(in thousands) | 2019 | 2018 | 2017 | |||||||||
Beginning balance | $ | — | $ | — | $ | 443 | ||||||
Acquired liabilities | 34,581 | — | — | |||||||||
Additions, accretion and changes in estimates, net | 16,529 | 1,400 | 258 | |||||||||
Payments | (22,467 | ) | (1,400 | ) | (701 | ) | ||||||
Ending balance | $ | 28,643 | $ | — | $ | — |
(in thousands) | 2019 | 2018 | 2017 | ||||||||
Rent expense(1) | 211,807 | 88,697 | 81,156 | ||||||||
Less subtenant rentals recorded in Net sales | (17,475 | ) | — | — | |||||||
Less subtenant rentals recorded in Operating expenses | (13,683 | ) | (1,649 | ) | (1,670 | ) | |||||
Total net rent expense | $ | 180,649 | $ | 87,048 | $ | 79,486 |
(1) | Rent expense as presented here includes $32.2 million, $0.0 million, and $0.0 million in fiscal 2019, 2018 and 2017, respectively, of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as we expect to remain primarily obligated under these leases. |
Lease Obligations | Lease Receipts | Net Lease Obligations | ||||||||||||||||||||||
Fiscal Year | Operating Leases | Capital Leases | Operating Leases | Capital Leases | Operating Leases | Capital Leases | ||||||||||||||||||
2020 | $ | 223,612 | $ | 41,550 | $ | (55,922 | ) | $ | (319 | ) | $ | 167,690 | $ | 41,231 | ||||||||||
2021 | 190,845 | 32,804 | (41,425 | ) | — | 149,420 | 32,804 | |||||||||||||||||
2022 | 179,326 | 29,869 | (35,998 | ) | — | 143,328 | 29,869 | |||||||||||||||||
2023 | 154,812 | 26,699 | (25,591 | ) | — | 129,221 | 26,699 | |||||||||||||||||
2024 | 135,795 | 23,095 | (18,183 | ) | — | 117,612 | 23,095 | |||||||||||||||||
Thereafter | 1,063,674 | 46,999 | (59,186 | ) | — | 1,004,488 | 46,999 | |||||||||||||||||
Total future minimum obligations (receipts) | $ | 1,948,064 | $ | 201,016 | $ | (236,305 | ) | $ | (319 | ) | $ | 1,711,759 | $ | 200,697 | ||||||||||
Less interest | (68,138 | ) | ||||||||||||||||||||||
Present value of capital lease obligations | 132,878 | |||||||||||||||||||||||
Less current capital lease obligations | (24,670 | ) | ||||||||||||||||||||||
Long-term capital lease obligations | $ | 108,208 |
(in thousands) | 2019 | 2018 | 2017 | ||||||||
Beginning balance | $ | 24,703 | $ | 22,776 | $ | 20,109 | |||||
Assumed liabilities from the Supervalu acquisition | 55,213 | — | — | ||||||||
Expense | 42,764 | 14,274 | 13,740 | ||||||||
Claim payments | (33,087 | ) | (12,347 | ) | (11,073 | ) | |||||
Reclassifications | (755 | ) | — | — | |||||||
Ending balance | $ | 88,838 | $ | 24,703 | $ | 22,776 |
Most Significant Collective Bargaining Agreement | |||||||||||
Pension Fund | Range of Collective Bargaining Agreement Expiration Dates | Total Collective Bargaining Agreements | Expiration Date | % of Associates under Collective Bargaining Agreement (1) | Over 5% Contributions 2019 | ||||||
Minneapolis Food Distributing Industry Pension Plan(2) | 5/31/2022 | 1 | 5/31/2022 | 100.0 | % | Yes | |||||
Minneapolis Retail Meat Cutters and Food Handlers Pension Fund(3) | 3/4/2023 | 1 | 3/4/2023 | 100.0 | % | Yes | |||||
Minneapolis Retail Meat Cutters and Food Handlers Variable Annuity Pension Fund(3) | 3/4/2023 | 1 | 3/4/2023 | 100.0 | % | N/A (contributions began 1/1/2019) | |||||
Central States, Southeast and Southwest Areas Pension Fund(2) | 5/31/2019 | 4 | 9/14/2019 | 39.4 | % | No | |||||
UFCW Unions and Participating Employer Pension Fund(3) | 7/11/2020 | 2 | 7/11/2020 | 71.3 | % | Yes | |||||
Western Conference of Teamsters Pension Plan Trust(2) | 4/20/2019 | 20 | 4/22/2023 | 15.6 | % | No | |||||
UFCW Unions and Employers Pension Plan(3) | 4/9/2022 | 1 | 4/9/2022 | 100.0 | % | Yes |
(1) | Company participating employees in the most significant collective bargaining agreement as a percent of all Company employees participating in the respective fund. |
(2) | These multiemployer pension plans are associated with continuing operations. |
(3) | These multiemployer pension plans are associated with discontinued operations. |
(in thousands) | 2019 | 2018 | 2017 | ||||||||
Beginning balance | $ | 24,703 | $ | 22,776 | $ | 20,109 | |||||
Assumed liabilities from the Supervalu acquisition | 55,213 | — | — | ||||||||
Expense | 42,764 | 14,274 | 13,740 | ||||||||
Claim payments | (33,087 | ) | (12,347 | ) | (11,073 | ) | |||||
Reclassifications | (755 | ) | — | — | |||||||
Ending balance | $ | 88,838 | $ | 24,703 | $ | 22,776 |
(in thousands, except per share data) | August 3, 2019(1) (53 weeks) | July 28, 2018(2) (52 weeks) | ||||||
Net sales | $ | 24,503,882 | $ | 24,184,056 | ||||
Net (loss) income from continuing operations | $ | (287,001 | ) | $ | 13,201 | |||
Basic net (loss) income from continuing operations per share | $ | (5.60 | ) | $ | 0.26 | |||
Diluted net (loss) income from continuing operations per share | $ | (5.60 | ) | $ | 0.26 |
(1) | Includes 12 weeks of pro forma Supervalu results for the period ended September 8, 2018. |
(2) | Includes 52 weeks of pro forma Supervalu results for the period ended July 28, 2018, including 19 weeks of pro forma Associated Grocers of Florida, Inc. results, which was acquired by Supervalu on December 8, 2017. |
(in thousands) | Preliminary Acquisition Date Fair Values as of August 3, 2019 | |||
Consideration: | ||||
Outstanding shares | $ | 1,258,450 | ||
Outstanding debt, excluding acquired senior notes | 1,046,170 | |||
Equity-based awards | 18,411 | |||
Total consideration | $ | 2,323,031 | ||
Preliminary fair value of assets acquired and liabilities assumed: | ||||
Cash and cash equivalents | $ | 25,102 | ||
Accounts receivable | 552,381 | |||
Inventories | 1,159,642 | |||
Prepaid expenses and other current assets | 108,830 | |||
Current assets of discontinued operations | 196,848 | |||
Property, plant and equipment | 1,210,416 | |||
Goodwill | 374,757 | |||
Intangible assets | 918,103 | |||
Other assets | 75,965 | |||
Long-term assets of discontinued operations | 429,304 | |||
Accounts payable | (972,888 | ) | ||
Current portion of long-term debt and capital lease obligations | (579,565 | ) | ||
Other current liabilities | (331,693 | ) | ||
Current liabilities of discontinued operations | (148,763 | ) | ||
Long-term debt | (34,355 | ) | ||
Long-term capital lease obligations | (103,289 | ) | ||
Pension and other postretirement benefit obligations | (234,324 | ) | ||
Deferred income taxes | (20,131 | ) | ||
Other long-term liabilities | (303,544 | ) | ||
Long-term liabilities of discontinued operations | (1,398 | ) | ||
Noncontrolling interests | 1,633 | |||
Total consideration | 2,323,031 | |||
Less: Cash and cash equivalents(1) | (30,596 | ) | ||
Total consideration, net of cash and cash equivalents acquired | $ | 2,292,435 |
(1) | Includes cash and cash equivalents acquired attributable to continuing operations and discontinued operations. |
Preliminary Acquisition Date Fair Values as of August 3, 2019 | ||||||||||
(in thousands) | Estimated Useful Life | Continuing Operations | Discontinued Operations | |||||||
Customer relationship assets | 10-17 years | $ | 810,000 | $ | — | |||||
Favorable operating leases | 1-19 years | 21,629 | — | |||||||
Leases in place | 1-8 years | 10,474 | — | |||||||
Tradenames | 2-9 years | 66,000 | 17,000 | |||||||
Pharmacy prescription files | 5-7 years | — | 45,900 | |||||||
Non-compete agreement | 2 years | 10,000 | — | |||||||
Unfavorable operating leases | 1-12 years | (21,754 | ) | — | ||||||
Total | $ | 896,349 | $ | 62,900 |
(in thousands, except per share data) | August 3, 2019(1) (53 weeks) | July 28, 2018(2) (52 weeks) | ||||||
Net sales | $ | 24,503,882 | $ | 24,184,056 | ||||
Net (loss) income from continuing operations | $ | (287,001 | ) | $ | 13,201 | |||
Basic net (loss) income from continuing operations per share | $ | (5.60 | ) | $ | 0.26 | |||
Diluted net (loss) income from continuing operations per share | $ | (5.60 | ) | $ | 0.26 |
(1) | Includes 12 weeks of pro forma Supervalu results for the period ended September 8, 2018. |
(2) | Includes 52 weeks of pro forma Supervalu results for the period ended July 28, 2018, including 19 weeks of pro forma Associated Grocers of Florida, Inc. results, which was acquired by Supervalu on December 8, 2017. |
Swap Maturity | Notional Value (in millions) | Pay Fixed Rate | Receive Floating Rate | Floating Rate Reset Terms | |||||||
April 29, 2021(1) | $ | 25.0 | 1.0650 | % | One-Month LIBOR | Monthly | |||||
April 29, 2021(2) | 25.0 | 0.9260 | % | One-Month LIBOR | Monthly | ||||||
August 15, 2022(3) | 60.0 | 1.7950 | % | One-Month LIBOR | Monthly | ||||||
August 15, 2022(4) | 40.0 | 1.7950 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2020(5) | 100.0 | 2.8240 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2022(5) | 100.0 | 2.8915 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2023(5) | 100.0 | 2.9210 | % | One-Month LIBOR | Monthly | ||||||
October 22, 2025(5) | 50.0 | 2.9550 | % | One-Month LIBOR | Monthly | ||||||
March 31, 2023(6) | 150.0 | 2.8950 | % | One-Month LIBOR | Monthly | ||||||
October 22, 2025(6) | 50.0 | 2.9580 | % | One-Month LIBOR | Monthly | ||||||
October 22, 2025(6) | 50.0 | 2.9590 | % | One-Month LIBOR | Monthly | ||||||
October 29, 2021(7) | 100.0 | 2.8084 | % | One-Month LIBOR | Monthly | ||||||
September 30, 2023(7) | 50.0 | 2.8315 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2024(7) | 100.0 | 2.8480 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2022(8) | 50.0 | 2.4678 | % | One-Month LIBOR | Monthly | ||||||
March 28, 2024(8) | 100.0 | 2.4770 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2024(8) | 100.0 | 2.5010 | % | One-Month LIBOR | Monthly | ||||||
April 29, 2021(9) | 50.0 | 2.5500 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2022(9) | 50.0 | 2.5255 | % | One-Month LIBOR | Monthly | ||||||
March 31, 2023(9) | 50.0 | 2.5292 | % | One-Month LIBOR | Monthly | ||||||
March 28, 2024(9) | 100.0 | 2.5420 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2024(10) | 50.0 | 2.5210 | % | One-Month LIBOR | Monthly | ||||||
October 22, 2025(10) | 50.0 | 2.5558 | % | One-Month LIBOR | Monthly | ||||||
April 15, 2022(11) | 100.0 | 2.3645 | % | One-Month LIBOR | Monthly | ||||||
December 13, 2019(12) | 100.0 | 2.4925 | % | One-Month LIBOR | Monthly | ||||||
May 15, 2020(12) | 100.0 | 2.4490 | % | One-Month LIBOR | Monthly | ||||||
June 30, 2021(13) | 100.0 | 2.2520 | % | One-Month LIBOR | Monthly | ||||||
June 30, 2022(13) | 100.0 | 2.2170 | % | One-Month LIBOR | Monthly | ||||||
June 30, 2021(14) | 50.0 | 2.2290 | % | One-Month LIBOR | Monthly | ||||||
June 30, 2022(14) | 50.0 | 2.1840 | % | One-Month LIBOR | Monthly | ||||||
$ | 2,200.0 |
(1) | On June 7, 2016, the Company entered into a pay fixed and receive floating interest rate swap contract to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreement has an effective date of June 9, 2016 and expires in April 2021. The interest rate swap contract has a notional principal amount of $25 million and requires the Company to pay interest payments during the duration of the contract at a fixed annual rate of 1.0650%, while receiving interest for the same contract period at one-month LIBOR on the same notional principal amount. |
(2) | On June 24, 2016, the Company entered into a pay fixed and receive floating interest rate swap contract to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreement has an effective date of June 24, 2016 and expires in April 2021. The interest rate swap contract has a notional principal amount of $25 million and requires the Company to pay interest payments during the duration of the contract at a fixed annual rate of 0.9260%, while receiving interest for the same contract period at one-month LIBOR on the same notional principal amount. |
(3) | On January 23, 2015, the Company entered into a pay fixed and receive floating interest rate swap contract to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreement has an effective date of August 3, 2015 and expires in August 2022. On March 31, 2015, the Company amended the original contract to reduce the beginning notional principal amount from $140 million to $84 million. The interest rate swap contract has an amortizing notional principal amount which adjusts down on a quarterly basis and requires the Company to pay interest payments during the duration of the contract at a fixed annual rate of 1.7950%, while receiving interest for the same respective contract period at one-month LIBOR on the same notional principal amount. |
(4) | On March 31, 2015, the Company entered into a pay fixed and receive floating interest rate swap contract to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreement has an effective date of August 3, 2015 and expires in August 2022. The interest rate swap contract has an amortizing notional principal amount which adjusts down on a quarterly basis and requires the Company to pay interest payments during the duration of the contract at a fixed annual rate of 1.7950%, while receiving interest for the same respective contract period at one-month LIBOR on the same notional principal amount. |
(5) | On October 26, 2018, the Company entered into four pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of October 26, 2018 and expire at varied dates between October 2020 and October 2025. These interest rate swap contracts have an aggregate notional principal amount of $350 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.8240% and 2.9550%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(6) | On November 16, 2018, the Company entered into three pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of November 16, 2018 and expire at varied dates between March 2023 and October 2025. These interest rate swap contracts have an aggregate notional principal amount of $250 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.8950% and 2.9590%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(7) | On November 30, 2018, the Company entered into three pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of November 30, 2018 and expire at varied dates between October 2021 and October 2024. These interest rate swap contracts have an aggregate notional principal amount of $250 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.8084% and 2.8480%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(8) | On January 11, 2019, the Company entered into three pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of January 11, 2019 and expire at varied dates between October 2022 and October 2024. These interest rate swap contracts have an aggregate notional principal amount of $250 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.4678% and 2.5010%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(9) | On January 23, 2019, the Company entered into four pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of January 23, 2019 and expire at varied dates between April 2021 and March 2024. These interest rate swap contracts have an aggregate notional principal amount of $250 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.5255% and 2.5500%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(10) | On January 24, 2019, the Company entered into two pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of January 24, 2019 and expire at varied dates between October 2024 and October 2025. These interest rate swap contracts have an aggregate notional principal amount of $100 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.5210% and 2.5558%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(11) | On March 18, 2019, the Company entered into a pay fixed and receive floating interest rate swap contract to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreement has an effective date of March 21, 2019 and expires in April 2022. The interest rate swap contract has a notional principal amount of $100.0 million and requires the Company to pay interest payments during the duration of the contract at a fixed annual rate of 2.3645%, while receiving interest for the same contract period at one-month LIBOR on the same notional principal amount. |
(12) | On March 21, 2019, the Company entered into two pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of March 21, 2019 and expire at varied dates between December 2019 and May 2020. These interest rate swap contracts have an aggregate notional principal amount of $200 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.4490% and 2.4925%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(13) | On April 2, 2019, the Company entered into two pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of April 2, 2019 and expire at varied dates between June 2021 and June 2022. These interest rate swap contracts have an aggregate notional principal amount of $200 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.2170% and 2.2520%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(14) | On April 2, 2019, the Company entered into two pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of June 10, 2019 and June 28, 2019 and expire at varied dates between June 2021 and June 2022. These interest rate swap contracts have an aggregate notional principal amount of $100 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.1840% and 2.2290%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
Interest Expense, net | ||||||||||||
(In thousands) | 2019 | 2018 | 2017 | |||||||||
Total amounts of expense line items presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded | $ | 179,963 | $ | 16,025 | $ | 16,754 | ||||||
Gain or (loss) on cash flow hedging relationships: | ||||||||||||
Gain or (loss) reclassified from comprehensive income into income | $ | 13 | $ | 827 | $ | (1,462 | ) | |||||
Gain or (loss) on interest rate swap contracts not designated as hedging instruments: | ||||||||||||
Gain or (loss) recognized as interest expense | $ | 51 | $ | — | $ | — |
(in millions) | Net Sales for Fiscal 2019 (53 weeks) | |||||||||||||||
Customer Channel | Wholesale | Other | Eliminations | Consolidated | ||||||||||||
Supernatural | $ | 4,393 | $ | — | $ | — | $ | 4,393 | ||||||||
Independents | 3,179 | — | — | 3,179 | ||||||||||||
Supermarkets | 12,505 | — | — | 12,505 | ||||||||||||
Other | 1,248 | 228 | (166 | ) | 1,310 | |||||||||||
Total | $ | 21,325 | $ | 228 | $ | (166 | ) | $ | 21,387 |
(in millions) | Net Sales for Fiscal 2018(1) (52 weeks) | |||||||||||||||
Customer Channel | Wholesale | Other | Eliminations | Consolidated | ||||||||||||
Supernatural | $ | 3,758 | $ | — | $ | — | $ | 3,758 | ||||||||
Independents | 2,668 | — | — | 2,668 | ||||||||||||
Supermarkets | 2,820 | — | — | 2,820 | ||||||||||||
Other | 925 | 228 | (172 | ) | 981 | |||||||||||
Total | $ | 10,171 | $ | 228 | $ | (172 | ) | $ | 10,227 |
(in millions) | Net Sales for Fiscal 2017(1) (52 weeks) | |||||||||||||||
Customer Channel | Wholesale | Other | Eliminations | Consolidated | ||||||||||||
Supernatural | $ | 3,096 | $ | — | $ | — | $ | 3,096 | ||||||||
Independents | 2,490 | — | — | 2,490 | ||||||||||||
Supermarkets | 2,731 | — | — | 2,731 | ||||||||||||
Other | 894 | 232 | (169 | ) | 957 | |||||||||||
Total | $ | 9,211 | $ | 232 | $ | (169 | ) | $ | 9,274 |
(1) | During fiscal 2019, the presentation of net sales by customer channel was adjusted to reflect changes in the classification of customer types as a result of a detailed review of customer channel definitions. There was no impact to the Consolidated Statements of Operations as a result of revising the classification of customer types. As a result of this adjustment, net sales to our supermarkets channel and to our other channel for fiscal 2018 decreased approximately $36 million and $58 million, respectively, compared to the previously reported amounts, while net sales to the independents channel for fiscal 2018 increased approximately $95 million compared to the previously reported amounts. In addition, based on the consistent application of these impacts to fiscal 2017, net sales to our supermarkets channel and to our other channel for fiscal 2017 decreased approximately $16 million and $47 million, respectively, compared to the previously reported amounts, while net sales to the independents channel for fiscal 2017 increased approximately $63 million compared to the previously reported amounts. |
(in thousands) | 2019 | 2018 | 2017 | |||||||||
Restricted stock awards | $ | 21,363 | $ | 19,872 | $ | 16,146 | ||||||
Supervalu replacement awards(1) | 14,304 | — | — | |||||||||
Performance-based share awards | 3,013 | 5,569 | 8,986 | |||||||||
Stock option awards | 199 | 342 | 543 | |||||||||
Share-based compensation expense recorded in Operating expenses | 38,879 | 25,783 | 25,675 | |||||||||
Income tax benefit | (10,458 | ) | (6,538 | ) | (10,006 | ) | ||||||
Share-based compensation expense, net of tax | $ | 28,421 | $ | 19,245 | $ | 15,669 | ||||||
Share-based compensation expense recorded in Restructuring, acquisition and integration related expenses(2) | $ | 33,021 | $ | 107 | $ | 532 | ||||||
Income tax benefit | (8,870 | ) | (29 | ) | (214 | ) | ||||||
Share-based compensation expense recorded in Restructuring, acquisition and integration related expenses, net of tax | $ | 24,151 | $ | 78 | $ | 318 |
(1) | Amounts are derived entirely from liability classified awards. |
(2) | Includes liability classified awards of $31.7 million and equity classified awards of $1.4 million for fiscal 2019. Amounts recorded in fiscal 2018 and 2017 are derived entirely from equity classified awards. |
Number of Shares | Weighted Average Grant-Date Fair Value | ||||||
Outstanding at July 30, 2016 | 733,797 | $ | 55.55 | ||||
Granted | 1,107,526 | 40.16 | |||||
Vested | (420,098 | ) | 50.14 | ||||
Forfeited | (151,114 | ) | 50.16 | ||||
Outstanding at July 29, 2017 | 1,270,111 | 44.56 | |||||
Granted | 716,952 | 40.06 | |||||
Vested | (434,730 | ) | 47.24 | ||||
Forfeited | (207,731 | ) | 41.38 | ||||
Outstanding at July 28, 2018 | 1,344,602 | 41.78 | |||||
Supervalu replacement awards | 4,301,233 | 32.50 | |||||
Granted | 1,665,233 | 23.30 | |||||
Vested | (2,038,290 | ) | 34.81 | ||||
Forfeited | (852,045 | ) | 30.83 | ||||
Outstanding at August 3, 2019 | 4,420,733 | $ | 31.11 |
(in thousands) | 2019 | 2018 | 2017 | |||||||||
Intrinsic value of restricted stock units vested | $ | 36,071 | $ | 12,420 | $ | 10,465 |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||
Outstanding at beginning of year | 291,677 | $ | 52.46 | |||||||||
Supervalu replacement options | 1,625,070 | 41.91 | ||||||||||
Exercised | (6,979 | ) | 16.97 | |||||||||
Forfeited | (1,420 | ) | 13.13 | |||||||||
Canceled | (139,111 | ) | 50.50 | |||||||||
Outstanding at end of year | 1,769,237 | 43.06 | 5.8 years | $ | — | |||||||
Exercisable at end of year | 1,760,980 | $ | 43.02 | 5.8 years | $ | — |
(in thousands) | 2019 | 2018 | 2017 | |||||||||
Restricted stock awards | $ | 21,363 | $ | 19,872 | $ | 16,146 | ||||||
Supervalu replacement awards(1) | 14,304 | — | — | |||||||||
Performance-based share awards | 3,013 | 5,569 | 8,986 | |||||||||
Stock option awards | 199 | 342 | 543 | |||||||||
Share-based compensation expense recorded in Operating expenses | 38,879 | 25,783 | 25,675 | |||||||||
Income tax benefit | (10,458 | ) | (6,538 | ) | (10,006 | ) | ||||||
Share-based compensation expense, net of tax | $ | 28,421 | $ | 19,245 | $ | 15,669 | ||||||
Share-based compensation expense recorded in Restructuring, acquisition and integration related expenses(2) | $ | 33,021 | $ | 107 | $ | 532 | ||||||
Income tax benefit | (8,870 | ) | (29 | ) | (214 | ) | ||||||
Share-based compensation expense recorded in Restructuring, acquisition and integration related expenses, net of tax | $ | 24,151 | $ | 78 | $ | 318 |
(1) | Amounts are derived entirely from liability classified awards. |
(2) | Includes liability classified awards of $31.7 million and equity classified awards of $1.4 million for fiscal 2019. Amounts recorded in fiscal 2018 and 2017 are derived entirely from equity classified awards. |
(in thousands) | 2019(1) (41 weeks) | |||
Net sales | $ | 2,094,046 | ||
Cost of sales | 1,523,742 | |||
Gross profit | 570,304 | |||
Operating expenses | 463,355 | |||
Restructuring expenses | 16,931 | |||
Operating income | 90,018 | |||
Interest expense | 931 | |||
Net periodic benefit income, excluding service cost | (463 | ) | ||
Equity in earnings of unconsolidated subsidiaries | 1,910 | |||
Income from discontinued operations before income taxes | 87,640 | |||
Income tax provision | 21,840 | |||
Income from discontinued operations, net of tax | $ | 65,800 |
(1) | These results reflect retail operations from the Supervalu acquisition date of October 22, 2018 to August 3, 2019. |
(in thousands) | August 3, 2019 | |||
Current assets | ||||
Cash and cash equivalents | $ | 2,917 | ||
Receivables, net | 1,471 | |||
Inventories | 129,142 | |||
Other current assets | 10,199 | |||
Total current assets of discontinued operations | 143,729 | |||
Long-term assets | ||||
Property and equipment | 301,395 | |||
Intangible assets | 48,788 | |||
Other assets | 1,882 | |||
Total long-term assets of discontinued operations | 352,065 | |||
Total assets of discontinued operations | $ | 495,794 | ||
Current liabilities | ||||
Accounts payable | $ | 61,634 | ||
Accrued compensation and benefits | 45,887 | |||
Other current liabilities | 14,744 | |||
Total current liabilities of discontinued operations | 122,265 | |||
Long-term liabilities | ||||
Other long-term liabilities | 1,923 | |||
Total liabilities of discontinued operations | 124,188 | |||
Net assets of discontinued operations | $ | 371,606 |
(in thousands, except per share data) | 2019 | 2018 | 2017 | |||||||||
Basic weighted average shares outstanding | 51,245 | 50,530 | 50,570 | |||||||||
Net effect of dilutive stock awards based upon the treasury stock method | — | 307 | 205 | |||||||||
Diluted weighted average shares outstanding | 51,537 | 50,837 | 50,775 | |||||||||
Basic per share data: | ||||||||||||
Continuing operations | $ | (6.84 | ) | $ | 3.28 | $ | 2.57 | |||||
Discontinued operations | $ | 1.28 | $ | — | $ | — | ||||||
Basic (loss) income per share | $ | (5.56 | ) | $ | 3.28 | $ | 2.57 | |||||
Diluted per share data: | ||||||||||||
Continuing operations | $ | (6.84 | ) | $ | 3.26 | $ | 2.56 | |||||
Discontinued operations(1) | $ | 1.27 | $ | — | $ | — | ||||||
Diluted (loss) income per share | $ | (5.56 | ) | $ | 3.26 | $ | 2.56 | |||||
Anti-dilutive stock-based awards excluded from the calculation of diluted earnings per share | 3,434 | 93 | 44 |
(1) | The computation of diluted earnings per share from discontinued operations is calculated using diluted weighted average shares outstanding, which includes the net effect of dilutive stock awards, of approximately 292 thousand shares for fiscal 2019. |
August 3, 2019 | July 28, 2018 | |||||||||||||||
(in thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
Notes receivable, including current portion | $ | 46,320 | $ | 45,232 | $ | 1,930 | $ | 1,930 | ||||||||
Long-term debt, including current portion | $ | 2,906,483 | $ | 2,730,271 | $ | 320,000 | $ | 320,000 |
Fair Value at August 3, 2019 | ||||||||||||||
(In thousands) | Consolidated Balance Sheets Location | Level 1 | Level 2 | Level 3 | ||||||||||
Assets: | ||||||||||||||
Interest rate swaps designated as hedging instruments | Prepaid expenses and other current assets | $ | — | $ | 389 | $ | — | |||||||
Mutual funds | Prepaid expenses and other current assets | $ | 7 | $ | — | $ | — | |||||||
Interest rate swaps designated as hedging instruments | Other assets | $ | — | $ | 145 | $ | — | |||||||
Mutual funds | Other assets | $ | 1,799 | $ | — | $ | — | |||||||
Liabilities: | ||||||||||||||
Interest rate swaps designated as hedging instruments | Accrued expenses and other current liabilities | $ | — | $ | 16,360 | $ | — | |||||||
Interest rate swaps designated as hedging instruments | Other long-term liabilities | $ | — | $ | 60,737 | $ | — |
Fair Value at July 28, 2018 | ||||||||||||||
(In thousands) | Consolidated Balance Sheets Location | Level 1 | Level 2 | Level 3 | ||||||||||
Assets: | ||||||||||||||
Interest rate swaps designated as hedging instruments | Prepaid expenses and other current assets | $ | — | $ | 1,459 | $ | — | |||||||
Interest rate swaps designated as hedging instruments | Other assets | $ | — | $ | 5,860 | $ | — |
August 3, 2019 | July 28, 2018 | |||||||||||||||
(in thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
Notes receivable, including current portion | $ | 46,320 | $ | 45,232 | $ | 1,930 | $ | 1,930 | ||||||||
Long-term debt, including current portion | $ | 2,906,483 | $ | 2,730,271 | $ | 320,000 | $ | 320,000 |
• | Level 1 Inputs—Unadjusted quoted prices in active markets for identical assets or liabilities. |
• | Level 2 Inputs—Inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data. |
• | Level 3 Inputs—One or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation. |
Preliminary Acquisition Date Fair Values as of August 3, 2019 | ||||||||||
(in thousands) | Estimated Useful Life | Continuing Operations | Discontinued Operations | |||||||
Customer relationship assets | 10-17 years | $ | 810,000 | $ | — | |||||
Favorable operating leases | 1-19 years | 21,629 | — | |||||||
Leases in place | 1-8 years | 10,474 | — | |||||||
Tradenames | 2-9 years | 66,000 | 17,000 | |||||||
Pharmacy prescription files | 5-7 years | — | 45,900 | |||||||
Non-compete agreement | 2 years | 10,000 | — | |||||||
Unfavorable operating leases | 1-12 years | (21,754 | ) | — | ||||||
Total | $ | 896,349 | $ | 62,900 |
(in thousands) | Wholesale | Other | Total | |||||||||
Goodwill as of July 29, 2017(1)(2) | $ | 353,234 | $ | 18,025 | $ | 371,259 | ||||||
Impairment charge | — | (7,872 | ) | (7,872 | ) | |||||||
Goodwill adjustment for prior fiscal year business combinations | 220 | — | 220 | |||||||||
Change in foreign exchange rates | (1,112 | ) | — | (1,112 | ) | |||||||
Goodwill as of July 28, 2018(1)(2) | 352,342 | 10,153 | 362,495 | |||||||||
Goodwill from current fiscal year business combinations | 374,757 | — | 374,757 | |||||||||
Impairment charge | (292,757 | ) | — | (292,757 | ) | |||||||
Other adjustments | (1,951 | ) | — | (1,951 | ) | |||||||
Change in foreign exchange rates | (288 | ) | — | (288 | ) | |||||||
Goodwill as of August 3, 2019(1)(2) | $ | 432,103 | $ | 10,153 | $ | 442,256 |
(1) | Wholesale amounts are net of accumulated goodwill impairment charges of $0.0 million, $0.0 million and $292.8 million for fiscal 2017, 2018 and 2019, respectively. |
(2) | Other amounts are net of accumulated goodwill impairment charges of $1.4 million, $9.3 million and $9.3 million for fiscal 2017, 2018 and 2019, respectively. |
2019 | 2018 | ||||||||||||||||||||||
(in thousands) | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||
Amortizing intangible assets: | |||||||||||||||||||||||
Customer relationships | $ | 1,007,089 | $ | 111,940 | $ | 895,149 | $ | 197,246 | $ | 61,543 | $ | 135,703 | |||||||||||
Non-compete agreements | 12,900 | 6,237 | 6,663 | 2,900 | 1,914 | 986 | |||||||||||||||||
Operating lease intangibles | 32,103 | 2,209 | 29,894 | — | — | — | |||||||||||||||||
Trademarks and tradenames | 67,700 | 14,161 | 53,539 | 1,700 | 981 | 719 | |||||||||||||||||
Total amortizing intangible assets | 1,119,792 | 134,547 | 985,245 | 201,846 | 64,438 | 137,408 | |||||||||||||||||
Indefinite lived intangible assets: | |||||||||||||||||||||||
Trademarks and tradenames | 55,813 | — | 55,813 | 55,801 | — | 55,801 | |||||||||||||||||
Intangibles assets, net | $ | 1,175,605 | $ | 134,547 | $ | 1,041,058 | $ | 257,647 | $ | 64,438 | $ | 193,209 |
Fiscal Year: | (In thousands) | ||
2020 | $ | 87,304 | |
2021 | 73,192 | ||
2022 | 67,544 | ||
2023 | 67,232 | ||
2024 | 67,453 | ||
Thereafter | 622,520 | ||
$ | 985,245 |
(in thousands) | 2019 | 2018 | 2017 | ||||||||
Continuing operations | $ | (84,609 | ) | $ | 47,075 | $ | 84,268 | ||||
Discontinued operations | 21,840 | — | — | ||||||||
Total | $ | (62,769 | ) | $ | 47,075 | $ | 84,268 |
(in thousands) | 2019 | 2018 | 2017 | ||||||||
Income tax expense | $ | (84,609 | ) | $ | 47,075 | $ | 84,268 | ||||
Stockholders’ equity, difference between compensation expense for tax purposes and amounts recognized for financial statement purposes | — | — | 1,320 | ||||||||
Other comprehensive income | (33,854 | ) | 1,561 | 3,222 | |||||||
Total | $ | (118,463 | ) | $ | 48,636 | $ | 88,810 |
(in thousands) | Current | Deferred | Total | ||||||||
Fiscal 2019 | |||||||||||
U.S. Federal | $ | (7,652 | ) | $ | (59,528 | ) | $ | (67,180 | ) | ||
State and Local | 1,351 | (20,786 | ) | (19,435 | ) | ||||||
Foreign | 1,919 | 87 | 2,006 | ||||||||
$ | (4,382 | ) | $ | (80,227 | ) | $ | (84,609 | ) | |||
Fiscal 2018 | |||||||||||
U.S. Federal | $ | 46,210 | $ | (16,648 | ) | $ | 29,562 | ||||
State and Local | 13,310 | 1,878 | 15,188 | ||||||||
Foreign | 2,374 | (49 | ) | 2,325 | |||||||
$ | 61,894 | $ | (14,819 | ) | $ | 47,075 | |||||
Fiscal 2017 | |||||||||||
U.S. Federal | $ | 70,669 | $ | (1,874 | ) | $ | 68,795 | ||||
State and Local | 14,653 | (82 | ) | 14,571 | |||||||
Foreign | 837 | 65 | 902 | ||||||||
$ | 86,159 | $ | (1,891 | ) | $ | 84,268 |
(in thousands) | 2019 | 2018 | 2017 | ||||||||
Computed “expected” tax expense | $ | (91,411 | ) | $ | 57,359 | $ | 75,048 | ||||
State and local income tax, net of Federal income tax benefit | (24,124 | ) | 10,501 | 9,694 | |||||||
Non-deductible expenses | 5,433 | 955 | 1,951 | ||||||||
Tax effect of share-based compensation | 125 | 149 | 29 | ||||||||
General business credits | (629 | ) | (552 | ) | (915 | ) | |||||
Unrecognized tax benefits | (8,146 | ) | 618 | 118 | |||||||
Nondeductible goodwill impairment | 32,619 | — | — | ||||||||
Impacts related to the TCJA | — | (21,719 | ) | — | |||||||
Other, net | 1,524 | (236 | ) | (1,657 | ) | ||||||
Total income tax expense | $ | (84,609 | ) | $ | 47,075 | $ | 84,268 |
(in thousands) | 2019 | 2018 | 2017 | ||||||||
Unrecognized tax benefits at beginning of period | $ | 1,104 | $ | 478 | $ | 360 | |||||
Unrecognized tax benefits added during the period | — | 626 | 583 | ||||||||
Unrecognized tax benefits assumed in a business combination | 49,566 | — | — | ||||||||
Decreases in unrecognized tax benefits due to statute expiration and payments | (10,528 | ) | — | (465 | ) | ||||||
Unrecognized tax benefits at end of period | $ | 40,141 | $ | 1,104 | $ | 478 |
(in thousands) | August 3, 2019 | July 28, 2018 | |||||
Deferred tax assets: | |||||||
Inventories, principally due to additional costs inventoried for tax purposes | $ | 2 | $ | 7,265 | |||
Compensation and benefits related | 100,942 | 25,740 | |||||
Accounts receivable, principally due to allowances for uncollectible accounts | 3,355 | 4,269 | |||||
Accrued expenses | 12,659 | 119 | |||||
Net operating loss carryforwards | 44,396 | 482 | |||||
Non-loss tax carryforwards | 10,143 | — | |||||
Foreign tax credits | 445 | 445 | |||||
Intangible assets | 5,869 | — | |||||
Interest rate swap agreements | 20,518 | — | |||||
Other deferred tax assets | 2,134 | 117 | |||||
Total gross deferred tax assets | 200,463 | 38,437 | |||||
Less valuation allowance | (445 | ) | (445 | ) | |||
Net deferred tax assets | $ | 200,018 | $ | 37,992 | |||
Deferred tax liabilities: | |||||||
Plant and equipment, principally due to differences in depreciation | $ | 117,195 | $ | 39,978 | |||
Inventories, principally due to additional costs inventoried for tax purposes | 51,392 | — | |||||
Intangible assets | 1,016 | 36,544 | |||||
Interest rate swap agreements | 2,000 | ||||||
Accrued expenses | 3,854 | ||||||
Other | 370 | — | |||||
Total deferred tax liabilities | 169,973 | 82,376 | |||||
Net deferred tax assets (liabilities) | $ | 30,045 | $ | (44,384 | ) |
(in thousands) | Average Interest Rate at August 3, 2019 | Calendar Maturity Year | August 3, 2019 | July 28, 2018 | |||||||
Term Loan Facility | 6.40% | 2019-2025 | $ | 1,864,900 | $ | — | |||||
ABL Credit Facility | 3.58% | 2023 | 1,080,000 | — | |||||||
Other secured loans | 5.54% | 2023-2024 | 57,649 | — | |||||||
Former ABL Credit Facility | — | 210,000 | |||||||||
Former Term Loan Facility | — | 110,000 | |||||||||
Debt issuance costs, net | (54,891 | ) | (1,164 | ) | |||||||
Original issue discount on debt | (41,175 | ) | — | ||||||||
Long-term debt, including current portion | 2,906,483 | 318,836 | |||||||||
Less: current portion of long-term debt | (87,433 | ) | (10,000 | ) | |||||||
Long-term debt | $ | 2,819,050 | $ | 308,836 |
Fiscal Year | (In thousands) | |||
2020 | $ | 102,713 | ||
2021 | 30,413 | |||
2022 | 31,091 | |||
2023 | 31,806 | |||
2024 | 1,105,526 | |||
2025 and thereafter | 1,701,000 | |||
$ | 3,002,549 |
Assets securing the ABL Credit Facility (in thousands)(1): | August 3, 2019 | ||
Certain inventory assets included in Inventories and Current assets of discontinued operations | $ | 2,172,662 | |
Certain receivables included in Accounts receivable, net and Current assets of discontinued operations | $ | 916,543 |
(1) | The ABL Credit Facility is also secured by all of the Company’s pharmacy scripts, which are included in Long-term assets of discontinued operations in the Consolidated Balance Sheets as of August 3, 2019. |
Unused available credit and fees under the ABL Credit Facility (in thousands, except percentages): | August 3, 2019 | ||
Outstanding letters of credit | $ | 76,199 | |
Letter of credit fees | 1.375 | % | |
Unused available credit | $ | 919,154 | |
Unused facility fees | 0.25 | % |
• | the reclassification of Accrued compensation and benefits to present separately from Accrued expenses and other current liabilities; |
• | the reclassification of Notes payable balances into Long-term debt; |
• | the reclassification of the long-term portion of capital lease obligations from Long-term debt to present separately within Long-term capital lease obligations; and |
• | the reclassification of residual financing obligations of $7.4 million associated with build-to-suit properties for which the Company is not obligated to fund unless it is obligated under a future extension of a lease agreement from the Long-term capital lease obligations to Other long-term liabilities. |
• | the reclassification of goodwill and asset impairment charges of $11.2 million from a line item previously titled Restructuring and asset impairment charges to a new line item titled Goodwill and asset impairment charges; |
• | the reclassification of acquisition costs previously included within Operating expenses of $5.0 million to a new line item titled Restructuring, acquisition and integration related expenses; and |
• | the combination of Interest expense and Interest income to present the same amounts within Interest expense, net. |
Customer relationships | 7-20 years |
Non-competition agreements | 1-10 years |
Trademarks and tradenames | 2-10 years |
Leases in place | 1-9 years |
Favorable operating leases | 2-25 years |
Unfavorable operating leases | 2-25 years |
Pharmacy prescription files | 5-7 years |
• | Level 1 Inputs—Unadjusted quoted prices in active markets for identical assets or liabilities. |
• | Level 2 Inputs—Inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data. |
• | Level 3 Inputs—One or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation. |
(in thousands) | 2019 | 2018 | 2017 | ||||||||
Beginning balance | $ | 24,703 | $ | 22,776 | $ | 20,109 | |||||
Assumed liabilities from the Supervalu acquisition | 55,213 | — | — | ||||||||
Expense | 42,764 | 14,274 | 13,740 | ||||||||
Claim payments | (33,087 | ) | (12,347 | ) | (11,073 | ) | |||||
Reclassifications | (755 | ) | — | — | |||||||
Ending balance | $ | 88,838 | $ | 24,703 | $ | 22,776 |
2019 | ||||||||
(in thousands) | Pension Benefits | Other Postretirement Benefits | ||||||
Changes in Benefit Obligation | ||||||||
Benefit obligation at acquisition date of October 22, 2018 | $ | 2,499,954 | $ | 52,276 | ||||
Plan amendment | — | (4,199 | ) | |||||
Service cost | — | 173 | ||||||
Interest cost | 75,706 | 1,447 | ||||||
Actuarial loss (gain) | 249,899 | (9,836 | ) | |||||
Benefits paid | (116,285 | ) | (2,179 | ) | ||||
Benefit obligation at end of year | 2,709,274 | 37,682 | ||||||
Changes in Plan Assets | ||||||||
Fair value of plan assets at acquisition date of October 22, 2018 | 2,305,020 | 11,586 | ||||||
Actual return on plan assets | 303,696 | 260 | ||||||
Employer contributions | 4,116 | 1,636 | ||||||
Benefits paid | (116,285 | ) | (2,239 | ) | ||||
Fair value of plan assets at end of year | 2,496,547 | 11,243 | ||||||
Unfunded status at end of year | $ | (212,727 | ) | $ | (26,439 | ) |
2019 | ||||||||
(in thousands) | Pension Benefits | Other Postretirement Benefits | ||||||
Net Periodic Benefit (Income) Cost | ||||||||
Service cost | $ | — | $ | 173 | ||||
Interest cost | 75,706 | 1,447 | ||||||
Expected return on plan assets | (111,695 | ) | (184 | ) | ||||
Net periodic benefit (income) cost | (35,989 | ) | 1,436 | |||||
Other Changes in Plan Assets and Benefits Obligations Recognized in Other Comprehensive Income (Loss) | ||||||||
Prior service benefit | — | (4,199 | ) | |||||
Amortization of prior service benefit | — | — | ||||||
Net actuarial loss (gain) | 57,902 | (9,912 | ) | |||||
Total expense (benefit) recognized in Other comprehensive income (loss) | 57,902 | (14,111 | ) | |||||
Total expense (benefit) recognized in net periodic benefit cost (income) and Other comprehensive income (loss) | $ | 21,913 | $ | (12,675 | ) |
August 3, 2019 | ||||||||
(in thousands) | Pension Benefits | Other Postretirement Benefits | ||||||
Accrued compensation and benefits | $ | 1,900 | $ | — | ||||
Pension and other postretirement benefit obligations | 210,827 | 26,439 | ||||||
Total | $ | 212,727 | $ | 26,439 |
2019 | |||
Benefit obligation assumptions: | |||
Discount rate | 2.99% - 3.49% | ||
Net periodic benefit cost assumptions: | |||
Discount rate | 4.30% - 4.42% | ||
Rate of compensation increase | — | % | |
Expected return on plan assets(1) | 2.25% - 6.50% |
(1) | Expected return on plan assets is estimated by utilizing forward-looking, long-term return, risk and correlation assumptions developed and updated annually by the Company. These assumptions are weighted by the actual or target allocation to each underlying asset class represented in the pension plan asset portfolio. We also assess the expected long-term return on plan assets assumption by comparison to long-term historical performance on an asset class to ensure the assumption is reasonable. Long-term trends are also evaluated relative to market factors such as inflation, interest rates, and fiscal and monetary policies in order to assess the capital market assumptions. |
Asset Category | Target | 2019 | ||||
Domestic equity | 21.2 | % | 22.1 | % | ||
International equity | 6.7 | % | 6.2 | % | ||
Private equity | 5.3 | % | 4.2 | % | ||
Fixed income | 60.9 | % | 62.3 | % | ||
Real estate | 5.9 | % | 5.2 | % | ||
Total | 100.0 | % | 100.0 | % |
Level 1 | Level 2 | Level 3 | Measured at NAV as a Practical Expedient | Total | ||||||||||||||||
Common stock | $ | 397,800 | $ | — | $ | $ | $ | 397,800 | ||||||||||||
Common collective trusts | — | 1,046,590 | — | 83,504 | 1,130,094 | |||||||||||||||
Corporate bonds | — | 362,251 | — | — | 362,251 | |||||||||||||||
Government securities | — | 248,872 | — | — | 248,872 | |||||||||||||||
Mutual funds | 469 | 62,254 | — | — | 62,723 | |||||||||||||||
Mortgage-backed securities | — | 10,920 | — | — | 10,920 | |||||||||||||||
Other | 5,603 | 73,745 | — | — | 79,348 | |||||||||||||||
Private equity and real estate partnerships | — | — | — | 204,539 | 204,539 | |||||||||||||||
Total plan assets at fair value | $ | 403,872 | $ | 1,804,632 | $ | — | $ | 288,043 | $ | 2,496,547 |
Fiscal Year | Pension Benefits | Other Postretirement Benefits | ||||||
2020 | $ | 608,400 | $ | 4,000 | ||||
2021 | 119,700 | 3,800 | ||||||
2022 | 125,200 | 3,600 | ||||||
2023 | 127,800 | 3,500 | ||||||
2024 | 131,300 | 3,300 | ||||||
Years 2025-2029 | 671,200 | 13,400 |
Post-Employment Benefits | |||
August 3, 2019 | |||
Accrued compensation and benefits | $ | 2,356 | |
Other long-term liabilities | 5,053 | ||
Total | $ | 7,409 |
a. | Assets contributed to the multiemployer plan by one employer are held in trust and may be used to provide benefits to employees of other participating employers. |
b. | If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. |
c. | If we choose to stop participating in some multiemployer plans, or make market exits or closures or otherwise have participation in the plan drop below certain levels, we may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. |
Pension Protection Act Zone Status | Contributions | ||||||||||||||
Pension Fund | EIN-Pension Plan Number | Plan Month/Day End Date | 2018 | FIP/RP Status Pending/Implemented | 2019 | Surcharges Imposed(1) | Amortization Provisions | ||||||||
Minneapolis Food Distributing Industry Pension Plan(2) | 416047047-001 | 12/31 | Green | No | $ | 8 | No | No | |||||||
Minneapolis Retail Meat Cutters and Food Handlers Pension Fund(3) | 410905139-001 | 2/28 | Red | Implemented | 7 | No | No | ||||||||
Minneapolis Retail Meat Cutters and Food Handlers Variable Annuity Pension Fund(3) | 83-2598425 | 12/31 | N/A | N/A | 1 | N/A | N/A | ||||||||
Central States, Southeast and Southwest Areas Pension Fund(2) | 366044243-001 | 12/31 | Deep Red | Implemented | 5 | No | Yes | ||||||||
UFCW Unions and Participating Employer Pension Fund(3) | 526117495-001 | 12/31 | Red | Implemented | 4 | No | No | ||||||||
Western Conference of Teamsters Pension Plan Trust(2) | 916145047-001 | 12/31 | Green | No | 12 | No | No | ||||||||
UFCW Unions and Employers Pension Plan(3) | 396069053-001 | 10/31 | Deep Red | Implemented | 1 | Yes | Yes | ||||||||
All Other Multiemployer Pension Plans(4) | 3 | ||||||||||||||
Total | $ | 41 |
(1) | PPA surcharges are 5 percent or 10 percent of eligible contributions and may not apply to all collective bargaining agreements or total contributions to each plan. |
(2) | These multiemployer pension plans are associated with continuing operations. |
(3) | These multiemployer pension plans are associated with discontinued operations. |
(4) | All Other Multiemployer Pension Plans include 6 plans, none of which is individually significant when considering contributions to the plan, severity of the underfunded status or other factors. |
Most Significant Collective Bargaining Agreement | |||||||||||
Pension Fund | Range of Collective Bargaining Agreement Expiration Dates | Total Collective Bargaining Agreements | Expiration Date | % of Associates under Collective Bargaining Agreement (1) | Over 5% Contributions 2019 | ||||||
Minneapolis Food Distributing Industry Pension Plan(2) | 5/31/2022 | 1 | 5/31/2022 | 100.0 | % | Yes | |||||
Minneapolis Retail Meat Cutters and Food Handlers Pension Fund(3) | 3/4/2023 | 1 | 3/4/2023 | 100.0 | % | Yes | |||||
Minneapolis Retail Meat Cutters and Food Handlers Variable Annuity Pension Fund(3) | 3/4/2023 | 1 | 3/4/2023 | 100.0 | % | N/A (contributions began 1/1/2019) | |||||
Central States, Southeast and Southwest Areas Pension Fund(2) | 5/31/2019 | 4 | 9/14/2019 | 39.4 | % | No | |||||
UFCW Unions and Participating Employer Pension Fund(3) | 7/11/2020 | 2 | 7/11/2020 | 71.3 | % | Yes | |||||
Western Conference of Teamsters Pension Plan Trust(2) | 4/20/2019 | 20 | 4/22/2023 | 15.6 | % | No | |||||
UFCW Unions and Employers Pension Plan(3) | 4/9/2022 | 1 | 4/9/2022 | 100.0 | % | Yes |
(1) | Company participating employees in the most significant collective bargaining agreement as a percent of all Company employees participating in the respective fund. |
(2) | These multiemployer pension plans are associated with continuing operations. |
(3) | These multiemployer pension plans are associated with discontinued operations. |
(in thousands) | Original Estimated Useful Lives | 2019 | 2018 | |||||||
Land | $ | 158,625 | $ | 52,929 | ||||||
Buildings and improvements | 20-40 years | 912,732 | 431,297 | |||||||
Leasehold improvements | 5-20 years | 123,748 | 106,014 | |||||||
Equipment | 3-30 years | 722,911 | 426,732 | |||||||
Motor vehicles | 3-7 years | 76,021 | 4,884 | |||||||
Capital lease assets | 1-11 years | 114,107 | 15,368 | |||||||
Construction in progress | 172,702 | 22,105 | ||||||||
2,280,846 | 1,059,329 | |||||||||
Less accumulated depreciation and amortization | 641,587 | 488,183 | ||||||||
Property and equipment, net | $ | 1,639,259 | $ | 571,146 |
(in thousands) | Original Estimated Useful Lives | 2019 | 2018 | |||||||
Land | $ | 158,625 | $ | 52,929 | ||||||
Buildings and improvements | 20-40 years | 912,732 | 431,297 | |||||||
Leasehold improvements | 5-20 years | 123,748 | 106,014 | |||||||
Equipment | 3-30 years | 722,911 | 426,732 | |||||||
Motor vehicles | 3-7 years | 76,021 | 4,884 | |||||||
Capital lease assets | 1-11 years | 114,107 | 15,368 | |||||||
Construction in progress | 172,702 | 22,105 | ||||||||
2,280,846 | 1,059,329 | |||||||||
Less accumulated depreciation and amortization | 641,587 | 488,183 | ||||||||
Property and equipment, net | $ | 1,639,259 | $ | 571,146 |
2019 | |||||||||||||||||||
(In thousands except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter(1) | Full Year(1) | ||||||||||||||
Net sales | $ | 2,868,156 | $ | 6,149,206 | $ | 5,962,620 | $ | 6,407,086 | $ | 21,387,068 | |||||||||
Gross profit | 412,331 | 761,783 | 788,550 | 822,346 | 2,785,010 | ||||||||||||||
Net (loss) income from continuing operations | (21,361 | ) | (363,303 | ) | 32,774 | 1,207 | (350,683 | ) | |||||||||||
Income from discontinued operations, net of tax | 2,070 | 21,407 | 24,370 | 17,953 | 65,800 | ||||||||||||||
Net (loss) income including noncontrolling interests | (19,291 | ) | (341,896 | ) | 57,144 | 19,160 | (284,883 | ) | |||||||||||
Net (loss) income attributable to United Natural Foods, Inc. | (19,294 | ) | (341,725 | ) | 57,092 | 18,937 | (284,990 | ) | |||||||||||
Basic (loss) earnings per share: | |||||||||||||||||||
Continuing operations | $ | (0.42 | ) | $ | (7.15 | ) | $ | 0.64 | $ | 0.02 | $ | (6.84 | ) | ||||||
Basic (loss) income per share | $ | (0.38 | ) | $ | (6.72 | ) | $ | 1.12 | $ | 0.36 | $ | (5.56 | ) | ||||||
Diluted (loss) earnings per share: | |||||||||||||||||||
Continuing operations | $ | (0.42 | ) | $ | (7.15 | ) | $ | 0.64 | $ | 0.02 | $ | (6.84 | ) | ||||||
Diluted (loss) income per share | $ | (0.38 | ) | $ | (6.72 | ) | $ | 1.12 | $ | 0.36 | $ | (5.56 | ) |
(1) | Fiscal 2019 results reflect 53 weeks of operating results, as compared to fiscal 2018 52 weeks. The fourth quarter of fiscal 2019 includes 14 weeks and the fourth quarter of fiscal 2018 contains 13 weeks. |
2018 | |||||||||||||||||||
(In thousands except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||
Net sales | $ | 2,457,545 | $ | 2,528,011 | $ | 2,648,879 | $ | 2,592,248 | $ | 10,226,683 | |||||||||
Gross profit | 367,216 | 371,522 | 408,087 | 375,942 | 1,522,767 | ||||||||||||||
Net income from continuing operations | 30,505 | 50,486 | 51,891 | 32,788 | 165,670 | ||||||||||||||
Income from discontinued operations, net of tax | — | — | — | — | — | ||||||||||||||
Net income including noncontrolling interests | 30,505 | 50,486 | 51,891 | 32,788 | 165,670 | ||||||||||||||
Net income attributable to United Natural Foods, Inc. | 30,505 | 50,486 | 51,891 | 32,788 | 165,670 | ||||||||||||||
Basic earnings per share: | |||||||||||||||||||
Continuing operations | $ | 0.60 | $ | 1.00 | $ | 1.03 | $ | 0.65 | $ | 3.28 | |||||||||
Basic income per share | $ | 0.60 | $ | 1.00 | $ | 1.03 | $ | 0.65 | $ | 3.28 | |||||||||
Diluted earnings per share: | |||||||||||||||||||
Continuing operations | $ | 0.60 | $ | 0.99 | $ | 1.02 | $ | 0.64 | $ | 3.26 | |||||||||
Diluted income per share | $ | 0.60 | $ | 0.99 | $ | 1.02 | $ | 0.64 | $ | 3.26 |
(in thousands) | 2019 | 2018 | 2017 | Affected Line Item on the Consolidated Statements of Operations | ||||||||||
Swap agreements: | ||||||||||||||
Reclassification of cash flow hedge | $ | 13 | $ | 827 | $ | (1,462 | ) | Interest expense, net | ||||||
Income tax (benefit) expense | 3 | 183 | (575 | ) | (Benefit) provision for income taxes | |||||||||
Total reclassifications, net of tax | $ | 10 | $ | 644 | $ | (887 | ) |
(in thousands) | 2019 | 2018 | 2017 | |||||||||
2019 SUPERVALU INC. restructuring expenses | $ | 74,414 | $ | — | $ | — | ||||||
Acquisition and integration costs | 56,589 | 4,967 | — | |||||||||
Closed property charges | 22,536 | — | — | |||||||||
2018 Earth Origins Market restructuring expenses and loss on sale | — | 4,771 | — | |||||||||
2017 Cost Saving and Efficiency Initiatives | — | — | 6,864 | |||||||||
Total | $ | 153,539 | $ | 9,738 | $ | 6,864 |
(in thousands) | 2019 | 2018 | 2017 | |||||||||
Beginning balance | $ | — | $ | — | $ | 443 | ||||||
Acquired liabilities | 34,581 | — | — | |||||||||
Additions, accretion and changes in estimates, net | 16,529 | 1,400 | 258 | |||||||||
Payments | (22,467 | ) | (1,400 | ) | (701 | ) | ||||||
Ending balance | $ | 28,643 | $ | — | $ | — |
(in thousands) | 2019 SUPERVALU INC. | 2018 Earth Origins Market | 2017 Cost Saving and Efficiency Initiatives | Total | ||||||||||||
Balances at July 29, 2017 | $ | — | $ | — | $ | 4,298 | $ | 4,298 | ||||||||
Restructuring program charge | — | 2,219 | — | 2,219 | ||||||||||||
Cash payments | — | (1,836 | ) | (3,597 | ) | (5,433 | ) | |||||||||
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 | ||||||||
Cumulative program charges incurred from inception to date | $ | 74,414 | $ | 2,219 | $ | 6,864 | $ | 83,497 |
(1) | Includes $43.0 million of charges related to change-in-control expense to satisfy outstanding equity awards and severance related costs. |
• | Supernatural, which consists of chain accounts that are national in scope and carry primarily natural products, and at this time currently consists solely of Whole Foods Market; |
• | Independents, which include single store and chain accounts (excluding supernatural, as defined above), which carry primarily natural products and buying clubs of consumer groups joined to buy products; |
• | Supermarkets, which include accounts that also carry conventional products, and at this time currently include chain accounts, supermarket independents, and gourmet and ethnic specialty stores; and |
• | Other, which includes foodservice, e-commerce and international customers outside of Canada, as well as sales to Amazon.com, Inc. |
(in millions) | Net Sales for Fiscal 2019 (53 weeks) | |||||||||||||||
Customer Channel | Wholesale | Other | Eliminations | Consolidated | ||||||||||||
Supernatural | $ | 4,393 | $ | — | $ | — | $ | 4,393 | ||||||||
Independents | 3,179 | — | — | 3,179 | ||||||||||||
Supermarkets | 12,505 | — | — | 12,505 | ||||||||||||
Other | 1,248 | 228 | (166 | ) | 1,310 | |||||||||||
Total | $ | 21,325 | $ | 228 | $ | (166 | ) | $ | 21,387 |
(in millions) | Net Sales for Fiscal 2018(1) (52 weeks) | |||||||||||||||
Customer Channel | Wholesale | Other | Eliminations | Consolidated | ||||||||||||
Supernatural | $ | 3,758 | $ | — | $ | — | $ | 3,758 | ||||||||
Independents | 2,668 | — | — | 2,668 | ||||||||||||
Supermarkets | 2,820 | — | — | 2,820 | ||||||||||||
Other | 925 | 228 | (172 | ) | 981 | |||||||||||
Total | $ | 10,171 | $ | 228 | $ | (172 | ) | $ | 10,227 |
(in millions) | Net Sales for Fiscal 2017(1) (52 weeks) | |||||||||||||||
Customer Channel | Wholesale | Other | Eliminations | Consolidated | ||||||||||||
Supernatural | $ | 3,096 | $ | — | $ | — | $ | 3,096 | ||||||||
Independents | 2,490 | — | — | 2,490 | ||||||||||||
Supermarkets | 2,731 | — | — | 2,731 | ||||||||||||
Other | 894 | 232 | (169 | ) | 957 | |||||||||||
Total | $ | 9,211 | $ | 232 | $ | (169 | ) | $ | 9,274 |
(1) | During fiscal 2019, the presentation of net sales by customer channel was adjusted to reflect changes in the classification of customer types as a result of a detailed review of customer channel definitions. There was no impact to the Consolidated Statements of Operations as a result of revising the classification of customer types. As a result of this adjustment, net sales to our supermarkets channel and to our other channel for fiscal 2018 decreased approximately $36 million and $58 million, respectively, compared to the previously reported amounts, while net sales to the independents channel for fiscal 2018 increased approximately $95 million compared to the previously reported amounts. In addition, based on the consistent application of these impacts to fiscal 2017, net sales to our supermarkets channel and to our other channel for fiscal 2017 decreased approximately $16 million and $47 million, respectively, compared to the previously reported amounts, while net sales to the independents channel for fiscal 2017 increased approximately $63 million compared to the previously reported amounts. |
(in thousands) | August 3, 2019 | July 28, 2018 | |||||
Customer accounts receivable | $ | 1,063,167 | $ | 595,698 | |||
Allowance for uncollectible receivables | (20,725 | ) | (15,996 | ) | |||
Other receivables, net | 23,257 | — | |||||
Accounts receivable, net | $ | 1,065,699 | $ | 579,702 | |||
Customer notes receivable, net, included within Prepaid expenses and other current assets | $ | 11,912 | $ | 1,277 | |||
Long-term notes receivable, net, included within Other assets | $ | 34,408 | $ | 653 |
(in thousands) | 2019 | 2018 | 2017 | |||||||||
Balance at beginning of year | $ | 15,996 | $ | 14,509 | $ | 11,230 | ||||||
Additions charged to operating expenses | 9,749 | 12,006 | 5,728 | |||||||||
Reductions of net sales | 7,061 | — | — | |||||||||
Deductions | (12,081 | ) | (10,519 | ) | (2,449 | ) | ||||||
Balance at end of year | $ | 20,725 | $ | 15,996 | $ | 14,509 |
(in thousands) | August 3, 2019 | July 28, 2018 | |||||
Customer accounts receivable | $ | 1,063,167 | $ | 595,698 | |||
Allowance for uncollectible receivables | (20,725 | ) | (15,996 | ) | |||
Other receivables, net | 23,257 | — | |||||
Accounts receivable, net | $ | 1,065,699 | $ | 579,702 | |||
Customer notes receivable, net, included within Prepaid expenses and other current assets | $ | 11,912 | $ | 1,277 | |||
Long-term notes receivable, net, included within Other assets | $ | 34,408 | $ | 653 |
(in thousands) | 2019 | 2018 | 2017 | |||||||||
Balance at beginning of year | $ | 15,996 | $ | 14,509 | $ | 11,230 | ||||||
Additions charged to operating expenses | 9,749 | 12,006 | 5,728 | |||||||||
Reductions of net sales | 7,061 | — | — | |||||||||
Deductions | (12,081 | ) | (10,519 | ) | (2,449 | ) | ||||||
Balance at end of year | $ | 20,725 | $ | 15,996 | $ | 14,509 |
(in thousands) | Benefit Plans | Foreign Currency | Swap Agreements | Total | ||||||||||||
Accumulated other comprehensive loss at July 30, 2016, net of tax | $ | — | $ | (18,799 | ) | $ | (3,580 | ) | $ | (22,379 | ) | |||||
Other comprehensive income before reclassifications | — | 3,537 | 3,992 | 7,529 | ||||||||||||
Amortization of cash flow hedge | — | — | 887 | 887 | ||||||||||||
Net current period Other comprehensive loss | — | 3,537 | 4,879 | 8,416 | ||||||||||||
Accumulated other comprehensive (loss) income at July 29, 2017, net of tax | $ | — | $ | (15,262 | ) | $ | 1,299 | $ | (13,963 | ) | ||||||
Other comprehensive (loss) income before reclassifications | — | (3,791 | ) | 4,219 | 428 | |||||||||||
Amortization of cash flow hedge | — | — | (644 | ) | (644 | ) | ||||||||||
Net current period Other comprehensive (loss) income | — | (3,791 | ) | 3,575 | (216 | ) | ||||||||||
Accumulated other comprehensive (loss) income at July 28, 2018, net of tax | $ | — | $ | (19,053 | ) | $ | 4,874 | $ | (14,179 | ) | ||||||
Other comprehensive loss before reclassifications | (32,458 | ) | (1,029 | ) | (61,277 | ) | (94,764 | ) | ||||||||
Amortization of cash flow hedge | — | — | (10 | ) | (10 | ) | ||||||||||
Net current period Other comprehensive loss | (32,458 | ) | (1,029 | ) | (61,287 | ) | (94,774 | ) | ||||||||
Accumulated other comprehensive loss at August 3, 2019, net of tax | $ | (32,458 | ) | $ | (20,082 | ) | $ | (56,413 | ) | $ | (108,953 | ) |
(1) | Amortization of amounts included in net periodic benefit (income) cost includes amortization of prior service benefit and amortization of net actuarial loss as reflected in Note 14—Benefit Plans. |
Level 1 | Level 2 | Level 3 | Measured at NAV as a Practical Expedient | Total | ||||||||||||||||
Common stock | $ | 397,800 | $ | — | $ | $ | $ | 397,800 | ||||||||||||
Common collective trusts | — | 1,046,590 | — | 83,504 | 1,130,094 | |||||||||||||||
Corporate bonds | — | 362,251 | — | — | 362,251 | |||||||||||||||
Government securities | — | 248,872 | — | — | 248,872 | |||||||||||||||
Mutual funds | 469 | 62,254 | — | — | 62,723 | |||||||||||||||
Mortgage-backed securities | — | 10,920 | — | — | 10,920 | |||||||||||||||
Other | 5,603 | 73,745 | — | — | 79,348 | |||||||||||||||
Private equity and real estate partnerships | — | — | — | 204,539 | 204,539 | |||||||||||||||
Total plan assets at fair value | $ | 403,872 | $ | 1,804,632 | $ | — | $ | 288,043 | $ | 2,496,547 |
Asset Category | Target | 2019 | ||||
Domestic equity | 21.2 | % | 22.1 | % | ||
International equity | 6.7 | % | 6.2 | % | ||
Private equity | 5.3 | % | 4.2 | % | ||
Fixed income | 60.9 | % | 62.3 | % | ||
Real estate | 5.9 | % | 5.2 | % | ||
Total | 100.0 | % | 100.0 | % |
Post-Employment Benefits | |||
August 3, 2019 | |||
Accrued compensation and benefits | $ | 2,356 | |
Other long-term liabilities | 5,053 | ||
Total | $ | 7,409 |
August 3, 2019 | ||||||||
(in thousands) | Pension Benefits | Other Postretirement Benefits | ||||||
Accrued compensation and benefits | $ | 1,900 | $ | — | ||||
Pension and other postretirement benefit obligations | 210,827 | 26,439 | ||||||
Total | $ | 212,727 | $ | 26,439 |
2019 | ||||||||
(in thousands) | Pension Benefits | Other Postretirement Benefits | ||||||
Net Periodic Benefit (Income) Cost | ||||||||
Service cost | $ | — | $ | 173 | ||||
Interest cost | 75,706 | 1,447 | ||||||
Expected return on plan assets | (111,695 | ) | (184 | ) | ||||
Net periodic benefit (income) cost | (35,989 | ) | 1,436 | |||||
Other Changes in Plan Assets and Benefits Obligations Recognized in Other Comprehensive Income (Loss) | ||||||||
Prior service benefit | — | (4,199 | ) | |||||
Amortization of prior service benefit | — | — | ||||||
Net actuarial loss (gain) | 57,902 | (9,912 | ) | |||||
Total expense (benefit) recognized in Other comprehensive income (loss) | 57,902 | (14,111 | ) | |||||
Total expense (benefit) recognized in net periodic benefit cost (income) and Other comprehensive income (loss) | $ | 21,913 | $ | (12,675 | ) |
2019 | ||||||||
(in thousands) | Pension Benefits | Other Postretirement Benefits | ||||||
Changes in Benefit Obligation | ||||||||
Benefit obligation at acquisition date of October 22, 2018 | $ | 2,499,954 | $ | 52,276 | ||||
Plan amendment | — | (4,199 | ) | |||||
Service cost | — | 173 | ||||||
Interest cost | 75,706 | 1,447 | ||||||
Actuarial loss (gain) | 249,899 | (9,836 | ) | |||||
Benefits paid | (116,285 | ) | (2,179 | ) | ||||
Benefit obligation at end of year | 2,709,274 | 37,682 | ||||||
Changes in Plan Assets | ||||||||
Fair value of plan assets at acquisition date of October 22, 2018 | 2,305,020 | 11,586 | ||||||
Actual return on plan assets | 303,696 | 260 | ||||||
Employer contributions | 4,116 | 1,636 | ||||||
Benefits paid | (116,285 | ) | (2,239 | ) | ||||
Fair value of plan assets at end of year | 2,496,547 | 11,243 | ||||||
Unfunded status at end of year | $ | (212,727 | ) | $ | (26,439 | ) |
2019 | |||
Benefit obligation assumptions: | |||
Discount rate | 2.99% - 3.49% | ||
Net periodic benefit cost assumptions: | |||
Discount rate | 4.30% - 4.42% | ||
Rate of compensation increase | — | % | |
Expected return on plan assets(1) | 2.25% - 6.50% |
(1) | Expected return on plan assets is estimated by utilizing forward-looking, long-term return, risk and correlation assumptions developed and updated annually by the Company. These assumptions are weighted by the actual or target allocation to each underlying asset class represented in the pension plan asset portfolio. We also assess the expected long-term return on plan assets assumption by comparison to long-term historical performance on an asset class to ensure the assumption is reasonable. Long-term trends are also evaluated relative to market factors such as inflation, interest rates, and fiscal and monetary policies in order to assess the capital market assumptions. |
(in thousands) | 2019 | 2018 | 2017 | ||||||||
Income tax expense | $ | (84,609 | ) | $ | 47,075 | $ | 84,268 | ||||
Stockholders’ equity, difference between compensation expense for tax purposes and amounts recognized for financial statement purposes | — | — | 1,320 | ||||||||
Other comprehensive income | (33,854 | ) | 1,561 | 3,222 | |||||||
Total | $ | (118,463 | ) | $ | 48,636 | $ | 88,810 |
(in thousands) | Current | Deferred | Total | ||||||||
Fiscal 2019 | |||||||||||
U.S. Federal | $ | (7,652 | ) | $ | (59,528 | ) | $ | (67,180 | ) | ||
State and Local | 1,351 | (20,786 | ) | (19,435 | ) | ||||||
Foreign | 1,919 | 87 | 2,006 | ||||||||
$ | (4,382 | ) | $ | (80,227 | ) | $ | (84,609 | ) | |||
Fiscal 2018 | |||||||||||
U.S. Federal | $ | 46,210 | $ | (16,648 | ) | $ | 29,562 | ||||
State and Local | 13,310 | 1,878 | 15,188 | ||||||||
Foreign | 2,374 | (49 | ) | 2,325 | |||||||
$ | 61,894 | $ | (14,819 | ) | $ | 47,075 | |||||
Fiscal 2017 | |||||||||||
U.S. Federal | $ | 70,669 | $ | (1,874 | ) | $ | 68,795 | ||||
State and Local | 14,653 | (82 | ) | 14,571 | |||||||
Foreign | 837 | 65 | 902 | ||||||||
$ | 86,159 | $ | (1,891 | ) | $ | 84,268 |
(in thousands) | 2019 | 2018 | 2017 | ||||||||
Continuing operations | $ | (84,609 | ) | $ | 47,075 | $ | 84,268 | ||||
Discontinued operations | 21,840 | — | — | ||||||||
Total | $ | (62,769 | ) | $ | 47,075 | $ | 84,268 |
(in thousands) | Average Interest Rate at August 3, 2019 | Calendar Maturity Year | August 3, 2019 | July 28, 2018 | |||||||
Term Loan Facility | 6.40% | 2019-2025 | $ | 1,864,900 | $ | — | |||||
ABL Credit Facility | 3.58% | 2023 | 1,080,000 | — | |||||||
Other secured loans | 5.54% | 2023-2024 | 57,649 | — | |||||||
Former ABL Credit Facility | — | 210,000 | |||||||||
Former Term Loan Facility | — | 110,000 | |||||||||
Debt issuance costs, net | (54,891 | ) | (1,164 | ) | |||||||
Original issue discount on debt | (41,175 | ) | — | ||||||||
Long-term debt, including current portion | 2,906,483 | 318,836 | |||||||||
Less: current portion of long-term debt | (87,433 | ) | (10,000 | ) | |||||||
Long-term debt | $ | 2,819,050 | $ | 308,836 |
(in thousands) | August 3, 2019 | July 28, 2018 | |||||
Deferred tax assets: | |||||||
Inventories, principally due to additional costs inventoried for tax purposes | $ | 2 | $ | 7,265 | |||
Compensation and benefits related | 100,942 | 25,740 | |||||
Accounts receivable, principally due to allowances for uncollectible accounts | 3,355 | 4,269 | |||||
Accrued expenses | 12,659 | 119 | |||||
Net operating loss carryforwards | 44,396 | 482 | |||||
Non-loss tax carryforwards | 10,143 | — | |||||
Foreign tax credits | 445 | 445 | |||||
Intangible assets | 5,869 | — | |||||
Interest rate swap agreements | 20,518 | — | |||||
Other deferred tax assets | 2,134 | 117 | |||||
Total gross deferred tax assets | 200,463 | 38,437 | |||||
Less valuation allowance | (445 | ) | (445 | ) | |||
Net deferred tax assets | $ | 200,018 | $ | 37,992 | |||
Deferred tax liabilities: | |||||||
Plant and equipment, principally due to differences in depreciation | $ | 117,195 | $ | 39,978 | |||
Inventories, principally due to additional costs inventoried for tax purposes | 51,392 | — | |||||
Intangible assets | 1,016 | 36,544 | |||||
Interest rate swap agreements | 2,000 | ||||||
Accrued expenses | 3,854 | ||||||
Other | 370 | — | |||||
Total deferred tax liabilities | 169,973 | 82,376 | |||||
Net deferred tax assets (liabilities) | $ | 30,045 | $ | (44,384 | ) |
Swap Maturity | Notional Value (in millions) | Pay Fixed Rate | Receive Floating Rate | Floating Rate Reset Terms | |||||||
April 29, 2021(1) | $ | 25.0 | 1.0650 | % | One-Month LIBOR | Monthly | |||||
April 29, 2021(2) | 25.0 | 0.9260 | % | One-Month LIBOR | Monthly | ||||||
August 15, 2022(3) | 60.0 | 1.7950 | % | One-Month LIBOR | Monthly | ||||||
August 15, 2022(4) | 40.0 | 1.7950 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2020(5) | 100.0 | 2.8240 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2022(5) | 100.0 | 2.8915 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2023(5) | 100.0 | 2.9210 | % | One-Month LIBOR | Monthly | ||||||
October 22, 2025(5) | 50.0 | 2.9550 | % | One-Month LIBOR | Monthly | ||||||
March 31, 2023(6) | 150.0 | 2.8950 | % | One-Month LIBOR | Monthly | ||||||
October 22, 2025(6) | 50.0 | 2.9580 | % | One-Month LIBOR | Monthly | ||||||
October 22, 2025(6) | 50.0 | 2.9590 | % | One-Month LIBOR | Monthly | ||||||
October 29, 2021(7) | 100.0 | 2.8084 | % | One-Month LIBOR | Monthly | ||||||
September 30, 2023(7) | 50.0 | 2.8315 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2024(7) | 100.0 | 2.8480 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2022(8) | 50.0 | 2.4678 | % | One-Month LIBOR | Monthly | ||||||
March 28, 2024(8) | 100.0 | 2.4770 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2024(8) | 100.0 | 2.5010 | % | One-Month LIBOR | Monthly | ||||||
April 29, 2021(9) | 50.0 | 2.5500 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2022(9) | 50.0 | 2.5255 | % | One-Month LIBOR | Monthly | ||||||
March 31, 2023(9) | 50.0 | 2.5292 | % | One-Month LIBOR | Monthly | ||||||
March 28, 2024(9) | 100.0 | 2.5420 | % | One-Month LIBOR | Monthly | ||||||
October 31, 2024(10) | 50.0 | 2.5210 | % | One-Month LIBOR | Monthly | ||||||
October 22, 2025(10) | 50.0 | 2.5558 | % | One-Month LIBOR | Monthly | ||||||
April 15, 2022(11) | 100.0 | 2.3645 | % | One-Month LIBOR | Monthly | ||||||
December 13, 2019(12) | 100.0 | 2.4925 | % | One-Month LIBOR | Monthly | ||||||
May 15, 2020(12) | 100.0 | 2.4490 | % | One-Month LIBOR | Monthly | ||||||
June 30, 2021(13) | 100.0 | 2.2520 | % | One-Month LIBOR | Monthly | ||||||
June 30, 2022(13) | 100.0 | 2.2170 | % | One-Month LIBOR | Monthly | ||||||
June 30, 2021(14) | 50.0 | 2.2290 | % | One-Month LIBOR | Monthly | ||||||
June 30, 2022(14) | 50.0 | 2.1840 | % | One-Month LIBOR | Monthly | ||||||
$ | 2,200.0 |
(1) | On June 7, 2016, the Company entered into a pay fixed and receive floating interest rate swap contract to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreement has an effective date of June 9, 2016 and expires in April 2021. The interest rate swap contract has a notional principal amount of $25 million and requires the Company to pay interest payments during the duration of the contract at a fixed annual rate of 1.0650%, while receiving interest for the same contract period at one-month LIBOR on the same notional principal amount. |
(2) | On June 24, 2016, the Company entered into a pay fixed and receive floating interest rate swap contract to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreement has an effective date of June 24, 2016 and expires in April 2021. The interest rate swap contract has a notional principal amount of $25 million and requires the Company to pay interest payments during the duration of the contract at a fixed annual rate of 0.9260%, while receiving interest for the same contract period at one-month LIBOR on the same notional principal amount. |
(3) | On January 23, 2015, the Company entered into a pay fixed and receive floating interest rate swap contract to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreement has an effective date of August 3, 2015 and expires in August 2022. On March 31, 2015, the Company amended the original contract to reduce the beginning notional principal amount from $140 million to $84 million. The interest rate swap contract has an amortizing notional principal amount which adjusts down on a quarterly basis and requires the Company to pay interest payments during the duration of the contract at a fixed annual rate of 1.7950%, while receiving interest for the same respective contract period at one-month LIBOR on the same notional principal amount. |
(4) | On March 31, 2015, the Company entered into a pay fixed and receive floating interest rate swap contract to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreement has an effective date of August 3, 2015 and expires in August 2022. The interest rate swap contract has an amortizing notional principal amount which adjusts down on a quarterly basis and requires the Company to pay interest payments during the duration of the contract at a fixed annual rate of 1.7950%, while receiving interest for the same respective contract period at one-month LIBOR on the same notional principal amount. |
(5) | On October 26, 2018, the Company entered into four pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of October 26, 2018 and expire at varied dates between October 2020 and October 2025. These interest rate swap contracts have an aggregate notional principal amount of $350 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.8240% and 2.9550%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(6) | On November 16, 2018, the Company entered into three pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of November 16, 2018 and expire at varied dates between March 2023 and October 2025. These interest rate swap contracts have an aggregate notional principal amount of $250 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.8950% and 2.9590%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(7) | On November 30, 2018, the Company entered into three pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of November 30, 2018 and expire at varied dates between October 2021 and October 2024. These interest rate swap contracts have an aggregate notional principal amount of $250 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.8084% and 2.8480%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(8) | On January 11, 2019, the Company entered into three pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of January 11, 2019 and expire at varied dates between October 2022 and October 2024. These interest rate swap contracts have an aggregate notional principal amount of $250 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.4678% and 2.5010%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(9) | On January 23, 2019, the Company entered into four pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of January 23, 2019 and expire at varied dates between April 2021 and March 2024. These interest rate swap contracts have an aggregate notional principal amount of $250 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.5255% and 2.5500%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(10) | On January 24, 2019, the Company entered into two pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of January 24, 2019 and expire at varied dates between October 2024 and October 2025. These interest rate swap contracts have an aggregate notional principal amount of $100 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.5210% and 2.5558%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(11) | On March 18, 2019, the Company entered into a pay fixed and receive floating interest rate swap contract to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreement has an effective date of March 21, 2019 and expires in April 2022. The interest rate swap contract has a notional principal amount of $100.0 million and requires the Company to pay interest payments during the duration of the contract at a fixed annual rate of 2.3645%, while receiving interest for the same contract period at one-month LIBOR on the same notional principal amount. |
(12) | On March 21, 2019, the Company entered into two pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of March 21, 2019 and expire at varied dates between December 2019 and May 2020. These interest rate swap contracts have an aggregate notional principal amount of $200 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.4490% and 2.4925%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(13) | On April 2, 2019, the Company entered into two pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of April 2, 2019 and expire at varied dates between June 2021 and June 2022. These interest rate swap contracts have an aggregate notional principal amount of $200 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.2170% and 2.2520%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(14) | On April 2, 2019, the Company entered into two pay fixed receive floating interest rate swap contracts to effectively fix the underlying variability in expected interest payment cash outflows on its LIBOR based debt. The agreements have an effective date of June 10, 2019 and June 28, 2019 and expire at varied dates between June 2021 and June 2022. These interest rate swap contracts have an aggregate notional principal amount of $100 million and require the Company to pay interest payments during the duration of the respective contracts at fixed annual rates between 2.1840% and 2.2290%, while receiving interest for the same respective contract periods at one-month LIBOR on the same aggregate notional principal amounts. |
(in thousands) | 2019(1) (41 weeks) | |||
Net sales | $ | 2,094,046 | ||
Cost of sales | 1,523,742 | |||
Gross profit | 570,304 | |||
Operating expenses | 463,355 | |||
Restructuring expenses | 16,931 | |||
Operating income | 90,018 | |||
Interest expense | 931 | |||
Net periodic benefit income, excluding service cost | (463 | ) | ||
Equity in earnings of unconsolidated subsidiaries | 1,910 | |||
Income from discontinued operations before income taxes | 87,640 | |||
Income tax provision | 21,840 | |||
Income from discontinued operations, net of tax | $ | 65,800 |
(1) | These results reflect retail operations from the Supervalu acquisition date of October 22, 2018 to August 3, 2019. |
(in thousands) | August 3, 2019 | |||
Current assets | ||||
Cash and cash equivalents | $ | 2,917 | ||
Receivables, net | 1,471 | |||
Inventories | 129,142 | |||
Other current assets | 10,199 | |||
Total current assets of discontinued operations | 143,729 | |||
Long-term assets | ||||
Property and equipment | 301,395 | |||
Intangible assets | 48,788 | |||
Other assets | 1,882 | |||
Total long-term assets of discontinued operations | 352,065 | |||
Total assets of discontinued operations | $ | 495,794 | ||
Current liabilities | ||||
Accounts payable | $ | 61,634 | ||
Accrued compensation and benefits | 45,887 | |||
Other current liabilities | 14,744 | |||
Total current liabilities of discontinued operations | 122,265 | |||
Long-term liabilities | ||||
