1904-3145183
C
ONSOLIDATED
F
INANCIAL
S
TATEMEN
TS
CRH America, Inc. and Subsidiaries
(Ultimately, Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Years Ended December 31, 2021 and 2020
With Independent Auditor’s Report
CRH America, Inc. and Subsidiaries
(Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Consolidated Financial Statements
Years Ended December 31, 2021 and 2020
Table of Contents
Independent Auditor’s Report
..........................................................................................................1
Consolidated Financial Statements
Consolidated Balance Sheets
...........................................................................................................3
Consolidated Statements of Operations
...........................................................................................5
Consolidated Statements of Shareholder’s Equity
...........................................................................6
Consolidated Statements of Cash Flows
..........................................................................................7
Notes to Consolidated Financial Statements
....................................................................................8
INDEPENDENT AUDITOR’S
REPORT
To the Board of Directors and Shareholder of CRH America, Inc. and subsidiaries
Opinion
We have audited the consolidated financial statements of CRH America, Inc. and subsidiaries,
ultimately a wholly-owned subsidiary of CRH plc,
a Republic of Ireland corporation, (the Company),
which comprise the consolidated balance sheet as of December 31
, 2021 and 2020 and the related
consolidated statements of operations, shareholder
’
s equity, and cash flows for the years then ended,
and the related notes to the financial statements (collectively ref
erred to as the “financial
statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2021 and 2020, and th
e results of its operations
and its cash flows for the years then ended in accordance with accounting principles generally
accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepte
d in the United
States of America (GAAS). Our responsibilities under
those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are
required to be independent of the Company and to meet our other ethical responsibilities,
in
accordance with the relevant ethical requirements
relating to our audits. We believe that the audit
evidence we have obtained is sufficient and appr
opriate to provide a basis for our audit opinion.
Emphasis-of-Matter—Related Parties
As discussed in the financial statements, the Company had significant transactions with related
parties. Because of these relationships, it is possible that the terms of these transactions are not the
same as those that would result from transactions among unrelated parties.
Additionally, the accompanying financial statements
have been prepared fro
m the separate records
maintained for the Company and may not necessarily be indicati
ve of the conditions that would have
existed or the results of operations if the Compan
y had operated as an unaffiliated company from CRH
Plc and its subsidiaries.
Portions of certain income and expense represent allocations ma
de from items applicable to CRH Plc
and its subsidiaries as a whole.
Responsibilities of Management for the Financial Statements
Management is responsible for the pre
paration and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the U
nited States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due
to fraud or
error.
In preparing the financial statements, management is required to evaluate whether there
are
conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s
ability to continue as a going concern for one year after the date that the financial statements are
issued.
Auditors' Responsibilit
ies for the Audit of the Financial Stat
ements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is
a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an
audit conducted in accordance with GAAS will
always detect a material misstatement when it
exists. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial lik
elihood that, individually or in the
aggregate, they would influence the judgment made
by a reasonable user based on the financial
statements.
In performing an audit in accordance with GAAS, we:
Exercise professional judgment and maintain pr
ofessional skepticism throughout the audit.
Identify and assess the risks of material misstateme
nt of the financial statements, whether due to
fraud or error, and design and perform audit
procedures responsive to those risks. Such
procedures include examining, on a test basis, ev
idence regarding the amounts and discl
osures in
the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose
of expressing an
opinion on the effectiveness of the Company’s intern
al control. Accordingly, no such opinion is
expressed.
Evaluate the appropriateness of accounting polic
ies used and the reasonablen
ess of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
Conclude whether, in our judgment, there are cond
itions or events, considered in the aggregate,
that raise substantial doubt about the Company’s ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those ch
arged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain i
nternal
control-related matters that we identified during th
e audit.
April 26, 2022
2021
2020
Assets
Current assets:
Cash and cash equivalents
488,236
$
74,230
$
Accounts receivable, less allowance for doubtful
accounts of
$9,600 and $6,318, res
p
ectivel
y
291,572
215,208
Inventories
235,019
139,139
Costs and estimated earnings in excess of billings
5,780
3,717
Other current assets
20,598
12,884
Current portion of due from Parent and affiliates, net
348,848
–
Total current assets
1,390,053
445,178
Operating lease right of use assets
51,696
42,458
Property, plant, and equipment, ne
t
363,482
310,836
Due from Parent and affiliates, net
2,632,042
4,058,170
Interest rate swaps
32,302
73,882
Goodwill
539,097
312,916
Identifiable intangible assets, net
98,037
52,689
Total assets
5,106,709
$
5,296,129
$
Consolidated Balance Sheets
(In Thousands)
CRH America, Inc. and Subsidiaries
a Republic of Ireland Corporation)
(Wholly Owned Subsidiaries of CRH plc,
December 31
3
2021
2020
Liabilities and shareholder’s e
q
uit
y
Current liabilities:
Accounts payable
128,233
$
84,662
$
Accrued payroll
37,445
35,904
Accrued interes
t
11,560
20,728
Other accrued expenses
82,504
36,748
Billings in excess of costs and estimated earnings
5,795
8,763
Operating lease obligations
7,655
6,124
Finance lease obligations
817
869
Current maturities of long-term debt
–
399,988
Total current liabilities
274,009
593,786
Operating lease obligation, net of current portion
47,009
39,517
Finance lease obligation, net of current portion
9,406
9,502
Deferred tax liabilities, net
28,394
20,868
Lon
g
-term debt
2,037,799
2,083,183
Other liabilities
77
172
Shareholder’s equity:
Common stock, $0.01 par value: 10,000 shares
authorized; 2,500 shares issued and outstanding
Paid-in capital
1,571,075
1,569,461
Retained earnings
1,138,940
979,640
Total shareholder’s equity
2,710,015
2,549,101
Total liabilities and shareholder’s equity
5,106,709
$
5,296,129
$
See accompanying notes.
(In Thousands, Except Share Data)
CRH America, Inc. and Subsidiarie
s
(Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Consolidated Balance Sheets
December 31
(In Thousands)
4
–
–
2021
2020
Net sales from contracts with customers
1,397,147
$
1,178,369
$
Cost of sales
959,120
837,608
Gross
p
rofi
t
438,027
340,761
Sellin
g
,
g
eneral, and administrative ex
p
enses
252,615
168,706
O
p
eratin
g
income
185,412
172,055
Other income
(
ex
p
ense
)
:
Interest income, net
233,351
258,233
Interest ex
p
ense
(
211,421
)
(239,125)
Chan
g
e in fair value of derivatives and fixed rate debt, net
122
2,099
Other, net – includes related-
p
art
y
transactions
(
Note 15
)
1,896
1,557
23,948
22,764
Income before
p
rovision for income taxes
209,360
194,819
Provision for income taxes
50,060
47,583
Net income
159,300
$
147,236
$
See accompanying notes.
(Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
(In Thousands)
CRH America, Inc. and Subsidiaries
Consolidated Statements of Operations
Year Ended December 31
5
Paid-in
Retained
Shares
Amount
Capital
Earnings
Total
Balance at January 1, 2020
2,500
–
$
1,568,095
$
832,404
$
2,400,499
$
Employee stock compensation expense
1,366
1,366
Net income
147,236
147,236
Balance at December 31, 2020
2,500
–
1,569,461
979,640
2,549,101
Employee stock compensation expense
1,614
1,614
Net income
159,300
159,300
Balance at December 31, 2021
2,500
–
$
1,571,075
$
1,138,940
$
2,710,015
$
See accompanying notes.
