Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 23, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | FLOWSERVE CORP | |
Entity Central Index Key | 30625 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 134,450,872 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Sales | $1,014,620 | $1,068,136 |
Cost of sales | -682,890 | -691,014 |
Gross profit | 331,730 | 377,122 |
Selling, general and administrative expense | -239,927 | -216,227 |
Net earnings from affiliates | 1,573 | 3,431 |
Operating income | 93,376 | 164,326 |
Interest expense | -16,037 | -15,149 |
Interest income | 758 | 331 |
Other expense, net | -19,946 | -2,905 |
Earnings before income taxes | 58,151 | 146,603 |
Provision for income taxes | -28,506 | -38,015 |
Net earnings, including noncontrolling interests | 29,645 | 108,588 |
Less: Net earnings attributable to noncontrolling interests | -1,979 | -854 |
Net earnings attributable to Flowserve Corporation | $27,666 | $107,734 |
Net earnings per share attributable to Flowserve Corporation common shareholders: | ||
Basic (in dollars per share) | $0.21 | $0.78 |
Diluted (in dollars per share) | $0.20 | $0.78 |
Cash dividends declared per share (in dollars per share) | $0.18 | $0.16 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net earnings, including noncontrolling interests | $29,645 | $108,588 | ||
Other comprehensive income: | ||||
Foreign currency translation adjustments, net of taxes of $63,561 and $(1,786), respectively | -106,434 | 2,951 | ||
Pension and other postretirement effects, net of taxes of $1,692 and $(938), respectively | 7,891 | 2,779 | ||
Cash flow hedging activity, net of taxes of $2,027 and $(71), respectively | -5,146 | 168 | ||
Other comprehensive income | -103,689 | [1] | 5,898 | [1] |
Comprehensive income, including noncontrolling interests | -74,044 | 114,486 | ||
Comprehensive income attributable to noncontrolling interests | -1,997 | -1,030 | ||
Comprehensive income attributable to Flowserve Corporation | ($76,041) | $113,456 | ||
[1] | Includes foreign currency translation adjustments attributable to noncontrolling interests of $1.3 million and $1.2 million at January 1, 2015 and 2014 and $1.3 million and $1.4 million at March 31, 2015 and 2014. Includes accumulated net investment hedge losses of $2.1 million, net of deferred taxes, at March 31, 2015. Amounts in parentheses indicate debits. |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation, taxes | $63,561 | ($1,786) |
Pension and other postretirement effects, taxes | 1,692 | -938 |
Cash flow hedging activity, taxes | $2,027 | ($71) |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $333,776 | $450,350 |
Accounts receivable, net of allowance for doubtful accounts of $27,125 and $25,469, respectively | 1,015,544 | 1,082,447 |
Inventories, net | 1,118,940 | 995,564 |
Deferred taxes | 158,803 | 158,912 |
Prepaid expenses and other | 133,275 | 106,890 |
Total current assets | 2,760,338 | 2,794,163 |
Property, plant and equipment, net of accumulated depreciation of $813,562 and $836,981, respectively | 752,015 | 693,881 |
Goodwill | 1,214,919 | 1,067,255 |
Deferred taxes | 27,840 | 31,419 |
Other intangible assets, net | 247,550 | 146,337 |
Other assets, net | 249,019 | 234,965 |
Total assets | 5,251,681 | 4,968,020 |
Current liabilities: | ||
Accounts payable | 484,542 | 611,715 |
Accrued liabilities | 783,758 | 794,072 |
Debt due within one year | 58,739 | 53,131 |
Deferred taxes | 13,727 | 12,957 |
Total current liabilities | 1,340,766 | 1,471,875 |
Long-term debt due after one year | 1,620,782 | 1,101,791 |
Retirement obligations and other liabilities | 525,991 | 452,511 |
Shareholders’ equity: | ||
Common shares, $1.25 par value, Shares authorized - 305,000, Share issued - 176,793 and 176,793, respectively | 220,991 | 220,991 |
Capital in excess of par value | 471,516 | 495,600 |
Retained earnings | 3,418,920 | 3,415,738 |
Treasury shares, at cost – 43,136 and 42,444 shares, respectively | -1,885,594 | -1,830,919 |
Deferred compensation obligation | 10,145 | 10,558 |
Accumulated other comprehensive loss | -484,114 | -380,406 |
Total Flowserve Corporation shareholders’ equity | 1,751,864 | 1,931,562 |
Noncontrolling interests | 12,278 | 10,281 |
Total equity | 1,764,142 | 1,941,843 |
Total liabilities and equity | $5,251,681 | $4,968,020 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Current assets: | ||
Allowance for doubtful accounts | $27,125 | $25,469 |
Accumulated depreciation on property, plant and equipment | $813,562 | $836,981 |
Shareholders’ equity: | ||
Common shares, par value (in dollars per share) | $1.25 | $1.25 |
Common shares, shares authorized | 305,000,000 | 305,000,000 |
Common shares, shares issued | 176,793,000 | 176,793,000 |
Treasury shares, shares | 43,136,000 | 42,444,000 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows – Operating activities: | ||
Net earnings, including noncontrolling interests | $29,645 | $108,588 |
Adjustments to reconcile net earnings to net cash used by operating activities: | ||
Depreciation | 24,600 | 23,058 |
Amortization of intangible and other assets | 9,244 | 4,305 |
Gain on sale of business | 0 | -13,403 |
Excess tax benefits from stock-based payment arrangements | -5,800 | -8,353 |
Stock-based compensation | 9,095 | 9,916 |
Foreign currency and other non-cash adjustments | 28,539 | 7,541 |
Change in assets and liabilities, net of acquisitions | ||
Accounts receivable, net | 59,396 | 77,264 |
Inventories, net | -117,848 | -76,990 |
Prepaid expenses and other | -22,781 | -6,897 |
Other assets, net | -2,330 | 4,025 |
Accounts payable | -131,208 | -132,503 |
Accrued liabilities and income taxes payable | 2,698 | -77,552 |
Retirement obligations and other | 14,432 | -4,437 |
Net deferred taxes | 9,117 | 773 |
Net cash flows used by operating activities | -93,201 | -84,665 |
Cash flows – Investing activities: | ||
Capital expenditures | -83,967 | -31,663 |
Payments for acquisition, net of cash acquired | -341,545 | 0 |
Proceeds from disposal of assets | 1,649 | 301 |
Proceeds from sale of business, net of cash divested | 0 | 46,805 |
Net cash flows (used) provided by investing activities | -423,863 | 15,443 |
Cash flows – Financing activities: | ||
Excess tax benefits from stock-based payment arrangements | 5,800 | 8,353 |
Payments on long-term debt | -10,000 | -10,000 |
Proceeds from issuance of senior notes | 523,418 | 0 |
Payments of deferred loan cost | -1,005 | 0 |
Payments under other financing arrangements | 7,190 | 3,288 |
Payments under other financing arrangements | -5,207 | -1,479 |
Repurchases of common shares | -79,899 | -109,605 |
Payments of dividends | -21,686 | -19,387 |
Other | 264 | -385 |
Net cash flows provided (used) by financing activities | 418,875 | -129,215 |
Effect of exchange rate changes on cash | -18,385 | -951 |
Net change in cash and cash equivalents | -116,574 | -199,388 |
Cash and cash equivalents at beginning of period | 450,350 | 363,804 |
Cash and cash equivalents at end of period | $333,776 | $164,416 |
Basis_of_Presentation_and_Acco
Basis of Presentation and Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Accounting Policies | Basis of Presentation and Accounting Policies |
Basis of Presentation | |
The accompanying condensed consolidated balance sheet as of March 31, 2015, the related condensed consolidated statements of income and comprehensive income for the three months ended March 31, 2015 and 2014, and the condensed consolidated statements of cash flows for the three months ended March 31, 2015 and 2014, of Flowserve Corporation are unaudited. In management’s opinion, all adjustments comprising normal recurring adjustments necessary for fair statement of such condensed consolidated financial statements have been made. | |
The accompanying condensed consolidated financial statements and notes in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 ("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 consolidated financial statements presented in our audited Annual Report on Form 10-K for the year ended December 31, 2014 ("2014 Annual Report"). | |
Venezuela – Our operations in Venezuela generally consist of a service center that performs service and repair activities. Our Venezuelan subsidiary's sales for the three months ended March 31, 2015 represented less than 1% of consolidated sales and its assets at March 31, 2015 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 March 31, 2015. In addition, certain of our operations in other countries sell equipment and parts that are typically denominated in U.S. dollars directly to Venezuelan customers. | |
We have experienced delays in collecting payment on our accounts receivable from the national oil company in Venezuela, our primary Venezuelan customer. These accounts receivable are primarily U.S. dollar-denominated and are not disputed, and we have not historically had write-offs relating to this customer. Our total outstanding accounts receivable with this customer were approximately 9% of our gross accounts receivable at March 31, 2015. Given the experienced delays in collecting payments we estimate that approximately 50% of the outstanding accounts receivable will most likely not be collected within one year and therefore has been classified as long-term within other assets, net on our March 31, 2015 condensed consolidated balance sheet. | |
In the first quarter of 2014, the Venezuelan government expanded the use of periodic auctions for U.S. dollars conducted under the Complementary System of Foreign Currency Administration ("SICAD I"). At March 31, 2015 the SICAD I exchange rate was 12.0 bolivars to the U.S. dollar, compared with the official exchange rate of 6.3 bolivars to the U.S. dollar ("Official"). In addition, during the second quarter of 2014 the Venezuelan government created a third currency exchange mechanism ("SICAD II"). In February 2015, the Venezuelan government created a new currency exchange mechanism, SIMADI, which replaced the SICAD II mechanism. At March 31, 2015, the SIMADI exchange rate was 192 bolivars to the U.S. dollar. | |
As of March 31, 2015, we have determined, based on our specific facts and circumstances, that the SIMADI exchange rate was the most appropriate for the remeasurement of our Venezuelan subsidiary's bolivar-denominated net monetary assets in U.S. dollars. As a result of the remeasurement we recognized a loss of $20.6 million during the three months ended March 31, 2015, of which $18.5 million was reported in other expense, net and $2.1 million in cost of goods sold in our condensed consolidated statement of income and resulted in no tax benefit. | |
We are continuing to assess and monitor the ongoing impact of the changes in the Venezuelan foreign exchange market on our Venezuelan operations and imports into the market, including our Venezuelan subsidiary's ability to remit cash for dividends and other payments at the SIMADI exchange rate, as well as additional government actions, political and labor unrest, or other economic conditions that may adversely impact our future consolidated financial condition or results of operations. | |
Accounting Policies | |
Significant accounting policies, for which no significant changes have occurred in the three months ended March 31, 2015, are detailed in Note 1 to our consolidated financial statements included in our 2014 Annual Report. | |
Accounting Developments | |
Pronouncements Implemented | |
In June 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-11 "Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures." This ASU changes the accounting for repurchase-to-maturity transactions and linked repurchase financings so that such transactions will now be accounted for as secured borrowings. This accounting change is effective for the first interim or annual period beginning after December 15, 2014 and early adoption is not permitted. There are also new disclosure requirements in this ASU. Our adoption of ASU No. 2014-11 did not have an impact on our consolidated financial condition and results of operations. | |
Pronouncements Not Yet Implemented | |
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" which supersedes the revenue recognition requirements in "Revenue Recognition (Topic 605)." The standard is principle-based and provides a five-step model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. There are also expanded disclosure requirements in this ASU. For public entities ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and allows for either full retrospective adoption or modified retrospective adoption. We are currently evaluating the impact of ASU No. 2014-09 on our consolidated financial condition and results of operations. | |
In June 2014, the FASB issued ASU No. 2014-12 "Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period." This ASU was issued to address share-based payment awards with a performance target affecting vesting that could be achieved after the employee’s requisite service period. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. This ASU may be applied either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU No. 2014-12 is not expected to have a material impact on our consolidated financial condition and results of operations. | |
In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern." This ASU requires management to evaluate whether there are conditions or events that raise substantial doubt about the ability of a company to continue as a going concern for one year from the date the financial statements are issued or within one year after the date that the financial statements are available to be issued when applicable. Further, the ASU provides management guidance regarding its responsibility to disclose the ability of a company to continue as a going concern in the notes to the financial statements. This ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The adoption of ASU No. 2014-15 is not expected to have an impact on our consolidated financial condition and results of operations. | |
In November 2014, the FASB issued ASU 2015-01, “Income Statement-Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” In connection with the FASB's efforts to simplify accounting standards, the FASB released new guidance on simplifying Income Statement presentation by eliminating the concept of extraordinary items from U.S. GAAP. With the issuance of this ASU the FASB determined that the elimination of the concept of extraordinary items from U.S. GAAP would reduce the cost and complexity on the application of accounting standards, while maintaining or improving the usefulness of information included in financial statements. The adoption of ASU No. 2015-01 is not expected to have an impact on our consolidated financial condition and results of operations. | |
In February 2015, the FASB issued ASU No. 2015-02, "Consolidation (Topic 810) - Amendments to the Consolidation Analysis,” which provides guidance on the analysis process companies must perform in order to determine whether a legal entity should be consolidated. The new ASU simplifies U.S. GAAP by eliminating entity specific consolidation guidance for limited partnerships. It also revises other aspects of the consolidation analysis, to include the ownership assessment of variable interest entities (VIEs), fee arrangements and how related parties are assessed. The amendments rescind the indefinite deferral of FASB Statement 167, Amendments to FASB Interpretation No. 46(R), for certain investment funds and replace it with a permanent scope exception for money market funds. ASU 2015-02 is effective for periods beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact of ASU No. 2015-02 on our consolidated financial condition and results of operations. | |
In April 2015, the FASB issued ASU No. 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The ASU was issued in connection with the FASB's efforts to simplify accounting standards for the presentation of debt issuance costs. The amendments of this ASU require companies to present debt issuance costs the same manner that present debt discounts are currently reported, as a direct deduction from the carrying value of that debt liability. The applicability of this requirement does not impact the recognition and measurement guidance for debt issuance costs. ASU 2015-03 is effective for periods beginning after December 15, 2015. Early adoption is allowed for financial statements that have yet to be issued. The adoption of ASU No. 2015-03 is not expected to have a material impact on our consolidated financial condition and results of operations. |
Acquisition_and_Disposition
Acquisition and Disposition | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Business Combinations [Abstract] | ||||
Acquisition and Disposition | ||||
2 | Acquisition and Disposition | |||
SIHI Group B.V. | ||||
Effective January 7, 2015, we acquired for inclusion in Industrial Product Division ("IPD"), 100% of SIHI Group B.V. ("SIHI"), a global provider of engineered vacuum and fluid pumps and related services, primarily servicing the chemical market, as well as the pharmaceutical, food & beverage and other process industries, in a stock purchase for €286.7 million ($341.5 million based on exchange rates in effect at the time the acquisition closed and net of cash acquired) in cash. The acquisition was funded using approximately $110 million in available cash and approximately $255 million in initial borrowings from our Revolving Credit Facility, which was subsequently paid down with a portion of the net proceeds from our 2022 EUR Senior Notes discussed in Note 5. SIHI, based in the Netherlands, has operations primarily in Europe and, to a lesser extent, the Americas and Asia. | ||||
The fair value of assets acquired and liabilities assumed has been recorded on a preliminary basis. We will continue to evaluate the initial fair values, which may be adjusted as additional information relative to the fair values of the assets and liabilities becomes available. We currently do not anticipate material adjustments in future periods. The preliminary allocation of the purchase price is summarized below: | ||||
(Amounts in millions) | ||||
Accounts receivable | $ | 56.2 | ||
Inventories | 74 | |||
Prepaid expenses and other | 17.2 | |||
Total current assets | 147.4 | |||
Intangible assets | ||||
Trademarks | 20.9 | |||
Existing customer relationships | 45.3 | |||
Backlog | 8.5 | |||
Engineering drawings and other | 3.9 | |||
Total intangible assets | 78.6 | |||
Property, plant and equipment | 87.5 | |||
Long-term deferred tax asset | 10.7 | |||
Investments in affiliates | 11.6 | |||
Total assets | 335.8 | |||
Current liabilities | (87.0 | ) | ||
Noncurrent liabilities | (101.7 | ) | ||
Net assets | 147.1 | |||
Goodwill | 194.4 | |||
Purchase price, net of cash acquired of $23.4 million | $ | 341.5 | ||
The excess of the acquisition date fair value of the total purchase price over the estimated fair value of the net assets was recorded as goodwill. Goodwill of $194.4 million represents the value expected to be obtained from strengthening Flowserve’s portfolio of products and services through the addition of SIHI's engineered vacuum and fluid pumps, as well as the associated aftermarket services and parts. The goodwill related to this acquisition is recorded in the IPD segment and is not expected to be deductible for tax purposes. The trademarks are primarily indefinite-lived intangibles. Existing customer relationships, engineering drawings and backlog have expected weighted average useful lives of 10 years, 10 years and less than one year, respectively. In total, amortizable intangible assets have a weighted average useful live of approximately 9 years. | ||||
Subsequent to January 7, 2015, the revenues and expenses of SIHI have been included in our condensed consolidated statement of income. The SIHI acquisition generated sales of approximately $67 million for the three months ended March 31, 2015 and decreased earnings by approximately $24 million, including $5.0 million in acquisition-related costs. SIHI's sales (unaudited) were approximately €270 million during its fiscal year ended November 30, 2014. No proforma financial information has been presented due to immateriality. | ||||
Naval OY | ||||
Effective March 31, 2014, we sold our Flow Control Division's ("FCD") Naval OY ("Naval") business to a Finnish valve manufacturer. The sale included Naval's manufacturing facility located in Laitila, Finland and a service and support center located in St. Petersburg, Russia. The cash proceeds for the sale totaled $46.8 million, net of cash divested, and resulted in a $13.4 million pre-tax gain recorded in selling, general and administrative expense in the condensed consolidated statements of income. Net sales related to the Naval business totaled $8.2 million in the first quarter of 2014. |
StockBased_Compensation_Plans
Stock-Based Compensation Plans | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||
Stock-Based Compensation Plans | Stock-Based Compensation Plans | ||||||
We maintain the Flowserve Corporation Equity and Incentive Compensation Plan (the "2010 Plan"), which is a shareholder-approved plan authorizing the issuance of up to 8,700,000 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 Plan, 4,310,368 were available for issuance as of March 31, 2015. The Flowserve Corporation 2004 Stock Compensation Plan expired on June 22, 2014, with 827,835 shares unissued. No stock options have been granted since 2006. | |||||||
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. We had unearned compensation of $49.5 million and $30.6 million at March 31, 2015 and December 31, 2014, respectively, which is expected to be recognized over a weighted-average period of approximately two years. 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 March 31, 2015 and 2014 was $37.8 million and $32.9 million, respectively. | |||||||
We recorded stock-based compensation expense of $6.0 million ($9.1 million pre-tax) and $6.5 million ($9.9 million pre-tax) for the three months ended March 31, 2015 and 2014, respectively. | |||||||
The following table summarizes information regarding Restricted Shares: | |||||||
Three Months Ended March 31, 2015 | |||||||
Shares | Weighted Average | ||||||
Grant-Date Fair | |||||||
Value | |||||||
Number of unvested shares: | |||||||
Outstanding - January 1, 2015 | 1,856,548 | $ | 52.29 | ||||
Granted | 570,193 | 56.07 | |||||
Vested | (892,407 | ) | 42.31 | ||||
Canceled | (71,277 | ) | 60.62 | ||||
Outstanding - March 31, 2015 | 1,463,057 | $ | 59.44 | ||||
