NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER
31, 201
6
AND 201
5
, AND FOR THE YEAR ENDED DECEMBER
31, 201
6
NOTE 1: DESCRIPTION OF THE PLAN
G
ENERAL
The Vulcan
401(k) Plan (Plan), a defined contribution employee benefit plan established effective July
15, 2007, and most recently restated effective January
1, 201
4
, provides for accumulation of savings, including ownership of common stock of Vul
can Materials Company (Company)
for
:
|
§
|
|
all qualified employees of the
Company hired on or after July
15, 2007
|
|
§
|
|
any employee who was eligible to participate in the Vulcan Materials Company Thrift Plan for Salaried Employees imme
diately prior to
its merger into the Plan effective
January 1
,
2014
|
|
§
|
|
any employee who was eligible to participate in the Vulcan Materials Company Construction Materials Divisions Hourly Employee
S
avings Plan who
transferred
to a salaried posit
ion on or after January 1, 2014
|
The Company has designated a portion of the Plan consisting of the Company’s common stock fund as an Employee Stock Ownership Plan (ESOP). The ESOP fund allows a participant to elect to have the dividends on
the Company’s
common stock reinvested in the Company’s common stock or paid to the participant in cash.
A participant may transfer between the Company’s
two
defined contribution employee benefit plans
(
as defined in the Plan
)
.
Both plans participate in the Vulcan Materials Company Retirement Savings Trust (Master Trust).
When a participant transfers
between plans
,
the net assets of the participant’s account will be transferred
to
the other plan
.
For the year ended December 31, 2016, $1,294,171 was
transferred to the
P
lan
from the Vulcan Materials Company Construction Materials Division
s
Hourly
Employees
Savings Plan
.
Investment
assets of the Plan are held by The Northern Trust Company of Chicago, Illinois (
Trustee).
Aon
Hewitt
(Recordkeeper) is the recordkeeper for the Plan.
Participation and Vesting
Generally, all qualified employees participate on the first day of employment. Participants are fully vested in all contributions at all times.
Contributions
The Plan is funded through contributions by participants and the Company. The Plan provides for t
hree
types of employee contributions to the Plan: pay conversion contributions (
pretax
contributions)
,
after-tax contributions
and Roth contributions
. An employee may designate multiples of 1%
(
ranging from 1% to 35%
)
of earnings as
pretax
contributions, after-tax contributions,
Roth contributions
or any combination of the t
hree
.
Contributions are subject to certain Internal Revenue Code (IRC) limitations.
Participants may also contribute amounts representing distributions from other qualified plans.
The Company expects to make matching contributions to match a portion of an employee’s contribution equal to 100% of that contribution, not to exceed
6
% of the employee’s earnings. In addition
, the Company will make an annual employer contribution of at least
3
% of the earnings of each participant.
Th
e
annual employer contribution totaled
$
11,811,983
for the year ended December
31,
201
6
.
INVESTMENT OPTIONS
Participants
may invest
in 1
8
separate investment funds
of the Plan
or in a self-directed
fund
in proportions elected by the participant.
Certain investment options held by the Master Trust are not available to both of our defined contribution plans.
The
s
table
v
alue
f
und is
held entirely by the Vulcan Materials Company Construction Materials Divisions Hourly
Employees
Savings Plan and is
not an investment option for Vulcan 401(k)
P
lan participants.
Investments in certain common/collective-trust funds are held entirely by the Vulcan 401(k) Plan and are not investment options for participants in the Vulcan Materials Company Construction Materials Divisions Hourly Employees Savings Plan. These certain common/collective-trust funds consist of a bond index fund and a short-term investment fund.
T
he Company’s matching contributions are invested in the Company stock fund, which invests primarily in the Company’s common stock
,
and are available for immediate reallocation by the participant. The Company’s
annual employer
contribution
s are
invested as selected by the participant. In the event that no contribution investment election is made by the participant, the
annual employer
contribution is invested into a target fund based on the participant’s year of birth.
Participant Accounts
Separate accounts are maintained for each investment option
:
pretax
contributions,
after-tax contributions, Roth contributions,
rollovers
and
transfers, and Company contributions and accumulated earnings thereon. Earnings (losses) are allocated daily to each participant’s account in the ratio of the participant’s account balance to total participants’ account balances. Distributions and withdrawals are charged to participant accounts.
Benefits paid to participants
A participant’s total account is distributed upon retirement, disability, death, or termination of employment, unless the account value is greater than $1,000, in which case the participant may defer distribution until age 70-1/2. Distributions are made in cash, except the portion invested in common stock of the Company may be distributed in whole shares of such stock, if requested by the participant or beneficiary.
Prior to a termination of employment, a participant may withdraw any amount up to the value of his or her entire account
subject to certain restrictions (as defined in the Plan). H
owever, no portion of an actively employed participant’s
pretax
contribution account may be distributed to him or her before age 59-
1/2
,
unless the
A
dministrative
C
ommittee
, which consists of at least three members appointed by the Chief Executive Officer of the Company,
approves a
“
hardship” withdrawal (as defined in the Plan
)
.
Notes Receivable from participants
A participant may apply for a loan at any time provided that the participant is receiving compensation from which payroll deductions
can
be made. The amount of the loan cannot exceed the lesser of 50% of the participant’s total account, less the outstanding balance of all existing loans, or $50,000, reduced by the highest outstanding balance of existing loans during the 12
months preceding the effective date of such loan.
Additionally, in no event will a participant be permitted to have more than three loans outstanding at a time.
A loan is considered a note receivable of the Plan. The participant’s account will be reduced by the amount of the loan. Any repayment made will be allocated to the participant’s ac
count
in accordance with his or her current investment direction. Loans must be repaid in monthly installments through payroll deductions within 60
months. The
annual
interest rate
for a
loan is determined by
adding 1% to
T
he Wall Street Journal
Prime Rate or as otherwise determined by the
A
dministrative
C
ommittee at the time the application for the loan is made
. The rate may
not exceed the maximum rate for such loans permitted by law. The average rate of interest on loans approximated
4.5% and
4.
3
%
as of December
31, 201
6
and 201
5
, respectively
.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements of the Plan have been prepared in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles
or GAAP
).
Valuation of Investments and Income Recognition
The Plan’s investment
s
in the Master Trust
(
established by the Company and administered by the Trustee
)
h
ave
been determined based on the fair values
,
net asset values
and contract values
of the underlying investments of the Master Trust
,
as described in Note 5
.
Fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments in securities traded on national and over-the-counter exchanges are valued at the closing bid price of the security as of the last trading day of the year.
Investments in common/collective-trust funds are stated at
net asset
value as determined by the issuer of the funds based on the underlying investments. The stable value fund is stated at contract value
which is principal plus accrued interest
, the value at which participants ordinarily transact
(see Note 3)
.
Security transactions are recorded on the trade date. Distributions of common stock, if any, to participants are recorded at the market value of such stock at the time of distribution. Interest income is recorded on the accrual basis. Net appreciation includes the Plan’s gains and losses on investments bought and sold as well as held during the year. Dividends are recorded on the ex-dividend date. Investment manager fees are netted against Plan investment income and are not separately reflected. Consequently, management fees and operating expenses are reflected as a reduction of investment return for such investments. Expenses incurred in connection with the transfer of securities, such as brokerage commissions and transfer taxes, are added to the cost of such securities or deducted from the proceeds thereof.
Use of Estimates and Risks and Uncertainties
The preparation of financial statements in conformity with generally accepted accounting principles requires Plan management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. The Master Trust invests in various securities including
corporate stocks,
a stable value fund,
other
domestic equities
,
short-term investments
,
and
interest
s
in
common/collective-trusts
.
Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level
of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.
Notes Receivable from Participants
Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest.
Excess Contributions Payable
The Plan is required to return contributions received during the Plan year in excess of the IRC limits.
There were no excess contributions payable at December 31, 201
6
or 201
5
.
Payment of Benefits
Benefits are recorded when paid. There were
no
participants who elected to withdraw from the Plan
that
had not been paid at December
31, 201
6
or 201
5
.
Administrative Expenses
All reasonable expenses
for
administration of the Plan may be paid out of the Plan’s trust unless paid by the
Company
. For the
year
end
ed
December 31, 201
6
, participants were assesse
d
a flat fee of $7.50 per month to cover administrative expenses
.
NOTE 3:
STABLE VALUE FUND
— SYNT
HETIC GUARANTEED INVESTMENT CONT
RACT
The
Master Trust contains
a stable value investment option (
Fund
or Synthetic
Guaranteed Investment Contract
) that
meets the criteria of a fully benefit-responsive investment contract and is therefore reported at contract value. This investment
simulates the performance of a guaranteed investment contract (GIC)
, whereby participants execute
transactions at contract value. Contract value represents contributions made to the
F
und, plus earnings, less participant withdrawals. The
F
und is comprised of a portfolio of bonds and other fixed income securities and an investment contract issued by an insurance company or other financial institution, designed to provide a contract value “wrapper” around the fixed income portfolio to guarantee a specific interest rate which is reset quarterly and that cannot be less than zero. The wrapper contract provides that realized and unrealized gains and losses on the underlying fixed income portfolio are not reflected immediately in the net assets of the
F
und, but rather are amortized over the duration of the underlying assets through adjustments to the future interest crediting rate. Primary variables impacting future crediting rates of the Fund include the current yield, duration, and existing difference between market and contract value of the underlying assets within the wrapper contract.
Limitations on the Ability of the Synthetic Guaranteed Investment Contract to Transact at Contract Value
Certain events may limit the ability of the
Fund
to transact at contract value or may allow for the termination of the wrapper contract at less than contract value. The following employer-initiated events may limit the ability of the Fund to transact at contract value:
|
|
a.
|
A failure of the
Master Trust
to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA
|
b.
|
Any communication given to participants designed to influence a participant not to invest in the Fund or to transfer assets out of the Fund
|
c.
|
Any transfer of assets from the Fund directly into a competing investment option
|
d.
|
The establishment of a defined contribution plan that competes for employee contributions
|
e.
|
Complete or partial termination of
a Company sponsored plan
or merger
of
plan
s
|
The wrapper contract contains provisions that limit the ability of the Fund to transact at contract value upon the occurrence of certain events. These events include
:
any substantive modification of the Fund or the administration of the Fund that is not consented to by the wrapper issuer
;
any change in law, regulation, or administrative ruling applicable to a plan that could have a material adverse effect on the Fund’s cash flow
;
and employer-initiated t
ransactions as described above.
In the event that the wrapper contract fails to perform as intended, the Fund’s net asset value may decline if the market value of its assets declines. The Fund’s ability to receive amounts due pursuant to the wrapper contract is dependent on the third-party issuer’s ability to meet its financial obligations. The wrapper issuer’s ability to meet its contractual obligations under the wrapper contract may be affected by future economic and regulatory developments.
The Fund is unlikely to maintain a stable net asset value if, for any reason, it cannot obtain or maintain wrapper contracts covering all of its underlying assets. This could result from the Fund’s inability to promptly find a replacement wrapper contract following termination of a wrapper contract. Wrapper contracts are not transferable and have no trading market. There are a limited number of wrapper issuers. The Fund may lose the benefit of wrapper contracts on any portion of its assets in default in excess of a certain percentage of portfolio assets.
Company
management believes that the occurrence of events that may limit the ability of the
Fund
to transact at
contract value is not probable.
NOTE 4
:
INTEREST IN MASTER TRUST
The Plan’s investment assets are held in a trust account by the Trustee. Use of the Master Trust permits the commingling of investment assets of
the Company’s two defined contribution plans
.
The Plan has interests in certain assets held
in the Master Trust. Although assets of the plans are commingled in the Master Trust, the Recordkeeper maintains supporting records for the purpose of allocating the net gain or loss of the investment account to the participating plans.
The
investments
in
the Master Trust at December
31, 201
6
and 201
5
are
summarized as follows:
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
Vulcan Materials Company common stock
|
$
|
174,222,633
|
|
$
|
167,647,122
|
Other domestic equities
|
|
357,671
|
|
|
425,888
|
Short-term investments
|
|
0
|
|
|
42,894,163
|
Interests in common/collective-trusts
|
|
640,482,106
|
|
|
508,122,392
|
Stable value fund (Synthetic GIC)
|
|
22,668,844
|
|
|
23,078,014
|
|
|
|
|
|
|
Total investments
|
$
|
837,731,254
|
|
$
|
742,167,579
|
|
|
|
|
|
|
Percentage of Master Trust investments
|
|
|
|
|
|
associated with the Plan
|
|
87.1%
|
|
|
86.5%
|
The total investment income of the Master Trust for the year ended December
31, 201
6
is summarized as follows:
|
|
|
|
|
|
Interest
(1)
|
|
|
|
$
|
1,025,394
|
Dividends
|
|
|
|
|
1,252,291
|
Other income
|
|
|
|
|
0
|
Net investment appreciation
|
|
|
|
|
94,123,748
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
96,401,433
|
|
|
(1)
|
Excludes interest income on notes receivable from participants
.
|
NOTE
5:
FAIR VALUE MEASUREMENT
S
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Plan classifies its investments into a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1
—
Quoted prices in active markets for
identical assets or liabilities
Level
2
— Inputs that are derived principally from or corrobor
ated by observable market data
Level 3
— Inputs that are unobservable and significant to the
overall fair value measurement
Investment assets measured using
either
the net asset value
(NAV)
per share
practical expedient
or contract value
are not categorized in the fair value hierarchy.
The follo
wing tables set forth, by Level
within the fair value hierarchy, the Master Trust
’s
investment assets at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2016
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vulcan Materials Company common stock
|
$
|
174,222,633
|
|
$
|
174,222,633
|
|
$
|
0
|
|
$
|
0
|
|
Other domestic equities
|
|
357,671
|
|
|
357,671
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in the fair value hierarchy
|
$
|
174,580,304
|
|
$
|
174,580,304
|
|
$
|
0
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interests in common/collective trusts (at NAV)
|
|
640,482,106
|
|
|
|
|
|
|
|
|
|
|
Stable value fund (Synthetic GIC at contract value)
|
|
22,668,844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment assets
|
$
|
837,731,254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2015
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vulcan Materials Company common stock
|
$
|
167,647,122
|
|
$
|
167,647,122
|
|
$
|
0
|
|
$
|
0
|
|
Other domestic equities
|
|
425,888
|
|
|
425,888
|
|
|
0
|
|
|
0
|
|
Short-term investments
|
|
42,894,163
|
|
|
0
|
|
|
42,894,163
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in the fair value hierarchy
|
$
|
210,967,173
|
|
$
|
168,073,010
|
|
$
|
42,894,163
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interests in common/collective trusts (at NAV)
|
|
508,122,392
|
|
|
|
|
|
|
|
|
|
|
Stable value fund (Synthetic GIC at contract value)
|
|
23,078,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment assets
|
$
|
742,167,579
|
|
|
|
|
|
|
|
|
|
|
Asset
Valuation Techniques
The following methods and assumptions were used to estimate the values
of the Master Trust’s investments
.
T
here have been
no
changes in the methodologies used at December 31, 201
6
and 201
5, respectively
.
Vulcan Materials Company Common Stock
—
The fair value of
the Company’s
common stock is based on the quoted market price.
Other
Domestic Equities
— These investments include common stock, preferred stock and other equity investments.
F
air value is based on quoted market prices.
Short-term Investments
—
The
se
investment
s
include various publicly-traded money market funds that are valued
at the net asset value of units of a bank collective trust. The net asset value is based on the fair value of the underlying investments held by the fund less its liabilities.
Common/Collective
Trust
Fund
s
—
These investments include various index funds for domestic equities and fixed income securities, an actively managed fund for international equities, and a short-term investment fund for highly liquid
,
short-term
debt
securities.
Investments are valued at the net asset value of units of a bank collective trust.
The net asset value, as provided in each fund’s audited financial statement
s
, is
used as a practical expedient to estimate fair value. The net asset value is based on the fair value of the underlying investments held by the fund less its liabilities. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported net asset value. Were the Plan to initiate a full redemption of the collective trust, the investment advisor reserves the right to temporarily delay withdrawal from the collective trust in order to ensure that securities liquidations will be carried out in an orderly business manner.
Stable Value Fund
—
The
stable value fund is measured at contract value as described in Note 3. Contract value represents contributions made to the fund, plus earnings, less participant withdrawals.
The methods described above may produce a fair value calculation that may not be indicative of net asset value or reflective of future fair value. Furthermore, while the Plan’s valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in different estimates of fair value at the reporting date.
Net Asset Value Per Share
The following tables set forth information related to investment
assets
held by the Master Trust for which fair value is measured using net asset value per share
as a practical expedient
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2016
|
|
|
|
|
|
|
Unfunded
|
|
|
Redemption
|
|
|
Redemption
|
|
|
|
Fair Value
|
|
|
Commitment
|
|
|
Frequency
|
|
Notice Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interests in common/collective trusts
|
$
|
640,482,106
|
|
|
N/A
|
|
|
Daily
|
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
640,482,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2015
|
|
|
|
|
|
|
Unfunded
|
|
|
Redemption
|
|
|
Redemption
|
|
|
|
Fair Value
|
|
|
Commitment
|
|
|
Frequency
|
|
Notice Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interests in common/collective trusts
|
$
|
508,122,392
|
|
|
N/A
|
|
|
Daily
|
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
508,122,392
|
|
|
|
|
|
|
|
|
|
|
The Master Trust’s investment assets include interest
s
in various common/collective-trust funds. These common/collective-trust funds seek capital growth and income over the long-term by managing key risks that investors face over time
,
such as
shortfall, longevity, volatility and inflation. The underlying funds may invest in a wide variety of asset classes, including equity
and
fixed-income securities
.
The investment objective of each common/collective trust fund is to approximate as closely as practicable, before expenses, the performance of a benchmark index over the long-term, while providing participants the ability to purchase and redeem units on a daily basis.
NOTE 6
:
PLAN TERMINATION
Although it has not expressed any intention to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions set forth in the Employee
Retirement Income Security Act.
NOTE
7:
FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company
(
by letter dated
May 27, 2014
)
that the Plan and related trust were designed in accordance with the applicable regulations of the IRC. The Company and Plan administrator believe that the Plan is currently designed and operated in compliance with the applicable requirements of the IRC and that the Plan and the related trust
are
tax-exempt. Therefore, no provision for income taxes has been included in the Plan’s financial statements. GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain tax position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The Plan is subject to routine audits by the Internal Revenue Service; however, there are currently
no
audits for any tax periods in progress. The Plan’s management believes it is no longer subject to income tax examinations for years prior to 20
1
3
.
NOTE 8:
EXEMPT PARTY-IN-INTEREST TRANSACTIONS
Plan investments
include
shares of a common/collective trust fund managed by Northern Trust. As Northern Trust is the Trustee of the Plan, as defined by the Plan, th
ese
transaction
s
qualif
y
as exempt party-in-interest
transaction
s
.
At December
31, 201
6
and 201
5
, the Master Trust held
1,358,876
and
1,
724,173
shares, respectively, of common stock of the Company with a cost basis of
$
123,832,695
and
$
116,602,257
,
respectively. During the year ended December
31, 201
6
, the Master Trust recorded dividend income of $
1,252,291
attributable to its investment in the Company’s common stock.
NOTE 9: N
EW ACCOUNTING STANDARD
S
ACCOUNTING STANDARD
S
PENDING ADOPTION
MASTER TRUST REPORTING — In February 2017, the
Financial Accounting Standards Board (
FASB
)
issued
Accounting Standards Update (
ASU
)
2017-06, “Plan Accounting: Defined Benefit Pension Plans (Topic 960); Defined Contribution Pension Plans (Topic 962); Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting,” which amends the
presentation and disclosure
requirements for benefit plans that hold interests in master trusts. For each master trust in which a plan holds an interest, the standard requires that a plan’s interest in that master trust and any change in that interest to be presented in separate line items in the statement of net assets available for benefits and in the statement of changes in net assets available for benefits, respectively. The amendments in this
standard
remove the requirement to disclose the percentage interest in the master trust for plans with divided interests and will require all plans to disclose the master trust’s investments by general type and the dollar amount of the plan’s interest in each type of investment. Plans will also be required to disclose their master trust’s other asset and liability balances on a gross basis and the dollar amount of the plan’s interest in each balance. This ASU is effective for annual reporting periods beginning after December 15, 2018 and
must
be applied retrospectively to each period for which financial statements are presented. Early adoption is permitted.
We expect the adoption of this standard to result in changes to disclosures and presentation in the financial statements and related footnotes, and we are currently evaluating the extent of these changes.
CREDIT LOSSES — In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” which amends guidance on the impairment of financial instruments. The new guidance estimates credit losses based on expected losses, modifies the impairment model for available-for-sale debt securities and provides a simplified accounting model for purchased financial assets with credit deterioration. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 20
20
. Early adoption is permitted for annual reporting periods beginning after December 15, 2018. The Plan is currently evaluating the impact that the adoption of this standard will have on its financial statements and related disclosures.