FLOWSERVE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2020 2019 2018 (Amounts in thousands) Cash flows — Operating activities: Net earnings, including noncontrolling interests $ 126,781  $ 246,940  $ 109,887  Adjustments to reconcile net earnings to net cash provided (used) by operating activities: Depreciation 86,175  92,042  95,820  Amortization of intangible and other assets 14,578  13,862  16,653  Loss on disposition of business —  —  7,727  Stock-based compensation 27,252  23,882  19,912  Provision for U.S. Tax Cuts and Jobs Act of 2017 —  —  (5,654) Foreign currency, asset impairment and other non-cash adjustments 21,051  (11,724) 36,052  Change in assets and liabilities: Accounts receivable, net 45,648  2,883  (25,448) Inventories, net 15,306  (31,058) (29,314) Contract assets, net 4,258  (45,220) (24,411) Prepaid expenses and other assets, net 34,262  (9,455) (15,491) Contract liabilities (34,066) 19,699  32,955  Accounts payable (22,571) 24,678  7,589  Accrued liabilities and income taxes payable 50,203  12,418  (15,248) Retirement obligations and other 3,636  (3,357) (26,595) Net deferred taxes (61,976) (11,493) 6,397  Net cash flows provided (used) by operating activities 310,537  324,097  190,831  Cash flows — Investing activities: Capital expenditures (57,405) (75,716) (83,993) Proceeds from disposal of assets 15,705  42,333  6,190  Payments for disposition of business —  —  (3,663) Net cash flows provided (used) by investing activities (41,700) (33,383) (81,466) Cash flows — Financing activities: Payments on long-term debt (191,258) (105,000) (60,000) Proceeds from issuance of senior notes 498,280  —  —  Payments of deferred loan costs (4,572) —  —  Proceeds from short-term financing —  75,000  —  Payments on short-term financing —  (75,000) —  Proceeds under other financing arrangements 2,285  3,404  3,377  Payments under other financing arrangements (9,792) (9,856) (9,853) Payments related to tax withholding for stock-based compensation (4,607) (3,900) (3,061) Repurchases of common shares (32,112) (15,000) —  Payments of dividends (104,159) (99,557) (99,416) Other (6,478) (1,555) (4,331) Net cash flows provided (used) by financing activities 147,587  (231,464) (173,284) Effect of exchange rate changes on cash 7,870  (7,953) (19,843) Net change in cash and cash equivalents 424,294  51,297  (83,762) Cash and cash equivalents at beginning of year 670,980  619,683  703,445  Cash and cash equivalents at end of year $ 1,095,274  $ 670,980  $ 619,683  Income taxes paid (net of refunds) $ 75,342  $ 66,372  $ 87,009  Interest paid 57,041  53,607  54,576  See accompanying notes to consolidated financial statements. 63