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What changed in FLOWSERVE CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FLOWSERVE CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+334 added−332 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-20)

Top changes in FLOWSERVE CORP's 2024 10-K

334 paragraphs added · 332 removed · 277 edited across 8 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

67 edited+13 added−13 removed122 unchanged
Biggest changeThe COVID-19 pandemic, including actions taken by governments in response, caused and could in the future cause, a substantial curtailment of business activities (including the decrease in demand for a broad variety of goods and services), weakened economic conditions, supply chain disruptions, significant economic uncertainty and volatility in the financial and commodity markets, including global volatility in supply and demand for oil and gas.
Biggest changeVolatile regional and global economic conditions stemming from public health emergencies, such as outbreaks of epidemics, pandemics, and contagious diseases, including actions taken by governments in response, could in the future cause a substantial curtailment of business activities (including the decrease in demand for a broad variety of goods and services), weakened economic conditions, supply chain disruptions, significant economic uncertainty and volatility in the financial and commodity markets, including global volatility in supply and demand for oil and gas and may precipitate and aggravate many of the factors described above, and could cause these factors to adversely impact our operations and financial performance as well as those of many of our customers and suppliers.
Uncertainties with respect to tariffs, trade agreements, or any potential trade wars negatively impact the global economic markets and could affect our customers’ ability to invest in capital expenditures, which may in turn result in reduced demand for our products and services, and could have a material adverse effect on our financial condition, results of operations and cash flows.
Uncertainties with respect to tariffs, trade agreements, or any potential trade wars may negatively impact the global economic markets and could affect our customers’ ability to invest in capital expenditures, which may in turn result in reduced demand for our products and services, and could have a material adverse effect on our financial condition, results of operations and cash flows.
Accordingly, our business and results of operations are subject to risks associated with doing business internationally, including: • instability in a specific country's or region's political or economic conditions, particularly economic conditions in Europe and Latin America, and political conditions in the Middle East, Asia, North Africa, Latin America, the Trans-Pacific region and other emerging markets; • trade protection measures, such as tariff increases, and import and export licensing and control requirements; • political, financial market or economic instability relating to epidemics or pandemics; • uncertainties related to any geopolitical, economic and regulatory effects or changes due to recent or upcoming domestic and international elections; • the imposition of governmental economic sanctions on countries in which we do business; • potentially negative consequences from changes in tax laws or tax examinations; • difficulty in staffing and managing widespread operations; • increased aging and slower collection of receivables, particularly in Latin America and other emerging markets; • difficulty of enforcing agreements and collecting receivables through some foreign legal systems; • differing and, in some cases, more stringent labor regulations; • potentially negative consequences from fluctuations in foreign currency exchange rates; • partial or total expropriation; • differing protection of intellectual property; • inability to repatriate income or capital; and • difficulty in administering and enforcing corporate policies, which may be different than the customary business practices of local cultures.
Accordingly, our business and results of operations are subject to risks associated with doing business internationally, including: 16 • instability in a specific country's or region's political or economic conditions, particularly economic conditions in Europe and Latin America, and political conditions in the Middle East, Asia, North Africa, Latin America, the Trans-Pacific region and other emerging markets; • trade protection measures, such as tariff increases, and import and export licensing and control requirements; • political, financial market or economic instability relating to epidemics or pandemics; • uncertainties related to any geopolitical, economic and regulatory effects or changes due to recent or upcoming domestic and international elections; • the imposition of governmental economic sanctions on countries in which we do business; • potentially negative consequences from changes in tax laws or tax examinations; • difficulty in staffing and managing widespread operations; • increased aging and slower collection of receivables, particularly in Latin America and other emerging markets; • difficulty of enforcing agreements and collecting receivables through some foreign legal systems; • differing and, in some cases, more stringent labor regulations; • potentially negative consequences from fluctuations in foreign currency exchange rates; • partial or total expropriation; • differing protection of intellectual property; • inability to repatriate income or capital; and • difficulty in administering and enforcing corporate policies, which may be different than the customary business practices of local cultures.
Some of the more common challenges associated with acquisitions that we may experience, and have experienced in the past, include: • loss of key employees or customers of the acquired company; • conforming the acquired company's standards, processes, procedures and controls, including accounting systems and controls, with our operations, which could cause deficiencies related to our internal control over financial reporting; • coordinating operations that are increased in scope, geographic diversity and complexity; • retooling and reprogramming of equipment; • hiring additional management and other critical personnel; and • the diversion of management's attention from our day-to-day operations.
Some of the more common challenges associated with acquisitions that we may experience, and have experienced in the past, include: • loss of key employees or customers of the acquired company; • conforming the acquired company's standards, processes, procedures and controls, including accounting systems and controls, with our operations, which could cause deficiencies related to our internal control over financial reporting; • coordinating operations that are increased in scope, geographic diversity and complexity; • retooling and reprogramming of equipment; • hiring additional management and other critical personnel; and 15 • the diversion of management's attention from our day-to-day operations.
These agreements limit or restrict our ability, among other things, to: incur additional debt; fully utilize the capacity under the senior credit facility; pay dividends and make 21 other distributions; repurchase shares of our common stock in certain circumstances; prepay subordinated debt; make investments and other restricted payments; create liens; sell assets; and enter into transactions with affiliates.
These agreements limit or restrict our ability, among other things, to: incur additional debt; fully utilize the capacity under the senior credit facility; pay dividends and make other distributions; repurchase shares of our common stock in certain circumstances; prepay subordinated debt; make investments and other restricted payments; create liens; sell assets; and enter into transactions with affiliates.
In addition, acquisitions sometimes require large one-time charges 15 and can result in the incurrence of contingent liabilities, adverse tax consequences, substantial depreciation or deferred compensation charges, the amortization of identifiable purchased intangible assets or impairment of goodwill, any of which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
In addition, acquisitions sometimes require large one-time charges and can result in the incurrence of contingent liabilities, adverse tax consequences, substantial depreciation or deferred compensation charges, the amortization of identifiable purchased intangible assets or impairment of goodwill, any of which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Existing or future legislation and regulations related to GHG emissions and climate change by the U.S. Congress, state and foreign legislatures and federal, state, local and foreign governmental agencies could adversely affect our business. Additionally, it is uncertain whether, when and in what form mandatory carbon dioxide emissions reduction programs may 19 be adopted.
Existing or future legislation and regulations related to GHG emissions and climate change by the U.S. Congress, state and foreign legislatures and federal, state, local and foreign governmental agencies could adversely affect our business. Additionally, it is uncertain whether, when and in what form mandatory carbon dioxide emissions reduction programs may be adopted.
Our manufacturing plant operations, capacity and supply chain are subject to disruption as a result of equipment failure, severe weather conditions and other natural or manmade disasters, including power outages, fires, explosions, terrorism, cyber-based attacks, conflicts or unrest, epidemics or pandemics, labor disputes, acts of God, or other reasons.
Our manufacturing plant operations, capacity and supply chain are subject to disruption as a result of equipment failure, severe weather conditions and other natural or manmade disasters, including power outages, fires, explosions, terrorism, cyber-based attacks, conflicts or unrest, epidemics or pandemics, labor disputes, tariffs, acts of God, or other reasons.
Our operating costs are subject to fluctuations, particularly due to changes in prices for commodities, parts, raw materials, energy and 13 related utilities, freight, and cost of labor which have been and may continue to be driven by inflation, tightening labor markets, prevailing price levels, exchange rates, and other economic factors.
Our operating costs are subject to fluctuations, particularly due to changes in prices for commodities, parts, raw materials, energy and related utilities, freight, and cost of labor which have been and may continue to be driven by inflation, tightening labor markets, prevailing price levels, exchange rates, and other economic factors.
As a global company with a large international footprint, we are subject to increased risk of damage or disruption to us, our employees, facilities, partners, suppliers, distributors, resellers or customers due to, among other things, terrorist acts, conflicts (including as a result of geopolitical uncertainty and/or conflicts in the countries and/or regions where we operate, including the United Kingdom, the European Union, Ukraine, the Middle East and the Trans-Pacific region), severe weather conditions, the potential physical effects of climate change, and other natural or manmade disasters, including power outages, fires, floods, earthquakes, hurricanes, storms, rising sea levels, explosions, cyber-based attacks, epidemics or pandemics, labor disputes, and acts of God wherever located around the world.
As a global company with a large international footprint, we are subject to increased risk of damage or disruption to us, our employees, facilities, partners, suppliers, distributors, resellers or customers due to, among other things, terrorist acts, conflicts (including as a result of geopolitical uncertainty and/or conflicts in the countries and/or regions where we operate, including the Middle East, Ukraine, the European Union and the Trans-Pacific region), severe weather conditions, the potential physical effects of climate change, and other natural or manmade disasters, including power outages, fires, floods, earthquakes, hurricanes, storms, rising sea levels, explosions, cyber-based attacks, epidemics or pandemics, labor disputes, and acts of God wherever located around the world.
Our operating margins and results of operations and cash flows may be adversely affected if we are unable to pass increases in the costs of our raw materials on to our customers or if other methods to offset our increased costs through supply chain management, contractual provisions and gains in operational efficiencies are not achieved.
Our operating margins and results of operations and cash flows may be adversely affected if we are unable 13 to pass increases in the costs of our raw materials on to our customers or if other methods to offset our increased costs through supply chain management, contractual provisions and gains in operational efficiencies are not achieved.
Failure to successfully execute and realize the expected financial benefits from any restructuring and strategic realignment and other cost-saving initiatives could adversely affect our business. 12 Adverse effects from our execution of any current or future restructuring and realignment activities could interfere with our realization of anticipated synergies, customer service improvements and cost savings from these strategic initiatives.
Failure to successfully execute and realize the expected financial benefits from any restructuring and strategic realignment and other cost-saving initiatives could adversely affect our business. Adverse effects from our execution of any current or future restructuring and realignment activities could interfere with our realization of anticipated synergies, customer service improvements and cost savings from these strategic initiatives.
In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted. Compliance with laws and any new laws or regulations may increase our operations costs or require significant capital expenditures.
In addition, we 18 cannot predict the nature, scope or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted. Compliance with laws and any new laws or regulations may increase our operations costs or require significant capital expenditures.
In addition, actual or alleged violations could damage our reputation or ability to do business. 18 Regulatory and Legal Risks Our operations are subject to a variety of complex and continually changing laws, regulations and policies, both internationally and domestically, which could adversely affect our business.
In addition, actual or alleged violations could damage our reputation or ability to do business. Regulatory and Legal Risks Our operations are subject to a variety of complex and continually changing laws, regulations and policies, both internationally and domestically, which could adversely affect our business.
For example, our chemical customers generally tend to reduce their spending on capital investments and operate their facilities at lower levels in a soft 11 economic environment, which reduces demand for our products and services.
For example, our chemical customers generally tend to reduce their spending on capital investments and operate their facilities at lower levels in a soft economic environment, which reduces demand for our products and services.
In 2024, our ability to meet customer delivery schedules for backlog is dependent on a number of factors including, but not limited to, sufficient manufacturing plant capacity, adequate supply channel access to the raw materials and other inventory required for production, an adequately trained and capable workforce, project engineering expertise for certain large projects and appropriate planning and scheduling of manufacturing resources.
In 2025, our ability to meet customer delivery schedules for backlog is dependent on a number of factors including, but not limited to, sufficient manufacturing plant capacity, adequate supply channel access to the raw materials and other inventory required for production, an adequately trained and capable workforce, project engineering expertise for certain large projects and appropriate planning and scheduling of manufacturing resources.
Certain of the foreign currencies to which we have exposure, such as the Venezuelan bolivar and Argentine peso, have undergone significant devaluation in the past, which reduce the value of our local monetary assets, reduce the U.S. dollar value of our local cash flow, generate local currency losses that may impact our ability to pay future dividends from our subsidiary to the parent company and potentially reduce the U.S. dollar value of future local net income.
Certain of the foreign currencies to which we have exposure, such as the Argentine peso, have undergone significant devaluation in the past, which reduce the value of our local monetary assets, reduce the U.S. dollar value of our local cash flow, generate local currency losses that may impact our ability to pay future dividends from our subsidiary to the parent company and potentially reduce the U.S. dollar value of future local net income.
The GDPR imposes additional obligations on companies regarding the 16 handling of personal data and provides certain individual privacy rights to persons whose data is stored.
The GDPR imposes additional obligations on companies regarding the handling of personal data and provides certain individual privacy rights to persons whose data is stored.
Most of our current and former properties are or have been used for industrial purposes, and some may require clean-up of historical contamination. We are currently conducting investigation and/or remediation activities at a number of locations where we have known environmental concerns. In addition, we have been identified as one of many PRPs at four Superfund sites.
Most of our current and former properties are or have been used for industrial purposes, and some may require clean-up of historical contamination. We are currently conducting investigation and/or remediation activities at a number of locations where we have known environmental concerns. In addition, we have been identified as one of many PRPs at five Superfund sites.
Based on our assessment of our def erred tax assets, we determined, based on projected future income and certain available tax planning strategies, that approximately $331 million of our deferred tax assets will more likely than not be realized in the future, and no valuation allowance is currently required for this portion of our deferred tax assets.
Based on our assessment of our def erred tax assets, we determined, based on projected future income and certain available tax planning strategies, that approximately $326 million of our deferred tax assets will more likely than not be realized in the future, and no valuation allowance is currently required for this portion of our deferred tax assets.
Throughout 2023, our operating costs were impacted by price inflation, including with respect to the cost of certain raw materials, commodities, freight and logistics, and we expect this to continue for the foreseeable future.
Throughout 2024, our operating costs were impacted by price inflation, including with respect to the cost of certain raw materials, commodities, freight and logistics, and we expect this to continue for the foreseeable future.
In recent years, the estimated fair value of our pump reporting unit has fluctuated, partially due to broad-based capital spending declines and heightened pricing pressures experienced in the oil and gas markets.
In past years, the estimated fair value of our pump reporting unit has fluctuated, partially due to broad-based capital spending declines and heightened pricing pressures experienced in the oil and gas markets.
The 22 adoption of new or revised accounting principles may require us to make changes to our systems, processes and internal controls, which could have a significant effect on our reported financial results and internal controls, cause unexpected financial reporting fluctuations, retroactively affect previously reported results or require us to make costly changes to our operational processes and accounting systems upon our following the adoption of these standards.
The adoption of new or revised accounting principles may require us to make changes to our systems, processes and internal controls, which could have a significant effect on our reported financial results and internal controls, cause unexpected financial reporting fluctuations, retroactively affect previously reported results or require us to make costly changes to our operational processes and accounting systems upon adopting these standards.
Such a loss of anticipated revenues could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our inability to deliver our backlog on time could affect our revenues, future sales and profitability and our relationships with customers. At December 31, 2023, our backlog was $2.7 billion.
Such a loss of anticipated revenues could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our inability to deliver our backlog on time could affect our revenues, future sales and profitability and our relationships with customers. At December 31, 2024, our backlog was $2.8 billion.
Increased public awareness and 14 concern regarding global climate change will result in more regulations designed to reduce GHG emissions.
Increased public awareness and concern regarding global climate change has and will result in more regulations designed to reduce GHG emissions.
We also have unionized employees or employee work councils i n Argentina, Australia, Austria, Brazil, Finland, France, Germany, India, Italy, Japan, Mexico, The Netherlands, South Africa, Spain, and Sweden.
We also have unionized employees or employee work councils in Argentina, Australia, Austria, Brazil, Finland, France, Germany, India, Italy, Japan, Mexico, The Netherlands, South Africa, Spain, and Sweden.
The potential for future such events, the national and international responses to such events or perceived threats to national security, and other actual or potential conflicts or wars, such as the Russia-Ukraine conflict, the Israel-Hamas war and ongoing instability in Syria and Egypt, have created many economic and political uncertainties.
The potential for future such events, the national and international responses to such events or perceived threats to national security, and other actual or potential conflicts or wars, such as the Russia-Ukraine conflict, the Israel-Hamas war and ongoing instability in Middle East, have created many economic and political uncertainties.
These factors, together with other key global events during 2023 (such as the ongoing conflicts and terrorist activity), may adversely impact the ability or willingness of non-U.S. companies to transact business in the U.S.
These factors, together with other key global events during 2024 (such as the ongoing conflicts and terrorist activity), may adversely impact the ability or willingness of non-U.S. companies to transact business in the United States.
Any failure to comply with applicable laws, regulations or policies in the U.S. or in any other country in which we operate could result in substantial fines and penalties, which could adversely affect our business.
Any failure to comply with applicable laws, regulations or policies in the United States or in any other country in which we operate could result in substantial fines and penalties, which could adversely affect our business.
Additionally, some of our customers have been attempting to reduce the number of vendors from which they purchase in order to reduce the size and diversity of their supply chain. To remain competitive, we must invest in manufacturing, technology, marketing, customer service and support and our distribution networks.
Additionally, some of our customers have been attempting to reduce the number of vendors from which they purchase in order to reduce the size and diversity of their supply chain. To remain competitive, we must invest in manufacturing, technology, such as artificial intelligence and machine learning, marketing, customer service and support and our distribution networks.
Risks Related to International Operations Economic, political and other risks associated with our international operations could adversely affect our business. A substantial portion of our operations is conducted and located outside the U.S. We have manufacturing, sales or service facilities in more than 50 countries and sell to customers in over 90 countries, i n addition to the U.S.
Risks Related to International Operations Economic, political and other risks associated with our international operations could adversely affect our business. A substantial portion of our operations is conducted and located outside the United States. We have manufacturing, sales or service facilities in approximately 50 countries and sell to customers in over 90 countries, i n addition to the United States.
Should we determine in the future that these assets will more likely than not be realized we will be required to record an additional valuation allowance in connection with these deferred tax assets and our operating results would be adversely affected in the period such determination is made. In addition, tax law changes could negatively impact our deferred tax assets.
Should we determine in the future that these assets are not more likely than not to be realized, we will be required to record an additional valuation allowance in connection with these deferred tax assets and our operating results would be adversely affected in the period such determination is made.
In addition, as a global company with headquarters and significant operations located in the U.S., actions against or by the U.S. may impact our business or employees.
In addition, as a global company with headquarters and significant operations located in the United States, actions against or by the United States may impact our business or employees.
Failure to successfully develop and introduce new products could limit our ability to grow and maintain our competitive position and adversely affect our financial condition, results of operations and cash flow. The success of new and improved products and services depends on their initial and continued acceptance by our customers.
Failure to successfully develop and introduce new products and integrate new technologies, including artificial intelligence and machine learning, could limit our ability to grow and maintain our competitive position and adversely affect our financial condition, results of operations and cash flow. The success of new and improved products and services depends on their initial and continued acceptance by our customers.
See Note 1 to our consolidated financial statements included in Item 8 of this Annual Report for further discussion of the termination of our Russian operations. 17 In order to manage our day-to-day operations, we must overcome cultural and language barriers and assimilate different business practices.
See Note 1, "Significant Accounting Policies and Accounting Developments" to our consolidated financial statements included in "Item 8. Financial Statements and Supplemental Data" of this Annual Report for further discussion of the termination of our Russian operations. In order to manage our day-to-day operations, we must overcome cultural and language barriers and assimilate different business practices.
To conduct our operations, we regularly move data across national borders and must comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the U.S. and elsewhere. For example, the E.U. has adopted the General Data Protection Regulation (the “GDPR”).
To conduct our operations, we regularly move data across national borders and must comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the United States and elsewhere. For example, the European Union has adopted the General Data Protection Regulation (the “GDPR”).
In addition, there have been recent changes to trade agreements, like the U.S. withdrawal from the Trans-Pacific Partnership and the replacement of the North American Free Trade Agreement with the United States-Mexico-Canada Agreement.
In addition, there have been recent changes to trade agreements, like the United States withdrawal from the Trans-Pacific Partnership and the replacement of the North American Free Trade Agreement with the United States-Mexico-Canada Agreement, and more changes may be forthcoming under the current U.S. administration.
Although we have concluded that there is no impairment on the goodwill associated with our pump reporting unit as of December 31, 2023, we will continue to monitor its performance and related market conditions for future indicators of potential impairment.
Although we have concluded that there is no impairment on the goodwill associated with our pump reporting unit as of December 31, 2024, we will continue to monitor its performance and related market conditions for future indicators of potential impairment. For additional information, see the discussion in "Item 7.
Difficulties or delays in the research, development, production and/or marketing of new products and services negatively impact our operating results and prevent us from recouping or realizing a return on the investments required to continue to bring these products and services to market.
Difficulties or delays in the research, development, production and/or marketing of new products and services or adoption of new technologies, such as artificial intelligence and machine learning, may negatively impact our operating results and prevent us from recouping or realizing a return on the investments required to continue to bring these products and services to market.
The primary currencies to which we have exposure are the Euro, British pound, Mexican peso, Brazilian real, Indian rupee, Japanese yen, Singapore dollar, Argentine peso, Canadian dollar, Australian dollar, Chinese yuan, Colombian peso, Chilean peso and South African rand.
The primary currencies to which we have exposure are the Euro, British pound, Mexican peso, Brazilian real, Indian rupee, Japanese yen, Singapore dollar, Argentine peso, Canadian dollar, Australian dollar, Chinese yuan, Colombian peso, Hungarian forint and Malaysian ringgit.
In addition, we may need new or additional financing in the future to expand our business or refinance our existing indebtedness. Our current senior credit facility matures on September 13, 2026 and our senior notes are due in 2030 and 2032. Additionally, we have drawn amounts under a term loan fund.
In addition, we may need new or additional financing in the future to expand our business or refinance our existing indebtedness. Our current Second Amended and Restated Credit Agreement matures on October 10, 2029 and our senior notes are due in 2030 and 2032. Additionally, we have drawn amounts under a term loan fund.
We maintain funded defined benefit pension plans that are either currently funded in accordance with local requirements in the U.S., Belgium, Canada, The Netherlands, Switzerland and the U.K., or above funded requirements in India and Mexico, and defined benefit plans that are not required to be funded and are not funded in Austria, France, Germany, Italy, Japan and Sweden.
We maintain funded defined benefit pension plans that are either currently funded in accordance with local requirements in the United States, Belgium, Canada, The Netherlands, Switzerland and the United Kingdom, or above funded requirements in India and Mexico, and defined benefit plans that are not required to be funded and are not funded in Austria, Saudi Arabia, Qatar, UAE, France, Germany, Italy and Japan.
Our inability to obtain raw materials at favorable prices may adversely affect our operating margins and results of operations. We purchase substantially all electric power and other raw materials we use in the manufacturing of our products from outside sources. The costs of these raw materials have been volatile historically and are influenced by factors that are outside our control.
We purchase substantially all electric power and other raw materials we use in the manufacturing of our products from outside sources. The costs of these raw materials have been volatile historically and are influenced by factors that are outside our control.
Reduced demand for our products and services from time to time results in the delay or cancellation of existing orders or leads to excess manufacturing capacity, which unfavorably impacts our absorption of fixed manufacturing costs. This reduced demand has in the past and may continue in the future to also erode average selling prices in our industry.
Reduced demand for our products and services from time to time results in the delay or cancellation of existing orders or leads to excess manufacturing capacity, which unfavorably impacts our absorption of fixed manufacturing costs.
Additionally, increasing tensions between the U.S. and China may result in further restrictions or actions by the U.S. government with respect to doing business in China or by the Chinese government with respect to business conducted by foreign entities in China, which could impact certain of our manufacturing operations, as well as supply for our raw materials and components.
Additionally, increasing tensions between the United States and China may result in further restrictions or actions by the U.S. government with respect to doing business in China or by the Chinese government with respect to business conducted by foreign entities in China, which could impact certain of our manufacturing operations, as well as supply for our raw materials and components. 17 Our future success will depend, in large part, on our ability to anticipate and effectively manage these and other risks associated with our international operations.
Our business may be adversely impacted by work stoppages and other labor matters. As of December 31, 2023, w e had approximat ely 16,000 empl oyees, of which approximately 4,600 were located in the U.S. Approximately 5% of our U.S. employees are represented by unions.
Our business may be adversely impacted by work stoppages and other labor matters. As of December 31, 2024, we had approximately 16,000 employees, of which approximately 4,700 were located in the United States. Approximately 3% of our U.S. employees are represented by unions.
Any of these factors, whether individually or in the aggregate, could have a material adverse effect on our customers and, in turn, our business, financial condition, results of operations and cash flows.
In addition, the liquidity and financial position of our customers impacts capital investment decisions and their ability to pay in full and/or on a timely basis. Any of these factors, whether individually or in the aggregate, could have a material adverse effect on our customers and, in turn, our business, financial condition, results of operations and cash flows.
Further, restructuring and realignment activities are a complex and time-consuming process that can place substantial demands on management, which could divert attention from other business priorities or disrupt our daily operations. Any of these failures could, in turn, materially adversely affect our business, financial condition, results of operations and cash flows, which could constrain our liquidity.
Further, restructuring and realignment activities are a complex and time-consuming process that can place substantial demands on management, which could divert attention from other business priorities or disrupt our daily operations.
Despite these favorable conditions, the general health of global credit and capital markets and our customers' ability to access such markets impacts investments in large capital projects, including necessary maintenance and upgrades. In addition, the liquidity and financial position of our customers impacts capital investment decisions and their ability to pay in full and/or on a timely basis.
Additionally, our customers sometimes delay capital investment and maintenance even during favorable conditions in their industries or markets. Despite these favorable conditions, the general health of global credit and capital markets and our customers' ability to access such markets impacts investments in large capital projects, including necessary maintenance and upgrades.
Compliance with existing, proposed and recently enacted laws and regulations can be costly; any failure to comply with these regulatory standards could subject us to legal and reputational risks, including proceedings against the Company by governmental entities or others, fines and penalties, damage to our reputation and credibility and could have a negative impact on our business and results of operations.
Compliance with GDPR, new state laws, and other current and future applicable U.S. and international privacy, data protection, cybersecurity, artificial intelligence and other data-related laws can be costly and time-consuming; any failure to comply with these regulatory standards could subject us to legal and reputational risks, including proceedings against the Company by governmental entities or others, fines and penalties, damage to our reputation and credibility and could have a negative impact on our business and results of operations.
If these measures are not successful or sustainable, we may undertake additional realignment and cost reduction efforts, which could result in future charges. Moreover, our ability to achieve our other strategic goals and business plans may be adversely affected, and we could experience business disruptions with customers and elsewhere if any restructuring and realignment efforts prove ineffective.
Moreover, our ability to achieve our other strategic goals and business plans may be adversely affected, and we could experience business disruptions with customers and elsewhere if any restructuring and realignment efforts prove ineffective.
Our future success will depend in part on the continued service of key executive officers and personnel. The loss of the services of any key individual could harm our business. Our future success also depends on our ability to recruit, retain and engage our personnel sufficiently, both to maintain our current business and to execute our strategic initiatives.
Our future success will depend in part on the continued service of key executive officers and personnel. The loss of the services of any key individual could harm our business.
Moreover, we may determine that it is in the best interest of our company and our shareholders to prioritize other business, social, governance or sustainable investments over the achievement of our current commitments based on economic, regulatory and social factors, business strategy or pressure from investors, activist groups or other stakeholders.
Moreover, we may determine that it is in the best interest of our company and our shareholders to prioritize other business, social, governance or sustainable investments over the achievement of our current commitments based on economic, regulatory and social factors, business strategy or pressure from investors, activist groups or other stakeholders. 14 If we are unable to meet these commitments, then, in addition to regulatory and legal risks related to compliance, we could incur adverse publicity and reaction from investors, customers or other stakeholders, which could adversely impact our reputation, which could in turn adversely impact our results of operations.
Similarly, certain countries, including the U.S., have adopted the Paris Climate Agreement and these and other existing international initiatives, such as the agreement resulting from the 2023 United Nations Climate Change Conference, or those under consideration may affect our operations.
Similarly, certain countries, have adopted the Paris Climate Agreement and these and other existing international initiatives, such as the agreement resulting from the 2023 United Nations Climate Change Conference, or those under consideration may affect our operations. As regulators and investors increasingly focus on climate change and sustainability issues, we are subject to new disclosure frameworks and regulatory reporting obligations.
Our outstanding indebtedness and the restrictive covenants in the agreements governing our indebtedness limit our operating and financial flexibility.
In addition, tax law changes could negatively impact our deferred tax assets. Our outstanding indebtedness and the restrictive covenants in the agreements governing our indebtedness limit our operating and financial flexibility.
We have devoted significant resources to remediate and improve our internal controls and to monitor the effectiveness of these remediated measures. There can be no assurance that these measures will ensure that we maintain at all times effective internal controls over our financial processes and reporting in the future.
There can be no assurance that these measures will ensure that we maintain at all times effective internal controls over our financial processes and reporting in the future. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.
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.
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.
Contributions to our pension plans reduce the availability of our cash flows to fund working capital, capital expenditures, R&D efforts and other general corporate purposes. 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 adversely affect our operating results.
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 adversely affect our operating results.
Our internal control over financial reporting has not always prevented or detected misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls or fraud. We have in the past discovered, and may in the future discover, areas of our internal controls that need improvement, including material weaknesses in internal controls.
The failure to maintain effective internal controls could impact the accuracy and timely reporting of our business and financial results. Our internal control over financial reporting has not always prevented or detected misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls or fraud.
Any of these results could continue to adversely affect our business, financial condition, results of operations and cash flows.
This reduced demand has in the past and may continue in the future to also erode average selling prices in our industry. 11 Any of these results could continue to adversely affect our business, financial condition, results of operations and cash flows.
We continually review our funding policy related to our U.S. pension plan in accordance with applicable laws and regulations. U.S. regulations have increased the minimum level of funding for U.S. pension plans in prior years, which has at times required significant contributions to our pension plans.
U.S. regulations have increased the minimum level of funding for U.S. pension plans in prior years, which has at times required significant contributions to our pension plans. Contributions to our pension plans reduce the availability of our cash flows to fund working capital, capital expenditures, R&D efforts and other general corporate purposes.
Implementation of new tariffs and changes to or uncertainties related to tariffs and trade agreements could adversely affect our business. The U.S. has implemented certain tariffs on steel and aluminum imported into the country. In response, certain foreign governments have implemented or reportedly considered implementing additional tariffs on U.S. goods.
Any of these factors could, however, materially adversely affect our international operations and, consequently, our financial condition, results of operations and cash flows. Implementation of new tariffs and changes to or uncertainties related to tariffs and trade agreements could adversely affect our business. The United States has implemented certain tariffs on steel and aluminum imported into the country.
In addition, the agreements governing our indebtedness impose certain operating and financial restrictions on us and somewhat limit management's discretion in operating our businesses.
Our inability to timely access capital on satisfactory terms, including as a result of market disruptions, could limit our ability to expand our business as desired and refinance our indebtedness. 21 In addition, the agreements governing our indebtedness impose certain operating and financial restrictions on us and somewhat limit management's discretion in operating our businesses.
This impact may be particularly prevalent where we maintain significant concentrations of specified investments, such as the U.K. equity and fixed income securities in our non-U.S. defined benefit plans. Changes in the expected return on plan assets assumption can result in significant changes in our pension expense and future funding requirements.
Changes in the expected return on plan assets assumption can result in significant changes in our pension expense and future funding requirements. We also continually monitor global pension regulations in the jurisdictions where we sponsor defined benefit plans as complex laws can present financial risks in the event of non-compliance.
A change in these principles can have a significant effect on our reported financial position and financial results.
Changes in accounting principles and guidance could result in unfavorable accounting charges or effects. We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States. A change in these principles can have a significant effect on our reported financial position and financial results.
For additional information regarding our current indebtedness refer to Note 12 to our consolidated financial statements included in Item 8 of this Annual Report. Our inability to timely access capital on satisfactory terms, including as a result of market disruptions, could limit our ability to expand our business as desired and refinance our indebtedness.
For additional information regarding our current indebtedness refer to Note 13, "Debt and Finance Lease Obligations," to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report.
For additional information, see the discussion in Item 7 of this Annual Report and under Note 1 to our consolidated financial statements included in Item 8 of this Annual Report. The failure to maintain effective Internal controls could impact the accuracy and timely reporting of our business and financial results.
Management's Discussion and Analysis of Financial Condition and Results of Operations," of this Annual Report and under Note 1, "Significant Accounting Policies and Accounting Developments," to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report.
Removed
The COVID-19 pandemic, and the volatile regional and global economic conditions stemming from the pandemic, precipitated or aggravated many of the factors described above, and a resurgence or development of new strains or variants of COVID-19, or other public health emergencies, could cause these factors to continue to adversely impact our operations and financial performance as well as those of many of our customers and suppliers.
Added
Any of these failures could, in turn, materially adversely affect our business, financial condition, results of operations and cash flows, which could constrain our liquidity. 12 If these measures are not successful or sustainable, we may undertake additional realignment and cost reduction efforts, which could result in future charges.
Removed
For further discussion of the risks presented by the pandemic, see the discussion below under the heading “The COVID-19 pandemic adversely impacted our operations and financial performance, and a resurgence or development of new strains or variants of COVID-19, or other public health emergencies, could have a material adverse impact on our business, results of operation, financial condition and liquidity, the nature and extent of which is highly uncertain.” Additionally, our customers sometimes delay capital investment and maintenance even during favorable conditions in their industries or markets.
Added
In addition, the continued creation, development and advancement of new technologies such as artificial intelligence, machine learning, quantum computing, data analytics, 3-D printing, robotics, sensor technology, data storage, neural networks, and augmented reality, amongst others, as well as other technologies in the future that are not foreseen today, continue to transform the Company’s processes, products and services.
Removed
The COVID-19 pandemic adversely impacted our operations and financial performance, and a resurgence or development of new strains or variants of COVID-19, or other public health emergencies, could have a material adverse impact on our business, results of operation, financial condition and liquidity, the nature and extent of which is highly uncertain.
