The FASB has issued SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities – an Amend- ment of FASB Statement No. 133.” This statement amends SFAS No. 133 for specified transactions. SFAS No. 138 is effective concurrently with SFAS No. 133 if SFAS No. 133 is not adopted prior to June 15, 2000. If SFAS No. 133 is adopted prior to June 15, 2000, SFAS No. 138 is effective for quarters beginning after June 15, 2000. The Company believes that the effect of adoption of SFAS No. 138 will not have a material effect on the Company’s financial statements. In June 1999, the Company acquired all of the outstanding common stock of North American Pipe, Inc. of Saginaw, Texas (“Saginaw”). Saginaw operates two facilities, which produce custom fabricated piping assemblies. The purchase price of $4.5 million has been allocated to the underlying assets and liabilities, including certain debt, of Saginaw.  In June 1998, the Company acquired from L.B. Foster Company the plant, equipment, leasehold and contract rights and miscella- neous assets of its Fosterweld Division manufacturing facility (the “Parkersburg Facility”) for $5.3 million, and acquired the Parkersburg Facility’s inventory net of assumed accounts payable. The Parkersburg Facility is employed in the manufacture of large diameter, high pres- sure steel pipe products.  In March 1998, the Company acquired all of the outstanding capital stock of Southwestern Pipe, Inc. (“Southwestern”) and P&H Tube Corporation (“P&H”) for $40.1 million. The excess of the acquisition cost over the fair value of the net assets acquired of $23.7 mil- lion is being amortized over 40 years using the straight-line method. The principal business of both Southwestern and P&H is the manufacture and sale of structural and mechanical tubing products. The above acquisitions were accounted for using the purchase method of accounting, which requires that the purchase price be allo- cated to the net assets acquired based upon the relative fair value of assets acquired. The accompanying consolidated financial statements include the results of operations from the dates of acquisition. The pro forma net sales and results of operation for the acquisitions, had the acquisitions occurred at the beginning of 1998, are not significant, and accordingly, have not been provided. Costs and estimated earnings in excess of billings on uncompleted contracts represents revenue earned under the percentage of com- pletion method but not billable based on the terms of the contracts. These amounts are billed based on the terms of the contracts, which include achievement of milestones, partial shipments or completion of the contracts. 5. Property and Equipment: 4. Inventories: 3. Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts: 2. Acquisitions: December 31, 2000 1999 Costs incurred on uncompleted contracts $ 129,091 $ 79,361 Estimated earnings 39,468 30,561 168,559 109,922 Less billings to date (121,309) (87,533) $ 47,250 $ 22,389 December 31, 2000 1999 Finished goods $ 35,417 $ 18,107 Raw materials 22,070 24,156 Materials and supplies 2,541 2,099 $ 60,028 $ 44,362 December 31, 2000 1999 Land and improvements $ 13,706 $ 13,550 Buildings 28,522 23,912 Equipment 76,872 86,964 Property and equipment under capital leases 4,427 2,413 Construction in progress 3,228 4,790 126,755 131,629 Less accumulated depreciation and amortization (35,759) (30,389) Property and equipment, net $ 90,996 $ 101,240 Northwest Pipe Company | 19