Intangible Assets and Goodwill

9 Months Ended

Jul. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets consisted of the following as of the dates indicated:



	July 31, 2014							October 31, 2013
In thousands	Gross Amount		Accumulated Amortization			Net Book Value		Gross Amount		Accumulated Amortization			Net Book Value
Non-amortizable trademarks	$	124,129	$	—		$	124,129	$	124,099	$	—		$	124,099
Amortizable trademarks	22,043		(12,581		)	9,462		23,214		(11,543		)	11,671
Amortizable licenses	12,577		(12,577		)	—		12,749		(12,749		)	—
Other amortizable intangibles	8,324		(6,288		)	2,036		8,185		(5,964		)	2,221
	$	167,073	$	(31,446	)	$	135,627	$	168,247	$	(30,256	)	$	137,991

The change in non-amortizable trademarks is due primarily to foreign currency exchange fluctuations. Other amortizable intangibles primarily include non-compete agreements, patents and customer relationships. These amortizable intangibles are amortized on a straight-line basis over their estimated useful lives. Certain trademarks will continue to be amortized by the Company using estimated useful lives of 10 to 25 years with no residual values. Intangible amortization expense for each of the nine months ended July 31, 2014 and 2013 was approximately $2 million. Annual amortization expense is estimated to be approximately $2 million per year through fiscal 2019.

The Company performs its annual goodwill impairment test during the fourth fiscal quarter. As of October 31, 2013, the fair value of each of its reporting units substantially exceeded their respective carrying values. However, certain factors may result in the need to perform an impairment test prior to the fourth fiscal quarter, including significant under-performance of the Company’s business relative to expected operating results, significant adverse economic and industry trends, a significant decline in the Company’s market capitalization for an extended period of time relative to net book value, or a decision to divest an individual business within a reporting unit.

Based upon the Company’s assessment of these factors in connection with the preparation of the Company’s condensed consolidated financial statements for the second quarter of fiscal 2014, given the sales decline in the Company’s EMEA reporting unit for the six months ended April 30, 2014, the Company performed an interim impairment test for the EMEA reporting unit using a discounted cash flow analysis and evaluated whether any adverse economic or industry trends would negatively affect the conclusions drawn from the prior period annual impairment test. The results of the Company’s interim impairment evaluation indicated that the fair value of the EMEA reporting unit exceeded its carrying value by 9%. As a result, the Company concluded that the EMEA reporting unit’s goodwill was not impaired based on the interim impairment evaluation.

During the second quarter of fiscal 2014, the Company also decided to maintain its investment in Surfdome, which resulted in the reclassification of the Surfdome business from "held for sale" to "held and used." As a result of the sale process conducted during the second quarter of fiscal 2014, the Company received offers to purchase from third parties which indicated that there was an impairment in the value of Surfdome. Consequently, the Company conducted an impairment analysis using the market approach based on third party purchase offers received for Surfdome. Based upon the result of the analysis, the Company recorded a $15 million impairment charge during the second quarter of fiscal 2014 against Surfdome goodwill and intangible assets within the EMEA reporting unit. This impairment charge reduced the carrying value of Surfdome assets to their estimated fair value.

During the third quarter of fiscal 2014, the Company performed an additional interim impairment test for the EMEA reporting unit due to the significant decline in the Company's stock price and further net revenue deterioration in the EMEA wholesale channel. The results of this impairment evaluation resulted in a non-cash charge of $182 million to fully impair goodwill associated with the EMEA reporting unit.

A summary of goodwill by reporting unit, and in total, and changes in the carrying amounts, as of the dates indicated is as follows:



In thousands	Americas			EMEA			APAC			Consolidated
Gross goodwill	$	75,974		$	190,986		$	135,752		$	402,712
Accumulated impairment losses	—			—			(129,545		)	(129,545		)
Net goodwill at October 31, 2012	$	75,974		$	190,986		$	6,207		$	273,167
Foreign currency translation and other	(1,031		)	5,598			—			4,567
Gross goodwill	74,943			196,584			135,752			407,279
Accumulated impairment losses	—			—			(129,545		)	(129,545		)
Net goodwill at October 31, 2013	$	74,943		$	196,584		$	6,207		$	277,734
Foreign currency translation and other	(305		)	(1,503		)	—			(1,808		)
Gross goodwill	74,638			195,081			135,752			405,471
Accumulated impairment losses	—			(195,081		)	(129,545		)	(324,626		)
Net goodwill at July 31, 2014	$	74,638		$	—		$	6,207		$	80,845

- 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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