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U.S. Concrete, Inc.UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-Ký ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934For the fiscal year ended December 31, 2015oro o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _________ to _________.Commission file number 001-34530 U.S. CONCRETE, INC.(Exact name of registrant as specified in its charter)Delaware 76-0586680(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)331 N. Main Street, Euless, Texas 76039(Address of principal executive offices) (Zip code)Registrant’s telephone number, including area code: (817) 835-4105Securities registered pursuant to Section 12(b) of the Act:Title of each class Name of each exchange on which registeredCommon Stock, par value $.001 The Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þIndicate 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 thepreceding 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 past90 days. Yes þ No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submittedand posted 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 tosubmit and post such files). Yes þ No oIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not becontained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment tothis Form 10-K. oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of“large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.Large accelerated filer o Accelerated filer þ Non-accelerated filer o Smaller reporting company oIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes o No þAggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant computed by reference to the last reported sale price of $37.89of the registrant’s common stock as of June 30, 2015 , the last business day of the registrant’s most recently completed second fiscal quarter: $508,425,677 . For purposes of thiscomputation, all officers, directors and 10% beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed an admission that suchofficers, directors or 10% beneficial owners are, in fact, affiliates of the registrant.Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934subsequent to the distribution of securities under a plan confirmed by a court. Yes þ No ¨There were 15,194,236 shares of common stock, par value $.001 per share, of the registrant outstanding as of March 2, 2016 . DOCUMENTS INCORPORATED BY REFERENCEPortions of the Proxy Statement related to the registrant’s 2016 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission pursuant toRegulation 14A under the Securities Exchange Act of 1934, as amended, are incorporated by reference into Part III of this report. U.S. CONCRETE, INC.FORM 10-KFor the Year Ended December 31, 2015TABLE OF CONTENTS Page Cautionary Statement Concerning Forward-Looking Statements3 PART I Item 1.Business4Item 1A.Risk Factors16Item 1B.Unresolved Staff Comments27Item 2.Properties28Item 3.Legal Proceedings29Item 4.Mine Safety Disclosures29 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities30Item 6.Selected Financial Data32Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations33Item 7A.Quantitative and Qualitative Disclosures About Market Risk54Item 8.Financial Statements and Supplementary Data55 Report of Independent Registered Public Accounting Firm56 Consolidated Balance Sheets57 Consolidated Statements of Operations58 Consolidated Statements of Changes in Equity59 Consolidated Statements of Cash Flows60 Notes to Consolidated Financial Statements62Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure102Item 9A.Controls and Procedures102Item 9B.Other Information104 PART III Item 10.Directors, Executive Officers and Corporate Governance105Item 11.Executive Compensation105Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters105Item 13.Certain Relationships and Related Transactions, and Director Independence106Item 14.Principal Accountant Fees and Services106 PART IV Item 15.Exhibits and Financial Statement Schedules106SIGNATURES107INDEX TO EXHIBITS108 2 Table of ContentsCautionary Statement Concerning Forward-Looking Statements Certain statements and information in this Annual Report on Form 10-K may constitute “forward-looking statements” within the meaning of the PrivateSecurities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements concerning plans, objectives, goals, projections,strategies, future events or performance, and underlying assumptions and other statements, which are not statements of historical facts. In some cases, you canidentify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,”“potential” or “continue,” the negative of such terms or other comparable terminology. These forward-looking statements are based on our current expectationsand beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable asand when made, there can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our expectations forfuture revenues and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions. Ourforward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results todiffer materially from our historical experience and our present expectations or projections.Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, thosesummarized below:•general economic and business conditions, which will, among other things, affect demand for new residential and commercial construction;•our ability to successfully identify, manage, and integrate acquisitions;•the cyclical nature of, and changes in, the real estate and construction markets, including pricing changes by our competitors;•governmental requirements and initiatives, including those related to mortgage lending or mortgage financing, funding for public or infrastructureconstruction, land usage, and environmental, health, and safety matters;•disruptions, uncertainties or volatility in the credit markets that may limit our, our suppliers' and our customers' access to capital;•our ability to successfully implement our operating strategy;•weather conditions;•our substantial indebtedness and the restrictions imposed on us by the terms of our indebtedness;•our ability to maintain favorable relationships with third parties who supply us with equipment and essential supplies;•our ability to retain key personnel and maintain satisfactory labor relations; and•product liability, property damage, and other claims and insurance coverage issues.Known material factors that could cause our actual results to differ from those in the forward-looking statements include those described in “Risk Factors”in Part I, Item 1A.Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation topublicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except asrequired by federal securities laws.3 Table of ContentsPART IItem 1. BusinessIn this report, we refer to U.S. Concrete, Inc. and its subsidiaries as "we," "us," the "Company," or "U.S. Concrete," unless we specifically state otherwise orthe context indicates otherwise. U.S. Concrete, Inc. is a Delaware corporation which was incorporated in 1997. We began operations in 1999, which is the year wecompleted our initial public offering. GeneralWe are a leading producer of ready-mixed concrete in select geographic markets in the United States. We operate our business through two primary segments:ready-mixed concrete and aggregate products. Ready-mixed concrete is an important building material that is used in the vast majority of commercial, residentialand public works construction projects. Aggregates are a raw material used in the production of ready-mixed concrete.We serve substantially all segments of the construction industry in our select geographic markets. Our customers include contractors for commercial andindustrial, residential, street and highway and other public works construction. Concrete product revenue by type of construction activity for the year endedDecember 31, 2015 was approximately 57% commercial and industrial, 28% residential and 15% street, highway and other public works.We operate principally in Texas, northern California and New York / New Jersey, with those markets representing approximately 40%, 29%, and 26%,respectively, of our consolidated revenue for the year ended December 31, 2015 . We believe we are well positioned for strong growth in these attractive regionsand segments. According to estimates from the Portland Cement Association ("PCA"), the states in which we operate represent a total of approximately 27% of the2015 consumption of ready-mixed concrete in the United States, which favorably positions us to capture additional market share in this fragmented industry. Totalrevenue from continuing operations for the year ended December 31, 2015 was $974.7 million , of which we derived approximately 89.9% from our ready-mixedconcrete segment, 3.5% from our aggregate products segment (excluding $ 26.2 million sold internally) and 6.6% from our other operations. For the year endedDecember 31, 2015 , our net income was $ 25.5 million , our net income from continuing operations was $25.8 million , and our Adjusted EBITDA (as definedherein) was $ 131.9 million . Please see "Basis of Presentation" in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results ofOperations and Note 19, "Business Segments," to our consolidated financial statements in this report for additional information regarding and a reconciliation ofAdjusted EBITDA.As of December 31, 2015 , we operate 144 standard ready-mixed concrete plants, 16 volumetric ready-mixed concrete facilities, 14 producing aggregatesfacilities, three aggregates distribution terminals, two lime slurry facilities, and one recycled aggregates facility. During the year ended December 31, 2015 , theseplants and facilities produced approximately 7.0 million cubic yards of ready-mixed concrete and 4.7 million tons of aggregates. We lease two other aggregatesfacilities to third parties and retain a royalty on production from those facilities. As of December 31, 2015 , we operated over 1,360 drum mixer trucks and 119volumetric mixer trucks. For additional information related to our properties, see Item 2. Properties of this report.AcquisitionsIn the second quarter of 2015, we acquired Ferrara Bros. Building Materials Corp. ("Ferrara Bros."), located in New York, New York and Colonial ConcreteCo. ("Colonial"), located in Newark, New Jersey. These acquisitions included ten ready-mixed concrete plants at seven locations and a fleet of 129 mixer trucks.These acquisitions expand our business in the New York metropolitan and northern New Jersey markets and allow us to more effectively serve constructionprojects in these areas.In the fourth quarter of 2015, we acquired two strategically integrated ready-mixed concrete producers located in the U.S. Virgin Islands, Heavy Materials,LLC ("Heavy") and Spartan Concrete Products, LLC ("Spartan"). These acquisitions included five ready-mixed concrete plants, a fleet of 48 mixer trucks, and two quarries with total aggregates reserves of approximately 40 million tons. The Heavy acquisition also included leases for an industrial waterfront property that isutilized as a marine terminal and sales yard. These acquisitions expanded our ready-mixed concrete and aggregates operations into new markets in the Caribbeanislands.During 2015, we also expanded our ready-mixed concrete operations in our northern California market with the acquisition of Right Away Redy Mix, Inc.("Right Away"), located in Oakland, California and in our Washington, D.C. market with the4 Table of Contentsacquisition of DuBrook Concrete, Inc. ("DuBrook"), located in Chantilly, Virginia. The Right Away acquisition included four ready-mixed concrete facilities, 49 mixer trucks and a fleet of transfer trucks used to transport cement and aggregates. The DuBrook acquisition included three ready-mixed concrete plants and afleet of 42 mixer trucks.Also in 2015, we expanded our aggregates operations with the acquisition of Wantage Stone (“Wantage”) located in New Jersey and two sand and graveloperations in our west Texas and southern Oklahoma markets. The Wantage acquisition included an 80 acre quarry along with mining rights to anadditional 77 acres of land located in Hamburg, New Jersey.During 2014, we acquired New York Sand and Stone, LLC ("NYSS") which included the assignment of leases to operate two existing aggregate distributionterminals on the East River in Brooklyn, New York. This acquisition allowed us to more efficiently deliver raw materials to our ready-mixed concrete productionfacilities as well as to our customers. Our aggregates distribution operations are included in our non-reportable segments. Also during 2014, we completed twoacquisitions in New York that increased our presence in the Staten Island ready-mixed concrete market.Also in 2014, in our west Texas market, we acquired four ready-mixed operations in Abilene, Wichita Falls, and Brady, Texas. The addition of theseoperations expanded our footprint in the west Texas market. To further broaden our ready-mixed concrete delivery offerings in our Texas market, during the fourthquarter of 2014, we acquired the assets of Custom-Crete ("Custom-Crete") , with operations in Dallas / Fort Worth, Houston, San Antonio, and Austin, Texas fromOldcastle Architectural, Inc., a wholly owned subsidiary of CRH plc, and the assets of Mobile-Crete of South Texas, LLC and Scofield Construction Services,LLC, with operations in San Antonio, Austin, and south Texas. Through these acquisitions, we added 16 volumetric ready-mixed concrete facilities andapproximately 109 volumetric mixer trucks. These operations expanded our presence into all of the major metropolitan markets in Texas and provide us with thecapability to deliver ready-mixed concrete to our customers via on-site batching and mixing to customer specifications.In March 2014, we commenced operations at our Red River sand facility on the Texas / Oklahoma border, which we green fielded during the fourth quarter of2013. This facility provides sand to our Texas and Oklahoma ready-mixed concrete operations and customers.In 2013, we completed one acquisition in our north Texas market that resulted in the addition of three ready-mixed concrete plants and related assets andinventory. This acquisition allowed us to expand our operations in our north Texas market.DivestituresIn June 2015, we completed the sale of substantially all of our assets associated with our one remaining precast concrete operation in Pennsylvania, whichwere classified as held for sale as of December 31, 2014.Recent DevelopmentsOn February 29, 2016, we completed the acquisition of all the assets of Greco Brothers Concrete of L.I., Inc. ("Greco"), in Brooklyn, New York. The purchaseprice was $15.8 million in cash, plus closing adjustments of $0.9 million . We funded the purchase through a combination of cash on hand and borrowings on our$250.0 million asset-based revolving credit facility (the "Revolving Facility"). Greco operates two ready-mixed concrete plants and a fleet of 37 mixer trucks. TheGreco acquisition further expands our ready-mixed concrete operations in our existing New York market. Competitive strengthsLarge, high quality asset base in attractive markets with favorable construction environments . Our assets are primarily focused in the Texas / Oklahoma,northern California, New York / New Jersey / Washington, D.C., and U. S. Virgin Islands markets. Our high quality asset base is comprised of 81 ready-mixedconcrete plants, 16 volumetric ready-mixed concrete plants, and eight aggregates facilities in Texas / Oklahoma, 22 ready-mixed concrete plants in northernCalifornia, 36 ready-mixed concrete plants, four aggregates facilities, three aggregates distribution terminals, and one recycled aggregates facility in New York /New Jersey / Washington, D.C., five ready-mixed concrete plants and two aggregates facilities in the U.S. Virgin Islands; as well as over 1,360 operated drummixer trucks and 119 operated volumetric mixer trucks. We believe the scale and quality of our asset base, in addition to our product differentiation, on-timedeliveries, competitive all-in delivered cost, servicing and reliability differentiate us and allow us to meet the needs of both large and small jobs for a wide range ofclients in multiple end-use markets.5 Table of ContentsGrowth in our Texas / Oklahoma markets is largely driven by construction demand in the transportation, financial and other professional services, andmanufacturing sectors; growth in our northern California market is driven largely by the technology sector; and growth in our New York / New Jersey /Washington, D.C. markets is driven by the financial services and government sectors, respectively. In addition, all of our markets currently exhibit healthyresidential trends supported by a number of factors, including population growth, decreases in unemployment, low mortgage and other interest rates, rising homeprices and increasing construction activity. We believe that our better-than-average growth is driven by key industry sectors within our markets, which generallybenefit from year-round construction.Favorable exposure to commercial projects with higher margins and barriers to entry . We bid for and routinely win supply contracts for some of the largest,most prestigious commercial projects. Some of the larger commercial projects we have worked on include:•The San Francisco Bay Bridge in Oakland, California•Lyndon B. Johnson Expressway in Dallas / Fort Worth, Texas•World Trade Center Complex in Manhattan, New York•Tappan Zee Bridge, New York•San Francisco 49er Stadium in Santa Clara, California•Lucile Packard Children's Hospital at Stanford in Palo Alto, California•Hudson Yards Complex in Manhattan, New York•Pacific Park Brooklyn in Brooklyn, New York•Toyota North American Headquarters in Frisco, TexasThese types of projects have higher margins and barriers to entry due to rigorous specifications, increased complexity, high customization requirements andsignificant volume capacity needs.We provide alternative solutions for designers and contractors by offering value-added concrete products such as color-conditioned, fiber-reinforced, steel-reinforced and high-performance concrete. We believe this enhances our ability to become exposed to, and win supply contracts for, some of the largestcommercial projects that have high barriers to entry.Long-term customer relationships . Our management and sales personnel develop and maintain successful long-term relationships with our key customers.Customer concentration in our key markets allows us to better serve our new and existing customers with expedited delivery and lower transportation costs andscale efficiencies. Key elements of our customer-focused approach include:•corporate-level marketing and sales expertise;•technical service expertise to develop innovative new branded products; and•training programs that emphasize successful marketing and sales techniques that focus on the sale of high-margin concrete mix designs.We estimate that the average length of our top 15 customer relationships is approximately 20 years. We further estimate that most of our top 35 customershave relationships that extend past five years, with many customer relationships surpassing 20 years of loyalty. Our customer engagement model results incontractors returning year-after-year to us as a supplier they can trust. Despite our concentrated and loyal customer base, in 2015 , no single customer or projectaccounted for more than 10% of our total revenue. Our broad, yet targeted, customer base enables us to develop an efficient, stable business model and tap into themarket in a variety of ways. Our 2015 revenue was split between (i) commercial and industrial, (ii) residential and (iii) street and highway construction contractorsand other public works. We believe that by providing high quality, reliable services and customized products and solutions, we are able to continuously maintainimportant long-term relationships.Focus on environmental sustainability . We are a leader in the sustainable concrete market, and we expect domestic and global sustainable demand to continueto grow at attractive rates. In 2008, we initiated our environmentally friendly concrete ("EF Technology") initiative which promotes green building andconstruction. Our EF Technology ready-mixed concrete products replace a portion of the traditional cement components with reclaimed fly ash, slag and othermaterials that results in lower carbon dioxide emissions. We believe this leads to an environmentally superior and sustainable alternative to traditional ready-mixedconcrete for our customers’ consumption. We believe EF Technology reduces greenhouse gases and landfill space consumption and produces a highly durableproduct. Customers can also receive LEED credits for the use of this technology.We believe our use of technology creates a competitive advantage over smaller concrete producers and larger vertically integrated aggregates and cementcompanies that do not focus on this as a first solution. We are positioned to take advantage6 Table of Contentsof the growing demand for these products which could result in an increase in our revenue and profits and expansion of our operating margins, as these higher-priced value-added products are a lower cost alternative to cement. Today, we are a charter member of the Carbon Leadership Forum and the first ready-mixedconcrete company in North America to adopt and receive verified Environmental Product Declarations for our concrete mixes, and we employ extensivesustainable operational practices across our enterprise. We are also a supporter of the National Ready Mixed Concrete Association ("NRMCA") Green-Starprogram, a plant-specific certification program that utilizes an environmental management system based on a model of continual improvement.Conservative balance sheet and ample liquidity . We have successfully improved our financial performance by refocusing our financial objectives over the lastfive years. Our management team has extensive experience in the industry as does our board of directors. Our management team has focused on reducing our coststructure while expanding our existing and acquired businesses in our core operating regions to drive strong performance. As a result, we have grown revenue,improved profit margins and increased liquidity during the last five years. In addition to cash on hand, we benefit from significant liquidity through our revolvingcredit facility and cash flow from operations. We believe our conservative balance sheet and liquidity will allow us to take advantage of strategic opportunities aswell as provide ample cushion against general downturns in economic activity.Experienced management team . Our senior management team consists of ten executives with an average of 19 years of industry experience and is comprisedof individuals with a proven track record in the construction materials industry. Our Chief Executive Officer, William J. Sandbrook, has approximately 24 years ofexperience in the construction materials industry. Our management team’s deep market knowledge enables us to effectively assess potential new opportunities inorder to solidify our leading market presence. We will continue to focus on recruiting and retaining motivated and knowledgeable professional managers tocontinue to develop our business and maintain our leading market position.Company strategyFocus on core operations . We believe the best opportunities for future growth lie within our core ready-mixed concrete and aggregates businesses. Weroutinely evaluate our existing assets and business units to ensure we continue to maintain a best-in-class operation. During 2015, we divested the last of ourprecast businesses so as to continue our focus on ready-mixed concrete and aggregates. We will continue to invest in our business, both in physical plants and newtechnologies, and we will continue to evaluate both organic and strategic acquisition opportunities. We believe our focus on optimizing the performance of ourready-mixed concrete segment will continue to differentiate us from our larger, integrated competitors that focus principally on their aggregates or cementsegments and treat ready-mixed concrete operations as a downstream outlet for their aggregates or cement products.Pursue growth . In addition to our general organic growth initiative, we continuously evaluate both acquisition and partnership opportunities. We are focusedon both strengthening our positions in existing markets as well as identifying attractive new markets. All of our acquisitions must meet our strict criteria, includingfit with our strategic plan, investment return hurdles, capital requirements and attractive market attributes. During 2015, we completed eight acquisitions thatexpanded our operations in our existing markets and into the U.S. Virgin Islands market. Most notably, we acquired Ferrara, which significantly expanded ourfootprint in the New York metropolitan market and allows us to more effectively serve construction projects in Manhattan. In addition, we expanded into the U.S.Virgin Islands market with our acquisition of Heavy. We believe our significant experience, positive reputation and strong management team will allow us tocontinue our successful track record of identifying opportunities, integrating acquisitions, realizing synergies and enhancing asset value and cash flow.Manage costs . We are consistently seeking opportunities to reduce costs and to improve margins through our focus on existing operations and newtechnologies. Additionally, our regional acquisitions allow for synergies such as selling, general, and administrative reductions, economies of scale, variable laborsavings, and purchasing power. We believe by aggressively managing our cost structure we can best serve our clients with better pricing and continued best-in-class execution.Business segments and products We operate our business through two primary segments: ready-mixed concrete and aggregate products. For financial information about our operatingsegments, refer to the information set forth in Note 19, "Business Segments," to our consolidated financial statements included in this report. We derive all of ourrevenue from operations in the United States and its U.S. territories, and all of our long-lived assets are located within the United States and its U.S. territories.7 Table of ContentsReady-mixed concreteGeneralOur ready-mixed concrete segment engages principally in the formulation, preparation and delivery of ready-mixed concrete to our customers’ job sites. Weprovide our ready-mixed concrete from our operations in Texas, northern California, New York, New Jersey, Washington, D.C., Oklahoma, and the U.S. VirginIslands. Ready-mixed concrete is a highly versatile construction material that results from combining coarse and fine aggregates, such as gravel, crushed stone andsand, with water, various chemical admixtures and cement. We also provide services intended to reduce our customers’ overall construction costs by lowering theinstalled, or “in-place,” cost of concrete. These services include the formulation of mixtures for specific design uses, on-site and lab-based product quality control,and customized delivery programs to meet our customers’ needs. We generally do not provide paving or other finishing services, which construction contractors orsubcontractors typically perform.Products and servicesOur standard ready-mixed concrete products consist of proportioned mixes we produce and deliver in an unhardened plastic state for placement and shapinginto designed forms at the job site. Selecting the optimum mix for a job entails determining not only the ingredients that will produce the desired permeability,strength, appearance and other properties of the concrete after it has hardened and cured, but also the ingredients necessary to achieve a workable consistencyconsidering the weather and other conditions at the job site. We believe we can achieve product differentiation for the mixes we offer because of the variety ofmixes we can produce, our volume production capacity and our scheduling, delivery and placement reliability. Additionally, we believe EF Technology initiative,which utilizes alternative materials and mix designs that result in lower carbon dioxide, or CO2 emissions, helps differentiate us from our competitors. We alsobelieve we distinguish ourselves with our value-added service approach that emphasizes reducing our customers’ overall construction costs by reducing the in-place cost of concrete and the time required for construction.Our volumetric concrete operations, which we acquired in 2014, expanded our ready-mixed concrete delivery and service offerings in Texas. Volumetricready-mixed concrete trucks mix concrete to the customer's specification on the job site, better serving smaller jobs and specialized applications, and allowingflexibility for servicing remote job locations. Because of their versatility, these trucks offer the contractor multiple options for a single job without theinconvenience or added costs typically associated with standard ready-mixed trucks delivering special or short-loads to a job site. Because of their unique on-demand production capabilities, these trucks minimize the amount of wasted concrete, which improves margins and reduces environmental impact.From a contractor’s perspective, the in-place cost of concrete includes both the amount paid to the ready-mixed concrete manufacturer and the internal costsassociated with the labor and equipment the contractor provides. A contractor’s unit cost of concrete is often only a small component of the total in-place cost thattakes into account all the labor and equipment costs required to build the forms for the ready-mixed concrete and place and finish the ready-mixed concrete,including the cost of additional labor and time lost as a result of substandard products or delivery delays not covered by warranty or insurance. By carefullydesigning proper mixes and using advances in mixing technology, we can assist our customers in reducing the amount of reinforcing steel, time and labor they willrequire in various applications.We provide a variety of services in connection with our sale of ready-mixed concrete that can help reduce our customers’ in-place cost of concrete. Theseservices include:•production of formulations and alternative product recommendations that reduce labor and materials costs;•quality control, through automated production and laboratory testing, that ensures consistent results and minimizes the need to correct completed work; and•automated scheduling and tracking systems that ensure timely delivery and reduce the downtime incurred by the customer’s placing and finishing crews.We produce ready-mixed concrete by combining the desired type of cement, other cementitious materials (described below), sand, gravel, and crushed stonewith water and, typically, one or more admixtures. These admixtures, such as chemicals, minerals and fibers, determine the usefulness of the product for particularapplications.8 Table of ContentsWe use a variety of chemical admixtures to achieve one or more of the following five basic purposes:•relieve internal pressure and increase resistance to cracking;•retard the hardening process to make concrete more workable in hot weather;•strengthen concrete by reducing its water content;•accelerate the hardening process and reduce the time required for curing; and•facilitate the placement of concrete having low water content.We frequently use various mineral admixtures as supplements to cement, which we refer to as supplemental cementitious materials, to alter the permeability,strength and other properties of concrete. These materials include fly ash, ground granulated blast-furnace slag, silica fume and other natural pozzolans. Thesematerials also reduce the amount of cement content used, which results in a reduction in CO2 emissions.We also use fibers, such as steel, glass, synthetic and carbon filaments as additives in various formulations of concrete. Fibers help control shrinkage cracking,thus reducing permeability and improving abrasion resistance. In many applications, fibers can replace welded steel wire and reinforcing bars. Relative to the othercomponents of ready-mixed concrete, these additives generate comparatively higher margins.Marketing and salesOur marketing efforts primarily target concrete sub-contractors, general contractors, governmental agencies, property owners and developers, architects,engineers, and home builders whose focus extends beyond the price of ready-mixed concrete to product quality, on-time delivery and reduction of in-place costs.General contractors typically select their suppliers of ready-mixed concrete. In large, complex projects, an engineering firm or division within a statetransportation or public works department may influence the purchasing decision, particularly if the concrete has complicated design specifications. In connectionwith large, complex projects and in government-funded projects generally, the general contractor or project engineer usually awards supply orders on the basis ofeither direct negotiation or a competitive bidding process. We believe the purchasing decision for many jobs ultimately is relationship and reputation-based.Our marketing and sales strategy emphasizes the sale of value-added products and solutions to customers more focused on reducing their in-place buildingmaterial costs than on the price per cubic yard of ready-mixed concrete. Key elements of our customer-focused approach include:•corporate-level marketing and sales expertise;•technical service expertise to develop innovative, new branded products; and•training programs that emphasize successful marketing and sales techniques that focus on the sale of high-margin concrete mix designs.OperationsOur standard ready-mixed concrete plants consist of fixed and portable facilities that produce ready-mixed concrete in wet or dry batches. Our fixed-plantfacilities produce ready-mixed concrete that we transport to job sites by drum mixer trucks. Our portable plant operations deploy our portable plant facilities toproduce ready-mixed concrete at the job site that we direct into place using a series o f conveyor belts or drum mixer trucks. We use our portable plants to servicehigh-volume projects or projects in remote locations. Our volumetric ready-mixed concrete plants consist of fixed and portable facilities that are used to load rawmaterials into our volumetric mixer trucks throughout the day. Batching occurs at the job site based on customer specifications. Several factors govern the choiceof plant type, including:•production consistency requirements;•daily production capacity requirements;•job site proximity to fixed plants; and•capital and financing.We construct both wet batch plants and dry batch plants. A wet batch plant generally has a higher initial cost and daily operating expenses, but (i) yieldsgreater consistency with less time required for quality control in the concrete produced, and9 Table of Contents(ii) generally has greater daily production capacity than a dry batch plant. We believe that construction of a wet batch plant having an hourly capacity of 250 cubicyards currently would cost approximately $1.6 million, while a dry batch plant having an hourly capacity of 150 cubic yards currently would cost approximately$0.7 million. As of December 31, 2015 , our batch plants included 23 wet batch plants and 121 dry batch plants.We maintain two types of load facilities for our volumetric ready-mixed concrete — main load sites and reload facilities. Both types of facilities typicallyinclude blending silos, a load-out pit, and a storm water system. A main load facility typically also includes a maintenance shop. We estimate that constructing amain load site would cost approximately $0.7 million, while constructing a reload facility would cost approximately $0.1 million.Our batch operator at a dry batch plant simultaneously loads the dry components of stone, sand and cement with water and admixtures in a drum mixer truckthat begins the mixing process during loading and continues that process en route to our customers' job sites. In a wet batch plant, the batch operator blends the drycomponents and water in a plant mixer from which an operator loads the mixed concrete into a drum mixer truck, which leaves for the job site promptly afterloading. At a volumetric facility, our loader operator or mixer operator coordinates loading of the dry components of sand, course aggregates, and cement into thebins on the truck. Water and liquid admixtures are separately loaded into the tanks on the trucks before leaving the facility for the job site.Any future decisions we make regarding the construction of additional plants will be impacted by market factors, including:•the expected production demand for the plant;•capital and financing;•the expected types of projects the plant will service; and•the desired location of the plant.Drum mixer trucks continuously rotate their loads en route to job sites in order to produce concrete at the desired consistency. Our drum mixer trucks typicallyhave load capacities of 10 cubic yards, or approximately 20 tons, and a typical operating life of between 15 and 20 years, depending on total truck hours and miles.A new truck of this size currently costs between $160,000 and $225,000, depending on the geographic location and design specifications. Depending on the type ofbatch plant from which the drum mixer trucks generally are loaded, some components of the drum mixer trucks usually require refurbishment after three to fiveyears. As of December 31, 2015 , we operated a fleet of over 1,360 owned and leased drum mixer trucks, which had an average age of approximately 10 years.Volumetric mixer trucks include individual bins and tanks, which are used to mix the raw materials at the customer's job site based on the customer'sspecifications. The volumetric mixing method provides only the concrete needed for the job, eliminating wasted materials and short load charges. Our volumetricmixer trucks typically have load capacities of eight cubic yards, or approximately 16 tons, and a typical operating life of between seven to nine years, depending ontotal truck hours and miles. A new truck of this size currently costs between $220,000 and $250,000, depending on the design specifications. Typically the truck'smixer unit will be rebuilt after the initial truck life, extending the operating life of the truck an additional five years. As of December 31, 2015 , we operated a fleetof 119 owned volumetric mixer trucks, which had an average age of approximately eight years.In our ready-mixed concrete operations, we emphasize quality control, pre-job planning, customer service and coordination of supplies and delivery. Weobtain orders for ready-mixed concrete in advance of actual delivery. A typical order contains specifications the contractor requires the concrete to meet. Afterreceiving the specifications for a particular job, we use computer modeling, industry information and information from previous similar jobs to formulate a varietyof mixtures of cement, aggregates, water and admixtures which meet or exceed the contractor’s specifications. We perform testing to determine which mix designis most appropriate to meet the required specifications. The test results enable us to select the mixture that has the lowest cost and meets or exceeds the jobspecifications. The testing center creates and maintains a project file that details the mixture we will use when we produce the concrete for the job. For qualitycontrol purposes, the testing center also is responsible for maintaining batch samples of concrete we have delivered to a job site.We use computer modeling to prepare bids for particular jobs based on the size of the job, location, desired margin, cost of raw materials and the designmixture identified in our testing process. If the job is large enough and has a projected duration beyond the supply arrangement in place at that time, we obtainquotes from our suppliers as to the cost of raw materials we use in preparing the bid. Once we obtain a quotation from our suppliers, the price of the raw materialsfor the specified job is informally established. Several months may elapse from the time a contractor has accepted our bid until actual delivery of the ready-mixedconcrete begins.10 Table of ContentsDuring this time, we maintain regular communication with the contractor concerning the status of the job and any changes in the job’s specifications in orderto coordinate the multisourced purchases of cement and other materials we will need to fill the job order and meet the contractor’s delivery requirements. Weconfirm that our customers are ready to take delivery of manufactured products throughout the placement process. On any given day, one of our plants may haveproduction orders for dozens of customers at various locations throughout its area of operation. To fill an order:•the customer service office coordinates the timing and delivery of the concrete to the job site;•a load operator supervises and coordinates the receipt of the necessary raw materials and operates the hopper that dispenses those materials into theappropriate storage bins;•a batch operator, using a computerized batch panel, prepares the specified mixture from the order and oversees the loading of the drum mixer truck witheither dry ingredients and water in a dry batch plant or the premixed concrete in a wet batch plant; and•the driver of the drum mixer truck delivers the load to the job site, discharges the load and, after washing the truck, departs at the direction of the dispatchoffice.Our central dispatch system, where available, tracks the status of each drum mixer truck as to whether a particular truck is:•loading concrete;•en route to a particular job site;•on the job site;•discharging concrete;•being rinsed down; or•en route to a particular plant.The system is updated continuously on the trucks’ status via signals received from sensors. In this manner, the dispatcher can determine the optimal routingand timing of subsequent deliveries by each drum mixer truck and monitor the performance of each driver.Our plant managers oversee the operations of each of our plants. Our operational employees also include:•maintenance personnel who perform routine maintenance work throughout our plants;•mechanics who perform the maintenance and repair work on our rolling stock;•testing center staff who prepare mixtures for particular job specifications and maintain quality control;•various clerical personnel who perform administrative tasks; and•sales personnel who are responsible for identifying potential customers, pricing mixes for projects, and maintaining existing customer relationships.We generally operate each of our plants on an extended single shift, with some overtime operation during the year. On occasion, however, we may haveprojects that require deliveries around the clock.Aggregate productsOur aggregate products segment produces crushed stone, sand and gravel from 14 aggregates facilities located in New Jersey, Texas, Oklahoma, and the U.S.Virgin Islands. We sell these aggregates for use in commercial, industrial and public works projects in the markets they serve, as well as consume them internallyin the production of ready-mixed concrete in those markets. We produced approximately 4.7 million tons of aggregates during the year ended December 31, 2015 ,with Texas representing 51% and New Jersey representing 47% of the total production. We believe our aggregates reserves provide us with additional raw materialsourcing flexibility and supply availability. In addition, we own sand pit operations in Michigan and one quarry in west Texas which we lease to third parties andreceive a royalty based on the volumes produced and sold during the terms of the leases.OtherOther products not associated with a reportable segment include our building materials stores, hauling operations, aggregates distribution terminals, limeslurry, ARIDUS ® Rapid Drying Concrete technology, brokered product sales, a recycled aggregates operation, and concrete blocks.11 Table of ContentsIndustry overviewConcrete has many attributes that make it a highly versatile construction material. In recent years, industry participants have developed various uses forconcrete products, including:•high-strength engineered concrete to compete with steel-frame construction;•concrete housing;•flowable fill for backfill applications;•continuous-slab rail-support systems for rapid transit and heavy-traffic rail lines; and•concrete bridges, tunnels and other structures for rapid transit systems.Other examples of successful innovations that have opened new markets for concrete include:•sustainable construction;•concrete paving over asphalt, or “white topping”;•paved concrete shoulders to replace less permanent and increasingly costly asphalt shoulders;•pervious concrete parking lots for water drainage management, as well as providing a long-lasting and aesthetically pleasing urban environment;•colored pavements to mark entrance and exit ramps and lanes of expressways; and•colored, stamped concrete for decorative applications.The U.S. ready-mixed concrete market is a large, highly competitive and fragmented market, with no one producer holding a dominant market position. TheNRMCA currently estimates that the ready-mixed concrete industry generates total annual revenue of approximately $30 billion.Based on information from the NRMCA, we estimate that, in addition to vertically integrated manufacturers of cement and aggregates, ready-mixed concreteproducers currently operate approximately 5,500 plants in the United States. Larger markets generally have several producers competing for business on the basisof product quality, service, on-time delivery and price.According to information available from the NRMCA, total volumes (measured in cubic yards) from the production and delivery of ready-mixed concrete inthe United States over the past three years were as follows (in millions of cubic yards): 2015 2014 2013Total ready-mixed concrete volumes 336 326 301According to recently published Dodge Construction data, the four major segments of the construction industry accounted for the following approximatepercentages of the total volume of ready-mixed concrete produced in the United States in the past three years: 2015 2014 2013Commercial and industrial construction 18% 16% 16%Residential construction 22% 19% 19%Street and highway construction and paving 20% 23% 23%Other public works and infrastructure construction 40% 42% 42%According to FMI Corp. ("FMI"), spending on total residential, non-residential, and non-building construction is projected to grow at a steady rate through2019. FMI projects the following growth rates in 2016: residential construction of 10-12%, commercial and office construction of 7%, and street and highwayconstruction of 2%. According to the PCA, annual ready-mixed concrete usage is expected to strengthen in our key markets in Texas, northern California, and NewYork / New Jersey, with 2016 to 2019 estimated compound annual growth rates of 4.7%, 7.0%, and 4.5%, respectively. Moreover, the National Association ofHome Builders and Fannie Mae predict U.S. residential construction will continue to recover with a median estimate of approximately 834,000 and 411,000 single-family and multi-family housing starts in 2016, respectively. Other industry experts agree predicting total housing starts will exceed 1.2 million, with a shift tosingle-family.12 Table of ContentsBarriers to the start-up of new ready-mixed concrete manufacturing operations have been increasing. During the past decade, public concerns about dust,process water runoff, noise and heavy mixer and other truck traffic associated with the operation of these types of plants and their general appearance have madeobtaining the permits and licenses required for new plants more difficult. Delays in the regulatory process, coupled with the capital investment that start-upoperations entail, have raised the barriers to entry for those operations.Cement and other raw materialsWe obtain most of the materials necessary to manufacture ready-mixed concrete on a daily basis. These materials include cement, other cementitious materials(such as fly ash and blast furnace slag) and aggregates (stone, gravel and sand), in addition to certain chemical admixtures. With the exception of chemicaladmixtures, each plant typically maintains an inventory level of these materials sufficient to satisfy its operating needs for a few days. Our inventory levels do notdecline significantly or comparatively with declines in revenue during seasonally low periods. We generally maintain inventory at specified levels to maximizepurchasing efficiencies and to be able to respond quickly to customer demand.Typically, cement, other cementitious materials and aggregates represent the highest-cost materials used in manufacturing a cubic yard of ready-mixedconcrete. We purchase cement from a few suppliers in each of our major geographic markets. Chemical admixtures are generally purchased from suppliers undernational purchasing agreements.Overall, prices for cement and aggregates increased in 2015 , compared to 2014 , in all of our major geographic markets. Generally, we negotiate withsuppliers on a company-wide basis and at the local market level to obtain the most competitive pricing available for cement and aggregates. We believe thedemand for cement is increasing and will warrant scrutiny as construction activity increases. Today, in most of our markets, we believe there is an adequate supplyof cement and aggregates.We recognize the value in advocating green building and construction as part of our strategy. We initiated EF Technology, our commitment toenvironmentally friendly concrete technologies that significantly reduce potential CO2 emissions. Our EF Technology ready-mixed concrete products replace aportion of cement with reclaimed fly ash, blast furnace slag and other materials. We believe this results in an environmentally superior and sustainable alternativeto traditional ready-mixed concrete. EF Technology reduces greenhouse gases and landfill space consumption and produces a highly durable product. Customerscan also obtain LEED credits through the use of this technology. We believe our use of this technology creates a competitive advantage over smaller concreteproducers and larger vertically integrated aggregate and cement companies that may not focus on this as a first solution. We are positioned to take advantage of thegrowing demand for these products which could expand our operating margins as they are a lower cost alternative to cement. We are also a supporter of theNRMCA Green-Star program, a plant-specific certification that utilizes an environmental management system based on a model of continual improvement.CustomersOf our concrete product revenue for the year ended December 31, 2015 , commercial and industrial construction represented approximately 57% , residentialconstruction represented approximately 28% and street, highway construction and other public works represented approximately 15% . For the year endedDecember 31, 2015 , no single customer or project accounted for more than 10% of our total revenue.We rely heavily on repeat customers. Our management and sales personnel are responsible for developing and maintaining successful long-term relationshipswith our key customers.CompetitionThe ready-mixed concrete industry is highly competitive. Our leadership position in a market depends largely on the location and operating costs of our plantsand prevailing prices in that market. Price is the primary competitive factor among suppliers for small or less complex jobs, such as residential construction.However, the ability to meet demanding specifications for strength or sustainability, timeliness of delivery and consistency of quality and service, in addition toprice, are the principal competitive factors among suppliers for large or complex jobs. Our competitors range from small, owner-operated private companies tosubsidiaries of operating units of large, vertically integrated manufacturers of cement and aggregates. Our vertically integrated competitors generally have greaterfinancial and marketing resources than we have, providing them with a competitive advantage. Competitors having lower operating costs than we do or having thefinancial resources to enable them to accept lower margins than we do will have a competitive advantage over us for jobs that are particularly price-sensitive.Competitors having greater financial resources or less financial leverage than we do may be able to invest more in new mixer13 Table of Contentstrucks, ready-mixed concrete plants and other production equipment or pay for acquisitions which could provide them a competitive advantage over us. See “Riskfactors - We may lose business to competitors who underbid us, and we may be otherwise unable to compete favorably in our highly competitive industry.”We continue to focus on developing new competitive advantages that will differentiate us from our competitors, such as our high-performing, low-CO2concrete, ARIDUS ® Rapid Drying Concrete technology and EF Technology ready-mixed concrete products. For example, Central Concrete Supply Co., Inc.