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SEC Filings

10-Q
FORTERRA, INC. filed this Form 10-Q on 11/09/2017
Entire Document
 
FORTERRA, INC.
Notes to Unaudited Condensed Consolidated Financial Statements



Net Sales:
For the three months ended September 30,
 
For the nine months ended September 30,
 
2017
2016
 
2017
2016
United States
$
412,562

$
398,949

 
$
1,146,292

$
916,795

Canada
27,688

39,039

 
62,507

86,953

Mexico
4,007

3,144

 
10,445

6,103

 
$
444,257

$
441,132

 
$
1,219,244

$
1,009,851



19. Related party transactions

Hudson Advisors

The Company had an advisory agreement with Hudson Advisors, an affiliate of Lone Star, to provide certain management oversight services to the Company, including assistance and advice on strategic plans, obtaining and maintaining certain legal documents, and communicating and coordinating with service providers. The Company incurred fees totaling $1.0 million and $4.1 million for the three and nine months ended September 30, 2016, respectively, included in selling, general and administrative expense on the condensed consolidated statement of operations.

In conjunction with the IPO, the advisory agreement with Hudson Advisors was terminated.

Affiliates receivable

The Company paid for certain services provided for affiliates which the Company billed to its affiliates. At December 31, 2016, the Company recorded a receivable of $0.1 million, for services paid on behalf of affiliates in other current assets on the condensed consolidated balance sheets.

Tax receivable agreement

In connection with the IPO, the Company entered into a tax receivable agreement with Lone Star that provides for, among other things, the payment by the Company to Lone Star of 85% of the amount of certain covered tax benefits, which may reduce the actual liability for certain taxes that the Company might otherwise be required to pay. See further discussion at Note 14 Commitments and contingencies.

Bricks Joint Venture

In connection with the Bricks Disposition, Forterra entered into a transition services agreement with the joint venture formed by the affiliate of Lone Star and an unaffiliated third party pursuant to which Forterra's former bricks business was contributed (the "Bricks Joint Venture"). Pursuant to the transition services agreement, Forterra continued to provide certain administrative services, including but not limited to information technology, accounting and treasury for a limited period of time following the Bricks Disposition. The Company recognized a total of $0.2 million and $1.8 million in Other Operating Income, net pursuant to the transition services agreement related to the Bricks Joint Venture for the three and nine months ended September 30, 2017, respectively. Additionally, during the transition period, the Company collected cash from as well as settled invoices and payroll on behalf of its former bricks business. As a result, Forterra had a net payable due to affiliates of $8.4 million as of December 31, 2016, and a net receivable from affiliates of $1.9 million as of September 30, 2017.

    

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