Unvested Restricted Shares outstanding as of March 31, 2015, includes approximately 744,000 units with performance-based vesting provisions. Performance-based units are issuable in common stock and vest upon the achievement of pre-defined performance targets, primarily 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. Most units were granted in three annual grants since January 1, 2013 and have a vesting percentage between 0% and 200% depending on the achievement of the specific performance targets. Compensation expense is recognized ratably over a cliff-vesting period of 36 months, based on the fair market value of our common stock on the date of grant, as adjusted for anticipated forfeitures. During the performance period, earned and unearned compensation expense is adjusted based on changes in the expected achievement of the performance targets. Vesting provisions range from 0 to approximately 1,444,000 shares based on performance targets. As of March 31, 2015, we estimate vesting of approximately 909,000 shares based on expected achievement of performance targets. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedges | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||
Derivative Instruments and Hedges | Derivative Instruments and Hedges | |||||||
Our risk management and foreign currency derivatives and hedging policy specifies the conditions under which we may enter into derivative contracts. See Notes 1 and 6 to our consolidated financial statements included in our 2014 Annual Report and Note 6 of this Quarterly Report for additional information on our derivatives. We enter into foreign exchange forward and swap 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. All designated foreign exchange hedging instruments are highly effective as of March 31, 2015. | ||||||||
Foreign exchange contracts designated as hedging instruments had a notional value of $81.0 million and $125.9 million, at March 31, 2015 and December 31, 2014, respectively. Foreign exchange contracts with third parties not designated as hedging instruments had a notional value of $498.9 million and $421.1 million, at March 31, 2015 and December 31, 2014, respectively. At March 31, 2015, the length of foreign exchange contracts currently in place ranged from two days to 34 months. | ||||||||
Also as part of our risk management program, we enter into interest rate swap agreements to hedge exposure to floating interest rates on certain portions of our debt. At March 31, 2015 and December 31, 2014, we had $25.0 million and $40.0 million, respectively, of notional amount in outstanding interest rate swaps with third parties. All interest rate swaps are highly effective. At March 31, 2015, the maximum remaining length of any interest rate swap contract in place was approximately 3 months. | ||||||||
We are exposed to risk from credit-related losses resulting from nonperformance by counterparties to our financial instruments. We perform credit evaluations of our counterparties under foreign exchange contracts and interest rate swap agreements and expect all counterparties to meet their obligations. We have not experienced credit losses from our counterparties. | ||||||||
The fair value of foreign exchange contracts not designated as hedging instruments are summarized below: | ||||||||
March 31, | December 31, | |||||||
(Amounts in thousands) | 2015 | 2014 | ||||||
Current derivative assets | $ | 21,534 | $ | 11,709 | ||||
Noncurrent derivative assets | 15 | 6 | ||||||
Current derivative liabilities | 15,212 | 6,168 | ||||||
Noncurrent derivative liabilities | 435 | 348 | ||||||
The fair value of interest rate swaps and foreign exchange contracts designated as hedging instruments are summarized below: | ||||||||
March 31, | December 31, | |||||||
(Amounts in thousands) | 2015 | 2014 | ||||||
Current derivative liabilities | $ | 10,674 | $ | 6,952 | ||||
Noncurrent derivative liabilities | 846 | 411 | ||||||
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 contracts are summarized below: | ||||||||
Three Months Ended March 31, | ||||||||
(Amounts in thousands) | 2015 | 2014 | ||||||
Gain recognized in income | $ | 25,080 | $ | 1,544 | ||||
Gains and losses recognized in our condensed consolidated statements of income for foreign exchange contracts are classified as other expense, net. | ||||||||
The impact of net changes in the fair values of interest rate swaps in cash flow hedging relationships are immaterial for disclosures purposes. | ||||||||
In March 2015, we designated €255.7 million of our €500.0 million Euro senior notes discussed in Note 5 as a net investment hedge of our investments in certain of our international subsidiaries that use the Euro as their functional currency. We used the spot method to measure the effectiveness of our net investment hedge. Under this method, for each reporting period, the change in the carrying value of the Euro senior notes due to remeasurement of the effective portion is reported in accumulated other comprehensive loss on our condensed consolidated balance sheet and the remaining change in the carrying value of the ineffective portion, if any, is recognized in other expense, net in our condensed statement of income. We evaluate the effectiveness of our net investment hedge on a prospective basis at the beginning of each quarter. We did not record any ineffectiveness for the three months ended March 31, 2015. |
Debt
Debt | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Debt | Debt | |||||||
Debt, including capital lease obligations, consisted of: | ||||||||
March 31, | December 31, | |||||||
(Amounts in thousands, except percentages) | 2015 | 2014 | ||||||
1.25% EUR Senior Notes due March 17, 2022, net of unamortized discount | $ | 532,957 | $ | — | ||||
4.00% USD Senior Notes due November 15, 2023, net of unamortized discount | 298,761 | 298,731 | ||||||
3.50% USD Senior Notes due September 15, 2022, net of unamortized discount | 498,503 | 498,460 | ||||||
Term Loan Facility, interest rate of 1.52% at March 31, 2015 and 1.51% at December 31, 2014 | 320,000 | 330,000 | ||||||
Capital lease obligations and other borrowings | 29,300 | 27,731 | ||||||
Debt and capital lease obligations | 1,679,521 | 1,154,922 | ||||||
Less amounts due within one year | 58,739 | 53,131 | ||||||
Total debt due after one year | $ | 1,620,782 | $ | 1,101,791 | ||||
Senior Notes | ||||||||
On March 17, 2015, we completed a public offering of €500.0 million of Euro senior notes in aggregate principal amount due March 17, 2022 ("2022 EUR Senior Notes"). The 2022 EUR Senior Notes bear an interest rate of 1.25% per year, payable each year on March 17, commencing on March 17, 2016. The 2022 EUR Senior Notes were priced at 99.336% of par value, reflecting a discount to the aggregate principal amount. The net proceeds of the offering were €494.0 million ($523.4 million based on exchange rates in effect at the time the offering closed). We used a portion of the net proceeds of the 2022 EUR Senior Notes to ultimately fund the acquisition of SIHI described in Note 2 and anticipate utilizing the remaining portion for other general corporate purposes. | ||||||||
Senior Credit Facility | ||||||||
As discussed in Note 10 to our consolidated financial statements included in our 2014 Annual Report, on October 4, 2013 we amended our existing credit agreement that provided for a $400.0 million term loan (“Term Loan Facility”) and a $1.0 billion revolving credit facility (“Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Credit Facility”) with a maturity date of October 4, 2018. As of March 31, 2015 and December 31, 2014, we had no amounts outstanding under the Revolving Credit Facility. We had outstanding letters of credit of $78.9 million and $76.8 million at March 31, 2015 and December 31, 2014, respectively, which reduced our borrowing capacity to $921.1 million and $923.2 million, respectively. Our compliance with applicable financial covenants under the Senior Credit Facility is tested quarterly, and we complied with all covenants at March 31, 2015. | ||||||||
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 0.175% (per annum) during the period ended March 31, 2015. During the three months ended March 31, 2015, we made scheduled repayments of $10.0 million under our Term Loan Facility. We have scheduled repayments of $10.0 million due in the next two quarters, $15.0 million in the fourth quarter of 2015 and $15.0 million in the first quarter of 2016 on our Senior Credit Facility. Our Senior Credit Facility bears a floating rate of interest, and we have $25.0 million of notional amount of interest rate swaps at March 31, 2015 to hedge exposure to floating interest rates. | ||||||||
Our Senior Notes and Senior Credit Facility were fully and unconditionally and jointly and severally guaranteed by certain of our 100% owned domestic subsidiaries. Pursuant to the terms of the indentures governing the Senior Notes any guarantees on such debt were subject to release if the Company satisfactorily achieved and met the following guaranty release conditions: (a) obtains a ratings of BBB (stable outlook) or better from S&P and Baa2 (stable outlook) or better from Moody’s and (b) our domestic subsidiaries do not guarantee any material indebtedness. On February 27, 2015 Standard & Poor's Ratings Services raised its corporate credit and senior unsecured debt ratings rating on the Company to BBB from BBB-, with a stable outlook. As of March 11, 2015 Moody’s Investors Services' corporate credit and senior unsecured debt ratings rating on the Company was Baa2, with a stable outlook. As a result, the guarantees of the Senior Notes and Senior Credit Facility were released as of March 26, 2015 upon the discharge of the terms of the note indentures and Senior Credit Facility agreement; therefore, the Company is exempt from disclosing supplemental guarantor financial information in accordance with Rule 3-10 of Regulation S-X, promulgated under the Securities Act of 1933. |
Fair_Value
Fair Value | 3 Months Ended |
Mar. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value |
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models may be applied. Assets and liabilities recorded at fair value in our condensed consolidated balance sheets are categorized by hierarchical levels based upon the level of judgment associated with the inputs used to measure their fair values. Recurring fair value measurements are limited to investments in derivative instruments. The fair value measurements of our derivative instruments are determined using models that maximize the use of the observable market inputs including interest rate curves and both forward and spot prices for currencies, and are classified as Level II under the fair value hierarchy. The fair values of our derivatives are included in Note 4. | |
Our financial instruments are presented at fair value in our condensed consolidated balance sheets, with the exception of our long-term debt. The estimated fair value of our long-term debt, excluding the Senior Notes, approximates the carrying value and is classified as Level II under the fair value hierarchy. The carrying value of our debt is included in Note 5. The estimated fair value of our Senior Notes at March 31, 2015 was $1,345.4 million compared to the carrying value of $1,330.2 million. The estimated fair value of the Senior Notes is based on Level I quoted market rates. The carrying amounts of our other financial instruments (e.g., cash and cash equivalents, accounts receivable, net, accounts payable and short-term debt) approximated fair value due to their short-term nature at March 31, 2015 and December 31, 2014. |
Inventories
Inventories | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Inventories | Inventories | |||||||
Inventories, net consisted of the following: | ||||||||
March 31, | December 31, | |||||||
(Amounts in thousands) | 2015 | 2014 | ||||||
Raw materials | $ | 427,937 | $ | 352,928 | ||||
Work in process | 748,713 | 687,343 | ||||||
Finished goods | 265,807 | 265,439 | ||||||
Less: Progress billings | (245,418 | ) | (230,058 | ) | ||||
Less: Excess and obsolete reserve | (78,099 | ) | (80,088 | ) | ||||
Inventories, net | $ | 1,118,940 | $ | 995,564 | ||||
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Earnings Per Share | Earnings Per Share | |||||||
The following is a reconciliation of net earnings of Flowserve Corporation and weighted average shares for calculating net earnings per common share. Earnings per weighted average common share outstanding was calculated as follows: | ||||||||
Three Months Ended March 31, | ||||||||
(Amounts in thousands, except per share data) | 2015 | 2014 | ||||||
Net earnings of Flowserve Corporation | $ | 27,666 | $ | 107,734 | ||||
Dividends on restricted shares not expected to vest | 3 | 3 | ||||||
Earnings attributable to common and participating shareholders | $ | 27,669 | $ | 107,737 | ||||
Weighted average shares: | ||||||||
Common stock | 134,388 | 137,123 | ||||||
Participating securities | 530 | 611 | ||||||
Denominator for basic earnings per common share | 134,918 | 137,734 | ||||||
Effect of potentially dilutive securities | 1,036 | 1,136 | ||||||
Denominator for diluted earnings per common share | 135,954 | 138,870 | ||||||
Earnings per common share: | ||||||||
Basic | $ | 0.21 | $ | 0.78 | ||||
Diluted | 0.2 | 0.78 | ||||||
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. | ||||||||
For the three months ended both March 31, 2015 and 2014, no options to purchase common stock were excluded from the computation of potentially dilutive securities. |
Legal_Matters_and_Contingencie
Legal Matters and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters and Contingencies | Legal Matters and Contingencies |
Asbestos-Related Claims | |
We are a defendant in a substantial number of lawsuits that seek to recover damages for personal injury allegedly caused by exposure to asbestos-containing products manufactured and/or distributed by our heritage companies in the past. While the overall number of asbestos-related claims has generally declined in recent years, there can be no assurance that this trend will continue, or that the average cost per claim 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. 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, we have recorded a liability for our estimate of the most likely settlement of asserted 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 rulings, judgments or settlement terms regarding these claims could have a material adverse impact on our business, financial condition, results of operations and cash flows, 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, of unasserted asbestos-related claims, although future claims would also be subject to then existing indemnities and insurance coverage. | |
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. The French Court is currently in the process of concluding its formal review process. Hearings occurred on April 1-2, 2015, and the Company presented its defense and closing arguments. The court is expected to rule later this year. 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. | |
In addition to the governmental investigation referenced above, on June 27, 2008, the Republic of Iraq filed a civil suit in federal court in New York against 93 participants in the United Nations Oil-for-Food Program, including us and our two foreign subsidiaries that participated in the program. There have been no material developments in this case since it was initially filed. We intend to vigorously contest the suit, and we believe that we have valid defenses to the claims asserted. While we cannot predict the outcome of the suit at the present time, we do not currently believe the resolution of this suit 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. | |
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 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. |
Retirement_and_Postretirement_
Retirement and Postretirement Benefits | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||
Retirement and Postretirement Benefits | Retirement and Postretirement Benefits | |||||||||||||||||||||||
Components of the net periodic cost for retirement and postretirement benefits for the three months ended March 31, 2015 and 2014 were as follows: | ||||||||||||||||||||||||
U.S. | Non-U.S. | Postretirement | ||||||||||||||||||||||
Defined Benefit Plans | Defined Benefit Plans | Medical Benefits | ||||||||||||||||||||||
(Amounts in millions) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Service cost | $ | 6.2 | $ | 5.7 | $ | 2.2 | $ | 1.7 | $ | — | $ | — | ||||||||||||
Interest cost | 4.3 | 4.4 | 3.3 | 3.7 | 0.3 | 0.3 | ||||||||||||||||||
Expected return on plan assets | (6.1 | ) | (5.5 | ) | (3.0 | ) | (2.7 | ) | — | — | ||||||||||||||
Amortization of prior service cost | 0.1 | 0.1 | — | 0.1 | — | — | ||||||||||||||||||
Amortization of unrecognized net loss (gain) | 2.3 | 2 | 1.3 | 1.7 | (0.1 | ) | (0.4 | ) | ||||||||||||||||
Net periodic cost (benefit) recognized | $ | 6.8 | $ | 6.7 | $ | 3.8 | $ | 4.5 | $ | 0.2 | $ | (0.1 | ) | |||||||||||
Shareholders_Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity |
Dividends – On February 16, 2015, our Board of Directors authorized an increase in the payment of quarterly dividends on our common stock from $0.16 per share to $0.18 per share payable beginning on April 10, 2015. On February 17, 2014, our Board of Directors authorized an increase in the payment of quarterly dividends on our common stock from $0.14 per share to $0.16 per share payable quarterly beginning on April 11, 2014. 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. | |
Share Repurchase Program – On November 13, 2014, our Board of Directors approved a $500.0 million share repurchase authorization, which included approximately $175 million of remaining capacity under the prior $750.0 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 without notice. | |
We repurchased 1,382,025 shares of our outstanding common stock for $79.9 million, and 1,436,423 shares for $109.6 million, during the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015, we have $384.5 million of remaining capacity under our current share repurchase program. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes |
For the three months ended March 31, 2015, we earned $58.2 million before taxes and provided for income taxes of $28.5 million resulting in an effective tax rate of 49.0%. The effective tax rate varied from the U.S. federal statutory rate for the three months ended March 31, 2015 primarily due to tax impacts of our realignment program and the Venezuelan exchange rate remeasurement loss. | |
For the three months ended March 31, 2014, we earned $146.6 million before taxes and provided for income taxes of $38.0 million, resulting in an effective tax rate of 25.9%. The effective tax rate varied from the U.S. federal statutory rate for the three months ended March 31, 2014 primarily due to the net impact of foreign operations and the lapse of the statute of limitations in certain jurisdictions. | |
As of March 31, 2015, the amount of unrecognized tax benefits increased by $8.1 million from December 31, 2014. With limited exception, we are no longer subject to U.S. federal income tax audits for years through 2012, state and local income tax audits for years through 2009 or non-U.S. income tax audits for years through 2007. We are currently under examination for various years in Austria, Germany, India, Italy, Singapore, 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 $11.0 million within the next 12 months. |
Segment_Information
Segment Information | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||
Segment Information | Segment Information | |||||||||||||||||||||||
During the three months ended March 31, 2015, we made composition changes to our Engineered Product Division ("EPD") and IPD reportable segments to take into consideration the acquisition of SIHI that was finalized on January 7, 2015. Effective January 1, 2015, certain activities, primarily related to engineered pumps and seals, that were previously included in the IPD business segment will now be reported in the EPD business segment. These changes did not materially impact segment results or segment assets. We did not change our business segments, management structure, chief operating decision maker or how we evaluate segment performance and allocate resources. Prior periods were retrospectively adjusted to conform to the new reportable segment composition. 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 March 31, 2015 | ||||||||||||||||||||||||
(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 | $ | 473,413 | $ | 214,711 | $ | 326,496 | $ | 1,014,620 | $ | — | $ | 1,014,620 | ||||||||||||
Intersegment sales | 10,747 | 8,655 | 667 | 20,069 | (20,069 | ) | — | |||||||||||||||||
Segment operating income (loss) | 68,828 | (13,338 | ) | 54,715 | 110,205 | (16,829 | ) | 93,376 | ||||||||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||||||||||
(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 | $ | 510,311 | $ | 175,994 | $ | 381,831 | $ | 1,068,136 | $ | — | $ | 1,068,136 | ||||||||||||
Intersegment sales | 13,785 | 10,190 | 1,107 | 25,082 | (25,082 | ) | — | |||||||||||||||||
Segment operating income | 81,353 | 18,788 | 83,133 | 183,274 | (18,948 | ) | 164,326 | |||||||||||||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 3 Months Ended | |||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||||
The following table presents the changes in accumulated other comprehensive loss ("AOCL"), net of tax for the three months ended March 31, 2015 and 2014: | ||||||||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||||||||
(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 - January 1 | $ | (238,533 | ) | $ | (135,398 | ) | $ | (5,210 | ) | $ | (379,141 | ) | $ | (89,953 | ) | $ | (129,528 | ) | $ | (814 | ) | $ | (220,295 | ) | ||||||||
Other comprehensive (loss) income before reclassifications | (106,434 | ) | 5,501 | (8,353 | ) | (109,286 | ) | (2,509 | ) | 298 | 24 | (2,187 | ) | |||||||||||||||||||
Amounts reclassified from AOCL | — | 2,390 | 3,207 | 5,597 | 5,460 | 2,481 | 144 | 8,085 | ||||||||||||||||||||||||
Net current-period other comprehensive (loss) income | (106,434 | ) | 7,891 | (5,146 | ) | (103,689 | ) | 2,951 | 2,779 | 168 | 5,898 | |||||||||||||||||||||
Balance - March 31 | $ | (344,967 | ) | $ | (127,507 | ) | $ | (10,356 | ) | $ | (482,830 | ) | $ | (87,002 | ) | $ | (126,749 | ) | $ | (646 | ) | $ | (214,397 | ) | ||||||||
_______________________________________ | ||||||||||||||||||||||||||||||||
(1) Includes foreign currency translation adjustments attributable to noncontrolling interests of $1.3 million and $1.2 million at January 1, 2015 and 2014 and $1.3 million and $1.4 million at March 31, 2015 and 2014. Includes accumulated net investment hedge losses of $2.1 million, net of deferred taxes, at March 31, 2015. Amounts in parentheses indicate debits. | ||||||||||||||||||||||||||||||||
The following table presents the reclassifications out of AOCL: | ||||||||||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
