GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

May 31, 2020

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 6. GOODWILL AND OTHER INTANGIBLE ASSETS

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

In Millions		May 31, 2020		May 26, 2019
Goodwill	$	13,923.2	$	13,995.8
Other intangible assets:
Intangible assets not subject to amortization:
Brands and other indefinite-lived intangibles		6,561.4		6,590.8
Intangible assets subject to amortization:
Franchise agreements, customer relationships, and other finite-lived intangibles		777.8		786.1
Less accumulated amortization		(243.4)		(210.1)
Intangible assets subject to amortization		534.4		576.0
Other intangible assets		7,095.8		7,166.8
Total	$	21,019.0	$	21,162.6

Based on the carrying value of finite-lived intangible assets as of May 31, 2020, 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 for fiscal 2018, 2019, and 2020 are as follows:

In Millions	North America Retail		Pet		Convenience Stores & Foodservice		Europe & Australia		Asia & Latin America		Joint Ventures		Total
Balance as of May 28, 2017	$	6,406.5	$	-	$	918.8	$	700.8	$	312.4	$	408.7	$	8,747.2
Acquisition		-		5,294.9		-		-		-		-		5,294.9
Other activity, primarily foreign currency translation		4.1		-		-		29.1		(27.4)		17.1		22.9
Balance as of May 27, 2018		6,410.6		5,294.9		918.8		729.9		285.0		425.8		14,065.0
Divestitures		-		-		-		-		(0.5)		-		(0.5)
Purchase accounting adjustment		-		5.6		-		-		-		-		5.6
Other activity, primarily foreign currency translation		(4.1)		-		-		(29.5)		(24.3)		(16.4)		(74.3)
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		(2.8)		-		-		(9.7)		(56.4)		(3.7)		(72.6)
Balance as of May 31, 2020	$	6,403.7	$	5,300.5	$	918.8	$	690.7	$	203.8	$	405.7	$	13,923.2

The changes in the carrying amount of other intangible assets for fiscal 2018, 2019, and 2020 are as follows:

In Millions		Total
Balance as of May 28, 2017	$	4,530.4
Acquisition		3,015.0
Impairment charge		(96.9)
Other activity, primarily amortization and foreign currency translation		(3.4)
Balance as of May 27, 2018	$	7,445.1
Impairment charge		(192.6)
Other activity, primarily amortization and foreign currency translation		(85.7)
Balance as of May 26, 2019	$	7,166.8
Other activity, primarily amortization and foreign currency translation		(71.0)
Balance as of May 31, 2020	$	7,095.8

Our annual goodwill and indefinite-lived intangible assets impairment test was performed on the first day of the second quarter of fiscal 2020, and we determined there was no impairment of our intangible assets as their related fair values were substantially in excess of the carrying values, except for the Europe & Australia reporting unit and the Progresso brand intangible asset.

The excess fair values as of the fiscal 2020 test date of the Europe & Australia reporting unit and the Progresso brand intangible asset were as follows:

In Millions		Carrying Value of Intangible Asset	Excess Fair Value as of Fiscal 2020 Test Date
Europe & Australia	$	672.6	14	%
Progresso	$	330.0	5	%

In addition, while having significant coverage as of our fiscal 2020 assessment date, the Pillsbury brand intangible asset had risk of decreasing coverage. We will continue to monitor these businesses for potential impairment.

We did not identify any indicators of impairment, including impacts of the recent COVID-19 pandemic, for any goodwill or indefinite-lived intangible assets as of May 31, 2020.

In 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 a $192.6 million impairment charge in restructuring, impairment, and other exit costs. In fiscal 2018, we recorded a $96.9 million charge related to the impairment of our Yoki, Mountain High, and Immaculate Baking brand intangible assets in restructuring, impairment, and other exit costs. Significant assumptions used in these assessments included our long-range cash flow projections for the businesses, royalty rates, weighted-average cost of capital rates, and tax rates.