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Restructuring and Asset Impairment | 6 Months Ended
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Jul. 16, 2022
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 16, 2022. 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 1, 2022 |  |  |  | $ |  | 3,124 |  |  | $ |  | — |  |  | $ |  | 3,124 |
Provision for severance |  |  |  |  |  | — |  |  |  |  | 9 |  |  |  |  | 9 |
Lease termination adjustments |  |  |  |  |  | (86 | ) |  |  |  | — |  |  |  |  | (86 | )
Changes in estimates |  |  |  |  |  | (73 | ) |  |  |  | — |  |  |  |  | (73 | )
Accretion expense |  |  |  |  |  | 38 |  |  |  |  | — |  |  |  |  | 38 |
Payments |  |  |  |  |  | (534 | ) |  |  |  | (9 | ) |  |  |  | (543 | )
Balance at July 16, 2022 |  |  |  | $ |  | 2,469 |  |  | $ |  | — |  |  | $ |  | 2,469 |
Restructuring and asset impairment, net in the condensed consolidated statements of earnings consisted of the following:
| 12 Weeks Ended |  |  | 28 Weeks Ended |
| July 16, |  |  | July 17, |  |  | July 16, |  |  | July 17, |
(In thousands) | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Asset impairment charges (a) | $ |  | 3,480 |  |  | $ |  | 2,820 |  |  | $ |  | 3,480 |  |  | $ |  | 3,576 |
Provision for closing charges |  |  | — |  |  |  |  | 827 |  |  |  |  | — |  |  |  |  | 1,410 |
Gain on sales of assets related to closed facilities (b) |  |  | (615 | ) |  |  |  | (326 | ) |  |  |  | (615 | ) |  |  |  | (2,185 | )
Provision for severance |  |  | — |  |  |  |  | 40 |  |  |  |  | 9 |  |  |  |  | 124 |
Other (income) costs associated with site closures (c) |  |  | (106 | ) |  |  |  | (24 | ) |  |  |  | (75 | ) |  |  |  | 310 |
Lease termination adjustments (d) |  |  | (102 | ) |  |  |  | — |  |  |  |  | (102 | ) |  |  |  | — |
Changes in estimates (e) |  |  | (46 | ) |  |  |  | — |  |  |  |  | (73 | ) |  |  |  | (59 | )
Total | $ |  | 2,611 |  |  | $ |  | 3,337 |  |  | $ |  | 2,624 |  |  | $ |  | 3,176 |
(a) Asset impairment charges in the current year related to restructuring of the Retail segment's e-commerce delivery model. In the prior year, asset impairment charges were incurred primarily in the Retail segment and relate to prior year store closures and previously closed locations. (b) Gain on sales of assets in the current year primarily relates to the sales of real property of previously closed locations within the Retail segment. In the prior year, the gain on sales of assets primarily relates to the sales of pharmacy customer lists related to store closings in the Retail segment. (c) Other income net activity in the current year primarily relate to restructuring activity within the Food Distribution segment and Retail store closings. In the prior year, other income net activity primarily related to Retail store closings and restructuring activity. (d) Lease termination adjustments relate to the gain recognized to terminate a lease agreement in the current year, which includes a $16 thousand write-off of the lease liability and $86 thousand reduction of lease ancillary costs included in the reserve for closed properties. (e) Changes in estimates primarily relate to revised estimates for turnover and other lease ancillary costs associated with previously closed locations, which were generally lower than the initial estimates at certain properties in all years presented. 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 $4.1 million were measured at a fair value of $0.6 million, resulting in impairment charges of $3.5 million. In the prior year, long-lived 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. 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. The Company has evaluated assets held for sale as of July 16, 2022 and concluded that four previously closed facilities within the Food Distribution segment, with a carrying value of $24.2 million, and one previously closed store within the Retail segment, with a carrying value of $0.9 million, meet the requirements for held for sale classification within ASC 360. The assets have been classified as property and equipment held for sale in the condensed consolidated balance sheet. Liabilities with a carrying value of $0.5 million are included as part of the disposal group. The Company expects the assets to be sold within one year.

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -URI https://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI https://asc.fasb.org/topic&trid=2175745 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b)(2) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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