Goodwill and Intangibles

12 Months Ended

Jan. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table summarizes the Company’s goodwill by reportable segment:



(in millions)	Sterling Jewelers		Zale Jewelry			Piercing Pagoda		UK Jewelry		Other		Total
Balance at February 1, 2014	23.2		—			—		—		3.6		26.8
Acquisitions	—		499.4			—		—		—		499.4
Impact of foreign exchange	—		(7.0		)	—		—		—		(7.0		)
Balance at January 31, 2015	23.2		492.4			—		—		3.6		519.2
Impact of foreign exchange	—		(3.7		)	—		—		—		(3.7		)
Balance at January 30, 2016	$	23.2	$	488.7		$	—	$	—	$	3.6	$	515.5

There have been no goodwill impairment losses recognized during Fiscal 2016 and Fiscal 2015. If future economic conditions are different than those projected by management, future impairment charges may be required.

Intangibles

Intangible assets with indefinite and definite lives represent Zale trade names and favorable leases acquired, while intangible liabilities with definite lives represent unfavorable leases and contract rights acquired in the Zale Acquisition. See Note 3 for additional information. No other intangible assets or liabilities were recognized prior to the acquisition of Zale Corporation on May 29, 2014. As of January 30, 2016, the remaining weighted-average amortization period for acquired definite-lived intangible assets and liabilities was 2 years and 5 years, respectively. The following table provides additional detail regarding the composition of intangible assets and liabilities.



		January 30, 2016									January 31, 2015
(in millions)	Balance sheet location	Gross carrying amount			Accumulated amortization			Net carrying amount			Gross carrying amount			Accumulated amortization			Net carrying amount
Definite-lived intangible assets:
Trade names	Intangible assets, net	$	1.4		$	(0.5	)	$	0.9		$	1.5		$	(0.2	)	$	1.3
Favorable leases	Intangible assets, net	47.0			(22.3		)	24.7			48.1			(9.1		)	39.0
Total definite-lived intangible assets		48.4			(22.8		)	25.6			49.6			(9.3		)	40.3
Indefinite-lived trade names	Intangible assets, net	402.2			—			402.2			406.8			—			406.8
Total intangible assets, net		$	450.6		$	(22.8	)	$	427.8		$	456.4		$	(9.3	)	$	447.1

Definite-lived intangible liabilities:
Unfavorable leases	Other liabilities	$	(47.7	)	$	23.7		$	(24.0	)	$	(48.7	)	$	9.7		$	(39.0	)
Unfavorable contracts	Other liabilities	$	(65.6	)	$	28.1		$	(37.5	)	$	(65.6	)	$	13.8		$	(51.8	)
Total intangible liabilities, net		$	(113.3	)	$	51.8		$	(61.5	)	$	(114.3	)	$	23.5		$	(90.8	)

Amortization expense relating to the intangible assets was $13.9 million and $9.6 million in Fiscal 2016 and Fiscal 2015, respectively. As the Acquisition occurred on May 29, 2014, there was no amortization expense relating to intangible assets in Fiscal 2014. The expected future amortization expense for intangible assets recorded at January 30, 2016 follows:



(in millions)	Trade names		Favorable leases		Total
2017	$	0.3	$	13.4	$	13.7
2018	0.3		8.8		9.1
2019	0.2		2.3		2.5
2020	0.1		0.2		0.3
2021	—		—		—
Thereafter	—		—		—
Total	$	0.9	$	24.7	$	25.6

The unfavorable leases and unfavorable contracts are classified as a liability and recognized over the term of the underlying lease or contract. Amortization relating to the intangible liabilities was $28.7 million and $23.7 million in Fiscal 2016 and Fiscal 2015, respectively. As the Acquisition occurred on May 29. 2014, there was no amortization relating to intangible liabilities in Fiscal 2014. Expected future amortization for intangible liabilities recorded at January 30, 2016 follows:



(in millions)	Unfavorable leases			Unfavorable contracts			Total
2017	$	(14.1	)	$	(5.4	)	$	(19.5	)
2018	(7.5		)	(5.4		)	(12.9		)
2019	(2.1		)	(5.4		)	(7.5		)
2020	(0.3		)	(5.4		)	(5.7		)
2021	—			(5.4		)	(5.4		)
Thereafter	—			(10.5		)	(10.5		)
Total	$	(24.0	)	$	(37.5	)	$	(61.5	)

- 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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