AUTOZONE INC Goodwill & Intangibles Disclosure
Note N – Goodwill and Intangibles
The Company had approximately $302.6 million of goodwill, which is allocated to the Auto Parts Locations operating segment at August 29, 2020 and August 31, 2019. The Company performs its annual goodwill and intangibles impairment test in the fourth quarter of each fiscal year. In the fourth quarter of fiscal 2020 and 2019, the Company concluded its remaining goodwill was not impaired.
The carrying amounts of intangible assets are included in Other long-term assets as follows:
August 29, 2020 | |||||||||||
| Estimated |
| Gross |
|
| Net | |||||
Useful | Carrying | Accumulated | Carrying | ||||||||
(in thousands) | Life | Amount | Amortization | Amount | |||||||
Amortizing intangible assets: |
|
|
|
|
|
|
|
| |||
Customer relationships |
| -10 years |
| 29,376 |
| (27,933) |
| 1,443 | |||
Total intangible assets other than goodwill | $ | 29,376 | $ | (27,933) | $ | 1,443 | |||||
August 31, 2019 | |||||||||||
| Estimated |
| Gross |
|
| Net | |||||
Useful | Carrying | Accumulated | Carrying | ||||||||
(in thousands) | Life | Amount | Amortization | Amount | |||||||
Amortizing intangible assets: |
|
|
|
|
|
|
|
| |||
Technology |
| -5 years | $ | 870 | $ | (870) | $ | — | |||
Customer relationships |
| -10 years |
| 29,376 |
| (23,760) |
| 5,616 | |||
Total intangible assets other than goodwill | $ | 30,246 | $ | (24,630) | $ | 5,616 | |||||
Amortization expense of intangible assets for the years ended August 29, 2020 and August 31, 2019 was $4.2 million, respectively.
Total future amortization expense for intangible assets that have finite lives, based on the existing intangible assets and their current estimated useful lives as of August 29, 2020, is estimated to be $1.4 million for fiscal 2021 and none thereafter.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2020 | Oct 26, 2020 | Showing above |
| 2019 | Oct 28, 2019 | |
| 2018 | Oct 24, 2018 | |
| 2017 | Oct 25, 2017 | |
| 2016 | Oct 24, 2016 | |
| 2015 | Oct 26, 2015 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.