GREENBRIER COMPANIES INC Goodwill & Intangibles Disclosure
Note 7 — Goodwill
Changes in the carrying value of goodwill are as follows:
|
(In thousands) |
|
Manufacturing |
|
|
Wheels, Repair & Parts |
|
|
Leasing & Services |
|
|
Total |
|
||||
|
Balance August 31, 2020 |
|
$ |
87,043 |
|
|
$ |
43,265 |
|
|
$ |
— |
|
|
$ |
130,308 |
|
|
Translation and other adjustments |
|
|
1,802 |
|
|
|
— |
|
|
|
— |
|
|
|
1,802 |
|
|
Balance August 31, 2021 |
|
$ |
88,845 |
|
|
$ |
43,265 |
|
|
$ |
— |
|
|
$ |
132,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
Goodwill |
|
|
|
Gross goodwill balance before accumulated goodwill impairment losses and other reductions |
|
$ |
294,660 |
|
|
Accumulated goodwill impairment losses |
|
|
(138,234 |
) |
|
Accumulated other reductions |
|
|
(24,316 |
) |
|
Balance August 31, 2021 |
|
$ |
132,110 |
|
|
|
|
|
|
|
The Company performed its annual goodwill impairment test during the third quarter. For the annual impairment test during the third quarter of 2021, the Company utilized the qualitative assessment allowable under ASC 350 Intangibles – Goodwill and Other to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. This qualitative assessment may include, but is not limited to, reviewing factors such as macroeconomic considerations, industry and market trends, cost factors, entity-specific financial performance and other events, such as changes in the Company’s management, strategy and primary user base. If based on a review of qualitative factors, it is more likely than not that the fair value of a reporting unit is less than its carrying value, a quantitative impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. Based on our review of the qualitative factors, the Company determined for all three of our reporting unit goodwill balances, that a quantitative impairment analysis was not necessary, primarily as a result of positive macroeconomic trends and market indicators during the assessment period.
As of August 31, 2021, our Manufacturing segment includes the North America Manufacturing reporting unit with a goodwill balance of $56.7 million and the Europe Manufacturing reporting unit with a goodwill balance of $32.1 million.
Based on the results of the Company’s annual impairment test, we concluded that goodwill was not impaired.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2021 | Oct 26, 2021 | Showing above |
| 2020 | Oct 28, 2020 | |
| 2019 | Oct 29, 2019 | |
| 2018 | Oct 26, 2018 | |
| 2017 | Oct 27, 2017 | |
| 2016 | Oct 25, 2016 | |
| 2015 | Oct 30, 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.