Basis Of Presentation And Summary Of Significant Accounting Policies | 12 Months Ended |
Sep. 28, 2013 |
Basis Of Presentation And Guarantor And Non-Guarantor Financial Information [Abstract] | ' |
Basis Of Presentation And Summary Of Significant Accounting Policies | ' |
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1. Basis of Presentation and Summary of Significant Accounting Policies |
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Background |
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Berry Plastics Group, Inc. ("Berry" or the "Company") is a leading provider of value-added plastic consumer packaging and engineered materials with a track record of delivering high-quality customized solutions to our customers. Representative examples of our products include drink cups, thin-wall containers, bottles, specialty closures, prescription vials, specialty films, adhesives and corrosion protection materials. We sell our solutions predominantly into consumer-oriented end-markets, such as food and beverage, healthcare and personal care. |
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Initial Public Offering, Stock Split and TRA |
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In October 2012, the Company completed an initial public offering and sold 29,411,764 shares of common stock at a public offering price of $16.00 per share. In conjunction with the initial public offering the Company executed a 12.25 for one stock split of the Company's common stock. The effect of the stock split on outstanding shares and earnings per share has been retroactively applied to all periods presented. Transaction fees totaling $33 million were included in Paid-in capital on the Consolidated Balance Sheets. Proceeds, net of transaction fees, of $438 million and cash from operations were used to repurchase $455 million of 11% Senior Subordinated Notes due September 2016. As part of the repurchase the Company paid premiums of $13 million and wrote-off $3 million of deferred financing fees. |
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In connection with the initial public offering, the Company entered into an income tax receivable agreement ("TRA") that provides for the payment to pre-initial public offering stockholders, option holders and holders of our stock appreciation rights, 85% of the amount of cash savings, if any, in U.S. federal, foreign, state and local income tax that are actually realized (or are deemed to be realized in the case of a change of control) as a result of the utilization of our and our subsidiaries' net operating losses attributable to periods prior to the initial public offering. The Company expects to pay between $313 million and $360 million in cash related to this agreement. This range is based on the Company's assumptions using various items, including valuation analysis and current tax law. The Company recorded an obligation of $313 million which was recognized as a reduction of Paid-in capital on the Consolidated Balance Sheets. Changes in the estimated TRA obligation will be recorded as Other expense (income) in the Consolidated Statement of Operations. Payments under the TRA are not conditioned upon the parties' continued ownership of the Company. |
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Secondary Public Offerings |
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In April 2013, we completed a secondary public offering in which certain funds affiliated with Apollo Global Management, LLC ("Apollo") and Graham Partners ("Graham") sold 18,975,000 shares of common stock at $17.00 per share, which included 2,475,000 shares purchased by the underwriters upon the exercise in full of their option to purchase additional shares. The selling stockholders received proceeds from the offering, which, net of underwriting fees, totaled $311 million. The Company received no proceeds and incurred fees of $1 million related to this offering. |
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In July 2013, we completed a secondary public offering in which certain funds affiliated with Apollo and Graham sold 17,250,000 shares of common stock at $21.63 per share, which included 2,250,000 shares purchased by the underwriters upon the exercise in full of their option to purchase additional shares. The selling stockholders received proceeds from the offering, which, net of underwriting fees, totaled $360 million. The Company received no proceeds and incurred fees of $1 million related to this offering. |
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Basis of Presentation |
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Periods presented in these financial statements include fiscal periods ending September 28, 2013 ("fiscal 2013"), September 29, 2012 ("fiscal 2012"), and October 1, 2011 ("fiscal 2011"). Berry, through its wholly-owned subsidiaries operates in four primary segments: Rigid Open Top, Rigid Closed Top, Engineered Materials, and Flexible Packaging. The Company's customers are located principally throughout the United States, without significant concentration in any one region or with any one customer. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. The Company's fiscal year is based on fifty-two or fifty-three week periods. The Company has evaluated subsequent events through the date the financial statements were issued. |
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Reclassification Adjustments |
