Acquisitions (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Preliminary Purchase Price Allocation

In accordance with ASC 805, the total purchase price and assumed liabilities were allocated to the net tangible and identifiable intangible assets based on their estimated fair values as of June 14, 2018 as presented in the table below (in thousands). These estimates are subject to revision, which may result in adjustments to the values presented below. We expect to finalize these amounts within 12 months from the acquisition date.

Assets
Cash	$	2,995
Receivables		70,160
Contract assets		44,947
Inventories		23,424
Other current assets		5,533
Property and equipment		187,890
Investments in affiliates		63,000
Deferred income taxes		23,185
Other noncurrent assets		17,868
Total tangible assets		439,002
Identifiable intangible assets		60,748
Liabilities
Identifiable intangible liabilities		6,700
Accounts payable		38,321
Contract liabilities		7,854
Accrued expenses and other current liabilities		47,694
Long-term debt		191,500
Other long-term liabilities		32,085
Total liabilities assumed		317,454
Total identifiable net assets acquired		175,596
Goodwill		174,244
Estimated purchase price	$	349,840

Summary of amortized intangible assets and liabilities

The following table lists amortized intangible assets and liabilities from the Layne and LiquiForce acquisitions that are included in other noncurrent assets and other long-term liabilities in the condensed consolidated balance sheets as of June 30, 2018 (in thousands):

	Weighted Average Useful Lives (Years)		Gross Value		Accumulated Amortization			Net Value
Assets
Customer relationships		7	$	34,674	$	(728	)	$	33,946
Backlog		3		11,163		(1,890	)		9,273
Developed technologies		4		9,228		(234	)		8,994
Trademarks/trade names		4		8,989		(163	)		8,826
Favorable contracts		3		4,800		(596	)		4,204
Right of ways		12		2,268		(12	)		2,256
Covenants not to compete and other		5		859		(42	)		817
Intangible assets			$	71,981	$	(3,665	)	$	68,316
Liabilities
Unfavorable contracts		2	$	6,892	$	(952	)	$	5,940
Unfavorable leases		1		300		(13	)		287
Intangible liabilities			$	7,192	$	(965	)	$	6,227

Schedule of Goodwill

Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and intangible assets. The factors that contributed to the recognition of goodwill from the acquisitions of Layne and LiquiForce include acquiring a workforce with capabilities in the global water management, construction and drilling markets, cost savings opportunities and synergies. In connection with the Layne acquisition, the assignment of goodwill to reporting units was not complete as of June 30, 2018 and is expected to be complete as of September 30, 2018. For the LiquiForce acquisition, we recorded $18.8 million within our Construction segment that was allocated to our Kenny Construction reporting unit. The goodwill from both acquisitions is not expected to be deductible for income tax purposes.

Balance at December 31, 2017	$	53,799
Layne acquisition goodwill		174,244
LiquiForce acquisition goodwill		18,838
Balance at June 30, 2018	$	246,881

Schedule of Pro Forma Financial Information

The financial information in the table below summarizes the combined results of operations of Granite and Layne, on a pro forma basis, as though the companies had been combined as of the beginning of 2017 (in thousands, except per share amounts). The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2017.

	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017
Revenue	$	909,783	$	888,176		$	1,583,073	$	1,452,067
Net income (loss)		16,834		(10,974	)		14,454		(61,709	)
Net income (loss) attributable to Granite		14,530		(13,113	)		10,389		(63,787	)
Basic net income (loss) per share attributable to common shareholders		0.32		(0.29	)		0.23		(1.41	)
Diluted net income (loss) per share attributable to common shareholders		0.30		(0.29	)		0.22		(1.41	)

Summary of Acquisition and Integration Expenses

Acquisition and integration expenses associated with both the Layne and LiquiForce acquisitions for the three and six months ended June 30, 2018 were comprised of the following (in thousands):

	Three Months Ended		Six Months Ended
	June 30, 2018		June 30, 2018
Professional services and other expenses	$	18,064	$	26,473
Severance and personnel costs		8,223		8,223
Total	$	26,287	$	34,696