
	SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

On September 11, 2012 and November 1, 2013, we completed public offerings 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.

CONDENSED CONSOLIDATING BALANCE SHEETS



	December 31, 2013
	Parent (Issuer)		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated Total
(Amounts in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	29,086	$	—	$	334,718	$	—		$	363,804
Accounts receivable, net	—		263,594		891,733		—			1,155,327
Intercompany receivables	—		155,422		74,089		(229,511		)	—
Inventories, net	—		371,172		689,498		—			1,060,670
Other current assets	1,879		144,551		121,151		—			267,581
Total current assets	30,965		934,739		2,111,189		(229,511		)	2,847,382
Property, plant and equipment, net	—		220,072		496,217		—			716,289
Goodwill	—		715,722		391,829		—			1,107,551
Intercompany receivables	432,500		9,520		186,789		(628,809		)	—
Investment in consolidated subsidiaries	2,579,701		1,850,998		—		(4,430,699		)	—
Other assets, net	15,486		211,755		138,270		—			365,511
Total assets	$	3,058,652	$	3,942,806	$	3,324,294	$	(5,289,019	)	$	5,036,733

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	—	$	163,254	$	448,838	$	—		$	612,092
Intercompany payables	81		74,008		155,422		(229,511		)	—
Accrued liabilities	12,874		293,012		555,124		—			861,010
Debt due within one year	40,000		5		32,673		—			72,678
Deferred taxes	—		—		12,319		—			12,319
Total current liabilities	52,955		530,279		1,204,376		(229,511		)	1,558,099
Long-term debt due after one year	1,126,904		—		715		—			1,127,619
Intercompany payables	1,144		618,145		9,520		(628,809		)	—
Retirement obligations and other liabilities	7,270		214,681		251,943		—			473,894
Total liabilities	1,188,273		1,363,105		1,466,554		(858,320		)	3,159,612
Total Flowserve Corporation shareholders’ equity	1,870,379		2,579,701		1,850,998		(4,430,699		)	1,870,379
Noncontrolling interests	—		—		6,742		—			6,742
Total equity	1,870,379		2,579,701		1,857,740		(4,430,699		)	1,877,121
Total liabilities and equity	$	3,058,652	$	3,942,806	$	3,324,294	$	(5,289,019	)	$	5,036,733



	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 interests	—		—		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

CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME



	Year Ended December 31, 2013
	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Total
(Amounts in thousands)
Sales	$	—		$	1,952,235		$	3,388,258		$	(385,874	)	$	4,954,619
Cost of sales	—			(1,281,035		)	(2,371,363		)	385,874			(3,266,524		)
Gross profit	—			671,200			1,016,895			—			1,688,095
Selling, general and administrative expense	(3,079		)	(400,609		)	(563,141		)	—			(966,829		)
Net earnings from affiliates	—			1,175			37,842			—			39,017
Net earnings from consolidated subsidiaries, net of tax	505,764			345,465			—			(851,229		)	—
Operating income	502,685			617,231			491,596			(851,229		)	760,283
Interest expense, net	(29,729		)	(11,685		)	(11,568		)	—			(52,982		)
Other expense, net	—			(767		)	(13,513		)	—			(14,280		)
Earnings before income taxes	472,956			604,779			466,515			(851,229		)	693,021
Provision for income taxes	12,574			(99,015		)	(118,260		)	—			(204,701		)
Net earnings, including noncontrolling interests	485,530			505,764			348,255			(851,229		)	488,320
Less: Net earnings attributable to noncontrolling interests	—			—			(2,790		)	—			(2,790		)
Net earnings attributable to Flowserve Corporation	$	485,530		$	505,764		$	345,465		$	(851,229	)	$	485,530
Comprehensive income attributable to Flowserve Corporation	$	488,363		$	508,929		$	316,484		$	(825,413	)	$	488,363



	Year Ended December 31, 2012
	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Total
(Amounts in thousands)
Sales	$	—		$	1,833,613		$	3,272,519		$	(354,793	)	$	4,751,339
Cost of sales	—			(1,190,206		)	(2,334,975		)	354,793			(3,170,388		)
Gross profit	—			643,407			937,544			—			1,580,951
Selling, general and administrative expense	(3,571		)	(390,713		)	(527,841		)	—			(922,125		)
Net earnings from affiliates	—			3,855			13,097			—			16,952
Net earnings from consolidated subsidiaries, net of tax	456,740			309,223			—			(765,963		)	—
Operating income	453,169			565,772			422,800			(765,963		)	675,778
Interest expense, net	(9,881		)	(19,347		)	(13,338		)	—			(42,566		)
Other expense, net	—			(683		)	(20,964		)	—			(21,647		)
Earnings before income taxes	443,288			545,742			388,498			(765,963		)	611,565
Provision for income taxes	5,051			(89,002		)	(76,815		)	—			(160,766		)
Net earnings, including noncontrolling interests	448,339			456,740			311,683			(765,963		)	450,799
Less: Net earnings attributable to noncontrolling interests	—			—			(2,460		)	—			(2,460		)
Net earnings attributable to Flowserve Corporation	$	448,339		$	456,740		$	309,223		$	(765,963	)	$	448,339
Comprehensive income attributable to Flowserve Corporation	$	440,127		$	446,536		$	292,167		$	(738,703	)	$	440,127



	Year Ended December 31, 2011
	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Total
(Amounts in thousands)
Sales	$	—		$	1,735,809		$	3,120,802		$	(346,410	)	$	4,510,201
Cost of sales	—			(1,104,642		)	(2,238,323		)	346,410			(2,996,555		)
Gross profit	—			631,167			882,479			—			1,513,646
Selling, general and administrative expense	(7,236		)	(368,818		)	(538,026		)	—			(914,080		)
Net earnings from affiliates	—			3,819			15,292			—			19,111
Net earnings from consolidated subsidiaries, net of tax	434,436			272,111			—			(706,547		)	—
Operating income	427,200			538,279			359,745			(706,547		)	618,677
Interest expense, net	(1,088		)	(18,615		)	(14,897		)	—			(34,600		)
Other (expense) income, net	—			(2,858		)	6,536			—			3,678
Earnings before income taxes	426,112			516,806			351,384			(706,547		)	587,755
Provision for income taxes	2,470			(82,370		)	(78,624		)	—			(158,524		)
Net earnings, including noncontrolling interests	428,582			434,436			272,760			(706,547		)	429,231
Less: Net earnings attributable to noncontrolling interests	—			—			(649		)	—			(649		)
Net earnings attributable to Flowserve Corporation	$	428,582		$	434,436		$	272,111		$	(706,547	)	$	428,582
Comprehensive income attributable to Flowserve Corporation	$	362,991		$	369,193		$	216,653		$	(585,846	)	$	362,991

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



	Year Ended December 31, 2013
	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Total
(Amounts in thousands)
Net cash flows provided by operating activities	$	261,741		$	279,594		$	214,066		$	(267,642	)	$	487,759
Cash flows — Investing activities:
Capital expenditures	—			(44,380		)	(94,710		)	—			(139,090		)
Payments for acquisitions, net of cash acquired	—			(66,658		)	(10,143		)	—			(76,801		)
Intercompany loan proceeds	30,000			911			72,037			(102,948		)	—
Intercompany loan payments	—			(68		)	(173,510		)	173,578			—
Proceeds from disposal of assets	—			110			1,543			—			1,653
Proceeds from equity investments in affiliates	—			—			46,240			—			46,240
Net cash flows provided (used) by investing activities	30,000			(110,085		)	(158,543		)	70,630			(167,998		)
Cash flows — Financing activities:
Excess tax benefits from stock-based payment arrangements	—			8,266			1,845			—			10,111
Payments on long-term debt	(25,000		)	—			—			—			(25,000		)
Proceeds from issuance of senior notes	298,596			—			—			—			298,596
Borrowings under other financing arrangements, net	—			(20		)	(381		)	—			(401		)
Repurchases of common shares	(458,310		)	—			—			—			(458,310		)
Payments of dividends	(76,897		)	—			—			—			(76,897		)
Payments of deferred loan costs	(3,744		)	—			—			—			(3,744		)
Intercompany loan proceeds	—			173,510			68			(173,578		)	—
Intercompany loan payments	—			(102,037		)	(911		)	102,948			—
Intercompany dividends	—			(249,228		)	(18,414		)	267,642			—
All other financing, net	91			—			(270		)	—			(179		)
Net cash flows used by financing activities	(265,264		)	(169,509		)	(18,063		)	197,012			(255,824		)
Effect of exchange rate changes on cash	—			—			(4,385		)	—			(4,385		)
Net change in cash and cash equivalents	26,477			—			33,075			—			59,552
Cash and cash equivalents at beginning of year	2,609			—			301,643			—			304,252
Cash and cash equivalents at end of year	$	29,086		$	—		$	334,718		$	—		$	363,804



	Year Ended December 31, 2012
	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Total
(Amounts in thousands)
Net cash flows provided by operating activities	$	277,076		$	193,819		$	298,616		$	(252,381	)	$	517,130
Cash flows — Investing activities:
Capital expenditures	—			(43,600		)	(91,939		)	—			(135,539		)
Payments for acquisitions, net of cash acquired	—			—			(3,996		)	—			(3,996		)
Intercompany loan proceeds	12,499			32,705			54,746			(99,950		)	—
Intercompany loan payments	—			(28,372		)	(138,918		)	167,290			—
Intercompany capital contribution	—			(483		)	—			483			—
Proceeds from disposal of assets	—			2,268			14,665			—			16,933
Affiliate investment activity, net	—			—			(3,825		)	—			(3,825		)
Net cash flows provided (used) by investing activities	12,499			(37,482		)	(169,267		)	67,823			(126,427		)
Cash flows — Financing activities:
Excess tax benefits from stock-based payment arrangements	—			8,985			2,222			—			11,207
Payments on long-term debt	(480,000		)	—			—			—			(480,000		)
Proceeds from issuance of senior notes	498,075			—			—			—			498,075
Proceeds from issuance of long-term debt	400,000			—			—			—			400,000
Net borrowings (payments) under other financing arrangements	9			(20		)	5,818			—			5,807
Repurchases of common shares	(771,942		)	—			—			—			(771,942		)
Payments of dividends	(73,765		)	—			—			—			(73,765		)
Payment of deferred loan costs	(9,901		)	—			—			—			(9,901		)
Intercompany loan proceeds	—			138,918			28,372			(167,290		)	—
Intercompany loan payments	—			(67,245		)	(32,705		)	99,950			—
Intercompany capital contribution	—			—			483			(483		)	—
Intercompany dividends	—			(236,975		)	(15,406		)	252,381			—
All other financing, net	250			—			(8,653		)	—			(8,403		)
Net cash flows used by financing activities	(437,274		)	(156,337		)	(19,869		)	184,558			(428,922		)
Effect of exchange rate changes on cash	—			—			5,115			—			5,115
Net change in cash and cash equivalents	(147,699		)	—			114,595			—			(33,104		)
Cash and cash equivalents at beginning of year	150,308			—			187,048			—			337,356
Cash and cash equivalents at end of year	$	2,609		$	—		$	301,643		$	—		$	304,252



	Year Ended December 31, 2011
	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Total
(Amounts in thousands)
Net cash flows provided by operating activities	$	157,811		$	135,303		$	77,557		$	(152,458	)	$	218,213
Cash flows — Investing activities:
Capital expenditures	—			(30,138		)	(77,829		)	—			(107,967		)
Payments for acquisitions, net of cash acquired	—			(90,505		)	—			—			(90,505		)
Intercompany return of capital	—			109,432			—			(109,432		)	—
Intercompany loan proceeds	25,000			28,267			—			(53,267		)	—
Proceeds from disposal of assets	—			130			4,139			—			4,269
Net cash flows provided (used) by investing activities	25,000			17,186			(73,690		)	(162,699		)	(194,203		)
Cash flows — Financing activities:
Excess tax benefits from stock-based payment arrangements	—			3,963			1,705			—			5,668
Payments on long-term debt	(25,000		)	—			—			—			(25,000		)
Net (payments) proceeds under other financing arrangements	—			(20		)	1,601			—			1,581
Repurchase of common shares	(150,000		)	—			—			—			(150,000		)
Payment of dividends	(69,557		)	—			—			—			(69,557		)
Intercompany loan payments	—			(25,000		)	(28,267		)	53,267			—
Intercompany distributions of capital	—			—			(109,432		)	109,432			—
Intercompany dividends	—			(131,432		)	(21,026		)	152,458			—
All other financing, net	547			—			(2,195		)	—			(1,648		)
Net cash flows used by financing activities	(244,010		)	(152,489		)	(157,614		)	315,157			(238,956		)
Effect of exchange rate changes on cash	—			—			(5,277		)	—			(5,277		)
Net change in cash and cash equivalents	(61,199		)	—			(159,024		)	—			(220,223		)
Cash and cash equivalents at beginning of year	211,507			—			346,072			—			557,579
Cash and cash equivalents at end of year	$	150,308		$	—		$	187,048		$	—		$	337,356