Goodwill and Other Intangibles

9 Months Ended

Oct. 01, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLES

Goodwill includes the cost of acquired businesses in excess of the fair value of the tangible and other intangible net assets acquired. Other intangible assets include customer relationships, amortizable trade names, noncompete agreements, the brand names comprising the Company’s portfolio of exclusive brands, and trademarks. Brand names and trademarks are indefinite-lived intangible assets and, accordingly, are not subject to amortization, but are subject to impairment assessments as described below.

Customer relationships, amortizable trade names and noncompete agreements are intangible assets with definite lives, and are carried at the acquired fair value less accumulated amortization. Customer relationships, amortizable trade names and noncompete agreements are amortized over their estimated useful lives (which range from approximately 3 to 15 years). Amortization expense was $11 million and $12 million for the 13 weeks ended October 1, 2022 and October 2, 2021, respectively, and $33 million and $44 million for the 39 weeks ended October 1, 2022 and October 2, 2021, respectively.

Goodwill and other intangibles—net consisted of the following:


	October 1, 2022		January 1, 2022
Goodwill	$	5,625	$	5,625
Other intangibles—net
Customer relationships—amortizable:
Gross carrying amount	$	655	$	655
Accumulated amortization	(132)		(99)
Net carrying value	523		556
Trade names—amortizable:
Gross carrying amount	4		4
Accumulated amortization	(1)		(1)
Net carrying value	3		3
Brand names and trademarks—not amortizing	271		271
Total other intangibles—net	$	797	$	830

The Company assesses for impairment of intangible assets with definite lives only if events occur that indicate that the carrying amount of an intangible asset may not be recoverable. The Company assesses goodwill and other intangible assets with

indefinite lives for impairment annually, or more frequently if events occur that indicate an asset may be impaired. For goodwill and indefinite-lived intangible assets, the Company’s policy is to assess for impairment as of the beginning of each fiscal third quarter. The Company completed its most recent annual impairment assessment for goodwill and indefinite-lived intangible assets as of July 3, 2022, the first day of the third quarter of fiscal year 2022, with no impairments noted. During the third quarter of fiscal year 2021, the Company implemented rebranding initiatives related to the integration of a trade name acquired as part of the 2019 Food Group acquisition. As a result of the rebranding initiatives, the Company recognized an impairment charge of $7 million, which was included in restructuring costs and asset impairment charges in the Company’s Consolidated Statements of Comprehensive Income. The remaining carrying value of the acquired trade name of $3 million was reclassified to trade names—amortizable and is being amortized with an estimated remaining useful life of 10 years.