Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Nov. 02, 2019 | Dec. 06, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Nov. 2, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-15723 | |
Entity Registrant Name | UNITED NATURAL FOODS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 05-0376157 | |
Entity Address, Address Line One | 313 Iron Horse Way, | |
Entity Address, City or Town | Providence, | |
Entity Address, State or Province | RI | |
Entity Address, Postal Zip Code | 02908 | |
City Area Code | 401 | |
Local Phone Number | 528-8634 | |
Title of 12(b) Security | Common stock, par value $0.01 | |
Trading Symbol | UNFI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 53,508,147 | |
Entity Central Index Key | 0001020859 | |
Current Fiscal Year End Date | --08-01 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Nov. 02, 2019 | Aug. 03, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 39,758 | $ 42,350 |
Accounts receivable, net | 1,136,924 | 1,065,699 |
Inventories | 2,324,979 | 2,089,416 |
Prepaid expenses and other current assets | 192,463 | 226,727 |
Current assets of discontinued operations | 155,883 | 143,729 |
Total current assets | 3,850,007 | 3,567,921 |
Property and equipment, net | 1,494,309 | 1,639,259 |
Operating lease assets | 1,051,128 | 0 |
Goodwill | 19,791 | 442,256 |
Intangible assets, net | 999,586 | 1,041,058 |
Deferred income taxes | 98,768 | 31,087 |
Other assets | 106,038 | 107,319 |
Long-term assets of discontinued operations | 343,892 | 352,065 |
Total assets | 7,963,519 | 7,180,965 |
Current liabilities: | ||
Accounts payable | 1,606,470 | 1,476,857 |
Accrued expenses and other current liabilities | 246,563 | 249,426 |
Accrued compensation and benefits | 164,605 | 148,296 |
Current portion of operating lease liabilities | 127,327 | 0 |
Current portion of long-term debt and finance lease liabilities | 34,458 | 112,103 |
Current liabilities of discontinued operations | 100,878 | 122,265 |
Total current liabilities | 2,280,301 | 2,108,947 |
Long-term debt | 3,051,238 | 2,819,050 |
Long-term operating lease liabilities | 949,978 | 0 |
Long-term finance lease liabilities | 68,682 | 108,208 |
Pension and other postretirement benefit obligations | 220,550 | 237,266 |
Deferred income taxes | 1,047 | 1,042 |
Other long-term liabilities | 267,080 | 393,595 |
Long-term liabilities of discontinued operations | 1,403 | 1,923 |
Total liabilities | 6,840,279 | 5,670,031 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, authorized 5,000 shares; none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value, authorized 100,000 shares; 54,121 shares issued and 53,506 shares outstanding at November 2, 2019; 53,501 shares issued and 52,886 shares outstanding at August 3, 2019 | 541 | 535 |
Additional paid-in capital | 532,958 | 530,801 |
Treasury stock at cost | (24,231) | (24,231) |
Accumulated other comprehensive loss | (111,691) | (108,953) |
Retained earnings | 728,979 | 1,115,519 |
Total United Natural Foods, Inc. stockholders' equity | 1,126,556 | 1,513,671 |
Noncontrolling interests | (3,316) | (2,737) |
Total stockholders' equity | 1,123,240 | 1,510,934 |
Total liabilities and stockholders’ equity | $ 7,963,519 | $ 7,180,965 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Nov. 02, 2019 | Aug. 03, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 5,000,000 | 5,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, issued shares | 54,121,000 | 53,501,000 |
Common stock, outstanding shares | 53,506,000 | 50,411,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |||
Nov. 02, 2019 | Oct. 27, 2018 | |||
Income Statement [Abstract] | ||||
Net sales | $ 6,019,585 | $ 2,868,156 | ||
Cost of sales | 5,248,543 | 2,455,825 | ||
Gross profit | 771,042 | 412,331 | ||
Operating expenses | 775,414 | 363,165 | ||
Goodwill and asset impairment charges | 425,405 | 0 | ||
Restructuring, acquisition and integration related expenses | 14,250 | 68,004 | ||
Operating loss | (444,027) | (18,838) | ||
Other expense (income): | ||||
Net periodic benefit income, excluding service cost | (11,384) | (844) | ||
Interest expense, net | 49,518 | 7,525 | ||
Other, net | (46) | 97 | ||
Total other expense, net | 38,088 | 6,778 | ||
Loss from continuing operations before income taxes | (482,115) | (25,616) | ||
Benefit for income taxes | (73,753) | (4,255) | ||
Net loss from continuing operations | 408,362 | 21,361 | ||
Income from discontinued operations, net of tax | 24,954 | 2,070 | [1] | |
Net loss including noncontrolling interests | 383,408 | 19,291 | ||
Less income attributable to noncontrolling interests | 519 | 3 | ||
Net loss attributable to United Natural Foods, Inc. | $ 383,927 | $ 19,294 | ||
Basic per share data: | ||||
Continuing operations | $ (7.67) | $ (0.42) | ||
Discontinued operations | 0.46 | 0.04 | ||
Basic loss per share | (7.21) | (0.38) | ||
Diluted (loss) earnings per share: | ||||
Continuing operations | (7.67) | (0.42) | ||
Discontinued operations | [2] | 0.46 | 0.04 | |
Diluted loss per share | $ (7.21) | $ (0.38) | ||
Weighted average shares outstanding: | ||||
Basic (shares) | 53,213 | 50,583 | ||
Diluted (shares) | 53,213 | 50,583 | ||
[1] | These results reflect retail operations from the Supervalu acquisition date of October 22, 2018 to October 27, 2018 . | |||
[2] | 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 63 thousand shares and 598 thousand for the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 02, 2019 | Oct. 27, 2018 | ||
Statement of Comprehensive Income [Abstract] | |||
Net loss including noncontrolling interests | $ (383,408) | $ (19,291) | |
Other comprehensive (loss) income: | |||
Recognition of pension and other postretirement benefit obligations, net of tax | [1] | 572 | 0 |
Recognition of interest rate swap cash flow hedges, net of tax | [2] | (3,681) | 196 |
Foreign currency translation adjustments | 371 | (672) | |
Total other comprehensive loss | (2,738) | (476) | |
Less comprehensive income attributable to noncontrolling interests | 519 | 3 | |
Total comprehensive loss attributable to United Natural Foods, Inc. | (386,665) | (19,770) | |
Other Comprehensive Income (Loss), Pension Benefit Obligations, Tax | 200 | 0 | |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax | $ (1,300) | $ 300 | |
[1] | Amounts are net of tax (benefit) expense of $0.2 million and $0.0 million for the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively. | ||
[2] | Amounts are net of tax (benefit) expense of $(1.3) million and $0.3 million for the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Nov. 02, 2019 | Oct. 27, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Change in fair value of swap agreements, tax (benefit) | $ (1.3) | $ 0.3 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total United Natural Foods, Inc. Stockholders’ Equity | Noncontrolling Interests |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect of change in accounting principle | $ (2,613) | $ (2,613) | $ (2,613) | |||||
Beginning Balance at Jul. 28, 2018 | 1,845,955 | $ 510 | $ (24,231) | $ 483,623 | $ (14,179) | 1,400,232 | 1,845,955 | $ 0 |
Beginning Balance (shares) at Jul. 28, 2018 | 51,025 | 615 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Restricted stock vestings and stock option exercises | 3,008 | $ 4 | (3,012) | (3,008) | ||||
Restricted stock vestings and stock option exercises | 401 | |||||||
Share-based compensation | 8,089 | 8,089 | 8,089 | |||||
Other/share-based compensation | 403 | 403 | 403 | |||||
Other comprehensive loss | (476) | (476) | (476) | |||||
Acquisition of noncontrolling interests | 1,633 | 1,633 | ||||||
Net (loss) income | (19,291) | (19,294) | (19,294) | 3 | ||||
Ending Balance at Oct. 27, 2018 | 1,830,316 | $ 514 | $ (24,231) | 489,103 | (14,655) | 1,381,215 | 1,831,946 | (1,630) |
Ending Balance (shares) at Oct. 27, 2018 | 51,426 | 615 | ||||||
Beginning Balance at Aug. 03, 2019 | $ 1,510,934 | $ 535 | $ (24,231) | 530,801 | (108,953) | 1,115,519 | 1,513,671 | (2,737) |
Beginning Balance (shares) at Aug. 03, 2019 | 50,411 | 53,501 | 615 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Restricted stock vestings and stock option exercises | $ 819 | $ 4 | (823) | (819) | ||||
Restricted stock vestings and stock option exercises | 424 | |||||||
Share-based compensation | 1,247 | 1,247 | 1,247 | |||||
Other comprehensive loss | (2,738) | (2,738) | (2,738) | |||||
Distributions to noncontrolling interests | (1,098) | 1,098 | ||||||
Proceeds from issuance of common stock, net | 196 | |||||||
Proceeds from issuance of common stock, net | 1,735 | $ 2 | 1,733 | 1,735 | ||||
Net (loss) income | (383,408) | (383,927) | (383,927) | 519 | ||||
Ending Balance at Nov. 02, 2019 | $ 1,123,240 | $ 541 | $ (24,231) | $ 532,958 | $ (111,691) | $ 728,979 | $ 1,126,556 | $ (3,316) |
Ending Balance (shares) at Nov. 02, 2019 | 53,506 | 54,121 | 615 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 02, 2019 | Oct. 27, 2018 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss including noncontrolling interests | $ (383,408) | $ (19,291) | |
Income from discontinued operations, net of tax | 24,954 | 2,070 | [1] |
Net loss from continuing operations | (408,362) | (21,361) | |
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: | |||
Depreciation and amortization | 75,141 | 24,793 | |
Share-based compensation | 1,247 | 8,089 | |
(Gain) loss on disposition of assets | (1,308) | 6 | |
Closed property and other restructuring charges | 4,969 | 412 | |
Goodwill and asset impairment charges | 425,405 | 0 | |
Net pension and other postretirement benefit income | (11,370) | (844) | |
Deferred income tax (benefit) expense | (62,560) | 1,214 | |
LIFO charge | 6,546 | 0 | |
Provision for doubtful accounts | 13,098 | 3,037 | |
Loss on debt extinguishment | 73 | 1,114 | |
Non-cash interest expense | 3,833 | 345 | |
Changes in operating assets and liabilities, net of acquired businesses | (182,257) | (118,124) | |
Net cash used in operating activities of continuing operations | (135,545) | (101,319) | |
Net cash provided by (used in) operating activities of discontinued operations | 676 | (5,701) | |
Net cash used in operating activities | (134,869) | (107,020) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Capital expenditures | (41,122) | (16,381) | |
Purchases of acquired businesses, net of cash acquired | 0 | (2,273,829) | |
Proceeds from dispositions of assets | 1,605 | 149,529 | |
Payments for long-term investment | 162 | 110 | |
Payments of company owned life insurance premiums | (1,204) | 0 | |
Net cash used in investing activities of continuing operations | (40,883) | (2,140,791) | |
Net cash provided by (used in) investing activities of discontinued operations | 17,002 | (89) | |
Net cash used in investing activities | (23,881) | (2,140,880) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings of long-term debt | 2,050 | 1,905,547 | |
Proceeds from borrowings under revolving credit line | 1,338,446 | 1,805,300 | |
Repayments of borrowings under revolving credit line | (1,100,746) | (688,000) | |
Repayments of long-term debt and finance leases | (83,510) | (110,000) | |
Proceeds from the issuance of common stock and exercise of stock options | 1,735 | 118 | |
Payment of employee restricted stock tax withholdings | (819) | (3,126) | |
Payments for debt issuance costs | 0 | (60,309) | |
Net cash provided by financing activities of continuing operations | 157,156 | 2,849,530 | |
Net cash used in financing activities of discontinued operations | (1,060) | 0 | |
Net cash provided by financing activities | 156,096 | 2,849,530 | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (10) | (49) | |
NET INCREASE IN CASH AND CASH EQUIVALENTS | (2,664) | 601,581 | |
Cash and cash equivalents, at beginning of period | 45,267 | 23,315 | |
Cash and cash equivalents, including restricted cash at end of period | 42,603 | 624,896 | |
Less: cash and cash equivalents of discontinued operations | (2,845) | (4,633) | |
Cash and cash equivalents including restricted cash of continuing operations | 39,758 | 620,263 | |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 49,296 | 7,325 | |
Cash (refunds) payments for federal and state income taxes, net | $ (28,874) | $ 462 | |
[1] | These results reflect retail operations from the Supervalu acquisition date of October 22, 2018 to October 27, 2018 . |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Nov. 02, 2019 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—SIGNIFICANT ACCOUNTING POLICIES Nature of Business United Natural Foods, Inc. and its subsidiaries (the “Company” or “UNFI”) is a leading distributor of natural, organic, specialty, and conventional grocery and non-food products, and provider of support services. The Company sells its products primarily throughout the United States and Canada. Fiscal Year The Company’s fiscal years end on the Saturday closest to July 31 and contain either 52 or 53 weeks. References to the first quarter of fiscal 2020 and 2019 relate to the 13-week fiscal quarters ended November 2, 2019 and October 27, 2018 , respectively. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation, with the exception of sales transactions from continuing to discontinued operations for wholesale supply discussed further in Note 3—Revenue Recognition. Unless otherwise indicated, references to the Condensed Consolidated Statements of Operations , the Condensed Consolidated Balance Sheets and the Notes to the Condensed Consolidated Financial Statements exclude all amounts related to discontinued operations. Refer to Note 17—Discontinued Operations for additional information about discontinued operations. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted. In the Company’s opinion, these Condensed Consolidated Financial Statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. However, the results of operations for interim periods may not be indicative of the results that may be expected for a full year. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 3, 2019 (the “Annual Report”). Except as described for lease accounting below, there were no material changes in significant accounting policies from those described in the Company’s Annual Report. Use of Estimates The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with original maturities of three months or less. The Company’s banking arrangements allow it to fund outstanding checks when presented to the financial institution for payment. The Company funds all intraday bank balance overdrafts during the same business day. Checks outstanding in excess of bank balances create book overdrafts, which are recorded in Accounts payable in the Condensed Consolidated Balance Sheets and are reflected as an operating activity in the Condensed Consolidated Statements of Cash Flows. As of November 2, 2019 and August 3, 2019 , the Company had net book overdrafts of $242.5 million and $236.9 million , respectively. Inventories, Net Inventories are valued at the lower of cost or market. Substantially all of the Company’s inventories consist of finished goods and a substantial portion of its inventories have a last-in, first-out (“LIFO”) reserve applied. Interim LIFO calculations are based on the Company’s estimates of expected year-end inventory levels and costs, as the actual valuation of inventory under the LIFO method is computed at the end of each year based on the inventory levels and costs at that time. If the first-in, first-out method had been used, Inventories, net would have been higher by approximately $30.7 million and $24.1 million at November 2, 2019 and August 3, 2019 , respectively. Leases At the inception or modification of contract, the Company determines whether a lease exists and classifies its leases as an operating or finance lease at commencement. Subsequent to commencement, lease classification is only reassessed upon a change to the expected lease term or contract modification. Finance and operating lease assets represent the Company’s right to use an underlying asset as lessee for the lease term, and lease obligations represent the Company’s obligation to make lease payments arising from the lease. These assets and obligations are recognized at the lease commencement date based on the present value of lease payments, net of incentives, over the lease term. Incremental borrowing rates are estimated based on the Company’s borrowing rate as of the lease commencement date to determine the present value of lease payments, when lease contracts do not provide a readily determinable implicit rate. Incremental borrowing rates are determined by using the yield curve based on the Company’s credit rating adjusted for the Company’s specific debt profile and secured debt risk. The lease asset also reflects any prepaid rent, initial direct costs incurred and lease incentives received. The Company’s lease terms include option extension periods when it is reasonably certain that those options will be exercised. Leases with an initial expected term of 12 months or less are not recorded in the consolidated balance sheets and the related lease expense is recognized on a straight-line basis over the lease term. The Company recognizes contractual obligations and receipts on a gross basis, such that the related lease obligation to the landlord is presented separately from the sublease created by the lease assignment to the assignee. As a result, the Company continues to recognize on its Condensed Consolidated Balance Sheets the operating lease assets and liabilities, and finance lease assets and obligations. The Company records operating lease expense and income using the straight-line method within Operating expenses, and lease income on a straight-line method for leases with its customers within Net sales. Finance lease expense is recognized as amortization expense within Operating expenses, and interest expense within Interest expense, net. For leases with step rent provisions whereby the rental payments increase over the life of the lease, and for leases where the Company receives rent-free periods, the Company recognizes expense and income based on a straight-line basis based on the total minimum lease payments to be made or lease receipts expected to be received over the expected lease term. The Company is generally obligated for property tax, insurance and maintenance expenses related to leased properties, which often represent variable lease expenses. For contractual obligations on properties where the Company remains the primary obligor upon assignment of the lease and does not obtain a release from landlords or retain the equity interests in the legal entities with the related rent contracts, the Company continues to recognize rent expense and rent income within Operating expenses. Operating and finance lease assets are reviewed for impairment based on an ongoing review of circumstances that indicate the assets may no longer be recoverable, such as closures of retail stores, distribution centers and other properties that are no longer being utilized in current operations, and other factors. The Company calculates operating and finance lease impairments using a discount rate to calculate the present value of estimated subtenant rentals that could be reasonably obtained for the property. Lease impairment charges are recorded as a component of Restructuring, acquisition and integration related expenses in the Condensed Consolidated Statements of Operations. The calculation of lease impairment charges requires significant judgments and estimates, including estimated subtenant rentals, discount rates and future cash flows based on the Company’s experience and knowledge of the market in which the property is located, previous efforts to dispose of similar assets and the assessment of existing market conditions. Impairment reserves are reflected as a reduction to Operating lease assets. Refer to Note 11—Leases for additional information. |
RECENTLY ADOPTED AND ISSUED ACC
RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Nov. 02, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS | NOTE 2—RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued accounting standard update (“ASU”) No. 2016-02, Leases (Topic 842), which provides new comprehensive lease accounting guidance that supersedes previous lease guidance. The objective of this ASU is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. Criteria for distinguishing leases between finance and operating are substantially similar to criteria for distinguishing between capital and operating leases in previous lease guidance. Lease agreements that are 12 months or less are permitted to be excluded from the balance sheet. In addition, this ASU expands the disclosure requirements of lease arrangements. The Company adopted this standard in the first quarter of fiscal 2020 on August 4, 2019, the effective and initial application date, using the additional transition method under ASU 2018-11, which allows for a cumulative effect adjustment within retained earnings in the period of adoption. In addition, the Company elected the “package of three” practical expedients which allows companies to not reassess whether arrangements contain leases, the classification of leases, and the capitalization of initial direct costs. The impact of the adoption to the Company’s Condensed Consolidated Balance Sheets includes the recognition of operating lease liabilities of $1.1 billion with corresponding right-of-use assets of approximately the same amount based on the present value of the remaining lease payments for existing operating leases. The difference between the amount of right-of-use assets and lease liabilities recognized is primarily related to adjustments to prepaid rent, deferred rent, lease intangible assets/liabilities, and closed property reserves. In addition, the adoption of the standard resulted in the derecognition of existing property and equipment for certain properties that did not qualify for sale accounting because the Company was determined to be the accounting owner during the construction phase. In addition, at the transition date the Company is constructing one facility that, when complete, the Company will perform a sale-leaseback assessment. For properties where the Company was deemed the accounting owner during construction for which construction has been completed, the difference between the assets and liabilities derecognized, net of the deferred tax impact, was recorded as an adjustment to retained earnings. Lessor accounting guidance remained largely unchanged from previous guidance. Adoption of this standard did not have a material impact to the Company’s Condensed Consolidated Statements of Operations or Cash Flows. The Company has revised its accounting policies, processes and controls, and systems as applicable to comply with the provisions and disclosure requirements of the standard. The effects of the changes, including those discussed above, made to the Company’s Condensed Consolidated Balance Sheets as of August 3, 2019 for the adoption of the new lease guidance were as follows (in thousands): Balance at August 3, 2019 Adjustments due to adoption of the new lease guidance Adjusted Balance at August 4, 2019 Assets Prepaid expenses and other current assets $ 226,727 $ (14,733 ) $ 211,994 Property and equipment, net 1,639,259 (142,541 ) 1,496,718 Operating lease assets — 1,059,473 1,059,473 Intangible assets, net 1,041,058 (17,671 ) 1,023,387 Deferred income taxes $ 31,087 1,052 $ 32,139 Total increase to assets $ 885,580 Liabilities and Stockholder’s Equity Accrued expense and other current liabilities $ 249,426 $ (7,260 ) $ 242,166 Current portion of operating lease liabilities — 137,741 137,741 Current portion of long-term debt and finance lease liabilities 112,103 (6,936 ) 105,167 Long-term operating lease liabilities — 936,728 936,728 Long-term finance lease obligations 108,208 (37,565 ) 70,643 Other long-term liabilities 393,595 (134,515 ) 259,080 Total stockholder’s equity $ 1,510,934 (2,613 ) $ 1,508,321 Total increase to liabilities and stockholder’s equity $ 885,580 In October 2018, the FASB issued authoritative guidance under ASU No. 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. This ASU adds the Overnight Index Swap (OIS) rate based on Secured Overnight Financing Rate (SOFR) as a benchmark interest rate for hedge accounting purposes. This ASU is effective for public companies with interim and fiscal years beginning after December 15, 2018, which for the Company is the first quarter of fiscal year 2020. The Company adopted this standard in the first quarter of fiscal 2020 with no impact to the Company’s consolidated financial statements as LIBOR is still being used as benchmark interest rate. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. This ASU is effective for all entities for annual and interim periods in fiscal years beginning after December 15, 2018. The Company adopted this ASU in the first quarter of fiscal 2020. The adoption of this ASU had no impact to Accumulated other comprehensive loss or Retained earnings. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326 Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 . This ASU clarifies the accounting treatment for the measurement of credit losses under ASC 236 and provides further clarification on previously issued updates including ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities and ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. Since the Company adopted ASU 2017-12 in the fourth quarter of fiscal 2018, the amendments in ASU 2019-04 related to clarifications on Accounting for Hedging Activities have been adopted by the Company in the first quarter of fiscal 2020. The remaining amendments within ASU 2019-04 are effective for fiscal years beginning after December 15, 2019, which for the Company is the first quarter of fiscal 2021. Early adoption is permitted. Th e Company adopted this standard in the first quarter of fiscal 2020 with no impact to Accumulated other comprehensive loss or Retained earnings for fiscal 2020, as the Company did not have separately measured ineffectiveness related to its cash flow hedges. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. ASU 2018-05 requires implementation costs incurred by customers in cloud computing arrangements (i.e. hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the noncancellable term of the cloud computing arrangements plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The Company is required to adopt this new guidance in the first quarter of fiscal 2021. The Company has outstanding cloud computing arrangements and continues to incur costs that it believes would be required to be capitalized under ASU 2018-05. The Company is currently reviewing the provisions of the new standard and evaluating its impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General: Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 eliminates requirements for certain disclosures and requires additional disclosures under defined benefit pension plans and other postretirement plans. The Company is required to adopt this guidance in the first quarter of fiscal 2021. The Company is currently reviewing the provisions of the new standard and evaluating its impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace the current “incurred loss” model and generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except that the losses will be recognized as an allowance. The Company is required to adopt this new guidance in the first quarter of fiscal 2021. The Company is currently reviewing the provisions of the new standard and evaluating its impact on the Company’s consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Nov. 02, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | NOTE 3—REVENUE RECOGNITION Disaggregation of Revenues The Company records revenue to four customer channels, which are described below: • Supernatural, which consists of chain accounts that are national in scope and carry primarily natural products, and currently consists solely of Whole Foods Market. • Supermarkets, which include accounts that also carry conventional products, and include chain accounts, supermarket independents, and gourmet and ethnic specialty stores. • 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, and the conventional military business. • Other , which includes foodservice, e-commerce and international customers outside of Canada, as well as sales to Amazon.com, Inc. The following tables detail the Company’s revenue recognition for the periods presented by customer channel for each of its segments. The Company does not record its revenues within its wholesale reportable segment for financial reporting purposes by product group, and it is therefore impracticable for it to report them accordingly. Net Sales for the 13-Week Period Ended (in millions) November 2, 2019 Customer Channel Wholesale Other Eliminations Consolidated Supermarkets $ 3,769 $ — $ — $ 3,769 Supernatural 1,111 — — 1,111 Independents 758 — — 758 Other 368 64 (51 ) 381 Total $ 6,006 $ 64 $ (51 ) $ 6,019 Net Sales for the 13-Week Period Ended (in millions) October 27, 2018 (1) Customer Channel Wholesale Other Eliminations Consolidated Supernatural $ 1,027 $ — $ — $ 1,027 Supermarkets 930 — — 930 Independents 667 — — 667 Other 233 49 (38 ) 244 Total $ 2,857 $ 49 $ (38 ) $ 2,868 (1) During the first quarter of fiscal 2020, the presentation of net sales by customer channel was adjusted to reflect reclassification of customer types resulting from management’s determination that a customer serviced by both Supervalu and legacy UNFI should be classified as a Supermarket customer given that customer’s operations. In addition, during the second quarter of fiscal 2019, net sales attributable to Supervalu was incorporated into the Company’s definition of sales by customer channel. There was no impact to the Condensed Consolidated Statements of Operations as a result of the reclassification of customer types. As a result of these adjustments, net sales to the Company’s Supermarkets channel for the first quarter of fiscal 2019 increased approximately $223 million compared to the previously reported amounts, while net sales to the Other channel increased approximately $1 million , with an offsetting elimination of the Supervalu customer channel. The Company serves customers in the United States and Canada, as well as customers located in other countries. However, all of the Company’s revenue is earned in the U.S. and Canada, as international distribution occurs through freight-forwarders. The Company does not have any performance obligations related to international shipments subsequent to delivery to the domestic port. Sales from the Company’s Wholesale segment to its retail discontinued operations are presented within Net Sales when the Company holds the business for sale with a supply agreement that it anticipates the sale of the retail banner to include upon its disposal. The Company recorded $244.6 million within Net sales from continuing operations attributable to discontinued operations inter-company product purchases in the first quarter of fiscal 2020, which the Company expects will continue subsequent to the sale of certain retail banners. These amounts were recorded at gross margin rates consistent with sales to other similar wholesale customers of the acquired Supervalu business. No sales were recorded within continuing operations for purchases by retail banners that the Company expects to dispose of without a supply agreement, which were eliminated upon consolidation within continuing operations and amounted to $113.0 million in the first quarter of fiscal 2020. Contract Balances Accounts and notes receivable are as follows: (in thousands) November 2, 2019 August 3, 2019 Customer accounts receivable $ 1,143,836 $ 1,063,167 Allowance for uncollectible receivables (27,812 ) (20,725 ) Other receivables, net 20,900 23,257 Accounts receivable, net $ 1,136,924 $ 1,065,699 Customer notes receivable, net, included within Prepaid expenses and other current assets $ 11,235 $ 11,912 Long-term notes receivable, net, included within Other assets $ 25,683 $ 34,408 |
ACQUISITIONS ACQUISITIONS
ACQUISITIONS ACQUISITIONS | 3 Months Ended |
Nov. 02, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 4—ACQUISITIONS Supervalu Acquisition On July 25, 2018, the Company entered into an agreement and plan of merger to acquire all of the outstanding equity securities of Supervalu, which was then the largest publicly traded conventional grocery distributor in the United States. The acquisition of Supervalu diversifies the Company’s customer base, further enables cross-selling opportunities, expands market reach and scale, enhances technology, capacity and systems, and is expected to deliver significant synergies and accelerate potential growth. The merger was completed on October 22, 2018 (the “Closing Date”). At the effective time of the acquisition, each share of Supervalu common stock, par value $0.01 per share, issued and outstanding, was canceled and converted into the right to receive a cash payment equal to $32.50 per share, without interest. Total consideration related to this acquisition was $2.3 billion , $1.3 billion of which was paid in cash to Supervalu shareholders and $1.0 billion of which was used to satisfy Supervalu’s outstanding debt obligations. Included in the liabilities assumed in the Supervalu acquisition were the Supervalu Senior Notes with a fair value of $546.6 million . These Senior Notes were redeemed in the second quarter of fiscal 2019 following the required 30-day notice period, resulting in their satisfaction and discharge. The assets and liabilities of Supervalu were recorded in the Company’s Consolidated Financial Statements on a preliminary basis at their estimated fair values as of the acquisition date. In conjunction with the Supervalu acquisition, the Company announced its plan to sell the remaining acquired retail operations of Supervalu. Refer to Note 17—Discontinued Operations for more information on discontinued operations. The following table summarizes the final consideration, fair value of assets acquired and liabilities assumed, and the resulting goodwill. (in thousands) Final Acquisition Date Fair Values 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 Fair value of assets acquired and liabilities assumed: Cash and cash equivalents $ 25,102 Accounts receivable 552,381 Inventories 1,156,781 Prepaid expenses and other current assets 112,449 Current assets of discontinued operations 196,848 Property, plant and equipment 1,207,115 Goodwill 376,181 Intangible assets 918,103 Other assets 77,008 Long-term assets of discontinued operations 433,839 Accounts payable (974,252 ) Current portion of long-term debt and finance lease obligations (579,565 ) Other current liabilities (331,693 ) Current liabilities of discontinued operations (148,763 ) Long-term debt (34,355 ) Long-term finance lease obligations (103,289 ) Pension and other postretirement benefit obligations (234,324 ) Deferred income taxes (18,254 ) Other long-term liabilities (308,516 ) 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. Goodwill represents the future economic benefits arising largely from the synergies expected from combining the operations of the Company and Supervalu that could not be individually identified and separately recognized. A substantial portion of goodwill is deductible for income tax purposes. Goodwill from the acquisition was attributed to the Company’s Supervalu Wholesale reporting unit and the legacy Company Wholesale reporting unit, which in the first quarter of fiscal 2020 was reorganized into a single U.S. Wholesale reporting unit, as discussed further in Note 6—Goodwill and Intangible Assets . No goodwill was attributed to the Company’s Retail reporting unit within discontinued operations. During the first quarter of fiscal 2020 , the Company finalized its preliminary fair value estimates of its net assets, primarily by completing income tax returns and reviews of carrying values of other assets and liabilities. There were no material changes to preliminary amounts previously reported. The following table summarizes the identifiable intangible assets and liabilities recorded based on final valuations. The identifiable intangible assets are expected to be amortized on a straight-line basis over the estimated useful lives indicated. The fair value of identifiable intangible assets acquired was determined using income approaches. Significant assumptions utilized in the income approach were based on Company-specific information and projections, which are not observable in the market and are thus considered Level 3 measurements as defined by authoritative guidance. Final Acquisition Date Fair Values (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 The Company incurred acquisition-related costs in conjunction with the Supervalu acquisition, which are quantified in Note 5—Restructuring, Acquisition and Integration Related Expenses . The accompanying Condensed Consolidated Statements of Operations include the results of operations of Supervalu from October 22, 2018. Supervalu’s net sales from discontinued operations for this time period are reported in Note 17—Discontinued Operations . The following table presents unaudited supplemental pro forma consolidated Net sales and Net loss from continuing operations based on the Company’s historical reporting periods as if the acquisition of Supervalu had occurred as of July 30, 2017: 13-Week Period Ended (in thousands, except per share data) October 27, 2018 (1) October 28, 2017 (2) Net sales $ 5,984,970 $ 5,910,484 Net loss from continuing operations $ (47,893 ) $ (53,367 ) Basic net loss continuing operations per share $ (0.95 ) $ (1.05 ) Diluted net loss from continuing operations per share $ (0.95 ) $ (1.05 ) (1) Includes 12 weeks of pro forma Supervalu results for the period ended September 8, 2018. (2) Includes 13 weeks of pro forma Supervalu results for the period ended September 17, 2017 and 13 weeks of pro forma Associated Grocers of Florida, Inc. results for the period ended August 5, 2017, which was acquired by Supervalu on December 8, 2017. These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined companies would have been had the acquisitions occurred at the beginning of the periods being presented, nor are they indicative of future results of operations. |
RESTRUCTURING, ACQUISITION, AND
RESTRUCTURING, ACQUISITION, AND INTEGRATION RELATED EXPENSES RESTRUCTURING, ACQUISITION, AND INTEGRATION RELATED EXPENSES | 3 Months Ended |
Nov. 02, 2019 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING, ACQUISITION, AND INTEGRATION RELATED EXPENSES | NOTE 5—RESTRUCTURING, ACQUISITION AND INTEGRATION RELATED EXPENSES Restructuring, acquisition and integration related expenses incurred were as follows: 13-Week Period Ended (in thousands) November 2, 2019 October 27, 2018 2019 SUPERVALU INC. restructuring expenses $ 1,837 $ 36,069 Acquisition and integration costs 9,294 31,935 Closed property charges and costs 3,119 — Total $ 14,250 $ 68,004 Restructuring Programs The following is a summary of the current period activity within restructuring reserves by program included in the Condensed Consolidated Balance Sheets , primarily within Accrued compensation and benefits for severance and other employee separation costs and related tax payments. (in thousands) 2019 SUPERVALU INC. 2018 Earth Origins Market 2017 Cost Saving and Efficiency Initiatives Total Balances at August 3, 2019 $ 11,857 $ 383 701 $ 12,941 Restructuring program charge 1,837 — — 1,837 Cash payments (7,078 ) — — (7,078 ) Balances at November 2, 2019 $ 6,616 $ 383 $ 701 $ 7,700 Cumulative program charges incurred from inception to date $ 76,251 $ 2,219 $ 6,864 $ 85,334 2019 SUPERVALU INC. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Nov. 02, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6—GOODWILL AND INTANGIBLE ASSETS The Company accounts for acquired businesses using the purchase method of accounting, which requires that the assets acquired and liabilities assumed be recorded at the acquisition date at their respective estimated fair values. Goodwill represents the excess acquisition cost over the fair value of net assets acquired in a business combination. Goodwill is assigned to the reporting units that are expected to benefit from the synergies of the business combination that generated the goodwill. The Company has five goodwill reporting units, two of which represent separate operating segments and are aggregated within the Wholesale reportable segment (U.S. Wholesale and Canada Wholesale), two of which are separate operating segments (Woodstock Farms and Blue Marble Brands) that do not meet the criteria for being disclosed as separate reportable segments, and a single retail reporting unit, which is included within discontinued operations. The Canada operating segment, which is aggregated with Wholesale, would not meet the quantitative thresholds for separate reporting if it did not meet the aggregation criteria. The composition of goodwill reporting units is evaluated for events or changes in circumstances indicating a goodwill reporting unit has changed. Relative fair value allocations are performed when components of an aggregated goodwill reporting unit become separate reporting units or move from one reporting unit to another. The Company reviews goodwill for impairment at least annually and more frequently if events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit is below its carrying amount. The annual review for goodwill impairment is performed as of the first day of the fourth quarter of each fiscal year. The Company tests for goodwill impairment at the reporting unit level, which is at or one level below the operating segment level. Supervalu Acquisition Goodwill In conjunction with the acquisition of Supervalu, goodwill resulting from the acquisition was assigned to the previous Supervalu Wholesale reporting unit and the previous legacy Company Wholesale reporting unit, as both of these reporting units were expected to benefit from the synergies of the business combination. The assignment was based on the relative synergistic value estimated as of the acquisition date. This systematic approach utilized the relative cash flow contributions and value created from the acquisition to each reporting unit on a stand-alone basis. As of the acquisition date, approximately $80.9 million was attributed to the legacy Company Wholesale reporting unit. As discussed in Note 7—Goodwill and Intangible Assets in the Consolidated Financial Statements of the Annual Report, the Company impaired all goodwill attributed to the Supervalu Wholesale reporting unit prior to the finalization of its purchase accounting within the opening balance sheet. In the first quarter of fiscal 2020, as discussed further in Note 4—Acquisitions the Company finalized purchase accounting and the opening balance sheet related to the Supervalu acquisition. Adjustments to the opening balance sheet goodwill in the first quarter of fiscal 2020, resulted in an additional goodwill impairment charge of $2.5 million . Fiscal 2020 Goodwill Impairment Review During the first quarter of fiscal 2020, the Company changed its management structure and internal financial reporting to combine the Supervalu Wholesale reporting unit and the legacy Company Wholesale reporting unit into one U.S. Wholesale reporting unit, and experienced a further sustained decline in market capitalization and enterprise value. As a result of the change in reporting units and the sustained decline in market capitalization and enterprise value, the Company performed an interim quantitative impairment review of goodwill for the Wholesale reporting unit, which included a determination of the fair value of all reporting units. The Company estimated the fair values of all reporting units using both the market approach, applying a multiple of earnings based on observable multiples for guideline publicly traded companies, and the income approach, discounting projected future cash flows based on management’s expectations of the current and future operating environment for each reporting unit. The calculation of the impairment charge includes substantial fact-based determinations and estimates including weighted average cost of capital, future revenue, profitability, cash flows and fair values of assets and liabilities. The rates used to discount projected future cash flows under the income approach reflect a weighted average cost of capital of 8.5% , which considered observable data about guideline publicly traded companies, an estimated market participant’s expectations about capital structure and risk premiums, including those reflected in the Company’s market capitalization. The Company corroborated the reasonableness of the estimated reporting unit fair values by reconciling to its enterprise value and market capitalization. Based on this analysis, the Company determined that the carrying value of its U.S. Wholesale reporting unit exceeded its fair value by an amount that exceeded its assigned goodwill. As a result, the Company recorded a goodwill impairment charge of $421.5 million in the first quarter of fiscal 2020 . The goodwill impairment charge is reflected in Goodwill and asset impairment charges in the Condensed Consolidated Statements of Operations. The goodwill impairment charge reflects the impairment of all of the U.S. Wholesale’s reporting unit goodwill. Goodwill and Intangible Assets Changes Changes in the carrying value of Goodwill by reportable segment that have goodwill consisted of the following: (in thousands) Wholesale Other Total Goodwill as of August 3, 2019 $ 432,103 (1) $ 10,153 (2) $ 442,256 Goodwill adjustment for prior fiscal year business combinations 1,424 — 1,424 Impairment charges (423,712 ) (293 ) (424,005 ) Change in foreign exchange rates 116 — 116 Goodwill as of November 2, 2019 $ 9,931 (1) $ 9,860 (2) $ 19,791 (1) Amounts are net of accumulated goodwill impairment charges of $292.8 million and $716.5 million as of August 3, 2019 and November 2, 2019 , respectively. (2) Amounts are net of accumulated goodwill impairment charges of $9.3 million and $9.6 million as of August 3, 2019 and November 2, 2019 . Identifiable intangible assets consisted of the following: November 2, 2019 August 3, 2019 (in thousands) Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Amortizing intangible assets: Customer relationships $ 1,008,103 $ 127,906 $ 880,197 $ 1,007,089 $ 111,940 $ 895,149 Non-compete agreements 12,900 7,571 5,329 12,900 6,237 6,663 Operating lease intangibles 11,748 2,451 9,297 32,103 2,209 29,894 Trademarks and tradenames 67,700 18,750 48,950 67,700 14,161 53,539 Total amortizing intangible assets 1,100,451 156,678 943,773 1,119,792 134,547 985,245 Indefinite lived intangible assets: Trademarks and tradenames 55,813 — 55,813 55,813 — 55,813 Intangible assets, net $ 1,156,264 $ 156,678 $ 999,586 $ 1,175,605 $ 134,547 $ 1,041,058 Amortization expense was $22.1 million and $3.7 million for the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively. The estimated future amortization expense for each of the next five fiscal years and thereafter on definite lived intangible assets existing as of November 2, 2019 is shown below: Fiscal Year: (In thousands) Remaining fiscal 2020 $ 64,180 2021 71,510 2022 65,893 2023 65,842 2024 66,054 2025 and thereafter 610,294 $ 943,773 |
FAIR VALUE MEASUREMENTS FAIR VA
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS | 3 Months Ended |
Nov. 02, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 7—FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS Recurring Fair Value Measurements The following table provides the fair value hierarchy for financial assets and liabilities measured on a recurring basis: Fair Value at November 2, 2019 (In thousands) Balance Sheet Location Level 1 Level 2 Level 3 Assets: Interest rate swaps designated as hedging instruments Prepaid expenses and other current assets $ — $ 279 $ — Interest rate swaps designated as hedging instruments Other assets $ — $ 89 $ — Mutual funds Other assets $ 1,759 $ — $ — Liabilities: Interest rate swaps designated as hedging instruments Accrued expenses and other current liabilities $ — $ 20,645 $ — Interest rate swaps designated as hedging instruments Other long-term liabilities $ — $ 61,370 $ — Fair Value at August 3, 2019 (in thousands) Balance Sheet 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 Prepaid expenses and other current assets $ — $ 16,360 $ — Interest rate swaps designated as hedging instruments Other long-term liabilities $ — $ 60,737 $ — Interest Rate Swap Contracts The fair values of interest rate swap contracts are measured using Level 2 inputs. The interest rate swap contracts are valued using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, LIBOR swap rates and credit default swap rates. As of November 2, 2019 , a 100 basis point increase in forward LIBOR interest rates would increase the fair value of the interest rate swaps by approximately $64.9 million ; a 100 basis point decrease in forward LIBOR interest rates would decrease the fair value of the interest rate swaps by approximately $67.8 million . Refer to Note 8—Derivatives for further information on interest rate swap contracts. Mutual Funds Mutual fund assets consist of balances held in investments to fund certain deferred compensation plans. The fair values of mutual fund assets are based on quoted market prices of the mutual funds held by the plan at each reporting period. Mutual funds traded in active markets are classified within Level 1 of the fair value hierarchy. Fair Value Estimates For certain of the Company’s financial instruments including cash and cash equivalents, receivables, accounts payable, accrued vacation, compensation and benefits, and other current assets and liabilities the fair values approximate carrying amounts due to their short maturities. Notes receivable estimated fair value is determined by a discounted cash flow approach applying a market rate for similar instruments that is determined using Level 3 inputs. The estimated fair values are based on market quotes, where available, or market values for similar instruments, using Level 2 and 3 inputs. In the table below, the carrying value of the Company’s long-term debt is net of original issue discounts and debt issuance costs. November 2, 2019 August 3, 2019 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Notes receivable, including current portion $ 36,918 $ 37,218 $ 46,320 $ 45,232 Long-term debt, including current portion $ 3,070,456 $ 2,812,437 $ 2,906,483 $ 2,730,271 Fuel Supply Agreements and Derivatives To reduce diesel price risk, the Company has in the past, and may in the future, periodically enter in to derivative financial instruments and/or forward purchase commitments for a portion of its projected monthly diesel fuel requirements at fixed prices. As of August 3, 2019 , the Company had no outstanding fuel supply agreements and derivative agreements. As of November 2, 2019 , the Company’s fuel supply agreements and derivatives were immaterial. Foreign Exchange Derivatives To reduce foreign exchange risk, the Company has in the past, and may in the future, periodically enter in to derivative financial instruments for a portion of its projected monthly foreign currency requirements at fixed prices. As of November 2, 2019 and August 3, 2019 , the Company’s outstanding foreign currency forward contracts were immaterial. |
DERIVATIVES DERIVATIVES
DERIVATIVES DERIVATIVES | 3 Months Ended |
Nov. 02, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | NOTE 8—DERIVATIVES Management of Interest Rate Risk The Company enters into interest rate swap contracts from time to time to mitigate its exposure to changes in market interest rates as part of its overall strategy to manage its debt portfolio to achieve an overall desired position of notional debt amounts subject to fixed and floating interest rates. Interest rate swap contracts are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The Company’s interest rate swap contracts are designated as cash flow hedges at November 2, 2019 . Interest rate swap contracts are reflected at their fair values in the Condensed Consolidated Balance Sheets . Refer to Note 7—Fair Value Measurements of Financial Instruments for further information on the fair value of interest rate swap contracts. Details of outstanding swap contracts as of November 2, 2019 , which are all pay fixed and receive floating, are as follows: 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) 58.5 1.7950 % One-Month LIBOR Monthly August 15, 2022 (4) 39.0 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 (15) 50.0 2.1840 % One-Month LIBOR Monthly $ 2,197.5 (1) This swap was executed on June 7, 2016 with an effective date of June 9, 2016. (2) This swap was executed on June 24, 2016 with an effective date of June 24, 2016. (3) This swap contract was executed on January 23, 2015 with an effective date of August 3, 2015. On March 31, 2015, the Company amended the original contract to reduce the beginning notional principal amount from $140 million to $84 million . The swap contract has an amortizing notional principal amount which is reduced by $1.5 million on a quarterly basis. (4) This swap was executed on March 31, 2015 with an effective date of August 3, 2015. The swap contract has an amortizing notional principal amount which is reduced by $1.0 million on a quarterly basis. (5) This swap contract was executed on October 26, 2018 with an effective date of October 26, 2018. (6) This swap contract was executed on November 16, 2018 with an effective date of November 16, 2018. (7) This swap contract was executed on November 30, 2018 with an effective date of November 30, 2018. (8) This swap contract was executed on January 11, 2019 with an effective date of January 11, 2019. (9) This swap contract was executed on January 23, 2019 with an effective date of January 23, 2019. (10) This swap contract was executed on January 24, 2019 with an effective date of January 24, 2019. (11) This swap contract was executed on March 18, 2019 with an effective date of March 21, 2019. (12) This swap contract was executed on March 21, 2019 with an effective date of March 21, 2019. (13) This swap contract was executed on April 2, 2019 with an effective date of April 2, 2019. (14) This swap contract was executed on April 2, 2019 with an effective date of June 10, 2019. (15) This swap contract was executed on April 2, 2019 with an effective date of June 28, 2019. The Company performs an initial quantitative assessment of hedge effectiveness using the “Hypothetical Derivative Method” in the period in which the hedging transaction is entered. Under this method, the Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. In future reporting periods, the Company performs a qualitative analysis for quarterly prospective and retrospective assessments of hedge effectiveness. The Company also monitors the risk of counterparty default on an ongoing basis and noted that the counterparties are reputable financial institutions. The entire change in the fair value of the derivative is initially reported in Other comprehensive income (outside of earnings) in the Condensed Consolidated Statements of Comprehensive Loss and subsequently reclassified to earnings in Interest expense, net in the Condensed Consolidated Statements of Operations when the hedged transactions affect earnings. The location and amount of gains or losses recognized in the Condensed Consolidated Statements of Operations for interest rate swap contracts for each of the periods, presented on a pretax basis, are as follows: 13-Week Period Ended November 2, 2019 October 27, 2018 (In thousands) Interest Expense, net Total amounts of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded $ 49,518 $ 7,525 Gain or (loss) on cash flow hedging relationships: Gain or (loss) reclassified from comprehensive income into income $ (2,370 ) $ 551 Gain or (loss) on interest rate swap contracts not designated as hedging instruments: Gain or (loss) recognized as interest expense $ — $ (88 ) |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Nov. 02, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | NOTE 9—LONG-TERM DEBT The Company’s long-term debt consisted of the following: (in thousands) Average Interest Rate at November 2, 2019 Calendar Maturity Year November 2, August 3, Term Loan Facility 6.04% 2025 $ 1,786,500 $ 1,864,900 ABL Credit Facility 3.14% 2023 1,317,700 1,080,000 Other secured loans 5.20% 2023-2024 58,417 57,649 Debt issuance costs, net (52,374 ) (54,891 ) Original issue discount on debt (39,787 ) (41,175 ) Long-term debt, including current portion 3,070,456 2,906,483 Less: current portion of long-term debt (19,218 ) (87,433 ) Long-term debt $ 3,051,238 $ 2,819,050 ABL Credit Facility On August 30, 2018, the Company entered into a loan agreement (as amended by that certain First Amendment to Loan Agreement, dated as of October 19, 2018, and as further amended by that certain Second Amendment to Loan Agreement, dated January 24, 2019, the “ABL Loan Agreement”), by and among the Company and United Natural Foods West, Inc. (together with the Company, the “U.S. Borrowers”) and UNFI Canada, Inc. (the “Canadian Borrower” and, together with the U.S. Borrowers, the “Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “ABL Lenders”), Bank of America, N.A. as administrative agent for the ABL Lenders (the “ABL Administrative Agent”), Bank of America, N.A. (acting through its Canada branch), as Canadian agent for the ABL Lenders, and the other parties thereto. The ABL Loan Agreement provides for a secured asset-based revolving credit facility (the “ABL Credit Facility” and the loans thereunder, the “ABL Loans”), of which up to (i) $2,050.0 million is available to the U.S. Borrowers and (ii) $50.0 million is available to the Canadian Borrower. The ABL Loan Agreement also provides for (i) a $125.0 million sublimit of availability for letters of credit of which there is a further $5.0 million sublimit for the Canadian Borrower, and (ii) a $100.0 million sublimit for short-term borrowings on a swingline basis of which there is a further $3.5 million sublimit for the Canadian Borrower. The ABL Credit Facility replaced the Company’s $900.0 million prior asset-based revolving credit facility. In addition, $1,475.0 million of proceeds from the ABL Credit Facility were drawn to finance the Supervalu acquisition and related transaction costs on the Supervalu acquisition date (the “Closing Date”). Under the ABL Loan Agreement, the Borrowers may, at their option, increase the aggregate amount of the ABL Credit Facility in an amount of up to $600.0 million without the consent of any ABL Lenders not participating in such increase, subject to certain customary conditions and applicable lenders committing to provide the increase in funding. There is no assurance that additional funding would be available. The Borrowers’ obligations under the ABL Credit Facility are guaranteed by most of the Company’s wholly-owned subsidiaries who are not also Borrowers (collectively, the “ABL Guarantors”), subject to customary exceptions and limitations. The Borrowers’ obligations under the ABL Credit Facility and the ABL Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on all of the Borrowers’ and ABL Guarantors’ accounts receivable, inventory and certain other assets arising therefrom or related thereto (including substantially all of their deposit accounts, collectively, the “ABL Assets”) and (ii) a second-priority lien on all of the Borrowers’ and ABL Guarantors’ assets that do not constitute ABL Assets, in each case, subject to customary exceptions and limitations. Availability under the ABL Credit Facility is subject to a borrowing base (the “Borrowing Base”), which is based on 90% of eligible accounts receivable, plus 90% of eligible credit card receivables, plus 90% of the net orderly liquidation value of eligible inventory, plus 90% of eligible pharmacy receivables, plus certain pharmacy scripts availability of the Borrowers, after adjusting for customary reserves. The aggregate amount of the ABL Loans made and letters of credit issued under the ABL Credit Facility shall at no time exceed the lesser of the aggregate commitments under the ABL Credit Facility (currently $2,100.0 million or, if increased at the Borrowers’ option as described above, up to $2,700.0 million ) or the Borrowing Base. To the extent that the Borrowers’ Borrowing Base declines, the availability under the ABL Credit Facility may decrease below $2,100.0 million . As of November 2, 2019 , the U.S. Borrowers’ Borrowing Base, net of $143.9 million of reserves, was $2,333.7 million , which is above the $2,050.0 million limit of availability to the U.S. Borrowers under the ABL Credit Facility. As of November 2, 2019 , the Canadian Borrower’s Borrowing Base, net of $4.0 million of reserves, was $40.8 million , which is below the $50 million limit of availability to the Canadian Borrower under the ABL Credit facility, resulting in a total Borrowing Base of $2,090.8 million supporting the ABL Loans and outstanding letters of credit under the ABL Credit Facility. As of November 2, 2019 , the U.S. Borrowers had $1,317.7 million of ABL Loans outstanding, which are presented net of debt issuance costs of $12.2 million and are included in Long-term debt in the Condensed Consolidated Balance Sheets , and the Canadian Borrower had no ABL Loans outstanding under the ABL Credit Facility. As of November 2, 2019 , the U.S. Borrowers had $77.4 million in letters of credit and the Canadian Borrower had no letters of credit outstanding under the ABL Credit Facility. The Company’s resulting remaining availability under the ABL Credit Facility was $695.7 million as of November 2, 2019 . The ABL Loans of the U.S. Borrowers under the ABL Credit Facility bear interest at rates that, at the U.S. Borrowers’ option, can be either: (i) a base rate and an applicable margin, or (ii) a LIBOR rate and an applicable margin. As of November 2, 2019 , the applicable margin for base rate loans was 0.25% , and the applicable margin for LIBOR loans was 1.25% . The ABL Loans of the Canadian Borrower under the ABL Credit Facility bear interest at rates that, at the Canadian Borrower’s option, can be either: (i) prime rate and an applicable margin, or (ii) a Canadian dollar bankers’ acceptance equivalent rate and an applicable margin. As of November 2, 2019 , the applicable margin for prime rate loans was 0.25% , and the applicable margin for Canadian dollar bankers’ acceptance equivalent rate loans was 1.25% . Commencing on the first day of the calendar month following the ABL Administrative Agent’s receipt of the Company’s aggregate availability calculation for the fiscal quarter ending on November 2, 2019 , and quarterly thereafter, the applicable margins for borrowings by the U.S. Borrowers and Canadian Borrower will be subject to adjustment based upon the aggregate availability under the ABL Credit Facility. Unutilized commitments under the ABL Credit Facility are subject to a per annum fee of (i) 0.375% if the average daily total outstandings were less than 25% of the aggregate commitments during the preceding fiscal quarter or (ii) 0.25% if such average daily total outstandings were 25% or more of the aggregate commitments during the preceding fiscal quarter. As of November 2, 2019 , the unutilized commitment fee was 0.25% per annum. The Borrowers are also required to pay a letter of credit fronting fee to each letter of credit issuer equal to 0.125% per annum of the amount available to be drawn under each such letter of credit, as well as a fee to all lenders equal to the applicable margin for LIBOR or Canadian dollar bankers’ acceptance equivalent rate loans, as applicable, times the average daily amount available to be drawn under all outstanding letters of credit. The ABL Loan Agreement subjects the Company to a fixed charge coverage ratio (as defined in the ABL Loan Agreement) of at least 1.0 to 1.0 calculated at the end of each fiscal quarter on a rolling four quarter basis when the adjusted aggregate availability (as defined in the ABL Loan Agreement) is less than the greater of (i) $235.0 million and (ii) 10% of the aggregate borrowing base. The Company was not subject to the fixed charge coverage ratio covenant under the ABL Loan Agreement during the first quarter of fiscal 2020 . The assets included in the Condensed Consolidated Balance Sheets securing the outstanding obligations under the ABL Credit Facility on a first-priority basis, and the unused available credit and fees under the ABL Credit Facility, were as follows: Assets securing the ABL Credit Facility (in thousands) (1) : November 2, 2019 Certain inventory assets included in Inventories and Current assets of discontinued operations $ 2,447,555 Certain receivables included in Accounts receivables, net and Current assets of discontinued operations $ 1,077,978 (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 Condensed Consolidated Balance Sheets as of November 2, 2019 . Unused available credit and fees under the ABL Credit Facility (in thousands, except percentages): November 2, 2019 Outstanding letters of credit $ 77,413 Letter of credit fees 1.375 % Unused available credit $ 695,704 Unused facility fees 0.25 % The ABL Loan Agreement contains other customary affirmative and negative covenants and customary representations and warranties that must be accurate in order for the Borrowers to borrow under the ABL Credit Facility. The ABL Loan Agreement also contains customary events of default, including, but not limited to, payment defaults, breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the ABL Credit Facility to be in full force and effect, and a change of control. If an event of default occurs and is continuing, the Borrowers may be required immediately to repay all amounts outstanding under the ABL Loan Agreement. Term Loan Facility On the Closing Date, the Company entered into a new term loan agreement (the “Term Loan Agreement”), by and among the Company and Supervalu (collectively, the “Term Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “Term Lenders”), Goldman Sachs Bank USA, as administrative agent for the Lenders, and the other parties thereto. The Term Loan Agreement provides for senior secured first lien term loans in an aggregate principal amount of $1,950.0 million , consisting of a $1,800.0 million seven year tranche (the “Term B Tranche”) and a $150.0 million 364 -day tranche (the “364-day Tranche” and, together with the Term B Tranche, collectively, the “Term Loan Facility”). The entire amount of the net proceeds from the Term Loan Facility was used to finance the Supervalu acquisition and related transaction costs. The loans under the Term B Tranche will be payable in full on October 22, 2025; provided that if on or prior to December 31, 2024 that certain Agreement for Distribution of Products, dated as of October 30, 2015, by and between Whole Foods Market Distribution, Inc., a Delaware corporation, and the Company has not been extended until at least October 23, 2025 on terms not materially less favorable, taken as a whole, to the Company and its subsidiaries than those in effect on the date of the Acquisition, then the loans under the Term B Tranche will be payable in full on December 31, 2024. The loans under the 364-day Tranche were paid in full on October 21, 2019. The Company funded the scheduled maturity of the $52.8 million outstanding borrowings under the 364-day Tranche with incremental borrowings under the ABL Credit Facility on October 21, 2019. In addition, in the first quarter of fiscal 2020, the Company made mandatory prepayments and voluntary prepayments of $15.3 million and $5.8 million , respectively, on the 364-day Tranche with asset sale proceeds. In connection with the prepayments, the Company incurred a loss on debt extinguishment related to unamortized debt issuance costs of $0.1 million , which was recorded within Interest expense, net in the Condensed Consolidated Statements of Operations for the first quarter of fiscal 2020. Under the Term Loan Agreement, the Term Borrowers may, at their option, increase the amount of the Term B Tranche, add one or more additional tranches of term loans or add one or more additional tranches of revolving credit commitments, without the consent of any Term Lenders not participating in such additional borrowings, up to an aggregate amount of $656.3 million plus additional amounts based on satisfaction of certain leverage ratio tests, subject to certain customary conditions and applicable lenders committing to provide the additional funding. There can be no assurance that additional funding would be available. The Term Borrowers’ obligations under the Term Loan Facility are guaranteed by most of the Company’s wholly-owned domestic subsidiaries who are not also Term Borrowers (collectively, the “Term Guarantors”), subject to customary exceptions and limitations, including an exception for immaterial subsidiaries designated by the Company from time to time. The Term Borrowers’ obligations under the Term Loan Facility and the Term Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on substantially all of the Term Borrowers’ and the Term Guarantors’ assets other than the ABL Assets and (ii) a second-priority lien on substantially all of the Term Borrowers’ and the Term Guarantors’ ABL Assets, in each case, subject to customary exceptions and limitations, including an exception for owned real property with net book values of less than $10.0 million . As of November 2, 2019 , there was $590.7 million of owned real property pledged as collateral that was included in Property and equipment, net in the Condensed Consolidated Balance Sheets . The loans under the Term Loan Facility may be voluntarily prepaid, subject to certain minimum payment thresholds and the payment of breakage or other similar costs. Under the Term Loan Facility, the Company is required, subject to certain exceptions and customary reinvestment rights, to apply 100 percent of Net Cash Proceeds (as defined in the Term Loan Agreement) from certain types of asset sales to prepay the loans outstanding under the Term Loan Facility. Commencing with the fiscal year ending August 1, 2020, the Company must also prepay loans outstanding under the Term Loan Facility no later than 130 days after the fiscal year end in an aggregate principal amount equal to a specified percentage (which percentage ranges from 0 to 75 percent depending on the Consolidated First Lien Net Leverage Ratio (as defined in the Term Loan Agreement) as of the last day of such fiscal year) of Excess Cash Flow (as defined in the Term Loan Agreement) in excess of $10 million for the fiscal year then ended, minus any voluntary prepayments of the loans under the Term Loan Facility, the ABL Credit Facility (to the extent they permanently reduce commitments under the ABL Facility) and certain other indebtedness made during such fiscal year. The potential amount of prepayment from Excess Cash Flow in fiscal 2020 that may be required in fiscal 2021 is not reasonably estimable as of November 2, 2019. The borrowings under the Term B Tranche of the Term Loan Facility bear interest at rates that, at the Term Borrowers’ option, can be either: (i) a base rate and a margin of 3.25% or (ii) a LIBOR rate and a margin of 4.25% ; provided that the LIBOR rate shall never be less than 0.0% . The Term Loan Agreement does not include any financial maintenance covenants but contains other customary affirmative and negative covenants and customary representations and warranties. The Term Loan Agreement also contains customary events of default, including, but not limited to, payment defaults, breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the Term Loan Facility to be in full force and effect, and a change of control. If an event of default occurs and is continuing, the Term Borrowers may be required immediately to repay all amounts outstanding under the Term Loan Agreement. As of November 2, 2019 , the Company had borrowings of $1,786.5 million and no amounts outstanding under the Term B Tranche and 364-day Tranche, respectively, which are presented net of debt issuance costs of $40.2 million and an original issue discount on debt of $39.4 million . As of November 2, 2019 , $18.0 million of the Term B Tranche was classified as current, excluding debt issuance costs and original issue discount on debt. |
COMPREHENSIVE (LOSS) INCOME AND
COMPREHENSIVE (LOSS) INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Nov. 02, 2019 | |
Equity [Abstract] | |
COMPREHENSIVE (LOSS) INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS | NOTE 10—COMPREHENSIVE (LOSS) INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS Changes in Accumulated other comprehensive loss by component for 13-week period ended November 2, 2019 are as follows: (in thousands) Benefit Plans Foreign Currency Swap Agreements Total Accumulated other comprehensive loss at August 3, 2019, net of tax $ (32,458 ) $ (20,082 ) $ (56,413 ) $ (108,953 ) Other comprehensive loss before reclassifications — 371 (1,739 ) (1,368 ) Amortization of amounts included in net periodic benefit income 572 — — 572 Amortization of cash flow hedge — — (1,942 ) (1,942 ) Net current period Other comprehensive loss 572 371 (3,681 ) (2,738 ) Accumulated other comprehensive loss at November 2, 2019, net of tax $ (31,886 ) $ (19,711 ) $ (60,094 ) $ (111,691 ) Changes in Accumulated other comprehensive loss by component for 13-week period ended October 27, 2018 are as follows: (in thousands) Foreign Currency Swap Agreements Total Accumulated other comprehensive (loss) income at July 28, 2018, net of tax $ (19,053 ) $ 4,874 $ (14,179 ) Other comprehensive loss before reclassifications (672 ) (245 ) (917 ) Amortization of cash flow hedge — 441 441 Net current period Other comprehensive loss (672 ) 196 (476 ) Accumulated other comprehensive (loss) income at October 27, 2018, net of tax $ (19,725 ) $ 5,070 $ (14,655 ) Items reclassified out of Accumulated other comprehensive loss had the following impact on the Condensed Consolidated Statements of Operations : 13-Week Period Ended Affected Line Item on the Condensed Consolidated Statements of Operations (in thousands) November 2, October 27, Pension and postretirement benefit plan obligations: Amortization of amounts included in net periodic benefit income (1) $ 774 $ — Net periodic benefit income, excluding service cost Income tax (benefit) expense (202 ) — Benefit for income taxes Total reclassifications, net of tax $ 572 $ — Swap agreements: Reclassification of cash flow hedge $ (2,370 ) $ 551 Interest expense, net Income tax (benefit) expense (428 ) 110 Benefit for income taxes Total reclassifications, net of tax $ (1,942 ) $ 441 (1) Amortization of amounts included in net periodic benefit income include amortization of prior service benefit and amortization of net actuarial loss as reflected in Note 12—Benefit Plans. |
LEASES
LEASES | 3 Months Ended |
Nov. 02, 2019 | |
Leases [Abstract] | |
LEASES | NOTE 11—LEASES The Company leases certain of its distribution centers, retail stores, office facilities, transportation equipment, and other operating equipment from third parties. Many of these leases include renewal options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. For all classes of underlying assets, the Company has elected to not separate fixed lease components, from the fixed nonlease components. Lease assets and liabilities are as follows (in thousands): Lease Type Balance Sheet Location November 2, 2019 Operating lease assets Operating lease assets $ 1,051,128 Finance lease assets Property and equipment, net 68,429 Total lease assets $ 1,119,557 Operating liabilities Current portion of operating lease liabilities $ 127,327 Finance liabilities Current portion of long-term debt and finance lease liabilities 15,239 Operating liabilities Long-term operating lease liabilities 949,978 Finance liabilities Long-term finance lease liabilities 68,682 Total lease liabilities $ 1,161,226 The Company's lease cost under ASC 842 for the 13-week period ended November 2, 2019 is as follows: (in thousands) Statement of Operations Location 13-Week Period Ended November 2, 2019 Operating lease cost Operating expenses $ 67,141 Short-term lease cost Operating expenses 10,514 Variable lease cost Operating expenses 34,956 Sublease income Operating expenses (10,940 ) Sublease income Net sales (4,835 ) Net operating lease cost (1) 96,836 Amortization of leased assets Operating expenses 4,703 Interest on lease liabilities Interest expense, net 2,118 Finance lease cost 6,821 Total net lease cost $ 103,657 (1) Rent expense as presented here includes $12.5 million 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 the Company expects to remain primarily obligated under these leases The Company leases certain property to third parties and receives lease and subtenant rental payments under operating leases, including assigned leases for which the Company has future minimum lease payment obligations. Future minimum lease payments (“Lease Liabilities”) to be made by the Company or certain third parties in the case of assigned leases for noncancellable operating leases and finance leases have not been reduced for future minimum lease and subtenant rentals (“Lease Receipts”) under certain operating subleases, including lease assignments for stores sold to third parties, which they operate. As of November 2, 2019 , these lease obligations and lease receipts consisted of the following (in thousands): Maturity of Lease Liabilities and Lease Receipts Lease Liabilities Lease Receipts Net Lease Obligations Fiscal Year Operating Leases (1) Finance Leases (2) Operating Leases Finance Leases Operating Leases Finance Leases Remaining fiscal 2020 $ 187,380 $ 18,874 $ (43,449 ) $ (161 ) $ 143,931 $ 18,713 2021 209,552 19,252 (46,516 ) — 163,036 19,252 2022 198,343 17,760 (41,562 ) — 156,781 17,760 2023 171,756 16,653 (31,360 ) — 140,396 16,653 2024 145,338 15,702 (24,236 ) — 121,102 15,702 Thereafter 1,050,386 21,526 (55,542 ) — 994,844 21,526 Total undiscounted lease liabilities and receipts $ 1,962,755 $ 109,767 $ (242,665 ) $ (161 ) $ 1,720,090 $ 109,606 Less interest (3) (885,450 ) (25,846 ) Present value of lease liabilities 1,077,305 83,921 Less current lease liabilities (127,327 ) (15,239 ) Long-term lease liabilities $ 949,978 $ 68,682 (1) Operating lease payments include $14.7 million related to extension options that are reasonably certain of being exercised and exclude $48.5 million of legally binding minimum lease payments for leases signed but not yet commenced. (2) Finance lease payments include $0.0 million related to extension options that are reasonably certain of being exercised and exclude $0.0 million of legally binding minimum lease payments for leases signed but not yet commenced. (3) Calculated using the interest rate for each lease. As of August 3, 2019, future minimum lease payments to be made by the Company or certain third parties in the case of assigned leases for noncancellable operating leases and finance leases, which have not been reduced for future minimum subtenant rentals under certain operating subleases, including assignments, consisted of the following amounts (in thousands): 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 The following tables provide other information required by ASC 842: Lease Term and Discount Rate November 2, 2019 Weighted-average remaining lease term (years) Operating leases 11.1 years Finance leases 5.7 years Weighted-average discount rate Operating leases 10.7 % Finance leases 9.9 % Other Information 13-Week Period Ended (in thousands) November 2, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases 55,750 Operating cash flows from finance leases 1,880 Financing cash flows from finance leases 3,074 Leased assets obtained in exchange for new finance lease liabilities — Leased assets obtained in exchange for new operating lease liabilities 37,020 |
BENEFIT PLANS
BENEFIT PLANS | 3 Months Ended |
Nov. 02, 2019 | |
Retirement Benefits [Abstract] | |
BENEFIT PLANS | NOTE 12—BENEFIT PLANS Net periodic benefit (income) cost and contributions to defined benefit pension and other post-retirement benefit plans consisted of the following: First Quarter Ended Pension Benefits Other Postretirement Benefits (in thousands) November 2, 2019 October 27, 2018 November 2, 2019 October 27, 2018 Net Periodic Benefit (Income) Cost Service cost $ — $ — $ 14 $ 4 Interest cost 16,690 1,847 236 38 Expected return on plan assets (27,482 ) (2,724 ) (54 ) (5 ) Amortization of net actuarial loss (gain) 3 — (777 ) — Net periodic benefit (income) cost $ (10,789 ) $ (877 ) $ (581 ) $ 37 Contributions to benefit plans $ (4,100 ) $ (37 ) $ (100 ) $ (9 ) Pension Contributions No minimum pension contributions are required to be made to the SUPERVALU Retirement Plan in fiscal 2020. Minimum pension contributions of $8.25 million are required to be made under the Unified Grocers, Inc. Cash Balance Plan under the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) in fiscal 2020. The Company expects to contribute approximately $0.0 million to $6.0 million to its other defined benefit pension plans and postretirement benefit plans in fiscal 2020. Multiemployer Pension Plans The Company contributed $13.5 million and $0.1 million in the first quarters of fiscal 2020 and 2019 , respectively, to continuing and discontinued operations multiemployer pension plans. Lump Sum Pension Settlement Offering On August 1, 2019, the Company amended the SUPERVALU Retirement Plan to provide for a lump sum settlement window. On August 2, 2019, the Company sent plan participants lump sum settlement election offerings that committed the plan to pay certain deferred vested pension plan participants and retirees, who make such an election, a lump sum payment in exchange for their rights to receive ongoing payments from the plan. The lump sum payment amounts are equal to the present value of the participant’s pension benefits, and were made to certain former (i) retired associates and beneficiaries who are receiving their monthly pension benefit payment and (ii) terminated associates who are deferred vested in the plan, had not yet begun receiving monthly pension benefit payments and who are not eligible for any prior lump sum offerings under the plan. Benefit obligations associated with the lump sum offering have been incorporated into the funded status utilizing the actuarially determined lump sum payments based on estimated offer acceptances. The plan made aggregate lump sum settlement payments of $664.0 million to plan participants on November 4, 2019 and November 12, 2019. The Company expects that the lump sum settlement payments will result in an estimated non-cash pension settlement charge of approximately $10.0 million in the second quarter of fiscal 2020 from the acceleration of a portion of the accumulated unrecognized actuarial loss, which will be based on the fair value of SUPERVALU Retirement Plan assets and remeasured liabilities. The settlement and subsequent re-measurement is expected to result in a decrease to accumulated other comprehensive loss and an improvement to the SUPERVALU Retirement Plan’s unfunded status. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Nov. 02, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 13—INCOME TAXES The effective income tax rate for continuing operations was a benefit of 15.3% compared to a benefit of 16.6% on pre-tax losses for the first quarter of fiscal 2020 and 2019, respectively. The change in the effective income tax rate for the first quarter of fiscal 2020 was primarily driven by the impact of the goodwill impairment charge. The tax provision included $64.0 million of discrete tax benefit and $0.5 million of discrete tax expense, for the first quarter of fiscal 2020 and fiscal 2019, respectively. The benefit for the first quarter of fiscal 2020 is primarily due to a tax benefit of approximately $68.0 million related to the pre-tax goodwill impairment charge, which was partially offset by a discrete tax expense related to stock-based compensation and unrecognized tax positions of approximately $3.0 million and $0.8 million , respectively. Excluding the impact of the discrete items noted above, the effective tax rate benefit on continuing operations would be 16.4% , compared to 18.7% |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Nov. 02, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 14—EARNINGS PER SHARE The following is a reconciliation of the basic and diluted number of shares used in computing earnings per share: 13-Week Period Ended (in thousands, except per share data) November 2, October 27, Basic weighted average shares outstanding 53,213 50,583 Net effect of dilutive stock awards based upon the treasury stock method — — Diluted weighted average shares outstanding 53,213 50,583 Basic per share data: Continuing operations $ (7.67 ) $ (0.42 ) Discontinued operations $ 0.46 $ 0.04 Basic loss per share $ (7.21 ) $ (0.38 ) Diluted per share data: Continuing operations $ (7.67 ) $ (0.42 ) Discontinued operations (1) $ 0.46 $ 0.04 Diluted loss per share $ (7.21 ) $ (0.38 ) Anti-dilutive stock-based awards excluded from the calculation of diluted earnings per share 8,272 839 (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 63 thousand shares and 598 thousand for the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 3 Months Ended |
Nov. 02, 2019 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | NOTE 15—BUSINESS SEGMENTS The Company has two operating segments aggregated under the Wholesale reportable segment: Wholesale and Canada Wholesale. In addition, the Company’s Retail operating segment is a separate reportable segment, which consists of discontinued operations disposal groups. The Wholesale and Canada Wholesale operating segments have similar products and services, customer channels, distribution methods and economic characteristics. The Wholesale reportable segment is engaged in the national distribution of natural, organic, specialty, produce, and conventional grocery and non-food products, and is also a provider of support services in the United States and Canada. The Company has additional operating segments that do not meet the quantitative thresholds for reportable segments and are therefore aggregated under the caption of Other. Other includes a manufacturing division, which engages in the importing, roasting, packaging, and distributing of nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items and confections, the Company’s branded product lines, and the Company’s brokerage business, which markets various products on behalf of food vendors directly and exclusively to the Company’s customers. Other also includes certain corporate operating expenses that are not allocated to operating segments, which include, among other expenses, restructuring, acquisition, and integration related expenses, share-based compensation, and salaries, retainers, and other related expenses of certain officers and all directors. The Company allocates certain corporate capital expenditures and identifiable assets to its business segments and retains certain depreciation expense related to those assets within Other. In the first quarter of fiscal 2020, the Company changed its measurement of segment profit, which resulted in additional Supervalu-related corporate expenses that were previously included in Other now being attributed to the Wholesale business. The change is immaterial with respect to the results presented in the first quarter of fiscal 2019, given the five day time period between the acquisition date and the end of the first quarter of fiscal 2019. Non-operating expenses that are not allocated to the operating segments are under the caption of Unallocated (Income)/Expenses. (in thousands) Wholesale Other Eliminations Unallocated (Income)/Expenses Consolidated 13-Week Period Ended November 2, 2019: Net sales (1) $ 6,007,095 $ 63,749 $ (51,259 ) $ — $ 6,019,585 Goodwill and asset impairment charges 423,703 1,702 — — 425,405 Restructuring, acquisition and integration related expenses 7,952 6,298 — — 14,250 Operating loss (416,229 ) (29,310 ) 1,512 — (444,027 ) Total other expense, net — — — 38,088 38,088 Loss from continuing operations before income taxes (482,115 ) Depreciation and amortization 68,199 6,942 — — 75,141 Capital expenditures 40,129 993 — — 41,122 Total assets of continuing operations 6,996,425 513,174 (45,855 ) — 7,463,744 13-Week Period Ended October 27, 2018: Net sales (2) $ 2,856,966 $ 48,754 $ (37,564 ) $ — $ 2,868,156 Restructuring, acquisition and integration related expenses — 68,004 — — 68,004 Operating loss 60,237 (78,329 ) (746 ) — (18,838 ) Total other expense, net — — — 6,778 6,778 Loss from continuing operations before income taxes (25,616 ) Depreciation and amortization 23,517 1,276 — — 24,793 Capital expenditures 15,737 644 — — 16,381 Total assets of continuing operations 7,164,623 847,897 (39,013 ) — 7,973,507 (1) For the first quarter of fiscal 2020 , the Company recorded $244.6 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. (2) For the first quarter of fiscal 2019 , the Company recorded $21.8 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. |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS | 3 Months Ended |
Nov. 02, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENT | NOTE 16—COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS Guarantees and Contingent Liabilities The Company has outstanding guarantees related to certain leases, fixture financing loans and other debt obligations of various retailers as of November 2, 2019 . These guarantees were generally made to support the business growth of wholesale customers. The guarantees are generally for the entire terms of the leases, fixture financing loans or other debt obligations with remaining terms that range from less than one year to eleven years , with a weighted average remaining term of approximately seven years . For each guarantee issued, if the wholesale customer or other third-party defaults on a payment, the Company would be required to make payments under its guarantee. Generally, the guarantees are secured by indemnification agreements or personal guarantees of the primary obligor/retailer. The Company reviews performance risk related to its guarantee obligations based on internal measures of credit performance. As of November 2, 2019 , the maximum amount of undiscounted payments the Company would be required to make in the event of default of all guarantees was $35.1 million ( $24.0 million on a discounted basis). Based on the indemnification agreements, personal guarantees and results of the reviews of performance risk, the Company believes the likelihood that it will be required to assume a material amount of these obligations is remote. Accordingly, no amount has been recorded in the Condensed Consolidated Balance Sheets for these contingent obligations under the Company’s guarantee arrangements as the fair value has been determined to be de minimis. The Company is contingently liable for leases that have been assigned to various third parties in connection with facility closings and dispositions. The Company could be required to satisfy the obligations under the leases if any of the assignees are unable to fulfill their lease obligations. Due to the wide distribution of the Company’s lease assignments among third parties, and various other remedies available, the Company believes the likelihood that it will be required to assume a material amount of these obligations is remote. For leases that have been assigned, the Company has recorded the associated right of use operating lease assets and obligations within the Condensed Consolidated Balance Sheets . No associated lessor receivables are reflected on the Condensed Consolidated Balance Sheets ; however, within Note 11—Leases expected cash flows from lease receipts reflecting the assignees payments to the landlord are reflected as lease receipts within the future maturity table, along with the Wholesale customers future lease receipts. For the Company’s lease guarantee arrangements no amounts have been recorded within the Condensed Consolidated Balance Sheets as the fair value has been determined to be de minimis. The Company is a party to a variety of contractual agreements under which it may be obligated to indemnify the other party for certain matters in the ordinary course of business, which indemnities may be secured by operation of law or otherwise. These agreements primarily relate to the Company’s commercial contracts, service agreements, contracts entered into for the purchase and sale of stock or assets, operating leases and other real estate contracts, financial agreements, agreements to provide services to the Company and agreements to indemnify officers, directors and employees in the performance of their work. While the Company’s aggregate indemnification obligations could result in a material liability, the Company is not aware of any matters that are expected to result in a material liability. No amount has been recorded in the Condensed Consolidated Balance Sheets for these contingent obligations as the fair value has been determined to be de minimis. In connection with Supervalu’s sale of New Albertson’s, Inc. (“NAI”) on March 21, 2013, the Company remains contingently liable with respect to certain self-insurance commitments and other guarantees as a result of parental guarantees issued by Supervalu with respect to the obligations of NAI that were incurred while NAI was Supervalu’s subsidiary. Based on the expected settlement of the self-insurance claims that underlie the Company’s commitments, the Company believes that such contingent liabilities will continue to decline. Subsequent to the sale of NAI, NAI collateralized most of these obligations with letters of credit and surety bonds to numerous state governmental authorities. Because NAI remains a primary obligor on these self-insurance and other obligations and has collateralized most of the self-insurance obligations for which the Company remains contingently liable, the Company believes that the likelihood that it will be required to assume a material amount of these obligations is remote. Accordingly, no amount has been recorded in the Condensed Consolidated Balance Sheets for these guarantees, as the fair value has been determined to be de minimis. Agreements with Save-A-Lot and Onex The Agreement and Plan of Merger pursuant to which Supervalu sold the Save-A-Lot business in 2016 (the “SAL Merger Agreement”) contains customary indemnification obligations of each party with respect to breaches of their respective representations, warranties and covenants, and certain other specified matters, on the terms and subject to the limitations set forth in the SAL Merger Agreement. Similarly, Supervalu entered into a Separation Agreement (the “Separation Agreement”) with Moran Foods, LLC d/b/a Save-A-Lot (“Moran Foods”), which contains indemnification obligations and covenants related to the separation of the assets and liabilities of the Save-A-Lot business from the Company. The Company also entered into a Services Agreement with Moran Foods (the “Services Agreement”), pursuant to which the Company is providing Save-A-Lot various technical, human resources, finance and other operational services for a term of five years , subject to termination provisions that can be exercised by each party. The initial annual base charge under the Services Agreement is $30 million , subject to adjustments. The Services Agreement generally requires each party to indemnify the other party against third-party claims arising out of the performance of or the provision or receipt of services under the Services Agreement. While the Company’s aggregate indemnification obligations to Save-A-Lot and Onex could result in a material liability, the Company is not aware of any matters that are expected to result in a material liability. The Company has recorded the fair value of the guarantee in the Condensed Consolidated Balance Sheets within Other long-term liabilities. Other Contractual Commitments In the ordinary course of business, the Company enters into supply contracts to purchase products for resale, and service contracts for fixed asset and information technology systems. These contracts typically include either volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations. As of November 2, 2019 , the Company had approximately $247.0 million of non-cancelable future purchase obligations. Legal Proceedings In December 2008, a class action complaint was filed in the United States District Court for the Western District of Wisconsin against Supervalu alleging that a 2003 transaction between Supervalu and C&S Wholesale Grocers, Inc. (“C&S”) was a conspiracy to restrain trade and allocate markets. In the 2003 transaction, Supervalu purchased certain assets of the Fleming Corporation as part of Fleming Corporation’s bankruptcy proceedings and sold certain of Supervalu’s assets to C&S that were located in New England. Three other retailers filed similar complaints in other jurisdictions and the cases were consolidated in the United States District Court in Minnesota. The complaints alleged that the conspiracy was concealed and continued through the use of non-compete and non-solicitation agreements and the closing down of the distribution facilities that Supervalu and C&S purchased from each other. Plaintiffs were divided into Midwest plaintiffs and a New England plaintiff and are seeking monetary damages, injunctive relief and attorney’s fees. As previously disclosed, the Company settled with the Midwest plaintiffs in November 2017. The New England plaintiff was not a party to the settlement and is pursuing its individual claims and potential class action claims against Supervalu, which at this time are determined as remote. On February 15, 2018, Supervalu filed a summary judgment and Daubert motion and the New England plaintiff filed a motion for class certification and on July 27, 2018, the District Court granted Supervalu’s motions. The New England plaintiff appealed to the 8th Circuit on August 15, 2018. Briefing on the appeal is complete and the hearing occurred on October 15, 2019. The Company is awaiting the 8th Circuit’s decision. The Company is one of dozens of companies that have been named in various lawsuits alleging that drug manufacturers, retailers and distributors contributed to the national opioid epidemic. Currently, UNFI, primarily through its subsidiary, Advantage Logistics, is named in approximately 38 suits pending in the United States District Court for the Northern District of Ohio where over 1,800 cases have been consolidated as Multi-District Litigation (“MDL”). In accordance with the Stock Purchase Agreement dated January 10, 2013, between New Albertson’s Inc. and the Company (the “Stock Purchase Agreement”), New Albertson’s Inc. is defending and indemnifying UNFI in a majority of the cases under a reservation of rights as those cases relate to New Albertson’s pharmacies. In one of the MDL cases, MDL No. 2804 filed by The Blackfeet Tribe of the Blackfeet Indian Reservation, all defendants were ordered to Answer the Complaint, which UNFI did on July 26, 2019. To date, no discovery has been conducted against UNFI in any of the actions. UNFI is vigorously defending these matters, which it believes are without merit. UNFI is currently subject to a qui tam action alleging violations of the False Claims Act (“FCA”). In United States ex rel. Schutte and Yarberry v. Supervalu, New Albertson’s, Inc., et al, which is pending in the U.S. District Court for the Central District of Illinois, the relators allege that defendants overcharged government healthcare programs by not providing the government, as a part of usual and customary prices, the benefit of discounts given to customers purchasing prescription medication who requested that defendants match competitor prices. The complaint was originally filed under seal and amended on November 30, 2015. The government previously investigated the relators' allegations and declined to intervene. Violations of the FCA are subject to treble damages and penalties of up to a specified dollar amount per false claim. Relators elected to pursue the case on their own and have alleged FCA damages against Supervalu and New Albertsons in excess of $100 million , not including trebling and statutory penalties. For the majority of the relevant period Supervalu and New Albertson’s operated as a combined company. In March 2013, Supervalu divested New Albertson’s (and related assets) pursuant the Stock Purchase Agreement. Based on the claims that are currently pending and the Stock Purchase Agreement, Supervalu’s share of a potential award (at the currently claimed value by relators) would be approximately $24 million , not including trebling and statutory penalties. Both sides moved for summary judgment. Discovery is complete, and trial will be set after the Court rules on the pending motions. On August 5, 2019, the Court granted one of relators’ summary judgment motions finding that defendants’ lower matched prices are the usual and customary prices and that Medicare Part D and Medicaid were entitled to those prices. There are additional pending motions for summary judgment filed by defendants and relators that await rulings by the Court, including on key FCA elements of materiality and knowledge. On August 30, 2019, defendants filed a motion with the District Court seeking certification of the summary judgment decision for interlocutory appeal and on November 7, 2019, the District Court denied the motion. UNFI is vigorously defending this matter and believes that it should be successful on the merits, however, in light of the most recent summary judgment decision, the Company now believes the risk of loss is reasonably possible. However, management is unable to estimate a range of reasonably possible loss because there are several disputed factual and legal matters that have not yet been resolved, including fundamentally whether the FCA violations actually occurred (which defendants still strongly believe and continue to argue did not), and the appropriate methodology of determining potential damages, if any. In November 2018, a putative nationwide class action was filed in Rhode Island state court, which the Company removed to U.S. District Court for the District of Rhode Island. In North Country Store v. United Natural Foods, Inc., plaintiff asserts that the Company made false representations about the nature of fuel surcharges charged to customers and asserts claims for alleged violations of Connecticut’s Unfair Trade Practices Act, breach of contract, unjust enrichment and breach of the covenant of good faith and fair dealing arising out of the Company’s fuel surcharge practices. On March 5, 2019, the Company answered the complaint denying the allegations. At a court-ordered mediation on October 15, 2019, the Company reached an agreed resolution, which was immaterial in amount, to avoid costs and uncertainty of litigation. The potential settlement must go through the Court approval and notice process, which will take several months. From time to time, the Company receives notice of claims or potential claims, becomes involved in litigation, alternative dispute resolution such as arbitration, or other legal and regulatory proceedings that arise in the ordinary course of its business, including investigations and claims regarding employment law; pension plans; labor union disputes, including unfair labor practices, such as claims for back-pay it the context of labor contract negotiations; supplier, customer and service provider contract terms and claims including matters related to supplier or customer insolvency or general inability to pay obligations as they become due; real estate and environmental matters, including claims in connection with the Company’s ownership and lease of a substantial amount of real property, both neutral and warehouse properties; and antitrust. Other than as described above, there are no pending material legal proceedings to which the Company is a party or to which its property is subject. Predicting the outcomes of claims and litigation and estimating related costs and exposures involves substantial uncertainties that could cause actual outcomes, costs and exposures to vary materially from current expectations. The Company regularly monitors its exposure to the loss contingencies associated with these matters and may from time to time change its predictions with respect to outcomes and estimates with respect to related costs and exposures. As of November 2, 2019 , no material accrued obligations, individually or in the aggregate, have been recorded for these legal proceedings. Although management believes it has made appropriate assessments of potential and contingent loss in each of these cases based on current facts and circumstances, and application of prevailing legal principles, there can be no assurance that material differences in actual outcomes from management’s current assessments, costs and exposures relative to current predictions and estimates, or material changes in such predictions or estimates will not occur. The occurrence of any of the foregoing, could have a material adverse effect on the Company’s financial condition, results of operations or cash flows. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Nov. 02, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 17—DISCONTINUED OPERATIONS In conjunction with the Supervalu acquisition, the Company announced its plan to sell the remaining acquired retail operations of Supervalu (“Retail”). The results of operations, financial position and cash flows of Cub Foods, Hornbacher’s, Shoppers and Shop ‘n Save St. Louis and Shop ‘n Save East retail operations have been presented as discontinued operations and the related assets and liabilities have been classified as held-for-sale. Subsequent to the end of the first quarter of fiscal 2020, the Company announced that it had entered into agreements to sell 13 Shopper’s stores, and decided to close 4 locations. The Company expects to incur approximately $32.0 million to $42.0 million in pre-tax aggregate costs and charges related to these transactions, consisting of $13.0 million to $16.0 million of estimated severance and employee-related costs, $11.0 million to $14.0 million of estimated operating losses during the period of wind-down, primarily related to inventory, $2.0 million to $3.0 million of estimated transaction costs, and $6.0 million to $9.0 million of estimated non-cash asset impairment charges, primarily associated with real estate assets and leasehold improvements. The Company continues to hold the remaining Shoppers stores for sale. In the second quarter, the Company will assess the remaining composition of the Shoppers disposal group and review the recoverability of the remaining assets, as the Company continues to hold these locations for sale. In fiscal 2019, the Company completed the sale of seven of its eight Hornbacher's locations, as well as Hornbacher’s newest store in West Fargo, North Dakota, to Coborn's Inc. (“Coborn’s”). The Company did not incur a gain or loss on the sale of this disposal group. The Hornbacher’s store in Grand Forks, North Dakota was not included in the sale to Coborn’s and has closed pursuant to the terms of the definitive agreement. As part of the sale, Coborn's entered into a long-term agreement for the Company to serve as the primary supplier of the Hornbacher’s locations and expand its existing supply arrangements for other Coborn’s locations. In the fourth quarter of fiscal 2019, the Company completed the sale of the pharmacy prescription files and inventory of the Shoppers disposal group. As of November 2, 2019 , only the Cub Foods and Shoppers disposal groups continue to be classified as operations held for sale as discontinued operations. Operating results of discontinued operations are summarized below: 13-Week Period Ended (In thousands) November 2, 2019 October 27, 2018 (1) Net sales $ 610,821 $ 46,598 Cost of sales 441,071 34,534 Gross profit 169,750 12,064 Operating expenses 136,435 9,494 Restructuring, acquisition and integration related expenses 1,362 — Operating income 31,953 2,570 Other income, net (1,091 ) (249 ) Income from discontinued operations before income taxes 33,044 2,819 Income tax provision 8,090 749 Income from discontinued operations, net of tax $ 24,954 $ 2,070 (1) These results reflect retail operations from the Supervalu acquisition date of October 22, 2018 to October 27, 2018 . The Company recorded $244.6 million and $21.8 million within Net sales from continuing operations attributable to discontinued operations inter-company product purchases in the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively, which the Company expects will continue subsequent to the sale of certain retail banners. These amounts were recorded at gross margin rates consistent with sales to other similar wholesale customers of the acquired Supervalu business. No sales were recorded within continuing operations for retail banners that the Company expects to dispose of without a supply agreement, which were eliminated upon consolidation within continuing operations and amounted to $113.0 million and $9.8 million in the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively. The carrying amounts (in thousands) of major classes of assets and liabilities that were classified as held-for-sale on the Condensed Consolidated Balance Sheets follows in the table below. (In thousands) November 2, 2019 August 3, 2019 Current assets Cash and cash equivalents $ 2,845 $ 2,917 Receivables, net 4,532 1,471 Inventories 139,409 129,142 Other current assets 9,097 10,199 Total current assets of discontinued operations 155,883 143,729 Long-term assets Property and equipment 292,154 301,395 Intangible assets 49,687 48,788 Other assets 2,051 1,882 Total long-term assets of discontinued operations 343,892 352,065 Total assets of discontinued operations $ 499,775 $ 495,794 Current liabilities Accounts payable $ 54,781 $ 61,634 Accrued compensation and benefits 34,574 45,887 Other current liabilities 11,523 14,744 Total current liabilities of discontinued operations 100,878 122,265 Long-term liabilities Other long-term liabilities 1,403 1,923 Total liabilities of discontinued operations 102,281 124,188 Net assets of discontinued operations $ 397,494 $ 371,606 As of November 2, 2019 , the fair value of disposal groups were estimated based on each group’s expected consideration less costs to sell. Stand-alone fair values are estimated based on fair value reviews and indications of value for long-lived assets exclusive of transferring multiemployer pension plan obligations. Based on the impairment reviews in the first quarter of fiscal 2020, no indications of impairment existed. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Nov. 02, 2019 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business United Natural Foods, Inc. and its subsidiaries (the “Company” or “UNFI”) is a leading distributor of natural, organic, specialty, and conventional grocery and non-food products, and provider of support services. The Company sells its products primarily throughout the United States and Canada. |
