12. Restatement

As previously discussed, a Special Committee of the Company’s Board of Directors, along with the Special Committee’s independent legal and accounting advisors, has been conducting a review of the accounting treatment related to certain of the Company’s transactions. The advisors have presented their analysis and conclusions to the Special Committee and to the Company’s current management team. The Special Committee has now completed the review.

Based on the Special Committee’s review and additional review by the Company’s Audit Committee and current management team, the Board of Directors, Audit Committee and the Company’s current management team concluded that the Company would restate its historical financial statements in respect of (i) the fourth quarter and annual results of 2013, (ii) the 2014 fiscal year and each quarterly period thereof and (iii) the first and second quarters of 2015 (collectively, the “Restatement Periods”), to correct certain errors in accounting.

These restatements include the correction of errors regarding (i) the classification of contractually obligated expenses, retail support and other costs as selling, general and administrative expenses, as opposed to netting such expenses against licensing or other revenue, as applicable, (ii) inadequate support for revenue recognition relating to certain license agreements, and (iii) inadequate estimation of accruals related to retail support for certain license agreements.

Adjustments to the Company’s previously reported consolidated statements of income and comprehensive income for the Current and Prior Year Quarters are identified in the tables below:


	Three Months Ended March 31, 2015 (Unaudited)							Three Months Ended March 31, 2014 (Unaudited)
	As Previously Reported		Adjustments			As Restated		As Previously Reported		Adjustments			As Restated
Licensing revenue	$	95,387	$	(1,590	)	$	93,797	$	112,167	$	(515	)	$	111,652
Total revenue		95,387		(1,590	)		93,797		116,138		(515	)		115,623
Selling, general and administrative expenses		44,155		(2,947	)		41,208		48,202		(438	)		47,764
Operating income		51,232		1,357			52,589		67,936		(77	)		67,859
Income before taxes		91,817		1,300			93,117		88,396		(77	)		88,319
Provision for income taxes		25,910		455			26,365		25,554		(27	)		25,527
Net income		65,907		845			66,752		62,842		(50	)		62,792
Net income attributable to Iconix Brand Group, Inc.		62,840		845			63,685		59,768		(50	)		59,718
Earnings per share:
Basic	$	1.30	$	0.02		$	1.32	$	1.21	$	0.00		$	1.21
Diluted	$	1.21	$	0.02		$	1.23	$	1.03	$	0.00		$	1.03
Comprehensive income		27,668		853			28,521		62,554		(50	)		62,504
Comprehensive income attributable to Iconix Brand Group, Inc.		24,601		853			25,454		59,480		(50	)		59,430