Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2018	Mar. 07, 2019	Jun. 30, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	Forterra, Inc.
Entity Central Index Key	0001678463
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Entity Well-known Seasoned User	No
Entity Voluntary Filer	No
Entity Current Reporting Status	Yes
Amendment Flag	false
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		64,205,604
Entity Public Float			$ 183,714,000

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Net sales	$ 1,479,712	$ 1,580,413	$ 1,363,962
Cost of goods sold	1,234,143	1,327,305	1,083,508
Gross profit	245,569	253,108	280,454
Selling, general & administrative expenses	(209,877)	(255,034)	(216,099)
Impairment and exit charges	(4,336)	(13,220)	(2,218)
Earnings from equity method investee	10,162	12,360	11,947
Gain (loss) on sale of property, plant, and equipment, net	4,267	(2,107)	(21,274)
Other operating income, net	5,256	7,304	10,303
Operating expenses, including earnings from equity method investments	(194,528)	(250,697)	(217,341)
Income from operations	51,041	2,411	63,113
Other income (expenses)
Interest expense	(78,337)	(59,408)	(125,048)
Change in tax receivable agreement liability	0	46,180	0
Other income (expense), net	6,016	(31,915)	(847)
Loss before income taxes	(21,280)	(42,732)	(62,782)
Income tax (expense) benefit	(3,085)	40,672	51,692
Loss from continuing operations	(24,365)	(2,060)	(11,090)
Discontinued operations, net of tax	0	0	3,484
Net loss	$ (24,365)	$ (2,060)	$ (7,606)
Basic and Diluted earnings (loss) per share:
Continuing operations (in usd per share)	$ (0.38)	$ (0.03)	$ (0.23)
Discontinued operations (in usd per share)	0.00	0.00	0.07
Net (loss) (in usd per share)	$ (0.38)	$ (0.03)	$ (0.16)
Weighted average shares of common stock outstanding:
Basic and Diluted (in shares)	63,904	63,801	49,053

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
Net loss	$ (24,365)	$ (2,060)	$ (7,606)
Unrealized gain (loss) on derivative activities, net of tax	970	(3,548)	215
Foreign currency translation adjustment	(5,782)	3,475	(472)
Comprehensive loss	$ (29,177)	$ (2,133)	$ (7,863)

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets
Cash and cash equivalents	$ 35,793	$ 104,534
Receivables, net	198,468	192,654
Inventories	285,030	236,655
Prepaid expenses	7,289	5,381
Other current assets	17,509	27,059
Current assets held for sale	0	12,242
Total current assets	544,089	578,525
Non-current assets
Property, plant and equipment, net	492,167	412,572
Goodwill	508,193	496,141
Intangible assets, net	183,789	225,304
Investment in equity method investee	50,607	54,445
Other long-term assets	14,407	18,866
Non-current assets held for sale	0	25,385
Total assets	1,793,252	1,811,238
Current liabilities
Trade payables	114,708	108,560
Accrued liabilities	70,236	72,782
Deferred revenue	9,138	9,029
Current portion of long-term debt	12,510	12,510
Current portion of tax receivable agreement	15,457	34,601
Current liabilities held for sale	0	4,615
Total current liabilities	222,049	242,097
Non-current liabilities
Long-term debt	1,176,095	1,181,277
Long-term capital leases	134,948	4,155
Deferred tax liabilities	46,615	67,481
Deferred gain on sale-leaseback	9,338	75,743
Other long-term liabilities	22,667	25,032
Long-term tax receivable agreement	73,318	82,962
Total liabilities	1,685,030	1,678,747
Commitments and Contingencies (Note 15)
Equity
Common stock, $0.001 par value. 190,000 shares authorized; 64,206 and 64,231 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively	18	18
Additional paid-in-capital	234,931	230,023
Accumulated other comprehensive loss	(10,740)	(5,098)
Retained deficit	(115,987)	(92,452)
Total shareholder's equity	108,222	132,491
Total liabilities and shareholders' equity	$ 1,793,252	$ 1,811,238

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common shares, par value (in usd per share)	$ 0.001	$ 0.001
Common shares, authorized (in shares)	190,000,000	190,000,000
Common shares, issued (in shares)	64,206,000	64,231,000
Common shares, outstanding (in shares)	64,206,000	64,231,000

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (24,365)	$ (2,060)	$ (7,606)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation & amortization expense	105,423	115,659	99,873
(Gain) / loss on business divestiture	(6,016)	32,278	0
(Gain) / loss on disposal of property, plant and equipment	(4,266)	2,107	21,267
Amortization of debt discount and issuance costs	8,143	8,123	8,244
Stock-based compensation expense	6,240	3,696	252
Impairment on property, plant, and equipment and goodwill	956	10,551	0
Write-off of debt discount and issuance costs	0	0	22,385
Earnings from equity method investee	(10,162)	(12,360)	(11,947)
Distributions from equity method investee	13,141	13,717	13,293
Unrealized (gain) loss on derivative instruments, net	(1,408)	(5,251)	2,945
Unrealized foreign currency gains, net	(527)	(615)	(5,485)
Provision (recoveries) for doubtful accounts	(1,224)	2,947	(1,864)
Deferred income taxes	(20,768)	(25,496)	(67,619)
Tax receivable agreement non-cash items	0	(46,180)	0
Deferred rent	(1,373)	(2,616)	(1,371)
Other non-cash items	83	196	1,012
Change in assets and liabilities:
Receivables, net	(2,466)	(16,831)	16,852
Inventories	(45,313)	1,838	14,916
Other current assets	8,657	(24,003)	(6,705)
Accounts payable and accrued liabilities	(4,548)	(19,424)	(27,655)
Other assets & liabilities	4,243	826	3,396
NET CASH PROVIDED BY OPERATING ACTIVITIES	27,196	42,334	76,925
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment, and intangible assets	(50,609)	(52,514)	(54,289)
Proceeds from business divestiture	618	23,200	0
Proceeds from sale of fixed assets	8,429	0	0
Settlement of net investment hedges	(4,990)	0	0
Assets and liabilities acquired, business combinations, net	(4,500)	(36,709)	(1,008,158)
NET CASH USED IN INVESTING ACTIVITIES	(51,052)	(66,023)	(1,062,447)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale-leaseback	0	0	216,280
Payments of debt issuance costs	0	(2,498)	(20,036)
Proceeds from issuance of common stock, net	0	0	303,805
Payments on senior and junior term loans	(12,510)	(12,008)	(1,300,536)
Proceeds from senior and junior term loans, net	0	200,000	1,593,150
Proceeds from revolver	0	194,000	398,611
Payments on revolver	0	(293,000)	(248,173)
Proceeds from settlement of derivatives	0	0	6,546
Payment pursuant to tax receivable agreement	(30,407)	0	0
Capital contribution from parent	0	0	402,127
Payments for return of contributed capital	0	0	(363,582)
Other financing activities	(534)	(244)	(6,464)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	(43,451)	86,250	981,728
Effect of exchange rate changes on cash	(1,434)	1,949	228
Net change in cash and cash equivalents	(68,741)	64,510	(3,566)
Cash and cash equivalents, beginning of period	104,534	40,024	43,590
Cash and cash equivalents, end of period	$ 35,793	$ 104,534	$ 40,024

Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in-Capital	Accumulated Other Comprehensive Income (Loss)	Retained Deficit
Beginning Balance (in shares) at Dec. 31, 2015		0
Beginning Balance at Dec. 31, 2015	$ 52,315	$ 0	$ 139,869	$ (4,768)	$ (82,786)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Capital contributions from parent	402,127		402,127
Return of contributed capital, net	(325,148)		(325,148)
Brick Disposition, net of tax	(150,222)		(150,222)
Issuance of common stock at Reorganization (in shares)		45,369,474
Issuance of common stock at Reorganization	0
Issuance of common stock at IPO (in shares)		18,420,000
Issuance of common stock at IPO	303,805	$ 18	303,787
Stock-based plan activity (in shares)		134,650
Stock-based plan activity	0
Issuance of tax receivable agreement, net of tax	(142,349)		(142,349)
Share-based compensation expense	252		252
Net loss	(7,606)				(7,606)
Gain (loss) on derivative transactions, net of tax	215			215
Foreign currency translation adjustment	(472)			(472)
Ending Balance (in shares) at Dec. 31, 2016		63,924,124
Ending Balance at Dec. 31, 2016	132,917	$ 18	228,316	(5,025)	(90,392)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based plan activity (in shares)		306,764
Stock-based plan activity	(37)		(37)
Share-based compensation expense	3,696		3,696
Net loss	(2,060)				(2,060)
Gain (loss) on derivative transactions, net of tax	(3,548)			(3,548)
Foreign currency translation adjustment	3,475			3,475
Other	$ (1,952)		(1,952)
Ending Balance (in shares) at Dec. 31, 2017	64,231,000	64,230,888
Ending Balance at Dec. 31, 2017	$ 132,491	$ 18	230,023	(5,098)	(92,452)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based plan activity (in shares)		(25,284)
Stock-based plan activity	(126)		(126)
Share-based compensation expense	6,240		6,240
Net loss	(24,365)				(24,365)
Gain (loss) on derivative transactions, net of tax	970			970
Reclassification due to the adoption of ASU 2018-02	0			(830)	830
Foreign currency translation adjustment	(5,782)			(5,782)
Other	$ (1,206)		(1,206)
Ending Balance (in shares) at Dec. 31, 2018	64,206,000	64,205,604
Ending Balance at Dec. 31, 2018	$ 108,222	$ 18	$ 234,931	$ (10,740)	$ (115,987)

Organization and description of the business	12 Months Ended
Organization and description of the business	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and description of the business	Organization and description of the business General Forterra, Inc. (‘‘Forterra’’ or the ‘‘Company’’) is involved in the manufacturing, sale and distribution of building products in the United States (‘‘U.S.’’) and Eastern Canada. Forterra’s primary products are concrete drainage pipe, precast concrete structures, and water transmission pipe used in drinking and wastewater systems. These products are used in the residential, infrastructure and non-residential sectors of the construction industry. Forterra, a Delaware corporation, was formed on June 21, 2016 to hold the business of Forterra Building Products following the Reorganization (as defined below). The business of Forterra Building Products included indirect wholly-owned subsidiaries of LSF9 Concrete Holdings Ltd., or LSF9. Lone Star Fund IX (U.S.), L.P. , which is referred to along with its affiliates and associates, but excluding the Company and other companies that it owns as a result of its investment activity, as Lone Star, through its wholly-owned subsidiary LSF9, acquired the business of Forterra Building Products on March 13, 2015, (‘‘Acquisition’’). LSF9, which was formed on February 6, 2015 for the purpose of acquiring the business of Forterra Building Products had no operations prior to the date of the Acquisition. Prior to the Acquisition, the entities comprising the business of Forterra Building Products which were acquired by Lone Star were indirect wholly-owned subsidiaries of HeidelbergCement A.G., ("HC" or "Parent"), a publicly listed company in Germany, encompassing HC's North American building products operations, which we refer to as BP NAM. LSF9 acquired BP NAM in a business combination which also included the acquisition of HC’s U.K.-based building products operations for a total initial purchase price of $1.33 billion cash, including customary working capital adjustments and a possible earnout of up to $100.0 million as contingent consideration. The acquisition of BP NAM and HC's UK-based building products business was funded with an equity investment of $432.3 million and third-party debt in the amount of $940.0 million. As HC's U.K.-based building products operations are not part of Forterra, Forterra was allocated a proportion of the total debt and equity used in the Acquisition. Initial Public Offering On October 6, 2016, Forterra filed an Amended and Restated Certificate of Incorporation which increased the number of authorized shares of common stock from 1,000 with a par value of $0.01 per share to 190,000,000 with a par value of $0.001 per share, and, immediately after which, effected a 41,619.472 for one stock split of its issued and outstanding common stock previously approved by the Company's Board of Directors. Following the stock split there were 41,619,472 shares of common stock outstanding. The Company's Amended and Restated Certificate of Incorporation has also authorized 10,000,000 shares of preferred stock that may be issued at the approval of the Company's Board of Directors. No shares of preferred stock have been issued or were outstanding as of December 31, 2018. On October 25, 2016, Forterra sold 18,420,000 shares of common stock in its initial public offering, or the IPO at a public offering price of $18.00 per share. The Company received net proceeds of $313.3 million in the IPO before offering costs. Reorganization Prior to the consummation of the IPO, LSF9 distributed its brick operations in the United States and Eastern Canada to an affiliate of Lone Star, or the Bricks Disposition, recognized as a return of capital in the statement of shareholders' equity. Following the Bricks Disposition and prior to the consummation of the IPO, the remaining building products operations of LSF9 in the United States and Eastern Canada, were transferred to Forterra, Inc. in an internal reorganization under common control transaction (the "Reorganization"). Following the Reorganization, Forterra, Inc. became a wholly owned subsidiary of Forterra US Holdings, LLC, which is indirectly wholly owned by an affiliate of Lone Star. The Reorganization was accounted for as a change in reporting entity, and the consolidated financial statements of the Company have been retrospectively adjusted for all periods presented to reflect the new organizational structure following the Reorganization, including the presentation of discontinued operations associated with the Bricks Disposition. Refinancing Concurrent with the completion of the IPO, Forterra entered into a new asset based revolving credit facility for working capital and general corporate purposes, or the 2016 Revolver, and a new $1.05 billion senior term loan facility, the proceeds of which, together with a $125.0 million draw on the 2016 Revolver and $296.0 million in proceeds from the IPO, were used to repay in full and terminate the then-existing asset based revolving credit facility, or the 2015 Revolver, $1.04 billion senior term loan, or the 2015 Senior Term Loan and $260.0 million junior term loan, or the Junior term Loan. On May 1, 2017, the Company amended the senior term loan facility entered into concurrent with the IPO to increase the principal outstanding by an additional $200.0 million and to reduce the interest margin applicable to the full balance thereof, or as amended, the 2016 Senior Term Loan. The terms of the 2016 Senior Term Loan and 2016 Revolver are described in greater detail in Note 11, Debt and deferred financing costs.

Summary of significant accounting policies	12 Months Ended
Summary of significant accounting policies	Dec. 31, 2018
Accounting Policies [Abstract]
Summary of significant accounting policies	Summary of significant accounting policies Principles of Consolidation The consolidated financial statements include the accounts and results of operations of Forterra, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (‘‘U.S. GAAP’’). Certain prior year numbers have been reclassified to conform to current year presentations. The consolidated financial statements include certain assets and liabilities historically held at LSF9, including the proportionate debt and related interest expense incurred by LSF9 to acquire the Company that Forterra was obligated to pay. The Company's portion of Lone Star's initial $432.3 million equity investment is $167.5 million. The Company’s allocated portion of the $940.0 million of third party debt used to finance the Acquisition was $515.5 million. The remaining $424.5 million of the debt was allocated to affiliates of LSF9 that are not included in these financial statements based on the amounts affiliates of LSF9 have fully repaid. The Company and the affiliates of LSF9 were co-obligors and jointly and severally liable under the terms of the initial credit agreements related to the 2015 Senior Term Loan, Junior Term Loan and 2015 Revolver or the Initial Credit Agreements. In April of 2016, the Company’s affiliate co-obligors were released from joint and several liability under the Initial Credit Agreements and the Company was consequently the sole source of repayment for its $515.5 million share of the initial obligation under the Initial Credit Agreements. The balance was settled by Forterra in the Refinancing. See further discussion in Note 11, Debt and deferred financing costs. Business Combinations Assets acquired and liabilities assumed in business combination transactions, as defined by the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, 805, Business Combination, are recorded at fair value using the acquisition method of accounting. The Company allocates the purchase price of acquisitions based upon the fair value of each component which may be derived from various observable and unobservable inputs and assumptions. Initial purchase price allocations are preliminary and subject to revision within the measurement period, not to exceed one year from the date of the transaction. The fair value of property, plant and equipment and intangible assets may be based upon the discounted cash flow method that involves inputs that are not observable in the market (Level 3). Goodwill assigned represents the amount of consideration transferred in excess of the fair value assigned to identifiable assets acquired and liabilities assumed. Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. The more significant estimates made by management relate to fair value estimates for assets and liabilities acquired in business combinations; accrued liabilities for environmental cleanup, bodily injury and insurance claims; estimates for commitments and contingencies; and estimates for the realizability of deferred tax assets, the tax receivable agreement obligation, inventory reserves, allowance for doubtful accounts and impairment of goodwill and long-lived assets. Cash and cash equivalents Cash and cash equivalents include cash on hand and other highly liquid investments having an original maturity of less than three months. Receivables, net Receivables are recorded at net realizable value, which includes allowances for doubtful accounts. The Company reviews the collectability of trade receivables on an ongoing basis. The Company reserves for trade receivables determined to be uncollectible. This determination is based on the delinquency of the account, the financial condition of the customer and the Company’s collection experience. Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily receivables. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral from its customers. The allowances for uncollectible receivables are based upon analysis of economic trends in the construction industry, detailed analysis of the expected collectibility of accounts receivable that are past due and the expected collectibility of overall receivables. The Company had an individual customer within its Water Pipe & Products segment that accounted for approximately 14% and 13% of the Company's total net sales for the years ended December 31, 2018 and 2017, respectively, and total receivables at December 31, 2018 and 2017 representing 16% and 17% of the Company total receivables, net, respectively. Concentration of Labor Approximately 32% of the Company’s employees are represented by collective bargaining agreements, and 42% of these employees are included in collective bargaining agreements that expire within 12 months. Inventories Inventories are valued at the lower of cost or net realizable value. The Company’s inventories are valued using the average cost and first-in-first-out methods. Inventories include materials, labor and applicable factory overhead costs. The value of inventory is adjusted for damaged, obsolete, excess and slow-moving inventory. Market value of inventory is estimated considering the impact of market trends, an evaluation of economic conditions, and the value of current orders relating to the future sales of each respective component of inventory. Property, plant and equipment, net Property, plant and equipment, which includes amounts recorded under capital lease arrangements, is stated at cost less accumulated depreciation. Depreciation of property, plant and equipment is computed using the straight-line method over the estimated useful lives of the assets. These lives range from 20 to 40 years for buildings, 4 to 20 years for machinery and equipment, and 5 to 10 years for other equipment and lower of lease term or useful life on leasehold improvements. Repair and maintenance costs are expensed as incurred. The Company’s depreciation expense is recorded in cost of goods sold and selling, general and administrative expenses in the statements of operations. The Company capitalizes interest during the active construction of major projects. Capitalized interest is added to the cost of the underlying assets and is depreciated over the useful lives of those assets. There was no interest capitalized for any of the periods presented in the financial statements. Impairment or disposal of long-lived assets The Company evaluates the recoverability of its long-lived assets in accordance with the provisions of ASC 360, Property, Plant and Equipment (“ASC 360”). ASC 360 requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. Such evaluations for impairment are significantly impacted by estimates of future prices for the Company’s products, capital needs, economic trends in the construction sector and other factors. If such assets are considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount of the assets exceeds their fair value. Long-lived assets held for sale The Company accounts for long-lived assets held for sale in accordance with ASC 360 which requires assets to be classified as held for sale when the following criteria are met: 1) management, having the authority to approve the action, commits to a plan to sell; 2) the asset or asset group is available for immediate sale in its present condition; 3) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; 4) actions required to complete the sale indicate that is it unlikely that significant changes to the plan will be made or that the plan will be withdrawn; and 5) the sale is probable to qualify for recognition as a completed sale within one year. At such time assets or an asset group are determined to be held for sale, its carrying amount is adjusted to the lower of its depreciated book value or its estimated fair value, less costs to sell, and depreciation is no longer recognized. An impairment charge is recognized if the carrying value is in excess of its fair value. The assets and liabilities are required to be classified as held for sale on the accompanying consolidated balance sheets. See additional description in Note 3, Acquisitions and divestitures. Leases The Company has both capital and operating leases. Classification is made at the inception of the lease. The classification of leases is based on the extent to which risks and rewards incidental to ownership of a leased asset lie with the lessor or the lessee. Leased property meeting certain capital lease criteria is capitalized and the present value of the related lease payments is recorded as a liability. The present value of the minimum lease payments is calculated utilizing the lower of the Company’s incremental borrowing rate or the lessor’s interest rate implicit in the lease, if known by us. Depreciation of capitalized leased assets is computed utilizing the straight-line method over the shorter of the estimated useful life of the asset or the lease term and is included in depreciation and amortization in the Company's consolidated statements of operations. However, if the lease meets the bargain purchase or transfer of ownership criteria, the asset shall be amortized in accordance with the Company's normal depreciation policy for owned assets. Minimum rent payments under operating leases are recognized as an expense on a straight-line basis over the lease term, including any rent free periods. Operating lease expenses for the years ended December 31, 2018, 2017 and 2016 were approximately $24.3 million, $30.8 million and $12.1 million, respectively. Goodwill and other intangible assets, net Goodwill represents the excess of costs over the fair value of identifiable assets acquired and liabilities assumed. The Company evaluates goodwill and intangible assets in accordance with ASC 350, Goodwill and Other Intangible Assets (“ASC 350”). ASC 350 requires goodwill to be either qualitatively or quantitatively assessed for impairment annually (or more frequently if impairment indicators arise) for each reporting unit. The Company performs its annual impairment testing of goodwill as of October 1 of each year and in interim periods if events occur that would indicate that it is more likely than not the fair value of a reporting unit is less than carrying value. The Company first assesses qualitative factors to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as the basis for determining whether it is necessary to perform a quantitative goodwill impairment test. The Company may bypass the qualitative assessment for any reporting unit in any period and proceed directly with the quantitative analysis. The quantitative analysis compares the fair value of the reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds the fair value, impairment is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company evaluates its intangible assets with finite lives for indications of impairment whenever events or changes in circumstances indicate that the net book value may not be recoverable. Intangible assets with finite lives consist of customer relationships, customer backlogs, and brand names, and are amortized under the consumption method over the estimated useful lives. Factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results, significant changes in the manner of our use of the acquired assets or the strategy for our overall business or significant negative industry or economic trends. If this evaluation indicates that the value of the intangible asset may be impaired, the Company makes an assessment of the recoverability of the net book value of the asset over its remaining useful life. If this assessment indicates that the intangible asset is not recoverable, based on the estimated undiscounted future cash flows of the asset over the remaining amortization period, the Company reduces the net book value of the related intangible asset to fair value and may adjust the remaining amortization period. Investment in equity method investee The Company has an investment in a joint venture accounted for using the equity method. Under the equity method, carrying value is adjusted for the Company's share of the investee's earnings and losses, as well as capital contributions to and distributions from the investee. Distributions in excess of equity method earnings are recognized as a return of investment and recorded as investing cash inflows in the accompanying consolidated statements of cash flows. The Company classifies its share of income and loss related to its investments in its investee as a component of operating income or loss, as the Company's investments in the investee is an extension of the Company's core business operations. The Company evaluates its investment in the equity method investee for impairment whenever events or changes in circumstances indicate that the carrying value of its investment may have experienced an "other-than-temporary" decline in value. If such conditions exist, the Company compares the estimated fair value of the investment to its carrying value to determine if an impairment is indicated and determines whether the impairment is "other-than-temporary" based on its assessment of all relevant factors, including consideration of the Company's intent and ability to retain its investment. Derivatives and Hedge Accounting The Company has entered into derivative instruments to mitigate interest rate and foreign exchange rate risk. Certain derivative instruments are designated for hedge accounting under ASC 815-20, Derivatives - Hedging. Instruments that meet hedge criteria are formally designated as hedges at the inception of the instrument. The Company’s derivative assets and liabilities are measured at fair value. Fair value related to the cash flows occurring within one year are classified as current and the fair value related to the cash flows occurring beyond one year are classified as non-current in the consolidated balance sheets. For those instruments designated as hedges, the Company recognizes the changes in fair value in other comprehensive income (“OCI”), and recognizes any ineffectiveness immediately in earnings. Valuation of derivative assets and liabilities reflect the value of the instrument including counterparty credit risk. These values also take into account the Company’s own credit standing. Deferred financing costs In conjunction with its debt, the Company had a net balance of $34.3 million in debt discounts and debt issuance costs as of December 31, 2018. These costs are amortized over the life of the applicable debt instrument to interest expense utilizing the effective interest method. Fair value measurement The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Inputs – Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Inputs – Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The Company's other financial instruments consist primarily of cash and cash equivalents, trade and other receivables, accounts payable, accrued expenses, derivative financial instruments and long-term debt. The carrying value of the Company’s trade and other receivables, trade payables and accrued expenses approximates fair value due to their highly liquid nature, short-term maturity, or competitive rates assigned to these financial instruments. The Company adjusts the carrying amount of certain non-financial assets to fair value on a non-recurring basis when they are impaired. Foreign currency translation The Company uses the U.S. dollar as its functional currency for operations in the U.S. and Mexico, and the Canadian dollar for operations in Canada. The assets, liabilities, revenues and expenses of the Company’s Canadian operations are translated in accordance with ASC 830, Foreign Currency Matters. Environmental remediation liabilities The Company accrues for costs on an undiscounted basis associated with environmental remediation obligations when such costs are probable and reasonably estimable; if an estimated amount is likely to fall within a range and no amount within that range can be determined to be the better estimate, the minimum amount of the range is recorded. Claims for recoveries from insurance carriers and other third parties are not recorded until it is probable that the recoveries will be realized. Such accruals are adjusted as further information develops or circumstances change. Environmental expenditures that relate to current operations or to conditions caused by past operations are expensed. Expenditures that create future benefits are capitalized. At December 31, 2018 and 2017, the Company had environmental obligations of $1.6 million and $1.6 million, respectively, which are recorded within accrued liabilities and other long-term liabilities in the balance sheets. Stock-based plans The Company applies the provisions of ASC 718, Compensation - Stock Compensation, in its accounting and reporting for stock-based compensation. ASC 718 requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. All unvested options outstanding under the Company's option plans have grant prices equal to the market price of the Company's stock on the dates of grant. Compensation cost for restricted stock and restricted stock units is determined based on the fair market value of the Company's stock at the date of grant. Stock-based compensation expense is generally recognized over the required service period, or over a shorter period when employee retirement eligibility is a factor. Awards that may be settled in cash or company stock are classified as liabilities and remeasured at fair value at the end of each reporting period until the awards are settled. Income Taxes Deferred tax assets generally represent items that can be used as a tax deduction or credit in the Company's tax returns in future years for which a tax benefit has already been recorded in the Company's income statement. The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax liabilities generally represent tax expense recognized in the financial statements for which payment has been deferred, or expense for which the Company has already taken a deduction in its tax return but have not yet recognized as expense in the financial statements. At December 31, 2018, the Company finalized its policy and elected to use the period cost method for Global Intangible Low-taxed Income (“GILTI”) provisions, and therefore, have not recorded deferred taxes for basis differences expected to reverse in future periods. The Company recognizes a tax benefit for uncertain tax positions only if the Company believes it is more likely than not that the position will be upheld on audit based solely on the technical merits of the tax position. The Company evaluates uncertain tax positions after the consideration of all available information. Penalties and interest related to income tax uncertainties, should they occur, would be included in income tax expense in the period in which they are incurred. Revenue recognition The Company's revenue contracts are primarily single performance obligations for the sale of product both to trade customers and distributors. A majority of revenue recognized by the Company is recognized at the time control is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the products. The Company considers several indicators for the transfer of control to its customers, including the significant risks and rewards of ownership of products, the Company's right to payment and the legal title of the products. Based upon the assessment of control indicators, sales to trade customers and distributors are generally recognized when products are delivered to customers. All variable consideration that may affect the total transaction price, including contractual discounts, rebates, returns and credits, is included in net sales. Estimates for variable consideration are based on historical experience, anticipated performance and management's judgment. Generally, the Company's contracts do not contain significant financing. For certain engineering and construction contracts and building contracting arrangements, the Company enters into long-term contracts with customers. Revenue is recognized as the identified performance obligations are satisfied over time using an acceptable input method to measure the progress toward completion of the performance obligation if: the customer receives the benefits as work is performed, the customer controls the asset as it is being produced, or if the product being produced for the customer has no alternative use and the Company has a contractual right to payment. The Company uses its cost incurred to date relative to total estimated costs at completion to measure progress. The Company's contract liabilities consist of billings to customers in excess of revenue recognized which the Company records as deferred revenue. Revenue recognized during the year ended December 31, 2018, which was included in contract liabilities at the beginning of the period was not material. Contract assets include revenue recognized in excess of amounts billed and balances billed but not yet paid by customers under retainage provisions which are classified as a current asset within receivables, net on the Company's balance sheet. The Company had no material contract assets on the consolidated balance sheets as of December 31, 2018 or December 31, 2017. For the years ended December 31, 2018, 2017 and 2016, revenue recognized in continuing operations using the percentage of completion method amounted to 1%, 3%, and 3% and of total net sales, respectively. The Company records net sales including taxes collected on behalf of its customers. Shipping and handling costs are accounted for as contract fulfillments costs and classified as cost of goods sold. See Note 20, Segment reporting, for the Company's disaggregated revenue disclosures. The Company incurs shipping costs to third parties for the transportation of building products and bills such costs to customers. For the years ended December 31, 2018, 2017 and 2016, the Company recorded freight costs of approximately $127.0 million, $132.3 million and $104.6 million, respectively, on a gross basis within net sales and cost of goods sold in the accompanying statements of operations. The Company generally provides limited warranties related to its products which cover manufacturing in accordance with the specifications identified on the face of its quotation or order acknowledgment and to be free of defects in workmanship or materials. The warranty periods typically extend for a limited duration of one year. The Company estimates and accrues for potential warranty exposure related to products which have been delivered. Cost of goods sold and selling, general and administrative expenses Cost of goods sold includes costs of production, inbound freight charges for raw materials, outbound freight to customers, purchasing and receiving costs, inspection costs and warehousing at plant distribution facilities. Selling, general and administrative costs include expenses for sales, marketing, legal, accounting and finance services, human resources, customer support, treasury and other general corporate services. Proceeds from Insurance In 2016, a facility of the Company sustained fire damage for which insurance claims were made. The Company recognized a net insurance recovery gain of $3.8 million that was reported as a component of the Company's loss from operations in Other operating income. Proceeds from insurance settlements, except for those directly related to investing or financing activities, were recognized as cash inflows from operating activities. The losses related to such event are recognized as incurred. As the majority of the damage was to fully depreciated assets, the amount of losses were less than the amount of the insurance proceeds received. Insurance proceeds are recorded to the extent of the losses and then, only if recovery is realized or probable. Any gain in excess of losses are recognized only when the contingencies regarding the recovery are resolved, and the amount is fixed or determinable. Recent Accounting Guidance Adopted In May 2014, FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) and issued subsequent amendments to the initial guidance. Topic 606 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition. The new guidance outlines a single comprehensive model for accounting for revenue arising from contracts with customers. This guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company adopted the new standard on January 1, 2018 using the modified retrospective method which did not have a material impact on the Company's consolidated financial statements for the year ended December 31, 2018 and is not expected to have a material impact in future periods. No adjustment to retained earnings was required for the cumulative effect of initially applying the new standard. Results for periods beginning on or after January 1, 2018 are presented under Topic 606, which prior period amounts are not adjusted and continue to be reported in accordance with the prior accounting guidance under Topic 605, Revenue Recognition. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, providing guidance on eight specific cash flow statement classification matters, including but not limited to prepayment of debt or debt extinguishment costs, contingent consideration payments made after a business combination, insurance claims and policies, and distributions received from equity method investees. The Company adopted this standard on January 1, 2018. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income to allow a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from the U.S. tax reform legislation commonly known as the Tax Cuts and Jobs Act of 2017 (“TCJA”). This guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company early adopted the guidance provided in the ASU during the first quarter of 2018 and reclassified $0.8 million of stranded deferred tax benefits related to its derivative instruments from accumulated other comprehensive loss to retained deficit. In March 2018, the FASB issued ASU 2018-05, Income Taxes - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which added paragraphs to the codification pursuant to the SEC Staff Accounting Bulletin No. 118, which addressed the application of U.S. GAAP in situations when a company does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to finalize the calculations for the 2017 income tax effects of the TCJA. ASU 2018-05 provides entities with a one year measurement period from the December 22, 2017 enactment date to complete the accounting for the effects of the TCJA. See Note 19, Income taxes, for a further discussion of the effect of the TCJA on the Company's income taxes. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs to defer and recognize as an asset. Capitalized implementation costs are amortized over the term of the hosting arrangement, and the expense related to the capitalized implementation costs is recorded in the same line in the financial statements as the cloud service cost. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The Company early adopted the guidance provided in the ASU during the third quarter of 2018 and applied the new guidance prospectively. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. Recent Accounting Guidance Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which establishes the principles that lessees and lessors shall apply to report information about the amount, timing, and uncertainty of cash flows arising from a lease. Under the new guidance, lessees are required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for all leases with terms greater than twelve months. Additionally, this guidance will require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. The Company will adopt the guidance beginning the first quarter of 2019, using the transition approach that permits application of the new standard at the adoption date instead of the earliest comparative period presented in the financial statements. Upon adoption, the Company expects to record a right-of-use asset and lease liability of approximately $60 million to $70 million as of January 1, 2019. The Company is implementing processes and information technology tools to assist in its ongoing lease data collection and analysis and updating its accounting policies and internal control procedures that will be impacted by the new guidance.

Acquisitions and divestitures

12 Months Ended

Dec. 31, 2018

Business Combinations [Abstract]

Acquisitions and divestitures

The acquisitions described below have been/are accounted for as a business combinations as defined by ASC 805. The Company allocated the purchase price to the individually identifiable assets acquired and liabilities assumed based on their estimated fair value on the date of acquisition. The excess purchase price over those fair values was recorded as goodwill. The determination of fair values of the acquired assets and assumed liabilities required significant judgment, including estimates impacting the determination of estimated lives of tangible and intangible assets, calculation of the fair value of property, plant and equipment, inventory, and various intangibles. The fair values of assets and liabilities were determined using level 3 inputs as defined by ASC 820.

2018 transactions

Acquisitions

On April 2, 2018, the Company acquired substantially all the assets of Watkins Industries, Inc. for aggregate consideration of $4.5 million in cash. During the third quarter of 2018, the Company acquired certain assets of Anchor Concrete Products, Ltd. in Kingston, Ontario, for aggregate consideration of $2.5 million in cash.

Divestitures

On January 31, 2018, the Company divested assets relating to the operation of certain Drainage Pipe & Products facilities in Tennessee, Alabama, and Georgia to Foley Products Company (“Foley”) in exchange for $9.1 million in cash, land in Texas and a Drainage Pipe & Products facility located in Prentiss, Mississippi.

The acquisition side of the exchange transaction was accounted for as a business combination as defined by FASB ASC 805, Business Combinations. In accordance with ASC 805, the purchase price is measured as the acquisition date fair value of the assets transferred by the Company to Foley in the exchange. In the exchange, the Company divested of the net working capital and certain of the real property of its Drainage Pipe & Products plants in Tennessee and Alabama, as well as the net working capital of certain Drainage Pipe & Products plants in Georgia. The purchase price of $37.2 million was the fair value of the divested assets which resulted in the recognition of a gain of $6.0 million, recognized in Other income, net. The Company allocated the purchase price to the individually identifiable assets acquired and liabilities assumed based on their estimated fair value on the date of acquisition. The excess purchase price over those fair values was recorded as goodwill.

The determination of fair values of the divested and acquired assets and assumed liabilities requires significant judgment, including estimates impacting the determination of estimated lives of tangible and intangible assets, calculation of the fair value of property, plant and equipment, inventory, and various intangibles. The fair values of assets and liabilities were determined using level 3 inputs as defined by ASC 820, Fair Value Measurements and Disclosures.

The final fair values of the assets acquired and liabilities assumed in the transaction, including $9.1 million in cash, the Prentiss plant, and a parcel of land in Texas, at the acquisition date are as follows (in thousands):




Net working capital	$	10,984
Property, plant and equipment	9,221
Customer relationship intangible	2,100
Non-compete agreement intangible	5,600
Other intangibles	290
Net identifiable assets acquired	28,195
Goodwill	8,996
Consideration transferred	$	37,191

2016 and 2017 transactions

Acquisitions

The company completed the following significant acquisitions in 2016 and 2017:

•

Sherman-Dixie Acquisition - On January 29, 2016, Forterra acquired substantially all the stock of Sherman-Dixie Concrete Industries, Inc. ("Sherman-Dixie") for aggregate consideration of $66.8 million, or the Sherman-Dixie Acquisition. Sherman-Dixie was a manufacturer of precast concrete structures operating in Kentucky, Tennessee, Alabama and Indiana and now operates as part of the Company's Drainage Pipe & Products segment. The Sherman-Dixie Acquisition was financed with borrowings on the 2015 Revolver.

•

U.S. Pipe Acquisition - On April 15, 2016, Forterra acquired all of the stock of USP Holdings, Inc. ("USP") for aggregate consideration of $778.7 million, or the USP Acquisition. USP is a manufacturer of water transmission pipe servicing residential, commercial and infrastructure customers. USP operates as part of the Company’s Water Pipe & Products segment. The USP Acquisition was financed with proceeds from a capital contribution, borrowings on the 2015 Revolver and cash on hand.

•

Bio Clean Acquisition - On August 4, 2016, Forterra acquired all of the stock of Bio Clean Environmental Services, Inc. and Modular Wetland Systems, Inc. (together, Bio Clean) for aggregate consideration of $31.9 million, or the Bio Clean Acquisition. Bio Clean designs and sells storm water management systems that meet the requirements of local regulatory bodies regulating storm water quality and owns technologies relating to drainage and storm water management. The Bio Clean Acquisition was financed with cash on hand.


•	J&G Acquisition - On October 14, 2016, Forterra acquired J&G Concrete Operations, LLC, or J&G for aggregate consideration of $32.4 million, inclusive of customary working capital adjustments, or the J&G Acquisition. J&G manufactured concrete pipe, box culverts and special fittings in North Texas. The J&G Acquisition was financed with borrowings on the 2015 Revolver.

•

Precast Concepts Acquisition - On October 14, 2016, Forterra acquired the business of Precast Concepts, for aggregate consideration of $99.6 million, inclusive of customary working capital adjustments, or the Precast Concepts Acquisition. Precast Concepts manufactured concrete pipe, box culverts, storm detention systems and other precast concrete and related products in Colorado through its three facilities. The Precast Concepts Acquisition was financed with borrowings on the 2015 Revolver.

•

Royal Acquisition - On February 3, 2017, Forterra acquired the assets of Royal Enterprises America, Inc. ("Royal") for aggregate consideration of $35.5 million in cash, including customary working capital adjustments. Royal manufactured concrete drainage pipe, precast concrete products, storm water treatment technologies and erosion control products serving the greater Minneapolis market. The acquisition was financed with borrowings on the 2016 Revolver.

The respective fair values of the assets acquired and liabilities assumed at the acquisition date for the years 2016 and 2017 are as follows:



	2016												2017
	Sherman-Dixie			U.S. Pipe			Bio Clean		J&G		Precast Concepts		Royal
Net working capital	$	14,279		$	145,650		$	2,546	$	2,657	$	14,993	$	2,994
Property, plant and equipment, net	29,163			246,241			162		9,346		15,895		12,335
Customer relationship intangible	5,073			179,491			3,470		4,156		15,707		1,676
Non-compete agreement intangible	2,459			—			105		1,015		2,562		866
Trade names	138			37,388			1,065		—		29		308
Customer backlog intangible	843			—			—		780		2,213		63
Patents	—			13,093			10,464		—		—		72
In process R&D	—			—			6,692		—		—		—
Other intangibles	—			7,659			—		—		—		—
Other assets and liabilities	—			(11,745		)	—		—		—		(726		)
Deferred tax liabilities	(11,462		)	(157,427		)	—		—		—		—
Net identifiable assets acquired	40,493			460,350			24,504		17,954		51,399		17,588
Goodwill	26,257			318,360			7,434		14,494		48,204		17,903
Cash consideration transferred	$	66,750		$	778,710		$	31,938	$	32,448	$	99,603	$	35,491

Goodwill recognized is attributable primarily to expected operating efficiencies and expansion opportunities in the business acquired. Goodwill is expected to be deductible for tax purposes except goodwill acquired with the USP and Sherman-Dixie acquisitions.

Transaction costs

For the years ended December 31, 2018, 2017 and 2016, the Company recognized aggregate transaction costs, including legal, accounting, valuation, and advisory fees, specific to the acquisitions identified above of $0.8 million, $0.4 million, and $12.7 million, respectively. These costs are recorded in the consolidated statements of operations within selling, general & administrative expenses.

Discontinued operations

On August 23, 2016, an affiliate of Lone Star entered into an agreement with an unaffiliated third party to contribute Forterra's bricks business to the Bricks Joint Venture. In exchange for the contribution of the bricks business, an affiliate of Lone Star received a 50% interest in the Bricks Joint Venture. In connection with the Reorganization described in Note 1, on October 17, 2016, Forterra distributed its bricks business to an affiliate of Lone Star in the Bricks Disposition, a transaction among entities under common control. Following the Bricks Disposition, Forterra no longer had any relation to or business affiliation with its former bricks business or the Bricks Joint Venture other than contractual arrangements regarding certain limited transition services, the temporary use of the “Forterra” name, and a short-term loan, of approximately $11.9 million, which was subsequently been repaid in full in 2016.

As of the disposition date, the carrying value of net assets related to the brick business of $117.0 million were removed from the Company's balance sheet and recognized as a return of capital. In addition, the disposition resulted in a net tax impact of $33.2 million which is recognized as a reduction of contributed capital. The Company also reclassified the operations of the Company's then-former brick business to discontinued operations for all periods presented on the statement of operations. On the balance sheets, the prior period assets and liabilities of the brick business have been reclassified as amounts held for divestiture.

The following table includes the major classes of line items constituting pretax income (loss) of discontinued operations for the periods presented (in thousands):



	Year ended December 31,
	2016
Revenues	$	117,206
Cost of goods sold	98,043
Gross profit	19,163
Selling, general and administrative	(14,186		)
Other income and expense items	(785		)
Pretax income (loss) on discontinued operations	4,192
Income tax expense	(708		)
Discontinued operations, net of tax	$	3,484

Cash flows relating to all plants presented as discontinued operations are included in operating and investing activities for all periods presented, however the depreciation, amortization and capital expenditures related to discontinued operations are as follows (in thousands):



	Year ended December 31,
	2016
Depreciation and amortization	$	6,370
Capital expenditures	$	8,251

Divestitures

On April 12, 2016, Forterra sold its roof tile business for aggregate consideration of $10.5 million and generated a loss of $0.8 million recorded in other income (expense), net.

Effective July 31, 2017, Forterra completed the U.S. Pressure Pipe Divestiture, selling its U.S. concrete and steel pressure pipe business, which was part of the Company's Water Pipe and Products segment to Thompson Pipe Group ("TPG"), in exchange for approximately $23.2 million in cash, exclusive of fees and expenses, as well as certain assets relating to a U.S. drainage pipe and products manufacturing facility. The assets acquired, recognized at fair value, include $3.8 million of working capital, $1.8 million of machinery and equipment, and a customer intangible totaling $0.8 million. The U.S. Pressure Pipe Divestiture generated a pre-tax loss of $32.3 million recorded in other income (expense), net.

For the quarter ended June 30, 2017, the Company classified the assets and liabilities of its U.S. concrete and steel pressure pipe business as held for sale. Assets and liabilities which meet the held for sale criteria are carried at fair value less selling costs. An analysis indicated that the carrying value of the long-lived assets held for sale exceeded the fair value less costs to sell, and as a result, a pre-tax impairment charge of $7.5 million was recorded within impairment and exit charges during the year ended December 31, 2017. The long-lived assets' fair value was estimated using accepted cost approach methodologies using Level 3 inputs.

The total pre-tax loss of the U.S. concrete and steel pressure pipe business was $50.9 million for the year ended December 31, 2017 inclusive of the loss on U.S. Pressure Pipe Divestiture of $32.3 million, and long-lived asset impairment of $7.5 million. In 2016, the assets generated a pre-tax income of $0.2 million for the year ended December 31, 2016.

As of December 31, 2017, the Company classified the assets and liabilities associated with the Foley exchange transaction as held for sale. Assets and liabilities which meet the held for sale criteria are carried at the lesser of fair value less selling costs or carrying value. The Company conducted an analysis determining the fair value less costs to sell exceeded the carrying value of the long-lived assets held for sale, therefore no adjustment to the disposal group's value was recognized. The long-lived assets' fair value was estimated using accepted cost approach methodologies.

Assets and liabilities classified as held for sale on the Company's consolidated balance sheets at December 31, 2017 consisted of the following (in thousands):



	December 31,
	2017
Receivables, net	$	4,839
Inventories	7,403
Current assets held for sale	12,242
Property, plant and equipment, net	12,022
Goodwill	8,736
Intangible assets, net	4,627
Non-current assets held for sale	25,385
Total assets of disposal group classified as held for sale	$	37,627

Trade payables	$	4,286
Accrued liabilities	153
Deferred revenue	176
Current liabilities held for sale	4,615
Total liabilities of disposal group classified as held for sale	$	4,615

Receivables, net

12 Months Ended

Dec. 31, 2018

Receivables [Abstract]

Receivables, net

Receivables consist of the following at December 31, 2018 and 2017 (in thousands):



	December 31,
	2018			2017
Trade receivables	$	188,999		$	190,143
Amounts billed, but not yet paid under retainage provisions	2,065			1,091
Other receivables	9,545			5,453
Total receivables	$	200,609		$	196,687
Less: Allowance for doubtful accounts	(2,141		)	(4,033		)
Receivables, net	$	198,468		$	192,654

The Company records provisions for doubtful accounts in selling, general and administrative expenses in the statements of operations. The table below summarizes the Company's allowance for doubtful accounts for the periods presented (in thousands):



	Allowance for doubtful accounts
Balance at December 31, 2016	$	(898	)
Provisions for doubtful accounts	(2,947		)
Write-offs and adjustments	(188		)
Balance at December 31, 2017	$	(4,033	)
Recovery on doubtful accounts	1,224
Write-offs and adjustments	668
Balance at December 31, 2018	$	(2,141	)

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References + Details

Investment in equity method investee

12 Months Ended

Dec. 31, 2018

Equity Method Investments and Joint Ventures [Abstract]

Investment in equity method investee

The Company owns 50% of the voting Common Unit voting shares of Concrete Pipe & Precast LLC ("CP&P") and consequently, has recorded its investment in the Common Unit voting shares in accordance with ASC 323, Investments – Equity Method and Joint Ventures, under the equity method of accounting.

As part of the Acquisition in 2015, the Company determined the fair value of the assets purchased, including its investment in CP&P, in accordance with ASC 805. As part of that process the Company assigned a value of $56.3 million to the investment as of the date of Acquisition. As of December 31, 2018 and 2017, the Company's investment in CP&P amounted to $50.6 million and $54.4 million, respectively, which is included within the Drainage Pipe & Products segment. At December 31, 2018, the difference between the amount at which the Company's investment is carried and the amount of the Company's share of the underlying equity in net assets of CP&P was approximately $13.1 million. This difference relates to the Company's fair value assessment of the investment as part of the Acquisition, and this basis difference was primarily attributed to the value of land and equity method goodwill associated with the investment.

The following reflects the Company's distribution and earnings in the equity investment (in thousands):



	Year ended December 31,
	2018			2017			2016
Distribution received from CP&P	$	(13,141	)	$	(13,717	)	(13,293	)
Share of earnings in CP&P	10,234			12,432			12,019
Amortization of excess fair value of investment	(72		)	(72		)	(72	)

Property, plant and equipment, net

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property, plant and equipment, net

Property, plant and equipment, net consist of the following at December 31, 2018 and 2017 (in thousands):



	December 31,
	2018			2017
Machinery and equipment	$	373,881		$	343,827
Land, buildings and improvements	235,819			144,273
Other equipment	6,962			5,141
Construction-in-progress	32,448			30,295
Total property, plant and equipment	649,110			523,536
Less: accumulated depreciation	(156,943		)	(110,964		)
Property, plant and equipment, net	$	492,167		$	412,572

Depreciation expense totaled $52.9 million, $60.2 million and $54.1 million for the years ended December 31, 2018, 2017 and 2016, respectively, which is included in cost of goods sold and selling, general and administrative expenses in the statements of operations.

As of December 31, 2018 and 2017, gross assets recorded under capital leases, consisting primarily of land and buildings, were $52.1 million and $3.7 million, respectively, and accumulated depreciation was $1.0 million and $0.4 million, respectively.

Impairments

The Company recorded impairment charges primarily in conjunction with plant closings undertaken for purposes of achieving operating efficiencies and recognized asset impairment charges for its property, plant and equipment of $1.0 million for the year ended December 31, 2018. For the year ended December 31, 2017, the Company recorded $7.5 million of impairment charges primarily related to assets held for sale in conjunction with the sale of its U.S. concrete and steel pressure pipe business. See Note 3, Acquisitions and divestitures for additional details. Asset impairments are included in impairment and exit charges on the statements of operations. No impairment charges were recognized for the year ended December 31, 2016.

