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Recent Accounting Pronouncements | 12 Months Ended
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Dec. 31, 2016
Accounting Changes And Error Corrections [Abstract] |
Recent Accounting Pronouncements |
Note 3. | Recent Accounting Pronouncements
Recently adopted accounting pronouncements In April 2015, the FASB issued guidance to simplify the presentation of debt issuance costs. This guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discount presentation. This guidance is effective for financial statements for fiscal years beginning after December 15, 2015, and interim periods within those years. This guidance is applied on a retrospective basis at adoption and the disclosures for a change in an accounting principle apply. This guidance was adopted as of January 3, 2016 (the first day of our fiscal 2016) with application of the provisions retrospectively. Debt issuance costs associated with line-of-credit arrangements is not addressed by this guidance. The company’s accounts receivable securitization facility and credit facility, discussed in Note 12, Debt, Lease and Other Commitments, are excluded from this guidance and are still presented as other long-term assets in the Consolidated Balance Sheet. As a result of adopting this standard, the debt issuance costs of our other debt obligations were reclassified as a reduction to the carrying amount of the debt liability for the Consolidated Balance Sheets as of December 31, 2016 and January 2, 2016. The balance sheet as of January 2, 2016 was retrospectively adjusted, which resulted in a $3.9 million decrease to other non-current assets and to total long-term debt and capital lease obligations. In November 2015, the FASB issued guidance that requires entities to report deferred tax liabilities and assets as noncurrent in a classified statement of financial position. The previous requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by this guidance. This guidance is effective for fiscal years beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The company adopted this standard for the annual period beginning on January 3, 2016 (the first day of our fiscal 2016) and applied it retrospectively. As a result of adopting this standard, all deferred tax assets and liabilities have been classified as noncurrent for the Consolidated Balance Sheets as of December 31, 2016 and January 2, 2016. The balance sheet as of January 2, 2016 was retrospectively adjusted, which resulted in a $37.2 million decrease in the current deferred income tax asset balance and in the long-term deferred income tax liability balance. The table below presents the adjustments for each of the line items impacted for these pronouncements (amounts in thousands):
|  |  |  |  | As Adjusted |
| January 2, 2016 |  |  | January 2, 2016 |
ASSETS |  |  |  |  |  |  |
Deferred taxes | $ | 37,207 |  |  | $ | — |
Total current assets | $ | 537,515 |  |  | $ | 500,308 |
Other assets | $ | 11,791 |  |  | $ | 7,881 |
Total assets | $ | 2,885,168 |  |  | $ | 2,844,051 |
LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |  |  |  |  |
Total long-term debt and capital lease obligations | $ | 933,932 |  |  | $ | 930,022 |
Deferred taxes | $ | 183,669 |  |  | $ | 146,462 |
Total other long-term liabilities | $ | 304,416 |  |  | $ | 267,209 |
Total liabilities and stockholders' equity | $ | 2,885,168 |  |  | $ | 2,844,051 |
In September 2015, the FASB issued guidance that entities that have reported provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs and during the measurement period have an adjustment to provisional amounts recognized. This update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This guidance also requires that an entity present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This guidance is effective for our fiscal 2016. The guidance is applied prospectively to adjustments to provisional amounts that occur after the effective date of the guidance. The potential impact of the guidance on the company’s Consolidated Financial Statements will only be known after a measurement period adjustment for an acquisition is recognized. The adoption of this guidance is presented in Note 7, Goodwill and Other Intangible Assets, for the measurement period adjustments related to the acquisitions discussed in Note 8, Acquisitions, below. In May, 2015, the FASB issued guidance to eliminate the requirement to disclose the level of the fair value hierarchy for pension plan assets for which the fair value is measured at net asset value using the practical expedient. Investments for which net asset value is fair value, and not a practical expedient, must still be included in the fair value table. The company’s assets reported at net asset value are included as a reconciling item between the fair value hierarchy disclosure and total plan assets. See Note 19, Postretirement Plans, for disclosures related to our pension plan assets. In August, 2014 the FASB issued guidance that requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments provide a definition of the term substantial doubt, require an evaluation every reporting period including interim periods, provide principles for considering the mitigating effect of management’s plans, require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, require an express statement and other disclosures when substantial doubt is not alleviated, and require an assessment for a period of one year after the date of that the financial statements are issued. The company adopted the updated standard in the fourth quarter of fiscal 2016. This guidance required additional controls at adoption but did not have a material impact on the Consolidated Financial Statements. Accounting pronouncements not yet adopted In May 2014, the Financial Accounting Standards Board (the “FASB”) issued guidance for recognizing revenue in contracts with customers. This guidance requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. There are five steps outlined in the guidance to achieve this core principle. This guidance was originally effective January 1, 2017, the first day of our fiscal 2017. In July 2015, the FASB issued a deferral for one year, making the effective date December 31, 2017, the first day of our fiscal 2018. In March 2016, the FASB amended the initial guidance to clarify the implementation guidance on principal versus agent considerations. In April 2016, the FASB amended the initial guidance to clarify the identification of performance conditions and the licensing implementation guidance. In May 2016, the FASB amended the initial guidance to update certain narrow scopes within the revenue recognition guidance. Early application is permitted, but not before January 1, 2017. Entities will have the option to apply the final standard retrospectively or use a modified retrospective method, recognizing the cumulative effect of the standards in retained earnings at the date of initial application. An entity will not restate prior periods if it uses the modified retrospective method, but will be required to disclose the amount by which each financial statement line item is affected in the current reporting period by the application of the standard as compared to the guidance in effect prior to the change, as well as reasons for significant changes. The company intends to adopt the updated standard in the first quarter of fiscal 2018. The company is currently in the process of assessing the adoption methodology to apply. The company is currently evaluating the impact that implementing this standard will have on its financial statements and disclosures and whether the effect will be material to our revenue. Our initial review found three areas that will continue to be studied through fiscal 2017. The company's PBS sales, stale accounting, and distributor discounts are under review for either how to account for PBS inventory, estimated stale charges, or whether an item is reported at net or gross. These are not intended to be a complete inventory of the potentially impactful types of revenue, but we have identified these for further study. More impactful revenue sources may be discovered as we continue our review. The company does not typically enter into long-term revenue contracts and does not anticipate those areas to be material. The company does not anticipate significant changes to our systems or processes upon adoption. As of December 31, 2016, we have not selected a transition method. In July 2015, the FASB issued guidance that entities should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. This guidance must be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. This guidance will impact the company during our first quarter of fiscal 2017. We anticipate that an adjustment to our inventory reported at the end of our first quarter in fiscal 2017 may be required and will be impacted by the inclusion of more components for the net realizable value standard. In February 2016, the FASB issued guidance that requires an entity to recognize lease liabilities and a right-of-use asset for virtually all leases (other than those that meet the definition of a short-term lease) on the balance sheet and to disclose key information about the entity’s leasing arrangements. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with earlier adoption permitted. This guidance must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief. The company intends to adopt the updated standard in the first quarter of fiscal 2019. The company currently has significant operating leases with our fiscal 2016 lease expense totaling $97.4 million. The company is evaluating the potential impact of this guidance on our Consolidated Financial Statements. In March 2016, the FASB issued guidance to simplify several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, and early adoption is permitted. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value will be adopted using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when the employer withholds shares to meet the minimum statutory will not impact the company since we already report cash flows according to the new guidance. The recognition of excess tax benefits and deficiencies in the income statement will be applied prospectively. The company will adopt the presentation of excess tax benefits on the statement of cash flows under the retrospective transition method. At adoption of this guidance during the first quarter of our fiscal 2017, we anticipate the impact to our first quarter Consolidated Financial Statements to reflect a tax shortfall of $3.0 million to $3.3 million that will be recognized as income tax expense at vesting of our performance-based share-based payment awards. Approximately 1.7 million non-qualified stock options related to the 2011 award are outstanding with an exercise price of $10.87 and an expiration date of February 10, 2018. If those options are exercised during fiscal 2017 at an amount in excess of $10.87, a tax windfall will be recognized as an income tax benefit. The company intends to record forfeitures as incurred. See Note 16, Stock-Based Compensation, for details of our awards. In August 2016, the FASB issued guidance on the classification of certain cash receipts and payments in the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The guidance must be applied retrospectively to all periods presented but may be applied prospectively if retrospective application would be impracticable. The company is currently evaluating the impact that the new guidance will have on our Consolidated Financial Statements. In January 2017, the FASB issued guidance to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is effective for annual period beginning after December 15, 2017, including interim periods within those periods. This guidance shall be applied prospectively at adoption. This guidance will impact the company’s assessment of the acquisition of either an asset or a business beginning in our fiscal 2018. In January 2017, the FASB issued guidance to simplify the accounting for goodwill impairment. The guidance removed Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Companies will still have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. This guidance will be applied prospectively. Companies are required to disclose the nature of and reason for the change in accounting principle upon transition. That disclosure shall be provided in the first annual period and in the interim period within the first annual period when the company adopts this guidance. This is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted after January 1, 2017. The company is currently evaluating when this guidance will be adopted and the impact on our Consolidated Financial Statements. We have reviewed other recently issued accounting pronouncements and concluded that they are either not applicable to our business or that no material effect is expected upon future adoption.

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