UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 10-Q
(Mark One)
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2017
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024
OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROMto.
For the transition period fromto
Commission File No. 1-13179
FLOWSERVE CORPORATION
(Exact name of registrant as specified in its charter)

capture.gif
New York31-0267900
New York31-0267900
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
5215 N. O’Connor Blvd., Suite 2300, Irving, Texas700,Irving,Texas75039
(Address of principal executive offices)
 
 (Zip Code)


(972)443-6500
(972) 443-6500
(Registrant’s telephone number, including area code)
Former name, former address and former fiscal year, if changed since last report: N/A
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of Each Exchange on Which Registered
Common Stock, $1.25 Par ValueFLSNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ☑ Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ☑ Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “large accelerated filer” and “smaller reporting company”company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerþ
☑
Accelerated filer¨
☐
Non-accelerated filer¨ (do not check if a smaller reporting company)☐
Smaller reporting company¨
☐
Emerging growth company¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨Yes þ☐ No☑
AsAs of October 23, 2017 April 19, 2024 there were 130,635,017were 131,654,386shares of the issuer’s common stock outstanding.










FLOWSERVE CORPORATION
FORM 10-Q
TABLE OF CONTENTS

Page
Page
No.
Item 1.       Financial Statements.Statements
Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income (Loss) – Three Months Ended September 30, 2017March 31, 2024 and 20162023 (unaudited)
1
Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income – Nine Months Ended September 30, 2017 and 2016 (unaudited)
2
Condensed Consolidated Balance Sheets – September 30, 2017March 31, 2024 and December 31, 20162023 (unaudited)
32
Condensed Consolidated Statements of Shareholders' Equity – Three Months Ended March 31, 2024 and 2023 (unaudited)
3

Condensed Consolidated Statements of Cash Flows – NineThree Months Ended September 30, 2017March 31, 2024 and 20162023 (unaudited)
4

Notes to Condensed Consolidated Financial Statements (unaudited)
5
Item 2.       Management’s Discussion and Analysis of Financial Condition and Results of Operations.Operations
2423
Item 3.       Quantitative and Qualitative Disclosures About Market Risk.Risk
3732
Item 4.       Controls and Procedures.Procedures
3832
Item 1.       Legal Proceedings.Proceedings
3933
Item 1A.    Risk Factors.Factors
3933
Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds.Proceeds
3933
Item 6.       Exhibits.3. Defaults Upon Senior Securities
4035
SIGNATURESItem 4. Mine Safety Disclosures
4135
 EX-31.1
Item 5. Other Information
35
 EX-31.2
Item 6.       Exhibits
35
 EX-32.1
36
 EX-32.2
 EX-101 INSTANCE DOCUMENT
 EX-101 SCHEMA DOCUMENT
 EX-101 CALCULATION LINKBASE DOCUMENT
 EX-101 LABELS LINKBASE DOCUMENT
 EX-101 PRESENTATION LINKBASE DOCUMENT
 EX-101 DEFINITION LINKBASE DOCUMENT
i


Table of Contents
PART I — FINANCIAL INFORMATION
Item 1.Financial Statements.
Item 1.Financial Statements
FLOWSERVE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amounts in thousands, except per share data)Three Months Ended March 31,
 20242023
Sales$1,087,479 $980,305 
Cost of sales(748,511)(683,475)
Gross profit338,968 296,830 
Selling, general and administrative expense(228,418)(244,268)
Net earnings from affiliates2,529 4,624 
Operating income113,079 57,186 
Interest expense(15,317)(16,211)
Interest income1,169 1,494 
Other income (expense), net(874)(8,020)
Earnings (loss) before income taxes98,057 34,449 
Provision for income taxes(20,142)(4,453)
Net earnings (loss), including noncontrolling interests77,915 29,996 
Less: Net earnings attributable to noncontrolling interests(3,695)(3,230)
Net earnings (loss) attributable to Flowserve Corporation$74,220 $26,766 
Net earnings (loss) per share attributable to Flowserve Corporation common shareholders:  
Basic$0.56 $0.20 
Diluted0.56 0.20 
Weighted average shares – basic131,510 130,930 
Weighted average shares – diluted132,368 131,754 
(Amounts in thousands, except per share data)Three Months Ended September 30,
 2017 2016
Sales$883,380
 $945,939
Cost of sales(615,848) (667,960)
Gross profit267,532
 277,979
Selling, general and administrative expense(206,295) (281,261)
Gain on sale of businesses

9,864
 —
Net earnings from affiliates2,918
 3,394
Operating income74,019
 112
Interest expense(15,043) (15,141)
Interest income1,108
 924
Other income, net8,285
 1,899
Earnings (loss) before income taxes68,369
 (12,206)
Provision for income taxes(19,628) (2,827)
Net earnings (loss), including noncontrolling interests48,741
 (15,033)
Less: Net earnings attributable to noncontrolling interests(1,136) (808)
Net earnings (loss) attributable to Flowserve Corporation$47,605
 $(15,841)
Net earnings per share attributable to Flowserve Corporation common shareholders:   
Basic$0.36
 $(0.12)
Diluted0.36
 (0.12)
Cash dividends declared per share$0.19
 $0.19


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(Amounts in thousands)Three Months Ended March 31,
 20242023
Net earnings (loss), including noncontrolling interests$77,915 $29,996 
Other comprehensive income (loss):  
Foreign currency translation adjustments, net of taxes of $828 and $717, respectively(28,244)13,506 
Pension and other postretirement effects, net of taxes of $76 and $(12), respectively1,376 (443)
Cash flow hedging activity, net of taxes of $(35) and $(9), respectively(5)30 
Other comprehensive income (loss)(26,873)13,093 
Comprehensive income (loss), including noncontrolling interests51,042 43,089 
Comprehensive (income) loss attributable to noncontrolling interests(3,482)(68)
Comprehensive income (loss) attributable to Flowserve Corporation$47,560 $43,021 
(Amounts in thousands)Three Months Ended September 30,
 2017 2016
Net earnings (loss), including noncontrolling interests$48,741
 $(15,033)
Other comprehensive income (loss):   
Foreign currency translation adjustments, net of taxes of $(10,501) and $9,285 respectively17,674
 (15,587)
Pension and other postretirement effects, net of taxes of $(333) and $(925), respectively(444) 3,719
Cash flow hedging activity, net of taxes of $(200) in 201612
 560
Other comprehensive income (loss)17,242
 (11,308)
Comprehensive income, including noncontrolling interests65,983
 (26,341)
Comprehensive loss attributable to noncontrolling interests(1,090) (807)
Comprehensive income (loss) attributable to Flowserve Corporation$64,893
 $(27,148)


See accompanying notes to condensed consolidated financial statements.

1


Table of Contents

FLOWSERVE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOMEBALANCE SHEETS
(Unaudited)
    
(Amounts in thousands, except per share data)Nine Months Ended September 30,
 2017 2016
Sales$2,626,762
 $2,919,553
Cost of sales(1,845,796) (2,015,755)
Gross profit780,966
 903,798
Selling, general and administrative expense(681,181) (747,513)
Gain on sale of businesses

141,158
 —
Net earnings from affiliates9,027
 8,522
Operating income249,970
 164,807
Interest expense(44,689) (44,982)
Interest income2,373
 2,243
Other (expense) income, net(11,602) 1,070
Earnings before income taxes196,052
 123,138
Provision for income taxes(85,836) (49,518)
Net earnings, including noncontrolling interests110,216
 73,620
Less: Net earnings attributable to noncontrolling interests(1,682) (1,222)
Net earnings attributable to Flowserve Corporation$108,534
 $72,398
Net earnings per share attributable to Flowserve Corporation common shareholders:   
Basic$0.83
 $0.56
Diluted0.83
 0.55
Cash dividends declared per share$0.57
 $0.57

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
    
(Amounts in thousands)Nine Months Ended September 30,
 2017 2016
Net earnings, including noncontrolling interests$110,216
 $73,620
Other comprehensive income (loss):   
Foreign currency translation adjustments, net of taxes of $(50,964) and $7,492, respectively85,777
 (12,577)
Pension and other postretirement effects, net of taxes of $(996) and $(3,545), respectively(1,102) 9,655
Cash flow hedging activity, net of taxes of $(34) and $(620), respectively96
 1,763
Other comprehensive income (loss)84,771
 (1,159)
Comprehensive income, including noncontrolling interests194,987
 72,461
Comprehensive income attributable to noncontrolling interests(2,169) (1,983)
Comprehensive income attributable to Flowserve Corporation$192,818
 $70,478

(Amounts in thousands, except par value)March 31,December 31,
20242023
ASSETS
Current assets:  
Cash and cash equivalents$531,981 $545,678 
Accounts receivable, net of allowance for expected credit losses of $78,305 and $80,013, respectively914,357 881,869 
Contract assets, net of allowance for expected credit losses of $4,986 and $4,993, respectively287,058 280,228 
Inventories883,341 879,937 
Prepaid expenses and other149,840 116,065 
Total current assets2,766,577 2,703,777 
Property, plant and equipment, net of accumulated depreciation of $1,162,548 and $1,158,451, respectively499,499 506,158 
Operating lease right-of-use assets, net163,183 156,430 
Goodwill1,173,368 1,182,225 
Deferred taxes215,216 218,358 
Other intangible assets, net119,355 122,248 
Other assets, net of allowance for expected credit losses of $66,357 and $66,864, respectively212,727 219,523 
Total assets$5,149,925 $5,108,719 
LIABILITIES AND EQUITY
Current liabilities:  
Accounts payable$549,515 $547,824 
Accrued liabilities547,382 504,430 
Contract liabilities279,216 287,697 
Debt due within one year66,428 66,243 
Operating lease liabilities31,635 32,382 
Total current liabilities1,474,176 1,438,576 
Long-term debt due after one year1,152,336 1,167,307 
Operating lease liabilities144,740 138,665 
Retirement obligations and other liabilities382,461 389,120 
Contingencies (See Note 10)
Shareholders’ equity:  
Common shares, $1.25 par value220,991 220,991 
Shares authorized – 305,000  
Shares issued – 176,793 and 176,793, respectively  
Capital in excess of par value483,963 506,525 
Retained earnings3,900,922 3,854,717 
Treasury shares, at cost – 45,372 and 45,885 shares, respectively(1,992,404)(2,014,474)
Deferred compensation obligation6,767 7,942 
Accumulated other comprehensive loss(666,259)(639,601)
Total Flowserve Corporation shareholders’ equity1,953,980 1,936,100 
Noncontrolling interests42,232 38,951 
Total equity1,996,212 1,975,051 
Total liabilities and equity$5,149,925 $5,108,719 
See accompanying notes to condensed consolidated financial statements.


2


Table of Contents

FLOWSERVE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETSSTATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
 Total Flowserve Corporation Shareholders’ Equity  
Capital
in Excess of Par Value		Retained EarningsDeferred Compensation ObligationAccumulated
Other Comprehensive Income (Loss)		Total Equity
 Common StockTreasury StockNon-
controlling Interests
 SharesAmountSharesAmount
 (Amounts in thousands)
Balance — January 1, 2024176,793 $220,991 $506,525 $3,854,717 (45,885)$(2,014,474)$7,942 $(639,601)$38,951 $1,975,051 
Stock activity under stock plans— — (31,219)— 570 24,619 (1,175)— — (7,775)
Stock-based compensation— 8,657 — — — — — — 8,657 
Net earnings— — — 74,220 — — — — 3,695 77,915 
Cash dividends declared ($0.21 per share)— — — (28,015)— — — — — (28,015)
Repurchases of common shares— — — — (57)(2,549)— — — (2,549)
Other comprehensive income (loss), net of tax— — — — — — — (26,659)(214)(26,873)
Other, net— — — — — — — 1 (200)(199)
Balance — March 31, 2024176,793 $220,991 $483,963 $3,900,922 (45,372)$(1,992,404)$6,767 $(666,259)$42,232 $1,996,212 
Balance — January 1, 2023176,793 $220,991 $507,484 $3,774,209 (46,359)$(2,036,882)$6,979 $(647,788)$33,614 $1,858,607 
Stock activity under stock plans— — (25,290)— 437 20,365 (127)— — (5,052)
Stock-based compensation— 9,953 — — — — — — 9,953 
Net earnings— — — 26,766 — — — — 3,230 29,996 
Cash dividends declared ($0.20 per share)— — — (26,596)— — — — — (26,596)
Other comprehensive income (loss), net of tax— — — — — — — 16,254 (3,161)13,093 
Other, net— — — — — — — — (304)(304)
Balance — March 31, 2023176,793 $220,991 $492,147 $3,774,379 (45,922)$(2,016,517)$6,852 $(631,534)$33,379 $1,879,697 
See accompanying notes to condensed consolidated financial statements.

(Amounts in thousands, except par value)September 30, December 31,
 2017 2016
ASSETS
Current assets:   
Cash and cash equivalents$502,143
 $367,162
Accounts receivable, net of allowance for doubtful accounts of $65,106 and $51,920, respectively851,246
 882,638
Inventories, net951,598
 897,690
Prepaid expenses and other134,023
 150,199
Total current assets2,439,010
 2,297,689
Property, plant and equipment, net of accumulated depreciation of $967,458 and $882,151, respectively673,555
 724,805
Goodwill1,211,544
 1,205,054
Deferred taxes93,638
 83,722
Other intangible assets, net212,425
 214,527
Other assets, net203,968
 183,126
Total assets$4,834,140
 $4,708,923
    
LIABILITIES AND EQUITY
Current liabilities:   
Accounts payable$360,844
 $412,087
Accrued liabilities706,838
 680,986
Debt due within one year80,635
 85,365
Total current liabilities1,148,317
 1,178,438
Long-term debt due after one year1,506,057
 1,485,258
Retirement obligations and other liabilities412,137
 407,839
Shareholders’ equity:   
Common shares, $1.25 par value220,991
 220,991
Shares authorized – 305,000   
Shares issued – 176,793   
Capital in excess of par value488,249
 491,848
Retained earnings3,634,750
 3,598,396
Treasury shares, at cost – 46,503 and 46,980 shares, respectively(2,061,054) (2,078,527)
Deferred compensation obligation6,256
 8,507
Accumulated other comprehensive loss(540,504) (624,788)
Total Flowserve Corporation shareholders’ equity1,748,688
 1,616,427
Noncontrolling interests18,941
 20,961
Total equity1,767,629
 1,637,388
Total liabilities and equity$4,834,140
 $4,708,923

See accompanying notes to condensed consolidated financial statements.

3


Table of Contents

FLOWSERVE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)Nine Months Ended September 30,
 2017 2016
Cash flows – Operating activities:   
Net earnings, including noncontrolling interests$110,216
 $73,620
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:   
Depreciation75,177
 74,875
Amortization of intangible and other assets12,767
 12,424
(Gain) loss on dispositions of businesses(141,158) 7,664
Stock-based compensation20,291
 29,966
Latin America accounts receivable reserve—
 73,451
Foreign currency, asset impairment and other non-cash adjustments24,696
 (1,037)
Change in assets and liabilities:   
Accounts receivable, net63,835
 69,818
Inventories, net(20,355) (31,462)
Prepaid expenses and other43,546
 (58,743)
Other assets, net(21,090) (19,512)
Accounts payable(68,012) (98,782)
Accrued liabilities and income taxes payable(6,702) (82,318)
Retirement obligations and other(18,720) 7,821
       Net deferred taxes(2,131) 13,155
Net cash flows provided by operating activities72,360
 70,940
Cash flows – Investing activities:   
Capital expenditures(40,620) (64,475)
Proceeds from disposal of assets2,977
 632
Proceeds from (payments for) dispositions of businesses208,775
 (5,064)
Net cash flows provided (used) by investing activities171,132
 (68,907)
Cash flows – Financing activities:   
Payments on long-term debt(45,000) (45,000)
Proceeds under other financing arrangements6,234
 24,701
Payments under other financing arrangements(12,560) (12,060)
Payments related to tax withholding for stock-based compensation(6,287) (10,267)
Payments of dividends(74,412) (72,960)
Other(4,189) 1,325
Net cash flows used by financing activities(136,214) (114,261)
Effect of exchange rate changes on cash27,703
 6,654
Net change in cash and cash equivalents134,981
 (105,574)
Cash and cash equivalents at beginning of period367,162
 366,444
Cash and cash equivalents at end of period$502,143
 $260,870

(Amounts in thousands)Three Months Ended March 31,
 20242023
Cash flows – Operating activities:  
Net earnings (loss), including noncontrolling interests$77,915 $29,996 
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities:  
Depreciation19,326 18,928 
Amortization of intangible and other assets2,254 2,663 
Stock-based compensation8,657 9,953 
Foreign currency, asset write downs and other non-cash adjustments1,189 (2,728)
Change in assets and liabilities:  
Accounts receivable, net(39,687)(26,249)
Inventories(11,452)(70,721)
Contract assets, net(8,051)4,325 
Prepaid expenses and other, net(16,001)(16,019)
Accounts payable5,053 7,008 
Contract liabilities(6,372)32,676 
Accrued liabilities30,917 35,374 
Retirement obligations and other liabilities(2,426)9,477 
       Net deferred taxes935 (8,095)
Net cash flows provided (used) by operating activities62,257 26,588 
Cash flows – Investing activities:  
Capital expenditures(13,610)(15,318)
Other24 (1,138)
Net cash flows provided (used) by investing activities(13,586)(16,456)
Cash flows – Financing activities:  
Payments on term loan(15,000)(10,000)
Proceeds under other financing arrangements72 78 
Payments under other financing arrangements(25)(1,515)
Repurchases of common shares(2,549)— 
Payments related to tax withholding for stock-based compensation(8,857)(5,850)
Payments of dividends(27,654)(26,229)
Other(201)(303)
Net cash flows provided (used) by financing activities(54,214)(43,819)
Effect of exchange rate changes on cash and cash equivalents(8,154)3,442 
Net change in cash and cash equivalents(13,697)(30,245)
Cash and cash equivalents at beginning of period545,678 434,971 
Cash and cash equivalents at end of period$531,981 $404,726 
See accompanying notes to condensed consolidated financial statements.

4


Table of Contents

FLOWSERVE CORPORATION
(Unaudited)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.Basis of Presentation and Accounting Policies
1.Basis of Presentation and Accounting Policies
Basis of Presentation
The accompanying condensed consolidated balance sheet as of September 30, 2017,March 31, 2024 and December 31, 2023, and the related condensed consolidated statements of income, andcondensed consolidated statements of comprehensive income (loss), condensed consolidated statements of shareholders' equity for the three and ninemonths ended September 30, 2017March 31, 2024 and 2016,2023 and the condensed consolidated statements of cash flows for the ninethree months ended September 30, 2017March 31, 2024 and 2016,2023 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, 2017March 31, 2024 ("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/A10-K for the year ended December 31, 20162023 ("20162023 Annual Report").
RevisionCoronavirus ("COVID-19") and Related Impacts - We continue to Previously Reported Financial Information –As previously disclosed in our Quarterly Reportassess any remaining impacts of COVID-19 on Form 10-Q for the quarterly period ended June 30, 2017, we identified accounting errors focused mainly at twoall aspects of our non-U.S. sites in the inventory, accounts receivable, cost of salesbusiness and selling, generalgeographies, including with respect to our associates, customers and administrative balances for prior periods through the first quarter of 2017. We assessed these errors, individuallycommunities, supply chain impacts and in the aggregate,labor availability issues. COVID-related supply chain, logistics and concluded that they were not materiallabor availability impacts decreased when compared to any prior annual or interim period. However, to facilitate comparisons among periods we revised our previously issued audited consolidated financial information which is included in our 2016 Annual Report2023 and unaudited2022 and have generally stabilized. The Company's condensed consolidated financial information forstatements presented reflect management's estimates and assumptions regarding the interim periods includedeffects of COVID-19 as of the date of the condensed consolidated financial statements.
Russia and Ukraine Conflict - In response to the Russia-Ukraine conflict, several countries, including the United States, have imposed economic sanctions and export controls on certain industry sectors and parties in Russia. As a result of this conflict, including the aforementioned sanctions and overall instability in the region, in March 2022 we permanently ceased all Company operations in Russia and are currently taking the necessary steps to wind down in the country.
We continue to monitor the situation involving Russia and Ukraine and its impact on the rest of our Form 10-Q/Aglobal business. This includes the macroeconomic impact, including with respect to global supply chain issues and Form 10-Q forinflationary pressures. We reevaluated our financial exposure as of March 31, 2024 and made a $2 million adjustment during the quartersperiod ended March 31, 20172024 to reduce the existing reserves. To date, impacts have not been material to our business and June 30, 2017, respectively. We also corrected the timingwe do not currently expect that any incremental impact in future quarters, including any financial impacts caused by our cancellation of immaterial previously recorded out-of-period adjustmentscustomer contracts and reflected them in the revised prior period financial statements, where applicable. See Note 2 for more information.
Brazil Long-Lived Asset Impairment –In the second quarterceasing of 2017, due to continued capital spending declines in the Brazilian oil and gas market and economic and political circumstances, including the indictment of the former president, the decision was made to scale back certain of our operations in Brazil. As a result inRussia, will be material to the second quarter of 2017, we tested our related long-lived assets, which primarily consist of property, plant and equipment, for recoverability and recorded a $26.0 million impairment charge to selling, general and administrative expense ("SG&A") within our Engineered Product Division ("EPD") segment.Company.
Venezuela – Our operations in Venezuela primarily consist of a service center that performs service and repair activities. Our Venezuelan subsidiary's sales for the three and nine months ended September 30, 2017 represented less than 0.5% of consolidated sales and its assets at September 30, 2017 represented less than 0.5% of total consolidated assets. Assets primarily consisted of United States ("U.S.") dollar-denominated monetary assets and bolivar-denominated non-monetary assets at September 30, 2017. In addition, certain of our operations in other countries sell equipment and parts that are typically denominated in U.S. dollars directly to Venezuelan customers. In the third quarter of 2016 we recorded a charge of $73.5 million to SG&A to fully reserve for those potentially uncollectible accounts receivable (classified as other assets, net on the condensed consolidated balance sheet) and a charge to cost of sales ("COS") of $1.9 million to reserve for related net inventory exposures. We continue to pursue payments from our Venezuelan customer.
Valuation of Goodwill, Indefinite-Lived Intangible Assets and Other Long-Lived Assets – As discussed in Note 1 to our consolidated financial statements included in our 2016 Annual Report, the value of our goodwill and indefinite-lived intangible
assets is tested for impairment as of December 31 each year or whenever events or circumstances indicate such assets may be impaired.
We did not record an impairment of goodwill in 2016, 2015 or 2014; however at December 31, 2016 the estimated fair value of our Engineered Product Operations ("EPO") and Industrial Product Division ("IPD") reporting units reduced significantly due to broad-based capital spending declines and heightened pricing pressure experienced in the oil and gas markets which are anticipated to continue in the near to mid-term. Although we concluded that there is no impairment on the goodwill associated with our EPO and IPD reporting units as of December 31, 2016, we will continue to closely monitor their performance and related market conditions for future indicators of potential impairment and reassess accordingly.
Accounting Policies
Significant accounting policies, for which no significant changes have occurred in the nine months ended September 30, 2017, are detailed in Note 1 to our consolidated financial statements included in our 2016 Annual Report.

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Terminated Acquisition — On February 9, 2023, the Company entered into a definitive agreement to acquire all of the outstanding equity of Velan Inc., a manufacturer of highly engineered industrial valves. In October 2023, the Company received notice that the required French foreign investment screening approval was not obtained. As a result, the transaction was terminated. Acquisition related expenses incurred during 2023 associated with the transaction were $7.3 million.
Accounting Developments
Pronouncements Implemented
In July 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory." The ASU updates represent changes to simplify the subsequent measurement of inventory. Previous to the issuance of this ASU, ASC 330 required that an entity measure inventory at the lower of cost or market. The amendments of ASU 2015-11 updates that “market” requirement to “net realizable value,” which is defined by the ASU as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Our adoption of ASU No. 2015-11 effective January 1, 2017 did not have an impact on our consolidated financial condition and results of operations.
In March 2016,September 2022, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting.2022-04, "Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations." The ASU affectsamendments require a buyer that uses supplier finance programs to make annual disclosures about the accountingprogram’s key terms, the balance sheet presentation of related amounts, the confirmed amount outstanding at the end of the period and associated roll-forward information. Only the amount outstanding at the end of the period must be disclosed in interim periods following the year of adoption. The amendments are effective for employee share-based payment transactions as it relatesall entities for fiscal years beginning after December 15, 2022 on a retrospective basis, including interim periods within those fiscal years, except for the requirement to accountingdisclose roll-forward information, which is effective prospectively for income taxes, accounting for forfeitures, and statutory tax withholding requirements. fiscal years beginning after December 15, 2023.
We adopted the provisions of ASU 2016-09 as ofNo. 2022-04 effective January 1, 2017 using2023. We partner with two banks to offer our suppliers the modified retrospective approach. The adoption resulted in the recognitionoption of approximately $1 million of tax expense in our provision of income taxes and an approximately $3 million one-time, cumulative adjustment to beginning retained earnings related to the change in our accounting policy for estimated forfeitures and share cancellations. In addition, in our statements of cash flows we reclassified cash outflows for employee taxes paid from operating to financing and elected to reclassify cash impacts due to excess tax deficiencies and benefits from financing to operating, which resultedparticipating in a net reclassificationsupplier financing program and receive payment early. Under the program agreement, we must reimburse each bank for approved and valid invoices in accordance with the originally agreed upon terms with the supplier. We have no obligation for fees, subscription, service, commissions or otherwise with either bank. We also have no obligation for pledged assets or other forms of approximately $10guarantee and may terminate either program agreement with appropriate notice. As of March 31, 2024, and December 31, 2023, $7.8 million of cash flows used from operating toand $13.5 million, respectively, remained outstanding with the supply chain financing for the nine months ended September 30, 2016.
Pronouncements Not Yet Implementedpartner banks and recorded within accounts payable on our condensed consolidated balance sheet.
In May 2014,March 2023, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers2023-01, "Leases (Topic 606)842): Common Control Arrangements." which supersedes mostThe amendments permits leasehold improvements to be amortized over the useful life of the revenue recognition requirements in "Revenue Recognition (Topic 605)." The standard is principle-based and provides a five-step model to determineasset when and how revenue is recognized. The core principle is that a company should recognize revenue when (or as) it transfers promised goods or services to customers in an amount that reflects the consideration to whichlessee controls the company expects to be entitled in exchange for those goods or services. Companies are permitted to adopt the new standard using one of two transition methods. Under the full retrospective method, the requirementsuse of the new standard are applied to contracts for each prior reporting period presentedunderlying asset and the cumulative effectlease is between common control entities. The amendments further allow entities to account for leasehold improvements as a transfer of applyingassets between entities under common control through an equity adjustment when the standardlessee is recognizedno longer in the earliest period presented. Under the modified retrospective method, the requirementscontrol of the new standardunderlying asset. The amendments are applied to contracts that are open as of January 1, 2018, the required date of adoption, and the cumulative effect of applying the standard is recognized as an adjustment to beginning retained earnings in that same year. The standard also includes significantly expanded disclosure requirements for revenue. Since 2014, the FASB has issued several updates to Topic 606.
We are currently evaluating the impact of ASU No. 2014-09 and all related ASU's on our consolidated financial condition and results of operations. We plan to adopt the new revenue guidance effective January 1, 2018 using the modified retrospective method for transition, applying the guidance to those contracts which were not completed as of that date. In 2015, we established a cross-functional implementation team consisting of representatives from across all of our reportable segments to begin the process of analyzing the impact of the new standard on our contracts. We have determined the applicability of the key factors of the five step model and developed a framework of accounting policies and practices to meet the requirements of the of the new standard. The results of our evaluation indicate that one of the changes upon adoption may be potentially increased "over-time" ("percentage of completion") revenue recognition. Historically, revenue recognized under the percentage of completion method has been less than 5% to 7% of our consolidated sales. The adoption of the new standard could substantially increase this range depending on the terms and conditions of the contracts in our backlog at January 1, 2018 and future contracts. We also anticipate changes to the consolidated balance sheet related to accounts receivable, inventory, contract assets and contract liabilities. We expect to further our assessment on the financial impact on our consolidated financial condition and results of operations and to align our business processes, systems and controls to support compliance with the standard during the remainder of 2017. We will continue our evaluation of ASU 2014-09 as well as new or emerging interpretations of the standard through the date of adoption.
In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." The ASU requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value with changes in fair value recognized in net income. The ASU also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The requirement to disclose the method(s) and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet has been eliminated by this ASU. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We are currently evaluating the impact of ASU No. 2016-01 on our consolidated financial condition and results of operations.

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In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”.  The ASU requires that organizations that lease assets recognize assets and liabilities on the balance sheet for the rights and obligations created by those leases.  The ASU will affect the presentation of lease related expenses on the income statement and statement of cash flows and will increase the required disclosures related to leases.  This ASU is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years with early adoption permitted.  We are currently evaluating the impact of ASU No. 2016-02 on our consolidated financial condition and results of operations.  Although we are continuing to evaluate, upon initial qualitative evaluation, we believe a key change upon adoption will be the balance sheet recognition of leased assets and liabilities. Based on our qualitative evaluation to date, we believe that any changes in income statement recognition will not be material.
In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments." The amendments in this ASU replace the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently evaluating the impact of ASU No. 2016-13 on our consolidated financial condition and results of operations.
In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments - A consensus of the FASB Emerging Issues Task Force.” The update was issued with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230 and other topics. This ASU is effective for fiscal years beginning after December 15, 2017,2023, including interim periods within those fiscal years. The adoption of this ASU No. 2016-15 isdid not expected to have a material impact on our condensed consolidated financial condition and resultsbalance sheets, condensed consolidated statements of operations.income or condensed consolidated statements of cash flows.
In October 2016,March 2023, the FASB issued ASU No. 2016-16, "Income Taxes2023-02, "Equity Method and Joint Ventures (Topic 740) Intra-Entity Transfers of Assets Other Than Inventory.323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method." The ASU guidance requiresamendments allow companies to account for all of their tax equity investments using the recognition ofproportional amortization method if certain conditions are met. Companies can elect to apply the income tax consequences ofproportional amortization method on a tax-credit-program-by-tax-credit-program basis rather than unilaterally or on an intercompany asset transfer, other than transfers of inventory, when the transfer occurs. For intercompany transfers of inventory, the income tax effects will continue to be deferred until the inventory has been sold toindividual investment basis. The amendments are effective on either a third party. The ASU is effectivemodified retrospective or retrospective basis for reporting periodsfiscal years beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact of ASU No. 2016-16 on our consolidated financial condition and results of operations.
In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash." The amendments in this ASU require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The ASU is effective for reporting periods beginning after December 15, 2017,2023, including interim periods withwithin those fiscal years.years, depending on whether the company elects to evaluate its investments for which it still expects to receive income tax credits or other income tax benefits as of the beginning of the period of adoption or at the beginning of the earliest period presented. The adoption of this ASU No. 2016-18 isdid not expected to have a material impact on our condensed consolidated financial condition and resultsbalance sheets, condensed consolidated statements of operations.income or condensed consolidated statements of cash flows.
Pronouncements Not Yet Implemented
In January 2017,August 2023, the FASB issued ASU No. 2017-01,2023-05, "Business Combinations (Topic 805)- Joint Venture Formations (Subtopic 805-60): "Clarifying the Definition of a Business.Recognition and Initial Measurement." The ASU clarifiesamendments require that newly formed joint ventures measure the definitionnet assets and liabilities contributed at fair value. Subsequent measurement is in accordance with the requirements for acquirers of a business in Sections 805-10-35, 805-20-35, and provides guidance805-30-35, and other generally accepted accounting principles. The amendments are effective prospectively for all joint venture formations with a formation date on evaluating asor after January 1, 2025, but companies may elect to whether transactions should be accountedapply the amendments retrospectively to joint ventures formed prior to January 1, 2025, if it has sufficient information. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued (or made available for as acquisitions (or disposals)issuance), either prospectively or retrospectively. We do not expect the impact of assets or businesses. The definition clarification as outlined in this ASU affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation.to be material.
In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures." The amendments enhance the disclosure requirements of the ASUsignificant segment expenses and other segment items. The amendments are effective for annual periods beginning after December 15, 2017, including2023 and interim periods within those annual periods. The adoption of ASU No. 2017-01 is not expected to have a material impact on our consolidated financial condition and results of operations.
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. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the impact of ASU No. 2017-04 on our consolidated financial condition and results of operations.
In February 2017, the FASB issued ASU No. 2017-05, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets." The FASB issued this ASU to clarify the scope of subtopic 610-20, which the FASB had failed to define in its issuance of ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU No. 2017-05 will be effective concurrently with ASU No. 2014-09. Similarly to ASU 2014-09, we are continuing our evaluation of ASU No. 2017-05 to determine the impact on our consolidated financial condition and results of operations.
On March 10, 2017, the FASB issued ASU No. 2017-07, "Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost."2024. The amendments of this ASU provide additional guidance intendedare to improvebe applied retrospectively to all prior periods presented in the presentation of net benefit costs, pension costsfinancial statements. Upon transition, the segment expense categories and net periodic postretirement costs.

amounts disclosed in the prior
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The amendments in this ASU mustperiods should be applied to annual reporting periods beginning after December 15, 2017,based on the significant segment expense categories identified and to interim periods in 2018. Early adoption of the standard is permitted. We are currently evaluating the impact of ASU No. 2017- 07 on our consolidated financial condition and results of operations.
On May 10, 2017, the FASB issued ASU No. 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting." The amendments in this ASU provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments of the ASU must be applied to annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption of the standard is permitted. We are currently evaluating the impact of ASU No. 2017-09 on our consolidated financial condition and results of operations.
On July 13, 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatory Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatory Redeemable Noncontrolling Interests with a Scope Exception.” The ASU amends guidance in FASB Accounting Standards Codification ("ASC") 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. The amendments in Part I of this ASU change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments in Part II of the ASU re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending contentdisclosed in the codification, to a scope exception. The amendments in this ASU must be applied to annual reporting periods beginning after December 15, 2018.period of adoption. Early adoption is permitted. We are currently evaluating the impact of this ASU No. 2017-11 on our consolidated financial condition and results of operations.disclosures.
On August 28, 2017,In December 2023, the FASB issued ASU No. 2017-12, "Derivatives2023-08, "Intangibles - Goodwill and Hedging (Topic 815): Targeted improvements of Accounting For Hedging Activities.Other - Crypto Assets (Subtopic 350-60)." The purposeamendments require that assets that qualify as a crypto asset, in accordance with the new guidance, must be recorded and subsequently valued at fair value at each reporting period, recognizing changes within net income of the same period. The amendments also require that companies present crypto assets measured at fair value separately from other intangible assets on the balance sheet with changes related to the remeasurement of crypto assets reported separately from changes in carrying amounts of other intangible assets in the income statement. Specific disclosure is required around the activity of crypto assets during the reporting period. The amendments are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. We do not own crypto assets, and therefore, do not expect the impact of this ASU is to better alignbe material.
In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740)." The amendments require that entities on an annual basis disclose specific categories in the rate reconciliation, provide additional information for reconciling items that meet a company’s risk management activitiesquantitative threshold, and financial reportingdisclose specific information about income taxes paid. The amendments eliminate previously required disclosures around changes in unrecognized tax benefits and cumulative amounts of certain temporary difference. The amendments are effective prospectively for hedging relationships. Additionally, the ASU simplifies the hedge accounting requirements and improve the disclosures of hedging arrangements. The effective dateannual periods beginning after December 15, 2024. Early adoption is fiscal year 2020, with early adoption permitted. We are currently evaluating the impact of this ASU No. 2017-12 on our disclosures.

2.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 and 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. Service-related revenues do not typically represent a significant portion of contracts with our customers and do not meet the thresholds requiring separate disclosure.
Revenue from products and services transferred to customers over time accounted for approximately 17% and 14% of total revenue for the three-month period ended March 31, 2024 and 2023, respectively. Our primary method for recognizing revenue over time is the percentage of completion ("POC") method. 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 83% and 86% of total revenue for the three-month period ended March 31, 2024 and 2023, respectively. Refer to Note 2 to our consolidated financial conditionstatements included in our 2023 Annual Report for a more comprehensive discussion of our policies and resultsaccounting practices of operations.revenue recognition.
Disaggregated Revenue
2.Revision to Previously Reported Financial Information
As described in Note 1,We conduct our operations through two business segments based on the type of product and how we revisedmanage the annualbusiness:
•Flowserve Pumps Division ("FPD") designs and quarterly periods priormanufactures 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") designs, manufactures and distributes a broad portfolio of engineered-to-order and configured-to-order isolation valves, control valves, valve automation products and related equipment.
Our revenue sources are derived from our original equipment manufacturing and our aftermarket sales and services. Our original equipment revenues are generally related to June 30, 2017. 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 the effecttables present our customer revenues disaggregated by revenue source:
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Table of the prior period revisionsContents
Three Months Ended March 31, 2024
(Amounts in thousands)FPDFCDTotal
Original Equipment$285,038 $243,562 $528,600 
Aftermarket483,725 75,154 558,879 
$768,763 $318,716 $1,087,479 
Three Months Ended March 31, 2023
FPDFCDTotal
Original Equipment$252,732 $210,753 $463,485 
Aftermarket446,746 70,074 516,820 
$699,478 $280,827 $980,305 
Our customer sales are diversified geographically. The following tables present our revenues disaggregated by geography, based on the affected line itemsshipping addresses of our condensed consolidated statementscustomers:
Three Months Ended March 31, 2024
(Amounts in thousands)FPDFCDTotal
North America(1)$310,469 $129,002 $439,471 
Latin America(2)70,385 5,034 75,419 
Middle East and Africa136,261 46,227 182,488 
Asia Pacific106,294 76,447 182,741 
Europe145,354 62,006 207,360 
$768,763 $318,716 $1,087,479 
Three Months Ended March 31, 2023
FPDFCDTotal
North America(1)$282,272 $125,681 $407,953 
Latin America(2)63,989 7,863 71,852 
Middle East and Africa114,370 28,401 142,771 
Asia Pacific113,371 67,828 181,199 
Europe125,476 51,054 176,530 
$699,478 $280,827 $980,305 
_________________________________
(1) North America represents the United States and Canada.
(2) Latin America includes Mexico.

On March 31, 2024, the aggregate transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations related to contracts having an original expected duration in excess of incomeone year was approximately $637 million. We estimate recognition of approximately $427 million of this amount as revenue in the remainder of 2024 and an additional $210 million in 2025 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 bill the customer under the terms of a contract. A contract liability represents our contractual billings in advance of revenue recognized for a contract.

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The following tables present beginning and ending balances of contract assets and contract liabilities, current and long-term, for the three and nine months ended September 30, 2016:March 31, 2024 and 2023:

(Amounts in thousands, except per share data)Three Months Ended September 30, 2016
 As Reported Adjustments As Revised
Sales$943,334
 $2,605
 $945,939
Cost of sales (1)(677,891) 9,931
 (667,960)
Gross profit265,443
 12,536
 277,979
Selling, general and administrative expense (2)(271,643) (9,618) (281,261)
Operating (loss) income(2,806) 2,918
 112
Loss before income taxes(15,124) 2,918
 (12,206)
Provision for income taxes (3)(4,996) 2,169
 (2,827)
Net loss, including noncontrolling interests(20,120) 5,087
 (15,033)
Net loss attributable to Flowserve Corporation$(20,928) $5,087
 $(15,841)
Net loss per share attributable to Flowserve Corporation common shareholders:     
Basic$(0.16) $0.04
 $(0.12)
Diluted(0.16) 0.04
 (0.12)
(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, 2024$280,228 $1,034 $287,697 $1,543 
Revenue recognized that was included in contract liabilities at the beginning of the period— — (101,602)(295)
Revenue recognized in the period in excess of billings166,318 — — — 
Billings arising during the period in excess of revenue recognized— — 90,523 — 
Amounts transferred from contract assets to receivables(156,948)(713)— — 
Currency effects and other, net(2,540)342 2,598 (16)
Ending balance, March 31, 2024$287,058 $663 $279,216 $1,232 


(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, 2023$233,457 $297 $256,963 $1,059 
Revenue recognized that was included in contract liabilities at the beginning of the period— — (117,035)— 
Revenue recognized in the period in excess of billings136,965 4 — — 
Billings arising during the period in excess of revenue recognized— — 146,262 164 
Amounts transferred from contract assets to receivables(137,865)— — — 
Currency effects and other, net(693)4 5,448 2,983 
Ending balance, March 31, 2023$231,864 $305 $291,638 $4,206 

(1) Included in other assets, net.
(2) Included in retirement obligations and other liabilities.

3.Allowance for Expected Credit Losses
The costallowance for credit losses is an estimate of salesthe credit losses expected over the life of our financial assets and instruments. We assess and measure expected credit losses on a collective basis when similar risk characteristics exist, including market, geography, credit risk and remaining duration. Financial assets and instruments that do not share risk characteristics are evaluated on an individual basis. Our estimate of the allowance is assessed and quantified using internal and external valuation information relating to past events, current conditions and reasonable and supportable forecasts over the contractual terms of an asset.
Our primary exposure to expected credit losses is through our accounts 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. Primarily, our experience of historical credit losses provides the basis for our estimation of the allowance. We estimate the allowance based on an aging schedule and according to historical losses as determined from our history of billings and collections. 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 geopolitical risks. We also consider both the current and forecasted macroeconomic conditions as of the reporting date. As identified and needed, we adjust the allowance and recognize adjustments primarily relatein the income statement each period. Accounts receivable are written off against the allowance in the period when the receivable is deemed to correctionsbe uncollectible and further collection efforts have ceased. Subsequent recoveries of previously recorded out of period including an aggregate $8.7 million associated with our EPD reporting segmentwritten off amounts are reflected as a reduction to write down inventory in Brazil.
(2) The selling, general and administrative expense adjustments primarily relate to receivables from our primary Venezuelan customer at one non-U.S. manufacturing site in our EPD segment of $(10.3) million. These receivables should have been included in the charge that we recorded in the third quarter of 2016 to fully reserve all the potentially uncollectible receivables.
(3) The provision for income taxes adjustment primarily relates to the tax effect of the adjustment described in footnote (2) above.

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(Amounts in thousands, except per share data)Nine Months Ended September 30, 2016
 As Reported Adjustments As Revised
Sales$2,916,814
 $2,739
 $2,919,553
Cost of sales (1)(2,018,646) 2,891
 (2,015,755)
Gross profit898,168
 5,630
 903,798
Selling, general and administrative expense (2)(737,083) (10,430) (747,513)
Operating income169,607
 (4,800) 164,807
Other income (expense), net2,091
 (1,021) 1,070
Earnings before income taxes128,959
 (5,821) 123,138
Provision for income taxes (3)(47,809) (1,709) (49,518)
Net earnings, including noncontrolling interests81,150
 (7,530) 73,620
Net earnings attributable to Flowserve Corporation$79,928
 $(7,530) $72,398
Net earnings per share attributable to Flowserve Corporation common shareholders:     
Basic$0.61
 $(0.05) $0.56
Diluted0.61
 (0.06) 0.55

(1) The cost of sales adjustments primarily relate to corrections of previously recorded out of period including an aggregate $4.6 million associated with our EPD reporting segment to write down inventory in Brazil.
(2) The selling, general and administrative expense adjustments primarily relate to the matter described in footnote (2) above.
(3) The provision for income taxes adjustments include the impact of recording a valuation allowance of $(5.0) million related to deferred tax assets that subsequently were determined to not be realizable, partially offset by the tax effect of the matter described in footnote (2) above.

The effect of the prior period revisions on the condensed consolidated statement of cash flows for the nine months ended September 30, 2016 related to net earnings, including noncontrolling interests, for the change in net earnings in the table above, offset primarily by impacts to changes in assets and liabilities. The revisions to individual line items were below $3 million except for the classification change within operating activity cash flows of $15.9 million from Latin America inventory write downs to inventories, net and an increase of $10.3 million to Latin America accounts receivables reserve. Additionally, we adopted ASU 2016-09 on January 1, 2017, see Note 1 for further discussion of the impact of that adoption on our statements of cash flows.
The impacts of the revisions have been reflected throughout the financial statements, including the applicable footnotes, as appropriate.

3.Dispositions
On July 6, 2017, we sold our Flow Control Division's ("FCD") Vogt product line and related assets and liabilities to a privately held company for $28.0 million of cash received at closing. The sale resulted in a pre-tax gain of $10.9 million recorded in gain on sale of businesscredit impairment losses in the condensed consolidated statements of income. In 2016, net sales related to the Vogt business totaled approximately $17 million, with earnings before interest and taxes of approximately $4 million.
Effective May 2, 2017, we sold our FCD's Gestra AG ("Gestra") business to a leading provider of steam system solutions for $203.6 million (€178.3 million), which included $180.8 million (€158.3 million) of cash received at closing (net of divested cash and subsequent working capital adjustments). Additionally, we expect to receive $23.6 million (€20.0 million) of cash currently held in escrow before the end of 2017, which we have classified as an other current asset in prepaid expenses and other. The sale resulted in a pre-tax gain of $130.2 million ($79.4 million after-tax) recorded in gain on sale of business in the condensed consolidated statements of income. The sale included Gestra’s manufacturing facility in Germany as well as related operations in the U.S., the United Kingdom ("U.K."), Spain, Poland, Italy, Singapore and Portugal. In 2016, Gestra recorded revenues of approximately $101 million (€92 million) with earnings before interest and taxes of approximately $17 million (€15 million).


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Contract assets represent a conditional right to consideration for satisfied performance obligations that become a receivable when the conditions are satisfied. Generally, contract assets are recorded when contractual billing schedules differ from revenue recognition based on timing and are managed through the revenue recognition process. Based on our historical credit loss experience, the current expected credit loss for contract assets is estimated to be approximately 1% of the asset balance.
4.Stock-Based Compensation Plans
The following table presents the changes in the allowance for expected credit losses for our accounts receivable and short-term contract assets for the three months ended March 31, 2024 and 2023:
(Amounts in thousands)Accounts receivablesShort-term contract assets
Beginning balance, January 1, 2024$80,013 $4,993 
Charges to cost and expenses, net of recoveries4,316 — 
Write-offs(4,642)(10)
Currency effects and other, net(1,382)3 
Ending balance, March 31, 2024$78,305 $4,986 
Beginning balance, January 1, 2023$83,062 $5,819 
Charges to cost and expenses, net of recoveries2,440 — 
Write-offs(4,325)— 
Currency effects and other, net1,340 (230)
Ending balance, March 31, 2023$82,517 $5,589 
Our allowance on long-term receivables, included in other assets, net, represents receivables with collection periods longer than 12 months and the balance primarily consists of reserved receivables associated with the national oil company in Venezuela. The following table presents the changes in the allowance for long-term receivables for the three months ended March 31, 2024 and 2023:

(Amounts in thousands)20242023
Balance at January 1,$66,864 $66,377 
Currency effects and other, net(507)(802)
Balance at March 31,$66,357 $65,575 
We also 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 March 31, 2024.

4.Stock-Based Compensation Plans
We maintain the Flowserve Corporation Equity and2020 Long-Term Incentive Compensation Plan (the "2010 Plan"(“2020 Plan”), which is a shareholder-approvedshareholder approved plan authorizing the issuance of up to 8,700,00012,500,000 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. Of the 8,700,000 shares of common stock authorized under the 20102020 Plan, 2,634,9087,100,632 were available for issuance as of September 30, 2017. In 2016 the long-term incentive program was amended to allowMarch 31, 2024. Restricted Shares primarily vest over a three-year period. Restricted Shares granted after January 1, 2016 to employees who retire and have achieved at least 55 years of age and 10 years of service to continue to vest over the original vesting period ("55/10 Provision"). Until the second quarterAs of 2017, no previous stock options were outstanding. On May 4, 2017,March 31, 2024, 114,943 stock options were granted with a grant date fair valueweighted average exercise price of $2.0 million, which is expected to be recognized over$48.63 and a weighted-average periodweighted average remaining contractual life of approximately three years.3 years were outstanding and exercisable. No stock options have been granted or vested during the nine months ended September 30, 2017.since 2020.
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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.granted for awards issued prior to 2024. For awards of Restricted Shares granted beginning in 2024 and subject to the 55/10 Provision, compensation expense is recognized over a required six-month service period. We had unearned compensationcompensation of $20.6 million and $15.2$39.2 million at September 30, 2017 and DecemberMarch 31, 2016, respectively,2024, which is expected to be recognized over a remaining weighted-average period of approximately onetwo years. These amountsThis amount will be recognized into net earnings in prospective periods as the awards vest. The total fair value of Restricted Shares vested during the three months ended September 30, 2017March 31, 2024 and 20162023 was $0.2$25.7 million and $0.6$21.8 million, respectively. The total fair value of Restricted Shares vested during the nine months ended September 30, 2017 and 2016 was $28.1 million and $38.7 million, respectively.
We recorded stock-based compensation expense of $3.0$8.7 million ($4.66.7 million pre-tax)after-tax) and $3.9$10.0 million ($6.07.7 million pre-tax)after-tax) for the three months ended September 30, 2017March 31, 2024 and 2016,2023, respectively. We recorded stock-based compensation expense of $13.4 million ($20.3 million pre-tax) and $19.6 million ($30.0 million pre-tax) for the nine months ended September 30, 2017 and 2016, respectively.
The following table summarizes information regarding Restricted Shares:
 Three Months Ended March 31, 2024
SharesWeighted Average
Grant-Date Fair
Value
Number of unvested shares:  
Outstanding as of January 1, 20241,741,486 $36.06 
Granted730,434 41.81 
Vested(702,095)36.63 
Forfeited(34,982)32.76 
Outstanding as of March 31, 20241,734,843 $38.32 
 Nine Months Ended September 30, 2017
 Shares 
Weighted Average
Grant-Date Fair
Value
Number of unvested shares:   
Outstanding - January 1, 20171,259,275
 $50.77
Granted697,832
 49.81
Vested(473,426) 59.38
Canceled(207,618) 48.00
Outstanding as of September 30, 20171,276,063
 $47.50

Unvested Restricted Shares outstanding as of September 30, 2017, includesMarch 31, 2024 included approximately 888,000512,000 units with performance-based vesting provisions. Performance-based units areprovisions issuable in common stock and vest upon the achievement of pre-defined performance targets. Performance-based units granted prior to 2017 havemetrics. Targets for outstanding performance targets based on our average annual return on net assets over a three-year period as compared with the same measure for a defined peer group for the same period. Performance-based units granted in 2017 have performance targetsawards are based on our average return on invested capital and ourfree cash flow as a percent of net income over a three-year period. Performance units issued in 2024, 2023 and 2022 include a secondary measure, relative total shareholder return, ("TSR") over a three-year period as compared withwhich can increase or decrease the same measures for a defined peer group fornumber of vesting units by 15% depending on the same period. MostCompany's performance versus peers. Performance units were granted in three annual grants since January 1, 2015 andissued have a vesting percentage between 0% and 200% depending on the achievement of the specific performance targets. Except for shares granted under the 55/10 Provision, compensationup to 230%. Compensation expense is recognized ratably over a cliff-vesting period of 36 months, based on the fair value of our common stock on the date of grant, as adjusted for actual forfeitures. During the performance period, earned and unearned compensation expense is adjusted based on changes in the expected achievement of the performance targets for all performance-based units granted except for the TSR-based units.granted. Vesting provisions range fromfrom 0 to approximately 1,701,0001,177,000 shares based on performance targets. As of September 30, 2017,March 31, 2024, we estimate vesting of approximately 663,000512,000 shares based on expected achievement of performance targets.



105.Derivative Instruments and Hedges

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5.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 6 to our consolidated financial statements included in our 2016 Annual Report and Note 7 of 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. We have not elected hedge accounting for our foreign exchange forward contracts and the changes in the fair values are recognized immediately in our condensed consolidated statements of income.
During the second quarter of 2017, we discontinued our program to designateForeign exchange forward exchange contracts. The discontinuance of this program had no impact on our financial position as of September 30, 2017. Foreign exchange contractscontracts with third parties not designated as hedging instruments had a notional value of $237.6$640.2 million and $393.2$656.6 million at September 30, 2017March 31, 2024 and December 31, 2016,2023, respectively. At September 30, 2017,March 31, 2024, the length of foreign exchange forward contracts currently in place ranged from 2 days to 20 months.
We are exposed to risk from credit-related losses resulting from nonperformancenonperformance by counterparties to our financial instruments. We perform credit evaluations of our counterparties under foreign exchange forward 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 forward contracts are summarized below:
September 30, December 31,
March 31,March 31,December 31,
(Amounts in thousands)2017 2016(Amounts in thousands)20242023
Current derivative assets$2,526
 $682
Noncurrent derivative assets173
 —
Current derivative liabilities1,172
 6,878
Noncurrent derivative liabilities42
 355
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 forward contracts are summarized below:
Three Months Ended September 30, Nine Months Ended September 30,
(Amounts in thousands)2017 2016 2017 2016
Gain (loss) recognized in income$548
 $(774) $219
 $5,587
(Amounts in thousands)
(Amounts in thousands)
Gains (losses) recognized in income
Gains (losses) recognized in income
Gains (losses) recognized in income
Gains and losses recognized in our condensed consolidated statements of income for foreign exchange forward contracts are classified as other income (expense) income,, net.
In March 2015, we designated €255.7 million of our €500.0 million Euro senior notes discussed in Note 6 as a net investment hedge of our investments in certain of our international subsidiaries that use the Euro as their functional currency. We used the spot method to measure the effectiveness of our net investment hedge. Under this method, for each reporting period, the change in the carrying value of the Euro senior notes due to 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 expense, net in our condensed consolidated statement of income. We evaluate the effectiveness of our net investment hedge on a prospective basis at the beginning of each quarter. We did not record any ineffectiveness for the nine months ended September 30, 2017 and 2016.

6.Debt
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6.Debt
Debt, including capitalfinance lease obligations, net of discounts and debt issuance costs, consisted of:
March 31,
  December 31,  
(Amounts in thousands, except percentages)20242023
3.50% USD Senior Notes due October 1, 2030, net of unamortized discount and debt issuance costs of $4,332 and $4,479, respectively$495,668 $495,521 
2.80% USD Senior Notes due January 15, 2032, net of unamortized discount and debt issuance costs of $5,021 and $5,164, respectively494,979 494,836 
Term Loan, interest rate of 6.70% at March 31, 2024 and 6.70% at December 31, 2023, net of debt issuance costs of $236 and $274, respectively204,764 219,726 
Finance lease obligations and other borrowings23,353 23,467 
Debt and finance lease obligations1,218,764 1,233,550 
Less amounts due within one year66,428 66,243 
Total debt due after one year$1,152,336 $1,167,307 
 September 30, 
  December 31,  
(Amounts in thousands, except percentages)2017 2016
1.25% EUR Senior Notes due March 17, 2022, net of unamortized discount and debt issuance costs of $5,558 and $5,748$585,042
 $519,902
4.00% USD Senior Notes due November 15, 2023, net of unamortized discount and debt issuance costs of $2,687 and $2,972297,313
 297,028
3.50% USD Senior Notes due September 15, 2022, net of unamortized discount and debt issuance costs of $3,386 and $3,848496,614
 496,152
Term Loan Facility, interest rate of 2.58% at September 30, 2017 and 2.25% at December 31, 2016, net of debt issuance costs of $694 and $745179,306
 224,255
Capital lease obligations and other borrowings28,417
 33,286
Debt and capital lease obligations1,586,692
 1,570,623
Less amounts due within one year80,635
 85,365
Total debt due after one year$1,506,057
 $1,485,258

Senior Credit Facility

As discussed in Note 1012 to our consolidated financial statements included in our 20162023 Annual Report, our credit agreement (the "Senior Credit Agreement") provides for an initial $400.0a $800.0 million term loan (“Term Loan Facility”) and a $1.0 billionunsecured revolving credit facility (“Revolving(the "Revolving Credit Facility”Facility"), which includes a $750.0 million sublimit for the issuance of letters of credit and together with the Term Loan Facility, the “Senior Credit Facility”a $30.0 million sublimit for swing line loans, and a $300 million unsecured term loan facility (the "Term Loan") with a maturity date of October 14, 2020.September 13, 2026. On June 30, 2017,February 3, 2023, we amended and restated our existingcredit agreement (the “Amendment”) which (i) replaced LIBOR with Secured Overnight Financing Rate (“SOFR”) as the benchmark reference rate, (ii) lowered the Material Acquisition (as defined in the Senior Credit Facility. Facility) threshold from $250.0 million to $200.0 million and (iii) extended compliance dates for certain financial covenants. We believe this Amendment will provide greater flexibility and additional liquidity under our Senior Credit Facility as we continue to pursue our business goals and strategy. Most other terms and conditions under the previous Senior Credit Facility remained unchanged.
The amendment, among other changes, includes the following: (i) a decrease ofinterest rates per annum applicable to the Revolving Credit Facility, other than with respect to swing line loans, are adjusted Term Secured Overnight Financing Rate ("Adjusted Term SOFR") plus between 1.000% to 1.750%, depending on our debt rating by either Moody’s Investors Service, Inc. ("Moody's") or Standard & Poor’s Financial Services LLC ("S&P"), or, at our option, the Base Rate (as defined in the Senior Credit Agreement) plus between 0.000% to 0.750% depending on our debt rating by either Moody’s or S&P. An additional credit spread adjustment of 0.100% is included within Adjusted Term SOFR to account for the transition from LIBOR to SOFR. At March 31, 2024, the interest rate on the Revolving Credit Facility was the Adjusted Term SOFR plus 1.375% in the case of Adjusted Term SOFR loans and the Base Rate plus 0.375% in the case of
Base Rate loans. In addition, a commitment from $1.0 billion to $800 million, (ii) an increasefee is payable quarterly in arrears on the daily unused portions of the leverage ratio from 3.50 to 4.00 times debt to total Consolidated EBITDA, through June 30, 2019, with a step-down to 3.75 for any fiscal quarter ending after July 1, 2019, (iii)Revolving Credit Facility. The commitment fee will be between 0.080% and 0.250% of unused amounts under the addition of a new pricing levelRevolving Credit Facility depending on our senior unsecured long-term debt ratings for Ba2/BB, with an increase in interest rate margin for LIBOR loans to 2.00% and for base rate loans to 1.00% and (iv) a revision torating by either Moody’s or S&P.The commitment fee was 0.175% (per annum) during the restrictions onperiodended March 31, 2024.
Under the ability to incur debt by decreasing the maximum principal amount of priority debt allowed from 15% to 7.5% of the consolidated tangible assets and a decrease on the maximum amount of receivables that could be securitized from $200 million to $100 million. All other material terms and conditions of the Senior Credit Facility remained unchangedAgreement, interest rates per annum applicable to the Term Loan are stated as discussedAdjusted Term SOFR plus between 0.875% to 1.625%, depending on the Company’s debt rating by either Moody’s or S&P, or, at the option of the Company, the Base Rate plus between 0.000% to 0.625% depending on the Company’s debt rating by either Moody’s or S&P. At March 31, 2024, the interest rate on the Term Loan was Adjusted Term SOFR plus 1.250% in Note 10 to our consolidated financial statements includedthe case of Adjusted Term SOFR loans and the Base Rate plus 0.250% in our 2016 Annual Report.

the case of Base Rate loans.
As of September 30, 2017March 31, 2024 and December 31, 2016,2023, we had no amountsrevolving loans outstanding under the RevolvingSenior Credit Facility. WeFacility and we had outstanding letters of credit of $91.8$127.8 million and $102.6 million at September 30, 2017 and December 31, 2016, respectively, which reduced our borrowing capacity to $708.2 million and $553.5$127.1 million, respectively. Our compliance with applicable financial covenantsIn April 2024 the Company borrowed $100.0 million on the Revolving Credit Facility for general corporate purposes and, as of April 29, 2024, the Company has $100 million outstanding. After consideration of the outstanding letters of credit as of March 31, 2024, the amount available for borrowings under the Senior Credit Facility is tested quarterly, and we complied with all applicable covenants aswas limited to $672.2 million. As of September 30, 2017.

We may prepay loansDecember 31, 2023, the amount available for borrowings under our Senior Credit Facility in whole or in part, without premium or penalty, at any time. A commitment fee, which is payable quarterly on the daily unused portions of the SeniorRevolving Credit Facility was 0.150% (per annum) during the period ended September 30, 2017. During the nine months ended September 30, 2017, we made scheduled repayments of $45.0 million under our Term Loan Facility.$672.9 million. We have scheduled repayments of $15.0 million due in each of the next four quarters on our Term Loan Facility.Loan.

Our compliance with applicable financial covenants under the Senior Notes and Senior Credit Facility are tested quarterly. We were in compliance with all applicable covenants as of March 31, 2024.

7.Fair Value
7.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 associated associated 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 5.

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TableThe carrying value of Contents

Ourour financial instruments are presented at fair valueas reflected in our condensed consolidated balance sheets approximates fair value, with the exception of our long-term debt. The estimated fair value of our long-term debt, excluding the Senior Notes, approximatesapproximates the carrying value and is classified asdetermined using Level II inputs under the fair value hierarchy.hierarchy. The carrying value of our debt is included in Note 6. The estimated fair value of our Senior Notes at September 30, 2017March 31, 2024 was $1,400.1$858.5 million comparedcompared to the carrying value of $1,379.0 million.$990.6 million. The estimated fair value of the Senior Notes is based on Level I quoted market rates. The carrying amounts of our other financial instruments (e.g., cash and cash equivalents, accounts receivable, net, accounts payable and short-term debt) approximatedapproximated fair value due to their short-term nature at September 30, 2017March 31, 2024 and December 31, 2016.2023.


8.
8.Inventories
Inventories
Inventories, net consisted of the following:
March 31,  December 31,  
(Amounts in thousands)20242023
Raw materials$420,515 $407,979 
Work in process309,443 302,655 
Finished goods263,080 278,787 
Less: Excess and obsolete reserve(109,697)(109,484)
Inventories$883,341 $879,937 

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 September 30, 
  December 31,  
(Amounts in thousands)2017 2016
Raw materials$374,154
 $348,012
Work in process682,522
 629,766
Finished goods208,465
 206,086
Less: Progress billings(233,040) (216,783)
Less: Excess and obsolete reserve(80,503) (69,391)
Inventories, net$951,598
 $897,690
In the second quarter of 2017 we recorded a $16.9 million inventory charge for costs incurred related to a contract to supply oil and gas platform equipment to an end user in Latin America. This charge was primarily related to our IPD reporting segment and resulted in a decrease to finished goods.


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9.Earnings Per Share
9.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 March 31,
(Amounts in thousands, except per share data)20242023
Net earnings of Flowserve Corporation$74,220 $26,766 
Earnings attributable to common and participating shareholders$74,220 $26,766 
Weighted average shares:  
Common stock131,464 130,886 
Participating securities46 44 
Denominator for basic earnings per common share131,510 130,930 
Effect of potentially dilutive securities858 824 
Denominator for diluted earnings per common share132,368 131,754 
Earnings per common share:  
Basic$0.56 $0.20 
Diluted0.56 0.20 
 Three Months Ended September 30,
(Amounts in thousands, except per share data)2017 2016
Net earnings (loss) of Flowserve Corporation$47,605
 $(15,841)
Dividends on restricted shares not expected to vest—
 —
Earnings (loss) attributable to common and participating shareholders$47,605
 $(15,841)
Weighted average shares:   
Common stock130,681
 130,299
Participating securities79
 —
Denominator for basic earnings per common share130,760
 130,299
Effect of potentially dilutive securities636
 —
Denominator for diluted earnings per common share131,396
 130,299
Earnings (loss) per common share:   
Basic$0.36
 $(0.12)
Diluted0.36
 (0.12)
 Nine Months Ended September 30,
(Amounts in thousands, except per share data)2017 2016
Net earnings of Flowserve Corporation$108,534
 $72,398
Dividends on restricted shares not expected to vest—
 5
Earnings attributable to common and participating shareholders$108,534
 $72,403
Weighted average shares:   
Common stock130,574
 130,087
Participating securities111
 298
Denominator for basic earnings per common share130,685
 130,385
Effect of potentially dilutive securities653
 522
Denominator for diluted earnings per common share131,338
 130,907
Earnings per common share:   
Basic$0.83
 $0.56
Diluted0.83
 0.55
Diluted earnings per share above is based upon the weighted average number of shares as determined for basic earnings per share plus shares potentially issuable in conjunction with stock options and Restricted Shares. As a result of the net loss for the three months ended September 30, 2016, we excluded 803,251 of unvested Restricted Shares from the calculation of diluted EPS due to their anti-dilutive effect.


10.Legal Matters and Contingencies
10.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, the number of such claims may fluctuate or increase between periods, and 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.

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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. payment, other than legal fees. Activity related to asbestos claims during the periods indicated was as follows:
Three Months Ended March 31,
20242023
Beginning claims(1)8,236 8,139 
New claims617 577 
Resolved claims(847)(640)
Other(2)219 (5)
Ending claims(1)8,225 8,071 
____________________
(1) Beginning and ending claims data in each period excludes inactive claims, as the Company assumes that inactive cases will not be pursued further by the respective plaintiffs.A claim is classified as inactive either due to inactivity over a period of three years 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
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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”.

The following table presents the changes in the estimated asbestos liability:

(Amounts in thousands)20242023
Beginning balance, January 1,$102,903 $98,652 
Asbestos liability adjustments, net— (106)
Cash payment activity(1,919)(3,766)
Other, net(1,592)(1,495)
Ending balance, March 31,$99,392 $93,285 

During both of the three months ended March 31, 2024 and 2023 the Company incurred expenses (net of insurance) of approximately $1.8 million to defend, resolve or otherwise dispose of outstanding claims, including legal and other related expenses. These expenses are included within selling, general and administrative ("SG&A") in our condensed consolidated statements of income.
The Company had cash inflows (outflows) (net of insurance and/or indemnity) to defend, resolve or otherwise dispose of outstanding claims, including legal and other related expenses of approximately $(3.7) million and $(5.6) million, respectively, during the three months ended March 31, 2024 and 2023, respectively.
Historically, a high percentage of resolved claims have been covered by applicable insurance or indemnities from other companies, and we believe that a substantial majorityportion of existing claims should continue to be covered by insurance or indemnities. Accordingly,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 a liability for ourthese claims reflect reasonable and probable estimates of these amounts. Our estimate of our ultimate exposure for asbestos claims, however, is subject to significant uncertainties, including the most likely settlementtiming and number and types of assertednew claims, and a related receivable from insurers or other companies for our estimated recovery, to the extent we believe that the amounts of recovery are probable and not otherwise in dispute. While unfavorable court rulings, judgments or settlement terms regardingand ultimate costs to settle. Additionally, the continued viability of carriers may also impact the amount of probable insurance recoveries. We believe that these claimsuncertainties 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 in future periods are resolved more favorably than reflected in the recorded receivables, would result in discrete gains in the applicable quarter. We are currently unable to estimate the impact, if any, of unasserted asbestos-related claims, although future claims would also be subject to then existing indemnities and insurance coverage.
United Nations Oil-for-Food Program
In mid-2006, the French authorities began an investigation of over 170 French companies, of which one of our French subsidiaries was included, concerning suspected inappropriate activities conducted in connection with the United Nations Oil for Food Program. As previously disclosed, the French investigation of our French subsidiary was formally opened in the first quarter of 2010, and our French subsidiary filed a formal response with the French court. In July 2012, the French court ruled against our procedural motions to challenge the constitutionality of the charges and quash the indictment. Hearings occurred on April 1-2, 2015, and the Company presented its defense and closing arguments. On June 18, 2015, the French court issued its ruling dismissing the case against the Company and the other defendants. However, on July 1, 2015, the French prosecutor lodged an appeal and we anticipate that the hearing for the appeal will be held in 2018. We currently do not expect to incur additional case resolution costs of a material amount in this matter. However, if the French authorities ultimately take enforcement action against our French subsidiary regarding its investigation, we may be subject to monetary and non-monetary penalties, which we currently do not believe will have a material adverse financial impact on our company.
Other
We are currently involved as a potentially responsible party at five former public waste disposal sites in various stages of evaluation or remediation. The projected cost of remediation at these sites, as well as our alleged "fair share" allocation, will remain uncertain until all studies have been completed and the parties have either negotiated an amicable resolution or the matter has been judicially resolved. At each site, there are many other parties who have similarly been identified. Many of the other parties identified are financially strong and solvent companies that appear able to pay their share of the remediation costs. Based on our information about the waste disposal practices at these sites and the environmental regulatory process in general, we believe that it is likely that ultimate remediation liability costs for each site will be apportioned among all liable parties, including site owners and waste transporters, according to the volumes and/or toxicity of the wastes shown to have been disposed of at the sites. We believe that our financial exposure for existing disposal sites will not be materially in excess of accrued reserves.
As previously disclosed in our 2016 Annual Report, we terminated an employee of an overseas subsidiary after uncovering actions that violated our Code of Business Conduct and may have violated the Foreign Corrupt Practices Act.  We completed our internal investigation into the matter, self-reported the potential violation to the United States Department of Justice (the “DOJ”) and the SEC, and continue to cooperate with the DOJ and SEC.  We previously received a subpoena from the SEC requesting additional information and documentation related to the matter and have completed our response to the subpoena.  We currently believe that this matter will not have a material adverse financial impact on the Company, but there can be no assurance that the Company will not be subjected to monetary penalties and additional costs. 
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.


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11.Pension and Postretirement Benefits
11.Retirement and Postretirement Benefits
Components of the net periodic cost for retirementpension and postretirement benefits for the three months ended September 30, 2017March 31, 2024 and 20162023 were as follows:
U.S.
Defined Benefit Plans		Non-U.S.
Defined Benefit Plans		Postretirement
Medical Benefits
(Amounts in millions) 202420232024202320242023
Service cost$5.7 $5.0 $1.3 $1.1 $— $— 
Interest cost5.4 5.2 3.0 2.9 0.2 0.2 
Expected return on plan assets(6.0)(6.3)(1.9)(1.6)— — 
Amortization of unrecognized prior service cost and other costs— — 0.1 0.1 — — 
Amortization of unrecognized net loss— — 0.6 0.3 — — 
Net periodic cost recognized$5.1 $3.9 $3.1 $2.8 $0.2 $0.2 
 
U.S.
Defined Benefit Plans
 
Non-U.S.
Defined Benefit Plans
 
Postretirement
Medical Benefits
(Amounts in millions) 2017 2016 2017 2016 2017 2016
Service cost$5.6
 $5.6
 $1.7
 $1.8
 $—
 $—
Interest cost4.3
 4.8
 2.2
 2.9
 0.3
 0.3
Expected return on plan assets(6.2) (6.0) (2.1) (2.7) —
 —
Amortization of prior service cost—
 0.2
 —
 —
 —
 —
Amortization of unrecognized net loss (gain)1.5
 1.2
 0.9
 1.3
 (0.1) (0.1)
Net periodic cost recognized$5.2
 $5.8
 $2.7
 $3.3
 $0.2
 $0.2

ComponentsThe components of the net periodic cost for retirementpension and postretirement benefits other than service costs are included in other income (expense), net in our condensed consolidated statements of income.
In August 2023, we amended the Company-sponsored qualified defined benefit pension plan in the United States (the "Qualified Plan") for non-union employees to discontinue future benefit accruals under the nine months monthsQualified Plan and freeze existing accrued benefits effective January 1, 2025. Benefits earned by participants under the Qualified Plan prior to January 1, 2025, are not affected. We also amended the Company-sponsored non-qualified defined benefit pension plan in the United States (the "Non-Qualified Plan") that provides enhanced retirement benefits to select members of management. The Qualified Plan and the Non-Qualified Plan were closed to new entrants effective January 1, 2024, and September 1, 2023, respectively. The amendments resulted in a curtailment of both plans during the year ended September 30, 2017December 31, 2023. The curtailment loss incurred and 2016 were as follows:the change in projected benefit obligation was immaterial.

12.Shareholders’ Equity


U.S.
Defined Benefit Plans
 
Non-U.S.
Defined Benefit Plans
 
Postretirement
Medical Benefits
(Amounts in millions) 2017 2016 2017 2016 2017 2016
Service cost$16.7
 $16.9
 $5.1
 $5.3
 $—
 $—
Interest cost12.7
 14.3
 6.6
 8.8
 0.7
 0.9
Expected return on plan assets(18.4) (18.0) (6.3) (8.0) —
 —
Amortization of prior service cost0.1
 0.4
 —
 —
 0.1
 0.1
Amortization of unrecognized net loss (gain)4.5
 3.7
 2.6
 3.7
 (0.2) (0.3)
Net periodic cost recognized$15.6
 $17.3
 $8.0
 $9.8
 $0.6
 $0.7

12.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 dependent on its assessment of our financial situation and business outlook at the applicable time.discretion.
Dividends declared per share were as follows:
 Three Months Ended March 31,
20242023
Dividends declared per share$0.21 $0.20 
Share Repurchase Program– On November 13,In 2014, our Board of Directors approved a $500.0 million share repurchase authorization. As of December 31, 2023, we had $96.1 million of remaining capacity under the prior share repurchase authorization. Effective February 19, 2024, the Board of Directors approved an increase in our total remaining capacity under the share repurchase program to $300.0 million. Our share repurchase program does not have an expiration date and we reserve the right to limit or terminate the repurchase program at anytimeany time without notice.
We had no repurchases ofrepurchased 57,000 shares of our outstanding common stock for $2.5 million during the three and nine months ended September 30, 2017 and 2016.March 31, 2024, compared to no repurchases of shares for the same period in 2023. As of September 30, 2017March 31, 2024, we had $160.7$297.5 million of remaining capacity under our current share repurchase program.

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13.Income Taxes
13.Income Taxes
For the three months ended September 30, 2017,March 31, 2024, we earned $68.4$98.1 million before taxes and providedrecorded a provision for income taxes of $19.6$20.1 million resulting in an effective tax rate of 28.7%. For the nine months ended September 30, 2017, we earned $196.1 million before taxes and provided for income taxes of $85.8 million resulting in an effective tax rate of 43.8%20.5%. The effective tax rate varied from the U.S. federal statutory rate for the three and nine months ended September 30, 2017March 31, 2024 primarily due to the net impact of foreign operations losses in certain foreign jurisdictions for which no tax benefit was provided and taxes related to the sale of the Gestra and Vogt businesses.state income taxes.
For the three months ended September 30, 2016, March 31, 2023, we incurredearned $34.4 million before taxes and recorded a pre-tax loss of $12.2 million and providedprovision for income taxes of $2.8 million resulting in an effective tax rate of negative 23.2%. For the nine months ended September 30, 2016, we earned $123.1 million before taxes and provided for income taxes of $49.5$4.5 million resulting in an effective tax rate of 40.2%12.9%. The effective tax rate varied from the U.S. federal statutory rate for the three and nine months ended September 30, 2016March 31, 2023 primarily due to the benefits of a tax planning strategy, partially offset by the net impact of foreign operations tax impacts from our Realignment Programs and losses in certain foreign jurisdictions for which no tax benefit was provided.

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state income taxes.
As of September 30, 2017,March 31, 2024, the amount of unrecognized tax benefits increased by $3.1$1.1 million from December 31, 2016.2023. With limited exception, we are no longer subject to U.S. federal income tax audits for years through 2015,2017, state and local income tax audits for years through 20112017 or non-U.S. income tax audits for years through 2010.2016. We are currently under examination for various years in Austria, France,Canada, China, Germany, India, Indonesia, Italy, Kenya, Madagascar, Malaysia, Mexico, Morocco, the Philippines, Saudi Arabia, Singapore, Switzerland, the U.S.United States 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 $8$5 million within the next 12 months.

The Company maintains a full valuation allowance against the net deferred tax assets in certain foreign tax jurisdictions as of March 31, 2024. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of net deferred tax assets. We assess our forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets in determining the sufficiency of our valuation allowance. Failure to achieve forecasted taxable income in the applicable tax jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in our effective tax rate on future earnings. It is possible that there may be sufficient positive evidence to release a portion of the remaining valuation allowance in those foreign jurisdictions. Release of the valuation allowance would result in a benefit to income tax expense for the period the release is recorded, which could have a material impact on net earnings. The timing and amount of the potential valuation allowance release are subject to significant management judgment and the level of profitability achieved.
On December 20, 2021 the Organisation for Economic Co-operation and Development (“OECD”) released the Model GloBE Rules for Pillar Two defining a 15% global minimum tax rate for large multinational corporations. Many countries continue to consider changes in their tax laws and regulations based on the Pillar Two proposals. We are continuing to evaluate the impact of these proposed and enacted legislative changes as new guidance becomes available. Some of these legislative changes could result in double taxation of our non-U.S. earnings, a reduction in the tax benefit received from our tax incentives, or other impacts to our effective tax rate and tax liabilities. As of March 31, 2024, the company is not expecting material impacts under currently enacted legislation.

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14.Segment Information
14.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 March 31, 2024
 (Amounts in thousands)FPDFCDSubtotal–Reportable SegmentsEliminations and All OtherConsolidated Total
Sales to external customers$768,763 $318,716 $1,087,479 $— $1,087,479 
Intersegment sales637 1,802 2,439 (2,439)— 
Segment operating income110,894 34,708 145,602 (32,523)113,079 
Three Months Ended March 31, 2023
FPDFCDSubtotal–Reportable SegmentsEliminations and All OtherConsolidated Total
Sales to external customers$699,478 $280,827 $980,305 $— $980,305 
Intersegment sales638 790 1,428 (1,428)— 
Segment operating income79,072 18,534 97,606 (40,420)57,186 


18

Three Months Ended September 30, 2017
 (Amounts in thousands)Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Sales to external customers$416,031
 $180,347
 $287,002
 $883,380
 $—
 $883,380
Intersegment sales8,157
 9,388
 686
 18,231
 (18,231) —
Segment operating income (loss)51,782
 (3,551) 48,497
 96,728
 (22,709) 74,019
            
Three Months Ended September 30, 2016
 (Amounts in thousands)Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Sales to external customers$451,354
 $196,172
 $298,413
 $945,939
 $—
 $945,939
Intersegment sales7,098
 7,126
 937
 15,161
 (15,161) —
Segment operating (loss) income (1)(21,982) (17,062) 53,717
 14,673
 (14,561) 112

(1) Prior period amounts have been revised to reflect the correction of certain immaterial errors. See Note 2 for more information. Of the $2.9 million adjustment to consolidated operating (loss) income, $3.2 million related to the EPD segment, $(1.4) million related to the IPD segment, $0.9 million related to the FCD segment and $0.2 million related to Eliminations and All Other.
.
Nine Months Ended September 30, 2017          
 (Amounts in thousands)Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Sales to external customers$1,252,541
 $533,302
 $840,919
 $2,626,762
 $—
 $2,626,762
Intersegment sales24,022
 26,640
 2,608
 53,270
 (53,270) —
Segment operating income (loss)106,902
 (46,016) 254,120
 315,006
 (65,036) 249,970
            
Nine Months Ended September 30, 2016
 (Amounts in thousands)Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Sales to external customers$1,418,434
 $591,008
 $910,111
 $2,919,553
 $—
 $2,919,553
Intersegment sales25,763
 24,772
 5,410
 55,945
 (55,945) —
Segment operating income (loss)(1)97,402
 (10,434) 140,541
 227,509
 (62,702) 164,807


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15.Accumulated Other Comprehensive Income (Loss)
(1) Prior period amounts have been revised to reflect the correction of certain immaterial errors. See Note 2 for more information. Of the $(4.8) million adjustment to consolidated operating income (loss), $(1.1) million related to the EPD segment, $(4.3) million related to the IPD segment, $0.4 million related to the FCD segment and $0.2 million related to Eliminations and All Other.
15.Accumulated Other Comprehensive Loss
The following table presents the changes in accumulated other comprehensive loss ("AOCL"),AOCL, net of tax for the three months ended September 30, 2017March 31, 2024 and 2016:
2023:
 2017 2016
(Amounts in thousands)Foreign currency translation items(1) Pension and other post-retirement effects Cash flow hedging activity Total(1) Foreign currency translation items(1) Pension and other post-retirement effects Cash flow hedging activity Total(1)
Balance - July 1$(415,506) $(137,188) $(1,154) $(553,848) $(408,605) $(114,525) $(2,255) $(525,385)
Other comprehensive income (loss) before reclassifications17,674
 (2,004) 12
 15,682
 (15,587) 1,952
 39
 (13,596)
Amounts reclassified from AOCL—
 1,560
 —
 1,560
 —
 1,767
 521
 2,288
Net current-period other comprehensive income (loss)17,674
 (444) 12
 17,242
 (15,587) 3,719
 560
 (11,308)
Balance - September 30$(397,832) $(137,632) $(1,142) $(536,606) $(424,192) $(110,806) $(1,695) $(536,693)

20242023
(Amounts in thousands)Foreign currency translation items(1)Pension and other post-retirement effectsCash flow hedging activity (2)TotalForeign currency translation items(1)Pension and other post-retirement effectsCash flow hedging activity (2)Total
Balance - January 1,$(523,873)$(121,882)$(813)$(646,568)$(554,683)$(86,356)$(933)$(641,972)
Other comprehensive income (loss) before reclassifications (3)(28,244)517 — (27,727)13,506 (865)— 12,641 
Amounts reclassified from AOCL— 859 (5)854 — 422 30 452 
Net current-period other comprehensive income (loss) (3)(28,244)1,376 (5)(26,873)13,506 (443)30 13,093 
Balance - March 31,$(552,117)$(120,506)$(818)$(673,441)$(541,177)$(86,799)$(903)$(628,879)

(1) Includes foreign currency translation adjustments attributable to noncontrolling interests of $3.9$(7.0) million and $3.5$5.8 million at JulyJanuary 1, 20172024 and 2016,2023, respectively, and $3.9$7.2 million and $3.5$2.7 million for September 30, 2017at March 31, 2024 and 2016,2023, respectively. Includes net investment hedge losses of $6.3 million
(2) Other comprehensive loss before reclassifications and $2.2 million, net of deferred taxes, for the three months ended September 30, 2017 and 2016, respectively.amounts reclassified from AOCL to interest expense related to designated cash flow hedges.
(3) Amounts in parentheses indicate debits.an increase to AOCL.


The following table presents the reclassifications out of AOCL:
Three Months Ended March 31,Three Months Ended March 31,
(Amounts in thousands)(Amounts in thousands)Affected line item in the statement of income2024(1)2023(1)
 Three Months Ended September 30,
(Amounts in thousands) Affected line item in the statement of income 2017(1) 2016 (1)
    
Cash flow hedging activity    
Foreign exchange contracts    
Pension and other postretirement effects
Pension and other postretirement effects
 Sales $—
 $(717)
 Tax benefit —
 196
  Net of tax $—
 $(521)
    
Pension and other postretirement effects    
Amortization of actuarial losses(2) $(2,284) $(2,395)
Amortization of actuarial losses(2)
Amortization of actuarial losses(2)
Prior service costs(2) (57) (153)
Tax benefit (expense)
Net of tax


 Tax benefit 781
 781


 Net of tax $(1,560) $(1,767)
Cash flow hedging activity
Cash flow hedging activity
Cash flow hedging activity
Amortization of Treasury rate lock
Amortization of Treasury rate lock
Amortization of Treasury rate lock
Tax benefit (expense)
Net of tax

(1) Amounts in parentheses indicate decreases to income. None of the reclassreclassified amounts have a noncontrolling interest component.
(2) These accumulated other comprehensive lossAOCL components are included in the computation of net periodic pension cost. See Note 11 for additional details.

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16.Realignment Programs
The following table presents the changes in AOCL, net of tax for the nine months ended September 30, 2017 and 2016:
 2017 2016
(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$(483,609) $(136,530) $(1,238) $(621,377) $(411,615) $(120,461) $(3,458) $(535,534)
Other comprehensive income (loss) before reclassifications85,225
 (5,818) 73
 79,480
 (12,577) 4,330
 633
 (7,614)
Amounts reclassified from AOCL552
 4,716
 23
 5,291
 —
 5,325
 1,130
 6,455
Net current-period other comprehensive income (loss)85,777
 (1,102) 96
 84,771
 (12,577) 9,655
 1,763
 (1,159)
Balance - September 30$(397,832) $(137,632) $(1,142) $(536,606) $(424,192) $(110,806) $(1,695) $(536,693)

(1) Includes foreign currency translation adjustments attributable to noncontrolling interests of $3.4 million and $2.7 million at January 1, 2017 and 2016 and $3.9 million and $3.5 million for September 30, 2017 and 2016, respectively. Includes net investment hedge losses of $19.6 million and $10.3 million,(2) net of deferred taxes, for the nine months ended September 30, 2017 and 2016, respectively. Amounts in parentheses indicate debits.
(2) Previously disclosed as a loss of $6.1 million in 2016. No incremental impact on our consolidated financial condition or result of operations.

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 2017(1) 2016 (1)
Foreign currency translation items      
Release of cumulative translation adjustments due to sale of business(2) Gain on sale of business $(552) $—
  Tax benefit —
 —
   Net of tax $(552) $—
       
Cash flow hedging activity      
   Foreign exchange contracts      
  Sales $(30) $(1,531)
  Tax benefit 7
 401
   Net of tax $(23) $(1,130)
       
Pension and other postretirement effects      
Amortization of actuarial losses(2)   $(6,885) $(7,184)
Prior service costs(2)   (172) (458)
  Tax benefit 2,341
 2,317
  Net of tax $(4,716) $(5,325)

(1) Amounts in parentheses indicate decreases to income. None of the reclass amounts have a noncontrolling interest component.
(2) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 11 for additional details.


