UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Commission File Number 001-34530

U.S. CONCRETE, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

2925 Briarpark, Suite 1050
Houston, Texas 77042
(Address of principal executive offices, including zip code)

(713) 499-6200
(Registrant’s telephone number, including area code)

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

     Indicate 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 submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer o		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company þ

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     Indicate by check mark whether the registrant has filed all documents required to be filed by Sections 12, 13 or 15(d) of the Securities and Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the court Yes þ No o

     As of the close of business on November 9, 2010, U.S. Concrete, Inc. had 11,928,000 shares of its common stock, $0.001 par value, outstanding.

 

 

U.S. CONCRETE, INC.

INDEX

		Page No.
Part I — Financial Information
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Operations			4
Condensed Consolidated Statement of Changes in Equity (Deficit)			6
Condensed Consolidated Statements of Cash Flows			7
Notes to Condensed Consolidated Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			31
Item 3. Quantitative and Qualitative Disclosures About Market Risk			43
Item 4. Controls and Procedures			43
Part II — Other Information
Item 1. Legal Proceedings			44
Item 1A. Risk Factors			44
Item 6. Exhibits			45
SIGNATURE			47
INDEX TO EXHIBITS			48
EX-4.11
EX-4.12
EX-31.1
EX-31.2
EX-32.1
EX-32.2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)

		Successor						Predecessor
		September 30,						December 31,
		2010						2009
ASSETS
Current assets:
Cash and cash equivalents		$	4,620					$	4,229
Trade accounts receivable, net			83,691						74,851
Inventories			28,816						30,960
Deferred income taxes			19,613						7,847
Prepaid expenses			4,151						3,729
Other current assets			9,337						6,973
Total current assets			150,228						128,589
Property, plant and equipment, net			141,398						239,917
Goodwill			—						14,063
Other assets			11,014						6,591
Assets held for sale			892						—
Total assets		$	303,532					$	389,160
LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Current maturities of long-term debt		$	587					$	7,873
Accounts payable			35,273						37,678
Accrued liabilities			43,823						48,557
Derivative liabilities			15,923						—
Total current liabilities			95,606						94,108
Long-term debt, net of current maturities			47,110						288,669
Other long-term obligations and deferred credits			7,921						6,916
Deferred income taxes			21,160						9,658
Total liabilities			171,797						399,351
Commitments and contingencies (Note 14)
Equity (deficit):
Preferred stock			—						—
Common stock			12						38
Additional paid-in capital			131,571						268,306
Retained earnings (deficit)			152						(280,802	)
Treasury stock, at cost			—						(3,284	)
Total stockholders’ equity (deficit)			131,735						(15,742	)
Non-controlling interest (Note 1)			—						5,551
Total equity (deficit)			131,735						(10,191	)
Total liabilities and equity		$	303,532					$	389,160

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

(Unaudited)
(in thousands, except per share amounts)

		Successor						Predecessor
		Period from
		September 1						Period from				Three Months
		through						July 1 through				Ended
		September 30,						August 31,				September 30,
		2010						2010				2009
Revenue		$	41,030					$	88,370			$	136,343
Cost of goods sold before depreciation, depletion and amortization			34,909						73,755				112,700
Selling, general and administrative expenses			4,591						8,595				14,836
Goodwill and other asset impairments			—						—				47,411
Depreciation, depletion and amortization			1,353						4,221				6,770
Loss on sale of assets			—						38				2,877
Income (loss) from continuing operations			177						1,761				(48,251	)
Interest expense, net			913						3,404				6,442
Derivative income			800						—				—
Other income, net			53						143				290
Income (loss) from continuing operations before reorganization items and income taxes			117						(1,500	)			(54,403	)
Reorganization items (Note 4)			—						(65,849	)			—
Income (loss) from continuing operations before income taxes			117						64,349				(54,403	)
Income tax expense (benefit)			(35	)					1,415				(1,270	)
Income (loss) from continuing operations			152						62,934				(53,133	)
Loss from discontinued operations, net of taxes and loss attributable to non-controlling interest			—						(10,213	)			(4,927	)
Net income (loss) attributable to stockholders		$	152					$	52,721			$	(58,060	)
Income (loss) per share attributable to stockholders:
Income (loss) from continuing operations		$	0.01					$	1.72			$	(1.46	)
Loss from discontinued operations, net of taxes			(0.00	)					(0.28	)			(0.14	)
Net income (loss)		$	0.01					$	1.44			$	(1.60	)
Basic and diluted weighted average shares outstanding			11,928						36,703				36,272

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

U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)

		Successor						Predecessor
		Period from						Period from
		September 1						January 1				Nine Months
		through						through				Ended
		September 30,						August 31,				September 30,
		2010						2010				2009
Revenue		$	41,030					$	302,748			$	377,077
Cost of goods sold before depreciation, depletion and amortization			34,909						261,830				315,948
Selling, general and administrative expenses			4,591						39,241				46,115
Goodwill and other asset impairments			—						—				47,411
Depreciation, depletion and amortization			1,353						16,862				19,847
Loss on sale of assets			—						78				2,136
Income (loss) from continuing operations			177						(15,263	)			(54,380	)
Interest expense, net			913						17,369				19,527
Gain on purchases of senior subordinated notes			—						—				7,406
Derivative income			800						—				—
Other income, net			53						534				921
Income (loss) from continuing operations before reorganization items and income taxes			117						(32,098	)			(65,580	)
Reorganization items (Note 4)			—						(59,191	)			—
Income (loss) from continuing operations before income taxes			117						27,093				(65,580	)
Income tax expense (benefit)			(35	)					1,576				(2,487	)
Income (loss) from continuing operations			152						25,517				(63,093	)
Loss from discontinued operations, net of taxes and loss attributable to non-controlling interest			—						(12,672	)			(8,415	)
Net income (loss) attributable to stockholders		$	152					$	12,845			$	(71,508	)
Income (loss) per share attributable to stockholders:
Income (loss) from continuing operations		$	0.01					$	0.70			$	(1.75	)
Loss from discontinued operations, net of income taxes			(0.00	)					(0.35	)			(0.23	)
Net income (loss)		$	0.01					$	0.35			$	(1.98	)
Basic and diluted weighted average shares outstanding			11,928						36,699				36,132

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

U.S. CONCRETE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

(Unaudited)
(in thousands)

		Common Stock																				Non-
										Additional Paid-In												Controlling
		Shares				Par Value				Capital				Retained Deficit				Treasury Stock				Interest				Total Equity (Deficit)
BALANCE, December 31, 2008 (Predecessor)			36,793			$	37			$	265,453			$	(192,564	)		$	(3,130	)		$	10,567			$	80,363
Stock-based compensation			497				1				1,791				—				—				—				1,792
Employee purchase of ESPP shares			171				—				288				—				—				—				288
Purchase of treasury shares			(89	)			—				—				—				(147	)			—				(147	)
Cancellation of shares			(39	)			—				—				—				—				—				—
Capital contribution to Superior Materials Holdings, LLC			—				—				—				—				—				1,609				1,609
Net loss			—				—				—				(71,508	)			—				(5,632	)			(77,140	)
BALANCE, September 30, 2009 (Predecessor)			37,333			$	38			$	267,532			$	(264,072	)		$	(3,277	)		$	6,544			$	6,765
BALANCE, December 31, 2009 (Predecessor)			37,558			$	38			$	268,306			$	(280,802	)		$	(3,284	)		$	5,551			$	(10,191	)
Stock-based compensation			—				—				1,073				—				—				—				1,073
Purchase of treasury shares			(123	)			—				—				—				(70	)			—				(70	)
Cancellation of shares			(70	)			—				—				—				—				—				—
Capital contribution to Superior Materials Holdings, LLC			—				—				—				—				—				2,481				2,481
Net loss			—				—				—				(55,751	)			—				(8,032	)			(63,783	)
BALANCE, August 31, 2010 (Predecessor)			37,365			$	38			$	269,379			$	(336,553	)		$	(3,354	)			—			$	(70,490	)
Cancellation of predecessor common stock			(37,365	)			(38	)			(3,316	)			—				3,354				—				—
Plan of reorganization and fresh start valuation adjustments			—				—				1,895				68,595				—				—				70,490
Elimination of predecessor accumulated deficit			—				—				(267,958	)			267,958				—				—				—
BALANCE, August 31, 2010 (Predecessor)			—				—				—				—				—				—				—
Issuance of new common stock in connection with emergence from Chapter 11			11,928				12			$	131,571				—				—				—				131,583
BALANCE, August 31, 2010 (Successor)			11,928			$	12			$	131,571				—				—				—			$	131,583
Net income			—				—				—				152				—				—				152
BALANCE, September 30, 2010 (Successor)			11,928			$	12			$	131,571			$	152			$	—			$	—			$	131,735

