Goodwill and Intangible Assets

12 Months Ended

Feb. 25, 2012

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 27, 2010			Additions			Impairments			Other net adjustments			February 26, 2011			Additions			Impairments			Other net adjustments			February 25, 2012
Goodwill:
Retail food goodwill	$	6,114		$	—		$	—		$	2		$	6,116		$	—		$	—		$	(16	)	$	6,100
Accumulated impairment losses		(3,223	)		—			(1,619	)		—			(4,842	)		—			(1,121	)		—			(5,963	)
Total Retail food goodwill, net		2,891			—			(1,619	)		2			1,274			—			(1,121	)		(16	)		137
Independent business goodwill		807			—			—			(97	)		710			—			—			—			710
Total goodwill	$	3,698		$	—		$	(1,619	)	$	(95	)	$	1,984		$	—		$	(1,121	)		(16	)	$	847
	February 27, 2010			Additions/ Amortization			Impairments			Other net adjustments			February 26, 2011			Additions/ Amortization			Impairments			Other net adjustments			February 25, 2012
Intangible assets:
Trademarks and tradenames—indefinite useful lives	$	1,049		$	—		$	(251	)	$	(18	)	$	780		$	—		$	(311	)	$	—		$	469
Favorable operating leases, customer lists, customer relationships and other (accumulated amortization of $331 and $280 as of February 25, 2012 and February 26, 2011, respectively)		674			12			—			(23	)		663			9			—			(8	)		664
Non-compete agreements (accumulated amortization of $4 and $4 as of February 25, 2012 and February 26, 2011, respectively)		13			1			—			(3	)		11			1			—			(1	)		11
Total intangible assets		1,736			13			(251	)		(44	)		1,454			10			(311	)		(9	)		1,144
Accumulated amortization		(243	)		(57	)		—			16			(284	)		(56	)		—			5			(335	)
Total intangible assets, net	$	1,493											$	1,170											$	809

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.

During the third and fourth quarters of fiscal 2012 the Company’s stock price experienced a significant and sustained decline and the book value per share substantially exceeded the stock price. As a result, the Company performed reviews of goodwill and intangible assets with indefinite useful lives for impairment, which indicated that the carrying value of traditional retail stores’ goodwill and certain intangible assets with indefinite useful lives exceeded their estimated fair values. The Company recorded preliminary non-cash impairment charges of $907, comprised of $661 of goodwill and $246 of intangible assets with indefinite useful lives during the third quarter of fiscal 2012 due to the significant and sustained decline in the Company’s market capitalization and updated discounted cash flows. The finalization of third quarter impairment charges and the results of the fourth quarter impairment review resulted in an additional non-cash impairment charge of $525 including an immaterial finalization to the third quarter preliminary charge. The fourth quarter charge is comprised of $460 of goodwill and $65 of intangible assets with indefinite useful lives. The impairment charge was due to the significant and sustained decline in the Company’s market capitalization as of and subsequent to the end of the fourth quarter of fiscal 2012 and was recorded in the Retail food segment.

For the full fiscal 2012 year the Company recorded non-cash impairment charges of $1,432, comprised of $1,121 of goodwill and $311 of intangible assets with indefinite useful lives, in the Retail food segment. The 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.

The Company undertook reviews for impairment of goodwill and intangible assets with indefinite useful lives twice during fiscal 2011. During the second quarter of fiscal 2011 the Company’s stock price had a significant and sustained decline and book value per share substantially exceeded the stock price. As a result, the Company completed an impairment review and recorded non-cash impairment charges of $1,840 related to the Retail food segment, comprised of a $1,619 reduction to the carrying value of goodwill and a $221 reduction to the carrying value of intangible assets with indefinite useful lives. The result of the fiscal 2011 annual review of goodwill undertaken in the fourth quarter indicated no reduction to the carrying value of goodwill was required. The result of the fiscal 2011 annual fourth quarter impairment review of intangible assets with indefinite useful lives indicated that the carrying value of certain Acquired Trademarks exceeded their estimated fair value based on projected future revenues and recorded non-cash impairment charges of $30 related to the Retail food segment.

During fiscal 2011 the Company recorded $95 reduction to Goodwill as a result of divesting Total Logistic Control. Refer to Note 15—Divestiture. During fiscal 2010 the Company also recorded impairment charges of $20 to its trademarks and tradenames.

During fiscal 2012 the Company sold 107 retail fuel centers which were part of the Retail food segment. As a result of this sale, 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 Consolidated Balance Sheets. The Company completed the sale during the third and fourth quarter of fiscal 2012, at which time the $16 of Goodwill and $76 of Property, plant and equipment was eliminated from assets held for sale.

Amortization expense of intangible assets with definite useful lives of $56, $57 and $59 was recorded in fiscal 2012, 2011 and 2010, respectively. Future amortization expense will be approximately $32 per year for each of the next five years.