C

ONSOLIDATED

F

INANCIAL

S

TATEMENTS

CRH America, Inc. and Subsidiaries

(Ultimately, Wholly Owned Subsidiaries of CRH plc,

a Republic of Ireland Corporation)

As of and for the Years Ended December 31, 2022 and 2021

and Independent Auditor’s Report

CRH America, Inc. and Subsidiaries

(Wholly Owned Subsidiaries of CRH plc,

a Republic of Ireland Corporation)

Consolidated Financial Statements

As of and for the Years Ended December 31, 2022 and 2021

Table of Contents

Independent Auditor’s Report

......................................................................................................

1-2

Consolidated Financial Statements

Consolidated Balance Sheets

.......................................................................................................

3-4

Consolidated Statements of Operations

...........................................................................................

5

Consolidated Statements of Shareholder’s Equity

...........................................................................

6

Consolidated Statements of Cash Flows

..........................................................................................

7

Notes to Consolidated Financial Statements

..............................................................................

8-40

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 sheets as of December 31, 2022 and 2021 and the related

consolidated statements of operations, shareholder’s equity, and cash flows for the years then ended,

and the related notes to the

consolidated

financial statements (collectively referred 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, 2022 and 2021, and the 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 accepted 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 appropriate to provide a basis for our audit opinion.

Emphasis

‐

of

‐

Matter—Related Parties

As discussed in the financial statements in Note 15, 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 from the separate records

maintained for the Company and may not necessarily be indicative of the conditions that would have

existed or the results of operations if the Company had operated as an unaffiliated company from CRH

plc and its subsidiaries.

Portions of certain income and expense represent allocations made from items applicable to CRH plc

and its subsidiaries as a whole.

Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in

accordance with accounting principles generally accepted in the United 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.

‐

2

‐

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

available to be

issued

issued.

Auditors’ Responsibilities for the Audit of the Financial Statements

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 likelihood 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 professional skepticism throughout the audit.

•

Identify and assess the risks of material misstatement 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, evidence regarding the amounts and disclosures 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 internal control. Accordingly, no such opinion is expressed.

•

Evaluate the appropriateness of accounting policies used and the reasonableness 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 conditions 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 charged with governance regarding, among other matters,

the planned scope and timing of the audit, significant audit findings, and certain internal control

‐

related

matters that we identified during the audit.

April 21, 2023

2022

2021

Assets

Current assets:

Cash and cash equivalents

978,423

$

488,236

$

Accounts receivable, less allowance for doubtful

accounts of

$10,470 and $9,600, respectively

351,658

291,572

Inventories

353,478

235,019

Costs and estimated earnings in excess of billings

8,633

5,780

Other current assets

22,984

20,598

Current portion of due from Parent and affiliates, net

–

348,848

Total current assets

1,715,176

1,390,053

Operating lease right of use assets

55,063

51,696

Property, plant, and equipment, net

493,681

363,482

Due from Parent and affiliates, net

2,870,291

2,632,042

Interest rate swaps

–

32,302

Goodwill

778,977

539,097

Identifiable intangible assets, net

197,187

98,037

Total assets

6,110,375

$

5,106,709

$

Consolidated Balance Sheets

(In Thousands)

CRH America, Inc. and Subsidiaries

a Republic of Ireland Corporation)

(Wholly Owned Subsidiaries of CRH plc,

As of December 31

3

2022

2021

Liabilities and shareholder’s equity

Current liabilities:

Accounts payable

182,711

$

128,233

$

Accrued payroll

66,725

37,445

Accrued interest

11,462

11,560

Other accrued expenses

99,479

82,504

Billings in excess of costs and estimated earnings

3,864

5,795

Operating lease obligations

9,903

7,655

Finance lease obligations

786

817

Current portion of due from Parent and affiliates, net

476,700

–

Total current liabilities

851,630

274,009

Operating lease obligation, net of current portion

48,570

47,009

Finance lease obligation, net of current portion

9,084

9,406

Deferred tax liabilities, net

52,111

28,394

Long-term debt

1,959,338

2,037,799

Interest rate swaps

47,552

–

Other liabilities

–

77

Total Liabilities

2,968,285

$

2,396,694

Shareholder’s equity:

Common stock, $0.01 par value: 10,000 shares

authorized; 2,500 shares issued and outstanding

–

–

Paid-in capital

1,572,027

1,571,075

Retained earnings

1,570,063

1,138,940

Total shareholder’s equity

3,142,090

2,710,015

Total liabilities and shareholder’s equity

6,110,375

$

5,106,709

$

See accompanying notes.

(In Thousands, Except Share Data)

CRH America, Inc. and Subsidiaries

(Wholly Owned Subsidiaries of CRH plc,

a Republic of Ireland Corporation)

Consolidated Balance Sheets

As of December 31

(In Thousands)

4

2022

2021

Net sales from contracts with customers

2,290,673

$

1,397,147

$

Cost of sales

1,361,893

959,120

Gross profit

928,780

438,027

Selling, general, and administrative expenses

367,134

252,615

Operating income

561,646

185,412

Other income (expense):

Interest income

238,105

233,351

Interest expense

(230,177)

(211,421)

Change in fair value of derivatives and fixed rate debt, net

(184)

122

Other income, net

1,802

1,896

9,546

23,948

Income before provision for income taxes

571,192

209,360

Provision for income taxes

140,069

50,060

Net income

431,123

$

159,300

$

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, 2021

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

$

Employee stock compensation expense

–

–

952

–

952

Net income

–

–

–

431,123

431,123

Balance at December 31, 2022

2,500

–

$

1,572,027

$

1,570,063

$

3,142,090

$

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

2022

2021

Operating activities

Net income

431,123

$

159,300

$

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation and amortization

104,299

61,318

Amortization of loan issuance costs and discounts

1,232

1,244

(Loss) Gain

on sale of property, plant, and equipment

879

(242)

