Restatement of Condensed Consolidated Financial Statements (Tables)

9 Months Ended

Jun. 30, 2014

Restatement of Condensed Consolidated Financial Statements

Summary of impacts of the restatement adjustments on the Company's previously reported consolidated retained earnings

The following tables present the summary impacts of the restatement adjustments on our previously reported consolidated retained earnings at September 30, 2012 and consolidated net income for the three and nine months ended June 30, 2013 (in thousands):

Retained earnings at September 30, 2012 - As previously reported	$	715,043
Adjustments	6,290
Retained earnings at September 30, 2012 - As restated	$	721,333

Summary of impacts of the restatement adjustments on the Company's previously reported consolidated net income

The following tables present the summary impacts of the restatement adjustments on our previously reported consolidated retained earnings at September 30, 2012 and consolidated net income for the three and nine months ended June 30, 2013 (in thousands):

	Nine Months Ended		Three Months Ended
	June 30,		June 30,
	2013		2013
Net Income - As previously reported	$	57,968	$	18,364
Adjustments	4,304		17
Net Income - As restated	$	62,272	$	18,381

Schedule of restatement of balance sheet

	Condensed Consolidated Balance Sheet September 30, 2013
	Previously Reported			Adjustments			As Restated
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	203,892		$	—		$	203,892
Restricted cash	69,381			—			69,381
Marketable securities	4,055			—			4,055
Accounts receivable - net	376,143			2,859			379,002
Recoverable income taxes	7,885			—			7,885
Inventories - net	54,400			5,346			59,746
Deferred income taxes and other current assets	18,638			—			18,638
Total current assets	734,394			8,205			742,599
Long-term contract receivables	19,249			(228		)	19,021
Long-term capitalized costs	75,520			(6,557		)	68,963
Property, plant and equipment - net	56,305			—			56,305
Deferred income taxes	19,322			—			19,322
Goodwill	136,094			—			136,094
Purchased intangibles - net	57,542			—			57,542
Other assets	9,772			—			9,772
	$	1,108,198		$	1,420		$	1,109,618
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	39,016		$	1,294		$	40,310
Customer advances	103,187			(18,880		)	84,307
Accrued compensation and other current liabilities	107,330			1,923			109,253
Income taxes payable	8,076			4,655			12,731
Current portion of long-term debt	557			—			557
Total current liabilities	258,166			(11,008		)	247,158
Long-term debt	102,363			—			102,363
Other long-term liabilities	42,742			275			43,017
Shareholders’ equity:
Common stock	15,825			—			15,825
Retained earnings	728,424			11,578			740,002
Accumulated other comprehensive loss	(3,378		)	575			(2,803		)
Treasury stock at cost	(36,078		)	—			(36,078		)
Shareholders’ equity related to Cubic	704,793			12,153			716,946
Noncontrolling interest in variable interest entity	134			—			134
Total shareholders’ equity	704,927			12,153			717,080
	$	1,108,198		$	1,420		$	1,109,618

Schedule of restatement of income

	Condensed Consolidated Statement of Income									Condensed Consolidated Statement of Income
	Nine Months Ended June 30, 2013									Three Months Ended June 30, 2013
	Previously						As			Previously						As
	Reported			Adjustments			Restated			Reported			Adjustments			Restated
	(amounts in thousands, except per share data)									(amounts in thousands, except per share data)
Net sales:
Products	$	432,226		$	(2,790	)	$	429,436		$	131,557		$	(3,875	)	$	127,682
Services	585,895			5,300			591,195			208,888			656			209,544
	1,018,121			2,510			1,020,631			340,445			(3,219		)	337,226
Costs and expenses:
Products	311,964			(1,921		)	310,043			93,946			(2,935		)	91,011
Services	462,075			(406		)	461,669			164,458			(180		)	164,278
Selling, general and administrative	126,447			(54		)	126,393			44,130			—			44,130
Restructuring costs	6,198			—			6,198			114			—			114
Research and development	19,346			—			19,346			6,426			—			6,426
Amortization of purchased intangibles	12,192			—			12,192			4,362			—			4,362
	938,222			(2,381		)	935,841			313,436			(3,115		)	310,321
Operating income	79,899			4,891			84,790			27,009			(104		)	26,905
Other income (expense):
Interest and dividend income	1,279			—			1,279			530			—			530
Interest expense	(2,438		)	(9		)	(2,447		)	(922		)	(3		)	(925		)
Other income (expense) - net	(764		)	—			(764		)	(813		)	—			(813		)
Income before income taxes	77,976			4,882			82,858			25,804			(107		)	25,697
Income taxes	19,859			578			20,437			7,416			(124		)	7,292
Net income	58,117			4,304			62,421			18,388			17			18,405
Less noncontrolling interest in income of VIE	149			—			149			24			—			24
Net income attributable to Cubic	$	57,968		$	4,304		$	62,272		$	18,364		$	17		$	18,381
Net income per share attributable to Cubic:
Basic	$	2.17		$	0.16		$	2.33		$	0.69		$	0.00		$	0.69
Diluted	$	2.17		$	0.16		$	2.33		$	0.69		$	0.00		$	0.69
Dividends per common share	$	0.12		$	—		$	0.12		$	—		$	—		$	—
Weighted average shares used in per share calculations:
Basic	26,736			—			26,736			26,736			—			26,736
Diluted	26,745			—			26,745			26,762			—			26,762

Schedule of restatement of comprehensive income

	Condensed Consolidated Statement of Comprehensive Income									Condensed Consolidated Statement of Comprehensive Income
	Nine Months Ended June 30, 2013									Three Months Ended June 30, 2013
	Previously						As			Previously					As
	Reported			Adjustments			Restated			Reported			Adjustments		Restated
	(in thousands)									(in thousands)
Net income	$	58,117		$	4,304		$	62,421		$	18,388		$	17	$	18,405
Other comprehensive income:
Foreign currency translation	(15,185		)	(580		)	(15,765		)	(1,872		)	96		(1,776		)
Net unrealized gain (loss) on available-for-sale securities, net of tax	(5		)	—			(5		)	(5		)	—		(5		)
Change in net unrealized gains/losses from cash flow hedges:
Change in fair value of cash flow hedges, net of tax	3,557			—			3,557			4,894			—		4,894
Adjustment for net gains/losses realized and included in net income, net of tax	1,146			—			1,146			(188		)	—		(188		)
Total change in unrealized gains/losses realized from cash flow hedges, net of tax	4,703			—			4,703			4,706			—		4,706
Total other comprehensive income (loss)	(10,487		)	(580		)	(11,067		)	2,829			96		2,925
Total comprehensive income (loss)	47,630			3,724			51,354			21,217			113		21,330

Schedule of restatement of cash flows

	Condensed Consolidated Statement of Cash Flows									Condensed Consolidated Statement of Cash Flows
	Nine Months Ended June 30, 2013									Three Months Ended June 30, 2013
	Previously						As			Previously						As
	Reported			Adjustments			Restated			Reported			Adjustments			Restated
	(in thousands)									(in thousands)
Operating Activities:
Net income	$	58,117		$	4,304		$	62,421		$	18,388		$	17		$	18,405
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	18,014			—			18,014			6,417			—			6,417
Share-based compensation expense	1,634			—			1,634			1,575			—			1,575
Changes in operating assets and liabilities, net of effects from acquisitions	(84,595		)	(4,304		)	(88,899		)	22,761			(17		)	22,744
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(6,830		)	—			(6,830		)	49,141			—			49,141
Investing Activities:
Acquisition of businesses, net of cash acquired	(60,649		)	—			(60,649		)	(7,377		)	—			(7,377		)
Net additions to property, plant and equipment	(6,209		)	—			(6,209		)	(2,348		)	—			(2,348		)
Purchases of short-term investments	(4,054		)	—			(4,054		)	(4,054		)	—			(4,054		)
NET CASH USED IN INVESTING ACTIVITIES	(70,912		)	—			(70,912		)	(13,779		)	—			(13,779		)
Financing Activities:
Proceeds from short-term borrowings	70,000			—			70,000			—			—			—
Principal payments on short-term borrowings	(70,000		)	—			(70,000		)	(25,000		)	—			(25,000		)
Proceeds from long-term borrowings	100,000			—			100,000			50,000			—			50,000
Principal payments on long-term debt	(8,407		)	—			(8,407		)	(134		)	—			(134		)
Contingent consideration payments related to acquisitions of businesses	(224		)	—			(224		)	(224		)	—			(224		)
Dividends paid to shareholders	(3,208		)	—			(3,208		)	—			—			—
Change in restricted cash	(104		)	—			(104		)	(20		)	—			(20		)
NET CASH PROVIDED BY FINANCING ACTIVITIES	88,057			—			88,057			24,622			—			24,622
Effect of exchange rates on cash	(10,131		)	—			(10,131		)	3,862			—			3,862
NET INCREASE IN CASH AND CASH EQUIVALENTS	184			—			184			63,846			—			63,846
Cash and cash equivalents at the beginning of the period	212,267			—			212,267			148,605			—			148,605
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	$	212,451		$	—		$	212,451		$	212,451		$	—		$	212,451