Fiscal Year | Fiscal Year The Company’s fiscal years end on the Saturday closest to July 31 and contain either 52 or 53 weeks. References to the first quarter of fiscal 2020 and 2019 relate to the 13-week fiscal quarters ended November 2, 2019 and October 27, 2018 , respectively. |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation, with the exception of sales transactions from continuing to discontinued operations for wholesale supply discussed further in Note 3—Revenue Recognition. Unless otherwise indicated, references to the Condensed Consolidated Statements of Operations , the Condensed Consolidated Balance Sheets and the Notes to the Condensed Consolidated Financial Statements exclude all amounts related to discontinued operations. Refer to Note 17—Discontinued Operations for additional information about discontinued operations. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted. In the Company’s opinion, these Condensed Consolidated Financial Statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. However, the results of operations for interim periods may not be indicative of the results that may be expected for a full year. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 3, 2019 (the “Annual Report”). Except as described for lease accounting below, there were no material changes in significant accounting policies from those described in the Company’s Annual Report. |
Use of Estimates | Use of Estimates The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with original maturities of three months or less. The Company’s banking arrangements allow it to fund outstanding checks when presented to the financial institution for payment. The Company funds all intraday bank balance overdrafts during the same business day. Checks outstanding in excess of bank balances create book overdrafts, which are recorded in Accounts payable in the Condensed Consolidated Balance Sheets and are reflected as an operating activity in the Condensed Consolidated Statements of Cash Flows. As of November 2, 2019 and August 3, 2019 , the Company had net book overdrafts of $242.5 million and $236.9 million , respectively. |
Inventories, net | Inventories, Net Inventories are valued at the lower of cost or market. Substantially all of the Company’s inventories consist of finished goods and a substantial portion of its inventories have a last-in, first-out (“LIFO”) reserve applied. Interim LIFO calculations are based on the Company’s estimates of expected year-end inventory levels and costs, as the actual valuation of inventory under the LIFO method is computed at the end of each year based on the inventory levels and costs at that time. If the first-in, first-out method had been used, Inventories, net would have been higher by approximately $30.7 million and $24.1 million at November 2, 2019 and August 3, 2019 , respectively. |
Leases | Leases At the inception or modification of contract, the Company determines whether a lease exists and classifies its leases as an operating or finance lease at commencement. Subsequent to commencement, lease classification is only reassessed upon a change to the expected lease term or contract modification. Finance and operating lease assets represent the Company’s right to use an underlying asset as lessee for the lease term, and lease obligations represent the Company’s obligation to make lease payments arising from the lease. These assets and obligations are recognized at the lease commencement date based on the present value of lease payments, net of incentives, over the lease term. Incremental borrowing rates are estimated based on the Company’s borrowing rate as of the lease commencement date to determine the present value of lease payments, when lease contracts do not provide a readily determinable implicit rate. Incremental borrowing rates are determined by using the yield curve based on the Company’s credit rating adjusted for the Company’s specific debt profile and secured debt risk. The lease asset also reflects any prepaid rent, initial direct costs incurred and lease incentives received. The Company’s lease terms include option extension periods when it is reasonably certain that those options will be exercised. Leases with an initial expected term of 12 months or less are not recorded in the consolidated balance sheets and the related lease expense is recognized on a straight-line basis over the lease term. The Company recognizes contractual obligations and receipts on a gross basis, such that the related lease obligation to the landlord is presented separately from the sublease created by the lease assignment to the assignee. As a result, the Company continues to recognize on its Condensed Consolidated Balance Sheets the operating lease assets and liabilities, and finance lease assets and obligations. The Company records operating lease expense and income using the straight-line method within Operating expenses, and lease income on a straight-line method for leases with its customers within Net sales. Finance lease expense is recognized as amortization expense within Operating expenses, and interest expense within Interest expense, net. For leases with step rent provisions whereby the rental payments increase over the life of the lease, and for leases where the Company receives rent-free periods, the Company recognizes expense and income based on a straight-line basis based on the total minimum lease payments to be made or lease receipts expected to be received over the expected lease term. The Company is generally obligated for property tax, insurance and maintenance expenses related to leased properties, which often represent variable lease expenses. For contractual obligations on properties where the Company remains the primary obligor upon assignment of the lease and does not obtain a release from landlords or retain the equity interests in the legal entities with the related rent contracts, the Company continues to recognize rent expense and rent income within Operating expenses. Operating and finance lease assets are reviewed for impairment based on an ongoing review of circumstances that indicate the assets may no longer be recoverable, such as closures of retail stores, distribution centers and other properties that are no longer being utilized in current operations, and other factors. The Company calculates operating and finance lease impairments using a discount rate to calculate the present value of estimated subtenant rentals that could be reasonably obtained for the property. Lease impairment charges are recorded as a component of Restructuring, acquisition and integration related expenses in the Condensed Consolidated Statements of Operations. The calculation of lease impairment charges requires significant judgments and estimates, including estimated subtenant rentals, discount rates and future cash flows based on the Company’s experience and knowledge of the market in which the property is located, previous efforts to dispose of similar assets and the assessment of existing market conditions. Impairment reserves are reflected as a reduction to Operating lease assets. Refer to Note 11—Leases for additional information. |
Recently Adopted and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued accounting standard update (“ASU”) No. 2016-02, Leases (Topic 842), which provides new comprehensive lease accounting guidance that supersedes previous lease guidance. The objective of this ASU is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. Criteria for distinguishing leases between finance and operating are substantially similar to criteria for distinguishing between capital and operating leases in previous lease guidance. Lease agreements that are 12 months or less are permitted to be excluded from the balance sheet. In addition, this ASU expands the disclosure requirements of lease arrangements. The Company adopted this standard in the first quarter of fiscal 2020 on August 4, 2019, the effective and initial application date, using the additional transition method under ASU 2018-11, which allows for a cumulative effect adjustment within retained earnings in the period of adoption. In addition, the Company elected the “package of three” practical expedients which allows companies to not reassess whether arrangements contain leases, the classification of leases, and the capitalization of initial direct costs. The impact of the adoption to the Company’s Condensed Consolidated Balance Sheets includes the recognition of operating lease liabilities of $1.1 billion with corresponding right-of-use assets of approximately the same amount based on the present value of the remaining lease payments for existing operating leases. The difference between the amount of right-of-use assets and lease liabilities recognized is primarily related to adjustments to prepaid rent, deferred rent, lease intangible assets/liabilities, and closed property reserves. In addition, the adoption of the standard resulted in the derecognition of existing property and equipment for certain properties that did not qualify for sale accounting because the Company was determined to be the accounting owner during the construction phase. In addition, at the transition date the Company is constructing one facility that, when complete, the Company will perform a sale-leaseback assessment. For properties where the Company was deemed the accounting owner during construction for which construction has been completed, the difference between the assets and liabilities derecognized, net of the deferred tax impact, was recorded as an adjustment to retained earnings. Lessor accounting guidance remained largely unchanged from previous guidance. Adoption of this standard did not have a material impact to the Company’s Condensed Consolidated Statements of Operations or Cash Flows. The Company has revised its accounting policies, processes and controls, and systems as applicable to comply with the provisions and disclosure requirements of the standard. The effects of the changes, including those discussed above, made to the Company’s Condensed Consolidated Balance Sheets as of August 3, 2019 for the adoption of the new lease guidance were as follows (in thousands): Balance at August 3, 2019 Adjustments due to adoption of the new lease guidance Adjusted Balance at August 4, 2019 Assets Prepaid expenses and other current assets $ 226,727 $ (14,733 ) $ 211,994 Property and equipment, net 1,639,259 (142,541 ) 1,496,718 Operating lease assets — 1,059,473 1,059,473 Intangible assets, net 1,041,058 (17,671 ) 1,023,387 Deferred income taxes $ 31,087 1,052 $ 32,139 Total increase to assets $ 885,580 Liabilities and Stockholder’s Equity Accrued expense and other current liabilities $ 249,426 $ (7,260 ) $ 242,166 Current portion of operating lease liabilities — 137,741 137,741 Current portion of long-term debt and finance lease liabilities 112,103 (6,936 ) 105,167 Long-term operating lease liabilities — 936,728 936,728 Long-term finance lease obligations 108,208 (37,565 ) 70,643 Other long-term liabilities 393,595 (134,515 ) 259,080 Total stockholder’s equity $ 1,510,934 (2,613 ) $ 1,508,321 Total increase to liabilities and stockholder’s equity $ 885,580 In October 2018, the FASB issued authoritative guidance under ASU No. 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. This ASU adds the Overnight Index Swap (OIS) rate based on Secured Overnight Financing Rate (SOFR) as a benchmark interest rate for hedge accounting purposes. This ASU is effective for public companies with interim and fiscal years beginning after December 15, 2018, which for the Company is the first quarter of fiscal year 2020. The Company adopted this standard in the first quarter of fiscal 2020 with no impact to the Company’s consolidated financial statements as LIBOR is still being used as benchmark interest rate. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. This ASU is effective for all entities for annual and interim periods in fiscal years beginning after December 15, 2018. The Company adopted this ASU in the first quarter of fiscal 2020. The adoption of this ASU had no impact to Accumulated other comprehensive loss or Retained earnings. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326 Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 . This ASU clarifies the accounting treatment for the measurement of credit losses under ASC 236 and provides further clarification on previously issued updates including ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities and ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. Since the Company adopted ASU 2017-12 in the fourth quarter of fiscal 2018, the amendments in ASU 2019-04 related to clarifications on Accounting for Hedging Activities have been adopted by the Company in the first quarter of fiscal 2020. The remaining amendments within ASU 2019-04 are effective for fiscal years beginning after December 15, 2019, which for the Company is the first quarter of fiscal 2021. Early adoption is permitted. Th e Company adopted this standard in the first quarter of fiscal 2020 with no impact to Accumulated other comprehensive loss or Retained earnings for fiscal 2020, as the Company did not have separately measured ineffectiveness related to its cash flow hedges. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. ASU 2018-05 requires implementation costs incurred by customers in cloud computing arrangements (i.e. hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the noncancellable term of the cloud computing arrangements plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The Company is required to adopt this new guidance in the first quarter of fiscal 2021. The Company has outstanding cloud computing arrangements and continues to incur costs that it believes would be required to be capitalized under ASU 2018-05. The Company is currently reviewing the provisions of the new standard and evaluating its impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General: Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 eliminates requirements for certain disclosures and requires additional disclosures under defined benefit pension plans and other postretirement plans. The Company is required to adopt this guidance in the first quarter of fiscal 2021. The Company is currently reviewing the provisions of the new standard and evaluating its impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace the current “incurred loss” model and generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except that the losses will be recognized as an allowance. The Company is required to adopt this new guidance in the first quarter of fiscal 2021. The Company is currently reviewing the provisions of the new standard and evaluating its impact on the Company’s consolidated financial statements. |
RECENTLY ADOPTED AND ISSUED A_2
RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The effects of the changes, including those discussed above, made to the Company’s Condensed Consolidated Balance Sheets as of August 3, 2019 for the adoption of the new lease guidance were as follows (in thousands): Balance at August 3, 2019 Adjustments due to adoption of the new lease guidance Adjusted Balance at August 4, 2019 Assets Prepaid expenses and other current assets $ 226,727 $ (14,733 ) $ 211,994 Property and equipment, net 1,639,259 (142,541 ) 1,496,718 Operating lease assets — 1,059,473 1,059,473 Intangible assets, net 1,041,058 (17,671 ) 1,023,387 Deferred income taxes $ 31,087 1,052 $ 32,139 Total increase to assets $ 885,580 Liabilities and Stockholder’s Equity Accrued expense and other current liabilities $ 249,426 $ (7,260 ) $ 242,166 Current portion of operating lease liabilities — 137,741 137,741 Current portion of long-term debt and finance lease liabilities 112,103 (6,936 ) 105,167 Long-term operating lease liabilities — 936,728 936,728 Long-term finance lease obligations 108,208 (37,565 ) 70,643 Other long-term liabilities 393,595 (134,515 ) 259,080 Total stockholder’s equity $ 1,510,934 (2,613 ) $ 1,508,321 Total increase to liabilities and stockholder’s equity $ 885,580 |
REVENUE RECOGNITION REVENUE REC
REVENUE RECOGNITION REVENUE RECOGNITION (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables detail the Company’s revenue recognition for the periods presented by customer channel for each of its segments. The Company does not record its revenues within its wholesale reportable segment for financial reporting purposes by product group, and it is therefore impracticable for it to report them accordingly. Net Sales for the 13-Week Period Ended (in millions) November 2, 2019 Customer Channel Wholesale Other Eliminations Consolidated Supermarkets $ 3,769 $ — $ — $ 3,769 Supernatural 1,111 — — 1,111 Independents 758 — — 758 Other 368 64 (51 ) 381 Total $ 6,006 $ 64 $ (51 ) $ 6,019 Net Sales for the 13-Week Period Ended (in millions) October 27, 2018 (1) Customer Channel Wholesale Other Eliminations Consolidated Supernatural $ 1,027 $ — $ — $ 1,027 Supermarkets 930 — — 930 Independents 667 — — 667 Other 233 49 (38 ) 244 Total $ 2,857 $ 49 $ (38 ) $ 2,868 (1) During the first quarter of fiscal 2020, the presentation of net sales by customer channel was adjusted to reflect reclassification of customer types resulting from management’s determination that a customer serviced by both Supervalu and legacy UNFI should be classified as a Supermarket customer given that customer’s operations. In addition, during the second quarter of fiscal 2019, net sales attributable to Supervalu was incorporated into the Company’s definition of sales by customer channel. There was no impact to the Condensed Consolidated Statements of Operations as a result of the reclassification of customer types. As a result of these adjustments, net sales to the Company’s Supermarkets channel for the first quarter of fiscal 2019 increased approximately $223 million compared to the previously reported amounts, while net sales to the Other channel increased approximately $1 million , with an offsetting elimination of the Supervalu customer channel. |
Schedule of Accounts, Notes, Loans and Financing Receivable | Accounts and notes receivable are as follows: (in thousands) November 2, 2019 August 3, 2019 Customer accounts receivable $ 1,143,836 $ 1,063,167 Allowance for uncollectible receivables (27,812 ) (20,725 ) Other receivables, net 20,900 23,257 Accounts receivable, net $ 1,136,924 $ 1,065,699 Customer notes receivable, net, included within Prepaid expenses and other current assets $ 11,235 $ 11,912 Long-term notes receivable, net, included within Other assets $ 25,683 $ 34,408 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the final consideration, fair value of assets acquired and liabilities assumed, and the resulting goodwill. (in thousands) Final Acquisition Date Fair Values 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 Fair value of assets acquired and liabilities assumed: Cash and cash equivalents $ 25,102 Accounts receivable 552,381 Inventories 1,156,781 Prepaid expenses and other current assets 112,449 Current assets of discontinued operations 196,848 Property, plant and equipment 1,207,115 Goodwill 376,181 Intangible assets 918,103 Other assets 77,008 Long-term assets of discontinued operations 433,839 Accounts payable (974,252 ) Current portion of long-term debt and finance lease obligations (579,565 ) Other current liabilities (331,693 ) Current liabilities of discontinued operations (148,763 ) Long-term debt (34,355 ) Long-term finance lease obligations (103,289 ) Pension and other postretirement benefit obligations (234,324 ) Deferred income taxes (18,254 ) Other long-term liabilities (308,516 ) 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. |
Schedule of Finite-Lived Intangible Assets Acquired | The following table summarizes the identifiable intangible assets and liabilities recorded based on final valuations. The identifiable intangible assets are expected to be amortized on a straight-line basis over the estimated useful lives indicated. The fair value of identifiable intangible assets acquired was determined using income approaches. Significant assumptions utilized in the income approach were based on Company-specific information and projections, which are not observable in the market and are thus considered Level 3 measurements as defined by authoritative guidance. Final Acquisition Date Fair Values (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 |
Schedule of Unaudited Pro Forma Information | The following table presents unaudited supplemental pro forma consolidated Net sales and Net loss from continuing operations based on the Company’s historical reporting periods as if the acquisition of Supervalu had occurred as of July 30, 2017: 13-Week Period Ended (in thousands, except per share data) October 27, 2018 (1) October 28, 2017 (2) Net sales $ 5,984,970 $ 5,910,484 Net loss from continuing operations $ (47,893 ) $ (53,367 ) Basic net loss continuing operations per share $ (0.95 ) $ (1.05 ) Diluted net loss from continuing operations per share $ (0.95 ) $ (1.05 ) (1) Includes 12 weeks of pro forma Supervalu results for the period ended September 8, 2018. (2) Includes 13 weeks of pro forma Supervalu results for the period ended September 17, 2017 and 13 weeks of pro forma Associated Grocers of Florida, Inc. results for the period ended August 5, 2017, which was acquired by Supervalu on December 8, 2017. |
RESTRUCTURING, ACQUISITION, A_2
RESTRUCTURING, ACQUISITION, AND INTEGRATION RELATED EXPENSES Restructuring, Acquisition, and Integration Related Expenses (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Restructuring, acquisition and integration related expenses incurred were as follows: 13-Week Period Ended (in thousands) November 2, 2019 October 27, 2018 2019 SUPERVALU INC. restructuring expenses $ 1,837 $ 36,069 Acquisition and integration costs 9,294 31,935 Closed property charges and costs 3,119 — Total $ 14,250 $ 68,004 |
Schedule of Restructuring Reserve by Type of Cost | The following is a summary of the current period activity within restructuring reserves by program included in the Condensed Consolidated Balance Sheets , primarily within Accrued compensation and benefits for severance and other employee separation costs and related tax payments. (in thousands) 2019 SUPERVALU INC. 2018 Earth Origins Market 2017 Cost Saving and Efficiency Initiatives Total Balances at August 3, 2019 $ 11,857 $ 383 701 $ 12,941 Restructuring program charge 1,837 — — 1,837 Cash payments (7,078 ) — — (7,078 ) Balances at November 2, 2019 $ 6,616 $ 383 $ 701 $ 7,700 Cumulative program charges incurred from inception to date $ 76,251 $ 2,219 $ 6,864 $ 85,334 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Goodwill and Intangible Assets [Abstract] | |
Carrying Value of Goodwill | Changes in the carrying value of Goodwill by reportable segment that have goodwill consisted of the following: (in thousands) Wholesale Other Total Goodwill as of August 3, 2019 $ 432,103 (1) $ 10,153 (2) $ 442,256 Goodwill adjustment for prior fiscal year business combinations 1,424 — 1,424 Impairment charges (423,712 ) (293 ) (424,005 ) Change in foreign exchange rates 116 — 116 Goodwill as of November 2, 2019 $ 9,931 (1) $ 9,860 (2) $ 19,791 (1) Amounts are net of accumulated goodwill impairment charges of $292.8 million and $716.5 million as of August 3, 2019 and November 2, 2019 , respectively. (2) Amounts are net of accumulated goodwill impairment charges of $9.3 million and $9.6 million as of August 3, 2019 and November 2, 2019 . |
Identifiable Intangible Assets | Identifiable intangible assets consisted of the following: November 2, 2019 August 3, 2019 (in thousands) Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Amortizing intangible assets: Customer relationships $ 1,008,103 $ 127,906 $ 880,197 $ 1,007,089 $ 111,940 $ 895,149 Non-compete agreements 12,900 7,571 5,329 12,900 6,237 6,663 Operating lease intangibles 11,748 2,451 9,297 32,103 2,209 29,894 Trademarks and tradenames 67,700 18,750 48,950 67,700 14,161 53,539 Total amortizing intangible assets 1,100,451 156,678 943,773 1,119,792 134,547 985,245 Indefinite lived intangible assets: Trademarks and tradenames 55,813 — 55,813 55,813 — 55,813 Intangible assets, net $ 1,156,264 $ 156,678 $ 999,586 $ 1,175,605 $ 134,547 $ 1,041,058 |
Estimated Future Amortization Expense | The estimated future amortization expense for each of the next five fiscal years and thereafter on definite lived intangible assets existing as of November 2, 2019 is shown below: Fiscal Year: (In thousands) Remaining fiscal 2020 $ 64,180 2021 71,510 2022 65,893 2023 65,842 2024 66,054 2025 and thereafter 610,294 $ 943,773 |
FAIR VALUE MEASUREMENTS FAIR _2
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table provides the fair value hierarchy for financial assets and liabilities measured on a recurring basis: Fair Value at November 2, 2019 (In thousands) Balance Sheet Location Level 1 Level 2 Level 3 Assets: Interest rate swaps designated as hedging instruments Prepaid expenses and other current assets $ — $ 279 $ — Interest rate swaps designated as hedging instruments Other assets $ — $ 89 $ — Mutual funds Other assets $ 1,759 $ — $ — Liabilities: Interest rate swaps designated as hedging instruments Accrued expenses and other current liabilities $ — $ 20,645 $ — Interest rate swaps designated as hedging instruments Other long-term liabilities $ — $ 61,370 $ — Fair Value at August 3, 2019 (in thousands) Balance Sheet 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 Prepaid expenses and other current assets $ — $ 16,360 $ — Interest rate swaps designated as hedging instruments Other long-term liabilities $ — $ 60,737 $ — |
Fair Value, by Balance Sheet Grouping | In the table below, the carrying value of the Company’s long-term debt is net of original issue discounts and debt issuance costs. November 2, 2019 August 3, 2019 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Notes receivable, including current portion $ 36,918 $ 37,218 $ 46,320 $ 45,232 Long-term debt, including current portion $ 3,070,456 $ 2,812,437 $ 2,906,483 $ 2,730,271 |
DERIVATIVES DERIVATIVES (Tables
DERIVATIVES DERIVATIVES (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | Details of outstanding swap contracts as of November 2, 2019 , which are all pay fixed and receive floating, are as follows: 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) 58.5 1.7950 % One-Month LIBOR Monthly August 15, 2022 (4) 39.0 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 (15) 50.0 2.1840 % One-Month LIBOR Monthly $ 2,197.5 (1) This swap was executed on June 7, 2016 with an effective date of June 9, 2016. (2) This swap was executed on June 24, 2016 with an effective date of June 24, 2016. (3) This swap contract was executed on January 23, 2015 with an effective date of August 3, 2015. On March 31, 2015, the Company amended the original contract to reduce the beginning notional principal amount from $140 million to $84 million . The swap contract has an amortizing notional principal amount which is reduced by $1.5 million on a quarterly basis. (4) This swap was executed on March 31, 2015 with an effective date of August 3, 2015. The swap contract has an amortizing notional principal amount which is reduced by $1.0 million on a quarterly basis. (5) This swap contract was executed on October 26, 2018 with an effective date of October 26, 2018. (6) This swap contract was executed on November 16, 2018 with an effective date of November 16, 2018. (7) This swap contract was executed on November 30, 2018 with an effective date of November 30, 2018. (8) This swap contract was executed on January 11, 2019 with an effective date of January 11, 2019. (9) This swap contract was executed on January 23, 2019 with an effective date of January 23, 2019. (10) This swap contract was executed on January 24, 2019 with an effective date of January 24, 2019. (11) This swap contract was executed on March 18, 2019 with an effective date of March 21, 2019. (12) This swap contract was executed on March 21, 2019 with an effective date of March 21, 2019. (13) This swap contract was executed on April 2, 2019 with an effective date of April 2, 2019. (14) This swap contract was executed on April 2, 2019 with an effective date of June 10, 2019. (15) This swap contract was executed on April 2, 2019 with an effective date of June 28, 2019. |
Schedule of Interest Rate Derivatives | The location and amount of gains or losses recognized in the Condensed Consolidated Statements of Operations for interest rate swap contracts for each of the periods, presented on a pretax basis, are as follows: 13-Week Period Ended November 2, 2019 October 27, 2018 (In thousands) Interest Expense, net Total amounts of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded $ 49,518 $ 7,525 Gain or (loss) on cash flow hedging relationships: Gain or (loss) reclassified from comprehensive income into income $ (2,370 ) $ 551 Gain or (loss) on interest rate swap contracts not designated as hedging instruments: Gain or (loss) recognized as interest expense $ — $ (88 ) |
LONG-TERM DEBT LONG-TERM DEBT (
LONG-TERM DEBT LONG-TERM DEBT (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s long-term debt consisted of the following: (in thousands) Average Interest Rate at November 2, 2019 Calendar Maturity Year November 2, August 3, Term Loan Facility 6.04% 2025 $ 1,786,500 $ 1,864,900 ABL Credit Facility 3.14% 2023 1,317,700 1,080,000 Other secured loans 5.20% 2023-2024 58,417 57,649 Debt issuance costs, net (52,374 ) (54,891 ) Original issue discount on debt (39,787 ) (41,175 ) Long-term debt, including current portion 3,070,456 2,906,483 Less: current portion of long-term debt (19,218 ) (87,433 ) Long-term debt $ 3,051,238 $ 2,819,050 |
Schedule of Line of Credit Facilities | The assets included in the Condensed Consolidated Balance Sheets securing the outstanding obligations under the ABL Credit Facility on a first-priority basis, and the unused available credit and fees under the ABL Credit Facility, were as follows: Assets securing the ABL Credit Facility (in thousands) (1) : November 2, 2019 Certain inventory assets included in Inventories and Current assets of discontinued operations $ 2,447,555 Certain receivables included in Accounts receivables, net and Current assets of discontinued operations $ 1,077,978 (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 Condensed Consolidated Balance Sheets as of November 2, 2019 . Unused available credit and fees under the ABL Credit Facility (in thousands, except percentages): November 2, 2019 Outstanding letters of credit $ 77,413 Letter of credit fees 1.375 % Unused available credit $ 695,704 Unused facility fees 0.25 % |
COMPREHENSIVE (LOSS) INCOME A_2
COMPREHENSIVE (LOSS) INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS COMPREHENSIVE (LOSS) INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in Accumulated other comprehensive loss by component for 13-week period ended November 2, 2019 are as follows: (in thousands) Benefit Plans Foreign Currency Swap Agreements Total Accumulated other comprehensive loss at August 3, 2019, net of tax $ (32,458 ) $ (20,082 ) $ (56,413 ) $ (108,953 ) Other comprehensive loss before reclassifications — 371 (1,739 ) (1,368 ) Amortization of amounts included in net periodic benefit income 572 — — 572 Amortization of cash flow hedge — — (1,942 ) (1,942 ) Net current period Other comprehensive loss 572 371 (3,681 ) (2,738 ) Accumulated other comprehensive loss at November 2, 2019, net of tax $ (31,886 ) $ (19,711 ) $ (60,094 ) $ (111,691 ) Changes in Accumulated other comprehensive loss by component for 13-week period ended October 27, 2018 are as follows: (in thousands) Foreign Currency Swap Agreements Total Accumulated other comprehensive (loss) income at July 28, 2018, net of tax $ (19,053 ) $ 4,874 $ (14,179 ) Other comprehensive loss before reclassifications (672 ) (245 ) (917 ) Amortization of cash flow hedge — 441 441 Net current period Other comprehensive loss (672 ) 196 (476 ) Accumulated other comprehensive (loss) income at October 27, 2018, net of tax $ (19,725 ) $ 5,070 $ (14,655 ) |
Reclassification out of Accumulated Other Comprehensive Income | Items reclassified out of Accumulated other comprehensive loss had the following impact on the Condensed Consolidated Statements of Operations : 13-Week Period Ended Affected Line Item on the Condensed Consolidated Statements of Operations (in thousands) November 2, October 27, Pension and postretirement benefit plan obligations: Amortization of amounts included in net periodic benefit income (1) $ 774 $ — Net periodic benefit income, excluding service cost Income tax (benefit) expense (202 ) — Benefit for income taxes Total reclassifications, net of tax $ 572 $ — Swap agreements: Reclassification of cash flow hedge $ (2,370 ) $ 551 Interest expense, net Income tax (benefit) expense (428 ) 110 Benefit for income taxes Total reclassifications, net of tax $ (1,942 ) $ 441 (1) Amortization of amounts included in net periodic benefit income include amortization of prior service benefit and amortization of net actuarial loss as reflected in Note 12—Benefit Plans. |
LEASES LEASES (Tables)
LEASES LEASES (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Leases [Abstract] | |
Schedule of Leases, Financial Statement Presentation | Lease assets and liabilities are as follows (in thousands): Lease Type Balance Sheet Location November 2, 2019 Operating lease assets Operating lease assets $ 1,051,128 Finance lease assets Property and equipment, net 68,429 Total lease assets $ 1,119,557 Operating liabilities Current portion of operating lease liabilities $ 127,327 Finance liabilities Current portion of long-term debt and finance lease liabilities 15,239 Operating liabilities Long-term operating lease liabilities 949,978 Finance liabilities Long-term finance lease liabilities 68,682 Total lease liabilities $ 1,161,226 |
Schedule of Lease Costs | The Company's lease cost under ASC 842 for the 13-week period ended November 2, 2019 is as follows: (in thousands) Statement of Operations Location 13-Week Period Ended November 2, 2019 Operating lease cost Operating expenses $ 67,141 Short-term lease cost Operating expenses 10,514 Variable lease cost Operating expenses 34,956 Sublease income Operating expenses (10,940 ) Sublease income Net sales (4,835 ) Net operating lease cost (1) 96,836 Amortization of leased assets Operating expenses 4,703 Interest on lease liabilities Interest expense, net 2,118 Finance lease cost 6,821 Total net lease cost $ 103,657 (1) Rent expense as presented here includes $12.5 million 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 the Company expects to remain primarily obligated under these leases The following tables provide other information required by ASC 842: Lease Term and Discount Rate November 2, 2019 Weighted-average remaining lease term (years) Operating leases 11.1 years Finance leases 5.7 years Weighted-average discount rate Operating leases 10.7 % Finance leases 9.9 % Other Information 13-Week Period Ended (in thousands) November 2, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases 55,750 Operating cash flows from finance leases 1,880 Financing cash flows from finance leases 3,074 Leased assets obtained in exchange for new finance lease liabilities — Leased assets obtained in exchange for new operating lease liabilities 37,020 |
Future Minimum Lease Payments and Lease Receipts (New Accounting Standard) | As of November 2, 2019 , these lease obligations and lease receipts consisted of the following (in thousands): Maturity of Lease Liabilities and Lease Receipts Lease Liabilities Lease Receipts Net Lease Obligations Fiscal Year Operating Leases (1) Finance Leases (2) Operating Leases Finance Leases Operating Leases Finance Leases Remaining fiscal 2020 $ 187,380 $ 18,874 $ (43,449 ) $ (161 ) $ 143,931 $ 18,713 2021 209,552 19,252 (46,516 ) — 163,036 19,252 2022 198,343 17,760 (41,562 ) — 156,781 17,760 2023 171,756 16,653 (31,360 ) — 140,396 16,653 2024 145,338 15,702 (24,236 ) — 121,102 15,702 Thereafter 1,050,386 21,526 (55,542 ) — 994,844 21,526 Total undiscounted lease liabilities and receipts $ 1,962,755 $ 109,767 $ (242,665 ) $ (161 ) $ 1,720,090 $ 109,606 Less interest (3) (885,450 ) (25,846 ) Present value of lease liabilities 1,077,305 83,921 Less current lease liabilities (127,327 ) (15,239 ) Long-term lease liabilities $ 949,978 $ 68,682 (1) Operating lease payments include $14.7 million related to extension options that are reasonably certain of being exercised and exclude $48.5 million of legally binding minimum lease payments for leases signed but not yet commenced. (2) Finance lease payments include $0.0 million related to extension options that are reasonably certain of being exercised and exclude $0.0 million of legally binding minimum lease payments for leases signed but not yet commenced. (3) Calculated using the interest rate for each lease. |
Future Minimum Lease Payments and Lease Receipts (Prior Accounting Standard) | As of August 3, 2019, future minimum lease payments to be made by the Company or certain third parties in the case of assigned leases for noncancellable operating leases and finance leases, which have not been reduced for future minimum subtenant rentals under certain operating subleases, including assignments, consisted of the following amounts (in thousands): 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 |
BENEFIT PLANS BENEFIT PLANS (Ta
BENEFIT PLANS BENEFIT PLANS (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Retirement Benefits [Abstract] | |
Net Periodic Benefit Cost (Income) Recognized in Other Comprehensive Income (Loss) | Net periodic benefit (income) cost and contributions to defined benefit pension and other post-retirement benefit plans consisted of the following: First Quarter Ended Pension Benefits Other Postretirement Benefits (in thousands) November 2, 2019 October 27, 2018 November 2, 2019 October 27, 2018 Net Periodic Benefit (Income) Cost Service cost $ — $ — $ 14 $ 4 Interest cost 16,690 1,847 236 38 Expected return on plan assets (27,482 ) (2,724 ) (54 ) (5 ) Amortization of net actuarial loss (gain) 3 — (777 ) — Net periodic benefit (income) cost $ (10,789 ) $ (877 ) $ (581 ) $ 37 Contributions to benefit plans $ (4,100 ) $ (37 ) $ (100 ) $ (9 ) |
EARNINGS PER SHARE EARNINGS PER
EARNINGS PER SHARE EARNINGS PER SHARE (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | The following is a reconciliation of the basic and diluted number of shares used in computing earnings per share: 13-Week Period Ended (in thousands, except per share data) November 2, October 27, Basic weighted average shares outstanding 53,213 50,583 Net effect of dilutive stock awards based upon the treasury stock method — — Diluted weighted average shares outstanding 53,213 50,583 Basic per share data: Continuing operations $ (7.67 ) $ (0.42 ) Discontinued operations $ 0.46 $ 0.04 Basic loss per share $ (7.21 ) $ (0.38 ) Diluted per share data: Continuing operations $ (7.67 ) $ (0.42 ) Discontinued operations (1) $ 0.46 $ 0.04 Diluted loss per share $ (7.21 ) $ (0.38 ) Anti-dilutive stock-based awards excluded from the calculation of diluted earnings per share 8,272 839 (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 63 thousand shares and 598 thousand for the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively. |
BUSINESS SEGMENTS BUSINESS SEGM
BUSINESS SEGMENTS BUSINESS SEGMENTS (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Segment Reporting [Abstract] | |
Schedule of business segment information | (in thousands) Wholesale Other Eliminations Unallocated (Income)/Expenses Consolidated 13-Week Period Ended November 2, 2019: Net sales (1) $ 6,007,095 $ 63,749 $ (51,259 ) $ — $ 6,019,585 Goodwill and asset impairment charges 423,703 1,702 — — 425,405 Restructuring, acquisition and integration related expenses 7,952 6,298 — — 14,250 Operating loss (416,229 ) (29,310 ) 1,512 — (444,027 ) Total other expense, net — — — 38,088 38,088 Loss from continuing operations before income taxes (482,115 ) Depreciation and amortization 68,199 6,942 — — 75,141 Capital expenditures 40,129 993 — — 41,122 Total assets of continuing operations 6,996,425 513,174 (45,855 ) — 7,463,744 13-Week Period Ended October 27, 2018: Net sales (2) $ 2,856,966 $ 48,754 $ (37,564 ) $ — $ 2,868,156 Restructuring, acquisition and integration related expenses — 68,004 — — 68,004 Operating loss 60,237 (78,329 ) (746 ) — (18,838 ) Total other expense, net — — — 6,778 6,778 Loss from continuing operations before income taxes (25,616 ) Depreciation and amortization 23,517 1,276 — — 24,793 Capital expenditures 15,737 644 — — 16,381 Total assets of continuing operations 7,164,623 847,897 (39,013 ) — 7,973,507 (1) For the first quarter of fiscal 2020 , the Company recorded $244.6 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. (2) For the first quarter of fiscal 2019 , the Company recorded $21.8 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. |
DISCONTINUED OPERATIONS DISCONT
DISCONTINUED OPERATIONS DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Nov. 02, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | Operating results of discontinued operations are summarized below: 13-Week Period Ended (In thousands) November 2, 2019 October 27, 2018 (1) Net sales $ 610,821 $ 46,598 Cost of sales 441,071 34,534 Gross profit 169,750 12,064 Operating expenses 136,435 9,494 Restructuring, acquisition and integration related expenses 1,362 — Operating income 31,953 2,570 Other income, net (1,091 ) (249 ) Income from discontinued operations before income taxes 33,044 2,819 Income tax provision 8,090 749 Income from discontinued operations, net of tax $ 24,954 $ 2,070 (1) These results reflect retail operations from the Supervalu acquisition date of October 22, 2018 to October 27, 2018 . The Company recorded $244.6 million and $21.8 million within Net sales from continuing operations attributable to discontinued operations inter-company product purchases in the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively, which the Company expects will continue subsequent to the sale of certain retail banners. These amounts were recorded at gross margin rates consistent with sales to other similar wholesale customers of the acquired Supervalu business. No sales were recorded within continuing operations for retail banners that the Company expects to dispose of without a supply agreement, which were eliminated upon consolidation within continuing operations and amounted to $113.0 million and $9.8 million in the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively. The carrying amounts (in thousands) of major classes of assets and liabilities that were classified as held-for-sale on the Condensed Consolidated Balance Sheets follows in the table below. (In thousands) November 2, 2019 August 3, 2019 Current assets Cash and cash equivalents $ 2,845 $ 2,917 Receivables, net 4,532 1,471 Inventories 139,409 129,142 Other current assets 9,097 10,199 Total current assets of discontinued operations 155,883 143,729 Long-term assets Property and equipment 292,154 301,395 Intangible assets 49,687 48,788 Other assets 2,051 1,882 Total long-term assets of discontinued operations 343,892 352,065 Total assets of discontinued operations $ 499,775 $ 495,794 Current liabilities Accounts payable $ 54,781 $ 61,634 Accrued compensation and benefits 34,574 45,887 Other current liabilities 11,523 14,744 Total current liabilities of discontinued operations 100,878 122,265 Long-term liabilities Other long-term liabilities 1,403 1,923 Total liabilities of discontinued operations 102,281 124,188 Net assets of discontinued operations $ 397,494 $ 371,606 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | Nov. 02, 2019 | Aug. 03, 2019 |
Accounting Policies [Abstract] | ||
Net book overdrafts | $ 242.5 | $ 236.9 |
FIFO Inventory Amount | $ 30.7 | $ 24.1 |
RECENTLY ADOPTED AND ISSUED A_3
RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS - Effect of Lease Adoption on Blaance Sheet Summary (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Aug. 04, 2019 | Aug. 03, 2019 | Oct. 27, 2018 | Jul. 28, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Prepaid expenses and other current assets | $ 192,463 | $ 211,994 | $ 226,727 | ||
Property and equipment, net | 1,494,309 | 1,496,718 | 1,639,259 | ||
Operating lease assets | 1,051,128 | 1,059,473 | 0 | ||
Intangible assets, net | 999,586 | 1,023,387 | 1,041,058 | ||
Deferred income taxes | 98,768 | 32,139 | 31,087 | ||
Total assets | 7,963,519 | 7,180,965 | |||
Accrued expenses and other current liabilities | 246,563 | 242,166 | 249,426 | ||
Current portion of operating lease liabilities | 127,327 | 137,741 | 0 | ||
Current portion of long-term debt and finance lease liabilities | 34,458 | 105,167 | 112,103 | ||
Long-term operating lease liabilities | 949,978 | 936,728 | 0 | ||
Long-term finance lease liabilities | 68,682 | 70,643 | 108,208 | ||
Other long-term liabilities | 267,080 | 259,080 | 393,595 | ||
Total stockholder's equity | 1,123,240 | 1,508,321 | 1,510,934 | $ 1,830,316 | $ 1,845,955 |
Total increase to liabilities and stockholder's equity | 7,963,519 | $ 7,180,965 | |||
Accounting Standards Update 2016-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Prepaid expenses and other current assets | (14,733) | ||||
Property and equipment, net | (142,541) | ||||
Operating lease assets | $ 1,100,000 | 1,059,473 | |||
Intangible assets, net | (17,671) | ||||
Deferred income taxes | 1,052 | ||||
Total assets | 885,580 | ||||
Accrued expenses and other current liabilities | (7,260) | ||||
Current portion of operating lease liabilities | 137,741 | ||||
Current portion of long-term debt and finance lease liabilities | (6,936) | ||||
Long-term operating lease liabilities | 936,728 | ||||
Long-term finance lease liabilities | (37,565) | ||||
Other long-term liabilities | (134,515) | ||||
Total stockholder's equity | (2,613) | ||||
Total increase to liabilities and stockholder's equity | $ 885,580 |
RECENTLY ADOPTED AND ISSUED A_4
RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS - Details (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Aug. 04, 2019 | Aug. 03, 2019 |
Lessor, Lease, Description [Line Items] | |||
Operating Lease, Liability | $ 1,077,305 | ||
Operating lease assets | 1,051,128 | $ 1,059,473 | $ 0 |
Accounting Standards Update 2016-02 | |||
Lessor, Lease, Description [Line Items] | |||
Operating Lease, Liability | 1,100,000 | ||
Operating lease assets | $ 1,100,000 | $ 1,059,473 |
REVENUE RECOGNITION REVENUE R_2
REVENUE RECOGNITION REVENUE RECOGNITION - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Nov. 02, 2019 | Oct. 27, 2018 | |||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 6,019,585 | $ 2,868,156 | ||
Wholesale | Operating Segments | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 6,007,095 | [1] | 2,856,966 | [2] |
Other | Operating Segments | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 63,749 | [1] | 48,754 | |
Supermarkets | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 3,769,000 | 930,000 | [3] | |
Supermarkets | Eliminations | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 0 | 0 | [3] | |
Supermarkets | Wholesale | Operating Segments | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 3,769,000 | 930,000 | [3] | |
Increase to Supermarkets Channel | 223,000 | |||
Supermarkets | Other | Operating Segments | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 0 | 0 | [3] | |
Supernatural | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 1,111,000 | 1,027,000 | ||
Supernatural | Eliminations | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 0 | 0 | ||
Supernatural | Wholesale | Operating Segments | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 1,111,000 | 1,027,000 | ||
Supernatural | Other | Operating Segments | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 0 | 0 | ||
Independents | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 758,000 | 667,000 | [3] | |
Independents | Eliminations | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 0 | 0 | [3] | |
Independents | Wholesale | Operating Segments | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 758,000 | 667,000 | [3] | |
Independents | Other | Operating Segments | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 0 | 0 | [3] | |
Other | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 381,000 | 244,000 | [3] | |
Other | Eliminations | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | (51,000) | (38,000) | [3] | |
Other | Wholesale | Operating Segments | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 368,000 | 233,000 | [3] | |
Other | Other | Operating Segments | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 64,000 | 49,000 | [3] | |
Other Customer Type | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 6,019,000 | 2,868,000 | ||
Other Customer Type | Eliminations | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | (51,000) | (38,000) | ||
Other Customer Type | Wholesale | Operating Segments | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 6,006,000 | 2,857,000 | ||
Increase to Supermarkets Channel | 1,000 | |||
Other Customer Type | Other | Operating Segments | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 64,000 | $ 49,000 | ||
[1] | For the first quarter of fiscal 2020 , the Company recorded $244.6 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. | |||
[2] | For the first quarter of fiscal 2019 , the Company recorded $21.8 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. | |||
[3] | compared to the previously reported amounts, while net sales to the Other channel increased approximately $1 million |
REVENUE RECOGNITION REVENUE R_3
REVENUE RECOGNITION REVENUE RECOGNITION - Accounts Receivable (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Aug. 03, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Customer accounts receivable | $ 1,143,836 | $ 1,063,167 |
Allowance for uncollectible receivables | (27,812) | (20,725) |
Other receivables, net | 20,900 | 23,257 |
Accounts receivable, net | 1,136,924 | 1,065,699 |
Customer notes receivable, net, included within Prepaid expenses and other current assets | 11,235 | 11,912 |
Long-term notes receivable, net, included within Other assets | $ 25,683 | $ 34,408 |
REVENUE RECOGNITION REVENUE R_4
REVENUE RECOGNITION REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Nov. 02, 2019 | Oct. 27, 2018 | |||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 6,019,585 | $ 2,868,156 | ||
Wholesale | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 6,007,095 | [1] | 2,856,966 | [2] |
Wholesale | Discontinued Operations | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 244,600 | 21,800 | ||
Revenues | $ 113,000 | $ 9,800 | ||
[1] | For the first quarter of fiscal 2020 , the Company recorded $244.6 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. | |||
[2] | For the first quarter of fiscal 2019 , the Company recorded $21.8 million within Net sales in its wholesale reportable segment attributable to discontinued operations inter-company product purchases from its Retail operating segment, which it expects will continue subsequent to the sale of certain retail banners. |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 22, 2018 | Nov. 02, 2019 | Aug. 03, 2019 |
Business Acquisition [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Goodwill | $ 19,791 | $ 442,256 | |
Supervalu | |||
Business Acquisition [Line Items] | |||
Business Acquisition, Share Price | $ 32.50 | ||
Business Combination, Consideration Transferred | $ 2,300,000 | 2,292,435 | |
Payments for business acquisitions | 1,300,000 | ||
Outstanding debt, excluding acquired senior notes | $ 1,000,000 | $ 1,046,170 | |
Supervalu | |||
Business Acquisition [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Discontinued Operations | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 0 | ||
Senior Notes | Supervalu | |||
Business Acquisition [Line Items] | |||
Outstanding debt, excluding acquired senior notes | $ 546,600 |
ACQUISITIONS - Schedule of Asse
ACQUISITIONS - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Oct. 22, 2018 | Nov. 02, 2019 | |
Supervalu | |||
Business Acquisition [Line Items] | |||
Outstanding debt, excluding acquired senior notes | $ 1,000,000 | $ 1,046,170 | |
Total consideration | 2,323,031 | ||
Cash and cash equivalents | 25,102 | ||
Accounts receivable | 552,381 | ||
Inventories | 1,156,781 | ||
Prepaid expenses and other current assets | 112,449 | ||
Current assets of discontinued operations | 196,848 | ||
Property, plant and equipment | 1,207,115 | ||
Intangible assets | 918,103 | ||
Other assets | 77,008 | ||
Long-term assets of discontinued operations | 433,839 | ||
Accounts payable | (974,252) | ||
Current portion of long-term debt and finance lease obligations | (579,565) | ||
Other current liabilities | (331,693) | ||
Current liabilities of discontinued operations | (148,763) | ||
Long-term debt | (34,355) | ||
Long-term finance lease obligations | (103,289) | ||
Pension and other postretirement benefit obligations | (234,324) | ||
Deferred income taxes | (18,254) | ||
Other long-term liabilities | (308,516) | ||
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 | $ 2,300,000 | 2,292,435 | |
Wholesale | Operating Segments | |||
Business Acquisition [Line Items] | |||
Goodwill | 376,181 | ||
Outstanding shares | Supervalu | |||
Business Acquisition [Line Items] | |||
Equity interests issued and issuable | 1,258,450 | ||
Equity-based awards | Supervalu | |||
Business Acquisition [Line Items] | |||
Equity interests issued and issuable | $ 18,411 | ||
[1] | Includes cash and cash equivalents acquired attributable to continuing operations and discontinued operations. |
ACQUISITIONS - Schedule of Fini
ACQUISITIONS - Schedule of Finite-Lived Intangible Assets Acquired (Details) - Supervalu $ in Thousands | Nov. 02, 2019USD ($) |
Non-compete agreement | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 2 years |
Minimum | Customer relationship assets | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Minimum | Favorable operating leases | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 1 year |
Minimum | Leases in place | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 1 year |
Minimum | Tradenames | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 2 years |
Minimum | Pharmacy prescription files | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Minimum | Unfavorable operating leases | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 1 year |
Maximum | Customer relationship assets | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 17 years |
Maximum | Favorable operating leases | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 19 years |
Maximum | Leases in place | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 8 years |
Maximum | Tradenames | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 9 years |
Maximum | Pharmacy prescription files | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 7 years |
Maximum | Unfavorable operating leases | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 12 years |
Continuing Operations | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | $ 896,349 |
Continuing Operations | Customer relationship assets | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 810,000 |
Continuing Operations | Favorable operating leases | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 21,629 |
Continuing Operations | Leases in place | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 10,474 |
Continuing Operations | Tradenames | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 66,000 |
Continuing Operations | Pharmacy prescription files | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 0 |
Continuing Operations | Non-compete agreement | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 10,000 |
Continuing Operations | Unfavorable operating leases | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 21,754 |
Discontinued Operations | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 62,900 |
Discontinued Operations | Customer relationship assets | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 0 |
Discontinued Operations | Favorable operating leases | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 0 |
Discontinued Operations | Leases in place | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 0 |
Discontinued Operations | Tradenames | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 17,000 |
Discontinued Operations | Pharmacy prescription files | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 45,900 |
Discontinued Operations | Non-compete agreement | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | 0 |
Discontinued Operations | Unfavorable operating leases | |
Business Acquisition [Line Items] | |
Finite Lived Intangible Assets | $ 0 |
ACQUISITIONS - Schedule of Pro
ACQUISITIONS - Schedule of Pro Forma Information (Details) - Supervalu - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Oct. 27, 2018 | [1] | Oct. 28, 2017 | [2] | |
Business Acquisition [Line Items] | ||||
Net sales | $ 5,984,970 | $ 5,910,484 | ||
Net loss from continuing operations | $ (47,893) | $ (53,367) | ||
Basic net loss continuing operations per share | $ (0.95) | $ (1.05) | ||
Diluted net loss from continuing operations per share | $ (0.95) | $ (1.05) | ||
[1] | Includes 12 weeks of pro forma Supervalu results for the period ended September 8, 2018. | |||
[2] | Includes 13 weeks of pro forma Supervalu results for the period ended September 17, 2017 and 13 weeks of pro forma Associated Grocers of Florida, Inc. results for the period ended August 5, 2017, which was acquired by Supervalu on December 8, 2017. |
RESTRUCTURING, ACQUISITION, A_3
RESTRUCTURING, ACQUISITION, AND INTEGRATION RELATED EXPENSES Restructuring, Acquisition, and Integration Related Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 02, 2019 | Oct. 27, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 14,250 | $ 68,004 |
Restructuring, Settlement and Impairment Provisions | ||
Restructuring Cost and Reserve [Line Items] | ||
Acquisition and integration costs | 9,294 | 31,935 |
Supervalu | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 1,837 | 36,069 |
Closed property charges and costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 3,119 | $ 0 |
RESTRUCTURING, ACQUISITION, A_4
RESTRUCTURING, ACQUISITION, AND INTEGRATION RELATED EXPENSES Restructuring Reserves (Details) $ in Thousands | 3 Months Ended |
Nov. 02, 2019USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Balances at August 3, 2019 | $ 12,941 |
Restructuring program charges | 1,837 |
Cash payments | (7,078) |
Balances at November 2, 2019 | 7,700 |
Cumulative program charges incurred from inception to date | 85,334 |
Supervalu | |
Restructuring Cost and Reserve [Line Items] | |
Balances at August 3, 2019 | 11,857 |
Restructuring program charges | 1,837 |
Cash payments | (7,078) |
Balances at November 2, 2019 | 6,616 |
Cumulative program charges incurred from inception to date | 76,251 |
Earth Origins Market | |
Restructuring Cost and Reserve [Line Items] | |
Balances at August 3, 2019 | 383 |
Restructuring program charges | 0 |
Cash payments | 0 |
Balances at November 2, 2019 | 383 |
Cumulative program charges incurred from inception to date | 2,219 |
2017 Cost Saving and Efficiency Initiatives[Member] [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Balances at August 3, 2019 | 701 |
Restructuring program charges | 0 |
Cash payments | 0 |
Balances at November 2, 2019 | 701 |
Cumulative program charges incurred from inception to date | $ 6,864 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Nov. 02, 2019 | Oct. 27, 2018 | Aug. 03, 2019 | Oct. 22, 2018 | |
Goodwill [Line Items] | ||||
Amortization of Intangible Assets | $ 22,100 | $ 3,700 | ||
Goodwill | 19,791 | $ 442,256 | ||
Goodwill and asset impairment charges | 425,405 | 0 | ||
Goodwill and asset impairment charges | 425,405 | |||
Closed property and other restructuring charges | 4,969 | $ 412 | ||
Goodwill and asset impairment charges | $ 424,005 | |||
Projected future cash flows weighted average cost of capital | 8.50% | |||
Wholesale | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 80,900 | |||
Goodwill and asset impairment charges | $ 421,500 | |||
SUPERVALU | ||||
Goodwill [Line Items] | ||||
Goodwill and asset impairment charges | $ 2,500 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS Carrying Value of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 02, 2019 | Aug. 03, 2019 | ||
Goodwill [Roll Forward] | |||
Goodwill | $ 442,256 | ||
Goodwill adjustment for prior fiscal year business combinations | 1,424 | ||
Impairment charges | (424,005) | ||
Change in foreign exchange rates | 116 | ||
Goodwill | 19,791 | ||
Wholesale | |||
Goodwill [Roll Forward] | |||
Impairment charges | (421,500) | ||
Operating Segments | Wholesale | |||
Goodwill [Roll Forward] | |||
Goodwill | 432,103 | ||
Goodwill adjustment for prior fiscal year business combinations | 1,424 | ||
Impairment charges | 423,712 | ||
Change in foreign exchange rates | 116 | ||
Goodwill | [1] | 9,931 | |
Accumulated goodwill impairment loss | 716,500 | $ 292,800 | |
Operating Segments | Other | |||
Goodwill [Roll Forward] | |||
Goodwill | 10,153 | ||
Goodwill adjustment for prior fiscal year business combinations | 0 | ||
Impairment charges | 293 | ||
Change in foreign exchange rates | 0 | ||
Goodwill | [2] | 9,860 | |
Accumulated goodwill impairment loss | $ 9,600 | $ 9,300 | |
[1] | Amounts are net of accumulated goodwill impairment charges of $292.8 million and $716.5 million as of August 3, 2019 and November 2, 2019 , respectively. | ||
[2] | Amounts are net of accumulated goodwill impairment charges of $9.3 million and $9.6 million as of August 3, 2019 and November 2, 2019 . |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 02, 2019 | Oct. 27, 2018 | Aug. 03, 2019 | |
Schedule of Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | $ 1,100,451 | $ 1,119,792 | |
Intangible assets, accumulated amortization (in dollars) | 156,678 | 134,547 | |
Finite-Lived Intangible Assets, Net | 943,773 | 985,245 | |
Indefinite-lived Intangible Assets, Gross Carrying Amount | 1,156,264 | 1,175,605 | |
Indefinite-lived Intangible Assets, Accumulated Amortization | 156,678 | 134,547 | |
Indefinite-lived Intangible Assets, Net Carrying Value | 999,586 | 1,041,058 | |
Amortization of Intangible Assets | 22,100 | $ 3,700 | |
Trademarks and Trade Names [Member] | |||
Schedule of Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets, Gross | 55,813 | 55,813 | |
Indefinite-Lived Intangible Assets, Accumulated Amortization | 0 | 0 | |
Indefinite-Lived Intangible Assets, Net | 55,813 | 55,813 | |
Customer relationship | |||
Schedule of Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 1,008,103 | 1,007,089 | |
Intangible assets, accumulated amortization (in dollars) | 127,906 | 111,940 | |
Finite-Lived Intangible Assets, Net | 880,197 | 895,149 | |
Non-compete agreement | |||
Schedule of Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 12,900 | 12,900 | |
Intangible assets, accumulated amortization (in dollars) | 7,571 | 6,237 | |
Finite-Lived Intangible Assets, Net | 5,329 | 6,663 | |
Operating Lease Intangible [Member] | |||
Schedule of Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 11,748 | 32,103 | |
Intangible assets, accumulated amortization (in dollars) | 2,451 | 2,209 | |
Finite-Lived Intangible Assets, Net | 9,297 | 29,894 | |
Trademarks and Trade Names [Member] | |||
Schedule of Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 67,700 | 67,700 | |
Intangible assets, accumulated amortization (in dollars) | 18,750 | 14,161 | |
Finite-Lived Intangible Assets, Net | $ 48,950 | $ 53,539 |
GOODWILL AND INTANGIBLE ASSET_6
GOODWILL AND INTANGIBLE ASSETS Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Aug. 03, 2019 |
Goodwill and Intangible Assets [Abstract] | ||
Remaining fiscal 2020 | $ 64,180 | |
2021 | 71,510 | |
2022 | 65,893 | |
2023 | 65,842 | |
2024 | 66,054 | |
2025 and thereafter | 610,294 | |
Finite-Lived Intangible Assets, Net | $ 943,773 | $ 985,245 |
FAIR VALUE MEASUREMENTS FAIR _3
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS - Recurring Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Nov. 02, 2019 | Aug. 03, 2019 |
Prepaid expenses and other current assets | Fair Value, Inputs, Level 1 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Mutual funds | $ 7 | |
Prepaid expenses and other current assets | Fair Value, Inputs, Level 1 | Interest rate swap | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap assets | $ 0 | 0 |
Interest rate swap liabilities | 0 | |
Prepaid expenses and other current assets | Fair Value, Inputs, Level 2 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Mutual funds | 0 | |
Prepaid expenses and other current assets | Fair Value, Inputs, Level 2 | Interest rate swap | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap assets | 279 | 389 |
Interest rate swap liabilities | 16,360 | |
Prepaid expenses and other current assets | Fair Value, Inputs, Level 3 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Mutual funds | 0 | |
Prepaid expenses and other current assets | Fair Value, Inputs, Level 3 | Interest rate swap | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap assets | 0 | 0 |
Interest rate swap liabilities | 0 | |
Other assets | Fair Value, Inputs, Level 1 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Mutual funds | 1,759 | 1,799 |
Other assets | Fair Value, Inputs, Level 1 | Interest rate swap | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap assets | 0 | 0 |
Other assets | Fair Value, Inputs, Level 2 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Mutual funds | 0 | 0 |
Other assets | Fair Value, Inputs, Level 2 | Interest rate swap | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap assets | 89 | 145 |
Other assets | Fair Value, Inputs, Level 3 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Mutual funds | 0 | 0 |
Other assets | Fair Value, Inputs, Level 3 | Interest rate swap | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap assets | 0 | 0 |
Accrued expenses and other current liabilities | Fair Value, Inputs, Level 1 | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap liabilities | 0 | |
Accrued expenses and other current liabilities | Fair Value, Inputs, Level 2 | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap liabilities | 20,645 | |
Accrued expenses and other current liabilities | Fair Value, Inputs, Level 3 | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap liabilities | 0 | |
Other long-term liabilities | Fair Value, Inputs, Level 1 | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap liabilities | 0 | |
Other long-term liabilities | Fair Value, Inputs, Level 1 | Interest rate swap | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap liabilities | 0 | |
Other long-term liabilities | Fair Value, Inputs, Level 2 | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap liabilities | 61,370 | |
Other long-term liabilities | Fair Value, Inputs, Level 2 | Interest rate swap | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap liabilities | 60,737 | |
Other long-term liabilities | Fair Value, Inputs, Level 3 | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap liabilities | $ 0 | |
Other long-term liabilities | Fair Value, Inputs, Level 3 | Interest rate swap | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest rate swap liabilities | $ 0 |
FAIR VALUE MEASUREMENTS FAIR _4
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS - Fair Value Estimates (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Aug. 03, 2019 |
Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes receivable, including current portion | $ 36,918 | $ 46,320 |
Long-term debt, including current portion | 3,070,456 | 2,906,483 |
Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes receivable, including current portion | 37,218 | 45,232 |
Long-term debt, including current portion | $ 2,812,437 | $ 2,730,271 |
FAIR VALUE MEASUREMENTS FAIR _5
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Details) $ in Thousands | 3 Months Ended |
Nov. 02, 2019USD ($) | |
Fair Value Disclosures [Abstract] | |
Effect of One Percent Increase on Fair Value of Interest Rate Fair Value Hedging Instruments | $ 64,900 |
Effect of One Percent Decrease on Fair Value of Interest Rate Fair Value Hedging Instruments | $ 67,800 |
DERIVATIVES DERIVATIVES - Outst
DERIVATIVES DERIVATIVES - Outstanding Swap Contracts (Details) - USD ($) $ in Millions | Nov. 02, 2019 | Jun. 28, 2019 | Jun. 10, 2019 | Apr. 02, 2019 | Mar. 21, 2019 | Jan. 24, 2019 | Jan. 23, 2019 | Jan. 11, 2019 | Nov. 30, 2018 | Nov. 16, 2018 | Oct. 26, 2018 | Jun. 24, 2016 | Jun. 09, 2016 | Mar. 31, 2015 | Jan. 23, 2015 | |
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | $ 2,197.5 | |||||||||||||||
Interest Rate Swap 1 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [1] | 25 | ||||||||||||||
Derivative, forward interest rate | [1] | 1.065% | ||||||||||||||
Interest Rate Swap 2 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [2] | 25 | ||||||||||||||
Derivative, forward interest rate | [2] | 0.926% | ||||||||||||||
Interest Rate Swap 3 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [3] | 58.5 | ||||||||||||||
Derivative, forward interest rate | [3] | 1.795% | ||||||||||||||
Interest Rate Swap 4 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [4] | 39 | ||||||||||||||
Derivative, forward interest rate | [4] | 1.795% | ||||||||||||||
Interest Rate Swap 5 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [5] | 100 | ||||||||||||||
Derivative, forward interest rate | [5] | 2.824% | ||||||||||||||
Interest Rate Swap 6 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [5] | 100 | ||||||||||||||
Derivative, forward interest rate | [5] | 2.8915% | ||||||||||||||
Interest Rate Swap 7 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [5] | 100 | ||||||||||||||
Derivative, forward interest rate | [5] | 2.921% | ||||||||||||||
Interest Rate Swap 8 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [5] | 50 | ||||||||||||||
Derivative, forward interest rate | [5] | 2.955% | ||||||||||||||
Interest Rate Swap 9 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [6] | 150 | ||||||||||||||
Derivative, forward interest rate | [6] | 2.895% | ||||||||||||||
Interest Rate Swap 10 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [6] | 50 | ||||||||||||||
Derivative, forward interest rate | [6] | 2.958% | ||||||||||||||
Interest Rate Swap 11 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [6] | 50 | ||||||||||||||
Derivative, forward interest rate | [6] | 2.959% | ||||||||||||||
Interest Rate Swap 12 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [7] | 100 | ||||||||||||||
Derivative, forward interest rate | [7] | 2.8084% | ||||||||||||||
Interest Rate Swap 13 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [7] | 50 | ||||||||||||||
Derivative, forward interest rate | [7] | 2.8315% | ||||||||||||||
Interest Rate Swap 14 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [7] | 100 | ||||||||||||||
Derivative, forward interest rate | [7] | 2.848% | ||||||||||||||
Interest Rate Swap 15 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [8] | 50 | ||||||||||||||
Derivative, forward interest rate | [8] | 2.4678% | ||||||||||||||
Interest Rate Swap 16 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [8] | 100 | ||||||||||||||
Derivative, forward interest rate | [8] | 2.477% | ||||||||||||||
Interest Rate Swap 17 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [8] | 100 | ||||||||||||||
Derivative, forward interest rate | [8] | 2.501% | ||||||||||||||
Interest Rate Swap 18 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [9] | 50 | ||||||||||||||
Derivative, forward interest rate | [9] | 2.55% | ||||||||||||||
Interest Rate Swap 19 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [9] | 50 | ||||||||||||||
Derivative, forward interest rate | [9] | 2.5255% | ||||||||||||||
Interest Rate Swap 20 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [9] | 50 | ||||||||||||||
Derivative, forward interest rate | [9] | 2.5292% | ||||||||||||||
Interest Rate Swap 21 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [9] | 100 | ||||||||||||||
Derivative, forward interest rate | [9] | 2.542% | ||||||||||||||
Interest Rate Swap 22 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [10] | 50 | ||||||||||||||
Derivative, forward interest rate | [10] | 2.521% | ||||||||||||||
Interest Rate Swap 23 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [10] | 50 | ||||||||||||||
Derivative, forward interest rate | [10] | 2.5558% | ||||||||||||||
Interest Rate Swap 24 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [11] | 100 | ||||||||||||||
Derivative, forward interest rate | [11] | 2.3645% | ||||||||||||||
Interest Rate Swap 25 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [12] | 100 | ||||||||||||||
Derivative, forward interest rate | [12] | 2.4925% | ||||||||||||||
Interest Rate Swap 26 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [12] | 100 | ||||||||||||||
Derivative, forward interest rate | [12] | 2.449% | ||||||||||||||
Interest Rate Swap 27 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [13] | 100 | ||||||||||||||
Derivative, forward interest rate | [13] | 2.252% | ||||||||||||||
Interest Rate Swap 28 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [13] | 100 | ||||||||||||||
Derivative, forward interest rate | [13] | 2.217% | ||||||||||||||
Interest Rate Swap 29 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [14] | 50 | ||||||||||||||
Derivative, forward interest rate | [14] | 2.229% | ||||||||||||||
Interest Rate Swap 30 | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | [15] | $ 50 | ||||||||||||||
Derivative, forward interest rate | [15] | 2.184% | ||||||||||||||
Interest rate swap | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | $ 84 | $ 140 | ||||||||||||||
Quarterly notional principal reduction | $ 1 | $ 1.5 | ||||||||||||||
[1] | This swap was executed on June 7, 2016 with an effective date of June 9, 2016. | |||||||||||||||
[2] | This swap was executed on June 24, 2016 with an effective date of June 24, 2016. | |||||||||||||||
[3] | This swap contract was executed on January 23, 2015 with an effective date of August 3, 2015. On March 31, 2015, the Company amended the original contract to reduce the beginning notional principal amount from $140 million to $84 million . The swap contract has an amortizing notional principal amount which is reduced by $1.5 million on a quarterly basis. | |||||||||||||||
[4] | This swap was executed on March 31, 2015 with an effective date of August 3, 2015. The swap contract has an amortizing notional principal amount which is reduced by $1.0 million on a quarterly basis. | |||||||||||||||
[5] | This swap contract was executed on October 26, 2018 with an effective date of October 26, 2018. | |||||||||||||||
[6] | This swap contract was executed on November 16, 2018 with an effective date of November 16, 2018 | |||||||||||||||
[7] | This swap contract was executed on November 30, 2018 with an effective date of November 30, 2018. | |||||||||||||||
[8] | This swap contract was executed on January 11, 2019 with an effective date of January 11, 2019. | |||||||||||||||
[9] | This swap contract was executed on January 23, 2019 with an effective date of January 23, 2019. | |||||||||||||||
[10] | This swap contract was executed on January 24, 2019 with an effective date of January 24, 2019. | |||||||||||||||
[11] | This swap contract was executed on March 18, 2019 with an effective date of March 21, 2019. | |||||||||||||||
[12] | This swap contract was executed on March 21, 2019 with an effective date of March 21, 2019. | |||||||||||||||
[13] | This swap contract was executed on April 2, 2019 with an effective date of April 2, 2019. | |||||||||||||||
[14] | This swap contract was executed on April 2, 2019 with an effective date of June 10, 2019. | |||||||||||||||
[15] | This swap contract was executed on April 2, 2019 with an effective date of June 28, 2019. |
DERIVATIVES DERIVATIVES - Inter
DERIVATIVES DERIVATIVES - Interest Rate Swap Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 02, 2019 | Oct. 27, 2018 | |
Derivative [Line Items] | ||
Total amounts of expense line items presented in the condensed consolidated statements of income in which the effects of cash flow hedges are recorded | $ 49,518 | $ 7,525 |
Gain or (loss) recognized as interest expense | 0 | (88) |
Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest | Reclassification out of Accumulated Other Comprehensive Income | ||
Derivative [Line Items] | ||
Gain or (loss) reclassified from comprehensive income into income | $ (2,370) | $ 551 |
LONG-TERM DEBT LONG-TERM DEBT -
LONG-TERM DEBT LONG-TERM DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 02, 2019 | Aug. 03, 2019 | |
Debt Instrument [Line Items] | ||
Debt issuance costs, net | $ (52,374) | $ (54,891) |
Original issue discount on debt | (39,787) | (41,175) |
Long-term debt, including current portion | 3,070,456 | 2,906,483 |
Less: current portion of long-term debt | (19,218) | (87,433) |
Long-term Debt | $ 3,051,238 | 2,819,050 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Spread on reference rate (percent) | 6.04% | |
Long-term debt, gross | $ 1,786,500 | 1,864,900 |
ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Spread on reference rate (percent) | 3.14% | |
Long-term debt, gross | $ 1,317,700 | 1,080,000 |
Other secured loans | ||
Debt Instrument [Line Items] | ||
Spread on reference rate (percent) | 5.20% | |
Long-term debt, gross | $ 58,417 | $ 57,649 |
LONG-TERM DEBT LONG-TERM DEBT_2
LONG-TERM DEBT LONG-TERM DEBT (Details) - USD ($) | Oct. 22, 2018 | Nov. 02, 2019 | Oct. 27, 2018 | Aug. 03, 2019 | Oct. 19, 2018 | Aug. 29, 2018 |
Debt Instrument [Line Items] | ||||||
Repayments of Long-term Debt | $ 83,510,000 | $ 110,000,000 | ||||
Loss on debt extinguishment | 73,000 | $ 1,114,000 | ||||
Real Estate Pledged as Collateral | 590,700,000 | |||||
Long term debt, including current portion, carrying value | 3,051,238,000 | $ 2,819,050,000 | ||||
Debt Issuance Costs, Net | 52,374,000 | 54,891,000 | ||||
Debt Instrument, Unamortized Discount | 39,787,000 | 41,175,000 | ||||
Notes Payable | $ 3,051,238,000 | $ 2,819,050,000 | ||||
Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Spread on reference rate (percent) | 6.04% | |||||
ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Spread on reference rate (percent) | 3.14% | |||||
Secured Debt | Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 1,950,000,000 | |||||
Line of Credit, Additional Borrowing Capacity | 656,300,000 | |||||
Debt Instrument, Guarantees Exception, Carrying Value of Owned Real Property | 10,000,000 | |||||
Percentage of Net Cash Proceeds from certain types of asset sales required to be used for loan prepayment | 100.00% | |||||
Threshold for loans outstanding to be paid following specified term following fiscal year end | $ 10,000,000 | |||||
Debt Issuance Costs, Net | 40,200,000 | |||||
Debt Instrument, Unamortized Discount | $ 39,400,000 | |||||
Secured Debt | Term Loan Facility | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of loans outstanding required to be paid following specified term following fiscal year end | 0.00% | |||||
Secured Debt | Term Loan Facility | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of loans outstanding required to be paid following specified term following fiscal year end | 75.00% | |||||
Secured Debt | 2018 Term Loan Facility, 364-day Tranche | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of Debt | $ 15,300,000 | |||||
Voluntary Repayments of Debt | 5,800,000 | |||||
Unamortized Debt Issuance Expense | 100,000 | |||||
Debt Instrument, Face Amount | $ 150,000,000 | |||||
Debt Instrument, Term | 364 days | |||||
Outstanding Borrowings | 52,800,000 | |||||
Secured Debt | 2018 Term Loan Facility, Term B Tranche | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 1,800,000,000 | 1,786,500,000 | ||||
Debt Instrument, Term | 7 years | |||||
Debt, Current | 18,000,000 | |||||
Revolving Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Unused available credit | $ 695,704,000 | |||||
Unused facility fees | 0.25% | |||||
Revolving Credit Facility | Line of Credit | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 2,100,000,000 | |||||
Line Of Credit Facility, Maximum Borrowing Capacity, Including Optional Increase | 2,700,000,000 | |||||
Debt Issuance Costs, Net | $ 12,200,000 | |||||
Maximum borrowing capacity, optional increase | 600,000,000 | |||||
Notes Payable | 1,317,700,000 | |||||
Letters of credit outstanding, amount | 77,400,000 | |||||
Unused available credit | 695,700,000 | |||||
Revolving Credit Facility | Line of Credit | Former ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 900,000,000 | |||||
Revolving Credit Facility | Line of Credit | UNITED STATES | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 2,050,000,000 | 2,050,000,000 | ||||
Line of credit facility, reserves | 143,900,000 | |||||
Current borrowing capacity | 2,333,700,000 | |||||
Revolving Credit Facility | Line of Credit | CANADA | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 50,000,000 | |||||
Line of credit facility, reserves | 4,000,000 | |||||
Current borrowing capacity | $ 2,090,800,000 | $ 40,800,000 | ||||
Letter of Credit | Line of Credit | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Fixed charge coverage ratio, minimum | 1 | |||||
Fronting fee percentage | 0.125% | |||||
Maximum aggregate availability of the aggregate borrowing base | $ 235,000,000 | |||||
Maximum percentage of aggregate availability of the aggregate borrowing base | 10.00% | |||||
Letter of Credit | Line of Credit | UNITED STATES | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 125,000,000 | |||||
Letter of Credit | Line of Credit | CANADA | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 5,000,000 | |||||
Bridge Loan | Line of Credit | UNITED STATES | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 100,000,000 | |||||
Bridge Loan | Line of Credit | CANADA | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 3,500,000 | |||||
SUPERVALU | ||||||
Debt Instrument [Line Items] | ||||||
Payments for business acquisitions | 1,300,000,000 | |||||
SUPERVALU | Revolving Credit Facility | Line of Credit | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Payments for business acquisitions | $ 1,475,000,000 | |||||
Accounts Receivable | Revolving Credit Facility | Line of Credit | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing base, eligibility percent | 90.00% | |||||
Credit Card Receivable | Revolving Credit Facility | Line of Credit | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing base, eligibility percent | 90.00% | |||||
Inventories | Revolving Credit Facility | Line of Credit | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing base, eligibility percent | 90.00% | |||||
Pharmacy Receivable | Revolving Credit Facility | Line of Credit | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing base, eligibility percent | 90.00% | |||||
Base Rate | Secured Debt | 2018 Term Loan Facility, Term B Tranche | ||||||
Debt Instrument [Line Items] | ||||||
Spread on reference rate (percent) | 3.25% | |||||
Base Rate | Revolving Credit Facility | Line of Credit | UNITED STATES | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Spread on reference rate (percent) | 0.25% | |||||
London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Minimum LIBOR rate | 0.00% | |||||
London Interbank Offered Rate (LIBOR) | Secured Debt | 2018 Term Loan Facility, Term B Tranche | ||||||
Debt Instrument [Line Items] | ||||||
Spread on reference rate (percent) | 4.25% | |||||
London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | Line of Credit | UNITED STATES | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Spread on reference rate (percent) | 1.25% | |||||
Prime Rate | Revolving Credit Facility | Line of Credit | CANADA | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Spread on reference rate (percent) | 0.25% | |||||
Bankers Acceptance Equivalent Rate | Revolving Credit Facility | Line of Credit | CANADA | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Spread on reference rate (percent) | 1.25% | |||||
Outstanding Borrowings Less Than 25 Percent Of Aggregate Commitments | Revolving Credit Facility | Line of Credit | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Unused facility fees | 0.375% | |||||
Outstanding Borrowings Equal Or Greater Than 25% Of Aggregate Commitments | Revolving Credit Facility | Line of Credit | ABL Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Unused facility fees | 0.25% |
LONG-TERM DEBT LONG-TERM DEBT_3
LONG-TERM DEBT LONG-TERM DEBT - Line of Credit Facilities (Details) - Line of Credit $ in Thousands | 3 Months Ended | |
Nov. 02, 2019USD ($) | ||
Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Outstanding letters of credit | $ 77,413 | |
Letter of credit fees | 1.375% | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Unused available credit | $ 695,704 | |
Unused facility fees | 0.25% | |
Inventories And Current Assets of Discontinued Operations [Member] | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Debt Instrument, Collateral Amount | $ 2,447,555 | [1] |
Receivables and Current Assets of Discontinued Operations [Member] | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Debt Instrument, Collateral Amount | $ 1,077,978 | [1] |
[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 Condensed Consolidated Balance Sheets as of November 2, 2019 . |
COMPREHENSIVE (LOSS) INCOME A_3
COMPREHENSIVE (LOSS) INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS COMPREHENSIVE (LOSS) INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS - Changes by component (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 02, 2019 | Oct. 27, 2018 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | $ 1,510,934 | $ 1,845,955 | |
Other comprehensive loss before reclassifications | (1,368) | (917) | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | [1] | 572 | 0 |
Reclassification from Accumulated Other Comprehensive Income, Net Periodic Benefit Income, Net of tax | (572) | ||
Amortization of cash flow hedge | (1,942) | 441 | |
Net current period Other comprehensive loss | (2,738) | (476) | |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | [2] | (3,681) | 196 |
Ending Balance | 1,123,240 | 1,830,316 | |
Accumulated Defined Benefit Plans Adjustment Attributable to Noncontrolling Interest | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (32,458) | ||
Other comprehensive loss before reclassifications | 0 | ||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 572 | 0 | |
Amortization of cash flow hedge | 0 | ||
Net current period Other comprehensive loss | 572 | ||
Ending Balance | (31,886) | ||
Accumulated Foreign Currency Adjustment Attributable to Noncontrolling Interest [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (20,082) | (19,053) | |
Other comprehensive loss before reclassifications | 371 | (672) | |
Amortization of cash flow hedge | 0 | 0 | |
Net current period Other comprehensive loss | 371 | (672) | |
Ending Balance | (19,711) | (19,725) | |
Accumulated Foreign Currency Adjustment Including Portion Attributable to Noncontrolling Interest | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 0 | ||
Swap Agreements | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (56,413) | 4,874 | |
Other comprehensive loss before reclassifications | (1,739) | (245) | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 0 | ||
Amortization of cash flow hedge | (1,942) | 441 | |
Net current period Other comprehensive loss | 196 | ||
Ending Balance | (60,094) | 5,070 | |
Accumulated Other Comprehensive Loss | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (108,953) | (14,179) | |
Net current period Other comprehensive loss | (2,738) | (476) | |
Ending Balance | $ (111,691) | $ (14,655) | |
[1] | Amounts are net of tax (benefit) expense of $0.2 million and $0.0 million for the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively. | ||
[2] | Amounts are net of tax (benefit) expense of $(1.3) million and $0.3 million for the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively. |
COMPREHENSIVE (LOSS) INCOME A_4
COMPREHENSIVE (LOSS) INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS COMPREHENSIVE (LOSS) INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS - Reclassification out of Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 02, 2019 | Oct. 27, 2018 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, before Tax | $ 774 | $ 0 | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax | (202) | 0 | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | [1] | 572 | 0 |
Income tax (benefit) expense | (73,753) | (4,255) | |
Total reclassifications, net of tax | 1,942 | (441) | |
Accumulated Defined Benefit Plans Adjustment Attributable to Noncontrolling Interest | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 572 | 0 | |
Total reclassifications, net of tax | 0 | ||
Swap Agreements | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 0 | ||
Total reclassifications, net of tax | 1,942 | (441) | |
Swap Agreements | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification of cash flow hedge | (2,370) | 551 | |
Income tax (benefit) expense | $ (428) | $ 110 | |
[1] | Amounts are net of tax (benefit) expense of $0.2 million and $0.0 million for the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively. |
LEASES LEASES - Lease assets an
LEASES LEASES - Lease assets and liabilities (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Aug. 04, 2019 | Aug. 03, 2019 |
Leases [Abstract] | |||
Operating lease assets | $ 1,051,128 | $ 1,059,473 | $ 0 |
Finance lease assets | 68,429 | ||
Total lease assets | 1,119,557 | ||
Current portion of operating lease liabilities | 127,327 | 137,741 | 0 |
Current portion of long-term debt and finance lease liabilities | 15,239 | 24,670 | |
Long-term operating lease liabilities | 949,978 | 936,728 | 0 |
Long-term finance lease liabilities | 68,682 | $ 70,643 | $ 108,208 |
Total lease liabilities | $ 1,161,226 |
LEASES LEASES - Lease cost (Det
LEASES LEASES - Lease cost (Details) $ in Thousands | 3 Months Ended |
Nov. 02, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Operating lease cost | $ 67,141 |
Short-term lease cost | 10,514 |
Variable lease cost | 34,956 |
Net operating lease cost | 96,836 |
Amortization of leased asset | 4,703 |
Interest on lease liabilities | 2,118 |
Finance lease cost | 6,821 |
Net lease cost | 103,657 |
Rent expense | 12,500 |
Operating expenses | |
Lessee, Lease, Description [Line Items] | |
Sublease Income | (10,940) |
Net sales | |
Lessee, Lease, Description [Line Items] | |
Sublease Income | $ (4,835) |
LEASES LEASES - Future Minimum
LEASES LEASES - Future Minimum Lease Payments and Lease Receipts (New Accounting Standard) (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Aug. 04, 2019 | Aug. 03, 2019 |
Operating Lease Obligations | |||
Remaining fiscal 2020 | $ 187,380 | ||
2021 | 209,552 | ||
2022 | 198,343 | ||
2023 | 171,756 | ||
2024 | 145,338 | ||
Thereafter | 1,050,386 | ||
Total undiscounted lease liabilities and receipts | 1,962,755 | ||
Less interest | (885,450) | ||
Present value of lease liabilities | 1,077,305 | ||
Less current lease liabilities | (127,327) | $ (137,741) | $ 0 |
Long-term lease liabilities | 949,978 | 936,728 | 0 |
Operating Lease Receipts | |||
Remaining fiscal 2020 | (43,449) | ||
2021 | (46,516) | ||
2022 | (41,562) | ||
2023 | (31,360) | ||
2024 | (24,236) | ||
Thereafter | (55,542) | ||
Total lease receipts | 242,665 | ||
Operating Leases, Net Lease Obligations | |||
Remaining fiscal 2020 | 143,931 | ||
2021 | 163,036 | ||
2022 | 156,781 | ||
2023 | 140,396 | ||
2024 | 121,102 | ||
Thereafter | 994,844 | ||
Total net operating lease obligations | 1,720,090 | ||
Finance Lease Obligations | |||
Remaining fiscal 2020 | 18,874 | ||
2021 | 19,252 | ||
2022 | 17,760 | ||
2023 | 16,653 | ||
2024 | 15,702 | ||
Thereafter | 21,526 | ||
Total undiscounted lease liabilities and receipts | 109,767 | ||
Less interest | (25,846) | ||
Present value of lease liabilities | 83,921 | ||
Less current lease liabilities | (15,239) | (24,670) | |
Long-term lease liabilities | 68,682 | $ 70,643 | $ 108,208 |
Finance Lease Receipts [Abstract] | |||
Remaining fiscal 2020 | (161) | ||
2021 | 0 | ||
2022 | 0 | ||
2023 | 0 | ||
2024 | 0 | ||
Thereafter | 0 | ||
Total undiscounted lease liabilities and receipts | (161) | ||
Finance Leases, Net Lease Obligations | |||
Remaining fiscal 2020 | 18,713 | ||
2021 | 19,252 | ||
2022 | 17,760 | ||
2023 | 16,653 | ||
2024 | 15,702 | ||
Thereafter | 21,526 | ||
Total undiscounted lease liabilities and receipts | 109,606 | ||
Lessee, operating lease, extension options reasonably certain to be exercised Option to Extend | 14,700 | ||
Lessee, operating lease, leases signed but not yet commenced | 48,500 | ||
Lessee, finance lease, extension options reasonably certain to be exercised | 0 | ||
Lessee, finance lease, leases signed but not yet commenced | $ 0 |
LEASES LEASES - Future Minimu_2
LEASES LEASES - Future Minimum Lease Payments and Lease Receipts (Prior Accounting Standard) (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Aug. 04, 2019 | Aug. 03, 2019 |
Lease Obligations [Abstract] | |||
2020 | $ 223,612 | ||
2021 | 190,845 | ||
2022 | 179,326 | ||
2023 | 154,812 | ||
2024 | 135,795 | ||
Thereafter | 1,063,674 | ||
Total future minimum obligations (receipts) | 1,948,064 | ||
Lease Receipts [Abstract] | |||
2020 | (55,922) | ||
2021 | (41,425) | ||
2022 | (35,998) | ||
2023 | (25,591) | ||
2024 | (18,183) | ||
Thereafter | (59,186) | ||
Total future minimum obligations (receipts) | 236,305 | ||
Net Lease Obligations [Abstract] | |||
2020 | 167,690 | ||
2021 | 149,420 | ||
2022 | 143,328 | ||
2023 | 129,221 | ||
2024 | 117,612 | ||
Thereafter | 1,004,488 | ||
Total future minimum obligations (receipts) | 1,711,759 | ||
Lease Obligations | |||
2020 | 41,550 | ||
2021 | 32,804 | ||
2022 | 29,869 | ||
2023 | 26,699 | ||
2024 | 23,095 | ||
Thereafter | 46,999 | ||
Total future minimum obligations (receipts) | 201,016 | ||
Less interest | (68,138) | ||
Present value of capital lease obligations | 132,878 | ||
Less current capital lease obligations | $ (15,239) | (24,670) | |
Long-term capital lease liabilities | $ 68,682 | $ 70,643 | 108,208 |
Lease Receipts | |||
2020 | (319) | ||
2021 | 0 | ||
2022 | 0 | ||
2023 | 0 | ||
2024 | 0 | ||
Thereafter | 0 | ||
Total future minimum obligations (receipts) | (319) | ||
Capital Leases, Net Lease Obligations [Abstract] | |||
2020 | 41,231 | ||
2021 | 32,804 | ||
2022 | 29,869 | ||
2023 | 26,699 | ||
2024 | 23,095 | ||
Thereafter | 46,999 | ||
Total future minimum obligations (receipts) | $ 200,697 |
LEASES Schedule of Other inform
LEASES Schedule of Other information Related to Leases (Details) $ in Thousands | 3 Months Ended |
Nov. 02, 2019USD ($) | |
Leases [Abstract] | |
Operating Lease, Weighted Average Remaining Lease Term | 11 years 1 month 6 days |
Finance Lease, Weighted Average Remaining Lease Term | 5 years 8 months 12 days |
Operating Lease, Weighted Average Discount Rate, Percent | 10.70% |
Finance Lease, Weighted Average Discount Rate, Percent | 9.90% |
Operating cash flows from operating leases | $ 55,750 |
Operating cash flows from finance leases | 1,880 |
Financing cash flows from finance leases | 3,074 |
Leased assets obtained in exchange for new finance lease liabilities | 0 |
Leased assets obtained in exchange for new operating lease liabilities | $ 37,020 |
BENEFIT PLANS BENEFIT PLANS - N
BENEFIT PLANS BENEFIT PLANS - Net Periodic Benefit Cost (Income) Recognized in Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 02, 2019 | Oct. 27, 2018 | |
Pension Benefits | ||
Net Periodic Benefit Cost | ||
Service cost | $ 0 | $ 0 |
Interest cost | 16,690 | 1,847 |
Expected return on plan assets | (27,482) | (2,724) |
Amortization of net actuarial loss (gain) | 3 | 0 |
Net periodic benefit (income) cost | (10,789) | (877) |
Contributions to benefit plans | (4,100) | (37) |
Other Postretirement Benefits | ||
Net Periodic Benefit Cost | ||
Service cost | 14 | 4 |
Interest cost | 236 | 38 |
Expected return on plan assets | (54) | (5) |
Amortization of net actuarial loss (gain) | (777) | 0 |
Net periodic benefit (income) cost | (581) | 37 |
Contributions to benefit plans | $ (100) | $ (9) |
BENEFIT PLANS BENEFIT PLANS (De
BENEFIT PLANS BENEFIT PLANS (Details) - USD ($) $ in Thousands | Nov. 04, 2019 | Feb. 01, 2020 | Nov. 02, 2019 | Oct. 27, 2018 |
Minimum | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Expected Future Employer Contributions, Current Fiscal Year | $ 0 | |||
Maximum | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Expected Future Employer Contributions, Current Fiscal Year | 6,000 | |||
Multiemployer Plans, Postretirement Benefit | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Multiemployer Plan, Contributions by Employer | 13,500 | $ 100 | ||
Subsequent Event | Supervalu Retirement Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Lump sum settlement payments | $ 664,000 | |||
Estimated non-cash pension settlement charge | $ 10,000 | |||
Unified Grocers, Inc. Cash Balance Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Multiemployer Plans, Minimum Contribution | $ 8,250 |
INCOME TAXES INCOME TAXES (Deta
INCOME TAXES INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Nov. 02, 2019 | Oct. 27, 2018 | |
Income Tax Contingency [Line Items] | ||
Effective Income Tax Rate, Continuing Operations, Percent | 15.30% | 16.60% |
Discrete tax benefit | $ 64 | |
Discrete tax expense | $ 0.5 | |
Effective income tax rate, continuing operations, excluding impact of discrete items | 16.40% | 18.70% |
Goodwill charge, pretax | ||
Income Tax Contingency [Line Items] | ||
Discrete tax benefit | $ 68 | |
Share-based compensation | ||
Income Tax Contingency [Line Items] | ||
Discrete tax expense | 3 | |
Unrecognized tax positions | ||
Income Tax Contingency [Line Items] | ||
Discrete tax expense | $ 0.8 |
EARNINGS PER SHARE EARNINGS P_2
EARNINGS PER SHARE EARNINGS PER SHARE - Earnings per Share (Details) - $ / shares shares in Thousands | 3 Months Ended | ||
Nov. 02, 2019 | Oct. 27, 2018 | ||
Reconciliation of the basic and diluted number of shares used in computing earnings per share: | |||
Basic weighted average shares outstanding (shares) | 53,213 | 50,583 | |
Net effect of dilutive stock awards based upon the treasury stock method (in shares) | 0 | 0 | |
Diluted weighted average shares outstanding (in shares) | 53,213 | 50,583 | |
Basic per share data: | |||
Continuing operations | $ (7.67) | $ (0.42) | |
Discontinued operations | 0.46 | 0.04 | |
Basic loss per share | (7.21) | (0.38) | |
Diluted (loss) earnings per share: | |||
Continuing operations | (7.67) | (0.42) | |
Discontinued operations | [1] | 0.46 | 0.04 |
Diluted loss per share | $ (7.21) | $ (0.38) | |
Anti-dilutive stock-based awards excluded from the calculation of diluted (loss) earnings per share (in shares) | 8,272 | 839 | |
Shares attributable to dilutive effect of stock awards | 63 | 598 | |
[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 63 thousand shares and 598 thousand for the 13-week periods ended November 2, 2019 and October 27, 2018 , respectively. |
BUSINESS SEGMENTS BUSINESS SE_2
BUSINESS SEGMENTS BUSINESS SEGMENTS - Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Nov. 02, 2019 | Oct. 27, 2018 | |||
Business segment information | ||||
Net sales | $ 6,019,585 | $ 2,868,156 | ||
Goodwill and asset impairment charges | 425,405 | |||
Restructuring, acquisition and integration related expenses | 14,250 | 68,004 | ||
Operating loss | (444,027) | (18,838) | ||
Total other expense, net | 38,088 | 6,778 | ||
Income before income taxes | (482,115) | (25,616) | ||
Depreciation and amortization | 75,141 | 24,793 | ||
Capital expenditures | 41,122 | 16,381 | ||
Total assets of continuing operations | 7,463,744 | 7,973,507 | ||
Operating Segments | Wholesale | ||||
Business segment information | ||||
Net sales | 6,007,095 | [1] | 2,856,966 | [2] |
Goodwill and asset impairment charges | 423,703 | |||
Restructuring, acquisition and integration related expenses | 7,952 | 0 | ||
Operating loss | (416,229) | 60,237 | ||
Income before income taxes | ||||
Depreciation and amortization | 68,199 | 23,517 | ||
Capital expenditures | 40,129 | 15,737 | ||
Total assets of continuing operations | 6,996,425 | 7,164,623 | ||
Operating Segments | Other | ||||
Business segment information | ||||
Net sales | 63,749 | [1] | 48,754 | |
Goodwill and asset impairment charges | 1,702 | |||
Restructuring, acquisition and integration related expenses | 6,298 | 68,004 | ||
Operating loss | (29,310) | (78,329) | ||
Income before income taxes | ||||
Depreciation and amortization | 6,942 | 1,276 | ||
Capital expenditures | 993 | 644 | ||
Total assets of continuing operations | 513,174 | 847,897 | ||
Eliminations | ||||
Business segment information | ||||
Net sales | (51,259) | [1] | (37,564) | |
Goodwill and asset impairment charges | 0 | |||
Restructuring, acquisition and integration related expenses | 0 | 0 | ||
Operating loss | 1,512 | (746) | ||
Income before income taxes | ||||
Depreciation and amortization | 0 | 0 | ||
Capital expenditures | 0 | 0 | ||
Total assets of continuing operations | (45,855) | (39,013) | ||
Unallocated (Income)/Expenses | ||||
Business segment information | ||||
Net sales | 0 | 0 | ||
Goodwill and asset impairment charges | 0 | |||
Restructuring, acquisition and integration related expenses | 0 | 0 | ||
Operating loss | 0 | 0 | ||
Total other expense, net | 38,088 | 6,778 | ||
Income before income taxes | ||||
Depreciation and amortization | 0 | 0 | ||
Capital expenditures | 0 | 0 | ||
Total assets of continuing operations | 0 | 0 | ||
Discontinued Operations | Operating Segments | Wholesale | ||||
Business segment information | ||||
Net sales | $ 244,600 | $ 21,800 | ||
[1] | For the first quarter of fiscal 2020 , the Company recorded $244.6 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. | |||
[2] | For the first quarter of fiscal 2019 , the Company recorded $21.8 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. |
BUSINESS SEGMENTS BUSINESS SE_3
BUSINESS SEGMENTS BUSINESS SEGMENTS (Details) | 3 Months Ended |
Nov. 02, 2019segment | |
Segment Reporting [Abstract] | |
Number of Operating Segments | 2 |
COMMITMENTS, CONTINGENCIES AN_2
COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS (Details) $ in Millions | 3 Months Ended |
Nov. 02, 2019USD ($)caseretailer | |
Loss Contingencies [Line Items] | |
Purchase Obligation | $ 247 |
Number of Retailers Filing Similar Complaints in Other Jurisdictions | retailer | 3 |
Number of Suits Pending | case | 38 |
Number of Cases Consolidated | case | 1,800 |
Schutte and Yarberry v. SuperValu, New Albertson;s, Inc., et al | |
Loss Contingencies [Line Items] | |
Alleged Damages (in excess of) | $ 100 |
Share of Potential Award | 24 |
Payment Guarantee | |
Loss Contingencies [Line Items] | |
Guarantor Obligations, Maximum Exposure, Undiscounted | 35.1 |
Guarantor Obligations, Maximum Exposure, Discounted | $ 24 |
Payment Guarantee | Minimum | |
Loss Contingencies [Line Items] | |
Guarantor Obligations, Guarantees Term | 1 year |
Payment Guarantee | Maximum | |
Loss Contingencies [Line Items] | |
Guarantor Obligations, Guarantees Term | 11 years |
Payment Guarantee | Weighted Average | |
Loss Contingencies [Line Items] | |
Guarantor Obligations, Guarantees Term | 7 years |
Moran Foods, LLC | |
Loss Contingencies [Line Items] | |
Professional Services Agreement Term | 5 years |
Professional Services Agreement, Base Amount | $ 30 |
DISCONTINUED OPERATIONS DISCO_2
DISCONTINUED OPERATIONS DISCONTINUED OPERATIONS (Details) $ in Thousands | Dec. 06, 2019USD ($)store | Nov. 02, 2019USD ($) | Jan. 26, 2019store | Oct. 27, 2018USD ($) | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 6,019,585 | $ 2,868,156 | ||||
Wholesale Segment | Operating Segments | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 6,007,095 | [1] | 2,856,966 | [2] | ||
Discontinued Operations | Wholesale Segment | Operating Segments | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 244,600 | 21,800 | ||||
Revenues | $ 113,000 | $ 9,800 | ||||
Discontinued Operations, Disposed of by Sale | Hornbacher'S | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number Of Store Sold | store | 7 | |||||
Number Of Store Held-For-Sale | store | 8 | |||||
Subsequent Event | Discontinued Operations, Disposed of by Sale | Shop 'n Save | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number Of Store Sold | store | 13 | |||||
Subsequent Event | Discontinued Operations, Disposed of by Means Other than Sale | Shop 'n Save | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of Stores Closed | store | 4 | |||||
Subsequent Event | Minimum | Discontinued Operations, Disposed of by Sale | Shop 'n Save | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Discontinued Operations, Aggregate costs and charges incurred during phase-out | $ 32,000 | |||||
Discontinued Operations, Severance Costs during phase-out | 13,000 | |||||
Discontinued Operations, Income (Loss) from Discontinued Operation During Phase-out Period, before Income Tax | 11,000 | |||||
Discontinued Operations, Transaction Costs during phase-out | 2,000 | |||||
Discontinued Operations, Non-cash impairment charges during phase-out | 6,000 | |||||
Subsequent Event | Maximum | Discontinued Operations, Disposed of by Sale | Shop 'n Save | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Discontinued Operations, Aggregate costs and charges incurred during phase-out | 42,000 | |||||
Discontinued Operations, Severance Costs during phase-out | 16,000 | |||||
Discontinued Operations, Income (Loss) from Discontinued Operation During Phase-out Period, before Income Tax | 14,000 | |||||
Discontinued Operations, Transaction Costs during phase-out | 3,000 | |||||
Discontinued Operations, Non-cash impairment charges during phase-out | $ 9,000 | |||||
[1] | For the first quarter of fiscal 2020 , the Company recorded $244.6 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. | |||||
[2] | For the first quarter of fiscal 2019 , the Company recorded $21.8 million within Net sales in its wholesale reportable segment attributable to discontinued operations inter-company product purchases from its Retail operating segment, which it expects will continue subsequent to the sale of certain retail banners. |
DISCONTINUED OPERATIONS DISCO_3
DISCONTINUED OPERATIONS DISCONTINUED OPERATIONS - Operating Results (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 02, 2019 | Oct. 27, 2018 | [1] | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Net sales | $ 610,821 | $ 46,598 | |
Cost of sales | 441,071 | 34,534 | |
Gross profit | 169,750 | 12,064 | |
Operating expenses | 136,435 | 9,494 | |
Restructuring, acquisition and integration related expenses | 1,362 | 0 | |
Operating income | 31,953 | 2,570 | |
Other income, net | (1,091) | (249) | |
Income from discontinued operations before income taxes | 33,044 | 2,819 | |
Income tax provision | 8,090 | 749 | |
Income from discontinued operations, net of tax | $ 24,954 | $ 2,070 | |
[1] | These results reflect retail operations from the Supervalu acquisition date of October 22, 2018 to October 27, 2018 . |
DISCONTINUED OPERATIONS DISCO_4
DISCONTINUED OPERATIONS DISCONTINUED OPERATIONS - Balance Sheet (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Aug. 03, 2019 |
Current assets | ||
Cash and Cash Equivalents | $ 2,845 | $ 2,917 |
Receivable, Net | 4,532 | 1,471 |
Inventories | 139,409 | 129,142 |
Other current assets | 9,097 | 10,199 |
Total current assets of discontinued operations | 155,883 | 143,729 |
Long-term assets | ||
Property and equipment | 292,154 | 301,395 |
Intangible assets | 49,687 | 48,788 |
Other assets | 2,051 | 1,882 |
Total long-term assets of discontinued operations | 343,892 | 352,065 |
Total assets of discontinued operations | 499,775 | 495,794 |
Current liabilities | ||
Accounts payable | 54,781 | 61,634 |
Accrued compensation and benefits | 34,574 | 45,887 |
Other current liabilities | 11,523 | 14,744 |
Total current liabilities of discontinued operations | 100,878 | 122,265 |
Long-term liabilities | ||
Other long-term liabilities | 1,403 | 1,923 |
Total liabilities of discontinued operations | 102,281 | 124,188 |
Net assets of discontinued operations | $ 397,494 | $ 371,606 |
Uncategorized Items - f20q110q.
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 277,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 277,000 |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 277,000 |