Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 06, 2020 | |
Entity Listings [Line Items] | ||
Entity Central Index Key | 0000030625 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-13179 | |
Entity Registrant Name | FLOWSERVE CORP | |
Entity Incorporation, State or Country Code | NY | |
Entity Tax Identification Number | 31-0267900 | |
Entity Address, Address Line One | 5215 N. O’Connor Blvd., Suite 2300, | |
Entity Address, City or Town | Irving, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75039 | |
City Area Code | 972 | |
Local Phone Number | 443-6500 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 130,263,432 | |
Common Stock | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Common Stock, $1.25 Par Value | |
Trading Symbol | FLS | |
Security Exchange Name | NYSE | |
2022 Senior notes | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | 1.25% Senior Notes due 2022 | |
Trading Symbol | FLS22A | |
Security Exchange Name | NYSE |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Sales | $ 924,301 | $ 995,709 | $ 2,742,826 | $ 2,871,517 |
Cost of sales | (639,092) | (662,856) | (1,921,451) | (1,931,756) |
Gross profit | 285,209 | 332,853 | 821,375 | 939,761 |
Selling, general and administrative expense | (200,729) | (230,362) | (675,523) | (665,625) |
Net earnings from affiliates | 2,842 | 2,087 | 9,125 | 8,057 |
Operating income | 87,322 | 104,578 | 154,977 | 282,193 |
Interest expense | (14,710) | (13,981) | (40,608) | (42,025) |
Interest income | 673 | 2,253 | 3,571 | 6,494 |
Other income (expense), net | (963) | (8,477) | 7,558 | (15,153) |
Earnings before income taxes | 72,322 | 84,373 | 125,498 | 231,509 |
Provision for income taxes | (18,672) | (22,410) | (59,175) | (58,607) |
Net earnings, including noncontrolling interests | 53,650 | 61,963 | 66,323 | 172,902 |
Less: Net earnings attributable to noncontrolling interests | (2,647) | (2,121) | (6,890) | (6,659) |
Net earnings attributable to Flowserve Corporation | $ 51,003 | $ 59,842 | $ 59,433 | $ 166,243 |
Net earnings per share attributable to Flowserve Corporation common shareholders: | ||||
Basic (in dollars per share) | $ 0.39 | $ 0.46 | $ 0.46 | $ 1.27 |
Diluted (in dollars per share) | $ 0.39 | $ 0.45 | $ 0.45 | $ 1.26 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings, including noncontrolling interests | $ 53,650 | $ 61,963 | $ 66,323 | $ 172,902 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of taxes | 25,204 | (30,600) | (41,022) | (26,503) |
Pension and other postretirement effects, net of taxes | (976) | 3,648 | 7,091 | 7,051 |
Cash flow hedging activity | 41 | 44 | 139 | 149 |
Other comprehensive income (loss) | 24,269 | (26,908) | (33,792) | (19,303) |
Comprehensive income (loss), including noncontrolling interests | 77,919 | 35,055 | 32,531 | 153,599 |
Comprehensive (income) loss attributable to noncontrolling interests | (2,643) | (2,055) | (7,662) | (7,258) |
Comprehensive income (loss) attributable to Flowserve Corporation | $ 75,276 | $ 33,000 | $ 24,869 | $ 146,341 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation, taxes | $ 140 | $ 852 | $ 6,114 | $ 2,043 |
Pension and other postretirement effects, taxes | $ (421) | $ (231) | $ (1,263) | $ (660) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 921,178 | $ 670,980 |
Accounts receivable, net of allowance for expected credit losses of $76,061 and $53,412, respectively | 750,897 | 795,538 |
Contract assets, net of allowance for expected credit losses of $3,043 at September 30, 2020 | 310,130 | 272,914 |
Inventories, net | 714,489 | 660,837 |
Prepaid expenses and other | 109,451 | 106,478 |
Total current assets | 2,806,145 | 2,506,747 |
Property, plant and equipment, net of accumulated depreciation of $1,068,613 and $1,013,207, respectively | 551,011 | 563,564 |
Operating lease right-of-use assets, net | 166,850 | 186,218 |
Goodwill | 1,204,609 | 1,193,010 |
Deferred taxes | 32,206 | 54,879 |
Other intangible assets, net | 171,246 | 180,805 |
Other assets, net of allowance for expected credit losses of $97,897 and $101,439, respectively | 241,509 | 253,054 |
Total assets | 5,173,576 | 4,938,277 |
Current liabilities: | ||
Accounts payable | 428,870 | 447,582 |
Accrued liabilities | 423,117 | 401,385 |
Contract liabilities | 198,380 | 221,095 |
Debt due within one year | 8,581 | 11,272 |
Operating lease liabilities | 34,634 | 36,108 |
Total current liabilities | 1,093,582 | 1,117,442 |
Long-term debt due after one year | 1,701,082 | 1,365,977 |
Operating lease liabilities | 133,348 | 151,523 |
Retirement obligations and other liabilities | 541,721 | 530,994 |
Shareholders’ equity: | ||
Commitments and contingencies (See Note 11) | ||
Common shares, $1.25 par value, Shares authorized - 305,000, Shares issued - 176,793 | 220,991 | 220,991 |
Capital in excess of par value | 499,561 | 501,045 |
Retained earnings | 3,625,291 | 3,652,244 |
Treasury shares, at cost – 46,775 and 46,262 shares, respectively | (2,059,666) | (2,051,583) |
Deferred compensation obligation | 6,100 | 8,334 |
Accumulated other comprehensive loss | (618,856) | (584,292) |
Total Flowserve Corporation shareholders’ equity | 1,673,421 | 1,746,739 |
Noncontrolling interests | 30,422 | 25,602 |
Total equity | 1,703,843 | 1,772,341 |
Total liabilities and equity | $ 5,173,576 | $ 4,938,277 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Allowance for doubtful accounts | $ 76,061 | $ 53,412 |
Contract asset, allowance for doubtful accounts | 3,043 | |
Accumulated depreciation on property, plant and equipment | 1,068,613 | 1,013,207 |
Other assets, allowance for credit loss | $ 97,897 | $ 101,439 |
Shareholders’ equity: | ||
Common shares, par value (in dollars per share) | $ 1.25 | $ 1.25 |
Common shares, shares authorized (in shares) | 305,000 | 305,000 |
Common shares, shares issued (in shares) | 176,793 | 176,793 |
Treasury shares, shares (in shares) | 46,775 | 46,262 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | ASU No. 2016-13 - Measurement of Credit Losses on Financial Instruments (Topic 326) | Common Stock | Capital in Excess of Par Value | Retained Earnings | Retained EarningsASU No. 2016-13 - Measurement of Credit Losses on Financial Instruments (Topic 326) | Treasury Stock | Deferred Compensation Obligation | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interests |
Balance — (in shares) at Dec. 31, 2018 | 176,793 | 46,237 | ||||||||
Balance — at Dec. 31, 2018 | $ 1,632,002 | $ 220,991 | $ 494,551 | $ 3,514,229 | $ (2,049,404) | $ 7,117 | $ (573,947) | $ 18,465 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock activity under stock plans (in shares) | 298 | |||||||||
Stock activity under stock plans | (3,273) | (17,129) | $ 12,696 | 1,160 | ||||||
Stock-based compensation | 22,508 | 22,508 | ||||||||
Net earnings | 172,902 | 6,659 | ||||||||
Net earnings | 166,243 | |||||||||
Cash dividends declared | (75,756) | (75,756) | ||||||||
Other comprehensive income (loss), net of tax | (19,303) | (19,902) | 599 | |||||||
Other, net | (254) | 0 | (254) | |||||||
Repurchases of common shares (in shares) | (114) | |||||||||
Repurchases of common shares | (5,432) | $ (5,432) | ||||||||
Balance — (in shares) at Sep. 30, 2019 | 176,793 | 46,053 | ||||||||
Balance — at Sep. 30, 2019 | 1,723,394 | $ 220,991 | 499,930 | 3,604,716 | $ (2,042,140) | 8,277 | (593,849) | 25,469 | ||
Balance — (in shares) at Dec. 31, 2018 | 176,793 | 46,237 | ||||||||
Balance — at Dec. 31, 2018 | $ 1,632,002 | $ 220,991 | 494,551 | 3,514,229 | $ (2,049,404) | 7,117 | (573,947) | 18,465 | ||
Balance — (in shares) at Dec. 31, 2019 | 176,793 | 176,793 | 46,262 | |||||||
Balance — at Dec. 31, 2019 | $ 1,772,341 | $ (7,291) | $ 220,991 | 501,045 | 3,652,244 | $ (7,291) | $ (2,051,583) | 8,334 | (584,292) | 25,602 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Accounting Standards Update | us-gaap:AccountingStandardsUpdate201613Member | |||||||||
Balance — (in shares) at Jun. 30, 2019 | 176,793 | 45,943 | ||||||||
Balance — at Jun. 30, 2019 | $ 1,711,979 | $ 220,991 | 493,037 | 3,570,119 | $ (2,036,857) | 8,219 | (567,007) | 23,477 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock activity under stock plans (in shares) | 4 | |||||||||
Stock activity under stock plans | (53) | (260) | $ 149 | 58 | ||||||
Stock-based compensation | 7,153 | 7,153 | ||||||||
Net earnings | 61,963 | 59,842 | 2,121 | |||||||
Net earnings | 59,842 | |||||||||
Cash dividends declared | (25,245) | (25,245) | ||||||||
Other comprehensive income (loss), net of tax | (26,908) | (26,842) | (66) | |||||||
Other, net | (63) | 0 | (63) | |||||||
Repurchases of common shares (in shares) | (114) | |||||||||
Repurchases of common shares | (5,432) | $ (5,432) | ||||||||
Balance — (in shares) at Sep. 30, 2019 | 176,793 | 46,053 | ||||||||
Balance — at Sep. 30, 2019 | $ 1,723,394 | $ 220,991 | 499,930 | 3,604,716 | $ (2,042,140) | 8,277 | (593,849) | 25,469 | ||
Balance — (in shares) at Dec. 31, 2019 | 176,793 | 176,793 | 46,262 | |||||||
Balance — at Dec. 31, 2019 | $ 1,772,341 | $ (7,291) | $ 220,991 | 501,045 | 3,652,244 | $ (7,291) | $ (2,051,583) | 8,334 | (584,292) | 25,602 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock activity under stock plans (in shares) | 544 | |||||||||
Stock activity under stock plans | (3,793) | (25,588) | $ 24,029 | (2,234) | ||||||
Stock-based compensation | 24,104 | 24,104 | ||||||||
Net earnings | 66,323 | 6,890 | ||||||||
Net earnings | 59,433 | |||||||||
Cash dividends declared | (79,095) | (79,095) | ||||||||
Other comprehensive income (loss), net of tax | (33,792) | (34,564) | 772 | |||||||
Other, net | (2,842) | (2,842) | ||||||||
Repurchases of common shares (in shares) | (1,057) | |||||||||
Repurchases of common shares | $ (32,112) | $ (32,112) | ||||||||
Balance — (in shares) at Sep. 30, 2020 | 176,793 | 176,793 | 46,775 | |||||||
Balance — at Sep. 30, 2020 | $ 1,703,843 | $ 220,991 | 499,561 | 3,625,291 | $ (2,059,666) | 6,100 | (618,856) | 30,422 | ||
Balance — (in shares) at Jun. 30, 2020 | 176,793 | 46,873 | ||||||||
Balance — at Jun. 30, 2020 | 1,647,172 | $ 220,991 | 499,152 | 3,600,645 | $ (2,064,302) | 6,036 | (643,129) | 27,779 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock activity under stock plans (in shares) | 98 | |||||||||
Stock activity under stock plans | (520) | (5,220) | $ 4,636 | 64 | ||||||
Stock-based compensation | 5,629 | 5,629 | ||||||||
Net earnings | 53,650 | 51,003 | 2,647 | |||||||
Net earnings | 51,003 | |||||||||
Cash dividends declared | (26,357) | (26,357) | ||||||||
Other comprehensive income (loss), net of tax | 24,269 | 24,273 | (4) | |||||||
Other, net | $ 0 | 0 | 0 | |||||||
Balance — (in shares) at Sep. 30, 2020 | 176,793 | 176,793 | 46,775 | |||||||
Balance — at Sep. 30, 2020 | $ 1,703,843 | $ 220,991 | $ 499,561 | $ 3,625,291 | $ (2,059,666) | $ 6,100 | $ (618,856) | $ 30,422 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows – Operating activities: | ||
Net earnings, including noncontrolling interests | $ 66,323 | $ 172,902 |
Adjustments to reconcile net earnings to net cash provided (used) by operating activities: | ||
Depreciation | 63,887 | 69,320 |
Amortization of intangible and other assets | 8,788 | 10,134 |
Stock-based compensation | 24,104 | 22,507 |
Foreign currency, asset write downs and other non-cash adjustments | 19,519 | (8,284) |
Change in assets and liabilities: | ||
Accounts receivable, net | 24,324 | (11,994) |
Inventories, net | (51,974) | (64,280) |
Contract assets, net | (37,328) | (35,607) |
Prepaid expenses and other assets, net | 6,051 | (26,194) |
Accounts payable | (21,756) | (11,994) |
Contract liabilities | (22,468) | 26,641 |
Accrued liabilities and income taxes payable | 24,257 | (8,459) |
Retirement obligations and other | 22,729 | 9,257 |
Net deferred taxes | (10,827) | (726) |
Net cash flows provided (used) by operating activities | 115,629 | 143,223 |
Cash flows – Investing activities: | ||
Capital expenditures | (47,919) | (45,276) |
Proceeds from disposal of assets and other | 13,759 | 40,773 |
Net cash flows provided (used) by investing activities | (34,160) | (4,503) |
Cash flows – Financing activities: | ||
Payments on long-term debt | (191,258) | (105,000) |
Proceeds from short-term financing | 0 | 75,000 |
Payments on short-term financing | 0 | (75,000) |
Proceeds from issuance of senior notes | 498,280 | 0 |
Payments of deferred loan cost | (4,572) | 0 |
Proceeds under other financing arrangements | 154 | 2,572 |
Payments under other financing arrangements | (5,773) | (8,903) |
Repurchases of common shares | 32,112 | 5,432 |
Payments related to tax withholding for stock-based compensation | (4,521) | (3,835) |
Payments of dividends | (78,106) | (74,695) |
Other | (3,120) | (252) |
Net cash flows provided (used) by financing activities | 178,972 | (195,545) |
Effect of exchange rate changes on cash | (10,243) | (17,009) |
Net change in cash and cash equivalents | 250,198 | (73,834) |
Cash and cash equivalents at beginning of period | 670,980 | 619,683 |
Cash and cash equivalents at end of period | $ 921,178 | $ 545,849 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30, 2020, the related condensed consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2020 and 2019, the condensed consolidated statements of stockholders' equity for the three and nine months ended September 30, 2020 and 2019 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019 of Flowserve Corporation are unaudited. In management’s opinion, all adjustments comprising normal recurring adjustments necessary for fair statement of such condensed consolidated financial statements have been made. Where applicable, prior period information has been updated to conform to current year presentation. The accompanying condensed consolidated financial statements and notes in this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 ("Quarterly Report") are presented as permitted by Regulation S-X and do not contain certain information included in our annual financial statements and notes thereto. Accordingly, the accompanying condensed consolidated financial information should be read in conjunction with the audited consolidated financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2019 ("2019 Annual Report"). Revision to Previously Reported Financial Information - In conjunction with our close process for the third quarter of 2020, we identified accounting errors related to the recognition of a liability for unasserted asbestos claims. The adjustments primarily related to an incurred but not reported ("IBNR") liability associated with unasserted asbestos claims, but also included adjustments related to the associated receivables for expected insurance proceeds for asbestos settlement and defense costs from insurance coverage and the recognition as an expense the related legal fees that were previously estimated to be recoverable from insurance carriers for which coverage is not currently sufficient following the recognition of the IBNR for periods beginning with the year ended December 31, 2014 through the second quarter of 2020 and to correct certain other previously identified immaterial errors. We have assessed these errors, individually and in the aggregate, and concluded that they were not material to any prior annual or interim period. However, the aggregate amount of the prior period errors would have been material to our current interim condensed consolidated statements of income and to our anticipated full year results and therefore, we have revised our previously issued unaudited condensed consolidated financial information for the three and nine months ended September 30, 2019. Prior periods not presented herein will be revised, as applicable, in future filings. See Note 2 for more information. Coronavirus Pandemic ("COVID-19") and Oil and Gas Market - During the first nine months of 2020, we have been challenged by macroeconomics and global economic impacts based on the disruption and uncertainties caused by COVID-19 and the emanating impacts of the pandemic on pricing and dampened demand for oil, further resulting in instability and volatility in oil commodity prices. To date, the COVID-19 pandemic has had widespread implications worldwide and has caused substantial economic uncertainty and challenging operational conditions. For example, in the first nine months of 2020, these conditions drove the announcement of significant and broad-based decreases in customer planned capital spending. As a result, many of our large customers have announced double-digit capital expenditure budget decreases for the remainder of the year, resulting in lower bookings in the first nine months of 2020 as compared to the prior year. The preparation of our condensed consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates, judgments and methodologies on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses. The full extent to which the COVID-19 pandemic directly or indirectly impacts our business, results of operations and financial condition, including sales, expenses, our allowance for expected credit losses, stock based compensation, the carrying value of our goodwill and other long-lived assets, financial assets, and valuation allowances for tax assets, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat it, as well as the economic impact on local, regional, national and international customers, suppliers and markets. We have made estimates of the impact of COVID-19 within our financial statements and there may be changes to those estimates in the near to mid-term as new information becomes available. Actual results may differ from these estimates. Accounting Developments Pronouncements Implemented In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, "Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments" ("CECL"). The ASU requires, among other things, the use of a new current expected credit loss model in order to determine an allowance for expected credit losses with respect to financial assets and instruments held. The CECL model requires that we estimate the lifetime of an expected credit loss for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. On January 1, 2020, we adopted the ASU on a prospective basis to determine our allowance for credit losses in accordance with the requirements of Topic 326 $7.3 million on ou r opening condensed consolidated balance shee t. Our primary exposure to financial assets that are within the scope of CECL are trade receivables and contract assets. For these financial assets, we record an allowance for expected credit losses that, when deducted from the gross asset balance, presents the net amount expected to be collected. We estimate the allowance based on an aging schedule and according to historical losses as determined from our billings and collections history. Additionally, we adjust the allowance for factors that are specific to our customers’ credit risk such as financial difficulties, liquidity issues, insolvency, and country and political risk. We also consider both the current and forecasted direction of macroeconomic conditions at the reporting date. The CECL model requires consideration of reasonable and supportable forecasts of future economic conditions in the estimate of expected credit losses. We adjust the allowance and recognize adjustments in the income statement each period. Trade receivables are written off against the allowance in the period when the receivable is deemed to be uncollectible. Subsequent recoveries of amounts previously written off are reflected as a reduction to credit impairment losses in the income statement. Our allowance for expected credit losses for short-term receivables as of September 30, 2020, wa s $76.1 million, compared to $53.4 million as of December 31, 2019. The nine months of activity included $6.9 million for the adoption of the CECL model at January 1, 2020 and $15.8 million for current period adjustments. Our long-term receivables, included in other assets, net, represent receivables with collection periods longer than 12 months and the balance primarily consists of amounts to be collected from insurance companies and fully-reserved receivables associated with the national oil company in Venezuela. As of September 30, 2020, we had $108.2 million of long-term receivables, compared to $118.5 million as of December 31, 2019. Our allowance for expected credit losses for long-term receivables as of September 30, 2020 was $97.9 million, compared to $101.4 million as of December 31, 2019. We have exposure to credit losses from off-balance sheet exposures, such as financial guarantees and standby letters of credit, where we believe the risk of loss is immaterial to our financial statements as of September 30, 2020. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." The amendments in this ASU allow companies to apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The amendments of the ASU are effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Our adoption of ASU No. 2017-04 effective January 1, 2020 did not have an impact on our condensed consolidated financial condition and results of operations. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement." The amendments of the ASU modify the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosure requirements for assets and liabilities measured at fair value in the statement of financial position or disclosed in the notes to the financial statements. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for the removed disclosures and delayed adoption until fiscal year 2020 permitted for the new disclosures. The removed and modified disclosures were adopted on a retrospective basis and the new disclosures were adopted on a prospective basis. Our adoption of ASU No. 2018-13 effective January 1, 2020 did not have an impact on our disclosures. In August 2018, the FASB issued ASU No. 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The ASU addresses how entities should account for costs associated with implementing a cloud computing arrangement that is considered a service contract. Per the amendments of the ASU, implementation costs incurred in a cloud computing arrangement that is a service contract should be accounted for in the same manner as implementation costs incurred to develop or obtain software for internal use as prescribed by guidance in ASC 350-40. The ASU requires that implementation costs incurred in a cloud computing arrangement be capitalized rather than expensed. Further, the ASU specifies the method for the amortization of costs incurred during implementation, and the manner in which the unamortized portion of these capitalized implementation costs should be evaluated for impairment. The ASU also provides guidance on how to present such implementation costs in the financial statements and also creates additional disclosure requirements. The amendments are effective for fiscal years beginning after December 15, 2019. The amendments in this ASU can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Our adoption of ASU No. 2018-15 effective January 1, 2020 on a prospective basis did not have a material impact on our condensed consolidated financial condition and results of operations. In October 2018, the FASB issued ASU No. 2018-17, "Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities ("VIEs")." The standard reduces the cost and complexity of financial reporting associated with VIEs. The new standard amends the guidance for determining whether a decision-making fee is a VIE. The amendments require organizations to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety as currently required in U.S. Generally Accepted Accounting Principles ("GAAP"). The amendments of this ASU are effective for fiscal years beginning after December 15, 2019. Our adoption of ASU No. 2018-17 effective January 1, 2020 did not have an impact on our condensed consolidated financial condition and results of operations. In November 2018, the FASB issued ASU No. 2018-18, "Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606." The ASU clarifies the interaction between the guidance for certain collaborative arrangements and ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," which we adopted January 1, 2018. The amendments of the ASU provide guidance on how to assess whether certain transactions between collaborative arrangement participants should be accounted for within ASU No. 2014-09. The ASU also provides more comparability in the presentation of revenue for certain transactions between collaborative arrangement participants. Parts of the collaborative arrangement that are not in the purview of the revenue recognition standard should be presented separately. The amendments are effective for fiscal years beginning after December 15, 2019. Our adoption of ASU No. 2018-18 effective January 1, 2020 did not have an impact on our condensed consolidated financial condition and results of operations. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The ASU intends to simplify various aspects related to accounting for income taxes and removes certain exceptions to the general principles in the standard. Additionally, the ASU clarifies and amends existing guidance to improve consistent application of its requirements. We early adopted ASU No. 2019-12 effective January 1, 2020 on a prospective basis and the adoption did not have an impact on our condensed consolidated financial condition and results of operations. Pronouncements Not Yet Implemented In August 2018, the FASB issued ASU No. 2018-14, "Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans." The ASU amends the disclosure requirements by adding, clarifying, or removing certain disclosures for sponsor defined benefit pension or other postretirement plans. The amendments are effective for fiscal years ending after December 15, 2020 and the amendments should be applied retrospectively to all periods presented. We are currently evaluating the impact of ASU No. 2018-14 and we anticipate that our adoption of this ASU will not have an impact on our disclosures. In March of 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of The Effects of Reference Rate Reform on Financial Reporting." The ASU provides guidance designed to enable the process for migrating away from reference rates such as the London Interbank Offered Rate ("LIBOR") and others to new reference rates. Further, the amendments of the ASU provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The amendments are effective as of March 12, 2020 through December 31, 2022 and should be applied prospectively to all periods presented. We have evaluated the impact of ASU No. 2020-04 and we anticipate that our adoption of this ASU will not have an impact on our condensed consolidated financial condition and results of operations. |
Revision to Previously Reported
Revision to Previously Reported Financial Information | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Revision to Previously Reported Financial Information | Revision to Previously Reported Financial Information In conjunction with our close process for the third quarter of 2020, we identified accounting errors related to the recognition of a liability for unasserted asbestos claims. The adjustments primarily relate to an IBNR associated with unasserted asbestos claims, but also include adjustments related to the associated receivables for expected insurance proceeds for asbestos settlement and defense costs from insurance coverage and the recognition as an expense the related legal fees that were previously estimated to be recoverable from insurance carriers for which coverage is not currently sufficient following the recognition of the IBNR and to correct certain other previously identified immaterial misstatements. Prior periods not presented herein will be revised, as applicable, in future filings. The following table presents the impact of correcting the errors previously discussed on the affected line items of our condensed consolidated balance sheet as of December 31, 2019: December 31, 2019 (Amounts in thousands, except par value) As Reported Adjustments As Revised Prepaid expenses and other $ 105,101 $ 1,377 $ 106,478 Total current assets 2,505,370 1,377 2,506,747 Property, plant and equipment, net of accumulated depreciation (1) 572,175 (8,611) 563,564 Other assets, net of allowance for expected credit losses (2) 227,185 25,869 253,054 Total assets 4,919,642 18,635 4,938,277 Contract liabilities (3) 216,541 4,554 221,095 Total current liabilities 1,112,888 4,554 1,117,442 Retirement obligations and other liabilities (4) 473,295 57,699 530,994 Retained earnings (5) 3,695,862 (43,618) 3,652,244 Total Flowserve Corporation shareholders’ equity 1,790,357 (43,618) 1,746,739 Total equity 1,815,959 (43,618) 1,772,341 Total liabilities and equity $ 4,919,642 $ 18,635 $ 4,938,277 _______________________________________ (1) Adjustment related to the misclassification of Software as a Service arrangements as property, plant and equipment rather than other assets, net, as prescribed by ASU 2018-15. (2) Adjustment related to the associated receivables for expected insurance proceeds for asbestos settlements and defense costs. (3) Adjustment related to one of our sites for correction in contract position caused by errors in estimated costs under the over time revenue recognition model. (4) Adjustment primarily relates to IBNR reserves associated with unasserted asbestos claims. (5) The adjustments to retained earnings represents the cumulative effect of the immaterial errors that were corrected in periods prior to and through December 31, 2019. The following table presents the impact of correcting the errors previously discussed on the affected line items of our condensed consolidated statement of income for the three months ended September 30, 2019: (Amounts in thousands, except per share data) Three Months Ended September 30, 2019 As Reported Adjustments As Revised Sales $ 996,544 $ (835) $ 995,709 Gross profit 333,688 (835) 332,853 Selling, general and administrative expense (1) (226,216) (4,146) (230,362) Operating income 109,559 (4,981) 104,578 Other income (expense), net (2) (1,622) (6,855) (8,477) Earnings before income taxes 96,209 (11,836) 84,373 Provision for income taxes (3) (25,646) 3,236 (22,410) Net earnings, including noncontrolling interests 70,563 (8,600) 61,963 Net earnings attributable to Flowserve Corporation $ 68,442 (8,600) $ 59,842 Net earnings per share attributable to Flowserve Corporation common shareholders: Basic $ 0.52 $ (0.06) $ 0.46 Diluted 0.52 (0.07) 0.45 _______________________________________ (1) Adjustment primarily relate to asbestos settlement and defense costs for related legal fees. (2) Adjustment related to our Argentinian subsidiary's use of an incorrect exchange rate in connection with a change to using the U.S. dollar as the functional currency. (3) Adjustment related to tax impacts of the matters described in notes (1) and (2), above. The following table presents the impact of correcting the errors previously discussed on the affected line items of our condensed consolidated statement of income for the nine months ended September 30, 2019: (Amounts in thousands, except per share data) Nine Months Ended September 30, 2019 As Reported Adjustments As Revised Sales (1) $ 2,876,679 (5,162) $ 2,871,517 Cost of sales (1,930,881) (875) (1,931,756) Gross profit 945,798 (6,037) 939,761 Selling, general and administrative expense (2) (655,046) (10,579) (665,625) Operating income 298,809 (16,616) 282,193 Other income (expense), net (3) (8,098) (7,055) (15,153) Earnings before income taxes 255,180 (23,671) 231,509 Provision for income taxes (4) (64,646) 6,039 (58,607) Net earnings, including noncontrolling interests 190,534 (17,632) 172,902 Net earnings attributable to Flowserve Corporation $ 183,875 (17,632) $ 166,243 Net earnings per share attributable to Flowserve Corporation common shareholders: Basic $ 1.40 $ (0.13) $ 1.27 Diluted 1.40 (0.14) 1.26 _______________________________________ (1) Adjustment related to one of our sites related to errors in estimated costs under the over time revenue recognition model. (2) Adjustment primarily relate to asbestos settlement and defense costs from insurance coverage and expense for related legal fees and broad-based annual incentive compensation. (3) Adjustment related to our Argentinian subsidiary's use of an incorrect exchange rate in connection with a change to using the U.S. dollar as the functional currency. (4) Adjustment related to tax impacts of the matters described in notes (1), (2) and (3), above. The condensed consolidated statements of stockholders' equity for the period from January 1, 2019 to September 30, 2019 and the period from July 1, 2019 to September 30, 2019 and the condensed consolidated statements of comprehensive income for the three months and nine months ended September 30, 2019 have also been revised to reflect the impacts to net earnings. The impact of errors arising in periods commencing prior to January 1, 2019 and July 1, 2019 have been reflected as a reduction to opening retained earnings in the amount of $28.8 million and $37.8 million, respectively, in the condensed consolidated statement of stockholders' equity. Except for as described below in (1), the effect of the adjustments to the condensed consolidated statements of cash flows for the nine months ended September 30, 2019 primarily related to net earnings, including noncontrolling interests, for the change in net earnings in the table above and were offset primarily by impacts to changes in operating assets and liabilities. The following table presents the impact of correcting the errors previously discussed on the affected line items of our condensed consolidated statement of cash flows for the nine months ended September 30, 2019: Nine Months Ended September 30, 2019 (Amounts in thousands) As Reported Adjustments As Revised Net cash flows provided (used) by operating activities (1) $ 143,991 $ (768) $ 143,223 Net cash flows provided (used) by investing activities (1) (3,851) (652) (4,503) Cash and cash equivalents at end of period (1) 547,270 (1,421) 545,849 _______________________________________ (1) Primarily related to adjustments resulting from the misclassification of Software as a Service arrangements as property, plant and equipment rather than other assets, net, as prescribed by ASU 2018-15, and a djustments related to our international operations’ exposure to fluctuations in foreign currency exchange rates, resulting from our Argentinian subsidiary's change in using the U.S. dollar as our functional currency in Argentina . |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The majority of our revenues relate to customer orders that typically contain a single commitment of goods or services which have lead times under a year. Longer lead time, more complex contracts with our customers typically have multiple commitments of goods and services, including any combination of designing, developing, manufacturing, modifying, installing and commissioning of flow management equipment and providing services and parts related to the performance of such products. Control transfers over time when the customer is able to direct the use of and obtain substantially all of the benefits of our work as we perform. Our primary method for recognizing revenue over time is the percentage of completion ("POC") method. Revenue from products and services transferred to customers over time accounted for approximately 23% and 21% of total revenue for the three month periods ended September 30, 2020 and 2019, respectively, and 22% and 19% for the nine month period ended September 30, 2020 and 2019, respectively. If control does not transfer over time, then control transfers at a point in time. We recognize revenue at a point in time at the level of each performance obligation based on the evaluation of certain indicators of control transfer, such as title transfer, risk of loss transfer, customer acceptance and physical possession. Revenue from products and services transferred to customers at a point in time accounted for approximately 77% and 79% of total revenue for the three month period ended September 30, 2020 and 2019, respectively, and 78% and 81% for the nine month period ended September 30, 2020 and 2019, respectively. Refer to Note 2 to our consolidated financial statements in cluded in our 2019 Annual Report for a more comprehensive discussion of our policies and accounting practices of revenue recognition. Disaggregated Revenue We conduct our operations through two business segments based on the type of product and how we manage the business: • Flowserve Pump Division ("FPD") for custom, highly-engineered pumps, pre-configured industrial pumps, pump systems, mechanical seals, auxiliary systems and replacement parts and related services; and • Flow Control Division ("FCD") for engineered and industrial valves, control valves, actuators and controls and related services. Our revenue sources are derived from our original equipment manufacturing and our aftermarket sales and services. Our original equipment revenues are generally related to originally designed, manufactured, distributed and installed equipment that can range from pre-configured, short-cycle products to more customized, highly-engineered equipment ("Original Equipment"). Our aftermarket sales and services are derived from sales of replacement equipment, as well as maintenance, advanced diagnostic, repair and retrofitting services ("Aftermarket"). Each of our two business segments generate Original Equipment and Aftermarket revenues. The following table presents our customer revenues disaggregated by revenue source: Three Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Total Original Equipment $ 280,951 $ 198,472 $ 479,423 Aftermarket 388,584 56,294 444,878 $ 669,535 $ 254,766 $ 924,301 Three Months Ended September 30, 2019 FPD FCD Total Original Equipment $ 256,664 $ 251,447 $ 508,111 Aftermarket 426,134 61,464 487,598 $ 682,798 $ 312,911 $ 995,709 Nine Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Total Original Equipment $ 805,150 $ 588,448 $ 1,393,598 Aftermarket 1,173,065 176,163 1,349,228 $ 1,978,215 $ 764,611 $ 2,742,826 Nine Months Ended September 30, 2019 FPD FCD Total Original Equipment $ 706,092 $ 710,144 $ 1,416,236 Aftermarket 1,259,431 195,850 1,455,281 $ 1,965,523 $ 905,994 $ 2,871,517 Our customer sales are diversified geographically. The following table presents our revenues disaggregated by geography, based on the shipping addresses of our customers: Three Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Total North America(1) $ 245,282 $ 96,435 $ 341,717 Latin America(1) 47,346 6,065 53,411 Middle East and Africa 83,330 29,045 112,375 Asia Pacific 151,227 66,836 218,063 Europe 142,350 56,385 198,735 $ 669,535 $ 254,766 $ 924,301 Three Months Ended September 30, 2019 FPD FCD Total North America(1) $ 279,583 $ 133,881 $ 413,464 Latin America(1) 51,338 7,682 59,020 Middle East and Africa 87,982 23,721 111,703 Asia Pacific 129,047 85,952 214,999 Europe 134,848 61,675 196,523 $ 682,798 $ 312,911 $ 995,709 Nine Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Total North America (1) $ 782,403 $ 326,271 $ 1,108,674 Latin America(1) 136,443 18,480 154,923 Middle East and Africa 277,231 77,404 354,635 Asia Pacific 391,796 185,946 577,742 Europe 390,342 156,510 546,852 $ 1,978,215 $ 764,611 $ 2,742,826 Nine Months Ended September 30, 2019 FPD FCD Total North America (1) $ 797,092 $ 401,921 $ 1,199,013 Latin America(1) 134,716 23,574 158,290 Middle East and Africa 249,694 69,484 319,178 Asia Pacific 367,204 223,864 591,068 Europe 416,817 187,151 603,968 $ 1,965,523 $ 905,994 $ 2,871,517 __________________________________ (1) North America represents the United States and Canada; Latin America includes Mexico. On September 30, 2020 , the aggregate transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations was approximately $435 million. We estimate recognition of approximately $130 million of this amount as revenue in the remainder of 2020 and an additional $305 million in 2021 and thereafter. Contract Balances We receive payment from customers based on a contractual billing schedule and specific performance requirements as established in our contracts. We record billings as accounts receivable when an unconditional right to consideration exists. A contract asset represents revenue recognized in advance of our right to receive payment under the terms of a contract. A contract liability represents our right to receive payment in advance of revenue recognized for a contract. The following tables present beginning and ending balances of contract assets and contract liabilities, current and long-term, for the nine months ended September 30, 2020 and 2019: (Amounts in thousands) Contract Assets, net (Current) Long-term Contract Assets, net(1) Contract Liabilities (Current) Long-term Contract Liabilities(2) Beginning balance, January 1, 2020 $ 272,914 9,280 $ 221,095 $ 1,652 Revenue recognized that was included in contract liabilities at the beginning of the period — — (159,376) (1,198) Revenue recognized in the period in excess of billings 654,967 — — — Billings arising during the period in excess of revenue recognized — — 137,986 309 Amounts transferred from contract assets to receivables (606,564) 191 — — Currency effects and other, net (11,187) (6,585) (1,325) 15 Ending balance, September 30, 2020 $ 310,130 $ 2,886 $ 198,380 $ 778 (Amounts in thousands) Contract Assets, net (Current) Long-term Contract Assets, net(1) Contract Liabilities (Current) Long-term Contract Liabilities(2) Beginning balance, January 1, 2019 $ 229,297 $ 10,967 $ 201,702 $ 1,370 Revenue recognized that was included in contract liabilities at the beginning of the period — — (129,265) — Revenue recognized in the period in excess of billings 584,784 — — — Billings arising during the period in excess of revenue recognized — — 148,552 — Amounts transferred from contract assets to receivables (544,533) (3,414) — — Currency effects and other, net (11,249) 539 3,254 248 Ending balance, September 30, 2019 $ 258,299 $ 8,092 $ 224,243 $ 1,618 _____________________________________ (1) Included in other assets, net. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases We have operating and finance leases for certain manufacturing facilities, offices, service and quick response centers, machinery, equipment and automobiles. Our leases have remaining lease terms of up to 33 years. The terms and conditions of our leases may include options to extend or terminate the lease which are considered and included in the lease term when these options are reasonably certain of exercise. We determine if a contract is (or contains) a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset. For all classes of leased assets, we have elected the practical expedient to account for any non-lease components in the contract together with the related lease component in the same unit of account. For lease contracts containing more than one lease component, we allocate the contract consideration to each of the lease components on the basis of relative standalone prices in order to identify the lease payments for each lease component. Right-of-use ("ROU") assets and lease liabilities are recognized in our condensed consolidated balance sheets at the commencement date based on the present value of remaining lease payments over the lease term. Additionally, ROU assets include any lease payments made at or before the commencement date, as well as any initial direct costs incurred, and are reduced by any lease incentives received. As most of our operating leases do not provide an implicit rate, we apply our incremental borrowing rate to determine the present value of remaining lease payments. Our incremental borrowing rate is determined based on information available at the commencement date of the lease. Operating leases are included in operating lease ROU assets, net and operating lease liabilities in our condensed consolidated balance sheets. Finance leases are included in property plant and equipment, debt due within one year and long-term debt due after one year in our condensed consolidated balance sheets. We have certain lease contracts with terms and conditions that provide for variability in the payment amount based on changes in facts or circumstances occurring after the commencement date. These variable lease payments are recognized in our condensed consolidated income statements as the obligation is incurred. We have certain lease contracts where we provide a guarantee to the lessor that the value of an underlying asset will be at least a specified amount at the end of the lease. Estimated amounts expected to be paid for residual value guarantees are included in operating lease liabilities and ROU assets, net. We had $33.4 million and $34.7 million of legally binding minimum lease payments for operating leases signed but not yet commenced as of September 30, 2020 and December 31, 2019, respectively. We did not have material subleases, leases that imposed significant restrictions or covenants, material related party leases or sale-leaseback arrangements. Other information related to our leases is as follows: September 30, December 31, (Amounts in thousands) 2020 2019 Operating Leases: ROU assets recorded under operating leases $ 227,437 $ 220,865 Accumulated amortization associated with operating leases (60,587) (34,647) Total operating leases ROU assets, net $ 166,850 $ 186,218 Liabilities recorded under operating leases (current) $ 34,634 $ 36,108 Liabilities recorded under operating leases (non-current) 133,348 151,523 Total operating leases liabilities $ 167,982 $ 187,631 Finance Leases: ROU assets recorded under finance leases $ 26,942 $ 19,606 Accumulated depreciation associated with finance leases (8,443) (7,551) Total finance leases ROU assets, net(1) $ 18,499 $ 12,055 Total finance leases liabilities(2) $ 18,540 $ 11,788 The costs components of operating and finance leases are as follows: Three Months Ended September 30, Nine Months Ended September 30, (Amounts in thousands) 2020 2019 2020 2019 Operating Lease Costs: Fixed lease expense(3) $ 14,114 $ 13,858 $ 42,655 $ 43,864 Variable lease expense(3) 1,569 1,119 5,260 3,999 Total operating lease expense $ 15,683 $ 14,977 $ 47,915 $ 47,863 Finance Lease Costs: Depreciation of finance lease ROU assets(3) $ 1,448 $ 993 $ 4,051 $ 3,280 Interest on lease liabilities(4) 181 102 472 253 Total finance lease expense $ 1,629 $ 1,095 $ 4,523 $ 3,533 _____________________ (1) Included in property, plant and equipment, net of accumulated depreciation. (2) Included in debt due within one year and long-term debt due after one year, accordingly. (3) Included in cost of sales and selling, general and administrative expense, accordingly. (4) Included in interest expense. Supplemental cash flows information as of and for the nine months ended : September 30, (Amounts in thousands, except lease term and discount rate) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases(1) $ 51,918 $ 39,642 Financing cash flows from finance leases(2) 3,408 4,177 ROU assets obtained in exchange for lease obligations: Operating leases $ 16,327 15,739 Finance leases 12,278 10,184 Weighted average remaining lease term (in years) Operating leases 8 years 9 years Finance leases 7 years 4 years Weighted average discount rate (percent) Operating leases 4.4 % 4.6 % Finance leases 3.5 % 3.7 % _____________________ (1) Included in our condensed consolidated statement of cash flows, operating activities, prepaid expenses and other assets, net and retirement obligations and other. (2) Included in our condensed consolidated statement of cash flows, financing activities, payments under other financing arrangements. Future undiscounted lease payments under operating and finance leases as of September 30, 2020 were as follows (amounts in thousands): Year ending December 31, Operating Finance Leases 2020 (excluding the nine months ended September 30, 2020) $ 10,527 $ 1,437 2021 37,135 5,281 2022 30,869 4,267 2023 24,494 2,775 2024 18,889 1,353 Thereafter 79,176 6,064 Total future minimum lease payments $ 201,090 $ 21,177 Less: Imputed interest (33,108) (2,637) Total $ 167,982 $ 18,540 Other current liabilities $ 34,634 $ — Operating lease liabilities 133,348 — Debt due within one year — 5,626 Long-term debt due after one year — 12,914 Total $ 167,982 $ 18,540 |