Added
In order to remain competitive, the Company will need to stay abreast of such technologies, require its employees to continue to learn and adapt to new technologies and be able to integrate them into its current and future business models, products, services and processes and also guard against disruptions to its business by existing and new competitors using such technologies.
Removed
Our operations expose us to risks associated with public health emergencies, such as outbreaks of epidemics, pandemics, and contagious diseases, including COVID-19.
Added
The Company’s strategy, operating model and new product innovation pipeline all have important technological elements and many of the Company’s products and services are based on technological advances. In addition, the Company will need to compete for talent that is familiar with such technologies, including upskilling its workforce.
Removed
These effects had an adverse impact on our operations and financial performance and the operations and financial performance of many of our customers and suppliers. Our operations have generally stabilized since the peak of the COVID-19 pandemic. In May 2023, the World Health Organization declared an end to COVID-19 as a public health emergency.
Added
There can be no assurance that the Company will continue to compete effectively with its industry peers as new technology evolves, which could result in a material adverse effect on the Company's business and results of operations. Our inability to obtain raw materials at favorable prices may adversely affect our operating margins and results of operations.
Removed
However, a resurgence or development of new strains of COVID-19 or other public health emergencies could result in unpredictable responses by authorities around the world which could negatively impact our global operations, customers and suppliers.
Added
The rapid evolution and increased availability of artificial intelligence may intensify cybersecurity risks by making targeted attacks more sophisticated and cybersecurity incidents more difficult to detect, contain, and mitigate.
Removed
Any future public health emergencies could result in disruptions to our manufacturing operations, including higher rates of employee absenteeism, and supply chain, which could negatively impact our ability to meet customer demand.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWith respect to incident response, we have adopted a Cybersecurity Incident Response Policy (the “CIRP”), which provides governance and guidance in responding to cybersecurity incidents. The CIRP sets out a coordinated approach to investigating, containing, documenting and mitigating incidents, including reporting findings and keeping senior management and other key stakeholders informed and involved as appropriate.
Biggest changeWe have adopted a Cybersecurity Incident Response Policy (the “CIRP”), which provides governance and guidance in responding to cybersecurity incidents. The CIRP sets out a coordinated approach to investigating, containing, documenting and mitigating incidents, including reporting findings and keeping senior management and other key stakeholders informed and involved as appropriate. In general, the CIRP aligns with the ISO 27001 standard.
While we have not experienced any material cybersecurity incidents, there can be no guarantee that we will not be the subject of future successful incidents. For additional information on cybersecurity risks we face, see “Item 1A. Risk Factors”, of this Annual Report, which should be read in conjunction with the foregoing information.
While we have not experienced any material cybersecurity incidents, there can be no guarantee that we will not be the subject of future incidents. For additional information on cybersecurity risks we face, see “Item 1A. Risk Factors”, of this Annual Report, which should be read in conjunction with the foregoing information.
The Finance and Risk Committee receives regular reports from management, including our Chief Information Officer (CIO), and reports to the Board of Directors at least annually on data protection and cybersecurity matters and reviews the measures implemented by the Company to identify and mitigate data protection and cybersecurity risks.
The Technology, Risk and Finance Committee receives regular reports from management, including our Chief Information Officer (CIO), and reports to the Board of Directors at least annually on data protection and cybersecurity matters and reviews the measures implemented by the Company to identify and mitigate data protection and cybersecurity risks.
ITEM 1C. CYBERSECURITY Governance Our Board of Directors has delegated the primary responsibility to oversee cybersecurity matters to the Finance and Risk Committee of our Board of Directors.
ITEM 1C. CYBERSECURITY Governance Our Board of Directors has delegated the primary responsibility to oversee cybersecurity matters to the Technology, Risk and Finance Committee of our Board of Directors.
The CIO also attends regular meetings of the Finance and Risk Committee to report information on material risks from cybersecurity threats.
The CIO also attends regular meetings of the Technology, Risk and Finance Committee to report information on material risks from cybersecurity threats.
In addition to regularly scheduled Finance and Risk Committee reviews, we have in place processes and protocols by which certain cybersecurity incidents are reported immediately to the Company’s executive leadership team, and subsequently thereafter, as appropriate to the Finance and Risk Committee.
In addition to regularly scheduled Technology, Risk and Finance Committee reviews, we have in place processes and protocols by which certain cybersecurity incidents are reported 23 immediately to the Company’s executive leadership team, and subsequently thereafter, as appropriate to the Technology, Risk and Finance Committee.
Reporting to our Chief Information Officer and Director of Cybersecurity are a number of experienced information security specialists responsible for various parts of our business, each of whom is supported by a team of trained cybersecurity 23 professionals.
Reporting to our CIO and Director of Cybersecurity are a number of experienced information security specialists responsible for various parts of our business, each of whom is supported by a team of trained cybersecurity professionals.
In general, the CIRP aligns with the ISO 27001 standard. The CIRP applies to all Company personnel (including third-party contractors, vendors and partners) that perform functions or services that require access to secure Company information, and to all devices and network services that are owned or managed by the Company.
The CIRP applies to all Company personnel (including third-party contractors, vendors and partners) that perform functions or services that require access to secure Company information, and to all devices and network services that are owned or managed by the Company.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe we will be able to extend leases on our various facilities as necessary, as they expire. We believe that our current facilities are adequate to meet the requirements of our present and foreseeable future operations. We continue to review our capacity requirements as part of our strategy to optimize our global manufacturing efficiency.
Biggest changeWe believe we can extend any potential expiring lease as necessary. We believe that our current facilities are adequate to meet the requirements of our present and foreseeable future operations. We continue to review our capacity requirements as part of our strategy to optimize our global manufacturing efficiency.
We have the option to renew the current lease for two additional five-year periods. We currently occupy approximately 130,000 square feet at this facility. Our major manufacturing facilities (those with 50,000 or more square feet of manufacturing capacity) operating at December 31, 2023 are presented in the table below. See "Item 1.
We have the option to renew the current lease for two additional five-year periods. We currently occupy approximately 130,000 square feet at this facility. Our major manufacturing facilities (those with 50,000 or more square feet of manufacturing capacity) operating at December 31, 2024 are presented in the table below. See "Item 1.
Business" in this Annual Report for further information with respect to all of our manufacturing and operational facilities, including QRCs. 24 Number of Facilities Approximate Aggregate Square Footage FPD U.S. 7 1,171,000 Non-U.S. 19 3,651,000 FCD U.S. 5 925,000 Non-U.S. 10 1,495,000 We own the majority of our manufacturing facilities, and those manufacturing facilities we do not own are leased.
Business" in this Annual Report for further information with respect to all of our manufacturing and operational facilities, including QRCs. 24 Number of Facilities Approximate Aggregate Square Footage FPD U.S. 7 1,171,000 Non-U.S. 19 3,975,000 FCD U.S. 6 1,121,000 Non-U.S. 11 1,151,000 We own the majority of our manufacturing facilities, and those manufacturing facilities we do not own are leased.
See Note 4 to our consolidated financial statements included in Item 8 of this Annual Report for additional information regarding our lease obligations.
See Note 5, "Leases," to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report for additional information regarding our lease obligations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS We are party to the legal proceedings that are described in Note 15 to our consolidated financial statements included in Item 8 of this Annual Report, and such disclosure is incorporated by reference into this Item 3.
Biggest changeITEM 3. LEGAL PROCEEDINGS We are party to the legal proceedings that are described in Note 16, "Legal Matters and Contingencies," to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report, and such disclosure is incorporated by reference into this "Item 3.
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.
Legal Proceedings." In addition to the foregoing, we and our subsidiaries are named defendants in certain other 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.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 25 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. [Reserved] 28 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 48 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 25 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. [Reserved] 28 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 49 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities During the quarter ended December 31, 2023, we had no repurchases of our common stock shares as part of publicly announced plans. As of December 31, 2023, we had $96.1 million of remaining capacity under our current share 25 repurchase program.
Biggest changeIssuer Purchases of Equity Securities 25 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 December 31, 2024, we had no repurchases of our common stock shares.
Stock Performance Graph The following graph depicts the most recent five-year performance of our common stock with the S&P 500 Index and S&P 500 Industrials. The graph assumes an investment of $100 on December 31, 2018, and assumes the reinvestment of any dividends over the following five years.
Stock Performance Graph The following graph depicts the most recent five-year performance of our common stock with the S&P 500 Index and S&P 500 Industrials. The graph assumes an investment of $100 on December 31, 2019, and assumes the reinvestment of any dividends over the following five years.
We have historically paid quarterly dividends based on a d ividend date-of-record in the last month of each quarter with the dividend paid the following month. Any subsequent dividends will be reviewed by our Board of Directors and declared in its discretion.
We have his torically paid quarterly dividends based on a d ividend date-of-record in the last month of each quarter with the dividend paid the following month. Any subsequent dividends will be reviewed by our Board of Directors and declared in its discretion.
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. (4) Note 17 to our consolidated financial statements included in Item 8 of this Annual Report provides additional information regarding our share repurchase activity.
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. (4) Note 18, "Shareholders' Equity," to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report provides additional information regarding our share repurchase activity.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "FLS" and our CUSIP number is 34354P105. O n February 14, 2024, our records showed 838 share holders of record.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "FLS". On February 21, 2025, our records showed 798 shareholders of record.
The following table sets forth the repurchase data for each of the three months during the quarter ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan (3)(4) Approximate Dollar Value That May Yet Be Purchased Under the Plan (In millions) October 1 - 31 192 (1) $ 38.81 — $ 96.1 November 1 - 30 1,705 (2) 37.10 — 96.1 December 1 - 31 2,328 (1) 40.56 — 96.1 Total 4,225 $ 39.09 — _______________________________________ (1) Shares tendered by employees to satisfy minimum tax withholding amounts for Restricted Shares.
The following table sets forth the repurchase data for each of the three months during the quarter ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan (3)(4) Approximate Dollar Value That May Yet Be Purchased Under the Plan (In millions) October 1 - 31 76 (1) $ 53.69 — $ 279.9 November 1 - 30 1,893 (2) 59.33 — 279.9 December 1 - 31 1,874 (1) 60.84 — 279.9 Total 3,843 $ 59.95 — _______________________________________ (1) Shares tendered by employees to satisfy minimum tax withholding amounts for Restricted Shares.
(2) Shares purchased at a price of $37.10 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.
(2) Includes 263 shares that were tendered by employees to satisfy minimum tax withholding amounts for Restricted Shares at an average price per share of $59.88 and 1,630 shares purchased at a price of $59.24 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.
(3) On November 13, 2014, our Board of Directors approved a $500.0 million share repurchase authorization. Effective February 19, 2024, the Board of Directors authorized an increase in our total remaining capacity in the share repurchase program to $300.0 million.
(3) 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.
The stock price performance shown in the graph is not necessarily indicative of future price performance. 26 Base Period December 31, Company/Index 2018 2019 2020 2021 2022 2023 Flowserve Corporation $100.00 $133.67 $101.76 $86.40 $89.05 $122.28 S&P 500 Index 100.00 131.49 155.66 200.31 164.00 207.06 S&P 500 Industrials 100.00 129.32 143.62 173.92 164.33 194.03 27
The stock price performance shown in the graph is not necessarily indicative of future price performance. 26 Base Period December 31, Company/Index 2019 2020 2021 2022 2023 2024 Flowserve Corporation $100.00 $76.13 $64.63 $66.62 $91.48 $129.79 S&P 500 Index 100.00 118.39 152.34 124.73 157.48 196.85 S&P 500 Industrials 100.00 111.05 134.48 127.07 150.04 176.00 27
Removed
Effective February 19, 2024, the Board of Directors authorized an increase in our total remaining capacity in the share repurchase program to $300.0 million.
