Change in Accounting Principles

12 Months Ended

Dec. 31, 2016

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Change in Accounting Principles

3. Change in Accounting Principles

Change in Method of Accounting for Inventory Valuation

In 2015, the Company changed its method of inventory costing for certain inventory in its Office and Facilities (formerly known as Business and Facility Essentials and separately known as Supply and Lagasse) operating segment to the LIFO method from the FIFO accounting method.  Prior to the change, the Office and Facilities operating segment was comprised of two separate legal entities that each utilized different methods of inventory costing: LIFO for inventories related to office products which is comprised mainly of office product and breakroom categories and FIFO for inventories related to facility products which consists of the janitorial product category. The LIFO method is preferable because i) the Company was executing an initiative to combine the office products and janitorial categories onto a single information technology and operating platform, ii) it allows for consistency in financial reporting (all domestic inventories are on LIFO), and iii) it allows for better matching of costs and revenues as historical inflationary inventory acquisition prices are expected to continue in the future and the LIFO method uses the current acquisition cost to value cost of goods sold. The change was reported through retrospective application of the new accounting policy to all periods presented. The impact of the change in the method of inventory costing for certain inventory in 2015 was a $4.2 million decrease to cost of goods sold, $2.3 million increase to net income, and $0.06 increase in basic and diluted EPS.

(dollars in thousands)	Year Ended December 31,
	2014
	Previous Method			As Reported			Effect of Change
Consolidated Statement of Income
Cost of goods sold	$	4,516,704		$	4,524,676		$	7,972
Gross profit		810,501			802,529			(7,972	)
Warehousing, marketing, and administrative expenses		592,050			595,673			3,623
Income before income taxes		194,483			182,888			(11,595	)
Income tax expense		75,285			70,773			(4,512	)
Net income		119,198			112,115			(7,083	)
Net income per share
Basic	$	3.08		$	2.90		$	(0.18	)
Diluted	$	3.05		$	2.87		$	(0.18	)
Consolidated Statement of Comprehensive Income
Net income	$	119,198		$	112,115		$	(7,083	)
Comprehensive income		96,295			89,212			(7,083	)
Consolidated Statement of Cash Flows
Net income	$	119,198		$	112,115		$	(7,083	)
Deferred income taxes		(6,367	)		(10,879	)		(4,512	)
Inventories		(30,319	)		(18,724	)		11,595
Cash provided by operating activities		77,133			77,133			-
Consolidated Statement of Shareholders’ Equity
Retained earnings at beginning of year	$	1,444,238		$	1,438,870		$	(5,368	)
Retained earnings at end of year		1,541,675			1,529,224			(12,451	)