Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Generac Holdings Inc., balance sheet: goodwill and intangible assets

US$ in thousands

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Goodwill	1,409,674)	855,228)	805,284)	764,655)	721,523)
Tradenames	162,563)	58,729)	56,669)	56,378)	52,784)
Customer lists	573,910)	370,736)	369,932)	368,343)	340,138)
Patents and technology	662,341)	233,271)	213,972)	144,199)	144,306)
Software	1,046)	1,046)	1,046)	1,046)	1,046)
Non-compete/other	79,416)	16,469)	12,063)	3,829)	2,684)
Finite-lived intangible assets, gross	1,479,276)	680,251)	653,682)	573,795)	540,958)
Accumulated amortization	(566,435)	(516,549)	(484,269)	(455,626)	(433,514)
Finite-lived intangible assets, net book value	912,841)	163,702)	169,413)	118,169)	107,444)
Indefinite-lived tradenames	128,321)	128,321)	128,321)	128,321)	128,321)
Intangible assets	1,041,162)	292,023)	297,734)	246,490)	235,765)
Goodwill and intangible assets	2,450,836)	1,147,251)	1,103,018)	1,011,145)	957,288)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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Item	Description	The company
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Generac Holdings Inc. goodwill increased from 2019 to 2020 and from 2020 to 2021.
Intangible assets	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Generac Holdings Inc. intangible assets decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
Goodwill and intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Generac Holdings Inc. goodwill and intangible assets increased from 2019 to 2020 and from 2020 to 2021.

Generac Holdings Inc., adjustments to financial statements

US$ in thousands

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported)	4,877,780)	3,235,423)	2,665,669)	2,426,314)	2,019,964)
Less: Goodwill	1,409,674)	855,228)	805,284)	764,655)	721,523)
Total assets (adjusted)	3,468,106)	2,380,195)	1,860,385)	1,661,659)	1,298,441)
Adjustment to Stockholders’ Equity Attributable To Generac Holdings Inc.
Stockholders’ equity attributable to Generac Holdings Inc. (as reported)	2,213,774)	1,390,293)	1,032,382)	760,549)	559,552)
Less: Goodwill	1,409,674)	855,228)	805,284)	764,655)	721,523)
Stockholders’ equity attributable to Generac Holdings Inc. (adjusted)	804,100)	535,065)	227,098)	(4,106)	(161,971)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Generac Holdings Inc., Financial Data: Reported vs. Adjusted

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Generac Holdings Inc., adjusted financial ratios

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Total Asset Turnover
Reported total asset turnover	0.77	0.77	0.83	0.83	0.83
Adjusted total asset turnover	1.08	1.04	1.18	1.22	1.29
Financial Leverage
Reported financial leverage	2.20	2.33	2.58	3.19	3.61
Adjusted financial leverage	4.31	4.45	8.19	—	—
Return on Equity (ROE)
Reported ROE	24.87%	25.22%	24.41%	31.33%	28.48%
Adjusted ROE	68.46%	65.52%	110.97%	—	—
Return on Assets (ROA)
Reported ROA	11.29%	10.84%	9.45%	9.82%	7.89%
Adjusted ROA	15.87%	14.73%	13.55%	14.34%	12.28%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Generac Holdings Inc. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Generac Holdings Inc. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Generac Holdings Inc. adjusted ROE deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Generac Holdings Inc. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.

Generac Holdings Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net sales	3,737,184)	2,485,200)	2,204,336)	2,023,464)	1,672,445)
Total assets	4,877,780)	3,235,423)	2,665,669)	2,426,314)	2,019,964)
Activity Ratio
Total asset turnover¹	0.77	0.77	0.83	0.83	0.83
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net sales	3,737,184)	2,485,200)	2,204,336)	2,023,464)	1,672,445)
Adjusted total assets	3,468,106)	2,380,195)	1,860,385)	1,661,659)	1,298,441)
Activity Ratio
Adjusted total asset turnover²	1.08	1.04	1.18	1.22	1.29

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 3,737,184 ÷ 4,877,780 = 0.77

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 3,737,184 ÷ 3,468,106 = 1.08

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Generac Holdings Inc. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Total assets	4,877,780)	3,235,423)	2,665,669)	2,426,314)	2,019,964)
Stockholders’ equity attributable to Generac Holdings Inc.	2,213,774)	1,390,293)	1,032,382)	760,549)	559,552)
Solvency Ratio
Financial leverage¹	2.20	2.33	2.58	3.19	3.61
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets	3,468,106)	2,380,195)	1,860,385)	1,661,659)	1,298,441)
Adjusted stockholders’ equity attributable to Generac Holdings Inc.	804,100)	535,065)	227,098)	(4,106)	(161,971)
Solvency Ratio
Adjusted financial leverage²	4.31	4.45	8.19	—	—

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity attributable to Generac Holdings Inc.
= 4,877,780 ÷ 2,213,774 = 2.20

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity attributable to Generac Holdings Inc.
= 3,468,106 ÷ 804,100 = 4.31

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Generac Holdings Inc. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to Generac Holdings Inc.	550,494)	350,576)	252,007)	238,257)	159,386)
Stockholders’ equity attributable to Generac Holdings Inc.	2,213,774)	1,390,293)	1,032,382)	760,549)	559,552)
Profitability Ratio
ROE¹	24.87%	25.22%	24.41%	31.33%	28.48%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income attributable to Generac Holdings Inc.	550,494)	350,576)	252,007)	238,257)	159,386)
Adjusted stockholders’ equity attributable to Generac Holdings Inc.	804,100)	535,065)	227,098)	(4,106)	(161,971)
Profitability Ratio
Adjusted ROE²	68.46%	65.52%	110.97%	—	—

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROE = 100 × Net income attributable to Generac Holdings Inc. ÷ Stockholders’ equity attributable to Generac Holdings Inc.
= 100 × 550,494 ÷ 2,213,774 = 24.87%

² Adjusted ROE = 100 × Net income attributable to Generac Holdings Inc. ÷ Adjusted stockholders’ equity attributable to Generac Holdings Inc.
= 100 × 550,494 ÷ 804,100 = 68.46%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Generac Holdings Inc. adjusted ROE deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to Generac Holdings Inc.	550,494)	350,576)	252,007)	238,257)	159,386)
Total assets	4,877,780)	3,235,423)	2,665,669)	2,426,314)	2,019,964)
Profitability Ratio
ROA¹	11.29%	10.84%	9.45%	9.82%	7.89%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income attributable to Generac Holdings Inc.	550,494)	350,576)	252,007)	238,257)	159,386)
Adjusted total assets	3,468,106)	2,380,195)	1,860,385)	1,661,659)	1,298,441)
Profitability Ratio
Adjusted ROA²	15.87%	14.73%	13.55%	14.34%	12.28%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROA = 100 × Net income attributable to Generac Holdings Inc. ÷ Total assets
= 100 × 550,494 ÷ 4,877,780 = 11.29%

² Adjusted ROA = 100 × Net income attributable to Generac Holdings Inc. ÷ Adjusted total assets
= 100 × 550,494 ÷ 3,468,106 = 15.87%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Generac Holdings Inc. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.

Generac Holdings Inc. (NYSE:GNRC)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Generac Holdings Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Generac Holdings Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)