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16.Realignment Programs
In the first quarter of 2015,2023, we identified and initiated certain realignment activities concurrent with the consolidation of our FPD aftermarket and pump operations into a realignment program ("R1 Realignment Program") to reduce and optimize certain non-strategic QRCs and manufacturing facilities. In the second quarter of 2015, we initiated a second realignment program ("R2 Realignment Program")single operating model. This consolidated operating model is designed to better align costsour go to market strategy with our product offerings, enable end-to-end lifecycle responsibility and improve long-term efficiency, including further manufacturingaccountability, and to facilitate more efficient operations. During 2023 we also initiated certain product and portfolio optimization throughactivities. Additionally, we committed to an estimated $50 million in cost reduction efforts to begin in 2023. Collectively, the consolidationabove realignment activities are referred to as the "2023 Realignment Programs." The activities of facilities, a reductionthe 2023 Realignment Programs were identified and implemented in our workforce, the transfer ofphases throughout 2023 and are continuing into 2024. The realignment activities from high-cost regions to lower-cost facilities and the divestiture of certain non-strategic assets.
The R1 Realignment Program and the R2 Realignment Program (collectively the "Realignment Programs") consist of both restructuring and non-restructuring charges. Restructuring charges represent costs associated with the relocation or reorganization of certain business activities and facility closures and include related severance costs. Non-restructuring charges are primarily employee severance associated with the workforce reductions to reduce redundancies.and professional service fees. Expenses are primarily reported in COScost of sales ("COS") or SG&A, as applicable, in our condensed consolidated statements of income. We currently anticipate a total investment in these programsrealignment activities that have been evaluated and initiated of approximately $360$100 million including projectsof which $18 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 process or under final evaluation. We anticipate to incur the remaining charges throughout the remainder of 2017 and into 2018.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 theour 2023 Realignment Programs:
Three Months Ended March 31, 2024
 (Amounts in thousands)FPDFCDSubtotal–Reportable SegmentsAll OtherConsolidated Total
Realignment Charges
Restructuring Charges
     COS$4,414 $15 $4,429 $— $4,429 
     SG&A701 — 701 — 701 
$5,115 $15 $5,130 $— $5,130 
Non-Restructuring Charges   
     COS$630 $752 $1,382 $(138)$1,244 
     SG&A340 114 454 339 793 
$970 $866 $1,836 $201 $2,037 
Total Realignment Charges
     COS$5,044 $767 $5,811 $(138)$5,673 
     SG&A1,041 114 1,155 339 1,494 
Total$6,085 $881 $6,966 $201 $7,167 
 Three Months Ended September 30, 2017
 (Amounts in thousands)Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Restructuring Charges           
     COS$5,252
 $19
 $5,396
 $10,667
 $—
 $10,667
     SG&A831
 28
 364
 1,223
 (8) 1,215
     Income tax expense1,000
 —
 —
 1,000
 —
 1,000
 $7,083
 $47
 $5,760
 $12,890
 $(8) $12,882
Non-Restructuring Charges 
  
  
      
     COS$1,793
 $2,002
 $(242) $3,553
 $—
 $3,553
     SG&A(113) (407) 658
 138
 1,218
 1,356
 $1,680
 $1,595
 $416
 $3,691
 $1,218
 $4,909
Total Realignment Charges           
     COS$7,045
 $2,021
 $5,154
 $14,220
 $—
 $14,220
     SG&A718
 (379) 1,022
 1,361
 1,210
 $2,571
     Income tax expense1,000
 —
 —
 1,000
 —
 $1,000
Total$8,763
 $1,642
 $6,176
 $16,581
 $1,210
 $17,791


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Three Months Ended March 31, 2023
 (Amounts in thousands)FPDFCDSubtotal–Reportable Segments All OtherConsolidated Total
Realignment Charges
Restructuring Charges
     COS$(1,012)$— $(1,012)$66 $(946)
     SG&A— 8,905 8,905 — 8,905 
$(1,012)$8,905 $7,893 $66 $7,959 
Non-Restructuring Charges   
     COS$1,402 $11 $1,413 $(265)$1,148 
     SG&A2,050 1 2,051 5,721 7,772 
$3,452 $12 $3,464 $5,456 $8,920 
Total Realignment Charges
     COS$390 $11 $401 $(199)$202 
     SG&A2,050 8,906 10,956 5,721 16,677 
Total$2,440 $8,917 $11,357 $5,522 $16,879 

 Three Months Ended September 30, 2016
 (Amounts in thousands)Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Restructuring Charges           
     COS$5,711
 $15,599
 $796
 $22,106
 $—
 $22,106
     SG&A393
 3,928
 20
 4,341
 (32) 4,309
     Income tax expense2,000
 2,800
 600
 5,400
 —
 5,400
 $8,104
 $22,327
 $1,416
 $31,847
 $(32) $31,815
Non-Restructuring Charges 
  
  
      
     COS$2,707
 $445
 $(749) $2,403
 $(6) $2,397
     SG&A1,010
 (344) 623
 1,289
 1,385
 2,674
 $3,717
 $101
 $(126) $3,692
 $1,379
 $5,071
Total Realignment Charges           
     COS$8,418
 $16,044
 $47
 $24,509
 $(6) $24,503
     SG&A1,403
 3,584
 643
 5,630
 1,353
 $6,983
     Income tax expense2,000
 2,800
 600
 5,400
 —
 $5,400
Total$11,821
 $22,428
 $1,290
 $35,539
 $1,347
 $36,886




 Nine Months Ended September 30, 2017
 (Amounts in thousands)Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Restructuring Charges           
     COS$5,444
 $6,111
 $6,575
 $18,130
 $—
 $18,130
     SG&A637
 213
 (289) 561
 67
 628
     Income tax expense1,000
 —
 —
 1,000
 —
 1,000
 $7,081
 $6,324
 $6,286
 $19,691
 $67
 $19,758
Non-Restructuring Charges 
  
  
      
     COS$6,965
 $5,818
 $2,459
 $15,242
 $—
 $15,242
     SG&A7,311
 9,968
 3,957
 21,236
 3,772
 25,008
 $14,276
 $15,786
 $6,416
 $36,478
 $3,772
 $40,250
Total Realignment Charges           
     COS$12,409
 $11,929
 $9,034
 $33,372
 $—
 $33,372
     SG&A7,948
 10,181
 3,668
 21,797
 3,839
 25,636
     Income tax expense1,000
 —
 —
 1,000
 —
 1,000
Total$21,357
 $22,110
 $12,702
 $56,169
 $3,839
 $60,008


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 Nine Months Ended September 30, 2016
 (Amounts in thousands)Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Restructuring Charges           
     COS$10,566
 $17,709
 $3,083
 $31,358
 $—
 $31,358
     SG&A9,211
 5,717
 356
 15,284
 —
 15,284
     Income tax expense2,000
 2,800
 600
 5,400
 —
 5,400
 $21,777
 $26,226
 $4,039
 $52,042
 $—
 $52,042
Non-Restructuring Charges 
  
  
      
     COS$3,844
 $4,729
 $2,970
 $11,543
 $8
 $11,551
     SG&A1,989
 56
 2,212
 4,257
 2,644
 6,901
 $5,833
 $4,785
 $5,182
 $15,800
 $2,652
 $18,452
Total Realignment Charges           
     COS$14,410
 $22,438
 $6,053
 $42,901
 $8
 $42,909
     SG&A11,200
 5,773
 2,568
 19,541
 2,644
 22,185
     Income tax expense2,000
 2,800
 600
 5,400
 —
 5,400
Total$27,610
 $31,011
 $9,221
 $67,842
 $2,652
 $70,494


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)Engineered Product Division Industrial Product Division (1) Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Restructuring Charges           
     COS$40,155
 $46,759
 $20,564
 $107,478
 $—
 $107,478
     SG&A18,454
 15,811
 9,262
 43,527
 85
 43,612
     Income tax expense(2)10,400
 9,300
 1,800
 21,500
 —
 21,500
 $69,009
 $71,870
 $31,626
 $172,505
 $85
 $172,590
Non-Restructuring Charges 
  
  
      
     COS$23,125
 $20,000
 $14,392
 $57,517
 $8
 $57,525
     SG&A17,304
 18,177
 8,796
 44,277
 8,205
 52,482
 $40,429
 $38,177
 $23,188
 $101,794
 $8,213
 $110,007
Total Realignment Charges           
     COS$63,280
 $66,759
 $34,956
 $164,995
 $8
 $165,003
     SG&A35,758
 33,988
 18,058
 87,804
 8,290
 96,094
     Income tax expense(2)10,400
 9,300
 1,800
 21,500
 —
 21,500
Total$109,438
 $110,047
 $54,814
 $274,299
 $8,298
 $282,597
____________________________
(1) Includes $48.2 million of restructuring charges, primarily COS, related to the R1 Realignment Program.
(2) Income tax expense includes exit taxes as well as non-deductible costs.
Inception to Date
 (Amounts in thousands)FPDFCDSubtotal–Reportable Segments All OtherConsolidated Total
Realignment Charges
Restructuring Charges
     COS$7,376 $6,420 $13,796 $66 $13,862 
     SG&A751 9,777 10,528 — 10,528 
$8,127 $16,197 $24,324 $66 $24,390 
Non-Restructuring Charges   
     COS$8,465 $4,923 $13,388 $(565)$12,823 
     SG&A14,823 1,730 16,553 19,438 35,991 
$23,288 $6,653 $29,941 $18,873 $48,814 
Total Realignment Charges
     COS$15,841 $11,343 $27,184 $(499)$26,685 
     SG&A15,574 11,507 27,081 19,438 46,519 
Total$31,415 $22,850 $54,265 $18,939 $73,204 
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.

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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 theour restructuring activities related to our 2023 Realignment Programs:
Three Months Ended March 31, 2024
 (Amounts in thousands)SeveranceContract TerminationAsset Write-Downs (Gains)OtherTotal
     COS$3,985 $— $— $444 $4,429 
     SG&A701 — — — 701 
Total$4,686 $— $— $444 $5,130 
Three Months Ended September 30, 2017
Three Months Ended March 31, 2023Three Months Ended March 31, 2023
(Amounts in thousands)Severance Contract Termination Asset Write-Downs Other Total (Amounts in thousands)SeveranceContract TerminationAsset Write-Downs (Gains)OtherTotal
COS$9,197
 $—
 $59
 $1,411
 $10,667
SG&A440
 —
 52
 723
 1,215
Income tax expense—
 —
 —
 1,000
 1,000
Total$9,637
 $—
 $111
 $3,134
 $12,882
Total
Total


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 Three Months Ended September 30, 2016
 (Amounts in thousands)Severance Contract Termination Asset Write-Downs Other Total
     COS$19,674
 $—
 $1,309
 $1,123
 $22,106
     SG&A2,948
 —
 66
 1,295
 4,309
     Income tax expense—
 —
 —
 5,400
 5,400
Total$22,622
 $—
 $1,375
 $7,818
 $31,815

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 Nine Months Ended September 30, 2017
 (Amounts in thousands)Severance Contract Termination Asset Write-Downs Other Total
     COS$4,978
 $226
 $5,210
 $7,716
 $18,130
     SG&A(1,377) —
 242
 1,763
 628
     Income tax expense—
 —
 —
 1,000
 1,000
Total$3,601
 $226
 $5,452
 $10,479
 $19,758

 Nine Months Ended September 30, 2016
 (Amounts in thousands)Severance Contract Termination Asset Write-Downs Other Total
     COS$22,975
 $—
 $3,853
 $4,530
 $31,358
     SG&A5,036
 —
 103
 10,145
 15,284
     Income tax expense—
 —
 —
 5,400
 5,400
Total$28,011
 $—
 $3,956
 $20,075
 $52,042

The following is a summary of total inception to date restructuring charges, net of adjustments, related to theour 2023 Realignment Programs:
 Inception to Date
 (Amounts in thousands)Severance Contract Termination Asset Write-Downs Other Total (1)
     COS(1)$76,922
 $834
 $14,127
 $15,595
 $107,478
     SG&A29,390
 43
 1,671
 12,508
 43,612
     Income tax expense(2)—
 —
 —
 21,500
 21,500
Total$106,312
 $877
 $15,798
 $49,603
 $172,590

(1) Includes $48.2 million of restructuring charges, primarily COS, related to the R1 Realignment Program.
(2) Income tax expense includes exit taxes as well as non-deductible costs.

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Inception to Date
 (Amounts in thousands)SeveranceContract TerminationAsset Write-Downs (Gains)OtherTotal
     COS$11,070 $301 $794 $1,697 $13,862 
     SG&A1,651 — 8,871 6 10,528 
Total$12,721 $301 $9,665 $1,703 $24,390 
The following represents the activity, primarily severance charges from reductions in force, related to the restructuring reservereserves for the Realignment Programs for the ninethree months ended September 30, 2017March 31, 2024 and 2016:2023:
(Amounts in thousands)20242023
Balance at January 1,$8,184 $965 
Charges, net of adjustments5,130 362 
Cash expenditures(387)(234)
Other non-cash adjustments, including currency(849)(55)
Balance at March 31,$12,078 $1,038 

 2017 2016
(Amounts in thousands)R1 Realignment Program R2 Realignment Program Total R1 Realignment Program R2 Realignment Program Total
Balance at December 31$12,594
 $47,733
 $60,327
 $25,156
 $33,147
 $58,303
Charges, net of adjustments(3,425) 16,501
 13,076
 7,919
 28,316
 36,235
Cash expenditures(10,542) (15,946) (26,488) (5,131) (22,886) (28,017)
Other non-cash adjustments, including currency3,378
 (7,940) (4,562) (7,695) (864) (8,559)
Balance at September 30$2,005
 $40,348
 $42,353
 $20,249
 $37,713
 $57,962
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and notes thereto, and the other financial data included elsewhere in this Quarterly Report. The following discussion should also be read in conjunction with our audited consolidated financial statements, and notes thereto, and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A") included in our 20162023 Annual Report.
EXECUTIVE OVERVIEW
Our Company
We believe that we are a world-leading manufacturer and aftermarket service provider of comprehensive flow control systems. We develop and manufacture precision-engineered flow control equipment integral to the movement, control and protection of the flow of materials in our customers’ critical processes. Our product portfolio of pumps, valves, seals, automation and aftermarket services supports global infrastructure industries, including oil and gas, chemical, power generation and water management, as well as general industrial markets where our products and services add value.enable customers to achieve their goals. Through our manufacturing platform and global network of Quick Response Centers ("QRCs"), we offer a broad array of aftermarket equipment services, such as installation, advanced diagnostics repair and retrofitting. turnkey maintenance programs. We currently employhave approximately 17,00016,000 employees inglobally and a footprint of manufacturing facilities and QRCs in more than 50 countries.
Our business model is significantly influenced by the capital and operating spending of global infrastructure industries for the placement of new products into service and maintenance spending for aftermarket services for existing operations. The worldwide installed base of our products is an important source of aftermarket revenue, where products are expectedintended to ensure the maximummaximize operating time of many key industrial processes. Over the past several years, we have significantly investedWe continue to invest in our aftermarket strategy to provide local support to drive customer investments in our offerings and use of our services to replace or repair installed products. The aftermarket portion of our business also helps provide business stability during various economic periods. The aftermarket business, which is primarily served by our network of 177156 QRCs (some of which are shared by our two business segments) located around the globe provides a variety of service offerings for our customers including spare parts, service solutions, product life cycle solutions and other value-added services. It is generally a higher margin business compared to our original equipment business and a key component of our profitable growth strategy.
Our operations are conducted through threetwo business segments that are referenced throughout this MD&A:
EPD for long lead-time,•FPD designs and manufactures custom, and other highly-engineeredhighly engineered pumps, andpre-configured industrial pumps, pump systems, mechanical seals, auxiliary systems and replacement parts and related services; and
IPD for engineered
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•FCD designs, manufactures and pre-configured industrial pumpsdistributes a broad portfolio of engineered-to-order and pump systems and related products and services; and
FCD for engineered and industrialconfigured-to-order isolation valves, control valves, actuators and controlsvalve automation products and related services.equipment.
Our business segments share a focus on industrial flow control technology and have a high number of common customers. These segments also have complementary product offerings and technologies that are often combined in applications that provide us a net competitive advantage. Our segments also benefit from our global footprint, and our economies of scale in reducing administrative and overhead costs to serve customers more cost effectively. For example,effectively and our segments shareshared leadership for operational support functions, such as research and development marketing and supply chain.

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The reputation of our product portfolio is built on more than 50 well-respected brand names such as Worthington, IDP, SIHI, INNOMAG, Valtek, Limitorque, Durco, Edward, Anchor/Darling, SIHI, HalbergArgus and Durametallic, which we believe to be one of the most comprehensive in the industry. Our products and services are sold either directly or through designated channels to moremore than 10,000companies, including some of the world’s leading engineering, procurement and construction ("EPC") firms, original equipment manufacturers, distributors and end users.
We continue to leverage our QRC network to be positioned as near to customers as possible for service and support in order to capture valuable aftermarket business. Along with ensuringseeking to ensure that we have the local capability to sell, install and service our equipment in remote regions, it is equally imperativewe seek to continuously improve our global operations. We continuecontinuously strive to expandenhance our global supply chain capability to increase our ability to meet global customer demands and ensureimprove the quality and timely delivery of our products.products over the long-term. Additionally, we continue to devote resources to improving the supply chain processes across our business segments to find areas of synergy and cost reduction and to improve our supply chain management capability to ensure it can meet global customer demands. We also remain focused on improving on-time delivery and quality, while managing warranty costs as a percentage of sales across our global operations, through the assistance of a focused Continuous Improvement Process ("CIP") initiative.our operational excellence program. The goal of the CIP initiative,program, which includes lean manufacturing, six sigma business management strategy and value engineering, is to maximize service fulfillment to customers through on-time delivery, reduced cycle time and quality at the highest internal productivity.
DuringThroughout the first nine monthsCOVID-19 pandemic we engaged in a number of 2017,cost savings measures in order to help mitigate the adverse effects of the pandemic on our financial results, continued to be challenged by capital spending declines, primarily inincluding certain realignment activities. In the oilfirst quarter of 2023, we identified and gas industry and pricing pressures. Although there has been stability in oil prices over recent quarters, we anticipate that the current environment will persist throughout 2017.
To better align costs and improve long-term efficiency, we initiated Realignment Programs to accelerate both short- and long-term strategic plans, including targeted manufacturing optimization throughcertain realignment activities concurrent with the consolidation of facilities, SG&A efficiencyour FPD aftermarket and pump operations into a single operating model. This consolidated operating model was 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. 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 are continuing into 2024.
2024 Outlook
As our operations have generally stabilized from the COVID-19 pandemic, we have seen growth from our supportive served end-markets and our focus on our strategic plan that takes a balanced approach to integrating both short-term and long-term initiatives transfer of activities from high-cost regionsand aims to lower-cost facilitiesaccelerate growth through three key areas: diversification, decarbonization, and digitization, the "3D Strategy." Our sales volume is expected to deliver sustainable and healthy growth, while our 2023 Realignment Programs and the divestiturenew operating model have unlocked gains in organizational efficiency. With our strong backlog and supportive market environment, we expect to continue revenue growth in 2024.
The strong U.S. dollar has made and may continue to make our products more expensive overseas and has resulted in challenges to meeting our international customers' pricing expectations in certain cases. We will continue to be proactive in our efforts to stay competitive in our prices and market share.
As of certain non-strategic assets. At the completionMarch 31, 2024, we have cash and cash equivalents of $532.0 million and $672.2 million of borrowings available under our Senior Credit Facility. We do not currently anticipate, nor are we aware of, any significant market conditions or commitments that would change any of our conclusions of the programs, we expect an approximately 20% reduction in our global workforce, relativesufficient liquidity available to early 2015 workforce levels. With an expected near-term investment of approximately $360 million, including projects in process or under final evaluation, weus. We expect the results of our Realignment Programsliquidity discussed above coupled with the costs savings measures planned and already in place will deliver annualized run-rate savings of approximately $230 million. In addition, we are focusing on our ongoing low-cost sourcing, including greater use of third-party suppliersfurther enable us to maintain adequate liquidity over the short-term (next 12 months) and increasing our lower-cost, emerging market capabilities.long-term (beyond the next 12 months). We will continue to actively monitor the credit markets in order to maintain sufficient liquidity and access to capital.

RESULTS OF OPERATIONS — Three and nine months ended September 30, 2017March 31, 2024 and 20162023
Throughout this discussion of our results of operations, we discuss the impact of fluctuations in foreign currency exchange rates. We have calculated currency effects on operations by translating current year results on a monthly basis at prior year exchange rates for the same periods.
As previously disclosed in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, we identified accounting errors focused mainly at two of our non-U.S. sites in the inventory, accounts receivable, cost of sales and selling, general and administrative balances for prior periods through the first quarter of 2017. We assessed these errors, individually and in the aggregate, and concluded that they were not material to any prior annual or interim period. However, to facilitate comparisons among periods we revised our previously issued audited consolidated financial information which is included in our 2016 Annual Report and unaudited condensed consolidated financial information for the interim periods included in our Form 10-Q/A and Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017, respectively. We also corrected the timing of immaterial previously recorded out-of-period adjustments and reflected them in the revised prior period financial statements, where applicable. Refer to Note 2 to our condensed consolidated financial statements included in this Quarterly Report for more information.
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As discussed in Note 3 to our condensed consolidated financial statements included in this Quarterly Report, effective July 6, 2017, we sold our Flow Control Division's ("FCD") Vogt product line and related assets and liabilities to a privately held company. In 2016, net sales related to the Vogt business totaled approximately $17 million, with earnings before interest and taxes of approximately $4 million.
As discussed in Note 3 to our condensed consolidated financial statements included in this Quarterly Report, effective May 2, 2017 we sold our FCD Gestra AG business to a leading provider of steam system solutions. In 2016, Gestra recorded revenues of approximately $101 million (€92 million) with earnings before interest and taxes of approximately $17 million (€15 million).
In 2015, we initiated Realignment Programs that consist of both restructuring and non-restructuring charges that are further discussed in Note 16 to our condensed consolidated financial statements included in this Quarterly Report. The Realignment Programs will continue throughout 2017 and the total charges for Realignment Programs by segment are detailed below for the three months ended September 30, 2017 and 2016:

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 Three Months Ended September 30, 2017
 (Amounts in thousands)Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Total Realignment Program Charges           
     COS$7,045
 $2,021
 $5,154
 $14,220
 $—
 $14,220
     SG&A718
 (379) 1,022
 1,361
 1,210
 2,571
     Income tax expense1,000
 —
 —
 1,000
 —
 1,000
Total$8,763
 $1,642
 $6,176
 $16,581
 $1,210
 $17,791
 Three Months Ended September 30, 2016
 (Amounts in thousands)Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Total Realignment Program Charges           
     COS$8,418
 $16,044
 $47
 $24,509
 $(6) $24,503
     SG&A1,403
 3,584
 643
 5,630
 1,353
 6,983
     Income tax expense2,000
 2,800
 600
 5,400
 —
 5,400
Total$11,821
 $22,428
 $1,290
 $35,539
 $1,347
 $36,886
The total charges foractivities of the 2023 Realignment Programs by segmentwere identified and implemented in phases throughout 2023 and are detailed below for the nine months ended September 30, 2017 and 2016:
 Nine Months Ended September 30, 2017

(Amounts in thousands)
Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Total Realignment Program Charges           
     COS$12,409
 $11,929
 $9,034
 $33,372
 $—
 $33,372
     SG&A7,948
 10,181
 3,668
 21,797
 3,839
 25,636
     Income tax expense1,000
 —
 —
 1,000
 —
 1,000
Total$21,357
 $22,110
 $12,702
 $56,169
 $3,839
 $60,008
 Nine Months Ended September 30, 2016
 (Amounts in thousands)Engineered Product Division Industrial Product Division Flow Control Division Subtotal–Reportable Segments Eliminations and All Other Consolidated Total
Total Realignment Program Charges           
     COS$14,410
 $22,438
 $6,053
 $42,901
 $8
 $42,909
     SG&A11,200
 5,773
 2,568
 19,541
 2,644
 22,185
     Income tax expense2,000
 2,800
 600
 5,400
 —
 5,400
Total$27,610
 $31,011
 $9,221
 $67,842
 $2,652
 $70,494
continuing into 2024. We currently anticipate a total investment in theserealignment activities that have been evaluated and initiated of approximately $100 million of which $18 million is estimated to be non-cash. Based on the activities of the 2023 Realignment Programs of approximately $360 million, including projects in process or under final evaluation. Since inception of the Realignment Programs in 2015, we have incurred charges of $282.6 million and we expectinitiated to incur the remaining charges throughout the remainder of 2017 and into 2018.

