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. 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.

To test goodwill for impairment, the Company first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, the Company then performs the two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. Under the two-step goodwill impairment test, the Company would in the first step compare the estimated fair value of each reporting unit to its carrying value. The Company determines the fair value of each of its reporting units based on a weighting of income and market approaches. 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 evaluation of goodwill and intangible assets for impairment requires the exercise of significant judgment. In the event of future changes in business conditions, the Company will be required to reassess and update its forecasts and estimates used in future impairment analyses. If the results of these future analyses are lower than current estimates, a material impairment charge may result at that time. Details of goodwill and other intangible assets were as follows (in thousands):

	June 29, 2018						December 29, 2017
			Intangible						Intangible
	Goodwill		Assets		Total		Goodwill		Assets		Total
Carrying amount	$	85,248	$	29,392	$	114,640	$	85,248	$	31,587	$	116,835

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 June 29, 2018							As of December 29, 2017
	Gross							Gross
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying		Useful
	Amount		Amortization			Value		Amount		Amortization			Value		Life
AIT
Customer relationships	$	19,000	$	(18,307	)	$	693	$	19,000	$	(17,998	)	$	1,002		7
Tradename		1,900		(1,900	)		—		1,900		(1,900	)		—		6
Intellectual property/know-how		1,600		(1,371	)		229		1,600		(1,257	)		343		7
Thermal
Customer relationships		9,900		(3,383	)		6,517		9,900		(2,887	)		7,013		10
Tradename		1,170		(1,170	)		—		1,170		(1,170	)		—		6
Intellectual property/know-how		12,300		(4,712	)		7,588		12,300		(4,023	)		8,277	8-12
FDS
Customer relationships		8,800		(3,422	)		5,378		8,800		(2,835	)		5,965		7.5
UCT
Tradename		8,987		—			8,987		8,987		—			8,987	*
Total	$	63,657	$	(34,265	)	$	29,392	$	63,657	$	(32,070	)	$	31,587

*	The Company concluded that the UCT tradename intangible asset life is indefinite and is therefore not amortized but is 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.

The Company amortizes its intellectual property/know-how and customer relationships intangible assets for Thermal and FDS on a straight-line basis with an estimated economic life of the assets ranging from 7 to 12 years. Amortization expense was approximately $1.2 million for the three months ended June 29, 2018 and June 30, 2017. Amortization expense is charged to general and administrative expense. As of June 29, 2018, future estimated amortization expense is expected to be as follows (in thousands):

	Amortization
	Expense
2018 (remaining in year)	$	2,196
2019		4,040
2020		3,543
2021		3,543
2022		3,543
Thereafter		3,540
Total	$	20,405