Flowserve Financial Results For 2003 and Prior Years

For full year 2003, net income was $52.9 million, or 96 cents a share, compared with restated $45.5 million, or 87 cents a share, in the prior year. Before special items, full year 2003 net income was $69.1 million, or $1.25 a share, compared with restated $69.6 million, or $1.33 a share, in 2002.

Restated results for the first nine months of 2003 and full years 2002 through 2000 include aggregate pretax charges of $21.0 million for adjustments related to the restatement.

These adjustments represent less than 5 percent of aggregate operating income during the affected periods. In announcing preliminary financial information on Feb. 3, 2004, the company estimated aggregate pretax charges of approximately $11 million in these periods, predominantly to correct inventory and related balances that resulted in cost of sales adjustments. Subsequent to that announcement, additional pretax charges were identified, principally related to the same issues.

The effect of the restatement on prior periods is detailed in the attached schedules. The company believes the adjustments do not affect its operations going forward.

Reported results for 2003 include post-closing adjustments, including increasing reserves for pre-existing legal contingencies. These post-closing adjustments had the effect of reducing 2003 reported results by about 22 cents a share.

Partially offsetting these post-closing adjustments was the effect of a tax benefit of 7 cents a share for a refund previously not benefited that reduced the full year 2003 effective tax rate to 28.4 percent. The tax rate for 2004 is currently expected to range between 35 percent and 37 percent.

Special items in all periods of 2003 and 2002 generally relate to the May 2002 acquisition of the flow control division of Invensys plc (IFC) and early debt reduction in 2002.

The company also increased its earnings guidance for full year 2004. Chairman, President and Chief Executive Officer C. Scott Greer said, "With 2003 results now announced, I want to make clear our positive view for 2004. We are encouraged by our strong bookings trends thus far in 2004. Therefore, we are increasing our full year earnings per share forecast to a range of $1.25 to $1.40. If our business further improves, we plan to adjust this range accordingly. For the first quarter of 2004, our earnings per share forecast remains unchanged." Greer emphasized that these forecasts exclude any special items and that no special items are expected in 2004.

Flowserve Corp. will hold its annual meeting of shareholders at its Learning Resource Center in Irving, Texas on June 22, 2004. The record date for the meeting is April 29, 2004.

Flowserve Corp. is one of the world's leading providers of fluid motion and control products and services. Operating in 56 countries, the company produces engineered and industrial pumps, seals and valves as well as a range of related flow management services.

SAFE HARBOR STATEMENT: This news release contains various forward-looking statements and includes assumptions about Flowserve's future market conditions, operations and results. These statements are based on current expectations and are subject to significant risks and uncertainties. They are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Among the many factors that could cause actual results to differ materially from the forward-looking statements are: material adverse events in the national financial markets; changes in the already competitive environment for the company's products or competitors' responses to Flowserve's strategies; the company's ability to integrate past and future acquisitions into its management operations; political risks, military actions or trade embargoes affecting customer markets, including continuing conflict in Iraq with its potential impact on Middle Eastern markets and global oil producers; the health of the company's various customer industries, including the petroleum, chemical, power and water industries; economic turmoil in areas outside the United States; global economic growth; unanticipated difficulties or costs associated with new systems, including software; the company's relative geographical profitability and its impact on the company's utilization of foreign tax credits; and the recognition of significant expenses associated with adjustments to realign the company's facilities and other capabilities with its strategies and business conditions, including, without limitation, expenses incurred in restructuring the company's operations and the cost of financing, including increases in interest costs, and litigation developments. Flowserve undertakes no obligation to update or revise any forward-looking statements contained herein as a result of new information, future events or otherwise occurring after the date on which such forward-looking statements are made. New factors emerge from time-to-time, and it is not possible for Flowserve to predict all such factors.