Leases | Leases We have operating and finance leases for certain manufacturing facilities, offices, service and quick response centers, machinery, equipment and automobiles. Our leases have remaining lease terms of up to 33 years. The terms and conditions of our leases may include options to extend or terminate the lease which are considered and included in the lease term when these options are reasonably certain of exercise. We determine if a contract is (or contains) a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset. For all classes of leased assets, we have elected the practical expedient to account for any non-lease components in the contract together with the related lease component in the same unit of account. For lease contracts containing more than one lease component, we allocate the contract consideration to each of the lease components on the basis of relative standalone prices in order to identify the lease payments for each lease component. Right-of-use ("ROU") assets and lease liabilities are recognized in our condensed consolidated balance sheets at the commencement date based on the present value of remaining lease payments over the lease term. Additionally, ROU assets include any lease payments made at or before the commencement date, as well as any initial direct costs incurred, and are reduced by any lease incentives received. As most of our operating leases do not provide an implicit rate, we apply our incremental borrowing rate to determine the present value of remaining lease payments. Our incremental borrowing rate is determined based on information available at the commencement date of the lease. Operating leases are included in operating lease ROU assets, net and operating lease liabilities in our condensed consolidated balance sheets. Finance leases are included in property plant and equipment, debt due within one year and long-term debt due after one year in our condensed consolidated balance sheets. We have certain lease contracts with terms and conditions that provide for variability in the payment amount based on changes in facts or circumstances occurring after the commencement date. These variable lease payments are recognized in our condensed consolidated income statements as the obligation is incurred. We have certain lease contracts where we provide a guarantee to the lessor that the value of an underlying asset will be at least a specified amount at the end of the lease. Estimated amounts expected to be paid for residual value guarantees are included in operating lease liabilities and ROU assets, net. We had $33.4 million and $34.7 million of legally binding minimum lease payments for operating leases signed but not yet commenced as of September 30, 2020 and December 31, 2019, respectively. We did not have material subleases, leases that imposed significant restrictions or covenants, material related party leases or sale-leaseback arrangements. Other information related to our leases is as follows: September 30, December 31, (Amounts in thousands) 2020 2019 Operating Leases: ROU assets recorded under operating leases $ 227,437 $ 220,865 Accumulated amortization associated with operating leases (60,587) (34,647) Total operating leases ROU assets, net $ 166,850 $ 186,218 Liabilities recorded under operating leases (current) $ 34,634 $ 36,108 Liabilities recorded under operating leases (non-current) 133,348 151,523 Total operating leases liabilities $ 167,982 $ 187,631 Finance Leases: ROU assets recorded under finance leases $ 26,942 $ 19,606 Accumulated depreciation associated with finance leases (8,443) (7,551) Total finance leases ROU assets, net(1) $ 18,499 $ 12,055 Total finance leases liabilities(2) $ 18,540 $ 11,788 The costs components of operating and finance leases are as follows: Three Months Ended September 30, Nine Months Ended September 30, (Amounts in thousands) 2020 2019 2020 2019 Operating Lease Costs: Fixed lease expense(3) $ 14,114 $ 13,858 $ 42,655 $ 43,864 Variable lease expense(3) 1,569 1,119 5,260 3,999 Total operating lease expense $ 15,683 $ 14,977 $ 47,915 $ 47,863 Finance Lease Costs: Depreciation of finance lease ROU assets(3) $ 1,448 $ 993 $ 4,051 $ 3,280 Interest on lease liabilities(4) 181 102 472 253 Total finance lease expense $ 1,629 $ 1,095 $ 4,523 $ 3,533 _____________________ (1) Included in property, plant and equipment, net of accumulated depreciation. (2) Included in debt due within one year and long-term debt due after one year, accordingly. (3) Included in cost of sales and selling, general and administrative expense, accordingly. (4) Included in interest expense. Supplemental cash flows information as of and for the nine months ended : September 30, (Amounts in thousands, except lease term and discount rate) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases(1) $ 51,918 $ 39,642 Financing cash flows from finance leases(2) 3,408 4,177 ROU assets obtained in exchange for lease obligations: Operating leases $ 16,327 15,739 Finance leases 12,278 10,184 Weighted average remaining lease term (in years) Operating leases 8 years 9 years Finance leases 7 years 4 years Weighted average discount rate (percent) Operating leases 4.4 % 4.6 % Finance leases 3.5 % 3.7 % _____________________ (1) Included in our condensed consolidated statement of cash flows, operating activities, prepaid expenses and other assets, net and retirement obligations and other. (2) Included in our condensed consolidated statement of cash flows, financing activities, payments under other financing arrangements. Future undiscounted lease payments under operating and finance leases as of September 30, 2020 were as follows (amounts in thousands): Year ending December 31, Operating Finance Leases 2020 (excluding the nine months ended September 30, 2020) $ 10,527 $ 1,437 2021 37,135 5,281 2022 30,869 4,267 2023 24,494 2,775 2024 18,889 1,353 Thereafter 79,176 6,064 Total future minimum lease payments $ 201,090 $ 21,177 Less: Imputed interest (33,108) (2,637) Total $ 167,982 $ 18,540 Other current liabilities $ 34,634 $ — Operating lease liabilities 133,348 — Debt due within one year — 5,626 Long-term debt due after one year — 12,914 Total $ 167,982 $ 18,540 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation Plans | Stock-Based Compensation PlansEffective January 1, 2020, our shareholders approved the Flowserve Corporation 2020 Long-Term Incentive Plan (“2020 Plan”). The 2020 Plan replaces and supersedes the Flowserve Corporation Equity and Incentive Compensation Plan ("2010 Plan") in its entirety. See Note 7 to our consolidated financial statements included in our 2019 Annual Report for additional information on the 2010 Plan. The 2020 Plan authorizes the issuance of 12,500,000 shares of our common stock in the form of restricted shares, restricted share units and performance-based units (collectively referred to as "Restricted Shares"), incentive stock options, non-statutory stock options, stock appreciation rights and bonus stock, in addition to any shares available for issuance or subject to forfeiture under the 2010 Plan as of its expiration on December 31, 2019. Of the shares of common stock authorized under the 2020 Plan and remaining shares under the 2010 Plan, 13,527,202 were available for issuance as of September 30, 2020. Restricted Shares primarily vest over a three year period. Restricted Shares granted to employees who retire and have achieved at least 55 years of age and 10 years of service continue to vest over the original vesting period ("55/10 Provision"). As of September 30, 2020, 114,943 stock options were outstanding, with a grant date fair value of $2.0 million recognized over three years. As of September 30, 2020, compensation associated with these stock options was fully earned. The total fair value of stock options vested during both the three and nine months ended September 30, 2020 was $2.0 million, compared to no stock options vested during both the three and nine months ended September 30, 2019. The fair value of each option award was estimated on the date of grant using the Black-Scholes option pricing model. No stock options were granted during the nine months ended September 30, 2020 and 2019. Restricted Shares – Awards of Restricted Shares are valued at the closing market price of our common stock on the date of grant. The unearned compensation is amortized to compensation expense over the vesting period of the restricted shares, except for awards related to the 55/10 Provision which are expensed in the period granted. We had unearned compensation of $25.7 million and $23.4 million at September 30, 2020 and December 31, 2019, respectively, which is expected to be recognized over a remaining weighted-average period of approximat ely one year. These amounts will be recognized into net earnings in prospective periods as the awar ds vest. The total fair value of Restricted Shares vested during the three months ended September 30, 2020 and 2019 was $4.9 million and $0.3 million , respectively. The total fair value of Restricted Shares vested during the nine months ended September 30, 2020 and 2019 was $25.9 million an d $16.5 million , respectively. We recorded stock-based compensation expense of $4.3 million ($5.6 million pre-tax) and $5.5 million ($7.2 million pre-tax) for the three months ended September 30, 2020 and 2019, respectively. We recorded stock-based compensation expense of $18.7 million ($24.1 million pre-tax) a nd $17.4 million ($22.5 million pre-tax) for the nine months ended September 30, 2020 and 2019, respectively. Performance-based shares granted in 2016 did not vest due to performance targets not being achieved, resulting in 115,302 forfeited shares and a $4.5 million reduction of stock-based compensation expense for the nine months ended September 30, 2019. The following table summarizes information regarding Restricted Shares: Nine Months Ended September 30, 2020 Shares Weighted Average Number of unvested shares: Outstanding - January 1, 2020 1,690,600 $ 46.71 Granted 706,340 46.92 Vested (576,441) 44.99 Forfeited (355,922) 49.32 Outstanding as of September 30, 2020 1,464,577 $ 46.86 Unvested Restricted Shares outstanding as of September 30, 2020 included approximately 551,000 units with performance-based vesting provisions. Performance-based units are issuable in common stock and vest upon the achievement of pre-defined performance targets. Performance-based units have performance targets based on our average return on invested capital and our total shareholder return ("TSR") over a three-year period. Most unvested units were granted in three |
Derivative Instruments and Hedg
Derivative Instruments and Hedges | 9 Months Ended |
Sep. 30, 2020 | |
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 8 to our consolidated financial statements included in our 2019 Annual Report and Note 8 o f this Quarterly Report for additional information on our derivatives. We enter into foreign exchange forward contracts to hedge our cash flow risks associated with transactions denominated in currencies other than the local currency of the operation engaging in the transaction. Forei gn exchange contracts with third parties had a notional value of $399.6 million and $398.5 million at September 30, 2020 and December 31, 2019, respectively. At September 30, 2020, the length of foreign exchange contracts currently in place ranged from 9 days to 23 months. We are exposed to risk from cred it-related losses resulting from nonperformance by counterparties to our financial instruments. We perform credit evaluations of our counterparties under foreign exchange contracts agreements and expect all counterparties to meet their obligations. We have not experienced credit losses from our counterparties. The fair values of foreign exchange contracts are summarized below: September 30, December 31, (Amounts in thousands) 2020 2019 Current derivative assets $ 1,082 $ 892 Noncurrent derivative assets 65 15 Current derivative liabilities 682 3,418 Noncurrent derivative liabilities 4 8 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 September 30, Nine Months Ended September 30, (Amounts in thousands) 2020 2019 2020 2019 Losses recognized in income $ (2,293) $ (1,817) $ (2,354) $ (4,511) Gains and losses recognized in our condensed consolidated statements of income for foreign exchange contracts are classified as other income (expense), net. On September 22, 2020, as a means of managing the volatility of foreign currency exposure with the Euro/U.S. dollar exchange rate, we entered into a cross-currency swap ("Swap") associated with our Euro investment in certain of our international subsidiaries and was designated as a net investment hedge. We exclude the interest accruals on the swap from the assessment of hedge effectiveness and recognize the interest accruals in earnings within interest expense. For each reporting period, the change in the fair value of the swap attributable to changes in the spot rate and differences between the change in the fair value of the excluded components and the amounts recognized in earnings under the swap accrual process are reported in accumulated other comprehensive loss on our consolidated balance sheet. As of September 30, 2020, the notional value of the Swap wa s €163.2 million and has an early termination date of September 2025 . In March 2015, we designated €255.7 million of our 1.25% EUR 2022 Senior Notes ("2022 Euro Senior Notes") discussed in Note 6 as a net investment hedge of our Euro investment in certain of our international subsidiaries. On September 22, 2020, we increased the designated hedged value on the 2022 Euro Senior Notes to €336.3 million. For each reporting period, the change in the carrying value due to the 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 income (expense), net in our condensed consolidated statement of income. We use the spot method to measure the effectiveness of both of the net investment hedges and evaluate the effectiveness on a prospective basis at the beginning of each quarter. We did not record any ineffectiveness |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt, including finance lease obligations, net of discounts and debt issuance costs, consisted of: September 30, December 31, (Amounts in thousands, except percentages) 2020 2019 1.25% EUR Senior Notes due March 17, 2022, net of unamortized discount and debt issuance costs of $1,239 and $2,653 393,403 $ 557,847 3.50% USD Senior Notes due September 15, 2022, net of unamortized discount and debt issuance costs of $1,410 and $1,924 498,590 498,076 4.00% USD Senior Notes due November 15, 2023, net of unamortized discount and debt issuance costs of $1,455 and $1,777 298,545 298,223 3.50% USD Senior Notes due October 1, 2030, net of unamortized discount and debt issuance costs of $6,277 as of September 30, 2020 493,723 — Finance lease obligations and other borrowings 25,402 23,103 Debt and finance lease obligations 1,709,663 1,377,249 Less amounts due within one year 8,581 11,272 Total debt due after one year $ 1,701,082 $ 1,365,977 Senior Notes On September 14, 2020, we completed a public offering of $500.0 million in aggregate principal amount of senior notes due October 1, 2030 ("2030 Senior Notes"). The 2030 Senior Notes bear an interest rate of 3.50% pe r year, payable on April 1 and October 1 of each year, commencing on April 1, 2021. The 2030 Senior Notes were priced at 99.656% of par value, reflecting a discount to the aggregate principal amount. We used a portion of the net proceeds of the 2030 Senior Notes offering to fund a partial tender offer of our 2022 Euro Senior Notes . As of September 30, 2020 we had tendered $191.4 million of our 2022 Euro Senior Notes and have r ecorded in interest expense an early extinguishment loss of $1.2 million . We intend to use the remaining net proceeds from the 2030 Senior Notes for future debt reduction. Senior Credit Facility On September 4, 2020, we amended our credit agreement with Bank of America, N.A., as administrative agent, and the other lenders party thereto ("Amended Credit Agreement") to provide greater flexibility in maintaining adequate liquidity in the event we have the need to access available borrowings under our Senior Credit Facility ("Credit Facility"). The Amended Credit Agreement provides for an $800.0 million unsecured senior credit facility with a maturity date of July 16, 2024. The Credit Facility includes a $750.0 million sublimit for the issuance of letters of credit and a $30.0 million sublimit for swing line loans. We have the right to increase the amount of the Credit Facility by an aggregate amount not to exceed $400.0 million, subject to certain conditions, including each Lender's approval providing any increase. The Amended Credit Agreement, among other things, (i) replaces the existing leverage ratio financial covenant (the “Existing Leverage Covenant”) with a leverage ratio financial covenant that requires the Company’s ratio of consolidated funded indebtedness, minus the amount of all cash and cash equivalents on our balance sheet in excess of $250.0 million, to the Company’s Consolidated EBITDA, not to exceed 4.00 to 1.00 as of the last day of any quarter through and including December 31, 2021 (the “Covenant Relief Period”), (ii) amends the Existing Leverage Covenant to provide that it will not be tested until the quarter ending March 31, 2022, (iii) provides that the Existing Leverage Covenant, beginning March 31, 2022, cannot exceed 4.00 to 1.00 (or as increased to 4.50 to 1.00 in connection with certain acquisitions) and (iv) limits the Company’s ability to pay dividends and repurchase its shares of common stock, par value $1.25, during the Covenant Relief Period, to an amount not to exceed 115% of the total amount of dividends and share repurchases we made during the period commencing January 1, 2019 through and including June 30, 2020. The interest rates per annum applicable to the Senior Credit Facility, other than with respect to swing line loans, are LIBOR plus between 1.000% to 1.750%, depending on our debt rating by either Moody’s Investors Service, Inc. or Standard & Poor’s Financial Services LLC ("S&P") Ratings, or, at our option, the Base Rate (as defined in the Credit Agreement) plus between 0.000% to 0.750% depending on our debt rating by either Moo dy’s Investors Service, Inc. or S&P Ratings. At September 30, 2020, the interest rate on the Senior Credit Facility was LIBOR plus 1.375% in the case of LIBOR loans and the Base Rate plus 0.375% in the case of Base Rate loans. In addition, a commitment fee is payable quarterly in arrears on the daily unused portions of the Credit Facility. The commitment fee will be betw een 0.090% and 0.300% of unused amounts under the Credit Facility depending on our debt rating by either Moody’s Investors Service, Inc. or S&P’s Ratings. The commitment f ee was 0.20% (per annum) during the period ended September 30, 2020. A s of September 30, 2020 and December 31, 2019, we had no revolving loans outstanding. We had outstanding letters of credit of $54.1 million and $88.5 million at September 30, 2020 and December 31, 2019, respectively. As of September 30, 2020, the amount available for borrowings u nder our Senior Credit Facility was $745.9 million, compared to $711.5 million at December 31, 2019. Our compliance with applicable financial covenants under the Senior Notes and Credit Facility are tested quarterly. We were in compliance with all applicable covenants as of September 30, 2020. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2020 | |
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 associa ted 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 6. 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 h ierarchy. The carrying value of our debt is included in Note 7. The estimated fair value of our Senior Notes at September 30, 2020 was $1,711.9 million compared to the carrying value of $1,684.3 million. The estimated fair value of the Senior Notes is based on Level I quoted market rates. The carrying amounts of our other fin ancial 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 September 30, 2020 and December 31, 2019. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories, net consisted of the following: September 30, December 31, (Amounts in thousands) 2020 2019 Raw materials $ 345,419 $ 328,080 Work in process 246,902 192,993 Finished goods 207,239 218,408 Less: Excess and obsolete reserve (85,071) (78,644) Inventories, net $ 714,489 $ 660,837 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30, (Amounts in thousands, except per share data) 2020 2019 Net earnings of Flowserve Corporation $ 51,003 $ 59,842 Dividends on restricted shares not expected to vest — — Earnings attributable to common and participating shareholders $ 51,003 $ 59,842 Weighted average shares: Common stock 130,292 131,122 Participating securities 21 23 Denominator for basic earnings per common share 130,313 131,145 Effect of potentially dilutive securities 587 701 Denominator for diluted earnings per common share 130,900 131,846 Earnings per common share: Basic $ 0.39 $ 0.46 Diluted 0.39 0.45 Nine Months Ended September 30, (Amounts in thousands, except per share data) 2020 2019 Net earnings of Flowserve Corporation $ 59,433 $ 166,243 Dividends on restricted shares not expected to vest — — Earnings attributable to common and participating shareholders $ 59,433 $ 166,243 Weighted average shares: Common stock 130,390 131,070 Participating securities 23 22 Denominator for basic earnings per common share 130,413 131,092 Effect of potentially dilutive securities 655 605 Denominator for diluted earnings per common share 131,068 131,697 Earnings per common share: Basic $ 0.46 $ 1.27 Diluted 0.45 1.26 |
Legal Matters and Contingencies
