Page 20 - 2019 Annual Report
P. 20

NOTES TO FINANCIAL STATEMENTS (continued)

           The  carrying  values  of  goodwill  and  other  indefinite‐lived  intangible  assets  are  reviewed  annually,  as  of  October 1,  for
           impairment. An interim review is performed between annual tests if facts and circumstances indicate potential impairment.
           The carrying value of other amortizable intangibles is reviewed if facts and circumstances indicate potential impairment. If a
           review indicates the carrying value is impaired, a charge is recorded.

           Retirement Plans and Postretirement Benefits. The Company sponsors defined benefit retirement plans and also provides
           other postretirement benefits. The Company recognizes the funded status, defined as the difference between the fair value of
           plan assets and the benefit obligation, of its pension plans and other postretirement benefits as an asset or liability on the
           consolidated balance sheets. Actuarial gains or losses that arise during the year are recognized as a component of accumulated
           other comprehensive earnings or loss. Those amounts are amortized over the participants’ average remaining service period
           and recognized as a component of net periodic benefit cost.  The amount amortized is determined using a corridor approach
           and represents the excess over 10% of the greater of the projected benefit obligation or pension plan assets.

           Insurance Reserves. The Company has insurance coverage with large deductibles for workers’ compensation, automobile
           liability, marine liability and general liability claims, and is also self‐insured for health claims. The Company records insurance
           reserves  based  on  an  actuarial‐determined  analysis,  which  calculates  development  factors  that  are  applied  to  total  case
           reserves within the insurance programs. While the Company believes the assumptions used to calculate these liabilities are
           appropriate, significant differences in actual experience and/or significant changes in these assumptions may materially affect
           insurance costs.

           Stock‐Based Compensation. The Company has stock‐based compensation plans for employees and its Board of Directors. The
           Company recognizes all forms of stock‐based awards that vest as compensation expense. The compensation expense is the fair
           value of the awards at the measurement date and is recognized over the requisite service period. Forfeitures are recognized
           as they occur.

           The fair value of restricted stock awards, incentive compensation stock awards and Board of Directors’ fees paid in the form of
           common stock are based on the closing price of the Company’s common stock on the awards’ respective grant dates.  The fair
           value of performance stock awards as of the grant dates is determined by a Monte Carlo simulation methodology.
           In 2019, 2018 and 2017, the Company did not issue any stock options.  For stock options issued prior to 2016, the Company
           used the accelerated expense recognition method. The accelerated recognition method requires stock options that vest ratably
           to be divided into tranches. The expense for each tranche is allocated to its particular vesting period.

           Environmental Matters. The Company records a liability for an asset retirement obligation at fair value in the period in which
           it is incurred. The asset retirement obligation is recorded at the acquisition date of a long‐lived tangible asset if the fair value
           can be reasonably estimated. A corresponding amount is capitalized as part of the asset’s carrying amount. The fair value is
           affected by management’s assumptions regarding the scope of the work required, inflation rates and quarry closure dates.
           Further, the Company records an accrual for other environmental remediation liabilities in the period in which it is probable
           that a liability has been incurred and the appropriate amounts can be estimated reasonably. Such accruals are adjusted as
           further information develops or circumstances change. Generally, these costs are not discounted to their present value or
           offset for potential insurance or other claims or potential gains from future alternative uses for a site.


           Income  Taxes.  Deferred  income  taxes,  net,  on  the  consolidated  balance  sheets  reflect  the  net  tax  effects  of  temporary
           differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
           income tax purposes, net of valuation allowances. The effect on deferred income tax assets and liabilities attributable to
           changes in enacted tax rates are charged or credited to income tax expense or benefit in the period of enactment.

           Uncertain Tax Positions. The Company recognizes a tax benefit when it is more‐likely‐than‐not, based on the technical merits,
           that a tax position would be sustained upon examination by a taxing authority. The amount to be recognized is measured as
           the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing
           authority that has full knowledge of all relevant information. The Company’s unrecognized tax benefits are recorded in other
           liabilities on the consolidated balance sheets or as an offset to the deferred tax asset for tax carryforwards where available.
           The Company records interest accrued in relation to unrecognized tax benefits as income tax expense. Penalties, if incurred,
           are recorded as operating expenses in the consolidated statements of earnings.







           Page 18  ♦  Annual Report                                           Celebrating 25 Years as a Public Company
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