Gain on lease disposal and remeasurements

–

(74)

Employee stock compensation expense

952

1,614

Deferred income tax expense

(193)

(12,834)

Loss on Divestment

–

19,599

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

184

(122)

Changes in operating assets and liabilities, net of

the effects of business acquisition:

Accounts receivable, net

(48,407)

(14,802)

Inventories

(74,223)

(38,025)

Other assets

(2,122)

441

Accounts payable

and other current liabilities

89,392

5,795

Billings in excess of costs and costs in excess

of billings on contracts in progress, net

(4,784)

(5,031)

Net cash provided by operating activities

493,482

173,331

Investing activities

Acquisition of businesses

(482,652)

(418,309)

Purchases of property, plant, and equipment

(107,944)

(48,162)

Proceeds from Divestments

–

15,420

Changes in due from Parent and affiliates, net

587,298

1,087,874

Proceeds from sales of property, plant, and equipment, net of disposal costs

903

4,202

Net cash (used in) /provided by investing activities

(2,395)

641,025

Financing activities

Principal payments of long-term borrowings

–

(400,000)

Deferred consideration payments

(900)

(350)

Net cash used in financing activities

(900)

(400,350)

Increase in cash and cash equivalents

490,187

414,006

Cash and cash equivalents at beginning of year

488,236

74,230

Cash and cash equivalents at end of year

978,423

$

488,236

$

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

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, 2022

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 subsidiary of CRH Americas, Inc. (CRH Americas or

Parent), a holding company whose ultimate parent is CRH plc, a Republic of Ireland corporation.

CRH Americas, Inc. and its subsidiaries (Group) are engaged in the production and supply of

building materials to a wide and varied customer base within the United States. The Group is

organized into two core product-based business groups:

•

Building Products (primarily block, pavers, precast, fabricated glass, and lawn and

garden products)

•

Materials (primarily aggregates, cement, ready-mixed concrete, and asphalt supply and

paving)

The Company consists of the operations 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 prepared in conformity with U.S. generally

accepted accounting principles (US GAAP) comprise those of the Company, and its wholly owned

subsidiary Oldcastle Infrastructure Inc., (Oldcastle Infrastructure).

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)

9

2. Summary of Significant Accounting Policies (continued)

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires

management to make estimates and assumptions that affect the amounts reported in the

consolidated financial statements and accompanying notes. In addition to accounting related to

uncertain tax provisions, we also make certain estimates for legal provisions and other

contingencies. While we believe that these estimates 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 liquid investments with an original maturity of three months or

less to be cash equivalents. Cash and cash equivalents were $978,423 and $488,236 at

December 31, 2022 and 2021, respectively.

Accounts Receivable and Allowances

Accounts receivable consists of customer payments due but not received. Accounts receivable are

recorded at their original amount less an estimated allowance for any doubtful accounts. An

allowance is made when collection of the full amount is no longer considered probable.

Financial Instruments

The Company’s financial instruments at December 31, 2022 and 2021, consist primarily of cash

and cash equivalents, accounts receivable, accounts payable, short-term borrowings, long-term

debt, and interest rate swap agreements. Due to the short maturities of cash and cash equivalents,

accounts receivable, accounts payable, and short-term borrowings, carrying amounts approximate

the respective fair values. Accordingly, such financial instruments were valued based upon Level 1

measures within the valuation hierarchy. See Note 17 for disclosures 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)

10

2. Summary of Significant Accounting Policies (continued)

Credit Risk

Substantially all of the Company’s accounts receivable are due from companies in, or related to,

the construction industry in the United States. The Company performs periodic credit evaluations

of its customers’ financial condition and generally does not require collateral. The Company does

not believe significant credit risk exists at December 31, 2022 and 2021 related to accounts

receivable. Receivables are generally due within 30 days, although extended terms may be granted.

Financial instruments give rise to credit risk on amounts due from counterparties. Credit risk is

managed by limiting the aggregate amount and duration of exposure to any one counterparty

primarily depending on its credit rating and by regular review of these ratings. The Company

transacts with counterparties that have high investment grade credit ratings. The maximum

exposure arising in the event of default on the part of the counterparty is the carrying value of the

relevant financial instrument. The Company places its temporary cash investments and investment

grade short-term investments in high credit quality financial institutions and limits the amount of

credit exposure to any one entity.

Inventories

Inventories are stated at the lower of cost or net realizable value and are valued principally on the

weighted average cost method. Elements of cost in inventories include raw materials, direct labor,

and manufacturing overhead. To properly provide for potential exposure due to slow-moving,

excess, obsolete or unusable inventory, inventory values are reduced based on forecasted usage,

orders, and inventory aging. These factors are impacted by market conditions, and changes in

strategic direction, and require estimates and management judgment 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, and improvements have useful lives that range from 7 to 40

years. Machinery and equipment 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)

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 asset is classified as held for sale.

Leases

The Company determines if an arrangement is a lease at inception. Right of use assets related to

operating lease assets are included in the consolidated balance sheets. The related liabilities are

included in short-term lease liabilities and long-term lease liabilities in the consolidated balance

sheets. Right of use assets related to finance leases are included in property, plant, and equipment

and related liabilities are included in short-term lease liabilities and long-term lease liabilities in

the Company’s consolidated balance sheets

Leased assets represent our right to use an underlying asset for the lease term and lease liabilities

represent our obligation to make lease payments arising from the lease. Operating lease related

assets and liabilities are recognized at commencement date based on the present value of lease

payments over the lease term, discounted using the incremental borrowing 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 made and excludes lease incentives. The Company’s

lease terms may include options to extend or terminate the lease when it is reasonably certain that

the Company will exercise that option. Lease expense for lease payments is recognized on a

straight-line basis over the lease term.

Non-lease components in a contract such as maintenance and other service charges are separated

from minimum lease payments and are expensed as incurred.

Goodwill and Other Intangible Assets

Goodwill represents the amount by which the total purchase price the Company has paid to acquire

businesses exceeds the estimated fair value of the net identifiable assets acquired. Goodwill and

intangible assets with definite lives are evaluated annually for impairment or whenever events or

changes in circumstances indicate that impairment 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)

12

2. Summary of Significant Accounting Policies (continued)

Oldcastle Infrastructure is the only reporting unit with goodwill. As such, the Company has

developed and completed impairment tests on the Oldcastle Infrastructure reporting unit.

When evaluating goodwill for impairment, the Company first performs a qualitative assessment to

determine whether quantitative impairment test is necessary. If, after assessing qualitative factors,

we determine it is more likely than not that the fair value of the reporting unit is less than the

carrying amount, then the quantitative goodwill impairment test is performed. The Company

compares the book value 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 estimates fair value using a discounted cash flow methodology. At

December 31, 2022 and 2021, no impairment adjustments have been required. Intangible assets

that have a finite life, which consist primarily of non-compete agreements, customer relationships,

and trade names, are amortized over their useful lives (from one to ten years) using the straight-

line method.

Revenue Recognition

The Company recognizes revenue in the amount of the price expected to be received for goods

and services supplied at a point in time or over time, as contractual performance obligations are

fulfilled, and control of goods and services passes to the customer. The Company excludes trade

discounts and value-added tax/sales tax.

Revenue derived from sale of goods (sources other than construction contracts)

While the Company manufactures a number of different products; recognition 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 performance obligations

Goods are sometimes sold with discounts or rebates based on cumulative sales over a period.

This variable consideration is only recognized when it is highly probable that it will not be

subsequently reversed and is recognized using the most likely amount or expected value

methods, depending on the individual contract terms. In the application of appropriate 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)

13

2. Summary of Significant Accounting Policies (continued)

recognition, judgement is exercised by management in the determination of the likelihood and

quantum of such items based on experience and historical trading patterns.

The Company is deemed to be a principal to an arrangement when it controls a promised good or

service before transferring them to a customer; and accordingly recognizes revenue on a gross

basis.

Within the non-construction contract businesses, no element of financing is deemed present as

transactions are all made with average credit terms, consistent with market practice. No one

customer accounts for 10% or more of total revenue.

Revenue derived from construction contracts

The Company enters into a number of large construction 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. Management believes this best reflects the transfer of control to the

customer by providing an accurate representation of the enhancement of a customer-controlled

asset or the construction of an asset with no alternative use. The percentage-of-completion method

is used to recognize revenue over time when the outcome of a contract 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 relative to the total estimated costs of the contract.

The Company has an enforceable right to payment for work and performance obligations

completed to date.

Some of the Company's construction contracts may contain forms of variable consideration that

can either increase or decrease the transaction price. Variable consideration is estimated based on

the most likely amount or expected value methods (depending on the contract terms) and the

transaction price is adjusted to the extent it is probable that a significant 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)

14

2. Summary of Significant Accounting Policies (continued)

For the years ended December 31, 2022 and 2021, approximately 3% and 6%, respectively, of

Company revenues were derived under fixed-price contracts from operations.

Recognition of contract assets and liabilities

In our construction contract businesses, amounts are billed as work progresses in accordance with

pre-agreed contractual terms. When a performance obligation is satisfied but a customer has not

yet been billed this is recognized as a contract asset. Retentions are also a common feature of

construction contracts and are recognized as a contract asset within Accounts Receivables when

we have a right to consideration in exchange for 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 construction contracts where the period between the

transfer of the promised goods to the customer 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 generally recognized in the subsequent period when the right to

recognize revenue has been determined. As a result, advance payments received for construction

contract arrangements are not considered a significant form of financing.

Contract costs included all direct material and labor costs and those indirect costs related to

contract performance, such as indirect labor, supplies, tools, and repairs. Provisions for estimated

losses on uncompleted contracts were made in the period in which such losses were determined.

Changes in job performance, job conditions, and estimated profitability, including those arising

from contract penalty provisions, and final contract settlements may result in revisions to costs and

income and are recognized in the period in which the revisions were determined. Profit incentives

were included in revenues when their realization is reasonably assured. An amount equal to

contract costs attributable to claims was included in revenues when realization was probable 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)

15

2. Summary of Significant Accounting Policies (continued)

Advertising Costs

The Company expenses advertising and promotion cost as incurred, which are recognized in the

Company’s selling, general, and administrative expenses. Advertising and promotional costs were

approximately $3,807 and $2,192 during the years ended December 31, 2022 and 2021,

respectively.

Interest Rate Swaps

The Company enters into interest rate swap agreements to reduce the impact of changes in interest

rates relating to the issuance of its debt and to manage the Company’s overall level of fixed and

variable rate debt to a targeted range. The Company recognizes interest rate swaps in the

accompanying Consolidated Balance Sheets at fair value. Changes in fair value for interest rate

swaps that are not designated in qualifying hedge accounting relationships 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 offset 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, 2022 and 2021, the Company recorded stock

compensation expense with a corresponding adjustment to additional paid-in capital of $952 and

$1,614, respectively, under the CRH plc plans.

Income Taxes

Taxable income of the Company is included in the consolidated U.S. federal income tax return of

the Parent. Income tax is computed on a basis that considers the permanent and temporary

differences related to the Company’s operations. The aggregate amounts charged to the Company

for current income tax amounts and deferred income tax amounts related to temporary differences

are $140,069 and $50,060 for the years ended December 31, 2022 and 2021, respectively. Due to

parent and affiliates, net includes $140,262 and $62,894 related to income tax expense for the years

ended December 31, 2022 and 2021, 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)

16

2. Summary of Significant Accounting Policies (continued)

The Company’s income tax expense consists of the following:

Year Ended December 31

2022

2021

Current

$

140,262

$

62,894

Deferred

(193)

(12,834)

Total income tax provision

$

140,069

$

50,060

Deferred income taxes are provided for all significant temporary differences between income

reported for financial reporting and income reported for tax purposes. Deferred income tax assets

arise primarily from the recording of accruals which are not currently deductible for tax purposes

and the fair value adjustments on debt and interest rate swaps.

Deferred income tax liabilities arise primarily from the effect of the use, for income tax purposes,

of accelerated methods of depreciation and the Company’s interest rate swap activities. Deferred

tax assets and liabilities as of December 31, 2022 and 2021 consist of the following:

December 31

2022

2021

Accruals and other reserves

$

41,335

$

3

6

,

884

Total deferred tax assets

$

41,335

$

3

6

,

884

December 31

2022

2021

Property, plant, and equipment

$

(62,217)

$

(

44

,

198

)

Goodwill and intangible assets

(31,229)

(

2

1

,

080

)

Total deferred tax liabilities

$

(93,446)

$

(

6

5,2

78

)

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)

17

2. Summary of Significant Accounting Policies (continued)

The Company recognizes the benefit of uncertain tax 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, 2022, and 2021, the Company’s liabilities for unrecognized tax

benefits of $21,443and $9,394, respectively.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits as

components of the income tax provision. The Company does not have any material interest and

penalties accrued as of December 31, 2022 and 2021, respectively, related to unrecognized tax

benefits.

The Company is subject to taxation by the Internal Revenue Service and various states. The

Company is open to audit and subject to examinations by these tax authorities for the tax years

ending December 31, 2019 through December 31, 2021.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment when circumstances indicate that the carrying value

of the assets may not be fully recoverable. When the carrying value of the asset exceeds the value

of its expected undiscounted future cash flows, an impairment charge is recognized equal to the

difference between the asset’s carrying value and its fair value. No impairment charges were

recognized for the years ended December 31, 2022 and 2021.

Comprehensive Income

For the years ended December 31, 2022 and 2021, there were no material items that gave rise to

other comprehensive income and net income equaled comprehensive income.

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)

18

3. Inventories

Inventories consisted of the following:

December 31

2022

2021

Raw materials

$

79,740

$

56,193

Finished goods

273,738

178,826

$

353,478

$

235,019

4. Property, Plant, and Equipment

Property, plant, and equipment consisted of the following:

December 31

2022

2021

Land, buildings, and improvements

$

333,126

$

304,783

Machinery and

equipment

498,903

463,159

Construction in progress

91,639

37,459

923,668

805,401

Less accumulated depreciation

(429,987)

(441,919)

$

493,681

$

363,482

Depreciation expense for the years ended December 31, 2022 and 2021, was $41,752 and $44,570,

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)

19

5. Acquisitions

On April 18, 2022, the Company acquired certain assets from Rinker Materials, LLC for total

consideration of $348,349.

The Company acquired certain assets from Rinker Materials, LLC by entering into an asset

purchase agreement in order to increase its precast product line. Related to this acquisition, the

Company incurred $750 in costs which are recognized in the Company’s selling, general, and

administrative expenses.

This acquisition was accounted for by the acquisition method of accounting and include no non-

cash consideration. The results of operations are included in the accompanying financial

statements since the acquisition date. The initial acquisition accounting is incomplete as the

Company continues to accumulate information for valuation of net assets acquired.

The principal factor contributing to the recognition of goodwill in the acquisitions is the potential

realization of cost savings and synergies with existing companies.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the

date of acquisition:

Inventories

$

31,282

Property, plant, and equipment

55,016

Goodwill

208,686

Intangible assets

55,660

Other liabilities

(2,295)

Fair value of net assets acquired

$

348,349

Cash consideration

$

348,349

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)

20

5. Acquisitions (continued)

All of the acquired goodwill is expected to be deductible for tax purposes. For the period ended

December 31, 2022, the Company acquired intangible assets subject to amortization valued at

$55,660 through the acquisitions, which consist of the following:

Gross

Weighted

Average

Amortization

Period

Non

-

contractual customer relationships

$

55,660

5

Total intangible assets

$

55,660

During 2022, the Company also acquired the following businesses for total consideration of

$134,303:

Business

Acquisition Date

Normandy Industries, Inc.

Inwesco Inc.

October 21

December 12

The Company obtained control of the Normandy Industries, Inc. business by entering into a stock

purchase agreement and obtained control of Inwesco, Inc. by entering into asset purchase

agreement. The Company purchased Normandy Industries, Inc. and Inwesco, Inc. to increase its

PVC pipe and enclosures solutions product lines. Related to these acquisitions, the Company

incurred $829 in costs which are recognized in the Company’s selling, general, and administrative

expenses.

These acquisitions were accounted for by the acquisition method of accounting and include no

non-cash consideration. The results of operations are included in the accompanying financial

statements since the respective acquisition dates. The initial acquisition accounting is incomplete

as the Company continues to accumulate information for valuation of net assets acquired.

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)

21

5. Acquisitions (continued)

The principal factor contributing to the recognition of goodwill in the acquisitions is the potential

realization of cost savings and synergies with existing companies.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the

date of acquisition:

Accounts receivable

$

11,679

Inventories

12,954

Accounts payable

(5,712)

Property, plant, and equipment

19,894

Deferred tax

(2,510)

Other assets

1,249

Goodwill

95,880

Intangible assets

12,460

Other liabilities

(11,591)

Fair value of net assets acquired

$

134,303

Cash

consideration

$

134,303

Of acquired goodwill, the total amount expected to be deductible for tax purposes is $49,050. For

the period ended December 31, 2022, the Company acquired intangible assets subject to

amortization valued at $12,460 through the acquisitions, which consist of the following:

Gross

Weighted

Average

Amortization

Period

Non

-

contractual customer relationships

$

10,480

5

Trade names

1,980

10

Total intangible assets

$

12,460

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)

22

5. Acquisitions (continued)

In 2022, the Company made a measurement period adjustment of $64,685 to decrease the goodwill

associated with the National Pipe & Plastics, Inc and Hancock Concrete Products, LLC

acquisitions that occurred in 2021. The adjustments were due to a change in the fair value of the

net assets acquired due to new facts and circumstances that existed but were unknown at the time

of acquisition. Of the goodwill adjustment, only $486 is expected to be deductible for tax purposes.

This adjustment included an increase of $85,600 to non-contractual customer relationships

intangibles, a decrease of $21,400 to deferred tax, and an increase of $486 to property, plant, and

equipment.

During 2021, the Company acquired National Pipe & Plastics, Inc. for total consideration of

$336,145.

The Company obtained control of the National Pipe & Plastics, Inc. 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, general, and administrative expenses.

This acquisition was accounted for by the acquisition method of accounting and include no non-

cash consideration. The results of operations are included in the accompanying financial

statements since the acquisition date. The initial acquisition accounting is incomplete as the

Company continues to accumulate information for valuation of net assets acquired.

The principal factor contributing to the recognition of goodwill in the acquisitions is the potential

realization of cost savings and synergies with existing companies.

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)

23

5. Acquisitions (continued)

The following table summarizes the fair values of the assets acquired and liabilities assumed at the

date of acquisition:

Accounts receivable

$

66,086

Inventories

39,154

Accounts payable

(42,478)

Property, plant, and equipment

50,039

Deferred tax

(20,360)

Other assets

2,981

Goodwill

214,417

Intangible assets

49,670

Other liabilities

(23,364)

Fair value of net assets acquired

$

336,145

Cash consideration

$

336,145

The acquired goodwill is not expected to be deductible 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

Non

-

contractual customer relationships

$

43,030

5

Trade names

6,640

5

Total

intangible assets

$

49,670

During 2021, the Company also acquired the following businesses for total consideration of

$82,164:

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)

24

5. Acquisitions (continued)

Business

Acquisition Date

Hancock Concrete Products, LLC

Piranha Pipe & Precast, Inc.

March 12

August 12

The Company obtained control of the Hancock Concrete Products, LLC business by entering into

a stock purchase agreement and obtained control of the Piranha Pipe & Precast, Inc. by entering

into asset purchase agreement. The Company purchased Hancock Concrete Products, LLC and

Piranha Pipe & Precast, Inc. to increase the precast product line. Related to these acquisitions, the

Company incurred $1,303 in costs which are recognized in the Company’s selling, general, and

administrative expenses.

These acquisitions were accounted for by the acquisition method of accounting and include no

non-cash consideration. The results of operations are included in the accompanying financial

statements since the respective acquisition dates. The initial acquisition accounting is incomplete

as the Company continues to accumulate information for valuation of net assets acquired.

The principal factor contributing to the recognition of goodwill in the acquisitions is the potential

realization of cost savings and synergies with existing companies.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the

date of acquisition:

Accounts receivable

$

1,839

Invento

ries

18,504

Accounts payable

(1,050)

Property, plant, and equipment

27,424

Other assets

2,219

Goodwill

30,358

Intangible assets

11,410

Other liabilities

(8,540)

Fair value of net assets acquired

$

82,164

Cash consideration

$

82,164

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)

25

5. Acquisitions (continued)

Of acquired goodwill, the total amount expected to be deductible for tax purposes is $10,628. For

the period ended December 31, 2021, the Company acquired intangible assets subject to

amortization valued at $11,410 through the acquisitions, which consist of the following:

Gross

Weighted

Average

Amortization

Period

Non

-

contractual customer relationships

$

9,950

9

Trade names

1,460

6

Total intangible 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 decrease in the fair value of the net assets acquired

due to new facts and circumstances that existed but were unknown at the time of acquisition. The

goodwill adjustment is expected to be deductible for tax purposes. This adjustment also included

an increase of $1,015 to non-contractual customer relationships intangibles.

6. Transfer of Assets

During 2022, the Company did not have any material transfers of assets.

During 2021, certain assets related to a facility were transferred 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

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)

26

6. Transfer of Assets (continued)

The transfer was accounted for as a book value transfer between entities under common control,

as such the net assets were transferred at cost and no gain or loss was recognized on the transaction.

7. Disposal

During 2022, the Company did not have any material disposals.

During 2021, the Company sold certain assets and liabilities related to one facility to third parties

for total consideration of $15,820. Related to this disposal, the Company incurred $400 in costs

which are recognized in the Company’s selling, general, and administrative expenses.

The following table summarizes the facility’s carrying values of the assets and liabilities sold in

2021 and proceeds received.

A net loss of $19,599 was recognized on the transactions, which is

recorded in selling, general and administrative expenses in the accompanying consolidated

statement of operations for the month ended December 31, 2021.

Inventories

$

162

Account receivables, net

5,077

Property, plant, and equipment

4,561

Goodwill

20,874

Accounts payable

(1,640)

Other liabilities

5,985

Carrying value of net assets sold

35,019

Total cash proceeds received

15,820

Disposal Costs

(400)

Loss recognized on sale

$

(19,599)

8. Goodwill and Other Intangible Assets

As of December 31, 2022, total intangible assets 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)

27

8. Goodwill and Other Intangible Assets (continued)

Gross

Accumulated

Amortization

Net

Balance

Non

-

compete agreements

$

5,305 $

4,317 $

988

Non

-

contractual customer relationships

273,097

87,431

185,666

Trade names

22,883

12,350

10,533

Backlog

198

198

–

Total intangible assets

$

301,483 $

104,296 $

197,187

As of December 31, 2021, total intangible assets subject to amortization consisted of

the following:

Gross

Accumulated

Amortization

Net

Balance

Non

-

compete agreements

$

5,305

$

4,068

$

1,237

Non

-

contractual customer relationships

121,354

35,754

85,600

Trade names

20,903

9,703

11,200

Backlog

198

198

–

Total

intangible assets

$

147,760

$

49,723

$

98,037

Amortization expense for intangible assets for the years ended December 31, 2022 and 2021, was

$54,570 and $16,748 respectively. The following represents the estimated amortization expense

for intangible assets for each of the years indicated:

2023

$

30

,

605

2024

60

,

144

2025

55

,

311

2026

3

5

,

109

2027

12

,

864

Thereafter

3

,

154

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)

28

8. Goodwill and Other Intangible Assets (continued)

The changes in the carrying value of goodwill for the years ended December 31, 2022 and 2021,

are as follows:

2022

2021

Balance as at the beginning of the year

$

539,097

$

312,916

Add acquired on business

combinations during the year

304,566

244,775

Add measurement period adjustment

(64,686)

2,280

Less disposal of businesses

-

(20,874)

Balance as at the end of the year

$

778,977

$

539,097

9. Pension and Profit-Sharing Plans

The Company has various defined contribution retirement plans. Total employer contributions

related to the above plans were $7,493 and $6,513 for the years ended December 31, 2022 and

2021, 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-employer plans. Total employer expense related

to those plans was $1,303 and $1,058 in 2022 and 2021, respectively.

11. Leases

The Company enters into leases for a range of assets, principally relating to property. These

property leases have varying terms, renewal rights and escalation clauses, including periodic rent

reviews linked with a consumer price index and/or other indices. The Company also leases plant

and machinery, vehicles and equipment. Our leases have remaining lease terms of 1 year to 12

years, some of which include options to extend the leases for up to 29 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)

29

11. Leases (continued)

include options to terminate within 1 year. The terms and conditions of these leases do not impose

significant financial restrictions on the Company.

The components of lease expense were as follows:

2022

2021

Operating lease cost

$

1,752

$

1,860

Finance

lease cost

:

Amortization of right

to

use assets

$

514

$

654

Interest on lease liabilities

479

496

Total finance lease cost

$

993

$

1,150

Supplemental cash flow information related leases were as follows:

2022

2021

Cash paid for amounts included in the measurement of lease

liabilities:

Operating cash flows from operating leases

$

8,453

$

6,526

Operating cash flows from finance leases

354

487

Financing cash flows from finance leases

479

496

Right

-

of

-

use assets obtained in exchange for lease obligations

Operating leases

55,063

51,696

Finance leases

9,306

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)

30

11. Leases (continued)

Supplemental balance sheet information related to leases was as follows:

2022

2021

Operating leases

Right of use asset, ne

t

$

55,063

$

51,696

Short

-

term lease liabilities

9,903

7,655

Long

-

term lease liabilities

48,570

47,009

Total operating lease liabilities

58,473

54,664

Finance leases

Property and equipment, at cost

11,041

11,041

Accumulated depreciation

(1,735)

(1,221)

Property and equipment, net

9,306

9,820

Short

-

term lease liabilities

786

817

Long

-

term lease liabilities

9,084

9,406

Total finance

lease liabilities

$

9,870

$

10,223

2022

2021

Weighted average remaining lease term:

Operating leases

9 years

10 years

Finance leases

28 years

29 years

Weighted average discount rate

Operating leases

3.1%

3.4%

Finance leases

4.9%

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)

31

11. Leases (continued)

Maturities of lease liabilities were as follows as of December, 31 2022:

Operating

Leases

Finance

Leases

202

3

$

10

,

037

$

801

202

4

8

,

803

701

202

5

8

,

307

618

202

6

7

,

021

618

202

7

6

,

128

618

Thereafter

28

,

768

1

4

,

835

Total lease payments

69

,

064

18

,

191

Less imputed interest

(

10

,

591

)

(

8

,

322

)

Total

$

58

,

473

$

9

,

869

12. Long-Term Debt and Short-Term Borrowings

As of December 31, 2022, and 2021, long-term debt consists of the following:

December 31

2022

2021

Global bond, guaranteed by CRH plc, due 2021; interest payable

semiannually on January 15 and July 15 at an annual rate of

5.75%

$

-

$

-

Global bond, guaranteed by CRH plc, due 2025; interest payable

semiannually on May 18 and November 18 at an annual rate of

3.88%

1,203,579

1,277,673

Global bond, guaranteed by CRH plc, due 2033; interest payable

semiannually on April 15 and October 15 at an annual rate of

6.40%

351,095

355,814

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)

32

12. Long-Term Debt and Short-Term Borrowings (continued)

Global bond, guaranteed by CRH plc, due 2045; interest payable

semiannually on May 18 and November 18 at an annual rate of

5.13%

492,109

491,757

2,046,783

2,125,244

Included in Due from Parent and affiliates, net

(87,445)

(87,445)

Current maturities of long

-

term debt

-

-

Long

-

term debt

$

1,959,338

$

2,037,799

The carrying value of long-term debt is adjusted for the effects of discounting on the original issue,

the original issuance costs and interest rate swap agreements accounted for as fair value hedges,

including those de-designated in prior years. The total adjustments of $(3,215) and $75,243 at

December 31, 2022 and 2021, respectively, are reflected as a net increase in the carrying value of

the related debt.

The total balance of $87,445 of global bonds held by CRH Belgard Limited as of December 31,

2022 and 2021 is classified in Due from Parent and affiliates, net in the accompanying

Consolidated Balance Sheets.

All senior notes and global bonds contain certain restrictive covenants including, maintenance of

insurance on the Company’s assets, limitations on disposal of fixed assets, prompt payments of

taxes and assessments, limitations on sales and leaseback transactions, and limitations on the

merger and/or sale of the Company.

Principal maturities of long-term debt are as follows at December 31, 2022:

202

2

–

202

3

–

202

4

–

202

5

1,

2

03

,

580

Thereafter

8

4

3

,

20

5

$

2,

046

,

785

At December 31, 2022 and 2021, the par value of the Company’s long-term debt, excluding

adjustments to the carrying value for the effects of discounting on the original issue and interest

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)

33

12. Long-Term Debt and Short-Term Borrowings (continued)

rate swap agreements accounted for as fair value hedges, was $2,050,000 for both years, while the

fair value of such debt approximated $1,969,218 and $2,396,628, respectively, based primarily

upon Level 2 measures within the valuation hierarchy.

Short-term borrowings primarily consist of bank overdrafts. The Company had unsecured lines of

credit with three banks totaling $150,000 at December 31, 2022 and three banks totaling $150,000

at December 31, 2021. The various lines of credit have variable interest rates based on the

prevailing interest rate at the time of borrowing as well as the length of time funds are borrowed.

There were no outstanding balances under these lines of credit at December 31, 2022 and 2021;

however, the Company had $64,082 and $80,424 of outstanding letters of credit under these

agreements at December 31, 2022 and 2021, respectively. At December 31, 2022 and 2021, the

company has letter of credit facilities with one bank for $40,000 of which $20,000 have been

issued at December 31, 2022 and 2021, respectively. These letters of credit were issued on behalf

of our operating companies.

During 2022 and 2021, the Company and its subsidiaries paid interest on external debt, net of

interest received on interest rate swaps, of $64,129 and $77,419, respectively.

13. Contingencies and Litigation

The Company is involved in certain litigation and claims in the ordinary 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 position or results of operations.

14. Costs and Estimated Earnings on Uncompleted Contracts

The details of the Company’s costs and billings related to construction contracts, as well as a

reconciliation to the line items in which such amounts 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)

34

14. Costs and Estimated Earnings on Uncompleted Contracts (continued)

December 31

2022

2021

Costs incurred on uncompleted contracts

$

105,745

$

117,588

Estimated earnings

73,424

65,027

Revenue job to date on uncompleted contracts

179,169

182,615

Less billings job to date

174,400

182,630

Contract liabilities/net billings in excess of costs and

estimated earnings

$

4,769

$

(15)

Contract assets/costs and estimated earnings in excess

of

billings

$

8,633

$

5

,

7

80

Billings in excess of costs and estimated earnings

(3,864)

(

5

,

7

95

)

$

4,769

$

(

1

5

)

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 functions on behalf of the Group.

The Company has loans totaling $2,250,000 due to CRH SMW Finance DAC as of December 31,

2022 and 2021, which are classified in Due from Parent and affiliates, net in the accompanying

Consolidated Balance Sheets.

The amounts due from Parent and affiliates included in the accompanying Consolidated Balance

Sheets of $2,393,591 and $2,980,890 at December 31, 2022 and 2021, respectively, represent

loans, income tax accounts, and related accrued interest due from Parent and affiliates. With the

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 the intention of management of Parent and CRH

plc not to pay or call the amounts 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)

35

15. Related-Party Transactions (continued)

At December 31, 2022 and 2021, the Company’s outstanding balances (noted above) with Parent

and affiliates included the following entities:

Belgard Finance Company, Inc.

CRH North America Luxembourg SARL

CRH SMW Finance DAC

CRH Finance America, Inc.

CRH America Finance, Inc.

CRH Belgard Limited

Oldcastle

Investment

s

Company LLC

CRH Americas, Inc.

Oldcastle Building Products, Inc.

Oldcastle Distribution, Inc.

Oldcastle Finance, Inc.

Oldcastle Holdings, Inc.

Oldcastle Building

Envelope, Inc.

CRH Americas Materials, Inc. and Subsidiaries

The amounts receivable from Parent and affiliates classified as a non-current asset include both a

series of long-term notes payable to and long-term notes receivables from a wide array of the

related parties noted above.

At December 31, 2022, the outstanding 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, 2022, the outstanding short-

term notes payable to Parent and affiliates was $500,000, with a maturity date of April 11, 2023,

and interest rate of 5.00%.

At December 31, 2022, the outstanding long-term notes receivable from Parent and affiliates

ranged from $140,000 to $640,000 with maturity dates ranging from July 23, 2029 to August 23,

2029, and interest rate of 5.50%. These balances are included in Due from Parent and affiliates,

net in the Consolidated Balance Sheets. At December 31, 2022, the outstanding short-term notes

receivable from Parent and affiliates was $23,300 with a maturity date of December 31, 2023, and

interest rate of 5.50%.

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)

36

15. Related-Party Transactions (continued)

At December 31, 2021, the outstanding 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 ranged from $82,725 to $500,000, with maturity dates

ranging from August 23, 2022 to October 11, 2022, and interest rates of 5.00%.

At December 31, 2021, the outstanding long-term notes receivable from Parent and affiliates of

$23,300 with maturity date of December 31, 2023, and interest rate of 5.50%. At December 31,

2021, the outstanding short-term notes receivable from Parent and affiliates ranged from $140,000

to $640,000 with maturity dates ranging from July 23, 2022 to August 23, 2022, and interest rates

ranging from 5.00 to 5.50%. These balances are included in Due from Parent and affiliates, net in

the Consolidated Balance Sheets.

For the years ended December 31, 2022 and 2021, the Company had the following significant

transactions with the Parent and affiliates:

The Company pays interest expense on amounts due and receives interest income on amounts

owed to them from the Parent and affiliates. During 2022 and 2021, the Company and its

subsidiaries paid net interest of $77,314 and $58,765, respectively, on loans to the Parent and

affiliates.

Interest income, net presented in the accompanying Consolidated Statements of Operations

includes interest earned on amounts due from the Parent and affiliates of $176,158 and $197,272

in 2022 and 2021, respectively. The interest income reimburses the Company for a portion of

external interest expense incurred by the Company. The amount is determined at management’s

discretion.

Interest expense presented in the accompanying Consolidated Statements of Operations includes

interest incurred on amounts due to the Parent and affiliates of $122,328 and $123,795 in 2022

and 2021, respectively.

The Company participates in insurance plans administered by Parent under which it is fully insured

for general liability and workers’ compensation claims and pays an annual premium. Premiums

paid to Parent for insurance in 2022 and 2021 were $11,272 and $11,163, 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)

37

15. Related-Party Transactions (continued)

The Company also participates in a health insurance plan administered by Parent under which the

Company is charged for actual claims incurred and records an accrual for estimated incurred but

unreported claims. Claims expense under this health insurance plan in 2022 and 2021 was $31,985

and $26,960, respectively.

Included in selling, general, and administrative expenses are management fees charged by

CRH plc of $40,426 and $22,139 in 2022 and 2021, respectively.

16. Financial Instruments

The Company accounts for derivative instruments in accordance with ASC 815,

Derivatives and

Hedging

, which requires the recognition of all derivative instruments in the accompanying

Consolidated Balance Sheets at fair value. The Company enters into interest 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 the types of derivative financial instruments utilized by the

Company and the related fair values, which are recorded in the interest rate swap line items in the

accompanying Consolidated Balance Sheets:

Fair Value of Derivative Financial Instruments

Assets

Type of Derivative

Financial Instrument

2022

Fair Value

2021

Fair Value

Derivatives designated as

hedging instruments

Interest rate swaps

$

(47,553)

$

32,302

Total

$

(47,553)

$

32,302

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)

38

16. Financial Instruments (continued)

The effect of derivative financial instruments in the accompanying Consolidated Statements of

Operations for the years ended December 31, 2022 and 2021 include:

Derivatives in Fair

Value Hedging

Relationships

Location of Gain

Recognized in Income

on Derivatives

Amount of Gain

Recognized

in Income on Derivatives

2022

2021

Interest rate swaps

Change in fair value of

derivatives and fixed rate debt

$

(75,025)

$

(41,645)

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

2022

2021

Fixed

rate debt

Change in fair value of

derivatives and fixed rate debt

$

74,841

$

4

1

,

76

6

As of December 31, 2022, and 2021, the Company had six fixed-to-variable interest rate swap

agreements outstanding with commercial banks having a total notional amount of $875,000 that

were designated as fair value hedges related to the Company’s long-term debt.

The Company is exposed to credit loss in the event of nonperformance by the other parties to the

interest rate swap agreements; however, the Company does not anticipate nonperformance by the

counterparties due to their high credit ratings. During 2022 and 2021, the fixed interest rate

received exceeded the variable interest rate paid on all interest rate swap agreements, resulting in

the Company receiving a weighted average interest rate, net of 0.41% and 2.08%, respectively.

Weighted average variable rates are based on rates implied in the yield curve as of December 31,

2022 and 2021, which are primarily based upon London Interbank Offering Rate (LIBOR) indices.

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)

39

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 participants and

outlines a valuation framework and creates a fair value hierarchy in order to increase the

consistency and comparability of fair value measurements and the related disclosures. The three

broad fair value hierarchy levels are defined as follows:

Level 1



Quoted prices (unadjusted) in active markets for identical assets 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. The input may reflect the assumptions of the

entity, not a market participant, little available market data, and the entity’s own assumptions

that are considered by management to be the best available information.

The Company records assets and liabilities at fair value on a recurring and nonrecurring basis as

required by U.S. GAAP. The carrying amounts reflected in the consolidated balance sheets for

cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities

approximate fair values due to their short maturities. The carrying amounts of long term debt and

finance leases approximate their fair 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 measured 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

$

–

$

(47,553)

$

–

$

(47,553)

Interest rate swaps

December 31, 2022

December 31, 2021

–

32,302

–

32,302