Discontinued Operations

9 Months Ended

Jul. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

One of the elements of the Company’s PIP involves divesting or exiting certain non-core businesses. In November 2013, the Company completed the sale of Mervin for $58 million. In January 2014, the Company completed the sale of substantially all of the assets of Hawk for $19 million. These transactions resulted in an after-tax gain of approximately $31 million during the first nine months of fiscal 2014, which is included in income from discontinued operations in the table below. The Company’s sale of these businesses generated income tax expense of approximately $18 million within discontinued operations during the first nine months of fiscal 2014. However, as the Company does not expect to pay income tax after application of available loss carryforwards, an offsetting income tax benefit was recognized within continuing operations.

Mervin, Hawk and Surfdome were classified as "assets held for sale" as of October 31, 2013. In the second quarter of fiscal 2014, the Company decided to maintain its investment in Surfdome. Consequently, Surfdome was reclassified from discontinued operations into continuing operations for all periods presented. The Company recorded a $15 million impairment charge within continuing operations during the second quarter of fiscal 2014 to write-down the carrying value of Surfdome goodwill and intangible assets to their estimated fair value. During the third quarter of fiscal 2014, the Company recorded an additional impairment charge of $4 million to impair the remainder of Surfdome goodwill as part of the $182 million non-cash charge to fully impair all goodwill associated with the EMEA reporting unit (see Note 7). As a result of the Company's 51% ownership stake in Surfdome, 49% of these charges, or $9.5 million, was allocated to "net loss/(income) attributable to non-controlling interest" in the accompanying condensed consolidated statement of operations for the nine months endedJuly 31, 2014.

The operating results of discontinued operations for the third quarter and first nine months of fiscal 2014 and 2013 are as follows:

	Three Months Ended July 31,					Nine Months Ended July 31,
In thousands	2014			2013		2014		2013
Revenues, net	$	—		$	7,440	$	1,626	$	16,602
(Loss)/income before income taxes	(34		)	3,072		47,874		4,022
Provision for income taxes	—			1,183		17,508		1,549
(Loss)/income from discontinued operations	$	(34	)	$	1,889	$	30,366	$	2,473

There were no assets classified as held for sale at July 31, 2014. The components of major assets and liabilities held for sale at October 31, 2013 were as follows:

In thousands	October 31, 2013
Assets:
Receivables, net	$	22,792
Inventories, net	9,979
Other	2,283
	$	35,054
Liabilities:
Accounts payable	$	1,206
Accrued liabilities	3,262
Other	187
	$	4,655

Total assets held for sale as of October 31, 2013 by segment were as follows:

In thousands	October 31, 2013
Americas	$	27,398
EMEA	7,001
APAC	655
	$	35,054