NOTE 19: ACQUISITIONS AND DIVESTITURES

BUSINESS ACQUISITIONS

During 2017 (excluding the assets immediately divested in the Aggregates USA acquisition for $287,292,000), the following assets related to material business acquisitions were acquired for total consideration of $793,523,000:

California — ready-mixed concrete facilities, an aggregates marine distribution yard and building materials yards

Florida — an aggregates rail distribution yard

Georgia — three aggregates facilities and fourteen aggregates rail distribution yards

South Carolina — an aggregates rail distribution yard

Tennessee — asphalt mix operations and a construction paving business

The amounts of total revenues and net earnings for the material business acquisitions noted above are included in our Consolidated Statement of Comprehensive Income for the year ended December 31, 2017, as follows:



in thousands				2017
Actual Results
Total revenues				$ 162,462
Net earnings				11,830

The unaudited pro forma financial information in the table below summarizes the results of operations for Vulcan and these material business acquisitions as if they were combined as of January 1, 2016. The 2016 financial information does not reflect any cost savings, operating efficiencies or synergies as a result of these combinations. Transactions between Vulcan and these businesses during the periods presented in the pro forma financial information were immaterial and have been eliminated as if the companies were consolidated affiliates during the following periods:



in thousands	2017	2016
Supplemental Pro Forma Results
Total revenues	$ 4,015,891	$ 3,882,257
Net earnings	$ 610,494	$ 433,431

The unaudited pro forma results above may not be indicative of the results that would have been obtained had these acquisitions occurred at the beginning of 2016, nor does it intend to be a projection of future results.

The fair value of consideration transferred for these material business acquisitions and the preliminary amounts (pending appraisals of contractual rights in place and property, plant & equipment) of assets acquired and liabilities assumed, are summarized below:



in thousands				2017
Fair Value of Purchase Consideration
Cash				$ 1,072,978
Payable to seller				7,837
Total fair value of purchase consideration				$ 1,080,815
Identifiable Assets Acquired and Liabilities Assumed
Accounts and notes receivable, net				$ 14,955
Inventories				21,679
Other current assets				608
Investments				3,590
Property, plant & equipment				433,606
Other intangible assets
Contractual rights in place				295,482
Liabilities assumed				(3,894)
Net identifiable assets acquired and retained				$ 766,026
Goodwill				$ 27,497
Net Assets Divested Immediately Upon Acquisition				$ 287,292

Additionally, during 2017 we acquired the following assets related to immaterial business acquisitions for $48,490,000 of consideration ($36,746,000 cash, $1,844,000 payable and $9,900,000 of fair value of assets swapped):

Arizona — an asphalt mix operation

Illinois — two aggregates facilities

New Mexico — an aggregates facility

Tennessee — an aggregates facility

Virginia — an aggregates facility and a ready-mixed concrete facility

As a collective result of the 2017 acquisitions, we recognized $309,112,000 of amortizable intangible assets (primarily contractual rights in place).The contractual rights in place will be amortized against earnings ($73,879,000 - straight-line over a weighted-average 19.3 years and $235,133,000 - units of sales over an estimated 54.7 years) and deductible for income tax purposes over 15 years. Of the $27,497,000 of goodwill recognized, all will be deductible for income tax purposes over 15 years.

During 2016, the following assets were acquired for $33,287,000 of consideration ($32,537,000 cash and $750,000 payable):

Georgia — a distribution business to complement our aggregates logistics and distribution activities

New Mexico — an asphalt mix operation

Texas — an aggregates facility

None of the 2016 acquisitions listed above are material to our results of operations or financial position either individually or collectively. As a result of these 2016 acquisitions, we recognized $16,670,000 of amortizable intangible assets ($15,213,000 contractual rights in place and $1,457,000 of noncompetition agreement).The contractual rights in place will be amortized against earnings ($6,798,000 - straight-line over 20 years and $8,415,000 - units of sales over an estimated 20 years) and deductible for income tax purposes over 15 years.

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 operations, primarily in Arizona

None of the 2015 acquisitions listed above were material to our results of operations or financial position either individually or collectively. As a result of these 2015 acquisitions, we recognized $17,734,000 of amortizable intangible assets ($17,484,000 - contractual rights in place and $250,000 - noncompetition agreement). The contractual rights in place will be amortized against earnings ($7,168,000 - straight-line over 20 years and $10,317,000 - units of sales over an estimated 34 years) and deductible for income tax purposes over 15 years.

DIVESTITURES

In 2017, we sold:

Fourth quarter — swapped ready-mixed concrete operations in Arizona (fair value of $9,900,000 and book value of $1,879,000) for an asphalt mix operation in Arizona resulting in a pretax gain of $8,021,000

Fourth quarter – as required by the Department of Justice, we immediately divested certain assets obtained in the Aggregates USA acquisition resulting in no gain

In 2016, we sold:

Fourth quarter — surplus land in California and Virginia for net pretax cash proceeds of $19,185,000 resulting in pretax gains of $11,871,000

Fourth quarter — plant relocation reimbursement in Virginia for net pretax cash proceeds of $6,000,000 resulting in a pretax gain of $4,335,000 (this item is presented within other operating expense in the accompanying Consolidated Statement of Comprehensive Income)

As noted above, in 2015 (first quarter), 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.