XML 26 R13.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Business Combinations, Goodwill and Intangible Assets | 12 Months Ended
--- | ---
Dec. 31, 2021
Business Combinations Goodwill And Intangible Assets Disclosure [Abstract] |
Business Combinations, Goodwill and Intangible Assets | 4. Business Combinations, Goodwill and Intangible Assets Warrick Rolling Mill Acquisition. On March 31, 2021, we acquired Alcoa Warrick LLC and certain assets comprising the aluminum casting and rolling mill facility located in Warrick County, Indiana (collectively, “Warrick”) for a purchase price of $670.0 million. Warrick is a leading producer of bare and coated aluminum coil used for can stock applications in the beverage and food packaging industry in North America. The transaction provides us with non-cyclical end market diversification and re-entry into the packaging end market. Acquisition-related costs incurred and expensed during the years ended December 31, 2021 and December 31, 2020 were $16.7 million and $5.5 million, respectively, primarily related to professional fees and included within SG&A and R&D. The following table presents the purchase consideration to allocate (in millions of dollars):
Contract purchase price |  | $ | 670.0 |
Working capital adjustment |  |  | 31.0 |
Initial outstanding indebtedness – Other postretirement benefits liabilities |  |  | (83.5 | )
Cash paid at acquisition close on March 31, 2021 |  |  | 617.5 |
Estimated post-close adjustments |  |  | (12.7 | )
Preliminary purchase consideration to allocate |  |  | 604.8 |
Revision to estimated post-close adjustments |  |  | 4.4 |
Final purchase consideration to allocate |  | $ | 609.2 |
We accounted for the acquisition using the acquisition method of accounting, which requires the assets acquired and liabilities assumed to be recorded at the date of acquisition at their respective estimated fair values. We prepared the purchase consideration as of the acquisition date based on our understanding of the fair value of the acquired assets and assumed liabilities. During the year ended December 31, 2021, we finalized the valuation and completed the purchase price allocation, which included the adjustments listed below. The following table summarizes the finalized fair values of assets acquired and liabilities assumed (in millions of dollars):
|  | Initial Allocation |  |  | Adjustments |  |  | Final Allocation |
Trade receivables |  | $ | 162.4 |  |  | $ | (2.4 | ) |  | $ | 160.0 |
Other receivables |  |  | 6.2 |  |  |  | 4.8 |  |  |  | 11.0 |
Inventories |  |  | 209.0 |  |  |  | 0.1 |  |  |  | 209.1 |
Prepaid expenses and other current assets |  |  | — |  |  |  | 0.3 |  |  |  | 0.3 |
Property, plant and equipment |  |  | 385.4 |  |  |  | (41.7 | ) |  |  | 343.7 |
Operating lease assets |  |  | 12.3 |  |  |  | — |  |  |  | 12.3 |
Intangible assets |  |  | 56.5 |  |  |  | (6.5 | ) |  |  | 50.0 |
Goodwill1 |  |  | 27.4 |  |  |  | (6.9 | ) |  |  | 20.5 |
Other Assets2 |  |  | — |  |  |  | 56.8 |  |  |  | 56.8 |
Accounts payable |  |  | (143.0 | ) |  |  | (0.2 | ) |  |  | (143.2 | )
Accrued salaries, wages and related expenses |  |  | (5.9 | ) |  |  | (1.0 | ) |  |  | (6.9 | )
Other accrued liabilities |  |  | (11.5 | ) |  |  | 0.9 |  |  |  | (10.6 | )
Long-term portion of operating lease liabilities |  |  | (8.7 | ) |  |  | — |  |  |  | (8.7 | )
Pension and other postretirement benefits |  |  | (83.7 | ) |  |  | 0.2 |  |  |  | (83.5 | )
Long-term liabilities |  |  | (1.6 | ) |  |  | — |  |  |  | (1.6 | )
Total allocated purchase consideration |  | $ | 604.8 |  |  | $ | 4.4 |  |  | $ | 609.2 |
1 | Goodwill is primarily attributable to the assembled workforce and is expected to be deductible for income tax purposes.
2 | Other assets represents assets to be purchased or constructed by Alcoa Corporation (“Alcoa”) following the close of the acquisition and subsequently conveyed to us in connection with separating the rolling mill from the other businesses retained by Alcoa.
For the period from April 1, 2021 through December 31, 2021, Warrick contributed $1,141.2 million of net sales from continuing operations included in our Statements of Consolidated (Loss) Income for the year ended December 31, 2021. Net (loss) income for the nine months ended December 31, 2021 is not provided as the Warrick results have been fully integrated and discrete financial information cannot be obtained without unreasonable effort. The following unaudited pro forma financial information presents results assuming Warrick had been acquired on January 1, 2020. The unaudited pro forma information includes adjustments and consequential tax effects related to: (i) amortization and depreciation for intangible assets and property, plant and equipment acquired; (ii) the effects of certain reclassifications and conforming accounting policies; and (iii) acquisition-related transaction costs. The unaudited pro forma information presented below is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the consolidated business had the acquisition occurred at the beginning of fiscal year 2020 or of the results of our future operations of the consolidated business.
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |
Net sales |  | $ | 2,936.8 |  |  | $ | 2,256.3 |
Net income (loss) |  | $ | 0.8 |  |  | $ | (35.7 | )
The Warrick rolling mill has historically purchased molten aluminum and electrical power from Alcoa’s smelter and power plant in Warrick County, Indiana. Alcoa’s Warrick smelter historically sold the molten aluminum to the Warrick rolling mill at smelter cost and electrical power from Alcoa’s power plant at negotiated prices between the parties. As part of the acquisition of Warrick, we negotiated pricing for molten aluminum and electrical power with Alcoa at alternative rates which more closely align with market pricing. The table above does not reflect the cost of molten aluminum and electrical power under these negotiated rates. Goodwill. The following table presents the changes in the carrying value of our goodwill (in millions of dollars):
|  | As of December 31, |
|  | 2021 |  |  | 2020 |
Gross carrying value: |  |  |  |  |  |  |  |
Beginning balance |  | $ | 37.2 |  |  | $ | 37.2 |
Warrick acquisition |  |  | 20.5 |  |  |  | — |
Ending balance |  |  | 57.7 |  |  |  | 37.2 |
Accumulated impairment loss |  |  | (18.4 | ) |  |  | (18.4 | )
Net carrying value |  | $ | 39.3 |  |  | $ | 18.8 |
In conjunction with our 2018 acquisition of Imperial Machine & Tool Co (“IMT”), we added $25.2 million of goodwill after allocating the consideration paid, net of cash received, to all other identifiable assets. 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 (Loss) Income. As this goodwill is deductible for tax purposes, the deferred tax effects were included in the impairment charge and income tax provision. 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, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships1 |  |  | 19 |  |  | $ | 68.1 |  |  | $ | (17.8 | ) |  | $ | 50.3 |
Trade name |  |  | 10 |  |  |  | 2.4 |  |  |  | (0.8 | ) |  |  | 1.6 |
Non-compete agreement |  |  | 5 |  |  |  | 5.4 |  |  |  | (3.5 | ) |  |  | 1.9 |
Favorable commodity contracts2 |  |  | 2 |  |  |  | 11.0 |  |  |  | (4.1 | ) |  |  | 6.9 |
Favorable lease contracts2 |  |  | 120 |  |  |  | 7.0 |  |  |  | — |  |  |  | 7.0 |
Total |  |  |  |  |  | $ | 93.9 |  |  | $ | (26.2 | ) |  | $ | 67.7 |
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 |
1 | Of the total acquired customer relationships, $32.0 million was purchased in conjunction with the Warrick acquisition and had a weighted average amortization period of 12 years.
2 | The favorable lease and commodity contracts were purchased in conjunction with the Warrick acquisition.
We identified no indicators of impairment associated with our intangible assets during the years ended December 31, 2021, December 31, 2020 or December 31, 2019. Amortization expense relating to definite-lived intangible assets was $9.0 million, $2.9 million and $2.8 million for 2021, 2020 and 2019, respectively. The following table presents the expected amortization of intangible assets for each of the next five calendar years and thereafter as of December 31, 2021 (in millions of dollars):
2022 |  | $ | 12.4 |
2023 |  |  | 5.3 |
2024 |  |  | 4.5 |
2025 |  |  | 4.5 |
2026 |  |  | 4.5 |
Thereafter |  |  | 36.5 |
Total |  | $ | 67.7 |

X
- Definition Business combinations goodwill and intangible assets disclosure. + References No definition available. + Details
Name: | kalu_BusinessCombinationsGoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | kalu_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Business combinations goodwill and intangible assets disclosure. + References No definition available. + Details
Name: | kalu_BusinessCombinationsGoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | kalu_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration