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Revenue Recognition | 3 Months Ended
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Mar. 31, 2023
Revenue from Contract with Customer [Abstract] |
Revenue Recognition | Revenue Recognition The Company recognizes revenues when control of a product is transferred to the customer. Control is transferred when the products are shipped from one of the Company’s manufacturing facilities to the customer. Any freight costs billed to and paid by a customer are included in Net sales. The cost the Company pays to deliver finished goods to our customers is recorded as a component of Cost of products sold. These costs include the amounts paid to a third party to deliver the finished goods. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied, which generally occurs when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Generally, the Company considers collectability of amounts due under a contract to be probable upon inception of a sale based on an evaluation of the credit worthiness of each customer. If collectability is not considered to be probable, the Company defers recognition of revenue on satisfied performance obligations until the uncertainty is resolved. We record estimates for bad debts based on our expectations for the collectability of amounts due from customers, considering historical collections, expectations for future activity and other discrete events as applicable. Variable consideration, such as discounts or price concessions, is set forth in the terms of the contract at inception and is included in the assessment of the transaction price at the outset of the arrangement. The transaction price is allocated to the individual performance obligations due under the contract based on the relative stand-alone fair value of the performance obligations identified in the contract. The Company typically uses an observable price to determine the stand-alone selling price for separate performance obligations. The Company does not typically include extended payment terms or significant financing components in its contracts with customers. Certain sales contracts may include cash-based incentives (volume rebates or credits), which are accounted for as variable consideration. We estimate these amounts at least quarterly based on the expected forecast quantities to be provided to customers and reduce revenues recognized accordingly. Incidental items that are immaterial in the context of the contract are recognized as expense in the period incurred. The Company generally expenses sales commissions when incurred because the amortization period is one year or less. These costs are recorded within Selling expense. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less and contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. As a practical expedient, the Company treats shipping and handling activities that occur after control of the good transfers as fulfillment activities, and therefore, does not account for shipping and handling costs as a separate performance obligation. Net sales are attributed to the following geographic locations of the Company’s direct customers (in millions):
| Three Months Ended March 31,
| 2023 |  | 2022
| ATM |  | FBS |  | Total |  | ATM |  | FBS |  | Total
United States | $ | 207.7 |  |  | $ | 132.1 |  |  | $ | 339.8 |  |  | $ | 152.0 |  |  | $ | 38.6 |  |  | $ | 190.6 |
Europe and the former Commonwealth of Independent States | 151.2 |  |  | 54.6 |  |  | 205.8 |  |  | 64.1 |  |  | 51.0 |  |  | 115.1 |
Asia-Pacific | 46.0 |  |  | 27.2 |  |  | 73.2 |  |  | 35.4 |  |  | 24.9 |  |  | 60.3 |
Americas (excluding U.S.) | 18.9 |  |  | 22.3 |  |  | 41.2 |  |  | 14.2 |  |  | 12.7 |  |  | 26.9 |
Other foreign countries | 10.5 |  |  | 8.5 |  |  | 19.0 |  |  | 7.2 |  |  | 6.7 |  |  | 13.9 |
Net sales | $ | 434.3 |  |  | $ | 244.7 |  |  | $ | 679.0 |  |  | $ | 272.9 |  |  | $ | 133.9 |  |  | $ | 406.8 |
ATM is comprised of the legacy SWM Advanced Materials & Structures segment and FBS is comprised of the legacy Engineered Papers segment. As such, there were no changes to the historical results of these segments. Refer to Note 15. Segment Information for additional information on our segments. The ATM segment supplies customers serving generally high-growth end markets as follows: Industrials – substrates for tape, industrial, construction, infrastructure, performance labels, cable wrapping, abrasives, and other specialty applications. Protective solutions – paint protection films for transportation in aftermarket channel, interlayer lamination for ballistic resistant and security glass, high-performance graphics substrates, and emerging smart glass applications. Filtration – advanced media for transportation applications (such as air intake, cabin air, fuel oil), reverse osmosis water filtration, industrial process air and liquid applications, air purification, and HVAC and life science/personal protective equipment. Healthcare – advanced wound care, consumer wellness, device fixation, and finger bandages. Release liners – substrates critical to adhesive separation for applications in the personal care, label, tape, industrial, graphic arts, composites, and medical categories. Net sales as a percentage by end market for the ATM business were as follows:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2023 |  | 2022
Industrials |  |  |  |  | 33 | % |  | 36 | %
Protective solutions |  |  |  |  | 15 | % |  | 31 | %
Filtration |  |  |  |  | 26 | % |  | 17 | %
Healthcare |  |  |  |  | 15 | % |  | 16 | %
Release liners |  |  |  |  | 11 | % |  | — | %
Net sales |  |  |  |  | 100 | % |  | 100 | %
The FBS segment supplies customers serving generally both growing and mature end markets as follows: Packaging and specialty papers – sustainable premium packaging solutions, imaging and communication, home & office, consumer goods, and other applications. Engineered papers – combustibles and reduce risk products, primarily for the tobacco industry, alternative fibers lightweight papers, and emerging alternative solutions. Net sales as a percentage by end market for the FBS business were as follows:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2023 |  | 2022
Packaging and specialty papers |  |  |  |  | 47 | % |  | — | %
Engineered papers |  |  |  |  | 53 | % |  | 100 | %
Net sales |  |  |  |  | 100 | % |  | 100 | %
Transfer of Receivables On December 23, 2022, the Company entered into an accounts receivables sales agreement (the "Receivables Sales Agreement") to sell certain trade receivables arising from revenue transactions of the Company's U.S. subsidiaries on a revolving basis. The maximum funding commitment of the Receivables Sales Agreement is $175.0 million. The agreement has an initial term of three years and can be renewed. In connection with the Receivables Sales Agreement, the Company formed a separate bankruptcy-remote special purpose entity (“SPE”), which is a wholly owned and controlled subsidiary. The Company continuously transfers receivables to the SPE and the SPE transfers ownership and control of certain receivables that meet certain qualifying conditions to a third-party financial institution in exchange for cash. Certain receivables are held by the SPE and are pledged to secure the collectability of the sold receivables. The amount of receivables pledged as collateral as of March 31, 2023 and December 31, 2022 was $62.2 million and $94.2 million, respectively. The SPE incurs fees due to the third-party financial institution related to accounts receivable sales transactions. The Company has continuing involvement with the receivables transferred by the SPE to the third-party financial institution by providing collection services. The Company also participates in uncommitted trade accounts receivable sales programs ("Reverse Receivables Programs") under which certain trade receivables are sold, without recourse, to a third-party financial institution in exchange for cash. The Company does not retain any interest in or continuing involvement with the invoices after they are sold. The invoices are sold at face value, less a transaction fee. The Company accounts for transactions under the Receivables Sales Agreement and Reverse Receivables Programs as sales of financial assets, with the associated receivables derecognized from the Company’s unaudited Condensed Consolidated Balance Sheets. Total fees related to the Receivables Sales Agreement and Reverse Receivables Programs are considered to be a loss on the sale of financial assets and are primarily recorded within Other income, net in the unaudited Condensed Consolidated Statements of Income (Loss). Total fees were immaterial for the three months ended March 31, 2023. Continuous cash activity related to the Receivables Sales Agreement and Reverse Receivables Programs is reflected in cash from operating activities in the unaudited Condensed Consolidated Statements of Cash Flows. The following table summarizes the activity under the Receivables Sales Agreement and Reverse Receivables Programs (in millions):
| Three Months Ended
| March 31, 2023
Trade accounts receivable sold to financial institutions | $ | 312.1 |
Cash proceeds from financial institutions | 308.8 |
There were no material trade accounts receivable sales for the three months ended March 31, 2022.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI https://asc.fasb.org/topic&trid=49130388 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 + Details
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