Albertsons 2011 Annual Report Download - page 48

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NOTE 2—GOODWILL AND INTANGIBLE ASSETS
Changes in the Company’s Goodwill and Intangible assets consisted of the following:
February 28,
2009 Additions Impairments
Other net
adjustments
February 27,
2010 Additions Impairments
Other net
adjustments
February 26,
2011
Goodwill:
Retail food goodwill $ 6,164 $ — $ — $ (50) $ 6,114 $ — $ — $ 2 $ 6,116
Accumulated
impairment losses (3,223) — — — (3,223) — (1,619) — (4,842)
Total Retail food
goodwill, net 2,941 — — (50) 2,891 — (1,619) 2 1,274
Supply chain services
goodwill 807 — — — 807 — — (97) 710
Total goodwill $ 3,748 $ — $ — $ (50) $ 3,698 $ — $ (1,619) $ (95) $ 1,984
February 28,
2009
Additions/
Amortization Impairments
Other net
adjustments
February 27,
2010
Additions/
Amortization Impairments
Other net
adjustments
February 26,
2011
Intangible assets:
Trademarks and
tradenames –
indefinite useful lives $ 1,069 $ — $ (20) $ — $ 1,049 $ — $ (251) $ (18) $ 780
Favorable operating
leases, customer lists,
customer
relationships and
other (accumulated
amortization of $280
and $238 as of
February 26, 2011
and February 27,
2010, respectively) 706 8 — (40) 674 12 — (23) 663
Non-compete
agreements
(accumulated
amortization of $4
and $5 as of
February 26, 2011
and February 27,
2010, respectively) 10 1 — 2 13 1 — (3) 11
Total intangible assets 1,785 9 (20) (38) 1,736 13 (251) (44) 1,454
Accumulated amortization (201) (59) — 17 (243) (57) — 16 (284)
Total intangible assets, net $ 1,584 $ 1,493 $ 1,170
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 Company undertook reviews for impairment of
goodwill and intangible assets with indefinite useful lives twice during the year. 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 annual review of goodwill undertaken in the fourth quarter indicated no reduction to the
carrying value of goodwill was required. The result of the 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.
The impairment of goodwill and indefinite-lived intangible assets reflects the significant decline in the market
capitalization and the weak economy.
44