(In Thousands, Except Shares)
Common Stock
Consolidated Statements of Shareholder’s Equity
CRH America, Inc. and Subsidiaries
(Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
6
2021
2020
Operating activities
Net income
159,300
$
147,236
$
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
61,318
54,338
Amortization of loan issuance costs and discounts
1,244
1,520
(Gain) Loss on sale of property, plant, and equipment
(242)
99
Gain on lease disposal and remeasurements
(74)
(175)
Employee stock compensation expense
1,614
1,366
Deferred income tax expense
(12,834)
1,601
Loss (Gain) on Divestment
19,599
(14,873)
Amortization of adjustment to debt resulting from discontinued
fair value hedges
(4,850)
(4,850)
Change in fair value of derivatives and fixed rate debt, net
(122)
(2,099)
Changes in operating assets and liabilities, net of
the effects of business acquisition:
Accounts receivable, net
(14,802)
(1,885)
Inventories
(38,025)
17,441
Other assets
441
1,150
Accounts payable and other current liabilities
5,795
(10,795)
Billings in excess of costs and costs in excess
of billings on contracts in progress, net
(5,031)
706
Net cash provided by operating activities
173,331
190,780
Investing activities
Acquisition of businesses
(418,309)
(134,526)
Purchases of property, plant, and equipment
(48,162)
(30,470)
Proceeds from Divestments
15,420
24,408
Changes in due from Parent and affiliates, net
1,087,874
19,308
Proceeds from sales of property, plant, and equipment, net of disposal costs
4,202
471
Net cash provided by / (used in) investing activities
641,025
(120,809)
Financing activities
Principal payments of short-term borrowings
–
(45)
Principal payments of long-term borrowings
(400,000)
–
Deferred consideration payments
(350)
(878)
Net cash used in financing activities
(400,350)
(923)
Increase in cash and cash equivalents
414,006
69,048
Cash and cash equivalents at beginning of year
74,230
5,182
Cash and cash equivalents at end of year
488,236
$
74,230
$
Non-cash investing and financing activities
Transfer of assets
10,595
-
See accompanying notes.
CRH America, Inc. and Subsidiaries
(In Thousands)
Year Ended December 31
Consolidated Statements of Cash Flows
(Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
7
1904-3145183
8
CRH America, Inc. and Subsidiaries
(Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements
(In Thousands)
December 31, 2021
1. Nature of Operations
CRH America, Inc. (the Company) is a wholly
owned subsidiary of CRH Americas Products,
Inc., which is ultimately a wholly owned subsid
iary of CRH Americas, Inc., formerly known as
Oldcastle Inc. (CRH Americas or Parent), a hold
ing company whose ultimate parent is CRH plc,
a Republic of Ireland corporation.
CRH Americas, Inc. and its subsidiaries (Group
) are engag
ed in the pr
oduction and supply of
building materials to a wide a
nd varied customer base within
the United States. The Group is
organized into two core
product-based business groups:
•
Building Products (primarily blo
ck, pavers, precast, fab
ricated glass, and lawn and
garden products)
•
Materials (primarily agg
regates, cement, r
eady-mixed concrete, a
nd asphalt supply and
paving)
The Company consists of the op
erations of Building Products’
precast and certain treasury
and
financing activities of CRH Americas. The Company has extensive transactions and relationships
with affiliates (Note 15).
2. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements which have been prep
ared in conformity with U.S. generally
accepted accounting principles (US GAAP) comprise
those of the Company, and its wholly owned
subsidiary Oldcastle Infrastruc
ture Inc., (Oldcastle
Infrastruct
ure, formerly Oldcastle Precast, Inc).
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
9
2. Summary of Significant Accounting Policies (continued)
Use of Estimates
The preparation of consolidated financial stat
ements in conformity with US GAAP requires
management to make estimate
s and assumptions th
at affect the amount
s reported in the
consolidated financial statements and accompan
ying notes. In addition to accounting related to
uncertain tax provisions, we al
so make certain estimates fo
r legal prov
isions and other
contingencies. While we believe that these es
timates and assumptions are reasonable under the
circumstances, they are subject
to uncertainties, some of which
are beyond our control. Should any
of these estimates and assumptions
change or prove to have been
incorrect, it could adversely
affect our results of operations.
Cash and Cash Equivalents
The Company considers all highly li
quid investments with an original
maturity of three month
s or
less to be cash equivalents. Ca
sh and cash equivalents were
$488,236 and $74,230 at December
31,
2021 and 2020, respectively.
Accounts Receivable and Allowances
Accounts receivable consists of
customer payments due but not
received. Accounts receivable are
recorded at their original am
ount less an estimated allowan
ce for any doubtful accounts. An
allowance is made when collection of the fu
ll amount is no longer
considered probable.
Financial Instruments
The Company’s financial instruments at Dece
mber
31, 2021 and 2020, consist primarily of cash
and cash equivalents, accounts re
ceivable, accounts payable, short-term borrowings, long-term
debt, and interest rate swap agreements. Due to th
e short maturities of cash and cash equivalents,
accounts receivable, accounts payable, and short-
term borrowings, carrying amounts approximate
the respective fair
values. Accord
ingly, such financial instruments
were valued based upon Level
1
measures within the valuation hi
erarchy. See Note
16 for disclosure
s regarding the fair value of
the Company’s financial
assets and liabilities.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
10
2. Summary of Significant Accounting Policies (continued)
Credit Risk
Substantially all of the Company’s accounts receiv
able are due from compan
ies in, or related to,
the construction industry in the
United States. The Company perfo
rms periodic credit evaluations
of its customers’ financial c
ondition and generally does not require collateral. The Company does
not believe significant credit risk exists
at December
31, 2021 and 2020 related to accounts
receivable. Receivables are genera
lly due within 30 days, although extended terms may be
granted.
Financial instruments give rise
to credit risk on amount
s due from counterparties. Credit risk is
managed by limiting the aggregat
e amount and duration of expos
ure to any one counterparty
primarily depending on its credit rating and by re
gular review of these ratings. The Company
transacts with counterparties th
at have high investment grad
e credit ratings. The maximum
exposure arising in the event of de
fault on the part of the counterpar
ty is the carrying value of the
relevant financial instrument. Th
e Company places its tempor
ary
cash investments and investment
grade short-term investments in
high credit quality financial ins
titutions and limits the amount o
f
credit exposure to any one entity.
Inventories
Inventories are stated at the lower of cost or ne
t realizable value and are
valued principally on the
weighted average cost method. Elemen
ts of cost in inventories incl
ude raw materials,
direct labor,
and manufacturing overhead. To properly provide
for potential exposur
e due to slow-moving,
excess, obsolete or unusable inve
ntory, inventory values are redu
ced based on forecasted usage,
orders, and inventory aging. These factors are
impacted by market con
ditions, and changes in
strategic direction, and require
estimates and management judgmen
t that may include elements
that are uncertain.
Property, Plant, and Equipment
Property, plant, and equipment are stated at
cost. The depreciation of
property, plant, and
equipment is provided using the straight-line
method over the estimated useful lives of the
respective assets. Land, buildings, a
nd improvement
s have useful lives th
at range from 7 to 40
years. Machinery and equipmen
t have useful lives that
range from 3 to 10 years.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
11
2. Summary of Significant Accounting Policies (continued)
Assets classified as held
for sale are stated at the lower of
carrying amount or fair value less costs
to sell. Depreciation ceases once an a
sset is classified as held
for sale.
Leases
The Company determines if an
arrangement is a lease at incep
tion. Operating lease assets are
included in the consolidated balance sheets.
The re
lated liabilities ar
e included in short-
term lease
liabilities and long-
term lease liabilities in th
e consolidated balance sh
eets. Finance leases are
included in property, plant, and equipment and rela
ted liabilities are included in short-term lease
liabilities and long-term
lease liabilities in the Compa
ny’s consolidated balance sheets.
Leased assets represent our right to use an underl
ying asset for the lease te
rm and lease
liabilities
represent our obligation to make lease payments arising fro
m the lease. Operating lease related
assets and liabilities are recognized at commence
ment date based on the present value of lease
payments over the lease term, disc
ounted using the incremental borrowi
n
g rate or the interest rate
implicit in the lease, if this is determinable, over the remaining lease term. The operating lease
related asset also includes any lease payments ma
de and excludes leas
e incentives. The Company’s
lease terms may include options to extend or termin
ate the lease when it is reasonably certain that
the Company will exercise that option. Lease e
xpense for lease payments is recognized on a
straight-line basis ove
r the lease term.
Non-lease components in a contract
such as maintenance and othe
r service charges are separated
from minimum lease payments a
nd are expensed as incurred.
Goodwill and Other Intangible Assets
Goodwill represents the amount by wh
ich the total purchase price the Company has p
aid to acquire
businesses exceeds the estimated fair value of th
e net identifiable assets acquired. Goodwill and
intangible assets with definite
lives are evaluated annually for imp
airment or whenever events or
changes in circumstances indicate that imp
airmen
t may have occurred. The Company has selected
December 31 as the date for performing the annual impairment test.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
12
2. Summary of Significant Accounting Policies (continued)
Oldcastle Infrastructure is the only reporting
unit with goo
dwill. As such, the Company has
developed and completed impairm
ent tests on th
e Oldcastle In
frastructure reporting unit.
When evaluating goodwill for impairment, the Compa
ny first performs a qualitative assessmen
t to
determine whether quant
itative impairment tes
t is
necessary. If, after assess
ing qualitative factors,
we determine it is more like
ly than not that the
fair value of the reportin
g unit is less than the
carrying amount, then the quant
itative goodwill impairment test
is performed. The Company
compares the book va
lue of the net assets of the Company to
the fair value. If the fair value is
determined to be less than book value, then
the Company will record an impairment for the
difference. The Company estima
tes fair value using a discount
ed cash flow methodology. At
December 31, 2021 and 2020, no impairment adjustment
s have been required.
Intangible assets
that have a finite life, which
consist primarily of non-compete ag
reements, customer relationships,
and trade names, are amortized ove
r their use
ful lives (from one to
ten years) using the straight-
line method.
Revenue Recognition
The Company recognizes revenue
in the amount of the price expe
cted to be received for goods
and services supplied at a point
in time or over time, as contract
ual performance obligations are
fulfilled, and control of goods a
nd services passes to
the customer. The Company excludes trade
discounts and value-ad
ded tax/sales tax.
Revenue derived from sale of goods (s
ources other than construction contracts)
While the Company manufactures a number of differe
nt products; recogniti
on of revenue from the
sale of goods is similar; being at
the point in time when control is
deemed to pass to the customer
upon leaving a Company premises or upon delivery to a customer depending on the terms of the
sale. Contracts do not
contain multiple perf
ormance obligations
Goods are sometimes sold with
discounts or rebates based on
cumulative sales over a period.
This variable consideration is only recognized wh
en it is highly probable that it will not be
subsequently reversed and is recognized us
ing the most likely amount
or expected value
methods, depending on the individual
contract terms. In the applic
ation of appropr
iate revenue
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
13
2. Summary of Significant Accounting Policies (continued)
recognition, judgement is exerci
sed by management in the dete
rmination of the likelihood and
quantum of such items based on experien
ce and historical tr
ading patterns.
The Company is deemed to be a principal to an
arrangement when it cont
rols a promised good or
service before transferring them
to a customer; and accordingly
recognizes revenue on a gross
basis.
Within the non-construction contra
ct businesses, no element of fi
nancing is deemed present as
transactions are all made
with average credit terms, consis
tent with market prac
tice. No one
customer accounts for 10% or
more of total revenue.
Revenue derived from construction contracts
The Company enters into a number of large cons
truction contracts, which usually commence and
complete within one financial
period and are fixed price.
The Company typically recognizes
revenue within its construction
contract businesses over time,
as it performs its obligations. Managemen
t believes this best reflects the transfer of control to th
e
customer by providing an accurate representation
of the enhancement of a customer-contro
lled
asset or the construction of an
asset with no alternative use. Th
e percentage-of-com
pletion method
is used to recognize revenue over
time when the outcome of a cont
ract can be estimated reliably.
The percentage-of-completion is
calculated using an
input method and based on the proportion of
contract costs incurred at the balance sheet date re
lative to the total estimated costs of th
e contract.
The Company has an enforceable right to pa
yment for work and performance obligations
completed to date.
Some of the Company's constructio
n contracts may contain forms of
variable consideration that
can either increase or decrease th
e transaction price. Variable c
onsideration is estimated based on
the most likely amount or expe
cted value methods (depending on
the contract terms) and the
transaction price is adjusted to the e
xtent it is
probable that a significan
t reversal of revenue
recognized will not occur.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
14
2. Summary of Significant Accounting Policies (continued)
For the years ended December
31, 2021 and 2020, approximately 6
% and 10%, respectively, o
f
Company revenues were derived under fi
xed-price contract
s from operations.
Recognition of contract
assets and
liabilities
In our construction contract businesses, amounts ar
e billed as work progresses in accordance with
pre-agreed contractual terms. Wh
en a performance obligatio
n is sa
tisfied but a c
ustomer
has not
yet been billed this is recognized
as a contract asset. Retenti
ons are also a common feature of
construction contracts and are recognized as a c
ontract asset within Accounts Receivables when
we have a right to consideration in exchange fo
r the completion of the contract. Retention terms
are usual and customary and the purpose is not
to provide a form of financing. Apart from
retentions, the Company does not have any constr
uction contracts where th
e period between the
transfer of the promised goods to the custo
mer
and payment by the customer exceeds one year.
When consideration is received in advance of work
being performed, or we have billed an amount
to a customer that is in excess of revenue recognized
on the contract; this is recognized as a contract
liability and the revenue is gene
rally recognized
in the subsequent period when the right to
recognize revenue has been determined. As a resu
lt, advance payments r
eceived for construction
contract arrangements are
not considered a significan
t form of financing.
Contract costs included all direct
material and labor costs and t
hose indirect costs related to
contract performance, such as i
ndirect labor, supplies, tools, and
repairs. P
r
ovision
s for estima
ted
losses on uncompleted c
ontracts were made in th
e per
iod in which such losses were determined.
Changes in job performance, job
conditions, and estimated profitab
ility, including those arising
from contract penalty provisions, a
nd final contract settle
ments may result in re
visions to costs and
income and are recognized in the period in which
the revisions were deter
mined. Profit incentives
were included in revenues when their realizat
ion is reasonably assured. An amount equal to
contract costs attributable to
claims was included in revenues
when realization was p
robable and
the amount could be
reliably estimated.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
15
2. Summary of Significant Accounting Policies (continued)
Advertising Costs
The Company expenses advertising
and promotion cost as incurred,
which are recognized in th
e
Company’s selling, general, and
administrative expenses
. Advertising and promotional costs were
approximately $2,192 and $1,488 during the
years ended December
31, 2021 and 2020,
respectively.
Interest Rate Swaps
The Company enters into interest rate swap agreements to r
educe the impact of change
s in interest
rates relating to the issuance of its debt and to manage the Company’s o
verall level of fixed and
variable rate debt to a targ
eted range. The Company recognize
s interest rate
swaps in the
accompanying Consolidated Balance Sheets at fair va
lue. Changes in fair va
lue fo
r interest rate
swaps that are not designated in
qualifying hedge accounting relati
onships are recorded in the
Consolidated Statements of Operations. Changes in
fair value for interest rate swaps that are
designated as hedges of the fair
value of fixed rate debt are of
fset against the related debt.
Stock Compensation
Certain of the Company’s employees participate in
stock compensation plans of the ultimate parent
company, CRH plc. Stock compensation awards are
measured based on fair
value at each reporting
date. For the years ended December
31,
2021 and 2020, the Company recorded stock
compensation expense with a corresponding adjus
tmen
t
to additional paid-in capital of $1,614 and
$1,366, respectively, under
the CRH plc plans.
Income Taxes
Taxable income of the Company is
included in the
consolidated U.S. federal income tax return o
f
the Parent. Income tax is computed on a basi
s that considers the permanent and temporary
differences related to the Comp
any’s operations. The aggregate
amounts charged to the Company
for current income tax amounts and deferred inco
me tax amounts related to temporary differences
are $50,060 and $47,583 for the years ended Decemb
er
31, 2021 and 2020, respectively. Due to
parent and affiliates, net incl
udes $62,894 and $47,583 relate
d to income tax expense for the years
ended December 31, 2021 and 2020, respectively.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
16
2. Summary of Significant Accounting Policies (continued)
The Company’s income tax expense consists of the following:
Year Ended December 31
2021 2020
Current
$ 62,894
$ 45,981
Deferre
d
(12,834)
1,601
Total income tax provision
$ 50,060
$ 47,583
Deferred income taxes are provide
d for all sign
ificant temporary differe
nces between income
reported for financial reporting a
nd income reported for tax purpos
es. Deferred income tax assets
arise primarily from the r
ecording of accruals which are not currently deductib
le for tax purposes
and the fair value adjustments on
debt and interest rate swaps.
Deferred income tax liabilitie
s arise primarily from
the effect of the use,
for income tax purposes,
of accelerated methods of depreciation and the Comp
any’s in
terest rate swap activities. Deferred
tax assets and liabilities
as of December 31, 2021 and 2020 consist of the following:
December 31
2021 2020
Accruals and other reserves
$ 36,884
$ 32,257
Total deferred tax assets
$ 36,884
$ 32,257
December 31
2021 2020
Propert
y
, plant, and equipment
$ (44,198)
$ (38,448)
Goodwill and intan
g
ible assets
(21,080)
(14,677)
Total deferred tax liabilities
$ (65,278)
$ (53,125)
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
17
2. Summary of Significant Accounting Policies (continued)
The Company recognizes the benefit of uncertain ta
x positions when the position taken or expected
to be taken in a tax return is more likely than not of being sustained upon examination by tax
authorities. As of December
31, 2021, and 2020, the Company’s lia
bilities for unrecognized tax
benefits of $9,394 and $4,386, respectively.
The Company recognizes interest and penalties
accrued related to unrecognized tax benefits as
components of the income tax provision. The Comp
any does not have any material interest and
penalties accrued as of December
31, 2021 and
2020, respectively, related to unrecognized tax
benefits.
The Company is subject to taxation by the Inte
rnal Revenue Service a
nd various states. The
Company is open to audit and subject to examina
tions by these tax authorities for the tax years
ending December 31, 2018 through December 31, 2020.
Impairment of Long-Lived Assets
Long-lived assets are reviewed for impairment wh
en circumstances indicate
that the carrying value
of the assets may not be
fully recoverable. When the carrying
value of the asset exceeds the valu
e
of its expected undiscounted futu
re cash flows, an impairment char
ge is recognized equal to the
difference between the asset’s ca
rrying value and its fair value.
No impairment charges were
recognized for the years e
nded December 31, 2021 and 2020.
Comprehensive Income
For the years ended December
31, 2021 and 2020, there
were no material items that gave rise to
other comprehensive income and net income equ
aled comprehensive inco
me.
Recently Adopted Accounting Standards
The FASB issued ASU No. 2016-13, “Measurement of
Credit Losses on Financial Instruments.”
This standard replaces the incurred loss impa
irment methodology in current U.S. GAAP with a
methodology that reflects estimate
s of expected credit losses over
their contractual life that are
recorded at inception based on
historical information, current
conditions, and reasonable and
supportable forecasts.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
18
2. Summary of Significant Accounting Policies (continued)
The pronouncement is effective for nonpublic companies for fiscal years beginning after
December 15, 2023. The Company adopted the ASU effective January 1, 2020 and has evaluated
the standard and concluded there is not a material
impact on our consolidated financial position or
results of operations.
3. Inventories
Inventories consisted of the following:
December 31
2021 2020
Raw materials
$ 56,193
$ 24,820
Finished
g
oods
178,826
114,319
$ 235,019
$ 139,139
4. Property, Plant, and Equipment
Property, plant, and equipment
consisted of the following:
December 31
2021 2020
Land, buildin
g
s, and improvements
$ 304,783
$ 280,790
Machiner
y
and equipment
463,159
420,966
Construction in pro
g
ress
37,459
21,960
805,401
723,716
Less accumulated depreciatio
n
(441,919)
(412,880)
$ 363,482
$ 310,836
Depreciation expense for the years ended December
31, 2021 and 2020, was $44,570 and $43,735,
respectively.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
19
5. Acquisitions
During 2021, the Company acquired Nation
al Pipe & Plastics, Inc. for to
tal consideration o
f
$336,145.
The Company obtained control of
the National Pipe & Plastics, In
c. business by entering into a
stock purchase agreement. National Pipe & Plastics,
Inc. was purchased as an entry point into the
PVC pipe product line. Related
to this acquisition, the Company incurred $2,000 in costs which
are recognized in the Company’s selling, ge
neral, and administr
ative expenses.
This acquisition was accounted for by the acquisition metho
d of accounting and include no non-
cash consideration. The results o
f operations
are included in th
e accompanying financial
statements since the acquisition d
ate. The initial a
cquisition accoun
ting is incomp
lete as the
Company continues to accumulate in
formati
on for valuation of net assets acquired.
The principal factor contributing
to the recognition of goodwill in th
e acquisitions is the potential
realization of cost savings and s
ynergies with existing compan
ies.
The following table summarizes the fair values o
f
the assets acquired and li
abilities assumed at the
date of acquisition:
Accounts receivable
$ 66,086
Inventories
39,154
Accounts pa
y
able
(42,478)
Propert
y
, plant, and equipment
50,039
Deferred tax
(20,360)
Other assets
2,981
Goodwill
214,417
Intan
g
ible assets
49,670
Other liabilities
(23,364)
Fair value of net assets acquire
d
$ 336,145
Cash consideratio
n
$ 336,145
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
20
5. Acquisitions (continued)
The acquired goodwill is not expect
ed to be deductib
le for tax purposes. For the period ended
December 31, 2021, the Company acquired intangible
assets subject to amortization valued at
$49,670 through the acquisitions, which consist of the following:
Gross
Weighted
Average
Amortization
Period
N
on-contractual customer relationships
$ 43,030
5
Trade names
6,640
5
Total intan
g
ible assets
$ 49,670
During 2021, the Company also acquired the follo
wing businesses for to
tal consideration of
$82,164:
B
u
s
i
n
e
s
s
A
c
q
u
i
s
i
t
i
o
n
D
a
t
e
Hancock Concrete Products, LLC
Piranha Pipe & Precast, Inc.
