Company: ALIT
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001628280-25-037820
Chunk: 51

Company: Alight, Inc. / Delaware
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 51
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 financial performance, and relevant entity-specific events for each of the reporting units to determine whether there were any interim indicators of impairment. Based on these considerations, we concluded there were indicators of impairment in the Health Solutions reporting unit and the Company recorded a non-cash goodwill impairment charge of $983 million, which is included in the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2025. The Company determines the fair value of the reporting units by using a combination of the present value of expected future cash flows and a market approach based on earnings multiple data from peer companies, using unobservable level 3 inputs. If an impairment is identified, an impairment is recorded by the amount that the carrying value exceeds the fair value for each reporting unit as a non-recurring fair value measurement. While the future cash flows are consistent with those that are used in our internal planning process inclusive of long-term growth assumptions, estimating cash flows requires significant judgment. Future changes to our projected cash flows can vary from the cash flows eventually realized, which may have a material impact on the outcomes of future goodwill impairment tests.The Company uses a weighted average cost of capital that represents the blended average required rate of return for equity and debt capital based on observed market return data and company-specific risk factors. Other significant assumptions utilized included the Company’s projections of expected future revenues and EBITDA margin, which is defined as earnings before interest, taxes, depreciation and intangible amortization as a percentage of revenue. We utilized a discount rate of 11.5% and a long-term growth rate of 3.5% for our Health Solutions and Wealth Solutions reporting units in the determination of fair value. A hypothetical 25-basis point increase in the discount rate or a hypothetical 50-basis 

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point decrease in the long-term growth rate could have resulted in an additional goodwill impairment in the Company’s Health Solutions reporting unit of $200 million. The estimated fair value of the Wealth Solutions reporting unit continued to exceed its carrying value. At June 30, 2025, our Health Solutions and Wealth Solutions reporting units had $2,101 million and $128 million of goodwill, respectively. Intangible assets by asset class are as follows (in millions):June 30, 2025December 31, 2024GrossCarryingAmountAccumulatedAmortizationNetCarryingAmountGrossCarryingAmountAccumulatedAmortizationNetCarryingAmountIntangible assets:Customer-related and contract based int