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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Quarterly Period Ended June 30, 2020
 
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________.

Commission File Number: 001-34530
https://cdn.kscope.io/d973823bef0ab2d0f43e31957e013451-uscr-20200630_g1.jpg
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)

Address of principal executive offices, including zip code: 331 N. Main Street, Euless, Texas 76039
Registrant’s telephone number, including area code: (817) 835-4105

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolName of each exchange on which registered
Common Stock, par value $0.001USCRThe Nasdaq Stock Market LLC


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
 
There were 16,671,809 shares of common stock, par value $0.001 per share, of the registrant outstanding as of July 25, 2020.



INDEX
  Page No.
Part I – Financial Information 
Item 1.Financial Statements (Unaudited) 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
Part II – Other Information 
Item 1.
Item 1A.
Item 2.
Item 4.
Item 6.
   


i


PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
June 30, 2020December 31, 2019
ASSETS(Unaudited) 
Current assets:  
Cash and cash equivalents $17.5  $40.6  
Trade accounts receivable, net of allowances of $7.1 as of June 30, 2020 and $4.0 as of December 31, 2019
204.7  233.1  
Inventories 65.2  59.0  
Other receivables, net13.1  8.4  
Prepaid expenses and other6.5  7.9  
Total current assets 307.0  349.0  
Property, plant and equipment, net of accumulated depreciation, depletion and amortization of $325.3 as of June 30, 2020 and $289.9 as of December 31, 2019
794.1  673.5  
Operating lease assets70.3  69.8  
Goodwill239.5  239.5  
Intangible assets, net81.9  92.4  
Other assets 11.7  9.1  
Total assets $1,504.5  $1,433.3  
LIABILITIES AND EQUITY  
Current liabilities:  
Accounts payable $127.2  $136.4  
Accrued liabilities 75.1  63.5  
Current maturities of long-term debt 34.1  32.5  
Current operating lease liabilities13.7  12.9  
Total current liabilities 250.1  245.3  
Long-term debt, net of current maturities 724.8  654.8  
Long-term operating lease liabilities59.8  59.7  
Other long-term obligations and deferred credits 38.5  49.1  
Deferred income taxes 56.4  54.8  
Total liabilities 1,129.6  1,063.7  
Commitments and contingencies (Note 14)
Equity:  
Additional paid-in capital 358.4  348.9  
Retained earnings 31.3  31.1  
Treasury stock, at cost (37.9) (36.6) 
Total shareholders' equity351.8  343.4  
Non-controlling interest23.1  26.2  
Total equity374.9  369.6  
Total liabilities and equity $1,504.5  $1,433.3  
The accompanying notes are an integral part of these condensed consolidated financial statements.
1


U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions except per share amounts)
(Unaudited)
 
Three Months Ended
June 30,
Six Months Ended
June 30,
2020201920202019
Revenue$322.7  $367.5  $657.1  $700.6  
Cost of goods sold before depreciation, depletion and amortization250.1  296.8  524.0  565.2  
Selling, general and administrative expenses31.7  39.2  65.4  71.3  
Depreciation, depletion and amortization25.2  25.1  48.6  47.9  
Change in value of contingent consideration(5.8) 0.3  (5.5) 1.3  
Loss (gain) on sale/disposal of assets, net(0.1) 0.1  (0.1) 1.0  
Operating income 21.6  6.0  24.7  13.9  
Interest expense, net11.4  11.6  22.8  23.2  
Other income, net(0.6) (7.2) (1.2) (7.6) 
Income (loss) before income taxes10.8  1.6  3.1  (1.7) 
Income tax expense (benefit)4.3  0.7  (0.6)   
Net income (loss)6.5  0.9  3.7  (1.7) 
Less: Net income (loss) attributable to non-controlling interest(0.1) 0.2  0.2  0.3  
Net income (loss) attributable to U.S. Concrete$6.6  $0.7  $3.5  $(2.0) 
Earnings (loss) per share attributable to U.S. Concrete:    
Basic $0.39  $0.04  $0.21  $(0.12) 
Diluted $0.39  $0.04  $0.21  $(0.12) 
Weighted average shares outstanding:    
Basic16.6  16.4  16.6  16.4  
Diluted16.6  16.4  16.6  16.4  

The accompanying notes are an integral part of these condensed consolidated financial statements.
2


U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF TOTAL EQUITY
(in millions)
(Unaudited)
 
# of Common SharesAdditional
Paid-In
Capital
Retained Earnings Treasury
Stock
Total
Shareholders'
Equity
Non-controlling InterestTotal Equity
December 31, 201816.6  $329.6  $16.2  $(33.4) $312.4  $24.8  $337.2  
Stock-based compensation—  1.7  —  (1.1) 0.6  —  0.6  
Stock options exercised—  0.2  —  —  0.2  —  0.2  
Net income (loss)—  —  (2.7) —  (2.7) 0.1  (2.6) 
March 31, 201916.6  331.5  13.5  (34.5) 310.5  24.9  335.4  
Stock-based compensation—  9.4  —  (1.1) 8.3  —  8.3  
Restricted stock vesting0.1  —  —  —  —  —    
Net income—  —  0.7  —  0.7  0.2  0.9  
June 30, 201916.7  $340.9  $14.2  $(35.6) $319.5  $25.1  $344.6  
December 31, 201916.7  $348.9  $31.1  $(36.6) $343.4  $26.2  $369.6  
Cumulative-effect adjustment upon adoption of ASC 326, net of taxes (Note 2)
—  —  (3.3) —  (3.3) —  (3.3) 
Transfer of non-controlling interest (Note 9)
—  3.3  —  —  3.3  (3.3)   
Stock-based compensation—  3.7  —  (1.1) 2.6  —  2.6  
Net income (loss)—  —  (3.1) —  (3.1) 0.3  (2.8) 
March 31, 202016.7  355.9  24.7  (37.7) 342.9  23.2  366.1  
Stock-based compensation—  2.5  —  (0.2) 2.3  —  2.3  
Net income (loss)—  —  6.6  —  6.6  (0.1) 6.5  
June 30, 202016.7  $358.4  $31.3  $(37.9) $351.8  $23.1  $374.9  
The accompanying notes are an integral part of these condensed consolidated financial statements.


3


U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Six Months Ended
June 30,
 20202019
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income (loss)$3.7  $(1.7) 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation, depletion and amortization48.6  47.9  
Amortization of debt issuance costs 1.0  0.9  
Change in value of contingent consideration(5.5) 1.3  
Loss (gain) on sale/disposal of assets, net(0.1) 1.0  
Gains from eminent domain matter and property insurance claims  (6.0) 
Deferred income taxes2.6  2.5  
Provision for doubtful accounts and customer disputes1.0  1.3  
Stock-based compensation6.2  11.1  
Other, net(0.8) (0.6) 
Changes in assets and liabilities, excluding effects of acquisitions:  
Accounts receivable24.9  (13.1) 
Inventories1.7  (1.6) 
Prepaid expenses and other current assets(3.0) (4.6) 
Other assets and liabilities2.7  (0.7) 
Accounts payable and accrued liabilities1.1  2.9  
Net cash provided by operating activities84.1  40.6  
CASH FLOWS FROM INVESTING ACTIVITIES:  
Purchases of property, plant and equipment(14.2) (18.1) 
Payment for acquisition of business(140.2)   
Proceeds from sale of businesses and property, plant and equipment0.3  0.7  
Proceeds from eminent domain matter and property insurance claims  6.0  
Net cash used in investing activities(154.1) (11.4) 
CASH FLOWS FROM FINANCING ACTIVITIES:  
Proceeds from revolver borrowings260.8  163.3  
Repayments of revolver borrowings(204.3) (157.8) 
Proceeds from stock option exercises  0.2  
Payments of other long-term obligations(9.9) (11.6) 
Payments for finance leases, promissory notes and other(10.8) (16.2) 
Proceeds from finance lease and other14.5    
Debt issuance costs(2.2)   
Shares redeemed for employee income tax obligations(1.2) (2.2) 
Net cash provided by (used in) financing activities46.9  (24.3) 
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS  (0.1) 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS(23.1) 4.8  
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD40.6  20.0  
CASH AND CASH EQUIVALENTS AT END OF PERIOD$17.5  $24.8  
4


U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in millions)
(Unaudited)
Six Months Ended
June 30,
20202019
Supplemental Disclosure of Cash Flow Information:  
Net cash paid for interest$22.6  $22.6  
Net cash paid for (refund from) income taxes$(0.1) $0.6  
Supplemental Disclosure of Non-cash Investing and Financing Activities:
Capital expenditures funded by finance leases and promissory notes$13.7  $13.0  
Acquisitions funded by deferred consideration$1.7  $  
Transfer of non-controlling interest$3.3  $  

There were approximately $0.6 million of accounts payable owed by the Company that were effectively settled as part of the Coram Acquisition, as defined in Note 3 to these condensed consolidated financial statements, which were eliminated in consolidation in 2020.

The accompanying notes are an integral part of these condensed consolidated financial statements.
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U.S. CONCRETE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements include the accounts of U.S. Concrete, Inc. and its subsidiaries (collectively, "we," "us," "our," the "Company," or "U.S. Concrete") and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for reporting interim financial information. Some information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") have been condensed or omitted pursuant to the SEC’s rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 31, 2019 (the "2019 10-K"). In the opinion of our management, all material adjustments necessary to state fairly the information in our unaudited condensed consolidated financial statements have been included. All adjustments are of a normal, recurring nature. All amounts are presented in United States dollars, unless otherwise noted. Certain computations may be impacted by the effect of rounding in this report. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year due to the impact of the coronavirus ("COVID-19") pandemic, weather patterns, and general economic conditions in our markets. Certain reclassifications have been made to prior year amounts to conform with the current year presentation.

The preparation of financial statements and accompanying notes in conformity with U.S. GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates on the information available at the time, our experiences and various other assumptions believed to be reasonable under the circumstances, including estimates of the impact of the COVID-19 pandemic. Actual results could differ from those estimates, including the impact of the COVID-19 pandemic. Estimates and assumptions that we consider significant in the preparation of our financial statements include those related to our business combinations, goodwill, intangibles, accruals for self-insurance, income taxes, valuation of contingent consideration, allowance for doubtful accounts, the valuation of inventory and the valuation and useful lives of property, plant and equipment.

2. SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies, including a description of our business combination valuation methodologies, are included in Note 1 to the consolidated financial statements in our 2019 10-K. The policies that follow primarily represent updates to certain of our policies or disclosures since January 1, 2020.

Credit Losses. Effective January 1, 2020, we adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification 326, "Current Expected Credit Losses" ("ASC 326"). While the prior accounting rules used a model of incurred losses to estimate credit losses on certain types of financial instruments, including trade accounts receivable, ASC 326 requires entities to use a forward-looking approach based on expected losses, which may result in the earlier recognition of allowances for losses. We applied the new credit loss model on a prospective basis and recorded a cumulative-effect adjustment, net of taxes, of $3.3 million to opening retained earnings for the increase to the allowance for doubtful accounts. With the adoption of ASC 326, we amended our accounting policy for accounts receivable, which follows.

Accounts receivable consist primarily of receivables from contracts with customers for the sale of ready-mixed concrete, aggregates and other products.  Accounts receivable initially are recorded at the transaction amount.  We utilize liens or other legal remedies in our collection efforts of certain accounts receivable.  Each reporting period, we evaluate the collectability of the receivables and record an allowance for doubtful accounts and customer disputes for our estimated losses on balances that may not be collected in full, which reduces the accounts receivable balance.  Additions to the allowance result from a provision for bad debt expense that is recorded to selling, general and administrative expenses.  A provision for customer disputes recorded as a reduction to revenue also increases the allowance.  Accounts receivable are written off if and when we determine the receivable will not be collected and are reflected as a reduction to the allowance.

We determine the amount of bad debt expense and customer dispute losses each reporting period and the resulting adequacy of the allowance at the end of each reporting period by using a combination of historical loss experience, customer-by-customer analysis, and subjective assessments of our loss exposure. For accounts receivable balances as of and prior to December 31, 2019, our estimate of allowance for doubtful accounts was based on our estimated probable losses. Beginning
6


U.S. CONCRETE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 1, 2020, upon our adoption of ASC 326, our allowance for doubtful accounts is based on our estimated expected losses, and the underlying evaluations include analysis of forward-looking information, including economic conditions.

Fair Value Measurements. As of January 1, 2020, we adopted a FASB update to disclosure requirements for fair value measurement, which removed, modified and added certain disclosure requirements related to fair value measurements covered in Topic 820, "Fair Value Measurement." The adoption of this update did not have a material impact on the consolidated financial statements. See Note 10 for additional information.

Subsidiary Guarantees. In March 2020, the SEC adopted amendments to the financial disclosure requirements applicable to registered debt offerings that include credit enhancements, such as subsidiary guarantees, in Rule 3-10 of Regulation S-X. The amended rule focuses on providing material, relevant and decision-useful information regarding guarantees and other credit enhancements, while eliminating certain prescriptive requirements. The Company adopted these amendments as of March 31, 2020. Accordingly, combined summarized financial information has been presented only for the issuers and guarantors of our registered securities for the most recent fiscal year and the year-to-date interim period, and the required disclosures have been moved from the notes to these condensed consolidated financial statements to Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Leases. During the quarter ended June 30, 2020, we entered into agreements to defer $6.2 million of finance lease payments to mitigate the cash flow impact from the COVID-19 pandemic. In April 2020, the FASB issued interpretive guidance providing companies with the option to elect to account for lease concessions related to the effects of the COVID-19 pandemic as though the enforceable rights and obligations existed in the original lease. Entities may make the elections as long as the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee.

For concessions that provide a deferral of payments with no substantive changes to the consideration in the original contract, we can evaluate whether to account for these concessions (i) as if there were no changes made to the lease agreement and accordingly, continue to recognize expense and increase accounts payable, (ii) as a resolution of a contingency that fixes previously variable lease payments and remeasure the lease liability without reconsideration of the lease classification, or (iii) as negative variable lease payments and accordingly, negative lease expense. We elected to account for the lease payment deferrals as a resolution of a contingency that fixes previously variable lease payments and remeasure the lease obligations, with no reconsideration of lease classification during the quarter ended June 30, 2020. Given the nature of the lease concessions and our election, there was no material impact to our total finance lease liability other than a $1.5 million reclassification from current to long-term liabilities in the accompanying condensed consolidated balance sheet as of June 30, 2020.

Debt. During the quarter ended June 30, 2020, we entered into agreements to defer $2.2 million of promissory note payments to mitigate the cash flow impact from the COVID-19 pandemic. The promissory note deferrals resulted in changes to the effective interest rates of these agreements.

3. BUSINESS COMBINATION

On February 24, 2020, we acquired all of the equity of Coram Materials Corp. and certain of its affiliates (collectively, "Coram Materials"). Coram Materials is a sand and gravel products provider located on Long Island in New York. This acquisition increased the vertical integration of our New York City operations.

The acquisition of all of the equity of Coram Materials (the "Coram Acquisition") was accounted for as a business combination. We funded the initial cash purchase consideration through borrowings under our Revolving Facility (as defined in Note 7). The combined assets acquired through the Coram Acquisition included an aggregates facility with 330 acres of land, including 180 mining acres containing approximately 41.9 million tons of in-place, proven and permitted aggregate reserves and approximately 7.5 million tons of in-place, proven, but unpermitted reserves. To effect this transaction, we incurred $0.6 million of transaction costs, which were included in selling and general administrative expenses in our condensed consolidated statements of operations for the six months ended June 30, 2020.

Our accounting for the Coram Acquisition is preliminary. We expect to record adjustments as we accumulate information needed to estimate the fair value of assets acquired and liabilities assumed, including working capital and property, plant, and equipment. The fair value of acquired receivables, inventory, machinery and equipment, land and buildings are based on inputs derived principally from, or corroborated by, observable market data (i.e., Level 2 inputs). The fair value of machinery and
7


U.S. CONCRETE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
equipment, land and buildings was based on a market valuation approach or a cost valuation approach when a market valuation approach was unavailable. The estimates used for determining the fair value of the mineral reserves were unobservable and significant to the overall measurement (i.e., Level 3 inputs). The fair value of the mineral reserves was determined using an excess earnings approach, which required management to estimate future cash flows, net of capital investments in the specific operation. Management’s cash flow projections involved the use of significant estimates and assumptions with respect to the expected production of the aggregate facility over the estimated time period, sales prices, shipment volumes, and expected profit margins. The present value of the projected net cash flows represents the preliminary fair value assigned to mineral reserves. The discount rate is a significant assumption used in the valuation model.

The total consideration for the Coram Acquisition and the amounts related to the assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date were as follows:
($ in millions)Coram Materials
Accounts receivable$2.0  
Inventory10.0  
Other current assets0.3  
Property, plant and equipment130.9  
Total assets acquired143.2  
Current liabilities0.1  
Other long-term liabilities0.2  
Total liabilities assumed0.3  
Total consideration (fair value)(1)
$142.9  

(1) Included $140.2 million in cash, present value deferred consideration of $1.7 million, and a trade working capital payable of $1.6 million, less a $0.6 million settlement of accounts payable owed by the Company to Coram Materials at the acquisition date. The total amount of deferred consideration is $2.0 million, which is payable over two years.

Impact of Coram Acquisition

During the three months ended June 30, 2020, the Coram Materials business generated revenue of $7.0 million, including intersegment sales of $2.7 million, and generated operating income of $1.3 million. During the period from the acquisition date to June 30, 2020, the Coram Materials business generated revenue of $9.6 million, including intersegment sales of $3.7 million, and generated operating income of $1.1 million. The results of this acquired business are included in our aggregate products segment.

The unaudited pro forma consolidated financial results shown below represent our estimate of the Company's results of operations as if the Coram Acquisition had been completed on January 1, 2019.
Three Months Ended
June 30,
Six Months Ended
June 30,
($ in millions except per share)2020201920202019
Revenue$322.7  $372.5  $659.2  $709.5  
Net income (loss) attributable to U.S. Concrete$9.3  $0.8  $7.7  $(1.8) 
Net income (loss) per share attributable to U.S. Concrete - basic$0.56  $0.05  $0.46  $(0.11) 
Net income (loss) per share attributable to U.S. Concrete - diluted$0.56  $0.05  $0.46  $(0.11) 

The 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 Coram Materials, based on data provided by the former owners. These results are not necessarily indicative of what the Company's actual results would have been had the Coram Acquisition occurred on January 1, 2019 and do not reflect any operational efficiencies or potential cost savings that may occur as a result of the consolidation of these operations.
8


U.S. CONCRETE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The unaudited pro forma amounts above reflect the following adjustments:
Three Months Ended
June 30,
Six Months Ended
June 30,
($ in millions)2020201920202019
Decrease (increase) in cost of goods sold related to fair value increase in inventory$2.6  $(1.3) $4.2  $(2.1) 
Decrease (increase) in depreciation, depletion and amortization expense  (1.5) (0.9) (2.5) 
Exclusion of buyer transaction costs0.1    0.6    
Exclusion of seller transaction costs    0.3    
Increase in interest expense  (1.7) (0.8) (2.7) 
Increase in income tax expense  (0.4) (1.1) (0.6) 

4. ALLOWANCE FOR DOUBTFUL ACCOUNTS AND CUSTOMER DISPUTES
 
($ in millions)
Balance, December 31, 2019$4.0  
Cumulative effect of the adoption of ASC 3264.5  
Balance, January 1, 20208.5  
Provision for doubtful accounts and customer disputes1.0  
Uncollectible receivables written off, net of recoveries(1.9) 
Other adjustments(0.5) 
Balance, June 30, 2020$7.1  


5. INVENTORIES
 
($ in millions)June 30, 2020December 31, 2019
Raw materials$59.7  
(1)
$53.4  
Building materials for resale3.6  3.6  
Other1.9  2.0  
Total$65.2  $59.0  

(1) Excludes $2.1 million of inventory that was classified as long-term because it was not expected to be sold in the next 12 months.

6.    GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill
        
We perform our annual goodwill impairment testing in the fourth quarter of each year. In addition to the annual impairment test, we are required to regularly assess whether a triggering event has occurred that would require interim impairment testing. We determined that the significant decline in the overall financial markets, including U.S. Concrete's market capitalization, as a result of the COVID-19 pandemic, qualified as a triggering event that warranted further analysis to determine if there was an impairment loss as of March 31, 2020. As allowed, we elected to perform a qualitative assessment for our reporting units to assess whether it was more likely than not that the goodwill was impaired as of March 31, 2020. Considering the existing excess fair value identified in our 2019 impairment assessment, our qualitative assessment included a review of our previous forecasts, assumptions and analyses in light of more current information such as: (1) projected revenues, expenses and cash flows, including the expected duration and extent of impact to our business and our customers from the
9


U.S. CONCRETE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
COVID-19 pandemic; (2) current discount rates; (3) the reduction in our market capitalization; and (4) changes to the regulatory environment. Based on the qualitative assessment, we determined that it was more likely than not that the goodwill was not impaired. As a result, no quantitative assessment was necessary. Based on an improvement of financial market conditions and the Company's market capitalization, we determined that no further interim asset impairment testing was needed as of June 30, 2020.

The goodwill balance was as follows:
($ in millions)June 30, 2020December 31, 2019
Goodwill, gross$245.3  $245.3  
Accumulated impairment(5.8) (5.8) 
Goodwill, net$239.5  $239.5  

Goodwill by reportable segment was as follows:
($ in millions)June 30, 2020December 31, 2019
Ready-mixed concrete$150.0  $150.0  
Aggregate products 86.2  86.2  
Other non-reportable segments3.3  3.3  
Goodwill, net$239.5  $239.5  

Other Intangible Assets
June 30, 2020
($ in millions)GrossAccumulated AmortizationNetWeighted Average Remaining Life
(In Years)
Definite-lived intangible assets
Customer relationships$108.5  $(67.4) $41.1  3.5
Trade names44.5  (14.5) 30.0  18.7
Non-competes18.3  (16.1) 2.2  2.2
Leasehold interests12.5  (7.6) 4.9  5.2
Environmental credits2.8  (0.3) 2.5  15.5
Total definite-lived intangible assets186.6  (105.9) 80.7  9.6
Indefinite-lived intangible assets
Land rights(1)
1.2  —  1.2  
Total purchased intangible assets$187.8  $(105.9) $81.9  
10


U.S. CONCRETE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019
($ in millions)GrossAccumulated AmortizationNetWeighted Average Remaining Life
(In Years)
Definite-lived intangible assets
Customer relationships$108.5  $(59.7) $48.8  3.9
Trade names44.5  (13.6) 30.9  19.1
Non-competes18.3  (15.3) 3.0  2.4
Leasehold interests12.5  (6.7) 5.8  5.4
Favorable contracts4.0  (3.9) 0.1  0.9
Environmental credits2.8  (0.2) 2.6  16.0
Total definite-lived intangible assets190.6  (99.4) 91.2  9.4
Indefinite-lived intangible assets
Land rights(1)
1.2  —  1.2  
Total purchased intangible assets$191.8  $(99.4) $92.4  

(1) Land rights will be reclassified to property, plant, and equipment upon the division of certain shared properties and settlement of the associated deferred payment.

As of June 30, 2020, the estimated remaining amortization of our definite-lived intangible assets was as follows (in millions):
2020 (remainder of the year)$10.4  
202118.6