GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

9 Months Ended

Feb. 23, 2025

GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

7. GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

The change in the carrying amount of goodwill for the first three quarters of fiscal 2025, excluding amounts classified as held for sale (see Note 3), was as follows:

	Grocery & Snacks		Refrigerated & Frozen		International		Foodservice		Total
Balance as of May 26, 2024	$	4,486.8	$	4,916.6	$	202.4	$	720.1	$	10,325.9
Acquisitions		176.2		—		—		—		176.2
Currency translation		—		—		(2.3)		—		(2.3)
Balance as of February 23, 2025	$	4,663.0	$	4,916.6	$	200.1	$	720.1	$	10,499.8

Other identifiable intangible assets, excluding amounts classified as held for sale, were as follows:

	February 23, 2025				May 26, 2024
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
Non-amortizing intangible assets
Brands and trademarks	$	1,853.7	$	—	$	1,816.8	$	—
Amortizing intangible assets
Customer relationships and intellectual property		1,214.9		581.5		1,210.6		542.6
	$	3,068.6	$	581.5	$	3,027.4	$	542.6

During the second quarter of fiscal 2025, we reorganized our reporting units in the Refrigerated & Frozen and Grocery & Snacks segments. This required us to reassign assets and liabilities between the reporting units, assess whether there were indicators of impairment for the impacted reporting units, and evaluate other assets in the reporting units for impairment, including indefinite-lived intangibles (brand names and trademarks).

The fair value of our reporting units is typically estimated using a discounted cash flow method. The fair value of our indefinite-lived intangibles is determined using the "relief from royalty" methodology. Both the “relief from royalty” methodology and the discounted cash flow method require us to estimate the future cash flows as well as to select a risk-adjusted discount rate to measure the present value of the anticipated cash flows. When determining future cash flow estimates, we consider historical results adjusted to reflect current and anticipated operating conditions. We estimate cash flows for a reporting unit over a discrete period (typically five years) and a terminal period (considering expected long-term growth rates and trends). We used a discount rate of 7.50% and a terminal growth rate that ranged between 1% to 1.5% in estimating the fair value of our reporting units. Estimating the fair value of individual reporting units and our indefinite-lived intangible assets requires us to make assumptions and estimates in areas such as future economic conditions, industry-specific conditions, product pricing, and necessary capital expenditures. The use of different assumptions or estimates for future cash flows, discount rates, or terminal growth rates could produce substantially different estimates of the fair value.

As a result of our impairment tests, in the second quarter of fiscal 2025 we recognized impairment charges of $18.9 million for certain brands with continued lower than expected sales and profit margins. These charges were recorded within other intangible asset impairment charges in our Grocery & Snacks and Refrigerated & Frozen segments. There were no impairments to goodwill.

Amortizing intangible assets carry a remaining weighted average life of approximately 17 years. Amortization expense was $13.5 million and $40.4 million for the third quarter and first three quarters of fiscal 2025, respectively, and $13.4 million and $40.2 million for the third quarter and first three quarters of fiscal 2024, respectively. Based on amortizing assets recognized in our Condensed Consolidated Balance Sheet as of February 23, 2025, amortization expense is estimated to average $41.9 million for each of the next five years.