SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


(a)	Basis of Presentation

The consolidated financial statements include the accounts of the company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses as well as related disclosures. Significant items that are subject to such estimates and judgments include allowances for doubtful accounts, reserves for excess and obsolete inventories, long-lived and intangible assets, warranty reserves, insurance reserves, income tax reserves and post-retirement obligations. On an ongoing basis, the company evaluates its estimates and assumptions based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The company's fiscal year ends on the Saturday nearest December 31. Fiscal years 2018, 2017, and 2016 ended on December 29, 2018, December 30, 2017 and December 31, 2016, respectively, with each year including 52 weeks.

Certain prior year amounts have been reclassified to be consistent with current year presentation, including the non-operating components of pension benefit previously reported in Selling, general and administrative expenses to Net periodic pension benefit (other than service cost).


(b)	Cash and Cash Equivalents

The company considers all short-term investments with original maturities of three months or less when acquired to be cash equivalents. The company’s policy is to invest its excess cash in interest-bearing deposits with major banks that are subject to minimal credit and market risk.


(c)	Accounts Receivable

Accounts receivable, as shown in the consolidated balance sheets, are net of allowances for doubtful accounts of $13.6 million and $13.2 million at December 29, 2018 and December 30, 2017, respectively. At December 29, 2018, all accounts receivable are expected to be collected within one year.

(d) Inventories

Inventories are composed of material, labor and overhead and are stated at the lower of cost or net realizable value. Costs for inventory have been determined using the first-in, first-out ("FIFO") method. The company estimates reserves for inventory obsolescence and shrinkage based on its judgment of future realization. Inventories at December 29, 2018 and December 30, 2017 are as follows:



	2018		2017
	(dollars in thousands)
Raw materials and parts	$	245,976	$	180,559
Work in process	51,164		38,917
Finished goods	224,670		205,163
	$	521,810	$	424,639


(e)	Property, Plant and Equipment

Property, plant and equipment are carried at cost as follows:



	2018			2017
	(dollars in thousands)
Land	$	32,523		$	28,996
Building and improvements	196,743			175,678
Furniture and fixtures	64,586			54,362
Machinery and equipment	188,454			165,157
	482,306			424,193
Less accumulated depreciation	(167,737		)	(142,278		)
	$	314,569		$	281,915

Property, plant and equipment are depreciated or amortized on a straight-line basis over their useful lives based on management's estimates of the period over which the assets will be utilized to benefit the operations of the company. The useful lives are estimated based on historical experience with similar assets, taking into account anticipated technological or other changes. The company periodically reviews these lives relative to physical factors, economic factors and industry trends. If there are changes in the planned use of property and equipment or if technological changes were to occur more rapidly than anticipated, the useful lives assigned to these assets may need to be shortened, resulting in the recognition of increased depreciation and amortization expense in future periods.

Following is a summary of the estimated useful lives:



Description		Life
Building and improvements		20 to 40 years
Furniture and fixtures		3 to 7 years
Machinery and equipment		3 to 10 years

Depreciation expense amounted to $35.8 million, $29.7 million and $26.2 million in fiscal 2018, 2017 and 2016, respectively.

Expenditures which significantly extend useful lives are capitalized. Maintenance and repairs are charged to expense as incurred. Asset impairments are recorded whenever events or changes in circumstances indicate that the recorded value of an asset is greater than the sum of its expected future undiscounted cash flows.


(f)	Goodwill and Other Intangibles

The company’s business acquisitions result in the recognition of goodwill and other intangible assets, which are a significant portion of the company’s total assets. The company recognizes goodwill and other intangible assets under the guidance of ASC Topic 350-10, Intangibles - Goodwill and Other. Goodwill represents the excess of acquisition costs over the fair value of the net tangible assets and identifiable intangible assets acquired in a business combination. Identifiable intangible assets are recognized separately from goodwill and include trademarks and trade names, technology, customer relationships and other specifically identifiable assets. Trademarks and trade names are deemed to be indefinite-lived. Goodwill and indefinite-lived intangible assets are not amortized, but are subject to impairment testing.

The company performs the annual impairment assessment for goodwill and indefinite-lived intangible assets as of first day of the fourth quarter and more frequently if indicators of impairment exist. The goodwill impairment test is performed at the reporting unit level. The company initially performs a qualitative analysis to determine if it is more likely than not that the goodwill balance or indefinite-life intangible asset is impaired. In conducting a qualitative assessment, the Company analyzes a variety of events or factors that may influence the fair value of the reporting unit or indefinite-life intangible, including, but not limited to: macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, share price and other relevant factors.

If an indicator of impairment is determined from the qualitative analysis, then the company will perform a two-step quantitative analysis. First, the fair value of each reporting unit is compared to its carrying value. If the fair value of the reporting unit is less than its carrying value, the company performs a hypothetical purchase price allocation based on the reporting unit’s fair value to determine the fair value of the reporting unit’s goodwill. Any resulting difference will be a charge to Impairment of intangible assets in the Consolidated Statements of Earnings in the period in which the determination is made. Fair value is determined using a combination of present value techniques and market prices of comparable businesses.

The company completed its annual impairment test for goodwill as of September 30, 2018. The company performed a qualitative assessment to evaluate goodwill for all reporting units. Based on the qualitative assessment it was determined there was no impairment of goodwill. The company has not recognized any goodwill impairments and therefore no accumulated impairment loss.

Goodwill is allocated to the business segments as follows (in thousands):



	Commercial Foodservice			Food Processing			Residential Kitchen			Total
Balance as of December 31, 2016	$	542,090		$	134,680		$	415,952		$	1,092,722

Goodwill acquired during the year	118,419			58,899			—			177,318
Measurement period adjustments to goodwill acquired in prior year	(36,408		)	41			—			(36,367		)
Exchange effect	7,350			4,658			19,129			31,137

Balance as of December 30, 2017	$	631,451		$	198,278		$	435,081		$	1,264,810

Goodwill acquired during the year	487,032			30,624			—			517,656
Measurement period adjustments to goodwill acquired in prior year	(1,559		)	(5,679		)	—			(7,238		)
Exchange effect	(14,857		)	(4,169		)	(13,027		)	(32,053		)

Balance as of December 29, 2018	$	1,102,067		$	219,054		$	422,054		$	1,743,175

Intangible assets consist of the following (in thousands):



	December 29, 2018						December 30, 2017
	Estimated Weighted Avg Remaining Life	Gross Carrying Amount		Accumulated Amortization			Estimated Weighted Avg Remaining Life	Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationships	9.5	$	644,145	$	(222,661	)	5.2	$	330,496	$	(171,005	)
Backlog	2.8	27,065		(24,755		)	0.8	19,689		(18,081		)
Developed technology	5.9	39,624		(20,998		)	4.2	22,485		(18,248		)
		$	710,834	$	(268,414	)		$	372,670	$	(207,334	)
Indefinite-lived assets:
Trademarks and tradenames		$	918,604					$	615,090

The company completed its annual impairment for other intangibles as of September 30, 2018. We identified indicators of impairment associated with certain tradenames in within the Food Processing and Residential Kitchen reporting units based on the qualitative assessment, which required the completion of a quantitative impairment assessment. The primary indicator of impairment was lower than expected revenue performance in the current year. Based on the results of the quantitative assessment, the company determined there was no impairment of any of the indefinite-lived intangible assets.

In performing the quantitative assessment of indefinite-life intangible assets, primarily tradenames, the company estimated the fair value using the relief-from-royalty method which requires assumptions related to projected revenues; assumed royalty rates that could be payable if we did not own the brand; and a market participant discount rate based on a weighted-average cost of capital.

The company elected to perform a qualitative assessment on the other indefinite-life intangible assets noting no events that indicated that the fair value was less than carrying value that would require a quantitative impairment assessment.

The estimates of future cash flows used in determining the fair value of goodwill and intangible assets involve significant management judgment and are based upon assumptions about expected future operating performance, economic conditions, market conditions and cost of capital. Inherent in estimating the future cash flows are uncertainties beyond our control, such as changes in capital markets. The actual cash flows could differ materially from management's estimates due to changes in business conditions, operating performance and economic conditions.

During 2017 testing, the company determined that the Viking tradename, within the Residential Kitchen Equipment Group, was impaired. The company estimated the fair value of the tradename using a relief from royalty method under the income approach. The decline in fair value of the Viking tradename was primarily the result of weaker than expected revenue performance in 2017 and a corresponding reduction of future revenue expectations. The impairment resulted from the decline in revenues attributable, in part, to the product recall announced in 2015 related to products manufactured prior to the acquisition of Viking. The fair value of the Viking tradename was estimated to be $93.0 million as compared to the carrying value of $151.0 million and resulted in a $58.0 million indefinite-lived intangible asset impairment charge.

The aggregate intangible amortization expense was $60.0 million, $38.6 million and $29.9 million in 2018, 2017 and 2016, respectively. The estimated future amortization expense of intangible assets is as follows (in thousands):



2019	$	59,995
2020	59,079
2021	55,190
2022	51,184
2023	44,276
2024 and thereafter	172,696
	$	442,420


(g)	Accrued Expenses

Accrued expenses consist of the following at December 29, 2018 and December 30, 2017, respectively:



	2018		2017
	(dollars in thousands)
Accrued payroll and related expenses	$	74,952	$	67,935
Accrued warranty	59,451		52,834
Contract liabilities	57,913		31,069
Accrued customer rebates	45,740		48,590
Accrued sales and other tax	19,452		20,881
Accrued professional fees	17,313		18,250
Accrued product liability and workers compensation	16,284		11,976
Accrued agent commission	11,969		11,035
Other accrued expenses	64,372		59,601

	$	367,446	$	322,171


(h)	Litigation Matters

From time to time, the company is subject to proceedings, lawsuits and other claims related to products, suppliers, employees, customers and competitors. The company maintains insurance to partially cover product liability, workers compensation, property and casualty, and general liability matters. The company is required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of accrual required, if any, for these contingencies is made after assessment of each matter and the related insurance coverage. The required accrual may change in the future due to new developments or changes in approach such as a change in settlement strategy in dealing with these matters. The company does not believe that any such matter will have a material adverse effect on its financial condition, results of operations or cash flows of the company.


(i)	Accumulated Other Comprehensive Income (Loss)

The following table summarizes the components of accumulated other comprehensive income (loss) as reported in the consolidated balance sheets:



	2018			2017
	(dollars in thousands)
Unrecognized pension benefit costs, net of tax of ($36,719) and ($43,592)	$	(170,938	)	$	(203,063	)
Unrealized gain on interest rate swap, net of tax of $2,543 and $4,243	7,233			6,365
Currency translation adjustments	(112,771		)	(69,721		)

	$	(276,476	)	$	(266,419	)

Changes in accumulated other comprehensive income (loss) ⁽¹⁾ were as follows (in thousands):



	Currency Translation Adjustment			Pension Benefit Costs			Unrealized Gain/(Loss) Interest Rate Swap			Total
Balance as of December 31, 2016	$	(116,411	)	$	(173,394	)	$	5,482		$	(284,323	)
Other comprehensive income before reclassification	46,690			(31,683		)	1,822			16,829
Amounts reclassified from accumulated other comprehensive income	—			2,014			(939		)	1,075
Net current-period other comprehensive income	$	46,690		$	(29,669	)	$	883		$	17,904
Balance as of December 30, 2017	$	(69,721	)	$	(203,063	)	$	6,365		$	(266,419	)
Adoption of ASU 2018-02 ⁽²⁾	—			(487		)	1,619			1,132
Other comprehensive income before reclassification	(43,050		)	29,527			(1,166		)	(14,689		)
Amounts reclassified from accumulated other comprehensive income	—			3,085			415			3,500
Net current-period other comprehensive income	$	(43,050	)	$	32,125		$	868		$	(10,057	)
Balance as of December 29, 2018	$	(112,771	)	$	(170,938	)	$	7,233		$	(276,476	)

(1) As of December 29, 2018 pension and interest rate swap amounts are net of tax of $(36.7) million and $2.5 million, respectively. During the twelve months ended December 29, 2018, the adjustments to pension benefit costs and unrealized gain/(loss) interest rate swap were net of tax of $6.9 million and $(1.7) million, respectively.

(2) As of December 31, 2017, the company adopted ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The adoption of this guidance resulted in the reclassification of $1.1 million of stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 from accumulated other comprehensive income to retained earnings.

(j) Fair Value Measures

ASC 820 Fair Value Measurements and Disclosures defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into the following levels:

Level 1 – Quoted prices in active markets for identical assets or liabilities

Level 2 – Inputs, other than quoted prices in active markets, that are observable either directly or indirectly

Level 3 – Unobservable inputs based on our own assumptions

The company’s financial assets and liabilities that are measured at fair value are categorized using the fair value hierarchy at December 29, 2018 and December 30, 2017 are as follows (in thousands):



	Fair Value Level 1		Fair Value Level 2		Fair Value Level 3		Total
As of December 29, 2018
Financial Assets:
Interest rate swaps	$	—	$	13,487	$	—	$	13,487

Financial Liabilities:
Interest rate swaps	$	—	$	4,125	$	—	$	4,125
Contingent consideration	$	—	$	—	$	3,566	$	3,566

As of December 30, 2017
Financial Assets:
Interest rate swaps	$	—	$	10,266	$	—	$	10,266

Financial Liabilities:
Contingent consideration	$	—	$	—	$	1,780	$	1,780

The contingent consideration, as of December 29, 2018, relates to the earnout provisions recorded in conjunction with the acquisition of Josper. The contingent consideration, as of December 30, 2017, relates to the earnout provisions recorded in conjunction with the acquisitions of Desmon and Scanico.

The earnout provisions associated with these acquisitions are based upon performance measurements related to sales and earnings, as defined in the respective purchase agreements. On a quarterly basis, the company assesses the projected results for each of the acquisitions in comparison to the earnout targets and adjusts the liability accordingly.


(k)	Foreign Currency

Foreign currency transactions are accounted for in accordance with ASC 830 Foreign Currency Translation. The income statements of the company’s foreign operations are translated at the monthly average rates. Assets and liabilities of the company’s foreign operations are translated at exchange rates at the balance sheet date. These translation adjustments are not included in determining net income for the period but are disclosed and accumulated in a separate component of stockholders’ equity. Exchange gains and losses on foreign currency transactions are included in determining net income for the period in which they occur. These transactions amounted to a loss of $2.6 million, $2.4 million and $1.9 million in 2018, 2017 and 2016, respectively, and are included in other expense on the statements of earnings.


(l)	Shipping and Handling Costs

Fees billed to the customer for shipping and handling are classified as a component of net revenues. Shipping and handling costs are included in cost of products sold.


(m)	Warranty Costs

In the normal course of business, the company issues product warranties for specific product lines and provides for the estimated future warranty cost in the period in which the sale is recorded. The estimate of warranty cost is based on contract terms and historical warranty loss experience that is periodically adjusted for recent actual experience. Because warranty estimates are forecasts that are based on the best available information, claims costs may differ from amounts provided. Adjustments to initial obligations for warranties are made as changes in the obligations become reasonably estimable.

A rollforward of the warranty reserve for the fiscal years 2018 and 2017 are as follows:



	2018			2017
	(dollars in thousands)
Beginning balance	$	52,834		$	40,851
Warranty reserve related to acquisitions	5,884			7,769
Warranty expense	62,314			58,398
Warranty claims paid	(61,581		)	(54,184		)
Ending balance	$	59,451		$	52,834


(n)	Research and Development Costs

Research and development costs, included in cost of sales in the consolidated statements of earnings, are charged to expense when incurred. These costs were $35.3 million, $29.1 million and $26.3 million in fiscal 2018, 2017 and 2016, respectively.


(o)	Non-Cash Share-Based Compensation

The company estimates the fair value of restricted share grants and stock options at the time of grant and recognizes compensation costs over the vesting period of the awards and options. Non-cash share-based compensation expense of $2.5 million, $6.2 million and $27.9 million was recognized for fiscal 2018, 2017 and 2016, respectively, associated with restricted share grants. The company recorded a related tax benefit of $0.0 million, $2.4 million and $10.5 million in fiscal 2018, 2017 and 2016, respectively.

As of December 29, 2018, there was $1.5 million of total unrecognized compensation cost related to nonvested restricted share grant compensation arrangements, which will be recognized over a weighted average life of 1.17 years.

Share grant awards not subject to market conditions for vesting are valued at the closing share price of the company’s stock as of the date of the grant. The company issued 132,038 and 76,788 restricted share grant awards in 2018 and 2017, respectively, with a fair value of $13.3 million and $10.5 million, respectively. Share grant awards issued in 2018 and 2017 are generally performance based and were not subject to market conditions. The fair value of $100.50 and $136.29 per share for the awards for 2018 and 2017, respectively, represent the closing share price of the company’s stock as of the date of grant.


(p)	Earnings Per Share

“Basic earnings per share” is calculated based upon the weighted average number of common shares actually outstanding, and “diluted earnings per share” is calculated based upon the weighted average number of common shares outstanding and other dilutive securities.

The company’s potentially dilutive securities consist of shares issuable on exercise of outstanding options and vesting of restricted stock grants computed using the treasury method and amounted to 28,000, 4,000, and 55,000 for fiscal 2018, 2017 and 2016, respectively. There were no anti-dilutive equity awards excluded from common stock equivalents for 2018, 2017 or 2016.


(q)	Consolidated Statements of Cash Flows

Cash paid for interest was $55.3 million, $25.9 million and $21.0 million in fiscal 2018, 2017 and 2016, respectively. Cash payments totaling $79.0 million, $123.3 million, and $89.0 million were made for income taxes during fiscal 2018, 2017 and 2016, respectively.


(r)	New Accounting Pronouncements

Accounting Pronouncements - Recently Adopted

In May 2014, the Financial Accounts Standards Board ("FASB") issued ASU No. 2014-09, Revenue from Contracts with Customers. This update amends the current guidance on revenue recognition related to contracts with customers and requires additional disclosures. We adopted this guidance on December 31, 2017 using the modified retrospective method. Under this method, we recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The cumulative adjustment to the opening balance of retained earnings was $4.4 million. For additional information related to the impact of adopting this guidance, see above (l) revenue recognition.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The amendments in ASU-15 address eight specific cash flow classification issues to reduce current and potential future diversity in practice. The adoption of this guidance did not have a material impact on the company's Consolidated Statements of Cash Flows.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, which requires companies to account for the income tax effect of intercompany sales and transfers of assets other than inventory when the transfer occurs. Under previous guidance the income tax effects of intercompany transfers of assets were deferred until the asset had been sold to an outside party or otherwise recognized. The adoption of this guidance did not have an impact on the company's Consolidated Financial Statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in ASU-01 clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The adoption of this guidance did not have a material impact on the company's Consolidated Financial Statements.

In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in ASU-07 require that an employer report the service costs component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net periodic pension cost and net periodic postretirement benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. We adopted this guidance retrospectively on December 31, 2017 using the practical expedient which permits utilizing amounts previously disclosed in its employee retirement plans note as the prior period estimation basis for the required retrospective presentation requirements. For additional information on the adoption of this guidance, see Note 11 of the Consolidated Financial Statements.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This guidance allows for the reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 from accumulated other comprehensive income to retained earnings. The adoption of this guidance did not have a material impact on the company's Consolidated Balance Sheet.

Accounting Pronouncements - To be adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The amendments under this pronouncement will change the way all leases with a duration of one year or more are treated. Under this guidance, lessees will be required to capitalize virtually all leases on the balance sheet as a right-of-use asset and an associated financing lease liability or operating lease liability. The FASB issued multiple amendments to the standard which provide clarification, additional guidance, practical expedients and other improvements to the ASU. The ASU is effective for annual reporting periods, and interim periods within those reporting periods, beginning after December 15, 2018. The company plans to utilize the new optional transition method to use the effective date as the date of initial application on transition. As a result the company will not adjust its comparative period financial information or make the new required leases disclosures for periods before the effective date. The company has elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. The company developed a project plan for implementation, surveyed the company's business, assessed the company's portfolio of leases and compiled a central repository of all leases. The company has also selected a lease accounting software solution to support the new reporting requirements and has loaded required lease data elements into the software solution. To ensure completeness of the population of leases, the company cross referenced year end disclosure information, recorded lease expense and survey responses from the businesses. The company has identified and implemented appropriate changes to policies, procedures and controls pertaining to its existing and future lease arrangements to support recognition and disclosure requirements under the new standard.

The company continues to assess the effects of adoption on the financial statements and believes the most material impact will be the recognition of new right-of-use (ROU) assets and lease liabilities on the Consolidated Balance Sheet for operating leases. The company expects to recognize of $80.0 million to $90.0 million of right-of-use assets upon adoption and lease liabilities on its Consolidated Balance Sheet. The lease liabilities to be recognized will be measured based upon the present value of minimum future payments and the ROU assets to be recognized will be equal to lease liabilities, adjusted for prepaid and accrued rent balances which are recorded in the Consolidated Balance Sheet as of December 30, 2018. The company does not anticipate the new standard will have a significant impact on the Consolidated Statements of Earnings or the Consolidated Statements of Cash Flows. There will also be no impact on existing debt covenants.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in ASU-04 simplify the subsequent measurement of goodwill, by removing the second step of the goodwill impairment test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value. The new guidance does not amend the optional qualitative assessment of goodwill impairment. This ASU is effective for annual reporting periods, and interim reporting periods, beginning after December 15, 2019. Early adoption is permitted for testing dates after January 1, 2017. The company is evaluating the application of this ASU on the company's annual impairment test. The company does not expect the adoption of this ASU to have a material impact on its Consolidated Financial Statements.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments in ASU-12 provide new guidance about income statement classification and eliminates the requirement to separately measure and report hedge ineffectiveness. The entire change in fair value for qualifying hedge instruments included in the effectiveness will be recorded in other comprehensive income (OCI) and amounts deferred in OCI will be reclassified to earnings in the same income statement line item in which the earnings effect of the hedged item is reported. This ASU is effective for annual reporting periods, and interim periods with those reporting periods, beginning after December 15, 2018 with early adoption permitted. The company is currently evaluating the impacts the ASU will have on its Consolidated Financial Statements.

In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting. The amendments in ASU-08 simplify several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation—Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. This ASU is effective for annual reporting periods, and interim periods with those reporting periods, beginning after December 15, 2018 with early adoption permitted. The company does not expect the adoption of this ASU to have a material impact on its Consolidated Financial Statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in ASU-13 remove, modify and add various disclosure requirements around the topic in order to clarify and improve the cost-benefit nature of disclosures. This ASU is effective for annual reporting periods, and interim periods with those reporting periods, beginning after December 15, 2019 with early adoption permitted. The company does not expect the adoption of this ASU to have a material impact on its Consolidated Financial Statements.

In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20). The amendments in ASU-14 remove, modify and add various disclosure requirements around the topic in order to clarify and improve the cost-benefit nature of disclosures. This ASU is effective for annual reporting periods, and interim periods with those reporting periods, beginning after December 15, 2020 with early adoption permitted. The amendments must be applied on a retrospective basis for all periods presented. The company is currently evaluating the impacts the adoption of this ASU will have on its Consolidated Financial Statements.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40). The amendments in ASU-15 align the requirements for capitalizing implementation costs in a service contract hosting arrangement with those of developing or obtaining internal-use software. This ASU is effective for annual reporting periods, and interim periods with those reporting periods, beginning after December 15, 2019 with early adoption permitted. The company does not expect the adoption of this ASU to have a material impact on its Consolidated Financial Statements.

In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments, which clarifies that receivables arising from operating leases are not within the scope of the credit losses standard, but rather, should be accounted for in accordance with the lease standard. This ASU has the same transition requirements and effective date as ASU No. 2016-13. The company does not expect this ASU to have a material impact on its Consolidated Financial Statements.