(Amounts in thousands) | Affected line item in the statement of income | 2015(1) | 2014(1) | |||||||||||||||||||||||||||||
Foreign currency translation items | ||||||||||||||||||||||||||||||||
Release of cumulative translation adjustments due to sale of business | Selling, general and administrative expense | $ | — | $ | (5,460 | ) | ||||||||||||||||||||||||||
Tax benefit | — | — | ||||||||||||||||||||||||||||||
Net of tax | $ | — | $ | (5,460 | ) | |||||||||||||||||||||||||||
Cash flow hedging activity | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | Other expense, net | $ | (3,327 | ) | $ | — | ||||||||||||||||||||||||||
Sales | $ | (1,182 | ) | $ | (230 | ) | ||||||||||||||||||||||||||
Tax benefit | 1,302 | 86 | ||||||||||||||||||||||||||||||
Net of tax | $ | (3,207 | ) | $ | (144 | ) | ||||||||||||||||||||||||||
Pension and other postretirement effects | ||||||||||||||||||||||||||||||||
Amortization of actuarial losses(2) | $ | (3,424 | ) | $ | (3,427 | ) | ||||||||||||||||||||||||||
Prior service costs(2) | (156 | ) | (118 | ) | ||||||||||||||||||||||||||||
Tax benefit | 1,190 | 1,064 | ||||||||||||||||||||||||||||||
Net of tax | $ | (2,390 | ) | $ | (2,481 | ) | ||||||||||||||||||||||||||
_______________________________________ | ||||||||||||||||||||||||||||||||
(1) Amounts in parentheses indicate decreases to income. None of the reclass amounts have a noncontrolling interest component. | ||||||||||||||||||||||||||||||||
-2 | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 10 for additional details. | |||||||||||||||||||||||||||||||
At March 31, 2015, we expect to recognize a loss of $7.1 million, net of deferred taxes, into earnings in the next twelve months related to designated cash flow hedges based on their fair values at March 31, 2015. |
Realignment_Program
Realignment Program | 3 Months Ended |
Mar. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Realignment Program | 15. Realignment Program |
In the first quarter of 2015, we initiated a realignment program to reduce and optimize certain non-strategic QRC and manufacturing facilities primarily resulting from the SIHI acquisition. We expect total charges will be $39.0 million for approved plans, of which $26.3 million has been incurred through March 31, 2015. We anticipate that the majority of the charges will be incurred through the remainder of 2015 and early 2016. | |
The realignment program consists 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 primarily represent employee severance. Non-restructuring charges are costs incurred to improve operating efficiency and reduce redundancies and primarily represent employee severance. Expenses are primarily reported in COS or SG&A, as applicable, in our condensed consolidated statements of income. | |
Realignment charges, net of adjustments, were $26.3 million and $1.0 million for the three months ended March 31, 2015 and 2014, respectively. Of the 2015 charges, $20.6 million was recorded in IPD and $0.6 million in EPD, and $5.0 million was reported in income tax expense in our condensed consolidated statement of income for the three months ended March 31, 2015. The majority of these charges are restructuring in nature. | |
Generally, the aforementioned charges will be paid in cash, except for asset write-downs, which are non-cash charges. There were no asset write-downs for the three months ended March 31, 2015. The majority of the cash payments will be incurred through the remainder of 2015 and early 2016. The restructuring reserve related to our realignment programs was $21.2 million and $1.1 million at March 31, 2015 and December 31, 2014, respectively. Other than the aforementioned realignment charges there was no significant activity related to the restructuring reserve during the three months ended March 31, 2015. |
Basis_of_Presentation_and_Acco1
Basis of Presentation and Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | Accounting Developments |
Pronouncements Implemented | |
In June 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-11 "Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures." This ASU changes the accounting for repurchase-to-maturity transactions and linked repurchase financings so that such transactions will now be accounted for as secured borrowings. This accounting change is effective for the first interim or annual period beginning after December 15, 2014 and early adoption is not permitted. There are also new disclosure requirements in this ASU. Our adoption of ASU No. 2014-11 did not have an impact on our consolidated financial condition and results of operations. | |
Pronouncements Not Yet Implemented | |
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" which supersedes the revenue recognition requirements in "Revenue Recognition (Topic 605)." The standard is principle-based and provides a five-step model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. There are also expanded disclosure requirements in this ASU. For public entities ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and allows for either full retrospective adoption or modified retrospective adoption. We are currently evaluating the impact of ASU No. 2014-09 on our consolidated financial condition and results of operations. | |
In June 2014, the FASB issued ASU No. 2014-12 "Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period." This ASU was issued to address share-based payment awards with a performance target affecting vesting that could be achieved after the employee’s requisite service period. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. This ASU may be applied either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU No. 2014-12 is not expected to have a material impact on our consolidated financial condition and results of operations. | |
In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern." This ASU requires management to evaluate whether there are conditions or events that raise substantial doubt about the ability of a company to continue as a going concern for one year from the date the financial statements are issued or within one year after the date that the financial statements are available to be issued when applicable. Further, the ASU provides management guidance regarding its responsibility to disclose the ability of a company to continue as a going concern in the notes to the financial statements. This ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The adoption of ASU No. 2014-15 is not expected to have an impact on our consolidated financial condition and results of operations. | |
In November 2014, the FASB issued ASU 2015-01, “Income Statement-Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” In connection with the FASB's efforts to simplify accounting standards, the FASB released new guidance on simplifying Income Statement presentation by eliminating the concept of extraordinary items from U.S. GAAP. With the issuance of this ASU the FASB determined that the elimination of the concept of extraordinary items from U.S. GAAP would reduce the cost and complexity on the application of accounting standards, while maintaining or improving the usefulness of information included in financial statements. The adoption of ASU No. 2015-01 is not expected to have an impact on our consolidated financial condition and results of operations. | |
In February 2015, the FASB issued ASU No. 2015-02, "Consolidation (Topic 810) - Amendments to the Consolidation Analysis,” which provides guidance on the analysis process companies must perform in order to determine whether a legal entity should be consolidated. The new ASU simplifies U.S. GAAP by eliminating entity specific consolidation guidance for limited partnerships. It also revises other aspects of the consolidation analysis, to include the ownership assessment of variable interest entities (VIEs), fee arrangements and how related parties are assessed. The amendments rescind the indefinite deferral of FASB Statement 167, Amendments to FASB Interpretation No. 46(R), for certain investment funds and replace it with a permanent scope exception for money market funds. ASU 2015-02 is effective for periods beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact of ASU No. 2015-02 on our consolidated financial condition and results of operations. | |
In April 2015, the FASB issued ASU No. 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The ASU was issued in connection with the FASB's efforts to simplify accounting standards for the presentation of debt issuance costs. The amendments of this ASU require companies to present debt issuance costs the same manner that present debt discounts are currently reported, as a direct deduction from the carrying value of that debt liability. The applicability of this requirement does not impact the recognition and measurement guidance for debt issuance costs. ASU 2015-03 is effective for periods beginning after December 15, 2015. Early adoption is allowed for financial statements that have yet to be issued. The adoption of ASU No. 2015-03 is not expected to have a material impact on our consolidated financial condition and results of operations. | |
Fair Value | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models may be applied. Assets and liabilities recorded at fair value in our condensed consolidated balance sheets are categorized by hierarchical levels based upon the level of judgment associated with the inputs used to measure their fair values. Recurring fair value measurements are limited to investments in derivative instruments. The fair value measurements of our derivative instruments are determined using models that maximize the use of the observable market inputs including interest rate curves and both forward and spot prices for currencies, and are classified as Level II under the fair value hierarchy. The fair values of our derivatives are included in Note 4. |
Acquisition_and_Disposition_Ta
Acquisition and Disposition (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Business Combinations [Abstract] | ||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Acquisition and Disposition | |||
SIHI Group B.V. | ||||
Effective January 7, 2015, we acquired for inclusion in Industrial Product Division ("IPD"), 100% of SIHI Group B.V. ("SIHI"), a global provider of engineered vacuum and fluid pumps and related services, primarily servicing the chemical market, as well as the pharmaceutical, food & beverage and other process industries, in a stock purchase for €286.7 million ($341.5 million based on exchange rates in effect at the time the acquisition closed and net of cash acquired) in cash. The acquisition was funded using approximately $110 million in available cash and approximately $255 million in initial borrowings from our Revolving Credit Facility, which was subsequently paid down with a portion of the net proceeds from our 2022 EUR Senior Notes discussed in Note 5. SIHI, based in the Netherlands, has operations primarily in Europe and, to a lesser extent, the Americas and Asia. | ||||
The fair value of assets acquired and liabilities assumed has been recorded on a preliminary basis. We will continue to evaluate the initial fair values, which may be adjusted as additional information relative to the fair values of the assets and liabilities becomes available. We currently do not anticipate material adjustments in future periods. The preliminary allocation of the purchase price is summarized below: | ||||
(Amounts in millions) | ||||
Accounts receivable | $ | 56.2 | ||
Inventories | 74 | |||
Prepaid expenses and other | 17.2 | |||
Total current assets | 147.4 | |||
Intangible assets | ||||
Trademarks | 20.9 | |||
Existing customer relationships | 45.3 | |||
Backlog | 8.5 | |||
Engineering drawings and other | 3.9 | |||
Total intangible assets | 78.6 | |||
Property, plant and equipment | 87.5 | |||
Long-term deferred tax asset | 10.7 | |||
Investments in affiliates | 11.6 | |||
Total assets | 335.8 | |||
Current liabilities | (87.0 | ) | ||
Noncurrent liabilities | (101.7 | ) | ||
Net assets | 147.1 | |||
Goodwill | 194.4 | |||
Purchase price, net of cash acquired of $23.4 million | $ | 341.5 | ||
StockBased_Compensation_Plans_
Stock-Based Compensation Plans (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||
Information Regarding Restricted Shares | The following table summarizes information regarding Restricted Shares: | ||||||
Three Months Ended March 31, 2015 | |||||||
Shares | Weighted Average | ||||||
Grant-Date Fair | |||||||
Value | |||||||
Number of unvested shares: | |||||||
Outstanding - January 1, 2015 | 1,856,548 | $ | 52.29 | ||||
Granted | 570,193 | 56.07 | |||||
Vested | (892,407 | ) | 42.31 | ||||
Canceled | (71,277 | ) | 60.62 | ||||
Outstanding - March 31, 2015 | 1,463,057 | $ | 59.44 | ||||
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedges (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||
Summary of Fair Value of Forward Exchange Contracts not Designated as Hedging Instruments | The fair value of foreign exchange contracts not designated as hedging instruments are summarized below: | |||||||
March 31, | December 31, | |||||||
(Amounts in thousands) | 2015 | 2014 | ||||||
Current derivative assets | $ | 21,534 | $ | 11,709 | ||||
Noncurrent derivative assets | 15 | 6 | ||||||
Current derivative liabilities | 15,212 | 6,168 | ||||||
Noncurrent derivative liabilities | 435 | 348 | ||||||
Summary of Fair Value of Interest Rate Swaps and forward exchange derivative contracts in Designated Hedging Relationships | The fair value of interest rate swaps and foreign exchange contracts designated as hedging instruments are summarized below: | |||||||
March 31, | December 31, | |||||||
(Amounts in thousands) | 2015 | 2014 | ||||||
Current derivative liabilities | $ | 10,674 | $ | 6,952 | ||||
Noncurrent derivative liabilities | 846 | 411 | ||||||
Impact of Net Changes in Fair Values of Forward Exchange Contracts Not Designated as Hedging Instruments | The impact of net changes in the fair values of foreign exchange contracts are summarized below: | |||||||
Three Months Ended March 31, | ||||||||
(Amounts in thousands) | 2015 | 2014 | ||||||
Gain recognized in income | $ | 25,080 | $ | 1,544 | ||||
Gains and losses recognized in our condensed consolidated statements of income for foreign exchange contracts are classified as other expense, net. |
Debt_Tables
Debt (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Debt Including Capital Lease Obligations | Debt, including capital lease obligations, consisted of: | |||||||
March 31, | December 31, | |||||||
(Amounts in thousands, except percentages) | 2015 | 2014 | ||||||
1.25% EUR Senior Notes due March 17, 2022, net of unamortized discount | $ | 532,957 | $ | — | ||||
4.00% USD Senior Notes due November 15, 2023, net of unamortized discount | 298,761 | 298,731 | ||||||
3.50% USD Senior Notes due September 15, 2022, net of unamortized discount | 498,503 | 498,460 | ||||||
Term Loan Facility, interest rate of 1.52% at March 31, 2015 and 1.51% at December 31, 2014 | 320,000 | 330,000 | ||||||
Capital lease obligations and other borrowings | 29,300 | 27,731 | ||||||
Debt and capital lease obligations | 1,679,521 | 1,154,922 | ||||||
Less amounts due within one year | 58,739 | 53,131 | ||||||
Total debt due after one year | $ | 1,620,782 | $ | 1,101,791 | ||||
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Net Components of Inventory | Inventories, net consisted of the following: | |||||||
March 31, | December 31, | |||||||
(Amounts in thousands) | 2015 | 2014 | ||||||
Raw materials | $ | 427,937 | $ | 352,928 | ||||
Work in process | 748,713 | 687,343 | ||||||
Finished goods | 265,807 | 265,439 | ||||||
Less: Progress billings | (245,418 | ) | (230,058 | ) | ||||
Less: Excess and obsolete reserve | (78,099 | ) | (80,088 | ) | ||||
Inventories, net | $ | 1,118,940 | $ | 995,564 | ||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Calculation of Net Earnings Per Common Share and Weighted Average Common Share Outstanding | The following is a reconciliation of net earnings of Flowserve Corporation and weighted average shares for calculating net earnings per common share. Earnings per weighted average common share outstanding was calculated as follows: | |||||||
Three Months Ended March 31, | ||||||||
(Amounts in thousands, except per share data) | 2015 | 2014 | ||||||
Net earnings of Flowserve Corporation | $ | 27,666 | $ | 107,734 | ||||
Dividends on restricted shares not expected to vest | 3 | 3 | ||||||
Earnings attributable to common and participating shareholders | $ | 27,669 | $ | 107,737 | ||||
Weighted average shares: | ||||||||
Common stock | 134,388 | 137,123 | ||||||
Participating securities | 530 | 611 | ||||||
Denominator for basic earnings per common share | 134,918 | 137,734 | ||||||
Effect of potentially dilutive securities | 1,036 | 1,136 | ||||||
Denominator for diluted earnings per common share | 135,954 | 138,870 | ||||||
Earnings per common share: | ||||||||
Basic | $ | 0.21 | $ | 0.78 | ||||
Diluted | 0.2 | 0.78 | ||||||
Retirement_and_Postretirement_1
Retirement and Postretirement Benefits (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||
Components of Net Periodic Cost for Pension and Postretirement Benefits | Components of the net periodic cost for retirement and postretirement benefits for the three months ended March 31, 2015 and 2014 were as follows: | |||||||||||||||||||||||
U.S. | Non-U.S. | Postretirement | ||||||||||||||||||||||
Defined Benefit Plans | Defined Benefit Plans | Medical Benefits | ||||||||||||||||||||||
(Amounts in millions) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Service cost | $ | 6.2 | $ | 5.7 | $ | 2.2 | $ | 1.7 | $ | — | $ | — | ||||||||||||
Interest cost | 4.3 | 4.4 | 3.3 | 3.7 | 0.3 | 0.3 | ||||||||||||||||||
Expected return on plan assets | (6.1 | ) | (5.5 | ) | (3.0 | ) | (2.7 | ) | — | — | ||||||||||||||
Amortization of prior service cost | 0.1 | 0.1 | — | 0.1 | — | — | ||||||||||||||||||
Amortization of unrecognized net loss (gain) | 2.3 | 2 | 1.3 | 1.7 | (0.1 | ) | (0.4 | ) | ||||||||||||||||
Net periodic cost (benefit) recognized | $ | 6.8 | $ | 6.7 | $ | 3.8 | $ | 4.5 | $ | 0.2 | $ | (0.1 | ) | |||||||||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||
Summarized Financial Information of Reportable Segments | The following is a summary of the financial information of the reportable segments reconciled to the amounts reported in the condensed consolidated financial statements: | |||||||||||||||||||||||
Three Months Ended March 31, 2015 | ||||||||||||||||||||||||
(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 | $ | 473,413 | $ | 214,711 | $ | 326,496 | $ | 1,014,620 | $ | — | $ | 1,014,620 | ||||||||||||
Intersegment sales | 10,747 | 8,655 | 667 | 20,069 | (20,069 | ) | — | |||||||||||||||||
Segment operating income (loss) | 68,828 | (13,338 | ) | 54,715 | 110,205 | (16,829 | ) | 93,376 | ||||||||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||||||||||
(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 | $ | 510,311 | $ | 175,994 | $ | 381,831 | $ | 1,068,136 | $ | — | $ | 1,068,136 | ||||||||||||
Intersegment sales | 13,785 | 10,190 | 1,107 | 25,082 | (25,082 | ) | — | |||||||||||||||||
Segment operating income | 81,353 | 18,788 | 83,133 | 183,274 | (18,948 | ) | 164,326 | |||||||||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended | |||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the changes in accumulated other comprehensive loss ("AOCL"), net of tax for the three months ended March 31, 2015 and 2014: | |||||||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||||||||
(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 - January 1 | $ | (238,533 | ) | $ | (135,398 | ) | $ | (5,210 | ) | $ | (379,141 | ) | $ | (89,953 | ) | $ | (129,528 | ) | $ | (814 | ) | $ | (220,295 | ) | ||||||||
Other comprehensive (loss) income before reclassifications | (106,434 | ) | 5,501 | (8,353 | ) | (109,286 | ) | (2,509 | ) | 298 | 24 | (2,187 | ) | |||||||||||||||||||
Amounts reclassified from AOCL | — | 2,390 | 3,207 | 5,597 | 5,460 | 2,481 | 144 | 8,085 | ||||||||||||||||||||||||
Net current-period other comprehensive (loss) income | (106,434 | ) | 7,891 | (5,146 | ) | (103,689 | ) | 2,951 | 2,779 | 168 | 5,898 | |||||||||||||||||||||
Balance - March 31 | $ | (344,967 | ) | $ | (127,507 | ) | $ | (10,356 | ) | $ | (482,830 | ) | $ | (87,002 | ) | $ | (126,749 | ) | $ | (646 | ) | $ | (214,397 | ) | ||||||||
_______________________________________ | ||||||||||||||||||||||||||||||||
(1) Includes foreign currency translation adjustments attributable to noncontrolling interests of $1.3 million and $1.2 million at January 1, 2015 and 2014 and $1.3 million and $1.4 million at March 31, 2015 and 2014. Includes accumulated net investment hedge losses of $2.1 million, net of deferred taxes, at March 31, 2015. Amounts in parentheses indicate debits. | ||||||||||||||||||||||||||||||||
Reclassifications out of Accumulated Other Comprehensive Income (Loss) | The following table presents the reclassifications out of AOCL: | |||||||||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
(Amounts in thousands) | Affected line item in the statement of income | 2015(1) | 2014(1) | |||||||||||||||||||||||||||||
Foreign currency translation items | ||||||||||||||||||||||||||||||||
Release of cumulative translation adjustments due to sale of business | Selling, general and administrative expense | $ | — | $ | (5,460 | ) | ||||||||||||||||||||||||||
Tax benefit | — | — | ||||||||||||||||||||||||||||||
Net of tax | $ | — | $ | (5,460 | ) | |||||||||||||||||||||||||||
Cash flow hedging activity | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | Other expense, net | $ | (3,327 | ) | $ | — | ||||||||||||||||||||||||||
Sales | $ | (1,182 | ) | $ | (230 | ) | ||||||||||||||||||||||||||
Tax benefit | 1,302 | 86 | ||||||||||||||||||||||||||||||
Net of tax | $ | (3,207 | ) | $ | (144 | ) | ||||||||||||||||||||||||||
Pension and other postretirement effects | ||||||||||||||||||||||||||||||||
Amortization of actuarial losses(2) | $ | (3,424 | ) | $ | (3,427 | ) | ||||||||||||||||||||||||||
Prior service costs(2) | (156 | ) | (118 | ) | ||||||||||||||||||||||||||||
Tax benefit | 1,190 | 1,064 | ||||||||||||||||||||||||||||||
Net of tax | $ | (2,390 | ) | $ | (2,481 | ) | ||||||||||||||||||||||||||
_______________________________________ | ||||||||||||||||||||||||||||||||
(1) Amounts in parentheses indicate decreases to income. None of the reclass amounts have a noncontrolling interest component. | ||||||||||||||||||||||||||||||||
-2 | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 10 for additional details. |
Basis_of_Presentation_and_Acco2
Basis of Presentation and Accounting Policies (Details) | 3 Months Ended | |||||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | |
USD ($) | USD ($) | Venezuela | Venezuela | SICAD I Exchange rate | SIMADI Exchange Rate | |
USD ($) | VEF | Venezuela | Venezuela | |||
VEF | VEF | |||||
Segment sales percentage of consolidated sales (less than 1%) | 1.00% | |||||
SegmentAssetsPercentageOfConsolidatedAssets | 0.50% | |||||
Percentage of outstanding accounts receivable | 9.00% | |||||
Percentage of Receivables Re-classed to Long Term | 50.00% | |||||
Foreign currency exchange rate, translation | 6.3 | 12 | 192 | |||
Remeasurement loss | ($28,539,000) | ($7,541,000) | $20,600,000 | |||
Remeasurement Recognized In Other Expense Net | 18,500,000 | |||||
Currency Remeasurement Expense Recognized as Cost of Goods Sold | $2,100,000 |
Acquisition_and_Disposition_De
Acquisition and Disposition (Details) | 3 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2014 | Jan. 07, 2015 | Jan. 07, 2015 | Mar. 31, 2015 | Nov. 30, 2014 | Jan. 07, 2015 | Jan. 07, 2015 | Mar. 31, 2015 | Jan. 07, 2015 | Mar. 31, 2015 | Jan. 07, 2015 | Mar. 31, 2015 | Jan. 07, 2015 | |
USD ($) | USD ($) | USD ($) | Naval OY | SIHI Group B.V. | SIHI Group B.V. | SIHI Group B.V. | SIHI Group B.V. | SIHI Group B.V. | SIHI Group B.V. | SIHI Group B.V. | SIHI Group B.V. | SIHI Group B.V. | SIHI Group B.V. | SIHI Group B.V. | SIHI Group B.V. | |
USD ($) | USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | Trademarks | Existing customer relationships | Existing customer relationships | Backlog | Backlog | Engineering drawings and other | Engineering drawings and other | ||||
USD ($) | USD ($) | USD ($) | USD ($) | |||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||
Business Acquisition, Purchase Price, Net of Cash Acquired | $23,400,000 | |||||||||||||||
Percentage acquired | 100.00% | |||||||||||||||
Business Combination, Consideration Transferred | 341,500,000 | 286,700,000 | ||||||||||||||
Business Combination, Cash Consideration Transferred | 110,000,000 | |||||||||||||||
Business Combination, Consideration Transferred from borrowed sources | 255,000,000 | |||||||||||||||
Accounts receivable | 56,200,000 | |||||||||||||||
Inventories | 74,000,000 | |||||||||||||||
Prepaid expenses and other | 17,200,000 | |||||||||||||||
Total current assets | 147,400,000 | |||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 78,600,000 | 20,900,000 | 45,300,000 | 8,500,000 | 3,900,000 | |||||||||||
Property, plant and equipment | 87,500,000 | |||||||||||||||
Long-term deferred tax asset | 10,700,000 | |||||||||||||||
Investments in affiliates | 11,600,000 | |||||||||||||||
Total assets | 335,800,000 | |||||||||||||||
Current liabilities | -87,000,000 | |||||||||||||||
Noncurrent liabilities | -101,700,000 | |||||||||||||||
Net assets | 147,100,000 | |||||||||||||||
Goodwill | 1,214,919,000 | 1,067,255,000 | 194,400,000 | |||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years | 10 years | 1 year | 10 years | ||||||||||||
Business Acquisition, Sales Generated by Acquired Entity | 67,000,000 | |||||||||||||||
Business Acquisition Impact On Operating Income | 24,400,000 | |||||||||||||||
Business Acquisition Related Costs | 5,000,000 | |||||||||||||||
Purchase price, net of cash acquired of $23.4 million | 341,500,000 | |||||||||||||||
Business Acquisition, Revenue Reported by Acquired Entity for Last Annual Period | 270,000,000 | |||||||||||||||
Proceeds from sale of business, net of cash divested | 0 | 46,805,000 | 46,800,000 | |||||||||||||
Gain (Loss) on Disposition of Business | 0 | 13,403,000 | 13,400,000 | |||||||||||||
Disposal Group, Including Discontinued Operation, Revenue | $8,200,000 |
StockBased_Compensation_Plans_1
Stock-Based Compensation Plans (Details) (USD $) | 3 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Jun. 22, 2014 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted during period | 0 | |||
Plan 2010 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized to issue under share based compensation plans | 8,700,000 | |||
Common stock available under stock option plan | 4,310,368 | |||
Plan 2004 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Expired | 827,835 | |||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 1,463,057 | 1,856,548 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 570,193 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value (less than $0.1 million during the three months ended September 30, 2014) | 37.8 | $32.90 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | 49.5 | 30.6 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years | |||
Allocated Share-based Compensation Expense, Net of Tax | 6 | 6.5 | ||
Allocated Share-based Compensation Expense | 9.1 | $9.90 | ||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 744,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 3 years | |||
Period for achieving performance targets on performance based units (years) | 3 | |||
Vesting period | 36 months | |||
Minimum range of vesting provisions | 0 | |||
Maximum range of vesting provisions | 1,444,000 | |||
Estimated vesting of shares based on performance shares | 909,000 | |||
Minimum | Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 0.00% | |||
Maximum | Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 200.00% |
StockBased_Compensation_Plans_2
Stock-Based Compensation Plans (Information Regarding Restricted Shares) (Details) (Restricted Stock, USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Restricted Stock | |
Shares | |
Outstanding, Shares, Beginning balance | 1,856,548 |
Vested, Shares | -892,407 |
Cancelled, Shares | -71,277 |
Outstanding, Shares, Ending balance | 1,463,057 |
Weighted Average Grant-Date Fair Value | |
Outstanding, Weighted Average Grant-Date Fair Value, Beginning balance | $52.29 |
Granted, Weighted Average Grant-Date Fair Value | $56.07 |
Vested, Weighted Average Grant-Date Fair Value | $42.31 |
Cancelled, Weighted Average Grant-Date Fair Value | $60.62 |
Outstanding, Weighted Average Grant-Date Fair Value, Ending balance | $59.44 |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedges (Details Textual) | 3 Months Ended | |||||||||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 17, 2015 | Mar. 17, 2015 |
Forward Exchange Contract [Member] | Interest Rate Swap | Interest Rate Swap | Designated as Hedging Instrument [Member] | Designated as Hedging Instrument [Member] | Not Designated as Hedging Instrument [Member] | Not Designated as Hedging Instrument [Member] | 2022 EUR Senior Notes | 2022 EUR Senior Notes | ||
USD ($) | USD ($) | Forward Exchange Contract [Member] | Forward Exchange Contract [Member] | Forward Exchange Contract [Member] | Forward Exchange Contract [Member] | USD ($) | EUR (€) | |||
USD ($) | USD ($) | USD ($) | USD ($) | |||||||
Derivative [Line Items] | ||||||||||
Designated Amount, Net Investment Hedge | € 255.70 | |||||||||
Derivative, notional amount | 25 | 40 | 81 | 125.9 | 498.9 | 421.1 | ||||
Lower maturity range | 2 days | |||||||||
Higher maturity range | 34 months | |||||||||
Maximum remaining length of interest rate swap contract | 3 months | |||||||||
Debt Instrument, Face Amount | $500 | € 500 |
Derivative_Instruments_and_Hed3
Derivative Instruments and Hedges (Fair Value Balance Sheet Disclosures) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | ||
Derivative [Line Items] | ||
Current derivative assets | $21,534 | $11,709 |
Noncurrent derivative assets | 15 | 6 |
Current derivative liabilities | 15,212 | 6,168 |
Noncurrent derivative liabilities | 435 | 348 |
Designated as Hedging Instrument [Member] | Interest Rate Swaps and Foreign Exchange Contracts [Member] | ||
Derivative [Line Items] | ||
Current derivative liabilities | 10,674 | 6,952 |
Noncurrent derivative liabilities | $846 | $411 |
Derivative_Instruments_and_Hed4
Derivative Instruments and Hedges (Fair Value of Forward Exchange Contracts) (Details) (Not Designated as Hedging Instrument [Member], Forward Contracts [Member], USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Not Designated as Hedging Instrument [Member] | Forward Contracts [Member] | ||
Derivative [Line Items] | ||
Gain recognized in income | $25,080 | $1,544 |
Debt_Schedule_of_Debt_Details
Debt (Schedule of Debt) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ||
Capital lease obligations and other borrowings | $29,300 | $27,731 |
Debt and capital lease obligations | 1,679,521 | 1,154,922 |
Less amounts due within one year | 58,739 | 53,131 |
Total debt due after one year | 1,620,782 | 1,101,791 |
2022 EUR Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 532,957 | 0 |
Stated interest rate (as a percent) | 1.25% | 0.00% |
2023 Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 298,761 | 298,731 |
Stated interest rate (as a percent) | 4.00% | 4.00% |
2022 Senior notes | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 498,503 | 498,460 |
Stated interest rate (as a percent) | 3.50% | 3.50% |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Term Loan Facility | $320,000 | $330,000 |
Effective interest rate (as a percent) | 1.52% | 1.51% |
Debt_Details_Textual
Debt (Details Textual) | 0 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||||||
Mar. 17, 2015 | Mar. 17, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Oct. 04, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | Oct. 04, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 17, 2015 | Mar. 17, 2015 | |
USD ($) | EUR (€) | USD ($) | USD ($) | Interest Rate Swap | Interest Rate Swap | Term Loan Facility | Term Loan Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Senior Credit Facility | Senior Credit Facility | Senior Credit Facility | Senior Credit Facility | Senior Credit Facility | Senior Credit Facility | 2022 EUR Senior Notes | 2022 EUR Senior Notes | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Scenario, Forecast | Scenario, Forecast | Scenario, Forecast | Scenario, Forecast | USD ($) | EUR (€) | |||||
USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||||
Debt Instrument, Face Amount | $400,000,000 | $500,000,000 | € 500,000,000 | ||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 1,000,000,000 | ||||||||||||||||||
Revolving Credit Facility | 0 | 0 | |||||||||||||||||
Letters of credit outstanding | 78,900,000 | 76,800,000 | |||||||||||||||||
Line of Credit Facility, Current Borrowing Capacity | 921,100,000 | 923,200,000 | |||||||||||||||||
Line of credit, commitment fee (as a percentage) | 0.18% | ||||||||||||||||||
Payments on long-term debt | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||||
Credit Facilities Scheduled Repayments Due in Next Two Quarters | 10,000,000 | 10,000,000 | |||||||||||||||||
Credit Facilities Scheduled Repayments Due In the Fourth Quarter | 15,000,000 | ||||||||||||||||||
Credit Facilities Scheduled Repayments Due In the First Quarter of Next Year | 15,000,000 | ||||||||||||||||||
Derivative, notional amount | 25,000,000 | 40,000,000 | |||||||||||||||||
Domestic subsidiaries unconditional guarantee | 100.00% | ||||||||||||||||||
Debt Instrument, Interest Rate Terms | 0.0125 | 0.0125 | |||||||||||||||||
Price of senior notes, stated as percentage of principal amount | 99.34% | ||||||||||||||||||
Proceeds from Issuance of Debt | $523,400,000 | € 494,000,000 |
Fair_Value_Details
Fair Value (Details) (USD $) | Mar. 31, 2015 |
In Millions, unless otherwise specified | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Senior notes | $1,330.20 |
Estimate of Fair Value Measurement [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Senior notes | $1,345.40 |
Inventories_Details
Inventories (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Net Components of Inventory | ||
Raw materials | $427,937 | $352,928 |
Work in process | 748,713 | 687,343 |
Finished goods | 265,807 | 265,439 |
Less: Progress billings | -245,418 | -230,058 |
Less: Excess and obsolete reserve | -78,099 | -80,088 |
Inventories, net | $1,118,940 | $995,564 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Calculation of net earnings per common share and weighted average common share outstanding | ||
Net earnings of Flowserve Corporation | $27,666 | $107,734 |
Dividends on restricted shares not expected to vest | 3 | 3 |
Earnings attributable to common and participating shareholders | $27,669 | $107,737 |
Weighted average shares: | ||
Common stock | 134,388,000 | 137,123,000 |
Participating securities | 530,000 | 611,000 |
Denominator for basic earnings per common share | 134,918,000 | 137,734,000 |
Effect of potentially dilutive securities | 1,036,000 | 1,136,000 |
Denominator for diluted earnings per common share | 135,954,000 | 138,870,000 |
Earnings per common share: | ||
Basic (in dollars per share) | $0.21 | $0.78 |
Diluted (in dollars per share) | $0.20 | $0.78 |
Options to purchase common stock excluded from computation of dilutive securities | 0 | 0 |
Legal_Matters_and_Contingencie1
Legal Matters and Contingencies (Details) | 3 Months Ended |
Mar. 31, 2015 | |
site | |
Legal Matters and Contingencies | |
Number of former public waste disposal sites | 5 |
Oil-for-Food Program [Member] | |
Legal Matters and Contingencies | |
Number of French companies for investigation (over 170) | 170 |
Number of our French companies for investigation | 1 |
Number of participants in U.N Oil-for-Food Program | 93 |
Number of foreign subsidiaries | 2 |
Retirement_and_Postretirement_2
Retirement and Postretirement Benefits (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
U.S Defined Benefit Plans [Member] | ||
Components of the net periodic cost for retirement and postretirement benefits | ||
Service cost | $6,200,000 | $5,700,000 |
Interest cost | 4,300,000 | 4,400,000 |
Expected return on plan assets | -6,100,000 | -5,500,000 |
Amortization of prior service cost | 100,000 | 100,000 |
Amortization of unrecognized net loss (gain) | 2,300,000 | 2,000,000 |
Net periodic cost (benefit) recognized | 6,800,000 | 6,700,000 |
Non-U.S Defined Benefit Plans [Member] | ||
Components of the net periodic cost for retirement and postretirement benefits | ||
Service cost | 2,200,000 | 1,700,000 |
Interest cost | 3,300,000 | 3,700,000 |
Expected return on plan assets | -3,000,000 | -2,700,000 |
Amortization of prior service cost | 0 | 100,000 |
Amortization of unrecognized net loss (gain) | 1,300,000 | 1,700,000 |
Net periodic cost (benefit) recognized | 3,800,000 | 4,500,000 |
Postretirement Medical Benefits [Member] | ||
Components of the net periodic cost for retirement and postretirement benefits | ||
Service cost | 0 | 0 |
Interest cost | 300,000 | 300,000 |
Expected return on plan assets | 0 | 0 |
Amortization of prior service cost | 0 | 0 |
Amortization of unrecognized net loss (gain) | -100,000 | -400,000 |
Net periodic cost (benefit) recognized | $200,000 | ($100,000) |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Feb. 16, 2015 | Feb. 17, 2014 | Nov. 13, 2014 | Nov. 12, 2014 |
Equity, Class of Treasury Stock [Line Items] | ||||||
Dividends on Common Stock | $0.18 | $0.16 | ||||
Remaining authorized repurchase capacity | $384.50 | |||||
Repurchase of shares | 1,382,025 | 1,436,423 | ||||
Repurchases of shares, value | 79.9 | 109.6 | ||||
Share repurchase program 2013 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Authorized amount to be repurchased | 500 | 750 | ||||
Share Repurchase Program 2012 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Remaining authorized repurchase capacity | $175 | |||||
Minimum | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Dividends on Common Stock | $0.16 | $0.14 | ||||
Maximum | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Dividends on Common Stock | $0.18 | $0.16 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Income before income tax | $58,151,000 | $146,603,000 |
Provision for income taxes | 28,506,000 | 38,015,000 |
Effective tax rate | 49.00% | 25.90% |
Change in unrecognized tax benefits for the period | 8,100,000 | |
Unrecognized tax benefits approximate amount of estimated reduction within the next twelve months | $11,000,000 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Summarized financial information of the reportable segments | ||
Sales | $1,014,620 | $1,068,136 |
Segment operating income | 93,376 | 164,326 |
Intersegment sales [Member] | ||
Summarized financial information of the reportable segments | ||
Sales | 0 | 0 |
Engineered Product Division | ||
Summarized financial information of the reportable segments | ||
Sales | 473,413 | 510,311 |
Segment operating income | 68,828 | 81,353 |
Engineered Product Division | Intersegment sales [Member] | ||
Summarized financial information of the reportable segments | ||
Sales | 10,747 | 13,785 |
Industrial Product Division | ||
Summarized financial information of the reportable segments | ||
Sales | 214,711 | 175,994 |
Segment operating income | -13,338 | 18,788 |
Industrial Product Division | Intersegment sales [Member] | ||
Summarized financial information of the reportable segments | ||
Sales | 8,655 | 10,190 |
Flow Control Division [Member] | ||
Summarized financial information of the reportable segments | ||
Sales | 326,496 | 381,831 |
Segment operating income | 54,715 | 83,133 |
Flow Control Division [Member] | Intersegment sales [Member] | ||
Summarized financial information of the reportable segments | ||
Sales | 667 | 1,107 |
Subtotal-Reportable Segments [Member] | ||
Summarized financial information of the reportable segments | ||
Sales | 1,014,620 | 1,068,136 |
Segment operating income | 110,205 | 183,274 |
Subtotal-Reportable Segments [Member] | Intersegment sales [Member] | ||
Summarized financial information of the reportable segments | ||
Sales | 20,069 | 25,082 |
Eliminations and All Other [Member] | ||
Summarized financial information of the reportable segments | ||
Sales | 0 | 0 |
Segment operating income | -16,829 | -18,948 |
Eliminations and All Other [Member] | Intersegment sales [Member] | ||
Summarized financial information of the reportable segments | ||
Sales | ($20,069) | ($25,082) |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Components of AOCI) (Details) (USD $) | 3 Months Ended | |||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||
Beginning balance | ($379,141,000) | [1] | ($220,295,000) | [1] | ||
Other comprehensive (loss) income before reclassifications | -109,286,000 | [1] | -2,187,000 | [1] | ||
Amounts reclassified from AOCL | 5,597,000 | [1] | 8,085,000 | [1] | ||
Net current-period other comprehensive (loss) income | -103,689,000 | [1] | 5,898,000 | [1] | ||
Ending balance | -482,830,000 | [1] | -214,397,000 | [1] | ||
Interest Rate Cash Flow Hedge Loss to be Reclassified During Next 12 Months, Net | 7,100,000 | |||||
Accumulated Other Comprehensive Income (Loss), accumulated Net Gain (Loss) from Net investment hedge | 2,100,000 | |||||
Noncontrolling Interest [Member] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | -1,300,000 | 1,400,000 | 1,300,000 | 1,200,000 | ||
Foreign currency translation items [Member] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||
Beginning balance | -238,533,000 | [1] | -89,953,000 | [1] | ||
Other comprehensive (loss) income before reclassifications | -106,434,000 | [1] | -2,509,000 | [1] | ||
Amounts reclassified from AOCL | 0 | [1] | 5,460,000 | [1] | ||
Net current-period other comprehensive (loss) income | -106,434,000 | [1] | 2,951,000 | [1] | ||
Ending balance | -344,967,000 | [1] | -87,002,000 | [1] | ||
Pension and other postretirement effects [Member] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||
Beginning balance | -135,398,000 | -129,528,000 | ||||
Other comprehensive (loss) income before reclassifications | 5,501,000 | 298,000 | ||||
Amounts reclassified from AOCL | 2,390,000 | 2,481,000 | ||||
Net current-period other comprehensive (loss) income | 7,891,000 | 2,779,000 | ||||
Ending balance | -127,507,000 | -126,749,000 | ||||
Cash flow hedging activity [Member] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||
Beginning balance | -5,210,000 | -814,000 | ||||
Other comprehensive (loss) income before reclassifications | -8,353,000 | 24,000 | ||||
Amounts reclassified from AOCL | 3,207,000 | 144,000 | ||||
Net current-period other comprehensive (loss) income | -5,146,000 | 168,000 | ||||
Ending balance | ($10,356,000) | ($646,000) | ||||
[1] | Includes foreign currency translation adjustments attributable to noncontrolling interests of $1.3 million and $1.2 million at January 1, 2015 and 2014 and $1.3 million and $1.4 million at March 31, 2015 and 2014. Includes accumulated net investment hedge losses of $2.1 million, net of deferred taxes, at March 31, 2015. Amounts in parentheses indicate debits. |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Loss (Reclassifications out of AOCI) (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other expense, net | ($19,946) | ($2,905) | ||
Sales | 1,014,620 | 1,068,136 | ||
Tax (expense) or benefit | -28,506 | -38,015 | ||
Net earnings attributable to Flowserve Corporation | 27,666 | 107,734 | ||
Foreign currency translation items [Member] | Reclassification out of AOCI [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Divestiture Of Businesses OCIL Foreign Currency Transaction And Translation Adjustment Before Tax | 0 | [1] | -5,460 | [1] |
Tax (expense) or benefit | 0 | [1] | 0 | [1] |
Net earnings attributable to Flowserve Corporation | 0 | [1] | -5,460 | [1] |
Cash flow hedging activity [Member] | Reclassification out of AOCI [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other expense, net | -3,327 | [1] | 0 | [1] |
Sales | -1,182 | [1] | -230 | [1] |
Tax (expense) or benefit | 1,302 | [1] | 86 | [1] |
Net earnings attributable to Flowserve Corporation | -3,207 | [1] | -144 | [1] |
Pension and other postretirement effects [Member] | Reclassification out of AOCI [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amortization of actuarial losses | -3,424 | [1] | -3,427 | [1] |
Prior service costs | -156 | [1],[2] | -118 | [1],[2] |
Tax (expense) or benefit | 1,190 | [1] | 1,064 | [1] |
Net earnings attributable to Flowserve Corporation | ($2,390) | [1] | ($2,481) | [1] |
[1] | Amounts in parentheses indicate decreases to income. None of the reclass amounts have a noncontrolling interest component. | |||
[2] | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 10 for additional details. |
Realignment_Program_Details
Realignment Program (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Incurred Cost | $1 | ||
Restructuring Reserve | 21.2 | 1.1 | |
2015 Realignment Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Expected Cost | 39 | ||
Restructuring and Related Cost, Incurred Cost | 26.3 | ||
2015 Realignment Program | Income Tax Expense | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Incurred Cost | 5 | ||
2015 Realignment Program | IPD | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Incurred Cost | 20.6 | ||
2015 Realignment Program | EPD | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Incurred Cost | $0.60 |