The Corporation continually evaluates potential acquisitions that either strategically fit within the Corporation's existing portfolio or expand the Corporation's portfolio into new product lines or adjacent markets. The Corporation has completed a number of acquisitions that have been accounted for as business combinations and have resulted in the recognition of goodwill in the Corporation's financial statements. This goodwill arises because the purchase prices for these businesses reflect the future earnings and cash flow potential in excess of the earnings and cash flows attributable to the current product and customer set at the time of acquisition. Thus, goodwill inherently includes the know-how of the assembled workforce, the ability of the workforce to further improve the technology and product offerings, and the expected cash flows resulting from these efforts. Goodwill may also include expected synergies resulting from the complementary strategic fit these businesses bring to existing operations.

In 2012, the Corporation acquired eight businesses for an aggregate purchase price of $460 million, net of cash acquired, all of which are described in more detail below. In 2011, the Corporation acquired eight businesses and in 2010 the Corporation acquired two businesses, for an aggregate purchase of $178 million and $40 million, respectively, all of which are described in more detail below.

The amounts of net sales and net loss included in the Corporation's consolidated statement of earnings from the acquisition date to the period ended December 31, 2012 are $21 million and $5 million, respectively.

The Corporation allocates the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. In the months after closing, as the Corporation obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and as the Corporation learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Corporation will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for all acquisitions consummated during 2012, 2011, and 2010:

(in thousands)
		2012		2011		2010
Accounts receivable	$	54,474	$	19,078	$	3,956
Inventory		52,215		23,813		3,052
Property, plant, and equipment		40,630		22,526		225
Other current assets		6,029		1,182		93
Intangible assets		183,481		53,717		14,792
Current and non-current liabilities		(45,288)		(13,510)		(3,671)
Pension and postretirement benefits		(8,144)		-		-
Deferred income taxes		(52,010)		-		(4,542)
Debt assumed		(13,819)		-		-
Holdback		-		(1,051)		-
Due to seller		(4,081)		(4,303)		-
Net tangible and intangible assets		213,487		101,452		13,905
(Gain on Bargain Purchase)		(910)		-		-
Purchase price		460,439		180,277		40,139
Goodwill	$	247,862	$	78,825	$	26,234

The assets, liabilities and results of operations of the businesses acquired in 2011 and 2010 were not material to the Corporation's consolidated financial position or results of operations, and therefore pro forma financial information for such business acquisitions is not presented.

The following table presents unaudited consolidated pro forma financial information for the combined results of the Corporation and its completed business acquisitions during the year ended December 31, 2012 as if the acquisitions had occurred on January 1, 2011 for purposes of the financial information presented for the years ended December 31, 2012 and 2011.

(In thousands, except per share data)		2012		2011
Net sales	$	2,408,117	$	2,317,776
Net earnings from continuing operations		103,107		112,478
Diluted earnings per share from continuing operations		2.17		2.39

The unaudited pro forma consolidated results were prepared using the acquisition method of accounting and are based on the historical financial information for a 12 month period. The unaudited pro forma consolidated results are not necessarily indicative of what our consolidated results of operations actually would have been had we completed the acquisition on January 1, 2011. In addition, the unaudited pro forma consolidated results do not purport to project the future results of operations of the combined company nor do they reflect the expected realization of any cost savings associated with the acquisition. The unaudited pro forma consolidated results reflect primarily the following pro forma pre-tax adjustments:

On November 21, 2012, the Corporation acquired Cimarron Energy, Inc. through the acquisition of 100% of the membership interests of Cimarron Energy Holding Company, LLC, for a net cash purchase price of $132.7 million. The Purchase Agreement contains a purchase price adjustment mechanism and representations and warranties customary for a transaction of this type, including a portion of the purchase price deposited into escrow as security for potential indemnification claims against the seller. Management funded the purchase from the Corporation's revolving credit facility.

Cimarron is a manufacturer of highly customized and engineered energy production, processing and environmental solutions for the U.S. oil and gas industry. Cimarron has 368 employees and is headquartered in Norman, OK. Revenues of the acquired business were approximately $98 million for the year ended 2011. The business will operate within the Oil and Gas Systems of the Corporation's Flow Control segment.

On November 5, 2012, the Corporation acquired AP Services, LLC, through the acquisition of 100% of the membership interests of A.P. Holdco, LLC, the parent company of the operating entity, for a base cash purchase price of $30 million. The Purchase Agreement contains a pre and post-closing purchase price adjustment mechanism, resulting in an additional payment of $0.9 million at closing for estimated working capital. The agreement also contains representations and warranties customary for a transaction of this type, including a portion of the purchase price deposited into escrow as security for potential indemnification claims against the seller. Management funded the purchase from the Corporation's revolving credit facility.

A.P. Services is a supplier of fluid sealing technologies and services to the nuclear and fossil power generation markets, with proven performance in delivering solutions that improve plant reliability and safety and also reduce operation and maintenance costs. A.P. Services has 84 employees and is based in Freeport, PA. Revenues of the acquired business were approximately $23 million for the year ended 2011. The business will operate within the Nuclear Group of the Corporation's Flow Control segment.

During 2012, the Corporation acquired three product lines in two separate transactions for an aggregate purchase price of approximately $7 million. These product lines serve the commercial nuclear power market and consist of original equipment and re-engineered replacement products for obsolete equipment and product technology supporting steam generators on nuclear reactors. One of the acquisitions resulted in the recognition of a gain on bargain purchase of $0.9 million, as the value of assets acquired of $1.2 million exceeded the purchase price of $0.3 million. The Corporation will integrate these product lines within the Nuclear Group of the Corporation's Flow Control segment.

The purchase price of the acquisitions has been allocated to the net tangible and intangible assets acquired with the remainder recorded as goodwill on the basis of estimated fair values, as follows:

(In thousands)		AP Services			Cimarron		Other Flow		Total
Accounts receivable	$	3,364		$	21,706	$	-	$	25,070
Inventory		2,389			18,987		236		21,612
Property, plant, and equipment		3,488			8,222		-		11,710
Other current assets		204			618		-		822
Intangible assets		8,000			55,000		4,681		67,681
Current and non-current liabilities		(748)			(21,434)		-		(22,182)
Deferred income taxes		(3,424)			(17,851)		-		(21,275)
Due to seller		(297)			(366)		(664)		(1,327)
Net tangible and intangible assets		12,976			64,882		4,253		82,111
(Gain on bargain purchase)		-			-		(910)		(910)
Purchase price		30,886			132,665		6,625		170,176
Goodwill	$	17,910		$	67,783	$	3,282	$	88,975

Goodwill tax deductible		Yes	⁽¹⁾		No		Yes

On December 2, 2011, the Corporation acquired the assets of Anatec International, Inc, and Lambert, MacGill, Thomas, Inc. (Anatec and LMT) for $35.2 million in cash, including a purchase price adjustment of $1.2 million. The Asset Purchase Agreement contains customary representations and warranties, including a portion of the purchase price deposited into escrow as security for potential indemnification claims against the seller. Management funded the purchase from the Corporation's revolving credit facility. As of December 31, 2012, all funds held in escrow have been released to the seller with no claims outstanding.

Anatec and LMT perform testing and inspection services for commercial nuclear power plants to ensure safety, operational soundness, and compliance with regulatory codes. Anatec and LMT will operate within the Nuclear Group of the Corporation's Flow Control segment. Anatec and LMT have 50 full-time personnel and manage an additional seasonal workforce of approximately 150 during nuclear plant maintenance outages. Anatec and LMT are headquartered in San Clemente, CA, with four additional facilities to support nuclear plant operations in the U.S. Revenues of the acquired business were approximately $20 million for the year ended 2010.

On April 6, 2011, the Corporation acquired the net assets of Douglas Equipment Ltd. (Douglas) for £12.3 million ($20.1 million) in cash. The Business Transfer Agreement contains customary representations and warranties, including a portion of the purchase price deposited into escrow as security for potential indemnification claims against the seller. Management funded the purchase from the Corporation's revolving credit facility.

Douglas designs and manufactures aircraft handling systems for the defense and commercial aerospace markets and will operate within the Marine & Power Products division of the Corporation's Flow Control segment. Douglas has approximately 135 employees and is headquartered in Cheltenham, U.K. Revenues of the acquired business were approximately $28 million for the year ended 2010.

