Recently Adopted Accounting Pronouncements

ASU 2016-02, Leases (Topic 842)

On January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) 842, Leases, and all related amendments using the modified retrospective method whereby the cumulative effect of adopting the standard was recognized in equity at the date of initial application. Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The most prominent among the changes in the standard is the recognition of right-of-use assets and lease liabilities for all leases (except for short-term leases). The Company made a policy election for all asset classes to exclude the balance sheet recognition of leases with a lease term, at lease commencement, of 12 months or less and no purchase option reasonably certain to be exercised. The standard also requires additional disclosures to help financial statement users better understand the amount, timing and uncertainty of cash flows arising from lease transactions. The new standard resulted in a material increase in right-of-use assets and lease liabilities on the Company’s condensed consolidated balance sheet beginning in 2019, and had no impact on our condensed consolidated income statement or to cash from (used in) operating, financing or investing activities on our condensed consolidated cash flow statements.

The difference between the lease assets and lease liabilities was recorded as an adjustment to the opening balance of retained earnings. The cumulative effects of the changes made to the Company’s condensed consolidated balance sheet as of January 1, 2019 were as follows:



	Balance as of December 31, 2018		Adjustments due to adoption of ASC 842			Balance as of January 1, 2019

Prepaid expenses	$	36,878	$	(2,704	)	$	34,174
Assets held for sale	103,898		9,559			113,457
Operating lease right-of-use assets	—		102,268			102,268
Accrued liabilities	98,907		(336		)	98,571
Current operating lease liabilities	—		27,229			27,229
Liabilities held for sale	71,195		9,561			80,756
Long-term operating lease liabilities	—		75,276			75,276
Retained earnings	576,025		(2,607		)	573,418

The following table summarizes the impact of adopting the new standard on the Company’s condensed consolidated balance sheet as of March 31, 2019.



	March 31, 2019
Assets held for sale	$	9,136
Operating lease right-of-use assets	92,508
Current operating lease liabilities	26,216
Liabilities held for sale	8,884
Long-term operating lease liabilities	68,905

The Company elected the package of practical expedients on existing leases as of the effective date which permits the Company to carry forward lease classification and not reassess existing contracts in order to determine if the contracts contain a lease. The Company did not elect the hindsight practical expedient. Additionally, the Company elected the practical expedient to not reassess whether any expired or existing land easements contain leases.

The Company adopted the following Accounting Standard Updates (“ASU”) during the three months ended March 31, 2019, which related to the fair value and financial instruments footnote disclosures:



Standard	Description	Impact	Effective Date
ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities	Eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item.	Adoption resulted in the removal of the disclosure of the ineffective portion of the gain (loss) reclassified from Accumulated Other Comprehensive Income (“AOCI”) to income.	January 1, 2019
ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting	Adds the OIS rate based on SOFR as a U.S. benchmark interest rate to facilitate the LIBOR to SOFR transition and provide sufficient lead time for entities to prepare for changes to interest rate risk hedging strategies for both risk management and hedge accounting purposes.	No impact	January 1, 2019

Recently Issued Accounting Pronouncements

The Company considered the recently issued accounting pronouncement summarized as follows, which could have a material impact on its condensed consolidated financial statements or disclosures:



Standard	Description	Impact	Effective Date
ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement	This amendment modifies the disclosure requirements for ASC Topic 820 by removing and modifying existing disclosure requirements as well as adding new disclosures.	The Company is undertaking a comprehensive evaluation of the impacts of adopting this standard and expects that the adoption of this standard will primarily result in additional quantitative disclosures for Level 3 fair value measurements.	January 1, 2020