CLOUD IMPLEMENTATION

12 Months Ended

Dec. 31, 2023

At December 31, 2021, the Company had capitalized $50.7 of cloud implementation costs, of which $38.4 was impaired in the first quarter of 2022. This impairment was related to the cloud-based North American enterprise resource planning (ERP) system, which was intended to replace the on premise ERP currently in use. In connection with the executive transition that took place in the first quarter of 2022 and the culmination of related process optimization workshops in March 2022, the Company made the decision to indefinitely suspend the cloud-based North America ERP implementation, which was going to require significant additional investment before it could function as well as our current North America ERP, and to instead focus the Company's ERP implementation efforts on the distribution subsidiaries, which can better leverage the standardization and simplification initiatives connected with the cloud-based implementation. As a result of the completed process optimization walkthroughs, the Company determined that the customizations already built for the North America ERP should not be leveraged at the distribution subsidiaries which require more streamlined and scalable process flows.

At December 31, 2023 and 2022, the Company had a net book value of capitalized cloud implementation costs of $18.5 and $19.0, respectively. This relates to a combination of the distribution subsidiary ERP and corporate tools to support business operations. Refer to Note 3 for further information on Fresh Start Accounting Adjustments.

Amortization of cloud implementation fees are expensed over the term of the cloud computing arrangement, and the expense is required to be recognized in the same line item in the income statement as the associated hosting service expenses. Amortization of cloud implementation fees were as follows:


	Successor		Predecessor
	Period from 08/12/2023 through 12/31/2023		Period from 01/01/2023 through 08/11/2023		Years ended December 31,
					2022		2021
Amortization of cloud implementation fees	$	2.9	$	2.0	$	2.5	$	0.8