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 $163.2 million as of October 1, 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. In addition, we have contracts with walnut growers where we have secured a minimum purchase quantity but no pricing terms. These contracts can extend out from one to three years. We also have a licensing contract which totaled $16.1 million as of October 1, 2016 , and runs through 2020. We have a contract to receive services from our syndicated market data provider through 2023 . Our commitment for these services ranges from approximately $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 October 1, 2016 , $4.7 million of which relates to Diamond. The total amount of letters of credit as of January 2, 2016 was $9.2 million . As a result of the acquisition of Diamond, we obtained certain non-cancelable operating leases and capital leases. As of October 1, 2016 , the future minimum payments under the acquired operating leases (primarily for real property) were as follows: (in thousands) Amount Remainder of 2016 $ 1,181 2017 4,618 2018 4,259 2019 4,158 2020 4,162 Thereafter 10,702 Total operating lease commitments $ 29,080 Future minimum payments under the legacy Snyder's-Lance operating leases remain consistent with our disclosure in our 2015 Form 10-K. As of October 1, 2016 , the future minimum payments under the acquired capital leases (primarily for real property) were as follows: (in thousands) Amount Remainder of 2016 $ 790 2017 1,757 2018 1,594 2019 1,049 2020 333 Thereafter — Total minimum payments 5,523 Less amount representing interest (179 ) Present value of capital lease obligations $ 5,344 There are no legacy Snyder's-Lance capital leases, and we have not entered into any capital leases other than those obtained as a result of the acquisition of Diamond. 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 $139.3 million as of October 1, 2016 and January 2, 2016 . The annual maximum amount of future payments we could be required to make under the guarantee equates to 25.0% of the outstanding loan balance on the first day of each calendar year plus 25.0% 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 had strong defenses against these claims, we reached a settlement agreement in the third quarter of 2015 in order to avoid the costs and uncertainty of litigation. We recognized $2.8 million of expense in settlements of certain litigation in our Condensed Consolidated Statements of Income in the first nine months of 2015. 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 third quarter of 2016. Subsequent to the end of the third quarter of 2016, we distributed the funds related to the class settlement and consider the case to be closed; however, a portion of the accrued administrative fees will be paid in the fourth quarter. 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 sought statewide class certification on behalf of a class comprised of IBOs in Massachusetts. The plaintiffs alleged that they were misclassified as independent contractors and should have been considered employees. The plaintiffs were seeking reimbursement of their out-of-pocket business expenses. On August 20, 2015, the parties to this litigation reached a tentative settlement on a class wide basis, which became a final settlement on December 22, 2015. We do not admit any fault or liability in this matter; however, in an effort to resolve these claims, we agreed to pay $2.9 million to fully resolve the litigation. This amount was recognized as expense in settlements of certain litigation in our Condensed Consolidated Statements of Income in the third quarter of 2015, and was paid in the second quarter of 2016. On July 25, 2016, plaintiffs comprised of IBOs filed a putative class action against Snyder’s-Lance, Inc. and our distribution subsidiary, S-L Distribution Company, Inc. in the Eastern District Court of Tennessee. The case was transferred to the Middle District of Pennsylvania. The lawsuit seeks statewide class certification on behalf of a class comprised of IBOs in Tennessee, and nationwide certification for the Federal law collective action. The plaintiffs allege that they were misclassified as independent contractors and should be considered employees. We believe we have strong defenses to all the claims that have been asserted against us. We cannot reasonably estimate at this time the possible loss or range of loss, if any, from this lawsuit. 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 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 reschedule 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, the Company submitted a letter in response to the Court’s Order, informing the Court that Diamond no longer exists as a corporate entity due to the completion of the merger with the Company. On March 25, 2016, the Company submitted to the Court the parties’ agreed upon briefing schedule for a motion to dismiss, setting the Company’s motion filing for April 4, 2016; Appellants’ opposition for May 4, 2016; and the Company’s reply for May 18, 2016. On April 4, 2016, the Company filed its Motion to Dismiss and on June 9, 2016, the Court granted the Motion to Dismiss and dismissed the Appeal from the order granting final approval. On June 28, 2016, an objection was raised with an offer to settle. On August 2, 2016 the Company filed its Answer to Petition for Review denying Appellant’s right to maintain an appeal. On August 16, 2016 the Court denied the Petition for Review. Accordingly, the Company considers this case to be closed. 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, Shark Acquisition Sub I, Inc., a Delaware corporation and a wholly-owned subsidiary of Snyder’s-Lance (“Merger Sub I”) and Shark Acquisition Sub II, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Snyder’s-Lance (“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 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. Plaintiff also filed a books and records demand case in North Carolina, which the plaintiff subsequently dismissed with prejudice. On January 19, 2016, another action was filed in the court of chancery in the state of Delaware similar to the above matter. On October 24, 2016, plaintiff filed a second amended complaint, which modified some of plaintiff's allegations, including now expressly seeking a quasi-appraisal remedy or rescissory damages. The parties also have submitted to the court a proposed schedule for briefing of anticipated motions to dismiss the amended complaint, which would extend through March 2017. We cannot reasonably estimate at this time the possible loss or range of loss, if any, from this lawsuit. 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. A petition for appraisal was filed by Blueblade in the Court of Chancery in the State of Delaware on June 27, 2016. The case was settled and dismissed with prejudice on August 12, 2016 and we agreed to pay $14.5 million to fully resolve the litigation. Of the $14.5 million , $12.4 million represented the fair value of consideration paid as part of the Diamond acquisition. The remaining $2.1 million was recognized as a transaction related expense in the first nine months of 2016. 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 the 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 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 occurred on August 1, 2016. We accrued $8.3 million associated with this outstanding claim in the Diamond opening balance sheet as that represented our best estimate of the probable liability at that time. We determined such accrual by estimating the aggregate potential penalties that we believed it was probable could be assessed under the applicable California laws, which are strict liability penalties. On September 19, 2016, the parties to this litigation reached a tentative settlement pursuant to which we have agreed to pay $0.7 million on a class wide basis. We signed a memorandum of understanding reflecting this preliminary settlement amount. The settlement is subject to negotiation and execution of a definitive settlement agreement by the parties and approval by the court. As result of the memorandum of understanding, we have recorded a measurement period adjustment to reduce the opening Balance Sheet accrual and accordingly accounted for this settlement amount in our Condensed Consolidated Balance Sheets for the quarter ended October 1, 2016 . Employment Tax Audit by the California Employment Development Department On February 22, 2016, the company received notice from the Employment Development Department of the State of California (“EDD”) that S-L Distribution Company, Inc. (“SLD”) had been selected for an employment tax audit. An onsite audit was conducted April 27, 2016, of payroll records for 2015 as a general matter. In addition, the auditor examined the Forms 1099Misc that the company had issued. The audit is still outstanding and will confirm whether the IBOs who received 1099s are bona-fide contractors within the definition of an employer/employee relationship under the relevant statutes and regulations in California. If the auditor issues an unfavorable determination and finds that the IBOs are actually employees, such a finding could have a material adverse impact on our operations in California and potentially the other jurisdictions where the company utilizes IBO business partners. At this time we cannot reasonably estimate the possible loss or range of loss, if any, from this audit, nor are we able to quantify the likelihood of a positive determination from the auditor. Evaporated Cane Juice Litigation A putative class action suit was filed against Late July Snacks, LLC on September 18, 2013, and is pending in the United States District Court for the Northern District of California. The action accuses Late July Snacks, LLC of violating federal and state law by using the term "evaporated cane juice" ("ECJ") in the ingredients list on its products' labels. The plaintiffs' complaint alleges ECJ is not the common and usual name for the ingredient at issue and is misleading. The complaint attempts to state claims for violation of California's Unfair Competition Law, California's False Advertising Law, California's Consumers Legal Remedies Act, and unjust enrichment. Late July Snacks, LLC filed a motion to dismiss the complaint on November 27, 2013, based on the primary jurisdiction doctrine, lack of standing, and failure to state a claim. On May 22, 2014, the Court stayed the action, applying the doctrine of primary jurisdiction, due to the FDA's ongoing consideration of the issue of using the term ECJ on food labels. On May 26, 2016, the FDA issued its guidance for industry on the topic. As a result, the stay was lifted on July 22, 2016. Plaintiffs filed an amended complaint that, among other things, relies on the FDA's recently issued guidance, on August 31, 2016. We cannot reasonably estimate at this time the possible loss or range of loss, if any, from this lawsuit. 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. |