Goodwill & Other Intangible Assets

9 Months Ended

Nov. 22, 2013

Goodwill & Other Intangible Assets Disclosure [Abstract]

GOODWILL & OTHER INTANGIBLE ASSETS

A summary of the changes in goodwill balances during the nine months ended November 22, 2013, by reportable segment, is as follows:



Goodwill	Americas			EMEA			Other			Total
Goodwill	92.1			265.0			116.7			473.8
Accumulated impairment losses	(1.7		)	(265.0		)	(85.7		)	(352.4		)
Balance as of February 22, 2013	$	90.4		$	—		$	31.0		$	121.4
Impairments (1)	—			—			(12.3		)	(12.3		)
Currency translation adjustments	(0.2		)	—			(0.2		)	(0.4		)
Goodwill	91.9			265.0			116.5			473.4
Accumulated impairment losses	(1.7		)	(265.0		)	(98.0		)	(364.7		)
Balance as of November 22, 2013	$	90.2		$	—		$	18.5		$	108.7

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(1)	In Q3 2014, we recorded goodwill impairment charges in our Asia Pacific reporting unit. See further details below.

In Q3 2014, we determined that it was more likely than not that the fair value of our Asia Pacific reporting unit (in the Other category) had fallen below its carrying value. The decline in the estimated fair value of the Asia Pacific reporting unit was driven in part by continued quarterly operating losses during 2014, which were substantially below previous expectations. These losses were primarily the result of lower than expected revenue in most markets, especially China, Australia and Japan. The sales shortfalls are partially due to the impact of weaker than expected economic conditions in the region. During Q3 2014, senior management completed a comprehensive review of the Asia Pacific business unit during a visit to the region, including an update of our near-term financial projections, taking into consideration current industry and market conditions and business model challenges facing our Asia Pacific business unit. As a result, we determined that lower levels of near-term revenue growth and profitability were more likely than not and thus, we completed an interim goodwill impairment evaluation for the Asia Pacific reporting unit.

Our goodwill impairment evaluation is a two step process. In step one, we compare the fair value of each reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value, we perform step two to measure the amount of impairment loss, if any. In step two, the reporting unit's fair value is allocated to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit's goodwill is less than the carrying value, the difference is recorded as an impairment loss.

We estimated the fair value of the Asia Pacific reporting unit using the income approach, which calculates the fair value of the reporting unit based on the present value of its estimated future cash flows. Cash flow projections are based on management's estimates of economic and market trends, revenue growth rates, cost structure and other expectations about the anticipated short-term and long-term operating results. The discount rate used is based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the business's ability to execute on the projected cash flows. The estimation of the fair value of the reporting unit represents a Level 3 measurement.

Based on the step one and step two analyses, we recorded a $12.3 goodwill impairment charge in Q3 2014, and there is no remaining net goodwill in the Asia Pacific reporting unit as of November 22, 2013. Additionally, a charge of $0.6 was recorded in Asia Pacific for impairment of other intangible assets. We tested the recoverability of the Asia Pacific long-lived assets (other than goodwill and intangible assets) and concluded that these assets were not impaired.

For all other reporting units, we determined that there were no events requiring an interim goodwill impairment evaluation in Q3 2014. We will continue to evaluate goodwill on an annual basis in Q4 and whenever events or changes in circumstances, such as significant adverse changes in business climate or operating results, changes in management's business strategy or significant declines in our stock price, indicate that there may be a potential indicator of impairment

- 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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