DEFERRED REVENUE

6 Months Ended

Jun. 30, 2013

Note 4: deferred revenue

In the fourth quarter of 2012, we sold a percentage of the future production from aggregates reserves at certain owned and leased quarries. The sale was structured as a volumetric production payment (VPP) for which we received net cash proceeds of $73,583,000. The proceeds were recorded as deferred revenue and are being amortized on a unit-of-sales basis to revenue over the term of the VPP. During the first quarter of 2013, we received additional cash proceeds of $62,000 related to this transaction. We recognized deferred revenue related to this transaction as follows:



	Three Months Ended		Six Months Ended
		June 30		June 30
in thousands	2013	2012	2013	2012
Deferred revenue recognition	$ 324	$ 0	$ 576	$ 0

Based on projected sales, we anticipate recognizing a range of $1,000,000 to $1,500,000 of deferred revenue during the 12-month period ending June 30, 2014.

The key terms of the VPP are:

§	the purchaser has a nonoperating interest in reserves entitling them to a specified percentage (the percentage) of future production

terminates at the earlier to occur of December 31, 2052 or the sale of 143.2 million tons of aggregates from the specified quarries subject to the VPP (as such, the future production in which the purchaser owns the percentage could be less than 143.2 million tons); based on historical and projected volumes from the specified quarries, it is expected that 143.2 million tons will be sold prior to 2052

the purchaser's percentage of the maximum 143.2 million tons of future production is estimated, based on current sales volume projection, to be 10.5% (approximately 15 million tons); the actual percentage received by the purchaser through the term of the transaction may vary based on when the maximum 143.2 million tons is sold

§	there is no minimum annual or cumulative production or sales volume, nor any minimum sales price required

§	the purchaser has the right to take its percentage of future production in physical product, or receive the cash proceeds from the sale of its percentage of future production under the terms of a separate marketing agreement

§	the purchaser's percentage of future production is conveyed free and clear of future costs of production and sales

§	we retain full operational and marketing control of the specified quarries

§	we retain fee simple interest in the land as well as any residual values that may be realized upon the conclusion of mining