Sunbelt Rentals Holdings, Inc.SUNB

Sunbelt Rentals Holdings, Inc. Goodwill & Intangibles Disclosure

10-KFiled Jun 23, 20263 min read
Goodwill and Other Intangible Assets
The following table presents the changes in the carrying amount of goodwill for each of the two years in the period ended April 30, 2026:
North America
(In millions)
General Tool
Specialty
United Kingdom
Total
Year ended May 1, 2024
$1,981 $1,044 $255 $3,280 
Goodwill related to acquisitions
46 
1 
6 
53 
Foreign currency translation
(2)
(1)
18 
15 
Balance at April 30, 2025
2,025 1,044 279 3,348 
Goodwill related to acquisitions
57 
65 
— 
122 
Goodwill written off related to sale of business unit
— 
— 
(6)
(6)
Foreign currency translation
4 
4 
4 
12 
Balance at April 30, 2026
$2,086 $1,113 $277 $3,476 
As part of the Company's annual goodwill impairment assessment completed, the Company evaluated the recoverability of goodwill for each of its reporting units. The fair value of each reporting unit was estimated using an income approach based on the present value of projected future cash flows. The terminal value utilized within the discounted cash flow model incorporated market-based assumptions, including terminal value multiples derived from comparable companies and market transactions.
There were no indicators of goodwill impairment during the fiscal years ended April 30, 2025 and 2024. During the fiscal year ended April 30, 2026, an impairment indicator was identified in the U.K. reporting unit as a result of the operational restructure of the United Kingdom segment. Accordingly, management undertook an interim quantitative goodwill impairment test for the U.K. reporting unit as of October 31, 2025, followed by an annual test as of March 31, 2026. No impairment was recognized as a result of these tests, but the fair value of the United Kingdom reporting unit was not substantially in excess of its carrying value and hence is sensitive to changes in key assumptions, including the discount rate, terminal value, projected revenue growth, EBITDA margin, and capital expenditure requirements. Future modest adverse changes in actual or forecasted operating results, market multiples, discount rates, capital expenditure requirements, or other market participant assumptions could result in the fair value of the U.K. reporting unit declining below its carrying value and could require the Company to recognize a goodwill impairment charge in a future period.
While we believe that our discounted cash flows are based upon reasonable and appropriate assumptions, which are weighted for their likely probability of occurrence, about our underlying business activities, many of the factors used in assessing the fair value are outside of the control of management. Accordingly, the underlying assumptions and estimates may change in the future, which could materially affect the estimate of the fair value of a reporting unit and, thus, the likelihood and amount of potential impairment.
Other intangible assets were comprised of the following:
April 30, 2026
(In millions)Gross Carrying AmountAccumulated AmortizationNet Amount
Customer lists$1,198 $(885)$313 
Contract related125 (119)6 
Internal use software110 (91)19 
Brand names30 (30)— 
Total$1,463 $(1,125)$338 
April 30, 2025
(In millions)Gross Carrying AmountAccumulated AmortizationNet Amount
Customer lists$1,161 $(772)$389 
Contract related124 (115)9 
Internal use software104 (69)35 
Brand names30 (30)— 
Total$1,419 $(986)$433 
Amortization expense on other intangible assets was $135 million, $135 million and $136 million for the years ended April 30, 2026, 2025 and 2024, respectively.
As of April 30, 2026, estimated amortization expense for other intangible assets for each of the next five years and thereafter was as follows:
Year-ending April 30,Total
(in millions)
2027
$
109 
2028
64 
2029
46 
2030
38 
2031
30 
Thereafter
51 
Total$338 
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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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