Acquisitions, Litigation, and Other Charges Acquisitions, Litigation, and Other Charges

12 Months Ended

Dec. 31, 2019

Acquisition, Litigation and Other Special Charges [Abstract]

Business Combination, Acquisition Related Cost, Litigation Expense And Other Special Charges Disclosure [Text Block]

Acquisition, Litigation and Other Charges

The components of the charges included in “Acquisition, litigation and other” in our Consolidated Statements of Operations are as follows (in thousands):

	Years Ended December 31,
Acquisition, litigation and other	2019		2018			2017
Acquisition related costs	$	24,284	$	671		$	—
Litigation	4,553		—			—
Strategic alternative costs	—		—			8,136
Other:
Severance, equity award modifications and acceleration	9,789		2,053			516
Non-offering related equity issuance expenses	1,356		1,813			—
Terminated site operations costs	632		(1,804		)	2,677
Non-recurring public company implementation costs	—		1,202			—
Total other	11,777		3,264			3,193
Total acquisition, litigation and other	$	40,614	$	3,935		$	11,329

Acquisition related costs include costs associated with business transactions, whether consummated or not, such as advisory, legal, accounting, valuation and other professional or consulting fees. We also include integration costs

pre- and post-acquisition that reflect work being performed to facilitate merger and acquisition integration, such as work associated with information systems and other projects including spending to support future acquisitions, and primarily consist of professional services. We consider acquisition related costs to be corporate costs regardless of the segment or segments involved in the transaction. Acquisition costs for the year ended December 31, 2019, primarily consisted of a $10.0 million investment advisory fee, employee retention expense, non-capitalizable legal and professional fees related to completed and potential acquisitions, and acquisition integration costs. Refer to Note 3 for further information regarding acquisitions completed in the current year.

Litigation costs consist of expenses incurred in order to defend the Company from litigation charges outside of the normal course of business as well as related settlements not in the normal course of business. Litigation costs incurred in connection with matters arising from the ordinary course of business are expensed as a component of “Selling, general and administrative expense” on the Consolidated Statements of Operations.

Strategic alternative costs consist of operating costs associated with our review of various contemplated strategic transactions prior to our initial public offering.

Severance costs represent certain contractual and negotiated severance and separation costs from exited former executives, reduction in headcount due to synergies achieved through acquisitions or operational efficiencies and reduction in workforce costs associated with exiting or selling non-strategic warehouses or businesses. Equity acceleration and modification costs represent the unrecognized expense for stock awards that vest and convert to common shares in advance of the original negotiated vesting date and any other equity award changes resulting in accounting for the award as a modification. For the year ended December 31, 2019, we recognized $2.4 million of severance related to reduction in headcount as a result of the synergies created from the Cloverleaf Acquisition, $1.2 million of severance related to the departure of two former executives, $3.0 million related to a reduction in headcount within our international operations from organizational realignments, as well as $3.1 million of accelerated equity award vesting. Refer to Note 17 for further details of all equity modifications and equity acceleration.

Non-offering related equity issuance expense consists of non-registration statement related legal fees associated with the selling shareholders’ secondary public offering completed during the first quarter of 2019, which consisted solely of shares sold by YF ART Holdings and Goldman Sachs and affiliates (see Note 1 for more information). The Company received no proceeds from the secondary offering. Non-offering related equity issuance expense for the year ended December 31, 2018 consisted of non-capitalizable legal and professional fees associated with the September 2018 follow-on equity issuance and non-registration statement related costs and an Australian stamp duty tax related to the Company’s IPO.

Terminated site operations costs relates to repair expenses incurred to return leased sites to their original physical state at lease inception in connection with the termination of the applicable underlying lease. These terminations were part of our strategic efforts to exit or sell non-strategic warehouses as opposed to ordinary course lease expirations. In 2018, the Company was released from liability under a previously exited leased facility, for which we originally recorded in 2017 a charge of $2.1 million repair expense to return the site to its original condition. As a result, we reversed this charge in 2018. In total, $0.3 million was paid in conjunction with the exit of this facility.

Repair and maintenance expenses associated with our ordinary course operations are reflected as operating expenses on our Consolidated Statement of Operations.

Non-recurring public company implementation costs for the year ended December 31, 2018, represent costs associated with the implementation of financial reporting systems and processes needed to convert the organization to a public company.