As a result of the above, in the first quarter of 2022 we recorded a $20.2 million pre-tax charge ($21.0 million after-tax) to reserve the asset positions of our Russian subsidiary (excluding cash) as of March 31, 2022, to record contra-revenue for previously recognized revenue and estimated cancellation fees on open contracts that were previously accounted for under POC and subsequently canceled, to establish a reserve for the estimated cost to exit the operations of our Russian subsidiary and to record a reserve for our estimated financial exposure on contracts that have or are anticipated to be cancelled. We reevaluated our financial exposure as of June 30, 2022 and September 30, 2022, and concluded that the reserve recorded as of March 31, 2022 is sufficient and no material changes to reserves were needed.

The following table presents the above impacts of the Russia pre-tax charge:


	Nine Months Ended September 30, 2022
(Amounts in thousands)		Flowserve Pump Division		Flow Control Division		Consolidated Total
Sales		$	(5,429)	$	(2)	$	(5,431)
Cost of sales ("COS")		3,510		1,112		4,622
Gross loss		(8,939)		(1,114)		(10,053)
Selling, general and administrative expense ("SG&A")		9,111		1,082		10,193
Operating loss		$	(18,050)	$	(2,196)	$	(20,246)

We continue to monitor the situation involving Russia and Ukraine and its impact on the rest of our global business. This includes the macroeconomic impact, including with respect to global supply chain issues and inflationary pressures. To date, these impacts have not been material to our business and we do not currently expect that any incremental impact in future quarters, including any financial impacts caused by our cancellation of customer contracts and ceasing of operations in ~~other countries sell equipment and parts that are typically denominated in U.S. dollars directly~~Russia, will be material to ~~Venezuelan customers.~~ the Company.

Prior Period Lease Accounting Correction - In conjunction with our close process for the third quarter of ~~2016 we~~2022, the Company identified an accounting error related to certain operating real estate leases that have escalating rent payments which were not correctly recorded on a ~~charge~~straight-line basis in the amount of ~~$73.5~~$6.4 million. Approximately $5.8 million ~~to SG&A to fully reserve for those potentially uncollectible accounts receivable (classified as other assets, net on~~of the error impacted the Company’s condensed consolidated ~~balance sheet) and a charge~~statements of income prior to ~~cost of sales ("COS") of $1.9 million to reserve for related net inventory exposures. We continue to pursue payments from our Venezuelan customer.~~

~~Valuation of Goodwill, Indefinite-Lived Intangible Assets and Other Long-Lived Assets~~ ~~– As discussed in Note 1 to our consolidated financial statements included in our 2016 Annual Report, the value of our goodwill and indefinite-lived intangible~~

We did not record an impairment of goodwill in 2016, 2015 or 2014; however at December 31, 2016 the estimated fair value of our Engineered Product Operations ("EPO") and Industrial Product Division ("IPD") reporting units reduced significantly due to broad-based capital spending declines and heightened pricing pressure experienced in the oil and gas markets which are anticipated to continue in the near to mid-term. Although we concluded that there is no impairment on the goodwill associated with our EPO and IPD reporting units as of December 31, 2016, we will continue to closely monitor their performance and related market conditions for future indicators of potential impairment and reassess accordingly.

~~Accounting Policies~~

~~Significant accounting policies, for which no significant changes have occurred in the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2017, are detailed in Note 1 to our consolidated financial statements included in our 2016 Annual Report.~~

~~Accounting Developments~~

~~Pronouncements Implemented~~

In July 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory." The ASU updates represent changes to simplify the subsequent measurement of inventory. Previous to the issuance of this ASU, ASC 330 required that an entity measure inventory at the lower of cost or market. The amendments of ASU 2015-11 updates that “market” requirement to “net realizable value,” which is defined by the ASU as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Our adoption of ASU No. ~~2015-11 effective January 1, 2017 did not have~~2016-02, Leases (Topic 842) in 2019 and the remaining immaterial amount impacted each period subsequent to adoption. To correct the cumulative impact of the error the Company recorded an ~~impact~~adjustment of $6.4 million of incremental operating lease expense in the third quarter of 2022 ($5.5 million classified as SG&A and $0.9 million classified as COS), with the offsetting adjustment to reduce operating lease right-of-use assets, net on our condensed consolidated ~~financial condition and results of operations.~~

~~In March 2016,~~balance sheet for the ~~FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718), Improvements~~period ended September 30, 2022. There was no impact to Employee Share-Based Payment Accounting." The ASU affects the accounting for employee share-based payment transactions as it relates to accounting for income taxes, accounting for forfeitures, and statutory tax withholding requirements. We adopted the provisions of ASU 2016-09 as of January 1, 2017 using the modified retrospective approach. The adoption resulted in the recognition of approximately $1 million of tax expense in our provision of income taxes and an approximately $3 million one-time, cumulative adjustment to beginning retained earnings related to the change in our accounting policy for estimated forfeitures and share cancellations. In addition, in ourcondensed statements of cash flows we reclassified cash outflows for employee taxes paid from operating to financing and elected to reclassify cash impacts due to excess tax deficiencies and benefits from financing to operating, which resulted inas a ~~net reclassification~~result of ~~approximately $10 million~~the correction of ~~cash flows used from operating to financing for~~ the ~~nine months ended September 30, 2016.~~error.

Accounting Developments

Pronouncements Not Yet Implemented

In ~~May 2014,~~October 2021, the FASB issued ASU No. ~~2014-09, "Revenue~~2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with ~~Customers (Topic 606)" which supersedes most of the revenue recognition requirements in "Revenue Recognition (Topic 605).~~Customers." The ~~standard is principle-based~~amendments in this Update improve comparability for both the recognition and ~~provides a five-step model to determine when and how~~measurement of acquired revenue ~~is recognized. The core principle is that a company should recognize revenue when (or as) it transfers promised goods or services to~~contracts with customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Companies are permitted to adopt the new standard using one of two transition methods. Under the full retrospective method, the requirements of the new standard are applied to contracts for each prior reporting period presented and the cumulative effect of applying the standard is recognized in the earliest period presented. Under the modified retrospective method, the requirements of the new standard are applied to contracts that are open as of January 1, 2018, the required date of adoption, and the cumulative effect of applying the standard is recognized as an adjustment to beginning retained earnings in that same year. The standard also includes significantly expanded disclosure requirements for revenue. Since 2014, the FASB has issued several updates to Topic 606.

We are currently evaluating the impact of ASU No. 2014-09 and all related ASU's on our consolidated financial condition and results of operations. We plan to adopt the new revenue guidance effective January 1, 2018 using the modified retrospective method for transition, applying the guidance to those contracts which were not completed as of that date. In 2015, we established a cross-functional implementation team consisting of representatives from across all of our reportable segments to begin the process of analyzing the impact of the new standard on our contracts. We have determined the applicability of the key factors of the five step model and developed a framework of accounting policies and practices to meet the requirements of the of the new standard. The results of our evaluation indicate that one of the changes upon adoption may be potentially increased "over-time" ("percentage of completion") revenue recognition. Historically, revenue recognized under the percentage of completion method has been less than 5% to 7% of our consolidated sales. The adoption of the new standard could substantially increase this range depending on the terms and conditions of the contracts in our backlog at January 1, 2018 and future contracts. We also anticipate changes to the consolidated balance sheet related to accounts receivable, inventory, contract assets and contract liabilities. We expect to further our assessment on the financial impact on our consolidated financial condition and results of operations and to align our business processes, systems and controls to support compliance with the standard during the remainder of 2017. We will continue our evaluation of ASU 2014-09 as well as new or emerging interpretations of the standard through the date of ~~adoption.~~

~~In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition~~ and ~~Measurement of Financial Assets and Financial Liabilities."~~after a business combination. The ~~ASU requires entities to measure equity investments that do not result in consolidation and~~amendments are not accounted for under the equity method at fair value with changes in fair value recognized in net income. The ASU also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The requirement to disclose the method(s) and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet has been eliminated by this ASU. This ASU is effective for fiscal years beginning after December 15, ~~2017, including interim periods within those fiscal years. We are currently evaluating the impact of ASU No. 2016-01 on our consolidated financial condition and results of operations.~~

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. The ASU requires that organizations that lease assets recognize assets and liabilities on the balance sheet for the rights and obligations created by those leases. The ASU will affect the presentation of lease related expenses on the income statement and statement of cash flows and will increase the required disclosures related to leases. This ASU is effective for annual periods beginning after December 15, 2018,2022, including interim periods within those fiscal years ~~with early adoption permitted.~~and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. We ~~are currently evaluating~~do not expect the impact of this ASU ~~No. 2016-02 on our consolidated financial condition and results of operations. Although we are continuing~~ to evaluate, upon initial qualitative evaluation, we believe a key change upon adoption will be the balance sheet recognition of leased assets and liabilities. Based on our qualitative evaluation to date, we believe that any changes in income statement recognition will not be material.

In ~~June 2016,~~November 2021, the FASB issued ASU No. ~~2016-13, "Financial Instruments-Credit Losses~~2021-10, "Government Assistance (Topic ~~326), Measurement of Credit Losses on Financial Instruments.~~832)." The amendments in this ASU ~~replace the current incurred loss impairment methodology with a methodology that reflects expected credit losses~~do not change GAAP and, requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Wetherefore, are ~~currently evaluating the impact of ASU No. 2016-13 on our consolidated financial condition and results of operations.~~

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments - A consensus of the FASB Emerging Issues Task Force.” The update was issued with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230 and other topics. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of ASU No. 2016-15 is not expected to ~~have~~result in a ~~material impact on our consolidated financial condition and results~~significant change in practice. Rather, the amendments aim to provide increased transparency by requiring business entities to disclose information about certain types of ~~operations.~~

In October 2016, the FASB issued ASU No. 2016-16, "Income Taxes (Topic 740) Intra-Entity Transfers of Assets Other Than Inventory." The ASU guidance requires the recognition of the income tax consequences of an intercompany asset transfer, other than transfers of inventory, when the transfer occurs. For intercompany transfers of inventory, the income tax effects will continue to be deferred until the inventory has been sold to a third party. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact of ASU No. 2016-16 on our consolidated financial condition and results of operations.

In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash." The amendments in this ASU require that a statement of cash flows explain the change during the periodgovernment assistance they receive in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconcilingnotes to the ~~beginning-of-period and end-of-period total amounts shown on the statement of cash flows.~~financial statements. The ASU is effective for reporting periods beginning after December 15, 2017, including interim periods with those fiscal years. The adoption of ASU No. 2016-18 is not expected to have a material impact on our consolidated financial condition and results of operations.

In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): "Clarifying the Definition of a Business." The ASU clarifies the definition of a business and provides guidance on evaluating as to whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition clarification as outlined in this ASU affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The amendments ~~of the ASU~~ are effective for annual periods beginning after December 15, ~~2017, including interim periods within those annual periods. The adoption~~2021 and can be applied either prospectively or retrospectively. We do not expect the impact of this ASU ~~No. 2017-01 is not expected~~ to ~~have a material impact on our consolidated financial condition and results of operations.~~be material.

In ~~January 2017,~~March 2022, the FASB issued ASU No. ~~2017-04, "Intangibles - Goodwill~~2022-02, "Troubled Debt Restructurings and ~~Other (Topic 350): Simplifying the Test for Goodwill Impairment.~~Vintage Disclosures." The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the Current Expected Credit Loss ("CECL") model and enhance the disclosure requirements for loan refinancing and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current-period gross write-offs for financing receivables and net investment in ~~this ASU allow companies to apply a one-step quantitative test and record~~leases by year of origination in the ~~amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.~~vintage disclosures. The amendments ~~of the ASU~~ are effective for ~~annual or interim goodwill impairment tests in~~ fiscal years beginning after December 15, ~~2019. Early adoption is permitted for~~2022, including interim ~~or annual goodwill impairment tests performed on testing dates after January 1, 2017.~~periods within those fiscal years and should be applied prospectively. We are ~~currently~~ evaluating the impact of this ASU ~~No. 2017-04~~ on our ~~consolidated financial condition and results of operations.~~disclosures.

In ~~February 2017,~~September 2022, the FASB issued ASU No. ~~2017-05, "Other Income - Gains and Losses from the Derecognition~~2022-04, "Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets." The FASB issued this ASU to clarify the scope of subtopic 610-20, which the FASB had failed to define in its issuance of ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU No. 2017-05 will be effective concurrently with ASU No. 2014-09. Similarly to ASU 2014-09, we are continuing our evaluation of ASU No. 2017-05 to determine the impact on our consolidated financial condition and results of operations.

~~On March 10, 2017, the FASB issued ASU No. 2017-07, "Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.~~Supplier Finance Program Obligations." The amendments ~~of this ASU provide additional guidance intended~~require a buyer that uses supplier finance programs to ~~improve~~make annual disclosures about the program’s key terms, the balance sheet presentation of ~~net benefit costs, pension costs~~related amounts, the confirmed amount outstanding at the end of the period, and ~~net periodic postretirement costs.~~

the period must be disclosed in interim periods. The amendments ~~in this ASU must be applied to annual reporting periods~~are effective for all entities for fiscal years beginning after December 15, ~~2017, and to interim periods in 2018. Early adoption of the standard is permitted. We are currently evaluating the impact of ASU No. 2017- 07~~2022 on ~~our consolidated financial condition and results of operations.~~

On May 10, 2017, the FASB issued ASU No. 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting." The amendments in this ASU provide guidance about which changes to the terms or conditions of a ~~share-based payment award require an entity to apply modification accounting in Topic 718. The amendments of the ASU must be applied to annual reporting periods beginning after December 15, 2017,~~retrospective basis, including interim periods within those ~~annual periods. Early adoption of~~fiscal years, except for the ~~standard~~requirement to disclose roll-forward information, which is ~~permitted.~~effective prospectively for fiscal years beginning after December 15, 2023. We are ~~currently~~ evaluating the impact of this ASU ~~No. 2017-09~~ on our disclosures.

2.Revenue Recognition

The majority of our revenues relate to customer orders that typically contain a single commitment of goods or services which have lead times under a year. Longer lead time, more complex contracts with our customers typically have multiple commitments of goods and services, including any combination of designing, developing, manufacturing, modifying, installing and commissioning of flow management equipment and providing services and parts related to the performance of such products. Control transfers over time when the customer is able to direct the use of and obtain substantially all of the benefits of the asset.

Our primary method for recognizing revenue over time is the POC method. Revenue from products and services transferred to customers over time accounted for approximately 12% and 15% of total revenue for the three month period ended September 30, 2022 and 2021, respectively, and 12% and 15% for the nine month period ended September 30, 2022 and 2021, respectively. If control does not transfer over time, then control transfers at a point in time. We recognize revenue at a point in time at the level of each performance obligation based on the evaluation of certain indicators of control transfer, such as title transfer, risk of loss transfer, customer acceptance and physical possession. Revenue from products and services transferred to customers at a point in time accounted for approximately 88% and 85% of total revenue for the three month period ended September 30, 2022 and 2021, respectively, and 88% and 85% for the nine month period ended September 30, 2022 and 2021, respectively. Refer to Note 3 to our consolidated financial ~~condition~~statements included in our 2021 Annual Report for a more comprehensive discussion of our policies and ~~results~~accounting practices of ~~operations.~~revenue recognition.

~~On July 13, 2017,~~Disaggregated Revenue

We conduct our operations through two business segments based on the ~~FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities~~type of product and how we manage the business:

•Flowserve Pump Division ("FPD") designs and manufactures custom, highly-engineered pumps, pre-configured industrial pumps, pump systems, mechanical seals, auxiliary systems and replacement parts and related services; and

•Flow Control Division ("FCD") designs, manufactures and distributes a broad portfolio of engineered-to-order and configured-to-order isolation valves, control valves, valve automation products and related equipment.

Our revenue sources are derived from ~~Equity (Topic 480); Derivatives~~our original equipment manufacturing and ~~Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement~~our aftermarket sales and services. Our original equipment revenues are generally related to originally designed, manufactured, distributed and installed equipment that can range from pre-configured, short-cycle products to more customized, highly-engineered equipment ("Original Equipment"). Our aftermarket sales and services are derived from sales of ~~the Indefinite Deferral for Mandatory Redeemable Financial Instruments~~replacement equipment, as well as maintenance, advanced diagnostic, repair and retrofitting services ("Aftermarket"). Each of ~~Certain Nonpublic Entities~~our two business segments generate Original Equipment and Certain Mandatory Redeemable Noncontrolling Interests with a Scope Exception.” The ASU amends guidance in FASB Accounting Standards Codification ("ASC") 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. The amendments in Part I of this ASU change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments in Part II of the ASU re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the codification, to a scope exception. The amendments in this ASU must be applied to annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact of ASU No. 2017-11 on our consolidated financial condition and results of operations.Aftermarket revenues.

On August 28, 2017, the FASB issued ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted improvements of Accounting For Hedging Activities." The purpose of this ASU is to better align a company’s risk management activities and financial reporting for hedging relationships. Additionally, the ASU simplifies the hedge accounting requirements and improve the disclosures of hedging arrangements. The effective date is fiscal year 2020, with early adoption permitted. We are currently evaluating the impact of ASU No. 2017-12 on our consolidated financial condition and results of operations.

~~As described in Note 1, we revised the annual and quarterly periods prior to June 30, 2017.~~ The following ~~table presents the effect of the prior period revisions on the affected line items of~~tables present our ~~condensed consolidated statements of income for the three and nine months ended September 30, 2016:~~customer revenues disaggregated by revenue source:


	Three Months Ended September 30, 2022
(Amounts in thousands)	FPD		FCD		Total
Original Equipment	$	196,539	$	215,550	$	412,089
Aftermarket	394,807		65,985		460,792
	$	591,346	$	281,535	$	872,881

	Three Months Ended September 30, 2021
	FPD		FCD		Total
Original Equipment	$	223,358	$	201,890	$	425,248
Aftermarket	377,750		63,120		440,870
	$	601,108	$	265,010	$	866,118

(Amounts in thousands, except per share data) Three Months Ended September 30, 2016
As Reported Adjustments As Revised
Sales $ 943,334
$ 2,605
$ 945,939
Cost of sales (1) (677,891 ) 9,931
(667,960 )
Gross profit 265,443
12,536
277,979
Selling, general and administrative expense (2) (271,643 ) (9,618 ) (281,261 )
Operating (loss) income (2,806 ) 2,918
112
Loss before income taxes (15,124 ) 2,918
(12,206 )
Provision for income taxes (3) (4,996 ) 2,169
(2,827 )
Net loss, including noncontrolling interests (20,120 ) 5,087
(15,033 )
Net loss attributable to Flowserve Corporation $ (20,928 ) $ 5,087
$ (15,841 )
Net loss per share attributable to Flowserve Corporation common shareholders:
Basic $ (0.16 ) $ 0.04
$ (0.12 )
Diluted (0.16 ) 0.04
(0.12 )

(1) The cost of sales adjustments primarily relate to corrections of previously recorded out of period including an aggregate $8.7 million associated with our EPD reporting segment to write down inventory in Brazil.

(2) The selling, general and administrative expense adjustments primarily relate to receivables from our primary Venezuelan customer at one non-U.S. manufacturing site in our EPD segment of $(10.3) million. These receivables should have been included in the charge that we recorded in the third quarter of 2016 to fully reserve all the potentially uncollectible receivables.

~~(3) The provision for income taxes adjustment primarily relates to the tax effect of the adjustment described in footnote (2) above.~~

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	Nine Months Ended September 30, 2022
(Amounts in thousands)	FPD		FCD		Total
Original Equipment	$	609,640	$	596,989	$	1,206,629
Aftermarket	1,170,117		199,415		1,369,532
	$	1,779,757	$	796,404	$	2,576,161

	Nine Months Ended September 30, 2021
	FPD		FCD		Total
Original Equipment	$	657,910	$	608,707	$	1,266,617
Aftermarket	1,162,798		192,189		1,354,987
	$	1,820,708	$	800,896	$	2,621,604

Our customer sales are diversified geographically. The following tables present our revenues disaggregated by geography, based on the shipping addresses of our customers:


	Three Months Ended September 30, 2022
(Amounts in thousands)	FPD		FCD		Total
North America(1)	$	249,968	$	117,262	$	367,230
Latin America(2)	49,063		6,959		56,022
Middle East and Africa	90,598		23,994		114,592
Asia Pacific	89,794		80,770		170,564
Europe	111,923		52,550		164,473
	$	591,346	$	281,535	$	872,881

	Three Months Ended September 30, 2021
	FPD		FCD		Total
North America(1)	$	230,130	$	95,854	$	325,984
Latin America(2)	63,443		7,320		70,763
Middle East and Africa	71,296		24,271		95,567
Asia Pacific	117,424		84,267		201,691
Europe	118,815		53,298		172,113
	$	601,108	$	265,010	$	866,118

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(Amounts in thousands, except per share data) Nine Months Ended September 30, 2016
As Reported Adjustments As Revised
Sales $ 2,916,814
$ 2,739
$ 2,919,553
Cost of sales (1) (2,018,646 ) 2,891
(2,015,755 )
Gross profit 898,168
5,630
903,798
Selling, general and administrative expense (2) (737,083 ) (10,430 ) (747,513 )
Operating income 169,607
(4,800 ) 164,807
Other income (expense), net 2,091
(1,021 ) 1,070
Earnings before income taxes 128,959
(5,821 ) 123,138
Provision for income taxes (3) (47,809 ) (1,709 ) (49,518 )
Net earnings, including noncontrolling interests 81,150
(7,530 ) 73,620
Net earnings attributable to Flowserve Corporation $ 79,928
$ (7,530 ) $ 72,398
Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic $ 0.61
$ (0.05 ) $ 0.56
Diluted 0.61
(0.06 ) 0.55


	Nine Months Ended September 30, 2022
(Amounts in thousands)	FPD		FCD		Total
North America(1)	$	754,337	$	344,690	$	1,099,027
Latin America(2)	144,974		17,463		162,437
Middle East and Africa	247,205		67,392		314,597
Asia Pacific	288,971		220,980		509,951
Europe	344,270		145,879		490,149
	$	1,779,757	$	796,404	$	2,576,161

	Nine Months Ended September 30, 2021
	FPD		FCD		Total
North America(1)	$	697,712	$	284,217	$	981,929
Latin America(2)	157,703		23,014		180,717
Middle East and Africa	223,502		78,503		302,005
Asia Pacific	361,450		251,864		613,314
Europe	380,341		163,298		543,639
	$	1,820,708	$	800,896	$	2,621,604

(1) The cost of sales adjustments primarily relate to corrections of previously recorded out of period including an aggregate $4.6 million associated with our EPD reporting segment to write down inventory in Brazil.North America represents the United States and Canada.

(2) ~~The selling, general~~Latin America includes Mexico.

On September 30, 2022, the aggregate transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations was approximately $597 million. We estimate recognition of approximately $155 million of this amount as revenue in the remainder of 2022 and ~~administrative expense adjustments primarily relate~~an additional $442 million in 2023 and thereafter.

Contract Balances

We receive payment from customers based on a contractual billing schedule and specific performance requirements as established in our contracts. We record billings as accounts receivable when an unconditional right to consideration exists. A contract asset represents revenue recognized in advance of our right to receive payment under the ~~matter described~~terms of a contract. A contract liability represents our right to receive payment in ~~footnote (2) above.~~advance of revenue recognized for a contract.

~~(3) The provision for income taxes adjustments include the impact~~

Table of recording a valuation allowance of $(5.0) million related to deferred tax assets that subsequently were determined to not be realizable, partially offset by the tax effect of the matter described in footnote (2) above.Contents

The ~~effect~~following tables present beginning and ending balances of ~~the prior period revisions on the condensed consolidated statement of cash flows~~contract assets and contract liabilities, current and long-term, for the nine months ended September 30, ~~2016 related~~2022 and 2021:


(Amounts in thousands)	Contract Assets, net (Current)		Long-term Contract Assets, net(1)		Contract Liabilities (Current)		Long-term Contract Liabilities(2)
Beginning balance, January 1, 2022	$	195,598	$	426	$	202,965	$	464
Revenue recognized that was included in contract liabilities at the beginning of the period	—		—		(133,730)		—
Revenue recognized in the period in excess of billings	417,430		—		—		—
Billings arising during the period in excess of revenue recognized	—		—		155,584		7
Amounts transferred from contract assets to receivables	(392,199)		(1,406)		—		—

Currency effects and other, net	(15,593)		987		(8,725)		(38)
Ending balance, September 30, 2022	$	205,236	$	7	$	216,094	$	433


(Amounts in thousands)	Contract Assets, net (Current)		Long-term Contract Assets, net(1)		Contract Liabilities (Current)		Long-term Contract Liabilities(2)
Beginning balance, January 1, 2021	$	277,734	$	1,139	$	194,227	$	822
Revenue recognized that was included in contract liabilities at the beginning of the period	—		—		(137,305)		—
Revenue recognized in the period in excess of billings	539,813		—		—		—
Billings arising during the period in excess of revenue recognized	—		—		145,369		—
Amounts transferred from contract assets to receivables	(563,145)		(61)		—		—

Currency effects and other, net	(18,485)		(109)		(3,188)		(40)
Ending balance, September 30, 2021	$	235,917	$	969	$	199,103	$	782

(1) Included in other assets, net.

(2) Included in retirement obligations and other liabilities.

3.Allowance for Expected Credit Losses

The allowance for credit losses is an estimate of the credit losses expected over the life of our financial assets and instruments. We assess and measure expected credit losses on a collective basis when similar risk characteristics exist, including market, geography, credit risk and remaining duration. Financial assets and instruments that do not share risk characteristics are evaluated on an individual basis. Our estimate of the allowance is assessed and quantified using internal and external valuation information relating to past events, current conditions and reasonable and supportable forecasts over the contractual terms of an asset.

Our primary exposure to expected credit losses is through our trade receivables and contract assets. For these financial assets, we record an allowance for expected credit losses that, when deducted from the gross asset balance, presents the net ~~earnings, including noncontrolling interests,~~amount expected to be collected. Primarily, our experience of historical credit losses provides the basis for our estimation of the ~~change in net earnings~~allowance. We estimate the allowance based on an aging schedule and according to historical losses as determined from our history of billings and collections. Additionally, we adjust the allowance for factors that are specific to our customers’ credit risk such as financial difficulties, liquidity issues, insolvency, and country and geopolitical risks. We also consider both the current and forecasted macroeconomic conditions as of the reporting date. As identified and needed, we adjust the allowance and recognize adjustments in the ~~table above, offset primarily by impacts~~income statement each period. Trade receivables are written off against the allowance in the period when the receivable is deemed to ~~changes in assets and liabilities. The revisions~~be uncollectible. Subsequent recoveries of previously written off amounts are reflected as a reduction to individual line items were below $3 million except for the classification change within operating activity cash flows of $15.9 million from Latin America inventory write downs to inventories, net and an increase of $10.3 million to Latin America accounts receivables reserve. Additionally, we adopted ASU 2016-09 on January 1, 2017, see Note 1 for further discussion of the impact of that adoption on our statements of cash flows.

~~The impacts of the revisions have been reflected throughout the financial statements, including the applicable footnotes, as appropriate.~~


3.	~~Dispositions~~

On July 6, 2017, we sold our Flow Control Division's ("FCD") Vogt product line and related assets and liabilities to a privately held company for $28.0 million of cash received at closing. The sale resulted in a pre-tax gain of $10.9 million recorded in gain on sale of businesscredit impairment losses in the condensed consolidated statements of income. ~~In 2016, net sales related to the Vogt business totaled approximately $17 million, with earnings before interest and taxes of approximately $4 million.~~

Effective May 2, 2017, we sold our FCD's Gestra AG ("Gestra") business to a leading provider of steam system solutions for $203.6 million (€178.3 million), which included $180.8 million (€158.3 million) of cash received at closing (net of divested cash and subsequent working capital adjustments). Additionally, we expect to receive $23.6 million (€20.0 million) of cash currently held in escrow before the end of 2017, which we have classified as an other current asset in prepaid expenses and other. The sale resulted in a pre-tax gain of $130.2 million ($79.4 million after-tax) recorded in gain on sale of business in the condensed consolidated statements of income. The sale included Gestra’s manufacturing facility in Germany as well as related operations in the U.S., the United Kingdom ("U.K."), Spain, Poland, Italy, Singapore and Portugal. In 2016, Gestra recorded revenues of approximately $101 million (€92 million) with earnings before interest and taxes of approximately $17 million (€15 million).

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Contract assets represent a conditional right to consideration for satisfied performance obligations that become a receivable when the conditions are satisfied. Generally, contract assets are recorded when contractual billing schedules differ from revenue recognition based on timing and are managed through the revenue recognition process. Based on our historical credit loss experience, the current expected credit loss for contract assets is estimated to be approximately 1% of the asset balance.


4.	~~Stock-Based Compensation Plans~~

The following table presents the changes in the allowance for expected credit losses for our trade receivables and contract assets for the nine months ended September 30, 2022 and 2021:


(Amounts in thousands)	Trade receivables		Contract assets
Beginning balance, January 1, 2022	$	74,336	$	2,393
Charges to cost and expenses, net of recoveries	12,652		1,243
Write-offs	(792)		—
Currency effects and other, net	(4,095)		363
Ending balance, September 30, 2022	$	82,101	$	3,999

Beginning balance, January 1, 2021	$	75,176	$	3,205
Charges to cost and expenses, net of recoveries	4,234		—
Write-offs	(2,015)		—
Currency effects and other, net	(1,429)		(427)
Ending balance, September 30, 2021	$	75,966	$	2,778

Our allowance on long-term receivables, included in other assets, net, represent receivables with collection periods longer than 12 months and the balance primarily consists of reserved receivables associated with the national oil company in Venezuela. The following table presents the changes in the allowance for long-term receivables for the nine months ended September 30, 2022 and 2021:


(Amounts in thousands)	2022		2021
Balance at January 1	$	67,696	$	67,842


Currency effects and other, net	(1,486)		(145)
Balance at September 30	$	66,210	$	67,697

We also have exposure to credit losses from off-balance sheet exposures, such as financial guarantees and standby letters of credit, where we believe the risk of loss is immaterial to our financial statements as of September 30, 2022.

4.Stock-Based Compensation Plans

We maintain the Flowserve Corporation ~~Equity and~~2020 Long-Term Incentive ~~Compensation~~ Plan ~~(the "2010 Plan"~~(“2020 Plan”), which is a ~~shareholder-approved~~shareholder approved plan authorizing the issuance of ~~up to 8,700,000~~12,500,000 shares of our common stock in the form of restricted shares, restricted share units and performance-based units (collectively referred to as "Restricted Shares"), incentive stock options, non-statutory stock options, stock appreciation rights and bonus stock. Of the ~~8,700,000~~ shares of common stock authorized under the ~~2010~~2020 Plan, ~~2,634,908~~9,733,171 were available for issuance as of September 30, ~~2017. In 2016 the long-term incentive program was amended to allow~~2022. Restricted Shares primarily vest over a three year period. Restricted Shares granted ~~after January 1, 2016~~ to employees who retire and have achieved at least 55 years of age and 10 years of service to continue to vest over the original vesting period ("55/10 Provision"). ~~Until the second quarter~~As of ~~2017, no previous~~September 30, 2022, 114,943 stock options were outstanding. ~~On May 4, 2017, 114,943~~No stock options were granted ~~with a grant date fair value of $2.0 million, which is expected to be recognized over a weighted-average period of approximately three years. No stock options~~or vested during the nine months ended September 30, ~~2017.~~2022 and 2021.

Restricted Shares – Awards of Restricted Shares are valued at the closing market price of our common stock on the date of grant. The unearned compensation is amortized to compensation expense over the vesting period of the restricted shares, except for awards related to the 55/10 Provision which are expensed in the period granted. We had unearned ~~compensation~~compensation of ~~$20.6~~$26.5 million and ~~$15.2~~$24.2 million at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively, which is expected to be recognized over a remaining weighted-average period of approximately one ~~years.~~year. These amounts will be recognized into net earnings in prospective periods as the awards vest. The total fair value of Restricted Shares vested during the three months ended September 30, ~~2017~~2022 and ~~2016~~2021 was ~~$0.2~~$0.1 million and ~~$0.6~~$0.2 million, respectively. The total fair value of Restricted Shares vested during the nine months ended September 30, ~~2017~~2022 and ~~2016~~2021 was ~~$28.1~~$22.6 million and ~~$38.7~~$24.6 million, respectively.

We recorded stock-based compensation expense ~~of $3.0~~of $5.3 million ($~~4.6~~6.9 million pre-tax) and ~~$3.9~~$5.5 million ($~~6.0~~7.1 million pre-tax) for the three months ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively. We recorded stock-based compensation expense of

Table of ~~$13.4~~Contents

$18.4 million ($~~20.3~~23.8 million pre-tax) and ~~$19.6~~$18.2 million ($~~30.0~~23.6 million pre-tax) for the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively.

The following table summarizes information regarding Restricted Shares:


	Nine Months Ended September 30, 2022
	Shares	Weighted Average Grant-Date Fair Value
Number of unvested shares:
Outstanding as of January 1, 2022	1,671,011	$	43.06
Granted	974,258	32.90
Vested	(525,948)	43.01
Forfeited	(237,876)	44.75
Outstanding as of September 30, 2022	1,881,445	$	37.60

Nine Months Ended September 30, 2017
Shares
Weighted Average
Grant-Date Fair
Value
Number of unvested shares:
Outstanding - January 1, 2017 1,259,275
$ 50.77
Granted 697,832
49.81
Vested (473,426 ) 59.38
Canceled (207,618 ) 48.00
Outstanding as of September 30, 2017 1,276,063
$ 47.50

Unvested Restricted Shares outstanding as of September 30, ~~2017, includes~~2022 included approximately ~~888,000~~481,000 units with performance-based vesting ~~provisions. Performance-based units are~~provisions issuable in common stock and vest upon the achievement of pre-defined performance ~~targets. Performance-based units granted prior to 2017 have~~metrics. Targets for outstanding performance targets based on our average annual return on net assets over a three-year period as compared with the same measure for a defined peer group for the same period. Performance-based units granted in 2017 have performance targetsawards are based on our average return on invested capital, ~~and our~~ total shareholder return ("TSR") or free cash flow as a percent of net income over a three-year ~~period as compared with~~period. Performance units issued in 2022 and 2021 include a secondary measure, relative TSR, which can increase or decrease the ~~same measures for a defined peer group for~~number of vesting units by 15% depending on the ~~same period. Most~~Company's performance versus peers. Performance units ~~were granted~~issued in ~~three annual grants since January 1, 2015 and~~2020 have a vesting percentage between 0% and 200% ~~depending on~~, while the ~~achievement of the specific~~ performance ~~targets. Except for shares granted under the 55/10 Provision, compensation~~units issued in 2022 and 2021 have a vesting percentage up to 230%. Compensation expense is recognized ratably over a cliff-vesting period of 36 months, based on the fair value of our common stock on the date of grant, as adjusted for actual forfeitures. During the performance period, earned and unearned compensation expense is adjusted based on changes in the expected achievement of the performance targets for all performance-based units granted except for the TSR-based units. Vesting provisions range from 0 to approximately ~~1,701,000~~1,059,000 shares based on performance targets. As of September 30, ~~2017,~~2022, we estimate vesting of approximately ~~663,000~~410,000 shares based on expected achievement of performance targets.

105.Derivative Instruments and Hedges

~~Table of Contents~~


5.	~~Derivative Instruments and Hedges~~

Our risk management and foreign currency derivatives and hedging policy specifies the conditions under which we may enter into derivative contracts. See Notes 1 and 69 to our consolidated financial statements included in our ~~2016~~2021 Annual Report and Note 7 ofof this Quarterly Report for additional information on our derivatives. We enter into foreign exchange forward contracts to hedge our cash flow risks associated with transactions denominated in currencies other than the local currency of the operation engaging in the transaction. We have not elected hedge accounting for our foreign exchange forward contracts and the changes in the fair values are recognized immediately in our condensed consolidated statements of income.

~~During the second quarter of 2017, we discontinued our program to designate~~Foreign exchange forward ~~exchange contracts. The discontinuance of this program had no impact on our financial position as of September 30, 2017. Foreign exchange contracts~~contracts with third parties ~~not designated as hedging instruments~~ had a notional value of ~~$237.6~~$399.6 million and ~~$393.2~~$425.2 million at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively. At September 30, ~~2017,~~2022, the length of foreign exchange forward contracts currently in place ranged from 25 days to 2029 months.

We are exposed to risk from credit-related losses resulting from ~~nonperformance~~nonperformance by counterparties to our financial instruments. We perform credit evaluations of our counterparties under foreign exchange forward contracts agreements and expect all counterparties to meet their obligations. We have not experienced credit losses from our counterparties.

The fair values of foreign exchange forward contracts are summarized below:


	September 30,		December 31,			September 30,		December 31,
(Amounts in thousands)	2017		2016		(Amounts in thousands)	2022		2021
Current derivative assets	$	2,526	$	682	Current derivative assets	$	5,016	$	740
Noncurrent derivative assets	173		—		Noncurrent derivative assets	—		2
Current derivative liabilities	1,172		6,878		Current derivative liabilities	7,051		2,924
Noncurrent derivative liabilities	42		355		Noncurrent derivative liabilities	315		82

Current and noncurrent derivative assets are reported in our condensed consolidated balance sheets in prepaid expenses and other and other assets, net, respectively. Current and noncurrent derivative liabilities are reported in our condensed consolidated balance sheets in accrued liabilities and retirement obligations and other liabilities, respectively.

The impact of net changes in the fair values of foreign exchange forward contracts are summarized below:


	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	2017		2016			2017		2016		(Amounts in thousands)	2022		2021		2022		2021
Gain (loss) recognized in income	$	548	$	(774	)	$	219	$	5,587
Gains (losses) recognized in income										Gains (losses) recognized in income	$	1,245	$	(75)	$	1,478	$	1,718

Gains and losses recognized in our condensed consolidated statements of income for foreign exchange forward contracts are classified as other income (expense) ~~income,~~, net.

As a means of managing the volatility of foreign currency exposure with the Euro/U.S. dollar exchange rate, we enter into cross-currency swap agreements as a hedge of our Euro investment in certain of our international subsidiaries. Accordingly, on April 14, 2021 and March 9, 2021, we entered into cross currency swap agreements, with both having termination dates of October 1, 2030 and the March 9, 2021 cross currency swap having an early termination date of March 11, 2025. Also, during the third quarter of 2020 we entered into a cross currency swap agreement with a termination date of October 1, 2030 and an early termination date of September 22, 2025. The swap agreements are designated as net investment hedges and as of September 30, 2022 the combined notional value of these swaps was €423.2 million. The swaps are classified as Level II under the fair value hierarchy.

The fair values of our cross-currency swaps are summarized below:


	September 30,		December 31,
(Amounts in thousands)	2022		2021
Other assets, net	$	96,798	$	23,129

We exclude the interest accruals on the swaps from the assessment of hedge effectiveness and recognize the interest accruals in earnings within interest expense. For each reporting period, the change in the fair value of the swaps attributable to changes in the spot rate and differences between the change in the fair value of the excluded components and the amounts recognized in earnings under the swap accrual process are reported in accumulated other comprehensive loss ("AOCL") on our consolidated balance sheet. For the three and nine months ending September 30, 2022, an interest accrual of $2.3 million and $6.4 million, respectively, was recognized within interest expense in our condensed consolidated statements of income. For the three and nine months ending September 30, 2021, an interest accrual of $1.9 million and $4.3 million, respectively, was recognized within interest expense.

The cumulative net investment hedge (gains) losses, net of deferred taxes, under cross-currency swaps recorded in AOCL on our condensed consolidated balance sheet are summarized below:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	2022		2021		2022		2021
(Gain) loss-included component (1)	$	(22,107)	$	(8,869)	$	(66,363)	$	(8,684)
(Gain) loss-excluded component (2)	839		(3,647)		(7,669)		243
(Gain) loss recognized in AOCL	$	(21,268)	$	(12,516)	$	(74,032)	$	(8,441)

In March 2015, we ~~designated~~designated €255.7 million of our ~~€500.0 million~~1.25% EUR 2022 Senior Notes ("2022 Euro ~~senior notes discussed in Note 6~~Senior Notes") as a net investment hedge of our ~~investments~~Euro investment in certain of our international ~~subsidiaries that use~~subsidiaries. On September 22, 2020, we increased the designated hedged value on the 2022 Euro ~~as their functional currency. We used~~Senior Notes to €336.3 million, which reflected the ~~spot method to measure~~remaining balance of the ~~effectiveness of our net investment hedge. Under this method, for~~2022 Euro Senior Notes. For each reporting period, the change in the carrying value ~~of the Euro senior notes~~ due to the remeasurement of the effective portion iswas reported in ~~accumulated other comprehensive loss~~AOCL on our condensed consolidated balance sheet and the remaining change in the carrying value of the ineffective portion, if any, iswas recognized in other ~~expense,~~income (expense), net in our condensed consolidated ~~statement~~statements of income. As a result of the redemption of our 2022 Euro Senior Notes in the first quarter of 2021, we dedesignated the hedged value of our net investment hedge.

Prior to the dedesignation, the cumulative impact recorded in AOCL on our condensed consolidated balance sheet from the change in carrying value due to the remeasurement of the effective portion of the net investment hedge is summarized below:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	2022		2021		2022		2021
Loss recognized in AOCL	$	—	$	—	$	—	$	29,554

We ~~evaluate~~use the spot method to measure the effectiveness of our net investment ~~hedge~~hedges and evaluate the effectiveness on a prospective basis at the beginning of each quarter. We did not record any ineffectiveness ~~for~~ during the three and nine months ended September 30, ~~2017~~2022 and ~~2016.~~2021, respectively.

Debt, including ~~capital~~finance lease obligations, net of discounts and debt issuance costs, consisted of:


	September 30,		December 31,
(Amounts in thousands, except percentages)	2022		2021
3.50% USD Senior Notes due October 1, 2030, net of unamortized discount and debt issuance costs of $5,195 and $5,611, respectively	$	494,805	$	494,389
2.80% USD Senior Notes due January 15, 2032, net of unamortized discount and debt issuance costs of $5,865 and $6,273, respectively	494,135		493,727
Term Loan Facility, interest rate of 4.92% at September 30, 2022 and 1.45% at December 31, 2021, net of debt issuance costs of $492 and $639, respectively	269,508		291,861
Finance lease obligations and other borrowings	21,762		22,851
Debt and finance lease obligations	1,280,210		1,302,828
Less amounts due within one year	47,962		41,058
Total debt due after one year	$	1,232,248	$	1,261,770

September 30,
December 31,
(Amounts in thousands, except percentages) 2017 2016
1.25% EUR Senior Notes due March 17, 2022, net of unamortized discount and debt issuance costs of $5,558 and $5,748 $ 585,042
$ 519,902
4.00% USD Senior Notes due November 15, 2023, net of unamortized discount and debt issuance costs of $2,687 and $2,972 297,313
297,028
3.50% USD Senior Notes due September 15, 2022, net of unamortized discount and debt issuance costs of $3,386 and $3,848 496,614
496,152
Term Loan Facility, interest rate of 2.58% at September 30, 2017 and 2.25% at December 31, 2016, net of debt issuance costs of $694 and $745 179,306
224,255
Capital lease obligations and other borrowings 28,417
33,286
Debt and capital lease obligations 1,586,692
1,570,623
Less amounts due within one year 80,635
85,365
Total debt due after one year $ 1,506,057
$ 1,485,258

On March 19, 2021, we redeemed the remaining $400.9 million of our 2022 Euro Senior Notes and recorded a loss on early extinguishment of $7.6 million in the first quarter of 2021, which included the impact of a $6.6 million make-whole premium.

Senior Credit Facility

As discussed in Note 1013 to our consolidated financial statements included in our ~~2016~~2021 Annual Report, we amended our credit agreement ("Amended and Restated Credit Agreement") under our Senior Credit Facility ("Credit Facility") with Bank of America, N.A. ("Administrative Agent") and the other lenders to provide greater flexibility in maintaining adequate liquidity and access to available borrowings. The Amended and Restated Credit Agreement, (i) retained, from the previous credit agreement, the $800.0 million unsecured Revolving Credit Facility, which includes a $750.0 million sublimit for the issuance of letters of credit and a $30.0 million sublimit for swing line loans, (ii) provides for an ~~initial $400.0~~up to $300 million ~~term loan (“Term Loan Facility”) and a $1.0 billion revolving credit facility (“Revolving Credit Facility” and, together with the~~unsecured Term Loan Facility (the "Term Loan"), (iii) extends the ~~“Senior Credit Facility”) with a~~ maturity date of ~~October 14, 2020. On June 30, 2017, we amended our existing Senior Credit Facility.~~ the agreement to September 13, 2026, (iv) reduces commitment fees, (v) extends net leverage ratio covenant definition through the maturity of the agreement, and (vi) provides the ability to make certain adjustments to the otherwise applicable commitment fee, interest rate and letter of credit fees based on the Company’s performance against to-be-established key performance indicators with respect to certain of the Company’s environmental, social and governance targets.

The ~~amendment, among other changes, includes the following: (i) a decrease of~~interest rates per annum applicable to the Revolving Credit Facility are unchanged under the Amended and Restated Credit Agreement. The interest rates per annum applicable to the Credit Facility, other than with respect to swing line loans, are LIBOR plus between 1.000% to 1.750%, depending on our debt rating by either Moody’s Investors Service, Inc. ("Moody's") or Standard & Poor’s Financial Services LLC ("S&P"), or, at our option, the Base Rate (as defined in the Amended and Restated Credit Agreement) plus between 0.000% to 0.750% depending on our debt rating by either Moody’s or S&P. At September 30, 2022, the interest rate on the Revolving Credit Facility was LIBOR plus 1.375% in the case of LIBOR loans and the Base Rate plus 0.375% in the case of Base Rate loans. In addition, a commitment ~~from $1.0 billion to $800 million, (ii) an increase~~fee is payable quarterly in arrears on the daily unused portions of the ~~leverage ratio from 3.50 to 4.00 times debt to total Consolidated EBITDA, through June 30, 2019, with a step-down to 3.75 for any fiscal quarter ending after July 1, 2019, (iii)~~Credit Facility. The commitment fee will be between 0.080% and 0.250% of unused amounts under the ~~addition of a new pricing level~~Credit Facility depending on our ~~senior unsecured long-term~~ debt ~~ratings for Ba2/BB, with an increase in interest rate margin for LIBOR loans to 2.00%~~rating by either Moody’s or S&P. The commitment fee was 0.175% (per annum) during the three and ~~for base rate loans to 1.00% and (iv) a revision to~~nine months ended September 30, 2022.

Under the restrictions on the ability to incur debt by decreasing the maximum principal amount of priority debt allowed from 15% to 7.5% of the consolidated tangible assets and a decrease on the maximum amount of receivables that could be securitized from $200 million to $100 million. All other material terms and conditions of the ~~Senior~~Amended and Restated Credit ~~Facility remained unchanged~~Agreement, interest rates per annum applicable to the Term Loan are stated as ~~discussed in Note 10~~LIBOR plus between 0.875% to ~~our consolidated financial statements included in our 2016 Annual Report.~~1.625%, depending on the Company’s debt rating by either Moody’s

As of September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, we ~~had~~had no ~~amounts~~revolving loans outstanding ~~under the Revolving Credit Facility. We~~and we had outstanding letters of credit of ~~$91.8~~$56.9 million and ~~$102.6~~$78.3 million at September 30, ~~2017~~2022 and December 31, ~~2016, respectively, which reduced~~2021, respectively. On October 14, 2022, the Company borrowed $45.0 million on the Revolving Credit Facility for general corporate purposes. After consideration of the financial covenants under our ~~borrowing capacity~~Senior Credit Facility and outstanding letters of credit, as of September 30, 2022, the amount available for borrowings was limited to ~~$708.2~~$157.3 million ~~and $553.5 million, respectively.~~ . As of December 31, 2021, the amount available for borrowings under our Revolving Credit Facility was $614.2 million.

Our compliance with applicable financial covenants under the Senior Notes and Credit Facility is are tested ~~quarterly, and we complied~~quarterly. We were in compliance with all applicable covenants as of September 30, ~~2017.~~

We may prepay loans under our Senior Credit Facility in whole or in part, without premium or penalty, at any time. A commitment fee, which is payable quarterly on the daily unused portions of the Senior Credit Facility, was 0.150% (per annum) during the period ended September 30, 2017. During the nine months ended September 30, 2017, we made scheduled repayments of $45.0 million under our Term Loan Facility.2022. We have scheduled repayments on our Term Loan of ~~$15.0~~$10.0 million due in each of the ~~next~~subsequent four quarters ~~on our Term Loan Facility.~~through September 30, 2023.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models may be applied. Assets and liabilities recorded at fair value in our condensed consolidated balance sheets are categorized by hierarchical levels based upon the level of judgment ~~associated~~ associated with the inputs used to measure their fair values. Recurring fair value measurements are limited to investments in derivative instruments. The fair value measurements of our derivative instruments are determined using models that maximize the use of the observable market inputs including interest rate curves and both forward and spot prices for currencies, and are classified as Level II under the fair value hierarchy. The fair values of our derivatives are included in Note 5.

~~Our~~our financial instruments ~~are presented at fair value~~as reflected in our condensed consolidated balance sheets approximates fair value, with the exception of our long-term debt. The estimated fair value of our long-term debt, excluding the Senior Notes, ~~approximates~~approximates the carrying value and is ~~classified as~~determined using Level II inputs under the fair value hierarchy. The carrying value of our debt is included in Note 6. The estimated fair value of our Senior Notes at September 30, ~~2017~~2022 was ~~$1,400.1~~$769.0 million compared to the carrying value of ~~$1,379.0 million.~~$988.9 million. The estimated fair value of the Senior Notes is based on Level I quoted market rates. The carrying amounts of our other financial instruments (e.g., cash and cash equivalents, accounts receivable, net, accounts payable and short-term debt) ~~approximated~~approximated fair value due to their short-term nature at September 30, ~~2017~~2022 and December 31, ~~2016.~~2021.

Inventories, net consisted of the following:


	September 30,		December 31,
(Amounts in thousands)	2022		2021
Raw materials	$	342,308	$	318,348
Work in process	295,425		242,143
Finished goods	236,584		213,096

Less: Excess and obsolete reserve	(94,868)		(95,300)
Inventories, net	$	779,449	$	678,287

September 30,
December 31,
(Amounts in thousands) 2017 2016
Raw materials $ 374,154
$ 348,012
Work in process 682,522
629,766
Finished goods 208,465
206,086
Less: Progress billings (233,040 ) (216,783 )
Less: Excess and obsolete reserve (80,503 ) (69,391 )
Inventories, net $ 951,598
$ 897,690

In the second quarter of 2017 we recorded a $16.9 million inventory charge for costs incurred related to a contract to supply oil and gas platform equipment to an end user in Latin America. This charge was primarily related to our IPD reporting segment and resulted in a decrease to finished goods.

9.Earnings Per Share

The following is a reconciliation of net earnings of Flowserve Corporation and weighted average shares for calculating net earnings per common share. Earnings per weighted average common share outstanding was calculated as follows:


	Three Months Ended September 30,
(Amounts in thousands, except per share data)	2022		2021
Net earnings of Flowserve Corporation	$	38,400	$	49,785
Dividends on restricted shares not expected to vest	—		—
Earnings attributable to common and participating shareholders	$	38,400	$	49,785
Weighted average shares:
Common stock	130,662		130,210
Participating securities	41		32
Denominator for basic earnings per common share	130,703		130,242
Effect of potentially dilutive securities	699		547
Denominator for diluted earnings per common share	131,402		130,789
Earnings per common share:
Basic	$	0.29	$	0.38
Diluted	0.29		0.38

Three Months Ended September 30,
(Amounts in thousands, except per share data) 2017 2016
Net earnings (loss) of Flowserve Corporation $ 47,605
$ (15,841 )
Dividends on restricted shares not expected to vest —
—
Earnings (loss) attributable to common and participating shareholders $ 47,605
$ (15,841 )
Weighted average shares:
Common stock 130,681
130,299
Participating securities 79
—
Denominator for basic earnings per common share 130,760
130,299
Effect of potentially dilutive securities 636
—
Denominator for diluted earnings per common share 131,396
130,299
Earnings (loss) per common share:
Basic $ 0.36
$ (0.12 )
Diluted 0.36
(0.12 )

Diluted earnings per share above is based upon the weighted average number of shares as determined for basic earnings per share plus shares potentially issuable in conjunction with stock options and Restricted Shares. ~~As a result of the net loss for the three months ended September 30, 2016, we excluded 803,251 of unvested Restricted Shares from the calculation of diluted EPS due to their anti-dilutive effect.~~

10.Legal Matters and Contingencies

Asbestos-Related Claims

We are a defendant in a substantial number of lawsuits that seek to recover damages for personal injury allegedly caused by exposure to asbestos-containing products manufactured and/or distributed by our heritage companies in the past. Typically, these lawsuits have been brought against multiple defendants in state and federal courts. While the overall number of asbestos-related claims in which we or our predecessors have been named has generally declined in recent years, there can be no assurance that this trend will continue, or that the average cost per claim to us will not further increase. Asbestos-containing materials incorporated into any such products were encapsulated and used as internal components of process equipment, and we do not believe that ~~any~~ significant emission of asbestos fibers occurred during the use of this equipment.

Our practice is to vigorously contest and resolve these claims, and we have been successful in resolving a majority of claims with little or no ~~payment.~~ payment, other than legal fees. Activity related to asbestos claims during the periods indicated was as follows:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Beginning claims(1)	8,917	8,559	8,712	8,366
New claims	568	625	1,863	1,857
Resolved claims	(624)	(645)	(1,714)	(1,668)
Other(2)	(4)	82	(4)	66
Ending claims(1)	8,857	8,621	8,857	8,621

____________________

(1) Beginning and ending claims data in each period excludes inactive claims, as the Company considers it unlikely that inactive cases will be pursued further by the respective plaintiffs.A claim is classified as inactive either due to inactivity over a period of three years or if designated as inactive by the applicable court.

(2) Represents the net change in claims as a result of the reclassification of active cases as inactive and inactive cases as active during the period indicated.Cases moved from active to inactive status are removed from the claims count without being accounted for as a "Resolved claim", and cases moved from inactive status to active status are added back to the claims count without being accounted for as a “New claim”.

The following table presents the changes in the estimated asbestos liability:


(Amounts in thousands)	2022		2021
Beginning balance, January 1,	$	94,423	$	99,530
Asbestos liability adjustments, net	14,782		4,783
Cash payment activity	(4,231)		(5,681)
Other, net	(3,350)		(931)
Ending balance, September 30,	$	101,624	$	97,701

During the three and nine months ended September 30, 2022 the Company incurred expenses (net of insurance) of approximately $9.4 million and $13.0 million, respectively, compared to $5.6 million and $10.1 million, respectively, for the same periods in 2021 to defend, resolve or otherwise dispose of outstanding claims, including legal and other related expenses. During the three months ended September 30, 2022 and 2021, the Company updated its annual actuarial study to estimate the liability for pending and future claims not yet asserted, and which are probable and estimable and recorded the expenses associated with the true-up to the actuarial study. These expenses are included within SG&A in our condensed consolidated statements of income.

The Company had cash inflows (outflows) (net of insurance and/or indemnity) to defend, resolve or otherwise dispose of outstanding claims, including legal and other related expenses of approximately $0.7 million and $(6.8) million, respectively, during the nine months ended September 30, 2022 and 2021, respectively.

Historically, a high percentage of resolved claims have been covered by applicable insurance or indemnities from other companies, and we believe that a substantial majority of existing claims should continue to be covered by insurance or ~~indemnities. Accordingly,~~indemnities, in whole or in part.

We believe that our reserve for asbestos claims and the receivable for recoveries from insurance carriers that we have recorded ~~a liability~~ for ~~our~~these claims reflects reasonable and probable estimates of these amounts. Our estimate of our ultimate exposure for asbestos claims, however, is subject to significant uncertainties, including the ~~most likely settlement~~timing and number and types of ~~asserted~~new claims, ~~and a related receivable from insurers or other companies for our estimated recovery, to the extent we believe that the amounts of recovery are probable and not otherwise in dispute. While~~ unfavorable court rulings, judgments or settlement terms ~~regarding~~and ultimate costs to settle. Additionally, the continued viability of carriers may also impact the amount of probable insurance recoveries. We believe that these ~~claims~~uncertainties could have a material adverse impact on our business, financial condition, results of operations and cash flows, though we currently believe the likelihood is remote.

Additionally, we have claims pending against certain insurers that, if resolved more favorably than reflected in the recorded receivables, would result in discrete gains in the applicable quarter. ~~We are currently unable to estimate the impact, if any,~~

Table of ~~unasserted asbestos-related claims, although future claims would also be subject to then existing indemnities and insurance coverage.~~Contents

~~United Nations Oil-for-Food Program~~

In mid-2006, the French authorities began an investigation of over 170 French companies, of which one of our French subsidiaries was included, concerning suspected inappropriate activities conducted in connection with the United Nations Oil for Food Program. As previously disclosed, the French investigation of our French subsidiary was formally opened in the first quarter of 2010, and our French subsidiary filed a formal response with the French court. In July 2012, the French court ruled against our procedural motions to challenge the constitutionality of the charges and quash the indictment. Hearings occurred on April 1-2, 2015, and the Company presented its defense and closing arguments. On June 18, 2015, the French court issued its ruling dismissing the case against the Company and the other defendants. However, on July 1, 2015, the French prosecutor lodged an appeal and we anticipate that the hearing for the appeal will be held in 2018. We currently do not expect to incur additional case resolution costs of a material amount in this matter. However, if the French authorities ultimately take enforcement action against our French subsidiary regarding its investigation, we may be subject to monetary and non-monetary penalties, which we currently do not believe will have a material adverse financial impact on our company.

Other

We are currently involved as a potentially responsible party at five former public waste disposal sites in various stages of evaluation or remediation. The projected cost of remediation at these sites, as well as our alleged "fair share" allocation, will remain uncertain until all studies have been completed and the parties have either negotiated an amicable resolution or the matter has been judicially resolved. At each site, there are many other parties who have similarly been identified. Many of the other parties identified are financially strong and solvent companies that appear able to pay their share of the remediation costs. Based on our information about the waste disposal practices at these sites and the environmental regulatory process in general, we believe that it is likely that ultimate remediation liability costs for each site will be apportioned among all liable parties, including site owners and waste transporters, according to the volumes and/or toxicity of the wastes shown to have been disposed of at the sites. We believe that our financial exposure for existing disposal sites will not be materially in excess of accrued reserves.

As previously disclosed in our 2016 Annual Report, we terminated an employee of an overseas subsidiary after uncovering actions that violated our Code of Business Conduct and may have violated the Foreign Corrupt Practices Act. We completed our internal investigation into the matter, self-reported the potential violation to the United States Department of Justice (the “DOJ”) and the SEC, and continue to cooperate with the DOJ and SEC. We previously received a subpoena from the SEC requesting additional information and documentation related to the matter and have completed our response to the subpoena. We currently believe that this matter will not have a material adverse financial impact on the Company, but there can be no assurance that the Company will not be subjected to monetary penalties and additional costs. Claims

We are also a defendant in a number of other lawsuits, including product liability claims, that are insured, subject to the applicable deductibles, arising in the ordinary course of business, and we are also involved in other uninsured routine litigation incidental to our business. We currently believe none of such litigation, either individually or in the aggregate, is material to our business, operations or overall financial condition. However, litigation is inherently unpredictable, and resolutions or dispositions of claims or lawsuits by settlement or otherwise could have an adverse impact on our financial position, results of operations or cash flows for the reporting period in which any such resolution or disposition occurs.

Although none of the aforementioned potential liabilities can be quantified with absolute certainty except as otherwise indicated above, we have established or adjusted reserves covering exposures relating to contingencies, to the extent believed to be reasonably estimable and probable based on past experience and available facts. While additional exposures beyond these reserves could exist, they currently cannot be estimated. We will continue to evaluate and update the reserves as necessary and appropriate.

11.Pension and Postretirement Benefits

~~Table of Contents~~


~~11.~~	~~Retirement and Postretirement Benefits~~

Components of the net periodic cost for ~~retirement~~pension and postretirement benefits for the three months ended September 30, ~~2017~~2022 and ~~2016~~2021 were as follows:


	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						Postretirement Medical Benefits							U.S. Defined Benefit Plans				Non-U.S. Defined Benefit Plans				Postretirement Medical Benefits
(Amounts in millions)	2017			2016			2017			2016			2017			2016			(Amounts in millions)	2022		2021		2022		2021		2022		2021
Service cost	$	5.6		$	5.6		$	1.7		$	1.8		$	—		$	—		Service cost	$	6.1	$	6.3	$	1.3	$	1.8	$	—	$	—
Interest cost	4.3			4.8			2.2			2.9			0.3			0.3			Interest cost	3.3		2.9		1.3		1.3		0.1		0.1
Expected return on plan assets	(6.2		)	(6.0		)	(2.1		)	(2.7		)	—			—			Expected return on plan assets	(6.3)		(6.3)		(1.2)		(1.5)		—		—
Amortization of prior service cost	—			0.2			—			—			—			—
Amortization of unrecognized net loss (gain)	1.5			1.2			0.9			1.3			(0.1		)	(0.1		)
Amortization of unrecognized prior service cost and other costs																			Amortization of unrecognized prior service cost and other costs	—		—		(0.1)		—		—		—
Amortization of unrecognized net loss																			Amortization of unrecognized net loss	0.9		1.9		0.5		1.1		0.1		—
Net periodic cost recognized	$	5.2		$	5.8		$	2.7		$	3.3		$	0.2		$	0.2		Net periodic cost recognized	$	4.0	$	4.8	$	1.8	$	2.7	$	0.2	$	0.1

Components of the net periodic cost for ~~retirement~~pension and postretirement benefits for the nine months ~~months~~ ended September 30, ~~2017~~2022 and ~~2016~~2021 were as follows:


	U.S. Defined Benefit Plans				Non-U.S. Defined Benefit Plans				Postretirement Medical Benefits
(Amounts in millions)	2022		2021		2022		2021		2022		2021
Service cost	$	18.5	$	18.9	$	4.3	$	5.5	$	—	$	—
Interest cost	9.9		8.9		4.6		4.1		0.3		0.3
Expected return on plan assets	(19.0)		(19.0)		(4.1)		(4.6)		—		—
Amortization of unrecognized prior service cost and other costs	0.1		0.1		0.2		0.2		0.1		0.1
Amortization of unrecognized net loss	2.6		5.8		1.9		3.3		0.2		—
Net periodic cost recognized	$	12.1	$	14.7	$	6.9	$	8.5	$	0.6	$	0.4

The components of net periodic cost for pension and postretirement benefits other than service costs are included in other income (expense), net in our condensed consolidated statements of income.

U.S.
Defined Benefit Plans

Non-U.S.
Defined Benefit Plans

Postretirement
Medical Benefits
(Amounts in millions) 2017 2016 2017 2016 2017 2016
Service cost $ 16.7
$ 16.9
$ 5.1
$ 5.3
$ —
$ —
Interest cost 12.7
14.3
6.6
8.8
0.7
0.9
Expected return on plan assets (18.4 ) (18.0 ) (6.3 ) (8.0 ) —
—
Amortization of prior service cost 0.1
0.4
—
—
0.1
0.1
Amortization of unrecognized net loss (gain) 4.5
3.7
2.6
3.7
(0.2 ) (0.3 )
Net periodic cost recognized $ 15.6
$ 17.3
$ 8.0
$ 9.8
$ 0.6
$ 0.7

12.Shareholders’ Equity

Dividends – Generally, our dividend date-of-record is in the last month of the quarter, and the dividend is paid the following month. Any subsequent dividends will be reviewed by our Board of Directors and declared in its ~~discretion dependent on its assessment of our financial situation and business outlook at the applicable time.~~discretion.

Dividends declared per share were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Dividends declared per share	$	0.20	$	0.20	$	0.60	$	0.60

Share Repurchase Program– ~~On November 13,~~In 2014, our Board of Directors approved a $500.0 million share repurchase authorization. Our share repurchase program does not have an expiration date and we reserve the right to limit or terminate the repurchase program at ~~anytime~~any time without notice.

We had no repurchases of shares of our outstanding common stock for both of the three ~~and nine~~ months ended September 30, ~~2017~~2022 and ~~2016.~~2021. We had no repurchases of shares of our outstanding common stock during the nine months ended September 30, 2022, compared to 440,000 shares repurchased for $17.5 million for the same period in 2021. As of September 30, ~~2017~~2022, we had ~~$160.7~~$96.1 million of remaining capacity under our current share repurchase program.

For the three months ended September 30, ~~2017,~~2022, we earned ~~$68.4~~$42.5 million before taxes and ~~provided~~recorded a provision for income taxes of ~~$19.6~~$1.8 million resulting in an effective tax rate of ~~28.7%~~4.2%. For the nine months ended September 30, ~~2017,~~2022, we earned ~~$196.1~~$89.7 million before taxes and ~~provided~~recorded a provision for income taxes of ~~$85.8~~$16.6 million resulting in an effective tax rate of ~~43.8%~~18.5%. The effective tax rate varied from the U.S. federal statutory rate for the three months ended September 30, 2022 primarily due to the mitigation of previously recorded BEAT liability and the net impact of foreign operations. The effective tax rate varied from the U.S. federal statutory rate for the nine months ended September 30, ~~2017~~2022 primarily due to the mitigation of previously recorded BEAT liability, the current and anticipated tax impact of the Russia-Ukraine conflict on our business and the net impact of foreign ~~operations, losses in certain foreign jurisdictions for which no tax benefit was provided and taxes related to the sale of the Gestra and Vogt businesses.~~operations.

For the three months ended September 30, ~~2016,~~ ~~we incurred a pre-tax loss of~~ ~~$12.2 million~~ ~~and provided for income taxes of~~ ~~$2.8 million~~ ~~resulting in an effective tax rate of negative~~ ~~23.2%. For the nine months ended September 30, 2016,~~2021, we earned ~~$123.1~~$41.4 million before taxes and ~~provided for~~recorded a benefit from income taxes of ~~$49.5~~$10.4 million resulting in an effective tax rate of ~~40.2%~~(25.2)%. For the nine months ended September 30, 2021, we earned $112.8 million before taxes and recorded a benefit from income taxes of $3.9 million resulting in an effective tax rate of (3.5)%. The effective tax rate varied from the U.S. federal statutory rate for the three ~~and nine~~ months ended September 30, ~~2016~~2021 primarily due to the net impact of foreign operations and the reversal of certain deferred tax ~~impacts~~liabilities as a result of legal entity restructuring of foreign holding companies. The effective tax rate varied from ~~our Realignment Programs~~the U.S. federal statutory rate for the nine months ended September 30, 2021, primarily due to higher withholding taxes related to transactions with and ~~losses~~amongst various foreign subsidiaries, offset by the net impact of foreign operations, the reversal of certain deferred tax liabilities as a result of legal entity restructuring of foreign holding companies and favorable resolution of audits in ~~certain~~ foreign ~~jurisdictions for which no tax benefit was provided.~~

As of September 30, ~~2017,~~2022, the amount of unrecognized tax benefits increased by ~~$3.1~~$6.5 million from December 31, ~~2016.~~2021. With limited exception, we are no longer subject to U.S. federal income tax audits for years through ~~2015,~~2017, state and local income tax audits for years through ~~2011~~2015 or non-U.S. income tax audits for years through ~~2010.~~2014. We are currently under examination for various years in ~~Austria, France,~~Canada, China, Germany, India, Indonesia, Italy, ~~Singapore,~~Malaysia, Kenya, Madagascar, Mexico, the Philippines, Saudi Arabia, the U.S. and Venezuela.

It is reasonably possible that within the next 12 months the effective tax rate will be impacted by the resolution of some or all of the matters audited by various taxing authorities. It is also reasonably possible that we will have the statute of limitations close in various taxing jurisdictions within the next 12 months. As such, we estimate we could record a reduction in our tax expense of approximately $8$14 million within the next 12 months.

The Company maintains a full valuation allowance against the net deferred tax assets in certain foreign tax jurisdictions as of September 30, 2022. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of net deferred tax assets. It is possible that within the next 12 months there may be sufficient positive evidence to release a portion or all of the valuation allowance in certain foreign tax jurisdictions. Release of these valuation allowances would result in a benefit to income tax expense for the period the release is recorded, which could have a material impact on net earnings. The timing and amount of the potential valuation allowance release are subject to significant management judgment and the level of profitability achieved.

Table of Contents


~~14.~~	~~Segment Information~~

14.Segment Information

The following is a summary of the financial information of the reportable segments reconciled to the amounts reported in the condensed consolidated financial statements:


	Three Months Ended September 30, 2022
(Amounts in thousands)	FPD		FCD		Subtotal–Reportable Segments		Eliminations and All Other		Consolidated Total
Sales to external customers	$	591,346	$	281,535	$	872,881	$	—	$	872,881
Intersegment sales	1,264		1,033		2,297		(2,297)		—
Segment operating income	38,912		29,718		68,630		(44,413)		24,217

	Three Months Ended September 30, 2021
	FPD		FCD		Subtotal–Reportable Segments		Eliminations and All Other		Consolidated Total
Sales to external customers	$	601,108	$	265,010	$	866,118	$	—	$	866,118
Intersegment sales	731		1,114		1,845		(1,845)		—
Segment operating income	59,071		27,743		86,814		(29,452)		57,362


	Nine Months Ended September 30, 2022
(Amounts in thousands)	FPD		FCD		Subtotal–Reportable Segments		Eliminations and All Other		Consolidated Total
Sales to external customers	$	1,779,758	$	796,403	$	2,576,161	$	—	$	2,576,161
Intersegment sales	3,307		2,426		5,733		(5,733)		—
Segment operating income	117,260		75,324		192,584		(100,666)		91,918

	Nine Months Ended September 30, 2021
	FPD		FCD		Subtotal–Reportable Segments		Eliminations and All Other		Consolidated Total
Sales to external customers	$	1,820,708	$	800,896	$	2,621,604	$	—	$	2,621,604
Intersegment sales	1,463		2,211		3,674		(3,674)		—
Segment operating income	180,698		89,685		270,383		(84,755)		185,628

Three Months Ended September 30, 2017
(Amounts in thousands) Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Sales to external customers $ 416,031
$ 180,347
$ 287,002
$ 883,380
$ —
$ 883,380
Intersegment sales 8,157
9,388
686
18,231
(18,231 ) —
Segment operating income (loss) 51,782
(3,551 ) 48,497
96,728
(22,709 ) 74,019

Three Months Ended September 30, 2016
(Amounts in thousands) Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Sales to external customers $ 451,354
$ 196,172
$ 298,413
$ 945,939
$ —
$ 945,939
Intersegment sales 7,098
7,126
937
15,161
(15,161 ) —
Segment operating (loss) income (1) (21,982 ) (17,062 ) 53,717
14,673
(14,561 ) 112

(1) Prior period amounts have been revised to reflect the correction of certain immaterial errors. See Note 2 for more information. Of the $2.9 million adjustment to consolidated operating (loss) income, $3.2 million related to the EPD segment, $(1.4) million related to the IPD segment, $0.9 million related to the FCD segment and $0.2 million related to Eliminations and All Other.

15.Accumulated Other Comprehensive Income (Loss)

(1) Prior period amounts have been revised to reflect the correction of certain immaterial errors. See Note 2 for more information. Of the $(4.8) million adjustment to consolidated operating income (loss), $(1.1) million related to the EPD segment, $(4.3) million related to the IPD segment, $0.4 million related to the FCD segment and $0.2 million related to Eliminations and All Other.

The following table presents the changes in ~~accumulated other comprehensive loss ("AOCL"),~~AOCL, net of tax for the three months ended September 30, ~~2017~~2022 and ~~2016:~~

2021:

2017 2016
(Amounts in thousands) Foreign currency translation items(1) Pension and other post-retirement effects Cash flow hedging activity Total(1) Foreign currency translation items(1) Pension and other post-retirement effects Cash flow hedging activity Total(1)
Balance - July 1 $ (415,506 ) $ (137,188 ) $ (1,154 ) $ (553,848 ) $ (408,605 ) $ (114,525 ) $ (2,255 ) $ (525,385 )
Other comprehensive income (loss) before reclassifications 17,674
(2,004 ) 12
15,682
(15,587 ) 1,952
39
(13,596 )
Amounts reclassified from AOCL —
1,560
—
1,560
—
1,767
521
2,288
Net current-period other comprehensive income (loss) 17,674
(444 ) 12
17,242
(15,587 ) 3,719
560
(11,308 )
Balance - September 30 $ (397,832 ) $ (137,632 ) $ (1,142 ) $ (536,606 ) $ (424,192 ) $ (110,806 ) $ (1,695 ) $ (536,693 )


	2022								2021
(Amounts in thousands)	Foreign currency translation items(1)		Pension and other post-retirement effects		Cash flow hedging activity (2)		Total		Foreign currency translation items(1)		Pension and other post-retirement effects		Cash flow hedging activity (2)		Total
Balance - July 1	$	(536,929)	$	(91,508)	$	(1,278)	$	(629,715)	$	(453,328)	$	(140,405)	$	(271)	$	(594,004)
Other comprehensive income (loss) before reclassifications (3)	(89,282)		7,961		—		(81,321)		(15,561)		2,300		—		(13,261)
Amounts reclassified from AOCL	—		(1,800)		29		(1,771)		—		2,655		(1,347)		1,308
Net current-period other comprehensive income (loss) (3)	(89,282)		6,161		29		(83,092)		(15,561)		4,955		(1,347)		(11,953)
Balance - September 30	$	(626,211)	$	(85,347)	$	(1,249)	$	(712,807)	$	(468,889)	$	(135,450)	$	(1,618)	$	(605,957)

(1) Includes foreign currency translation adjustments attributable to noncontrolling interests of ~~$3.9~~$5.9 million and ~~$3.5~~$6.1 million at July 1, ~~2017~~2022 and ~~2016,~~2021, respectively, and ~~$3.9~~$5.8 million and ~~$3.5~~$6.1 million ~~for~~at September 30, ~~2017~~2022 and ~~2016,~~2021, respectively. ~~Includes net investment hedge losses~~Also includes the impacts from the changes in fair value of ~~$6.3~~our cross-currency swaps, which were $21.3 million and ~~$2.2~~$12.5 million ~~net of deferred taxes,~~ for the three months ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively.

(2) Other comprehensive loss before reclassifications and amounts reclassified from AOCL to interest expense related to designated cash flow hedges.

(3) Amounts in parentheses indicate ~~debits.~~an increase to AOCL.

The following table presents the reclassifications out of AOCL:

(1) Amounts in parentheses indicate decreases to income. None of the ~~reclass~~reclassified amounts have a noncontrolling interest component.

(2) These ~~accumulated other comprehensive loss~~AOCL components are included in the computation of net periodic pension cost. See Note 11 for additional details.

Table of Contents

The following table presents the changes in AOCL, net of tax for the nine months ended September 30, ~~2017~~2022 and ~~2016:~~2021:


	2017												2016													2022								2021
(Amounts in thousands)	Foreign currency translation items(1)			Pension and other post-retirement effects			Cash flow hedging activity			Total(1)			Foreign currency translation items(1)			Pension and other post-retirement effects			Cash flow hedging activity			Total(1)			(Amounts in thousands)	Foreign currency translation items(1)		Pension and other post-retirement effects		Cash flow hedging activity (2)		Total		Foreign currency translation items(1)		Pension and other post-retirement effects		Cash flow hedging activity (2)		Total
Balance - January 1	$	(483,609	)	$	(136,530	)	$	(1,238	)	$	(621,377	)	$	(411,615	)	$	(120,461	)	$	(3,458	)	$	(535,534	)	Balance - January 1	$	(456,025)	$	(101,665)	$	(1,336)	$	(559,026)	$	(456,437)	$	(146,723)	$	(488)	$	(603,648)
Other comprehensive income (loss) before reclassifications	85,225			(5,818		)	73			79,480			(12,577		)	4,330			633			(7,614		)
Other comprehensive income (loss) before reclassifications (3)																									Other comprehensive income (loss) before reclassifications (3)	(170,187)		22,325		—		(147,862)		(12,452)		3,104		—		(9,348)
Amounts reclassified from AOCL	552			4,716			23			5,291			—			5,325			1,130			6,455			Amounts reclassified from AOCL	—		(6,007)		87		(5,920)		—		8,169		(1,130)		7,039
Net current-period other comprehensive income (loss)	85,777			(1,102		)	96			84,771			(12,577		)	9,655			1,763			(1,159		)
Net current-period other comprehensive income (loss) (3)																									Net current-period other comprehensive income (loss) (3)	(170,187)		16,318		87		(153,782)		(12,452)		11,273		(1,130)		(2,309)
Balance - September 30	$	(397,832	)	$	(137,632	)	$	(1,142	)	$	(536,606	)	$	(424,192	)	$	(110,806	)	$	(1,695	)	$	(536,693	)	Balance - September 30	$	(626,212)	$	(85,347)	$	(1,249)	$	(712,808)	$	(468,889)	$	(135,450)	$	(1,618)	$	(605,957)

(1) Includes foreign currency translation adjustments attributable to noncontrolling interests of ~~$3.4~~$4.6 million and ~~$2.7~~$5.9 million at January 1, ~~2017~~2022 and ~~2016~~2021, respectively, and ~~$3.9~~$5.8 million and ~~$3.5~~$6.1 million ~~for~~at September 30, ~~2017~~2022 and ~~2016,~~2021, respectively. ~~Includes net investment hedge losses~~Also includes the impacts from the changes in fair value of ~~$19.6~~our cross-currency swaps, which were $56.3 million and ~~$10.3~~$22.3 million⁽²⁾ ~~net of deferred taxes,~~ for the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively.

(2) Other comprehensive loss before reclassifications and amounts reclassified from AOCL to interest expense related to designated cash flow hedges.

(3) Amounts in parentheses indicate ~~debits.~~an increase to AOCL.

~~(2) Previously disclosed as a loss of $6.1 million in 2016. No incremental impact on our consolidated financial condition or result of operations.~~

The following table presents the reclassifications out of AOCL:


		Nine Months Ended September 30,
(Amounts in thousands)	Affected line item in the statement of income	2022(1)		2021(1)












Pension and other postretirement effects
Amortization of actuarial losses(2)	Other income (expense), net	$	4,653	$	(9,126)
Prior service costs(2)	Other income (expense), net	429		(457)
	Tax benefit	925		1,414
	Net of tax	$	6,007	$	(8,169)

Cash flow hedging activity
Amortization of Treasury rate lock	Interest income (expense)	$	(114)	$	1,478
	Tax benefit (expense)	27		(348)
	Net of tax	$	(87)	$	1,130

Nine Months Ended September 30,
(Amounts in thousands) Affected line item in the statement of income 2017(1) 2016 (1)
Foreign currency translation items
Release of cumulative translation adjustments due to sale of business(2) Gain on sale of business $ (552 ) $ —
Tax benefit —
—
Net of tax $ (552 ) $ —

Cash flow hedging activity
Foreign exchange contracts
Sales $ (30 ) $ (1,531 )
Tax benefit 7
401
Net of tax $ (23 ) $ (1,130 )

Pension and other postretirement effects
Amortization of actuarial losses(2) $ (6,885 ) $ (7,184 )
Prior service costs(2) (172 ) (458 )
Tax benefit 2,341
2,317
Net of tax $ (4,716 ) $ (5,325 )

(1) Amounts in parentheses indicate decreases to income. None of the ~~reclass~~reclassified amounts have a noncontrolling interest component.

(2) These ~~accumulated other comprehensive loss~~AOCL components are included in the computation of net periodic pension cost. See Note 11 for additional details.

Table of Contents


~~16.~~	~~Realignment Programs~~

~~In the first quarter of 2015, we initiated a realignment program ("R1~~ 16.Realignment ~~Program") to reduce and optimize certain non-strategic QRCs and manufacturing facilities.~~ Programs

In the second quarter of ~~2015,~~2020, we identified and initiated ~~a second~~certain realignment ~~program ("R2 Realignment Program")~~activities to ~~better align~~right-size our organizational operations based on the current business environment, with the overall objective to reduce our workforce costs, ~~and improve long-term efficiency,~~ including ~~further~~ manufacturing optimization through the consolidation of certain facilities ~~a reduction in our workforce, the transfer of~~("Realignment Program"). The realignment activities ~~from high-cost regions to lower-cost facilities and the divestiture of certain non-strategic assets.~~

~~The R1 Realignment Program and the R2 Realignment Program (collectively the "Realignment Programs")~~ consist of ~~both~~ restructuring and non-restructuring charges. Restructuring charges represent costs associated with the relocation ~~or reorganization~~ of certain business activities and facility closures and include related severance costs. Non-restructuring charges are primarily employee severance associated with the workforce ~~reductions to reduce redundancies.~~reductions. Expenses are primarily reported in ~~COS~~cost of sales ("COS") or selling, general and administrative ("SG~~&A,~~&A"), as applicable, in our ~~condensed~~ consolidated statements of income. We anticipate a total investment in these ~~programs~~activities of approximately ~~$360~~$95 million ~~including projects~~and the vast majority of the charges were incurred in ~~process or under final evaluation. We anticipate to incur the remaining charges throughout~~2020 and 2021 with the remainder ~~of 2017~~to be incurred in 2022.There are certain other realignment activities that are currently being evaluated, but have not yet been finalized and ~~into 2018.~~therefore are not included in the above anticipated total investment.

Generally, the aforementioned charges will be paid in cash, except for asset write-downs, which are non-cash charges. The following is a summary of total charges, net of adjustments, incurred related to ~~the~~our Realignment ~~Programs:~~Program:


	Three Months Ended September 30, 2022
(Amounts in thousands)	FPD		FCD		Subtotal–Reportable Segments		All Other		Consolidated Total
Realignment Charges
Restructuring Charges
COS	$	(456)	$	26	$	(430)	$	—	$	(430)
SG&A	—		2		2		—		2

	$	(456)	$	28	$	(428)	$	—	$	(428)
Non-Restructuring Charges
COS	$	39	$	(4)	$	35	$	—	$	35
SG&A	74		5		79		18		97
	$	113	$	1	$	114	$	18	$	132












Total Realignment Charges
COS	$	(417)	$	22	$	(395)	$	—	$	(395)
SG&A	74		7		81		18		99

Total	$	(343)	$	29	$	(314)	$	18	$	(296)

Three Months Ended September 30, 2017
(Amounts in thousands) Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Restructuring Charges
     COS $ 5,252
$ 19
$ 5,396
$ 10,667
$ —
$ 10,667
     SG&A 831
28
364
1,223
(8 ) 1,215
     Income tax expense 1,000
—
—
1,000
—
1,000
$ 7,083
$ 47
$ 5,760
$ 12,890
$ (8 ) $ 12,882
Non-Restructuring Charges

     COS $ 1,793
$ 2,002
$ (242 ) $ 3,553
$ —
$ 3,553
     SG&A (113 ) (407 ) 658
138
1,218
1,356
$ 1,680
$ 1,595
$ 416
$ 3,691
$ 1,218
$ 4,909
Total Realignment Charges
     COS $ 7,045
$ 2,021
$ 5,154
$ 14,220
$ —
$ 14,220
     SG&A 718
(379 ) 1,022
1,361
1,210
$ 2,571
     Income tax expense 1,000
—
—
1,000
—
$ 1,000
Total $ 8,763
$ 1,642
$ 6,176
$ 16,581
$ 1,210
$ 17,791

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	Three Months Ended September 30, 2021
(Amounts in thousands)	FPD		FCD		Subtotal–Reportable Segments		All Other		Consolidated Total
Realignment Charges
Restructuring Charges
COS	$	1,659	$	185	$	1,844	$	—	$	1,844
SG&A	38		(7)		31		—		31

	$	1,697	$	178	$	1,875	$	—	$	1,875
Non-Restructuring Charges
COS	$	614	$	124	$	738	$	—	$	738
SG&A	(290)		6		(284)		621		337
	$	324	$	130	$	454	$	621	$	1,075
Total Realignment Charges
COS	$	2,273	$	309	$	2,582	$	—	$	2,582
SG&A	(252)		(1)		(253)		621		368

Total	$	2,021	$	308	$	2,329	$	621	$	2,950


	Nine Months Ended September 30, 2022
(Amounts in thousands)	FPD		FCD		Subtotal–Reportable Segments		All Other		Consolidated Total
Realignment Charges
Restructuring Charges
COS	$	430	$	97	$	527	$	—	$	527
SG&A	—		2		2		—		2

	$	430	$	99	$	529	$	—	$	529
Non-Restructuring Charges
COS	$	(550)	$	(41)	$	(591)	$	(61)	$	(652)
SG&A	150		55		205		(248)		(43)
	$	(400)	$	14	$	(386)	$	(309)	$	(695)












Total Realignment Charges
COS	$	(120)	$	56	$	(64)	$	(61)	$	(125)
SG&A	150		57		207		(248)		(41)

Total	$	30	$	113	$	143	$	(309)	$	(166)

Three Months Ended September 30, 2016
(Amounts in thousands) Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Restructuring Charges
     COS $ 5,711
$ 15,599
$ 796
$ 22,106
$ —
$ 22,106
     SG&A 393
3,928
20
4,341
(32 ) 4,309
     Income tax expense 2,000
2,800
600
5,400
—
5,400
$ 8,104
$ 22,327
$ 1,416
$ 31,847
$ (32 ) $ 31,815
Non-Restructuring Charges

     COS $ 2,707
$ 445
$ (749 ) $ 2,403
$ (6 ) $ 2,397
     SG&A 1,010
(344 ) 623
1,289
1,385
2,674
$ 3,717
$ 101
$ (126 ) $ 3,692
$ 1,379
$ 5,071
Total Realignment Charges
     COS $ 8,418
$ 16,044
$ 47
$ 24,509
$ (6 ) $ 24,503
     SG&A 1,403
3,584
643
5,630
1,353
$ 6,983
     Income tax expense 2,000
2,800
600
5,400
—
$ 5,400
Total $ 11,821
$ 22,428
$ 1,290
$ 35,539
$ 1,347
$ 36,886

Nine Months Ended September 30, 2017
(Amounts in thousands) Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Restructuring Charges
     COS $ 5,444
$ 6,111
$ 6,575
$ 18,130
$ —
$ 18,130
     SG&A 637
213
(289 ) 561
67
628
     Income tax expense 1,000
—
—
1,000
—
1,000
$ 7,081
$ 6,324
$ 6,286
$ 19,691
$ 67
$ 19,758
Non-Restructuring Charges

     COS $ 6,965
$ 5,818
$ 2,459
$ 15,242
$ —
$ 15,242
     SG&A 7,311
9,968
3,957
21,236
3,772
25,008
$ 14,276
$ 15,786
$ 6,416
$ 36,478
$ 3,772
$ 40,250
Total Realignment Charges
     COS $ 12,409
$ 11,929
$ 9,034
$ 33,372
$ —
$ 33,372
     SG&A 7,948
10,181
3,668
21,797
3,839
25,636
     Income tax expense 1,000
—
—
1,000
—
1,000
Total $ 21,357
$ 22,110
$ 12,702
$ 56,169
$ 3,839
$ 60,008

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	Nine Months Ended September 30, 2021
(Amounts in thousands)	FPD		FCD		Subtotal–Reportable Segments		All Other		Consolidated Total
Realignment Charges
Restructuring Charges
COS	$	7,702	$	655	$	8,357	$	—	$	8,357
SG&A	705		(17)		688		—		688

	$	8,407	$	638	$	9,045	$	—	$	9,045
Non-Restructuring Charges
COS	$	6,064	$	802	$	6,866	$	590	$	7,456
SG&A	205		744		949		4,816		5,765
	$	6,269	$	1,546	$	7,815	$	5,406	$	13,221












Total Realignment Charges
COS	$	13,766	$	1,457	$	15,223	$	590	$	15,813
SG&A	910		727		1,637		4,816		6,453

Total	$	14,676	$	2,184	$	16,860	$	5,406	$	22,266

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Nine Months Ended September 30, 2016
(Amounts in thousands) Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Restructuring Charges
     COS $ 10,566
$ 17,709
$ 3,083
$ 31,358
$ —
$ 31,358
     SG&A 9,211
5,717
356
15,284
—
15,284
     Income tax expense 2,000
2,800
600
5,400
—
5,400
$ 21,777
$ 26,226
$ 4,039
$ 52,042
$ —
$ 52,042
Non-Restructuring Charges

     COS $ 3,844
$ 4,729
$ 2,970
$ 11,543
$ 8
$ 11,551
     SG&A 1,989
56
2,212
4,257
2,644
6,901
$ 5,833
$ 4,785
$ 5,182
$ 15,800
$ 2,652
$ 18,452
Total Realignment Charges
     COS $ 14,410
$ 22,438
$ 6,053
$ 42,901
$ 8
$ 42,909
     SG&A 11,200
5,773
2,568
19,541
2,644
22,185
     Income tax expense 2,000
2,800
600
5,400
—
5,400
Total $ 27,610
$ 31,011
$ 9,221
$ 67,842
$ 2,652
$ 70,494

The following is a summary of total inception to date charges, net of adjustments, related to the Realignment ~~Programs:~~Program:

Inception to Date
(Amounts in thousands) Engineered Product Division Industrial Product Division (1) Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Restructuring Charges
     COS $ 40,155
$ 46,759
$ 20,564
$ 107,478
$ —
$ 107,478
     SG&A 18,454
15,811
9,262
43,527
85
43,612
     Income tax expense(2) 10,400
9,300
1,800
21,500
—
21,500
$ 69,009
$ 71,870
$ 31,626
$ 172,505
$ 85
$ 172,590
Non-Restructuring Charges

     COS $ 23,125
$ 20,000
$ 14,392
$ 57,517
$ 8
$ 57,525
     SG&A 17,304
18,177
8,796
44,277
8,205
52,482
$ 40,429
$ 38,177
$ 23,188
$ 101,794
$ 8,213
$ 110,007
Total Realignment Charges
     COS $ 63,280
$ 66,759
$ 34,956
$ 164,995
$ 8
$ 165,003
     SG&A 35,758
33,988
18,058
87,804
8,290
96,094
     Income tax expense(2) 10,400
9,300
1,800
21,500
—
21,500
Total $ 109,438
$ 110,047
$ 54,814
$ 274,299
$ 8,298
$ 282,597

~~____________________________~~

~~(1) Includes $48.2 million of restructuring charges, primarily COS, related to the R1 Realignment Program.~~

~~(2) Income tax expense includes exit taxes as well as non-deductible costs.~~


	Inception to Date
(Amounts in thousands)	FPD		FCD		Subtotal–Reportable Segments		All Other		Consolidated Total
Realignment Charges
Restructuring Charges
COS	$	26,306	$	2,133	$	28,439	$	—	$	28,439
SG&A	716		335		1,051		(17)		1,034

	$	27,022	$	2,468	$	29,490	$	(17)	$	29,473
Non-Restructuring Charges
COS	$	24,858	$	681	$	25,539	$	581	$	26,120
SG&A	11,199		5,317		16,516		21,547		38,063
	$	36,057	$	5,998	$	42,055	$	22,128	$	64,183
Total Realignment Charges
COS	$	51,164	$	2,814	$	53,978	$	581	$	54,559
SG&A	11,915		5,652		17,567		21,530		39,097

Total	$	63,079	$	8,466	$	71,545	$	22,111	$	93,656

Restructuring charges represent costs associated with the relocation or reorganization of certain business activities and facility closures and include costs related to employee severance at closed facilities, contract termination costs, asset write-downs and other costs. Severance costs primarily include costs associated with involuntary termination benefits. Contract termination costs include costs related to the termination of operating leases or other contract termination costs. Asset write-downs include accelerated depreciation of fixed assets, accelerated amortization of intangible assets, divestiture of certain non-strategic assets and inventory write-downs. Other costs generally include costs related to employee relocation, asset relocation, vacant facility costs (i.e., taxes and insurance) and other charges.

