3. Goodwill and Trademarks and Other Intangibles, net

As of September 30, 2017, as a result of a combination of factors, including the DTR non-renewals discussed above, the Company’s revised forecasted future earnings and an overall decline in sales in the retail industry during 2017, the Company conducted an interim indefinite-lived intangible impairment test in accordance with ASC 350. In addition, as a result of the recent decline in the Company’s stock price and related market capitalization, the Company determined that there existed a further indication of potential impairment across all of the Company’s intangible assets. Consequently, the Company accelerated the timing of annual impairment testing of goodwill and intangible assets that is customarily performed in connection with the preparation of its year-end financial statements and completed such testing in connection with the preparation of its financial statements for the Current Quarter.

Goodwill

Goodwill by reportable operating segment and in total, and changes in the carrying amounts, as of the dates indicated are as follows:

	Women's			Men's			Home			International			Consolidated
Net goodwill at December 31, 2016	$	111,749		$	1,524		$	28,414		$	29,563		$	171,250
Acquisitions		—			—			—			—			—
Deconsolidation of joint venture		—			—			—			(3,491	)		(3,491	)
Foreign Currency Adjustment		—			—			—			—			—
Impairment		(73,939	)		(1,524	)		(28,414	)		—			(103,877	)
Net goodwill at September 30, 2017	$	37,810		$	—		$	—		$	26,072		$	63,882

The annual evaluation of the Company’s goodwill, by segment, is typically performed as of October 1, the beginning of the Company’s fourth fiscal quarter. In connection with the preparation of the Company’s consolidated financial statements for the fourth quarter of fiscal year 2016, the Company recorded a non-cash goodwill impairment charge of $18.3 million in its men’s segment. No goodwill impairment was recognized for the other segments of the Company during the fourth quarter of fiscal 2016.

In June 2017, the Company sold the businesses underlying its Entertainment segment. As a result, goodwill decreased by $53.0 million which was recorded within current assets held for sale as of December 31, 2016. Refer to Note 2 for further details.

In June 2017, the Company received its final purchase price installment payment from its joint venture partner in respect of such partner’s interest in the Iconix SE Asia, Ltd. joint venture. In accordance with ASC 810, the Company deconsolidated the joint venture from its condensed consolidated balance sheet as of June 30, 2017. As a result, goodwill decreased by $3.5 million. Refer to Note 4 for further details.

As of September 30, 2017, based upon the results of step 1 of the goodwill impairment test in accordance with ASC 350, the Company noted that the carrying value of the women’s, men’s, home and international segments exceeded their fair values after first reflecting the impairment to trademarks. In accordance with step 2 of the goodwill impairment test, the Company recorded a non-cash impairment charge of $103.9 million in the Current Quarter which is comprised of $73.9 million, $1.5 million, and $28.4 million in the women’s, men’s, and home segment, respectively. There was no goodwill impairment in the Company’s international segment during the Current Quarter and no goodwill impairment was recognized in the Prior Year Nine Months for any segment.

Trademarks and Other Intangibles, net

Trademarks and other intangibles, net, consist of the following:

		September 30, 2017				December 31, 2016
	Estimated Lives in Years	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Indefinite-lived trademarks	Indefinite	$	468,016	$	—	$	1,002,850	$	—
Definite-lived trademarks	10-15		8,958		8,907		8,958		8,870
Non-compete agreements	2-15		940		940		940		920
Licensing contracts	1-9		3,402		2,949		4,019		3,082
		$	481,316	$	12,796	$	1,016,767	$	12,872
Trademarks and other intangibles, net				$	468,520			$	1,003,895

The trademarks of Candie’s, Bongo, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific, Danskin, Rocawear, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter, Waverly, Ecko, Zoo York, Ed Hardy, Umbro, Modern Amusement, Buffalo, Lee Cooper, Hydraulic and Pony have been determined to have an indefinite useful life. Each of these intangible assets are tested for impairment annually and as needed on an individual basis as separate single units of accounting, with any related impairment charge recorded to the income statement at the time of determining such impairment. The annual evaluation of the Company’s indefinite-lived trademarks is typically performed as of October 1, the beginning of the Company’s fourth fiscal quarter.

