SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Mar. 31, 2025

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

(A) Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Eagle Materials Inc. and its majority-owned subsidiaries (the Company), which may be referred to as we, our, or us. All intercompany balances and transactions have been eliminated. The Company is a holding company whose assets consist of its investments in its subsidiaries, a joint venture, intercompany balances, and holdings of cash and cash equivalents. The businesses of the consolidated group are conducted through the Company’s subsidiaries. The Company conducts one of its cement plant operations through a joint venture, Texas Lehigh Cement Company L.P., which is located in Buda, Texas (the Joint Venture). Our investment in the Joint Venture is accounted for using the equity method of accounting, and those results have been included for the same period as our March 31 fiscal year end.

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash Equivalents include short-term, highly liquid investments with original maturities of three months or less and are recorded at cost, which approximates market value.

Accounts Receivable

Accounts and Notes Receivable have been shown net of the allowance for doubtful accounts of $6.4 million and $6.7 million at March 31, 2025, and 2024, respectively. We perform ongoing credit evaluations of our customers’ financial condition and generally require no collateral from our customers. The allowance for non-collection of receivables is based on our assessment of the collectability of outstanding Accounts Receivable, and includes a provision for probable losses based on historical write-offs, adjusted for current economic trends in the construction industry, and a specific reserve for accounts deemed at risk. We have no significant credit risk concentration among our diversified customer bases. Bad debt expense was approximately $0.2 million, $0.3 million, and $0.3 million for the fiscal years ended March 31, 2025, 2024, and 2023, respectively. Write-offs of Accounts Receivable were approximately $0.6 million, $0.6 million, and $0.1 million for the fiscal years ended March 31, 2025, 2024, and 2023, respectively.

Inventories

Inventories are stated at the lower of average cost (including applicable material, labor, depreciation, and plant overhead) or net realizable value. Raw Materials and Materials-in-Progress include clinker, which is an intermediary product before it is ground into cement powder. Quantities of Raw Materials and Materials-in-Progress, Aggregates and Coal inventories, are based on measured volumes, subject to estimation based on the size and location of the inventory piles and then converted to tonnage using standard inventory density factors. Inventories consist of the following:

	March 31,
		2025		2024
	(dollars in thousands)
Raw Materials and Materials-in-Progress	$	164,683	$	122,772
Finished Cement		67,711		71,396
Aggregates		17,681		12,149
Gypsum Wallboard		5,708		5,242
Recycled Paperboard		7,814		14,278
Repair Parts and Supplies		126,983		127,511
Fuel and Coal		24,595		20,575
	$	415,175	$	373,923

Property, Plant, and Equipment

Property, Plant, and Equipment are stated at cost. Major renewals and improvements are capitalized and depreciated. Annual maintenance is expensed as incurred. Depreciation is provided on a straight-line basis over the estimated useful lives of depreciable assets and totaled $147.6 million, $139.5 million, and $129.6 million, for the fiscal years ended March 31, 2025, 2024, and 2023, respectively. Raw material deposits are depleted as such deposits are extracted for production utilizing the units-of-production method. Costs and accumulated depreciation applicable to assets retired or sold are eliminated from the accounts, and any resulting gains or losses are recognized at such time. The estimated useful lives of the related assets are as follows:

Plants	20 to 30 years
Buildings	20 to 40 years
Machinery and Equipment	3 to 25 years

Maintenance and repair expenses are included in each segment’s costs and expenses. We incurred $248.4 million, $220.1 million, and $173.4 million of maintenance and repair expenses in the fiscal years ended March 31, 2025, 2024, and 2023, respectively, which is included in Cost of Goods Sold on the Consolidated Statement of Earnings.

Goodwill and Intangible Assets

Goodwill

We annually assess Goodwill in the fourth quarter of our fiscal year, or more frequently when indicators of impairment exist. Impairment testing for Goodwill is done at the reporting unit, which is consistent with the reportable segment.

Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. Prior to performing the Step 1 quantitative test, we may, at our discretion, perform an optional qualitative analysis, or we may choose to proceed directly to the Step 1 quantitative test. The qualitative analysis considers the impact of the following events and circumstances on the reporting unit being tested: macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and other relevant entity-specific events. If, as a result of this qualitative analysis, we conclude that it is more likely than not (a likelihood of greater than 50%) that the fair value of the reporting unit exceeds its carrying value, then an impairment does not exist, and the Step 1 quantitative test is not required. If we are unable to conclude that it is more likely than not that the fair value of the reporting unit exceeds its carrying value, then we proceed to the Step 1 quantitative test.

Step 1 of the quantitative test for impairment compares the fair value of the reporting unit to its carrying value. If the carrying value exceeds the fair value, then an impairment is indicated. If facts and circumstances related to our business change in subsequent years, we may choose to perform a quantitative analysis in those future years. If we perform a Step 1 quantitative test and the carrying value of the reporting unit exceeds its fair value, then an impairment charge equal to the difference, not to exceed the total amount of Goodwill, is recorded.

The fair values of the reporting units are estimated by using both the market and income approaches. The market approach considers market factors and certain multiples in comparison to similar companies, while the income approach uses discounted cash flows to determine the estimated fair values of the reporting units. We also perform an overall comparison of all reporting units to our market capitalization to test the reasonableness of our fair value calculations.

We performed qualitative assessments on all our reporting units in the fourth quarter of fiscal 2025. As a result of these qualitative assessments, we determined it was not more likely than not that an impairment existed; therefore, we did not perform a Step 1 quantitative test in fiscal 2025. We performed a step 1 quantitative test on all our reporting units with Goodwill during the fourth quarter of fiscal 2024. We estimated the fair value of the reporting units using a discounted cash flow model as well as a market analysis. Key assumptions in the model included estimated average net sales prices, sales volumes, and the estimated weighted-average cost of capital specific to each industry. Based on the results of the Step 1 quantitative analysis, we concluded that the fair values of the reporting units substantially exceeded their carrying values, and therefore no impairment was recognized.

Goodwill and Intangible Assets

Goodwill and Intangible Assets at March 31, 2025, and 2024, consist of the following:

	March 31, 2025
	Amortization Period	Cost		Additions		Accumulated Amortization			Net
	(dollars in thousands)
Goodwill and Intangible Assets:
Customer Contracts and Relationships	15 years	$	157,294	$	40,209		(89,444	)	$	108,059
Permits	25-40 years		30,760		—		(14,358	)		16,402
Trade Name	15 years		1,900		500		(1,003	)		1,397
Goodwill			392,569		77,325		—			469,894
Total Goodwill and Intangible Assets		$	582,523	$	118,034	$	(104,805	)	$	595,752

	March 31, 2024
	Amortization Period		Cost			Additions			Accumulated Amortization				Net
	(dollars in thousands)
Goodwill and Intangible Assets:
Customer Contracts and Relationships	15 years	$		141,194	$		16,100	$		(82,077	)	$		75,217
Permits	25-40 years			30,760			—			(13,413	)			17,347
Trade Name	15 years			1,900			—			(916	)			984
Goodwill				380,711			11,858			—				392,569
Total Goodwill and Intangible Assets		$		554,565	$		27,958	$		(96,406	)	$		486,117

Amortization expense of intangibles was $8.4 million, $7.9 million, and $6.8 million for the fiscal years ended March 31, 2025, 2024, and 2023, respectively. Amortization expense is expected to be approximately $10.3 million in fiscal 2026, $10.1 million in fiscal 2027, $10.0 million in fiscal 2028 and $9.8 million in fiscal 2029 and fiscal 2030.

Impairment or Disposal of Long-Lived and Intangible Assets

We assess our long-lived assets, including mining and related assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset, or group of assets, may not be recoverable. Long-lived assets, or group of assets, are evaluated for impairment at the lowest level for which cash flows are largely independent of the cash flows of other assets. We assess recoverability of assets, or group of assets, by comparing the carrying amount of an asset, or group of assets, to the future undiscounted net cash flows that we expect the asset, or group of assets, to generate. These impairment evaluations are significantly affected by estimates of future revenue, costs and expenses, and other factors. If the carrying value of the assets, or group of assets, exceeds the undiscounted cash flows, then

an impairment is indicated. If such assets, or group of assets, are considered to be impaired, the impairment is recognized as the amount by which the carrying amount of the asset, or group of assets, exceeds the fair value of the asset, or group of assets. Any assets held for sale are reflected at the lower of their carrying amount or fair value less cost to sell. There were no indicators of impairment related to our long-lived assets during fiscal 2025.

Other Assets

Other Assets are primarily composed of financing costs related to our Revolving Credit Facility, deferred expenses, and deposits.

Income Taxes

We account for Income Taxes using the asset and liability method. The effect on deferred taxes of a change in tax rates is recognized in earnings in the period that includes the enactment date. We recognize deferred taxes for the differences between financial statement carrying amounts and the tax bases of existing assets and liabilities by applying enacted statutory tax rates for future years. In addition, we recognize future tax benefits to the extent that such benefits are more likely than not to be realized. See Footnote (I) for more information.

Stock Repurchases

Shares repurchased by the Company are considered retired and available for future issuance. When shares are repurchased, the Company first reduces Capital in Excess of Par Value, and if there is no balance in this account, the purchases are recorded as a reduction of Retained Earnings.

On May 17, 2022, the Board authorized the Company to repurchase an additional 7,500,000 shares. During fiscal years 2025, 2024, and 2023, we repurchased 1,214,173, 1,863,534, and 3,075,788 shares, respectively, at average prices of $245.67, $184.21, and $126.05, respectively. At March 31, 2025, the remaining authorized shares for repurchase totaled 4,669,497 shares.

Revenue Recognition

We earn Revenue primarily from the sale of products, which include cement, concrete, aggregates, gypsum wallboard, and recycled paperboard. The majority of Revenue from the sale of concrete, aggregates, and gypsum wallboard is originated by purchase orders from our customers, who are mainly third-party contractors and suppliers. Revenue from the sale of cement is sold point-of-sale to customers under sales orders. Revenue from our Recycled Paperboard segment is generated mostly through long-term supply agreements. These agreements do not have a stated maturity date, but may be terminated by either party with a two- to three-year notice period. We invoice customers upon shipment, and our collection terms range from 30 to 75 days. Revenue from the sale of cement, concrete, aggregates, and gypsum wallboard, which is not under long-term supply agreements, is recognized upon shipment of the related products to customers, which is when title and ownership are transferred, and the customer is obligated to pay.

Revenue from sales under our long-term supply agreements is also recognized upon transfer of control to the customer, which occurs at the time the product is shipped from the production facility. Our long-term supply agreements with customers define, among other commitments, the volume of product we must provide and the volume the customer must purchase by the end of the defined periods. Pricing structures under our agreements are generally market-based, but are subject to certain contractual adjustments. Shortfall amounts, if applicable under these arrangements, are constrained and not recognized as Revenue until agreement is reached with the customer and there is no risk of reversal.

The Company offers certain of its customers, including those with long-term supply agreements, rebates and incentives, which we treat as variable consideration. We adjust the amount of revenue recognized for the variable consideration using the most likely amount method based on past history and projected volumes in the rebate and incentive period. Any amounts billed to customers for taxes are excluded from Revenue.

The Company has elected to treat freight and delivery charges we pay for the delivery of goods to our customers as a fulfillment activity rather than a separate performance obligation. When we arrange for a third party to deliver products to customers, fees for shipping and handling billed to the customer are recorded as Revenue, while costs incurred for shipping and handling are recorded as expenses and included in Cost of Goods Sold.

Approximately $211.2 million, $215.3 million, and $229.6 million of freight for the fiscal years ended March 31, 2025, 2024, and 2023, respectively, were included in both Revenue and Cost of Goods Sold in our Consolidated Statement of Earnings.

Other Nonoperating Income includes lease and rental income, asset sale income, non-inventoried aggregates sales income, and trucking income, as well as other miscellaneous revenue items and costs that have not been allocated to a business segment.

See Footnote (H) for disaggregation of Revenue by segment.

Comprehensive Income/Losses

As of March 31, 2025, we have an Accumulated Other Comprehensive Loss of $3.1 million, which is net of income taxes of $1.0 million, in connection with recognizing the difference between the fair value of the pension assets and the projected benefit obligation.

Consolidated Cash Flows – Supplemental Disclosures

Supplemental cash flow information is as follows:

	For the Years Ended March 31,
	2025			2024		2023
		(dollars in thousands)
Cash Payments:
Interest	$		42,368	$	43,663	$	31,596
Income Taxes			140,786		124,482		131,512
Operating Cash Flows Used for Operating Leases			8,708		9,286		8,314
Noncash Financing Activities:
Right-of-Use Assets Obtained for Capitalized Operating    Leases	$		18,373	$	6,465	$	1,711
Excise Tax on Share Repurchases			2,982		3,432		738

Selling, General, and Administrative Expenses

Selling, General, and Administrative Expenses of the operating units are included in Cost of Goods Sold on the Consolidated Statements of Earnings. Corporate General and Administrative (Corporate G&A) Expenses include administration, financial, legal, employee benefits, and other corporate activities, and are shown separately in the Consolidated Statements of Earnings. Corporate G&A also includes stock compensation expense. See Footnote (K) for more information.

Total Selling, General, and Administrative Expenses for the past three fiscal years are summarized as follows:

	For the Years Ended March 31,
	2025		2024		2023
	(dollars in thousands)
Operating Units Selling, G&A	$	74,713	$	75,001	$	65,468
Corporate G&A		73,942		59,795		53,630
	$	148,655	$	134,796	$	119,098

Earnings per Share

	For the Years Ended March 31,
	2025			2024			2023
Weighted-Average Shares of Common Stock Outstanding		33,378,050			34,811,560			36,798,354
Effect of Dilutive Shares:
Assumed Exercise of Outstanding Dilutive Options		218,434			304,889			418,659
Less Shares Repurchased from Proceeds of Assumed Exercised    Options		(82,734	)		(157,457	)		(290,590	)
Restricted Stock and Restricted Stock Units		132,645			138,879			126,519
Weighted-Average Common Stock and Dilutive Securities    Outstanding		33,646,395			35,097,871			37,052,942

The line Less Shares Repurchased from Proceeds of Assumed Exercised Options includes unearned compensation related to outstanding stock options.

For the fiscal years ended March 31, 2025, 2024, and 2023, there were 4,404, 16,609, and 52,375 stock options at an average exercise price of $240.32 per share, $133.91 per share, and $127.06 per share, respectively, that were excluded from the computation of diluted earnings per share, because including these options would have been anti-dilutive.

Share-Based Compensation

All share-based compensation is valued at the grant date and expensed over the requisite service period, which is generally identical to the vesting period of the award. Forfeitures of share-based awards are recognized in the period in which they occur.

Fair Value Measures

Certain assets and liabilities are required to be recorded or disclosed at fair value. The estimated fair values of those assets and liabilities have been determined using market information and valuation methodologies. Changes in assumptions or estimation methods could affect the fair value estimates; however, we do not believe any such changes would have a material impact on our financial condition, results of operations, or cash flows. There are three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices for identical assets and liabilities in active markets;

Level 2 – Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. These include certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

Recent Accounting Pronouncements

RECENTLY ADOPTED

During fiscal 2025, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which resulted in enhanced disclosures about significant segment expenses. The adoption of this guidance did not affect the Company's results of operations, cash flows, or financial condition. See Footnote (H) of the Audited Consolidated Financial Statements for more information.

PENDING ADOPTION

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which focuses on the rate reconciliation and income taxes paid. ASU 2023-09 requires public entities to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts organized by specified categories with certain reconciling items broken out by nature and jurisdiction to the extent those items exceed a specified threshold. Additionally, all entities are required to disclose income taxes paid, net of refunds received, disaggregated by federal, state, local, and individual jurisdiction if the amount is at least 5% of the total income tax payments, net of refunds received. ASU 2023-09 is effective prospectively for annual periods beginning after December 15, 2024. Early adoption and retrospective application are permitted. ASU 2023-09 will not have any impact on the Company's results of operations, cash flows, and financial condition.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income and Expenses" (ASU 2024-03). ASU 2024-03 requires public business entities to disclose additional information about certain key expense categories within major income statement captions in the Notes to the Consolidated Financial Statements. The new standard is effective for fiscal years beginning after December 15, 2026, and is to be applied prospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance on its Consolidated Financial Statements.