NOTE 19: ACQUISITIONS AND DIVESTITURES

ACQUISITIONS

During 2015, the following assets were acquired for $47,198,000 of consideration (($27,198,000 cash and $20,000,000 exchanges of real property and businesses (twelve California ready-mixed concrete operations)):

one aggregates facility in Tennessee

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

thirteen asphalt mix plants, primarily in Arizona

The 2015 acquisitions listed above are reported in our consolidated financial statements as of their respective acquisition dates. The amounts of total revenues and net earnings for these acquisitions (collectively) are included in our Consolidated Statement of Comprehensive Income for year ended December 31, 2015, as follows:



in thousands				2015
Actual Results
Total revenues				$ 67,002
Net earnings				1,938

None of the 2015 acquisitions listed above are material to our results of operations or financial position either individually or collectively. The fair value of consideration transferred for these acquisitions and the preliminary amounts of assets acquired and liabilities assumed (based on their estimated fair values at their acquisition dates), are summarized below:



in thousands				2015
Fair Value of Purchase Consideration
Cash				$ 27,198
Exchanges of real property and businesses				20,000
Total fair value of purchase consideration				$ 47,198
Identifiable Assets Acquired and Liabilities Assumed
Accounts and notes receivable, net				$ 2,105
Inventories				3,559
Other current assets				358
Property, plant & equipment, net				26,087
Other intangible assets
Contractual rights in place				17,484
Noncompetition agreement				250
Liabilities assumed				(2,645)
Net identifiable assets acquired				$ 47,198
Goodwill				$ 0

Estimated fair values of assets acquired and liabilities assumed are preliminary pending appraisals of contractual rights in place and property, plant & equipment.

The contractual rights in place noted above will be amortized against earnings ($7,168,000 - straight-line over 20 years and $10,317,000 - units of production over an estimated 34 years) and deductible for income tax purposes over 15 years.

During 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 of our 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

None of the 2014 acquisitions listed above were material to our results of operations or financial position either individually or collectively. As a result of these 2014 acquisitions, we recognized $128,286,000 of amortizable intangible assets (primarily contractual rights in place). The contractual rights in place will be amortized against earnings using the unit-of-production method over an estimated weighted-average period in excess of 40 years and all but $36,921,000 will be deductible for income tax purposes over 15 years. The $13,303,000 of goodwill recognized (none of which will be deductible for income tax purposes) represents the balance of deferred tax liabilities generated from carrying over the seller’s tax basis in the assets acquired.

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.

In 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 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

In 2013, we sold:

Third quarter — reclaimed land associated with a former site of a ready-mixed concrete facility in Virginia for net pretax cash proceeds of $11,261,000 resulting in a pretax gain of $9,027,000

Third quarter — a percentage of the future production from aggregates reserves at certain owned quarries. The sale was structured as a volumetric production payment (VPP) for which we received gross cash proceeds of $154,000,000 and incurred transaction costs of $905,000. The net proceeds were recorded as deferred revenue and are amortized on a unit-of-sales basis to revenues over the term of the VPP. See Note 1, caption Deferred Revenue, for the key terms of the VPP

Second quarter — four aggregates production facilities in Wisconsin for net pretax cash proceeds of $34,743,000 resulting in a pretax gain of $21,183,000. We allocated $4,521,000 of goodwill to these dispositions based on the relative fair values of the businesses disposed of and the portion of the reporting unit retained. Additionally, the dispositions of these facilities will likely result in a partial withdrawal from one of our multiemployer pension plans; therefore, we recognized a $4,000,000 liability related to this plan

First quarter — one aggregates production facility in Wisconsin and its related replacement reserve land for net pretax cash proceeds of $5,133,000 resulting in a pretax gain of $2,802,000. We allocated $674,000 of goodwill to this disposition based on the relative fair value of the business disposed of and the portion of the reporting unit retained

PENDING DIVESTITURES

There were no pending divestitures classified as assets held for sale as of December 31, 2015. Conversely, the twelve ready-mixed concrete operations in California (exchanged for thirteen asphalt mix plants as noted above) sold in the first quarter of 2015 are presented in the accompanying Consolidated Balance Sheet as of December 31, 2014 as assets held

for sale. The major classes of assets and liabilities of assets classified as held for sale as of December 31 are as follows:



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

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.