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Goodwill and Other Intangible Assets
12 Months Ended
Dec. 29, 2018
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets

Note 5 – Goodwill and Other Intangible Assets

The Company has three reportable segments; however, no goodwill has existed within the Military segment. Changes in the carrying amount of goodwill were as follows:

 

Food

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

Distribution

 

 

Retail

 

 

 

Total

 

 

Balance at December 31, 2016:

$

 

132,367

 

 

$

 

190,319

 

(a)

 

$

 

322,686

 

(a)

Acquisitions (Note 2)

 

 

46,281

 

 

 

 

 

 

 

 

 

46,281

 

 

Disposals

 

 

 

 

 

 

(1,292

)

 

 

 

 

(1,292

)

 

Impairment

 

 

 

 

 

 

(189,027

)

 

 

 

 

(189,027

)

 

Balance at December 30, 2017 and December 29, 2018:

$

 

178,648

 

 

$

 

 

(b)

 

$

 

178,648

 

(b)

  (a)

Net of accumulated impairment charges of $86.6 million.

  (b)

Net of accumulated impairment charges of $275.6 million.

The Company reviews goodwill and other intangible assets for impairment annually, during the fourth quarter of each year, and more frequently if circumstances indicate the possibility of impairment. Testing goodwill and other intangible assets for impairment requires management to make significant estimates about the Company’s future performance, cash flows, and other assumptions that can be affected by potential changes in economic, industry or market conditions, business operations, competition, or the Company’s stock price and market capitalization.

In 2017, the Company experienced significantly lower than expected Retail operating results and it was determined that the carrying value of the Retail segment exceeded its fair value. Consequently, the Company recorded a goodwill impairment charge of $189.0 million in the third quarter of 2017. The Company completed its current year impairment analysis in the fourth quarter, which did not result in the identification of any goodwill impairment.

The following table reflects the components of amortized intangible assets, included in “Intangible assets, net” on the consolidated balance sheets:

 

 

 

December 29, 2018

 

 

December 30, 2017

 

 

 

 

Gross

 

 

 

 

 

 

 

Gross

 

 

 

 

 

 

 

 

 

Carrying

 

 

Accumulated

 

 

Carrying

 

 

Accumulated

 

(In thousands)

 

 

Amount

 

 

Amortization

 

 

Amount

 

 

Amortization

 

Non-compete agreements

 

 

 

$

 

3,358

 

 

$

 

886

 

 

$

 

3,408

 

 

$

 

397

 

Favorable leases

 

 

 

 

 

7,738

 

 

 

 

4,282

 

 

 

 

8,251

 

 

 

 

4,332

 

Pharmacy customer prescription lists

 

 

 

 

 

6,354

 

 

 

 

4,377

 

 

 

 

6,810

 

 

 

 

4,210

 

Customer relationships

 

 

 

 

 

57,937

 

 

 

 

7,835

 

 

 

 

57,937

 

 

 

 

4,173

 

Trade names

 

 

 

 

 

1,068

 

 

 

 

536

 

 

 

 

1,068

 

 

 

 

386

 

Franchise fees and other

 

 

 

 

 

1,064

 

 

 

 

422

 

 

 

 

1,047

 

 

 

 

381

 

Total

 

 

 

$

 

77,519

 

 

$

 

18,338

 

 

$

 

78,521

 

 

$

 

13,879

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The weighted average amortization periods for amortizable intangible assets as of December 29, 2018 are as follows:

Non-compete agreements

 

 

 

 

 

 

 

 

 

 

 

 

 

6.3 years

Favorable leases

 

 

 

 

 

 

 

 

 

 

 

 

 

15.2 years

Pharmacy customer prescription lists

 

 

 

 

 

 

 

 

 

 

 

 

 

8.1 year

Customer relationships

 

 

 

 

 

 

 

 

 

 

 

 

 

16.1 years

Trade names

 

 

 

 

 

 

 

 

 

 

 

 

 

7.0 years

Franchise fees and other

 

 

 

 

 

 

 

 

 

 

 

 

 

9.6 years

Amortization expense for intangible assets was $5.8 million, $5.5 million and $3.0 million for 2018, 2017 and 2016, respectively.

Estimated amortization expense for each of the five succeeding fiscal years is as follows:

(In thousands)

2019

 

 

2020

 

 

2021

 

 

2022

 

 

2023

 

Amortization expense

$

 

5,654

 

 

$

 

5,300

 

 

$

 

4,672

 

 

$

 

4,403

 

 

$

 

4,314

 

Indefinite-lived intangible assets that are not amortized, consisting primarily of trade names and licenses for the sale of alcoholic beverages, totaled $69.7 million and $69.8 million as of December 29, 2018 and December 30, 2017, respectively.