Flowserve Announces New Capital Structure Strategy, Increases Share Repurchase Authorization to $1 Billion

ID: 1119985
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(Thomson Reuters ONE) -

DALLAS, May 31, 2012 - Flowserve Corporation (NYSE:FLS), a leading provider of
flow control products and services for the global infrastructure markets,
announced that its board of directors today has endorsed an updated capital
structure strategy designed to make the company's financial structure more
efficient. This capital structure strategy will include returning additional
capital more quickly to shareholders through a new $1 billion stock repurchase
program approved by the board.  Highlights of the strategy include:

* Long-term target gross leverage ratio of 1.0x-2.0x total debt to EBITDA
through the business cycle, versus current gross leverage ratio of 0.7x
* An expanded stock repurchase program of $1 billion, including approximately
$233 million remaining under the company's most recent share repurchase

Mark Blinn, president and chief executive officer, said, "Over the last three
years, we have demonstrated our ability to generate substantial free cash flow
during a historically difficult period of our business cycle.  With our global
energy infrastructure markets showing signs of increased demand and vitality,
and as we continue to see significant benefits from implementing our One
Flowserve strategy, we are now in a position to further refine our capital
structure strategy."

Mike Taff, senior vice president and chief financial officer, said, "This new
capital structure strategy involves prudently increasing our leverage to drive
cash utilization efficiency and return increased capital to shareholders, while
still maintaining a strong balance sheet to fund future growth.  We believe this
new capital structure strategy will provide us ample flexibility to allocate
cash in ways that drive attractive returns for our shareholders, which include
stock repurchases, dividends, disciplined capital investments and value-

creating, bolt-on acquisitions that represent a compelling strategic fit."

Taff added, "We believe this $1 billion repurchase program will be a very
attractive investment for the company that will create increased shareholder

Execution of this share repurchase program is planned to begin immediately.  The
amount and timing of the planned repurchases will be determined by the company
based on its evaluation of the company's financial condition, business
opportunities and market conditions at the time.  The repurchases may be
effected through various methods, including open market repurchases (including
those effected through Rule 10b5-1 plans to allow longer periods of repurchase

The company said the new share repurchase program includes amounts incremental
to its previously announced policy of annually returning 40% to 50% of running
two-year average net earnings to shareholders, which the company intends to
maintain after attaining the announced target leverage ratio.

Investor Contact: Mike Mullin, director, Investor Relations (972) 443-6636
Media Contact: Steve Boone, director, Global Communications and Public Affairs
(972) 443-6644

About Flowserve: Flowserve Corp. is one of the world's leading providers of
fluid motion and control products and services. Operating in more than 55
countries, the company produces engineered and industrial pumps, seals and
valves as well as a range of related flow management services. More information
about Flowserve can be obtained by visiting the company's Web site at

Safe Harbor Statement: This news release 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," "forecasts,"
"predicts" or other similar expressions are intended to identify forward-looking
statements, which include, without limitation, earnings forecasts, statements
relating to our business strategy and statements of expectations, beliefs,
future plans and strategies and anticipated developments concerning our
industry, business, operations and financial performance and condition.

The forward-looking statements included in this news release 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 taking 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; our ability to execute and realize the expected financial
benefits from our strategic realignment initiatives; economic, political and
other risks associated with our international operations, including military
actions or trade embargoes that could affect customer markets, particularly
Middle Eastern markets and global oil and gas producers, and non-compliance with
U.S. export/re-export control, foreign corrupt practice laws, economic sanctions
and import laws and regulations; our exposure to fluctuations in foreign
currency exchange rates, including in hyperinflationary countries such as
Venezuela; our furnishing of products and services to nuclear power plant
facilities; 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; our inability to protect our intellectual property in the U.S., as well
as in foreign countries; obligations under our defined benefit pension plans;
and other factors described from time to time in our filings with the Securities
and Exchange Commission.

All forward-looking statements included in this news release are based on
information available to us on the date hereof, and we assume no obligation to
update any forward-looking statement.


This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.

Source: Flowserve Corporation via Thomson Reuters ONE

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Date: 05/31/2012 - 16:06
Language: English
News-ID 1119985
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