CIRCOR International, Inc. was incorporated under the laws of Delaware on July 1, 1999. As used in this report, the terms “we,” “us,” “our,” the “Company” and “CIRCOR” mean CIRCOR International, Inc. and its subsidiaries (unless the context indicates another meaning). The term “common stock” means our common stock, par value $0.01 per share.

We design, manufactureCIRCOR designs, manufactures and marketmarkets differentiated technology products and sub-systems for markets includingthe industrial oil & gas,and aerospace and defense and commercial marine. CIRCOR hasmarkets. We have a diversified flow and motion control product portfolio with recognized, market-leading brands that fulfill itsour customers’ mission critical and severe service needs. The Company’s strategy is to grow organically through innovative product development (including digital products), aftermarket growth, penetrating new regions, margin expansion and through complementary acquisitions; simplify CIRCOR’s operations; achieve world class operational excellence; and attractbuild an inclusive, growth-oriented culture that attracts and retain top industryretains a diverse group of talent. We have a global presence and operate 2821 major manufacturing facilities that are located in North America, Western Europe, Morocco, China and India. The Company has the following reportable business segments: Industrial segment (“Industrial segment”Industrial”), Energy ("Energy segment" or "Energy"), and Aerospace & Defense segment (“Aerospace & Defense segment”Defense”). We sell our products through distributors, representatives, Engineering, Procurement and Construction ("EPC") companies, as well as directly to end-user customers and original equipment manufacturers (“OEMs”)., as well as through Engineering, Procurement and Construction (“EPC”) companies and our channel partner network.

Our objective is to enhance shareholderstockholder value by focusing on organic growth, margin expansion, strongimproving free cash flow and disciplinedfocused capital deployment. We have a four-pointOur strategy to achieve these objectives.objectives is to:

We areOur technology is focused on satisfying our customers’ mission-critical application needs by utilizing advanced technologies. Our flow control solutions can withstand extreme temperatures and pressures, and as such are usedmoving the most difficult fluids with extremely high efficiency for critical applications in the most criticalgeneral industrial, power, process, energy, and severe service applications. Our installations include land-based, topside, and sub-sea oil and gas production, refining and petrochemical process control, oil sand processing, critical pressure control and cryogenic applications.commercial marine end markets.

We plan to grow Energythe Industrial segment by expandingimproving our capabilitiesunderstanding of our customers and their challenges and providing innovative new products, including digital products, in Oil & Gas both organicallymultiple product lines that address our customers' severe service and inorganically acrossmission critical needs. We are driving growth regionally and developing products in-region, for-region. We are using multiple digital tools, including a new CIRCOR app, to support our customers in the Oil & Gas and Petrochemical markets.aftermarket. The Industrial segment is also focused

Industrial is headquartered in Houston, Texas and hasRadolfzell, Germany, with primary manufacturing facilitiescenters in North America, the United Kingdom, Italy,England, Germany, India, and the Netherlands.China.

Industrial's products and services are sold directly to end-user customers, such as major oil companies,end-users, OEMs that supply specialized systems in their respective end markets, and EPC companies and distributors, through a global network of indirect sales channels that include direct sales, sales representatives, and agents.channels.

Aerospace & Defense is aproduces diversified and innovative flow control technology platform.products. Our primary product focus areas are valves, pumps, actuation, motors, switches and high pressure pneumatic systems.

We plan to grow Aerospace & Defense by increasing market share in existing and new markets through exceptional sales and customer service and with new products enabled by innovative, reliable and high quality solutions. Product portfolio expansion through acquisitions of differentiated technologies in current and adjacent applications is also aA key part of our strategy is the development of a strong technology team that can use our core technology to accelerate new product development. We are exploring adjacency applications for our core technology and opportunities to increase our aftermarket sales. Our growth strategy.will also be driven by margin expansion, through increased manufacturing capabilities at our lower cost facility in Morocco, adoption of the COS by our sites and value pricing initiatives.

We have Aerospace & Defense facilities in North America, the United Kingdom, France, Morocco, and India. Our Aerospace & Defense headquarters is in Corona, California.

Aerospace & Defense manufactures and markets control valves, automatic recirculation valves,pumps, regulators, fluid controls, actuation systems, landing gear components, pneumatic valves and controls, electro-mechanical controls, motors and other flow control products and systems. Aerospace & Defense provides actuation and fluid control systems and services through the following brands: CIRCOR Aerospace, Aerodyne Controls, CIRCOR Bodet, CIRCOR Industria, CIRCOR Motors, Hale Hamilton, Leslie Controls, Portland Valve, and Warren Pumps.

