UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


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

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER 30, 2023~~MARCH 31, 2024


			OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 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.)

500 N. Akard Street, Suite 400
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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ☐

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

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

Large accelerated filer þ Accelerated filer ☐ Non-accelerated filer ☐

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

At ~~October 13, 2023,~~April 15, 2024, the number of shares of common stock outstanding was ~~48,759,966.~~48,582,544.

ARCOSA, INC.

FORM 10-Q

TABLE OF CONTENTS

Table of Contents

PART I

Item 1. Financial Statements

Arcosa, Inc. and Subsidiaries

Consolidated Statements of Operations

(unaudited)









		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022

		(in millions)								(in millions)
Revenues	Revenues	$	591.7	$	603.9	$	1,725.7	$	1,742.5
Operating costs:	Operating costs:
Operating costs:
Operating costs:
Cost of revenues
Cost of revenues
Cost of revenues	Cost of revenues	484.6		488.8		1,388.9		1,411.4
Selling, general, and administrative expenses	Selling, general, and administrative expenses	61.3		67.8		194.5		196.7
Selling, general, and administrative expenses
Selling, general, and administrative expenses
Gain on disposition of property, plant, equipment, and other assets
Gain on disposition of property, plant, equipment, and other assets
Gain on disposition of property, plant, equipment, and other assets	Gain on disposition of property, plant, equipment, and other assets	(2.6)		(1.7)		(25.8)		(6.5)
Gain on sale of storage tanks business	Gain on sale of storage tanks business	—		—		(6.4)		—
Gain on sale of storage tanks business
Gain on sale of storage tanks business

		545.2
		543.3		554.9		1,551.2		1,601.6
		545.2

		545.2
Total operating profit
Total operating profit
Total operating profit	Total operating profit	48.4		49.0		174.5		140.9

Interest expense	Interest expense	6.7		8.6		20.9		23.5

Interest expense

Interest expense
Other, net (income) expense
Other, net (income) expense
Other, net (income) expense	Other, net (income) expense	(1.3)		(0.2)		(5.8)		1.1
Income before income taxes	Income before income taxes	43.0		40.6		159.4		116.3
Income before income taxes
Income before income taxes

Provision for income taxes

Provision for income taxes

Provision for income taxes	Provision for income taxes	7.5		8.6		27.3		25.1

Net income	Net income	$	35.5	$	32.0	$	132.1	$	91.2

Net income

Net income

Net income per common share:

Net income per common share:

Net income per common share:	Net income per common share:
Basic	Basic	$	0.73	$	0.66	$	2.71	$	1.88
Basic
Basic
Diluted
Diluted
Diluted	Diluted	$	0.72	$	0.66	$	2.70	$	1.87
Weighted average number of shares outstanding:	Weighted average number of shares outstanding:
Weighted average number of shares outstanding:
Weighted average number of shares outstanding:
Basic
Basic
Basic	Basic	48.7		48.3		48.5		48.2
Diluted	Diluted	48.8		48.5		48.7		48.5
Diluted
Diluted
Dividends declared per common share	Dividends declared per common share	$	0.05	$	0.05	$	0.15	$	0.15
Dividends declared per common share
Dividends declared per common share

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

Arcosa, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(unaudited)









		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022

		(in millions)								(in millions)
Net income	Net income	$	35.5	$	32.0	$	132.1	$	91.2
Other comprehensive income (loss):	Other comprehensive income (loss):
Other comprehensive income (loss):
Other comprehensive income (loss):
Derivative financial instruments:	Derivative financial instruments:
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $0.0, $0.3, $0.1, and $0.9		—		0.9		0.2		3.2
Reclassification adjustments for (gains) losses included in net income, net of tax expense (benefit) of $0.2, ($0.1), $0.4, and ($0.3)		(0.6)		0.1		(1.4)		0.9
Derivative financial instruments:
Derivative financial instruments:
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $0.0 and $0.0
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $0.0 and $0.0
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $0.0 and $0.0
Reclassification adjustments for (gains) losses included in net income, net of tax expense (benefit) of $0.0 and $0.1
Reclassification adjustments for (gains) losses included in net income, net of tax expense (benefit) of $0.0 and $0.1
Reclassification adjustments for (gains) losses included in net income, net of tax expense (benefit) of $0.0 and $0.1
Currency translation adjustment:	Currency translation adjustment:
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $0.0, ($0.2), $0.0, and ($0.2)		(0.1)		(0.5)		0.1		(0.6)
Currency translation adjustment:
Currency translation adjustment:
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $0.0 and $0.0
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $0.0 and $0.0
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $0.0 and $0.0

		(0.4)
		(0.7)		0.5		(1.1)		3.5
		(0.4)

		(0.4)
Comprehensive income	Comprehensive income	$	34.8	$	32.5	$	131.0	$	94.7
Comprehensive income
Comprehensive income

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

Arcosa, Inc. and Subsidiaries

Consolidated Balance Sheets


	March 31, 2024						March 31, 2024	December 31, 2023
	(unaudited)
		September 30, 2023		December 31, 2022
		(unaudited)
		(in millions)				(in millions)
ASSETS	ASSETS
Current assets:	Current assets:
Current assets:
Current assets:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents	$	155.3	$	160.4

Receivables, net of allowance	Receivables, net of allowance	389.6		334.2
Receivables, net of allowance
Receivables, net of allowance

Inventories:	Inventories:
Inventories:
Inventories:
Raw materials and supplies
Raw materials and supplies
Raw materials and supplies	Raw materials and supplies	173.3		126.3
Work in process	Work in process	54.1		59.2
Finished goods	Finished goods	133.8		130.3
	404.0
		361.2		315.8

Other
Other
Other	Other	45.4		46.4
Total current assets	Total current assets	951.5		856.8

Property, plant, and equipment, net

Property, plant, and equipment, net

Property, plant, and equipment, net	Property, plant, and equipment, net	1,254.6		1,199.6
Goodwill	Goodwill	966.6		958.5
Intangibles, net	Intangibles, net	247.0		256.1
Deferred income taxes	Deferred income taxes	9.8		9.6
Other assets	Other assets	60.1		60.0
		$	3,489.6	$	3,340.6
	$
LIABILITIES AND STOCKHOLDERS' EQUITY	LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:	Current liabilities:
Current liabilities:
Current liabilities:
Accounts payable
Accounts payable
Accounts payable	Accounts payable	$	244.8	$	190.7
Accrued liabilities	Accrued liabilities	121.7		121.8
Advance billings	Advance billings	31.8		40.5

Current portion of long-term debt	Current portion of long-term debt	6.8		14.7

Current portion of long-term debt

Current portion of long-term debt
Total current liabilities	Total current liabilities	405.1		367.7

Debt	Debt	503.4		535.9
Debt
Debt
Deferred income taxes	Deferred income taxes	193.3		175.6
Other liabilities	Other liabilities	72.5		77.0
		1,174.3		1,156.2
	1,294.3

Stockholders’ equity:	Stockholders’ equity:

Stockholders’ equity:

Stockholders’ equity:

Common stock – 200.0 shares authorized

Common stock – 200.0 shares authorized

Common stock – 200.0 shares authorized	Common stock – 200.0 shares authorized	0.5		0.5
Capital in excess of par value	Capital in excess of par value	1,691.5		1,684.1
Retained earnings	Retained earnings	640.3		515.5
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(16.8)		(15.7)
Treasury stock	Treasury stock	(0.2)		—
		2,315.3		2,184.4
		$	3,489.6	$	3,340.6
	2,373.8
	$

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

Arcosa, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)


							Three Months Ended March 31,
							2024	2023
		Nine Months Ended September 30,
		2023		2022

		(in millions)				(in millions)
Operating activities:	Operating activities:
Net income	Net income	$	132.1	$	91.2
Net income
Net income
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, depletion, and amortization	Depreciation, depletion, and amortization	118.8		116.9

Depreciation, depletion, and amortization

Depreciation, depletion, and amortization

Stock-based compensation expense
Stock-based compensation expense
Stock-based compensation expense	Stock-based compensation expense	18.3		15.5

Provision for deferred income taxes
Provision for deferred income taxes
Provision for deferred income taxes	Provision for deferred income taxes	14.0		19.7
Gains on disposition of property, plant, equipment, and other assets	Gains on disposition of property, plant, equipment, and other assets	(25.8)		(6.5)
Gain on sale of storage tanks business	Gain on sale of storage tanks business	(6.4)		—

(Increase) decrease in other assets	(Increase) decrease in other assets	(3.5)		2.3
(Increase) decrease in other assets
(Increase) decrease in other assets
Increase (decrease) in other liabilities	Increase (decrease) in other liabilities	(6.2)		(18.7)
Other	Other	1.3		(3.6)
Changes in current assets and liabilities:	Changes in current assets and liabilities:
(Increase) decrease in receivables
(Increase) decrease in receivables
(Increase) decrease in receivables	(Increase) decrease in receivables	(34.6)		(52.0)
(Increase) decrease in inventories	(Increase) decrease in inventories	(40.4)		(39.1)
(Increase) decrease in other current assets	(Increase) decrease in other current assets	1.0		(3.0)
Increase (decrease) in accounts payable	Increase (decrease) in accounts payable	49.5		57.9
Increase (decrease) in advance billings	Increase (decrease) in advance billings	(4.1)		(2.6)
Increase (decrease) in accrued liabilities	Increase (decrease) in accrued liabilities	(15.2)		4.6

Net cash provided by operating activities	Net cash provided by operating activities	198.8		182.6

Net cash provided by operating activities

Net cash provided by operating activities

Investing activities:	Investing activities:
Investing activities:
Investing activities:

Proceeds from disposition of property, plant, equipment, and other assets

Proceeds from disposition of property, plant, equipment, and other assets

Proceeds from disposition of property, plant, equipment, and other assets	Proceeds from disposition of property, plant, equipment, and other assets	30.1		31.5
Proceeds from sale of storage tanks business	Proceeds from sale of storage tanks business	2.0		—
Capital expenditures	Capital expenditures	(144.8)		(85.9)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(18.8)		(75.1)

Net cash required by investing activities	Net cash required by investing activities	(131.5)		(129.5)

Net cash required by investing activities

Net cash required by investing activities

Financing activities:
Financing activities:
Financing activities:	Financing activities:

Payments to retire debt	Payments to retire debt	(142.0)		(59.8)

Payments to retire debt

Payments to retire debt
Proceeds from issuance of debt	Proceeds from issuance of debt	100.0		80.0
Shares repurchased		—		(15.0)

Dividends paid to common stockholders
Dividends paid to common stockholders
Dividends paid to common stockholders	Dividends paid to common stockholders	(7.3)		(7.4)
Purchase of shares to satisfy employee tax on vested stock	Purchase of shares to satisfy employee tax on vested stock	(11.1)		(9.8)

Holdback payment from acquisition		(10.0)		—

Debt issuance costs		(2.0)		—

Net cash required by financing activities		(72.4)		(12.0)

Net cash provided (required) by financing activities

Net cash provided (required) by financing activities

Net cash provided (required) by financing activities
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	(5.1)		41.1
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	160.4		72.9
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	155.3	$	114.0

