2018 Q2 Form 10-K Financial Statement

#000009141918000005 Filed on June 18, 2018

View on sec.gov

Income Statement

Concept 2018 Q2 2018 2017 Q2
Revenue $1.781B $7.357B $1.784B
YoY Change -0.14% -0.48% -1.32%
Cost Of Revenue $1.087B $4.521B $1.131B
YoY Change -3.92% -0.79% 2.16%
Gross Profit $690.5M $2.836B $652.5M
YoY Change 5.82% 0.03% -6.81%
Gross Profit Margin 38.76% 38.55% 36.58%
Selling, General & Admin $319.9M $1.363B $334.4M
YoY Change -4.34% -1.21% -4.95%
% of Gross Profit 46.33% 48.06% 51.25%
Research & Development $56.00M
YoY Change -3.61%
% of Gross Profit 1.97%
Depreciation & Amortization $101.2M $206.3M $104.2M
YoY Change -2.88% -2.55% -2.07%
% of Gross Profit 14.66% 7.27% 15.97%
Operating Expenses $225.7M $1.363B $382.5M
YoY Change -40.99% -5.2% -4.59%
Operating Profit $464.8M $1.044B $270.0M
YoY Change 72.15% 0.13% -9.79%
Interest Expense -$47.40M -$174.1M -$40.30M
YoY Change 17.62% 6.74% -0.49%
% of Operating Profit -10.2% -16.68% -14.93%
Other Income/Expense, Net -$5.200M -$8.900M $5.500M
YoY Change -194.55% 709.09% 19.57%
Pretax Income $264.2M $828.6M $161.9M
YoY Change 63.19% -0.98% -22.98%
Income Tax $78.30M -$477.6M $51.50M
% Of Pretax Income 29.64% -57.64% 31.81%
Net Earnings $185.9M $1.339B $110.4M
YoY Change 68.39% 126.0% -42.2%
Net Earnings / Revenue 10.44% 18.19% 6.19%
Basic Earnings Per Share $1.64 $11.79
Diluted Earnings Per Share $1.64 $11.78 $965.0K
COMMON SHARES
Basic Shares Outstanding 113.5M shares 113.0M shares 113.4M shares
Diluted Shares Outstanding 113.0M shares

Balance Sheet

Concept 2018 Q2 2018 2017 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $193.0M $193.0M $167.0M
YoY Change 15.57% 15.57% 51.82%
Cash & Equivalents $192.6M $193.0M $166.8M
Short-Term Investments
Other Short-Term Assets $122.4M $122.0M $130.6M
YoY Change -6.28% -6.87% 14.46%
Inventory $854.4M $854.0M $905.7M
Prepaid Expenses
Receivables $385.6M $386.0M $438.7M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $1.555B $1.555B $1.642B
YoY Change -5.29% -5.3% 4.35%
LONG-TERM ASSETS
Property, Plant & Equipment $1.729B $1.729B $1.618B
YoY Change 6.9% 6.86% -0.63%
Goodwill $5.942B $6.077B
YoY Change -2.22% -0.23%
Intangibles $5.917B $6.150B
YoY Change -3.8% -5.3%
Long-Term Investments
YoY Change
Other Assets $12.02B $158.0M $12.38B
YoY Change -2.93% 3.27% -3.15%
Total Long-Term Assets $13.75B $13.75B $14.00B
YoY Change -1.8% -1.8% -2.86%
TOTAL ASSETS
Total Short-Term Assets $1.555B $1.555B $1.642B
Total Long-Term Assets $13.75B $13.75B $14.00B
Total Assets $15.30B $15.30B $15.64B
YoY Change -2.16% -2.17% -2.15%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $512.1M $512.0M $477.2M
YoY Change 7.31% 7.34% 3.87%
Accrued Expenses $181.0M $181.0M $194.0M
YoY Change -6.7% -6.7% -23.02%
Deferred Revenue
YoY Change
Short-Term Debt $144.0M $144.0M $454.0M
YoY Change -68.28% -68.28% 59.86%
Long-Term Debt Due $0.00 $499.0M
YoY Change -100.0%
Total Short-Term Liabilities $1.034B $1.034B $1.833B
YoY Change -43.59% -43.59% 51.08%
LONG-TERM LIABILITIES
Long-Term Debt $4.688B $4.688B $4.446B
YoY Change 5.45% 5.44% -13.61%
Other Long-Term Liabilities $105.1M $311.0M $88.00M
YoY Change 19.43% -9.59% -0.11%
Total Long-Term Liabilities $6.376B $4.999B $6.957B
YoY Change -8.35% 4.36% -10.38%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.034B $1.034B $1.833B
Total Long-Term Liabilities $6.376B $4.999B $6.957B
Total Liabilities $7.410B $7.410B $8.790B
YoY Change -15.69% -15.7% -2.07%
SHAREHOLDERS EQUITY
Retained Earnings $2.239B $1.241B
YoY Change 80.51% -2.15%
Common Stock $5.740B $5.725B
YoY Change 0.26% -2.31%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares 32.92M shares 33.06M shares
Shareholders Equity $7.891B $7.891B $6.850B
YoY Change
Total Liabilities & Shareholders Equity $15.30B $15.30B $15.64B
YoY Change -2.16% -2.17% -2.15%

Cashflow Statement

Concept 2018 Q2 2018 2017 Q2
OPERATING ACTIVITIES
Net Income $185.9M $1.339B $110.4M
YoY Change 68.39% 126.0% -42.2%
Depreciation, Depletion And Amortization $101.2M $206.3M $104.2M
YoY Change -2.88% -2.55% -2.07%
Cash From Operating Activities $314.4M $1.218B $264.2M
YoY Change 19.0% 15.01% -21.25%
INVESTING ACTIVITIES
Capital Expenditures -$111.6M $321.9M -$55.80M
YoY Change 100.0% 67.31% 37.44%
Acquisitions $0.00
YoY Change
Other Investing Activities $5.800M -$30.90M $14.20M
YoY Change -59.15% -180.47% -55.06%
Cash From Investing Activities -$105.8M -$277.6M -$41.60M
YoY Change 154.33% 46.34% 362.22%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $7.000M
YoY Change -98.4%
Debt Paid & Issued, Net $1.050B
YoY Change 425.15%
Cash From Financing Activities -196.8M -$922.0M -193.7M
YoY Change 1.6% 14.38% -47.15%
NET CHANGE
Cash From Operating Activities 314.4M $1.218B 264.2M
Cash From Investing Activities -105.8M -$277.6M -41.60M
Cash From Financing Activities -196.8M -$922.0M -193.7M
Net Change In Cash 11.80M $25.80M 28.90M
YoY Change -59.17% -59.18% -172.25%
FREE CASH FLOW
Cash From Operating Activities $314.4M $1.218B $264.2M
Capital Expenditures -$111.6M $321.9M -$55.80M
Free Cash Flow $426.0M $896.1M $320.0M
YoY Change 33.12% 3.4% -14.92%

