CORRECTION OF PRIOR PERIOD ERROR

12 Months Ended

Dec. 31, 2012

Corrections of Prior Period Error [Abstract]

AccountingChangesAndErrorCorrectionsTextBlock

2.       CORRECTION OF PRIOR PERIOD ERROR

During the third quarter of 2012, as part of a recent reorganization, the Corporation identified errors related to its long-term contract accounting practices within a certain subsidiary in its Controls segment. The errors date back to periods prior to and including 2007 through 2011 and primarily relate to the untimely liquidation of certain labor-based inventory costs to Cost of sales resulting in an overstatement of Retained earnings of $23 million at December 31, 2011. In addition, other errors primarily related to incorrect capitalization of fixed assets were also identified.The combined errors resulted in a cumulative overstatement in Retained earnings of $24 million at December 31, 2011 and primarily impacted Net sales, Cost of sales, and the balance sheet accounts identified in the table below.

In accordance with FASB Accounting Standards Codification No. 250-10-S99 (ASC 250-10-S99), the Corporation evaluated these errors and, based on an analysis of quantitative and qualitative factors, determined that they were 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, if the adjustments to correct the cumulative effect of the aforementioned errors had been recorded in the year ended December 31, 2012,the impact would have been material to that period. Therefore, in accordance with Staff Accounting Bulletin 108, the Corporation has restated the prior period financial statements included within this filing as summarized below.

The corrections as well as the retrospective reclassifications for the discontinued operations of the heat treating business, as discussed in Note 3, to the Corporation's Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income for the year ended December 31, 2011 and 2010, are presented as follows:

For the year ended December 31, 2011:

		(In thousands)
				Adjustments
		As previously reported		Corrections		Reclassification of discontinued operations		As reclassified and restated
Net sales		$	2,054,130	$	(878)	$	(36,510)	$	2,016,742
Cost of sales			1,378,012		4,708		(22,925)		1,359,795
Gross profit			676,118		(5,586)		(13,585)		656,947
Operating income			204,956		(5,586)		(12,516)		186,854
Earnings from continuing operations
	before income taxes		184,989		(5,586)		(12,521)		166,882
Provision for income taxes			54,566		(1,552)		(4,752)		48,262
Earnings from continuing operations			130,423		(4,034)		(7,769)		118,620
Earnings from discontinued operations			-		-		7,769		7,769
Net earnings			130,423		(4,034)		-		126,389
Basic earnings per share *
	Earnings from continuing operations	$	2.81	$	(0.09)	$	(0.17)	$	2.56
	Earnings from discontinued operations		-		-		0.17		0.17
Total		$	2.81	$	(0.09)	$	-	$	2.73
Diluted earnings per share *
	Earnings from continuing operations	$	2.77	$	(0.09)	$	(0.17)	$	2.52
	Earnings from discontinued operations		-		-		0.17		0.17
Total		$	2.77	$	(0.09)	$	-	$	2.69
* May not add due to rounding

For the year ended December 31, 2010:

		(In thousands)
				Adjustments
		As previously reported		Corrections		Reclassification of discontinued operations		As reclassified and restated
Net sales		$	1,893,134	$	(7,443)	$	(31,178)	$	1,854,513
Cost of sales			1,271,381		(1,206)		(21,927)		1,248,248
Gross profit			621,753		(6,237)		(9,251)		606,265
Operating income			179,823		(6,237)		(6,901)		166,685
Earnings from continuing operations
	before income taxes		158,295		(6,237)		(6,905)		145,153
Provision for income taxes			51,697		(1,819)		(2,609)		47,269
Earnings from continuing operations			106,598		(4,418)		(4,296)		97,884
Earnings from discontinued operations			-		-		4,296		4,296
Net earnings			106,598		(4,418)		-		102,180
Basic earnings per share
	Earnings from continuing operations	$	2.33	$	(0.10)	$	(0.09)	$	2.14
	Earnings from discontinued operations		-		-		0.09		0.09
Total		$	2.33	$	(0.10)	$	-	$	2.23
Diluted earnings per share
	Earnings from continuing operations	$	2.30	$	(0.09)	$	(0.09)	$	2.12
	Earnings from discontinued operations		-		-		0.09		0.09
Total		$	2.30	$	(0.09)	$	-	$	2.21

In order to correct the cumulative impact of the errors on periods prior to January 1, 2010, the Corporation recorded an adjustment of $16 million to decrease December 31, 2009 Retained earnings from $981 million to $965 million. The correction resulted in a decrease in 2010 Net earnings of $4 million, which resulted in a cumulative adjustment to 2010 Retained earnings from $1,072 million to $1,052 million. In order to correct the impact on Comprehensive income for the years ended December 31, 2011 and 2010 the Corporation recorded an adjustment to decrease Comprehensive income from $68 million to $64 million and from $124 million to $119 million, respectively.

The corrections to the Corporation's December 31, 2011 Consolidated Balance Sheet are presented in the following table:

		(In thousands)
		As previously reported		Corrections		As restated
Consolidated Balance Sheet
	Receivables, net	$	556,026	$	(13,017)	$	543,009
	Inventories, net		320,633		(7,588)		313,045
	Other current assets		41,813		4,142		45,955
	Total current assets		1,167,134		(16,463)		1,150,671
	Property, plant, and equipment, net		443,555		(827)		442,728
	Total assets		2,652,837		(17,290)		2,635,547
	Deferred revenue		200,268		5,793		206,061
	Other current liabilities		42,976		981		43,957
	Total current liabilities		505,384		6,774		512,158
	Total liabilities		1,423,798		6,774		1,430,572
	Retained earnings		1,187,989		(24,064)		1,163,925
	Total stockholders' equity		1,229,039		(24,064)		1,204,975
	Total liabilities and stockholders' equity		2,652,837		(17,290)		2,635,547

The correction of the errors to the Corporation's Consolidated Statement of Cash flows for the year ended December 31, 2011and 2010 did not impact the net increase or decrease in cash and cash equivalents for any period. The corrections to the Corporation's Consolidated Statement of Cash Flows are presented in the following tables:

For the year ended December 31, 2011:

			(In thousands)
			As previously reported		Corrections		As restated
Net earnings			$	130,423	$	(4,034)	$	126,389
Adjustments to reconcile net earnings to net cash
	provided by operating activities:
	Changes in operating assets and liabilities, net of businesses acquired:
		Accounts receivable, net		(86,000)		7,150		(78,850)
		Inventories, net		(23,429)		2,306		(21,123)
		Deferred revenue		53,498		(1,774)		51,724
		Other current and long-term assets and liabilities		1,997		(4,157)		(2,160)
Net cash provided by operating activities				202,362		(509)		201,853
Cash flows from investing activities:
	Additions to property, plant, and equipment			(84,831)		509		(84,322)
Net cash used for investing activities				(252,336)		509		(251,827)

For the year ended December 31, 2010:

			(In thousands)
			As previously reported		Corrections		As restated
Net earnings			$	106,598	$	(4,418)	$	102,180
Adjustments to reconcile net earnings to net cash
	provided by operating activities:
	Changes in operating assets and liabilities, net of businesses acquired:
		Accounts receivable, net		(60,208)		6,229		(53,979)
		Inventories, net		10,640		761		11,401
		Deferred revenue		(20,913)		179		(20,734)
		Other current and long-term assets and liabilities		(1,829)		(2,962)		(4,791)
Net cash provided by operating activities				171,710		(211)		171,499
Cash flows from investing activities:
	Additions to property, plant, and equipment			(52,980)		211		(52,769)
Net cash used for investing activities				(96,044)		211		(95,833)