Business Segments

12 Months Ended

May 31, 2012

Business Segments

10. Business Segments

We have three business segments: cement, aggregates and consumer products. Our business segments are managed separately along product lines. Through the cement segment we produce and sell gray portland cement as our principal product, as well as specialty cements. Through the aggregates segment we produce and sell stone, sand and gravel as our principal products, as well as expanded shale and clay lightweight aggregates. Through the consumer products segment we produce and sell ready-mix concrete as our principal product, as well as packaged concrete mix, mortar, sand and related products prior to our sale of our Texas-based package products operations in April 2012. We account for intersegment sales at market prices. Segment operating profit consists of net sales less operating costs and expenses. Corporate includes those administrative, financial, legal, human resources, environmental and real estate activities which are not allocated to operations and are excluded from segment operating profit. Identifiable assets by segment are those assets that are used in each segment’s operation. Corporate assets consist primarily of cash and cash equivalents, real estate and other financial assets not identified with a business segment.

The following is a summary of operating results and certain other financial data for our business segments.

In thousands	2012			2011			2010
Net sales
Cement
Sales to external customers	$	268,886		$	240,449		$	249,366
Intersegment sales		46,407			46,845			45,147
Aggregates
Sales to external customers		149,110			147,862			143,045
Intersegment sales		25,450			24,563			21,902
Consumer products
Sales to external customers		229,007			233,502			228,653
Intersegment sales		2,721			2,646			2,730
Eliminations		(74,578	)		(74,054	)		(69,779	)
Total net sales	$	647,003		$	621,813		$	621,064
Segment operating profit (loss)
Cement	$	20,488		$	(10,249	)	$	13,996
Aggregates		33,555			22,638			13,801
Consumer products		25,035			(11,151	)		3,657
Total segment operating profit		1 79,078			1 1,238			31,454
Corporate		(35,771	)		(30,843	)		(41,205	)
Interest		(34,835	)		(47,583	)		(52,240	)
Loss on debt retirements		—			(29,619	)		—
Income (loss) from continuing operations before income taxes	$	8,472		$	(106,807	)	$	(61,991	)

In thousands	2012		2011		2010
Identifiable assets
Cement	$	1,135,336	$	1,082,524	$	1,093,301
Aggregates		219,074		201,917		229,084
Consumer products		90,717		106,643		85,641
Corporate		131,801		159,927		123,721
Total assets	$	1,576,928	$	1,551,011	$	1,531,747
Depreciation, depletion and amortization
Cement	$	35,078	$	36,576	$	35,828
Aggregates		15,745		18,963		19,873
Consumer products		8,981		7,625		7,065
Corporate		1,148		1,133		1,159
Total depreciation, depletion and amortization	$	60,952	$	64,297	$	63,925
Capital expenditures
Cement	$	78,618	$	30,413	$	7,672
Aggregates		21,332		6,124		5,293
Consumer products		4,569		8,229		564
Corporate		1,817		917		130
Total capital expenditures	$	106,336	$	45,683	$	13,659
Net sales by product
Cement	$	232,007	$	209,586	$	221,068
Stone, sand and gravel		64,393		68,645		69,081
Ready-mix concrete		182,418		180,733		175,581
Other products		89,529		94,892		95,928
Delivery fees		78,656		67,957		59,406
Total net sales	$	647,003	$	621,813	$	621,064

All sales were made in the United States during the periods presented with no single customer representing more than 10 percent of sales. All of our identifiable assets are located in the United States.

Cement segment operating profit includes $2.5 million in 2012, $1.7 million in 2011 and $3.4 million in 2010 from sales of emission credits associated with our Crestmore cement plant in Riverside, California.

Aggregate segment operating profit in 2012 includes a gain of $20.8 million from the sale of our aggregate rail distribution terminal and associated assets located in Stafford, Texas. Segment operating profit in 2011 includes a gain of $12.0 million from the exchange of aggregate operating assets for ready-mix operating assets.

Consumer products segment operating profit in 2012 includes a gain of $30.9 million from the sale of our Texas-based package products operations. We also entered into ready-mix and aggregate asset exchange transactions and a joint venture agreement that resulted in the recognition of gains of $10.5 million in 2012.

Cement segment capital expenditures incurred in connection with the expansion of our Hunter, Texas cement plant were $72.9 million in 2012, $25.4 million in 2011 and $5.3 million in 2010, of which $32.3 million in 2012 and $11.0 million in 2011 was capitalized interest paid.

Capital expenditures for normal replacement and upgrades of existing equipment and acquisitions to sustain existing operations were $33.4 million in in 2012, $20.3 million in 2011 and $8.3 million in 2010, of which $18.0 million was incurred to acquire aggregate reserves in 2012.