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Based on actions under our Realignment Programs,date, we estimate that we have achievedrecognized cost savings of approximately $150$45 million for the nine months ended September 30, 2017, as compared with $80 million in the same period of 2016. Approximately $95 million of those savings are in COS with the remainder in SG&A.through March 31, 2024. Upon completion of the activities of the 2023 Realignment Programs that have been identified and initiated to date, we expect run-rateto achieve annualized cost savings in excess of approximately $230$100 million of which approximately $214 million would be achieved in 2017.. Actual savings could vary from expected savings, which represent management’smanagement's best estimate to date.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 or estimated savings.
Realignment Activity
The following tables present our realignment activity by segment related to our 2023 Realignment Programs.

Three Months Ended March 31, 2024
(Amounts in thousands)FPDFCDSubtotal–Reportable SegmentsEliminations and All OtherConsolidated Total
Total Realignment Charges
COS$5,044 $767 $5,811 $(138)$5,673 
SG&A1,041 114 1,155 339 1,494 
Total$6,085 $881 $6,966 $201 $7,167 

Three Months Ended March 31, 2023
 (Amounts in thousands)FPDFCDSubtotal–Reportable SegmentsEliminations and All OtherConsolidated Total
Total Realignment Charges
     COS$390 $11 $401 $(199)$202 
     SG&A2,050 $8,906 10,956 5,721 16,677 
Total$2,440 $8,917 $11,357 $5,522 $16,879 
Consolidated Results
Bookings, Sales and Backlog
 Three Months Ended March 31,
(Amounts in millions)20242023
Bookings$1,038.3 $1,057.2 
Sales1,087.5 980.3 
 Three Months Ended September 30,
(Amounts in millions)2017 2016
Bookings$892.9
 $959.5
Sales883.4
 945.9
 Nine Months Ended September 30,
(Amounts in millions)2017 2016
Bookings$2,820.1
 $2,855.0
Sales2,626.8
 2,919.6

We define a booking as the receipt of a customer order that contractually engages us to perform activities on behalf of our customer with regard to manufacturing, service or support. Bookings recorded and subsequently canceled within the year-to-date period are excluded from year-to-date bookings. Bookings for the three months ended September 30, 2017March 31, 2024 decreased by $66.6$18.9 million, or 6.9%1.8%, as compared with the same period in 2016. The decrease included currency benefits of approximately $16 million. The decrease was driven by decreases in the oil and gas, chemical, general and power generation industries. The decrease was due to original equipment bookings.
Bookings for the nine months ended September 30, 2017 decreased by $34.9 million, or 1.2%, as compared with the same period in 2016 and included an order for approximately $80 million to provide pumps and related equipment for the Hengli Integrated Refining Complex Project in China.2023. The decrease included negative currency effects of approximately $7less than one million. The decrease was primarilydecreased bookings were driven by the general, power generation and chemical industries, partially offset by an increasedecreased customer orders in the oil and gas, industry.chemical and water management industries, partially offset by power generation and general industries. The decrease in customer bookings was more heavily weighted towards customerdriven by original equipment bookings.
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Sales for the three months ended September 30, 2017 decreasedMarch 31, 2024 increased by $62.5$107.2 million, or 6.6%10.9%, asas compared with the same period in 2016. 2023. The decreaseincrease included currency benefits of approximately $15$3 million. The decrease was due to decreasedincreased sales were driven by both aftermarket and original equipment customer sales, with decreasedincreased customer sales into every region except for theNorth America, Europe, Latin America, Asia Pacific, Africa and Middle East. Net sales toto international customers, including export sales from the U.S.,United States, were approximately 66% and 62%approximately 64% and 63% of total sales for the three months ended September 30, 2017March 31, 2024 and 2016,2023, respectively.
Sales for the nine months ended September 30, 2017 decreased by $292.8 million, or 10.0%,Aftermarket sales represented approximately 51% of total sales, as compared with the same period in 2016. The decrease included negative currency effects of approximately $5 million. The decrease was primarily due to decreased original equipment sales with decreased sales into every region. Net sales to international customers, including export sales from the U.S., were approximately 64% and 63%53% of total sales for the nine months ended September 30, 2017 and 2016.same period in 2023.
BacklogBacklog represents the aggregate value of booked but uncompleted customer orders and is influenced primarily by bookings, sales, cancellationscancellations and currency effects. Backlog of $2,135.2$2,612.5 million at September 30, 2017 increasedMarch 31, 2024 decreased by $237.5$82.6 million, or 12.5%3.1%, as compared with December 31, 2016. 2023. Currency effects provided an increasea decrease of approximately $106 million. Approximately 31%$26 million (currency effects on backlog are calculated using the change in period end exchange rates). Approximately 38% of the backlog at September 30, 2017March 31, 2024 and 37% of the backlog at December 31, 2023 was related to aftermarket orders.

Backlog includes our unsatisfied (or partially unsatisfied) performance obligations related to contracts having an original expected duration in excess of one year of approximately $637 million, as discussed in Note 2 to our condensed consolidated financial statements included in this Quarterly Report. 
Gross Profit and Gross Profit Margin
 Three Months Ended March 31,
(Amounts in millions, except percentages)20242023
Gross profit$339.0 $296.8 
Gross profit margin31.2 %30.3 %
 Three Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
Gross profit$267.5
 $278.0
Gross profit margin30.3% 29.4%

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 Nine Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
Gross profit$781.0
 $903.8
Gross profit margin29.7% 31.0%

Gross profit for the three months ended September 30, 2017 decreasedMarch 31, 2024 increased by $10.5$42.2 million, or 3.8%14.2%, as compared with the same period in 2016.2023. Gross profit margin for the three months ended September 30, 2017March 31, 2024 of 30.3%31.2% increased from 29.4%30.3% for the same period in 2016.2023. The increase in gross profit margin was primarily attributeddue to a $6.3 million charge to write down inventory in Brazil in the third quarterfavorable impact of 2016 that did not recur, lower chargespreviously implemented sales price increases and increased savings related to our Realignment Programs and a mix shift to higher margin aftermarket sales volume, partially offset by the negative impact of decreased sales on our absorption of fixed manufacturing costs, increased accruedhigher broad-based annual incentive compensation and lower margin projects that shipped from backlog. Aftermarket sales increased charges of $5.5 million related to approximately 50% of total sales,our 2023 Realignment Programs as compared with approximately 44% of total sales forto the same period in 2016.2023.
Gross profitSelling, General and Administrative Expense
 Three Months Ended March 31,
(Amounts in millions, except percentages)20242023
SG&A$228.4 $244.3 
SG&A as a percentage of sales21.0 %24.9 %
SG&A for the ninethree months ended September 30, 2017March 31, 2024 decreased by $122.8$15.9 million, or 13.6%6.5%, as compared with the same period in 2016. Gross profit margin for the nine months ended September 30, 20172023. Currency effects yielded an increase of 29.7%approximately $1 million. SG&A decreased from 31.0% for the same period in 2016. The decrease in gross profit margin was primarily attributeddue to decreased charges of $15.2 million related to our 2023 Realignment Programs, $3.1 million of expense related to the negative impactterminated Velan acquisition incurred in the first quarter of decreased sales on our absorption of fixed manufacturing costs, lower margin projects that shipped from backlog and a $16.9 million charge for costs incurred related to a contract to supply oil and gas platform equipment to an end user in Latin America, partially offset by $10.9 million of charges to write down inventory in Brazil in 20162023 that did not recur, a mix shift to higher margin aftermarket sales$2.9 million write-down of an impaired licensing intangible in the first quarter of 2023 that did not recur, and lower charges and increased savingsa reversal of previously recognized expenses of $2.0 million related to our Realignment Programs compared to the same periodfinancial exposure in 2016. Aftermarket sales increased to approximately 49%Russia, partially offset by an increase in research and development costs of total sales, as compared with approximately 44%$4.9 million and an increase in bad debt expense of total sales for the same period in 2016.


Selling, General and Administrative Expense
 Three Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
SG&A$206.3
 $281.3
SG&A as a percentage of sales23.4% 29.7%
 Nine Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
SG&A$681.2
 $747.5
SG&A as a percentage of sales25.9% 25.6%

SG&A for the three months ended September 30, 2017 decreased by $75.0$2.4 million or 26.7%, as compared with the same period in 2016. Currency effects yielded an increase of approximately $3 million.2023. SG&A as a percentage of sales for the three months ended September 30, 2017March 31, 2024 decreased 630390 basis points as compared with the same period in 2016primarily due to the $73.5 million reserve established for our primary Venezuelan customer in the third quarter of 2016 that did not recur and increased savings related to our Realignment Programs compared to the same period in 2016, partially offset by increased accrued broad-based annual incentive compensation and lower sales leverage.
SG&A for the nine months ended September 30, 2017 decreased by $66.3 million, or 8.9%, as compared with the same period in 2016. Currency effects yielded a decrease of approximately $1 million. SG&A as a percentage of sales for the nine months ended September 30, 2017 increased 30 basis points as compared with the same period in 2016 due to a $26.0 million impairment charge related to our manufacturing facility in Brazil and lower sales leverage substantially offset by the $73.5 million reserve established for our primary Venezuelan customer in the third quarter of 2016 that did not recur and increased savings related to our Realignment Programs compared to the same period in 2016.


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cost decreases.
Net Earnings from Affiliates
 Three Months Ended March 31,
(Amounts in millions)20242023
Net earnings from affiliates$2.5 $4.6 
 Three Months Ended September 30,
(Amounts in millions)2017 2016
Net earnings from affiliates$2.9
 $3.4
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 Nine Months Ended September 30,
(Amounts in millions)2017 2016
Net earnings from affiliates$9.0
 $8.5
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Net earnings from affiliates for the three months ended September 30, 2017March 31, 2024 decreased $0.5by $2.1 million, or 14.7%45.7%, as compared with the same period in 2016.2023. The decrease in net earnings was primarily a result of decreased earnings of our FPD joint ventures in Chile and South Korea.
Net earnings from affiliatesOperating Income and Operating Margin
 Three Months Ended March 31,
(Amounts in millions, except percentages)20242023
Operating income$113.1 $57.2 
Operating income as a percentage of sales10.4 %5.8 %
Operating income for the ninethree months ended September 30, 2017March 31, 2024 increased $0.5by $55.9 million, or 5.9%97.7%, as compared with the same period in 2016.

Operating Income and Operating Margin
 Three Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
Operating income$74.0
 $0.1
Operating income as a percentage of sales8.4% —%
 Nine Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
Operating income$250.0
 $164.8
Operating income as a percentage of sales9.5% 5.6%

Operating income for the three months ended September 30, 2017 increased by $73.9 million as compared with the same period in 2016.2023. The increase included negative currency benefitseffects of approximately $1 million. The increase was primarily a result of the $75.0$42.2 million increase in gross profit combined with the $15.9 million decrease in SG&A&A.

Interest Expense and the $10.9 million pre-tax gain on the sale of the Vogt business, partially offset by the $10.5 million decrease in gross profit.Interest Income
Operating income
 Three Months Ended March 31,
(Amounts in millions)20242023
Interest expense$(15.3)$(16.2)
Interest income1.2 1.5 
Interest expense for the ninethree months ended September 30, 2017 increased by $85.2March 31, 2024 decreased $0.9 million, or 51.7%, as compared with the same period in 2016. The increase included negative currency effects of approximately $6 million. The increase was2023, primarily a result of a $141.2 million pre-tax gain from the sale of the Gestra and Vogt businesses and the $66.3 million decrease in SG&A,due to lower outstanding debt, partially offset by the $122.8 million decrease in gross profit.
Interest Expense and Interest Income
 Three Months Ended September 30,
(Amounts in millions)2017 2016
Interest expense$(15.0) $(15.1)
Interest income1.1
 0.9
 Nine Months Ended September 30,
(Amounts in millions)2017 2016
Interest expense$(44.7) $(45.0)
Interest income2.4
 2.2

Interest expense for the three and nine months ended September 30, 2017 decreased $0.1 million and $0.3 million, respectivelyhigher effective interest rates as compared with the same periodsperiod in 2016. The decreases for the three and nine month periods were primarily attributable to decreased commitments and borrowings under Revolving Credit Facility in 2017, as compared to the same periods in 2016.


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2023.
Other Income (Expense), Net
 Three Months Ended March 31,
(Amounts in millions)20242023
Other income (expense), net$(0.9)$(8.0)
 Three Months Ended September 30,
(Amounts in millions)2017 2016
Other income, net$8.3
 $1.9
 Nine Months Ended September 30,
(Amounts in millions)2017 2016
Other (expense) income, net$(11.6) $1.1

Other income,expense, net for the three months ended September 30, 2017 increased $6.4March 31, 2024 decreased $7.1 million as compared with the same period in 2023, due primarily to a $1.3$1.5 million decrease in losses from transactions in currencies other than our sites' functional currencies and $7.3 million increase in gains arising from transactions on foreign exchange forward contracts, andpartially offset by a $5.8$0.8 million increase in gains from transactions in currencies other than our sites' functional currencies.pension related costs. The net change was primarily due to the foreign currency exchange rate movements in the Euro, Hungarian forint, Mexican peso, British pound and Brazilian real in relation to the U.S. dollarUnited Arab Emirates dirhams during the three months ended September 30, 2017,March 31, 2024, as compared with the same period in 2016.2023.
Other expense, net for the nine months ended September 30, 2017 increased $12.7 million from an income of $1.1 million in 2016, due primarily to a $6.8 million increase in losses from transactions in currencies other than our sites' functional currencies and a $5.4 million increase in losses arising from transactions on foreign exchange contracts. The net change was primarily due to the foreign currency exchange rate movements in the Mexican peso, Brazilian real, Euro and British pound in relation to the U.S. dollar during the nine months ended September 30, 2017, as compared with the same period in 2016.

Tax ExpenseIncome Taxes and Tax Rate
 Three Months Ended March 31,
(Amounts in millions, except percentages)20242023
Provision for (benefit from) income taxes$20.1 $4.5 
Effective tax rate20.5 %12.9 %
 Three Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
Provision for income taxes$19.6
 $2.8
Effective tax rate28.7% (23.2)%
 Nine Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
Provision for income taxes$85.8
 $49.5
Effective tax rate43.8% 40.2%

The effective tax rate of 28.7%20.5% for the three months ended September 30, 2017March 31, 2024 increased from (23.2)%12.9% for the same period in 2016.2023. The effective tax rate varied from the U.S. federal statutory rate for the three months ended September 30, 2017March 31, 2024 primarily due to the net impact of foreign operations lossesand state income taxes. Refer to Note 13 to our condensed consolidated financial statements included in certain foreign jurisdictionsthis Quarterly Report for which no tax benefit was provided and taxes related to the salefurther discussion.
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The effective tax rate of 43.8% for the nine months ended September 30, 2017 increased from 40.2% for the same period in 2016. The effective tax rate varied from the U.S. federal statutory rate for the nine months ended September 30, 2017 primarily due to the net impact of foreign operations, losses in certain foreign jurisdictions for which no tax benefit was provided and taxes related to the sale of the Gestra and Vogt businesses.

Other Comprehensive Income (Loss)
 Three Months Ended March 31,
(Amounts in millions)20242023
Other comprehensive income (loss)$(26.9)$13.1 
 Three Months Ended September 30,
(Amounts in millions)2017 2016
Other comprehensive income (loss)$17.2
 $(11.3)
 Nine Months Ended September 30,
(Amounts in millions)2017 2016
Other comprehensive income (loss)$84.8
 $(1.2)


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Other comprehensive income (loss) for the three months ended September 30, 2017 increased $28.6March 31, 2024 decreased by $40.0 million from a lossincome of $11.3$13.1 million in 2016. The increased income was primarilythe same period in 2023. The loss was due to foreign currency translation adjustments resulting primarily from exchange rate movements ofof the Euro, British pound, Chinese yuan, Singapore dollar and ArgentineMexican peso versus the U.S. dollar duringduring the three months ended September 30, 2017,March 31, 2024, as compared with the same period in 2016.
Other comprehensive income for the nine months ended September 30, 2017 increased $85.9 million from a loss of $1.2 million in 2016. The increased income was primarily due to foreign currency translation adjustments resulting primarily from exchange rate movements of the Euro, British pound and Mexican peso versus the U.S. dollar during the nine months ended September 30, 2017, as compared with the same period in 2016.

2023.
Business Segments
We conduct our operations through threetwo business segments based on the type of product and how we manage the business. We evaluate segment performance and allocate resources based on each segment’s operating income. The key operating results for our threetwo business segments, EPD, IPDFPD and FCD, are discussed below.
Engineered ProductFlowserve Pumps Division Segment Results
Our largest business segment is EPD,FPD, through which we design, manufacture, distribute and service highly custom and other highly-engineeredengineered pumps, andpre-configured industrial pumps, pump systems, mechanical seals, and auxiliary systems and spare parts (collectively referred to as "original equipment"). EPD and related services. FPD includes longer lead-time, highly-engineeredhighly engineered pump products and shorter cycle engineered pumpswith longer lead times and mechanical seals, thatwhich are generally manufactured more quickly. EPDwithin shorter lead times. FPD also manufactures replacement parts and related equipment and provides a full array of replacement parts, repair and support services (collectively referred to as "aftermarket"). EPDaftermarket services. FPD primarily operates in the oil and gas, power generation, chemical, water management and general industries. EPDFPD operates in 4749 countries with 3036 manufacturing facilities worldwide, nine11 of which are located in Europe nineand the Middle East, 11 in North America, seveneight in Asia and fivesix in Latin America, and it operates 123131 QRCs, including those co-located in manufacturing facilities and/or shared with FCD.
 Three Months Ended March 31,
(Amounts in millions, except percentages)20242023
Bookings$703.5 $728.5 
Sales769.4 700.1 
Gross profit247.9 221.4 
Gross profit margin32.2 %31.6 %
SG&A139.7 147.0 
Segment operating income110.9 79.1 
Segment operating income as a percentage of sales14.4 %11.3 %
 Three Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
Bookings$432.5
 $497.5
Sales424.2
 458.5
Gross profit136.5
 140.2
Gross profit margin32.2% 30.6 %
Segment operating income (loss)51.8
 (22.0)
Segment operating income (loss) as a percentage of sales12.2% (4.8)%
 Nine Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
Bookings$1,357.2
 $1,387.5
Sales1,276.6
 1,444.2
Gross profit403.8
 459.5
Gross profit margin31.6% 31.8%
Segment operating income106.9
 97.4
Segment operating income as a percentage of sales8.4% 6.7%


Bookings for the three months ended September 30, 2017March 31, 2024 decreased by $65.0$25.0 million, or 13.1%3.4%, as compared with the same period in 2016.2023. The decrease included currency benefits of approximately $7$1 million. The decrease in customer bookings was primarily driven by decreased customer orders in the oil and gas, power generation and chemical industries, partially offset by increased customer orders in the general and chemicalwater management industries. Decreased customerCustomer bookings of $31.2decreased $25.3 million into Europe, $24.8Asia Pacific, $16.6 million into the Middle East, $23.1$9.6 million into Latin AmericaAfrica, and $16.6$0.6 million into North America, and were partially offset by increased customer bookingsorders of $29.9$14.2 million into Africa.Europe and $13.6 million into Latin America. The decrease was more heavily weighted towards customerdriven by original equipment bookings. Interdivision bookings (which are eliminated and are not included in consolidated bookings
Sales for the three months ended March 31, 2024 increased by $69.3 million, or 9.9% as disclosed above) were flat when compared towith the same period in 2016.2023 and included currency benefits of approximately $3 million. The increase was driven by both aftermarket and original equipment customer sales. Increased customer sales of $28.7 million into North America, $20.2 million into Europe, $18.7 million into the Middle East, $6.5 million into Latin America, and $3.4 million into Africa were partially offset by decreased sales of $7.0 million into Asia Pacific.
BookingsGross profit for the ninethree months ended September 30, 2017 decreasedMarch 31, 2024 increased by $30.3$26.5 million, or 2.2%12.0%, as compared with the same period in 2016 and included an order for approximately $80 million to provide pumps and related equipment for the Hengli Integrated Refining Complex Project in China. The decrease included negative currency effects of approximately $4 million. The decrease in customer bookings was primarily driven by the power generation and general industries, partially offset by an increase

