NEW ACCOUNTING PRONOUNCEMENTS

12 Months Ended

Dec. 31, 2019

Accounting Changes and Error Corrections [Abstract]

The following is a summary of new accounting pronouncements that apply or may apply to our business.

New Lease Pronouncement

Effects of Adoption - In February 2016, and as subsequently amended, the Financial Accounting Standards Board (the “FASB”) issued a new standard which requires a lessee to recognize on its balance sheet the assets and liabilities associated with the rights and obligations created by leases. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of costs and cash flows arising from a lease.

We adopted the standard effective January 1, 2019 using the modified retrospective adoption method which allowed us to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of accumulated deficit. In connection with our adoption of the new lease pronouncement, we recorded a charge to accumulated deficit of $8.5, reflecting the effects of (1) an impairment of a right-of-use (“ROU”) asset resulting from the rationalization of a business in our Food and Beverage segment during the fourth quarter of 2018 and, to a lesser extent, (2) the reclassification of a former capital lease to an operating lease. See Note 8 for additional information regarding the rationalization of the Food and Beverage business.

We have elected to use the practical expedient package that allows us to not reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. We additionally elected to use the practical expedients that allow lessees to: (1) treat the lease and non-lease components of leases as a single lease component for all of our leases and (2) not recognize on our balance sheet leases with terms less than twelve months.

We determine if an arrangement is a lease at inception. We lease certain manufacturing facilities, warehouses, administrative offices, sales and service locations, machinery and equipment, vehicles and office equipment under operating leases. Under the new standard, operating leases result in the recognition of ROU assets and lease liabilities on the consolidated balance sheet. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Under the new standard, operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, upon adoption of the new standard, we used our country-specific estimated incremental borrowing rate based on the information available, including lease term, as of January 1, 2019 to determine the present value of lease payments. Operating lease ROU assets are adjusted for any lease payments made prior to January 1, 2019 and any lease incentives. Certain of our leases may include options to extend or terminate the original lease term. We generally conclude that we are not reasonably certain to exercise these options due primarily to the length of the original lease term and our assessment that economic incentives are not reasonably certain to be realized. Operating lease expense under the new standard is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components and, as noted above, we account for the lease and non-lease components as a single lease component under the new standard. Our current finance lease obligations consist primarily of manufacturing facility leases.

Upon adoption of the new standard, we reclassified a single lease from capital to operating based on specific transition requirements for build-to-suit arrangements recognized as capital leases under the prior accounting standard. Upon derecognizing the former capital lease asset and liability, we determined the lease to be operating under the new standard. Refer to the “Summary of Effects of Lease Accounting Standard Update Adopted in 2019” below for further details.

Leases accounted for under the new standard have initial remaining lease terms of 1 to 15 years. Certain of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

See Note 7 for additional details regarding the Company’s leases.

Summary of Effects of Lease Accounting Standard Update Adopted in 2019

The cumulative effects of the changes made to our consolidated balance sheet as of the beginning of 2019 as a result of the adoption of the accounting standard update on leases, including those included in continuing operations and discontinued operations, were as follows:


			Effects of adoption of lease accounting standard update related to:
Balance Sheet	As filed December 31, 2018		Recognition of Operating Leases		Reclassification of Capital Lease to Operating Lease		Impairment of Operating Lease ROU Asset		Total effects of adoption		With effect of lease accounting standard update January 1, 2019
Assets
Other current assets	$	33.3	$	(0.9)	$	—	$	—	$	(0.9)	$	32.4
Assets of discontinued operations - current	244.4		(0.3)		—		—		(0.3)		244.1
Buildings and leasehold improvements	175.5		—		(7.2)		—		(7.2)		168.3
Accumulated depreciation	(284.9)		—		0.7		—		0.7		(284.2)
Other assets	111.1		57.2		5.8		(8.4)		54.6		165.7
Assets of discontinued operations - long-term	412.4		14.6		—		—		14.6		427.0

Liabilities
Accrued expenses	149.0		16.1		0.9		—		17.0		166.0
Current maturities of long-term debt	20.8		—		(0.7)		—		(0.7)		20.1
Liabilities of discontinued operations - current	133.4		4.1		—		—		4.1		137.5
Long-term debt	718.3		—		(6.1)		—		(6.1)		712.2
Other long-term liabilities	67.5		40.2		5.3		—		45.5		113.0
Liabilities of discontinued operations - long-term	60.6		10.2		—		—		10.2		70.8

Equity
Accumulated deficit	(265.6)		—		(0.1)		(8.4)		(8.5)		(274.1)

Other New Accounting Pronouncements

In June 2016, and as subsequently amended, the FASB issued an amendment on the measurement of credit losses. This amendment requires companies to estimate all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This amendment is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company has concluded that this amendment applies primarily to its “Accounts Receivable, net” balance and has performed an initial analysis of its historical accounts receivable collection history in order to assess the potential impact that application of the amendment may have on its accounts receivable reserves, when compared to accounts receivable reserves recognized as of December 31, 2019 based on our current accounts receivable reserve methodologies. Based on such analysis, the Company does not expect this amendment, upon its adoption effective January 1, 2020, to have a significant impact on its consolidated financial statements.

In March 2018, the FASB issued an amendment to update the Codification and XBRL Taxonomy as a result of the Tax Act, and to incorporate SAB 118 as released by the SEC, which provides guidance for companies that were not able to complete their accounting for the income tax effects of the Tax Act in the period of enactment. This amendment was effective for interim and annual reporting periods beginning after December 15, 2018. The Company completed its accounting for the impact of this tax reform legislation as of December 31, 2018. Our adoption of this amendment had no impact on our consolidated financial statements during 2019.

In August 2018, the FASB issued an amendment to modify the disclosure requirements related to fair value measurements. This amendment removes, modifies and adds certain disclosures required under current guidance. For

example, the amendment removes the requirements to disclose the amount of and reason for transfers between Level 1 and Level 2 of the fair value hierarchy as well as the policy for timing of transfers between levels, and requires certain additional disclosures related to Level 3 fair value measurements. This amendment is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact this amendment may have on its consolidated financial statements.

In August 2018, the FASB issued an amendment to modify the disclosure requirements related to defined benefit plans. This amendment removes, clarifies and adds certain disclosures required under current guidance. For example, the amendment removes the requirement to disclose the effects of a one-percentage point change in assumed health care cost trend rates on postretirement benefit obligations and service and interest cost components of periodic benefit costs, and requires an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This amendment is effective for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. The Company is evaluating the impact this amendment may have on its consolidated financial statements.

In August 2018, the FASB issued an amendment to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). Among other changes in requirements, the amendments in this update also require an entity to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. This amendment is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact this amendment may have on its consolidated financial statements.