Legal Matters and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters and Contingencies | Legal Matters and Contingencies Asbestos-Related Claims We are a defendant in a substantial number of lawsuits that seek to recover damages for personal injury allegedly caused by exposure to asbestos-containing products manufactured and/or distributed by our heritage companies in the past. Typically, these lawsuits have been brought against multiple defendants in state and federal courts. While the overall number of asbestos-related claims in which we or our predecessors have been named has generally declined in recent years, there can be no assurance that this trend will continue, or that the average cost per claim to us will not further increase. Asbestos-containing materials incorporated into any such products were encapsulated and used as internal components of process equipment, and we do not believe that any significant emission of asbestos fibers occurred during the use of this equipment. Our practice is to vigorously contest and resolve these claims, and we have been successful in resolving a majority of claims with little or no payment, other than legal fees. Activity related to asbestos claims during the periods indicated was as follows: Three Months Ended Nine Months Year Ended September 30, September 30, December 31, 2020 2019 2020 2019 2019 Beginning claims(1) 8,100 8,315 8,345 8,619 8,619 New claims 635 656 1,672 1,671 2,314 Resolved claims (398) (699) (1,706) (2,027) (2,601) Other(2) 9 5 35 14 13 Ending claims(1) 8,346 8,277 8,346 8,277 8,345 ____________________ (1) All claims data in each period excludes inactive claims, as the Company considers it unlikely that inactive cases will be pursued further by the respective plaintiffs. A claim is classified as inactive either due to inactivity over a period of time or if designated as inactive by the applicable court. (2) Represents the net change in claims as a result of the reclassification of active cases as inactive and inactive cases as active during the period indicated. Cases moved from active to inactive status are removed from the claims count without being accounted for as a "Resolved claim", and cases moved from inactive status to active status are added back to the claims count without being accounted for as a “New claim”. During the nine months ended September 30, 2020 , the Company paid (net of insurance and/or indemnity) approximately $12.1 million to defend, resolve or otherwise dispose of outstanding claims, including legal and other related expenses. 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, in whole or in part. We believe that our reserve for asbestos claims and the receivable for recoveries from insurance carriers that we have recorded for these claims reflects reasonable and probable estimates of these amounts. Our estimate of our ultimate exposure for asbestos claims, however, is subject to significant uncertainties, including the timing and number and types of new claims, unfavorable court rulings, judgments or settlement terms and ultimate costs to settle. Additionally, including the continued viability of carriers, may also impact the amount of probable insurance recoveries. We believe that these uncertainties could have a material adverse impact on our business, financial condition, results of operations and cash flows, though we currently believe the likelihood is remote. Additionally, we have claims pending against certain insurers that, if resolved more favorably than reflected in the recorded receivables, would result in discrete gains in the applicable quarter. Other Claims We are also a defendant in a number of other lawsuits, including product liability claims, that are insured, subject to the applicable deductibles, arising in the ordinary course of business, and we are also involved in other uninsured routine litigation incidental to our business. We currently believe none of such litigation, either individually or in the aggregate, is material to our business, operations or overall financial condition. However, litigation is inherently unpredictable, and resolutions or dispositions of claims or lawsuits by settlement or otherwise could have an adverse impact on our financial position, results of operations or cash flows for the reporting period in which any such resolution or disposition occurs. Although none of the aforementioned potential liabilities can be quantified with absolute certainty except as otherwise indicated above, we have established or adjusted reserves covering exposures relating to contingencies, to the extent believed to be reasonably estimable and probable based on past experience and available facts. While additional exposures beyond these reserves could exist, they currently cannot be estimated. We will continue to evaluate and update the reserves as necessary and appropriate. |
Retirement and Postretirement B
Retirement and Postretirement Benefits | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [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 September 30, 2020 and 2019 were as follows: U.S. Non-U.S. Postretirement (Amounts in millions) 2020 2019 2020 2019 2020 2019 Service cost $ 6.4 $ 5.9 $ 2.0 $ 1.3 $ — $ — Interest cost 3.8 4.5 1.8 2.0 0.1 0.2 Expected return on plan assets (6.4) (6.4) (1.4) (1.7) — — Amortization of prior service cost — — 0.1 0.1 — — Amortization of unrecognized net loss (gain) 1.7 1.0 1.2 0.6 — — Net periodic cost recognized $ 5.5 $ 5.0 $ 3.7 $ 2.3 $ 0.1 $ 0.2 Components of the net periodic cost for retirement and postretirement benefits for the nine months ended September 30, 2020 and 2019 were as follows: U.S. Non-U.S. Postretirement (Amounts in millions) 2020 2019 2020 2019 2020 2019 Service cost $ 19.4 $ 17.4 $ 5.4 $ 4.2 $ — $ — Interest cost 11.3 13.2 5.0 6.5 0.4 0.5 Expected return on plan assets (19.3) (19.2) (3.8) (5.5) — — Amortization of prior service cost 0.1 0.1 0.2 0.2 0.1 0.1 Amortization of unrecognized net loss (gain) 5.2 2.8 3.3 2.1 (0.1) (0.1) Net periodic cost recognized $ 16.7 $ 14.3 $ 10.1 $ 7.5 $ 0.4 $ 0.5 The components of net periodic cost for retirement and postretirement benefits other than service costs are included in other income (expense), net in our condensed consolidated statement of income. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Dividends – Generally, our dividend date-of-record is in the last month of the quarter, and the dividend is paid the following month. Any subsequent dividends will be reviewed by our Board of Directors and declared in its discretion. Dividends declared per share were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Dividends declared per share $ 0.20 $ 0.19 $ 0.60 $ 0.57 Share Repurchase Program – In 2014, our Board of Directors approved a $500.0 million share repurchase authorization. Our share repurchase program does not have an expiration date and we reserve the right to limit or terminate the repurchase program at any time without notice. We had no repurchases of shares of our outstanding common stock for the three months ended September 30, 2020, compared to 113,656 shares repurchases for $5.4 million for the same period in 2019. We repurchased 1,057,115 shares of our outstanding common stock for $32.1 million, and 113,656 shares for $5.4 million during the nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, we had $113.6 million of remaining capacity under our current share repurchase program. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended September 30, 2020, we earned $72.3 million before taxes and provided for income taxes of $18.7 million resulting in an effective tax rate of 25.8%. For the nine months ended September 30, 2020, we earned $125.5 million before taxes and provided for income taxes of $59.2 million resulting in an effective tax rate of 47.2%. The effective tax rate varied from the U.S. federal statutory rate for the three months ended September 30, 2020 primarily due to the net impact of foreign operations. The effective tax rate varied from the U.S. federal statutory rate for the nine months ended September 30, 2020 primarily due to the establishment of a valuation allowance against certain deferred tax assets given the current and anticipated impact to the Company's operations resulting from the COVID-19 pandemic and the distressed oil prices, and the net impact of foreign operations. For the three months ended September 30, 2019, we earned $84.4 million before taxes and provided for income taxes of $22.4 million resulting in an effective tax rate of 26.6%. For the nine months ended September 30, 2019, we earned $231.5 million before taxes and provided for income taxes of $58.6 million resulting in an effective tax rate of 25.3%. The effective tax rate varied from the U.S. federal statutory rate for the three months ended September 30, 2019 primarily due to the BEAT provision in the Tax Reform Act and state tax. The effective tax rate varied from the U.S. federal statutory rate for the nine months ended September 30, 2019 primarily due to the BEAT provision in the Tax Reform Act and state tax, partially offset by the net impact of foreign operations. In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws. For the three and nine months ended September 30, 2020, there were no material tax impacts to our condensed consolidated financial statements as they relate to the CARES Act or any other global COVID-19 measures. We continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others. As of September 30, 2020, the amount of unrecognized tax benefits increased by $6.0 million from December 31, 2019. With limited exception, we are no longer subject to U.S. federal income tax audits for years through 2017, state and local income tax audits for years through 2013 or non-U.S. income tax audits for years through 2012. We are currently under examination for various years in Canada, Germany, India, Indonesia, Italy, Mexico, the Netherlands, Philippines, Saudi Arabia, the U.S. and Venezuela. It is reasonably possible that within the next 12 months the effective tax rate will be impacted by the resolution of some or all of the matters audited by various taxing authorities. It is also reasonably possible that we will have the statute of limitations close in various taxing jurisdictions within the next 12 months. As such, we estimate we could record a reduction in our tax expense of approximately $7 million within the next 12 months. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The following is a summary of the financial information of the reportable segments reconciled to the amounts reported in the condensed consolidated financial statements: Three Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments Eliminations and All Other Consolidated Total Sales to external customers $ 669,535 $ 254,766 $ 924,301 $ — $ 924,301 Intersegment sales 673 455 1,128 (1,128) — Segment operating income 86,660 30,752 117,412 (30,090) 87,322 Three Months Ended September 30, 2019 FPD FCD Subtotal–Reportable Segments Eliminations and All Other Consolidated Total Sales to external customers $ 682,798 $ 312,911 $ 995,709 $ — $ 995,709 Intersegment sales (52) 1,066 1,014 (1,014) — Segment operating income 85,461 49,243 134,704 (30,126) 104,578 Nine Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments Eliminations and All Other Consolidated Total Sales to external customers $ 1,978,215 $ 764,611 $ 2,742,826 $ — $ 2,742,826 Intersegment sales 1,710 2,280 3,990 (3,990) — Segment operating income 186,740 74,160 260,900 (105,923) 154,977 Nine Months Ended September 30, 2019 FPD FCD Subtotal–Reportable Segments Eliminations and All Other Consolidated Total Sales to external customers $ 1,965,523 $ 905,994 $ 2,871,517 $ — $ 2,871,517 Intersegment sales 1,249 2,716 3,965 (3,965) — Segment operating income 242,085 134,689 376,774 (94,581) 282,193 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | 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 September 30, 2020 and 2019: 2020 2019 (Amounts in thousands) Foreign currency translation items(1) Pension and other post-retirement effects Cash flow hedging activity Total(1) Foreign currency translation items(1) Pension and other post-retirement effects Cash flow hedging activity Total(1) Balance - July 1 $ (507,633) $ (129,094) $ (573) $ (637,300) $ (443,828) $ (117,244) $ (753) $ (561,825) Other comprehensive income (loss) before reclassifications 25,204 (3,647) 41 21,598 (30,600) 2,184 44 (28,372) Amounts reclassified from AOCL — 2,671 — 2,671 — 1,464 — 1,464 Net current-period other comprehensive income (loss) 25,204 (976) 41 24,269 (30,600) 3,648 44 (26,908) Balance - September 30 $ (482,429) $ (130,070) $ (532) $ (613,031) $ (474,428) $ (113,596) $ (709) $ (588,733) ________________________________ (1) Includes foreign currency translation adjustments attributable to noncontrolling interests of $5.9 million and $5.2 million at July 1, 2020 and 2019, respectively, and $5.8 million and $5.1 million at September 30, 2020 and 2019, respectively. Includes net investment hedge losses of $12.1 million and gains of $9.3 million, net of deferred taxes, at September 30, 2020 and 2019, respectively. Amounts in parentheses indicate debits. The following table presents the reclassifications out of AOCL: Three Months Ended September 30, (Amounts in thousands) Affected line item in the statement of income 2020(1) 2019(1) Pension and other postretirement effects Amortization of actuarial losses(2) Other income (expense), net $ (2,942) $ (1,564) Prior service costs(2) Other income (expense), net (150) (131) Tax benefit 421 231 Net of tax $ (2,671) $ (1,464) __________________________________ (1) Amounts in parentheses indicate decreases to income. None of the reclassified amounts have a noncontrolling interest component. (2) These AOCL components are included in the computation of net periodic pension cost. See Note 12 for additional details. The following table presents the changes in AOCL, net of tax for the nine months ended September 30, 2020 and 2019: 2020 2019 (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 $ (441,407) $ (137,161) $ (671) $ (579,239) $ (447,925) $ (120,647) $ (858) $ (569,430) Other comprehensive (loss) income before reclassifications (41,022) (531) 139 (41,414) (26,503) 2,576 149 (23,778) Amounts reclassified from AOCL — 7,622 — 7,622 — 4,475 — 4,475 Net current-period other comprehensive (loss) income (41,022) 7,091 139 (33,792) (26,503) 7,051 149 (19,303) Balance - September 30 $ (482,429) $ (130,070) $ (532) $ (613,031) $ (474,428) $ (113,596) $ (709) $ (588,733) _________________________________ (1) Includes foreign currency translation adjustments attributable to noncontrolling interests of $5.1 million and $4.5 million at January 1, 2020 and 2019, respectively, an d $5.8 million and $5.1 million at September 30, 2020 and 2019, respectively. Includes net investment hedge losses of $24.6 million a nd $5.9 million , net of deferred taxes, for the nine months ended September 30, 2020 and 2019, respectively. Amounts in parentheses indicate debits. The following table presents the reclassifications out of AOCL: Nine Months Ended September 30, (Amounts in thousands) Affected line item in the statement of income 2020(1) 2019(1) Pension and other postretirement effects Amortization of actuarial losses(2) Other income (expense), net $ (8,456) $ (4,727) Prior service costs(2) Other income (expense), net (429) (408) Tax benefit 1,263 660 Net of tax $ (7,622) $ (4,475) ________________________________ (1) Amounts in parentheses indicate decreases to income. None of the reclassified amounts have a noncontrolling interest component. |
Realignment and Transformation
Realignment and Transformation Programs | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Realignment and Transformation Programs | Realignment and Transformation Programs In the second quarter of 2020, we identified and initiated certain realignment activities resulting from our Flowserve 2.0 Transformation Program (defined below) to right-size our organizational operations based on the current business environment, with the overall objective to reduce our workforce costs, including manufacturing optimization through the consolidation of certain facilities ("2020 Realignment Program"). The realignment activities consist of restructuring and non-restructuring charges. Restructuring charges represent costs associated with the relocation of certain business activities and facility closures and include related severance costs. Non-restructuring charges are primarily employee severance associated with the workforce reductions. Expenses are primarily reported in cost of sales ("COS") or selling, general and administrative ("SG&A"), as applicable, in our condensed consolidated statements of income. We anticipate a total investment in these activities of approximately $75 million and that the majority of the charges will be incurred in 2020. There are certain other realignment activities that are currently being evaluated, but have not yet been finalized. The realignment programs initiated in 2015 ("2015 Realignment Programs"), which consisted of both restructuring and non-restructuring charges, were substantially complete as of March 31, 2020, resulting in $362.4 million of total charges incurred through the completion of the programs. In the second quarter of 2018, we launched and committed resources to our Flowserve 2.0 Transformation ("Flowserve 2.0 Transformation"), a program designed to transform our business model to drive operational excellence, reduce complexity, accelerate growth, improve organizational health and better leverage our existing global platform. The Flowserve 2.0 Transformation expenses incurred primarily consist of professional services, project management and related travel costs recorded in SG&A expenses. Generally, the aforementioned charges will be paid in cash, except for asset write-downs, which are non-cash charges. The following is a summary of total charges, net of adjustments, related to our realignment activities and Flowserve 2.0 Transformation charges. Realignment charges incurred in 2020 related to our 2020 Realignment Program and realignment charges incurred in 2019 related to our 2015 Realignment Programs: Three Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments All Other Consolidated Total Realignment Charges Restructuring Charges COS $ 5,469 $ 590 $ 6,059 $ — $ 6,059 SG&A (10) (2) (12) — (12) $ 5,459 $ 588 $ 6,047 $ — $ 6,047 Non-Restructuring Charges COS $ 1,210 $ (1,366) $ (156) $ (245) $ (401) SG&A 1,097 75 1,172 613 1,785 $ 2,307 $ (1,291) $ 1,016 $ 368 $ 1,384 Total Realignment Charges COS $ 6,679 $ (776) $ 5,903 $ (245) $ 5,658 SG&A 1,087 73 1,160 613 $ 1,773 Total $ 7,766 $ (703) $ 7,063 $ 368 $ 7,431 Transformation Charges SG&A $ — $ — $ — $ 4,746 $ 4,746 $ — $ — $ — $ 4,746 $ 4,746 Total Realignment and Transformation Charges COS $ 6,679 $ (776) $ 5,903 $ (245) $ 5,658 SG&A 1,087 73 1,160 5,359 6,519 Total $ 7,766 $ (703) $ 7,063 $ 5,114 $ 12,177 Three Months Ended September 30, 2019 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments All Other Consolidated Total Realignment Charges Restructuring Charges COS $ 197 $ 811 $ 1,008 $ — $ 1,008 SG&A 37 — 37 — 37 $ 234 $ 811 $ 1,045 $ — $ 1,045 Non-Restructuring Charges COS $ 2,409 $ 3 $ 2,412 $ — $ 2,412 SG&A 343 — 343 994 1,337 $ 2,752 $ 3 $ 2,755 $ 994 $ 3,749 Total Realignment Charges COS $ 2,606 $ 814 $ 3,420 $ — $ 3,420 SG&A 380 — 380 994 $ 1,374 Total $ 2,986 $ 814 $ 3,800 $ 994 $ 4,794 Transformation Charges SG&A $ — $ — $ — $ 5,058 $ 5,058 $ — $ — $ — $ 5,058 $ 5,058 Total Realignment and Transformation Charges COS $ 2,606 $ 814 $ 3,420 $ — $ 3,420 SG&A 380 $ — 380 6,052 6,432 Total $ 2,986 $ 814 $ 3,800 $ 6,052 $ 9,852 Nine Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments All Other Consolidated Total Realignment Charges Restructuring Charges COS $ 18,800 $ 318 $ 19,118 $ — $ 19,118 SG&A 221 (5) 216 — 216 $ 19,021 $ 313 $ 19,334 $ — $ 19,334 Non-Restructuring Charges COS $ 13,339 $ 7,876 $ 21,215 $ 303 $ 21,518 SG&A 10,899 4,459 15,358 16,107 31,465 $ 24,238 $ 12,335 $ 36,573 $ 16,410 $ 52,983 Total Realignment Charges COS $ 32,139 $ 8,194 $ 40,333 $ 303 $ 40,636 SG&A 11,120 4,454 15,574 16,107 31,681 Total $ 43,259 $ 12,648 $ 55,907 $ 16,410 $ 72,317 Transformation Charges SG&A — — — 16,007 16,007 $ — $ — $ — $ 16,007 $ 16,007 Total Realignment and Transformation Charges COS $ 32,139 $ 8,194 $ 40,333 $ 303 $ 40,636 SG&A 11,120 4,454 15,574 32,114 47,688 Total $ 43,259 $ 12,648 $ 55,907 $ 32,417 $ 88,324 Nine Months Ended September 30, 2019 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments All Other Consolidated Total Restructuring Charges COS $ 1,892 $ 1,291 $ 3,183 $ — $ 3,183 SG&A(1) (17,072) 413 (16,659) — (16,659) $ (15,180) $ 1,704 $ (13,476) $ — $ (13,476) Non-Restructuring Charges COS $ 9,531 $ 72 $ 9,603 $ — $ 9,603 SG&A 770 34 804 2,237 3,041 $ 10,301 $ 106 $ 10,407 $ 2,237 $ 12,644 Total Realignment Charges COS $ 11,423 $ 1,363 $ 12,786 $ — $ 12,786 SG&A (16,302) 447 (15,855) 2,237 (13,618) Total $ (4,879) $ 1,810 $ (3,069) $ 2,237 $ (832) Transformation Charges SG&A — — — 21,044 21,044 $ — $ — $ — $ 21,044 $ 21,044 Total Realignment and Transformation Charges COS $ 11,423 $ 1,363 $ 12,786 $ — $ 12,786 SG&A (16,302) 447 (15,855) 23,281 7,426 Total $ (4,879) $ 1,810 $ (3,069) $ 23,281 $ 20,212 _______________________________ (1) Primarily consists of gains from the sales of non-strategic manufacturing facilities that were included in our 2015 Realignment Programs. The following is a summary of total inception to date charges, net of adjustments, related to the 2020 Realignment Program initiated in 2020: Inception to Date (Amounts in thousands) FPD FCD Subtotal–Reportable Segments All Other Consolidated Total Realignment Charges Restructuring Charges COS $ 17,119 $ 423 $ 17,542 $ — $ 17,542 SG&A 116 22 138 — 138 $ 17,235 $ 445 $ 17,680 $ — $ 17,680 Non-Restructuring Charges COS $ 13,213 $ 1,551 $ 14,764 $ 303 $ 15,067 SG&A 10,413 4,387 14,800 15,465 30,265 $ 23,626 $ 5,938 $ 29,564 $ 15,768 $ 45,332 Total Realignment Charges COS $ 30,332 $ 1,974 $ 32,306 $ 303 $ 32,609 SG&A 10,529 4,409 14,938 15,465 30,403 Total $ 40,861 $ 6,383 $ 47,244 $ 15,768 $ 63,012 Restructuring charges represent costs associated with the relocation or reorganization of certain business activities and facility closures and include costs related to employee severance at closed facilities, contract termination costs, asset write-downs and other costs. Severance costs primarily include costs associated with involuntary termination benefits. Contract termination costs include costs related to the termination of operating leases or other contract termination costs. Asset write-downs include accelerated depreciation of fixed assets, accelerated amortization of intangible assets, divestiture of certain non-strategic assets and inventory write-downs. Other costs generally include costs related to employee relocation, asset relocation, vacant facility costs (i.e., taxes and insurance) and other charges. The following is a summary of restructuring charges, net of adjustments, for our restructuring activities. Restructuring charges incurred in 2020 related to our 2020 Realignment Program and restructuring charges incurred in 2019 related to our 2015 Realignment Programs: Three Months Ended September 30, 2020 (Amounts in thousands) Severance Contract Termination Asset Write-Downs Other Total COS $ 4,704 $ — $ 331 $ 1,024 $ 6,059 SG&A (16) — 3 1 (12) Total $ 4,688 $ — $ 334 $ 1,025 $ 6,047 Three Months Ended September 30, 2019 (Amounts in thousands) Severance Contract Termination Asset Write-Downs Other Total COS $ (729) $ 3 $ 19 $ 1,715 $ 1,008 SG&A (9) — 5 41 37 Total $ (738) $ 3 $ 24 $ 1,756 $ 1,045 Nine Months Ended September 30, 2020 (Amounts in thousands) Severance Contract Termination Asset Write-Downs Other Total COS $ 16,959 $ — $ 1,322 $ 837 $ 19,118 SG&A 228 25 (37) 216 Total $ 17,187 $ — $ 1,347 $ 800 $ 19,334 Nine Months Ended September 30, 2019 (Amounts in thousands) Severance Contract Termination Asset Write-Downs/ (Gains) Other Total COS $ 1,099 $ 51 $ (799) $ 2,832 $ 3,183 SG&A(1) 1,609 — (18,496) 228 (16,659) Total $ 2,708 $ 51 $ (19,295) $ 3,060 $ (13,476) _______________________________ (1) Primarily consists of gains from the sales of non-strategic manufacturing facilities that were included in our 2015 Realignment Programs. The following is a summary of total inception to date restructuring charges, net of adjustments, related to our 2020 Realignment Program initiated in 2020: Inception to Date (Amounts in thousands) Severance Contract Termination Asset Write-Downs Other Total COS $ 15,276 $ — $ 1,325 $ 941 $ 17,542 SG&A 110 — 27 1 138 Total $ 15,386 $ — $ 1,352 $ 942 $ 17,680 The following represents the activity, primarily severance charges from reductions in force, related to the restructuring reserves for the nine months ended September 30, 2020 and 2019: (Amounts in thousands) 2020 2019 Balance at January 1 $ 6,703 $ 11,927 Charges, net of adjustments 17,986 5,817 Cash expenditures (4,772) (8,196) Other non-cash adjustments, including currency 425 (461) Balance at September 30 $ 20,342 $ 9,087 |
Basis of Presentation and Acc_2