Added
As of December 31, 2024, we had $279.9 million of remaining capacity under our current share repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe increase in SG& A was primarily due to increased charges of $11.8 million related to our Realignment Programs, higher broad-based annual incentive compensation and $7.3 million of expense related to the terminated Velan acquisition, partially offset by a $1.7 million charge taken in 2022 related to our financial exposure in 38 Russia that did not recur and a discrete asset write-down of $3.0 million in 2022 that did not recur as compared to the same period in 2022.
Biggest changeThe increase in SG& A was primarily due to increased sales volume, $9.9 million of acquisition and integration related expense related to the MOGAS acquisition, $6.0 million increase in bad debt expense, $5.6 million increase in research and development costs, $1.0 million in amortization of step-up in value of acquisition related intangible assets associated with the MOGAS acquisition, and $0.4 million in one-time U.S. pension plan transition benefit expense, partially offset by $8.5 million of expense related to the terminated Velan acquisition incurred in 2023 that did not recur, decreased charges of $8.3 million related to our 2023 and CORE Realignment Programs and lower broad-based annual incentive compensation as compared to the same period in 2023. 38 The loss on sale of business increased by $13.0 million from zero in 2023 to $13.0 million in 2024 due to the divestiture of NAF AB, a previously wholly owned subsidiary and control valves business within our FCD segment, including the NAF AB facility located in Linkoping, Sweden.
Our segments also benefit from our global footprint, our economies of scale in reducing administrative and overhead costs to serve customers more cost effectively and shared leadership for operational support functions, such as research and development, marketing and supply chain.
Our segments also benefit from our global footprint, our economies of scale in reducing administrative and overhead costs to serve customers more cost effectively and our shared leadership for operational support functions, such as research and development, marketing and supply chain.
Financing On September 13, 2021, we amended and restated our credit agreement (the "Amended and Restated Credit Agreement") under our Senior Credit Facility ("Credit Facility") with Bank of America, N.A. and the other lenders to provide greater flexibility in maintaining adequate liquidity and access to available borrowings.
Financing On September 13, 2021, we amended and restated our credit agreement (the "Senior Credit Agreement") under our Senior Credit Facility ("Credit Facility") with Bank of America, N.A. and the other lenders to provide greater flexibility in maintaining adequate liquidity and access to available borrowings (the "Amended and Restated Credit Agreement").
Our operations are conducted through two business segments that are referenced throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"): • FPD designs and manufactures custom, highly-engineered pumps, pre-configured industrial pumps, pump systems, mechanical seals, auxiliary systems and replacement parts and related services; and • 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 operations are conducted through two business segments that are referenced throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"): • FPD designs, manufactures, pretests, distributes and services highly custom engineered pumps, pre-configured industrial pumps, pump systems, mechanical seals, auxiliary systems and replacement parts and related services; and • 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.
Subsequently, on February 3, 2023, we entered into an amendment to the Credit Facility (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 Credit Facility) threshold from $250 million to $200 million and (iii) extended compliance dates for certain financial covenants.
On February 3, 2023, we entered into an amendment to the Credit Facility (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 Credit Facility) threshold from $250 million to $200 million and (iii) extended compliance dates for certain financial covenants.
The most significant estimates made by management include: timing and amount of revenue recognition; deferred taxes, tax valuation allowances and tax reserves; reserves for contingent loss; pension and postretirement benefits; and valuation of goodwill, indefinite-lived intangible assets and other long-lived assets. The significant estimates are reviewed at least annually if not quarterly by management.
The most significant estimates made by management include: timing and amount of revenue recognition; deferred taxes, tax valuation allowances and tax reserves; 45 reserves for contingent loss; pension and postretirement benefits; and valuation of goodwill, indefinite-lived intangible assets and other long-lived assets. The significant estimates are reviewed at least annually if not quarterly by management.
The amount of cash generated or consumed by working capital is dependent on our level of 31 revenues, customer cash advances, backlog, customer-driven delays and other factors. We will seek to improve our working capital utilization, with a particular focus on improving the management of accounts receivable and inventory.
The amount of cash generated or consumed by working capital is dependent on our level of revenues, customer cash advances, backlog, customer-driven delays and other factors. We will seek to improve our working capital utilization, with a particular focus on improving the management of accounts receivable and inventory.
We evaluate the funded status of each retirement plan using current assumptions and determine the appropriate funding level considering applicable regulatory requirements, tax deductibility, reporting considerations, cash flow requirements and other factors. We discuss our funding assumptions with the Finance and Risk Committee of our Board of Directors.
We evaluate the funded status of each retirement plan using current assumptions and determine the appropriate funding level considering applicable regulatory requirements, tax deductibility, reporting considerations, cash flow requirements and other factors. We discuss our funding assumptions with the Technology, Risk and Finance Committee of our Board of Directors.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis is provided to increase the understanding of, and should be read in conjunction with, the accompanying consolidated financial statements and notes. See “Item 1A.
ITEM 7. 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 is provided to increase the understanding of, and should be read in conjunction with, the accompanying consolidated financial statements and notes. See “Item 1A.
Risk Factors” and the section titled “Forward-Looking Information is Subject to Risk and Uncertainty” included in this Annual Report on Form 10-K for the year ended December 31, 2023 ("Annual Report") for a discussion of the risks, uncertainties and assumptions associated with these statements. Unless otherwise noted, all amounts discussed herein are consolidated.
Risk Factors” and the section titled “Forward-Looking Information is Subject to Risk and Uncertainty” included in this Annual Report on Form 10-K for the year ended December 31, 2024 ("Annual Report") for a discussion of the risks, uncertainties and assumptions associated with these statements. Unless otherwise noted, all amounts discussed herein are consolidated.
The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign tax authorities, which often result in proposed assessments. Significant judgment is required in determining income tax provisions and evaluating tax positions. We establish reserves for open tax years for uncertain tax positions that may be subject to challenge by 45 various tax authorities.
The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign tax authorities, which often result in proposed assessments. Significant judgment is required in determining income tax provisions and evaluating 46 tax positions. We establish reserves for open tax years for uncertain tax positions that may be subject to challenge by various tax authorities.
FPD includes longer lead time, highly-engineered pump products and mechanical seals that are generally manufactured within shorter lead times. FPD also manufactures replacement parts and related equipment and provides aftermarket services. FPD pri marily operates in the oil and gas, chemical, power generation, water management and general industries.
FPD includes highly engineered pump products with longer lead times and mechanical seals that are generally manufactured within shorter lead times. FPD also manufactures replacement parts and related equipment and provides aftermarket services. FPD pri marily operates in the oil and gas, power generation, chemical, water management and general industries.
In light of the uncertainties and variables inherent in the long-term projection of the total asbestos liability, as part of our ongoing review of asbestos claims, each year we will reassess the projected liability of unasserted asbestos claims to be filed through 2053, and we will continually reassess the time horizon over which a reasonable estimate of unasserted claims can be projected.
In light of the uncertainties and variables inherent in the long-term projection of the total asbestos liability, as part of our ongoing review of asbestos claims, each year we will reassess the projected liability of unasserted asbestos claims to be filed through 2054, and we will continually reassess the time horizon over which a reasonable estimate of unasserted claims can be projected.
The aftermarket business, which is primarily served by our network of 156 QRCs located around the globe, some of which are shared by our two business segments, provides a variety of service offerings for our customers including spare parts, service solutions, product life cycle solutions and other value-added services.
The aftermarket business, which is primarily served by our network of 157 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.
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 enable customers to achieve their goals.
Our product portfolio of pumps, valves, seals, automation and aftermarket services supports global infrastructure industries, including oil and gas, chemical, power generation including nuclear plants and water management, as well as general industrial markets where our products and services enable customers to achieve their goals.
The net currency related change was primarily due to the foreign currency exchange rate movements in the Euro, Argentinian peso, Hungarian forint and Mexican peso in relation to the U.S. dollar during the year ended December 31, 2023, as compared with the same period in 2022.
The net currency related change was primarily due to the foreign currency exchange rate movements in the Euro, Argentinian peso, Hungarian forint and Mexican peso in relation to the U.S. dollar during the year ended December 31, 2024, as compared with the same period in 2023.
We have estimated that the liability for pending and future claims not yet asserted, and which are probable and estimable, could be experienced through 2053, which represents the expected end of our asbestos liability exposure with no further ongoing claims expected beyond that date.
We have estimated that the liability for pending and future claims not yet asserted, and which are probable and estimable, could be experienced through 2054, which represents the expected end of our asbestos liability exposure with no further ongoing claims expected beyond that date.
We fund the plans as benefits are paid, such that the plans hold no assets in any period presented. Accordingly, we have no investment strategy or targeted allocations for plan assets. The benefits under the plans are not available to new employees or most existing employees.
We fund the plans as benefits are paid, such that the plans hold no assets in any period presented. Accordingly, we have no investment strategy or targeted allocations for these plans. The benefits under the plans are not available to new employees or most existing employees.
The assumed ranges for the annual rates of increase in health care costs were 7.00% for 2023, 7.25% for 2022 and 7.50% for 2021, with a gradual decrease to 5.00% for 2032 and future years. If actual costs are higher than those assumed, this will likely put modest upward pressure on our expense for retiree health care.
The assumed ranges for the annual rates of increase in health care costs were 7.00% for 2024, 7.00% for 2023 and 7.25% for 2022, with a gradual decrease to 5.00% for 2032 and future years. If actual costs are higher than those assumed, this will likely put modest upward pressure on our expense for retiree health care.
The outlook for the oil and gas industry is heavily dependent on the overall macroeconomic environment, including fuel demand, demand growth from both mature markets and developing geographies as well as changes in the regulatory environment. We currently expect continued growth in our business, including increased investment related to energy security and decarbonization efforts in 2024.
The outlook for the oil and gas industry is dependent on the overall macroeconomic environment, including fuel demand, demand growth from both mature markets and developing geographies as well as changes in the regulatory environment. We currently expect continued growth in our business, including increased investment related to energy security and decarbonization efforts in 2025.
Customer repair and maintenance spending improved during 2023 supported by strong asset utilization, while larger project activity and short cycle investments continued in order to support global demand.
Customer repair and maintenance spending improved during 2024 supported by strong asset utilization, while larger project activity and short cycle investments continued in order to support global demand.
A discussion of changes in the Company’s liquidity and capital resources for the year ended December 31, 2022 and 2021 can be found in Part II, “Item 7.
A discussion of changes in the Company’s liquidity and capital resources for the year ended December 31, 2023 and 2022 can be found in Part II, “Item 7.
In 2023, energy security concerns drove continued investment in the power generation industry, including nuclear new build and life extensions as well as traditional thermal power sources.
In 2024, energy security concerns drove continued investment in the power generation industry, including nuclear new build and life extensions as well as traditional thermal power sources.
OUR RESULTS OF OPERATIONS The following is the discussion and analysis of changes in the financial condition and results of operations for fiscal year December 31, 2023 compared to fiscal year 2022.
OUR RESULTS OF OPERATIONS The following is the discussion and analysis of changes in the financial condition and results of operations for fiscal year December 31, 2024 compared to fiscal year 2023.
General industries also include sales to distributors, whose end customers operate in the industries we primarily serve. General industry activity levels increased in 2023 for the second consecutive year, primarily due to customers' improved repair and maintenance budgets. 29 The outlook for this group of industries is heavily dependent upon the condition of global economies and consumer confidence levels.
General industries also include sales to distributors, whose end customers operate in the industries we primarily serve. General industry activity levels increased in 2024 for the second consecutive year, primarily due to customers' increased repair and maintenance budgets. The outlook for this group of industries is heavily dependent upon the condition of global economies and consumer confidence levels.
Postretirement medical plans: Effect on Benefit Obligation (0.3) 0.3 Effect of Changes in the Expected Return on Assets and Constancy of Other Assumptions: 0.5% Increase 0.5% Decrease (Amounts in millions) U.S. defined benefit pension plan: Effect on net pension expense $ (2.0) $ 2.0 Non-U.S. defined benefit pension plans: Effect on net pension expense (0.8) 0.8 As discussed below, accounting principles generally accepted in the U.S.
Postretirement medical plans: Effect on Benefit Obligation (0.3) 0.3 44 Effect of Changes in the Expected Return on Assets and Constancy of Other Assumptions: 0.5% Increase 0.5% Decrease (Amounts in millions) U.S. defined benefit pension plan: Effect on net pension expense $ (1.9) $ 1.9 Non-U.S. defined benefit pension plans: Effect on net pension expense (0.8) 0.8 As discussed below, accounting principles generally accepted in the U.S.
Natural gas-fired combined cycle (“NGCC”) plants have increased their share of the energy mix, driven by market prices for gas remaining low and stable (partially due to the increasing global availability of LNG), low capital expenditures, and the ability of NGCC to stabilize unpredictable renewable sources.
Natural gas-fired combined cycle (“NGCC”) plants have increased their share of the energy mix, driven by market prices for gas remaining low and stable (partially due to the increasing global availability of LNG), low capital expenditures, and the ability of NGCC to stabilize unpredictable renewable sources provide base-load power.
See discussion of our accounting for and assumptions related to pension and postretirement benefits in the “Our Critical Accounting Estimates” section of this MD&A. In 2023, the service cost component of the pension expense for our defined benefit pension plans included in operating income was $26.0 million compared to $30.7 million in 2022.
See discussion of our accounting for and assumptions related to pension and postretirement benefits in the “Our Critical Accounting Estimates” section of this MD&A. In 2024, the service cost component of the pension expense for our defined benefit pension plans included in operating income was $30.3 million compared to $26.0 million in 2023.
The following are assumptions related to our defined benefit pension plans as of December 31, 2023: U.S. Plan Non-U.S.
The following are assumptions related to our defined benefit pension plans as of December 31, 2024: U.S. Plan Non-U.S.
General Industries General industries represented, in the aggregate, approximately 26% and 22% of our bookings in 2023 and 2022, respectively. General industries comprise a variety of different businesses, including mining and ore processing, pulp and paper, food and beverage and other smaller applications, none of which individually represented more than 5% of total bookings in 2023 and 2022.
General Industries General industries represented, in the aggregate, approximately 26% of our bookings in both 2024 and 2023, respectively. General industries comprise a variety of different businesses, including mining and ore processing, pulp and paper, food and beverage and other smaller applications, none of which individually represented more than 5% of total bookings in 2024 and 2023.
As of December 31, 2023 direct benefits paid by the U.S. pension plan were $2.8 million. We continue to maintain an asset allocation consistent with our strategy to maximize total return, while reducing portfolio risks through asset class diversification.
As of December 31, 2024 direct benefits paid by the U.S. pension plan were $1.8 million. We continue to maintain an asset allocation consistent with our strategy to maximize total return, while reducing portfolio risks through asset class diversification.
Additionally, we have recorded other net deferred tax assets of $202.6 million, which relate to net operating losses, tax credits and other deductible temporary differences that are available to reduce taxable income in future periods, most of which do not have a definite expiration.
Additionally, we have recorded other net deferred tax assets of $206.7 million, which relate to net operating losses, tax credits and other deductible temporary differences that are available to reduce taxable income in future periods, most of which do not have a definite expiration.
During 2023, we made $2.0 million cash contributions to our U.S. pension plan, compared to no cash contributions in 2022. At December 31, 2023 and 2022, as a result of the values of the plan’s assets and our contributions to the plan, our U.S. pension plan was fully-funded as defined by applicable law.
During 2024, we made $20.0 million cash contributions to our U.S. pension plan, compared to $2.0 million cash contributions in 2023. At December 31, 2024 and 2023, as a result of the values of the plan’s assets and our contributions to the plan, our U.S. pension plan was fully-funded as defined by applicable law.
PENSION AND POSTRETIREMENT BENEFITS OBLIGATIONS Plan Descriptions We and certain of our s ubsidiaries have defined benefit pension plans and defined contribution plans for full-time and part-time employees. Approximately 67% of total defined benefit pension plan assets and approximately 58% of defined benefit pension obligations are related to the U.S. qualified plan as of December 31, 2023.
PENSION AND POSTRETIREMENT BENEFITS OBLIGATIONS Plan Descriptions We and certain of our s ubsidiaries have defined benefit pension plans and defined contribution plans for full-time and part-time employees. Approximately 68% of total defined benefit pension plan assets and approximately 58% of defined benefit pension obligations are related to the U.S. qualified plan as of December 31, 2024.
We did not record a material impairment for goodwill, indefinite-lived intangible assets or long-lived assets in 2023, 2022 or 2021.
We did not record a material impairment for goodwill, indefinite-lived intangible assets or long-lived assets in 2024, 2023 or 2022.
Bookings and Backlog 2023 2022 2021 (Amounts in millions) Bookings $ 4,271.8 $ 4,447.5 $ 3,774.4 Backlog (at period end) 2,695.1 2,735.3 2,003.6 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 and Backlog 2024 2023 2022 (Amounts in millions) Bookings $ 4,660.8 $ 4,271.8 $ 4,447.5 Backlog (at period end) 2,789.6 2,695.1 2,735.3 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.
Benefits under our defined benefit pension plans are based primarily on participants’ compensation and years of credited service. We sponsor defined benefit postretirement medical plans covering certain current retirees and a limited number of future retirees in the U.S. These plans provide for medical and dental benefits and are administered through insurance companies.
Benefits under our defined benefit pension plans are based primarily on participants’ compensation and years of credited service. 43 We sponsor defined benefit postretirement medical plans covering certain current retirees and a limited number of future retirees in the United States. These plans provide for medical and dental benefits and are administered through insurance companies.
Through our manufacturing platform and global network of QRCs, we offer a broad array of aftermarket equipment services, such as installation, advanced diagnostics and turnkey maintenance programs. As of December 31, 2023, we have approximately 16,000 employees (“associates”) globally and a footprint of manufacturing facilities and QRCs in more than 50 countries.
Through our manufacturing platform and global network of QRCs, we offer a broad array of aftermarket equipment services, such as installation, advanced diagnostics and turnkey maintenance programs. As of December 31, 2024, we have approximately 16,000 employees globally and a footprint of manufacturing facilities and QRCs in approximately 50 countries.
The non-service cost portion of net pension expense (e.g., interest cost, actuarial gains and losses and expected return on plan assets) for our defined benefit pensi on plans included in other income (expense), net was $4.5 million in 2023, compared to $(4.2) million in 2022.
The non-service cost portion of net pension expense (e.g., interest cost, actuarial gains and losses and expected return on plan assets) for our defined benefit pensi on plans included in other income (expense), net was $6.0 million in 2024, compared to $4.5 million in 2023.
To the extent that the expected tax outcome of these matters changes, such changes in estimate will impact the income tax provision in the period in which such determination is made. For a discussion related to deferred taxes, tax valuation allowances and tax reserves refer to Note 18 included in Item 8 of this Annual Report.
To the extent that the expected tax outcome of these matters changes, such changes in estimate will impact the income tax provision in the period in which such determination is made. For a discussion related to deferred taxes, tax valuation allowances and tax reserves refer to Note 19, "Income Taxes," included in "Item 8.
We believe our global presence and our localized aftermarket capabilities are well-positioned to serve the potential growth opportunities in this industry. Power Generation The power generation industry represented approximately 11% and 12% of our bookings in 2023 and 2022, respectively.
We believe our global presence and our localized aftermarket capabilities are well-positioned to serve the potential growth opportunities in this industry. Power Generation The power generation industry represented approximately 13% and 11% of our bookings in 2024 and 2023, respectively.
We currently anticipate that our contributions to our non-U.S. pension plans will be approximately $2 million in 2024, excluding direct benefits paid. We have no obligation to make contributions to our U.S. pension plans in 2024, but have authorization for contributions up to $20 million.
We currently anticipate that our contributions to our non-U.S. pension plans will be approximately $2 million in 2025, excluding direct benefits paid. We have no obligation to make contributions to our U.S. pension plans in 2025, but have authorization for contributions up to $10 million.
We have no obligation to make contributions to our U.S. pension plans in 2024, but have authorization for contributions up to $20 million. We expect to contribute approximately $2 million to our non-U.S. pension pl ans in 2024, excluding direct benefits paid.
We have no obligation to make contributions to our U.S. pension plans in 2025, but have authorization for contributions up to $10 million. We expect to contribute approximately $2 million to our non-U.S. pension pl ans in 2025, excluding direct benefits paid.
Customers' repair and maintenance budgets improved in 2023 and 2022 where bookings levels returned to roughly pre-pandemic levels. The outlook for the chemical industry remains heavily dependent on global economic conditions. As global economies and unemployment conditions improve, a rise in consumer spending should follow.
Customers' repair and maintenance budgets increased in 2024 and 2023, and bookings levels returned to roughly pre-pandemic levels. The outlook for the chemical industry remains heavily dependent on global economic conditions. As global economies and unemployment conditions improve, a rise in consumer spending should follow.
The Benefit Obligation for our defined benefit postretirement medical plans was $12.4 million and $13.4 million as of December 31, 2023 and 2022, respectively. Accrual Accounting and Significant Assumptions We account for pension benefits using the accrual method, recognizing pension expense before the payment of benefits to retirees.
The Benefit Obligation for our defined benefit postretirement medical plans was $11.8 million and $12.4 million as of December 31, 2024 and 2023, respectively. Accrual Accounting and Significant Assumptions We account for pension benefits using the accrual method, recognizing pension expense before the payment of benefits to retirees.
Net Earnings from Affiliates 2023 2022 2021 (Amounts in millions) Net earnings from affiliates $ 17.9 $ 18.5 $ 16.3 Net earnings from affiliates represents our net income from investments in five joint ventures (one located in each of Chile, India, Saudi Arabia, South Korea and the United Arab Emirates) that are accounted for using the equity method of accounting.
Net Earnings from Affiliates 2024 2023 2022 (Amounts in millions) Net earnings from affiliates $ 19.1 $ 17.9 $ 18.5 Net earnings from affiliates represents our net income from investments in five joint ventures (one located in each of Chile, India, Saudi Arabia, South Korea and the United Arab Emirates) that are accounted for using the equity method of accounting.
The reputation of our product portfolio is built on more than 50 well-respected brand names such as Worthington, IDP, Valtek, Limitorque, Durco, Argus, Edward, Valbart and Durametallic, which we believe to be one of the most comprehensive in the industry.
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 and Argus, which we believe to be one of the most comprehensive in the industry.
At December 31, 2023, as compared with December 31, 2022, we decreased our discount rate for the U.S. plan from 5.73% to 5.41% based on an analysis of publicly-traded investment grade U.S. corporate bonds, which had lower yields due to current market conditions.
At December 31, 2024, as compared with December 31, 2023, we increased our discount rate for the U.S. plan from 5.41% to 5.73% based on an analysis of publicly traded investment grade U.S. corporate bonds, which had higher yields due to current market conditions.
For further discussion of our pension and postretirement benefits, see Note 13 to our consolidated financial statements included in Item 8 of this Annual Report. OUR CRITICAL ACCOUNTING ESTIMATES The process of preparing financial statements in conformity with U.S.
For further discussion of our pension and postretirement benefits, see Note 14, "Pension and Postretirements Benefits," to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report. OUR CRITICAL ACCOUNTING ESTIMATES The process of preparing financial statements in conformity with U.S.
In 2024, our cash flows for investing activities will be focused on strategic initiatives, information technology infrastructure, general upgrades and cost reduction opportunities and we currently estimate capital expenditures to be between $75 million and $85 million, before consideration of any acquisition activity.
In 2025, our cash flows for investing activities will be focused on strategic initiatives, information technology infrastructure, general upgrades and cost reduction opportunities and we currently estimate capital expenditures to be between $80 million and $90 million, before consideration of any acquisition activity.
Cash flow used by working capital decreased in 2023, due primarily to decreased cash flows used by or increased cash flows provided by accounts receivable, inventories, contract assets, accrued liabilities and income taxes payable and retirement obligations and other liabilities, partially offset by decreased cash flows provided by or increased cash flows used by contract liabilities, prepaid expenses and other and accounts payable as compared to the same period in 2022 .
Cash flow used by working capital increased in 2024, primarily due to increased cash flows used by, or decreased cash flows provided by, accounts receivable, prepaid expenses and other assets, accounts payable, contract liabilities, and accrued liabilities, partially offset by increased cash flows provided by, or decreased cash flows used by, inventories and contract assets as compared to the same period in 2023 .
The net loss in 2023 was primarily due to foreign currency translation adjustments resulting primarily from exchange rate movements of the Euro, British pound, Colombian peso and Mexican peso versus the U.S. dollar at December 31, 2023 as compared with 2022, partially offset by pension and other postretirement activity.
The net loss in 2024 was primarily due to foreign currency translation adjustments resulting primarily from exchange rate movements of the Euro, Brazilian real and Mexican peso versus the U.S. dollar at December 31, 2024 as compared with 2023, partially offset by pension and other postretirement activity.
Plans Asset category 2023 2022 Cash and Cash Equivalents 0 % 1 % U.K.
Plans Asset category 2024 2023 Cash and Cash Equivalents 1 % 0 % U.K.
Our non-U.S. defined benefit plan assets include a significant concentration of United Kingdom ("U.K.") fixed income securities, as discussed in Note 13 to our consolidated financial statements included in Item 8 of this Annual Report. We monitor investment allocations and manage plan assets to maintain an acceptable level of risk.
Our non-U.S. defined benefit plan assets include a significant concentration of United Kingdom fixed income securities, as discussed in Note 14, "Pension and Postretirements Benefits," to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report. We monitor investment allocations and manage plan assets to maintain an acceptable level of risk.
The assumptions include factors such as discount rates, health care cost trend rates, inflation, expected rates of return on plan assets, retirement rates, mortality rates, turnover, rates of compensation increases and other factors. The assumptions utilized to compute expense and benefit obligations are shown in Note 13 to our consolidated financial statements included in Item 8 of this Annual Report.
The assumptions include factors such as discount rates, health care cost trend rates, inflation, expected rates of return on plan assets, retirement rates, mortality rates, turnover, rates of compensation increases and other factors. The assumptions utilized to compute expense and benefit obligations are shown in Note 14, "Pension and Postretirements Benefits," to our consolidated financial statements included in "Item 8.
Realignment activity for the year ended December 31, 2022 is immaterial: December 31, 2023 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments All Other Consolidated Total Total Realignment Charges COS $ 10,797 $ 10,576 $ 21,373 $ (361) $ 21,012 SG&A 14,533 11,393 25,926 19,099 45,025 Total $ 25,330 $ 21,969 $ 47,299 $ 18,738 $ 66,037 32 Restructuring charges are included within Total Realignment charges and include charges related to approved, but not yet announced, site closures.
December 31, 2023 (Amounts in thousands) FPD FCD Subtotal–Reportable Segments All Other Consolidated Total Total Realignment Charges COS $ 10,797 $ 10,576 $ 21,373 $ (361) $ 21,012 SG&A 14,533 11,393 25,926 19,099 45,025 Total $ 25,330 $ 21,969 $ 47,299 $ 18,738 $ 66,037 Restructuring charges are included within Total Realignment charges and include charges related to approved, but not yet announced, facility closures.
Reserves for Contingent Loss We are a defendant in a number of lawsuits that seek to recover damages for personal injury allegedly resulting from exposure to asbestos-containing products formerly manufactured and/or distributed by heritage companies of the Company.
Financial Statements and Supplementary Data" of this Annual Report. Reserves for Contingent Loss We are a defendant in a number of lawsuits that seek to recover damages for personal injury allegedly resulting from exposure to asbestos-containing products formerly manufactured and/or distributed by heritage companies of the Company.
We believe this Amendment will provide greater flexibility and additional liquidity under our Credit Facility as we continue to pursue our business goals and strategy. Most other terms and conditions under the previous Credit Facility remained unchanged.
We believe this Second Amended and Restated Credit Agreement will provide greater flexibility 40 and additional liquidity under our Credit Facility as we continue to pursue our business goals and strategy. Most other terms and conditions under the previous Credit Facility remained unchanged.
Increases in accounts receivable provided $4.7 million of cash flow in 2023, compared to cash used of $152.0 million in 2022. For the fourth quarter of 2023 our days' sales outstanding ("DSO") was 68 days as compared to 75 days in 2022. We have not experienced a significant increase in customer payment defaults in 2023.
Increases in accounts receivable used $82.2 million of cash flow in 2024, compared to cash provided of $4.7 million in 2023. For the fourth quarter of 2024 our days' sales outstanding ("DSO") was 74 days as compared to 68 days in 2023. We have not experienced a significant increase in customer payment defaults in 2024.
Chemical The chemical industry represented approximately 21% and 22% of our bookings in 2023 and 2022, respectively. The chemical industry is comprised of petrochemical, specialty chemical and pharmaceutical products. Customer spending in 2023 remained resilient for the third consecutive year following the pandemic's negative impact on demand for chemical products in 2020.
Chemical 29 The chemical industry represented approximately 19% and 21% of our bookings in 2024 and 2023, respectively. The chemical industry is comprised of petrochemical, specialty chemical and pharmaceutical products. Customer spending in 2024 remained resilient for the fourth consecutive year following the pandemic's negative impact on demand for chemical products in 2020.
We believe the long-term fundamentals for the power generation industry remain solid based on projected increases in demand for electricity driven by global population growth, growth of urbanization in developing markets and the increased use of electricity driven transportation.
We believe the long-term fundamentals for the power generation industry remain solid based on projected increases in demand for electricity driven by the continued use and proliferation of artificial intelligence systems and machine learning, global population growth, growth of urbanization in developing markets and the increased use of electricity driven transportation.
Plan Funding 44 Our funding policy for defined benefit plans is to contribute at least the amounts required under applicable laws and local customs. In 2023, we contributed $15.0 million, to our defined benefit plans, compared to $18.7 million in 2022.
Plan Funding Our funding policy for defined benefit plans is to contribute at least the amounts required under applicable laws and local customs. In 2024, we contributed $32.6 million, to our defined benefit plans, compared to $15.0 million in 2023.
Plans Weighted average assumptions used to determine Benefit Obligation: Discount rate 5.41 % 4.22 % Rate of increase in compensation levels 4.00 3.24 Weighted average assumptions used to determine 2023 net pension expense: Long-term rate of return on assets 6.00 % 3.97 % Discount rate 5.73 4.46 Rate of increase in compensation levels 3.50 3.62 Weighted-average interest crediting rates 4.00 % 2.29 % 43 The following provides a sensitivity analysis of alternative assumptions on the U.S. qualified, aggregate non-U.S. pension plans and U.S. postretirement plans.
Plans Weighted average assumptions used to determine Benefit Obligation: Discount rate 5.73 % 4.71 % Rate of increase in compensation levels 4.00 3.51 Weighted average assumptions used to determine 2024 net pension expense: Long-term rate of return on assets 6.00 % 4.65 % Discount rate 5.41 4.22 Rate of increase in compensation levels 4.00 3.24 Weighted-average interest crediting rates 4.00 % 2.06 % The following provides a sensitivity analysis of alternative assumptions on the U.S. qualified, aggregate non-U.S. pension plans and U.S. postretirement plans.
The goal of the 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.
The goal of the 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. Another main focus area of the Flowserve Business System is portfolio excellence.
We also believe that our long-standing reputation in the power generation industry, our portfolio of offerings for the various generating methods, our advancements in serving the renewable energy market and carbon capture methodologies, as well as our global service and support structure, position us well for the future opportunities in this important industry. 30 Water Management The water management industry represented approximately 4% of our bookings in each of 2023 and 2022.
We also believe that our long-standing reputation in the power generation industry, our portfolio of offerings for the various generating methods, our advancements in serving the renewable energy market and carbon capture methodologies, as well as our global service and support structure, position us well for the future opportunities in this important industry.
Business Segments We conduct our operations through two business segments based on type of product and how we manage the business. We evaluate segment performance and allocate resources based on each segment’s operating income. See Note 19 to our consolidated financial statements included in Item 8 of this Annual Report for further discussion of our segments.
Business Segments We conduct our operations through two business segments based on type of product and how we manage the business. We evaluate segment performance and allocate resources based on each segment’s operating income. See Note 20, "Business Segment Information," to our consolidated financial statements included in "Item 8.
The increase included negative currency effects of approximately $5 million. The increase in customer bookings was driven by increased orders in the oil and gas, power generation, chemical, general and water management industries.
The increase included negative currency effects of approximately $4 million. The increase in customer bookings was driven by increased orders of $31 million in the power generation and $13 million in the oil and gas industries, partially offset by $25 million in the chemical, $5 million in the water management and $3 million in the general industries industries.
At December 31, 2023, the estimated fair market value of U.S. and non-U.S. plan assets for our defined ben efit pension plans increased to $540.6 million from $537.3 million at December 31, 2022. Assets were allocated as follows: U.S.
At December 31, 2024, the estimated fair market value of U.S. and non-U.S. plan assets for our defined ben efit pension plans decreased to $520.0 million from $540.6 million at December 31, 2023. Assets were allocated as follows: U.S.
Effect of Discount Rate Changes and Constancy of Other Assumptions: 0.5% Increase 0.5% Decrease (Amounts in millions) U.S. defined benefit pension plan: Effect on net pension expense $ 0.2 $ (0.2) Effect on Benefit Obligation (14.5) 15.6 Non-U.S. defined benefit pension plans: Effect on net pension expense (0.4) 0.4 Effect on Benefit Obligation (17.0) 18.6 U.S.
