Note: The balance sheet at January 3, 2016 has been derived from the audited consolidated financial statements at that
date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
Notes to Condensed Consolidated Financial Statements
(Unaudited; tabular amounts in thousands, except percentages, share and per share amounts)
September 11, 2016
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles
generally accepted in the United States for complete financial statements. For further information, refer to the consolidated financial statements and footnotes for the fiscal year ended January 3, 2016 included in our annual report on Form
10-K.
In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair statement have
been included. Operating results for the fiscal quarter ended September 11, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending January 1, 2017.
2. Segment Information
The following table
summarizes revenues, income from operations and earnings before interest, taxes, depreciation, amortization and other, which is the measure by which the Company allocates resources to its segments and which we refer to as Segment Income, for each of
our reportable segments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarters Ended September 11, 2016 and September 6, 2015
|
|
|
|
Domestic
|
|
|
Supply
|
|
|
International
|
|
|
Intersegment
|
|
|
|
|
|
|
|
|
|
Stores
|
|
|
Chain
|
|
|
Franchise
|
|
|
Revenues
|
|
|
Other
|
|
|
Total
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
$
|
171,603
|
|
|
$
|
383,719
|
|
|
$
|
40,038
|
|
|
$
|
(28,683
|
)
|
|
$
|
|
|
|
$
|
566,677
|
|
2015
|
|
|
145,841
|
|
|
|
327,885
|
|
|
|
35,264
|
|
|
|
(24,294
|
)
|
|
|
|
|
|
|
484,696
|
|
Income from operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
$
|
59,251
|
|
|
$
|
31,401
|
|
|
$
|
31,036
|
|
|
|
N/A
|
|
|
$
|
(20,777
|
)
|
|
$
|
100,911
|
|
2015
|
|
|
45,482
|
|
|
|
23,729
|
|
|
|
27,922
|
|
|
|
N/A
|
|
|
|
(16,590
|
)
|
|
|
80,543
|
|
Segment Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
$
|
61,683
|
|
|
$
|
33,756
|
|
|
$
|
31,100
|
|
|
|
N/A
|
|
|
$
|
(12,971
|
)
|
|
$
|
113,568
|
|
2015
|
|
|
47,566
|
|
|
|
26,061
|
|
|
|
27,954
|
|
|
|
N/A
|
|
|
|
(9,760
|
)
|
|
|
91,821
|
|
|
|
|
|
Three Fiscal Quarters Ended September 11, 2016 and September 6, 2015
|
|
|
|
Domestic
|
|
|
Supply
|
|
|
International
|
|
|
Intersegment
|
|
|
|
|
|
|
|
|
|
Stores
|
|
|
Chain
|
|
|
Franchise
|
|
|
Revenues
|
|
|
Other
|
|
|
Total
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
$
|
503,706
|
|
|
$
|
1,114,096
|
|
|
$
|
119,497
|
|
|
$
|
(84,106
|
)
|
|
$
|
|
|
|
$
|
1,653,193
|
|
2015
|
|
|
449,611
|
|
|
|
993,015
|
|
|
|
107,584
|
|
|
|
(74,865
|
)
|
|
|
|
|
|
|
1,475,345
|
|
Income from operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
$
|
176,401
|
|
|
$
|
89,044
|
|
|
$
|
92,981
|
|
|
|
N/A
|
|
|
$
|
(55,101
|
)
|
|
$
|
303,325
|
|
2015
|
|
|
153,732
|
|
|
|
76,937
|
|
|
|
86,205
|
|
|
|
N/A
|
|
|
|
(49,847
|
)
|
|
|
267,027
|
|
Segment Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
$
|
183,088
|
|
|
$
|
96,110
|
|
|
$
|
93,110
|
|
|
|
N/A
|
|
|
$
|
(30,706
|
)
|
|
$
|
341,602
|
|
2015
|
|
|
159,118
|
|
|
|
83,832
|
|
|
|
86,211
|
|
|
|
N/A
|
|
|
|
(28,324
|
)
|
|
|
300,837
|
|
7
The following table reconciles Total Segment Income to consolidated income before provision for
income taxes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarter Ended
|
|
|
Three Fiscal Quarters Ended
|
|
|
|
September 11,
|
|
|
September 6,
|
|
|
September 11,
|
|
|
September 6,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Total Segment Income
|
|
$
|
113,568
|
|
|
$
|
91,821
|
|
|
$
|
341,602
|
|
|
$
|
300,837
|
|
Depreciation and amortization
|
|
|
(8,704
|
)
|
|
|
(7,667
|
)
|
|
|
(25,460
|
)
|
|
|
(22,695
|
)
|
(Loss) gain on sale/disposal of assets
|
|
|
(226
|
)
|
|
|
(199
|
)
|
|
|
(473
|
)
|
|
|
73
|
|
Non-cash compensation expense
|
|
|
(3,727
|
)
|
|
|
(3,412
|
)
|
|
|
(12,344
|
)
|
|
|
(11,188
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
100,911
|
|
|
|
80,543
|
|
|
|
303,325
|
|
|
|
267,027
|
|
Interest income
|
|
|
83
|
|
|
|
64
|
|
|
|
556
|
|
|
|
203
|
|
Interest expense
|
|
|
(25,180
|
)
|
|
|
(19,979
|
)
|
|
|
(76,533
|
)
|
|
|
(59,142
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
$
|
75,814
|
|
|
$
|
60,628
|
|
|
$
|
227,348
|
|
|
$
|
208,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarter Ended
|
|
|
Three Fiscal Quarters Ended
|
|
|
|
September 11,
|
|
|
September 6,
|
|
|
September 11,
|
|
|
September 6,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net income available to common stockholders - basic and diluted
|
|
$
|
47,232
|
|
|
$
|
37,832
|
|
|
$
|
141,945
|
|
|
$
|
130,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average number of shares
|
|
|
48,043,379
|
|
|
|
54,463,073
|
|
|
|
48,984,734
|
|
|
|
54,834,627
|
|
Earnings per share - basic
|
|
$
|
0.98
|
|
|
$
|
0.69
|
|
|
$
|
2.90
|
|
|
$
|
2.37
|
|
Diluted weighted average number of shares
|
|
|
49,242,182
|
|
|
|
56,115,670
|
|
|
|
50,309,217
|
|
|
|
56,584,913
|
|
Earnings per share - diluted
|
|
$
|
0.96
|
|
|
$
|
0.67
|
|
|
$
|
2.82
|
|
|
$
|
2.30
|
|
The denominators used in calculating diluted earnings per share for common stock for the third quarter of 2016
and three fiscal quarters of 2016 do not include 95,475 and 306,855 options to purchase common stock, respectively, as the effect of including these options would have been anti-dilutive. The denominators used in calculating diluted earnings per
share for the third quarter of 2016 and three fiscal quarters of 2016 do not include 58,030 and 84,320 restricted performance shares, respectively, as the effect of including these shares would have been anti-dilutive. The denominators used in
calculating diluted earnings per share for common stock for both the third quarter and three fiscal quarters of 2015 do not include 188,080 options to purchase common stock, as the effect of including these options would have been anti-dilutive. The
denominators used in calculating diluted earnings per share for the third quarter of 2015 and three fiscal quarters of 2015 do not include 60,770 and 65,840 restricted performance shares, respectively, as the effect of including these shares would
have been anti-dilutive.
4. Stockholders Deficit
The following table summarizes changes in Stockholders Deficit for the three fiscal quarters of 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
Other
|
|
|
|
Common Stock
|
|
|
Paid-in
|
|
|
Retained
|
|
|
Comprehensive
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Loss
|
|
Balance at January 3, 2016
|
|
|
49,838,221
|
|
|
$
|
498
|
|
|
$
|
6,942
|
|
|
$
|
(1,804,143
|
)
|
|
$
|
(3,548
|
)
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
141,945
|
|
|
|
|
|
Common stock dividends and equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(55,511
|
)
|
|
|
|
|
Issuance of common stock, net
|
|
|
74,331
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax payments for restricted stock upon vesting
|
|
|
(47,252
|
)
|
|
|
|
|
|
|
(5,605
|
)
|
|
|
|
|
|
|
|
|
Purchases of common stock
|
|
|
(2,714,322
|
)
|
|
|
(27
|
)
|
|
|
(67,363
|
)
|
|
|
(216,468
|
)
|
|
|
|
|
Exercise of stock options
|
|
|
926,390
|
|
|
|
9
|
|
|
|
12,315
|
|
|
|
|
|
|
|
|
|
Tax impact from equity-based compensation
|
|
|
|
|
|
|
|
|
|
|
41,479
|
|
|
|
|
|
|
|
|
|
Non-cash compensation expense
|
|
|
|
|
|
|
|
|
|
|
12,344
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
26
|
|
|
|
|
|
|
|
|
|
Currency translation adjustment, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 11, 2016
|
|
|
48,077,368
|
|
|
$
|
481
|
|
|
$
|
138
|
|
|
$
|
(1,934,177
|
)
|
|
$
|
(2,588
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On March 14, 2016, the Company received and retired 456,936 shares of its common stock in connection with
the final settlement of its previously announced $600.0 million accelerated share repurchase (ASR) program. At the commencement of the program, in the fourth quarter of 2015, the Company paid $600.0 million to a counterparty and received
and retired a portion of the shares from the ASR program, based on the terms of the related ASR agreement.
8
5. Dividends
During the third quarter of 2016, on July 20, 2016, the Companys Board of Directors declared a $0.38 per share quarterly dividend on
its outstanding common stock for shareholders of record as of September 15, 2016 which was paid on September 30, 2016. The Company had approximately $18.5 million accrued for common stock dividends at September 11, 2016.
Subsequent to the third quarter, on October 14, 2016, the Companys Board of Directors declared a $0.38 per share quarterly dividend
on its outstanding common stock for shareholders of record as of December 15, 2016 to be paid on December 30, 2016.
6. Accumulated Other
Comprehensive Loss
The approximately $2.6 million of accumulated other comprehensive loss at September 11, 2016 and the approximately
$3.5 million of accumulated other comprehensive loss at January 3, 2016 represent currency translation adjustments, net of tax. There were no reclassifications out of accumulated other comprehensive loss to net income in the three fiscal
quarters of 2016 or the three fiscal quarters of 2015.
7. Open Market Share Repurchase Program
During the first quarter of 2016, the Company received and retired 456,936 shares of its common stock in connection with the final settlement
of its previously announced $600.0 million ASR program.
During the third quarter of 2016, the Company repurchased and retired 412,260
shares of its common stock under its Board of Directors approved open market share repurchase program for a total of approximately $59.7 million. During the three fiscal quarters of 2016, the Company received and retired 456,936 shares of its common
stock in connection with its ASR program and repurchased and retired 2,257,386 shares of its common stock for approximately $283.9 million. As of September 11, 2016, the end of the third quarter, the Company had a total remaining authorized
amount for share repurchases of approximately $165.5 million.
During the third quarter of 2015, the Company repurchased and retired
365,460 shares of its common stock for approximately $40.9 million; during the three fiscal quarters of 2015, the Company repurchased and retired 1,293,924 shares of its common stock for approximately $138.6 million.
8. Fair Value Measurements
Fair value
measurements enable the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The Company
classifies and discloses assets and liabilities carried at fair value in one of the following three categories:
Level 1: Quoted market
prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are
corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
The fair values of the Companys cash equivalents and investments in marketable securities are based on quoted prices in active markets
for identical assets. The following tables summarize the carrying amounts and fair values of certain assets at September 11, 2016 and January 3, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 11, 2016
|
|
|
|
|
|
|
Fair Value Estimated Using
|
|
|
|
Carrying
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
Amount
|
|
|
Inputs
|
|
|
Inputs
|
|
|
Inputs
|
|
Cash equivalents
|
|
$
|
12,051
|
|
|
$
|
12,051
|
|
|
$
|
|
|
|
$
|
|
|
Restricted cash equivalents
|
|
|
69,451
|
|
|
|
69,451
|
|
|
|
|
|
|
|
|
|
Investments in marketable securities
|
|
|
7,558
|
|
|
|
7,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At January 3, 2016
|
|
|
|
|
|
|
Fair Value Estimated Using
|
|
|
|
Carrying
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
Amount
|
|
|
Inputs
|
|
|
Inputs
|
|
|
Inputs
|
|
Cash equivalents
|
|
$
|
108,766
|
|
|
$
|
108,766
|
|
|
$
|
|
|
|
$
|
|
|
Restricted cash equivalents
|
|
|
128,554
|
|
|
|
128,554
|
|
|
|
|
|
|
|
|
|
Investments in marketable securities
|
|
|
6,054
|
|
|
|
6,054
|
|
|
|
|
|
|
|
|
|
At September 11, 2016, management estimates that the approximately $923.0 million in principal amount of
outstanding fixed rate notes from its 2012 recapitalization had a fair value of approximately $945.2 million; and at January 3, 2016, management estimates that the approximately $962.7 million in principal amount of outstanding fixed rate notes
from its 2012 recapitalization had a fair value of approximately $991.6 million.
