Flowserve (FLS) Outlines New Capital Structure Strategy; Approve $1B Buyback


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May 31, 2012 5:30 PM EDT Send to a Friend
Flowserve Corporation (NYSE: FLS), 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; and

  • An expanded stock repurchase program of $1 billion, including approximately $233 million remaining under the company’s most recent share repurchase authorization.
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 opportunity).

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.

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