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in the oil and gas and chemical industries. Decreased customer bookings of $62.0 million into Europe, $61.0 million into the Middle East, $32.5 million into North America and $26.0 million into Latin America, were partially offset by increased customer bookings of $89.3 million into Asia Pacific and $43.7 million into Africa. The decrease was driven by customer aftermarket bookings. Interdivision bookings (which are eliminated and are not included in consolidated bookings as disclosed above) increased $5.0 million.
Sales2023. Gross profit margin for the three months ended September 30, 2017March 31, 2024 of 32.2% increased from 31.6% for the same period in 2023. The increase in gross profit margin was primarily due to the favorable impact of previously implemented sales
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price increases and higher sales volume, partially offset by increased charges of $4.7 million related to our 2023 Realignment Programs and higher broad-based annual incentive compensation as compared to the same period in 2023.
SG&A for the three months ended March 31, 2024 decreased $34.3by $7.3 million, or 7.5%5.0%, as compared with the same period in 2016. The decrease included currency benefits2023. Currency effects provided an increase of approximately $5less than one million. The decrease in SG&A was driven by customer original equipment sales, resulting from decreased salesprimarily due to a reversal of $32.5previously recognized expenses of $2.0 million into North Americarelated to our financial exposure in Russia and $4.4a decrease of $1.0 million into Latin America,related to our 2023 Realignment Programs, partially offset by increased sales of $5.2a $4.0 million intoincrease in research and development costs and higher broad-based annual incentive compensation as compared to the Middle East. Interdivision sales (which are eliminated and are not includedsame period in consolidated sales as disclosed above) increased $1.1 million.2023.
SalesOperating income for the ninethree months ended September 30, 2017 decreased $167.6March 31, 2024 increased by $31.8 million, or 11.6%40.2%, as compared with the same period in 2016. The decrease included negative currency effects of approximately $5 million. The decrease was more heavily weighted towards customer original equipment sales, resulting from decreased sales of $108.3 million into North America, $37.5 million into Latin America, $14.8 million into Europe, $14.1 million into the Middle East and $11.5 million into Africa, partially offset by increased sales of $20.1 million into Asia Pacific. Interdivision sales (which are eliminated and are not included in consolidated sales as disclosed above) decreased $1.7 million.
Gross profit for the three months ended September 30, 2017 decreased by $3.7 million, or 2.6%, as compared with the same period in 2016. Gross profit margin for the three months ended September 30, 2017 of 32.2% increased from 30.6% for the same period in 2016. The increase in gross profit margin was primarily attributable to increased savings related to our Realignment Programs, a mix shift to higher margin aftermarket sales and a $6.3 million charge to write down inventory in Brazil in the third quarter of 2016 that did not recur, partially offset by the negative impact of decreased sales on our absorption of fixed manufacturing costs and lower margin projects that shipped from backlog.
Gross profit for the nine months ended September 30, 2017 decreased by $55.7 million, or 12.1%, as compared with the same period in 2016. Gross profit margin for the nine months ended September 30, 2017 of 31.6% decreased from 31.8% for the same period in 2016. The decrease in gross profit margin was primarily attributable to the negative impact of decreased sales on our absorption of fixed manufacturing costs and lower margin projects that shipped from backlog, substantially offset by increased savings related to our Realignment Programs, a mix shift to higher margin aftermarket sales and $10.9 million of charges to write down inventory in Brazil in 2016 that did not recur.
Operating income for the three months ended September 30, 2017 increased by $73.8 million, or 335.5%, as compared with the same period in 2016. The increase included currency benefits of approximately $1 million. The increase was due to a $77.9 million decrease in SG&A (including a increase due to currency effects of approximately $1 million), partially offset by the $3.7 million decrease in gross profit. The decrease in SG&A is primarily due to EPD's $71.2 million portion of the $73.5 million reserve established for our primary Venezuelan customer in the third quarter of 2016 that did not recur.
Operating income for the nine months ended September 30, 2017 increased by $9.5 million, or 9.8%, as compared with the same period in 2016. The increase included negative currency effects of approximately $2 million. The increase was due to a $64.5 million decrease in SG&A (including a decrease due to currency effects of approximately $1 million), partially offset by the $55.7 million decrease in gross profit. The decrease in SG&A is primarily due to EPD's $71.2 million portion of the $73.5 million reserve established for our primary Venezuelan customer in the third quarter of 2016 that did not recur and decreased charges and increased savings related to our Realignment Programs, partially offset by a $26.0 million impairment charge in the second quarter of 2017 related to our manufacturing facility in Brazil.
Backlog of $1,079.7 million at September 30, 2017 increased by $112.9 million, or 11.7%, as compared with December 31, 2016. Currency effects provided an increase of approximately $54 million. Backlog at September 30, 2017 and December 31, 2016 included $19.7 million and $11.7 million, respectively, of interdivision backlog (which is eliminated and not included in consolidated backlog as disclosed above).
Industrial Product Division Segment Results
Through IPD, we design, manufacture, distribute and service engineered, pre-configured industrial pumps and pump systems, including submersible motors (collectively referred to as "original equipment"). Additionally, IPD manufactures replacement parts and related equipment, and provides a full array of support services (collectively referred to as "aftermarket"). IPD primarily operates in the oil and gas, chemical, power generation and general industries. IPD operates 17 manufacturing facilities, five of which are located in the U.S, eight in Europe and four in Asia and it operates 30 QRCs worldwide, including 19 sites in Europe, six in the U.S., three in Asia and two in Latin America, including those co-located in manufacturing facilities.

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 Three Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
Bookings$196.9
 $189.6
Sales189.7
 203.3
Gross profit39.3
 30.5
Gross profit margin20.7 % 15.0 %
Segment operating loss(3.6) (17.1)
Segment operating loss as a percentage of sales(1.9)% (8.4)%
 Nine Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
Bookings$616.6
 $609.5
Sales559.9
 615.8
Gross profit98.1
 128.5
Gross profit margin17.5 % 20.9 %
Segment operating loss(46.0) (10.4)
Segment operating loss as a percentage of sales(8.2)% (1.7)%

Bookings for the three months ended September 30, 2017 increased by $7.3 million, or 3.9%, as compared with the same period in 2016. The increase included currency benefits of approximately $4 million. The increase in customer bookings was primarily driven by the oil and gas and water industries, partially offset by a decrease in the general industries. Increased customer bookings of $8.9 million into Africa and $1.4 million into Latin America were partially offset by decreased customer bookings of $3.3 million into the Middle East and $1.1 million into Asia Pacific. The increase was more heavily weighted towards customer original equipment bookings. Interdivision bookings (which are eliminated and are not included in consolidated bookings as disclosed above) increased $1.5 million.
Bookings for the nine months ended September 30, 2017 increased by $7.1 million, or 1.2%, as compared with the same period in 2016 and included negative currency effects of approximately $1 million. Customer bookings increases in the oil and gas and general industries were partially offset by decreases in the chemical and water industries. Increased customer bookings of $13.4 million into Europe, $7.6 million into Africa and $4.6 million into Latin America were partially offset by decreased customer bookings of $21.7 million into the Middle East and $4.9 million into Asia Pacific. The increase was due to customer original equipment bookings. Interdivision bookings (which are eliminated and are not included in consolidated bookings as disclosed above) increased $3.3 million.
Sales for the three months ended September 30, 2017 decreased $13.6 million, or 6.7%, as compared with the same period in 2016. The decrease included currency benefits of approximately $4 million and was driven by decreased customer original equipment sales. The decrease resulted from decreased sales of $13.0 million into Asia Pacific, $8.7 million into North America and $4.3 million into Africa, partially offset by increased sales of $5.9 million into Europe. Interdivision sales (which are eliminated and are not included in consolidated sales as disclosed above) increased $2.3 million when compared to the same period in 2016.
Sales for the nine months ended September 30, 2017 decreased $55.9 million, or 9.1%, as compared with the same period in 2016. The decrease included negative currency effects of approximately $1 million and was driven by decreased customer original equipment sales. The decrease resulted from decreased sales of $30.5 million into North America, $22.0 million into Asia Pacific and $7.3 million into Africa, partially offset by increased sales of $2.6 million into the Middle East. Interdivision sales (which are eliminated and are not included in consolidated sales as disclosed above) increased $1.9 million when compared to the same period in 2016.
Gross profit for the three months ended September 30, 2017 increased by $8.8 million, or 28.9%, as compared with the same period in 2016. Gross profit margin for the three months ended September 30, 2017 of 20.7% increased from 15.0% for the same period in 2016. The increase in gross profit margin was primarily attributable to lower charges and increased savings related to our Realignment Programs, partially offset by the negative impact of decreased sales on our absorption of fixed manufacturing costs.
Gross profit for the nine months ended September 30, 2017 decreased by $30.4 million, or 23.7%, as compared with the same period in 2016. Gross profit margin for the nine months ended September 30, 2017 of 17.5% decreased from 20.9% for the same period in 2016. The decrease in gross profit margin was primarily attributable to a $16.9 million charge in the second quarter of 2017 for costs incurred related to a contract to supply oil and gas platform equipment to an end user in Latin America and the

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negative impact of decreased sales on our absorption of fixed manufacturing costs, partially offset by lower charges and increased savings related to our Realignment Programs.
Operating loss for the three months ended September 30, 2017 decreased by $13.5 million, or 78.9%, as compared with the same period in 2016. The decrease included negative currency effects of approximately $1 million. The decreased loss was primarily due to the $8.8 million increase in gross profit and a $4.7 million decrease in SG&A (including a increase due to currency effects of approximately $1 million). The decrease in SG&A is primarily due to decreased charges and increased savings related to our Realignment Programs.
Operating loss for the nine months ended September 30, 2017 increased by $35.6 million, or 342.3%, as compared with the same period in 2016.2023. The increase included negative currency effects of less than one million. The increased loss wasincrease was primarily due to the $30.4$26.5 million decreaseincrease in gross profit and a $4.9the $7.3 million increasedecrease in SG&A (including a decrease due to currency effects of less than one million). The increase in SG&A is primarily due to increased charges related to our Realignment Programs which were partially offset by an increase in related savings.&A.
Backlog of $437.0$1,784.2 million at September 30, 2017 increasedMarch 31, 2024 decreased by $63.5$107.5 million, or 17.0%5.7%, as compared with December 31, 20162023. Currency effects provided an increaseprovided a decrease of approximately $36 million. Backlog at September 30, 2017 and December 31, 2016 included $17.7$20 million and $14.2 million, respectively, of interdivision backlog (which is eliminated and not included in consolidated backlog as disclosed above).
Flow Control Division Segment Results
Our second largest business segment is FCD which designs, manufactures and distributes a broad portfolio of engineered-to-order and configured-to-order isolation valves, control valves, valve automation products boiler controls and related services.equipment. FCD leverages its experience and application know-how by offering a complete menu of engineered services to complement its expansive product portfolio. FCD has a total of 5044 manufacturing facilities and QRCs in 2522 countries around the world, with five of its 2219 manufacturing operations located in the U.S., nineUnited States, eight located in Europe sevenand the Middle East, five located in Asia Pacific and one located in Latin America. Based on independent industry sources, we believe that FCD is the thirdsecond largest industrial valve supplier on a globalglobal basis.
 Three Months Ended March 31,
(Amounts in millions, except percentages)20242023
Bookings$341.1 $332.0 
Sales320.5 281.6 
Gross profit92.7 80.3 
Gross profit margin28.9 %28.5 %
SG&A58.0 61.8 
Segment operating income34.7 18.5 
Segment operating income as a percentage of sales10.8 %6.6 %
 Three Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
Bookings$285.9
 $291.9
Sales287.7
 299.3
Gross profit91.7
 108.0
Gross profit margin31.9% 36.1%
Segment operating income48.5
 53.7
Segment operating income as a percentage of sales16.9% 17.9%
 Nine Months Ended September 30,
(Amounts in millions, except percentages)2017 2016
Bookings$911.2
 $913.8
Sales843.5
 915.5
Gross profit277.4
 315.0
Gross profit margin32.9% 34.4%
Segment operating income254.1
 140.5
Segment operating income as a percentage of sales30.1% 15.3%

Bookings for the three months ended September 30, 2017 decreasedMarch 31, 2024 increased by $6.0$9.1 million, or 2.1%2.7%, as compared with the same period in 2016.2023. Bookings included negative currency benefitseffects of approximately $5$1 million. DecreasedThe increase in customer bookings was primarily driven by increased customer orders in the chemicaloil and gas and power generation industries, were partially offset by increasesdecreased customer orders in the chemical, general and oil and gaswater management industries. DecreasedIncreased customer bookings were driven by increased orders of $19.6$27.2 million into Asia Pacific, $8.7 million into Europe, $2.3 million into Africa, and $2.4$1.2 million into Latin America, were partially offset by increased customer bookingsdecreased orders of $15.5$20.6 million into North America.America and $8.7 million into the Middle East. The decreaseincrease was primarily driven by customer original equipmentaftermarket bookings.
BookingsSales for the ninethree months ended September 30, 2017 decreased by $2.6March 31, 2024 increased $38.9 million, or 0.3%13.8%, as compared with the same period in 2016. Bookings2023. The increase included negative currency effects of approximately $2less than one million. DecreasedThe increase was driven by both aftermarket and original equipment customer bookings in the general and chemical industries were substantially offset by increases in the power generation and oil and gas industries. Decreased

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customer bookings of $58.2 million into Europe and $20.9 million into Latin America were substantially offsetsales. The increase was primarily driven by increased customer bookingssales of $39.4 million into Asia Pacific, $13.3$12.7 million into the Middle East, $11.9$11.0 million into Europe, $5.1 million into Africa, and $3.3 million into North America, and $9.0partially offset by decreased sales of $2.8 million into Africa. The decrease was driven by customer original equipment bookings.Latin America.
SalesGross profit for the three months ended September 30, 2017 decreased $11.6March 31, 2024 increased by $12.4 million, or 3.9%15.4%, as compared with the same period in 2016.2023. Gross profit margin for the three months ended March 31, 2024 of 28.9% increased from the 28.5% for the same period in 2023. The decrease included currency benefits of approximately $5 million and was driven by decreased customer original equipment sales. The decreaseincrease in gross profit margin was primarily driven by decreased customerdue to the favorable impact of previously implemented sales of $7.2 million into Europe, $6.8 million into North Americaprice increases and $4.7 million into Latin America,higher sales volume, partially offset by slightly unfavorable mix, increased customer salescharges of $5.1less than one million into Asia Pacificrelated to our Realignment Programs and $4.1 million into Africa.higher broad-based annual incentive compensation as compared to the same period in 2023.
SalesSG&A for the ninethree months ended September 30, 2017March 31, 2024 decreased $72.0by $3.8 million, or 7.9%6.1%, as compared with the same period in 2016. The2023. Currency effects provided an increase of less than one million. The decrease included currency benefits of approximately $1 million and was driven by decreased customer original equipment sales. The decreasein SG&A was primarily driven bydue to decreased customer salescharges of $26.8$8.8 million intorelated to our 2023 Realignment Programs and $3.1 million of expense related to the Middle East, $18.6 million into Europe, $11.2 million into North America and $8.7 million into Asia Pacific,terminated Velan
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acquisition incurred in the first quarter of 2023 that did not recur, partially offset by increased customer sales of $2.7a $2.0 million into Africa.increase in research and development costs and $1.0 million increase in bad debt expense as compared to the same period in 2023.
Gross profitOperating income for the three months ended September 30, 2017 decreasedMarch 31, 2024 increased by $16.3$16.2 million, or 15.1%87.6%, as compared with the same period in 2016. Gross profit margin for the three months ended September 30, 2017 of 31.9% decreased from 36.1% for the same period in 2016. The decrease in gross profit margin was primarily attributable to increased charges related to our Realignment Programs and the negative impact of decreased sales on our absorption of fixed manufacturing costs, partially offset by increased savings achieved related to our Realignment Programs compared to the same period in 2016.
Gross profit for the nine months ended September 30, 2017 decreased by $37.6 million, or 11.9%, as compared with the same period in 2016. Gross profit margin for the nine months ended September 30, 2017 of 32.9% decreased from 34.4% for the same period in 2016. The decrease in gross profit margin was primarily attributable to the negative impact of decreased sales on our absorption of fixed manufacturing costs and lower margin projects shipped from backlog, partially offset by increased savings achieved related to our Realignment Programs compared to the same period in 2016.
Operating income for the three months ended September 30, 2017 decreased by $5.2 million, or 9.7%, as compared with the same period in 2016. The decrease included currency benefits of approximately $1 million. The decrease was due to the $16.3 million decrease in gross profit, partially offset by the $9.9 million pre-tax gain from the sale of the Vogt business and a decrease in SG&A of $1.0 million (including a increase due to currency effects of approximately $1 million). The decrease in SG&A was primarily due to savings achieved related to our Realignment Programs compared to the same period in 2016.
Operating income for the nine months ended September 30, 2017 increased by $113.6 million, or 80.9%, as compared with the same period in 2016.2023. The increase included negative currency effects of approximately $3less than one million. The increase was primarily attributabledue to the $141.2$12.4 million of pre-tax gain from the sales of the Gestraincrease in gross profit and Vogt businesses and a decrease in SG&A of $9.4 million (including a decrease due to currency effects of less than one million), partially offset by the $37.6$3.8 million decrease in gross profit. The decrease in SG&A was primarily due to savings achieved related to our Realignment Programs compared to the same period in 2016.&A.
Backlog of $659.8$841.7 million at September 30, 2017March 31, 2024 increased by $75.3$14.9 million, or 12.9%1.8%, as compared with December 31, 2016. 2023. Currency effects provided an increasea decrease of approximately $16 million.$6 million.

LIQUIDITY AND CAPITAL RESOURCES
Cash Flow and Liquidity Analysis
 Three Months Ended March 31,
(Amounts in millions)20242023
Net cash flows provided (used) by operating activities$62.3 $26.6 
Net cash flows provided (used) by investing activities(13.6)(16.5)
Net cash flows provided (used) by financing activities(54.2)(43.8)
 Nine Months Ended September 30,
(Amounts in millions)2017 2016
Net cash flows provided by operating activities$72.4
 $70.9
Net cash flows provided (used) by investing activities171.1
 (68.9)
Net cash flows used by financing activities(136.2) (114.3)

Existing cash, cash generated by operations and borrowings available under our existing Revolvingthe Senior Credit Facility are our primary sources of short-term liquidity. We monitor the depository institutions that hold our cash and cash equivalents on a regular basis, and we believe that we have placed our deposits with creditworthy financial institutions. Our sources of operating cash generally include the sale of our products and services and the conversion of our working capital, particularly accounts receivable and inventories. Our cash balance at September 30, 2017March 31, 2024 was $502.1$532.0 million, as compared with $367.2$545.7 million at December 31, 2016.2023.

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Our cash balance increaseddecreased by $134.9$13.7 million to $502.1$532.0 million at September 30, 2017March 31, 2024, as compared with December 31, 2016.2023. The cash providedactivity during the first ninethree months of 20172024 included $208.8 million in net cash proceeds from the sale of our Gestra and Vogt businesses, partially offsetprovided by cash used of $74.4operating activities, $27.7 million in dividend payments, $45.0$13.6 million in capital expenditures, $15.0 million of payments on long-term debtour Term Loan and $40.6$2.5 million in capital expenditures. See Note 3 to our condensed consolidated financial statements included in this Quarterly Report for more information on the sale of our Gestra and Vogt businesses.share repurchases.
For the ninethree months ended September 30, 2017,March 31, 2024, our cash provided by operating activities was $72.4$62.3 million, as compared with $70.9to cash provided of $26.6 million for the same period in 2016.2023. Cash flow used byfor working capital decreasedincreased for the ninethree months ended September 30, 2017,March 31, 2024, due primarily to increased cash flows used by or decreased uses of cash related toflows provided by accounts receivable, contract assets, accounts payable, contract liabilities, accrued liabilities, and income taxes payable, inventoryretirement obligations and accounts payable,other liabilities partially offset by aincreased cash flows provided by or decreased source of cash related to accounts receivableflows used by inventories, prepaid expenses and other assets, and net deferred taxes as compared to the same period in 2016.2023.
DecreasesIncreases in accounts receivable provided $63.8used $39.7 million of cash flow for the ninethree months ended September 30, 2017,March 31, 2024, as compared with $69.8to $26.2 million used for the same period in 2016.2023. As of September 30, 2017,March 31, 2024, our days’ sales outstanding ("DSO") was 8776 days as compared with 8483 days as of September 30, 2016.March 31, 2023.
DecreasesIncreases in prepaid expenses and other provided $43.5contract assets used $8.1 million of cash flow for the ninethree months ended September 30, 2017,March 31, 2024, as compared with a usecash flows provided of $58.7$4.3 million for the same period in 2016, due primarily to a decrease in prepaid income taxes in 2017 compared to an increase in 2016.2023.
Increases in inventory used $20.4$11.5 million and $31.5$70.7 million of cash flow for the ninethree months ended September 30, 2017March 31, 2024 and September 30, 2016,March 31, 2023, respectively. Inventory turns were 2.63.3 times at both September 30, 2017 and 2016. Our calculationMarch 31, 2024, as compared to 3 times as of inventory turns does not reflect the impact of advanced cash received from our customers. DecreasesMarch 31, 2023.
Increases in accounts payable used $68.0provided $5.1 million of cash flow for the ninethree months ended September 30, 2017March 31, 2024, as compared with $98.8$7.0 million of cash provided for the same period in 2023. Increases in accrued liabilities provided $30.9 million of cash flow for the three months ended March 31, 2024, as compared with $35.4 million of cash flow provided for the same period in 2023.
Decreases in contract liabilities used $6.4 million of cash flow for the three months ended March 31, 2024, as compared to cash flows provided of $32.7 million for the same period in 2016. Decreases in accrued liabilities and income taxes payable2023.
Cash flows used $6.7 million of cash flow forby investing activities during the ninethree months ended September 30, 2017March 31, 2024 were $13.6 million, as compared with $82.3to cash flows used of $16.5 million for the same period in 2016.
Cash flows provided by investing activities during the nine months ended September 30, 2017 were $171.1 million as compared with a use of $68.9 million for the same period in 2016, primarily due to $208.8 million in net proceeds from the sale of our Gestra and Vogt businesses.2023. Capital expenditures during the ninethree months ended September 30, 2017March 31, 2024 were $40.6$13.6 million, a decrease of $23.9$1.7 million as compared with the same period in 2016.2023. Our capital expenditures are generally focused on strategic initiatives to pursue new markets, geographic expansion, information technology infrastructure, ongoing scheduled replacements and upgrades and cost reduction opportunities. In 2017, total2024, we currently estimate capital expenditures are expected to be between $70$75 million and $80 million.$85 million before consideration of any acquisition activity.
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Cash flows used by financing activities during the ninethree months ended September 30, 2017March 31, 2024 were $136.2$54.2 million, as compared with $114.3to $43.8 million of cash flows used for the same period in 2016.2023. Cash outflows in the three months ended March 31, 2024 resulted primarily from the $15.0 million of payments on our Term Loan and $27.7 million of dividend payments. Cash outflows during the ninethree months ended September 30, 2017March 31, 2023 resulted primarily from $74.4 million of dividend payments and $45.0the $10.0 million of payments on long-term debt.our Term Loan and $26.2 million of dividend payments.
Our Senior Credit Facility Agreementmatures in October 2020. Approximately 8.3%September 13, 2026. Approximately $45 million of our outstanding Term Loan Facility is due to mature in the remainder of 20172024 and approximately 33.3%$60 million in 2018.2025. As of September 30, 2017,March 31, 2024, we had an available capacity of $708.2$672.2 million on our Senior Credit Facility, which provides for a $800.0 million Revolvingmillion unsecured revolving credit facility with a maturity date of September 13, 2026. Our borrowing capacity is subject to financial covenant limitations based on the terms of our Senior Credit Facility.Facility and is also reduced by outstanding letters of credit. Our RevolvingSenior Credit Facility is committed and held by a diversified group of financial institutions. Refer to Note 6 to our condensed consolidated financial statements included in this Quarterly Report for additional information concerning our Senior Credit Facility.

