Legal and Administrative Proceedings. The Company is engaged in certain legal and administrative proceedings incidental to its normal business activities. In the opinion of management and counsel, based upon currently available facts, the likelihood is remote that the ultimate outcome of any litigation and other proceedings, including those pertaining to environmental matters (see Note A), relating to the Company and its subsidiaries, will have a material adverse effect on the overall results of the Company’s operations, its cash flows or its financial position.

Asset Retirement Obligations. The Company incurs reclamation and teardown costs as part of its mining and production processes. Estimated future obligations are discounted to their present value and accreted to their projected future obligations via charges to operating expenses. Additionally, the fixed assets recorded concurrently with the liabilities are depreciated over the period until retirement activities are expected to occur. Total accretion and depreciation expenses for 2023, 2022 and 2021 were $17.1 million, $15.5 million and $11.9 million, respectively, and are included in Other operating income, net, in the consolidated statements of earnings.

The following shows the changes in asset retirement obligations:


years ended December 31 (in millions)	2023			2022			2021
Balance at beginning of year	$	380.0		$	306.8		$	153.8
Accretion expense		10.9			10.6			7.2
Liabilities incurred and liabilities assumed in business combinations		33.8			78.6			179.0
Liabilities settled		(27.7	)		(14.1	)		(5.2	)
Revisions in estimated cash flows		(12.5	)		(3.1	)		3.5
Liabilities reclassified from/(to) assets held for sale		15.8			1.2			(31.5	)
Balance at end of year	$	400.3		$	380.0		$	306.8

Other Environmental Matters. The Company’s operations are subject to and affected by federal, state and local laws and regulations relating to the environment, health and safety, and other regulatory matters. Certain of the Company’s operations may, from time to time, involve the use of substances that are classified as toxic or hazardous within the meaning of these laws and regulations. Environmental operating permits are, or may be, required for certain of the Company’s operations, and such permits are subject to modification, renewal and revocation. The Company regularly monitors and reviews its operations, procedures and policies for compliance with these laws and regulations. Despite these compliance efforts, risk of environmental remediation liability is inherent in the operation of the Company’s businesses, as it is with other companies engaged in similar businesses. The Company has no material provisions for environmental remediation liabilities and does not believe such liabilities will have a material adverse effect on the Company in the future.

Insurance Reserves. At December 31, 2023 and 2022, reserves of $46.9 million and $48.2 million, respectively, were recorded for insurance claims.

Letters of Credit. In the normal course of business, the Company provides certain third parties with standby letter of credit agreements guaranteeing its payment for certain insurance claims, contract performance and permit requirements. At December 31, 2023, the Company was contingently liable for $32.2 million in letters of credit.

Surety Bonds. At December 31, 2023, the Company was contingently liable for $698.3 million in surety bonds required by certain states and municipalities and their related agencies. The bonds are provided in the normal course of business and are principally for certain insurance claims, construction contracts, reclamation obligations and mining permits guaranteeing the Company’s own performance. The Company has indemnified the underwriting insurance company against any exposure under the surety bonds. In the Company’s past experience, no material claims have been made against these financial instruments.

Borrowing Arrangement with Affiliate. At December 31, 2022, the Company had a $6.0 million interest-only note receivable outstanding from an unconsolidated affiliate. The note receivable was repaid in full by the unconsolidated affiliate during 2023.

Purchase Commitments. The Company had purchase commitments for property, plant and equipment of $162.1 million as of December 31, 2023. The Company also had other purchase obligations related to energy and service contracts of $233.1 million as of December 31, 2023. The Company’s contractual purchase commitments as of December 31, 2023 are as follows:


(in millions)
2024	$	247.2
2025		39.1
2026		28.7
2027		14.1
2028		14.4
Thereafter		51.7
Total	$	395.2

Of the total contractual purchase commitments, $50.7 million was for the Company's South Texas cement business and related ready mixed concrete operations that are classified as assets held for sale as of December 31, 2023.

Capital expenditures in 2023, 2022 and 2021 that were purchase commitments as of the prior year end were $111.4 million, $89.6 million and $99.0 million, respectively.

Additionally, the Company has a purchase commitment for 394 railcars at an aggregate value of $42.7 million as of December 31, 2023.

Contracts of Affreightment and Royalty Commitments. Future minimum contracts of affreightment and royalty commitments for all noncancelable agreements that are not accounted for as leases on the Company’s consolidated balance sheet as of December 31, 2023 are as follows:


(in millions)	Contracts of Affreightment		Royalty Commitments
2024	$	16.9	$	26.4
2025		17.1		14.1
2026		17.4		11.7
2027		17.7		11.2
2028		—		8.0
Thereafter		—		77.4
Total	$	69.1	$	148.8

Employees. Approximately 12% 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. All 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 2026. The Manistee collective bargaining agreement expires in August 2027.