Annual report pursuant to Section 13 and 15(d)

Goodwill and Nonamortizing Intangible Assets

v3.20.1
Goodwill and Nonamortizing Intangible Assets
 12 Months Ended
Feb. 01, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Nonamortizing Intangible Assets Goodwill and Nonamortizing Intangible Assets
Goodwill allocated to the Company’s reportable segments and changes in the net carrying amount of goodwill for the years ended February 1, 2020 and February 2, 2019 are as follows:
(in millions)
 
Dollar Tree
 
Family Dollar
 
Total
Balance at February 3, 2018
 
$
347.1

 
$
4,678.1

 
$
5,025.2

Foreign currency translation adjustments
 
(1.6
)
 
—

 
(1.6
)
Goodwill reassignment for re-bannered stores
 
31.0

 
(31.0
)
 
—

Goodwill impairment
 
—

 
(2,727.0
)
 
(2,727.0
)
Balance at February 2, 2019
 
376.5

 
1,920.1

 
2,296.6

Foreign currency translation adjustments
 
(0.3
)
 
—

 
(0.3
)
Goodwill reassignment for re-bannered stores
 
47.6

 
(47.6
)
 
—

Goodwill impairment
 
—

 
(313.0
)
 
(313.0
)
Balance at February 1, 2020
 
$
423.8

 
$
1,559.5

 
$
1,983.3


Goodwill is reassigned between segments when stores are re-bannered between segments. In 2019 and 2018, the Company reassigned $47.6 million and $31.0 million, respectively, of goodwill from Family Dollar to Dollar Tree as a result of re-bannering. Re-bannered stores are treated as new stores.
Goodwill and other indefinite-lived intangible assets must be evaluated for impairment annually and may also be tested 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. In 2018, based on the Company’s strategic and operational reassessment of the Family Dollar segment following challenges that the business experienced that impacted the Company’s ability to grow the business at the originally estimated rate when it acquired Family Dollar in 2015, management determined there were indicators that the goodwill of the business may be impaired. Accordingly, a goodwill impairment test was performed in the fourth quarter of fiscal 2018 and an impairment test was also performed in 2019. The results of the impairment tests showed that the fair value of the Family Dollar reporting unit was lower than its carrying value resulting in $313.0 million and $2.73 billion non-cash pre-tax and after-tax goodwill impairment charges in the fourth quarters of fiscal 2019 and 2018, respectively, which were recorded as a component of “Selling, general and administrative expenses” in the accompanying consolidated statements of operations. The annual goodwill impairment evaluation in 2017 did not result in impairment.
The Company’s annual impairment evaluation of the Family Dollar trade name did not result in impairment charges during fiscal 2019, 2018 or 2017.