XML 19 R12.htm IDEA: XBRL DOCUMENT
v3.20.1

GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended
--- | ---
Feb. 01, 2020
GOODWILL AND INTANGIBLE ASSETS |
GOODWILL AND INTANGIBLE ASSETS |
3. | GOODWILL AND INTANGIBLE ASSETS
​ The following table summarizes the changes in the Company’s net goodwill balance through February 1, 2020. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2019 |  | 2018 |
Balance beginning of year | ​ | ​ | ​ | ​ | ​ | ​ | ​
Goodwill | ​ | $ | 5,729 | ​ | $ | 5,567 | ​
Accumulated impairment losses | ​ |  | (2,642) | ​ |  | (2,642) | ​
Subtotal | ​ |  | 3,087 | ​ |  | 2,925 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Activity during the year | ​ | ​ | ​ | ​ | ​ | ​ | ​
Mergers | ​ |  | 8 | ​ |  | 163 | ​
Impairment losses | ​ | ​ | (19) | ​ | ​ | — | ​
Held for sale adjustment | ​ | ​ | — | ​ | ​ | (1) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance end of year | ​ | ​ | ​ | ​ | ​ | ​ | ​
Goodwill | ​ |  | 5,737 | ​ |  | 5,729 | ​
Accumulated impairment losses | ​ |  | (2,661) | ​ |  | (2,642) | ​
Total Goodwill | ​ | $ | 3,076 | ​ | $ | 3,087 | ​
​ In 2019, the Company finalized the purchase accounting for the Home Chef acquisition (see Note 2) resulting in an increase of goodwill and deferred taxes of $8. The Company also recorded an impairment charge of $19 as a result of the Lucky’s Market impairment. ​ In 2018, the Company acquired all of the outstanding shares of Home Chef (see Note 2) resulting in additional goodwill totaling $163. Certain assets and liabilities including goodwill totaling $1 for 2018 was classified as held for sale in the Consolidated Balance Sheet (see Note 17). ​ Testing for impairment must be performed annually, or on an interim basis upon the occurrence of a triggering event or a change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The annual evaluation of goodwill and indefinite-lived intangible assets was performed during the fourth quarter of 2019 and 2018 and did not result in impairment. ​ Based on the results of the Company’s impairment assessment in the fourth quarter of 2017, the Kroger Specialty Pharmacy reporting unit was the only reporting unit for which there was a potential impairment. In the fourth quarter of 2017, the operating performance of the Kroger Specialty Pharmacy reporting unit began to be affected by reduced margins as a result of compression in reimbursement by third party payers and a reduction of certain types of revenue. As a result of this decline, particularly in future expected cash flows, along with comparable fair value information, management concluded that the carrying value of goodwill for Kroger Specialty Pharmacy reporting unit exceeded its fair value, resulting in a pre-tax impairment charge of $110, $74 net of tax. The pre-impairment goodwill balance for Kroger Specialty Pharmacy was $353, as of the fourth quarter 2017. The following table summarizes the Company’s intangible assets balance through February 1, 2020. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2019 | ​ | 2018 |
​ |  | Gross carrying |  | Accumulated |  | Gross carrying |  | Accumulated |
​ | ​ | amount | ​ | amortization(1) | ​ | amount | ​ | amortization(1) |
Definite-lived favorable leasehold interests(2) | ​ | $ | — | ​ | $ | — | ​ | $ | 160 | ​ | $ | (47) | ​
Definite-lived pharmacy prescription files | ​ |  | 320 | ​ |  | (133) | ​ |  | 316 | ​ |  | (92) | ​
Definite-lived customer relationships | ​ | ​ | 186 | ​ | ​ | (120) | ​ | ​ | 186 | ​ | ​ | (88) | ​
Definite-lived other | ​ |  | 106 | ​ |  | (68) | ​ |  | 103 | ​ |  | (55) | ​
Indefinite-lived trade name | ​ |  | 685 | ​ |  | — | ​ |  | 685 | ​ |  | — | ​
Indefinite-lived liquor licenses | ​ |  | 90 | ​ |  | — | ​ |  | 90 | ​ |  | — | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total | ​ | $ | 1,387 | ​ | $ | (321) | ​ | $ | 1,540 | ​ | $ | (282) | ​
​
(1) | Favorable leasehold interests are amortized to rent expense, pharmacy prescription files are amortized to merchandise costs, customer relationships are amortized to depreciation and amortization expense and other intangibles are amortized to OG&A expense and depreciation and amortization expense.
(2) | Due to the adoption of ASU 2016-02 “Leases,” favorable leasehold interests were reclassified and included in the measurement of new lease assets, refer to Note 10 and 18 for further description of the impact of adoption.
​ In 2018, the Company acquired definite and indefinite lived intangible assets totaling approximately $143, excluding goodwill, as a result of the merger with Home Chef (see Note 2). Additionally, the majority of the Company’s pharmacy prescription file purchases for 2018 were completed in a single transaction for $75. ​ Amortization expense associated with intangible assets totaled approximately $85, $80 and $59, during fiscal years 2019, 2018 and 2017, respectively. Future amortization expense associated with the net carrying amount of definite-lived intangible assets for the years subsequent to 2019 is estimated to be approximately: ​
​ | ​ | ​ | ​
2020 |  | $ | 73
2021 | ​ |  | 58
2022 | ​ |  | 51
2023 | ​ |  | 42
2024 | ​ |  | 39
Thereafter | ​ |  | 28
​ | ​ | ​ | ​
Total future estimated amortization associated with definite-lived intangible assets | ​ | $ | 291
​

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration