XML 26 R11.htm IDEA: XBRL DOCUMENT
v3.20.4

ACQUISITION | 9 Months Ended
--- | ---
Dec. 31, 2020
Business Combinations [Abstract] |
ACQUISITION | (D) ACQUISITION Kosmos Acquisition On March 6, 2020, we acquired the assets of Kosmos Cement Company (Kosmos), a joint venture between CEMEX S.A.B. de C.V. and Buzzi Unicem S.p.A. (the Kosmos Acquisition). The Kosmos Acquisition included (i) a cement plant located in Louisville, Kentucky, (ii) a limestone quarry located in Battletown, Kentucky, (iii) cement distribution terminals located in Indianapolis, Indiana; Cincinnati, Ohio; Pittsburgh, Pennsylvania; Charleston, West Virginia; Ceredo, West Virginia; Mt. Vernon, Indiana; and Lexington, Kentucky, and (iv) certain other properties and assets used by Kosmos in connection with the foregoing (collectively, the Kosmos Business). We assumed certain liabilities and obligations of Kosmos relating to the Kosmos Business, including contractual obligations, reclamation obligations, and various other liabilities arising out of or relating to the Kosmos Business. The Kosmos Business is included in the Cement segment of our Heavy Materials sector. Purchase Price: The purchase price of the Kosmos Acquisition was approximately $669 million. We funded the payment of the Kosmos Acquisition primarily through a Term Loan borrowing with the remainder paid using cash on hand. See Footnote (N) for a description of the loan terms. Recording of Assets Acquired and Liabilities Assumed: The Kosmos Acquisition was accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The Company engaged a third party to perform appraisal valuation services to support the Company’s preliminary estimate of the fair value of certain assets acquired in the Kosmos Acquisition. The preparation of the valuation of the assets acquired and liabilities assumed in the Kosmos Acquisition requires the use of significant assumptions and estimates. Critical estimates with respect to the valuation of property, plant, and equipment include, but are not limited to, replacement cost, condition, and estimated remaining useful lives of property and equipment. Critical estimates related to intangible and other assets include future expected cash flows, including projected revenues and expenses, customer attrition, and applicable discount rates. These estimates are based on assumptions that we believe to be reasonable. However, actual results may differ from these estimates. The following table summarizes the allocation of the purchase price to assets acquired and liabilities assumed as of December 31, 2020:
|  | (dollars in thousands) |
Inventories |  | $ | 28,568 |
Property, Plant, and Equipment |  |  | 476,698 |
Intangible Assets |  |  | 38,300 |
Lease Right-of-Use Assets |  |  | 4,478 |
Lease Obligations |  |  | (4,478 | )
Long-term Liabilities |  |  | (3,756 | )
Total Net Assets |  |  | 539,810 |
Goodwill |  |  | 129,127 |
Total Estimated Purchase Price |  | $ | 668,937 |
During the quarter ended June 30, 2020, we completed the valuation of inventories, intangible assets, lease right-of-use assets, and lease obligations, and during the quarter ended December 31, 2020, we finalized the valuation of our asset retirement obligation. These final values, which are disclosed in the above table, resulted in minor changes from the amounts disclosed in our fiscal 2020 Form 10-K. Goodwill represents the excess purchase price over the fair values of assets acquired and liabilities assumed. Goodwill was generated by the availability of co-product sales and the opportunity associated with the expansion of our Cement business to the eastern region of the United States. All of the Goodwill generated by the transaction will be deductible for income tax purposes. The following table is a summary of the fair value estimates of the identifiable intangible assets (dollars in thousands) and their weighted-average useful lives:
|  | Weighted-Average Life |  |  | Estimated Fair Value |
Permits |  |  | 20 |  |  | $ | 1,500 |
Customer Relationships |  |  | 15 |  |  |  | 35,300 |
Trade Name and Technology |  |  | 10 |  |  |  | 1,500 |
Total Intangible Assets |  |  |  |  |  | $ | 38,300 |
Actual and pro forma impact of Kosmos Acquisition: The following table presents the Revenue and Operating Earnings related to the Kosmos Acquisition that has been included in our Consolidated Statement of Earnings for the three and nine months ended December 31, 2020:
|  | For the Three Months Ended |  |  | For the Nine Months Ended |
|  | December 31, 2020 |
|  | (dollars in thousands) |
Revenue |  | $ | 45,407 |  |  | $ | 142,980 |
Operating Earnings |  | $ | 13,316 |  |  | $ | 38,286 |
Operating Earnings shown above for the three and nine months ended December 31, 2020 was affected by approximately $5.4 million and $16.1 million, respectively, related to depreciation and amortization. Additionally, Operating Earnings for the nine months ended December 31, 2020 was affected by approximately $3.7 million, related to the recording of acquired inventory at fair value. There was no effect on the quarter ended December 31, 2020, as all of the acquired inventory was sold in the fiscal first quarter. The unaudited pro forma results presented below include the effects of the Kosmos Acquisition as if it had been consummated as of April 1, 2019. The pro forma results include estimates for depreciation from fair value adjustments to acquired Property and Equipment, amortization for acquired Intangible Assets, the Inventory step-up to fair value, and interest expense associated with debt used to fund the Kosmos Acquisition. To better reflect the combined operating results, approximately $5.6 million of material nonrecurring charges directly related to the Kosmos Acquisition have been excluded from pro forma Net Income.
|  | For the Three Months Ended |  |  | For the Nine Months Ended |
|  | December 31, 2019 |
|  | Unaudited |
|  | (dollars in thousands, except per share data) |
Revenue |  | $ | 393,336 |  |  | $ | 1,225,314 |
Net Earnings from Continuing Operations |  | $ | 49,495 |  |  | $ | 183,498 |
Earnings Per Share from Continuing Operations – basic |  | $ | 1.20 |  |  | $ | 4.34 |
Earnings Per Share from Continuing Operations – diluted |  | $ | 1.20 |  |  | $ | 4.31 |
The pro forma results do not include any anticipated synergies or other expected benefits from the Kosmos Acquisition. Accordingly, the unaudited pro forma results are not necessarily indicative of either future results of operations or results that might have been achieved had the Kosmos Acquisition been consummated as of April 1, 2019.

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration