Exhibit 99.3
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data) | Three Months Ended December 31, | |||||||
2006 | 2005 | |||||||
Sales | $ | 883,590 | $ | 738,510 | ||||
Cost of sales | (596,683 | ) | (497,531 | ) | ||||
Gross profit | 286,907 | 240,979 | ||||||
Selling, general and administrative expense | (227,339 | ) | (187,106 | ) | ||||
Net earnings from affiliates | 3,695 | 3,491 | ||||||
Operating income | 63,263 | 57,364 | ||||||
Interest expense | (17,361 | ) | (15,258 | ) | ||||
Interest income | 3,821 | 602 | ||||||
Loss on early extinguishment of debt | (489 | ) | — | |||||
Other income (expense), net | 2,534 | (24 | ) | |||||
Earnings before income taxes | 51,768 | 42,684 | ||||||
Provision for income taxes | (18,413 | ) | (20,499 | ) | ||||
Income from continuing operations | 33,355 | 22,185 | ||||||
Discontinued operations, net of tax | — | (9,191 | ) | |||||
Gain (loss) from sale of discontinued operations, net of tax | 189 | (2,499 | ) | |||||
Net earnings | $ | 33,544 | $ | 10,495 | ||||
Net earnings per share: | ||||||||
Basic: | ||||||||
Continuing operations | $ | 0.59 | $ | 0.41 | ||||
Discontinued operations | — | (0.22 | ) | |||||
Net earnings | $ | 0.59 | $ | 0.19 | ||||
Diluted: | ||||||||
Continuing operations | $ | 0.58 | $ | 0.40 | ||||
Discontinued operations | — | (0.21 | ) | |||||
Net earnings | $ | 0.58 | $ | 0.19 | ||||
Exhibit 99.3
As discussed in Note 1 and Note 6 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2006, effective December 31, 2006, we changed our method of accounting for U.S. inventories from the last-in, first-out method to the first-in, first-out method, and we have retrospectively adjusted prior periods to conform with the current period presentation. The following tables summarize the consolidated results of operations, as well as the results of operations of each division, before (“As Previously Reported”) and after (“As Adjusted”) the change in accounting method.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended December 31, 2005
Three Months Ended December 31, 2005
As Previously | ||||||||||||
Reported | As Adjusted | Effect of Change | ||||||||||
(Amounts in thousands, except per share data) | ||||||||||||
Sales | $ | 738,510 | $ | 738,510 | $ | — | ||||||
Cost of sales | (501,738 | ) | (497,531 | ) | 4,207 | |||||||
Gross profit | 236,772 | 240,979 | 4,207 | |||||||||
Selling, general and administrative expense | (187,106 | ) | (187,106 | ) | — | |||||||
Other expense, net | (11,189 | ) | (11,189 | ) | — | |||||||
Earnings before income taxes | 38,477 | 42,684 | 4,207 | |||||||||
Provision for income taxes | (18,934 | ) | (20,499 | ) | (1,565 | ) | ||||||
Income from continuing operations | 19,543 | 22,185 | 2,642 | |||||||||
Discontinued operations, net of tax | (11,690 | ) | (11,690 | ) | — | |||||||
Net earnings | $ | 7,853 | $ | 10,495 | $ | 2,642 | ||||||
Net earnings per share: | ||||||||||||
Basic: | ||||||||||||
Continuing operations | $ | 0.36 | $ | 0.41 | $ | 0.05 | ||||||
Net earnings | 0.14 | 0.19 | 0.05 | |||||||||
Diluted: | ||||||||||||
Continuing operations | $ | 0.36 | $ | 0.40 | $ | 0.04 | ||||||
Net earnings | 0.15 | 0.19 | 0.04 |
Exhibit 99.3
FLOWSERVE PUMP DIVISION | 2006 | |||||||||||||||||||||||||||
Quarter | 1st | 2nd | 3rd | |||||||||||||||||||||||||