Effect of Discount Rate Changes and Constancy of Other Assumptions: 0.5% Increase 0.5% Decrease (Amounts in millions) U.S. defined benefit pension plan: Effect on net pension expense $ 0.1 $ 2.1 Effect on Benefit Obligation (13.4) 14.4 Non-U.S. defined benefit pension plans: Effect on net pension expense 0.4 0.7 Effect on Benefit Obligation (15.1) 16.8 U.S.
LIQUIDITY AND CAPITAL RESOURCES Cash Flow Analysis 2023 2022 2021 (Amounts in millions) Net cash flows provided (used) by operating activities $ 325.8 $ (40.0) $ 250.1 Net cash flows provided (used) by investing activities (68.6) (6.1) (59.5) Net cash flows provided (used) by financing activities (153.0) (150.0) (599.7) The following is a discussion and analysis of the Company’s liquidity and capital resources for the years ended December 31, 2023 and 2022.
LIQUIDITY AND CAPITAL RESOURCES Cash Flow Analysis 2024 2023 2022 (Amounts in millions) Net cash flows provided (used) by operating activities $ 425.3 $ 325.8 $ (40.0) Net cash flows provided (used) by investing activities (387.2) (68.6) (6.1) Net cash flows provided (used) by financing activities 117.5 (153.0) (150.0) The following is a discussion and analysis of the Company’s liquidity and capital resources for the years ended December 31, 2024 and 2023.
The increase was driven by both increased customer original equipment and aftermarket sales, resulting from increased customer sales of $82.7 million into North America, $6.6 million into Africa, $28.7 million into Europe, $38.7 million into the Middle East and $6.5 million into Latin America, partially offset by decreased customer sales of $3.2 million into Asia Pacific.
The increase was driven by both increased customer original equipment and aftermarket sales, resulting from increased customer sales of $71.5 million into the Middle East, $62.3 million into Asia Pacific, $12.1 million into Europe and $6.1 million into Africa, partially offset by decreased customer sales of $3.6 million into North America and $0.2 million into Latin America.
At December 31, 2023, the interest rate on the Term Loan Facility 40 was Adjusted Term SOFR plus 1.250% in the case of Adjusted Term SOFR loans and the Base Rate plus 0.250% in the case of Base Rate loans.
At December 31, 2024, the interest rate on the Term Loan was Adjusted Term SOFR plus 1.375% in the case of Adjusted Term SOFR loans and the Base Rate plus 0.250% in the case of Base Rate loan s.
We have used discount rates of 5.41%, 4.22% and 5.57% at December 31, 2023, in calculating our estimated 2024 net pension expense for the U.S. pension plans, non-U.S. pension plans and postretirement medical plans, respectively.
We have used discount rates of 5.73%, 4.71% and 5.78% at December 31, 2024, in calculating our estimated 2025 net pension expense for the U.S. pension plans, non-U.S. pension plans and postretirement medical plans, respectively.
Continuously, we review ongoing insurance coverage available for a significant amount of the potential future asbestos-related claims and in the future could secure additional insurance coverage as deemed necessary. For a discussion pertaining to asbestos claims refer to Note 15 included in Item 8 of this Annual Report.
We review ongoing insurance coverage available for a significant amount of the potential future asbestos-related claims and in the future could secure additional insurance coverage as deemed necessary. For a discussion pertaining to asbestos claims refer to Note 16, "Legal Matters and Contingencies," included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report.
Bookings recorded and subsequently canceled within the year-to-date period are excluded from year-to-date bookings. Bookings cancelled from the prior fiscal periods are excluded from the reported bookings and represent less than 1% for all periods presented. Bookings of $4.3 billion in 2023 decreased by $175.8 million, or 4.0%, as compared with 2022.
Bookings recorded and subsequently canceled within the 32 year-to-date period are excluded from year-to-date bookings. Bookings cancelled from the prior fiscal periods are excluded from the reported bookings and represent less than 1% for all periods presented. Bookings of $4.7 billion in 2024 increased by $389.0 million, or 9.1%, as compared with 2023.
T he interest 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.
Under the terms and conditions of the Second Amended and Restated Credit Agreement, the interest rates per annum applicable to the Revolving Credit Facility and Term Loan, 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.
Backlog represents the aggregate value of booked but uncompleted customer orders and is influenced primarily by bookings, sales, cancellations and currency effects. Backlog of $2.7 billion at December 31, 2023 decreased by $40.2 million, or 1.5%, as compared with December 31, 2022.
Backlog represents the aggregate value of booked but uncompleted customer orders and is influenced primarily by bookings, sales, cancellations and currency effects. Backlog of $2.8 billion at December 31, 2024 increased by $94.5 million, or 3.5%, as compared with December 31, 2023.
A discussion of our debt and related covenants is included in Note 12 to our consolidated financial statements included in Item 8 of this Annual Report. We were in compliance with the covenants as of December 31, 2023.
A discussion of our debt and related covenants is included in Note 13, "Debt and Finance Lease Obligations," to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report. We were in compliance with the covenants as of December 31, 2024.
As of December 31, 2023, we had U.S. foreign tax credit carryforwards of $63.5 million, expiring in 2028-2033 tax years, against which we recorded a valuation allowance of $49.1 million related to the U.S. foreign tax credit carryforwards on foreign branch category income.
As of December 31, 2024, we had U.S. foreign tax credit carryforwards of $67.4 million, expiring in 2028-2034 tax years, against which we recorded a valuation allowance of $54.1 million related to the U.S. foreign tax credit carryforwards on foreign branch category income.
The key operating results for our two business segments, FPD and FCD, are discussed below. Flowserve Pumps Division Segment Results 36 Our largest business segment is FPD, through which we design, manufacture, distribute and service highly custom engineered pumps, pre-configured industrial pumps, pump systems, mechanical seals and auxiliary systems (collectively referred to as "original equipment") and related services.
Flowserve Pumps Division Segment Results Our largest business segment is FPD, through which we design, manufacture, pretest, distribute and service highly custom engineered pumps, pre-configured industrial pumps, pump systems, mechanical seals and auxiliary systems (collectively referred to as "original equipment") and related services.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThis 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 forward exchange contracts discussed above.
Biggest changeThis 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. 49
Where available, the use of forward exchange contracts allows us to mitigate transactional exposure to exchange rate fluctuations as the gains or losses incurred on the forward exchange 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.
Where available, the use of forward exchange contracts allows us to mitigate transactional exposure to exchange rate fluctuations as the gains or losses incurred on the foreign exchange forward contracts will help 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.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We have market risk exposure arising from changes in foreign currency exchange rate movements. We are exposed to credit-related losses in the event of non-performance by counterparties to financial instruments, but we currently expect the counterparties will continue to meet their obligations given their current creditworthiness.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We have market risk exposure arising from changes in 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 the counterparties will continue to meet their obligations given their current creditworthiness.
Foreign Currency Exchange Rate Risk A substantial portion of our operations are conducted by our subsidiaries outside of the U.S. in currencies other than the U.S. dollar.
Foreign Currency Exchange Rate Risk A substantial portion of our operations are conducted by our subsidiaries outside of the United States in currencies other than the U.S. dollar.
Based on a sensitivity analysis at December 31, 2023, a 10% change in the foreign currency exchange rates for the year ended December 31, 2023 would have impacted our net earnings by approximately $1 million.
Based on a sensitivity analysis at December 31, 2024, a 10% change in the foreign currency exchange rates for the year ended December 31, 2024 would have impacted our net earnings by approximately $23 million.
The primary currencies in which we operate, in addition to the U.S. dollar, are the Argentine peso, Australian dollar, Brazilian real, British pound, Canadian dollar, Chinese yuan, Colombian peso, Euro, Hungarian forint, Indian rupee, Japanese yen, Mexican peso, Singapore dollar, Swedish krona, Russian ruble, Malaysian ringgit and Venezuelan bolivar.
The primary currencies in which we operate, in addition to the U.S. dollar, are the Argentine peso, Australian dollar, Brazilian real, British pound, Canadian dollar, Chinese yuan, Colombian peso, Euro, Hungarian forint, Indian rupee, Japanese yen, Mexican peso, Singapore dollar and Malaysian ringgit.
At December 31, 2022, a 10% change in the foreign currency exchange rates for the year ended December 31, 2022 would have impacted our net earnings by approximately $7 million.
At December 31, 2023, a 10% change in the foreign currency exchange rates for the year ended December 31, 2023 would have impacted our net earnings by approximately $1 million.
We recognized foreign currency net gains (losses) of $(41.1) million, $9.7 million and $(27.4) million for the years ended December 31, 2023, 2022 and 2021, respectively, which are included in other income (expense), net in the accompanying consolidated statements of income.
We recognized foreign currency net gains (losses) of $2.3 million, $(41.1) million and $9.7 million for the years ended December 31, 2024, 2023 and 2022, respectively, which are included in other income (expense), net in the accompanying consolidated statements of income.
The net loss in 2023 was primarily due to foreign currency translation adjustments resulting primarily from exchange rate movements of the Euro, British pound, Colombian peso and Mexican peso versus the U.S. dollar at December 31, 2023 as compared with 2022.
The net loss in 2024 was primarily due to foreign currency translation adjustments resulting primarily from exchange rate movements of the Euro, Brazilian real and Mexican peso versus the U.S. dollar at December 31, 2024 as compared with December 31, 2023.
As of December 31, 2023, we had a U.S. dollar equivalent of $656.6 million in aggregate notional amount outstanding in foreign exchange contracts with third parties, compared with $459.2 million at December 31, 2022.
As of December 31, 2024, we had a U.S. dollar equivalent of $695.9 million in aggregate notional amount outstanding in foreign exchange contracts with third parties, compared with $656.6 million at December 31, 2023.
We realized net gains (losses) associated with foreign currency translation of $30.8 million, $(98.7) million and $0.5 million for the years ended December 31, 2023, 2022 and 2021, respectively, which are included in other comprehensive income (loss).
We recognized net gains (losses) associated with foreign currency translation of $(108.2) million, $30.8 million and $(98.7) million for the years ended December 31, 2024, 2023 and 2022, respectively, which are included in other comprehensive income (loss).
Removed
As a means of managing the volatility of foreign currency exposure with the Euro/U.S. dollar exchange rate, we entered into swaps associated with our Euro investment in certain of our international subsidiaries and were designated as net investment hedges. On December 22, 2022 all outstanding cross-currency swaps were terminated resulting in cash proceeds received of $66.0 million.
Removed
Routinely, we review 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.
Removed
LIBOR/SOFR On March 5, 2021, the UK Financial Conduct Authority (“FCA”), which regulates LIBOR issued an announcement on the future cessation or loss of representativeness of LIBOR benchmark settings currently published by ICE Benchmark Administration.
Removed
That announcement confirmed that LIBOR will either cease to be provided by any administrator or will no longer be representative after December 31, 2021 for all non-USD LIBOR reference rates, and for 1-Week and 2-Month USD LIBOR and after June 30, 2023 for other USD LIBOR reference rates. The U.S.
Removed
Federal Reserve, in conjunction with the Alternative Reference Rate Committee, has proposed the replacement of U.S. dollar LIBOR rates with a new index calculated by short-term repurchase agreements backed by U.S. Treasury securities called SOFR.
Removed
As a result of the expected LIBOR cessation, the Company amended its Credit Agreement on February 3, 2023 whereby it has replaced LIBOR references with SOFR as the benchmark reference rate. 48

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