Business acquisition, total assets acquired

[Table of Contents](#if5e2d1c13bd74a82945554c9f702e646_7) D.R. HORTON, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)June 30, 2022Business Acquisition  
In April 2022, the Company and Vidler Water Resources, Inc. (Vidler) entered into a definitive merger agreement pursuant to which the Company would acquire all of the outstanding shares of Vidler for $15.75 per share in an all-cash transaction. Under the terms of the merger agreement, in May 2022, the Company completed a tender offer and acquired all of the outstanding shares for a total purchase price of $290.5 million.  
The Company’s preliminary allocation of the purchase price to the assets, liabilities and noncontrolling interest acquired is as follows (in millions):  


|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
| Cash and cash equivalents |  | $ | 19.0  |  |
| Property and equipment |  | 30.1  |  |
| Deferred income taxes, net of valuation allowance of $16.4 million |  | 16.3  |  |
| Intangible and other assets (1) |  | 251.0  |  |
| Total assets |  | 316.4  |  |
|  |  |  |
| Other liabilities |  | 7.7  |  |
| Total liabilities |  | 7.7  |  |
|  |  |  |
| Noncontrolling interest |  | 18.2  |  |
| Net assets acquired |  | $ | 290.5  |  |

  
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(1)Intangible and other assets consist primarily of water rights and are included in other assets in the Company’s consolidated financial statements.  
The purchase price allocation presented above is preliminary and is subject to revision as additional information becomes available and more detailed analyses are completed. The Company expects the allocation to be finalized during the fourth quarter of fiscal 2022.   
Pending Accounting Standards  
In March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04, “Reference Rate Reform,” which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform - Scope,” which clarified the scope and application of the original guidance. The Company will adopt these standards when LIBOR is discontinued and does not expect them to have a material impact on its consolidated financial statements or related disclosures.  
In October 2021, the FASB issued ASU 2021-08, which requires application of ASC 606, “Revenue from Contracts with Customers,” to recognize and measure contract assets and liabilities from contracts with customers acquired in a business combination. ASU 2021-08 creates an exception to the general recognition and measurement principle in ASC 805 and will result in recognition of contract assets and contract liabilities consistent with those recorded by the acquiree immediately before the acquisition date. The guidance is effective for the Company beginning October 1, 2023, with early adoption permitted. The Company is currently evaluating the impact of this guidance, and it is not expected to have a material impact on its consolidated financial position, results of operations or cash flows.  
  
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