Other long-term liabilities | 1,923 | |||
Total liabilities of discontinued operations | 124,188 | |||
Net assets of discontinued operations | $ | 371,606 |
(in thousands, except per share data) | 2019 | 2018 | 2017 | |||||||||
Basic weighted average shares outstanding | 51,245 | 50,530 | 50,570 | |||||||||
Net effect of dilutive stock awards based upon the treasury stock method | — | 307 | 205 | |||||||||
Diluted weighted average shares outstanding | 51,537 | 50,837 | 50,775 | |||||||||
Basic per share data: | ||||||||||||
Continuing operations | $ | (6.84 | ) | $ | 3.28 | $ | 2.57 | |||||
Discontinued operations | $ | 1.28 | $ | — | $ | — | ||||||
Basic (loss) income per share | $ | (5.56 | ) | $ | 3.28 | $ | 2.57 | |||||
Diluted per share data: | ||||||||||||
Continuing operations | $ | (6.84 | ) | $ | 3.26 | $ | 2.56 | |||||
Discontinued operations(1) | $ | 1.27 | $ | — | $ | — | ||||||
Diluted (loss) income per share | $ | (5.56 | ) | $ | 3.26 | $ | 2.56 | |||||
Anti-dilutive stock-based awards excluded from the calculation of diluted earnings per share | 3,434 | 93 | 44 |
(1) | The computation of diluted earnings per share from discontinued operations is calculated using diluted weighted average shares outstanding, which includes the net effect of dilutive stock awards, of approximately 292 thousand shares for fiscal 2019. |
(in thousands) | 2019 | 2018 | 2017 | ||||||||
Computed “expected” tax expense | $ | (91,411 | ) | $ | 57,359 | $ | 75,048 | ||||
State and local income tax, net of Federal income tax benefit | (24,124 | ) | 10,501 | 9,694 | |||||||
Non-deductible expenses | 5,433 | 955 | 1,951 | ||||||||
Tax effect of share-based compensation | 125 | 149 | 29 | ||||||||
General business credits | (629 | ) | (552 | ) | (915 | ) | |||||
Unrecognized tax benefits | (8,146 | ) | 618 | 118 | |||||||
Nondeductible goodwill impairment | 32,619 | — | — | ||||||||
Impacts related to the TCJA | — | (21,719 | ) | — | |||||||
Other, net | 1,524 | (236 | ) | (1,657 | ) | ||||||
Total income tax expense | $ | (84,609 | ) | $ | 47,075 | $ | 84,268 |
Fiscal Year | Pension Benefits | Other Postretirement Benefits | ||||||
2020 | $ | 608,400 | $ | 4,000 | ||||
2021 | 119,700 | 3,800 | ||||||
2022 | 125,200 | 3,600 | ||||||
2023 | 127,800 | 3,500 | ||||||
2024 | 131,300 | 3,300 | ||||||
Years 2025-2029 | 671,200 | 13,400 |
Fair Value at August 3, 2019 | ||||||||||||||
(In thousands) | Consolidated Balance Sheets Location | Level 1 | Level 2 | Level 3 | ||||||||||
Assets: | ||||||||||||||
Interest rate swaps designated as hedging instruments | Prepaid expenses and other current assets | $ | — | $ | 389 | $ | — | |||||||
Mutual funds | Prepaid expenses and other current assets | $ | 7 | $ | — | $ | — | |||||||
Interest rate swaps designated as hedging instruments | Other assets | $ | — | $ | 145 | $ | — | |||||||
Mutual funds | Other assets | $ | 1,799 | $ | — | $ | — | |||||||
Liabilities: | ||||||||||||||
Interest rate swaps designated as hedging instruments | Accrued expenses and other current liabilities | $ | — | $ | 16,360 | $ | — | |||||||
Interest rate swaps designated as hedging instruments | Other long-term liabilities | $ | — | $ | 60,737 | $ | — |
Fair Value at July 28, 2018 | ||||||||||||||
(In thousands) | Consolidated Balance Sheets Location | Level 1 | Level 2 | Level 3 | ||||||||||
Assets: | ||||||||||||||
Interest rate swaps designated as hedging instruments | Prepaid expenses and other current assets | $ | — | $ | 1,459 | $ | — | |||||||
Interest rate swaps designated as hedging instruments | Other assets | $ | — | $ | 5,860 | $ | — |
Customer relationships | 7-20 years |
Non-competition agreements | 1-10 years |
Trademarks and tradenames | 2-10 years |
Leases in place | 1-9 years |
Favorable operating leases | 2-25 years |
Unfavorable operating leases | 2-25 years |
Pharmacy prescription files | 5-7 years |
Lease Obligations | Lease Receipts | Net Lease Obligations | ||||||||||||||||||||||
Fiscal Year | Operating Leases | Capital Leases | Operating Leases | Capital Leases | Operating Leases | Capital Leases | ||||||||||||||||||
2020 | $ | 223,612 | $ | 41,550 | $ | (55,922 | ) | $ | (319 | ) | $ | 167,690 | $ | 41,231 | ||||||||||
2021 | 190,845 | 32,804 | (41,425 | ) | — | 149,420 | 32,804 | |||||||||||||||||
2022 | 179,326 | 29,869 | (35,998 | ) | — | 143,328 | 29,869 | |||||||||||||||||
2023 | 154,812 | 26,699 | (25,591 | ) | — | 129,221 | 26,699 | |||||||||||||||||
2024 | 135,795 | 23,095 | (18,183 | ) | — | 117,612 | 23,095 | |||||||||||||||||
Thereafter | 1,063,674 | 46,999 | (59,186 | ) | — | 1,004,488 | 46,999 | |||||||||||||||||
Total future minimum obligations (receipts) | $ | 1,948,064 | $ | 201,016 | $ | (236,305 | ) | $ | (319 | ) | $ | 1,711,759 | $ | 200,697 | ||||||||||
Less interest | (68,138 | ) | ||||||||||||||||||||||
Present value of capital lease obligations | 132,878 | |||||||||||||||||||||||
Less current capital lease obligations | (24,670 | ) | ||||||||||||||||||||||
Long-term capital lease obligations | $ | 108,208 |
(in thousands) | Wholesale | Other | Total | |||||||||
Goodwill as of July 29, 2017(1)(2) | $ | 353,234 | $ | 18,025 | $ | 371,259 | ||||||
Impairment charge | — | (7,872 | ) | (7,872 | ) | |||||||
Goodwill adjustment for prior fiscal year business combinations | 220 | — | 220 | |||||||||
Change in foreign exchange rates | (1,112 | ) | — | (1,112 | ) | |||||||
Goodwill as of July 28, 2018(1)(2) | 352,342 | 10,153 | 362,495 | |||||||||
Goodwill from current fiscal year business combinations | 374,757 | — | 374,757 | |||||||||
Impairment charge | (292,757 | ) | — | (292,757 | ) | |||||||
Other adjustments | (1,951 | ) | — | (1,951 | ) | |||||||
Change in foreign exchange rates | (288 | ) | — | (288 | ) | |||||||
Goodwill as of August 3, 2019(1)(2) | $ | 432,103 | $ | 10,153 | $ | 442,256 |
(1) | Wholesale amounts are net of accumulated goodwill impairment charges of $0.0 million, $0.0 million and $292.8 million for fiscal 2017, 2018 and 2019, respectively. |
(2) | Other amounts are net of accumulated goodwill impairment charges of $1.4 million, $9.3 million and $9.3 million for fiscal 2017, 2018 and 2019, respectively. |
2019 | 2018 | ||||||||||||||||||||||
(in thousands) | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||
Amortizing intangible assets: | |||||||||||||||||||||||
Customer relationships | $ | 1,007,089 | $ | 111,940 | $ | 895,149 | $ | 197,246 | $ | 61,543 | $ | 135,703 | |||||||||||
Non-compete agreements | 12,900 | 6,237 | 6,663 | 2,900 | 1,914 | 986 | |||||||||||||||||
Operating lease intangibles | 32,103 | 2,209 | 29,894 | — | — | — | |||||||||||||||||
Trademarks and tradenames | 67,700 | 14,161 | 53,539 | 1,700 | 981 | 719 | |||||||||||||||||
Total amortizing intangible assets | 1,119,792 | 134,547 | 985,245 | 201,846 | 64,438 | 137,408 | |||||||||||||||||
Indefinite lived intangible assets: | |||||||||||||||||||||||
Trademarks and tradenames | 55,813 | — | 55,813 | 55,801 | — | 55,801 | |||||||||||||||||
Intangibles assets, net | $ | 1,175,605 | $ | 134,547 | $ | 1,041,058 | $ | 257,647 | $ | 64,438 | $ | 193,209 |
Interest Expense, net | ||||||||||||
(In thousands) | 2019 | 2018 | 2017 | |||||||||
Total amounts of expense line items presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded | $ | 179,963 | $ | 16,025 | $ | 16,754 | ||||||
Gain or (loss) on cash flow hedging relationships: | ||||||||||||
Gain or (loss) reclassified from comprehensive income into income | $ | 13 | $ | 827 | $ | (1,462 | ) | |||||
Gain or (loss) on interest rate swap contracts not designated as hedging instruments: | ||||||||||||
Gain or (loss) recognized as interest expense | $ | 51 | $ | — | $ | — |
Assets securing the ABL Credit Facility (in thousands)(1): | August 3, 2019 | ||
Certain inventory assets included in Inventories and Current assets of discontinued operations | $ | 2,172,662 | |
Certain receivables included in Accounts receivable, net and Current assets of discontinued operations | $ | 916,543 |
(1) | The ABL Credit Facility is also secured by all of the Company’s pharmacy scripts, which are included in Long-term assets of discontinued operations in the Consolidated Balance Sheets as of August 3, 2019. |
Unused available credit and fees under the ABL Credit Facility (in thousands, except percentages): | August 3, 2019 | ||
Outstanding letters of credit | $ | 76,199 | |
Letter of credit fees | 1.375 | % | |
Unused available credit | $ | 919,154 | |
Unused facility fees | 0.25 | % |
Fiscal Year | (In thousands) | |||
2020 | $ | 102,713 | ||
2021 | 30,413 | |||
2022 | 31,091 | |||
2023 | 31,806 | |||
2024 | 1,105,526 | |||
2025 and thereafter | 1,701,000 | |||
$ | 3,002,549 |
Pension Protection Act Zone Status | Contributions | ||||||||||||||
Pension Fund | EIN-Pension Plan Number | Plan Month/Day End Date | 2018 | FIP/RP Status Pending/Implemented | 2019 | Surcharges Imposed(1) | Amortization Provisions | ||||||||
Minneapolis Food Distributing Industry Pension Plan(2) | 416047047-001 | 12/31 | Green | No | $ | 8 | No | No | |||||||
Minneapolis Retail Meat Cutters and Food Handlers Pension Fund(3) | 410905139-001 | 2/28 | Red | Implemented | 7 | No | No | ||||||||
Minneapolis Retail Meat Cutters and Food Handlers Variable Annuity Pension Fund(3) | 83-2598425 | 12/31 | N/A | N/A | 1 | N/A | N/A | ||||||||
Central States, Southeast and Southwest Areas Pension Fund(2) | 366044243-001 | 12/31 | Deep Red | Implemented | 5 | No | Yes | ||||||||
UFCW Unions and Participating Employer Pension Fund(3) | 526117495-001 | 12/31 | Red | Implemented | 4 | No | No | ||||||||
Western Conference of Teamsters Pension Plan Trust(2) | 916145047-001 | 12/31 | Green | No | 12 | No | No | ||||||||
UFCW Unions and Employers Pension Plan(3) | 396069053-001 | 10/31 | Deep Red | Implemented | 1 | Yes | Yes | ||||||||
All Other Multiemployer Pension Plans(4) | 3 | ||||||||||||||
Total | $ | 41 |
(1) | PPA surcharges are 5 percent or 10 percent of eligible contributions and may not apply to all collective bargaining agreements or total contributions to each plan. |
(2) | These multiemployer pension plans are associated with continuing operations. |
(3) | These multiemployer pension plans are associated with discontinued operations. |
(4) | All Other Multiemployer Pension Plans include 6 plans, none of which is individually significant when considering contributions to the plan, severity of the underfunded status or other factors. |
2019 | |||||||||||||||||||
(In thousands except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter(1) | Full Year(1) | ||||||||||||||
Net sales | $ | 2,868,156 | $ | 6,149,206 | $ | 5,962,620 | $ | 6,407,086 | $ | 21,387,068 | |||||||||
Gross profit | 412,331 | 761,783 | 788,550 | 822,346 | 2,785,010 | ||||||||||||||
Net (loss) income from continuing operations | (21,361 | ) | (363,303 | ) | 32,774 | 1,207 | (350,683 | ) | |||||||||||
Income from discontinued operations, net of tax | 2,070 | 21,407 | 24,370 | 17,953 | 65,800 | ||||||||||||||
Net (loss) income including noncontrolling interests | (19,291 | ) | (341,896 | ) | 57,144 | 19,160 | (284,883 | ) | |||||||||||
Net (loss) income attributable to United Natural Foods, Inc. | (19,294 | ) | (341,725 | ) | 57,092 | 18,937 | (284,990 | ) | |||||||||||
Basic (loss) earnings per share: | |||||||||||||||||||
Continuing operations | $ | (0.42 | ) | $ | (7.15 | ) | $ | 0.64 | $ | 0.02 | $ | (6.84 | ) | ||||||
Basic (loss) income per share | $ | (0.38 | ) | $ | (6.72 | ) | $ | 1.12 | $ | 0.36 | $ | (5.56 | ) | ||||||
Diluted (loss) earnings per share: | |||||||||||||||||||
Continuing operations | $ | (0.42 | ) | $ | (7.15 | ) | $ | 0.64 | $ | 0.02 | $ | (6.84 | ) | ||||||
Diluted (loss) income per share | $ | (0.38 | ) | $ | (6.72 | ) | $ | 1.12 | $ | 0.36 | $ | (5.56 | ) |
(1) | Fiscal 2019 results reflect 53 weeks of operating results, as compared to fiscal 2018 52 weeks. The fourth quarter of fiscal 2019 includes 14 weeks and the fourth quarter of fiscal 2018 contains 13 weeks. |
2018 | |||||||||||||||||||
(In thousands except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||
Net sales | $ | 2,457,545 | $ | 2,528,011 | $ | 2,648,879 | $ | 2,592,248 | $ | 10,226,683 | |||||||||
Gross profit | 367,216 | 371,522 | 408,087 | 375,942 | 1,522,767 | ||||||||||||||
Net income from continuing operations | 30,505 | 50,486 | 51,891 | 32,788 | 165,670 | ||||||||||||||
Income from discontinued operations, net of tax | — | — | — | — | — | ||||||||||||||
Net income including noncontrolling interests | 30,505 | 50,486 | 51,891 | 32,788 | 165,670 | ||||||||||||||
Net income attributable to United Natural Foods, Inc. | 30,505 | 50,486 | 51,891 | 32,788 | 165,670 | ||||||||||||||
Basic earnings per share: | |||||||||||||||||||
Continuing operations | $ | 0.60 | $ | 1.00 | $ | 1.03 | $ | 0.65 | $ | 3.28 | |||||||||
Basic income per share | $ | 0.60 | $ | 1.00 | $ | 1.03 | $ | 0.65 | $ | 3.28 | |||||||||
Diluted earnings per share: | |||||||||||||||||||
Continuing operations | $ | 0.60 | $ | 0.99 | $ | 1.02 | $ | 0.64 | $ | 3.26 | |||||||||
Diluted income per share | $ | 0.60 | $ | 0.99 | $ | 1.02 | $ | 0.64 | $ | 3.26 |
(in thousands) | Preliminary Acquisition Date Fair Values as of August 3, 2019 | |||
Consideration: | ||||
Outstanding shares | $ | 1,258,450 | ||
Outstanding debt, excluding acquired senior notes | 1,046,170 | |||
Equity-based awards | 18,411 | |||
Total consideration | $ | 2,323,031 | ||
Preliminary fair value of assets acquired and liabilities assumed: | ||||
Cash and cash equivalents | $ | 25,102 | ||
Accounts receivable | 552,381 | |||
Inventories | 1,159,642 | |||
Prepaid expenses and other current assets | 108,830 | |||
Current assets of discontinued operations | 196,848 | |||
Property, plant and equipment | 1,210,416 | |||
Goodwill | 374,757 | |||
Intangible assets | 918,103 | |||
Other assets | 75,965 | |||
Long-term assets of discontinued operations | 429,304 | |||
Accounts payable | (972,888 | ) | ||
Current portion of long-term debt and capital lease obligations | (579,565 | ) | ||
Other current liabilities | (331,693 | ) | ||
Current liabilities of discontinued operations | (148,763 | ) | ||
Long-term debt | (34,355 | ) | ||
Long-term capital lease obligations | (103,289 | ) | ||
Pension and other postretirement benefit obligations | (234,324 | ) | ||
Deferred income taxes | (20,131 | ) | ||
Other long-term liabilities | (303,544 | ) | ||
Long-term liabilities of discontinued operations | (1,398 | ) | ||
Noncontrolling interests | 1,633 | |||
Total consideration | 2,323,031 | |||
Less: Cash and cash equivalents(1) | (30,596 | ) | ||
Total consideration, net of cash and cash equivalents acquired | $ | 2,292,435 |
(1) | Includes cash and cash equivalents acquired attributable to continuing operations and discontinued operations. |
(in thousands) | 2019 | 2018 | 2017 | ||||||||
Rent expense(1) | 211,807 | 88,697 | 81,156 | ||||||||
Less subtenant rentals recorded in Net sales | (17,475 | ) | — | — | |||||||
Less subtenant rentals recorded in Operating expenses | (13,683 | ) | (1,649 | ) | (1,670 | ) | |||||
Total net rent expense | $ | 180,649 | $ | 87,048 | $ | 79,486 |
(1) | Rent expense as presented here includes $32.2 million, $0.0 million, and $0.0 million in fiscal 2019, 2018 and 2017, respectively, of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as we expect to remain primarily obligated under these leases. |
(in thousands) | 2019 | 2018 | 2017 | |||||||||
2019 SUPERVALU INC. restructuring expenses | $ | 74,414 | $ | — | $ | — | ||||||
Acquisition and integration costs | 56,589 | 4,967 | — | |||||||||
Closed property charges | 22,536 | — | — | |||||||||
2018 Earth Origins Market restructuring expenses and loss on sale | — | 4,771 | — | |||||||||
2017 Cost Saving and Efficiency Initiatives | — | — | 6,864 | |||||||||
Total | $ | 153,539 | $ | 9,738 | $ | 6,864 |
(in thousands) | 2019 SUPERVALU INC. | 2018 Earth Origins Market | 2017 Cost Saving and Efficiency Initiatives | Total | ||||||||||||
Balances at July 29, 2017 | $ | — | $ | — | $ | 4,298 | $ | 4,298 | ||||||||
Restructuring program charge | — | 2,219 | — | 2,219 | ||||||||||||
Cash payments | — | (1,836 | ) | (3,597 | ) | (5,433 | ) | |||||||||
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 | ||||||||
Cumulative program charges incurred from inception to date | $ | 74,414 | $ | 2,219 | $ | 6,864 | $ | 83,497 |
(1) | Includes $43.0 million of charges related to change-in-control expense to satisfy outstanding equity awards and severance related costs. |
(in thousands) | Wholesale | Other | Eliminations | Unallocated (Income)/ Expenses | Consolidated | ||||||||||||||
Fiscal year ended August 3, 2019 | |||||||||||||||||||
Net sales(1) | $ | 21,324,693 | $ | 228,518 | $ | (166,143 | ) | $ | — | $ | 21,387,068 | ||||||||
Goodwill and asset impairment charges | 292,770 | — | — | — | 292,770 | ||||||||||||||
Restructuring, acquisition and integration related expenses | 1,226 | 152,313 | — | — | 153,539 | ||||||||||||||
Operating loss | (9,341 | ) | (277,770 | ) | (3,901 | ) | — | (291,012 | ) | ||||||||||
Total other expense, net | — | — | — | 144,280 | 144,280 | ||||||||||||||
Loss from continuing operations before income taxes | (435,292 | ) | |||||||||||||||||
Depreciation and amortization | 217,954 | 28,871 | — | — | 246,825 | ||||||||||||||
Capital expenditures | 206,812 | 1,005 | — | — | 207,817 | ||||||||||||||
Total assets of continuing operations | 6,301,015 | 426,637 | (42,481 | ) | — | 6,685,171 | |||||||||||||
Fiscal year ended July 28, 2018 | |||||||||||||||||||
Net sales | 10,169,840 | 228,465 | (171,622 | ) | — | 10,226,683 | |||||||||||||
Goodwill and asset impairment charges | 67 | 11,175 | — | — | 11,242 | ||||||||||||||
Restructuring, acquisition and integration related expenses | — | 9,738 | — | — | 9,738 | ||||||||||||||
Operating income (loss) | 260,363 | (36,563 | ) | 3,425 | — | 227,225 | |||||||||||||
Total other expense, net | — | — | — | 14,480 | 14,480 | ||||||||||||||
Income from continuing operations before income taxes | 212,745 | ||||||||||||||||||
Depreciation and amortization | 85,388 | 2,243 | — | — | 87,631 | ||||||||||||||
Capital expenditures | 43,402 | 1,206 | — | — | 44,608 | ||||||||||||||
Total assets of continuing operations | 2,811,948 | 189,312 | (36,788 | ) | — | 2,964,472 | |||||||||||||
Fiscal year ended July 29, 2017 | |||||||||||||||||||
Net sales | 9,210,815 | 232,192 | (168,536 | ) | — | 9,274,471 | |||||||||||||
Restructuring, acquisition and integration related expenses | 2,922 | 3,942 | — | — | 6,864 | ||||||||||||||
Operating income (loss) | 247,419 | (21,857 | ) | 463 | — | 226,025 | |||||||||||||
Total other expense, net | — | — | — | 11,602 | 11,602 | ||||||||||||||
Income from continuing operations before income taxes | 214,423 | ||||||||||||||||||
Depreciation and amortization | 83,063 | 2,988 | — | — | 86,051 | ||||||||||||||
Capital expenditures | 53,328 | 2,784 | — | — | 56,112 | ||||||||||||||
Total assets of continuing operations | 2,724,069 | 203,154 | (40,660 | ) | — | 2,886,563 |
(1) | For the fiscal year ended August 3, 2019, the Company recorded $769.8 million within Net sales in its Wholesale reportable segment attributable to discontinued operations inter-company product purchases from its Retail operating segment, which it expects will continue subsequent to the sale of certain retail banners. |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||
Outstanding at beginning of year | 291,677 | $ | 52.46 | |||||||||
Supervalu replacement options | 1,625,070 | 41.91 | ||||||||||
Exercised | (6,979 | ) | 16.97 | |||||||||
Forfeited | (1,420 | ) | 13.13 | |||||||||
Canceled | (139,111 | ) | 50.50 | |||||||||
Outstanding at end of year | 1,769,237 | 43.06 | 5.8 years | $ | — | |||||||
Exercisable at end of year | 1,760,980 | $ | 43.02 | 5.8 years | $ | — |
Number of Shares | Weighted Average Grant-Date Fair Value | ||||||
Outstanding at July 30, 2016 | 733,797 | $ | 55.55 | ||||
Granted | 1,107,526 | 40.16 | |||||
Vested | (420,098 | ) | 50.14 | ||||
Forfeited | (151,114 | ) | 50.16 | ||||
Outstanding at July 29, 2017 | 1,270,111 | 44.56 | |||||
Granted | 716,952 | 40.06 | |||||
Vested | (434,730 | ) | 47.24 | ||||
Forfeited | (207,731 | ) | 41.38 | ||||
Outstanding at July 28, 2018 | 1,344,602 | 41.78 | |||||
Supervalu replacement awards | 4,301,233 | 32.50 | |||||
Granted | 1,665,233 | 23.30 | |||||
Vested | (2,038,290 | ) | 34.81 | ||||
Forfeited | (852,045 | ) | 30.83 | ||||
Outstanding at August 3, 2019 | 4,420,733 | $ | 31.11 |
(in thousands) | 2019 | 2018 | 2017 | |||||||||
Intrinsic value of restricted stock units vested | $ | 36,071 | $ | 12,420 | $ | 10,465 |
(in thousands) | 2019 | 2018 | 2017 | ||||||||
Unrecognized tax benefits at beginning of period | $ | 1,104 | $ | 478 | $ | 360 | |||||
Unrecognized tax benefits added during the period | — | 626 | 583 | ||||||||
Unrecognized tax benefits assumed in a business combination | 49,566 | — | — | ||||||||
Decreases in unrecognized tax benefits due to statute expiration and payments | (10,528 | ) | — | (465 | ) | ||||||
Unrecognized tax benefits at end of period | $ | 40,141 | $ | 1,104 | $ | 478 |
Fiscal Year: | (In thousands) | ||
2020 | $ | 87,304 | |
2021 | 73,192 | ||
2022 | 67,544 | ||
2023 | 67,232 | ||
2024 | 67,453 | ||
Thereafter | 622,520 | ||
$ | 985,245 |
(in thousands) | Wholesale | Other | Eliminations | Unallocated (Income)/ Expenses | Consolidated | ||||||||||||||
Fiscal year ended August 3, 2019 | |||||||||||||||||||
Net sales(1) | $ | 21,324,693 | $ | 228,518 | $ | (166,143 | ) | $ | — | $ | 21,387,068 | ||||||||
Goodwill and asset impairment charges | 292,770 | — | — | — | 292,770 | ||||||||||||||
Restructuring, acquisition and integration related expenses | 1,226 | 152,313 | — | — | 153,539 | ||||||||||||||
Operating loss | (9,341 | ) | (277,770 | ) | (3,901 | ) | — | (291,012 | ) | ||||||||||
Total other expense, net | — | — | — | 144,280 | 144,280 | ||||||||||||||
Loss from continuing operations before income taxes | (435,292 | ) | |||||||||||||||||
Depreciation and amortization | 217,954 | 28,871 | — | — | 246,825 | ||||||||||||||
Capital expenditures | 206,812 | 1,005 | — | — | 207,817 | ||||||||||||||
Total assets of continuing operations | 6,301,015 | 426,637 | (42,481 | ) | — | 6,685,171 | |||||||||||||
Fiscal year ended July 28, 2018 | |||||||||||||||||||
Net sales | 10,169,840 | 228,465 | (171,622 | ) | — | 10,226,683 | |||||||||||||
Goodwill and asset impairment charges | 67 | 11,175 | — | — | 11,242 | ||||||||||||||
Restructuring, acquisition and integration related expenses | — | 9,738 | — | — | 9,738 | ||||||||||||||
Operating income (loss) | 260,363 | (36,563 | ) | 3,425 | — | 227,225 | |||||||||||||
Total other expense, net | — | — | — | 14,480 | 14,480 | ||||||||||||||
Income from continuing operations before income taxes | 212,745 | ||||||||||||||||||
Depreciation and amortization | 85,388 | 2,243 | — | — | 87,631 | ||||||||||||||
Capital expenditures | 43,402 | 1,206 | — | — | 44,608 | ||||||||||||||
Total assets of continuing operations | 2,811,948 | 189,312 | (36,788 | ) | — | 2,964,472 | |||||||||||||
Fiscal year ended July 29, 2017 | |||||||||||||||||||
Net sales | 9,210,815 | 232,192 | (168,536 | ) | — | 9,274,471 | |||||||||||||
Restructuring, acquisition and integration related expenses | 2,922 | 3,942 | — | — | 6,864 | ||||||||||||||
Operating income (loss) | 247,419 | (21,857 | ) | 463 | — | 226,025 | |||||||||||||
Total other expense, net | — | — | — | 11,602 | 11,602 | ||||||||||||||
Income from continuing operations before income taxes | 214,423 | ||||||||||||||||||
Depreciation and amortization | 83,063 | 2,988 | — | — | 86,051 | ||||||||||||||
Capital expenditures | 53,328 | 2,784 | — | — | 56,112 | ||||||||||||||
Total assets of continuing operations | 2,724,069 | 203,154 | (40,660 | ) | — | 2,886,563 |
(1) | For the fiscal year ended August 3, 2019, the Company recorded $769.8 million within Net sales in its Wholesale reportable segment attributable to discontinued operations inter-company product purchases from its Retail operating segment, which it expects will continue subsequent to the sale of certain retail banners. |
(in thousands) | Benefit Plans | Foreign Currency | Swap Agreements | Total | ||||||||||||
Accumulated other comprehensive loss at July 30, 2016, net of tax | $ | — | $ | (18,799 | ) | $ | (3,580 | ) | $ | (22,379 | ) | |||||
Other comprehensive income before reclassifications | — | 3,537 | 3,992 | 7,529 | ||||||||||||
Amortization of cash flow hedge | — | — | 887 | 887 | ||||||||||||
Net current period Other comprehensive loss | — | 3,537 | 4,879 | 8,416 | ||||||||||||
Accumulated other comprehensive (loss) income at July 29, 2017, net of tax | $ | — | $ | (15,262 | ) | $ | 1,299 | $ | (13,963 | ) | ||||||
Other comprehensive (loss) income before reclassifications | — | (3,791 | ) | 4,219 | 428 | |||||||||||
Amortization of cash flow hedge | — | — | (644 | ) | (644 | ) | ||||||||||
Net current period Other comprehensive (loss) income | — | (3,791 | ) | 3,575 | (216 | ) | ||||||||||
Accumulated other comprehensive (loss) income at July 28, 2018, net of tax | $ | — | $ | (19,053 | ) | $ | 4,874 | $ | (14,179 | ) | ||||||
Other comprehensive loss before reclassifications | (32,458 | ) | (1,029 | ) | (61,277 | ) | (94,764 | ) | ||||||||
Amortization of cash flow hedge | — | — | (10 | ) | (10 | ) | ||||||||||
Net current period Other comprehensive loss | (32,458 | ) | (1,029 | ) | (61,287 | ) | (94,774 | ) | ||||||||
Accumulated other comprehensive loss at August 3, 2019, net of tax | $ | (32,458 | ) | $ | (20,082 | ) | $ | (56,413 | ) | $ | (108,953 | ) |
(1) | Amortization of amounts included in net periodic benefit (income) cost includes amortization of prior service benefit and amortization of net actuarial loss as reflected in Note 14—Benefit Plans. |
(in thousands) | 2019 | 2018 | 2017 | Affected Line Item on the Consolidated Statements of Operations | ||||||||||
Swap agreements: | ||||||||||||||
Reclassification of cash flow hedge | $ | 13 | $ | 827 | $ | (1,462 | ) | Interest expense, net | ||||||
Income tax (benefit) expense | 3 | 183 | (575 | ) | (Benefit) provision for income taxes | |||||||||
Total reclassifications, net of tax | $ | 10 | $ | 644 | $ | (887 | ) |