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

Arcosa, Inc. and Subsidiaries

Consolidated Statements of 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		Total Stockholders’ Equity
			(in millions, except par value)
Balances at June 30, 2022				48.9		$	0.5			$	1,703.1			$	333.7			$	(16.3)		(0.5)			$	(25.0)	$	1,996.0
				Common Stock
				Common Stock
				Common Stock																								Capital in Excess of Par Value	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Total Stockholders’ Equity
		Shares
			(in millions, except par value)
			(in millions, except par value)
			(in millions, except par value)
Balances at December 31, 2022
Net income	Net income			—		—		—				32.0				—				—		—		32.0
Other comprehensive income	Other comprehensive income			—		—		—				—				0.5				—		—		0.5
Cash dividends on common stock	Cash dividends on common stock			—		—		—				(2.4)				—				—		—		(2.4)
Restricted shares, net	Restricted shares, net			—		—		5.5				—				—				—		(0.3)		5.2

Balances at September 30, 2022				48.9		$	0.5	$	1,708.6			$	363.3			$	(15.8)			(0.5)		$	(25.3)	$	2,031.3
Balances at March 31, 2023

Balances at June 30, 2023				48.8		$	0.5	$	1,685.6			$	607.3			$	(16.1)			—		$	—	$	2,277.3
Balances at March 31, 2023

Balances at March 31, 2023

Balances at December 31, 2023

Balances at December 31, 2023

Balances at December 31, 2023
Net income	Net income			—		—		—				35.5				—				—		—		35.5
Other comprehensive income	Other comprehensive income			—		—		—				—				(0.7)				—		—		(0.7)
Cash dividends on common stock	Cash dividends on common stock			—		—		—				(2.5)				—				—		—		(2.5)
Restricted shares, net	Restricted shares, net			—		—		5.9				—				—				—		(0.2)		5.7

Balances at September 30, 2023				48.8		$	0.5	$	1,691.5			$	640.3			$	(16.8)			—		$	(0.2)	$	2,315.3
Balances at March 31, 2024

Balances at December 31, 2021				48.3		$	0.5	$	1,692.6			$	279.5			$	(19.3)			—		$	—	$	1,953.3
Net income				—		—		—				91.2				—				—		—		91.2
Other comprehensive income				—		—		—				—				3.5				—		—		3.5
Cash dividends on common stock				—		—		—				(7.4)				—				—		—		(7.4)
Restricted shares, net				0.6		—		16.0				—				—				(0.2)		(10.3)		5.7
Shares repurchased				—		—		—				—				—				(0.3)		(15.0)		(15.0)
Balances at March 31, 2024

Balances at September 30, 2022				48.9		$	0.5	$	1,708.6			$	363.3			$	(15.8)			(0.5)		$	(25.3)	$	2,031.3
Balances at March 31, 2024

Balances at December 31, 2022				48.4		$	0.5	$	1,684.1			$	515.5			$	(15.7)			—		$	—	$	2,184.4
Net income				—		—		—				132.1				—				—		—		132.1
Other comprehensive income				—		—		—				—				(1.1)				—		—		(1.1)
Cash dividends on common stock				—		—		—				(7.3)				—				—		—		(7.3)
Restricted shares, net				0.5		—		19.0				—				—				(0.1)		(11.8)		7.2

Retirement of treasury stock				(0.1)		—		(11.6)				—				—				0.1		11.6		—

Balances at September 30, 2023				48.8		$	0.5	$	1,691.5			$	640.3			$	(16.8)			—		$	(0.2)	$	2,315.3

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

Arcosa, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited)

Note 1. Overview and Summary of Significant Accounting Policies

Basis of Presentation

Arcosa, Inc. and its consolidated subsidiaries (“Arcosa,” the “Company,” “we,” or “our”), headquartered in Dallas, Texas, is a provider of infrastructure-related products and solutions with leading ~~brands serving~~positions in construction, engineered structures, and transportation markets in North America. Arcosa is a Delaware corporation and was incorporated in 2018 as an independent, publicly-traded company, listed on the New York Stock Exchange.

The accompanying Consolidated Financial Statements are unaudited and have been prepared from the books and records of Arcosa, Inc. and its consolidated subsidiaries. All normal and recurring adjustments necessary for a fair presentation of the financial position of the Company and the results of operations, comprehensive income/loss, and cash flows have been made in conformity with accounting principles generally accepted 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 three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 may not be indicative of Arcosa's expected business, financial condition, and results of operations for the year ending December 31, ~~2023.~~2024.

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 Consolidated Financial Statements of the Company included in its Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

Stockholders' Equity

In December 2022, the Company’s Board of Directors (the ~~“Board of Directors”~~“Board") authorized a new $50.0 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 ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, the Company did not repurchase any ~~shares, leaving~~shares. As of March 31, 2024, the ~~full amount~~Company had a remaining authorization of $36.2 million under the ~~$50.0 million authorization available as of September 30, 2023.~~program.

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 4 Segment Information.

Construction Products

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

Engineered Structures

Within the Engineered Structures segment, revenue is recognized for ~~our~~ wind ~~tower~~towers and certain utility ~~structure businesses~~structures 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. 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 ~~September 30, 2023,~~March 31, 2024, we had a contract asset of ~~$58.9~~$56.7 million related to these contracts, compared to ~~$77.5~~$66.8 million as of December 31, ~~2022,~~2023, which is included in receivables, net of allowance, within the Consolidated Balance Sheets. The decrease in the contract asset is attributed to timing of deliveries of finished structures to customers during the period. 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

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

Table of Contents

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, 2023~~March 31, 2024 and the percentage of the outstanding performance obligations as of ~~September 30, 2023~~March 31, 2024 expected to be delivered during the remainder of ~~2023:~~2024:

Unsatisfied performance obligations as of March 31, 2024

Total
Amount

Unsatisfied performance obligations as of September 30, 2023

Total
Amount

Percent expected to be delivered in 2023

(in millions)

Engineered Structures:

Utility, wind, and related structures

1,450.8

Transportation Products:

Inland barges

240.4

Inland barges

Of the remaining unsatisfied performance obligations for utility, wind, and related structures, ~~33%~~29% are expected to be delivered during ~~2024~~2025 with the remainder expected to be delivered through 2028. All of the remaining unsatisfied performance obligations for inland barges are expected to be delivered during ~~2024.~~2025.

Income Taxes

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. 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 with control procedures that monitor the 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 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 ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 was not significant. The carrying values of cash, receivables, and accounts payable are considered to be representative of their respective fair values.

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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 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~~When derivative instruments are in place, the Company monitors its ~~derivative~~ positions and the credit ratings of its counterparties ~~and does not anticipate losses~~to mitigate the risk of loss due to counterparties' non-performance.

Recent Accounting Pronouncements

Recently adopted accounting pronouncements

Effective ~~as of~~ January 1, ~~2023,~~2024, the Company adopted Accounting Standards Update No. ~~2021-08, “Business Combinations~~2023-07, “Segment Reporting (Topic ~~805)~~280): ~~Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”,~~Improvements to Reportable Segment Disclosures” (“ASU ~~2021-08”~~2023-07”), which ~~requires that an acquirer recognize~~is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The Company will adopt additional disclosure requirements within its annual reporting for the year ending December 31, 2024 and ~~measure contract assets~~its interim reporting for the quarter ending March 31, 2025.

Recently issued accounting pronouncements not adopted as of March 31, 2024

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which is intended to improve the transparency of income tax disclosures by requiring 1) consistent categories and ~~contract liabilities acquired~~greater disaggregation of information in ~~a business combination in accordance~~the rate reconciliation and 2) income taxes paid disaggregated by jurisdiction. The standard also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 will become effective for public companies during annual reporting periods beginning after December 15, 2024, with ~~Topic 606. The~~early adoption permitted. Although ASU 2023-09 only modifies the Company's required income tax disclosures, the Company is currently evaluating the impact of adopting this guidance ~~did not have a material effect~~ on ~~the Company's~~its Consolidated Financial Statements.

Effective as of May 8, 2023, the Company adopted Accounting Standards Update No. 2020-04, “Reference Rate Reform”, (“ASU 2020-04”), which provides optional guidance for contract modifications, hedging accounting, and other transactions associated with the transition from reference rates that expired on June 30, 2023. ASU 2020-04 is effective for all entities upon issuance through December 31, 2024 as amended by ASU 2022-06. The adoption of this guidance did not have a material impact on the Company's Consolidated Financial Statements.

~~Reclassifications~~

~~Certain prior year balances have been reclassified in the Consolidated Financial Statements to conform with the 2023 presentation.~~

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Note 2. Acquisitions and Divestitures

2024 Acquisitions

In April 2024, we completed the acquisition of Ameron Pole Products LLC ("Ameron"), a leading manufacturer of highly engineered, premium concrete and steel poles for a broad range of infrastructure applications, including lighting, traffic, electric distribution, and small-cell telecom, for a total purchase price of $180.0 million. With operations in Alabama, California, and Oklahoma, Ameron will be included in our Engineered Structures segment. The acquisition was funded with $160.0 million of borrowings under our revolving credit facility and cash on hand.

2023 Acquisitions

On December 20, 2023, we completed the acquisition of certain assets and liabilities of Lake Point Holdings, LLC and Lake Point Restoration LLC, (collectively "Lake Point") a Florida based natural aggregates business in our Construction Products segment, for a total purchase price of $65.0 million. The acquisition was funded with $60.0 million of borrowings under our revolving credit facility and cash on hand. The acquisition was recorded as a business combination based on a valuation of the assets acquired 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 preliminary valuation resulted in the recognition of, among others, $13.2 million of property, plant, and equipment, $19.1 million of mineral reserves, $11.5 million of permits, and $15.4 million of goodwill in our Construction Products segment. We expect to complete our purchase price allocation as soon as reasonably possible, not to exceed one year from the acquisition date. Adjustments to the preliminary purchase price allocation could be material, particularly with respect to our preliminary estimates of mineral reserves, permits, and property, plant, and equipment.

In October 2023, we completed the acquisition of certain assets and liabilities of a ~~Florida based recycled aggregates business and a~~ Phoenix, Arizona based recycled aggregates business ~~both~~and the acquisition of ~~which will be included~~certain assets and liabilities of a Florida based recycled aggregates business in our Construction Products segment. The purchase ~~prices~~price of these acquisitions were not significant.

In September 2023, we completed the acquisition of certain assets and liabilities of a Houston, Texas based stabilized sand producer 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 excavation products business in our Construction Products segment. In February 2023, we completed the acquisition of certain assets and liabilities of a Phoenix, Arizona based recycled aggregates business in our Construction Products segment. ~~In March 2023, we completed the stock acquisition of a Houston, Texas based shoring, trench, and excavation products business in our Construction Products segment.~~ The purchase prices of these acquisitions were not significant.

~~2022 Acquisitions~~Divestitures

~~In May 2022, we~~There were no divestitures completed during 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 valuation of the assets acquiredthree months ended March 31, 2024 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.2023.

1011

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~~Divestitures~~

~~There were no divestitures closed during the three and nine months ended September 30, 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 sale resulted in a pre-tax gain of $189.0 million recognized during the year ended December 31, 2022. An additional gain of $6.4 million was recognized during the nine months ended September 30, 2023, primarily due to the resolution of certain contingencies from the sale. The storage tanks business, historically reported within the Engineered Structures segment as continuing operations until the date of sale, 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 for the storage tanks business were $65.8 million and $187.6 million, respectively, for the three and nine months ended September 30, 2022. Operating profit for the storage tanks business was $16.6 million and $40.8 million, respectively, for the three and nine months ended September 30, 2022.

~~Other~~

In June 2023, the Company settled a $15.0 million holdback obligation from the 2021 acquisition of Southwest Rock Products, LLC upon the extension of a certain mineral reserve lease. Based on final negotiations with the seller, the holdback was settled for $10.0 million and paid in June 2023. The $5.0 million difference between the settlement amount and the amount accrued at the time of acquisition was recorded as a reduction in cost of revenues in the Consolidated Statement of Operations.

Note 3. Fair Value Accounting

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


		Fair Value Measurement as of September 30, 2023									Fair Value Measurement as of March 31, 2024
		Level 1		Level 2		Level 3		Total			Level 1	Level 2	Level 3	Total

		(in millions)
		(in millions)
		(in millions)
		(in millions)
Assets:	Assets:
Cash equivalents		$	40.0	$	—	$	—	$	40.0
Cash equivalents(1)
Cash equivalents(1)
Cash equivalents(1)

Interest rate hedge(1)		—		0.5		—		0.5

Total assets

Total assets

Total assets	Total assets	$	40.0	$	0.5	$	—	$	40.5

Liabilities:	Liabilities:
Liabilities:
Liabilities:

Contingent consideration(2)

Contingent consideration(2)

Contingent consideration(2)	Contingent consideration(2)	$	—	$	—	$	2.5	$	2.5
Total liabilities	Total liabilities	$	—	$	—	$	2.5	$	2.5

		Fair Value Measurement as of December 31, 2022
		Level 1		Level 2		Level 3		Total
										Fair Value Measurement as of December 31, 2023
		(in millions)									Level 1	Level 2	Level 3	Total
Assets:
Cash equivalents		$	134.0	$	—	$	—	$	134.0

		(in millions)
		(in millions)
		(in millions)

Interest rate hedge(1)		—		1.8		—		1.8
Total assets		$	134.0	$	1.8	$	—	$	135.8

Liabilities:

Liabilities:

Liabilities:	Liabilities:

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

Contingent consideration(2)

Contingent consideration(2)
Total liabilities	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.

~~Table of Contents~~

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 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.

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 fair value is sensitive to changes in the forecast of sales and changes in discount rates and is reassessed quarterly based on assumptions used in our latest projections.

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Note 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 site support equipment, including trench shields and shoring products.

Engineered Structures. The Engineered Structures segment primarily manufactures and sells steel structures for infrastructure businesses, including 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 manufactured storage and distribution 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 inland barges, fiberglass barge covers, winches, marine hardware, and steel components for railcars and other transportation and industrial equipment.

The financial information for these segments is shown in the tables below. We operate principally in North America.

~~Table of Contents~~


	Three Months Ended March 31,														Three Months Ended March 31,
	Revenues												Revenues			Operating Profit (Loss)
		Three Months Ended September 30,									2024	2023		2024			2023
		Revenues				Operating Profit (Loss)
		2023		2022		2023		2022

		(in millions)								(in millions)
Aggregates and specialty materials	Aggregates and specialty materials	$	227.8	$	216.8
Construction site support	Construction site support	34.3		27.4
Construction site support
Construction site support
Construction Products
Construction Products
Construction Products	Construction Products	262.1		244.2		$	30.3	$	27.6

Utility, wind, and related structures	Utility, wind, and related structures	222.5		211.2
Storage tanks		—		65.8
Utility, wind, and related structures
Utility, wind, and related structures

Engineered Structures

Engineered Structures

Engineered Structures	Engineered Structures	222.5		277.0		18.7		37.1

Inland barges	Inland barges	67.3		50.9
Inland barges
Inland barges
Steel components	Steel components	39.8		31.8
Steel components
Steel components
Transportation Products
Transportation Products
Transportation Products	Transportation Products	107.1		82.7		14.1		1.0

Segment Totals	Segment Totals	591.7		603.9		63.1		65.7

Segment Totals

Segment Totals
Corporate	Corporate	—		—		(14.7)		(16.7)

Consolidated Total
Consolidated Total
Consolidated Total	Consolidated Total	$	591.7	$	603.9	$	48.4	$	49.0

		Nine Months Ended September 30,
		Revenues				Operating Profit (Loss)
		2023		2022		2023		2022

		(in millions)
Aggregates and specialty materials		$	665.9	$	620.9
Construction site support		97.1		80.7
Construction Products		763.0		701.6		$	114.2	$	72.4

Utility, wind, and related structures		637.2		608.5
Storage tanks		—		187.6
Engineered Structures		637.2		796.1		70.3		106.9

Inland barges		207.9		151.7
Steel components		117.6		93.1
Transportation Products		325.5		244.8		35.8		7.2

Segment Totals		1,725.7		1,742.5		220.3		186.5
Corporate		—		—		(45.8)		(45.6)

Consolidated Total		$	1,725.7	$	1,742.5	$	174.5	$	140.9

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Note 5. Property, Plant, and Equipment

The following table summarizes the components of property, plant, and equipment as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023.


	March 31, 2024						March 31, 2024	December 31, 2023

		September 30, 2023		December 31, 2022

		(in millions)				(in millions)
Land	Land	$	140.1	$	138.7
Mineral reserves	Mineral reserves	517.3		506.3
Buildings and improvements	Buildings and improvements	327.4		308.3
Machinery and other	Machinery and other	1,052.1		973.9
Construction in progress	Construction in progress	118.9		83.7
		2,155.8		2,010.9
	2,319.7
Less accumulated depreciation and depletion	Less accumulated depreciation and depletion	(901.2)		(811.3)
		$	1,254.6	$	1,199.6
	$

Note 6. Goodwill and Other Intangible Assets

Goodwill

Goodwill by segment is as follows:


	March 31, 2024						March 31, 2024	December 31, 2023

		September 30, 2023		December 31, 2022

		(in millions)				(in millions)
Construction Products	Construction Products	$	492.0	$	483.9
Engineered Structures	Engineered Structures	437.6		437.6
Transportation Products	Transportation Products	37.0		37.0
		$	966.6	$	958.5
	$

The ~~increase~~decrease in Construction Products goodwill during the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 was primarily due to ~~acquisitions completed during the period and final~~ measurement period adjustments from the ~~acquisition of RAMCO.~~2023 acquisitions. See Note 2 Acquisitions and Divestitures.

Intangible Assets

Intangibles, net consisted of the following:


			March 31, 2024
			March 31, 2024
			March 31, 2024						December 31, 2023
			September 30, 2023		December 31, 2022

			(in millions)
			(in millions)
			(in millions)
			(in millions)
Intangibles with indefinite lives - Trademarks	Intangibles with indefinite lives - Trademarks		$	34.9	$	34.1

Intangibles with definite lives:	Intangibles with definite lives:
Intangibles with definite lives:
Intangibles with definite lives:
Customer relationships
Customer relationships
Customer relationships	Customer relationships		138.7		136.9			143.6		142.7
Permits	Permits		141.8		141.7		Permits		166.1		166.9
Other	Other		2.7		2.7		Other		2.3		2.3
			283.2		281.3
		312.0										312.0	311.9
Less accumulated amortization	Less accumulated amortization		(71.1)		(59.3)		Less accumulated amortization		(81.4)		(76.1)
			212.1		222.0
		230.6										230.6	235.8
Intangible assets, net	Intangible assets, net		$	247.0	$	256.1

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Note 7. Debt

The following table summarizes the components of debt as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022:~~2023:


	March 31, 2024						March 31, 2024	December 31, 2023

		September 30, 2023		December 31, 2022

		(in millions)				(in millions)
Revolving credit facility	Revolving credit facility	$	100.0	$	—
Term loan		—		136.8

Senior notes
Senior notes
Senior notes	Senior notes	400.0		400.0
Finance leases (see Note 8 Leases)	Finance leases (see Note 8 Leases)	14.8		19.1
		514.8		555.9
	611.4
Less: unamortized debt issuance costs	Less: unamortized debt issuance costs	(4.6)		(5.3)
Total debt	Total debt	$	510.2	$	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.

On August 23, 2023, ~~the Company~~we entered into a Second Amended and Restated Credit Agreement to increase ~~the~~our revolving credit facility from $500.0 million to $600.0 million, extend the maturity date of the revolving credit facility from January 2, 2025 to August 23, 2028, and refinance and repay in full the remaining balance of the term loan then outstanding under ~~the Amended and Restated Credit Agreement.~~our prior credit facility.

As of ~~September 30, 2023,~~March 31, 2024, we had ~~$100.0~~$200.0 million of outstanding loans borrowed under the revolving credit facility, ~~that were advanced to repay the term loan during the quarter,~~ and there were approximately $22.0 million of letters of credit issued, leaving ~~$478.0~~$378.0 million ~~available.~~available for borrowing. Of the outstanding letters of credit as of ~~September 30, 2023, all~~March 31, 2024, $21.4 million are expected to expire in ~~2024.~~2024, with the remainder in 2025. 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 are variable based on the daily simple or term Secured Overnight Financing Rate ("SOFR"), plus a 10-basis point credit spread adjustment, or an alternate base rate, in each case plus a margin for borrowing. 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 based on SOFR ranges from 1.25% to 2.00% and was set at 1.50% as of ~~September 30, 2023.~~March 31, 2024. The commitment fee rate ranges from 0.20% to 0.35% and was set at 0.25% at ~~September 30, 2023.~~March 31, 2024.

The Company's revolving credit facility requires the maintenance of certain ratios related to leverage and interest coverage. As of ~~September 30, 2023,~~March 31, 2024, we were in compliance with all such financial covenants. Borrowings under the revolving credit ~~agreement~~facility are guaranteed by certain wholly-owned subsidiaries of the Company.

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

~~During the three months ended September 30, 2023, the Company capitalized $2.0 million of debt issuance costs associated with the amendment and extension of the revolving credit facility.~~ As of ~~September 30, 2023,~~March 31, 2024, the Company had ~~$2.5~~$2.3 million of unamortized debt issuance costs related to the revolving credit facility, which are included in other assets on the Consolidated Balance Sheet.

~~Table~~In April 2024, we borrowed an additional $160.0 million under our revolving credit facility to fund, in part, the acquisition of ~~Contents~~

Ameron.

Senior Notes

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. 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 facility. The 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 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~~The Company has the option 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.

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The estimated fair value of the Notes as of ~~September 30, 2023~~March 31, 2024 was ~~$350.5~~$369.2 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 ~~September 30, 2023~~March 31, 2024 are as follows:


	2024														2024	2025	2026	2027	2028	Thereafter

		2023		2024		2025		2026		2027		Thereafter

		(in millions)												(in millions)
Revolving credit facility	Revolving credit facility	$	—	$	—	$	—	$	—	$	—	$	100.0

Senior notes	Senior notes	—		—		—		—		—		400.0
Senior notes
Senior notes

Interest rate hedges

In December 2018, the Company entered into a $100.0 million interest rate swap instrument, effective as of January 2, 2019, to reduce the effect of changes in the variable interest rates associated with the first $100.0 million of borrowings under the Company's committed credit facility. In conjunction with the replacement of LIBOR with SOFR as a benchmark for borrowings under the Amended and Restated Credit Agreement, on July 1, 2023 the swap instrument transitioned from LIBOR to SOFR. The instrument effectively fixed the SOFR component of borrowings under the revolving credit facility at a monthly rate of 2.71% until such instrument's termination. ~~As of September 30, 2023, the Company has recorded an asset of $0.5 million for the fair value of the instrument, all of which is recorded in accumulated other comprehensive loss.~~ The interest rate swap instrument expired in October 2023. ~~See Note 3 Fair Value Accounting.~~

Note 8. Leases

We have 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 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.

~~Table of Contents~~

Future minimum lease payments for operating and finance lease obligations as of ~~September 30, 2023~~March 31, 2024 consisted of the following:


		Operating Leases		Finance Leases
		(in millions)
2023 (remaining)		$	2.4	$	1.8
2024		9.0		7.1
		Operating Leases
		Operating Leases
		Operating Leases
		(in millions)
		(in millions)
		(in millions)
2024 (remaining)
2025
2025
2025	2025	8.0		5.0
2026	2026	6.1		1.3
2026
2026
2027	2027	4.0		0.2
2027
2027
2028
2028
2028
Thereafter
Thereafter
Thereafter	Thereafter	11.6		—
Total undiscounted future minimum lease obligations	Total undiscounted future minimum lease obligations	41.1		15.4
Total undiscounted future minimum lease obligations
Total undiscounted future minimum lease obligations
Less imputed interest	Less imputed interest	(3.1)		(0.6)
Less imputed interest
Less imputed interest
Present value of net minimum lease obligations
Present value of net minimum lease obligations
Present value of net minimum lease obligations	Present value of net minimum lease obligations	$	38.0	$	14.8

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The following table summarizes our operating and finance leases and their classification within the Consolidated Balance Sheet.

March 31,
2024

December 31,
2023

September 30,
2023

December 31,
2022

(in millions)

Assets

Operating - Other assets

35.9

33.9

Finance - Property, plant, and equipment, net

17.7

22.4

Total lease assets

53.6

56.3

Liabilities

Current

Operating - Accrued liabilities

8.2

6.7

Finance - Current portion of long-term debt

6.8

6.3

Non-current

Operating - Other liabilities

29.8

29.9

Operating - Other liabilities

Finance - Debt

8.0

12.8

Total lease liabilities

52.8

55.7

Note 9. Other, Net

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









		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022

		(in millions)								(in millions)
Interest income	Interest income	$	(1.7)	$	—	$	(4.3)	$	(0.1)
Foreign currency exchange transactions	Foreign currency exchange transactions	0.4		—		(1.3)		1.5
Foreign currency exchange transactions
Foreign currency exchange transactions
Other
Other
Other	Other	—		(0.2)		(0.2)		(0.3)
Other, net (income) expense	Other, net (income) expense	$	(1.3)	$	(0.2)	$	(5.8)	$	1.1
Other, net (income) expense
Other, net (income) expense

~~Table of Contents~~

Note 10. Income Taxes

For interim income tax reporting, we estimate our annual effective tax rate and apply it to our ~~year to date~~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 interim period in which they occur. We have open tax years from ~~2015~~2014 to 2023 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 on 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 and nine months ended September 30, 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 and nine months ended September 30, 2023, the Company has recognized $7.6 million and $19.7 million, respectively, in AMP tax credits for wind towers produced and sold in 2023 which are included as a reduction to cost of revenues 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.

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 and nine months ended September 30, 2023, and continue to evaluate the impact of these tax law changes on future periods.

Our effective tax rates of ~~17.4%~~17.1% and ~~17.1%~~20.3% for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, respectively, differed from the U.S. federal statutory rate of 21.0% due to ~~AMP~~Advanced Manufacturing Production ("AMP") tax credits, tax effects of foreign currency translations, compensation-related items, state income taxes, prior year true-ups, and statutory depletion deductions. For the three and nine months ended September 30, 2022, the effective tax rates of 21.2% and 21.6%, respectively, differed from the U.S. federal statutory rate of 21.0% due to state income taxes, compensation-related items, and foreign disallowed deductions, offset by benefits from statutory depletion deductions.

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Note 11. Employee Retirement Plans

Total employee retirement plan expense, which includes related administrative expenses, is as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
		(in millions)
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
		(in millions)
		(in millions)
		(in millions)
Defined contribution plans	Defined contribution plans	$	3.9	$	3.4	$	11.6	$	10.2
Multiemployer plan	Multiemployer plan	0.4		0.4		1.2		1.2
		$	4.3	$	3.8	$	12.8	$	11.4
Multiemployer plan
Multiemployer plan
		$
		$
		$

The Company contributes to a multiemployer defined benefit plan under the terms of a collective-bargaining agreement that covers certain union-represented employees at one of the facilities of Meyer Utility Structures, a subsidiary of Arcosa. The Company contributed $0.4 million ~~and $1.1 million~~ to the multiemployer plan for the three ~~and nine~~ months ended ~~September 30, 2023, respectively. The Company contributed $0.4 million~~March 31, 2024 and ~~$1.2 million to the multiemployer plan for the three and nine months ended September 30, 2022, respectively.~~2023. Total contributions to the multiemployer plan for ~~2023~~2024 are expected to be approximately ~~$1.5~~$1.7 million.

~~Table of Contents~~

Note 12. Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss for the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~ are as follows:


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

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

			(in millions)						(in millions)
Balances at December 31, 2021			$	(16.3)	$	(3.0)	$	(19.3)
Other comprehensive income (loss), net of tax, before reclassifications			(0.6)		3.2		2.6
Amounts reclassified from accumulated other comprehensive loss, net of tax expense (benefit) of $0.0, ($0.3), and ($0.3)			—		0.9		0.9
Other comprehensive income (loss)			(0.6)		4.1		3.5
Balances at September 30, 2022			$	(16.9)	$	1.1	$	(15.8)

Balances at December 31, 2022	Balances at December 31, 2022		$	(17.0)	$	1.3	$	(15.7)
Other comprehensive income (loss), net of tax, before reclassifications	Other comprehensive income (loss), net of tax, before reclassifications		0.1		0.2		0.3
Amounts reclassified from accumulated other comprehensive loss, net of tax expense (benefit) of $0.0, $0.4, and $0.4			—		(1.4)		(1.4)
Amounts reclassified from accumulated other comprehensive loss, net of tax expense (benefit) of $0.0, $0.1, and $0.1
Other comprehensive income (loss)	Other comprehensive income (loss)		0.1		(1.2)		(1.1)
Balances at September 30, 2023			$	(16.9)	$	0.1	$	(16.8)
Balances at March 31, 2023

Balances at December 31, 2023
Balances at December 31, 2023
Balances at December 31, 2023
Other comprehensive income (loss), net of tax, before reclassifications
Amounts reclassified from accumulated other comprehensive loss, net of tax expense (benefit) of $0.0, $0.0, and $0.0
Other comprehensive income (loss)
Balances at March 31, 2024

Note 13. Stock-Based Compensation

Stock-based compensation totaled approximately ~~$5.7~~$6.7 million and ~~$18.3~~$5.5 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~respectively. Stock-based compensation totaled approximately $5.4 million and $15.5 million for the three and nine months ended September 30, 2022,~~ respectively.

1918

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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 ~~1.1~~1.2 million and 1.3 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~respectively. Total weighted average restricted shares were 1.4 million and 1.5 million for the three and nine months ended September 30, 2022,~~ respectively.

The computation of basic and diluted earnings per share follows.


		Three Months Ended September 30, 2023					Three Months Ended September 30, 2022					Three Months Ended March 31, 2024			Three Months Ended March 31, 2023
		Income (Loss)		Average Shares	EPS		Income (Loss)		Average Shares	EPS		Income (Loss)	Average Shares	EPS		Income (Loss)	Average Shares	EPS

		(in millions, except per share amounts)
		(in millions, except per share amounts)
		(in millions, except per share amounts)
		(in millions, except per share amounts)
Net income	Net income	$	35.5				$	32.0
Unvested restricted share participation	Unvested restricted share participation	(0.1)					(0.1)
Unvested restricted share participation
Unvested restricted share participation
Net income per common share – basic
Net income per common share – basic
Net income per common share – basic	Net income per common share – basic	35.4		48.7	$	0.73	31.9		48.3	$	0.66
Effect of dilutive securities:	Effect of dilutive securities:
Nonparticipating unvested restricted shares	Nonparticipating unvested restricted shares	—		0.1			—		0.2
Nonparticipating unvested restricted shares
Nonparticipating unvested restricted shares
Net income per common share – diluted
Net income per common share – diluted
Net income per common share – diluted	Net income per common share – diluted	$	35.4	48.8	$	0.72	$	31.9	48.5	$	0.66

		Nine Months Ended September 30, 2023					Nine Months Ended September 30, 2022
		Income (Loss)		Average Shares	EPS		Income (Loss)		Average Shares	EPS

		(in millions, except per share amounts)
Net income		$	132.1				$	91.2
Unvested restricted share participation		(0.5)					(0.4)
Net income per common share – basic		131.6		48.5	$	2.71	90.8		48.2	$	1.88
Effect of dilutive securities:
Nonparticipating unvested restricted shares		—		0.2			—		0.3
Net income per common share – diluted		$	131.6	48.7	$	2.70	$	90.8	48.5	$	1.87

Note 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, employment and/or workplace-related matters, and various governmental regulations. At ~~September 30, 2023,~~March 31, 2024, the reasonably possible loss for such matters, taking into consideration our rights in indemnity and recourse to third parties is approximately ~~$1.1~~$1.2 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, 2023,~~March 31, 2024, the Company accrued $1.5 million in liabilities for these contingencies, which are recorded in accrued liabilities in the accompanying 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 certain remedial orders and federal, state, local, and foreign laws and regulations relating to the environment. Included in the balance above, the Company has reserved ~~$0.4~~$0.3 million of liabilities, as of ~~September 30, 2023,~~March 31, 2024, for environmental liabilities related to which it has also recorded a ~~$0.4~~$0.3 million indemnification asset from third parties, to cover our probable and estimable liabilities with respect to the investigations, assessments, and remedial responses to such environmental matters. The Company has concluded that these liabilities are subject to and will be covered by indemnification obligations of third parties, however there can be no assurance of collection.

~~Table of Contents~~

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, including those related to the environment 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.

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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 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 Overview

•Results of Operations

•Liquidity and Capital Resources

•Recent Accounting Pronouncements

•Forward-Looking Statements

Our MD&A should be read in conjunction with the Consolidated Financial Statements of Arcosa, Inc. and its consolidated subsidiaries (“Arcosa,” “Company,” “we,” or “our”) and related Notes in Part I, Item 1 of this Quarterly Report on Form 10-Q and the 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, ~~2022~~2023 (“~~2022~~2023 Annual Report on Form 10-K”).

Company Overview

Arcosa, headquartered in Dallas, Texas, is a provider of infrastructure-related products and solutions with leading positions in construction, engineered structures, and transportation markets in North America. Arcosa is a Delaware corporation and was incorporated in 2018 as an independent, publicly-traded company, listed on the 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 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 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 have a material impact on the productivity of our plants.

The preparation of the Company's Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses 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 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 operations, liquidity, or capital resources.

Market Outlook

•Within our Construction Products segment, market demand remains healthy overall when seasonal weather conditions have been 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 overall demand as leading economic indicators indicate the potential for an economic slowdown over the next twelve months.~~increases.

~~Table of Contents~~

•Within our Engineered Structures segment, our backlog as of ~~September 30, 2023~~March 31, 2024 provides good production visibility for the remainder of ~~2023.~~2024. 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 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"~~(“AMP”) tax credits for companies that domestically manufacture and sell clean energy equipment in the U.S., is a significant catalyst for our wind towers business. As demonstrated by more than $1.1 billion of new orders for delivery through 2028, which we have received since the passage of the IRA, our wind ~~tower~~towers 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 open~~are opening a new plant in New Mexico ~~with production at~~and expect to start delivering towers from this facility ~~expected to begin~~ in ~~mid-2024. We anticipate 2023 will be a transition year as new wind projects ramp up and expect a multi-year rebound in volumes beginning in~~the second quarter of 2024.

•Within our Transportation Products segment, our backlog for inland barges as of ~~September 30, 2023~~March 31, 2024 was ~~$240.4~~$294.4 million, up ~~87.0%~~16% compared to ~~September 30, 2022.~~December 31, 2023, and extends into 2025. Our customers remain committed to taking delivery of these orders. ~~Barge~~While still recovering from cyclical lows, our backlog at the end of the first quarter is near its highest level since the onset of the COVID-19 pandemic when order levels fell sharply ~~at the onset of the pandemic~~ and ~~ensuing~~have remained low due to persistently high steel ~~prices further negatively impacted demand. In 2022, we reduced capacity in our two active barge operating plants and completed~~prices. Over this time, customer inquiries have remained healthy, particularly for dry barges, as the idling of our Louisiana facility in the fourth quarter of 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. We have been successful in filling orders when we can strategically source steel. As a result, ~~order inquiries have been strong,~~we received orders of $120 million in the first quarter for both hopper and ~~our backlog extends into mid-2024.~~tank barges. 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~~has stabilized as the near-term outlook for the new railcar market indicates ~~a stable level of replacement~~replacement-level demand.

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Executive Overview

Recent Developments

In April 2024, we completed the acquisition of Ameron Pole Products, LLC ("Ameron"), a leading manufacturer of highly engineered, premium concrete and steel poles for a broad range of infrastructure applications, including lighting, traffic, electric distribution, and small-cell telecom, for a total purchase price of $180.0 million. With operations in Alabama, California, and Oklahoma, Ameron will be included in our Engineered Structures segment. The acquisition was funded with $160.0 million of borrowings under our revolving credit facility and cash on hand.

Financial Operations and Highlights

•Revenues for the three ~~and nine~~ months ended ~~September 30, 2023 decreased by 2.0% and 1.0%~~March 31, 2024 increased 9.0% to ~~$591.7~~$598.6 million ~~and $1,725.7 million, respectively, from the same periods in 2022, as~~due to higher revenues in ~~Construction Products and Transportation Products were offset by lower revenues in Engineered Structures resulting from~~all three segments compared to the ~~divestiture of the storage tanks business on October 3, 2022.~~three months ended March 31, 2023.

•Operating profit for the three months ended ~~September 30, 2023~~March 31, 2024 totaled $53.4 million, a decrease of $21.7 million year-over-year. Excluding the $21.8 million gain on the sale of depleted land in the prior period, operating profit was ~~relatively~~roughly flat ~~at $48.4 million~~ as higher operating profit in Construction Products and Transportation Products was offset by lower operating profit in Engineered Structures primarily due to the storage tanks divestiture. For the nine months ended September 30, 2023, operating profit increased by $33.6 million to $174.5 million driven by increases in Construction Products and Transportation Products, partially supported by $22.6 million of asset sale gains recognized in Construction Products in the first quarter of 2023, which more than offset a $36.6 million decrease in operating profit in Engineered Structures largely due to the storage tanks divestiture.Structures.

•Selling, general, and administrative expenses increased 10.6% for the three months ended March 31, 2024 compared to the same period in 2023 due to increased headcount, additional costs from recently acquired businesses, and higher acquisition and divestiture-related expenses. As a percentage of revenues, selling, general, and administrative expenses ~~were 10.4% and 11.3%~~increased slightly to 11.5% for the three ~~and nine~~ months ended ~~September 30, 2023, respectively,~~March 31, 2024, compared to ~~11.2% and 11.3%~~11.4% for the same ~~periods~~period in 2022, respectively. Selling, general, and administrative expenses decreased by 9.6% and 1.1% for the three and nine months ended September 30, 2023, compared to the same periods in the prior year, largely due to the elimination of costs from the storage tanks business.2023.

•The effective tax rate for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 was ~~17.4% and~~ 17.1%, ~~respectively,~~ compared to ~~21.2% and 21.6%, respectively,~~20.3% for the same ~~periods~~period in ~~2022.~~2023. See Note 10 ofIncome Taxes to the ~~Notes to~~ Consolidated Financial Statements.

•Net income for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 was ~~$35.5~~$39.2 million, ~~and $132.1 million, respectively,~~ compared to ~~$32.0~~$55.7 million ~~and $91.2 million, respectively,~~ for the same ~~periods~~period in ~~2022.~~2023.

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

~~Table of Contents~~

Unsatisfied Performance Obligations (Backlog)

As of ~~September 30, 2023,~~March 31, 2024, December 31, ~~2022,~~2023, and ~~September 30, 2022,~~March 31, 2023, our unsatisfied performance obligations, or backlog, were as follows:

March 31,
2024

December 31,
2023

March 31,
2023

September 30,
2023

December 31,
2022

September 30,
2022

(in millions)

Engineered Structures:

Utility, wind, and related structures

1,450.8

671.3

370.4

Utility, wind, and related structures

Transportation Products:

Inland barges

240.4

225.1

128.9

Inland barges

Approximately ~~15%~~40% of the unsatisfied performance obligations for utility, wind, and related structures in our Engineered Structures segment are expected to be delivered during ~~the fourth quarter of 2023, 33%~~2024, approximately 29% are expected to be delivered during ~~2024~~2025 and the remainder are expected to be delivered through 2028. Approximately ~~26%~~73% of the unsatisfied performance obligations for inland barges in our Transportation Products segment are expected to be delivered during ~~the fourth quarter of 2023~~2024, and the remainder are expected to be delivered during ~~2024.~~2025.

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Results of Operations

Overall Summary

Revenues








		Three Months Ended September 30,							Nine Months Ended September 30,
		2023		2022		Percent Change			2023				2022				Percent Change
		(in millions)					(in millions)
Construction Products	Construction Products	$	262.1	$	244.2		7.3	%			$	763.0			$	701.6		8.8	%
Construction Products
Construction Products
Engineered Structures	Engineered Structures	222.5		277.0		(19.7)			637.2				796.1				(20.0)
Engineered Structures
Engineered Structures
Transportation Products
Transportation Products
Transportation Products	Transportation Products	107.1		82.7		29.5			325.5				244.8				33.0

Consolidated Total	Consolidated Total	$	591.7	$	603.9	(2.0)			$	1,725.7			$	1,742.5			(1.0)

Consolidated Total

Consolidated Total

~~2023~~Three Months Ended March 31, 2024 versus ~~2022~~Three Months Ended March 31, 2023

•Revenues ~~decreased by 2.0% and 1.0% during the three and nine months ended September 30, 2023, respectively, primarily due to the divestiture of the storage tanks business.~~increased 9.0%.

•Revenues from Construction Products increased primarily due to the contribution from recent acquisitions and higher pricing across ~~most of~~ our aggregates and specialty material ~~businesses and additional revenues from our recent trench shoring acquisition.~~businesses.

•Revenues from Engineered Structures ~~decreased~~increased primarily due to ~~the sale of~~increased volumes in our ~~storage tanks business.~~utility structures and wind towers businesses, partially offset by lower utility structures pricing due to product mix.

•Revenues from Transportation Products increased primarily due to higher volumes ~~in both inland barge~~ and ~~steel components.~~pricing for hopper barges.

~~Table of Contents~~

Operating Costs









		Three Months Ended September 30,							Nine Months Ended September 30,
		2023		2022		Percent Change			2023				2022				Percent Change

		(in millions)					(in millions)
Construction Products	Construction Products	$	231.8	$	216.6		7.0	%			$	648.8			$	629.2		3.1	%
Construction Products
Construction Products
Engineered Structures	Engineered Structures	203.8		239.9			(15.0)				566.9				689.2			(17.7)
Engineered Structures
Engineered Structures
Transportation Products
Transportation Products
Transportation Products	Transportation Products	93.0		81.7		13.8			289.7				237.6				21.9

Segment Totals before Corporate Expenses	Segment Totals before Corporate Expenses	528.6		538.2		(1.8)			1,505.4				1,556.0				(3.3)

Segment Totals before Corporate Expenses

Segment Totals before Corporate Expenses
Corporate
Corporate
Corporate	Corporate	14.7		16.7		(12.0)			45.8				45.6				0.4

Consolidated Total	Consolidated Total	$	543.3	$	554.9	(2.1)			$	1,551.2			$	1,601.6			(3.1)

Consolidated Total

Consolidated Total

Depreciation, depletion, and amortization(1)	Depreciation, depletion, and amortization(1)	$	40.5	$	39.6	2.3			$	118.8			$	116.9			1.6

Depreciation, depletion, and amortization(1)

Depreciation, depletion, and amortization(1)

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

~~2023~~Three Months Ended March 31, 2024 versus ~~2022~~Three Months Ended March 31, 2023

•Operating costs ~~decreased by 2.1% and 3.1% during~~increased 15.0%. A $21.8 million gain on the ~~three and nine months ended September 30, 2023, respectively.~~sale of depleted land was netted against operating costs in the prior period. Excluding this gain, operating costs increased 9.9%.

•~~Operating costs~~Cost of revenues for Construction Products increased primarily due to ~~additional~~increased costs from the recently acquired businesses. ~~Asset gains of $22.6 million recognized in the first quarter of 2023 from the sale of depleted land largely offset increased operating costs for the nine months ended September 30, 2023.~~

•~~Operating costs~~Cost of revenues for Engineered Structures ~~decreased primarily~~increased due to higher utility structure and wind tower volumes as well as additional costs incurred for the ~~impact~~startup of ~~the storage tanks divestiture.~~two new facilities.

•~~Operating costs~~Cost of revenues for Transportation Products increased primarily due to higher volumes in inland ~~barge and steel components.~~barge.

•Depreciation, depletion, and amortization ~~expense was relatively flat~~ increased 10.3%as ~~increases from~~a result of recent acquisitions and organic growth ~~investments were largely offset by the impact of the storage tanks divestiture.~~investments.

