(G) Business Segments

Operating segments are defined as components of an enterprise that engage in business activities that earn revenue, incur expenses, and prepare separate financial information that is evaluated regularly by our chief operating decision maker in order to allocate resources and assess performance.

We are a leading supplier of heavy construction materials, light building materials, and materials used for oil and natural gas extraction in the United States. Our products are commodities that are essential in commercial and residential construction; public construction projects; projects to build, expand, and repair roads and highways; and in oil and natural gas extraction

Our business is organized into three sectors within which there are five reportable business segments. The Heavy Materials sector includes the Cement and Concrete and Aggregates segments. The Light Materials sector includes the Gypsum Wallboard and Recycled Paperboard segments. The Oil and Gas Proppants segment produces frac sand used in oil and gas exploration and extraction.

Our operations are conducted in the U.S. and include the mining of limestone for the manufacture, production, distribution, and sale of portland cement and slag (a basic construction material which is the essential binding ingredient in concrete); the grinding of slag; the mining of gypsum, for the manufacture and sale of gypsum wallboard; the manufacture and sale of recycled paperboard to the gypsum wallboard industry and other paperboard converters; the sale of readymix concrete; and the mining and sale of aggregates (crushed stone, sand, and gravel) and sand used in hydraulic fracturing (frac sand).

We operate seven cement plants, one slag grinding facility, 18 cement distribution terminals, five gypsum wallboard plants, a gypsum wallboard distribution center, a recycled paperboard mill, 17 readymix concrete batch plants, four aggregates processing plants, two frac sand processing facilities, three frac sand drying facilities, and six frac sand trans-load locations. The principal markets for our cement products are Texas, Illinois, the central plains, Michigan, Iowa, the Rocky Mountains, northern Nevada, southern Ohio, and northern California. Gypsum wallboard and recycled paperboard are distributed throughout the continental U.S., with the exception of the Northeast. Concrete and aggregates are sold to local readymix producers and paving contractors in the Austin, Texas area, north of Sacramento, California and the greater Kansas City, Missouri area, while frac sand is currently sold into shale deposits across the United States. Other segment operations that are not material to our business are included in Other.

We conduct one of our seven cement plant operations, Texas Lehigh Cement Company LP, in Buda, Texas, through a Joint Venture. For segment reporting purposes only, we proportionately consolidate our 50% share of the Joint Venture’s Revenue and Operating Earnings, consistent with the way management reports the segments within the Company for making operating decisions and assessing performance.

We account for intersegment sales at market prices. The table below sets forth certain financial information relating to our operations by segment. We do not allocate interest or taxes at the segment level, only at the consolidated company level.

	For the Years Ended March 31,
	2018			2017			2016
	(dollars in thousands)
Revenue -
Cement	$	651,750		$	566,321		$	528,499
Concrete and Aggregates		157,013			154,592			128,073
Gypsum Wallboard		491,779			473,651			461,457
Paperboard		181,742			167,065			149,192
Oil and Gas Proppants		85,496			34,623			57,591
Other		12,748			—			—
		1,580,528			1,396,252			1,324,812
Less: Intersegment Revenue		(88,124	)		(79,116	)		(73,862	)
Less: Joint Venture Revenue		(105,884	)		(105,916	)		(107,458	)
	$	1,386,520		$	1,211,220		$	1,143,492

	For the Years Ended March 31,
	2018		2017		2016
	(dollars in thousands)
Intersegment Revenue -
Cement	$	16,442	$	15,781	$	13,939
Concrete and Aggregates		1,335		1,262		922
Paperboard		70,347		62,073		59,001
	$	88,124	$	79,116	$	73,862
Cement Sales Volume (M tons) -
Wholly Owned		4,453		3,934		3,903
Joint Venture		912		937		875
		5,365		4,871		4,778

	For the Years Ended March 31,
	2018				2017			2016
				(dollars in thousands)
Operating Earnings -
Cement	$	179,151			$	153,525		$	137,854
Concrete and Aggregates		17,854				18,072			9,807
Gypsum Wallboard		158,551				159,866			159,352
Paperboard		32,758				37,601			32,153
Oil and Gas Proppants		(6,423	)			(14,633	)		(68,466	)
Other		284				—			—
Sub-Total		382,175				354,431			270,700
Corporate General and Administrative Expense		(41,205	)			(33,940	)		(37,193	)
Legal Settlements		(45,098	)			—			—
Other Non-Operating Income		3,728				2,139			2,328
Acquisition and Litigation Expense		—				(5,480	)		—
Earnings Before Interest and Income Taxes		299,600				317,150			235,835
Interest Expense, net		(27,638	)			(22,631	)		(16,583	)
Earnings Before Income Taxes	$	271,962			$	294,519		$	219,252
Cement Operating Earnings -
Wholly Owned	$	135,732			$	111,139		$	98,771
Joint Ventures		43,419				42,386			39,083
	$	179,151			$	153,525		$	137,854
Capital Expenditures -
Cement	$	45,088			$	32,790		$	20,262
Concrete and Aggregates		4,977				6,528			18,783
Gypsum Wallboard		19,382				11,393			4,832
Paperboard		5,177				3,996			5,542
Oil and Gas Proppants		56,872				1,534			40,144
Other, net		461				697			—
	$	131,957			$	56,938		$	89,563
Depreciation, Depletion and Amortization -
Cement	$	50,891			$	36,727		$	33,400
Concrete and Aggregates		7,931				7,931			6,260
Gypsum Wallboard		18,179				18,728			19,988
Paperboard		8,694				8,425			8,312
Oil and Gas Proppants		25,687				18,255			27,227
Corporate and Other		2,633				1,725			1,918
	$	114,015			$	91,791		$	97,105

	As of March 31,
	2018		2017		2016
	(dollars in thousands)
Identifiable Assets
Cement	$	1,247,504	$	1,234,617	$	819,994
Concrete and Aggregates		104,851		110,413		106,634
Gypsum Wallboard		386,041		379,414		392,523
Paperboard		123,819		124,356		127,371
Oil and Gas Proppants		401,421		376,306		409,497
Other, net		104,367		22,018		27,616
	$	2,368,003	$	2,247,124	$	1,883,635

Segment Operating Earnings, including the proportionately consolidated 50% interest in the revenue and expenses of the Joint Venture, represent Revenue less direct operating expenses, segment Depreciation, and segment Selling, General, and Administrative expenses. We account for intersegment sales at market prices. Corporate assets consist primarily of cash and cash equivalents, general office assets, miscellaneous other assets and assets acquired in the Wildcat Acquisition.

The basis used to disclose Identifiable Assets; Capital Expenditures; and Depreciation, Depletion, and Amortization conforms with the equity method, and is similar to how we disclose these accounts in our Consolidated Balance Sheets and Consolidated Statements of Earnings.

The segment breakdown of Goodwill at March 31, 2018 and 2017 is as follows:

	For the Years Ended March 31,
	2018		2017
	(dollars in thousands)
Cement	$	74,214	$	74,214
Gypsum Wallboard		116,618		116,618
Paperboard		7,538		7,538
Corporate and Other		6,841		—
	$	205,211	$	198,370

Summarized financial information for the Joint Venture that is not consolidated is set out below (this summarized financial information includes the total amount for the Joint Venture and not our 50% interest in those accounts):

	For the Years Ended March 31,
	2018		2017
	(dollars in thousands)
Revenue	$	216,533	$	215,569
Gross Margin	$	91,647	$	90,098
Earnings Before Income Taxes	$	86,838	$	84,772

	March 31, 2018		March 31, 2017
	(dollars in thousands)
Current Assets	$	71,089	$	73,767
Non-Current Assets	$	66,856	$	42,337
Current Liabilities	$	20,671	$	22,293