Goodwill And Other Intangible Assets | NOTE 9. GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill for the first six months of 2015 were as follows: (in thousands) Carrying Amount Balance as of January 3, 2015 $ 541,539 Goodwill reclassified to assets held for sale (1,129 ) Balance as of July 4, 2015 $ 540,410 As of July 4, 2015 and January 3, 2015 , other intangible assets consisted of the following: (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount As of July 4, 2015: Customer and contractual relationships – amortized $ 166,756 $ (30,808 ) $ 135,948 Non-compete agreement – amortized 710 (237 ) 473 Developed technology – amortized 2,700 (190 ) 2,510 Reacquired rights – amortized 3,100 (1,520 ) 1,580 Patents – amortized 8,600 (2,135 ) 6,465 Routes – unamortized 14,287 — 14,287 Trademarks – unamortized 375,961 — 375,961 Balance as of July 4, 2015 $ 572,114 $ (34,890 ) $ 537,224 As of January 3, 2015: Customer and contractual relationships – amortized $ 166,756 $ (26,151 ) $ 140,605 Non-compete agreement – amortized 710 (173 ) 537 Developed technology – amortized 2,700 (100 ) 2,600 Reacquired rights – amortized 3,100 (1,327 ) 1,773 Patents – amortized 8,600 (1,744 ) 6,856 Routes – unamortized 16,880 — 16,880 Trademarks – unamortized 375,961 — 375,961 Balance as of January 3, 2015 $ 574,707 $ (29,495 ) $ 545,212 Amortization expense related to intangibles was $2.7 million and $2.3 million for the second quarter of 2015 and 2014 , respectively. For the first six months of 2015 and 2014 , amortization expense related to intangibles was $5.4 million and $4.7 million , respectively. The increase in amortization expense in 2015 was due to additional intangible assets obtained through the acquisition of Baptista's and additional investment in Late July during 2014. Routes and trademarks are deemed to have indefinite useful lives because they are expected to generate cash flows indefinitely. Although not amortized, they are reviewed for impairment as conditions change or at least on an annual basis. There were no impairments during the second quarter or first six months of 2015 . During the second quarter of 2014 , we recorded a $ 3.6 million impairment to write down one of our trademarks to its fair value of $2.5 million . The write down was necessary due to a reduction in projected future cash flows for this trademark, which was determined using a level 3 fair value measurement. This fair value determination was made using the relief from royalty method under the income approach, which required us to estimate unobservable factors such as a royalty rate and discount rate and identify relevant projected revenue. One of our trademarks, with a book value of $9.8 million as of July 4, 2015 , currently has a fair value which approximates book value. Any adverse changes in the use of this trademark or the sales volumes of the associated products could result in an impairment charge. The changes in the carrying amount of route intangibles for the first six months of 2015 were as follows: (in thousands) Carrying Amount Balance as of January 3, 2015 $ 16,880 Routes reclassified to assets held for sale (2,593 ) Balance as of July 4, 2015 $ 14,287 Route businesses, including route intangibles and associated goodwill, allocated to assets held for sale represent assets available for sale in their present condition and for which actions to complete a sale have been initiated. The changes in the carrying amount of route businesses held for sale for the first six months of 2015 were as follows: (in thousands) Carrying Amount Balance as of January 3, 2015 $ 10,816 Purchases of route businesses held for sale 10,094 Sales of route businesses held for sale (12,029 ) Reclassifications from route intangibles and goodwill 3,722 Balance as of July 4, 2015 $ 12,603 Net gains on the sale of route businesses for the second quarter of 2015 consisted of $0.4 million in gains and $0.3 million in losses. Net gains on the sale of route businesses for the first six months of 2015 consisted of $1.5 million in gains and $0.6 million in losses. The majority of the route business sales were due to the reengineering of route businesses to accommodate new customers and additional Partner brand business obtained in the impacted markets as well as the decision to sell certain route businesses that were previously Company-owned. For the second quarter of 2014 , net gains on the sale of route businesses consisted of $1.2 million in gains and $0.9 million in losses. For the first six months of 2014 , net gains on sale of route businesses consisted of $2.8 million in gains and $1.3 million in losses. The majority of the route business sales in the first six months of 2014 were due to the resale of routes purchased because of independent business owner ("IBO") defaults or route reengineering projects that were initiated in order to maximize the efficiency of route territories for the IBOs. See Note 14 to the condensed consolidated financial statements in Item 1 for further information related to IBOs. |