5960 Berkshire Lane, Suite 900, Dallas, Texas 75225 (Address of principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

As of July ~~27, 2020,~~26, 2021, the number of outstanding shares of common stock was:

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)

	For the Three Months Ended June 30,						For the Three Months Ended June 30,
	2020			2019			2021			2020
	(dollars in thousands, except share and per share data)						(dollars in thousands, except share and per share data)
Revenue	$	428,020		$	370,597		$	475,770		$	426,989
Cost of Goods Sold		327,041			295,268			349,259			324,692
Gross Profit		100,979			75,329			126,511			102,297
Equity in Earnings of Unconsolidated Joint Venture		7,796			9,432			7,970			7,796
Corporate General and Administrative Expense		(17,789	)		(21,254	)		(9,468	)		(17,789	)
Gain on Sale of Businesses		51,973			—			—			51,973
Other Non-Operating Income (Loss)		(127	)		200			3,678			(309	)
Interest Expense, Net		(14,041	)		(8,846	)
Earnings before Income Taxes		128,791			54,861
Interest Expense, net								(6,972	)		(14,041	)
Earnings from Continuing Operations Before Income Taxes								121,719			129,927
Income Taxes		(32,585	)		(13,557	)		(26,392	)		(32,836	)
Earnings from Continuing Operations								95,327			97,091
Loss from Discontinued Operations, net of Income Taxes								—			(885	)
Net Earnings	$	96,206		$	41,304		$	95,327		$	96,206

EARNINGS PER SHARE
Basic	$	2.32		$	0.94
Diluted	$	2.31		$	0.94
BASIC EARNINGS (LOSS) PER SHARE
Continuing Operations							$	2.27		$	2.34
Discontinued Operations								—		$	(0.02	)
Net Earnings							$	2.27		$	2.32
DILUTED EARNINGS PER SHARE
Continuing Operations							$	2.25		$	2.33
Discontinued Operations								—		$	(0.02	)
Net Earnings							$	2.25		$	2.31
AVERAGE SHARES OUTSTANDING
Basic		41,410,794			43,870,222			42,028,619			41,410,794
Diluted		41,563,268			44,150,211			42,437,366			41,563,268
CASH DIVIDENDS PER SHARE	$	0.10		$	0.10		$	—		$	0.10

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (unaudited)

	June 30,			March 31,			June 30,			March 31,
	2020			2020			2021			2021
	(dollars in thousands)						(dollars in thousands)
ASSETS
Current Assets -
Current Assets
Cash and Cash Equivalents	$	199,441		$	118,648		$	306,542		$	263,520
Accounts and Notes Receivable, net		194,564			151,786
Restricted Cash								5,000			5,000
Accounts Receivable, net of allowances of $7.0 at June 30, 2021 and $8.1 at March 31, 2021								187,411			147,133
Inventories		243,125			272,508			217,052			235,749
Income Tax Receivable		123,709			128,413			—			2,838
Prepaid and Other Assets		10,754			6,862			15,298			7,449
Total Current Assets		771,593			678,217			731,303			661,689
Property, Plant, and Equipment, net		1,726,363			1,762,109			1,641,063			1,659,100
Notes Receivable		9,068			9,139			8,485			8,419
Investment in Joint Venture		72,254			73,958			76,369			75,399
Operating Lease Right-of-Use Assets		29,904			30,530			24,776			25,811
Goodwill and Intangible Assets, net		395,673			396,463			391,211			392,315
Other Assets		10,309			10,604			17,623			15,948
	$	3,015,164		$	2,961,020		$	2,890,830		$	2,838,681
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities -
Current Liabilities
Accounts Payable	$	81,985		$	86,197		$	96,923		$	84,171
Accrued Liabilities		75,482			73,293			74,947			78,840
Income Taxes Payable		32,130			—			11,016			—
Operating Lease Liabilities		10,436			10,207			6,127			6,343
Total Current Liabilities		200,033			169,697			189,013			169,354
Long-term Debt		1,492,088			1,567,315			1,009,035			1,008,616
Noncurrent Operating Lease Liabilities		47,478			49,809			32,763			34,444
Other Long-term Liabilities		44,667			39,689			40,902			41,291
Deferred Income Taxes		162,940			166,667			227,785			225,986
Total Liabilities		1,947,206			1,993,177			1,499,498			1,479,691
Stockholders’ Equity –
Stockholders’ Equity
Preferred Stock, Par Value $0.01; Authorized 5,000,000 Shares; NaN Issued		—			—			—			—
Common Stock, Par Value $0.01; Authorized 100,000,000 Shares; Issued and Outstanding 41,756,684 and 41,649,041 Shares, respectively		418			416
Common Stock, Par Value $0.01; Authorized 100,000,000 Shares; Issued and Outstanding 42,101,619 and 42,370,878 Shares, respectively								421			424
Capital in Excess of Par Value		14,571			10,943			10,035			62,497
Accumulated Other Comprehensive Losses		(3,302	)		(3,581	)		(3,413	)		(3,440	)
Retained Earnings		1,056,271			960,065			1,384,289			1,299,509
Total Stockholders’ Equity		1,067,958			967,843			1,391,332			1,358,990
	$	3,015,164		$	2,961,020		$	2,890,830		$	2,838,681

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	For the Three Months Ended June 30,						For the Three Months Ended June 30,
	2020			2019			2021			2020
	(dollars in thousands)						(dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Earnings	$	96,206		$	41,304		$	95,327		$	96,206
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities, Net of Effect of Non-Cash Activity -
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities, Net of Effect of Non-Cash Activity
Depreciation, Depletion and Amortization		31,937			27,960			31,944			31,937
Deferred Income Tax Provision		(3,736	)		3,687			1,799			(3,736	)
Stock Compensation Expense		4,760			8,219			2,456			4,760
Gain on Sale of Subsidiaries		(51,973	)		—			—			(51,973	)
Equity in Earnings of Unconsolidated Joint Venture		(7,796	)		(9,432	)		(7,970	)		(7,796	)
Distributions from Joint Venture		9,500			3,000			7,000			9,500
Changes in Operating Assets and Liabilities:
Changes in Operating Assets and Liabilities
Accounts and Notes Receivable		(45,878	)		(45,431	)		(40,344	)		(45,878	)
Inventories		23,091			11,582			18,697			23,091
Accounts Payable and Accrued Liabilities		4,398			(6,071	)		(2,938	)		4,398
Other Assets		(2,030	)		6,486			(8,704	)		(2,030	)
Income Taxes Payable (Receivable)		36,834			9,394			13,854			36,834
Net Cash Provided by Operating Activities		95,313			50,698			111,121			95,313
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to Property, Plant, and Equipment		(25,991	)		(21,813	)		(11,935	)		(25,991	)
Proceeds from Sale of Businesses		93,482			—			—			93,482
Net Cash Provided by (Used in) Investing Activities		67,491			(21,813	)		(11,935	)		67,491
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (Decrease) in Credit Facility		(75,000	)		185,000
Decrease in Credit Facility								—			(75,000	)
Dividends Paid to Stockholders		(4,163	)		(4,499	)		—			(4,163	)
Purchase and Retirement of Common Stock		—			(198,355	)		(61,929	)		—
Proceeds from Stock Option Exercises		—			396			8,222			—
Payment of Debt Issuance Costs		(1,718	)		—			(1,243	)		(1,718	)
Shares Redeemed to Settle Employee Taxes on Stock Compensation		(1,130	)		(866	)		(1,214	)		(1,130	)
Net Cash Used in Financing Activities		(82,011	)		(18,324	)		(56,164	)		(82,011	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		80,793			10,561
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD		118,648			8,601
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	199,441		$	19,162
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH								43,022			80,793
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD								268,520			118,648
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD							$	311,542		$	199,441

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

	Common Stock			Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Losses			Total
	(dollars in thousands)
Balance at March 31, 2019	$	451		$	—		$	1,212,352		$	(3,316	)	$	1,209,487
Net Earnings		—			—			41,304			—			41,304
Stock Option Exercises and Restricted Share Vesting		—			396			—			—			396
Purchase and Retirement of Common Stock		(23	)		(7,748	)		(190,584	)		—			(198,355	)
Dividends to Stockholders		—			—			(4,316	)		—			(4,316	)
Stock Compensation Expense		1			8,218			—			—			8,219
Shares Redeemed to Settle Employee Taxes		—			(866	)		—			—			(866	)
Cumulative Effect of Change in Accounting for Leases		—			—			(636	)		—			(636	)
Unfunded Pension Liability, net of tax		—			—			—			33			33
Balance at June 30, 2019	$	429		$	—		$	1,058,120		$	(3,283	)	$	1,055,266

	Common Stock			Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Losses			Total			Common Stock			Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Losses			Total
	(dollars in thousands)															(dollars in thousands)
Balance at March 31, 2020	$	416		$	10,943		$	960,065		$	(3,581	)	$	967,843		$	416		$	10,943		$	960,065		$	(3,581	)	$	967,843
Net Earnings		—			—			96,206			—			96,206			—			—			96,206			—			96,206
Stock Compensation Expense		2			4,758			—			—			4,760			2			4,758			—			—			4,760
Shares Redeemed to Settle Employee Taxes		—			(1,130	)		—			—			(1,130	)		—			(1,130	)		—			—			(1,130	)
Sale of Business with Unfunded Pension Liability		—			—			—			254			254			—			—			—			254			254
Unfunded Pension Liability, net of tax		—			—			—			25			25			—			—			—			25			25
Balance at June 30, 2020	$	418			14,571		$	1,056,271		$	(3,302	)	$	1,067,958		$	418		$	14,571		$	1,056,271		$	(3,302	)	$	1,067,958

																Common Stock			Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Losses			Total
																(dollars in thousands)
Balance at March 31, 2021																$	424		$	62,497		$	1,299,509		$	(3,440	)	$	1,358,990
Net Earnings																	—			—			95,327			—			95,327
Stock Compensation Expense																	1			2,455			—			—			2,456
Stock Option Exercises and Restricted Share Issuance																	—			8,222			—			—			8,222
Shares Redeemed to Settle Employee Taxes																	—			(1,214	)		—			—			(1,214	)
Purchase and Retirement of Common Stock																	(4	)		(61,925	)		—			—			(61,929	)
Dividends to Stockholders																	—			—			(10,547	)		—			(10,547	)
Unfunded Pension Liability, net of tax																	—			—			—			27			27
Balance at June 30, 2021																$	421			10,035		$	1,384,289		$	(3,413	)	$	1,391,332

Eagle Materials Inc. and Subsidiaries
N~~otes~~Notes to Consolidated Financial Statements

The accompanying unaudited consolidated financial statements as of and for the three-month period ended June 30, ~~2020~~2021 include the accounts of Eagle Materials Inc. and its majority-owned subsidiaries (collectively, the Company, us, or we) and have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on May ~~22, 2020.~~21, 2021.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to make the information presented not misleading. In our opinion, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the information in the following unaudited consolidated financial statements of the Company have been included. The results of operations for interim periods are not necessarily indicative of the results for the full year.

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

We have been deemed an essential business with respect to the COVID-19 pandemic. While we have not yet experienced a material impact on our operations or financial position from this pandemic, there may be future effects on our business, both directly and indirectly, including with respect to customers, manufacturing operations, employees, suppliers, and the building materials and construction markets in general.

In June 2016, the FASB issued ASU 2016-13, which is an update on the measurement of credit losses on financial instruments, which requires entities to use a forward-looking approach based on expected losses rather than the current model of incurred losses to estimate credit losses on certain types of financial instruments, including Accounts and Notes Receivable. The application of the forward-looking model may result in earlier recognition of allowances for losses than the current method. The adoption of this standard on April 1, 2020, did not have a material effect on our consolidated financial statements and disclosures.

In December 2019, the FASB issued ASU 2019-12, which simplifies the accounting for income taxes, eliminates certain exceptions within existing income tax guidance, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ~~The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted.~~ We ~~do not expect the~~adopted this ASU on April 1, 2021 on a prospective basis. The adoption of this ~~standard will~~guidance did not have a material ~~impact to~~effect on our consolidated financial statements.

On March 6, 2020, we acquired the assets of Kosmos Cement Company (Kosmos), a joint venture between CEMEX S.A.B. de C.V. and Buzzi Unicem S.p.A. (the Kosmos Acquisition). The Kosmos Acquisition included (i) a cement plant located in Louisville, Kentucky, (ii) a limestone quarry located in Battletown, Kentucky, (iii) cement distribution terminals located in Indianapolis, Indiana; Cincinnati, Ohio; Pittsburgh, Pennsylvania; Charleston, West Virginia; Ceredo, West Virginia; Mt. Vernon, Indiana; and Lexington, Kentucky, and (iv) certain other properties and assets used by Kosmos in connection with the foregoing (collectively, the Kosmos Business). We assumed certain liabilities and obligations of Kosmos relating to the Kosmos Business, including contractual obligations, reclamation obligations and various other liabilities arising out of or relating to the Kosmos Business. The Kosmos Business is included in our Heavy Materials Sector, in the Cement segment.

~~Purchase Price:~~ The purchase price of the Kosmos Acquisition was approximately $669 million. We funded the payment of the Kosmos Acquisition primarily through a Term Loan borrowing with the remainder paid using cash on hand. See Footnote (N) for a description of the loan terms.

~~Recording of Assets Acquired and Liabilities Assumed:~~ The transaction was accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The Company engaged a third party to perform appraisal valuation services to support the Company’s preliminary estimate of the fair value of certain assets acquired in the Kosmos Acquisition.

The preparation of the valuation of the assets acquired and liabilities assumed in the Kosmos Acquisition requires the use of significant assumptions and estimates. Critical estimates with respect to the valuation of property, plant, and equipment include, but are not limited to, replacement cost, condition, and estimated remaining useful lives of property and equipment. Critical estimates related to intangible and other assets include future expected cash flows, including projected revenues and expenses, customer attrition, and applicable discount rates. These estimates are based on assumptions that we believe to be reasonable. However, actual results may differ from these estimates.

The Company has determined preliminary fair values of the assets acquired and liabilities assumed in the Kosmos Acquisition. These values are subject to change during the measurement period as we perform additional reviews of the property and equipment, and the asset retirement obligation.

On September 18, 2020, we sold our Oil and Gas Proppants business (the Proppants Business) to Smart Sand, Inc., a Delaware corporation (the Purchaser), pursuant to an Equity Purchase and Sale Agreement (the Purchase Agreement) between the Company and the Purchaser. The ~~following table summarizes~~sale of this business excluded certain assets, namely real property and equipment in south Texas, real property in Illinois, and certain other assets. The purchase price (the Purchase Price) paid by the ~~provisional allocation~~Purchaser for the acquisition of the ~~purchase price to assets acquired and liabilities assumed~~Proppants Business was $2.0 million paid in shares of common stock of the Purchaser. Shares representing $0.3 million of the Purchase Price are being held in escrow as a source of ~~June 30, 2020:~~

~~During~~recovery for any indemnification claims by the quarter ended June 30, 2020, we completed the valuation of inventories, intangible assets, lease right-of-use assets, and lease obligations. These final values, which are disclosed in the above table, resulted in increases of $0.2 million, $2.8 million, $0.6 million and $0.6 million, respectively, from the amounts disclosed in our fiscal 2020 Form 10-K. We also revised our estimates for property, plant and equipment, whichPurchaser. The sale resulted in a ~~reduction~~gain of ~~$0.5 million; however, this value is still preliminary.~~approximately $9.2 million.

~~Goodwill represents~~In connection with the ~~excess purchase price over~~execution of the ~~fair values~~Purchase Agreement, we also entered into a Loan and Security Agreement, dated September 18, 2020 (the Loan and Security Agreement), by and among the Company, as lender; the Purchaser, as borrower; and other parties thereto. Pursuant to the Loan and Security Agreement, the Company will loan the Purchaser up to $5.0 million for working capital and operating, maintenance, and administrative expenses of ~~assets acquired~~the Proppants Business during the one-year period following the closing. The Company has deposited the $5.0 million into an escrow account. Up to 50% of the amounts outstanding under the Loan and ~~liabilities assumed. The Goodwill was generated~~Security Agreement may be repaid by the ~~availability of co-product sales and the opportunity associated with the expansion of our Cement business to the eastern region~~Purchaser in shares of the ~~United States. All~~Purchaser’s common stock. Borrowings under the Loan and Security Agreement will bear interest at a fixed rate of 6.00% per annum during the one-year period following the closing. Any amounts after the one-year period will bear interest at a fixed rate of 8.00% per annum and will mature on September 18, 2024. There were 0 outstanding borrowings at June 30, 2021. The $5.0 million in the escrow account at June 30, 2021 is classified as Restricted Cash on the Consolidated Balance Sheet.

The sale of the ~~goodwill generated by~~Proppants Business, which was previously disclosed as a reportable segment, was determined to meet the ~~transaction will be deductible~~discontinued operations accounting criteria. Certain expenses, which were previously included in the Oil and Gas Proppants operating segment, do not qualify for ~~income tax purposes.~~classification within discontinued operations and have been reclassified from the operating segment to continuing operations. These expenses primarily relate to lease agreements not included in the sale of the Proppants Business.

The following ~~table~~ is a summary of ~~the fair value estimates of the identifiable intangible assets (dollars in thousands) and their weighted-average useful lives:~~

~~Actual and pro forma impact of Kosmos Acquisition:~~ ~~The following table presents the net sales and Operating Earnings related to the Kosmos Acquisition that has been~~operating results included in ~~our Consolidated Statement of~~ Earnings (Loss) from Discontinued Operations for the three months ended June 30, ~~2020:~~2020.


	For the Three Months Ended June 30, 2020		For the Three Months Ended June 30, 2020
	(dollars in thousands)		(dollars in thousands)
Revenue	$	47,555	$	1,031
Operating Earnings	$	10,552
Cost of Goods Sold				2,349
Gross Profit				(1,318	)
Other Non-Operating Income				182
Loss from Discontinued Operations				(1,136	)
Income Tax Benefit				251
Net Loss from Discontinued Operations			$	(885	)

The significant components of our Consolidated Statements of Cash Flows for discontinued operations for the three months ended June 30, 2020 ~~was affected by approximately $5.3 million related to depreciation and amortization and $3.7 million related to the recording of acquired inventory at fair value.~~are as follows:

The unaudited pro forma results presented below include the effects of the Kosmos Acquisition as if it had been consummated as of April 1, 2019. The pro forma results include estimates for depreciation from the fair value adjustments to acquired Property and Equipment, amortization for acquired Intangible Assets, the Inventory step-up to fair value, and interest expense associated with debt used to fund the Kosmos Acquisition. To better reflect the combined operating results, approximately $5.6 million of material nonrecurring charges directly related to the Kosmos Acquisition have been excluded from pro forma Net Income.

The pro forma results do not include any anticipated synergies or other expected benefits of the Kosmos Acquisition. Accordingly, the unaudited pro forma results are not necessarily indicative of either future results of operations or results that might have been achieved had the Kosmos Acquisition been consummated as of April 1, 2019.

On April 17, 2020, we sold our Western Aggregates LLC (Western) and Mathews Readymix LLC (Mathews) businesses to Teichert, Inc. for an aggregate purchase price of approximately $93.5 million, subject to certain post-closing adjustments. This sale resulted in a gain of approximately $52.0 million. Western and Mathews were part of our Concrete and Aggregates operating segment, and their results of operations were included in our financial statements for the period from April 1, 2020 through April 17, 2020.

~~At the date of sale, assets and liabilities included on our balance sheet related to Western and Mathews were approximately $43.8 million and $2.3 million, respectively.~~ Revenue and Operating Earnings from Western and Mathews, collectively, were approximately $1.7 million and $0.1 million, respectively, for the three months ended June 30, ~~2020, and $7.8 million and $1.0 million, respectively, for the three months ended June 30, 2019.~~2020.

We earn Revenue primarily from the sale of products, which include cement, concrete, aggregates, gypsum wallboard and recycled ~~paperboard, and frac sand.~~paperboard. The vast majority of Revenue from the sale of cement, concrete, aggregates, and gypsum wallboard are originated by purchase orders from our customers, who are primarily third-party contractors and suppliers. Revenue from our Recycled Paperboard ~~and Oil and Gas Proppants segments~~segment is generated primarily through long-term supply agreements that mature between ~~2020~~2023 and 2025. We invoice customers upon shipment, and our collection terms range from ~~30-65~~30-75 days. Revenue from the sale of cement, concrete, aggregates, and gypsum wallboard that is not related to long-term supply agreements is recognized upon shipment of the related products to customers, which is when title and ownership are transferred, and the customer is obligated to pay.

Revenue from sales under our long-term supply agreements is also recognized upon transfer of control to the customer, which generally occurs at the time the product is shipped from the production facility or terminal location. Our long-term supply agreements with customers define, among other commitments, the volume of product that we must provide and the volume that the customer must purchase by the end of the defined periods. Pricing structures under our agreements are generally market-based, but are subject to certain contractual adjustments. ~~Historically, the pricing and volume requirements under certain of these contracts have been renegotiated during volatile market conditions.~~ Shortfall amounts, if applicable under these arrangements, are

constrained and not recognized as Revenue until an agreement is reached with the customer and, therefore, are not subject to the risk of reversal.

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

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

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

See Footnote ~~(O)~~(N) to the Unaudited Consolidated Financial Statements for disaggregation of revenue by segment.

Accounts ~~and Notes~~ Receivable have been shown net of the allowance for doubtful accounts of ~~$9.9~~$7.0 million and ~~$12.4~~$8.1 million at June 30, ~~2020~~2021 and March 31, ~~2020,~~2021, respectively. We perform ongoing credit evaluations of our customers’ financial condition and generally require no collateral from our customers. The allowance for non-collection of receivables is based upon analysis of economic trends in the construction industry, detailed analysis of the expected collectability of accounts receivable that are past due, and the expected collectability of overall receivables. We have no significant credit risk concentration among our diversified customer base.

We had Notes Receivable totaling approximately ~~$9.7~~$8.5 million at June 30, ~~2020,~~2021, 0ne of which ~~approximately $0.7 million has been~~was classified as ~~current and presented with Accounts Receivable on the balance sheet.~~current. We lend funds to certain companies in the ordinary course of business, and the notes bear interest, on average, at ~~3.6%~~3.1%. Remaining unpaid amounts, plus accrued interest, mature in fiscal ~~2025 and 2026.~~2025. The notes are collateralized by certain assets of the borrowers, namely property and equipment, and are generally payable monthly. We monitor the credit risk of each borrower by assessing the timeliness of payments, credit history, credit metrics, and our ongoing interactions with each borrower.

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

	June 30,		March 31,		June 30,		March 31,
	2020		2020		2021		2021
	(dollars in thousands)				(dollars in thousands)
Raw Materials and Materials-in-Progress	$	96,084	$	110,558	$	79,200	$	92,696
Finished Cement		33,590		43,538		31,815		34,362
Aggregates		3,562		8,416		3,211		2,933
Gypsum Wallboard		4,088		4,211		4,354		4,177
Paperboard		5,424		5,715		4,321		5,031
Frac Sand		467		386
Repair Parts and Supplies		87,791		88,095		85,020		86,750
Fuel and Coal		12,119		11,589		9,131		9,800
	$	243,125	$	272,508	$	217,052	$	235,749

	June 30,		March 31,		June 30,		March 31,
	2020		2020		2021		2021
	(dollars in thousands)				(dollars in thousands)
Payroll and Incentive Compensation	$	16,376	$	25,584	$	23,023	$	32,336
Benefits		14,281		12,521		15,268		14,979
Interest		7,353		4,080		6,632		3,089
Property Taxes		9,002		6,676		8,145		6,683
Power and Fuel		1,365		1,353		2,089		2,350
Freight						2,280		1,575
Legal and Professional		16,110		16,096		7,274		9,511
Sales and use Tax		1,442		1,085
Sales and Use Tax						1,816		1,265
Other		9,553		5,898		8,420		7,052
	$	75,482	$	73,293	$	74,947	$	78,840

We lease certain real estate, buildings, and equipment. Certain of these leases contain escalations of rent over the term of the lease, as well as options for us to extend the term of the lease at the end of the original term. These extensions range from periods of one year to twenty years. Our lease agreements do not contain material residual value guarantees or material restrictive covenants. In calculating the present value of future minimum lease payments, we use the rate implicit in the lease if it can be determined. Otherwise we use our incremental borrowing rate in effect at the commencement of the lease to determine the present value of the future minimum lease payments. Additionally, we lease certain equipment under short-term leases with initial terms of less than twelve months, which are not recorded on the balance sheet.

	For the Three Months Ended June 30,				For the Three Months Ended June 30,
	2020		2019		2021		2020
	(dollars in thousands)				(dollars in thousands)
Operating Lease Cost	$	2,006	$	3,947	$	1,514	$	1,796
Short-term Lease Cost		759		584
Short-Term Lease Cost						502		750
Total Lease Cost	$	2,765	$	4,531	$	2,016	$	2,546

The Right-of-Use Assets and Lease Liabilities are reflected on our Balance Sheet as follows:

	June 30,		March 31,		June 30,		March 31,
	2020		2020		2021		2021
	(dollars in thousands)				(dollars in thousands)
Operating Leases:
Operating Leases
Operating Lease Right-of-Use Assets	$	29,904	$	30,530	$	24,776	$	25,811

Current Operating Lease Liabilities	$	10,436	$	10,207	$	6,127	$	6,343
Noncurrent Operating Lease Liabilities		47,478		49,809		32,763		34,444
Total Operating Lease Liabilities	$	57,914	$	60,016	$	38,890	$	40,787

Fiscal Year	Amount			Amount
2021 (remaining nine months)	$	9,301
2022		10,887
2022 (remaining nine months)				$	5,539
2023		10,062			6,948
2024		8,216			5,949
2025		6,879			5,589
2026					4,118
Thereafter		24,624			20,365
Total Lease Payments	$	69,969		$	48,508
Less: Imputed Interest		(12,055	)		(9,618	)
Present Value of Lease Liabilities	$	57,914		$	38,890

Weighted-Average Remaining Lease Term (in years)		9.1			10.5
Weighted-Average Discount Rate		3.78	%		3.79	%

On August 7, 2013, our stockholders approved the Eagle Materials Inc. Amended and Restated Incentive Plan (the Plan), which increased the shares we are authorized to issue as awards by 3,000,000 (1,500,000 of which may be stock awards). Under the terms of the Plan, we can issue equity awards, including stock options, restricted stock units (RSUs), restricted stock, and stock appreciation rights to employees of the Company and members of the Board of Directors. ~~Awards that were already outstanding prior to the approval of the Plan on August 7, 2013 remain outstanding.~~ The Compensation Committee of our Board of Directors specifies the terms for grants of equity awards under the Plan.

In May ~~2020,~~2021, the Compensation Committee of the Board of Directors approved the granting to certain officers and key employees an aggregate of ~~96,476 performance vesting~~4,293 performance-vesting stock options that will be earned only if certain performance conditions are satisfied (the Fiscal ~~2021~~2022 Employee Performance Stock Option Grant). The performance criteria for the Fiscal ~~2021~~2022 Employee Performance Stock Option Grant is based upon the

achievement of certain levels of return on equity (as defined in the option agreements), ranging from 10.0% to 20.0%, for the fiscal year ending March 31, ~~2021.~~2022. All stock options will be earned if the return on equity is 20.0% or greater, and the percentage of shares earned will be reduced proportionately to approximately 66.7% if the return on equity is 10.0%. If the Company does not achieve a return on equity of at least 10.0%, all granted stock options will be forfeited. Following any such reduction, restrictions on the earned stock options will lapse and the earned options will vest ratably over four years, with the initial fourth vesting promptly following the determination date, and the remaining options vesting on March 31, ~~2022~~2023 through ~~2024.~~2025. The stock options have a term of ten years from the date of grant. The Compensation Committee also approved the granting of ~~80,396~~3,578 time-vesting stock options to the same officers and key employees, which vest ratably over four years (the Fiscal ~~2021~~2022 Employee Time-Vesting Stock Option Grant).

The weighted-average assumptions used in the Black-Scholes model to value the option awards in fiscal ~~2021~~2022 are as follows:

Stock option expense for all outstanding stock option awards totaled approximately ~~$1.7~~$0.7 million and ~~$1.1~~$1.7 million for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. At June 30, ~~2020,~~2021, there was approximately ~~$10.0~~$6.3 million of unrecognized compensation cost related to outstanding stock options, which is expected to be recognized over a weighted-average period of ~~2.8~~2.3 years.

The following table represents stock option activity for the three months ended June 30, ~~2020:~~2021:

	Number of Shares			Weighted- Average Exercise Price		Number of Shares			Weighted- Average Exercise Price
Outstanding Options at March 31, 2020		1,160,091		$	80.36
Outstanding Options at March 31, 2021							708,501		$	83.85
Granted		178,946		$	60.20		7,871		$	139.25
Exercised		—		$	—		(95,859	)	$	85.77
Cancelled		(12,094	)	$	91.58		(15,390	)	$	76.63
Outstanding Options at June 30, 2020		1,326,943
Options Exercisable at June 30, 2020		914,683
Outstanding Options at June 30, 2021							605,123
Options Exercisable at June 30, 2021							346,580
Weighted-Average Fair Value of Options Granted During the Year	$	22.04				$	48.92

The following table summarizes information about stock options outstanding at June 30, ~~2020:~~2021:

Options Outstanding

Options Exercisable

Range of Exercise Prices

Number of
Shares
Outstanding

Weighted-
Average
Remaining
Contractual
Life (in years)

Weighted-
Average
Exercise
Price

Number of
Shares
Outstanding

Weighted-
Average
Exercise
Price

$23.17 - $29.84

65,912

1.10

$
23.27

65,912

$
23.27

$33.43 - $37.34

57,728

1.96

$
34.03

57,728

$
34.03

$53.22 - $77.67

446,709

6.98

$
67.55

255,357

$
72.53

$79.73 - $106.24

756,594

6.44

$
91.49

535,686

$
89.34

1,326,943

6.16

$
77.54

914,683

$
76.39

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number of Shares Outstanding		Weighted- Average Remaining Contractual Life (in years)		Weighted- Average Exercise Price		Number of Shares Outstanding		Weighted- Average Exercise Price
$33.69 - $37.34		12,373		0.96	$	34.52		12,373	$	34.52
$59.32 - $81.56		218,382		7.56	$	64.92		88,160	$	70.97
$87.34 - $93.03		200,296		6.63	$	90.84		116,623	$	90.31
$99.37 - $139.25		174,072		6.22	$	105.17		129,424	$	103.21
		605,123		6.73	$	84.45		346,580	$	88.22

At June 30, ~~2020,~~2021, the aggregate intrinsic value for both of the outstanding and exercisable options was approximately ~~$7.4~~$34.9 million and ~~$5.5~~$18.7 million, respectively. ~~NaN~~The total intrinsic value of options ~~were~~ exercised during the three months ended June 30, ~~2020.~~2021 was approximately $5.6 million.

In May ~~2020,~~2021, the Compensation Committee approved the granting to certain officers and key employees an aggregate of ~~82,722~~52,577 shares of ~~performance vesting~~performance-vesting restricted stock that will be earned if certain performance conditions are satisfied (the Fiscal ~~2021~~2022 Employee Restricted Stock Performance Award). The performance criteria for the Fiscal ~~2021~~2022 Employee Restricted Stock Performance Award is based upon the achievement of certain levels of return on equity (as defined in the award agreement), ranging from 10.0% to 20.0%, for the fiscal year ending March 31, ~~2021.~~2022. All restricted shares will be earned if the return on equity is 20.0% or greater, and the percentage of shares earned will be reduced proportionately to approximately 66.7% if the return on equity is 10.0%. If the Company does not achieve a return on equity of at least 10.0%, all awards will be forfeited. Following any such reduction, restrictions on the earned shares will lapse ratably over four years, with the initial fourth lapsing promptly following the determination date, and the remaining restrictions lapsing on March 31, ~~2022~~2023 through ~~2024.~~2025. The Compensation Committee also approved the granting of ~~68,936~~43,816 shares of time-vesting restricted stock to the same officers and key employees, which vest ratably over four years (the Fiscal ~~2021~~2022 Employee Restricted Stock Time-Vesting Award). The Fiscal ~~2020~~2022 Employee Restricted Stock Performance Award and the Fiscal ~~2021~~2022 Employee Restricted Stock Time-Vesting Award were valued at the closing price of the stock on the date of grant and are being expensed over a four-year period.

The fair value of restricted stock is based on the stock price at the date of grant. The following table summarizes the activity for nonvested restricted shares during the three months ended June 30, ~~2020:~~2021:

	Number of Shares			Weighted-Average Grant Date Fair Value		Number of Shares			Weighted-Average Grant Date Fair Value
Nonvested Restricted Stock March 31, 2020		233,120		$	78.94
Nonvested Restricted Stock at March 31, 2021							267,090		$	62.56
Granted		152,309		$	60.21		96,393		$	139.25
Vested		(49,727	)	$	55.50		(20,685	)	$	60.21
Forfeited		(6,127	)	$	91.58		(5,218	)	$	75.10
Nonvested Restricted Stock at June 30, 2020		329,575
Nonvested Restricted Stock at June 30, 2021							337,580

~~During the three months ended June 30, 2020, the weighted-average grant date fair value of restricted shares awarded was $60.21.~~

Expense related to restricted shares was approximately ~~$3.0~~$1.8 million and ~~$7.1~~$3.0 million for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020 respectively. At June 30, ~~2020,~~2021, there was approximately ~~$17.8~~$23.8 million of unearned compensation from restricted stock, which will be recognized over a weighted-average period of 2.9 years.

The number of shares available for future grants of stock options, restricted stock units, stock appreciation rights, and restricted stock under the Plan was ~~3,469,927~~3,396,823 at June 30, ~~2020.~~2021.

For the Three Months Ended June 30,

2020

2019

Weighted Average Shares of Common Stock Outstanding

41,410,794

43,870,222

Effect of Dilutive Shares:

Assumed Exercise of Outstanding Dilutive Options

130,687

750,654

Less Shares Repurchased from Proceeds of Assumed Exercised Options

(61,690
)

(591,647
)
Restricted Stock Units

83,477

120,982

Weighted Average Common Stock and Dilutive Securities Outstanding

41,563,268

44,150,211

Shares Excluded Due to Anti-dilution Effects

1,065,648

327,761

	For the Three Months Ended June 30,
	2021			2020
Weighted-Average Shares of Common Stock Outstanding		42,028,619			41,410,794
Effect of Dilutive Shares
Assumed Exercise of Outstanding Dilutive Options		652,877			130,687
Less Shares Repurchased from Proceeds of Assumed Exercised Options		(425,147	)		(61,690	)
Restricted Stock Units		181,017			83,477
Weighted-Average Common Stock and Dilutive Securities Outstanding		42,437,366			41,563,268
Shares Excluded Due to Anti-Dilution Effects		3,578			1,065,648

We sponsor several defined benefit pension plans and defined contribution plans, which together cover substantially all our employees. Benefits paid under the defined benefit plans covering certain hourly employees ~~are~~were historically based on years of service and the employee’s qualifying compensation over the last few years of employment. Over the last several years, these plans have been frozen to new participants and new benefits, with the last plan becoming frozen during fiscal 2020. Our pension plans are all fully funded, with plan assets exceeding the benefit obligation at March 31, 2021. Due to the frozen status, and the current funding, of the plans, our expected pension expense for fiscal 2022 is less than $0.1 million for the fiscal year.

~~The following table shows the components of net periodic (benefit) cost for our plans:~~

Income Taxes for the interim periods presented have been included in the accompanying financial statements on the basis of an estimated annual effective tax rate. In addition to the amount of tax resulting from applying the estimated annual effective tax rate to pre-tax income, we will include, when appropriate, certain items treated as discrete events to arrive at an estimated overall tax amount. The effective tax rate for the three months ended June 30, ~~2020~~2021 was approximately ~~25%~~22%, which was ~~in line with~~lower than the tax rate of 25% for the three months ended June 30, ~~2019. During the three months ended June 30, 2020, the~~2020. The effective tax rate ~~rose above~~was higher than the US Statutory rate of 21% ~~primarily~~mainly due to state income taxes, ~~and~~partially offset by a ~~discrete penalty that was recorded~~benefit recognized related to ~~an uncertain tax position.~~percentage depletion.

	June 30,			March 31,			June 30,			March 31,
	2020			2020			2021			2021
	(dollars in thousands)						(dollars in thousands)
Revolving Credit Facility	$	485,000		$	560,000		$	—		$	—
4.500% Senior Unsecured Notes Due 2026		350,000			350,000			350,000			350,000
Term Loan		665,000			665,000			665,000			665,000
Total Debt		1,500,000			1,575,000			1,015,000			1,015,000
Less: Debt Origination Costs		(7,912	)		(7,685	)		(5,965	)		(6,384	)
Long-term Debt	$	1,492,088		$	1,567,315		$	1,009,035		$	1,008,616

~~We have~~At June 30, 2021, we had a $750.0 million revolving credit facility (the Revolving Credit Facility), that ~~terminates on August 2, 2022. The borrowing capacity under the Revolving Credit Facility is $750.0~~included a $40.0 million until August 2, 2021, after which the aggregate borrowing capacity under the Revolving Credit Facility will be reduced to $665.0 million. The Revolving Credit Facility also includes a swingline loan sublimitletter of ~~$25.0 million.~~

Borrowings under the Revolving Credit Facility are guaranteed by all of the Company’s material subsidiaries. The debt under the Revolving Credit Facility is not rated by ratings agencies. At the Company’s option, principal amounts outstanding under the Revolving Credit Facility bear interest at a variable rate equal to either (i) the Adjusted LIBO Rate (as defined in the Revolving Credit Facility) plus an agreed spread (ranging from 125 to 200 basis points for loans scheduled to mature in 2021 and from 150 to 250 basis points for loans scheduled to mature in 2022), which is established quarterly based on the Company's then Leverage Ratio (as defined in the Revolving Credit Facility); or (ii) an Alternate Base Rate (as defined in the Revolving Credit Facility), which is the

highest of (a) the Prime Rate (as defined in the Revolving Credit Facility), (b) the NYFRB (as defined in the Revolving Credit Facility) plus ½ of 1%, and (c) the Adjusted LIBO Rate for a one-month interest period on such day, plus 1.0%, in each case plus an agreed upon spread (ranging from 25 to 100 basis points for loans scheduled to mature in 2021 and from 50 to 150 basis points for loans scheduled to mature in 2022) which is established quarterly based on the Company's then Leverage Ratio. In the case of loans bearing interest at a rate based on the Alternate Base Rate, interest payments are payable quarterly. In the case of loans bearing interest at a rate based on the Adjusted LIBO Rate, interest is payable at the end of the relevant Interest Period (as defined in the Revolving Credit Facility) for such borrowing unless such Interest Period is for more than three months duration, in which case such interest is payable at intervals of three months duration after the first day of such Interest Period, which can be up to six months at the option of the Company. The Company is also required to pay a commitment fee on unused available borrowings under the Revolving Credit Facility (ranging from 15 to 30 basis points for loans scheduled to mature in 2021 and from 20 to 40 basis points for loans scheduled to mature in 2022) which is established quarterly based on the Company's then Leverage Ratio. The Revolving Credit Facility contains customary covenants that restrict the Company’s and its Restricted Subsidiaries’ ability to incur additional debt; encumber assets; merge with or transfer or sell assets to other persons; make or enter into certain investments, loans, or guaranties; enter into certain swap agreements; enter into affiliate transactions or restrictive transactions; make restricted payments; prepay subordinated indebtedness; and enter into sale and leaseback arrangements. The Revolving Credit Facility also requires the Company to maintain at the end of each fiscal quarter a Leverage Ratio of 4.50:1.00 or less and an Interest Coverage Ratio (as defined in the Revolving Credit Facility) equal to or greater than 2.50 to 1.00.

Wecredit facility. There were ~~in compliance with all financial ratios and tests at June 30, 2020. We had $485.0 million of~~0 borrowings outstanding under the Revolving Credit Facility at June 30, 2020. We had $260.0 million of available borrowings under the Revolving Credit Facility, net of the outstanding letters of credit, at June 30, 2020, all of which was available for future borrowings based on our current Leverage Ratio.

The Revolving Credit Facility has a $40.0 million letter of credit facility. The Company pays each lender a participation fee with respect to such lender’s participations in letters of credit, which fee accrues at the same Applicable Rate (as defined in the Revolving Credit Facility) used to determine the interest rate applicable to Eurodollar Revolving Loans (as defined in the Revolving Credit Facility) plus a one-time letter of credit fee to the issuing bank of such letters of credit in an amount equal to 0.125% of the initial stated amount. At June 30, 2020, we had $5.02021, although there were $4.3 million of outstanding letters of credit. ~~We previously provided an irrevocable stand-by letter of credit for any borrowings made by our Joint Venture~~All fees and expenses owed under ~~its credit facility; however, this credit~~the Revolving Credit Facility were paid on July 1, 2021 and the facility was terminated ~~and the letter of credit cancelled in July 2020.~~(as more fully summarized below).

We ~~have~~had a term loan credit agreement (the Term Loan ~~Agreement)~~Facility) establishing a $665.0 million term loan facility which we used to pay a portion of the purchase price for the Kosmos Acquisition and fees and expenses incurred in connection with the Kosmos Acquisition in March ~~2020, which matures on August 2, 2022.~~

~~Borrowings under the~~2020. The Term Loan ~~Agreement bear interest, at our option, at a variable rate equal to either (i) the Alternate Base Rate (as defined in the Term Loan Agreement~~Facility was repaid on July 1, 2021 and consistent with the Revolving Credit Facility), plus an agreed spread (ranging from 50 to 150 basis points), or (ii) the Adjusted LIBO Rate (as defined in the Term Loan Agreement) plus an agreed spread (ranging from 150 to 250 basis points), which is established quarterly based on the Company's then Leverage Ratio (as defined in the Term Loan Agreement and consistent with the Revolving Credit Facility). The Company must also maintain a Leverage Ratio and Interest Coverage Ratio consistent with the Revolving Credit Facility.terminated.

On August 2, 2016, the Company issued $350.0 million aggregate principal amount of 4.500% senior notes ~~(Senior~~(4.500% Senior Unsecured Notes) due August 2026. ~~Interest~~These notes were redeemed in full on July 19, 2021 (the next succeeding business day following the ~~Senior Unsecured Notes is payable semiannually on February 1 and August 1 of each year until~~redemption date). The redemption price included all of the outstanding ~~notes are paid.~~principal and accrued interest through the redemption date of July 17, 2021, as well as an early termination premium of approximately $8.4 million.

On July 1, 2021, we terminated the Revolving Credit Facility and entered into an unsecured $750.0 million revolving credit facility (the New Revolving Credit Facility), which terminates on July 1, 2026. The New Revolving Credit Facility also provides the Company the option to increase the borrowing capacity by up to $375.0 million (for a total of $1,125 million in available borrowings), provided that the existing lenders, or new lenders, agree to such increase. The New Revolving Credit Facility includes a $40.0 million letter of credit facility and a swingline loan sub-facility of $25.0 million.

The New Revolving Credit Facility contains customary covenants for an unsecured investment-grade facility, including covenants that restrict the Company’s and/or its subsidiaries’ (as applicable) ability to incur additional debt; encumber assets; merge with or transfer or sell assets to other persons; and enter into certain affiliate transactions. The New Revolving Credit Facility also requires the Company to maintain at the end of each fiscal quarter a Leverage Ratio of 3.50:1.00 or less and an Interest Coverage Ratio (both ratios, as defined in the New Revolving Credit Facility) equal to or greater than 2.50 to 1.00 (collectively, the Financial Covenants).

At the Company’s option, principal amounts outstanding under the New Revolving Credit Facility bear interest at a variable rate equal to either (i) the Adjusted LIBO Rate (as defined in the New Revolving Credit Facility) plus an agreed spread (ranging from 100 to 162.5 basis points, which is established based on the Company's credit rating; or (ii) an Alternate Base Rate (as defined in the New Revolving Credit Facility), which is the highest of (a) the Prime Rate (as defined in the New Revolving Credit Facility) in effect on any applicable day, (b) the NYFRB Rate (as defined in the New Revolving Credit Facility) in effect on any applicable day, plus ½ of 1%, and (c) the Adjusted LIBO Rate for a one-month interest period on any applicable day (or if such day is not a Business Day (as defined in the New Revolving Credit Facility), the immediately preceding Business Day), plus 1.0%, in each case plus an agreed upon spread (ranging from 0 to 62.5 basis points) which is established quarterly based on the Company's credit rating. The Company is also required to pay a facility fee on unused available borrowings under the New Revolving Credit Facility ranging from 9 to 22.5 basis points which is established based on the Company's then credit rating.

The Company pays each lender a participation fee with respect to such lender’s participations in letters of credit, which fee accrues at the same Applicable Rate (as defined in the New Revolving Credit Facility) used to determine the interest rate applicable to Eurodollar Revolving Loans (as defined in the New Revolving Credit Facility) plus a fronting fee for each letter of credit issued by the issuing bank in an amount equal to 12.5 basis points per annum on the daily maximum amount then available to be drawn under such letter of credit. The Company also pays each issuing bank such bank’s standard fees with respect to issuance, amendment or extensions of letters of credit and other processing fees, and other standard costs and charges relating to such issuing bank’s letters of credit from time to time.

Assuming the Financial Covenants had been in effect on June 30, 2021, we would have been in compliance on such date, and, to the extent the Financial Covenants were tested on July 1, 2021, we would have also been in compliance on such date when we entered into the New Revolving Credit Facility. There were 0 borrowings outstanding under the New Revolving Credit Facility as of July 1, 2021, although we borrowed approximately $100.0 million under the New Revolving Credit Facility on July 19, 2021 to redeem a portion of the 4.500% Senior Unsecured Notes ~~rank equal~~(See discussion of 4.500% Senior Unsecured Notes 2026 above, and 2.500% Senior Unsecured Notes 2031 below for further discussion). In addition to ~~existing and future senior indebtedness, including~~ the borrowings, the $4.3 million outstanding letters of credit under the Revolving Credit Facility ~~and~~were transferred to the ~~Private Placement~~New Revolving Credit Facility on July 1, 2021. After the repayment of the 4.500% Senior Unsecured ~~Notes. Prior to August~~Notes, we had $645.7 million of available borrowings under the New Revolving Credit Facility, net of the outstanding letters of credit, all of which is available for future borrowings.

On July 1, 2021, we ~~may redeem some or all~~issued $750.0 million aggregate principal amount of ~~the~~2.500% senior notes due July 2031 (the 2.500% Senior Unsecured Notes). The 2.500% Senior Unsecured Notes are senior unsecured obligations of the Company and are not guaranteed by any of our subsidiaries. The 2.500% Senior Unsecured Notes were issued net of original issue discount of $6.3 million and have an effective interest rate of approximately 2.6%. The original issue discount is being amortized by the effective interest method over the ten-year term of the notes. The 2.500% Senior Unsecured Notes are redeemable prior to April 1, 2031 at a redemption price equal to 100% of the aggregate principal amount ~~plus a “make-whole” premium. Beginning August 1, 2021, we may redeem some or all~~ of the 2.500% Senior Unsecured Notes being redeemed, plus the present value of remaining scheduled payments of principal and interest from the applicable redemption date to April 1, 2031, discounted to the redemption date on a semi-annual basis at the Treasury rate plus 20 basis points. The 2.500% Senior Unsecured Notes are redeemable on or after April 1, 2031 at a redemption price equal to 100% of the aggregate principal amount of the 2.500% Senior Unsecured Notes being redeemed, plus accrued and unpaid interest to, but excluding, the applicable redemption date. If we experience certain change of control triggering events, we would be required to offer to repurchase the 2.500% Senior Unsecured Notes at ~~the redemption prices set forth below (expressed as~~ a ~~percentage~~purchase price equal to 101% of the aggregate principal amount ~~being redeemed):~~

~~The~~of the 2.500% Senior Unsecured Notes ~~contain~~being repurchased, plus accrued and unpaid interest to, but excluding, the applicable redemption date. The indenture governing the 2.500% Senior Unsecured Notes contains certain covenants that limit our ~~ability and/or our guarantor subsidiaries'~~ ability to create or permit to exist certain liens;

enter into sale and leaseback transactions; and consolidate, merge, or transfer all or substantially all of our ~~assets. The Company’s~~assets, and provides for certain events of default that, if any occurred, would permit or require the principal of and accrued interest on the 2.500% Senior Unsecured Notes ~~are fully, unconditionally, jointly,~~to become or be declared due and ~~severally guaranteed by each~~payable.

In connection with the issuance of ~~our subsidiaries that are guarantors~~the 2.500% Senior Unsecured notes, on July 1, 2021 we repaid all outstanding amounts under and terminated the Term Loan Facility. Additionally, on July 19, 2021, we redeemed and paid in full all outstanding amounts due under the 4.500% Senior Unsecured Notes, using proceeds from the 2.500% Senior Unsecured Notes, the New Revolving Credit Facility and cash on hand. In connection with the termination and repayment of the Term Loan ~~Agreement. See Footnote (R) for more information on~~Facility and the ~~guarantors~~redemption of the 4.500% Senior ~~Public Notes.~~Unsecured Notes, we will expense approximately $6.0 million of related debt issuance costs in July 2021.

Subsequent to the issuance of the 2.500% Senior Unsecured Notes, the repayment of the Term Loan, and the redemption of the 4.500% Senior Unsecured Notes, our Long-term Debt consists of the following:

We lease one of our cement plants from the city of Sugar Creek, Missouri. The city of Sugar Creek issued industrial revenue bonds to partly finance improvements to the cement plant. The lease payments due to the city of Sugar Creek under the cement plant lease, which was entered into upon the sale of the industrial revenue bonds, are equal in amount to the payments required to be made by the city of Sugar Creek to the holders of the industrial revenue bonds. Because we hold all outstanding industrial revenue bonds, no debt is reflected on our financial statements in connection with our lease of the cement plant. Upon expiration of the lease in fiscal 2021, we have the option to purchase the cement plant for a nominal amount.

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

~~We are a leading supplier~~ On September 18, 2020, we sold our Oil and Gas Proppants business, which had been reported as an operating segment. The Oil and Gas Proppants business was determined to meet the discontinued operations accounting criteria; therefore, this segment is no longer separately reported in our reportable segment footnote for any of ~~heavy construction materials~~the periods presented. Certain expenses of the Oil and ~~light building materials~~Gas Proppants business that related to assets not included in the ~~United States.~~ sale, namely real property and equipment in south Texas, real property in Illinois, and certain other assets, are included in Other when reconciling segment operating earnings to consolidated operating earnings. See Footnote (C) for more information about the sale of the Oil and Gas Proppants business.

Our business is organized into 2 sectors within which there are 4 reportable business segments. The Heavy Materials sector includes the Cement and Concrete and Aggregates segments. The Light Materials sector includes the Gypsum Wallboard and Recycled Paperboard segments.

Our primary products are commodities that are essential in commercial and residential construction; public construction projects; and projects to build, expand, and repair roads and highways. Demand for our products is generally cyclical and seasonal, depending on economic and geographic conditions. We distribute our products across many United States markets, which provides us with regional economic diversification. ~~We also produce sand used in hydraulic fracturing as part of our Oil and Gas Proppants segment.~~

Our business is organized into 3 sectors within which there are 5 reportable business segments. The Heavy Materials sector includes the Cement and Concrete and Aggregates segments. The Light Materials sector includes the Gypsum Wallboard and Recycled Paperboard segments. The Oil and Gas Proppants segment produces frac sand used in oil and gas extraction.

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

We operate 8 modern cement plants (1(one of which is operated through a joint venture located in Buda, Texas), ~~one~~1 slag grinding facility, and 29 cement distribution terminals. Our cement companies focus on the U.S.

heartland and operate as an integrated network selling product primarily in California, Colorado, Illinois, Indiana, Iowa, Kentucky, Missouri, Nebraska, Nevada, Ohio, Oklahoma, and Texas. We operate 2326 readymix concrete batch plants and 43 aggregates processing plants in markets that are complementary to our cement network. On April 17, 2020, we sold our Concrete and Aggregates companies in northern California. See Footnote ~~(D)~~(C) for more information about the sale.

We operate 5 gypsum wallboard plants and a recycled paperboard mill. We distribute gypsum wallboard and recycled paperboard throughout the continental U.S., with the exception of the Northeast.

Our Oil and Gas Proppants business owns 2 frac sand processing facilities, 4 frac sand drying facilities, and 2 frac sand trans-load locations. Frac sand is sold into shale deposits across the United States. During May 2020, we significantly curtailed our operating activities at our frac sand facilities.

We account for intersegment sales at market prices. For segment reporting purposes only, we proportionately consolidate our 50% share of the Joint Venture Revenue and Operating Earnings, consistent with the way management reports the segments within the Company for making operating decisions and assessing performance.

The following table sets forth certain financial information relating to our operations by segment. We do not allocate interest or taxes at the segment level; these costs are disclosed at the consolidated company level.

	For the Three Months Ended June 30,						For the Three Months Ended June 30,
	2020			2019			2021			2020
	(dollars in thousands)						(dollars in thousands)
Revenue -
Revenue
Cement	$	261,411		$	195,313		$	270,255		$	261,411
Concrete and Aggregates		44,190			39,778			44,754			44,190
Gypsum Wallboard		130,150			126,724			166,267			130,150
Paperboard		36,744			42,700			43,267			36,744
Oil and Gas Proppants		1,031			15,232
		473,526			419,747			524,543			472,495
Less: Intersegment Revenue		(20,206	)		(21,645	)		(26,082	)		(20,206	)
Less: Joint Venture Revenue		(25,300	)		(27,505	)		(22,691	)		(25,300	)
	$	428,020		$	370,597		$	475,770		$	426,989

	For the Three Months Ended June 30,						For the Three Months Ended June 30,
	2020			2019			2021			2020
	(dollars in thousands)						(dollars in thousands)
Operating Earnings -
Operating Earnings
Cement	$	60,455		$	36,121		$	62,547		$	60,455
Concrete and Aggregates		5,418			4,434			5,344			5,418
Gypsum Wallboard		41,325			37,932			63,253			41,325
Paperboard		2,895			9,944			3,337			2,895
Oil and Gas Proppants		(1,318	)		(3,670	)
Sub-Total		108,775			84,761			134,481			110,093
Corporate General and Administrative Expense		(17,789	)		(21,254	)		(9,468	)		(17,789	)
Gain on Sale of Businesses		51,973			—			—			51,973
Other Non-Operating Income (Loss)		(127	)		200			3,678			(309	)
Earnings Before Interest and Income Taxes		142,832			63,707			128,691			143,968
Interest Expense, net		(14,041	)		(8,846	)		(6,972	)		(14,041	)
Earnings Before Income Taxes	$	128,791		$	54,861		$	121,719		$	129,927
Cement Operating Earnings -
Cement Operating Earnings
Wholly Owned	$	52,659		$	26,689		$	54,577		$	52,659
Joint Ventures		7,796			9,432			7,970			7,796
	$	60,455		$	36,121		$	62,547		$	60,455
Capital Expenditures -
Capital Expenditures
Cement	$	10,348		$	10,537		$	7,967		$	10,348
Concrete and Aggregates		1,261			595			546			1,261
Gypsum Wallboard		6,512			1,931			1,694			6,512
Paperboard		7,870			12,360			1,117			7,870
Oil and Gas Proppants		—			65
Other, net		—			—
Corporate and Other								611			—
	$	25,991		$	25,488		$	11,935		$	25,991
Depreciation, Depletion, and Amortization -
Depreciation, Depletion, and Amortization
Cement	$	19,243		$	14,218		$	19,531		$	19,243
Concrete and Aggregates		2,721			2,191			2,578			2,721
Gypsum Wallboard		5,200			4,952			5,396			5,200
Paperboard		3,352			2,163			3,668			3,352
Oil and Gas Proppants		121			3,839
Corporate and Other		1,300			597			771			1,300
	$	31,937		$	27,960		$	31,944		$	31,816

Discontinued Operations
Depreciation, Depletion, and Amortization							$	—		$	121

The capital expenditures for the three months ended June 30, 2019 disclosed above differs from the capital expenditures on the Unaudited Consolidated Statement of Cash Flows as it includes $3.7 million of capital expenditures that were accrued at June 30, 2019 and therefore not included in the Statement of Cash Flows. See Footnote (B) for more information.

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

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

	June 30,		March 31,		June 30,		March 31,
	2020		2020		2021		2021
	(dollars in thousands)				(dollars in thousands)
Cement	$	203,342	$	205,797	$	203,342	$	203,342
Concrete and Aggregates		1,639		1,639		1,639		1,639
Gypsum Wallboard		116,618		116,618		116,618		116,618
Paperboard		7,538		7,538		7,538		7,538
	$	329,137	$	331,592	$	329,137	$	329,137

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

	For the Three Months Ended June 30,				For the Three Months Ended June 30,
	2020		2019		2021		2020
	(dollars in thousands)				(dollars in thousands)
Revenue	$	50,600	$	55,010	$	45,382	$	50,600
Gross Margin	$	16,765	$	19,866	$	16,833	$	16,765
Earnings Before Income Taxes	$	15,727	$	19,017	$	16,189	$	15,727

	June 30,		March 31,		June 30,		March 31,
	2020		2020		2021		2021
	(dollars in thousands)				(dollars in thousands)
Current Assets	$	70,153	$	77,331	$	67,254	$	66,871
Non-Current Assets	$	99,488	$	93,093	$	107,390	$	107,617
Current Liabilities	$	18,302	$	17,197	$	15,043	$	16,390

	For the Three Months Ended June 30,					For the Three Months Ended June 30,
	2020		2019			2021			2020
	(dollars in thousands)					(dollars in thousands)
Interest Income	$	—	$	(4	)	$	(25	)	$	—
Interest Expense		13,019		8,559			6,126			13,019
Other Expenses		1,022		291			871			1,022
Interest Expense, net	$	14,041	$	8,846		$	6,972		$	14,041

Interest Income includes interest earned on investments of excess cash. Components of Interest Expense include interest associated with the Revolving Credit Facility, Term Loan, Senior Unsecured Notes, and commitment fees based on the unused portion of the Revolving Credit Facility. Other Expenses include amortization of debt issuance costs and Revolving Credit Facility costs.

We have certain deductible limits under our workers’ compensation and liability insurance policies for which reserves are established based on the undiscounted estimated costs of known and anticipated claims. We have entered into standby letter of credit agreements relating to workers’ compensation, ~~and~~ auto, and general liability self-insurance. At June 30, ~~2020,~~2021, we had contingent liabilities under these outstanding letters of credit of approximately ~~$5.0~~$4.3 million.

In the ordinary course of business, we execute contracts involving indemnifications that are both standard in the industry and ~~indemnifications~~ specific to a transaction such as the sale of a business. These indemnifications may include claims relating to any of the following: environmental and tax matters; intellectual property rights; governmental

regulations and employment-related matters; customer, supplier, and other commercial contractual relationships; construction contracts and financial matters. While the maximum amount to which the Company may be exposed under such agreements cannot be estimated, management believes these indemnifications will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows. We currently have 0 outstanding guarantees.

We are currently contingently liable for performance under ~~$29.9~~$25.6 million in performance bonds required by certain states and municipalities and their related agencies. The bonds are principally for certain reclamation obligations and mining permits. We have indemnified the underwriting insurance company against any exposure under the performance bonds. In our past experience, no material claims have been made against these financial instruments.

The fair value of our long-term debt has been estimated based upon our current incremental borrowing rates for similar types of borrowing arrangements. The fair value of our Senior Unsecured Notes at June 30, ~~2020~~2021 is as follows:

The estimated fair value of our long-term debt was based on quoted prices of similar debt instruments with similar terms that are publicly traded (level 2 input). The carrying values of ~~cash~~Cash and ~~cash equivalents, accounts~~Cash Equivalents, Accounts Receivable, Notes Receivable, Accounts Payable, and ~~notes receivable, accounts payable, and accrued liabilities~~Accrued Liabilities approximate their fair values at June 30, ~~2020,~~2021, due to the short-term maturities of these assets and liabilities. The fair value of our ~~Revolving Credit Facility and~~ Term Loan also approximates ~~their~~its carrying ~~values~~value at June 30, ~~2020.~~2021.

~~(S) FINANCIAL STATEMENTS FOR GUARANTORS OF THE 4.500% SENIOR UNSECURED NOTES~~

On August 2, 2016, the Company completed a public offering of its Senior Unsecured Notes. The Senior Unsecured Notes are senior unsecured obligations of the Company and were offered under the Company’s existing shelf registration statement filed with the Securities and Exchange Commission.

Our Senior Unsecured Notes are guaranteed by all of the Company’s wholly-owned subsidiaries, except for those subsidiaries comprising the Oil and Gas Proppants business. The guarantees are full and unconditional, and joint and several. The subsidiaries comprising the Oil and Gas Proppants business were guarantors of the Senior Unsecured Notes at March 31, 2020, but beginning in April 2020 they were removed from the guarantor group.

The following unaudited condensed consolidating financial statements present separately the Earnings and Comprehensive Earnings, financial position, and Cash Flows of the parent issuer (Eagle Materials Inc.), the guarantors (all wholly owned subsidiaries of Eagle Materials Inc., with the exception of the Oil and Gas Proppants businesses beginning April 1, 2020) and the non-guarantors (the Oil and Gas Proppants businesses beginning April 1, 2020) on a combined basis with eliminating entries (dollars in thousands).

Condensed Consolidating Statement of Earnings and Comprehensive Earnings For the Three Months Ended June 30, 2020

Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated

Revenue

$
—

$
426,989

$
1,031

$
—

$
428,020

Cost of Goods Sold

—

324,692

2,349

—

327,041

Gross Profit

—

102,297

(1,318
)

—

100,979

Equity in Earnings of Unconsolidated Joint Venture

7,796

7,796

—

(7,796
)

7,796

Equity in Earnings of Subsidiaries

63,684

—

—

(63,684
)

—

Corporate General and Administrative Expenses

(14,411
)

(3,260
)

(118
)

—

(17,789
)
Gain on Sale of Businesses

51,973

—

—

—

51,973

Other Non-Operating Income (Loss)

(375
)

67

181

—

(127
)
Interest Expense, net

(14,028
)

(13
)

—

—

(14,041
)
Earnings before Income Taxes

94,639

106,887

(1,255
)

(71,480
)

128,791

Income Taxes

1,567

(34,502
)

350

—

(32,585
)
Net Earnings

$
96,206

$
72,385

$
(905
)

$
(71,480
)

$
96,206

Net Earnings

$
96,206

$
72,385

$
(905
)

$
(71,480
)

$
96,206

Net Actuarial Change in Benefit Plans, net of tax

25

25

—

(25
)

25

Comprehensive Earnings

$
96,231

$
72,410

$
(905
)

$
(71,505
)

$
96,231

Condensed Consolidating Statement of Earnings and Comprehensive Earnings For the Three Months Ended June 30, 2019

Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated

Revenue

$
—

$
370,597

$
—

$
—

$
370,597

Cost of Goods Sold

—

295,268

—

—

295,268

Gross Profit

—

75,329

—

—

75,329

Equity in Earnings of Unconsolidated Joint Venture

9,432

9,432

—

(9,432
)

9,432

Equity in Earnings of Subsidiaries

55,742

—

—

(55,742
)

—

Corporate General and Administrative Expenses

(20,968
)

(286
)
��

—

—

(21,254
)
Other Non-Operating Income

426

(226
)

—

—

200

Interest Expense, net

(8,834
)

(12
)

—

—

(8,846
)
Earnings before Income Taxes

35,798

84,237

—

(65,174
)

54,861

Income Taxes

5,506

(19,063
)

—

—

(13,557
)
Net Earnings

$
41,304

$
65,174

$
—

$
(65,174
)

$
41,304

Net Earnings

$
41,304

$
65,174

$
—

$
(65,174
)

$
41,304

Net Actuarial Change in Benefit Plans, net of tax

33

33

—

(33
)

33

Comprehensive Earnings

$
41,337

$
65,207

$
—

$
(65,207
)

$
41,337

Condensed Consolidating Balance Sheet at June 30, 2020

Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated

ASSETS

Current Assets -

Cash and Cash Equivalents

$
196,831

$
2,600

$
10

$
—

$
199,441

Accounts and Notes Receivable

1,463

192,271

830

—

194,564

Inventories

—

242,658

467

—

243,125

Income Tax Receivable

123,709

—

—

—

123,709

Prepaid and Other Current Assets

1,199

9,415

140

—

10,754

Total Current Assets

323,202

446,944

1,447

—

771,593

Property, Plant, and Equipment, net

6,329

1,714,389

5,645

—

1,726,363

Notes Receivable

—

9,068

—

—

9,068

Investment in Joint Venture

70

72,184

—

—

72,254

Investments in Subsidiaries and Receivables from Affiliates

2,543,210

215,702

468

(2,759,380
)

—

Deferred Income Taxes

9,246

—

43,742

(52,988
)

—

Operating Lease Right of Use Assets

9,576

19,373

955

—

29,904

Goodwill and Intangible Assets, net

—

395,673

—

—

395,673

Other Assets

5,029

5,280

—

—

10,309

$
2,896,662

$
2,878,613

$
52,257

$
(2,812,368
)

$
3,015,164

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities-

Accounts Payable

$
3,052

$
77,371

1,562

$
—

$
81,985

Accrued Liabilities

38,027

34,963

2,492

—

75,482

Income Taxes Payable

32,130

—

—

—

32,130

Operating Lease Liabilities

1,197

5,702

3,537

—

10,436

Total Current Liabilities

74,406

118,036

7,591

—

200,033

Long-term Debt

1,492,088

—

—

—

1,492,088

Noncurrent Lease Liabilities

11,952

26,783

8,743

—

47,478

Other Long-term Liabilities

3,500

35,362

5,805

—

44,667

Payables to Affiliates

246,758

6,813,951

51,727

(7,112,436
)

—

Deferred Income Taxes

-

215,928

—

(52,988
)

162,940

Total Liabilities

1,828,704

7,210,060

73,866

(7,165,424
)

1,947,206

Total Stockholders’ Equity

1,067,958

(4,331,447
)

(21,609
)

4,353,056

1,067,958

$
2,896,662

$
2,878,613

$
52,257

$
(2,812,368
)

$
3,015,164

Condensed Consolidating Balance Sheet at March 31, 2020

Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated

ASSETS

Current Assets -

Cash and Cash Equivalents

$
116,269

$
2,379

$
—

$
—

$
118,648

Accounts and Notes Receivable

531

151,255

—

—

151,786

Inventories

—

272,508

—

—

272,508

Income Tax Receivables

128,413

—

—

—

128,413

Prepaid and Other Current Assets

953

5,909

—

—

6,862

Total Current Assets

246,166

432,051

—

—

678,217

Property, Plant, and Equipment, net

6,606

1,755,503

—

—

1,762,109

Notes Receivable

—

9,139

—

—

9,139

Investment in Joint Venture

70

73,888

—

—

73,958

Operating Lease Right-of-Use Assets

9,765

20,765

—

—

30,530

Investments in Subsidiaries and Receivables from Affiliates

2,489,326

179,398

—

(2,668,724
)

—

Deferred Taxes

11,409

—

—

(11,409
)

—

Goodwill and Intangible Assets, net

—

396,463

—

—

396,463

Other Assets

4,417

6,187

—

—

10,604

$
2,767,759

$
2,873,394

$
—

$
(2,680,133
)

$
2,961,020

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities-

Accounts Payable

$
6,365

$
79,832

—

$
—

$
86,197

Accrued Liabilities

33,409

39,884

—

—

73,293

Operating Lease Liabilities

1,180

9,027

—

—

10,207

Total Current Liabilities

40,954

128,743

—

—

169,697

Long-term Debt

1,567,315

—

—

—

1,567,315

Noncurrent Operating Lease Liabilities

12,249

37,560

—

—

49,809

Other Long-term Liabilities

—

39,689

—

—

39,689

Payables to Affiliates

179,398

6,324,504

—

(6,503,902
)

—

Deferred Income Taxes

—

178,076

—

(11,409
)

166,667

Total Liabilities

1,799,916

6,708,572

—

(6,515,311
)

1,993,177

Total Stockholders’ Equity

967,843

(3,835,178
)

—

3,835,178

967,843

$
2,767,759

$
2,873,394

$
—

$
(2,680,133
)

$
2,961,020

Condensed Consolidating Statement of Cash Flows For the Three Months Ended June 30, 2020

Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated

CASH FLOWS FROM OPERATING ACTIVITIES

Net Cash Provided by (Used in) Operating Activities

$
21,481

$
70,804

$
3,028

$
—

$
95,313

CASH FLOWS FROM INVESTING ACTIVITIES

Additions to Property, Plant, and Equipment

—

(25,991
)

—

—

(25,991
)
Proceeds from Sale of Businesses

93,482

—

—

—

93,482

Net Cash Used in Investing Activities

93,482

(25,991
)

—

—

67,491

CASH FLOWS FROM FINANCING ACTIVITIES

Increase (Decrease) in Credit Facility

(75,000
)

—

—

—

(75,000
)
Dividends Paid to Stockholders

(4,163
)

—

—

—

(4,163
)
Payment of Debt Issuance Costs

(1,718
)

—

—

—

(1,718
)
Shares Redeemed to Settle Employee Taxes on
   Stock Compensation

(1,130
)

—

—

—

(1,130
)
Intra-entity Activity, net

47,610

(44,592
)

(3,018
)

—

—

Net Cash Provided by (Used in) Financing Activities

(34,401
)

(44,592
)

(3,018
)

—

(82,011
)
NET INCREASE IN CASH AND CASH
   EQUIVALENTS AND RESTRICTED CASH

80,562

221

10

—

80,793

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT
   BEGINNING OF PERIOD

116,269

2,379

—

—

118,648

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT
   END OF PERIOD

$
196,831

$
2,600

$
10

$
—

$
199,441

Condensed Consolidating Statement of Cash Flows For the Three Months Ended June 30, 2019

Parent

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated

CASH FLOWS FROM OPERATING ACTIVITIES

Net Cash Provided by (Used in) Operating Activities

$
(6,412
)

$
57,110

$
—

$
—

$
50,698

CASH FLOWS FROM INVESTING ACTIVITIES

Additions to Property, Plant, and Equipment

—

(21,813
)

—

—

(21,813
)
Net Cash Used in Investing Activities

—

(21,813
)

—

—

(21,813
)
CASH FLOWS FROM FINANCING ACTIVITIES

Increase in Credit Facility

185,000

—

—

—

185,000

Dividends Paid to Stockholders

(4,499
)

—

—

—

(4,499
)
Purchase and Retirement of Common Stock

(198,355
)

—

—

—

(198,355
)
Proceeds from Stock Option Exercises

396

—

—

—

396

Shares Redeemed to Settle Employee Taxes on
   Stock Compensation

(866
)

—

—

—

(866
)
Intra-entity Activity, net

35,838

(35,838
)

—

—

—

Net Cash Provided by (Used in) Financing Activities

17,514

(35,838
)

—

—

(18,324
)
NET INCREASE IN CASH AND CASH EQUIVALENTS
   AND RESTRICTED CASH

11,102

(541
)

—

—

10,561

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT
   BEGINNING OF PERIOD

5,779

2,822

—

—

8,601

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT
   END OF PERIOD

$
16,881

$
2,281

$
—

$
—

$
19,162

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

We are a leading supplier of heavy construction materials and light building materials in the United States. Our primary products are commodities that are essential in commercial and residential construction; public construction projects; and projects to build, expand, and repair roads and highways. Demand for our products is generally cyclical and seasonal, depending on economic and geographic conditions. We distribute our products ~~across many~~throughout most of the United States, ~~markets,~~except the Northeast, which provides us with regional economic diversification. ~~We also produce sand used~~However, general economic downturns or localized downturns in ~~hydraulic fracturing as part~~the regions where we have operations may have a material adverse effect on our business, financial condition, and results of ~~our Oil and Gas Proppants sector.~~operations.

Our business is organized into ~~three~~two sectors: Heavy Materials, which includes the Cement and Concrete and Aggregates segments; and Light Materials, which includes the Gypsum Wallboard and Recycled Paperboard ~~segments; and Oil and Gas Proppants, which are used in oil and natural gas extraction.~~segments. Financial results and other information for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, are presented on a consolidated basis and by these business segments – Cement, Concrete and Aggregates, Gypsum Wallboard, and Recycled ~~Paperboard, and Oil and Gas Proppants.~~Paperboard.

We conduct one of our cement operations through a joint venture, Texas Lehigh Cement Company LP, which is located in Buda, Texas (the Joint Venture). We own a 50% interest in the Joint Venture and account for our interest under the equity method of accounting. We proportionately consolidate our 50% share of the Joint Venture’s Revenue and Operating Earnings in the presentation of our Cement segment, which is the way management organizes the segments within the Company for making operating decisions and assessing performance.

All our business activities are conducted in the United States. These activities include the mining of limestone for the manufacture, production, distribution, and sale of portland cement (a basic construction material that is the essential binding ingredient in concrete); the grinding and sale of slag; the mining of gypsum for the manufacture and sale of gypsum wallboard; the manufacture and sale of recycled paperboard to the gypsum wallboard industry and other paperboard converters; the sale of readymix concrete; and the mining and sale of aggregates (crushed stone, sand, and gravel);.

On September 18, 2020, we sold our Oil and Gas Proppants business, which had previously been reported as a separate operating segment. Because the ~~mining and~~ sale of ~~sand used~~the Oil and Gas Proppants business was determined to meet the accounting criteria for discontinued operations, this segment is no longer separately reported in ~~hydraulic fracturing (frac sand).~~

~~Demand~~our reportable segment footnote for ~~our products is generally cyclical and seasonal, depending on economic and geographic conditions. We distribute our products throughout most~~any of the ~~United States, except the Northeast, which provides us with regional economic diversification. However, general economic downturns or localized downturns~~periods presented. See Footnote (C) in the ~~regions where we have operations may have a material adverse effect on our business, financial condition, and results of operations.~~

~~On August 2, 2019, we acquired~~Unaudited Consolidated Financial Statements for more information about the ~~assets of a readymix concrete and aggregates business (the ConAgg Acquisition). The purchase price (Purchase Price)~~sale of the ~~ConAgg Acquisition was approximately $30.4 million. The Purchase Price~~Oil and expenses incurred in connection with the ConAgg Acquisition were funded through operating cash flows and borrowings under our Revolving Credit Facility. The ConAgg Acquisition’s assets and operating results are included in our Concrete and Aggregates segment reporting from August 2, 2019 through March 31, 2020, and for the three months ended June 30, 2020.

On March 6, 2020, we acquired the assets of Kosmos Cement Company (Kosmos), a joint venture between CEMEX S.A.B. de C.V. and Buzzi Unicem S.p.A. for approximately $669 million (the Kosmos Acquisition). The Kosmos Acquisition included (i) a cement plant located in Louisville, Kentucky, (ii) a limestone quarry located in Battletown, Kentucky, (iii) cement distribution terminals located in Indianapolis, Indiana; Cincinnati, Ohio; Pittsburgh, Pennsylvania; Charleston, West Virginia; Ceredo, West Virginia; Mt. Vernon, Indiana; and Lexington, Kentucky, and (iv) certain other properties and assets used by Kosmos in connection with the foregoing (collectively, the Kosmos Business). We also assumed certain liabilities and obligations of Kosmos relating to the Kosmos Business, including contractual obligations, reclamation obligations and various other liabilities and obligations arising out of or relating to the Kosmos Business. We funded the payment of the purchase price and expenses incurred in connection with the transaction through a combination of cash on hand and a syndicated term loan facility. The Kosmos Business’ assets and operating results are included in our Cement segment reporting from March 6, 2020 through March 31, 2020, and for the three months ended June 30, 2020.Gas Proppants business.

On April 17, 2020, we sold our Western Aggregates LLC (Western) and Mathews Readymix LLC (Mathews) businesses for an aggregate purchase price of $93.5 million, resulting in a gain of $52.0 million. Western and Mathews were part of our Concrete and Aggregates operating segment, and their results of operations were included in our financial statements for the period from April 1, 2020 through April 17, 2020.

As previously announced on May 30, 2019, the Company plans to separate its Heavy Materials and Light Materials businesses into two independent, publicly traded corporations by means of a tax-free spin-off to Eagle shareholders. We remain committed to the separation, although the timing is uncertain. We continue preparations to ensure that the two businesses are well-positioned for the separation when the markets recover from the effects of the COVID-19 pandemic.

~~During~~We remain well positioned to manage our cost structure and meet our customers’ requirements during the ~~fourth quarter~~remainder of fiscal 2020, several macroeconomic factors had a positive impact on the construction sector, including low interest rates, high consumer confidence and robust employment, which led to favorable trends in housing starts, state construction lettings and construction employment. These factors continued to have a positive effect on both our Heavy Materials and Light Materials businesses during2022. In the first quarter of fiscal ~~2021, despite the extraordinary~~2022, residential construction activity remained robust, and ~~wide-ranging actions taken by international, federal, state,~~infrastructure spending continued at high levels. We expect demand for our Wallboard and local public health and governmental authorities to contain and combat the spread of COVID-19, including quarantines, “shelter-in-place” orders and similar mandates for many individuals to substantially restrict daily activities and for manyCement businesses to curtail or cease normal operations. To date, we have not been materially affected by governmental orders requiring businesses to curtail or cease normal operations. We are continuing to operate as an essential businessremain strong throughout fiscal 2022. Additionally, if the proposed federal infrastructure program is passed, investment in ~~virtually all of~~roads, bridges, and other infrastructure will increase further throughout the markets we serve. However, in light of the continued spread COVID-19, we are closely monitoring the disruptions caused by the pandemic and their possible effects on our business in current and future periods. country.

Although the COVID-19 pandemic did not have a significant impact on our business in fiscal 2020 or the first quarter of fiscal 2021, we believe it is likely to negatively affect us in subsequent periods. The timing, nature and extent of its impact, however, is highly uncertain. To date, the pandemic and responses ~~designed to contain its spread and mitigate its public health effects~~ have resulted in significant job losses, causing an increase in the U.S. unemployment rate from 3.5% in February 2020 to 11.1% in June 2020, which is among the sharpest increases on record. In addition, consumer confidence has substantially decreased in many of the markets in which we operate. We expect that the new residential housing market, which depends to a significant extent on the amount of funds available to and expended by consumers, likely will be the first of our market segments to be materially affected. In fiscal 2020, approximately 50% of our wallboard business and 25% of our cement business was attributable to new residential construction.

Cement and ~~local government revenues~~Concrete and construction budgets, and may result in delays, cancellations or curtailment of construction projects in the future. We continue to monitor our operations, the operations of our customers and actions taken by the various national, state, and local governments in the areas in which we operate.

The extent to which the spread of COVID-19 will impact the national and local economies in which we operate, and ultimately our business, will depend on numerous factors, which are highly uncertain and difficult to predict. Our integrated cement sales network stretches across the U.S. heartland. The Portland Cement Association is estimating cement consumption will increase in calendar 2020 over 2019 by approximately 2%. In addition to weather, cement and concrete and aggregatesAggregates markets are affected by infrastructure spending, residential construction, ~~and~~ industrial construction ~~activity. While we anticipate~~activity, and weather. The Portland Cement Association estimates that in calendar 2021 cement consumption will increase approximately 2% over 2020. Despite underlying market demand, ~~will remain strong~~our organic Cement sales volume growth is expected to be limited in fiscal 2022 because our markets throughout the remainder of the calendar 2020, the uncertainty around the COVID-19 pandemic and possible “second-wave” cases may cause demand to weaken during the fall. Oil well cement demand has been negatively affected by the reduction in drilling activity; however, oil wellintegrated cement sales ~~volume represented less than 2% of cement volume in~~network, which stretches across the ~~three months ended June 30, 2020.~~U.S. heartland, is operating at high utilization levels.

Our primary Gypsum Wallboard sales network stretches across the southern half of the United States, consistent with our facility network. Wallboard demand is heavily influenced by new residential housing construction, as well as repair and remodeling activity. ~~Demand for~~Residential housing starts increased, on a seasonally adjusted basis, approximately 29% in during the first six-months of calendar 2021, compared with 2020, and ~~construction of new homes, was strong during three months ended June 30, 2020, in part aided by historically low interest rates. We anticipate demand~~are expected to remain ~~consistent for~~strong throughout the ~~next two quarters; however,~~remainder of the ~~uncertainty around the COVID-19 pandemic~~calendar year. Repair and ~~possible “second-wave” cases may cause demand~~remodel activity proved resilient in 2020 and is expected to ~~weaken during the late summer or early fall.~~ continue to gain strength in calendar 2021.

Our Recycled Paperboard business ~~primarily~~ sells paper primarily into the gypsum wallboard market, and demand for paper generally follows the demand for gypsum wallboard. The primary raw material used to produce ~~recycled~~ paperboard is ~~recycled fiber, also known as OCC. During~~Old Carboard Containers (OCC). Prices for OCC increased during the fiscal first quarter ~~recycled fiber costs increased a total~~ of ~~$75 per ton over~~2022, and we anticipate that they could increase again in the course of April and May because of a significant decline in generation as many states issued shelter-in-place orders to combat the COVID-19 pandemic. As economies began to re-open and recycled fiber generation increased, costs declined a total of $55 per ton over the course of June and July. We expect OCC pricing will remain fairly consistent over the nextfiscal second quarter ~~but pricing remains sensitive to any changes in economic activity related to COVID-19, which could result in further pricing volatility over~~before leveling off for the remainder of ~~our~~the fiscal year. ~~Our~~Although current gypsum liner customer contracts include price escalators that partially offset and compensate for changes in raw material fiber prices, ~~so the impact of the OCC price~~these increases ~~in the first quarter~~ likely will adversely affect ~~our wallboard operations by increasing~~ the cost of paper ~~during~~used to manufacture gypsum wallboard by our ~~second fiscal quarter.~~Gypsum Wallboard segment.

~~During March and April 2020, oil prices declined to all-time lows due to the decrease in demand for oil resulting from the COVID-19 pandemic.~~ At the same time, increases in production of oil by Saudi Arabia and Russia created a significant surplus in supply and resulted in sharp declines in oil and gas prices. These developments have led to substantial decreases in drilling and well-completion activity beginning in March 2020. The reduction in drilling activity has negatively affected demand for our frac sand and oil well cement, and led to a significant reduction or cessation of new orders. In response to these market conditions, we have curtailed our operations and reduced headcount at our frac sand facilities and are focused on preserving the value of our operating assets for future use. As previously disclosed, we are actively pursuing alternatives for our Oil and Gas Proppants business. If this results in an alternative use or disposition of this business, additional impairment or other losses may be incurred.

THREE MONTHS ENDED JUNE 30, ~~2020~~2021 Compared WITH THREE MONTHS ENDED June 30, ~~2019~~2020

	For the Three Months Ended June 30,									For the Three Months Ended June 30,
	2020			2019			Change			2021			2020			Change
	(in thousands, except per share)									(in thousands, except per share)
Revenue	$	428,020		$	370,597			15	%	$	475,770		$	426,989			11	%
Cost of Goods Sold		(327,041	)		(295,268	)		11	%		(349,259	)		(324,692	)		8	%
Gross Profit		100,979			75,329			34	%		126,511			102,297			24	%
Equity in Earnings of Unconsolidated Joint Venture		7,796			9,432			(17	)%		7,970			7,796			2	%
Corporate General and Administrative		(17,789	)		(21,254	)		(16	)%		(9,468	)		(17,789	)		(47	)%
Gain on Sale of Businesses		51,973			—			—			—			51,973			(100	)%
Other Non-Operating Income (Loss)		(127	)		200			(164	)%		3,678			(309	)		(1290	)%
Interest Expense, net		(14,041	)		(8,846	)		59	%		(6,972	)		(14,041	)		(50	)%
Earnings Before Income Taxes		128,791			54,861			135	%
Earnings from Continuing Operations Before Income Taxes											121,719			129,927			(6	)%
Income Tax Expense		(32,585	)		(13,557	)		140	%		(26,392	)		(32,836	)		(20	)%
Net Earnings from Continuing Operations										$	95,327		$	97,091			(2	)%
Net Loss from Discontinued Operations											—			(885	)		(100	)%
Net Earnings	$	96,206		$	41,304			133	%	$	95,327		$	96,206			(1	)%
Diluted Earnings per Share	$	2.31		$	0.94			146	%
Diluted Earnings per Share from Continuing Operations										$	2.25		$	2.33			(3	)%

Revenue increased by ~~$57.4~~$48.8 million, or ~~15%~~11%, to ~~$428.0~~$475.8 million for the three months ended June 30, 2020. The Kosmos and ConAgg Acquisitions contributed $57.6 million of Revenue for the three months ended June 30, 2020, while Western and Mathews contributed $7.8 million of Revenue for the three months ended June 30, 2019. Excluding the acquisitions and dispositions, Revenue improved by $7.6 million, or 2%.2021. The increase in Revenue was due to higher gross sales prices and Sales Volume, which positively affected Revenue by approximately ~~$8.0 million. This was partially offset by lower gross sale prices, which negatively affected Revenue by $0.4 million.~~$40.1 million and $8.7 million, respectively.

Cost of Goods Sold increased by ~~$31.7~~$24.6 million, or ~~11%~~8%, to ~~$327.0~~$349.3 million for the three months ended June 30, ~~2020.~~2021. The Kosmos and ConAgg Acquisitions contributed $46.3 million of Cost of Goods Sold for the three months ended June 30, 2020, while Western and Mathews contributed $6.8 million of Cost of Goods Sold for the three months ended June 30, 2019. Excluding the acquisitions and dispositions, Cost of Goods Sold decreased by $7.8 million, or 3%. The decline in Cost of Goods Soldincrease was due to the ~~reduction in~~higher Sales Volume and increased operating costs of ~~approximately $18.9~~$5.8 million ~~partially offset by increased Cost of Goods Sold related to increased Sales Volume of $11.1 million.~~and $18.8 million, respectively. The ~~reduction~~increase in operating costs was primarily related to our Cement and Gypsum Wallboard ~~and Oil and Gas Proppants~~ segments, which are discussed further ~~on pages 31-35.~~in the segment analysis.

Gross Profit increased ~~34%~~24% to ~~$101.0~~$126.5 million during the three months ended June 30, ~~2020. Excluding the acquisitions and dispositions, Gross Profit increased by $15.3 million, or 21%.~~2021. The ~~increase in Gross Profit~~ was primarily due to ~~lower operating expenses~~higher gross sales prices and ~~increased~~ Sales Volume, partially offset by ~~lower gross sales prices.~~increased operating costs. The gross margin increased to ~~24%~~27% from ~~21%~~24%, primarily because of ~~lower operating expenses,~~higher gross sales prices, partially offset by ~~lower gross sales prices.~~an increase in operating costs.

Equity in Earnings of our Unconsolidated Joint Venture ~~decreased $1.6~~increased $0.2 million, or ~~17%~~2%, for the three months ended June 30, ~~2020.~~2021. The ~~decline~~increase was primarily due to ~~lower~~higher net sales prices, ~~and~~which raised earnings by approximately $1.4 million. This was partially offset by lower Sales Volume, which adversely affected earnings by approximately $0.3 million and $0.5 million, respectively, as well as increased operating costs, which decreased operating earnings by approximately $0.8 million. The increase in operating costs was primarily due to maintenance, which increased by approximately $0.7$1.2 million.

Corporate General and Administrative expenses declined by approximately ~~$3.5~~$8.3 million, or ~~16%~~47%, for the three months ended June 30, ~~2020.~~2021. The decrease was primarily ~~because of~~due to lower ~~salary~~professional and ~~incentive compensation costs and promotion and travel costs~~transaction fees incurred in fiscal 2021 of approximately ~~$4.1~~$4.6 million and ~~$0.5~~$2.9 million, respectively. ~~This was partially offset by increased~~The professional ~~costs of $0.7 million incurred~~fees related primarily to our strategic portfolio review in ~~connection with~~ the ~~Kosmos Acquisition~~prior year, and the transaction fees mostly related to the sale of Mathews Readymix and ~~Western. The lower salary~~Western Aggregates, and ~~incentive compensation costs were primarily due to~~ the ~~acceleration~~preparation for the sale of ~~stock compensation costs of $5.3 million upon~~ the ~~retirement of our Chief Executive Officer in the first quarter of fiscal 2020.~~Oil and Gas Proppants business.

On April 17, 2020 we sold Western and Mathews for approximately $93.5 million. See Footnote ~~(D)~~(C) to the Unaudited Consolidated Financial Statements for more information regarding the sale.

Other Non-Operating Income (Loss) consists of a variety of items that are unrelated to segment operations and include non-inventoried ~~aggregates~~Aggregates income, asset sales, and other miscellaneous income and cost items. The increase in Other Non-Operating Income (Loss) was primarily due to the sale of land that resulted in a gain of approximately $1.7 million.

Interest Expense, net ~~increased~~decreased by approximately ~~$5.2~~$7.0 million, or ~~59%~~50%, during the three months ended June 30, ~~2020.~~2021. The ~~increase in Interest Expense, net~~decrease was primarily due to ~~higher~~lower interest on borrowings under our Revolving Credit Facility and Term Loan ~~and amortization of related debt issuances costs~~ of approximately ~~$0.5 million, $4.5~~$4.6 million and ~~$0.8~~$2.3 million, respectively. These increases were partially offset by lower interest on our Unsecured Private Placement Notes of $0.6 million, which were paid in full in fiscal 2020. The Term Loan was entered into in February 2020 to fund the Kosmos Acquisition. The increase in debt issuance costs wasInterest Expense related to ~~the issuance of the Term Loan and the amendment of both~~our Revolving Credit Facility was lower because we had no outstanding borrowings under the Revolving Credit Facility ~~and~~during the first quarter of fiscal 2022, compared with average borrowings of approximately $500.0 million during the first quarter of fiscal 2021. Interest Expense on our Term Loan ~~in April 2020.~~declined due to lower average interest rates.

Earnings Before Income Taxes ~~increased~~decreased to ~~$128.8~~$121.7 million during the three months ended June 30, ~~2020,~~2021, primarily as a result of ~~higher Gross Profit and~~the Gain on Sale of Businesses ~~and lower Corporate General and Administrative Expense.~~in the prior year. This was partially offset by ~~lower~~higher Gross Profit, Equity in Earnings of Unconsolidated Joint Venture, and ~~increased~~Other Non-Operating Income, as well as lower Corporate General and Administrative Expenses and Interest Expense, net.

Income Tax Expense ~~increased 140% to~~of $26.4 million was recorded for the three months ended June 30, 2021, compared with $32.6 million for the three months ended June 30, ~~2020, primarily related to changes in pre-tax income.~~ 2020. The effective tax rate ~~was constant at~~decreased to 22% from 25% ~~year over year.~~in the prior-year period. The ~~increase~~decrease in ~~income~~the effective tax ~~expense~~rate was primarily ~~because of higher pre-tax income for~~due to a discrete penalty related to an uncertain tax position that was recorded during the three months ended June 30, 2020.

NET EARNINGS FROM CONTINUING OPERATIONS AND DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

Net Earnings ~~increased 133%~~from Continuing Operations decreased 2% to ~~$96.2~~$95.3 million for the three months ended June 30, ~~2020.~~2021. Diluted Earnings per Share ~~increased 146%~~from Continuing Operations decreased 3% to ~~$2.31~~$2.25 per share.

Net Loss from Discontinued Operations declined $0.9 million during the three months ended June 30, 2021. The Proppants business was sold in September 2020, and there will be activity related to this business during fiscal 2022.

Net Earnings decreased 1% to $95.3 million for the three months ended June 30, 2021, as discussed above.

THREE MONTHS ENDED JUNE 30, ~~2020~~2021 vs. THREE MONTHS ENDED June 30, ~~2019~~2020 BY SEGMENT

The following presents results within our ~~three~~two business sectors for the three months ended June 30, ~~2020~~2021 and ~~2019.~~2020. Revenue and operating results are organized by sector and discussed by individual business segment within each respective business sector.

	For the Three Months Ended June 30,									For the Three Months Ended June 30,
	2020			2019			Percentage Change			2021			2020			Percentage Change
	(in thousands, except per ton information)									(in thousands, except per ton information)
Gross Revenue, including Intersegment and Joint Venture	$	261,411		$	195,313			34	%	$	270,255		$	261,411			3	%
Less Intersegment Revenue		(6,031	)		(4,253	)		42	%		(7,833	)		(6,031	)		30	%
Less Joint Venture Revenue		(25,300	)		(27,505	)		(8	)%		(22,691	)		(25,300	)		(10	)%
Gross Revenue, as reported	$	230,080		$	163,555			41	%	$	239,731		$	230,080			4	%
Freight and Delivery Costs billed to Customers		(16,969	)		(12,896	)		32	%		(19,042	)		(16,969	)		12	%
Net Revenue	$	213,111		$	150,659			41	%	$	220,689		$	213,111			4	%

Sales Volume (M Tons)		2,085			1,550			35	%		2,036			2,085			(2	)%
Average Net Sales Price, per ton⁽²⁾	$	109.10		$	109.70			(1	)%	$	116.34		$	109.10			7	%
Operating Margin, per ton	$	29.00		$	23.30			24	%	$	30.72		$	29.00			6	%
Operating Earnings	$	60,455		$	36,121			67	%	$	62,547		$	60,455			3	%

^{(1) Total of wholly owned subsidiaries and proportionately consolidated 50% interest of the Joint Venture’s results}^.

Cement Revenue was ~~$261.4~~$270.3 million, a ~~34%~~3% increase, for the three months ended June 30, ~~2020. Excluding $47.6 million of Revenue related to the Kosmos Acquisition, Revenue increased $18.5 million, or 10%. Excluding the Kosmos Acquisition, the~~2021. The increase was primarily due to higher gross sales prices, ~~and Sales Volume,~~ which improved Cement Revenue by approximately ~~$3.8 million and $14.7 million, respectively.~~

Cement Operating Earnings increased by 67% to $60.5 million for the three months ended June 30, 2020. Excluding $10.5 million of Operating Earnings related to the Kosmos Acquisition, Operating Earnings increased $13.9 million, or 39%. The increase was due to higher gross sales prices and Sales Volume, and lower operating costs, which positively affected Operating Earnings by approximately $3.8 million, $1.8 million, and $8.2 million, respectively. The decline in operating costs was primarily because of lower maintenance and energy costs of approximately $8.0 million and $2.2 million, respectively, partially offset by higher purchased raw materials costs of $2.5 million. Due to the uncertainty of the impact of the COVID-19 pandemic, we modified the timing and extent of our annual cement maintenance outages. Approximately $6.0 million of the anticipated maintenance costs have been deferred to the fiscal second and third quarters. The operating margin increased to 23% from 18%, primarily because of lower operating costs and higher gross sales prices.

For the Three Months Ended June 30,

2020

2019

Percentage Change

(in thousands, except net sales prices)

Gross Revenue, including intersegment

$
44,190

$
39,778

11
%
Less intersegment Revenue

(106
)

(377
)

(72
)%
Gross Revenue, as reported

$
44,084

$
39,401

12
%

Sales Volume -

M Cubic Yards of Concrete

348

310

12
%
M Tons of Aggregate

475

799

(41
)%
Average Net Sales Price -

Concrete - Per Cubic Yard

$
113.61

$
103.52

10
%
Aggregates - Per Ton

$
9.77

$
9.66

1
%

Operating Earnings

$
5,418

$
4,434

22
%

Concrete and Aggregates Revenue increased 11% to $44.2 million for the three months ended June 30, 2020. Excluding Revenue related to the ConAgg Acquisition in fiscal 2021, and Western and Mathews in fiscal 2021 and 2020, Revenue increased $0.7 million, or 2%. The primary reason for the increase in Revenue was higher gross sales prices, which increased Revenue by $1.9$12.8 million. This was partially offset by lower Sales Volume, which reduced Revenue by ~~$1.2~~$3.9 million.

Cement Operating Earnings increased ~~22%~~by 3% to ~~approximately $5.4 million. Excluding Operating Earnings related to~~$62.5 million for the ~~ConAgg Acquisition in fiscal 2021, and Western and Mathews in fiscal 2021 and 2020, Operating Earnings increased $1.1 million, or 32%.~~three months ended June 30, 2021. The increase was ~~a result of~~due to higher gross sales prices, which positively affected Operating Earnings by approximately ~~$1.9~~$12.8 million. This was partially offset by lower Sales Volume and increased operating costs, which negatively affected Operating Earnings by $1.6 million and $9.1 million, respectively. The increase in operating costs was primarily due to higher maintenance, energy and transfer freight costs of approximately $11.0 million, $2.1 million, and $1.6 million, respectively. These increases were partially offset by lower purchased cement costs of $2.2 million and a reduction of $3.7 million of costs at Kosmos Cement related to the recording of acquired inventory at fair value in the first quarter of fiscal 2021. The increase in maintenance expense was due to the shifting of certain maintenance outages in fiscal 2021 to the second and third quarters because of the uncertainty of the impact of the COVID-19 pandemic. During the current fiscal year, we performed maintenance outages during the first quarter for all our plants. The Operating Margin remained consistent at 23%.

	For the Three Months Ended June 30,
	2021		2020			Percentage Change
	(in thousands, except net sales prices)
Gross Revenue, including intersegment	$	44,754	$	44,190			1	%
Less Intersegment Revenue		—		(106	)		(100	)%
Gross Revenue, as reported	$	44,754	$	44,084			2	%

Sales Volume -
M Cubic Yards of Concrete		348		348			—
M Tons of Aggregate		361		475			(24	)%
Average Net Sales Price -
Concrete - Per Cubic Yard	$	118.19	$	113.61			4	%
Aggregates - Per Ton	$	9.93	$	9.77			2	%

Operating Earnings	$	5,344	$	5,418			(1	)%

Concrete and Aggregates Revenue increased 1% to $44.8 million for the three months ended June 30, 2021. The was primarily due to higher gross sales prices, primarily for Concrete, which increased Revenue by $1.8 million. This was partially offset by lower Sales Volume in Aggregates, which reduced Revenue by $1.1 million.

Operating Earnings declined 1% to approximately $5.3 million. The decrease was a result of lower Sales Volume and higher operating costs of approximately $0.2 million and ~~$0.6~~$1.7 million, respectively. This was partially offset by higher gross sales prices of approximately $1.8 million. The increase in operating costs ~~increase~~ was primarily due to higher cost of materials and delivery costs of approximately $0.6 ~~million.~~million and $1.0 million, respectively.

	For the Three Months Ended June 30,									For the Three Months Ended June 30,
	2020			2019			Percentage Change			2021			2020			Percentage Change
	(in thousands, except per MMSF information)									(in thousands, except per MSF information)
Gross Revenue, as reported	$	130,150		$	126,724			3	%	$	166,267		$	130,150			28	%
Freight and Delivery Costs billed to Customers		(27,122	)		(27,100	)		—			(31,322	)		(27,122	)		15	%
Net Revenue	$	103,028		$	99,624			3	%	$	134,945		$	103,028			31	%

Sales Volume (MMSF)		704			660			7	%		763			704			8	%
Average Net Sales Price, per MMSF ⁽¹⁾	$	146.28		$	150.96			(3	)%
Freight, per MMSF	$	38.53		$	41.06			(6	)%
Operating Margin, per MMSF	$	58.70		$	57.47			2	%
Average Net Sales Price, per MSF ⁽¹⁾										$	176.79		$	146.28			21	%
Freight, per MSF										$	41.05		$	38.53			7	%
Operating Margin, per MSF										$	82.90		$	58.70			41	%
Operating Earnings	$	41,325		$	37,932			9	%	$	63,253		$	41,325			53	%

Gypsum Wallboard Revenue increased 3%28% to ~~$130.2~~$166.3 million for the three months ended June 30, ~~2020, primarily related to a 7% increase in Sales Volume.~~2021, The increase ~~in Sales Volume positively affected Revenue by approximately $8.5 million, partially offset by lower average~~was due to higher gross sales prices and Sales Volume, which ~~adversely affected Revenue by $5.0 million.~~contributed approximately $25.3 million and $10.8 million, respectively. Our market share ~~increased~~remained relatively consistent during the three months ended June 30, ~~2020, due to the minimal effect of COVID-19 shutdowns in our markets compared to the national average.~~2021.

Operating Earnings increased 9%53% to ~~$41.3~~$63.3 million, primarily ~~due to~~because of higher gross sales prices and Sales ~~Volume and decrease in operating costs.~~Volume. The increase in gross sales prices and Sales Volume ~~and decrease in operating costs~~ positively affected Operating Earnings by approximately ~~$2.6~~$25.3 million and ~~$5.9~~$3.4 million, respectively. This was partially offset by ~~lower gross sales prices,~~higher operating costs, which adversely affected Operating Earnings by approximately ~~$5.0~~$6.8 million. The ~~lower~~higher operating costs were primarily related to freight, energy, and paper costs which reduced ~~operating costs~~Operating Earnings by approximately ~~$1.8~~$1.9 million, ~~$1.1~~$2.1 million, and ~~$1.2~~$1.0 million, respectively. The ~~operating margin~~Operating Margin increased to ~~32%~~38% for the three months ended June 30, ~~2020,~~2021, primarily ~~related to lower operating costs, partially~~because of higher gross sales prices, partly offset by ~~lower gross sales prices.~~higher operating costs. Fixed costs are not a significant portion of the overall cost of wallboard; therefore, changes in utilization have a relatively minor impact on our operating cost per unit.

	For the Three Months Ended June 30,									For the Three Months Ended June 30,
	2020			2019			Percentage Change			2021			2020			Percentage Change
	(in thousands, except per ton information)									(in thousands, except per ton information)
Gross Revenue, including intersegment	$	36,744		$	42,700			(14	)%	$	43,267		$	36,744			18	%
Less intersegment Revenue		(14,069	)		(17,015	)		(17	)%
Less Intersegment Revenue											(18,249	)		(14,069	)		30	%
Gross Revenue, as reported	$	22,675		$	25,685			(12	)%	$	25,018		$	22,675			10	%
Freight and Delivery Costs billed to Customers		(1,333	)		(1,205	)		11	%		(1,448	)		(1,333	)		9	%
Net Revenue	$	21,342		$	24,480			(13	)%	$	23,570		$	21,342			10	%

Sales Volume (M Tons)		77			81			(5	)%		84			77			9	%
Average Net Sales Price, per ton ⁽¹⁾	$	461.87		$	510.32			(9	)%	$	498.49		$	461.87			8	%
Freight, per ton	$	17.31		$	14.88			16	%	$	17.24		$	17.31			—
Operating Margin, per ton	$	37.60		$	122.77			(69	)%	$	39.73		$	37.60			6	%
Operating Earnings	$	2,895		$	9,944			(71	)%	$	3,337		$	2,895			15	%

Recycled Paperboard Revenue ~~declined 14%~~increased 18% to ~~$36.7~~$43.3 million during the three months ended June 30, ~~2020.~~2021. The ~~decrease in Revenue~~increase was due to ~~lower~~higher gross sales prices and Sales Volume, which ~~adversely~~positively affected Revenue by $3.1 million and $3.5 million, ~~and $2.5 million,~~ respectively. ~~Lower~~Higher gross sales prices were ~~due~~related to the pricing provisions in our long-term sales agreements.

Operating Earnings ~~declined 71%~~increased 15% to ~~$2.9~~$3.3 million, primarily because of ~~the decrease in~~higher gross sales prices and Sales Volume, which positively affected Operating Earnings by approximately $3.1 million, and ~~an increase in~~$0.3 million, respectively. These increases were partially offset by higher operating costs, which adversely affected Operating Earnings by ~~approximately $3.5 million, $0.5 million, and $3.0 million, respectively.~~$2.9 million. The increase in operating costs was primarily related to ~~operating inefficiencies in April and May related to start-up of the papermill after the completion of the project to enhance and expand the mill, as well as~~ higher input costs, namely fiber, which lowered Operating Earnings by approximately ~~$2.1 million and $1.5~~$2.7 million. The ~~increase in fiber cost was due primarily to the decline in generation of OCC due to the shelter-in-place orders issued to combat the COVID-19 pandemic. This was partially~~Operating Margin remained consistent at 8% with higher gross sales prices being offset by ~~lower energy costs of approximately $0.5 million. Operating margin decreased to 8% from 23%, primarily because of higher~~increased operating ~~costs and lower gross sales prices.~~costs.

Revenue from our Oil and Gas Proppants segment declined 93% to approximately $1.0 million during the three months ended June 30, 2020. The decline in Revenue was due to lower Sales Volume and gross sales prices, which adversely affected Revenue by approximately $13.5 million and $0.7 million, respectively. During the quarter we significantly curtailed our operating activities and reduced our headcount at our fac sand facilities, as deteriorating market conditions in the oil and gas industry have resulted in sharp declines in pricing and slowdown in drilling and fracturing activity.

Operating Loss for the quarter decreased 64% to approximately $1.3 million. The decrease in Operating Loss was primarily related to the curtailment of operating activities and reduced headcount during the quarter, and lower fixed costs due to the impairment loss recognized during the third quarter of fiscal 2020.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to adopt accounting policies and make significant judgments and estimates to develop amounts reflected and disclosed in the financial statements. In many cases, there are alternative policies or estimation techniques that could be used. We maintain a thorough process to review the application of our accounting policies and to evaluate the appropriateness of the many estimates that are required to prepare our financial statements. However, even under optimal circumstances, estimates routinely require adjustment based on changing circumstances and the receipt of new or better information.

Information regarding our Critical Accounting Policies can be found in our Annual Report. The three critical accounting policies that we believe either require the use of the most judgment, or the selection or application of alternative accounting policies, and are material to our financial statements, are those relating to long-lived assets, goodwill, and business combinations. Management has discussed the development and selection of these Critical Accounting Policies and estimates with the Audit Committee of our Board of Directors and with our independent registered public accounting firm. In addition, Note (A) to the financial statements in our Annual Report contains a summary of our significant accounting policies.

Refer to Footnote (A) in the Notes to Unaudited Consolidated Financial Statements of this Form 10-Q for information regarding recently issued accounting pronouncements that may affect our financial statements.

~~Notwithstanding the anticipated challenges associated with COVID-19, we~~We believe at this time that we have access to sufficient financial resources from our liquidity sources to fund our business and operations, including contractual obligations, capital expenditures, and debt service ~~obligations.~~obligations for at least the next twelve months. We will continue to monitor the potential impact of future COVID-19 outbreaks, or similar disruptions on the economy, and on our operations, ~~and future liquidity needs,~~ as ~~a continued worldwide disruption of~~well as any other economic ~~activity could materially affect our future access~~impacts related to ~~these sources of liquidity.~~changing fiscal policy or economic conditions. Please see the Debt Financing Activities section below for a discussion of our ~~cash position,~~revolving credit facility and the amount of borrowings available to us in the next twelve-month period.

	For the Three Months Ended June 30,						For the Three Months Ended June 30,
	2020			2019			2021			2020
	(dollars in thousands)						(dollars in thousands)
Net Cash Provided by Operating Activities	$	95,313		$	50,698		$	111,121		$	95,313
Investing Activities:
Additions to Property, Plant, and Equipment		(25,991	)		(21,813	)		(11,935	)		(25,991	)
Proceeds from Sale of Property, Plant, and Equipment		93,482			—			—			93,482
Net Cash Provided by (Used in) Investing Activities		67,491			(21,813	)		(11,935	)		67,491
Financing Activities:
Increase (Decrease) in Credit Facility		(75,000	)		185,000			—			(75,000	)
Dividends Paid to Stockholders		(4,160	)		(4,499	)		—			(4,160	)
Purchase and Retirement of Common Stock		—			(198,355	)		(61,929	)		—
Proceeds from Stock Option Exercises		—			396			8,222			—
Payment of Debt Issuance Costs		(1,718	)		—			(1,243	)		(1,718	)
Shares Redeemed to Settle Employee Taxes on Stock Compensation		(1,130	)		(866	)		(1,214	)		(1,130	)
Net Cash Used in Financing Activities		(82,008	)		(18,324	)		(56,164	)		(82,008	)
Net Increase in Cash, Cash Equivalents, and Restricted Cash	$	80,796		$	10,561		$	43,022		$	80,796

Net Cash Provided by Operating Activities increased by ~~$44.6~~$15.8 million to ~~$95.3~~$111.1 million during the three months ended June 30, ~~2020.~~2021. This increase was primarily attributable to higher Net Earnings, adjusted for non-cash charges, of approximately $54.1 million. The improvement was partially offset by lower dividends from our Unconsolidated Joint Venture and ~~a reduction~~cash flows from changes in ~~the change of~~ working capital ~~which increased cash flows by approximately $6.5~~of $2.5 million and ~~$40.5~~$35.8 million, respectively.

Working capital increased by ~~$63.0~~$50.0 million to ~~$571.6~~$542.3 million at June 30, ~~2020, primarily due to the~~2021, because of increased Cash, Accounts Receivable, and ~~Accounts~~Prepaid and ~~Notes Receivable~~Other Assets of approximately ~~$80.8~~$43.0 million, $40.3 million, and ~~$42.8~~$7.9 million, ~~respectively, and decreased Accounts Payable of approximately $4.2 million.~~respectively. This was partially offset by increased Accounts Payable and Accrued Expenses and Income Taxes Payable of approximately ~~$2.2~~$8.9 million and ~~$32.1~~$13.8 million, respectively, and decreased Inventory ~~and Income Tax Receivables~~ of approximately ~~$29.4 million and $4.7 million, respectively.~~$18.6 million. The reduction in Inventory iswas due to ~~increased~~higher Revenue and lower production resulting from scheduled outages at our cement plants. The decrease in Accrued Liabilities and increase in Income Taxes Payable were both due primarily to timing.

The increase in Accounts ~~and Notes~~ Receivable at June 30, ~~2020,~~2021, was primarily related to higher Revenue during the three months ended June 30, ~~2020,~~2021, compared with the three months ended March 31, ~~2020.~~2021. As a percentage of quarterly sales generated for the respective quarter, Accounts Receivable was approximately ~~45%~~40% at June 30, ~~2020~~2021 and ~~48%~~43% at March 31, ~~2020.~~2021. Management measures the change in Accounts Receivable by monitoring the days sales outstanding on a monthly basis to determine if any deterioration has occurred in the collectability of the Accounts Receivable. No significant deterioration in the collectability of our Accounts Receivable was identified at June 30, ~~2020.~~2021. Notes Receivable are monitored on an individual basis, and no significant deterioration in the collectability of our Notes Receivable was identified at June 30, ~~2020. We are closely monitoring the impact of COVID-19 on our customers’ ability to pay their outstanding balances.~~2021.

Our Inventory balance at June 30, ~~2020~~2021 declined by approximately ~~$29.4~~$18.6 million from our balance at March 31, ~~2020.~~2021. Within Inventory, raw materials and materials-in-progress, finished cement, and ~~aggregates~~repair parts and supplies decreased approximately ~~$14.5~~$13.5 million, ~~$9.9~~$2.6 million, and ~~$4.8~~$1.8 million, respectively. ~~The decline in raw materials and materials-in-progress was~~These declines were due primarily to the maintenance outages at all of our cement plants during the quarter. The decline in finished cement was due to both maintenance outages, and increased cement Sales Volume during the quarter. The reduction in aggregates inventory was primarily due to the sale of Western, which had approximately $5.1 million of aggregate inventory at the date of sale. The largest individual balance in our Inventory is our repair parts. These parts are necessary given the size and complexity of our manufacturing plants, as well as the age of certain of our plants, which creates the need to stock a high level of repair parts inventory. We believe all of these repair parts are necessary, and we perform semi-annual analyses to identify obsolete parts. We have less than one year’s sales of all product inventories, and our inventories have a low risk of obsolescence because our products are basic construction materials.

Net Cash ~~Provided by~~Used in Investing Activities during the three months ended June 30, ~~2020~~2021 was approximately ~~$67.5~~$11.9 million, compared with ~~Net Cash Used in Investing Activities of $21.8~~$67.5 million during the same period in ~~2019, an increase~~2020, a decrease of approximately ~~$89.3~~$79.4 million. The ~~increase~~decrease was primarily related to the sale of Western and Mathews in the prior year for approximately $93.5 million, partially offset by ~~an increase~~a reduction of ~~$4.2~~$14.1 million in capital spending. The ~~increase~~reduction in capital spending was primarily related to ~~the $4.6 million increase~~lower capital spending in our Gypsum Wallboard ~~business. This increase was primarily related to the acquisition of additional gypsum reserves.~~and Recycled Paperboard businesses.

Net Cash Used in Financing Activities was approximately ~~$82.0~~$56.2 million during the three months ended June 30, ~~2020,~~2021, compared with ~~$18.3~~$82.0 million in the first quarter of fiscal ~~2020. The $63.7~~2021. During the first quarter of fiscal 2022, we had $61.9 million ~~increase~~of share repurchases and retirements, which was ~~primarily due to~~partially offset by $8.2 million of cash received from the ~~$75.0 million~~exercise of stock options, compared with a reduction in net borrowings ~~compared with additional borrowings~~ of ~~$185.0~~$75.0 million and dividends paid of $4.2 million in fiscal ~~2020, as well as a reduction of $198.4 million in repurchase and retirement of common stock.~~2021.

Our debt-to-capitalization ratio and net-debt-to-capitalization ratio were ~~58.3%~~42.2% and ~~54.8%~~33.7%, respectively, at June 30, ~~2020,~~2021, compared with ~~61.7%~~42.8% and ~~60.0%~~35.6%, respectively, at March 31, ~~2020.~~2021.

Below is a summary of the Company’s debt facilities, ~~at June 30, 2020:~~subsequent to the issuance of the 2.500% Senior Unsecured Notes, the repayment of the Term Loan, and the redemption of the 4.500% Senior Unsecured Notes in July 2021:

See Footnote ~~(N)~~(M) to the Unaudited Consolidated Financial Statements for further details on the Company’s debt facilities, including interest rate, and financial and other covenants and restrictions.

The borrowing capacity orof our New Revolving Credit Facility is $750.0 million until ~~August 2, 2021, after which the aggregate borrowing capacity will be reduced to $665.0 million.~~July 1, 2026. The Revolving Credit Facility also includes a swingline loan sublimit of $25.0 million, and a $40.0 million letter of credit facility. At June 30, ~~2020~~2021 we had ~~$5.0~~$4.3 million of outstanding ~~letter~~letters of credit. We previously provided an irrevocable stand-by letter of credit for any borrowings made by our Joint Venture under its credit facility; however, this credit facility was terminated and the letter of credit cancelled in July 2020. We are contingently liable for performance under ~~$29.9~~$25.6 million in performance bonds relating primarily to our mining operations. We do not have any off-balance sheet debt, or any outstanding debt guarantees.

We ~~had $485.0 million of~~did not have any borrowing outstanding under the Revolving Credit Facility at June 30, ~~2020. We~~2021. However, we borrowed $100.0 million in connection with the repayment of the 4.500% Senior Unsecured Notes on July 19, 2021. After this borrowing, we had ~~$260.0~~$645.7 million of available borrowings under the New Revolving Credit Facility, net of outstanding letters of credit, ~~at June 30, 2020,~~ all of which was available for future ~~borrowings based on our current Leverage Ratio.~~

In addition to the Revolving Credit Facility, we have $199.4 million of cash on hand at June 30, 2020, giving us total liquidity of approximately $459.0 million (cash on hand plus Revolving Credit Facility availability). During July

2020, we received $103.7 million of the $123.7 million Income Tax Receivable that was recorded at June 30, 2020. We anticipate using these funds to reduce the outstanding amounts under the Revolving Credit Agreement.borrowings.

Other than the New Revolving Credit Facility, we have no ~~other~~additional source of committed external financing in place. Should the New Revolving Credit Facility be terminated, no assurance can be given as to our ability to secure a new source of financing. Consequently, if any balance were outstanding on the New Revolving Credit Facility at the time of termination, and an alternative source of financing could not be secured, it would have a material adverse impact on our business. ~~Our Revolving Credit Facility is not rated by the rating agencies.~~

We believe that our cash flow from operations and available borrowings under our New Revolving Credit Facility, as well as cash on hand, should be sufficient to meet our currently anticipated operating needs, capital expenditures, and dividend and debt service requirements for at least the next 12 months. However, our future liquidity and capital requirements may vary depending on a number of factors, including market conditions in the construction industry, our ability to maintain compliance with covenants in our New Revolving Credit Facility, the level of competition, and general and economic factors beyond our control, such as ~~COVID-19.~~COVID-19 or similar pandemics. These and other developments could reduce our cash flow or require that we seek additional sources of funding. We cannot predict what effect these factors will have on our future liquidity. ~~See Market Conditions and Outlook on page 28 for further discussion out the possible effects of COVID-19 on our business.~~

As market conditions warrant, the Company may from time to time seek to purchase or repay its outstanding debt securities or loans, including the ~~Term Loan, 4.500%~~2.500% Senior Unsecured Notes, and borrowings under the New Revolving Credit Facility, in privately negotiated or open market transactions, by tender offer or otherwise. Subject to any applicable limitations contained in the agreements governing our indebtedness, any purchases made by us may be funded by the use of cash on our balance sheet or the incurrence of new debt. The amounts involved in any such purchase transactions, individually or in aggregate, may be material.

We lease one of our cement plants from the city of Sugar Creek, Missouri. The city of Sugar Creek issued industrial revenue bonds to partly finance improvements to the cement plant. The lease payments due to the city of Sugar Creek under the cement plant lease, which was entered into upon the sale of the industrial revenue bonds, are equal in amount to the payments required to be made by the city of Sugar Creek to the holders of the industrial revenue bonds. Because we hold all outstanding industrial revenue bonds, no debt is reflected on our financial statements in connection with our lease of the cement plant. At the expiration of the lease in fiscal~~2021, we have the option to purchase the cement plant for a nominal amount. We also~~ have approximately ~~$57.9~~$38.9 million of lease liabilities at June 30, ~~2020~~2021 that have an average remaining life of approximately ~~9.1~~10.5 years.

Dividends paid were $4.2 million ~~and $4.5 million, respectively,~~ for the three months ended June 30, ~~2020 and 2019.~~2020. There were no dividends paid during the three months ended June 30, 2021. On ~~April 13, 2020,~~May 19, 2021, we announced the ~~suspension~~reinstatement of ~~future~~our quarterly ~~dividends.~~dividend, and declared a $0.25 per share dividend to shareholders, which was paid in July 2021.

During the three months ended June 30, 2021, our share repurchase were as follows:

On April 18, 2019, the Board of Directors authorized us to repurchase an additional 10.0 million shares. This authorization brought the cumulative total of Common Stock our Board has approved for repurchase in the open market to 48.4 million shares since we became publicly held in April 1994. Through June 30, ~~2020,~~2021, we have repurchased approximately ~~41.1~~41.5 million shares.

Share repurchases may be made from time to time in the open market or in privately negotiated transactions. The timing and amount of any share repurchases are determined by management, based on its evaluation of market and economic conditions and other factors. In some cases, repurchases may be made pursuant to plans, programs, or directions established from time to time by the Company’s management, including plans intended to comply with the safe-harbor provided by Rule 10b5-1.

During the three months ended June 30, ~~2020,~~2021, the Company withheld from employees ~~23,901~~8,005 shares of stock upon the vesting of Restricted Shares that were granted under the Plan. We withheld these shares to satisfy the employees’ statutory tax withholding requirements, which is required once the Restricted Shares or Restricted Shares Units are vested.

	For the Three Months Ended June 30,				For the Three Months Ended June 30,
	2020		2019		2021		2020
	(dollars in thousands)				(dollars in thousands)
Land and Quarries	$	4,795	$	206	$	586	$	4,795
Plants		17,216		23,885		9,624		17,216
Buildings, Machinery, and Equipment		3,980		1,397		1,725		3,980
Total Capital Expenditures	$	25,991	$	25,488	$	11,935	$	25,991

Capital expenditures for fiscal 2021 are expected to range from ~~$60.0~~$90.0 million to ~~$70.0~~$100.0 million and be allocated across ~~the~~both Heavy Materials and Light Materials sectors. These estimated capital expenditures ~~are limited to critical~~will include maintenance capital expenditures and improvements, as well as other safety and regulatory projects.

Certain matters discussed in this report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when the Company is discussing its beliefs, estimates or expectations. These statements are not historical facts or guarantees of future performance but instead represent only the Company’s belief at the time the statements were made regarding future events which are subject to certain risks, uncertainties and other factors, many of which are outside the Company’s control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. The principal risks and uncertainties that may affect the Company’s actual performance include the following: the cyclical and seasonal nature of the Company’s businesses; public infrastructure expenditures; adverse weather conditions; the fact that our products are commodities and that prices for our products are subject to material fluctuation due to market conditions and other factors beyond our control; availability of raw materials; changes in the costs of energy, including, without limitation, natural gas, coal and oil, and the nature of our obligations to counterparties under energy supply contracts, such as those related to market conditions (such as fluctuations in spot market prices), governmental orders and other matters; changes in the cost and availability of transportation; unexpected operational difficulties, including unexpected maintenance costs, equipment downtime and interruption of production; material nonpayment or non-performance by any of our key customers; fluctuations in or changes in the nature of activity in the oil and gas industry; inability to timely execute announced capacity expansions; difficulties and delays in the development of new business lines; governmental regulation and changes in governmental and public policy (including, without limitation, climate change and other environmental regulation); possible outcomes of pending or future litigation or arbitration proceedings; changes in economic conditions specific to any one or more of the Company’s markets; adverse impact of severe weather conditions (such as winter storms, tornados and hurricanes) on our facilities, operations and contractual arrangements with third parties; competition; cyber-attacks or data security breaches; announced increases in capacity in the gypsum wallboard and cement industries; changes in the demand for residential housing construction or commercial construction or construction projects ~~as we manage~~undertaken by state or local governments; risks related to pursuit of acquisitions, joint ventures and other transactions or the execution or implementation of such transactions, including the integration of operations acquired by the Company; general economic conditions; and interest rates. For example, increases in interest rates, decreases in demand for construction materials or increases in the cost of energy (including, without limitation, natural gas, coal and oil) could affect the revenue and operating earnings of our ~~cash flow~~operations. In addition, changes in ~~response~~national or regional economic conditions and levels of infrastructure and construction spending could also adversely affect the Company’s result of operations. Finally, any forward-looking statements made by the Company are subject to the risks and impacts associated with natural disasters, pandemics or other unforeseen events, including, without limitation, the COVID-19 ~~pandemic.~~pandemic and responses thereto designed to contain its spread and mitigate its public health effects, as well as their impact on economic conditions, capital and financial markets. These and other factors are described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2021. All forward-looking statements made herein are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed herein will increase with the passage of time. The Company undertakes no duty to update any forward-looking statement to reflect future events or changes in the Company’s expectations.

We are exposed to market risks related to fluctuations in interest rates on our Revolving Credit Facility and Term Loan. We have occasionally utilized derivative instruments, including interest rate swaps, in conjunction with our overall strategy to manage the debt outstanding that is subject to changes in interest rates. We have a $750.0 million Revolving Credit Facility and an outstanding Term Loan at June 30, ~~2020,~~2021, under which borrowings bear interest at a variable rate. A hypothetical 100 basis point increase in interest rates on the ~~$1,150.0~~$665.0 million of borrowings under the ~~Revolving Credit Facility and~~ Term Loan at June 30, ~~2020~~2021 would increase interest expense by approximately ~~$11.5~~$6.7 million on an annual basis. The same hypothetical 100 basis point increase in interest rates on the $100.0 million of borrowings under the New Revolving Credit Facility made subsequent to June 30, 2021 would increase interest expense by approximately $1.0 million on an annual basis. At present, we do not utilize derivative financial instruments.

We are subject to commodity risk with respect to price changes principally in coal, coke, natural gas, and power. We attempt to limit our exposure to changes in commodity prices by entering into contracts or increasing our use of alternative fuels.

We have established a system of disclosure controls and procedures that are designed to ensure that information relating to the Company, which is required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 (Exchange Act), is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), in a timely fashion. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) was performed as of the end of the period covered by this quarterly report. This evaluation was performed under the supervision and with the participation of management, including our CEO and CFO. Based upon that evaluation, our CEO and CFO have concluded that these disclosure controls and procedures were effective.

~~Our operations~~From time to time we have been and ~~properties are subject to extensive and changing federal, state, and local laws; regulations and ordinances governing~~may in the ~~protection~~future become involved in litigation or other legal proceedings in the ordinary course of ~~the environment; as well as laws relating~~our business activities or in connection with transactions or activities undertaken by us, including claims related to worker safety, worker health, environmental matters, land use rights, taxes and ~~workplace safety. We carefully consider~~permits. While the ~~requirements mandated by such laws~~outcome of these proceedings cannot be predicted with certainty, in the opinion of management (based on currently available facts), we do not believe that the ultimate outcome of any currently pending legal proceeding will have a material effect on our consolidated financial condition, results of operations or liquidity.

For additional information regarding claims and ~~regulations and have procedures~~other contingent liabilities to which we may be subject, see Footnote (P) in place at all of our operating units to monitor compliance. Any matters which are identified as potential exposures under these laws and regulations are carefully reviewed by management to determine our potential liability.the Unaudited Consolidated Financial Statements.

For ~~additional~~ information regarding factors that could impact our results of operations, financial condition, and liquidity, see Part 1. Item 1A. Risk Factors in our Form 10-K for the fiscal year ended March 31, ~~2020,~~2021, filed with the Securities and Exchange Commission on May ~~22, 2020.~~21, 2021.

The COVID-19 pandemic has caused severe disruptions in the U.S. and global economies. Although the extent of its impact continues to be highly uncertain, we believe the pandemic and the response to it are likely to negatively affect demand for our products and could have a material adverse effect on our business, operations, financial condition and results of operations.

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19, which began spreading globally in late 2019, a global pandemic and recommended containment and mitigation measures worldwide. On March 13, 2020, the United States declared a national emergency arising from the COVID-19 pandemic, and several states and municipalities declared public health emergencies. Along with these declarations, international, federal, state, and local public health and governmental authorities have taken extraordinary and wide-ranging actions to contain and combat the outbreak and spread of COVID-19 in regions across the United States and the world, including quarantines, “shelter-in-place” orders, and mandates for individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. Despite these actions, COVID-19 has continued to spread in many areas within the United States, and new cases have recently reached record levels in Arizona, California, Florida and Texas.

To date, we have not been materially affected by governmental orders requiring businesses to curtail or cease normal operations. We are continuing to operate as an essential business in virtually all of the markets we serve. There can be no assurance, however, that new restrictions will not be adopted that would limit or restrict the scope of our operations. In addition, the COVID-19 pandemic and responses thereto designed to contain its spread and mitigate its public health effects could have a negative impact on several areas affecting our business, including the following:

We are continuing to monitor the COVID-19 pandemic and its likely effects. The extent to which the COVID-19 pandemic will ultimately impact our business, operations, financial condition and results of operations will depend on numerous factors, which are highly uncertain, rapidly changing and cannot be predicted. These factors include:

The above uncertainties surrounding the COVID-19 pandemic also make it more challenging for our management to estimate the future performance of our business and develop strategies to generate growth or achieve our objectives for fiscal 2021 and future periods.

One key area we continue to closely monitor is the effect of the COVID-19 pandemic on our manufacturing operations. Although we are taking precautions to ensure the safety of our employees, in the event we suffer an outbreak at one of our manufacturing facilities, we may be forced to suspend operations at such facility until the health conditions improve. Any such reduction in our production capacity could render us unable to continue to produce our construction products or satisfy order placed by our customers. With respect to our Oil and Gas Proppants sector, demand for oil has significantly deteriorated as a result of the COVID-19 pandemic and responses thereto. At the same time, increases in production of oil by Saudi Arabia and Russia created a significant surplus in supply and resulted in sharp declines in oil and gas prices. These developments have led to significant reductions in drilling and well-completion activity beginning in March 2020. The reduction in drilling activity has negatively affected demand for our frac sand, and led to a significant reduction or cessation of new orders. In response to these market conditions, we have curtailed our operations and reduced headcount at our frac sand facilities and are focused on preserving the value of our operating assets for future use. We are continuing to explore strategic alternatives for our frac sand business.

The disclosure required under this Item is included in “Management’s Discussion and Analysis of Results of Operations and Financial Condition” of this Quarterly Report on Form 10-Q under the heading “Share Repurchases” and is incorporated herein by reference.

The information concerning mine safety violations or other regulatory matters required by Section 1503 (a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Form 10-Q.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Class		Outstanding Shares
Common Stock, $.01 Par Value		~~41,756,684~~41,882,068

		Page
Item 1.	Consolidated Financial Statements

	Consolidated Statements of Earnings for the Three Months Ended June 30, ~~2020~~2021 and ~~2019~~2020	1

	Consolidated Statements of Comprehensive Earnings for the Three Months Ended June 30, ~~2020~~2021 and ~~2019~~2020	2

	Consolidated Balance Sheets as of June 30, ~~2020,~~2021, and March 31, ~~2020~~2021	3

	Consolidated Statements of Cash Flows for the Three Months Ended June 30, ~~2020~~2021 and ~~2019~~2020	4

	Consolidated Statements of Stockholders' Equity for the Three Months Ended June 30, ~~2020~~2021 and ~~2019~~2020	5

	Notes to Unaudited Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2621

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3934

Item 4.	Controls and Procedures	3934

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	4035

Item 1a.	Risk Factors	4035

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4135

Item 4.	Mine Safety Information	4135

Item 6.	Exhibits	4236

SIGNATURES		4337


	(dollars in thousands)
Inventories	$	28,568
Property, Plant, and Equipment		476,942
Intangible Assets		38,300
Lease Right-of-Use Assets		4,478
Lease Obligations		(4,478	)
Long-term Liabilities		(4,000	)
Total Net Assets		539,810
Goodwill		129,127
Total Estimated Purchase Price	$	668,937

	Weighted-Average Life		Estimated Fair Value
Permits		20		1,500
Customer Relationships		15		35,300
Trade Name and Technology		10		1,500
Total Intangible Assets			$	38,300

	For the Three Months Ended June 30, 2019
	Unaudited
	(dollars in thousands, except per share data)
Revenue	$	399,766
Net Income	$	36,569
Earnings per share – basic	$	0.83
Earnings per share – diluted	$	0.83

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

	For the Three Months Ended June 30, 2020
	(dollars in thousands)
Depreciation and Amortization	$	121
Net Change in Inventory		—
Capital Expenditures		—

	~~2020~~2022
Dividend Yield		—0.8	%
Expected Volatility		~~37.9~~38.4	%
~~Risk Free~~Risk-Free Interest Rate		~~0.5~~1.1	%
Expected Life	6.0 years

	Percentage
2021		102.25	%
2022		101.50	%
2023		100.75	%
2024 and thereafter		100.00	%

	As of July 19,
	2021
	(dollars in thousands)
Revolving Credit Facility	$	100,000
2.500% Senior Unsecured Notes Due 2031		750,000
Total Debt		850,000
Less: Unamortized Discounts and Debt Issuance Costs		(11,904	)
Long-term Debt	$	838,096

	Fair Value
	(dollars in thousands)
4.500% Senior Unsecured Notes Due 2026	$	363,765

Condensed Consolidating Statement of Earnings and Comprehensive Earnings For the Three Months Ended June 30, 2020	Parent			Guarantor Subsidiaries				Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	426,989			$	1,031		$	—		$	428,020
Cost of Goods Sold		—			324,692				2,349			—			327,041
Gross Profit		—			102,297				(1,318	)		—			100,979
Equity in Earnings of Unconsolidated Joint Venture		7,796			7,796				—			(7,796	)		7,796
Equity in Earnings of Subsidiaries		63,684			—				—			(63,684	)		—
Corporate General and Administrative Expenses		(14,411	)		(3,260	)			(118	)		—			(17,789	)
Gain on Sale of Businesses		51,973			—				—			—			51,973
Other Non-Operating Income (Loss)		(375	)		67				181			—			(127	)
Interest Expense, net		(14,028	)		(13	)			—			—			(14,041	)
Earnings before Income Taxes		94,639			106,887				(1,255	)		(71,480	)		128,791
Income Taxes		1,567			(34,502	)			350			—			(32,585	)
Net Earnings	$	96,206		$	72,385			$	(905	)	$	(71,480	)	$	96,206
Net Earnings	$	96,206		$	72,385			$	(905	)	$	(71,480	)	$	96,206
Net Actuarial Change in Benefit Plans, net of tax		25			25				—			(25	)		25
Comprehensive Earnings	$	96,231		$	72,410			$	(905	)	$	(71,505	)	$	96,231

Condensed Consolidating Statement of Earnings and Comprehensive Earnings For the Three Months Ended June 30, 2019	Parent			Guarantor Subsidiaries				Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	370,597			$	—		$	—		$	370,597
Cost of Goods Sold		—			295,268				—			—			295,268
Gross Profit		—			75,329				—			—			75,329
Equity in Earnings of Unconsolidated Joint Venture		9,432			9,432				—			(9,432	)		9,432
Equity in Earnings of Subsidiaries		55,742			—				—			(55,742	)		—
Corporate General and Administrative Expenses		(20,968	)		(286	)	��		—			—			(21,254	)
Other Non-Operating Income		426			(226	)			—			—			200
Interest Expense, net		(8,834	)		(12	)			—			—			(8,846	)
Earnings before Income Taxes		35,798			84,237				—			(65,174	)		54,861
Income Taxes		5,506			(19,063	)			—			—			(13,557	)
Net Earnings	$	41,304		$	65,174			$	—		$	(65,174	)	$	41,304
Net Earnings	$	41,304		$	65,174			$	—		$	(65,174	)	$	41,304
Net Actuarial Change in Benefit Plans, net of tax		33			33				—			(33	)		33
Comprehensive Earnings	$	41,337		$	65,207			$	—		$	(65,207	)	$	41,337

	Maturity
Revolving Credit Facility		~~August 2022~~July 2026
~~4.500%~~2.500% Senior Unsecured Notes		~~August 2026~~
~~Term Loan~~		~~August 2022~~July 2031

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
April 1 through April 30, 2021		—	$	—		—
May 1 through May 31, 2021		110,000		143.77		110,000
June 1 through June 30, 2021		315,500		146.16		315,500
Quarter 1 Totals		425,500	$	145.54		425,500		6,880,149

1.1		Underwriting Agreement, dated as of June 17, 2021, by and among Eagle Materials Inc., J.P. Morgan Securities LLC, BofA Securities, Inc. and Wells Fargo Securities, LLC as representatives of the several underwriters identified on Schedule 1 thereto (filed as Exhibit 1.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission (the Commission) on June 21, 2021 and incorporated herein by reference).
10.1		Eagle Materials Inc. Salaried Incentive Compensation Program for Fiscal Year ~~2021~~2022 (filed as Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission (the Commission) on May ~~20, 2020~~21, 2021 and incorporated herein by reference). ⁽¹⁾
10.2		Eagle Materials Inc. Special Situation Program for Fiscal Year ~~2021~~2022 (filed as Exhibit 10.2 to the Current Report on Form 8-K filed with the Commission on May ~~20, 2020~~21, 2021 and incorporated herein by reference). ⁽¹⁾
10.3*		Form of Management ~~Non-Qualified Option~~Restricted Stock Agreement (Performance). ⁽¹⁾
10.4*		Form of Management ~~Non-Qualified Option~~Restricted Stock Agreement (Time Vest). ⁽¹⁾
10.5*		~~Form of Management Restricted Stock Agreement (Performance).~~Eagle Materials Inc. American Gypsum Company LLC Salaried Incentive Compensation Program for Fiscal Year 2022. ⁽¹⁾
10.6*		~~Form of Management Restricted Stock Agreement (Time Vest).~~ ⁽¹⁾
31.1*		Certification of the Chief Executive Officer of Eagle Materials Inc. pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended.
31.2*		Certification of the Chief Financial Officer of Eagle Materials Inc. pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended.
32.1*		Certification of the Chief Executive Officer of Eagle Materials Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of the Chief Financial Officer of Eagle Materials Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95*		Mine Safety ~~Disclosure~~Disclosure.
101.INS*		Inline XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document.
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File – (formatted as Inline XBRL and Contained in Exhibit 101).

		EAGLE MATERIALS INC.
		Registrant

July ~~30, 2020~~28, 2021		/s/ MICHAEL R. HAACK
		Michael R. Haack President and Chief Executive Officer (principal executive officer)

July ~~30, 2020~~28, 2021		/s/ D. CRAIG KESLER
		D. Craig Kesler Executive Vice President – Finance and Administration and Chief Financial Officer (principal financial officer)