EXHIBIT 10.86



|                                                                                          |  |              |         |  |              |   |         |              |  |   |         | 
|----------------------------------------------------------------------------------------- |  | ------------ | ------- |  | ------------ | - | ------- | ------------ |  | - | ------- | 
|                                                                                          |  | (Unaudited)  |        
|                                                                                          |  | Year ended   |        
|(in thousands)                                                                            |  | Dec. 31,2012 |         |  | Dec. 31,2011 |   |         | Dec. 31,2010 | 
|EBITDA(1)                                                                                 |  | $            | 216,963 |  |              | $ | 229,558 |              |  | $ | 209,567 | 
|                                                                                          |  |              |         |  |              |   |         |              |  |   |         | 
|                                                                                          |  |              |        
|Reconciliation of EBITDA:                                                                 |  |              |         |  |              |   |         |              |  |   |         | 
|Net Income                                                                                |  |              | 109,408 |  |              |   | 126,105 |              |  |   | 98,847  | 
|Add: Income taxes                                                                         |  |              | 58,963  |  |              |   | 71,286  |              |  |   | 52,409  | 
|Add: Interest expense and other, net, the Ed Hardy gain and loss on marketable securities |  |              | 41,826  |  |              |   | 24,194  |              |  |   | 49,552  | 
|                                                                                          |  |              |        
|Add: Depreciation and amortization of certain intangibles                                 |  |              | 6,766   |  |              |   | 7,973   |              |  |   | 8,759   | 
|                                                                                          |  |              |         |  |              |   |         |              |  |   |         | 
|                                                                                          |  |              |        
|EBITDA                                                                                    |  | $            | 216,963 |  |              | $ | 229,558 |              |  | $ | 209,567 | 
|                                                                                          |  |              |         |  |              |   |         |              |  |   |         | 



|(1) | EBITDA, a non-GAAP financial measure, represents net income before income taxes, interest, other non-operating gains and losses, depreciation and amortization expenses.
The Company believes EBITDA provides additional information for determining its ability to meet future debt service requirements, investing and capital expenditures.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                                                                                                                                                                                                                                                                                             |  |              |         |   |              |   |         |              |  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ | ------- | - | ------------ | - | ------- | ------------ |  | - | ------- | -
|                                                                                                                                                                                                                                                                                                                                                             |  | (Unaudited)  |        
|                                                                                                                                                                                                                                                                                                                                                             |  | Year ended   |        
|(in thousands)                                                                                                                                                                                                                                                                                                                                               |  | Dec. 31,2012 |         |   | Dec. 31,2011 |   |         | Dec. 31,2010 | 
|Free Cash Flow(2)                                                                                                                                                                                                                                                                                                                                            |  | $            | 180,485 |   |              | $ | 179,213 |              |  | $ | 166,571 |  
|                                                                                                                                                                                                                                                                                                                                                             |  |              |         |   |              |   |         |              |  |   |         |  
|                                                                                                                                                                                                                                                                                                                                                             |  |              |        
|Reconciliation of Free Cash Flow:                                                                                                                                                                                                                                                                                                                            |  |              |         |   |              |   |         |              |  |   |         |  
|Net Income                                                                                                                                                                                                                                                                                                                                                   |  |              | 109,408 |   |              |   | 126,105 |              |  |   | 98,847  |  
|                                                                                                                                                                                                                                                                                                                                                             |  |              |        
|Add: Non-cash income taxes, non-cash interest related to convertible debt, depreciation, amortization of certain intangibles and
finance fees, non-cash compensation expense, bad debt expense, net equity earnings from certain joint ventures, non-cash gain/loss from sale of trademarks, re-measurement of investments and loss on marketable securities |  |              | 72,675  |   |              |   | 56,350  |              |  |   | 70,914  |  
|                                                                                                                                                                                                                                                                                                                                                             |  |              |        
|Less: Capital expenditures                                                                                                                                                                                                                                                                                                                                   |  |              | (1,598  | ) |              |   | (3,242  | )            |  |   | (3,190  | )
|                                                                                                                                                                                                                                                                                                                                                             |  |              |         |   |              |   |         |              |  |   |         |  
|                                                                                                                                                                                                                                                                                                                                                             |  |              |        
|Free Cash Flow                                                                                                                                                                                                                                                                                                                                               |  | $            | 180,485 |   |              | $ | 179,213 |              |  | $ | 166,571 |  
|                                                                                                                                                                                                                                                                                                                                                             |  |              |         |   |              |   |         |              |  |   |         |  



|(2) | Free Cash Flow, a non-GAAP financial measure, represents net income before depreciation, amortization, non-cash compensation expense, bad debt expense, net equity
earnings from certain joint ventures, non-cash income taxes, non-cash interest related to convertible debt, non-cash non-recurring gains and charges, less capital expenditures. The Free Cash Flow also excludes any changes in Balance Sheet items. The
Company believes Free Cash Flow is useful in evaluating its financial condition because it is representative of cash flow from operations that is available for repaying debt, investing and capital expenditures.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------