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Business Combinations, Goodwill and Intangible Assets | 12 Months Ended
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Dec. 31, 2020
Business Combinations Goodwill And Intangible Assets Disclosure [Abstract] |
Business Combinations, Goodwill and Intangible Assets | 4. Business Combinations, Goodwill and Intangible Assets Pending Warrick Rolling Mill Acquisition. On November 30, 2020, we entered into a purchase agreement with Alcoa Corporation to purchase Alcoa Warrick LLC and certain assets comprising the aluminum casting and rolling mill facility located in Warrick County, Indiana (collectively, the “Warrick Rolling Mill”) for a purchase price of approximately $670.0 million, consisting of approximately $587.0 million in cash and approximately $83.0 million of assumed other post-employment benefits liabilities. The transaction, anticipated to close on or about March 31, 2021, will provide us with non-cyclical end market diversification and entry into the packaging end market. As of December 31, 2020, we incurred approximately $5.5 million of acquisition costs, primarily related to legal and advisory fees. The acquisition of the Warrick Rolling Mill is subject to a number of closing conditions and there can be no assurance that such conditions will be satisfied or that we will be able to complete the Warrick Rolling Mill acquisition within the planned timeframe or at all. Imperial Machine & Tool Co. Acquisition. On September 19, 2018, we acquired Imperial Machine & Tool Co. (“IMT”), located in Columbia, New Jersey, for $43.2 million in cash, net of cash received. IMT specializes in multi-material advanced manufacturing methods and techniques, which include multi-axis computer numerical control machining, additive manufacturing (“3D Printing”), welding and fabrication for demanding aerospace and defense, automotive, high tech and general industrial applications. The acquisition enhances our ability to address customer needs by broadening our capability to provide innovative solutions for demanding applications. 2019 Goodwill Impairment. In conjunction with our acquisition of IMT, we added $25.2 million of goodwill after allocating the consideration paid, net of cash received, to all other identifiable assets. The goodwill recorded reflected the value we expected from IMT’s 3D Printing line of business. However, due to indications that opportunities for this type of disruptive technology were extending over a longer-term horizon than initially valued, during the fourth quarter of 2019, we made the strategic decision to prioritize our focus on IMT’s subtractive (machining) business opportunities while the 3D Printing market continues to mature. Based on our revised strategy, we tested for goodwill impairment using Level 3 inputs and a combination of an income approach using the estimated discounted cash flow and a market-based valuation methodology. Having determined that the carrying value of IMT exceeded its fair value as of November 30, 2019, we recognized an impairment charge of $25.2 million for the year ended December 31, 2019 within Operating income in our Statements of Consolidated Income. As this goodwill is deductible for tax purposes, the deferred tax effects were included in the impairment charge and income tax provision. The following table presents the changes in the carrying value of our goodwill (in millions of dollars):
|  | As of December 31, |
|  | 2020 |  |  | 2019 |
Gross carrying value |  | $ | 37.2 |  |  | $ | 62.4 |
Accumulated impairment loss: |  |  |  |  |  |  |  |
Beginning balance |  |  | (18.4 | ) |  |  | (18.4 | )
Impairment loss |  |  | — |  |  |  | (25.2 | )
Ending balance |  |  | (18.4 | ) |  |  | (43.6 | )
Net carrying value |  | $ | 18.8 |  |  | $ | 18.8 |
Intangible Assets. The following table presents the gross carrying amount and accumulated amortization by major intangible asset class (in millions of dollars, except amortization periods):
|  | Weighted- Average Amortization Period (in years) |  |  | Gross Amount |  |  | Accumulated Amortization |  |  | Intangible Assets, Net |
As of December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | 24 |  |  | $ | 36.1 |  |  | $ | (14.2 | ) |  | $ | 21.9 |
Trade name |  |  | 10 |  |  |  | 2.4 |  |  |  | (0.6 | ) |  |  | 1.8 |
Non-compete agreement |  |  | 5 |  |  |  | 5.4 |  |  |  | (2.4 | ) |  |  | 3.0 |
Total |  |  |  |  |  | $ | 43.9 |  |  | $ | (17.2 | ) |  | $ | 26.7 |
As of December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | 24 |  |  | $ | 36.1 |  |  | $ | (12.7 | ) |  | $ | 23.4 |
Trade name |  |  | 10 |  |  |  | 2.4 |  |  |  | (0.3 | ) |  |  | 2.1 |
Non-compete agreement |  |  | 5 |  |  |  | 5.4 |  |  |  | (1.3 | ) |  |  | 4.1 |
Total |  |  |  |  |  | $ | 43.9 |  |  | $ | (14.3 | ) |  | $ | 29.6 |
We identified no indicators of impairment associated with our intangible assets during the years ended December 31, 2020, December 31, 2019 or December 31, 2018. Amortization expense relating to definite-lived intangible assets was $2.9 million for 2020, $2.8 million for 2019 and $1.8 million for 2018. The following table presents the expected amortization of intangible assets for each of the next five calendar years and thereafter as of December 31, 2020 (in millions of dollars):
2021 |  | $ | 2.8 |
2022 |  |  | 2.8 |
2023 |  |  | 2.6 |
2024 |  |  | 1.8 |
2025 |  |  | 1.8 |
Thereafter |  |  | 14.9 |
Total |  | $ | 26.7 |

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