In the manufacture of our products, we must comply with certain certification standards, such as AS9100C, ISO 9001:2008, National Aerospace & Defense Contractors Accreditation Program, Federal Aviation Administration Certification and European Aviation Safety Agency as well as other customer qualification standards. Currently all of our manufacturing facilities comply with the applicable standards.

Aerospace & Defense products and services are used bysold directly and indirectly to a range of customers, including those in the military and defense, commercial aerospace, business and general aviation and general industrial markets. Our customers include aircraft manufacturers (OEMs) and Tier 1 suppliers to these customers.

The domestic and international markets for our products are highly competitive. Some of our competitors have substantially greater financial, marketing, personnel and other resources than us. We consider product brand, quality, performance, on-time delivery, customer service, price, distribution capabilities and breadth of product offerings to be the primary competitive factors in these markets. We believe that new product development and product engineering also are important to our success and that our position in the industry is attributable, in significant part, to our ability to develop innovative products and to adapt existing products to specific customer applications. Our ability to leverage our large installed base of equipment to drive repairs and spares growth is a competitive advantage.

The primary competitors of our Industrial segment include: Leistritz AG, Curtiss-Wright Corporation, Netzsch GmbH, ITT Corporation, IMI plc, SPX Flow, Inc., Seepex GmbH, and Naniwa Ltd.

Our engineering differentiation comes from our ability to offer products, solutions and services that address high pressure, high temperature, and caustic flow. Our solutions offer high standards of reliability, safety and durability in applications requiring precision movement and zero leakage.

We continue to develop new and innovative products to enhance our market positions.positions and drive growth. Our product development capabilities include designing and manufacturing custom applicationssolutions to meet high tolerance or close precision requirements. For example, our Energy segment operation can meet the tolerance requirements of sub-sea, cryogenic environments as well as critical service steam applications. Our Aerospace & Defense segment continues to expand its integrated systems design and testing capability to support bundled sub-systems for aeronautics applications, as well as acoustically superior motorspumps for marine applications. These testing and manufacturing capabilities enable us to develop customer-specified applications. In many cases, the unique characteristics of our customer-specified technologies have been subsequently used in broader product offerings. The Industrial segment provides unique fluid handlingflow control products for viscous and critical fluids with specific design and engineering capabilities, as well as highly differentiated smart technology for specific applications.capabilities.

We maintain a Global Engineering Center of Excellence in India with a capable technology and engineering team that complements the engineering resources in a business unit.

For the years ended December 31, 2018, 2017,2021 and 2016, we had2020, no customers from which we derive revenues that exceedaccounted for more than 10% of the Company’s consolidated revenues. Our businesses sell into both long-term capital projects as well as short-cycle demand. As a result, we tend to experience fluctuations in orders, revenues and operating results at various points across economic and business cycles. Our Energy businesses can be cyclical in nature due to the fluctuation of the worldwide price, supply and demand for oil and gas. When the worldwide demand for oil and gas is depressed, the demand for our products used in those markets decreases as our customers with higher production costs will cut back investment and reduce purchases from us. The number of active rigs and wells drilled in North American short-cycle Oil & Gas market is a strong indicator of demand especially for our distributed valves products. In addition, the level of capital expenditures by national oil companies or the oil majors in exploration and production activities drive demand for our long cycle, engineered valves products. Maintenance expenditures during refinery turnarounds drive demand for our refinery valve products. Similarly, although not to the same extent as the Oil & Gas markets, the aerospace, military and maritime markets have historically experienced cyclical fluctuations in demand.

Across our businesses we utilize a variety of channels to market our products and solutions. Those channels include direct sales, distributors and commissioned representatives, and our service centers.representatives. Our distribution and representative networkschannel partner network typically offeroffers technically trained sales forces with strong relationships in key markets.

We ownThe Company relies upon a combination of trade secrets and patent and trademark registrations to protect its intellectual property. Our patents that are scheduled to expire between 20192022 and 20302038, and our trademarks that can be renewed as long as we continue to use them. We do not believe the vitality and competitiveness of any of our business segments as a whole depends on any one or more patents or trademarks. We own certain licenses such as software licenses, but we do not believe that our business as a whole depends on any one or more licenses.

The raw materials used most often in our production processes are castings, forgings and bar stock of various materials, including stainless steel, carbon steel, bronze, copper, brass, titanium and aluminum. These materials are subject to price fluctuations that may adversely affect our results of operations. We purchase these materials from numerous suppliers and at times experience constraints on the supply of certain raw material as well as the inability of certain suppliers to respond to our needs. Historically, increases in the prices of raw materials have been partially offset by higher sales prices, active materials management, project engineering programs and the diversity of materials used in our production processes.

As of JanuaryDecember 31, 2021, CIRCOR had 3,120, employees, of whom approximately 98% are full-time. 43% of this workforce was in Europe, 40% in the United States, 11% in India and the rest spread across the rest of Asia, the Middle East and Latin America.

On March 13, 2022, we reached a determination that our previously issued consolidated financial statements and related disclosures for (i) the years ended December 31, 2018, December 31, 2019 and December 31, 2020 included in our worldwide operations directly employed approximately 4,400 people.Annual Reports on Form 10-K, (ii) each of the quarterly and year-to-date periods for 2020 and (iii) the quarterly and year-to-date periods for the nine months ended October 3, 2021 should no longer be relied upon because of certain misstatements contained in those consolidated financial statements. We have 96 employeesdiscussed the matters with Ernst & Young LLP, our independent registered public accounting firm for the fiscal year 2020 through the current fiscal year and with PricewaterhouseCoopers LLP, our independent registered public accounting firm for fiscal year 2019 and prior fiscal periods, and determined to restate our audited consolidated financial statements for the years ended December 31, 2020 and December 31, 2019, and our interim financial statements for the first, second, and third quarters of 2021 and 2020. The misstatements are described in North America who are covered by two collective bargaining agreements. We also havegreater detail in Notes 2 and 23 of the following employees covered by governmental regulations or workers' councils:Notes to the Consolidated Financial Statements included in Part II, Item 8, Financial Statements and Supplementary Data, within this Annual Report on Form 10-K.

We file reports on Form 10-Q with the Securities and Exchange Commission ("SEC")SEC on a quarterly basis, additional reports on Form 8-K from time to time, and an annual report on Form 10-K on an annual basis. These and other reports filed by us, or furnished by us, to the SEC in accordance with section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge from the SEC on its website at http://www.sec.gov. Additionally, our Form 10-Q, Form 8-K, Form 10-K and amendments to those reports are available without charge, as soon as reasonably practicable after they have been filed with, or furnished to, the SEC, on our Investor Relations website at http://investors.CIRCOR.com. The information on our website is not part of, or incorporated by reference in, this Annual Report.

We operate in a highly competitive environment in each of the markets we serve, and we face significant competition from a variety of competitors in each of our markets. Some of our competitors have substantially greater financial, marketing, personnel and other resources than we do. New competitors also could enter our markets.segments from numerous competitors. We consider product innovation, product quality, performance, customer service, on-time delivery, price, distribution capabilities and breadth of product offerings to be the primary competitive factors in our markets. Our competitors may be able to offer more attractive pricing, duplicate our strategies, or develop enhancements to products that could offer performance features that are superior to our products. Competitive pressures, including those described above, and other factors could adversely affect our competitive position, resulting in a loss of market share or decreases in prices, either of which could have a material adverse effect on our business, financial condition, cash flows or results of operations. In addition, some of our competitors are based in foreign countries and have cost structures and prices based on foreign currencies.

We operate a number of manufacturing facilities for the production of our products. The equipment and management systems necessary for such operations may break down, perform poorly or fail, resulting in fluctuations in manufacturing efficiencies. Such fluctuations may affect our ability to deliver products to our customers on a timely basis, which could have a material adverse effect on our business, financial condition, cash flows or results of operations. We haveare working to continuously enhancedenhance and improved Leanimprove lean manufacturing techniques as part of the CIRCOR Operating System.COS. We believe that this process produces meaningful reductions in manufacturing costs. However, continuous improvement of these techniques may cause short-term inefficiencies in production. If we ultimately are unable tonot successful in continuously improveimproving our processes, our results of operations may suffer.

Our acquisitionFurther, a catastrophic event could result in the loss of the fluid handlinguse of all or a portion of one of our manufacturing facilities. Although we carry property and business of Colfax Corporation (FH) and the integration of its business, operations and employees withinterruption insurance, our own may be more difficult, costly or time consuming than expected, and the anticipated benefits and cost savings of the acquisitioncoverage may not be fully realized,adequate to compensate us for all losses that may occur. Any of these events individually or in the aggregate could have a material adverse effect on our business, financial condition and operating results.

other difficulties, such as an inability to attract a sufficient number of qualified engineers, which could adversely impactdelay or prevent our development, introduction or marketing of new products or enhancements and result in unexpected expenses.