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

U.S. CONCRETE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
(in thousands)

		Successor					Predecessor
		Period from					Period from January
		September 1 through					1 through				Nine months ended
		September 30, 2010					August 31, 2010				September 30, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	152				$	4,811			$	(77,140	)
Adjustments to reconcile net loss to net cash used in operating activities:
Goodwill and other asset impairments			—					18,200				54,560
Reorganization items			—					(57,686	)			—
Depreciation, depletion and amortization			1,353					18,403				22,551
Debt issuance cost amortization			384					7,756				1,356
Gain on purchases of senior subordinated notes			—					—				(7,406	)
Derivative income			(800	)				—				—
Net loss on sale of assets			—					78				2,029
Deferred income taxes			747					(966	)			(1,453	)
Provision for doubtful accounts			106					1,200				2,925
Stock-based compensation			—					1,073				1,792
Changes in assets and liabilities, excluding effects of acquisitions:
Accounts receivable			2,173					(26,119	)			4,076
Inventories			(231	)				(2,310	)			2,481
Prepaid expenses and other current assets			(860	)				(3,158	)			6,544
Other assets and liabilities			8					249				3
Accounts payable and accrued liabilities			(8,688	)				12,423				(366	)
Net cash provided by (used in) operating activities			(5,656	)				(26,046	)			11,952
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment			(450	)				(4,475	)			(12,491	)
Proceeds from disposals of property, plant and equipment			10					252				9,122
Payments for acquisitions/redemption			(640	)				—				(5,214	)
Net cash used in investing activities			(1,080	)				(4,223	)			(8,583	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Convertible Notes			—					55,000				—
Proceeds from New Credit Agreement			13,198					2,063				—
Repayments on New Credit Agreement			(8,191	)				(2,063	)			—
Proceeds from prepetition borrowings			—					51,172				138,859
Repayments of prepetition borrowings			—					(67,872	)			(132,354	)
Proceeds from debtor-in-possession facility			—					161,182				—
Repayments from debtor-in-possession facility			—					(161,182	)			—
Net proceeds from (repayments on) other borrowings			(104	)				1,251				—
Financing costs			—					(9,469	)			—
Purchases of senior subordinated notes			—					—				(4,810	)
Purchase of treasury shares			—					(70	)			(147	)
Proceeds from issuances of common stock under compensation plans			—					—				288
Non-controlling interest capital contributions			—					2,481				—
Net cash provided by financing activities			4,903					32,493				1,836
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			(1,833	)				2,224				5,205
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD			6,453					4,229				5,323
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	4,620				$	6,453			$	10,528

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

U.S. CONCRETE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

     The accompanying condensed consolidated financial statements include the accounts of U.S. Concrete, Inc. and its subsidiaries and have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Some information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the SEC’s rules and regulations. In the opinion of our management, all adjustments necessary to state fairly the information in our unaudited condensed consolidated financial statements have been included. Operating results for the periods presented are not necessarily indicative of our results expected for the year ending December 31, 2010.

     These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes in our annual report on Form 10-K for the year ended December 31, 2009 (the “2009 Form 10-K”). However, we applied the accounting under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 852 (“ASC 852”), “Reorganizations,” as of August 31, 2010 (see Note 3). Therefore, our condensed consolidated balance sheet as of September 30, 2010, which is referred to as that of the “Successor” company, includes adjustments resulting from the reorganization and application of ASC 852 and is not comparable to our balance sheet as of December 31, 2009, which is referred to as that of the “Predecessor” company. References to the “Successor” company in the unaudited condensed consolidated financial statements and the notes thereto refer to the Company after giving effect to the reorganization and application of ASC 852. References to the “Predecessor” company refer to the Company prior to the reorganization and application of ASC 852.

     In August 2010, we entered into a redemption agreement to redeem our 60% interest in our Michigan subsidiary, Superior Materials Holdings, LLC (“Superior”). This redemption was finalized and closed on September 30, 2010 and is discussed in Note 6. The results of operations of Superior, net of the minority owner’s 40% interest, have been included in discontinued operations in our condensed consolidated statements of operations for all periods presented. We reflect the minority owner’s 40% interest in income, net assets and cash flows of Superior as a non-controlling interest in our condensed consolidated financial statements.

     The preparation of financial statements and accompanying notes in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions that we consider significant in the preparation of our financial statements include those related to our allowance for doubtful accounts, goodwill, accruals for self-insurance, income taxes, reserves for inventory obsolescence and the valuation and useful lives of property, plant and equipment.

2. EMERGENCE FROM CHAPTER 11

     Developments Leading to Chapter 11

     Since the middle of 2006, the United States building materials construction market has become increasingly challenging. Currently, the construction industry, particularly the ready-mixed concrete industry, is characterized by significant overcapacity, fierce competitive activity and declining sales volumes. From 2007 through 2010, we have implemented a variety of cost reduction initiatives, including workforce reductions, suspension of employee benefits, temporary plant idling, rolling stock dispositions and divestitures of nonperforming business units to reduce our operating and fixed costs.

     Despite these initiatives, our business and financial performance were severely affected by the overall downturn in construction activity, particularly the steep decline in single-family home starts in the U.S. residential construction markets, the turmoil in the global credit markets and the U.S. economic downturn. These conditions have had a significant impact on demand for our products since the middle of 2006 and continuing into the third quarter of 2010. We have also experienced pricing pressure and our ready-mixed concrete pricing has declined in 2010 compared to 2009 in most of our markets, which has negatively impacted our gross margins.

     The continued weakening economic conditions, including ongoing softness in residential construction, further reduction in demand in the commercial sector and delays in anticipated public works projects in many of our markets, combined to cause a significant reduction in our liquidity. We retained legal and financial advisors to assist us in reviewing the strategic and financing alternatives available to us. We also engaged in discussions with the holders of our previously outstanding 8.375% Senior Subordinated Notes due 2014 (the “Old Notes”) regarding a permanent restructuring of our capital structure.

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

     We reached an agreement with a substantial majority of the holders of our Old Notes on the terms of a comprehensive debt restructuring plan prior to filing for Chapter 11. To implement the restructuring, on April 29, 2010 (the “Petition Date”), we and certain of our subsidiaries (collectively, the “Debtors”) filed voluntary petitions in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) seeking relief under the provisions of Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). The Bankruptcy Court ordered joint administration of the Chapter 11 Cases under the lead case: In re U.S. Concrete, Inc., Case No. 10-11407 (the “Chapter 11 Cases”). The restructuring did not involve Superior’s operations.

     Emergence from Chapter 11

     On July 29, 2010, the Bankruptcy Court entered an order confirming the Debtors’ Joint Plan of Reorganization, pursuant to Chapter 11 of the Bankruptcy Code. The Plan of Reorganization was originally filed with the Bankruptcy Court on the Petition Date and supplemented by the Supplement to Debtors’ Joint Plan of Reorganization pursuant to Chapter 11 of the Bankruptcy Code filed with the Bankruptcy Court on July 19, 2010 and July 22, 2010, and amended on July 27, 2010 (as so amended and supplemented, the “Plan”). On August 31, 2010 (the “Effective Date”), the Debtors consummated their reorganization under the Bankruptcy Code and the Plan became effective.

     The consummation, on the Effective Date, of our reorganization under the Plan provided for the following:

	•		All outstanding obligations under our Old Notes were cancelled and the indenture governing the Old Notes was terminated;
	•		All amounts outstanding under the Revolving Credit, Term Loan and Guarantee Agreement (the “DIP Credit Agreement”) were paid and such agreement was terminated in accordance with its terms;
	•		All of our then existing equity securities, including our common stock (the “Old Common Stock”), all options to purchase the Old Common Stock and all rights to purchase the Company’s Series A Junior Participating Preferred Stock pursuant to a Rights Agreement, dated as of November 5, 2009, were cancelled. Accordingly, certain of our equity incentive plans in place prior to the Effective Date, and all awards granted under such plans, were terminated. The following equity incentive plans were terminated: (i) 1999 Incentive Plan of U.S. Concrete, Inc; (ii) U.S. Concrete, Inc. 2000 Employee Stock Purchase Plan; (iii) 2001 Employee Incentive Plan of U.S. Concrete, Inc.; and (iv) U.S. Concrete, Inc. 2008 Incentive Plan;
	•		Issuance of (i) approximately 11.9 million shares of Common Stock to holders of the Old Notes, (ii) approximately 1.5 million Class A Warrants to holders of Old Common Stock and (iii) approximately 1.5 million Class B Warrants to holders of Old Common Stock. See Note 12 for more information on the Class A and Class B Warrants;
	•		Adoption of a management equity incentive plan (the “Incentive Plan”), under which 9.5% of the equity of the reorganized Company authorized pursuant to the Plan, 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 reorganized Company;
	•		Entry into a new credit agreement, dated as of August 31, 2010 (the “New Credit Agreement”), which provides for a $75.0 million asset-based revolving credit facility. See Note 8 for more information on the New Credit Agreement; and
	•		Issuance of $55.0 million aggregate principal amount of 9.5% Convertible Secured Notes due 2015 (the “Convertible Notes”) pursuant to a subscription offering. See Note 8 for more information on the Convertible Notes.

     Our Old Common Stock ceased trading on the NASDAQ Global Market on May 10, 2010 and was traded in the over-the-counter market until the Effective Date. Upon the Effective Date of the Plan, the Old Common Stock was cancelled and holders of the Old Common Stock received Class A and Class B Warrants. The common stock issued to holders of the Old Notes on the Effective Date began trading on the over-the-counter Bulletin Board (the “OTC Bulletin Board” or “OTC BB”) on October 15, 2010 under the symbol USCR.

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

3. FRESH START ACCOUNTING AND EFFECTS OF THE PLAN

     As required by U.S. GAAP, effective as of August 31, 2010, we adopted fresh start accounting following the guidance of FASB ASC 852. Fresh start accounting results in the Company becoming a new entity for financial reporting purposes. Accordingly, our consolidated financial statements for periods prior to August 31, 2010 are not comparable to consolidated financial statements presented on or after August 31, 2010. Fresh start accounting was required upon emergence from Chapter 11 because holders of voting shares immediately before confirmation of the Plan received less than 50% of the emerging entity and the reorganization value of our assets immediately before confirmation of our Plan was less than our post-petition liabilities and allowed claims. Fresh start accounting results in a new basis of accounting and reflects the allocation of our estimated fair value to underlying assets and liabilities. Our estimates of fair value are inherently subject to significant uncertainties and contingencies beyond our reasonable control. Accordingly, there can be no assurance that the estimates, assumptions, valuations, appraisals and financial projections will be realized, and actual results could vary materially. Moreover, the market value of our common stock may differ materially from the equity valuation for accounting purposes. In addition, the cancellation of debt income and the allocation of the attribute reduction for tax purposes is an estimate and will not be finalized until the 2010 tax return is filed. Any change resulting from this estimate could impact deferred taxes.

     Under ASC 852, the Successor Company must determine a value to be assigned to the equity of the emerging company as of the date of adoption of fresh-start accounting, which for us is August 31, 2010, the date the Debtors emerged from Chapter 11. To facilitate this calculation we first determined the enterprise value of the Successor Company. The valuation methods included (i) a discounted cash flow analysis, considering a range of the weighted average cost of capital between 14.5% and 15.5% and multiples of projected earnings of between 6.5 and 7.5 times for its terminal value, (ii) a market multiples analysis, considering multiple ranges of between 12.6 and 13.6 times based on a one year forward multiple and 10.5 and 11.5 times based on a two year forward multiple (iii) precedent transaction multiples of between 7 and 8 times. This analysis resulted in an estimated enterprise value of between $180.0 million and $208.0 million. We utilized an enterprise value for fresh start accounting near the mid-point of this range.

     The estimated enterprise value and the equity value are highly dependent on the achievement of the future financial results contemplated in the projections that were set forth in the Plan. The estimates and assumptions made in the valuation are inherently subject to significant uncertainties. The primary assumptions for which there is a reasonable possibility of the occurrence of a variation that would have significantly affected the reorganization value include the assumptions regarding revenue growth, operating expenses, the amount and timing of capital expenditures and the discount rate utilized.

     Fresh-start accounting reflects the value of the Successor Company as determined in the confirmed Plan. Under fresh-start accounting, our asset values are remeasured and allocated based on their respective fair values in conformity with the purchase method of accounting for business combinations in FASB ASC Topic 805, “Business Combinations” (“FASB ASC 805”). Liabilities existing as of the Effective Date, other than deferred taxes and derivatives, were recorded at the present value of amounts expected to be paid using appropriate risk adjusted interest rates. Deferred taxes and derivatives were determined in conformity with applicable accounting standards. Predecessor accumulated depreciation, accumulated amortization and retained deficit were eliminated.

     The following fresh start condensed consolidated balance sheet presents the implementation of the Plan and the adoption of fresh start accounting as of August 31, 2010, the Effective Date. Reorganization adjustments have been recorded within the condensed consolidated balance sheet to reflect the effects of the Plan, including discharge of liabilities subject to compromise and the adoption of fresh start accounting in accordance with FASB ASC 852.

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

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)

		August 31, 2010
						Plan of				Fresh Start
						Reorganization				Accounting
		Predecessor				Adjustments				Adjustments				Successor
ASSETS
Current assets:
Cash and cash equivalents		$	8,516			$	(2,063	) o			—			$	6,453
Trade accounts receivable, net			85,970				—				—				85,970
Inventories			29,853				—				(1,268	) l			28,585
Deferred income taxes			23,419				—				(5,006	) p			18,413
Prepaid expenses			4,535				75	a			—				4,610
Other current assets			7,742				—				—				7,742
Assets held for sale			18,871				—				—				18,871
Total current assets			178,906				(1,988	)			(6,274	)			170,644
Property, plant and equipment, net			207,012				—				(64,712	) l			142,300
Goodwill			14,063				—				(14,063	) l			—
Other assets			3,894				6,100	b			1,045	l			11,039
Asset held for sale			3,272				—				—				3,272
Total assets		$	407,147			$	4,112			$	(84,004	)		$	327,255
LIABILITIES AND EQUITY (DEFICIT)
Liabilities not subject to compromise:
Current liabilities:
Current maturities of long-term debt		$	52,553			$	(51,875	) c			—			$	678
Accounts payable			32,776				—				—				32,776
Accrued liabilities			52,319				3,186	d			—				55,505
Derivative liabilities			—				16,723	m			—				16,723
Liabilities held for sale			20,976				—				—				20,976
Total current liabilities			158,624				(31,966	)			—				126,658
Long-term debt, net of current maturities			488				41,400	e			—				41,888
Other long-term obligations and deferred credits			8,505				(592	) n			—				7,913
Deferred income taxes			24,264				—				(5,051	) p			19,213
Total long-term liabilities			33,257				40,808				(5,051	)			69,014
Liabilities subject to compromise			285,756				(285,756	) f			—				—
Total liabilities			477,637				(276,914	)			(5,051	)			195,672
Commitments and contingencies			—				—				—				—
Deficit:
Preferred stock			—				—				—				—
Common stock			38				(26	) g			—				12
Additional paid-in capital			269,379				130,150	h			(267,958	) k			131,571
Retained earnings (deficit)			(336,553	)			147,548	i			189,005	k			—
Treasury stock, at cost			(3,354	)			3,354	j			—				—
Total stockholders’ equity (deficit)			(70,490	)			281,026				(78,953	)			131,583
Non-controlling interest			—				—				—				—
Total equity (deficit)			(70,490	)			281,026				(78,953	)			131,583
Total liabilities and equity (deficit)		$	407,147			$	4,112			$	(84,004	)		$	327,255

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

4. REORGANIZATION ITEMS

     In accordance with authoritative accounting guidance issued by the FASB, separate disclosure is required for reorganization items, such as certain expenses, provisions for losses and other charges directly associated with or resulting from the reorganization and restructuring of the business, which have been realized or incurred during the Chapter 11 Cases.

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

     Reorganization items were comprised of the following (in thousands):

		Predecessor
		Period from				Period from
		July 1				Jan 1
		through				through
		August 31, 2010				August 31, 2010
Gain from cancellation of debt		$	151,872			$	151,872
Loss from fresh start valuation adjustments			(78,955	)			(78,955	)
Professional fees			(7,068	)			(9,243	)
Write-off of Old Notes deferred financing costs			—				(4,483	)
Total reorganization items, net		$	65,849			$	59,191

     In addition to the amounts reflected in reorganization items in the above table, prior to the Petition Date, we incurred professional fees related to our reorganization of approximately $5.0 million that are included in selling, general and administrative expenses for the eight-month period ended August 31, 2010 in the Condensed Consolidated Statements of Operations. Additionally, we wrote off approximately $1.6 million of unamortized deferred financing costs during the second quarter of 2010 related to our Prepetition Credit Agreement that has been included in interest expense in the eight-month period ended August 31, 2010 in the Condensed Consolidated Statements of Operations. The amounts due under the Prepetition Credit Agreement were paid in full with a portion of the proceeds from our DIP Credit Agreement. For the one-month period from September 1 through September 30, 2010, we incurred approximately $0.6 million of professional fees related to our reorganization that is included in selling, general and administrative expenses.

5. ACQUISITIONS, DISPOSITIONS AND ASSETS HELD FOR SALE

     Superior Redemption

     Certain of our subsidiaries (the “Joint Venture Partners”) and Edw. C. Levy Co. (“Levy”) were members of Superior and each held “Shares” of Superior, as defined in the Superior Operating Agreement, dated April 1, 2007 (the “Operating Agreement”). In August 2010, we entered into the Redemption Agreement (the “Redemption Agreement”) with the Joint Venture Partners, Superior and Levy, regarding the redemption of the Joint Venture Partners’ Shares by Superior (the “Redemption”). In September 2010, we entered into a Joinder Agreement to the Redemption Agreement with the Joint Venture Partners, Superior, Levy, VCNA Prairie, Inc. (the “New Joint Venture Partner”) and Votorantim Cement North America, Inc. (“VCNA”), whereby the New Joint Venture Partner and VCNA became parties to the Redemption Agreement. On September 30, 2010, the Company completed the disposition of its interest in Superior pursuant to the Redemption Agreement.

     Pursuant to the Redemption Agreement, as consideration for the Redemption, Superior, Levy, the New Joint Venture Partner, and VCNA (the “Indemnifying Parties”) agreed to indemnify us and the Joint Venture Partners from, among other items: (i) facts or circumstances that occur on or after the closing of the Redemption (the “Closing”) and which relate to the post-closing ownership or operation of Superior; (ii) the Agreement Approving Asset Sale with Central States, Southeast Areas Pension Fund, dated March 30, 2007; (iii) the Company’s obligation to provide retiree medical coverage to current and former Clawson employees of Superior and its affiliates pursuant to the collective bargaining agreement between Superior and the Teamster’s Local Union No. 614; and (iv) Superior’s issuance of 500 Shares to the New Joint Venture Partner.

     At the closing of the Redemption on September 30, 2010, the Company and the Joint Venture Partners collectively paid $640,000 in cash and issued a $1.5 million promissory note (the “Promissory Note”) to Superior as partial consideration for the indemnification and other consideration provided by the Indemnifying Parties pursuant to the Redemption Agreement.

     The Promissory Note does not bear interest and requires the Company and the Joint Venture Partners to pay Superior $750,000 on or before each of January 1, 2011 and January 1, 2012. The Promissory Note may be prepaid, in whole or in part, without premium, penalty or additional interest. We recognized a loss of approximately $11.6 million from redeeming our interest in Superior. We and the Joint Venture Partners have also agreed, for a period of five (5) years after the Closing not to compete with Superior in the State of Michigan, subject to certain exceptions.

     The results of Superior have been included in discontinued operations for the periods presented in the condensed consolidated statements of operations. See Note 6 for more information.

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

     Other

     During the second quarter of 2010, we made the decision to dispose of some of our transport equipment in northern California and as such have classified these assets as held for sale. These assets are recorded at the estimated fair value less costs to sell of approximately $0.9 million. There were no assets held for sale as of December 31, 2009.

     In September 2009, we sold our ready-mixed concrete plants in Sacramento, California for approximately $6.0 million, plus a payment for inventory on hand at closing. This sale resulted in a pre-tax loss of approximately $3.0 million after the allocation of approximately $3.0 million of goodwill related to these assets.

     In May 2009, we acquired substantially all the assets of a concrete recycling business in Queens, New York. We used borrowings under our revolving credit facility to fund the cash purchase price of approximately $4.5 million.

6. DISCONTINUED OPERATIONS

     As disclosed in Note 5, we closed on the redemption of our 60% interest in Superior in September 2010. Accordingly, there were no assets and liabilities of Superior reflected on the consolidated balance sheet as of September 30, 2010. In August 2010, we entered into the Redemption Agreement and in accordance with authoritative accounting guidance, wrote the net assets of this subsidiary down to the fair value less costs to sell. Additionally, we have presented the results of operations for all periods as discontinued operations. The following summarizes the results of operations included in discontinued operations:

		Successor						Predecessor
		Period from						Period from				Period from
		September 1						July 1				Jan 1
		through						through				through
		September 30, 2010						August 31, 2010				August 31, 2010
Revenue		$	5,931					$	13,777			$	33,625
Operating expenses			(5,782	)					(13,520	)			(37,465	)
Loss on redemption			(120	)					(18,200	)			(18,200	)
Income (loss) from discontinued operations, before income taxes and non-controlling interest			29						(17,943	)			(22,040	)
Income tax benefit (expense)			(29	)					1,390				1,358
Loss from discontinued operations before non-controlling interest			—						(16,553	)			(20,682	)
Non-controlling interest			—						6,340				8,010
Loss from discontinued operations		$	—					$	(10,213	)		$	(12,672	)

		Predecessor
		Three Months				Nine Months
		Ended				Ended
		September 30,				September 30,
		2009				2009
Revenue		$	17,265			$	37,557
Operating expenses			(25,354	)			(51,379	)
Income (loss) from discontinued operations, before income taxes and non-controlling interest			(8,089	)			(13,822	)
Income tax benefit (expense)			(76	)			(225	)
Loss from discontinued operations before non-controlling interest			(8,165	)			(14,047	)
Non-controlling interest			3,238				5,632
Loss from discontinued operations		$	(4,927	)		$	(8,415	)

7. INVENTORIES

     Inventories consist of the following (in thousands):

		Successor						Predecessor
		September 30,						December 31,
		2010						2009
Raw materials		$	19,610					$	18,128
Precast products			6,252						7,342
Building materials for resale			2,123						2,555
Fuel and repair parts			831						2,935
		$	28,816					$	30,960

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

8. DEBT

     A summary of debt is as follows (in thousands):

		Successor						Predecessor
		September 30,						December 31,
		2010						2009
Senior secured credit facility due 2014		$	5,007					$	—
Convertible secured notes due 2015			41,627						—
Prepetition senior secured credit facility			—						16,700
Old Notes			—						271,756
Notes payable and other financing			450						2,319
Superior Materials Holdings, LLC secured credit facility			—						5,604
Capital leases			613						163
			47,697						296,542
Less: current maturities			(587	)					(7,873	)
Total long-term debt		$	47,110					$	288,669

     The estimated fair value of our debt at September 30, 2010 approximated its carrying value and at December 31, 2009 was $188.7 million.

     Senior Secured Credit Facility due 2014

     On the Effective Date of the Plan, we and certain of our subsidiaries entered into a new credit agreement, dated as of August 31, 2010 (the “New Credit Agreement”), which provides for a $75.0 million asset-based revolving credit facility (the “Revolving Facility”). The New Credit Agreement matures in August 2014. As of September 30, 2010, we had outstanding borrowings of $5.0 million and $21.4 of undrawn standby letters of credit under the Revolving Facility. The availability under the Revolving Facility was approximately $33.5 million at September 30, 2010.

     Up to $30 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 amount available for loans under the Revolving Facility. Advances under the Revolving Facility are limited by a borrowing base of (a) 85% of the face amount of eligible accounts receivable plus (b) the lesser of (i) 85% of the net orderly liquidation value (as determined by the most recent appraisal) of eligible inventory and (ii) the sum of (A) 50% of the eligible inventory (other than eligible aggregates inventory) and (B) 65% of the eligible aggregates inventory plus (c) the lesser of (i) $15.0 million and (ii) the sum of (A) 85% of the net orderly liquidation value (as determined by the most recent appraisal) of eligible trucks plus (B) 80% of the cost of newly acquired eligible trucks since the date of the latest appraisal of eligible trucks minus (C) the depreciation amount applicable to eligible trucks since the date of the latest appraisal of eligible trucks minus (d) such reserves as the Administrative Agent may establish from time to time in its permitted discretion. The Administrative Agent may, in its permitted discretion, reduce the advance rates set forth above, adjust reserves or reduce one or more of the other elements used in computing the borrowing base. In addition, prior to the delivery of our financial statements for the fiscal quarter ended September 30, 2011, there will be an availability block (the “Availability Block”) of $15.0 million and after such date, unless the fixed charge coverage ratio for any trailing twelve month period is greater than or equal to 1.00:1.00, there will be an Availability Block of $15.0 million, to be increased monthly by $1.0 million up to a maximum of $20.0 million. Beginning with the fiscal month in which the Availability Block is eliminated and with respect to each fiscal month thereafter, at any time that availability under the Revolving Facility is less than $15.0 million, the Company must maintain a fixed charge coverage ratio of at least 1.00:1.00 until availability is greater than or equal to $15.0 million for a period of 30 consecutive days.

     Under the New Credit Agreement, our capital expenditures may not exceed (i) $15.0 million in the aggregate from the Effective Date (August 31, 2010) through and including December 31, 2010 and (ii) 7.0% of our consolidated annual revenue for the trailing twelve month period ending on the last day of each fiscal quarter thereafter (commencing with the fiscal quarter ended March 31, 2011); provided that the amount of any capital expenditures permitted to be made in respect of the trailing twelve month period ending on March 31, 2011 shall be increased by a maximum of $7.5 million of the unused amount of capital expenditures that were permitted to be made during the fiscal year ended December 31, 2010. Our capital expenditures from the Effective Date through September 30, 2010 were approximately $0.5 million. The Revolving Facility requires us to comply with certain other customary affirmative and negative covenants, and contains customary events of default.

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

     At our option, loans may be maintained from time to time at an interest rate equal to the Eurodollar-based rate (“LIBOR”) or the applicable domestic rate (“CB Floating Rate”). The CB Floating Rate shall be the greater of (x) the interest rate per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate and (y) the interest rate per annum equal to the sum of 1.0% per annum plus the adjusted LIBOR rate for a one month interest period, in each case plus the applicable margin. The applicable margin on loans is 2.75% in the case of loans bearing interest at the CB Floating Rate and 3.75% in the case of loans bearing interest at the LIBOR rate. Issued and outstanding letters of credit are subject to a fee equal to the applicable margin then in effect for LIBOR loans, a fronting fee equal to 0.20% per annum on the stated amount of such letter of credit, and customary charges associated with the issuance and administration of letters of credit. We will also pay a commitment fee on undrawn amounts under the Revolving Facility in an amount equal to 0.75% per annum. Upon any event of default, at the direction of the required lenders under the Revolving Facility, all outstanding loans and the amount of all other obligations owing under the Revolving Facility will bear interest at a rate per annum equal to 2.0% plus the rate otherwise applicable to such loans or other obligations.

     Outstanding borrowings under the Revolving Facility are prepayable, and the commitments under the Revolving Facility may be permanently reduced, without penalty. There are mandatory prepayments of principal in connection with (i) the incurrence of certain indebtedness, (ii) certain equity issuances and (iii) certain asset sales or other dispositions (including as a result of casualty or condemnation). Mandatory prepayments are applied to repay outstanding loans without a corresponding permanent reduction in commitments under the Revolving Facility and are subject to the terms of an Intercreditor Agreement.

     In connection with the New Credit Agreement, on the Effective Date, we and certain of our subsidiaries entered into a Pledge and Security Agreement (the “Security Agreement”) with the Administrative Agent. Pursuant to the Security Agreement, all obligations under the Revolving Facility will be secured by (i) a first-priority perfected lien (subject to certain exceptions) in substantially all of our and certain of our subsidiaries present and after-acquired inventory (including as-extracted collateral), accounts, certain specified mixer trucks, deposit accounts, securities accounts, commodities accounts, letter of credit rights, cash and cash equivalents, general intangibles (other than intellectual property and equity in subsidiaries), instruments, documents, supporting obligations and related books and records and all proceeds and products of the foregoing and (ii) a perfected second-priority lien (subject to certain exceptions) on substantially all other present and after acquired property (including, without limitation, material owned real estate).

     Convertible Secured notes due 2015

     On the Effective Date of the Plan, we issued $55.0 million aggregate principal amount of 9.5% Convertible Secured Notes due 2015 (the “Convertible Notes”) pursuant to a subscription offering contemplated by the Plan. The Convertible Notes are governed by an indenture (the “Indenture”), dated as of August 31, 2010. Under the terms of the Indenture, the Convertible Notes bear interest at a rate of 9.5% per annum and will mature on August 31, 2015. Interest payments will be payable quarterly in cash in arrears. Additionally, we recorded a discount of approximately $13.6 million related to an embedded derivative that was bifurcated and separately valued in accordance with authoritative accounting guidance (See Note 9). This discount will be accreted over the term of the note and included in interest expense.

     The Convertible Notes will be convertible, at the option of the holder, at any time on or prior to maturity, into shares of our new common stock (the “Common Stock”), at an initial conversion rate of 95.23809524 shares of Common Stock per $1,000 principal amount of Convertible Notes (the “Conversion Rate”). The conversion rate is subject to adjustment to prevent dilution resulting from stock splits, stock dividends, business combinations or similar events. In connection with any such conversion, holders of the Convertible Notes to be converted shall also have the right to receive accrued and unpaid interest on such Convertible Notes to the date of conversion (the “Accrued Interest”). We may elect to pay the Accrued Interest in cash or in shares of Common Stock in accordance with the terms of the Indenture.

     In addition, if a “Fundamental Change of Control” (as defined in the Indenture) occurs prior to the maturity date, in addition to any conversion rights the holders of Convertible Notes may have, each holder of Convertible Notes will have (i) a make-whole provision calculated as provided in the Indenture pursuant to which each holder may be entitled to additional shares of Common Stock upon conversion (the “Make Whole Premium”), and (ii) an amount equal to the interest on such Convertible Notes that would have been payable from the date of the occurrence of such Fundamental Change of Control (the “Fundamental Change of Control Date”) through the third anniversary of the Effective Date, plus any accrued and unpaid interest from the Effective Date to the Fundamental Change of Control Date (the amount in this clause (ii), the “Make Whole Payment”). We may elect to pay the Make Whole Payment in cash or in shares of Common Stock.

     If the closing price of the Common Stock exceeds 150% of the Conversion Price (defined as $1,000 divided by the Conversion Rate) then in effect for at least 20 trading days during any consecutive 30-day trading period (the “Conversion Event”), we may provide, at our option, a written notice (the “Conversion Event Notice”) of the occurrence of the Conversion Event to each holder of Convertible Notes in accordance with the Indenture. Except as set forth in an Election Notice (as defined below), the right to convert

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

Convertible Notes with respect to the occurrence of the Conversion Event shall terminate on the date that is 46 days following the date of the Conversion Event Notice (the “Conversion Termination Date”), such that the holder shall have a 45-day period in which to convert its Convertible Notes up to the amount of the Conversion Cap (as defined below). Any Convertible Notes not converted prior to the Conversion Termination Date as a result of the Conversion Cap shall be, at the holder’s election and upon written notice to the Company (the “Election Notice”), converted into shares of Common Stock on a date or dates prior to the date that is 180 days following the Conversion Termination Date. The “Conversion Cap” means the number of shares of Common Stock into which the Convertible Notes are convertible and that would cause the related holder to “beneficially own” (as such term is defined in Section 13 of the Exchange Act and Rules 13d-3 and 13d-5 thereunder) more than 9.9% of the Common Stock at any time outstanding.

     Any Convertible Notes not otherwise converted prior to the Conversion Termination Date or specified for conversion in an Election Notice shall be redeemable, in whole or in part, at our election at any time prior to maturity at par plus accrued and unpaid interest thereon to the Conversion Termination Date.

     The Indenture contains certain covenants that restrict 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;
	•		sell assets and issue capital stock of our restricted subsidiaries;
	•		incur liens;
	•		enter into transactions with affiliates; and
	•		consolidate, merge or sell all or substantially all of our assets.

     The Convertible Notes will be guaranteed by each of our existing and future direct or indirect domestic restricted subsidiaries. In connection with the Indenture, on August 31, 2010, we and certain of our subsidiaries entered into a Pledge and Security Agreement (the “Pledge and Security Agreement”) with the noteholder collateral agent. Pursuant to the Pledge and Security Agreement, the Convertible Notes and related guarantees will be secured by first-priority liens on certain of the property and assets directly owned by the Company and each of the guarantors, including material owned real property, fixtures, intellectual property, capital stock of subsidiaries and certain equipment, subject to permitted liens (including a second-priority lien in favor of the Administrative Agent) with certain exceptions. Obligations under the Revolving Facility and those in respect of hedging and cash management obligations owed to the lenders (and their affiliates) that are a party to the Revolving Facility (collectively, the “Revolving Facility Obligations”) will be secured by a second-priority lien on such collateral.

     The Convertible Notes and related guarantees will also be secured by a second-priority lien on the assets of the Company and the guarantors securing the Revolving Facility Obligations on a first-priority basis, including inventory (including as extracted collateral), accounts, certain specified mixture trucks, general intangibles (other than collateral securing the Convertible Notes on a first-priority basis), instruments, documents, cash, deposit accounts, securities accounts, 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.

     Registration Rights Agreement

     In connection with the issuance of the Convertible Notes, we entered into a registration rights agreement, dated August 31, 2010 (the “Registration Rights Agreement”), under which we agreed, pursuant to the terms and conditions set forth therein, to register the Convertible Notes and the Common Stock into which the Convertible Notes convert. Under the Registration Rights Agreement, we are required to use commercially reasonable efforts to file a shelf registration statement covering the resale by the Electing Holders (as defined in the Registration Rights Agreement) of Convertible Notes that are Registrable Securities (as defined in the Registration Rights Agreement) by the first business day following the date that is 366 days following the Effective Date, and to file a shelf registration statement covering the resale of shares of Common Stock that constitute Registrable Securities by the Electing Holders, on a delayed or continuous basis, within 180 days of the Issue Date. We are required to pay special interest if we fail to file either shelf registration statement by the applicable deadline or if any registration statement required by the Registration Rights Agreement ceases to be effective for more than 45 days, with respect to any Registrable Securities that are Convertible Notes and are Restricted Securities (as defined in the Indenture).

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

     DIP Credit Agreement and Prepetition Senior Secured Credit Facility

     Effective as of May 3, 2010, we and certain of our subsidiaries entered into the DIP Credit Agreement which provided us with a debtor-in-possession term loan and revolving credit facility during Chapter 11. The DIP Credit Agreement was paid in full and cancelled on the Effective Date of the Plan. Our senior secured credit facility initially due 2011, was paid in full on May 3, 2010 with funds obtained under our DIP Credit Agreement and immediately terminated.

     Old Notes

     As discussed in Note 2, we reached an agreement with a substantial majority of the holders of the Old Notes on the terms of a comprehensive debt restructuring plan prior to April 30, 2010, the date an event of default would have occurred for non-payment of interest on the Old Notes. On the Effective Date, the Old Notes were cancelled and the holders received approximately 11.9 million shares of new Common Stock in our reorganized company.

     During the first quarter of 2009, we purchased $7.4 million aggregate principal amount of the Old Notes in open market transactions for approximately $2.8 million plus accrued interest of approximately $0.3 million through the dates of purchase. We recorded a gain of approximately $4.5 million as a result of these open market transactions after writing off $0.1 million of previously deferred financing costs associated with the pro-rata amount of the Old Notes purchased. During the quarter ended June 30, 2009, we purchased an additional $5.0 million principal amount of the Old Notes for approximately $2.0 million. This resulted in a gain of approximately $2.9 million in April 2009, after writing off $0.1 million of previously deferred financing costs associated with the pro-rata amount of the Old Notes purchased. We used cash on hand and borrowings under our Prepetition Senior Secured Credit Facility to fund these transactions.

     Superior Credit Facility and Subordinated Debt

     As discussed in Note 5, we redeemed our 60% interest in Superior in September 2010. As a result, the debt balance under the Superior Credit Facility at September 30, 2010 is zero. The outstanding borrowings under the Superior Credit Facility at December 31, 2009 were $5.6 million. As a condition precedent to the initial advance under the Superior Credit Agreement, U.S. Concrete Inc. and the Levy were required to fund $3.6 million to Superior in the form of cash equity contributions, representing a prefunding of the respective obligations under certain support letters entered into in connection with the previous Superior Credit Agreement for the period from January 1, 2010 through September 30, 2010. Our portion of this cash obligation was $1.1 million. Additionally, we made capital contributions in the amount of $2.6 million during the first quarter of 2010 in lieu of cash payment of related party payables by Superior. In the first quarter of 2009, we provided subordinated debt capital in the amount of $2.4 million in lieu of receiving cash payment of related party payables from Superior. This subordinated debt was eliminated when Superior was consolidated with U.S. Concrete. Additionally, the minority partner, Levy, provided $1.6 million of subordinated debt capital to fund operations during the first quarter of 2009. During the third quarter of 2009, U.S. Concrete and Levy converted the subordinated debt capital into capital contributions to Superior.

9. DERIVATIVES

          General

          We are exposed to certain risks relating to our ongoing business operations. However, derivative instruments are not used to hedge these risks. We are required to account for derivative instruments as a result of the issuance of warrants and Convertible Notes associated with the emergence from Chapter 11 on August 31, 2010. None of our derivative contracts manage business risk or are executed for speculative purposes. As of September 30, 2009 and December 31, 2009, we did not have any derivative instruments.

          Our derivative instruments are summarized as follows:

Derivative Instruments not designated as
hedging instruments under ASC 815		Balance Sheet Location		Fair Value
Warrants		Current derivative liabilities		$	3,123
Convertible Note embedded derivative		Current derivative liabilities			12,800
				$	15,923

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

          The following table presents the effect of derivative instruments on the statement of operations, excluding income tax effects:

Derivative Instruments not designated as hedging		Location of Gain/(Loss)
instruments under ASC 815		Recognized		Amount
Warrants		Derivative income		$	0
Convertible Note embedded derivative		Derivative income			800
				$	800

          Warrant and Convertible Note volume positions are presented in the number of shares underlying the respective instruments. The table below presents our volume positions as of September 30, 2010:

Derivative Instruments not designated as hedging
instruments under ASC 815		Number of Shares
Warrants			3,000,000
Convertible Note embedded derivative			5,238,095
			8,238,095

          We do not have any derivative instrument with credit features requiring the posting of collateral in the event of a credit downgrade or similar credit event.

          Fair Value Disclosures

     Fair 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 between market participants as of the measurement date. Accounting guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:

Level 1—Quoted prices in active markets for identical assets or liabilities.

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 in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

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 fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

          The following table presents our fair value hierarchy for liabilities measured at fair value on a recurring basis as of September 30, 2010 (in thousands):

		Total				Level 1				Level 2				Level 3
Derivative — Warrants(1)		$	3,123			$	—			$	—			$	3,123
Derivative — Convertible Notes
Embedded Derivative(2)			12,800				—				—				12,800
		$	15,923			$	—			$	—			$	15,923

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

          The derivative liabilities were valued using a model for instruments with the option to convert into common equity. Inputs into the model were based upon observable market data where possible. Where observable market data did not exist, the Company modeled inputs based upon similar observable inputs.

          A reconciliation of the changes in Level 3 fair value measurements is as follows for September 30, 2010 (in thousands):

						Convertible Notes
		Warrants				Embedded Derivative
Balance at December 31, 2009
Purchases, issuances, and settlements		$	3,123			$	13,600
Total gains included in earnings			—				800
Balance at September 30, 2010		$	3,123			$	12,800
Total gains included in earnings attributable to the change in fair value of derivatives held at the end of the period		$	0			$	800

          Our other financial instruments consist of cash and cash equivalents, trade receivables, trade payables and long-term debt. We consider the carrying values of cash and cash equivalents, trade receivables and trade payables to be representative of their respective fair values because of their short-term maturities or expected settlement dates. The carrying value of outstanding amounts under our revolving credit facility approximates fair value due to the floating interest rate and the fair value of our Convertible Notes approximates carrying value at September 30, 2010.

10. INCOME TAXES

           We recorded income tax expense allocated to continuing operations equal to approximately $1.5 million and $1.6 million for the two and eight month periods ended August 31, 2010, respectively. Our income taxes for the one month period ended September 30, 2010 was near zero. Our effective tax rate differs substantially from the federal statutory rate primarily due to the application of a valuation allowance that reduced the recognized benefit of our deferred tax assets. In addition, certain state income taxes are calculated on bases different than pre-tax income (loss). This resulted in recording income tax expense in certain states that experience a pre-tax loss.

           In accordance with GAAP, the recognized value of deferred tax assets must be reduced to the amount that is more likely than not to be realized in future periods. The ultimate realization of the benefit of deferred tax assets from deductible temporary differences or tax carryovers depends on the generation of sufficient taxable income during the periods in which those temporary differences become deductible. We considered the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on these considerations, we relied upon the reversal of certain deferred tax liabilities to realize a portion of our deferred tax assets and established a valuation allowance as of August 31, 2010 and September 30, 2010 for other deferred tax assets because of uncertainty regarding their ultimate realization. Our total net deferred tax liability as of August 31, 2010 and September 30, 2010 was $0.8 million and $1.5 million, respectively.

           We reorganized pursuant to Chapter 11 of the Bankruptcy Code under the terms of our Plan with an effective date of August 31, 2010 (See Note 2). Under our Plan, our Old Notes 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 excludible from taxable income, but the debtor 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, we believe the effects of the Plan will not cause a significant change in our recorded deferred tax liability. Current estimates show that the required reduction in tax attributes, or deferred tax assets, will be accompanied by a corresponding release of valuation allowance that is currently reducing the carrying value of such tax attributes. The allocation of the tax attribute reduction is an estimate and will not be finalized until the 2010 tax return, which includes the effective date of the Plan, is filed. Any changes in the estimate could impact deferred taxes.

           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 a result, the amount of our pre-change net operating losses “NOLs”) and other tax attributes that are available to offset future taxable income are subject to an annual 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 resulting annual limitation on use of NOLs are not expected to result in the expiration of our NOL carryforwards if we are able to generate sufficient future taxable income within the carryforward periods. However, the limitation on the amount of NOL available to offset taxable income in a specific year may result in the payment of income taxes before all NOLs have been utilized. Additionally, a subsequent ownership change may result in further limitation on the ability to utilize existing NOLs and other tax attributes

           We made income tax payments of approximately $0.3 million during the eight month period ended August 31, 2010 and no income tax payments were made during the one month period ended September 30, 2010. We made income tax payments of approximately $0.1 million and $0.4 million during the three month and nine month periods ended September 30, 2009.

11. STOCKHOLDERS’ EQUITY

     Common Stock and Preferred Stock

     The following table presents information regarding U.S. Concrete’s common stock (in thousands):

		Successor						Predecessor
		September 30, 2010						December 31, 2009
Shares authorized			100,000						60,000
Shares outstanding at end of period			11,928						37,558
Shares held in treasury			—						552

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

     In connection with our emergence from Chapter 11, all existing shares of the Predecessor company were cancelled on August 31, 2010. Under our amended and restated certificate of incorporation, we are authorized to issue 100.0 million shares of common stock, par value $0.001 per share, of which 11.9 million shares were issued pursuant to the Plan and 2.2 million shares were reserved for the Incentive Plan.

     Additionally, we are authorized to issue “blank check” preferred stock, which may be issued from time to time in one or more series upon authorization by the Board. The Board, without further approval of the stockholders, is authorized to fix the dividend rights and terms, conversion rights, voting rights, redemption rights and terms, liquidation preferences, and any other rights, preferences and restrictions applicable to each series of the Preferred Stock. The issuance of Preferred Stock, while providing flexibility in connection with possible acquisitions and other corporate purposes could, among other things, adversely affect the voting power of the holders of the Common Stock and, under certain circumstances, make it more difficult for a third party to gain control of us, discourage bids for the Common Stock at a premium or otherwise affect the market price of the Common Stock. There was no preferred stock issued or outstanding as of September 30, 2010.

12. WARRANTS

     On August 31, 2010, we issued warrants to acquire Common Stock (the “New Warrants”) in two tranches: Class A Warrants to purchase an aggregate of approximately 1.5 million shares of Common Stock (the “Class A Warrants”) and Class B Warrants to purchase an aggregate of approximately 1.5 million shares of Common Stock (the “Class B Warrants”). The New Warrants were issued to holders of our Old Common Stock pro rata based on a holder’s stock ownership as of the Effective Date. These warrants have been included in derivative liabilities on the condensed consolidated balance sheet in accordance with authoritative accounting guidance (see Note 9).

     In connection with the issuance of the Class A Warrants, we entered into a Class A Warrant Agreement (the “Class A Warrant Agreement”) with American Stock Transfer & Trust Company, LLC, as warrant agent. Subject to the terms of the Class A Warrant Agreement, holders of Class A Warrants are entitled to purchase shares of Common 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 Warrant Agreement (the “Class B Warrant Agreement” and, together with the Class A Warrant Agreement, the “Warrant Agreements”) with American Stock Transfer & Trust Company, as warrant agent. Subject to the terms of the Class B Warrant Agreement, holders of Class B Warrants are entitled to purchase shares of Common Stock at an exercise price of $26.68 per share. Subject to the terms of the Warrant Agreements, both classes of New Warrants will have a seven-year term and will expire on the seventh anniversary of the Effective Date. The New Warrants may be exercised for cash or on a net issuance basis.

     If, at any time before the expiration date of the New Warrants, we pay or declare a dividend or make a distribution on the Common Stock payable in shares of our capital stock, subdivisions or combinations of our outstanding shares of Common Stock into a greater or lesser number of shares or issue any shares of our capital stock by reclassification of Common Stock, then the exercise price and number of shares issuable upon exercise of the New Warrants will be adjusted so that the holders of the New 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 New Warrants had been exercised immediately before the event. In addition, if we distribute to holders of the Common Stock an Extraordinary Distribution (defined in each Warrant Agreement to include assets, securities or warrants to purchase securities), then the exercise price of the New Warrants will be decreased by the amount of cash and/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 be made if, at the time of an Extraordinary Distribution, we make the same distribution to holders of New Warrants as we make to holders of Common Stock pro rata based on the number of shares of Common Stock for which the New 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, tender offers, exchange offers, reorganizations, reclassifications, compulsory share exchanges or liquidations in which all or substantially all of the outstanding Common Stock is converted into or exchanged for stock, other securities, cash or assets), if the consideration paid consists 90% or more of publicly traded securities, each holder of a New Warrant will have the right upon any subsequent exercise to receive the kind and amount of stock, other securities, cash and assets that such holder would have received if the New Warrant had been exercised immediately prior to such Fundamental Change. If a Fundamental Change occurs (other than a Fundamental Change in which the consideration paid consists at least 90% of publicly traded securities), then each holder of a New Warrant will be entitled to receive an amount equal to the Fair Market Value (as defined in each of the Warrant Agreements) of their New Warrant on the date the Fundamental Change is consummated.

     No adjustment in the exercise price of New Warrants shall be required unless such adjustment would require an increase or decrease of at least $0.05 in the exercise price; provided that any adjustments that are not required to be made shall be carried forward and taken into account in any subsequent adjustment.

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

13. SHARES USED IN COMPUTING NET INCOME (LOSS) PER SHARE

     Basic 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 after giving effect to all potentially dilutive securities outstanding during the period.

     For the one month period ending September 30, 2010, our potentially dilutive shares include the shares underlying our Convertible Notes. For the three and nine month periods ended September 30, 2009 our potentially dilutive shares included stock options and stock awards. These potentially dilutive shares were excluded from the computation of diluted earnings per share for the one month period ended September 30, 2010 and the three and nine month periods ended September 30, 2009 because their effect would have been anti-dilutive.

14. COMMITMENTS AND CONTINGENCIES

     From time to time, and currently, we are subject to various claims and litigation brought by employees, customers and other third parties for, among other matters, personal injuries, property damages, product defects and delay damages that have, or allegedly have, resulted from the conduct of our operations. As a result of these types of claims and litigation, we must periodically evaluate the probability of damages being assessed against us and the range of possible outcomes. 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 range of possible outcomes, then we record a liability reflecting either the low end of our range or a specific estimate, if we believe a specific estimate to be likely based on current information.

     In May 2010, we entered into a settlement agreement for approximately $1.6 million related to four consolidated class actions then pending in Alameda Superior Court (California). This settlement was approved by the Bankruptcy Court as part of our Plan, which was confirmed on July 29, 2010. The original class actions were filed between April 6, 2007 and September 27, 2007 on behalf of various Central Concrete Supply Co., Inc. (“Central”) ready-mixed concrete and transport drivers, alleging primarily that Central, which is one of our subsidiaries, failed to provide meal and rest breaks as required under California law. We previously entered into settlements with one of the classes and a number of individual drivers. The approximate $1.6 million settlement was paid in September 2010.

     In May 2008, we received a letter from a multi-employer pension plan to which one of our subsidiaries is a contributing employer, providing notice that the Internal Revenue Service had denied applications by the plan for waivers of the minimum funding deficiency from prior years, and requesting payment of our allocable share of the minimum funding deficiency. We have been evaluating several options to minimize our exposure, including transferring our assets and liabilities into another plan. In April 2010, the multi-employer pension plan filed a civil complaint to collect approximately $1.8 million for this minimum funding deficiency. We may receive future funding deficiency demands from this particular multi-employer pension plan, or other multi-employer plans to which we contribute. We are unable to estimate the amount 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 the other contributing employers, the development of a rehabilitation plan by the trustees and subsequent submittal to and approval by the Internal Revenue Service is not predictable, and the allocation of fund assets and return assumptions by trustees are variable, as are actual investment returns relative to the plan assumptions.

     Currently, there are no material product defect claims pending against us. Accordingly, our existing accruals for claims against us do not reflect any material amounts relating to product defect claims. While our management is not aware of 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 all damages resulting from product defect claims. In particular, we generally do not maintain insurance coverage for the cost of removing and rebuilding structures, or so-called “rip and tear” coverage. In addition, our indemnification arrangements with contractors or others, when obtained, generally provide only limited protection against product defect claims. Due to inherent uncertainties associated with estimating unasserted claims in our business, we cannot estimate the amount of any future loss that may be attributable to unasserted product defect claims related to ready-mixed concrete we have delivered prior to September 30, 2010.

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

     We believe that the resolution of all litigation currently pending or threatened against us or any of our subsidiaries will not materially exceed our existing accruals 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 more claims 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 in accruals could have a material adverse effect on our consolidated financial condition or results of operations. We expect in the future that we and our operating subsidiaries 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. Our management believes we are in substantial compliance with applicable environmental laws and regulations. From time to time, we receive claims from federal and state environmental regulatory agencies and entities asserting that we may be in violation of environmental laws and regulations. Based on experience and the information currently available, our management believes the possibility that these claims could materially exceed our related accruals is remote. 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 the officer 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 under these indemnification agreements is not limited; however, we have a director and officer insurance policy that potentially limits our exposure and enables us to recover 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 indemnification agreements is minimal. Accordingly, we have not recorded any liabilities for these agreements as of September 30, 2010.

     We and our subsidiaries are parties to agreements that require us to provide indemnification in certain instances when we acquire businesses and real estate and in the ordinary course of business with our customers, suppliers, lessors and service providers.

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 our insurance 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 combination of 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 the estimated losses we have recorded are reasonable, significant differences related to the items noted above could materially affect our insurance obligations and future expense.

Performance Bonds

     In the normal course of business, we and our subsidiaries are contingently liable for performance under $42.3 million in performance bonds that various contractors, states and municipalities have required. The bonds principally relate to construction contracts, reclamation obligations and licensing and permitting. We and our subsidiaries have indemnified the underwriting insurance company against any exposure under the performance bonds. No material claims have been made against these bonds.

15. SEGMENT INFORMATION

     We have two segments that serve our principal markets in the United States. Our ready-mixed concrete and concrete-related products segment produces and sells ready-mixed concrete, aggregates (crushed stone, sand and gravel), concrete masonry and building materials. This segment serves the following principal markets: north and west Texas, northern California, New Jersey, New York, Washington, D.C. and Oklahoma. Our precast concrete products segment produces and sells precast concrete products in select markets in the western United States and the mid-Atlantic region.

     We account for inter-segment revenue at market prices. Segment operating income (loss) consists of net revenue less operating expense, including certain operating overhead directly related to the operation of the specific segment. Corporate includes executive, administrative, financial, legal, human resources, business development and risk management activities which are not allocated to operations and are excluded from segment operating income (loss).

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

     The following table sets forth certain financial information relating to our continuing operations by reportable segment (in thousands):

		Successor						Predecessor								Successor						Predecessor
		Period from						Period from July 1				Three Months				Period from						Period from January				Nine Months
		September 1 through						through August 31,				Ended				September 1 through						1 through August				Ended
		September 30, 2010						2010				September 30, 2009				September 30, 2010						31, 2010				September 30, 2009
Revenue:
Ready-mixed concrete and concrete-related products		$	36,594					$	80,288			$	124,743			$	36,594					$	272,488			$	343,185
Precast concrete products			5,476						10,684				15,596				5,476						39,457				45,127
Inter-segment revenue			(1,040	)					(2,602	)			(3,996	)			(1,040	)					(9,197	)			(11,235	)
Total revenue		$	41,030					$	88,370			$	136,343			$	41,030					$	302,748			$	377,077
Segment Operating Profit (Loss):
Ready-mixed concrete and concrete-related products		$	1,273					$	3,623			$	(45,899	)		$	1,273					$	250			$	(43,226	)
Precast concrete products			380						(716	)			485				380						(737	)			1,111
Gain on purchases of senior subordinated notes			—						—				—				—						—				7,406
Derivative income			800						—				—				800						—				—
Reorganization items			—						65,849				—				—						59,191				—
Unallocated overhead and other income			411						1,535				1,459				411						2,206				2,387
Corporate:
Selling, general and administrative expenses			(1,834	)					(2,538	)			(4,006	)			(1,834	)					(16,448	)			(13,728	)
Gain (loss) on sale of assets			—						—				—				—						—				(3	)
Interest expense, net			(913	)					(3,404	)			(6,442	)			(913	)					(17,369	)			(19,527	)
Profit (loss) from continuing operations before income taxes interest		$	117					$	64,349			$	(54,403	)		$	117					$	27,093			$	(65,580	)