CORRECTION OF PRIOR PERIOD ERROR

12 Months Ended

Dec. 31, 2023

Accounting Changes and Error Corrections [Abstract]

2. CORRECTION OF PRIOR PERIOD ERROR

During the third quarter of 2023, the Corporation identified an error related to a single long-term contract within a subsidiary of its Naval & Power segment. The error primarily impacts 2020 and 2021, whereby certain events occurring during the pandemic, including constructive changes to the contract as well as labor inefficiencies and hiring delays due to a facility relocation, were not reflected in the contract’s estimated costs of completion.

In accordance with Staff Accounting Bulletin (SAB) Nos. 99 and 108, the Corporation evaluated this error and, based on an analysis of quantitative and qualitative factors, determined that it was not material to any one of the prior reporting periods affected and, therefore, amendment of previously filed reports with the Securities and Exchange Commission is not required. However, the Corporation concluded that the cumulative misstatement could not be corrected in the three and nine months ended September 30, 2023, without materially misstating those respective periods. Therefore, the Corporation revised the accompanying prior period financial statements and related notes hereto included within this filing, as summarized below.

The net impact of the error resulted in an overstatement of previously reported total net sales and net earnings of approximately $5 million and $4 million, respectively, for the year ended December 31, 2021 and an overstatement of previously reported total net sales and net earnings of approximately $8 million and $7 million, respectively, for the year ended December 31, 2020. The net impact of the error for the year ended December 31, 2020 of approximately $7 million has been corrected as an adjustment to the beginning balance as of January 1, 2021 in the accompanying consolidated statement of stockholders’ equity for the year ended December 31, 2021. The error did not impact previously reported total net sales or net earnings for the year ended December 31, 2022.

The following tables summarize the net impact of the error in the accompanying consolidated financial statements:

Consolidated Balance Sheet as of December 31, 2022:


(In thousands)	As previously reported		Corrections		As revised
Receivables, net	$	724,603	$	(1,299)	$	723,304
Total current assets	1,517,313		(1,299)		1,516,014
Total assets	4,449,602		(1,299)		4,448,303
Accrued expenses	177,536		(3,096)		174,440
Deferred revenue	242,483		12,318		254,801
Other current liabilities	82,395		384		82,779
Total current liabilities	971,439		9,606		981,045
Total liabilities	2,457,483		9,606		2,467,089
Retained earnings	3,174,396		(10,905)		3,163,491
Total stockholders' equity	1,992,119		(10,905)		1,981,214
Total liabilities and stockholders' equity	4,449,602		(1,299)		4,448,303

Consolidated Statement of Earnings for the year ended December 31, 2021:


(In thousands)	As previously reported		Corrections		As revised
Product sales	$	2,109,617	$	(5,170)	$	2,104,447
Total net sales	2,505,931		(5,170)		2,500,761
Cost of product sales	1,330,191		384		1,330,575
Total cost of sales	1,572,575		384		1,572,959
Gross profit	933,356		(5,554)		927,802
Operating income	382,683		(5,554)		377,129
Earnings before income taxes	354,510		(5,554)		348,956
Provision for income taxes	(87,351)		1,224		(86,127)
Net earnings	267,159		(4,330)		262,829

Basic earnings per share	$	6.61	$	(0.11)	$	6.50
Diluted earnings per share	$	6.58	$	(0.11)	$	6.47

Consolidated Statement of Comprehensive Income for the year ended December 31, 2021:


(In thousands)	As previously reported		Corrections		As revised
Net earnings	$	267,159	$	(4,330)	$	262,829
Comprehensive income	387,550		(4,330)		383,220

Consolidated Statement of Cash Flows for the year ended December 31, 2021:


(In thousands)	As previously reported		Corrections		As revised
Net earnings	$	267,159	$	(4,330)	$	262,829
Receivables, net	(61,277)		105		(61,172)
Deferred revenue	9,584		5,065		14,649
Income taxes	(12,988)		(1,224)		(14,212)
Other	19,005		384		19,389
Net cash provided by operating activities	387,668		—		387,668