FEDERAL SIGNAL CORP /DE/FSS

FEDERAL SIGNAL CORP /DE/ Goodwill & Intangibles Disclosure

10-KFiled Feb 27, 20242 min read
GOODWILL AND OTHER INTANGIBLE ASSETS
The following table summarizes the carrying amount of goodwill and changes in the carrying amount of goodwill, by segment:
(in millions of dollars)Environmental
Solutions		Safety & Security
Systems		Total
Balance at December 31, 2021$320.2 $112.0 $432.2 
Acquisitions, including measurement period adjustments24.0 — 24.0 
Translation adjustments(0.4)(2.4)(2.8)
Balance at December 31, 2022343.8 109.6 453.4 
Acquisitions, including measurement period adjustments17.8 — 17.8 
Translation adjustments0.3 1.2 1.5 
Balance at December 31, 2023$361.9 $110.8 $472.7 
The following table summarizes the gross carrying amount and accumulated amortization of intangible assets for each major class of intangible assets:
 20232022
(in millions of dollars)Gross Carrying ValueAccumulated AmortizationNet Carrying ValueGross Carrying ValueAccumulated AmortizationNet Carrying Value
Definite-lived intangible assets:
Customer relationships (a)
$161.6 $(66.3)$95.3 $153.7 $(52.0)$101.7 
Other (a)
8.1 (4.4)3.7 5.7 (3.4)2.3 
Total definite-lived intangible assets169.7 (70.7)99.0 159.4 (55.4)104.0 
Indefinite-lived intangible assets:
Trade names104.2 — 104.2 99.9 — 99.9 
Other4.3 — 4.3 4.3 — 4.3 
Total indefinite-lived intangible assets108.5 — 108.5 104.2 — 104.2 
Total intangible assets$278.2 $(70.7)$207.5 $263.6 $(55.4)$208.2 
(a)    Average useful life of customer relationships and other definite-lived intangible assets are estimated to be approximately 11 years and 6 years, respectively. The average useful life across all definite-lived intangible assets is estimated to be approximately 11 years.
The Company currently estimates that aggregate amortization expense will be approximately $15.4 million in 2024, $15.4 million in 2025, $15.3 million in 2026, $14.4 million in 2027, $13.7 million in 2028 and $24.8 million thereafter. Actual amounts of amortization may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency rates, measurement period adjustments for recent acquisitions, impairment of intangible assets and other events.

Historical Timeline

Fiscal YearFiled
2023Feb 27, 2024Showing above
2022Mar 1, 2023
2021Mar 1, 2022
2020Feb 25, 2021
2019Feb 27, 2020
2018Feb 28, 2019
2017Feb 28, 2018
2016Feb 28, 2017
2015Feb 29, 2016

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.

Other Available Disclosures

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