Note 20. Frascati Shops, Inc. and Tower, LLC Acquisition

On August 6, 2012, ("the acquisition date") we acquired the common stock and membership interest of Frascati Shops, Inc. ("FSI") and Tower LLC, ("Tower"), respectively. FSI and Tower own and operate a certified rail-car repair facility near the port of Mobile, Alabama. Both will continue to be used to service and repair rail-cars from third party customers as well as rail-cars that are transported via our Rail-Ferry vessels. Our acquisition of FSI and Tower presents us with a unique opportunity to backward integrate within our Rail Segment and retain revenue and profits related to the cleaning and repair of railcars while also injecting additional energy and resources into existing business relationships and assets.

The total consideration of approximately $4.5 million consisted of a $623,000 cash payment, the assumption of $3.5 million in debt, and $383,000 in miscellaneous payables. As of September 30, 2012, we discharged all debt and substantially all known accounts payable assumed in the acquisition Acquisition expenses of approximately $40,000 related to legal fees incurred in due diligence have been included under the caption "Administrative and General Expenses" in our Condensed Consolidated Statement of Income.

The transaction has been accounted for as a business combination using the acquisition method of accounting which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. While most assets and liabilities were measured at fair value, a single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. Our judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact our results of operations.

The following is a tabular summary of the amounts recognized for assets acquired and liabilities assumed as of the acquisition date:

Description	Amount Recognized as of Acquisition Date (Dollars in Thousands)
Working Capital including Cash Acquired	$	18
Inventory		231
Property, Plant, & Equipment		3,411
Identifiable Intangible Assets		490
Total Assets Acquired	$	4,150
Miscellaneous Accounts Payable	$	(383	)
Long-term Debt		(3,490	)
Deferred Tax Liability		(400	)
Total Liabilities Assumed	$	(4,273	)
Net Liabilities Assumed	$	(123	)
Total Consideration Transferred	$	(623	)
Goodwill*	$	746

* Goodwill is the sum of the consideration transferred and the net liabilities assumed and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Our above-described goodwill will not be amortized nor do we expect it to be deductible for tax purposes. Specifically, the goodwill recorded as part of the acquisition of FSI and Tower includes the following:

the expected synergies and other benefits that we believe will result from combining the operations of FSI and Tower with our existing Rail-Ferry operations.

any intangible assets that do not qualify for separate recognition, including an assembled workforce of the acquired companies, and

the anticipated higher rate of return of FSI and Tower's existing businesses as going concerns compared to the anticipated rate of return if we had acquired all of the net assets separately).