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Restructuring and Asset Impairment | 6 Months Ended
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Jul. 17, 2021
Restructuring And Related Activities [Abstract] |
Restructuring and Asset Impairment | Note 5 – Restructuring and Asset Impairment The following table provides the activity of reserves for closed properties for the 28-week period ended July 17, 2021. Included in the liability are lease-related ancillary costs from the date of closure to the end of the remaining lease term, as well as related severance. 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. Reserves for severance are recorded in “Accrued payroll and benefits”.
|  |  |  | Reserves for Closed Properties |
|  |  |  | Lease |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Ancillary |  |  |  |  |  |  |  |  |  |  |
(In thousands) |  |  |  | Costs |  |  | Severance |  |  | Total |
Balance at January 2, 2021 |  |  |  | $ |  | 3,349 |  |  | $ |  | 114 |  |  | $ |  | 3,463 |
Provision for closing charges |  |  |  |  |  | 1,410 |  |  |  |  | — |  |  |  |  | 1,410 |
Provision for severance |  |  |  |  |  | — |  |  |  |  | 124 |  |  |  |  | 124 |
Changes in estimates |  |  |  |  |  | (59 | ) |  |  |  | — |  |  |  |  | (59 | )
Accretion expense |  |  |  |  |  | 54 |  |  |  |  | — |  |  |  |  | 54 |
Payments |  |  |  |  |  | (395 | ) |  |  |  | (238 | ) |  |  |  | (633 | )
Balance at July 17, 2021 |  |  |  | $ |  | 4,359 |  |  | $ |  | — |  |  | $ |  | 4,359 |
Restructuring and asset impairment, net in the condensed consolidated statements of earnings consisted of the following:
| 12 Weeks Ended |  |  | 28 Weeks Ended |
| July 17, |  | July 11, |  |  | July 17, |  |  | July 11, |
(In thousands) | 2021 |  | 2020 |  |  | 2021 |  |  | 2020 |
Asset impairment charges (a) | $ |  | 2,820 |  | $ |  | 2,911 |  |  | $ |  | 3,576 |  |  | $ |  | 9,643 |
Provision for closing charges |  |  | 827 |  |  |  | — |  |  |  |  | 1,410 |  |  |  |  | 325 |
(Gain) loss on sales of assets related to closed facilities (b) |  |  | (326 | ) |  |  | 59 |  |  |  |  | (2,185 | ) |  |  |  | (31 | )
Provision for severance (c) |  |  | 40 |  |  |  | 8 |  |  |  |  | 124 |  |  |  |  | 2,205 |
Other (income) costs associated with site closures (d) |  |  | (24 | ) |  |  | 642 |  |  |  |  | 310 |  |  |  |  | 1,648 |
Changes in estimates |  |  | — |  |  |  | 55 |  |  |  |  | (59 | ) |  |  |  | 122 |
Total | $ |  | 3,337 |  | $ |  | 3,675 |  |  | $ |  | 3,176 |  |  | $ |  | 13,912 |
(a) Asset impairment charges in the current year were incurred primarily in the Retail segment and relate to current year store closures and previously closed locations. In the prior year, charges primarily relate to the Food Distribution segment with the exit of the Fresh Cut business and the sale of certain equipment assets of the previously closed Fresh Kitchen facility, which totaled $9.9 million, partially offset by recoveries of $0.3 million related to the re-opening of a previously impaired distribution center. (b) Gains on sales of assets in the current year primarily relate to sales of pharmacy customer lists associated with store closings in the Retail segment. (c) Severance in the prior year was related to the exit of the Fresh Cut business. (d) Other income net activity in the current year primarily relates to Retail store closings and restructuring activities. In the prior year, other costs primarily related to the Fresh Cut business and Retail store closings. Long-lived assets which are not recoverable are measured at fair value on a nonrecurring basis using Level 3 inputs under the fair value hierarchy, as further described in Note 6. In the current year, assets with a book value of $22.5 million were measured at a fair value of $18.9 million, resulting in impairment charges of $3.6 million. In the prior year, in connection primarily with the Company’s exit of the Fresh Cut operations, long-lived assets with a book value of $32.7 million were measured at a fair value of $22.8 million, resulting in impairment charges of $9.9 million. The fair value of long-lived assets is determined by estimating the amount and timing of net future cash flows, including the expected proceeds from the sale of assets, 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 condensed consolidated balance sheet are valued at the expected net proceeds. The Fresh Kitchen facility, which was classified as held for sale as of January 2, 2021, was sold in the first quarter of 2021 for proceeds of $20.5 million.

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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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