Note 5 – Restructuring Charges and Asset Impairment

The following table provides the activity of reserves for closed properties for the 28 week period ended July 14, 2018. Reserves for closed properties recorded in the condensed consolidated balance sheets are included in “Other accrued expenses” in Current liabilities and “Other long-term liabilities” in Long-term liabilities based on the timing of when the obligations are expected to be paid.

	Lease and
(In thousands)	Ancillary Costs			Severance			Total
Balance at December 30, 2017	$	17,889		$	3		$	17,892
Provision for closing charges		3,903			—			3,903
Provision for severance		—			139			139
Other		554			—			554
Changes in estimates		336			—			336
Accretion expense		323			—			323
Payments		(3,227	)		(142	)		(3,369	)
Balance at July 14, 2018	$	19,778		$	—		$	19,778

Included in the liability are lease obligations recorded at the present value of future minimum lease payments, calculated using a risk-free interest rate, and related ancillary costs from the date of closure to the end of the remaining lease term, net of estimated sublease income.

Restructuring and asset impairment charges included in the condensed consolidated statements of earnings consisted of the following:

	12 Weeks Ended						28 Weeks Ended
	July 14,			July 15,			July 14,			July 15,
(In thousands)	2018			2017			2018			2017
Asset impairment charges	$	—		$	—		$	1,470		$	521
Provision for closing charges		—			—			3,903			405
(Gain) loss on sales of assets related to closed facilities		(1,544	)		850			(1,407	)		673
Provision for severance		14			10			139			545
Other costs associated with distribution center and store closings		315			477			596			774
Changes in estimates		51			—			336			—
Lease termination adjustments		—			(1,351	)		—			(1,910	)
	$	(1,164	)	$	(14	)	$	5,037		$	1,008

Restructuring and asset impairment charges in the current year were primarily incurred in the Retail segment due to the economic and competitive environment of certain stores and in conjunction with the Company’s retail store rationalization plan. The Company also realized a gain on the sale of a Military distribution center in the second quarter of 2018, an asset impairment charge related to certain discontinued Food Distribution warehouse equipment in the first quarter of 2018, and other closing costs related to a Food Distribution warehouse in the prior year. The changes in estimates relate to revised estimates of lease and ancillary costs associated with previously closed locations, due to deterioration of the condition of certain properties. The lease termination adjustments represent the benefits recognized in connection with lease buyouts negotiated related to previously closed stores.

Long-lived assets are measured at fair value on a nonrecurring basis using Level 3 inputs under the fair value hierarchy, as further described in Note 6 – Fair Value Measurements. Assets with a book value of $1.8 million were measured at a fair value of $0.3 million, resulting in an impairment charge of $1.5 million in 2018. Assets with a book value of $0.9 million were measured at a fair value of $0.4 million, resulting in an impairment charge of $0.5 million in 2017. Fair value of long-lived assets is determined by estimating the amount and timing of net future cash flows, discounted using a risk-adjusted rate of interest. The Company estimates future cash flows based on historical results of operations, external factors expected to impact future performance, experience and knowledge of the geographic area in which the assets are located, and when necessary, uses real estate brokers.