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Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. The Company historically presented Other operating expenses in its Consolidated Statements of Operations, which consisted predominately of business optimization costs and management fees to affiliates of Apollo and Graham. The Company has eliminated separate presentation of Other operating expenses from its Consolidated Statements of Operations to better align with the way the Company is reviewing its operating results. The Company incurred business optimization costs of $16 million, $32 million and $31 million in fiscal 2013, fiscal 2012 and fiscal 2011, respectively and are included in Cost of goods sold. The Company recorded management fees of $9 million in fiscal 2012 and fiscal 2011, respectively and are included in Selling, general and administrative expense. The Company's management fee agreement with Apollo and other investors terminated upon completion of the initial public offering. |
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Consolidation |
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The consolidated financial statements include the accounts of Berry and its subsidiaries, all of which includes our wholly owned and majority owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Where our ownership of consolidated subsidiaries is less than 100% the non-controlling interests are reflected in stockholders' equity. |
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Revenue Recognition |
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Revenue from the sales of products is recognized at the time title and risks and rewards of ownership pass to the customer (either when the products reach the free-on-board shipping point or destination depending on the contractual terms), there is persuasive evidence of an arrangement, the sales price is fixed and determinable and collection is reasonably assured. Provisions for certain rebates, sales incentives, trade promotions, coupons, product returns and discounts to customers are accounted for as reductions in gross sales to arrive at net sales. In accordance with the Revenue Recognition standards of the Accounting Standards Codification ("Codification" or "ASC"), the Company provides for these items as reductions of revenue at the later of the date of the sale or the date the incentive is offered. These provisions are based on estimates derived from current program requirements and historical experience. |
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Shipping, handling, purchasing, receiving, inspecting, warehousing, and other costs of distribution are presented in Cost of goods sold in the Consolidated Statements of Operations. The Company classifies amounts charged to its customers for shipping and handling in Net sales in the Consolidated Statements of Operations. |
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Vendor Rebates, Purchases of Raw Materials and Concentration of Risk |
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The Company receives consideration in the form of rebates from certain vendors. The Company accrues these as a reduction of inventory cost as earned under existing programs, and reflects as a reduction of cost of goods sold at the time that the related underlying inventory is sold to customers. |
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The largest supplier of the Company's total resin material requirements represented approximately 20% of purchases in fiscal 2013. The Company uses a variety of suppliers to meet its resin requirements. |
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Research and Development |
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Research and development costs are expensed when incurred. The Company incurred research and development expenditures of $28 million, $25 million, and $20 million in fiscal 2013, 2012, and 2011, respectively. |
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Stock-Based Compensation |
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The compensation guidance of the FASB requires that the compensation cost relating to share-based payment transactions be recognized in financial statements based on alternative fair value models. The share-based compensation cost is measured based on the fair value of the equity or liability instruments issued. The Company's share-based compensation plan is more fully described in Note 12. The Company recorded total stock compensation expense of $16 million, $2 million, and $2 million for fiscal 2013, 2012 and 2011, respectively. |
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In August 2013, the Company recorded an $8 million stock compensation charge related to certain modifications to the Berry Plastics Group Inc. 2006 Equity Incentive Plan and the Berry Plastics Group, Inc. 2012 Long-Term Incentive Plan (collectively, the "Plans"), and amended outstanding non-qualified stock option agreements to reflect such modifications. The modifications, include (i) accelerated vesting of all unvested options upon an employee's death or permanent disability (ii) in the event of an employee's qualified retirement, continuation of the normal vesting period applicable to the retiree's unvested options, as well as an extension of the exercise period to the end of the original ten-year term of the retiree's vested options and (iii) all unvested options and stock appreciation rights that were subject to performance-based vesting criteria as of January 1, 2013 (excluding certain IRR performance-based options) were modified to time-based vesting. |