(“Central Concrete”), one of our subsidiaries, differentiated itself from its competitors to supply its high-performing, low-CO2 concrete for the SF Public UtilitiesCommission (“SFPUC”) headquarters. During the redesign phase, SFPUC invited Central Concrete to suggest solutions for SFPUC’s goal to use a set of concretemixes that delivered up to 70% cement replacement materials, with no compromises on cost, finish or cure time for the mat foundation, slabs, columns and cores.SFPUC selected Central Concrete for the job in an open bidding process because its six different mixes met SFPUC’s demanding specifications by significantlycutting the cement content while delivering a net savings for SFPUC of 7.4 million pounds in CO2 emissions from embodied carbon, nearly 50% better thantraditional concrete mixes.EmployeesAs of December 31, 2015 , we had 603 salaried employees, including executive officers and management, sales, technical, administrative and clericalpersonnel, and 2,097 hourly personnel. The number of employees fluctuates depending on the number and size of projects ongoing at any particular time, whichmay be impacted by variations in weather conditions throughout the year.As of December 31, 2015 , 976 of our employees were represented by labor unions having collective bargaining agreements with us. Generally, theseagreements have multi-year terms and expire on a staggered basis between 2016 and 2019. Under these agreements, we pay specified wages to covered employeesand in most cases make payments to multi-employer pension plans and employee benefit trusts rather than administering the funds on behalf of these employees.We have not experienced any strikes or significant work stoppages in the past five years. We believe our relationships with our employees and unionrepresentatives are very good.Training and safetyOur future success will depend, in part, on the extent to which we can attract, retain and motivate qualified employees. We believe that our ability to do so willdepend, in part, on providing a work environment that allows employees the opportunity to develop and maximize their capabilities. We require all field employeesto attend periodic safety training meetings and all drivers to participate in training seminars. We employ a national safety director whose responsibilities includemanaging and executing a unified, company-wide safety program. Employee development and safety are criteria used in evaluating performance in our annualincentive plan for salaried employees.Governmental regulation and environmental mattersA wide range of federal, state and local laws, ordinances and regulations apply to our operations, including the following matters:•water usage;•land usage;•street and highway usage;•noise levels; and•health, safety and environmental matters.In many instances, we are required to have various certificates, permits or licenses to conduct our business. Our failure to maintain these requiredauthorizations or to comply with applicable laws or other governmental requirements could result in substantial fines or possible revocation of our authority toconduct some of our operations. Delays in obtaining approvals for the transfer or grant of authorizations, or failures to obtain new authorizations, could impedeacquisition efforts.Environmental laws that impact our operations include those relating to air quality, solid waste management and water quality. These laws are complex andsubject to frequent change. They impose strict liability in some cases without regard to negligence or fault. Sanctions for noncompliance may include revocation ofpermits, corrective action orders, administrative14 Table of Contentsor civil penalties and criminal prosecution. Some environmental laws provide for joint and several strict liability for remediation of spills and releases of hazardoussubstances. In addition, businesses may be subject to claims alleging personal injury or property damage as a result of alleged exposure to hazardous substances, aswell as damage to natural resources. These laws also may expose us to liability for the conduct of, or conditions caused by, others or for acts that complied with allapplicable laws when performed.We have conducted Phase I environmental site assessments, which are non-intrusive investigations conducted to evaluate the potential for significant on-siteenvironmental impacts, on substantially all the real properties we own or lease and have engaged independent environmental consulting firms to complete thoseassessments. We have not identified any environmental concerns associated with those properties that we believe are likely to have a material adverse effect on ourbusiness, financial position, results of operations or cash flows, but we can provide no assurance material liabilities will not occur. In addition, we can provide noassurance that our compliance with amended, new or more stringent laws, stricter interpretations of existing laws or the future discovery of environmentalconditions will not require additional, material expenditures.We believe we have all material permits and licenses we need to conduct our operations and are in substantial compliance with applicable regulatoryrequirements relating to our operations. Our capital expenditures relating to environmental matters were not material in 2015 .Product warrantiesOur operations involve providing ready-mixed concrete that must meet building codes or other regulatory requirements and contractual specifications fordurability, stress-level capacity, weight-bearing capacity and other characteristics. If we fail or are unable to provide products meeting these requirements andspecifications, material claims may arise against us and our reputation could be damaged. In the past, we have had significant claims of this kind asserted againstus that we have resolved. There currently are, and we expect that in the future there may be, additional claims of this kind asserted against us. If a significantproduct-related claim is resolved against us in the future, that resolution may have a material adverse effect on our business, financial condition, results ofoperations and cash flows.InsuranceOur employees perform a significant portion of their work moving and storing large quantities of heavy raw materials, driving large mixer and other trucks inheavy traffic conditions and delivering concrete at construction sites or in other areas that may be hazardous. These operating hazards can cause personal injuryand loss of life, damage to or destruction of properties and equipment and environmental damage. We maintain insurance coverage in amounts and against the riskswe believe are in accordance with industry practice, but this insurance may not be adequate to cover all losses or liabilities we may incur in our operations, and wemay be unable to maintain insurance of the types or at levels we deem necessary or adequate or at rates we consider reasonable.Legal proceedingsFrom time to time, and currently, we are subject to various claims and litigation brought by employees, customers and other third parties for, among othermatters, personal injuries, property damage, product defects and delay damages that have, or allegedly have, resulted from the conduct of our operations. As aresult of these types of claims and litigation, we must periodically evaluate the probability of damages being assessed against us and the range of possibleoutcomes. In each reporting period, if we determine that the likelihood of damages being assessed against us is probable, and, if we believe we can estimate a rangeof possible outcomes, then we will record a liability. The amount of the liability will be based upon a specific estimate, if we believe a specific estimate to belikely, or it will reflect the low end of our range. Currently, there are no material legal proceedings pending against us.In the future, we may receive funding deficiency demands related to multi-employer plans to which we contribute. We are unable to estimate the amount ofany potential future funding deficiency demands because the actions of each of the other contributing employers in the plans has an effect on each of the othercontributing employers, and the development of a rehabilitation plan by the trustees and subsequent submittal to and approval by the Internal Revenue Service isnot predictable. Further, the allocation of fund assets and return assumptions by trustees are variable, as are actual investment returns relative to the planassumptions.As of March 3, 2016 , there are no material product defect claims pending against us. Accordingly, our existing accruals for claims against us do not reflectany material amounts relating to product defect claims. While our management is not aware15 Table of Contentsof any facts that would reasonably be expected to lead to material product defect claims against us that would have a material adverse effect on our business,financial condition or results of operations, it is possible that claims could be asserted against us in the future. We do not maintain insurance that would cover alldamages resulting from product defect claims. In particular, we generally do not maintain insurance coverage for the cost of removing and rebuilding structures. Inaddition, our indemnification arrangements with contractors or others, when obtained, generally provide only limited protection against product defect claims. Dueto inherent uncertainties associated with estimating unasserted claims in our business, we cannot estimate the amount of any future loss that may be attributable tounasserted product defect claims related to ready-mixed concrete we have delivered prior to December 31, 2015 .We believe that the resolution of all litigation currently pending or threatened against us or any of our subsidiaries will not materially exceed our existingaccruals for those matters. However, because of the inherent uncertainty of litigation, there is a risk that we may have to increase our accruals for one or moreclaims or proceedings to which we or any of our subsidiaries is a party as more information becomes available or proceedings progress, and any such increase inaccruals could have a material adverse effect on our consolidated financial condition or results of operations. We expect in the future that we and our operatingsubsidiaries will, from time to time, be a party to litigation or administrative proceedings that arise in the normal course of our business.We are subject to federal, state and local environmental laws and regulations concerning, among other matters, air emissions and wastewater discharge. Ourmanagement believes we are in substantial compliance with applicable environmental laws and regulations. From time to time, we receive claims from federal andstate environmental regulatory agencies and entities asserting that we may be in violation of environmental laws and regulations. Based on experience and theinformation currently available, our management does not believe that these claims will materially exceed our related accruals. Despite compliance and experience,it is possible that we could be held liable for future charges, which might be material, but are not currently known to us or cannot be estimated by us. In addition,changes in federal or state laws, regulations or requirements, or discovery of currently unknown conditions, could require additional expenditures.As permitted under Delaware law, we have agreements that provide indemnification of officers and directors for certain events or occurrences while theofficer or director is or was serving at our request in such capacity. The maximum potential amount of future payments that we could be required to make underthese indemnification agreements is not limited; however, we have a director and officer insurance policy that potentially limits our exposure and enables us torecover a portion of future amounts that may be paid. As a result of the insurance policy coverage, we believe the estimated fair value of these indemnificationagreements is minimal. Accordingly, we have not recorded any liabilities for these agreements as of December 31, 2015 .We and our subsidiaries are parties to agreements that require us to provide indemnification in certain instances when we acquire businesses and real estateand in the ordinary course of business with our customers, suppliers, lessors and service providers.Available InformationOur web site address is www.us-concrete.com . We make available on this web site under the “Investor Relations” section, free of charge, our annualreports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to those reports, as soon as reasonablypracticable after we electronically file those materials with, or furnish them to, the SEC. Alternatively, the public may read and copy any materials we filewith the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Roommay be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site that contains reports, proxy and information statements, and otherinformation regarding issuers that file electronically with the SEC. The SEC’s web site address is www.sec.gov .Item 1A. Risk FactorsThe following risk factors represent our current view of the known material risks facing our businesses and are important to understanding our business. Theimportant factors, among others, sometimes have affected, or in the future could affect, our actual results and could cause our actual consolidated results during2016, and beyond, to differ materially from those expressed in any forward-looking statements made by us or on our behalf. In addition, these risks anduncertainties could adversely impact our business, financial condition, results of operations, cash flows and common stock price. Further, the risk factors describedbelow are not the only risks we face. Our business, financial condition and results of operations may also be affected by additional risks and uncertainties that arenot currently known to us, that we currently consider immaterial or that are not specific to us. This16 Table of Contentsdiscussion includes a number of forward-looking statements. Please see “Cautionary Statement Concerning Forward-Looking Statements” preceding Item 1 of thisreport.Business RisksOur business depends on activity within the construction industry and the economic strength of our principal markets.We serve substantially all segments of the construction industry, and our results of operations are directly affected by the level of activity in the constructionindustry in the geographic markets we serve. Demand for our products, particularly in the commercial and industrial and residential construction markets, coulddecline if companies and consumers cannot obtain credit for construction projects or if the slow pace of economic activity results in delays or cancellations ofprojects. During 2015, commercial and industrial and residential construction accounted for 57% and 28% of our consolidated revenue, respectively. In addition,federal and state budget issues may hurt the funding available for infrastructure spending, particularly street, highway and other public works projects, whichaccounted for 15% of our revenue in 2015.We operate principally in Texas, northern California and New York / New Jersey, with those markets representing approximately 40%, 29%, and 26%,respectively, of our consolidated revenue for 2015. Our earnings depend on the economic strength of these markets because of the high cost to transport ourproducts relative to their price. Recently, the decline in the price of crude oil and natural gas has had an adverse impact on activity in the oil and natural gasindustry in Texas, which has resulted in lower demand for construction services in Texas and consequently lower demand for ready-mixed concrete in Texas. Forthe year ended December 31, 2015, we estimate that there was no direct impact and less than a 3.0% indirect impact on revenue in our Texas markets by thedecline in West Texas Intermediate Crude Oil ("WTI") prices . If economic and construction activity diminishes in our principal markets or if lower demandpersists in Texas, our results of operations and liquidity could be materially adversely affected.Tightening of mortgage lending or mortgage financing requirements could adversely affect the residential construction market and reduce the demand fornew home construction.Commencing in 2006, the mortgage lending and mortgage finance industries experienced significant instability due to, among other things, defaults onsubprime loans and adjustable rate mortgages. In light of these events, lenders, investors, regulators and other third parties have questioned the adequacy of lendingstandards and other credit requirements for a variety of loan programs. This has led to reduced investor demand for mortgage loans and mortgage-backedsecurities, reduced market values for those securities, tightened credit requirements, reduced liquidity, increased credit risk premiums and increased regulatoryactions. Deterioration in credit quality among subprime and other loans has caused many lenders to eliminate subprime mortgages and other loan products that donot conform to the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, Federal Housing Administration or VeteransAdministration standards. While mortgage lending conditions have improved since 2010, fewer loan products and tighter loan qualifications continue to make itdifficult for some categories of borrowers to finance the purchase of new homes. In general, these developments have been a significant factor in the downturn of,and have delayed the recovery of, the housing market.Approximately 28% of our revenue for the year ended December 31, 2015 was from residential construction contractors. While mortgage lending conditionshave improved and lending volumes have increased since 2010, tightening of mortgage lending or mortgage financing requirements could adversely affect theability to obtain credit for some borrowers, or reduce the demand for new home construction, which could have a material adverse effect on our business andresults of operations. Another downturn in new home construction could also adversely affect our customers focused in residential construction, possibly resultingin slower payments, higher default rates in our accounts receivable, and an overall increase in working capital.Our net revenue attributable to street, highway and other public works projects could be negatively impacted by a decrease or delay in governmentalspending.During the year ended December 31, 2015 , approximately 15% of our ready-mixed concrete revenue was from street, highway and other public worksprojects. Construction activity on streets, highways and other public works projects is directly related to the amount of government funding available for suchprojects, which is affected by budget constraints currently being experienced by federal, state and local governments. In addition, if the U.S. government budgetprocess results in a prolonged shutdown or reductions in government spending, we may experience delayed orders, delayed payments, and declines in revenues,profitability, and cash flows. Reduced levels of governmental funding for public works projects or delays in that funding could adversely affect our business,financial condition, results of operations and cash flows.17 Table of ContentsThere are risks related to our internal growth and operating strategy.Our ability to generate internal growth will be affected by, among other factors, our ability to:• attract new customers;• differentiate ourselves in a competitive market by emphasizing new product development and value added services;• hire and retain employees; and• reduce operating and overhead expenses.Our inability to achieve internal growth could materially and adversely affect our business, financial condition, results of operations, liquidity, and cash flows.One key component of our operating strategy is to operate our businesses on a decentralized basis, with local or regional management retaining responsibilityfor day-to-day operations, profitability and the internal growth of the individual business. If we do not implement and maintain proper overall business controls,this decentralized operating strategy could result in inconsistent operating and financial practices and our overall profitability could be adversely affected.Our failure to successfully identify, manage and integrate acquisitions could reduce our earnings and slow our growth.In the last two years, we completed 17 acquisitions. On an ongoing basis, as part of our strategy to pursue growth opportunities, we continue to evaluatestrategic acquisition opportunities that have the potential to support and strengthen our business. There is intense competition for acquisition opportunities in ourindustry. Competition for acquisitions may increase the cost of, or cause us to refrain from, completing acquisitions. Our ability to complete acquisitions isdependent upon, among other things, the willingness of acquisition candidates we identify to sell; our ability to obtain financing or capital, if needed, onsatisfactory terms; and, in some cases, regulatory approvals. The investigation of acquisition candidates and the negotiation, drafting and execution of relevantagreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneysand others. If we fail to complete any acquisition for any reason, including events beyond our control, the costs incurred up to that point for the proposedacquisition likely would not be recoverable.Potential acquisition targets may be in geographic regions in which we do not currently operate, which could result in unforeseen operating difficulties anddifficulties in coordinating geographically dispersed operations, personnel and facilities. In addition, if we enter into new geographic markets, we may be subject toadditional and unfamiliar legal and regulatory requirements. Compliance with regulatory requirements may impose substantial additional obligations on us and ourmanagement, cause us to expend additional time and resources in compliance activities and increase our exposure to penalties or fines for non-compliance withsuch additional legal requirements. Our recently completed acquisitions and any future acquisitions could cause us to become involved in labor, commercial orregulatory disputes or litigation related to any new enterprises and could require us to invest further in operational, financial and management information systemsand to attract, retain, motivate and effectively manage local or regional management and additional employees. Upon completion of an acquisition, key members ofthe management of the acquired company may resign, which would require us to attract and retain new management and could make it difficult to maintaincustomer relationships. Our inability to effectively manage the integration of our completed and future acquisitions could prevent us from realizing expected ratesof return on an acquired business and could have a material and adverse effect on our business, financial condition, results of operations, liquidity, and cash flows.Our business is seasonal and subject to adverse weather.Since our business is primarily conducted outdoors, erratic weather patterns, seasonal changes and other weather-related conditions affect our business.Adverse weather conditions, including hurricanes and tropical storms, cold weather, snow, and heavy or sustained rainfall, reduce construction activity, restrict thedemand for our products, and impede our ability to efficiently deliver concrete. Adverse weather conditions could also increase our costs and reduce ourproduction output as a result of power loss, needed plant and equipment repairs, delays in obtaining permits, time required to remove water from floodedoperations, and similar events. In addition, severe drought conditions can restrict available water supplies and restrict production. Consequently, these events couldadversely affect our business, financial condition, results of operations, liquidity, and cash flows.18 Table of ContentsOur operating results may vary significantly from one reporting period to another and may be adversely affected by the cyclical nature of the markets weserve.The relative demand for our products is a function of the highly cyclical construction industry. As a result, our revenue may be adversely affected by declinesin the construction industry generally and in our regional markets. Our results also may be materially affected by:•the level of commercial and residential construction in our regional markets, including reductions in the demand for new residential housing constructionbelow current or historical levels;•the availability of funds for public or infrastructure construction from local, state and federal sources;•unexpected events that delay or adversely affect our ability to deliver concrete according to our customers’ requirements;•changes in interest rates and lending standards;•changes in the mix of our customers and business, which result in periodic variations in the margins of jobs performed during any particular quarter;•the timing and cost of acquisitions and difficulties or costs encountered when integrating acquisitions;•the budgetary spending patterns of customers;•increases in construction and design costs;•power outages and other unexpected delays;•our ability to control costs and maintain quality;•employment levels; and•regional or general economic conditions.As a result, our operating results in any particular quarter may not be indicative of the results that you can expect for any other quarter or for the entire year.Furthermore, negative trends in the ready-mixed concrete industry or in our geographic markets could have material adverse effects on our business, financialcondition, results of operations, liquidity, and cash flows.We may lose business to competitors who underbid us, and we may be otherwise unable to compete favorably in our highly competitive industry.Our competitive position in a given market depends largely on the location and operating costs of our plants and prevailing prices in that market. Price is theprimary competitive factor among suppliers for small or less complex jobs, principally in residential construction. However, timeliness of delivery and consistencyof quality and service, as well as price, are the principal competitive factors among suppliers for large or complex jobs. Concrete manufacturers like us generallyobtain customer contracts through local sales and marketing efforts directed at general contractors, developers, governmental agencies and homebuilders. As aresult, we depend on local relationships. We generally do not have long-term sales contracts with our customers.Our competitors range from small, owner-operated private companies to subsidiaries or operating units of large, vertically integrated manufacturers of cementand aggregates. Our vertically integrated competitors generally have greater manufacturing, financial and marketing resources than we have, providing them withcompetitive advantages. Competitors having lower operating costs than we do or having the financial resources to enable them to accept lower margins than we dowill have competitive advantages over us for jobs that are particularly price-sensitive. Competitors having greater financial resources or less financial leverage thanwe do to invest in new mixer trucks, build plants in new areas or pay for acquisitions also will have competitive advantages over us.We depend on third parties for concrete equipment and supplies essential to operate our business.We rely on third parties to sell or lease property, plant and equipment to us and to provide us with supplies, including cement and other raw materials,necessary for our operations. We cannot assure you that our favorable working relationships with our suppliers will continue in the future. Also, there havehistorically been periods of supply shortages in the concrete industry, particularly in a strong economy.If we are unable to purchase or lease necessary properties or equipment, our operations could be severely impacted. If we lose our supply contracts and receiveinsufficient supplies from third parties to meet our customers’ needs or if our suppliers experience price increases or disruptions to their business, such as labordisputes, supply shortages or distribution problems, our business, financial condition, results of operations, liquidity, and cash flows could be materially andadversely affected.19 Table of ContentsResidential construction and related demand for ready-mixed concrete has increased between 2012 and 2015. While cement prices increased as a result of thisincreased demand, cement supplies were at levels that indicated a very low risk of cement shortages in most of our markets. Should demand increase substantiallybeyond our current expectations, we could experience shortages of cement in future periods, which could adversely affect our operating results by decreasing salesof ready-mixed concrete and increasing our costs of raw materials.We use large amounts of electricity and diesel fuel that are subject to potential reliability issues, supply constraints and significant price fluctuation, whichcould affect our financial position, operating results and liquidity.In our production and distribution processes, we consume significant amounts of electricity and diesel fuel. The availability and pricing of these resources aresubject to market forces that are beyond our control. Furthermore, we are vulnerable to any reliability issues experienced by our suppliers, which also are beyondour control. Our suppliers contract separately for the purchase of such resources and our sources of supply could be interrupted should our suppliers not be able toobtain these materials due to higher demand or other factors that interrupt their availability. Variability in the supply and prices of these resources could materiallyaffect our financial position, results of operations and liquidity from period to period.We are dependent on information technology to support many facets of our business.If our information systems are breached, shutdown, destroyed or fail due to cyberattack, unauthorized access, natural disaster or equipment breakdown, byemployees, malicious third parties or other unauthorized persons, our business could be interrupted, proprietary information could be lost, stolen or destroyed andour reputation could be damaged. We take measures to protect our information systems and data from such occurrences, but as cyberattacks become increasinglysophisticated, there can be no guarantee that our actions, efforts and security measures adopted will always prevent them. Our business could be negatively affectedby any such occurrences.The departure of key personnel could disrupt our business.We depend on the efforts of our officers and, in many cases, on senior management of our businesses. Our success will depend on retaining our officers andsenior-level managers. We need to ensure that key personnel are compensated fairly and competitively to reduce the risk of departure of key personnel to ourcompetitors or other industries. To the extent we are unable to attract or retain qualified management personnel, our business, financial condition, results ofoperations, liquidity, and cash flows could be materially and adversely affected. We do not carry key personnel life insurance on any of our employees.Shortages of qualified employees may harm our business.Our ability to provide high-quality products and services on a timely basis depends on our success in employing an adequate number of skilled plantmanagers, technicians and drivers. Like many of our competitors, we experience shortages of qualified personnel from time to time. We may not be able tomaintain an adequate skilled labor force necessary to operate efficiently and to support our growth strategy, and our labor expenses may increase as a result of ashortage in the supply of skilled personnel.Collective bargaining agreements, work stoppages and other labor relations matters may result in increases in our operating costs, disruptions in ourbusiness and decreases in our earnings.As of December 31, 2015 , approximately 36% of our employees were covered by collective bargaining agreements, which expire between 2016 and 2019.Our inability to negotiate acceptable new contracts or extensions of existing contracts with these unions could cause work stoppages by the affected employees. Inaddition, any new contracts or extensions could result in increased operating costs attributable to both union and nonunion employees. If any such work stoppageswere to occur, or if other of our employees were to become represented by a union, we could experience a significant disruption of our operations and higherongoing labor costs, which could materially and adversely affect our business, financial condition, results of operations, liquidity, and cash flows. Also, laborrelations matters affecting our suppliers of cement and aggregates could adversely impact our business from time to time.20 Table of ContentsParticipation in multi-employer defined benefit plans may impact our financial condition, results of operations and cash flows.We contribute to 15 multi-employer defined benefit plans, which are subject to the requirements of the Pension Protection Act of 2006 (the “PPA”). For multi-employer defined benefit plans, the PPA established new funding requirements or rehabilitation requirements, additional funding rules for plans that are inendangered or critical status, and enhanced disclosure requirements to participants regarding a plan’s funding status. The Worker, Retiree, and Employer RecoveryAct of 2008 (the “WRERA”) provided some funding relief to defined benefit plan sponsors affected by recent market conditions. The WRERA allowed multi-employer plan sponsors to elect to freeze their current funded status at the same funding status as the preceding plan year (for example, a calendar year plan thatwas not in critical or endangered status for 2008 was able to elect to retain that status for 2009), and sponsors of multi-employer plans in endangered or criticalstatus in plan years beginning in 2008 or 2009 were allowed a three-year extension of funding improvement or rehabilitation plans (extending the timeline for theseplans to achieve their goals from 10 years to 13 years, or from 15 years to 18 years for seriously endangered plans). A number of the multi-employer pension plansto which we contribute are underfunded and are currently subject to funding improvement or rehabilitation requirements. Additionally, if we were to withdrawpartially or completely from any plan that is underfunded, we would be liable for a proportionate share of that plan’s unfunded vested benefits. Based on theinformation available from plan administrators, we believe that our portion of the contingent liability in the case of a full or partial withdrawal from or terminationof several of these plans or the inability of plan sponsors to meet the funding or rehabilitation requirements would be material to our financial condition, results ofoperations and cash flows.Our overall profitability is sensitive to price changes and minor variations in sales volumes.Generally, our customers are price-sensitive. Prices for our products are subject to changes in response to relatively minor fluctuations in supply and demand,general economic conditions and market conditions, all of which are beyond our control. Because of the fixed-cost nature of our business, our overall profitabilityis sensitive to price changes and minor variations in sales volumes.Instability in the financial and credit sectors may impact our business and financial condition in ways that we currently cannot predict.Adverse or worsening economic trends could have a negative impact on our suppliers and our customers and their financial condition and liquidity, whichcould cause them to fail to meet their obligations to us and could have a material adverse effect on our revenue, income from operations and cash flows. Theuncertainty and volatility of the financial and credit sectors could have further impacts on our business and financial condition that we currently cannot predict oranticipate.Turmoil in the global financial system could have an impact on our business and our financial condition. Accordingly, our ability to access the capital marketscould be restricted or be available only on unfavorable terms. Limited access to the capital markets could adversely impact our ability to take advantage of businessopportunities or react to changing economic and business conditions and could adversely impact our ability to execute our long-term growth strategy. Ultimately,we could be required to reduce our future capital expenditures substantially. Such a reduction could have a material adverse effect on our revenue, income fromoperations and cash flows.If one or more of the lenders under our Revolving Facility , which provides for aggregate borrowings of up to $250.0 million, subject to the borrowing base,were to become unable or unwilling to perform their obligations under that facility, our borrowing capacity could be reduced. Our inability to borrow additionalamounts under our Revolving Facility could limit our ability to fund our future operations and growth.Governmental regulations, including environmental regulations, may result in increases in our operating costs and capital expenditures and decreases inour earnings.A wide range of federal, state and local laws, ordinances and regulations apply to our operations, including the following matters:• land usage;• street and highway usage;• noise levels; and21 Table of Contents• health, safety and environmental matters.In many instances, we must have various certificates, permits or licenses in order to conduct our business. Our failure to maintain required certificates, permitsor licenses or to comply with applicable governmental requirements could result in substantial fines or possible revocation of our authority to conduct some of ouroperations. Delays in obtaining approvals for the transfer or grant of certificates, permits or licenses, or failure to obtain new certificates, permits or licenses, couldimpede the implementation of any acquisitions.Governmental requirements that impact our operations include those relating to air quality, solid and hazardous waste management and cleanup and waterquality. These requirements are complex and subject to change. Certain laws, such as the U.S. law known as Superfund, can impose strict liability in some caseswithout regard to negligence or fault, including for the conduct of or conditions caused by others, or for our acts that complied with all applicable requirementswhen we performed them. Our compliance with amended, new or more stringent requirements, stricter interpretations of existing requirements, or the futurediscovery of environmental conditions may require us to make unanticipated material expenditures. In addition, we may fail to identify, or obtain indemnificationfor, environmental liabilities of acquired businesses. We generally do not maintain insurance to cover environmental liabilities.Our operations are subject to various hazards that may cause personal injury or property damage and increase our operating costs.Operating mixer trucks, particularly when loaded, exposes our drivers and others to traffic hazards. Our drivers are subject to the usual hazards associated withproviding services on construction sites, while our plant personnel are subject to the hazards associated with moving and storing large quantities of heavy rawmaterials. Operating hazards can cause personal injury and loss of life, damage to or destruction of property, plant and equipment and environmental damage.Although we conduct training programs designed to reduce these risks, we cannot eliminate these risks. We maintain insurance coverage in amounts we believe areconsistent with industry practice; however, this insurance may not be adequate to cover all losses or liabilities we may incur in our operations, and we may not beable to maintain insurance of the types or at levels we deem necessary or adequate, or at rates we consider reasonable. A partially or completely uninsured claim, ifsuccessful and of sufficient magnitude, could have a material adverse effect on us.The insurance policies we maintain are subject to varying levels of deductibles. Losses up to the deductible amounts are accrued based on our estimates of theultimate liability for claims incurred and an estimate of claims incurred but not reported. If we were to experience insurance claims or costs above our estimates,our business, financial condition, results of operations, liquidity, and cash flows might be materially and adversely affected.We may incur material costs and losses as a result of claims that our products do not meet regulatory requirements or contractual specifications.Our operations involve providing products that must meet building code or other regulatory requirements and contractual specifications for durability, stress-level capacity, weight-bearing capacity and other characteristics. If we fail or are unable to provide products meeting these requirements and specifications,material claims may arise against us and our reputation could be damaged. In the past, we have had significant claims of this kind asserted against us that we haveresolved. There currently are claims, and we expect that in the future there will be additional claims, of this kind asserted against us. If a significant product-relatedclaim or claims are resolved against us in the future, that resolution may have a material adverse effect on our business, financial condition, results of operations,liquidity, and cash flows.Some of our plants are susceptible to damage from earthquakes, for which we have a limited amount of insurance.We maintain only a limited amount of earthquake insurance and, therefore, we are not fully insured against earthquake risk. Any significant earthquakedamage to our plants could materially and adversely affect our business, financial condition, results of operations, liquidity, and cash flows.Increasing insurance claims and expenses could lower our profitability and increase our business risk.The nature of our business subjects us to product liability, property damage, personal injury claims and workers’ compensation claims from time to time.Increased premiums charged by insurance carriers may further increase our insurance expense as coverage22 Table of Contentsexpires or otherwise cause us to raise our self-insured retention. If the number or severity of claims within our self- insured retention increases, we could sufferlosses in excess of our reserves. An unusually large liability claim or a string of claims based on a failure repeated throughout our mass production process mayexceed our insurance coverage or result in direct damages if we were unable or elected not to insure against certain hazards because of high premiums or otherreasons. In addition, the availability of, and our ability to collect on, insurance coverage is often subject to factors beyond our control. Further, allegations relatingto workers’ compensation violations may result in investigations by insurance regulatory or other governmental authorities, which investigations, if any, couldhave a direct or indirect material adverse effect on our ability to pursue certain types of business which, in turn, could have a material adverse effect on ourbusiness, financial position, results of operations, liquidity, and cash flows.Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations.As of December 31, 2015 , we had $200.0 million of outstanding senior indebtedness represented by our 8.5% senior secured notes due 2018 (the “2018Notes”). The 2018 Notes are governed by an indenture (the “Indenture”). We and certain of our subsidiaries are parties to a Second Amended and Restated Loanand Security Agreement (the “Second A/R Loan Agreement”), with certain financial institutions named therein, as lenders (the “Lenders”), and Bank of America,N.A. as agent and sole lead arranger, that is secured by certain assets of the Company and the guarantors. The Second A/R Loan Agreement provides for aggregateborrowings of up to $250.0 million subject to a borrowing base, under the Revolving Facility. As of December 31, 2015 , we had $45.0 million in outstandingborrowings under the Revolving Facility.The negative covenants in the 2018 Notes and the Second A/R Loan Agreement allow us to incur additional indebtedness from other sources in certaincircumstances.As a result of our existing indebtedness and our capacity to incur additional indebtedness, we are, and anticipate continuing to be, a highly leveraged company.A significant portion of our cash flow will be required to pay interest and principal on our outstanding indebtedness, and we may be unable to generate sufficientcash flow from operations, or have future borrowings available under our Revolving Facility, to enable us to repay our indebtedness, including the 2018 Notes, orto fund other liquidity needs. This level of indebtedness could have important consequences, including the following:•it requires us to use a significant percentage of our cash flow from operations for debt service and the repayment of our indebtedness, includingindebtedness we may incur in the future, and such cash flow may not be available for other purposes;•it limits our ability to borrow money or sell stock to fund our working capital, capital expenditures, acquisitions and debt service requirements;•our interest expense could increase if interest rates in general increase because a portion of our indebtedness bears interest at floating rates;•it may limit our flexibility in planning for, or reacting to, changes in our business and future business opportunities;•we are more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;•it may make us more vulnerable to a downturn in our business or the economy;•it may increase our cost of borrowing;•it may restrict us from exploiting business opportunities;•the debt service requirements of our indebtedness could make it more difficult for us to make payments on the 2018 Notes and our other indebtedness; and•there would be a material adverse effect on our business and financial condition if we were unable to service our indebtedness or obtain additionalfinancing, as needed.We may not be able to generate sufficient cash flows to meet our debt service obligations and may be forced to take other actions to satisfy our obligationsunder our indebtedness, which may not be successful.Our ability to make payments on and to refinance our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash fromour operations in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyondour control.Our business may not generate sufficient cash flow from operations and future sources of capital under the Revolving Facility otherwise may not be availableto us in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. If we complete an acquisition, our debt service requirementscould increase. We may need to refinance or restructure all or a portion of our indebtedness on or before maturity. We may not be able to refinance any of ourindebtedness, including the23 Table of ContentsRevolving Facility and the 2018 Notes, on commercially reasonable terms, or at all. If we cannot service our indebtedness, we may have to take actions such asselling assets, seeking additional equity, reducing or delaying capital expenditures, strategic acquisitions, investments and alliances or restructuring or refinancingour indebtedness. We may not be able to effect such actions, if necessary, on commercially reasonable terms, or at all.Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants. These alternative measures may notbe successful and may not permit us to meet our scheduled debt service obligations. In the absence of such cash flows and resources, we could face substantialliquidity problems and might be required to sell material assets or operations to attempt to meet our debt service and other obligations. The Second A/R LoanAgreement and the Indenture restrict our ability to conduct asset sales and / or use the proceeds from asset sales. We may not be able to consummate these assetsales to raise capital or sell assets at prices and on terms that we believe are fair and any proceeds that we do receive may not be adequate to meet any debt serviceobligations then due. If we cannot meet our debt service obligations, the holders of our debt may accelerate our debt and, to the extent such debt is secured,foreclose on our assets. In such an event, we may not have sufficient assets to repay all of our debt.We may still be able to incur significantly more debt or make certain restricted payments in the future. This could intensify already-existing risks related toour indebtedness.The terms of the Indenture and the Second A/R Loan Agreement contain restrictions on our and the guarantors’ ability to incur additional indebtedness.However, these restrictions are subject to a number of important qualifications and exceptions and the indebtedness incurred in compliance with these restrictionscould be substantial. Accordingly, we or the guarantors could incur significant additional indebtedness in the future, much of which could constitute secured, senioror pari passu indebtedness. As of December 31, 2015 , our Revolving Facility provided for unused borrowing capacity of up to $131.2 million (after taking intoaccount $11.3 million of undrawn letters of credit, $4.0 million of other availability reserves, and $45.0 million in outstanding borrowings under the RevolvingFacility).The Indenture permits us to incur certain additional secured debt, allows our non-guarantor subsidiaries to incur additional debt, and does not prevent us fromincurring other liabilities that do not constitute indebtedness as defined in the Indenture.The Indenture also, under certain circumstances, allows us to designate some of our restricted subsidiaries as unrestricted subsidiaries. Those unrestrictedsubsidiaries will not be subject to many of the restrictive covenants in the Indenture and therefore will be able to incur indebtedness beyond the limitationsspecified in the Indenture and engage in other activities in which restricted subsidiaries may not engage. If new debt is added to our currently anticipated debtlevels, the related risks that we and the guarantors now face could intensify.We may also consider investments in joint ventures or acquisitions, which may increase our indebtedness. Moreover, although the Second A/R LoanAgreement and the Indenture contain restrictions on our ability to make restricted payments, including the declaration and payment of dividends, we will be able tomake substantial restricted payments under certain circumstances.The amount of borrowings permitted under our Revolving Facility may fluctuate significantly, which may adversely affect our liquidity, results ofoperations and financial position.The amount of borrowings permitted at any time under our Revolving Facility is limited to a periodic borrowing base valuation of, among other things, ouraccounts receivable, inventory, and mixer trucks. As a result, our access to credit under our Revolving Facility is potentially subject to significant fluctuationsdepending on the value of the borrowing base eligible assets as of any measurement date, as well as certain discretionary rights of the administrative agent of ourRevolving Facility in respect to the calculation of such borrowing base value. Our inability to borrow under, or the early termination of, our Revolving Facilitymay adversely affect our liquidity, results of operations and financial position.Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.Borrowings under our Revolving Facility are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt serviceobligations on the variable rate indebtedness could increase even though the amount borrowed remains the same, and our net income and cash flows, includingcash available for servicing our indebtedness, would correspondingly decrease.24 Table of ContentsRepayment of our debt is dependent on cash flow generated by our subsidiaries.We are a holding company and substantially all of our tangible assets are owned by our subsidiaries. As such, repayment of our indebtedness, to a certaindegree, is dependent on the generation of cash flow by our subsidiaries (including any subsidiaries that are not guarantors) and their ability to make such cashavailable to us, by dividend, loan, debt repayment or otherwise. Our subsidiaries may not be able to, or be permitted to, make distributions or other payments toenable us to make payments in respect of our indebtedness. Each of our subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractualrestrictions may limit our ability to obtain cash from our subsidiaries. While the terms of the Indenture and the Second A/R Loan Agreement limit the ability ofcertain of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments, these limitations are subject toimportant qualifications and exceptions. In the event that we do not receive distributions or other payments from our subsidiaries, we may be unable to makerequired payments on our indebtedness.We may be unable to refinance our indebtedness.We may need to refinance all or a portion of our indebtedness, including the Revolving Facility and the 2018 Notes, before maturity. We cannot assure youthat we will be able to refinance any of our indebtedness on commercially reasonable terms or at all or that we will be able to obtain sufficient funds to enable us torepay or refinance our debt obligations on commercially reasonable terms, or at all.A lowering or withdrawal of the ratings assigned to our debt securities by rating agencies may increase our future borrowing costs and reduce our accessto capital.Our debt currently has a non-investment grade rating, and any rating assigned could be lowered or withdrawn entirely by a rating agency if, in that ratingagency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant. Consequently, real or anticipated changes in ourcredit ratings will generally affect the market value of the 2018 Notes. Credit ratings are not recommendations to purchase, hold or sell the 2018 Notes.Additionally, credit ratings may not reflect the potential effect of risks relating to the structure of the 2018 Notes.Our debt agreements may restrict our ability to operate our business and to pursue our business strategies.The Second A/R Loan Agreement and the Indenture impose, and future financing agreements are likely to impose, operating and financial restrictions on ouractivities. These restrictions require us to comply with or maintain certain financial tests and limit or prohibit our ability to, among other things:•incur additional indebtedness or issue disqualified stock or preferred stock;•pay dividends or make other distributions, repurchase or redeem our stock or subordinated indebtedness or make certain investments;•prepay, redeem or repurchase certain debt;•sell assets and issue capital stock of our restricted subsidiaries;•incur liens;•enter into agreements restricting our restricted subsidiaries’ ability to pay dividends, make loans to other U.S. Concrete entities or restrict the ability toprovide liens;•enter into transactions with affiliates;•consolidate, merge or sell all or substantially all of our assets;•engage in certain sale / leaseback transactions; and•with respect to the Indenture, designate our subsidiaries as unrestricted subsidiaries.The restrictive covenants in the Second A/R Loan Agreement also require us to maintain specified financial ratios and satisfy other financial condition tests incertain circumstances.These restrictions on our ability to operate our business could seriously harm our business by, among other things, limiting our ability to take advantage offinancing, merger and acquisition and other corporate opportunities.25 Table of ContentsVarious risks, uncertainties and events beyond our control could affect our ability to comply with these covenants and maintain these financial tests. Failure tocomply with any of the covenants in our existing or future financing agreements could result in a default under those agreements and under other agreementscontaining cross-default provisions. A default would permit lenders to accelerate the maturity of the debt under these agreements and to foreclose upon anycollateral securing the debt. Under these circumstances, we might not have sufficient funds or other resources to satisfy all of our obligations. In addition, thelimitations imposed by financing agreements on our ability to incur additional debt and to take other actions might significantly impair our ability to obtain otherfinancing. We cannot assure you that we will be granted waivers or amendments to these agreements if for any reason we are unable to comply with theseagreements or that we will be able to refinance our debt on terms acceptable to us, or at all. In addition, an event of default under the Second A/R Loan Agreementwould permit the lenders under our Revolving Facility to terminate all commitments to extend further credit under that facility. Furthermore, if we were unable torepay the amounts due and payable under our Revolving Facility, those lenders could proceed against the collateral granted to them to secure that indebtedness.As a result of these restrictions, we may be:• limited in how we conduct our business;• unable to raise additional debt or equity financing to operate during general economic or business downturns; or• unable to compete effectively or to take advantage of new business opportunities.These restrictions, along with restrictions that may be contained in agreements evidencing or governing future indebtedness, may affect our ability to grow inaccordance with our growth strategy.Our failure to comply with the covenants contained in the Second A/R Loan Agreement, the Indenture or any other indebtedness, including as a result ofevents beyond our control, could result in an event of default which could materially and adversely affect our operating results and our financial condition.The Revolving Facility contains certain covenants, including compliance with a fixed charge coverage ratio if our Availability (as defined in the Second A/RLoan Agreement) falls below a certain threshold. In addition, the Revolving Facility requires us to comply with various operational and other covenants. See Item7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations ” under the heading “Liquidity and Capital Resources ” for adiscussion of the financial covenants contained in the Second A/R Loan Agreement. Agreements governing our other indebtedness may also contain variouscovenants. If there were an event of default under any of our debt instruments that was not cured or waived, the holders of the defaulted debt could cause allamounts outstanding with respect to the debt to be due and payable immediately. Our assets and cash flow may not be sufficient to fully repay all obligations underour outstanding debt instruments, either upon maturity or if accelerated upon an event of default. If we were required to repurchase any of our debt securities upona change of control, we may not be able to refinance or restructure the payments on those debt securities. If, as or when required, we are unable to repay, refinanceor restructure our indebtedness under, or amend the covenants contained in, the Second A/R Loan Agreement, the lenders thereunder could elect to terminate theircommitments thereunder, cease making further loans and institute foreclosure proceedings against the collateral that secures the obligations under the RevolvingFacility on a first-priority basis and secures the 2018 Notes on a second-priority basis. If, as or when required, we are unable to repay, refinance or restructure ourindebtedness under, or amend the covenants contained in, the Indenture, the holders of the 2018 Notes could institute foreclosure proceedings against the collateralthat secures the 2018 Notes on a first-priority basis and secures the obligations under the Revolving Facility on a second-priority basis. Any such actions couldforce us into bankruptcy or liquidation.Moreover, the Second A/R Loan Agreement provides the lenders considerable discretion to impose reserves or availability blocks, which could materiallyimpair the amount of borrowings that would otherwise be available to us. There can be no assurance that the lenders under the Revolving Facility will not take suchactions during the term of that facility and, further, were they to do so, the resulting impact of such actions could materially and adversely impair our ability tomake interest payments on the 2018 Notes, among other matters.Common Stock Investment RisksWe do not intend to pay dividends on our common stock.We have not declared or paid any dividends on our common stock to date, and we do not anticipate paying any dividends on our common stock in theforeseeable future. We intend to reinvest all future earnings in the development and growth of our business.26 Table of ContentsIn addition, our Second A/R Loan Agreement and the Indenture prohibit us from paying dividends and future loan agreements may also prohibit the payment ofdividends. Any future determination relating to our dividend policy will be at the discretion of our board of directors and will depend on our results of operations,financial condition, capital requirements, business opportunities, contractual restrictions and other factors deemed relevant. To the extent we do not pay dividendson our common stock, investors must look solely to stock appreciation for a return on their investment in our common stock.Our stock price may be volatile.In recent years, the stock market has experienced significant price and volume fluctuations that are often unrelated to the operating performance of specificcompanies. The market price of our common stock may fluctuate based on a number of factors, including:• our operating performance and the performance of other similar companies;• news announcements relating to us or our competitors, the job market in general and unemployment data;• changes in earnings estimates or recommendations by research analysts;• changes in general economic conditions;• the arrival or departure of key personnel;• acquisitions or other transactions involving us or our competitors; and• other developments affecting us, our industry or our competitors.Our amended and restated certificate of incorporation, third amended and restated bylaws and Delaware law contain provisions that could discourageacquisition bids or merger proposals, which may adversely affect the market price of our common stock.Provisions in our amended and restated certificate of incorporation, our third amended and restated bylaws and applicable provisions of the GeneralCorporation Law of the State of Delaware may make it more difficult or expensive for a third party to acquire control of us even if a change of control would bebeneficial to the interests of our stockholders. These provisions could discourage potential takeover attempts and could adversely affect the market price of ourcommon stock. In addition, Delaware law prohibits us from engaging in any business combination with any “interested stockholder,” meaning generally that astockholder who beneficially owns more than 15% of our common stock cannot acquire us for a period of three years from the date this person became aninterested stockholder, unless various conditions are met, such as approval of the transaction by our board of directors.Item 1B. Unresolved Staff CommentsNone.27 Table of ContentsItem 2. PropertiesFacilitiesReady-mixed Concrete SegmentThe table below lists our concrete plant facilities as of December 31, 2015 . We believe these plants are sufficient for our current needs. The volumes shownare the volumes each location produced in 2015 . Owned Leased Volume(in thousandsof cubic yards)Locations FixedStandard Volumetric Portable FixedStandard Portable Total California 18 — 2 2 — 22 1,944New Jersey / New York / Washington,D.C. 32 — — 4 — 36 1,695Texas / Oklahoma 74 16 7 — — 97 3,384U.S. Virgin Islands 4 — — 1 5 15Total Ready-Mixed ConcreteSegment 128 16 9 7 — 160 7,038 Aggregate Products SegmentThe table below lists our aggregate facilities as of December 31, 2015 . The volumes shown are the volumes each location produced in 2015 .Locations Owned Leased Total Volume (in thousands oftons)New Jersey 4 — 4 2,219Texas / Oklahoma 4 4 8 2,366U.S. Virgin Islands 2 — 2 103Total Aggregate Products Segment 10 4 14 4,688We produce crushed stone aggregates, sand and gravel, from 14 aggregates facilities located in Texas, Oklahoma, New Jersey and the U.S. Virgin Islands. Wealso own two aggregate quarries that are leased to third parties for which we receive a royalty based on the volume of product produced and sold from the quarriesduring the term of the lease. We sell aggregates produced from the 14 facilities in Texas, Oklahoma, New Jersey and the U.S. Virgin Islands for use in commercial,industrial and public works projects in the markets they serve, as well as consume them internally in the production of ready-mixed concrete in those markets. Weproduced approximately 4.7 million tons of aggregates in 2015 , with Texas representing 51% , New Jersey representing 47% , and the U.S. Virgin Islandsrepresenting 2% o f that total production. We believe our aggregates reserves provide us with additional raw materials sourcing flexibility and supply availability.Other Non-Reportable SegmentsIn our other non-reportable segments, we own two lime slurry operations in Dallas / Ft. Worth, Texas; own one concrete block plant in the U.S. Virgin Islands;lease three aggregates distribution terminals in Brooklyn, New York; lease one industrial waterfront property which operates as a marine terminal and sales yard inthe U.S. Virgin Islands; and lease one recycled aggregates facility in Queens, New York.28 Table of ContentsEquipmentAs of December 31, 2015 , we had a fleet of over 1,360 owned and leased drum mixer trucks, 119 owned volumetric mixer trucks, and over 1,325 otherrolling stock and vehicles. Our own mechanics service most of the fleet. We believe these vehicles generally are well maintained and are adequate for ouroperations. The average age of our owned drum mixer trucks is approximately ten years. The average age of our volumetric mixer trucks is approximately nineyears.For additional information related to our properties, see Item 1. Business of this report.Item 3. Legal Proceedings The information set forth under the heading “Legal Proceedings” in Note 22, “Commitments and Contingencies,” to our consolidated financial statementsincluded in this report is incorporated by reference into this Item 3. Item 4. Mine Safety DisclosuresThe information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform andConsumer Protection Act and Item 104 of Regulation S-K is included in exhibit 95.1 to this annual report.29 Table of ContentsPART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesOur common stock is traded on the NASDAQ Capital Market under the ticker symbol “USCR.”As of February 25, 2016, we had approximately 97 holders of record of our common stock and approximately 8,700 beneficial holders of our common stock. The following table sets forth, for the periods indicated, the range of high and low sales prices for our common stock: 2015 2014 High Low High LowFirst Quarter $34.24 $25.02 $28.64 $20.60Second Quarter $40.93 $32.58 $25.96 $22.38Third Quarter $57.57 $36.37 $26.93 $24.02Fourth Quarter $62.82 $45.03 $29.38 $21.48We have not declared or paid any dividends since our formation and currently do not intend to pay dividends for the foreseeable future. Additional informationconcerning restrictions on our payment of cash dividends may be found in “Management’s Discussion and Analysis of Financial Condition and Results ofOperations—Liquidity and Capital Resources” in Item 7 of this report and Note 9, "Debt," to our consolidated financial statements included in this report, underthe sub-headings "Senior Secured Credit Facility" and "Senior Secured Notes due 2018."Issuer Purchases of Equity SecuritiesUpon vesting of restricted stock awarded by the Company to employees, the Company may withhold shares to cover employee tax withholding obligations,other than for employees who have elected to satisfy their tax withholding requirements in the form of a cash payment. Our share repurchase program wasapproved by our board of directors on May 15, 2014 and allows us to repurchase up to $50.0 million of our common stock until the earlier of March 31, 2017 or adetermination by our board of directors to discontinue the repurchase program. The repurchase program does not obligate us to acquire any specific number ofshares. Total number ofshares purchased Average price paidper share Total number ofshares purchased aspart of publiclyannounced plans orprograms Approximate dollarvalue of shares thatmay yet be purchasedunder the plans orprograms(in thousands)October 1, 2015 to October 31, 2015 189 $52.44 — $45,176November 1, 2015 to November 30, 2015 — — — 45,176December 1, 2015 to December 31, 2015 53 59.71 — 45,176Total 242 $54.03 — $45,17630 Table of ContentsPerformance Graph The following performance graph compares the cumulative total return to holders of our common stock, since January 1, 2011 with the cumulative totalreturns of the Russell 2000 index and a peer group selected by the Company. The graph assumes that the value of the investment in the Company's common stock,Russell 2000 index and the peer group was $100 on January 1, 2011 and is calculated assuming the quarterly reinvestment of dividends as applicable. Our peergroup is defined as Cemex, S.A.B. de C.V., Eagle Materials Inc., Martin Marietta Materials Inc. and Vulcan Materials Company.The above performance graph and related information shall not be deemed "soliciting material" or to be "filed" with the Securities and ExchangeCommission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of1934, each as amended, except to the extent that the Company specifically incorporates it by reference into such filing.31 Table of ContentsItem 6. Selected Financial DataThe following table provides selected condensed consolidated financial data for the periods shown (in thousands). The data has been derived from our auditedconsolidated financial statements. Our results are not necessarily indicative of future performance or results of operations. All of the data in the table should beread in conjunction with Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and our consolidated financialstatements and related notes included in this report. 2015 2014 2013 2012 2011 (in thousands, except per share data)FOR THE YEAR Revenue $974,717 $703,714 $598,155 $517,221 $428,036Net income (loss) from continuing operations $25,820 $21,575 $(18,273) $(24,351) $(7,925)Loss from discontinued operations, net of taxes (1) $(320) $(993) $(1,856) $(1,388) $(3,778)Net income (loss) $25,500 $20,582 $(20,129) $(25,739) $(11,703)PER SHARE INFORMATION Basic income (loss) per share: Income (loss) from continuing operations $1.83 $1.59 $(1.42) $(2.00) $(0.66)Loss from discontinued operations, net of taxes (0.02) (0.07) (0.14) (0.11) (0.31)Net income (loss) per share - basic $1.81 $1.52 $(1.56) $(2.11) $(0.97)Diluted income (loss) per share: Income (loss) from continuing operations $1.66 $1.55 $(1.42) $(2.00) $(0.66)Loss from discontinued operations, net of taxes (0.02) (0.07) (0.14) (0.11) (0.31)Net income (loss) per share - diluted $1.64 $1.48 $(1.56) $(2.11) $(0.97)POSITION AS OF END OF YEAR Total assets $712,902 $460,528 $413,990 $279,724 $269,654Total debt $281,749 $220,437 $214,144 $63,459 $61,086 (1) Our results for 2011 - 2013 have been recast to reflect our Pennsylvania precast operation as discontinued operations, as a result of its reclassification to heldfor sale effective as of December 31, 2014. We completed the sale of this operation in June 2015.32 Table of ContentsItem 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsStatements we make in the following discussion that express a belief, expectation or intention, as well as those that are not historical fact are forward-lookingstatements that are subject to various risks, uncertainties and assumptions. Our actual results, performance or achievements, or market conditions or industryresults, could differ materially from those we express in the following discussion as a result of a variety of factors, including the risks and uncertainties to whichwe refer under the headings “Cautionary Statement Concerning Forward-Looking Statements” preceding Item 1 of this report and “Risk Factors” in Item 1A ofthis report.Our BusinessWe are a leading producer of ready-mixed concrete in select geographic markets in the United States. We operate our business through two primary segments:(i) ready-mixed concrete and (ii) aggregate products. The results of operations for our Pennsylvania precast operation, which was sold on June 2, 2015, have beenincluded in discontinued operations for the periods presented.Ready-mixed concrete . Our ready-mixed concrete segment (which represented 89.9% of our revenue for the year ended December 31, 2015 ) engagesprincipally in the formulation, production and delivery of ready-mixed concrete to our customers’ job sites. We provide our ready-mixed concrete from ouroperations in Texas, northern California, New Jersey, New York, Washington, D.C., Oklahoma, and the U.S. Virgin Islands. Ready-mixed concrete is a highlyversatile construction material that results from combining coarse and fine aggregates, such as gravel, crushed stone and sand, with water, various chemicaladmixtures and cement. We also provide services intended to reduce our customers’ overall construction costs by lowering the installed, or “in-place,” cost ofconcrete. These services include the formulation of mixtures for specific design uses, on-site and lab-based product quality control, and customized deliveryprograms to meet our customers’ needs.Aggregate products . Our aggregate products segment (which represented 3.5% of our revenue for the year ended December 31, 2015 , excluding $26.2million of intersegment sales) produces crushed stone, sand and gravel from 14 aggregates facilities located in New Jersey, Texas, Oklahoma, and the U.S. VirginIslands. We sell these aggregates for use in commercial, industrial and public works projects, as well as consume them internally in the production of ready-mixedconcrete. We produced approximately 4.7 million tons of aggregates during the year ended December 31, 2015 , with Texas representing 51% , New Jerseyrepresenting 47% , and the U.S. Virgin Islands representing 2% of the total production. We consumed 50% of our aggregate production internally and sold 50% tothird-party customers in 2015 . We believe our aggregates reserves provide us with additional raw materials sourcing flexibility and supply availability. In addition,we own sand pit operations in Michigan and one quarry in west Texas, which we lease to third parties and receive a royalty based on the volumes produced andsold during the terms of the leases.OverviewThe geographic markets for our products are generally local, and our operating results are subject to fluctuations in the level and mix of construction activitythat occur in our markets. The level of activity affects the demand for our products, while the product mix of activity among the various segments of theconstruction industry affects both our relative competitive strengths and our operating margins. Commercial and industrial projects generally provide moreopportunities to sell value-added products that are designed to meet the high-performance requirements of those types of projects.Our customers are generally involved in the construction industry, which is a cyclical business and is subject to general and more localized economicconditions. In addition, our business is impacted by seasonal variations in weather conditions, which vary by regional market. Accordingly, because of inclementweather, demand for our products and services during the winter months are typically lower than in other months of the year. Also, sustained periods of inclementweather and other adverse weather conditions could cause the delay of construction projects during other times of the year.From 2007 through 2011, construction slowed significantly, which resulted in a decline in the demand for ready-mixed concrete. However, construction andrelated demand for ready-mixed concrete has improved since 2011. For the year ended December 31, 2015 , our ready-mixed concrete sales volume increased23.6% to 7.0 million cubic yards from 5.7 million cubic yards for the year ended December 31, 2014 . Sales volume for the year ended December 31, 2015 was upin all of our major markets, except west Texas, as compared to the year ended December 31, 2014 primarily due to increased construction activity and ready-mixedsegment acquisitions completed in 2015 and 2014. Volume in our west Texas market has decreased slightly due to the decline in WTI prices. For the year endedDecember 31, 2015, we estimate that there was no direct impact and less than a 3.0% indirect impact on revenue in our Texas markets by the decline in WTI prices.Total ready-mixed concrete revenue in all of our markets rose due to recent acquisitions and increased average selling price. Our consolidated average ready-mixed concrete sales prices rose 11.8% from 2014 to 2015 , resulting in the 5th consecutive fiscal33 Table of Contentsyear of increased average selling prices. Higher volumes have allowed us to spread our fixed costs over more cubic yards. However, we also experienced highercement and aggregate costs during fiscal year 2015, which have partially offset these improvements. We continue to closely monitor our operating costs and capitalexpenditures.Basis of Presentation We operate our business in two reportable segments: (1) ready-mixed concrete and (2) aggregate products. Our ready-mixed concrete segment produces andsells ready-mixed concrete. This segment serves the following principal markets: Texas, northern California, New York, New Jersey, Washington, D.C.,Oklahoma, and the U.S. Virgin Islands. Our aggregate products segment sells crushed stone, sand and gravel products and serves north and west Texas, southernOklahoma, New York, New Jersey, and the U.S. Virgin Islands markets in which our ready-mixed concrete segment operates.Our chief operating decision maker evaluates segment performance and allocates resources based on Adjusted EBITDA. We define Adjusted EBITDA as netincome (loss) from continuing operations excluding interest, income taxes, depreciation, depletion and amortization, derivative gain (loss), gain (loss) onrevaluation of contingent consideration, and gain (loss) on extinguishment of debt. Additionally, Adjusted EBITDA is adjusted for items similar to certain of thoseused in calculating the Company’s compliance with debt covenants. The additional items that are adjusted to determine our Adjusted EBITDA are:•non-cash stock compensation expense;•corporate officer severance expense; and•acquisition-related professional fees.We consider Adjusted EBITDA an indicator of the operational strength and performance of our business. We have included Adjusted EBITDA because it is akey financial measure used by our management to (i) internally measure our operating performance and (ii) assess our ability to service our debt, incur additionaldebt and meet our capital expenditure requirements.Adjusted EBITDA should not be construed as an alternative to, or a better indicator of, net income or loss, is not based on accounting principles generallyaccepted in the United States of America ("U.S. GAAP"), and is not necessarily a measure of our cash flows or ability to fund our cash needs. Our measurementsof Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. See Note 19, "Business Segments," to our consolidatedfinancial statements included in this report for additional information regarding our segments and the reconciliation of Adjusted EBITDA to income (loss) fromcontinuing operations before taxes.In June 2015, we completed the sale of our one remaining precast concrete operation in Pennsylvania. This operation's assets and liabilities were classified asheld for sale in the accompanying consolidated balance sheet effective as of December 31, 2014. The results of operations for our Pennsylvania precast operationsare included in discontinued operations for the periods presented.Liquidity and Capital ResourcesOur primary liquidity needs over the next 12 months consist of (i) financing seasonal working capital requirements; (ii) servicing our indebtedness; (iii)purchasing property and equipment; and (iv) payments related to strategic acquisitions. Our portfolio strategy includes strategic acquisitions and divestitures invarious regions and markets; and we may seek financing for acquisitions, including additional debt or equity capital.Our working capital needs are typically at their lowest level in the first quarter, increase in the second and third quarters to fund increases in accountsreceivable and inventories during those periods, and then decrease in the fourth quarter. Availability under the Second A/R Loan Agreement is governed by aborrowing base primarily determined by our eligible accounts receivable, inventory, mixer trucks and, after the occurrence of certain events, machinery (describedbelow). While our working capital needs are typically at their lowest in the first quarter, our borrowing base also typically declines during the first quarter due tolower accounts receivable balances as a result of normal seasonality of our business caused by weather.Our availability under the Second A/R Loan Agreement at December 31, 2015 increased to $131.2 million from $109.8 million at December 31, 2014 underthe 2013 Loan Agreement (as defined below), primarily due to increases in eligible accounts receivable and eligible truck balances as well as changes in theSecond A/R Loan Agreement in November 2015 which increased the revolving commitments from $175.0 million to $250.0 million. These increases werepartially offset by increased borrowings under the Revolving Facility. Borrowings outstanding under the Revolving Facility were $45.0 million as of December 31,2015. We had no borrowings outstanding under the Revolving Facility as of December 31, 2014.34 Table of ContentsOur projection of our cash needs is based upon many factors, including without limitation, our forecasted volume, pricing, cost of materials and capitalexpenditures. Based on our projected cash needs, we believe that the Revolving Facility and cash generated from operations will provide us with sufficientliquidity in the ordinary course of business, not including potential acquisitions. If, however, the Revolving Facility and our operating cash flows are not adequateto fund our operations, we would need to obtain an amendment to the Second A/R Loan Agreement, seek other equity or debt financing to provide additionalliquidity, or sell assets.The principal factors that could adversely affect the amount of our internally generated funds include:•deterioration of revenue, due to lower volume and / or pricing, because of weakness in the markets in which we operate;•declines in gross margins due to shifts in our product mix or increases in the cost of our raw materials and fuel;•any deterioration in our ability to collect our accounts receivable from customers as a result of weakening in construction demand or paymentdifficulties experienced by our customers; and•inclement weather beyond normal patterns that could affect our sales volumes.The following key financial measurements reflect our financial position and capital resources as of December 31, 2015 and 2014 (dollars in thousands): 2015 2014Cash and cash equivalents $3,925 $30,202Working capital $(10,706) $62,929Total debt $281,749 $220,437Our cash and cash equivalents consist of highly liquid investments and deposits we hold at major financial institutions.The discussion that follows provides a description of our arrangements relating to our outstanding indebtedness.Senior Secured Notes due 2018On November 22, 2013, we sold $200.0 million of 2018 Notes. We used a portion of the net proceeds from the 2018 Notes to repay all of the outstandingborrowings under the Revolving Facility and to redeem all our outstanding 9.5% senior secured notes due 2015 (the "2013 Notes").The 2018 Notes are governed by the Indenture dated as of November 22, 2013, by and among the Company and U.S. Bank National Association, as trusteeand noteholder collateral agent (the “Notes Collateral Agent”). We are obligated to pay interest on the 2018 Notes on June 1 and December 1 of each year. The2018 Notes mature on December 1, 2018, and are redeemable at our option prior to maturity at prices specified in the Indenture. The Indenture contains negativecovenants that restrict our ability and our restricted subsidiaries' ability to engage in certain transactions, as described below, and also contains customary events ofdefault.The Indenture contains covenants that restrict or limit our ability to, among other things:•incur additional indebtedness or issue disqualified stock or preferred stock;•pay dividends or make other distributions or repurchase or redeem our stock or subordinated indebtedness or make investments;•prepay, redeem or repurchase certain debt;•sell assets or issue capital stock of our restricted subsidiaries;•incur liens;•enter into agreements restricting our restricted subsidiaries’ ability to pay dividends, make loans to other U.S. Concrete entities or restrict the ability toprovide liens;•enter into transactions with affiliates;•consolidate, merge or sell all or substantially all of our assets;•engage in certain sale / leaseback transactions; and35 Table of Contents•designate our subsidiaries as unrestricted subsidiaries.As defined in the Indenture, we are entitled to incur indebtedness if, on the date of such incurrence and given effect thereto on a pro forma basis, theconsolidated coverage ratio exceeds 2.0 to 1.0.Our obligations under the 2018 Notes are jointly and severally and fully and unconditionally guaranteed on a senior secured basis by each of our existing andfuture domestic subsidiaries that guarantee the indebtedness under our Revolving Facility. Each guarantee is subject to release in the following customarycircumstances:•a disposition of all or substantially all of the assets of the guarantor subsidiary, by way of merger, consolidation or otherwise; provided the proceeds of thedisposition are applied in accordance with the Indenture;•a disposition of the capital stock of the guarantor subsidiary to a third person, if the disposition complies with the Indenture and as a result the guarantorsubsidiary ceases to be a restricted subsidiary;•the designation by us of the guarantor subsidiary as an unrestricted subsidiary or the guarantor subsidiary otherwise ceases to be a restricted subsidiary, ineach case in accordance with the Indenture; or•legal or covenant defeasance of the 2018 Notes and discharge of our obligations under the Indenture.The 2018 Notes were issued by U.S. Concrete, Inc., the parent company, and are guaranteed on a full and unconditional basis by each of its indirect whollyowned subsidiaries. The guarantees are joint and several, and there are no non-guarantor subsidiaries. U.S. Concrete, Inc. does not have any independent assets oroperations. There are no significant restrictions on the ability of the Company or any guarantor to obtain funds from its subsidiaries by dividend or loan.The 2018 Notes and the guarantees thereof rank equally in right of payment with all of our existing and future senior indebtedness. The 2018 Notes and theguarantees thereof are secured by first-priority liens on certain of the property and assets directly owned by us, including material owned real property, fixtures,intellectual property, capital stock of subsidiaries and certain equipment, subject to permitted liens and certain exceptions, and by a second-priority lien on ourassets securing the Revolving Facility on a first-priority basis, including inventory (including as-extracted collateral), accounts, certain specified mixer trucks,chattel paper, general intangibles (other than collateral securing the 2018 Notes on a first-priority basis), instruments, documents, cash, deposit accounts, securitiesaccounts, commodities accounts, letter of credit rights and all supporting obligations and related books and records and all proceeds and products of the foregoing,subject to permitted liens and certain exceptions. The 2018 Notes and the guarantees thereof are effectively subordinated to all indebtedness and other obligations,including trade payables, of each of our future subsidiaries that are not guarantors.Senior Secured Credit FacilityOn October 29, 2013, we entered into a Loan and Security Agreement (the "2013 Loan Agreement") with the Lenders and the administrative agent, whichamended and restated our existing credit agreement and provides us with the Revolving Facility. On November 18, 2015, we entered into the Second A/R LoanAgreement which amended and restated the 2013 Loan Agreement. Among other things, the Second A/R Loan Agreement increased the revolving commitmentsfrom $175.0 million to $250.0 million and extended the maturity date to the earlier of (i) November 18, 2020 or (ii) sixty days prior to the maturity date of the 2018Notes (if then outstanding) or the refinancing of debt thereof, as applicable. The Second A/R Loan Agreement also included an accordion feature that allows forincreases in the total revolving commitments by as much as $100.0 million. Additionally, the applicable margin for each of the LIBOR loans and base rate loanswas lowered so that, depending on the average availability under the Second A/R Loan Agreement, the applicable margin ranges from 1.25% to 1.75% for LIBORloans and 0.00% to 0.50% for base rate loans. As of December 31, 2015 , we had $45.0 million of outstanding borrowings on the Second A/R Loan Agreement.The weighted average interest rate for the Second A/R Loan Agreement was 1.77% as of December 31, 2015 . As of December 31, 2014, we had no outstandingborrowings under the Revolving Facility. As of both December 31, 2015 and 2014, we had $11.3 million of undrawn standby letters of credit under the RevolvingFacility.Our actual maximum credit availability under the Revolving Facility varies from time to time and is determined by calculating the value of our eligibleaccounts receivable, inventory, mixer trucks and, after the occurrence of certain events, machinery, which serve as priority collateral on the facility, minus reservesimposed by the Lenders and other adjustments, all as specified in the Second A/R Loan Agreement and discussed further below. Our availability under theRevolving Facility at December 31, 2015 increased to $131.2 million from $109.8 million at December 31, 2014 . The Second A/R Loan Agreement also containsa provision for discretionary over-advances and involuntary protective advances by Lenders of up to $25.0 million in excess of calculated36 Table of Contentsborrowing base levels. The Second A/R Loan Agreement provides for swingline loans, up to a $15.0 million sublimit, and letters of credit, up to a $30.0 millionsublimit.Advances under the Revolving Facility are in the form of either base rate loans or “LIBOR loans” denominated in U.S. dollars. The interest rate for base rateloans denominated in U.S. dollars fluctuates and is equal to the greater of (a) Bank of America’s prime rate; (b) the Federal funds rate, plus 0.50% ; or (c) the rateper annum for a 30 days interest period equal to the British Bankers Association LIBOR Rate, as published by Reuters at approximately 11:00 a.m. (London time)two business days prior (“LIBOR”), plus 1.0% ; in each case plus the Applicable Margin, as defined in the Second A/R Loan Agreement. The interest rate forLIBOR loans denominated in U.S. dollars is equal to the rate per annum for the applicable interest period equal to LIBOR, plus the Applicable Margin, as definedin the Second A/R Loan Agreement. Issued and outstanding letters of credit are subject to a fee equal to the Applicable Margin, as defined in the Second A/R LoanAgreement, a fronting fee equal to 0.125% per annum on the stated amount of such letter of credit, and customary charges associated with the issuance andadministration of letters of credit. Among other fees, we pay a commitment fee of either 0.25% or 0.375% per annum (due monthly) on the aggregate unusedrevolving commitments under the Revolving Facility. The fee we pay is determined by whether the amount of the unused line is above or below 50% of theaggregate Revolver Commitments, as defined in the Second A/R Loan Agreement. The Applicable Margin ranges from 0.00% to 0.50% for base rate loans andfrom 1.25% to 1.75% for LIBOR loans, and is determined based on Average Availability for the most recent fiscal quarter, as defined in the Second A/R LoanAgreement.Up to $30.0 million of the Revolving Facility is available for the issuance of letters of credit, and any such issuance of letters of credit will reduce the amountavailable for loans under the Revolving Facility. Advances under the Revolving Facility are limited by a borrowing base which is equal to the least of (a) theaggregate amount of Revolver Commitments minus the LC Reserve, the Senior Notes Availability Reserve, and the Tax Amount, all as defined in the Second A/RLoan Agreement, (b) the sum of (i) 90% of the face amount of eligible accounts receivable (reduced to 85% under certain circumstances), plus (ii) the lesser of (x)70% of the value of eligible inventory or (y) 90% of the product of (A) the net orderly liquidation value of inventory divided by the value of the inventory and (B)multiplied by the value of eligible inventory, and (iii) the sum of (x) (A) 85% of the net orderly liquidation value (as determined by the most recent appraisal) ofeligible trucks and machinery plus (B) 80% of the cost of newly acquired eligible trucks since the date of the latest appraisal of eligible trucks minus (C) 85% ofthe net orderly liquidation value of eligible trucks and machinery that have been sold since the latest appraisal date and 85% of the depreciation amount applicableto eligible trucks and machinery since the date of the latest appraisal of eligible trucks and machinery, plus (y) (A) 85% of the net orderly liquidation value ofeligible machinery (as determined by the most recent appraisal), minus (B) 85% of the net orderly liquidation value of eligible machinery that have been sold sincethe date of the latest appraisal of eligible machinery, minus (C) 85% of the depreciation amount applicable to eligible machinery, minus the Availability Reserve,minus the Tax Amount; provided, notwithstanding anything herein to the contrary, in determining the Borrowing Base pursuant to this clause (b), the value ofmachinery shall only be included after a refinancing of, or amendment to, the 2018 Notes such that the Revolving Facility will have a first lien on machinery, andthe Borrowing Base attributable to the eligible truck and eligible machinery shall not exceed the amount equal to thirty percent ( 30% ) of the Borrowing Base as ofsuch date of determination; or (c) the amount of a borrowing base set forth in the 2018 Notes, minus the greater of (i) $10.0 million and (ii) the amount equal to 5%of such borrowing base set forth in the 2018 Notes; provided however, in any event, clause (c) of the definition of borrowing base shall be permanently terminatedif the 2018 Senior Notes have been amended or refinanced, in each case with the effect that the ABL cap amount in the applicable intercreditor agreement and/orthe documentation governing such refinancing debt shall be no less than 110% of the aggregate Revolver Commitments (terms used in the foregoing description ofborrowing base shall have the definitions provided in the Second A/R Loan Agreement). The administrative agent may, in its permitted discretion, reduce theadvance rates set forth above, adjust reserves or reduce one or more of the other elements used in computing the borrowing base.The Second A/R Loan Agreement contains usual and customary negative covenants including, but not limited to, restrictions on our ability to consolidate ormerge; substantially change the nature of our business; sell, lease or otherwise transfer any of our assets; create or incur indebtedness; create liens; pay dividends;and make investments or acquisitions. The negative covenants are subject to certain exceptions as specified in the Second A/R Loan Agreement. The Second A/RLoan Agreement also requires that we, upon the occurrence of certain events, maintain a fixed charge coverage ratio of at least 1.0 to 1.0 for each period of 12calendar months, as determined in accordance with the Second A/R Loan Agreement. For the trailing 12 month period ended December 31, 2015, our fixed chargecoverage ratio was 3.58 to 1.0. As of December 31, 2015, we were in compliance with all covenants under the Second A/R Loan Agreement.The Second A/R Loan Agreement also includes customary events of default, including, among other things, payment default, covenant default, breach ofrepresentation or warranty, bankruptcy, cross-default, material ERISA events, change of control, material money judgments and failure to maintain subsidiaryguarantees.The Second A/R Loan Agreement is secured by a first-priority lien on certain assets of the Company and our guarantors, including inventory (including as-extracted collateral), accounts receivable, certain specified mixer trucks, general intangibles37 Table of Contents(other than collateral securing the 2018 Notes on a first-priority basis, as described above), instruments, documents, chattel paper, cash, deposit accounts, securitiesaccounts, commodities accounts, letter of credit rights and all supporting obligations and related books and records and all proceeds and products of the foregoing,subject to permitted liens and certain exceptions. The Second A/R Loan Agreement is also secured by a second-priority lien on the collateral securing the 2018Notes as defined below on a first-priority basis (see “Senior Secured Notes due 2018” above).Other DebtFrom 2013 through 2015, we signed a series of promissory notes with Daimler Truck Financial for the purchase of drum mixer trucks and other machinery andequipment totaling $25.3 million aggregate principal with fixed annual interest rates ranging from 2.50% to 3.18% , payable monthly for a term of five years. Also,from 2013 through 2015, we entered into lease agreements with various lenders for the purchase of mixer trucks and other machinery and equipment for a totalcommitment of $20.2 million , with fixed annual interest rates ranging from 2.60% to 4.80% , payable monthly for a term ranging from four to five years. Thelease agreements include a one dollar buyout option at the end of the lease term. Accordingly, these financings have been classified as capital leases.On August 31, 2010, we issued $55.0 million aggregate principal amount of 9.5% Convertible Notes due 2015 (the "Convertible Notes") pursuant to asubscription offering contemplated by our plan of reorganization (the "Plan"). Under the terms of the indenture governing the Convertible Notes, interest accruedat a rate of 9.5% per annum and was payable quarterly in cash in arrears. The notes matured and were paid on August 31, 2015. Concurrently with the issuance ofthe notes, we recorded a discount of approximately $13.6 million related to an embedded derivative that was bifurcated and separately valued (see Note 11,"Derivatives" to our consolidated financial statements included in this report). This discount was accreted over the term of the Convertible Notes and included ininterest expense prior to the Conversion Event, as described below. On March 22, 2013, we completed our offer to exchange (the “Exchange Offer”) up to $69.3 million aggregate principal amount of newly issued 2013 Notesfor all $55.0 million aggregate principal amount of our Convertible Notes. At the time of settlement, we issued $61.1 million aggregate principal amount of 2013Notes in exchange for $48.5 million of Convertible Notes, plus approximately $0.3 million in cash for accrued and unpaid interest on the Convertible Notesexchanged in the Exchange Offer. After giving effect to the exchange, $6.5 million aggregate principal amount of Convertible Notes remained outstanding as ofMarch 22, 2013. In November 2013, we used a portion of the proceeds from our 2018 Notes offering to redeem all $61.1 million of our outstanding 2013 Notes.In accordance with the indenture governing the Convertible Notes, we provided a Conversion Event Notice, as defined in the indenture, to the remainingholders of Convertible Notes on June 18, 2013. Holders had until the close of business on August 2, 2013 (as defined in the indenture, the "ConversionTermination Date") to tender their Convertible Notes for shares of common stock. Prior to August 3, 2013, holders tendered $6.4 million of Convertible Notes andwere issued 0.6 million shares of our common stock. As of August 3, 2013, the remaining Convertible Notes no longer include a conversion feature and ceased toaccrue interest. Our remaining Convertible Notes of $0.1 million were repaid on August 31, 2015.For additional information regarding our arrangements relating to outstanding indebtedness, see the information set forth in Note 9, "Debt," to ourconsolidated financial statements included in this report. Fair Value of Financial InstrumentsOur financial instruments consist of cash and cash equivalents, trade receivables, trade payables, long-term debt, other long-term obligations, and derivativeliabilities. We consider the carrying values of cash and cash equivalents, trade receivables and trade payables to be representative of their respective fair valuesbecause of their short-term maturities or expected settlement dates. The carrying value of outstanding amounts under our Revolving Facility approximates fairvalue due to the floating interest rate. The fair value of our 2018 Notes was estimated to be $207.0 million and $209.0 million as of December 31, 2015 and 2014,respectively, based on broker / dealer quoted market prices. Our Convertible Notes were repaid on August 31, 2015.The fair value of our warrants that were issued on August 31, 2010 (the "Warrants") was $67.4 million and $25.2 million at December 31, 2015 and 2014,respectively. The fair value of our contingent consideration obligations associated with acquisitions was $30.1 million at December 31, 2015 and $5.3 million atDecember 31, 2014 . See (i) Note 11, "Derivatives," to our consolidated financial statements included in this report for further information regarding our derivativeliabilities, (ii) Note 12, "Other Long-Term Obligations and Deferred Credits," regarding our contingent consideration obligations, (iii) Note 13, "Fair ValueDisclosures," regarding our fair value disclosure and (iv) Note 15, "Warrants," regarding the Warrants.38 Table of ContentsCash FlowThe net cash provided by or used in our operating, investing and financing activities is presented below (in thousands): Years Ended December 31, 2015 2014 2013Net cash provided by (used in): Operating activities $104,261 $50,915 $24,180Investing activities (157,835) (118,478) (26,104)Financing activities 27,297 (14,902) 109,840Net (decrease) increase in cash $(26,277) $(82,465) $107,916Our net cash provided by operating activities generally reflects the cash effects of transactions and other events used in the determination of net income orloss.Net cash provided by operating activities was $104.3 million for the year ended December 31, 2015 , compared to $50.9 million for the year endedDecember 31, 2014 and $24.2 million for the year ended December 31, 2013. Our cash provided by operating activities in 2015 was favorably impacted by our netincome for the year of $25.5 million as well as the impact of significant non-cash expenses that were included in our 2015 net income; primarily $60.0 million ofnon-cash loss on derivative, $43.6 million of depreciation, depletion and amortization, and $5.8 million of non-cash stock compensation expense. Partiallyoffsetting this was $37.4 million of deferred income tax benefit.Our cash provided by operating activities in 2014 of $50.9 million was favorably impacted by our net income for the year of $20.6 million as well as theimpact of significant non-cash expenses that were included in our 2014 net income; primarily $23.8 million of depreciation, depletion and amortization, $3.7million of non-cash stock compensation expense, and $3.6 million of non-cash loss on derivative. Partially offsetting this was $4.9 million used to fund workingcapital changes. Our cash provided by operating activities in 2013 was $24.2 million which was also favorably impacted by significant non-cash expenses included in our 2013net loss; primarily $30.0 million of non-cash loss on derivative, $19.0 million of depreciation, depletion and amortization, $5.4 million of non-cash stockcompensation expense, and $2.2 million of non-cash amortization of debt issuance costs, partially offset by $1.0 million of non-cash gain on extinguishment ofdebt, and $14.1 million used to fund working capital changes.We used $157.8 million to fund investing activities in 2015 , $118.5 million in 2014, and $26.1 million in 2013. During 2015, we paid $135.3 million to fundeight acquisitions compared to $89.6 million paid to fund nine acquisition in 2014 and $4.4 million paid to fund one acquisition in 2013. In addition, we paid $25.0million in 2015 for purchases of plant improvements, plant equipment, drum mixer trucks, and other rolling stock compared to $32.6 million in 2014 and $20.0million in 2013. Additionally, in 2015, we received $1.2 million related to the disposal of business units, primarily for the sale of assets in west Texas and the saleof our one remaining precast concrete operation in Pennsylvania. There were no proceeds from disposal of business units in 2014, and we paid $2.3 million in 2013to Oldcastle Precast, Inc. and Jensen Enterprises, Inc., dba Jensen Precast related to the re-acquisition of certain assets and settlement of certain liabilitiesassociated with the disposal of our California and Arizona precast operations in 2012.Our net cash provided by financing activities was $27.3 million in 2015 compared to $14.9 million used in financing activities in 2014 and $109.8 millionprovided by financing activities in 2013. Financing activities in 2015 included $45.0 million of net borrowings under our Revolving Facility to operate ourbusiness and fund acquisitions. In addition, we repaid $8.6 million of capital leases and notes used to fund capital expenditures, paid $6.3 million for the purchaseof treasury shares related to our restricted stock grants, and made the second earn-out payment to the former owners of Bode Gravel Co. and Bode Concrete LLC(the "Bode Earn-out") for $2.3 million. Financing activities in 2014 included the repayment of $5.2 million of capital leases and notes used to fund capitalexpenditures, $4.8 million for the repurchase of our common stock under our share repurchase program, and $2.3 million for the first payment on the Bode Earn-out. Financing activities in 2013 included the proceeds from our $200.0 million 2018 Notes offering, net of related debt issuance costs, redemption of $61.1 millionaggregate principal of our 2013 Notes, and repayment of existing borrowings under our Revolving Facility.39 Table of ContentsOff-Balance Sheet ArrangementsWe do not currently have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition,revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. From time to time, we may enter intononcancelable operating leases that would not be reflected on our balance sheet. For additional discussion on our operating leases, see Note 22, "Commitmentsand Contingencies," to our consolidated financial statements included in this report.CommitmentsThe following are our contractual commitments associated with our indebtedness, lease obligations, and contingent consideration and deferred paymentobligations related to our acquisitions as of December 31, 2015 (in millions): Contractual obligations Total Less Than 1Year 1-3 Years 3-5 Years More Than 5YearsPrincipal on debt $281.7 $9.4 $263.4 $8.8 $0.1Interest on debt (1) 53.5 18.2 35.1 0.2 —Operating leases 65.6 13.5 23.2 10.7 18.2Contingent consideration (2) 41.3 3.0 12.7 16.8 8.8Deferred consideration payments (3) 10.6 4.9 4.8 0.3 0.6Total $452.7 $49.0 $339.2 $36.8 $27.7(1)Consists of estimated interest payments due under the 2018 Notes, capital leases, and other borrowings.