XML 17 R6.htm IDEA: XBRL DOCUMENT
v3.5.0.2

Summary of Significant Accounting Policies | 9 Months Ended
--- | ---
Oct. 01, 2016
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies
A) | Basis of Presentation
The condensed consolidated financial statements have been prepared by The Middleby Corporation (the "company" or “Middleby”), pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements are unaudited and certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the company believes that the disclosures are adequate to make the information not misleading. These financial statements should be read in conjunction with the financial statements and related notes contained in the company's 2015 Form 10-K. The company’s interim results are not necessarily indicative of future full year results for the fiscal year 2016. In the opinion of management, the financial statements contain all adjustments, which are normal and recurring in nature, necessary to present fairly the financial position of the company as of October 1, 2016 and January 2, 2016, the results of operations for the three and nine months ended October 1, 2016 and October 3, 2015 and cash flows for the nine months ended October 1, 2016 and October 3, 2015. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses. Significant estimates and assumptions are used for, but are not limited to, allowances for doubtful accounts, reserves for excess and obsolete inventories, long-lived and intangible assets, warranty reserves, insurance reserves, income tax reserves and post-retirement obligations. Actual results could differ from the company's estimates.
B) | Non-Cash Share-Based Compensation
The company estimates the fair value of market-based stock awards and stock options at the time of grant and recognizes compensation cost over the vesting period of the awards and options. Non-cash share-based compensation expense was $6.2 million and $4.3 million for the third quarter periods ended October 1, 2016 and October 3, 2015, respectively. Non-cash share-based compensation expense was $17.3 million and $11.7 million for the nine months ended October 1, 2016 and October 3, 2015, respectively. During the first quarter ended April 4, 2015, the company issued restricted shares under its 2011 Stock Incentive Plan. These amounts are contingent on the attainment of certain performance objectives. The aggregate grant-date fair value of these awards was $31.0 million, based on the closing share price of the company's stock at the date of the grant.
C) | Income Taxes
As of January 2, 2016, the total amount of liability for unrecognized tax benefits related to federal, state and foreign taxes was approximately $14.4 million (of which $14.1 million would impact the effective tax rate if recognized) plus approximately $1.9 million of accrued interest and $3.8 million of penalties. The company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. As of October 1, 2016, the company recognized a tax expense of $1.4 million for unrecognized tax benefits related to current year tax exposures. It is reasonably possible that the amounts of unrecognized tax benefits associated with state, federal and foreign tax positions may decrease over the next twelve months due to expiration of a statute or completion of an audit. The company believes that it is reasonably possible that approximately $2.0 million of its remaining unrecognized tax benefits may be recognized over the next twelve months as a result of lapses of statutes of limitations. A summary of the tax years that remain subject to examination in the company’s major tax jurisdictions are:
United States - federal | 2012 – 2015
United States - states | 2006 – 2015
Australia | 2011 – 2015
Brazil | 2011 – 2015
Canada | 2009 – 2015
China | 2006 – 2015
Czech Republic | 2013 – 2015
Denmark | 2013 – 2015
France | 2013 – 2015
Germany | 2013 – 2015
India | 2013 – 2015
Ireland | 2010 – 2015
Italy | 2011 – 2015
Luxembourg | 2011 – 2015
Mexico | 2011 – 2015
Netherlands | 2004 – 2015
Philippines | 2013 – 2015
Poland | 2010 – 2015
Romania | 2006 – 2015
South Korea | 2011
Spain | 2012 – 2015
Sweden | 2009 – 2015
Switzerland | 2008 – 2015
Taiwan | 2011 – 2012
United Kingdom | 2014 – 2015
D) | Fair Value Measures
ASC 820 "Fair Value Measurements and Disclosures" defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into the following levels: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. Level 3 – Unobservable inputs based on our own assumptions. The company’s financial liabilities that are measured at fair value and are categorized using the fair value hierarchy are as follows (in thousands):
| Fair Value Level 1 |  | Fair Value Level 2 |  | Fair Value Level 3 |  | Total
As of October 1, 2016 |  |  |  |  |  |  |
Financial Liabilities: |  |  |  |  |  |  |
Interest rate swaps | $ | — |  |  | $ | 295 |  |  | $ | — |  |  | $ | 295 |
Contingent consideration | $ | — |  |  | $ | — |  |  | $ | 7,181 |  |  | $ | 7,181 |
As of January 2, 2016 |  |  |  |  |  |  |
Financial Liabilities: |  |  |  |  |  |  |
Interest rate swaps | $ | — |  |  | $ | 412 |  |  | $ | — |  |  | $ | 412 |
Contingent consideration | $ | — |  |  | $ | — |  |  | $ | 11,065 |  |  | $ | 11,065 |
The contingent consideration as of October 1, 2016 relates to the earnout provisions recorded in conjunction with the acquisitions of PES, Desmon, Goldstein Eswood and Induc. The contingent consideration as of January 2, 2016 relates to the earnout provisions recorded in conjunction with the acquisitions of Spooner Vicars, PES, Concordia, Desmon, Goldstein Eswood and Induc. The earnout provisions associated with these acquisitions are based upon performance measurements related to sales and earnings, as defined in the respective purchase agreements. On a quarterly basis the company assesses the projected results for each of the acquired businesses in comparison to the earnout targets and adjusts the liability accordingly. E) Consolidated Statements of Cash Flows Cash paid for interest was $15.7 million and $11.0 million for the nine months ended October 1, 2016 and October 3, 2015, respectively. Cash payments totaling $80.3 million and $64.7 million were made for income taxes for the nine months ended October 1, 2016 and October 3, 2015, respectively.

X
- References No definition available. + Details
Name: | us-gaap_AccountingPoliciesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for all significant accounting policies of the reporting entity. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=51655414&loc=d3e18861-107790 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51655414&loc=d3e18780-107790 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51655414&loc=d3e18726-107790 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=51655414&loc=d3e18743-107790 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=51655414&loc=d3e18854-107790 + Details
Name: | us-gaap_SignificantAccountingPoliciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration