Segment Reporting

12 Months Ended

Sep. 30, 2015

Segment Reporting

Segment Reporting

3. Segment Reporting

        Headwaters currently operates three business segments: building products, construction materials and energy technology. These segments are managed and evaluated separately by management due to differences in their operations, products and services. Revenues for the building products segment consist of product sales to wholesale and retail distributors, contractors and other users of building products. Revenues for the construction materials segment consist primarily of CCP sales to ready-mix concrete businesses, with a smaller amount from services provided to coal-fueled electric generating utilities. Continuing revenues for the energy technology segment consist primarily of catalyst sales to oil refineries. As described in Note 5, Headwaters sold all of its coal cleaning facilities in 2012 and 2013 and the results of operations have been reflected as discontinued operations in the accompanying statements of income for all periods. Intersegment sales are immaterial.

        The following segment information has been prepared in accordance with ASC Topic 280 Segment Reporting. Segment performance is evaluated primarily on revenue and operating income, although other factors are also used, such as Adjusted EBITDA, a non-GAAP financial measure. Headwaters defines Adjusted EBITDA as net income plus net interest expense, income taxes, depreciation and amortization, stock-based compensation, cash-based compensation tied to stock price, goodwill and other impairments, and other non-routine adjustments that arise from time to time.

        Segment costs and expenses considered in deriving segment operating income include cost of revenue, amortization, and segment-specific selling, general and administrative expenses. Amounts included in the Corporate column represent expenses that are not allocated to any segment and include administrative departmental costs and general corporate overhead. Segment assets reflect those specifically attributable to individual segments and primarily include cash, accounts receivable, inventories, property, plant and equipment, goodwill and intangible assets. Certain other assets are included in the Corporate column. The net operating results of the discontinued coal cleaning business are reflected in the single line item for discontinued operations.

	2013
(in thousands)	Building products			Construction materials			Energy technology			Corporate			Totals
Segment revenue	$	394,324		$	293,000		$	15,252		$	0		$	702,576
Depreciation and amortization	$	(37,065	)	$	(12,809	)	$	(2,153	)	$	(290	)	$	(52,317	)
Operating income (loss)	$	34,194		$	43,519		$	(1,939	)	$	(21,363	)	$	54,411
Net interest expense														(42,566	)
Other income (expense), net														364
Income tax provision														(3,924	)
Income from continuing operations														8,285
Loss from discontinued operations, net of income taxes														(1,148	)
Net income													$	7,137
Capital expenditures	$	21,455		$	4,851		$	634		$	2,179		$	29,119
Segment assets	$	306,686		$	358,684		$	34,509		$	18,648		$	718,527

	2014
(in thousands)	Building products			Construction materials			Energy technology			Corporate			Totals
Segment revenue	$	472,434		$	309,337		$	9,676		$	0		$	791,447
Depreciation and amortization	$	(39,425	)	$	(13,706	)	$	(1,731	)	$	(272	)	$	(55,134	)
Operating income (loss)	$	46,888		$	51,503		$	(6,829	)	$	(24,838	)	$	66,724
Net interest expense														(46,329	)
Other income (expense), net														(348	)
Income tax provision														(3,574	)
Income from continuing operations														16,473
Loss from discontinued operations, net of income taxes														(415	)
Net income													$	16,058
Capital expenditures	$	25,307		$	5,721		$	473		$	4,298		$	35,799
Segment assets	$	411,968		$	325,140		$	22,674		$	136,524		$	896,306

	2015
(in thousands)	Building products			Construction materials			Energy technology			Corporate			Totals
Segment revenue	$	523,643		$	352,263		$	19,427		$	0		$	895,333
Depreciation and amortization	$	(36,933	)	$	(15,155	)	$	(1,372	)	$	(513	)	$	(53,973	)
Operating income (loss)	$	64,418		$	64,984		$	731		$	(28,026	)	$	102,107
Net interest expense														(64,219	)
Other income (expense), net														(218	)
Income tax benefit														94,458
Income from continuing operations														132,128
Loss from discontinued operations, net of income taxes														(460	)
Net income													$	131,668
Capital expenditures	$	25,454		$	5,855		$	325		$	5,225		$	36,859
Segment assets	$	412,867		$	294,057		$	45,671		$	226,424		$	979,019