Goodwill and Other Intangible Assets

6 Months Ended

Aug. 03, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

4. Goodwill and Other Intangible Assets

Annually during the first quarter, or more frequently if impairment indicators arise, the Company reviews goodwill and intangible assets with indefinite lives for impairment. The annual review of goodwill and assets with indefinite lives performed during the first quarters of 2013 and 2012 did not result in impairment charges. The fair value of each of the reporting units substantially exceeds its carrying value for both periods. The following table provides a summary of goodwill by reportable segment.

Goodwill as of August 3, 2013 includes $50 million relating to the acquisition of Runners Point Group. Other changes include foreign exchange fluctuations.

	August 3,		July 28,		February 2,
Goodwill (in millions)	2013		2012		2013
Athletic Stores ⁽¹⁾	$	67	$	16	$	18
Direct-to-Customers		127		127		127
	$	194	$	143	$	145

⁽¹⁾

The entire amount of goodwill related to the acquisition was preliminarily allocated to the Athletic Stores segment and is subject to change based on the finalization of our detailed valuations.

The components of finite-lived intangible assets and intangible assets not subject to amortization are as follows:

	August 3, 2013						July 28, 2012						February 2, 2013
	Gross		Accum.		Net		Gross		Accum.		Net		Gross		Accum.		Net
(in millions)	value		amort.		value		Value		amort.		value		Value		amort.		value
Amortized intangible assets:
Lease acquisition costs	$	154	$	(134)	$	20	$	152	$	(131)	$	21	$	158	$	(137)	$	21
Trademarks		21		(10)		11		21		(9)		12		21		(9)		12
Favorable leases		4		(4)		—		5		(5)		—		5		(5)		—
CCS customer relationships		21		(20)		1		21		(16)		5		21		(18)		3

	$	200	$	(168)	$	32	$	199	$	(161)	$	38	$	205	$	(169)	$	36

Indefinite life intangible assets:
Republic of Ireland trademark						1						1						1
CCS tradename						3						10						3
					$	4					$	11					$	4
Other intangible assets, net					$	36					$	49					$	40

For the twenty-six week period ended August 3, 2013, activity included amortization of $6 million, partially offset by lease acquisition additions of $2 million. The lease acquisition additions recorded during the period are being amortized over a weighted-average of 10 years.

	Thirteen weeks ended				Twenty-six weeks ended
	August 3,		July 28,		August 3,		July 28,
(in millions)	2013		2012		2013		2012
Amortization expense	$	3	$	3	$	6	$	7

Future expected amortization expense for finite life intangible assets is estimated as follows:

	(in millions)
Remainder of 2013	$	4
2014		5
2015		4
2016		3
2017		3
2018		3

- 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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