March 12
August 12
The Company obtained control of the Hancock C
oncrete Products, LLC business by entering into
a stock purchase agreement and obtained con
trol of
the Piran
ha Pipe & Precast, Inc. by entering
into asset purchase agreement. The Company
purchased Hancock Concrete Products, LLC and
Piranha Pipe & Precast, Inc. to increase the pr
ecast product lin
e. Related to these acquisitions, th
e
Company incurred $1,303 in costs
which are recognized in the Co
mpany’s selling, general, and
administrative expenses.
These acquisitions were accounted for by the
acquisition method of acc
ounting and include no
non-cash consideration. The result
s of operations are included in
the accompanyi
ng financial
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
21
5. Acquisitions (continued)
statements since the respectiv
e acquisition dates.
The initial acquisition ac
counting is incomplete
as the Company continues to accumulate info
rm
ation for valuation of
net assets acquired.
The principal factor contributing
to the recognition of goodwill in th
e acquisitions is the potential
realization of cost savings and s
ynergies with existing compan
ies.
The following table summarizes the fair values o
f
the assets acquired and li
abilities assumed at the
date of acquisition:
Accounts receivable
$ 1,839
Inventories
18,504
Accounts pa
y
able
(1,050)
Propert
y
, plant, and equipment
27,424
Other assets
2,219
Goodwill
30,358
Intan
g
ible assets
11,410
Other liabilities
(8,540)
Fair value of net assets acquire
d
$ 82,164
Cash consideratio
n
$ 82,164
Of acquired goodwill, the total amount expected to
be deductible for tax purposes is $
10,628. For
the period ended December 31, 2021, the Compa
ny acquired intangible assets subject to
amortization valued at $11,410 through the acq
u
isitions, which consist of the fo
llowing:
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
22
5. Acquisitions (continued)
Gross
Weighted
Average
Amortization
Period
N
on-contractual customer relationships
$ 9,950
9
Trade names
1,460
6
Total intan
g
ible assets
$ 11,410
In 2021, the Company made a measurement period
adjustment of $2,280 to increase the goodwill
associated with the Highline Products, Inc., Suttle
, Inc., and Martin Enterprises acquisitions that
occurred in 2020. The adjustments were due to a decr
ease in the fair
value of the net
assets acquired
due to new facts and circumstan
ces that were unknown at the
time of acquisition. The goodwill
adjustment is expected to be deductible for tax pu
rposes. This adjustment also included an increase
of $1,015 to non-contractual customer
relationships intangibles.
During 2020, the Company acquired the following
businesses for total consideration of $133,988:
Business Acquisition
Date
Hi
g
hline Products, Inc.
Januar
y
13
Suttle, Inc.
March 11
Martin Enterprises
Decembe
r
30
The Company obtained control of
the Highline Products, Inc, Suttle
, Inc. and Martin Enterprises
businesses by entering into asset purchase agreem
ents. The businesses listed above manufacture
precast concrete and stormwater management
products. Related to these acquisition
s, the
Company incurred $750 in costs wh
ich are recognized in the Comp
any’s selling, general, and
administrative expenses.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
23
5. Acquisitions (continued)
These acquisitions were accounted for by the acquisition method of accounting and do not include
any deferred consideration. The results of opera
tions are included in the accompanyi
ng financial
statements since the respectiv
e acquisition dates.
The initial acquisition ac
counting is incomplete
as the Company continues to accumulate info
rm
ation for valuation of
acquired fixed assets.
The principal factor contributing
to the recognition of goodwill in th
e acquisitions is the potential
realization of cost savings and s
ynergies with existing compan
ies.
The following table summarizes the fair values o
f
the assets acquired and li
abilities assumed at the
date of acquisition:
Accounts receivable
$ 11,291
Inventories
8,824
Accounts pa
y
able
(4,051)
Propert
y
, plant, and equipment
25,669
Deferred tax
-
Other assets
351
Goodwill
69,462
Intan
g
ible assets
23,351
Other liabilities
(913)
Fair value of net assets acquire
d
133,984
Deferred consideratio
n
-
Cash consideratio
n
$ 133,984
Of acquired goodwill, the total amount expected to
be deductible for tax purposes is $
69,462. For
the year ended December
31, 2020, the Company acquire
d intangible assets s
ubject to amortization
valued at $23,351 through the acquisitions
, which consist of the following:
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
24
5. Acquisitions (continued)
Gross
Weighted
Average
Amortization
Period
N
on-contractual customer relationships
$ 21,581
5
Trade names
1,770 10
Total intan
g
ible assets
$ 23,351
In 2020, the Company made a measurement period adjustment of $1,457 to the goodwill associated
with the Torrent Resources, Inc. acquisition that
occurred in 2019. The adjustment was due to an
increase in consideration paid
of $542 and increase of liab
ilities of $915. Th
e entire goodwill
adjustment is expected to be de
ductible for tax purposes. These ad
justments were due
to new facts
and circumstances that were
unknown at the time of acquisition.
6. Transfer of Assets
During 2021, certain assets
related to a facility were transfe
rred by the Company to another CRH
wholly owned subsidiary. The following table summarizes the book values of the assets and
liabilities transferred:
Property, plant, and equipment
$
10,595
Carrying value of net assets transferred
$ 10,595
The transfer was accounted for as
a book value transfer between
entities under co
mmon control,
as such the net assets were transferred at cost a
nd no gain or loss was r
ecognized on the transaction.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
25
7. Disposal
During 2021, the Company sold certain
assets and liabilities related to
one facility to third parties
for total consideration of $15,820. Re
lated to this disposal, the Co
mpany incurred $400 in costs
which are recognized in the Company’s sel
ling, general, and administrative expenses.
The following table summarizes th
e facility’s carryin
g values of the ass
ets
and liabilities sold in
2021 and proceeds received. A net loss of $19,599 wa
s recognized on the transaction
s, which is
recorded in selling, general a
nd administrative expenses in
the accompanying consolidated
statement of operations for the
month ended December 31, 2021.
Inventories
$ 162
Account receivables, net
5,077
Propert
y
, plant, and equipment
4,561
Goodwill
20,874
Accounts pa
y
able
(1,640)
Other liabilities
5,985
Carr
y
in
g
value of net assets sold
35,019
Total cash proceeds receive
d
15,820
Disposal Costs
(400)
Loss reco
g
nized on sale
$ (19,599)
8. Goodwill and Other
Intangible Assets
As of December
31,
2021, total intangible a
ssets subject to amortization consisted of
the following:
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
26
8. Goodwill and Other Intang
ible Assets (continued)
Gross
Accumulated
Amortization
Net
Balance
N
on-compete a
g
reements
$ 5,305
$ 4,068
$ 1,237
N
on-contractual customer relationships
121,354 35,754 85,600
Trade names
20,903 9,703
11,200
Backlo
g
198 198
–
Total intan
g
ible assets
$
147,760 $
49,723 $
98,037
As of December
31,
2020, total intangible a
ssets subject to amortization consisted of
the following:
Gross
Accumulated
Amortization
Net
Balance
N
on-compete a
g
reements
$ 5,305
$ 3,709
$ 1,596
N
on-contractual customer relationships
67,358 21,777 45,581
Trade names
12,803 7,291 5,512
Backlo
g
198 198
–
Total intan
g
ible assets
$ 85,664
$ 32,975
$ 52,689
Amortization expense for intangible assets
for the years ended December 31, 2021 and 2020, was
$16,748 and $10,603 respectively. The following repres
ents the estimated
amortization expense
for intangible assets for each
of the years ind
i
cated:
2022 $
24,511
2023 23,787
2024 22,034
2025 15,962
2026 9,926
Thereafte
r
1,817
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
27
8. Goodwill and Other Intang
ible Assets (continued)
The changes in the carrying value of goodwill for the years ended Decemb
er
31, 2021 and 2020,
are as follows:
2021 2020
Balance as at the be
g
innin
g
of the
y
ear
$ 312,916
$ 241,997
Add acquired on business combinations durin
g
the
y
ea
r
244,775
69,462
Add measurement period ad
j
ustment
2,280
1,457
Less disposal of businesses
(20,874)
–
Balance as at the end of the
y
ear
$ 539,097
$ 312,916
9. Pension and Profit-Sharing Plans
The Company has various defined contribution reti
rement plans. Total em
ployer contributions
related to the above plans were $6,513 and
$4,665 for the years ended December
31, 2021 and
2020, respectively. The Company has no liability to these plans beyond the annual
discretionary contributions.
10. Multi-employer Plans
The Company participates in a number of multi-e
mployer p
lans. Total employer expense re
lated
to those plans was $1,058 and $1,627
in 2021 and 2020, respectively.
11. Leases
The Company enters into leases
for a range of
assets, principally rela
ting to property. These
property leases have varying term
s, renewal rights and escalation cl
auses, includi
ng periodic rent
reviews linked with a consumer
price index and/or other indices. The Company also leases p
lant
and machinery, vehicles and equipment. Our leases
have remaining le
ase terms of 1 year to 1
2
years, some of which include opti
ons to extend the leases
for up to 31 years, and some of which
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
28
11. Leases (continued)
include options to terminate within 1 year. The
terms and conditions of these leases do not impose
significant financial restri
ctions on the Company.
The components of lease expe
nse were as follows for 2021:
2021
Operatin
g
lease cost
$
1,860
Finance lease cost:
Amortization of ri
g
ht-to-use assets
$
654
Interest on lease liabilities
496
Total finance lease cost
$
1,150
Supplemental cash flow info
rmation related leases we
re as follows for 2021:
2021
Cash paid for amounts in
cluded in the measurement
of lease liabilities:
Operatin
g
cash flows from operatin
g
leases
$
6,526
Operatin
g
cash flows from finance leases
487
Financin
g
cash flows from finance leases
496
Ri
g
ht-of-use assets obtained in exchan
g
e for lease obli
g
ations
Operatin
g
leases
51,696
Finance leases
9,820

CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
29
11. Leases (continued)
Supplemental balance sheet information rela
ted to leases was as follow for 2021:
2021
Operating leases
Ri
g
ht of use asset, net
$
51,696
Short-term lease liabilities
7,655
Lon
g
-term lease liabilities
47,009
Total operatin
g
lease liabilities
54,664
Finance leases
Propert
y
and equipment, at cost
11,041
Accumulated depreciation
(1,221)
Propert
y
and equipment, net
9,820
Short-term lease liabilities
817
Lon
g
-term lease liabilities
9,406
Total finance leas
e liabilities
$
10,223
2021
Wei
g
hted avera
g
e remainin
g
lease term:
Operatin
g
leases
10
y
ears
Finance leases
29
y
ears
Wei
g
hted avera
g
e discount rate
Operatin
g
leases
3.4%
Finance leases
4.8%
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
30
11. Leases (continued)
Maturities of lease liabiliti
es were as follows for 2021:
Operating
Leases
Finance
Leases
2022 $
7,779
$
833
2023 8,048
801
2024 7,025
701
2025 6,924
618
2026 6,111
618
Thereafte
r
29,454
15,453
Total lease pa
y
ments 65,341
19,024
Less imputed interest
(10,838)
(8,801)
Total
$ 54,503
$ 10,223
The components of lease expe
nse were as follows for 2020:
2020
Operatin
g
lease cost
$
1,978
Finance lease cost:
Amortization of ri
g
ht-to-use assets
$
567
Interest on lease liabilities
508
Total finance lease cost
$
1,075
Supplemental cash flow info
rmation related leases we
re as follows for 2020:
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
31
11. Leases (continued)
2020
Cash paid for amounts in
cluded in the measurement
of lease liabilities:
Operatin
g
cash flows from operatin
g
leases
$
6,379
Operatin
g
cash flows from finance leases
370
Financin
g
cash flows from finance leases
508
Ri
g
ht-of-use assets obtained in exchan
g
e for lease obli
g
ations
Operatin
g
leases
42,458
Finance leases
10,111
Supplemental balance sheet information rela
ted to leases was as follow for 2020:
2020
Operating leases
Ri
g
ht of use asset, net
$
42,458
Short-term lease liabilities
6,124
Lon
g
-term lease liabilities
39,517
Total operatin
g
lease liabilities
45,641
Finance leases
Propert
y
and equipment, at cost
10,678
Accumulated depreciation
(567)
Propert
y
and equipment, net
10,111
Short-term lease liabilities
869
Lon
g
-term lease liabilities
9,502
Total finance leas
e liabilities
$
10,371
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
32
11. Leases (continued)
2020
Wei
g
hted avera
g
e remainin
g
lease term:
Operatin
g
leases
10
y
ears
Finance leases
30
y
ears
Wei
g
hted avera
g
e discount rate
Operatin
g
leases
4.3%
Finance leases
5.0%
12. Long-Term Debt and Short-Term Borrowings
As of December 31, 2021, and 2020, long-term
debt consists of the following:
December 31
2021 2020
Global bond, guaranteed by CRH plc, due 2021; interest payable
semiannually on January 15 and July
15 at an annual
rate of
5.75%
$ -
$ 399,988
Global bond, guaranteed by CRH plc, due 2025; interest payable
semiannually on May 18 and November 18 at an annual rate of
3.88%
1,277,673
1,318,691
Global bond, guaranteed by CRH plc, due 2033; interest payable
semiannually on April 15 and Octobe
r 15 at an annual rate of
6.40%
355,814
360,532
Global bond, guaranteed by CRH plc, due 2045; interest payable
semiannually on May 18 and November 18 at an annual rate of
5.13%
491,757
491,405
2,125,244
2,570,616
Included in Due from Parent and affiliates, ne
t
(87,445)
(87,44
5)
Current maturities of long-term deb
t
-
(399,998)
Long-term deb
t
$ 2,037,799
$ 2,083,183
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
33
12. Long-Term Debt and Short-T
erm Borrowings (continued)
The carrying value of long-term debt is adjusted fo
r the effects of discounti
ng on the original issue,
the original issuance costs and in
terest rate swap agreements acc
ounted for as fair value hedges,
including those de-designated in prior years. The tota
l adjustments of $75,243 and $120,616 at
December 31, 2021 and 2020, respectively,
are reflected as a net increa
se in the carrying value of
the related debt.
The total balance of $87,445 of
global bonds held by CRH Belgar
d Limited as of December
31,
2021 and 2020 is classified in Due from Parent
and affiliates, net in the accompanying
Consolidated Balance Sheets.
All senior notes and global bonds contain certai
n restrictive covenants including, maintenance of
insurance on the Company’s assets,
limitations on di
sposal of fixed assets
, prompt payments of
taxes and assessments, limitations on sale
s and l
easeback
transactions, and limitations
on the
merger and/or sale of the Company.
Principal maturities of long-term debt
are as follows at
December 31, 2021:
2022
–
2023
–
2024
–
2025 1,277,674
Thereafte
r
847,570
$
2,125,244
At December
31, 2021 and 2020, the par value of
the Company’s long-term deb
t, excluding
adjustments to the carrying value for the effects
of discounting on the original issue and interest
rate swap agreements accounted for
as fair value hedges, was $2,050,000 and $2,450,000,
respectively, while the fair value of
such debt approximated $2,396,628 and $2,895,194,
respectively, based primarily upon Level 2 me
asures within the va
luation hierarchy.
Short-term borrowings primarily
consist of bank overdrafts. The
Company had unsecured lines of
credit with three banks totaling $150,000 at Dece
mber 31, 2021 and three
banks totaling $150,000
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
34
12. Long-Term Debt and Short-T
erm Borrowings (continued)
at December
31, 2020. The various
lines of credit have variable
interest rates based on the
prevailing interest rate at the t
ime of borrowing as well as the le
ngth of time funds are borrowed.
There were no outstanding balan
ces under these lines
of credit at December
31, 2021
and 2020;
however, the Company had $80,424 and $80,408 of
outstanding letters of credit under these
agreements at December
31, 2021 and 2020, re
spectively. At December
31, 2021 and 2020, the
company has letter of credit facilities w
ith one bank for $40,000 of which $20,000 have been
issued at December 31, 2021 and 2020, respectively. Thes
e letters of credit were issued on behalf
of our operating companies.
During 2021 and 2020, the Company and its subsidiaries
paid interest on external debt, net of
interest received on inte
rest rate swaps, of $77,419 and $93,334, respectively.
13. Contingencies and Litigation
The Company is involved in certain
litigation and claims in the or
dinary course of
business. In
management’s opinion, the ultimate
resolution of these matters will
not have a material adverse
effect on the Company’s financial po
sition or results of operations.
14. Costs and Estimated Earnings on Uncompleted Contracts
The details of the Company’s co
sts and billings re
lated to construction contracts, as well as a
reconciliation to the line items in which such
amo
unts are recorded in the accompanying balance
sheets, are as follow:
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
35
14. Costs and Estimated Earnings on Uncompleted Contracts (continued)
December 31
2021 2020
Costs incurred on uncompleted contracts
$ 117,588
$ 130,266
Estimated earnin
g
s
65,027
71,019
Revenue
j
ob to date on uncompleted contracts
182,615
201,285
Less billin
g
s
j
ob to date
182,630
206,331
Contract liabilities/net billings in ex
cess of costs and
estimated earnin
g
s
$ (15)
$ (5,046)
Contract assets/costs and estimated earnings in excess
of
b
illin
g
s
$ 5,780
$ 3,717
Billin
g
s in excess of costs and estimated earnin
g
s
(5,795)
(8,763)
$ (15)
$ (5,046)
15. Related-Party Transactions
The Company participates in a centralized cash
management system with CRH Americas whereby
excess cash is invested to maximize the return to
system participants. The Company also performs
certain treasury and finance func
tions on behalf of the Group.
The Company has loans totaling $2,250,000 due to
CRH SMW Finance DAC as of December 31,
2021 and 2020, which are classified in Due from Parent and affiliates, net in the accompanying
Consolidated Balance Sheets.
The amounts due from Parent a
nd affiliates inc
luded in the accom
panying Consolid
ated Balance
Sheets of $2,980,890 and $4,058,170 at December
31, 2021 and 2020, respectively, represent
loans, income tax accounts, and related accrued intere
st due from Parent and affiliates. With th
e
exception of the notes with CRH SMW Finance
DAC, and bonds held by CRH Belgard Limited,
these amounts are due on demand; however, it is th
e intention of manageme
nt of Parent and CRH
plc not to pay or call the am
ounts due or receivable within
the next twelve months.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
36
15. Related-Party Transactions (continued)
At December 31, 2021 and 2020, the Company’s outstandi
ng balances (n
oted above) with Parent
and affiliates included the following entities:
Bel
g
ard Finance Compan
y
, Inc.
CRH North America Luxembourg SARL
CRH SMW Finance DAC
CRH Finance America, Inc.
CRH America Finance, Inc.
CRH Bel
g
ard Limite
d
Oldcastle Investments Compan
y
LLC
CRH Americas, Inc.
Oldcastle Buildin
g
Products, Inc.
Oldcastle Distribution, Inc.
Oldcastle Finance, Inc.
Oldcastle Holdin
g
s, Inc.
Oldcastle Buildin
g
Envelope, Inc.
CRH Americas Materials, Inc. and Subsidiaries
The amounts receivable from Paren
t
and affiliates classifi
ed as a non-cur
rent asset include bo
th a
series of long-term notes payab
l
e to and long-term notes receivabl
es from a wide array of the
related parties noted above.
At December
3
1, 2021, the outstan
ding long-term notes
payable to Parent and affiliates from
$87,445 to $1,750,000, with maturity dates ranging
from December 15, 2026 to October 15, 2033,
and interest rates ranging
from 5.00% to 6.40%. At
December
31, 2021, the outstanding short-
term notes payable to Parent
and affiliates range
d from $8
2
,725 to $500,000, w
ith maturity dates
ranging from August 23, 2022 to October 11,
2022, and interest rates of 5.00%.
At December
31, 2021, the outstanding l
ong-term notes receivable from
Parent and affiliates of
$23,300 with maturity date of December 3
1, 2023, a
nd interest rate of 5.50%. At December 31,
2021, the outstanding short-term
notes receivable from Parent a
nd affiliates ranged from $140,000
to $640,000 with maturity dates
ranging from July 23,
2022 to August 23, 2022, a
nd interest rates
ranging from 5.00 to 5.50%. These bala
nces are included in Due from Pa
rent and affilia
tes, net in
the Consolidated Balance Sheets.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
37
15. Related-Party Transactions (continued)
At December
31, 2020, the outstanding long-term notes
pay
able to Parent and affiliates ranged
from $82,725 to $1,750,000, with matu
rity dates ranging from
August
23, 2022 to October
15,
2033, and interest rates ranging from 5.00% to 6.40%.
At December
31, 2020, the outstanding long-term no
tes receivable from Pare
nt and affiliates
ranged from $23,300 to $640,000 with maturity dates
ranging from July 23, 2022 to December
31,
2023, and interest rates ranging
from 5.00 to 5.50%. These balanc
es are included in Due from
Parent and affiliates, net in the Consolida
ted Balance Sheets.
For the years ended December
31, 2021 and 2020, the Company had the following significant
transactions with the
Parent and affiliates:
The Company pays interest e
xpense on amounts due and receiv
es interest income on amounts
owed to them from the Parent and affili
ates. During 2021 and 2020, the Company and its
subsidiaries paid net interest of $58,765 a
nd $55,224, respectively, on loans to the Parent and
affiliates.
Interest income, net presented in the accompa
nying Consolidated Statemen
ts of Operations
includes interest earned on amounts due
from the Parent and affiliates of
$197,272
and $215,991
in 2021 and 2020, respectively. The interest inco
me reimburses the Company for a portion of
external interest expense incurr
ed by the Company. The amount is
determined at management’s
discretion.
Interest expense presented in the accompanying C
onsolidated Statements of Operations includes
interest incurred on am
ounts due to the
Parent and affiliates
of $123,795 and $124,207 in 2021
and 2020, respectively.
The Company participates in insurance plans admi
nistered by Parent under which it is fully insured
for general liability and workers’ co
mpensation cl
aims and pays an annual premium. Premiums
paid to Parent for insurance in 2021
and 2020 were $11,163 and $9,748, respectively. The
Company also participates in a health insura
nce plan administered by Parent under which the
Company is charged for actual claims incurred a
nd records an accrual for estimated in
curred but
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
38
15. Related-Party Transactions (continued)
unreported claims. Claims expense under this
health insurance plan in 2021 and 2020 was $26,960
and $26,999, respectively.
Guarantee fees totaling $1,910 a
nd $2,063 in 2021 and 2020, respectivel
y, are included in other,
net in the accompanying Consolidated Statements
of Operations and re
flect the net amount of
guarantee fees charged by CRH plc and the am
ount charged to affiliated companies.
Included in selling, general, a
nd administrative expenses are
management fees charged by
CRH plc of $22,139 and $15,569 in 2021 and 2020, respectively.
16. Financial Instruments
The Company accounts for derivative instruments in accordance with ASC 815,
Derivatives and
Hedging
, which requires the recognition
of all deri
vative instrument
s in the accompanying
Consolidated Balance Sheets at fair value. The Comp
any enters into inte
rest rate swap agreements
to reduce the impact of changes in interest rates
relating to the issuance of long-term debt and to
manage the Company’s overall level
of fixed and variable interest
rate debt to a targeted range.
The following table summarizes th
e types of derivative financia
l instruments utilized by the
Company and the related fa
ir values, which are r
ecord
ed in the in
terest rate
swap line items
in the
accompanying Consolidated Balanc
e Sheets:
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
39
16. Financial Instruments (continued)
Fair Value of Derivative Financial Instruments
Assets
Type of Derivative
Financial Instrument
2021
Fair Value
2020
Fair Value
Derivatives designated as
hed
g
in
g
instruments
Interest rate swaps
$ 32,302
$ 73,882
Total
$ 32,302
$ 73,882
The effect of derivative financial instruments
in the accomp
anying Consolidated Statements of
Operations for the years ended
December 31, 2021 and 2020 include:
Derivatives in Fair
Value Hedging
Relationships
Location of Gain
Recognized in Income
on Derivatives
Amount of Gain
Recognized
in Income on Derivatives
2021
2020
Interest rate swaps
Change in fair value of
derivatives and fixed rate debt
$ (41,645)
$ 51,245
Hedged Items in
Fair Value Hedge
Relationships
Location of (Loss)
Recognized in Income
on Related Hedged Item
Amount of (Loss)
Recognized
in Income on Related
Hedged Items
2021
2020
Fixe
d
rate debt
Change in fair value of
derivatives and fixed rate debt
$ 41,766
$ (49,146)
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
40
16. Financial Instruments (continued)
As of December
31, 2021, and 2020, the Company had six fixed-to-variable interest rate swap
agreements outstanding with co
mmercial banks having a total
notional amount of $875,000 that
were designated as fair value hedges re
lated to the Company’s long-term debt.
The Company is exposed to credit loss in the even
t of nonperformance by the other parties to the
interest rate swap ag
reements; however, the Company does
not anticipate nonperformance by the
counterparties due to their hi
gh credit ratings. During 2021 and
2020, the fixed interest rate
received exceeded the variable in
te
rest rate pa
id on all interest ra
te swap agreements, resulting in
the Company receiving a weighted average interest rate, net
of 2.08% and 1.38%, respectively.
Weighted average variable rates are based on rates
imp
lied in the yield curve as of December
31,
2021 and 2020, which are primarily based upon London Interbank Offering Rate
(LIBOR)
indices.
17. Fair Value Measurements
Accounting Standards Codification 820,
Fair Value Measurement
, defines fair value as the
exchange value of an asset or a liability in an
orderly transaction between
market pa
rticipants and
outlines a valuation framework and crea
tes a fair
value hierarchy in order to increase the
consistency and comparability of fair value meas
urements and the rela
ted disclosures. The thre
e
broad fair value hierarchy le
vels are defined as follows:
Level 1
Quoted prices (unadjusted) in active mark
ets for identical asse
ts or liabilities.
Level 2
Consists of observable market data, other than that included in Level
1, which is
either directly or indirectly observable.
Level 3
Consists of unobservable market data. Th
e input may reflect the assumptions of the
entity, not a market participant, little availabl
e market data,
and the entity’s own assu
mptions
that are considered by management to
be the best availa
ble information.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
41
17. Fair Value Measurements (continued)
The Company records assets and liabilities at fa
ir value on a recurring
and nonrecurring basis as
required by U.S. GAAP. The carrying amounts reflec
ted in the consolidated balance sheets for
cash and cash equivalents, accounts receivable, accounts payable, and accru
ed liabilities
approximate fair values due to their short matu
ri
ties. The carrying amounts
of long term debt and
finance leases approximate their fa
ir values because changes in the
applicable credit spreads have
not had a material impact on the fair value
of long term debt
and finance leases.
The following financial assets were measur
ed at fair value on
a recurring basis:
Fair Value Measurements Using
Year Ended
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Interest rate swaps

Decembe
r
31, 2021
$
–
$
32,302 $
–
$
32,302
Decembe
r
31, 2020
–
73,882
–
73,882
The fair value of the Company’s interest rate
swaps is based on a model-
driven valuation using
the forward LIBOR yield curve and a credit valuat
ion adjustment to incorporate counter-party
credit risk.
Generally, nonfinancial assets
are recorded at fair value on
a nonrecurring basis
as a result of
recording impairment charges. Assets measu
r
ed on a nonrecurring basi
s for the years ended
December
31, 2021 and 2020 included assets held for sale, w
hich were valued using Level
2 inputs
and resulted in the fair va
lues disclosed in Note 4.
CRH America, Inc. and Subsidiaries
(Ultimately Wholly Owned Subsidiaries of CRH plc,
a Republic of Ireland Corporation)
Notes to Consolidated Financial Statements (continued)
(In Thousands)
1904-3145183
42
18. Workforce
The Company had a workforce of 3,682 at Decem
ber
31, 2021 of which 11% were subject to
collective bargaining agr
eements. Of this 11%, 14
2 employees are subject
to renegotiation in 2022.
Negotiations will be ongoing throughout 2022 with
the
different parties, and the Company foresees
no related work stoppages. At December
31, 2
020, the Company had a workforce of 2,927, of
which 14% were subject to coll
ective bargaining agreements.
19. Subsequent Events
On April 18, 2022, the Company acquired certain assets
from a third party by entering into an asset
purchase agreement for cash consideration of $344,661 allowing the Company to increase its
precast product line.
The Company has evaluated whether any additio
nal
subsequent events have occurred that would
require disclosure or recognition
in these financial statements and conc
luded that no additional
disclosure or recognition is
necessary. The evaluation was pe
rformed through April 26, 2022, the
date the financial sta
tements were available to be
issued.