Overview and Summary of Significant Accounting Policies |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Overview and Summary of Significant Accounting Policies | Overview and Summary of Significant Accounting Policies Basis of Presentation Arcosa, Inc. and its consolidated subsidiaries (“Arcosa,” the “Company,” “we,” or “our”), headquartered in Dallas, Texas, is a provider of infrastructure-related products and solutions with leading positions in construction materials and engineered structures markets in North America. Arcosa is a Delaware corporation and was incorporated in 2018. On April 1, 2026, the Company completed the previously announced sale of its barge business, which was the only business included in the Transportation Products segment. We have concluded that the sale represented a strategic shift with a major effect on the Company's operations and financial results. Accordingly, the results of operations and cash flows for the three and six months ended June 30, 2026 have been classified as discontinued operations. Results of prior periods have been recast to reflect these changes and present results on a comparable basis. Since there are no remaining operations, the Transportation Products segment is no longer presented as a reportable segment. Unless indicated otherwise, the information in the Notes to the Consolidated Financial Statements relates to the Company's continuing operations. See further discussion in Note 2. "Acquisitions and Divestitures." The accompanying Consolidated Financial Statements are unaudited and have been prepared from the books and records of Arcosa, Inc. and its consolidated subsidiaries. All normal and recurring adjustments necessary for a fair presentation of the financial position of the Company and the results of operations, comprehensive income/loss, and cash flows have been made in conformity with accounting principles generally accepted in the U.S. (“GAAP”). All significant intercompany accounts and transactions have been eliminated. Because of seasonal and other factors, the financial condition and results of operations for the three and six months ended June 30, 2026 may not be indicative of Arcosa's expected business, financial condition, and results of operations for the year ending December 31, 2026. These interim financial statements and notes are condensed as permitted by the instructions to Form 10-Q and should be read in conjunction with the audited Consolidated Financial Statements of the Company included in its Annual Report on Form 10-K for the year ended December 31, 2025. Merger Agreement On June 21, 2026, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, CRH Americas, Inc., a Delaware corporation ("CRH"), and Neon Merger Sub, Inc., a Delaware Corporation and a wholly owned subsidiary of CRH ("Merger Sub"). Pursuant to the Merger Agreement, and subject to the terms and conditions set forth therein, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of CRH. Per the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger ("Effective Time"), each share of Company common stock, par value $0.01 per share, issued and outstanding immediately prior to the Effective Time will be automatically converted into the right to receive $150.00 in cash, without interest and subject to applicable withholding taxes (the “Merger Consideration”). Pursuant to the Merger Agreement, at the Effective Time, outstanding restricted stock and restricted stock unit awards granted prior to the date of the Merger Agreement will become vested and be settled for cash, without interest, in an amount equal to the Merger Consideration, payable per share, plus any accrued and unpaid dividend equivalents, less applicable withholding taxes. The number of shares of Company common stock subject to outstanding performance-based awards will be settled based on the greater of target performance or actual performance achieved prior to the Effective Time, as determined by the Company's Board of Directors (the "Board") (or an appropriate committee of the Board). The consummation of the Merger is subject to the satisfaction or waiver of customary closing conditions, set forth in the Merger Agreement, including, among other things: (i) the approval of the holders of a majority of the voting power represented by the outstanding shares of Company common stock entitled to vote thereon (the “Company Stockholder Approval”); (ii) the absence of any law, injunction or order (whether temporary, preliminary or permanent) by any governmental entity that has the effect of restraining, enjoining or otherwise prohibiting the Merger; (iii) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and; the receipt or waiver of specified regulatory approvals in the required jurisdictions outside the United States; (iv) other customary conditions specified in the Merger Agreement, including (a) each party’s representations and warranties being true and correct, subject to certain customary qualifications, (b) each party’s compliance with or performance of, in all material respects, its obligations under the Merger Agreement and (c) the absence of a material adverse effect with respect to the Company. The transaction is not subject to financing conditions. Subject to such conditions, the Company expects to consummate the Merger in the first quarter of 2027. The Merger Agreement contains certain termination rights for both the Company and CRH, including, among others, the right of (i) either party to terminate the Merger Agreement if the Merger is