We completedrely on information technology networks and systems, including systems of third parties and the acquisitionInternet, to process, transmit and store electronic information, and manage or support a variety of FHbusiness processes, including operational and financial transactions and records, personal identifying information, payroll data and workforce scheduling information. We purchase some of our information technology from vendors, on December 11, 2017. The successwhom our systems depend. We rely on commercially available systems, software, tools and monitoring to provide security for the processing, transmission and storage of Company and customer information. Although we have taken steps to protect the acquisition, including the achievementsecurity of anticipated benefits and cost savings of the acquisition, is subject to a number of uncertainties and will depend, in part, on our ability to successfully combine and integrate FH's business into our business in an efficient and effective manner. Potential difficulties that we may encounter in the integration process include the following:

When Company, personal or otherwise protected information is improperly accessed, tampered with or distributed, we face significant financial exposure, including incurring significant acquisition-related costs and expenses;

The situation relating to the COVID-19 pandemic and its potential effects on various factors, including our ability to effectively transfer liabilities, contracts, facilities and employees to any purchaser, identify and separate the intellectual property to be divested from the intellectual property that we wish to retain, reduce fixed costs previously associated with the divested assets or business and collectfinancial results remains dynamic. The broader implications for our business and results of operations remain uncertain and will depend on many factors outside our control, including, without limitation, the proceeds from any divestitures. In addition, if customerstiming, extent, trajectory and duration of the divested business do not receivepandemic, the same leveldevelopment, availability and effectiveness of service fromtreatments and vaccines, the new owners, this may adversely affect our other businesses to the extent that these customers also purchase other products offered by us. Allimposition of these efforts require varying levels of management resources, which may divert our attention from other business operations.

We derive a significant portion of our revenue from sales outside the United States. In addition, one of our key growth strategies is to sell our products in international markets not significantly served by us in portions of Europe, Latin America and Asia. We market our products and services outside of the United States through direct sales, distributors, and technically trained commissioned representatives. We may not succeed in our efforts to further penetrate these markets. Moreover, conducting business outside the United States is subject to additional risks, including currency exchange rate fluctuations; changes or instability in regional, political or economic conditions, outbreak of war or expansion of hostilities, trade protection measures such as tariffs or import or export restrictions; and complex, varying and changing government regulations and legal standards and requirements, particularly with respect to price protection, competition practices, export control regulations and restrictions, customs and tax requirements, immigration, anti-boycott regulations, data privacy, intellectual property, anti-corruption and environmental compliance, including U.S. customs and export regulations and restrictions and the Foreign Corrupt Practices Act,Act. Additionally, the U.S. Government continues to impose and/or consider imposing sanctions on certain businesses and persons in Russia. We continue to monitor and evaluate additional sanctions and export restrictions that may be imposed by the U.S. Government and any responses from Russia that could directly affect our supply chain, or our ability to continue delivering products to or receiving payments from our business partners or customers, including customers who may decide to completely withhold contract payments owed to us. The occurrence of any of these factors could materially and adversely affect our operations.

Our international manufacturing and sales activities expose us to changes in foreign currency exchange rates. Our major foreign currency exposures involve the markets in Western Europe and Canada.Asia. Fluctuations in foreign currency exchange rates could result in our (i) paying higher prices for certain imported goods and services, (ii) realizing lower prices for any sales denominated in currencies other than U.S. dollars, (iii) realizing lower net income, on a U.S. dollar basis, from our international operations due to the effects of translation from weakened functional currencies, and (iv) realizing higher costs to settle transactions denominated in other currencies. Any of these risks could adversely affect our results of operations and cash flows. Our major foreign currency exposures involve the markets in Western Europe and Canada.

We may use forward contractsderivatives to help manage the currency risk related to certain business transactions denominated in foreign currencies. We primarily utilize forward exchange contracts with maturities of less than eighteen months. To the extent these transactions are completed, the contracts minimize our risk from exchange rate fluctuations because they offset gains and losses on the related foreign currency denominated transactions.derivatives. However, there can be no assurances that we will be able to effectively utilize these forward exchange contracts in the future to offset significant risk related to fluctuations in currency exchange rates. In addition, there can be no assurances that counterparties to such contracts will perform their contractual obligations to us in order for us to realize the anticipated benefits of the contracts.

Like most manufacturers of flow control products, we attempt, where appropriate, to reduce costs by seeking lower cost sources of certain components and finished products. Many such sources are located in developing countries such as India and China, where a change in governmental approach toward U.S. trade could restrict the availability to us of such sources. In addition, periods of war or ifother international tension and global health pandemics could interfere with international freight operations and hinder our existingability to purchase such components and products. A decrease in the availability of these items could hinder our ability to timely meet our customers’ orders. We attempt, when possible, to maintain alternate sources for these components and products and the capability to produce such items in our own manufacturing facilities. However, the cost of obtaining such items from alternate sources or new products do not achieve or maintain market acceptance,producing them ourselves is often considerably greater, and a shift toward such higher cost production could therefore adversely affect our revenues may decrease.profitability.

