GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Aug. 25, 2019

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

(3) Goodwill and Other Intangible Assets

The components of goodwill and other intangible assets are as follows:

In Millions		Aug. 25, 2019		May 26, 2019
Goodwill	$	13,983.6	$	13,995.8
Other intangible assets:
Intangible assets not subject to amortization:
Brands and other indefinite-lived intangibles		6,586.5		6,590.8
Intangible assets subject to amortization:
Franchise agreements, customer relationships, and other finite-lived intangibles		782.4		786.1
Less accumulated amortization		(217.5)		(210.1)
Intangible assets subject to amortization, net		564.9		576.0
Other intangible assets		7,151.4		7,166.8
Total	$	21,135.0	$	21,162.6

Based on the carrying value of finite-lived intangible assets as of August 25, 2019, annual amortization expense for each of the next five fiscal years is estimated to be approximately $40 million.The changes in the carrying amount of goodwill during the first quarter of fiscal 2020 were as follows:

In Millions		North America Retail		Pet		Convenience Stores & Foodservice		Europe & Australia		Asia & Latin America		Joint Ventures		Total
Balance as of May 26, 2019	$	6,406.5	$	5,300.5	$	918.8	$	700.4	$	260.2	$	409.4	$	13,995.8
Other activity, primarily foreign
currency translation		1.3		-		-		(7.7)		(3.7)		(2.1)		(12.2)
Balance as of Aug. 25, 2019	$	6,407.8	$	5,300.5	$	918.8	$	692.7	$	256.5	$	407.3	$	13,983.6

The changes in the carrying amount of other intangible assets during the first quarter of fiscal 2020 were as follows:

In Millions		Total
Balance as of May 26, 2019	$	7,166.8
Other activity, primarily foreign currency translation		(15.4)
Balance as of Aug. 25, 2019	$	7,151.4

Our annual goodwill and indefinite-lived intangible assets test was performed as of the first day of the second quarter of fiscal 2019. As a result of lower sales projections in our long-range plans for the businesses supporting the Progresso, Food Should Taste Good, and Mountain High brand intangible assets, we recorded the following impairment charges:

In Millions		Impairment Charge		Fair Value as of Nov. 25, 2018 (a)
Progresso	$	132.1	$	330.0
Food Should Taste Good		45.1		-
Mountain High		15.4		-
Total	$	192.6	$	330.0
(a) Level 3 assets in the fair value hierarchy.

Significant assumptions used in that assessment included our long-range cash flow projections for the businesses, royalty rates, weighted average cost of capital rates, and tax rates.

Our Latin America reporting unit and the Yoki brand intangible asset had fair values that were not substantially in excess of the carrying values. The excess fair value as of the fiscal 2019 test date of the Latin America reporting unit and the Yoki brand intangible asset were as follows:

In Millions		Carrying Value of Intangible Asset	Excess Fair Value as of Fiscal 2019 Test Date
Latin America	$	209.0	7%
Yoki	$	49.1	10%

While having significant coverage as of our fiscal 2019 assessment date, the Pillsbury brand intangible asset and U.S. Yogurt reporting unit had risk of decreasing coverage. We will continue to monitor these businesses for potential impairment.