flowserve corporation (fls)

Washington, D. C. Securities and Exchange CommissionC. 20549Form10-
Annual reports submitted under sections 13 or 15 (d)
Under sections 13 or 15, the Securities Trading Act for the fiscal year ended 1934, December 31, 2016 (d)
1934 Securities Trading Act of Commission Document No. 1-
13179 forth company (
The exact name of the registrant specified in the articles of association)New York31-0267900(
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Main executive office address)(Zip Code)
The registrant\'s telephone number, including the area code :(972)443-
6500 securities registered under article (b)
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The related company of the registrant, calculated by reference to the closing price of the common stock of the registrant, such as june30, 2016 (
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It\'s about $3,389,096,066.
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The number of outstanding ordinary shares of the registrant is 2017 shares, 520,401 shares, shares.
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Fox Company 10-
Report on the final accounts of KTABLE CONTENTSPagePARTIItem. Business 1A.
Risk factor item 6.
Selected Financial Data Items 7.
Management Discussion and Analysis of operational financial status and results
Quantitative and qualitative disclosure of market risks
Item 9A of financial statements and supplementary data.
Control and procedures.
Annex, schedule of financial statements-31. 1EX-31. 2EX-32. 1EX-32. 2EX-
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101 definition LINKBASE file iEXPLANATORY NOTEFlowserve Corporation is submitting this amendment on Form 10
Annual report K/A on table 10
K. Fiscal 2016 originally submitted to the Securities and Exchange Commission on February 16, 2017 (
[Original record]
The following changes were made: Item 1A was amended.
Risk factors add an additional risk factor indicating the potential adverse effects of significant weaknesses that may have on our timely and accurate reporting of financial results. Item 8 was amended.
The report of the independent Certified Public Accountants is related to the report of the independent certified public accountants on the internal control of our financial reports and supplementary data.
Revise irrelevant errors in Consolidated Financial Statements previously published in the original filing in item 1.
Business, Project 6.
Selected Financial Data, Item 7.
Item 7A, discussion and analysis of management.
Qualitative and quantitative disclosure on market risks and Item 8.
Financial statements and supplementary information.
Modify item 9A.
Controls and procedures related to the effectiveness of our disclosure controls and procedures and internal controls over financial reporting.
On July 27, 2017, we announced that in the second quarter of 2017, we identified significant defects in the annual internal control structure as at December 31, 2016 and continued until the end of 2017.
To reflect this change, Item 9A controls and procedures are modified in this article.
In addition, certain insignificant accounting errors were found in the previous financial statements as of 2017, which occurred mainly in two non-U. S.
Mainly related to certain inventory, accounts receivable, sales and sales costs, balance of general and administrative expenses.
Although it is not important during any previous year or quarter period, in order to facilitate the comparison in each period, we have revised the consolidated financial statements contained in this amendment, and the amendment to our Form 10.
Q. For the quarterly period ended March 31, 2017, reflecting the revision of our consolidated financial statements for the fiscal year ended December 31, 2016, 2015 and 2014 and the unaudited consolidated financial statements for the fiscal quarter ended March 31, 2017 and 2016.
For further discussions on revised adjustments, see Note 2 and \"Item 7\" to the consolidated financial statements \".
Management\'s Discussion and Analysis of financial status and operational results\"K/A.
This amendment has not been updated or amended so that any subsequent events occur prior to the original filing date, and therefore shall be in conjunction with the original filing and other documents submitted by any company to the Securities and Exchange Commission (\"SEC\")
After the original filing, and any changes to these filing.
Project 1.
Business View Flowserve Corporation is a leading manufacturer and after-sales service provider of integrated flow control systems worldwide.
We were founded in New York state in the name of a predecessor entity in May 1, 1912.
The Flowserve Corporation, which exists today, was created in 1997 through the merger of two leading fluid motion and control companies --
BW/IP and Durco International.
Over the years, we have acquired through organic growth and strategy, as well as our 220-
The Annual History of the Flowserve heritage brand is the foundation of the breadth and depth of our products and services today.
Unless otherwise stated in the context, references to words such as \"Flowserve\", \"company\" and \"we\", \"we\" and \"we\" include Flowserve Corporation and its subsidiaries.
We develop and manufacture precision
Engineering flow control equipment is an indispensable equipment for the movement, control and protection of material flow in our customers\' key processes.
Our portfolio of pumps, valves, seals, automation and after-sales services supports the global infrastructure industry, including oil and gas, chemistry, Power Generation (
Including nuclear, fossil and renewable energy)
And some general industrial markets where our products and services add value.
Through our manufacturing platform and global network of rapid response centers (\"QRCs\")
We offer a wide range of after-sales equipment services such as installation, advanced diagnostics, repairs and modifications.
We sell our products and services to more than a million companies, including some of the world\'s leading engineering, procurement and construction companies (\"EPC\")
Original equipment manufacturer, distributor and end user.
Our products and services are used in several different industries with a wide geographical range.
Our pre-order portfolio by industry in 2016 and 2015 includes: 2016-12-il oil and gas36 % 36% general industry (1)
25% 24% chemical21 % 22% power generation 14% 14% 4% water management 4% (1)
The general industry includes mining and ore processing, pharmaceutical, pulp and paper, food and beverage, and other smaller applications, as well as sales to dealers that end customers usually operate in the industry we serve primarily.
We in 2016 and 2015 sales of geographical regional broken down as follows: 20162015 North America 40% 39% Europe 22% 22% Asia-Pacific 18% 18% in Middle East and Africa 13% 12% Latin America 7% 9% we implementation the industry diversity and geographical breadth strategy, to mitigate the impact on our business the normal economic downturn in any industry or any specific region of the world in which we serve.
For events that may occur and adversely affect our business, financial position, operating results, and cash flow, see Project 1A \".
Table 10-\"Risk Factors\" reported this year\"
2016 K/(Annual report).
Information about our sales and long term sales
For living assets by geographical region, see Note 16 to the consolidated financial statements contained in Item 8.
Financial statements and supplementary data (\"Item8\")
This annual report
We operate through three business units based on the type of product and how we manage the business: Engineering Product Department (\"EPD\")
Long delivery time, custom and other heights-
Engineering pumps and pump systems, mechanical seals, auxiliary systems and replacement parts and related services;
Industrial Products Division (\"IPD\")for pre-
Engineering pump and pump system and related products and services;
1 traffic control division (\"FCD\")
For engineering and industrial valves, control valves, actuators and controllers, and related services.
Our business units are focused on industrial flow control technology and benefit from our global footprint and economies of scale to reduce administrative and indirect costs and serve our customers more economically.
EPD and IPD have a large number of common customers and complementary products and technologies that are often combined in applications that provide us with a net competitive advantage.
Certain resources and functions are shared by all departments, including R & D elements (\"R&D\")
Supply chain, safety, quality assurance and management functions that provide an efficient and overall lower cost structure.
Our operations leaders report to our coo that these departments have leadership in operational support functions such as R & D, marketing, and supply chain.
We believe that this leadership structure enables the company to leverage operational excellence, cost reduction initiatives and internal synergies across the operating platform to drive further growth and increase shareholder value.
Our sales, product management and commercialisation, R & D and strategic leadership report to our chief sales and strategy officer.
We believe that this structure enables the company to execute a coordinated customer-
Focusing on business and sales strategies, promote collaboration and best practices across the organization to drive growth.
Strategy our primary goal is to expand our position as a provider of products and integrated solutions in the traffic control industry.
This goal involves continuing to sell products on the basis of existing sales relationships and leveraging the power of our portfolio of products and services to attract new customers.
It also includes providing specific terminals.
User solutions that help customers achieve their business goals by ensuring maximum reliability at a lower cost of ownership.
This goal is achieved by cultivating our employees with workplace safety, ethical and transparent business practices and a corporate culture focused on serving our customers.
These three pillars support a collaborative \"one process service\" approach that leverages a diverse and inclusive working environment around the world.
We seek to drive growth in corporate value through the following strategies: disciplined profitable growth, customer intimacy, innovation and portfolio management, strategic localization, operational excellence, employee focus and sustainable business models
Key elements of these strategies are outlined below.
Disciplined earnings growth focuses on profit growth from our existing product and service portfolio and through the development or acquisition of new customers --
Products and services.
Its overall goal is to focus on opportunities to maximize the organic growth of existing customers and evaluate potential new customers --
Cooperation plan to maximize product lifecycle value.
We believe that we are the largest pump, Valve and sealing company that can provide customers with differentiated options for a variety of flow management products and services, and provide additional options that include any combination of product and solution support packages.
We also seek to continue to review the large number of pumps, valves and seals that we have installed to expand our after-sales parts and service business.
To date, the after-sales market business has provided us with a stable source of revenue and cash flow at a profit rate higher than the usual realization of original equipment sales.
After-sales market sales accounted for 45% and 43% of total sales respectively.
We are building on our established business through a wide global QRC network, providing the immediate parts, services and technologies needed to effectively manage and expand the aftermarket business created from our installation base
Customer relationships through our ongoing relationships with our customers, we seek to have a rich understanding of their business objectives and how our portfolio best helps them succeed.
We work with our customers
Drive the final engineering and design work of the process management solution to effectively produce the required business results.
As we progress through the original equipment project, we work closely with our customers to understand and prepare for the long term
In order to maximize the value of the entire life cycle of customer investment, long-term support needs for their operations.
We seek to create mutually beneficial opportunities for us and our customers through the procurement and maintenance Alliance Program, in which we provide all or agreed upon services to obtain more after-sales service
According to part parts and service requirements of customer.
These alliances enable us to grow in the long term.
Establish long-term relationships with our customers and be an effective platform to introduce new products and services and generate additional sales.
Innovation and portfolio management the ongoing management of our portfolio of products and services is critical to our success.
As part of managing our portfolio, we will continue to optimize our portfolio of products and services to ensure alignment with changing market needs.
We will also continue to invest in R & D to expand the scope of our products and the deployment of advanced technologies.
Injecting advanced technology into new products and services continues to play a key role in the continued development of our portfolio.
Our goal is to increase new product revenue as a percentage of total sales, leverage technological innovation to improve the entire product lifecycle and reduce the total cost of ownership for our customers.
We employ robust portfolio management and project execution processes, look for new product and technical opportunities, evaluate their potential return on investment, and allocate resources to their development in priority order.
Each project regularly reviews performance measures such as time to market, net present value, Budget compliance, technical and commercial risks, and compliance with customer requirements.
Deploy technical skills and knowledge across business unit boundaries to ensure we bring the best capabilities for each project.
Overall, our R & D portfolio is the key to differentiate our products and services from other competitors in the target market.
We are committed to exploring and commercializing new technologies.
In many of our research areas, we work with universities and experts in the appropriate fields of science to speed up the required learning and shorten the development time, leverage the value of applied technology in our products and services.
Our goal is to be a market leader in the application of advanced technology to improve product performance and return on investment for our customers.
We have been successful in monitoring and diagnosing traffic control devices remotely for our customers.
Our approach is to build on this success by leveraging new technologies and the best technologyin-
First-class technology partners.
The growth and acceleration in this area has created new opportunities for our existing capabilities, as well as opportunities to provide more comprehensive solutions to help our customers leverage their infrastructure investments, and have a new understanding of the performance and reliability of their pump and flow control products.
Working with bestin-
Top-notch technology vendors provide a mutually beneficial opportunity for Flowserve and our partners to continuously evaluate acquisitions by optimizing their operational performance and reducing their total cost of ownership, provide customers with joint ventures and other strategic investment opportunities to expand our product portfolio, service capabilities, and meet the growing needs of customers.
We evaluate all investment opportunities through the decision-making filtering process to ensure good strategic, financial and cultural alignment.
Strategic localization continues to drive our global growth strategy.
While we are a global company, we recognize that opportunities remain.
Therefore, we strive to advance our presence in geographic areas that we believe are critical to our future company\'s success by focusing on the following areas: expanding our global presence to open up local markets;
Expand our low
Cost manufacturing capacity for local markets and exports in Southeast Asia and Latin America; utilizing low-
Cost sourcing opportunities to remain competitive in the global economy;
Attract and retain the global intellectual capital needed to support our growth plans in the new geographic region.
We believe that there are attractive opportunities in international markets, especially in Africa, China, India, Latin America and the Middle East. We intend to continue to tap into these markets with our global business and strategic investments.
In the after-sales service business, we seek to strategically increase QRC sites in order to provide our customers with fast response, fast delivery and on-site repair on a global scale.
We believe that our future success will be supported by investment to build local businesses and effectively serve the local market while leveraging low
Support cost manufacturing, qualified engineering and strategic procurement for local markets and exports.
We believe this will enable us to support our global customers from project conception to commissioning and throughout our operations.
For example, we are currently expanding our pump and valve business in China, expanding the valve business in India and expanding the pump business in Mexico.
3 We continue to develop and increase our manufacturing, engineering and purchasing functions
As we drive higher value, cost regions and emerging markets such as India, China, Mexico, Latin America, the Middle East and Eastern Europe
Add from our material and component supply base and meet local content requirements.
These lower ones
The cost area provides direct materials to our business units, ranging from 25% to 35% of the expenditure of the business unit.
Operational Excellence strategy encapsulates ongoing projects designed to improve customer satisfaction and internal productivity.
This initiative includes: passing indicators (such as on-
Time delivery, cost reduction, quality, cycle time reduction and warranty cost reduction as a proportion of sales;
Continue to develop a culture of continuous improvement to provide maximum productivity and cost efficiency;
Achieve global functional capabilities and drive standardized processes.
We improve operational efficiency by continuously improving processes (\"CIP\")
Leverage tools such as value analysis, value engineering, Six Sigma methodology, lean manufacturing, and capability management to improve quality and processes, reduce product cycle times, and reduce costs.
Recognizing that employees are the most valuable resource to achieve operational excellence objectives, we have developed CIP training to maximize the impact on our business.
On this date, we have about 700 CIP-
Training or certification as \"green belt\", \"Black Belt\" or \"main black belt\" and deployment on CIP projects throughout our operations and business support functions.
Due to the CIP program, we have developed and implemented processes in different locations to reduce the cycle time of our engineering and manufacturing processes and improve on-
Service response time, optimize working capital level and reduce costs.
We have also been successful in sharing and applying the best practices achieved by a business unit and other departments that deploy these ideas to the business.
We continue to plan for existing enterprise resources (\"ERP\")
Systems on six strategic ERP systems.
In the future, these six strategic ERP systems will be maintained as core systems with a set of standard tools and will be enhanced as needed to meet the growing business needs in areas such as e-commerce
Business, background optimization, export compliance.
Not likely yet.
The strategic ERP system will be limited to compliance matters and conversion to the strategic ERP system.
We also strive to improve the utilization of working capital, with a particular focus on the management of accounts receivable and inventory.
See further discussion in the Liquidity and Capital Resources section of Item 7.
Management\'s Discussion and Analysis of financial status and operating results \"(\"Item 7\")
This annual report
Employees focus on several elements of our strategic efforts to continuously improve organizational capabilities, including: combining our succession planning with our core competencies and performance management capabilities, focus on key positions and key talent pools;
Leverage these competencies to drive employee engagement through our training programs and leadership development programs and to promote our cross-border
Business Segmentation and function development tasks;
Develop talent recruitment plans to meet current and future key talent needs to support our emerging markets and global growth;
Acquire knowledge capital in the existing workforce, spread knowledge capital throughout the company, and share knowledge capital with customers as a competitive advantage;
Create a comprehensive compensation plan that provides fair opportunities for our employees that are competitive and linked to business and individual performance while promoting employee behavior in line with our business code of conduct and
Build a diverse and globally inclusive organization that builds a strong culture of ethics and compliance based on transparency and trust.
4 We continue to focus on training for our business code of conduct, workplace harassment, facility safety, counter
Bribery, export compliance and other regulatory and compliance programs.
We also drive our training and leadership development programs by deploying General Manager Development, manager capabilities and a range of multi-faceted capabilities
Focus on language projects that improve people\'s management skills.
The focus of the sustainable business model initiative is on areas that have the potential to adversely affect our reputation, limit our financial flexibility or create unnecessary risks for any of our stakeholders.
We actively manage the risk management plan of the enterprise, and regularly review the high
The level of our board.
We work with our funding sourcing partners to ensure our credit facility and long term
Regular debt is properly aligned with our business strategy.
We also train and monitor our employees in legal or ethical aspects to support understanding and compliance worldwide.
Despite the integration activities in the past few years, the market for our products is still very competitive, the main competitive factors are price, reputation, project management, timeliness of delivery, quality, proximity to the service center and technical expertise, as well as the terms of the contract and previous installation history.
In the process of pursuing large capital projects, the motivation and competition of competition vary from industry to product involved.
Slow-growing industries are often more severely affected by prices because supply exceeds demand, and price competition is often more important for original equipment orders than after-sales service.
Given the domestic and global economic environment in 2016 and the current forecast for 2017, pricing was, and may still be, a particularly influential competitive factor.
The \"business unit\" title below discusses in more detail the unique competitive environment for each of our three business units.
In the after-sales market part of our business, we
In some markets, national and global competitors have been established with regional and local companies.
In the oil, gas and chemical industries, the main competitors of after-sales service are often the customers themselves.
The ability of the house.
In the nuclear power industry, we have a certain competitive advantage due to our \"N stamp\" certification, which is a prerequisite for serving customers in the industry, as well as a foundation of our proprietary knowledge.
The after-sales market competition for standardized products is fierce as there are general standards that allow for easier replacement or repair of installed products.
In the sale of after-sales products and services, we benefit from the large installation base of pumps, valves and seals, which are constantly in need of maintenance, due to the nature and operating conditions of the products, repair and replace parts.
When selecting after-sales products and service providers, the timeliness of delivery, quality and proximity of the service center are important customer considerations.
In our local location to provide a fast response geographic area, customers traditionally rely on us, not our competitors, to produce after-sales products that are highly relevant to us.
Although we see more and more competition in this field, we have designed and customized our products.
In general, our customers try to reduce the number of suppliers they buy, thus reducing the size and diversity of the supply chain.
Although the supplier reduction plan may adversely affect our business, we have successfully established long-term
Regular supply agreements with many customers.
While most of these agreements do not provide us with exclusive rights, they can provide our customers with a \"preferred\" position, thereby increasing the chances of winning a future business.
We also use our LifeCycle Advantage program to build costs-
Manage contracts for customer after-sales needs.
These initiatives provide an opportunity to manage the customer\'s installation base and expand the business relationship with the customer.
Our ability to use our portfolio of products, solutions, and services to meet customer needs is a competitive advantage.
Our market approach is to create value for customers throughout their life cycle of investment flow control management.
We continue to explore and develop potential new products with our customers.
In the early stages of project design, we strive to create value for customer-specific application optimization device selection, because even outside the scope of our specific products, solutions and services, we are also able to provide technical expertise in product and system capabilities.
After the equipment is built and delivered to the customer site, we continue to create value through after-sales service capabilities, optimizing the performance of the equipment during the service life of the equipment.
Our technical service personnel can provide these after-sales services for our products and many competitors\' products within the installation base.
The global reach of our QRCs further enhances this value when combined with our other solutions to meet customer traffic control management needs, allows us to create value for our customers at all stages of the capital and operating expenditure cycle.
We spent $42 developing new products. 8 million,$45. $9 m and $40 m.
9 millionduring2016, 2015 and, respectively, in the company-
Sponsored R & D program.
Our R & D team consists of engineers involved in new product development and improvement of existing products.
In addition, we sponsor research projects that work with universities and work together with certain suppliers, licensees and clients on limited development.
We believe that our R & D spending is sufficient to sustain our ongoing and necessary future product development.
In addition, we work closely with our customers on the customer side
Sponsored research activities to help execute their R & D programs related to our products and services.
New product development for each of our three business units will be discussed in more detail under the \"business unit\" heading below.
Customers we sell to a wide range of customers worldwide, including leading EPC companies, OEMs, distributors and end users in several different industries: oil and gas, chemical, power generation, water management and general industry.
We believe that we do not sell products that represent 10% or more of consolid2016 revenue to any individual customer.
Customer information related to each of our three business units will be discussed in more detail under the \"business unit\" heading below.
In order to meet the customer\'s delivery requirements, we usually do not need to carry abnormally high inventory, although a higher backlog level and a longer lead time usually require a higher inventory quantity.
We usually ask customers to advance cash on longer lead time items to help offset our investment in inventory.
We have launched projects aimed at improving operational efficiency to reduce our overall working capital requirements.
While we do provide a cancellation policy through a contractual relationship, we generally do not provide the customer with the right to return the product.
Sales and Distribution we distribute our products mainly by direct sales to employees assigned to specific regions, industries or products.
In addition, we use distributors and sales reps to supplement our direct sales staff in countries that are more appropriate due to business practices or customs, or, when the use of direct sales personnel is economically inefficient.
We generate most of our leads through existing relationships with suppliers, customers and potential customers or through referrals.
Intellectual property we have many trademarks and patents related to the name and design of our products.
We consider our trademarks and patents to be valuable assets of our business.
In addition, our pool of proprietary information by knowledge-
Trade secrets related to the design, manufacture and operation of our products are considered particularly valuable.
We therefore take active measures to protect this proprietary information.
We usually have the right to the products we manufacture and sell and are not subject to licensing or franchise agreements.
As long as the trademark continues to be used, our trademark can usually be updated indefinitely, while our existing patents are usually 10 to 20 years from the date of submission, which has occurred during different periods in the past.
We do not believe that the expiration of any patent will have a significant adverse effect on our business, financial position or results of operations.
The main raw materials used in the manufacture of our products are ready-made, including black and non-ferrous metals
Black metal in the form of Rod, machined castings, fasteners, forgings and motors and silicon, carbon surfaces, washers and fluorine polymer components.
We have purchased a large amount of raw materials from external sources and we have been able to develop a strong supply chain and expect no serious shortage of such materials in the future.
We constantly monitor the business conditions of our suppliers to manage the competitive market conditions and avoid potential supply disruptions.
We continue to expand global sourcing, leveraging localization and low in emerging markets
The source of costs for purchasing goods is balanced with efficient integration and compliant logistics.
Metal castings for the manufacture of our pumps, valves and mechanical seals are purchased from qualified and approved casting sources.
In some strategic product lines, we maintain vertical integration with metal castings.
6 Regarding the products we supply to our customers in the nuclear power industry, the raw material suppliers in the nuclear power market must be qualified to meet the requirements of the nuclear power industry standards and government regulations.
The supply channels for these materials are currently sufficient and we expect that there will be no difficulty in obtaining them in the future.
We have about 2016 employees around the world.
In the United States (\"U. S. \")
, Our pump manufacturing plant in Vernon, California, the valve manufacturing plant in Fort linchburg, Virginia, and part-hour staff at the foundry in Dayton, Ohio, represented by the Union.
In addition, some employees at specific facilities in the following countries have formed trade unions or have staff working committees: argentina, Australia, Austria, Brazil, Finland, France, Germany, India, Italy, Mexico, the Netherlands, Spain, South Africa, Sweden, Thailand and the United Kingdom (\"U. K. \").
We believe that our relationship with employees is generally satisfactory throughout the operation, including those represented by the Union and the staff work committee.
Of our combined income of 2016, none of the unionized facilities accounted for more than 10%.
In all jurisdictions where we have operating facilities, we have to comply with environmental laws and regulations.
These requirements mainly involve the generation and disposal of waste, air discharge and waste water discharge.
We make capital expenditures on a regular basis to strengthen our compliance with environmental requirements and to reduce and control pollution.
At present, we do not plan to pay any material capital expenditure for environmental control equipment at any of our facilities.
However, we have and will continue to bear the operating costs associated with ongoing environmental compliance.
Based on existing and proposed environmental requirements and our expected production schedule, we do not believe that future environmental compliance expenditures will have a significant adverse effect on our financial position, operating results or cash flow.
We use hazardous substances and produce hazardous waste in many manufacturing and casting operations.
Most of our current and previous properties are used or have been used for industrial purposes and some may need to be cleaned
Rising pollution in history.
During the due diligence phase of our acquisition, we conduct an environmental site assessment to identify potential environmental responsibility and the cleaning requiredup measures.
We are currently tracking.
Conduct investigation and/or remediation activities where we have known environmental issues.
We have cleared most of the sites with known historical pollution and are working on the remaining identified issues.
Over the years, we have been involved as one of many potential responsible parties (\"PRP\")
A former public waste disposal site that is or is being investigated and remedied.
Currently, we are involved as PRP for five Superfund sites.
These sites are at different stages of assessment by government authorities.
It is expected that our projected \"fair share\" total cost allocation in these five locations will be irrelevant. See \"Item3.
For more information, see \"legal action\" in this year\'s report \".
We have established reserves that we currently believe are sufficient to cover the reserves we have identified at the momentsite and off-
Site environmental responsibility.
Export sales from the United StatesS.
It is $259 for foreign unrelated customers.
$295.
$338. Millionaire.
Permits are required in the United States. S.
Other government agencies that export certain products.
In particular, products with nuclear power generation and/or military applications are restricted, as with certain other pumps, valves and sealing products.
In addition to the business department information described below, the Business Department, consolidated financial statements Note 16 in item 8 of this year\'s report contains additional financial information about the business units and geographical regions where we operate in 2016, 2015 and 2014.
Our largest business unit is EPD, through which we design, manufacture, distribute and service customization and other heights
Engineering pumps and pump systems, mechanical seals, auxiliary systems, replacement parts and related services.
EPD includes longer lead time, height-
Engineering pump products, as well as shorter cycle engineering pumps and mechanical seals that are usually manufactured in a shorter lead time.
The Environmental Protection Department will also manufacture replacement parts and related equipment and provide a full range of replacement parts, repair and support services (
Collectively referred to as \"post market \").
EPD products and services are mainly used by companies operating in the oil and gas, power generation, chemistry, water management and general industries.
We sell our pump and mechanical sealing products through our global sales team and our regional QRCs as well as service and repair centers, or through independent distributors and sales reps.
Some of our mechanical sealing products are sold directly to the original equipment manufacturer for rotating equipment that requires mechanical sealing.
Our pump products are manufactured in a variety of metal alloys and in a variety of configurations to meet the critical operational needs of our customers.
Mechanical seals are essential for reliable operation of rotating equipment as they prevent leakage and discharge of harmful substances from rotating equipment and reduce the use of non-
Mechanical seal.
We also made a gas.
Mechanical seal for high lubrication
Speed compressors for gas pipelines as well as for oil and gas production and processing markets.
Our products are currently produced in 32 factories around the world, of which 10 are in Europe, 10 are in North America, 7 are in the Asia Pacific region and 5 are in Latin America.
We also conduct business through strategic joint ventures.
We have six unincorporated joint ventures in China, India, Japan, Saudi Arabia, South Korea and the UAE, and some of our products are made there and assembled or served in these areas.
These relationships offer many strategic opportunities, including increased access to our current and new markets, additional manufacturing capabilities, and expansion of our operating platform to support low
Cost sourcing plans and capacity requirements in other markets.
We produce more than 40 different types of pumps and about 18 mechanical sealing and sealing systems of 5 different models.
Here is a summary list of our EPD products and globally recognized brands: Bearings product types are between bearing pumps
Case of axial SplitAPI processor-
Multi-phase barrier sealing of mechanical seal and seal support system-
Nuclear power pump recycling of professional products for Operation sealing-
Recovery of DWEERNuclear SealsPower
Concrete hydraulic defocus system wireless transmission sapi mud pump 8epd brand name bw seal cycle advantages Byron Jackson Nita watchinkard Energy Recovery Unit™CameronPacificDurametallicPacific weitzfed WirelessPac-
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SimpsonEPD service we provide engineering after-sales service through our global network
Manufacturing plants in 47 countries.
Our EPD service staff provides a full range of equipment services for traffic management control systems including installation, commissioning, repair, advanced diagnostics, re-installation
Provide comprehensive asset management solutions, processing solutions and transformation solutions.
We provide asset management services and status monitoring for rotating equipment by signing special contracts with many customers who reduce maintenance costs.
Most of the EPA\'s service work is carried out on the basis of rapid response. we provide 24-
Hourly service in all our major markets.
As customer applications become more advanced and require a higher level of production, our investment in new product development continues to focus on improving our product capabilities (i. e.
Flow, power and pressure)
In more extreme conditions beyond the level of traditional technology.
We continue to develop innovations to improve product performance and our competitive position in the engineering equipment industry, especially for pipeline, offshore and downstream applications for the oil and gas markets.
The emergence of extreme pressure applications has prompted the development of an advanced stage design and construction of high-pressure testing capability, which is necessary to validate the technology before introducing the market.
With the exploration of new energy power generation, we continue to develop new product designs to support the most critical applications in the power generation market.
The new design and qualification testing program continues to support key services at modern nuclear power plants.
By completing advances in Coke cutting technology, improvements in nozzle design and auxiliary equipment, and the creation of an automatic cutting system to improve operator safety, we demonstrate continuous contact with end users.
We continue to address our core products through design improvements to improve performance and the speed at which we deliver our products.
The application of advanced computational fluid dynamics methods using non-constant flow analysis has led to the development of advanced inlet chamber and impeller blade design for high energy jet pumps.
Our engineering team continues to apply and develop complex design techniques and methodologies to support continuous improvement of our proven technologies.
In addition, we are motivating our operations and tracking R & D projects more closely, which will lead to a wider involvement in the development of new products.
Over the course of 16 years, we have continued to advance our insight platform.
Previously known as technological advantage)
Organization through integrated solutions (\"ISO\").
The platform leverages the combination of technology we develop and leading technology partners to enhance our asset management and service capabilities for our terminalsuser customers.
These technologies include smart devices, advanced communication and security protocols, wireless and satellite communications, and web-
Data Fusion is enabled.
In addition, we have been exploring \"additive manufacturing\" opportunities in products and ancillary systems.
None of these newly developed products or services require significant investment in our assets or a significant impact on our business.
A diverse portfolio of 9EPD customers includes leading EPC companies, OEMs, distributors and end users.
The sales mix of our original equipment products and after-sales products and services diversify our business and help mitigate the impact of normal economic cycles on our business.
Our sales are diversified in several industries such as oil and gas, power generation, chemistry, water management and general industry.
The pump and mechanical sealing industry is highly dispersed with hundreds of competitors.
However, we mainly compete with a limited number of large companies operating worldwide.
The competition between our closest competitors is usually driven by delivery time, expertise, price, product type, contract terms, previous installation history and reputation for quality.
Our biggest competitors in the industry include: suershou pump; Ebara Corp. ; SPX FLOW, Inc. ;
Eagle Bergman, a joint venture between two traditional global sealing manufacturersW. Chesterton Co. and AES Corp. ; John Crane Inc.
A unit of Smith Group Limited;
And will Group Ltd.
The pump and mechanical sealing industry continues to experience considerable integration, mainly (i)
Need to reduce excess capacity and (ii)
Customers tend to align with global full service providers to streamline their supplier base.
Despite the integration activities, the market competition is still fierce.
We believe that our strongest source of competitive advantage lies in the wide range of pumps we offer to the oil and gas, chemical and power generation industries, our vast product installation base, our strong customer relationships, we have more than 200 years of traditional experience in manufacturing and repairing pumping equipment, and we have a reputation for providing quality engineering solutions, and our ability to deliver engineering new sealed product orders within 72 hours of customer request.
As of the 31st, the backlog of orders of $2016 was $968. 8 million(including$11.
7 million of the inter-departmental backlog has been eliminated and is not included in the consolidated backlog)
Compared to $1,1605 million (including$10.
5 million backlog between departments)
As of the 2015 th.
We expect that in dec7 years we will ship about 2016 of the backlog.
We design, manufacture, distribute and serve industrial products through IPD
Engineering pumps and pump systems configured for the industrial market, including diving motors.
Our global operations platform
Cost sourcing and continuous improvement initiatives are important aspects of this business.
The standardized general pump products of IPD are mainly used in oil and natural gas, chemistry, water management, power generation and general industry.
Our products are currently manufactured in 20 manufacturing plants, 5 of which are located in the United States
There are 10 in Europe, 4 in Asia and 1 in Latin America.
IPD operates 32 QRCs worldwide, including 20 sites in Europe and 6 sites in the United States. S.
There are three in the Asia-Pacific region and three in Latin America.
IPD products we produce about 40 different types of active pumps that can be used in a variety of metal alloys and non-metallic alloys
Metal materials with a variety of configurations can meet the key operational needs of customers.
Here are the list of IPD products and world-renowned brands: ASME and ISOSide 10IPD pump products typesoverhungbween BearingsChemical process Channel MultistageIndustrial processsemental channel MultistageSlurry and solid HandlingSingle case-
Axial split single box-
Vertical separation professional products vertical chemical wet pit and suction cup APIMolten salt VTP pump deep well dive electric submersible pump mud and solid barge deep well vacuum system barge submersible pump vacuum system liquid ring positive
Simpsonmeregallipaceuger & Byron jacksonsciipipd service we are through our global sales team, our regional service and repair center, or through an independent distributor
We offer a range of after-sales services including product installation and commissioning services, spare parts, repair, re-installation
Rating and upgrading solutions, advanced diagnostic and maintenance solutions through our global QRCs network.
IPD new product development the goal of our IPD development project is product feature enhancement, design improvement and sourcing opportunities, which we believe will enhance the competitive position of our industrial pump product line.
We will invest in our chemical products platform to expand and enhance our products for the global chemical industry.
We continue to address our core products through design improvements to improve performance and the speed at which we deliver our products.
New products of permanent magnet motor technology have been successfully released in our diving Motor Products, which indicates that the product efficiency has improved.
We will further promote our energy efficiency initiatives in response to various global government directives.
Cost reduction projects that contain product streamlining, value engineering, lean manufacturing, and reduced overhead costs remain key drivers for IPD.
None of these newly developed products or services require significant investment in our assets or substantial investment in other areas.
The portfolio of 11IPD customers is diversified, including leading EPC companies, OEMs, distributors and end users.
The sales mix of our original equipment products and after-sales products and services diversify our business and help mitigate the impact of normal economic cycles on our business.
Our sales are diversified in several industries such as oil and gas, chemistry, water management, power generation and general industry.
The industrial pump industry is highly dispersed with many competitors.
However, we mainly compete with a limited number of large companies operating worldwide.
The competition between our closest competitors is usually driven by delivery time, expertise, price, product type, contract terms, previous installation history and reputation for quality.
Our biggest competitors in the industry include ITT Industries, KSB Inc.
And Sulzer pump.
We believe that the source of our strongest competitive advantage lies in the various pumps we provide to the chemical industry, our huge installation base, our strong customer relationships, we have over 200 years of traditional experience in manufacturing and servicing pumping equipment and have a high reputation for delivering quality engineering solutions.
As of the 31st, the order backlog for IPD BacklogIPD was $2016 and $375. 6 million(including$14.
The backlog of 2 million departments has been eliminated and has not been included in the consolidation backlog)
Compared to $4246 million(including$15.
7 million backlog between departments)
As of the 2015 th.
We expect to ship around 2016 of the backlog during dec207.
Flow Control separation fcd designs, manufactures, distributes and serves a broad portfolio of industrial valves and automation solutions, including isolation and control valves, drives, controls, and related equipment.
In addition, FCD provides energy management products such as steam trap, boiler control device, condensate and energy recovery system.
FCD uses its experience and applied knowledge
How to complement its vast portfolio by providing a complete engineering and project management service menu.
FCD products are used to control, guide and manage the flow of liquids and gases and are an integral part of any flow control system.
Our valve products are usually customized and designed to perform specific functions in a unique flow control environment for each customer.
Our flow control products are mainly used by companies in chemical, power generation, oil and gas, water management and general industries.
Our products are currently produced in 26 major manufacturing plants, 5 of which are located in the United StatesS.
, 13 in Europe, 7 in Asia Pacific and 1 in Latin America.
FCD operates 32 QRCs worldwide, including 11 sites in Europe and 11 sites in the United States. S.
9 in the Asia-Pacific region and 1 in Latin America.
FCD products our portfolio of valves, automation and control products and solutions represents one of the most comprehensive product portfolios in the flow control industry.
Our products are widely used in a wide range of applications, from general service to the most demanding and demanding service, including services with high corrosion, extreme temperature and/or pressure, zero emission and emergency shutdown.
Our \"smart\" valve and diagnostic technology integrates sensors, microprocessor controls and software into high-performance integrated control valves, digital locators, and switch boxes for automatic on/off valve assemblies and electric actuators
These technologies allow real
Time system analysis, system warning and remote indication of asset health.
These technologies are developed in response to the growing need for reduced maintenance, increased process control efficiency and digital communications at the plant level.
We are committed to further improving the quality of our portfolio by continuing to upgrade our existing products
Edge technology.
12 Our valve automation products cover a wide range of pneumatic, electric, hydraulic and storage energy drive designs to take advantage of any power supply available to our customers.
The drive product of the FCD can use the process fluid flowing through the pipe as the power supply to drive the valve.
Our drive products also cover one of the widest range of output torque in the industry, providing a range from the smallest linear ball valve to the largestTurn gate valve.
The most important thing is that FCD is combinedin-
First-class mechanical design with the latest digital controls to provide a complete integrated automation solution to optimize combined valvesactuator-
Control package.
Here is a summary list of our valve and automation products as well as globally recognized brands: FCD product type valve automation system digital position control valve pneumatic position ball valve intelligent position door valve electric/electronic actuator ball valve pneumatic valve hydraulic actuator butterfly valve diaphragm actuator lining plug valve direct gas andover-
Oil actuator lining ball valve limit switch lubrication plug valve steam trap
Integrated valve controller boiler control diagnostic software digital communication selection pneumatic location valves and automated repair services fcd brand/DarlingNoble controlcontrol/MARPACFCD service our service staff for flow control systems, it includes advanced diagnostic, maintenance, installation, commissioning, renovation projects and on-site processing capabilities.
Most of our service work is done on a fast response basis, including 24-
Hourly service in all our major markets.
We also offer-
Through our manufacturing facilities, house repair and return manufacturing services are provided worldwide.
We believe that our ability to deliver comprehensive, fast turnaround services provides us with a unique competitive advantage and unparalleled service to the flow control products installed by our customers.
13FCD new product development our R & D investment focuses on areas that enhance our technology leadership and further differentiate our competitive advantage from a product perspective.
The investment focus is to significantly strengthen the digital integration and interoperation of the valve top project (e. g.
Locator, actuator, limit switch and related accessories)
Distributed Control System (\"DCS\").
We will continue to work hard to develop and deploy the next
Generate hardware and software for valve diagnostics and integrate final device intelligence through DCS to provide end users with practical and effective asset management capabilities.
In addition to developing these new capabilities and values
Our investment also includes portfolio expansion and basic research in materials science to increase temperature, pressure and corrosion/erosion-
Resistance limits for existing products, as well as lower noise and air eclipse.
These investments are made by adding new resources and talent to the organization, as well as leveraging the experience of the Environmental Protection Agency and IPD, and by increasing our cooperation with third parties.
We hope to continue our R & D investment in the above areas.
None of these newly developed valve products or services require an investment in our assets or other materials.
The FCD customer portfolio spans several markets, including chemical, power generation, oil and gas, water management, pulp and paper, mining and other general industries.
Our portfolio includes original equipment, after-sales parts and services.
FCD contracts with various customers from EPC to distributors, end users and other OEMs.
In recent years, the valve market has experienced a lot of integration, the market is still highly dispersed.
Some of the biggest competitors in the valve industry include Pentair Ltd.
Cameron International(
Schrenberg company)
Emerson Electric Limited
General Electric. and Crane Co.
Our market research and evaluation shows that the proportion of the world\'s top ten valve manufacturers in the total valve market is less than 25.
Based on independent industry sources, we believe we are the fourth largest supplier of industrial valves in the world.
We believe that our strongest competitive advantage comes from our comprehensive portfolio of valve products and services, our focus on execution and our expertise in severe corrosion and erosion applications.
The backlog of orders for FCD is $2016 and $584.
5 million, $622.
10 millionaires 2015.
We expect that in dec7 years we will ship about 2016 of the backlog.
We maintain an Internet site on www. flowserve. com.
Our annual report on Form10
Quarterly Report on Form10
Q: Latest report on Form8
K and any amendments to these reports submitted or provided under section 13 (a)
The Securities Trading Act of 1934, after we submit the report electronically, is provided free of charge as soon as possible through the \"Investor Relations\" section of our internet site, or to the United StatesS.
Securities and Exchange Commission (\"SEC\").
Our Internet site also provides guidelines for corporate governance, ethics and business conduct for our board of directors, as well as audit, finance, the organization and remuneration of our board of directors and the Corporate Governance and Nomination Committee and other important governance documents.
All of the above documents are available through our internet site and are available free of charge to the shareholders who make the request.
The information contained on our internet site or provided through our internet site has not been incorporated into this year\'s report or any other documents that we submit or provide to the SEC. 14ITEM 1A.
Risk factors any event discussed below as a risk factor can occur.
If they do, our business, financial position, results of operations and cash flow can be materially adversely affected.
While we believe that all known significant risks have been disclosed, additional risks and uncertainties that we do not currently know or that we currently consider irrelevant may also harm our business operations.
Due to these risk factors, and other variables that affect our operating performance, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to predict results or trends in future periods.
Our business depends on the level of capital investment and maintenance expenditure of our customers, which in turn is affected by many factors, including domestic and global economic conditions, global energy demand, the cyclical nature of its markets, liquidity, and the status of global credit and capital markets.
The demand for most of our products and services depends on the level of new capital investment and planned maintenance spending for our customers.
The level of capital expenditure of our clients, in turn, depends on the general economic conditions, the availability of credit, the economic conditions of their respective industries, and expectations for future market behavior.
In addition, fluctuations in commodity prices can have a negative impact on the level of these activities and may lead to delays in capital expenditure decisions, or delays or cancellations of existing orders.