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GOODWILL AND INTANGIBLE ASSETS, NET | 12 Months Ended
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Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NETThe following table displays a rollforward of the carrying amount of goodwill by reportable segment:
| U.S. Consumer |  | Hawthorne |  | Other |  | Total
Goodwill | $ | 229.9 |  |  | $ | 400.1 |  |  | $ | 10.5 |  |  | $ | 640.5 |
Accumulated impairment losses | (1.8) |  |  | (94.6) |  |  | — |  |  | (96.4) |
Balance at September 30, 2020 | 228.1 |  |  | 305.5 |  |  | 10.5 |  |  | 544.1 |
Acquisitions and measurement-period adjustments | — |  |  | 60.5 |  |  | — |  |  | 60.5 |
Foreign currency translation | — |  |  | — |  |  | 0.6 |  |  | 0.6 |
Reallocation | 15.8 |  |  | (15.8) |  |  | — |  |  | — |
Goodwill | $ | 245.7 |  |  | $ | 444.8 |  |  | $ | 11.1 |  |  | $ | 701.6 |
Accumulated impairment losses | (1.8) |  |  | (94.6) |  |  | — |  |  | (96.4) |
Balance at September 30, 2021 | 243.9 |  |  | 350.2 |  |  | 11.1 |  |  | 605.2 |
Acquisitions and measurement-period adjustments | — |  |  | 180.8 |  |  | — |  |  | 180.8 |
Foreign currency translation | — |  |  | (8.6) |  |  | (1.0) |  |  | (9.6) |
Impairment | — |  |  | (522.4) |  |  | — |  |  | (522.4) |
Goodwill | $ | 245.7 |  |  | $ | 617.0 |  |  | $ | 10.1 |  |  | $ | 872.8 |
Accumulated impairment losses | (1.8) |  |  | (617.0) |  |  | — |  |  | (618.8) |
Balance at September 30, 2022 | $ | 243.9 |  |  | $ | — |  |  | $ | 10.1 |  |  | $ | 254.0 |
The following table presents intangible assets, net of accumulated amortization and impairment charges:
| September 30, 2022 |  | September 30, 2021
| Gross Carrying Amount |  | Accumulated Amortization/ Impairment Charges |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization/ Impairment Charges |  | Net Carrying Amount
Finite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |
Trade names | $ | 318.4 |  |  | $ | (174.3) |  |  | $ | 144.1 |  |  | $ | 293.4 |  |  | $ | (73.3) |  |  | $ | 220.1 |
Customer relationships | 251.1 |  |  | (158.4) |  |  | 92.7 |  |  | 228.3 |  |  | (91.7) |  |  | 136.6 |
Technology | 49.1 |  |  | (43.3) |  |  | 5.8 |  |  | 49.2 |  |  | (41.3) |  |  | 7.9 |
Other | 34.7 |  |  | (21.0) |  |  | 13.7 |  |  | 35.3 |  |  | (14.2) |  |  | 21.1 |
Total finite-lived intangible assets, net |  |  |  |  | 256.3 |  |  |  |  |  |  | 385.7 |
Indefinite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |
Indefinite-lived trade names |  |  |  |  | 168.2 |  |  |  |  |  |  | 168.2 |
Roundup® marketing agreement amendment |  |  |  |  | 155.7 |  |  |  |  |  |  | 155.7 |
Total indefinite-lived intangible assets |  |  |  |  | 323.9 |  |  |  |  |  |  | 323.9 |
Total intangible assets, net |  |  |  |  | $ | 580.2 |  |  |  |  |  |  | $ | 709.6 |
During fiscal 2022, the Company’s Hawthorne reporting unit experienced adverse financial results due to decreased sales volume and higher transportation and warehousing costs. Sales volume decreased due to an oversupply of cannabis, which significantly decreased cannabis wholesale prices and indoor and outdoor cannabis cultivation. As a result, the Company revised its internal forecasts relating to its Hawthorne reporting unit. The Company concluded that the changes in circumstances in this reporting unit and the decline in the Company’s market capitalization triggered the need for an interim impairment review of its goodwill during the third quarter of fiscal 2022. These changes in circumstances also indicated that the carrying amounts of Hawthorne’s long-lived assets, including trade names and customer relationships, may not be recoverable. Accordingly, the Company performed a recoverability test for long-lived assets during the third quarter of fiscal 2022. The Company concluded that the carrying value of long-lived assets exceeded their estimated fair value and recorded pre-tax impairment charges of $69.0 related to trade names and $41.0 related to customer relationships, which were recognized during the third quarter of fiscal 2022 in the “Impairment, restructuring and other” line in the Consolidated Statements of Operations. The fair values of long-lived assets were determined using income-based approaches, including the relief-from-royalty method for trade names, that include market participant expectations of cash flows that the assets will generate over the remaining useful life discounted to present value using an appropriate discount rate. These fair value estimates utilize significant unobservable inputs and, therefore, represent Level 3 fair value measurements. After adjusting the carrying values of the finite-lived intangible assets, the Company completed an interim quantitative impairment test for goodwill during the third quarter of fiscal 2022. This quantitative test resulted in a non-cash, pre-tax goodwill impairment charge of $522.4 related to the Hawthorne reporting unit, which was recognized during the third quarter of fiscal 2022 in the “Impairment, restructuring and other” line in the Consolidated Statements of Operations. The carrying value of goodwill of the Hawthorne reporting unit, after recognizing the impairment, is zero. The estimated fair value of the Hawthorne reporting unit was based upon an equal weighting of the income-based and market-based approaches, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies that are applied to operating performance of the reporting unit. The fair value estimate utilizes significant unobservable inputs and thus represents a Level 3 fair value measurement. During fiscal 2022, the Company also incurred additional finite-lived intangible asset impairment charges of $35.3, comprised of $22.5 related to trade names and $12.8 related to customer relationships, which were recognized during the fourth quarter of fiscal 2022 in the “Impairment, restructuring and other” line in the Consolidated Statements of Operations, associated with its decision to discontinue and exit the market for certain Hawthorne lighting products and brands. During fiscal 2021, the Company changed its internal organization structure such that AeroGrow is now managed by and reported within the U.S. Consumer segment. Within the U.S. Consumer segment, AeroGrow is integrated into the Company’s overall direct to consumer focus and strategy. AeroGrow was previously managed by and reported within the Hawthorne segment. This change in organization structure resulted in a change in the Company’s reporting units. As a result, goodwill included in impacted reporting units was reallocated using a relative fair value approach, resulting in $15.8 of goodwill reallocated from the Hawthorne segment to the U.S. Consumer segment during fiscal 2021. In addition, the Company completed an assessment of potential goodwill impairment immediately before and after the reallocation and determined that no impairment existed. Total amortization expense was $37.1, $30.9 and $32.5 for fiscal 2022, fiscal 2021 and fiscal 2020, respectively. Amortization expense is estimated to be as follows for the years ending September 30:
2023 | $ | 27.0 |
2024 | 22.8 |
2025 | 20.0 |
2026 | 18.6 |
2027 | 17.4 |

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