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Goodwill and Intangible Assets
9 Months Ended
Dec. 03, 2011
Goodwill and Intangible Assets [Abstract]  
GOODWILL AND INTANGIBLE ASSETS

NOTE 2 — GOODWILL AND INTANGIBLE ASSETS

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

                                         
    February 26,
2011
    Additions     Impairments     Other net
adjustments
    December 3,
2011
 

Goodwill:

                                       

Retail food goodwill

  $ 6,116     $     $     $ (17   $ 6,099  

Accumulated impairment losses

    (4,842           (661           (5,503
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Retail food goodwill, net

    1,274             (661     (17     596  

Independent business goodwill

    710                         710  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total goodwill

  $ 1,984     $     $ (661   $ (17   $ 1,306  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

                                         
    February 26,
2011
    Additions/
Amortization
    Impairments     Other net
adjustments
    December 3,
2011
 

Intangible assets:

                                       

Trademarks and tradenames — indefinite useful lives

  $ 780     $     $ (246   $     $ 534  

Favorable operating leases, customer lists, customer relationships and other (accumulated amortization of $319 and $280 as of December 3, 2011 and February 26, 2011, respectively)

    663       7             (5     665  

Non-compete agreements (accumulated amortization of $5 and $4 as of December 3, 2011 and February 26, 2011, respectively)

    11       1                   12  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total intangible assets

    1,454       8       (246     (5     1,211  

Accumulated amortization

    (284     (43             3       (324
   

 

 

                           

 

 

 

Total intangible assets, net

  $ 1,170                             $ 887  
   

 

 

                           

 

 

 

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 certain events or circumstances indicate that an impairment loss may have occurred.

The review of goodwill and intangible assets with indefinite useful lives for impairment during the third quarter of fiscal 2012 indicated that the carrying value of traditional retail stores’ goodwill and certain intangible assets with indefinite useful lives exceeded their estimated fair values. As a result, the Company performed an interim impairment test and recorded preliminary non-cash impairment charges of $907, comprised of $661 of goodwill and $246 of intangible assets with indefinite useful lives. The impairment was due to the significant and sustained decline in the Company’s market capitalization and updated discounted future cash flows. The calculation of the preliminary 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. The preliminary impairment charges are subject to finalization which the Company will complete in the fourth quarter of fiscal 2012. The Company believes that the preliminary estimates of impairment charges are reasonable and represent the Company’s best estimate of the impairment charges to be incurred; however, it is possible that material adjustments to the preliminary estimates may be required as the calculation is finalized.

Amortization expense of intangible assets with definite useful lives was $43 and $44 for the year-to-date period ended December 3, 2011 and December 4, 2010, respectively. Average future amortization expense will be approximately $34 per fiscal year for each of the next five fiscal years.

On September 7, 2011, the Company announced it had reached an agreement to sell 107 retail fuel centers which are part of the Retail food segment. As a result of this agreement, during the second quarter the Company reclassified $17 of Goodwill and $76 of Property, plant and equipment and other assets to assets held for sale. Assets held for sale is a component of Other current assets in the Condensed Consolidated Balance Sheets. During the third quarter of fiscal 2012 the Company completed the sale of 56 of the previously announced retail fuel centers. Completion of the sale of the remaining retail fuel centers is expected to occur during the fourth quarter of fiscal 2012.