Goodwill and Intangibles

12 Months Ended

Feb. 29, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Note 10 - Goodwill and Intangibles

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 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.

The fair values used in our impairment tests are determined using estimated future discounted cash flows and relative market-based data. The valuation techniques utilized assumptions we believed to be appropriate in the circumstances; however, future circumstances attributable to a strategic change in our business could result in changes to those assumptions and other charges or losses relating our segments may be recorded and could be material. We are unable to project the amount of any expense, charge or loss that may be incurred in future periods.

Impairment Testing in Fiscal 2020 - We recorded non-cash asset impairment charges related to goodwill and intangible assets of $41.0 million ($36.4 million after tax). The charges were related to mass market personal care assets within our Beauty segment, which were written down to their estimated fair values, and are classified as assets held for sale.

Impairment Testing in Fiscal 2019 - We did not record any impairment charges related to goodwill or intangible assets.

Impairment Testing in Fiscal 2018 - As a result of our testing of indefinite-lived trademarks, we recorded non-cash impairment charges of $15.4 million ($13.8 million after tax). The charges were related to certain mass market personal care trademarks in our Beauty segment, which were written down to estimated fair value.

The following tables summarize the changes in our goodwill and intangible assets by segment for fiscal 2020 and 2019:



		Balances at February 28, 2019					Year Ended February 29, 2020											Balances at February 29, 2020
(in thousands)	Weighted Average Life (Years)	Gross Carrying Amount		Cumulative Goodwill Impairments			Additions		Impairments			Retirement / Reclassification Adjustments			Reclassification to Held for Sale			Gross Carrying Amount		Cumulative Goodwill Impairments			Accumulated Amortization (1)			Net Book Value
Housewares:
Goodwill		$	282,056	$	—		$	—	$	—		$	—		$	—		$	282,056	$	—		$	—		$	282,056
Trademarks - indefinite		134,200		—			—		—			—			—			134,200		—			—			134,200
Other intangibles - finite	13.8	41,417		—			709		—			(31		)	—			42,095		—			(21,469		)	20,626
Subtotal		457,673		—			709		—			(31		)	—			458,351		—			(21,469		)	436,882
Health & Home:
Goodwill		284,913		—			—		—			—			—			284,913		—			—			284,913
Trademarks - indefinite		54,000		—			—		—			—			—			54,000		—			—			54,000
Licenses - finite	3.7	17,050		—			—		—			—			—			17,050		—			(15,752		)	1,298
Licenses - indefinite		7,400		—			—		—			—			—			7,400		—			—			7,400
Other Intangibles - finite	5.8	117,967		—			256		—			—			—			118,223		—			(98,142		)	20,081
Subtotal		481,330		—			256		—			—			—			481,586		—			(113,894		)	367,692
Beauty:
Goodwill		81,841		(46,490		)	172,933		(25,503		)	—			(9,849		)	244,925		(71,993		)	—			172,932
Trademarks - indefinite		30,407		—			—		—			(30,407		)	—			—		—			—			—
Trademarks - finite	14.9	150		—			30,000		(11,168		)	30,407			(15,997		)	33,392		—			(3,564		)	29,828
Licenses - indefinite		10,300		—			—		—			(10,300		)	—			—		—			—			—
Licenses - finite	2.8	13,696		—			—		(4,234		)	10,300			(6,065		)	13,697		—			(12,800		)	897
Other intangibles - finite	10.7	46,402		—			33,000		(95		)	—			(136		)	79,171		—			(46,549		)	32,622
Subtotal		182,796		(46,490		)	235,933		(41,000		)	—			(32,047		)	371,185		(71,993		)	(62,913		)	236,279
Total		$	1,121,799	$	(46,490	)	$	236,898	$	(41,000	)	$	(31	)	$	(32,047	)	$	1,311,122	$	(71,993	)	$	(198,276	)	$	1,040,853


(1)	Reflects the retirement and reclassification of accumulated amortization of $49.4 million related to impaired assets and assets held for sale related to the Personal Care business in the Beauty segment.



(in thousands)	Weighted Average Life (Years)	Balances at February 28, 2018					Year Ended February 28, 2019							Balances at February 28, 2019
		Gross Carrying Amount		Cumulative Goodwill Impairments			Additions		Impairments		Retirement Adjustments			Gross Carrying Amount		Cumulative Goodwill Impairments			Accumulated Amortization			Net Book Value
Housewares:
Goodwill		$	282,056	$	—		$	—	$	—	$	—		$	282,056	$	—		$	—		$	282,056
Trademarks - indefinite		134,200		—			—		—		—			134,200		—			—			134,200
Other intangibles - finite	14.7	40,828		—			684		—		(95		)	41,417		—			(19,398		)	22,019
Subtotal		457,084		—			684		—		(95		)	457,673		—			(19,398		)	438,275
Health & Home:
Goodwill		284,913		—			—		—		—			284,913		—			—			284,913
Trademarks - indefinite		54,000		—			—		—		—			54,000		—			—			54,000
Licenses - finite	4.7	15,300		—			1,750		—		—			17,050		—			(15,402		)	1,648
Licenses - indefinite		7,400		—			—		—		—			7,400		—			—			7,400
Other Intangibles - finite	5.5	117,586		—			381		—		—			117,967		—			(87,953		)	30,014
Subtotal		479,199		—			2,131		—		—			481,330		—			(103,355		)	377,975
Beauty:
Goodwill		81,841		(46,490		)	—		—		—			81,841		(46,490		)	—			35,351
Trademarks - indefinite		30,407		—			—		—		—			30,407		—			—			30,407
Trademarks - finite	9.6	150		—			—		—		—			150		—			(102		)	48
Licenses - indefinite		10,300		—			—		—		—			10,300		—			—			10,300
Licenses - finite	3.8	13,696		—			—		—		—			13,696		—			(12,482		)	1,214
Other intangibles - finite	4.6	46,402		—			—		—		—			46,402		—			(46,126		)	276
Subtotal		182,796		(46,490		)	—		—		—			182,796		(46,490		)	(58,710		)	77,596
Total		$	1,119,079	$	(46,490	)	$	2,815	$	—	$	(95	)	$	1,121,799	$	(46,490	)	$	(181,463	)	$	893,846

The following table summarizes the amortization expense attributable to intangible assets recorded in SG&A in the consolidated statements of income for fiscal 2020, 2019 and 2018, as well as estimated amortization expense for fiscal 2021 through 2025:



Aggregate Amortization Expense (in thousands)
Fiscal 2020	$	21,271
Fiscal 2019	14,204
Fiscal 2018	18,854



Estimated Amortization Expense (in thousands)
Fiscal 2021	$	16,600
Fiscal 2022	10,276
Fiscal 2023	10,202
Fiscal 2024	9,817
Fiscal 2025	9,130