Total revenues include sales of products and services to customers, net of any discounts or allowances, and freight revenues. Product revenues are recognized when control of the promised good is transferred to the customer, typically when finished products are shipped. Intersegment and interproduct revenues are eliminated in consolidation. Service revenues are derived from the paving business and recognized using the percentage-of-completion method under the revenue-cost approach. Under the revenue-cost approach, recognized contract revenue is determined by multiplying the total estimated contract revenue by the estimated percentage of completion. Contract costs are recognized as incurred. The percentage of completion is determined on a contract-by-contract basis using project costs incurred to date as a percentage of total estimated project costs. The Company believes the revenue-cost approach is appropriate as the use of asphalt in a paving contract is relatively consistent with the performance of the paving service. Paving contracts, notably with governmental entities, may contain performance bonuses based on quality specifications. Given the uncertainty of meeting the criteria until the performance obligation is completed, performance bonuses are recognized as revenues when and if determined to be achieved. Performance bonuses are not material to the Company’s consolidated results of operations for the three- and nine-months ended September 30, 2018 and 2017. Freight revenues reflect delivery arranged by the Company using a third party on behalf of the customer and are recognized consistent with the timing of the product revenues.

Performance Obligations. Performance obligations are contractual promises to transfer or provide a distinct good or service for a stated price. The Company’s product sales agreements are single-performance obligations that are satisfied at a point in time. Performance obligations within paving service agreements are satisfied over time, primarily ranging from one day to 20 months. For product revenues and freight revenues, customer payment terms are generally 30 days from invoice date. Customer payments for the paving operations are based on a contractual billing schedule and are due 30 days from invoice date.

Future revenues from unsatisfied performance obligations at September 30, 2018 and 2017 were $111,721,000 and $107,953,000, respectively, where the remaining periods to complete these obligations ranged from one month to 27 months and one month to 21 months, respectively.

Sales Taxes. The Company is deemed to be an agent when collecting sales taxes from customers. Sales taxes collected are initially recorded as liabilities until remitted to taxing authorities and are not reflected in the consolidated statements of earnings as revenues and expenses.

Revenue by Category. The following table presents the Company’s total revenues by category for each reportable segment:

	Three-Months Ended
	September 30, 2018
(Dollars in Thousands)	Products and Services		Freight		Total
Mid-America Group	$	348,429	$	28,576	$	377,005
Southeast Group		121,661		3,886		125,547
West Group		603,763		39,802		643,565
Total Building Materials Business		1,073,853		72,264		1,146,117
Magnesia Specialties		68,365		5,158		73,523
Total	$	1,142,218	$	77,422	$	1,219,640

	Three-Months Ended
	September 30, 2017
(Dollars in Thousands)	Products and Services		Freight		Total
Mid-America Group	$	287,085	$	21,387	$	308,472
Southeast Group		91,427		3,416		94,843
West Group		584,086		36,426		620,512
Total Building Materials Business		962,598		61,229		1,023,827
Magnesia Specialties		59,889		4,016		63,905
Total	$	1,022,487	$	65,245	$	1,087,732

Service revenues, which include paving operations located in Colorado, were $82,232,000 and $94,503,000 for the three-months ended September 30, 2018 and 2017, respectively.

	Nine-Months Ended
	September 30, 2018
(Dollars in Thousands)	Products and Services		Freight		Total
Mid-America Group	$	841,897	$	64,480	$	906,377
Southeast Group		308,306		10,443		318,749
West Group		1,672,707		110,467		1,783,174
Total Building Materials Business		2,822,910		185,390		3,008,300
Magnesia Specialties		201,390		14,357		215,747
Total	$	3,024,300	$	199,747	$	3,224,047

	Nine-Months Ended
	September 30, 2017
(Dollars in Thousands)	Products and Services		Freight		Total
Mid-America Group	$	734,406	$	53,984	$	788,390
Southeast Group		266,690		10,784		277,474
West Group		1,620,632		106,110		1,726,742
Total Building Materials Business		2,621,728		170,878		2,792,606
Magnesia Specialties		189,918		12,592		202,510
Total	$	2,811,646	$	183,470	$	2,995,116

Services revenues, which include paving operations located in Colorado, were $162,944,000 and $179,553,000 for the nine-months ended September 30, 2018 and 2017, respectively.

Contract Balances. Costs in excess of billings relate to the conditional right to consideration for completed contractual performance and are contract assets on the consolidated balance sheets. Costs in excess of billings are reclassified to accounts receivable when the right to consideration becomes unconditional. Billings in excess of costs relate to customers invoiced in advance of contractual performance and are contract liabilities on the consolidated balance sheets. The following table presents information about the Company’s contract balances:

Revenues recognized from the beginning balance of contract liabilities for the three-months ended September 30, 2018 and 2017 were $6,203,000 and $4,439,000, respectively, and for the nine-months ended September 30, 2018 and 2017 were $6,816,000 and $8,231,000, respectively.

Retainage, which primarily relates to the paving services, represents amounts that have been billed to customers but payment withheld until final acceptance of the performance obligation by the customer. Included on the Company’s consolidated balance sheets, retainage was $8,733,000, $9,029,000 and $7,680,000 at September 30, 2018, December 31, 2017 and September 30, 2017, respectively.

Warranties. The Company’s construction contracts generally contain warranty provisions typically for a period of nine months to one year after project completion and cover materials, design or workmanship defects. Historically, the Company has not experienced material costs for warranties. The ready mixed concrete product line carries longer warranty periods, for which the Company has accrued an estimate of warranty cost based on experience with the type of work and any known risks relative to the project. In total, warranty costs were not material to the Company’s consolidated results of operations for the three- and nine-months ended September 30, 2018 and 2017.

Policy Elections. When the Company arranges third party freight to deliver products to customers, the Company has elected the delivery to be a fulfillment activity rather than a separate performance obligation. Further, the Company acts as a principal in the delivery arrangements and, as required by the accounting standard, the related revenues and costs are presented gross and are included in the consolidated statements of earnings.