Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES Contractual Obligations In order to mitigate the risks of volatility in commodity markets to which we are exposed, we entered into forward purchase agreements with certain suppliers based on market prices, forward price projections and expected usage levels. Purchase commitments for certain ingredients, packaging materials and energy totaled $183.2 million as of April 2, 2016 , as compared to $97.2 million as of January 2, 2016 . The increase in purchase commitments was due to additional commitments from Diamond. In addition to these commitments, we have contracts for certain ingredients and packaging materials where we have secured a fixed price but do not have a minimum purchase quantity. We generally contract from approximately three to twelve months in advance for certain major ingredients and packaging. We have a contract to receive services from our syndicated market data provider through 2023 . Our commitment for these services range from $3 million to $4 million each year throughout the life of the contract. We also maintain standby letters of credit in connection with our self-insurance reserves for casualty claims. The total amount of these letters of credit was $11.9 million as of April 2, 2016 and $9.2 million as of January 2, 2016 . As a result of the acquisition of Diamond, we obtained certain non-cancelable operating leases and capital leases. As of April 2, 2016, the future minimum payments under the acquired operating leases (primarily for real property) were as follows: Acquired operating leases (in thousands) Amount Remainder of 2016 $ 3,667 2017 4,625 2018 4,282 2019 4,223 2020 4,246 Thereafter 10,846 Total operating lease commitments $ 31,889 Future minimum payments under the legacy Snyder's-Lance operating leases remain consistent with our disclosure in our 2015 Form 10-K. As of April 2, 2016, the future minimum payments under the acquired capital leases (primarily for real property) were as follows: Acquired capital leases (in thousands) Amount Remainder of 2016 $ 2,324 2017 1,740 2018 1,572 2019 1,043 2020 333 Thereafter — Total minimum payments 7,012 Less amount representing interest (663 ) Present value of capital lease obligations $ 6,349 Guarantees We currently provide a partial guarantee for loans made to IBOs by third-party financial institutions for the purchase of route businesses. The outstanding aggregate balance on these loans was approximately $143.9 million as of April 2, 2016 compared to approximately $139.3 million as of January 2, 2016 . The annual maximum amount of future payments we could be required to make under the guarantee equates to 25% of the outstanding loan balance on the first day of each calendar year plus 25% of the amount of any new loans issued during such calendar year. These loans are collateralized by the route businesses for which the loans are made. Accordingly, we have the ability to recover substantially all of the outstanding loan value upon default, and our liability associated with this guarantee is not material. Legal Matters All Natural Litigation We have certain class action legal proceedings filed against us which allege that certain ingredients in some of our products that are labeled as “natural” and “all natural” are not natural. Although we believe that we have strong defenses against these claims, we reached a tentative settlement agreement in the third quarter of 2015 in order to avoid the costs and uncertainty of litigation. The settlement amount of $2.8 million is accrued in other payables and accrued liabilities in the Condensed Consolidated Balance Sheets at the end of the first quarter of 2016 and is subject to the execution of definitive settlement agreements. IBO Litigation In January 2013, plaintiffs comprised of IBOs filed a putative class action against our distribution subsidiary, S-L Distribution Company, Inc., in the Suffolk Superior Court of the Commonwealth of Massachusetts. The lawsuit was transferred to the United States District Court, Middle District of Pennsylvania. The lawsuit seeks statewide class certification on behalf of a class comprised of IBOs in Massachusetts. The plaintiffs allege that they were misclassified as independent contractors and should be considered employees. The plaintiffs are seeking reimbursement of their out-of-pocket business expenses. We believe we have strong defenses to all the claims that have been asserted against us. On December 22, 2015, the parties to this litigation reached a tentative settlement on a class wide basis. We do not admit any fault or liability in this matter; however, in an effort to resolve these claims, we have agreed to pay $2.9 million to fully resolve the litigation. This amount has been accrued as reflected in other payables and accrued liabilities in the Consolidated Balance Sheets. The settlement has been approved by the court and settlement funds are scheduled to be distributed to class members in June 2016. Shareholder Derivative Litigation Beginning on November 14, 2011, putative shareholder derivative lawsuits were filed in the Superior Court for the State of California, San Francisco County, purportedly on behalf of Diamond Foods, Inc. (“Diamond”) and naming certain executive officers and the members of its board of directors as individual defendants. These lawsuits, which related principally to accounting for certain payments to walnut growers, were subsequently consolidated as In re Diamond Foods Inc., Shareholder Derivative Litigation and purport to set forth claims for breach of fiduciary duty, unjust enrichment, abuse of control and gross mismanagement. Following mediation efforts, the parties agreed to the terms of a proposed settlement and the Court entered an order granting final approval of the settlement on August 19, 2013. On September 23, 2013, a Notice of Appeal from the order granting final approval was filed by a single stockholder in the California Court of Appeal. On February 19, 2016, the Court set oral argument for March 15, 2016. On February 25, 2016, Diamond informed the Court of its pending merger with Snyder’s-Lance, Inc. and filed a request to continue oral argument. On February 29, 2016, the Court issued an order removing oral argument from the Court’s calendar and ordered the parties to submit letters to the Court on the status of the merger. On March 3, 2016, Diamond submitted a letter in response to the Court’s Order, informing the Court that Diamond Foods, Inc. no longer exists as a corporate entity due to the completion of the merger. On March 25, 2016, Diamond submitted to the Court the parties’ agreed upon briefing schedule for a motion to dismiss, setting Diamond’s motion filing for April 4, 2016; Appellants’ opposition for May 4, 2016; and Diamond’s reply for May 18, 2016. On April 4, 2016, Diamond filed its Motion to Dismiss and is currently awaiting the Court’s ruling. Merger-related Litigation On November 10, 2015, a putative class action lawsuit was filed on behalf of Diamond stockholders in the Court of Chancery of the State of Delaware. The complaint names as defendants Diamond, the members of Diamond’s board of directors, Snyder’s-Lance, Merger Sub I and Merger Sub II. The complaint generally alleges, among other things, that the members of Diamond’s board of directors breached their fiduciary duties to Diamond’s stockholders in connection with negotiating, entering into and approving the merger agreement with Snyder’s-Lance, Inc. The complaint additionally alleges that Diamond, Snyder’s-Lance, Merger Sub I and Merger Sub II aided and abetted such breaches of fiduciary duties. The complaint sought injunctive relief, including the enjoinment of the merger, certain other declaratory and equitable relief, damages, costs and fees. An amended complaint was filed on December 21, 2015. The amended complaint adds further allegations related to the merger process and disclosures contained in the Registration Statement on Form S-4 filed by Snyder’s-Lance on November 25, 2015. On January 15, 2016, plaintiff filed a motion for expedited proceedings requesting a preliminary injunction and expedited discovery, which the Court denied on February 3, 2016. On January 19, 2016, another action was filed in Delaware similar to the above matter. A schedule has not yet been set for briefing of anticipated motions to dismiss the complaints. If we determine that a loss is possible and a range of the loss can be reasonably estimated, we will disclose the range of the possible loss. Appraisal Proceedings On February 25, 2016, Cede & Co., on behalf of Blueblade Capital Opportunities LLC (“Blueblade I”), sent an appraisal demand letter to Diamond with respect to 211,574 shares of Diamond common stock, purportedly held in connection with our acquisition of Diamond. On the same date, Cede & Co., on behalf of Blueblade Capital Opportunities II LLC ("Blueblade II," and together with Blueblade I, "Blueblade"), sent a second appraisal demand letter to Diamond with respect to 119,008 shares of Diamond common stock. Under Section 262 of the Delaware General Corporation Law, certain stockholders may be entitled to an appraisal of the fair value of the stockholders’ shares. Blueblade claims that the price we paid for Diamond was less than its fair value. Though no complaint has yet been filed in this matter, adjudication or resolution of Blueblade’s claims could have a material impact on Snyder’s-Lance’s business or financial condition. As of April 2, 2016, we have accrued $12.4 million associated with these claims in other payables and accrued liabilities in our Condensed Consolidated Balance Sheets, which is equal to the amount of merger consideration these shareholders would have received in the Diamond acquisition. We are unable to determine at this time if an additional liability is probable and reasonably estimable. California Labor Code Litigation Former employee Patricia Sparks filed a putative class action lawsuit against Diamond on November 25, 2015 in San Francisco Superior Court alleging Diamond’s violation of the California Labor Code by failing to include on wage statements the start date of the pay period and by failing to include on wage statements the name and address of legal entity that is the employer. Plaintiff amended her complaint on January 4, 2016 to add a claim for penalties under California’s Private Attorneys General Act based on the same underlying violations. Diamond Foods timely answered the First Amended Complaint on March 7, 2016. The parties attended the initial case management conference on May 2, 2016 and a further case management conference is scheduled for August 1, 2016. No other dates are currently on calendar. Following our acquisition of Diamond, adjudication or resolution of Patricia Sparks’ claims could have a material impact on Snyder’s-Lance’s business or financial condition. We accrued $8.3 million associated with this outstanding claim in the Diamond opening balance sheet as that represents our best estimate of the probable liability at that time. This accrual remains outstanding and is included in other payables and accrued liabilities in our Condensed Consolidated Balance Sheets as of April 2, 2016. We will adjust this accrual as we obtain additional information related to this estimate. Other We are currently subject to various other legal proceedings and environmental matters arising in the normal course of business which are not expected to have a material effect on our consolidated financial statements. We record a liability when we believe that it is probable that a loss has been incurred and the amount can be reasonably estimated. If we determine that a loss is possible and a range of the loss can be reasonably estimated, we will disclose the range of the possible loss. Significant judgment is required to determine both likelihood of there being, and the estimated amount of, a loss related to such matters. We cannot currently estimate our potential liability, damages or range of potential loss in connection with our other outstanding legal proceedings beyond amounts accrued, if any. |