DEFERRED REVENUE

6 Months Ended

Jun. 30, 2017

Note 4: deferred revenue

In 2013 and 2012, we sold a percentage interest in future production structured as volumetric production payments (VPPs).

The VPPs:

relate to eight quarries in Georgia and South Carolina

provide the purchaser solely with a nonoperating percentage interest in the subject quarries’ future production from aggregates reserves

are both time and volume limited

contain no minimum annual or cumulative guarantees for production or sales volume, nor minimum sales price

Our consolidated total revenues exclude the sales of aggregates owned by the VPP purchaser.

We received net cash proceeds from the sale of the VPPs of $153,282,000 and $73,644,000 for the 2013 and 2012 transactions, respectively. These proceeds were recorded as deferred revenue on the balance sheet and are amortized to revenue on a unit-of-sales basis over the terms of the VPPs (expected to be approximately 25 years, limited by volume rather than time).

Reconciliation of the deferred revenue balances (current and noncurrent) is as follows:



	Three Months Ended		Six Months Ended
	June 30		June 30
in thousands	2017	2016	2017	2016
Deferred Revenue
Balance at beginning of period	$ 204,819	$ 212,292	$ 206,468	$ 214,060
Amortization of deferred revenue	(1,719)	(2,092)	(3,368)	(3,860)
Balance at end of period	$ 203,100	$ 210,200	$ 203,100	$ 210,200

Based on expected sales from the specified quarries, we expect to recognize approximately $8,080,000 of deferred revenue as income during the 12-month period ending June 30, 2018 (reflected in other current liabilities in our 2017 Condensed Consolidated Balance Sheet).