Subsequent Event

On January 30, 2015, the Company acquired PTS for approximately $1.4 billion in cash. PTS will be included in the Power Transmission Solutions segment. The Company acquired PTS because management believes it provides complementary products, expands and balances the Company’s product portfolio, and enhances its margin profile.

PTS is a global leader in highly engineered power transmission products and solutions. The business manufactures, sells and services bearings, couplings, gearing, drive components and conveyor systems.

PTS had net sales of $607.3 million in 2014.

The following summarizes the allocation of the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The allocation of the purchase price is preliminary and differences between the preliminary and final purchase price allocation could be material. The Company has not completed its analysis estimating the fair value of inventory, property, plant, and equipment, intangible assets, income tax liabilities and certain contingent liabilities (in millions).



	As of January 30, 2015
Current assets	$	3.2
Trade receivables	71.3
Inventories	102.8
Net Property, plant and equipment and other noncurrent assets	1,384.0
Total assets acquired	$	1,561.3
Current liabilities assumed	76.6
Long-term liabilities assumed	82.7
Net assets acquired	$	1,402.0

On January 30, 2015, the Company entered into a Credit Agreement for a 5-year unsecured term loan facility for the Company in the principal amount of $1.25 billion which was drawn in full by the Company on January 30, 2015 in connection with the closing of the acquisition of PTS (see Note 7 of Notes to the Consolidated Financial Statements, "Debt and Bank Credit Facilities" for additional details of the of the Credit Agreement.

Unaudited Pro Forma Consolidated Financial Information

The following unaudited pro forma financial information shows the results of continuing operations for 2014, as though the acquisition of PTS occurred at the beginning of fiscal year 2014. As a practical expedient, the Company has used the audited stand-alone financial statements of PTS for the fiscal year ended September 30, 2014. The pro forma financial information includes, where applicable, adjustments for: (i) the estimated amortization of acquired intangible assets, (ii) estimated additional interest expense on acquisition related borrowings, (iii) the income tax effect on the pro forma adjustments using an estimated effective tax rate, (iv) exclude the estimated impact of inventory purchase accounting adjustments and (v) exclude estimated closing costs on the acquisition. The pro forma adjustments related to the acquisition of PTS are based on a preliminary purchase price allocation. Differences between the preliminary and final purchase price allocation could have an impact on the pro forma financial information presented and such impact could be material. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the acquisition been completed as of the date indicated above or the results that may be obtained in the future, (in millions, except per share amounts):



	2014
Pro forma net sales	$	3,864.4
Pro forma net income	47.0

Basic earnings per share as reported	$	0.69
Proforma basic earnings per share	1.04

Diluted earnings per share as reported	$	0.69
Pro forma diluted earnings per share	1.04