The purchase price of the acquisitions has been allocated to the net tangible and intangible assets acquired with the remainder recorded as goodwill on the basis of estimated fair values, as follows:

(In thousands)		Anatec		Douglas		Total
Accounts receivable	$	4,685	$	945	$	5,630
Inventory		-		10,914		10,914
Property, plant, and equipment		1,581		619		2,200
Other current assets		185		309		494
Intangible assets		14,936		6,697		21,633
Current liabilities		(818)		(5,038)		(5,856)
Net tangible and intangible assets		20,569		14,446		35,015
Purchase price		35,201		20,094		55,295
Goodwill	$	14,632	$	5,648	$	20,280

Goodwill tax deductible		Yes		Yes

On December 28, 2012, the Corporation acquired all the outstanding shares of Exlar Corporation for $84.3 million, net of cash acquired. The Stock Purchase Agreement contains a purchase price adjustment mechanism and representations and warranties customary for a transaction of this type, including a portion of the purchase price deposited into escrow as security for potential indemnification claims against the seller. Management funded the purchase from the Corporation's revolving credit facility.

Exlar is a provider of motion control solutions, specifically electric actuators, to industry-leading customers in a variety of end markets including factory automation, food process/packaging and energy process, and military applications. Exlar employs 183 people and is headquartered in Chanhassen, Minnesota, with a sales and service office near Frankfurt, Germany. Revenues of the acquired business were approximately $40.0 million in 2011. The business will operate within the Integrated Sensing division of the Corporation's Controls segment.

On November 1, 2012, the Corporation acquired the net assets of PG Drives Technology, a business unit of Spirent plc, for $63.2 million in cash. The Asset Purchase Agreement contains customary representations and warranties. Management funded the purchase from the Corporation's revolving credit facility and available cash on hand in foreign locations.

PG Drives Technology is a designer and manufacturer of highly engineered controllers and drives used in a wide variety of advanced electric-powered industrial and medical vehicles. PG Drives has 186 employees and operates principally from a design and manufacturing site in Christchurch, UK, with additional sales and technical support offices in the U.S., Taiwan, China, Hong Kong, South Korea, and Australia. Revenues of the acquired business were approximately $58.0 million in 2011. The business will operate within the Avionics & Industrial division of the Corporation's Controls segment.

On October 31, 2012, the Corporation entered into a definitive merger agreement to acquire Williams Controls in a cash tender offer of $15.42 per share. Total cash consideration for the shares, including the value of restricted stock and stock options, was approximately $110.4 million, net of cash acquired of $10.2 million. The Corporation also assumed $13.8 million in bank debt. Management funded the purchase from the Corporation's revolving credit facility.

Williams Controls is a designer and manufacturer of highly engineered electronic sensors and electronic throttle controls for off-road equipment, heavy trucks, and military vehicles. Williams employs 294 people and operates principally from their headquarters in Portland, Oregon, with additional production facilities in China and India. Revenues of the acquired business were approximately $64.4 million for their last fiscal year ending September 30, 2012. The business will operate within the Avionics & Industrial division of the Corporation's Controls segment.

The purchase price of the acquisitions has been allocated to the net tangible and intangible assets acquired with the remainder recorded as goodwill on the basis of estimated fair values, as follows:

(In thousands)	PG Drives		Williams Controls		Exlar		Total
Accounts receivable	$	7,596	$	10,383	$	5,852	$	23,831
Inventory		10,541		10,434		8,039		29,014
Property, plant, and equipment		1,589		16,137		4,177		21,903
Other current assets		220		4,552		435		5,207
Intangible assets		25,200		44,000		37,200		106,400
Current and non-current liabilities		(4,739)		(11,958)		(5,971)		(22,668)
Pension and postretirement benefits		-		(8,144)		-		(8,144)
Deferred income taxes		-		(15,736)		(14,999)		(30,735)
Debt assumed		-		(13,819)		-		(13,819)
Net tangible and intangible assets		40,407		35,849		34,733		110,989
Purchase price		63,219		110,433		84,311		257,963
Goodwill	$	22,812	$	74,584	$	49,578	$	146,974

Goodwill tax deductible		Yes		No		No

On October 11, 2011, the Corporation acquired the assets of South Bend Controls (SBC) for $11.2 million in cash, including a purchase price adjustment of $0.3 million. The Asset Purchase Agreement contains customary representations and warranties, including a portion of the purchase price deposited into escrow as security for potential indemnification claims against the seller. Management funded the purchase primarily from the Corporation's revolving credit facility and available cash on hand.

SBC is a designer and manufacturer of highly engineered, solenoid-based components used in critical applications serving the aerospace, defense, industrial and medical markets. Based in South Bend, Indiana, SBC has 63 employees, with union representation for 36 members of the workforce. Revenues of the acquired business were approximately $8.0 million in 2010. The business will operate within the Integrated Sensing division of the Corporation's Controls segment.

