Goodwill and Intangibles

12 Months Ended

Aug. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Note N – Goodwill and Intangibles

The changes in the carrying amount of goodwill are as follows:


(in thousands)	Auto Parts Stores		Other			Total

Net balance as of August 26, 2012	$	302,645	$	—		$	302,645
Goodwill added through acquisition ⁽¹⁾		—		83,440			83,440
Goodwill adjustments ⁽²⁾		—		(18,256	)		(18,256	)

Net balance as of August 31, 2013		302,645		65,184			367,829
Goodwill adjustments ⁽²⁾		—		—			—

Net balance as of August 30, 2014	$	302,645	$	65,184		$	367,829

(1)

See Note M for discussion of the acquisition completed during the second quarter of fiscal 2013

(2)

Total accumulated goodwill impairment for both August 30, 2014 and August 31, 2013 is $18.3 million

The Company performs its annual goodwill and intangibles impairment test in the fourth quarter of each fiscal year. In the fourth quarter of fiscal 2014, the Company concluded that its goodwill was not impaired. During the fourth quarter of fiscal 2013, the Company determined it was more likely than not that the goodwill attributed to AutoAnything was impaired. Accordingly, the Company performed a goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, including goodwill. The Company uses the discounted cash flow methodology to determine fair value as it is considered to be the most reliable indicator of the fair values of the business. Because the fair value of the reporting unit was lower than its carrying value, the Company recorded a goodwill impairment charge of $18.3 million during the fourth quarter of fiscal 2013.

The carrying amounts of intangible assets are included in Other long-term assets as follows:


	August 30, 2014
(in thousands)	Estimated Useful Life		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount

Amortizing intangible assets:
Technology		3-5 years	$	10,570	$	(3,528	)	$	7,042
Noncompete agreements		5 years		1,300		(443	)		857
Customer relationships		3-10 years		48,376		(6,007	)		42,369

			$	60,246	$	(9,978	)		50,268

Non-amortizing intangible asset:
Trade name									24,600

Total intangible assets other than goodwill								$	74,868


	August 31, 2013
(in thousands)	Estimated Useful Life		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount

Amortizing intangible assets:
Technology		5 years	$	9,700	$	(1,365	)	$	8,335
Noncompete agreements		5 years		1,300		(183	)		1,117
Customer relationships		10 years		19,000		(1,336	)		17,664

			$	30,000	$	(2,884	)		27,116

Non-amortizing intangible asset:
Trade name									24,600

Total intangible assets other than goodwill								$	51,716

During fiscal year 2014, the Company purchased $30.2 million of intangible assets relating to the rights to certain customer relationships and technology assets relating to its ALLDATA operations.

As part of its annual impairment test, the Company evaluates the AutoAnything trade name for impairment in the fourth quarter of each fiscal year. In the fourth quarter of fiscal 2014, the Company concluded that AutoAnything’s trade name was not impaired. During the fourth quarter of fiscal 2013, based on the Company’s evaluation of the future discounted cash flows of AutoAnything’s trade name as compared to its carrying value, it was determined that AutoAnything’s trade name was impaired. The Company recorded an impairment charge of $4.1 million during the fourth quarter of fiscal 2013 related to the trade name. Trade name at August 30, 2014 and August 31, 2013 reflects a total accumulated impairment of $4.1 million.

Amortization expense of intangible assets for the year ended August 30, 2014 and August 31, 2013 was $7.1 million and $2.9 million, respectively.

Total future amortization expense for intangible assets that have finite lives, based on the existing intangible assets and their current estimated useful lives as of August 30, 2014, is estimated as follows:


(in thousands)	Total

2015	$	8,618
2016		8,618
2017		8,353
2018		6,725
2019		6,073
Thereafter		11,881

	$	50,268

- 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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