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Restructuring Charges and Asset Impairment | 9 Months Ended
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Oct. 05, 2019
Restructuring And Related Activities [Abstract] |
Restructuring Charges and Asset Impairment | Note 6 – Restructuring Charges and Asset Impairment The following table provides the activity of reserves for closed properties for the 40-week period ended October 5, 2019. 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 29, 2018 |  |  |  | $ |  | 16,386 |  |  |  |  | — |  |  | $ |  | 16,386 |
Reclassification of lease liabilities |  |  |  |  |  | (8,177 | ) |  |  |  | — |  |  |  |  | (8,177 | )
Lease termination adjustments |  |  |  |  |  | (62 | ) |  |  |  | — |  |  |  |  | (62 | )
Provision for closing charges |  |  |  |  |  | 629 |  |  |  |  | — |  |  |  |  | 629 |
Provision for severance |  |  |  |  |  | — |  |  |  |  | 347 |  |  |  |  | 347 |
Changes in estimates |  |  |  |  |  | (750 | ) |  |  |  | — |  |  |  |  | (750 | )
Accretion expense |  |  |  |  |  | 235 |  |  |  |  | — |  |  |  |  | 235 |
Payments |  |  |  |  |  | (3,191 | ) |  |  |  | (149 | ) |  |  |  | (3,340 | )
Balance at October 5, 2019 |  |  |  | $ |  | 5,070 |  |  | $ |  | 198 |  |  | $ |  | 5,268 |
Included in the liability are lease-related ancillary costs from the date of closure to the end of the remaining lease term. Prior to the adoption of ASU 2016-02 (Note 2), the liability included lease obligations recorded at the present value of future minimum lease payments, calculated using a risk-free interest rate, net of estimated sublease income. Upon the adoption of ASU 2016-02, these liabilities were reclassified as a reduction of the initial measurement of operating lease assets within the consolidated balance sheets. Restructuring and asset impairment activity included in the condensed consolidated statements of operations consisted of the following:
| 12 Weeks Ended |  |  | 40 Weeks Ended |
| October 5, |  |  | October 6, |  |  | October 5, |  |  | October 6, |
(In thousands) | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Asset impairment charges | $ |  | 1,447 |  |  | $ |  | 570 |  |  | $ |  | 15,512 |  |  | $ |  | 2,040 |
Charge on customer advance |  |  | — |  |  |  |  | — |  |  |  |  | 1,941 |  |  |  |  | — |
Provision for closing charges |  |  | 86 |  |  |  |  | 596 |  |  |  |  | 629 |  |  |  |  | 4,499 |
Loss (gain) on sales of assets related to closed facilities |  |  | 72 |  |  |  |  | (171 | ) |  |  |  | (6,831 | ) |  |  |  | (1,578 | )
Provision for severance |  |  | 198 |  |  |  |  | 3 |  |  |  |  | 347 |  |  |  |  | 142 |
Other costs associated with distribution center and store closings |  |  | 330 |  |  |  |  | 203 |  |  |  |  | 1,307 |  |  |  |  | 799 |
Changes in estimates |  |  | (539 | ) |  |  |  | (969 | ) |  |  |  | (750 | ) |  |  |  | (633 | )
Lease termination adjustments |  |  | (298 | ) |  |  |  | — |  |  |  |  | (1,940 | ) |  |  |  | — |
| $ |  | 1,296 |  |  | $ |  | 232 |  |  | $ |  | 10,215 |  |  | $ |  | 5,269 |
In the 12- and 40-week periods ended October 5, 2019 and October 6, 2018, restructuring and asset impairment charges were incurred in the Food Distribution and Retail segments due to the changes in the estimates in the fair value of assets within certain of the Company’s operations and the economic and competitive environment of certain stores and in conjunction with the Company’s retail store and supply chain rationalization plans. The charge on the customer advance relates to an advance to an independent retailer customer which was not fully recoverable. The changes in estimates relate to revised estimates of lease ancillary costs associated with previously closed locations, due to favorable dispute resolutions with landlords and decreases in the amount of certain ancillary costs. Gains on sales of assets relate primarily to previously closed distribution centers in the Food Distribution and Military segments in the current 40-week period and prior year 40-week period, respectively. In the second quarter of 2019 the Company announced a plan to reposition the Caito Fresh Production operations and to focus on traditional produce distribution and production of fresh cut produce and deli items. As a result of this plan, the Company evaluated the related indefinite-lived trade name and long-lived assets for potential impairment. The indefinite-lived trade name with a book value of $35.5 million was measured at a fair value of $21.5 million, resulting in an impairment charge of $14.0 million. The Company concluded the long-lived assets were not impaired. Indefinite lived intangible assets are tested for impairment at least annually, and as needed if an indicator of potential impairment exists. Indefinite lived intangible assets are measured at fair value using Level 3 inputs under the fair value hierarchy, as further described in Note 7 – Fair Value Measurements. Fair value of indefinite-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 and, in the case of indefinite-lived trade name assets, estimated royalty rates. Long-lived assets are measured at fair value on a nonrecurring basis using Level 3 inputs. Assets with a book value of $5.9 million were measured at a fair value of $4.4 million, resulting in impairment charges of $1.5 million in 2019. 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. 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. Assets classified as held for sale in the consolidated balance sheet are valued at the expected net proceeds.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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