Acquisition of Construction Services Businesses

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Acquisition of Construction Services Businesses

Note 8 – Acquisition of Construction Services Businesses

In October 2014, the Company, through its subsidiaries, completed the acquisition of three privately held, affiliated construction businesses. See the Company’s 2014 Form 10-K for additional information about this acquisition.

Assets acquired and liabilities assumed in the transaction were recorded, generally, at their acquisition date fair values. Transaction costs associated with the acquisition were expensed as incurred. The Company’s allocation of the purchase price was based on an evaluation of the appropriate fair values and represented management’s best estimate based on available data (including market data, data regarding customers of the acquired businesses, terms of acquisition-related agreements, analysis of historical and projected results, and other types of data). The analysis included the impacts of differences between Accounting Standards for Private Enterprises in Canada and U. S. GAAP applicable to public companies, as well as consideration of types of intangibles that were acquired, including non-competition agreements, customer relationships, trade names, and work backlog. The final purchase accounting has not yet been completed. Further refinement could occur; however, no material changes are expected. The revised preliminary estimated fair values of assets acquired and liabilities assumed as of October 1, 2014, are as follows (in millions of dollars):

	Acquisition Date		Measurement Period Adjustments			Revised Acquisition Date
Cash, cash equivalents, and restricted cash	$	3	$	—		$	3
Contracts receivable and other receivables		62		—			62
Property, plant and equipment		17		—			17
Other assets		17		(2	)		15
Intangible assets		52		—			52
Goodwill		130		1			131
Total assets acquired		281		(1	)		280
Current liabilities		39		1			40
Deferred income tax - long-term		17		—			17
Other long-term liabilities		4		—			4
Net assets acquired	$	221	$	(2	)	$	219

The Company incurred and expensed acquisition costs of $5 million for the twelve months ended March 31, 2015. No acquisition costs were incurred during the three months ended March 31, 2015.

The preliminary allocation of the purchase price of Link-Line, W.S. Nicholls, and Brigadier was accounted for in accordance with the applicable accounting guidance. Goodwill, which is generally not deductible for tax purposes, consists of the value associated with the assembled workforce and consolidation of operations. The business of Brigadier was acquired via asset purchase. Therefore, the $4.9 million of tax-basis goodwill assigned to Brigadier is expected to be deductible for tax purposes. All other goodwill associated with the acquisition is not deductible for tax purposes. In the first quarter of 2015, values at the acquisition date were adjusted as reflected in the table above, with no significant overall impact to the Company’s consolidated balance sheets.