•Selling, general, and administrative expenses ~~decreased 9.6% and 1.1% for the three and nine months ended September 30, 2023, compared to the same periods in the prior year, largely~~increased 10.6% due to ~~the elimination of~~increased headcount, additional costs from ~~the storage tanks business.~~recently acquired businesses, and higher acquisition and divestiture-related expenses. As a percentage of revenues, selling, general, and administrative expenses ~~were 10.4% and 11.3% for the three and nine months ended September 30, 2023, respectively, compared~~increased slightly to ~~11.2% and 11.3% for the same periods in 2022, respectively.~~

~~Operating Profit (Loss)~~
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 Percent Change 2023 2022 Percent Change
(in millions) (in millions)
Construction Products $ 30.3 $ 27.6 9.8 % $ 114.2 $ 72.4 57.7 %
Engineered Structures 18.7 37.1 (49.6) 70.3 106.9 (34.2)
Transportation Products 14.1 1.0 1,310.0 35.8 7.2 397.2
Segment Totals before Corporate Expenses 63.1 65.7 (4.0) 220.3 186.5 18.1
Corporate (14.7) (16.7) (12.0) (45.8) (45.6) 0.4
Consolidated Total $ 48.4 $ 49.0 (1.2) $ 174.5 $ 140.9 23.8

~~2023 versus 2022~~

•~~Operating profit was relatively flat~~11.5% for the three months ended ~~September 30, 2023 and increased by 23.8%~~March 31, 2024, compared to 11.4% for the ~~nine month period.~~same period in 2023.

•Operating profit in Construction Products increased primarily due to higher pricing across the segment and increased volumes in shoring products. For the nine months ended September 30, 2023, the increase in operating profit was also due to the land sale gain and the reduction in a holdback obligation owed on a previous acquisition.

2522

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Operating Profit (Loss)


	Three Months Ended March 31,
	2024		2023		Percent Change
	(in millions)
Construction Products	$	28.8	$	49.5	(41.8)	%
Engineered Structures	26.3		29.9		(12.0)
Transportation Products	14.6		10.1		44.6

Segment Totals before Corporate Expenses	69.7		89.5		(22.1)
Corporate	(16.3)		(14.4)		13.2

Consolidated Total	$	53.4	$	75.1	(28.9)

Three Months Ended March 31, 2024 versus Three Months Ended March 31, 2023

•Operating profit decreased 28.9% largely due to a $21.8 million gain on the sale of depleted land in 2023. Excluding this gain, operating profit was flat.

•Operating profit in Construction Products decreased due to a decline in the gain recognized on long-lived assets, partially offset by the accretive impact of ~~the storage tanks divestiture, operating~~recently acquired businesses.

•Operating profit in Engineered Structures decreased ~~for the three and nine months ended September 30, 2023~~ due to lower ~~margins~~margin in our utility structures business driven by project mix and ~~a decline in volumes in our wind towers business, partially offset by~~additional costs incurred for the ~~recognition~~start up of ~~the AMP tax credits.~~two new facilities.

•Operating profit in Transportation Products increased ~~for the three and nine months ended September 30, 2023~~ driven by higher hopper barge volumes and improved ~~margins in both inland barge and steel components.~~

margins.

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

Other Income and Expense

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


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
		2023		2022		2023		2022		2024	2023
		(in millions)								(in millions)
Interest income	Interest income	$	(1.7)	$	—	$	(4.3)	$	(0.1)
Foreign currency exchange transactions	Foreign currency exchange transactions	0.4		—		(1.3)		1.5
Other	Other	—		(0.2)		(0.2)		(0.3)
Other, net (income) expense	Other, net (income) expense	$	(1.3)	$	(0.2)	$	(5.8)	$	1.1

Income 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, 2023~~March 31, 2024 was ~~17.4% and~~ 17.1%~~, respectively,~~ compared to ~~21.2% and 21.6%, respectively,~~20.3% for the same ~~periods~~period in ~~2022.~~2023. The decrease in the tax rate for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 is primarily due to AMP tax credits, excess tax benefits related to equity compensation, and reduced ~~foreign~~state income taxes, partially offset by increased ~~state income~~foreign taxes.

Our effective tax rate ~~reflects~~differs from the ~~Company's estimate for its~~federal tax rate of 21.0% due to AMP tax credits, tax effects of foreign currency translations, compensation-related items, state income ~~tax expense, excess tax benefits related to equity compensation,~~taxes, prior year true-ups, and ~~the impact of foreign tax benefits.~~statutory depletion deductions. See Note 10 ofIncome Taxes to the ~~Notes to~~ Consolidated Financial Statements for 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 and nine months ended September 30, 2023, and continue to evaluate the impact of these tax law changes on future periods.

2623

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Segment Discussion

Construction Products








		Three Months Ended September 30,						Nine Months Ended September 30,
		2023		2022		Percent		2023		2022		Percent
		($ in millions)				Change		($ in millions)				Change
Revenues:	Revenues:
Revenues:
Revenues:
Aggregates and specialty materials
Aggregates and specialty materials
Aggregates and specialty materials	Aggregates and specialty materials	$	227.8	$	216.8	5.1	%	$	665.9	$	620.9	7.2	%
Construction site support	Construction site support	34.3		27.4		25.2		97.1		80.7		20.3
Construction site support
Construction site support
Total revenues
Total revenues
Total revenues	Total revenues	262.1		244.2		7.3		763.0		701.6		8.8

Operating costs:	Operating costs:

Operating costs:

Operating costs:
Cost of revenues
Cost of revenues
Cost of revenues	Cost of revenues	209.2		193.1		8.3		593.6		557.1		6.6
Selling, general, and administrative expenses	Selling, general, and administrative expenses	25.2		25.4		(0.8)		81.0		76.6		5.7
Selling, general, and administrative expenses
Selling, general, and administrative expenses
Gain on disposition of property, plant, equipment, and other assets	Gain on disposition of property, plant, equipment, and other assets	(2.6)		(1.9)				(25.8)		(4.5)
Gain on disposition of property, plant, equipment, and other assets
Gain on disposition of property, plant, equipment, and other assets
Operating profit
Operating profit
Operating profit	Operating profit	$	30.3	$	27.6	9.8		$	114.2	$	72.4	57.7

Depreciation, depletion, and amortization(1)	Depreciation, depletion, and amortization(1)	$	28.4	$	26.3	8.0		$	83.1	$	77.2	7.6

Depreciation, depletion, and amortization(1)

Depreciation, depletion, and amortization(1)

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

Three Months Ended ~~September 30, 2023~~March 31, 2024 versus Three Months Ended ~~September 30, 2022~~March 31, 2023

•Revenues increased ~~7.3% primarily~~6.4% driven by recent acquisitions and higher organic revenues in our legacy operations. Recent acquisitions increased revenues approximately 4.5%. In our legacy operations, higher revenues resulted from increased pricing across ~~our product lines in~~ our aggregates and specialty materials businesses and higher organic volumes ~~of natural aggregates,~~in trench shoring, partially offset by lower recycled aggregate and specialty materials volumes. Revenues from our trench shoring business increased 25.2%, driven primarily by revenue from the acquisition completed in the first quarter of 2023 and higher organic volumes.freight revenues.

•Cost of revenues increased ~~8.3%~~8.4% primarily due to increased costs from the recently acquired ~~shoring business,~~businesses, including higher ~~volumes in natural aggregates,~~depreciation, depletion, and ~~operating inefficiencies in our specialty materials business.~~amortization expense and $1.2 million for the cost impact of the fair market value write-up of acquired inventory. As a percent of revenues, cost of revenues increased to ~~79.8%~~78.9% in the current period, compared to ~~79.1%~~77.5% in the prior period.

•Selling, general, and administrative expenses ~~were relatively flat as~~increased6.5%due to additional costs from recently acquired ~~businesses were offset by lower costs across our legacy~~ businesses. Selling, general, and administrative expenses ~~decreased~~ as a percentage of revenues ~~to 9.6%, compared to 10.4%~~was 11.1% in ~~the prior period.~~both periods.

•Operating profit decreased 41.8% primarily due to a $21.8 million gain on the sale of depleted land in the prior period. Excluding this gain, operating profit increased ~~9.8%, outpacing the increase in revenue,~~4.0% driven by ~~increased pricing across~~ the ~~segment, higher volumes in our natural aggregates~~accretive impact of recent acquisitions and ~~shoring businesses, partially offset by~~ operating ~~inefficiencies~~improvements in our specialty materials ~~business.~~business, partially offset by the fair value write-up of inventory from recent acquisitions.

•Depreciation, depletion, and amortization expense increased 11.9% primarily due to the fair market value write-up of long-lived assets from recent acquisitions and organic growth investments.

~~Nine Months Ended September 30, 2023 versus Nine Months Ended September 30, 2022~~

•Revenues increased 8.8% primarily driven by increased pricing across our product lines in our aggregates and specialty materials businesses and higher volumes of recycled aggregates, partially offset by lower natural aggregate and specialty materials volumes. Revenues from our trench shoring business increased 20.3% driven primarily by revenue from the acquisition completed in the first quarter of 2023 and higher organic volumes.

•Cost of revenues increased 6.6% due to higher recycled aggregates volumes, operating inefficiencies in our specialty materials business, and increased costs from the acquired shoring business. These costs were partially offset by lower natural aggregate and specialty materials volumes and a $5.0 million reduction in a holdback obligation owed on a previous acquisition. As a percent of revenues, cost of revenues decreased to 77.8% in the current period, compared to 79.4% in the prior period.

•Selling, general, and administrative expenses increased 5.7% primarily due to additional costs from acquired businesses. Selling, general, and administrative expenses decreased as a percentage of revenues to 10.6%, compared to 10.9% in the prior period.

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•Operating profit increased 57.7%, partially due to gains recognized on sales of depleted land. Excluding the gain, operating profit increased 30.2% driven by increased pricing across the segment, higher volumes in our recycled aggregates and shoring businesses, and the benefit recognized on a holdback obligation, partially offset by operating inefficiencies in our specialty materials business.

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

Engineered Structures








		Three Months Ended September 30,						Nine Months Ended September 30,
		2023		2022		Percent		2023		2022		Percent
		($ in millions)				Change		($ in millions)				Change
Revenues:	Revenues:
Revenues:
Revenues:
Utility, wind, and related structures	Utility, wind, and related structures	$	222.5	$	211.2	5.4	%	$	637.2	$	608.5	4.7	%
Storage tanks		—		65.8		(100.0)		—		187.6		(100.0)
Utility, wind, and related structures
Utility, wind, and related structures
Total revenues
Total revenues
Total revenues	Total revenues	222.5		277.0		(19.7)		637.2		796.1		(20.0)

Operating costs:	Operating costs:

Operating costs:

Operating costs:
Cost of revenues
Cost of revenues
Cost of revenues	Cost of revenues	188.2		219.3		(14.2)		524.9		633.2		(17.1)
Selling, general, and administrative expenses	Selling, general, and administrative expenses	15.6		20.4		(23.5)		48.4		58.0		(16.6)
Selling, general, and administrative expenses
Selling, general, and administrative expenses
Gain on sale of storage tanks business	Gain on sale of storage tanks business	—		—				(6.4)		—
Gain on disposition of property, plant, equipment, and other assets		—		0.2				—		(2.0)
Gain on sale of storage tanks business
Gain on sale of storage tanks business

Operating profit

Operating profit

Operating profit	Operating profit	$	18.7	$	37.1	(49.6)		$	70.3	$	106.9	(34.2)

Depreciation and amortization(1)	Depreciation and amortization(1)	$	6.7	$	8.1	(17.3)		$	19.7	$	24.1	(18.3)

Depreciation and amortization(1)

Depreciation and amortization(1)

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

Three Months Ended ~~September 30, 2023~~March 31, 2024 versus Three Months Ended ~~September 30, 2022~~March 31, 2023

•Revenues ~~decreased 19.7% resulting from the sale of our storage tanks business, which was completed in October 2022. Revenue from utility, wind, and related structures~~ increased ~~5.4%~~11.5% primarily due to increased volumes in our utility structures ~~business,~~and wind towers businesses, partially offset by lower utility structures pricing due to ~~product mix, and lower volumes in our wind towers business.~~project mix.

•Cost of revenues ~~decreased 14.2% largely~~increased 15.1% primarily due to ~~the elimination of costs from our storage tanks business.~~higher utility structures and wind towers volumes. Cost of revenues ~~from utility, wind, and related structures~~also increased approximately 4% due to ~~higher volumes in our~~additional expenses incurred related to the startup of two new facilities: a concrete utility structures ~~business,~~plant and a wind tower plant. The increase was partially offset by ~~lower volumes as well as~~higher AMP tax ~~credits recognized in our wind towers business.~~credits.

•Selling, general, and administrative expenses ~~decreased 23.5% largely due to the elimination of costs from our storage tanks business. Selling, general, and administrative expenses from utility, wind, and related structures decreased~~increased 17.1% primarily due to ~~lower compensation-related~~increased headcount and higher sales-related costs.

•~~The storage tanks business contributed $16.6 million to operating profit in~~During both periods presented, the prior period. Excluding the impact of the divestiture, operating profit declined due to lower margins in our utility structures business driven by project mix, negative foreign currency impacts, and reduced wind tower volumes, partially offset by $5.6 million of net benefitCompany recognized ~~from AMP tax credits in our wind towers business.~~

~~Nine Months Ended September 30, 2023 versus Nine Months Ended September 30, 2022~~

•Revenues decreased 20.0% primarily due to the decline in revenue from our divested storage tanks business. Revenue from utility, wind, and related structures increased 4.7% driven by higher volumes in our utility structures business, partially offset by lower utility structures pricing driven by product mix, and lower volumes in our wind towers business.

•Cost of revenues decreased 17.1% largely due to the elimination of costs from our storage tanks business. Cost of revenues from utility, wind, and related structures increased due to higher volumes in our utility structures business, partially offset by lower volumes and AMP tax credits recognized in our wind towers business.

~~Table of Contents~~

•Selling, general, and administrative expenses decreased 16.6% largely due to the elimination of costs from our storage tanks business. Selling, general, and administrative expenses from utility, wind, and related structures increased primarily due to higher compensation-related costs.

•~~The storage tanks business contributed $6.4 million in operating profit in the nine months ended September 30, 2023, related to~~ an additional gain on ~~sale recorded in~~ the ~~first quarter of 2023, compared to $40.8 million of operating profit in the prior year period, resulting in a net decrease of $34.4 million year-over-year. Excluding the impact~~sale of the ~~divestiture in both periods, operating~~storage tanks business, which was divested on October 3, 2022, related to the settlement of certain contingencies from the sale.

•Operating profit ~~declined~~decreased 12.0% primarily due to lower margins in our utility structures business driven by project mix and ~~decreased wind tower volumes, partially offset by $14.7 million of net benefit recognized from AMP tax credits in our wind towers business.~~additional startup costs.

•Depreciation and amortization expense increased primarily due to organic growth investments.

Unsatisfied Performance Obligations (Backlog)

As of ~~September 30, 2023,~~March 31, 2024, the backlog for utility, wind, and related structures was ~~$1,450.8~~$1,366.7 million, compared to ~~$671.3~~$1,367.5 million and ~~$370.4~~$1,531.4 million as of December 31, ~~2022~~2023 and ~~September 30, 2022,~~March 31, 2023, respectively. Approximately ~~15%~~40% of these unsatisfied performance obligations are expected to be delivered during ~~the year ending December 31, 2023,~~2024 , approximately ~~33%~~29% during ~~the year ending December 31, 2024, with~~2025, and the remainder are expected to be delivered through 2028.

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Transportation Products








		Three Months Ended September 30,						Nine Months Ended September 30,
		2023		2022		Percent		2023		2022		Percent
		($ in millions)				Change		($ in millions)				Change
Revenues:	Revenues:
Revenues:
Revenues:
Inland barges
Inland barges
Inland barges	Inland barges	$	67.3	$	50.9	32.2	%	$	207.9	$	151.7	37.0	%
Steel components	Steel components	39.8		31.8		25.2		117.6		93.1		26.3
Steel components
Steel components
Total revenues
Total revenues
Total revenues	Total revenues	107.1		82.7		29.5		325.5		244.8		33.0

Operating costs:	Operating costs:

Operating costs:

Operating costs:
Cost of revenues	Cost of revenues	87.2		76.4		14.1		270.4		221.1		22.3
Cost of revenues
Cost of revenues
Selling, general, and administrative expenses
Selling, general, and administrative expenses
Selling, general, and administrative expenses	Selling, general, and administrative expenses	5.8		5.3		9.4		19.3		16.5		17.0

Operating profit	Operating profit	$	14.1	$	1.0	1,310.0		$	35.8	$	7.2	397.2

Operating profit

Operating profit

Depreciation and amortization (1)	Depreciation and amortization (1)	$	4.1	$	3.9	5.1		$	12.1	$	11.8	2.5

Depreciation and amortization (1)

Depreciation and amortization (1)

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

Three Months Ended ~~September 30, 2023~~March 31, 2024 versus Three Months Ended ~~September 30, 2022~~March 31, 2023

•Revenues increased ~~29.5%~~9.9%. Inland barge revenues increased 17.0% primarily due to higher volumes and ~~improved~~ pricing ~~of inland barges and~~for hopper barges. Revenues for steel ~~components.~~components decreased 3.2% due to a slight decline in volumes.

•Cost of revenues increased ~~14.1%~~6.3% reflecting the higher barge volumes during the current period. As a percent of revenues, cost of revenues decreased to ~~81.4%~~82.0% in the current period, compared to ~~92.4%~~84.7% in the prior period.

•Selling, general, and administrative expenses increased ~~9.4%, primarily due to increased compensation-related costs,~~slightly, but decreased as a percentage of revenues to 5.4%, compared to ~~6.4%~~5.7% in the prior period.

•Operating profit increased ~~significantly,~~44.6%, outpacing the percentage increase in revenues, driven by ~~enhanced operating leverage associated with the~~ higher ~~volumes and improved margins across both businesses.~~

~~Nine Months Ended September 30, 2023 versus Nine Months Ended September 30, 2022~~

•~~Revenues increased 33.0% due to higher volumes and improved pricing of inland barges and steel components.~~

•Cost of revenues increased 22.3% reflecting the increased volumes during the current period. As a percent of revenues, cost of revenues decreased to 83.1% in the current period, compared to 90.3% in the prior period.

•Selling, general, and administrative expenses increased 17.0%, primarily due to increased expenses from participation in trade remedy proceedings involving certain imports of freight rail couplers from China and Mexico, as well as higher compensation-related costs, but decreased as a percentage of revenues to 5.9%, compared to 6.7% in the prior period.

~~Table of Contents~~

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

Unsatisfied Performance Obligations (Backlog)

As of ~~September 30, 2023,~~March 31, 2024, the backlog for inland barges was ~~$240.4~~$294.4 million, compared to ~~$225.1~~$253.7 million and ~~$128.9~~$279.0 million as of December 31, ~~2022~~2023 and ~~September 30, 2022,~~March 31, 2023, respectively. Approximately ~~26%~~73% of unsatisfied performance obligations for inland barges are expected to be delivered during ~~the year ending December 31, 2023~~2024, and the remainder are expected to be delivered in ~~2024.~~2025.

Corporate
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 Percent 2023 2022 Percent
(in millions) Change (in millions) Change
Corporate overhead costs $ 14.7 $ 16.7 (12.0) % $ 45.8 $ 45.6 0.4 %


	Three Months Ended March 31,
	2024		2023		Percent
	(in millions)				Change
Corporate overhead costs	$	16.3	$	14.4	13.2	%

~~2023~~Three Months Ended March 31, 2024 versus ~~2022~~Three Months Ended March 31, 2023

•Corporate overhead costs ~~decreased 12.0% for the three months ended September 30, 2023~~increased 13.2% primarily due to ~~lower insurance-related costs and lower~~higher acquisition and divestiture-related expenses of ~~$0.5~~$1.6 million, ~~for the three months ended September 30, 2023,~~ compared to ~~$1.6~~$0.6 million for the same period in ~~2022.~~

•~~Corporate overhead costs were relatively flat for the nine months ended September 30,~~ 2023, ~~as higher~~and increased compensation-related ~~expenses were largely offset by lower acquisition and divestiture-related expenses of $1.4 million in the current period, compared to $5.0 million for the same period in 2022.~~expenses.

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Liquidity and Capital Resources

Arcosa’s primary liquidity requirement consists of funding our business operations, including capital expenditures, working capital investment, and disciplined acquisitions. Our primary sources of liquidity include cash flow from operations, our existing cash balance, availability under the revolving credit facility, and, as necessary, the issuance of additional long-term debt or equity. To the extent we have available liquidity, we may also consider undertaking new capital investment projects, executing additional strategic acquisitions, returning capital to stockholders, or funding other general corporate purposes.

Cash Flows

The following table summarizes our cash flows from operating, investing, and financing activities for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 and ~~2022:~~2023:


							Three Months Ended March 31,
							2024	2023
		Nine Months Ended September 30,
		2023		2022

		(in millions)				(in millions)
Total cash provided by (required by):	Total cash provided by (required by):
Operating activities	Operating activities	$	198.8	$	182.6
Operating activities
Operating activities
Investing activities	Investing activities	(131.5)		(129.5)
Financing activities	Financing activities	(72.4)		(12.0)
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	$	(5.1)	$	41.1

Operating Activities. Net cash provided by operating activities for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 was ~~$198.8~~$80.5 million, compared to ~~$182.6~~$27.3 million for the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

•The changes in current assets and liabilities resulted in a net ~~use~~source of cash of ~~$43.8~~$4.6 million for the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, compared to a net use of cash of ~~$34.2~~$55.4 million for the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023. The current year activity was primarily driven by ~~increased receivables~~a decrease in inventories and ~~inventories due to~~ higher ~~volumes~~advanced billings and ~~AMP tax credits,~~accounts payable, partially offset by increased ~~accounts payable.~~receivables.

~~Table of Contents~~

Investing Activities. Net cash required by investing activities for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 was ~~$131.5~~$43.5 million, compared to ~~$129.5~~$34.1 million for the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

•Capital expenditures for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 were ~~$144.8~~$54.4 million, compared to ~~$85.9~~$44.4 million for the same period last year with the increase primarily driven by ~~investments in two new facilities supporting expansion in our wind tower and utility structures businesses as well as~~ various growth projects within the Construction Products ~~segment.~~and Engineered Structures segments. Full-year capital expenditures are expected to be approximately ~~$200~~$190 to ~~$210~~$205 million in ~~2023.~~2024.

•Proceeds from the sale of property, plant, and equipment and other assets totaled ~~$30.1~~$4.2 million for the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, compared to ~~$31.5~~$23.9 million for the same period in ~~2022.~~2023. Prior year activity mainly related to the sale of depleted land in the Construction Products segment.

•~~Cash~~There was no activity related to cash paid for acquisitions, net of cash acquired ~~was $18.8 million~~ for the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, compared to ~~$75.1~~$15.6 million for the same period in ~~2022.~~ 2023.

•Proceeds from the sale of the storage tanks business were ~~$2.0~~$6.7 million during the ~~nine~~three months ended ~~September 30,~~March 31, 2024, compared to $2.0 million for the same period in 2023, ~~and~~both related to the resolution ~~in 2023~~ of certain contingencies from the sale that closed in October 2022. There was no divestiture activity during the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2024 or 2023.

Financing Activities. Net cash ~~required~~provided by financing activities during the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 was ~~$72.4~~$34.7 million, compared to net cash required by financing activities of ~~$12.0~~$4.4 million for the same period in ~~2022.~~2023.

•Current year activity was primarily driven by ~~the full repayment~~borrowings of ~~the Company's term loan partially offset by borrowings~~$40.0 million under the revolving credit facility ~~for a net repayment of $42.0 million, as well as a $10.0 million holdback payment related to a previous acquisition.~~

•~~Prior year activity primarily related to net borrowings under the revolving credit facility~~partially offset by ~~$15.0 million of share repurchases~~scheduled debt payments and dividends paid during the ~~purchase of shares to satisfy employee taxes on vested stock.~~period.

Other Investing and Financing Activities

Revolving Credit Facility and Senior Notes

On August 23, 2023, ~~the Company~~we entered into a Second Amended and Restated Credit Agreement to increase the revolving credit facility from $500.0 million to $600.0 million, extend the maturity date of the revolving credit facility from January 2, 2025 to August 23, 2028, and refinance and repay in full the remaining balance of the term loan then outstanding under the ~~Amended and Restated Credit Agreement.~~prior credit facility.

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As of ~~September 30, 2023,~~March 31, 2024, we had ~~$100.0~~$200.0 million of outstanding loans borrowed under the revolving credit facility, ~~that were advanced to repay the term loan during the quarter,~~ and there were approximately $22.0 million of letters of credit issued, leaving ~~$478.0~~$378.0 million available for borrowing. Of the outstanding letters of credit as of ~~September 30, 2023, all~~March 31, 2024, $21.4 million are expected to expire in ~~2024.~~2024, with the remainder in 2025. The majority of our letters of credit obligations support the Company’s various insurance programs and generally renew by their terms each year.

In April 2024, we borrowed an additional $160.0 million under our revolving credit facility to fund, in part, the acquisition of Ameron.

The interest rates under the revolving credit facility are variable based on the daily simple or term Secured Overnight Financing Rate ("SOFR"), plus a 10-basis point credit spread adjustment, or an alternate base rate, in each case plus a margin for borrowing. 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 based on SOFR ranges from 1.25% to 2.00% and was set at 1.50% as of ~~September 30, 2023.~~March 31, 2024. The commitment fee rate ranges from 0.20% to 0.35% and was set at 0.25% as of ~~September 30, 2023.~~March 31, 2024.

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.

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Dividends and Repurchase Program

In ~~September 2023,~~March 2024, the Company declared a quarterly cash dividend of $0.05 per share that was paid on ~~October 31, 2023.~~April 30, 2024.

In December 2022, the ~~Company’s~~ Board ~~of Directors~~ authorized a new $50.0 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 ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, the Company did not repurchase any ~~shares, leaving~~shares. As of March 31, 2024, the ~~full amount~~Company had a remaining authorization of $36.2 million under the ~~$50.0 million authorization available as of September 30, 2023.~~program. See Note 1 Overview and Summary of Significant Accounting Policies to the ~~Notes to~~ Consolidated Financial Statements.

Derivative Instruments

In December 2018, the Company entered into a $100.0 million interest rate swap instrument, effective as of January 2, 2019, to reduce the effect of changes in the variable interest rates associated with the first $100.0 million of borrowings under the Company's committed credit facility. In conjunction with the replacement of LIBOR with SOFR as a benchmark for borrowings under the Amended and Restated Credit Agreement, on July 1, 2023 the swap instrument transitioned from LIBOR to SOFR. The instrument effectively fixed the SOFR component of borrowings under the revolving credit facility at a monthly rate of 2.71% until such instrument's termination. ~~As of September 30, 2023, the Company has recorded an asset of $0.5 million for the fair value of the instrument, all of which is recorded in accumulated other comprehensive income.~~ The interest rate swap instrument expired in October 2023. See Note ~~3 and Note~~ 7 ofDebt to the ~~Notes to~~ Consolidated Financial Statements.

Recent Accounting Pronouncements

See Note 1 Overview and Summary of Significant Accounting Policies to the ~~Notes to~~ Consolidated Financial Statements for information about recent accounting pronouncements.

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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 and involve risks and uncertainties. These forward-looking statements include expectations, beliefs, plans, objectives, future financial performances, estimates, projections, goals, and forecasts. Arcosa uses the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” “plans,” and similar expressions to identify these forward-looking statements. Potential factors, which could cause our actual results of operations to differ materially from those in the forward-looking statements include, among others:

•the impact of ~~the COVID-19 pandemic~~pandemics, epidemics, or other public health emergencies on our sales, operations, supply chain, employees, and financial condition;

•market conditions and customer demand for our business products and services;

•the cyclical and seasonal nature of the industries in which we compete;

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

•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 our manufacturing businesses;

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

•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;

•material nonpayment or nonperformance by any of our key customers;

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

•public infrastructure expenditures;

•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 our products with mandated specifications, standards, or testing criteria and obligations to remove and replace our products following installation or to recall our products and install different products manufactured by 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, 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 and other digital media to disseminate false, misleading, and/or unreliable or inaccurate information about the Company or demonstrate actions that negatively reflect on the Company;

•if the Company's ~~ESG~~sustainability efforts are not favorably received by stockholders;

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•if the Company does not realize some or all of the benefits expected from certain provisions of the IRA, including the AMP tax credits for wind towers, which remain subject to the issuance of additional guidance and clarification;

•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 ~~Separation does not comply with state fraudulent conveyance laws and legal dividend requirements.~~delivery or satisfaction of any backlog or firm orders.

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Any forward-looking statement speaks only as of the date on which such statement is made. Arcosa undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made. For a discussion of risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see Item 1A, “Risk Factors” in our ~~2022~~2023 Annual Report on Form 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, ~~2022~~2023 as set forth in our ~~2022~~2023 Annual Report on Form 10-K. See Note 9 Other, Net of the Notes to the Consolidated Financial Statements for the impact of foreign exchange rate fluctuations for the three ~~and nine~~ months ended ~~September 30, 2023.~~March 31, 2024.

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Item 4. Controls and 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 or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) with the Securities and Exchange Commission (“SEC”), to process, summarize, and disclose this information within the time periods specified in the rules of the SEC, and that such information is accumulated and communicated to management, including our Chief Executive and Chief Financial Officers, in a timely fashion. The Company’s Chief Executive and Chief Financial Officers are responsible for establishing and maintaining these disclosure controls and procedures and evaluating their effectiveness (as defined in Rule 13(a)-15l under the Exchange Act). 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 disclosure controls and procedures were effective.

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.

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PART II

Item 1. Legal Proceedings

See Note 15 ofContingencies to the ~~Notes to~~ Consolidated Financial Statements regarding legal proceedings.

Item 1A. Risk Factors

There have been no material changes in the Company's risk factors from those set forth in our ~~2022~~2023 Annual Report on Form 10-K.

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

This table provides information with respect to purchases by the Company of shares of its common stock during the quarter ended ~~September 30, 2023:~~March 31, 2024:

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)
July 1, 2023 through July 31, 2023 — $ — — $ 50,000,000
August 1, 2023 through August 31, 2023 40 $ 77.73 — $ 50,000,000
September 1, 2023 through September 30, 2023 314 $ 75.35 — $ 50,000,000
Total 354 $ 75.62 — $ 50,000,000


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, 2024 through January 31, 2024	1,205	$	78.46	—	$	36,247,953
February 1, 2024 through February 29, 2024	256	$	81.13	—	$	36,247,953
March 1, 2024 through March 31, 2024	12,797	$	81.69	—	$	36,247,953
Total	14,258	$	81.40	—	$	36,247,953

(1) These columns include the following transactions during the three months ended ~~September 30, 2023:~~March 31, 2024: (i) the surrender to the Company of ~~354~~14,258 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 $50.0 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.

Among other things, the IRA imposes a 1% excise tax on the fair market value of stock repurchases made by covered corporations after December 31, 2022. We have evaluated these new provisions, concluded there is no impact for the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, and continue to evaluate the impact of these tax law changes on future periods.

Item 3. Defaults Upon Senior Securities

Not 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

During the three months ended ~~September 30, 2023,~~March 31, 2024, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits


NO.						DESCRIPTION
2.1						Membership Interest Purchase Agreement regarding the sale and purchase of all the membership interests of Ameron Pole Products LLC among National Oilwell Varco, L.P., as seller, CEMC Services, LLC, as buyer , and sole l y for the purposes of Section 6.3(c) and Section 6.12, Arcosa Inc., as buyer guarantor (filed herewith).
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 October 31, 2018, File No. 333-228098).
3.2						Amended and Restated Bylaws of Arcosa, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed December 12, 2022, File No. 001-38494).
~~4.1~~						~~Fifth Supplemental Indenture dated as of August 24, 2023 among Arcosa Crushed Concrete, LLC, Arcosa Aggregates Gulf Coast, LLC, Arcosa, Inc., and Computershare Trust Company N.A. (filed herewith).~~
~~10.1~~						Second Amended and Restated Credit Agreement dated as of August 23, 2023 among Arcosa, Inc., as borrower, the lenders thereto, JPMorgan Chase Bank, National Association, as administrative agent, Bank of America, N.A., as syndication agent, and PNC Bank, National Association, and Wells Fargo Bank, National Association, as co-documentation agents (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed August 25, 2023, File No. 1-38494).
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 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 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).

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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)

~~November 2, 2023~~May 3, 2024	By:	/s/ Gail M. Peck
		Gail M. Peck
		Chief Financial Officer

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Caption			Page

PART I
Item 1. Financial Statements			3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			2220
Item 3. Quantitative and Qualitative Disclosures a bout Market Risk			3430
Item 4. Controls and Procedures			3431

PART II
Item 1. Legal Proceedings			3532
Item 1A. Risk Factors			3532
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			3532
Item 3. Defaults Upon Senior Securities			3532
Item 4. Mine Safety Disclosures			3532
Item 5. Other Information			3532
Item 6. Exhibits			3 633

SIGNATURES			3734