Clearwater Paper Corp

NOTE 7: GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amounts of goodwill and intangible assets were as follows:

1 Goodwill recognized from the Augusta acquisition. See Note 3, "Business Acquisition," for additional information.

As of December 31, 2024, we had $48.6 million of goodwill included on our Consolidated Balance Sheets. Our goodwill was accumulated through the acquisition of Manchester Industries in 2016 for $35.1 million and the acquisition of the Augusta paperboard facility in 2024 of $12.9 million. Goodwill is not amortized but tested for impairment annually as of each November 1st and at any time when events suggest impairment may have occurred, such as a significant adverse change in the business climate or a sustained drop in the company’s market capitalization. If the carrying amount of a reporting unit exceeds the estimated fair value of that reporting unit, a goodwill impairment loss is recognized equal to the excess of the reporting unit’s carrying amount of over its estimated fair value.

During the third quarter of 2025, we concluded that the sustained decline in our stock price (market capitalization) was a triggering event requiring an interim goodwill impairment assessment. Based upon this assessment, we concluded that our carrying value exceeded the estimated fair value. As a result, we recorded a non-cash goodwill impairment charge of $48.0 million which represents a full impairment of the goodwill. The decline in the estimated fair value and the resulting impairment was primarily driven by continued paperboard market softness and additional market capacity coming online which drove a sustained decline in our market capitalization. This was coupled with the increase in our carrying value related to the divestiture of our tissue business in late 2024. The fair market value considered both the market and income approach. As a result of the triggering event, we conducted a recoverability analysis on other long-term assets, including fixed assets and intangible assets subject to amortization. The results indicated that no need for further impairment charges.

Our intangible assets, which were accumulated through the acquisition of Manchester Industries, are amortized over their useful lives of 10 years. The gross book value and accumulated amortization of definite lived intangible assets at December 31, 2025 was $25.4 million and $23.3 million. The gross book value and accumulated amortization of definite lived intangible assets at December 31, 2024 was $34.9 million and $30.6 million.

As of December 31, 2025, estimated future amortization expense related to intangible assets is as follows: