I have been doing some work on Wabtec. They have done about 34 acquisitions since 2005. This has added around 800mm in goodwill. The interesting thing is parts of the goodwill are allocated to “deductible goodwill”.
Not sure what number question we are on so I will use letters.
A. Has anyone seen or heard of deductible goodwill? I have not seen this amortized or deducted on the WAB 10-k. So far investor relations says “some goodwill is amortized’. Not sure if that is true.
B. How about adjusting goodwill for currency fluctuations. Is this normal? The past two years they have lowered goodwill value by $80mm due to currency fluctuations.
from 10-k
On February 4, 2015, the Company acquired Railroad Controls L.P. (“RCL”), a U.S. based provider of railway signal construction services for a purchase price of approximately $78.0 million, net of cash acquired, resulting in preliminary goodwill of $14.9 million, all of which will be deductible for tax purposes.
and
Goodwill
Freight Transit Total Goodwill
previous year (2014) 515,067 347,217 862,284
Adjustment to purchase (1,210) (4,056) (5,266)
Acquisitions Goodwill 28,964 12,140 41,104
Impairment -
foreign currency impact (10,856) (28,788) (39,644)
year end (2015) 531,965 326,513 858,478