GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2013

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

Goodwill represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired and accounted for under the purchase method. Accounting rules require that we test at least annually for possible goodwill impairment. We perform our test in the fourth fiscal quarter of each year using a discounted cash flow analysis that requires that certain assumptions and estimates be made regarding industry economic factors and future profitability and cash flows. We test goodwill at the segment level where acquired businesses have been fully integrated into our existing structure and at one level below the segment level where acquired businesses have not been fully integrated. As a result of the 2012 impairment analysis, we determined that the goodwill balance existing in our international retail segment was impaired as a result of decreases in projected revenues and profitability for our Kurt Geiger retail business resulting from economic conditions in Europe. Accordingly, we recorded an impairment charge of $47.6 million. As a result of the 2013 impairment analysis, we determined that the goodwill balance existing in our domestic wholesale sportswear segment and the goodwill in our domestic wholesale footwear and accessories segment related to our Brian Atwood business were impaired as a result of decreases in projected revenues and profitability. Accordingly, we recorded an impairment charge of $49.9 million.

The following table presents, by segment and in total, changes in the carrying amount of goodwill for 2012 and 2013.

(In millions)	Domestic Wholesale Sportswear			Domestic Wholesale Jeanswear			Domestic Wholesale Footwear & Accessories			Domestic Retail			International Wholesale		International Retail			Total
Balance, January 1, 2012
Goodwill	$	46.7		$	519.2		$	859.8		$	120.6		$	111.6	$	50.4		$	1,708.3
Accumulated impairment losses		-			(519.2	)		(813.2	)		(120.6	)		-		-			(1,453.0	)
Net goodwill		46.7			-			46.6			-			111.6		50.4			255.3
Acquisition of Brian Atwood		-			-			3.2			-			-		-			3.2
Impairment		-			-			-			-			-		(47.6	)		(47.6	)
Foreign currency translation effects		-			-			-			-			1.9		2.5			4.4
Balance, December 31, 2012
Goodwill		46.7			519.2			863.0			120.6			113.5		52.7			1,715.7
Accumulated impairment losses		-			(519.2	)		(813.2	)		(120.6	)		-		(47.4	)		(1,500.4	)
Net goodwill		46.7			-			49.8			-			113.5		5.3			215.3
Impairment		(46.7	)		-			(3.2	)		-			-		-			(49.9	)
Foreign currency translation effects		-			-			-			-			1.0		-			1.0
Balance, December 31, 2013
Goodwill		46.7			519.2			863.0			120.6			114.5		53.7			1,717.7
Accumulated impairment losses		(46.7	)		(519.2	)		(816.4	)		(120.6	)		-		(48.4	)		(1,551.3	)
Net goodwill	$	-		$	-		$	46.6		$	-		$	114.5	$	5.3		$	166.4

We also perform our annual impairment test for indefinite-lived trademarks during the fourth fiscal quarter of the year. As a result of these analyses, we recorded trademark impairment charges of $7.2 million, $21.5 million and $31.5 million for 2013, 2012 and 2011, respectively, as a result of decreases in projected revenues for certain brands. All trademark impairment charges for 2013 and 2011 are reported as SG&A expenses in the licensing and other segment. The charge for 2012 was recorded as a $21.4 million SG&A expense in the licensing and other segment and a $0.1 million SG&A expense in the international retail segment. In 2012, we also determined that the acquired customer relationship intangible asset from the acquisition of Kurt Geiger was impaired due to decreases in projected wholesale revenues, and we recorded a $5.6 million impairment charge. This impairment charge is reported as an SG&A expense in the international wholesale segment.

The components of other intangible assets are as follows:

December 31,	2013				2012
(In millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets
Customer relationships	$	154.2	$	34.8	$	151.6	$	24.4
License agreements		61.7		56.0		61.4		54.5
Trademarks		24.5		11.4		24.5		4.9
Acquired favorable leases		13.4		4.9		13.1		3.5
Covenants not to compete		3.8		2.9		3.8		2.1
		257.6		110.0		254.4		89.4
Indefinite-life trademarks		704.8		-		704.7		-
	$	962.4	$	110.0	$	959.1	$	89.4

Amortization expense for intangible assets subject to amortization was $14.4 million, $16.8 million and $14.8 million for 2013, 2012 and 2011, respectively. Amortization expense for intangible assets subject to amortization for each of the years in the five-year period ending December 31, 2018 is estimated to be $14.9 million in 2014, $13.5 million in 2015, $13.2 million in 2016, $12.9 million in 2017 and $11.2 million in 2018.

The cash flow models we use to estimate the fair values of our goodwill and trademarks involve several assumptions. Changes in these assumptions could materially impact our fair value estimates. Assumptions critical to our fair value estimates are: (i) discount rates used to derive the present value factors used in determining the fair value of the reporting units and trademarks; (ii) royalty rates used in our trademark valuations; (iii) projected revenue growth rates; and (iv) projected long-term growth rates used in the derivation of terminal year values. These and other assumptions are impacted by economic conditions and expectations of management and may change in the future based on period-specific facts and circumstances. The following table shows the assumptions we used to derive our fair value estimates as part of our annual impairment testing for 2013 and 2012.

	2013		2012
	Goodwill	Trademarks	Goodwill	Trademarks
Discount rates	12.0%	12.0%	12.0%	12.0%
Royalty rates	--	1.0% - 8.0%	--	1.0% - 8.0%
Weighted-average revenue growth rates	4.7%	6.5%	5.4%	6.2%
Long-term growth rates	3.0%	0% - 3.0%	3.0%	0% - 3.0%

While the fair value of each operating segment at December 31, 2013 significantly exceeded the segment's carrying value, should economic conditions and trends (such as reduced consumer spending or the failure to achieve projected results) deteriorate throughout 2014 and beyond, especially in the United Kingdom and Europe, the carrying values of trademarks and goodwill could become further impaired.

- 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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