During the ninethree months ended September 30, 2017 and 2016March 31, 2024 we contributed $20 millionhave made no cash contributions to our U.S. pension plan. We have no obligation to make contributions to our U.S. pension plans in 2024, but have authorization for contributions up to $20 million. At December 31, 20162023, our U.S. pension plan was fully funded as defined by applicable law. After consideration of our funded status, we do not anticipate making any additional contributions to our U.S. pension plan in 2017, excluding direct benefits paid. We continue to maintain an asset allocation consistent with our strategy to maximize total return, while reducing portfolio risks through asset class diversification.
At September 30, 2017, $489.4 million of our total cash balance of $502.1 million was held by foreign subsidiaries, $375.8 million of which we consider permanently reinvested outside the U.S. Based on the expected near-term liquidity needs of our various geographies and our currently available sources of domestic short-term liquidity, we currently do not anticipate the need to repatriate any permanently reinvested cash to fund domestic operations that would generate adverse tax results. However, in the event this cash is needed to fund domestic operations, we estimate the full $375.8 million could be repatriated resulting in a U.S. cash tax liability between $5.0 million and $15.0 million. Should we be required to repatriate this cash, it could limit our ability to assert permanent reinvestment of foreign earnings and invested capital in future periods.
Considering our current debt structure and cash needs, we currently believe cash flows generated from operating activities combined with availability under our RevolvingSenior Credit Facility and our existing cash balance will be sufficient to meet our cash needs for our short-term (next 12 months) and long-term (beyond the next 12 months. Cashmonths) business needs. However, cash flows from operations could be adversely affected by a decrease in the rate of general global economic growth and an extended decrease in capital spending of our customers, as well as economic, political and other risks associated with sales of our products, operational factors, competition, regulatory actions, fluctuations in foreign currency exchange rates and fluctuations in interest rates, among other factors. See "Financing" and "Cautionary Note Regarding Forward-Looking Statements" below.

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On November 13, 2014, ourMarch 31, 2024, we have $297.5 million of remaining capacity for Board of Directors approved a $500.0 million share repurchase authorization, of which as of September 30, 2017, we have $160.7 million of remaining capacity.repurchases. While we currently intend to continue to return cash through dividends and/or share repurchases for the foreseeable future, any future returns of cash through dividends and/or share repurchases will be reviewed individually, declared by our Board of Directors at its discretion and implemented by management at its discretion, depending on our financial condition, business opportunities and market conditions at such time.management.
Financing
Credit Facilities
See Note 10 to our consolidated financial statements included in our 2016 Annual Report and Note 6 to our condensed consolidated financial statements included in this Quarterly Report for a discussion of our Senior Credit Facility and related covenants. We were in compliance with all applicable covenants related tounder our Senior Credit Facility as of March 31, 2024.
As of March 31, 2024, we have cash and cash equivalents of $532.0 million and $672.2 million of borrowings available under our Senior Credit Facility. In April 2024, the Company borrowed $100.0 million on the Revolving Credit Facility for general corporate purposes and, as of April 29, 2024, the Company has $100.0 million outstanding. We complieddo not currently anticipate, nor are we aware of, any significant market conditions or commitments that would change any of our conclusions of the sufficient liquidity available to us. We expect the liquidity discussed above coupled with all covenants through September 30, 2017.the costs savings measures planned and already in place will further enable us to maintain adequate liquidity over the short-term (next 12 months) and long-term (beyond the next 12 months). We will continue to actively monitor the credit markets in order to maintain sufficient liquidity and access to capital.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management’s discussion and analysis of financial condition and results of operations are based on our condensed consolidated financial statements and related footnotes contained within this Quarterly Report. Our critical accounting policies used in the preparation of our condensed consolidated financial statements were discussed in "Item"Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 20162023 Annual Report. TheseThe critical policies, for which no significant changes have occurred in the ninethree months ended September 30, 2017,March 31, 2024, include:

•Revenue Recognition;

•Deferred Taxes, Tax Valuation Allowances and Tax Reserves;

•Reserves for Contingent Loss;

Retirement•Pension and Postretirement Benefits; and

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•Valuation of Goodwill, Indefinite-Lived Intangible Assets and Other Long-Lived Assets.
The process of preparing condensed consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions to determine certain of the assets, liabilities, revenues and expenses. These estimates and assumptions are based upon what we believe is the best information available at the time of the estimates or assumptions. The estimates and assumptions could change materially as conditions within and beyond our control change. Accordingly, actual results could differ materially from those estimates. The significant estimates are reviewed quarterly with the Audit Committee of our Board of Directors.
Based on an assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, we believe that our condensed consolidated financial statements provide a meaningful and fair perspective of our consolidated financial condition and results of operations. This is not to suggest that other general risk factors, such as changes in worldwide demand, changes in material costs, performance of acquired businesses and others, could not adversely impact our consolidated financial condition, results of operations and cash flows in future periods. See "Cautionary Note Regarding Forward-Looking Statements" below.
ACCOUNTING DEVELOPMENTS
We have presented the information about pronouncements not yet implemented in Note 1 to our condensed consolidated financial statements included in this Quarterly Report.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as, "may," "should," "expects," "could," "intends," "plans," "anticipates," "estimates," "believes," "predicts" or other similar expressions are intended to identify forward-looking statements, which include, without limitation, statements concerning our future financial performance, future debt and financing levels, investment objectives, implications of litigation and regulatory investigations and other management plans for future operations and performance.
The forward-looking statements included in this Quarterly Report are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, andstatements. Specific factors that might cause such a difference include, without limitation, the following:

•economic, political and other risks associated with our international operations, including military actions, trade embargoes, epidemics or pandemics or changes to tariffs or trade agreements that could affect customer markets, particularly North African, Latin American, Asian and Middle Eastern markets and global oil and gas producers, and non-compliance with U.S. export/re-export control, foreign corrupt practice laws, economic sanctions and import laws and regulations;
•any continued volatile regional and global economic conditions resulting from the COVID-19 pandemic on our business and operations; global supply chain disruptions and the current inflationary environment could adversely affect the efficiency of our manufacturing and increase the cost of providing our products to customers;
•a portion of our bookings may not lead to completed sales, and our ability to convert bookings into revenues at acceptable profit margins;

•changes in the global financial markets and the availability of capital and the potential for unexpected cancellations or delays of customer orders in our reported backlog;

•our dependence on our customers' ability to make required capital investment and maintenance expenditures;

•if we are not able to successfully execute and realize the expected financial benefits from our restructuring, realignment and other cost-saving initiatives, our business could be adversely affected;
risks associated with cost overruns on fixed fee projects and in accepting customer orders for large complex custom engineered products;

•the substantial dependence of our sales on the success of the oil and gas, chemical, power generation and water management industries;

•the adverse impact of volatile raw materials prices on our products and operating margins;

economic, political and other risks associated with our international operations, including military actions or trade embargoes that could affect customer markets, particularly North African, Russian and Middle Eastern markets and global oil and gas producers, and non-compliance with U.S. export/reexport control, foreign corrupt practice laws, economic sanctions and import laws and regulations;

•increased aging and slower collection of receivables, particularly in Latin America and other emerging markets;

•our exposure to fluctuations in foreign currency exchange rates, particularly the Euro and British pound andincluding in hyperinflationary countries such as Venezuela;Venezuela and Argentina;

our furnishing of products and services to nuclear power plant facilities and other critical applications;

•potential adverse consequences resulting from litigation to which we are a party, such as litigation involving asbestos-containing material claims;

a foreign government investigation regarding our participation in the United Nations Oil-For-Food Program;

•expectations regarding acquisitions and the integration of acquired businesses;

our relative geographical profitability and its impact on our utilization of deferred tax assets, including foreign tax credits;

•the potential adverse impact of an impairment in the carrying value of goodwill or other intangible assets;

•our dependence upon third-party suppliers whose failure to perform timely could adversely affect our business operations;

•the highly competitive nature of the markets in which we operate;

•environmental compliance costs and liabilities;

•potential work stoppages and other labor matters;

•access to public and private sources of debt financing;

•our inability to protect our intellectual property in the U.S.,United States, as well as in foreign countries;

•obligations under our defined benefit pension plans;

risks and potential liabilities associated with cyber security threats; and 

our inability to execute and realize the expected financial benefits of our strategic manufacturing optimization and other cost-saving initiatives.

•our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud.fraud;
•the recording of increased deferred tax asset valuation allowances in the future or the impact of tax law changes on such deferred tax assets could affect our operating results;
•our information technology infrastructure could be subject to service interruptions, data corruption, cyber-based attacks or network security breaches, which could disrupt our business operations and result in the loss of critical and confidential information; and
•ineffective internal controls could impact the accuracy and timely reporting of our business and financial results.
These and other risks and uncertainties are more fully discussed in the risk factors identified in "Item 1A. Risk Factors" in Part I of our 20162023 Annual Report and Part II of this 10-Q,Quarterly Report, and may be identified in our Quarterly Reports on Form 10-Q and our other filings with the SEC and/or press releases from time to time. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any forward-looking statement.
Item 3.Quantitative and Qualitative Disclosures about Market Risk.
Item 3.Quantitative and Qualitative Disclosures About Market Risk.
We have market risk exposure arising from changes in interest rates and foreign currency exchange rate movements in foreign exchange forward contracts. We are exposed to credit-related losses in the event of non-performance by counterparties to financial instruments, but we currently expect our counterparties will continue to meet their obligations given their current creditworthiness.
Interest Rate Risk
Our earnings are impacted by changes in short-term interest rates as a result of borrowings under our Senior Credit Facility, which bear interest based on floating rates. At September 30, 2017, we had $180.0 million of variable rate debt obligations outstanding under our Senior Credit Facility with a weighted average interest rate of 2.58%. A hypothetical change of 100 basis points in the interest rate for these borrowings, assuming constant variable rate debt levels, would have changed interest expense by $1.4 million for the nine months ended September 30, 2017.
Foreign Currency Exchange Rate Risk
A substantial portion of our operations are conducted by our subsidiaries outside of the U.S.United States in currencies other than the U.S. dollar. Almost all of our non-U.S. subsidiaries conduct their business primarily in their local currencies, which are also their functional currencies. Foreign currency exposures arise from translation of foreign-denominated assets and liabilities into U.S. dollars and from transactions, including firm commitments and anticipated transactions, denominated in a currency other than our or a non-U.S. subsidiary’s functional currency. In March 2015, we designated €255.7 million of our €500.0 million 2022 Euro Senior Notes as a net investment hedge of our investments in certain of our international subsidiaries that use the Euro as their functional currency. Generally, we view our investments in foreign subsidiaries from a long-term perspective and use capital structuring techniques to manage our investment in foreign subsidiaries as deemed necessary. We realizedrecognized net gains (losses) associated with foreign currency translation of $17.7$(28.2) million and $(15.6)$13.5 million for the three months September 30, 2017ended March 31, 2024 and 2016 and $85.8 million and $(12.6) million for the nine months ended September 30, 2017 and 2016,2023, respectively, whichwhich are included in other comprehensive income (loss).
We employ a foreign currency risk management strategy to minimize potential changes in cash flows from unfavorable foreign currency exchange rate movements. Where available, the use of foreign exchange forward contracts allows us to mitigate transactional exposure to exchange rate fluctuations as the gains or losses incurred on the foreign exchange forward contracts will offset, in whole or in part, losses or gains on the underlying foreign currency exposure. Our policy allows foreign currency coverage only for identifiable foreign currency exposures and beginning in the fourth quarter of 2013 instruments that meet certain criteria are designated for hedge accounting.exposures. As of September 30, 2017,March 31, 2024, we had a U.S. dollar equivalent of $237.6$640.2 million in aggregate notional amount outstanding in foreign exchange forward contracts with third parties, as compared with $393.8$656.6 million at December 31, 2016.2023. Transactional currency gains and losses arising from transactions outside of our sites’ functional currencies and changes in fair value of non-designatednon-designated foreign exchange forward contracts are included in our consolidated results of operations. We recognized foreign currency net gains (losses) of $8.4$1.3 million and $1.4$(7.4) million for the three months ended September 30, 2017March 31, 2024 and 2016, respectively, and $(9.7) million and $2.5 million for the nine months ended September 30, 2017 and 2016,2023, respectively, which are included in other (expense) income (expense), net in the accompanying condensed consolidated statements of income.
Based on a sensitivity analysis at September 30, 2017,March 31, 2024, a 10% change in the foreign currency exchange rates for the ninethree months ended September 30, 2017March 31, 2024 would have impacted our net earnings by approximately $11$13 million. This calculation assumes that all currencies change in the same direction and proportion relative to the U.S. dollar and that there are no indirect effects, such as changes in non-U.S. dollar sales volumes or prices. This calculation does not take into account the impact of the foreign currency exchange forward contracts discussed above.

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Item 4.Controls and Procedures.
Item 4.Controls and Procedures.
Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are controls and other procedures that are designed to ensure that the information that we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
In connection with the preparation of this Quarterly Report, our management, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2017. Our management, includingMarch 31, 2024. Based on this evaluation, our current Principal Executive Officerprincipal executive officer and Principal Financial Officer,principal financial officer concluded that our disclosure controls and procedures were not effective as of September 30, 2017 because of the previously identified material weaknesses in our internal control over financial reporting described in Item 9A. Controls and Procedures in our Form 10-K/A for the fiscal year ended DecemberMarch 31, 2016.
Management has concluded that, notwithstanding the material weaknesses referred to above, the Company’s unaudited condensed consolidated financial statements in this Form 10-Q fairly state, in all material respects, our financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with U.S. GAAP.
Remediation Plan
In the second quarter of 2017, management became actively engaged in the planning for, and implementation of, remediation efforts to address the material weaknesses in our internal control over financial reporting identified above. Management has implemented the following steps in the third quarter of 2017:
enhanced the current business process review control procedures to include additional prior period comparisons and additional key ratios, metrics and risk based criteria as determined by management;
enhanced the detailed site and/or process reviews based on criteria determined by management’s risk assessment including manual journal entries;
conducted enhanced ethics, controls and policy training for employees at the one non-U.S. site where certain employees engaged in conduct that circumvented controls.
Management believes the measures described above and others that may be implemented will remediate the material weaknesses that we have identified. Management is in the process of testing the effectiveness of the revised controls.  These material weaknesses cannot be considered fully remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.2024.
Changes in Internal Control Over Financial Reporting
Other than the remediation actions identified above, there wereThere have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended September 30, 2017March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION
Item 1.Legal Proceedings.
Item 1.Legal Proceedings.
We are party to the legal proceedings that are described in Note 10 to our condensed consolidated financial statements included in "Item 1. Financial Statements" of this Quarterly Report, and such disclosure is incorporated by reference into this "Item 1. Legal Proceedings." In addition to the foregoing, we and our subsidiaries are named defendants in certain other ordinary routine lawsuits incidental to our business and are involved from time to time as parties to governmental proceedings, all arising in the ordinary course of business. Although the outcome of lawsuits or other proceedings involving us and our subsidiaries cannot be predicted with certainty, and the amount of any liability that could arise with respect to such lawsuits or other proceedings cannot be predicted accurately, management does not currently expect the amount of any liability that could arise with respect to these matters, either individually or in the aggregate, to have a material adverse effect on our financial position, results of operations or cash flows.
Item 1A.Risk Factors.
Item 1A.Risk Factors.
There are numerous factors that affect our business, andfinancial condition, results of operations, cash flows, reputation and/or prospects, many of which are beyond our control. In addition to other information set forth in this Quarterly Report, careful consideration should be given to "Item 1A. Risk Factors" in Part I and "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our 20162023 Annual Report, which contain descriptions of significant factors that might cause the actual results of operations in future periods to differ materially from those currently expected or desired.projected in the forward-looking statements contained therein.
There have been no material changes in risk factors discussed in our 20162023 Annual Report and subsequent SEC filings. The risks described in this Quarterly Report filed for the period ended March 31, 2024, our 20162023 Annual Report and in our other SEC filings or press releases from time to time are not the only risks we face. Additional risks and uncertainties are currently deemed immaterial based on management's assessment of currently available information, which remains subject to change; however, new risks that are currently unknown to us may surface in the future that materially adversely affect our business, financial condition, results of operations or cash flows.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.
Note 12 to our condensed consolidated financial statements included in this Quarterly Report includes a discussion of our share repurchase program and payment of quarterly dividends on our common stock.
Effective February 19, 2024, the Board of Directors approved a $300.0 million share repurchase authorization, which included approximately $96.1 million of remaining capacity under the prior $500.0 million share repurchase authorization. During the quarter ended September 30, 2017March 31, 2024, we had no repurchasesrepurchased 57,000 shares of our common shares.stock shares for $2.5 million, representing an average cost of 44.71 per share.  As of September 30, 2017,March 31, 2024, we have $160.7$297.5 million of remaining capacity under our current share repurchase program. The following table sets forth the activity for each of the three months during the quarter ended September 30, 2017:March 31, 2024:
Total Number of Shares PurchasedAverage Price Paid per ShareTotal Number of
Shares Purchased as
Part of Publicly Announced Program (1)		Maximum Number of
Shares (or
Approximate Dollar
Value) That May Yet
Be Purchased Under
the Program (in millions)
Period 
January 1 - 31268 (2)$39.99 — $96.1 
February 1 - 29210,097 (3)42.72 — 300.0 
March 1 - 31233 (2)44.55 57,000 297.5 
Total210,598  $42.72 57,000  

(1)On November 13, 2014, our Board of Directors approved a $500.0 million share repurchase authorization. Effective February 19, 2024, the Board of Directors approved a $300.0 million share repurchase authorization, which included approximately $96.1 million of remaining capacity under the prior $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.
(2)Represents shares that were tendered by employees to satisfy minimum tax withholding amounts for Restricted Shares.
(3)Includes 207,916 shares that were tendered by employees to satisfy minimum tax withholding amounts for Restricted Shares at an average price per share of $42.73 and 2,181 shares purchased at a price of $42.17 per share by a rabbi trust that we established in connection with our director deferral plans, pursuant to which non-employee directors may elect to defer directors’ quarterly cash compensation to be paid at a later date in the form of common stock.

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 Total Number of Shares Tendered Average Price per Share 
Total Number of
Shares Purchased as
Part of Publicly Announced Program
 
Maximum Number of
Shares (or
Approximate Dollar
Value) That May Yet
Be Purchased Under
the Program (in millions)
Period   
July 1 - 31320
(1)$46.17
 —
 $160.7
August 1 - 312,899
(2)38.35
 —
 160.7
September 1 - 30—
 —
 —
 160.7
Total3,219
 $39.13
 —
  

(1)Shares tendered by employees to satisfy minimum tax withholding amounts for Restricted Shares.
(2)Represents 419 shares that were tendered by employees to satisfy minimum tax withholding amounts for Restricted Shares at an average price per share of $38.91, and 2,480 shares purchased at a price of $38.25 per share by a rabbi trust that we established in connection with our director deferral plans, pursuant to which non-employee directors may elect to defer directors’ quarterly cash compensation to be paid at a later date in the form of common stock.



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Item 3.Defaults Upon Senior Securities.
Item 6.
Exhibits.
None
Item 4.Mine Safety Disclosures.
Not applicable.
Item 5.Other Information.
Insider Trading Arrangements.
Our directors and executive officers may, from time to time, enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5 -1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange Act. During the quarter ended March 31, 2024, no such plans or other arrangements were adopted, terminated or modified.


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Item 6.Exhibits
Exhibit No.Description
Exhibit No.Description
Restated Certificate of Incorporation of Flowserve Corporation, (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013).
3.2
Flowserve Corporation By-Laws, as amended and restated effective May 18, 201720, 2021 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated(File No. 001-13179)) filed on May 24, 2017)25, 2021).
Fourth Amendment to Credit Agreement, dated June 30, 2017, among Flowserve Corporation Bank of America, N.A.,By-Laws, as administrative agent,amended and other lenders referred thereinrestated effective April 12, 2023 (incorporated by reference to Exhibit 10.13.1 to Registrant'sthe Registrant’s Current Report on Form 8-K dated July 7, 2017)(File No. 001-13179) filed on April 12, 2023).
Form of 2024 Performance Restricted Stock Unit Agreement for certain officers pursuant to the Flowserve Corporation 2020 Long-Term Incentive Plan.*
Form of 2024 Restricted Stock Unit Agreement for certain officers pursuant to the Flowserve Corporation 2020 Long-Term Incentive Plan.*
Flowserve Corporation Senior Management Retirement Plan, amended and restated effective January 1, 2024 (incorporated by reference to Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K (File No. 001-13179) for the year ended December 31, 2023).*
Flowserve Corporation Retirement Savings Plan, amended and restated effective January 1, 2024 (incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K (File No. 001-13179) for the year ended December 31, 2023).*
Flowserve Corporation Supplemental Retirement Savings Plan effective January 1, 2024 (incorporated by reference to Exhibit 10.15 to the Registrant's Annual Report on Form 10-K (File No. 001-13179) for the year ended December 31, 2023).*
Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
104The cover page from the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2024, formatted in Inline XBRL (included as Exhibit 101)
_______________________
*Management contracts and compensatory plans and arrangements required to be filed as exhibits to this Quarterly Report on Form 10-Q.
+     Filed herewith.
++ Furnished herewith.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FLOWSERVE CORPORATION 
Date:April 29, 2024/s/ Amy B. Schwetz
Amy B. SchwetzFLOWSERVE CORPORATION 
Date:November 1, 2017/s/ R. Scott Rowe
R. Scott Rowe
President and Chief Executive Officer
(Principal Executive Officer) 

Date:November 1, 2017/s/ Lee S. Eckert
Lee S. Eckert
Senior Vice President and Chief Financial Officer

(Principal Financial Officer) 

Date:April 29, 2024/s/ Scott K. Vopni
Scott K. Vopni
Vice President and Chief Accounting Officer
(Principal Accounting Officer) 

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