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Significant Accounting Matters | 12 Months Ended
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Feb. 28, 2018
Significant Accounting Matters |
Significant Accounting Matters | Note 3 – Significant Accounting Matters Fiscal 2018 - On December 20, 2017, we completed the divestiture of the Nutritional Supplements segment through the sale of Healthy Directions LLC and its subsidiaries to Direct Digital, LLC. We have presented the Nutritional Supplements segment in the accompanying consolidated financial statements as a discontinued operation. For more information see Note 4 to these consolidated financial statements. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law. Among other changes, the Tax Act lowered the U.S. corporate income tax rate from 35% to 21% and established a modified territorial system requiring mandatory deemed repatriation tax on undistributed earnings of certain foreign subsidiaries. The rate change is effective at the beginning of calendar year 2018 and, as a result, we have a blended U.S. federal statutory tax rate of 32.7% for fiscal 2018. As a result of the enactment, we have recorded a provisional tax expense of $17.9 million related to the one-time remeasurement of our U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, the one-time repatriation tax applied to our undistributed foreign earnings, and the impact of executive compensation that is no longer deductible under the Tax Act. On an ongoing basis, we expect that the Tax Act will result in a reduction to our annual effective tax rate of approximately one percentage point, primarily due to the reduction in the U.S. corporate income tax rate. For more information see Note 21 to these consolidated financial statements. Fiscal 2017 – There were no significant accounting matters for fiscal 2017. Fiscal 2016 - During fiscal 2016, as a result of a devaluation of the Venezuelan official rate, continued economic instability from declines in oil prices and the declaration of an economic emergency, among other factors, we discontinued the use of the official exchange rate and adopted a market-based exchange rate for the remeasurement of our Venezuelan financial statements. As a result, we recorded a charge of $9.57 million (before and after tax) from the re-measurement of our Venezuelan monetary assets and liabilities at February 29, 2016 at the new rate. In addition to re-measuring our monetary holdings in Venezuela, we recorded $9.16 million of non-cash impairment charges (before and after tax) with respect to inventory and property and equipment in order to reflect their respective estimated net realizable and fair values as of February 29, 2016. The following table summarizes the financial impact of these adjustments: IMPACT OF VENEZUELAN RE-MEASURMENT RELATED CHARGES
|  | Balance at February 29, 2016
(in thousands) |  | Before Adjustment |  | Adjustments |  | After Adjustment |  | Location of Income Statement Impact
Cash and cash equivalents |  | $ | 1,302 |  | $ | (1,292) |  | $ | 10 |  | SG&A
Other net assets, principally working capital other than inventory |  |  | 8,120 |  |  | (8,284) |  |  | (164) |  | SG&A
Inventory |  |  | 9,378 |  |  | (9,078) |  |  | 300 |  | Cost of goods sold
Property and equipment, net |  |  | 82 |  |  | (79) |  |  | 3 |  | SG&A
Net investment in Venezuelan operations |  | $ | 18,882 |  | $ | (18,733) |  | $ | 149 |  |

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