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Goodwill and Other Intangible Assets | 12 Months Ended
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May 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | NOTE C — GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill, by reportable segment, for the years ended May 31, 2023 and 2022, are as follows:
|  | CPG |  |  | PCG |  |  | Consumer |  |  | SPG |  |  |  |
(In thousands) |  | Segment |  |  | Segment |  |  | Segment |  |  | Segment |  |  | Total |
Balance as of June 1, 2021 |  | $ | 443,515 |  |  | $ | 207,038 |  |  | $ | 525,230 |  |  | $ | 169,971 |  |  | $ | 1,345,754 |
Acquisitions |  |  | 24,539 |  |  |  | 5,342 |  |  |  | - |  |  |  | 866 |  |  |  | 30,747 |
Translation adjustments & other |  |  | (14,403 | ) |  |  | (10,565 | ) |  |  | (9,633 | ) |  |  | (4,032 | ) |  |  | (38,633 | )
Balance as of May 31, 2022 |  |  | 453,651 |  |  |  | 201,815 |  |  |  | 515,597 |  |  |  | 166,805 |  |  |  | 1,337,868 |
Acquisitions |  |  | 7,306 |  |  |  | 868 |  |  |  | 16,952 |  |  |  | 281 |  |  |  | 25,407 |
Divestitures |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (15,723 | ) |  |  | (15,723 | )
Impairments |  |  | - |  |  |  | (36,745 | ) |  |  | - |  |  |  | - |  |  |  | (36,745 | )
Translation adjustments & other |  |  | (10,402 | ) |  |  | (4,206 | ) |  |  | (1,322 | ) |  |  | (1,289 | ) |  |  | (17,219 | )
Balance as of May 31, 2023 |  | $ | 450,555 |  |  | $ | 161,732 |  |  | $ | 531,227 |  |  | $ | 150,074 |  |  | $ | 1,293,588 |
Total accumulated goodwill impairment losses were $193.0 million at May 31, 2023. Of the accumulated balance, $141.4 million is included in our SPG segment, $14.9 million is included in our CPG segment, and $36.7 million is included in our PCG segment. There were no impairment losses recorded during fiscal 2022 or 2021. In August 2022, we announced our MAP 2025 operational improvement initiative. Initial phases of the plan focused on commercial initiatives, operational efficiencies, and procurement. However, as previously disclosed, due to the challenged macroeconomic environment, we evaluated certain business restructuring actions, specifically our go to market strategy for operating in Europe. During the third quarter of fiscal 2023, due to declining profitability and regulatory headwinds, management decided to restructure the USL reporting unit within our PCG segment and is correspondingly exploring strategic alternatives for our USL infrastructure services business within the U.K., which represents approximately 30% of annual revenues of the reporting unit. Due to this decision, we determined that an interim goodwill impairment assessment was required, as well as an impairment assessment for our other long-lived assets. Accordingly, we recorded an impairment loss totaling $36.7 million for the impairment of goodwill and $2.5 million for the impairment of an indefinite-lived tradename in our USL reporting unit during the third quarter of fiscal 2023. We did not record any impairments for our definite-lived long-lived assets as a result of this assessment. Our goodwill impairment assessment included estimating the fair value of our USL reporting unit and comparing it with its carrying amount at February 28, 2023. Since the carrying amount of the USL reporting unit exceeded its fair value, we recognized an impairment loss. We estimated the fair value of the USL reporting unit using both the income and the market approaches. For the income approach, we estimated the fair value of our USL reporting unit by applying a discounted future cash flow calculation to USL’s projected EBITDA. In applying this methodology, we relied on a number of factors, including actual and forecasted operating results, future operating margins, and market data. The discounted cash flow used in the goodwill impairment test for USL assumed discrete period revenue growth through fiscal 2027 for the ongoing USL businesses in the U.K. and North America as well as probability-weighted cash flows that were dependent on the methodology utilized in determining strategic alternatives for the U.K. infrastructure services business. In applying the market approach, we used market multiples derived from a set of companies similar to USL. After recording the goodwill impairment charge of $36.7 million, $1.1 million of goodwill remains on the USL balance sheet as of May 31, 2023. Calculating the fair value of the USL’s indefinite-lived tradenames required the use of various estimates and assumptions. We estimated the fair value of USL’s indefinite-lived tradenames by applying a relief-from-royalty calculation, which included discounted future cash flows related to projected revenues for those USL tradenames impacted by this decision. In applying this methodology, we relied on a number of factors, including actual and forecasted revenues and market data. As the carrying amount of one of the tradenames exceeded its fair value, an impairment loss of $2.5 million was recorded during fiscal 2023. This impairment loss was classified in restructuring expense within our PCG segment. The impairment assessment for our long-lived assets, such as property and equipment and purchased intangibles subject to amortization, involved estimating the fair value of USL’s long-lived assets and comparing it with its carrying amount. Measuring a potential impairment of long-lived assets requires the use of various estimates and assumptions, including the determination of which cash flows are directly related to the assets being evaluated, the respective useful lives over which those cash flows will occur and potential residual values, if any. The results of our testing indicated that the carrying values of these assets were recoverable, as such we did not record an impairment of our long-lived assets during fiscal 2023. Any changes to underlying assumptions used in USL's goodwill impairment assessment, including if the financial performance of the reporting unit does not meet expectations in future years or changes in management's methodology utilized in determining strategic alternatives for the U.K. infrastructure services business, may cause a change to the results of the impairment assessment in future periods and, as such, could result in an impairment of goodwill or other long-lived assets. Other intangible assets consist of the following major classes:
|  |  |  | Gross |  |  |  |  |  | Net Other |
|  | Amortization |  | Carrying |  |  | Accumulated |  |  | Intangible |
(In thousands) |  | Period (In Years) |  | Amount |  |  | Amortization |  |  | Assets |
As of May 31, 2023 |  |  |  |  |  |  |  |  |  |  |
Amortized intangible assets |  |  |  |  |  |  |  |  |  |  |
Formulae |  | 9 to 33 |  | $ | 236,486 |  |  | $ | (190,981 | ) |  | $ | 45,505 |
Customer-related intangibles |  | 5 to 33 |  |  | 506,618 |  |  |  | (275,369 | ) |  |  | 231,249 |
Trademarks/names |  | 5 to 40 |  |  | 35,374 |  |  |  | (23,792 | ) |  |  | 11,582 |
Other |  | 3 to 30 |  |  | 32,583 |  |  |  | (27,329 | ) |  |  | 5,254 |
Total Amortized Intangibles |  |  |  |  | 811,061 |  |  |  | (517,471 | ) |  |  | 293,590 |
Indefinite-lived intangible assets |  |  |  |  |  |  |  |  |  |  |
Trademarks/names |  |  |  |  | 261,401 |  |  |  | - |  |  |  | 261,401 |
Total Other Intangible Assets |  |  |  | $ | 1,072,462 |  |  | $ | (517,471 | ) |  | $ | 554,991 |
As of May 31, 2022 |  |  |  |  |  |  |  |  |  |  |
Amortized intangible assets |  |  |  |  |  |  |  |  |  |  |
Formulae |  | 9 to 33 |  | $ | 234,366 |  |  | $ | (181,983 | ) |  | $ | 52,383 |
Customer-related intangibles |  | 5 to 33 |  |  | 508,143 |  |  |  | (257,219 | ) |  |  | 250,924 |
Trademarks/names |  | 5 to 40 |  |  | 35,957 |  |  |  | (21,588 | ) |  |  | 14,369 |
Other |  | 3 to 30 |  |  | 33,331 |  |  |  | (26,831 | ) |  |  | 6,500 |
Total Amortized Intangibles |  |  |  |  | 811,797 |  |  |  | (487,621 | ) |  |  | 324,176 |
Indefinite-lived intangible assets |  |  |  |  |  |  |  |  |  |  |
Trademarks/names |  |  |  |  | 268,085 |  |  |  | - |  |  |  | 268,085 |
Total Other Intangible Assets |  |  |  | $ | 1,079,882 |  |  | $ | (487,621 | ) |  | $ | 592,261 |
The aggregate intangible asset amortization expense for the fiscal years ended May 31, 2023, 2022 and 2021 was $43.5 million, $45.7 million and $44.3 million, respectively. For the next five fiscal years, we estimate annual intangible asset amortization expense related to our existing intangible assets to approximate the following: fiscal 2024 — $38.9 million, fiscal 2025 — $34.3 million, fiscal 2026 — $30.9 million, fiscal 2027 — $29.2 million and fiscal 2028 — $27.0 million.

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI https://asc.fasb.org/topic&trid=2144416 + Details
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