Page 73 - 2019 Annual Report

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Unit shipments for cement, ready mixed concrete and asphalt are as follows:

years ended December 31
(in millions) 2019 2018
Cement:
Tons to external customers 2.7 2.3
Internal tons used in ready mixed concrete 1.2 1.2
Total cement tons 3.9 3.5

Ready Mixed Concrete – cubic yards 8.5 8.7

Asphalt:
Tons to external customers 0.9 0.8
Internal tons used in paving operations 2.0 1.9
Total asphalt tons 2.9 2.7

2019 shipments in each of the product lines reflect healthy demand, with cement shipments reaching a new annual record.

Magnesia Specialties. In 2019, Magnesia Specialties reported total revenues of $271.3 million, gross profit of $95.4 million
and earnings from operations of $83.6 million, representing decreases of 5.7%, 3.3% and 5.1%, respectively, compared with
2018. These declines are attributable to slowing lime shipments to domestic steel customers and ongoing inventory
rationalization by international customers.

Cost of Revenues – Products and Services
Cost of revenues – products and services increased 8.6% in 2019 compared with 2018 due to increased revenues of 11.7%.
The cost of revenues percentage increase was lower than the percentage increase in total revenues, as the Building Materials
business experienced higher operating leverage of fixed production costs.
Cost of revenues – products and services also includes internal freight costs incurred when the Company transports building
material products, either by truck, rail or water, from one location to another. These freight costs, included in consolidated
cost of revenues – products and services, were $325.2 million and $273.2 million for 2019 and 2018, respectively.

Gross Profit
Gross profit (loss) is as follows:

years ended December 31
(in millions) 2019 2018
Building Materials Business:
Mid-America Group $ 482.2 $ 366.8
Southeast Group 125.3 78.0
West Group 473.3 415.3
Products and Services 1,080.8 860.1
Freight (0.2 ) 0.2
Building Materials Business 1,080.6 860.3

Magnesia Specialties:
Products and Services 99.4 102.9
Freight (4.0 ) (4.2 )
Magnesia Specialties 95.4 98.7
Corporate 3.0 7.6
Total Consolidated Gross Profit $ 1,179.0 $ 966.6

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