Goodwill and Other Intangible Assets

12 Months Ended

Feb. 29, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 9 – GOODWILL AND OTHER INTANGIBLE ASSETS

At February 29, 2016 and February 28, 2015, intangible assets, net of accumulated amortization, were $31,526 and $30,048, respectively. The following table presents information about these intangible assets, which are included in “Other assets” on the Consolidated Statement of Financial Position:


	February 29, 2016							February 28, 2015
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets with indefinite useful lives:
Tradenames	$	6,200	$	—		$	6,200	$	6,200	$	—		$	6,200
Character property rights		11,310		—			11,310		11,310		—			11,310

Subtotal		17,510		—			17,510		17,510		—			17,510
Intangible assets with finite useful lives:
Patents		3,385		(1,529	)		1,856		2,971		(1,224	)		1,747
Trademarks		4,125		(3,434	)		691		4,016		(3,247	)		769
Artist relationships		19,230		(19,099	)		131		19,230		(15,178	)		4,052
Customer relationships		15,472		(12,917	)		2,555		15,610		(10,192	)		5,418
Other		21,222		(12,439	)		8,783		13,590		(13,038	)		552

Subtotal		63,434		(49,418	)		14,016		55,417		(42,879	)		12,538

Total	$	80,944	$	(49,418	)	$	31,526	$	72,927	$	(42,879	)	$	30,048

In 2016, the Corporation entered into an exclusive character property licensing agreement. The exclusivity rights, included in “Other” in the table above, were acquired for $10,000 and are being amortized over the five year period of the agreement.

During 2015, the Corporation purchased certain Character Property Rights for $37,700 and recorded the rights as indefinite-lived intangible assets. As of February 28, 2015, the majority of these assets were reclassified as held for sale due to the pending sale of the Strawberry Shortcake property, with the remaining amount of $11,310 categorized as character property rights with an indefinite useful life. See Note 3 for further information.

In 2015, the required annual impairment test of indefinite-lived intangible assets was completed in the fourth quarter and based on the results of the testing the Corporation determined that the Clinton Cards tradename was impaired. The Corporation tests tradenames using the relief from royalty method. The fair value of this asset was considered a Level 2 valuation as it was based on observable market royalty rates of similar intangibles. As a result, the Corporation recorded a non-cash impairment charge of $21,924 (£13,500), which reduced the tradename balance to zero. This non-cash impairment charge is reported in “Goodwill and other intangible assets impairment” in the Consolidated Statement of Income and Consolidated Statement of Cash Flows for the year ended February 28, 2015.

In 2014, the required annual impairment test of indefinite-lived intangible assets was completed in the fourth quarter and based on the results of the testing the Corporation determined that the goodwill portion of the intangibles associated with the acquisition of Clinton Cards was impaired. As a result, the Corporation recorded a non-cash impairment charge of $733 (£465), which reduced the goodwill balance to zero. This non-cash impairment charge is reported in “Goodwill and other intangible assets impairment” in the Consolidated Statement of Income and Consolidated Statement of Cash Flows for the year ended February 28, 2014.

As a consequence of the impairment of all goodwill for financial reporting purposes in 2012, the excess tax deductible goodwill remaining from the 2009 acquisition of Recycled Paper Greetings, Inc. is being recognized as a reduction of other intangible assets when such benefits are realized for income tax purposes. Reductions of other intangible assets resulting from the realization of excess tax deductible goodwill totaled $4,346 in 2016 and 2015, and are included in “Accumulated Amortization” in the table above.

Amortization expense for intangible assets totaled $5,431, $3,797 and $4,532 in 2016, 2015 and 2014, respectively. Estimated annual amortization expense for the next five years will approximate $4,022 in 2017, $2,899 in 2018, $2,794 in 2019, $2,669 in 2020 and $553 in 2021.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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