5. Goodwill and Purchased Intangible Assets

The Company’s methodology for allocating the purchase price relating to purchase acquisitions is determined through established and generally accepted valuation techniques. Goodwill is measured as the excess of the cost of the acquisition over the sum of the amounts assigned to tangible and identifiable intangible assets acquired less liabilities assumed. Goodwill and purchased intangible assets with indefinite useful lives are not amortized, but are reviewed for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the carrying value of a reporting unit exceeds its fair value, the Company would then perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If the Company determines that the carrying value of a reporting unit’s goodwill exceeds its implied fair value, the Company would record an impairment charge equal to the difference. The process of evaluating the potential impairment of goodwill and intangible assets requires significant judgment. The Company regularly monitors current business conditions and other factors including, but not limited to, adverse industry or economic trends and lower projections of profitability that may impact future operating results.

As part of the Company’s annual testing of goodwill impairment, in the fourth quarter of fiscal 2017, the Company performed the two-step impairment test of the Company’s three reporting units for potential impairment. The Company utilized the discounted cash flow method of the income approach to estimate the fair values of each of the reporting units. The estimates used in the impairment testing were consistent with the discrete forecasts that the Company uses to manage its business, and, additionally, considered the developments that occurred since the dates of the acquisitions. Under the discounted cash flow method, cash flows beyond the discrete forecasts were estimated using terminal growth rates ranging from 4.2%—8.5%, which are considered to be the long-term earnings growth rates specific to the reporting units. The estimated future cash flows were discounted to present value using discount rates between 14.0%—17.5% that were the value-weighted average of the reporting units’ estimated cost of equity and debt derived using both known and estimated market metrics. These discount rates were adjusted to reflect risk factors that considered both the timing and risks associated with the estimated cash flows for each of the respective reporting units. The tax rates used in the discounted cash flows reflected the international structure currently in place, which is consistent with the market participant perspective. The Company then allocated the fair values of the reporting units to the assets and liabilities of each of the reporting units. Based on the Company’s analyses, the Company concluded that the fair value of each of the reporting units was greater than their carrying amount, including goodwill, and, therefore, the second step of the goodwill impairment test was not required.

Details of aggregate goodwill of the Company are as follows (in thousands):

	Gross		Accumulated			Net Carrying
	Amount		Impairment*			Amount
Year Ended December 29, 2017
Goodwill	$	119,291	$	(34,043	)	$	85,248
Year Ended December 30, 2016
Goodwill	$	119,291	$	(34,043	)	$	85,248

*	Represents goodwill recorded for UCT in 2002 and Sieger Engineering in 2006, which was fully impaired in prior years.

Details of goodwill and other intangible assets were as follows (in thousands):

	December 29, 2017						December 30, 2016
			Intangible						Intangible
	Goodwill		Assets		Total		Goodwill		Assets		Total
Carrying amount	$	85,248	$	31,587	$	116,835	$	85,248	$	37,024	$	122,272

Purchased Intangible Assets

Intangible assets are generally recorded in connection with a business acquisition. The Company evaluates the useful lives of its intangible assets each reporting period to determine whether events and circumstances require revising the remaining period of amortization. In addition, the Company reviews indefinite lived intangible assets for impairment when events or changes in circumstances indicate their carrying value may not be recoverable and tests definite lives intangible assets at least annually for impairment. Management considers such indicators as significant differences in product demand from the estimates, changes in the competitive and economic environment, technological advances, and changes in cost structure.

Details of purchased intangible assets were as follows (in thousands):

	As of December 29, 2017									As of December 30, 2016
	Gross									Gross
	Carrying		Accumulated				Carrying			Carrying		Accumulated				Carrying			Useful Life
	Amount		Amortization				Value			Amount		Amortization				Value			(in years)
AIT
Customer relationships	$	19,000	$		(17,998	)	$		1,002	$	19,000	$		(17,058	)	$		1,942		7
Tradename		1,900			(1,900	)		—			1,900			(1,900	)		—			6
Intellectual property/know-how		1,600			(1,257	)			343		1,600			(1,029	)			571		7
Marchi
Customer relationships		9,900			(2,887	)			7,013		9,900			(1,898	)			8,002		10
Tradename		1,170			(1,170	)		—			1,170			(443	)			727		6
Intellectual property/know-how		12,300			(4,023	)			8,277		12,300			(2,643	)			9,657		8-12
Miconex
Customer relationships		8,800			(2,835	)			5,965		8,800			(1,662	)			7,138		7.5
UCT
Tradename		8,987		—					8,987		8,987		—					8,987
Total	$	63,657	$		(32,070	)	$		31,587	$	63,657	$		(26,633	)	$		37,024

The Company amortizes customer relationships intangible asset for AIT using an accelerated method over the estimated economic life of the assets, ranging from 6 to 10 years. The Company amortizes its intellectual property/know-how and customer relationships intangible assets for Marchi and Miconex on a straight-line basis with an estimated economic life of the assets ranging from 7 to 12 years. Amortization expense was approximately $5.4 million for the year ended December 29, 2017, $5.8 million for the year ended December 30, 2016, and $6.2 million for the year ended December 25, 2015.

In the fourth quarter of 2015, the Company wrote off the remaining book value of the tradename intangible acquired from AIT of $0.5 million and in the fourth quarter of 2017 the Company wrote off the tradename acquired from Marchi of $0.5 million as the Company no longer believed that these tradenames have value. The Company also carries a UCT trade-name intangible asset of $9.0 million as a result of a previous acquisition. The Company concluded that the UCT trade-name intangible asset life is indefinite and is therefore not amortized. The Company also concluded that the UCT trade-name as of December 29, 2017 is not impaired as there were no new events or changes in circumstances that would indicate that its carrying amount may not be recoverable.

As of December 29, 2017, future estimated amortization expense is expected to be as follows:

	Amortization
	Expense
	(in thousands)
2018	$	4,390
2019		4,040
2020		3,543
2021		3,542
2022		3,543
2023 and thereafter		3,542
Total	$	22,600