not consummated by June 21, 2027 (subject to up to a six month extension if certain closing conditions have not been satisfied or waived), (ii) the Company, prior to receiving the Company Stockholder Approval, to terminate the Merger Agreement in order to enter into a definitive acquisition agreement providing for a Superior Proposal (as defined in the Merger Agreement) and (iii) CRH, prior to receiving the Company Stockholder Approval, to terminate the Merger Agreement if a Change in Recommendation has occurred (as defined in the Merger Agreement). The Merger Agreement provides for the payment of termination fees under specified circumstances. Under certain circumstances, CRH may be required to pay the Company a termination fee of approximately $372.0 million, and the Company may be required to pay CRH a termination fee of approximately $260.4 million. The Company has incurred and will incur certain costs relating to the proposed Merger, such as financial advisory, legal, and other professional service fees. Stockholders' Equity In December 2024, the Board authorized a $50.0 million share repurchase program effective January 1, 2025 through December 31, 2026 to replace an expiring program of the same amount. During the three months ended June 30, 2026, the Company did not repurchase any shares. During the six months ended June 30, 2026, the Company repurchased 159,595 shares at a cost of $17.5 million. As of June 30, 2026, the Company has approximately $32.5 million available for share repurchases under the current program. Revenue Recognition Revenue is measured based on the allocation of the transaction price in a contract to satisfied performance obligations. The transaction price does not include any amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The following is a description of principal activities from which the Company generates its revenue, separated by reportable segments. Payments for our products and services are generally due within normal commercial terms. For a further discussion regarding the Company’s reportable segments, see Note 4. "Segment Information". Construction Products The Construction Products segment primarily recognizes revenue when the customer has accepted the product and legal title of the product has passed to the customer. Engineered Structures Within the Engineered Structures segment, revenue is recognized for wind towers and certain utility structures over time as the products are manufactured using an input approach based on the costs incurred relative to the total estimated costs of production. We recognize revenue over time for these products as they are highly customized to the needs of an individual customer resulting in no alternative use to the Company if not purchased by the customer after the contract is executed. In addition, we have the right to bill the customer for our work performed to date plus at least a reasonable profit margin for work performed. As of June 30, 2026, we had a contract asset of $93.7 million related to these contracts, compared to $65.1 million as of December 31, 2025, which is included in receivables, net of allowance, within the Consolidated Balance Sheets. The increase in the contract asset is attributed to higher volumes and the timing of deliveries of finished structures to customers during the period. For all other products, revenue is recognized when the customer has accepted the product and legal title of the product has passed to the customer. Revenues Total revenues for the Company's reportable segments are presented below:
Unsatisfied Performance Obligations The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially satisfied as of June 30, 2026:
For our utility and related structures business, 71% of the unsatisfied performance obligations are expected to be recognized during 2026, 20% are expected to be recognized in 2027, with the remainder expected to be recognized through 2029. For our wind towers business, 28% of the unsatisfied performance obligations are expected to be recognized during 2026, 66% are expected to be recognized in 2027, with the remainder expected to be recognized in 2028. Advance Billings Advance billings represent cash collected from customers prior to the satisfaction of the related performance obligations and are separately presented on the Consolidated Balance Sheets. For the three and six months ended June 30, 2026, the Company recognized as revenue approximately $8.8 million and $16.1 million, respectively, of the advance billings balance outstanding at the beginning of the year. For the three and six months ended June 30, 2025, the Company recognized as revenue approximately $23.1 million and $69.8 million, respectively, of the advance billings balance outstanding at the beginning of the year. Income Taxes The liability method is used to account for income taxes. Deferred income taxes represent the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized. The Company regularly evaluates the likelihood of realization of tax benefits derived from positions it has taken in various federal and state filings after consideration of all relevant facts, circumstances, and available information. For those tax positions that are deemed more likely than not to be sustained, the Company recognizes the benefit it believes is cumulatively greater than 50% likely to be realized. To the extent the Company were to prevail in matters for which accruals have been established or be required to pay amounts in excess of recorded reserves, the