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Realignment and Transformation Programs | 12 Months Ended
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Dec. 31, 2024
Restructuring and Related Activities [Abstract] |
Realignment and Transformation Programs | REALIGNMENT PROGRAMS In the second quarter of 2020, we identified and initiated certain realignment activities 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, referred to as the "2020 Realignment Program." As of December 31, 2022, the 2020 Realignment Program was substantially complete. In the first quarter of 2023, we identified and initiated certain realignment activities concurrent with the consolidation of our FPD aftermarket and pump operations into a single operating model. This consolidated operating model is designed to better align our go-to-market strategy with our product offerings, enable end-to-end lifecycle responsibility and accountability, and to facilitate more efficient operations. During 2023, we also initiated certain product and portfolio optimization activities. Additionally, we committed to an estimated $50 million in cost reduction efforts to begin in 2023. Collectively, the above realignment activities are referred to as the "2023 Realignment Programs." The activities of the 2023 Realignment Programs were identified and implemented in phases throughout 2023 and 2024. In the fourth quarter of 2024, we launched the complexity reduction ("CORE") program within the portfolio excellence category of the Flowserve Business System. The CORE program focuses on product rationalization and continuous improvement of our overall product portfolio and is referred to as the "CORE Realignment Program." Together with the 2023 Realignment Programs, all realignment activities initiated in 2023 and 2024 are referred to as the "2023 and CORE Realignment Programs." 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 workforce reductions and professional service fees. Expenses are primarily reported in COS or SG&A, as applicable, in our consolidated statements of income. We currently anticipate a total investment in realignment activities that have been evaluated and initiated of approximately $134 million of which $45 million is estimated to be non-cash. There are certain remaining realignment activities that are currently being evaluated, but have not yet been approved and therefore are not included in the above anticipated total investment. Generally, the aforementioned charges will be paid in cash, except for asset write-downs, which are non-cash charges. The following is a summary of total charges, net of adjustments, incurred related to our 2023 and CORE Realignment Programs:
| December 31, 2024
(Amounts in thousands) | FPD |  | FCD |  | Subtotal–Reportable Segments |  | All Other |  | Consolidated Total
Restructuring Charges |  |  |  |  |  |  |  |  |
COS | $ | 24,113 |  |  | $ | (1,364) |  |  | $ | 22,749 |  |  | $ | — |  |  | $ | 22,749 |
SG&A | 1,306 |  |  | 2,599 |  |  | 3,905 |  |  | (28) |  |  | 3,877 |
Loss on sale of business(1) | — |  |  | 12,981 |  |  | 12,981 |  |  | — |  |  | 12,981 |
| $ | 25,419 |  |  | $ | 14,216 |  |  | $ | 39,635 |  |  | $ | (28) |  |  | $ | 39,607 |
Non-Restructuring Charges |  |  |  |  |  |  |  |
COS | $ | 6,614 |  |  | $ | 2,440 |  |  | $ | 9,054 |  |  | $ | (228) |  |  | $ | 8,826 |
SG&A | (228) |  |  | 497 |  |  | 269 |  |  | 794 |  |  | 1,063 |
| $ | 6,386 |  |  | $ | 2,937 |  |  | $ | 9,323 |  |  | $ | 566 |  |  | $ | 9,889 |
Total Realignment Charges |  |  |  |  |  |
COS | $ | 30,727 |  |  | $ | 1,076 |  |  | $ | 31,803 |  |  | $ | (228) |  |  | $ | 31,575 |
SG&A | 1,078 |  |  | 3,096 |  |  | 4,174 |  |  | 766 |  |  | 4,940 |
Loss on sale of business(1) | — |  |  | 12,981 |  |  | 12,981 |  |  | — |  |  | 12,981 |
Total | $ | 31,805 |  |  | $ | 17,153 |  |  | $ | 48,958 |  |  | $ | 538 |  |  | $ | 49,496 |
__________________________________ (1) Loss on sale of business related to NAF AB control valves business as described within Note 1, "Significant Accounting Policies and Accounting Developments," to our consolidated financial statements included in this Annual Report.
| December 31, 2023
(Amounts in thousands) | FPD |  | FCD |  | Subtotal–Reportable Segments |  | All Other |  | Consolidated Total
Restructuring Charges |  |  |  |  |  |  |  |  |
COS | $ | 2,962 |  |  | $ | 6,405 |  |  | $ | 9,367 |  |  | $ | 66 |  |  | $ | 9,433 |
SG&A | 50 |  |  | 9,777 |  |  | 9,827 |  |  | — |  |  | 9,827 |
| $ | 3,012 |  |  | $ | 16,182 |  |  | $ | 19,194 |  |  | $ | 66 |  |  | $ | 19,260 |
Non-Restructuring Charges |  |  |  |  |  |  |  |
COS | $ | 7,835 |  |  | $ | 4,171 |  |  | $ | 12,006 |  |  | $ | (427) |  |  | $ | 11,579 |
SG&A | 14,483 |  |  | 1,616 |  |  | 16,099 |  |  | 19,099 |  |  | 35,198 |
| $ | 22,318 |  |  | $ | 5,787 |  |  | $ | 28,105 |  |  | $ | 18,672 |  |  | $ | 46,777 |
Total Realignment Charges |  |  |  |  |  |
COS | $ | 10,797 |  |  | $ | 10,576 |  |  | $ | 21,373 |  |  | $ | (361) |  |  | $ | 21,012 |
SG&A | 14,533 |  |  | 11,393 |  |  | 25,926 |  |  | 19,099 |  |  | 45,025 |
Total | $ | 25,330 |  |  | $ | 21,969 |  |  | $ | 47,299 |  |  | $ | 18,738 |  |  | $ | 66,037 |
The following is a summary of total charges, net of adjustments, incurred related to our 2020 Realignment Program:
| December 31, 2022
(Amounts in thousands) | FPD |  | FCD |  | Subtotal–Reportable Segments |  | All Other |  | Consolidated Total
Restructuring Charges |  |  |  |  |  |  |  |  |
COS | $ | 768 |  |  | $ | 93 |  |  | $ | 861 |  |  | $ | — |  |  | $ | 861 |
SG&A | — |  |  | (4) |  |  | (4) |  |  | — |  |  | (4) |
| $ | 768 |  |  | $ | 89 |  |  | $ | 857 |  |  | $ | — |  |  | $ | 857 |
Non-Restructuring Charges |  |  |  |  |  |  |  |
COS | $ | (530) |  |  | $ | 86 |  |  | $ | (444) |  |  | $ | (61) |  |  | $ | (505) |
SG&A | 148 |  |  | (391) |  |  | (243) |  |  | (274) |  |  | (517) |
| $ | (382) |  |  | $ | (305) |  |  | $ | (687) |  |  | $ | (335) |  |  | $ | (1,022) |
Total Realignment Charges |  |  |  |  |  |
COS | $ | 238 |  |  | $ | 179 |  |  | $ | 417 |  |  | $ | (61) |  |  | $ | 356 |
SG&A | 148 |  |  | (395) |  |  | (247) |  |  | (274) |  |  | (521) |
Total | $ | 386 |  |  | $ | (216) |  |  | $ | 170 |  |  | $ | (335) |  |  | $ | (165) |
The following is a summary of total inception to date charges, net of adjustments, related to the 2023 Realignment Programs:
| Inception to Date
(Amounts in thousands) | FPD |  | FCD |  | Subtotal–Reportable Segments |  | All Other |  | Consolidated Total
Restructuring Charges |  |  |  |  |  |  |  |
COS | $ | 27,076 |  |  | $ | 5,041 |  |  | $ | 32,117 |  |  | 66 |  |  | $ | 32,183 |
SG&A | 1,355 |  |  | 12,376 |  |  | $ | 13,731 |  |  | (28) |  |  | 13,703 |
Loss on sale of business(1) | — |  |  | 12,981 |  |  | $ | 12,981 |  |  | — |  |  | 12,981 |
| $ | 28,431 |  |  | $ | 30,398 |  |  | $ | 58,829 |  |  | $ | 38 |  |  | $ | 58,867 |
Non-Restructuring Charges |  |  |  |  |  |  |  |
COS | $ | 11,506 |  |  | $ | 6,612 |  |  | $ | 18,118 |  |  | $ | (655) |  |  | $ | 17,463 |
SG&A | 14,256 |  |  | 2,112 |  |  | 16,368 |  |  | 19,893 |  |  | 36,261 |
| $ | 25,762 |  |  | $ | 8,724 |  |  | $ | 34,486 |  |  | $ | 19,238 |  |  | $ | 53,724 |
Total Realignment Charges |  |  |  |  |  |  |  |
COS | $ | 38,582 |  |  | $ | 11,653 |  |  | $ | 50,235 |  |  | $ | (589) |  |  | $ | 49,646 |
SG&A | 15,611 |  |  | 14,488 |  |  | 30,099 |  |  | 19,865 |  |  | 49,964 |
Loss on sale of business(1) | — |  |  | 12,981 |  |  | 12,981 |  |  | — |  |  | 12,981 |
Total | $ | 54,193 |  |  | $ | 39,122 |  |  | $ | 93,315 |  |  | $ | 19,276 |  |  | $ | 112,591 |
__________________________________ (1) Loss on sale of business related to NAF AB control valves business as described within Note 1, "Significant Accounting Policies and Accounting Developments," to our consolidated financial statements included in this Annual Report. The following is a summary of total inception to date charges, net of adjustments, related to the CORE Realignment Program:
| Inception to Date
(Amounts in thousands) | FPD |  | FCD |  | Subtotal–Reportable Segments |  | All Other |  | Consolidated Total
Restructuring Charges |  |  |  |  |  |  |  |
COS | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
SG&A | — |  |  | — |  |  | — |  |  | — |  |  | — |
| $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Non-Restructuring Charges |  |  |  |  |  |  |  |
COS | $ | 2,942 |  |  | $ | — |  |  | $ | 2,942 |  |  | $ | — |  |  | $ | 2,942 |
SG&A | — |  |  | — |  |  | — |  |  | — |  |  | — |
| $ | 2,942 |  |  | $ | — |  |  | $ | 2,942 |  |  | $ | — |  |  | $ | 2,942 |
Total Realignment Charges |  |  |  |  |  |  |  |
COS | $ | 2,942 |  |  | $ | — |  |  | $ | 2,942 |  |  | $ | — |  |  | $ | 2,942 |
SG&A | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total | $ | 2,942 |  |  | $ | — |  |  | $ | 2,942 |  |  | $ | — |  |  | $ | 2,942 |
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 or impairment of fixed assets, accelerated amortization or impairment 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. Restructuring charges include charges related to approved, but not yet announced, facility closures. The following is a summary of restructuring charges, net of adjustments, for our restructuring activities related to our 2023 Realignment Programs:
| December 31, 2024
(Amounts in thousands) | Severance |  | Contract Termination |  | Asset Write-Downs |  | Other |  | Total
COS | $ | 7,078 |  |  | $ | — |  |  | $ | 12,861 |  |  | $ | 2,809 |  |  | $ | 22,748 |
SG&A | 158 |  |  | — |  |  | 3,750 |  |  | (30) |  |  | 3,878 |
Loss on sale of business(1) | — |  |  | — |  |  | — |  |  | 12,981 |  |  | 12,981 |
Total | $ | 7,236 |  |  | $ | — |  |  | $ | 16,611 |  |  | $ | 15,760 |  |  | $ | 39,607 |
__________________________________ (1) Loss on sale of business related to NAF AB control valves business as described within Note 1, "Significant Accounting Policies and Accounting Developments," to our consolidated financial statements included in this Annual Report.
| December 31, 2023
(Amounts in thousands) | Severance |  | Contract Termination |  | Asset Write-Downs |  | Other |  | Total
COS | $ | 7,085 |  |  | $ | 301 |  |  | $ | 794 |  |  | $ | 1,253 |  |  | $ | 9,433 |
SG&A | 950 |  |  | — |  |  | 8,871 |  |  | 6 |  |  | 9,827 |
Total | $ | 8,035 |  |  | $ | 301 |  |  | $ | 9,665 |  |  | $ | 1,259 |  |  | $ | 19,260 |
The following is a summary of restructuring charges, net of adjustments, for our restructuring activities related to our 2020 Realignment Program:
| December 31, 2022
(Amounts in thousands) | Severance |  | Contract Termination |  | Asset Write-Downs |  | Other |  | Total
COS | $ | 122 |  |  | $ | 327 |  |  | $ | 273 |  |  | $ | 139 |  |  | $ | 861 |
SG&A | (4) |  |  | — |  |  | — |  |  | — |  |  | (4) |
Total | $ | 118 |  |  | $ | 327 |  |  | $ | 273 |  |  | $ | 139 |  |  | $ | 857 |
The following is a summary of total inception to date restructuring charges, net of adjustments, related to our 2023 Realignment Programs:
| Inception to Date
(Amounts in thousands) | Severance |  | Contract Termination |  | Asset Write-Downs |  | Other |  | Total
COS | $ | 14,164 |  |  | $ | 301 |  |  | $ | 13,655 |  |  | $ | 4,063 |  |  | $ | 32,183 |
SG&A | 1,106 |  |  | — |  |  | 12,621 |  |  | (24) |  |  | 13,703 |
Loss on sale of business(1) | — |  |  | — |  |  | — |  |  | 12,981 |  |  | 12,981 |
Total | $ | 15,270 |  |  | $ | 301 |  |  | $ | 26,276 |  |  | $ | 17,020 |  |  | $ | 58,867 |
__________________________________ (1) Loss on sale of business related to NAF AB control valves business as described within Note 1, "Significant Accounting Policies and Accounting Developments," to our consolidated financial statements included in this Annual Report. There are no restructuring charges related to our CORE Realignment Program. The following represents the activity, primarily severance charges from reductions in workforce, related to the restructuring reserve for the 2023 Realignment Programs for the years ended December 31, 2024 and 2023:
(Amounts in thousands) | 2024 |  | 2023
Balance at January 1, | $ | 8,184 |  |  | $ | 965 |
Charges | 10,129 |  |  | 9,594 |
Cash expenditures | (8,050) |  |  | (2,110) |
Other non-cash adjustments, including currency | (1,963) |  |  | (265) |
Balance at December 31, | $ | 8,300 |  |  | $ | 8,184 |

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