RESTRUCTURING, ACQUISITION, AND INTEGRATION RELATED EXPENSES

12 Months Ended

Aug. 01, 2020

Restructuring and Related Activities [Abstract]

RESTRUCTURING, ACQUISITION AND INTEGRATION RELATED EXPENSES

NOTE 5—RESTRUCTURING, ACQUISITION AND INTEGRATION RELATED EXPENSES

Restructuring, acquisition and integration related expenses were as follows:

(in thousands)	2020		2019		2018
2019 SUPERVALU INC. restructuring expenses	$	4,898	$	74,414	$	—
Integration and acquisition costs	41,610		51,245		4,967
Closed property charges and costs	39,875		22,536		—
2018 Earth Origins Market restructuring expenses and loss on sale	—		—		4,771
Total	$	86,383	$	148,195	$	9,738

2019 SUPERVALU INC.

As part of its acquisition of Supervalu and in order to achieve synergies from this combination, the Company has taken certain actions, which began during the first quarter of fiscal 2019 to: (i) review its organizational structure and the strategic needs of the business going forward to identify and place talent with the appropriate skills, experience and qualifications to meet these needs; and (ii) dispose of and exit certain Supervalu legacy retail operations, as efficiently and economically as possible in order to focus on the Company’s core wholesale distribution business. Expenses related to this program primarily related to actions associated the Company’s core cost-structure, which resulted in headcount reductions and other costs and charges. Incremental and identifiable expenses associated with integrating the legacy companies operations and information technology systems are reflected within integration costs, and asset impairments related to retail are included in Closed property charges and costs.

Integration and Acquisition Costs

Integration and acquisition costs for fiscal 2020 primarily relate to expenses associated with integrating and consolidating distribution centers and certain professional fees for distribution center network and administrative integration activities. Fiscal 2019 acquisition and integration costs primarily reflect transaction expenses and professional fees related to the Supervalu acquisition.

Closed Property Charges and Costs

Prior to the adoption of ASC 842, reserves for closed property were included in the Consolidated Balance Sheets within Accrued expenses and other current liabilities and Other long-term liabilities. Closed property charges recorded in fiscal 2019 primarily relate to retail stores and non-operating properties for which leases were terminated. In fiscal 2020, subsequent to the adoption of ASC 842, closed property charges relate to lease and property and equipment asset impairments related to retail stores, lease terminations of non-operating stores and distribution center consolidation and are included within Restructuring, acquisition and integration related expenses.

Restructuring Programs

The following is a summary of the restructuring reserves by reserve type included in the Consolidated Balance Sheets, primarily within Accrued compensation and benefits for severance and other employee separation costs and tax payments.

(in thousands)	2019 SUPERVALU INC.			2018 Earth Origins Market			2017 Cost Saving and Efficiency Initiatives			Total
Balances at July 28, 2018	$	—		$	383		$	701		$	1,084
Restructuring program charge(1)	74,414			—			—			74,414
Acquired restructuring liability	12,573			—			—			12,573
Cash payments	(75,130		)	—						(75,130		)
Balances at August 3, 2019	11,857			383			701			12,941
Restructuring program charge	4,898			—			—			4,898
Cash payments	(13,217		)	(383		)	(701		)	(14,301		)
Balances at August 1, 2020	$	3,538		$	—		$	—		$	3,538
Cumulative program charges incurred from inception to date	$	79,312		$	2,219		$	6,864		$	88,395

(1)

Includes $43.0 million of charges related to change-in-control expense to satisfy outstanding equity awards and severance related costs.