Basis of Presentation

3 Months Ended

Nov. 30, 2019

Unless the context otherwise requires, the use of the terms "Winnebago," "WGO," "we," "us," and "our" in these Notes to Condensed Consolidated Financial Statements refers to Winnebago Industries, Inc. and its wholly-owned subsidiaries.

In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments necessary for a fair presentation as prescribed by accounting principles generally accepted in the United States (“GAAP”). All adjustments were comprised of normal recurring adjustments, except as noted in these Notes to Condensed Consolidated Financial Statements.

Interim results are not necessarily indicative of the results to be expected for the full year. The interim Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019.

Fiscal Period

We follow a 52-/53-week fiscal year, ending the last Saturday in August. Fiscal 2020 is a 52-week year, while Fiscal 2019 was a 53-week year. The extra (53rd) week in Fiscal 2019 was recognized in our fourth quarter.

Subsequent Events

In preparing the accompanying unaudited Condensed Consolidated Financial Statements, we evaluated subsequent events for potential recognition and disclosure through the date of this filing. There were no material subsequent events, except for the item described below.

Dividend

On December 18, 2019, our Board of Directors declared a quarterly cash dividend of $0.11 per share payable on January 29, 2020 to common stockholders of record at the close of business on January 15, 2020.

Recently Adopted Accounting Pronouncements

We adopted Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842), as of September 1, 2019, using the modified retrospective basis as of the beginning of the period of adoption. In addition, we elected the package of practical expedients permitted under the transition guidance with the new standard, which among other things, allowed us to carry forward the historical lease classification, and we elected the hindsight practical expedient. Adoption of the new standard resulted in the recording of net lease assets and lease liabilities of $33.8 million and $33.4 million, respectively, as of September 1, 2019. The standard did not materially impact our consolidated net earnings and had no impact on our cash flows.

The following table details line items impacted by the adoption of this ASU within the Condensed Consolidated Balance Sheets as of September 1, 2019:



(in thousands)	August 31, 2019 As Reported		ASU 2016-02 Adjustment on September 1, 2019			September 1, 2019 As Adjusted
Assets
Other intangible assets, net	$	256,082	$	(1,310	)	$	254,772
Operating lease assets	—		33,811			33,811
Total assets	$	1,104,231	$	32,501		$	1,136,732

Liabilities and Stockholders' Equity
Accrued expenses: Other	$	13,678	$	1,258		$	14,936
Total current liabilities	197,744		1,258			199,002
Operating lease liabilities	—		31,243			31,243
Total non-current liabilities	274,275		31,243			305,518
Total liabilities and stockholders' equity	$	1,104,231	$	32,501		$	1,136,732

Also, in the first quarter of Fiscal 2020, we adopted ASU 2017-12, Derivatives and Hedging (Topic 815), which improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. The adoption of this standard did not materially impact our Condensed Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and has since issued additional amendments. ASU 2016-13 will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. The standard is effective for annual reporting periods beginning after December 15, 2019 (our Fiscal 2021), including interim periods within those annual reporting periods. We expect to adopt the new guidance in the first quarter of Fiscal 2021, and we do not expect a material impact to our consolidated financial statements.