
	Supplemental Guarantor Financial Information

On September 11, 2012, we completed a public offering of Senior Notes that are fully and unconditionally and jointly and severally guaranteed by certain of our 100% owned domestic subsidiaries. The following condensed consolidating financial statements present the financial position, results of operations and cash flows of Flowserve Corporation (referred to as “Parent” for the purpose of this note only) on a Parent−only (Issuer) basis, the combined guarantor subsidiaries on a guarantor−only basis, the combined non-guarantor subsidiaries on a non-guarantor-only basis and elimination adjustments necessary to arrive at the information for the Parent, guarantor subsidiaries and non-guarantor subsidiaries on a condensed consolidated basis. Investments in subsidiaries have been accounted for using the equity method for this presentation.

FLOWSERVE CORPORATION

CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME



	Three Months Ended September 30, 2013
	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Total
(Amounts in thousands)
Sales	$	—		$	483,039		$	842,426		$	(96,408	)	$	1,229,057
Cost of sales	—			(311,255		)	(591,471		)	96,408			(806,318		)
Gross profit	—			171,784			250,955			—			422,739
Selling, general and administrative expense	(457		)	(114,511		)	(116,601		)	—			(231,569		)
Net earnings from affiliates	—			565			1,653			—			2,218
Net earnings from consolidated subsidiaries, net of tax	131,425			93,959			—			(225,384		)	—
Operating income	130,968			151,797			136,007			(225,384		)	193,388
Interest expense, net	(7,253		)	(3,026		)	(2,442		)	—			(12,721		)
Other (expense) income, net	—			(1,822		)	3,555			—			1,733
Earnings before income taxes	123,715			146,949			137,120			(225,384		)	182,400
Provision for income taxes	2,556			(15,524		)	(42,902		)	—			(55,870		)
Net earnings, including noncontrolling interests	126,271			131,425			94,218			(225,384		)	126,530
Less: Net earnings attributable to noncontrolling interests	—			—			(259		)	—			(259		)
Net earnings attributable to Flowserve Corporation	$	126,271		$	131,425		$	93,959		$	(225,384	)	$	126,271
Comprehensive income attributable to Flowserve Corporation	$	164,861		$	169,865		$	129,539		$	(299,404	)	$	164,861



	Three Months Ended September 30, 2012
	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Total
(Amounts in thousands)
Sales	$	—		$	444,206		$	807,668		$	(85,951	)	$	1,165,923
Cost of sales	—			(290,892		)	(571,378		)	85,951			(776,319		)
Gross profit	—			153,314			236,290			—			389,604
Selling, general and administrative expense	325			(95,054		)	(133,068		)	—			(227,797		)
Net earnings from affiliates	—			1,199			2,700			—			3,899
Net earnings from consolidated subsidiaries, net of tax	109,165			60,848			—			(170,013		)	—
Operating income	109,490			120,307			105,922			(170,013		)	165,706
Interest expense, net	(4,428		)	(4,958		)	(2,550		)	—			(11,936		)
Other expense, net	—			(1,176		)	(7,991		)	—			(9,167		)
Earnings before income taxes	105,062			114,173			95,381			(170,013		)	144,603
Provision for income taxes	1,234			(5,008		)	(33,995		)	—			(37,769		)
Net earnings, including noncontrolling interests	106,296			109,165			61,386			(170,013		)	106,834
Less: Net earnings attributable to noncontrolling interests	—			—			(538		)	—			(538		)
Net earnings attributable to Flowserve Corporation	$	106,296		$	109,165		$	60,848		$	(170,013	)	$	106,296
Comprehensive income attributable to Flowserve Corporation	$	138,170		$	140,824		$	90,871		$	(231,695	)	$	138,170



	Nine Months Ended September 30, 2013
	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Total
(Amounts in thousands)
Sales	$	—		$	1,423,260		$	2,415,936		$	(274,017	)	$	3,565,179
Cost of sales	—			(921,473		)	(1,700,099		)	274,017			(2,347,555		)
Gross profit	—			501,787			715,837			—			1,217,624
Selling, general and administrative expense	(2,520		)	(277,228		)	(426,530		)	—			(706,278		)
Net earnings from affiliates	—			966			35,077			—			36,043
Net earnings from consolidated subsidiaries, net of tax	360,756			219,391			—			(580,147		)	—
Operating income	358,236			444,916			324,384			(580,147		)	547,389
Interest expense, net	(20,987		)	(8,785		)	(7,613		)	—			(37,385		)
Other expense, net	—			(5,203		)	(3,476		)	—			(8,679		)
Earnings before income taxes	337,249			430,928			313,295			(580,147		)	501,325
Provision for income taxes	7,200			(70,172		)	(92,026		)	—			(154,998		)
Net earnings, including noncontrolling interests	344,449			360,756			221,269			(580,147		)	346,327
Less: Net earnings attributable to noncontrolling interests	—			—			(1,878		)	—			(1,878		)
Net earnings attributable to Flowserve Corporation	$	344,449		$	360,756		$	219,391		$	(580,147	)	$	344,449
Comprehensive income attributable to Flowserve Corporation	$	325,981		$	341,344		$	196,768		$	(538,112	)	$	325,981



	Nine Months Ended September 30, 2012
	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Total
(Amounts in thousands)
Sales	$	—		$	1,337,117		$	2,343,241		$	(257,230	)	$	3,423,128
Cost of sales	—			(880,848		)	(1,666,121		)	257,230			(2,289,739		)
Gross profit	—			456,269			677,120			—			1,133,389
Selling, general and administrative expense	(2,655		)	(290,428		)	(380,495		)	—			(673,578		)
Net earnings from affiliates	—			3,154			10,060			—			13,214
Net earnings from consolidated subsidiaries, net of tax	312,681			195,451			—			(508,132		)	—
Operating income	310,026			364,446			306,685			(508,132		)	473,025
Interest expense, net	(5,776		)	(14,334		)	(9,039		)	—			(29,149		)
Other income (expense), net	—			673			(22,824		)	—			(22,151		)
Earnings before income taxes	304,250			350,785			274,822			(508,132		)	421,725
Provision for income taxes	2,487			(38,104		)	(77,247		)	—			(112,864		)
Net earnings, including noncontrolling interests	306,737			312,681			197,575			(508,132		)	308,861
Less: Net earnings attributable to noncontrolling interests	—			—			(2,124		)	—			(2,124		)
Net earnings attributable to Flowserve Corporation	$	306,737		$	312,681		$	195,451		$	(508,132	)	$	306,737
Comprehensive income attributable to Flowserve Corporation	$	317,407		$	323,427		$	202,268		$	(525,695	)	$	317,407

FLOWSERVE CORPORATION

CONDENSED CONSOLIDATING BALANCE SHEETS



	September 30, 2013
	Parent (Issuer)		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated Total
(Amounts in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	1,386	$	—	$	112,365	$	—		$	113,751
Accounts receivable, net	—		238,870		850,878		—			1,089,748
Intercompany receivables	6,705		146,233		51,796		(204,734		)	—
Inventories, net	—		405,711		778,477		—			1,184,188
Other current assets, net	1,701		123,259		114,004		—			238,964
Total current assets	9,792		914,073		1,907,520		(204,734		)	2,626,651
Property, plant and equipment, net	—		203,338		475,596		—			678,934
Goodwill	—		671,858		386,944		—			1,058,802
Intercompany receivables	462,500		9,503		202,495		(674,498		)	—
Investment in consolidated subsidiaries	2,409,231		1,736,471		—		(4,145,702		)	—
Other assets, net	12,603		178,996		140,208		—			331,807
Total assets	$	2,894,126	$	3,714,239	$	3,112,763	$	(5,024,934	)	$	4,696,194

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	—	$	143,513	$	351,782	$	—		$	495,295
Intercompany payables	69		58,432		146,233		(204,734		)	—
Accrued liabilities	6,999		229,263		586,152		—			822,414
Debt due within one year	236,000		10		32,924		—			268,934
Deferred taxes	—		—		7,606		—			7,606
Total current liabilities	243,068		431,218		1,124,697		(204,734		)	1,594,249
Long-term debt due after one year	838,247		—		977		—			839,224
Intercompany payables	1,144		663,850		9,504		(674,498		)	—
Retirement obligations and other liabilities	7,010		209,940		235,304		—			452,254
Total liabilities	1,089,469		1,305,008		1,370,482		(879,232		)	2,885,727
Total Flowserve Corporation shareholders’ equity	1,804,657		2,409,231		1,736,471		(4,145,702		)	1,804,657
Noncontrolling interest	—		—		5,810		—			5,810
Total equity	1,804,657		2,409,231		1,742,281		(4,145,702		)	1,810,467
Total liabilities and equity	$	2,894,126	$	3,714,239	$	3,112,763	$	(5,024,934	)	$	4,696,194



	December 31, 2012
	Parent (Issuer)		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated Total
(Amounts in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	2,609	$	—	$	301,643	$	—		$	304,252
Accounts receivable, net	—		255,164		848,560		—			1,103,724
Intercompany receivables	—		157,447		42,836		(200,283		)	—
Inventories, net	—		382,360		704,303		—			1,086,663
Other current assets, net	1,967		123,152		120,458		—			245,577
Total current assets	4,576		918,123		2,017,800		(200,283		)	2,740,216
Property, plant and equipment, net	—		204,032		450,147		—			654,179
Goodwill	—		671,858		381,994		—			1,053,852
Intercompany receivables	462,500		10,363		85,316		(558,179		)	—
Investment in consolidated subsidiaries	2,321,597		1,604,462		—		(3,926,059		)	—
Other assets, net	14,879		175,771		172,061		—			362,711
Total assets	$	2,803,552	$	3,584,609	$	3,107,318	$	(4,684,521	)	$	4,810,958

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	—	$	158,028	$	458,872	$	—		$	616,900
Intercompany payables	35		42,801		157,447		(200,283		)	—
Accrued liabilities	11,610		314,162		580,821		—			906,593
Debt due within one year	25,000		5		34,473		—			59,478
Deferred taxes	—		—		7,654		—			7,654
Total current liabilities	36,645		514,996		1,239,267		(200,283		)	1,590,625
Long-term debt due after one year	868,124		20		972		—			869,116
Intercompany payables	1,144		546,672		10,363		(558,179		)	—
Retirement obligations and other liabilities	7,420		201,324		247,998		—			456,742
Total liabilities	913,333		1,263,012		1,498,600		(758,462		)	2,916,483
Total Flowserve Corporation shareholders’ equity	1,890,219		2,321,597		1,604,462		(3,926,059		)	1,890,219
Noncontrolling interest	—		—		4,256		—			4,256
Total equity	1,890,219		2,321,597		1,608,718		(3,926,059		)	1,894,475
Total liabilities and equity	$	2,803,552	$	3,584,609	$	3,107,318	$	(4,684,521	)	$	4,810,958

