ACQUISITIONS AND DIVESTITURES

12 Months Ended

Dec. 31, 2019

ACQUISITIONS AND DIVESTITURES [Abstract]

NOTE 19: ACQUISITIONS AND DIVESTITURES

BUSINESS ACQUISITIONS

2019 business acquisitions — During 2019, we purchased the following operations for total cash consideration of $45,273,000:

Tennessee — aggregates operations

Virginia — ready-mixed concrete operations

The 2019 acquisitions listed above are reported in our consolidated financial statements as of their respective acquisition dates. None of these acquisitions are material to our results of operations or financial position either individually or collectively. Purchase price allocations have not been finalized due to pending appraisals for intangible assets and property, plant & equipment.

As a result of the 2019 acquisitions, we recognized $25,443,000 of amortizable intangible assets (contractual rights in place). The contractual rights in place will be amortized against earnings on a straight-line basis over a weighted-average 19.5 years and will be deductible for income tax purposes over 15 years.

2018 business acquisitions — During 2018, we purchased the following operations for total consideration of $219,863,000 ($215,363,000 cash and $4,500,000 payable):

Alabama — aggregates, asphalt mix and construction paving operations

California — aggregates and asphalt mix operations

Texas — aggregates rail yards, asphalt mix and construction paving operations

The 2018 acquisitions listed above are reported in our consolidated financial statements as of their respective acquisition dates. None of these acquisitions are material to our results of operations or financial position either individually or collectively. The fair value of consideration transferred for these business acquisitions and the preliminary amounts assigned as of December 31, 2018 (immaterial adjustments were recorded in 2019 including a working capital adjustment in which we received $1,122,000 and an increase to goodwill of $1,665,000) to assets acquired and liabilities assumed, are summarized below:



in thousands				2018
Fair Value of Purchase Consideration
Cash				$ 215,363
Payable to seller				4,500
Total fair value of purchase consideration				$ 219,863
Identifiable Assets Acquired and Liabilities Assumed
Accounts and notes receivable, net				$ 15,402
Inventories				11,874
Other current assets				661
Property, plant & equipment				150,274
Other intangible assets
Contractual rights in place				44,163
Deferred income taxes, net				(32,871)
Liabilities assumed				(11,965)
Net identifiable assets acquired				$ 177,538
Goodwill				$ 42,325

As a result of the 2018 acquisitions, we recognized $44,163,000 of amortizable intangible assets (contractual rights in place). The contractual rights in place will be amortized against earnings ($43,072,000 - straight-line over a weighted-average 19.9 years and $1,080,000 - units of sales in excess of 30.0 years) and $7,385,000 will be deductible for income tax purposes over 15 years. Of the $43,990,000 of goodwill recognized, $4,863,000 will be deductible for income tax purposes over 15 years, and $31,721,000 represents the balance of deferred tax liabilities generated from carrying over the seller’s tax basis in the assets acquired.

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

California — aggregates and ready-mixed concrete operations

Florida — aggregates operations

Georgia — aggregates operations

South Carolina — aggregates operations

Tennessee — asphalt mix and construction paving operations

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.

Additionally, during 2017 we acquired the following operations 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 — asphalt mix operations

Illinois — aggregates operations

New Mexico — aggregates operations

Tennessee — aggregates operations

Virginia — aggregates and ready-mixed concrete operations

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 $28,247,000 of goodwill recognized, all will be deductible for income tax purposes over 15 years.

DIVESTITURES AND PENDING DIVESTITURES

In 2019, we sold:

First quarter — two aggregates operations in Georgia and reversed a contingent payable related to the fourth quarter 2017 Department of Justice required divestiture of former Aggregates USA operations, resulting in a pretax gain of $4,064,000

In 2018, we sold:

First quarter — ready-mixed concrete operations in Georgia resulting in a pretax gain of $2,929,000 (we retained all real property which is leased to the buyer, and obtained a long-term aggregates supply agreement)

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 asphalt mix operations 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

No assets met the criteria for held for sale at December 31, 2019, 2018 or 2017.