Goodwill and Other Intangible Assets

12 Months Ended

Jan. 31, 2015

4. GOODWILL AND OTHER INTANGIBLE ASSETS

In connection with the Transactions, the Company recorded goodwill and other intangible assets at date of acquisition. The Company’s indefinite-lived intangible assets include tradenames and territory rights which are not subject to amortization. The Company’s principal definite-lived intangible assets include lease rights, franchise agreements and leases that existed at date of acquisition with terms that were favorable to market at that date.

The changes in the carrying amount of goodwill during Fiscal 2014 and Fiscal 2013 by reporting unit are as follows (in thousands):


	North America			Europe			Total
Balance as of January 31, 2015:
Goodwill	$	1,415,651		$	431,405		$	1,847,056
Accumulated impairment losses		(303,157	)		(117,000	)		(420,157	)

	$	1,112,494		$	314,405		$	1,426,899


	North America			Europe			Total
Balance as of February 1, 2014:
Goodwill	$	1,415,651		$	431,405		$	1,847,056
Accumulated impairment losses		(180,000	)		(117,000	)		(297,000	)

	$	1,235,651		$	314,405		$	1,550,056

The carrying amount and accumulated amortization of identifiable intangible assets as of January 31, 2015 and February 1, 2014 were (in thousands):


		January 31, 2015					February 1, 2014
	Estimated	Gross					Gross
	Life	Carrying		Accumulated			Carrying		Accumulated
	in Years	Amount		Amortization			Amount		Amortization
Intangible assets subject to amortization:
Lease rights (1)	Lease terms ranging from 6 to 18	$	72,532	$	(13,965	)	$	86,145	$	(13,142	)
Franchise agreements	4 to 9		40,738		(26,083	)		40,738		(23,005	)
Favorable lease obligations	10		30,827		(29,666	)		30,827		(28,509	)
Other	5		965		(660	)		872		(538	)

Total intangible assets subject to amortization			145,062		(70,374	)		158,582		(65,194	)
Indefinite-lived intangible assets:
Indefinite-lived tradenames		$	435,074	$	—		$	447,107	$	—
Indefinite-lived territory rights			600		—			600		—

Total indefinite-lived intangible assets			435,674		—			447,707		—
Total intangible assets		$	580,736	$	(70,374	)	$	606,289	$	(65,194	)

(1)	Amounts include lease rights not currently subject to amortization of $40,938 and $52,350 as of January 31, 2015 and February 1, 2014, respectively.

For Fiscal 2014, Fiscal 2013 and Fiscal 2012, amortization expense of $7.5 million, $8.2 million and $8.4 million, respectively, was recognized by the Company. As discussed in Note 3 – Impairment Charges, the Company recognized impairment charges related to intangible assets of $12.0 million in Fiscal 2014. There were no such impairment charges for intangible assets in Fiscal 2013 and Fiscal 2012.


			Weighted Average Amortization
			Period for Amortizable
Intangible Asset Acquisitions (in 000’s)	Amortizable		Intangible Asset Acquisitions
Lease rights:
Fiscal 2014	$	81		10.0
Fiscal 2013		1,389		10.0
Fiscal 2012		2,276		9.3
Other:
Fiscal 2014		94		5.0
Fiscal 2013		154		5.0
Fiscal 2012		173		5.0

The weighted average amortization period of amortizable intangible assets acquired in Fiscal 2014 was 7.3 years.

The remaining net amortization as of January 31, 2015 of identifiable intangible assets with finite lives by year is as follows (in thousands):


Fiscal Year	Amortization
2015	$	5,867
2016		5,194
2017		4,761
2018		4,577
2019		4,499
2020 and thereafter		8,852

Total	$	33,750

- 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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