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Goodwill and Other Intangible Assets | 12 Months Ended
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Dec. 29, 2018
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets |
Note 10. | Goodwill and Other Intangible Assets
The table below summarizes our goodwill and other intangible assets at December 29, 2018 and December 30, 2017, respectively, each of which is explained in additional detail below (amounts in thousands):
|  | December 29, 2018 |  |  | December 30, 2017 |
Goodwill |  | $ | 545,379 |  |  | $ | 464,777 |
Amortizable intangible assets, net of amortization |  |  | 588,329 |  |  |  | 535,842 |
Indefinite-lived intangible assets |  |  | 206,600 |  |  |  | 206,600 |
Total goodwill and other intangible assets |  | $ | 1,340,308 |  |  | $ | 1,207,219 |
The changes in the carrying amount of goodwill, by segment, during fiscal 2017 and fiscal 2018, are as follows (amounts in thousands):
|  | DSD Segment |  |  | Warehouse Segment |  |  | Total |
Balance as of December 31, 2016 |  | $ | 424,563 |  |  | $ | 41,015 |  |  | $ | 465,578 |
Change in goodwill related to divestiture |  |  | — |  |  |  | (801 | ) |  |  | (801 | )
Balance as of December 30, 2017 |  | $ | 424,563 |  |  | $ | 40,214 |  |  | $ | 464,777 |
Change in goodwill related to acquisition |  |  | 57,056 |  |  |  | 23,546 |  |  |  | 80,602 |
Balance as of December 29, 2018 |  | $ | 481,619 |  |  | $ | 63,760 |  |  | $ | 545,379 |
Changes in goodwill during fiscal 2018 relate to the Canyon Bakehouse, LLC (“Canyon”) acquisition in both segments as discussed in Note 11, Acquisition. The changes in goodwill during fiscal 2017 were a result of the divestiture discussed in Note 7, Divestiture. Goodwill was not impaired in fiscal years 2018, 2017, or 2016. As of December 29, 2018 and December 30, 2017, the company had the following amounts related to amortizable intangible assets (amounts in thousands):
|  | December 29, 2018 |  |  | December 30, 2017 |
Asset |  | Cost |  |  | Accumulated Amortization |  |  | Net Value |  |  | Cost |  |  | Accumulated Amortization |  |  | Net Value |
Trademarks |  | $ | 413,092 |  |  | $ | 44,711 |  |  | $ | 368,381 |  |  | $ | 371,392 |  |  | $ | 34,716 |  |  | $ | 336,676 |
Customer relationships |  |  | 318,021 |  |  |  | 99,904 |  |  |  | 218,117 |  |  |  | 281,621 |  |  |  | 84,280 |  |  |  | 197,341 |
Non-compete agreements |  |  | 5,154 |  |  |  | 4,874 |  |  |  | 280 |  |  |  | 4,874 |  |  |  | 4,874 |  |  |  | — |
Distributor relationships |  |  | 4,123 |  |  |  | 2,572 |  |  |  | 1,551 |  |  |  | 4,123 |  |  |  | 2,298 |  |  |  | 1,825 |
Total |  | $ | 740,390 |  |  | $ | 152,061 |  |  | $ | 588,329 |  |  | $ | 662,010 |  |  | $ | 126,168 |  |  | $ | 535,842 |
As of December 29, 2018 and December 30, 2017, there was $206.6 million of indefinite-lived intangible trademark assets separately identified from goodwill. These trademarks are classified as indefinite-lived because there is no foreseeable limit to the period over which the asset is expected to contribute to our cash flows. They are well established brands 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 their expected economic benefits. Fiscal 2017 restructuring and related impairment charges During fiscal 2017, the company recognized intangible asset impairments of $66.2 million that are recorded in the restructuring and related impairment charges line item of our Consolidated Statements of Income. The company is currently undergoing an enterprise-wide business and operational review as discussed in Note 6, Restructuring Activities. The review included a brand rationalization study that impacted certain trademarks’ future use. The study was substantially completed in the third quarter of fiscal 2017. The study concluded that our brands should be classified as either national or regional and brands that did not fit into those categories were to be discontinued. National brands would have more marketing support than the de-emphasized remaining regional brands and in many cases would shift sales from regional brands as certain regional brand bread products are discontinued. As a result of these actions, a triggering event occurred and we examined several trademarks for potential impairment. One of the trademarks was an indefinite-lived trademark asset and was tested by comparing the fair value of the brand to its carrying value. Three finite-lived trademark assets were tested using an undiscounted cash flow test. As a result of this test, the projected cash flows for these brands did not exceed the carrying value. The second step of the test determined the fair value of the asset and the difference between the fair value and the carrying value was recorded as an impairment. The impairment charge also consisted of six brands that either are being discontinued or will have limited future benefits to the company. These brands were fully impaired. All of these impairments were attributed to regional brands. Following the impairments, we evaluated the classification of the impaired indefinite-lived asset and determined that it should be reassigned as finite-lived with an estimated useful life of 30 years. The table below presents the restructuring impairment charges by segment for fiscal 2017 (amounts in thousands):
|  | DSD Segment |  |  | Warehouse Segment |  |  | Total |
Indefinite-lived intangible assets |  | $ | 18,500 |  |  | $ | — |  |  | $ | 18,500 |
Finite-lived intangible assets |  |  | 36,612 |  |  |  | 11,135 |  |  |  | 47,747 |
Restructuring impairment charges |  | $ | 55,112 |  |  | $ | 11,135 |  |  | $ | 66,247 |
Fiscal 2016 impairment charges The company’s core markets were flat in fiscal 2016. As a result, we noticed that several of our brands were performing below expectations in the back half of the year. This was caused primarily from our regional brands that were negatively impacted by our national brands and the flat market in general. The diagnostic phase of the study was completed in our fourth quarter of fiscal 2016 and, at the time, impacted certain trademarks’ future revenue projections. We included the potential impact of this study (for brands known to be impacted at the time of the test) in our expected results while performing our annual impairment test for all of our indefinite-lived intangible trademark assets. This led to a $15.0 million impairment charge of three indefinite-lived trademarks. Following this impairment, the company evaluated the indefinite-lived classification and determined that the three trademarks which were impaired should be reassigned as finite-lived assets with an estimated useful life of forty years each. We do not intend to discontinue using these trademarks; however, our expectation of limiting them to each of their respective core markets impacts their growth potential. The carrying value of these three trademarks, before impairment, was $171.0 million. The fair value of these three trademarks was $156.0 million during our test. The difference between the carrying value and the fair value resulted in a $15.0 million impairment. The remaining indefinite-lived intangible trademark assets all had fair values in excess of their respective carrying values so no impairment was recognized. Amortization expense Amortization expense for fiscal years 2018, 2017, and 2016 was as follows (amounts in thousands):
|  | Amortization expense |
Fiscal 2018 |  | $ | 25,892 |
Fiscal 2017 |  | $ | 27,274 |
Fiscal 2016 |  | $ | 24,502 |
Estimated amortization of intangibles for fiscal 2019 and the next four years thereafter is as follows (amounts in thousands):
Fiscal year |  | Amortization of Intangibles |
2019 |  | $ | 29,210 |
2020 |  | $ | 28,606 |
2021 |  | $ | 27,893 |
2022 |  | $ | 27,189 |
2023 |  | $ | 26,309 |

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