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Realignment and Transformation Programs | 12 Months Ended
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Dec. 31, 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 consolidated statements of income. The total investment in these activities is anticipated to be approximately $95 million and the majority of the charges were incurred in 2020 and 2021. There are certain other realignment activities that are being evaluated, but have not yet been finalized and therefore not included in total anticipated realignment investment above. 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 period ended December 31, 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, related to our realignment activities and Flowserve 2.0 Transformation charges.
| December 31, 2021
(Amounts in thousands) | FPD |  | FCD |  | Subtotal–Reportable Segments |  | All Other |  | Consolidated Total
Restructuring Charges |  |  |  |  |  |  |  |  |
COS | $ | 8,046 |  |  | $ | 811 |  |  | $ | 8,857 |  |  | $ | — |  |  | $ | 8,857 |
SG&A(1) | 665 |  |  | (9) |  |  | 656 |  |  | — |  |  | 656 |
| $ | 8,711 |  |  | $ | 802 |  |  | $ | 9,513 |  |  | $ | — |  |  | $ | 9,513 |
Non-Restructuring Charges |  |  |  |  |  |  |  |
COS | $ | 6,203 |  |  | $ | 1,196 |  |  | $ | 7,399 |  |  | $ | 590 |  |  | $ | 7,989 |
SG&A | 368 |  |  | 708 |  |  | 1,076 |  |  | 3,913 |  |  | 4,989 |
| $ | 6,571 |  |  | $ | 1,904 |  |  | $ | 8,475 |  |  | $ | 4,503 |  |  | $ | 12,978 |
Total Realignment Charges |  |  |  |  |  |
COS | $ | 14,249 |  |  | $ | 2,007 |  |  | $ | 16,256 |  |  | $ | 590 |  |  | $ | 16,846 |
SG&A | 1,033 |  |  | 699 |  |  | 1,732 |  |  | 3,913 |  |  | 5,645 |
Total | $ | 15,282 |  |  | $ | 2,706 |  |  | $ | 17,988 |  |  | $ | 4,503 |  |  | $ | 22,491 |
| December 31, 2020
(Amounts in thousands) | FPD |  | FCD |  | Subtotal–Reportable Segments |  | All Other |  | Consolidated Total
Restructuring Charges |  |  |  |  |  |  |  |  |
COS | $ | 19,510 |  |  | $ | 1,122 |  |  | $ | 20,632 |  |  | $ | — |  |  | $ | 20,632 |
SG&A | 156 |  |  | 335 |  |  | 491 |  |  | (16) |  |  | 475 |
| $ | 19,666 |  |  | $ | 1,457 |  |  | $ | 21,123 |  |  | $ | (16) |  |  | $ | 21,107 |
Non-Restructuring Charges |  |  |  |  |  |  |  |
COS | $ | 19,328 |  |  | $ | 7,285 |  |  | $ | 26,613 |  |  | $ | 52 |  |  | $ | 26,665 |
SG&A | 11,166 |  |  | 4,605 |  |  | 15,771 |  |  | 18,527 |  |  | 34,298 |
| $ | 30,494 |  |  | $ | 11,890 |  |  | $ | 42,384 |  |  | $ | 18,579 |  |  | $ | 60,963 |
Transformation Charges |  |  |  |  |  |  |  |  |
SG&A | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 22,719 |  |  | $ | 22,719 |
| $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 22,719 |  |  | $ | 22,719 |
Total Realignment and Transformation Charges |  |  |  |  |  |
COS | $ | 38,838 |  |  | $ | 8,407 |  |  | $ | 47,245 |  |  | $ | 52 |  |  | $ | 47,297 |
SG&A | 11,322 |  |  | 4,940 |  |  | 16,262 |  |  | 41,230 |  |  | 57,492 |
Total | $ | 50,160 |  |  | $ | 13,347 |  |  | $ | 63,507 |  |  | $ | 41,282 |  |  | $ | 104,789 |
The following is a summary of total inception to date charges, net of adjustments, related to the Realignment Program initiated in 2020:
| Inception to Date
(Amounts in thousands) | FPD |  | FCD |  | Subtotal–Reportable Segments |  | All Other |  | Consolidated Total
Restructuring Charges |  |  |  |  |  |  |  |
COS | $ | 25,875 |  |  | $ | 2,037 |  |  | $ | 27,912 |  |  | $ | — |  |  | $ | 27,912 |
SG&A | 716 |  |  | 333 |  |  | 1,049 |  |  | (17) |  |  | 1,032 |
| $ | 26,591 |  |  | $ | 2,370 |  |  | $ | 28,961 |  |  | $ | (17) |  |  | $ | 28,944 |
Non-Restructuring Charges |  |  |  |  |  |  |  |
COS | $ | 25,407 |  |  | $ | 723 |  |  | $ | 26,130 |  |  | $ | 642 |  |  | $ | 26,772 |
SG&A | 11,049 |  |  | 5,262 |  |  | 16,311 |  |  | 21,795 |  |  | 38,106 |
| $ | 36,456 |  |  | $ | 5,985 |  |  | $ | 42,441 |  |  | $ | 22,437 |  |  | $ | 64,878 |
Total Realignment Charges |  |  |  |  |  |  |  |
COS | $ | 51,282 |  |  | $ | 2,760 |  |  | $ | 54,042 |  |  | $ | 642 |  |  | $ | 54,684 |
SG&A | 11,765 |  |  | 5,595 |  |  | 17,360 |  |  | 21,778 |  |  | 39,138 |
Total | $ | 63,047 |  |  | $ | 8,355 |  |  | $ | 71,402 |  |  | $ | 22,420 |  |  | $ | 93,822 |
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 related to our 2020 Realignment Program:
| December 31, 2021
(Amounts in thousands) | Severance |  | Contract Termination |  | Asset Write-Downs |  | Other |  | Total
COS | $ | 964 |  |  | $ | 34 |  |  | $ | 2,683 |  |  | $ | 5,176 |  |  | $ | 8,857 |
SG&A | 167 |  |  | — |  |  | — |  |  | 489 |  |  | 656 |
Total | $ | 1,131 |  |  | $ | 34 |  |  | $ | 2,683 |  |  | $ | 5,665 |  |  | $ | 9,513 |
| December 31, 2020
(Amounts in thousands) | Severance |  | Contract Termination |  | Asset Write-Downs |  | Other |  | Total
COS | $ | 16,927 |  |  | $ | 52 |  |  | $ | 1,409 |  |  | $ | 2,244 |  |  | $ | 20,632 |
SG&A | 223 |  |  | — |  |  | 11 |  |  | 241 |  |  | 475 |
Total | $ | 17,150 |  |  | $ | 52 |  |  | $ | 1,420 |  |  | $ | 2,485 |  |  | $ | 21,107 |
The following is a summary of total inception to date 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 | $ | 16,202 |  |  | $ | 86 |  |  | $ | 4,095 |  |  | $ | 7,529 |  |  | $ | 27,912 |
SG&A | 251 |  |  | — |  |  | 14 |  |  | 767 |  |  | 1,032 |
Total | $ | 16,453 |  |  | $ | 86 |  |  | $ | 4,109 |  |  | $ | 8,296 |  |  | $ | 28,944 |
The following represents the activity, primarily severance, related to the restructuring reserve for the Realignment Programs for the years ended December 31, 2021 and 2020:
(Amounts in thousands) | 2021 |  | 2020
Balance at January 1, | $ | 18,255 |  |  | $ | 6,703 |
Charges | 6,829 |  |  | 19,686 |
Cash expenditures | (18,942) |  |  | (9,146) |
Other non-cash adjustments, including currency | (1,274) |  |  | 1,012 |
Balance at December 31, | $ | 4,868 |  |  | $ | 18,255 |

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- 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -URI http://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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