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Goodwill and Other Intangible Assets | 12 Months Ended
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Jan. 03, 2015
Goodwill and Other Intangible Assets |
Note 7. | Goodwill and Other Intangible Assets
The table below summarizes our goodwill and other intangible assets at January 3, 2015 and December 28, 2013, respectively, each of which is explained in additional detail below (amounts in thousands):
|  | January 3, 2015 |  |  | December 28, 2013 |
Goodwill |  | $ | 282,960 |  |  | $ | 282,404 |
Amortizable intangible assets, net of amortization |  |  | 189,969 |  |  |  | 201,710 |
Indefinite-lived intangible assets |  |  | 455,000 |  |  |  | 455,000 |
Total goodwill and other intangible assets |  | $ | 927,929 |  |  | $ | 939,114 |
The changes in the carrying amount of goodwill, by segment, during fiscal 2013 and fiscal 2014, are as follows (amounts in thousands):
|  | DSD Segment |  |  | Warehouse Segment |  |  | Total |
Balance as of December 29, 2012 |  | $ | 265,420 |  |  | $ | 4,477 |  |  | $ | 269,897 |
Change in goodwill related to acquisitions |  |  | 12,507 |  |  |  | — |  |  |  | 12,507 |
Balance as of December 28, 2013 |  | $ | 277,927 |  |  | $ | 4,477 |  |  | $ | 282,404 |
Goodwill impairment |  |  | (2,624 | ) |  |  | — |  |  |  | (2,624 | )
Change in goodwill related to an acquisition |  |  | 3,180 |  |  |  | — |  |  |  | 3,180 |
Balance as of January 3, 2015 |  | $ | 278,483 |  |  | $ | 4,477 |  |  | $ | 282,960 |
The segment goodwill balances as of December 28, 2013 and December 29, 2012 have been recast by $2.6 million for a plant that was changed from the Warehouse Segment to the DSD Segment during the first quarter of fiscal 2014. The $2.6 million goodwill impairment is discussed in Note 6, Assets Held For Sale, and relates to a portion of the DSD Segment’s goodwill allocated to the disposal group. The table below presents the changes to goodwill by acquisition from December 29, 2012 to December 28, 2013 (amounts in thousands):
|  | Modesto |  |  | Acquired Hostess Assets |  |  | Lepage |  |  | Other |  |  | Total |
Working capital adjustments |  | $ | — |  |  | $ | — |  |  | $ | 315 |  |  | $ | — |  |  | $ | 315 |
Acquisition-related tax adjustments |  |  | — |  |  |  | — |  |  |  | (1,016 | ) |  |  | — |  |  |  | (1,016 | )
Adjustment to assets held for sale |  |  | — |  |  |  | — |  |  |  | 63 |  |  |  | — |  |  |  | 63 |
Adjustment for accrued liabilities |  |  | — |  |  |  | — |  |  |  | 2,394 |  |  |  | — |  |  |  | 2,394 |
Adjustment to property, plant and equipment |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,123 |  |  |  | 1,123 |
Acquisitions during fiscal 2013 |  |  | 4,209 |  |  |  | 5,419 |  |  |  | — |  |  |  | — |  |  |  | 9,628 |
Change in goodwill during fiscal 2013 |  | $ | 4,209 |  |  | $ | 5,419 |  |  | $ | 1,756 |  |  | $ | 1,123 |  |  | $ | 12,507 |
The table below presents the changes to goodwill by acquisition from December 28, 2013 to January 3, 2015 (amounts in thousands):
|  | Acquired Hostess Assets |
Adjustment for spare parts and final fair value assessment |  | $ | (3,503 | )
Adjustment to property, plant and equipment |  |  | 6,683 |
Change in goodwill during fiscal 2014 |  | $ | 3,180 |
The Modesto bun line, Acquired Hostess Bread Assets, and Lepage acquisitions are discussed in Note 8, Acquisitions, below. Changes were made to goodwill during fiscal 2013 to correct errors for certain prior period acquisitions that are past their measurement periods. Lepage goodwill increased by $0.9 million for an adjustment to accrued liabilities and was corrected during the fourth quarter of fiscal 2013. Other goodwill increased by $1.1 million for an adjustment to property, plant and equipment and was corrected during the second quarter of fiscal year 2013. We evaluated the impact of these adjustments on our previously issued financial statements for each of the periods affected and concluded that the impact was not material. As of January 3, 2015 and December 28, 2013, the company had the following amounts related to amortizable intangible assets (amounts in thousands):
|  | January 3, 2015 |  |  | December 28, 2013 |
Asset |  | Cost |  |  | Accumulated Amortization |  |  | Net Value |  |  | Cost |  |  | Accumulated Amortization |  |  | Net Value |
Trademarks |  | $ | 71,727 |  |  | $ | 14,152 |  |  | $ | 57,575 |  |  | $ | 71,727 |  |  | $ | 11,697 |  |  | $ | 60,030 |
Customer relationships |  |  | 169,921 |  |  |  | 41,099 |  |  |  | 128,822 |  |  |  | 169,921 |  |  |  | 32,688 |  |  |  | 137,233 |
Non-compete agreements |  |  | 4,274 |  |  |  | 3,351 |  |  |  | 923 |  |  |  | 4,274 |  |  |  | 2,751 |  |  |  | 1,523 |
Distributor relationships |  |  | 4,123 |  |  |  | 1,474 |  |  |  | 2,649 |  |  |  | 4,123 |  |  |  | 1,199 |  |  |  | 2,924 |
Supplier agreements |  |  | 1,050 |  |  |  | 1,050 |  |  |  | — |  |  |  | 1,050 |  |  |  | 1,050 |  |  |  | — |
Total |  | $ | 251,095 |  |  | $ | 61,126 |  |  | $ | 189,969 |  |  | $ | 251,095 |  |  | $ | 49,385 |  |  | $ | 201,710 |
As of January 3, 2015 and December 28, 2013, there was $455.0 million of indefinite-lived intangible trademark assets separately identified from goodwill. These trademarks are classified as indefinite-lived because they are well established brands, many older than forty years old with a long history and well defined markets. In addition, we are continuing to use these brands both in their original markets and throughout our expansion territories. We believe these factors support an indefinite-life assignment with an annual impairment analysis to determine if the trademarks are realizing the expected economic benefits. Net amortization expense for fiscal 2014, 2013, and 2012 was as follows (amounts in thousands):
|  | Fiscal 2014 |  |  | Fiscal 2013 |  |  | Fiscal 2012 |
Total |  | $ | 11,741 |  |  | $ | 11,741 |  |  | $ | 9,253 |
Estimated amortization of intangibles for 2015 and the next four years thereafter is as follows (amounts in thousands):
|  | Amortization of Intangibles |
2015 |  | $ | 11,495 |
2016 |  | $ | 11,052 |
2017 |  | $ | 10,580 |
2018 |  | $ | 10,432 |
2019 |  | $ | 10,283 |

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- Definition The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16323-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16265-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13854-109267 + Details
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