We believe our futureOur continued success depends, in part, on our ability to anticipate or adaptidentify, attract, motivate, train and retain qualified personnel in key functions and geographic areas, including the members of our senior management team. In particular, we are dependent on our ability to these factorsrecruit and retain qualified engineers with the requisite education, background and industry experience to offer, on a timely basis, products that meet customer demands. assist in the development, enhancement, introduction and manufacture of our products.

Failure to develop newattract, train and innovative products or to custom design existing products couldretain qualified personnel, whether as a result in the loss of existing customers to competitors or the inability to attract new business, either of which may adversely affect our revenues. The development of new or enhanced products is a complex and uncertain process requiring the anticipation of technological and market trends. We may experience design, manufacturing, marketing or other difficulties, such as an inability to attract a sufficientinsufficient number of qualified engineers, whichcandidates or the allocation of inadequate resources to training, integration and retention, could delay or preventimpair our development, introduction or marketing of new products or enhancementsability to execute our business strategy and result in unexpected expenses.

We, like other manufacturers, face an inherent risk of exposure to product liability claims in the event that the use of our products results in personal injury, property damage or business interruption to our customers. We may be subjected to various product liability claims, including, among others, asbestos-related claims, claims that our products include inadequate or improper instructions for use or installation, or inadequate warnings concerning the effects of the failure of our products. Although we maintain quality controls and procedures, including the testing of raw materials and safety testing of selected finished products, we cannot be certain that our products will be free from defect. In addition, in certain cases, we rely on third-party manufacturers for our products or components of our products. Although we have liability insurance coverage, we cannot be certain that this insurance coverage will continue to be available to us at a reasonable cost or, if available, will be adequate to cover any such liabilities. For example, liability insurance typically does not afford coverage for a design or manufacturing defect unless such defect results in injury to person or property. We generally attempt to contractually limit liability to our customers to risks that are insurable but are not always successful in doing so. Similarly, we generally seek to obtain contractual indemnification from our third-party suppliers, and for us to be added as an additional insured party under such parties’ insurance policies. Any such indemnification or insurance is limited by its terms and, as a practical matter, is limited to the credit worthiness of the indemnifying or insuring party. In the event that we do not have adequate insurance or contractual indemnification, product liabilities could have a material adverse effect on our business, financial condition, cash flows or results of operations.

We are subject to a variety of laws and international trade practices, including regulations issued by thecertain United States Bureau of Industrygovernmental agencies and Security,authorities in the Department of Homeland Security, the Department of State and the Department of Treasury.European Union. We cannot predict the nature, scope or effect of future regulatory requirements to which our international trading practices might be subject or the manner in which existing laws might be administered or interpreted. Future regulations could limit the countries into which certain of our products may be sold or could restrict our access to, and increase the cost of obtaining products from, foreign sources. We continue to monitor and evaluate additional sanctions and export restrictions that may be imposed by the U.S. Government with respect to Russia, and any responses from Russia, that could impact our business. Sanctions or restrictions could cause us to be unable to complete contractual commitments to end customers, cause our end customers to fail to compensate us for previously ordered or delivered products, or cause funds or products to be subjected to legal holds. The aggregate revenue from customers in Russia and Ukraine for each of the fiscal years ended 2021 and 2020 was less than 1% of consolidated net revenues, primarily related to our Downstream Oil & Gas business in the Industrial reporting segment. In addition, actual or alleged violations of such regulations could result in enforcement actions and/or financial penalties that could result in substantial costs.

There is currently significant uncertainty about the future relationship between the United States and China, including with respect to trade policies, treaties, government regulations and tariffs. The currentpast U.S. presidential administration hashad called for substantial changes to U.S. foreign trade policy and hashad implemented greater restrictions on international trade and significant increaseschanges in tariffs on goods imported into the U.S. Under the current status,administration, we expect that tariff increases will primarily impact [our] Distributed Valves product lines.our Industrial segment. We are unable to predict whether or when additional tariffs will be imposed or the impact of any such future tariff increases.changes.

We are subject to a variety of environmental laws relating to the storage, discharge, handling, emission, generation, use and disposal of chemicals, solid and hazardous waste and other toxic and hazardous materials used to manufacture, or resulting from the process of manufacturing, our products. We cannot predict the nature, scope or effect of future regulatory requirements to which our operations might be subject or the manner in which existing or future laws will be administered or interpreted. Future regulations could be applied to materials, products or activities that have not been subject to regulation previously. The costs of complying with new or more stringent regulations, or with more vigorous enforcement of these or existing regulations, could be significant.

Environmental laws require us to maintain and comply with a number of permits, authorizations and approvals and to maintain and update training programs and safety data regarding materials used in our processes. Violations of these requirements could result in financial penalties and other enforcement actions. We also could be required to halt one or more portions of our operations until a violation is cured. Although we attempt to operate in compliance with these environmental laws, we may not succeed in this effort at all times. The costs of curing violations or resolving enforcement actions that might be initiated by government authorities could be substantial.

Under the conflict minerals rule, public companies must disclose whether specified minerals, known as conflict minerals, are necessary to the functionality or production of products manufactured or contracted to be manufactured. The rule requires a disclosure report to be filed by May 31st of each year and requires companies to perform due diligence and disclose and report whether or not such minerals originate from the Democratic Republic of Congo or an adjoining country.year. The conflicts mineral rule could affect sourcing at competitive prices and availability in sufficient quantities of certain minerals used in the manufacture of our products, including tantalum, tin, gold and tungsten. The number of suppliers who provide conflict-free minerals may beis limited. In addition, there may be material costs associated with complying with the disclosure requirements, such as costs related to determining the source of certain minerals used in our products, as well as costs of possible changes to products, processes, or sources of supply as a consequence of such verification activities. As our supply chain is complex, we may not be able to sufficiently verify the origins of the relevant minerals used in our products through the due diligence procedures that we implement, which may harm our reputation. In addition, we may encounter challenges to satisfy those customers who require that all of the components of our products be certified as conflict-free, which could place us at a competitive disadvantage if we are unable to do so.

The trading price of our common stock may be, and, in the past, has been volatile. Our common stock could decline or fluctuate in response to a variety of factors, including, but not limited to: our failure to meet our performance estimates or performance estimates of securities analysts; changes in financial estimates of our revenues and operating results or buy/sell recommendations by securities analysts; the timing of announcements by us or our competitors concerning significant product line developments, contracts or acquisitions or publicity regarding actual or potential results or performance; fluctuation in our quarterly operating results caused by fluctuations in revenue and expenses; substantial sales of our common stock by our existing stockholders; general stock market conditions; and fluctuations in oil and gas prices or other economic or external factors. While we attempt in our public disclosures to provide forward-looking information in order to enable investors to anticipate our future performance, such information by its nature represents our good-faith forecasting efforts. As a result, our

Such measures might not be sufficient to enable us to service our debt, which could negatively impact our financial results. In addition, we may not be able to obtain any such financing, refinancing or complete a sale of assets on economically favorable terms. In the case of financing or refinancing, favorable interest rates will be dependent on the health of the debt capital markets and our credit rating.

We maintain 2821 major manufacturing facilities worldwide, including operations located in North America, Western Europe, Morocco, China, and India. We also maintain sales offices or warehouses from which we ship finished goods to customers, distributors and commissioned representative organizations. Our executive office is located in Burlington, Massachusetts and is leased.

Our Energy segment has major manufacturing facilities located in North America, Italy, United Kingdom, and the Netherlands. Properties in Nerviano, Italy and Spartanburg, South Carolina are leased. Our Aerospace & Defense segment has major manufacturing facilities located in North America, United Kingdom, Germany, France, India and Morocco. Properties in Hauppauge, New York and Corona, California are leased. Our Industrial segment has major facilities located in North America, Germany, India and Netherlands. Properties in Germany and India are leased.China.

In general, we believe that our properties, including machinery, tools and equipment, are in good condition, are well maintained, and are adequate and suitable for their intended uses. Our manufacturing facilities generally operate five days per week on one or two shifts. We believe our manufacturing capacity could be increased by working additional shifts and weekends and by successful implementation of our CIRCOR Operating System. We also have low-cost sources for manufacturing in Mexico, India and Morocco which have capacity to fulfill our expected manufacturing needs. We believe that our current facilities will meet our near-term production requirements without the need for additional facilities.

 

Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “CIR.”“CIR”.

Our Board of Directors is responsible for determining our dividend policy. The timing and level of any dividends will necessarily depend on our Board of Directors’ assessments of earnings, financial condition, capital requirements and other factors, including restrictions, if any, imposed by our lenders. On February 28, 2018, we announced the suspension of our nominal dividend, as part of our capital deployment strategy.

 

The graph below compares the cumulative 5-Year total return provided shareholdersstockholders on CIRCOR International, Inc.'s common stock relative to the cumulative total returns of the S&P 500 index, the Russell 2000 index, our previous peer group (“20172018 Peer Group”) and our updated peer group (“20182019 Peer Group”). The companies included in the 20172018 Peer Group and the 20182019 Peer Group are listed in footnotes 1 and 2 below, respectively. We revised our peer group to incorporate peers relevant to the businesses we acquired in the Fluid Handling acquisition.acquisition along with divestitures of non-core businesses. An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock, in each index and in each of the peer groups on 12/31/2013December 31, 2016 and its relative performance is tracked through 12/31/2018.December 31, 2021.

 

The Company's Aerospace & Defense segment has been and continues to be impacted by the COVID-19 pandemic, primarily in our Commercial Aerospace end markets. Commercial Aerospace order rates improved in 2021 compared to 2020 as demand for OEM components and aftermarket services increased with air framer production rates and aircraft utilization. However, we continue to expect that a recovery to pre-pandemic levels of demand will not occur until the trendend of 2023. While our Defense business has been less impacted by the pandemic, we did experience a slowdown in lower capital expenditures,government spending on spare parts as well as deferred maintenance spending, by many national oil companies, oil majors and refineries to continuesome delays on key programs which impacted our revenues in 2019 and impact our project businesses in engineered valves.2021. However, we expect a return to see modestnear term and long term growth in other markets that we serve,this end market driven by our positions on key U.S. defense programs, including the short-cycle on-shore North American distributed valves marketJoint Strike Fighter and petrochemical processing market.Columbia class submarines, strong backlog, and new product introductions in close partnership with our customers. We receivedcontinue to focus on increasing our global aftermarket and deploying value-based pricing across the segment, both of which will contribute to growth and margin expansion.

The Company's Industrial reporting segment has been and continues to be impacted by the COVID-19 pandemic. In 2021, we saw a number of large orderssignificant increase in 2018 for refinery valves, however, it is uncertain whether this trend will continue in 2019. Capital expenditures in the industrialdemand across end markets and geographies as the commercial impact of COVID-19 lessened through the year. We exited 2021 with a strong backlog that positions the Industrial segment well for future revenue growth in 2022 and beyond. In the near term, we expect strong growth in our longer-cycle end markets, such as Commercial Marine and Downstream Oil & Gas, as we deliver on improved orders from 2021. Our General Industrial end market, which includes products that serve power generation, chemical processing, and other customers, is expected to grow modestly, although there are some signs ofexperience moderate growth. We continue to focus on increasing our global aftermarket, deploying value-based pricing across the segment, and simplifying our organizational structure to drive growth and margin expansion.

In both reporting segments, the Company's results from operations were, and continue to be, adversely impacted by global supply chain constraints and rising inflation. In 2021, we faced unexpected difficulties in procuring certain raw material, castings, and components, additional labor constraints due to COVID-19 and a slowdown in Europe. We expect to experience lower demand for our products that serve the power generation markets. Aerospacechallenging labor market, and defense end markets are expected to grow as demand for commercial air travel continues to increaseinflation on both material and funding on military programslogistics. These challenges were most acute in the U.S. improvessecond half of the year and continue to evolve in 2019. We do not expect an improvement in2022. In order to mitigate the commercial marine sector as global shipbuilding continues to be constrained.

All significant intercompany balances and transactions have been eliminated in consolidation. Effective January 1, 2018 we reorganized our segments by end market: Energy, Aerospace & Defense and Industrial. Prior year financial statements have been adjusted to reflect this new organization basis beginning in the first quarter of 2018.

The Company’s discussion and analysis of its financial condition and results of operations is based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.America (“GAAP”). The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent liabilities. On an on-going basis, management evaluates its significant estimates, including those related to contracts accounted for under the percentage of completion method, bad debts, inventories, intangible assets and goodwill, purchase accounting, delivery penalties, income taxes, and contingencies including litigation. Management believes goodwill, revenue recognition and income taxes to be the most complex and sensitive judgments because of their significance to the consolidated financial statements and which result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management bases its estimates on historical experience, current market and economic conditions and other assumptions that management believes are reasonable. The results of these estimates form the basis for judgments about the carrying value of assets and liabilities where the values are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

There have been no significant changes from the methodology applied by management for critical accounting estimates previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. 2020.

For information regarding our criticalsignificant accounting policies, refer to Note 2, "Summary3, Summary of Significant Accounting Policies," to the consolidated financial statements included in this Annual Report, which disclosure is incorporated by reference herein.Report.

