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Commitments and Contingencies | 6 Months Ended
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Jun. 27, 2020
Commitments and Contingencies |
K. | Commitments and Contingencies
Contract Obligations The Company had outstanding total non-cancelable contract obligations of $225.1 million at June 27, 2020. These obligations are made up of advertising contracts of $62.6 million, equipment and machinery of $61.5 million, hops, barley and wheat totaling $52.3 million, ingredients of $35.8 million, and other commitments of $12.9 million. The Company has entered into contracts for the supply of a portion of its hops requirements. These purchase contracts extend through crop year 2025 and specify both the quantities and prices, denominated in U.S. Dollars, Euros, New Zealand Dollars, and British Pounds, to which the Company is committed. Hops purchase commitments outstanding at June 27, 2020 totaled $31.0 million, based on the exchange rates on that date. The Company does not use forward currency exchange contracts and intends to purchase future hops using the exchange rate at the time of purchase. The Company has entered into contracts for barley and wheat with three major suppliers. The contracts include crop year 2019 and 2020 and cover the Company’s barley, wheat, and malt requirements for 2020 and part of 2021. These purchase commitments outstanding at June 27, 2020 totaled $21.3 million. Currently, the Company brews and packages approximately 60% of its volume at Company-owned breweries. In the normal course of its business, the Company has historically entered into various production arrangements with other brewing companies. Pursuant to these arrangements, the Company supplies raw materials to those brewing companies, and incurs conversion fees for labor at the time the liquid is produced and packaged. During the second quarter of 2020, the Company amended an existing brewing services agreement to include an annual minimum commitment by the Company with a shortfall fee if the minimum is not met. The Company does not currently believe its ordered volumes will fall below the annual minimum commitments . The amendment extended the contract through December 31, 2024 and grants the Company the right to extend the agreement beyond the December 31, 2024 termination date on an annual basis through December 31, 2035 at a $1 million annual renewal rate. The amendment required the Company to pay $8 million in the second quarter of 2020 for capital improvements at the third - party’s brewing facilities. As of June 27, 2020, the Company had prepaid brewing service fees of $6.4 million in prepaid expenses and other current assets and $22.8 million in other assets, long - term. The Company plans to expense the total amount of $29.2 million over the contract period ending December 31, 2024. Subsequent to June 27, 2020, the Company entered into contracts for equipment and machinery of $12.3 million in order to increase production at Company-owned breweries. The Company is in the process of assessing the impact the COVID-19 pandemic will have on its future commitments and contingencies but does not believe that the future commitments will be materially impacted. Litigation The Company is not a party to any pending or threatened litigation, the outcome of which would be expected to have a material adverse effect upon its financial condition or the results of its operations. In general, while the Company believes it conducts its business appropriately in accordance with laws, regulations and industry guidelines, claims, whether or not meritorious, could be asserted against the Company that might adversely impact the Company’s results.

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- Definition The entire disclosure for commitments and contingencies. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -URI http://asc.fasb.org/topic&trid=2127136 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -URI http://asc.fasb.org/topic&trid=2144648 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -SubTopic 10 -Section 50 -Paragraph 4 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=121559207&loc=d3e25336-109308 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -SubTopic 10 -Section 50 -Paragraph 4 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=121559207&loc=d3e25336-109308 + Details
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