Basis of Presentation and Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Accounting developments | Accounting Developments Pronouncements Implemented In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, "Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments" ("CECL"). The ASU requires, among other things, the use of a new current expected credit loss model in order to determine an allowance for expected credit losses with respect to financial assets and instruments held. The CECL model requires that we estimate the lifetime of an expected credit loss for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. On January 1, 2020, we adopted the ASU on a prospective basis to determine our allowance for credit losses in accordance with the requirements of Topic 326 $7.3 million on ou r opening condensed consolidated balance shee t. Our primary exposure to financial assets that are within the scope of CECL are trade receivables and contract assets. For these financial assets, we record an allowance for expected credit losses that, when deducted from the gross asset balance, presents the net amount expected to be collected. We estimate the allowance based on an aging schedule and according to historical losses as determined from our billings and collections history. Additionally, we adjust the allowance for factors that are specific to our customers’ credit risk such as financial difficulties, liquidity issues, insolvency, and country and political risk. We also consider both the current and forecasted direction of macroeconomic conditions at the reporting date. The CECL model requires consideration of reasonable and supportable forecasts of future economic conditions in the estimate of expected credit losses. We adjust the allowance and recognize adjustments in the income statement each period. Trade receivables are written off against the allowance in the period when the receivable is deemed to be uncollectible. Subsequent recoveries of amounts previously written off are reflected as a reduction to credit impairment losses in the income statement. Our allowance for expected credit losses for short-term receivables as of September 30, 2020, wa s $76.1 million, compared to $53.4 million as of December 31, 2019. The nine months of activity included $6.9 million for the adoption of the CECL model at January 1, 2020 and $15.8 million for current period adjustments. Our long-term receivables, included in other assets, net, represent receivables with collection periods longer than 12 months and the balance primarily consists of amounts to be collected from insurance companies and fully-reserved receivables associated with the national oil company in Venezuela. As of September 30, 2020, we had $108.2 million of long-term receivables, compared to $118.5 million as of December 31, 2019. Our allowance for expected credit losses for long-term receivables as of September 30, 2020 was $97.9 million, compared to $101.4 million as of December 31, 2019. We have exposure to credit losses from off-balance sheet exposures, such as financial guarantees and standby letters of credit, where we believe the risk of loss is immaterial to our financial statements as of September 30, 2020. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." The amendments in this ASU allow companies to apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The amendments of the ASU are effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Our adoption of ASU No. 2017-04 effective January 1, 2020 did not have an impact on our condensed consolidated financial condition and results of operations. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement." The amendments of the ASU modify the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosure requirements for assets and liabilities measured at fair value in the statement of financial position or disclosed in the notes to the financial statements. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for the removed disclosures and delayed adoption until fiscal year 2020 permitted for the new disclosures. The removed and modified disclosures were adopted on a retrospective basis and the new disclosures were adopted on a prospective basis. Our adoption of ASU No. 2018-13 effective January 1, 2020 did not have an impact on our disclosures. In August 2018, the FASB issued ASU No. 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The ASU addresses how entities should account for costs associated with implementing a cloud computing arrangement that is considered a service contract. Per the amendments of the ASU, implementation costs incurred in a cloud computing arrangement that is a service contract should be accounted for in the same manner as implementation costs incurred to develop or obtain software for internal use as prescribed by guidance in ASC 350-40. The ASU requires that implementation costs incurred in a cloud computing arrangement be capitalized rather than expensed. Further, the ASU specifies the method for the amortization of costs incurred during implementation, and the manner in which the unamortized portion of these capitalized implementation costs should be evaluated for impairment. The ASU also provides guidance on how to present such implementation costs in the financial statements and also creates additional disclosure requirements. The amendments are effective for fiscal years beginning after December 15, 2019. The amendments in this ASU can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Our adoption of ASU No. 2018-15 effective January 1, 2020 on a prospective basis did not have a material impact on our condensed consolidated financial condition and results of operations. In October 2018, the FASB issued ASU No. 2018-17, "Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities ("VIEs")." The standard reduces the cost and complexity of financial reporting associated with VIEs. The new standard amends the guidance for determining whether a decision-making fee is a VIE. The amendments require organizations to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety as currently required in U.S. Generally Accepted Accounting Principles ("GAAP"). The amendments of this ASU are effective for fiscal years beginning after December 15, 2019. Our adoption of ASU No. 2018-17 effective January 1, 2020 did not have an impact on our condensed consolidated financial condition and results of operations. In November 2018, the FASB issued ASU No. 2018-18, "Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606." The ASU clarifies the interaction between the guidance for certain collaborative arrangements and ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," which we adopted January 1, 2018. The amendments of the ASU provide guidance on how to assess whether certain transactions between collaborative arrangement participants should be accounted for within ASU No. 2014-09. The ASU also provides more comparability in the presentation of revenue for certain transactions between collaborative arrangement participants. Parts of the collaborative arrangement that are not in the purview of the revenue recognition standard should be presented separately. The amendments are effective for fiscal years beginning after December 15, 2019. Our adoption of ASU No. 2018-18 effective January 1, 2020 did not have an impact on our condensed consolidated financial condition and results of operations. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The ASU intends to simplify various aspects related to accounting for income taxes and removes certain exceptions to the general principles in the standard. Additionally, the ASU clarifies and amends existing guidance to improve consistent application of its requirements. We early adopted ASU No. 2019-12 effective January 1, 2020 on a prospective basis and the adoption did not have an impact on our condensed consolidated financial condition and results of operations. Pronouncements Not Yet Implemented In August 2018, the FASB issued ASU No. 2018-14, "Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans." The ASU amends the disclosure requirements by adding, clarifying, or removing certain disclosures for sponsor defined benefit pension or other postretirement plans. The amendments are effective for fiscal years ending after December 15, 2020 and the amendments should be applied retrospectively to all periods presented. We are currently evaluating the impact of ASU No. 2018-14 and we anticipate that our adoption of this ASU will not have an impact on our disclosures. In March of 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of The Effects of Reference Rate Reform on Financial Reporting." The ASU provides guidance designed to enable the process for migrating away from reference rates such as the London Interbank Offered Rate ("LIBOR") and others to new reference rates. Further, the amendments of the ASU provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The amendments are effective as of March 12, 2020 through December 31, 2022 and should be applied prospectively to all periods presented. We have evaluated the impact of ASU No. 2020-04 and we anticipate that our adoption of this ASU will not have an impact on our condensed consolidated financial condition and results of operations. |
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 associa |
Revision to Previously Report_2
Revision to Previously Reported Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Adjustments | The following table presents the impact of correcting the errors previously discussed on the affected line items of our condensed consolidated balance sheet as of December 31, 2019: December 31, 2019 (Amounts in thousands, except par value) As Reported Adjustments As Revised Prepaid expenses and other $ 105,101 $ 1,377 $ 106,478 Total current assets 2,505,370 1,377 2,506,747 Property, plant and equipment, net of accumulated depreciation (1) 572,175 (8,611) 563,564 Other assets, net of allowance for expected credit losses (2) 227,185 25,869 253,054 Total assets 4,919,642 18,635 4,938,277 Contract liabilities (3) 216,541 4,554 221,095 Total current liabilities 1,112,888 4,554 1,117,442 Retirement obligations and other liabilities (4) 473,295 57,699 530,994 Retained earnings (5) 3,695,862 (43,618) 3,652,244 Total Flowserve Corporation shareholders’ equity 1,790,357 (43,618) 1,746,739 Total equity 1,815,959 (43,618) 1,772,341 Total liabilities and equity $ 4,919,642 $ 18,635 $ 4,938,277 _______________________________________ (1) Adjustment related to the misclassification of Software as a Service arrangements as property, plant and equipment rather than other assets, net, as prescribed by ASU 2018-15. (2) Adjustment related to the associated receivables for expected insurance proceeds for asbestos settlements and defense costs. (3) Adjustment related to one of our sites for correction in contract position caused by errors in estimated costs under the over time revenue recognition model. (4) Adjustment primarily relates to IBNR reserves associated with unasserted asbestos claims. (5) The adjustments to retained earnings represents the cumulative effect of the immaterial errors that were corrected in periods prior to and through December 31, 2019. The following table presents the impact of correcting the errors previously discussed on the affected line items of our condensed consolidated statement of income for the three months ended September 30, 2019: (Amounts in thousands, except per share data) Three Months Ended September 30, 2019 As Reported Adjustments As Revised Sales $ 996,544 $ (835) $ 995,709 Gross profit 333,688 (835) 332,853 Selling, general and administrative expense (1) (226,216) (4,146) (230,362) Operating income 109,559 (4,981) 104,578 Other income (expense), net (2) (1,622) (6,855) (8,477) Earnings before income taxes 96,209 (11,836) 84,373 Provision for income taxes (3) (25,646) 3,236 (22,410) Net earnings, including noncontrolling interests 70,563 (8,600) 61,963 Net earnings attributable to Flowserve Corporation $ 68,442 (8,600) $ 59,842 Net earnings per share attributable to Flowserve Corporation common shareholders: Basic $ 0.52 $ (0.06) $ 0.46 Diluted 0.52 (0.07) 0.45 _______________________________________ (1) Adjustment primarily relate to asbestos settlement and defense costs for related legal fees. (2) Adjustment related to our Argentinian subsidiary's use of an incorrect exchange rate in connection with a change to using the U.S. dollar as the functional currency. (3) Adjustment related to tax impacts of the matters described in notes (1) and (2), above. The following table presents the impact of correcting the errors previously discussed on the affected line items of our condensed consolidated statement of income for the nine months ended September 30, 2019: (Amounts in thousands, except per share data) Nine Months Ended September 30, 2019 As Reported Adjustments As Revised Sales (1) $ 2,876,679 (5,162) $ 2,871,517 Cost of sales (1,930,881) (875) (1,931,756) Gross profit 945,798 (6,037) 939,761 Selling, general and administrative expense (2) (655,046) (10,579) (665,625) Operating income 298,809 (16,616) 282,193 Other income (expense), net (3) (8,098) (7,055) (15,153) Earnings before income taxes 255,180 (23,671) 231,509 Provision for income taxes (4) (64,646) 6,039 (58,607) Net earnings, including noncontrolling interests 190,534 (17,632) 172,902 Net earnings attributable to Flowserve Corporation $ 183,875 (17,632) $ 166,243 Net earnings per share attributable to Flowserve Corporation common shareholders: Basic $ 1.40 $ (0.13) $ 1.27 Diluted 1.40 (0.14) 1.26 _______________________________________ (1) Adjustment related to one of our sites related to errors in estimated costs under the over time revenue recognition model. (2) Adjustment primarily relate to asbestos settlement and defense costs from insurance coverage and expense for related legal fees and broad-based annual incentive compensation. (3) Adjustment related to our Argentinian subsidiary's use of an incorrect exchange rate in connection with a change to using the U.S. dollar as the functional currency. (4) Adjustment related to tax impacts of the matters described in notes (1), (2) and (3), above. Nine Months Ended September 30, 2019 (Amounts in thousands) As Reported Adjustments As Revised Net cash flows provided (used) by operating activities (1) $ 143,991 $ (768) $ 143,223 Net cash flows provided (used) by investing activities (1) (3,851) (652) (4,503) Cash and cash equivalents at end of period (1) 547,270 (1,421) 545,849 _______________________________________ (1) Primarily related to adjustments resulting from the misclassification of Software as a Service arrangements as property, plant and equipment rather than other assets, net, as prescribed by ASU 2018-15, and a djustments related to our international operations’ exposure to fluctuations in foreign currency exchange rates, resulting from our Argentinian subsidiary's change in using the U.S. dollar as our functional currency in Argentina |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents our customer revenues disaggregated by revenue source: Three Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Total Original Equipment $ 280,951 $ 198,472 $ 479,423 Aftermarket 388,584 56,294 444,878 $ 669,535 $ 254,766 $ 924,301 Three Months Ended September 30, 2019 FPD FCD Total Original Equipment $ 256,664 $ 251,447 $ 508,111 Aftermarket 426,134 61,464 487,598 $ 682,798 $ 312,911 $ 995,709 Nine Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Total Original Equipment $ 805,150 $ 588,448 $ 1,393,598 Aftermarket 1,173,065 176,163 1,349,228 $ 1,978,215 $ 764,611 $ 2,742,826 Nine Months Ended September 30, 2019 FPD FCD Total Original Equipment $ 706,092 $ 710,144 $ 1,416,236 Aftermarket 1,259,431 195,850 1,455,281 $ 1,965,523 $ 905,994 $ 2,871,517 Our customer sales are diversified geographically. The following table presents our revenues disaggregated by geography, based on the shipping addresses of our customers: Three Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Total North America(1) $ 245,282 $ 96,435 $ 341,717 Latin America(1) 47,346 6,065 53,411 Middle East and Africa 83,330 29,045 112,375 Asia Pacific 151,227 66,836 218,063 Europe 142,350 56,385 198,735 $ 669,535 $ 254,766 $ 924,301 Three Months Ended September 30, 2019 FPD FCD Total North America(1) $ 279,583 $ 133,881 $ 413,464 Latin America(1) 51,338 7,682 59,020 Middle East and Africa 87,982 23,721 111,703 Asia Pacific 129,047 85,952 214,999 Europe 134,848 61,675 196,523 $ 682,798 $ 312,911 $ 995,709 Nine Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Total North America (1) $ 782,403 $ 326,271 $ 1,108,674 Latin America(1) 136,443 18,480 154,923 Middle East and Africa 277,231 77,404 354,635 Asia Pacific 391,796 185,946 577,742 Europe 390,342 156,510 546,852 $ 1,978,215 $ 764,611 $ 2,742,826 Nine Months Ended September 30, 2019 FPD FCD Total North America (1) $ 797,092 $ 401,921 $ 1,199,013 Latin America(1) 134,716 23,574 158,290 Middle East and Africa 249,694 69,484 319,178 Asia Pacific 367,204 223,864 591,068 Europe 416,817 187,151 603,968 $ 1,965,523 $ 905,994 $ 2,871,517 __________________________________ (1) North America represents the United States and Canada; Latin America includes Mexico. |
Contract liabilities | The following tables present beginning and ending balances of contract assets and contract liabilities, current and long-term, for the nine months ended September 30, 2020 and 2019: (Amounts in thousands) Contract Assets, net (Current) Long-term Contract Assets, net(1) Contract Liabilities (Current) Long-term Contract Liabilities(2) Beginning balance, January 1, 2020 $ 272,914 9,280 $ 221,095 $ 1,652 Revenue recognized that was included in contract liabilities at the beginning of the period — — (159,376) (1,198) Revenue recognized in the period in excess of billings 654,967 — — — Billings arising during the period in excess of revenue recognized — — 137,986 309 Amounts transferred from contract assets to receivables (606,564) 191 — — Currency effects and other, net (11,187) (6,585) (1,325) 15 Ending balance, September 30, 2020 $ 310,130 $ 2,886 $ 198,380 $ 778 (Amounts in thousands) Contract Assets, net (Current) Long-term Contract Assets, net(1) Contract Liabilities (Current) Long-term Contract Liabilities(2) Beginning balance, January 1, 2019 $ 229,297 $ 10,967 $ 201,702 $ 1,370 Revenue recognized that was included in contract liabilities at the beginning of the period — — (129,265) — Revenue recognized in the period in excess of billings 584,784 — — — Billings arising during the period in excess of revenue recognized — — 148,552 — Amounts transferred from contract assets to receivables (544,533) (3,414) — — Currency effects and other, net (11,249) 539 3,254 248 Ending balance, September 30, 2019 $ 258,299 $ 8,092 $ 224,243 $ 1,618 _____________________________________ (1) Included in other assets, net. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Summary of Other Lease Information | Other information related to our leases is as follows: September 30, December 31, (Amounts in thousands) 2020 2019 Operating Leases: ROU assets recorded under operating leases $ 227,437 $ 220,865 Accumulated amortization associated with operating leases (60,587) (34,647) Total operating leases ROU assets, net $ 166,850 $ 186,218 Liabilities recorded under operating leases (current) $ 34,634 $ 36,108 Liabilities recorded under operating leases (non-current) 133,348 151,523 Total operating leases liabilities $ 167,982 $ 187,631 Finance Leases: ROU assets recorded under finance leases $ 26,942 $ 19,606 Accumulated depreciation associated with finance leases (8,443) (7,551) Total finance leases ROU assets, net(1) $ 18,499 $ 12,055 Total finance leases liabilities(2) $ 18,540 $ 11,788 The costs components of operating and finance leases are as follows: Three Months Ended September 30, Nine Months Ended September 30, (Amounts in thousands) 2020 2019 2020 2019 Operating Lease Costs: Fixed lease expense(3) $ 14,114 $ 13,858 $ 42,655 $ 43,864 Variable lease expense(3) 1,569 1,119 5,260 3,999 Total operating lease expense $ 15,683 $ 14,977 $ 47,915 $ 47,863 Finance Lease Costs: Depreciation of finance lease ROU assets(3) $ 1,448 $ 993 $ 4,051 $ 3,280 Interest on lease liabilities(4) 181 102 472 253 Total finance lease expense $ 1,629 $ 1,095 $ 4,523 $ 3,533 _____________________ (1) Included in property, plant and equipment, net of accumulated depreciation. (2) Included in debt due within one year and long-term debt due after one year, accordingly. (3) Included in cost of sales and selling, general and administrative expense, accordingly. (4) Included in interest expense. |
Schedule of Supplemental Cash Flows Information | Supplemental cash flows information as of and for the nine months ended : September 30, (Amounts in thousands, except lease term and discount rate) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases(1) $ 51,918 $ 39,642 Financing cash flows from finance leases(2) 3,408 4,177 ROU assets obtained in exchange for lease obligations: Operating leases $ 16,327 15,739 Finance leases 12,278 10,184 Weighted average remaining lease term (in years) Operating leases 8 years 9 years Finance leases 7 years 4 years Weighted average discount rate (percent) Operating leases 4.4 % 4.6 % Finance leases 3.5 % 3.7 % _____________________ (1) Included in our condensed consolidated statement of cash flows, operating activities, prepaid expenses and other assets, net and retirement obligations and other. (2) Included in our condensed consolidated statement of cash flows, financing activities, payments under other financing arrangements. |
Schedule of Future Finance Lease Payments | Future undiscounted lease payments under operating and finance leases as of September 30, 2020 were as follows (amounts in thousands): Year ending December 31, Operating Finance Leases 2020 (excluding the nine months ended September 30, 2020) $ 10,527 $ 1,437 2021 37,135 5,281 2022 30,869 4,267 2023 24,494 2,775 2024 18,889 1,353 Thereafter 79,176 6,064 Total future minimum lease payments $ 201,090 $ 21,177 Less: Imputed interest (33,108) (2,637) Total $ 167,982 $ 18,540 Other current liabilities $ 34,634 $ — Operating lease liabilities 133,348 — Debt due within one year — 5,626 Long-term debt due after one year — 12,914 Total $ 167,982 $ 18,540 |
Schedule of Future Operating Lease Payments | Future undiscounted lease payments under operating and finance leases as of September 30, 2020 were as follows (amounts in thousands): Year ending December 31, Operating Finance Leases 2020 (excluding the nine months ended September 30, 2020) $ 10,527 $ 1,437 2021 37,135 5,281 2022 30,869 4,267 2023 24,494 2,775 2024 18,889 1,353 Thereafter 79,176 6,064 Total future minimum lease payments $ 201,090 $ 21,177 Less: Imputed interest (33,108) (2,637) Total $ 167,982 $ 18,540 Other current liabilities $ 34,634 $ — Operating lease liabilities 133,348 — Debt due within one year — 5,626 Long-term debt due after one year — 12,914 Total $ 167,982 $ 18,540 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Information Regarding Restricted Shares | The following table summarizes information regarding Restricted Shares: Nine Months Ended September 30, 2020 Shares Weighted Average Number of unvested shares: Outstanding - January 1, 2020 1,690,600 $ 46.71 Granted 706,340 46.92 Vested (576,441) 44.99 Forfeited (355,922) 49.32 Outstanding as of September 30, 2020 1,464,577 $ 46.86 |
Derivative Instruments and He_2
Derivative Instruments and Hedges (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Fair Value of Forward Exchange Contracts not Designated as Hedging Instruments | The fair values of foreign exchange contracts are summarized below: September 30, December 31, (Amounts in thousands) 2020 2019 Current derivative assets $ 1,082 $ 892 Noncurrent derivative assets 65 15 Current derivative liabilities 682 3,418 Noncurrent derivative liabilities 4 8 |
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 September 30, Nine Months Ended September 30, (Amounts in thousands) 2020 2019 2020 2019 Losses recognized in income $ (2,293) $ (1,817) $ (2,354) $ (4,511) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt Including Capital Lease Obligations | Debt, including finance lease obligations, net of discounts and debt issuance costs, consisted of: September 30, December 31, (Amounts in thousands, except percentages) 2020 2019 1.25% EUR Senior Notes due March 17, 2022, net of unamortized discount and debt issuance costs of $1,239 and $2,653 393,403 $ 557,847 3.50% USD Senior Notes due September 15, 2022, net of unamortized discount and debt issuance costs of $1,410 and $1,924 498,590 498,076 4.00% USD Senior Notes due November 15, 2023, net of unamortized discount and debt issuance costs of $1,455 and $1,777 298,545 298,223 3.50% USD Senior Notes due October 1, 2030, net of unamortized discount and debt issuance costs of $6,277 as of September 30, 2020 493,723 — Finance lease obligations and other borrowings 25,402 23,103 Debt and finance lease obligations 1,709,663 1,377,249 Less amounts due within one year 8,581 11,272 Total debt due after one year $ 1,701,082 $ 1,365,977 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Net Components of Inventory | Inventories, net consisted of the following: September 30, December 31, (Amounts in thousands) 2020 2019 Raw materials $ 345,419 $ 328,080 Work in process 246,902 192,993 Finished goods 207,239 218,408 Less: Excess and obsolete reserve (85,071) (78,644) Inventories, net $ 714,489 $ 660,837 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30, (Amounts in thousands, except per share data) 2020 2019 Net earnings of Flowserve Corporation $ 51,003 $ 59,842 Dividends on restricted shares not expected to vest — — Earnings attributable to common and participating shareholders $ 51,003 $ 59,842 Weighted average shares: Common stock 130,292 131,122 Participating securities 21 23 Denominator for basic earnings per common share 130,313 131,145 Effect of potentially dilutive securities 587 701 Denominator for diluted earnings per common share 130,900 131,846 Earnings per common share: Basic $ 0.39 $ 0.46 Diluted 0.39 0.45 Nine Months Ended September 30, (Amounts in thousands, except per share data) 2020 2019 Net earnings of Flowserve Corporation $ 59,433 $ 166,243 Dividends on restricted shares not expected to vest — — Earnings attributable to common and participating shareholders $ 59,433 $ 166,243 Weighted average shares: Common stock 130,390 131,070 Participating securities 23 22 Denominator for basic earnings per common share 130,413 131,092 Effect of potentially dilutive securities 655 605 Denominator for diluted earnings per common share 131,068 131,697 Earnings per common share: Basic $ 0.46 $ 1.27 Diluted 0.45 1.26 |
Legal Matters and Contingenci_2
Legal Matters and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Loss Contingencies by Contingency | Activity related to asbestos claims during the periods indicated was as follows: Three Months Ended Nine Months Year Ended September 30, September 30, December 31, 2020 2019 2020 2019 2019 Beginning claims(1) 8,100 8,315 8,345 8,619 8,619 New claims 635 656 1,672 1,671 2,314 Resolved claims (398) (699) (1,706) (2,027) (2,601) Other(2) 9 5 35 14 13 Ending claims(1) 8,346 8,277 8,346 8,277 8,345 ____________________ (1) All claims data in each period excludes inactive claims, as the Company considers it unlikely that inactive cases will be pursued further by the respective plaintiffs. A claim is classified as inactive either due to inactivity over a period of time or if designated as inactive by the applicable court. (2) Represents the net change in claims as a result of the reclassification of active cases as inactive and inactive cases as active during the period indicated. Cases moved from active to inactive status are removed from the claims count without being accounted for as a "Resolved claim", and cases moved from inactive status to active status are added back to the claims count without being accounted for as a “New claim”. |
Retirement and Postretirement_2
Retirement and Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [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 September 30, 2020 and 2019 were as follows: U.S. Non-U.S. Postretirement (Amounts in millions) 2020 2019 2020 2019 2020 2019 Service cost $ 6.4 $ 5.9 $ 2.0 $ 1.3 $ — $ — Interest cost 3.8 4.5 1.8 2.0 0.1 0.2 Expected return on plan assets (6.4) (6.4) (1.4) (1.7) — — Amortization of prior service cost — — 0.1 0.1 — — Amortization of unrecognized net loss (gain) 1.7 1.0 1.2 0.6 — — Net periodic cost recognized $ 5.5 $ 5.0 $ 3.7 $ 2.3 $ 0.1 $ 0.2 Components of the net periodic cost for retirement and postretirement benefits for the nine months ended September 30, 2020 and 2019 were as follows: U.S. Non-U.S. Postretirement (Amounts in millions) 2020 2019 2020 2019 2020 2019 Service cost $ 19.4 $ 17.4 $ 5.4 $ 4.2 $ — $ — Interest cost 11.3 13.2 5.0 6.5 0.4 0.5 Expected return on plan assets (19.3) (19.2) (3.8) (5.5) — — Amortization of prior service cost 0.1 0.1 0.2 0.2 0.1 0.1 Amortization of unrecognized net loss (gain) 5.2 2.8 3.3 2.1 (0.1) (0.1) Net periodic cost recognized $ 16.7 $ 14.3 $ 10.1 $ 7.5 $ 0.4 $ 0.5 |
Statement of Shareholders' Equi
Statement of Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Summary of Dividends Declared | Dividends declared per share were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Dividends declared per share $ 0.20 $ 0.19 $ 0.60 $ 0.57 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30, 2020 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments Eliminations and All Other Consolidated Total Sales to external customers $ 669,535 $ 254,766 $ 924,301 $ — $ 924,301 Intersegment sales 673 455 1,128 (1,128) — Segment operating income 86,660 30,752 117,412 (30,090) 87,322 Three Months Ended September 30, 2019 FPD FCD Subtotal–Reportable Segments Eliminations and All Other Consolidated Total Sales to external customers $ 682,798 $ 312,911 $ 995,709 $ — $ 995,709 Intersegment sales (52) 1,066 1,014 (1,014) — Segment operating income 85,461 49,243 134,704 (30,126) 104,578 Nine Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments Eliminations and All Other Consolidated Total Sales to external customers $ 1,978,215 $ 764,611 $ 2,742,826 $ — $ 2,742,826 Intersegment sales 1,710 2,280 3,990 (3,990) — Segment operating income 186,740 74,160 260,900 (105,923) 154,977 Nine Months Ended September 30, 2019 FPD FCD Subtotal–Reportable Segments Eliminations and All Other Consolidated Total Sales to external customers $ 1,965,523 $ 905,994 $ 2,871,517 $ — $ 2,871,517 Intersegment sales 1,249 2,716 3,965 (3,965) — Segment operating income 242,085 134,689 376,774 (94,581) 282,193 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30, 2020 and 2019: 2020 2019 (Amounts in thousands) Foreign currency translation items(1) Pension and other post-retirement effects Cash flow hedging activity Total(1) Foreign currency translation items(1) Pension and other post-retirement effects Cash flow hedging activity Total(1) Balance - July 1 $ (507,633) $ (129,094) $ (573) $ (637,300) $ (443,828) $ (117,244) $ (753) $ (561,825) Other comprehensive income (loss) before reclassifications 25,204 (3,647) 41 21,598 (30,600) 2,184 44 (28,372) Amounts reclassified from AOCL — 2,671 — 2,671 — 1,464 — 1,464 Net current-period other comprehensive income (loss) 25,204 (976) 41 24,269 (30,600) 3,648 44 (26,908) Balance - September 30 $ (482,429) $ (130,070) $ (532) $ (613,031) $ (474,428) $ (113,596) $ (709) $ (588,733) ________________________________ The following table presents the changes in AOCL, net of tax for the nine months ended September 30, 2020 and 2019: 2020 2019 (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 $ (441,407) $ (137,161) $ (671) $ (579,239) $ (447,925) $ (120,647) $ (858) $ (569,430) Other comprehensive (loss) income before reclassifications (41,022) (531) 139 (41,414) (26,503) 2,576 149 (23,778) Amounts reclassified from AOCL — 7,622 — 7,622 — 4,475 — 4,475 Net current-period other comprehensive (loss) income (41,022) 7,091 139 (33,792) (26,503) 7,051 149 (19,303) Balance - September 30 $ (482,429) $ (130,070) $ (532) $ (613,031) $ (474,428) $ (113,596) $ (709) $ (588,733) _________________________________ (1) Includes foreign currency translation adjustments attributable to noncontrolling interests of $5.1 million and $4.5 million at January 1, 2020 and 2019, respectively, an d $5.8 million and $5.1 million at September 30, 2020 and 2019, respectively. Includes net investment hedge losses of $24.6 million a nd $5.9 million , net of deferred taxes, for the nine months ended September 30, 2020 and 2019, |
Reclassifications out of Accumulated Other Comprehensive Income (Loss) | The following table presents the reclassifications out of AOCL: Three Months Ended September 30, (Amounts in thousands) Affected line item in the statement of income 2020(1) 2019(1) Pension and other postretirement effects Amortization of actuarial losses(2) Other income (expense), net $ (2,942) $ (1,564) Prior service costs(2) Other income (expense), net (150) (131) Tax benefit 421 231 Net of tax $ (2,671) $ (1,464) __________________________________ (1) Amounts in parentheses indicate decreases to income. None of the reclassified amounts have a noncontrolling interest component. (2) These AOCL components are included in the computation of net periodic pension cost. See Note 12 for additional details. The following table presents the reclassifications out of AOCL: Nine Months Ended September 30, (Amounts in thousands) Affected line item in the statement of income 2020(1) 2019(1) Pension and other postretirement effects Amortization of actuarial losses(2) Other income (expense), net $ (8,456) $ (4,727) Prior service costs(2) Other income (expense), net (429) (408) Tax benefit 1,263 660 Net of tax $ (7,622) $ (4,475) ________________________________ (1) Amounts in parentheses indicate decreases to income. None of the reclassified amounts have a noncontrolling interest component. |
Realignment and Transformatio_2
Realignment and Transformation Programs (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following is a summary of total charges, net of adjustments, related to our realignment activities and Flowserve 2.0 Transformation charges. Realignment charges incurred in 2020 related to our 2020 Realignment Program and realignment charges incurred in 2019 related to our 2015 Realignment Programs: Three Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments All Other Consolidated Total Realignment Charges Restructuring Charges COS $ 5,469 $ 590 $ 6,059 $ — $ 6,059 SG&A (10) (2) (12) — (12) $ 5,459 $ 588 $ 6,047 $ — $ 6,047 Non-Restructuring Charges COS $ 1,210 $ (1,366) $ (156) $ (245) $ (401) SG&A 1,097 75 1,172 613 1,785 $ 2,307 $ (1,291) $ 1,016 $ 368 $ 1,384 Total Realignment Charges COS $ 6,679 $ (776) $ 5,903 $ (245) $ 5,658 SG&A 1,087 73 1,160 613 $ 1,773 Total $ 7,766 $ (703) $ 7,063 $ 368 $ 7,431 Transformation Charges SG&A $ — $ — $ — $ 4,746 $ 4,746 $ — $ — $ — $ 4,746 $ 4,746 Total Realignment and Transformation Charges COS $ 6,679 $ (776) $ 5,903 $ (245) $ 5,658 SG&A 1,087 73 1,160 5,359 6,519 Total $ 7,766 $ (703) $ 7,063 $ 5,114 $ 12,177 Three Months Ended September 30, 2019 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments All Other Consolidated Total Realignment Charges Restructuring Charges COS $ 197 $ 811 $ 1,008 $ — $ 1,008 SG&A 37 — 37 — 37 $ 234 $ 811 $ 1,045 $ — $ 1,045 Non-Restructuring Charges COS $ 2,409 $ 3 $ 2,412 $ — $ 2,412 SG&A 343 — 343 994 1,337 $ 2,752 $ 3 $ 2,755 $ 994 $ 3,749 Total Realignment Charges COS $ 2,606 $ 814 $ 3,420 $ — $ 3,420 SG&A 380 — 380 994 $ 1,374 Total $ 2,986 $ 814 $ 3,800 $ 994 $ 4,794 Transformation Charges SG&A $ — $ — $ — $ 5,058 $ 5,058 $ — $ — $ — $ 5,058 $ 5,058 Total Realignment and Transformation Charges COS $ 2,606 $ 814 $ 3,420 $ — $ 3,420 SG&A 380 $ — 380 6,052 6,432 Total $ 2,986 $ 814 $ 3,800 $ 6,052 $ 9,852 Nine Months Ended September 30, 2020 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments All Other Consolidated Total Realignment Charges Restructuring Charges COS $ 18,800 $ 318 $ 19,118 $ — $ 19,118 SG&A 221 (5) 216 — 216 $ 19,021 $ 313 $ 19,334 $ — $ 19,334 Non-Restructuring Charges COS $ 13,339 $ 7,876 $ 21,215 $ 303 $ 21,518 SG&A 10,899 4,459 15,358 16,107 31,465 $ 24,238 $ 12,335 $ 36,573 $ 16,410 $ 52,983 Total Realignment Charges COS $ 32,139 $ 8,194 $ 40,333 $ 303 $ 40,636 SG&A 11,120 4,454 15,574 16,107 31,681 Total $ 43,259 $ 12,648 $ 55,907 $ 16,410 $ 72,317 Transformation Charges SG&A — — — 16,007 16,007 $ — $ — $ — $ 16,007 $ 16,007 Total Realignment and Transformation Charges COS $ 32,139 $ 8,194 $ 40,333 $ 303 $ 40,636 SG&A 11,120 4,454 15,574 32,114 47,688 Total $ 43,259 $ 12,648 $ 55,907 $ 32,417 $ 88,324 Nine Months Ended September 30, 2019 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments All Other Consolidated Total Restructuring Charges COS $ 1,892 $ 1,291 $ 3,183 $ — $ 3,183 SG&A(1) (17,072) 413 (16,659) — (16,659) $ (15,180) $ 1,704 $ (13,476) $ — $ (13,476) Non-Restructuring Charges COS $ 9,531 $ 72 $ 9,603 $ — $ 9,603 SG&A 770 34 804 2,237 3,041 $ 10,301 $ 106 $ 10,407 $ 2,237 $ 12,644 Total Realignment Charges COS $ 11,423 $ 1,363 $ 12,786 $ — $ 12,786 SG&A (16,302) 447 (15,855) 2,237 (13,618) Total $ (4,879) $ 1,810 $ (3,069) $ 2,237 $ (832) Transformation Charges SG&A — — — 21,044 21,044 $ — $ — $ — $ 21,044 $ 21,044 Total Realignment and Transformation Charges COS $ 11,423 $ 1,363 $ 12,786 $ — $ 12,786 SG&A (16,302) 447 (15,855) 23,281 7,426 Total $ (4,879) $ 1,810 $ (3,069) $ 23,281 $ 20,212 _______________________________ (1) Primarily consists of gains from the sales of non-strategic manufacturing facilities that were included in our 2015 Realignment Programs. The following is a summary of total inception to date charges, net of adjustments, related to the 2020 Realignment Program initiated in 2020: Inception to Date (Amounts in thousands) FPD FCD Subtotal–Reportable Segments All Other Consolidated Total Realignment Charges Restructuring Charges COS $ 17,119 $ 423 $ 17,542 $ — $ 17,542 SG&A 116 22 138 — 138 $ 17,235 $ 445 $ 17,680 $ — $ 17,680 Non-Restructuring Charges COS $ 13,213 $ 1,551 $ 14,764 $ 303 $ 15,067 SG&A 10,413 4,387 14,800 15,465 30,265 $ 23,626 $ 5,938 $ 29,564 $ 15,768 $ 45,332 Total Realignment Charges COS $ 30,332 $ 1,974 $ 32,306 $ 303 $ 32,609 SG&A 10,529 4,409 14,938 15,465 30,403 Total $ 40,861 $ 6,383 $ 47,244 $ 15,768 $ 63,012 |
Schedule of Restructuring Reserve by Type of Cost | The following is a summary of restructuring charges, net of adjustments, for our restructuring activities. Restructuring charges incurred in 2020 related to our 2020 Realignment Program and restructuring charges incurred in 2019 related to our 2015 Realignment Programs: Three Months Ended September 30, 2020 (Amounts in thousands) Severance Contract Termination Asset Write-Downs Other Total COS $ 4,704 $ — $ 331 $ 1,024 $ 6,059 SG&A (16) — 3 1 (12) Total $ 4,688 $ — $ 334 $ 1,025 $ 6,047 Three Months Ended September 30, 2019 (Amounts in thousands) Severance Contract Termination Asset Write-Downs Other Total COS $ (729) $ 3 $ 19 $ 1,715 $ 1,008 SG&A (9) — 5 41 37 Total $ (738) $ 3 $ 24 $ 1,756 $ 1,045 Nine Months Ended September 30, 2020 (Amounts in thousands) Severance Contract Termination Asset Write-Downs Other Total COS $ 16,959 $ — $ 1,322 $ 837 $ 19,118 SG&A 228 25 (37) 216 Total $ 17,187 $ — $ 1,347 $ 800 $ 19,334 Nine Months Ended September 30, 2019 (Amounts in thousands) Severance Contract Termination Asset Write-Downs/ (Gains) Other Total COS $ 1,099 $ 51 $ (799) $ 2,832 $ 3,183 SG&A(1) 1,609 — (18,496) 228 (16,659) Total $ 2,708 $ 51 $ (19,295) $ 3,060 $ (13,476) _______________________________ (1) Primarily consists of gains from the sales of non-strategic manufacturing facilities that were included in our 2015 Realignment Programs. The following is a summary of total inception to date restructuring charges, net of adjustments, related to our 2020 Realignment Program initiated in 2020: Inception to Date (Amounts in thousands) Severance Contract Termination Asset Write-Downs Other Total COS $ 15,276 $ — $ 1,325 $ 941 $ 17,542 SG&A 110 — 27 1 138 Total $ 15,386 $ — $ 1,352 $ 942 $ 17,680 The following represents the activity, primarily severance charges from reductions in force, related to the restructuring reserves for the nine months ended September 30, 2020 and 2019: (Amounts in thousands) 2020 2019 Balance at January 1 $ 6,703 $ 11,927 Charges, net of adjustments 17,986 5,817 Cash expenditures (4,772) (8,196) Other non-cash adjustments, including currency 425 (461) Balance at September 30 $ 20,342 $ 9,087 |
Basis of Presentation and Acc_3
Basis of Presentation and Accounting Policies (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Accounting Standards Update | us-gaap:AccountingStandardsUpdate201613Member | |
Retained earnings | $ 3,625,291 | $ 3,652,244 |
Allowance for doubtful accounts | 76,061 | 53,412 |
Increase to allowance for credit loss | 15,800 | |
Accounts receivable, noncurrent | 108,200 | 118,500 |
Allowance for credit loss, noncurrent | 97,900 | 101,400 |
ASU No. 2016-13 - Measurement of Credit Losses on Financial Instruments (Topic 326) | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Retained earnings | $ 7,300 | |
Allowance for doubtful accounts | $ 6,900 |
Revision to Previously Report_3
Revision to Previously Reported Financial Information - Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Prepaid expenses and other | $ 109,451 | $ 106,478 | ||||
Total current assets | 2,806,145 | 2,506,747 | ||||
Property, plant and equipment, net of accumulated depreciation | 551,011 | 563,564 | ||||
Other assets, net of allowance for expected credit losses | 241,509 | 253,054 | ||||
Total assets | 5,173,576 | 4,938,277 | ||||
Contract liabilities | 198,380 | 221,095 | $ 224,243 | |||
Total current liabilities | 1,093,582 | 1,117,442 | ||||
Retirement obligations and other liabilities | 541,721 | 530,994 | ||||
Retained earnings | 3,625,291 | 3,652,244 | ||||
Total Flowserve Corporation shareholders’ equity | 1,673,421 | 1,746,739 | ||||
Total equity | 1,703,843 | $ 1,647,172 | 1,772,341 | $ 1,723,394 | $ 1,711,979 | $ 1,632,002 |
Total liabilities and equity | $ 5,173,576 | 4,938,277 | ||||
As Reported | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Prepaid expenses and other | 105,101 | |||||
Total current assets | 2,505,370 | |||||
Property, plant and equipment, net of accumulated depreciation | 572,175 | |||||
Other assets, net of allowance for expected credit losses | 227,185 | |||||
Total assets | 4,919,642 | |||||
Contract liabilities | 216,541 | |||||
Total current liabilities | 1,112,888 | |||||
Retirement obligations and other liabilities | 473,295 | |||||
Retained earnings | 3,695,862 | |||||
Total Flowserve Corporation shareholders’ equity | 1,790,357 | |||||
Total equity | 1,815,959 | |||||
Total liabilities and equity | 4,919,642 | |||||
Adjustments | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Prepaid expenses and other | 1,377 | |||||
Total current assets | 1,377 | |||||
Property, plant and equipment, net of accumulated depreciation | (8,611) | |||||
Other assets, net of allowance for expected credit losses | 25,869 | |||||
Total assets | 18,635 | |||||
Contract liabilities | 4,554 | |||||
Total current liabilities | 4,554 | |||||
Retirement obligations and other liabilities | 57,699 | |||||
Retained earnings | (43,618) | $ (37,800) | $ (28,800) | |||
Total Flowserve Corporation shareholders’ equity | (43,618) | |||||
Total equity | (43,618) | |||||
Total liabilities and equity | $ 18,635 |
Revision to Previously Report_4
Revision to Previously Reported Financial Information - Income Statement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Sales | $ 924,301 | $ 995,709 | $ 2,742,826 | $ 2,871,517 |
Cost of sales | (639,092) | (662,856) | (1,921,451) | (1,931,756) |
Gross profit | 285,209 | 332,853 | 821,375 | 939,761 |
Selling, general and administrative expense | (200,729) | (230,362) | (675,523) | (665,625) |
Operating income | 87,322 | 104,578 | 154,977 | 282,193 |
Other income (expense), net | (963) | (8,477) | 7,558 | (15,153) |
Earnings before income taxes | 72,322 | 84,373 | 125,498 | 231,509 |
Provision for income taxes | (18,672) | (22,410) | (59,175) | (58,607) |
Net earnings, including noncontrolling interests | 53,650 | 61,963 | 66,323 | 172,902 |
Net earnings of Flowserve Corporation | $ 51,003 | $ 59,842 | $ 59,433 | $ 166,243 |
Basic (in dollars per share) | $ 0.39 | $ 0.46 | $ 0.46 | $ 1.27 |
Diluted (in dollars per share) | $ 0.39 | $ 0.45 | $ 0.45 | $ 1.26 |
As Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Sales | $ 996,544 | $ 2,876,679 | ||
Cost of sales | (1,930,881) | |||
Gross profit | 333,688 | 945,798 | ||
Selling, general and administrative expense | (226,216) | (655,046) | ||
Operating income | 109,559 | 298,809 | ||
Other income (expense), net | (1,622) | (8,098) | ||
Earnings before income taxes | 96,209 | 255,180 | ||
Provision for income taxes | (25,646) | (64,646) | ||
Net earnings, including noncontrolling interests | 70,563 | 190,534 | ||
Net earnings of Flowserve Corporation | $ 68,442 | $ 183,875 | ||
Basic (in dollars per share) | $ 0.52 | $ 1.40 | ||
Diluted (in dollars per share) | $ 0.52 | $ 1.40 | ||
Adjustments | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Sales | $ (835) | $ (5,162) | ||
Cost of sales | (875) | |||
Gross profit | (835) | (6,037) | ||
Selling, general and administrative expense | (4,146) | (10,579) | ||
Operating income | (4,981) | (16,616) | ||
Other income (expense), net | (6,855) | (7,055) | ||
Earnings before income taxes | (11,836) | (23,671) | ||
Provision for income taxes | 3,236 | 6,039 | ||
Net earnings, including noncontrolling interests | (8,600) | (17,632) | ||
Net earnings of Flowserve Corporation | $ (8,600) | $ (17,632) | ||
Basic (in dollars per share) | $ (0.06) | $ (0.13) | ||
Diluted (in dollars per share) | $ (0.07) | $ (0.14) |
Revision to Previously Report_5
Revision to Previously Reported Financial Information - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Decrease to retained earnings | $ (3,625,291) | $ (3,652,244) | ||
Adjustments | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Decrease to retained earnings | $ 43,618 | $ 37,800 | $ 28,800 |
Revision to Previously Report_6
Revision to Previously Reported Financial Information - Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net cash flows provided (used) by operating activities | $ 115,629 | $ 143,223 | ||
Net cash flows provided (used) by investing activities | (34,160) | (4,503) | ||
Cash and cash equivalents | $ 921,178 | 545,849 | $ 670,980 | $ 619,683 |
As Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net cash flows provided (used) by operating activities | 143,991 | |||
Net cash flows provided (used) by investing activities | (3,851) | |||
Cash and cash equivalents | 547,270 | |||
Adjustments | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net cash flows provided (used) by operating activities | (768) | |||
Net cash flows provided (used) by investing activities | (652) | |||
Cash and cash equivalents | $ (1,421) |
Revenue Recognition (Narrative)
Revenue Recognition (Narrative) (Details) - segments | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Number of operating segments | 2 | |||
Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from products and services | 23.00% | 21.00% | 22.00% | 19.00% |
Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from products and services | 77.00% | 79.00% | 78.00% | 81.00% |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 924,301 | $ 995,709 | $ 2,742,826 | $ 2,871,517 |
Original Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 479,423 | 508,111 | 1,393,598 | 1,416,236 |
Aftermarket | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 444,878 | 487,598 | 1,349,228 | 1,455,281 |
FPD | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 669,535 | 682,798 | 1,978,215 | 1,965,523 |
FPD | Original Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 280,951 | 256,664 | 805,150 | 706,092 |
FPD | Aftermarket | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 388,584 | 426,134 | 1,173,065 | 1,259,431 |
FCD | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 254,766 | 312,911 | 764,611 | 905,994 |
FCD | Original Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 198,472 | 251,447 | 588,448 | 710,144 |
FCD | Aftermarket | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 56,294 | 61,464 | 176,163 | 195,850 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 341,717 | 413,464 | 1,108,674 | 1,199,013 |
North America | FPD | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 245,282 | 279,583 | 782,403 | 797,092 |
North America | FCD | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 96,435 | 133,881 | 326,271 | 401,921 |
Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 53,411 | 59,020 | 154,923 | 158,290 |
Latin America | FPD | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 47,346 | 51,338 | 136,443 | 134,716 |
Latin America | FCD | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 6,065 | 7,682 | 18,480 | 23,574 |
Middle East And Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 112,375 | 111,703 | 354,635 | 319,178 |
Middle East And Africa | FPD | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 83,330 | 87,982 | 277,231 | 249,694 |
Middle East And Africa | FCD | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 29,045 | 23,721 | 77,404 | 69,484 |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 218,063 | 214,999 | 577,742 | 591,068 |
Asia Pacific | FPD | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 151,227 | 129,047 | 391,796 | 367,204 |
Asia Pacific | FCD | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 66,836 | 85,952 | 185,946 | 223,864 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 198,735 | 196,523 | 546,852 | 603,968 |
Europe | FPD | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 142,350 | 134,848 | 390,342 | 416,817 |
Europe | FCD | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 56,385 | $ 61,675 | $ 156,510 | $ 187,151 |
Revenue Recognition (Performanc
Revenue Recognition (Performance obligations) (Details) $ in Millions | Sep. 30, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, amount | $ 435 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, amount | $ 130 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, amount | $ 305 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 1 year |
Revenue Recognition (Contract L
Revenue Recognition (Contract Liabilities) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Change In Contract With Customer, Asset And Liability [Roll Forward] | ||
Contract Assets, Beginning balance | $ 272,914 | |
Contract Liabilities, Current, Beginning balance | 221,095 | |
Revenue recognized that was included in contract liabilities at the beginning of the period | 22,468 | $ (26,641) |
Amounts transferred from contract assets to receivables | (37,328) | (35,607) |
Contract Assets, Ending balance | 310,130 | 258,299 |
Contract Liabilities, Current, Ending balance | 198,380 | 224,243 |
Short-term Contract with Customer | ||
Change In Contract With Customer, Asset And Liability [Roll Forward] | ||
Contract Assets, Beginning balance | 272,914 | 229,297 |
Revenue recognized that was included in contract liabilities at the beginning of the period | 0 | 0 |
Revenue recognized in the period in excess of billings | 654,967 | 584,784 |
Billings arising during the period in excess of revenue recognized | 0 | 0 |
Amounts transferred from contract assets to receivables | (606,564) | (544,533) |
Other contract asset, net | (11,187) | (11,249) |
Long-term Contract with Customer | ||
Change In Contract With Customer, Asset And Liability [Roll Forward] | ||
Contract Assets, Beginning balance | 9,280 | 10,967 |
Revenue recognized that was included in contract liabilities at the beginning of the period | 0 | 0 |
Revenue recognized in the period in excess of billings | 0 | 0 |
Billings arising during the period in excess of revenue recognized | 0 | 0 |
Amounts transferred from contract assets to receivables | 191 | (3,414) |
Other contract asset, net | (6,585) | 539 |
Contract Assets, Ending balance | 2,886 | 8,092 |
Short-term Contract with Customer, Liability | ||
Change In Contract With Customer, Asset And Liability [Roll Forward] | ||
Contract Liabilities, Current, Beginning balance | 221,095 | 201,702 |
Revenue recognized that was included in contract liabilities at the beginning of the period | (159,376) | (129,265) |
Revenue recognized in the period in excess of billings | 0 | 0 |
Billings arising during the period in excess of revenue recognized | 137,986 | 148,552 |
Amounts transferred from contract assets to receivables | 0 | 0 |
Other contract liability, net | (1,325) | 3,254 |
Long-term Contract With Customer, Liability | ||
Change In Contract With Customer, Asset And Liability [Roll Forward] | ||
Contract Liabilities, Noncurrent, Beginning balance | 1,652 | 1,370 |
Revenue recognized that was included in contract liabilities at the beginning of the period | (1,198) | 0 |
Revenue recognized in the period in excess of billings | 0 | 0 |
Billings arising during the period in excess of revenue recognized | 309 | 0 |
Amounts transferred from contract assets to receivables | 0 | 0 |
Other contract liability, net | 15 | 248 |
Contract Liabilities, Noncurrent, Ending balance | $ 778 | $ 1,618 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Lease payments, leases not yet commenced | $ 33.4 | $ 34.7 |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 33 years |
Leases (Other Information) (Det
Leases (Other Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Operating Leases: | |||||
ROU assets recorded under operating leases | $ 227,437 | $ 227,437 | $ 220,865 | ||
Accumulated amortization associated with operating leases | (60,587) | (60,587) | (34,647) | ||
Total operating leases ROU assets, net | 166,850 | 166,850 | 186,218 | ||
Operating lease liabilities | 34,634 | 34,634 | 36,108 | ||
Liabilities recorded under operating leases (non-current) | 133,348 | 133,348 | 151,523 | ||
Total operating leases liabilities | 167,982 | 167,982 | 187,631 | ||
Operating lease expense | 14,114 | $ 13,858 | 42,655 | $ 43,864 | |
Variable lease expense | 1,569 | 1,119 | 5,260 | 3,999 | |
Total operating lease expense | 15,683 | 14,977 | 47,915 | 47,863 | |
Finance Leases: | |||||
ROU assets recorded under finance leases | 26,942 | 26,942 | 19,606 | ||
Accumulated depreciation associated with finance leases | (8,443) | (8,443) | (7,551) | ||
Total finance leases ROU assets, net | 18,499 | 18,499 | 12,055 | ||
Total finance lease liabilities | 18,540 | 18,540 | $ 11,788 | ||
Amortization of finance lease ROU assets | 1,448 | 993 | 4,051 | 3,280 | |
Interest on lease liabilities | 181 | 102 | 472 | 253 | |
Total finance lease expense | $ 1,629 | $ 1,095 | $ 4,523 | $ 3,533 |
Leases (Supplemental Cash Flows
Leases (Supplemental Cash Flows Information) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 51,918 | $ 39,642 |
Financing cash flows from finance leases | 3,408 | 4,177 |
ROU assets obtained in exchange for lease obligations: | ||
Operating leases | 16,327 | 15,739 |
Finance leases | $ 12,278 | $ 10,184 |
Weighted average remaining lease term (in years) | ||
Operating leases | 8 years | 9 years |
Finance leases | 7 years | 4 years |
Weighted average discount rate (percent) | ||
Operating leases | 4.40% | 4.60% |
Finance leases | 3.50% | 3.70% |
Leases (Future Lease Payments)
Leases (Future Lease Payments) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Operating Leases | ||
2020 (excluding the nine months ended September 30, 2020) | $ 10,527 | |
2021 | 37,135 | |
2022 | 30,869 | |
2023 | 24,494 | |
2024 | 18,889 | |
Thereafter | 79,176 | |
Total future minimum lease payments | 201,090 | |
Less: Imputed interest | (33,108) | |
Total | 167,982 | $ 187,631 |
Other current liabilities | 34,634 | 36,108 |
Operating lease liabilities | 133,348 | 151,523 |
Total operating leases liabilities | 167,982 | 187,631 |
Finance Lease, Liability, Payment, Due [Abstract] | ||
2020 (excluding the nine months ended September 30, 2020) | 1,437 | |
2021 | 5,281 | |
2022 | 4,267 | |
2023 | 2,775 | |
2024 | 1,353 | |
Thereafter | 6,064 | |
Total future minimum lease payments | 21,177 | |
Less: Imputed interest | (2,637) | |
Total | 18,540 | 11,788 |
Debt due within one year | 5,626 | |
Long-term debt due after one year | 12,914 | |
Total | $ 18,540 | $ 11,788 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jan. 01, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock available under stock option plan (in shares) | 13,527,202 | 13,527,202 | ||||
Vesting period | 3 years | |||||
Options, outstanding, number (in shares) | 114,943 | 114,943 | ||||
Nonvested awards, compensation cost not yet recognized, period for recognition | 3 years | |||||
Options vested in period, fair value | $ 2,000,000 | $ 0 | $ 2,000,000 | $ 0 | ||
Options, grants in period, gross (in shares) | 0 | 0 | ||||
Plan 2020 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized to issue under share based compensation plans (in shares) | 12,500,000 | |||||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation arrangement age requirement to vest over original vesting period | 55 years | |||||
Time in service requirement to vest over original vesting period | 10 years | |||||
Nonvested awards, compensation cost not yet recognized, period for recognition | 1 year | |||||
Nonvested awards, compensation cost not yet recognized | 25,700,000 | $ 25,700,000 | $ 23,400,000 | |||
Equity instruments other than options, vested in period, fair value | 4,900,000 | 300,000 | 25,900,000 | $ 16,500,000 | ||
Allocated share-based compensation expense, net of tax | 4,300,000 | 5,500,000 | 18,700,000 | 17,400,000 | ||
Allocated share-based compensation expense | $ 5,600,000 | $ 7,200,000 | $ 24,100,000 | $ 22,500,000 | ||
Equity instruments other than options, nonvested, number (in shares) | 1,464,577 | 1,464,577 | 1,690,600 | |||
Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 36 months | |||||
Shares forfeited (in shares) | 115,302 | |||||
Decrease in stock-based compensation expense | $ 4,500,000 | |||||
Equity instruments other than options, nonvested, number (in shares) | 551,000 | 551,000 | ||||
Award requisite service period (in years) | 3 years | |||||
Estimated vesting of shares based on performance shares (in shares) | 608,000 | 608,000 | ||||
Minimum | Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting rights, percentage | 0.00% | |||||
Options, vested and expected to vest, exercisable, number (in shares) | 0 | 0 | ||||
Maximum | Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting rights, percentage | 200.00% | |||||
Options, vested and expected to vest, exercisable, number (in shares) | 1,103,000 | 1,103,000 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans (Information Regarding Restricted Shares) (Details) - Restricted Stock | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Shares | |
Outstanding, Shares, Beginning balance (in shares) | shares | 1,690,600 |
Granted, Shares (in shares) | shares | 706,340 |
Vested, Shares (in shares) | shares | (576,441) |
Forfeited, Shares (in shares) | shares | (355,922) |
Outstanding, Shares, Ending balance (in shares) | shares | 1,464,577 |
Weighted Average Grant-Date Fair Value | |
Outstanding, Weighted Average Grant-Date Fair Value, Beginning balance (in dollars per share) | $ / shares | $ 46.71 |
Granted, Weighted Average Grant-Date Fair Value (in dollars per share) | $ / shares | 46.92 |
Vested, Weighted Average Grant-Date Fair Value (in dollars per share) | $ / shares | 44.99 |
Forfeited, Weighted Average Grant-Date Fair Value (in dollars per share) | $ / shares | 49.32 |
Outstanding, Weighted Average Grant-Date Fair Value, Ending balance (in dollars per share) | $ / shares | $ 46.86 |
Derivative Instruments and He_3
Derivative Instruments and Hedges (Textual) (Details) $ in Millions | 9 Months Ended | ||||
Sep. 30, 2020USD ($) | Sep. 30, 2020EUR (€) | Sep. 22, 2020EUR (€) | Dec. 31, 2019USD ($) | Sep. 30, 2015EUR (€) | |
2022 EUR Senior Notes | |||||
Derivative [Line Items] | |||||
Stated interest rate (as a percent) | 1.25% | 1.25% | 1.25% | ||
2022 EUR Senior Notes | |||||
Derivative [Line Items] | |||||
Designated amount, net investment hedge | € 336,300,000 | € 255,700,000 | |||
Currency Swap | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | € 163,200,000 | ||||
Not Designated as Hedging Instrument | Forward Exchange Contract | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | $ | $ 399.6 | $ 398.5 | |||
Minimum remaining maturity of foreign currency derivatives | 9 days | ||||
Maximum remaining maturity of foreign currency derivatives | 23 months |
Derivative Instruments and He_4
Derivative Instruments and Hedges (Fair Value Balance Sheet Disclosures) (Details) - Not Designated as Hedging Instrument - Foreign Exchange Contract - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Current derivative assets | $ 1,082 | $ 892 |
Noncurrent derivative assets | 65 | 15 |
Current derivative liabilities | 682 | 3,418 |
Noncurrent derivative liabilities | $ 4 | $ 8 |
Derivative Instruments and He_5
Derivative Instruments and Hedges (Fair Value of Forward Exchange Contracts) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Forward Contracts | ||||
Derivative [Line Items] | ||||
Losses recognized in income | $ (2,293) | $ (1,817) | $ (2,354) | $ (4,511) |
Debt (Schedule of Debt) (Detail
Debt (Schedule of Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 14, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Finance lease obligations and other borrowings | $ 25,402 | $ 23,103 | |
Debt and finance lease obligations | 1,709,663 | 1,377,249 | |
Less amounts due within one year | 8,581 | 11,272 | |
Total debt due after one year | $ 1,701,082 | $ 1,365,977 | |
2022 EUR Senior Notes | |||
Debt Instrument [Line Items] | |||
Stated interest rate (as a percent) | 1.25% | 1.25% | |
Debt instrument, unamortized discount (premium) and debt issuance costs, net | $ 1,239 | $ 2,653 | |
Long-term debt | $ 393,403 | $ 557,847 | |
2022 Senior notes | |||
Debt Instrument [Line Items] | |||
Stated interest rate (as a percent) | 3.50% | 3.50% | |
Debt instrument, unamortized discount (premium) and debt issuance costs, net | $ 1,410 | $ 1,924 | |
Long-term debt | $ 498,590 | $ 498,076 | |
2023 Senior notes | |||
Debt Instrument [Line Items] | |||
Stated interest rate (as a percent) | 4.00% | 4.00% | |
Debt instrument, unamortized discount (premium) and debt issuance costs, net | $ 1,455 | $ 1,777 | |
Long-term debt | $ 298,545 | 298,223 | |
2030 USD Senior notes | |||
Debt Instrument [Line Items] | |||
Stated interest rate (as a percent) | 3.50% | 3.50% | |
Debt instrument, unamortized discount (premium) and debt issuance costs, net | $ 6,277 | ||
Long-term debt | $ 493,723 | $ 0 |
Debt (Details Textual)
Debt (Details Textual) | Jul. 16, 2019 | Sep. 30, 2020USD ($)$ / shares | Sep. 30, 2020USD ($)$ / shares | Jun. 30, 2020 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 14, 2020USD ($) | Sep. 04, 2020USD ($)$ / shares | Dec. 31, 2019USD ($)$ / shares |
Line of Credit Facility [Line Items] | |||||||||
Common shares, par value (in dollars per share) | $ / shares | $ 1.25 | $ 1.25 | $ 1.25 | ||||||
2030 USD Senior notes | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt Instrument, face amount | $ 500,000,000 | ||||||||
Stated interest rate (as a percent) | 3.50% | 3.50% | 3.50% | ||||||
Price of notes as a percentage of principal amount | 99.656% | ||||||||
2022 EUR Senior Notes | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Stated interest rate (as a percent) | 1.25% | 1.25% | 1.25% | ||||||
Repayment of debt | $ 191,400,000 | ||||||||
Loss on debt extinguishment | 1,200,000 | ||||||||
Senior Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Letters of credit outstanding | 54,100,000 | $ 54,100,000 | $ 88,500,000 | ||||||
Line of credit facility, current borrowing capacity | 745,900,000 | 745,900,000 | 711,500,000 | ||||||
Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Revolving credit facility | $ 0 | $ 0 | $ 0 | ||||||
Revolving Credit Facility | New Credit Agreement | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 800,000,000 | ||||||||
Cash and cash equivalents excluded from leverage raito | $ 250,000,000 | ||||||||
Common shares, par value (in dollars per share) | $ / shares | $ 1.25 | ||||||||
Revolving Credit Facility | New Senior Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum increase in borrowing capacity | $ 400,000,000 | ||||||||
Line of credit, commitment fee (as a percentage) | 0.20% | ||||||||
Letter of Credit | New Senior Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | 750,000,000 | ||||||||
Swing Line Loans | New Senior Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 30,000,000 | ||||||||
LIBOR | Revolving Credit Facility | New Senior Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 1.375% | ||||||||
Base Rate | Revolving Credit Facility | New Senior Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 0.375% | ||||||||
Minimum | Revolving Credit Facility | New Senior Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Commitment fee percentage for unused capacity | 0.09% | ||||||||
Minimum | LIBOR | Revolving Credit Facility | New Senior Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 1.00% | ||||||||
Minimum | Base Rate | Revolving Credit Facility | New Senior Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 0.00% | ||||||||
Maximum | Revolving Credit Facility | New Credit Agreement | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Percentage of dividends and share purchases | 115.00% | ||||||||
Maximum | Revolving Credit Facility | New Credit Agreement | Forecast | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Leverage ratio | 4 | 4 | |||||||
Leverage ratio with acquisitions | 4.50 | ||||||||
Maximum | Revolving Credit Facility | New Senior Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Commitment fee percentage for unused capacity | 0.30% | ||||||||
Maximum | LIBOR | Revolving Credit Facility | New Senior Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 1.75% | ||||||||
Maximum | Base Rate | Revolving Credit Facility | New Senior Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 0.75% |
Fair Value (Details)
Fair Value (Details) $ in Millions | Sep. 30, 2020USD ($) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Senior notes | $ 1,684.3 |
Estimate of Fair Value Measurement | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Senior notes | $ 1,711.9 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Net Components of Inventory | ||
Raw materials | $ 345,419 | $ 328,080 |
Work in process | 246,902 | 192,993 |
Finished goods | 207,239 | 218,408 |
Less: Excess and obsolete reserve | (85,071) | (78,644) |
Inventories, net | $ 714,489 | $ 660,837 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net earnings of Flowserve Corporation | $ 51,003 | $ 59,842 | $ 59,433 | $ 166,243 |
Dividends on restricted shares not expected to vest | 0 | 0 | 0 | 0 |
Earnings attributable to common and participating shareholders | $ 51,003 | $ 59,842 | $ 59,433 | $ 166,243 |
Weighted average shares: | ||||
Common stock (in shares) | 130,292 | 131,122 | 130,390 | 131,070 |
Participating securities (in shares) | 21 | 23 | 23 | 22 |
Denominator for basic earnings per common share (in shares) | 130,313 | 131,145 | 130,413 | 131,092 |
Effect of potentially dilutive securities (in shares) | 587 | 701 | 655 | 605 |
Denominator for diluted earnings per common share (in shares) | 130,900 | 131,846 | 131,068 | 131,697 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 0.39 | $ 0.46 | $ 0.46 | $ 1.27 |
Diluted (in dollars per share) | $ 0.39 | $ 0.45 | $ 0.45 | $ 1.26 |
Legal Matters and Contingenci_3
Legal Matters and Contingencies (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020claim | Sep. 30, 2019claim | Sep. 30, 2020USD ($)claim | Sep. 30, 2019claim | Dec. 31, 2019claim | |
Liability for Asbestos and Environmental Claims, Net [Roll Forward] | |||||
Beginning claims | 8,100 | 8,315 | 8,345 | 8,619 | 8,619 |
Beginning claims | 8,345 | 8,619 | 8,619 | ||
New claims | 635 | 656 | 1,672 | 1,671 | 2,314 |
Resolved claims | (398) | (699) | (1,706) | (2,027) | (2,601) |
Other | 9 | 5 | 35 | 14 | 13 |
Ending claims | 8,346 | 8,277 | 8,346 | 8,277 | 8,345 |
Ending claims | 8,346 | 8,277 | 8,346 | 8,277 | 8,345 |
Loss contingency expense | $ | $ 12.1 |
Retirement and Postretirement_3
Retirement and Postretirement Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | $ 6,047 | $ 1,045 | $ 19,334 | $ (13,476) |
Non-Restructuring Charges | 1,384 | 3,749 | 52,983 | 12,644 |
Transformation Charges | 4,746 | 5,058 | 16,007 | 21,044 |
Total Realignment Program Charges | 7,431 | 4,794 | 72,317 | (832) |
Total Realignment and Transformation Charges | 12,177 | 9,852 | 88,324 | 20,212 |
FPD | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | 5,459 | 234 | 19,021 | (15,180) |
Non-Restructuring Charges | 2,307 | 2,752 | 24,238 | 10,301 |
Total Realignment Program Charges | 7,766 | 2,986 | 43,259 | (4,879) |
Total Realignment and Transformation Charges | 7,766 | 2,986 | 43,259 | (4,879) |
FCD | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | 588 | 811 | 313 | 1,704 |
Non-Restructuring Charges | (1,291) | 3 | 12,335 | 106 |
Total Realignment Program Charges | (703) | 814 | 12,648 | 1,810 |
Total Realignment and Transformation Charges | (703) | 814 | 12,648 | 1,810 |
Eliminations and All Other | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | 0 | 0 | 0 | 0 |
Non-Restructuring Charges | 368 | 994 | 16,410 | 2,237 |
Transformation Charges | 4,746 | 5,058 | 16,007 | 21,044 |
Total Realignment Program Charges | 368 | 994 | 16,410 | 2,237 |
Total Realignment and Transformation Charges | 5,114 | 6,052 | 32,417 | 23,281 |
Subtotal–Reportable Segments | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | 6,047 | 1,045 | 19,334 | (13,476) |
Non-Restructuring Charges | 1,016 | 2,755 | 36,573 | 10,407 |
Total Realignment Program Charges | 7,063 | 3,800 | 55,907 | (3,069) |
Total Realignment and Transformation Charges | 7,063 | 3,800 | 55,907 | (3,069) |
Cost of Sales | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | 6,059 | 1,008 | 19,118 | 3,183 |
Non-Restructuring Charges | (401) | 2,412 | 21,518 | 9,603 |
Total Realignment Program Charges | 5,658 | 3,420 | 40,636 | 12,786 |
Total Realignment and Transformation Charges | 5,658 | 3,420 | 40,636 | 12,786 |
Cost of Sales | FPD | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | 5,469 | 197 | 18,800 | 1,892 |
Non-Restructuring Charges | 1,210 | 2,409 | 13,339 | 9,531 |
Total Realignment Program Charges | 6,679 | 2,606 | 32,139 | 11,423 |
Total Realignment and Transformation Charges | 6,679 | 2,606 | 32,139 | 11,423 |
Cost of Sales | FCD | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | 590 | 811 | 318 | 1,291 |
Non-Restructuring Charges | (1,366) | 3 | 7,876 | 72 |
Total Realignment Program Charges | (776) | 814 | 8,194 | 1,363 |
Total Realignment and Transformation Charges | (776) | 814 | 8,194 | 1,363 |
Cost of Sales | Eliminations and All Other | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | 0 | 0 | 0 | 0 |
Non-Restructuring Charges | (245) | 0 | 303 | 0 |
Total Realignment Program Charges | (245) | 0 | 303 | 0 |
Total Realignment and Transformation Charges | (245) | 0 | 303 | 0 |
Cost of Sales | Subtotal–Reportable Segments | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | 6,059 | 1,008 | 19,118 | 3,183 |
Non-Restructuring Charges | (156) | 2,412 | 21,215 | 9,603 |
Total Realignment Program Charges | 5,903 | 3,420 | 40,333 | 12,786 |
Total Realignment and Transformation Charges | 5,903 | 3,420 | 40,333 | 12,786 |
Selling, General and Administrative Expenses | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | (12) | 37 | 216 | (16,659) |
Non-Restructuring Charges | 1,785 | 1,337 | 31,465 | 3,041 |
Transformation Charges | 4,746 | 5,058 | 16,007 | 21,044 |
Total Realignment Program Charges | 1,773 | 1,374 | 31,681 | (13,618) |
Total Realignment and Transformation Charges | 6,519 | 6,432 | 47,688 | 7,426 |
Selling, General and Administrative Expenses | FPD | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | (10) | 37 | 221 | (17,072) |
Non-Restructuring Charges | 1,097 | 343 | 10,899 | 770 |
Total Realignment Program Charges | 1,087 | 380 | 11,120 | (16,302) |
Total Realignment and Transformation Charges | 1,087 | 380 | 11,120 | (16,302) |
Selling, General and Administrative Expenses | FCD | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | (2) | 0 | (5) | 413 |
Non-Restructuring Charges | 75 | 0 | 4,459 | 34 |
Total Realignment Program Charges | 73 | 0 | 4,454 | 447 |
