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Revenue Recognition and Contract Balances
3 Months Ended
Apr. 02, 2023
Revenue from Contract with Customer [Abstract]  
Revenue Recognition and Contract Balances Revenue Recognition and Contract Balances
Approximately 70% of the Company's net sales are recognized at a point in time, with the remaining 30% of net sales recognized over time. The Company disaggregates its revenue from contracts with customers by customer type and geographic region for each segment, as management believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. With the exception of the Engineered Systems segment, net sales in each segment is primarily derived from fixed price contracts. Net sales in the Engineered Systems segment is typically between 45% and 55% fixed price contracts in a given reporting period, with the balance of net sales derived from cost-reimbursable type contracts. For the three months ended April 2, 2023, approximately 51% of net sales in the Engineered Systems segment were derived from fixed price contracts.
First Quarter Ended
April 2, 2023
First Quarter Ended
April 2, 2023
Customer TypeGeographic Region (c)
(in millions)U.S. Govt. (a)Other (b)TotalUnited StatesEuropeAsiaAll otherTotal
Net sales:
Digital Imaging$130.4 $642.1 $772.5 $334.4 $197.3 $158.4 $82.4 $772.5 
Instrumentation23.0 310.5 333.5 138.0 97.2 67.5 30.8 333.5 
Aerospace and Defense Electronics64.7 108.5 173.2 120.1 29.5 17.0 6.6 173.2 
Engineered Systems93.4 10.7 104.1 103.3  0.2 0.6 104.1 
Total$311.5 $1,071.8 $1,383.3 $695.8 $324.0 $243.1 $120.4 $1,383.3 
(a) U.S. Government sale include sales as a prime contractor or subcontractor.
(b) Primarily commercial sales
(c) Geographic region by destination
First Quarter Ended
April 3, 2022
First Quarter Ended
April 3, 2022
Customer TypeGeographic Region (c)
(in millions)U.S. Govt. (a)Other (b)TotalUnited StatesEuropeAsiaAll otherTotal
Net sales:
Digital Imaging$141.5 $609.0 $750.5 $337.2 $183.8 $149.6 $79.9 $750.5 
Instrumentation22.4 286.5 308.9 133.4 80.9 65.6 29.0 308.9 
Aerospace and Defense Electronics59.9 106.3 166.2 123.9 22.6 14.2 5.5 166.2 
Engineered Systems86.4 9.0 95.4 95.0 — 0.2 0.2 95.4 
Total$310.2 $1,010.8 $1,321.0 $689.5 $287.3 $229.6 $114.6 $1,321.0 
(a) U.S. Government sale include sales as a prime contractor or subcontractor.
(b) Primarily commercial sales
(c) Geographic region by destination

Contract Liabilities
Balance at
Contract Liabilities by Balance Sheet Location (in millions)
April 2, 2023
January 1, 2023
Accrued liabilities$221.5 $187.6 
Other long-term liabilities20.7 20.2 
Total contract liabilities$242.2 $207.8 
The Company recognized revenue of $67.9 million during the three months ended April 2, 2023 from contract liabilities that existed at the beginning of year.
Remaining Performance Obligations
Remaining performance obligations represent the transaction price of firm orders for which work has not been performed as of the period end date and exclude unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity). As of April 2, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $3,198.8 million. The Company expects approximately 82% of remaining performance obligations to be recognized into revenue within the next twelve months, with the remaining 18% recognized thereafter.
Changes in Contract Estimates at Completion
For over time contracts using the cost-to-cost method, the Company has an Estimate at Completion (“EAC”) process in which management reviews the progress and execution of our performance obligations. This EAC process requires management judgment relative to assessing risks, estimating contract revenue, determining reasonably dependable cost estimates, and making assumptions for schedule and technical issues. The majority of revenue recognized over time uses an EAC process. Since certain contracts extend over a long period of time, the impact of revisions in cost and revenue estimates during the progress of work may adjust the current period earnings through a cumulative catch-up basis. This method recognizes, in the current period, the cumulative effect of the changes on current and prior quarters. Additionally, if the current contract estimate indicates a loss, a provision is made for the total anticipated loss in the period that it becomes evident. Contract cost and revenue estimates for significant contracts are generally reviewed and reassessed quarterly.
The net aggregate effects of these changes in estimates on contracts accounted for under the cost-to-cost method in the first three months of 2023 and 2022 was $2.9 million of favorable operating income and $7.6 million favorable operating income, respectively, with both years primarily related to favorable changes in estimates that impacted revenue, and, to a lesser degree, cost of sales. None of the effects of changes in estimates on any individual contract were material to the consolidated statements of income for any period presented.