XML 37 R25.htm IDEA: XBRL DOCUMENT v3.21.2

Realignment and Transformation Programs

9 Months Ended

Sep. 30, 2021

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 $95 million and the majority of the charges were incurred in 2020 with the remainder to be incurred in 2021. There are certain other realignment activities that are currently being evaluated, but have not yet been finalized.

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 consisted of professional services, project management and related travel costs recorded in SG&A expenses. As of December 31, 2020, the Flowserve 2.0 Transformation efforts were substantially completed. For the nine months ended September 30, 2021, there were no Flowserve 2.0 Transformation charges.

Generally, the aforementioned charges will be paid in cash, except for asset write-downs, which are non-cash charges. The following is a summary of total charges, net of adjustments, incurred in 2021 related to our 2020 Realignment Program and the total charges incurred in 2020 are related to our 2020 Realignment Program and Flowserve 2.0 Transformation:

			Three Months Ended September 30, 2021
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	1,659					$	185					$	1,844					$	—					$	1,844
SG&A			38						(7)						31						—						31
			$	1,697					$	178					$	1,875					$	—					$	1,875
Non-Restructuring Charges
COS			$	614					$	124					$	738					$	—					$	738
SG&A			(290)						6						(284)						621						337
			$	324					$	130					$	454					$	621					$	1,075
Total Realignment Charges
COS			$	2,273					$	309					$	2,582					$	—					$	2,582
SG&A			(252)						(1)						(253)						621						368
Total			$	2,021					$	308					$	2,329					$	621					$	2,950

			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

			Nine Months Ended September 30, 2021
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	7,702					$	655					$	8,357					$	—					$	8,357
SG&A			705						(17)						688						—						688
			$	8,407					$	638					$	9,045					$	—					$	9,045
Non-Restructuring Charges
COS			$	6,064					$	802					$	6,866					$	590					$	7,456
SG&A			205						744						949						4,816						5,765
			$	6,269					$	1,546					$	7,815					$	5,406					$	13,221
Total Realignment Charges
COS			$	13,766					$	1,457					$	15,223					$	590					$	15,813
SG&A			910						727						1,637						4,816						6,453
Total			$	14,676					$	2,184					$	16,860					$	5,406					$	22,266

			Nine Months Ended September 30, 2020
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
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 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

The following is a summary of total inception to date charges, net of adjustments, related to the 2020 Realignment Program:

			Inception to Date
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	25,531					$	1,882					$	27,413					$	—					$	27,413
SG&A			756						309						1,065						—						1,065
			$	26,287					$	2,191					$	28,478					$	—					$	28,478
Non-Restructuring Charges
COS			$	25,267					$	329					$	25,596					$	642					$	26,238
SG&A			10,886						5,299						16,185						22,698						38,883
			$	36,153					$	5,628					$	41,781					$	23,340					$	65,121
Total Realignment Charges
COS			$	50,798					$	2,211					$	53,009					$	642					$	53,651
SG&A			11,642						5,608						17,250						22,698						39,948
Total			$	62,440					$	7,819					$	70,259					$	23,340					$	93,599

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 related to our 2020 Realignment Program:

			Three Months Ended September 30, 2021
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs						Other						Total
COS			$	(371)					$	—					$	1,282					$	933					$	1,844
SG&A			—						—						—						31						31
Total			$	(371)					$	—					$	1,282					$	964					$	1,875

			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

			Nine Months Ended September 30, 2021
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs						Other						Total
COS			$	848					$	—					$	2,623					$	4,886					$	8,357
SG&A			168												—						520						688
Total			$	1,016					$	—					$	2,623					$	5,406					$	9,045

			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

The following is a summary of total inception to date restructuring charges, net of adjustments, related to our 2020 Realignment Program:

			Inception to Date
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs						Other						Total
COS			$	16,092					$	52					$	4,035					$	7,234					$	27,413
SG&A			252						—						14						799						1,065
Total			$	16,344					$	52					$	4,049					$	8,033					$	28,478

The following represents the activity, primarily severance charges from reductions in force, related to the restructuring reserves for the nine months ended September 30, 2021 and 2020:

(Amounts in thousands)			2021						2020
Balance at January 1			$	18,255					$	6,703
Charges, net of adjustments			6,423						17,986
Cash expenditures			(16,999)						(4,772)
Other non-cash adjustments, including currency			(1,039)						425
Balance at September 30			$	6,640					$	20,342

X

- References

No definition available.

+ Details

Name:	us-gaap_RestructuringAndRelatedActivitiesAbstract
Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 420
-URI http://asc.fasb.org/topic&trid=2175745

+ Details

Name:	us-gaap_RestructuringAndRelatedActivitiesDisclosureTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration