10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROMto.

Commission File No. 1-13179

FLOWSERVE CORPORATION

(Exact name of registrant as specified in its charter)

New York	31-0267900
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5215 N. O’Connor Blvd., Suite 2300, Irving, Texas	75039
(Address of principal executive offices)	(Zip Code)

	(972) 443-6500
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ	Accelerated filer ¨	Non-accelerated filer ¨ (do not check if a smaller reporting company)
Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes þ No

As of July 23, 2012, there were 51,129,781 shares of the issuer’s common stock outstanding.

FLOWSERVE CORPORATION

FORM 10-Q

TABLE OF CONTENTS

	Page
	No.
PART I – FINANCIAL INFORMATION
Item 1.       Financial Statements.
Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income – Three Months Ended June 30, 2012 and 2011 (unaudited)	1
Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income – Six Months Ended June 30, 2012 and 2011 (unaudited)	2
Condensed Consolidated Balance Sheets – June 30, 2012 and December 31, 2011 (unaudited)	3
Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, 2012 and 2011 (unaudited)	4
Notes to Condensed Consolidated Financial Statements	5
Item 2.       Management’s Discussion and Analysis of Financial Condition and Results of Operations.	13
Item 3.       Quantitative and Qualitative Disclosures About Market Risk.	26
Item 4.       Controls and Procedures.	26
PART II – OTHER INFORMATION
Item 1.       Legal Proceedings.	26
Item 1A.    Risk Factors.	26
Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds.	27
Item 6.       Exhibits.	27
SIGNATURES	27
EX-3.1
EX-3.2
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

i

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

FLOWSERVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Amounts in thousands, except per share data)	Three Months Ended June 30,
	2012			2011
Sales	$	1,182,225		$	1,125,752
Cost of sales	(797,623		)	(756,414		)
Gross profit	384,602			369,338
Selling, general and administrative expense	(223,892		)	(232,983		)
Net earnings from affiliates	4,086			3,751
Operating income	164,796			140,106
Interest expense	(8,922		)	(9,534		)
Interest income	237			394
Other (expense) income, net	(8,046		)	5,985
Earnings before income taxes	148,065			136,951
Provision for income taxes	(39,580		)	(38,227		)
Net earnings, including noncontrolling interests	108,485			98,724
Less: Net (earnings) loss attributable to noncontrolling interests	(1,169		)	8
Net earnings attributable to Flowserve Corporation	$	107,316		$	98,732
Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic	$	1.99		$	1.77
Diluted	1.98			1.76
Cash dividends declared per share	$	0.36		$	0.32

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Amounts in thousands)	Three Months Ended June 30,
	2012			2011
Net earnings, including noncontrolling interests	$	108,485		$	98,724
Other comprehensive (expense) income:
Foreign currency translation adjustments, net of taxes of $35,520 and $(15,508), respectively	(58,699		)	27,318
Pension and other postretirement effects, net of taxes of $(1,278) and $(548), respectively	2,501			854
Cash flow hedging activity, net of taxes of $(78) and $387, respectively	88			(677		)
Other comprehensive (expense) income	(56,110		)	27,495
Comprehensive income, including noncontrolling interests	52,375			126,219
Comprehensive (income) loss attributable to noncontrolling interests	(1,022		)	4
Comprehensive income attributable to Flowserve Corporation	$	51,353		$	126,223

See accompanying notes to condensed consolidated financial statements.

1

FLOWSERVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Amounts in thousands, except per share data)	Six Months Ended June 30,
	2012			2011
Sales	$	2,257,205		$	2,122,959
Cost of sales	(1,513,420		)	(1,405,926		)
Gross profit	743,785			717,033
Selling, general and administrative expense	(445,781		)	(455,622		)
Net earnings from affiliates	9,315			8,948
Operating income	307,319			270,359
Interest expense	(17,731		)	(18,139		)
Interest income	519			883
Other (expense) income, net	(12,985		)	14,474
Earnings before income taxes	277,122			267,577
Provision for income taxes	(75,095		)	(71,857		)
Net earnings, including noncontrolling interests	202,027			195,720
Less: Net earnings attributable to noncontrolling interests	(1,586		)	(5		)
Net earnings attributable to Flowserve Corporation	$	200,441		$	195,715
Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic	$	3.70		$	3.51
Diluted	3.67			3.48
Cash dividends declared per share	$	0.72		$	0.64

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Amounts in thousands)	Six Months Ended June 30,
	2012			2011
Net earnings, including noncontrolling interests	$	202,027		$	195,720
Other comprehensive (expense) income:
Foreign currency translation adjustments, net of taxes of $14,256 and $(43,191), respectively	(23,559		)	76,121
Pension and other postretirement effects, net of taxes of $(1,662) and $(644), respectively	2,546			459
Cash flow hedging activity, net of taxes of $159 and $246, respectively	(304		)	(429		)
Other comprehensive (expense) income	(21,317		)	76,151
Comprehensive income, including noncontrolling interests	180,710			271,871
Comprehensive income attributable to noncontrolling interests	(1,474		)	(432		)
Comprehensive income attributable to Flowserve Corporation	$	179,236		$	271,439

See accompanying notes to condensed consolidated financial statements.

2

FLOWSERVE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Amounts in thousands, except per share data)	June 30,			December 31,
	2012			2011
ASSETS
Current assets:
Cash and cash equivalents	$	175,213		$	337,356
Accounts receivable, net of allowance for doubtful accounts of $19,174 and $20,351, respectively	1,057,642			1,060,249
Inventories, net	1,149,178			1,008,379
Deferred taxes	126,605			121,905
Prepaid expenses and other	109,009			100,465
Total current assets	2,617,647			2,628,354
Property, plant and equipment, net of accumulated depreciation of $749,973 and $719,992, respectively	591,805			598,746
Goodwill	1,042,410			1,045,077
Deferred taxes	19,291			17,843
Other intangible assets, net	154,839			163,482
Other assets, net	179,891			169,112
Total assets	$	4,605,883		$	4,622,614
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	541,925		$	597,342
Accrued liabilities	831,182			808,601
Debt due within one year	370,635			53,623
Deferred taxes	8,848			10,755
Total current liabilities	1,752,590			1,470,321
Long-term debt due after one year	426,140			451,593
Retirement obligations and other liabilities	429,549			422,470
Shareholders’ equity:
Common shares, $1.25 par value	73,664			73,664
Shares authorized – 120,000
Shares issued – 58,931 and 58,931, respectively
Capital in excess of par value	538,944			621,083
Retained earnings	2,367,469			2,205,524
	2,980,077			2,900,271
Treasury shares, at cost – 8,080 and 5,025 shares, respectively	(765,729		)	(424,052		)
Deferred compensation obligation	10,554			9,691
Accumulated other comprehensive loss	(237,302		)	(216,097		)
Total Flowserve Corporation shareholders’ equity	1,987,600			2,269,813
Noncontrolling interest	10,004			8,417
Total equity	1,997,604			2,278,230
Total liabilities and equity	$	4,605,883		$	4,622,614

See accompanying notes to condensed consolidated financial statements.

3

FLOWSERVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Amounts in thousands)	Six Months Ended June 30,
	2012			2011
Cash flows – Operating activities:
Net earnings, including noncontrolling interests	$	202,027		$	195,720
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation	44,340			44,373
Amortization of intangible and other assets	10,172			8,299
Net gain on disposition of assets	(10,549		)	(595		)
Excess tax benefits from stock-based compensation arrangements	(10,946		)	(5,021		)
Stock-based compensation	15,425			16,271
Net earnings from affiliates, net of dividends received	(4,723		)	1,623
Change in assets and liabilities:
Accounts receivable, net	(13,317		)	(121,537		)
Inventories, net	(155,739		)	(161,296		)
Prepaid expenses and other	(16,617		)	(32,670		)
Other assets, net	(7,219		)	(6,091		)
Accounts payable	(46,763		)	(114,811		)
Accrued liabilities and income taxes payable	49,908			(75,279		)
Retirement obligations and other liabilities	5,140			11,000
Net deferred taxes	(764		)	2,219
Net cash flows provided (used) by operating activities	60,375			(237,795		)
Cash flows – Investing activities:
Capital expenditures	(56,885		)	(48,498		)
Proceeds from disposal of assets	7,902			3,735
Payments for acquisitions, net of cash acquired	(3,996		)	(890		)
Affiliate investing activity	(1,620		)	—
Net cash flows used by investing activities	(54,599		)	(45,653		)
Cash flows – Financing activities:
Excess tax benefits from stock-based compensation arrangements	10,946			5,021
Payments on long-term debt	(12,500		)	(12,500		)
Proceeds from short-term financing, net	300,000			—
Borrowings under other financing arrangements, net	4,826			4,348
Repurchase of common shares	(432,898		)	(26,025		)
Payments of dividends	(37,082		)	(33,977		)
Other	(460		)	224
Net cash flows used by financing activities	(167,168		)	(62,909		)
Effect of exchange rate changes on cash	(751		)	10,090
Net change in cash and cash equivalents	(162,143		)	(336,267		)
Cash and cash equivalents at beginning of period	337,356			557,579
Cash and cash equivalents at end of period	$	175,213		$	221,312

See accompanying notes to condensed consolidated financial statements.

4

FLOWSERVE CORPORATION

(Unaudited)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Accounting Policies

Basis of Presentation

The accompanying condensed consolidated balance sheet as of June 30, 2012, the related condensed consolidated statements of income and comprehensive income for the three and six months ended June 30, 2012 and 2011, and the condensed consolidated statements of cash flows for the six months ended June 30, 2012 and 2011, of Flowserve Corporation, are unaudited. In management’s opinion, all adjustments comprising normal recurring adjustments necessary for a fair presentation of such condensed consolidated financial statements have been made.

The accompanying condensed consolidated financial statements and notes in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012 ("Quarterly Report") are presented as permitted by Regulation S-X and do not contain certain information included in our annual financial statements and notes thereto. Accordingly, the accompanying condensed consolidated financial information should be read in conjunction with the consolidated financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2011 ("2011 Annual Report").

European Sovereign Debt Crisis – At June 30, 2012, we had no direct investments in European sovereign or non-sovereign debt. However, certain of our defined benefit plans hold investments in European equity and fixed income securities as discussed in Note 12 to our consolidated financial statements included in our 2011 Annual Report. Other than broad, macro-level economic impacts, including foreign exchange rate impacts, we did not experience any direct or measurable disruptions during the three and six months ended June 30, 2012 due to the European sovereign debt crisis. We will continue to monitor and evaluate the impact of any future developments in the region on our current business, our customers and suppliers and the state of the global economy.

Events in North Africa and Middle East – As previously disclosed in our 2011 Annual Report, during 2011 political and economic conditions in North Africa caused us to experience shipment delays to this region. For the three and six months ended June 30, 2012 there was no impact to operating income due to delayed shipments to this region. The preponderance of our physical assets in the region are located in the Kingdom of Saudi Arabia and the United Arab Emirates and have, to date, not been significantly affected by the unrest elsewhere in the region.

Accounting Policies

Significant accounting policies, for which no significant changes have occurred in the six months ended June 30, 2012, are detailed in Note 1 to our consolidated financial statements included in our 2011 Annual Report.

Accounting Developments

Pronouncements Implemented

In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs," which clarifies the requirements in accounting principles generally accepted in the United States ("U.S. GAAP") for measuring fair value and for disclosing information about fair value measurements in order to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and International Financial Reporting Standards ("IFRSs"). The amendments do not result in a major change in the application of the requirements in Topic 820, but clarify the application of existing fair value measurement requirements and change particular principles or requirements for measuring fair value and for disclosing information about fair value measurements. Our adoption of ASU No. 2011-04, effective January 1, 2012, had no impact on our consolidated financial condition and results of operations.

In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (Accounting Standards Codification ("ASC") 220): Presentation of Comprehensive Income," which specifies that an entity has the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This amendment also requires an entity to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income. In December 2011, the FASB issued ASU No. 2011-12, "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05," to defer the requirement to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income. Our adoption of ASU Nos. 2011-05 and 2011-12, effective January 1, 2012, had no impact on our consolidated financial condition and results of operations.

5

In September 2011, the FASB issued ASU No. 2011-08, "Intangibles - Goodwill and Other (ASC 350): Testing Goodwill for Impairment," which specifies that an entity has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. Our adoption of ASU No. 2011-08, effective January 1, 2012, had no impact on our consolidated financial condition and results of operations.

Pronouncements Not Yet Implemented

In December 2011, the FASB issued ASU No. 2011-11, "Disclosures about Offsetting Assets and Liabilities," which requires enhanced disclosures about financial instruments and derivative instruments that are either (1) offset in accordance with either ASC 210-20-45, "Balance Sheet - Offsetting," or ASC 815-10-45, "Derivatives and Hedging - Overall," or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either ASC 210-20-45 or ASC 815-10-45. ASU No. 2011-11 is effective for fiscal years, and interim periods within those years, beginning after December 31, 2012. The disclosure requirements shall be applied retrospectively for all periods presented. The adoption of ASU No. 2011-11 will not have an impact on our consolidated financial condition and results of operations.

2. Acquisition

Lawrence Pumps, Inc.

As discussed in Note 2 to our consolidated financial statements included in our 2011 Annual Report, effective October 28, 2011, we acquired for inclusion in Engineered Product Division ("EPD"), 100% of Lawrence Pumps, Inc ("LPI"), a privately-owned, U.S.-based pump manufacturer. The final purchase price of $88.2 million reflects immaterial adjustments to goodwill and current liabilities during the six months ended June 30, 2012. LPI specializes in the design, development and manufacture of engineered centrifugal slurry pumps for critical services within the petroleum refining, petrochemical, pulp and paper and energy markets. No pro forma financial information has been presented due to immateriality.

3. Stock-Based Compensation Plans

We established the Flowserve Corporation Equity and Incentive Compensation Plan (the "2010 Plan") effective January 1, 2010. This shareholder-approved plan authorizes the issuance of up to 2,900,000 shares of our common stock in the form of incentive stock options, non-statutory stock options, restricted shares, restricted share units and performance-based units (collectively referred to as "Restricted Shares"), stock appreciation rights and bonus stock. Of the 2,900,000 shares of common stock authorized under the 2010 Plan, 2,162,227 remain available for issuance as of June 30, 2012. In addition to the 2010 Plan, we also maintain the Flowserve Corporation 2004 Stock Compensation Plan (the "2004 Plan"), which was established on April 21, 2004. The 2004 Plan authorized the issuance of up to 3,500,000 shares of common stock through grants of Restricted Shares, stock options and other equity-based awards. Of the 3,500,000 shares of common stock authorized under the 2004 Plan, 275,945 remain available for issuance as of June 30, 2012. No stock options have been granted since 2006.

Restricted Shares – Awards of Restricted Shares are valued at the closing market price of our common stock on the date of grant. The unearned compensation is amortized to compensation expense over the vesting period of the restricted shares. We had unearned compensation of $42.0 million and $27.0 million at June 30, 2012 and December 31, 2011, respectively, which is expected to be recognized over a weighted-average period of approximately two years. These amounts will be recognized into net earnings in prospective periods as the awards vest. The total fair value of Restricted Shares vested during each of the three months ended June 30, 2012 and 2011 was $1.2 million. The total fair value of Restricted Shares vested during the six months ended June 30, 2012 and 2011 was $36.2 million and $34.8 million, respectively.

We recorded stock-based compensation expense of $5.1 million ($7.6 million pre-tax) and $5.2 million ($7.7 million pre-tax) for the three months ended June 30, 2012 and 2011, respectively. We recorded stock-based compensation expense of $10.2 million ($15.4 million pre-tax) and $11.0 million ($16.3 million pre-tax) for the six months ended June 30, 2012 and 2011, respectively.

6

The following table summarizes information regarding Restricted Shares:

	Six Months Ended June 30, 2012
	Shares		Weighted Average Grant-Date Fair Value
Number of unvested shares:
Outstanding - January 1, 2012	1,052,199		$	84.62
Granted	294,093		114.03
Vested	(575,023	)	62.97
Cancelled	(28,264	)	114.97
Outstanding - June 30, 2012	743,005		$	111.86

Unvested Restricted Shares outstanding as of June 30, 2012, includes approximately 324,000 units with performance-based vesting provisions. Performance-based units are issuable in common stock and vest upon the achievement of pre-defined performance targets, primarily based on our average annual return on net assets over a three-year period as compared with the same measure for a defined peer group for the same period. Most units were granted in three annual grants since January 1, 2010 and have a vesting percentage between 0% and 200% depending on the achievement of the specific performance targets. Compensation expense is recognized ratably over a cliff-vesting period of 36 months, based on the fair market value of our common stock on the date of grant, as adjusted for anticipated forfeitures. During the performance period, earned and unearned compensation expense is adjusted based on changes in the expected achievement of the performance targets. Vesting provisions range from 0 to 643,000 shares based on performance targets. As of June 30, 2012, we estimate vesting of approximately 451,000 shares based on expected achievement of performance targets.

4. Derivative Instruments and Hedges

Our risk management and derivatives policy specifies the conditions under which we may enter into derivative contracts. See Notes 1 and 6 to our consolidated financial statements included in our 2011 Annual Report and Note 6 of this Quarterly Report for additional information on our derivatives. We enter into forward exchange contracts to hedge our cash flow risks associated with transactions denominated in currencies other than the local currency of the operation engaging in the transaction. At June 30, 2012 and December 31, 2011, we had $535.6 million and $481.2 million, respectively, of notional amount in outstanding forward exchange contracts with third parties. At June 30, 2012, the length of forward exchange contracts currently in place ranged from two days to 18 months. Also as part of our risk management program, we enter into interest rate swap agreements to hedge exposure to floating interest rates on certain portions of our debt. At June 30, 2012 and December 31, 2011, we had $325.0 million and $330.0 million, respectively, of notional amount in outstanding interest rate swaps with third parties. All interest rate swaps are highly effective. At June 30, 2012, the maximum remaining length of any interest rate swap contract in place was approximately 36 months.

We are exposed to risk from credit-related losses resulting from nonperformance by counterparties to our financial instruments. We perform credit evaluations of our counterparties under forward exchange contracts and interest rate swap agreements and expect all counterparties to meet their obligations. If material, we would adjust the values of our derivative contracts for our or our counterparties’ credit risks. We have not experienced credit losses from our counterparties.

The fair value of forward exchange contracts not designated as hedging instruments are summarized below:

	June 30,		December 31,
(Amounts in thousands)	2012		2011
Current derivative assets	$	8,427	$	2,330
Noncurrent derivative assets	46		10
Current derivative liabilities	21,034		11,196
Noncurrent derivative liabilities	266		516

7

The fair value of interest rate swaps in cash flow hedging relationships are summarized below:

	June 30,		December 31,
(Amounts in thousands)	2012		2011
Current derivative assets	$	—	$	33
Noncurrent derivative assets	36		71
Current derivative liabilities	1,227		761
Noncurrent derivative liabilities	476		547

Current and noncurrent derivative assets are reported in our condensed consolidated balance sheets in prepaid expenses and other and other assets, net, respectively. Current and noncurrent derivative liabilities are reported in our condensed consolidated balance sheets in accrued liabilities and retirement obligations and other liabilities, respectively.

The impact of net changes in the fair values of forward exchange contracts not designated as hedging instruments are summarized below:

	Three Months Ended June 30,					Six Months Ended June 30,
(Amounts in thousands)	2012			2011		2012			2011
(Loss) gain recognized in income	$	(4,522	)	$	4,528	$	(5,641	)	$	10,103

The impact of net changes in the fair values of interest rate swaps in cash flow hedging relationships are summarized below:

	Three Months Ended June 30,						Six Months Ended June 30,
(Amounts in thousands)	2012			2011			2012			2011
Loss reclassified from accumulated other comprehensive income into income for settlements, net of tax	$	(232	)	$	(396	)	$	(399	)	$	(808	)
Loss recognized in other comprehensive income, net of tax	(144		)	(1,073		)	(703		)	(1,237		)

Gains and losses recognized in our condensed consolidated statements of income for forward exchange contracts and interest rate swaps are classified as other (expense) income, net, and interest expense, respectively. At June 30, 2012, we expect to recognize losses of $0.9 million, net of deferred taxes, into earnings in the next twelve months related to interest rate swap agreements based on their fair values at June 30, 2012.

5. Debt

Debt, including capital lease obligations, consisted of:

	June 30,		December 31,
(Amounts in thousands, except percentages)	2012		2011
Term Loan, interest rate of 2.46% and 2.58% at June 30, 2012 and December 31, 2011, respectively	$	462,500	$	475,000
Bridge Loan, interest rate of 2.24% at June 30, 2012	250,000		—
Revolving credit facility, interest rate of 2.24% at June 30, 2012	50,000		—
Capital lease obligations and other borrowings	34,275		30,216
Debt and capital lease obligations	796,775		505,216
Less amounts due within one year	370,635		53,623
Total debt due after one year	$	426,140	$	451,593

Credit Facilities

As described more fully in Note 11 to our consolidated financial statements included in our 2011 Annual Report, on December 14, 2010, we entered into a credit agreement ("Credit Agreement") with Bank of America, N.A., as swingline lender, letter of credit issuer and administrative agent, and the other lenders party thereto. The Credit Agreement provides for a $500.0 million term loan facility with a maturity date of December 14, 2015 and a $500.0 million revolving credit facility with a maturity date of December 14, 2015 (collectively referred to as the "Credit Facilities"). As of June 30, 2012, we had $50.0 million outstanding under the revolving credit facility. The revolving credit facility includes a $300.0 million sublimit for the issuance of letters of credit. Subject to certain conditions, we have the right to increase the amount of the revolving credit facility by an aggregate amount not to exceed $200.0 million. We had outstanding letters of credit of $155.4 million and $147.4 million at June 30, 2012 and December 31, 2011, respectively, and when included with the outstanding revolving credit facility balance, reduced our borrowing capacity to $294.6 million and $352.6 million, respectively.

We may prepay loans under our Credit Facilities in whole or in part, without premium or penalty, at any time. During the three and six months ended June 30, 2012, we made scheduled repayments under our Credit Facilities of $6.3 million and $12.5 million, respectively. We have scheduled repayments of $56.3 million due in the third quarter of 2012, $6.3 million in the fourth quarter of 2012 and $12.5 million due in both the first and second quarters of 2013 on our Credit Facilities. Our Credit Facilities bear a floating rate of interest and we have entered into $325.0 million of notional amount of interest rate swaps at June 30, 2012 to hedge exposure to floating interest rates.

Bridge Loan –On June 15, 2012 (the “Closing Date”), we entered into a loan agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto (together, the “Lenders”), providing for a term loan with an aggregate commitment of $250.0 million for a term of 364 days (the “Bridge Loan”). The proceeds from the Bridge Loan were used to fund our share repurchase program described in Note 12 to our condensed consolidated financial statements included in this Quarterly Report.

The initial interest rate per annum applicable to the Bridge Loan is either LIBOR plus 2.50%, 2.25%, 2.00% or 1.75%, as applicable, depending on the consolidated leverage ratio, or, at our option, the Base Rate (defined as a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus 0.5% or (c) the Eurodollar Rate for a one month Interest Period on such day plus 1%). The applicable interest rate will increase by 50 basis points incrementally during the term of the Bridge Loan on each of the 90-day, 180-day and 270-day anniversaries of the Closing Date. Additionally, a duration fee will be payable on the loan amount as follows: 0.125% on October 15, 2012; 0.25% on December 15, 2012; and 0.5% on March 15, 2013.

The Bridge Loan includes customary representations and warranties, affirmative and negative covenants, and events of default, including maintenance of interest coverage and consolidated leverage ratios, all of which are consistent in all material respects with our existing Credit Facilities. The obligations under the Bridge Loan are guaranteed by certain of our domestic subsidiaries.

European Letter of Credit Facilities – On October 30, 2009, we entered into a 364-day unsecured European Letter of Credit Facility ("European LOC Facility") with an initial commitment of €125.0 million. The European LOC Facility is renewable annually and is used for contingent obligations in respect of surety and performance bonds, bank guarantees and similar obligations with maturities up to five years. We renewed the European LOC Facility in October 2011 consistent with its initial terms for an additional 364-day period. We had outstanding letters of credit drawn on the European LOC Facility of €74.4 million ($94.2 million) and €81.0 million ($105.0 million) as of June 30, 2012 and December 31, 2011, respectively.

Our ability to issue additional letters of credit under our previous European Letter of Credit Facility ("Old European LOC Facility"), which had a commitment of €110.0 million, expired November 9, 2009. We had outstanding letters of credit written against the Old European LOC Facility of €5.8 million ($7.3 million) and €12.2 million ($15.8 million) as of June 30, 2012 and December 31, 2011, respectively.

Certain banks are parties to both facilities and are managing their exposures on an aggregated basis. As such, the commitment under the European LOC Facility is reduced by the face amount of existing letters of credit written against the Old European LOC Facility prior to its expiration. After consideration of outstanding commitments under both facilities, the available capacity under the European LOC Facility was €121.0 million ($153.2 million) as of June 30, 2012, of which €74.4 million ($94.2 million) has been utilized.

6. Fair Value

Our financial instruments are presented at fair value or approximate fair value in our condensed consolidated balance sheets. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models may be applied. Assets and liabilities recorded at fair value in our condensed consolidated balance sheets are categorized by hierarchical levels based upon the level of judgment associated with the inputs used to measure their fair values. Recurring fair value measurements are limited to investments in derivative instruments and certain equity securities. The fair value measurements of our derivative instruments are determined using models that maximize the use of the observable market inputs including interest rate curves and both forward and spot prices for currencies, and are classified as Level II under the fair value hierarchy. The fair values of our derivatives are included above in Note 4. The fair value measurements of our investments in equity securities are determined using

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quoted market prices. The fair values of our investments in equity securities, and changes thereto, are immaterial to our consolidated financial position and results of operations. The fair value of our debt was estimated using interest rates on similar debt recently issued by companies with credit metrics similar to ours and is classified as Level II under the fair value hierarchy. The carrying value of our debt is included above in Note 5 and approximates fair value.

7. Inventories

Inventories, net consisted of the following:

	June 30,			December 31,
(Amounts in thousands)	2012			2011
Raw materials	$	355,627		$	329,120
Work in process	855,402			793,053
Finished goods	305,172			279,267
Less: Progress billings	(290,169		)	(320,934		)
Less: Excess and obsolete reserve	(76,854		)	(72,127		)
Inventories, net	$	1,149,178		$	1,008,379

8. Equity Method Investments

As of June 30, 2012, we had investments in eight joint ventures (one located in each of Japan, Saudi Arabia, South Korea, and the United Arab Emirates and two located in each of China and India) that were accounted for using the equity method. Summarized below is combined financial statement information, based on the most recent financial information (unaudited), for those investments:

	Three Months Ended June 30,						Six Months Ended June 30,
(Amounts in thousands)	2012			2011			2012			2011
Revenues	$	67,671		$	70,909		$	150,908		$	150,141
Gross profit	19,189			20,209			44,752			47,925
Income before provision for income taxes	13,161			13,338			32,433			33,136
Provision for income taxes	(3,935		)	(3,902		)	(9,903		)	(10,132		)
Net income	$	9,226		$	9,436		$	22,530		$	23,004

The provision for income taxes is based on the tax laws and rates in the countries in which our investees operate. The taxation regimes vary not only by their nominal rates, but also by the allowability of deductions, credits and other benefits. Our share of net income is reflected in our condensed consolidated statements of income.

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9. Earnings Per Share

The following is a reconciliation of net earnings of Flowserve Corporation and weighted average shares for calculating net earnings per common share. Earnings per weighted average common share outstanding was calculated as follows:

	Three Months Ended June 30,
(Amounts in thousands, except per share data)	2012		2011
Net earnings of Flowserve Corporation	$	107,316	$	98,732
Dividends on restricted shares not expected to vest	4		4
Earnings attributable to common and participating shareholders	$	107,320	$	98,736
Weighted average shares:
Common stock	53,740		55,483
Participating securities	255		264
Denominator for basic earnings per common share	53,995		55,747
Effect of potentially dilutive securities	271		495
Denominator for diluted earnings per common share	54,266		56,242
Earnings per common share:
Basic	$	1.99	$	1.77
Diluted	1.98		1.76

	Six Months Ended June 30,
(Amounts in thousands, except per share data)	2012		2011
Net earnings of Flowserve Corporation	$	200,441	$	195,715
Dividends on restricted shares not expected to vest	7		7
Earnings attributable to common and participating shareholders	$	200,448	$	195,722
Weighted average shares:
Common stock	53,972		55,420
Participating securities	261		281
Denominator for basic earnings per common share	54,233		55,701
Effect of potentially dilutive securities	415		590
Denominator for diluted earnings per common share	54,648		56,291
Earnings per common share:
Basic	$	3.70	$	3.51
Diluted	3.67		3.48

Diluted earnings per share above is based upon the weighted average number of shares as determined for basic earnings per share plus shares potentially issuable in conjunction with stock options, restricted share units and performance share units.

For the three and six months ended both June 30, 2012 and 2011, no options to purchase common stock were excluded from the computation of potentially dilutive securities.

10. Legal Matters and Contingencies

Asbestos-Related Claims

We are a defendant in a substantial number of lawsuits that seek to recover damages for personal injury allegedly caused by exposure to asbestos-containing products manufactured and/or distributed by our heritage companies in the past. While the overall number of asbestos-related claims has generally declined in recent years, there can be no assurance that this trend will continue, or that the average cost per claim will not further increase. Asbestos-containing materials incorporated into any such products were primarily encapsulated and used as internal components of process equipment, and we do not believe that any significant emission of asbestos fibers occurred during the use of this equipment.

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Our practice is to vigorously contest and resolve these claims, and we have been successful in resolving a majority of claims with little or no payment. Historically, a high percentage of resolved claims have been covered by applicable insurance or indemnities from other companies, and we believe that a substantial majority of existing claims should continue to be covered by insurance or indemnities. Accordingly, we have recorded a liability for our estimate of the most likely settlement of asserted claims and a related receivable from insurers or other companies for our estimated recovery, to the extent we believe that the amounts of recovery are probable and not otherwise in dispute. While unfavorable rulings, judgments or settlement terms regarding these claims could have a material adverse impact on our business, financial condition, results of operations and cash flows, we currently believe the likelihood is remote. In one asbestos insurance related matter, we have a claim in litigation against relevant insurers substantially in excess of the recorded receivable. If our claim is resolved more favorably than reflected in this receivable, we would benefit from a gain in the amount of such excess. We are currently unable to estimate the impact, if any, of unasserted asbestos-related claims, although future claims would also be subject to then existing indemnities and insurance coverage.

United Nations Oil-for-Food Program

In mid-2006, French authorities began an investigation of over 170 French companies, of which our French subsidiary was included, concerning suspected inappropriate activities conducted in connection with the United Nations Oil for Food Program. As anticipated and as previously disclosed, the French investigation of our French subsidiary was formally opened in the first quarter of 2010, and our French subsidiary has filed a formal response with the French court. In July 2012, the French court ruled against our procedural motions to challenge the constitutionality of the charges and quash the indictment.  We are now in the process of filing a formal appeal with the French Supreme Court to seek a reversal of the French court decision.  We currently do not expect to incur additional case resolution costs of a material amount in this matter; however, if the French authorities take enforcement action against our French subsidiary regarding its investigation, we may be subject to monetary and non-monetary penalties, which we currently do not believe will have a material adverse effect on our company.

In addition to the governmental investigation referenced above, on June 27, 2008, the Republic of Iraq filed a civil suit in federal court in New York against 93 participants in the United Nations Oil-for-Food Program, including us and our two foreign subsidiaries that participated in the program. There have been no material developments in this case since it was initially filed. We intend to vigorously contest the suit, and we believe that we have valid defenses to the claims asserted. While we cannot predict the outcome of the suit at the present time, we do not currently believe the resolution of this suit will have a material adverse financial impact on our company.

Other

We are currently involved as a potentially responsible party at seven former public waste disposal sites in various stages of evaluation or remediation. The projected cost of remediation at these sites, as well as our alleged "fair share" allocation, will remain uncertain until all studies have been completed and the parties have either negotiated an amicable resolution or the matter has been judicially resolved. At each site, there are many other parties who have similarly been identified. Many of the other parties identified are financially strong and solvent companies that appear able to pay their share of the remediation costs. Based on our information about the waste disposal practices at these sites and the environmental regulatory process in general, we believe that it is likely that ultimate remediation liability costs for each site will be apportioned among all liable parties, including site owners and waste transporters, according to the volumes and/or toxicity of the wastes shown to have been disposed of at the sites. We believe that our exposure for existing disposal sites will not be material.

We are also a defendant in a number of other lawsuits, including product liability claims, that are insured, subject to the applicable deductibles, arising in the ordinary course of business, and we are also involved in other uninsured routine litigation incidental to our business. We currently believe none of such litigation, either individually or in the aggregate, is material to our business, operations or overall financial condition. However, litigation is inherently unpredictable, and resolutions or dispositions of claims or lawsuits by settlement or otherwise could have an adverse impact on our financial position, results of operations or cash flows for the reporting period in which any such resolution or disposition occurs.

Although none of the aforementioned potential liabilities can be quantified with absolute certainty except as otherwise indicated above, we have established reserves covering exposures relating to contingencies, to the extent believed to be reasonably estimable and probable based on past experience and available facts. While additional exposures beyond these reserves could exist, they currently cannot be estimated. We will continue to evaluate and update the reserves as necessary and appropriate.

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11. Retirement and Postretirement Benefits

Components of the net periodic cost for retirement and postretirement benefits for the three months ended June 30, 2012 and 2011 were as follows:

	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						Postretirement Medical Benefits
(Amounts in millions)	2012			2011			2012			2011			2012			2011
Service cost	$	5.4		$	4.6		$	1.2		$	1.3		$	—		$	—
Interest cost	4.0			4.3			3.3			3.3			0.4			0.5
Expected return on plan assets	(5.2		)	(5.4		)	(2.1		)	(2.0		)	—			—
Amortization of prior service benefit	(0.3		)	(0.3		)	—			—			—			(0.4		)
Amortization of unrecognized net loss (gain)	3.0			2.7			1.0			0.5			(0.3		)	(0.3		)
Net periodic cost (benefit) recognized	$	6.9		$	5.9		$	3.4		$	3.1		$	0.1		$	(0.2	)

Components of the net periodic cost for retirement and postretirement benefits for the six months ended June 30, 2012 and 2011 were as follows:

	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						Postretirement Medical Benefits
(Amounts in millions)	2012			2011			2012			2011			2012			2011
Service cost	$	10.6		$	9.9		$	2.3		$	2.5		$	—		$	—
Interest cost	8.2			8.6			6.7			6.6			0.7			0.9
Expected return on plan assets	(10.6		)	(10.9		)	(4.2		)	(4.0		)	—			—
Amortization of prior service benefit	(0.6		)	(0.6		)	—			—			—			(0.8		)
Amortization of unrecognized net loss (gain)	6.1			5.4			2.0			1.0			(0.8		)	(0.7		)
Net periodic cost (benefit) recognized	$	13.7		$	12.4		$	6.8		$	6.1		$	(0.1	)	$	(0.6	)

After consideration of our intent to maintain fully funded status, we currently anticipate our contribution to our U.S. pension plan in 2012 will be between approximately $10 million and $20 million, excluding direct benefits paid. See additional discussion of our retirement and postretirement benefits in Note 12 to our consolidated financial statements included in our 2011 Annual Report.

12. Shareholders’ Equity

Dividends – On February 20, 2012, our Board of Directors authorized an increase in the payment of quarterly dividends on our common stock from $0.32 per share to $0.36 per share payable quarterly beginning on April 13, 2012. Generally, our dividend date-of-record is in the last month of the quarter, and the dividend is paid the following month.

Share Repurchase Program – On May 31, 2012, we announced that our Board of Directors endorsed an updated capital structure strategy. A part of this capital structure strategy includes returning additional capital more quickly to shareholders through an expanded share repurchase program of $1.0 billion. The $1.0 billion share repurchase program authorization included approximately $233 million of remaining capacity under our prior share repurchase program, which was originally approved by our Board of Directors on September 12, 2011 and replenished on December 15, 2011. Our share repurchase program does not have an expiration date, and we reserve the right to limit or terminate the repurchase program at anytime without notice.

As a part of the $1.0 billion share repurchase program, on June 14, 2012, we entered into an accelerated share repurchase program (the “ASR Program”) with J.P. Morgan Securities LLC, as agent for JPMorgan Chase Bank, N.A., London Branch, under which we agreed to repurchase an aggregate of $300.0 million of our common stock. Under the ASR Program, we paid $300.0 million and received an initial delivery of 2,260,738 shares, representing 80% of the ASR Program's value at the then-current price of $106.16 per share. The remaining 20% of the ASR Program's value will be delivered at program settlement, with the final number of shares to be repurchased based on the volume-weighted average price of our common stock during the repurchase period, less an agreed upon discount and adjusted for the initial share delivery. Under the terms of the ASR Program, at settlement, we could either receive additional shares from the counterparty or be required to deliver additional shares or cash, at our option, to the counterparty. The ASR Program will be complete by the end of 2012.

The ASR Program was accounted for as two separate transactions: (i) as shares of common stock acquired in a treasury stock transaction and (ii) as a forward contract indexed to our own common stock. The initial delivery of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net earnings per share from the effective date of the ASR Program. We have determined that the forward contract indexed to our common stock met all of the applicable criteria for equity classification. The ASR Program was funded through a combination of cash on hand, existing capacity on our revolving credit facility and proceeds from a new $250.0 million Bridge Loan, which is described in further detail in Note 5 above.

Inclusive of the ASR Program's 2,260,738 initial share delivery, representing 80% of the program's value, we repurchased 3,307,003 shares of our outstanding common stock for $350.8 million, and 100,000 shares for $12.2 million, during the three months ended June 30, 2012 and 2011, respectively. We repurchased 3,492,003 shares of our outstanding common stock for $372.9 million, and 212,500 shares for $26.0 million, during the six months ended June 30, 2012 and 2011, respectively. As of June 30, 2012, we have $624.7 million of remaining capacity under our current share repurchase program, which reflects the full $300.0 million value of the ASR Program, which will conclude by the end of 2012.

13. Income Taxes

For the three months ended June 30, 2012, we earned $148.1 million before taxes and provided for income taxes of $39.6 million, resulting in an effective tax rate of 26.7%. For the six months ended June 30, 2012, we earned $277.1 million before taxes and provided for income taxes of $75.1 million resulting in an effective tax rate of 27.1%. The effective tax rate varied from the U.S. federal statutory rate for the three and six months ended June 30, 2012 primarily due to the net impact of foreign operations and a net reduction of our reserve for uncertain tax positions due to the lapse of the statute of limitations in certain jurisdictions.

For the three months ended June 30, 2011, we earned $137.0 million before taxes and provided for income taxes of $38.2 million, resulting in an effective tax rate of 27.9%. For the six months ended June 30, 2011, we earned $267.6 million before taxes and provided for income taxes of $71.9 million, resulting in an effective tax rate of 26.9%. The effective tax rate varied from the U.S. federal statutory rate for the three months ended June 30, 2011 primarily due to the net impact of foreign operations. The effective tax rate varied from the U.S. federal statutory rate for the six months ended June 30, 2011 primarily due to the net impact of foreign operations and the lapse of the statute of limitations in certain jurisdictions.

As of June 30, 2012, the amount of unrecognized tax benefits decreased by $3.2 million from December 31, 2011, due to the net impacts of currency translation adjustments and expiration of statutes. With limited exception, we are no longer subject to U.S. federal, state and local income tax audits for years through 2007 or non-U.S. income tax audits for years through 2004. We are currently under examination for various years in China, Germany, India, Italy, Singapore, the U.S. and Venezuela.

It is reasonably possible that within the next 12 months the effective tax rate will be impacted by the resolution of some or all of the matters audited by various taxing authorities. It is also reasonably possible that we will have the statute of limitations close in various taxing jurisdictions within the next 12 months. As such, we estimate we could record a reduction in our tax expense of between $14.3 million and $26.9 million within the next 12 months.

14. Segment Information

We are principally engaged in the worldwide design, manufacture, distribution and service of industrial flow management equipment. We provide long lead-time, highly engineered pumps, shorter lead-time engineered pumps, standardized, general purpose pumps, mechanical seals, industrial valves and related automation products and solutions primarily for oil and gas, chemical, power generation, water management and other general industries requiring flow management products and services.

Our business segments, defined below, share a focus on industrial flow control technology and have a high number of common customers. These segments also have complementary product offerings and technologies that are often combined in applications that provide us a net competitive advantage. Our segments also benefit from our global footprint and our economies of scale in reducing administrative and overhead costs to serve customers more cost effectively.

We conduct our operations through these three business segments based on type of product and how we manage the business:

• Engineered Product Division ("EPD") for long lead-time, custom and other highly-engineered pumps and pump systems, mechanical seals, auxiliary systems and replacement parts and related services;

• Industrial Product Division ("IPD") for engineered and pre-configured industrial pumps and pump systems and related products and services; and

• Flow Control Division ("FCD") for engineered and industrial valves, control valves, actuators and controls and related services.

For decision-making purposes, our CEO and other members of senior executive management use financial information generated and reported at the reportable segment level. Our corporate headquarters does not constitute a separate division or business segment. We evaluate segment performance and allocate resources based on each reportable segment’s operating income. Amounts classified as "Eliminations and All Other" include corporate headquarters costs and other minor entities that do not

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constitute separate segments. Intersegment sales and transfers are recorded at cost plus a profit margin, with the sales and related margin on such sales eliminated in consolidation.

The following is a summary of the financial information of the reportable segments reconciled to the amounts reported in the condensed consolidated financial statements:

							Subtotal–		Eliminations
Three Months Ended June 30, 2012							Reportable		and All			Consolidated
	EPD		IPD		FCD		Segments		Other			Total
Sales to external customers	$	570,494	$	212,354	$	399,377	$	1,182,225	$	—		$	1,182,225
Intersegment sales	16,163		19,326		2,162		37,651		(37,651		)	—
Segment operating income	95,054		23,830		60,353		179,237		(14,441		)	164,796
							Subtotal–		Eliminations
Three Months Ended June 30, 2011							Reportable		and All			Consolidated
	EPD		IPD		FCD		Segments		Other			Total
Sales to external customers	$	539,213	$	202,483	$	384,056	$	1,125,752	$	—		$	1,125,752
Intersegment sales	18,080		22,033		3,029		43,142		(43,142		)	—
Segment operating income	86,686		9,617		59,935		156,238		(16,132		)	140,106

							Subtotal–		Eliminations
Six Months Ended June 30, 2012							Reportable		and All			Consolidated
	EPD		IPD		FCD		Segments		Other			Total
Sales to external customers	$	1,090,336	$	405,735	$	761,134	$	2,257,205	$	—		$	2,257,205
Intersegment sales	31,129		39,131		4,296		74,556		(74,556		)	—
Segment operating income	187,231		41,181		116,046		344,458		(37,139		)	307,319
							Subtotal–		Eliminations
Six Months Ended June 30, 2011							Reportable		and All			Consolidated
	EPD		IPD		FCD		Segments		Other			Total
Sales to external customers	$	1,038,973	$	363,395	$	720,591	$	2,122,959	$	—		$	2,122,959
Intersegment sales	42,091		37,446		4,091		83,628		(83,628		)	—
Segment operating income	178,442		22,693		107,469		308,604		(38,245		)	270,359

EPD's operating income for the six months ended June 30, 2012, included a $10.4 million gain from the sale of a manufacturing facility in Rio de Janeiro, Brazil, in preparation for opening a new manufacturing facility there later in 2012.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements, and notes thereto, and the other financial data included elsewhere in this Quarterly Report. The following discussion should also be read in conjunction with our audited consolidated financial statements, and notes thereto, and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A") included in our 2011 Annual Report.

EXECUTIVE OVERVIEW

Our Company

We believe that we are a world-leading manufacturer and aftermarket service provider of comprehensive flow control systems. We develop and manufacture precision-engineered flow control equipment integral to the movement, management and protection of the flow of materials in our customers’ critical processes. Our product portfolio of pumps, valves, seals, automation and aftermarket services supports global infrastructure industries, including oil and gas, chemical, power generation and water management, as well as general industrial markets, on an integrated basis where our products and services add value. Through

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our manufacturing platform and global network of Quick Response Centers ("QRCs"), we offer a broad array of aftermarket equipment services, such as installation, advanced diagnostics, repair and retrofitting. We currently employ approximately 16,500 employees in more than 50 countries.

Our business model is significantly influenced by the capital spending of global infrastructure industries for the placement of new products into service and aftermarket services for existing operations. The worldwide installed base of our products is an important source of aftermarket revenue, where products are expected to ensure the maximum operating time of many key industrial processes. Over the past several years, we have significantly invested in our aftermarket strategy to provide local support to maximize our customers' investment in our offerings, as well as to provide business stability during various economic periods. The aftermarket business, which is served by our network of 176 QRCs 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, and is generally a higher margin business and a key component of our profitable growth strategy.

Our operations are conducted through three business segments that are referenced throughout this MD&A:

• EPD for long lead-time, custom and other highly-engineered pumps and pump systems, mechanical seals, auxiliary systems and replacement parts and related services;

• IPD for engineered and pre-configured industrial pumps and pump systems and related products and services; and

• FCD for engineered and industrial valves, control valves, actuators and controls and related services.

Our business segments share a focus on industrial flow control technology and have a high number of common customers. These segments also have complementary product offerings and technologies that are often combined in applications that provide us a net competitive advantage. Our segments also benefit from our global footprint and our economies of scale in reducing administrative and overhead costs to serve customers more cost effectively. For example, our segment leadership all reports to our COO, and the segments share 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, Valtek, Limitorque, Durco, Edward, Anchor/Darling 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.

We continue to build on our geographic breadth through our QRC network with the goal to be positioned as near to customers as possible for service and support in order to capture this important aftermarket business. Along with ensuring that we have the local capability to sell, install and service our equipment in remote regions, it is equally imperative to continuously improve our global operations. We continue to expand our global supply chain capability to meet global customer demands and ensure the quality and timely delivery of our products. We continue to devote resources to improving the supply chain processes across our divisions to find areas of synergy and cost reduction and to improve our supply chain management capability to ensure it can meet global customer demands. We continue to focus on improving on-time delivery and quality, while managing warranty costs as a percentage of sales across our global operations, through the assistance of a focused Continuous Improvement Process ("CIP") initiative. The goal of the CIP initiative, 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.

During the first half of 2012, we experienced improved bookings related to long cycle projects despite an environment of continued global macroeconomic uncertainty. The oil and gas industry experienced stable conditions, while the chemical industry saw increased activity, driven by Asia Pacific and Middle Eastern countries accelerating investment in their chemical processing capabilities, and also in North America, as producers invested to utilize natural gas as a low-cost feedstock. We experienced a modest decline in bookings into Europe, as economic conditions in the region remain challenged. In the power generation industry, we experienced a slowing in the level of investment during the period as the industry awaits further clarity on the environmental regulations to take effect in the U.S. and certain other countries.

We continue to experience favorable conditions in our aftermarket business, which has been driven by our customers' need to maintain continuing operations across several industries and the expansion of our aftermarket capabilities through our integrated solutions offerings. Our pursuit of major capital projects globally and our investment in our ability to serve our customers in a local manner remain key components of our long-term growth strategy, and also provide stability during various economic periods. We believe that our commitment to localize service support capabilities close to our customers' operations through our QRC network has provided us with the opportunity to grow our market share in the aftermarket portion of our business.

We believe that with our customer relationships, global presence and highly-regarded technical capabilities, we will continue to have opportunities in our core industries; however, we face challenges affecting many companies in our industry with a significant

14

multinational presence, such as economic, political, currency and other risks.

As previously disclosed in our 2011 Annual Report, during 2011, political and economic conditions in North Africa caused us to experience shipment delays to this region. For the three and six months ended June 30, 2012, there was no impact to operating income due to delayed shipments to the region. The preponderance of our physical assets in the region are located in the Kingdom of Saudi Arabia and the United Arab Emirates and have, to date, not been significantly affected by the unrest elsewhere in the region.

At June 30, 2012, we had no direct investments in European sovereign or non-sovereign debt. However, certain of our defined benefit plans hold investments in European equity and fixed income securities as discussed in Note 12 to our consolidated financial statements included in our 2011 Annual Report. Other than broad, macro-level economic impacts, including foreign exchange rate impacts, we did not experience any direct or measurable disruptions during the three and six months ended June 30, 2012 due to the European sovereign debt crisis. We will continue to monitor and evaluate the impact of any future developments in the region on our current business, our customers and suppliers and the state of the global economy.

RESULTS OF OPERATIONS — Three and six months ended June 30, 2012 and 2011

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 to our condensed consolidated financial statements included in this Quarterly Report, we acquired LPI, a privately-owned, U.S.-based pump manufacturer, for inclusion in EPD, effective October 28, 2011. LPI's results of operations have been consolidated since the date of acquisition. No pro forma information has been provided for the acquisition due to immateriality.

Consolidated Results

Bookings, Sales and Backlog

	Three Months Ended June 30,
(Amounts in millions)	2012		2011
Bookings	$	1,213.7	$	1,211.6
Sales	1,182.2		1,125.8

	Six Months Ended June 30,
(Amounts in millions)	2012		2011
Bookings	$	2,450.8	$	2,370.9
Sales	2,257.2		2,123.0

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 June 30, 2012 increased by $2.1 million, or 0.2%, as compared with the same period in 2011. The increase included negative currency impacts of approximately $84 million. The increase was primarily driven by the general, oil and gas and chemical industries in EPD and the general and chemical industries in IPD, partially offset by a decrease in the general, chemical and oil and gas industries in FCD. The increase was equally driven by aftermarket and original equipment bookings in EPD, and to a lesser extent original equipment bookings in IPD, partially offset by reduced original equipment bookings in FCD.

Bookings for the six months ended June 30, 2012 increased by $79.9 million, or 3.4%, as compared with the same period in 2011. The increase included negative currency impacts of approximately $111 million. The increase was primarily driven by the chemical, oil and gas and general industries in EPD and IPD, partially offset by the power generation industry in EPD, the water management industry in IPD and the general and oil and gas industries in FCD. The increase was primarily attributable to aftermarket bookings in EPD, and to a lesser extent original equipment bookings in IPD, partially offset by reduced original equipment bookings in FCD.

Sales for the three months ended June 30, 2012 increased by $56.4 million, or 5.0%, as compared with the same period in 2011. The increase included negative currency impacts of approximately $86 million. The increase was primarily due to increased aftermarket sales in EPD, and to a lesser extent original equipment sales in FCD. Net sales to international customers, including export sales from the U.S., were approximately 71% and 72% of total sales for the three months ended June 30, 2012 and 2011, respectively.

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Sales for the six months ended June 30, 2012 increased by $134.2 million, or 6.3%, as compared with the same period in 2011. The increase included negative currency impacts of approximately $109 million. The increase was primarily due to increased original equipment sales in IPD and FCD, and aftermarket sales in EPD, and to a lesser extent original equipment sales in EPD. Net sales to international customers, including export sales from the U.S., were approximately 70% and 72% of total sales for the six months ended June 30, 2012 and 2011, respectively.

Backlog represents the aggregate value of booked but uncompleted customer orders and is influenced primarily by bookings, sales, cancellations and currency effects. Backlog of $2,862.9 million at June 30, 2012 increased by $172.8 million, or 6.4%, as compared with December 31, 2011. Currency effects provided a decrease of approximately $30 million. Approximately 24% of the backlog at June 30, 2012 was related to aftermarket orders.

Gross Profit and Gross Profit Margin

	Three Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
Gross profit	$	384.6		$	369.3
Gross profit margin	32.5		%	32.8		%

	Six Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
Gross profit	$	743.8		$	717.0
Gross profit margin	33.0		%	33.8		%

Gross profit for the three months ended June 30, 2012 increased by $15.3 million, or 4.1%, as compared with the same period in 2011. Gross profit margin for the three months ended June 30, 2012 of 32.5% decreased from 32.8% for the same period in 2011. The decrease was primarily attributable to shipments of certain large, lower margin projects in EPD, slightly offset by a mix shift to aftermarket sales and the effects of lower costs associated with operational improvements. Aftermarket sales increased to approximately 40% of total sales, as compared with approximately 39% of total sales for the same period in 2011. Aftermarket sales generally carry a higher margin compared to original equipment sales.

Gross profit for the six months ended June 30, 2012 increased by $26.8 million, or 3.7%, as compared with the same period in 2011. Gross profit margin for the six months ended June 30, 2012 of 33.0% decreased from 33.8% for the same period in 2011. The decrease was primarily attributable to the effect on revenue of certain large, lower margin projects that shipped from backlog in EPD. The sales mix of original equipment and aftermarket sales was consistent with the same period in 2011 with aftermarket sales representing approximately 41% of sales.

Selling, General and Administrative Expense ("SG&A")

	Three Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
SG&A	$	223.9		$	233.0
SG&A as a percentage of sales	18.9		%	20.7		%

	Six Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
SG&A	$	445.8		$	455.6
SG&A as a percentage of sales	19.8		%	21.5		%

SG&A for the three months ended June 30, 2012 decreased by $9.1 million, or 3.9%, as compared with the same period in 2011. Currency effects yielded a decrease of approximately $11 million. The decrease included a $3.9 million gain from certain legal matters in the second quarter of 2012 and the impact of a $3.9 million Spanish regulatory penalty in the second quarter of 2011 that did not recur. SG&A as a percentage of sales for the three months ended June 30, 2012 improved 180 basis points as compared with the same period in 2011 due to continued focus on cost management.

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SG&A for the six months ended June 30, 2012 decreased by $9.8 million, or 2.2%, as compared with the same period in 2011. Currency effects yielded a decrease of approximately $15 million. The decrease was primarily due to a $10.4 million gain in the first quarter of 2012 from the sale of our manufacturing facility in Rio de Janeiro, Brazil, in preparation for opening a new manufacturing facility there later in 2012, partially offset by increased selling-related expenses in FCD and EPD in support of increased bookings and sales. SG&A as a percentage of sales for the six months ended June 30, 2012 improved 170 basis points as compared with the same period in 2011 due to continued focus on cost management.

Net Earnings from Affiliates

	Three Months Ended June 30,
(Amounts in millions)	2012		2011
Net earnings from affiliates	$	4.1	$	3.8

	Six Months Ended June 30,
(Amounts in millions)	2012		2011
Net earnings from affiliates	$	9.3	$	8.9

Net earnings from affiliates represents our net income from investments in eight joint ventures (one located in each of Japan, Saudi Arabia, South Korea and the United Arab Emirates and two located in each of China and India) that are accounted for using the equity method of accounting. Net earnings from affiliates for the three months ended June 30, 2012 increased $0.3 million, or 7.9%, as compared with the same period in 2011, primarily due to our EPD joint venture in India.

Net earnings from affiliates for the six months ended June 30, 2012 increased $0.4 million, or 4.5%, as compared with the same period in 2011, primarily due to our EPD joint venture in India.

Operating Income and Operating Margin

	Three Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
Operating income	$	164.8		$	140.1
Operating income as a percentage of sales	13.9		%	12.4		%

	Six Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
Operating income	$	307.3		$	270.4
Operating income as a percentage of sales	13.6		%	12.7		%

Operating income for the three months ended June 30, 2012 increased by $24.7 million, or 17.6%, as compared with the same period in 2011. The increase included negative currency impacts of approximately $15 million. The increase was primarily a result of the $15.3 million increase in gross profit. The improvement in operating income as a percentage of sales was primarily due to SG&A as a percentage of sales decreasing to 18.9% from 20.7% for the same period in 2011, slightly offset by the decrease in gross profit margin.

Operating income for the six months ended June 30, 2012 increased by $36.9 million, or 13.6%, as compared with the same period in 2011. The increase included negative currency impacts of approximately $20 million. The increase was primarily a result of the $26.8 million increase in gross profit. The improvement in operating income as a percentage of sales was primarily due to SG&A as a percentage of sales decreasing to 19.8% from 21.5% for the same period in 2011, slightly offset by the decrease in gross profit margin.

Interest Expense and Interest Income

	Three Months Ended June 30,
(Amounts in millions)	2012			2011
Interest expense	$	(8.9	)	$	(9.5	)
Interest income	0.2			0.4

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	Six Months Ended June 30,
(Amounts in millions)	2012			2011
Interest expense	$	(17.7	)	$	(18.1	)
Interest income	0.5			0.9

Interest expense for the three and six months ended June 30, 2012 decreased by $0.6 million and $0.4 million, respectively, as compared with the same periods in 2011. The small decrease was primarily attributable to a slightly lower interest rates on our outstanding debt as compared with the same period in 2011. Approximately 70% of our term loan was at fixed rates at June 30, 2012, including the effects of $325.0 million of notional interest rate swaps.

Interest income for the three and six months ended June 30, 2012 decreased by $0.2 million and $0.4 million, respectively, as compared with the same periods in 2011. The small decrease was primarily attributable to lower average cash balances in the three and six months ended June 30, 2012 compared with the same periods in 2011.

Other (Expense) Income, Net

	Three Months Ended June 30,
(Amounts in millions)	2012			2011
Other (expense) income, net	$	(8.0	)	$	6.0

	Six Months Ended June 30,
(Amounts in millions)	2012			2011
Other (expense) income, net	$	(13.0	)	$	14.5

Other (expense) income, net for the three months ended June 30, 2012 decreased $14.0 million to other expense, net of $8.0 million as compared with the same period in 2011, primarily due to a $9.0 million increase in losses (due to a $4.5 million loss in the current period as compared with a $4.5 million gain in the prior period) on foreign exchange contracts, as well as a $4.6 million increase in losses (due to a $3.8 million loss in the current period as compared with a $0.8 million gain in the prior period) arising from transactions in currencies other than our sites’ functional currencies. These losses reflect the weakening of the Euro versus the U.S. dollar during the three months ended June 30, 2012, as compared to a strengthening during the same period in 2011.

Other (expense) income, net for the six months ended June 30, 2012 decreased $27.5 million to other expense, net of $13.0 million as compared with the same period in 2011, primarily due to a $15.7 million increase in losses (due to a $5.6 million loss in the current period as compared with a $10.1 million gain in the prior period) on foreign exchange contracts, as well as an $11.4 million increase in losses (due to a $7.4 million loss in the current period as compared with a $4.0 million gain in the prior period) arising from transactions in currencies other than our sites’ functional currencies. These losses reflect the weakening of the Euro versus the U.S. dollar during the six months ended June 30, 2012, as compared to a strengthening during the same period in 2011.

Tax Expense and Tax Rate

	Three Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
Provision for income taxes	$	39.6		$	38.2
Effective tax rate	26.7		%	27.9		%

	Six Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
Provision for income taxes	$	75.1		$	71.9
Effective tax rate	27.1		%	26.9		%

Our effective tax rate of 26.7% for the three months ended June 30, 2012 decreased from 27.9% for the same period in 2011. The effective tax rate varied from the U.S. federal statutory rate for the three months ended June 30, 2012 primarily due to the net impact of foreign operations and a net reduction of our reserve for uncertain tax positions due to the lapse of the statute of limitations in certain jurisdictions.

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Our effective tax rate of 27.1% for the six months ended June 30, 2012 increased from 26.9% for the same period in 2011. The effective tax rate varied from the U.S. federal statutory rate for the six months ended June 30, 2012 primarily due to the net impact of foreign operations and a net reduction of our reserve for uncertain tax positions due to the lapse of the statute of limitations in certain jurisdictions.

Other Comprehensive (Expense) Income

	Three Months Ended June 30,
(Amounts in millions)	2012			2011
Other comprehensive (expense) income	$	(56.1	)	$	27.5

	Six Months Ended June 30,
(Amounts in millions)	2012			2011
Other comprehensive (expense) income	$	(21.3	)	$	76.2

Other comprehensive (expense) income for the three months ended June 30, 2012 decreased $83.6 million to expense of $56.1 million as compared with the same period in 2011. The decrease was primarily due to the weakening of the Euro versus the U.S. dollar during the three months ended June 30, 2012, as compared to a strengthening during the same period in 2011.

Other comprehensive (expense) income for the six months ended June 30, 2012 decreased $97.5 million to expense of $21.3 million as compared with the same period in 2011. The decrease was primarily due to the weakening of the Euro versus the U.S. dollar during the six months ended June 30, 2012, as compared to a strengthening during the same period in 2011.

Business Segments

We conduct our operations through three business segments based on type of product and how we manage the business. We evaluate segment performance and allocate resources based on each segment’s operating income. See Note 14 to our condensed consolidated financial statements included in this Quarterly Report for further discussion of our segments. The key operating results for our three business segments, EPD, IPD and FCD, are discussed below.

Engineered Product Division Segment Results

Our largest business segment is EPD, through which we design, manufacture, distribute and service custom and other highly-engineered pumps and pump systems, mechanical seals, auxiliary systems and replacement parts (collectively referred to as "original equipment"). EPD includes longer lead-time, highly-engineered pump products and shorter cycle engineered pumps and mechanical seals that are generally manufactured more quickly. EPD also manufactures replacement parts and related equipment and provides a full array of replacement parts, repair and support services (collectively referred to as "aftermarket"). EPD primarily operates in the oil and gas, power generation, chemical, water management and general industries. EPD operates in 40 countries with 29 manufacturing facilities worldwide, nine of which are located in Europe, 11 in North America, four in Asia and five in Latin America, and it has 125 QRCs, including those co-located in manufacturing facilities.

	Three Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
Bookings	$	602.8		$	588.1
Sales	586.7			557.3
Gross profit	195.7			192.0
Gross profit margin	33.4		%	34.5		%
Segment operating income	95.1			86.7
Segment operating income as a percentage of sales	16.2		%	15.6		%

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	Six Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
Bookings	$	1,265.7		$	1,187.6
Sales	1,121.5			1,081.1
Gross profit	379.1			380.2
Gross profit margin	33.8		%	35.2		%
Segment operating income	187.2			178.4
Segment operating income as a percentage of sales	16.7		%	16.5		%

Bookings for the three months ended June 30, 2012 increased by $14.7 million, or 2.5%, as compared with the same period in 2011. The increase included negative currency effects of approximately $45 million. The increase in customer bookings was primarily driven by the general, oil and gas and chemical industries, partially offset by the power generation industry. Increased customer bookings of $76.7 into North America and $12.1 million (including negative currency effects of approximately $8 million) into Asia Pacific were partially offset by a decrease of $65.1 million (including negative currency impacts of approximately $7 million) into the Middle East and $20.4 million (including negative currency impacts of approximately $10 million) into Europe. The increase was equally driven by customer original equipment and aftermarket bookings. Interdivision bookings (which are eliminated and are not included in consolidated bookings as disclosed above) increased $0.6 million.

Bookings for the six months ended June 30, 2012 increased by $78.1 million, or 6.6%, as compared with the same period in 2011. The increase included negative currency effects of approximately $61 million. The increase in customer bookings was primarily driven by the chemical, oil and gas and general industries, partially offset by the power generation industry. Increased customer bookings of $111.9 million (including negative currency impacts of approximately $11 million) into Asia Pacific, $69.1 million (including negative currency impacts of approximately $8 million) into North America and $44.2 million into Europe (including negative currency impacts of approximately $14 million) were partially offset by a decrease of $129.1 million into the Middle East. The increase was more heavily weighted towards aftermarket bookings. The increase also included the impact of an order in the first quarter of 2011 in excess of $80 million to supply a variety of pumps for a refinery that did not recur. Interdivision bookings (which are eliminated and are not included in consolidated bookings as disclosed above) decreased $3.9 million.

Sales for the three months ended June 30, 2012 increased $29.4 million, or 5.3%, as compared with the same period in 2011. The increase included negative currency effects of approximately $44 million. The increase was primarily driven by increased customer aftermarket sales, primarily resulting from increased sales of $20.4 million (including negative currency impacts of approximately $9 million) into the Middle East and $10.7 million (including negative currency impacts of approximately $12 million) into Latin America, partially offset by decreased sales of $8.3 million (including negative currency impacts of approximately $12 million) into Europe. Interdivision sales (which are eliminated and are not included in consolidated sales as disclosed above) decreased $1.9 million.

Sales for the six months ended June 30, 2012 increased $40.4 million, or 3.7%, as compared with the same period in 2011. The increase included negative currency effects of approximately $57 million. The increase was more heavily weighted towards aftermarket sales, primarily resulting from increased customer sales of $41.9 million (including negative currency impacts of approximately $12 million) into the Middle East, $21.5 million into North America and $10.5 million (including negative currency impacts of approximately $6 million) into Asia Pacific, partially offset by decreased sales of $27.4 million (including negative currency impacts of approximately $16 million) into Europe. Interdivision sales (which are eliminated and are not included in consolidated sales as disclosed above) decreased $11.0 million.

Gross profit for the three months ended June 30, 2012 increased by $3.7 million, or 1.9%, as compared with the same period in 2011. Gross profit margin for the three months ended June 30, 2012 of 33.4% decreased from 34.5% for the same period in 2011. The decrease was primarily attributed to the effect on revenue of certain large projects that have shipped from backlog at low margins, partially offset by a sales mix shift to higher margin aftermarket sales and the effects of lower costs associated with operational execution improvements.

Gross profit for the six months ended June 30, 2012 decreased by $1.1 million, or 0.3%, as compared with the same period in 2011. Gross profit margin for the six months ended June 30, 2012 of 33.8% decreased from 35.2% for the same period in 2011. The decrease was primarily attributed to the effect on revenue of certain large projects that have shipped from backlog at low margins.

Operating income for the three months ended June 30, 2012 increased by $8.4 million, or 9.7%, as compared with the same period in 2011. The increase included negative currency effects of approximately $8 million. The increase was due primarily to decreased SG&A of $4.2 million and increased gross profit of $3.7 million. The decrease in SG&A included the impact of a $3.9 million Spanish regulatory penalty in the second quarter of 2011 that did not recur.

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Operating income for the six months ended June 30, 2012 increased by $8.8 million, or 4.9%, as compared with the same period in 2011. The increase included negative currency effects of approximately $12 million. The increase was due primarily to decreased SG&A of $9.1 million, partially offset by decreased gross profit of $1.1 million. The decrease in SG&A included a $10.4 million gain from the sale of our manufacturing facility in Rio de Janeiro, Brazil, in preparation for opening a new manufacturing facility there later in 2012, partially offset by increased selling-related expenses.

Backlog of $1,577.3 million at June 30, 2012 increased by $135.7 million, or 9.4%, as compared with December 31, 2011. Currency effects provided a decrease of approximately $13 million. Backlog at June 30, 2012 and December 31, 2011 included $19.0 million and $19.9 million, respectively, of interdivision backlog (which is eliminated and not included in consolidated backlog as disclosed above).

Industrial Product Division Segment Results

Through IPD, we design, manufacture, distribute and service engineered, pre-configured industrial pumps and pump systems, including submersible motors (collectively referred to as "original equipment"). Additionally, IPD manufactures replacement parts and related equipment, and provides a full array of support services (collectively referred to as "aftermarket"). IPD primarily operates in the oil and gas, chemical, water management, power generation and general industries. IPD operates 12 manufacturing facilities, three of which are located in the U.S and six in Europe, and it operates 21 QRCs worldwide, including 11 sites in Europe and four in the U.S., including those co-located in manufacturing facilities.

	Three Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
Bookings	$	242.9		$	228.8
Sales	231.7			224.5
Gross profit	55.8			44.2
Gross profit margin	24.1		%	19.7		%
Segment operating income	23.8			9.6
Segment operating income as a percentage of sales	10.3		%	4.3		%

	Six Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
Bookings	$	474.8		$	453.7
Sales	444.9			400.8
Gross profit	105.4			89.5
Gross profit margin	23.7		%	22.3		%
Segment operating income	41.2			22.7
Segment operating income as a percentage of sales	9.3		%	5.7		%

Bookings for the three months ended June 30, 2012 increased by $14.1 million, or 6.2%, as compared with the same period in 2011. This increase included negative currency effects of approximately $13 million. The increase was primarily driven by increased customer bookings in the general and chemical industries. Increased bookings of $15.3 million into Asia Pacific and $10.2 million into North America were partially offset by a decrease of $3.9 million (including negative currency impacts of approximately $4 million) into Europe. The increase was more heavily weighted towards original equipment bookings. Interdivision bookings (which are eliminated and are not included in consolidated bookings as disclosed above) decreased $5.0 million.

Bookings for the six months ended June 30, 2012 increased by $21.1 million, or 4.7%, as compared with the same period in 2011. This increase included negative currency effects of approximately $17 million. The increase was primarily driven by increased customer bookings in the chemical, oil and gas and general industries, partially offset by the water management industry. Increased bookings of $26.4 million into North America and $13.0 million into Latin America were partially offset by a decrease of $15.4 million into Europe. The increase was more heavily weighted towards original equipment customer bookings. Interdivision bookings (which are eliminated and are not included in consolidated bookings as disclosed above) decreased $4.9 million.

Sales for the three months ended June 30, 2012 increased by $7.2 million, or 3.2%, as compared with the same period in 2011. The increase included negative currency effects of approximately $14 million. The increase was equally driven by increased customer original equipment and aftermarket sales. Increased sales of $10.0 million into North America and $4.3 million (including negative currency impacts of approximately $3 million) into the Middle East were partially offset by a decrease of $10.5 million into Latin America. Interdivision sales (which are eliminated and are not included in consolidated sales as disclosed above) decreased $2.7 million.

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Sales for the six months ended June 30, 2012 increased by $44.1 million, or 11.0%, as compared with the same period in 2011. The increase included negative currency effects of approximately $17 million. The increase in customer sales was more heavily weighted towards original equipment sales. The increase was primarily driven by increased sales of $27.6 million into North America and $16.1 million into the Middle East. Interdivision sales (which are eliminated and are not included in consolidated sales as disclosed above) increased $1.7 million.

Gross profit for the three months ended June 30, 2012 increased by $11.6 million, or 26.2%, as compared with the same period in 2011. Gross profit margin for the three months ended June 30, 2012 of 24.1% increased from 19.7% for the same period in 2011. The increase was primarily attributable to $7.1 million of IPD recovery plan realignment charges incurred in the second quarter of 2011.

Gross profit for the six months ended June 30, 2012 increased by $15.9 million, or 17.8%, as compared with the same period in 2011. Gross profit margin for the six months ended June 30, 2012 of 23.7% increased from 22.3% for the same period in 2011. The increase was primarily attributable to $7.1 million of IPD recovery plan realignment charges incurred in the second quarter of 2011.

Operating income for the three months ended June 30, 2012 increased by $14.2 million, or 147.9%, as compared with the same period in 2011. The increase included negative currency effects of approximately $2 million. The increase was due to the $11.6 million increase in gross profit discussed above and a $2.6 million decrease in SG&A.

Operating income for the six months ended June 30, 2012 increased by 18.5 million, or 81.5%, as compared with the same period in 2011. The increase included negative currency effects of approximately $2 million. The increase was due to the $15.9 million increase in gross profit discussed above and a $2.5 million decrease in SG&A.

Backlog of $590.2 million at June 30, 2012 increased by $22.4 million, or 3.9%, as compared with December 31, 2011. Currency effects provided a decrease of approximately $8 million. Backlog at June 30, 2012 and December 31, 2011 included $59.3 million and $56.7 million, respectively, of interdivision backlog (which is eliminated and not included in consolidated backlog as disclosed above).

Flow Control Division Segment Results

Our second largest business segment is FCD, which designs, manufactures and distributes a broad portfolio of engineered-to-order and configured-to-order isolation valves, control valves, valve automation products, boiler controls and related services. 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 59 manufacturing facilities and QRCs in 25 countries around the world, with five of its 25 manufacturing operations located in the U.S. and 13 located in Europe. Based on independent industry sources, we believe that we are the fourth largest industrial valve supplier on a global basis.

	Three Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
Bookings	$	411.6		$	440.0
Sales	401.5			387.1
Gross profit	132.3			131.9
Gross profit margin	33.0		%	34.1		%
Segment operating income	60.4			59.9
Segment operating income as a percentage of sales	15.0		%	15.5		%

	Six Months Ended June 30,
(Amounts in millions, except percentages)	2012			2011
Bookings	$	791.6		$	817.3
Sales	765.4			724.7
Gross profit	259.5			247.5
Gross profit margin	33.9		%	34.2		%
Segment operating income	116.0			107.5
Segment operating income as a percentage of sales	15.2		%	14.8		%

Bookings for the three months ended June 30, 2012 decreased $28.4 million, or 6.5%, as compared with the same period in 2011. The decrease included negative currency effects of approximately $26 million. The decrease in customer bookings was primarily attributable to the chemical, general and oil and gas industries, partially offset by an increase in the power generation

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industry. Decreased customer bookings of $44.1 million (including negative currency impacts of approximately $12 million) into Europe and $11.4 million into Latin America were partially offset by increases of $26.7 million into the Middle East and $5.4 million into North America. The decrease was driven by reduced original equipment bookings.

Bookings for the six months ended June 30, 2012 decreased $25.7 million, or 3.1%, as compared with the same period in 2011. The decrease included negative currency effects of approximately $33 million. The decrease in customer bookings was primarily attributable to the general and oil and gas industries, partially offset by an increase in the power generation industry. Decreased customer bookings of $58.1 million (including negative currency impacts of approximately $16 million) into Europe and $7.4 million into Latin America were partially offset by increases of $38.5 million into the Middle East and $11.5 million into North America. The decrease was driven by reduced original equipment bookings.

Sales for the three months ended June 30, 2012 increased $14.4 million, or 3.7%, as compared with the same period in 2011. The increase included negative currency effects of approximately $28 million. The increase was primarily driven by customer original equipment sales and was primarily attributable to growth in the oil and gas and chemical industries. Increased sales of $22.5 million (including negative currency impacts of approximately $7 million) into Asia Pacific, $11.5 million into North America and $7.3 million into Latin America were partially offset by decreases of $16.7 million (including negative currency impacts of approximately $13 million) into Europe and $10.0 million into the Middle East.

Sales for the six months ended June 30, 2012 increased $40.7 million, or 5.6%, as compared with the same period in 2011. The increase included negative currency effects of approximately $36 million. The increase was primarily driven by customer original equipment sales and was primarily attributable to growth in the oil and gas industry. Increased sales of $42.3 million (including negative currency impacts of approximately $8 million) into Asia Pacific, $25.5 million into North America and $21.2 million into Latin America were partially offset by decreases of $21.6 million (including negative currency impacts of approximately $18 million) into Europe and $19.3 million into the Middle East.

Gross profit for the three months ended June 30, 2012 increased $0.4 million or 0.3%, as compared with the same period in 2011. Gross profit margin for the three months ended June 30, 2012 of 33.0% decreased from 34.1% for the same period in 2011. The decrease was attributable to a shift in product line mix and a less favorable sales mix between original equipment and aftermarket.

Gross profit for the six months ended June 30, 2012 increased by $12.0 million, or 4.8%, as compared with the same period in 2011. Gross profit margin for the six months ended June 30, 2012 of 33.9% decreased from 34.2% for the same period in 2011. The decrease was attributable to a shift in product line mix and a less favorable sales mix between original equipment and aftermarket.

Operating income for the three months ended June 30, 2012 increased by $0.5 million, or 0.8%, as compared with the same period in 2011. The increase included negative currency effects of approximately $4 million. The increase was primarily attributable to the slightly improved gross profit, as well as SG&A leverage.

Operating income for the six months ended June 30, 2012 increased by $8.5 million, or 7.9%, as compared with the same period in 2011. The increase included negative currency effects of approximately $6 million. The increase was principally attributable to the $12.0 million increase in gross profit as discussed above, partially offset by $3.0 million increase in SG&A. Increased SG&A was primarily attributable to increased selling and research and development costs.

Backlog of $775.8 million at June 30, 2012 increased by $15.9 million, or 2.1%, as compared with December 31, 2011. Currency effects provided a decrease of approximately $9 million.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow and Liquidity Analysis

	Six Months Ended June 30,
(Amounts in millions)	2012			2011
Net cash flows provided (used) by operating activities	$	60.4		$	(237.8	)
Net cash flows used by investing activities	(54.6		)	(45.7		)
Net cash flows used by financing activities	(167.2		)	(62.9		)

Existing cash, cash generated by operations and borrowings available under our existing revolving credit facility are our primary sources of short-term liquidity. We monitor the depository institutions that hold our cash and cash equivalents on a regular basis, and we believe that we have placed our deposits with creditworthy financial institutions. Our sources of operating cash generally include the sale of our products and services and the conversion of our working capital, particularly accounts receivable and inventories. Our cash balance at June 30, 2012 was $175.2 million, as compared with $337.4 million at December 31, 2011.

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Our cash balance decreased by $162.2 million to $175.2 million as of June 30, 2012 as compared with December 31, 2011. The cash used in the first half of 2012 included $432.9 million of share repurchases, the funding of increased working capital requirements discussed below, $56.9 million in capital expenditures and $37.1 million in dividend payments, partially offset by $300.0 million of proceeds from short-term financing arrangements.

For the six months ended June 30, 2012, our cash provided by operating activities was $60.4 million as compared with a use of $237.8 million for the same period in 2011, and provided cash to support short-term and cyclical working capital needs. Working capital increased for the six months ended June 30, 2012, due primarily to higher inventory of $155.7 million and lower accounts payable of $46.8 million. Working capital increased for the six months ended June 30, 2011, due primarily to higher inventory of $161.3 million and higher accounts receivable of $121.5 million.

Increases in accounts receivable used $13.3 million of cash flow for the six months ended June 30, 2012, as compared with a use of cash of $121.5 million for the same period in 2011. The increase was primarily attributable to the increase in sales during the period, partially offset by the collection of payments from certain EPC firms and end-users resulting from the resolution of certain previous shipment delays and disputes over project documentation that were outstanding as of December 31, 2011. As of June 30, 2012, our days’ sales outstanding ("DSO") was 81 days as compared with 80 days as of June 30, 2011. For reference purposes based on 2012 sales, an improvement of one day could provide approximately $13 million in cash flow. We have not experienced a significant increase in customer payment defaults.

Increases in inventory used $155.7 million of cash flow for the six months ended June 30, 2012 as compared with $161.3 million for the same period in 2011. The increase was primarily due to cyclically higher raw material and work in process inventory to support higher end of period backlog and certain shipment delays. Inventory turns were 2.8 times as of both June 30, 2012 and June 30, 2011. Our calculation of inventory turns does not reflect the impact of advanced cash received from our customers. For reference purposes based on 2012 data, an improvement of one-tenth of a turn could yield approximately $30.4 million in cash flow. We continue to work through isolated execution issues, which have contributed to the shipment delays mentioned above, and work with our customers to finalize the shipment of backlog and the collection of accounts receivable.

Decreases in accounts payable used $46.8 million of cash flow for the six months ended June 30, 2012 as compared with $114.8 million for the same period in 2011. The reduction in 2012 was primarily due to accounts payable balances related to certain inventory and equipment purchases and corporate-level expenses at December 31, 2010 that required payment during the first quarter of 2011 based on contractual payment terms, that did not recur in the same period in 2012.

Cash flows used by investing activities during the six months ended June 30, 2012 were $54.6 million as compared with $45.7 million for the same period in 2011. Capital expenditures during the six months ended June 30, 2012 were $56.9 million, an increase of $8.4 million as compared with the same period in 2011. In 2012, our capital expenditures are focused on strategic initiatives to pursue new markets, geographic and capacity expansion, information technology infrastructure and cost reduction opportunities and are expected to be between $125 million and $135 million, before consideration of any potential acquisition activity.

Cash flows used by financing activities during the six months ended June 30, 2012 were $167.2 million as compared with $62.9 million for the same period in 2011. Cash outflows during the six months ended June 30, 2012 resulted primarily from the repurchase of $432.9 million of common shares (including the $300.0 million ASR Program payment), $37.1 million of dividend payments and $12.5 million for payments of long-term debt, partially offset by net proceeds from short-term financing of $300.0 million and $10.9 million in excess tax benefits from stock-based compensation activity. Cash outflows for the same period in 2011 resulted primarily from the payment of $34.0 million in dividends, $26.0 million for the repurchase of common shares, and $12.5 million for payments of long-term debt.

Approximately 3% of our term loan is due to mature in the remainder of 2012 and 11% in 2013. As noted above, our term loan and our revolving line of credit both mature in December 2015. After the effects of $325.0 million of notional interest rate swaps, approximately 70% of our term debt was at fixed rates at June 30, 2012. As of June 30, 2012, we had a borrowing capacity of $294.6 million on our $500.0 million revolving credit facility (including outstanding letters of credit), and we had net available capacity under the European LOC Facility of €46.6 million ($59.0 million). Our revolving line of credit and our European LOC Facility are committed and are held by a diversified group of financial institutions.

During the six months ended June 30, 2012 and 2011, we contributed $7.0 million and $3.0 million, respectively, to our U.S. pension plan. At December 31, 2011, as a result of increases in values of the plan’s assets and our contributions to the plan, our U.S. pension plan was fully funded as defined by applicable law. After consideration of our intent to maintain fully funded status, we currently anticipate our contribution to our U.S. pension plan in 2012 will be between approximately $10 million and $20 million, excluding direct benefits paid. We continue to maintain an asset allocation consistent with our strategy to maximize total return, while reducing portfolio risks through asset class diversification.

At June 30, 2012, $157.5 million of our total cash balance of $175.2 million was held by foreign subsidiaries, $120.1 million of which we consider permanently reinvested outside the U.S. Based on the expected 2012 liquidity needs of our various

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geographies, we currently do not anticipate the need to repatriate any permanently reinvested cash to fund domestic operations. However, in the event this cash is needed to fund domestic operations, we estimate the $120.1 million could be repatriated without resulting in a material tax liability.

Considering our current debt structure and cash needs, we currently believe cash flows from operating activities combined with availability under our existing revolving credit facility and our existing cash balance will be sufficient to meet our cash needs for the next 12 months. Cash flows from operations could be adversely affected by economic, political and other risks associated with sales of our products, operational factors, competition, fluctuations in foreign exchange rates and fluctuations in interest rates, among other factors. See "Cautionary Note Regarding Forward-Looking Statements" below.

On May 31, 2012, we announced that our Board of Directors endorsed an updated capital structure strategy designed to make our financial structure more efficient. This capital structure strategy includes: (i) targeting a long-term gross leverage ratio of 1.0x-2.0x total debt to EBITDA through the business cycle, versus then-current gross leverage ratio of 0.7x; and (ii) an expanded share repurchase program of $1.0 billion, including approximately $233 million remaining under the previous repurchase authorization. The expanded share repurchase program includes amounts incremental to our previously-announced policy of annually returning 40% to 50% of running two-year average net earnings to shareholders, which we intend to maintain after attaining the announced target leverage ratio. While we intend to adhere to this policy for the foreseeable future, any future returns of cash, whether through any combination of dividends or share repurchases, will be reviewed individually, declared by our Board of Directors and implemented by management at its discretion, depending on our financial condition, business opportunities at the time and market conditions.

As a part of the $1.0 billion share repurchase program, on June 14, 2012, we entered into an ASR Program with J.P. Morgan Securities LLC, as agent for JPMorgan Chase Bank, N.A., London Branch, under which we agreed to repurchase an aggregate of $300.0 million of our common stock. The ASR Program was funded through a combination of cash on hand, existing capacity on our revolving credit facility and proceeds from a new $250.0 million Bridge Loan, which is described in further detail in Note 5 to our condensed consolidated financial statements included in this Quarterly Report. We are currently evaluating various debt financing alternatives to further implement our new capital structure strategy.

Note 12 to our condensed consolidated financial statements included in this Quarterly Report includes a discussion of our ASR Program, share repurchase program and payments of quarterly dividends on our common stock.

Acquisitions and Dispositions

We regularly evaluate acquisition opportunities of various sizes. The cost and terms of any financing to be raised in conjunction with any acquisition, including our ability to raise economical capital, is a critical consideration in any such evaluation.

Note 2 to our condensed consolidated financial statements included in this Quarterly Report contains a discussion of acquisitions.

Financing

Credit Facilities

A discussion of our credit facilities, including amounts outstanding and applicable interest rates, and our European LOC facility is included in Note 5 to our condensed consolidated financial statements included in this Quarterly Report.

We have entered into interest rate swap agreements to hedge our exposure to variable interest payments related to our Credit Facilities. These agreements are more fully described in Note 4 to our condensed consolidated financial statements included in this Quarterly Report, and in "Item 3. Quantitative and Qualitative Disclosures about Market Risk" below.

See Note 11 to our consolidated financial statements included in our 2011 Annual Report for a comprehensive discussion of our credit facilities and covenants related to those facilities and our European LOC facility. We complied with all covenants through June 30, 2012.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management’s discussion and analysis of financial condition and results of operations are based on our condensed consolidated financial statements and related footnotes contained within this Quarterly Report. Our critical accounting policies used in the preparation of our condensed consolidated financial statements were discussed in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2011 Annual Report. These critical policies, for which no significant changes have occurred in the six months ended June 30, 2012, include:

• Revenue Recognition;

• Deferred Taxes, Tax Valuation Allowances and Tax Reserves;

25

• Reserves for Contingent Loss;

• Retirement 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 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 and Section 21E of the Securities Exchange Act of 1934, 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, and include, without limitation, the following:

• a portion of our bookings may not lead to completed sales, and our ability to convert bookings into revenues at acceptable profit margins;

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

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

• risks associated with cost overruns on fixed fee projects and in accepting customer orders for large complex custom engineered products;

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

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

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

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

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

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

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

• expectations regarding acquisitions and the integration of acquired businesses;

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

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

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

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

• environmental compliance costs and liabilities;

• potential work stoppages and other labor matters;

• access to public and private sources of debt financing;

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

• obligations under our defined benefit pension plans.

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 2011 Annual Report, and may be identified in our Quarterly Reports on Form 10-Q and our other filings with the U.S. Securities and Exchange Commission ("SEC") and/or press releases from time to time. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any forward-looking statement.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We have market risk exposure arising from changes in interest rates and foreign currency exchange rate movements. We are exposed to credit-related losses in the event of non-performance by counterparties to financial instruments, including interest rate swaps and forward exchange contracts, but we currently expect our counterparties will continue to meet their obligations given their current creditworthiness.

Interest Rate Risk

Our earnings are impacted by changes in short-term interest rates as a result of borrowings under our Credit Facilities, which bear interest based on floating rates. At June 30, 2012, after the effect of interest rate swaps, we had $437.5 million of variable rate debt obligations outstanding under our Credit Facilities and the Bridge Loan with a weighted average interest rate of 2.38%. A hypothetical change of 100 basis points in the interest rate for these borrowings, assuming constant variable rate debt levels, would have changed interest expense by $2.2 million for the six months ended June 30, 2012. At June 30, 2012 and December 31, 2011, we had $325.0 and $330.0 million, respectively, of notional amount in outstanding interest rate swaps with third parties with varying maturities through June 2014.

Foreign Currency Exchange Rate Risk

A substantial portion of our operations are conducted by our subsidiaries outside of the U.S. in currencies other than the U.S. dollar. 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 a non-U.S. subsidiary’s functional currency. Generally, we view our investments in foreign subsidiaries from a long-term perspective and, therefore, do not hedge these investments. We use capital structuring techniques to manage our investment in foreign subsidiaries as deemed necessary. We realized net (losses) gains associated with foreign currency translation of $(58.7) million and $27.3 million for the three months ended June 30, 2012 and 2011, respectively, and $(23.6) million and $76.1 million for the six months ended June 30, 2012 and 2011, respectively, which are included in our other comprehensive (expense) income.

We employ a foreign currency risk management strategy to minimize potential changes in cash flows from unfavorable foreign currency exchange rate movements. The use of forward exchange contracts allows us to mitigate transactional exposure to exchange rate fluctuations as the gains or losses incurred on the forward exchange contracts will offset, in whole or in part, losses or gains on the underlying foreign currency exposure. Our policy allows foreign currency coverage only for identifiable foreign currency exposures. As of June 30, 2012, we had a U.S. dollar equivalent of $535.6 million in aggregate notional amount outstanding in forward exchange contracts with third parties, as compared with $481.2 million at December 31, 2011. Transactional currency gains and losses arising from transactions outside of our sites’ functional currencies and changes in fair value of certain forward exchange contracts are included in our consolidated results of operations. We recognized foreign currency net (losses) gains of $(8.3) million and $5.4 million for the three months ended June 30, 2012 and 2011, respectively, and $(13.0) million and $14.1 million for the six months ended June 30, 2012 and 2011, respectively, which are included in other (expense) income, net in the accompanying condensed consolidated statements of income.

Based on a sensitivity analysis at June 30, 2012, a 10% change in the foreign currency exchange rates for the six months ended June 30, 2012 would have impacted our net earnings by approximately $14 million, due primarily to the Euro. 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 forward exchange contracts discussed above.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

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

In connection with the preparation of this Quarterly Report, our management, under the supervision and with the participation of our principal executive officer and principal financial officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2012. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2012.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

We are party to the legal proceedings that are described in Note 10 to our condensed consolidated financial statements included in "Item 1. Financial Statements" of this Quarterly Report, and such disclosure is incorporated by reference into this "Item 1. Legal Proceedings." In addition to the foregoing, we and our subsidiaries are named defendants in certain other ordinary routine lawsuits incidental to our business and are involved from time to time as parties to governmental proceedings, all arising in the ordinary course of business. Although the outcome of lawsuits or other proceedings involving us and our subsidiaries cannot be predicted with certainty, and the amount of any liability that could arise with respect to such lawsuits or other proceedings cannot be predicted accurately, management does not currently expect these matters, either individually or in the aggregate, to have a material effect on our financial position, results of operations or cash flows.

Item 1A. Risk Factors

There are numerous factors that affect our business and results of operations, 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 2011 Annual Report, which contain descriptions of significant factors that might cause the actual results of operations in future periods to differ materially from those currently expected or desired.

There have been no material changes in the risk factors discussed in our 2011 Annual Report and subsequent SEC filings. The risks described in this Quarterly Report, our 2011 Annual Report and in our other SEC filings or press releases from time to

26

time are not the only risks we face. Additional risks and uncertainties are currently deemed immaterial based on management's assessment of currently available information, which remains subject to change; however, new risks that are currently unknown to us may surface in the future that materially adversely affect our business, financial condition, results of operations or cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Note 12 to our condensed consolidated financial statements included in this Quarterly Report includes a comprehensive discussion of our share repurchase program and payment of quarterly dividends on our common stock.

During the quarter ended June 30, 2012, inclusive of the 2,260,738 initial share delivery under the ASR Program, we repurchased a total of 3,307,003 shares of our common stock for $350.8 million (representing an average cost of $106.09 per share). As of June 30, 2012, we have $624.7 million of remaining capacity under our current share repurchase program, which reflects the full $300.0 million value of the ASR Program, which will conclude by the end of 2012. The following table sets forth the repurchase data for each of the three months during the quarter ended June 30, 2012:

	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Number of Shares (or Approximate Dollar Value) That May Yet Be Purchased Under the Program (in millions)
Period
April 1 - 30	271	(1)	$	115.69	—	$	278.0
May 1 - 31	331,294	(2)	107.63		330,000	1,000.0
June 1 - 30	2,977,017	(3)	105.92		2,977,003	624.7		(4)
Total	3,308,582		$	106.09	3,307,003

__________________________________

(1) Represents shares that were tendered by employees to satisfy minimum tax withholding amounts for restricted stock awards at an average price per share of $115.69.

(2) Includes 158 shares that were tendered by employees to satisfy minimum tax withholding amounts for Restricted Shares at an average price per share of $107.92, and includes 1,136 shares purchased at a price of $111.35 per share by a rabbi trust that we established in connection with our director deferral plans, pursuant to which non-employee directors may elect to defer directors’ quarterly cash compensation to be paid at a later date in the form of common stock.

(3) Includes 2,260,738 shares that were initially delivered as part of our ASR Program at a price per share of $106.16 and 14 shares that were tendered by employees to satisfy minimum tax withholding amounts for restricted stock awards at an average price per share of $114.75.

(4) Reflects the full impact of the ASR Program, under which we agreed to repurchase $300.0 million of our common stock. As of June 30, 2012 and as reflected in the table, 2,260,738 shares had been delivered under the ASR Program, representing 80% of the program's value at inception.

Item 6. Exhibits.

A list of exhibits filed or furnished as part of this Quarterly Report on Form 10-Q is set forth on the Exhibits Index immediately following the signature page of this report and is incorporated herein by reference.

SIGNATURES

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

		FLOWSERVE CORPORATION
Date:	July 30, 2012	/s/ Mark A. Blinn
		Mark A. Blinn
		President and Chief Executive Officer (Principal Executive Officer)

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Date:	July 30, 2012	/s/ Michael S. Taff
		Michael S. Taff
		Senior Vice President and Chief Financial Officer (Principal Financial Officer)

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Exhibits Index

Exhibit No.	Description
3.1+	Restated Certificate of Incorporation of Flowserve Corporation.
3.2+	Flowserve Corporation By-Laws, as amended and restated effective May 18, 2012.
10.1	Accelerated Share Repurchase Agreement, dated June 14, 2012, between Flowserve Corporation and J.P. Morgan Securities LLC, as agent for JPMorgan Chase Bank, National Association (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated June 18, 2012).
10.2	Bridge Loan Agreement, dated June 15, 2012, among Flowserve Corporation, JPMorgan Chase Bank, N.A., as administrative agent, and other lenders referred to therein (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K dated June 18, 2012).
31.1+	Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .
31.2+	Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1++	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2++	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

_______________________

+     Filed herewith.

++ Furnished herewith.

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EX-3.1

EXHIBIT 3.1

RESTATED CERTIFICATE OF INCORPORATION

OF

FLOWSERVE CORPORATION

Under Section 807 of the Business Corporation Law

Pursuant to the provisions of Section 807 of the Business Corporation Law, I, the undersigned officer of FLOWSERVE CORPORATION, a New York corporation (the “Corporation”), do hereby certify:

1. The name of the Corporation is Flowserve Corporation. The name under which the Corporation was formed is Duriron Castings Company.

2. The Certificate of Incorporation of the Corporation was filed by the Department of State on May 1, 1912.

3. The amendments to the Certificate of Incorporation effected by this Certificate are as follows:

A new Article NINTH is hereby added to the Certificate of Incorporation, which declassifies the Corporation’s Board of Directors and provides for the annual election of members of the Board of Directors with expiring terms beginning in 2013.

A new Article ELEVENTH is hereby added to the Certificate of Incorporation, which establishes the manner and circumstances in which a special meeting of the shareholders of the Corporation may be called.

4. To accomplish the foregoing amendments, the text of the Certificate of Incorporation is hereby restated as amended in its entirety to read as set forth in the Certificate of Incorporation of the Corporation as hereinafter restated.

5. The restatement of the Certificate of Incorporation herein provided for was authorized by the vote of holders of outstanding shares of the Corporation entitled to vote on the said restatement of the Certificate of Incorporation, having not less than the minimum requisite proportion of votes.

The text of the Certificate of Incorporation is hereby restated in its entirety to read as follows:

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RESTATED CERTIFICATE OF INCORPORATION

OF

FLOWSERVE CORPORATION

FIRST: The name of the corporation is Flowserve Corporation.

SECOND: The purposes for which the corporation is formed are as follows:

To manufacture, fabricate, cast, machine, mold, develop, process, assemble, purchase or otherwise acquire, sell, lease or otherwise dispose of, and in all ways handle and deal in any or all of the following, and to carry on any trade or business incident thereto, connected therewith or in furtherance thereof:

(a) Pumps, valves, pipe and fittings, filters, anodes, fans, heat exchangers, castings, motors and chemical and other process equipment of all kinds;

(b) All kinds of equipment, castings, molded products, articles and supplies used or useful in the manufacturing, transferring, handling or disposal of corrosive or erosive compounds, liquids, or gases or in controlling corrosive or erosive environments of any kind;

(c) All kinds of equipment, components, parts, articles and supplies used or useful in controlling friction or any other mechanical property, function, action or performance or to seal, lubricate or otherwise control or promote movement or flow of solids, liquids and gases of every kind or nature;

(d) Metals, metallurgical alloys and any article in the manufacture or composition of which any alloy or metallurgical compound is a factor;

(e) Non-metallic molded and machined products of all compositions and types and chemicals, chemical compounds and related products of all kinds, including any article in the manufacture or composition of which chemicals, chemical compounds or related products are a factor.

To purchase or otherwise acquire, hold, own, sell or otherwise dispose of real property, improved or unimproved, and personal property, tangible or intangible, including, without limitation, goods, wares and merchandise of every description and the securities and obligations of any issuer.

In addition to the foregoing, the purpose for which the corporation is formed is to engage in any lawful act or activity; provided, however, the corporation is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other

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body without such consent or approval first being obtained.

THIRD: The aggregate number of shares which the corporation shall have authority to issue is 121,000,000 of which 1,000,000 shares, of the par value of $1.00 each, shall be Preferred Stock and 120,000,000 shares, of the par value of $1.25 each, shall be Common Stock. The Preferred Stock may be issued from time to time in one or more series with such distinctive designations as shall distinguish the shares thereof from the shares of all other series and (i) may have such number of shares to constitute each series, which number may be from time to time increased or decreased, but not below the number of shares thereof then outstanding; (ii) may have such voting powers, full or limited, or may be without voting powers; (iii) may be subject to redemption at such time or times and at such prices and on such terms; (iv) may have the benefit of a sinking fund to be applied to the purchase or redemption of such shares, in such amount and applied in such manner; (v) may be entitled to receive dividends (which may be cumulative or noncumulative) at such rate or rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends on any other class or classes or series of stock of the corporation; (vi) may have such rights upon the dissolution of, or upon any distribution of assets of, the corporation; (vii) may be made convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of the corporation at such price or prices or at such rates of exchange, and with such adjustments; and (viii) shall have such other relative rights, preferences and limitations, all as shall hereafter be fixed by the resolution or resolutions providing for the issue of such shares of Preferred Stock from time to time adopted by the Board of Directors of the corporation pursuant to authority so to do which is hereby expressly vested in said Board of Directors.

FOURTH: No holder of shares of any class of the corporation shall have any preemptive rights with respect to, or any preemptive rights to purchase or subscribe for, any shares of any class or other securities of any kind of the corporation.

FIFTH: The office of the corporation is to be located in New York County, State of New York.

SIXTH: The corporation hereby designates the Secretary of State of New York as its agent upon whom process in any action or proceeding against it may be served within the State of New York and the address to which the Secretary of State shall mail a copy of any process against the corporation which may be served upon him pursuant to law is:

Flowserve Corporation

c/o CT Corporation System

111 Eighth Avenue

New York, New York 10011

SEVENTH: Its duration is to be perpetual.

EIGHTH: The number of Directors of the corporation shall be such as from time to time shall be fixed by the By-Laws of the corporation, but shall not be less than three. Any of the

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following actions may be taken by the shareholders of the corporation only by vote of the holders of a majority of all outstanding shares entitled to vote thereon: (a) adoption, amendment or repeal of any by-law, or any provision of this Certificate of Incorporation, relating to (i) the number, classification and terms of office of Directors, (ii) the filling of newly created directorships and vacancies occurring in the Board of Directors, (iii) the removal of Directors, (iv) the power of the Board of Directors to adopt amend or repeal by-laws of the corporation or the vote of the Board of Directors required for any such adoption, amendment or repeal; or (b) any amendment or repeal of this Article EIGHTH. Nothing contained in this Article EIGHTH shall in any way limit the power of the Board of Directors to adopt, amend or repeal by-laws of the corporation.

NINTH: Beginning at the 2013 annual meeting of shareholders, the directors elected to succeed those directors whose terms expire at that meeting shall be elected to a term of office to expire at the 2014 annual meeting of shareholders. At the 2014 annual meeting of shareholders, the directors elected to succeed those directors whose terms expire at that meeting shall be elected to a term of office to expire at the 2015 annual meeting of shareholders. At the 2015 annual meeting of shareholders, and at each annual meeting of shareholders thereafter, each director shall be elected for a term expiring at the next annual meeting of shareholders and until such director’s successor shall have been elected and qualified, except in the case of the director’s prior death, resignation, retirement, disqualification or removal from office.

TENTH:

(a)    The affirmative vote of the holders of at least two thirds of all outstanding shares of capital stock entitled to vote thereon shall be required to authorize, adopt or approve any of the following:

(i) Any plan of merger or consolidation of the corporation with or into any Related Corporation or any affiliate of a Related Corporation;

(ii) Any sale, lease, exchange or other disposition of all or substantially all the assets of the corporation to or with any Related Corporation or any affiliate of a Related Corporation;

(iii) Any issuance or delivery of capital stock or other securities of the corporation in exchange or payment for all or substantially all the assets of any Related Corporation or any affiliate of a Related Corporation; and

(iv) Any amendment or deletion of this Article TENTH.

(b)    As used in this Article TENTH, the following terms shall have the following meanings:

(i) “Related Corporation” shall mean any corporation which, together with its affiliates and associated persons owns, as of the record date for the determination of stockholders entitled to vote on the transaction in question,

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of record or beneficially, directly or indirectly, 10% or more of the shares of capital stock of the corporation entitled to vote on such transaction;

(ii) An “affiliate” of a Related Corporation shall mean any individual, partnership, joint venture, trust, corporation or other entity which, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Related Corporation; and

(iii) An “associated person” of a Related Corporation shall mean any officer or director of, or any beneficial owner, directly or indirectly, of 10% or more of any class of equity security of, such Related Corporation or any of its affiliates.

(c)    Any determination made in good faith by the Board of Directors, on the basis of information at the time available to it, as to whether any corporation is a Related Corporation or whether any person is an affiliate or an associated person of a Related Corporation, shall be conclusive and binding for all purposes of this Article TENTH.

ELEVENTH: Subject to the rights of the holders of any series of preferred stock, special meetings of the shareholders of the corporation, for any purpose or purposes, unless otherwise prescribed by statute, may be called only by (i) the Board of Directors, (ii) the Corporate Governance & Nominating Committee of the Board of Directors, (iii) the Chairman of the Board of Directors, the President or the Chief Executive Officer, or (iv) by the Secretary at the written request in proper form of one or more record holders having an aggregate “net long position” (defined below) of at least twenty-five percent (25%) of the outstanding Common Stock of the corporation, and having held such net long position continuously for at least one year prior to the date such request is delivered to the corporation (the “Requisite Percent”).

For purposes of determining the Requisite Percent, “net long position” shall be determined with respect to each requesting holder in accordance with the definition thereof set forth in Rule 14e-4 under the Securities Exchange Act of 1934 (the “Exchange Act”) as in effect on June 4, 2012, provided that:

(i) for purposes of such definition, in determining such holder’s “short position,” the reference in such Rule to (A) “the date the tender offer is first publicly announced or otherwise made known by the bidder to the holders of the security to be acquired” shall be the date of the relevant special meeting request and all dates in the one year period prior thereto, and (B) the “highest tender offer price or stated amount of the consideration offered for the subject security” shall refer to the closing sales price of the Common Stock of the corporation on the New York Stock Exchange on such corresponding date (or, if such date is not a trading day, the next succeeding trading day), (C) the “person whose securities are the subject of the offer” shall refer to the corporation, and (D) a “subject security” shall refer to the issued and outstanding Common Stock of the corporation; and

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(ii) the net long position of such holder shall be reduced by the number of shares as to which such holder does not, or will not, have the right to vote or direct the vote at such special meeting or as to which such holder has entered into any derivative or other agreement, arrangement or understanding that hedges or transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of such shares.

Whether the requesting holders have complied with the requirements of this Article ELEVENTH shall be determined in good faith by the Board of Directors, which determination shall be conclusive and binding on the corporation and the shareholders. The procedures for calling a special meeting of the shareholders of the corporation shall be established by the Board of Directors in the By-Laws of the corporation.

TWELFTH: The corporation hereby designates CT Corporation System, having an office at 111 Eighth Avenue, New York, New York 10011, as its registered agent upon whom process against it may be served.

THIRTEENTH: No director of this corporation shall be personally liable to this corporation or its shareholders for damages for any breach of duty as a director; provided, however, that, to the extent required by applicable law, the foregoing clause shall not apply to any liability of a director if a judgment or other final adjudication adverse to him establishes (i) that his acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law, (ii) that he personally gained in fact a financial profit or other advantage to which he was not legally entitled, or (iii) that his acts violated Section 719 of the New York Business Corporation Law. Any repeal or modification of this Article THIRTEENTH shall not adversely affect any right or protection of a director of the corporation existing hereunder with respect to any act or omission occurring prior to or at the time of such repeal or modification.

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IN WITNESS WHEREOF, I hereunto sign my name and affirm that the statements made herein are true under penalties of perjury, this 4th day of June, 2012.

/s/ Carey A. O’Connor

Name: Carey A. O’Connor
Title: Vice President and Corporate Secretary

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RESTATED CERTIFICATE OF INCORPORATION

OF

FLOWSERVE CORPORATION

Under Section 807 of the Business Corporation Law

Filed by:

Luke E. Alverson

Senior Counsel, Securities and Corporate Governance

5215 N. O’Connor Blvd., Ste. 2300

Irving, Texas 75039

EX-3.2

EXHIBIT 3.2

FLOWSERVE CORPORATION

BY-LAWS

As Amended and Restated as of May 18, 2012

BY-LAWS

of

FLOWSERVE CORPORATION

Article I

OFFICES

The principal business office of Flowserve Corporation (the “Company”) shall be located in the City of Irving, Dallas County, Texas, and at such place therein as may be determined and designated from time to time by the Board of Directors of the Company (the “Board”). The Company may also have an office or offices at such other place or places as the Board may, from time to time, designate or as the business of the Company may require.

Article II

SHAREHOLDERS MEETINGS

Section 1.    Annual Meeting. The annual meeting of shareholders of the Company for the purpose of electing directors and for the transaction of such other business as may properly come before the meeting, shall be held on such date and at such hour and place, within or without the State of New York, as shall be determined by the Board and stated in the notice of the meeting. The Board acting by resolution may postpone and reschedule any previously scheduled annual meeting of shareholders.

Section 2.    Special Meetings.

(a)Subject to the rights of the holders of any series of preferred stock, special meetings of the shareholders of the Company, for any purpose or purposes, unless otherwise prescribed by statute, may be called only as set forth in Article ELEVENTH of the Certificate of Incorporation.

(b)In order for a shareholder requested special meeting under clause (iv) of Article ELEVENTH of the Certificate of Incorporation (a “Shareholder Requested Special Meeting”) to be called, one or more requests for a special meeting (each, a “Shareholder Special Meeting Request,” and collectively, the “Shareholder Special Meeting Requests”) must be signed by the Requisite Percent (as such term is defined in the Certificate of Incorporation) of record holders (or their duly authorized agents) and must be delivered to the Secretary. The Shareholder Special Meeting Request(s) shall be delivered to the Secretary at the principal executive offices of the Company by registered mail, return receipt requested. Each Shareholder Special Meeting Request shall:

(i) set forth a statement of the specific purpose(s) of the meeting and the matters proposed to be acted on at it;

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(ii) bear the date of signature of each such shareholder (or duly authorized agent) signing the Shareholder Special Meeting Request;

(iii) set forth (A) the name and address, as they appear in the Company’s stock ledger, of each shareholder signing such request (or on whose behalf the Shareholder Special Meeting Request is signed), (B) the class, if applicable, and the number of shares of common stock of the Company that are owned of record and beneficially by each such shareholder, and (C) include documentary evidence of such shareholder’s record and beneficial ownership of such stock;

(iv) set forth all information relating to each such shareholder that must be disclosed in solicitations of proxies for election of directors in an election contest (even if an election contest is not involved), or is otherwise required, in each case, pursuant to Regulation 14A under the Exchange Act; and

(v) contain the information required by Article II, Section 8(a)(ii)(C) of these By-Laws.

Any requesting shareholder may revoke its special meeting request at any time by written revocation delivered to the Secretary at the principal executive offices of the corporation, and if, following such revocation, there are unrevoked requests from shareholders holding in the aggregate less than the Requisite Percent, the Board, in its discretion, may cancel the special meeting.

(c)    Notwithstanding the foregoing, the Secretary shall not be required to call a special meeting of shareholders if:

(i) the Board calls an annual or special meeting of shareholders to be held not later than 60 days after the date on which a valid Shareholder Special Meeting Request has been delivered to the Secretary (the “Delivery Date”); or

(ii) the Shareholder Special Meeting Request(s) (A) is received by the Secretary during the period commencing 90 days prior to the first anniversary of the date of the immediately preceding annual meeting and ending on the date of the next annual meeting; (B) contains an identical or substantially similar item (a “Similar Item”) to an item that was presented at any meeting of shareholders held within one hundred and 120 days prior to the Delivery Date (and, for purposes of this clause (B) the election of directors shall be deemed a “Similar Item” with respect to all items of business involving the election or removal of directors); (C) relates to an item of business that is not a proper subject for action by the party requesting the special meeting under applicable law; (D) was made in a manner that involved a violation of Regulation 14A under the Exchange Act or other applicable law; or (E) does not comply with the provisions of this Section 2.

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(d)    Except as provided in the next sentence, any special meeting shall be held at such date and time as may be fixed by the Board in accordance with these By-Laws and the NYBCL. In the case of a Shareholder Requested Special Meeting, such meeting shall be held at such date and time as may be fixed by the Board, on condition that: (i) the date of any Shareholder Requested Special Meeting shall be not more than 60 days after the record date for such meeting (the “Special Meeting Record Date”), which shall be fixed in accordance with Article II, Section 6 of these By-Laws; (ii) if the Board fails to designate, within 10 days after the Delivery Date, a date and time for a Shareholder Requested Special Meeting, then such meeting shall be held at 9:00 a.m. local time on the 60th day after the Special Meeting Record Date (or, if that day shall not be a business day, then on the next preceding business day); and (iii) in the event that the Board fails to designate a place for a Shareholder Requested Special Meeting within 10 days after the Delivery Date, then such meeting shall be held at the Company’s principal executive offices. In fixing a date and time for any Shareholder Requested Special Meeting, the Board may consider such factors as it deems relevant within the good faith exercise of business judgment, including, without limitation, the nature of the matters to be considered, the facts and circumstances surrounding any request for meeting and any plan of the Board to call an annual meeting or a special meeting.

(e)    Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting pursuant to the Company’s notice of meeting. Business transacted at any Shareholder Requested Special Meeting shall be limited to the purpose(s) stated in the Shareholder Special Meeting Request(s), except that nothing herein shall prohibit the Board from submitting matters, whether or not described in the Shareholder Special Meeting Request(s), to the shareholders at any Shareholder Requested Special Meeting. Notwithstanding the provisions of this Section 2, unless otherwise required by law, if the shareholders (or qualified representatives of the shareholders) who submitted Shareholder Special Meeting Requests do not appear at the Shareholder Requested Special Meeting to present the matters to be presented for consideration that were specified in the Shareholder Special Meeting Request, the Company need not present such matters for a vote at such meeting.

Section 3.    Notice of Meetings. Notice of the place, date and hour and purpose or purposes of any meeting of shareholders shall be given personally, by mail or electronically, not less than 10 or more than 60 days before the date of the meeting, to each shareholder entitled to vote at the meeting. If mailed, the notice shall be deemed given when deposited in the United States mail, postage prepaid, addressed to the shareholder at the shareholder’s address as it appears on the record of shareholders of the Company, unless the shareholder shall have filed with the Secretary of the Company a written request that notices to the shareholder be mailed to a different address, in which case it shall be mailed to the address designated in such request. If transmitted electronically, the notice shall be deemed given when directed to the shareholder’s electronic mail address as supplied by the shareholder to the Secretary of the Company or as otherwise directed pursuant to the shareholder’s authorization or instructions. Any and all notices of a meeting may be waived by a shareholder by submitting a written or electronic waiver either before or after the meeting. The attendance of any shareholder at a meeting in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by such shareholder.

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Section 4.    Quorum. Except as otherwise provided by law, at a meeting of the shareholders, the holders of a majority of the votes of outstanding shares of stock of the Company, entitled to vote at such meeting, whether present in person or represented by proxy, shall constitute a quorum. If at any meeting there shall be no quorum, such holders of a majority of the votes of outstanding shares of stock so present or represented may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such quorum shall have been obtained, when any business may be transacted which might have been transacted at the meeting as first convened had there been a quorum.

Section 5.    Voting and Inspectors.

(a) Except as otherwise provided by law, the Certificate of Incorporation or these By-Laws, at each meeting of the shareholders, each holder of record of outstanding shares of stock of the Company on the record date fixed for determination of shareholders entitled to vote at such meeting shall be entitled to one vote for each share of stock held of record either in person or by proxy. No proxy shall be valid after the expiration of 11 months from the date of its execution unless the shareholder executing the proxy shall have specified therein the length of time it is to continue in force which shall be for some limited period. Except as otherwise provided by law, at elections of directors at an annual or special meeting of shareholders at which a quorum is present, a director shall, except in a contested election, be elected by a majority of the votes cast in favor of or against such nominee by the holders of shares entitled to vote in the election. In a contested election, a director shall be elected by a plurality of the votes cast in favor of or against such nominee by the holders of shares entitled to vote in the election. An election shall be considered to be contested if, as of the record date for such meeting, there are more nominees for election than positions on the Board to be filled by election at that meeting. Except as otherwise provided by law or the Certificate of Incorporation, any other action at an annual or special meeting of shareholders at which a quorum is present shall be authorized by a majority of the votes cast in favor of or against such action by the holders of shares entitled to vote thereon.

(b) Before any meeting of shareholders, the Board shall appoint one or more inspectors of election to act at the meeting or its adjournment and make a written report. If the Board does not make such appointment, or if the person or persons are unable to act at the meeting, then the person presiding at the meeting shall make such appointment. Each inspector, before entering upon the discharge of the inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of the inspector’s ability, and who shall take charge of the polls and after the balloting shall make a certificate of the result of the vote taken. No director of the Company or candidate for the office of director shall be appointed as an inspector of elections.

Section 6.    Record Date. For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or the allotment of any rights, or for the purpose of any other action, the Board may, except as otherwise provided herein or required by law, fix a date as the record date for any such determination of shareholders, which date shall not be more than 60 or

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less than 10 days prior to the date of any meeting of the shareholders or more than 60 days prior to the payment of any dividend or the allotment of any rights or any other action; and in such case only holders of record of stock at the time so fixed shall be entitled to notice of or to vote at such meeting or any adjournment thereof or to express their consent or dissent, or to receive such dividend distribution or rights, as the case may be. If no record date is fixed, (a) the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day immediately prior to the day on which notice is given, or if no notice is given, the day on which the meeting is held and (b) the record date for any purpose other than that specified in clause (a) shall be at the close of business on the day on which the resolution of the Board relating thereto is adopted.

Section 7.    Conduct of Meeting.

(a)Meetings of shareholders shall be presided over by the Chairman of the Board, or in such person’s absence, by a person designated by the Board. The Secretary or Assistant Secretary of the Company shall act as secretary of every meeting, but if neither the Secretary nor an Assistant Secretary is present, the chairman of the meeting shall appoint a secretary of the meeting.

(b)    The Board shall be entitled to make such rules or regulations for the conduct of meetings of shareholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman of the meeting, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in the meeting to shareholders of record of the Company, their duly authorized and constituted proxies and such other persons as the chairman of the meeting shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting and matters that are to be voted on by ballot.

Section 8.    Notice of Shareholder Business and Nominations.

(a)    Annual Meeting.

(i)    Nominations of persons for election to the Board and the proposal of business to be considered by the shareholders may be made at an annual meeting of shareholders only (A) pursuant to the Company’s notice of meeting (or any supplement thereto), (B) by or at the direction of the Board (or any committee thereof) or (C) by a shareholder of the Company who is a shareholder of record at the time the notice provided for in this Section 8 is delivered to the Secretary of the Company, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 8. For the avoidance of doubt, clause (C) above shall be the exclusive means for a shareholder to make nominations or submit other business (other than matters properly brought under Rule 14a-8 of the Securities Exchange Act of 1934 (the “Exchange Act”) and included in the Company’s notice of meeting) before an annual meeting of shareholders.

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(ii)    For nominations or other business to be properly brought before an annual meeting by a shareholder pursuant to Section 8(a)(i)(C) of this Article II, the shareholder must have given timely notice thereof in writing to the Secretary of the Company and such business must be a proper subject for shareholder action under the New York Business Corporation Law (the “NYBCL”). To be considered timely, a shareholder’s notice must be delivered to the Secretary of the Company at the principal business office of the Company not less than 90 or more than 120 days before the first anniversary of the preceding year’s annual meeting of shareholders; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the shareholder to be considered timely must be so delivered not more than 120 days before the annual meeting and not less than the later of (1) 90days before such annual meeting or (2) 10days following the date on which public announcement of the date of such meeting is first made by the Company. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above.

Such shareholder’s notice shall set forth:

(A) as to each person whom the shareholder proposes to nominate for election or re-election as a director:

(1) all information relating to such person that is required to be disclosed pursuant to and in accordance with Regulation 14A under the Exchange Act (including such person’s written consent to being named as a nominee and to serving as a director if elected);

(2) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among the proposing shareholder and any Shareholder Associated Person (defined below), if any, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Rule 404 of Regulation S-K promulgated under the Securities Act of 1933 if the shareholder or any Shareholder Associated Person were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; and

(3) any other information relating to the proposed nomination that is required to be disclosed under applicable law;

(B) as to any other business that the shareholder proposes to bring before the meeting:

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(1) a brief description of the business desired to be brought before the meeting;

(2) the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the By-Laws of the Company, the language of the proposed amendment);

(3) the reasons for conducting such business at the meeting; and

(4) any other information relating to the proposal that is required to be disclosed under applicable law; and

(C) as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made and any Shareholder Associated Person:

(1) the name and address of such shareholder, as they appear on the Company’s books, and of such beneficial owner and any Shareholder Associated Person;

(2) the class or series and number of shares of stock of the Company that are owned, directly or indirectly, beneficially and of record by the shareholder and any beneficial owner and Shareholder Associated Person;

(3) (a) any option, warrant, convertible security, stock appreciation right or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any security of the Company or with a value derived in whole or in part from the value of any security of the Company, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Company or otherwise (a “Derivative Instrument”), directly or indirectly owned beneficially by the shareholder or any Shareholder Associated Person, and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Company; (b) any proxy, contract, arrangement, understanding or relationship pursuant to which the shareholder or any Shareholder Associated Person has, whether alone or with any other Person (defined below), a right to vote, or the ability to control or otherwise influence, explicitly or implicitly, any other shareholder’s or Shareholder Associated Person’s voting of, any security of the Company; (c) any short interest of the shareholder or any

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Shareholder Associated Person in any security of the Company (for purposes of this By-law, a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security); (d) any rights to dividends on the shares of the Company owned beneficially by the shareholder or any Shareholder Associated Person that are separated or separable from the underlying shares of the Company; (e) any proportionate interest in shares of the Company or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which the shareholder or any Shareholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner; (f) any performance-related fees (other than an asset-based fee) that the shareholder or any Shareholder Associated Person is entitled to based on any increase or decrease in the value of shares of the Company or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests; (g) any other information relating to such shareholder and any Shareholder Related Person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations thereunder, including, without limitation, any such interests of the type described in items (a) through (g) of this Section 8(a)(ii)(C)(3) held by members of the proposing shareholder’s or any Shareholder Associated Person’s immediate family sharing the same household;

(4) a representation that the shareholder is a holder of record of stock of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination;

(5) any personal or other material interest in such proposed nomination or business of the proposing shareholder and the beneficial owner, if any, on whose behalf the proposal is made and a description of all agreements, arrangements and understandings between the shareholder or any Shareholder Associated Person, if any, of such shareholder and any other person or persons (including their names) in connection with

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the proposal of such nomination or business by the shareholder; and

(6) a representation as to whether the shareholder or the beneficial owner, if any, intends or is part of a group that intends to (a) deliver a proxy statement or form of proxy to holders of at least the percentage of the Company’s outstanding stock required to approve or adopt the proposal or elect the nominee or (b) otherwise to solicit proxies from shareholders in support of such proposal or nomination.

For purposes of this Section 8, “Person” shall mean any individual, firm, corporation, limited liability company, partnership, trust or other entity (including any successor thereto).

For purposes of this Section 8, “Shareholder Associated Person” shall mean (A) any Person directly or indirectly controlling, controlled by or under common control with, or acting in concert with, a given shareholder, beneficial owner, shareholder nominee and their respective Affiliates and Associates (as defined under Regulation 12B of the Exchange Act or any successor provision), (B) any beneficial owner of any securities of the Company owned of record or beneficially by a given shareholder and (C) any Person directly or indirectly controlling, controlled by or under common control with any person identified under clause (B).

(b)Special Meetings. Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting pursuant to the Company’s notice of meeting.

(c)General.

(i)    Only such persons who are nominated in accordance with the procedures set forth in this Section 8 shall be eligible to be elected at an annual meeting of shareholders of the Company to serve as directors and only such business shall be conducted at an annual meeting of shareholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 8. Except as otherwise provided by law, the chairman of the meeting shall have the power and duty (A) to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 8 (including whether the shareholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicited (or is part of a group that solicited) or did not so solicit, as the case may be, proxies in support of such shareholder’s nominee or proposal in compliance with such shareholder’s representation as required by Section 8(a)(ii)(C)(5) of this Article II) and (B) if any proposed nomination or business was not made or proposed in compliance with this Section 8, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted. Notwithstanding the foregoing provisions of this Section 8, unless otherwise required by law, if the shareholder (or a qualified representative of the shareholder) does not appear at the annual meeting of shareholders to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Company. For purposes of this

9

Section 8, to be considered a qualified representative of the shareholder, a person must be a duly authorized officer, manager or partner of such shareholder or authorized by a writing executed by such shareholder or an electronic transmission delivered by such shareholder to act for such shareholder as proxy at the meeting of shareholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of shareholders.

(ii)    For purposes of this Section 8, a “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the Company with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

Article III

BOARD OF DIRECTORS AND COMMITTEES

Section 1.    Powers. Subject to the provisions of the NYBCL, and to any limitations in the Certificate of Incorporation or these By-Laws relating to action required to be approved by the shareholders, the business of the Company shall be managed under the direction of the Board.

Section 2.    Number and Terms of Directors. Until changed in the manner hereinafter set forth, the number of directors of the Company shall be eleven. The number of directors of the Company may be increased or decreased by amendment of these By-Laws adopted by the shareholders or the Board. No decrease in the number of directors shall shorten the term of any incumbent director.

Beginning at the 2013 annual meeting of shareholders, the directors elected to succeed those directors whose terms expire at that meeting shall be elected to a term of office to expire at the 2014 annual meeting of shareholders. At the 2014 annual meeting of shareholders, the directors elected to succeed those directors whose terms expire at that meeting shall be elected to a term of office to expire at the 2015 annual meeting of shareholders. At the 2015 annual meeting of shareholders, and at each annual meeting of shareholders thereafter, each director shall be elected for a term expiring at the next annual meeting of shareholders and until such director’s successor shall have been elected and qualified, except in the case of the director’s prior death, resignation, retirement, disqualification or removal from office.

Section 3.    Vacancies. Unless otherwise provided in the Certificate of Incorporation or these By-Laws:

(a)Newly created directorships resulting from an increase in the number of directors and vacancies may be filled by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director.

(b)    If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible.

Any directors chosen pursuant to this Section 3 shall hold office until the next meeting of

10

shareholders at which the election of directors is in the regular order of business and until such director’s successor has been elected and qualified.

Section 4.    Meetings of the Board.

(a)    Regular meetings of the Board shall be held at such times as may from time to time be fixed by the Board, and notice of such meetings need not be given. All such meetings shall be held at the principal business office of the Company unless otherwise specified by the resolution.

(b)    Special meetings of the Board may be called by the Board, the Corporate Governance Committee the Chairman of the Board, the President or the Chief Executive Officer at any time, and shall be called by the Secretary of the Company when requested to do so by written notice signed by a majority of the Board. Notice of the place, date and hour of each special meeting of the Board shall be provided to each director personally, by mail, facsimile or telephone, or electronically. If mailed, the notice shall be addressed to the director at such director’s last known address as it appears on the records of the Secretary of the Company and mailed not less than three days before the date of the meeting. If delivered by facsimile or electronically, the notice shall be sent not less than 24 hours before the time of the meeting. If delivered personally or by telephone, the notice shall be given not less than eight hours before the time of the meeting. An affidavit of the person giving notice stating that notice has been given as herein required, and the manner in which given, shall be filed with the Secretary of the Company and shall, in the absence of fraud, be prima facie evidence of the facts therein stated. A notice of special meeting need not state the purpose of such meeting and, unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.

Section 5.    Annual Meeting of Directors. A stated meeting of the Board, to be known as their annual meeting, shall be held each year on the day of the annual shareholders’ meeting and, at such meeting, the officers of the Company for the ensuing year shall be elected. If a quorum of the directors is not present on the date appointed for the annual meeting, the meeting shall be adjourned to some convenient day.

Section 6.    Quorum; Voting. One-third (1/3) of the entire Board, but not less than three, shall constitute a quorum for the transaction of business, but if at any meeting of the Board there shall be less than a quorum present, a majority of the directors present may adjourn the meeting from time to time without notice other than announcement at the meeting, until a quorum shall have been obtained, when any business may be transacted which might have been transacted at the meeting as first convened had there been a quorum. The acts of a majority of the directors present at any meeting at which there is a quorum shall, unless otherwise provided by law, by the Certificate of Incorporation or by the By-Laws, be the acts of the Board.

Section 7.    Committees. The Board, by resolution adopted by a majority of the entire Board, may designate from among its members an executive committee and other committees, each consisting of one or more directors. The resolution designating any such committee shall fix its powers and authority. Any such committee may have all or any of the authority of the Board to the extent provided in the resolution designating such committee subject to applicable law and listing standards, and except that no such committee shall have authority as to the following matters:

11

(a)    the submission to shareholders of any action that needs shareholders’ approval;

(b) the filling of vacancies in the Board or in any committee of the Board;

(c) the fixing of compensation of the Directors for serving on the Board or any committee of the Board;

(d) the amendment or repeal of the By-Laws of the Company, or the adoption of new By-Laws; and

(e) the amendment or repeal of any resolution of the Board which by its terms shall not be so amendable or repealable.

The Board may designate one or more directors as alternate members of any such committee, who may replace any absent member or members at any meeting of such committee.

Each such committee and the members thereof shall serve at the pleasure of the Board; and the Board may at any time fill vacancies in, change the membership of, or dissolve any such committee, subject to applicable law and listing standards.

An act or authorization of an act by any such committee within the authority of the committee provided for in the resolution designating such committee shall be as effective for all purposes as the act or authorization of Board. One-third (1/3) of the members of any such committee, but not less than two, shall constitute a quorum for the transaction of business. Any such committee may act by a majority of its members at a meeting at which there is a quorum.

Section 8.    Action by Unanimous Written Consent. Any action required or permitted to be taken by the Board or any committee thereof may be taken without a meeting if all members of the Board or the committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the members of the Board or committee shall be filed with the minutes of the proceedings of the Board or committee.

Section 9.    Chairman of the Board. The Chairman of the Board shall preside at all meetings of shareholders and directors, and shall perform such other and further duties as may from time to time be required of him by the Board. If the Chairman of the Board is not present at a meeting of the Board, another director chosen by the Board shall preside.

Section 10.     Compensation. Each director of the Company who is not a salaried officer or employee of the Company may receive a reasonable compensation for such director’s services as a director as determined by the Board.

Section 11.     Resignation and Removal.

(a)    Any director may resign at any time upon notice given in writing or by electronic transmission to the Chairman of the Board. Such resignation shall take effect at the time specified in such notice or, if the time be not specified, upon receipt thereof by the Chairman of the Board. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to

12

make it effective.

(b)     In an uncontested election, any nominee for director who duly holds office as a director under these By-Laws and does not receive an affirmative vote of a majority of the votes cast in favor of or against such nominee shall promptly tender his or her resignation after such election. The independent directors of the Board, giving due consideration to the best interests of the Company and its shareholders, shall evaluate the relevant facts and circumstances, and shall make a decision, within 30 days after the election, on whether to accept the tendered resignation. Any director who tenders a resignation pursuant to this provision shall not participate in the Board’s decision. The Board will promptly disclose publicly its decision and, if applicable, the reasons for rejecting the tendered resignation.

(c) Unless otherwise restricted by law, the Certificate of Incorporation or these By-Laws, any director may be removed from office as a director, but only for cause, by the holders of a majority of the votes of outstanding shares of stock of the Company entitled to vote at an election of directors or by a majority of the entire Board.

Section 12.     Meetings by Telephonic Participation. Any one or more members of the Board or any committee thereof may participate in a meeting of the Board or such committee by means of a telephone conference or similar electronic communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at a meeting.

Article IV

OFFICERS

Section 1.    Officers and Qualifications. The officers of the Company may consist of a Chief Executive Officer, Chief Financial Officer, President, one or more Vice Presidents, any one or more of whom may be designated a Senior or Executive Vice President, a Secretary, a Treasurer and such other officers as the Board may determine. Any two offices may be held by the same person.

Section 2.    Election, Term and Compensation. All officers of the Company shall be elected annually by the Board at its annual meeting. Each such individual shall hold office until the next annual meeting of the Board and until his or her successor has been elected and qualified but any such individual may be removed at any time, with or without cause, by the affirmative vote of a majority of the members of the Board then in office. The Board shall determine or oversee the determination of the compensation to be paid to the officers.

Section 3.    Chief Executive Officer. The Chief Executive Officer shall have general charge, supervision and control of the business and affairs of the Company, and of the officers and employees of the Company; all subject to such limitations as the Board may from time to time prescribe.

Section 4.    President. The President shall, unless otherwise provided by resolution of the Board, be the chief operating officer of the Company, with general responsibility for the management and control of the operations of the Company, subject to such limitations as the Board may from time

13

to time prescribe. The President shall perform such other and further duties as may from time to time be required of such person by the Chief Executive Officer or the Board.

Section 5.    Other Officers. Subject to such limitations as the Board may from time to time prescribe, all of the other officers of the Company shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the Chief Executive Officer or the Board.

Article V

CAPITAL STOCK

Section 1.    Certificates for Shares. The interest of each shareholder shall either be uncertificated or evidenced by a certificate or certificates for shares of stock of the Company in such form as the Board may from time to time prescribe. The issuance of shares in uncertificated form shall not affect shares represented by a certificate until such certificate is surrendered to the Company. The certificates of stock shall be signed by the Chairman of the Board, President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and may be sealed with the seal of the Company, and shall be countersigned and registered in such manner, if any, as the Board may by resolution prescribe. The signatures of the officers upon a certificate and the seal of the Company upon such certificate, may be facsimiles. In case any officer who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer before such certificate is issued, it may be issued by the Company with the same effect as if such person were such officer at the date of issue.

Section 2.    Transfer of Shares. Certificated or uncertificated shares of stock of the Company shall be transferred on the books of the Company upon authorization by the registered holder thereof or such holder’s duly authorized attorney, upon surrender and cancellation of certificates for a like number of shares with duly executed power to transfer endorsed thereon or attached thereto, or upon proper assignment in the case of uncertificated shares; provided, however, that the Company shall be entitled to recognize and enforce any lawful restriction on transfer.

Section 3.    Lost or Destroyed Stock Certificates. No certificate for shares of stock or uncertificated shares of the Company shall be issued in place of any certificate alleged to have been lost, stolen or destroyed, except upon production of such evidence of the loss, theft or destruction, and upon indemnification of the Company and its agents to such extent in such manner as the Board may from time to time prescribe.

Article VI

CHECKS, NOTES, ETC.

All checks and drafts on the Company’s bank accounts and all bills of exchange and promissory notes, and all acceptances, obligations and other instruments for payment of money shall be signed by such officer or officers, employee or employees, or agent or agents as shall be

14

designated from time to time either by (a) the Board or (b) by any officer or officers specifically authorized by the Board to make such designations. The signatures of any or all of such signatories may be facsimile signatures and printed, engraved, stamped or otherwise placed upon any such instrument or writing.

Article VII

FISCAL YEAR

The fiscal year of the Company shall commence with the first day of January and end with the last day of December in each year.

Article VIII

CORPORATE SEAL

The Board shall provide a suitable seal, containing the name of the Company.

Article IX

INDEMNIFICATION

Section 1.    Rights to Indemnification and Advancement of Expenses. The Company shall indemnify and advance expenses to any present or future director or officer from and against any and all liabilities and expenses to the broadest and maximum extent permitted by the NYBCL as the same presently exists or to the greater extent permitted by any amendment hereafter adopted.

Section 2.    Employees and Agents. The Company may, to the extent authorized from time to time by the Board and stated in Company policy, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Company on such terms and conditions as shall be determined by the Board.

Section 3.    Resolutions; Agreements. The Company is hereby authorized to extend rights to indemnification and to the advancement of expenses to any person to whom the Company is permitted by applicable law to provide indemnification or the advancement of expenses by resolution of the shareholders, resolution of the Board, or by an agreement.

Section 4.    Nonexclusivity. The rights to indemnification and advancement of expenses conferred by this Article IX shall not be deemed exclusive of any other rights of indemnification or advancement of expenses that any person may have or hereafter acquire under any statute or which the Company may confer by means of the Certificate of Incorporation, these By-Laws, a resolution of shareholders or directors, or an agreement providing for indemnification or advancement of expenses or otherwise.

Section 5.    Insurance. The Company may maintain insurance, at its expense, and to the fullest extent authorized by the NYBCL, to protect itself and any director, officer, employee or agent of the Company or any other corporation of any type or kind, domestic or foreign, or any partnership,

15

joint venture, trust, employee benefit plan or other enterprise against any liabilities, expenses or losses, whether or not the Company would have the power to indemnify such person against such liabilities, expenses or losses under the NYBCL.

Article X

ADOPTION, AMENDMENT OR REPEAL OF BY-LAWS

Subject to any provisions of the Certificate of Incorporation of the Company requiring a greater proportion of votes, By-Laws of the Company may be adopted, amended or repealed at any meeting of shareholders at which a quorum is present by vote of the holders of a majority of the shares voted thereon. Notice of the proposed change shall be given in the notice of such meeting. The Board may, by vote of two-thirds (2/3) of the entire Board, adopt, amend or repeal By-Laws of the Company and may amend or repeal these By-Laws.

Article XI

SUBJECT TO LAW AND CERTIFICATE OF INCORPORATION

All powers, duties and responsibilities provided for in these By-Laws, whether or not explicitly so qualified, are qualified by the Certificate of Incorporation and applicable law.

16

CERTIFICATION

I, Carey A. O’Connor, hereby certify that the foregoing, comprising 16 pages, is a true, correct and complete copy of the Amended and Restated By-Laws of Flowserve Corporation adopted by its Board of Directors effective May 18, 2012.

By:  /s/ Carey A. O’Connor

Carey A. O’Connor, Vice President and Corporate Secretary

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Mark A. Blinn, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012 of Flowserve Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the consolidated financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 30, 2012

/s/ Mark A. Blinn  

Mark A. Blinn 

President and Chief Executive Officer

(Principal Executive Officer) 

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Michael S. Taff, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012 of Flowserve Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the consolidated financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 30, 2012

/s/ Michael S. Taff 

Michael S. Taff

Senior Vice President and Chief Financial Officer

(Principal Financial Officer) 

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Mark A. Blinn, President and Chief Executive Officer of Flowserve Corporation (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Quarterly Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company.

Date: July 30, 2012

/s/ Mark A. Blinn  

Mark A. Blinn 

President and Chief Executive Officer

(Principal Executive Officer) 

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael S. Taff, Senior Vice President and Chief Financial Officer of Flowserve Corporation (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Quarterly Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company.

Date: July 30, 2012

/s/ Michael S. Taff

Michael S. Taff

Senior Vice President and Chief Financial Officer
(Principal Financial Officer) 

XML

Inventories (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Net Components of Inventory
Raw materials	$ 355,627	$ 329,120
Work in process	855,402	793,053
Finished goods	305,172	279,267
Less: Progress billings	(290,169)	(320,934)
Less: Excess and obsolete reserve	(76,854)	(72,127)
Inventories, net	$ 1,149,178	$ 1,008,379

XML

Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Summarized financial information of the reportable segments
Sales to external customers	$ 1,182,225	$ 1,125,752	$ 2,257,205	$ 2,122,959
Intersegment sales	0	0	0	0
Segment operating income	164,796	140,106	307,319	270,359
Gain from sale of manufacturing facility			10,549	595
EPD [Member]
Summarized financial information of the reportable segments
Sales to external customers	570,494	539,213	1,090,336	1,038,973
Intersegment sales	16,163	18,080	31,129	42,091
Segment operating income	95,054	86,686	187,231	178,442
Gain from sale of manufacturing facility			10,400
IPD [Member]
Summarized financial information of the reportable segments
Sales to external customers	212,354	202,483	405,735	363,395
Intersegment sales	19,326	22,033	39,131	37,446
Segment operating income	23,830	9,617	41,181	22,693
FCD [Member]
Summarized financial information of the reportable segments
Sales to external customers	399,377	384,056	761,134	720,591
Intersegment sales	2,162	3,029	4,296	4,091
Segment operating income	60,353	59,935	116,046	107,469
Reportable Segment [Member]
Summarized financial information of the reportable segments
Sales to external customers	1,182,225	1,125,752	2,257,205	2,122,959
Intersegment sales	37,651	43,142	74,556	83,628
Segment operating income	179,237	156,238	344,458	308,604
Eliminations and All Others [Member]
Summarized financial information of the reportable segments
Sales to external customers	0	0	0	0
Intersegment sales	(37,651)	(43,142)	(74,556)	(83,628)
Segment operating income	$ (14,441)	$ (16,132)	$ (37,139)	$ (38,245)

XML

Derivative Instruments and Hedges (Fair Value Balance Sheet Disclosures) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Nondesignated [Member] | Forward Exchange Contracts [Member]
The fair value of forward exchange contracts not designated as hedging instruments and interest rate swaps in cash flow hedging relationships
Current derivative assets	$ 8,427	$ 2,330
Noncurrent derivative assets	46	10
Current derivative liabilities	21,034	11,196
Noncurrent derivative liabilities	266	516
Cash Flow Hedging [Member] | Interest Rate Swap [Member]
The fair value of forward exchange contracts not designated as hedging instruments and interest rate swaps in cash flow hedging relationships
Current derivative assets	0	33
Noncurrent derivative assets	36	71
Current derivative liabilities	1,227	761
Noncurrent derivative liabilities	$ 476	$ 547

XML

Equity Method Investments (Tables)

6 Months Ended

Jun. 30, 2012

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investment Summarized Financial Information

Summarized below is combined financial statement information, based on the most recent financial information (unaudited), for those investments:

	Three Months Ended June 30,						Six Months Ended June 30,
(Amounts in thousands)	2012			2011			2012			2011
Revenues	$	67,671		$	70,909		$	150,908		$	150,141
Gross profit	19,189			20,209			44,752			47,925
Income before provision for income taxes	13,161			13,338			32,433			33,136
Provision for income taxes	(3,935		)	(3,902		)	(9,903		)	(10,132		)
Net income	$	9,226		$	9,436		$	22,530		$	23,004

XML

Legal Matters and Contingencies (Details)	6 Months Ended
	Jun. 30, 2012 sites
Legal Matters and Contingencies
Number of former public waste disposal sites	7
Oil-for-Food Program [Member]
Legal Matters and Contingencies
Number of French companies for investigation	170
Number of participants in U.N Oil-for-Food Program	93
Number of foreign subsidiaries	2

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Debt (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Jun. 15, 2012	Dec. 31, 2011
Debt including capital lease obligations
Term Loan	$ 462,500		$ 475,000
Bridge Loan	250,000	250,000	0
Line of Credit Facility, Amount Outstanding	50,000		0
Capital lease obligations and other borrowings	34,275		30,216
Debt and capital lease obligations	796,775		505,216
Less amounts due within one year	370,635		53,623
Total debt due after one year	$ 426,140		$ 451,593

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Derivative Instruments and Hedges

6 Months Ended

Jun. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedges

Derivative Instruments and Hedges

Our risk management and derivatives policy specifies the conditions under which we may enter into derivative contracts. See Notes 1 and 6 to our consolidated financial statements included in our 2011 Annual Report and Note 6 of this Quarterly Report for additional information on our derivatives. We enter into forward exchange contracts to hedge our cash flow risks associated with transactions denominated in currencies other than the local currency of the operation engaging in the transaction. At June 30, 2012 and December 31, 2011, we had $535.6 million and $481.2 million, respectively, of notional amount in outstanding forward exchange contracts with third parties. At June 30, 2012, the length of forward exchange contracts currently in place ranged from two days to 18 months. Also as part of our risk management program, we enter into interest rate swap agreements to hedge exposure to floating interest rates on certain portions of our debt. At June 30, 2012 and December 31, 2011, we had $325.0 million and $330.0 million, respectively, of notional amount in outstanding interest rate swaps with third parties. All interest rate swaps are highly effective. At June 30, 2012, the maximum remaining length of any interest rate swap contract in place was approximately 36 months.

We are exposed to risk from credit-related losses resulting from nonperformance by counterparties to our financial instruments. We perform credit evaluations of our counterparties under forward exchange contracts and interest rate swap agreements and expect all counterparties to meet their obligations. If material, we would adjust the values of our derivative contracts for our or our counterparties’ credit risks. We have not experienced credit losses from our counterparties.

The fair value of forward exchange contracts not designated as hedging instruments are summarized below:

	June 30,		December 31,
(Amounts in thousands)	2012		2011
Current derivative assets	$	8,427	$	2,330
Noncurrent derivative assets	46		10
Current derivative liabilities	21,034		11,196
Noncurrent derivative liabilities	266		516

The fair value of interest rate swaps in cash flow hedging relationships are summarized below:

	June 30,		December 31,
(Amounts in thousands)	2012		2011
Current derivative assets	$	—	$	33
Noncurrent derivative assets	36		71
Current derivative liabilities	1,227		761
Noncurrent derivative liabilities	476		547

Current and noncurrent derivative assets are reported in our condensed consolidated balance sheets in prepaid expenses and other and other assets, net, respectively. Current and noncurrent derivative liabilities are reported in our condensed consolidated balance sheets in accrued liabilities and retirement obligations and other liabilities, respectively.

The impact of net changes in the fair values of forward exchange contracts not designated as hedging instruments are summarized below:

	Three Months Ended June 30,					Six Months Ended June 30,
(Amounts in thousands)	2012			2011		2012			2011
(Loss) gain recognized in income	$	(4,522	)	$	4,528	$	(5,641	)	$	10,103

The impact of net changes in the fair values of interest rate swaps in cash flow hedging relationships are summarized below:

	Three Months Ended June 30,						Six Months Ended June 30,
(Amounts in thousands)	2012			2011			2012			2011
Loss reclassified from accumulated other comprehensive income into income for settlements, net of tax	$	(232	)	$	(396	)	$	(399	)	$	(808	)
Loss recognized in other comprehensive income, net of tax	(144		)	(1,073		)	(703		)	(1,237		)

Gains and losses recognized in our condensed consolidated statements of income for forward exchange contracts and interest rate swaps are classified as other (expense) income, net, and interest expense, respectively. At June 30, 2012, we expect to recognize losses of $0.9 million, net of deferred taxes, into earnings in the next twelve months related to interest rate swap agreements based on their fair values at June 30, 2012.

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Retirement and Postretirement Benefits (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
U.S Defined Benefit Plans [Member]
Components of the net periodic cost for retirement and postretirement benefits
Service cost	$ 5.4	$ 4.6	$ 10.6	$ 9.9
Interest cost	4.0	4.3	8.2	8.6
Expected return on plan assets	(5.2)	(5.4)	(10.6)	(10.9)
Amortization of prior service benefit	(0.3)	(0.3)	(0.6)	(0.6)
Amortization of unrecognized net loss (gain)	3.0	2.7	6.1	5.4
Net periodic cost (benefit) recognized	6.9	5.9	13.7	12.4
Non-U.S Defined Benefit Plans [Member]
Components of the net periodic cost for retirement and postretirement benefits
Service cost	1.2	1.3	2.3	2.5
Interest cost	3.3	3.3	6.7	6.6
Expected return on plan assets	(2.1)	(2.0)	(4.2)	(4.0)
Amortization of prior service benefit	0	0	0	0
Amortization of unrecognized net loss (gain)	1.0	0.5	2.0	1.0
Net periodic cost (benefit) recognized	3.4	3.1	6.8	6.1
Postretirement Medical Benefits [Member]
Components of the net periodic cost for retirement and postretirement benefits
Service cost	0	0	0	0
Interest cost	0.4	0.5	0.7	0.9
Expected return on plan assets	0	0	0	0
Amortization of prior service benefit	0	(0.4)	0	(0.8)
Amortization of unrecognized net loss (gain)	(0.3)	(0.3)	(0.8)	(0.7)
Net periodic cost (benefit) recognized	0.1	(0.2)	(0.1)	(0.6)
Minimum [Member] | U.S Defined Benefit Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year	10		10
Maximum [Member] | U.S Defined Benefit Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year	$ 20		$ 20

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Basis of Presentation and Accounting Policies Basis of Presentation and Accounting Policies (Details) (USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
Accounting Policies [Abstract]
Estimated unfavorable impact on operating income due to shimpment delays	$ 0	$ 0

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Summarized Financial Information of the Reportable Segments

							Subtotal–		Eliminations
Three Months Ended June 30, 2012							Reportable		and All			Consolidated
	EPD		IPD		FCD		Segments		Other			Total
Sales to external customers	$	570,494	$	212,354	$	399,377	$	1,182,225	$	—		$	1,182,225
Intersegment sales	16,163		19,326		2,162		37,651		(37,651		)	—
Segment operating income	95,054		23,830		60,353		179,237		(14,441		)	164,796
							Subtotal–		Eliminations
Three Months Ended June 30, 2011							Reportable		and All			Consolidated
	EPD		IPD		FCD		Segments		Other			Total
Sales to external customers	$	539,213	$	202,483	$	384,056	$	1,125,752	$	—		$	1,125,752
Intersegment sales	18,080		22,033		3,029		43,142		(43,142		)	—
Segment operating income	86,686		9,617		59,935		156,238		(16,132		)	140,106

							Subtotal–		Eliminations
Six Months Ended June 30, 2012							Reportable		and All			Consolidated
	EPD		IPD		FCD		Segments		Other			Total
Sales to external customers	$	1,090,336	$	405,735	$	761,134	$	2,257,205	$	—		$	2,257,205
Intersegment sales	31,129		39,131		4,296		74,556		(74,556		)	—
Segment operating income	187,231		41,181		116,046		344,458		(37,139		)	307,319
							Subtotal–		Eliminations
Six Months Ended June 30, 2011							Reportable		and All			Consolidated
	EPD		IPD		FCD		Segments		Other			Total
Sales to external customers	$	1,038,973	$	363,395	$	720,591	$	2,122,959	$	—		$	2,122,959
Intersegment sales	42,091		37,446		4,091		83,628		(83,628		)	—
Segment operating income	178,442		22,693		107,469		308,604		(38,245		)	270,359

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Shareholders' Equity (Details) (USD $)	0 Months Ended	3 Months Ended		6 Months Ended					0 Months Ended
	May 31, 2012	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Jun. 15, 2012	Feb. 20, 2012	Dec. 31, 2011	May 31, 2012 Share Repurchase Program 2011 [Member]	Jun. 15, 2012 ASR Program [Member]
Shareholders' Equity [Line Items]
Dividends on Common Stock, minimum							$ 0.32
Dividends on Common Stock, maximum							$ 0.36
Stock Repurchase Program, Authorized Amount	$ 1,000,000,000									$ 300,000,000
Repurchase of shares		3,307,003	100,000	3,492,003	212,500					2,260,738
treasury stock, percentage, acquired										80.00%
Treasury Stock Acquired, Average Cost Per Share										$ 106.16
Treasury stock, percentage, delivered at program settlement										20.00%
Bridge Loan		250,000,000		250,000,000		250,000,000		0
Repurchases of shares, value		350,800,000	12,200,000	372,900,000	26,000,000					300,000,000
Stock Repurchase Program, Remaining Authorized Repurchase Amount				$ 624,700,000					$ 233,000,000

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Acquisition (Details) (Lawrence Pumps [Member], USD $) In Millions, unless otherwise specified	Oct. 28, 2011
Lawrence Pumps [Member]
Business Acquisition [Line Items]
Percent of business acquired	100.00%
Business Acquisition, Cost of Acquired Entity, Purchase Price	$ 88.2

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Stock-Based Compensation Plans (Details) (USD $) In Millions, except Share data, unless otherwise specified	78 Months Ended	3 Months Ended		6 Months Ended			6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012 Restricted Shares [Member]	Jun. 30, 2011 Restricted Shares [Member]	Jun. 30, 2012 Restricted Shares [Member]	Jun. 30, 2011 Restricted Shares [Member]	Dec. 31, 2011 Restricted Shares [Member]	Jun. 30, 2012 Performance Based Restricted Stock Award [Member]	Jun. 30, 2012 Performance Based Restricted Stock Award [Member] Minimum [Member]	Jun. 30, 2012 Performance Based Restricted Stock Award [Member] Maximum [Member]	Jun. 30, 2012 Plan 2010 [Member]	Jan. 01, 2010 Plan 2010 [Member]	Jun. 30, 2012 Plan 2004 [Member]	Apr. 21, 2004 Plan 2004 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized to issue under share based compensation plans											2,900,000		3,500,000
Common stock available under Stock option plan										2,162,227		275,945
Options granted	0
Stock based compensation expense		$ 5.1	$ 5.2	$ 10.2	$ 11.0
Stock based compensation expense, pre-tax		7.6	7.7	15.4	16.3
Unearned compensation cost on restricted stock awards		42.0		42.0		27.0
Recognition of unearned compensation (years)				2 years
Fair value of Restricted Shares vested		$ 1.2	$ 1.2	$ 36.2	$ 34.8
Unvested Restricted Shares outstanding		743,005		743,005		1,052,199	324,000
Period for achieving performance targets on performance based units (years)							3 years
Vesting percentage								0.00%	200.00%
Cliff vesting period (in months)							36 months
Minimum Range of Vesting provisions							0
Maximum Range of Vesting provisions							643,000
Estimated vesting of shares based on performance shares							451,000

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Stock-Based Compensation Plans

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation Plans

Stock-Based Compensation Plans

We established the Flowserve Corporation Equity and Incentive Compensation Plan (the "2010 Plan") effective January 1, 2010. This shareholder-approved plan authorizes the issuance of up to 2,900,000 shares of our common stock in the form of incentive stock options, non-statutory stock options, restricted shares, restricted share units and performance-based units (collectively referred to as "Restricted Shares"), stock appreciation rights and bonus stock. Of the 2,900,000 shares of common stock authorized under the 2010 Plan, 2,162,227 remain available for issuance as of June 30, 2012. In addition to the 2010 Plan, we also maintain the Flowserve Corporation 2004 Stock Compensation Plan (the "2004 Plan"), which was established on April 21, 2004. The 2004 Plan authorized the issuance of up to 3,500,000 shares of common stock through grants of Restricted Shares, stock options and other equity-based awards. Of the 3,500,000 shares of common stock authorized under the 2004 Plan, 275,945 remain available for issuance as of June 30, 2012. No stock options have been granted since 2006.

Restricted Shares – Awards of Restricted Shares are valued at the closing market price of our common stock on the date of grant. The unearned compensation is amortized to compensation expense over the vesting period of the restricted shares. We had unearned compensation of $42.0 million and $27.0 million at June 30, 2012 and December 31, 2011, respectively, which is expected to be recognized over a weighted-average period of approximately two years. These amounts will be recognized into net earnings in prospective periods as the awards vest. The total fair value of Restricted Shares vested during each of the three months ended June 30, 2012 and 2011 was $1.2 million. The total fair value of Restricted Shares vested during the six months ended June 30, 2012 and 2011 was $36.2 million and $34.8 million, respectively.

We recorded stock-based compensation expense of $5.1 million ($7.6 million pre-tax) and $5.2 million ($7.7 million pre-tax) for the three months ended June 30, 2012 and 2011, respectively. We recorded stock-based compensation expense of $10.2 million ($15.4 million pre-tax) and $11.0 million ($16.3 million pre-tax) for the six months ended June 30, 2012 and 2011, respectively.

The following table summarizes information regarding Restricted Shares:

	Six Months Ended June 30, 2012
	Shares		Weighted Average Grant-Date Fair Value
Number of unvested shares:
Outstanding - January 1, 2012	1,052,199		$	84.62
Granted	294,093		114.03
Vested	(575,023	)	62.97
Cancelled	(28,264	)	114.97
Outstanding - June 30, 2012	743,005		$	111.86

Unvested Restricted Shares outstanding as of June 30, 2012, includes approximately 324,000 units with performance-based vesting provisions. Performance-based units are issuable in common stock and vest upon the achievement of pre-defined performance targets, primarily based on our average annual return on net assets over a three-year period as compared with the same measure for a defined peer group for the same period. Most units were granted in three annual grants since January 1, 2010 and have a vesting percentage between 0% and 200% depending on the achievement of the specific performance targets. Compensation expense is recognized ratably over a cliff-vesting period of 36 months, based on the fair market value of our common stock on the date of grant, as adjusted for anticipated forfeitures. During the performance period, earned and unearned compensation expense is adjusted based on changes in the expected achievement of the performance targets. Vesting provisions range from 0 to 643,000 shares based on performance targets. As of June 30, 2012, we estimate vesting of approximately 451,000 shares based on expected achievement of performance targets.