Total Realignment and Transformation Charges | 73 | 0 | 4,454 | 447 |
Selling, General and Administrative Expenses | Eliminations and All Other | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | 0 | 0 | 0 | 0 |
Non-Restructuring Charges | 613 | 994 | 16,107 | 2,237 |
Transformation Charges | 4,746 | 5,058 | 16,007 | 21,044 |
Total Realignment Program Charges | 613 | 994 | 16,107 | 2,237 |
Total Realignment and Transformation Charges | 5,359 | 6,052 | 32,114 | 23,281 |
Selling, General and Administrative Expenses | Subtotal–Reportable Segments | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Restructuring Charges | (12) | 37 | 216 | (16,659) |
Non-Restructuring Charges | 1,172 | 343 | 15,358 | 804 |
Total Realignment Program Charges | 1,160 | 380 | 15,574 | (15,855) |
Total Realignment and Transformation Charges | 1,160 | 380 | 15,574 | (15,855) |
Domestic Plan | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Service cost | 6,400 | 5,900 | 19,400 | 17,400 |
Interest cost | 3,800 | 4,500 | 11,300 | 13,200 |
Expected return on plan assets | (6,400) | (6,400) | (19,300) | (19,200) |
Amortization of prior service cost | 0 | 0 | 100 | 100 |
Amortization of unrecognized net loss (gain) | 1,700 | 1,000 | 5,200 | 2,800 |
Net periodic cost recognized | 5,500 | 5,000 | 16,700 | 14,300 |
Foreign Plan | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Service cost | 2,000 | 1,300 | 5,400 | 4,200 |
Interest cost | 1,800 | 2,000 | 5,000 | 6,500 |
Expected return on plan assets | (1,400) | (1,700) | (3,800) | (5,500) |
Amortization of prior service cost | 100 | 100 | 200 | 200 |
Amortization of unrecognized net loss (gain) | 1,200 | 600 | 3,300 | 2,100 |
Net periodic cost recognized | 3,700 | 2,300 | 10,100 | 7,500 |
Postretirement Medical Benefits | ||||
Components of the net periodic cost for retirement and postretirement benefits | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 100 | 200 | 400 | 500 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost | 0 | 0 | 100 | 100 |
Amortization of unrecognized net loss (gain) | 0 | 0 | (100) | (100) |
Net periodic cost recognized | $ 100 | $ 200 | $ 400 | $ 500 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Nov. 13, 2014 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Cash dividends declared per share (in dollars per share) | $ 0.20 | $ 0.19 | $ 0.60 | $ 0.57 | |
Repurchase of shares (in shares) | 0 | 113,656 | 1,057,115 | 113,656 | |
Treasury Stock, Value, Acquired, Cost Method | $ 5,400,000 | $ 32,100,000 | $ 5,400,000 | ||
Remaining authorized repurchase capacity | $ 113,600,000 | $ 113,600,000 | |||
Share repurchase program 2014 | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Authorized amount to be repurchased | $ 500,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income before income tax | $ 72,322 | $ 84,373 | $ 125,498 | $ 231,509 |
Income tax expense | $ 18,672 | $ 22,410 | $ 59,175 | $ 58,607 |
Effective tax rate (as a percent) | 25.80% | 26.60% | 47.20% | 25.30% |
Unrecognized tax benefits, period increase | $ 6,000 | |||
Unrecognized tax benefits approximate amount of estimated reduction within the next twelve months | $ 7,000 | $ 7,000 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Summarized financial information of the reportable segments | ||||
Sales | $ 924,301 | $ 995,709 | $ 2,742,826 | $ 2,871,517 |
Segment operating income | 87,322 | 104,578 | 154,977 | 282,193 |
Operating Segments | ||||
Summarized financial information of the reportable segments | ||||
Sales | 924,301 | 995,709 | 2,742,826 | 2,871,517 |
Segment operating income | 117,412 | 134,704 | 260,900 | 376,774 |
Intersegment sales | ||||
Summarized financial information of the reportable segments | ||||
Sales | (1,128) | (1,014) | (3,990) | (3,965) |
Segment operating income | (30,090) | (30,126) | (105,923) | (94,581) |
FPD | ||||
Summarized financial information of the reportable segments | ||||
Sales | 669,535 | 682,798 | 1,978,215 | 1,965,523 |
FPD | Operating Segments | ||||
Summarized financial information of the reportable segments | ||||
Sales | 669,535 | 682,798 | 1,978,215 | 1,965,523 |
Segment operating income | 86,660 | 85,461 | 186,740 | 242,085 |
FPD | Intersegment sales | ||||
Summarized financial information of the reportable segments | ||||
Sales | 673 | (52) | 1,710 | 1,249 |
FCD | ||||
Summarized financial information of the reportable segments | ||||
Sales | 254,766 | 312,911 | 764,611 | 905,994 |
FCD | Operating Segments | ||||
Summarized financial information of the reportable segments | ||||
Sales | 254,766 | 312,911 | 764,611 | 905,994 |
Segment operating income | 30,752 | 49,243 | 74,160 | 134,689 |
FCD | Intersegment sales | ||||
Summarized financial information of the reportable segments | ||||
Sales | 455 | 1,066 | 2,280 | 2,716 |
Flowserve Pump Division and Flowserve Control Division | Intersegment sales | ||||
Summarized financial information of the reportable segments | ||||
Sales | $ 1,128 | $ 1,014 | $ 3,990 | $ 3,965 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Components of AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Beginning balance | $ (637,300) | $ (561,825) | $ (579,239) | $ (569,430) | ||||
Other comprehensive income (loss) before reclassifications | 21,598 | (28,372) | (41,414) | (23,778) | ||||
Amounts reclassified from AOCL | 2,671 | 1,464 | 7,622 | 4,475 | ||||
Other comprehensive income (loss) | 24,269 | (26,908) | (33,792) | (19,303) | ||||
Ending balance | (613,031) | (588,733) | (613,031) | (588,733) | ||||
Accumulated other comprehensive loss, accumulated net loss from net investment hedge | 12,100 | (9,300) | 24,600 | 5,900 | ||||
Foreign currency translation items | ||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Beginning balance | (507,633) | (443,828) | (441,407) | (447,925) | ||||
Other comprehensive income (loss) before reclassifications | 25,204 | (30,600) | (41,022) | (26,503) | ||||
Amounts reclassified from AOCL | 0 | 0 | 0 | 0 | ||||
Other comprehensive income (loss) | 25,204 | (30,600) | (41,022) | (26,503) | ||||
Ending balance | (482,429) | (474,428) | (482,429) | (474,428) | ||||
Pension and other post-retirement effects | ||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Beginning balance | (129,094) | (117,244) | (137,161) | (120,647) | ||||
Other comprehensive income (loss) before reclassifications | (3,647) | 2,184 | (531) | 2,576 | ||||
Amounts reclassified from AOCL | 2,671 | 1,464 | 7,622 | 4,475 | ||||
Other comprehensive income (loss) | (976) | 3,648 | 7,091 | 7,051 | ||||
Ending balance | (130,070) | (113,596) | (130,070) | (113,596) | ||||
Cash flow hedging activity | ||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Beginning balance | (573) | (753) | (671) | (858) | ||||
Other comprehensive income (loss) before reclassifications | 41 | 44 | 139 | 149 | ||||
Amounts reclassified from AOCL | 0 | 0 | 0 | 0 | ||||
Other comprehensive income (loss) | 41 | 44 | 139 | 149 | ||||
Ending balance | (532) | (709) | (532) | (709) | ||||
Non- controlling Interests | ||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Other comprehensive income (loss) | (4) | (66) | 772 | 599 | ||||
Accumulated other comprehensive income (loss), foreign currency translation adjustment, net of tax | $ 5,800 | $ 5,100 | $ 5,800 | $ 5,100 | $ 5,900 | $ (5,100) | $ 5,200 | $ (4,500) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss (Reclassifications out of AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net of tax | $ (2,671) | $ (1,464) | $ (7,622) | $ (4,475) |
Amortization of actuarial losses | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification | (2,942) | (1,564) | (8,456) | (4,727) |
Prior service costs | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification | (150) | (131) | (429) | (408) |
Pension and other post-retirement effects | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Tax benefit | 421 | 231 | 1,263 | 660 |
Net of tax | $ (2,671) | $ (1,464) | $ (7,622) | $ (4,475) |
Realignment Programs (Details)
Realignment Programs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 63 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | $ 6,047 | $ 1,045 | $ 19,334 | $ (13,476) | ||
Non-Restructuring Charges | 1,384 | 3,749 | 52,983 | 12,644 | ||
Total Realignment Program Charges | 7,431 | 4,794 | 72,317 | (832) | ||
Transformation Charges | 4,746 | 5,058 | 16,007 | 21,044 | ||
Total Realignment and Transformation Charges | 12,177 | 9,852 | 88,324 | 20,212 | ||
Restructuring Reserve [Roll Forward] | ||||||
Beginning Balance | 6,703 | 11,927 | ||||
Charges, net of adjustments | 6,047 | 1,045 | 19,334 | (13,476) | ||
Cash expenditures | (4,772) | (8,196) | ||||
Other non-cash adjustments, including currency | 425 | (461) | ||||
Ending Balance | 20,342 | 9,087 | $ 20,342 | 20,342 | 9,087 | |
Severance | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 4,688 | (738) | 17,187 | 2,708 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 4,688 | (738) | 17,187 | 2,708 | ||
Contract Termination | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 0 | 3 | 0 | 51 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 0 | 3 | 0 | 51 | ||
Asset Write-Downs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 334 | 24 | 1,347 | (19,295) | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 334 | 24 | 1,347 | (19,295) | ||
Other | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 1,025 | 1,756 | 800 | 3,060 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 1,025 | 1,756 | 800 | 3,060 | ||
Charges Expected to be Settled in Cash | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 17,986 | 5,817 | ||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 17,986 | 5,817 | ||||
Cost of Sales | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 6,059 | 1,008 | 19,118 | 3,183 | ||
Non-Restructuring Charges | (401) | 2,412 | 21,518 | 9,603 | ||
Total Realignment Program Charges | 5,658 | 3,420 | 40,636 | 12,786 | ||
Total Realignment and Transformation Charges | 5,658 | 3,420 | 40,636 | 12,786 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 6,059 | 1,008 | 19,118 | 3,183 | ||
Cost of Sales | Severance | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 4,704 | (729) | 16,959 | 1,099 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 4,704 | (729) | 16,959 | 1,099 | ||
Cost of Sales | Contract Termination | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 0 | 3 | 0 | 51 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 0 | 3 | 0 | 51 | ||
Cost of Sales | Asset Write-Downs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 331 | 19 | 1,322 | (799) | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 331 | 19 | 1,322 | (799) | ||
Cost of Sales | Other | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 1,024 | 1,715 | 837 | 2,832 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 1,024 | 1,715 | 837 | 2,832 | ||
Selling, General and Administrative Expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | (12) | 37 | 216 | (16,659) | ||
Non-Restructuring Charges | 1,785 | 1,337 | 31,465 | 3,041 | ||
Total Realignment Program Charges | 1,773 | 1,374 | 31,681 | (13,618) | ||
Transformation Charges | 4,746 | 5,058 | 16,007 | 21,044 | ||
Total Realignment and Transformation Charges | 6,519 | 6,432 | 47,688 | 7,426 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | (12) | 37 | 216 | (16,659) | ||
Selling, General and Administrative Expenses | Severance | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | (16) | (9) | 228 | 1,609 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | (16) | (9) | 228 | 1,609 | ||
Selling, General and Administrative Expenses | Contract Termination | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 0 | 0 | 0 | |||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 0 | 0 | 0 | |||
Selling, General and Administrative Expenses | Asset Write-Downs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 3 | 5 | 25 | (18,496) | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 3 | 5 | 25 | (18,496) | ||
Selling, General and Administrative Expenses | Other | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 1 | 41 | (37) | 228 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 1 | 41 | (37) | 228 | ||
FPD | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 5,459 | 234 | 19,021 | (15,180) | ||
Non-Restructuring Charges | 2,307 | 2,752 | 24,238 | 10,301 | ||
Total Realignment Program Charges | 7,766 | 2,986 | 43,259 | (4,879) | ||
Total Realignment and Transformation Charges | 7,766 | 2,986 | 43,259 | (4,879) | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 5,459 | 234 | 19,021 | (15,180) | ||
FPD | Cost of Sales | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 5,469 | 197 | 18,800 | 1,892 | ||
Non-Restructuring Charges | 1,210 | 2,409 | 13,339 | 9,531 | ||
Total Realignment Program Charges | 6,679 | 2,606 | 32,139 | 11,423 | ||
Total Realignment and Transformation Charges | 6,679 | 2,606 | 32,139 | 11,423 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 5,469 | 197 | 18,800 | 1,892 | ||
FPD | Selling, General and Administrative Expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | (10) | 37 | 221 | (17,072) | ||
Non-Restructuring Charges | 1,097 | 343 | 10,899 | 770 | ||
Total Realignment Program Charges | 1,087 | 380 | 11,120 | (16,302) | ||
Total Realignment and Transformation Charges | 1,087 | 380 | 11,120 | (16,302) | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | (10) | 37 | 221 | (17,072) | ||
FCD | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 588 | 811 | 313 | 1,704 | ||
Non-Restructuring Charges | (1,291) | 3 | 12,335 | 106 | ||
Total Realignment Program Charges | (703) | 814 | 12,648 | 1,810 | ||
Total Realignment and Transformation Charges | (703) | 814 | 12,648 | 1,810 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 588 | 811 | 313 | 1,704 | ||
FCD | Cost of Sales | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 590 | 811 | 318 | 1,291 | ||
Non-Restructuring Charges | (1,366) | 3 | 7,876 | 72 | ||
Total Realignment Program Charges | (776) | 814 | 8,194 | 1,363 | ||
Total Realignment and Transformation Charges | (776) | 814 | 8,194 | 1,363 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 590 | 811 | 318 | 1,291 | ||
FCD | Selling, General and Administrative Expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | (2) | 0 | (5) | 413 | ||
Non-Restructuring Charges | 75 | 0 | 4,459 | 34 | ||
Total Realignment Program Charges | 73 | 0 | 4,454 | 447 | ||
Total Realignment and Transformation Charges | 73 | 0 | 4,454 | 447 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | (2) | 0 | (5) | 413 | ||
Subtotal–Reportable Segments | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 6,047 | 1,045 | 19,334 | (13,476) | ||
Non-Restructuring Charges | 1,016 | 2,755 | 36,573 | 10,407 | ||
Total Realignment Program Charges | 7,063 | 3,800 | 55,907 | (3,069) | ||
Total Realignment and Transformation Charges | 7,063 | 3,800 | 55,907 | (3,069) | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 6,047 | 1,045 | 19,334 | (13,476) | ||
Subtotal–Reportable Segments | Cost of Sales | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 6,059 | 1,008 | 19,118 | 3,183 | ||
Non-Restructuring Charges | (156) | 2,412 | 21,215 | 9,603 | ||
Total Realignment Program Charges | 5,903 | 3,420 | 40,333 | 12,786 | ||
Total Realignment and Transformation Charges | 5,903 | 3,420 | 40,333 | 12,786 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 6,059 | 1,008 | 19,118 | 3,183 | ||
Subtotal–Reportable Segments | Selling, General and Administrative Expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | (12) | 37 | 216 | (16,659) | ||
Non-Restructuring Charges | 1,172 | 343 | 15,358 | 804 | ||
Total Realignment Program Charges | 1,160 | 380 | 15,574 | (15,855) | ||
Total Realignment and Transformation Charges | 1,160 | 380 | 15,574 | (15,855) | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | (12) | 37 | 216 | (16,659) | ||
Eliminations and All Other | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 0 | 0 | 0 | 0 | ||
Non-Restructuring Charges | 368 | 994 | 16,410 | 2,237 | ||
Total Realignment Program Charges | 368 | 994 | 16,410 | 2,237 | ||
Transformation Charges | 4,746 | 5,058 | 16,007 | 21,044 | ||
Total Realignment and Transformation Charges | 5,114 | 6,052 | 32,417 | 23,281 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 0 | 0 | 0 | 0 | ||
Eliminations and All Other | Cost of Sales | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 0 | 0 | 0 | 0 | ||
Non-Restructuring Charges | (245) | 0 | 303 | 0 | ||
Total Realignment Program Charges | (245) | 0 | 303 | 0 | ||
Total Realignment and Transformation Charges | (245) | 0 | 303 | 0 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 0 | 0 | 0 | 0 | ||
Eliminations and All Other | Selling, General and Administrative Expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 0 | 0 | 0 | 0 | ||
Non-Restructuring Charges | 613 | 994 | 16,107 | 2,237 | ||
Total Realignment Program Charges | 613 | 994 | 16,107 | 2,237 | ||
Transformation Charges | 4,746 | 5,058 | 16,007 | 21,044 | ||
Total Realignment and Transformation Charges | 5,359 | 6,052 | 32,114 | 23,281 | ||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 0 | $ 0 | 0 | $ 0 | ||
Flowserve 2.0 Transformation | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Expected cost | $ 75,000 | 75,000 | $ 75,000 | |||
Restructuring Charges | 17,680 | |||||
Non-Restructuring Charges | 45,332 | |||||
Total Realignment and Transformation Charges | 63,012 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 17,680 | |||||
Flowserve 2.0 Transformation | Severance | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 15,386 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 15,386 | |||||
Flowserve 2.0 Transformation | Contract Termination | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 0 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 0 | |||||
Flowserve 2.0 Transformation | Asset Write-Downs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 1,352 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 1,352 | |||||
Flowserve 2.0 Transformation | Other | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 942 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 942 | |||||
Flowserve 2.0 Transformation | Cost of Sales | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 17,542 | |||||
Non-Restructuring Charges | 15,067 | |||||
Total Realignment and Transformation Charges | 32,609 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 17,542 | |||||
Flowserve 2.0 Transformation | Cost of Sales | Severance | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 15,276 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 15,276 | |||||
Flowserve 2.0 Transformation | Cost of Sales | Contract Termination | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 0 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 0 | |||||
Flowserve 2.0 Transformation | Cost of Sales | Asset Write-Downs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 1,325 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 1,325 | |||||
Flowserve 2.0 Transformation | Cost of Sales | Other | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 941 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 941 | |||||
Flowserve 2.0 Transformation | Selling, General and Administrative Expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 138 | |||||
Non-Restructuring Charges | 30,265 | |||||
Total Realignment and Transformation Charges | 30,403 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 138 | |||||
Flowserve 2.0 Transformation | Selling, General and Administrative Expenses | Severance | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 110 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 110 | |||||
Flowserve 2.0 Transformation | Selling, General and Administrative Expenses | Contract Termination | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 0 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 0 | |||||
Flowserve 2.0 Transformation | Selling, General and Administrative Expenses | Asset Write-Downs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 27 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 27 | |||||
Flowserve 2.0 Transformation | Selling, General and Administrative Expenses | Other | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 1 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 1 | |||||
Flowserve 2.0 Transformation | FPD | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 17,235 | |||||
Non-Restructuring Charges | 23,626 | |||||
Total Realignment and Transformation Charges | 40,861 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 17,235 | |||||
Flowserve 2.0 Transformation | FPD | Cost of Sales | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 17,119 | |||||
Non-Restructuring Charges | 13,213 | |||||
Total Realignment and Transformation Charges | 30,332 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 17,119 | |||||
Flowserve 2.0 Transformation | FPD | Selling, General and Administrative Expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 116 | |||||
Non-Restructuring Charges | 10,413 | |||||
Total Realignment and Transformation Charges | 10,529 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 116 | |||||
Flowserve 2.0 Transformation | FCD | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 445 | |||||
Non-Restructuring Charges | 5,938 | |||||
Total Realignment and Transformation Charges | 6,383 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 445 | |||||
Flowserve 2.0 Transformation | FCD | Cost of Sales | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 423 | |||||
Non-Restructuring Charges | 1,551 | |||||
Total Realignment and Transformation Charges | 1,974 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 423 | |||||
Flowserve 2.0 Transformation | FCD | Selling, General and Administrative Expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 22 | |||||
Non-Restructuring Charges | 4,387 | |||||
Total Realignment and Transformation Charges | 4,409 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 22 | |||||
Flowserve 2.0 Transformation | Subtotal–Reportable Segments | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 17,680 | |||||
Non-Restructuring Charges | 29,564 | |||||
Total Realignment and Transformation Charges | 47,244 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 17,680 | |||||
Flowserve 2.0 Transformation | Subtotal–Reportable Segments | Cost of Sales | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 17,542 | |||||
Non-Restructuring Charges | 14,764 | |||||
Total Realignment and Transformation Charges | 32,306 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 17,542 | |||||
Flowserve 2.0 Transformation | Subtotal–Reportable Segments | Selling, General and Administrative Expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 138 | |||||
Non-Restructuring Charges | 14,800 | |||||
Total Realignment and Transformation Charges | 14,938 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 138 | |||||
Flowserve 2.0 Transformation | Eliminations and All Other | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 0 | |||||
Non-Restructuring Charges | 15,768 | |||||
Total Realignment and Transformation Charges | 15,768 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 0 | |||||
Flowserve 2.0 Transformation | Eliminations and All Other | Cost of Sales | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 0 | |||||
Non-Restructuring Charges | 303 | |||||
Total Realignment and Transformation Charges | 303 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | 0 | |||||
Flowserve 2.0 Transformation | Eliminations and All Other | Selling, General and Administrative Expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 0 | |||||
Non-Restructuring Charges | 15,465 | |||||
Total Realignment and Transformation Charges | 15,465 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | $ 0 | |||||
Realignment Programs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | $ 362,400 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Charges, net of adjustments | $ 362,400 |