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Goodwill and Other Intangible Assets | 12 Months Ended
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Jan. 01, 2022
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets |
Note 9. | Goodwill and Other Intangible Assets
The table below summarizes our goodwill and other intangible assets at January 1, 2022 and January 2, 2021, respectively, each of which is explained in additional detail below (amounts in thousands):
|  | January 1, 2022 |  |  | January 2, 2021 |
Goodwill |  | $ | 545,244 |  |  | $ | 545,244 |
Amortizable intangible assets, net of amortization |  |  | 568,332 |  |  |  | 587,818 |
Indefinite-lived intangible assets |  |  | 127,100 |  |  |  | 127,100 |
Total goodwill and other intangible assets |  | $ | 1,240,676 |  |  | $ | 1,260,162 |
Goodwill was not impaired in Fiscal 2021, 2020, or 2019. As of January 1, 2022 and January 2, 2021, the company had the following amounts related to amortizable intangible assets (amounts in thousands):
|  | January 1, 2022 |  |  | January 2, 2021 |
Asset |  | Cost |  |  | Accumulated Amortization |  |  | Net Value |  |  | Cost |  |  | Accumulated Amortization |  |  | Net Value |
Trademarks |  | $ | 477,115 |  |  | $ | 78,124 |  |  | $ | 398,991 |  |  | $ | 466,915 |  |  | $ | 64,426 |  |  | $ | 402,489 |
Customer relationships |  |  | 318,021 |  |  |  | 151,496 |  |  |  | 166,525 |  |  |  | 318,021 |  |  |  | 135,068 |  |  |  | 182,953 |
Non-compete agreements |  |  | 5,154 |  |  |  | 5,074 |  |  |  | 80 |  |  |  | 5,154 |  |  |  | 5,034 |  |  |  | 120 |
Distributor relationships |  |  | 4,123 |  |  |  | 3,398 |  |  |  | 725 |  |  |  | 4,123 |  |  |  | 3,123 |  |  |  | 1,000 |
Distributor routes held and used |  |  | 2,548 |  |  |  | 537 |  |  |  | 2,011 |  |  |  | 1,377 |  |  |  | 121 |  |  |  | 1,256 |
Total |  | $ | 806,961 |  |  | $ | 238,629 |  |  | $ | 568,332 |  |  | $ | 795,590 |  |  | $ | 207,772 |  |  | $ | 587,818 |
The company acquired trademarks for $10.2 million during the second quarter of Fiscal 2021. These trademarks are being amortized over their estimated useful life. As of January 1, 2022 and January 2, 2021, there was $127.1 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 2020 restructuring and related impairment charges In order to optimize sales and production of our organic products, the company decided to cease using the Alpine Valley finite-lived trademark, resulting in a $4.6 million impairment charge in the second quarter of Fiscal 2020. In the fourth quarter of Fiscal 2020, an additional $1.3 million impairment charge was recognized at the time the company decided to cease using another one of its regional brands. These costs are recorded in the restructuring and related impairment charges line item on our Consolidated Statements of Income. Fiscal 2019 restructuring and related impairment charges During Fiscal 2019, the company recognized intangible asset impairments of $15.4 million that are recorded in the restructuring and related impairment charges line item of our Consolidated Statements of Income. The impairments are a result of a brand rationalization study that impacted certain trademarks’ future use. The study concluded that certain products of our regional brands were to be discontinued or converted to one of our national brands. 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. Based on this analysis the indefinite-lived trademark was not impaired, however, the company has evaluated the classification of this asset and determined that it should be recognized as finite-lived as of December 28, 2019 with an estimated useful life of 33 years that began amortizing at the beginning of Fiscal 2020. Three finite-lived trademark assets were tested using an undiscounted cash flow test. As a result of this test, the projected cash flows for two of the finite-lived brands did not exceed the carrying value. One of the finite-lived brands was not considered impaired using the undiscounted cash flow test. 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 for the two finite-lived trademark assets that failed step one. The impairment charge also consisted of one brand that has limited future benefits to the company and was fully impaired. All of these impairments were attributed to regional brands. Amortization expense Amortization expense for Fiscal 2021, 2020, and 2019 was as follows (amounts in thousands):
|  | Amortization expense |
Fiscal 2021 |  | $ | 30,857 |
Fiscal 2020 |  | $ | 30,704 |
Fiscal 2019 |  | $ | 29,323 |
Estimated amortization of intangibles for Fiscal 2022 and the next four years thereafter is as follows (amounts in thousands):
Fiscal year |  | Amortization of Intangibles |
2022 |  | $ | 31,535 |
2023 |  | $ | 30,654 |
2024 |  | $ | 29,959 |
2025 |  | $ | 29,247 |
2026 |  | $ | 27,173 |

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