Page 47 - 2019 Annual Report

NOTES TO FINANCIAL STATEMENTS (continued)

performance. The Company has indemnified the underwriting insurance company, Liberty Mutual, against any exposure under
the surety bonds. In the Company’s past experience, no material claims have been made against these financial instruments.

Borrowing Arrangements with Affiliate. The Company is a co‐borrower with an unconsolidated affiliate for a $15.5 million
revolving line of credit agreement with Truist Bank, a successor by merger to Suntrust Bank and formerly known as BB&T, of
which $11.3 million was outstanding as of December 31, 2019. The line of credit expires in March 2020. The affiliate has agreed
to reimburse and indemnify the Company for any payments and expenses the Company may incur from this agreement. The
Company holds a lien on the affiliate’s membership interest in a joint venture as collateral for payment under the revolving line
of credit.
At December 31, 2019 and 2018, the Company had an interest‐only $6.0 million note receivable from the unconsolidated
affiliate due December 31, 2022.

Purchase Commitments. The Company had purchase commitments for property, plant and equipment of $93.4 million as of
December 31, 2019. The Company also had other purchase obligations related to energy and service contracts of $82.9 million
as of December 31, 2019. The Company’s contractual purchase commitments as of December 31, 2019 are as follows:

(in millions)
2020 $ 140.6
2021 15.0
2022 3.0
2023 0.9
2024 0.9
Thereafter 15.9
Total $ 176.3

Capital expenditures in 2019, 2018 and 2017 that were purchase commitments as of the prior year end were $106.7 million,
$79.3 million and $83.7 million, respectively.

Contracts of Affreightment and Royalty Commitments. Future minimum contracts of affreightment and royalty commitments
for all noncancelable agreements as of December 31, 2019 are as follows:

Contracts of Royalty
(in millions) Affreightment Commitments
2020 $ 15.8 $ 15.7
2021 16.1 11.1
2022 16.3 10.3
2023 16.6 9.2
2024 16.9 8.9
Thereafter 52.2 59.7
Total $ 133.9 $ 114.9

Employees. Approximately 11% of the Company’s employees are represented by a labor union. All such employees are hourly
employees. The Company maintains collective bargaining agreements relating to the union employees within the Building
Materials business and Magnesia Specialties segment. 100% of the hourly employees of the Magnesia Specialties segment,
located in Manistee, Michigan and Woodville, Ohio, are represented by labor unions. The Woodville collective bargaining
agreement expires in June 2022. The Manistee collective bargaining agreement expires in August 2023.

Note P: Segments
The Building Materials business is comprised of divisions which represent operating segments, some of which are consolidated
into reportable segments for financial reporting purposes as they meet the aggregation criteria. The Building Materials business
contains three reportable segments: Mid‐America Group, Southeast Group and West Group. The Magnesia Specialties business
represents an individual operating and reportable segment. The accounting policies used for segment reporting are the same
as those described in Note A.

Celebrating 25 Years as a Public Company Annual Report ♦ Page 45