effective tax rate in a given financial statement period could be materially impacted. Financial Instruments The Company considers all highly liquid debt instruments to be cash and cash equivalents if purchased with a maturity of three months or less. Financial instruments that potentially subject the Company to a concentration of credit risk are primarily cash investments and receivables. The Company places its cash investments in bank deposits and highly-rated money market funds, and its investment policy limits the amount of credit exposure to any one commercial issuer. We seek to limit concentration of credit risk with respect to the Company's receivables with control procedures that monitor the credit worthiness of customers, together with the large number of customers in the Company's customer base and their dispersion across different industries and geographic areas. As receivables are generally unsecured, the Company maintains an allowance based upon the expected credit losses. Receivable balances determined to be uncollectible are charged against the allowance. To accelerate the conversion to cash, the Company may sell a portion of its trade receivables to third parties. The Company has no recourse to these receivables once they are sold but may have continuing involvement related to servicing and collection activities. The impact of these transactions in the Company's Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025 was not significant. The carrying values of cash, receivables, and accounts payable are considered to be representative of their respective fair values. Recent Accounting Pronouncements Recently issued accounting pronouncements not adopted as of June 30, 2026 In November 2024, the FASB issued Accounting Standards Update No. 2024-03. "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03"), which requires public business entities to disclose additional information about certain key expense categories within major income statement captions in the notes to consolidated financial statements. These enhanced disclosures are expected to help investors more effectively understand an entity's performance, assess its prospects for future cash flows, and compare an entity's performance over time and with that of other entities. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and may be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its Consolidated Financial Statements. Reclassifications Certain prior year balances have been reclassified in the Consolidated Financial Statements and accompanying notes to the Consolidated Financial Statements to conform with the current year presentation.
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| Acquisitions and Divestitures | Acquisitions and Divestitures 2026 Acquisitions During the six months ended June 30, 2026, the Company completed three acquisitions within our Construction Products segment, including two recycled aggregates businesses based in New Jersey and Colorado, respectively, and one natural aggregates business based in Florida, for a total purchase price of $84.9 million. The acquisitions were recorded as business combinations and preliminary valuation estimates resulted in the recognition of, among other assets and liabilities, $49.3 million of mineral reserves, $19.2 million of goodwill, and $14.0 million of intangible assets in our Construction Products segment. 2025 Acquisitions There were no acquisitions completed during the three and six months ended June 30, 2025. 2026 Divestitures - Discontinued Operations On April 1, 2026, the Company completed the sale of its barge business to an affiliate of Wynnchurch Capital, L.P., for $450 million. Net cash proceeds received at closing were approximately $429.9 million after transaction closing costs, and $10 million in escrow recorded as a current receivable. The sale resulted in a pre-tax gain of $359.7 million, which is presented within income from discontinued operations, net of income taxes on the Consolidated Statements of Operations. The barge business, historically presented within the Transportation Products segment, is a leading manufacturer of inland barges, fiberglass barge covers, winches, and marine hardware with operations located along the U.S. inland river systems. The Company is performing routine services under a transition services agreement and will have no other continuing involvement with the divested business. We have concluded that the sale represented a strategic shift with a major effect on the Company's operations and financial results. Accordingly, results of operations and cash flows for the three and six months ended June 30, 2026 have been classified as discontinued operations. Results of prior periods have been recast to reflect these changes and present results on a comparable basis. In April 2026, the Company used $83.0 million of the cash proceeds to prepay a portion of the outstanding 2025 Refinancing Term Loan. See Note 7. "Debt" for additional information. The following table summarizes the major line items for the barge business that are included in income from discontinued operations, net of income taxes, on the Consolidated Statements of Operations:
The following table summarizes the assets and liabilities of the barge business which have been classified as discontinued operations on the Consolidated Balance Sheets:
2025 Divestitures There were no divestitures completed during the three and six months ended June 30, 2025.
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