GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Feb. 27, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 3—GOODWILL AND INTANGIBLE ASSETS

Changes in the Company’s Goodwill and Intangible assets, net consisted of the following:



	February 22, 2014			Additions			Impairments		Other net adjustments		February 28, 2015			Additions			Impairments			Other net adjustments			February 27, 2016
Goodwill:
Wholesale	$	710		$	—		$	—	$	—	$	710		$	—		$	—		$	—		$	710
Save-A-Lot	137			4			—		—		141			1			—			—			142
Retail	—			14			—		—		14			1			—			—			15
Total goodwill	$	847		$	18		$	—	$	—	$	865		$	2		$	—		$	—		$	867

Intangible assets:
Favorable operating leases, prescription files, customer lists and other (accumulated amortization of $97 and $86 as of February 27, 2016 and February 28, 2015, respectively)	$	111		$	13		$	—	$	—	$	124		$	25		$	(6	)	$	(1	)	$	142
Tradenames and trademarks—indefinite useful lives	9			—			—		—		9			—			—			—			9
Non-compete agreements (accumulated amortization of $2 and $2 as of February 27, 2016 and February 28, 2015, respectively)	3			—			—		—		3			—			—			—			3
Total intangible assets	123			13			—		—		136			25			(6		)	(1		)	154
Accumulated amortization	(80		)	(8		)	—		—		(88		)	(11		)	—			—			(99		)
Total intangible assets, net	$	43									$	48											$	55

The Company applies a fair value based impairment test to the net book value of goodwill and intangible assets with indefinite useful lives on an annual basis and on an interim basis if events or circumstances indicate that an impairment loss may have occurred.

The Company conducted an annual impairment test of the net book value of goodwill and intangible assets with indefinite useful lives during the fourth quarter of fiscal 2016, which indicated the fair value of the Retail, Wholesale and the Save-A-Lot Corporate Stores reporting units exceeded their carrying values by approximately 100 percent, 95 percent and 35 percent, respectively. The fair value of the Save-A-Lot Licensee Distribution reporting unit was in excess of 100 percent of its carrying value and the fair values of intangible assets with indefinite useful lives was in excess of their carrying values.

In the first quarter ended June 20, 2015, the Company recorded intangible assets using valuations based on Level 3 inputs consisting primarily of certain distribution center operation rights, purchase options and other intangibles received by the Company under the letter agreement the Company entered into with Albertson's dated May 28, 2015, as described in Note 14—Commitments, Contingencies and Off-Balance Sheet Arrangements.

In the third quarter ended December 5, 2015, the Company received a notice pursuant to which the Company could exercise certain purchase options. As a result, the Company performed a review of the associated intangible assets for impairment, which indicated the carrying value of the intangible exceeded its estimated value. The Company recorded a non-cash intangible impairment charge of $6 within its Wholesale segment.

Annual impairment testing and the related calculation of the impairment charges contains significant judgments and estimates including weighted average cost of capital, future revenue, profitability, cash flows and fair values of assets and liabilities.

Amortization expense of intangible assets with definite useful lives of $11, $8 and $8 was recorded in fiscal 2016, 2015 and 2014, respectively. Future amortization expense is expected to average approximately $7 per year for the next five years.

- 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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