WATSCO INC Goodwill & Intangibles Disclosure
13. GOODWILL AND INTANGIBLE ASSETS
The changes in the carrying amount of goodwill were as follows:
Balance at December 31, 2023 |
|
$ |
457,148 |
|
Acquired goodwill |
|
|
2,469 |
|
Adjustment to goodwill related to 2023 acquisition |
|
|
(12 |
) |
Foreign currency translation adjustment |
|
|
(7,747 |
) |
Balance at December 31, 2024 |
|
|
451,858 |
|
Acquired goodwill |
|
|
7,554 |
|
Foreign currency translation adjustment |
|
|
3,097 |
|
Balance at December 31, 2025 |
|
$ |
462,509 |
|
Intangible assets are comprised of the following:
December 31, |
|
Estimated |
|
2025 |
|
|
2024 |
|
||
Indefinite lived intangible assets - trade names, |
|
|
|
$ |
171,950 |
|
|
$ |
165,910 |
|
Finite lived intangible assets: |
|
|
|
|
|
|
|
|
||
Customer relationships |
|
15-18 |
|
|
109,898 |
|
|
|
107,149 |
|
Patented and unpatented technology |
|
7 |
|
|
1,628 |
|
|
|
1,517 |
|
Trade name |
|
10 |
|
|
4,293 |
|
|
|
4,293 |
|
Accumulated amortization |
|
|
|
|
(77,342 |
) |
|
|
(70,397 |
) |
Finite lived intangible assets, net |
|
|
|
|
38,477 |
|
|
|
42,562 |
|
|
|
|
|
$ |
210,427 |
|
|
$ |
208,472 |
|
Amortization expense related to finite lived intangible assets included in selling, general and administrative expenses for the years ended December 31, 2025, 2024, and 2023, were $5,345, $5,431, and $4,323, respectively.
Based on the finite lived intangible assets recorded at December 31, 2025, annual amortization for the next five years is expected to approximate the following:
2026 |
|
$ |
5,300 |
|
2027 |
|
$ |
3,500 |
|
2028 |
|
$ |
2,600 |
|
2029 |
|
$ |
2,600 |
|
2030 |
|
$ |
2,600 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 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.