(2)Consists of estimated fair value of contingent consideration obligations, including accretion, associated with acquisitions completed from 2012 through2015. The fair value of estimated payouts is based on probability weighted assumptions related to the achievement of various contractual provisions. Asmore fully described in Note 13, "Fair Value Disclosures," to our consolidated financial statements, changes in the fair value of these obligations will occurprior to the final payment in 2021.(3)Consists of deferred consideration obligations, including accretion, associated with acquisitions completed in 2014 and 2015 with terms ranging from one to10 years.The following are our commercial commitments as of December 31, 2015 (in millions): Other commercial commitments Total Less Than 1Year 1-3 Years 3-5 Years More Than 5YearsStandby letters of credit $11.3 $11.3 $— $— $—Performance bonds 16.4 4.8 11.6 — —Total $27.7 $16.1 $11.6 $— $—The following long-term liabilities included on the consolidated balance sheet are excluded from the table above: accrued employment costs, income taxcontingencies, insurance accruals and other accruals. Due to the nature of these accruals, the estimated timing of such payments (or contributions in the case ofcertain accrued employment costs) for these items is not predictable. As of December 31, 2015, the total unrecognized tax benefit related to uncertain tax positionswas $4.1 million . We believe it is unlikely a reduction in our uncertain tax positions will occur within the next 12 months.AcquisitionsOn February 23, 2015 , we acquired the equity of Right Away, located in Oakland, California. The purchase price was $18.0 million in cash, plus closingadjustments of $0.8 million , final working capital adjustments of $1.1 million , and potential future earn-out payments of up to $6.0 million based on theachievement of certain defined annual volume thresholds over a six -year period (the "Right Away Earn-out"). We funded the purchase with cash on hand. Theacquisition included four ready-mixed concrete facilities, 49 mixer trucks and a fleet of transfer trucks used to transport cement and aggregates. The acquisitionexpanded our business in our existing northern California market.On April 1, 2015 , we acquired the equity of Ferrara Bros., located in New York, New York. We acquired the equity of Ferrara Bros. for $45.0 million incash, approximately 442,000 shares of our common stock, calculated in accordance with the terms of the share purchase agreement ("SPA"), and valued atapproximately $15.1 million on the date of issuance, less final working capital adjustments of $0.9 million , plus potential incentive awards in the form of equityof up to $35.0 million based on the achievement40 Table of Contentsof certain EBITDA thresholds, as defined in the SPA, over a four-year period beginning in 2017 ("Ferrara Bros. Contingent Consideration"). We funded thepurchase through a combination of cash on hand and borrowings under our Revolving Facility. Ferrara Bros. operates six ready-mixed concrete plants at its four facilities in New York and New Jersey and a fleet of 89 mixer trucks. The acquisition expanded our presence in the New York metropolitan market and allows usto more effectively serve construction projects in Manhattan.On May 21, 2015 , we acquired the equity of Colonial, located in Newark, New Jersey. The purchase price was $15.0 million in cash, plus closingadjustments of $0.2 million . We funded the purchase through a combination of cash on hand and borrowings under our Revolving Facility. The acquisitionincluded four ready-mixed concrete plants at three locations and a fleet of approximately 40 mixer trucks. The acquisition expanded our business in the NewYork metropolitan and northern New Jersey markets. On May 29, 2015 , we acquired the assets of DuBrook, located in Chantilly, Virginia, part of the greater Washington, D.C. metropolitan area. The purchaseprice was $11.5 million in cash, plus potential future earn-out payments based on volumes sold over a four -year period (the "DuBrook Earn-out"). The DuBrookEarn-out payments are not capped; however, we do not expect total payments to be in excess of $1.0 million . We funded the purchase through a combination ofcash on hand and borrowings under our Revolving Facility. The acquisition included three ready-mixed concrete plants and a fleet of 42 mixer trucks. Thepurchase of these assets expanded our existing business in the Washington, D.C. metropolitan area.On September 24, 2015 , we acquired Wantage reserves, a site development quarry including an 80 acre quarry along with mining rights to anadditional 77 acres of land located in Hamburg, New Jersey, from Bicsak Brothers Realty, LLC and Wantage Stone, LLC. We have operated the Wantage quarryunder a lease agreement since October 2014. The purchase price was $15.2 million in cash plus deferred payments of $3.0 million payable over a three -yearperiod. We funded the purchase through a combination of cash on hand and borrowings under our Revolving Facility. This acquisition expanded our aggregatesoperations in our New York and New Jersey markets.On October 27, 2015 , we acquired the equity of Heavy, a vertically integrated ready-mixed concrete producer located in the U.S. Virgin Islands. We acquiredthe equity of Heavy for $21.7 million in cash, less purchase adjustments of $0.8 million , plus deferred payments of $5.0 million , which will be paid over a two year period. We funded the purchase through a combination of cash on hand and borrowings on our Revolving Facility. Heavy operates four ready-mixedconcrete plants, a fleet of 32 mixer trucks, and two quarries. Heavy also leases an industrial waterfront property that it utilizes as a marine terminal and salesyard. This acquisition expands our ready-mixed concrete and aggregates operations into new markets in the Caribbean islands.During the year ended December 31, 2015 , we also completed two other individually immaterial acquisitions comprised of two sand and gravel operationsnear Vernon, Texas and Waurika, Oklahoma and a ready-mixed concrete operation in the U.S. Virgin Islands. The aggregate consideration paid consisted of $12.9million in cash and $1.9 million in deferred payments payable within ten years. We funded these purchases through a combination of cash on hand and borrowingsunder our Revolving Facility. The acquisition of these assets expanded our business in our existing markets and the Caribbean markets.DivestituresSale of Pennsylvania Precast OperationsOn June 2, 2015, we completed the sale of substantially all of our assets associated with our one remaining precast concrete operation in Pennsylvania. Wesold the operation's fixed assets and inventory for net proceeds of $0.3 million in cash and a promissory note of $1.2 million , net of a $0.1 million discount, andrecorded a pre-tax loss on the transaction of $0.2 million . The pre-tax loss is included in discontinued operations in the accompanying condensed consolidatedstatements of operations. This sale represented the final divestiture of the Company's owned assets related to precast concrete operations, which were classified asheld for sale as of December 31, 2014.For additional discussion on our acquisitions and divestitures, see Note 2, "Acquisitions and Dispositions" to our consolidated financial statements included inthis report.41 Table of ContentsResults of OperationsYear Ended December 31, 2015 Compared to Year Ended December 31, 2014The following table sets forth selected historical statement of operations information and that information as a percentage of revenue for each of the periodsindicated, as well as the increase or decrease from the prior year in dollars and percent. (amounts in thousands, except selling prices) Years Ended December 31, Increase / (Decrease) 2015 2014 $ %Revenue $974,717 100.0 % $703,714 100.0 % $271,003 38.5 %Cost of goods sold before depreciation, depletion andamortization 768,839 78.9 573,318 81.5 195,521 34.1Selling, general and administrative expenses 87,978 9.0 61,850 8.8 26,128 42.2Depreciation, depletion and amortization 43,570 4.5 23,849 3.4 19,721 82.7Loss on revaluation of contingent consideration 932 0.1 — — 932 NMGain on sale of assets, net (468) 0.0 (625) (0.1) (157) (25.1)Income from operations 73,866 7.6 45,322 6.4 28,544 63.0Interest expense, net (21,734) (2.2) (20,431) (2.9) 1,303 6.4Derivative loss (60,016) (6.2) (3,556) (0.5) 56,460 NMGain on early extinguishment of debt — — 11 — (11) (100.0)Other income, net 3,569 0.4 2,385 0.3 1,184 49.6Income (loss) from continuing operations beforeincome taxes (4,315) (0.4) 23,731 3.4 (28,046) (118.2)Income tax (benefit) expense (30,135) (3.1) 2,156 0.3 (32,291) NMIncome from continuing operations 25,820 2.6 21,575 3.1 4,245 19.7Loss from discontinued operations, net of taxes (320) 0.0 (993) (0.1) (673) (67.8)Net income $25,500 2.6 % $20,582 2.9 % $4,918 23.9 % Ready-mixed Concrete Data: Average selling price per cubic yard $123.98 $110.85 $13.13 11.8 %Sales volume in cubic yards 7,038 5,696 1,342 23.6 %Aggregates Data: Average selling price per ton $10.54 $9.40 $1.14 12.1 % Sales volume in tons 4,919 4,650 269 5.8 %Revenue. Our 2015 total revenue grew by $271.0 million , or 38.5% , from $703.7 million in 2014 to $974.7 million in 2015 , primarily due to increased sales ofready-mixed concrete. We estimate that approximately $215.9 million, or 79.7%, of our 2015 revenue increase was the result of acquisitions completed during2014 and 2015. Ready-mixed concrete sales rose $243.8 million , or 38.5% , from $632.8 million in 2014 to $876.6 million in 2015 , driven by a 23.6% increase involume and an 11.8% increase in our average selling price. Sales of aggregates rose to $60.4 million in 2015 from $52.6 million in 2014 , an increase of $7.8million , or 14.9% , due to a 12.1% increase in average selling price and a 5.8% increase in volume. Other product revenues and eliminations, which includes ourbuilding materials, aggregate distribution, aggregate recycling, lime slurry, hauling business, concrete block, and eliminations of our intersegment sales, increasedby $19.3 million , or 105.6% , to $37.6 million in 2015 from $18.3 million in 2014 , primarily due to the addition of the aggregates distribution business in thefourth quarter of 2014.42 Table of ContentsCost of goods sold before depreciation, depletion and amortization. Cost of goods sold before depreciation, depletion and amortization ("DD&A"),increased $195.5 million , or 34.1% , from $573.3 million in 2014 to $768.8 million in 2015 . Our costs were higher primarily due to volume growth in our twosegments - ready-mixed concrete and aggregates - resulting in higher material costs, delivery costs, and plant variable costs, which includes primarily labor andbenefits, utilities, and repairs and maintenance. Our raw material costs also increased as a result of higher cement and aggregate prices; however, we weregenerally able to pass these increases on to our customers. Our plant fixed costs, which primarily consist of leased equipment costs, property taxes, dispatch costs,and plant management, increased over the prior year due to higher personnel and equipment costs needed to operate our facilities, as well as higher overall fixedcosts to operate more locations and trucks than in 2014. As a percentage of revenue, cost of goods sold before DD&A decreased to 78.9% in 2015 from 81.5% in2014 , as we were able to achieve greater efficiencies from our increased sales volume.Selling, general and administrative expenses. Selling, general and administrative, ("SG&A"), expenses increased $26.1 million , or 42.2% , in 2015 from$61.9 million in 2014 to $88.0 million in 2015 . Approximately $16.7 million of this increase was attributable to personnel and other general administrative costsincurred by our regional operations to support growth and acquisition infrastructure. In addition, we incurred $1.2 million in higher corporate legal andprofessional fees related to our acquisitions and divestitures and $3.8 million in higher non-cash stock and incentive compensation expense. The increase in non-cash stock compensation expense was primarily due to the increase in the fair value of awards granted in 2015. The remainder of the increase was primarilyattributable to corporate-related personnel and other general expenses to support our growth initiatives. As a percentage of total revenue, SG&A expensesincreased to 9.0% in 2015 from 8.8% in 2014 .Depreciation, depletion and amortization. DD&A expense for 2015 increased $19.7 million , or 82.7% , to $43.6 million from $23.8 million in 2014 ,primarily reflecting depreciation on additional plants, equipment and mixer trucks purchased to service demand and acquired through recent acquisitions as well asincremental intangible amortization expense of $9.1 million related to our acquisitions.Loss on revaluation of contingent consideration. We recorded a non-cash loss on revaluation of contingent consideration of $0.9 million related to the fairvalue changes in contingent consideration associated with certain of our acquisitions in 2015 . The key inputs in determining the fair value of our contingentconsideration of $0.9 million in 2015 include discount rates ranging from 3.50% to 15.75%, a forecasted average of WTI prices from December 8, 2014 throughDecember 7, 2016 from quoted sources, and management's estimates of future sales volumes and EBITDA. Changes in these inputs impact the valuation of ourcontingent consideration and result in gain or loss each quarterly period. The non-cash loss from fair value changes in contingent consideration in 2015 wasprimarily due to accretion of interest for the passage of time as well as changes in the probability-weighted assumptions related to the achievement of salesvolumes partially offset by the decline in WTI prices. We had no gain or loss on revaluation of contingent consideration during 2014 .Income from operations. Income from operations rose $28.5 million to $73.9 million in 2015 from $45.3 million in 2014 . Increased ready-mixed concreterevenue driven by higher volume and pricing resulted in efficiencies that led to improvements in income from operations as a percentage of revenue, which werefer to as operating margins. In addition, we estimate that approximately $12.5 million, or 43.9%, of our increase in income from operations was attributable to2015 and 2014 acquisitions. Operating margins increased to 7.6% for 2015 compared to 6.4% for 2014 .Interest expense, net. Net interest expense increased by $1.3 million , or 6.4% , to $21.7 million in 2015 from $20.4 million in 2014 , primarily related tointerest on our Revolving Facility borrowings in 2015 . Derivative loss. For the 2015 period, we recorded a non-cash loss on derivative of $60.0 million related to fair value changes in our Warrants. All derivativesare required to be recorded on the balance sheet at their fair value in accordance with U.S. GAAP. Each quarter, we determine the fair value of our derivativeliabilities, and changes result in income or loss for the period. The key inputs in determining the fair value of our derivative liabilities of $67.4 million atDecember 31, 2015 include our stock price, stock price volatility, and risk-free interest rates. Changes in these inputs impact the fair value of our derivativeliability and result in income or loss each quarterly period.The non-cash loss from fair value changes in the Warrants for the 2015 period was primarily due to an increase in the price of our common stock and changesin our stock price volatility.Other income, net. Other income for the 2015 period was $3.6 million compared to $2.4 million for the 2014 period. The increase from 2014 was primarilydue to $0.5 million of additional income in 2015 from state and local tax incentive programs and $0.4 million for an insurance settlement.43 Table of ContentsIncome tax (benefit) expense . We recorded an income tax benefit allocated to continuing operations of approximately $30.1 million for the year endedDecember 31, 2015 and an income tax expense of approximately $2.2 million for the year ended December 31, 2014. Our effective tax rate differs substantiallyfrom the federal statutory rate primarily due to the application of a valuation allowance that reduced the recognized benefit of our deferred tax assets in 2014 andincreased the recognized benefit in 2015 due to its reversal. In addition, certain state income taxes are calculated on bases different than pre-tax income (loss)which resulted in recording income tax expense in certain states that experience a pre-tax loss.As of each reporting date, management considers all new evidence, both positive and negative, that could impact management's view with regard to futurerealization of deferred tax assets. As of December 31, 2015 , we achieved a history of positive pre-tax income and anticipate significant additional future pre-taxincome to be generated in part from our recently acquired businesses, which will result in higher U.S. Federal taxable income. For these reasons, managementdetermined that sufficient positive evidence existed as of December 31, 2015 to conclude that it is more likely than not that additional deferred taxes of $29.5million are realizable, and therefore, reversed a majority of the valuation allowance accordingly.In accordance with U.S. GAAP, the recognized value of deferred tax assets must be reduced to the amount that is more likely than not to be realized in futureperiods. The ultimate realization of the benefit of deferred tax assets from deductible temporary differences or tax carryovers depends on the generation ofsufficient taxable income during the periods in which those temporary differences become deductible. We considered the scheduled reversal of deferred taxliabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on these considerations, we relied upon the reversal ofcertain deferred tax liabilities to realize a portion of our deferred tax assets and established a valuation allowance as of December 31, 2015 and 2014 for otherdeferred tax assets because of uncertainty regarding their ultimate realization. Our total net deferred tax asset as of December 31, 2015 was $30.9 million and ourtotal net deferred tax liability as of December 31, 2014 was $4.5 million .In accordance with U.S. GAAP, intra-period tax allocation provisions require allocation of a tax expense or benefit to continuing operations due to currentincome (loss) from discontinued operations. We recorded an income tax benefit of approximately $30.1 million and an income tax expense of approximately $2.2million in income from continuing operations for the years ended December 31, 2015 and 2014 , respectively. We recorded a tax benefit of $0.2 million and taxexpense of $0.2 million , allocated to discontinued operations for the years ended December 31, 2015 and 2014 , respectively. The income tax amounts forcontinuing operations referred to above include the offsetting intra-period allocations. The intra-period tax allocation between the results from continuingoperations and discontinued operations in the years ended December 31, 2015 and 2014 nets to $0.Under U.S. tax law, we have elected to treat our U.S. Virgin Island subsidiaries as controlled foreign corporations. As such, we consider the undistributedearnings of our U.S. Virgin Island subsidiaries as of December 31, 2015 to be indefinitely reinvested and, accordingly, no U.S. income taxes have been providedthereon. As of December 31, 2015, the amount of cash associated with indefinitely reinvested foreign earnings was approximately $0.1 million. We have not, nordo we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidityneeds associated with our domestic debt service requirements.We reorganized pursuant to Chapter 11 of the bankruptcy code under the terms of our Plan, with an effective date of August 31, 2010. Under our Plan, ourpreviously outstanding 8.375% Senior Subordinated Notes due 2014 were cancelled, giving rise to cancellation of indebtedness income ("CODI"). The InternalRevenue Code ("IRC"), provides that CODI arising under a plan of bankruptcy reorganization is excludible from taxable income, but the debtor must reducecertain of its tax attributes by the amount of CODI realized under the Plan. Our CODI and required tax attribute reduction did not cause a significant change in ourrecorded deferred tax liability. Our required reduction in tax attributes, or deferred tax assets, was accompanied by a corresponding release of valuation allowancein prior years.We underwent a change in ownership for purposes of Section 382 of the IRC as a result of our Plan and emergence from Chapter 11 on August 31, 2010. As aresult, the amount of our pre-change net operating losses ("NOL's"), and other tax attributes that are available to offset future taxable income are subject to anannual limitation. The annual limitation is based on the value of the corporation as of the effective date of the Plan. The ownership change and the resultingannual limitation on use of NOL's are not expected to result in the expiration of our NOL carryforwards if we are able to generate sufficient future taxable incomewithin the carryforward periods. However, the limitation on the amount of NOL's available to offset taxable income in a specific year may result in the payment ofincome taxes before all NOL's have been utilized. Loss from discontinued operations, net of taxes. The results of operations for our sold precast units located in California, Arizona, and Pennsylvania, havebeen included in discontinued operations for all periods presented. During 2015, we recorded a pre-tax loss of $0.2 million related to the sale of fixed assets andinventory for our Pennsylvania precast operation. During 2014, we completed the sale of our remaining owned assets related to our California precast operationsdisposed of in 2012. We sold land and a building for net proceeds of $1.5 million in cash and recorded a pre-tax gain on the transaction of $0.6 million . Also44 Table of Contentsin 2014, we recorded an impairment loss on long-lived assets of $0.9 million related to our Pennsylvania precast concrete operation as the carrying value exceededthe net realizable value of the related long-lived assets.Segment informationFor a discussion of our segments and segment Adjusted EBITDA, see "Basis of Presentation", under this Item 7, earlier in this report. For a discussion andreconciliation of our segment Adjusted EBITDA, see Note 19, "Business Segments," to our consolidated financial statements in this report.Ready-mixed concreteThe following table sets forth key financial information for our ready-mixed concrete segment for the periods indicated: (amounts in thousands, except selling prices) Years Ended December 31, Increase / (Decrease) 2015 2014 $ or cubicyards, asapplicable % Ready-mixed Concrete Segment: Revenue $876,633 $632,787 $243,846 38.5% Segment revenue as a percentage of total revenue 89.9% 89.9% Adjusted EBITDA $131,940 $84,706 $47,234 55.8% Adjusted EBITDA as a percentage of segment revenue 15.1% 13.4% Ready-mixed Concrete Data: Average selling price per cubic yard $123.98 $110.85 $13.13 11.8%Sales volume in thousands of cubic yards 7,038 5,696 1,342 23.6%Revenue. Our ready-mixed concrete sales provided 89.9% of our total revenue in 2015 and 2014 . Segment revenue for 2015 rose $243.8 million , or 38.5% ,over 2014 levels. We estimate that approximately $188.6 million of this increase, or 77.3%, was due to segment acquisitions during 2014 and 2015 . The 2015revenue increase was driven primarily by a 23.6% increase in sales volume, or 1.3 million cubic yards. Increased volume provided $148.8 million, or 61.0%, of ourready-mixed concrete revenue growth. Our sales volume was higher in all of our major markets, except west Texas, due to increased construction activity andrecent acquisitions. Volume in our west Texas market decreased slightly due to the decline in WTI prices. However, total revenue was higher in all our majormarkets, primarily due to higher average selling price and the impact of recent acquisitions. Our ready-mixed concrete average selling price per cubic yardincreased approximately 11.8% during 2015 as compared to 2014 . Increased selling price contributed approximately $92.4 million, or 37.9%, of our revenuegrowth. Our average selling price increased in all of our markets.Adjusted EBITDA. Adjusted EBITDA for our ready-mixed concrete segment rose from $84.7 million in 2014 to $131.9 million in 2015 , an increase of $47.2million , or 55.8% . We estimate that approximately $24.4 million, or 51.7%, of our 2015 Adjusted EBITDA increase resulted from our 2014 and 2015 segmentacquisitions. Driving the growth in Adjusted EBITDA was a 23.6% increase in sales volume plus an 11.8% increase in our average selling price, which resulted in$243.8 million in higher revenue. Partially offsetting the growth in revenue was the increased cost of goods sold associated with the higher volume of sales. Ourvariable costs, which include primarily raw material costs, labor and benefits costs, utilities, and delivery costs, were all higher primarily due to the increasedvolume. We also saw higher raw materials prices from our vendors during 2015 , which increased our cost of goods sold for 2015 . However, we were generallyable to pass these price increases along to our customers. Our fixed plant costs, which consist primarily of property taxes, equipment rental, and plant managementcosts, increased during 2015 due to higher personnel and equipment costs needed to operate our facilities, as well as higher overall fixed costs to operate morelocations and trucks than in the previous year. Segment Adjusted EBITDA as a percentage of segment revenues rose to 15.1% in 2015 from 13.4% in the 2014period, reflecting primarily the higher revenues and greater efficiencies.45 Table of ContentsAggregate productsThe following table sets forth key financial information for our aggregate products segment for the periods indicated: (amounts in thousands, except selling prices) Years Ended December 31, Increase / (Decrease) 2015 2014 $ or tons, asapplicable % Aggregate Products Segment: Revenue $60,439 $52,618 $7,821 14.9%Segment revenue, excluding intersegment sales, as a percentage of totalrevenue 3.5% 4.5% Adjusted EBITDA $14,996 10,549 $4,447 42.2%Adjusted EBITDA as a percentage of segment revenue 24.8% 20.0% Aggregates Data: Average selling price per ton $10.54 $9.40 $1.14 12.1%Sales volume in thousands of tons 4,919 4,650 269 5.8%Revenue. Sales of our aggregate products, excluding intersegment sales of $26.2 million, provided 3.5% of our total revenue in 2015, compared to 4.5%,excluding intersegment sales of $21.0 million, in 2014. Segment revenue rose $7.8 million , or 14.9% , over prior year levels. We sell our aggregates to externalcustomers and also sell them internally to our ready-mixed concrete segment at a market price. Approximately 43.4% of our 2015 aggregates sales, or $26.2million, were to our ready-mixed concrete segment, versus 39.8%, or $21.0 million, in 2014. Contributing to our overall aggregates revenue growth was anincrease in our average selling price of 12.1% , which provided approximately $5.6 million, or 71.7%, of our increase in aggregates revenue. Our volume rose 0.3million tons, which provided approximately $2.5 million, or 32.3%, of our aggregates revenue increase. Freight charges to deliver the aggregates to the externalcustomer, as well as other charges, all of which are included in revenue, decreased approximately $0.5 million during 2015 as compared to 2014, offsetting ouraggregates revenue growth by 5.8%.Adjusted EBITDA. Adjusted EBITDA for our aggregates segment increased to $15.0 million in the 2015 period from $10.5 million in the 2014 period,primarily reflecting the higher sales volume and higher average selling price, partially offset by the related higher cost of goods sold associated with the increasedvolume. Our variable costs associated with cost of goods sold, which includes quarry labor and benefits, utilities, repairs and maintenance, pit costs to prepare thestone and gravel for use, and delivery costs, all rose due to the higher sales volumes. Our quarry fixed costs, which include primarily property taxes, equipmentrental, and plant management costs, were higher compared to the previous year, primarily due to operating costs associated with one quarry that commencedproduction during the fourth quarter of 2014 as well as three additional quarries that commenced production during 2015. Overall, our segment Adjusted EBITDAas a percentage of segment revenue increased to 24.8% in 2015 from 20.0% in 2014, primarily due to the increase in revenue and increased efficiencies.46 Table of ContentsYear Ended December 31, 2014 Compared to Year Ended December 31, 2013The following table sets forth selected historical statement of operations information and that information as a percentage of revenue for each of the periodsindicated, as well as the increase or decrease from the prior year in dollars and percent. (amounts in thousands, except selling prices) Years Ended December 31, Increase / (Decrease) 2014 2013 $ %Revenue $703,714 100.0 % $598,155 100.0 % $105,559 17.6 %Cost of goods sold before depreciation, depletion andamortization 573,318 81.5 498,660 83.4 74,658 15.0Selling, general and administrative expenses 61,850 8.8 59,424 9.9 2,426 4.1Depreciation, depletion and amortization 23,849 3.4 18,868 3.2 4,981 26.4Gain on sale of assets, net (625) (0.1) (232) — 393 169.4Income from operations 45,322 6.4 21,435 3.6 23,887 111.4Interest expense, net (20,431) (2.9) (11,332) (1.9) 9,099 80.3Derivative loss (3,556) (0.5) (29,964) (5.0) (26,408) (88.1)Gain on early extinguishment of debt 11 — 985 0.2 (974) (98.9)Other income, net 2,385 0.3 1,771 0.3 614 34.7Income (loss) from continuing operations beforeincome taxes 23,731 3.4 (17,105) (2.9) 40,836 238.7Income tax expense 2,156 0.3 1,168 0.2 988 84.6Net income (loss) from continuing operations 21,575 3.1 (18,273) (3.1) 39,848 218.1Loss from discontinued operations, net of taxes (993) (0.1) (1,856) (0.3) (863) (46.5)Net income (loss) $20,582 2.9 % $(20,129) (3.4)% $40,711 202.3 % Ready-mixed Concrete Data: Average selling price per cubic yard $110.85 $104.03 $6.82 6.6 %Sales volume in cubic yards 5,696 5,225 471 9.0 %Aggregates Data: Average selling price per ton $9.40 $8.84 $0.56 6.3 % Sales volume in tons 4,650 3,597 1,053 29.3 %Revenue. Our 2014 total revenue grew by $105.6 million , or 17.6% , from $598.2 million in 2013 to $703.7 million in 2014, primarily due to increased salesof ready-mixed concrete. We estimate that approximately $16.6 million, or 15.7%, of our 2014 revenue increase was the result of acquisitions completed during2014. Ready-mixed concrete sales rose $87.5 million , or 16.0% , from $545.3 million in 2013 to $632.8 million in 2014, driven by a 9.0% volume increase and a6.6% increase in our average selling price. Sales of aggregates rose to $52.6 million in 2014 from $38.2 million in 2013, an increase of $14.4 million , or 37.7% ,due to a 29.3% increase in volume and a 6.3% increase in average selling price. Other product revenues and eliminations, which includes our building materials,aggregates distribution, lime slurry, hauling business, and eliminations of our intersegment sales, increased by $3.7 million , or 25.1% , to $18.3 million in 2014from $14.6 million in 2013, primarily due to the addition of the aggregates distribution business in the fourth quarter of 2014.Cost of goods sold before depreciation, depletion and amortization. Cost of goods sold before DD&A, increased $74.7 million , or 15.0% , from $498.7million in 2013 to $573.3 million in 2014. Our costs were higher primarily due to volume growth47 Table of Contentsin our two segments - ready-mixed concrete and aggregates - resulting in higher material costs, delivery costs, and plant variable costs, which includes primarilylabor and benefits, utilities, and repairs and maintenance. Our material costs also increased as a result of higher cement and aggregate prices; however, we weregenerally able to pass these increases on to our customers. Our plant fixed costs, which primarily consists of leased equipment costs, property taxes, dispatch costs,and plant management, increased over the prior year due to higher personnel and equipment costs needed to operate our facilities, as well as higher overall fixedcosts to operate more locations and trucks than in 2013. As a percentage of revenue, cost of goods sold before DD&A decreased to 81.5% in 2014 from 83.4% in2013, as we were able to achieve greater efficiencies from our increased sales volume.Selling, general and administrative expenses. SG&A expenses increased $2.4 million , or 4.1% , in 2014 from $59.4 million in 2013 to $61.9 million in2014. Our increased 2014 SG&A costs primarily resulted from $2.9 million in higher bonus accruals and $1.8 million in higher legal and professional fees relatedto our acquisitions and divestitures. These increases were partially offset by a $1.8 million decrease in non-cash stock compensation expense. Non-cash stockcompensation expense in 2013 included compensation expense resulting from achievement of the performance goal associated with delivery of a Conversion EventNotice (as defined in the indenture governing the Convertible Notes), which occurred on June 18, 2013, triggering the conversion of certain previously vestedincentive restricted stock units to common shares. No compensation expense had previously been recognized for these grants, as achievement of the performancegoal was not considered probable. Additional non-cash stock compensation expense was recorded in 2013 associated with certain restricted stock units that werecontingent upon shareholder approval of the plan under which they were granted. The approval was obtained in May 2013. Furthermore, in 2013, we incurred $0.5million of corporate relocation expenses. No such expenses were incurred in 2014. As a percentage of total revenue, SG&A expenses decreased to 8.8% in 2014from 9.9% in 2013.Gain on sale of assets. We recorded a gain on sale of assets of $0.6 million in 2014 versus $0.2 million in 2013. Our gain on sale of assets in 2014 and 2013included sales of excess vehicles and equipment.Depreciation, depletion and amortization. DD&A expense for 2014 increased $5.0 million , or 26.4% , to $23.8 million from $18.9 million in 2013,primarily reflecting depreciation on additional plants, equipment, and mixer trucks purchased to service demand.Income from operations. Income from operations rose $23.9 million to $45.3 million in 2014 from $21.4 million in 2013. Increased ready-mixed concreterevenue driven by higher volume and pricing resulted in efficiencies that led to improvements in income from operations as a percentage of revenue, which werefer to as operating margins. In addition, we estimate that approximately $0.8 million, or 3.3%, of our increase in income from operations was attributable to 2014acquisitions. Operating margins increased to 6.4% for 2014 compared to 3.6% for 2013.Interest expense, net. Net interest expense increased by $9.1 million, or 80.3%, to $20.4 million in 2014 from $11.3 million in 2013, reflecting primarily theimpact of the issuance of our 2018 Notes during the fourth quarter of 2013. Derivative loss. For the 2014 period, we recorded a non-cash loss on derivatives of $3.6 million related to fair value changes in our Warrants. All derivativesare required to be recorded on the balance sheet at their fair values in accordance with U.S. GAAP. Each quarter, we determine the fair value of our derivativeliabilities and any changes result in income or loss for the period. The key inputs in determining the fair value of our derivative liabilities of $25.2 million atDecember 31, 2014 include our stock price, stock price volatility, and risk-free interest rates. Changes in these inputs impact the fair value of our derivativeliability and result in income or loss each quarterly period.The non-cash loss from fair value changes in the Warrants for the 2014 period was primarily due to an increase in the price of our common stock and changesin our stock price volatility. This compares to the 2013 period, during which we recorded a non-cash loss from fair value changes in our Convertible Notesembedded derivative of approximately $13.1 million and $16.9 million related to fair value changes in our Warrants. These non-cash losses were primarily due toan increase in the price of our common stock and our stock price volatility. As of August 3, 2013, the conversion feature of our Convertible Notes terminated,which eliminated the embedded derivative.Gain (loss) on extinguishment of debt. In 2013, we recorded a net $1.0 million non-cash gain on extinguishment of debt. This consisted of $4.3 million ofnon-cash gain related to the Exchange Offer of our Convertible Notes that were exchanged for 2013 Notes in March 2013, $1.7 million in non-cash loss associatedwith the Conversion Event, and $1.6 million in non-cash loss associated with the subsequent extinguishment of our 2013 Notes following receipt of the proceeds ofour 2018 Notes offering.Other income, net. Other income for the 2014 period was $2.4 million compared to $1.8 million for the 2013 period. The increase from 2013 was primarilydue to $0.3 million of additional income in 2014 from state and local tax incentive programs and $0.1 million from higher finance charge income received from ourcustomers in 2014.48 Table of ContentsIncome tax expense . We recorded income tax expense allocated to continuing operations of approximately $2.2 million and $1.2 million for the years endedDecember 31, 2014 and December 31, 2013, respectively. Our effective tax rate differs substantially from the federal statutory rate primarily due to the applicationof a valuation allowance that reduced the recognized benefit of our deferred tax assets. In addition, certain state income taxes are calculated on bases different thanpre-tax income (loss) which resulted in recording income tax expense in certain states that experience a pre-tax loss.In accordance with U.S. GAAP, the recognized value of deferred tax assets must be reduced to the amount that is more likely than not to be realized in futureperiods. The ultimate realization of the benefit of deferred tax assets from deductible temporary differences or tax carryovers depends on the generation ofsufficient taxable income during the periods in which those temporary differences become deductible. We considered the scheduled reversal of deferred taxliabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on these considerations, we relied upon the reversal ofcertain deferred tax liabilities to realize a portion of our deferred tax assets and established a valuation allowance as of December 31, 2014 and 2013 for otherdeferred tax assets because of uncertainty regarding their ultimate realization. Our total net deferred tax liability as of December 31, 2014 and 2013 was $4.5million and $4.3 million, respectively.In accordance with U.S. GAAP, intra-period tax allocation provisions require allocation of a tax expense or benefit to continuing operations due to currentincome (loss) from discontinued operations. We recorded tax expense of $2.2 million and $1.2 million in income from continuing operations for the years endedDecember 31, 2014 and 2013, respectively. We recorded tax expense of $0.2 million, allocated to discontinued operations for the year ended December 31, 2014and a tax benefit of less than $0.1 million allocated to discontinued operations for the year ended December 31, 2013. The income tax amounts for continuingoperations referred to above include the offsetting intra-period allocations. The intra-period tax allocation between the results from continuing operations anddiscontinued operations in the years ended December 31, 2014 and 2013 nets to $0.Loss from discontinued operations. The results of operations for our sold precast units located in Pennsylvania, California, and Arizona, have beenincluded in discontinued operations for 2014 and 2013. During 2014, we completed the sale of our remaining owned assets related to our California precastoperations disposed of in 2012. We sold land and a building for net proceeds of $1.5 million in cash and recorded a pre-tax gain on the transaction of $0.6 million .Also in 2014, we recorded an impairment loss on long-lived assets of $0.9 million related to our Pennsylvania precast concrete operation as the carrying valueexceeded the net realizable value of the related long-lived assets. During 2013, pursuant to the terms of the related asset purchase agreements, we paid OldcastleArchitectural, Inc. and Jensen Enterprises, Inc. $1.9 million and $0.5 million, respectively, related to the reacquisition of certain uncollected receivables andsettlement of certain accrued liabilities. Of these amounts, a total of $0.7 million was included as a charge to discontinued operations for 2013.Segment informationFor a discussion of our segments and segment Adjusted EBITDA, see "Basis of Presentation", under this Item 7, earlier in this report. For a discussion andreconciliation of our segment Adjusted EBITDA, see Note 19, "Business Segments," to our consolidated financial statements in this report.49 Table of ContentsReady-mixed concreteThe following table sets forth key financial information for our ready-mixed concrete segment for the periods indicated: (amounts in thousands, except selling prices) Years Ended December 31, Increase / (Decrease) 2014 2013 $ or cubicyards, asapplicable % Ready-mixed Concrete Segment: Revenue $632,787 $545,302 $87,485 16.0% Segment revenue as a percentage of total revenue 89.9% 91.2% Adjusted EBITDA $84,706 $58,583 $26,123 44.6% Adjusted EBITDA as a percentage of segment revenue 13.4% 10.7% Ready-mixed Concrete Data: Average selling price per cubic yard $110.85 $104.03 $6.82 6.6%Sales volume in thousands of cubic yards 5,696 5,225 471 9.0%Revenue. Our ready-mixed concrete sales provided 89.9% of our total revenue in 2014, versus 91.2% in 2013. Segment revenue for 2014 rose $87.5 million,or 16.0%, over 2013 levels. We estimate that approximately $11.7 million of this increase, or 13.4%, was due to segment acquisitions during 2014. The 2014revenue increase was driven primarily by a 9.0% increase in sales volume, or 0.5 million cubic yards. We estimate that approximately 20.0% of our volumeincrease was due to 2014 acquisitions. Increased volume provided $48.9 million, or approximately 55.9%, of our ready-mixed concrete revenue growth. Wealso experienced an approximate 6.6% increase in our ready-mixed concrete average selling price per cubic yard during 2014 as compared to 2013. Increasedselling price contributed $38.6 million, or 44.1%, of our revenue growth. Our sales volume was higher in our Texas, New York, and New Jersey markets due toincreased construction activity. Volume in our northern California market was down slightly during 2014 as compared to 2013 partially due to significant lostweather days in December 2014 due to rain. However, overall revenue in our northern California market rose due to increased average selling price. We also saw avolume decline in our Washington, D.C. market due primarily to the timing of certain projects, partially offset by increased average selling price. Our averageselling price increased in all of our markets.Adjusted EBITDA. Adjusted EBITDA for our ready-mixed concrete segment rose from $58.6 million in 2013 to $84.7 million in 2014, an increase of $26.1million, or 44.6%. We estimate that approximately $1.6 million, or 6.1%, of our 2014 Adjusted EBITDA increase resulted from our 2014 segment acquisitions.Driving the growth in Adjusted EBITDA was a 9.0% increase in sales volume plus a 6.6% increase in our average selling price, which resulted in $87.5 million inhigher revenue. Partially offsetting the growth in revenue was the increased cost of goods sold associated with the higher volume of sales. Our variable costs,which include primarily material costs, labor and benefits costs, utilities, and delivery costs, were all higher due to the higher volume. We also saw higher rawmaterials prices from our vendors during 2014, which increased our cost of goods sold for 2014. However, we were generally able to pass these price increasesalong to our customers. Our fixed plant costs, which consist primarily of property taxes, equipment rental, and plant management costs, increased during 2014 dueto higher personnel and equipment costs needed to operate our facilities, as well as higher overall fixed costs to operate more locations and trucks than in theprevious year. Segment Adjusted EBITDA as a percentage of segment revenue rose to 13.4% in 2014 from 10.7% in the 2013 period, reflecting primarily thehigher revenues and greater efficiencies. 50 Table of ContentsAggregate productsThe following table sets forth key financial information for our aggregate products segment for the periods indicated: (amounts in thousands, except selling prices) Year Ended December 31, Increase / (Decrease) 2014 2013 $ or tons, asapplicable % Aggregate Products Segment: Revenue $52,618 $38,213 $14,405 37.7%Segment revenue, excluding intersegment sales, as a percentage of totalrevenue 4.5% 3.6% Adjusted EBITDA $10,549 $7,192 $3,357 46.7%Adjusted EBITDA as a percentage of segment revenue 20.0% 18.8% Aggregates Data: Average selling price per ton $9.40 $8.84 $0.56 6.3%Sales volume in thousands of tons 4,650 3,597 1,053 29.3%Revenue. Sales of our aggregate products, excluding intersegment sales of $21.0 million, provided 4.5% of our total revenue in 2014, compared to 3.6%,excluding intersegment sales of $16.5 million, in 2013. Segment revenue rose $14.4 million, or 37.7%, over prior year levels. We sell our aggregates to externalcustomers and also sell them internally to our ready-mixed concrete segment at a market price. Approximately 39.8% of our 2014 aggregates sales, or $21.0million, were to our ready-mixed concrete segment, versus 43.2%, or $16.5 million, in 2013. Contributing to our overall aggregates revenue growth was anincrease in volume of 1.1 million tons, which provided $9.3 million, or 64.6%, of our aggregates revenue increase. Our average selling price rose 6.3%, whichprovided $2.6 million, or 18.1%, of our increase in aggregates revenue. In addition, freight charges to deliver the aggregates to the external customer, as well asother charges, all of which are included in revenue, increased $2.4 million during 2014 and contributed 16.7% to our aggregates revenue growth.Adjusted EBITDA. Adjusted EBITDA for our aggregates segment increased to $10.5 million in the 2014 period from $7.2 million in the 2013 period,primarily reflecting the higher sales volume and higher average selling price, partially offset by the related higher cost of goods sold associated with the increasedvolume. Our variable costs associated with cost of goods sold, which includes quarry labor and benefits, utilities, repairs and maintenance, pit costs to prepare thestone and gravel for use, and delivery costs, all rose due to the higher sales volumes. Our quarry fixed costs, which include primarily property taxes, equipmentrental, and plant management costs, were higher compared to the previous year, primarily due to operating costs associated with two additional quarries thatcommenced production during 2014. Overall, our segment Adjusted EBITDA as a percentage of segment revenue increased to 20.0% in 2014 from 18.8% in 2013,primarily due to the increase in revenue and increased efficiencies.Critical Accounting Policies and EstimatesPreparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues andexpenses. Note 1, "Organization and Summary of Significant Accounting Policies," to our consolidated financial statements included in this report describes thesignificant accounting policies we use in preparing those statements. We believe the most complex and sensitive judgments, because of their significance to ourfinancial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. We have listed below those policieswhich we believe are critical and involve complex judgment in their application to our financial statements. Actual results in these areas could differ from ourestimates.GoodwillWe record as goodwill the amount by which the total purchase price we pay in our acquisition transactions exceeds our estimated fair value of the identifiablenet assets we acquire. We test goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment. Wegenerally test for goodwill impairment in the fourth quarter51 Table of Contentsof each year, using a two-step process, which requires us to make certain judgments and assumptions in our calculations. The first step of the process involvesestimating the fair value of our reporting units and comparing the result to the reporting unit's carrying value. We estimate fair value using an equally weightedcombination of discounted cash flows and multiples of invested capital to EBITDA. The discounted cash flow model includes forecasts for revenue and cash flowsdiscounted at our weighted average cost of capital. Multiples of invested capital to EBITDA are calculated using a weighted average of two selected 12 monthperiods results by reporting unit compared to the enterprise value of the Company, which is determined based on the combination of the market value of ourcommon stock and total outstanding debt. If the fair value exceeds the carrying value, the second step is not performed and no impairment is recorded. If however,the fair value is below the carrying value, a second step is performed to calculate the amount of the impairment by measuring the goodwill at an implied fair value.We completed our annual assessment of impairment during the fourth quarter of 2015 for those units with goodwill as of October 1, 2015, and there was noimpairment. In the absence of any evidence to the contrary, we consider goodwill resulting from acquisitions in the fourth quarter of 2015 to be recorded at fairvalue and not impaired, as the arm's length transactions that generated the goodwill were completed at a market rate. Our fair value estimates were determinedusing estimates and assumptions we believed to be reasonable at the time. Changes in those assumptions or estimates could impact the calculated fair value of thereporting units. See Note 4, "Goodwill and Intangible Assets, Net," to our consolidated financial statements included in this report for additional information aboutour goodwill.Impairment of Long-Lived AssetsWe evaluate the recoverability of our long-lived assets when changes in circumstances indicate that the carrying amount of the asset may not be recoverable inaccordance with authoritative accounting guidance related to the impairment or disposal of long-lived assets. We compare the carrying values of long-lived assetsto our projection of future undiscounted cash flows attributable to those assets. If the carrying value of a long-lived asset exceeds the future undiscounted cashflows we project will be derived from that asset, we record an impairment loss equal to the excess of the carrying value over the fair value. Actual useful lives andfuture cash flows could be different from those we estimate. These differences could have a material effect on our future operating results.Insurance ProgramsWe maintain third-party insurance coverage in amounts and against the risks we believe are reasonable. We share the risk of loss with our insuranceunderwriters by maintaining high deductibles subject to aggregate annual loss limitations. We believe our workers’ compensation, automobile and general liabilityper occurrence retentions are consistent with industry practices, although there are variations among our business units. We fund these deductibles and record anexpense for losses we expect under the programs. We determine the expected losses using a combination of our historical loss experience and subjectiveassessments of our future loss exposure. The estimated losses are subject to uncertainty from various sources, including changes in claims reporting and settlementpatterns, judicial decisions, new legislation and economic conditions. Although we believe the estimated losses are reasonable, significant differences related to theitems we have noted above could materially affect our insurance obligations and future expense. The amount accrued for self-insurance claims was $12.0 millionas of December 31, 2015 , compared to $9.5 million as of December 31, 2014 , which is classified in accrued liabilities. The increase in 2015 was primarilyattributable to increased loss reserves.Income TaxesWe use the liability method of accounting for income taxes. Under this method, we record deferred income taxes based on temporary differences between thefinancial reporting and tax bases of assets and liabilities and use enacted tax rates and laws that we expect will be in effect when we recover those assets or settlethose liabilities, as the case may be, to measure those taxes. In cases where the expiration date of tax loss carryforwards or the projected operating results indicatethat realization is not likely, we provide for a valuation allowance.We have deferred tax assets, resulting from deductible temporary differences that may reduce taxable income in future periods. A valuation allowance isrequired when it is more likely than not that all or a portion of a deferred tax asset will not be realized. In assessing the need for a valuation allowance, we estimatefuture taxable income, considering the feasibility of ongoing tax-planning strategies and the realizability of tax loss carryforwards. Valuation allowances related todeferred tax assets can be impacted by changes in tax laws, changes in statutory tax rates and future taxable income levels. If we were to determine that we wouldnot be able to realize all or a portion of our deferred tax assets in the future, we would reduce such amounts through a charge to income in the period in which thatdetermination is made. Conversely, if we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net carryingamounts, we would decrease the recorded valuation allowance through an increase to income in the period in which that determination is made. Based on theassessment, we recorded a valuation allowance of $4.1 million at December 31, 2015 and $34.9 million at December 31, 2014 . In determining the valuationallowance in 2015 and 2014, we used such factors as (i) cumulative federal taxable losses, (ii) the amount of deferred tax liabilities that we52 Table of Contentsgenerally expect to reverse in the same period and jurisdiction that are of the same character as the temporary differences giving rise to our deferred tax assets and(iii) certain tax contingencies under authoritative accounting guidance related to accounting for uncertainty in income taxes which, should they materialize, wouldbe offset by our net operating loss generated in 2008 through 2013. We provided a valuation allowance in 2015 and 2014 related to certain federal and stateincome tax attributes we did not believe we could utilize within the tax loss carryforward periods.In the ordinary course of business there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record taxbenefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting date. Forthose tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the highest amount of tax benefit with a greater than 50%likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positionswhere it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. See Note 16, "IncomeTaxes," to our consolidated financial statements included in this report for further discussion.Derivative InstrumentsWe are exposed to certain risks relating to our ongoing business operations. However, derivative instruments are not used to hedge these risks. We arerequired to account for derivative instruments as a result of the issuance of the Warrants. Our warrant derivatives do not manage business risk nor are theyexecuted for speculative purposes. All derivatives are required to be recorded on the balance sheet at their fair value. Each quarter, we determine the fair value ofour derivative liabilities, and changes result in gain or loss. Fair value is estimated using a Black-Scholes model for the Warrants. The key inputs in determiningfair value of our derivative liabilities of $67.4 million and $25.2 million at December 31, 2015 and 2014 , respectively, include our stock price, stock pricevolatility, and risk-free interest rates. Changes in these inputs will impact the valuation of our derivatives and result in gain or loss each quarterly period. See Note11, "Derivatives," to our consolidated financial statements included in this report for additional information about our derivatives.Contingent ConsiderationWe record an estimate of the fair value of contingent consideration within accrued liabilities and other long-term obligations. On a quarterly basis, we revaluethe liability and record increases or decreases in the fair value as an adjustment to earnings. Changes to the contingent consideration liability can result fromadjustments to the discount rate, accretion of interest expense due to the passage of time, or changes in the assumptions regarding probabilities of successfulachievement of related milestones and the estimated timing in which the milestones are achieved. The assumptions used in estimating fair value require significantjudgment. The use of different assumptions and judgments could result in a materially different estimate of fair value. The key inputs in determining fair value ofour contingent consideration obligations of $30.1 million and $5.3 million at December 31, 2015 and 2014 , respectively, include discount rates ranging from3.50% to 15.75%, a forecasted average of WTI prices from December 8, 2014 through December 7, 2016 from quoted sources, and management's estimates offuture sales volumes and EBITDA. For further information, see Note 13, "Fair Value Disclosures," to our consolidated financial statements included in this reportfor additional information about our contingent consideration obligations.OtherWe record accruals for legal and other contingencies when estimated future expenditures associated with those contingencies become probable and theamounts can be reasonably estimated. However, new information may become available, or circumstances (such as applicable laws and regulations) may change,thereby resulting in an increase or decrease in the amount required to be accrued for such matters (and, therefore, a decrease or increase in reported net income inthe period of such change).Recent Accounting PronouncementsFor a discussion of recently adopted accounting standards, see Note 1, "Organization and Summary of Significant Accounting Policies," to our consolidatedfinancial statements included in this report.53 Table of ContentsItem 7A. Quantitative and Qualitative Disclosures About Market RiskWe are exposed to certain risks relating to our ongoing business operations. However, derivative instruments are not used to hedge these risks. At December31, 2015, we were required to account for our Warrants as derivative instruments. All derivatives are required to be recorded on the balance sheet at their fairvalue. None of our derivatives manage business risk or are entered into for speculative purposes. Each quarter, we determine the fair value of our derivativeliabilities, and changes result in a gain or loss. The key inputs in determining fair value of our derivative liabilities of $67.4 million at December 31, 2015 , includeour stock price, stock price volatility, risk-free interest rates and interest rates for conventional debt of similarly situated companies. Changes in these inputs willimpact the valuation of our derivatives and result in gain or loss each quarterly period.A 5% increase in the stock price, volatility and risk-free interest rates would increase the value of our Warrant derivative liability by approximately $6.3million, resulting in a loss in the same amount. A 5% decrease in these same factors would result in a decrease in the Warrant derivative liability of approximately$6.3 million, and a gain of the same amount. During the year ended December 31, 2015 , we recorded a non-cash loss from fair value changes in our Warrants ofapproximately $60.0 million . The loss was due primarily to an increase in the price of our common stock and changes in our stock price volatility.Borrowings under our Revolving Facility expose us to certain market risks. Interest on amounts drawn varies based on the floating rates under the agreement.As we had $45.0 million in outstanding borrowings under this facility as of December 31, 2015 , a 100 basis point change in the interest rate would increase ordecrease our annual interest expense by $0.5 million .Our operations are subject to factors affecting the overall strength of the U.S. economy and economic conditions impacting financial institutions, including thelevel of interest rates, availability of funds for construction and level of general construction activity. A significant decrease in the level of general constructionactivity in any of our market areas has had and may continue to have a material adverse effect on our consolidated revenues and earnings.54 Table of ContentsItem 8. Financial Statements and Supplementary DataINDEX TO CONSOLIDATED FINANCIAL STATEMENTS PageReport of Independent Registered Public Accounting Firm56 Consolidated Balance Sheets57 Consolidated Statements of Operations58 Consolidated Statements of Changes in Equity59 Consolidated Statements of Cash Flows60 Notes to Consolidated Financial Statements6255 Table of ContentsReport of Independent Registered Public Accounting FirmBoard of Directors and ShareholdersU.S. Concrete, Inc.We have audited the accompanying consolidated balance sheets of U.S. Concrete, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December31, 2015 and 2014, and the related consolidated statements of operations, changes in equity, and cash flows for each of the three years in the period endedDecember 31, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financialstatements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basisfor our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of U.S. Concrete, Inc. andsubsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period ended December 31,2015 in conformity with accounting principles generally accepted in the United States of America.As discussed in Note 1 to the consolidated financial statements, the Company adopted new accounting guidance in 2015, related to the presentation of deferredincome taxes.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control overfinancial reporting as of December 31, 2015, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO), and our report dated March 4, 2016 expressed an unqualified opinion thereon./s/ GRANT THORNTON LLPDallas, TexasMarch 4, 201656 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDARIESCONSOLIDATED BALANCE SHEETS(in thousands, including share amounts but excluding per share amounts) December 31, 2015 2014ASSETS Current assets: Cash and cash equivalents $3,925 $30,202Trade accounts receivable, net 171,256 114,902Inventories 36,726 31,722Deferred income taxes — 1,887Prepaid expenses 4,450 3,965Other receivables 7,765 6,519Assets held for sale — 3,779Other current assets 2,374 301Total current assets 226,496 193,277Property, plant and equipment, net 248,123 176,524Goodwill 100,204 50,757Intangible assets, net 95,754 31,720Deferred income taxes 30,875 —Other assets 11,450 8,250Total assets $712,902 $460,528LIABILITIES AND EQUITY Current liabilities: Accounts payable $80,419 $48,705Accrued liabilities 79,996 50,391Current maturities of long-term debt 9,386 5,104Derivative liabilities 67,401 25,246Liabilities held for sale — 902Total current liabilities 237,202 130,348Long-term debt, net of current maturities 272,363 215,333Other long-term obligations and deferred credits 38,416 6,940Deferred income taxes — 6,427Total liabilities 547,981 359,048Commitments and contingencies (Note 22) Equity: Preferred stock, $0.001 par value per share (10,000 shares authorized; none issued) — —Common stock, $0.001 par value per share (100,000 shares authorized; 15,713 and 14,675 shares issued, respectively;and 14,871 and 13,978 shares outstanding, respectively) 16 15Additional paid-in capital 201,015 156,745Accumulated deficit (17,243) (42,743)Treasury stock, at cost (842 and 697 common shares, respectively) (18,867) (12,537)Total equity 164,921 101,480Total liabilities and equity $712,902 $460,528The accompanying notes are an integral part of these consolidated financial statements.57 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDARIESCONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts) Years Ended December 31, 2015 2014 2013Revenue $974,717 $703,714 $598,155Cost of goods sold before depreciation, depletion and amortization 768,839 573,318 498,660Selling, general and administrative expenses 87,978 61,850 59,424Depreciation, depletion and amortization 43,570 23,849 18,868Loss on revaluation of contingent consideration, net 932 — —Gain on sale of assets, net (468) (625) (232)Income from operations 73,866 45,322 21,435Interest expense, net (21,734) (20,431) (11,332)Derivative loss (60,016) (3,556) (29,964)Gain on early extinguishment of debt — 11 985Other income, net 3,569 2,385 1,771(Loss) income from continuing operations before income taxes (4,315) 23,731 (17,105)Income tax (benefit) expense (30,135) 2,156 1,168Income (loss) from continuing operations 25,820 21,575 (18,273)Loss from discontinued operations, net of taxes (320) (993) (1,856)Net income (loss) $25,500 $20,582 $(20,129) Basic income (loss) per share: Income (loss) from continuing operations $1.83 $1.59 $(1.42)Loss from discontinued operations, net of income tax (0.02) (0.07) (0.14)Net income (loss) per share - basic $1.81 $1.52 $(1.56) Diluted income (loss) per share: Income (loss) from continuing operations $1.66 $1.55 $(1.42)Loss from discontinued operations, net of taxes (0.02) (0.07) (0.14)Net income (loss) per share - diluted $1.64 $1.48 $(1.56) Weighted average shares outstanding: Basic 14,080 13,541 12,917Diluted 15,560 13,898 12,917The accompanying notes are an integral part of these consolidated financial statements.58 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(in thousands) Common Stock # of Shares Par Value Additional Paid-In Capital AccumulatedDeficit Treasury Stock Total Equity (Deficit)BALANCE, January 1, 2013 13,358 $13 $136,451 $(43,196) $(744) $92,524Stock-based compensation — — 5,429 — — 5,429Restricted stock vesting 183 — — — — —Restricted stock grants, net of cancellations 166 — — — — —Stock options exercised 17 — 224 — — 224Conversion of convertible debt 608 1 10,591 — — 10,592Other treasury share purchases (296) — — — (4,913) (4,913)Net loss — — — (20,129) — (20,129)BALANCE, December 31, 2013 14,036 $14 $152,695 $(63,325) $(5,657) $83,727Stock-based compensation — — 3,655 — — 3,655Restricted stock vesting 28 — — — — —Restricted stock grants, net of cancellations 169 1 — — — 1Stock options exercised 27 — 377 — — 377Warrants exercised 1 — 18 — — 18Share repurchase program (200) — — — (4,824) (4,824)Other treasury share purchases (83) — — — (2,056) (2,056)Net income — — — 20,582 — 20,582BALANCE, December 31, 2014 13,978 $15 $156,745 $(42,743) $(12,537) $101,480Stock-based compensation — — 5,824 — — 5,824Excess tax benefits from share-basedcompensation — — 4,952 — — 4,952Restricted stock vesting 22 — — — — —Restricted stock grants, net of cancellations 200 — — — — —Stock options exercised 15 — 315 — — 315Warrants exercised 359 — 18,091 — — 18,091Other treasury share purchases (145) — — — (6,330) (6,330)Common stock issuance 442 1 15,088 — — 15,089Net income — — — 25,500 — 25,500BALANCE, December 31, 2015 14,871 $16 $201,015 $(17,243) $(18,867) $164,921The accompanying notes are an integral part of these consolidated financial statements.59 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Years Ended December 31, 2015 2014 2013CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $25,500 $20,582 $(20,129)Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion and amortization 43,570 23,849 19,016Debt issuance cost amortization 1,795 1,679 2,164Gain on extinguishment of debt — (11) (985)Amortization of facility exit costs — — (142)Amortization of discount on long-term incentive plan and other accrued interest 427 425 512Net loss on derivative 60,016 3,556 29,964Net loss on revaluation of contingent consideration 932 — —Loss on impairment of long-lived assets — 900 —Net gain on sale of assets (275) (1,265) (13)Deferred income taxes (37,428) 864 818Deferred rent — — 510Provision for doubtful accounts and customer disputes 4,198 1,533 1,103Stock-based compensation 5,824 3,655 5,429Changes in assets and liabilities, excluding effects of acquisitions: Accounts receivable (37,766) (13,466) (8,982)Inventories (383) (2,534) (2,574)Prepaid expenses and other current assets (1,094) 217 2,497Other assets and liabilities, net (1,341) (380) (2,732)Accounts payable and accrued liabilities 40,286 11,311 (2,276)Net cash provided by operating activities 104,261 50,915 24,180CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment (24,977) (32,584) (19,988)Payments for acquisitions (135,347) (89,602) (4,410)Proceeds from disposals of property, plant and equipment 1,312 3,708 627Proceeds from (payments for) disposals of business units 1,177 — (2,333)Net cash used in investing activities (157,835) (118,478) (26,104)CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolver borrowings 206,809 213 137,302Repayments of revolver borrowings (161,809) (213) (150,602)Proceeds from debt issuance — — 200,000Repayments of debt (117) — (61,113)Proceeds from exercise of stock options and warrants 546 396 224Payments of other long-term obligations (2,298) (2,250) —Payments for other financing (8,611) (5,194) (1,995)Debt issuance costs (893) (974) (9,063)Payments for share repurchases — (4,824) —Other treasury share purchases (6,330) (2,056) (4,913)Net cash provided by (used in) financing activities 27,297 (14,902) 109,840NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (26,277) (82,465) 107,916CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 30,202 112,667 4,751CASH AND CASH EQUIVALENTS AT END OF PERIOD $3,925 $30,202 $112,667 60 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDARIESCONSOLIDATED STATEMENTS OF CASH FLOWS (continued)(in thousands) Years Ended December 31, 2015 2014 2013Supplemental Disclosure of Cash Flow Information: Cash paid for interest $19,503 $18,636 $7,324Cash paid for income taxes $1,949 $1,464 $305 Supplemental Disclosure of Non-cash Investing and Financing Activities: Conversion of convertible debt to equity $— $— $6,381Capital expenditures funded by capital leases and promissory notes $23,450 $11,161 $11,891Acquisitions funded by stock issuance, contingent consideration and deferred payments $50,805 $— $—Dispositions funded through promissory note and deferred payments $3,380 $— $—The accompanying notes are an integral part of these consolidated financial statements.61 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESNature of OperationsU.S. Concrete, Inc., a Delaware corporation, provides ready-mixed concrete, aggregates and concrete-related products and services to the construction industryin several major markets in the United States. U.S. Concrete, Inc. is a holding company and conducts its businesses through its consolidated subsidiaries. In thesenotes to the consolidated financial statements (these "Notes"), we refer to U.S. Concrete, Inc. and its subsidiaries as "we," "us," the "Company," or "U.S. Concrete"unless we specifically state otherwise or the context indicates otherwise.Basis of PresentationThe consolidated financial statements consist of the accounts of U.S. Concrete, Inc. and its wholly owned subsidiaries. All significant intercompany accountbalances and transactions have been eliminated.During 2015, we completed eight acquisitions consisting of 22 standard ready-mixed concrete plants, five quarries (one of which we have operated under alease agreement since October 2014), and related assets and liabilities (see Note 2). All of the assets acquired and liabilities assumed were recorded at theirrespective fair value as of the date of the acquisition, and the results of operations are included in the consolidated financial statements from the respective date ofacquisition.On June 2, 2015, we completed the sale of our one remaining precast operation in Pennsylvania. This sale represented the final divestiture of the Company'sowned assets related to precast operations, which were classified as held for sale as of December 31, 2014. The results of operations for this unit have beenincluded in discontinued operations for the periods presented.During 2014, we completed nine acquisitions consisting of seven standard ready-mixed concrete plants and related assets, 16 volumetric ready-mixed concretefacilities, 109 volumetric ready-mixed concrete trucks and related assets, and leases to operate two aggregate distribution terminals in New York and related assetsand liabilities (see Note 2). All of the assets acquired and liabilities assumed were recorded at their respective fair value as of the date of the acquisition, and theresults of operations are included in the consolidated financial statements from the respective date of acquisition.On July 26, 2013, we acquired three ready-mixed concrete plants and related assets in our north Texas market from Bodin Concrete, L.P. All of the assetsacquired were recorded at their respective fair value as of the date of the acquisition, and the results of operations are included in the consolidated financialstatements from the date of acquisition.Business CombinationsWe have acquired a number of businesses in recent years. We record the operating results of our acquired businesses in our consolidated statements ofoperations from the date of acquisition. Acquisitions are accounted for using the purchase method of accounting in accordance with Financial AccountingStandards Board ("FASB") Accounting Standards Codification ("ASC") 805 "Business Combinations." We allocate the purchase price to the assets acquired,including identifiable intangible assets, liabilities assumed, and contingent consideration obligations based on their estimated fair value on the date of theacquisition. These allocations require the significant use of estimates and are based on information that was available to management at the time these consolidatedfinancial statements were prepared. We utilized recognized valuation techniques, including the income approach, sales approach, and cost approach to value the netassets acquired. The excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. Final valuations of assets and liabilities areobtained and recorded within one year from the date of the acquisition. See Note 13 for additional information regarding valuation of contingent consideration.Assets and Liabilities Held for SaleWe classify long-lived assets (disposal groups) to be sold as held for sale in the period in which all of the following criteria are met: management, having theauthority to approve the action, commits to a plan to sell the asset (disposal group); the asset (disposal group) is available for immediate sale in its presentcondition subject only to terms that are usual and customary for sales of such assets (disposal groups); an active program to locate a buyer and other actionsrequired to complete the plan to sell the asset (disposal group) have been initiated; the sale of the asset (disposal group) is probable, and transfer of the asset(disposal62 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)group) is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond our control extend the period of timerequired to sell the asset (disposal group) beyond one year; the asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation toits current fair value; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will bewithdrawn.We initially measure a long-lived asset (disposal group) that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell.Any loss resulting from this measurement is recognized in the period in which the held-for-sale criteria are met. Conversely, gains are not recognized on the sale ofa long-lived asset (disposal group) until the date of sale. We assess the fair value of a long-lived asset (disposal group) less any costs to sell each reporting period itremains classified as held for sale and report any subsequent changes as an adjustment to the carrying value of the asset (disposal group), as long as the newcarrying value does not exceed the carrying value of the asset at the time it was initially classified as held for sale.Upon determining that a long-lived asset meets the criteria to be classified as held for sale, we report the assets and liabilities of the disposal group, if material,in the line items assets held for sale and liabilities held for sale, respectively, in our consolidated balance sheets.Cash and Cash EquivalentsWe record as cash equivalents all highly liquid investments having maturities of three months or less at the original date of purchase. Our cash equivalentsmay include money market accounts, certificates of deposit and commercial paper of highly rated corporate or government issuers. We classify our cashequivalents as held-to-maturity. Cash equivalents are stated at cost plus accrued interest, which approximates market value. The maximum amount placed in anyone financial institution is limited in order to reduce risk. At times, our investments may be in excess of amounts insured by the Federal Deposit InsuranceCorporation. We have not experienced any losses on these accounts. Cash held as collateral or escrowed for contingent liabilities is included in other current andnoncurrent assets based on the expected release date of the underlying obligation.Accounts Receivable Accounts receivables are reported net of allowance for doubtful accounts and customer disputes. We maintain an allowance for accounts receivable that webelieve may not be collected in full. A provision for bad debt expense recorded to selling, general and administrative expenses increases the allowance. A provisionfor customer disputes recorded as a reduction to revenue also increases the allowance. Accounts receivable are written off when we determine the receivable willnot be collected. Accounts receivable that we write off our books decrease the allowance. We determine the amount of bad debt expense and customer disputelosses we record each period and the resulting adequacy of the allowance at the end of each period by using a combination of historical loss experience, acustomer-by-customer analysis of our accounts receivable balances each period, and subjective assessments of our loss exposure.InventoriesInventories consist primarily of cement and other raw materials, aggregates at our pits and quarries, and building materials that we hold for sale or use in theordinary course of business. Inventories are stated at the lower of cost or fair market value using the average cost and first-in, first-out methods. We reduce thecarrying value of our inventories for estimated excess and obsolete inventories equal to the difference between the cost of inventory and its estimated realizablevalue based upon assumptions about future product demand and market conditions. Once the new cost basis is established, the value is not increased with anychanges in circumstances that would indicate an increase after the remeasurement. If actual product demand or market conditions are less favorable than thoseprojected by management, inventory write-downs may be required that could result in a material change to our consolidated results of operations or financialposition.Prepaid ExpensesPrepaid expenses primarily include amounts we have paid for insurance, licenses, taxes, rent, and maintenance contracts. We expense or amortize all prepaidamounts as used or over the period of benefit, as applicable. 63 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Property, Plant and Equipment, Net We state property, plant and equipment at cost and use the straight-line method to compute depreciation of these assets other than mineral deposits over thefollowing estimated useful lives: buildings and land improvements, from 10 to 40 years; machinery and equipment, from 10 to 30 years; mixers, trucks and othervehicles, from one to 12 years; and other, from three to 10 years. We capitalize leasehold improvements on properties held under operating leases and amortizethose costs over the lesser of their estimated useful lives or the applicable lease term. We compute depletion of mineral deposits as such deposits are extractedutilizing the unit-of-production method. We expense maintenance and repair costs when incurred and capitalize and depreciate expenditures for major renewalsand betterments that extend the useful lives of our existing assets. When we retire or dispose of property, plant or equipment, we remove the related cost andaccumulated depreciation from our accounts and reflect any resulting gain or loss in our consolidated statements of operations.Impairment of Long-lived assetsWe evaluate the recoverability of our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of anasset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected tobe generated by the asset. Such evaluations for impairment are significantly impacted by estimates of future prices for our products, capital needs, economic trendsin the applicable construction sector and other factors. If we consider such assets to be impaired, the impairment we recognize is measured by the amount bywhich the carrying amount of the assets exceeds their fair value. Assets to be disposed of by sale are reflected at the lower of their carrying amounts, or fair values,less cost to sell. We test for impairment using a multi-tiered approach that incorporates an equal weighting to a multiple of earnings and an equal weighting toundiscounted estimated future cash flows.Intangible Assets Including GoodwillWe amortize identifiable intangible assets with finite lives over their estimated useful lives using a straight-line approach. We record as goodwill the amountby which the total purchase price we have paid for acquisitions exceeds our estimated fair value of the net tangible and identifiable intangible assets acquired. Wedo not amortize goodwill but instead evaluate it for impairment within the reporting unit on an annual basis, or more often if events or circumstances indicate thatthere may be impairment. We generally test for intangible asset impairment in the fourth quarter of each year, because this period gives us the best visibility of thereporting units’ operating performances for the current year (seasonally, April through October are our highest revenue and production months), and our outlookfor the upcoming year, since much of our customer base is finalizing operating and capital budgets during the fourth quarter. The impairment test we use involvesestimating the fair value of our reporting units and comparing the result to the reporting unit's carrying value. We estimate fair value using an equally weightedcombination of discounted cash flows and multiples of invested capital to EBITDA. The discounted cash flow model includes forecasts for revenue and cash flowsdiscounted at our weighted average cost of capital. Multiples of invested capital to EBITDA are calculated using a weighted average of two selected 12 monthperiods results by reporting unit compared to the enterprise value of the Company, which is determined based on the combination of the market value of our capitalstock and total outstanding debt. If the fair value exceeds the carrying value, the second step is not performed and no impairment is recorded. If however, the fairvalue is below the carrying value, a second step is performed to calculate the amount of the impairment by measuring the goodwill at an implied fair value. SeeNote 4 for further discussion of our goodwill and purchased intangible assets.Debt Issue CostsWe amortize debt issue costs related to our $250.0 million asset-based revolving credit facility (the "Revolving Facility"), our 8.5% Senior Secured Notes due2018 (the "2018 Notes"), and our 9.5% Convertible Secured Notes due 2015 (the "Convertible Notes") as interest expense over the scheduled maturity period ofthe debt. Unamortized debt issuance costs were $6.1 million and $6.8 million as of December 31, 2015 and 2014 , respectively. We include unamortized debtissuance costs in other assets. See Note 9 for additional information regarding our debt, and Note 10 regarding our extinguishment of debt during 2013.Revenue and ExpensesWe derive substantially all of our revenue from the production and delivery of ready-mixed concrete, aggregates, and related building materials. Werecognize revenue, net of sales tax, when products are delivered, selling price is fixed or determinable, persuasive evidence of an arrangement exists, and collectionis reasonably assured. Amounts billed to customers for delivery costs are classified as a component of total revenues and the related delivery costs (excludingdepreciation) are classified as a component64 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)of total cost of goods sold. Cost of goods sold consists primarily of product costs and operating expenses (excluding depreciation, depletion andamortization). Operating expenses consist primarily of wages, benefits, insurance and other expenses attributable to plant operations, repairs and maintenance, anddelivery costs. Selling expenses consist primarily of sales commissions, salaries of sales managers, travel and entertainment expenses, and trade show expenses.General and administrative expenses consist primarily of executive and administrative compensation and benefits, office rent, utilities, communication andtechnology expenses, provision for doubtful accounts, and legal and professional fees.Deferred RentWe recognize escalating lease payments on a straight-line basis over the term of each respective lease with the difference between cash payment and rentexpense recognized being recorded as deferred rent in accrued liabilities in the accompanying consolidated balance sheets. Insurance ProgramsWe maintain third-party insurance coverage against certain risks. Under our insurance programs, we share the risk of loss with our insurance underwriters bymaintaining high deductibles subject to aggregate annual loss limitations. In connection with these automobile, general liability and workers’ compensationinsurance programs, we have entered into standby letters of credit agreements totaling $11.3 million as of both December 31, 2015 and 2014 . We fund ourdeductibles and record an expense for losses we expect under the programs. We determine expected losses using a combination of our historical loss experienceand subjective assessments of our future loss exposure. The estimated losses are subject to uncertainty from various sources, including changes in claim reportingpatterns, claim settlement patterns, judicial decisions, legislation and economic conditions. The amounts accrued for self-insured claims were $12.0 million and$9.5 million as of December 31, 2015 and 2014 , respectively. We include these accruals in accrued liabilities on our consolidated balance sheets.Income TaxesIn accordance with ASC 740 - Income Taxes , we use the liability method of accounting for income taxes. Under this method, we record deferred income taxesbased on temporary differences between the financial reporting and tax bases of assets and liabilities and use enacted tax rates and laws that we expect will be ineffect when we recover those assets or settle those liabilities, as the case may be, to measure those taxes. We record a valuation allowance to reduce the deferredtax assets to the amount that is more likely than not to be realized. We have a valuation allowance of $4.1 million and $34.9 million as of December 31, 2015 and2014 , respectively. In previous years, we netted our uncertain tax positions against our net operating loss carryforwards in accordance with FASB guidelines. As aresult of the utilization of those loss carryforwards, we now present the uncertain tax benefits in other long-term obligations and deferred credits on ourconsolidated balance sheets.Contingent ConsiderationWe record an estimate of the fair value of contingent consideration within accrued liabilities and other long-term obligations on our consolidated balancesheets. On a quarterly basis, we revalue the liability and record increases or decreases in the fair value as an adjustment to earnings. Changes to the contingentconsideration liability can result from adjustments to the discount rate, accretion of interest expense due to the passage of time, or changes in the assumptionsregarding probabilities of successful achievement of related milestones and the estimated timing in which the milestones are achieved. The assumptions used inestimating fair value require significant judgment. The use of different assumptions and judgments could result in a materially different estimate of fair value. Forfurther information, see Note 13 regarding our fair value disclosures.Fair Value of Financial InstrumentsOur financial instruments consist of cash and cash equivalents, trade receivables, trade payables, long-term debt, other long-term obligations, and derivativeliabilities. We consider the carrying values of cash and cash equivalents, trade receivables and trade payables to be representative of their respective fair valuesbecause of their short-term maturities or expected settlement dates. The fair value of our 2018 Notes, estimated based on broker / dealer quoted market prices, was$207.0 million and $209.0 million as of December 31, 2015 and 2014, respectively. The carrying value of outstanding amounts under our Revolving Facilityapproximates fair value due to the floating interest rate. Our Convertible Notes were repaid on August 31, 2015 and had no fair value as of December 31, 2015 .The fair value of the Convertible Notes was $0.1 million at December 31, 2014 , with no embedded derivative. The fair value of issued Warrants (as definedherein) was $67.4 million and $25.2 million at December 31, 2015 and65 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)2014 , respectively. The fair value of our contingent consideration obligations associated with acquisitions was $30.1 million at December 31, 2015 and $5.3million at December 31, 2014 . For further information, see Note 11 regarding our derivative liabilities, Note 12 regarding our other long-term obligations, andNote 13 regarding our fair value disclosures.Use of EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requiresthe use of estimates and assumptions by management in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilitiesas of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from thoseestimates. Estimates and assumptions that we consider significant in the preparation of our financial statements include those related to our allowance for doubtfulaccounts, goodwill, intangibles, valuation of derivatives, valuation of contingent consideration, accruals for self-insurance, income taxes, the valuation of inventoryand the valuation and useful lives of property, plant and equipment.Stripping CostsWe include post-production stripping costs in the cost of inventory produced during the period as these costs are incurred. Post-production stripping costsrepresent stripping costs incurred after the first salable minerals are extracted from the mine.Earnings (Loss) Per ShareBasic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period.Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period aftergiving effect to all potentially dilutive securities outstanding during the period. See Note 18 for additional information regarding our earnings (loss) per share. Comprehensive Income (Loss)Comprehensive income (loss) represents all changes in equity of an entity during the reporting period, except those resulting from investments by anddistributions to stockholders. For the years ended December 31, 2015 , 2014 and 2013 , no differences existed between our consolidated net income (loss) and ourconsolidated comprehensive income (loss).Stock-based CompensationStock-based employee compensation cost is measured at the grant date based on the calculated fair value of the award. We recognize expense over theemployee’s requisite service period, generally the vesting period of the award, or in the case of performance-based awards, over the life of the derived serviceperiod. The related excess tax benefit received upon exercise of stock options or vesting of restricted stock, if any, is reflected in the statement of cash flows as afinancing activity rather than an operating activity. See Note 17 for additional information regarding our stock-based compensation plans.Recent Accounting PronouncementsIn November 2015, the FASB issued an amendment which simplifies the presentation of deferred income taxes. The amendment requires that deferred taxassets and liabilities be classified as non-current in the balance sheet. The new guidance is effective for annual periods beginning after December 15, 2016, andinterim periods within those annual periods, with early adoption permitted. We early adopted the provisions of this new standard effective with the annual periodended December 31, 2015 on a prospective basis. Adoption of this new standard resulted in a reclassification of our net current deferred tax asset to net non-currentdeferred tax asset in our consolidated balance sheets. No prior periods were retrospectively adjusted.In September 2015, the FASB issued an amendment on measurement period adjustments related to business combinations. The new guidance requires that thecumulative impact of a measurement period adjustment, including the impact on prior periods, be recognized in the reporting period in which the adjustment isidentified. Entities should apply the new guidance prospectively to measurement period adjustments that occur after the effective date. The amendment is effectivefor interim and annual periods beginning after December 15, 2015, with early adoption permitted. We early adopted the provisions of this new standard effectivewith the interim period ended September 30, 2015. Accordingly, we applied the amendment prospectively, and it did not result in any material impact on ourconsolidated financial statements or results of operations.66 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) In April 2015, the FASB issued an amendment related to debt issuance costs. The amendment requires that all costs incurred to issue debt be presented in thebalance sheet as a direct reduction from the carrying value of the debt, similar to the presentation of debt discounts. Entities should apply the new guidance on aretrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the newguidance. In August 2015, the FASB issued a second amendment related to debt issuance costs clarifying that debt issuance costs related to line-of-creditarrangements could continue to be presented as an asset and be subsequently amortized over the term of the line-of-credit arrangement, regardless of whether thereare any outstanding borrowings on the arrangement. The amendment is effective for annual periods beginning after December 15, 2015 and interim periods withinthose annual periods, with early adoption permitted. We do not expect the adoption of this amendment in fiscal year 2016 to have a material impact on ourconsolidated financial statements and results of operations. In May 2014, the FASB issued an amendment related to revenue recognition. The new guidance sets forth a new five step revenue recognition model whichreplaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance thathave historically existed under U.S. GAAP. The underlying principle of the new amendment is that a business or other organization will recognize revenue todepict the transfer of promised goods or services to customers in an amount that reflects what it ultimately expects to receive in exchange for the goods or services.The amendment also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prioraccounting guidance. In August 2015, the FASB issued a second amendment related to revenue recognition to delay the effective date of the new revenuerecognition guidance by one year. The amendment is effective for annual periods beginning after December 15, 2017 and interim periods within those periods.Early adoption will be permitted for annual periods beginning after December 15, 2016 and interim periods within those periods. We are currently evaluating theimpact that this standard will have on our consolidated financial statements and results of operations.In April 2014, the FASB issued an amendment on reporting discontinued operations and disclosures of disposals of components of an entity. Specifically, theamendment revises the definition of a discontinued operation, expands disclosure requirements for transactions that meet the definition of a discontinued operationand requires entities to disclose additional information about individually significant components that are disposed of or held for sale and do not qualify asdiscontinued operations. Additionally, entities will be required to reclassify assets and liabilities of a discontinued operation for all comparative periods presentedin the statement of financial position and to separately present certain information related to the operating and investing cash flows of the discontinued operation,for all comparative periods, in the statement of cash flows. The amendment is effective for annual and interim periods beginning after December 15, 2014 and is tobe adopted on a prospective basis for all disposals (except disposals classified as held for sale prior to the adoption date) or components initially classified as heldfor sale in periods beginning on or after the adoption date. We adopted this guidance effective January 1, 2015, and there was no material impact on ourconsolidated financial statements or results of operations.2. ACQUISITIONS AND DISPOSITIONS2015 AcquisitionsOn February 23, 2015 , we acquired the equity of Right Away Redy Mix, Inc. ("Right Away"), located in Oakland, California. The purchase price was $18.0million in cash, plus closing adjustments of $0.8 million , final working capital adjustments of $1.1 million , and potential future earn-out payments of up to $6.0million based on the achievement of certain defined annual volume thresholds over a six -year period (the "Right Away Earn-out"). We funded the purchase withcash on hand. The acquisition included four ready-mixed concrete facilities, 49 mixer trucks and a fleet of transfer trucks used to transport cement andaggregates. The acquisition expands our business in our existing northern California market. The fair value of the assets acquired and liabilities assumed in theRight Away acquisition is preliminary and remains subject to adjustments, including, but not limited to, adjustments related to determination of the conclusion oftax attributes as of the acquisition date and the fair value of identifiable intangible assets and the Right Away Earn-out.On April 1, 2015 , we acquired the equity of Ferrara Bros. Building Materials Corp. ("Ferrara Bros."), located in New York, New York. We acquired theequity of Ferrara Bros. for $45.0 million in cash, approximately 442,000 shares of our common stock, calculated in accordance with the terms of the sharepurchase agreement ("SPA"), and valued at approximately $15.1 million on the date of issuance, less final working capital adjustments of $0.9 million , pluspotential incentive awards in the form of equity of up to $35.0 million based on the achievement of certain EBITDA thresholds, as defined in the SPA, over a four -year period beginning in 2017 ("Ferrara Bros. Contingent Consideration"). We funded the purchase through a combination of cash on hand67 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)and borrowings under our Revolving Facility. Ferrara Bros. operates six ready-mixed concrete plants at its four facilities in New York and New Jersey and afleet of 89 mixer trucks. The acquisition expands our presence in the New York metropolitan market and allows us to more effectively serve construction projectsin Manhattan. The fair value of the assets acquired and liabilities assumed in the Ferrara Bros. acquisition is preliminary and remains subject to adjustments,including, but not limited to, adjustments related to the fair value of the Ferrara Bros. Contingent Consideration and identifiable intangible assets.On May 21, 2015 , we acquired the equity of Colonial Concrete Co. ("Colonial"), located in Newark, New Jersey. The purchase price was $15.0 million incash, plus closing adjustments of $0.2 million . We funded the purchase through a combination of cash on hand and borrowings under our Revolving Facility. Theacquisition included four ready-mixed concrete plants at three locations and a fleet of approximately 40 mixer trucks. The acquisition expanded our business inthe New York metropolitan and northern New Jersey markets. The fair value of the assets acquired and liabilities assumed in the Colonial acquisition ispreliminary and remains subject to adjustments, including, but not limited to, adjustments related to working capital, certain accrued liabilities, and the fair value ofidentifiable intangible assets. On May 29, 2015 , we acquired the assets of DuBrook Concrete, Inc. ("DuBrook"), located in Chantilly, Virginia, part of the greater Washington, D.C.metropolitan area. The purchase price was $11.5 million in cash, plus potential future earn-out payments based on volumes sold over a four -year period (the"DuBrook Earn-out"). The DuBrook Earn-out payments are not capped; however, we do not expect total payments to be in excess of $1.0 million . We funded thepurchase through a combination of cash on hand and borrowings under our Revolving Facility. The acquisition included three ready-mixed concrete plants and afleet of 42 mixer trucks. The purchase of these assets expanded our existing business in the Washington, D.C. metropolitan area. The fair value of the assetsacquired and liabilities assumed in the DuBrook acquisition is preliminary and remains subject to adjustments, including, but not limited to, adjustments related toworking capital and the fair value of identifiable intangible assets and the DuBrook Earn-out.On September 24, 2015 , we acquired the Wantage Stone (“Wantage”) reserves, a site development quarry including an 80 acre quarry along with miningrights to an additional 77 acres of land located in Hamburg, New Jersey, from Bicsak Brothers Realty, LLC and Wantage Stone, LLC. We have operated theWantage quarry under a lease agreement since October 2014. The purchase price was $15.2 million in cash, plus deferred payments of $3.0 million payable overa three -year period. We funded the purchase through a combination of cash on hand and borrowings under our Revolving Facility. This acquisition expanded ouraggregates operations in our New York and New Jersey markets. The fair value of the assets acquired and liabilities assumed in the Wantage acquisition ispreliminary and remains subject to adjustments, including, but not limited to, adjustments related to the fair value of identifiable intangible assets and property,plant and equipment.On October 27, 2015 , we acquired the equity of Heavy Materials, LLC ("Heavy"), a vertically integrated ready-mixed concrete producer located in the U.S.Virgin Islands. The purchase price was $21.7 million in cash, less purchase adjustments of $0.8 million , plus deferred payments of $5.0 million , which will bepaid over a two year period. We funded the purchase through a combination of cash on hand and borrowings on our Revolving Facility. Heavy operates four ready-mixed concrete plants, a fleet of 32 mixer trucks, and two quarries. Heavy also leases an industrial waterfront property that it utilizes as a marine terminaland sales yard. This acquisition expands our ready-mixed concrete and aggregates operations into new markets in the Caribbean islands. The fair value of the assetsacquired and liabilities assumed in the Heavy acquisition is preliminary and remains subject to adjustments, including, but not limited to, adjustments related toworking capital and the fair value of identifiable intangible assets and property, plant and equipment. During the year ended December 31, 2015 , we also completed two other individually immaterial acquisitions comprised of two sand and gravel operationsnear Vernon, Texas and Waurika, Oklahoma and one ready-mixed concrete operation in the U.S. Virgin Islands. The aggregate consideration paid consisted of $12.9 million in cash and $1.9 million in deferred payments payable within ten years. We funded these purchases through a combination of cash on hand andborrowings under our Revolving Facility. The acquisition of these assets expanded our business in our existing west Texas market and in the Caribbean market.The purchase price allocation for these two acquisitions is preliminary and remains subject to adjustments, including, but not limited to, the fair value ofidentifiable intangible assets and property, plant and equipment.We have made changes to the preliminary purchase price allocations for the 2015 acquisitions during the year ended December 31, 2015 primarily related to(i) fair value estimates of assets acquired and liabilities assumed for Right Away, Ferrara Bros., Colonial, DuBrook, and Wantage, (ii) working capital adjustmentsfor Right Away, Ferrara Bros., and DuBrook, (iii) valuation of the Right Away Earn-out, Ferrara Bros. Contingent Consideration and DuBrook Earn-out, and (iv)valuation of identifiable intangible assets for the Right Away, Ferrara Bros., Colonial, and DuBrook acquisitions. The following table summarizes the total68 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)consideration for the 2015 acquisitions and presents the allocation of these amounts to the net tangible and intangible assets acquired and liabilities assumed basedon the estimated fair values as of the respective acquisition date (in thousands). 2015 Acquisitions Right Away (1) Ferrara Bros.(2)(3) Colonial (2) DuBrook (2)(4) Wantage (2)(5) Heavy (2)(6) All Other(7)Cash$928 $67 $888 $— $— $20 $—Accounts receivable1,832 13,224 4,305 1,218 — 975 —Inventory348 1,434 378 349 — 1,449 668Other current assets196 608 126 739 — 92 —Property, plant and equipment9,696 13,147 6,325 2,394 12,694 6,095 5,153Definite-lived intangible assets7,036 50,310 4,640 4,473 — — —Other long-term assets— — 153 — — 47 —Total assets acquired$20,036 $78,790 $16,815 $9,173 $12,694 $8,678 $5,821Current liabilities1,399 6,944 5,299 910 — 3,269 91Long-term deferred income tax5,929 — — — — — —Other long-term liabilities— — — 59 — — —Total liabilities assumed$7,328 $6,944 $5,299 $969 $— $3,269 $91Goodwill11,086 6,916 3,680 3,887 5,301 $20,243 8,933Total consideration$23,794 $78,762 $15,196 $12,091 $17,995 $25,652 $14,663(1)The purchase price allocation for the Right Away acquisition is subject to change pending determination of the conclusion of tax attributes as of theacquisition date and the fair value of identifiable intangible assets and the Right Away Earn-out. The fair value of the Right Away acquired accountsreceivable is $1.8 million , with a gross contractual amount of $2.2 million . We do not expect to collect $0.4 million of the Right Away acquired accountsreceivable. Total consideration for the Right Away acquisition includes $19.9 million of cash and $3.9 million for the fair value of the Right Away Earn-out asof the acquisition date.(2)The purchase price allocations for the Ferrara Bros., Colonial, DuBrook, Wantage, and Heavy acquisitions are preliminary and remain subject to adjustments,including, but not limited to, adjustments related to working capital, the fair value of the Ferrara Bros. Contingent Consideration, identifiable intangible assets,property, plant and equipment, and certain accrued liabilities. The fair value of the DuBrook and Colonial acquired accounts receivable approximate the grosscontractual amounts as of the respective acquisition dates. The fair value of the Ferrara Bros. acquired accounts receivable is $13.2 million , with a grosscontractual amount of $14.3 million . We do not expect to collect $1.1 million of the Ferrara Bros. acquired accounts receivable. The fair value of the Heavyacquired accounts receivable is $1.0 million , pending further analysis, with a gross contractual amount of $4.3 million . We do not expect to collect $3.3million of the Heavy acquired accounts receivable, pending further review.(3)Total consideration for the Ferrara Bros. acquisition includes $44.1 million of cash, approximately 442,000 shares of our common stock valued atapproximately $15.1 million on the date of issuance, and $19.6 million for the fair value of the Ferrara Bros. Contingent Consideration as of the acquisitiondate.(4)Total consideration for the DuBrook acquisition includes $11.5 million of cash and $0.6 million for the fair value of the Dubrook Earn-out as of theacquisition date.(5)Total consideration for the Wantage acquisition includes $15.2 million of cash and $2.8 million for the fair value of deferred payments due to the previousowners.(6)Total consideration for the Heavy acquisition includes $20.9 million of cash and $4.8 million for the fair value of deferred payments due to the previousowners.(7)The purchase price allocation for the acquisitions included in the caption "All Other" above are preliminary and remain subject to adjustments, including, butnot limited to, the fair value of identifiable intangible assets and property, plant and equipment.69 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Total consideration for acquisitions included in the caption "All Other" above includes $13.0 million of cash and $1.7 million for the fair value of deferredpayments due to the previous owners.2014 AcquisitionsOn October 20, 2014 , we acquired the assets of Custom-Crete ("Custom-Crete"), with operations in Dallas / Fort Worth, Houston, San Antonio, and Austin,Texas from Oldcastle Architectural, Inc., a wholly owned subsidiary of CRH plc ("Oldcastle Architectural") for $37.4 million in cash, plus a deferred payment of$0.8 million to be paid upon the division of certain shared properties, less final working capital adjustments of $1.6 million . The fair value of the assets acquiredand liabilities assumed in the Custom-Crete acquisition is final.On December 5, 2014 , we acquired the assets of Mobile-Crete of South Texas, LLC and Scofield Construction Services, LLC (collectively, "Mobile-Crete")with operations in San Antonio, Austin, and south Texas for $21.5 million in cash, plus potential earn-out payments of up to $3.0 million in cash (the "Mobile-Crete Earn-out"). The earn-out payments of up to $1.5 million , which are due on the first and second anniversary of the acquisition date, are tied to the applicableyear's average daily closing price of West Texas Intermediate crude oil ("WTI") reaching certain predetermined levels. The fair value of the assets acquired andliabilities assumed in the Mobile-Crete acquisition is final.The Custom-Crete and Mobile-Crete acquisitions included 16 volumetric ready-mixed concrete facilities and 109 volumetric ready-mixed concrete trucks. Theaddition of these operations expanded our presence into all of the major metropolitan markets in Texas and provided us with the capability to deliver ready-mixedconcrete to our customers via on-site batching and mixing to customer specifications.On October 20, 2014 , we acquired the equity of New York Sand and Stone, LLC ("NYSS") for $15.2 million in cash, less final working capital adjustmentsof $0.8 million . The NYSS acquisition included leases to operate two aggregate distribution terminals in New York. These terminals allow us to deliver rawmaterials more efficiently to our New York and New Jersey markets. The fair value of the assets acquired and liabilities assumed in the NYSS acquisition are final.During the year ended December 31, 2014 , we also completed six other individually immaterial acquisitions comprised of seven ready-mixed concrete plantsand related assets in our New York and west Texas markets. The aggregate consideration paid consisted of $15.5 million in cash and $1.1 million in promissorynotes. The acquisition of these assets expanded our business in our existing markets. The fair values of the assets acquired and liabilities assumed from these sixready-mixed concrete acquisitions are final.We have made changes to the preliminary purchase price allocations for the 2014 acquisitions during the year ended December 31, 2015 primarily related to(i) fair value estimates of assets acquired and liabilities assumed for Mobile-Crete and Custom-Crete, (ii) working capital adjustments for Custom-Crete, Mobile-Crete, and NYSS, (iii) valuation of the Mobile-Crete Earn-out and Mobile-Crete identifiable intangible assets, (iv) valuation of Custom-Crete land rights anddeferred payment, and (v) changes in the valuation of identifiable intangible assets for three of the six acquisitions included in "All Other" in the table below. Thefollowing table summarizes the total consideration for the 2014 acquisitions and presents the allocation of these amounts to the net tangible and intangible assetsacquired and liabilities assumed based on the estimated fair values as of the respective acquisition dates (in thousands).70 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 2014 Acquisitions Custom-Crete (1) NYSS Mobile-Crete (2) All Other (3)Accounts receivable (4)$3,669 $5,898 $2,578 $—Inventory522 1,161 336 295Other current assets— 134 — 102Property, plant and equipment11,802 1,442 4,156 7,400Intangible assets11,078 5,042 8,630 4,722Total assets acquired$27,071 $13,677 $15,700 $12,519Current liabilities2,598 2,539 1,284 —Long-term liabilities473 — — —Total liabilities assumed$3,071 $2,539 $1,284 $—Goodwill12,513 3,260 8,685 4,050Total consideration$36,513 $14,398 $23,101 $16,569(1)Total consideration for the Custom-Crete acquisition includes $35.8 million of cash and $0.7 million for the fair value of a deferred payment as of theacquisition date to be paid upon the division of certain shared properties.(2)Total consideration for the Mobile-Crete acquisition includes $21.5 million of cash and $1.6 million for the fair value of the Mobile-Crete Earn-out as of theacquisition date.(3)Total consideration for acquisitions included in the caption "All Other" above includes $15.5 million of cash and $1.1 million for the fair value of notespayable due to the previous owners as of the acquisition date.These allocations require the significant use of estimates and are based on information that was available to management at the time these consolidatedfinancial statements were prepared. We utilized recognized valuation techniques, including the income approach, sales approach, and cost approach to value the netassets acquired. See Note 13 for additional information regarding valuation of contingent consideration.Acquired Intangible Assets and GoodwillAcquired intangible assets in 2015 and 2014 of $95.9 million consisted of trade names, customer relationships, non-compete agreements, leasehold interests, afavorable contract, backlog, and land rights. With the exception of land rights, the amortization period of these intangible assets range from one year to 25 years.The land rights have an indefinite life. The major classes of intangible assets acquired in the 2015 and 2014 acquisitions were as follows (in thousands): Weighted AverageAmortization Period (InYears) Fair Value At AcquisitionDateTrade names22.98 $39,002Customer relationships8.29 32,469Non-compete agreements4.92 10,167Leasehold interests12.24 7,525Favorable contract3.50 3,650Backlog1.00 1,640Land rightsindefinite-lived 1,478Total $95,93171 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)During the year ended December 31, 2015 , we recorded $9.7 million of amortization expense related to these intangible assets. As of December 31, 2015 , theestimated future aggregate amortization expense of intangible assets from the 2015 and 2014 acquisitions was as follows (in thousands): Year Ending December 31,2016$10,47620179,87020189,42220198,01320206,377Thereafter40,005 Total$84,163The goodwill ascribed to each of these acquisitions is related to the synergies we expect to achieve with expansion in the markets in which we already operateas well as entry into new metropolitan areas of our existing geographic markets. The goodwill relates to our ready-mixed concrete reportable segment with theexception of Heavy, Wantage, NYSS, and one of the two 2015 acquisitions included in the caption "All Other." Goodwill resulting from the Heavy acquisitionrelates to our ready-mixed concrete reportable segment and our aggregate products reportable segment. Goodwill resulting from the Wantage acquisition and oneof the two 2015 acquisitions included in the caption "All Other" relates to our aggregate products reportable segment. Goodwill resulting from the NYSSacquisition relates to our other non-reportable segments. See Note 4 for the allocation of goodwill from our 2014 and 2015 acquisitions to our segments. We expectthe goodwill to be deductible for tax purposes, with the exception of the Right Away acquisition. See Note 16 for additional information regarding income taxes.Actual and Pro Forma Impact of AcquisitionsWe recorded approximately $232.5 million of revenue and $13.4 million of income from operations in our consolidated results of operations for the yearended December 31, 2015 related to the 2014 and 2015 acquisitions following their respective dates of acquisition. We recorded approximately $16.6 million ofrevenue and $0.8 million of income from operations in our consolidated results of operations for the year ended December 31, 2014 related to the 2014 acquisitionsfollowing their respective dates of acquisition.The unaudited pro forma information presented below reflects the combined financial results for all of the acquisitions completed during 2014 excluding threeof the six acquisitions that are included in the caption "All Other" in the table captioned "2014 Acquisitions" above, as historical financial results for theseoperations was not material and impractical to obtain from the former owners. Additionally, one of the two 2015 acquisitions that are included in the caption "AllOther" in the table captioned "2015 Acquisitions" above was excluded as historical financial results for this operation was not material and impractical to obtainfrom the former owners. All other acquisitions have been included and represent our estimate of the results of operations for the years ended December 31, 2015and 2014 as if the 2014 acquisitions had been completed on January 1, 2013 and the 2015 acquisitions had been completed on January 1, 2014 (in thousands,except per share information): For the Years Ended December 31, (unaudited) 2015 2014Revenue from continuing operations$1,033,058 $947,357Net income$29,885 $23,317 Income per share, basic$2.12 $1.72Income per share, diluted$1.92 $1.68The above pro forma results are unaudited and were prepared based on the historical U.S. GAAP results of the Company and the historical results of the 12acquired companies for which financial information was available, based on data provided by the72 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)former owners. These results are not necessarily indicative of what the Company's actual results would have been had the 2014 acquisitions occurred on January 1,2013 and the 2015 acquisitions occurred on January 1, 2014.The unaudited pro forma net income (loss) and net income (loss) per share amounts above reflect the following adjustments: Years Ended December 31, 2015 2014Decrease in intangible amortization expense$(243) $(11,040)Increase in depreciation expense231 755Exclusion of buyer transaction costs2,774 1,941Exclusion of seller transaction costs46 —Exclusion of pension expense for pension plan acquired212 737Exclusion of segment results for segment not acquired(99) (547)Increase in interest expense(243) (980)Increase (decrease) in income tax expense744 (3,550)Net adjustments$3,422 $(12,684)As the purchase price allocations for Wantage, Heavy, and one of the two 2015 acquisitions that are included in the caption "All Other" in the table captioned"2015 Acquisitions" above are still preliminary and the fair value measurements for the related intangible assets has not been determined, no amortization of theseintangible assets was included in the pro forma results. The unaudited pro forma results do not reflect any operational efficiencies or potential cost savings thatmay occur as a result of consolidation of the operations.Sale of Pennsylvania Precast OperationsOn June 2, 2015, we sold the fixed assets and inventory and assigned all open contracts associated with our one remaining precast concrete operation inPennsylvania, to Architectural Precast Innovations, Inc. for net proceeds of $0.3 million in cash and a $1.2 million promissory note, net of a $0.1 million discount. Note repayments are due quarterly for a term of two years with an effective interest rate of 3.19% . This sale represented the final divestiture of theCompany's owned assets related to precast concrete operations, which were classified as held for sale as of December 31, 2014.3. DISCONTINUED OPERATIONSAs disclosed in Note 2, in June 2015, we completed the sale of substantially all of our assets associated with our one remaining precast concrete operation inPennsylvania. We sold the operation's fixed assets and inventory for net proceeds of $0.3 million in cash and a promissory note of $1.2 million , net of a $0.1million discount, and recorded a pre-tax loss on the transaction of $0.2 million . The pre-tax loss is included in discontinued operations in the accompanyingcondensed consolidated statements of operations.During 2014, we completed the sale of our remaining owned assets related to our California precast operations disposed of in 2012. We sold land and abuilding for net proceeds of $1.5 million in cash and recorded a pre-tax gain on the transaction of $0.6 million . Also in 2014, we recorded an impairment loss onlong-lived assets of $0.9 million related to our Pennsylvania precast concrete operation as the carrying value exceeded the net realizable value of the related long-lived assets. The pre-tax gain on disposal of assets and the loss on impairment of long-lived assets are included in discontinued operations for the year endedDecember 31, 2014 .We have presented the results of operations for these units for all periods as discontinued operations in the accompanying consolidated statements ofoperations.73 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The results of these discontinued operations were as follows (in thousands): Years Ended December 31, 2015 2014 2013Revenue $5,523 $8,920 $16,914Depreciation, depletion and amortization, or DD&A — — (148)Operating expenses, excluding DD&A, and other income (5,830) (9,481) (18,448)Loss from discontinued operations (307) (561) (1,682)(Loss) gain on disposal of assets (193) 640 (219)Loss on impairment of long-lived assets — (900) —Loss from discontinued operations, before income taxes (500) (821) (1,901)Income tax (benefit) expense (180) 172 (45)Loss from discontinued operations $(320) $(993) $(1,856)Cash flows from operating activities included operating cash flows used in discontinued operations of $0.4 million and $1.5 million for the years endedDecember 31, 2015 and 2014, respectively, and $2.3 million of operating cash flows provided by discontinued operations for the year ended December 31, 2013.Cash flows from investing activities included investing cash flows provided by discontinued operations of $0.4 million and $1.5 million , for the years endedDecember 31, 2015 and 2014, respectively, and $2.3 million of investing cash flows used in discontinued operations for the year ended December 31, 2013.Below is a summary of the assets and liabilities associated with our one remaining precast concrete operation sold in June 2015, which was classified as heldfor sale as of December 31, 2014 (in thousands): December 31, 2014Trade accounts receivable, net$1,337Inventories704Other current assets897Property, plant, and equipment, net841Total assets held for sale$3,779 Accounts payable$398Accrued liabilities504Total liabilities held for sale$9024. GOODWILL AND INTANGIBLE ASSETS, NETGoodwillWe completed our annual assessment of goodwill impairment during the fourth quarter of 2015 for those units with goodwill as of October 1, 2015, and therewas no impairment. In the absence of any evidence to the contrary, we consider goodwill resulting from acquisitions in the fourth quarter of 2015 to be recorded atfair value and not impaired, as the arm's length transactions that generated the goodwill were completed at a market rate.74 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The changes in goodwill by reportable segment from January 1, 2014 to December 31, 2015 were as follows (in thousands): Ready-mixedConcrete Segment Aggregate ProductsSegment Other Non-Reportable Segments TotalBalance at January 1, 2014 $11,646 $— $— $11,646Acquisitions (See Note 2) 36,111 — 3,000 39,111Balance at December 31, 2014 47,757 — 3,000 50,757Acquisitions (See Note 2) 46,062 13,984 — 60,046All other purchase price allocation adjustments (See Note 2) (10,861) — 262 (10,599)Balance at December 31, 2015 $82,958 $13,984 $3,262 $100,204 Goodwill acquired during 2015 and 2014 resulted from our acquisitions in those respective years and which are more fully described in Note 2.Intangible AssetsOur purchased intangible assets were as follows (in thousands) as of December 31, 2015 and 2014 : December 31, 2015 Gross AccumulatedAmortization Net Weighted AverageRemaining Life (inyears)Definite-lived intangible assets Trade names $40,302 $(2,060) $38,242 22.04Customer relationships 45,969 (7,939) 38,030 7.34Non-competes 10,167 (2,211) 7,956 3.87Leasehold interests 7,525 (668) 6,857 10.49Favorable contract 3,650 (869) 2,781 2.67Backlog 1,640 (1,230) 410 0.25Total definite-lived intangible assets 109,253 (14,977) 94,276 13.07Indefinite-lived intangible assets Land rights (1) 1,478 — 1,478 Total purchased intangible assets $110,731 $(14,977) $95,754 (1) Land rights acquired in the Custom-Crete acquisition will be reclassified to property, plant and equipment upon the division of certain shared properties andsettlement of the associated deferred payment. For further information, see Note 2. December 31, 2014 Gross AccumulatedAmortization Net Weighted AverageRemaining Life (inyears)Trade names $4,200 $(330) $3,870 9.31Customer relationships 23,540 (3,214) 20,326 8.06Non-competes 4,421 (218) 4,203 4.58Leasehold interest 3,382 (61) 3,321 9.63Total purchased intangible assets $35,543 $(3,823) $31,720 7.91We recorded $11.2 million , $2.1 million and $2.0 million of amortization expense on our intangibles for the years ended December 31, 2015 , 2014 and 2013, respectively, which is included in our consolidated statements of operations.75 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)As of December 31, 2015 , the estimated remaining amortization of our definite-lived intangible assets was as follows (in thousands): Year Ending December 31,2016 $11,9562017 11,3502018 10,9022019 9,4932020 7,857Thereafter 42,718 Total $94,2765. INVENTORIESInventory as of December 31, 2015 and 2014 consisted of the following (in thousands): December 31, 2015 2014Raw materials $33,792 $29,263Building materials for resale 1,736 1,479Other 1,198 980 $36,726 $31,722 6. PROPERTY, PLANT AND EQUIPMENTProperty, plant and equipment, net as of December 31, 2015 and 2014 consisted of the following (in thousands): December 31, 2015 2014Land and mineral deposits $69,265 $47,618Buildings and improvements 17,198 16,648Machinery and equipment 131,209 95,710Mixers, trucks and other vehicles 117,448 80,001Other 227 242Construction in progress 15,255 9,267 350,602 249,486Less: accumulated depreciation and depletion (102,479) (72,962) $248,123 $176,524As of December 31, 2015 and 2014, the net carrying amounts of mineral deposits were $28.1 million and $11.3 million , respectively. As of December 31,2015 and 2014 , gross assets recorded under capital leases, consisting primarily of drum mixer trucks, were $20.5 million and $8.6 million , respectively, andaccumulated amortization was $1.3 million and $0.6 million , respectively. We recorded $32.4 million , $21.8 million and $16.9 million of depreciation anddepletion expense on our property, plant and equipment for the years ended December 31, 2015 , 2014 and 2013 , respectively, which is included in ourconsolidated statements of operations.76 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)7. ALLOWANCE FOR DOUBTFUL ACCOUNTS AND CUSTOMER DISPUTESActivity in our allowance for doubtful accounts receivable and customer disputes consisted of the following (in thousands): December 31, 2015 2014Balance, beginning of period $3,726 $2,813Provision for doubtful accounts and customer disputes 4,198 1,924Uncollectible receivables written off, net of recoveries (1,799) (1,011)Balance, end of period $6,125 $3,7268. ACCRUED LIABILITIESOur accrued liabilities were as follows (in thousands): December 31, 2015 2014Accrued materials $22,428 $14,319Accrued insurance reserves 15,341 10,512Accrued compensation and benefits 15,024 11,251Accrued property, sales and other taxes 9,058 5,235Deferred consideration 4,774 —Contingent consideration, current portion 2,635 2,250Deferred rent 1,838 2,126Accrued interest 1,500 1,487Other 7,398 3,211 $79,996 $50,3919. DEBTA summary of our debt and capital leases as of December 31, 2015 and 2014 was as follows (in thousands): December 31, 2015 2014Senior secured notes due 2018 $200,000 $200,000Senior secured credit facility 45,000 —Convertible secured notes due 2015 — 117Capital leases 16,555 7,395Other financing 20,194 12,925Total debt 281,749 220,437Less: current maturities 9,386 5,104Long-term debt, net of current maturities $272,363 $215,33377 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)As of December 31, 2015, the principal amounts due under our debt agreements for the next five years and thereafter were as follows (in thousands): Year Ending December31,2016 $9,3862017 9,3892018 254,0372019 6,1912020 2,633Thereafter 113 $281,749Senior Secured Notes due 2018On November 22, 2013, we completed an offering of $200.0 million aggregate principal amount of 2018 Notes at an offering price of 100% . We used aportion of the net proceeds from the 2018 Notes to repay all of our outstanding borrowings under the Revolving Facility and to redeem all of our outstanding 9.5%senior secured notes due 2015 (the "2013 Notes").The 2018 Notes are governed by an indenture (the “Indenture”) dated as of November 22, 2013, by and among us and U.S. Bank National Association, astrustee and noteholder collateral agent. We are obligated to pay interest at 8.5% on the 2018 Notes on June 1 and December 1 of each year. The 2018 Notes matureon December 1, 2018, and are redeemable at our option prior to maturity at prices specified in the Indenture. The Indenture contains negative covenants that restrictour ability and our restricted subsidiaries' ability to engage in certain transactions, as described below, and also contains customary events of default.The Indenture contains covenants that restrict or limit our ability to, among other things:•incur additional indebtedness or issue disqualified stock or preferred stock;•pay dividends or make other distributions or repurchase or redeem our stock or subordinated indebtedness or make investments;•prepay, redeem or repurchase certain debt;•sell assets or issue capital stock of our restricted subsidiaries;•incur liens;•enter into agreements restricting our restricted subsidiaries’ ability to pay dividends, make loans to other U.S. Concrete entities or restrict the ability toprovide liens;•enter into transactions with affiliates;•consolidate, merge or sell all or substantially all of our assets;•engage in certain sale / leaseback transactions; and•designate our subsidiaries as unrestricted subsidiaries.As defined in the Indenture, we are entitled to incur indebtedness if, on the date of such incurrence and given effect thereto on a proforma basis, theconsolidated coverage ratio exceeds 2.0 to 1.0.Our obligations under the 2018 Notes are jointly and severally and fully and unconditionally guaranteed on a senior secured basis by each of our existing andfuture domestic subsidiaries that guarantee the indebtedness under the Revolving Facility. Each guarantee is subject to release in the following customarycircumstances:78 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)•a disposition of all or substantially all of the assets of the guarantor subsidiary, by way of merger, consolidation or otherwise; provided the proceeds of thedisposition are applied in accordance with the Indenture;•a disposition of the capital stock of the guarantor subsidiary to a third person, if the disposition complies with the Indenture and as a result the guarantorsubsidiary ceases to be a restricted subsidiary;•the designation by us of the guarantor subsidiary as an unrestricted subsidiary or the guarantor subsidiary otherwise ceases to be a restricted subsidiary, ineach case in accordance with the Indenture; or•legal or covenant defeasance of the 2018 Notes and discharge of our obligations under the Indenture.The 2018 Notes are issued by U.S. Concrete, Inc., the parent company, and are guaranteed on a full and unconditional basis by each of its indirect whollyowned subsidiaries. The guarantees are joint and several, and there are no non-guarantor subsidiaries. U.S. Concrete, Inc. does not have any independent assets oroperations. There are no significant restrictions on the ability of the Company or any guarantor to obtain funds from its subsidiaries by dividend or loan.The 2018 Notes and the guarantees thereof rank equally in right of payment with all of our existing and future senior indebtedness. The 2018 Notes and theguarantees thereof are secured by first-priority liens on certain of the property and assets directly owned by us, including material owned real property, fixtures,intellectual property, capital stock of subsidiaries and certain equipment, subject to permitted liens and certain exceptions, and by a second-priority lien on ourassets securing the Revolving Facility on a first-priority basis, including inventory (including as-extracted collateral), accounts, certain specified mixer trucks,chattel paper, general intangibles (other than collateral securing the 2018 Notes on a first-priority basis), instruments, documents, cash, deposit accounts, securitiesaccounts, commodities accounts, letter of credit rights and all supporting obligations and related books and records and all proceeds and products of the foregoing,subject to permitted liens and certain exceptions. The 2018 Notes and the guarantees thereof are effectively subordinated to all indebtedness and other obligations,including trade payables, of each of our future subsidiaries that are not guarantors.As of both December 31, 2015 and 2014 , we recorded interest expense related to our 2018 Notes of $17.0 million . As of December 31, 2015 and 2014 , wehad unamortized deferred financing fees on our 2018 Notes of $4.1 million and $5.5 million , respectively, which are included in other assets on the consolidatedbalance sheets.Senior Secured Credit FacilityOn October 29, 2013, we entered into a Loan and Security Agreement (the "2013 Loan Agreement") with the Lenders and the Administrative Agent, whichamended and restated our existing credit agreement and provides us with the Revolving Facility. On November 18, 2015, we entered into a Second Amended andRestated Loan and Security Agreement (the “Second A/R Loan Agreement”) which amended and restated the 2013 Loan Agreement. Among other things, theSecond A/R Loan Agreement increased the revolving commitments of the Revolving Facility from $175.0 million to $250.0 million and extended the maturity dateto the earlier of (i) November 18, 2020 or (ii) sixty days prior to the maturity date of the Company’s 8.5% Senior Secured Notes due 2018 (if then outstanding) orthe refinancing of debt thereof, as applicable. The Second A/R Loan Agreement also included an accordion feature that allows for increases in the total revolvingcommitments by as much as $100.0 million . Additionally, the applicable margin for each of the LIBOR loans and base rate loans was lowered so that, dependingon the average availability under the Second A/R Loan Agreement, the applicable margin ranges from 1.25% to 1.75% for LIBOR loans and 0.00% to 0.50% forbase rate loans. As of December 31, 2015 , we had $45.0 million of outstanding borrowings on the Second A/R Loan Agreement. The weighted average interestrate for the Second A/R Loan Agreement was 1.77% as of December 31, 2015 . As of December 31, 2014, we had no outstanding borrowings under the RevolvingFacility. As of both December 31, 2015 and 2014, we had $11.3 million of undrawn standby letters of credit under the Revolving Facility.Our actual maximum credit availability under the Second A/R Loan Agreement varies from time to time and is determined by calculating the value of oureligible accounts receivable, inventory, mixer trucks and, after the occurrence of certain events, machinery, which serve as priority collateral on the facility, minusreserves imposed by the Lenders and other adjustments, all as specified in the Second A/R Loan Agreement and discussed further below. Our availability under theRevolving Facility at December 31, 2015 increased to $131.2 million from $109.8 million at December 31, 2014 . The Second A/R Loan Agreement also containsa provision for discretionary over-advances and involuntary protective advances by Lenders of up to $25.0 million in excess of borrowing base levels. The SecondA/R Loan Agreement provides for swingline loans, up to a $15.0 million sublimit, and letters of credit, up to a $30.0 million sublimit.79 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Advances under the Revolving Facility are in the form of either base rate loans or “LIBOR loans” denominated in U.S. dollars. The interest rate for base rateloans denominated in U.S. dollars fluctuates and is equal to the greater of (a) Bank of America’s prime rate; (b) the Federal funds rate, plus 0.50% ; or (c) the rateper annum for a 30 days interest period equal to the British Bankers Association LIBOR Rate, as published by Reuters at approximately 11:00 a.m. (London time)two business days prior (“LIBOR”), plus 1.0% ; in each case plus the Applicable Margin, as defined in the Second A/R Loan Agreement. The interest rate forLIBOR loans denominated in U.S. dollars is equal to the rate per annum for the applicable interest period equal to LIBOR, plus the Applicable Margin, as definedin the Second A/R Loan Agreement. Issued and outstanding letters of credit are subject to a fee equal to the Applicable Margin, as defined in the Second A/R LoanAgreement, a fronting fee equal to 0.125% per annum on the stated amount of such letter of credit, and customary charges associated with the issuance andadministration of letters of credit. Among other fees, we pay a commitment fee of either 0.25% or 0.375% per annum (due monthly) on the aggregate unusedrevolving commitments under the Revolving Facility. The fee we pay is determined by whether the amount of the unused line is above or below 50% of theaggregate Revolver Commitments, as defined in the Second A/R Loan Agreement. The Applicable Margin ranges from 0.00% to 0.50% for base rate loans andfrom 1.25% to 1.75% for LIBOR loans, and is determined based on Average Availability for the most recent fiscal quarter, as defined in the Second A/R LoanAgreement.Up to $30.0 million of the Revolving Facility is available for the issuance of letters of credit, and any such issuance of letters of credit will reduce the amountavailable for loans under the Revolving Facility. Advances under the Revolving Facility are limited by a borrowing base which is equal to the least of (a) theaggregate amount of Revolver Commitments minus the LC Reserve, the Senior Notes Availability Reserve, and the Tax Amount, all as defined in the Second A/RLoan Agreement, (b) the sum of (i) 90% of the face amount of eligible accounts receivable (reduced to 85% under certain circumstances), plus (ii) the lesser of (i)70% of the value of eligible inventory or (y) 90% of the product of (A) the net orderly liquidation value of inventory divided by the value of the inventory and (B)multiplied by the value of eligible inventory, and (iii) the sum of (x) (A) 85% of the net orderly liquidation value (as determined by the most recent appraisal) ofeligible trucks and machinery plus (B) 80% of the cost of newly acquired eligible trucks since the date of the latest appraisal of eligible trucks minus (C) 85% ofthe net orderly liquidation value of eligible trucks and machinery that have been sold since the latest appraisal date and 85% of the depreciation amount applicableto eligible trucks and machinery since the date of the latest appraisal of eligible trucks and machinery, plus (y) (A) 85% of the net orderly liquidation value ofeligible inventory (as determined by the most recent appraisal), minus (B) 85% of the net orderly liquidation value of eligible machinery that have been sold sincethe date of the latest appraisal of eligible machinery, minus (C) 85% of the depreciation amount applicable to eligible machinery, minus the Availability Reserve,minus the Tax Amount; provided, notwithstanding anything herein to the contrary, in determining the Borrowing Base pursuant to this clause (b), the value ofmachinery shall only be included after a refinancing of, or amendment to, the 2018 Notes such that the Revolving Facility will have a first lien on machinery, andthe Borrowing Base attributable to the eligible truck and eligible machinery shall not exceed the amount equal to thirty percent ( 30% ) of the Borrowing Base as ofsuch date of determination; or (c) the amount of a borrowing base set forth in the 2018 Notes, minus the greater of (i) $10.0 million and (ii) the amount equal to 5%of such borrowing base set forth in the 2018 Notes; provided however, in any event, clause (c) of the definition of borrowing base shall be permanently terminatedif the 2018 Senior Notes have been amended or refinanced, in each case with the effect that the ABL cap amount in the applicable intercreditor agreement and/orthe documentation governing such refinancing debt shall be no less than 110% of the aggregate Revolver Commitments (terms used in the foregoing description ofborrowing base shall have the definitions provided in the Second A/R Loan Agreement). The administrative agent may, in its permitted discretion, reduce theadvance rates set forth above, adjust reserves or reduce one or more of the other elements used in computing the borrowing base.The Second A/R Loan Agreement contains usual and customary negative covenants including, but not limited to, restrictions on our ability to consolidate ormerge; substantially change the nature of our business; sell, lease or otherwise transfer any of our assets; create or incur indebtedness; create liens; pay dividends;and make investments or acquisitions. The negative covenants are subject to certain exceptions as specified in the Second A/R Loan Agreement. The Second A/RLoan Agreement also requires that we, upon the occurrence of certain events, maintain a fixed charge coverage ratio of at least 1.0 to 1.0 for each period of 12calendar months, as determined in accordance with the Second A/R Loan Agreement. For the trailing 12 month period ended December 31, 2015 , our fixed chargecoverage ratio was 3.58 to 1.0. As of December 31, 2015 , we were in compliance with all covenants under the Second A/R Loan Agreement.The Second A/R Loan Agreement also includes customary events of default, including, among other things, payment default, covenant default, breach ofrepresentation or warranty, bankruptcy, cross-default, material ERISA events, change of control, material money judgments and failure to maintain subsidiaryguarantees.80 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The Second A/R Loan Agreement is secured by a first-priority lien on certain assets of the Company and our guarantors, including inventory (including as-extracted collateral), accounts receivable, certain specified mixer trucks, general intangibles (other than collateral securing the 2018 Notes on a first-priority basis,as described above), instruments, documents, chattel paper, cash, deposit accounts, securities accounts, commodities accounts, letter of credit rights and allsupporting obligations and related books and records and all proceeds and products of the foregoing, subject to permitted liens and certain exceptions. The SecondA/R Loan Agreement is also secured by a second-priority lien on the collateral securing the 2018 Notes as defined below on a first-priority basis (see “SeniorSecured Notes due 2018” above).For the years ended December 31, 2015 and 2014 , we recorded interest expense related to the Revolving Facility of $0.4 million and $0.3 million ,respectively. As of December 31, 2015 and 2014 , we had unamortized deferred financing fees on our Revolving Facility of $2.0 million and $1.3 million ,respectively, which are included in other assets on the consolidated balance sheets.Senior Secured Notes due 2015On March 22, 2013, we completed our offer to exchange (the “Exchange Offer”) up to $69.3 million aggregate principal amount of newly issued 2013 Notesfor all $55.0 million aggregate principal amount of our Convertible Notes. At the time of settlement, we issued $61.1 million aggregate principal amount of 2013Notes in exchange for $48.5 million of Convertible Notes, plus approximately $0.3 million in cash for accrued and unpaid interest on the Convertible Notesexchanged in the Exchange Offer. After giving effect to the exchange, $6.5 million aggregate principal amount of Convertible Notes remained outstanding as ofMarch 22, 2013 (see additional information under "Convertible Notes due 2015" below).In November 2013, we used a portion of the proceeds from our 2018 Notes offering to redeem all $61.1 million of our outstanding 2013 Notes. See Note 10for additional information regarding the extinguishment of this debt.Convertible Notes due 2015As described above, on August 31, 2010, we issued $55.0 million aggregate principal amount of Convertible Notes. During 2013, we exchanged $48.5 millionof Convertible Notes for $61.1 million aggregate principal amount of 2013 Notes and $6.4 million of Convertible Notes for 0.6 million shares of common stock.The remaining Convertible Notes matured and were repaid on August 31, 2015.For the year ended December 31, 2013 , we recorded interest expense related to the interest rate and amortization of the discount on our Convertible Notes of$2.1 million . We recorded no interest expense for the Convertible Notes for the years ended December 31, 2015 and 2014.Capital Leases and Other FinancingFrom 2013 through 2015, we signed a series of promissory notes with Daimler Truck Financial for the purchase of mixer trucks and other machinery andequipment in an aggregate principal amount of $25.3 million , with fixed annual interest rates ranging from 2.50% to 3.18% , payable monthly for a term of fiveyears.From 2013 through 2015, we entered into leasing agreements with various lenders for the purchase of mixer trucks and other machinery and equipment for atotal commitment of $20.2 million , with fixed annual interest rates ranging from 2.60% to 4.80% , payable monthly for terms ranging from four to five years. Thelease terms include one dollar buyout options at the end of the lease terms. Accordingly, these financings have been classified as capital leases.The current portion of capital leases included in current maturities of long term debt was $4.0 million and $1.6 million as of December 31, 2015 and 2014,respectively. As of December 31, 2015 , we had four promissory notes outstanding that were issued primarily in connection with acquisitions completed between February2014 and August 2014 in an aggregate principal amount of $1.4 million . These promissory notes are payable either monthly or annually over less than one year tonine years, with annual effective interest rates ranging from 3.49% to 3.75% .81 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The weighted average interest rate of our capital leases and other financing was 3.07% as of December 31, 2015 and was 3.49% as of December 31, 2014 .10. EXTINGUISHMENT OF DEBTAs described in Note 9 above, concurrent with issuing the 2018 Notes in November 2013, we redeemed $61.1 million of our 2013 Notes issued in connectionwith the Exchange Offer. As such, during the fourth quarter of 2013, we wrote-off $1.6 million of previously deferred financing costs associated with the 2013Notes and recorded the charge as loss on extinguishment of debt on the accompanying consolidated statements of operations.In 2013, holders of our Convertible Notes tendered $6.4 million of Convertible Notes in exchange for 0.6 million shares of our common stock. As a result ofthis Conversion Event (as defined in the indenture governing the Convertible Notes) during the third quarter of 2013, we wrote-off $0.3 million of previouslydeferred financing costs, $3.7 million of derivative liabilities, and $0.8 million of unamortized discount. We recorded a loss on extinguishment of debt of $1.7million , which is included on the accompanying consolidated statements of operations.In March 2013, in connection with the Exchange Offer, described in Note 9 above, we exchanged $48.5 million of Convertible Notes for $61.1 million of2013 Notes. As a result of the Exchange Offer, during the first quarter of 2013, we wrote-off $2.4 million of previously deferred financing costs, $26.6 million inderivative liabilities, and $7.3 million of unamortized discount. We recorded a gain on extinguishment of debt associated with this transaction of $4.3 million onthe accompanying consolidated statements of operations.In connection with issuing the 2018 Notes and entering into the Second A/R Loan Agreement, we incurred $8.4 million of deferred financing costs. Deferredfinancing costs are classified as other assets on the accompanying consolidated balance sheet. These deferred financing costs are being amortized over the terms ofthe related agreements using the straight line method, which approximates the effective interest method.11. DERIVATIVESGeneralWe are exposed to certain risks relating to our ongoing business operations. However, derivative instruments are not used to hedge these risks. In accordancewith ASC 815 - Derivatives and Hedging ("ASC 815"), we are required to account for derivative instruments as a result of the issuance of the Warrants andConvertible Notes on August 31, 2010. None of our derivative contracts manage business risk or are executed for speculative purposes.The following table presents the fair value of our derivative instruments (in thousands) as of December 31, 2015 and 2014 : Fair Value December 31,Derivative Instruments Not Designated as Hedging Instruments under ASC 815 Balance Sheet Location 2015 2014Warrants Derivative liabilities $67,401 $25,24682 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The following table presents the effect of derivative instruments (in thousands) on the accompanying consolidated statements of operations for the years endedDecember 31, 2015 , 2014 , and 2013 , excluding income tax effects: Years Ended December 31,Derivative Instruments NotDesignated as Hedging Instruments under ASC 815 Location of Loss Recognized 2015 2014 2013Warrants Derivative loss $(60,016) $(3,556) $(16,833)Convertible Note embedded derivative(1) Derivative loss — — (13,131) $(60,016) $(3,556) $(29,964) (1) Our Convertible Notes embedded derivative was written-off in June 2013, as the remaining noteholders no longer had conversion rights after that date. Warrant volume positions are presented as the number of shares underlying the instruments. The table below presents our volume positions (in thousands) asof December 31, 2015 , 2014 , and 2013 : Number of Shares December 31,Derivative Instruments Not Designated as Hedging Instruments underASC 815 2015 2014 2013Warrants 2,361 2,999 3,000We do not have any derivative instruments with credit features requiring the posting of collateral in the event of a credit downgrade or similar credit event.12. OTHER LONG-TERM OBLIGATIONS AND DEFERRED CREDITSOther long-term obligations and deferred credits are comprised primarily of contingent consideration obligations entered into with the former owners ofacquired companies from 2012 through 2015 with terms ranging from two to six years. Our contingent consideration obligations are tied to varying thresholds ofpre-determined sales volumes, WTI prices for the applicable year, and EBITDA and are recorded at their fair value (see Note 13). As of December 31, 2015 and2014 , our long-term contingent consideration obligations were $27.5 million and $3.0 million , respectively, and reflect the portion we expect to pay beyond oneyear of the balance sheet date. We expect our obligations to cease during 2021.Our long-term deferred payment arrangements with the former owners of acquired companies range in terms from one to ten years. As of December 31, 2015 ,our long-term deferred payment obligation was $5.3 million , and reflects the portion we expect to pay beyond one year of the balance sheet date. We expect ourobligations to cease during 2025. There were no long-term deferred payment arrangements as of December 31, 2014.The remaining other long-term obligations and deferred credits balances consist primarily of our unrecognized tax benefits and related accrued interest andpenalties (see Note 16).13. FAIR VALUE DISCLOSURESFair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction betweenmarket participants as of the measurement date. Accounting guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use ofobservable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputsmarket participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of us. Unobservableinputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levelsof inputs that may be used to measure fair value:Level 1—Quoted prices in active markets for identical assets or liabilities.83 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices inmarkets 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 orliabilities.Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. We review the fairvalue hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain assets andliabilities within the fair value hierarchy.The following tables present our fair value hierarchy for liabilities measured at fair value on a recurring basis as of December 31, 2015 and 2014 (inthousands): As of December 31, 2015 Total Level 1 Level 2 Level 3Derivative – Warrants $67,401 $— $67,401 $—Contingent consideration, including current portion (1) (2) (3) (4) (5) (6) 30,119 — — 30,119 $97,520 $— $67,401 $30,119 As of December 31, 2014 Total Level 1 Level 2 Level 3Derivative – Warrants $25,246 $— $— $25,246Contingent consideration (1) (2) 5,344 — — 5,344 $30,590 $— $— $30,590(1)The current portion of contingent consideration is included in accrued liabilities in our consolidated balance sheets. The long-term portion of contingentconsideration is included in other long-term obligations and deferred credits in our consolidated balance sheets.(2)Includes the fair value of the earn-out payments associated with the 2012 acquisition of Bode Gravel Co. and Bode Concrete LLC. The fair value wasdetermined based on expected payouts that will be due to the former owners based on the achievement of certain incremental sales volume milestones, using acontractual discount rate of 7.0% . These payments were capped at a fair value of $3.5 million as of December 31, 2015 and $5.3 million as of December 31,2014 .(3)Includes the fair value of the Mobile-Crete Earn-out (see Note 2). The fair value was determined based on expected payouts that will be due to the formerowners based on probability-weighted assumptions related to average annual WTI prices reaching certain predetermined levels from December 8, 2015through December 7, 2016, using a discount rate of 3.50% . The fair value of the Mobile-Crete Earn-out was less than $0.1 million as of December 31, 2015 .(4)Includes the fair value of the Right Away Earn-out (see Note 2). The fair value was determined based on expected payouts that will be due to the formerowners based on probability-weighted assumptions related to the achievement of sales volume milestones, using a discount rate of 8.50% . The fair value ofthe Right Away Earn-out was $4.7 million as of December 31, 2015 .(5)Includes the fair value of the Ferrara Bros. Contingent Consideration (see Note 2). The fair value was determined based on the expected vesting of incentiveawards granted to the former owners at acquisition based on probability-weighted assumptions related to the achievement of certain EBITDA thresholds, usinga discount rate of 10.53% . The fair value of the Ferrara Bros. Contingent Consideration was $21.2 million as of December 31, 2015 .(6)Includes the fair value of the DuBrook Earn-out (see Note 2). The fair value was determined based on the expected payouts that will be due to the formerowners based on probability-weighted assumptions related to the achievement of sales volume milestones, using a discount rate of 15.75% . The fair value ofthe DuBrook Earn-out was $0.7 million as of December 31, 2015 .The liability for the Warrants was valued utilizing a Black-Scholes-Merton model. Inputs into the model were based upon observable market data wherepossible. The key inputs in determining our derivative liabilities include our stock price, stock price84 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)volatility, and risk-free interest rates. As of December 31, 2015 , observable market data existed for all of the key inputs in determining the fair value of ourWarrants.A reconciliation of the changes in Level 3 fair value measurements is as follows for December 31, 2015 and 2014 (in thousands): Warrants ContingentConsiderationBalance at January 1, 2014 $21,690 $7,000Total losses included in earnings (1) 3,560 —Payment on contingent consideration — (1,656)Write-off of derivative on exercised Warrants (2) (4) —Balance at December 31, 2014 25,246 5,344Acquisitions (3) — 25,707Total losses included in earnings (1) 19,551 932Payment on contingent consideration — (1,864)Write-off of derivative on exercised Warrants (2) (4) —Issuances of equity, net of cash proceeds (4) (56) —Transfer out (5) (44,737) —Balance at December 31, 2015 $— $30,119(1)Represents the loss on revaluation of Warrants from January 1, 2014 through June 30, 2015, which is included in derivative loss in our consolidated statementsof operations, and the net gain on revaluation of contingent consideration, which is included in gain on revaluation of contingent consideration in ourconsolidated statements of operations. We recorded a net loss on revaluation of contingent consideration of $0.9 million in the year ended December 31, 2015, as result of the estimate of future WTI prices offset by accretion of interest for the passage of time as well as changes in the probability-weightedassumptions related to the achievement of sales volumes and certain EBITDA thresholds. No gain or loss on revaluation of contingent consideration wasrecognized in the year ended December 31, 2014 .(2)Represents the pro rata portion of the derivative liability associated with exercised Warrants from January 1, 2014 through June 30, 2015 and measured at thedate of share issuance, which is included in derivative loss in our consolidated statements of operations.(3)The liabilities for earn-outs and contingent considerations for acquisitions from 2014 and 2015 were valued using Monte Carlo simulations which incorporatedprobability-weighted assumptions related to the achievement of varying thresholds of pre-determined sales volumes, WTI prices for the applicable year, andEBITDA. Inputs into the models were based upon observable market data where possible. Where observable market data did not exist, we modeled inputsbased upon similar observable inputs. The key inputs included discount rates ranging from 3.50% to 15.75% , a forecasted average of WTI prices fromDecember 8, 2014 through December 7, 2016 from quoted sources, and management's estimates of future sales volumes and EBITDA.(4)Represents the pro rata portion of the derivative liability associated with exercised Warrants from January 1, 2014 through June 30, 2015 and measured at thedate of share issuance, which is included in additional paid-in capital in our condensed consolidated balance sheets.(5)Transfer out of Level 3 financial liabilities was due to changes in the observability of market inputs used in the valuation of our Warrants. The transfer wasmeasured as of June 30, 2015, the end of the period in which the transfer occurred.85 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)14. STOCKHOLDERS’ EQUITYCommon Stock and Preferred StockThe following table presents information regarding U.S. Concrete’s common stock (in thousands): December 31, 2015 2014Shares authorized 100,000 100,000Shares outstanding at end of period 14,871 13,978Shares held in treasury 842 697Under our restated certificate of incorporation, we are authorized to issue 100.0 million shares of common stock, par value $0.001 , and 10.0 million shares ofpreferred stock, $0.001 par value. Additionally, we are authorized to issue “blank check” preferred stock, which may be issued from time to time in one or moreseries upon authorization by our Board. The Board, without further approval of the stockholders, is authorized to fix the dividend rights and terms, conversionrights, voting rights, redemption rights and terms, liquidation preferences, and any other rights, preferences and restrictions applicable to each series of thepreferred stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes could, amongother things, adversely affect the voting power of the holders of our common stock and, under certain circumstances, make it more difficult for a third party to gaincontrol of us, discourage bids for our common stock at a premium or otherwise affect the market price of our common stock. There was no preferred stock issuedor outstanding as of December 31, 2015 and 2014 .Common Stock IssuanceDuring the second quarter of 2015, we issued approximately 442,000 shares of common stock with a total value of $15.1 million as part of the considerationfor the Ferrara Bros. acquisition (see Note 2).Share Repurchase ProgramIn May 2014, our Board authorized a program to repurchase up to $50.0 million of our outstanding common stock (the "Share Repurchase Program") until theearlier of March 31, 2017, or a determination by the Board to discontinue the repurchase program. We made no repurchases of our common stock during the yearended December 31, 2015 under the Share Repurchase Program. We made a related party share repurchase of our common stock during the second quarter of 2014as discussed below.Related Party Share RepurchaseDuring the second quarter of 2014, as part of the Share Repurchase Program, we paid $4.8 million in cash to Whippoorwill Associates, Inc. ("Whippoorwill")pursuant to a privately negotiated agreement to repurchase 200,000 shares of our common stock. We repurchased the shares for $24.12 per share, which was theclosing price of our common stock on the NASDAQ stock market on the trading day prior to the repurchase. As of May 19, 2014, and prior to the transaction,Whippoorwill owned approximately 3.0 million shares, or approximately 21% , of our outstanding common stock and, as such, the transaction was considered arelated party repurchase. In addition, we paid $0.1 million in legal fees associated with the Whippoorwill share repurchase. There were no related party sharerepurchases during the year ended December 31, 2015 .Treasury StockEmployees may elect to satisfy their tax obligations on the vesting of their restricted stock by having the required tax payments withheld based on a number ofvested shares having an aggregate value on the date of vesting equal to the tax obligation. As a result of such employee elections, we withheld approximately145,000 shares during the year ended December 31, 2015 , at a total value of approximately $6.3 million , and approximately 83,000 shares during the year endedDecember 31, 2014 , at a total value of approximately $2.1 million . We accounted for the withholding of these shares as treasury stock.86 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)15. WARRANTSOn August 31, 2010 (the "Effective Date"), we issued warrants to acquire common stock in two tranches: Class A Warrants to purchase an aggregate ofapproximately 1.5 million shares of common stock, and Class B Warrants to purchase an aggregate of approximately 1.5 million shares of common stock(collectively, the "Warrants"). The Warrants were issued to holders of our predecessor common stock pro rata based on a holder’s stock ownership as of theEffective Date. The Warrants have been included in derivative liabilities on the consolidated balance sheets (see Note 11) and are recorded at their fair value (seeNote 13). The Warrants are also included in the potentially dilutive securities included in the calculation of diluted earnings (loss) per share as shares of ourcommon stock would be issued if the Warrants were exercised (see Note 18). The Warrants are classified as a current liability on the consolidated balance sheets asthey can be exercised by the holders at any time. As of December 31, 2015 , there were 1.1 million of Class A Warrants and 1.3 million of Class B Warrantsoutstanding. In connection with the issuance of the Class A Warrants, we entered into a Class A Warrant Agreement with American Stock Transfer & Trust Company,LLC, as warrant agent ("AST"). Subject to the terms of the Class A Warrant Agreement, each holder of a Class A Warrant is entitled to purchase one share ofcommon stock at an exercise price of $22.69 per share. In connection with the issuance of the Class B Warrants, the Company entered into a Class B WarrantAgreement (collectively with the Class A Warrant Agreement, the "Warrant Agreements") with AST. Subject to the terms of the Class B Warrant Agreement,each holder of a Class B Warrant is entitled to purchase one share of common stock at an exercise price of $26.68 per share. Subject to the terms of the WarrantAgreements, both classes of Warrants have a seven year term and will expire on the seventh anniversary of the Effective Date. The Warrants may be exercised forcash or on a net issuance basis. If, at any time before the expiration date of the Warrants, we pay or declare a dividend or make a distribution on the common stock payable in shares of ourcapital stock, or make subdivisions or combinations of our outstanding shares of common stock into a greater or lesser number of shares or issue any shares of ourcapital stock by reclassification of common stock, then the exercise price and number of shares issuable upon exercise of the Warrants will be adjusted so that theholders of the Warrants will be entitled to receive the aggregate number and kind of shares that they would have received as a result of the event if their Warrantshad been exercised immediately before the event. In addition, if we distribute to holders of the common stock an Extraordinary Distribution (defined in eachWarrant Agreement to include assets, securities or warrants to purchase securities), then the exercise price of the Warrants will be decreased by the amount of cashand / or the fair market value of any securities or assets paid or distributed on each share of common stock. However, no adjustment to the exercise price will bemade if, at the time of an Extraordinary Distribution, we make the same distribution to holders of Warrants as we make to holders of common stock pro rata basedon the number of shares of common stock for which the Warrants are exercisable.In the event of a Fundamental Change (defined in each Warrant Agreement to include transactions such as mergers, consolidations, sales of assets, tenderoffers, exchange offers, reorganizations, reclassifications, compulsory share exchanges or liquidations in which all or substantially all of the outstanding commonstock is converted into or exchanged for stock, other securities, cash or assets), if the consideration paid consists 90% or more of publicly traded securities, eachholder of a Warrant will have the right upon any subsequent exercise to receive the kind and amount of stock, other securities, cash and assets that such holderwould have received if the Warrant had been exercised immediately prior to such Fundamental Change. If a Fundamental Change occurs (other than aFundamental Change in which the consideration paid consists at least 90% of publicly traded securities), then each holder of a Warrant will be entitled to receivean amount equal to the Fair Market Value (as defined in each of the Warrant Agreements) of their Warrant on the date the Fundamental Change is consummated. No adjustment in the exercise price of the Warrants shall be required unless such adjustment would require an increase or decrease of at least $0.05 in theexercise price; provided that any adjustments that are not required to be made shall be carried forward and taken into account in any subsequent adjustment. 16. INCOME TAXESOur consolidated federal and state income tax returns include the results of operations of acquired businesses from their dates of acquisition.87 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)A reconciliation of our effective income tax rate to the amounts calculated by applying the federal statutory corporate tax rate of 35% is as follows (inthousands): Years Ended December 31, 2015 2014 2013Tax (benefit) expense at statutory rate $(1,510) 35.0 % $8,306 35.0 % $(5,987) 35.0 %Add (deduct): Rates different than statutory (165) 3.8 — — — —State income taxes (4,282) 99.2 2,797 11.8 1,037 (6.1)Nondeductible items 1,025 (23.7) 1,304 5.5 970 (5.7)Valuation allowance (29,519) 684.1 (9,752) (41.1) 495 (2.9)Unrecognized tax benefit 390 (9.0) 369 1.5 (3,732) 21.8Derivatives and note discount — — (911) (3.8) 8,369 (48.9)Capital loss carryforward expiration 3,485 (80.8) — — — —Depletion (47) 1.1 — — — —Other 488 (11.3) 43 0.2 16 0.0Income tax (benefit) expense from continuingoperations $(30,135) 698.4 % $2,156 9.1 % $1,168 (6.8)%The amounts of our consolidated federal and state income tax (benefit) expense from continuing operations were as follows (in thousands): Years Ended December 31, 2015 2014 2013Current: Federal $5,493 $487 $130State 1,843 1,674 1,144Foreign (43) — — 7,293 2,161 1,274Deferred: Federal $(29,712) $(5) $—State (7,779) — (106)Foreign 63 — — (37,428) (5) (106)Income tax (benefit) expense from continuing operations $(30,135) $2,156 $1,168Income tax (benefit) expense was allocated between continuing operations and discontinued operations as follows: Years Ended December 31, 2015 2014 2013Continuing operations$(30,135) $2,156 $1,168Discontinued operations(180) 172 (45)Income tax (benefit) expense$(30,315) $2,328 $1,12388 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Deferred income tax provisions result from temporary differences in the recognition of expenses for financial reporting purposes and for tax reportingpurposes. We present the effects of those differences as deferred income tax liabilities and assets, as follows (in thousands): December 31, 2015 2014Deferred tax assets: Derivatives $24,849 $8,463Goodwill and other intangibles 4,165 6,747Receivables 1,705 988Inventory 4,114 4,264Accrued insurance 5,170 4,021Depletion 366 490Deferred revenue 358 332Stock compensation 769 986Charitable contribution carryover — 166Other accrued expenses 7,465 5,224Capital loss carryforward expiration — 3,736Net operating loss carryforwards 5,699 10,039Other 2,024 1,507Total gross deferred tax assets 56,684 46,963Valuation allowance (4,131) (34,937)Net deferred tax assets 52,553 12,026Deferred income tax liabilities: Property, plant and equipment, net 21,678 16,566Total gross deferred tax liabilities 21,678 16,566Net deferred tax asset (liability) $30,875 $(4,540) The allocation of deferred taxes between current and long-term as of December 31, 2015 and 2014 was as follows (in thousands): December 31, 2015 2014Current deferred tax asset, net $— $1,887Long-term deferred tax asset, net 30,875 —Long-term deferred tax liability, net — 6,427Net deferred tax asset (liability) $30,875 $(4,540)In accordance with U.S. GAAP, the recognized value of deferred tax assets must be reduced to the amount that is more likely than not to be realized in futureperiods. The ultimate realization of the benefit of deferred tax assets from deductible temporary differences or tax carryovers depends on the generation ofsufficient taxable income during the periods in which those temporary differences become deductible. We considered the scheduled reversal of deferred taxliabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on these considerations, we relied upon the reversal ofcertain deferred tax liabilities to realize a portion of our deferred tax assets and established valuation allowances as of December 31, 2015 and 2014 in the amountof $4.1 million and $34.9 million , respectively, for other deferred tax assets because of uncertainty regarding their ultimate realization. Our total net deferred taxasset as of December 31, 2015 was $30.9 million and our total net deferred tax liability as of December 31, 2014 was $4.5 million , respectively.As of each reporting date, management considers all new evidence, both positive and negative, that could impact management's view with regard to futurerealization of deferred tax assets. As of December 31, 2015 , we achieved a history of positive pre-tax89 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)income and anticipate significant additional future pre-tax income to be generated, in part from our recently acquired businesses, which will result in higher U.S.Federal taxable income. For these reasons, management determined that sufficient positive evidence existed as of December 31, 2015 to conclude that it is morelikely than not that additional deferred taxes of $29.5 million are realizable, and therefore, reversed a majority of the valuation allowance accordingly.Under U.S. tax law, we have elected to treat our U.S. Virgin Island subsidiaries as controlled foreign corporations. As such, we consider the undistributedearnings of our U.S. Virgin Island subsidiaries as of December 31, 2015 to be indefinitely reinvested and, accordingly, no U.S. income taxes have been providedthereon. As of December 31, 2015 , the amount of cash associated with indefinitely reinvested foreign earnings was approximately $0.1 million . We have not, nordo we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidityneeds associated with our domestic debt service requirements.We reorganized pursuant to Chapter 11 of the bankruptcy code under the terms of our plan of reorganization (the "Plan"), with an effective date of August 31,2010. Under our Plan, our previously outstanding 8.375% Senior Subordinated Notes due 2014 were cancelled, giving rise to cancellation of indebtedness income("CODI"). The Internal Revenue Code ("IRC"), provides that CODI arising under a plan of bankruptcy reorganization is excludable from taxable income, but thedebtor must reduce certain of its tax attributes by the amount of CODI realized under the Plan. Based on the estimate of CODI and required tax attribute reduction,the effects of the Plan did not cause a significant change in our recorded net deferred tax liability. Our required reduction in tax attributes, or deferred tax assets,was accompanied by a corresponding release of valuation allowance in prior years.We underwent a change in ownership for purposes of Section 382 of the IRC as a result of our Plan and emergence from Chapter 11 on August 31, 2010. As aresult, the amount of our pre-change net operating losses ("NOL's"), and other tax attributes that are available to offset future taxable income are subject to anannual limitation. The annual limitation is based on the value of the corporation as of the effective date of the Plan. As of December 31, 2015 , approximately $5.6million of our federal NOL's are subject to annual Section 382 limitations. The ownership change and the resulting annual limitation on use of NOL's are notexpected to result in the expiration of our NOL carryforwards if we are able to generate sufficient future taxable income within the carryforwardperiods. However, the limitation on the amount of NOL's available to offset taxable income in a specific year may result in the payment of income taxes before allNOL's have been utilized.At December 31, 2015 , we had unrecognized tax benefits of $4.1 million which, if recognized, would impact the effective tax rate. It is unlikely a reduction ofunrecognized tax benefits will occur within the next 12 months. The unrecognized tax benefits are included as a component of other long-term obligations. Duringthe years ended December 31, 2015 , 2014 and 2013, we recorded interest and penalties related to unrecognized tax benefits of $0.1 million , less than $0.1 millionand $0.1 million , respectively, which are included in income tax (benefit) expense in our consolidated statement of operations. Total accrued penalties and interestat December 31, 2015 and 2014 was approximately $0.3 million and $0.2 million , respectively.A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Years Ended December 31, 2015 2014 2013Unrecognized tax benefits at January 1 $3,636 $3,489 $6,598Additions for tax positions related to current year 464 475 311Additions for tax positions related to prior years — 100 393Reductions due to lapse of statute of limitations — (63) (3,813)Settlements — (365) —Unrecognized tax benefits at December 31 $4,100 $3,636 $3,489 We recognize interest and penalties related to uncertain tax positions in income tax expense.We conduct business domestically and, as a result, U.S. Concrete, Inc. or one or more of our subsidiaries file income tax returns in the U.S. federal jurisdictionand various state and local jurisdictions. In the normal course of business, we are subject to examination in the U.S. federal jurisdiction, and generally in statejurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local tax examinations for years before 2012.90 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)17. STOCK-BASED COMPENSATIONManagement Equity Incentive PlanAs of December 31, 2015, there were 0.9 million shares remaining for future issuance under the Long Term Incentive Plan (the "LTI Plan"). The LTI Planenables us to grant stock options, stock appreciation rights, restricted stock awards, restricted stock units, cash awards and performance awards to management,employees, and directors of the Company.Stock-Based CompensationUnder authoritative accounting guidance, share-based compensation cost is measured at the grant date based on the calculated fair value of the award. Theexpense is recognized on a straight-line basis over the employee’s requisite service period, generally the vesting period of the award or, for performance-basedawards, over the derived service period. We have elected to use the long-form method of determining our pool of windfall tax benefits as prescribed underauthoritative accounting guidance.For the years ended December 31, 2015 , 2014 , and 2013 , we recognized stock-based compensation expense related to restricted stock, restricted stock unitsand stock options of $5.8 million , $3.7 million , and $5.4 million , respectively, with a net tax-effected excess tax benefit recognized in 2015 in the amount of $5.0million . There was no related excess tax benefit recognized in 2014 or 2013. Stock-based compensation expense is reflected in selling, general and administrativeexpenses in our consolidated statements of operations.As of December 31, 2015 , there was approximately $5.0 million of unrecognized compensation cost related to restricted stock units and restricted stockawards, net of estimated forfeitures. As of December 31, 2015, we expect to recognize the related compensation cost over a weighted-average period ofapproximately 1.0 year .Restricted Stock UnitsRestricted stock units generally vest over a one to three year period on a quarterly basis. The restricted stock units are subject to restrictions on transfer andcertain conditions to vesting. During the restriction period, the holders of restricted stock units are not entitled to vote and receive dividends on those restrictedunits as the restricted stock units do not represent outstanding shares of our common stock.Restricted stock unit activity for the year ended December 31, 2015 was as follows (shares in thousands): Number of UnitsWeighted- Average Grant Date Fair ValueUnvested restricted stock units outstanding at beginning of period22$25.57Granted1650.11Vested(22)25.57Forfeited——Unvested restricted stock units outstanding at end of period16$50.11During 2015 , 2014 , and 2013 , the weighted-average grant date fair value of restricted stock units granted was $50.11 , $25.57 and $16.89 , respectively. Thefair value of our restricted stock units was determined based upon the price of our common stock on the date of grant.During 2015 , 2014 , and 2013 , the total fair value of restricted stock units vested was $0.6 million , $0.6 million and $1.4 million , respectively.Compensation expense associated with awards of restricted stock units was $0.6 million , $0.6 million and $2.7 million for the years ended December 31,2015 , 2014 , and 2013 , respectively. For restricted stock units that were granted prior to May 2013, there was an equivalent number of incentive restricted stockunits, "IRSU's," issued. These IRSU's represented the right to receive91 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)0.35020 of a share of common stock upon satisfaction of certain criteria. Compensation costs for 2013 associated with our restricted stock units included $1.2million for achievement of the performance goal associated with delivery of a conversion event notice related to our Convertible Notes, which occurred on June 18,2013, triggering the conversion of certain previously vested IRSU's into approximately 69,000 common shares. No compensation expense had previously beenrecognized for these grants, as achievement of the performance goal was not considered probable.Restricted Stock AwardsRestricted stock awards are subject to restrictions on transfer and certain conditions to vesting. The restricted stock awards issued to date consist of a 60%time-vested component and a 40% stock performance hurdle component. The time-vested component vests annually over a two or three year period. The stockperformance hurdle component triggers vesting upon our stock price reaching certain thresholds. During the restriction period, the holders of restricted stock areentitled to vote and receive dividends, thus these awards are included in our outstanding shares of common stock.Restricted stock award activity for the year ended December 31, 2015 was as follows (shares in thousands): Number of Shares Weighted- Average Grant Date Fair ValueUnvested restricted stock awards outstanding at beginning of period 434 $13.30Granted 219 30.50Vested (418) 14.06Forfeited (19) 27.64Unvested restricted stock awards outstanding at end of period 216 $28.75During 2015 , 2014 , and 2013 , the weighted-average grant date fair value of restricted stock awards granted was $30.50 , $21.11 and $11.55 , respectively.The fair value of restricted stock awards subject only to time-vesting restrictions was determined based upon the price of our common stock on the date of grant.The fair value of restricted stock subject to our common stock reaching certain price thresholds was determined utilizing a Monte Carlo financial valuation modelwhich is appropriate for path-dependent options. Compensation expense determined utilizing the Monte Carlo simulation is recognized regardless of whether thecommon stock reaches the defined thresholds. The range of assumptions used to estimate the fair value of performance-based restricted stock awards grantedduring the years ended December 31, 2015, 2014, and 2013 were as follows: Years Ended December 31, 2015 2014 2013Expected term (years) 0.70 - 1.00 0.08 - 1.08 0.17 - 1.17Expected volatility 36.7% 38.6% - 42.6% 41.3% - 43.3%Risk-free interest rate 0.93% 0.87% - 1.17% 0.38% - 0.68%Weighted-average grant date fair value $21.47 - $24.94 $14.18 - $26.42 $5.51 - $16.32During 2015 , 2014 , and 2013 , the total fair value of restricted stock awards vested was $5.9 million , $1.5 million and $3.0 million , respectively.Compensation expense associated with restricted stock awards under our incentive compensation plan was $5.2 million , $3.1 million and $2.7 million for theyears ended December 31, 2015 , 2014 , and 2013 , respectively. During 2015, we modified the terms of certain of our restricted stock awards issued during 2015,2014, and 2013, resulting in the accelerated vesting of the time-vested component. The incremental compensation expense associated with the modification ofthese restricted stock awards was $0.2 million for 2015. Stock OptionsProceeds from the exercise of stock options are credited to common stock at par value, and the excess is credited to additional paid-in capital. We estimatedthe fair value of each of our stock option awards on the date of grant using a Black-Scholes option92 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)pricing model. We determined the expected volatility using the historical and implied volatilities of a peer group of companies given the limited trading history ofour common stock at the time. For each option awarded, the risk-free interest rate was based on the U.S. Treasury yield in effect at the time of grant for periodscorresponding with the expected life of the option. The expected life of an option represents the weighted average period of time that an option grant is expected tobe outstanding, giving consideration to its vesting schedule and historical exercise patterns. There were no stock option grants in 2015 , 2014 or 2013 . Optionsoutstanding at December 31, 2015 relate to grants prior to 2013.Compensation expense related to stock options was less than $0.1 million during the years ended December 31, 2014 and 2013 . There was no compensationexpense related to stock options for the year ended December 31, 2015 . Stock option activity for the year ended December 31, 2015 was as follows (shares inthousands): Number of Shares Underlying Options Weighted- Average Exercise PriceOptions outstanding at beginning of year 46 $18.46Granted — —Exercised (15) 20.84Forfeited and expired — —Options outstanding at end of year 31 $17.32Options exercisable at end of year 31 $17.32The total intrinsic value of stock options exercised during the years ended December 31, 2015 , 2014 , and 2013 was $0.5 million , $0.2 million , and $0.1million , respectively.The following table summarizes information about stock options outstanding as of December 31, 2015 (shares in thousands): Options Outstanding Options ExercisableRange of exercise prices Number of SharesOutstanding Weighted AverageRemainingContractual Life Weighted AverageExercise Price Number of SharesOutstanding Weighted AverageExercise Price$12.00 - $12.00 10 4.51 $12.00 10 $12.00$15.00 - $15.00 11 4.52 15.00 11 15.00$22.69 - $22.69 5 4.52 22.69 5 22.69$26.68 - $26.68 5 4.52 26.68 5 26.68$12.00 - $26.68 31 4.52 $17.32 31 $17.32The aggregate intrinsic value of outstanding and exercisable stock options was $1.1 million , $0.5 million , and $0.5 million at December 31, 2015 , 2014 , and2013 , respectively.18. NET EARNINGS (LOSS) PER SHAREBasic earnings (loss) per share is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the period.Diluted earnings (loss) per share is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the period aftergiving effect to all potentially dilutive securities outstanding during the period.93 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The following is a reconciliation of the components of the basic and diluted earnings per share calculations for the years ended December 31, 2015 and 2014, in thousands: Years Ended December 31, 2015 2014Numerator: Income from continuing operations$25,820 $21,575Loss from discontinued operations, net of taxes(320) (993)Numerator for basic and diluted earnings per share$25,500 $20,582 Denominator: Basic weighted average common shares outstanding14,080 13,541Restricted stock and restricted stock units170 210Warrants1,295 136Stock options15 11Denominator for diluted earnings per share15,560 13,898We have not included a reconciliation of the components of the basic and diluted earnings per share calculations for the year ended December 31, 2013 as wereported losses from continuing and discontinued operations in the accompanying consolidated statements of operations for that year, and thus the share count usedin the basic and diluted calculation is the same.For the year ended December 31, 2015, there were no potentially dilutive shares excluded from the calculation of diluted earnings (loss) per share. For theyears ended December 31, 2014 , and 2013 , our potentially dilutive shares excluded from the calculation of diluted earnings (loss) per share included sharesunderlying our restricted stock awards, restricted stock units, stock options, and Warrants. For the year ended December 31, 2013 , our potentially dilutive sharesalso included the shares underlying our Convertible Notes. The following table shows the type and number (in thousands) of potentially dilutive shares excludedfrom the diluted earnings (loss) per share calculations for the periods presented as their effect would have been anti-dilutive or they have not met their performancetarget: Years Ended December 31, 2014 2013Potentially dilutive shares: Convertible Notes — 349Unvested restricted stock awards and restricted stock units 84 516Stock options 14 80Warrants 1,500 3,000Total potentially dilutive shares 1,598 3,94594 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)19. BUSINESS SEGMENTSOur two reportable segments consist of ready-mixed concrete and aggregate products, as described below.Our ready-mixed concrete segment produces and sells ready-mixed concrete. This segment serves the following principal markets: Texas, northern California,New York, New Jersey, Washington, D.C., and Oklahoma. With the acquisition of the ready-mixed concrete businesses during the fourth quarter of 2015 (see Note2), we have further expanded our ready-mixed concrete segment to serve the U.S Virgin Islands market. Our aggregate products segment includes crushed stone,sand and gravel products and serves the north and west Texas, New York, and New Jersey markets in which our ready-mixed concrete segment operates. With theacquisition of sand and gravel operations during the third quarter of 2015 (see Note 2), we have expanded our aggregate products segment to serve the southernOklahoma market. Further, with the Heavy acquisition during the fourth quarter of 2015 (see Note 2), we have expanded our aggregates products segment to servethe U.S. Virgin Islands market. Other products not associated with a reportable segment include our building materials stores, hauling operations, lime slurry,ARIDUS ® Rapid Drying Concrete technology, brokered product sales, a recycled aggregates operation, an aggregates distribution operation, and an industrialwaterfront marine terminal and sales yard. The financial results of the acquisitions completed in 2015 , 2014 , and 2013 have been included in their respectivereportable segment or in other products as of their respective acquisition dates.Our customers are generally involved in the construction industry, which is a cyclical business and is subject to general and more localized economicconditions. In addition, our business is impacted by seasonal variations in weather conditions, which vary by regional market. Accordingly, demand for ourproducts and services during the winter months are typically lower than in other months of the year because of inclement weather. Also, sustained periods ofinclement weather and other adverse weather conditions could cause the delay of construction projects during other times of the year.Our chief operating decision maker evaluates segment performance and allocates resources based on Adjusted EBITDA. We define Adjusted EBITDA as netincome (loss) from continuing operations excluding interest, income taxes, depreciation, depletion and amortization, derivative gain (loss), gain or loss onrevaluation of contingent consideration, and gain or loss on extinguishment of debt. Additionally, we adjust Adjusted EBITDA for items similar to certain of thoseused in calculating the Company’s compliance with debt covenants. The additional items that are adjusted to determine our Adjusted EBITDA are:•non-cash stock compensation expense;•acquisition-related professional fees; and•corporate officer severance expense.We consider Adjusted EBITDA to be an indicator of the operational strength and performance of our business. We have included Adjusted EBITDA becauseit is a key financial measure used by our management to (i) internally measure our operating performance and (ii) assess our ability to service our debt, incuradditional debt and meet our capital expenditure requirements.Adjusted EBITDA should not be construed as an alternative to, or a better indicator of, net income or loss, is not based on U.S. GAAP, and is not necessarily ameasure of our cash flows or ability to fund our cash needs. Our measurements of Adjusted EBITDA may not be comparable to similarly titled measures reportedby other companies.We account for inter-segment sales at market prices. Corporate includes executive, administrative, financial, legal, human resources, business developmentand risk management activities which are not allocated to reportable segments and are excluded from segment Adjusted EBITDA. Eliminations includetransactions to account for intercompany activity.In January 2014, our Board approved of the sale of our one remaining precast operation in Pennsylvania. Historical segment results have been recast toconform to this change.95 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The following tables set forth certain financial information relating to our continuing operations by reportable segment (in thousands): Years ended December 31, 2015 2014 2013Revenue: Ready-mixed concrete Sales to external customers $876,633 $632,787 $545,302Aggregate products Sales to external customers 34,191 31,662 21,715Intersegment sales 26,248 20,956 16,498 Total aggregate products 60,439 52,618 38,213Total reportable segment revenue 937,072 685,405 583,515 Other products and eliminations 37,645 18,309 14,640Total revenue $974,717 $703,714 $598,155 Reportable Segment Adjusted EBITDA: Ready-mixed concrete $131,940 $84,706 $58,583Aggregate products 14,996 10,549 7,192Total reportable segment Adjusted EBITDA $146,936 $95,255 $65,775 Reconciliation of reportable segment Adjusted EBITDA to income (loss) from continuingoperations before income taxes: Total reportable segment Adjusted EBITDA $146,936 $95,255 $65,775Other products and eliminations income from operations 8,704 3,082 2,615Corporate overhead, net of insurance allocations (39,012) (30,870) (29,957)Depreciation, depletion and amortization for reportable segments (38,767) (20,362) (15,777)Interest expense, net (21,734) (20,431) (11,332)Corporate gain on early extinguishment of debt — 11 985Corporate derivative loss (60,016) (3,556) (29,964)Loss on revaluation of contingent consideration (932) — —Corporate, other products and eliminations other income, net 506 602 550(Loss) income from continuing operations before income taxes $(4,315) $23,731 $(17,105) Capital Expenditures: Ready-mixed concrete $12,321 $21,754 $12,236Aggregate products 7,859 9,128 5,773Other 4,797 1,685 1,979Total capital expenditures $24,977 $32,567 $19,988 Revenue by Product: Ready-mixed concrete $876,633 $632,787 $545,302Aggregate products 34,191 31,662 21,715Aggregate distribution 28,393 4,892 —Building materials 17,533 15,410 14,656Lime 9,250 10,459 7,356Hauling 5,425 4,221 4,533Other 3,292 4,283 4,593Total revenue $974,717 $703,714 $598,15596 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) As of December 31, 2015 2014 2013Identifiable Assets: Ready-mixed concrete and concrete-related products $166,837 $126,141 $91,776Aggregate products 65,937 40,878 36,819Other products and corporate 15,349 9,505 9,965Total identifiable assets $248,123 $176,524 $138,56020. RISK CONCENTRATIONWe grant credit, generally without collateral, to our customers, which include general contractors, municipalities and commercial companies located primarilyin Texas, northern California, New Jersey, New York, Pennsylvania, Washington D.C., Oklahoma, and the U.S. Virgin Islands. Consequently, we are subject topotential credit risk related to changes in business and economic factors in those states and territories. We generally have lien rights in the work we perform, andconcentrations of credit risk are limited because of the diversity of our customer base. Further, our management believes that our contract acceptance, billing andcollection policies are adequate to limit potential credit risk.Several of our subsidiaries are parties to various collective bargaining agreements with labor unions having multi-year terms. As of December 31, 2015 ,approximately 976 of our employees, or 36.1% of our workforce, were represented by labor unions having collective bargaining agreements with us. Generally,these agreements have multi-year terms and expire on a staggered basis between 2016 and 2019. As of December 31, 2014 , approximately 617 of our employees,or 28.8% of our workforce, were represented by agreements that expire on a staggered basis between 2015 and 2019.21. SIGNIFICANT CUSTOMERS AND SUPPLIERSWe did not have any customers that accounted for more than 10% of our revenues or any suppliers that accounted for more than 10% of our cost of goods soldin 2015 , 2014 or 2013 . We did not have any customers that accounted for more than 10% of our accounts receivable as of December 31, 2015 or December 31,2014 .22. COMMITMENTS AND CONTINGENCIESLegal ProceedingsFrom time to time, and currently, we are subject to various claims and litigation brought by employees, customers and other third parties for, among othermatters, personal injuries, property damages, product defects and delay damages that have, or allegedly have, resulted from the conduct of our operations. As aresult of these types of claims and litigation, we must periodically evaluate the probability of damages being assessed against us and the range of possibleoutcomes. In each reporting period, if we determine that the likelihood of damages being assessed against us is probable, and, if we believe we can estimate arange of possible outcomes, then we will record a liability. The amount of the liability will be based upon a specific estimate, if we believe a specific estimate to belikely, or it will reflect the low end of our range. Currently, there are no material legal proceedings pending against us.In the future, we may receive funding deficiency demands related to multi-employer pension plans to which we contribute. We are unable to estimate theamount of any potential future funding deficiency demands because the actions of each of the other contributing employers in the plans has an effect on each of theother contributing employers, and the development of a rehabilitation plan by the trustees and subsequent submittal to and approval by the Internal RevenueService is not predictable. Further, the allocation of fund assets and return assumptions by trustees are variable, as are actual investment returns relative to the planassumptions. As of March 3, 2016 , there are no material product defect claims pending against us. Accordingly, our existing accruals for claims against us do not reflectany material amounts relating to product defect claims. While our management is not aware of any facts that would reasonably be expected to lead to materialproduct defect claims against us that would have a material adverse effect on our business, financial condition or results of operations, it is possible that claimscould be asserted against us in the97 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)future. We do not maintain insurance that would cover all damages resulting from product defect claims. In particular, we generally do not maintain insurancecoverage for the cost of removing and rebuilding structures. In addition, our indemnification arrangements with contractors or others, when obtained, generallyprovide only limited protection against product defect claims. Due to inherent uncertainties associated with estimating unasserted claims in our business, wecannot estimate the amount of any future loss that may be attributable to unasserted product defect claims related to ready-mixed concrete we have delivered priorto December 31, 2015 . We believe that the resolution of all litigation currently pending or threatened against us or any of our subsidiaries will not materially exceed our existingaccruals for those matters. However, because of the inherent uncertainty of litigation, there is a risk that we may have to increase our accruals for one or moreclaims or proceedings to which we or any of our subsidiaries is a party as more information becomes available or proceedings progress, and any such increase inaccruals could have a material adverse effect on our consolidated financial condition or results of operations. We expect in the future that we and our operatingsubsidiaries will, from time to time, be a party to litigation or administrative proceedings that arise in the normal course of our business. We are subject to federal, state and local environmental laws and regulations concerning, among other matters, air emissions and wastewater discharge. Ourmanagement believes we are in substantial compliance with applicable environmental laws and regulations. From time to time, we receive claims from federal andstate environmental regulatory agencies and entities asserting that we may be in violation of environmental laws and regulations. Based on experience and theinformation currently available, our management does not believe that these claims will materially exceed our related accruals. Despite compliance andexperience, it is possible that we could be held liable for future charges, which might be material, but are not currently known to us or cannot be estimated byus. In addition, changes in federal or state laws, regulations or requirements, or discovery of currently unknown conditions, could require additional expenditures. As permitted under Delaware law, we have agreements that provide indemnification of officers and directors for certain events or occurrences while theofficer or director is or was serving at our request in such capacity. The maximum potential amount of future payments that we could be required to make underthese indemnification agreements is not limited; however, we have a director and officer insurance policy that potentially limits our exposure and enables us torecover a portion of future amounts that may be paid. As a result of the insurance policy coverage, we believe the estimated fair value of these indemnificationagreements is minimal. Accordingly, we have not recorded any liabilities for these agreements as of December 31, 2015 .We and our subsidiaries are parties to agreements that require us to provide indemnification in certain instances when we acquire businesses and real estateand in the ordinary course of business with our customers, suppliers, lessors and service providers.Lease PaymentsWe lease certain mobile and other equipment, land, facilities, office space and other items which, in the normal course of business, are renewed or replaced bysubsequent leases. Total consolidated expense for such operating leases amounted to $17.4 million in 2015 , $11.9 million in 2014 , and $11.2 million in 2013 .Future minimum rental payments with respect to our operating lease obligations as of December 31, 2015 , are as follows (in thousands): Year EndingDecember 31,2016 $13,5292017 12,5752018 10,5752019 7,4462020 3,288Thereafter 18,157 $65,570Our annual lease expense differs from our future minimum rental payments as a result of month to month equipment leases to support our operations.98 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Insurance Programs We maintain third-party insurance coverage against certain risks. Under certain components of our insurance program, we share the risk of loss with ourinsurance underwriters by maintaining high deductibles subject to aggregate annual loss limitations. Generally, our deductible retentions per occurrence for auto,workers’ compensation and general liability insurance programs are $1.0 million , although certain of our operations are self-insured for workers’compensation. We fund these deductibles and record an expense for expected losses under the programs. The expected losses are determined using a combinationof our historical loss experience and subjective assessments of our future loss exposure. The estimated losses are subject to uncertainty from various sources,including changes in claims reporting patterns, claims settlement patterns, judicial decisions, legislation and economic conditions. Although we believe that theestimated losses we have recorded are reasonable, significant differences related to the items noted above could materially affect our insurance obligations andfuture expense. The amount accrued for self-insurance claims was $12.0 million as of December 31, 2015 , compared to $9.5 million as of December 31, 2014 ,which is recorded in accrued liabilities.Performance Bonds In the normal course of business, we and our subsidiaries are contingently liable for performance under $16.4 million in performance bonds that variouscontractors, states and municipalities have required as of December 31, 2015 . The bonds principally relate to construction contracts, reclamation obligations andlicensing and permitting. We and our subsidiaries have indemnified the underwriting insurance company against any exposure under the performance bonds. Nomaterial claims have been made against these bonds.23. EMPLOYEE BENEFIT PLANS AND MULTI-EMPLOYER PENSION PLANSDefined Contribution 401(k) PlanWe maintain a defined contribution 401(k) profit sharing plan for employees meeting various employment requirements. Eligible employees may contributeamounts up to the lesser of 60% of their annual compensation or the maximum amount IRS regulations permit. During 2015 , we matched 100% of the first 4% ofemployee contributions. During 2014 , we matched 100% of the first 1% of employee contributions and 50% of the next 5% of employee contributions. During2013 , we matched 50% of employee contributions up to a maximum of 6% of their compensation. We paid matching contributions of $2.9 million in 2015, $1.5million in 2014 , and $1.0 million in 2013 .Multi-Employer Pension Plans Several of our subsidiaries are parties to various collective bargaining agreements with labor unions having multi-year terms that expire on a staggeredbasis. Under these agreements, our applicable subsidiaries pay specified wages to covered employees, observe designated workplace rules and make payments tomulti-employer pension plans and employee benefit trusts rather than administering the funds on behalf of these employees. The risks of participating in thesemulti-employer pension plans are different from single-employer plans. Assets contributed to the multi-employer plan by one employer may be used to providebenefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may beborne by the remaining participating employers. If we choose to stop participating in some of these multi-employer plans, we may be required to pay those plans anamount based on the underfunded status of the plan, referred to as a withdrawal liability. We were not required to record a liability in fiscal 2015 or 2014 for fulland partial withdrawals from any multi-employer pension plans. For additional information regarding our potential future obligations, see Note 22. The required disclosures and our participation in significant multi-employer pension plans are presented in the table below. The EIN / Pension Plan Numbercolumn provides the Employer Identification Number (“EIN”) and the three-digit plan number, if applicable. The Pension Protection Act zone status is based oninformation available from the plan or the plan’s public filings. Among other factors, plans in the red zone are generally less than 65% funded, plans in the orangeor yellow zones are less than 80% funded, and plans in the green zone are at least 80% funded. The FIP / RP Status Pending / Implemented column indicates plansfor which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. The last column lists the expirationdate(s) of the collective-bargaining agreements to which the plans are subject. Our contributions did not represent more than 5% of total contributions to any of thesignificant plans shown below.99 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Pension Fund EIN / PPN Pension Protection Act Zone Status FIP / RP Status Pending / Implemented Contributions (in Thousands)Surcharge Imposed Expiration Date of Collective Bargaining Agreement 2014 and2015 2013 2015 2014 2013 Western Conferenceof TeamstersPension Plan 91-6145047/001 Green Green No $4,357 $3,568 $3,204 No 6/30/2016 to8/31/2018OperatingEngineers PensionTrust Fund 94-6090764/001 Orange Orange Yes 1,173 933 837 No 7/1/2017Local 282 PensionTrust Fund 11-6245313/001 Green Green No 829 819 650 No 6/30/2016TruckingEmployees of NorthJersey Pension Fund 22-6063702/001 Red Red Yes 615 559 513 No 4/30/2018Pension Fund Local445 13-1864489/001 Green Yellow Yes 200 184 193 No 6/30/2017OperatingEngineers 825Pension Fund 22-6033380/001 Green Orange Yes 178 161 151 Yes 3/31/2016 to3/31/2019AutomotiveIndustries PensionPlan 94-1133245/001 Red Red Yes 102 179 180 No 7/31/2016Other Various Various Various Various 604 540 495 Various 6/30/2016 to 6/30/19 $8,058 $6,943 $6,223 Contributions to the Western Conference of Teamsters Pension Plan increased from 2014 to 2015 due primarily to the impact of employees added as part ofthe Right Away acquisition during 2015. At the date that these consolidated financial statements were issued, Forms 5500 were generally not available for the planyear ending in 2015 .24. QUARTERLY SUMMARY (unaudited) Year Ended December 31, 2015 (in thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth QuarterRevenue - continuing operations $171,338 $244,695 $295,111 $263,573Net (loss) income $(10,484) $9,703 $1,619 $24,662Net (loss) income per share-basic $(0.77) $0.69 $0.11 $1.70Net (loss) income per share-diluted $(0.77) $0.64 $0.10 $1.53 100 Table of ContentsU.S. CONCRETE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Year Ended December 31, 2014 (in thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth QuarterRevenue - continuing operations $146,257 $180,358 $197,589 $179,510Net (loss) income $(1,153) $7,861 $13,007 $867Net (loss) income per share-basic $(0.09) $0.58 $0.96 $0.06Net (loss) income per share-diluted $(0.09) $0.57 $0.94 $0.06Our customers are generally involved in the construction industry, which is a cyclical business and is subject to general and more localized economicconditions. In addition, our business is impacted by seasonal variations in weather conditions, which vary by regional market. Accordingly, demand for ourproducts and services during the winter months are typically lower than in other months of the year because of inclement weather. Also, sustained periods ofinclement weather and other adverse weather conditions could cause the delay of construction projects during other times of the year.25. SUBSEQUENT EVENTOn February 29, 2016, we completed the acquisition of all the assets of Greco Brothers Concrete of L.I., Inc. ("Greco"), in Brooklyn, New York. The purchaseprice was $15.8 million in cash, plus closing adjustments of $0.9 million . We funded the purchase through a combination of cash on hand and borrowings underour Revolving Facility. Greco operates two ready-mixed concrete plants and a fleet of 37 mixer trucks. The Greco acquisition further expands our ready-mixedconcrete operations in our existing New York market. We will prepare the preliminary purchase price allocation for this acquisition as soon as practical, but nolater than one year from the acquisition date.101 Table of ContentsItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.Item 9A. Controls and ProceduresDisclosure Controls and ProceduresAs of December 31, 2015 , our management, with the participation of our principal executive officer and our principal financial officer, evaluated theeffectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)),which are designed to provide reasonable assurance that the information required to be disclosed in the reports that we file or submit under the Exchange Act isrecorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controlsand procedures include controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the reports that wefile or submit under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer,as appropriate, to allow timely decisions regarding required disclosure. Based on the evaluation, our principal executive officer and our principal financial officerhave concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2015 .Management’s Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting (as that term is defined in Rules 13a-15(f)and 15d-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accountingprinciples. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies and procedures may deteriorate. On October 27, 2015, we acquired the equity of Heavy Materials, LLC ("Heavy") and Spartan Products, LLC ("Spartan"). Our management has acknowledgedthat it is responsible for establishing and maintaining a system of internal controls over financial reporting for Heavy and Spartan. We are in the process ofintegrating Heavy and Spartan, and, therefore, have excluded Heavy and Spartan from our December 31, 2015 assessment of the effectiveness of internal controlover financial reporting. The impact of the Heavy and Spartan transactions have not, nor are they expected to, materially affect our internal control over financialreporting. Heavy and Spartan represented 5.1% of our consolidated total assets and 0.4% of our consolidated revenues included in our consolidated financialstatements as of and for the year ended December 31, 2015. Management will include Heavy and Spartan in its fiscal 2016 assessment of internal control overfinancial reporting.Under the supervision and with the participation of our management, including our principal executive, financial and accounting officers, we have conductedan evaluation of the effectiveness of our internal control over financial reporting based on the framework in “ Internal Control – Integrated Framework (2013) ”issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management has concluded that our internalcontrol over financial reporting was effective as of December 31, 2015 .Grant Thornton LLP, the Company's independent registered public accounting firm, has audited our consolidated financial statements included in this reportand has issued an attestation report on the Company's internal control over financial reporting, which is included herein.Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during the quarter ended December 31, 2015 that have materially affected, or arereasonably likely to materially affect, our internal control over financial reporting. 102 Table of ContentsReport of Independent Registered Public Accounting FirmBoard of Directors and ShareholdersU.S. Concrete, Inc.We have audited the internal control over financial reporting of U.S. Concrete, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31,2015, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of theeffectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting(“Management’s Report”). Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. Our audit of,and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting of Heavy Materials, LLC andSpartan Products, LLC, whose financial statements reflect total assets and revenues constituting 5.1 percent and 0.4 percent, respectively, of the relatedconsolidated financial statement accounts as of and for the year ended December 31, 2015. As indicated in Management’s Report, Heavy Materials, LLC andSpartan Products, LLC were acquired during 2015. Management’s assertion on the effectiveness of the Company’s internal control over financial reportingexcluded internal control over financial reporting of Heavy Materials, LLC and Spartan Products, LLC.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that weplan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in thecircumstances. We believe that our audit provides a reasonable basis for our opinion.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financialreporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteriaestablished in the 2013 Internal Control-Integrated Framework issued by COSO.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statementsof the Company as of and for the year ended December 31, 2015, and our report dated March 4, 2016 expressed an unqualified opinion on those financialstatements./s/ GRANT THORNTON LLPDallas, TexasMarch 4, 2016103 Table of ContentsItem 9B. Other InformationNot applicable.104 Table of ContentsPART IIIExcept as otherwise indicated, in Items 10, 11, 12, 13 and 14 below, pursuant to the General Instructions to Form 10-K, we intend to incorporate by referencethe information we refer to in those Items from the definitive proxy statement for our 2016 Annual Meeting of Stockholders (our "2016 Annual Proxy Statement").We intend to file our 2016 Annual Proxy Statement with the Securities and Exchange Commission on or about April 1, 2016, but in any event within 120 daysafter the fiscal year ended December 31, 2015 .Item 10. Directors, Executive Officers and Corporate Governance For the information this Item requires, please see the information under the headings “Proposal No. 1—Election of Directors,” “Executive Officers,”“Information Concerning the Board of Directors and Committees” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the 2016 Annual ProxyStatement, which is incorporated in this Item by this reference. We have a code of ethics applicable to all our employees and directors. In addition, our principal executive, financial and accounting officers are subject to theprovisions of the Code of Ethics of U.S. Concrete, Inc. for chief executive officer and senior financial officers, a copy of which is available on our Web site atwww.us-concrete.com . In the event that we amend or waive any of the provisions of these codes of ethics applicable to our principal executive, financial andaccounting officers, we intend to disclose that action on our website, as required by applicable law.Item 11. Executive CompensationFor the information this Item requires, please see the information under the headings “Compensation Discussion and Analysis,” “Director Compensation,”“Executive Compensation,” “Compensation Program and Risk Management,” “Compensation Committee Interlocks and Insider Participation” and “CompensationCommittee Report” in the 2016 Annual Proxy Statement, which is incorporated in this Item by this reference.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersExcept as set forth below, for the information this Item requires, please see the information under the heading “Security Ownership of Certain BeneficialOwners and Management and Related Stockholder Matters" in the 2016 Annual Proxy Statement, which is incorporated in this Item by this reference.Equity Compensation Plan InformationAll shares of common stock issuable under our compensation plans are subject to adjustment to reflect any increase or decrease in the number of sharesoutstanding as a result of stock splits, combination of shares, recapitalizations, mergers or consolidations.The following table summarizes, as of December 31, 2015 , the indicated information regarding equity compensation to our employees, officers, directors andother persons under our equity compensation plans (in thousands). These plans use or are based on shares of our common stock. We do not have any equitycompensation plans not approved by security holders. Plan Category Number of Securities to Be Issued UponExercise ofOutstanding StockOptions Weighted AverageExercise Price ofOutstanding StockOptions Number of Securities Remaining Availablefor Future IssuanceUnder EquityCompensation Plans(Excluding SecuritiesReflected in FirstColumn)Equity compensation plans approved by security holders (1) 31 $17.32 900(1)We adopted a management equity incentive plan (the "2010 Plan"), effective as of August 31, 2010, under which 9.5% of the equity of the Companyauthorized pursuant to our Plan of Reorganization, on a fully-diluted basis, is reserved for issuance as equity-based awards to management and employees,and 0.5% of such equity, on a fully-diluted basis, is reserved for issuance to directors of the Company. On January 23, 2013, we adopted, and on May 15,2013, the Company’s stockholders approved the U.S. Concrete Long Term Incentive Plan (the “2013 Plan”), which allows, among other things, forapproximately 0.5 million shares of common stock to be reserved for grant as equity-based awards to our management, employees, and105 Table of Contentsdirectors. The 2013 Plan enables us to grant stock options, stock appreciation rights, restricted stock awards, restricted stock units, cash awards, andperformance awards. We reserved 2.7 million shares of common stock for issuance in connection with the 2010 and 2013 Plans, and, as of December 31,2015 , there were 0.9 million shares remaining for future issuance. Item 13. Certain Relationships and Related Transactions, and Director IndependenceFor the information this Item requires, please see the information under the headings “Certain Relationships and Related Transactions” and "InformationConcerning the Board of Directors and Committees - Board of Directors - Director Independence" in the 2016 Annual Proxy Statement, which is incorporated inthis Item by this reference.Item 14. Principal Accountant Fees and ServicesFor the information this Item requires, please see the information appearing under the heading “Fees Incurred by U.S. Concrete to Independent RegisteredPublic Accounting Firm” in the 2016 Annual Proxy Statement, which is incorporated in this Item by this reference.PART IVItem 15. Exhibits and Financial Statement Schedules(a)(1) Financial Statements.For the information this item requires, please see Index to Consolidated Financial Statements on page 55 of this report.(2) Financial Statement Schedules.All financial statement schedules are omitted because they are not required or the required information is shown in our consolidated financial statements or thenotes thereto.(3) Exhibits.The information on exhibits required by this Item 15 is set forth in the Index to Exhibits appearing on pages 108-110 of this Report and is incorporated byreference herein.106 Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. U.S. CONCRETE, INC. Date: March 4, 2016By:/s/ William J. Sandbrook William J. SandbrookPresident and Chief Executive OfficerPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrantand in the capacities indicated on March 4, 2016 .Signature Title /s/ William J. Sandbrook President and Chief Executive Officer and Director (Principal ExecutiveOfficer)William J. Sandbrook /s/ Joseph C. Tusa, Jr. Senior Vice President and Chief Financial Officer (Principal Accounting andFinancial Officer)Joseph C. Tusa, Jr. /s/ Kurt M. Cellar DirectorKurt M. Cellar /s/ Eugene I. Davis DirectorEugene I. Davis /s/ Michael D. Lundin DirectorMichael D. Lundin /s/ Robert M. Rayner DirectorRobert M. Rayner /s/ Theodore P. Rossi DirectorTheodore P. Rossi /s/ Colin M. Sutherland DirectorColin M. Sutherland 107 Table of ContentsINDEX TO EXHIBITSExhibitNumber Description2.1* —Asset Purchase Agreement dated August 2, 2012 by and among U.S. Concrete, Inc. and Central Precast Concrete, Inc., San Diego PrecastConcrete, Inc., Sierra Precast Inc. and Oldcastle Precast, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form8-K filed August 3, 2012 (File No. 001-34530)).2.2* —Equity Purchase Agreement, dated as of October 17, 2012, by and between Randolph R. Boardman and Terri L. Boardman, Trustees under theRandolph R. Boardman and Terri L. Boardman Family Trust Agreement dated January 21, 1997, Douglas H. Boardman and Lauren Boardman,Trustees of the Douglas H. Boardman and Lauren Boardman Family Trust, Danvers M. Boardman, III, Trustee under the DMB III Trust Agreementdated July 12, 2008 and Kathy M. Boardman, Trustee under the KMSB Trust Agreement dated June 26, 2008, as Sellers, and Randolph R.Boardman, Terri L. Boardman, Douglas H. Boardman, Lauren Boardman, Danvers M. Boardman III and Kathy M. Boardman, on the one hand, andCentral Concrete Supply Co., Inc., and U.S. Concrete, Inc., on the other hand (incorporated by reference to Exhibit 2.1 to the Company's CurrentReport on Form 8-K filed October 18, 2012 (File No. 001-34530.))2.3* —Share Purchase Agreement, dated as of April 1, 2015, by and among USCF&B AcquisitionCo LLC, Ferrara Bros. Building Materials Corp.,Ferrara Family Holdings, Inc. and Joseph J. Ferrara, in his capacity as Seller's Representative. (incorporated by reference to Exhibit 2.1 to theCompany's Current Report on Form 8-K filed on April 2, 2015 (File No. 001-34530)).3.1* —Amended and Restated Certificate of Incorporation of U.S. Concrete, Inc. (incorporated by reference to Exhibit 1 to the Company’s RegistrationStatement on Form 8-A filed on August 31, 2010 (File No. 000-26025)).3.2* —Third Amended and Restated By-Laws of U.S. Concrete, Inc. (incorporated by reference to Exhibit 2 to the Company’s Registration Statementon Form 8-A filed on August 31, 2010 (File No. 000-26025)).3.3* —Amendment No. 1 to Third Amended and Restated Bylaws of U.S. Concrete, Inc (incorporated by reference to Exhibit 3.1 to the Company’sCurrent Report on Form 8-K filed on November 18, 2015 (File No. 001-34530)).4.1* —Form of common stock certificate (incorporated by reference to Exhibit 3 to the Company’s Registration Statement on Form 8-A filed August31, 2010 (File No. 000-26025)).4.2* —Class A Warrant Agreement, dated as of August 31, 2010, by and among U.S. Concrete, Inc., subsidiaries named therein, and U.S. BankNational Association, as noteholder collateral agent (incorporated by reference to Exhibit 4 to the Company’s Registration Statement on Form 8-Afiled on August 31, 2010 (File No. 000-26025)).4.3* —Class B Warrant Agreement, dated as of August 31, 2010, by and among U.S. Concrete, Inc., subsidiaries named therein, and U.S. Bank NationalAssociation, as noteholder collateral agent (incorporated by reference to Exhibit 5 to the Company’s Registration Statement on Form 8-A filed onAugust 31, 2010 (File No. 000-26025)).4.4* —First Amendment to Intercreditor Agreement, dated as of March 22, 2013, by and among Bank of America, N.A., as successor in interest toJPMorgan Chase Bank, N.A., as administrative agent for the ABL Secured Parties (as defined in the Intercreditor Agreement), U.S. Bank NationalAssociation, as trustee and noteholder collateral agent for the Convertible Note Parties (as defined therein), U.S. Bank, as trustee and noteholdercollateral agent for the Senior Secured Parties (as defined therein), U.S. Concrete, Inc. and each of the other Loan Parties (as defined in theIntercreditor Agreement) (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K dated March 22, 2013 (File No.001-34530)).4.5* —Indenture, dated as of November 22, 2013, by and among U.S. Concrete, Inc., the subsidiary guarantors party thereto, and U.S. Bank NationalAssociation, as trustee and noteholder collateral agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-Kdated November 22, 2013 (File No. 001-34530)).4.6* —Second Amendment to Intercreditor Agreement, dated as of November 22, 2013, by and among Bank of America, N.A., as administrative agentfor the ABL Secured Parties, U.S. Bank National Association, as trustee and noteholder collateral agent, U.S. Concrete, Inc., and the other LoanParties party thereto (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K dated November 22, 2013 (File No.001-34530)).10.1*† —Severance Agreement, dated as of July 31, 2007, by and between U.S. Concrete, Inc. and Jeff L. Davis (incorporated by reference to Exhibit10.10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 001-34530)).10.2*† —First Amendment to Severance Agreement, effective as of December 31, 2008, by and between U.S. Concrete, Inc. and Jeff L. Davis(incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 001-34530)).108 Table of Contents10.3*† —U.S. Concrete, Inc. Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.5 to the Company’s Current Reporton Form 8-K filed on September 2, 2010 (File No. 000-26025)).10.4*† —U.S. Concrete, Inc. Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.6 to the Company’s Current Report onForm 8-K filed on September 2, 2010 (File No. 000-26025)).10.5*† —Form of Indemnification Agreement (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed onSeptember 2, 2010 (File No. 000-26025)).10.6*† —Executive Severance Agreement, effective as of August 22, 2011 between U.S. Concrete, Inc. and William J. Sandbrook (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 22, 2011 (File No. 001-34530)).10.7*† —Indemnification Agreement, effective as of August 22, 2011 between U.S. Concrete, Inc. and William J. Sandbrook (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 22, 2011 (File No. 001-34530)).10.8*† —Executive Severance Agreement dated January 23, 2013 by and between U.S. Concrete, Inc. and Niel L. Poulsen (incorporated by reference toExhibit 10.37 to the Company’s Annual Report on Form 10-K dated March 8, 2013 (File No. 001-34530)).10.9*† —Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed onMarch 6, 2013 (File No. 0001-34530)).10.10*† —U.S. Concrete, Inc. Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K datedApril 17, 2013 (File No. 001-34530)).10.11*† —U.S. Concrete, Inc. Deferred Compensation Plan Adoption Agreement (incorporated by reference to Exhibit 10.2 to the Company’s CurrentReport on Form 8-K dated April 17, 2013 (File No. 001-34530)).10.12*† —U.S. Concrete, Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K datedMay 15, 2013 (File No. 001-34530)).10.13*† —Form of Restricted Stock Agreement (Employee Form) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated July 1, 2013 (File No. 001-34530)).10.14* —First Amended and Restated Loan and Security Agreement, dated as of October 29, 2013 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8-K dated October 29, 2013 (File No. 001-34530)).10.15*† —U.S. Concrete, Inc. Management Equity Incentive Plan effective January 1, 2013 (incorporated by reference to Exhibit 10.23 to the Company’sAnnual Report on Form 10-K dated March 7, 2014 (File No. 001-34530)).10.16*† —Executive Severance Agreement dated August 1, 2013 by and between U.S. Concrete, Inc. and Paul M. Jolas (incorporated by reference toExhibit 10.24 to the Company’s Annual Report on Form 10-K dated March 7, 2014 (File No. 001-34530)).10.17* —Subscription Agreement, dated as of April 1, 2015, by and among U.S. Concrete Inc., Ferrara Family Holdings, Inc. and the beneficial owners ofFerrara Family Holdings, Inc. named therein. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed onApril 2, 2015 (File No. 001-34530).10.18* —U.S. Concrete, Inc. and Subsidiaries 2015 Annual Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Reporton Form 10-Q dated May 8, 2015 (File No. 001-34530)).10.19* —Amended and Restated Limited Liability Company Agreement of Ferrara Bros., LLC, effective as of April 9, 2015 (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10-Q dated August 6, 2015 (File No. 001-34530)).10.20*+ —Ferrara Bros., LLC Class B Incentive Interests Award Agreement, effective as of April 11, 2015, between Ferrara Bros., LLC and 2G FB LLC(incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q dated August 6, 2015 (File No. 001-34530)).10.21*† —Offer Letter to Ronnie Pruitt, dated October 6, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-Kdated October 23, 2015 (File No. 001-34530)).10.22*† —Executive Severance Agreement, by and between U.S. Concrete, Inc. and Ronnie Pruitt, dated October 26, 2015 (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8-K dated October 23, 2015 (File No. 001-34530)).10.23*† —Indemnification Agreement, by and between U.S. Concrete, Inc. and Ronnie Pruitt, dated October 26, 2015 (incorporated by reference to Exhibit10.3 to the Company’s Current Report on Form 8-K dated October 23, 2015 (File No. 001-34530)).10.24* —Second Amended and Restated Loan and Security Agreement, dated as of November 18, 2015, by and among U.S. Concrete, Inc., certain of itssubsidiaries parties thereto, certain lender parties thereto, and Bank of America, N.A., as agent for the lenders (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8-K dated November 18, 2015 (File No. 001-34530)).109 Table of Contents10.25*† —Offer Letter to Joseph Tusa, dated January 8, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 14, 2016 (File No. 001-34530)).10.26*† —Executive Severance Agreement, by and between U.S. Concrete, Inc. and Joseph C. Tusa, Jr., dated February 1, 2016 (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 1, 2016 (File No. 001-34530)).10.27*† —Indemnification Agreement, dated February 1, 2016, by and between U.S. Concrete, Inc. and Joseph C. Tusa, Jr. (incorporated by referenceto Exhibit 10.2 to the Company’s Current Report on Form 8-K dated February 1, 2016 (File No. 001-34530)).10.28†+ —U.S. Concrete, Inc. and Subsidiaries 2016 Annual Incentive Plan12.1 —Ratio of Earnings to Fixed Charges.21.1 —Subsidiaries.23.1 —Consent of Grant Thornton LLP, independent registered public accounting firm.31.1 —Rule 13a-14(a)/15d-14(a) Certification of William J. Sandbrook.31.2 —Rule 13a-14(a)/15d-14(a) Certification of Joseph C. Tusa, Jr.32.1 —Section 1350 Certification of William J. Sandbrook.32.2 —Section 1350 Certification of Joseph C. Tusa, Jr.95.1 —Mine Safety Disclosure.101.INS —Instance Document101.SCH —XBRL Taxonomy Extension Schema Document101.CAL —XBRL Taxonomy Extension Calculation Linkbase Document101.DEF —XBRL Taxonomy Extension Definition Linkbase Document101.LAB —XBRL Taxonomy Extension Label Linkbase Document101.PRE —XBRL Taxonomy Extension Presentation Linkbase Document* Incorporated by reference to the filing indicated.† Management contract or compensatory plan or arrangement.+ Portions of this exhibit have been omitted pursuant to a request for confidential treatment with the SEC.110 Exhibit 10.28 CONFIDENTIAL TREATMENT: U.S. CONCRETE, INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ASTERISKS, BE AFFORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. U.S. CONCRETE, INC. HAS SEPARATELY FILED THE OMITTED PORTIONS OF THE DOCUMENT WITH THE SECURITIES AND EXCHANGE COMMISSION. 2016 ANNUAL INCENTIVE PLAN Purpose The purpose of the 2016 Annual Incentive Plan (the “Plan”) is to attract, retain, motivate, and reward salaried employees for successful Company, Business Unit and individual performance with awards that are commensurate with the level of performance attained. Eligibility Each salaried employee employed by U. S. Concrete and its 100% owned subsidiary companies will be considered an eligible participant in the Plan. In order to receive any award under this Plan, the employee must be an active employee or on an approved leave of absence at the time of the payment of any bonus award. Employees who leave the Company, either voluntarily or involuntarily, prior to the payment of the bonus award will be ineligible for an award. Salaried employees hired prior to November 1, 2016 will receive a pro-rata share for any award they are eligible to receive under the provisions of the Plan. Employees hired on or after November 1 are ineligible for a 2016 bonus award. In order to receive an award, an Individual Performance Review must be completed by the salaried employee’s supervisor and submitted to Human Resources on or before February 1, 2017. Threshold Performance Level In order for a bonus to be awarded, the overall Company EBITDA performance must be equal to or greater than 80% of budget. The EBITDA performance to budget can be adjusted at the discretion of the Compensation Committee to reflect non-recurringitems, and/or the impact of acquisitions and divestitures. 2016 ANNUAL INCENTIVE PLAN Page 2 In the event that the overall Company EBITDA performance to budget does not exceed 80%, the Compensation Committee may approve the creation of a reduced bonus pool for award to specific individuals and/or Business Units with superior performance. As the Company and Business Unit EBITDA increases, so does the bonus pool dollars and the percent of target bonus payout (Exhibit I). Award Calculation The percent of a target bonus available is determined first by the size of the bonus pool created by the Company’s EBITDA performance to budget, and then by: i. the Company’s EBITDA performance, ii. the Operating Region’s EBITDA performance (if applicable) e.g., South Central Region or the Atlantic Region, iii. the EBITDA performance of a Business Unit within the Region e.g., Redi Mix Concrete and Eastern Concrete Materials, and iv. the individual’s performance relative to specific goals and objectives. The weighting for each of these four performance criteria is as follows: Employees Grade 16 and Above: Criteria Weighting Range U.S. Concrete EBITDA 25%* Operating Region EDITBA 20% Business Unit (if part of an Operating Region) EBITDA 30% Individual Individual Goal Performance 25% Total 100% The criteria weighting established by the Chief Executive Officer for the Vice President/General Manager of each Business Unit must be applied to all plan participants Grade 16 and higher within that Business Unit. Employees Grade 15 and Below: Criteria Weighting Range U.S. Concrete EBITDA 25%* Operating Region EBITDA 15% 2016 ANNUAL INCENTIVE PLAN Page 3 Business Unit (if part of an Operating Region) EBITDA 35% Individual Individual Goal Performance 25% Total 100% The Vice President/General Manager of each Business Unit has the discretion to determine the appropriate criteria weighting, within the above listed ranges, for individual participants in Grade 15 and below. *The bonus award for eligible employees in the Corporate Office will be based 75% on the total U.S. Concrete EBITDA performance. Individual Performance Each employee’s individual performance target bonus is based on their salary grade level and is expressed as a percentage of their annual base pay (see Exhibit II). Employees who are promoted into a higher grade level position prior to June 1, 2015 will have their bonus calculated on the higher target bonus percentage (and base salary if appropriate). The target bonus percentage for employees promoted on or after June 1 will be prorated to reflect the mid-year grade level and salary increase. An employee’s personal performance relative to their annual goals and objectives will be evaluated and based upon the Individual Performance Scale (see Exhibit I.) This scale allows employees with superior goal performance to receive a larger percentage of their target bonus. Bonus Awards All bonus awards are contingent on the approval of the Compensation Committee and Board of Directors and will be paid as soon as administratively feasible after the previous year’s financial results are finalized. An employee may not receive more than 150% of their target bonus other than the CEO whose bonus is capped at 200% of his annual base pay. Plan Administration The Plan shall be administered by the Chief Executive Officer, the Chief Financial Officer, and the Vice President of Human Resources, referred to collectively hereafter as the “Plan Administrators.” The Plan Administrators shall have sole authority to construe and interpret the Plan, to establish, amend, and rescind rules andregulations relating to the Plan, to exercise discretion in interpolating performance levels and award payouts outside of or within designated ranges, and to take all such steps and make all such determinations in connection with the Plan and Bonus Payments granted hereunder as it may deem necessary or advisable, which determination shall be final and binding upon all Participants. Plan Communication A copy of the Plan (including Exhibits) and the performance review form should be distributed to each eligible employee. 2016 ANNUAL INCENTIVE PLAN Page 4 Retirement, Termination, Death and Disability The Plan Administrators may, but are not required to, grant a pro-rated bonus award as it deems advisable to an eligible employee (or beneficiary in the event of death) who terminates employment during 2016 due to retirement, involuntary termination not for cause, or disability. Payment of this pro-rated bonus will be made at the same time payment is made to other participants in accordance with the terms and conditions of this Plan, and may require the participants to sign a waiver and release with the Company. No Right to Continued Employment The Plan shall not create any contractual or other right to receive a bonus award or other benefits in the future. All determinations with respect to any such payments shall be made at the sole discretion of the Plan Administrators. An employee’s participation in the Plan shall not create a right to further employment nor interfere with the ability of the Company to terminate their employment with or without cause. Termination The Plan is in effect for the 2016 calendar year. The Plan Administrators may at any time suspend the operation of or terminate the Plan. /s/ William J. Sandbrook William J. Sandbrook President and CEO U.S. Concrete, Inc. 2016 ANNUAL INCENTIVE PLAN Page 5 Exhibit I USCR Consolidated EBITDA (pre- bonus) EBITDA Achieve as % of Budget Bonus % of EBITDA (pre- bonus) Bonus Payout % of Target Bonus Performance as % of Budget % of Target Bonus Maximum Payout $*** 120% 8.5% $*** 150% 120% 150% $*** 118% 8.3% $*** 145% 118% 145% $*** 116% 8.2% $*** 140% 116% 140% $*** 114% 8.0% $*** 135% 114% 135% $*** 112% 7.9% $*** 130% 112% 130% $*** 110% 7.7% $*** 125% 110% 125% $*** 108% 7.5% $*** 120% 108% 120% $*** 106% 7.4% $*** 115% 106% 115% $*** 104% 7.2% $*** 110% 104% 110% $*** 102% 7.0% $*** 105% 102% 105% 2016 Budget $*** 100% 6.8% $*** 100% 100% 100% $*** 98% 6.4% $*** 93% 98% 93% $*** 96% 6.1% $*** 86% 96% 86% $*** 94% 5.7% $*** 79% 94% 79% $*** 92% 5.3% $*** 72% 92% 72% $*** 90% 4.9% $*** 65% 90% 65% $*** 88% 4.5% $*** 58% 88% 58% $*** 86% 4.0% $*** 51% 86% 51% $*** 84% 3.6% $*** 44% 84% 44% $*** 82% 3.1% $*** 37% 82% 37% 80% of Budget $*** 80% 2.7% $*** 30% 80% 30% *** Proposed 2016 budget *** contingency *** add back stock comp *** add back M&A professional fees *** add back bonuses *** Adjusted budget for bonus purposes 2016 Bonus Scale - U.S. Concrete EBITDA Performance Business Unit and Individual Performance Scale 2016 budget includes a $*** contingency and is before bonus expense of $***, stock comp of $***, and M&A professional and integration fees of $***. Adjusted EBITDA budget and bonus pool includes all acquisitions through 12/31/15. 2016 ANNUAL INCENTIVE PLAN Page 6 Exhibit II 2016 Individual Target Bonus Percentage Chart Grade Level Target 21 100% 20 50-60% 19 45-50% 18 35-45% 17 30% 16 25% 15 20% 14 15% 13 12.50% 12 10% 11 5% 10 5% 9 3% Exhibit 12.1STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (1) (Dollars in millions)(Unaudited) 2015 2014 2013 2012 2011FOR THE YEAR, Earnings: Pretax income (loss) from continuing operations $(4.3) $23.7 $(17.1) $(28.2) $(8.7)Add: Fixed charges 27.5 24.4 15.0 15.9 15.3Earnings adjusted for fixed charges 23.2 48.1 (2.1) (12.3) 6.6 Fixed Charges: Interest expensed and capitalized $19.5 $18.3 $8.6 $7.1 $7.4Amortization of discount and capitalized expenses related to indebtedness 2.2 2.1 2.7 4.2 3.7Estimate of interest within rental expense (2) 5.8 4.0 3.7 4.6 4.2Total Fixed Charges $27.5 $24.4 $15.0 $15.9 $15.3Ratio of Earnings to Fixed Charges (3) 0.8 2.0 — — — (1) Our statement of computation of ratio of earnings to fixed charges should be read in conjunction with our consolidated financial statements and our notes toconsolidated financial statements for matters that affect the comparability of the information presented above. In addition, our results for all periods presentedhave been recast to reflect our Pennsylvania precast operation as discontinued operations, as a result of its reclassification to held for sale during 2014. (2) One-third of rent expense is deemed to be representative of interest. (3) Our earnings were insufficient to cover fixed charges by $8.7 million, $28.2 million, and $17.1 million for the years ended December 31, 2011, 2012 and2013, respectively. Exhibit 21.1The following is a listing of subsidiaries of US Concrete, Inc. as of March 2, 2016 . All are wholly-owned unless otherwise indicated.Entity NameJurisdiction of Incorporation 160 East 22nd Terminal, LLCNew JerseyAggregate & Concrete Test, LLCNew YorkAlberta Investments, Inc.TexasAlliance Haulers, Inc.TexasAmerican Concrete Products, Inc.CaliforniaAtlas Redi-Mix, LLCTexasAtlas-Tuck Concrete, Inc.OklahomaBeall Concrete Enterprises, LLCTexasBeall Industries, Inc.TexasBeall Investment Corporation, Inc.DelawareBeall Management, Inc.TexasBode Concrete LLCCaliforniaBode Gravel Co.CaliforniaBreckenridge Ready Mix, Inc.TexasCentral Concrete Supply Co., Inc.CaliforniaCentral Precast Concrete, Inc.CaliforniaColonial Concrete CompanyNew JerseyConcrete XXXIV Acquisition, Inc.DelawareConcrete XXXV Acquisition, Inc.DelawareConcrete XXXVI Acquisition, Inc.DelawareCustom-Crete, LLCTexasCustom-Crete Redi-Mix, LLCTexasEastern Concrete Materials, Inc.New JerseyFerrara Bros., LLCDelawareFerrara West, LLCNew JerseyHamburg Quarry Limited Liability CompanyNew JerseyHeavy Materials, LLCUSVIIngram Concrete, LLCTexasKurtz Gravel Company, Inc.MichiganLocal Concrete Supply & Equipment, LLCDelawareMaster Mix, LLCDelawareMaster Mix Concrete, LLCNew JerseyMG, LLCMarylandNew York Sand & Stone, LLCNew YorkNYC Concrete Materials, LLCDelawareOutrigger, LLCDelawarePebble Lane Associates, LLCDelawarePremco Organization, Inc.New JerseyRedi-Mix Concrete, L.P.TexasRedi-Mix GP, LLCTexasRedi-Mix, LLCTexasRight Away Redy Mix IncorporatedCaliforniaRiverside Materials, LLCDelawareRock Transport, Inc.CaliforniaSan Diego Precast Concrete, Inc.Delaware Sierra Precast, Inc.CaliforniaSmith Pre-Cast, Inc.DelawareSpartan Products, LLCUSVISuperior Concrete Materials, Inc.District of ColumbiaTitan Concrete Industries, Inc.DelawareUSC Atlantic, Inc.DelawareUSC Management Co., LLCDelawareUSC Payroll, Inc.DelawareUSC Technologies, Inc.DelawareU.S. Concrete On-Site, Inc.DelawareU.S. Concrete Texas Holdings, Inc.DelawareYardarm, LLCDelaware Exhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe have issued our reports dated March 4, 2016 , with respect to the consolidated financial statements and internal control overfinancial reporting included in the Annual Report of U.S. Concrete, Inc. and Subsidiaries on Form 10-K for the year endedDecember 31, 2015 . We hereby consent to the incorporation by reference of said reports in the Registration Statements of U.S.Concrete, Inc. and Subsidiaries on Form S-8 (File Nos. 333-188621 and 333-187989) and on Form S-3 (File No. 333-198829)./s/ GRANT THORNTON LLPDallas, TexasMarch 4, 2016 Exhibit 31.1CERTIFICATIONSI, William J. Sandbrook, certify that: 1. I have reviewed this annual report on Form 10-K of U.S. Concrete, Inc. for the year ended December 31, 2015 ; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: March 4, 2016By:/s/ William J. Sandbrook William J. Sandbrook President and Chief Executive Officer Exhibit 31.2CERTIFICATIONSI, Joseph C. Tusa, Jr., certify that: 1. I have reviewed this annual report on Form 10-K of U.S. Concrete, Inc. for the year ended December 31, 2015 ; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. Date: March 4, 2016By:/s/ Joseph C. Tusa, Jr. Joseph C. Tusa, Jr. Senior Vice President and Chief Financial Officer Exhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TO SECTION 906OF THE SARBANES-OXLEY ACT OF 2002 In connection with the annual report of U.S. Concrete, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2015 (the “Report”), as filed withthe Securities and Exchange Commission on the date hereof, I, William J. Sandbrook, President and Chief Executive Officer of the Company, certify, pursuant to18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that: 1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 4, 2016By:/s/ William J. Sandbrook William J. Sandbrook President and Chief Executive Officer Exhibit 32.2CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TO SECTION 906OF THE SARBANES-OXLEY ACT OF 2002 In connection with the annual report of U.S. Concrete, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2015 (the “Report”), as filed withthe Securities and Exchange Commission on the date hereof, I, Joseph C. Tusa, Jr., Senior Vice President and Chief Financial Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that: 1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 4, 2016By:/s/ Joseph C. Tusa, Jr. Joseph C. Tusa, Jr. Senior Vice President and Chief Financial Officer Exhibit 95.1Section 1503. Mine Safety DisclosuresOn July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Act, was enacted. Section 1503 of the Act contains reportingrequirements regarding mine safety. We are committed to providing a safe workplace for all of our employees, including those working at our quarries. Theoperation of our quarries is subject to regulation by the federal Mine Safety and Health Administration, or MSHA, under the Federal Mine Safety and Health Actof 1977, or the Mine Act. MSHA inspects our quarries on a regular basis and issues various citations and orders when it believes a violation has occurred under theMine Act. Below, we have included information regarding certain mining safety and health citations that MSHA has issued with respect to our quarry operationsfor the year ended December 31, 2015 . In evaluating this information, consideration should be given to factors such as: (i) the number of citations and orders willvary depending on the size of the quarry, (ii) the number of citations issued will vary from inspector-to-inspector and mine-to-mine, and (iii) citations and orderscan be contested and appealed, and in that process, may be reduced in severity and amount, and are sometimes dismissed.The table below includes references to specific sections of the Mine Act. We are providing the information in the table by mine as that is how we manage andoperate our business. (H) (A)(B)(C)(D)(E)(F)(G)Pending SectionSectionSectionSectionSectionProposed LegalMine Name/ID104 S&S104(b)104(d)110(b)(2)107(a)AssessmentsFatalitiesAction Robert Lee Quarry / 4102617———————— Cox Bend Quarry / 4102977———————— Bronte Quarry / 4104210———————— Waurika Quarry / 3400362———————— Vernon Quarry / 3401820———————— Red River Quarry / 34019451————362—— Chatfield Plant / 4104209———————— Hamburg Quarry / 28000111————100—— Glen Gardner Quarry / 28000093————977—— Cedar Bridge Quarry / 28007171————108—— Wantage Quarry / 28010351————Not yet assessed—— Springfield Quarry / 5500002———————— Brookman Quarry / 55000082————724—— (A) The total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coalor other mine safety or health hazard under section 104 of the Mine Safety and Health Act of 1977 (30 U.S.C. 814) for which the operator received acitation from the Mine Safety and Health Administration.(B) The total number of orders issued under section 104(b) of such Act (30 U.S.C. 814(b)).(C) The total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under section104(d) of such Act (30 U.S.C. 814(d)).(D) The total number of flagrant violations under section 110(b)(2) of such Act (30 U.S.C. 820(b)(2)).(E) The total number of imminent danger orders issued under section 107(a) of such Act (30 U.S.C. 817(a)).(F) The total dollar value of proposed assessments from the Mine Safety and Health Administration under such Act (30 U.S.C. 801 et seq.).(G) The total number of mining-related fatalities.(H) Any pending legal action before the Federal Mine Safety and Health Review Commission involving such coal or other mine.
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