GOODWILL AND INTANGIBLE ASSETS

Goodwill is tested for impairment on an annual basis and between annual tests if events or circumstances indicate that an impairment loss may have occurred, and we write down these assets when impaired. We perform our annual impairment tests during the fourth quarter of each fiscal year using the opening balance sheet as of the first day of the fourth quarter, with any resulting impairment recorded in the fourth quarter of the fiscal year.

As a result of the acquisition of Rofin in the first quarter of fiscal 2017, we reorganized our prior two reporting segments (Specialty Laser Systems and Commercial Lasers and Components) into two new reporting segments for the combined company: OEM Laser Sources (“OLS”) and Industrial Lasers & Systems (“ILS”). This segment reorganization was based upon the organizational structure of the combined company and how the chief operating decision maker ("CODM") receives and utilizes information provided to allocate resources and make decisions. In our fiscal 2017 annual testing, we performed a qualitative assessment of the goodwill for our OLS reporting unit during the fourth quarter of fiscal 2017 using the opening balance sheet as of the first day of the fourth quarter and concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying amount. In assessing the qualitative factors, we considered the impact of these key factors: macroeconomic conditions, fluctuations in foreign currency, market and industry conditions, our operating and competitive environment, regulatory and political developments, the overall financial performance of the reporting unit including cost factors and budgeted-to-actual revenue results. We also considered our market capitalization, stock price performance and the significant excess between the estimated fair value and carrying value of the OLS reporting unit. Based on our assessment, goodwill in the OLS reporting unit was not impaired as of the first day of the fourth quarter of fiscal 2017. As such, it was not necessary to perform the goodwill impairment test at that time. For the ILS reporting unit, we elected to bypass the qualitative assessment and proceed directly to performing the goodwill impairment test. We performed our test using the opening balance sheet as of the first day of the fourth quarter and noted no impairment. We determined the fair value of the ILS reporting unit for the test using a 50-50% weighting of the Income (discounted cash flow) approach and Market (market comparable) approach. Management completed and reviewed the results of the impairment analysis and concluded that an impairment charge was not required as the estimated fair value of the ILS reporting unit was significantly in excess of its carrying value. Between the completion of that testing and the end of the fourth quarter of fiscal 2017, we noted no indications of impairment or triggering events with either reporting unit to cause us to review goodwill for potential impairment.

The changes in the carrying amount of goodwill by segment for fiscal 2017 and 2016 are as follows (in thousands):



	Industrial Lasers & Systems (1)		OEM Laser Sources (2)			Total
Balance as of October 3, 2015	$	4,443	$	97,374		$	101,817
Additions (see Note 3)	—		434			434
Translation adjustments and other	—		(793		)	(793		)
Balance as of October 1, 2016	4,443		97,015			101,458
Additions (see Note 3)	296,502		1,668			298,170
Translation adjustments and other	14,571		3,495			18,066
Balance as of September 30, 2017	$	315,516	$	102,178		$	417,694

(1) Gross amount of goodwill for our ILS segment was $328.5 million at September 30, 2017 and $17.4 million at October 1, 2016, respectively. At both September 30, 2017 and October 1, 2016, the accumulated impairment loss for the ILS reporting unit was $13.0 million reflecting an impairment charge in fiscal 2009.

(2) Gross amount of goodwill for our OLS segment was $110.9 million and $105.7 million at September 30, 2017 and October 1, 2016, respectively. At both September 30, 2017 and October 1, 2016, the accumulated impairment loss for the OLS reporting unit was $8.7 million reflecting impairment charges in fiscal 2003 and fiscal 2009.

We evaluate long-lived assets and amortizable intangible assets whenever events or changes in business circumstances or our planned use of assets indicate that their carrying amounts may not be fully recoverable or that their useful lives are no longer appropriate. Reviews are performed to determine whether the carrying values of assets are impaired based on comparison to the undiscounted expected future cash flows identifiable to such long-lived and amortizable intangible assets. If the comparison indicates that impairment exists, the impaired asset is written down to its fair value.

In fiscal 2016, we did not have any impairment of intangible assets as a result of the impairment analysis.

The components of our amortizable intangible assets are as follows (in thousands):



	Fiscal year-end 2017							Fiscal year-end 2016
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Existing technology	$	208,341	$	(66,793	)	$	141,548	$	70,664	$	(61,133	)	$	9,531
Patents	330		(58		)	272		—		—			—
Customer lists	51,687		(14,259		)	37,428		15,968		(11,658		)	4,310
Trade name	6,171		(1,824		)	4,347		384		(351		)	33
In-process research and development	6,432		—			6,432		—		—			—
Total	$	272,961	$	(82,934	)	$	190,027	$	87,016	$	(73,142	)	$	13,874

For accounting purposes, when an intangible asset is fully amortized, it is removed from the disclosure schedule.

The weighted average remaining amortization periods for existing technology, patents, customer lists and trade names are approximately 3.2 years, 4.1 years, 7.4 years and 2.1 years, respectively. Amortization expense for intangible assets during fiscal years 2017, 2016, and 2015 was $60.6 million, $8.5 million and $8.2 million, respectively. The change in accumulated amortization also includes $4.8 million and $0.4 million of foreign exchange impact for fiscal 2017 and fiscal 2016, respectively.

Estimated amortization expense for the next five fiscal years and all years thereafter are as follows (in thousands):



	Estimated Amortization Expense
2018	$	56,655
2019	53,238
2020	45,799
2021	14,141
2022	3,695
Thereafter	10,067
Total (Excluding IPR&D)	$	183,595