Knife River Corp
For the period ended Dec 31, 2023. Filed Feb 27, 2024.
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FY2023 · Filed Feb 27, 2024
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6. Goodwill and Other Intangible Assets
Note 6 –Goodwill and Other Intangible Assets
In the fourth quarter of 2023, in connection with the reorganization of the Company’s reporting structure, a portion of the Pacific reporting unit’s businesses were reorganized into the Energy Services reporting unit. As a result of the reorganization, the Company reallocated $5.7 million of the goodwill balance associated with the Pacific reporting unit to the Energy Services reporting unit based on the relative fair values of the Pacific reporting unit components. The estimated fair values were determined using the income approach. The Company reassessed the goodwill in connection with the reorganization and determined there was no impairment.
The changes in the carrying amount of goodwill were as follows:
| Balance at January 1, 2023 | Goodwill Acquired During the Year | Measurement Period Adjustments | Reallocation of Goodwill | Balance at December 31, 2023 | |
|---|---|---|---|---|---|
| (In thousands) | |||||
| Pacific | $38,339 | $— | $(62) | $(5,656) | $32,621 |
| Northwest | 90,978 | — | — | — | 90,978 |
| Mountain | 26,816 | — | — | — | 26,816 |
| North Central | 75,879 | — | — | — | 75,879 |
| South | 38,708 | — | — | — | 38,708 |
| Energy Services | 3,820 | — | — | 5,656 | 9,476 |
| Total | $274,540 | $— | $(62) | $— | $274,478 |
| Balance at January 1, 2022 | Goodwill Acquired During the Year | Measurement Period Adjustments | Reallocation of Goodwill | Balance at December 31, 2022 | |
|---|---|---|---|---|---|
| (In thousands) | |||||
| Pacific | $38,101 | $238 | $— | $— | $38,339 |
| Northwest | 93,102 | — | (2,124) | — | 90,978 |
| Mountain | 26,816 | — | — | — | 26,816 |
| North Central | 75,879 | — | — | — | 75,879 |
| South | 38,708 | — | — | — | 38,708 |
| Energy Services | 3,820 | — | — | — | 3,820 |
| Total | $276,426 | $238 | $(2,124) | $— | $274,540 |
Other amortizable intangible assets at December 31, were as follows:
| Average Useful Life In Years | 2023 | 2022 | |
|---|---|---|---|
| (In thousands) | |||
| Customer relationships | 2-7 | $18,540 | $18,540 |
| Less accumulated amortization | 9,102 | 7,367 | |
| 9,438 | 11,173 | ||
| Noncompete agreements | 1-3 | 4,039 | 4,039 |
| Less accumulated amortization | 3,473 | 2,985 | |
| 566 | 1,054 | ||
| Other | 15-20 | 2,479 | 5,279 |
| Less accumulated amortization | 1,662 | 4,076 | |
| 817 | 1,203 | ||
| Total | $10,821 | $13,430 | |
Amortization expense for amortizable intangible assets for the years ended December 31, 2023, 2022 and 2021, was $2.6 million, $2.8 million and $2.6 million, respectively. Estimated amortization expense for identifiable intangible assets as of December 31, 2023, was:
| 2024 | 2025 | 2026 | 2027 | 2028 | Thereafter | |
|---|---|---|---|---|---|---|
| (In thousands) | ||||||
| Amortization expense | $2,228 | $1,919 | $1,739 | $1,716 | $1,672 | $1,547 |
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