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Barnes Distribution’s leadership position within the MRO market and its international presence. The purchase price of $78,500 was financed through a combination of $4,000 of cash, $56,000 of debt and $18,500 (923,506 shares) of Barnes Group common stock. The Company expects to achieve a number of post-acquisition cost savings and other synergies through headquarters and infrastructure consolidation. The costs related to the consolidation efforts have not been finalized and therefore are not included in the pro forma data that follows. 

The Company is in the process of obtaining third-party valuations of certain assets acquired with Kar Products. Thus, the allocation of the purchase price is subject to refinement. Any amounts attributable to such assets are expected to be finalized during 2003. The following pro forma data summarize the combined balance sheets of the Company and Kar Products as if the acquisition had occurred at December 31, 2002. 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

(1) The Kar amounts represent the estimated fair values of the assets acquired and liabilities assumed. (2) 

Other includes the acquisition financing. The net increase in shareholders equity reflects the $18,500 issuance of shares. 

## 4. Inventories 

Inventories at December 31 consisted of: 

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Inventories valued by the LIFO method aggregated $58,506 and $66,092 at December 31, 2002 and 2001, respectively. If LIFO inventories had been valued using the FIFO method, they would have been $12,567 and $13,135 higher at those dates. 

## 5. Property, Plant and Equipment 

Property, plant and equipment at December 31 consisted of: 

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Depreciation expense was $29,304, $30,008 and $30,314 for 2002, 2001 and 2000, respectively. 

