Goodwill

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in the carrying amount of goodwill by reportable segment were as follows (in millions):


	ATM		FBS		Total
Balance at December 31, 2022	$	842.6	$	1.6	$	844.2
Goodwill acquired during the period(1)	16.0		—		16.0
Goodwill impairment	(401.0)		—		(401.0)
Foreign currency translation	8.8		—		8.8
Balance at September 30, 2023	$	466.4	$	1.6	$	468.0

(1) Related to the measurement period adjustments for the Merger.

Accumulated impairment loss for the FBS segment was $2.7 million as of September 30, 2023 and December 31, 2022. Accumulated impairment loss for the ATM segment was $401.0 million as of September 30, 2023 and no accumulated impairment loss was recognized as of December 31, 2022.

Goodwill is not subject to amortization and is tested for impairment annually, during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset may be impaired. The first step in a goodwill impairment assessment is to evaluate qualitative factors, such as macroeconomic conditions and our overall financial performance by reporting unit to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. Otherwise, we proceed to the goodwill impairment test, where the fair value of the reporting unit is compared to its carrying value. The difference between the total fair value of the reporting unit and the carrying value is recognized as an impairment to the reporting unit's goodwill.

Effective July 1, 2023, and as a result of our ongoing integration efforts, we identified a change in our operating segments. While the ATM reportable segment remains as an aggregation of the Company’s highly engineered polymer, resin and fiber-based substrates, nets, films, adhesive tapes, and other non-woven products, the segment was disaggregated into five reporting units due to changes in internal reporting of operating results and related segment level management. See Note 15. Segment Information for additional information on our segments.

Further, during 2023, the sustained impact of macro-economic conditions, an increasingly global competitive environment, moderation in certain projected volume expectations, and a sustained decrease in our share price contributed to the decline in reporting unit fair value. Additionally, management completed a long term financial model, aligning with the new reporting unit structure during the third quarter. That model’s forecast reflects the higher relative allocation of corporate overhead costs to continuing operations as a result of the proposed sale of our EP business.

As a result, we performed an interim quantitative goodwill impairment test, which resulted in a non-cash impairment charge of $401.0 million.

The fair value of a reporting unit is based on an income approach, utilizing estimated future cash flows discounted at a rate commensurate with the risk involved and considers significant assumptions including projections of future performance, specifically our ability to sustain and grow market share at forecasted margins and significant assumptions around the rate a market participant would use to discount those cash flows. Changes in these assumptions can have a significant impact on the assessment of fair value. While the fair value of each reporting unit was ultimately estimated using the income approach, management also evaluated fair value under the market approach to evaluate the reasonableness of the estimated fair values.