9
At September 11, 2016, management estimates that the $496.3 million in principal amount of
outstanding five-year fixed rate notes from its 2015 recapitalization had a fair value of approximately $501.2 million; and at January 3, 2016, management estimates that the $500.0 million in principal amount of outstanding five-year fixed rate
notes from its 2015 recapitalization had a fair value of approximately $489.5 million. At September 11, 2016, management estimates that the $794.0 million in principal amount of outstanding ten-year fixed rate notes from its 2015
recapitalization had a fair value of approximately $801.1 million; and at January 3, 2016, management estimates that the $800.0 million in principal amount of outstanding ten-year fixed rate notes from its 2015 recapitalization had a fair value
of approximately $781.6 million.
The fixed rate notes are classified as a Level 2 measurement, as the Company estimates the fair value
amount by using available market information. The Company obtained quotes from two separate brokerage firms that are knowledgeable about the Companys fixed rate notes and, at times, trade these notes. The Company also performed its own
internal analysis based on the information gathered from public markets, including information on notes that are similar to those of the Company. However, considerable judgment is required to interpret market data to estimate fair value.
Accordingly, the fair value estimates presented are not necessarily indicative of the amount that the Company or the debtholders could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a
material effect on the estimated fair values stated above.
9. Legal Matters
On February 14, 2011, Dominos Pizza LLC was named as a defendant in a lawsuit along with Fischler Enterprises of C.F., Inc., a
franchisee, and Jeffrey S. Kidd, the franchisees delivery driver, filed by Yvonne Wiederhold, the plaintiff, as Personal Representative of the Estate of Richard E. Wiederhold, deceased. The case involved a traffic accident in which the
franchisees delivery driver is alleged to have caused an accident involving a vehicle driven by Richard Wiederhold. Mr. Wiederhold sustained spinal injuries resulting in quadriplegia and passed away several months after the accident. The
jury returned a $10.1 million judgment for the plaintiff where the Company and Mr. Kidd were found to be 90% liable (after certain offsets and other deductions the final verdict was $8.9 million). In the second quarter of 2016, the trial court
ruled on all post-judgment motions and entered the judgment. The Company denies liability and in the third quarter of 2016 filed an appeal of the verdict on a variety of grounds.
On September 11, 2012, Dominos Pizza LLC was named as a defendant in a lawsuit along with MAC Pizza Management, Inc., a large
franchisee, and Joshua Balka, the franchisees delivery driver, filed by Raghurami Reddy, the plaintiff. The case involved a traffic accident in which the franchisees delivery driver collided with another vehicle, where the driver of the
other vehicle sustained head injuries and the passenger of the other vehicle sustained fatal injuries. The jury delivered a $32.0 million judgment for the plaintiff where the Company was found to be 60% liable. The Company denied liability and filed
an appeal of the verdict on a variety of grounds. In the first quarter of 2015, the appellate court reversed the trial courts decision and dismissed the claims against the Company. The plaintiff filed a Petition for Review with the
Supreme Court of the State of Texas. The Company filed opposition to the writ of review and asserted that the claims were appropriately dismissed by the Court of Appeals of the State of Texas. In the second quarter of 2016, the Texas Supreme
Court rejected the plaintiffs writ of certiorari, leaving the appellate courts favorable decision to stand. During the fourth quarter of 2016, the Plaintiff filed a petition for writ of certiorari with the U.S. Supreme Court. The Company
continues to assert that the claims were appropriately dismissed by the Court of Appeals of the State of Texas.
10. Supplemental Disclosures of Cash Flow
Information
The Company had non-cash investing activities related to accruals for capital expenditures of $0.5 million at
September 11, 2016 and $1.0 million at September 6, 2015.
During the first quarter of 2015, the Company renewed the capital
lease of a supply chain center building and extended the term of the lease through August 2028. As a result of the new lease, the Company recorded non-cash financing activities of $3.4 million for the increase in capital lease assets and liabilities
during the first quarter of 2015.
During the third quarter of 2015, the Company entered into a capital lease for a Company-owned store.
As a result, the Company recorded non-cash financing activities of $0.6 million for the increase in capital lease assets and liabilities during the third quarter of 2015.
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11. New Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2016-02,
Leases (Topic 842)
.
ASU 2016-02 requires a lessee to recognize assets and liabilities on the balance sheet for leases with lease terms greater than 12 months. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after
December 15, 2018, and early adoption is permitted. The Company is currently assessing the impact of this ASU on its consolidated financial statements.
In March 2016, the FASB issued ASU 2016-04,
Liabilities Extinguishment of Liabilities (Subtopic 405-20): Recognition of Breakage for
Certain Prepaid Stored-Value Products
. ASU 2016-04 aligns recognition of the financial liabilities related to prepaid stored-value products (for example, gift cards) with Topic 606,
Revenues from Contracts with Customers
, for
non-financial liabilities. In general, these liabilities may be extinguished proportionately in earnings as redemptions occur, or when redemption is remote if issuers are not entitled to the unredeemed stored value. ASU 2016-04 is effective for
fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. The Company is currently assessing the impact of this ASU on its consolidated financial statements.
In March 2016, the FASB issued ASU 2016-09,
Compensation Stock Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting
. ASU 2016-09 is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The update is
effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. The Company is currently assessing the impact of this ASU on its consolidated financial statements.
In March 2016, the FASB issued ASU 2016-08,
Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations
(Reporting Revenue Gross versus Net)
. In April 2016, the FASB issued ASU 2016-10,
Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing
. In May 2016, the FASB issued ASU 2016-12,
Revenue
from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients
and ASU 2016-11,
Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards
Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting
. These amendments provide additional clarification and implementation guidance on the previously issued ASU 2014-09,
Revenue from Contracts
with Customers (Topic 606)
.
The amendments in ASU 2016-08 clarify how an entity should identify the specified good or service for the
principal versus agent evaluation and how it should apply the control principle to certain types of arrangements. ASU 2016-10 clarifies the following two aspects of ASU 2014-09: identifying performance obligations and licensing implementation
guidance. ASU 2016-11 rescinds several SEC Staff Announcements that are codified in Topic 605, including, among other items, guidance relating to accounting for consideration given by a vendor to a customer, as well as accounting for shipping and
handling fees and freight services. ASU 2016-12 provides clarification to Topic 606 on how to assess collectability, present sales tax, treat noncash consideration, and account for completed and modified contracts at the time of transition. In
addition, ASU 2016-12 clarifies that an entity retrospectively applying the guidance in Topic 606 is not required to disclose the effect of the accounting change in the period of adoption. The effective date and transition requirements for these
amendments are the same as the effective date and transition requirements of ASU 2014-09, which is effective for fiscal years, and for interim periods within those years, beginning after December 15, 2017. The Company is currently assessing the
impact of these ASUs on its consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13,
Measurement of Credit Losses
on Financial Instruments
. ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform
credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including those interim periods within those fiscal years. The Company does not expect the adoption of this guidance to have a material impact
on its consolidated financial statements.
In August 2016, the FASB issued ASU 2016-15,
Classification of Certain Cash Receipts and
Cash Payments
. ASU 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash flow, and other Topics. ASU 2016-15 is effective for annual reporting
periods, and interim periods therein, beginning after December 15, 2017. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
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