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Immaterial Corrections

6 Months Ended

Jun. 30, 2012

NOTE 18

IMMATERIAL CORRECTIONS

During the fourth quarter of 2011, management concluded the previously issued consolidated financial statements required adjustments to reflect certain immaterial corrections. The Company revised amounts previously reported in the consolidated financial statements to reflect certain adjustments, primarily related to income taxes, cumulative translation adjustments, and other adjustments, related to previously unrecorded immaterial adjustments identified during the preparation of prior years’ financial statements. Certain of these adjustments had an impact on the previously reported second quarter 2011 financial statements. Prior to the distribution of Exelis and Xylem, the Company had evaluated and concluded that the identified amounts were not material to any of its previously issued financial statements. Although management believes the amounts, individually and in the aggregate, were, and continue to be, immaterial to prior periods, management concluded that correcting prior periods in the post-Distribution financial statements was appropriate.

As a result of these adjustments, basic and diluted earnings per share for the three months ended June 30, 2011 were adjusted by $0.02, including $0.04 related to discontinued operations. Basic and diluted earnings per share for the six months ended June 30, 2011 were adjusted by $(0.01), including less than $(0.01) related to discontinued operations. The impact of these adjustments is detailed in the table below.


Three Months Ended June 30, 2011	As Previously Reported with Reclassification For Discontinued Operations (Note 4)		Adjustments			As Adjusted and with Reclassification For Discontinued Operations
Cost of sales	$	376.6	$	(0.2	)	$	376.4
Gross profit		175.8		0.2			176.0
Sales and marketing expenses		44.0		(0.1	)		43.9
General and administrative expenses		44.4		3.8			48.2
Operating income		50.1		(3.5	)		46.6
Income (loss) from continuing operations before income tax expense		31.9		(3.5	)		28.4
Income tax expense		11.4		(1.7	)		9.7
Income (loss) from continuing operations		20.5		(1.8	)		18.7
Income (loss) from discontinued operations		147.2		3.8			151.0
Net income	$	167.7	$	2.0		$	169.7


Six Months Ended June 30, 2011	As Previously Reported with Reclassification For Discontinued Operations (Note 4)			Adjustments			As Adjusted and with Reclassification For Discontinued Operations
Cost of sales	$	741.0		$	0.4		$	741.4
Gross profit		344.5			(0.4	)		344.1
Sales and marketing expenses		85.1			0.2			85.3
General and administrative expenses		92.1			0.4			92.5
Operating income		37.9			(1.0	)		36.9
Income (loss) from continuing operations before income tax expense		(5.7	)		(1.0	)		(6.7	)
Income tax expense (benefit)		(3.5	)		(0.4	)		(3.9	)
Income (loss) from continuing operations		(2.2	)		(0.6	)		(2.8	)
Income (loss) from discontinued operations		294.0			(0.2	)		293.8
Net income	$	291.8		$	(0.8	)	$	291.0

The adjustments had no effect on any of the subtotals within the Consolidated Condensed Statement of Cash Flows.