UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q



(Mark One)
þ☑			QUARTERLY REPORT PURSUANT TO SECTION 13OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER 30, 2018~~

MARCH 31, 2023


		OR
		OR
¨☐	TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________ .

Commission File Number 1-38494

Arcosa, Inc.

(Exact name of registrant as specified in its charter)



Delaware			82-5339416
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

~~2525~~500 N. ~~Stemmons Freeway, Dallas, Texas~~Akard Street, Suite 400		~~75207-2401~~
Dallas,	Texas		75201
(Address of principal executive offices)			(Zip Code)

(972) 942-6500

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock ($0.01 par value)	ACA	New York Stock Exchange

Indicate by check mark whether the ~~Registrant~~registrant (1) has filed all reports requiredto be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the ~~Registrant~~registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes ¨þ No þ*☐

* The registrant became subject to the requirements on October 1, 2018.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to besubmitted pursuant to Rule 405 of Regulation S-T(§ 232.405 of this chapter) during the preceding 12 months (or for suchshorter period that the registrant was required to submit suchfiles). Yes þ No ¨☐

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

Large accelerated filer ¨ þAccelerated filer ¨ ☐Non-accelerated filer þ☐

Smaller reporting company ¨ ☐Emerging growth company¨☐

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~~registrant is a shellcompany (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No þ

At ~~November 1, 2018~~April 14, 2023, the number of shares of common stock outstanding was ~~48,765,628.~~48,436,941.

ARCOSA, INC.

FORM 10-Q

TABLE OF CONTENTS

Table of Content s

PART I

Item 1. Financial Statements

Arcosa, Inc. and Subsidiaries

~~Combined~~Consolidated Statements of Operations

(unaudited)


	Three Months Ended March 31,
	2023		2022

	(in millions)
Revenues	$	549.2	$	535.8
Operating costs:
Cost of revenues	440.6		439.7
Selling, general, and administrative expenses	62.5		62.6
Gain on disposition of property, plant, equipment, and other assets	(22.6)		(1.2)
Gain on sale of storage tanks business	(6.4)		—

	474.1		501.1
Total operating profit	75.1		34.7

Interest expense	7.1		7.2
Other, net (income) expense	(1.9)		0.9
Income before income taxes	69.9		26.6

Provision for income taxes	14.2		6.4





Net income	$	55.7	$	20.2

Net income per common share:
Basic	$	1.15	$	0.42
Diluted	$	1.14	$	0.41
Weighted average number of shares outstanding:
Basic	48.3		48.2
Diluted	48.8		48.8
Dividends declared per common share	$	0.05	$	0.05

See accompanying Notes to Consolidated Financial Statements.

Table of Content s

Arcosa, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(unaudited)


	Three Months Ended March 31,
	2023		2022

	(in millions)
Net income	$	55.7	$	20.2
Other comprehensive income (loss):
Derivative financial instruments:
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $0.0 and $0.4	0.1		1.6
Reclassification adjustments for (gains) losses included in net income, net of tax expense (benefit) of $0.1 and ($0.1)	(0.4)		0.5
Currency translation adjustment:
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $0.0 and $0.0	0.1		0.1

	(0.2)		2.2
Comprehensive income	$	55.5	$	22.4

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
(in millions)
Revenues $ 378.6
$ 365.9
$ 1,086.0
$ 1,114.9
Operating costs:
Cost of revenues 308.9
290.4
877.5
885.7
Selling, engineering, and administrative expenses 40.1
41.9
117.1
120.6
Impairment charge 23.2
—
23.2
—
372.2
332.3
1,017.8
1,006.3
Total operating profit 6.4
33.6
68.2
108.6

Other, net (income) expense (0.2 ) (0.2 ) 2.0
—
Income before income taxes 6.6
33.8
66.2
108.6

Provision for income taxes 3.4
13.2
18.2
42.5

Net income 3.2
20.6
48.0
66.1
Other comprehensive income (loss) (0.1 ) (0.8 ) 0.4
(1.4 )
Comprehensive income $ 3.1
$ 19.8
$ 48.4
$ 64.7

See accompanying ~~notes~~Notes to ~~combined financial statements.~~Consolidated Financial Statements.

Table of Content s

Arcosa, Inc. and Subsidiaries

~~Combined~~Consolidated Balance Sheets


	March 31, 2023		December 31, 2022
	(unaudited)
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	149.2	$	160.4

Receivables, net of allowance	393.6		334.2

Inventories:
Raw materials and supplies	125.2		126.3
Work in process	70.8		59.2
Finished goods	132.3		130.3
	328.3		315.8

Other	41.8		46.4
Total current assets	912.9		856.8


Property, plant, and equipment, net	1,209.7		1,199.6
Goodwill	976.5		958.5
Intangibles, net	250.9		256.1
Deferred income taxes	9.6		9.6
Other assets	57.5		60.0
	$	3,417.1	$	3,340.6
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	205.8	$	190.7
Accrued liabilities	115.7		121.8
Advance billings	44.0		40.5


Current portion of long-term debt	14.9		14.7
Total current liabilities	380.4		367.7

Debt	535.0		535.9
Deferred income taxes	183.0		175.6
Other liabilities	75.5		77.0
	1,173.9		1,156.2


Stockholders’ equity:

Common stock – 200.0 shares authorized	0.5		0.5
Capital in excess of par value	1,690.3		1,684.1
Retained earnings	568.8		515.5
Accumulated other comprehensive loss	(15.9)		(15.7)
Treasury stock	(0.5)		—
	2,243.2		2,184.4
	$	3,417.1	$	3,340.6

September 30,
2018 December 31,
2017
(unaudited)
(in millions)
ASSETS
Current assets:
Cash and cash equivalents $ 10.4
$ 6.8
Receivables, net of allowance 174.7
165.3
Inventories:
Raw materials and supplies 126.4
91.3
Work in process 33.8
47.2
Finished goods 74.5
108.3
234.7
246.8
Other 30.0
9.9
Total current assets 449.8
428.8

Property, plant, and equipment, net 570.5
583.1
Goodwill 504.0
494.3
Deferred income taxes 8.8
8.8
Other assets 76.9
87.5
$ 1,610.0
$ 1,602.5
LIABILITIES AND PARENT EQUITY
Current liabilities:
Accounts payable $ 60.9
$ 56.0
Accrued liabilities 109.1
118.0
Current portion of long-term debt 0.1
0.1
Total current liabilities 170.1
174.1

Debt 0.3
0.4
Deferred income taxes 16.8
11.0
Other liabilities 19.7
9.1
206.9
194.6
Parent equity:
Net parent investment 1,422.5
1,427.7
Accumulated other comprehensive loss (19.4 ) (19.8 )
1,403.1
1,407.9
$ 1,610.0
$ 1,602.5

See accompanying ~~notes~~Notes to ~~combined financial statements.~~Consolidated Financial Statements.

Table of Content s

Arcosa, Inc. and Subsidiaries

~~Combined~~Consolidated Statements of Cash Flows

(unaudited)


								Three Months Ended March 31,
	Nine Months Ended September 30,							2023		2022
	2018			2017
	(in millions)							(in millions)
Operating activities:							Operating activities:
Net income	$	48.0		$	66.1		Net income	$	55.7	$	20.2
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	49.7			48.2
Impairment charge	23.2			—

Depreciation, depletion, and amortization							Depreciation, depletion, and amortization	38.8		37.8

Stock-based compensation expense	7.5			6.7			Stock-based compensation expense	5.5		4.4

Provision for deferred income taxes	7.1			12.4			Provision for deferred income taxes	7.4		5.1
Gains on dispositions of property and other assets	(1.2		)	(0.7		)
Gains on disposition of property, plant, equipment, and other assets							Gains on disposition of property, plant, equipment, and other assets	(22.6)		(1.2)
Gain on sale of storage tanks business							Gain on sale of storage tanks business	(6.4)		—

(Increase) decrease in other assets	3.6			(2.5		)	(Increase) decrease in other assets	3.4		(1.2)
Increase (decrease) in other liabilities	3.8			(7.9		)	Increase (decrease) in other liabilities	(2.6)		(3.0)
Other	6.0			—			Other	3.5		0.5
Changes in current assets and liabilities:							Changes in current assets and liabilities:
(Increase) decrease in receivables	10.9			(15.9		)	(Increase) decrease in receivables	(66.4)		(69.3)
(Increase) decrease in inventories	(31.6		)	20.4			(Increase) decrease in inventories	(10.9)		(18.2)
(Increase) decrease in other current assets	(1.4		)	(0.6		)	(Increase) decrease in other current assets	4.6		2.7
Increase (decrease) in accounts payable	6.7			8.7			Increase (decrease) in accounts payable	10.5		44.0
Increase (decrease) in advance billings							Increase (decrease) in advance billings	8.0		1.8
Increase (decrease) in accrued liabilities	(13.8		)	(0.6		)	Increase (decrease) in accrued liabilities	(1.2)		0.9

Net cash provided by operating activities	118.5			134.3			Net cash provided by operating activities	27.3		24.5

Investing activities:							Investing activities:
Proceeds from dispositions of property and other assets	2.6			2.1

Proceeds from disposition of property, plant, equipment, and other assets							Proceeds from disposition of property, plant, equipment, and other assets	23.9		20.6
Proceeds from sale of storage tanks business							Proceeds from sale of storage tanks business	2.0		—
Capital expenditures	(33.0		)	(45.9		)	Capital expenditures	(44.4)		(25.9)
Acquisitions, net of cash acquired	(25.0		)	(47.5		)	Acquisitions, net of cash acquired	(15.6)		—

Net cash required by investing activities	(55.4		)	(91.3		)	Net cash required by investing activities	(34.1)		(5.3)

Financing activities:							Financing activities:

Payments to retire debt	(0.1		)	(0.1		)	Payments to retire debt	(1.9)		(1.0)
Proceeds from issuance of debt	—			0.6
Net transfers from/(to) parent and affiliates	(56.3		)	(47.3		)
Holdback payment from acquisition	(3.1		)	—

Dividends paid to common stockholders							Dividends paid to common stockholders	(2.4)		(2.4)
Purchase of shares to satisfy employee tax on vested stock							Purchase of shares to satisfy employee tax on vested stock	(0.1)		(0.1)

Net cash required by financing activities	(59.5		)	(46.8		)	Net cash required by financing activities	(4.4)		(3.5)
Net increase (decrease) in cash and cash equivalents	3.6			(3.8		)	Net increase (decrease) in cash and cash equivalents	(11.2)		15.7
Cash and cash equivalents at beginning of period	6.8			14.0			Cash and cash equivalents at beginning of period	160.4		72.9
Cash and cash equivalents at end of period	$	10.4		$	10.2		Cash and cash equivalents at end of period	$	149.2	$	88.6

See accompanying ~~notes~~Notes to ~~combined financial statements.~~Consolidated Financial Statements.

Table of Content s

Arcosa, Inc. and Subsidiaries

~~Combined Statement~~Consolidated Statements of ~~Parent~~Stockholders' Equity

(unaudited)


		Common Stock				Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock				Total Stockholders’ Equity
	Shares		$0.01 Par Value									Shares		Amount
	(in millions, except par value)






















Balances at December 31, 2021		48.3		$	0.5	$	1,692.6	$	279.5	$	(19.3)		—		$	—	$	1,953.3
Net income		—		—		—		20.2		—			—		—		20.2
Other comprehensive income		—		—		—		—		2.2			—		—		2.2
Cash dividends on common stock		—		—		—		(2.4)		—			—		—		(2.4)
Restricted shares, net		—		—		4.5		—		—			—		(0.2)		4.3



Balances at March 31, 2022		48.3		$	0.5	$	1,697.1	$	297.3	$	(17.1)		—		$	(0.2)	$	1,977.6


Balances at December 31, 2022		48.4		$	0.5	$	1,684.1	$	515.5	$	(15.7)		—		$	—	$	2,184.4
Net income		—		—		—		55.7		—			—		—		55.7
Other comprehensive income		—		—		—		—		(0.2)			—		—		(0.2)
Cash dividends on common stock		—		—		—		(2.4)		—			—		—		(2.4)
Restricted shares, net		—		—		6.2		—		—			—		(0.5)		5.7



Balances at March 31, 2023		48.4		$	0.5	$	1,690.3	$	568.8	$	(15.9)		—		$	(0.5)	$	2,243.2

Net Parent Investment
Accumulated
Other
Comprehensive
Loss
Total Parent Equity

(in millions)
Balances at December 31, 2017 $ 1,427.7
$ (19.8 ) $ 1,407.9
Cumulative effect of adopting accounting standards (see Note 1) (4.0 ) —
(4.0 )
Net income 48.0
—
48.0
Other comprehensive income (loss) —
0.4
0.4
Net transfers from parent and affiliates (56.7 ) —
(56.7 )
Restricted shares, net 7.5
—
7.5
Balances at September 30, 2018 $ 1,422.5
$ (19.4 ) $ 1,403.1

See accompanying ~~notes~~Notes to ~~combined financial statements.~~Consolidated Financial Statements.

Table of Content s

Arcosa, Inc. and Subsidiaries

Notes to ~~Combined~~Consolidated Financial Statements

~~(Unaudited)~~(unaudited)

Note 1. Overview and Summary of Significant Accounting Policies

Basis of Presentation

On December 12, 2017, Trinity Industries, Inc. (together with its subsidiaries, "Trinity") announced its intention to separate its infrastructure-related businesses, which include its construction products, energy equipment, and transportation products businesses, from the rest of Trinity by means of a spin-off. On September 25, 2018, Trinity’s Board of Directors formally approved the separation of its infrastructure-related businesses from Trinity through a distribution of all of the common stock of Arcosa, ~~Inc. (Arcosa,~~ Inc. and its consolidated subsidiaries ~~"Arcosa"~~(“Arcosa,” the “Company,” “we,” or "Company") held by Trinity to Trinity stockholders. Amendment No. 6 to Arcosa's Registration Statement on Form 10 filed with the Securities and Exchange Commission ("SEC") on September 27, 2018, ("Form 10"“our”), headquartered in Dallas, Texas, is a provider of infrastructure-related products and solutions with leading brands serving construction, engineered structures, and transportation markets in North America. Arcosa is a Delaware corporation and was ~~declared effective by~~incorporated in 2018 as an independent, publicly-traded company, listed on the ~~SEC on October 1, 2018. On November 1, 2018, Trinity stockholders received one share of Arcosa common stock for every three shares of Trinity common stock held as of 5:00 p.m. local~~ New York ~~City time on October 17, 2018, the record date for the distribution.~~ Stock Exchange.

The ~~transaction was structured to be tax-free to both Trinity and Arcosa stockholders for U.S. federal income tax purposes.~~

~~Throughout the period covered by the Combined~~accompanying Consolidated Financial Statements ~~Arcosa operated as part of Trinity. Consequently, standalone financial statements have not been historically prepared for Arcosa. The accompanying Combined Financial Statements~~are unaudited and have been prepared from ~~Trinity's historical accounting~~the books and records and are presented on a standalone basis as if the operations had been conducted independently from Trinity. Accordingly, Trinity's net investment in Arcosa's operations (Parent Equity) is shown in lieu of stockholders' equity in the accompanying Combined Financial Statements, which include the historical operations, assets, and liabilities of the legal entities that are considered to comprise Arcosa. The historical results of operations, financial position, and cash flows of Arcosa, represented in the Combined Financial Statements may neither be indicative of what they would have been had Arcosa actually been a separate standalone entity during such periods nor necessarily indicative of Arcosa's future results of operations, financial position,Inc. and ~~cash flows.~~

its consolidated subsidiaries. All normal and recurring adjustments necessary for a fair presentation of the financial position of the Company ~~as of September 30, 2018,~~ and the results of operations, comprehensive income/loss, and cash flows ~~for the three and nine months ended September 30, 2018 and 2017,~~ have been made in conformity with accounting principles generally accepted ~~accounting principles.~~in the U.S. (“GAAP”). All significant intercompany accounts and transactions have been eliminated. Because of seasonal and other factors, the financial condition and results of operations for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2023 may not be indicative of Arcosa's expected business, financial condition, and results of operations for the year ending December 31, ~~2018.~~ 2023.

These interim financial statements and notes are condensed as permitted by the instructions to Form 10-Q and should be read in conjunction with the audited ~~combined financial statements~~Consolidated Financial Statements of the Company included in its Annual Report on Form 1010-K for the year ended December 31, ~~2017.~~2022.

~~Relationship with Parent and Related Entities~~Stockholders' Equity

~~Arcosa has been managed and operated in~~In December 2022, the ~~normal course~~Company’s Board of ~~business with other business units of Trinity. The accompanying Combined Financial Statements include sales and purchase transactions with Trinity and its subsidiaries in addition~~Directors (the “Board”) authorized a new $50 million share repurchase program effective January 1, 2023 through December 31, 2024 to certain shared costs which have been allocated to Arcosa and reflected as expenses in the combined statements of comprehensive income. Transactions and allocations between Trinity and Arcosa are reflected in equity in the combined balance sheets as Net Parent Investment and in the combined statements of cash flows asreplace a financing activity in Net transfers from/(to) parent and affiliates. All transactions and allocations between Trinity and Arcosa have been deemed paid between the parties, in cash, in the period in which the transaction or allocation was recorded in the Combined Financial Statements. Disbursements and cash receipts are made through centralized accounts payable and cash collection systems, respectively, which are operated by Trinity. As cash is disbursed and received by Trinity, it is accounted for by Arcosa through the Net Parent Investment account. Allocations of current income taxes receivable or payable are deemed to have been remitted to Arcosa or Trinity, respectively, in cash, in the period to which the receivable or payable applies.

~~Corporate Costs/Allocations~~

The Combined Financial Statements include an allocation of costs related to certain corporate functions incurred by Trinity for services that are provided to or on behalf of Arcosa. Corporate costs have been allocated to Arcosa using methods management believes are consistent and reasonable. Such cost allocations to Arcosa consist of (1) shared service charges and (2) corporate overhead costs. Shared service charges consist of monthly charges to each Trinity business unit for certain corporate functions such as information technology, human resources, and legal based on usage rates and activity units. Corporate overhead costs consist of costs not previously allocated to Trinity's business units and were allocated to Arcosa based on an analysis of each cost function and the relative benefits received by Arcosa for eachprogram of the ~~periods. Corporate overhead costs allocated to Arcosa totaled $9.1 million and $10.6 million for~~same amount that expired on December 31, 2022. For the three months ended ~~September 30, 2018 and 2017, respectively, and $24.7 million and $28.0 million for~~March 31, 2023, the ~~nine months ended September 30, 2018 and 2017, respectively. Corporate overhead costs are included in selling, engineering, and administrative expenses in~~Company did not repurchase any shares, leaving the ~~accompanying combined statements of comprehensive income. Also see Note 3 “Segment Information”.~~

~~The Combined Financial Statements of Arcosa may not include all~~full amount of the ~~actual expenses that would have been incurred had we operated~~$50.0 million authorization available as ~~a standalone company during the periods presented and may not reflect our combined results~~ of operations, financial position, and cash flows had we operated as a standalone company during the periods presented. Actual costs that would have been incurred if we had operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. We also may incur additional costs associated with being a standalone, independent, publicly-traded company that were not included in the expense allocations and, therefore, would result in additional costs that are not reflected in our historical results of operations, financial position, and cash flows.

~~Transactions with other Trinity Businesses~~

~~Transactions with other Trinity businesses for purchases or sales of products and services are as follows:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2018 2017 2018 2017
(in millions)
Sales by Arcosa to Trinity businesses $ 43.8
$ 38.7
$ 119.9
$ 102.9
Purchases by Arcosa from Trinity businesses $ 10.7
$ 9.2
$ 35.5
$ 37.5
March 31, 2023.

Revenue Recognition

Revenue is measured based on the allocation of the transaction price in a contract to satisfied performance obligations. The transaction price does not include any amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The following is a description of principal activities from which the Company generates its revenue, separated by reportable segments. Payments for our products and services are generally due within normal commercial terms. For a further discussion regarding the Company’s reportable segments, see Note ~~3 "Segment Information".~~4Segment Information.

Construction Products ~~Group~~

The Construction Products ~~Group~~segment recognizes substantially all revenue when the customer has accepted the product and legal title of the product has passed to the customer.

~~Energy Equipment Group~~Engineered Structures

Within the ~~Energy Equipment Group,~~Engineered Structures segment, revenue is recognized for our wind tower and certain utility structure ~~product lines~~businesses over time as the products are manufactured using an input approach based on the costs incurred relative to the total estimated costs of production. We recognize revenue over time for these products as they are highly customized to the needs of an individual customer resulting in no alternative use to the Company if not purchased by the customer after the contract is ~~executed, and~~executed. In addition, we have the right to bill the customer for our work performed to date plus at least a reasonable profit margin for work performed. As of March 31, 2023, we had a contract asset of $78.0 million related to these contracts, compared to $77.5 million as of December 31, 2022, which is included in receivables, net of allowance, within the Consolidated Balance Sheets. The increase in the contract asset is due to timing of deliveries. For all other products, revenue is recognized when the customer has accepted the product and legal title of the product has passed to the customer.

Transportation Products ~~Group~~

The Transportation Products ~~Group~~segment recognizes revenue when the customer has accepted the product and legal title of the product has passed to the customer.

Table of Content s

Unsatisfied Performance Obligations

The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially satisfied as of ~~September 30, 2018~~March 31, 2023 and the percentage of the outstanding performance obligations as of ~~September 30, 2018~~March 31, 2023 expected to be delivered during the remainder of ~~2018:~~2023:


	Unsatisfied performance obligations as of March 31, 2023
	Total Amount		Percent expected to be delivered in 2023
	(in millions)
Engineered Structures:
Utility, wind, and related structures	$	1,531.4	29	%


Transportation Products:
Inland barges	$	279.0	68	%

Unsatisfied performance obligations at September 30, 2018

Total
Amount
Percent expected to be delivered in 2018
(in millions)
Energy Equipment Group:
Wind towers and utility structures $ 700.3
23 %
Other $ 83.5
37 %

Transportation Products Group:
Inland barges $ 210.4
21 %

~~The remainder of~~Of the remaining unsatisfied performance obligations for utility, wind, ~~towers~~ and ~~utility~~related structures, ~~and~~22% are expected to be delivered during 2024 with the remainder expected to be delivered through 2028. Substantially all of the remaining unsatisfied performance obligations for inland barges are expected to be delivered ~~through 2020. Substantially all other unsatisfied performance obligations beyond 2018 are expected to be delivered~~ during ~~2019.~~2024.

Income Taxes

Income taxes as presented herein attribute current and deferred income taxes of Trinity to Arcosa's Combined Financial Statements in a manner that is systematic, rational, and consistent with the asset and liability method prescribed by the Accounting Standards Codification Topic 740 - Income Taxes ("ASC 740"). Accordingly, Arcosa's income tax provision has been prepared following the separate return method. The separate return method applies ASC 740 to the combined financial statements of each member of the consolidated group as if the group member were a separate taxpayer and a standalone enterprise. As a result, actual tax transactions included in the consolidated financial statements of Trinity may not be included in the separate Combined Financial Statements of Arcosa. Similarly, the tax treatment of certain items reflected in the Combined Financial Statements of Arcosa may not be reflected in the consolidated financial statements and tax returns of Trinity; items such as net operating losses, credit carryforwards, and valuation allowances may exist in the Combined Financial Statements, however, they may or may not exist in Trinity's consolidated financial statements. Allocations of current income taxes receivable or payable are deemed to have been remitted to Arcosa or Trinity, respectively, in cash, in the period to which the receivable or payable applies and are accounted for by Arcosa through the Net Parent Investment account.

The liability method is used to account for income taxes. Deferred income taxes represent the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized.

The Company regularly evaluates the likelihood of realization of tax benefits derived from positions it has taken in various federal and state filings after consideration of all relevant facts, circumstances, and available information. For those tax positions that are deemed more likely than not to be sustained, the Company recognizes the benefit it believes is cumulatively greater than 50% likely to be realized. To the extent the Company were to prevail in matters for which accruals have been established or be required to pay amounts in excess of recorded reserves, the effective tax rate in a given financial statement period could be materially impacted.

Financial Instruments

The Company considers all highly liquid debt instruments to be cash and cash equivalents if purchased with a maturity of three months or less. Financial instruments that potentially subject the Company to a concentration of credit risk are primarily cash investments and receivables. ~~Concentrations~~The Company places its cash investments in bank deposits and highly-rated money market funds, and its investment policy limits the amount of credit exposure to any one commercial issuer. We seek to limit concentrations of credit risk with respect to receivables ~~are limited due to~~with control procedures that monitor the ~~creditworthiness~~credit worthiness of customers, together with the large number of customers in the Company's customer base and their dispersion across different industries and geographic areas. As receivables are generally unsecured, the Company maintains an allowance for doubtful accounts based upon the expected ~~collectibility of all receivables.~~credit losses. Receivable balances determined to be uncollectible are charged against the allowance. To accelerate the conversion to cash, the Company may sell a portion of its trade receivables to third parties. The Company has no recourse to these receivables once they are sold but may have continuing involvement related to servicing and collection activities. The impact of these transactions in the Company's Consolidated Statements of Operations for the three months ended March 31, 2023 was not significant. The carrying values of cash, ~~and cash equivalents,~~ receivables, and accounts payable are considered to be representative of their respective fair values.

~~Other Comprehensive Income (Loss)~~

Table of Content s

~~Other comprehensive income (loss) consists~~Derivative Instruments

The Company may, from time to time, use derivative instruments to mitigate the impact of changes in interest rates, commodity prices, or changes in foreign currency ~~translation adjustments.~~exchange rates. For derivative instruments designated as hedges, the Company formally documents the relationship between the derivative instrument and the hedged item, as well as the risk management objective and strategy for the use of the derivative instrument. This documentation includes linking the derivative to specific assets or liabilities on the balance sheet, commitments, or forecasted transactions. At the time a derivative instrument is entered into, and at least quarterly thereafter, the Company assesses whether the derivative instrument is effective in offsetting the changes in fair value or cash flows of the hedged item. Any change in the fair value of the hedged instrument is recorded in accumulated other comprehensive loss (“AOCL”) as a separate component of stockholders' equity and reclassified into earnings in the period during which the hedged transaction affects earnings. The Company monitors its derivative positions and the credit ratings of its counterparties and does not anticipate losses due to counterparties' non-performance.

Recent Accounting Pronouncements

Recently adopted accounting pronouncements

Effective as of January 1, ~~2018,~~2023, the Company adopted Accounting Standards Update No. ~~2014-09, "Revenue~~2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with ~~Customers," ("~~Customers”, (“ASU ~~2014-09"~~2021-08”), which ~~provides common revenue recognition~~requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The adoption of this guidance ~~for U.S. generally accepted~~did not have a material effect on the Company's Consolidated Financial Statements.

Recently issued accounting principles. Under ASU 2014-09, an entity recognizes revenue when it transfers promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. It also requires additional detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

~~The Company applied ASU 2014-09 to all contracts that were~~pronouncements not ~~complete~~adopted as of January 1, 2018 using the modified retrospective method of adoption, resulting in a reduction to Net Parent Investment of $4.0 million, net of tax, as of January 1, 2018 related to the cumulative effect of applying this standard. Therefore, the comparative information for the three and nine months ended September 30, 2017 has not been adjusted and continues to be reported under ASC Topic 605.

The primary impact of adopting the standard is a change in the timing of revenue recognition for our wind towers and certain utility structures product lines within our Energy Equipment Group. Previously, the Company recognized revenue when the product was delivered. Under ASU 2014-09, revenue is recognized over time as the products are manufactured. Revenue recognition policies in our other business segments remain substantially unchanged.

~~The following tables summarize the impact of adopting ASU 2014-09 on the Company’s Combined Financial Statements as of September 30, 2018 and for the three and nine months then ended:~~

As Reported Adjustments Balance without adjustment for adoption of ASU 2014-09
(in millions)
Combined Statement of Comprehensive Income
For the three months ended September 30, 2018:
Revenues $ 378.6
$ (8.3 ) $ 370.3
Cost of revenues 308.9
(5.7 ) 303.2
Operating profit 6.4
(2.6 ) 3.8
Income before income taxes 6.6
(2.6 ) 4.0
Provision for income taxes 3.4
(0.6 ) 2.8
Net income 3.2
(2.0 ) 1.2

For the nine months ended September 30, 2018:
Revenues $ 1,086.0
$ 6.4
$ 1,092.4
Cost of revenues 877.5
5.4
882.9
Operating profit 68.2
1.0
69.2
Income before income taxes 66.2
1.0
67.2
Provision for income taxes 18.2
0.2
18.4
Net income 48.0
0.8
48.8

Combined Balance Sheet
Receivables, net of allowance $ 174.7
$ (16.1 ) $ 158.6
Inventories:
Raw materials and supplies 126.4
—
126.4
Work in process 33.8
17.1
50.9
Finished goods 74.5
5.4
79.9

Accrued liabilities 109.1
(0.1 ) 109.0
Deferred income taxes 16.8
1.5
18.3
Net parent investment 1,422.5
5.0
1,427.5

Combined Statement of Cash Flows
For the nine months ended September 30, 2018:
Operating activities:
Net income $ 48.0
$ 0.8
$ 48.8
Provision for deferred income taxes 7.1
0.2
7.3
(Increase) decrease in receivables 10.9
8.3
19.2
(Increase) decrease in inventories (31.6 ) 5.4
(26.2 )
Increase (decrease) in accrued liabilities (13.8 ) (14.7 ) (28.5 )
Net cash provided by operating activities 118.5
—
118.5
March 31, 2023

In ~~February 2016,~~March 2020, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. ~~2016-02, "Leases"~~2020-04, “Reference Rate Reform”, ("(“ASU ~~2016-02"~~2020-04”), which ~~amends~~provides optional guidance for contract modifications, hedging accounting, and other transactions associated with the ~~existing accounting standards for lease accounting, including requiring lessees~~transition from reference rates that are expected to ~~recognize most leases on their balance sheets and making targeted changes to lessor accounting.~~be discontinued. ASU ~~2016-02 will become~~2020-04 is effective for ~~public companies during interim and annual reporting periods beginning after~~all entities upon issuance through December ~~15, 2018, with early~~31, 2024 as amended by ASU 2022-06. We continue to evaluate the impact of adoption, ~~permitted. The Company plans~~but do not expect the guidance to ~~adopt ASU 2016-02 effective January 1, 2019. We are finalizing our assessment of the effects of the new standard, including its effects~~have a material impact on our ~~Combined~~Consolidated Financial Statements.

~~In February 2018,~~

Reclassifications

Certain prior year balances have been reclassified in the FASB issued Accounting Standards Update No. 2018-02, “Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”, (“ASU 2018-02”) which gives entitiesConsolidated Financial Statements to conform with the option to reclassify from Accumulated Other Comprehensive Loss ("AOCL") to retained earnings the stranded tax effects resulting from the Tax Cuts and Jobs Act (the"Act") enacted on December 22, 2017. ASU 2018-02 will become effective for public companies during interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company elected to adopt ASU 2018-02 as of January 1, 2018 resulting in a reclassification adjustment from AOCL for the nine months ended September 30, 2018 which was not significant.2023 presentation.

Note 2. Acquisitions and Divestitures

2023 Acquisitions

In ~~March 2018,~~February 2023, we completed the acquisition of certain assets and liabilities of ~~an inland barge~~a Phoenix, Arizona based recycled aggregates business ~~with a~~in our Construction Products segment. The purchase price of the acquisition was not significant.

In March 2023, we completed the stock acquisition of a Houston, Texas based shoring, trench, and ~~net cash paid~~excavation products business in our Construction Products segment. The purchase price of ~~$25.0~~the acquisition was not significant.

2022 Acquisitions

In May 2022, we completed the stock acquisition of Recycled Aggregate Materials Company, Inc. ("RAMCO"), a leading producer of recycled aggregates in the Los Angeles metropolitan area, which is included in our Construction Products segment, for a total purchase price of $77.4 million. The acquisition was funded with $80.0 million of borrowings under our revolving credit facility. The acquisition was recorded as a business combination based on a preliminary ~~valuations~~valuation of the assets acquired ~~assets~~ and liabilities assumed at their acquisition date fair value using unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities ("Level 3" inputs). The final valuation resulted in the recognition of, among others, $54.2 million of permits with an initial weighted average useful life of 20 years, $6.4 million of property, plant, and equipment, and $13.4 million of goodwill in our Construction Products segment. The remaining assets and liabilities were not significant in relation to assets and liabilities at the consolidated or segment level.

Table of Content s

Divestitures

There were no divestitures closed during the three months ended March 31, 2023 and 2022.

In October 2022, the Company completed the sale of its storage tank business for $275 million. Net cash proceeds received at closing were approximately $271.6 million, after transaction closing costs. The storage tanks business, historically reported within the Engineered Structures segment, is a leading manufacturer of steel pressure tanks for the storage and transportation of propane, ammonia, and other gases serving the residential, commercial, energy, and agricultural markets with operations in the U.S. and Mexico. Revenues and operating profit for the storage tanks business were $59.9 million and $10.3 million, respectively, for the three months ended March 31, 2022. An additional gain of $6.4 million was recognized during the three months ended March 31, 2023, primarily due to the resolution of certain contingencies from the sale.

Note 3. Fair Value Accounting

Assets and liabilities measured at fair value on a recurring basis are summarized below:


	Fair Value Measurement as of March 31, 2023
	Level 1		Level 2		Level 3		Total

	(in millions)
Assets:




Interest rate hedge(1)	$	—	$	1.5	$	—	$	1.5
Total assets	$	—	$	1.5	$	—	$	1.5

Liabilities:

Contingent consideration(2)	$	—	$	—	$	2.0	$	2.0
Total liabilities	$	—	$	—	$	2.0	$	2.0

	Fair Value Measurement as of December 31, 2022
	Level 1		Level 2		Level 3		Total

	(in millions)
Assets:



Interest rate hedge(1)	—		1.8		—		1.8
Total assets	$	—	$	1.8	$	—	$	1.8

Liabilities:

Contingent consideration(2)	—		—		2.4		2.4
Total liabilities	$	—	$	—	$	2.4	$	2.4

(1) Included in other assets on the Consolidated Balance Sheets.

(2) Current portion included in accrued liabilities and non-current portion included in other liabilities on the Consolidated Balance Sheets.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for that asset or liability in an orderly transaction between market participants on the measurement date. An entity is required to establish a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair values are listed below:

Level 1 – This level ~~three~~is defined as quoted prices in active markets for identical assets or liabilities. The Company’s cash equivalents are instruments of the U.S. Treasury or highly-rated money market mutual funds.

Level 2 – This level is defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Interest rate hedges are valued at exit prices obtained from each counterparty. See Note 7 Debt.

Table of Content s

Level 3 – This level is defined as unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Contingent consideration relates to estimated future payments owed to the sellers of businesses previously acquired. We estimate the fair value of the contingent consideration using a discounted cash flow model. The ~~valuation resulted~~fair value is sensitive to changes in the ~~recognition~~forecast of ~~$9.7 million of goodwill~~sales and changes in discount rates and is reassessed quarterly based on assumptions used in our ~~Transportation Products Group. Such assets and liabilities were not significant in relation to assets and liabilities at the combined or segment level.~~latest projections.

In May 2017, we completed the acquisition of the net assets of a lightweight aggregates business and, in July 2017, we completed the acquisition of the net assets of a trench shoring products business. Both acquisitions were in our Construction Products Group. Such acquired assets and liabilities were not significant in relation to assets and liabilities at the combined or segment level.

~~Definitive Agreement to Acquire ACG Materials~~

On November 14, 2018, the Company entered into a definitive agreement with an affiliate of H.I.G. Capital, LLC to acquire the ACG Materials business for approximately $315 million. The Company expects to fund the purchase price with a combination of cash on-hand and advances under its $400 million five-year credit facility. The transaction, which has been approved by the Company’s Board of Directors, is subject to customary closing conditions and regulatory provisions under the Hart-Scott-Rodino Act. The transaction is expected to close in the fourth quarter of 2018 or first quarter of 2019.

~~Divestitures~~

During the third quarter of 2018, the Company’s management team committed to plans to divest certain businesses whose revenues are included in the other component of the Energy Equipment Group. On October 31, 2018 and November 5, 2018, the Company completed the divestiture of these businesses, which accounted for approximately $20 million of revenues and had an operating loss for the nine months ended September 30, 2018. The net proceeds from these divestitures were not significant.

Accordingly, as of September 30, 2018, assets of $13.5 million and liabilities of $10.3 million related to these businesses have been allocated to the disposal group and are classified as held for sale in our Combined Balance Sheet. These amounts are included in Other current assets and Accrued liabilities, respectively.

As of September 30, 2018, the assets and liabilities of the divested businesses were recorded at fair value less expected costs to sell in accordance with Accounting Standards Codification Topic 360 - Property, Plant, and Equipment. Our fair value estimates consist of level three inputs and were based on our discussions with the buyers of these businesses. As a result, we recorded a pre-tax impairment charge of $23.2 million during the three months ended September 30, 2018 associated with the write-down of the net assets of these businesses to their estimated fair values.

We have concluded that the divestiture of these businesses does not represent a strategic shift that would result in a material effect on our operations and financial results; therefore, these disposals have not been reflected as discontinued operations in our Combined Financial Statements.

~~There was no other divestiture activity for the three and nine months ended September 30, 2018 and 2017.~~

Note 3.4. Segment Information

The Company reports operating results in three principal business segments:

Construction Products. The Construction Products segment primarily produces and sells natural and recycled aggregates, specialty materials, and construction ~~aggregates and manufactures and sells~~site support equipment, including trench shields and shoring ~~products and services for infrastructure-related projects.~~products.

~~Energy Equipment.~~ Engineered Structures.The ~~Energy Equipment~~Engineered Structures segment primarily manufactures and sells ~~products~~steel structures for ~~energy-related~~infrastructure businesses, including ~~structural wind towers, steel~~ utility structures for electricity transmission and distribution, structural wind towers, traffic structures, and telecommunication structures. These products share similar manufacturing competencies and steel sourcing requirements and can be manufactured across our North American footprint. The segment also manufactures concrete utility structures. Historically, the segment also manufactured storage and distribution ~~containers.~~tanks. In October 2022, the Company completed the divestiture of its storage tanks business. See Note 2 Acquisitions and Divestitures.

Transportation Products. The Transportation Products segment primarily manufactures and sells ~~products~~inland barges, fiberglass barge covers, winches, marine hardware, and steel components for ~~the inland waterway~~railcars and ~~rail~~other transportation ~~industries including barges, barge-related products, axles,~~ and ~~couplers.~~industrial equipment.

~~These segments represent the level at which Arcosa's chief operating decision maker ("CODM") reviews the financial performance of the Company and makes operating decisions.~~ The financial information for these segments is shown in the tables below. We operate principally in North America.


	Three Months Ended March 31,
	Revenues				Operating Profit (Loss)
	2023		2022		2023		2022

	(in millions)
Aggregates and specialty materials	$	211.0	$	187.9
Construction site support	25.1		23.6
Construction Products	236.1		211.5		$	49.5	$	16.7

Utility, wind, and related structures	207.7		190.6
Storage tanks	—		59.9
Engineered Structures	207.7		250.5		29.9		28.3

Inland barges	68.1		47.0
Steel components	37.3		26.8
Transportation Products	105.4		73.8		10.1		2.7



Segment Totals before Eliminations and Corporate	549.2		535.8		89.5		47.7
Corporate	—		—		(14.4)		(13.0)

Consolidated Total	$	549.2	$	535.8	$	75.1	$	34.7

~~Three Months EndedSeptember 30, 2018~~

Revenues Operating Profit (Loss)
External Intersegment Total
(in millions)
Construction aggregates $ 52.9

Other 19.7

Construction Products Group $ 72.6
$ —
72.6
$ 15.3

Wind towers and utility structures 147.0

Other 51.4

Energy Equipment Group 197.5
0.9
198.4
(13.2 )

Inland barges 49.3

Steel components 59.2

Transportation Products Group 108.5
—
108.5
13.5

All Other —
—
—
(0.1 )

Segment Totals before Eliminations and Corporate 378.6
0.9
379.5
15.5
Corporate —
—
—
(9.1 )
Eliminations —
(0.9 ) (0.9 ) —
Combined Total $ 378.6
$ —
$ 378.6
$ 6.4

~~Three Months EndedSeptember 30, 2017~~

Table of Content s

Revenues Operating Profit (Loss)
External Intersegment Total
(in millions)
Construction aggregates $ 53.3

Other 16.1

Construction Products Group $ 69.4
$ —
69.4
$ 13.6

Wind towers and utility structures 167.1

Other 50.2

Energy Equipment Group 216.0
1.3
217.3
20.8

Inland barges 28.1

Steel components 52.4

Transportation Products Group 80.5
—
80.5
9.8

All Other —
—
—
—

Segment Totals before Eliminations and Corporate 365.9
1.3
367.2
44.2
Corporate —
—
—
(10.6 )
Eliminations —
(1.3 ) (1.3 ) —
Combined Total $ 365.9
$ —
$ 365.9
$ 33.6

~~Nine Months EndedSeptember 30, 2018~~

Revenues Operating Profit (Loss)
External Intersegment Total
(in millions)
Construction aggregates $ 166.6

Other 60.1

Construction Products Group $ 226.7
$ —
226.7
$ 45.3

Wind towers and utility structures 427.5

Other 145.6

Energy Equipment Group 570.0
3.1
573.1
12.5

Inland barges 123.0

Steel components 166.3

Transportation Products Group 289.3
—
289.3
35.2

All Other —
—
—
(0.1 )

Segment Totals before Eliminations and Corporate 1,086.0
3.1
1,089.1
92.9
Corporate —
—
—
(24.7 )
Eliminations —
(3.1 ) (3.1 ) —
Combined Total $ 1,086.0
$ —
$ 1,086.0
$ 68.2

~~Nine Months EndedSeptember 30, 2017~~

Revenues Operating Profit (Loss)
External Intersegment Total
(in millions)
Construction aggregates $ 155.1

Other 39.7

Construction Products Group $ 194.8
$ —
194.8
$ 42.5

Wind towers and utility structures 514.4

Other 136.9

Energy Equipment Group 648.0
3.3
651.3
63.2

Inland barges 124.3

Steel components 147.8

Transportation Products Group 272.1
—
272.1
30.9

All Other —
—
—
—

Segment Totals before Eliminations and Corporate 1,114.9
3.3
1,118.2
136.6
Corporate —
—
—
(28.0 )
Eliminations —
(3.3 ) (3.3 ) —
Combined Total $ 1,114.9
$ —
$ 1,114.9
$ 108.6

Note 4.5. Property, Plant, and Equipment

The following table summarizes the components of property, plant, and equipment as of ~~September 30, 2018~~March 31, 2023 and December 31, ~~2017.~~

2022.


								March 31, 2023		December 31, 2022
	September 30, 2018			December 31, 2017
	(in millions)							(in millions)
Land	$	94.8		$	97.7		Land	$	139.1	$	138.7
Mineral reserves							Mineral reserves	507.0		506.3
Buildings and improvements	256.0			265.8			Buildings and improvements	310.6		308.3
Machinery and other	694.8			676.9			Machinery and other	996.3		973.9
Construction in progress	32.6			24.3			Construction in progress	98.1		83.7
	1,078.2			1,064.7				2,051.1		2,010.9
Less accumulated depreciation	(507.7		)	(481.6		)
Less accumulated depreciation and depletion							Less accumulated depreciation and depletion	(841.4)		(811.3)
	$	570.5		$	583.1			$	1,209.7	$	1,199.6

Note 5. 6. Goodwill and Other Intangible Assets

Goodwill

Goodwill by segment is as follows:


	March 31, 2023		December 31, 2022

	(in millions)
Construction Products	$	501.9	$	483.9
Engineered Structures	437.6		437.6
Transportation Products	37.0		37.0
	$	976.5	$	958.5

September 30,
2018 December 31,
2017
(in millions)
Construction Products Group $ 60.3
$ 60.3
Energy Equipment Group 416.9
416.9
Transportation Products Group 26.8
17.1
$ 504.0
$ 494.3

The increase in ~~the Transportation~~Construction Products ~~Group~~ goodwill during the ~~nine~~three months ended ~~September 30, 2018 is~~March 31, 2023 was due to ~~an acquisition.~~acquisitions completed during the quarter and measurement period adjustments from the acquisition of RAMCO. See Note 2 ~~"Acquisitions~~Acquisitions and ~~Divestitures".~~Divestitures.

Intangible Assets

Intangibles, net consisted of the following:


	March 31, 2023		December 31, 2022

	(in millions)
Intangibles with indefinite lives - Trademarks	$	34.1	$	34.1

Intangibles with definite lives:
Customer relationships	136.9		136.9
Permits	141.7		141.7
Other	2.7		2.7
	281.3		281.3
Less accumulated amortization	(64.5)		(59.3)
	216.8		222.0
Intangible assets, net	$	250.9	$	256.1

Table of Content s

Note ~~6. Guarantees~~7. Debt

The following table summarizes the components of debt as of March 31, 2023 and December 31, 2022:


	March 31, 2023		December 31, 2022

	(in millions)

Term loan	$	136.8	$	136.8
Senior notes	400.0		400.0
Finance leases (see Note 8 Leases)	18.1		19.1
	554.9		555.9
Less: unamortized debt issuance costs	(5.0)		(5.3)
Total debt	$	549.9	$	550.6

Revolving Credit Facility and Term Loan

On November 1, 2018, the Company entered into a $400.0 million unsecured revolving credit facility that was scheduled to mature in November 2023. On January 2, 2020, the Company entered into an Amended and Restated Credit Agreement to increase the revolving credit facility to $500.0 million and add a term loan facility of $150.0 million, in each case with a maturity date of January 2, 2025. The entire term loan was advanced on January 2, 2020. As of March 31, 2023, the term loan had a remaining balance of $136.8 million.

As of ~~September 30, 2018, Trinity's $600.0~~March 31, 2023, we had no outstanding loans borrowed under the revolving credit facility, and there were approximately $25.3 million ~~unsecured corporate~~of letters of credit issued, leaving $474.7 million available. Of the outstanding letters of credit as of March 31, 2023, $24.5 million are expected to expire in 2023, with the remainder in 2024. The majority of our letters of credit obligations support the Company’s various insurance programs and generally renew by their terms each year.

The interest rates under the revolving credit facility and term loan are variable based on LIBOR or an alternate base rate plus a margin. A commitment fee accrues on the average daily unused portion of the revolving facility. The margin for borrowing and commitment fee rate are determined based on the Company’s leverage as measured by a consolidated total indebtedness to consolidated EBITDA ratio. The margin for borrowing ranges from 1.25% to 2.00% and was set at LIBOR plus 1.50% as of March 31, 2023. The commitment fee rate ranges from 0.20% to 0.35% and was set at 0.25% at March 31, 2023.

The Company's revolving credit and term loan facilities require the maintenance of certain ratios related to leverage and interest coverage. As of March 31, 2023, we were in compliance with all such financial covenants. Borrowings under the credit agreement are guaranteed by certain wholly-owned subsidiaries of the Company.

The carrying value of borrowings under our revolving credit and term loan facilities approximate fair value because the interest rate adjusts to the market interest rate (Level 3 input). See Note 3 Fair Value Accounting.

As of March 31, 2023, the Company had $0.8 million of unamortized debt issuance costs related to the revolving credit facility, which ~~matures~~are included in ~~2020 (the "Trinity Revolving Credit Facility") as well as its~~other assets on the Consolidated Balance Sheet.

Senior Notes

On April 6, 2021, the Company issued $400.0 million aggregate principal amount of ~~4.55%~~4.375% senior ~~note due 2024~~notes (the ~~"Trinity Senior Notes"~~“Notes”) that mature in April 2029. Interest on the Notes is payable semiannually in April and October. The Notes are ~~fully and unconditionally and jointly and severally guaranteed by certain subsidiaries~~senior unsecured obligations of the ~~Company: Trinity Marine Products, Inc.; Trinity Meyer Utility Structures LLC;~~Company and ~~Trinity Structural Towers, Inc. (the "Arcosa Guarantors").~~are guaranteed on a senior unsecured basis by each of the Company’s domestic subsidiaries that is a guarantor under our revolving credit and term loan facilities. The ~~Trinity Revolving Credit Facility~~terms of the indenture governing the Notes, among other things, limit the ability of the Company and each of its subsidiaries to create liens on assets, enter into sale and leaseback transactions, and consolidate, merge or transfer all or substantially all of its assets and the ~~Trinity Senior~~assets of its subsidiaries. The terms of the indenture also limit the ability of the Company’s non-guarantor subsidiaries to incur certain types of debt.

At any time prior to April 15, 2024, the Company may redeem all or a portion of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus an applicable make-whole premium and accrued and unpaid interest to the redemption date. On and after April 15, 2024, the Company may redeem all or a portion of the Notes at redemption prices set forth in the indenture, plus accrued and unpaid interest to the redemption date. If a Change of Control Triggering Event (as defined in the indenture) occurs, the Company must offer to repurchase the Notes at a price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to the date of repurchase.

Table of Content s

The estimated fair value of the Notes as of March 31, 2023 was $362.3 million based on a quoted market price in a market with little activity (Level 2 input).

In connection with the issuance of the Notes, the Company paid $6.6 million of debt issuance costs.

