Note 16: Acquisitions and Divestitures

ACQUISITIONS

Through the six months ended June 30, 2015, we purchased the following for $41,387,000 of consideration ($21,387,000 cash and $20,000,000 exchanges of real property and businesses (twelve California ready-mixed concrete operations)):

three aggregates facilities and seven ready-mixed concrete operations in Arizona and New Mexico

thirteen asphalt mix plants, primarily in Arizona

As a result, we recognized $16,543,000 of amortizable intangible assets (contractual rights in place). The contractual rights in place will be amortized against earnings ($7,168,000 - straight-line over 20 years and $9,375,000 - units of production over an estimated 50 years) and deductible for income tax purposes over 15 years. The purchase price allocation is preliminary pending appraisals of contractual rights in place and property, plant & equipment.

For the full year 2014, we purchased the following for total consideration of $331,836,000 ($284,237,000 cash; $2,414,000 exchanges of real property and businesses; and $45,185,000 Vulcan Materials Company common stock (715,004 shares)):

two portable asphalt plants and an aggregates facility in southern California

five aggregates facilities and associated downstream assets in Arizona and New Mexico

two aggregates facilities in Delaware, serving northern Virginia and Washington, D.C.

four aggregates facilities in the San Francisco Bay Area

a rail-connected aggregates operation and two distribution yards that serve the greater Dallas/Fort Worth market

a permitted aggregates quarry in Alabama

DIVESTITURES AND PENDING DIVESTITURES

As noted above, in the first quarter of 2015, we exchanged twelve ready-mixed concrete operations in California (representing all of our California concrete operations) for thirteen asphalt mix plants (primarily in Arizona) resulting in a pretax gain of $5,886,000.

For the full year 2014, we sold:

First quarter — our cement and concrete businesses in the Florida area for net pretax cash proceeds of $721,359,000 resulting in a pretax gain of $227,910,000. We retained all of our Florida aggregates operations, our former Cement segment’s calcium operation in Brooksville, Florida and real estate associated with certain former ready-mixed concrete facilities. Under a separate supply agreement, we will continue to provide aggregates to the divested concrete facilities, at market prices, for a period of 20 years. As a result of the continuing cash flows (generated via the supply agreement and the retained operation and assets), the disposition is not reported as discontinued operations

First quarter — a previously mined and subsequently reclaimed tract of land in Maryland (Aggregates segment) for net pretax cash proceeds of $10,727,000 resulting in a pretax gain of $168,000

First quarter — unimproved land in Tennessee previously containing a sales yard (Aggregates segment) for net pretax cash proceeds of $5,820,000 resulting in a pretax gain of $5,790,000

Effective land management is both a business strategy and a social responsibility. We strive to achieve value through our mining activities as well as incremental value through effective post-mining land management. Our land management strategy includes routinely reclaiming and selling our previously mined land. Additionally, this strategy includes developing conservation banks by preserving land as a suitable habitat for endangered or sensitive species. These conservation banks have received approval from the United States Fish and Wildlife Service to offer mitigation credits for sale to third parties who may be required to compensate for the loss of habitats of endangered or sensitive species.

No assets met the criteria for held for sale at June 30, 2015 or 2014. As of December 31, 2014, twelve ready-mixed concrete facilities in California are presented in the accompanying Condensed Consolidated Balance Sheet as assets held for sale and liabilities of assets held for sale. During the first quarter of 2015, we swapped these ready mixed concrete facilities for thirteen asphalt mix operations, primarily in Arizona (as noted above). The major classes of assets and liabilities of assets classified as held for sale are as follows:



	June 30	December 31		June 30
in thousands	2015		2014		2014
Held for Sale
Current assets	$ 0		$ 1,773		$ 0
Property, plant & equipment, net	0		12,764		0
Other intangible assets, net	0		647		0
Total assets held for sale	$ 0		$ 15,184		$ 0
Asset retirement obligations	$ 0		$ 520		$ 0
Total liabilities of assets held for sale	$ 0		$ 520		$ 0