GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Feb. 22, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

NOTE 2—GOODWILL AND INTANGIBLE ASSETS

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


	February 25, 2012			Additions			Impairments			Other net adjustments			February 23, 2013			Additions			Impairments		Other net adjustments			February 22, 2014
Goodwill:
Independent Business goodwill	$	710		$	—		$	—		$	—		$	710		$	—		$	—	$	—		$	710
Save-A-Lot goodwill		137			—			—			—			137			—			—		—			137

Total goodwill	$	847		$	—		$	—			—		$	847		$	—		$	—		—		$	847


	February 25, 2012			Additions			Impairments			Other net adjustments			February 23, 2013			Additions			Impairments		Other net adjustments			February 22, 2014
Intangible assets:
Customer lists, customer relationships, favorable operating leases and other (accumulated amortization of $78 and $65 as of February 22, 2014 and February 23, 2013, respectively)	$	105		$	1		$	—		$	—		$	106		$	—		$	—	$	5		$	111
Trademarks and tradenames—indefinite useful lives		14			—			(6	)		1			9			—			—		—			9
Non-compete agreements (accumulated amortization of $2 and $2 as of February 22, 2014 and February 23, 2013, respectively)		3			—			—			—			3			—			—		—			3

Total intangible assets		122			1			(6	)		1			118			—			—		5			123
Accumulated amortization		(58	)		(8	)		—			(1	)		(67	)		(8	)		—		(5	)		(80	)

Total intangible assets, net	$	64											$	51										$	43

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 2014, which indicated the fair value of the Independent Business reporting unit exceeded its carrying value by approximately 75 percent, the fair value of the Save-A-Lot reporting unit was in excess of 100 percent of its carrying value and the fair value of intangible assets with indefinite useful lives was in excess of their carrying value. In fiscal 2013, recoverability tests of indefinite-lived tradename intangibles indicated the carrying value of a tradename within the Independent Business segment was not recoverable, which resulted in a pre-tax impairment charge of $6.

During the third and fourth quarter of fiscal 2012, the Company’s stock price experienced a significant and sustained decline, cash flows of the Company’s Retail Food segment continued to 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 Retail Food’s goodwill exceeded its estimated fair value. The Company recorded a non-cash goodwill impairment charge of $92 during fiscal 2012 in the Retail Food segment due to the significant and sustained decline in the Company’s market capitalization and updated discounted cash flows. 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.

Amortization expense of intangible assets with definite useful lives of $8 was recorded in fiscal 2014, 2013 and 2012. Future amortization expense will average approximately $5 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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