FLOWSERVE CORPORATION

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



	Nine Months Ended September 30, 2013
	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Total
(Amounts in thousands)
Net cash flows provided (used) by operating activities	$	245,150		$	138,849		$	(26,091	)	$	(249,020	)	$	108,888
Cash flows — Investing activities:
Capital expenditures	—			(27,827		)	(66,875		)	—			(94,702		)
Payments for acquisitions, net of cash acquired	—			—			(10,143		)	—			(10,143		)
Intercompany loan proceeds	—			911			56,333			(57,244		)	—
Intercompany loan payments	—			(52		)	(173,511		)	173,563			—
Proceeds from disposition of assets	—			93			876			—			969
Affiliate investment activity, net	—			—			46,240			—			46,240
Net cash flows used by investing activities	—			(26,875		)	(147,080		)	116,319			(57,636		)
Cash flows — Financing activities:
Excess tax benefits from stock-based payment arrangements	—			8,265			1,839			—			10,104
Payments on long-term debt	(15,000		)	—			—			—			(15,000		)
Short-term financing, net	196,000			—			—			—			196,000
Borrowings under other financing arrangements, net	—			(15		)	(556		)	—			(571		)
Repurchases of common shares	(370,127		)	—			—			—			(370,127		)
Payments of dividends	(57,337		)	—			—			—			(57,337		)
Intercompany loan proceeds	—			173,511			52			(173,563		)	—
Intercompany loan payments	—			(56,333		)	(911		)	57,244			—
Intercompany dividends	—			(237,402		)	(11,618		)	249,020			—
All other financing, net	91			—			(169		)	—			(78		)
Net cash flows used by financing activities	(246,373		)	(111,974		)	(11,363		)	132,701			(237,009		)
Effect of exchange rate changes on cash	—			—			(4,744		)	—			(4,744		)
Net change in cash and cash equivalents	(1,223		)	—			(189,278		)	—			(190,501		)
Cash and cash equivalents at beginning of period	2,609			—			301,643			—			304,252
Cash and cash equivalents at end of period	$	1,386		$	—		$	112,365		$	—		$	113,751



	Nine Months Ended September 30, 2012
	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Total
(Amounts in thousands)
Net cash flows provided by operating activities	$	49,256		$	74,283		$	50,767		$	(51,742	)	$	122,564
Cash flows — Investing activities:
Capital expenditures	—			(25,366		)	(58,814		)	—			(84,180		)
Payments for acquisitions, net of cash acquired	—			—			(3,996		)	—			(3,996		)
Intercompany loan proceeds	—			7,869			—			(7,869		)	—
Intercompany loan payments	—			(26,648		)	—			26,648			—
Intercompany return of capital	—			1,982			—			(1,982		)	—
Intercompany capital contribution	—			(483		)	—			483			—
Proceeds from disposition of assets	—			87			11,386			—			11,473
Affiliate investment activity, net	—			—			(3,825		)	—			(3,825		)
Net cash flows used by investing activities	—			(42,559		)	(55,249		)	17,280			(80,528		)
Cash flows — Financing activities:
Excess tax benefits from stock-based payment arrangements	—			8,837			2,219			—			11,056
Payments on long-term debt	(475,000		)	—			—			—			(475,000		)
Proceeds from issuance of senior notes	498,075			—			—			—			498,075
Proceeds from issuance of long-term debt	400,000			—			—			—			400,000
Borrowings under other financing arrangements, net	9			171			114			—			294
Repurchases of common shares	(533,864		)	—			—			—			(533,864		)
Payments of dividends	(55,569		)	—			—			—			(55,569		)
Payment of deferred loan costs	(9,657		)	—			—			—			(9,657		)
Intercompany loan proceeds	—			—			26,648			(26,648		)	—
Intercompany loan payments	—			—			(7,869		)	7,869			—
Intercompany distributions of capital	—			—			(1,982		)	1,982			—
Intercompany capital contribution	—			—			483			(483		)	—
Intercompany dividends	—			(40,732		)	(11,010		)	51,742			—
All other financing, net	250			—			(498		)	—			(248		)
Net cash flows (used) provided by financing activities	(175,756		)	(31,724		)	8,105			34,462			(164,913		)
Effect of exchange rate changes on cash	—			—			2,941			—			2,941
Net change in cash and cash equivalents	(126,500		)	—			6,564			—			(119,936		)
Cash and cash equivalents at beginning of period	150,308			—			187,048			—			337,356
Cash and cash equivalents at end of period	$	23,808		$	—		$	193,612		$	—		$	217,420