XML 19 R8.htm IDEA: XBRL DOCUMENT
v3.20.2

Goodwill and Other Intangible Assets | 9 Months Ended
--- | ---
Jun. 26, 2020
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS: Goodwill represents the excess of the fair value of consideration paid for an acquired entity over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is not amortized and is subject to an impairment test that the Company conducts annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists, using discounted cash flows. During the second quarter of fiscal 2020, the Company identified a triggering event from the decline in its stock price resulting from COVID-19. As a result, the Company performed an interim quantitative impairment test as of March 27, 2020. The Company performed its assessment of goodwill at the reporting unit level. Within the FSS International segment, each country or region was evaluated separately since such operating units are relatively autonomous and separate goodwill balances have been recorded for each entity. The Company compared the estimated fair value using discounted cash flow calculations of each reporting unit with its estimated book value. Based on the evaluation performed, the Company determined that goodwill was not impaired for all but one reporting unit, as the fair value of each reporting unit substantially exceeded its respective carrying amount. The one reporting unit within the FSS International segment for which goodwill was determined to be impaired was also tested for impairment using the quantitative approach during the Company's previous annual impairment test completed as of August 23, 2019. The reporting unit had a fair value that exceeded its carrying value by approximately 22% as of that date. As of March 27, 2020, the quantitative impairment test for this same reporting unit resulted in a fair value that was approximately 34% lower than its carrying value, which was driven most notably by the changes in underlying assumptions used for impairment calculation purposes, including the discount rate as well as the near term growth outlook of the reporting unit pre-COVID-19. As a result, the Company recognized a non-cash impairment charge of $198.6 million in the Condensed Consolidated Statements of (Loss) Income for the nine months ended June 26, 2020. For tax purposes, the impairment charge is not tax deductible. The impaired reporting unit has a remaining goodwill balance of $86.3 million as of June 26, 2020. No triggering events were identified during the third quarter of fiscal 2020 that caused similar impairment testing to be performed. The determination of fair value for each reporting unit includes assumptions, which are considered Level 3 inputs, that are subject to risk and uncertainty. The discounted cash flow calculations are dependent on several subjective factors including the timing of future cash flows, future growth rates and the discount rate. If assumptions or estimates in the fair value calculations change or if future cash flows or future growth rates vary from what was expected, including those assumptions relating to the duration and severity of COVID-19, this may impact the impairment analysis and could reduce the underlying cash flows used to estimate fair values and result in a decline in fair value that may trigger future impairment charges. Changes in total goodwill during the nine months ended June 26, 2020 are as follows (in thousands):
Segment | September 27, 2019 |  | Acquisitions |  | Impairments |  | Translation |  | June 26, 2020
FSS United States | $ | 3,949,218 |  |  | $ | 772 |  |  | $ | — |  |  | $ | (35) |  |  | $ | 3,949,955 |
FSS International | 608,468 |  |  | 220 |  |  | (198,600) |  |  | 483 |  |  | 410,571 |
Uniforms | 961,114 |  |  | 3,713 |  |  | — |  |  | (305) |  |  | 964,522 |
| $ | 5,518,800 |  |  | $ | 4,705 |  |  | $ | (198,600) |  |  | $ | 143 |  |  | $ | 5,325,048 |
Other intangible assets consist of the following (in thousands):
| June 26, 2020 |  |  |  |  |  | September 27, 2019 |  |  |  |
| Gross Amount |  | Accumulated Amortization |  | Net Amount |  | Gross Amount |  | Accumulated Amortization |  | Net Amount
Customer relationship assets | $ | 2,191,986 |  |  | $ | (1,275,234) |  |  | $ | 916,752 |  |  | $ | 2,183,492 |  |  | $ | (1,193,525) |  |  | $ | 989,967 |
Trade names | 1,048,228 |  |  | (6,945) |  |  | 1,041,283 |  |  | 1,047,959 |  |  | (4,360) |  |  | 1,043,599 |
| $ | 3,240,214 |  |  | $ | (1,282,179) |  |  | $ | 1,958,035 |  |  | $ | 3,231,451 |  |  | $ | (1,197,885) |  |  | $ | 2,033,566 |
Amortization of intangible assets for the nine months ended June 26, 2020 and June 28, 2019 was approximately $87.4 million and $87.7 million, respectively. The Aramark, Avendra and a majority of the other trade names are indefinite lived intangible assets and are not amortizable but are evaluated for impairment at least annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. During the second quarter of fiscal 2020, the Company identified potential impairment indicators from the decline in its stock price resulting from COVID-19. As a result, the Company completed an interim trade name impairment test for the Avendra and certain other trade names as of March 27, 2020. The Company utilized the "relief-from-royalty" method, which considers the discounted estimated royalty payments that are expected to be avoided as a result of the trade names being owned. Based on the evaluation performed, the Company determined that none of the trade names were impaired, as the estimated fair value for each of the Avendra and certain other trade names exceeded their respective carrying amounts.

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration