Acquisitions

12 Months Ended

Dec. 31, 2018

Business Combination Disclosure [Text Block]

Acquisitions

During 2018, the Company completed four acquisitions. The results of the acquired businesses have been included in the Company's construction materials and contracting segment and Consolidated Financial Statements beginning on the acquisition dates. Pro forma financial amounts reflecting the effects of the above acquisitions are not presented, as such acquisitions were not material, both individually and in the aggregate, to the Company's financial position or results of operations. The following is a listing of the acquisitions made during 2018:


•	In April 2018, the Company acquired Teevin & Fischer Quarry, LLC, an aggregate producer that provides crushed rock and gravel to construction and retail customers in Oregon.


•	In June 2018, the Company acquired Tri-City Paving, Inc., a general contractor and aggregate, asphalt and ready-mixed concrete supplier in Minnesota.


•	In July 2018, the Company acquired Molalla Redi-Mix and Rock Products, Inc., a producer of ready-mixed concrete in Oregon.


•	In October 2018, the Company acquired Sweetman Construction Company, a provider of aggregates, asphalt and ready-mixed concrete in South Dakota.

As of December 31, 2018, the gross aggregate consideration for these acquisitions, which were all accounted for as business combinations, was $168.1 million in cash, subject to certain adjustments, and 721,610 shares of common stock with a market value of $20.3 million as of the respective acquisition date. Due to the holding period restriction on the common stock, the share consideration has been discounted to a fair value of approximately $18.2 million, as reflected in the Company's financial statements. In addition to the issuance of the Company's equity securities, the Company issued debt to finance these acquisitions. As of December 31, 2018, costs incurred for acquisitions were $1.5 million and included in operation and maintenance expense on the Consolidated Statements of Income. The acquisitions are subject to customary adjustments based on, among other things, the amount of cash, debt and working capital in the businesses as of the closing dates.

The Company preliminarily allocated the purchase price of the acquisitions to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition dates and are considered provisional until final fair values are determined or the measurement period has passed. The Company expects to record adjustments as it accumulates the information needed to estimate the fair value of assets acquired and liabilities assumed, including working capital balances, estimated fair value of identifiable intangible assets, property, plant and equipment, total consideration and goodwill. The excess of the purchase price over the aggregate fair values was recorded as goodwill. The Company calculated the fair value of the assets acquired using the market or cost approach (or a combination of both). Fair values for some of the assets were determined based on Level 3 inputs including estimated future cash flows, discount rates, growth rates, sales projections, retention rates and terminal values, all of which require significant management judgment and are susceptible to change. The final fair value of the net assets acquired may result in adjustments to the assets and liabilities, including goodwill, and will be made as soon as practical, but no later than one year from the respective acquisition dates. However, any subsequent measurement period adjustments are not expected to have a material impact on the Company's results of operations. The discount rate used in calculating the fair value of the common stock issued was determined by a Black-Scholes-Merton model. The model used Level 2 inputs including risk-free interest rate, volatility range and dividend yield.

The aggregate total consideration for the acquisitions and the preliminary amounts allocated to the assets acquired and liabilities assumed based on the estimated fair values as of the respective acquisition dates were as follows:



	2018 Acquisitions
	(In thousands)
Assets
Current assets:
Receivables, net	$	18,984
Inventories	10,329
Other current assets	515
Total current assets	29,828
Property, plant and equipment	131,766
Deferred charges and other assets:
Goodwill	33,131
Other intangible assets, net	8,227
Other	927
Total deferred charges and other assets	42,285
Total assets acquired	$	203,879
Liabilities
Current liabilities	$	11,122
Deferred credits and other liabilities:
Asset retirement obligation	914
Deferred income taxes	5,565
Total deferred credits and other liabilities	6,479
Total liabilities assumed	$	17,601
Total consideration (fair value)	$	186,278