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2.68
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CY2018 us-gaap Deferred State And Local Income Tax Expense Benefit
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25400000 USD
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18800000 USD
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10500000 USD
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47400000 USD
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129100000 USD
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200000 USD
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75500000 USD
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2248000000 USD
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1393600000 USD
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14200000 USD
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36200000 USD
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48000000 USD
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317552 shares
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when they reach age 55 and have attained 10 years of credited service
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5.10
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11.78
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400000 USD
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CY2018 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
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42600000 USD
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P3Y4M24D
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10200000 USD
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7200000 USD
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3800000 USD
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2700000 USD
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3300000 USD
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1500000 USD
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205100000 USD
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186000000 USD
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176900000 USD
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145000000 USD
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10100000 USD
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0 USD
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133200000 USD
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31900000 USD
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828600000 USD
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18600000 USD
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41600000 USD
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32400000 USD
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977900000 USD
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878400000 USD
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861000000 USD
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289200000 USD
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286100000 USD
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367200000 USD
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562400000 USD
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343300000 USD
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312300000 USD
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115600000 USD
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46100000 USD
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2100000 USD
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19000000 USD
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21900000 USD
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2400000 USD
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20500000 USD
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10400000 USD
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5300000 USD
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7500000 USD
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7323100000 USD
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92500000 USD
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300000 USD
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400000 USD
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41800000 USD
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10900000 USD
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21700000 USD
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1059000000 USD
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1218000000 USD
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688700000 USD
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592300000 USD
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685700000 USD
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589500000 USD
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1331800000 USD
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4 Segment
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7 reporting_unit
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1145300000 USD
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1031500000 USD
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42800000 USD
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29100000 USD
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29900000 USD
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33300000 USD
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37500000 USD
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130600000 USD
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153400000 USD
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158400000 USD
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28500000 USD
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400000 USD
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400000 USD
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2000000 USD
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26600000 USD
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6300000 USD
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4700000 USD
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123100000 USD
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107700000 USD
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88000000 USD
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105100000 USD
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5000000 USD
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3700000 USD
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10000000 USD
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4300000 USD
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350300000 USD
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201400000 USD
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193700000 USD
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800000 USD
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800000 USD
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58000000 USD
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170000000 USD
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40600000 USD
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4000000 USD
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500000 USD
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200000000 USD
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P1Y
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24400000 USD
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32700000 USD
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20700000 USD
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0.023
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0.207
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0.019
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270006 shares
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113.22
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56666 shares
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915000 shares
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113.07
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113.20
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111.86
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111.86
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P4Y
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P5Y10M24D
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454000000 USD
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144000000 USD
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9500000 USD
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30800000 USD
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28200000 USD
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21300000 USD
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3600000 shares
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0 shares
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0 shares
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300000 USD
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441100000 USD
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437600000 USD
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7000000 USD
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3000000 USD
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2800000 USD
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6800000 USD
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226000000 USD
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45000000 USD
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46300000 USD
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40400000 USD
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32300000 USD
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900000 USD
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900000 USD
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0 USD
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2500000 USD
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1100000 USD
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3000000 USD
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3800000 USD
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4100000 USD
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4000000 USD
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3300000 USD
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0 USD
CY2018 us-gaap Unrecognized Tax Benefits Increases Resulting From Acquisition
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0 USD
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3300000 USD
CY2017 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
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700000 USD
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1100000 USD
CY2016 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
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200000 USD
CY2017 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
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1200000 USD
CY2018 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
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500000 USD
CY2016 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
UnrecognizedTaxBenefitsReductionsResultingFromLapseOfApplicableStatuteOfLimitations
2100000 USD
CY2017 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
UnrecognizedTaxBenefitsReductionsResultingFromLapseOfApplicableStatuteOfLimitations
5800000 USD
CY2018 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
UnrecognizedTaxBenefitsReductionsResultingFromLapseOfApplicableStatuteOfLimitations
6700000 USD
CY2016Q2 us-gaap Unrecognized Tax Benefits That Would Impact Effective Tax Rate
UnrecognizedTaxBenefitsThatWouldImpactEffectiveTaxRate
32600000 USD
CY2017Q2 us-gaap Unrecognized Tax Benefits That Would Impact Effective Tax Rate
UnrecognizedTaxBenefitsThatWouldImpactEffectiveTaxRate
23100000 USD
CY2018Q2 us-gaap Unrecognized Tax Benefits That Would Impact Effective Tax Rate
UnrecognizedTaxBenefitsThatWouldImpactEffectiveTaxRate
21500000 USD
CY2018 us-gaap Valuation Allowance Deferred Tax Asset Change In Amount
ValuationAllowanceDeferredTaxAssetChangeInAmount
700000 USD
CY2016 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
100000 shares
CY2017 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
100000 shares
CY2018 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
0 shares
CY2016 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
119000000 shares
CY2017 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
115600000 shares
CY2018 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
113000000 shares
CY2016 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
118900000 shares
CY2017 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
115500000 shares
CY2018 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
113000000 shares
CY2018 us-gaap Write Off Of Deferred Debt Issuance Cost
WriteOffOfDeferredDebtIssuanceCost
1700000 USD
CY2018 us-gaap Loss Contingency Disclosures
LossContingencyDisclosures
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:14pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="3" rowspan="1"></td></tr><tr><td style="width:16%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:83%;" rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:bottom;background-color:#6db53f;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:14pt;"><font style="font-family:Arial;font-size:14pt;color:#ffffff;font-weight:bold;">&#160;NOTE 15</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;background-color:#99cc7a;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:14pt;"><font style="font-family:Arial;font-size:14pt;color:#ffffff;">&#160;CONTINGENCIES</font></div></td></tr></table></div></div><div style="line-height:120%;padding-top:16px;font-size:9pt;"><font style="font-family:inherit;font-size:9pt;">We, like other food manufacturers, are from time to time subject to various administrative, regulatory, and other legal proceedings arising in the ordinary course of business. We are currently a defendant in a variety of such legal proceedings. We cannot predict with certainty </font></div><div style="line-height:120%;font-size:9pt;"><font style="font-family:inherit;font-size:9pt;">the ultimate results of these proceedings or reasonably determine a range of potential loss. Our policy is to accrue losses for contingent liabilities when such liabilities are probable and amounts can be reasonably estimated. Based on the information known to date, with the exception of the matter discussed below, we do not believe the final outcome of these proceedings could have a material adverse effect on our financial position, results of operations, or cash flows.</font></div><div style="line-height:120%;font-size:9pt;"><font style="font-family:inherit;font-size:9pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:9pt;"><font style="font-family:inherit;font-size:9pt;">On May 9, 2011, an organization named Council for Education and Research on Toxics (&#8220;Plaintiff&#8221;) filed a lawsuit in the Superior Court of the State of California, County of Los Angeles, against us and additional defendants who manufacture, package, distribute, or sell packaged coffee. The lawsuit is&#160;</font><font style="font-family:inherit;font-size:9pt;font-style:italic;">Council for Education and Research on Toxics v. Brad Barry LLC, et al.,</font><font style="font-family:inherit;font-size:9pt;"> and was a tag along to a 2010 lawsuit against companies selling &#8220;ready-to-drink&#8221; coffee based on the same claims. Both cases have since been consolidated and now include nearly eighty defendants, which constitute the great majority of the coffee industry in California. The Plaintiff alleges that we and the other defendants failed to provide warnings for our coffee products of exposure to the chemical acrylamide as required under California Health and Safety Code Section 25249.5, the California Safe Drinking Water and Toxic Enforcement Act of 1986, better known as </font></div><div style="line-height:120%;text-align:left;font-size:9pt;"><font style="font-family:inherit;font-size:9pt;">&#8220;Proposition 65.&#8221; The Plaintiff seeks equitable relief, including providing warnings to consumers of coffee products, as well as civil penalties in the amount of the statutory maximum of $2,500.00 per day per violation of Proposition 65. The Plaintiff asserts that every consumed cup of coffee, absent a compliant warning, is equivalent to a violation under Proposition 65.</font></div><div style="line-height:120%;text-align:left;font-size:9pt;"><font style="font-family:inherit;font-size:9pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:9pt;"><font style="font-family:inherit;font-size:9pt;">As part of a joint defense group organized to defend against the lawsuit, we dispute the claims of the Plaintiff. Acrylamide is not added to coffee, but is present in all coffee in small amounts (measured in parts per billion) as a byproduct of the coffee bean roasting process. We have asserted multiple affirmative defenses. Trial of the first phase of the case commenced on September 8, 2014, and was limited to three affirmative defenses shared by all defendants. On September 1, 2015, the trial court issued a final ruling adverse to the defendants on all Phase 1 defenses. Trial of the second phase of the case commenced in the fall of calendar year 2017. On March 28, 2018, the trial court issued a proposed ruling adverse to the defendants on the Phase 2 defense, our last remaining defense to liability. The trial court finalized and affirmed its Phase 2 ruling on May 7, 2018 and, therefore, the trial will proceed to the third phase regarding remedies issues. </font></div><div style="line-height:120%;text-align:left;font-size:9pt;"><font style="font-family:inherit;font-size:9pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:9pt;"><font style="font-family:inherit;font-size:9pt;">At this stage of the proceedings, prior to a trial on remedies issues, we are unable to predict or reasonably estimate the potential loss or effect on our operations. Accordingly, no loss contingency has been recorded for this matter as of April 30, 2018, as the likelihood of loss is not considered probable or estimable. The trial court has discretion to impose zero penalties against us or to impose significant statutory penalties. Significant labeling or warning requirements that could potentially be imposed by the trial court may increase our costs and adversely affect sales of our coffee products, as well as involve substantial expense and operational disruption, which could have a material adverse impact on our financial position, results of operations, or cash flows. Furthermore, a future appellate court decision could reverse the trial court rulings. The outcome and the financial impact of settlement, or the trial or appellate court rulings of the case, if any, cannot be predicted at this time.</font></div></div>
CY2018 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:16px;font-size:9pt;"><font style="font-family:Arial;font-size:9pt;color:#6db53f;font-weight:bold;">Use of Estimates:</font><font style="font-family:Arial;font-size:9pt;"> </font><font style="font-family:inherit;font-size:9pt;">The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (&#8220;GAAP&#8221;) requires that we make certain estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates in these consolidated financial statements include: estimates of future cash flows associated with assets, potential asset impairments, useful lives and residual values of long-lived assets used in determining depreciation and amortization, net realizable value of inventories, accruals for trade marketing and merchandising programs, income taxes, and the determination of discount and other assumptions for defined benefit pension and other postretirement benefit expenses. Actual results could differ from these estimates.</font></div></div>

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