Goodwill and Other Intangible Assets

6 Months Ended

Aug. 29, 2015

Goodwill and Other Intangible Assets

8. Goodwill and Other Intangible Assets

Goodwill and indefinitely-lived intangible assets, such as certain trademarks acquired in connection with acquisition transactions, are not amortized, but are instead evaluated for impairment on an annual basis at the end of the fiscal year, or more frequently if events or circumstances indicate that impairment may be more likely. During the twenty-six weeks ended August 29, 2015 and the fifty-two weeks ended February 28, 2015, no impairment charges have been taken against the Company’s goodwill. During the twenty-six weeks ended August 29, 2015, no impairment charges have been taken against the Company’s indefinitely-lived intangible assets. Below is a summary of the changes in the carrying amount of goodwill for the twenty-six week period ended August 29, 2015:

	August 29, 2015
	Retail Pharmacy		Pharmacy Services		Total
Balance, February 28, 2015	$	76,124	$	—	$	76,124
Acquisition (see Note 2. Acquisition)	—		1,457,703		1,457,703

Balance, August 29, 2015	$	76,124	$	1,457,703	$	1,533,827

The Company’s other intangible assets are finite-lived and amortized over their useful lives. Following is a summary of the Company’s finite-lived and indefinitely-lived intangible assets as of August 29, 2015 and February 28, 2015.

	August 29, 2015								February 28, 2015
	Gross Carrying Amount		Accumulated Amortization			Net		Remaining Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net		Remaining Weighted Average Amortization Period
Favorable leases and other	$	663,323	$	(498,624	)	$	164,699	8 years	$	653,377	$	(481,041	)	$	172,336	8 years
Prescription files	1,470,997		(1,235,710		)	235,287		3 years	1,440,154		(1,191,010		)	249,144		3 years
Customer relationships(a)	585,500		(12,769		)	572,731		17 years	—		—			—
CMS license	108,000		(792		)	107,208		25 years	—		—			—
Claims adjudication and other developed software	59,500		(1,558		)	57,942		7 years	—		—			—
Trademarks	15,600		(286		)	15,314		10 years	—		—			—
Backlog	12,500		(764		)	11,736		3 years	—		—			—
Other	17,485		(871		)	16,614		5 years	—		—			—

Total finite	$	2,932,905	$	(1,751,374	)	1,181,531			$	2,093,531	$	(1,672,051	)	$	421,480
Trademarks	44,000		—			44,000		Indefinite	—		—			—

Total	$	2,976,905	$	(1,751,374	)	$	1,225,531		$	2,093,531	$	(1,672,051	)	$	421,480

(a)

— Amortized on an accelerated basis which is determined based on the remaining useful economic lives of the customer relationships that are expected to contribute directly or indirectly to future cash flows.

Also included in other non-current liabilities as of August 29, 2015 and February 28, 2015 are unfavorable lease intangibles with a net carrying amount of $51,382 and $55,571, respectively. These intangible liabilities are amortized over their remaining lease terms at the time of acquisition.

Amortization expense for these intangible assets and liabilities was $48,609 and $80,550 for the thirteen and twenty-six week periods ended August 29, 2015, respectively. Amortization expense for these intangible assets and liabilities was $28,532 and $57,769 for the thirteen and twenty-six week periods ended August 30, 2014, respectively. The anticipated annual amortization expense for these intangible assets and liabilities is 2016—$186,283; 2017—$206,363; 2018—$166,250; 2019—$130,231 and 2020—$100,716.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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