~~Table of Contents~~

The following is a summary of restructuring charges, net of adjustments, for ~~the~~our restructuring activities related to our Realignment ~~Programs:~~Program:


	Three Months Ended September 30, 2022
(Amounts in thousands)	Severance		Contract Termination		Asset Write-Downs		Other		Total

COS	$	(309)	$	—	$	(89)	$	(32)	$	(430)
SG&A	12		—		—		(10)		2

Total	$	(297)	$	—	$	(89)	$	(42)	$	(428)


	Three Months Ended September 30, 2021
(Amounts in thousands)	Severance		Contract Termination		Asset Write-Downs		Other		Total
COS	$	(371)	$	—	$	1,282	$	933	$	1,844
SG&A	—		—		—		31		31

Total	$	(371)	$	—	$	1,282	$	964	$	1,875


	Nine Months Ended September 30, 2022
(Amounts in thousands)	Severance		Contract Termination		Asset Write-Downs		Other		Total

COS	$	260	$	—	$	170	$	97	$	527
SG&A	12		—		—		(10)		2

Total	$	272	$	—	$	170	$	87	$	529

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Three Months Ended September 30, 2017
(Amounts in thousands) Severance Contract Termination Asset Write-Downs Other Total
     COS $ 9,197
$ —
$ 59
$ 1,411
$ 10,667
     SG&A 440
—
52
723
1,215
     Income tax expense —
—
—
1,000
1,000
Total $ 9,637
$ —
$ 111
$ 3,134
$ 12,882

Three Months Ended September 30, 2016
(Amounts in thousands) Severance Contract Termination Asset Write-Downs Other Total
     COS $ 19,674
$ —
$ 1,309
$ 1,123
$ 22,106
     SG&A 2,948
—
66
1,295
4,309
     Income tax expense —
—
—
5,400
5,400
Total $ 22,622
$ —
$ 1,375
$ 7,818
$ 31,815

Nine Months Ended September 30, 2017
(Amounts in thousands) Severance Contract Termination Asset Write-Downs Other Total
     COS $ 4,978
$ 226
$ 5,210
$ 7,716
$ 18,130
     SG&A (1,377 ) —
242
1,763
628
     Income tax expense —
—
—
1,000
1,000
Total $ 3,601
$ 226
$ 5,452
$ 10,479
$ 19,758


	Nine Months Ended September 30, 2016											Nine Months Ended September 30, 2021
(Amounts in thousands)	Severance		Contract Termination		Asset Write-Downs		Other		Total		(Amounts in thousands)	Severance		Contract Termination		Asset Write-Downs		Other		Total

COS	$	22,975	$	—	$	3,853	$	4,530	$	31,358	COS	$	848	$	—	$	2,623	$	4,886	$	8,357
SG&A	5,036		—		103		10,145		15,284		SG&A	168		—		—		520		688
Income tax expense	—		—		—		5,400		5,400

Total	$	28,011	$	—	$	3,956	$	20,075	$	52,042	Total	$	1,016	$	—	$	2,623	$	5,406	$	9,045

The following is a summary of total inception to date restructuring charges, net of adjustments, related to ~~the~~our Realignment ~~Programs:~~Program:

Inception to Date
(Amounts in thousands) Severance Contract Termination Asset Write-Downs Other Total (1)
     COS(1) $ 76,922
$ 834
$ 14,127
$ 15,595
$ 107,478
     SG&A 29,390
43
1,671
12,508
43,612
     Income tax expense(2) —
—
—
21,500
21,500
Total $ 106,312
$ 877
$ 15,798
$ 49,603
$ 172,590

~~(1) Includes $48.2 million of restructuring charges, primarily COS, related to the R1 Realignment Program.~~

~~(2) Income tax expense includes exit taxes as well as non-deductible costs.~~

~~Table of Contents~~


	Inception to Date
(Amounts in thousands)	Severance		Contract Termination		Asset Write-Downs		Other		Total
COS	$	16,464	$	86	$	4,265	$	7,624	$	28,439
SG&A	263		—		14		757		1,034

Total	$	16,727	$	86	$	4,279	$	8,381	$	29,473

The following represents the activity, primarily severance charges from reductions in force, related to the restructuring ~~reserve for the Realignment Programs~~reserves for the nine months ended September 30, ~~2017~~2022 and ~~2016:~~2021:


(Amounts in thousands)	2022		2021
Balance at January 1	$	4,868	$	18,255
Charges, net of adjustments	359		6,423
Cash expenditures	(2,311)		(16,999)
Other non-cash adjustments, including currency	(1,431)		(1,039)
Balance at September 30	$	1,485	$	6,640

2017 2016
(Amounts in thousands) R1 Realignment Program R2 Realignment Program Total R1 Realignment Program R2 Realignment Program Total
Balance at December 31 $ 12,594
$ 47,733
$ 60,327
$ 25,156
$ 33,147
$ 58,303
Charges, net of adjustments (3,425 ) 16,501
13,076
7,919
28,316
36,235
Cash expenditures (10,542 ) (15,946 ) (26,488 ) (5,131 ) (22,886 ) (28,017 )
Other non-cash adjustments, including currency 3,378
(7,940 ) (4,562 ) (7,695 ) (864 ) (8,559 )
Balance at September 30 $ 2,005
$ 40,348
$ 42,353
$ 20,249
$ 37,713
$ 57,962


~~Item 2.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and notes thereto, and the other financial data included elsewhere in this Quarterly Report. The following discussion should also be read in conjunction with our audited consolidated financial statements, and notes thereto, and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A") included in our ~~2016~~2021 Annual Report.

EXECUTIVE OVERVIEW

Our Company

We ~~believe that we~~ are a world-leading manufacturer and aftermarket service provider of comprehensive flow control systems. We develop and manufacture precision-engineered flow control equipment integral to the movement, control and protection of the flow of materials in our customers’ critical processes. Our product portfolio of pumps, valves, seals, automation and aftermarket services supports global infrastructure industries, including oil and gas, chemical, power generation and water management, as well as general industrial markets where our products and services add value. Through our manufacturing platform and global network of Quick Response Centers ("QRCs"), we offer a broad array of aftermarket equipment services, such as installation, advanced diagnostics, repair and retrofitting. We currently employ approximately ~~17,000~~15,000 employees in more than 50 countries.

Our business model is significantly influenced by the capital and operating spending of global infrastructure industries for the placement of new products into service and aftermarket services for existing operations. The worldwide installed base of our products is an important source of aftermarket revenue, where products are ~~expected~~relied upon to ~~ensure the maximum~~maximize operating time of many key industrial processes. ~~Over the past several years, we have~~We continue to invest significantly ~~invested~~ in our aftermarket strategy to provide local support to drive customer investments in our offerings and use of our services to replace or repair installed products. The aftermarket portion of our business also helps provide business stability during various economic periods. The aftermarket service and solutions business, which is primarily served by our network of ~~177~~156 QRCs located around the globe, provides a variety of service offerings for our

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customers including spare parts, service solutions, product life cycle solutions and other value-added services. It is generally a higher margin business compared to our original equipment business and a key component of our ~~profitable growth~~business strategy.

Our operations are conducted through ~~three~~two business segments that are referenced throughout this MD&A:

~~EPD for long lead-time,~~•FPD designs and manufactures custom, ~~and other~~ highly-engineered pumps, ~~and~~pre-configured industrial pumps, pump systems, mechanical seals, auxiliary systems and replacement parts and related services; and

~~IPD for engineered~~•FCD designs, manufactures and ~~pre-configured industrial pumps~~distributes a broad portfolio of engineered-to-order and ~~pump systems and related products and services; and~~

~~FCD for engineered and industrial~~configured-to-order isolation valves, control valves, ~~actuators and controls~~valve automation products and related ~~services.~~equipment.

Our business segments share a focus on industrial flow control technology and have a ~~high~~ number of common customers. These segments also have complementary product offerings and technologies that are often combined in applications that provide us a net competitive advantage. Our segments also benefit from our global footprint and our economies of scale in reducing administrative and overhead costs to serve customers more cost effectively. For example, our segments share leadership for operational support functions, such as sales, research and development, marketing and supply chain.

~~Table of Contents~~

The reputation of our product portfolio is built on more than 50 well-respected brand names such as Worthington, IDP, Valtek, Limitorque, Durco, Argus, Edward, ~~Anchor/Darling, SIHI, Halberg~~Valbart and Durametallic, which we believe to be one of the most comprehensive in the industry. Our products and services are sold either directly or through designated channels to more than 10,000 companies, including some of the world’s leading engineering, procurement and construction ("EPC") firms, original equipment manufacturers, distributors and end users.

We continue to leverage our QRC network to be positioned as near to customers as possible for service and support in order to capture valuable aftermarket business. Along with ~~ensuring that we have~~maintaining the local capability to sell, install and service our equipment in remote regions, it is equally imperative to continuously improve our global operations. WeDespite headwinds caused by the COVID-19 pandemic, we continue to ~~expand~~enhance our global supply chain ~~capability~~capabilities to increase our ability to meet global customer demands and ~~ensure~~improve the quality and timely delivery of our ~~products.~~products over the long-term. Additionally, we continue to devote resources to ~~improving~~improve the supply chain processes across our business segments toand find areas of synergy and cost reduction, ~~and to improve~~all along improving our supply chain management capability to ~~ensure it can~~ meet global customer demands. We also remain focused on improving on-time delivery and quality, while managing warranty costs as a percentage of sales across our global operations, through the assistance of a focused Continuous Improvement Process ("CIP") initiative.The goal of the CIP initiative, which includes lean manufacturing, six sigma business management strategy and value engineering, is to maximize service fulfillment to customers through on-time delivery, reduced cycle time and quality at the highest internal productivity.

COVID-19 Update

We continue to assess and proactively respond to the impacts of the COVID-19 pandemic on all aspects of our business and geographies, including with respect to our associates, customers and communities, supply chain impacts and labor availability issues, and to take appropriate actions in an effort to mitigate adverse effects of the pandemic.

We are adhering to the state and country mandates and guidelines related to the COVID-19 pandemic wherever we operate. The substantial majority of our production sites have remained fully operational this year, while also protecting the health and safety of our associates.

While we cannot reasonably estimate with certainty the duration and severity of the COVID-19 pandemic or its ultimate impact on the global economy, our business or our financial condition and results, we nonetheless remain committed to providing the critical support, products and services that our customers rely on, and currently believe that we will emerge from these events well positioned for long-term growth.

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Health and Safety

The health and safety of our associates, suppliers and customers around the world continues to be a priority as we navigate the COVID-19 pandemic, including the effect and duration of variant strains of the virus in the various geographies in which we operate. As a result of the emergence of these variants, certain geographies where we operate, such as China, have occasionally reinstituted temporary government-mandated shutdowns that were previously implemented to curtail the spread of the virus. While all of our facilities generally remain open and operational, the measures described above, combined with continued employee costs and under-absorption of manufacturing costs as a result of temporary closures and work-from-home policies, have had and are expected to continue having an adverse impact on our financial performance throughout the remainder of the pandemic. Despite the increased challenges of labor availability through the third quarter of 2022, we continue to expect a decline of these adverse impacts as we navigate through the remainder of 2022. Our associates continue to demonstrate strong resilience in adapting to continually evolving health and safety guidelines while still providing products and services to our customers during this challenging time.

Supply Chain Impact

Since the onset of the pandemic, many of our suppliers have also experienced varying lengths of production and shipping delays related to the COVID-19 pandemic and its effects, some of which continue to exist in highly affected countries. For example, as part of its COVID-related policies, China has declared a number of city-wide lockdowns that have, and may continue to, adversely affected the global supply chain. As a result of these measures, our production facilities and suppliers located in China have experienced, and may continue to experience, interruptions in production. These interruptions have contributed to component shortages and other supply chain constraints that may limit our ability to fulfill customer orders within desired lead times, both directly in the Asia Pacific Region and indirectly in other regions.

Additionally, the global supply chain and logistics constraints that have been affecting global markets since the third quarter of 2021 have continued to cause additional headwinds through the first nine months of 2022. These conditions have had an adverse effect on the speed at which we can manufacture and ship our products to customers, and have also led to an increase in logistics, transportation and freight costs, requiring that we diversify our supply chain and, in some instances, source materials from new suppliers. Additionally, these conditions have in some cases impacted our ability to deliver products to customers on time, which has in turn led to an increase in backlog at some of our manufacturing sites. These disruptions in our supply chain and their effects have continued and we expect they will continue as ongoing global supply chain and logistics headwinds continue.

In order to position ourselves to fulfill demand and to counteract the ongoing impacts on our supply chain, we continue to monitor the supply chain closely and to take various proactive steps to protect the continuity of supply, including building inventory to support backlog execution, qualifying alternative sources and redesigning our products.

Operational Impacts

We have engaged in a number of cost savings measures in order to help mitigate certain of the adverse effects of the COVID-19 pandemic on our financial results, including certain realignment activities (further described below under “RESULTS OF OPERATIONS – Nine months ended September 30, 2022 and 2021”), reductions in capital expenditures and continued cuts in other discretionary spending due to our response to the global macroeconomic effects of COVID-19, which partially offsets the continued costs and operational impacts of the safety protocols and procedures that we have implemented and sustained as described above under the heading "Health and Safety" and resulting inflationary pressures. We continue to evaluate additional cost savings measures in order to reduce the impact of the COVID-19 pandemic on our financial results, and we will continue to adapt our operations to respond to the changing conditions as needed.

In connection with the supply chain disruptions described above under the heading “Supply Chain Impact,” we have also experienced, and continue to experience, increased inflation and higher freight and logistics costs. In response to these increased costs, we are engaging in various mitigation strategies, including enhanced price realization efforts.

During the first three quarters of 2022, we continued to experience the same increased difficulty in maintaining staffing and productivity levels due to both a higher quarantine rate and a tighter labor market for new hiring as we experienced in the first three quarters of 2021. As we continue to manage our business through this time of uncertainty and market volatility, we will remain focused on the health and safety of our associates, suppliers, customers, and will continue to provide essential products and services to our customers.

Customer Demand

During the first nine months of ~~2017, our financial results~~2022, the ongoing effects of the COVID-19 pandemic in global markets have continued to ~~be challenged by capital spending declines, primarily~~adversely impact our customers, particularly in the oil and gas ~~industry~~markets. As a result of the pandemic’s effect (among certain other effects) on oil prices during 2020, many of our large oil and ~~pricing pressures. Although there~~gas customers reduced capital expenditures and budgets in 2020. To date, while spending for maintenance and repair projects and aftermarket services have returned to pre-pandemic

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levels over the past several quarters, project-based, oil and gas customer spending has ~~been stability~~yet to return to pre-pandemic levels despite some meaningful improvement in the first nine months of 2022. In this regard, we saw an overall increase in bookings of 19.3% in the first nine months of 2022 as compared to the same period in 2021. Despite the meaningful improvement in customer spending, during the first nine months of 2022 we continued to experience supply chain disruptions as described above under the heading "Supply Chain Impact" as well as customer-driven delays in the witnessing and inspection necessary to take delivery of equipment.

While many of the repair and maintenance projects that were paused by our customers in 2020 as a result of the pandemic were completed in 2021, repair and maintenance delays continued in 2021 and the first nine months of 2022. The timing for completion of such delayed projects will largely depend on the duration of the COVID-19 pandemic and how the virus continues to spread in our customers’ various geographies, as the pandemic continues to impact demand, utilization and required maintenance. While we saw some recovery in oil ~~prices~~and gas capital expenditure budgets in the first nine months of 2022, capital spending has yet to reach pre-pandemic levels. We continue to expect planned oil and gas capital spending to increase through the rest of 2022 but remain below pre-pandemic levels.

Impact of Russia-Ukraine Conflict on our Business

In response to the ongoing military conflict in Ukraine, several countries, including the United States, have imposed economic sanctions and export controls on certain industry sectors and parties in Russia. As a result of this conflict, including the aforementioned sanctions and overall instability in the region, in February 2022 we stopped accepting new orders in Russia and temporarily suspended fulfillment of existing orders. In March 2022, we made the decision to permanently cease all Company operations in Russia. We have commenced the necessary actions to cease operations of our Russian subsidiary, including taking steps to cancel existing contracts with customers, terminate our approximately 50 Russia-based employees and terminate other related contractual commitments, and currently expect this process to be substantially complete by the end of 2022. As a result of the conflict and the resulting macroeconomic impacts we have also experienced supply shortages and inflationary pressures.

In 2021 our Russian subsidiary had approximately $14 million of sales with an additional $36 million of sales from certain of our other foreign subsidiaries into the Russian market. As of March 31, 2022, the net assets held on our Russian subsidiary's balance sheet were $2.7 million, including $7.1 million of cash, $3.6 million of accounts receivables, net, a $9.3 million net intercompany payable position and other immaterial amounts. In addition, certain of our other foreign subsidiaries had open contracts with Russian customers that were subsequently cancelled for which revenue had been previously recognized over ~~recent quarters,~~time utilizing the percentage of completion ("POC") method. As a result of the above, in the first quarter of 2022 we ~~anticipate~~recorded a $20.2 million pre-tax charge ($21.0 million after-tax) to reserve the asset positions of our Russian subsidiary (excluding cash) as of March 31, 2022, to record contra-revenue for previously recognized revenue and estimated cancellation fees on open contracts that were previously accounted for under POC and subsequently canceled, to establish a reserve for the estimated cost to exit the operations of our Russian subsidiary and to record a reserve for our estimated financial exposure on contracts that have or are anticipated to be cancelled. We reevaluated our financial exposure as of June 30, 2022 and September 30, 2022, and concluded that the ~~current~~reserve recorded as of March 31, 2022 is sufficient and no material changes to reserves were needed.

The following table presents the above impacts of the Russia pre-tax charge:


	Nine Months Ended September 30, 2022
(Amounts in thousands)		FPD		FCD		Consolidated Total
Sales		$	(5,429)	$	(2)	$	(5,431)
Cost of sales ("COS")		3,510		1,112		4,622
Gross loss		(8,939)		(1,114)		(10,053)
Selling, general and administrative expense ("SG&A")		9,111		1,082		10,193
Operating loss		$	(18,050)	$	(2,196)	$	(20,246)

2022 Outlook

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As the world continues to make progress against COVID-19 largely through increased vaccinations, we have seen an inflection in our served end-markets as commodity prices and mobility levels increase. With our increased backlog and improved market environment we expect to return to growth in 2022, however the combined effects of the supply chain, logistics and labor availability headwinds have continued into the first nine months of 2022. Further, we have not seen and do not expect to see an increase in cancellations from our backlog. We therefore expect to continue to deliver on our backlog during 2022, though with a slightly longer cycle time than originally expected.

As of September 30, 2022, we have cash and cash equivalents of $351.9 million and $157.3 million of borrowings available under our Senior Credit Facility. We do not currently anticipate, nor are we aware of, any significant market conditions or commitments that would change any of our conclusions of the liquidity currently available to us. Additionally, we expect that the costs savings measures planned and already in place will ~~persist throughout 2017.~~

~~To better align costs and improve long-term efficiency, we initiated Realignment Programs~~enable us to ~~accelerate both short-~~maintain adequate liquidity over the short-term (next 12 months) and long-term ~~strategic plans, including targeted manufacturing optimization~~(beyond the next 12 months) as we manage through the ~~consolidation~~current market environment. We will continue to actively monitor the potential impacts of ~~facilities, SG&A efficiency initiatives, transfer of activities from high-cost regions~~COVID-19 and related events on the credit markets in order to ~~lower-cost facilities~~maintain sufficient liquidity and ~~the divestiture of certain non-strategic assets. At the completion of the programs, we expect an approximately 20% reduction in our global workforce, relative~~access to early 2015 workforce levels. With an expected near-term investment of approximately $360 million, including projects in process or under final evaluation, we expect the results of our Realignment Programs will deliver annualized run-rate savings of approximately $230 million. In addition, we are focusing on our ongoing low-cost sourcing, including greater use of third-party suppliers and increasing our lower-cost, emerging market capabilities.capital.

RESULTS OF OPERATIONS — Three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021

Throughout this discussion of our results of operations, we discuss the impact of fluctuations in foreign currency exchange rates. We have calculated currency effects on operations by translating current year results on a monthly basis at prior year exchange rates for the same periods.

~~As previously disclosed in our Quarterly Report on Form 10-Q for~~In the ~~quarterly period ended June 30, 2017,~~second quarter of 2020, we identified ~~accounting errors focused mainly at two of~~and initiated certain realignment activities to right-size our ~~non-U.S. sites in~~organizational operations based on the ~~inventory, accounts receivable, cost of sales and selling, general and administrative balances for prior periods through~~current business environment, with the ~~first quarter of 2017. We assessed these errors, individually and in the aggregate, and concluded that they were not material~~overall objective to ~~any prior annual or interim period. However, to facilitate comparisons among periods we revised~~reduce our previously issued audited consolidated financial information which is included in our 2016 Annual Report and unaudited condensed consolidated financial information for the interim periods included in our Form 10-Q/A and Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017, respectively. We also corrected the timing of immaterial previously recorded out-of-period adjustments and reflected them in the revised prior period financial statements, where applicable. Refer to Note 2 to our condensed consolidated financial statements included in this Quarterly Report for more information.

As discussed in Note 3 to our condensed consolidated financial statements included in this Quarterly Report, effective July 6, 2017, we sold our Flow Control Division's ("FCD") Vogt product line and related assets and liabilities to a privately held company. In 2016, net sales related to the Vogt business totaled approximately $17 million, with earnings before interest and taxes of approximately $4 million.

As discussed in Note 3 to our condensed consolidated financial statements included in this Quarterly Report, effective May 2, 2017 we sold our FCD Gestra AG business to a leading provider of steam system solutions. In 2016, Gestra recorded revenues of approximately $101 million (€92 million) with earnings before interest and taxes of approximately $17 million (€15 million).

In 2015, we initiated Realignment Programs that consist of both restructuring and non-restructuring charges that are further discussed in Note 16 to our condensed consolidated financial statements included in this Quarterly Report. The Realignment Programs will continue throughout 2017 and the total charges for Realignment Programs by segment are detailed below for the three months ended September 30, 2017 and 2016:

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Three Months Ended September 30, 2017
(Amounts in thousands) Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Total Realignment Program Charges
     COS $ 7,045
$ 2,021
$ 5,154
$ 14,220
$ —
$ 14,220
     SG&A 718
(379 ) 1,022
1,361
1,210
2,571
     Income tax expense 1,000
—
—
1,000
—
1,000
Total $ 8,763
$ 1,642
$ 6,176
$ 16,581
$ 1,210
$ 17,791

~~The total charges for Realignment Programs by segment are detailed below for the nine months ended September 30, 2017 and 2016:~~

Nine Months Ended September 30, 2017

(Amounts in thousands)
Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Total Realignment Program Charges
     COS $ 12,409
$ 11,929
$ 9,034
$ 33,372
$ —
$ 33,372
     SG&A 7,948
10,181
3,668
21,797
3,839
25,636
     Income tax expense 1,000
—
—
1,000
—
1,000
Total $ 21,357
$ 22,110
$ 12,702
$ 56,169
$ 3,839
$ 60,008

Nine Months Ended September 30, 2016
(Amounts in thousands) Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Total Realignment Program Charges
     COS $ 14,410
$ 22,438
$ 6,053
$ 42,901
$ 8
$ 42,909
     SG&A 11,200
5,773
2,568
19,541
2,644
22,185
     Income tax expense 2,000
2,800
600
5,400
—
5,400
Total $ 27,610
$ 31,011
$ 9,221
$ 67,842
$ 2,652
$ 70,494

workforce costs. We anticipate a total investment in ~~these~~ Realignment ~~Programs~~Program activities of approximately ~~$360~~$95 million ~~including projects in process or under final evaluation. Since inception~~and the vast majority of the ~~Realignment Programs~~charges were incurred in ~~2015, we have incurred charges of $282.6 million~~2020 and ~~we expect to incur the remaining charges throughout~~2021 with the remainder ~~of 2017~~to be incurred in 2022. There are certain other realignment activities that are currently being evaluated, but have not yet been finalized and ~~into 2018.~~therefore are not included in the above anticipated total investment.

Realignment Activity

The following tables present out realignment activity by segment related to our Realignment Program:


	Three Months Ended September 30, 2022

(Amounts in thousands)	FPD		FCD		Subtotal–Reportable Segments		Eliminations and All Other		Consolidated Total
Total Realignment Charges
COS	$	(417)	$	22	$	(395)	$	—	$	(395)
SG&A	74		7		81		18		99

Total	$	(343)	$	29	$	(314)	$	18	$	(296)











	Three Months Ended September 30, 2021

(Amounts in thousands)	FPD		FCD		Subtotal–Reportable Segments		Eliminations and All Other		Consolidated Total
Total Realignment Charges
COS	$	2,273	$	309	$	2,582	$	—	$	2,582
SG&A	(252)		$	(1)	(253)		621		368

Total	$	2,021	$	308	$	2,329	$	621	$	2,950

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	Nine Months Ended September 30, 2022

(Amounts in thousands)	FPD		FCD		Subtotal–Reportable Segments		Eliminations and All Other		Consolidated Total
Total Realignment Charges
COS	$	(120)	$	56	$	(64)	$	(61)	$	(125)
SG&A	150		57		207		(248)		(41)

Total	$	30	$	113	$	143	$	(309)	$	(166)

Based on actions under our Realignment Programs, we estimate that we have achieved cost savings of approximately $150 million for the nine months ended September 30, 2017, as compared with $80 million in the same period of 2016. Approximately $95 million of those savings are in COS with the remainder in SG&A. Upon completion of the Realignment Programs, we expect run-rate cost savings of approximately $230 million, of which approximately $214 million would be achieved in 2017. Actual savings could vary from expected savings, which represent management’s best estimate to date.


	Nine Months Ended September 30, 2021

(Amounts in thousands)	FPD		FCD		Subtotal–Reportable Segments		Eliminations and All Other		Consolidated Total
Total Realignment Charges
COS	$	13,766	$	1,457	$	15,223	$	590	$	15,813
SG&A	910		727		1,637		4,816		6,453

Total	$	14,676	$	2,184	$	16,860	$	5,406	$	22,266

Consolidated Results

Bookings, Sales and Backlog


	Three Months Ended September 30,
(Amounts in millions)	2022		2021
Bookings	$	1,223.3	$	911.6
Sales	872.9		866.1


	Three Months Ended September 30,					Nine Months Ended September 30,
(Amounts in millions)	2017		2016		(Amounts in millions)	2022		2021
Bookings	$	892.9	$	959.5	Bookings	$	3,346.7	$	2,805.7
Sales	883.4		945.9		Sales	2,576.2		2,621.6

Nine Months Ended September 30,
(Amounts in millions) 2017 2016
Bookings $ 2,820.1
$ 2,855.0
Sales 2,626.8
2,919.6

We define a booking as the receipt of a customer order that contractually engages us to perform activities on behalf of our customer with regard to manufacturing, service or support. Bookings recorded and subsequently canceled within the year-to-date period are excluded from year-to-date bookings. Bookings for the three months ended September 30, ~~2017 decreased~~2022 increased by ~~$66.6~~$311.7 million, or ~~6.9%~~34.2%, as ~~compared~~compared with the same period in ~~2016.~~ 2021. The ~~decrease~~increase included negative currency ~~benefits~~effects of approximately ~~$16~~$60 million. The ~~decrease~~increase was driven by ~~decreases~~increased customer orders in the oil and gas, chemical, general and power generation industries. The ~~decrease~~increase in customer bookings was ~~due to~~more heavily weighted towards original equipment bookings. The increase included the impact of FPD original equipment orders booked in the third quarter of 2022 in excess of $210 million to supply pumps and related equipment to support the development of an onshore unconventional gas project in the Middle East.

Bookings for the nine months ended September 30, ~~2017 decreased~~2022 increased by ~~$34.9~~$541.0 million, or ~~1.2%~~19.3%, as compared with the same period in ~~2016~~2021. The increase included negative currency effects of approximately $133 million. The increase was driven by increased customer bookings in the and oil and gas, chemical, general, water management and power generation industries. The increase in customer bookings was more heavily weighted towards original equipment bookings. The increase included ~~an order for approximately $80~~the impact of FPD original equipment orders booked in 2022 in excess of $230 million to ~~provide~~supply pumps and related equipment to support the development of an onshore unconventional gas project in the Middle East.

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Sales for the ~~Hengli Integrated Refining Complex Project~~three months ended September 30, 2022 increased by $6.8 million, or 0.8%, as compared with the same period in ~~China.~~2021. The increase included negative currency effects of approximately $55 million. The increased sales were driven by aftermarket, with increased sales into North America, Africa and Middle East, partially offset by decreased sales into Europe, Latin America and Asia Pacific. In the third quarter of 2022 we experienced operational interruptions related to the implementation of a new enterprise resource planning system at certain of our North America quick response centers. We estimate that this disruption negatively impacted sales volumes during the period by approximately $30 million and we anticipate to largely recover the sales in future periods. Net sales to international customers, including export sales from the U.S., were approximately 62% and 67% of total sales for the three months ended September 30, 2022 and 2021, respectively.

Sales for the nine months ended September 30, 2022 decreased by $45.4 million, or 1.7%, as compared with the same period in 2021. The decrease included negative currency effects of approximately $7$116 million. The ~~decrease was primarily~~decreased sales were driven by ~~the general, power generation and chemical industries, partially offset by an increase in the oil and gas industry. The decrease was more heavily weighted towards customer~~ original equipment, ~~bookings.~~

Sales for the three months ended September 30, 2017 decreased by $62.5 million, or 6.6%, as compared with the same period in 2016. The decrease included currency benefits of approximately $15 million. The decrease was due to decreased original equipment sales with decreased sales into ~~every region except for~~Europe, Asia Pacific and Latin America, partially offset by increased sales into North America, Africa and the Middle East. Net sales to international customers, including export sales from the U.S., were approximately ~~66%~~62% and ~~62%~~67% of total sales for the three months ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively.

Sales for the nine months ended September 30, 2017 decreased by $292.8 million, or 10.0%, as compared with the same period in 2016. The decrease included negative currency effects of approximately $5 million. The decrease was primarily due to decreased original equipment sales with decreased sales into every region. Net sales to international customers, including export sales from the U.S., were approximately 64% and 63% of total sales for the nine months ended September 30, 2017 and 2016.

~~Backlog~~Backlog represents the aggregate value of booked but uncompleted customer orders and is influenced primarily by bookings, sales, ~~cancellations~~cancellations and currency effects. Backlog of ~~$2,135.2~~$2,601.9 million at September 30, ~~2017~~2022 increased by ~~$237.5~~$598.3 million, or ~~12.5%~~29.9%, as compared with December 31, ~~2016.~~ 2021 and include the negative impact of $25.2 million of order cancellations in the first quarter of 2022 due to our exposure in Russia. Currency effects provided ~~an increase~~a decrease of approximately ~~$106~~$139 million. ~~Approximately 31%~~ Approximately 35% and 38% of the backlog at September 30, ~~2017~~2022 and December 31, 2021, respectively, was related to aftermarket orders.

Backlog includes our unsatisfied (or partially unsatisfied) performance obligations related to contracts having an original expected duration in excess of one year of approximately $597 million, as discussed in Note 2 to our condensed consolidated financial statements included in this Quarterly Report.

Gross Profit and Gross Profit Margin


	Three Months Ended September 30,
(Amounts in millions, except percentages)	2022			2021
Gross profit	$	239.6		$	253.5
Gross profit margin	27.4		%	29.3		%

Three Months Ended September 30,
(Amounts in millions, except percentages) 2017 2016
Gross profit $ 267.5
$ 278.0
Gross profit margin 30.3 % 29.4 %


	Nine Months Ended September 30,
(Amounts in millions, except percentages)	2022			2021
Gross profit	$	699.1		$	782.6
Gross profit margin	27.1		%	29.9		%

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Nine Months Ended September 30,
(Amounts in millions, except percentages) 2017 2016
Gross profit $ 781.0
$ 903.8
Gross profit margin 29.7 % 31.0 %

Gross profit for the three months ended September 30, ~~2017~~2022 decreased by ~~$10.5~~$13.9 million, or ~~3.8%~~5.5%, as compared with the same period in ~~2016.~~2021. Gross profit margin for the three months ended September 30, ~~2017~~2022 of ~~30.3% increased~~27.4% decreased from ~~29.4%~~29.3% for the same period in ~~2016.~~2021. The ~~increase~~decrease in gross profit margin was primarily ~~attributed~~due to ~~a $6.3~~the under absorption of $5.1 million ~~charge~~of fixed manufacturing costs primarily due to ~~write down inventory in Brazil in the third quarter of 2016 that did not recur, lower charges and increased savings~~operational interruptions related to the implementation of a new enterprise resource planning system at certain of our ~~Realignment Programs~~North America quick response centers, increased freight costs largely due to global supply chain and logistics constraints and the establishment of $1.7 million of inventory reserves related to certain contracts that are estimated to be below market, partially offset by a mix shift to higher ~~margin~~ aftermarket sales, ~~partially offset by the negative impact of~~ decreased ~~sales on~~costs related to our ~~absorption of fixed manufacturing costs, increased accrued~~realignment actions and lower broad-based annual incentive compensation ~~and lower margin projects that shipped from backlog.~~as compared to the same period in 2021. Aftermarket sales ~~increased to~~represented approximately ~~50%~~53% of total sales for the three months ended September 30, 2022, as compared with approximately ~~44%~~51% of total sales for the same period in ~~2016.~~2021.

Gross profit for the nine months ended September 30, ~~2017~~2022 decreased by ~~$122.8~~$83.5 million, or ~~13.6%~~10.7%, as compared with the same period in ~~2016.~~2021. Gross profit margin for the nine months ended September 30, ~~2017~~2022 of ~~29.7%~~27.1% decreased from ~~31.0%~~29.9% for the same period in ~~2016.~~2021. The decrease in gross profit margin was primarily ~~attributed~~due to lower conversion of customer backlog to revenue and the ~~negative impact~~under absorption of ~~decreased sales on our absorption~~$5.1 million of fixed manufacturing costs ~~lower margin projects that shipped from backlog~~primarily due to operational interruptions related to the implementation of a new enterprise resource planning system at certain of our North America quick response centers, increased freight costs largely due to global supply chain and logistics constraints and a ~~$16.9~~$4.6 million charge ~~for costs incurred~~taken in the first quarter of 2022 related to ~~a contract to supply oil and gas platform equipment to an end user~~our financial exposure in ~~Latin America,~~Russia, partially offset by ~~$10.9 million of charges to write down inventory in Brazil in 2016 that did not recur,~~ a mix shift to higher ~~margin~~ aftermarket sales, ~~and lower charges and increased savings~~decreased costs related to our ~~Realignment Programs~~realignment actions and lower broad-based annual incentive compensation as compared to the same period

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in ~~2016. Aftermarket~~2021. Aftermarket sales ~~increased to approximately 49%~~represented approximately 53% of total sales for the nine months ended September 30, 2022, as compared with approximately ~~44%~~52% of total sales for the same period in ~~2016.~~

2021.

Selling, General and Administrative Expense


	Three Months Ended September 30,
(Amounts in millions, except percentages)	2022			2021
SG&A	$	221.1		$	200.9
SG&A as a percentage of sales	25.3		%	23.2		%

Three Months Ended September 30,
(Amounts in millions, except percentages) 2017 2016
SG&A $ 206.3
$ 281.3
SG&A as a percentage of sales 23.4 % 29.7 %


	Nine Months Ended September 30,
(Amounts in millions, except percentages)	2022			2021
SG&A	$	622.0		$	610.0
SG&A as a percentage of sales	24.1		%	23.3		%

Nine Months Ended September 30,
(Amounts in millions, except percentages) 2017 2016
SG&A $ 681.2
$ 747.5
SG&A as a percentage of sales 25.9 % 25.6 %

SG&A for the three months ended September 30, ~~2017 decreased~~2022 increased by ~~$75.0~~$20.2 million, or ~~26.7%~~10.1%, as compared with the same period in ~~2016.~~2021. Currency effects yielded ~~an increase~~a decrease of approximately $3$10 million. SG&A as a percentage of sales for the three months ended September 30, ~~2017 decreased 630~~2022 increased 210 basis points primarily due to increased asbestos-related costs of $3.8 million driven by a $7.8 million adjustment for Incurred But Not Reported ("IBNR") asbestos liability accruals based on an annual actuarial study, the acquisition and expense of $4.8 million of in-process research and development, increased bad debt expense and incremental operating lease expense of $5.5 million related to the identification and correction of an accounting error, partially offset by lower broad-based annual incentive compensation as compared with the same period in 2016 due to the $73.5 million reserve established for our primary Venezuelan customer in the third quarter of 2016 that did not recur and increased savings related to our Realignment Programs compared to the same period in 2016, partially offset by increased accrued broad-based annual incentive compensation and lower sales leverage.2021.

SG&A for the nine months ended September 30, ~~2017 decreased~~2022 increased by ~~$66.3~~$12.0 million, or ~~8.9%~~2.0%, as compared with the same period in ~~2016.~~2021. Currency effects yielded a decrease of approximately $1$23 million. SG&A as a percentage of sales for the nine months ended September 30, ~~2017~~2022 increased 3080 basis points primarily due to a $10.2 million charge taken in the first quarter of 2022 related to our financial exposure in Russia, increased asbestos-related costs of $2.9 million driven by a $7.8 million adjustment in the third quarter of 2022 for IBNR asbestos liability accruals based on an annual actuarial study, incremental operating lease expense of $5.5 million related to the identification and correction of an accounting error, the acquisition and expense of $4.8 million of in-process research and development in the third quarter of 2022 and increased bad debt expense, partially offset by lower costs related to our realignment actions and lower broad-based annual incentive compensation as compared with the same period in 2016 due to a $26.0 million impairment charge related to our manufacturing facility in Brazil and lower sales leverage, substantially offset by the $73.5 million reserve established for our primary Venezuelan customer in the third quarter of 2016 that did not recur and increased savings related to our Realignment Programs compared to the same period in 2016.

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2021.

Net Earnings from Affiliates


	Three Months Ended September 30,
(Amounts in millions)	2022		2021
Net earnings from affiliates	$	5.8	$	4.7


	Three Months Ended September 30,					Nine Months Ended September 30,
(Amounts in millions)	2017		2016		(Amounts in millions)	2022		2021
Net earnings from affiliates	$	2.9	$	3.4	Net earnings from affiliates	$	14.8	$	11.2

Net earnings from affiliates for the three months ended September 30, ~~2017 decreased $0.5~~2022 increased by $1.1 million, or ~~14.7%~~23.4%, as compared with the same period in ~~2016.~~2021. The increase in net earnings was primarily a result of losses in the third quarter of 2021 associated with our FPD joint venture in China that did not recur.

Net earnings from affiliates for the nine months ended September 30, ~~2017~~2022 increased ~~$0.5~~by $3.6 million, or ~~5.9%~~32.1%, as compared with the same period in ~~2016.~~2021. The increase was primarily a result of increased earnings of our FPD joint venture in South Korea.

Operating Income and Operating Margin


	Three Months Ended September 30,
(Amounts in millions, except percentages)	2022			2021
Operating income	$	24.2		$	57.4
Operating income as a percentage of sales	2.8		%	6.6		%

Operating income for the three months ended September 30, ~~2017 increased~~2022 decreased by ~~$73.9~~$33.2 million, or 57.8%, as compared with the same period in 2021. The decrease included negative currency effects of approximately $5 million. The decrease was primarily a result of the $13.9 million decrease in gross profit and the $20.2 million increase in SG&A.



			Page
			No.
PART I – FINANCIAL INFORMATION
Item 1. Financial ~~Statements.~~Statements
Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income (Loss) – Three Months Ended September 30, ~~2017~~2022 and ~~2016~~2021 (unaudited)			1
Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income (Loss) – Nine Months Ended ~~September~~Sep tember 30, ~~2017~~2022 and ~~2016~~2021 (unaudited)			2
Condensed Consolidated Balance Sheets – Condensed Consolidated Balance Sheets – September 30, ~~2017~~2022 and December 31, ~~2016~~2021 (unaudited)			3
Condensed Consolidated Statements of Shareholders' Equity – Three Months Ended September 30, 2022 and 2021 (unaudited)			4
Condensed Consolidated Statements of Stockholders' Equity – Nine Months Ended September 30 , 2022 and 2021 (unaudited)			5
Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, ~~2017~~2022 and ~~2016~~2021 (unaudited)			46
Notes to Condensed Consolidated Financial Statements (unaudited)			57
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations.~~Operations			2426
Item 3. Quantitative and Qualitative Disclosures About Market ~~Risk.~~Risk			3742
Item 4. Controls and ~~Procedures.~~Procedures			3842

PART II – OTHER INFORMATION
Item 1. Legal ~~Proceedings.~~Proceedings			3944
Item 1A. Risk ~~Factors.~~Factors			3944
Item 2. Unregistered Sales of Equity Securities and Use of ~~Proceeds.~~Proceeds			3944
Item ~~6. Exhibits.~~3. Defaults Upon Senior Securities			4046
~~SIGNATURES~~Item 4. Mine Safety Disclosures			4146
~~EX-31.1~~ Item 5. Other Information			46
~~EX-31.2~~ Item 6. Exhibits			46
~~EX-32.1~~ SIGNATURES			47
~~EX-32.2~~
~~EX-101 INSTANCE DOCUMENT~~
~~EX-101 SCHEMA DOCUMENT~~
~~EX-101 CALCULATION LINKBASE DOCUMENT~~
~~EX-101 LABELS LINKBASE DOCUMENT~~
~~EX-101 PRESENTATION LINKBASE DOCUMENT~~
~~EX-101 DEFINITION LINKBASE DOCUMENT~~



(Amounts in thousands, except par value)	September 30,			December 31,
	2017			2016
ASSETS
Current assets:
Cash and cash equivalents	$	502,143		$	367,162
Accounts receivable, net of allowance for doubtful accounts of $65,106 and $51,920, respectively	851,246			882,638
Inventories, net	951,598			897,690
Prepaid expenses and other	134,023			150,199
Total current assets	2,439,010			2,297,689
Property, plant and equipment, net of accumulated depreciation of $967,458 and $882,151, respectively	673,555			724,805
Goodwill	1,211,544			1,205,054
Deferred taxes	93,638			83,722
Other intangible assets, net	212,425			214,527
Other assets, net	203,968			183,126
Total assets	$	4,834,140		$	4,708,923

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	360,844		$	412,087
Accrued liabilities	706,838			680,986
Debt due within one year	80,635			85,365
Total current liabilities	1,148,317			1,178,438
Long-term debt due after one year	1,506,057			1,485,258
Retirement obligations and other liabilities	412,137			407,839
Shareholders’ equity:
Common shares, $1.25 par value	220,991			220,991
Shares authorized – 305,000
Shares issued – 176,793
Capital in excess of par value	488,249			491,848
Retained earnings	3,634,750			3,598,396
Treasury shares, at cost – 46,503 and 46,980 shares, respectively	(2,061,054		)	(2,078,527		)
Deferred compensation obligation	6,256			8,507
Accumulated other comprehensive loss	(540,504		)	(624,788		)
Total Flowserve Corporation shareholders’ equity	1,748,688			1,616,427
Noncontrolling interests	18,941			20,961
Total equity	1,767,629			1,637,388
Total liabilities and equity	$	4,834,140		$	4,708,923


(Amounts in thousands, except par value)	September 30,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	351,870	$	658,452
Accounts receivable, net of allowance for expected credit losses of $82,101 and $74,336, respectively	770,152		739,210
Contract assets, net of allowance for expected credit losses of $3,999 and $2,393, respectively	205,236		195,598
Inventories, net	779,449		678,287

Prepaid expenses and other	117,077		117,130
Total current assets	2,223,784		2,388,677
Property, plant and equipment, net of accumulated depreciation of $1,135,437 and $1,191,823, respectively	473,224		515,927
Operating lease right-of-use assets, net	173,442		193,863
Goodwill	1,135,538		1,196,479
Deferred taxes	44,833		44,049
Other intangible assets, net	134,105		152,463
Other assets, net of allowance for expected credit losses of $66,210 and $67,696, respectively	321,062		258,310
Total assets	$	4,505,988	$	4,749,768

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	414,372	$	410,062
Accrued liabilities	382,535		445,092
Contract liabilities	216,094		202,965
Debt due within one year	47,962		41,058

Operating lease liabilities	30,723		32,628
Total current liabilities	1,091,686		1,131,805
Long-term debt due after one year	1,232,248		1,261,770
Operating lease liabilities	155,328		166,786
Retirement obligations and other liabilities	334,967		352,062
Commitments and contingencies (See Note 10)
Shareholders’ equity:
Common shares, $1.25 par value	220,991		220,991
Shares authorized – 305,000
Shares issued – 176,793
Capital in excess of par value	506,744		506,386
Retained earnings	3,678,817		3,691,023
Treasury shares, at cost – 46,376 and 46,794 shares, respectively	(2,037,758)		(2,057,706)
Deferred compensation obligation	6,950		7,214
Accumulated other comprehensive loss	(718,619)		(563,589)
Total Flowserve Corporation shareholders’ equity	1,657,125		1,804,319
Noncontrolling interests	34,634		33,026
Total equity	1,691,759		1,837,345
Total liabilities and equity	$	4,505,988	$	4,749,768



(Amounts in thousands)	Nine Months Ended September 30,
	2017			2016
Cash flows – Operating activities:
Net earnings, including noncontrolling interests	$	110,216		$	73,620
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation	75,177			74,875
Amortization of intangible and other assets	12,767			12,424
(Gain) loss on dispositions of businesses	(141,158		)	7,664
Stock-based compensation	20,291			29,966
Latin America accounts receivable reserve	—			73,451
Foreign currency, asset impairment and other non-cash adjustments	24,696			(1,037		)
Change in assets and liabilities:
Accounts receivable, net	63,835			69,818
Inventories, net	(20,355		)	(31,462		)
Prepaid expenses and other	43,546			(58,743		)
Other assets, net	(21,090		)	(19,512		)
Accounts payable	(68,012		)	(98,782		)
Accrued liabilities and income taxes payable	(6,702		)	(82,318		)
Retirement obligations and other	(18,720		)	7,821
Net deferred taxes	(2,131		)	13,155
Net cash flows provided by operating activities	72,360			70,940
Cash flows – Investing activities:
Capital expenditures	(40,620		)	(64,475		)
Proceeds from disposal of assets	2,977			632
Proceeds from (payments for) dispositions of businesses	208,775			(5,064		)
Net cash flows provided (used) by investing activities	171,132			(68,907		)
Cash flows – Financing activities:
Payments on long-term debt	(45,000		)	(45,000		)
Proceeds under other financing arrangements	6,234			24,701
Payments under other financing arrangements	(12,560		)	(12,060		)
Payments related to tax withholding for stock-based compensation	(6,287		)	(10,267		)
Payments of dividends	(74,412		)	(72,960		)
Other	(4,189		)	1,325
Net cash flows used by financing activities	(136,214		)	(114,261		)
Effect of exchange rate changes on cash	27,703			6,654
Net change in cash and cash equivalents	134,981			(105,574		)
Cash and cash equivalents at beginning of period	367,162			366,444
Cash and cash equivalents at end of period	$	502,143		$	260,870


(Amounts in thousands)	Nine Months Ended September 30,
	2022		2021
Cash flows – Operating activities:
Net earnings, including noncontrolling interests	$	73,053	$	116,713
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation	59,207		66,316
Amortization of intangible and other assets	10,051		10,643
Loss on extinguishment of debt	—		8,173





Stock-based compensation	23,757		23,610

Foreign currency, asset write downs and other non-cash adjustments	(24,085)		9,897
Change in assets and liabilities:
Accounts receivable, net	(78,376)		24,361
Inventories, net	(151,938)		(47,533)
Contract assets, net	(21,912)		35,358
Prepaid expenses and other, net	(14,881)		2,429
Accounts payable	29,307		(58,600)
Contract liabilities	27,237		9,379
Accrued liabilities and income taxes payable	(32,735)		9,136
Retirement obligations and other liabilities	24,123		(23,842)

Net deferred taxes	(32,293)		(34,933)
Net cash flows provided (used) by operating activities	(109,485)		151,107
Cash flows – Investing activities:
Capital expenditures	(45,831)		(34,034)

Other	184		(4,679)


Net cash flows provided (used) by investing activities	(45,647)		(38,713)
Cash flows – Financing activities:

Payments on senior notes	—		(407,473)

Proceeds from issuance of senior notes	—		498,280
Proceeds from long-term debt	—		300,000
Payments of deferred loan cost	—		(5,399)
Payments on term loan	(24,239)		—
Proceeds under other financing arrangements	1,135		1,408
Payments under other financing arrangements	(356)		(6,215)
Repurchases of common shares	—		(17,531)
Payments related to tax withholding for stock-based compensation	(4,578)		(5,899)
Payments of dividends	(78,406)		(78,551)
Other	(5,334)		(6,276)
Net cash flows provided (used) by financing activities	(111,778)		272,344
Effect of exchange rate changes on cash	(39,672)		(22,743)
Net change in cash and cash equivalents	(306,582)		361,995
Cash and cash equivalents at beginning of period	658,452		1,095,274
Cash and cash equivalents at end of period	$	351,870	$	1,457,269


þ	~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED~~ ~~SEPTEMBER 30, 2017~~ ☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022


¨	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM~~to. For the transition period fromto



(Amounts in thousands, except per share data)	Three Months Ended September 30, 2016
	As Reported			Adjustments			As Revised
Sales	$	943,334		$	2,605		$	945,939
Cost of sales (1)	(677,891		)	9,931			(667,960		)
Gross profit	265,443			12,536			277,979
Selling, general and administrative expense (2)	(271,643		)	(9,618		)	(281,261		)
Operating (loss) income	(2,806		)	2,918			112
Loss before income taxes	(15,124		)	2,918			(12,206		)
Provision for income taxes (3)	(4,996		)	2,169			(2,827		)
Net loss, including noncontrolling interests	(20,120		)	5,087			(15,033		)
Net loss attributable to Flowserve Corporation	$	(20,928	)	$	5,087		$	(15,841	)
Net loss per share attributable to Flowserve Corporation common shareholders:
Basic	$	(0.16	)	$	0.04		$	(0.12	)
Diluted	(0.16		)	0.04			(0.12		)



	Nine Months Ended September 30, 2017
	Shares		Weighted Average Grant-Date Fair Value
Number of unvested shares:
Outstanding - January 1, 2017	1,259,275		$	50.77
Granted	697,832		49.81
Vested	(473,426	)	59.38
Canceled	(207,618	)	48.00
Outstanding as of September 30, 2017	1,276,063		$	47.50



Three Months Ended September 30, 2017
(Amounts in thousands)	Engineered Product Division			Industrial Product Division			Flow Control Division		Subtotal–Reportable Segments		Eliminations and All Other			Consolidated Total
Sales to external customers	$	416,031		$	180,347		$	287,002	$	883,380	$	—		$	883,380
Intersegment sales	8,157			9,388			686		18,231		(18,231		)	—
Segment operating income (loss)	51,782			(3,551		)	48,497		96,728		(22,709		)	74,019

Three Months Ended September 30, 2016
(Amounts in thousands)	Engineered Product Division			Industrial Product Division			Flow Control Division		Subtotal–Reportable Segments		Eliminations and All Other			Consolidated Total
Sales to external customers	$	451,354		$	196,172		$	298,413	$	945,939	$	—		$	945,939
Intersegment sales	7,098			7,126			937		15,161		(15,161		)	—
Segment operating (loss) income (1)	(21,982		)	(17,062		)	53,717		14,673		(14,561		)	112


~~Item 3.~~	~~Quantitative and Qualitative Disclosures about Market Risk.~~


~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds.~~


	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (1)	Maximum Number of Shares (or Approximate Dollar Value) That May Yet Be Purchased Under the Program (in millions)
Period
July 1 - 31	382	(2)	$	29.33	—	$	96.1
August 1 - 31	1,069	(3)	33.46		—	96.1
September 1 - 30	193	(2)	25.05		—	96.1
Total	1,644		$	31.51	—



	Total Number of Shares Tendered		Average Price per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Number of Shares (or Approximate Dollar Value) That May Yet Be Purchased Under the Program (in millions)
Period	Total Number of Shares Tendered		Average Price per Share
July 1 - 31	320	(1)	$	46.17	—	$	160.7
August 1 - 31	2,899	(2)	38.35		—	160.7
September 1 - 30	—		—		—	160.7
Total	3,219		$	39.13	—


~~(1)~~Exhibit No.			~~Shares tendered by employees to satisfy minimum tax withholding amounts for Restricted Shares.~~			Description


~~Item 1.~~	~~Financial Statements.~~


~~(2)~~	Represents 419 shares that were tendered by employees to satisfy minimum tax withholding amounts for Restricted Shares at an average price per share of $38.91, and 2,480 shares purchased at a price of $38.25 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.



~~Exhibit No.~~		~~Description~~

3.1		Restated Certificate of Incorporation of Flowserve Corporation, ~~(incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013).~~

~~3.2~~	~~Flowserve Corporation By-Laws,~~ as amended and restated effective May ~~18, 2017~~20, 2021 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K ~~dated~~filed on May ~~24, 2017)~~25, 2021).

~~10.1~~3.2		~~Fourth Amendment to Credit Agreement, dated June 30, 2017, among~~ Flowserve Corporation ~~Bank of America, N.A.,~~By-Laws, as ~~administrative agent,~~amended and ~~other lenders referred therein~~restated effective August 16, 2022 (incorporated by reference to Exhibit ~~10.1~~3.1 to ~~Registrant's~~the Registrant’s Current Report on Form 8-K ~~dated July 7, 2017)~~filed on August 17, 2022).

10.1+		Flowserve Corporation Executive Officer Severance Plan, as amended and restated August 17, 2022*.


10.2 +		Flowserve Corporation Annual Incentive Plan, as amended and restated August 17, 2022*.

31.1+		Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2+		Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1++		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2++		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~101.INS~~











101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2022, formatted in Inline XBRL (included as Exhibit 101)


			FLOWSERVE CORPORATION

			~~FLOWSERVE CORPORATION~~

~~Date:~~	~~November 1, 2017~~	~~/s/ R. Scott Rowe~~
		~~R. Scott Rowe~~
		~~President and Chief Executive Officer~~ ~~(Principal Executive Officer)~~


Date:	October 31, 2022	~~Lee S. Eckert~~ /s/ Amy B. Schwetz
		Amy B. Schwetz
		Senior Vice President and Chief Financial Officer (Principal Financial Officer)




Date:	October 31, 2022	/s/ Scott K. Vopni
		Scott K. Vopni
		Vice President and Chief Accounting Officer (Principal Accounting Officer)