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Stock-Based Compensation Plans (Information Regarding Restricted Shares) (Details) (Restricted Shares [Member], USD $)	6 Months Ended
	Jun. 30, 2012
Restricted Shares [Member]
Number of unvested shares:
Outstanding - January 1, 2012, Shares	1,052,199
Granted, Shares	294,093
Vested, Shares	(575,023)
Cancelled, Shares	(28,264)
Outstanding - June 30, 2012, Shares	743,005
Outstanding - January 1, 2012, Weighted Average Grant-Date Fair Value	$ 84.62
Granted, Weighted Average Grant-Date Fair Value	$ 114.03
Vested, Weighted Average Grant-Date Fair Value	$ 62.97
Cancelled, Weighted Average Grant-Date Fair Value	$ 114.97
Outstanding - June 30, 2012, Weighted Average Grant-Date Fair Value	$ 111.86

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Equity Method Investments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012 ventures	Jun. 30, 2011	Jun. 30, 2012 ventures	Jun. 30, 2011
Schedule of Equity Method Investments [Line Items]
Number of Joint Ventures	8		8
Equity Method Investment, Summarized Financial Information, Income Statement
Revenues	$ 67,671	$ 70,909	$ 150,908	$ 150,141
Gross profit	19,189	20,209	44,752	47,925
Income before provision for income taxes	13,161	13,338	32,433	33,136
Provision for income taxes	(3,935)	(3,902)	(9,903)	(10,132)
Net income	$ 9,226	$ 9,436	$ 22,530	$ 23,004
Japan [Member]
Schedule of Equity Method Investments [Line Items]
Number of Joint Ventures	1		1
Saudi Arabia [Member]
Schedule of Equity Method Investments [Line Items]
Number of Joint Ventures	1		1
South Korea [Member]
Schedule of Equity Method Investments [Line Items]
Number of Joint Ventures	1		1
United Arab Emirates [Member]
Schedule of Equity Method Investments [Line Items]
Number of Joint Ventures	1		1
China [Member]
Schedule of Equity Method Investments [Line Items]
Number of Joint Ventures	2		2
India [Member]
Schedule of Equity Method Investments [Line Items]
Number of Joint Ventures	2		2

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Condensed Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Statement [Abstract]
Sales	$ 1,182,225	$ 1,125,752	$ 2,257,205	$ 2,122,959
Cost of sales	(797,623)	(756,414)	(1,513,420)	(1,405,926)
Gross profit	384,602	369,338	743,785	717,033
Selling, general and administrative expense	(223,892)	(232,983)	(445,781)	(455,622)
Net earnings from affiliates	4,086	3,751	9,315	8,948
Operating income	164,796	140,106	307,319	270,359
Interest expense	(8,922)	(9,534)	(17,731)	(18,139)
Interest income	237	394	519	883
Other (expense) income, net	(8,046)	5,985	(12,985)	14,474
Earnings before income taxes	148,065	136,951	277,122	267,577
Provision for income taxes	(39,580)	(38,227)	(75,095)	(71,857)
Net earnings, including noncontrolling interests	108,485	98,724	202,027	195,720
Less: Net (earnings) loss attributable to noncontrolling interests	(1,169)	8	(1,586)	(5)
Net earnings attributable to Flowserve Corporation	$ 107,316	$ 98,732	$ 200,441	$ 195,715
Net earnings per share attributable to Flowserve Corporation common shareholders:
Basic	$ 1.99	$ 1.77	$ 3.70	$ 3.51
Diluted	$ 1.98	$ 1.76	$ 3.67	$ 3.48
Cash dividends declared per share	$ 0.36	$ 0.32	$ 0.72	$ 0.64

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Income Taxes (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Tax Disclosure [Abstract]
Income before income tax	$ 148,065,000	$ 136,951,000	$ 277,122,000	$ 267,577,000
Provision for income taxes	39,580,000	38,227,000	75,095,000	71,857,000
Effective tax rate	26.70%	27.90%	27.10%	26.90%
Decrease in unrecognized tax benefits for the period			3,200,000
Unrecognized tax benefits minimum amount of estimated reduction within the next twelve months	14,300,000		14,300,000
Unrecognized tax benefits maximum amount of estimated reduction within the next twelve months	$ 26,900,000		$ 26,900,000

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Basis of Presentation and Accounting Policies

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Basis of Presentation and Accounting Policies

Basis of Presentation and Accounting Policies

Basis of Presentation

The accompanying condensed consolidated balance sheet as of June 30, 2012, the related condensed consolidated statements of income and comprehensive income for the three and six months ended June 30, 2012 and 2011, and the condensed consolidated statements of cash flows for the six months ended June 30, 2012 and 2011, of Flowserve Corporation, are unaudited. In management’s opinion, all adjustments comprising normal recurring adjustments necessary for a fair presentation of such condensed consolidated financial statements have been made.

The accompanying condensed consolidated financial statements and notes in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012 ("Quarterly Report") are presented as permitted by Regulation S-X and do not contain certain information included in our annual financial statements and notes thereto. Accordingly, the accompanying condensed consolidated financial information should be read in conjunction with the consolidated financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2011 ("2011 Annual Report").

European Sovereign Debt Crisis – At June 30, 2012, we had no direct investments in European sovereign or non-sovereign debt. However, certain of our defined benefit plans hold investments in European equity and fixed income securities as discussed in Note 12 to our consolidated financial statements included in our 2011 Annual Report. Other than broad, macro-level economic impacts, including foreign exchange rate impacts, we did not experience any direct or measurable disruptions during the three and six months ended June 30, 2012 due to the European sovereign debt crisis. We will continue to monitor and evaluate the impact of any future developments in the region on our current business, our customers and suppliers and the state of the global economy.

Events in North Africa and Middle East – As previously disclosed in our 2011 Annual Report, during 2011 political and economic conditions in North Africa caused us to experience shipment delays to this region. For the three and six months ended June 30, 2012 there was no impact to operating income due to delayed shipments to this region. The preponderance of our physical assets in the region are located in the Kingdom of Saudi Arabia and the United Arab Emirates and have, to date, not been significantly affected by the unrest elsewhere in the region.

Accounting Policies

Significant accounting policies, for which no significant changes have occurred in the six months ended June 30, 2012, are detailed in Note 1 to our consolidated financial statements included in our 2011 Annual Report.

Accounting Developments

Pronouncements Implemented

In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs," which clarifies the requirements in accounting principles generally accepted in the United States ("U.S. GAAP") for measuring fair value and for disclosing information about fair value measurements in order to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and International Financial Reporting Standards ("IFRSs"). The amendments do not result in a major change in the application of the requirements in Topic 820, but clarify the application of existing fair value measurement requirements and change particular principles or requirements for measuring fair value and for disclosing information about fair value measurements. Our adoption of ASU No. 2011-04, effective January 1, 2012, had no impact on our consolidated financial condition and results of operations.

In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (Accounting Standards Codification ("ASC") 220): Presentation of Comprehensive Income," which specifies that an entity has the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This amendment also requires an entity to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income. In December 2011, the FASB issued ASU No. 2011-12, "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05," to defer the requirement to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income. Our adoption of ASU Nos. 2011-05 and 2011-12, effective January 1, 2012, had no impact on our consolidated financial condition and results of operations.

In September 2011, the FASB issued ASU No. 2011-08, "Intangibles - Goodwill and Other (ASC 350): Testing Goodwill for Impairment," which specifies that an entity has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. Our adoption of ASU No. 2011-08, effective January 1, 2012, had no impact on our consolidated financial condition and results of operations.

Pronouncements Not Yet Implemented

In December 2011, the FASB issued ASU No. 2011-11, "Disclosures about Offsetting Assets and Liabilities," which requires enhanced disclosures about financial instruments and derivative instruments that are either (1) offset in accordance with either ASC 210-20-45, "Balance Sheet - Offsetting," or ASC 815-10-45, "Derivatives and Hedging - Overall," or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either ASC 210-20-45 or ASC 815-10-45. ASU No. 2011-11 is effective for fiscal years, and interim periods within those years, beginning after December 31, 2012. The disclosure requirements shall be applied retrospectively for all periods presented. The adoption of ASU No. 2011-11 will not have an impact on our consolidated financial condition and results of operations.

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Derivative Instruments and Hedges (Fair Value of Interest Rate Swaps in Cash Flow Hedging Relationships) (Details) (Interest Rate Swap [Member], Cash Flow Hedging [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Interest Rate Swap [Member] | Cash Flow Hedging [Member]
Impact of net changes in fair values of interest rate swaps in cash flow hedging relationships
Loss reclassified from accumulated other comprehensive income into income for settlements, net of tax	$ (232)	$ (396)	$ (399)	$ (808)
Loss recognized in other comprehensive income, net of tax	$ (144)	$ (1,073)	$ (703)	$ (1,237)

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Derivative Instruments and Hedges (Tables)

6 Months Ended

Jun. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Fair Value of Forward Exchange Contracts Not Designated as Hedging Instruments

The fair value of forward exchange contracts not designated as hedging instruments are summarized below:

	June 30,		December 31,
(Amounts in thousands)	2012		2011
Current derivative assets	$	8,427	$	2,330
Noncurrent derivative assets	46		10
Current derivative liabilities	21,034		11,196
Noncurrent derivative liabilities	266		516

Summary of Fair Value of Interest Rate Swaps in Cash Flow Hedging Relationships

The fair value of interest rate swaps in cash flow hedging relationships are summarized below:

	June 30,		December 31,
(Amounts in thousands)	2012		2011
Current derivative assets	$	—	$	33
Noncurrent derivative assets	36		71
Current derivative liabilities	1,227		761
Noncurrent derivative liabilities	476		547

Impact of Net Changes in Fair Values of Forward Exchange Contracts Not Designated as Hedging Instruments

The impact of net changes in the fair values of forward exchange contracts not designated as hedging instruments are summarized below:

	Three Months Ended June 30,					Six Months Ended June 30,
(Amounts in thousands)	2012			2011		2012			2011
(Loss) gain recognized in income	$	(4,522	)	$	4,528	$	(5,641	)	$	10,103

Impact of Net Changes in the Fair Values of Interest Rate Swaps in Cash Flow Hedging Relationships

The impact of net changes in the fair values of interest rate swaps in cash flow hedging relationships are summarized below:

	Three Months Ended June 30,						Six Months Ended June 30,
(Amounts in thousands)	2012			2011			2012			2011
Loss reclassified from accumulated other comprehensive income into income for settlements, net of tax	$	(232	)	$	(396	)	$	(399	)	$	(808	)
Loss recognized in other comprehensive income, net of tax	(144		)	(1,073		)	(703		)	(1,237		)

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Derivative Instruments and Hedges (Details Textual) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Derivative [Line Items]
Notional amount in outstanding forward exchange contracts with third parties	$ 535.6	$ 481.2
Notional amount in outstanding interest rate swaps with third parties	325.0	330.0
Maximum remaining length of interest rate swap contract	36 months
Reclassification from accumulated other comprehensive income to earnings	12 months
Interest Rate Swap [Member] | Cash Flow Hedging [Member]
Derivative [Line Items]
Estimated net losses on derivative instruments designated as cash flow hedges in one year	$ 0.9
Maximum [Member]
Derivative [Line Items]
Period of forward exchange contracts	18 months
Minimum [Member]
Derivative [Line Items]
Period of forward exchange contracts	2 days

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Inventories (Tables)

6 Months Ended

Jun. 30, 2012

Inventory Disclosure [Abstract]

Net Components of Inventory

Inventories, net consisted of the following:

	June 30,			December 31,
(Amounts in thousands)	2012			2011
Raw materials	$	355,627		$	329,120
Work in process	855,402			793,053
Finished goods	305,172			279,267
Less: Progress billings	(290,169		)	(320,934		)
Less: Excess and obsolete reserve	(76,854		)	(72,127		)
Inventories, net	$	1,149,178		$	1,008,379

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Acquisition

6 Months Ended

Jun. 30, 2012

Business Combinations [Abstract]

Acquisition

Acquisition

Lawrence Pumps, Inc.

As discussed in Note 2 to our consolidated financial statements included in our 2011 Annual Report, effective October 28, 2011, we acquired for inclusion in Engineered Product Division ("EPD"), 100% of Lawrence Pumps, Inc ("LPI"), a privately-owned, U.S.-based pump manufacturer. The final purchase price of $88.2 million reflects immaterial adjustments to goodwill and current liabilities during the six months ended June 30, 2012. LPI specializes in the design, development and manufacture of engineered centrifugal slurry pumps for critical services within the petroleum refining, petrochemical, pulp and paper and energy markets. No pro forma financial information has been presented due to immateriality.

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Statement of Other Comprehensive Income [Abstract]
Net earnings, including noncontrolling interests	$ 108,485	$ 98,724	$ 202,027	$ 195,720
Other comprehensive income:
Foreign currency translation adjustments, net of tax	(58,699)	27,318	(23,559)	76,121
Pension and other postretirement effects, net of tax	2,501	854	2,546	459
Cash flow hedging activity, net of tax	88	(677)	(304)	(429)
Other comprehensive income	(56,110)	27,495	(21,317)	76,151
Comprehensive income, including noncontrolling interests	52,375	126,219	180,710	271,871
Comprehensive income attributable to noncontrolling interests	(1,022)	4	(1,474)	(432)
Comprehensive income attributable to Flowserve Corporation	51,353	126,223	179,236	271,439
Statement [Line Items]
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax	35,520	(15,508)	14,256	(43,191)
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Tax	(1,278)	(548)	(1,662)	(644)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax	$ (78)	$ 387	$ 159	$ 246

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Shareholders' Equity

6 Months Ended

Jun. 30, 2012

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Dividends – On February 20, 2012, our Board of Directors authorized an increase in the payment of quarterly dividends on our common stock from $0.32 per share to $0.36 per share payable quarterly beginning on April 13, 2012. Generally, our dividend date-of-record is in the last month of the quarter, and the dividend is paid the following month.

Share Repurchase Program – On May 31, 2012, we announced that our Board of Directors endorsed an updated capital structure strategy. A part of this capital structure strategy includes returning additional capital more quickly to shareholders through an expanded share repurchase program of $1.0 billion. The $1.0 billion share repurchase program authorization included approximately $233 million of remaining capacity under our prior share repurchase program, which was originally approved by our Board of Directors on September 12, 2011 and replenished on December 15, 2011. Our share repurchase program does not have an expiration date, and we reserve the right to limit or terminate the repurchase program at anytime without notice.

As a part of the $1.0 billion share repurchase program, on June 14, 2012, we entered into an accelerated share repurchase program (the “ASR Program”) with J.P. Morgan Securities LLC, as agent for JPMorgan Chase Bank, N.A., London Branch, under which we agreed to repurchase an aggregate of $300.0 million of our common stock. Under the ASR Program, we paid $300.0 million and received an initial delivery of 2,260,738 shares, representing 80% of the ASR Program's value at the then-current price of $106.16 per share. The remaining 20% of the ASR Program's value will be delivered at program settlement, with the final number of shares to be repurchased based on the volume-weighted average price of our common stock during the repurchase period, less an agreed upon discount and adjusted for the initial share delivery. Under the terms of the ASR Program, at settlement, we could either receive additional shares from the counterparty or be required to deliver additional shares or cash, at our option, to the counterparty. The ASR Program will be complete by the end of 2012.

The ASR Program was accounted for as two separate transactions: (i) as shares of common stock acquired in a treasury stock transaction and (ii) as a forward contract indexed to our own common stock. The initial delivery of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net earnings per share from the effective date of the ASR Program. We have determined that the forward contract indexed to our common stock met all of the applicable criteria for equity classification. The ASR Program was funded through a combination of cash on hand, existing capacity on our revolving credit facility and proceeds from a new $250.0 million Bridge Loan, which is described in further detail in Note 5 above.

Inclusive of the ASR Program's 2,260,738 initial share delivery, representing 80% of the program's value, we repurchased 3,307,003 shares of our outstanding common stock for $350.8 million, and 100,000 shares for $12.2 million, during the three months ended June 30, 2012 and 2011, respectively. We repurchased 3,492,003 shares of our outstanding common stock for $372.9 million, and 212,500 shares for $26.0 million, during the six months ended June 30, 2012 and 2011, respectively. As of June 30, 2012, we have $624.7 million of remaining capacity under our current share repurchase program, which reflects the full $300.0 million value of the ASR Program, which will conclude by the end of 2012.

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Document and Entity Information Document	6 Months Ended
	Jun. 30, 2012	Jul. 23, 2012
Document Information [Line Items]
Entity Registrant Name	FLOWSERVE CORP
Entity Central Index Key	0000030625
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		51,129,781

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Income Taxes

6 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the three months ended June 30, 2012, we earned $148.1 million before taxes and provided for income taxes of $39.6 million, resulting in an effective tax rate of 26.7%. For the six months ended June 30, 2012, we earned $277.1 million before taxes and provided for income taxes of $75.1 million resulting in an effective tax rate of 27.1%. The effective tax rate varied from the U.S. federal statutory rate for the three and six months ended June 30, 2012 primarily due to the net impact of foreign operations and a net reduction of our reserve for uncertain tax positions due to the lapse of the statute of limitations in certain jurisdictions.

For the three months ended June 30, 2011, we earned $137.0 million before taxes and provided for income taxes of $38.2 million, resulting in an effective tax rate of 27.9%. For the six months ended June 30, 2011, we earned $267.6 million before taxes and provided for income taxes of $71.9 million, resulting in an effective tax rate of 26.9%. The effective tax rate varied from the U.S. federal statutory rate for the three months ended June 30, 2011 primarily due to the net impact of foreign operations. The effective tax rate varied from the U.S. federal statutory rate for the six months ended June 30, 2011 primarily due to the net impact of foreign operations and the lapse of the statute of limitations in certain jurisdictions.

As of June 30, 2012, the amount of unrecognized tax benefits decreased by $3.2 million from December 31, 2011, due to the net impacts of currency translation adjustments and expiration of statutes. With limited exception, we are no longer subject to U.S. federal, state and local income tax audits for years through 2007 or non-U.S. income tax audits for years through 2004. We are currently under examination for various years in China, Germany, India, Italy, Singapore, the U.S. and Venezuela.

It is reasonably possible that within the next 12 months the effective tax rate will be impacted by the resolution of some or all of the matters audited by various taxing authorities. It is also reasonably possible that we will have the statute of limitations close in various taxing jurisdictions within the next 12 months. As such, we estimate we could record a reduction in our tax expense of between $14.3 million and $26.9 million within the next 12 months.

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Condensed Consolidated Balance Sheets (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 175,213	$ 337,356
Accounts receivable, net of allowance for doubtful accounts of $19,174 and $20,351, respectively	1,057,642	1,060,249
Inventories, net	1,149,178	1,008,379
Deferred taxes	126,605	121,905
Prepaid expenses and other	109,009	100,465
Total current assets	2,617,647	2,628,354
Property, plant and equipment, net of accumulated depreciation of $749,973 and $719,992, respectively	591,805	598,746
Goodwill	1,042,410	1,045,077
Deferred taxes	19,291	17,843
Other intangible assets, net	154,839	163,482
Other assets, net	179,891	169,112
Total assets	4,605,883	4,622,614
Current liabilities:
Accounts payable	541,925	597,342
Accrued liabilities	831,182	808,601
Debt due within one year	370,635	53,623
Deferred taxes	8,848	10,755
Total current liabilities	1,752,590	1,470,321
Long-term debt due after one year	426,140	451,593
Retirement obligations and other liabilities	429,549	422,470
Shareholders' equity:
Common shares, $1.25 par value Shares authorized - 120,000 Shares issued - 58,931 and 58,931, respectively	73,664	73,664
Capital in excess of par value	538,944	621,083
Retained earnings	2,367,469	2,205,524
Equity before treasury stock deferred compensation equity and accumulated other comprehensive loss net of tax and noncontrolling interest	2,980,077	2,900,271
Treasury shares, at cost - 8,080 and 5,025 shares, respectively	(765,729)	(424,052)
Deferred compensation obligation	10,554	9,691
Accumulated other comprehensive loss	(237,302)	(216,097)
Total Flowserve Corporation shareholders' equity	1,987,600	2,269,813
Noncontrolling interest	10,004	8,417
Total equity	1,997,604	2,278,230
Total liabilities and equity	4,605,883	4,622,614
Statement [Line Items]
Allowance for Doubtful Accounts Receivable, Current	19,174	20,351
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 749,973	$ 719,992
Common Stock, Par or Stated Value Per Share	$ 1.25	$ 1.25
Common Stock, Shares Authorized	120,000	120,000
Common Stock, Shares, Issued	58,931	58,931
Treasury Stock, Shares	8,080	5,025

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Inventories

6 Months Ended

Jun. 30, 2012

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories, net consisted of the following:

	June 30,			December 31,
(Amounts in thousands)	2012			2011
Raw materials	$	355,627		$	329,120
Work in process	855,402			793,053
Finished goods	305,172			279,267
Less: Progress billings	(290,169		)	(320,934		)
Less: Excess and obsolete reserve	(76,854		)	(72,127		)
Inventories, net	$	1,149,178		$	1,008,379

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Fair Value

6 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Our financial instruments are presented at fair value or approximate fair value in our condensed consolidated balance sheets. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models may be applied. Assets and liabilities recorded at fair value in our condensed consolidated balance sheets are categorized by hierarchical levels based upon the level of judgment associated with the inputs used to measure their fair values. Recurring fair value measurements are limited to investments in derivative instruments and certain equity securities. The fair value measurements of our derivative instruments are determined using models that maximize the use of the observable market inputs including interest rate curves and both forward and spot prices for currencies, and are classified as Level II under the fair value hierarchy. The fair values of our derivatives are included above in Note 4. The fair value measurements of our investments in equity securities are determined using quoted market prices. The fair values of our investments in equity securities, and changes thereto, are immaterial to our consolidated financial position and results of operations. The fair value of our debt was estimated using interest rates on similar debt recently issued by companies with credit metrics similar to ours and is classified as Level II under the fair value hierarchy. The carrying value of our debt is included above in Note 5 and approximates fair value.

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Debt (Tables)

6 Months Ended

Jun. 30, 2012

Debt Disclosure [Abstract]

Debt Including Capital Lease Obligations

Debt, including capital lease obligations, consisted of:

	June 30,		December 31,
(Amounts in thousands, except percentages)	2012		2011
Term Loan, interest rate of 2.46% and 2.58% at June 30, 2012 and December 31, 2011, respectively	$	462,500	$	475,000
Bridge Loan, interest rate of 2.24% at June 30, 2012	250,000		—
Revolving credit facility, interest rate of 2.24% at June 30, 2012	50,000		—
Capital lease obligations and other borrowings	34,275		30,216
Debt and capital lease obligations	796,775		505,216
Less amounts due within one year	370,635		53,623
Total debt due after one year	$	426,140	$	451,593

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Segment Information

6 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Segment Information

Segment Information

We are principally engaged in the worldwide design, manufacture, distribution and service of industrial flow management equipment. We provide long lead-time, highly engineered pumps, shorter lead-time engineered pumps, standardized, general purpose pumps, mechanical seals, industrial valves and related automation products and solutions primarily for oil and gas, chemical, power generation, water management and other general industries requiring flow management products and services.

Our business segments, defined below, share a focus on industrial flow control technology and have a high number of common customers. These segments also have complementary product offerings and technologies that are often combined in applications that provide us a net competitive advantage. Our segments also benefit from our global footprint and our economies of scale in reducing administrative and overhead costs to serve customers more cost effectively.

We conduct our operations through these three business segments based on type of product and how we manage the business:

• Engineered Product Division ("EPD") for long lead-time, custom and other highly-engineered pumps and pump systems, mechanical seals, auxiliary systems and replacement parts and related services;

• Industrial Product Division ("IPD") for engineered and pre-configured industrial pumps and pump systems and related products and services; and

• Flow Control Division ("FCD") for engineered and industrial valves, control valves, actuators and controls and related services.

For decision-making purposes, our CEO and other members of senior executive management use financial information generated and reported at the reportable segment level. Our corporate headquarters does not constitute a separate division or business segment. We evaluate segment performance and allocate resources based on each reportable segment’s operating income. Amounts classified as "Eliminations and All Other" include corporate headquarters costs and other minor entities that do not constitute separate segments. Intersegment sales and transfers are recorded at cost plus a profit margin, with the sales and related margin on such sales eliminated in consolidation.

The following is a summary of the financial information of the reportable segments reconciled to the amounts reported in the condensed consolidated financial statements:

							Subtotal–		Eliminations
Three Months Ended June 30, 2012							Reportable		and All			Consolidated
	EPD		IPD		FCD		Segments		Other			Total
Sales to external customers	$	570,494	$	212,354	$	399,377	$	1,182,225	$	—		$	1,182,225
Intersegment sales	16,163		19,326		2,162		37,651		(37,651		)	—
Segment operating income	95,054		23,830		60,353		179,237		(14,441		)	164,796
							Subtotal–		Eliminations
Three Months Ended June 30, 2011							Reportable		and All			Consolidated
	EPD		IPD		FCD		Segments		Other			Total
Sales to external customers	$	539,213	$	202,483	$	384,056	$	1,125,752	$	—		$	1,125,752
Intersegment sales	18,080		22,033		3,029		43,142		(43,142		)	—
Segment operating income	86,686		9,617		59,935		156,238		(16,132		)	140,106

							Subtotal–		Eliminations
Six Months Ended June 30, 2012							Reportable		and All			Consolidated
	EPD		IPD		FCD		Segments		Other			Total
Sales to external customers	$	1,090,336	$	405,735	$	761,134	$	2,257,205	$	—		$	2,257,205
Intersegment sales	31,129		39,131		4,296		74,556		(74,556		)	—
Segment operating income	187,231		41,181		116,046		344,458		(37,139		)	307,319
							Subtotal–		Eliminations
Six Months Ended June 30, 2011							Reportable		and All			Consolidated
	EPD		IPD		FCD		Segments		Other			Total
Sales to external customers	$	1,038,973	$	363,395	$	720,591	$	2,122,959	$	—		$	2,122,959
Intersegment sales	42,091		37,446		4,091		83,628		(83,628		)	—
Segment operating income	178,442		22,693		107,469		308,604		(38,245		)	270,359

EPD's operating income for the six months ended June 30, 2012, included a $10.4 million gain from the sale of a manufacturing facility in Rio de Janeiro, Brazil, in preparation for opening a new manufacturing facility there later in 2012.

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Legal Matters and Contingencies

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Legal Matters and Contingencies

Legal Matters and Contingencies

Asbestos-Related Claims

We are a defendant in a substantial number of lawsuits that seek to recover damages for personal injury allegedly caused by exposure to asbestos-containing products manufactured and/or distributed by our heritage companies in the past. While the overall number of asbestos-related claims has generally declined in recent years, there can be no assurance that this trend will continue, or that the average cost per claim will not further increase. Asbestos-containing materials incorporated into any such products were primarily encapsulated and used as internal components of process equipment, and we do not believe that any significant emission of asbestos fibers occurred during the use of this equipment.

Our practice is to vigorously contest and resolve these claims, and we have been successful in resolving a majority of claims with little or no payment. Historically, a high percentage of resolved claims have been covered by applicable insurance or indemnities from other companies, and we believe that a substantial majority of existing claims should continue to be covered by insurance or indemnities. Accordingly, we have recorded a liability for our estimate of the most likely settlement of asserted claims and a related receivable from insurers or other companies for our estimated recovery, to the extent we believe that the amounts of recovery are probable and not otherwise in dispute. While unfavorable rulings, judgments or settlement terms regarding these claims could have a material adverse impact on our business, financial condition, results of operations and cash flows, we currently believe the likelihood is remote. In one asbestos insurance related matter, we have a claim in litigation against relevant insurers substantially in excess of the recorded receivable. If our claim is resolved more favorably than reflected in this receivable, we would benefit from a gain in the amount of such excess. We are currently unable to estimate the impact, if any, of unasserted asbestos-related claims, although future claims would also be subject to then existing indemnities and insurance coverage.

United Nations Oil-for-Food Program

In mid-2006, French authorities began an investigation of over 170 French companies, of which our French subsidiary was included, concerning suspected inappropriate activities conducted in connection with the United Nations Oil for Food Program. As anticipated and as previously disclosed, the French investigation of our French subsidiary was formally opened in the first quarter of 2010, and our French subsidiary has filed a formal response with the French court. In July 2012, the French court ruled against our procedural motions to challenge the constitutionality of the charges and quash the indictment.  We are now in the process of filing a formal appeal with the French Supreme Court to seek a reversal of the French court decision.  We currently do not expect to incur additional case resolution costs of a material amount in this matter; however, if the French authorities take enforcement action against our French subsidiary regarding its investigation, we may be subject to monetary and non-monetary penalties, which we currently do not believe will have a material adverse effect on our company.

In addition to the governmental investigation referenced above, on June 27, 2008, the Republic of Iraq filed a civil suit in federal court in New York against 93 participants in the United Nations Oil-for-Food Program, including us and our two foreign subsidiaries that participated in the program. There have been no material developments in this case since it was initially filed. We intend to vigorously contest the suit, and we believe that we have valid defenses to the claims asserted. While we cannot predict the outcome of the suit at the present time, we do not currently believe the resolution of this suit will have a material adverse financial impact on our company.

Other

We are currently involved as a potentially responsible party at seven former public waste disposal sites in various stages of evaluation or remediation. The projected cost of remediation at these sites, as well as our alleged "fair share" allocation, will remain uncertain until all studies have been completed and the parties have either negotiated an amicable resolution or the matter has been judicially resolved. At each site, there are many other parties who have similarly been identified. Many of the other parties identified are financially strong and solvent companies that appear able to pay their share of the remediation costs. Based on our information about the waste disposal practices at these sites and the environmental regulatory process in general, we believe that it is likely that ultimate remediation liability costs for each site will be apportioned among all liable parties, including site owners and waste transporters, according to the volumes and/or toxicity of the wastes shown to have been disposed of at the sites. We believe that our exposure for existing disposal sites will not be material.

We are also a defendant in a number of other lawsuits, including product liability claims, that are insured, subject to the applicable deductibles, arising in the ordinary course of business, and we are also involved in other uninsured routine litigation incidental to our business. We currently believe none of such litigation, either individually or in the aggregate, is material to our business, operations or overall financial condition. However, litigation is inherently unpredictable, and resolutions or dispositions of claims or lawsuits by settlement or otherwise could have an adverse impact on our financial position, results of operations or cash flows for the reporting period in which any such resolution or disposition occurs.

Although none of the aforementioned potential liabilities can be quantified with absolute certainty except as otherwise indicated above, we have established reserves covering exposures relating to contingencies, to the extent believed to be reasonably estimable and probable based on past experience and available facts. While additional exposures beyond these reserves could exist, they currently cannot be estimated. We will continue to evaluate and update the reserves as necessary and appropriate.

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Equity Method Investments

6 Months Ended

Jun. 30, 2012

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Equity Method Investments

As of June 30, 2012, we had investments in eight joint ventures (one located in each of Japan, Saudi Arabia, South Korea, and the United Arab Emirates and two located in each of China and India) that were accounted for using the equity method. Summarized below is combined financial statement information, based on the most recent financial information (unaudited), for those investments:

	Three Months Ended June 30,						Six Months Ended June 30,
(Amounts in thousands)	2012			2011			2012			2011
Revenues	$	67,671		$	70,909		$	150,908		$	150,141
Gross profit	19,189			20,209			44,752			47,925
Income before provision for income taxes	13,161			13,338			32,433			33,136
Provision for income taxes	(3,935		)	(3,902		)	(9,903		)	(10,132		)
Net income	$	9,226		$	9,436		$	22,530		$	23,004

The provision for income taxes is based on the tax laws and rates in the countries in which our investees operate. The taxation regimes vary not only by their nominal rates, but also by the allowability of deductions, credits and other benefits. Our share of net income is reflected in our condensed consolidated statements of income.

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Earnings Per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The following is a reconciliation of net earnings of Flowserve Corporation and weighted average shares for calculating net earnings per common share. Earnings per weighted average common share outstanding was calculated as follows:

	Three Months Ended June 30,
(Amounts in thousands, except per share data)	2012		2011
Net earnings of Flowserve Corporation	$	107,316	$	98,732
Dividends on restricted shares not expected to vest	4		4
Earnings attributable to common and participating shareholders	$	107,320	$	98,736
Weighted average shares:
Common stock	53,740		55,483
Participating securities	255		264
Denominator for basic earnings per common share	53,995		55,747
Effect of potentially dilutive securities	271		495
Denominator for diluted earnings per common share	54,266		56,242
Earnings per common share:
Basic	$	1.99	$	1.77
Diluted	1.98		1.76

	Six Months Ended June 30,
(Amounts in thousands, except per share data)	2012		2011
Net earnings of Flowserve Corporation	$	200,441	$	195,715
Dividends on restricted shares not expected to vest	7		7
Earnings attributable to common and participating shareholders	$	200,448	$	195,722
Weighted average shares:
Common stock	53,972		55,420
Participating securities	261		281
Denominator for basic earnings per common share	54,233		55,701
Effect of potentially dilutive securities	415		590
Denominator for diluted earnings per common share	54,648		56,291
Earnings per common share:
Basic	$	3.70	$	3.51
Diluted	3.67		3.48

Diluted earnings per share above is based upon the weighted average number of shares as determined for basic earnings per share plus shares potentially issuable in conjunction with stock options, restricted share units and performance share units.

For the three and six months ended both June 30, 2012 and 2011, no options to purchase common stock were excluded from the computation of potentially dilutive securities.

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Retirement and Postretirement Benefits

6 Months Ended

Jun. 30, 2012

Compensation and Retirement Disclosure [Abstract]

Retirement and Postretirement Benefits

Retirement and Postretirement Benefits

Components of the net periodic cost for retirement and postretirement benefits for the three months ended June 30, 2012 and 2011 were as follows:

	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						Postretirement Medical Benefits
(Amounts in millions)	2012			2011			2012			2011			2012			2011
Service cost	$	5.4		$	4.6		$	1.2		$	1.3		$	—		$	—
Interest cost	4.0			4.3			3.3			3.3			0.4			0.5
Expected return on plan assets	(5.2		)	(5.4		)	(2.1		)	(2.0		)	—			—
Amortization of prior service benefit	(0.3		)	(0.3		)	—			—			—			(0.4		)
Amortization of unrecognized net loss (gain)	3.0			2.7			1.0			0.5			(0.3		)	(0.3		)
Net periodic cost (benefit) recognized	$	6.9		$	5.9		$	3.4		$	3.1		$	0.1		$	(0.2	)

Components of the net periodic cost for retirement and postretirement benefits for the six months ended June 30, 2012 and 2011 were as follows:

	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						Postretirement Medical Benefits
(Amounts in millions)	2012			2011			2012			2011			2012			2011
Service cost	$	10.6		$	9.9		$	2.3		$	2.5		$	—		$	—
Interest cost	8.2			8.6			6.7			6.6			0.7			0.9
Expected return on plan assets	(10.6		)	(10.9		)	(4.2		)	(4.0		)	—			—
Amortization of prior service benefit	(0.6		)	(0.6		)	—			—			—			(0.8		)
Amortization of unrecognized net loss (gain)	6.1			5.4			2.0			1.0			(0.8		)	(0.7		)
Net periodic cost (benefit) recognized	$	13.7		$	12.4		$	6.8		$	6.1		$	(0.1	)	$	(0.6	)

After consideration of our intent to maintain fully funded status, we currently anticipate our contribution to our U.S. pension plan in 2012 will be between approximately $10 million and $20 million, excluding direct benefits paid. See additional discussion of our retirement and postretirement benefits in Note 12 to our consolidated financial statements included in our 2011 Annual Report.

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Derivative Instruments and Hedges (Fair Value of Forward Exchange Contracts Not Designated as Heding Instruments) (Details) (Nondesignated [Member], Forward Exchange Contracts [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Nondesignated [Member] | Forward Exchange Contracts [Member]
Derivative [Line Items]
(Loss) gain recognized in income	$ (4,522)	$ 4,528	$ (5,641)	$ 10,103

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Stock-Based Compensation Plans (Tables)

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Information Regarding Restricted Shares

The following table summarizes information regarding Restricted Shares:

	Six Months Ended June 30, 2012
	Shares		Weighted Average Grant-Date Fair Value
Number of unvested shares:
Outstanding - January 1, 2012	1,052,199		$	84.62
Granted	294,093		114.03
Vested	(575,023	)	62.97
Cancelled	(28,264	)	114.97
Outstanding - June 30, 2012	743,005		$	111.86

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Calculation of Net Earnings Per Common Share and Weighted Average Common Share Outstanding

	Three Months Ended June 30,
(Amounts in thousands, except per share data)	2012		2011
Net earnings of Flowserve Corporation	$	107,316	$	98,732
Dividends on restricted shares not expected to vest	4		4
Earnings attributable to common and participating shareholders	$	107,320	$	98,736
Weighted average shares:
Common stock	53,740		55,483
Participating securities	255		264
Denominator for basic earnings per common share	53,995		55,747
Effect of potentially dilutive securities	271		495
Denominator for diluted earnings per common share	54,266		56,242
Earnings per common share:
Basic	$	1.99	$	1.77
Diluted	1.98		1.76

	Six Months Ended June 30,
(Amounts in thousands, except per share data)	2012		2011
Net earnings of Flowserve Corporation	$	200,441	$	195,715
Dividends on restricted shares not expected to vest	7		7
Earnings attributable to common and participating shareholders	$	200,448	$	195,722
Weighted average shares:
Common stock	53,972		55,420
Participating securities	261		281
Denominator for basic earnings per common share	54,233		55,701
Effect of potentially dilutive securities	415		590
Denominator for diluted earnings per common share	54,648		56,291
Earnings per common share:
Basic	$	3.70	$	3.51
Diluted	3.67		3.48

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Calculation of net earnings per common share and weighted average common share outstanding
Net earnings of Flowserve Corporation	$ 107,316	$ 98,732	$ 200,441	$ 195,715
Dividends on restricted shares not expected to vest	4	4	7	7
Earnings attributable to common and participating shareholders	$ 107,320	$ 98,736	$ 200,448	$ 195,722
Weighted average shares:
Common stock	53,740,000	55,483,000	53,972,000	55,420,000
Participating securities	255,000	264,000	261,000	281,000
Denominator for basic earnings per common share	53,995,000	55,747,000	54,233,000	55,701,000
Effect of potentially dilutive securities	271,000	495,000	415,000	590,000
Denominator for diluted earnings per common share	54,266,000	56,242,000	54,648,000	56,291,000
Earnings per common share:
Basic	$ 1.99	$ 1.77	$ 3.70	$ 3.51
Diluted	$ 1.98	$ 1.76	$ 3.67	$ 3.48
Options to purchase common stock excluded from computation of dilutive securities	0	0	0	0

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows - Operating activities:
Net earnings, including noncontrolling interests	$ 202,027	$ 195,720
Adjustments to reconcile net earnings to net cash used by operating activities:
Depreciation	44,340	44,373
Amortization of intangible and other assets	10,172	8,299
Net gain on disposition of assets	(10,549)	(595)
Excess tax benefits from stock-based compensation arrangements	(10,946)	(5,021)
Stock-based compensation	15,425	16,271
Net earnings from affiliates, net of dividends received	(4,723)	1,623
Change in assets and liabilities:
Accounts receivable, net	(13,317)	(121,537)
Inventories, net	(155,739)	(161,296)
Prepaid Expense and Other Assets	(16,617)	(32,670)
Other assets, net	(7,219)	(6,091)
Accounts payable	(46,763)	(114,811)
Accrued liabilities and income taxes payable	49,908	(75,279)
Retirement obligations and other liabilities	5,140	11,000
Net deferred taxes	(764)	2,219
Net cash flows provided (used) by operating activities	60,375	(237,795)
Cash flows - Investing activities:
Capital expenditures	(56,885)	(48,498)
Proceeds from disposal of assets	7,902	3,735
Payments for acquisitions, net of cash acquired	(3,996)	(890)
Affiliate investing activity	(1,620)	0
Net cash flows used by investing activities	(54,599)	(45,653)
Cash flows - Financing activities:
Excess tax benefits from stock-based compensation arrangements	10,946	5,021
Payments on long-term debt	(12,500)	(12,500)
Proceeds from short-term financing, net	300,000	0
Borrowings under other financing arrangements	4,826	4,348
Repurchase of common shares	(432,898)	(26,025)
Payments of dividends	(37,082)	(33,977)
Proceeds from stock option activity	(460)	224
Net cash flows used by financing activities	(167,168)	(62,909)
Effect of exchange rate changes on cash	(751)	10,090
Net change in cash and cash equivalents	(162,143)	(336,267)
Cash and cash equivalents at beginning of period	337,356	557,579
Cash and cash equivalents at end of period	$ 175,213	$ 221,312

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Debt

6 Months Ended

Jun. 30, 2012

Debt Disclosure [Abstract]

Debt

Debt

Debt, including capital lease obligations, consisted of:

	June 30,		December 31,
(Amounts in thousands, except percentages)	2012		2011
Term Loan, interest rate of 2.46% and 2.58% at June 30, 2012 and December 31, 2011, respectively	$	462,500	$	475,000
Bridge Loan, interest rate of 2.24% at June 30, 2012	250,000		—
Revolving credit facility, interest rate of 2.24% at June 30, 2012	50,000		—
Capital lease obligations and other borrowings	34,275		30,216
Debt and capital lease obligations	796,775		505,216
Less amounts due within one year	370,635		53,623
Total debt due after one year	$	426,140	$	451,593

Credit Facilities

As described more fully in Note 11 to our consolidated financial statements included in our 2011 Annual Report, on December 14, 2010, we entered into a credit agreement ("Credit Agreement") with Bank of America, N.A., as swingline lender, letter of credit issuer and administrative agent, and the other lenders party thereto. The Credit Agreement provides for a $500.0 million term loan facility with a maturity date of December 14, 2015 and a $500.0 million revolving credit facility with a maturity date of December 14, 2015 (collectively referred to as the "Credit Facilities"). As of June 30, 2012, we had $50.0 million outstanding under the revolving credit facility. The revolving credit facility includes a $300.0 million sublimit for the issuance of letters of credit. Subject to certain conditions, we have the right to increase the amount of the revolving credit facility by an aggregate amount not to exceed $200.0 million. We had outstanding letters of credit of $155.4 million and $147.4 million at June 30, 2012 and December 31, 2011, respectively, and when included with the outstanding revolving credit facility balance, reduced our borrowing capacity to $294.6 million and $352.6 million, respectively.

We may prepay loans under our Credit Facilities in whole or in part, without premium or penalty, at any time. During the three and six months ended June 30, 2012, we made scheduled repayments under our Credit Facilities of $6.3 million and $12.5 million, respectively. We have scheduled repayments of $56.3 million due in the third quarter of 2012, $6.3 million in the fourth quarter of 2012 and $12.5 million due in both the first and second quarters of 2013 on our Credit Facilities. Our Credit Facilities bear a floating rate of interest and we have entered into $325.0 million of notional amount of interest rate swaps at June 30, 2012 to hedge exposure to floating interest rates.

Bridge Loan –On June 15, 2012 (the “Closing Date”), we entered into a loan agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto (together, the “Lenders”), providing for a term loan with an aggregate commitment of $250.0 million for a term of 364 days (the “Bridge Loan”). The proceeds from the Bridge Loan were used to fund our share repurchase program described in Note 12 to our condensed consolidated financial statements included in this Quarterly Report.

The initial interest rate per annum applicable to the Bridge Loan is either LIBOR plus 2.50%, 2.25%, 2.00% or 1.75%, as applicable, depending on the consolidated leverage ratio, or, at our option, the Base Rate (defined as a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus 0.5% or (c) the Eurodollar Rate for a one month Interest Period on such day plus 1%). The applicable interest rate will increase by 50 basis points incrementally during the term of the Bridge Loan on each of the 90-day, 180-day and 270-day anniversaries of the Closing Date. Additionally, a duration fee will be payable on the loan amount as follows: 0.125% on October 15, 2012; 0.25% on December 15, 2012; and 0.5% on March 15, 2013.

The Bridge Loan includes customary representations and warranties, affirmative and negative covenants, and events of default, including maintenance of interest coverage and consolidated leverage ratios, all of which are consistent in all material respects with our existing Credit Facilities. The obligations under the Bridge Loan are guaranteed by certain of our domestic subsidiaries.

European Letter of Credit Facilities – On October 30, 2009, we entered into a 364-day unsecured European Letter of Credit Facility ("European LOC Facility") with an initial commitment of €125.0 million. The European LOC Facility is renewable annually and is used for contingent obligations in respect of surety and performance bonds, bank guarantees and similar obligations with maturities up to five years. We renewed the European LOC Facility in October 2011 consistent with its initial terms for an additional 364-day period. We had outstanding letters of credit drawn on the European LOC Facility of €74.4 million ($94.2 million) and €81.0 million ($105.0 million) as of June 30, 2012 and December 31, 2011, respectively.

Our ability to issue additional letters of credit under our previous European Letter of Credit Facility ("Old European LOC Facility"), which had a commitment of €110.0 million, expired November 9, 2009. We had outstanding letters of credit written against the Old European LOC Facility of €5.8 million ($7.3 million) and €12.2 million ($15.8 million) as of June 30, 2012 and December 31, 2011, respectively.

Certain banks are parties to both facilities and are managing their exposures on an aggregated basis. As such, the commitment under the European LOC Facility is reduced by the face amount of existing letters of credit written against the Old European LOC Facility prior to its expiration. After consideration of outstanding commitments under both facilities, the available capacity under the European LOC Facility was €121.0 million ($153.2 million) as of June 30, 2012, of which €74.4 million ($94.2 million) has been utilized.

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Retirement and Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2012

Compensation and Retirement Disclosure [Abstract]

Components of the Net Periodic Cost for Retirement and Postretirement Benefits

Components of the net periodic cost for retirement and postretirement benefits for the three months ended June 30, 2012 and 2011 were as follows:

	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						Postretirement Medical Benefits
(Amounts in millions)	2012			2011			2012			2011			2012			2011
Service cost	$	5.4		$	4.6		$	1.2		$	1.3		$	—		$	—
Interest cost	4.0			4.3			3.3			3.3			0.4			0.5
Expected return on plan assets	(5.2		)	(5.4		)	(2.1		)	(2.0		)	—			—
Amortization of prior service benefit	(0.3		)	(0.3		)	—			—			—			(0.4		)
Amortization of unrecognized net loss (gain)	3.0			2.7			1.0			0.5			(0.3		)	(0.3		)
Net periodic cost (benefit) recognized	$	6.9		$	5.9		$	3.4		$	3.1		$	0.1		$	(0.2	)

Components of the net periodic cost for retirement and postretirement benefits for the six months ended June 30, 2012 and 2011 were as follows:

	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						Postretirement Medical Benefits
(Amounts in millions)	2012			2011			2012			2011			2012			2011
Service cost	$	10.6		$	9.9		$	2.3		$	2.5		$	—		$	—
Interest cost	8.2			8.6			6.7			6.6			0.7			0.9
Expected return on plan assets	(10.6		)	(10.9		)	(4.2		)	(4.0		)	—			—
Amortization of prior service benefit	(0.6		)	(0.6		)	—			—			—			(0.8		)
Amortization of unrecognized net loss (gain)	6.1			5.4			2.0			1.0			(0.8		)	(0.7		)
Net periodic cost (benefit) recognized	$	13.7		$	12.4		$	6.8		$	6.1		$	(0.1	)	$	(0.6	)

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Debt (Details Textual)	3 Months Ended	6 Months Ended				6 Months Ended																	3 Months Ended					3 Months Ended
	Jun. 30, 2012 USD ($)	Jun. 30, 2012 USD ($)	Jun. 30, 2011 USD ($)	Jun. 15, 2012 USD ($)	Dec. 31, 2011 USD ($)	Jun. 30, 2012 Bridge Loan [Member]	Jun. 15, 2012 Bridge Loan [Member] USD ($)	Dec. 31, 2011 Bridge Loan [Member]	Jun. 30, 2012 Term Loan [Member] USD ($)	Dec. 31, 2011 Term Loan [Member]	Jun. 30, 2012 Letter of Credit [Member] USD ($)	Dec. 31, 2011 Letter of Credit [Member] USD ($)	Jun. 30, 2012 New European Letter of Credit Facilities [Member] USD ($)	Jun. 30, 2012 New European Letter of Credit Facilities [Member] EUR (€)	Dec. 31, 2011 New European Letter of Credit Facilities [Member] USD ($)	Dec. 31, 2011 New European Letter of Credit Facilities [Member] EUR (€)	Oct. 30, 2009 New European Letter of Credit Facilities [Member] EUR (€)	Jun. 30, 2012 Old European Letter of Credit Facilities [Member] USD ($)	Jun. 30, 2012 Old European Letter of Credit Facilities [Member] EUR (€)	Dec. 31, 2011 Old European Letter of Credit Facilities [Member] USD ($)	Dec. 31, 2011 Old European Letter of Credit Facilities [Member] EUR (€)	Nov. 09, 2009 Old European Letter of Credit Facilities [Member] EUR (€)	Jun. 30, 2012 LIBOR [Member] Bridge Loan [Member]	Jun. 30, 2012 LIBOR [Member] Case 1 [Member] Bridge Loan [Member]	Jun. 30, 2012 LIBOR [Member] Case 2 [Member] Bridge Loan [Member]	Jun. 30, 2012 LIBOR [Member] Case 3 [Member] Bridge Loan [Member]	Jun. 30, 2012 LIBOR [Member] Case 4 [Member] Bridge Loan [Member]	Jun. 30, 2012 Prime Rate [Member] Bridge Loan [Member]	Jun. 30, 2012 Federal Funds Rate [Member] Bridge Loan [Member]	Jun. 30, 2012 Eurodollar Rate [Member] Bridge Loan [Member]
Debt Instrument [Line Items]
Term loan Face amount									$ 500,000,000
Credit facilities maximum borrowing capacity	500,000,000	500,000,000									300,000,000						125,000,000					110,000,000
Maturity period of unsecured letter of credit facility																	364 days
The maximum aggregate amount of revolving credit facility to be increased		200,000,000
Credit facilities amount outstanding	50,000,000	50,000,000			0						155,400,000	147,400,000	94,200,000	74,400,000	105,000,000	81,000,000		7,300,000	5,800,000	15,800,000	12,200,000
Credit facilities current borrowing capacity	294,600,000	294,600,000			352,600,000
Interest rate (as a percent)						2.24%		0.00%	2.46%	2.58%
Line of Credit Facility, Interest Rate at Period End	2.24%	2.24%			0.00%
Credit facility, notional amount of interest rate swaps	325,000,000	325,000,000			330,000,000
Bridge Loan	250,000,000	250,000,000		250,000,000	0		250,000,000
Maturity Period of Bridge Loan							364 days
Debt Instrument, Description of Variable Rate Basis																							LIBOR					Prime Rate	Federal Funds Rate	Eurodollar Rate
Debt Instrument, Basis Spread on Variable Rate																								2.50%	2.25%	2.00%	1.75%		0.50%	1.00%
Debt Instrument, Interest Rate Increase						50
Duration Fee 120 days after closing date						0.125%
Duration Fee 180 days after closing date						0.25%
Duration Fee 270 days after closing date						0.50%
Repayment of credit facility	6,300,000	12,500,000	12,500,000
Credit Facilities, scheduled repayments due in next quarter	56,300,000	56,300,000
Credit Facilities Scheduled Repayments due in fourth quarter 2012	6,300,000	6,300,000
Credit Facilities, scheduled repayments due in first and second quarter of 2013	12,500,000	12,500,000
Maturity period of surety and performance bonds bank guarantees and similar obligations in respect of new letter of credit facility is used		5 years
Maturity period of credit facilities	1 year	1 year
Credit facilities remaining borrowing capacity													$ 153,200,000	€ 121,000,000

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Basis of Presentation and Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Fair Value Measurement

In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs," which clarifies the requirements in accounting principles generally accepted in the United States ("U.S. GAAP") for measuring fair value and for disclosing information about fair value measurements in order to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and International Financial Reporting Standards ("IFRSs"). The amendments do not result in a major change in the application of the requirements in Topic 820, but clarify the application of existing fair value measurement requirements and change particular principles or requirements for measuring fair value and for disclosing information about fair value measurements. Our adoption of ASU No. 2011-04, effective January 1, 2012, had no impact on our consolidated financial condition and results of operations.

Our financial instruments are presented at fair value or approximate fair value in our condensed consolidated balance sheets. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models may be applied. Assets and liabilities recorded at fair value in our condensed consolidated balance sheets are categorized by hierarchical levels based upon the level of judgment associated with the inputs used to measure their fair values. Recurring fair value measurements are limited to investments in derivative instruments and certain equity securities. The fair value measurements of our derivative instruments are determined using models that maximize the use of the observable market inputs including interest rate curves and both forward and spot prices for currencies, and are classified as Level II under the fair value hierarchy. The fair values of our derivatives are included above in Note 4. The fair value measurements of our investments in equity securities are determined using quoted market prices. The fair values of our investments in equity securities, and changes thereto, are immaterial to our consolidated financial position and results of operations. The fair value of our debt was estimated using interest rates on similar debt recently issued by companies with credit metrics similar to ours and is classified as Level II under the fair value hierarchy. The carrying value of our debt is included above in Note 5 and approximates fair value.

Comprehensive Income

In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (Accounting Standards Codification ("ASC") 220): Presentation of Comprehensive Income," which specifies that an entity has the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This amendment also requires an entity to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income. In December 2011, the FASB issued ASU No. 2011-12, "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05," to defer the requirement to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income. Our adoption of ASU Nos. 2011-05 and 2011-12, effective January 1, 2012, had no impact on our consolidated financial condition and results of operations.

Intangibles - Goodwill and Other

In September 2011, the FASB issued ASU No. 2011-08, "Intangibles - Goodwill and Other (ASC 350): Testing Goodwill for Impairment," which specifies that an entity has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. Our adoption of ASU No. 2011-08, effective January 1, 2012, had no impact on our consolidated financial condition and results of operations.