Goodwill and other intangible assets, net

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and other intangible assets, net

The Company has goodwill which has been recorded in connection with its acquisition of businesses. The following table summarizes the changes in goodwill by operating segment for the years ended December 31, 2018 and December 31, 2017 (in thousands):



	Drainage Pipe & Products			Water Pipe & Products			Total
Balance at December 31, 2016	$	168,866		$	322,581		$	491,447
Acquisitions	17,903			—			17,903
Assets held for sale	(8,736		)	—			(8,736		)
Impairment	—			(3,003		)	(3,003		)
Foreign currency and other adjustments	1,690			(3,160		)	(1,470		)
Balance at December 31, 2017	179,723			316,418			496,141
Acquisitions	9,951			—			9,951
Foreign currency and other adjustments	159			1,942			2,101
Balance at December 31, 2018	$	189,833		$	318,360		$	508,193

Goodwill is required to be tested for impairment at the reporting unit level. The Company has three reporting units which have goodwill. The Company uses a combination of an income approach and a market approach to determine the fair value of the reporting unit. The income approach uses a reporting unit's estimated future cash flows, discounted at the weighted average cost of capital of a hypothetical third-party buyer. The market approach estimates fair value by applying cash flow multiples to the reporting unit's operating performance. The multiples are derived from comparable publicly traded companies with similar operating and investment characteristics to the reporting unit. The calculation of business enterprise value is based on significant unobservable inputs, such as price trends, customer demand, material costs and discount rates, and are classified as Level 3 in the fair value hierarchy. The Company's impairment determinations involve significant assumptions and judgments, as discussed above. Different assumptions regarding any of these inputs could have a significant effect on the various valuations.

Upon early adoption of ASU 2017-04 during the second quarter of 2017, the Company began using a one-step quantitative approach that compares the business enterprise value of each reporting unit with its carrying value.

During the second quarter of 2017, the Company performed interim goodwill impairment testing of its Canadian concrete pressure pipe reporting unit after identifying indicators it was more-likely-than-not the reporting unit's carrying value was in excess of its fair value. The reporting unit's operating results are primarily driven by large contractual projects, for which future demand has not materialized, driving changes in the valuation inputs and assumptions supporting the reporting unit's fair value. As a result of the interim impairment testing, the Company determined the carrying value of the reporting unit's goodwill was fully impaired and a goodwill impairment charge of $3.0 million was recorded during the second quarter of 2017.

The Company performed its annual goodwill impairment test as of October 1st of each year by conducting a quantitative analysis for all of the Company’s reporting units. No annual impairment charge was recorded in any period presented.

In 2018, the calculated fair value of the reporting units exceeded book value in all circumstances; however, for the US Pipe reporting unit, the fair value exceeded the book value by only 4.2%. The amount of goodwill allocated to the reporting unit was $318.4 million as of December 31, 2018. If the projected rate of long-term growth of cash flows or revenues declined by 1.0%, the fair value of the US Pipe reporting unit would still exceed the book value.

Intangible assets other than goodwill at December 31, 2018 included the following (in thousands):



	Weighted average amortization period (in years)	Gross carrying amount as of December 31, 2018		Accumulated amortization			Net carrying value as of December 31, 2018
Customer relationships	10	$	231,056	$	(99,583	)	$	131,473
Trade names	10	39,390		(14,867		)	24,523
Patents	11	23,629		(12,325		)	11,304
Customer backlog	0.8	13,206		(13,206		)	0
Non-compete agreements	5	15,618		(6,044		)	9,574
In-Process R&D	Indefinite-lived	6,354		—			6,354
Other	10	867		(306		)	561
Total intangible assets		$	330,120	$	(146,331	)	$	183,789

Intangible assets other than goodwill at December 31, 2017 included the following (in thousands):



	Weighted average amortization period (in years)	Gross carrying amount as of December 31, 2017		Accumulated amortization			Net carrying value as of December 31, 2017
Customer relationships	10	$	229,294	$	(61,294	)	$	168,000
Trade names	10	39,528		(9,896		)	29,632
Patents	11	23,629		(7,900		)	15,729
Customer backlog	0.8	13,726		(13,322		)	404
Non-compete agreements	5	8,325		(3,782		)	4,543
In-Process R&D	Indefinite-lived	6,354		—			6,354
Other	10	867		(225		)	642
Total intangible assets		$	321,723	$	(96,419	)	$	225,304

Amortization expense totaled $52.5 million, $55.4 million and $39.4 million for the years ended December 31, 2018, December 31, 2017 and December 31, 2016, respectively, which is included in selling, general and administrative expenses in the statements of operations.

The estimated amortization expense relating to amortizable intangible assets for the next five years is as follows (in thousands):



Year ended	Intangible assets subject to amortization
2019	$	46,079
2020	39,734
2021	31,657
2022	22,428
2023	16,036
Total	$	155,934

Fair value measurement

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Fair value measurement

The Company's financial instruments consist primarily of cash and cash equivalents, trade and other receivables, derivative instruments, accounts payable, long-term debt, capital leases, accrued liabilities and the tax receivable agreement obligation. The carrying value of the Company's trade receivables, other receivables, trade payables, the asset based revolver and accrued liabilities approximates fair value due to their short-term maturity or other terms related to these financial instruments. The Company may adjust the carrying amount of certain non-financial assets to fair value on a non-recurring basis when they are impaired.

The estimated carrying amount and fair value of the Company’s financial instruments and other assets and liabilities measured and recorded at fair value on a recurring basis are as follows for the dates indicated (in thousands):



	Fair value measurements at December 31, 2018 using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value December 31, 2018
Recurring:
Non-current assets
Derivative asset	$	—	$	6,659	$	—	$	6,659

	Fair value measurements at December 31, 2017 using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value December 31, 2017
Recurring:
Non-current assets
Derivative asset	$	—	$	5,251	$	—	$	5,251
Current liabilities
Derivative liability	—		6,286		—		6,286

Liabilities and assets classified as level 2 which are recorded at fair value are valued using observable market inputs. The fair values of derivative assets and liabilities are determined using quantitative models that utilize multiple market inputs including interest rates and exchange rates to generate continuous yield or pricing curves and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. The fair values of derivative assets and liabilities include adjustments for market liquidity, counter-party credit quality and other instrument-specific factors, where appropriate. In addition, the Company incorporates within its fair value measurements a valuation adjustment to reflect the credit risk associated with the net position. Positions are netted by counter-parties, and fair value for net long exposures is adjusted for counter-party credit risk while the fair value for net short exposures is adjusted for the Company’s own credit risk.

The estimated carrying amount and fair value of the Company’s financial instruments and liabilities for which fair value is only disclosed is as follows (in thousands):



		Fair value measurements at December 31, 2018 using
	Carrying Amount December 31, 2018	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total Fair Value December 31, 2018
Non-current liabilities
2016 Senior Term Loan	$1,188,605	—	$1,103,628	—	$1,103,628
Tax receivable agreement payable	88,775	—	—	82,912	82,912



		Fair value measurements at December 31, 2017 using
	Carrying Amount December 31, 2017	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total Fair Value December 31, 2017
Non-current liabilities
2016 Senior Term Loan	$1,193,787	—	$1,151,981	—	$1,151,981
Tax receivable agreement payable	117,563	—	—	75,865	75,865

The fair value of debt is the estimated amount the Company would have to pay to transfer its debt, including any premium or discount attributable to the difference between the stated interest rate and market rate of interest at the balance sheet date. Fair values are supported by observable market transactions when available.

The determination of the fair value of the tax receivable agreement payable was determined using a discounted cash flow methodology using level 3 inputs as defined by ASC 820. The determination of fair value required significant judgment, including estimates of the timing and amounts of various tax attributes. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. Actual results could differ from these estimates.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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