On July 28, 2011, the Corporation acquired all of the issued and outstanding capital stock of ACRA Control Ltd. (ACRA) for €42.6 million (approximately $61.1 million) in cash, net of cash acquired. The Share Purchase Agreement contains customary representations and warranties, including a portion of the purchase price deposited into escrow as security for potential indemnification claims against the seller. Management funded the purchase primarily from the Corporation's revolving credit facility and cash generated from foreign operations.

ACRA is a supplier of data acquisition systems and networks, data recorders, and telemetry ground stations for both defense and commercial aerospace markets and will operate within the Integrated Sensing division of the Corporation's Motion Control segment. ACRA had 128 employees on the date of acquisition and operates from a leased facility in Dublin, Ireland. ACRA had revenues of approximately €20.5 million ($27.1 million) for its fiscal year ended March 31, 2011.

On January 7, 2011, the Corporation acquired all the issued and outstanding capital stock of Predator Systems, Inc. (PSI) for $13.5 million in cash. The Stock Purchase Agreement contains customary representations and warranties, including a portion of the purchase price deposited into escrow as security for potential indemnification claims against the seller. Management funded the purchase from the Corporation's revolving credit facility.

PSI designs and manufactures motion control components and subsystems for ground defense, ordnance guidance, and aerospace applications and will operate within the Flight Systems division of the Corporation's Controls segment. PSI had 45 employees as of the date of the acquisition and is headquartered in Boca Raton, FL. Revenues of the acquired business were approximately $8.0 million for the year ended December 31, 2010.

The purchase price of the acquisitions has been allocated to the net tangible and intangible assets acquired with the remainder recorded as goodwill on the basis of estimated fair values, as follows:

(In thousands)	South Bend		ACRA		PSI		Total
Accounts receivable	$	1,635	$	8,901	$	862	$	11,398
Inventory		2,990		6,539		1,856		11,385
Property, plant, and equipment		727		1,600		2,100		4,427
Other current assets		32		456		67		555
Intangible assets		3,500		17,054		4,700		25,254
Current and non-current liabilities		(648)		(6,048)		(190)		(6,886)
Deferred income taxes		-		(2,303)		-		(2,303)
Net tangible and intangible assets		8,236		26,199		9,395		43,830
Purchase price		11,175		61,053		13,503		85,731
Goodwill	$	2,939	$	34,854	$	4,108	$	41,901

Goodwill tax deductible		Yes		No		Yes

On June 21, 2010, the Corporation acquired all the issued and outstanding stock of Specialist Electronics Services Ltd. (SES) for £14.3 million ($21.2 million), net of cash acquired. Under the terms of the Share Purchase Agreement, the Corporation deposited a portion of the purchase price into escrow as security for potential indemnification claims against the seller. In accordance with the terms of the Share Purchase Agreement, in June 2011, one-half of the escrow was released with no holdback for pending claims. Management funded the purchase from a combination of cash generated from foreign operations and the Corporation's revolving credit facility.

SES provides a range of rugged products for airborne and other severe environments, with particular expertise in solid state data recording, computing, and control display units. Key platforms include fixed-wing, rotary-wing, and unmanned aircraft, tactical vehicles, and navy vessels. SES is located in Camberley, U.K. and had 41 employees as of the date of the acquisition. Revenues of the acquired business were £4.7 million ($7.5 million) for the fiscal year ended May 31, 2010.

On June 1, 2010, the Corporation acquired all the issued and outstanding stock of Hybricon Corporation (Hybricon) for $19.0 million in cash. Under the terms of the Stock Purchase Agreement, the Corporation deposited a portion of the purchase price into escrow as security for potential indemnification claims against the seller. As of December 31, 2011, all funds held in escrow have been released to the seller with no claims outstanding. Management funded the purchase from the Corporation's revolving credit facility.

Hybricon designs and manufactures custom and standards-based enclosures and electronic backplanes for defense and commercial applications, and is a leading supplier for predominant embedded commercial-off-the-shelf system architectures. Hybricon had 72 employees as of the date of the acquisition and was located in Ayer, MA prior to its relocation to the existing Curtiss-Wright facility in Littleton, MA in December 2010. Revenues of the acquired business were $16.8 million for the fiscal year ended June 30, 2009.

The purchase price of the acquisitions has been allocated to the net tangible and intangible assets acquired with the remainder recorded as goodwill on the basis of estimated fair values, as follows:

(In thousands)	SES		Hybricon		Total
Accounts receivable	$	1,683	$	2,273	$	3,956
Inventory		977		2,075		3,052
Property, plant, and equipment		74		151		225
Other current assets		25		68		93
Intangible assets		8,115		6,677		14,792
Current and non-current liabilities		(2,251)		(1,420)		(3,671)
Deferred income taxes		(2,255)		(2,287)		(4,542)
Net tangible and intangible assets		6,368		7,537		13,905
Purchase price		21,163		18,976		40,139
Goodwill	$	14,795	$	11,439	$	26,234

Goodwill tax deductible		No		No

On December 31, 2012, the Corporation acquired the assets of F.W. Gartner Thermal Spraying, Ltd. (Gartner), for approximately $32.3 million in cash. The Asset Purchase Agreement contains a purchase price adjustment mechanism and representations and warranties customary for a transaction of this type, including a portion of the purchase price deposited into escrow as security for potential indemnification claims against the seller. Management funded the purchase from the Corporation's revolving credit facility.

Gartner is a provider of thermal spray coatings for the oil and gas, petrochemical, power generation, and other industrial markets in the U.S. Gartner operates out of two leased facilities in the Houston, TX area and employs 115 people. Revenues of the acquired business were approximately $19 million for the year ended December 31, 2011.

The purchase price of the acquisitions has been allocated to the net tangible and intangible assets acquired with the remainder recorded as goodwill on the basis of estimated fair values, as follows:

(In thousands)	Gartner
Accounts receivable	$	5,573
Inventory		1,589
Property, plant, and equipment		7,017
Intangible assets		9,400
Current and non-current liabilities		(438)
Due to seller		(2,754)
Net tangible and intangible assets		20,387
Purchase price		32,300
Goodwill	$	11,913

Goodwill tax deductible		Yes

On July 22, 2011, the Corporation acquired the assets of IMR Test Labs (IMR), for approximately $20.0 million in cash. The Corporation paid $18.0 million at closing, with a portion of the purchase price held back as security for potential indemnification claims. Management funded the purchase primarily from the Corporation's revolving credit facility and available cash on hand.

The agreement also provides for contingent consideration based on achievement of certain sales targets. Based on the estimated amount of sales over the two-year measurement period, the Corporation recorded a liability of the estimated fair value of the contingent consideration in the amount of $1.6 million. In 2012, $0.6 million was paid to the sellers related to 2011 performance. Additional purchase price of $0.2 million was also recorded related to the agreement's purchase price adjustment mechanism, resulting in total cash consideration paid to date of $18.8 million.

IMR is a provider of mechanical and metallurgical testing services for the aerospace, power generation, and general industrial markets. Revenues of the acquired business were approximately $14.0 million for the year ended December 31, 2010.

On April 8, 2011, the Corporation acquired certain assets of BASF Corporation's Surface Technologies (BASF) business for $20.5 million in cash. The Asset Purchase Agreement contains customary representations and warranties and provided for a purchase price adjustment based on the value of inventory at closing. The purchase price adjustment is reflected in the disclosed purchase price. Management funded the purchase from the Corporation's revolving credit facility.

BASF's Surface Technologies business is a supplier of metallic and ceramic thermal spray coatings primarily for the aerospace and power generation markets and expands the coatings capabilities within the Corporation's Surface Technologies segment. The business has approximately 150 employees at three operating facilities located in East Windsor, CT, Wilmington, MA and Duncan, SC. Revenues of the acquired business were approximately $29.0 million for the year ended December 31, 2010.

The purchase price of the acquisitions has been allocated to the net tangible and intangible assets acquired with the remainder recorded as goodwill on the basis of estimated fair values, as follows:

(In thousands)	BASF		IMR		Total
Accounts receivable	$	-	$	2,050	$	2,050
Inventory		1,514		-		1,514
Property, plant, and equipment		12,774		3,125		15,899
Other current assets		-		133		133
Intangible assets		3,000		3,830		6,830
Current liabilities		(263)		(505)		(768)
Other liabilities		-		(1,051)		(1,051)
Due to seller		-		(2,000)		(2,000)
Net tangible and intangible assets		17,025		5,582		22,607
Purchase price		20,501		18,750		39,251
Goodwill	$	3,476	$	13,168	$	16,644

Goodwill tax deductible		Yes		Yes