Albertsons 2014 Annual Report Download - page 81
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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
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