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The Company utilizes the Black-Scholes option valuation model for estimating the fair value of the stock options. The model allows for the use of a range of assumptions. Expected volatilities utilized in the Black-Scholes model are based on implied volatilities from traded stocks of peer companies. Similarly, the dividend yield is based on historical experience and the estimate of future dividend yields. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The Company's options have a ten year contractual life. For purposes of the valuation model in fiscal 2013, the Company used the simplified method for determining the granted options expected lives. The fair value for options granted has been estimated at the date of grant using a Black-Scholes model, with the following weighted average assumptions: |
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| 2013 | | 2012 | | | 2011 | | | | | | | | | |
Risk-free interest rate | 0.6 | % | 0.6 - 0.9 | % | | 1.3 | % | | | | | | | | |
Dividend yield | 0 | % | 0 | % | | 0 | % | | | | | | | | |
Volatility factor | 0.38 | | 0.38 | | | .32-.34 | | | | | | | | | |
Expected option life | 7 years | | 5 years | | | 5 years | | | | | | | | | |
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Foreign Currency |
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For the non-U.S. subsidiaries that account in a functional currency other than U.S. Dollars, assets and liabilities are translated into U.S. Dollars using period-end exchange rates. Sales and expenses are translated at the average exchange rates in effect during the period. Foreign currency translation gains and losses are included as a component of Accumulated other comprehensive income (loss) within stockholders' equity. Gains and losses resulting from foreign currency transactions, the amounts of which are not material in any period presented are included in the Consolidated Statements of Operations. |
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Cash and Cash Equivalents |
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All highly liquid investments purchased with a maturity of three months or less from the time of purchase are considered to be cash equivalents. |
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Allowance for Doubtful Accounts |
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The Company's accounts receivable and related allowance for doubtful accounts are analyzed in detail on a quarterly basis and all significant customers with delinquent balances are reviewed to determine future collectibility. The determinations are based on legal issues (such as bankruptcy status), past history, current financial and credit agency reports, and the experience of the credit representatives. Reserves are established in the quarter in which the Company makes the determination that the account is deemed uncollectible. The Company maintains additional reserves based on its historical bad debt experience. The following table summarizes the activity for fiscal 2013, 2012 and 2011 for the allowance for doubtful accounts: |
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| | 2013 | | | 2012 | | | 2011 | | | | | | | |
Allowance for doubtful accounts, beginning | $ | 3 | | $ | 4 | | $ | 4 | | | | | | | |
Bad debt expense | | 1 | | | 1 | | | 1 | | | | | | | |
Write-offs against allowance | | (1 | ) | | (2 | ) | | (1 | ) | | | | | | |
Allowance for doubtful accounts, ending | $ | 3 | | $ | 3 | | $ | 4 | | | | | | | |
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Inventories |
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Inventories are stated at the lower of cost or market and are valued using the first-in, first-out method. Management periodically reviews inventory balances, using recent and future expected sales to identify slow-moving and/or obsolete items. The cost of spare parts inventory is charged to manufacturing overhead expense when incurred. We evaluate our reserve for inventory obsolescence on a quarterly basis and review inventory on-hand to determine future salability. We base our determinations on the age of the inventory and the experience of our personnel. We reserve inventory that we deem to be not salable in the quarter in which we make the determination. We believe, based on past history and our policies and procedures, that our net inventory is salable. Inventory as of fiscal 2013 and 2012 was: |
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Inventories: | | 2013 | | 2012 | | | | | | | | | | | |
Finished goods | $ | 335 | $ | 306 | | | | | | | | | | | |
Raw materials | | 240 | | 229 | | | | | | | | | | | |
| $ | 575 | $ | 535 | | | | | | | | | | | |
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Property, Plant and Equipment |
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Property, plant and equipment are stated at cost. Depreciation is computed primarily by the straight-line method over the estimated useful lives of the assets ranging from 15 to 25 years for buildings and improvements two to 10 years for machinery, equipment, and tooling and over the term of the agreement for capital. Leasehold improvements are depreciated over the shorter of the useful life of the improvement or the lease term. Repairs and maintenance costs are charged to expense as incurred. The Company capitalized interest of $5 million, $5 million, and $3 million in fiscal 2013, 2012, and 2011, respectively. Property, plant and equipment as of fiscal 2013 and 2012 was: |
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Property, plant and equipment: | | 2013 | | | 2012 | | | | | | | | | | |
Land, buildings and improvements | $ | 302 | | $ | 281 | | | | | | | | | | |
Equipment and construction in progress | | 2,241 | | | 2,019 | | | | | | | | | | |
| | 2,543 | | | 2,300 | | | | | | | | | | |
Less accumulated depreciation | | (1,277 | ) | | (1,084 | ) | | | | | | | | | |
| $ | 1,266 | | $ | 1,216 | | | | | | | | | | |
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Long-lived Assets |
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Long-lived assets, including property, plant and equipment and definite lived intangible assets are reviewed for impairment at the product line level in accordance with the Property, Plant and Equipment standard of the ASC whenever facts and circumstances indicate that the carrying amount may not be recoverable. Specifically, this process involves comparing an asset's carrying value to the estimated undiscounted future cash flows the asset is expected to generate over its remaining life. If this process were to result in the conclusion that the carrying value of a long-lived asset would not be recoverable, a write-down of the asset to fair value would be recorded through a charge to operations. Fair value is determined based upon discounted cash flows or appraisals as appropriate. Long-lived assets that are held for sale are reported at the lower of the assets' carrying amount or fair value less costs related to the assets' disposition. We recorded impairment charges totaling $5 million, $20 million, and $35 million to write-down long-lived assets to their net realizable valuables during fiscal years 2013, 2012, and 2011 respectively. |
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Goodwill |
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The Company follows the principles provided by the Goodwill and Other Intangibles standard of the ASC. Goodwill is not amortized but rather tested annually for impairment. The Company performs their annual impairment test on the first day of the fourth quarter in each respective fiscal year. For purposes of conducting our annual goodwill impairment test, the Company determined that we have five reporting units, Open Top, Rigid Closed Top, Engineered Films, Flexible Packaging and Tapes. Tapes and Engineered Films comprise the Engineered Materials operating segment. We determined that each of the components within our respective reporting units have similar economic characteristics and therefore should be aggregated. We reached this conclusion because within each of our reporting units, we have similar products and production processes which allow us to share assets and resources across the product lines. We regularly re-align our production equipment and manufacturing facilities in order to take advantage of cost savings opportunities, obtain synergies and create manufacturing efficiencies. In addition, we utilize our research and development centers, design center, tool shops, and graphics center which all provide benefits to each of the reporting units and work on new products that can not only benefit one product line, but can benefit multiple product lines. We also believe that the goodwill is recoverable from the overall operations of the unit given the similarity in production processes, synergies from leveraging the combined resources, common raw materials, common research and development, similar margins and similar distribution methodologies. In fiscal 2013, the Company applied the quantitative assessment to determine whether it is more likely than not that the fair value of the reporting unit may be less than the carrying amount. Based on our review of prior quantitative tests, changes in the carrying values, operating results, relevant market data and other factors we determined that no impairment is indicated and we did not perform a two-step impairment test. In fiscal 2012, we completed step 1 of the impairment test which indicated no impairment in any of our reporting units. In fiscal 2011 the Company completed the annual impairment and determined the carrying value of the Specialty Films division, which is now included in the Engineered Materials and Flexible Packaging exceeded its fair value. The Company performed the second step of its evaluation to calculate the impairment and as a result recorded a goodwill impairment charge of $165 million in Restructuring and impairment charges on the Consolidated Statement of Operations. This impairment was primarily the result of a base volume decline of 11% in our Engineered Materials and Flexible Packaging segments. This base volume decline of 11% occurred because of a pricing strategy that we |
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implemented in the second fiscal quarter of 2011. The $165 million impairment charge incurred in fiscal 2011 is the Company's only goodwill impairment charge. |
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The changes in the carrying amount of goodwill by reportable segment are as follows: |
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| | Rigid Open | | Rigid Closed | | | Engineered | | | Flexible | | | | | |
| | Top | | Top | | | Materials | | | Packaging | | Total | | | |
Balance as of fiscal 2011 | $ | 681 | $ | 819 | | $ | 55 | | $ | 40 | $ | 1,595 | | | |
Foreign currency translation adjustment | | - | | 2 | | | - | | | - | | 2 | | | |
Acquisitions(divestitures) goodwill, net | | - | | 11 | | | 18 | | | - | | 29 | | | |
Balance as of fiscal 2012 | $ | 681 | $ | 832 | | $ | 73 | | $ | 40 | $ | 1,626 | | | |
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Foreign currency translation adjustment | | - | | (1 | ) | | 1 | | | - | | - | | | |
Acquisitions(divestitures) goodwill, net | | - | | - | | | (1 | ) | | 9 | | 8 | | | |
Balance as of fiscal 2013 | $ | 681 | $ | 831 | | $ | 73 | | $ | 49 | $ | 1,634 | | | |
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Deferred Financing Fees |
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Deferred financing fees are being amortized to interest expense using the effective interest method over the lives of the respective debt agreements. |
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Intangible Assets |
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Customer relationships are being amortized using an accelerated amortization method which corresponds with the customer attrition rates used in the initial valuation of the intangibles over the estimated life of the relationships which range from 11 to 20 years. Trademarks that are expected to remain in use, which are indefinite lived intangible assets, are required to be reviewed for impairment annually. Technology intangibles are being amortized using the straight-line method over the estimated life of the technology which is 11 years. License intangibles are being amortized using the straight-line method over the life of the license which is 10 years. Patent intangibles are being amortized using the straight-line method over the shorter of the estimated life of the technology or the patent expiration date ranging from 10 to 20 years, with a weighted-average life of 15 years. The Company evaluates the remaining useful life of intangible assets on a periodic basis to determine whether events and circumstances warrant a revision to the remaining useful life. We completed the annual impairment test of our indefinite lived tradenames and noted no impairment. As discussed in Note 10, the Company recorded a $5 million and $17 million impairment charge related to the exit of certain operations in fiscal 2013 and fiscal 2012, respectively. |
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| | Customer | | | | | | Other | | | Accumulated | | | | |
| | Relationships | | | Trademarks | | | Intangibles | | | Amortization | | | Total | |
Balance as of fiscal 2011 | $ | 1,178 | | $ | 286 | | $ | 82 | | $ | (502 | ) | $ | 1,044 | |
Adjustment for income taxes | | - | | | - | | | (4 | ) | | - | | | (4 | ) |
Write-off of fully amortized intangibles | | - | | | - | | | (7 | ) | | 7 | | | - | |
Amortization expense | | - | | | - | | | - | | | (109 | ) | | (109 | ) |
Impairment of intangibles | | (37 | ) | | - | | | - | | | 20 | | | (17 | ) |
Acquisition intangibles | | 12 | | | 3 | | | 28 | | | - | | | 43 | |
Balance as of fiscal 2012 | $ | 1,153 | | $ | 289 | | $ | 99 | | $ | (584 | ) | $ | 957 | |
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Adjustment for income taxes | | (7 | ) | | (1 | ) | | 5 | | | (2 | ) | | (5 | ) |
Foreign currency translation adjustment | | - | | | - | | | 2 | | | - | | | 2 | |
Write-off of fully amortized intangibles | | - | | | (5 | ) | | (1 | ) | | 6 | | | - | |
Amortization expense | | - | | | - | | | - | | | (105 | ) | | (105 | ) |
Impairment of intangibles | | (21 | ) | | (1 | ) | | - | | | 17 | | | (5 | ) |
Acquisition intangibles | | 9 | | | 1 | | | 2 | | | - | | | 12 | |
Balance as of fiscal 2013 | $ | 1,134 | | $ | 283 | | $ | 107 | | $ | (668 | ) | $ | 856 | |
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Insurable Liabilities |
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The Company records liabilities for the self-insured portion of workers' compensation, health, product, general and auto liabilities. The determination of these liabilities and related expenses is dependent on claims experience. For most of these liabilities, claims incurred but not yet reported are estimated by utilizing actuarial valuations based upon historical claims experience. |
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Income Taxes |
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The Company accounts for income taxes under the asset and liability approach, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequence of events that have been recognized in the Company's financial statements or income tax returns. Income taxes are recognized during the period in which the underlying transactions are recorded. Deferred taxes, with the exception of non-deductible goodwill, are provided for temporary differences between amounts of assets and liabilities as recorded for financial reporting purposes and such amounts as measured by tax laws. If the Company determines that a deferred tax asset arising from temporary differences is not likely to be utilized, the Company will establish a valuation allowance against that asset to record it at its expected realizable value. The Company recognizes uncertain tax positions when it is more likely than not that the tax position will be sustained upon examination by relevant taxing authorities, based on the technical merits of the position. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company's effective tax rate is dependent on many factors including: the impact of enacted tax laws in jurisdictions in which the Company operates; the amount of earnings by jurisdiction, due to varying tax rates in each country; and the Company's ability to utilize foreign tax credits related to foreign taxes paid on foreign earnings that will be remitted to the United States. |
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Comprehensive Income (Loss) |
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Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). Other comprehensive losses include net unrealized gains or losses resulting from currency translations of foreign subsidiaries, changes in the value of our derivative instruments and adjustments to the pension liability. |
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The accumulated balances related to each component of other comprehensive income (loss) were as follows (amounts below are net of taxes): |
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| | Translation | | | Health Benefit Plans | | | Hedges | | | Comprehensive Loss | | | | |
Balance as of fiscal 2010 | $ | (11 | ) | $ | (12 | ) | $ | - | | $ | (23 | ) | | | |
Other comprehensive loss | | (10 | ) | | (14 | ) | | (8 | ) | | (32 | ) | | | |
Tax expense (benefit) | | - | | | 5 | | | 2 | | | 7 | | | | |
Balance as of fiscal 2011 | $ | (21 | ) | $ | (21 | ) | $ | (6 | ) | $ | (48 | ) | | | |
Other comprehensive income (loss) | | 6 | | | (14 | ) | | 4 | | | (4 | ) | | | |
Tax expense (benefit) | | - | | | 6 | | | (1 | ) | | 5 | | | | |
Balance as of fiscal 2012 | $ | (15 | ) | $ | (29 | ) | $ | (3 | ) | $ | (47 | ) | | | |
Other comprehensive income (loss) | | (5 | ) | | 34 | | | 20 | | | 49 | | | | |
Tax expense (benefit) | | - | | | (13 | ) | | (7 | ) | | (20 | ) | | | |
Balance as of fiscal 2013 | $ | (20 | ) | $ | (8 | ) | $ | 10 | | $ | (18 | ) | | | |
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Accrued Rebates |
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The Company offers various rebates to customers based on purchases. These rebate programs are individually negotiated with customers and contain a variety of different terms and conditions. Certain rebates are calculated as flat percentages of purchases, while others included tiered volume incentives. These rebates may be payable monthly, quarterly, or annually. The calculation of the accrued rebate balance involves significant management estimates, especially where the terms of the |
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rebate involve tiered volume levels that require estimates of expected annual sales. These provisions are based on estimates derived from current program requirements and historical experience. The accrual for customer rebates was $55 million and $68 million at the end of fiscal 2013 and 2012, respectively and is included in Accrued expenses and other current liabilities. |
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Pension |
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Pension benefit costs include assumptions for the discount rate, retirement age, and expected return on plan assets. Retiree medical plan costs include assumptions for the discount rate, retirement age, and health-care-cost trend rates. Periodically, the Company evaluates the discount rate and the expected return on plan assets in its defined benefit pension and retiree health benefit plans. In evaluating these assumptions, the Company considers many factors, including an evaluation of the discount rates, expected return on plan assets and the health-care-cost trend rates of other companies; historical assumptions compared with actual results; an analysis of current market conditions and asset allocations; and the views of advisers |
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Net Income (Loss) Per Share |
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The Company calculates basic net income (loss) per share based on the weighted-average number of outstanding common shares. The Company calculates diluted net income (loss) per share based on the weighted-average number of outstanding common shares plus the effect of dilutive securities. |
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Use of Estimates |
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The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make extensive use of estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of sales and expenses. Actual results could differ materially from these estimates. Changes in estimates are recorded in results of operations in the period that the event or circumstances giving rise to such changes occur. |
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Recently Issued Accounting Pronouncements |
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In February 2013, the FASB issued Accounting Standards Update No. 2013-02: Comprehensive Income (Topic 220), Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income ("ASU 2013-02"). This guidance requires companies to report, in one place, information about reclassifications out of accumulated other comprehensive income (AOCI). Companies also are required to present reclassifications by component when reporting changes in AOCI balances. For significant items reclassified out of AOCI to net income in their entirety in the period, companies must report the effect of the reclassifications on the respective line items in the statement where net income is presented. In certain circumstances, this can be done on the face of that statement. Otherwise, it must be presented in the notes. For items not reclassified to net income in their entirety in the period (e.g., pension amounts that are capitalized in inventory), companies must cross-reference in a note to other required disclosures. The adoption of ASU 2013-02 in fiscal 2013 did have an impact on the Company's consolidated financial statements. |
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In July 2013, the FASB issued Accounting Standards Update No. 2013-11: Income Taxes (Topic 740), Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force) ("ASU 2013-11"). An entity is required to present unrecognized tax benefits as a decrease in a net operating loss, similar tax loss or tax credit carryforward if certain criteria are met. The determination of whether a deferred tax asset is available is based on the unrecognized tax benefit and the deferred tax asset that exists at the reporting date and presumes disallowance of the tax position at the reporting date. The guidance will eliminate the diversity in practice in the presentation of unrecognized tax benefits but will not alter the way in which entities assess deferred tax assets for realizability. ASU 2013-11 will be effective for the company in fiscal 2014. The Company is currently assessing the impact to the consolidated financial statements. |
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