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GOODWILL AND INTANGIBLE ASSETS, NET
 12 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLE ASSETS, NET
GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

Effective January 1, 2018, the Company implemented its brand-centric organizational structure that is built around four global brand teams: Revlon; Elizabeth Arden; Portfolio; and Fragrances, which also represent the Company's reporting segments. Following this change in the Company's organizational structure, the Company performed an analysis of the components within each reporting segment and identified six reporting units: (1) Revlon; (2) Elizabeth Arden Skin and Color, within the Elizabeth Arden segment, which includes Elizabeth Arden skin care and color cosmetics brands; (3) Elizabeth Arden Fragrances, within the Elizabeth Arden segment, which includes Elizabeth Arden branded fragrances; (4) Mass Portfolio with the Portfolio segment, which includes the Company's Portfolio brands sold primarily through the mass retail channel; (5) Professional Portfolio within the Portfolio segment, which includes the Company's Portfolio brands sold primarily through professional salons; and (6) Fragrances. The Company's Revlon and Fragrances reporting units are consistent with the respective reportable segments.

Concurrent with the change in reporting segments, goodwill was reassigned to the affected reporting units that have been identified within each reporting segment using a relative fair value allocation approach outlined in ASC 350, using December 31, 2017 carrying values.

The Company utilized the two-step process in assessing whether goodwill was impaired for each of the Company's six reporting units and determined that it was more likely than not that the fair values of each of these reporting units exceeded their respective carrying amounts.

The following table presents the amount of goodwill that has been reassigned to each of the Company's reportable segments as of January 1, 2018 using the relative fair value allocation approach, as well as any changes in goodwill by segment during the year ended December 31, 2018:
 
Revlon
 
Portfolio
 
Elizabeth Arden
 
Fragrances
 
Total
Balance at January 1, 2017(a)
$
265.3

 
$
198.8

 
$
104.6

 
$
120.8

 
$
689.5

Measurement Period Adjustments(b)
—

 


 
12.3

 


 
12.3

Foreign currency translation adjustment
—

 
1.5

 


 


 
1.5

Goodwill impairment charge(a)


 
(10.8
)
 


 


 
(10.8
)
Balance at December 31, 2017(a)
$
265.3

 
$
189.5

 
$
116.9

 
$
120.8

 
$
692.5

Foreign currency translation adjustment
(0.3
)
 
(0.3
)
 
—

 
—

 
(0.6
)
Goodwill impairment charge
—

 
(18.0
)
 
—

 
—

 
(18.0
)
Balance at December 31, 2018
$
265.0

 
$
171.2

 
$
116.9

 
$
120.8

 
$
673.9

 
 
 
 
 
 
 
 
 
 
Cumulative goodwill impairment charges(c)


 


 


 


 
$
(55.2
)
(a) Prior period amounts have been restated to reflect the current period's segment presentation.
(b) Measurement Period Adjustments related to the 2016 Elizabeth Arden Acquisition.
(c) Amount refers to cumulative goodwill impairment charges related to impairments recognized in 2015, 2017 and 2018.

Annual impairment testing
For 2018, in assessing whether goodwill was impaired in connection with its annual impairment testing performed during the fourth quarter of 2018 using October 1st, 2018 carrying values, the Company performed qualitative assessments to determine whether it would be necessary to perform the two-step process, as prescribed by ASC 350, to assess the Company's indefinite-lived intangible assets for indicators of impairment. In performing the qualitative assessments, the Company considered the results of the step one test performed in conjunction with the reassignment of goodwill and relative fair value allocation approach in the first quarter of 2018 and the financial performance of these five reporting units: (i) Revlon; (ii) Elizabeth Arden Skin and Color; (iii) Elizabeth Arden Fragrances; (iv) Professional Portfolio; and (v) Fragrances. Based upon such assessment, the Company determined that it was more likely than not that the fair values of each of these reporting units exceeded their respective carrying amounts for 2018.

For 2018, the Company used the simplified approach allowed under ASU No. 2017-04 to test its Mass Portfolio reporting unit within the Portfolio segment for impairment. Accordingly, the Company first performed a qualitative assessment indicating that indicators of impairment existed for the Mass Portfolio reporting unit. Following the results of such assessment and the adoption of ASU No. 2017-04 as of October 1, 2018, the Company recorded as an impairment the amount by which the carrying value of the Mass Portfolio reporting unit exceeded its fair value. The Company calculated the fair value of the Mass Portfolio reporting unit using discounted estimated future cash flows. The weighted-average cost of capital used in testing the Mass Portfolio reporting unit for impairment was 10%, with a perpetual growth rate of 2%. As a result of this annual impairment testing, the Company recognized an $18.0 million non-cash goodwill impairment charge related to the Mass Portfolio reporting unit within the Portfolio segment in the fourth quarter of 2018. Following the recognition of this non-cash goodwill impairment charge, the Mass Portfolio reporting unit had $54.3 million in remaining goodwill as of December 31, 2018.

For 2017, in assessing whether goodwill was impaired in connection with its annual impairment testing performed during the fourth quarter of 2017 using October 1st, 2017 carrying values, the Company performed qualitative assessments to determine whether it would be necessary to perform the two-step process, to assess the Company's indefinite-lived intangible assets for indicators of impairment. In performing the qualitative assessments, the Company considered the results of the step one test performed in 2016 and the financial performance of the then-current (i) Revlon, Almay and Other; (ii) Elizabeth Arden; and (iii) Professional reporting units. Based upon such assessment, the Company determined that it was more likely than not that the fair values of these reporting units exceeded their carrying amounts for 2017. For 2017, the Company determined that it would utilize the two-step process to test the Global Color Brands ("GCB") reporting unit for impairment. The first step of this test indicated that impairment indicators existed for the GCB reporting unit due to continued net sales declines for both of the reporting unit's brands, namely SinfulColors and Pure Ice, and lower promotional activity for the Pure Ice brand. As a result of the annual impairment testing for 2017, the Company recognized a $10.8 million non-cash goodwill impairment charge related to the GCB reporting unit in the fourth quarter of 2017.

Intangible Assets, Net

The following tables present details of the Company's total intangible assets as of December 31, 2018 and 2017:
 
December 31, 2018
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Weighted-Average Useful Life (in Years)
Finite-lived intangible assets:
 
 
 
 
 
 
 
Trademarks and licenses
$
272.3

 
$
(94.3
)
 
$
178.0

 
13
Customer relationships
248.6

 
(77.9
)
 
170.7

 
12
Patents and internally-developed intellectual property
20.9

 
(10.1
)
 
10.8

 
6
Distribution rights
31.0

 
(4.0
)
 
27.0

 
16
Other
1.3

 
(1.0
)
 
0.3

 
1
Total finite-lived intangible assets
$
574.1

 
$
(187.3
)
 
$
386.8

 
 
 
 
 
 
 
 
 
 
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
Trade names
$
145.2

 
N/A

 
$
145.2

 
 
Total indefinite-lived intangible assets
$
145.2

 
N/A

 
$
145.2

 
 
 
 
 
 
 
 
 
 
Total intangible assets
$
719.3

 
$
(187.3
)
 
$
532.0

 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Weighted-Average Useful Life (in Years)
Finite-lived intangible assets:
 
 
 
 
 
 
 
Trademarks and licenses
$
271.4

 
$
(72.8
)
 
$
198.6

 
13
Customer relationships
250.6

 
(46.8
)
 
203.8

 
13
Patents and internally-developed intellectual property
20.8

 
(8.4
)
 
12.4

 
7
Distribution rights
31.0

 
(2.3
)
 
28.7

 
17
Other
1.3

 
(0.6
)
 
0.7

 
2
Total finite-lived intangible assets
$
575.1

 
$
(130.9
)
 
$
444.2

 
 
 
 
 
 
 
 
 
 
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
Trade names
$
147.9

 
N/A

 
$
147.9

 
 
Total indefinite-lived intangible assets
$
147.9

 
N/A

 
$
147.9

 
 
 
 
 
 
 
 
 
 
Total intangible assets
$
723.0

 
$
(130.9
)
 
$
592.1

 
 


Amortization expense for finite-lived intangible assets was $57.1 million and $43.2 million for the year ended December 31, 2018 and 2017, respectively, with the increase primarily attributable to the accelerated amortization of the Pure Ice intangible assets as a result of the revision of the brand’s intangible assets useful lives following the termination of a business relationship with its principal customer.
In accordance with ASC 360, and in conjunction with the 2018 annual impairment testing, the Company reviewed finite-lived intangible assets for impairment. In performing such review, the Company makes judgments about the recoverability of purchased finite lived intangible assets whenever events or changes in circumstances indicate that an impairment may exist. The Company also considers several indicators of impairment, including, among others, the following: (i) a significant adverse change in the extent or manner in which a long-lived asset (or asset group) is being used; (ii) a projection or forecast that demonstrates losses associated with the use of a long-lived asset (or asset group); and (iii) whether there exists a current expectation that, more likely than not, a long-lived asset (or asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company recognizes an impairment if the carrying amount of the long-lived asset group exceeds the Company's estimate of the asset group's undiscounted future cash flows. For the year ended December 31, 2018 and 2017, the Company did not recognize any impairment charges related to the carrying value of any of the Company's identifiable intangible assets as a result of the annual impairment testing.
The Company did not recognize any impairment charges related to the carrying value of any of the Company's identifiable intangible assets as a result of the annual impairment testing for the year ended December 31, 2017.

The following table reflects the estimated future amortization expense for each period presented, a portion of which is subject to exchange rate fluctuations, for the Company's finite-lived intangible assets as of December 31, 2018:
 
Estimated Amortization Expense
2019
$
41.3

2020
34.1

2021
33.1

2022
32.2

2023
30.7

Thereafter
215.4

Total
$
386.8