As | As | As | ||||||||||||||||||||||||||
Previously | Previously | Previously | ||||||||||||||||||||||||||
Reported | As Adjusted | Reported | As Adjusted | Reported | As Adjusted | |||||||||||||||||||||||
(amounts in millions) | ||||||||||||||||||||||||||||
Sales | $ | 328.1 | $ | 328.1 | $ | 387.0 | $ | 387.0 | $ | 401.3 | $ | 401.3 | ||||||||||||||||
Gross profit | 91.8 | 94.3 | 109.4 | 109.9 | 107.9 | 108.5 | ||||||||||||||||||||||
Gross profit margin | 28.0 | % | 28.7 | % | 28.3 | % | 28.4 | % | 26.9 | % | 27.0 | % | ||||||||||||||||
Operating income | 24.5 | 27.0 | 46.9 | 47.5 | 39.1 | 39.7 | ||||||||||||||||||||||
Operating income as a percentage of sales | 7.5 | % | 8.2 | % | 12.1 | % | 12.3 | % | 9.7 | % | 9.9 | % |
2005 | ||||||||||||||||||||||||||||||||
Quarter | 1st | 2nd | 3rd | 4th | ||||||||||||||||||||||||||||
As | As | As | As | |||||||||||||||||||||||||||||
Previously | Previously | Previously | Previously | |||||||||||||||||||||||||||||
Reported | As Adjusted | Reported | As Adjusted | Reported | As Adjusted | Reported | As Adjusted | |||||||||||||||||||||||||
(amounts in millions) | ||||||||||||||||||||||||||||||||
Sales | $ | 312.9 | $ | 312.9 | $ | 360.2 | $ | 360.2 | $ | 322.0 | $ | 322.0 | $ | 403.3 | $ | 403.3 | ||||||||||||||||
Gross profit | 79.4 | 81.6 | 98.9 | 98.7 | 90.0 | 90.9 | 122.4 | 124.6 | ||||||||||||||||||||||||
Gross profit margin | 25.4 | % | 26.1 | % | 27.5 | % | 27.4 | % | 27.9 | % | 28.2 | % | 30.3 | % | 30.9 | % | ||||||||||||||||
Operating income | 17.6 | 19.8 | 37.7 | 37.6 | 29.0 | 29.9 | 60.3 | 62.5 | ||||||||||||||||||||||||
Operating income as a percentage of sales | 5.6 | % | 6.3 | % | 10.5 | % | 10.4 | % | 9.0 | % | 9.3 | % | 14.9 | % | 15.5 | % |
Exhibit 99.3
FLOW CONTROL DIVISION | 2006 | |||||||||||||||||||||||||||
Quarter | 1st | 2nd | 3rd | |||||||||||||||||||||||||
As | As | As | ||||||||||||||||||||||||||
Previously | Previously | Previously | ||||||||||||||||||||||||||
Reported | As Adjusted | Reported | As Adjusted | Reported | As Adjusted | |||||||||||||||||||||||
(amounts in millions) | ||||||||||||||||||||||||||||
Sales | $ | 217.8 | $ | 217.8 | $ | 252.3 | $ | 252.3 | $ | 257.9 | $ | 257.9 | ||||||||||||||||
Gross profit | 74.3 | 75.3 | 86.0 | 86.4 | 87.4 | 88.2 | ||||||||||||||||||||||
Gross profit margin | 34.1 | % | 34.6 | % | 34.1 | % | 34.2 | % | 33.9 | % | 34.2 | % | ||||||||||||||||
Operating income | 24.1 | 25.2 | 29.3 | 29.8 | 33.9 | 34.7 | ||||||||||||||||||||||
Operating income as a percentage of sales | 11.1 | % | 11.6 | % | 11.6 | % | 11.8 | % | 13.1 | % | 13.5 | % |
2005 | ||||||||||||||||||||||||||||||||
Quarter | 1st | 2nd | 3rd | 4th | ||||||||||||||||||||||||||||
As | As | As | As | |||||||||||||||||||||||||||||
Previously | Previously | Previously | Previously | |||||||||||||||||||||||||||||
Reported | As Adjusted | Reported | As Adjusted | Reported | As Adjusted | Reported | As Adjusted | |||||||||||||||||||||||||
(amounts in millions) | ||||||||||||||||||||||||||||||||
Sales | $ | 209.5 | $ | 209.5 | $ | 228.9 | $ | 228.9 | $ | 224.7 | $ | 224.7 | $ | 231.2 | $ | 231.2 | ||||||||||||||||
Gross profit | 70.0 | 71.2 | 74.0 | 74.0 | 72.1 | 72.1 | 68.9 | 70.5 | ||||||||||||||||||||||||
Gross profit margin | 33.4 | % | 34.0 | % | 32.3 | % | 32.3 | % | 32.1 | % | 32.1 | % | 29.8 | % | 30.5 | % | ||||||||||||||||
Operating income | 20.0 | 21.2 | 26.2 | 26.2 | 25.3 | 25.3 | 17.7 | 19.3 | ||||||||||||||||||||||||
Operating income as a percentage of sales | 9.5 | % | 10.1 | % | 11.4 | % | 11.5 | % | 11.3 | % | 11.3 | % | 7.7 | % | 8.4 | % |
Exhibit 99.3
FLOW SOLUTIONS DIVISION | 2006 | ||||||||||||||||||||||||
Quarter | 1st | 2nd | 3rd | ||||||||||||||||||||||
As | As | As | |||||||||||||||||||||||
Previously | Previously | Previously | |||||||||||||||||||||||
Reported | As Adjusted | Reported | As Adjusted | Reported | As Adjusted | ||||||||||||||||||||
(amounts in millions) | |||||||||||||||||||||||||
Sales | $ | 118.2 | $ | 118.2 | $ | 125.0 | $ | 125.0 | $ | 122.9 | $ | 122.9 | |||||||||||||
Gross profit | 51.5 | 51.8 | 56.7 | 56.6 | 55.8 | 55.8 | |||||||||||||||||||
Gross profit margin | 43.6 | % | 43.8 | % | 45.4 | % | 45.3 | % | 45.4 | % | 45.4 | % | |||||||||||||
Operating income | 23.3 | 23.6 | 27.3 | 27.2 | 25.6 | 25.6 | |||||||||||||||||||
Operating income as a percentage of sales | 19.7 | % | 19.9 | % | 21.8 | % | 21.8 | % | 20.8 | % | 20.8 | % |
2005 | ||||||||||||||||||||||||||||||||
Quarter | 1st | 2nd | 3rd | 4th | ||||||||||||||||||||||||||||
As | As | As | As | |||||||||||||||||||||||||||||
Previously | Previously | Previously | Previously | |||||||||||||||||||||||||||||
Reported | As Adjusted | Reported | As Adjusted | Reported | As Adjusted | Reported | As Adjusted | |||||||||||||||||||||||||
(amounts in millions) | ||||||||||||||||||||||||||||||||
Sales | $ | 102.9 | $ | 102.9 | $ | 111.9 | $ | 111.9 | $ | 113.2 | $ | 113.2 | $ | 115.7 | $ | 115.7 | ||||||||||||||||
Gross profit | 44.5 | 44.5 | 49.9 | 50.0 | 50.0 | 50.0 | 49.0 | 50.3 | ||||||||||||||||||||||||
Gross profit margin | 43.2 | % | 43.2 | % | 44.6 | % | 44.7 | % | 44.1 | % | 44.1 | % | 42.4 | % | 43.5 | % | ||||||||||||||||
Operating income | 18.7 | 18.7 | 24.2 | 24.3 | 23.0 | 23.1 | 20.1 | 21.4 | ||||||||||||||||||||||||
Operating income as a percentage of sales | 18.2 | % | 18.2 | % | 21.6 | % | 21.7 | % | 20.3 | % | 20.4 | % | 17.4 | % | 18.5 | % |
Exhibit 99.3
“ALL OTHER” | 2006 | ||||||||||||||||||||||||||
Quarter | 1st | 2nd | 3rd | ||||||||||||||||||||||||
As | As | As | |||||||||||||||||||||||||
Previously | Previously | Previously | |||||||||||||||||||||||||
Reported | As Adjusted | Reported | As Adjusted | Reported | As Adjusted | ||||||||||||||||||||||
(amounts in millions) | |||||||||||||||||||||||||||
Sales | $ | (10.2 | ) | $ | (10.2 | ) | $ | (11.4 | ) | $ | (11.4 | ) | $ | (11.3 | ) | $ | (11.3 | ) | |||||||||
Operating income | (34.3 | ) | (34.6 | ) | (31.1 | ) | (31.1 | ) | (38.2 | ) | (38.1 | ) |
2005 | ||||||||||||||||||||||||||||||||
Quarter | 1st | 2nd | 3rd | 4th | ||||||||||||||||||||||||||||
As | As | As | As | |||||||||||||||||||||||||||||
Previously | Previously | Previously | Previously | |||||||||||||||||||||||||||||
Reported | As Adjusted | Reported | As Adjusted | Reported | As Adjusted | Reported | As Adjusted | |||||||||||||||||||||||||
(amounts in millions) | ||||||||||||||||||||||||||||||||
Sales | $ | (9.2 | ) | $ | (9.2 | ) | $ | (9.8 | ) | $ | (9.8 | ) | $ | (10.4 | ) | $ | (10.4 | ) | $ | (11.8 | ) | $ | (11.8 | ) | ||||||||
Operating income | (30.5 | ) | (30.5 | ) | (31.9 | ) | (31.9 | ) | (22.4 | ) | (22.4 | ) | (45.0 | ) | (45.8 | ) |