SVU » Topics » Goodwill and Intangible Assets

These excerpts taken from the SVU 10-K filed Apr 28, 2009.
Goodwill and Intangible Assets
 
The Company reviews goodwill for impairment during the fourth quarter of each year, and also if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. The reviews consist of comparing estimated fair value to the carrying value at the reporting unit level. The Company’s reporting units are the operating segments of the business. Fair values are determined primarily by discounting projected future cash flows based on management’s expectations of the current and future operating environment. The rates used to discount projected future cash flows reflect a weighted average cost of capital based on the Company’s industry, capital structure and risk premiums including those reflected in the current market capitalization. If management identifies the potential for impairment of goodwill, the fair value of the implied goodwill is calculated as the difference between the fair value of the reporting unit and the fair value of the underlying assets and liabilities, excluding goodwill. An impairment charge is recorded for any excess of the carrying value over the implied fair value. The Company also reviews intangible assets with indefinite useful lives, which primarily consist of trademarks and tradenames, for impairment during the fourth quarter of each year, and also if events or changes in circumstances indicate that the asset might be impaired. The reviews consist of comparing estimated fair value to the carrying value. Fair values of the Company’s trademarks and tradenames are determined primarily by discounting an assumed royalty value applied to projected future revenues associated with the tradename based on management’s expectations of the current and future operating environment. The royalty cash flows are then discounted using rates based on the weighted average cost of capital discussed above and the specific risk profile of the tradenames relative to the Company’s other assets. Intangible assets with estimable useful lives are amortized on a straight-line basis with estimated useful lives ranging from less than one to 35 years.
 
Goodwill
and Intangible Assets



 



The Company reviews goodwill for impairment during the fourth
quarter of each year, and also if an event occurs or
circumstances change that would more-likely-than-not reduce the
fair value of a reporting unit below its carrying amount. The
reviews consist of comparing estimated fair value to the
carrying value at the reporting unit level. The Company’s
reporting units are the operating segments of the business. Fair
values are determined primarily by discounting projected future
cash flows based on management’s expectations of the
current and future operating environment. The rates used to
discount projected future cash flows reflect a weighted average
cost of capital based on the Company’s industry, capital
structure and risk premiums including those reflected in the
current market capitalization. If management identifies the
potential for impairment of goodwill, the fair value of the
implied goodwill is calculated as the difference between the
fair value of the reporting unit and the fair value of the
underlying assets and liabilities, excluding goodwill. An
impairment charge is recorded for any excess of the carrying
value over the implied fair value. The Company also reviews
intangible assets with indefinite useful lives, which primarily
consist of trademarks and tradenames, for impairment during the
fourth quarter of each year, and also if events or changes in
circumstances indicate that the asset might be impaired. The
reviews consist of comparing estimated fair value to the
carrying value. Fair values of the Company’s trademarks and
tradenames are determined primarily by discounting an assumed
royalty value applied to projected future revenues associated
with the tradename based on management’s expectations of
the current and future operating environment. The royalty cash
flows are then discounted using rates based on the weighted
average cost of capital discussed above and the specific risk
profile of the tradenames relative to the Company’s other
assets. Intangible assets with estimable useful lives are
amortized on a straight-line basis with estimated useful lives
ranging from less than one to 35 years.


 




This excerpt taken from the SVU 10-Q filed Oct 16, 2008.

NOTE 3 – GOODWILL AND INTANGIBLE ASSETS

As of September 6, 2008, the Company had approximately $6,153 of Goodwill related to its Retail food segment and $806 related to its Supply chain services segment.

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

 

     February 23,
2008
    Additions/
Amortization
    Other Net
Adjustments
    September 6,
2008
 

Goodwill

   $ 6,957     $ —       $ 2     $ 6,959  
                                

Intangible assets:

        

Trademarks and tradenames

   $ 1,370     $ —       $ —       $ 1,370  

Favorable operating leases, customer lists and other (accumulated amortization of $162 and $130 as of September 6, 2008 and February 23, 2008, respectively)

     669       5       (4 )     670  

Customer relationships (accumulated amortization of $12 and $11 as of September 6, 2008 and February 23, 2008, respectively)

     48       —         —         48  

Non-compete agreements (accumulated amortization of $10 and $9 as of September 6, 2008 and February 23, 2008, respectively)

     15       1       1       17  
                                

Total intangible assets

     2,102       6       (3 )     2,105  

Accumulated amortization

     (150 )     (35 )     1       (184 )
                    

Total intangible assets, net

   $ 1,952         $ 1,921  
                    

 

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Table of Contents

Amortization expense of intangible assets with a definite life was $35 and $47 for the 28 weeks ended September 6, 2008 and September 8, 2007, respectively. Future amortization expense will be approximately $54 per fiscal year for each of the next five fiscal years.

This excerpt taken from the SVU 10-Q filed Jul 23, 2008.

NOTE 3 – GOODWILL AND INTANGIBLE ASSETS

At June 14, 2008, the Company had approximately $6,151 of Goodwill related to its Retail food segment and $805 related to its Supply chain services segment.

A summary of changes in the Company’s Goodwill and Intangible assets is as follows:

 

     February 23,
2008
    Additions/
Amortization
    Other Net
Adjustments
    June 14,
2008
 

Goodwill

   $ 6,957     $ —       $ (1 )   $ 6,956  
                                

Intangible assets:

        

Trademarks and tradenames

   $ 1,370     $ —       $ —       $ 1,370  

Favorable operating leases, customer lists and other (accumulated amortization of $149 and $130 at June 14, 2008 and February 23, 2008, respectively)

     669       2       (2 )     669  

Customer relationships (accumulated amortization of $11 and $11 at June 14, 2008 and February 23, 2008, respectively)

     48       —         —         48  

Non-compete agreements (accumulated amortization of $10 and $9 at June 14, 2008 and February 23, 2008, respectively)

     15       1       1       17  
                                

Total intangible assets

     2,102       3       (1 )     2,104  

Accumulated amortization

     (150 )     (20 )     —         (170 )
                    

Total intangible assets, net

   $ 1,952         $ 1,934  
                    

Amortization expense of intangible assets with a definite life of $20 and $28 was recorded for the quarters ended June 14, 2008 and June 16, 2007, respectively. Future amortization expense will be approximately $56 per fiscal year for each of the next five fiscal years.

 

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Table of Contents
This excerpt taken from the SVU 10-K filed Apr 23, 2008.

Goodwill and Intangible Assets

The Company reviews goodwill for impairment during the fourth quarter of each year, and also if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. The reviews consist of comparing estimated fair value to the carrying value at the reporting unit level. Fair values are determined primarily by discounting projected future cash flows based on management’s expectations of the current and future operating environment. If management identifies the potential for impairment of goodwill, the fair value of the implied goodwill is calculated as the difference between the fair value of the reporting unit and the fair value of the underlying assets and liabilities, excluding goodwill. An impairment charge is recorded for any excess of the carrying value over the implied fair value. The Company also reviews intangible assets with indefinite useful lives, which primarily consist of trademarks and tradenames, for impairment during the fourth quarter of each year and also if events or changes in circumstances indicate that the asset might be impaired. The reviews consist of comparing estimated fair value to the carrying value. Fair values are determined primarily by discounting an assumed royalty value applied to projected future revenue based on management’s expectations of the current and future operating environment. Intangible assets with estimable useful lives are amortized on a straight-line basis with estimated useful lives ranging from less than one to 35 years.

This excerpt taken from the SVU 10-K filed Apr 25, 2007.

Goodwill and Intangible Assets

Goodwill was $5,921 as of February 24, 2007, reflecting an increase of approximately $4,307 in fiscal 2007 from $1,614 as of February 25, 2006. This increase was primarily due to $4,333 of goodwill recognized as a result of the Acquisition. Goodwill and intangible asset balances related to the Acquisition will be adjusted through the first quarter of fiscal 2008 in accordance with SFAS No. 141, “Business Combinations.” For further information, see Note 3 – Business Acquisition, in the Notes to Consolidated Financial Statements. In fiscal 2007, the Company recorded a pre-tax goodwill impairment charge of $19 related to the plan to dispose of Scott’s. The decrease in goodwill from $1,628 as of February 25, 2005 to $1,614 as of February 26, 2006 resulted primarily from purchase accounting adjustments of $29 between deferred income taxes and goodwill related to former acquisitions and reductions of goodwill of $11 primarily related to the disposition of Pittsburgh and Chicago stores, which were partially offset by purchase accounting adjustments to increase goodwill by $20 for the finalization of the valuation in fiscal 2006 related to the acquisition of Total Logistics in fiscal 2005. For additional information, see Note 7 – Goodwill and Other Acquired Intangible Assets, in the Notes to Consolidated Financial Statements.

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