As it relates to the Company’s impairment testing of goodwill and intangible assets, assumptions and inputs used in our fair value estimates include the following: (i) discount rates; (ii) royalty rates; (iii) projected average revenue growth rates; and (iv) projected long-term growth rates. Additionally, for those instances where core licenses have not been or will not be renewed and replacement licenses have not yet been identified, the Company’s estimate of fair value may incorporate a probability weighted average of projected cash flows based on several scenarios (e.g. DTR license, wholesale license, or direct-to-consumer model). Key inputs to these scenarios, which were selected based on the perspective of a market participant and include estimated future retail and wholesale sales and related royalties, are assessed a probability of occurrence to compensate for the uncertainty of success and timing of completion. The Company will continue to reassess these probabilities and inputs, as well as economic conditions and expectations of management, and may record additional impairment charges as these estimates are updated, all of which is subject to change in the future based on period-specific facts and circumstances.

In connection with the preparation of the Company’s financial statements for the fourth quarter of fiscal year 2016 and in accordance with ASC 350, the Company recorded non-cash impairment charges for indefinite-lived intangible assets (consisting of trademarks) of $424.9 million which is comprised of $144.6 million in the men’s segment, $31.5 million in the women’s segment, $50.0 million in the home segment, $5.1 million in the entertainment segment and $193.7 million in the international segment.

As September 30, 2017, as a result of a combination of factors, including the recent decisions by Target Corporation not to renew the existing Mossimo license agreement following its expiration in October 2018 and by Walmart, Inc. not to renew the existing DanskinNow license agreement following its expiration in January 2019 and the Company’s revised forecasted future earnings, the Company conducted an interim indefinite-lived intangible impairment test in accordance with ASC 350. As discussed above, as a result of the recent decline in the Company’s stock price and related market capitalization, the Company determined that there existed a further indication of potential impairment across all of the Company’s intangible assets. Consequently, the Company accelerated the timing of annual impairment testing of goodwill and intangible assets that is customarily performed in connection with the preparation of its year-end financial statements and completed such testing in connection with the preparation of its financial statements for the Current Quarter.

In the Current Quarter, the Company recorded a total non-cash asset impairment charge of $521.8 million which is comprised of $135.9 million in the men’s segment, $227.6 million in the women’s segment, $69.5 million in the home segment, and $88.8 million in the international segment to reduce various trademarks in those segments to fair value.

There was no impairment of the indefinite-lived trademarks during the Prior Year Nine Months. Further, in accordance with ASC 360, there were no impairment charges to the Company’s definite-lived trademarks during the Current Nine Months or Prior Year Nine Months.

In July 2017, the Company sold its ownership interest in NGX, LLC. As a result of this transaction, the Company’s indefinite-lived trademarks decreased by $5.0 million. Refer to Note 4 for further details.

In June 2017, the Company deconsolidated Iconix SE Asia, Ltd. which resulted in a decrease in indefinite-lived trademarks of $22.7 million. Refer to Note 4 for further details.

In June 2017, the Company sold the businesses underlying its Entertainment segment, representing the intellectual property of both the Peanuts and Strawberry Shortcake brands. As a result of this transaction, the Company’s indefinite-lived trademarks decreased by $204.3 million (which represents $153.6 million and $50.7 million for the Peanuts and Strawberry Shortcake brand, respectively). These indefinite-lived trademarks were classified as assets held for sale as of December 31, 2016. Refer to Note 2 for further details.

In December 2016, the Company sold the rights to the Sharper Image intellectual property and related assets. As a result of this transaction, the Company’s indefinite-lived trademarks decreased by $55.6 million.

In June 2016, the Company sold the rights to the London Fog intellectual property in the South Korea territory. As a result of this transaction, the Company’s indefinite-lived trademarks decreased by $0.4 million.

In February 2016, the Company sold its rights to the Badgley Mischka intellectual property and related assets. At the time of this transaction, the definite-lived trademarks for Badgley Mischka were fully amortized in the Company’s consolidated balance sheet. Refer to Note 5 for further details.

Other amortizable intangibles primarily include non-compete agreements and contracts, which are amortized on a straight-line basis over their estimated useful lives of 1 to 15 years. Certain trademarks are amortized using estimated useful lives of 10 to 15 years with no residual values.

Amortization expense for intangible assets for the Current Quarter was $0.2 million as compared to amortization expense for intangible assets of $(0.1) million for the Prior Year Quarter. Amortization expense for intangible assets for the Current Nine Months was $0.6 million as compared to amortization expense for intangible assets of $1.0 million for the Prior Year Nine Months.