Goodwill

9 Months Ended

Sep. 30, 2022

Goodwill.

Goodwill

NOTE 9—GOODWILL

The following table shows changes in the carrying amount of goodwill, by segment, from December 31, 2021 to September 30, 2022:

	Engineered		Latex		Base						Americas
	Materials		Binders		Plastics		Polystyrene		Feedstocks		Styrenics		Total
Balance at December 31, 2021	$	667.3	$	15.9	$	22.4	$	4.5	$	—	$	—	$	710.1
Acquisitions (Note 3)		—		—		22.8		—		—		—		22.8
Foreign currency impact		(31.7)		(2.3)		(6.3)		(0.7)		—		—		(41.0)
Balance at September 30, 2022	$	635.6	$	13.6	$	38.9	$	3.8	$	—	$	—	$	691.9

The Company tests goodwill for impairment annually as of October 1, or more frequently when events or changes in circumstances indicate that the fair value of a reporting unit is more likely than not below carrying value. As noted within Note 3 – Acquisitions and as discussed within the Annual Report, in 2021, the Company completed the PMMA Acquisition and Aristech Surfaces Acquisition, each of which represents a separate reporting unit within the Engineered Materials segment. The Company allocated the purchase price of these acquisitions to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess of the purchase price over the aggregate fair values recorded as goodwill. As of September 30, 2022, the reporting units for the PMMA business and Aristech Surfaces had goodwill balances of approximately $503.0 million and $120.0 million, respectively.

In 2022, historically high natural gas prices and depressed customer demand in Europe, COVID-19 lockdowns in China, global supply chain constraints, weakness in certain end customer applications, and an uncertain geopolitical situation in Europe, created a challenging operating environment for these businesses, negatively impacting their financial performance. In response to these conditions, the Company performed qualitative analyses over these reporting units, including consideration of current and estimated future financial results, general and industry-specific economic conditions, changes in their respective carrying values and potential changes to the assumptions used in previous fair value calculations.

Based on these analyses, the Company has not identified any triggering events indicating that it is more likely than not that goodwill is impaired. However, these reporting units may be at risk for future impairment due to the limited amount of fair value in excess of carrying value as a result of their recent acquisition. Should these conditions persist, or other events occur indicating that the estimated future cash flows of these reporting units have declined, the Company may be required to record future non-cash impairment charges related to goodwill.