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Goodwill and Intangible Assets | 9 Months Ended
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Nov. 30, 2014
Goodwill and Intangible Assets |
Goodwill and Intangible Assets | Note 9 - Goodwill and Intangible Assets Annual Impairment Testing in the First Quarter of Fiscal Year 2015 - We performed our annual evaluation of goodwill and indefinite-lived intangible assets for impairment during the first quarter of fiscal year 2015. As a result of our testing of indefinite-lived trademarks and licenses, we recorded a non-cash asset impairment charge of $9.00 million ($8.16 million after tax). The charge was related to certain trademarks in our Personal Care segment, which were written down to their estimated fair value, determined on the basis of future discounted cash flows using the relief from royalty valuation method. Annual Impairment Testing in the First Quarter of Fiscal Year 2014 - We performed our annual evaluation of goodwill and indefinite-lived intangible assets for impairment during the first quarter of fiscal year 2014. As a result of our testing of indefinite-lived trademarks and licenses, we recorded a non-cash asset impairment charge of $12.05 million ($12.03 million after tax). The charge was related to certain trademarks in our Personal Care segment, which were written down to their estimated fair value, determined on the basis of future discounted cash flows using the relief from royalty valuation method. A summary of the carrying amounts and associated accumulated amortization for all intangible assets by operating segment follows: GOODWILL AND INTANGIBLE ASSETS (in thousands)
|  | November 30, 2014 |  |  | February 28, 2014 |
|  | Gross |  | Cumulative |  |  |  |  |  |  | Gross |  | Cumulative |  |  |  |  |
|  | Carrying |  | Goodwill |  | Accumulated |  | Net Book |  |  | Carrying |  | Goodwill |  | Accumulated |  | Net Book |
Description |  | Amount |  | Impairments |  | Amortization |  | Value |  |  | Amount |  | Impairments |  | Amortization |  | Value |
Housewares: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  | $ | 166,132 |  | $ | - |  | $ | - |  | $ | 166,132 |  |  | $ | 166,132 |  | $ | - |  | $ | - |  | $ | 166,132 |
Trademarks - indefinite |  | 75,200 |  | - |  | - |  | 75,200 |  |  | 75,200 |  | - |  | - |  | 75,200 |
Other intangibles - finite |  | 15,923 |  | - |  | (12,090 | ) | 3,833 |  |  | 15,693 |  | - |  | (11,149 | ) | 4,544 |
Total Housewares |  | 257,255 |  | - |  | (12,090 | ) | 245,165 |  |  | 257,025 |  | - |  | (11,149 | ) | 245,876 |
Healthcare / Home Environment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  | 251,758 |  | - |  | - |  | 251,758 |  |  | 251,758 |  | - |  | - |  | 251,758 |
Trademarks - indefinite |  | 54,000 |  | - |  | - |  | 54,000 |  |  | 54,000 |  | - |  | - |  | 54,000 |
Licenses - finite |  | 15,300 |  | - |  | (8,637 | ) | 6,663 |  |  | 15,300 |  | - |  | (6,416 | ) | 8,884 |
Other intangibles - finite |  | 114,918 |  | - |  | (42,789 | ) | 72,129 |  |  | 114,490 |  | - |  | (34,606 | ) | 79,884 |
Total Healthcare / Home Environment |  | 435,976 |  | - |  | (51,426 | ) | 384,550 |  |  | 435,548 |  | - |  | (41,022 | ) | 394,526 |
Nutritional Supplements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill (1) |  | 96,587 |  | - |  | - |  | 96,587 |  |  | - |  | - |  | - |  | - |
Brand assets - indefinite |  | 65,500 |  | - |  | - |  | 65,500 |  |  | - |  | - |  | - |  | - |
Other intangibles - finite |  | 43,800 |  | - |  | (2,607 | ) | 41,193 |  |  | - |  | - |  | - |  | - |
Total Nutritional Supplements |  | 205,887 |  | - |  | (2,607 | ) | 203,280 |  |  | - |  | - |  | - |  | - |
Personal Care: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  | 81,841 |  | (46,490 | ) | - |  | 35,351 |  |  | 81,841 |  | (46,490 | ) | - |  | 35,351 |
Trademarks - indefinite |  | 54,754 |  | - |  | - |  | 54,754 |  |  | 63,754 |  | - |  | - |  | 63,754 |
Trademarks - finite |  | 150 |  | - |  | (81 | ) | 69 |  |  | 150 |  | - |  | (77 | ) | 73 |
Licenses - indefinite |  | 10,300 |  | - |  | - |  | 10,300 |  |  | 10,300 |  | - |  | - |  | 10,300 |
Licenses - finite |  | 18,683 |  | - |  | (16,123 | ) | 2,560 |  |  | 18,683 |  | - |  | (15,887 | ) | 2,796 |
Other intangibles - finite |  | 49,437 |  | - |  | (30,766 | ) | 18,671 |  |  | 49,437 |  | - |  | (26,563 | ) | 22,874 |
Total Personal Care |  | 215,165 |  | (46,490 | ) | (46,970 | ) | 121,705 |  |  | 224,165 |  | (46,490 | ) | (42,527 | ) | 135,148 |
Total |  | $ | 1,114,283 |  | $ | (46,490 | ) | $ | (113,093 | ) | $ | 954,700 |  |  | $ | 916,738 |  | $ | (46,490 | ) | $ | (94,698 | ) | $ | 775,550 |
| (1) |  | Includes $1.28 million of acquisition adjustments recorded in the fiscal quarter ending August 31, 2014.
On October 24, 2014, we amended the terms of our trademark licensing agreement with Honeywell International Inc. to relinquish the rights to market Honeywell branded portable air purifiers after December 31, 2015 in twelve selected developing countries, including China. In exchange for the amendment, we received a one-time cash payment of $7 million ($6.98 million after tax), which was recorded as a gain in SG&A. For the fiscal quarter and year-to-date ended November 30, 2014, sales into the relinquished countries accounted for approximately 1.1 and 1.0 percent, respectively, of the Healthcare / Home Environment segment’s total net sales. For the fiscal quarter and year-to-date ended November 30, 2013, sales into the relinquished countries accounted for approximately 0.4 and 0.5 percent, respectively, of the Healthcare / Home Environment segment’s total net sales. We plan to market portable air purifiers in the relinquished markets under non-Honeywell branded trademarks and retained the rights to market Honeywell portable air purifiers in other countries, including the United States, Canada and all European countries. For categories such as portable fans, portable heaters and portable humidifiers, we remain the Honeywell global licensee under the same material terms as our previous agreement. The following table summarizes the amortization expense attributable to intangible assets for the periods covered in this quarterly report, as well as our estimated amortization expense for the fiscal years 2015 through 2020.
AMORTIZATION OF INTANGIBLE ASSETS |  |  |
(in thousands) |  |  |
Aggregate Amortization Expense |  |  |
For the three months ended |  |  |
November 30, 2014 |  | $ | 6,853 |
November 30, 2013 |  | $ | 5,407 |
Aggregate Amortization Expense |  |  |
For the nine months ended |  |  |
November 30, 2014 |  | $ | 18,427 |
November 30, 2013 |  | $ | 16,246 |
Estimated Amortization Expense |  |  |
For the fiscal years ended |  |  |
February 2015 |  | $ | 25,257 |
February 2016 |  | $ | 27,150 |
February 2017 |  | $ | 26,835 |
February 2018 |  | $ | 23,030 |
February 2019 |  | $ | 18,306 |
February 2020 |  | $ | 16,720 |

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16323-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16265-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13854-109267 + Details
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