# Flowserve Corp: Form 10-Q for the period ended Sep 30, 2025

- Company: [Flowserve Corp](/companies/fls.md) (CIK 30625)
- Form: 10-Q
- Filed: 2025-10-28
- Accepted by EDGAR: Oct 28, 2025, 16:01 ET
- Period: 2025-09-30
- Accession: 0000030625-25-000072
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/30625/000003062525000072/fls-20250930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/30625/000003062525000072/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-07-01 to 2025-09-30 | $1.17bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2025-01-01 to 2025-09-30 | $3.51bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-07-01 to 2025-09-30 | $794.1m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2025-01-01 to 2025-09-30 | $2.35bn | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-07-01 to 2025-09-30 | $380.3m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2025-01-01 to 2025-09-30 | $1.16bn | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-07-01 to 2025-09-30 | $305.2m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2025-01-01 to 2025-09-30 | $814.2m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-07-01 to 2025-09-30 | $79.3m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2025-01-01 to 2025-09-30 | $357.8m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-07-01 to 2025-09-30 | $18.7m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2025-01-01 to 2025-09-30 | $58.2m | us-gaap:InterestExpense |
| Income tax | 3 months, 2025-07-01 to 2025-09-30 | $93.7m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2025-01-01 to 2025-09-30 | $127.1m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-07-01 to 2025-09-30 | $219.6m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2025-01-01 to 2025-09-30 | $375.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-07-01 to 2025-09-30 | $1.67 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2025-01-01 to 2025-09-30 | $2.85 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-07-01 to 2025-09-30 | $1.69 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2025-01-01 to 2025-09-30 | $2.87 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-07-01 to 2025-09-30 | 131,235,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2025-01-01 to 2025-09-30 | 131,836,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2025-01-01 to 2025-09-30 | $506.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-07-01 to 2025-09-30 | $17.2m | us-gaap:PaymentsToAcquireProductiveAssets |
| Capital expenditure | 9 months, 2025-01-01 to 2025-09-30 | $45.5m | us-gaap:PaymentsToAcquireProductiveAssets |
| Dividends paid | 9 months, 2025-01-01 to 2025-09-30 | $82.7m | us-gaap:PaymentsOfDividends |
| Share repurchases | 9 months, 2025-01-01 to 2025-09-30 | $197.9m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Current assets | at 2025-09-30 | $3.16bn | us-gaap:AssetsCurrent |
| Total assets | at 2025-09-30 | $5.83bn | us-gaap:Assets |
| Current liabilities | at 2025-09-30 | $1.50bn | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2025-09-30 | $1.44bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-09-30 | $46.4m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-09-30 | $2.26bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 66,536 characters.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and notes thereto, and the other financial data included elsewhere in this Quarterly Report. The following discussion should also be read in conjunction with our audited consolidated financial statements, and notes thereto, and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A") included in our 2024 Annual Report.

### EXECUTIVE OVERVIEW

### Our Company

We are a world-leading manufacturer and aftermarket service provider of comprehensive flow control systems. We develop and manufacture precision-engineered flow control equipment integral to the movement, control and protection of the flow of materials in our customers’ critical processes. Our product portfolio of pumps, valves, seals, automation and aftermarket services supports global infrastructure industries, including energy, chemical, power generation and general, which includes water management and pharmaceuticals, where our products and services enable customers to achieve their goals. Through our manufacturing platform and global network of Quick Response Centers ("QRCs"), we offer a broad array of aftermarket equipment services, such as installation, advanced diagnostics and turnkey maintenance programs. We currently have approximately 16,000 employees globally and a footprint of manufacturing facilities and QRCs in more than 50 countries.

Our business model is significantly influenced by the capital and operating spending of global infrastructure industries for the placement of new products into service and maintenance spending for aftermarket services for existing operations. The worldwide installed base of our products is an important source of aftermarket revenue, where products are relied upon to maximize operating time of many key industrial processes. We continue to invest in our aftermarket strategy to provide local support to drive customer investments in our offerings and use of our services to replace or repair installed products. The aftermarket portion of our business also helps provide business stability during various economic periods. The aftermarket business, which is primarily served by our network of 152 QRCs (some of which are shared by our two business segments) located around the globe, provides a variety of service offerings for our customers including spare parts, service solutions, product life cycle solutions and other value-added services. It is generally a higher margin business compared to our original equipment business and a key component of our profitable growth strategy.

Our operations are conducted through two business segments that are referenced throughout this 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.

Our business segments share a focus on industrial flow control technology and have a number of common customers. These segments also have complementary product offerings and technologies that are often combined in applications that provide us a net competitive advantage. Our segments also benefit from our global footprint, 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.

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, Argus and Durametallic, which we believe to be one of the most comprehensive in the industry. Our products and services are sold either directly or through designated channels to more than 10,000 companies, including some of the world’s leading engineering, procurement and construction ("EPC") firms, original equipment manufacturers, distributors and end users.

Through the Flowserve Business System, we are committed to operational excellence, which includes continuous enhancements of our global supply chain capability to increase our ability to meet global customer demands and improve the quality and timely delivery of our products over the long term. Additionally, we continue to devote resources to improving the supply chain processes across our business segments to find areas of synergy and cost reduction and to improving our supply chain management capabilities to meet global customer demands. We also remain focused on improving on-time delivery and quality, while managing warranty costs across our global operations, through our operational excellence program. 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. As part of these efforts, in 2024, we launched the complexity reduction ("CORE") program that focuses on product rationalization and continuous improvement of our overall product portfolio.

In the first quarter of 2023, we identified and initiated certain realignment activities concurrent with the consolidation of our FPD aftermarket and pump operations into a single operating model. This consolidated operating model was designed to better align our go-to-market strategy with our product offerings, enable end-to-end lifecycle responsibility and accountability, and to facilitate more efficient operations. Collectively, the above realignment activities are referred to as the "2023 Realignment Programs." The activities of the 2023 Realignment Programs were identified and implemented in phases throughout 2023 and 2024 and are substantially completed. In the fourth quarter of 2024, we launched the CORE program within the portfolio excellence category of the Flowserve Business System. During 2025 we also initiated certain other portfolio and footprint optimization activities. These optimization activities, together with the CORE program are referred to as the "2025 Realignment Programs."

#### 2025 Outlook

We continue to see growth from the end-markets we serve and focus on our strategic plan that takes a balanced approach to integrating both short-term and long-term initiatives and aims to accelerate growth through three key areas: diversification, decarbonization, and digitization, the "3D Strategy." Our strategy is expected to deliver sustainable growth, while the Flowserve Business System is expected to unlock gains in organizational and operational efficiency. The current macroeconomic environment is dynamic and uncertainty exists given the trade policy actions introduced throughout 2025, including higher import tariffs in a number of countries in which we operate, the potential implementation of modified or new tariffs and related retaliatory actions. We plan to leverage our global footprint, expansive manufacturing network, flexible supply chain and ability to incorporate tariff impacts into pricing decisions to minimize the economic impact of this uncertainty to our business. We will continue to monitor and manage macroeconomic trends and uncertainties, including inflationary and recessionary pressures resulting from the ongoing tariffs and geopolitical climate; however, with our strong backlog, improved execution and acquisition of MOGAS, we expect to deliver annual revenue growth in 2025.

As of September 30, 2025, we have cash and cash equivalents of $833.8 million and $715.4 million of borrowings available under our Second Amended and Restated Credit Agreement. We do not currently anticipate, nor are we aware of, any significant market conditions or commitments that would change any of our conclusions of the liquidity currently available to us. We will continue to actively monitor the credit markets in order to maintain sufficient liquidity and access to capital throughout 2025.

### OUR RESULTS OF OPERATIONS — Three months ended September 30, 2025 and 2024

Throughout this discussion of our results of operations, we discuss the impact of fluctuations in foreign currency exchange rates. We have calculated currency effects on operations by translating current year results on a monthly basis at prior year exchange rates for the same periods.

As discussed in Note 2, "Acquisition," to our condensed consolidated financial statements included in this Quarterly Report, effective October 15, 2024, we acquired for inclusion in FCD, all of the equity interests of MOGAS Industries, Inc., MOGAS Real Estate LLC and MOGAS Systems & Consulting LLC (such entities collectively, "MOGAS"). We incurred $9.5 million in acquisition and integration related costs for the nine months ended September 30, 2025 associated with the acquisition which are included within selling, general and administrative expense ("SG&A") in our condensed consolidated statements of income. The impact of the acquisition of MOGAS is not material for the nine months ended September 30, 2025.

Our realignment activities are implemented in phases. We currently anticipate a total investment of approximately $65 million in the 2025 Realignment Programs that have been evaluated and initiated, of which $11 million is estimated to be non-cash. We are evaluating the annualized cost savings expected to be achieved upon completion of the activities of the 2025 Realignment Programs that have been identified and initiated to date. Actual savings could vary from expected savings. There are certain remaining realignment activities that are currently being evaluated, but have not yet been approved and therefore are not included in the above anticipated total investment or estimated savings.

### Realignment Activity

The following tables present our realignment activity by segment.

*(Amounts in thousands)*

| Total Realignment Charges | Three Months Ended September 30, 2025 FPD | FCD | Subtotal - Reportable Segments | All Other | Consolidated Total |
| --- | ---: | ---: | ---: | ---: | ---: |
| COS | $21,628 | $4,386 | $26,014 | $(533) | $25,481 |
| SG&A | 88 | $2,395 | 2,483 | 2,088 | 4,571 |
| Total | $21,716 | $6,781 | $28,497 | $1,555 | $30,052 |

*(Amounts in thousands)*

| Total Realignment Charges | Three Months Ended September 30, 2024 FPD | FCD | Subtotal - Reportable Segments | All Other | Consolidated Total |
| --- | ---: | ---: | ---: | ---: | ---: |
| COS | $8,415 | $(1,590) | $6,825 | $(12) | $6,813 |
| SG&A | 716 | $1,379 | 2,095 | 47 | 2,142 |
| Total | $9,131 | $(211) | $8,920 | $35 | $8,955 |

*(Amounts in thousands)*

| Total Realignment Charges | Nine Months Ended September 30, 2025 FPD | FCD | Subtotal–Reportable Segments | Eliminations and All Other | Consolidated Total |
| --- | ---: | ---: | ---: | ---: | ---: |
| COS | $26,495 | $14,704 | $41,199 | $(599) | $40,600 |
| SG&A (2) | 840 | (1,230) | (390) | 1,871 | 1,481 |
| Total | $27,335 | $13,474 | $40,809 | $1,272 | $42,081 |

30

*(Amounts in thousands)*

| Total Realignment Charges | Nine Months Ended September 30, 2024 FPD | FCD | Subtotal–Reportable Segments | Eliminations and All Other | Consolidated Total |
| --- | ---: | ---: | ---: | ---: | ---: |
| COS | $20,837 | $(603) | $20,234 | $(228) | $20,006 |
| SG&A | 1,036 | 1,441 | 2,477 | 892 | 3,369 |
| Loss on sale of business (1) | — | 12,981 | 12,981 | — | 12,981 |
| Total | $21,873 | $13,819 | $35,692 | $664 | $36,356 |

(1) Loss on sale of business related to NAF AB control valves business as described within Note 1, "Basis of Presentation and Accounting Policies," to our condensed consolidated financial statements included in this Quarterly Report.

(2) Includes the immaterial reversal of previously recognized realignment charges associated with our 2023 Realignment Programs and an immaterial non-cash gain recognized on the early cancellation of certain lease agreements and the resulting write-off of the remaining operating lease liabilities associated with our 2023 Realignment Programs, which were recognized in the first and second quarters of 2025, respectively. Our 2023 Realignment Programs are substantially completed.

### Consolidated Results

### Bookings, Sales and Backlog

*(Amounts in millions)*

|  | Three Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Bookings | $1,213.0 | $1,203.6 |
| Sales | 1,174.4 | 1,133.1 |

*(Amounts in millions)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Bookings | $3,511.2 | $3,487.2 |
| Sales | 3,507.1 | 3,377.5 |

We revised the end market categories for bookings during the first quarter of 2025 to better reflect the end markets of our customers and better align with Flowserve's strategic focus. All bookings by industry amounts discussed below, including the 2024 comparative period, have been reclassified from five categories (*i.e.,* oil and gas, chemical, power generation, water management and general industries) to four categories (*i.e.,* energy, chemical, power generation and general industries) to conform to our current classification of end markets. The revisions implemented are as follows:

- the oil and gas end market is now referred to as the energy end market;
- the chemical end market no longer includes pharmaceuticals; and
- the general industries end market now includes pharmaceuticals and water management.

We define a booking as the receipt of a customer order that contractually engages us to perform activities on behalf of our customer with regard to manufacturing, service or support. Bookings recorded and subsequently canceled within the year-to-date period are excluded from year-to-date bookings. Bookings for the three months ended September 30, 2025 increased by $9.4 million, or 0.8%, as compared with the same period in 2024. The increase included currency benefits of approximately $18 million. The increased bookings were driven by increased customer orders of $35 million in the power generation industry, $34 million in the chemical industry and $29 million in general industries, partially offset by a decrease of $84 million in the energy industry. The increase in customer bookings was driven by aftermarket bookings.

Bookings for the nine months ended September 30, 2025 increased by $24.0 million, or 0.7%, as compared with the same period in 2024. The increase included currency benefits of approximately $5 million. The increased bookings were driven by increased customer orders of $146 million in the general industries and $69 million in the power generation industry, partially offset by a decrease of $189 million in the energy industry and $9 million in the chemical industry. The increase in customer bookings was driven by aftermarket bookings.

Sales for the three months ended September 30, 2025 increased by $41.3 million, or 3.6%, as compared to the same period in 2024. The increase included currency benefits of approximately $15 million. The increased sales were driven by aftermarket customer sales, with increased customer sales of $48 million into North America, $11 million into Africa and $10 million into Europe, partially offset by decreased customer sales of $19 million into Asia Pacific, $8 million into Latin America, and $6 million into the Middle East. Net sales to international customers, including export sales from the United States, were approximately 63% and 64% of total sales for the three months ended September 30, 2025 and 2024, respectively. Aftermarket sales represented approximately 53% of total sales, as compared with approximately 51% of total sales for the same period in 2024.

Sales for the nine months ended September 30, 2025 increased by $129.6 million, or 3.8%, as compared to the same period in 2024. The increase included currency benefits of approximately $3 million. The increased sales were driven by both aftermarket and original equipment customer sales, with increased customer sales of $108 million into North America,$18 million into Africa, $15 million into the Middle East and $2 million into Europe, partially offset by decreased customer sales of $12 million into Latin America and $6 million into Asia Pacific. Net sales to international customers, including export sales from the United States, were approximately 63% and 64% of total sales for the nine months ended September 30, 2025 and 2024, respectively. Aftermarket sales represented approximately 53% of total sales, as compared with approximately 51% of total sales for the same period in 2024.

Backlog represents the aggregate value of booked but uncompleted customer orders and is influenced primarily by bookings, sales, cancellations and currency effects. Backlog of $2,896.1 million at September 30, 2025 increased by $106.5 million, or 3.8%, as compared to December 31, 2024. Currency effects provided an increase of approximately $123 million (currency effects on backlog are calculated using the change in period end exchange rates). Approximately 41% of the backlog at September 30, 2025 and 37% of the backlog at December 31, 2024 was related to aftermarket orders. Backlog includes our unsatisfied (or partially unsatisfied) performance obligations of approximately $994 million related to contracts having an original expected duration of over one year as discussed in Note 3, "Revenue Recognition," to our condensed consolidated financial statements included in this Quarterly Report.

### Gross Profit and Gross Profit Margin

*(Amounts in millions, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Gross profit | $380.3 | $357.1 |
| Gross profit margin | 32.4% | 31.5% |

*(Amounts in millions, except percentages)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Gross profit | $1,156.2 | $1,062.1 |
| Gross profit margin | 33.0% | 31.4% |

Gross profit for the three months ended September 30, 2025 increased by $23.2 million, or 6.5%, as compared with the same period in 2024. Gross profit margin for the three months ended September 30, 2025 of 32.4% increased from 31.5% for the same period in 2024. The increase in gross profit margin was primarily due to the favorable impact of previously implemented sales price increases, an improved selective bidding approach and lower broad-based annual compensation, partially offset by increased charges of $18.7 million related to our realignment activities and $2.6 million of integration costs and amortization of acquisition related intangibles assets associated with the MOGAS acquisition as compared to the same period in 2024.

Gross profit for the nine months ended September 30, 2025 increased by $94.1 million, or 8.9%, as compared with the same period in 2024. Gross profit margin for the nine months ended September 30, 2025 of 33.0% increased from 31.4% for the same period in 2024. The increase in gross profit margin was primarily due to the favorable impact of previously implemented sales price increases, an improved selective bidding approach and lower broad-based annual incentive compensation, partially offset by increased charges of $20.6 million related to our realignment activities and $9.5 million of integration costs and amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition as compared to the same period in 2024.

### Selling, General and Administrative Expense

*(Amounts in millions, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| SG&A | $305.2 | $259.0 |
| SG&A as a percentage of sales | 26.0% | 22.9% |

*(Amounts in millions, except percentages)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| SG&A | $814.2 | $726.1 |
| SG&A as a percentage of sales | 23.2% | 21.5% |

SG&A for the three months ended September 30, 2025 increased by $46.2 million, or 17.8%, as compared with the same period in 2024. Currency effects yielded an increase of approximately $3 million. SG&A increased due to $25.7 million in transaction costs incurred associated with the terminated Chart Merger, increased asbestos-related costs of $18.1 million driven by a $30.1 million adjustment for Incurred But Not Reported ("IBNR") asbestos liability accruals based on an annual actuarial study, increased acquisition and integration costs and amortization of acquisition related intangibles assets associated with the MOGAS acquisition of $3.8 million and increased charges of $2.4 million related to our realignment activities, partially offset by decreased research and development costs of $9.7 million, decreased bad debt expense of $3.8 million, lower broad-based annual incentive compensation and a $2.3 million one-time U.S. pension plan transition benefit charge incurred in the third quarter of 2024 that did not recur as compared to the same period in 2024. SG&A as a percentage of sales for the three months ended September 30, 2025 increased 310 basis points driven by cost increases, including those associated with the Chart Merger and asbestos-related IBNR charges.

SG&A for the nine months ended September 30, 2025 increased by $88.1 million, or 12.1%, as compared with the same period in 2024. Currency effects yielded an increase of approximately $1 million. SG&A increased due to $41.2 million in transaction costs incurred associated with the terminated Chart Merger, increased asbestos-related costs of $14.8 million for IBNR asbestos liability activity and increased acquisition and integration costs and amortization of acquisition related intangibles assets associated with the MOGAS acquisition of $9.8 million, partially offset by a decrease in research and development costs of $14.1 million, lower broad-based annual incentive compensation, decreased charges of $1.9 million related to our realignment activities, a $1.8 million discrete software asset impairment recognized in 2024 that did not recur and decreased bad debt expense of $0.8 million as compared to the same period in 2024. SG&A as a percentage of sales for the nine months ended September 30, 2025 increased 170 basis points driven by cost increases.

### Loss on Sale of Business

*(Amounts in millions)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Loss on sale of business | $— | $(13.0) |

The loss on sale of business for the nine months ended September 30, 2025 decreased by $13.0 million due to the divestiture of NAF AB in 2024, a previously wholly owned subsidiary and control valves business within our FCD segment, including the NAF AB facility located in Linkoping, Sweden. See Note 1, "Basis of Presentation and Accounting Policies," to our condensed consolidated financial statements included in this Quarterly Report for additional information on this transaction.

### Net Earnings from Affiliates

*(Amounts in millions)*

|  | Three Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Net earnings from affiliates | $4.1 | $5.2 |

*(Amounts in millions)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Net earnings from affiliates | $15.8 | $14.5 |

Net earnings from affiliates for the three months ended September 30, 2025 decreased by $1.1 million, or 21.2%, as compared with the same period in 2024. The decrease in net earnings was primarily a result of decreased earnings of our FPD joint venture in South Korea.

Net earnings from affiliates for the nine months ended September 30, 2025 increased by $1.3 million, or 9.0%, as compared with the same period in 2024. The increase in net earnings was primarily a result of increased earnings of our FPD joint venture in India.

### Operating Income

*(Amounts in millions, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Operating income | $79.3 | $103.2 |
| Operating income as a percentage of sales | 6.7% | 9.1% |

*(Amounts in millions, except percentages)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Operating income | $357.8 | $337.6 |
| Operating income as a percentage of sales | 10.2% | 10.0% |

Operating income for the three months ended September 30, 2025 decreased by $23.9 million, or 23.2%, as compared with the same period in 2024. The decrease included currency benefits of approximately $3 million. The decrease was primarily a result of the $46.2 million increase in SG&A, partially offset by the $23.2 million increase in gross profit.

Operating income for the nine months ended September 30, 2025 increased by $20.2 million, or 6.0%, as compared with the same period in 2024. The increase included currency benefits of approximately $1 million. The increase was primarily a result of the $94.1 million increase in gross profit, partially offset by the $88.1 million increase in SG&A.

### Interest Expense and Interest Income

*(Amounts in millions)*

|  | Three Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Interest expense | $(18.7) | $(16.6) |
| Interest income | 0.8 | 1.4 |

*(Amounts in millions)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Interest expense | $(58.2) | $(48.8) |
| Interest income | 5.1 | 3.7 |

Interest expense for the three months ended September 30, 2025 increased by $2.1 million, as compared with the same period in 2024, primarily due to higher outstanding debt during the period. Interest income for the three months ended September 30, 2025 decreased by $0.6 million as compared to the same period in 2024.

Interest expense for the nine months ended September 30, 2025 increased by $9.4 million, as compared with the same period in 2024, primarily due to higher outstanding debt during the period. Interest income for the nine months ended September 30, 2025 increased by $1.4 million primarily due to a higher average balance as compared to the same period in 2024.

### Other Expense, Net

*(Amounts in millions)*

|  | Three Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Other income (expense), net | $256.2 | $(5.9) |

*(Amounts in millions)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Other income (expense), net | $214.0 | $(12.1) |

Other income (expense), net for the three months ended September 30, 2025 increased $262.1 million as compared to the same period in 2024, primarily due to the $266.0 million payment we received per the Mutual Termination Agreement for the terminated Chart Merger and a $1.1 million decrease in losses from transactions in currencies other than our sites' functional currencies, partially offset by a $3.3 million increase in losses arising from transactions on foreign exchange forward contracts. The net currency change was primarily due to the foreign currency exchange rate movements in the Mexican peso, Singapore dollar, United Arab Emirates dirham, Indian rupee and Euro during the three months ended September 30, 2025, as compared to the same period in 2024. The three-month period ended September 30, 2025 also includes a pension settlement loss of $1.5 million incurred in conjunction with the freeze of our U.S. Qualified pension plan, which represents a portion of the estimated full year expected settlement loss of $5 million - $6 million triggered due to expected cash outflows exceeding service and interest costs.

Other income (expense), net for the nine months ended September 30, 2025 increased $226.1 million as compared to the same period in 2024, primarily due to the $266.0 million payment we received per the Mutual Termination Agreement for the terminated Chart Merger, partially offset by a $24.9 million increase in losses from transactions in currencies other than our sites' functional currencies and a $9.8 million increase in losses arising from transactions on foreign exchange forward contracts. The net currency change was primarily due to the foreign currency exchange rate movements in the Mexican peso, Euro, Swedish krona, Brazilian real, Singapore dollar and Indian rupee during the nine months ended September 30, 2025, as compared to the same period in 2024. The nine months ended September 30, 2025 also includes a pension settlement loss of $4.5 million incurred in conjunction with the freeze of our U.S. Qualified pension plan, which represents a portion of the estimated full year expected settlement loss of $5 million - $6 million triggered due to expected cash outflows exceeding service and interest costs.

### Income Taxes and Tax Rate

*(Amounts in millions, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Provision for (benefit from) income taxes | $93.7 | $18.7 |
| Effective tax rate | 29.5% | 22.8% |

*(Amounts in millions, except percentages)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Provision for (benefit from) income taxes | $127.1 | $62.7 |
| Effective tax rate | 24.5% | 22.4% |

The effective tax rate of 29.5% for the three months ended September 30, 2025 increased from 22.8% for the same period in 2024. The effective tax rate varied from the U.S. federal statutory rate for the three months ended September 30, 2025 primarily due to the impacts pursuant to the enactment of OBBBA and state income taxes, partially offset by the net impact of foreign operations. Refer to Note 15, "Income Taxes," to our condensed consolidated financial statements included in this Quarterly Report for further discussion.

The effective tax rate of 24.5% for the nine months ended September 30, 2025 increased from 22.4% for the same period in 2024. The effective tax rate varied from the U.S. federal statutory rate for the nine months ended September 30, 2025 primarily due to the impacts pursuant to the enactment of OBBBA and state income taxes, partially offset by the net impact of foreign operations. Refer to Note 15, "Income Taxes," to our condensed consolidated financial statements included in this Quarterly Report for further discussion.

### Other Comprehensive Income (Loss)

*(Amounts in millions)*

|  | Three Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Other comprehensive income (loss): | $(13.9) | $50.7 |

*(Amounts in millions)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Other comprehensive income (loss): | $144.4 | $0.2 |

Other comprehensive income for the three months ended September 30, 2025 decreased by $64.6 million to a loss from income of $50.7 million in the same period in 2024. The decrease was due to foreign currency translation adjustments resulting primarily from exchange rate movements of the Indian rupee, Euro, British pound and Mexican peso versus the U.S. dollar during the three months ended September 30, 2025, as compared to the same period in 2024.

Other comprehensive income for the nine months ended September 30, 2025 increased by $144.2 million from income of $0.2 million in the same period in 2024. The increase was due to foreign currency translation adjustments resulting primarily from exchange rate movements of the Euro, British pound and Mexican peso versus the U.S. dollar during the nine months ended September 30, 2025, as compared to the same period in 2024.

### Business Segments

We conduct our operations through two business segments based on the type of product and how we manage the business. We evaluate segment performance and allocate resources based on each segment’s operating income. The key operating results for our two business segments, FPD and FCD, are discussed below.

### 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. 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 primarily operates in the energy, power generation, chemical, and general industries. FPD operates in 49 countries with 37 manufacturing facilities worldwide, 12 of which are located in North America, 11 in Europe and the Middle East, eight in Asia Pacific, and six in Latin America, and it operates 127 QRCs, including those co-located in manufacturing facilities and/or shared with FCD.

*(Amounts in millions, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Bookings | $819.5 | $886.6 |
| Sales | 800.3 | 782.1 |
| Gross profit | 265.8 | 253.2 |
| Gross profit margin | 33.2% | 32.4% |
| SG&A | 135.0 | 149.1 |
| Segment operating income | 134.9 | 109.3 |
| Segment operating income as a percentage of sales | 16.9% | 14.0% |

36

*(Amounts in millions, except percentages)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Bookings | $2,394.8 | $2,488.6 |
| Sales | 2,402.4 | 2,363.7 |
| Gross profit | 833.5 | 761.3 |
| Gross profit margin | 34.7% | 32.2% |
| SG&A | 415.1 | 424.8 |
| Segment operating income | 434.1 | 351.1 |
| Segment operating income as a percentage of sales | 18.1% | 14.9% |

As discussed above, we revised the end market categories for bookings during the first quarter of 2025. All bookings by industry amounts discussed below, including the 2024 comparative period, have been reclassified from five categories (*i.e.,* oil and gas, chemical, power generation, water management, and general industries) to four categories (*i.e.,* energy, chemical, power generation and general industries) to conform to our current classification of end markets.

Bookings for the three months ended September 30, 2025 decreased by $67.1 million, or 7.6%, as compared to the same period in 2024. The decrease included currency benefits of approximately $16 million. The decrease in customer bookings was primarily driven by decreased customer orders of $78 million in the energy industry and $2 million in the power generation industry, partially offset by increased customer orders of $11 million in the chemical industry and $7 million in the general industries. Customer bookings decreased $31 million into North America, $20 million into Asia Pacific, $12 million into the Middle East and $5 million into Europe, and were partially offset by increased customer orders of $5 million into Africa and $3 million into Latin America. The decrease in customer bookings was driven by original equipment bookings.

Bookings for the nine months ended September 30, 2025 decreased by $93.8 million, or 3.8%, as compared to the same period in 2024. The decrease included currency benefits of approximately $5 million. The decrease in customer bookings was primarily driven by decreased customer orders of $220 million in the energy industry and $21 million in the chemical industry, partially offset by increased customer orders of $114 million in the general industries and $37 million in the power generation industry. Customer bookings decreased $140 million into the Middle East, $33 million into Asia Pacific and $14 million into Latin America, and were partially offset by increased customer orders of $56 million into North America, $32 million into Africa and $9 million into Europe. The decrease in customer bookings was driven by original equipment bookings.

Sales for the three months ended September 30, 2025 increased by $18.2 million, or 2.3% as compared to the same period in 2024 and included currency benefits of approximately $12 million. The increase was driven by aftermarket customer sales. Increased customer sales of approximately $26 million into North America, $11 million into Africa and $7 million into Europe were partially offset by decreased customer sales of approximately $15 million into Asia Pacific, $12 million into Latin America and $1 million into the Middle East.

Sales for the nine months ended September 30, 2025 increased by $38.7 million, or 1.6% as compared to the same period in 2024 and included currency benefits of approximately $2 million. The increase was driven by aftermarket customer sales. Increased customer sales of approximately $62 million into North America, $25 million into Africa and $9 million into the Middle East were partially offset by decreased customer sales of approximately $31 million into Asia Pacific, $27 million into Latin America and $4 million into Europe.

Gross profit for the three months ended September 30, 2025 increased by $12.6 million, or 5.0%, as compared to the same period in 2024. Gross profit margin for the three months ended September 30, 2025 of 33.2% increased from 32.4% for the same period in 2024. The increase in gross profit margin was primarily due to strategic sourcing decisions, an improved selective bidding approach, favorable mix, lower broad-based annual incentive compensation and a $1.7 million one-time U.S. pension plan transition benefit charge incurred in the third quarter of 2024 that did not recur, partially offset by increased charges of $13.2 million related to our realignment activities as compared to the same period in 2024.

Gross profit for the nine months ended September 30, 2025 increased by $72.2 million, or 9.5%, as compared to the same period in 2024. Gross profit margin for the nine months ended September 30, 2025 of 34.7% increased from 32.2% for the same period in 2024. The increase in gross profit margin was primarily due to strategic sourcing decisions, an improved selective bidding approach, favorable mix, lower broad-based annual incentive compensation and a $1.7 million one-time U.S. pension plan transition benefit charge incurred in the third quarter of 2024 that did not recur, partially offset by increased charges of $5.7 million related to our realignment activities as compared to the same period in 2024.

SG&A for the three months ended September 30, 2025 decreased by $14.1 million, or 9.5%, as compared to the same period in 2024. Currency effects yielded an increase of approximately $2 million. The decrease in SG&A was primarily due to decreased research and development expense of $11.4 million, lower broad-based annual incentive compensation, decreased bad debt expense of $3.3 million, a $0.8 million one-time U.S. pension plan transition benefit charge incurred in the third quarter of 2024 that did not recur and decreased charges of $0.6 million related to our realignment activities as compared to the same period in 2024.

SG&A for the nine months ended September 30, 2025 decreased by $9.7 million, or 2.3%, as compared to the same period in 2024. Currency effects yielded minimal impact. The decrease in SG&A was primarily due to decreased research and development expense of $16.7 million, lower broad-based annual incentive compensation, a $0.8 million one-time U.S. pension plan transition benefit charge incurred in the third quarter of 2024 that did not recur and decreased charges of $0.2 million related to our realignment activities, partially offset by increased bad debt expense of $4.0 million as compared to the same period in 2024.

Operating income for the three months ended September 30, 2025 increased by $25.6 million, or 23.4%, as compared to the same period in 2024. The increase included currency benefits of approximately $4 million. The increase was primarily due to the $12.6 million increase in gross profit and the $14.1 million decrease in SG&A.

Operating income for the nine months ended September 30, 2025 increased by $83.0 million, or 23.6%, as compared to the same period in 2024. The increase included currency benefits of approximately $2 million. The increase was primarily due to the $72.2 million increase in gross profit and the $9.7 million decrease in SG&A.

Backlog of $2,006.5 million at September 30, 2025 increased by $76.1 million, or 3.9%, as compared to December 31, 2024. Currency effects provided an increase of approximately $98 million.

### Flow Control Division Segment Results

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. FCD leverages its experience and application know-how by offering a complete menu of engineered services to complement its expansive product portfolio. FCD has a total of 44 manufacturing facilities and QRCs in 22 countries around the world, with six of its 19 manufacturing operations located in the United States, seven located in Europe and the Middle East, five located in Asia Pacific and one located in Latin America. Based on independent industry sources, we believe that FCD is the second largest industrial valve supplier on a global basis.

*(Amounts in millions, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Bookings | $396.1 | $318.4 |
| Sales | 377.4 | 353.1 |
| Gross profit | 114.2 | 106.5 |
| Gross profit margin | 30.3% | 30.2% |
| SG&A | 67.8 | 59.8 |
| Segment operating income | 46.4 | 46.7 |
| Segment operating income as a percentage of sales | 12.3% | 13.2% |

*(Amounts in millions, except percentages)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Bookings | $1,126.1 | $1,008.3 |
| Sales | 1,112.9 | 1,021.4 |
| Gross profit | 322.1 | 305.5 |
| Gross profit margin | 28.9% | 29.9% |
| SG&A | 206.4 | 178.8 |
| Loss on sale of business | — | (13.0) |
| Segment operating income | 115.7 | 113.7 |
| Segment operating income as a percentage of sales | 10.4% | 11.1% |

As discussed above, we revised the end market categories for bookings during the first quarter of 2025. All bookings by industry amounts discussed below, including the 2024 comparative period, have been reclassified from five categories (*i.e.,* oil and gas, chemical, power generation, water management, and general industries) to four categories (*i.e.,* energy, chemical, power generation and general industries) to conform to our current classification of end markets.

Bookings for the three months ended September 30, 2025 increased by $77.7 million, or 24.4%, as compared with the same period in 2024. Bookings included currency benefits of approximately $2 million. The increase in customer bookings was driven by increased customer orders of $37 million in the power generation industry, $23 million in the chemical industry and $22 million in the general industries, partially offset by decreased customer orders of $6 million in the energy industry. Increased customer bookings were driven by increased orders of $36 million into Europe, $27 million into North America, $11 million into the Middle East, $7 million into Africa and $2 million into Latin America, partially offset by decreased orders of $7 million into Asia Pacific. The increase was driven by both original equipment and aftermarket bookings.

Bookings for the nine months ended September 30, 2025 increased by $117.8 million, or 11.7%, as compared with the same period in 2024. Bookings included negative currency effects of approximately $1 million. The increase in customer bookings was primarily driven by increased customer orders of $33 million in the power generation industry, $32 million in the general industries, $31 million in the energy industry and $12 million in the chemical industry. Increased customer bookings were driven by increased orders of $73 million into North America, $57 million into the Middle East, $8 million into Africa and $2 million into Latin America, partially offset by decreased orders of $29 million into Asia Pacific and $3 million into Europe. The increase was driven by both original equipment and aftermarket bookings.

Sales for the three months ended September 30, 2025 increased $24.3 million, or 6.9%, as compared with the same period in 2024. The increase included currency benefits of approximately $3 million. Increased sales were driven by aftermarket customer sales. The increase was primarily driven by increased customer sales of $22 million into North America, $4 million into Europe, $3 million into Latin America and $1 million into Africa, partially offset by decreased customer sales of $5 million into the Middle East and $4 million into Asia Pacific.

Sales for the nine months ended September 30, 2025 increased $91.5 million, or 9.0%, as compared with the same period in 2024. The increase included currency benefits of approximately $1 million. Increased sales were driven by both original equipment and aftermarket customer sales. The increase was primarily driven by increased customer sales of $46 million into North America, $25 million into Asia Pacific, $15 million into Latin America, $6 million into the Middle East and $6 million into Europe, partially offset by decreased customer sales of $6 million into Africa.

Gross profit for the three months ended September 30, 2025 increased by $7.7 million, or 7.2%, as compared with the same period in 2024. Gross profit margin for the three months ended September 30, 2025 of 30.3% increased from 30.2% for the same period in 2024. The increase in gross profit margin was primarily due to the favorable impact of previously implemented sales price increases and lower broad-based annual incentive compensation, partially offset by increased charges of $6.0 million related to our realignment activities and $2.6 million of integration costs and amortization of acquisition related intangible assets associated with the MOGAS acquisition as compared to the same period in 2024.

Gross profit for the nine months ended September 30, 2025 increased by $16.6 million, or 5.4%, as compared with the same period in 2024. Gross profit margin for the nine months ended September 30, 2025 of 28.9% decreased from 29.9% for the same period in 2024. The decrease in gross profit margin was primarily due to increased charges of $15.3 million related to our realignment activities and an increase of $9.5 million of integration costs and amortization of step-up in value of acquired inventories and acquisition related intangibles assets associated with the MOGAS acquisition, partially offset by the favorable impact of previously implemented sales price increases and lower broad-based annual incentive compensation as compared to the same period in 2024.

SG&A for the three months ended September 30, 2025 increased by $8.0 million, or 13.4%, as compared with the same period in 2024. Currency effects provided an increase of approximately $1 million. The increase in SG&A was primarily due to increased acquisition and integration costs and amortization of acquisition related intangibles assets associated with the MOGAS acquisition of $3.8 million and increased charges of $1.0 million related to our realignment activities, partially offset by lower broad-based annual incentive compensation and decreased bad debt expense of $0.5 million as compared to the same period in 2024.

SG&A for the nine months ended September 30, 2025 increased by $27.6 million, or 15.4%, as compared with the same period in 2024. Currency effects provided an increase of approximately $1 million. The increase in SG&A was primarily due to increased acquisition and integration costs and amortization of acquisition related intangibles assets associated with the MOGAS acquisition of $9.8 million and increased bad debt expense of $3.2 million, partially offset by decreased charges of $2.7 million related to our realignment activities, a $1.1 million decrease in research and development costs and lower broad-based annual incentive compensation as compared to the same period in 2024.

Loss on sale of business for the three and nine months ended September 30, 2025 decreased by $13.0 million due to the divestiture of NAF AB in 2024, a previously wholly owned subsidiary and control valves business within our FCD segment, including the NAF AB facility located in Linkoping, Sweden. The loss on sale of business is included within charges related to our realignment activities.

Operating income for the three months ended September 30, 2025 decreased by $0.3 million, or 0.6%, as compared with the same period in 2024. The decrease included negative currency effects of less than $1 million. The decrease was primarily due to the $8.0 million increase in SG&A, partially offset by the $7.7 million increase in gross profit.

Operating income for the nine months ended September 30, 2025 increased by $2.0 million, or 1.8%, as compared with the same period in 2024. The increase included negative currency effects of approximately $1 million. The increase was primarily due to the $16.6 million increase in gross profit and the $13.0 million loss on sale of business in 2024 that did not recur, partially offset by the $27.6 million increase in SG&A.

Backlog of $896.4 million at September 30, 2025 increased by $26.8 million, or 3.1%, as compared to December 31, 2024. Currency effects provided an increase of approximately $25 million.

### LIQUIDITY AND CAPITAL RESOURCES

### Cash Flow Analysis

*(Amounts in millions)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash flows provided by operating activities | $506.1 | $228.0 |
| Net cash flows (used) by investing activities | (44.5) | (54.1) |
| Net cash flows (used) by financing activities | (330.9) | (107.4) |

Existing cash, cash generated by operations and borrowings available under our Second Amended and Restated Credit Agreement are our primary sources of short-term liquidity. We monitor the depository institutions that hold our cash and cash equivalents on a regular basis, and we believe that we have placed our deposits with creditworthy financial institutions. Our sources of operating cash generally include the sale of our products and services and the conversion of our working capital, particularly accounts receivable and inventories.

Our cash balance increased by $158.4 million to $833.8 million at September 30, 2025, as compared with December 31, 2024. The cash activity during the first nine months of 2025 included cash provided by operating activities, $45.5 million in capital expenditures, $197.9 million of share repurchases, $82.7 million in dividend payments, $28.1 million of payments on our $500.0 million unsecured term loan facility (the "Term Loan") and $15.0 million contingent consideration payment related to the MOGAS acquisition.

For the nine months ended September 30, 2025, our cash provided by operating activities was $506.1 million, as compared to cash provided of $228.0 million for the same period in 2024. Cash flow used by working capital decreased for the nine months ended September 30, 2025, primarily due to increased cash flows provided by, or decreased cash flows used by, accounts receivable, inventories, accounts payable and accrued liabilities, partially offset by decreased cash flows provided by, or increased cash flows used by, contract assets, prepaid expenses and other assets and contract liabilities as compared to the same period in 2024.

Increases in accounts receivable used $26.1 million of cash flow for the nine months ended September 30, 2025, compared to cash used of $96.4 million for the same period in 2024. As of September 30, 2025, our days’ sales outstanding ("DSO") was 80 days as compared to 77 days as of September 30, 2024.

Increases in contract assets used $35.2 million of cash flow for the nine months ended September 30, 2025, as compared to cash used of $23.3 million for the same period in 2024.

Changes in inventory provided $26.7 million of cash flow for the nine months ended September 30, 2025, as compared to cash provided of $2.9 million for the same period in 2024. Inventory turns were 3.6 times at September 30, 2025, as compared to 3.5 times as of September 30, 2024.

Changes in accounts payable provided $31.2 million of cash flow for the nine months ended September 30, 2025, as compared to cash provided of $24.7 million for the same period in 2024. Decreases in accrued liabilities used $30.5 million of cash flow for the nine months ended September 30, 2025, as compared to cash used of $33.9 million for the same period in 2024.

Decreases in contract liabilities used $17.9 million of cash flow for the nine months ended September 30, 2025, as compared to cash provided of $8.5 million for the same period in 2024.

Cash flows used by investing activities during the nine months ended September 30, 2025 were $44.5 million, as compared to cash used of $54.1 million for the same period in 2024. Capital expenditures during the nine months ended September 30,

2025 were $45.5 million, a decrease of $6.6 million as compared with the same period in 2024. Our capital expenditures are generally focused on strategic initiatives to pursue information technology infrastructure, ongoing scheduled replacements and upgrades and cost reduction opportunities. In 2025, we currently estimate capital expenditures to be approximately $75.0 million, before consideration of any merger and acquisition activity.

Cash flows used by financing activities during the nine months ended September 30, 2025 were $330.9 million, as compared to $107.4 million of cash flows used for the same period in 2024. Cash outflows in the nine months ended September 30, 2025 resulted primarily from the $197.9 million in stock repurchases, $82.7 million of dividend payments, $28.1 million of payments on our Term Loan, $15.0 million contingent consideration payment related to the MOGAS acquisition and $11.6 million in payments related to tax withholding for stock-based compensation. Cash outflows during the nine months ended September 30, 2024 resulted primarily from the $82.8 million of dividend payments, $45.0 million of payments on our Term Loan, $50.0 million of payments on our Revolving Credit Facility and $20.1 million of share repurchases, partially offset by $100.0 million of cash proceeds from our Revolving Credit Facility.

As of September 30, 2025, we had an available capacity of $715.4 million on our Second Amended and Restated Credit Agreement, which provides for a $800.0 million unsecured revolving credit facility with a maturity date of October 10, 2029. Our borrowing capacity is subject to financial covenant limitations based on the terms of our Second Amended and Restated Credit Agreement and is also reduced by outstanding letters of credit. Our Second Amended and Restated Credit Agreement is committed and held by a diversified group of financial institutions. Refer to Note 7, "Debt and Finance Lease Obligations," to our condensed consolidated financial statements included in this Quarterly Report for additional information concerning our Second Amended and Restated Credit Agreement.

During the nine months ended September 30, 2025, we contributed $10.0 million to our U.S. pension plan, compared to $20.0 million in contributions for the same period in 2024. At December 31, 2024, our U.S. pension plan was fully funded as defined by applicable law. We continue to maintain an asset allocation consistent with our strategy to maximize total return, while reducing portfolio risks through asset class diversification.

Considering our current debt structure and cash needs, we currently believe cash flows generated from operating activities combined with availability under our Second Amended and Restated Credit Agreement and our existing cash balance will be sufficient to meet our cash needs for our short-term (next 12 months) and long-term (beyond the next 12 months) business needs. However, cash flows from operations could be adversely affected by a decrease in the rate of general global economic growth and an extended decrease in capital spending of our customers, as well as economic, political and other risks associated with sales of our products, operational factors, competition, regulatory actions, fluctuations in foreign currency exchange rates and fluctuations in interest rates, among other factors. See "Financing" and "Cautionary Note Regarding Forward-Looking Statements" below.

As of September 30, 2025, we have $254.9 million of remaining capacity for Board of Directors approved share repurchases. While we currently intend to continue to return cash through dividends and/or share repurchases for the foreseeable future, any future returns of cash through dividends will be reviewed individually, declared by our Board of Directors at its discretion and implemented by management.

### Financing

### Credit Facilities

See Note 7, "Debt and Finance Lease Obligations," to our condensed consolidated financial statements included in this Quarterly Report for a discussion of our Second Amended and Restated Credit Agreement and related covenants. We were in compliance with all applicable covenants under our Second Amended and Restated Credit Agreement as of September 30, 2025.

As of September 30, 2025, we have cash and cash equivalents of $833.8 million and $715.4 million of borrowings available under our Second Amended and Restated Credit Agreement. We do not currently anticipate, nor are we aware of, any significant market conditions or commitments that would change any of our conclusions of the liquidity available to us. We expect the liquidity discussed above coupled with the costs savings measures planned and already in place will further enable us to maintain adequate liquidity over the short-term (next 12 months) and long-term (beyond the next 12 months). We will continue to actively monitor the credit markets in order to maintain sufficient liquidity and access to capital throughout 2025.

### OUR CRITICAL ACCOUNTING ESTIMATES

Management’s discussion and analysis of financial condition and results of operations are based on our condensed consolidated financial statements and related footnotes contained within this Quarterly Report. Our critical accounting policies used in the preparation of our condensed consolidated financial statements were discussed in "Part II, Item 7. Management's

Discussion and Analysis of Financial Condition and Results of Operations" of our 2024 Annual Report. The critical policies, for which no significant changes have occurred in the nine months ended September 30, 2025, include:

- 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 process of preparing condensed consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions to determine certain of the assets, liabilities, revenues and expenses. These estimates and assumptions are based upon what we believe is the best information available at the time of the estimates or assumptions. The estimates and assumptions could change materially as conditions within and beyond our control change. Accordingly, actual results could differ materially from those estimates. The significant estimates are reviewed quarterly with the Audit Committee of our Board of Directors.

Based on an assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, we believe that our condensed consolidated financial statements provide a meaningful and fair perspective of our consolidated financial condition and results of operations. This is not to suggest that other general risk factors, such as changes in worldwide demand, changes in material costs, performance of acquired businesses and others, could not adversely impact our consolidated financial condition, results of operations and cash flows in future periods. See "Cautionary Note Regarding Forward-Looking Statements" below.

### ACCOUNTING DEVELOPMENTS

We have presented the information about pronouncements not yet implemented in Note 1, "Basis of Presentation and Accounting Policies," to our condensed consolidated financial statements included in this Quarterly Report.

### Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as, "may," "should," "expects," "could," "intends," "plans," "anticipates," "estimates," "believes," "predicts" or other similar expressions are intended to identify forward-looking statements, which include, without limitation, statements concerning our future financial performance, future debt and financing levels, investment objectives, implications of litigation and regulatory investigations and other management plans for future operations and performance.

The forward-looking statements included in this Quarterly Report are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements. Specific factors that might cause such a difference include, without limitation, the following:

- global supply chain disruptions and the current inflationary environment could adversely affect the efficiency of our manufacturing and increase the cost of providing our products to customers;
- a portion of our bookings may not lead to completed sales, and our ability to convert bookings into revenues at acceptable profit margins;
- changes in the global economic conditions and the potential for unexpected cancellations or delays of customer orders in our reported backlog;
- our dependence on our customers' ability to make required capital investment and maintenance expenditures;
- if we are not able to successfully execute and realize the expected financial benefits from our restructuring, realignment and other cost-saving initiatives, our business could be adversely affected;
- the substantial dependence of our sales on the success of the energy, chemical, power generation and general industries;
- the adverse impact of volatile raw materials prices on our products and operating margins;
- economic, political and other risks associated with our international operations, including military actions, trade embargoes, epidemics or pandemics and changes to tariffs or trade agreements that could affect customer markets, particularly North African, Latin American, Asian and Middle Eastern markets and global oil and gas producers, and non-compliance with U.S. export/re-export control, foreign corrupt practice laws, economic sanctions and import laws and regulations;
- the impact of public health emergencies, such as outbreaks of epidemics, pandemics, and contagious diseases, on our business and operations;
- increased aging and slower collection of receivables, particularly in Latin America and other emerging markets;
- potential adverse effects resulting from the implementation of new tariffs and related retaliatory actions and changes to or uncertainties related to tariffs and trade agreements;
- our exposure to fluctuations in foreign currency exchange rates, including in hyperinflationary countries such as Argentina;
- potential adverse consequences resulting from litigation to which we are a party, such as litigation involving asbestos-containing material claims;
- expectations regarding acquisitions and the integration of acquired businesses;
- the potential adverse impact of an impairment in the carrying value of goodwill or other intangible assets;
- our dependence upon third-party suppliers whose failure to perform timely could adversely affect our business operations;
- the highly competitive nature of the markets in which we operate;
- if we are not able to maintain our competitive position by successfully developing and introducing new products and integrate new technologies, including artificial intelligence and machine learning;
- environmental compliance costs and liabilities;
- potential work stoppages and other labor matters;
- access to public and private sources of debt financing;
- our inability to protect our intellectual property in the United States, as well as in foreign countries;
- obligations under our defined benefit pension plans;
- our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud;
- the recording of increased deferred tax asset valuation allowances in the future or the impact of tax law changes on such deferred tax assets could affect our operating results;
- our information technology infrastructure could be subject to service interruptions, data corruption, cyber-based attacks or network security breaches, which could disrupt our business operations and result in the loss of critical and confidential information; and
- ineffective internal controls could impact the accuracy and timely reporting of our business and financial results.

These and other risks and uncertainties are more fully discussed in the risk factors identified in "Item 1A. Risk Factors" in Part I of our 2024 Annual Report and Part II of this Quarterly Report, and may be identified in our Quarterly Reports on Form 10-Q and our other filings with the SEC and/or press releases from time to time. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any forward-looking statement.

## Market risk

As filed, 3,308 characters.

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 our 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 United States in currencies other than the U.S. dollar. Almost all of our non-U.S. subsidiaries conduct their business primarily in their local currencies, which are also their functional currencies. Foreign currency exposures arise from translation of foreign-denominated assets and liabilities into U.S. dollars and from transactions, including firm commitments and anticipated transactions, denominated in a currency other than our or a non-U.S. subsidiary’s functional currency. We recognized net gains (losses) associated with foreign currency translation of $(16.9) million and $52.9 million for the three months ended September 30, 2025 and 2024, respectively, and $142.3 million and $0.2 million for the nine months ended September 30, 2025 and 2024, respectively, which are included in other comprehensive income (loss).

We employ a foreign currency risk management strategy to minimize potential changes in cash flows from unfavorable foreign currency exchange rate movements. Where available, the use of foreign exchange forward contracts allows us to mitigate transactional exposure to exchange rate fluctuations as the gains or losses incurred on the foreign exchange forward contracts will 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. As of September 30, 2025, we had a U.S. dollar equivalent of $199.3 million in aggregate notional amount outstanding in foreign exchange forward contracts with third parties, as compared with $695.9 million at December 31, 2024. Transactional currency gains and losses arising from transactions outside of our sites’ functional currencies and changes in fair value of non-designated foreign exchange forward contracts are included in our consolidated results of operations. We recognized foreign currency net gains (losses) of $(5.4) million and $(3.2) million for the three months ended September 30, 2025 and 2024, respectively, and $(36.8) million and $(2.1) million for the nine months ended September 30, 2025 and 2024, respectively, which are included in other income (expense), net in the accompanying condensed consolidated statements of income.

Based on a sensitivity analysis at September 30, 2025, a 10% change in the foreign currency exchange rates for the nine months ended September 30, 2025 would have impacted our net earnings by approximately $30.0 million. This calculation assumes that all currencies change in the same direction and proportion relative to the U.S. dollar and that there are no indirect effects, such as changes in non-U.S. dollar sales volumes or prices. This calculation does not take into account the impact of the foreign currency exchange forward contracts discussed above.

## Controls and procedures

As filed, 1,542 characters.

### Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are controls and other procedures that are designed to ensure that the information that we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

In connection with the preparation of this Quarterly Report, our management, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2025. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2025.

### Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 1,361 characters.

There are numerous factors that affect our business, financial condition, results of operations, cash flows, reputation and/or prospects, many of which are beyond our control. In addition to other information set forth in this Quarterly Report, careful consideration should be given to "Item 1A. Risk Factors" in Part I and "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our 2024 Annual Report, which contain descriptions of significant factors that might cause the actual results of operations in future periods to differ materially from those currently projected in the forward-looking statements contained therein.

There have been no material changes in risk factors discussed in our 2024 Annual Report and subsequent SEC filings. The risks described in this Quarterly Report filed for the period ended September 30, 2025, our 2024 Annual Report and in our other SEC filings or press releases from time to time are not the only risks we face. Additional risks and uncertainties are currently deemed immaterial based on management's assessment of currently available information, which remains subject to change; however, new risks that are currently unknown to us may surface in the future that materially adversely affect our business, financial condition, results of operations or cash flows.

Filed Oct 28, 2025.
Source: SEC EDGAR, the filing index for accession 0000030625-25-000072. Last ingested by Listed: Nov 2, 2026, 20:24 ET. No prices; not investment advice.