For goodwill, we perform an impairment assessment at the reporting unit level on an annual basis as of our October month end or more frequently if circumstances warrant. In October 2018 whenOn March 29, 2020, we performedreorganized our reporting units and the stock price dropped below book value, which we determined were triggering events requiring an assessment of our goodwill and indefinite-lived trade names. Based on our impairment assessment as of March 29, 2020, we concluded that our goodwill in the Industrial reporting unit was impaired and, accordingly, recorded a goodwill impairment charge of $138.1 million in the quarter ended March 29, 2020.

The Chief Operating Decision Maker ("CODM"(“CODM”) is the function that allocates the resources of the enterprise and assesses the performance of the Company's reportable operating segments. CIRCOR has determined that the CODM is solely comprised of its Chief Executive Officer ("CEO"(“CEO”), as the CEO has the ultimate responsibility for CIRCOR strategic decision-making and resource allocation.

Our CODM evaluates segment operating performance using segment operating income. SegmentWe define segment operating income is defined as generally accepted accounting principles ("GAAP")GAAP operating income excluding intangible amortization and amortization of fair value step-ups of inventory and fixed assets from acquisitions completed subsequent to December 31, 2011, the impact of restructuring relatedrestructuring-related inventory write-offs, impairment charges and special charges or gains. The Company also refers to this measure as adjusted operating income. The Company uses this measure because it helps management understand and evaluate the segments’ core operating results and facilitates a comparison of performance for determining incentive compensation achievement.

For information regarding our segment determination refer to Note 18, “Business19, Business Segment and Geographical Information," of the consolidated financial statements included in this Annual Report.

Industrial segment revenues increased $6.9 million, or 1%, in 2021 compared to 2020. The increase was primarily driven by a 7% increase in the Pumps businesses partially offset by a 5% reduction in the Valves business (+3%)businesses. In both businesses, revenues were adversely impacted by global supply chain challenges including material input delays, labor shortages, and logistics constraints. Segment revenues excluding divestitures and the impact of foreign exchange decreased $0.7 million, or less than 1%, our Pipeline business (+2%) and our Instrumentation & Sampling business (+1%).in 2021 compared to 2020.

SegmentIndustrial segment operating income increased $3.4$1.9 million, or 11%7%, to $33.5 million for 2018in 2021 compared to $30.1 million in 2017.2020. The increase was primarily driven by an increase in segmentthe Pumps businesses which was largely due to a one-time charge of $5.9 million recorded in the three months ended March 29, 2020 for an allowance against a customer receivable. In both businesses, operating income was primarily due to operational improvements within our Refinery Valves business (+32%),adversely impacted by global supply chain challenges as well as material and the acquisition of Reliability Services business (+17%), partially offset by operational losses within our North American Distributed Valves business (-24%) and Engineered Valves business (-14%).freight inflation.

Aerospace & Defense segment orders increased $84.0$0.6 million, or 43%less than 1%, to $277.5 million for 2018in 2021 compared to $193.52020. The increase was driven by a 32% increase in our Commercial Aerospace businesses, offset by a 16% decrease in our Defense businesses. Segment orders excluding the impact of foreign exchange decreased $2.1 million, or 1%, in 2017, primarily due2021 compared to our Pumps Defense business (+36%) and our U.S. fluid control and actuation business (+7%).2020.

Aerospace & Defense segment net revenues increaseddecreased by $54.0$13.5 million, or 30%,5% in 20182021 compared to 2017.2020. The increasedecrease was primarily driven by the defense related business ("Pumps Defense") we acquireda 8% decrease in the FH acquisition (+26%), price and volume increases in our United States ("U.S.") fluid control business (+5%) and our United Kingdom ("U.K.") defense business (+2%),Defense businesses partially offset by decreased revenues in our actuation business (-2%) and French business (-2%). Thea 1% increase in our Pumps Defense business is attributedthe Commercial Aerospace businesses. In both businesses, revenues were adversely impacted by global supply chain challenges including material input delays, labor shortages, and logistics constraints. Segment revenue excluding the impact of foreign exchange decreased $16.3 million, or 6%, in 2021 compared to the timing of orders received for the Joint Strike Fighter program.2020.

Segment operating income increased $12.7decreased $2.3 million, or 54%4%, to $36.0 million for 2018in 2021 compared to $23.4 million for 2017.2020. The increasedecrease was driven primarily by lower volume in the Defense business, partially offset by cost controls. In both businesses, operating income was primarily drivenadversely impacted by our Pumps Defense business (+43%), lower headquarter costs (+23%), our U.S. fluid control business (+11%),global supply chain challenges as well as material and our U.K. defense business (+1%), partially offset by declines in our U.S. actuation business (-21%) and our French business (-4%).freight inflation.