XML 30 R14.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Goodwill and Intangible Assets | 12 Months Ended
--- | ---
Feb. 28, 2017
Goodwill and Intangible Assets |
Goodwill and Intangible Assets | Note 6 – 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. Some of our goodwill is held in jurisdictions that allow deductions for tax purposes, however, in some of those jurisdictions we have no tax basis for the associated goodwill recorded for book purposes. Accordingly, the majority of our goodwill is not deductible for tax purposes. We perform annual impairment testing each fiscal year and interim impairment testing, if necessary. We write down any asset deemed to be impaired to its fair value. Our 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, we consider the existing rates on Treasury Bills, yield spreads on assets with comparable expected lives, historical volatility of our common stock and that of comparable companies, and general economic and industry trends, among other considerations. When stock market or other conditions warrant, we expand our 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 our 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. Impairment Testing in Fiscal 2017 – Our annual impairment testing for goodwill and indefinite lived intangible assets has historically occurred in the first quarter of our fiscal year. In December 2016, we elected to change our annual impairment testing to the fourth quarter of our fiscal year. Accordingly, for fiscal 2017 we completed impairment tests during the first and fourth fiscal quarters. As a result of our testing of indefinite-lived trademarks in the fourth quarter, we recorded non-cash asset impairment charges of $5.0 million ($3.2 million after tax). As a result of our testing of indefinite-lived trademarks in the first quarter, we recorded non-cash asset impairment charges of $7.4 million ($5.1 million after tax). The charges in both quarters were related to certain brand assets and trademarks in our Beauty and Nutritional Supplements segments, which were written down to their estimated fair values, determined on the basis of our estimated future discounted cash flows using the relief from royalty valuation method. Due to recent declines in revenue associated with our Nutritional Supplements segment, our annual impairment testing of goodwill and other intangible assets for the segment reflected a fair value that was in excess of the carrying value by a smaller margin than occurred in previous impairment tests. In addition, the fair value of the indefinite lived brand asset was determined to be less than the carrying value and impairments of $9.5 million were recorded during fiscal 2017. The fair values were determined using primarily a discounted cash flow model and we believe our assumptions of future revenue, gross margin and operating expenses are reasonable in the circumstances. However, as we continue to execute our strategy, actual results could differ from our current expectations. To the extent that our forecasted cash flows were to decline further, it is reasonably likely that we could record additional impairment expense or other charges or losses in the future. We are unable to project what, if any, expense, charges, or losses will be in future periods. We will continue to closely monitor performance and market conditions related to this segment. Impairment Testing in Fiscal 2016 – We performed interim impairment testing in the fourth quarter of fiscal 2016 for certain of our brands as a result of revised growth outlooks. As a result of our testing, we recorded a non-cash impairment charge of $3.0 million ($2.7 million after tax). We performed our annual evaluation of goodwill and indefinite-lived intangible assets for impairment during the first quarter of fiscal 2016. As a result of our testing of indefinite-lived trademarks, we recorded a non-cash asset impairment charge of $3.0 million ($2.7 million after tax). The charges in both quarters were related to certain trademarks in our Beauty segment, which were written down to fair value, determined on the basis of future discounted cash flows using the relief from royalty valuation method. Impairment Testing in Fiscal 2015 – We performed our annual evaluation of goodwill and indefinite-lived intangible assets for impairment during the first quarter of fiscal 2015. As a result of our testing of indefinite-lived trademarks and licenses, we recorded a non-cash asset impairment charge of $9.0 million ($8.2 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 segment for fiscal 2017 and 2016: GOODWILL AND INTANGIBLE ASSETS
|  |  |  | Balances at |  |  |  |  |  |  |  |  |  |  | Balances at
|  | Weighted |  | February 29, 2016 |  | Year Ended February 28, 2017 |  | February 28, 2017
|  | Average |  | Gross |  | Cumulative |  |  |  |  |  |  |  | Acquisition |  | Gross |  | Cumulative |  |  |  |  |  |
|  | Life |  | Carrying |  | Goodwill |  |  |  |  |  |  |  | and Retirement |  | Carrying |  | Goodwill |  | Accumulated |  | Net Book
(in thousands) |  | (Years) |  | Amount |  | Impairments |  | Additions |  | Impairments |  | Adjustments |  | Amount |  | Impairments |  | Amortization |  | Value
Housewares: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  | $ | 166,132 |  | $ | - |  | $ | 116,053 |  | $ | - |  | $ | (129) |  | $ | 282,056 |  | $ | - |  | $ | - |  | $ | 282,056
Trademarks - indefinite |  |  |  |  | 75,200 |  |  | - |  |  | 59,000 |  |  | - |  |  | - |  |  | 134,200 |  |  | - |  |  | - |  |  | 134,200
Other intangibles - finite |  | 11.6 |  |  | 15,448 |  |  | - |  |  | 25,040 |  |  | - |  |  | (95) |  |  | 40,393 |  |  | - |  |  | (15,476) |  |  | 24,917
Subtotal |  |  |  |  | 256,780 |  |  | - |  |  | 200,093 |  |  | - |  |  | (224) |  |  | 456,649 |  |  | - |  |  | (15,476) |  |  | 441,173
Health & Home: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  |  | 284,913 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 284,913 |  |  | - |  |  | - |  |  | 284,913
Trademarks - indefinite |  |  |  |  | 54,000 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 54,000 |  |  | - |  |  | - |  |  | 54,000
Licenses - finite |  |  |  |  | 15,300 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 15,300 |  |  | - |  |  | (15,300) |  |  | -
Licenses - indefinite |  |  |  |  | 7,400 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 7,400 |  |  | - |  |  | - |  |  | 7,400
Other Intangibles - finite |  | 5.0 |  |  | 116,575 |  |  | - |  |  | 472 |  |  | - |  |  | (65) |  |  | 116,982 |  |  | - |  |  | (66,027) |  |  | 50,955
Subtotal |  |  |  |  | 478,188 |  |  | - |  |  | 472 |  |  | - |  |  | (65) |  |  | 478,595 |  |  | - |  |  | (81,327) |  |  | 397,268
Nutritional Supplements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  |  | 96,609 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 96,609 |  |  | - |  |  | - |  |  | 96,609
Brand assets - indefinite |  |  |  |  | 65,520 |  |  | - |  |  | - |  |  | (9,500) |  |  | - |  |  | 56,020 |  |  | - |  |  | - |  |  | 56,020
Other intangibles - finite |  | 4.3 |  |  | 44,180 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 44,180 |  |  | - |  |  | (16,715) |  |  | 27,465
Subtotal |  |  |  |  | 206,309 |  |  | - |  |  | - |  |  | (9,500) |  |  | - |  |  | 196,809 |  |  | - |  |  | (16,715) |  |  | 180,094
Beauty: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  |  | 81,841 |  |  | (46,490) |  |  | - |  |  | - |  |  | - |  |  | 81,841 |  |  | (46,490) |  |  | - |  |  | 35,351
Trademarks - indefinite |  |  |  |  | 48,754 |  |  | - |  |  | - |  |  | (2,900) |  |  | - |  |  | 45,854 |  |  | - |  |  | - |  |  | 45,854
Trademarks - finite |  | 11.6 |  |  | 150 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 150 |  |  | - |  |  | (92) |  |  | 58
Licenses - indefinite |  |  |  |  | 10,300 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 10,300 |  |  | - |  |  | - |  |  | 10,300
Licenses - finite |  | 5.8 |  |  | 13,696 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 13,696 |  |  | - |  |  | (11,849) |  |  | 1,847
Other intangibles - finite |  | 1.2 |  |  | 46,402 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 46,402 |  |  | - |  |  | (39,929) |  |  | 6,473
Subtotal |  |  |  |  | 201,143 |  |  | (46,490) |  |  | - |  |  | (2,900) |  |  | - |  |  | 198,243 |  |  | (46,490) |  |  | (51,870) |  |  | 99,883
Total |  |  |  | $ | 1,142,420 |  | $ | (46,490) |  | $ | 200,565 |  | $ | (12,400) |  | $ | (289) |  | $ | 1,330,296 |  | $ | (46,490) |  | $ | (165,388) |  | $ | 1,118,418
GOODWILL AND INTANGIBLE ASSETS
|  |  |  | 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
(in thousands) |  | (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
In fiscal 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 (before and after tax), recorded as a gain in SG&A. For fiscal 2015, sales into the relinquished countries accounted for approximately 0.3% of the Health & Home segment’s total net sales. 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 recorded in SG&A in the consolidated statements of income for fiscal 2017, 2016 and 2015, as well as estimated amortization expense for fiscal 2018 through 2022: AMORTIZATION OF INTANGIBLE ASSETS
Aggregate Amortization Expense (in thousands) |  |  |
Fiscal 2017 |  | $ | 28,308
Fiscal 2016 |  | $ | 27,773
Fiscal 2015 |  | $ | 25,328
Estimated Amortization Expense (in thousands) |  |  |
Fiscal 2018 |  | $ | 25,172
Fiscal 2019 |  | $ | 20,206
Fiscal 2020 |  | $ | 19,102
Fiscal 2021 |  | $ | 16,532
Fiscal 2022 |  | $ | 6,037

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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=66006027&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=66006027&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=66006027&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
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration