MCGRATH RENTCORP Goodwill & Intangibles Disclosure
NOTE 14. GOODWILL AND INTANGIBLE ASSETS
There were no changes in the carrying amount of goodwill during the year ended December 31, 2024. Changes in the carrying amount of goodwill during 2025 were as follows:
(dollar amounts in thousands) |
|
Mobile Modular |
|
|
Portable Storage |
|
|
Enviroplex |
|
|
Total |
|
||||
Balance at December 31, 2024 |
|
$ |
315,290 |
|
|
$ |
6,136 |
|
|
$ |
1,798 |
|
|
$ |
323,224 |
|
Goodwill acquired through business combinations |
|
|
4,284 |
|
|
|
5,076 |
|
|
|
— |
|
|
|
9,360 |
|
Balance at December 31, 2025 |
|
$ |
319,574 |
|
|
$ |
11,212 |
|
|
$ |
1,798 |
|
|
$ |
332,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Intangible assets from continuing operations consisted of the following:
(dollar amounts in thousands) |
|
Estimated |
|
Average remaining life in years |
|
Cost |
|
Accumulated amortization |
|
Net book value |
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
Customer relationships |
|
6 to 11 |
|
6.1 |
|
$75,734 |
|
$(33,243) |
|
$42,491 |
Non-compete agreements |
|
5 |
|
2.1 |
|
10,806 |
|
(7,351) |
|
3,455 |
Trade name |
|
0.75 to 8 |
|
3.3 |
|
2,000 |
|
(1,512) |
|
488 |
Total amortizing |
|
|
|
|
|
88,540 |
|
(42,106) |
|
46,434 |
Trade name - non-amortizing |
|
Indefinite |
|
|
|
171 |
|
— |
|
171 |
Total |
|
|
|
|
|
$88,711 |
|
$(42,106) |
|
$46,605 |
|
|
|
|
|
|
|
|
|
|
|
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
Customer relationships |
|
8 to 11 |
|
6.9 |
|
$73,217 |
|
$(25,010) |
|
$48,207 |
Non-compete agreements |
|
5 |
|
2.8 |
|
10,556 |
|
(5,239) |
|
5,317 |
Trade name |
|
0.75 to 8 |
|
4.3 |
|
2,000 |
|
(1,363) |
|
637 |
Total amortizing |
|
|
|
|
|
85,773 |
|
(31,612) |
|
54,161 |
Trade name - non-amortizing |
|
Indefinite |
|
|
|
171 |
|
— |
|
171 |
Total |
|
|
|
|
|
$85,944 |
|
$(31,612) |
|
$54,332 |
|
|
|
|
|
|
|
|
|
|
|
Intangible assets with finite useful lives are amortized over their respective useful lives. Amortization expense in the years ended December 31, 2025, 2024 and 2023 was $10.5 million, $10.3 million and $10.7 million, respectively. Based on the carrying values at December 31, 2025 and assuming no subsequent impairment of the underlying assets, the annual amortization is expected to be $10.2 million in 2026, $10.0 million in 2027, $8.6 million in 2028, $5.1 million in 2029, $3.3 million in 2030 and $9.2 million for the years thereafter.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 25, 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.