JELD-WEN Holding, Inc.JELD
JELD-WEN Holding, Inc. Goodwill & Intangibles Disclosure
Goodwill
The following table summarizes the changes in goodwill by reportable segment:
| (amounts in thousands) | North America | Europe | Total Reportable Segments | ||||||||||||||
Gross carrying amount at December 31, 2022 | $ | 182,269 | $ | 258,345 | $ | 440,614 | |||||||||||
| Currency translation | 143 | 10,167 | 10,310 | ||||||||||||||
Gross carrying amount at December 31, 2023 | 182,412 | 268,512 | 450,924 | ||||||||||||||
| Sale of business | (900) | — | (900) | ||||||||||||||
| Currency translation | (487) | (17,876) | (18,363) | ||||||||||||||
Gross carrying amount at December 31, 2024 | $ | 181,025 | $ | 250,636 | $ | 431,661 | |||||||||||
Accumulated impairment losses at December 31, 2022 | $ | — | $ | (58,661) | $ | (58,661) | |||||||||||
| Currency translation | — | (2,093) | (2,093) | ||||||||||||||
Accumulated impairment losses at December 31, 2023 | — | (60,754) | (60,754) | ||||||||||||||
Impairment(1) | — | (63,445) | (63,445) | ||||||||||||||
| Currency translation | — | 7,705 | 7,705 | ||||||||||||||
Accumulated impairment losses at December 31, 2024 | $ | — | $ | (116,494) | $ | (116,494) | |||||||||||
Balance, net of impairment at December 31, 2024 | $ | 181,025 | $ | 134,142 | $ | 315,167 | |||||||||||
(1)During the fourth quarter of 2024, we recognized a $31.4 million impairment charge related to the court-ordered divestiture of Towanda. As of December 31, 2024, 2023 and 2022, the assets and liabilities of Towanda qualify as held for sale and are not included in the above reportable segments amount. Refer to Note 20 - Held for Sale for more information.
During the third quarter of 2022, management identified various qualitative and quantitative factors which collectively indicated a triggering event had occurred within our North America and Europe reporting units. These factors included the macroeconomic environment in each region including increasing interest rates, persistent inflation, and operational inefficiencies attributable to ongoing global supply chain disruptions, the continuing geopolitical environment in Europe associated with the conflict between Russia and Ukraine, and foreign exchange fluctuations. These factors have negatively impacted our business performance. Based upon the results of our interim impairment analysis, we concluded that the carrying value of our Europe reporting unit exceeded its fair value, and we recorded a goodwill impairment charge of $54.9 million, for the year ended December 31, 2022, representing a partial impairment of goodwill assigned to the Europe reporting unit. In addition, we determined our North America reporting unit was not impaired.
As previously disclosed, following our 2023 annual impairment test for our Europe reporting unit, we concluded that while no impairment existed, the fair value of our reporting unit exceeded its carrying value by approximately 3%. During the third quarter of 2024, the Company updated its financial forecast for the Europe reportable segment to reflect anticipated macroeconomic conditions of prolonged elevated interest rates leading to reduced revenue growth expectations. The end of the third fiscal quarter also marks the conclusion of our generally heavier seasonal sales period and our European net sales were negatively impacted by weaker market demand. Accordingly, the Company determined that a triggering event occurred requiring an interim goodwill impairment test for its European reporting unit as of September 28, 2024. Based upon the results of our interim impairment assessment, we concluded the carrying value of our Europe reporting unit exceeded its fair value, and we recorded a goodwill impairment charge of $63.4 million, representing a partial impairment of goodwill assigned to the Europe reporting unit. Following this partial impairment, the reporting unit’s carrying amount equaled the fair value.
We performed our annual impairment assessments during the fourth quarter. The Company elected to perform a qualitative analysis as of the fourth quarter for the Europe reporting unit. Our analysis did not determine that it was more likely than not that the carrying value of the Europe reporting unit exceeded the fair value. During the fourth quarter, we quantitatively determined that the fair value of our North America reporting unit exceeded its net carrying amount and no goodwill impairment existed. We determined that the fair value of our North America reporting unit would have to decline by less than 10% to be considered impaired.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Feb 20, 2025 | Showing above |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 6, 2018 | |
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.