3. Impairment and Litigation Charges



	Thirteen weeks ended					Thirty-nine weeks ended
		October 29,		October 31,		October 29,		October 31,
		2016		2015		2016		2015
		($ in millions)
Impairment of long-lived assets		$	6	$	—	$	6	$	—
Pension litigation charge			—		100		—		100
Total impairment and litigation charges		$	6	$	100	$	6	$	100

Due to the continued underperformance of our Runners Point and Sidestep stores, management determined during the third quarter of 2016 that a triggering event had occurred and, therefore, an impairment review was conducted. This evaluation resulted in a non-cash charge of $6 million to write-down store fixtures and leasehold improvements of 116 stores. The Company quantified the amount of the impairment by estimating the fair value of the assets reviewed by determining the cash flows expected from the use of the assets. If the carrying value of the assets exceeded the estimated undiscounted future cash flows, an impairment charge was recorded representing the difference between the discounted future cash flow, using the Company’s weighted-average cost of capital, and the carrying value. The Company also performed an impairment review of other intangible assets related to Runners Point and Sidestep. The Company calculated the fair value using a relief from royalty concept and compared the fair value to the carrying value to determine if the asset was impaired. As a result of this review, no impairment charge of these assets was required.

During the third quarter of 2015, the Company recorded a $100 million pension litigation charge. Please see Note 13, Legal Proceedings for further information.