ACQUISITIONS
 12 Months Ended
Dec. 31, 2015
Business Combinations [Abstract]  
ACQUISITIONS
ACQUISITIONS
CMQR
The Company, through its subsidiaries, acquired certain assets and assumed certain liabilities of Montreal, Maine and Atlantic Railway Ltd. (“MM&A-U.S.”) and Montreal, Maine and Atlantic Canada Co (“MM&A-Canada”) for an aggregate purchase price of approximately $15.2 million, including assumed liabilities of approximately $3.2 million. The acquisitions were accounted for as business combinations pursuant to ASC 805, Business Combinations ("ASC 805") and the results of operations of the acquired businesses of MM&A-U.S. and MM&A-Canada have been included in the consolidated financial statements of the Company since their respective dates of acquisition. The closing of MM&A-U.S. and MM&A-Canada occurred on May 15, 2014 and June 30, 2014, respectively. Subsequent to the acquisitions, the acquired businesses were renamed as CMQR. CMQR is headquartered in Maine and owns and operates approximately 500 miles of track in the US and Canada. CMQR is reported within the Railroad segment. The Company viewed the acquisitions of MM&A-U.S. and MM&A-Canada as an opportunity to gain entry into the railroad industry.
Subsequent to the acquisition, in the year ended December 31, 2014, measurement period adjustments as of the acquisition date were made to the valuation of fixed assets acquired and employee and environmental liabilities assumed consisting of an increase to fixed assets of $679, an increase to assumed employee liabilities of $232, an increase to assumed environmental liabilities of $680, and additional goodwill recorded of $233. The measurement period adjustments impacted depreciation expense by $30 in the year ended December 31, 2014. There were no additional measurement period adjustments during the year ended December 31, 2015.
The property, plant and equipment acquired in connection with CMQR is being depreciated based on estimated remaining useful lives from the date of acquisition, which are 4 years for buildings, 2-5 years for track and track related assets, 4-6 years for railroad equipment, 2 years for vehicles and 5 years for freight cars and locomotives, as all of the acquired assets were near the end of their useful lives at the time of acquisition.
In connection with the purchase, the Company incurred general and administrative expenses and employee severance expenses of approximately $392, included within Operating Expenses, in the Consolidated Statement of Operations for the year ended December 31, 2014. The goodwill recognized is comprised primarily of an assembled workforce and is deductible for tax purposes.
JEFFERSON TERMINAL
The Company, through its subsidiaries, acquired certain assets and assumed certain liabilities of Jefferson Refinery, LLC, Port of Beaumont Petroleum Transload Terminal I, LLC, and Port of Beaumont Petroleum Transload Terminal II, LLC (collectively “Jefferson Terminal”). Jefferson Terminal is comprised of complementary energy logistics assets and is headquartered in The Woodlands, Texas. Its principal operations are to engage in the business of terminalling, storage, throughput and transloading of crude oil and petroleum products. Prior to the acquisition, a subsidiary of the Company had several term loan agreements with Jefferson Refinery, LLC (“Pre-Existing Debt Relationships”) of $97.6 million. The acquisition of Jefferson Terminal was consummated on August 27, 2014. The Company viewed the acquisition of Jefferson Terminal as an opportunity to gain entry into this industry.
Jefferson Terminal was purchased for an aggregate purchase price of approximately $608.3 million, including assumed liabilities of $522.5 million (of which $97.6 million relates to Pre-Existing Debt Relationships) and equity consideration of $38.2 million. The Company purchased a 60% interest in Jefferson Terminal with the remaining 40% interest in Jefferson Terminal owned by a portion of the retaining shareholders and a private equity fund sponsored by Fortress, each holding an interest of approximately 20% at the acquisition date and accounted for as non-controlling interests in the accompanying consolidated financial statements. In connection with the acquisition, a $100 million loan was also obtained (Note 9).
The acquisition was accounted for as a business combination under ASC 805 and the results of operations of the acquired business of Jefferson Terminal have been included in the consolidated financial statements since the date of acquisition. The goodwill recognized is attributable to strategic opportunities and expected future cash flows of the business and approximately $45 million of goodwill is expected to be deductible by a subsidiary of the Company for tax purposes. Property, plant and equipment acquired in connection with Jefferson Terminal is being depreciated based on estimated remaining useful lives from the date of acquisition.
Subsequent to the acquisition, in the year ended December 31, 2015, measurement period adjustments as of the acquisition date were made to decrease construction in progress within property, plant, and equipment, net by $947, increase intangible assets, net by $128, increase goodwill by $1,358, increase accounts payable and accrued liabilities assumed by $390 and increase other liabilities assumed by $149.

The fair values assigned to acquired assets and assumed liabilities of CMQR and Jefferson Terminal at their respective dates of acquisition are as follows:
 
 
 
CMQR
 
Jefferson
Terminal
Assets:
 
 
 
 
Restricted cash
 
—

 
190,811

Land and site improvements
 
5,484

 
9,573

Track
 
4,952

 
—

Buildings and improvements
 
136

 
2,139

Crude oil terminal machinery and equipment
 
—

 
47,286

Railroad Equipment
 
713

 
—

Furniture and fixtures
 
—

 
317

Computer hardware and software
 
—

 
34

Turnout and other track materials
 
1,415

 
—

Vehicles
 
320

 
258

Railcars and locomotives
 
1,283

 
—

Construction in progress
 
—

 
85,276

Prepaids and other deposits
 
103

 
6,102

Tendered bonds
 
—

 
115,000

Customer lists and customer contracts
 
225

 
35,513

Goodwill
 
593

 
115,991

Total assets
 
15,224

 
608,300

 
 
 
 
 
Liabilities:
 
 
 
 
Employee-related liabilities
 
(1,119
)
 
—

Environmental remediation liabilities
 
(1,333
)
 
—

Real estate taxes
 
(714
)
 
—

Accrued expenses
 
—

 
(56,540
)
Term loan
 
—

 
(93,995
)
Bonds Payable
 
—

 
(348,788
)
Note Payable
 
—

 
(21,297
)
Other liabilities
 
—

 
(1,902
)
Total liabilities
 
(3,166
)
 
(522,522
)
Net assets acquired
 
$
12,058

 
$
85,778

As of December 31, 2014, goodwill additions of $593 and $115,991 were attributed to the Railroad and Jefferson Terminal reportable segments, respectively.
The fair values assigned to intangible assets were determined through the use of the replacement cost method and the income approach, specifically the multi-period excess earnings method. Both valuation methods rely on management’s judgments, including the cost to recreate the customer relationships, expected future cash flows resulting from existing customer relationships, customer attrition rates, contributory effects of other assets utilized in the business, and peer group cost of capital as well as other factors. The valuation of tangible assets was derived using a combination of the income approach, the market approach and the cost approach. Significant judgments used in valuing tangible assets include estimated reproduction or replacement cost, useful lives of assets and estimated selling prices. The valuation of assumed liabilities, including bonds payable, was derived using the market approach, using quoted values as available and the income approach, comparing the stated interest rate on certain credit agreements to the market interest rate. The valuation of equity interests conveyed to retaining shareholders was derived using the market approach, as agreed between the parties, representing the cash that would have been offered on an arm’s length basis, on the acquisition date.

Supplementary Pro Forma Information—The unaudited pro forma information has been derived from our historical consolidated financial statements and has been prepared to give effect to the acquisitions, assuming that the acquisitions of CMQR and Jefferson Terminal occurred on January 1, 2013. The unaudited pro forma pre-tax net income (loss) for the years ended December 31, 2014 and 2013 has been adjusted to reflect the additional depreciation and amortization that would have resulted from changes in the estimated fair value of assets and liabilities.

 
Year Ended December 31, 2014
 
Year Ended December 31, 2013
Pro Forma—CMQR
 
 
 
Revenues
$
63,528

 
$
46,100

Pre-tax net income (loss)
1,497

 
(20,830
)
Pro Forma—Jefferson Terminal
 
 
 
Revenues
$
60,577

 
$
19,530

Pre-tax net loss
(46,906
)
 
(1,543
)


Pro forma results do not include any anticipated synergies or other anticipated benefits of the acquisition. Accordingly, the unaudited pro forma financial information is not necessarily indicative or either future results of operations or results that might have been achieved had the acquisition occurred on January 1, 2013.
During the year ended December 31, 2014, for CMQR and Jefferson Terminal, the Company recognized $9,969 and $2,652, respectively, in revenues and $11,957 and $15,768, respectively, of loss before income taxes, which includes acquisition and transaction related expenses of $5,646 and $5,494, respectively, included within acquisition and transaction expenses in the Consolidated Statement of Operations.