3.GOODWILL AND INTANGIBLE ASSETS

The following table summarizes the changes in the Company’s net goodwill balance through February 2, 2019.


	2018		2017
Balance beginning of year
Goodwill	$	5,567	$	5,563
Accumulated impairment losses		(2,642)		(2,532)
Subtotal		2,925		3,031

Activity during the year
Mergers		163		18
Impairment losses		—		(110)
Held for sale adjustment		(1)		(14)


Balance end of year
Goodwill		5,729		5,567
Accumulated impairment losses		(2,642)		(2,642)
Total Goodwill	$	3,087	$	2,925

In 2018, the Company acquired all of the outstanding shares of Home Chef (see Note 2) resulting in additional goodwill totaling $163. Certain assets and liabilities including goodwill totaling $1 and $14, respectively for 2018 and 2017 were classified as held for sale in the Consolidated Balance Sheet (see Note 17).

Testing for impairment must be performed annually, or on an interim basis upon the occurrence of a triggering event or a change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The annual evaluation of goodwill and indefinite-lived intangible assets was performed during the fourth quarter of 2018 and 2016 and did not result in impairment.

Based on the results of the Company’s impairment assessment in the fourth quarter of 2017, the Kroger Specialty Pharmacy reporting unit was the only reporting unit for which there was a potential impairment. In the fourth quarter of 2017, the operating performance of the Kroger Specialty Pharmacy reporting unit began to be affected by reduced margins as a result of compression in reimbursement by third party payers and a reduction of certain types of revenue. As a result of this decline, particularly in future expected cash flows, along with comparable fair value information, management concluded that the carrying value of goodwill for Kroger Specialty Pharmacy reporting unit exceeded its fair value, resulting in a pre-tax impairment charge of $110 ($74 after-tax). The pre-impairment goodwill balance for Kroger Specialty Pharmacy was $353, as of the fourth quarter 2017.

The following table summarizes the Company’s intangible assets balance through February 2, 2019.


	2018				2017
	Gross carrying		Accumulated		Gross carrying		Accumulated
	amount		amortization(1)		amount		amortization(1)
Definite-lived favorable leasehold interests	$	160	$	(47)	$	174	$	(53)
Definite-lived pharmacy prescription files		316		(92)		238		(70)
Definite-lived customer relationships		186		(88)		93		(67)
Definite-lived other		103		(55)		99		(44)
Indefinite-lived trade name		685		—		641		—
Indefinite-lived liquor licenses		90		—		89		—

Total	$	1,540	$	(282)	$	1,334	$	(234)

(1)

Favorable leasehold interests are amortized to rent expense, pharmacy prescription files are amortized to merchandise costs, customer relationships are amortized to depreciation and amortization expense and other intangibles are amortized to OG&A expense and depreciation and amortization expense.

In 2018, the Company acquired definite and indefinite lived intangible assets totaling approximately $143, excluding goodwill, as a result of the merger with Home Chef (see Note 2). Additionally, the majority of the Company’s pharmacy prescription file purchases for 2018 were completed in a single transaction for $75.

Amortization expense associated with intangible assets totaled approximately $80, $59 and $63, during fiscal years 2018, 2017 and 2016, respectively. Future amortization expense associated with the net carrying amount of definite-lived intangible assets for the years subsequent to 2018 is estimated to be approximately:


2019	$	87
2020		83
2021		67
2022		59
2023		47
Thereafter		140

Total future estimated amortization associated with definite-lived intangible assets	$	483