ACQUISITIONS AND DIVESTITURES

12 Months Ended

Dec. 31, 2022

ACQUISITIONS AND DIVESTITURES [Abstract]

ACQUISITIONS AND DIVESTITURES

NOTE 19: ACQUISITIONS AND DIVESTITURES

BUSINESS ACQUISITIONS

2022 business acquisitions — During 2022, we purchased the following operations for total consideration of $594.6 million ($529.2 million cash and $65.4 million noncash):

California — eight aggregates, four asphalt mix and seven ready-mixed concrete operations

Texas — five aggregates operations

Virginia — four ready-mixed concrete operations and two idle ready-mixed concrete sites

Honduras — an aggregates operation serving limited markets along the Gulf Coast

The 2022 acquisitions listed above are reported in our consolidated financial statements as of their respective acquisition dates. None of these acquisitions were material to our results of operations either individually or collectively, and acquisition related expenses were immaterial. The fair value of consideration transferred for these 2022 acquisitions and the preliminary amounts (pending final appraisals of intangible assets and property, plant & equipment and related deferred taxes) of assets acquired and liabilities assumed are summarized below:

	December 31
in millions	2022
Fair Value of Purchase Consideration
Cash	$        529.2
Payable to seller	65.4
Total fair value of purchase consideration	$        594.6
Identifiable Assets Acquired and Liabilities Assumed
Accounts and notes receivable, net	$          28.0
Inventories	15.4
Other current assets	2.1
Property, plant & equipment	498.6
Intangible assets
Contractual rights in place	72.3
Deferred income taxes, net	(12.5)
Other liabilities assumed	(21.8)
Net identifiable assets acquired	$        582.1
Goodwill	$          12.5

As a result of the 2022 acquisitions, we recognized $72.3 million of amortizable intangible assets and $12.5 million of goodwill. The amortizable intangible assets will be amortized against earnings over a weighted-average of 15 years and will be deductible for income tax purposes over 15 years. The $12.5 million of goodwill recognized represents deferred tax liabilities generated from carrying over the seller’s tax basis in the assets acquired. None of the goodwill recognized will be deductible for income tax purposes.

2021 business acquisitions — On August 26, 2021, we purchased the following operations in connection with the acquisition of U.S. Concrete, Inc. for total consideration of $1,634.5 million, net of cash acquired:

British Columbia, Canada — aggregates and aggregates blue-water transportation operations

California — aggregates distribution terminals and concrete operations

New Jersey — aggregates and concrete operations

New York — aggregates and concrete operations

Oklahoma — aggregates and concrete operations

Pennsylvania — concrete operations

Texas — aggregates and concrete operations

U.S. Virgin Islands — aggregates and concrete operations

Washington, D.C. — concrete operations

The amounts of total revenues and net earnings attributable to Vulcan from the U.S. Concrete acquisition are included in our Consolidated Statement of Comprehensive Income for the year ended December 31, 2021 as follows:

in millions	2021
Actual Results
Total revenues	$        466.3
Net loss attributable to Vulcan	(19.7)

The unaudited pro forma financial information in the table below summarizes the results of operations for Vulcan and U.S. Concrete as if they were combined as of January 1, 2020. The pro forma financial information does not reflect any cost savings, operating efficiencies or synergies as a result of this combination. Consistent with the assumed acquisition date of January 1, 2020, the pro forma information excludes transactions between Vulcan and U.S. Concrete. The following pro forma information also includes: 1) charges directly attributable to the acquisition, 2) cost of sales related to the sale of acquired inventory marked up to fair value, 3) depreciation, depletion, amortization & accretion expense related to the mark up to fair value of acquired assets, and 4) interest expense and debt retirement costs reflecting the new debt structure:

in millions	2021	2020
Supplemental Pro Forma Results
Total revenues	$      6,361.5	$      6,182.8
Net earnings attributable to Vulcan	688.6	551.9

The unaudited pro forma results above may not be indicative of the results that would have been obtained had this acquisition occurred at the beginning of 2020, nor does it intend to be a projection of future results.

The fair value of consideration transferred for the U.S. Concrete acquisition and the amounts of assets acquired and liabilities assumed are summarized below:

	December 31
in millions	2022
Fair Value of Purchase Consideration
Cash 1	$      1,634.5
Total fair value of purchase consideration	$      1,634.5
Identifiable Assets Acquired and Liabilities Assumed
Accounts and notes receivable, net	$         235.6
Inventories	80.6
Other current assets	8.7
Property, plant & equipment	1,086.2
Operating lease right-of-use assets	217.6
Intangible assets
Contractual rights in place	622.6
Other intangibles	60.3
Other noncurrent assets	5.3
Deferred income taxes, net	(226.1)
Debt assumed	(443.7)
Other liabilities assumed	(546.2)
Noncontrolling interest	(22.3)
Net identifiable assets acquired	$      1,078.6
Goodwill	$         555.9

¹ Includes $1,268.5 million paid to acquire all issued and outstanding shares of U.S. Concrete common stock and $384.4 million of U.S. Concrete obligations paid on the acquisition date, less $18.4 million of cash acquired.

Additionally, during 2021 we purchased concrete operations in California for total consideration of $4.9 million.

As a collective result of the 2021 acquisitions, we recognized $685.5 million of amortizable intangible assets and $555.9 million of goodwill, representing an increase in goodwill of $31.3 million from December 31, 2021 (see Note 18 for subsequent impairment of a portion of this goodwill). The amortizable intangible assets will be amortized against earnings over a weighted-average period in excess of 15 years. The $555.9 million of goodwill recognized represents deferred tax liabilities generated from carrying over the seller’s tax basis in the assets acquired and synergies expected to be realized from acquiring an established business with assets that have been assembled over a long period of time — the collection of those assets combined with our assets can earn a higher rate of return than either individually. Of the total goodwill recognized, $108.5 million will be deductible for income tax purposes.

2020 business acquisitions — During 2020, we purchased the following operations for total consideration of $73.4 million ($43.2 million cash and $30.2 million noncash):

Business to support our aggregates operations across most of our footprint

Texas — asphalt mix and recycle operations

The 2020 acquisitions listed above are reported in our consolidated financial statements as of their respective acquisition dates. None of these acquisitions were material to our results of operations or financial position either individually or collectively.

As a result of the 2020 acquisitions, we recognized $65.5 million of amortizable intangible assets and $5.1 million of goodwill. The amortizable intangible assets will be amortized against earnings ($65.5 million - straight-line basis over a weighted-average 20.0 years) and $25.7 million will be deductible for income tax purposes over 15 years. The goodwill represents the balance of deferred tax liabilities generated from carrying over the seller’s tax basis in the assets acquired and is not deductible for income tax purposes.

DIVESTITURES AND PENDING DIVESTITURES

In 2022, we sold:

Fourth quarter — concrete operations in New Jersey, New York and Pennsylvania resulting in a third quarter impairment charge of $67.8 million and a fourth quarter loss on sale of $17.4 million (the assets were written down to fair value less cost to sell in the third quarter – see Note 1 “Summary of Significant Accounting Policies” under the caption Fair Value Measurements and Note 18 “Goodwill and Intangible Assets” )

Third quarter — excess real estate in Southern California resulting in a pretax gain of $23.5 million

In 2021, we sold:

First quarter — a reclaimed quarry in Southern California resulting in a pretax gain of $114.7 million (net of a $12.9 million contingency and other directly related obligations)

In 2020, we sold:

Fourth quarter — a Virginia ready-mixed concrete business, resulting in an immaterial loss. We retained all real property which is being leased to the buyer and obtained a 20-year aggregates supply agreement

Second quarter — our New Mexico ready-mixed concrete business, resulting in an immaterial gain. We retained the concrete plants and mobile fleet and are leasing those assets to the buyer. Additionally, we obtained a 20-year aggregates supply agreement

No material assets met the criteria for held for sale at December 31, 2022, 2021 or 2020.