The remaining principal payments under existing debt agreements as of March 31, 2023 are ~~also guaranteed by certain subsidiaries~~as follows:


	2023	2024	2025	2026	2027	Thereafter

	(in millions)

Term loan	8.4	8.4	120.0	—	—	—
Senior notes	—	—	—	—	—	400.0

Interest rate hedges

In December 2018, the Company entered into an interest rate swap instrument, effective as of ~~Trinity. There have been no~~January 2, 2019 and expiring in October 2023, to reduce the effect of changes in the variable interest rates associated with borrowings under the ~~Trinity Revolving~~Amended and Restated Credit ~~Facility. None~~Agreement. The instrument carried an initial notional amount of $100 million, thereby hedging the first $100 million of borrowings. The instrument effectively fixes the LIBOR component of borrowings at a monthly rate of 2.71%. As of March 31, 2023, the Company has recorded an asset of $1.5 million for the fair value of the ~~Arcosa Guarantors~~instrument, all of which is recorded in accumulated other comprehensive loss. See Note 3 Fair Value Accounting.

Note 8. Leases

We have ~~been required~~various leases primarily for office space and certain equipment. At inception, we determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. For leases that contain options to ~~make any~~purchase, terminate, or extend, such options are included in the lease term when it is reasonably certain that the option will be exercised. Some of our lease arrangements contain lease components and non-lease components which are accounted for as a single lease component as we have elected the practical expedient to group lease and non-lease components for all leases.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at commencement date in determining the present value of lease payments.

Future minimum lease payments ~~under the guarantees. The guarantees by the Arcosa Guarantors~~for operating and finance lease obligations as of March 31, 2023 consisted of the ~~Trinity Senior Notes were automatically terminated as~~following:


	Operating Leases		Finance Leases
	(in millions)
2023 (remaining)	$	6.0	$	5.4
2024	7.5		7.1
2025	6.8		5.1
2026	5.4		1.3
2027	3.3		0.2
Thereafter	10.8		—
Total undiscounted future minimum lease obligations	39.8		19.1
Less imputed interest	(3.2)		(1.0)
Present value of net minimum lease obligations	$	36.6	$	18.1

Table of ~~November 1, 2018,~~Content s

The following table summarizes our operating and finance leases and their classification within the effective date of the spin-off transaction, in connection with the removal of the Arcosa Guarantors as guarantors under the Trinity Revolving Credit Facility in accordance with its terms. See Note 12 "Subsequent Events" for information regarding Arcosa's revolving credit facility.Consolidated Balance Sheet.


	March 31, 2023		December 31, 2022

	(in millions)
Assets
Operating - Other assets	$	34.1	$	33.9
Finance - Property, plant, and equipment, net	20.3		22.4
Total lease assets	54.4		56.3

Liabilities
Current
Operating - Accrued liabilities	7.0		6.7
Finance - Current portion of long-term debt	6.4		6.3
Non-current
Operating - Other liabilities	29.6		29.9
Finance - Debt	11.7		12.8
Total lease liabilities	$	54.7	$	55.7

Note 7.9. Other, Net

Other, net (income) expense consists of the following items:


	Three Months Ended March 31,
	2023		2022

	(in millions)
Interest income	$	(1.2)	$	(0.1)
Foreign currency exchange transactions	(0.5)		1.0
Other	(0.2)		—
Other, net (income) expense	$	(1.9)	$	0.9

Three Months Ended
September 30, Nine Months Ended
September 30,
2018 2017 2018 2017
(in millions)
Foreign currency exchange transactions $ —
$ (0.5 ) $ 2.2
$ 0.3
Other (0.2 ) 0.3
(0.2 ) (0.3 )
Other, net (income) expense $ (0.2 ) $ (0.2 ) $ 2.0
$ —

Note 8.10. Income Taxes

~~The provision for~~For interim income ~~taxes results in~~tax reporting, we estimate our annual effective ~~tax rates that differ from the statutory rates. The following is a reconciliation between the statutory U.S. federal income~~ tax rate and apply it to our year to date ordinary income (loss). Tax jurisdictions with a projected or year to date loss for which a tax benefit cannot be realized are excluded. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the ~~Company’s effective~~interim period in which they occur. We have open tax years from 2015 to 2022 with various significant tax jurisdictions.

On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted to reduce inflation and promote clean energy in the United States. Among other things, the IRA introduces a 15% alternative minimum tax for corporations with a three-year taxable year average annual adjusted financial statement income in excess of $1 billion and imposes a 1% excise tax ~~rate~~ on ~~income before income taxes:~~the fair market value of stock repurchases made by covered corporations after December 31, 2022. The Company has evaluated these new provisions and has concluded there is no impact for the three months ended March 31, 2023.

The IRA also provides for certain manufacturing, production, and investment tax credit incentives, including new Advanced Manufacturing Production ("AMP") tax credits for companies that domestically manufacture and sell clean energy equipment, including wind towers. For the three months ended March 31, 2023, the Company has recognized $4.3 million in AMP tax credits for wind towers produced and sold in 2023 which are included as a reduction to cost of sales on the Consolidated Statement of Operations due to the refundable nature of the credits. The credits are included in Receivables, net of allowance, on the Consolidated Balance Sheet.

Table of Content s

Three Months Ended
September 30, Nine Months Ended
September 30,
2018 2017 2018 2017
Statutory rate 21.0 % 35.0 % 21.0 % 35.0 %
State taxes 2.3
1.9
2.3
1.9
Foreign adjustments 1.5
3.1
1.5
3.1
Domestic production activities deduction —
(2.2 ) —
(2.2 )
Impairment and other foreign losses 53.2
1.5
6.6
1.2
Changes in valuation allowance and reserves (6.9 ) —
0.1
—
Effect of Federal Tax Reform (10.2 ) —
(1.0 ) —
Prior year true-ups (9.5 ) 0.7
(1.5 ) 0.4
Equity compensation —
—
(1.1 ) 0.5
Other, net 0.1
(0.9 ) (0.4 ) (0.8 )
Effective rate 51.5 % 39.1 % 27.5 % 39.1 %
Certain provisions of the IRA, including the AMP tax credits for wind towers, remain subject to the issuance of additional guidance and clarification. We have considered the applicable current laws and regulations in our tax provision for the three months ended March 31, 2023, and continue to evaluate the impact of these tax law changes on future periods.

Our effective tax ~~rate reflects the Company's estimate~~rates of 20.3% and 24.1% for its state income tax expense, excess tax benefits or deficiencies related to equity compensation, and the impact of nondeductible impairment charges. A portion of the $23.2 million pre-tax impairment charge recorded in the three ~~and nine~~ months ended September 30, 2018 was attributable to certain of our foreign operations for which taxes are not provided. This impairment charge increased the losses in those jurisdictions with no corresponding tax benefit. The related effect on our effective tax rate has been reflected in the rate reconciliation table above. See Note 2 "AcquisitionsMarch 31, 2023 and ~~Divestitures" for further information regarding the impairment charge.~~

~~The Act was enacted on December 22, 2017. The Act reduces~~2022, respectively, differed from the U.S. federal ~~corporate income tax~~statutory rate ~~from 35.0% to~~of 21.0%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign-sourced earnings. In December 2017, we recorded a tax benefit after the initial assessment of the tax effects of the Act, and we will continue refining this amount throughout 2018. We are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of our deferred tax balance or give rise to new deferred tax amounts resulting in a final adjustment in the fourth quarter of 2018. The impact of the Act may differ from our estimate due to changes in the regulations, rulings, guidance, and interpretations issued by the Internal Revenue Service ("IRS") and the FASB as well as interpretations and assumptions made by the Company. The calculation of our estimated annual effectiveAMP tax ~~rate includes the estimated impact of provisions of the Act, such as interest limitations,~~credits, state income taxes, statutory depletion deductions, compensation-related items, and foreign ~~limitations or inclusions. These estimates could change as additional information becomes available on these provisions of the Act.~~taxes.

~~Taxing authority examinations~~

~~The 2014-2016 tax years have been reviewed by the IRS with no significant adjustments. The 2014-2017 tax years remain open.~~

We have various subsidiaries in Mexico that file separate tax returns and are subject to examination by taxing authorities at different times. The entities are generally open for their 2010 tax years and forward.

Note 9.11. Employee Retirement Plans

Total ~~Trinity~~ employee retirement plan expense, which includes related administrative expenses, allocated to Arcosa was $2.5 million and $7.6 million for the three and nine months ended September 30, 2018 and 2017, respectively. These costs were funded through intercompany transactions with Trinity which are reflected within the Net Parent Investment balance on the accompanying Combined Balance Sheet.is as follows:


	Three Months Ended March 31,
	2023		2022
	(in millions)
Defined contribution plans	$	3.6	$	3.2
Multiemployer plan	0.4		0.4
	$	4.0	$	3.6

The Company ~~participates in~~contributes to a multiemployer defined benefit plan under the terms of a collective-bargaining agreement that covers certain union-represented ~~employees.~~employees at one of the facilities of Meyer Utility Structures, a subsidiary of Arcosa. The Company contributed ~~$0.5 million and $1.6~~$0.4 million to the multiemployer plan for the three ~~and nine~~ months ended ~~September 30, 2018, respectively. The Company contributed $0.5 million~~March 31, 2023 and ~~$1.4 million to the multiemployer plan for the three and nine months ended September 30, 2017, respectively.~~2022. Total contributions to the multiemployer plan for ~~2018~~2023 are expected to be approximately ~~$2.3~~$1.5 million.

Note 12. Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss for the three months ended March 31, 2023 and 2022 are as follows:


	Currency translation adjustments		Unrealized loss on derivative financial instruments		Accumulated other comprehensive loss

	(in millions)
Balances at December 31, 2021	$	(16.3)	$	(3.0)	$	(19.3)
Other comprehensive income (loss), net of tax, before reclassifications	0.1		1.6		1.7
Amounts reclassified from accumulated other comprehensive loss, net of tax expense (benefit) of $0.0, ($0.1), and ($0.1)	—		0.5		0.5
Other comprehensive income (loss)	0.1		2.1		2.2
Balances at March 31, 2022	$	(16.2)	$	(0.9)	$	(17.1)

Balances at December 31, 2022	$	(17.0)	$	1.3	$	(15.7)
Other comprehensive income (loss), net of tax, before reclassifications	0.1		0.1		0.2
Amounts reclassified from accumulated other comprehensive loss, net of tax expense (benefit) of $0.0, $0.1, and $0.1	—		(0.4)		(0.4)
Other comprehensive income (loss)	0.1		(0.3)		(0.2)
Balances at March 31, 2023	$	(16.9)	$	1.0	$	(15.9)

Table of Content s

Note ~~10.~~13. Stock-Based Compensation

Stock-based compensation totaled approximately ~~$2.7~~$5.5 million and ~~$7.5~~$4.4 million for the three ~~and nine~~ months ended ~~September 30, 2018,~~March 31, 2023 and 2022, respectively. ~~Stock-based compensation totaled approximately $2.3~~

Note 14. Earnings Per Common Share

Basic earnings per common share is computed by dividing net income remaining after allocation to participating unvested restricted shares, which includes unvested restricted shares of Arcosa stock held by employees of our former parent, Trinity Industries, Inc., by the weighted average number of basic common shares outstanding for the period. Except when the effect would be antidilutive, the calculation of diluted earnings per common share includes the weighted average net impact of nonparticipating unvested restricted shares. Total weighted average restricted shares were 1.3 million and ~~$6.7~~1.6 million shares for the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2023 and 2022, respectively.

The computation of basic and diluted earnings per share follows.


	Three Months Ended March 31, 2023					Three Months Ended March 31, 2022
	Income (Loss)		Average Shares	EPS		Income (Loss)		Average Shares	EPS

	(in millions, except per share amounts)
Net income	$	55.7				$	20.2
Unvested restricted share participation	(0.2)					(0.1)
Net income per common share – basic	55.5		48.3	$	1.15	20.1		48.2	$	0.42
Effect of dilutive securities:
Nonparticipating unvested restricted shares	—		0.5			—		0.6
Net income per common share – diluted	$	55.5	48.8	$	1.14	$	20.1	48.8	$	0.41

Note ~~11.~~15. Contingencies

The Company is involved in claims and lawsuits incidental to our business arising from various matters including commercial disputes, alleged product defect and/or warranty claims, intellectual property matters, personal injury claims, environmental issues, ~~workplace laws,~~employment and/or workplace-related matters, and various governmental regulations. ~~The Company evaluates its exposure to such claims and suits periodically and establishes accruals for these contingencies when a range of loss can be reasonably estimated. The~~At March 31, 2023, the range of reasonably possible losses for such matters, taking into consideration our rights in indemnity and recourse to third parties is ~~$1.3~~$1.0 million to ~~$11.5~~$2.4 million.

The Company evaluates its exposure to such claims and suits periodically and establishes accruals for these contingencies when probable losses can be reasonably estimated. At ~~September 30, 2018,~~March 31, 2023, total accruals of ~~$5.2~~$3.3 million ~~including environmental and workplace matters described below,~~ are included in accrued liabilities in the accompanying ~~Combined~~Consolidated Balance Sheet. The Company believes any additional liability from such claims and suits would not be material to its financial position or results of operations.

Arcosa is subject to remedial orders and federal, state, local, and foreign laws and regulations relating to the ~~environment and the workplace.~~environment. The Company has reserved ~~$1.1~~$0.7 million as of ~~September 30, 2018,~~March 31, 2023, included in our total accruals of ~~$5.2~~$3.3 million discussed above, to cover our probable and estimable liabilities with respect to the investigations, assessments, and remedial responses to such matters, taking into account currently available information and our contractual rights to indemnification and recourse to third parties. ~~However, estimates~~

Estimates of liability arising from future proceedings, assessments, or remediation are inherently imprecise. Accordingly, there can be no assurance that we will not become involved in future litigation or other proceedings, ~~involving~~including those related to the environment ~~and the workplace~~ or, if we are found to be responsible or liable in any such litigation or proceeding, that such costs would not be material to the Company. ~~We believe that we are currently in substantial compliance with environmental and workplace laws and regulations.~~

~~Note 12. Subsequent Events~~

~~Separation from Trinity~~

~~On November 1, 2018, Arcosa became an independent publicly-traded company through the pro rata distribution by Trinity~~Table of all of the common stock of Arcosa to Trinity stockholders. Each Trinity stockholder received one share of Arcosa common stock for every three shares of Trinity common stock held as of 5:00 p.m. local New York City time on October 17, 2018, the record date for the distribution. Approximately 48.8 million shares of Arcosa common stock were distributed on November 1, 2018 to Trinity stockholders. Arcosa's common stock began "regular way" trading on the New York Stock Exchange ("NYSE") under the ticker symbol "ACA" on November 1, 2018.Content s

In connection with the separation, Trinity and Arcosa entered into various agreements that will govern the relationship between the parties going forward, including a separation and distribution agreement, transition services agreement, tax matters agreement, employee matters agreement, and intellectual property matters agreement. These agreements will provide for the allocation between Arcosa and Trinity of Trinity's and Arcosa's assets, employees, liabilities, and obligations (including employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the distribution date. For additional discussion of these agreements, see "Certain Relationships and Related Transactions" within our registration statement on Form 10.

~~Pursuant to the separation and distribution agreement, on October 31, 2018, Trinity contributed $200 million cash to Arcosa in connection with the separation.~~

~~Revolving Credit Facility~~

On November 1, 2018, the Company entered into a $400 million unsecured revolving credit facility that matures on November 1, 2023. The interest rates under the facility are variable based on LIBOR or an alternate base rate plus a margin that is determined based on Arcosa’s leverage as measured by a consolidated total indebtedness to consolidated EBITDA ratio, and initially are set at LIBOR plus 1.25%. A commitment fee will accrue on the average daily unused portion of the revolving facility at the rate of 0.20% to 0.35%, initially set at 0.20%. The revolving credit facility requires the maintenance of certain ratios related to leverage and interest coverage. Borrowings under the credit facility are guaranteed by certain 100%-owned subsidiaries of the Company. As of November 1, 2018, there were no outstanding loans borrowed under the facility and there were approximately $19.9 million in Letters of Credit issued.

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

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide ~~management's~~a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. Our MD&A is presented in the following sections:

•Company Overview

•Potential Impact of COVID-19 on our Business

•Market Outlook

•Executive ~~Summary~~Overview

•Results of Operations

•Liquidity and Capital Resources

•Recent Accounting Pronouncements

•Forward-Looking Statements

Our MD&A should be read in conjunction with the ~~Combined~~Consolidated Financial Statements of Arcosa, Inc. and its consolidated subsidiaries ("(“Arcosa,~~" "Company," "we," and "our"~~” “Company,” “we,” or “our”) and related Notes in Part I, Item 1 of this Quarterly Report on Form 10-Q and the ~~Audited Annual~~Consolidated and Combined Financial Statements and related Notes in Item 8, “Financial Statements and Supplementary Data”, of our Annual Report on Form 10-K for the year ended December 31, ~~2017 in Amendment No. 6 to the Company's Registration Statement~~2022 (“2022 Annual Report on Form ~~10 filed with the Securities and Exchange Commission ("SEC") on September 27, 2018 (“Form 10”~~10-K”).

~~Executive Summary~~ Company Overview

~~Spin-off Transaction~~

~~On December 12, 2017, Trinity Industries, Inc. (together~~Arcosa, headquartered in Dallas, Texas, is a provider of infrastructure-related products and solutions with ~~its subsidiaries, "Trinity") announced its intention to separate its infrastructure-related businesses, which includes its~~leading brands serving construction, ~~products, energy equipment,~~engineered structures, and transportation ~~products businesses, from the rest of Trinity by means of~~markets in North America. Arcosa is a ~~spin-off. On September 25,~~Delaware corporation and was incorporated in 2018 Trinity’s Board of Directors formally approved the separation of its infrastructure-related businesses from Trinity through a distribution of all of the common stock of Arcosa held by Trinity to Trinity stockholders. Arcosa's Form 10 was declared effective by the SEC on October 1, 2018. On November 1, 2018, Trinity stockholders received one share of Arcosa, Inc. common stock for every three shares of Trinity common stock held as of 5:00 p.m. local New York City time on October 17, 2018, the record date for the distribution. The transaction was structured to be tax-free to both Trinity and Arcosa stockholders for U.S. federal income tax purposes.

Arcosa's historical Combined Financial Statements have been prepared on a standalone basis and are derived from Trinity's consolidated financial statements and accounting records. Therefore, the Combined Financial Statements reflect, in conformity with accounting principles generally accepted in the United States, Arcosa's financial position, results of operations, comprehensive income/loss, and cash flows as the business was historically operated as part of Trinity prior to the distribution. They may not be indicative of Arcosa's future performance and do not necessarily reflect what Arcosa's combined results of operations, financial condition, and cash flows would have been had Arcosa operated as an independent, publicly-traded company, ~~during~~listed on the ~~periods presented, particularly because~~New York Stock Exchange.

Potential Impact of COVID-19 on our Business

Our highest priority is the health and safety of our employees and communities. We are committed to safety across our operations. Our businesses support critical infrastructure sectors and our plants have continued to operate throughout the COVID-19 pandemic. If one or more of Arcosa’s facilities become subject to governmental ordered closure, voluntary temporary closure, closure from a COVID-19 outbreak within the facility, or other COVID-19 related reason the business, liquidity and financial condition, and results of operations for Arcosa ~~expects~~could be adversely affected. The extent to which the COVID-19 pandemic impacts our business, liquidity and financial condition, and results of operations will depend on numerous evolving factors that ~~changes~~we may not be able to accurately predict, including the impact of new COVID-19 variants and the response to any potential reoccurrence. We strive to continuously improve our procedures, processes, and management systems regarding employee health and safety, and we do not anticipate that any enhanced health and safety protocols will ~~occur in Arcosa's operating structure and its capitalization as~~have a ~~result~~material impact on the productivity of our plants.

The preparation of the ~~spin-off from Trinity.~~

~~Arcosa’s Combined~~Company's Consolidated Financial Statements ~~include its direct expenses for cost~~requires management to make estimates and assumptions that affect the reported amounts of ~~goods sold, sales~~assets and ~~marketing,~~liabilities and ~~distribution~~disclosure of contingent assets and ~~administration~~liabilities at the date of the financial statements as well as ~~allocations~~the reported amounts of ~~certain selling, engineering,~~revenues and ~~administrative~~ expenses ~~provided by Trinity~~during the reporting period. At this time, we have not observed any material impairments of our assets or a significant change in the fair value of assets due to ~~Arcosa and allocations~~the COVID-19 pandemic. However, due to the factors discussed above, we are unable to determine or predict the overall impact the COVID-19 pandemic may have on our business, results of ~~related assets, liabilities, and Parent’s investment, as applicable. The allocations~~operations, liquidity, or capital resources.

Market Outlook

•Within our Construction Products segment, the demand environment remains healthy overall when seasonal weather conditions have been ~~determined~~normal, supported by increased infrastructure spending and private non-residential activity. The outlook for single-family residential housing continues to be impacted by higher interest rates and home affordability, which has negatively impacted volumes. We have been successful in managing inflationary cost pressures through proactive price increases and are monitoring potential impacts on ~~a reasonable basis; however,~~overall demand as leading economic indicators indicate an increased probability of an economic slowdown in 2023.

Table of Content s

•Within our Engineered Structures segment, our backlog as of March 31, 2023 provides good production visibility for the ~~amounts are not necessarily representative~~remainder of 2023. Our customers remain committed to taking delivery of these orders. In utility structures, order and inquiry activity continues to be healthy, as customers remain focused on grid hardening and reliability initiatives. The passage of the ~~amounts~~Inflation Reduction Act ("IRA") on August 16, 2022, which included a long-term extension of the Production Tax Credit (“PTC”) for new wind farm projects and introduced new Advanced Manufacturing Production ("AMP") tax credits for companies that ~~would have been reflected~~domestically manufacture and sell clean energy equipment in the ~~financial statements had Arcosa been an entity that operated independently~~U.S., is a significant catalyst for our wind towers business. As demonstrated by more than $1.1 billion of ~~Trinity. Related party allocations are further described in Note 1, “Overview and Summary of Significant Accounting Policies” to~~new orders we have received since the ~~Combined Financial Statements. Trinity will continue to provide some~~passage of the ~~services related~~IRA for delivery through 2028, our wind tower business is at the beginning stages of a market recovery. A large portion of these orders will support wind energy expansion projects in the Southwest. As a result, we plan to ~~these general and administrative functions on~~open a ~~transitional basis for a fee following the spin-off. These services~~new plant in New Mexico, with production at this facility expected to begin in mid-2024. We anticipate 2023 will be ~~received under~~a transition year as new wind projects ramp up and expect a strong multi-year rebound in volumes beginning in 2024.

•Within our Transportation Products segment, our backlog for inland barges as of March 31, 2023 of $279 million is at its highest level since the ~~transition services agreement filed as an exhibit~~first quarter of 2020. Our customers remain committed to ~~Arcosa's Current Report on Form 8-K, filed on November 1, 2018.~~

~~Revolving Credit Facility~~

~~On November 1, 2018,~~taking delivery of these orders. Barge order levels fell sharply at the Company entered into a $400 million unsecured revolving credit facility that matures on November 1, 2023. The revolving credit facility requires the maintenance of certain ratios related to leverage and interest coverage. Borrowings under the credit facility bear interest at a defined index rate plus a margin and are guaranteed by certain 100%-owned subsidiariesonset of the ~~Company. See "Liquidity~~pandemic and ~~Capital Resources."~~

~~Definitive Agreement to Acquire ACG Materials~~

~~On November 14, 2018,~~ensuing high steel prices further negatively impacted demand. In 2022, we reduced capacity in our two active barge operating plants and completed the ~~Company entered into a definitive agreement with an affiliate~~idling of H.I.G. Capital, LLC to acquire the ACG Materials business for approximately $315 million. The Company expects to fund the purchase price with a combination of cash on-hand and advances under its $400 million five-year credit facility. The transaction, which has been approved by the Company’s Board of Directors, is subject to customary closing conditions and regulatory provisions under the Hart-Scott-Rodino Act. The transaction is expected to closeour Louisiana facility in the fourth quarter of ~~2018 or~~2021 to further reduce our cost structure. While high steel prices have impacted order levels, the underlying fundamentals for a dry barge replacement cycle remain in place. The fleet continues to age, new builds have not kept pace with scrapping, and utilization rates are high. As a result, order inquiries have been strong and we received orders of $122 million in the first quarter of ~~2019.~~2023, which extends our backlog into 2024.Demand for steel components, which was softening pre-COVID-19 due to a weakening North American rail transportation market, is increasing relative to 2020 and 2021 cyclical lows as the near-term outlook for the new railcar market indicates a stable level of replacement demand.

Executive Overview

Financial Operations and ~~Operational~~ Highlights

~~The Company's revenues~~•Revenues for the three ~~and nine~~ months ended ~~September 30, 2018 were $378.6~~March 31, 2023 increased by 2.5% to $549.2 million due to higher revenues in Construction Products and ~~$1,086.0 million, respectively, representing an increase of 3.5% and a decrease of 2.6%, respectively, compared~~Transportation Products partially offset by lower revenues in Engineered Structures due to the ~~same periods in 2017.~~ sale of our storage tanks business on October 3, 2022.

•Operating profit for the three ~~and nine~~ months ended ~~September 30, 2018~~March 31, 2023 totaled ~~$6.4~~$75.1 million, ~~and $68.2~~an increase of $40.4 million ~~respectively, representing a decrease~~year-over-year. Excluding $29.0 million of ~~81.0% and 37.2%, respectively, for~~asset sale gains recognized in the ~~same periods in 2017. When compared~~current quarter, operating profit increased 32.9% due to ~~the same periods in 2017, revenues and~~higher operating profit in ~~our~~ Construction Products ~~Group increased~~and Transportation Products, partially offset by lower operating profit in Engineered Structures due to the sale of our storage tanks business.

•Selling, general, and administrative expenses were flat for the three ~~and nine~~ months ended September 30, 2018 primarily due to increased volumes, partially due to an acquisition. The Energy Equipment Group recorded lower revenues and operating profit for the three and nine months ended September 30, 2018 resulting primarily from a planned reduction in volumes in our wind towers product line and the impact of a $23.2 million impairment charge recorded in the third quarter of 2018. Revenues and operating profit from the Transportation Products Group were higher over the three and nine months ended September 30, 2018 whenMarch 31, 2023 compared to the same period ~~last year. For~~in the ~~three months ended September 30, 2018,~~prior year, as increased compensation costs were offset by the ~~increase is primarily related to increased barge deliveries. For the nine months ended September 30, 2018, the increase is primarily related to increased steel component deliveries. The effect~~elimination of ~~the required adoption~~costs from our storage tanks business. As a percentage of ~~new revenue accounting rules effective January 1, 2018~~revenues, selling, general, and administrative expenses was ~~to increase revenues and operating profit by $8.3 million and $2.6 million, respectively,~~11.4% for the three months ended September 30, 2018 and decrease revenues and operating profit by $6.4 million and $1.0 million, respectively, for the nine months ended September 30, 2018 within our Energy Equipment Group. See Note 1 of the Combined Financial Statements.

~~Selling, engineering, and administrative expenses decreased by 4.3% and 2.9%, for the three and nine months ended September 30, 2018, respectively, when~~March 31, 2023 compared to ~~the prior year periods primarily resulting from lower compensation-related expenses.~~

~~The Company's effective tax rate for the three and nine months ended September 30, 2018 was 51.5% and 27.5%, respectively, compared to 39.1% and 39.1%~~11.7% for the same ~~periods~~period in ~~2017, respectively.~~ 2022.

•The ~~increase in the~~effective tax rate for the three months ended ~~September 30, 2018~~March 31, 2023 was ~~primarily related~~20.3% compared to ~~a portion~~24.1% for the same period in 2022. See Note 10Income Taxes of the $23.2 million impairment charge recorded in the third quarter of 2018 related to foreign operations for which taxes are not provided. The decrease in the tax rate for the nine months ended September 30, 2018 is primarily due to the impact of the Tax Cuts and Jobs Act ("the Act"). See Note 8 of the CombinedConsolidated Financial Statements.

•Net income for the three ~~and nine~~ months ended ~~September 30, 2018~~March 31, 2023 was ~~$3.2~~$55.7 million ~~and $48.0~~compared to $20.2 million ~~respectively, compared with $20.6 million and $66.1 million, respectively,~~ for the same ~~periods~~period in ~~2017.~~2022.

Our ~~Energy Equipment Group~~Engineered Structures and Transportation Products ~~Group~~segments operate in cyclical industries. Additionally, results in our Construction Products ~~Group~~segment are affected by weather and seasonal fluctuations with the second and third quarters historically being the quarters with the highest revenues.

Table of Content s

Unsatisfied Performance Obligations (Backlog)

As of ~~September 30, 2018~~March 31, 2023, December 31, 2022, and ~~2017~~March 31, 2022, our unsatisfied performance obligations, or backlog, were as follows:


	March 31, 2023		December 31, 2022		March 31, 2022

	(in millions)
Engineered Structures:
Utility, wind, and related structures	$	1,531.4	$	671.3	$	421.0

Transportation Products:
Inland barges	$	279.0	$	225.1	$	150.6

September 30,
2018 September 30,
2017
(in millions)
Wind towers and utility structures $ 700.3
$ 972.0
Inland barges $ 210.4
$ 126.0

Approximately ~~23%~~29% of the unsatisfied performance obligations for utility, wind, ~~towers~~ and ~~utility~~related structures in our Engineered Structures segment are expected to be delivered during ~~the year ending December 31, 2018~~2023, 22% are expected to be delivered during 2024 with the remainder expected to be delivered through ~~2020.~~2028. Approximately ~~21%~~68% of the unsatisfied performance obligations for inland barges in our Transportation Products segment are expected to be delivered during ~~the year ending December 31, 2018~~2023 with the remainder expected to be delivered ~~through 2020.~~during 2024.

~~Acquisition and Divestiture Activity~~

During the third quarter of 2018, the Company’s management team committed to plans to divest certain businesses whose revenues are included in the other revenues component of the Energy Equipment Group. On October 31, 2018 and November 5, 2018, the Company completed the divestiture of these businesses, which accounted for approximately $20 million of revenues and had an operating loss for the nine months ended September 30, 2018. The net proceeds from these divestitures was not significant. We recorded a pre-tax impairment charge of $23.2 million during the three months ended September 30, 2018 associated with the write-down of the net assets of these businesses to their estimated fair values. See Note 2 to our Combined Financial Statements for further information regarding these divestitures.

~~In March 2018, we completed the acquisition of certain assets of an inland barge business.~~

Results of Operations

Overall Summary

Revenues


	Three Months Ended March 31,
	2023		2022		Percent Change
	(in millions)
Construction Products	$	236.1	$	211.5	11.6	%
Engineered Structures	207.7		250.5		(17.1)
Transportation Products	105.4		73.8		42.8



Consolidated Total	$	549.2	$	535.8	2.5

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

Three Months Ended
September 30, 2018 Three Months Ended
September 30, 2017

Revenues Revenues Percent
External Intersegment Total External Intersegment
Total Change
($ in millions)
Construction Products Group $ 72.6
$ —
$ 72.6
$ 69.4
$ —
$ 69.4
4.6 %
Energy Equipment Group 197.5
0.9
198.4
216.0
1.3
217.3
(8.7 )
Transportation Products Group 108.5
—
108.5
80.5
—
80.5
34.8
Segment Totals before Eliminations 378.6
0.9
379.5
365.9
1.3
367.2
3.3
Eliminations —
(0.9 ) (0.9 ) —
(1.3 ) (1.3 )
Combined Total $ 378.6
$ —
$ 378.6
$ 365.9
$ —
$ 365.9
3.5

~~Our revenues for the three months ended September 30, 2018~~•Revenues increased by ~~3.5%~~2.5%.

•Revenues from ~~the prior year period primarily as result of increased barge deliveries in our Transportation Products Group and increased production volumes and impact of an acquisition in our~~ Construction Products Group, partially offset by a planned reduction in volumes in our Energy Equipment Group. The decrease in revenues in our Energy Equipment Group was partially offset for the three months ended September 30, 2018 due to the required adoption of new revenue accounting rules. See Note 1 of the Combined Financial Statements.

Nine Months Ended
September 30, 2018 Nine Months Ended
September 30, 2017

Revenues Revenues Percent
External Intersegment Total External Intersegment
Total Change
($ in millions)
Construction Products Group $ 226.7
$ —
$ 226.7
$ 194.8
$ —
$ 194.8
16.4 %
Energy Equipment Group 570.0
3.1
573.1
648.0
3.3
651.3
(12.0 )
Transportation Products Group 289.3
—
289.3
272.1
—
272.1
6.3
Segment Totals before Eliminations 1,086.0
3.1
1,089.1
1,114.9
3.3
1,118.2
(2.6 )
Eliminations —
(3.1 ) (3.1 ) —
(3.3 ) (3.3 )
Combined Total $ 1,086.0
$ —
$ 1,086.0
$ 1,114.9
$ —
$ 1,114.9
(2.6 )

Our revenues for the nine months ended September 30, 2018 decreased by 2.6% from the prior year period primarily due to a planned reduction in volumes in our Energy Equipment Group, partially offset by increased steel component deliveries in our Transportation Products Group and increased production volumes and impact of acquisitions in our Construction Products Group. Revenues in our Energy Equipment Group was also lower for the nine months ended September 30, 2018 due to the required adoption of new revenue accounting rules. See Note 1 of the Combined Financial Statements.

~~Operating Costs~~

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 Percent Change 2018 2017 Percent Change
(in millions) (in millions)
Construction Products Group $ 57.3
$ 55.8
2.7 % $ 181.4
$ 152.3
19.1 %
Energy Equipment Group 211.6
196.5
7.7
560.6
588.1
(4.7 )
Transportation Products Group 95.0
70.7
34.4
254.1
241.2
5.3
All Other 0.1
—

0.1
—

Segment Totals before Eliminations and Corporate Expenses 364.0
323.0
12.7
996.2
981.6
1.5
Corporate 9.1
10.6
(14.2 ) 24.7
28.0
(11.8 )
Eliminations (0.9 ) (1.3 ) (30.8 ) (3.1 ) (3.3 ) (6.1 )
Combined Total $ 372.2
$ 332.3
12.0
$ 1,017.8
$ 1,006.3
1.1

~~Operating costs for the three months ended September 30, 2018 increased by 12.0% over the same period in 2017. The increase in our Construction Products Group was~~ primarily due to higher ~~shipment levels in~~pricing across our ~~construction~~ aggregates and ~~other~~specialty material businesses. ~~Operating costs for~~

•Revenues from Engineered Structures decreased due to the ~~Energy Equipment Group were higher for the three months ended September 30, 2018,~~sale of our storage tanks business. Revenues from utility, wind, and related structures increased primarily due to ~~the impact of a $23.2 million impairment charge recorded~~increased volumes in ~~the third quarter of 2018. Operating costs of the~~our utility structures business.

•Revenues from Transportation Products ~~Group were higher for the three months ended September 30, 2018 due to higher barge deliveries.~~

~~Operating costs for the nine months ended September 30, 2018~~ increased ~~by 1.1% over the same period in 2017. The increase in our Construction Products Group was~~ primarily due to higher ~~shipment levels~~deliveries in ~~our construction aggregates~~both inland barge and ~~other businesses.~~ steel components.

Table of Content s

Operating Costs


	Three Months Ended March 31,
	2023		2022		Percent Change

	(in millions)
Construction Products	$	186.6	$	194.8	(4.2)	%
Engineered Structures	177.8		222.2		(20.0)
Transportation Products	95.3		71.1		34.0

Segment Totals before Corporate Expenses	459.7		488.1		(5.8)
Corporate	14.4		13.0		10.8

Consolidated Total	$	474.1	$	501.1	(5.4)

Depreciation, depletion, and amortization(1)	$	38.8	$	37.8	2.6

(1)Depreciation, depletion, and amortization are components of operating costs.

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

•Operating costs decreased by 5.4%. Netted against operating costs in the current quarter included $29.0 million of asset sale gains, primarily consisting of $21.8 million from the sale of depleted land in Construction Products and $6.4 million of additional gain recognized on the sale of the storage tanks divestiture. Excluding these gains, operating costs were about flat.

•Cost of revenues for ~~the Energy Equipment Group were lower for the nine months ended September 30, 2018,~~Construction Products increased primarily due to ~~a planned reduction in volumes in~~inflationary-related cost increases, including diesel, cement, and process fuels.

•Cost of revenues for Engineered Structures decreased largely due to the elimination of costs from our ~~wind tower product line, partially offset by the impact~~storage tanks business.

•Cost of ~~a $23.2 million impairment charge recorded in the third quarter of 2018. Operating costs of the~~revenues for Transportation Products ~~Group were higher for the nine months ended September 30, 2018 due to higher steel component deliveries.~~

Selling, engineering, and administrative expenses, including Corporate expenses, decreased for the three and nine months ended September 30, 2018, by 4.3% and 2.9%, respectively, as a result of lower compensation-related expenses. As a percentage of revenue, selling, engineering, and administrative expenses were 10.6% and 10.8%, respectively, for the three and nine months ended September 30, 2018 as compared to 11.5% and 10.8%, respectively, for the same periods in 2017.

~~Operating Profit (Loss)~~

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 Percent Change 2018 2017 Percent Change
(in millions) (in millions)
Construction Products Group $ 15.3
$ 13.6
12.5 % $ 45.3
$ 42.5
6.6 %
Energy Equipment Group (13.2 ) 20.8
(163.5 ) 12.5
63.2
(80.2 )
Transportation Products Group 13.5
9.8
37.8
35.2
30.9
13.9
All Other (0.1 ) —
(0.1 ) —

Segment Totals before Eliminations and Corporate Expenses 15.5
44.2
(64.9 ) 92.9
136.6
(32.0 )
Corporate (9.1 ) (10.6 ) (14.2 ) (24.7 ) (28.0 ) (11.8 )
Eliminations —
—

—
—

Combined Total $ 6.4
$ 33.6
(81.0 ) $ 68.2
$ 108.6
(37.2 )

~~Operating profit for the three months ended September 30, 2018 decreased by 81.0% when compared to the same period in 2017. Operating profit in the Construction Products Group~~ increased ~~for the three months ended September 30, 2018 when compared to the prior year period~~ primarily due to higher volumes in ~~our construction aggregates business~~inland barge and ~~higher volumes in the Group's other businesses~~steel components.

•Depreciation, depletion, and amortization increased as a result of recent acquisitions and organic growth investments.

•Selling, general, and administrative expenses were essentially flat, as increased compensation costs were offset by the ~~trench shoring products acquisition in the third quarter~~elimination of ~~2017. Operating profit~~costs from our storage tanks business. As a percentage of ~~our Energy Equipment Group~~revenues, selling, general, and administrative expenses decreased to 11.4% for the three months ended ~~September 30, 2018~~March 31, 2023, compared to the prior year period as a result of a planned reduction in volumes in the wind towers product line and the impact of a $23.2 million impairment charge recorded in the third quarter of 2018. The decrease in operating profit in our Energy Equipment Group was partially offset11.7% for the three months ended September 30, 2018 by the required adoption of the new revenue accounting rules. See Note 1 of the Combined Financial Statements. Operating profit in our Transportation Products Group increased for the three months ended September 30, 2018 primarily due to increased barge deliveries compared to the same period in ~~2017.~~2022.

Operating Profit (Loss)


	Three Months Ended March 31,
	2023		2022		Percent Change
	(in millions)
Construction Products	$	49.5	$	16.7	196.4	%
Engineered Structures	29.9		28.3		5.7
Transportation Products	10.1		2.7		274.1

Segment Totals before Corporate Expenses	89.5		47.7		87.6
Corporate	(14.4)		(13.0)		10.8

Consolidated Total	$	75.1	$	34.7	116.4

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

•Operating profit ~~for the nine months ended September 30, 2018 decreased~~increased by ~~37.2% when compared to the same period in 2017.~~ 116.4%.

•Operating profit in ~~the~~ Construction Products ~~Group~~ increased ~~for the nine months ended September 30, 2018 when compared~~due to the ~~prior year period primarily~~land sale gain as well as higher pricing.

•Excluding the impact of the storage tanks business in both periods, operating profit in Engineered Structures increased due to higher volumes ~~as a result of an acquisition~~ in ~~our lightweight aggregates business in the fourth quarter of 2017~~utility structures and ~~higher volumes in the Group's other businesses as a result~~recognition of the ~~trench shoring products acquisition~~AMP tax credits in the third quarter of 2017. Operating profit of our Energy Equipment Group decreased for the nine months ended September 30, 2018 compared to the prior year period as a result of a planned reduction in volumes in the wind ~~towers product line and the impact of a $23.2 million impairment charge recorded in the third quarter of 2018.~~ towers.

•Operating profit in our Energy Equipment Group was also lower for the nine months ended September 30, 2018 due to the required adoption of the new revenue accounting rules. See Note 1 of the Combined Financial Statements. Operating profit in our Transportation Products ~~Group~~ increased ~~for the nine months ended September 30, 2018 primarily due to increased~~driven by higher volumes and improved margins in both inland barge and steel ~~component deliveries compared to the same period in 2017.~~components.

For a further discussion of revenues, costs, and the operating results of individual segments, see Segment Discussion below.

Table of Content s

Other Income and Expense.

Other, ~~income and~~net (income) expense ~~is summarized in~~consists of the following ~~table:~~items:


	Three Months Ended March 31,
	2023		2022
	(in millions)
Interest income	$	(1.2)	$	(0.1)
Foreign currency exchange transactions	(0.5)		1.0
Other	(0.2)		—
Other, net (income) expense	$	(1.9)	$	0.9

Income ~~Taxes.~~

Taxes

The provision for income taxes results in effective tax rates that differ from the statutory rates. The Company's effective tax rate for the three ~~and nine~~ months ended ~~September 30, 2018~~March 31, 2023 was ~~51.5% and 27.5%, respectively,~~20.3% compared to ~~39.1% and 39.1%~~24.1% for the same ~~periods~~period in ~~2017, respectively.~~2022. The decrease in the tax rate for the three months ended March 31, 2023 is primarily due to AMP tax credits and reduced foreign taxes, partially offset by increased state income taxes.

Our effective tax rate reflects the Company's estimate for its state income tax expense, excess tax benefits ~~or deficiencies~~ related to equity compensation, and the impact of ~~nondeductible impairment charges. A portion~~foreign tax benefits. See Note 10 of the ~~$23.2 million pre-tax impairment charge recorded in the three and nine months ended September 30, 2018 was attributable~~Notes to ~~certain of our foreign operations for which taxes are not provided. This impairment charge increased the losses in those jurisdictions with no corresponding tax benefit.~~

The Act was enacted on December 22, 2017. The Act reduces the U.S. federal corporate income tax rate from 35.0% to 21.0%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign-sourced earnings. In December 2017, we recorded a tax benefit after the initial assessment of the tax effects of the Act, and we will continue refining this amount throughout 2018. We are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of our deferred tax balance or give rise to new deferred tax amounts resulting in a final adjustment in the fourth quarter of 2018. The impact of the Act may differ from our estimate due to changes in the regulations, rulings, guidance, and interpretations issued by the Internal Revenue Service ("IRS") and the FASB as well as interpretations and assumptions made by the Company. The calculation of our estimated annual effective tax rate includes the estimated impact of provisions of the Act, such as interest limitations, and foreign limitations or inclusions. These estimates could change as additional information becomes available on these provisions of the Act.

~~See Note 8 of the Combined~~Consolidated Financial Statements for a further discussion of income taxes.

On August 16, 2022, the IRA was enacted to reduce inflation and promote clean energy in the United States. Among other things, the IRA introduces a 15% alternative minimum tax for corporations with a three-year taxable year average annual adjusted financial statement income in excess of $1 billion and imposes a 1% excise tax on the fair market value of stock repurchases made by covered corporations after December 31, 2022. The IRA also provides for certain manufacturing, production, and investment tax credit incentives, including new AMP tax credits for companies that domestically manufacture and sell clean energy equipment, including wind towers. Certain provisions of the IRA, including the AMP tax credits for wind towers, remain subject to the issuance of additional guidance and clarification. We have considered the applicable current IRA tax law changes in our tax provision for the three months ended March 31, 2023, and continue to evaluate the impact of these tax law changes on future periods.

Segment Discussion

Construction Products ~~Group~~


	Three Months Ended March 31,
	2023		2022		Percent
	($ in millions)				Change
Revenues:
Aggregates and specialty materials	$	211.0	$	187.9	12.3	%
Construction site support	25.1		23.6		6.4
Total revenues	236.1		211.5		11.6

Operating costs:
Cost of revenues	182.9		169.9		7.7
Selling, general, and administrative expenses	26.3		26.0		1.2
Gain on disposition of property, plant, equipment, and other assets	(22.6)		(1.1)
Operating profit	$	49.5	$	16.7	196.4


Depreciation, depletion, and amortization(1)	$	26.9	$	24.6	9.3

(1)Depreciation, depletion, and amortization are components of operating profit.

Table of Content s

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 Percent 2018 2017 Percent
($ in millions) Change ($ in millions) Change
Revenues:
Construction aggregates $ 52.9
$ 53.3
(0.8 )% $ 166.6
$ 155.1
7.4 %
Other 19.7
16.1
22.4
60.1
39.7
51.4
Total revenues 72.6
69.4
4.6
226.7
194.8
16.4

Operating costs:
Cost of revenues 49.9
48.4
3.1
159.9
133.3
20.0
Selling, engineering, and administrative costs 7.4
7.4
—
21.5
19.0
13.2
Operating profit $ 15.3
$ 13.6
12.5
$ 45.3
$ 42.5
6.6
Operating profit margin 21.1 % 19.6 % 20.0 % 21.8 %

Depreciation and amortization⁽¹⁾
$ 5.2
$ 4.7
10.6
$ 15.4
$ 13.3
15.8
Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

^{•Revenues increased 11.6% primarily driven by strong pricing gains across our product lines in our aggregates and specialty materials businesses, partially offset by overall lower volumes. Revenues from our trench shoring business increased 6.4% driven by higher volumes and the acquisition of a small, Houston-based shoring, trench, and excavation products business in the quarter.}

•Cost of revenues increased 7.7% primarily due to inflationary-related cost increases, including diesel, cement, and process fuels. As a percent of revenues, cost of revenues decreased to 77.5% in the current period compared to 80.3% in the prior period.

•Selling, general, and administrative costs were substantially unchanged. Selling, general, and administrative costs decreased as a percentage of revenues to 11.1% compared to 12.3% in the prior period.

•Operating profit increased significantly, partially due to the gain recognized on the disposition of depleted land. Excluding this gain, operating profit increased 72.4% driven by increased pricing, despite lower volumes.

•Depreciation, depletion, and amortization expense increased primarily due to recent acquisitions and organic growth investments.

Engineered Structures


	Three Months Ended March 31,
	2023		2022		Percent
	($ in millions)				Change
Revenues:
Utility, wind, and related structures	$	207.7	$	190.6	9.0	%
Storage tanks	—		59.9		(100.0)
Total revenues	207.7		250.5		(17.1)

Operating costs:
Cost of revenues	168.4		204.2		(17.5)
Selling, general, and administrative expenses	15.8		18.1		(12.7)
Gain on sale of storage tank business	(6.4)		—
Gain on disposition of property, plant, equipment, and other assets	—		(0.1)

Operating profit	$	29.9	$	28.3	5.7


Depreciation and amortization(1)	$	6.6	$	8.0	(17.5)

(1)Depreciation and amortization are components of operating profit.

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

•Revenues decreased 17.1% due to the decline in revenue from our storage tanks business, which was sold in October 2022. Revenue from utility, wind, and ~~cost~~related structures increased 9.0% primarily due to increased volumes in our utility structures business.

•Cost of revenues decreased 17.5% due to the elimination of costs from our storage tanks business. Cost of revenues from utility, wind, and related structures increased ~~4.6%~~in line with the increase in revenue, partially offset by AMP tax credits recognized in our wind towers business.

•Selling, general, and ~~3.1%, respectively, for~~administrative costs decreased due to the ~~three months ended September 30, 2018, when~~elimination of costs from our storage tanks business. Selling, general, and administrative costs from utility, wind, and related structures increased primarily due to increased compensation costs.

•The storage tanks business contributed $6.4 million in operating profit related to the additional gain on sale recorded in the first quarter compared to $10.3 million of operating profit in the ~~same period~~prior year, resulting in ~~2017~~a $3.9 million decrease year-over-year related to the divestiture. Excluding the impact from the divestiture in both periods, operating profit increased primarily ~~from~~due to higher volumes in our other product lines as a result of our trench shoring products acquisition in the third quarter of 2017. Selling, engineering and administrative costs for the three months ended September 30, 2018 remained unchanged compared to the same period in 2017.

Revenues and cost of revenues increased by 16.4% and 20.0%, respectively, for the nine months ended September 30, 2018, when compared to the same period in 2017 primarily from higher volumes from acquisitions in both our lightweight aggregatesutility structures business and ~~trench shoring products business~~$3.2 million of net benefit recognized from AMP tax credits in ~~2017. Selling, engineering, and administrative costs~~our wind towers business.

Table of Content s

•Operating profit increased ~~by 13.2% for the nine months ended September 30, 2018, compared to the same period in 2017, primarily~~ due to the ~~trench shoring acquisition~~gain recognized on the sale of our storage tanks business. Excluding this gain, operating profit decreased due to the elimination of our storage tanks business, which contributed $10.3 million to operating profit in the ~~third quarter~~prior year. Operating profit from utility, wind, and related structures increased due to higher revenues in our utility structures business and $3.2 million of ~~2017.~~net benefit recognized from AMP tax credits in our wind towers business.

Unsatisfied Performance Obligations (Backlog)

~~Energy Equipment Group~~As of March 31, 2023, the backlog for utility, wind, and related structures was $1,531.4 million, compared to $671.3 million and $421.0 million as of December 31, 2022 and March 31, 2022, respectively. Approximately 29% of these unsatisfied performance obligations are expected to be delivered during the year ending December 31, 2023, approximately 22% during the year ended December 31, 2024, with the remainder expected to be delivered through 2028.

Transportation Products


	Three Months Ended March 31,
	2023		2022		Percent
	($ in millions)				Change
Revenues:
Inland barges	$	68.1	$	47.0	44.9	%
Steel components	37.3		26.8		39.2
Total revenues	105.4		73.8		42.8

Operating costs:
Cost of revenues	89.3		65.6		36.1
Selling, general, and administrative expenses	6.0		5.5		9.1


Operating profit	$	10.1	$	2.7	274.1


Depreciation and amortization (1)	$	4.0	$	3.9	2.6

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 Percent 2018 2017 Percent
($ in millions) Change ($ in millions) Change
Revenues:
Wind towers and utility structures $ 147.0
$ 167.1
(12.0 )% $ 427.5
$ 514.4
(16.9 )%
Other 51.4
50.2
2.4
145.6
136.9
6.4
Total revenues 198.4
217.3
(8.7 ) 573.1
651.3
(12.0 )

Operating costs:
Cost of revenues 171.0
178.8
(4.4 ) 484.0
532.1
(9.0 )
Selling, engineering, and administrative costs 17.4
17.7
(1.7 ) 53.4
56.0
(4.6 )
Impairment charge 23.2
—

23.2
—

Operating profit $ (13.2 ) $ 20.8
(163.5 ) $ 12.5
$ 63.2
(80.2 )
Operating profit margin (6.7 )% 9.6 % 2.2 % 9.7 %

Depreciation and amortization⁽¹⁾
$ 7.4
$ 7.5
(1.3 ) $ 22.6
$ 22.7
(0.4 )

⁽¹⁾Depreciation and amortization are components of operating profit.

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

•Revenues increased 42.8% driven by an increase in deliveries of inland barges and steel components.

•Cost of revenues increased 36.1% due to higher volumes of inland barges and steel components.

•Selling, general, and administrative costs increased 9.1% but decreased ~~by 8.7% for the three months ended September 30, 2018 when~~as a percentage of revenues to 5.7% compared to 7.5% in the prior period.

•Operating profit increased significantly, outpacing the increase in revenues, driven by improved operating leverage associated with the increased volumes and improved margins across both businesses.

Unsatisfied Performance Obligations (Backlog)

As of March 31, 2023, the backlog for inland barges was $279.0 million, compared to $225.1 million and $150.6 million as of December 31, 2022 and March 31, 2022, respectively. Approximately 68% of unsatisfied performance obligations for inland barges are expected to be delivered during the year ending December 31, 2023 with the remainder expected to be delivered in 2024.

Table of Content s

Corporate


	Three Months Ended March 31,
	2023		2022		Percent
	(in millions)				Change
Corporate overhead costs	$	14.4	$	13.0	10.8	%

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

•Corporate overhead costs increased 10.8% primarily due to increased compensation-related expenses. The increase was partially offset by lower acquisition and divestiture-related expenses of $0.6 million, compared to $0.9 million for the same period in 2017. Revenues from our wind towers and utility structures product lines decreased by 12.0% driven primarily by a planned reduction in volumes in our wind towers product line. Revenues from other product lines increased by 2.4% as a result of increased volumes. Cost of revenues decreased by 4.4% for the three months ended September 30, 2018 compared to 2017, primarily driven by reduced2022.

~~volumes in our wind towers product line, and partially offset by a $6.1 million reserve on finished goods inventory related to an order for a single customer in our utility structures business.~~

Revenues decreased by 12.0% for the nine months ended September 30, 2018 when compared to the same period in 2017. Revenues from our wind towers and utility structures product lines decreased by 16.9%, driven primarily by a planned reduction in volumes in our wind towers product line. Revenues from other product lines increased by 6.4% as a result of increased shipping volumes. Cost of revenues decreased by 9.0% for the nine months ended September 30, 2018 compared to 2017, driven primarily by the reduced volumes in our wind towers product line and a $3.9 million insurance recovery, partially offset by a $6.1 million reserve on finished goods inventory related to an order for a single customer in our utility structures business.

Selling, engineering, and administrative costs decreased by 1.7% and 4.6%, respectively, for the three and nine months ended September 30, 2018 compared to the same periods in 2017 primarily due to decreased bad debt expense related to the same single utility structures customer.

The Company recorded an impairment charge of $23.2 million in the third quarter of 2018 associated with the write-down of the net assets of certain businesses classified as held for sale. See Note 2 to the Combined Financial Statements for further information about the impairment charge.

In addition to the changes described above, revenues and operating profit were also higher by $8.3 million and $2.6 million, respectively, for the three months ended September 30, 2018 and lower by $6.4 million and $1.0 million, respectively, for the nine months ended September 30, 2018 due to the required adoption of new revenue accounting rules. See Note 1 of the Combined Financial Statements.

~~The backlog for wind towers and utility structures was $700.3 million and $972.0 million at September 30, 2018 and 2017, respectively.~~

~~Transportation Products Group~~

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 Percent 2018 2017 Percent
($ in millions) Change ($ in millions) Change
Revenues:
Inland barges $ 49.3
$ 28.1
75.4 % $ 123.0
$ 124.3
(1.0 )%
Steel components 59.2
52.4
13.0
166.3
147.8
12.5
Total Revenues 108.5
80.5
34.8
289.3
272.1
6.3

Operating costs:
Cost of revenues 88.8
64.7
37.2
236.6
223.7
5.8
Selling, engineering, and administrative costs 6.2
6.0
3.3
17.5
17.5
—
Operating profit $ 13.5
$ 9.8
37.8
$ 35.2
$ 30.9
13.9
Operating profit margin 12.4 % 12.2 % 12.2 % 11.4 %

Depreciation and amortization ⁽¹⁾
$ 4.2
$ 4.5
(6.7 ) $ 11.7
$ 12.2
(4.1 )

⁽¹⁾~~Depreciation and amortization are components of operating profit.~~

Revenues and cost of revenues increased for the three months ended September 30, 2018 by 34.8% and 37.2%, respectively, compared to the same period in 2017 primarily from higher barge deliveries. Revenues and cost of revenues increased for the nine months ended September 30, 2018 by 6.3% and 5.8%, respectively, compared to the same period in 2017 primarily from higher steel component deliveries. Selling, engineering, and administrative costs increased by 3.3% for the three months ended September 30, 2018 due to higher compensation-related expenses and were substantially unchanged for the nine months ended September 30, 2018 compared to the same periods in 2017.

~~As of September 30, 2018, the backlog for the Transportation Products Group was $210.4 million compared to $126.0 million as of September 30, 2017.~~

~~Corporate~~

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 Percent 2018 2017 Percent
($ in millions) Change ($ in millions) Change
Corporate overhead costs $ 9.1
$ 10.6
(14.2 )% $ 24.7
$ 28.0
(11.8 )%

Corporate overhead costs consist of costs not previously allocated to Trinity's business units and have been allocated to Arcosa based on an analysis of each cost function and the relative benefits received by Arcosa for each of the periods using methods management believes are consistent and reasonable.

~~The decrease in corporate overhead costs for the three and nine months ended September 30, 2018 compared to 2017 is primarily due to lower compensation-related expenses.~~

As an independent public company, Arcosa expects to incur incremental costs, including costs to replace services and fees previously provided or incurred by Trinity as well as other standalone costs. We estimate that these additional costs will range from $10.0 million to $15.0 million in fiscal year 2019.

Liquidity and Capital Resources

Arcosa’s primary liquidity ~~requirements are primarily to fund~~requirement consists of funding our business operations, including capital expenditures, working capital ~~requirements,~~investment, and disciplined ~~acquisitions, and operational restructuring activities.~~acquisitions. Our primary sources of liquidity ~~are~~include cash ~~flows~~flow from operations, our existing cash balance, ~~and, as necessary, borrowings~~availability under the revolving credit facility, and, as necessary, the issuance of additional long-term debt or equity. To the extent we ~~generate discretionary cash flow,~~have available liquidity, we may also consider ~~using this additional cash flow to undertake~~undertaking new capital investment projects, ~~execute~~executing additional strategic acquisitions, ~~return~~returning capital to stockholders, or ~~for~~funding other general corporate purposes.

~~Pursuant to the separation and distribution agreement, on October 31, 2018, Trinity contributed $200 million cash to Arcosa in connection with the separation.~~

On November 1, 2018, the Company entered into a $400 million unsecured revolving credit facility that matures on November 1, 2023. The interest rates under the facility are variable based on LIBOR or an alternate base rate plus a margin that is determined based on Arcosa’s leverage as measured by a consolidated total indebtedness to consolidated EBITDA ratio, and initially are set at LIBOR plus 1.25%. A commitment fee will accrue on the average daily unused portion of the revolving facility at the rate of 0.20% to 0.35%, initially set at 0.20%. As of November 1, 2018, there were no outstanding loans borrowed under the facility and there were approximately $19.9 million in Letters of Credit issued.

The credit agreement includes customary representations, warranties, conditions, covenants and events of default. The covenants under the credit agreement include, among other things, two financial covenants: a minimum interest coverage ratio and a maximum leverage ratio. The credit agreement requires us to maintain a minimum interest coverage ratio as of the last day of each fiscal quarter, which is defined as consolidated EBITDA divided by consolidated interest expense, in each case for the four fiscal quarters then ended, of not less than 2.50 to 1.00, beginning with the fiscal quarter ended September 30, 2018. The credit agreement also requires us to maintain a maximum leverage ratio as of the last day of each fiscal quarter, which is defined as consolidated total debt as of the last day of such fiscal quarter, divided by consolidated EBITDA for the four fiscal quarters then ended, of not greater than 3.00 to 1.00, beginning with the fiscal quarter ended September 30, 2018. Following qualified acquisitions (as defined in the credit agreement), we may elect up to two times to permit the maximum leverage ratio to be greater than 3.00 to 1.00 but not greater than 3.50 to 1.00. As of September 30, 2018, we were in compliance with the financial covenants in the credit agreement.

Cash Flows

The following table summarizes our cash flows from operating, investing, and financing activities for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2023 and ~~2017:~~2022:


	Three Months Ended March 31,
	2023		2022

	(in millions)
Total cash provided by (required by):
Operating activities	$	27.3	$	24.5
Investing activities	(34.1)		(5.3)
Financing activities	(4.4)		(3.5)
Net increase (decrease) in cash and cash equivalents	$	(11.2)	$	15.7

Nine Months Ended
September 30,
2018 2017
(in millions)
Total cash provided by (required by):
Operating activities $ 118.5
$ 134.3
Investing activities (55.4 ) (91.3 )
Financing activities (59.5 ) (46.8 )
Net (decrease) increase in cash, cash equivalents, and restricted cash $ 3.6
$ (3.8 )

Operating Activities. Net cash provided by operating activities for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2023 was ~~$118.5~~$27.3 million compared to ~~net cash provided by operating activities of $134.3~~$24.5 million for the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2022.

~~Receivables at September 30, 2018 decreased~~•The changes in current assets and liabilities resulted in a net use of cash of $55.4 million for the three months ended March 31, 2023 compared to a net use of cash of $38.1 million for the three months ended March 31, 2022. The current year activity was primarily driven by ~~$10.9 million or 6.6% since December 31, 2017 primarily~~increased receivables and inventories due to ~~lower trade receivables in our Energy Equipment Group~~increased volumes and higher steel prices, partially offset by ~~higher trade receivables~~increases in our Transportation Products Group driven by an increase in Inland Barge revenues. Raw materials inventory at September 30, 2018 increased by $35.1 million or 38.4% primarily in our Transportation Products Group. Work in process inventory decreased by $13.4 million or 28.4%accounts payable and Finished goods inventory decreased by $33.8 million or 31.2% since December 31, 2017 primarily in our Energy Equipment Group. Accounts payable increased by $6.7 million, while accrued liabilities decreased by $13.8 million ~~from December 31, 2017. We continually review reserves related to collectibility as well as the adequacy of lower of cost or net realizable value with regard to accounts receivable and inventory.~~advanced billings.

Investing Activities. Net cash required by investing activities for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2023 was ~~$55.4~~$34.1 million compared to ~~$91.3~~$5.3 million for the ~~nine~~three months ended ~~September 30, 2017.~~ March 31, 2022.

•Capital expenditures for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2023 were ~~$33.0~~$44.4 million compared to ~~$45.9~~$25.9 million for the same period last year. Full-year capital expenditures are expected to be approximately $185 to $210 million in 2023.

•Proceeds from the sale of property, plant, and equipment and other assets totaled ~~$2.6~~$23.9 million for the ~~nine~~three months ended ~~September 30, 2018,~~March 31, 2023, compared to ~~$2.1~~$20.6 million for the same period in ~~2017. Net~~2022.

•Cash paid for acquisitions, net of cash ~~required related to acquisitions amounted to $25.0 million and $47.5~~acquired, was $15.6 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2023 compared to no activity for the same period in 2022. Proceeds from the sale of the storage tanks business were $2.0 million during the three months ended March 31, 2023 and ~~2017, respectively.~~related to the resolution of certain contingencies from the sale that closed in October 2022. There was no divestiture activity for the ~~nine~~three months ended ~~September 30, 2018 and 2017.~~March 31, 2022.

Financing Activities. Net cash required by financing activities during the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2023 was ~~$59.5~~$4.4 million compared to ~~$46.8 million of~~net cash required by financing activities of $3.5 million for the same period in ~~2017. Net transfers~~2022.

Table of Content s

Other Investing and Financing Activities

Revolving Credit Facility and Senior Notes

On January 2, 2020, the Company entered into an Amended and Restated Credit Agreement to ~~Trinity totaled $56.3~~increase the revolving credit facility to $500.0 million and added a term loan facility of $150.0 million, in each case with a maturity date of January 2, 2025. The entire term loan was advanced on January 2, 2020. As of March 31, 2023, the term loan had a remaining balance of $136.8 million.

As of March 31, 2023, we had no outstanding loans borrowed under the revolving credit facility and there were approximately $25.3 million of letters of credit issued, leaving $474.7 million available for borrowing. Of the outstanding letters of credit as of March 31, 2023, $24.5 million are expected to expire in 2023, with the remainder in 2024. The majority of our letters of credit obligations support the Company’s various insurance programs and generally renew by their terms each year.

The interest rates under the revolving credit facility and term loan are variable based on LIBOR or an alternate base rate plus a margin. A commitment fee accrues on the average daily unused portion of the revolving facility. The margin for borrowing and commitment fee rate are determined based on Arcosa’s leverage as measured by a consolidated total indebtedness to consolidated EBITDA ratio. The margin for borrowing ranges from 1.25% to 2.00% and was set at LIBOR plus 1.50% as of March 31, 2023. The commitment fee rate ranges from 0.20% to 0.35% and was set at 0.25% as of March 31, 2023.

On April 6, 2021, the Company issued $400.0 million aggregate principal amount of 4.375% senior notes (the “Notes”) that mature in April 2029. Interest on the Notes is payable semiannually in April and October of each year. The Notes are senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by each of the Company’s domestic subsidiaries that is a guarantor under our revolving credit and term loan facilities.

We believe, based on our current business plans, that our existing cash, available liquidity, and cash flow from operations will be sufficient to fund necessary capital expenditures and operating cash requirements for the foreseeable future.

Dividends and Repurchase Program

In March 2023, the Company declared a quarterly cash dividend of $0.05 per share that was paid on April 28, 2023.

In December 2022, the Company’s Board of Directors authorized a new $50 million share repurchase program effective January 1, 2023 through December 31, 2024 to replace a program of the same amount that expired on December 31, 2022. For the three months ended March 31, 2023, the Company did not repurchase any shares, leaving the full amount of the $50.0 million authorization available as of March 31, 2023. See Note 1 of the Notes to the Consolidated Financial Statements.

Derivative Instruments

In December 2018, the Company entered into an interest rate swap instrument, effective as of January 2, 2019 and expiring in October 2023, to reduce the effect of changes in the variable interest rates associated with borrowings under the Amended and Restated Credit Agreement. The instrument carried an initial notional amount of $100.0 million, thereby hedging the first $100.0 million of borrowings. The instrument effectively fixes the LIBOR component of the borrowings at a monthly rate of 2.71%. As of March 31, 2023, the Company has recorded an asset of $1.5 million for the ~~nine months ended September 30, 2018 compared~~fair value of the instrument, all of which is recorded in accumulated other comprehensive income. See Note 3 and Note 7 of the Notes to ~~$47.3 million for~~ the ~~nine months ended September 30, 2017.~~Consolidated Financial Statements.

~~Off-Balance Sheet Arrangements~~

We do not engage in any off-balance sheet financial arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Recent Accounting Pronouncements

See Note 1 of the ~~Combined~~Notes to the Consolidated Financial Statements for information about recent accounting pronouncements.

Table of Content s

Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not historical facts are forward-looking ~~statements.~~statements and involve risks and uncertainties. These forward-looking statements include expectations, beliefs, plans, objectives, future financial performances, estimates, projections, goals, and forecasts. ~~The~~Arcosa uses the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” ~~“should”~~“should,” “plans,” and similar expressions ~~generally~~to identify these forward-looking statements. ~~Forward-looking statements involve risks and uncertainties that~~Potential factors, which could cause our actual results of operations to differ materially from those in the forward-looking statements ~~including,~~include, among others:

•the impact of the COVID-19 pandemic on our sales, operations, supply chain, employees, and financial condition;

•market conditions and customer demand for ~~Arcosa's~~our business products and services;

•the cyclical nature of the industries in which ~~Arcosa competes;~~we compete;

•variations in weather in areas where ~~Arcosa~~our construction products are sold, used, or installed;

~~naturally-occurring~~•naturally occurring events and other events and disasters causing disruption to our manufacturing, product deliveries, and production capacity, thereby giving rise to an increase in expenses, loss of revenue, and property losses;

•competition and other competitive factors;

•our ability to identify, consummate, or integrate acquisitions of new businesses or products, or divest any business;

•the timing of introduction of new products;

•the timing and delivery of customer orders or a breach of customer contracts;

•the credit worthiness of customers and their access to capital;

•product price changes;

•changes in mix of products sold;

•the costs incurred to align manufacturing capacity with demand and the extent of its utilization;

•the operating leverage and efficiencies that can be achieved by ~~Arcosa's~~our manufacturing businesses;

•availability and costs of steel, component parts, supplies, and other raw materials;

~~competition and other competitive factors;~~

•changing technologies;

•surcharges and other fees added to fixed pricing agreements for steel, component parts, supplies and other raw materials;

•increased costs due to increased inflation;

•interest rates and capital costs;

•counter-party risks for financial instruments;

•long-term funding of our operations;

•taxes;

•the stability of the governments and political and business conditions in certain foreign countries, particularly Mexico;

•changes in import and export quotas and regulations;

•business conditions in emerging economies;

•costs and results of litigation;

•changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies;

•legal, regulatory, and environmental issues, including compliance of ~~Arcosa's~~our products with mandated specifications, standards, or testing criteria and obligations to remove and replace ~~Arcosa's~~our products following installation or to recall our products and install different products manufactured by ~~Arcosa~~us or our competitors;

•actions by the executive and legislative branches of the U.S. government relative to federal government budgeting, taxation policies, government expenditures, U.S. borrowing/debt ceiling limits, and trade policies, including ~~tariffs;~~tariffs, and border closures;

•the inability to sufficiently protect our intellectual property rights;

•our ability to mitigate against cybersecurity incidents, including ransomware, malware, phishing emails, and other electronic security threats;

•the improper use of social orand other digital media to disseminate false, misleading, and/or unreliable or inaccurate ~~information;~~information about the Company or demonstrate actions that negatively reflect on the Company;

•if the ~~inability to sufficiently protect our intellectual property rights;~~Company's ESG efforts are not favorably received by stockholders;

•if ~~Arcosa~~the Company does not realize some or all of the benefits expected ~~to result~~ from certain provisions of the ~~spin-off, or if such benefits are delayed;~~

~~Arcosa's ongoing businesses may be adversely affected and~~IRA, including the AMP tax credits for wind towers, which remain subject to ~~certain risks~~the issuance of additional guidance and ~~consequences as a result~~clarification;

Table of ~~the spin-off transaction;~~Content s

•if the distribution of shares of Arcosa resulting from the separation of Arcosa from Trinity Industries, Inc. in November 2018 (the “Separation”), together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, the Company's stockholders at the time of the distribution and the Company could be subject to significant tax liability; and

•if the ~~spin-off transaction~~Separation does not comply with state ~~and federal~~ fraudulent conveyance laws and legal dividend requirements.

Any forward-looking statement speaks only as of the date on which such statement is made. ~~We undertake~~Arcosa undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is ~~made, except as required by applicable federal securities laws. Factors~~made. For a discussion of risks and uncertainties that could cause actual results ~~or events~~ to differ ~~materially~~ from those ~~anticipated include~~contained in the ~~matters described under the section entitled~~forward-looking statements, see Item 1A, “Risk Factors” in ~~the~~our 2022 Annual Report on Form ~~10.~~10-K and future Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There has been no material change in our market risks since December 31, ~~2017~~2022 as set forth in our 2022 Annual Report on Form ~~10.~~10-K. See Note 79 of the ~~Combined~~Notes to Consolidated Financial Statements for the impact of foreign exchange rate fluctuations for the three ~~and nine~~ months ended ~~September 30, 2018.~~March 31, 2023.

Item 4. Controls and ~~Procedures.~~Procedures

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure that it is able to collect and record the information it is required to disclose in the reports it files with the ~~SEC,~~Securities and Exchange Commission (“SEC”), and to process, summarize, and disclose this information within the time periods specified in the rules of the SEC. The Company’s Chief Executive and Chief Financial Officers are responsible for establishing and maintaining these procedures and, as required by the rules of the SEC, evaluating their effectiveness. Based on their evaluation of the Company’s disclosure controls and procedures that took place as of the end of the period covered by this report, the Chief Executive and Chief Financial Officers believe that these procedures are effective to 1) ensure that the Company is able to collect, process, and disclose the information it is required to disclose in the reports it files with the SEC within the required time periods and 2) accumulate and communicate this information to the Company’s management, including its Chief Executive and Chief Financial Officers, to allow timely decisions regarding this disclosure.

Changes in Internal Control over Financial Reporting

During the period covered by this report, there have been no changes in the Company’s internal control over financial reporting that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

Table of Content s

PART II

Item 1.Legal Proceedings

~~The information provided in~~See Note 1115 of the ~~Combined~~Consolidated Financial Statements ~~is hereby incorporated into this Part II, Item 1 by reference.~~regarding legal proceedings.

Item 1A.Risk Factors

~~Our business and common stock are subject to a number of risks and uncertainties. The discussion of such risks and uncertainties may be found under "Risk Factors" in the Form 10 filed.~~ There have been no material changes ~~to such~~in the Company's risk ~~factors.~~factors from those set forth in our 2022 Annual Report on Form 10-K.

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

~~Not Applicable.~~This table provides information with respect to purchases by the Company of shares of its common stock during the quarter ended March 31, 2023:


Period	Number of Shares Purchased (1)	Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2)
January 1, 2023 through January 31, 2023	750	$	57.55	—	$	50,000,000
February 1, 2023 through February 28, 2023	613	$	58.11	—	$	50,000,000
March 1, 2023 through March 31, 2023	—	$	—	—	$	50,000,000
Total	1,363	$	57.80	—	$	50,000,000

(1) These columns include the following transactions during the three months ended March 31, 2023: (i) the surrender to the Company of 1,363 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees and (ii) the purchase of no shares of common stock on the open market as part of the stock repurchase program.

(2) In December 2022, the Company’s Board of Directors authorized a new $50 million share repurchase program effective January 1, 2023 through December 31, 2024 to replace a program of the same amount that expired on December 31, 2022.

Item 3.Defaults Upon Senior Securities

Not ~~Applicable.~~applicable.

Item 4.Mine Safety Disclosures

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.

Item 5.Other Information

None.

Table of Content s

Item 6. Exhibits



NO.						DESCRIPTION
3.1						Restated Certificate of Incorporation of Arcosa, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-8 filed on ~~November 1,~~October 31, 2018, File No. 333-228098).
3.2						Amended and Restated Bylaws of Arcosa, Inc. (incorporated by reference to Exhibit 3.2 to the ~~Company’s Registration Statement~~Company's Quarterly Report on Form ~~S-8 filed on November 1, 2018,~~10-Q, for the quarter-ended March 31, 2020, File No. ~~333-228098)~~001-38494).
~~31.1~~4.1						Third Supplemental Indenture dated as of October 3, 2022 among Arcosa, Inc. and Computershare Trust Company N.A. (filed herewith).
4.2						Fourth Supplemental Indenture dated as of January 4, 2023 among the Guaranteeing Subsidiary named therein, Arcosa, Inc., and Computershare Trust Company N.A. (filed herewith).
10.1						Form of Perform ance-Based Restricted Stock Unit Grant Agreement (filed herewith)
31.1						Rule 13a-15(e) and 15d-15(e) Certification of the Chief Executive Officer (filed herewith).
31.2						Rule 13a-15(e) and 15d-15(e) Certification of the Chief Financial Officer (filed herewith).
32.1						Certification pursuant to ~~18U.S.C.~~18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.2						Certification pursuant to ~~18U.S.C.~~18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
95						Mine Safety Disclosure Exhibit (filed herewith).
101.INS						Inline XBRL Instance Document (filed electronically herewith).
101.SCH						Inline XBRL Taxonomy Extension Schema Document (filed electronically herewith).
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed electronically herewith).
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document (filed electronically herewith).
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed electronically herewith).
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document (filed electronically herewith).
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

~~_____________________________~~

Table of Content s

SIGNATURES

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.


		Arcosa, Inc.
		(Registrant)

~~ARCOSA, INC.~~April 28, 2023		ByBy:	/s/ ~~Scott Beasley~~Gail M. Peck
~~Registrant~~			Gail M. Peck
			~~Scott Beasley~~
	Chief Financial Officer
	~~November 14, 2018~~


Caption		Page

~~Caption~~ PART I		~~Page~~

~~PART I FINANCIAL INFORMATION~~
Item 1. Financial Statements	3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		1719
Item 3. Quantitative and Qualitative Disclosures ~~About~~a bout Market Risk		2729
Item 4. Controls and Procedures		2829

PART II ~~OTHER INFORMATION~~
Item 1. Legal Proceedings		2930
Item 1A. Risk Factors		2930
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		2930
Item 3. Defaults Upon Senior Securities		2930
Item 4. Mine Safety Disclosures		2930
Item 5. Other Information		2930
Item 6. Exhibits		3031

SIGNATURES		3132



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018		2017
	(in millions)
Revenues	$	378.6		$	365.9		$	1,086.0	$	1,114.9
Operating costs:
Cost of revenues	308.9			290.4			877.5		885.7
Selling, engineering, and administrative expenses	40.1			41.9			117.1		120.6
Impairment charge	23.2			—			23.2		—
	372.2			332.3			1,017.8		1,006.3
Total operating profit	6.4			33.6			68.2		108.6

Other, net (income) expense	(0.2		)	(0.2		)	2.0		—
Income before income taxes	6.6			33.8			66.2		108.6

Provision for income taxes	3.4			13.2			18.2		42.5

Net income	3.2			20.6			48.0		66.1
Other comprehensive income (loss)	(0.1		)	(0.8		)	0.4		(1.4		)
Comprehensive income	$	3.1		$	19.8		$	48.4	$	64.7



	Net Parent Investment			Accumulated Other Comprehensive Loss			Total Parent Equity
	Net Parent Investment			Accumulated Other Comprehensive Loss			Total Parent Equity
	(in millions)
Balances at December 31, 2017	$	1,427.7		$	(19.8	)	$	1,407.9
Cumulative effect of adopting accounting standards (see Note 1)	(4.0		)	—			(4.0		)
Net income	48.0			—			48.0
Other comprehensive income (loss)	—			0.4			0.4
Net transfers from parent and affiliates	(56.7		)	—			(56.7		)
Restricted shares, net	7.5			—			7.5
Balances at September 30, 2018	$	1,422.5		$	(19.4	)	$	1,403.1



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(in millions)
Sales by Arcosa to Trinity businesses	$	43.8	$	38.7	$	119.9	$	102.9
Purchases by Arcosa from Trinity businesses	$	10.7	$	9.2	$	35.5	$	37.5



	Unsatisfied performance obligations at September 30, 2018
	Total Amount		Percent expected to be delivered in 2018
	(in millions)
Energy Equipment Group:
Wind towers and utility structures	$	700.3	23	%
Other	$	83.5	37	%

Transportation Products Group:
Inland barges	$	210.4	21	%



	As Reported			Adjustments			Balance without adjustment for adoption of ASU 2014-09
	(in millions)
Combined Statement of Comprehensive Income
For the three months ended September 30, 2018:
Revenues	$	378.6		$	(8.3	)	$	370.3
Cost of revenues	308.9			(5.7		)	303.2
Operating profit	6.4			(2.6		)	3.8
Income before income taxes	6.6			(2.6		)	4.0
Provision for income taxes	3.4			(0.6		)	2.8
Net income	3.2			(2.0		)	1.2

For the nine months ended September 30, 2018:
Revenues	$	1,086.0		$	6.4		$	1,092.4
Cost of revenues	877.5			5.4			882.9
Operating profit	68.2			1.0			69.2
Income before income taxes	66.2			1.0			67.2
Provision for income taxes	18.2			0.2			18.4
Net income	48.0			0.8			48.8

Combined Balance Sheet
Receivables, net of allowance	$	174.7		$	(16.1	)	$	158.6
Inventories:
Raw materials and supplies	126.4			—			126.4
Work in process	33.8			17.1			50.9
Finished goods	74.5			5.4			79.9

Accrued liabilities	109.1			(0.1		)	109.0
Deferred income taxes	16.8			1.5			18.3
Net parent investment	1,422.5			5.0			1,427.5

Combined Statement of Cash Flows
For the nine months ended September 30, 2018:
Operating activities:
Net income	$	48.0		$	0.8		$	48.8
Provision for deferred income taxes	7.1			0.2			7.3
(Increase) decrease in receivables	10.9			8.3			19.2
(Increase) decrease in inventories	(31.6		)	5.4			(26.2		)
Increase (decrease) in accrued liabilities	(13.8		)	(14.7		)	(28.5		)
Net cash provided by operating activities	118.5			—			118.5



	Revenues								Operating Profit (Loss)
	External		Intersegment			Total
	(in millions)
Construction aggregates						$	52.9
Other						19.7
Construction Products Group	$	72.6	$	—		72.6			$	15.3

Wind towers and utility structures						147.0
Other						51.4
Energy Equipment Group	197.5		0.9			198.4			(13.2		)

Inland barges						49.3
Steel components						59.2
Transportation Products Group	108.5		—			108.5			13.5

All Other	—		—			—			(0.1		)

Segment Totals before Eliminations and Corporate	378.6		0.9			379.5			15.5
Corporate	—		—			—			(9.1		)
Eliminations	—		(0.9		)	(0.9		)	—
Combined Total	$	378.6	$	—		$	378.6		$	6.4



	September 30, 2018		September 30, 2017
	(in millions)
Wind towers and utility structures	$	700.3	$	972.0
Inland barges	$	210.4	$	126.0



	Three Months Ended September 30, 2018								Three Months Ended September 30, 2017
	Three Months Ended September 30, 2018								Three Months Ended September 30, 2017
	Revenues								Revenues								Percent
	External		Intersegment			Total			External		Intersegment			Total			Change
	($ in millions)
Construction Products Group	$	72.6	$	—		$	72.6		$	69.4	$	—		$	69.4		4.6	%
Energy Equipment Group	197.5		0.9			198.4			216.0		1.3			217.3			(8.7	)
Transportation Products Group	108.5		—			108.5			80.5		—			80.5			34.8
Segment Totals before Eliminations	378.6		0.9			379.5			365.9		1.3			367.2			3.3
Eliminations	—		(0.9		)	(0.9		)	—		(1.3		)	(1.3		)
Combined Total	$	378.6	$	—		$	378.6		$	365.9	$	—		$	365.9		3.5



	Nine Months Ended September 30, 2018								Nine Months Ended September 30, 2017
	Nine Months Ended September 30, 2018								Nine Months Ended September 30, 2017
	Revenues								Revenues								Percent
	External		Intersegment			Total			External		Intersegment			Total			Change
	($ in millions)
Construction Products Group	$	226.7	$	—		$	226.7		$	194.8	$	—		$	194.8		16.4	%
Energy Equipment Group	570.0		3.1			573.1			648.0		3.3			651.3			(12.0	)
Transportation Products Group	289.3		—			289.3			272.1		—			272.1			6.3
Segment Totals before Eliminations	1,086.0		3.1			1,089.1			1,114.9		3.3			1,118.2			(2.6	)
Eliminations	—		(3.1		)	(3.1		)	—		(3.3		)	(3.3		)
Combined Total	$	1,086.0	$	—		$	1,086.0		$	1,114.9	$	—		$	1,114.9		(2.6	)