In accordance with accounting principles generally accepted in the United States, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three level hierarchy prioritizes the inputs used to measure fair value as follows:

Level 2 – Observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data.

Level 3 – Unobservable inputs reflecting the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability based on the best information available.

In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s financial assets and liabilities that are required to be remeasured at fair value on a recurring basis:


(In millions)	2020						2019
	Level 1	Level 2		Level 3	Total		Level 1	Level 2		Level 3	Total
Assets:
Foreign currency forward exchange contracts	N/A	$	3.8	N/A	$	3.8	N/A	$	23.3	N/A	$	23.3
Interest rate swap agreements	N/A	—		N/A	—		N/A	0.1		N/A	0.1

Total Assets	N/A	$	3.8	N/A	$	3.8	N/A	$	23.4	N/A	$	23.4

Liabilities:
Foreign currency forward exchange contracts	N/A	$	31.0	N/A	$	31.0	N/A	$	2.2	N/A	$	2.2
Interest rate swap agreements	N/A	4.7		N/A	4.7		N/A	5.9		N/A	5.9

Total Liabilities	N/A	$	35.7	N/A	$	35.7	N/A	$	8.1	N/A	$	8.1

The fair value of the foreign currency forward exchange contracts is measured as the total amount of currency to be purchased, multiplied by the difference between (i) the forward rate as of the period end and (ii) the settlement rate specified in each contract. The fair value of the interest rate swap agreements is based on observable interest rate yield curves and represents the expected discounted cash flows underlying the financial instruments.

The Company’s non-financial assets, which primarily consist of goodwill, other intangible assets, property, plant and equipment, and operating lease right-of-use assets, are not required to be measured at fair value on a recurring basis, and instead are reported at their carrying amount. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying amount may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), non-financial assets are assessed for impairment. If the fair value is determined to be lower than the carrying amount, an impairment charge is recorded to write down the asset to its fair value.

The following tables show the fair values of the Company’s non-financial assets that were required to be remeasured at fair value on a non-recurring basis during 2020, 2019 and 2018, and the total impairments recorded as a result of the remeasurement process:


(In millions)	Fair Value Measurement Using				Fair Value As Of Impairment Date		Total Impairments
2020	Level 1	Level 2	Level 3
Operating lease right-of-use assets	N/A	N/A	$	110.5	$	110.5	$	28.2
Property, plant and equipment, net	N/A	N/A	2.7		2.7		53.7
Goodwill	N/A	N/A	652.6		652.6		879.0
Tradenames	N/A	N/A	48.7		48.7		47.2
Other intangible assets, net	N/A	N/A	—		—		7.3
Investments in unconsolidated affiliates	N/A	N/A	—		—		12.3

2019
Operating lease right-of-use assets	N/A	N/A	14.5		14.5		83.0
Property, plant and equipment, net	N/A	N/A	—		—		26.9
Other intangible assets, net	N/A	N/A	87.4		87.4		116.4

2018
Property, plant and equipment, net	N/A	N/A	0.6		0.6		17.9

Property, plant and equipment with a carrying amount of $17.1 million was written down to a fair value of $1.1 million during the first quarter of 2020, primarily due to the adverse impacts of the COVID-19 pandemic on the Company’s retail stores with lease terms expiring by the end of fiscal 2021 with no intention of renewal, including temporary store closures and reduced traffic, occupancy and consumer spending trends. Fair value of the Company’s property, plant and equipment was determined based on the estimated discounted future cash flows associated with the assets using sales trends and market participant assumptions.

Property plant and equipment with a carrying amount of $32.1 million and operating lease right-of-use assets with a carrying amount of $138.7 million were written down to their fair values of $1.6 million and $110.5 million, respectively, during the fourth quarter 2020. These impairments were primarily due to the adverse impacts of the pandemic on the financial performance of certain of the Company's retail stores and the shift in consumer buying trends from brick and mortar retail stores to digital channels. Fair value of the Company’s property, plant and equipment was determined based on the estimated discounted future cash flows associated with the assets using sales trends and market participant assumptions. Fair value of the Company's operating lease right-of-use assets was determined based on the discounted cash flows of the estimated market rents.

Property, plant and equipment with a carrying amount of $7.2 million was written down to a fair value of zero during 2020 in connection with the planned exit from the Heritage Brands Retail business, which will result in the closing of 162 heritage brand stores by mid-2021. Approximately 40 of these stores had been closed by the end of 2020. Please see Note 17, “Exit Activity Costs,” for further discussion of the Heritage Brands Retail exit costs. Fair value of the Company’s Heritage Brands Retail business property, plant and equipment was determined based on the estimated discounted future cash flows associated with the assets using sales trends and market participant assumptions.

Goodwill with a carrying amount of $1,531.6 million was written down to a fair value of $652.6 million during 2020. Please see Note 7, “Goodwill and Other Intangible Assets,” for further discussion.

Tradenames with a carrying amount of $95.9 million were written down to a fair value of $48.7 million during 2020. Please see Note 7, “Goodwill and Other Intangible Assets,” for further discussion.

Other intangible assets with a carrying amount of $7.3 million were written down to a fair value of zero during 2020. Please see Note 7, “Goodwill and Other Intangible Assets,” for further discussion.

The Company’s equity method investment in Karl Lagerfeld with a carrying amount of $12.3 million was written down to a fair value of zero during 2020. Please see Note 5, “Investments in Unconsolidated Affiliates,” for further discussion.

The $1,027.7 million of impairment charges during 2020 were recorded in the Company’s Consolidated Statement of Operations, of which $933.5 million was included in goodwill and other intangible asset impairments, $81.9 million was included in SG&A expenses, and $12.3 million was included in equity in net (loss) income of unconsolidated affiliates. The $1,027.7 million of impairment charges were recorded to the Company’s segments as follows: $414.7 million in the Calvin Klein International segment, $304.1 million in the Calvin Klein North America segment, $249.6 million in the Heritage Brands Wholesale segment, $30.0 million in the Tommy Hilfiger International segment, $11.0 million in the Heritage Brands Retail segment, $6.0 million in the Tommy Hilfiger North America segment and $12.3 million was recorded in corporate expenses not allocated to any reportable segments.

Operating lease right-of-use assets with a carrying amount of $97.5 million were written down to a fair value of $14.5 million during 2019 primarily as a result of the closure during the first quarter of 2019 of the Company’s TOMMY HILFIGER flagship and anchor stores in the United States (the “TH U.S. store closures”) and the closure during the first quarter of 2019 of the Company’s Calvin Klein flagship store on Madison Avenue in New York, New York in connection with the restructuring associated with the strategic changes for the Calvin Klein business announced in January 2019 (the “Calvin Klein restructuring”). Fair value of the operating lease right-of-use assets was determined based on the discounted cash flows of estimated market rents using market participant assumptions.

Property, plant and equipment with a carrying amount of $26.9 million was written down to a fair value of zero during 2019 primarily in connection with the TH U.S. store closures, the closure of the Company’s CALVIN KLEIN 205 W39 NYC brand (formerly Calvin Klein Collection), and the financial performance in certain of the Company’s retail stores and shop-in-shops, including certain Calvin Klein stores affected by the realignment of the Calvin Klein creative direction globally. Fair value of the Company’s property, plant and equipment was determined based on the estimated discounted future cash flows associated with the assets using sales trends and market participant assumptions.

The Company’s perpetual license right for the Speedo trademark with a carrying amount of $203.8 million was written down to a fair value of $87.4 million in the fourth quarter of 2019 in connection with the Speedo transaction. Please see Note 3, “Acquisitions and Divestitures,” for further discussion.

The $226.3 million of impairment charges during 2019 were recorded in the Company’s Consolidated Statement of Operations, of which $109.9 million was included in SG&A expenses and $116.4 million was included in other noncash loss, net. The $226.3 million of impairment charges were recorded to the Company’s segments as follows: $118.6 million in the Heritage Brands Wholesale segment, $50.0 million in the Tommy Hilfiger North America segment, $37.4 million in the Calvin Klein North America segment, $13.1 million in the Calvin Klein International segment, $4.0 million in the Tommy Hilfiger International segment, $0.1 million in the Heritage Brands Retail segment and $3.1 million was recorded in corporate expenses not allocated to any reportable segments.

Property, plant and equipment with a carrying amount of $18.5 million was written down to a fair value of $0.6 million during 2018 in connection with the financial performance in certain of the Company’s retail stores and shop-in-shops, and the closure of the CALVIN KLEIN 205 W39 NYC brand. Fair value of the Company’s retail stores and shop-in-shops was determined based on the estimated discounted future cash flows associated with the assets using sales trends and market participant assumptions. The $17.9 million impairment charge was included in SG&A expenses, of which $8.5 million was recorded in the Calvin Klein International segment, $5.1 million was recorded in the Calvin Klein North America segment, $2.5 million was recorded in the Heritage Brands Wholesale segment, $1.6 million was recorded in the Tommy Hilfiger International segment and $0.2 million was recorded in the Tommy Hilfiger North America segment.


	2020				2019
(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	1,651.4	$	1,651.4	$	503.4	$	503.4
Short-term borrowings	—		—		49.6		49.6
Long-term debt (including portion classified as current)	3,554.8		3,806.8		2,707.7		2,869.7