Goodwill and Intangible Assets, Net

9 Months Ended

Dec. 03, 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 27, 2016			Additions			Impairments			Other net adjustments			December 3, 2016
Goodwill:
Wholesale	$	710		$	—		$	—		$	—		$	710
Retail	15			—			(15		)	—			—
Total goodwill	$	725		$	—		$	(15	)	$	—		$	710

Intangible assets:
Favorable operating leases, prescription files, customer lists and other (accumulated amortization of $102 and $95 as of December 3, 2016 and February 27, 2016, respectively)	$	131		$	2		$	—		$	(1	)	$	132
Trademarks and tradenames – indefinite useful lives	10			—			—			—			10
Non-compete agreements (accumulated amortization of $2 and $2 as of December 3, 2016 and February 27, 2016, respectively)	3			—			—			—			3
Total intangible assets	144			2			—			(1		)	145
Accumulated amortization	(97		)	(7		)	—			—			(104		)
Total intangible assets, net	$	47											$	41

During the third quarter of fiscal 2017, the Company conducted an interim impairment review of the carrying value of the Company's reporting units in conjunction with its impairment review of Save-A-Lot’s goodwill and due to declines in sales and cash flows within Retail. The review indicated that the estimated fair value of the Wholesale reporting unit was in excess of 100 percent of its carrying value. The review also indicated that the carrying value of the Retail reporting unit exceeded its estimated fair value, as determined utilizing the income approach and market approach. As a result, the Company performed the step 2 assessment and recorded a non-cash goodwill impairment charge of $15 in the Retail segment during the third quarter of fiscal 2017. The calculation of the impairment charge contains significant judgments and estimates including weighted average cost of capital, future revenue, profitability, cash flows and fair values of assets and liabilities.

During the third quarter of fiscal 2016, the Company received a notice pursuant to which the Company could exercise certain options to purchase operating assets. As a result, the Company performed a review of the associated indefinite-lived 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 during the third quarter of fiscal 2016.

Amortization of intangible assets with definite useful lives was $7 and $8 for fiscal 2017 and 2016 year-to-date, respectively. Future amortization expense is anticipated to approximate $2, and $9, $5, $3, $3 and $2 for the remainder of fiscal 2017, and fiscal 2018, 2019, 2020, 2021 and 2022, respectively.

- 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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