corresp
November 7, 2006
Ms. Angela J. Crane
Accounting Branch Chief
Division of Corporation Finance
Securities and Exchange Commission
Mail Stop 6010
Washington, D.C. 20549
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Re: |
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Flowserve Corporation
Form 10-K for the Fiscal Year Ended December 31, 2005
Filed June 30, 2006
File No. 1-13179 |
Dear Ms. Crane:
Flowserve
Corporation (the "Company") is responding to your letter dated
October 27, 2006 addressed to Mr. Mark A. Blinn.
For your
convenience, we have restated the only comment set forth in your letter.
Form 10-K for the fiscal year ended December 31, 2005
General
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We note the revised text of your proposed risk factor, including the language ... state
sponsors of terrorism, including Iran and Syria (emphasis added). Please clarify for us
whether you or your subsidiaries have direct or indirect business contacts with countries
other than Iran and Syria that have been identified as state sponsors of terrorism by the
State Department. If you have such contacts, please provide the same type of information
and analysis regarding those contacts as you previously have provided to us regarding your
subsidiaries contacts with Iran and Syria. If you have no such contacts, please revise
the proposed risk factor language to make clear that Iran and Syria are the only State
Department-designated terrorist-sponsoring states in which you have business operations and
sales. |
In response to the preceding questions posed, this will confirm that certain of our foreign
subsidiaries have autonomously conducted, under their own local authority and consistent with U.S.
export laws, a relatively very small amount of business in Sudan, which has also been identified
with Iran and Syria by the U.S. State Department as a state sponsor of terrorism. To the best of
my knowledge, these few sales to Sudanese customers relate to oil industry applications and are not
believed to be used for any military purposes.
For your information, it is contrary to Company policy for any operation of the Company, whether
foreign or not, to engage in any business activities with Cuba and North Korea, the remaining two
countries designated by the U.S. State Department as state sponsors of terrorism. The Company
records which I reviewed to prepare this letter do not reflect any such activity, in any event.
Accordingly, our subsequent Form 10-K Reports and Exchange Act filings will contain the following
clarified risk factor.
Our risks involved in conducting our international business operations include, without
limitation, the risks associated with certain of our foreign subsidiaries autonomously
conducting, under their own local authority and consistent with U.S. export laws,
business operations and sales, which constitute approximately 1-2% of our consolidated
global revenue, in Iran, Syria and Sudan, which have each been designated by the U.S.
State Department as a state sponsor of terrorism. Due to the growing political
uncertainties associated with these countries, we have been planning to voluntarily
withdraw, on a phased basis, from conducting new business in these countries since early
in 2006. However, these subsidiaries will continue to honor existing contracts,
commitments and warranty obligations that are in compliance with U.S. laws and
regulations.
We trust that we now have fully addressed your comments and concerns. However, if you have any
remaining questions, please let me know, and we will promptly and appropriately respond.
Thank you again for your courtesy and cooperation in handling this matter.
With best regards,
/s/ Ronald F. Shuff
Ronald F. Shuff
Vice President, Secretary
and General Counsel