Page 47 - 2019 Annual Report
P. 47

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.





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