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Acquisitions | 9 Months Ended
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Sep. 30, 2017
Business Combinations [Abstract] |
Acquisitions [Text Block] | ACQUISITIONS The following acquisitions are consistent with ALLETE’s stated strategy of investing in energy infrastructure and related services businesses to complement its regulated businesses, balance exposure to business cycles and changing demand, and provide potential long-term earnings growth. The pro forma impact of the following acquisitions was not significant, either individually or in the aggregate, to the results of the Company for the nine months ended September 30, 2017, and 2016. 2017 Activity. Tonka Water. On September 1, 2017, U.S. Water Services acquired 100 percent of Tonka Water. Total consideration for the transaction was $19.4 million, including a preliminary working capital adjustment. Consideration of $19.0 million was paid in cash on the acquisition date with an estimated payment of $0.4 million to be made in the fourth quarter of 2017 with the finalization of the working capital adjustment. Tonka Water is a supplier of municipal and industrial water treatment systems and will expand U.S. Water Services’ geographic and customer markets. The acquisition was accounted for as a business combination and the purchase price was allocated based on the preliminary estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition, as shown in the following table. The allocation of the purchase price is subject to judgment and the preliminary estimated fair value of the assets acquired and the liabilities assumed may be adjusted when the valuation analysis is complete in subsequent periods. Preliminary estimates subject to adjustment in subsequent periods relate primarily to working capital; subsequent adjustments could impact the amount of goodwill recorded. Fair value measurements were valued primarily using the discounted cash flow method and replacement cost basis. NOTE 3. ACQUISITIONS (Continued) 2017 Activity (Continued)
Millions |
Assets Acquired |
Cash and Cash Equivalents |  | $1.6 |
Accounts Receivable | 5.1 |
Other Current Assets | 4.4 |
Trade Names (a) | 0.9 |
Goodwill (a)(b) | 18.5 |
Other Non-Current Assets | 0.2 |
Total Assets Acquired |  | $30.7 |
Liabilities Assumed |
Current Liabilities |  | $10.6 |
Non-Current Liabilities | 0.7 |
Total Liabilities Assumed |  | $11.3 |
Net Identifiable Assets Acquired |  | $19.4 |
(a) Presented within Goodwill and Intangible Assets – Net on the Consolidated Balance Sheet. (See Note 4. Goodwill and Intangible Assets.)
(b) | Recognized goodwill is attributable to the assembled workforce and anticipated synergies. For tax purposes, the purchase price allocation resulted in $4.1 million of deductible goodwill.
Acquisition-related costs were immaterial, expensed as incurred during 2017 and recorded in Operating and Maintenance on the Consolidated Statement of Income. 2016 Activity. Acquisition of Non-Controlling Interest. In April 2016, ALLETE Clean Energy acquired the non-controlling interest in the limited liability company that owns the Condon wind energy facility for $8.0 million. This transaction was accounted for as an equity transaction, and no gain or loss was recognized in net income or other comprehensive income. As a result of the acquisition, the Condon wind energy facility became a wholly-owned subsidiary of ALLETE Clean Energy. WEST. In October 2016, U.S. Water Services acquired 100 percent of Water & Energy Systems Technology of Nevada, Inc. (WEST). Total consideration for the transaction was $6.7 million. Consideration of $5.9 million was paid in cash on the acquisition date, working capital adjustments of $0.2 million were paid in the first six months of 2017 and a $0.6 million payment is due in April 2018. WEST is an integrated water management company and was acquired to expand U.S. Water Services’ regional footprint in the Southwestern United States. The acquisition was accounted for as a business combination and the purchase price was allocated based on the estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition. The purchase price accounting, which was finalized in the second quarter of 2017, is shown in the following table. Fair value measurements were valued primarily using the discounted cash flow method and replacement cost basis. NOTE 3. ACQUISITIONS (Continued) 2016 Activity (Continued)
Millions |
Assets Acquired |
Cash and Cash Equivalents |  | $0.1 |
Other Current Assets | 1.0 |
Customer Relationships (a) | 2.8 |
Goodwill (a)(b) | 4.2 |
Other Non-Current Assets | 0.1 |
Total Assets Acquired |  | $8.2 |
Liabilities Assumed |
Current Liabilities |  | $0.3 |
Non-Current Liabilities | 1.2 |
Total Liabilities Assumed |  | $1.5 |
Net Identifiable Assets Acquired |  | $6.7 |
(a) | Presented within Goodwill and Intangible Assets – Net on the Consolidated Balance Sheet. (See Note 4. Goodwill and Intangible Assets.)
(b) | For tax purposes, the purchase price allocation resulted in no allocation to goodwill.
Acquisition-related costs were immaterial, expensed as incurred during 2016 and recorded in Operating and Maintenance on the Consolidated Statement of Income.

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- 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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- References No definition available. + Details
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