REVENUES

6 Months Ended

Jun. 30, 2021

REVENUES [Abstract]

REVENUES

Note 4: revenueS

Revenues are measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Sales and other taxes we collect are recorded as liabilities until remitted and thus are excluded from revenues. Costs to obtain and fulfill contracts (primarily asphalt construction paving contracts) are immaterial and are expensed as incurred when the expected amortization period is one year or less.

Our segment total revenues by geographic market for the three and six month periods ended June 30, 2021 and 2020 are disaggregated as follows:

	Three Months Ended June 30, 2021
in thousands	Aggregates	Asphalt	Concrete	Calcium	Total
Total Revenues by Geographic Market 1
East	$     354,415	$     42,797	$     66,265	$              0	$      463,477
Gulf Coast	607,514	46,075	18,618	1,960	674,167
West	163,438	123,705	11,318	0	298,461
Segment sales	$  1,125,367	$   212,577	$     96,201	$       1,960	$   1,436,105
Intersegment sales	(75,058)	0	0	0	(75,058)
Total revenues	$  1,050,309	$   212,577	$     96,201	$       1,960	$   1,361,047

	Three Months Ended June 30, 2020
in thousands	Aggregates	Asphalt	Concrete	Calcium	Total
Total Revenues by Geographic Market 1
East	$     350,238	$     37,956	$     71,653	$              0	$      459,847
Gulf Coast	567,811	50,503	17,946	1,889	638,149
West	152,547	134,491	11,084	0	298,122
Segment sales	$  1,070,596	$   222,950	$   100,683	$       1,889	$   1,396,118
Intersegment sales	(73,543)	0	0	0	(73,543)
Total revenues	$     997,053	$   222,950	$   100,683	$       1,889	$   1,322,575

	Six Months Ended June 30, 2021
in thousands	Aggregates	Asphalt	Concrete	Calcium	Total
Total Revenues by Geographic Market 1
East	$     597,766	$     60,197	$   121,354	$              0	$      779,317
Gulf Coast	1,126,368	87,488	36,026	4,020	1,253,902
West	296,142	212,059	20,180	0	528,381
Segment sales	$  2,020,276	$   359,744	$   177,560	$       4,020	$   2,561,600
Intersegment sales	(132,209)	0	0	0	(132,209)
Total revenues	$  1,888,067	$   359,744	$   177,560	$       4,020	$   2,429,391

	Six Months Ended June 30, 2020
in thousands	Aggregates	Asphalt	Concrete	Calcium	Total
Total Revenues by Geographic Market 1
East	$     590,106	$     55,839	$   133,772	$              0	$      779,717
Gulf Coast	1,061,107	84,358	34,911	3,915	1,184,291
West	287,609	222,542	26,765	0	536,916
Segment sales	$  1,938,822	$   362,739	$   195,448	$       3,915	$   2,500,924
Intersegment sales	(129,107)	0	0	0	(129,107)
Total revenues	$  1,809,715	$   362,739	$   195,448	$       3,915	$   2,371,817

1	The geographic markets are defined by states/countries as follows:
		East market — Arkansas, Delaware, Illinois, Kentucky, Maryland, North Carolina, Pennsylvania, Tennessee, Virginia, and Washington D.C. Gulf Coast market — Alabama, Florida, Georgia, Louisiana, Mexico, Mississippi, Oklahoma, South Carolina and Texas West market — Arizona, California and New Mexico

Total revenues are primarily derived from our product sales of aggregates (crushed stone, sand and gravel, sand and other aggregates), asphalt mix and ready-mixed concrete, and include freight & delivery costs that we pass along to our customers to deliver these products. We also generate service revenues from our asphalt construction paving business and service revenues related to our aggregates business, such as landfill tipping fees. Our total service revenues were $60,778,000 (4.5% of total revenues) and $57,374,000 (4.3% of total revenues) for the three months ended June 30, 2021 and 2020, respectively, and $102,018,000 (4.2% of total revenues) and $96,938,000 (4.1% of total revenues) for the six months ended June 30, 2021 and 2020, respectively.

Our products typically are sold to private industry and not directly to governmental entities. Although approximately 45% to 55% of our aggregates shipments have historically been used in publicly-funded construction, such as highways, airports and government buildings, relatively insignificant sales are made directly to federal, state, county or municipal governments/agencies. Therefore, although reductions in state and federal funding can curtail publicly-funded construction, the vast majority of our aggregates business is not directly subject to renegotiation of profits or termination of contracts with state or federal governments.

PRODUCT REVENUES

Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs at a point in time when our aggregates, asphalt mix and ready-mixed concrete are shipped/delivered and control passes to the customer. Revenue for our products is recorded at the fixed invoice amount and payment is due by the 15^th day of the following month — we do not offer discounts for early payment.

Freight & delivery generally represents pass-through transportation we incur (including our administrative costs) and pay to third-party carriers to deliver our products to customers and are accounted for as a fulfillment activity. Likewise, the costs related to freight & delivery are included in cost of revenues.

Freight & delivery revenues are as follows:

	Three Months Ended		Six Months Ended
	June 30		June 30
in thousands	2021	2020	2021	2020
Freight & Delivery Revenues
Total revenues	$  1,361,047	$  1,322,575	$  2,429,391	$  2,371,817
Freight & delivery revenues 1	(195,060)	(202,855)	(358,468)	(379,223)
Total revenues excluding freight & delivery	$  1,165,987	$  1,119,720	$  2,070,923	$  1,992,594

¹ Includes freight & delivery to remote distribution sites.

CONSTRUCTION PAVING SERVICE REVENUES

Revenue from our asphalt construction paving business is recognized over time using the percentage-of-completion method under the cost approach. The percentage of completion is determined by costs incurred to date as a percentage of total costs estimated for the project. Under this approach, recognized contract revenue equals the total estimated contract revenue multiplied by the percentage of completion. Our construction contracts are unit priced, and an account receivable is recorded for amounts invoiced based on actual units produced. Contract assets for estimated earnings in excess of billings, contract assets related to retainage provisions and contract liabilities for billings in excess of costs are immaterial. Variable consideration in our construction paving contracts is immaterial and consists of incentives and penalties based on the quality of work performed. Our construction paving contracts may contain warranty provisions covering defects in equipment, materials, design or workmanship that generally run from nine months to one year after project completion. Due to the nature of our construction paving projects, including contract owner inspections of the work during construction and prior to acceptance, we have not experienced material warranty costs for these short-term warranties.

VOLUMETRIC PRODUCTION PAYMENT DEFERRED REVENUES

In 2013 and 2012, we sold a percentage interest in certain future aggregates production for net cash proceeds of $226,926,000. These transactions, structured as volumetric production payments (VPPs):

relate to eight quarries in Georgia and South Carolina

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

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

are both volume and time limited (we expect the transactions will last approximately 20 years, limited by volume rather than time)

We are the exclusive sales agent for, and transmit quarterly to the purchaser the proceeds from the sale of, the purchaser’s share of aggregates production. Our consolidated total revenues exclude the revenue from the sale of the purchaser’s share of aggregates.

The proceeds we received from the sale of the percentage interest were recorded as deferred revenue on the balance sheet. We recognize revenue on a unit-of-sales basis (as we sell the purchaser’s share of production) relative to the volume limitations of the transactions. Given the nature of the risks and potential rewards assumed by the buyer, the transactions do not reflect financing activities.

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

	Three Months Ended		Six Months Ended
	June 30		June 30
in thousands	2021	2020	2021	2020
Deferred Revenue
Balance at beginning of period	$     176,293	$     183,997	$     177,962	$     185,339
Revenue recognized from deferred revenue	(2,217)	(2,034)	(3,886)	(3,376)
Balance at end of period	$     174,076	$     181,963	$     174,076	$     181,963

Based on expected sales from the specified quarries, we expect to recognize $7,500,000 of VPP deferred revenue as income during the 12-month period ending June 30, 2022 (reflected in other current liabilities in our June 30, 2021 Condensed Consolidated Balance Sheet).