Distribution Agreements, Net

12 Months Ended

Dec. 30, 2018

Other Identifiable Intangible Assets Net

10.	Distribution Agreements, Net

Distribution agreements, net, which are amortized on a straight-line basis and have an estimated useful life of 10 to 40 years, consisted of the following:

(in thousands)	December 30, 2018		December 31, 2017
Distribution agreements at cost	$	950,559	$	939,527
Less: Accumulated amortization		50,176		26,175
Distribution agreements, net	$	900,383	$	913,352

A reconciliation of the activity for distribution agreements, net in 2018 and 2017 is as follows:

	Fiscal Year
(in thousands)	2018			2017
Beginning balance - distribution agreements, net	$	913,352		$	234,988
Conversion to distribution rights from franchise rights		-			533,040
2017 System Transformation Transactions acquisitions⁽¹⁾		-			213,000
October 2017 Divestitures		-			(65,043	)
Measurement period adjustment⁽²⁾		4,700			16,000
Other distribution agreements		6,332			44
Additional accumulated amortization		(24,001	)		(18,677	)
Ending balance - distribution agreements, net	$	900,383		$	913,352

⁽¹⁾

2017 System Transformation Transactions acquisitions includes an increase of $51.5 million in 2017 from the opening balance sheets for distribution territories and regional manufacturing facilities acquired in the System Transformation during 2017, as disclosed in the financial statements in the Company’s filed periodic reports. These adjustments are for post-closing adjustments made in accordance with the terms and conditions of the applicable asset purchase agreement or asset exchange agreement for each System Transformation Transaction. The adjustments to amortization expense associated with these measurement period adjustments were not material to the consolidated financial statements.

⁽²⁾

Measurement period adjustment relates to post-closing adjustments made in accordance with the terms and conditions of the applicable asset purchase agreement or asset exchange agreement for each System Transformation Transaction. The adjustments to amortization expense associated with this measurement period adjustment were not material to the consolidated financial statements.

Concurrent with its entrance into the CBA in the first quarter of 2017, the Company converted its franchise rights for the territories it served prior to the System Transformation to distribution rights with an estimated useful life of 40 years.

Assuming no impairment of distribution agreements, net, amortization expense in future years based upon recorded amounts as of December 30, 2018 will be $24.3 million for each fiscal year 2019 through 2023.