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GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended
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Feb. 29, 2016
Goodwill and Intangible Assets |
Goodwill and Intangible Assets | NOTE 5 – GOODWILL AND INTANGIBLE ASSETS We do not record amortization expense for goodwill or other intangible assets that have indefinite useful lives. Amortization expense is recorded for intangible assets with definite useful lives. We perform an annual impairment review of goodwill and other intangible assets during the first quarter of each fiscal year. We also perform interim impairment testing, if necessary. We write down any asset deemed to be impaired to its fair value. The Company's traditional impairment test methodology uses primarily estimated future discounted cash flow models (“DCF Models”). The DCF Models use a number of assumptions including expected future cash flows from the assets, volatility, risk free rate, and the expected life of the assets, the determination of which require significant judgments from management. In determining the assumptions to be used, the Company considers the existing rates on Treasury Bills, yield spreads on assets with comparable expected lives, historical volatility of the Company's common stock and that of comparable companies, and general economic and industry trends, among other considerations. When stock market or other conditions warrant, the Company expands its traditional impairment test methodology to give weight to other methods that provide additional observable market information in order to better reflect the current risk level being incorporated into market prices and in order to corroborate the fair values of each of the Company’s reporting units. Management will place increased reliance on these additional methods in conjunction with its DCF Models in the event that the total market capitalization of its stock drops below its consolidated stockholders’ equity balance for a sustained period. Considerable management judgment is necessary in reaching a conclusion regarding the reasonableness of fair value estimates, evaluating the most likely impact of a range of possible external conditions, considering the resulting operating changes and their impact on estimated future cash flows, determining the appropriate discount factors to use, and selecting and weighting appropriate comparable market level inputs. Impairments in the Fourth Quarter of Fiscal Year 2016 – The Company performed certain interim impairment testing in its fourth quarter of fiscal 2016 for certain of its brands as a result of revised growth outlooks. As a result of its testing, the Company recorded a non-cash impairment charge of $3.00 million ($2.66 million after tax). The charge was related to a trademark in our Beauty segment which was written down to 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 2016 – The Company performed its annual evaluation of goodwill and indefinite-lived intangible assets for impairment during the first quarter of fiscal year 2016. As a result of our testing of indefinite-lived trademarks, we recorded a non-cash asset impairment charge of $3.00 million ($2.66 million after tax). The charge was related to a trademark in our Beauty segment, which was written down to its 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 2015 – The Company performed its 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 Beauty 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 – The Company performed its 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 Beauty 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. The following tables summarize the changes in our goodwill and intangible assets by operating segment for fiscal years 2016 and 2015: GOODWILL AND INTANGIBLE ASSETS (in thousands)
|  |  |  | Balances at |  |  |  |  |  |  |  |  |  |  | Balances at
|  | Weighted |  | February 28, 2015 |  | Year Ended February 29, 2016 |  | February 29, 2016
|  | Average |  | Gross |  | Cumulative |  |  |  |  |  |  |  | Acquisition |  | Gross |  | Cumulative |  |  |  |  |  |
|  | Life |  | Carrying |  | Goodwill |  |  |  |  |  |  |  | and Retirement |  | Carrying |  | Goodwill |  | Accumulated |  | Net Book
Description / Life |  | (Years) |  | Amount |  | Impairments |  | Additions |  | Impairments |  | Adjustments |  | Amount |  | Impairments |  | Amortization |  | Value
Housewares: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  | $ | 166,132 |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | 166,132 |  | $ | - |  | $ | - |  | $ | 166,132
Trademarks - indefinite |  |  |  |  | 75,200 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 75,200 |  |  | - |  |  | - |  |  | 75,200
Other intangibles - finite |  | 4.0 |  |  | 15,754 |  |  | - |  |  | 446 |  |  | - |  |  | (752) |  |  | 15,448 |  |  | - |  |  | (12,916) |  |  | 2,532
Subtotal |  |  |  |  | 257,086 |  |  | - |  |  | 446 |  |  | - |  |  | (752) |  |  | 256,780 |  |  | - |  |  | (12,916) |  |  | 243,864
Health & Home: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  |  | 251,758 |  |  | - |  |  | 32,958 |  |  | - |  |  | 197 |  |  | 284,913 |  |  | - |  |  | - |  |  | 284,913
Trademarks - indefinite |  |  |  |  | 54,000 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 54,000 |  |  | - |  |  | - |  |  | 54,000
Licenses - finite |  | 1.0 |  |  | 15,300 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 15,300 |  |  | - |  |  | (12,750) |  |  | 2,550
Licenses - indefinite |  |  |  |  | - |  |  | - |  |  | 7,400 |  |  | - |  |  | - |  |  | 7,400 |  |  | - |  |  | - |  |  | 7,400
Other Intangibles - finite |  | 6.0 |  |  | 113,727 |  |  | - |  |  | 2,848 |  |  | - |  |  | - |  |  | 116,575 |  |  | - |  |  | (54,913) |  |  | 61,662
Subtotal |  |  |  |  | 434,785 |  |  | - |  |  | 43,206 |  |  | - |  |  | 197 |  |  | 478,188 |  |  | - |  |  | (67,663) |  |  | 410,525
Nutritional Supplements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  |  | 96,486 |  |  | - |  |  | - |  |  | - |  |  | 123 |  |  | 96,609 |  |  | - |  |  | - |  |  | 96,609
Brand assets - indefinite |  |  |  |  | 65,500 |  |  | - |  |  | 20 |  |  | - |  |  | - |  |  | 65,520 |  |  | - |  |  | - |  |  | 65,520
Other intangibles - finite |  | 5.3 |  |  | 43,800 |  |  | - |  |  | 380 |  |  | - |  |  | - |  |  | 44,180 |  |  | - |  |  | (10,431) |  |  | 33,749
Subtotal |  |  |  |  | 205,786 |  |  | - |  |  | 400 |  |  | - |  |  | 123 |  |  | 206,309 |  |  | - |  |  | (10,431) |  |  | 195,878
Beauty: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  |  | 81,841 |  |  | (46,490) |  |  | - |  |  | - |  |  | - |  |  | 81,841 |  |  | (46,490) |  |  | - |  |  | 35,351
Trademarks - indefinite |  |  |  |  | 54,754 |  |  | - |  |  | - |  |  | (6,000) |  |  | - |  |  | 48,754 |  |  | - |  |  | - |  |  | 48,754
Trademarks - finite |  | 12.6 |  |  | 150 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 150 |  |  | - |  |  | (87) |  |  | 63
Licenses - indefinite |  |  |  |  | 10,300 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 10,300 |  |  | - |  |  | - |  |  | 10,300
Licenses - finite |  | 6.8 |  |  | 13,696 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 13,696 |  |  | - |  |  | (11,532) |  |  | 2,164
Other intangibles - finite |  | 2.2 |  |  | 47,876 |  |  | - |  |  | - |  |  | - |  |  | (1,474) |  |  | 46,402 |  |  | - |  |  | (34,545) |  |  | 11,857
Subtotal |  |  |  |  | 208,617 |  |  | (46,490) |  |  | - |  |  | (6,000) |  |  | (1,474) |  |  | 201,143 |  |  | (46,490) |  |  | (46,164) |  |  | 108,489
Total |  |  |  | $ | 1,106,274 |  | $ | (46,490) |  | $ | 44,052 |  | $ | (6,000) |  | $ | (1,906) |  | $ | 1,142,420 |  | $ | (46,490) |  | $ | (137,174) |  | $ | 958,756
GOODWILL AND INTANGIBLE ASSETS (in thousands)
|  |  |  | Balances at |  |  |  |  |  |  |  |  |  |  | Balances at
|  | Weighted |  | February 28, 2014 |  | Year Ended February 28, 2015 |  | February 28, 2015
|  | Average |  | Gross |  | Cumulative |  |  |  |  |  |  |  | Acquisition |  | Gross |  | Cumulative |  |  |  |  |  |
|  | Life |  | Carrying |  | Goodwill |  |  |  |  |  |  |  | and Retirement |  | Carrying |  | Goodwill |  | Accumulated |  | Net Book
Description / Life |  | (Years) |  | Amount |  | Impairments |  | Additions |  | Impairments |  | Adjustments |  | Amount |  | Impairments |  | Amortization |  | Value
Housewares: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  | $ | 166,132 |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | 166,132 |  | $ | - |  | $ | - |  | $ | 166,132
Trademarks - indefinite |  |  |  |  | 75,200 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 75,200 |  |  | - |  |  | - |  |  | 75,200
Other intangibles - finite |  | 1.7 |  |  | 15,693 |  |  | - |  |  | 244 |  |  | - |  |  | (183) |  |  | 15,754 |  |  | - |  |  | (12,331) |  |  | 3,423
Subtotal |  |  |  |  | 257,025 |  |  | - |  |  | 244 |  |  | - |  |  | (183) |  |  | 257,086 |  |  | - |  |  | (12,331) |  |  | 244,755
Health & Home: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  |  | 251,758 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 251,758 |  |  | - |  |  | - |  |  | 251,758
Trademarks - indefinite |  |  |  |  | 54,000 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 54,000 |  |  | - |  |  | - |  |  | 54,000
Licenses - finite |  | 2.0 |  |  | 15,300 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 15,300 |  |  | - |  |  | (9,377) |  |  | 5,923
Other Intangibles - finite |  | 6.7 |  |  | 114,490 |  |  | - |  |  | 912 |  |  | - |  |  | (1,675) |  |  | 113,727 |  |  | - |  |  | (43,848) |  |  | 69,879
Subtotal |  |  |  |  | 435,548 |  |  | - |  |  | 912 |  |  | - |  |  | (1,675) |  |  | 434,785 |  |  | - |  |  | (53,225) |  |  | 381,560
Nutritional Supplements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  |  | - |  |  | - |  |  | 95,308 |  |  | - |  |  | 1,178 |  |  | 96,486 |  |  | - |  |  | - |  |  | 96,486
Brand assets - indefinite |  |  |  |  | - |  |  | - |  |  | 65,500 |  |  | - |  |  | - |  |  | 65,500 |  |  | - |  |  | - |  |  | 65,500
Other intangibles - finite |  | 6.3 |  |  | - |  |  | - |  |  | 43,800 |  |  | - |  |  | - |  |  | 43,800 |  |  | - |  |  | (4,171) |  |  | 39,629
Subtotal |  |  |  |  | - |  |  | - |  |  | 204,608 |  |  | - |  |  | 1,178 |  |  | 205,786 |  |  | - |  |  | (4,171) |  |  | 201,615
Beauty: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  |  | 81,841 |  |  | (46,490) |  |  | - |  |  | - |  |  | - |  |  | 81,841 |  |  | (46,490) |  |  | - |  |  | 35,351
Trademarks - indefinite |  |  |  |  | 63,754 |  |  | - |  |  | - |  |  | (9,000) |  |  | - |  |  | 54,754 |  |  | - |  |  | - |  |  | 54,754
Trademarks - finite |  | 13.6 |  |  | 150 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 150 |  |  | - |  |  | (82) |  |  | 68
Licenses - indefinite |  |  |  |  | 10,300 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 10,300 |  |  | - |  |  | - |  |  | 10,300
Licenses - finite |  | 7.8 |  |  | 18,683 |  |  | - |  |  | - |  |  | - |  |  | (4,987) |  |  | 13,696 |  |  | - |  |  | (11,216) |  |  | 2,480
Other intangibles - finite |  | 3.2 |  |  | 49,437 |  |  | - |  |  | - |  |  | - |  |  | (1,561) |  |  | 47,876 |  |  | - |  |  | (30,602) |  |  | 17,274
Subtotal |  |  |  |  | 224,165 |  |  | (46,490) |  |  | - |  |  | (9,000) |  |  | (6,548) |  |  | 208,617 |  |  | (46,490) |  |  | (41,900) |  |  | 120,227
Total |  |  |  | $ | 916,738 |  | $ | (46,490) |  | $ | 205,764 |  | $ | (9,000) |  | $ | (7,228) |  | $ | 1,106,274 |  | $ | (46,490) |  | $ | (111,627) |  | $ | 948,157
In fiscal year 2015, 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 fiscal years 2015 and 2014, sales into the relinquished countries accounted for approximately 0.3 and 0.2 percent, respectively, of the Health & Home 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 fiscal years 2016, 2015 and 2014, as well as estimated amortization expense for the fiscal years 2017 through 2021: AMORTIZATION OF INTANGIBLE ASSETS (in thousands)
Aggregate Amortization Expense |  |  |
For the fiscal years ended |  |  |
February 2016 |  | $ | 27,773
February 2015 |  | $ | 25,328
February 2014 |  | $ | 21,612
Estimated Amortization Expense |  |  |
For the fiscal years ended |  |  |
February 2017 |  | $ | 26,537
February 2018 |  | $ | 23,246
February 2019 |  | $ | 18,631
February 2020 |  | $ | 17,309
February 2021 |  | $ | 14,788
Many of the license agreements under which we sell or intend to sell products with trademarks owned by third parties require that we pay minimum royalties. Some license agreements also require that we make minimum levels of advertising expenditures. For fiscal year 2017, estimated minimum royalties due and minimum advertising expenditures under these license agreements total $12.73 and $5.90 million, respectively.

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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 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 Reference 2: 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 3: 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 4: 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 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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