5. |
Goodwill and Other Intangible Assets |
The Company recorded additions to goodwill in connection with its acquisitions. The goodwill is a result of expected synergies from combined operations of the acquisitions and the Company. The following table presents the changes in the carrying amount of goodwill:
(In millions) |
|
Foodservice |
|
|
Vistar |
|
|
Other |
|
|
Total |
|
Balance as of July 1, 2017 |
|
$ |
614.5 |
|
|
$ |
64.9 |
|
|
$ |
39.2 |
|
|
$ |
718.6 |
|
Acquisitions—current year |
|
|
— |
|
|
|
21.3 |
|
|
|
— |
|
|
|
21.3 |
|
Adjustment related to prior year acquisitions |
|
|
0.6 |
|
|
|
— |
|
|
|
— |
|
|
|
0.6 |
|
Balance as of June 30, 2018 |
|
|
615.1 |
|
|
|
86.2 |
|
|
|
39.2 |
|
|
|
740.5 |
|
Acquisitions—current year |
|
|
0.6 |
|
|
|
24.9 |
|
|
|
- |
|
|
|
25.5 |
|
Adjustment related to prior year acquisitions |
|
|
- |
|
|
|
(0.2 |
) |
|
|
- |
|
|
|
(0.2 |
) |
Balance as of June 29, 2019 |
|
$ |
615.7 |
|
|
$ |
110.9 |
|
|
$ |
39.2 |
|
|
$ |
765.8 |
|
The fiscal 2019 and fiscal 2018 adjustments related to prior year acquisitions are the result of net working capital adjustments.
The following table presents the Company’s intangible assets by major category as of June 29, 2019 and June 30, 2018:
|
|
As of June 29, 2019 |
|
|
As of June 30, 2018 |
(In millions) |
|
Gross
Carrying
Amount |
|
|
Accumulated
Amortization |
|
|
Net |
|
|
Gross
Carrying
Amount |
|
|
Accumulated
Amortization |
|
|
Net |
|
|
Range of
Lives |
Intangible assets with definite lives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer relationships |
|
$ |
506.0 |
|
|
$ |
(389.5 |
) |
|
$ |
116.5 |
|
|
$ |
477.3 |
|
|
$ |
(360.4 |
) |
|
$ |
116.9 |
|
|
4 – 11 years |
Trade names and trademarks |
|
|
123.7 |
|
|
|
(100.4 |
) |
|
|
23.3 |
|
|
|
106.0 |
|
|
|
(95.4 |
) |
|
$ |
10.6 |
|
|
4 – 9 years |
Deferred financing costs |
|
|
51.0 |
|
|
|
(40.7 |
) |
|
|
10.3 |
|
|
|
45.5 |
|
|
|
(38.0 |
) |
|
$ |
7.5 |
|
|
Debt term |
Non-compete |
|
|
35.8 |
|
|
|
(22.5 |
) |
|
|
13.3 |
|
|
|
31.2 |
|
|
|
(17.8 |
) |
|
$ |
13.4 |
|
|
2 – 5 years |
Leases |
|
|
12.5 |
|
|
|
(7.2 |
) |
|
|
5.3 |
|
|
|
12.5 |
|
|
|
(6.6 |
) |
|
$ |
5.9 |
|
|
Lease term |
Technology |
|
|
26.1 |
|
|
|
(26.1 |
) |
|
|
— |
|
|
|
26.1 |
|
|
|
(26.1 |
) |
|
|
— |
|
|
5 – 7 years |
Total intangible assets with definite lives |
|
$ |
755.1 |
|
|
$ |
(586.4 |
) |
|
$ |
168.7 |
|
|
$ |
698.6 |
|
|
$ |
(544.3 |
) |
|
$ |
154.3 |
|
|
|
Intangible assets with indefinite lives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
$ |
765.8 |
|
|
$ |
— |
|
|
$ |
765.8 |
|
|
$ |
740.5 |
|
|
$ |
— |
|
|
$ |
740.5 |
|
|
Indefinite |
Trade names |
|
|
25.6 |
|
|
|
— |
|
|
|
25.6 |
|
|
|
39.5 |
|
|
|
— |
|
|
|
39.5 |
|
|
Indefinite |
Total intangible assets with indefinite lives |
|
$ |
791.4 |
|
|
$ |
— |
|
|
$ |
791.4 |
|
|
$ |
780.0 |
|
|
$ |
— |
|
|
$ |
780.0 |
|
|
|
For the intangible assets with definite lives, the Company recorded amortization expense of $42.1 million for fiscal 2019, $33.3 million for fiscal 2018, and $37.7 million for fiscal 2017. For the next five fiscal periods and thereafter, the estimated future amortization expense on intangible assets with definite lives are as follows:
(In millions) |
|
|
|
|
2020 |
|
$ |
37.7 |
|
2021 |
|
|
37.9 |
|
2022 |
|
|
33.9 |
|
2023 |
|
|
21.8 |
|
2024 |
|
|
16.3 |
|
Thereafter |
|
|
21.1 |
|
Total amortization expense |
|
$ |
168.7 |
|
|