TO OUR SHAREHOLDERS

MARCH 15, 2016

Rainy weather hampered construction through the second quarter of 2015, limiting sales
opportunities during the first half of the year. As construction projects resumed, demand for our
products substantially improved allowing us to end the year with a 0.9% increase in tons of cement
sold, while ready-mixed concrete cubic yards sold trailed 2014 by 6.8%. Operating income for the year
2015 increased 16.0% as compared to 2014. A slight improvement in net sales, primarily due to price
increases, coupled with reductions in cost of sales and selling and administrative expenses generated a
$2.3 million increase in income from operations. Major improvements in the stock market in the fall
prompted the Company to sell off approximately 33%, or $11.4 million of our equity portfolio,
resulting in a realized gain of $8.3 million. The subsequent decline in market prices gave us the
opportunity to begin buying back into the market at lower prices later in the year and continuing into
2016. Other income for 2015 also included $0.6 million of proceeds related to the settlement of a
lawsuit. Net income for the year 2015 was $18.3 million compared to $11.3 million for the year 2014.

After five years of engineering and construction, and an investment of approximately $20.0
million, we are now in compliance with the Environmental Protection Agency’s NESHAP regulations.
During 2015, we spent approximately $13.7 million on capital expenditures. With the completion of
our NESHAP projects, we redirected our capital budget toward projects to improve our production and
energy efficiency in the cement business, upgrading our ready-mixed concrete trucks and mixers, and
investing in a new corporate financial software system. Looking forward to 2016, we anticipate
spending $15.0 million to $17.0 million on capital expenditures as we continue to strive to maintain up-
to-date equipment to maximize our production efficiencies and to provide a safe working environment
for our employees.

We are pleased to report that at a special meeting of the Board of Directors, Kent A. Webber
was elected to the position of Executive Vice President. Mr. Webber began his employment at
Monarch in 2012 as Subsidiary Operations Manager. Prior to joining the Monarch family, he spent 30
years in the ready-mixed concrete and construction industries. Mr. Webber has a degree in Business
Administration from the University of Kansas. We welcome him to our team of hard-working,
dedicated employees.

With our upgraded equipment and team of experienced, reliable and dedicated employees, we
are prepared to meet the challenges of the upcoming construction season and look forward to
continuing to supply our many loyal customers with a quality product in a timely manner. We wish to
recognize and congratulate our Monarch employees for working all of 2015 with no lost time
accidents. With grateful appreciation for the continued support of our steadfast stockholders and the
blessings and support of our Heavenly Father, we optimistically look forward to success in the coming
year.
WALTER H. WULF, JR.
President and Chairman of the Board

PROUD OF OUR HERITAGE | PASSIONATE ABOUT OUR FUTURE

 2015 FINANCIAL RESULTS

in thousands, except per share data 2015 2014 2013 2012 2011
FOR THE YEAR
Net sales $ 147,900 $ 146,898 $ 127,442 $ 128,842 $ 110,097
Net income from continuing operations 18,252 11,442 8,122 10,430 3,540
Net loss from discontinued operations - (127) (2,679) (7,300) (1,950)
Net income 18,252 11,314 5,443 3,130 1,590

PER SHARE INFORMATION

Basic earnings (loss) per share:
From continuing operations $ 4.72 $ 2.89 $ 2.03 $ 2.60 $ 0.87
From discontinued operations - (0.03) (0.67) (1.82) (0.48)
Net earnings per share 4.72 2.86 1.36 0.78 0.39
Cash dividends declared per share 1.00 0.92 0.92 0.92 0.92
Stockholders’ equity per share 32.22 30.10 28.85 25.64 24.58

YEAR END POSITION

Total assets $ 182,014 $ 179,867 $ 174,106 $ 181,832 $ 174,224
Long-term debt obligations 4,342 5,861 12,061 9,684 7,303

Consolidated net sales for the year ended December 31, 2015 were approximately $147.9 million, an increase of
$1.0 million as compared to the year ended December 31, 2014. Sales in our Cement Business were higher by $3.7 million
while sales in our Ready-Mixed Concrete Business decreased $2.7 million. Cement Business sales increased $0.6 million
due to a 0.9% increase in volume sold and $3.1 million due to higher prices related to increased delivery charges. Ready-
mixed concrete sales decreased $4.1 million due to a 6.8% decrease in cubic yards sold partially offset by $1.8 million in
price increases. In addition, sales of brick, block and other sundry items declined by $0.4 million.

Consolidated cost of sales for 2015 were $0.8 million lower than cost of sales for 2014. Cost of sales in our Cement
Business increased $2.5 million and cost of sales in our Ready-Mixed Concrete Business decreased $3.3 million. Cement
Business cost of sales increased $0.4 million due to the 0.9% increase in volume sold in addition to an increase of
$2.1 million primarily due to additional delivery costs. Ready-Mixed Concrete Business cost of sales decreased
$3.7 million due to the 6.8% decrease in cubic yards of ready-mixed concrete sold partially offset by $1.3 million due to
increases in production costs. Cost of sales for brick, block, aggregates and other sundry items decreased $0.9 million.

As a result of the above sales and cost of sales factors, our overall gross profit rate for the year ended December 31, 2015
was 22.1% compared to 21.1% for the year ended December 31, 2014. The gross profit rate for Ready-Mixed Concrete
Business slightly improved from 10.5% for 2014 to 11.6% for 2015. The Cement Business gross profit rate declined from
34.2% for 2014 to 34.1% for 2015.

Selling, general and administrative expenses decreased by $0.6 million or 3.5% for the year ended December 31, 2015 as
compared to the year ended December 31, 2014. These costs are normally considered fixed costs that do not vary
significantly with changes in sales volume.

Gain on sale of equity investments increased by $8.4 million for the year ended December 31, 2015 compared to the year
ended December 31, 2014. Other, net contains miscellaneous nonoperating income (expense) items excluding interest
income, interest expense, gains (losses) on sale of equity investments and dividend income. Significant items in Other, net
for 2015 include proceeds related to the settlement of a lawsuit of approximately $640,000. Significant items in Other, net
for 2014 include rental income of approximately $580,000.

The effective tax rates for 2015 and 2014 were 33.1% and 28.9%, respectively. The Company’s effective tax rate differs
from the federal and state statutory income tax rate primarily due to the effects of percentage depletion. During 2015 and
2014, percentage depletion decreased the effective tax rate by 2.8% and 5.3%, respectively.
Certain statements in this Annual Report constitute “forward-looking statements”. Except for historical information, the statements made in this report are forward-
looking statements that involve risks and uncertainties. You can identify these statements by forward-looking words such as “should”, “anticipate”, “believe”, “intend”,
“may”, “forecast” or similar words. In particular, statements with respect to the timing, scope, cost and benefits of our proposed and recently completed capital
improvements and expansion plans, including potential fuel savings, projected installation costs and other cash needs, and our forecasted cement sales are all forward-
looking statements. You should be aware that forward-looking statements involve known and unknown risks, uncertainties, and other factors that may affect the actual
results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others: general economic and business
conditions; competition; raw material and other operating costs; costs of capital equipment; changes in business strategy or expansion plans; demand for our Company’s
products; cyclical and seasonal nature of our business; the affect weather has on our business; the affect of environmental and other government regulation; and the
affect of federal and state funding on demand for our products.
 Independent Auditor’s Report

Board of Directors and Stockholders

The Monarch Cement Company
Humboldt, Kansas

We have audited the accompanying consolidated financial statements of The Monarch Cement Company and
subsidiaries (the Company), which comprise the consolidated balance sheets as of December 31, 2015 and 2014, and
the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for the
years then ended, and the related notes to the consolidated financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the design,
implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair
presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2015 and 2014, and the results of its operations and its cash
flows for the years then ended in accordance with accounting principles generally accepted in the United States of
America.
Other Matter
Our audit was conducted for the purpose of forming an opinion on the basic consolidated financial statements as a
whole. The Selected Financial Data and Results of Operations are presented for purposes of additional analysis and is
not a required part of the basic consolidated financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic consolidated financial statements and, accordingly, we do not
express an opinion or provide any assurance on it.

Kansas City, Missouri

March 15, 2016
 Report of Independent Registered Public Accounting Firm

Audit Committee, Board of Directors and Stockholders

The Monarch Cement Company
Humboldt, Kansas

We have audited the accompanying consolidated financial statements of The Monarch Cement Company and
subsidiaries (the Company), which include the consolidated statements of income, comprehensive income, stockholders’
equity and cash flows for the year ended December 31, 2013. The Company’s management is responsible for these
consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements
based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. Our audit included examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management and evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the results
of the Company’s operations and its cash flows for the year ended December 31, 2013, in conformity with accounting
principles generally accepted in the United States of America.

Kansas City, Missouri

March 14, 2014
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2015 AND 2014

ASSETS 2015 2014

CURRENT ASSETS:
Cash and cash equivalents $ 6,612,180 $ 7,262,355
Receivables, less allowances of $524,000 in 2015 and
$448,000 in 2014 for doubtful accounts 14,377,672 12,239,757
Inventories, priced at cost which is not in excess of market-
Finished cement $ 5,827,904 $ 4,192,466
Work in process 3,637,693 4,083,846
Building products 3,734,990 3,798,841
Fuel, gypsum, paper sacks and other 7,074,199 5,741,983
Operating and maintenance supplies 13,903,745 13,722,587
Total inventories $ 34,178,531 $ 31,539,723
Refundable federal and state income taxes - 391,029
Prepaid expenses 599,766 1,569,523
Total current assets $ 55,768,149 $ 53,002,387
PROPERTY, PLANT AND EQUIPMENT, at cost, less
accumulated depreciation and depletion of $213,306,179
in 2015 and $201,504,780 in 2014 83,456,790 84,411,110
DEFERRED INCOME TAXES 11,295,736 9,212,537
INVESTMENTS 22,446,008 26,106,762
INVESTMENTS IN AFFILIATES 6,238,697 4,094,804
OTHER ASSETS 2,808,971 3,039,524
$ 182,014,351 $ 179,867,124

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable $ 5,481,096 $ 9,069,939
Current portion of term loan 1,428,571 5,901,521
Current portion of other long-term debt - 175,000
Accrued liabilities
Dividends 965,197 889,530
Compensation and benefits 2,832,064 3,132,616
Federal and state income taxes 910 -
Miscellaneous taxes 657,508 552,012
Other 5,103,987 2,662,910
Total current liabilities $ 16,469,333 $ 22,383,528
LONG-TERM DEBT 4,342,006 5,860,566
ACCRUED POSTRETIREMENT BENEFITS 23,609,837 25,969,091
ACCRUED PENSION EXPENSE 13,213,113 9,253,554
STOCKHOLDERS’ EQUITY
Capital stock, par value $2.50 per share, one vote per share -
Authorized 10,000,000 shares, Issued and Outstanding 2,607,705
shares at 12/31/2015 and 2,547,937 shares at 12/31/2014 $ 6,519,263 $ 6,369,843
Class B capital stock, par value $2.50 per share, supervoting
rights of ten votes per share, restricted transferability,
convertible at all times into Capital Stock on a share-for-share
basis - Authorized 10,000,000 shares, Issued and Outstanding
1,253,084 shares at 12/31/2015 and 1,319,587 shares at 12/31/2014 3,132,710 3,298,967
Additional paid-in-capital 2,485,125 2,485,125
Retained earnings 117,683,646 103,482,537
Accumulated other comprehensive income (loss) (5,440,682) 763,913
TOTAL STOCKHOLDERS’ EQUITY $ 124,380,062 $ 116,400,385
$ 182,014,351 $ 179,867,124

See accompanying Notes to the Consolidated Financial Statements

4.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013

2015 2014 2013

NET SALES $ 147,899,622 $ 146,897,728 $ 127,441,599
COST OF SALES 115,187,416 115,944,332 106,770,282
Gross profit from operations $ 32,712,206 $ 30,953,396 $ 20,671,317
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 15,780,087 16,351,345 15,154,992
Income from operations $ 16,932,119 $ 14,602,051 $ 5,516,325
OTHER INCOME (EXPENSE)
Interest income $ 94,592 $ 105,869 $ 77,293
Interest expense (230,388) (253,941) (299,169)
Gain (loss) on sale of equity investments 8,343,407 (12,706) 3,891,296
Dividend income 558,323 753,895 1,673,430
Other, net 1,013,357 696,558 5,353
$ 9,779,291 $ 1,289,675 $ 5,348,203
Income from continuing operations before income taxes $ 26,711,410 $ 15,891,726 $ 10,864,528
PROVISION FOR INCOME TAXES 8,845,000 4,595,000 2,870,000
Equity in affiliate earnings, net of tax 385,196 144,996 127,446
Net income from continuing operations $ 18,251,606 $ 11,441,722 $ 8,121,974

Discontinued operations:
Loss from operations of Tulsa Dynaspan, Inc. and Beaver
Lake Inc. (including a gain on disposal of assets of $-0-,
$-0-, and $3,438,000, respectively) before income taxes $ - $ (177,306) $ (4,059,263)
BENEFIT FROM INCOME TAXES - (50,000) (1,380,000)
Net loss from discontinued operations $ - $ (127,306) $ (2,679,263)

NET INCOME $ 18,251,606 $ 11,314,416 $ 5,442,711

Basic earnings (loss) per share:

From continuing operations $ 4.72 $ 2.89 $ 2.03
From discontinued operations - (0.03) (0.67)
Net earnings per share $ 4.72 $ 2.86 $ 1.36

See accompanying Notes to the Consolidated Financial Statements

5.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013

2015 2014 2013

NET INCOME $ 18,251,606 $ 11,314,416 $ 5,442,711
OTHER COMPREHENSIVE INCOME (LOSS),
net of deferred tax

UNREALIZED APPRECIATION ON AVAILABLE-

FOR-SALE SECURITIES (Net of deferred tax expense
of $1,896,000, $364,000 and $1,700,000 for 2015, 2014
and 2013, respectively) 2,847,407 543,294 2,551,296

RECLASSIFICATION ADJUSTMENT FOR SALE OF

SECURITIES INCLUDED IN NET INCOME (Net of deferred
tax (benefit) expense of $3,336,000, $(4,000) and $1,556,000
for 2015, 2014 and 2013, respectively) (5,007,407) 8,706 (2,335,296)

PENSION AND POSTRETIREMENT, CURRENT YEAR

ACTUARIAL GAIN (LOSS) (Net of deferred tax (benefit)
expense of $(4,456,500), $(1,825,000) and $2,262,000 for
2015, 2014 and 2013, respectively) (6,683,361) (2,728,768) 3,388,337

PENSION AND POSTRETIREMENT, CURRENT YEAR

PRIOR SERVICE CREDIT (Net of deferred tax expense
of $1,974,000, $-0- and $4,036,000 for 2015, 2014 and 2013,
respectively) 2,961,193 - 6,055,710

AMORTIZATION OF PENSION AND POSTRETIREMENT

PRIOR SERVICE COST (Net of deferred tax (benefit)
expense of $905,000, $919,000 and $(20,000) for 2015,
2014 and 2013, respectively) (1,357,404) (1,378,933) 28,976

AMORTIZATION OF PENSION AND POSTRETIREMENT

LOSS (Net of deferred tax benefit of $(689,000), $(538,000)
and $(798,000) for 2015, 2014 and 2013, respectively) 1,034,977 808,231 1,197,133

OTHER COMPREHENSIVE INCOME (LOSS),

net of deferred tax $ (6,204,595) $ (2,747,470) $ 10,886,156
COMPREHENSIVE INCOME $ 12,047,011 $ 8,566,946 $ 16,328,867

See accompanying Notes to the Consolidated Financial Statements

6.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013

Company Stockholders
Accumulated Other
Additional Comprehensive
Class B Paid-In- Retained Treasury Income (Loss),
Capital Stock Capital Stock Capital Earnings Stock Net of Tax Total
BALANCE
JANUARY 1, 2013 $ 6,490,117 $ 3,543,968 $ 2,485,125 $ 97,758,013 $ - $ (7,374,773) $ 102,902,450
Net income - - - 5,442,711 - - 5,442,711
Dividends declared ($0.92 per share) - - - (3,663,381) - - (3,663,381)
Transfer of shares 125,471 (125,471) - - - - -
Purchase of capital stock - - - - (1,135,555) - (1,135,555)
Retirement of capital stock (116,758) - - - (1,018,797) 1,135,555 - - -
Change in unrealized appreciation
on available-for-sale securities - - - - - 2,551,296 2,551,296
Reclassification adjustment for
sale of securities in net income - - - - - (2,335,296) (2,335,296)
Pension and Postretirement
current year prior service credit - - - - - 6,055,710 6,055,710
Pension and Postretirement
current year actuarial gain - - - - - 3,388,337 3,388,337
Amortization of Pension and
Postretirement prior service cost - - - - - 28,976 28,976
Amortization of Pension and
Postretirement loss - - - - - 1,197,133 1,197,133
BALANCE
DECEMBER 31, 2013 $ 6,498,830 $ 3,418,497 $ 2,485,125 $ 98,518,546 $ - $ 3,511,383 $ 114,432,381
Net income - - - 11,314,416 - - 11,314,416
Dividends declared ($0.92 per share) - - - (3,625,306) - - (3,625,306)
Transfer of shares 21,508 (21,508) - - - - -
Purchase of capital stock - - - - (137,406) - (137,406)
Repurchases of capital stock
due to reverse stock split - - - - (2,836,230) - (2,836,230)
Retirement of capital stock (150,495) (98,022) - (2,725,119) 2,973,636 - -
Change in unrealized appreciation
on available-for-sale securities - - - - - 543,294 543,294
Reclassification adjustment for
sale of securities in net income - - - - - 8,706 8,706
Pension and Postretirement current
year actuarial loss - - - - - - (2,728,768) (2,728,768)
Amortization of Pension and
Postretirement prior service cost - - - - - (1,378,933) (1,378,933)
Amortization of Pension and
Postretirement loss - - - - - 808,231 808,231
BALANCE
DECEMBER 31, 2014 $ 6,369,843 $ 3,298,967 $ 2,485,125 $ 103,482,537 $ - $ 763,913 $ 116,400,385
Net income - - - 18,251,606 - - 18,251,606
Dividends declared ($1.00 per share) - - - (3,863,060) - - (3,863,060)
Transfer of shares 166,257 (166,257) - - - - -
Purchase of capital stock - - - - (204,274) - (204,274)
Retirement of capital stock (16,837) - - (187,437) 204,274 - -
Change in unrealized appreciation
on available-for-sale securities - - - - - 2,847,407 2,847,407
Reclassification adjustment for
sale of securities in net income - - - - - (5,007,407) (5,007,407)
Pension and Postretirement
current year prior service credit - - - - - 2,961,193 2,961,193
Pension and Postretirement current
year actuarial loss - - - - - - (6,683,361) (6,683,361)
Amortization of Pension and
Postretirement prior service cost - - - - - (1,357,404) (1,357,404)
Amortization of Pension and
Postretirement loss - - - - - 1,034,977 1,034,977
BALANCE
DECEMBER 31, 2015 $ 6,519,263 $ 3,132,710 $ 2,485,125 $ 117,683,646 $ - $ (5,440,682) $ 124,380,062

See accompanying Notes to the Consolidated Financial Statements

7.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013

2015 2014 2013

OPERATING ACTIVITIES:
Net income $ 18,251,606 $ 11,314,416 $ 5,442,711
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 14,686,217 13,363,263 11,952,217
Income from equity method investments, net of dividends (376,613) (137,706) (121,823)
Deferred income taxes 2,054,391 1,185,040 (385,119)
Gain on disposal of assets (528,472) (556,900) (3,606,441)
Realized (gain) loss on sale of equity investments (8,343,407) 12,706 (3,891,296)
Postretirement benefits and pension expense (5,362,790) (3,459,331) 1,203,141
Change in assets and liabilities:
Receivables, net (2,137,915) (73,091) 5,095,602
Inventories (2,638,808) (116,231) 1,491,058
Income taxes refundable/payable 391,939 (391,029) 1,441,206
Prepaid expenses 969,757 (527,490) (383,664)
Other assets 9,862 1,001 2,511
Accounts payable and accrued liabilities 1,426,477 848,624 (5,809,770)
Net cash provided by operating activities $ 18,402,244 $ 21,463,272 $ 12,430,333

INVESTING ACTIVITIES:
Acquisition of property, plant and equipment $ (14,108,388) $ (12,606,217) $ (15,359,307)
Proceeds from disposals of property, plant and equipment 668,115 808,092 6,555,352
Payment for acquisition of business, net of cash acquired - (2,494,500) -
Payment for purchases of available-for-sale equity investments (2,977,360) (36,630) (1,116,664)
Proceeds from disposals of available-for-sale equity investments 11,381,520 129,797 5,373,412
Payment for acquisition of equity method investments (1,767,280) (528,465) (680,610)
Net cash used for investing activities $ (6,803,393) $ (14,727,923) $ (5,227,817)

FINANCING ACTIVITIES:
Decrease in line of credit, net $ - $ - $ (110,137)
Proceeds from bank loans - - 4,472,950
Payments on bank loans (5,901,521) (1,428,572) (1,428,571)
Payments on other long-term debt (264,988) (405,058) (366,287)
Cash dividends paid (3,787,393) (3,648,170) (3,674,123)
Purchase of capital stock (2,295,124) (392,946) (1,135,555)
Net cash used for financing activities $ (12,249,026) $ (5,874,746) $ (2,241,723)

Net increase (decrease) in cash and cash equivalents $ (650,175) $ 860,603 $ 4,960,793
Cash and Cash Equivalents, beginning of year 7,262,355 6,401,752 1,440,959
Cash and Cash Equivalents, end of year $ 6,612,180 $ 7,262,355 $ 6,401,752

Supplemental disclosures:
Interest paid, net of amount capitalized $ 230,388 $ 253,941 $ 299,484
Income taxes paid 7,088,045 4,300,000 1,475,000
Income tax refund 688,325 46,947 1,549,378
Capital equipment additions included in accounts payable and
accrued liabilities 351,542 809,081 736,848
Capital stock repurchases included in accounts payable 489,840 2,580,690 -

See accompanying Notes to the Consolidated Financial Statements

8.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, 2014 AND 2013

(1) NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Nature of Operations--The Monarch Cement Company (Monarch) is principally engaged in the

manufacture and sale of portland cement. The marketing area for Monarch’s products consists primarily of the State of
Kansas, the State of Iowa, southeast Nebraska, western Missouri, northwest Arkansas and northern Oklahoma. Sales are
made primarily to contractors, ready-mixed concrete plants, concrete products plants, building materials dealers and
governmental agencies. Subsidiaries of Monarch (which together with Monarch are referred to herein as the
“Company”) sell ready-mixed concrete, concrete products and sundry building materials within Monarch’s marketing area.

b) Principles of Consolidation--Monarch has direct control of certain operating companies that have been
deemed to be subsidiaries within the meaning of accounting principles generally accepted in the United States of
America. Accordingly, the financial statements of such companies have been consolidated with Monarch’s financial
statements. All significant intercompany transactions have been eliminated in consolidation.

We use the equity method to account for investments in companies if the investment provides the ability to exercise
significant influence, but not control, over operating and financial policies of the investee. Investments accounted for under
the equity method are recorded initially at cost and subsequently adjusted for our share of the net income or loss and cash
contributions and distributions to or from these entities. Our proportionate share of the net income or loss of these
companies is included in consolidated net income.

c) Use of Estimates--The preparation of financial statements in conformity with accounting principles

generally accepted in the United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at 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.

d) Reclassifications-- Certain reclassifications have been made to the 2014 financial statements for the
adoption of ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which were deemed to be immaterial. These
reclassifications had no effect on earnings.

e) Cash Equivalents--The Company considers all liquid investments with original maturities of three months
or less which we do not intend to roll over beyond three months to be cash equivalents. At December 31, 2015 and 2014,
cash equivalents consisted primarily of money market investments and repurchase agreements with various banks.

The Federal Deposit Insurance Corporation’s (FDIC) standard maximum deposit insurance amount fully guarantees
all deposit accounts up to $250,000. At times, cash in banks may be in excess of the FDIC limits. At December 31, 2015,
the Company had $2.5 million in sweep arrangement accounts that were not covered by FDIC’s general deposit insurance
in addition to $4.2 million in general deposits that exceeded FDIC limits. The sweep accounts assets are normally 80%
invested in U.S. Treasury securities and repurchase agreements for those securities. We have not experienced any losses in
our accounts due to exceeding FDIC insurance limits or lack of FDIC coverage.

f) Investments--Equity securities for which the Company has no immediate plan to sell but that may be sold
in the future are classified as available for sale. If the fair value of the equity security is readily determinable, it is carried at
fair value and unrealized gains and losses are recorded, net of related income tax effects, in stockholders’ equity. Realized
gains and losses, based on the specifically identified cost of the security, are included in net income. Equity securities
whose fair value is not readily determinable are carried at cost unless the Company is aware of significant adverse effects
which have impaired the investments. Equity method investments are recorded initially at cost and subsequently adjusted
for our share of the net income or loss and cash contributions or distributions to or from these entities. Our cost and equity
method investments generally involve entities for which it is not practical to determine fair values.

g) Receivables--Accounts receivable are stated at the amount billed to customers. The Company provides an
allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information
and existing economic conditions. Accounts receivable are ordinarily due 30 days after the issuance of the
invoice. Accounts past due are considered delinquent. Delinquent receivables are written off based on individual credit
evaluation and specific circumstances of the customer.
9.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, 2014 AND 2013

h) Inventories--Inventories of finished cement and work in process are recorded at the lower of cost or
market on a last-in, first-out (LIFO) basis. Total inventories reported under LIFO amounted to $9.5 million and
$8.3 million as of December 31, 2015 and 2014, respectively. Under the average cost method of accounting (which
approximates current cost), these inventories would have been $2.8 million, $2.9 million and $4.4 million higher than those
reported at December 31, 2015, 2014 and 2013, respectively. The cost of manufactured items includes all material, labor,
factory overhead and production-related administrative overhead required in their production.

We incurred a permanent reduction in the LIFO layers of work in process and cement inventories resulting in
liquidation gains of $0.1 million and $0.2 million for the years 2014 and 2013, respectively. The liquidation gains were
recognized as reductions of cost of sales. We did not incur any material liquidation gains in the LIFO layers for 2015.

Other inventories are purchased from outside suppliers. Fuel and other materials are priced by the first-in, first-out
(FIFO) method while operating and maintenance supplies are recorded using the average cost method.

Inventories of fuel, gypsum, paper sacks and other are used in the manufacture of cement. The operating and
maintenance supplies consist primarily of spare parts for our cement manufacturing equipment.

i) Property, Plant and Equipment--Property, plant and equipment are stated at cost of acquisition or
construction. The Company capitalizes the cost of interest on borrowed funds used to finance the construction of property,
plant and equipment. During 2015, 2014 and 2013, the Company capitalized approximately $74,500, $80,100 and $88,400,
respectively, of interest expense related to current construction projects.

The Company records depreciation, depletion and amortization related to manufacturing operations in Cost of
Sales; those related to general operations are recorded in Selling, General and Administrative Expenses; and those related to
non-operational activities are in Other, net on the Consolidated Statements of Income. The approximate amounts included
in each line item as of December 31, 2015, 2014 and 2013 are as follows:

2015 2014 2013

Cost of Sales $ 13,500,000 $ 12,400,000 $ 10,900,000
Selling, General and Administrative Expenses 900,000 600,000 300,000
Other, net 300,000 300,000 300,000
Total $ 14,700,000 $ 13,300,000 $ 11,500,000

Depreciation of property, plant and equipment is provided by charges to operations over the estimated useful lives
of the assets using accelerated methods. The majority of the Company’s buildings, machinery and equipment are
depreciated using 200% (double) declining balance depreciation. Some of the assets used in the Cement Business
manufacturing process are depreciated using 150% declining balance depreciation. The Company switches to straight line
depreciation once it exceeds the amount computed under the declining balance method being used until the asset is fully
depreciated. The Company does not depreciate construction in process. Depletion rates for quarry lands are designed to
amortize the cost over the estimated recoverable reserves. Expenditures for improvements that significantly increase the
assets’ useful lives are capitalized while maintenance and repairs are charged to expense as incurred.

The Company continually evaluates whether events or changes in circumstances have occurred that would indicate
that the carrying amount of long-lived assets may not be recoverable. An impairment loss would be recognized and the
asset cost would be adjusted to fair value when undiscounted estimated future cash flows expected to result from the use of
the asset and its eventual disposition is less than its carrying amount. The impairment loss would be the amount by which
the carrying amount of a long-lived asset exceeds its fair value. Various factors that the Company considers in its review
include changes in expected use of the assets, changes in technology, changes in operating performance and changes in
expected future cash flows. No asset impairment was recognized during the years ended December 31, 2015, 2014 and
2013.

j) Other Current Liabilities--Accrued liabilities-Other contains approximately $3.4 million and $1.3 million
related to prepayments held on account in 2015 and 2014, respectively.

10.
 k) Income Taxes--Deferred tax assets and liabilities are recognized for the tax effects of differences between
the financial statement and tax bases of assets and liabilities. A valuation allowance is established to reduce deferred tax
assets if it is more likely than not that a deferred tax asset will not be realized.

l) Revenue Recognition--The Company records revenue from the sale of cement, ready-mixed concrete,
concrete products and sundry building materials following delivery of the products to customers. In the event the Company
receives advance payment on orders, we defer revenue recognition until the product is delivered.

Our Ready-Mixed Concrete Business previously included the concrete construction division of Tulsa Dynaspan,
Inc. (TDI) which involved short-term and long-term contracts. The operations of TDI were discontinued in 2013 due to
consecutive year operating losses. See Note 4, “Discontinued Operations”, for further discussion. Short-term contracts for
specific projects were generally of three to six months in duration. Long-term contracts relate to specific projects with
terms in excess of one year from the contract date. Revenues from contracts using the cost-to-cost measures of completion
were recognized based on the ratio of contract costs incurred to date to total estimated contract costs. Full provision was
made for any anticipated losses. The majority of the long-term contracts would allow only scheduled billings and contained
retainage provisions under which 5% to 10% of the contract invoicing may be withheld by the customer pending project
completion.

m) Cost of Sales--The Company considers all production and shipping costs, (gain) loss on disposal of
operating assets, inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs and internal
transfer costs as cost of sales.

n) Selling, General and Administrative Expenses--Selling, general and administrative expenses consist of
sales personnel salaries and expenses, promotional costs, accounting personnel salaries and expenses, director and
administrative officer salaries and expenses, legal and professional expenses and other expenses related to overall corporate
costs.

o) Other, net--Other, net contains miscellaneous nonoperating income (expense) items excluding interest
income, interest expense, gains (losses) on sale of equity investments, realized loss on impairment of equity investments
and dividend income. Significant items in Other, net for 2015 include proceeds related to the settlement of a lawsuit of
approximately $640,000. Significant items in Other, net for 2014 include rental income of approximately $580,000.

p) Earnings per Share--Basic earnings per share is based on the weighted average common shares
outstanding during each year. Diluted earnings per share are based on the weighted average common and common
equivalent shares outstanding each year. Monarch has no common stock equivalents and therefore does not report diluted
earnings per share. The weighted average number of shares outstanding was 3,864,518 in 2015, 3,961,871 in 2014 and
3,996,771 in 2013.

q) Taxes Collected from Customers and Remitted to Governmental Authorities--Taxes collected from
customers and remitted to governmental authorities are presented in the accompanying consolidated statements of income
on a net basis.

r) Self Insurance--The Company has elected to self-insure certain costs related to employee and retiree
health and accident benefits programs. Costs resulting from self-insured losses are charged to income when
incurred. Health benefits provided to employees in the Ready-Mixed Concrete Business and health and accident benefits
provided to employees in the Cement Business are totally self-insured but are subject to an individual stop loss of
$100,000 and $200,000 for the Ready-Mixed Concrete Business and the Cement Business, respectively, with an aggregate
stop loss of 120% for both lines of business.

s) Disclosure about Fair Value of Financial Instruments--Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Cash and cash equivalents, receivables, accounts payable and short and long-term debt have carrying values that
approximate fair values. Investment fair values equal quoted market prices, if available. If quoted market prices are not
available, fair value is estimated based on quoted market prices of similar securities. If it is not practicable to estimate the

11.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, 2014 AND 2013

fair value of an investment, the investment is recorded at cost and evaluated quarterly for events that may adversely impact
its fair value.

t) Intangibles - Goodwill and Other--Goodwill represents the excess of cost over the fair value of net assets
of businesses acquired. Goodwill acquired in a purchase business combination is not amortized, but is tested for impairment
on an annual basis. The Company performed a qualitative assessment of its goodwill during the fourth quarter of 2015 and
determined that its goodwill is not impaired and therefore no impairment was required.

(2) DEREGISTRATION

In August 2014, the Board of Directors voted to pursue a “going private” transaction in order to deregister our
stock from the Securities and Exchange Commission (SEC). Our primary purpose was to reduce our ongoing accounting,
legal and other costs associated with being a publicly traded company. In December 2014, the Company effected a 1-for-
600 reverse stock split of our Capital Stock and Class B Capital Stock. Each stockholder of record owning fewer than 600
shares of either class of stock before the reverse stock split had their shares of such class cancelled and converted into the
right to receive $30.00 for each share of such class held of record prior to the reverse stock split in lieu of receiving a
fractional post-reverse stock split share of such class. Immediately following the reverse stock split, the Company effected
a 600-for-1 forward stock split of each one issued and outstanding share of its Capital Stock and Class B Capital Stock (and
including each fractional share of such class in excess of one share). As a result of the reverse stock split, our total record
holders of Capital Stock and Class B Capital Stock dropped below 300 in each class, as required to deregister with the SEC.
In December 2014, the Company cancelled 55,332 shares of Capital Stock and 39,209 shares of Class B Capital Stock at a
cost of $30.00 per share. As of December 31, 2015 and December 31, 2014, accounts payable included $0.5 million and
$2.6 million, respectively, for the purchase of shares which had not yet been presented to the Company for exchange.

(3) ACQUISITIONS

On July 1, 2014, the Company purchased all of the common stock of Russell Block Company, Inc. (Russell Block),
which is included in our Ready-Mixed Concrete Business, primarily to obtain additional markets and to improve
manufacturing efficiencies. The consideration for acquiring Russell Block’s stock totaled $2.5 million. Russell Block was
then liquidated and its assets were distributed to the Company.

In accordance with Accounting Standards Codification (ASC) 805, the Company determined the assets and
liabilities acquired constituted a business and applied purchase accounting to the assets acquired and the liabilities assumed.
The following table summarizes the consideration paid for acquisition of the assets acquired and the liabilities assumed at
the acquisition date as well as the fair value at the acquisition date:

Consideration:
Cash paid, gross $ 2,499,500

Fair Value of assets acquired and liabilities assumed:

Assets
Current assets (including cash of $5,250) $ 192,044
Property, plant and equipment 747,500
Other assets 1,959,956
Liabilities
Current liabilities (400,000)
Total: $ 2,499,500

(4) DISCONTINUED OPERATIONS

Through the first quarter of 2014, Beaver Lake Concrete, Inc. (BLC) and TDI were classified as discontinued
operations since these companies were no longer producing and selling ready-mixed concrete or issuing construction
contracts. BLC leased out its ready-mixed facilities, but retained its cement transport trucks to haul cement for third parties.
Prior to discontinuing their ready-mixed concrete operations, BLC transported cement for their own ready-mixed concrete
operation but did not haul for other companies. TDI’s ready-mixed concrete division was sold during 2013 and the facilities

12.
that were not sold are currently under a lease/purchase agreement. BLC’s and TDI’s current revenue streams are derived
from different operations from those that were discontinued and the current operations are expected to continue into the
foreseeable future. As a result, their operating results for the second quarter of 2014 and going forward are included in
continuing operations. BLC’s and TDI’s operating results, reported in discontinued operations, for the quarter ended
March 31, 2014 and the year ended December 31, 2013 are as follows:

2014 2013
Sales $ 154,760 $ 16,140,553
Pretax loss (177,306) (4,059,263)

During the year ended December 31, 2013, $6.4 million of the $6.6 million in proceeds from the disposals of
property, plant and equipment were from the disposal of assets held for sale related to the discontinued operations of TDI.

(5) FAIR VALUE

Realized gains (losses) on equity investments are computed using the specific identification method. Fair value is
the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize
the use of unobservable inputs. There is a hierarchy of 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 - observable inputs other than Level 1 prices 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 supported by little or no market activity and are significant to the fair value of the
assets or liabilities.

The aggregate amount of equity securities carried at cost for which the Company has not elected the fair value
option, was $0.9 million at December 31, 2015. The remaining $21.6 million in equity security investments are stated at
fair value. As of December 31, 2014, the aggregate amount of equity securities carried at cost was $0.6 million and the
remaining $25.5 million in equity security investments were stated at fair value. The following table summarizes the bases
used to measure certain assets at fair value on a recurring basis in the balance sheet at December 31, 2015 and 2014:

Fair Value Measurements Using:

Quoted Prices
in Active Significant
Markets for Other Significant
Identical Observable Unobservable
December 31, 2015 Assets Inputs Inputs
Assets: Fair Value (Level 1) (Level 2) (Level 3)
Available-for-sale equity securities
Cement industry $ 9,337,662 $ 9,337,662 $ - $ -
General building materials industry 6,533,795 6,533,795 - - -
Oil & gas refining & marketing industry 4,781,025 4,781,025 - - -
Residential construction industry 940,896 940,896 - - -
Total assets measured at fair value $ 21,593,378 $ 21,593,378 $ - $ -

13.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, 2014 AND 2013

Fair Value Measurements Using:

Quoted Prices
in Active Significant
Markets for Other Significant
Identical Observable Unobservable
December 31, 2014 Assets Inputs Inputs
Assets: Fair Value (Level 1) (Level 2) (Level 3)
Available-for-sale equity securities
Cement industry $ 13,307,384 $ 13,307,384 $ - $ -
General building materials industry 7,262,508 7,262,508 - -
Oil & gas refining & marketing industry 3,944,549 3,944,549 - -
Residential construction industry 1,019,350 1,019,350 - -
Total assets measured at fair value $ 25,533,791 $ 25,533,791 $ - $ -

Cash and cash equivalents have carrying values that approximate fair value using Level 1 prices. Receivables,
accounts payable and short and long-term debt have carrying values that approximate fair values using Level 2 inputs. The
Company’s valuation techniques used to measure the fair value of its marketable equity securities were derived from quoted
prices in active markets for identical assets (Level 1 inputs). Investments that are recorded at cost or the equity method are
evaluated quarterly for events that may adversely impact their carrying value.

There were no transfers between levels and there were no significant changes in the valuation techniques during the
period ended December 31, 2015. The Company has no liabilities at either date requiring remeasurement to fair value on a
recurring basis in the balance sheet. The Company has no additional assets or liabilities at either date requiring
remeasurement to fair value on a non-recurring basis in the balance sheet.

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized
losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time
that individual trade lots of securities have been in a continuous unrealized loss position at December 31, 2015 and 2014:

Available-for-sale equity securities Less than 12 Months 12 Months or Greater Total

Unrealized Unrealized Unrealized
December 31, 2015 Fair Value Losses Fair Value Losses Fair Value Losses
Cement industry $ 534,091 $ 73,816 $ - $ - $ 534,091 $ 73,816
General building materials industry 821,760 96,202 - - 821,760 96,202
Oil & gas refining & marketing industry 566,640 38,698 - - 566,640 38,698
Residential construction industry 602,316 69,520 - - 602,316 69,520
Total $2,524,807 $ 278,237 $ - $ - $2,524,807 $ 278,237

December 31, 2014

Residential construction industry $ - $ - $ 57,942 $ 186 $ 57,942 $ 186
Total $ - $ - $ 57,942 $ 186 $ 57,942 $ 186

(6) INVESTMENTS

Cost Method Investments

The Company owns stock in a privately-owned company in the ethanol production industry. The investment, for
which fair value approximates carrying value, was evaluated at December 31, 2015 and 2014 for impairment. The
evaluations of the investment for each period’s impairment analysis were based on the specific identification of shares held
and quoted prices in markets that are not active (Level 2) and no impairments were identified. As a result of the evaluations,
the Company does not consider the cost method investment to be impaired at December 31, 2015 or 2014.

14.
Fair Value Investments

Impairment Analysis

December 31, 2015--The Company’s investments in available-for sale securities carried at fair value were
evaluated every quarter for impairment by comparing the specifically identified cost of each investment to market price. As
a result of these evaluations, the Company did not identify any other-than-temporary impairments in investments which
would have resulted in a recognized loss in earnings of equity investments. The Company did identify some specific
investments in available-for-sale equity securities that were not other-than-temporarily impaired resulting in the recognition
of unrealized losses (see table above in Note 5 “Fair Value”). These unrealized losses were immaterial.

December 31, 2014--The Company’s investments in available-for sale securities carried at fair value were
evaluated every quarter for impairment by comparing the specifically identified cost of each investment to market price. As
a result of these evaluations, the Company did not identify any other-than-temporary impairments in investments which
would have resulted in a recognized loss in earnings of equity investments. The Company did identify some specific
investments in available-for-sale equity securities that were not other-than-temporarily impaired resulting in the recognition
of unrealized losses (see table above in Note 5 “Fair Value”). These unrealized losses were immaterial.

Investment Results

The investment results for the years ended December 31, 2015 and 2014 are as follows for available-for-sale equity
securities carried at fair value:

Amortized Gross Unrealized Holding Fair

December 31, 2015 Cost Gains Losses Value
Available-for-sale equity securities
Cement industry $ 2,340,000 $ 7,000,000 $ - $ 9,340,000
General building materials industry 2,950,000 3,580,000 - 6,530,000
Oil & gas refining & marketing industry 1,150,000 3,630,000 - 4,780,000
Residential construction industry 970,000 - 30,000 940,000
Total available-for-sale equity securities $ 7,410,000 $ 14,210,000 $ 30,000 $ 21,590,000

Total gross unrealized gains, net of losses $ 14,180,000

Less: Deferred taxes on unrealized holding gains 5,672,000
Unrealized gains recorded in equity, net of deferred tax $ 8,508,000

December 31, 2014

Available-for-sale equity securities
Cement industry $ 2,940,000 $ 10,370,000 $ - $ 13,310,000
General building materials industry 3,600,000 3,660,000 - 7,260,000
Oil & gas refining & marketing industry 340,000 3,600,000 - 3,940,000
Residential construction industry 870,000 150,000 - 1,020,000
Total available-for-sale equity securities $ 7,750,000 $ 17,780,000 $ - $ 25,530,000

Total gross unrealized gains, net of losses $ 17,780,000

Less: Deferred taxes on unrealized holding gains 7,112,000
Unrealized gains recorded in equity, net of deferred tax $ 10,668,000

Equity Method Investments

The Company owns common stock of GFI, a privately-owned company in the brick industry. The Company has
determined that it has the ability to exercise significant influence, but not control, over the operating and financial policies
of GFI. Consequently, the equity method of accounting is used for the investment.

Pertinent information about the Company’s investment in GFI is as follows:

15.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, 2014 AND 2013

2015 2014 2013

Carrying value $ 6,238,697 $ 4,094,804 $ 3,428,633
Ownership percentage 32.04% 22.77% 19.34%
Cash dividends received $ 8,583 $ 7,290 $ 5,623
Undistributed earnings 1,367,711 982,515 837,519
Difference between carrying amount and
the underlying equity in net assets* (39,663) 94,450 172,654
Equity in earnings 385,196 144,996 127,446

* The difference between carrying amount and the underlying equity in net assets is in a memo account
allocated to goodwill.

During 2015, 2014, and 2013, the Company purchased $1.2 million, $0.9 million and $0.9 million, respectively, of
brick from GFI in arm’s length transactions in the normal course of business for resale to third parties. The Company
eliminated intra-entity profits or losses for its proportionate share of GFI’s common stock for inventory still remaining with
the Company until such profits or losses were realized in transactions with third parties. Amounts due to GFI for Company
purchases were not significant at December 31, 2015 and 2014.

The Company’s equity method investment is reviewed for impairment on a periodic basis or if an event occurs or
circumstances change that indicate the carrying amount may be impaired. This assessment is based on a review of the
investment’s performance and a review of indicators of impairment to determine if there is evidence of a loss in value of the
investment. Factors the Company considers include:

 Absence of the Company’s ability to recover the carrying amount;

 Inability of the equity affiliate to sustain an earnings capacity which would justify the carrying amount of the
investment; and
 Significant litigation, bankruptcy or other events that could impact recoverability.

For an equity investment with impairment indicators, the Company measures fair value on the basis of discounted cash
flows or other appropriate valuation methods (Level 3). If it is probable that the Company will not recover the carrying
amount of its investment, the impairment is considered other-than-temporary and recorded in earnings, and the equity
investment balance is reduced to its fair value accordingly. After review, the Company does not consider its equity method
investment, for which fair value approximates carrying value, to be impaired at December 31, 2015 or 2014.

(7) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment and their estimated useful lives at December 31, 2015 and 2014 consisted of:

Lives (Years) 2015 2014

Quarry land $ 2,004,549 $ 2,004,549
Other land 7,766,002 7,666,286
Buildings and improvements 15 – 39 32,129,782 31,567,400
Cement manufacturing equipment 15 – 25 149,367,023 142,028,581
Ancillary equipment 5 – 10 14,203,144 13,440,661
Ready-mix and concrete production
machinery and equipment 5 – 15 36,180,544 35,622,446
Transportation and mobile equipment 3–7 45,931,655 44,102,480
Office machinery, equipment,
furniture and fixtures 3 – 10 5,869,410 3,627,426
Construction in process 3,310,860 5,856,061
$ 296,762,969 $ 285,915,890
Less: Accumulated depreciation and depletion 213,306,179 201,504,780
$ 83,456,790 $ 84,411,110

16.
(8) REVOLVING LOAN AND LONG-TERM DEBT

On December 31, 2015, the Company entered into a new credit agreement with its current lender, BOKF, NA dba
Bank of Oklahoma (Bank of Oklahoma), which amended and restated its revolving loan. The Company’s current
agreements provide for a secured credit commitment consisting of a $10.0 million term loan maturing December 31, 2017
and a $15.0 million revolving loan maturing on December 31, 2018. The previous agreement included a $10.0 million
advancing term loan that matured on December 31, 2015. Interest rates on the Company’s revolving loan are variable and
based on the rate of interest regularly published by the Wall Street Journal and designated as the U.S. Prime Rate (hereto
referred to as the WSJ prime rate) less 1.50% with a 1.50% interest rate minimum or floor. Interest rates on the Company’s
term loan are variable and based on the WSJ prime rate less 1.25% with a 1.75% interest rate minimum or floor. The
agreements require the Company to pledge its investment account, receivable accounts and inventory to Bank of Oklahoma
as collateral for the term loan and revolving loan. The Company is obligated to maintain at least $12.0 million in its
pledged investment account. The carrying value of receivables, inventory and the investment account pledged as collateral
was $14.4 million, $34.2 million and $20.6 million, respectively as of December 31, 2015. The agreements also contain
financial covenants requiring the Company, as of the end of any fiscal quarter, to maintain a minimum tangible net worth
before accumulated other comprehensive income (loss) of $95.0 million and a minimum tangible net worth after
accumulated other comprehensive income (loss) of $85.0 million. The Company was in compliance with these
requirements at year end. As of December 31, 2015, the Company owed $5.7 million on its term loan and $0.0 on its
revolving loan.

As of December 31, 2015 and 2014, there was $0.0 and $0.0, respectively, borrowed against the revolving loan.
The interest rate was 2.00% and 1.75% on December 31, 2015 and 2014, respectively, and is payable quarterly. As of
December 31, 2015 and 2014, there was approximately $5.7 million and $7.1 million, respectively, borrowed on the term
loan. The interest rate was 2.25% and 2.00% on December 31, 2015 and 2014, respectively, and is payable quarterly. As of
December 31, 2015 and 2014, there was approximately $0.0 million and $4.5 million, respectively, borrowed on the
advancing term loan. The interest rate was 2.00% and 1.75% on December 31, 2015 and 2014, respectively, and is payable
quarterly.

At December 31, 2015 the Note payable, bank in the table below is comprised of a $5.7 million term loan. The
$0.1 million in Other long-term debt is related to noncompete payment obligations. At December 31, 2014 the $11.6
million in Note payable, bank in the table below is comprised of a $7.1 million term loan and $4.5 million advancing term
loan. The $0.1 million in Other long-term debt is related to noncompete payment obligations.

2015 2014
Note payable, bank (a) $ 5,714,285 $ 11,615,807
Other 56,292 146,280
$ 5,770,577 $ 11,762,087
Less current maturity of bank note payable 1,428,571 5,901,521
Total long-term debt $ 4,342,006 $ 5,860,566
(a)
Term loan due December 31, 2017; payable $357,143 quarterly plus interest. Revolving
loan due December 31, 2018; quarterly payments of interest with outstanding principal
and accrued interest due at maturity.

Aggregate annual maturities of long-term debt as of December 31, 2015 are:

2016 $ 1,428,571
2017 4,307,392
2018 22,787
2019 11,827
$ 5,770,577

17.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, 2014 AND 2013

(9) INCOME TAXES

The components of the provision for federal and state income taxes in the accompanying consolidated statements
of income are as follows:
2015 2014 2013
Taxes currently payable $ 6,791,000 $ 3,410,000 $ 3,200,000
Deferred income taxes 2,054,000 1,185,000 (330,000)
Provision for income taxes $ 8,845,000 $ 4,595,000 $ 2,870,000

A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax expense is as
follows:
2015 2014 2013
Computed at statutory rate
(34%; over $10 million-35%) $ 9,250,000 $ 5,462,000 $ 3,694,000
Increase (decrease) resulting from:
State income taxes, net of federal
tax benefit 545,000 275,000 155,000
Percentage depletion (741,000) (834,000) (494,000)
Domestic production activities deduction (193,000) (48,000) -
Dividends received deduction (88,000) (154,000) (400,000)
Other 72,000 (106,000) (85,000)
Provision for income taxes $ 8,845,000 $ 4,595,000 $ 2,870,000

The tax effects of significant temporary differences relating to deferred taxes, net of valuation allowances, on the
balance sheets were:
2015 2014
Allowance for doubtful accounts $ 209,000 $ 180,000
Accrued vacation 503,000 455,000
Depreciation (630,000) (856,000)
Postretirement benefits 9,295,000 10,338,000
Pension liability 5,416,000 3,797,000
Unrealized holding gains (5,672,000) (7,112,000)
Tax carryforwards 1,025,000 900,000
Impairment on investments 345,000 719,000
Other, net 804,736 791,537
Net long-term deferred tax assets* $ 11,295,736 $ 9,212,537

*Net of valuation allowance of $2,052,000 for 2015 and 2014.

Some of the Company’s subsidiaries file separate state income tax returns resulting in net operating loss
carryforwards. In addition, some subsidiaries separately filed federal income tax returns in prior years which also resulted
in net operating loss carryforwards. The provision (benefit) for income taxes and income tax liabilities recorded in the
financial statements include those separate calculations. The deferred taxes resulting from these and other tax carryforwards
are included in the above table net of valuation allowances. The valuation allowance has been used to reduce the tax benefit
associated with the tax carryforwards. The following table presents the expiration dates of the Company’s carryforwards,
net of valuation allowances, for tax purposes as of December 31, 2015:

Tax
Expiration Date Carryforwards
2023 $ 137,000
2024 263,000
2025 214,000
2026 129,000
2028 1,000
2029 114,000
2030 167,000
$ 1,025,000

18.
 The Company uses a recognition threshold of “more likely than not” that a tax position would be sustained upon
examination before any part of the benefit of that position is recognized in the Company’s financial statements.

The Company, or one of its subsidiaries, files income tax returns in the U.S. Federal jurisdiction and various state
jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal or state income tax examinations by
tax authorities for years before 2012. The Company believes it is not subject to any significant tax risk. The Company does
not have any accrued interest or penalties associated with any unrecognized tax benefits, nor were any significant interest
expenses recognized during the years ended December 31, 2015, 2014 and 2013.

(10) PENSION AND OTHER POSTRETIREMENT BENEFITS

Postretirement Benefits

Monarch provides certain postretirement health care and life insurance benefits to all retired employees in the
Cement Business who, as of their retirement date, meet the eligibility requirements. These benefits are self-insured by
Monarch and are paid out of Monarch’s general assets. Monarch expects 2016 cash expenditures for this plan to be
approximately $1,155,000 which is equal to the net expected benefit payments for the year. In 2015, we negotiated a
change in our postretirement health benefits for our Des Moines union employees from a defined benefit to a defined
contribution structure.

Monarch uses a December 31 measurement date for the plans. At December 31, 2015 and 2014, the current portion
of the accrued benefit cost of approximately $1,155,000 and $1,375,000, respectively, is recorded in compensation and
benefits. Information about the plans’ funded status and postretirement cost follows:

2015 2014
Change in benefit obligation:
Beginning of year $ 27,344,091 $ 26,542,379
Service cost 568,845 495,549
Interest cost 1,101,504 1,132,234
Actuarial loss 1,760,952 447,776
Benefits paid* (1,057,879) (1,273,847)
Plan amendments (4,952,676) -
Benefit obligation at end of year $ 24,764,837 $ 27,344,091

Change in fair value of plan assets:

Beginning of year $ - $ -
Employer contributions* 1,057,879 1,273,847
Benefits paid* (1,057,879) (1,273,847)
Fair value of plan asset at end of year $ - $ -

Weighted Average Assumptions used to determine

benefit obligations:
Discount rate 4.00% 4.00%
Trend rate 7.5% for 8% for
fiscal 2015 fiscal 2014
decreasing decreasing
.5%/yr to 5% .5%/yr to 5%

Funded status, end of year:

Fair value of plan assets $ - $ -
Benefit obligations (24,764,837) (27,344,091)
Funded status = year-end benefit liability $ (24,764,837) $ (27,344,091)

*Amounts are net of retiree prescription drug subsidy received during the fiscal year.

19.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, 2014 AND 2013

Accrued Postretirement Benefits represents the accumulated difference between actual contributions and actual
expenses from past years. It is updated from the prior year as follows:

2015 2014
A. Accrued postretirement benefits at beginning of year $ (25,855,072) $ (27,370,754)
B. Net periodic postretirement benefit income (66,334) (241,835)
C. Employer contributions 1,118,907 1,329,046
D. Retiree drug subsidy 61,028 55,199
E. Accrued postretirement benefits at end of year $ (24,730,859) $ (25,855,072)
(A) - (B) + (C) - (D)

Following are the components of net periodic benefit cost:

2015 2014 2013

Components of net periodic benefit cost:
Service cost $ 568,845 $ 495,549 $ 780,225
Interest cost 1,101,504 1,132,234 1,608,234
Amortization of prior service cost (2,362,132) (2,397,661) (50,752)
Recognized net actuarial loss 625,449 528,043 661,499
Net periodic benefit cost $ (66,334) $ (241,835) $ 2,999,206

Weighted Average Assumptions used to determine

net periodic postretirement benefit cost:
Discount rate 4.00% 4.50% 4.50%
Trend rate 7.5% for 8% for 8% for
fiscal 2015 fiscal 2014 fiscal 2013
decreasing decreasing decreasing
.5%/yr to 5% .5%/yr to 5% 1%/yr to 5%

Amounts recognized in the balance sheets consist of:

2015 2014
Current liability $ (1,155,000) $ (1,375,000)
Noncurrent liability (23,609,837) (25,969,091)
Net amount recognized $ (24,764,837) $ (27,344,091)

Amounts recognized in accumulated other comprehensive income consist of:

2015 2014
Net actuarial loss $ 10,384,546 $ 9,249,043
Prior service credit (10,350,568) (7,760,024)
$ 33,978 $ 1,489,019

Other changes in benefit obligations recognized in other comprehensive income:

2015 2014 2013

Current year actuarial (gain)/loss $ 1,760,952 $ 447,776 $ (2,563,073)
Amortization of actuarial loss (625,449) (528,043) (661,499)
Current year prior service credit (4,952,676) - (10,091,710)
Amortization of prior service credit 2,362,132 2,397,661 50,752
Total recognized in other comprehensive income $ (1,455,041) $ 2,317,394 $ (13,265,530)

Estimated amounts that will be amortized from accumulated other comprehensive income into net periodic
postretirement benefit cost in 2016:

20.
 Actuarial loss $ 929,991
Prior service credit (3,215,800)
Total $ (2,285,809)

The amortization schedule for prior service costs is as follows:

12/31/2015
Date Initial Initial Outstanding Annual
Description Established Amount Period Balance Amortization
Lifetime Maximums 12/31/2009 $ (268,983) 5.30 years $ - $ -
Change in Benefit Structure 12/31/2013 (10,091,710) 4.30 years (5,397,892) (2,346,909)
Change in Benefit Structure 12/31/2015 (4,952,676) 5.70 years (4,952,676) (868,891)
$ (10,350,568) $ (3,215,800)

ASC Topic 715 requires the disclosure of the impact on certain items of a percentage point increase and decrease in
the medical trend rates. These amounts are illustrated as follows:

1% Increase 1% Decrease
Interest cost and service cost for 2015
Amount prior to change $ 1,670,349 $ 1,670,349
Amount after 1 percentage point change 1,992,851 1,417,891
Increase (decrease) 322,502 (252,458)

Accumulated postretirement benefit obligation at December 31, 2015

Amount prior to change $ 24,764,837 $ 24,764,837
Amount after 1 percentage point change 28,750,219 21,559,651
Increase (decrease) 3,985,382 (3,205,186)

On December 8, 2003, the Medicare Prescription Drug Improvement Modernization Act of 2003 (the Act) was
signed into law. The Act introduces a prescription drug benefit under Medicare Part D, as well as a federal subsidy to
sponsors of retiree health care benefit plans that provide benefits at least actuarially equivalent to Medicare Part D. The
Company has concluded that the benefits provided to most of our retirees are actuarially equivalent to Medicare Part D
under the Act.

The accumulated postretirement benefit obligation as of December 31, 2015 is shown below:

Assuming Medicare Part D Subsidy receipts $ 24,764,837

Assuming no Medicare Part D Subsidy receipts 25,647,701

Expected benefit payments and expenses (net of employee contributions), shown separately for the next five fiscal
years, and in the aggregate for the subsequent five-year period are presented below:

December 31, 2016 $ 1,154,461

December 31, 2017 1,185,474
December 31, 2018 1,242,696
December 31, 2019 1,265,051
December 31, 2020 1,293,377
Five fiscal years ending December 31, 2025 6,447,575

Pension Plans

Monarch has noncontributory defined benefit pension plans covering substantially all employees in the Cement
Business who meet the eligibility requirements. Monarch’s funding policy is to contribute annually an amount within the
minimum/maximum range of tax deductible contributions. In 2016, there are no minimum expected contributions to the
plans.

Monarch uses a December 31 measurement date for the plans. Information about the plans’ funded status and
pension cost follows:

21.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, 2014 AND 2013

Change in benefit obligation: 2015 2014

Benefit obligation at beginning of year $ 47,768,966 $ 44,116,353
Service cost 930,560 859,880
Interest cost 1,904,787 1,984,365
Actuarial loss 2,729,538 3,017,816
Plan amendment 17,483 -
Benefits paid (2,299,804) (2,209,448)
Benefit obligation at end of year $ 51,051,530 $ 47,768,966

Change in plan assets:

Fair value of plan assets at beginning of year $ 38,515,412 $ 36,107,226
Actual return on plan assets (3,591,191) 1,799,418
Employer contributions 5,214,000 2,818,216
Benefits paid (2,299,804) (2,209,448)
Fair value of plan assets at end of year $ 37,838,417 $ 38,515,412

Funded status, end of year:

Fair value of plan assets $ 37,838,417 $ 38,515,412
Benefit obligation 51,051,530 47,768,966
Funded status = pension liability, end of year $ (13,213,113) $ (9,253,554)

The actuarial formula used to calculate the projected benefit obligation takes into account future increases in
pension contributions that would take place as the employees’ salaries increase. The accumulated benefit obligation uses an
actuarial formula to calculate the projected benefit obligation which assumes that the employees cease to work for the
Company at the time the estimation is made. The plans’ accumulated benefit obligation follows:

2015 2014
Accumulated benefit obligation, end of year $ 49,213,132 $ 46,041,518

Amounts recognized in the balance sheets consist of:

2015 2014
Current liability $ - $ -
Noncurrent liability (13,213,113) (9,253,554)
Net amount recognized $ (13,213,113) $ (9,253,554)

Amounts recognized in accumulated other comprehensive income not yet recognized as components of net periodic
benefit cost consist of:
2015 2014
Net actuarial loss $ 23,914,966 $ 15,634,585
Prior service cost 448,238 530,483
$ 24,363,204 $ 16,165,068
Less: Deferred tax 9,750,000 6,470,000
Additional pension liability, net of deferred tax $ 14,613,204 $ 9,695,068

Other changes in plan assets and benefit obligations recognized in other comprehensive income:

2015 2014 2013

Current year actuarial (gain)/loss $ 9,378,909 $ 4,105,992 $ (3,087,264)
Amortization of actuarial loss (1,098,528) (818,188) (1,333,634)
Current year prior service loss 17,483 - -
Amortization of prior service cost (99,728) (99,728) (99,728)
$ 8,198,136 $ 3,188,076 $ (4,520,626)
Less: Deferred tax 3,280,000 1,280,000 (1,810,000)
Minimum pension liability, net of deferred tax $ 4,918,136 $ 1,908,076 $ (2,710,626)

22.
 Estimated amounts that will be amortized from accumulated other comprehensive income into net periodic pension
cost in 2016:
Actuarial loss $ 1,857,000
Prior service cost 100,000
Total to be amortized $ 1,957,000

The amortization schedule for prior service costs is as follows:

12/31/2015 2015
Established Initial Initial Outstanding Amortization
Description Dec. 31 of: Amount Period Balance Amount
Unrecognized Prior Service Cost 1999 37,715 16.53 years $ 1,203 $ 2,282
2001 409,804 15.74 years 45,412 26,028
2003 22,267 13.23 years 2,071 1,683
2007 876,119 13.41 years 353,455 65,333
2009 55,026 12.50 years 28,614 4,402
2015 17,483 11.17 years 17,483 -
$ 448,238 $ 99,728

Cumulative employer contributions in excess of net periodic pension cost are as follows:

2015 2014
A. Cumulative balance at beginning of year $ 6,911,514 $ 4,967,865
B. Net periodic pension cost 975,423 874,567
C. Contributions 5,214,000 2,818,216
D. Cumulative balance at end of year $ 11,150,091 $ 6,911,514
(A) - (B) + (C)

The weighted average assumptions used to determine net pension cost and benefit obligations as of December 31,
2015, 2014 and 2013 are as follows:
2015 2014 2013
Benefit obligation:
Discount rate 4.00% 4.00% 4.50%
Expected return on plan assets 7.50% 8.00% 8.00%
Rate of compensation increase (Staff plan only) 3.50% 3.50% 3.50%
Pension cost:
Discount rate 4.00% 4.50% 4.50%
Expected return on plan assets 8.00% 8.00% 8.00%
Rate of compensation increase (Staff plan only) 3.50% 3.50% 3.50%

The following table presents the components of net periodic pension cost as of December 31, 2015, 2014 and 2013:

2015 2014 2013

Service cost $ 930,560 $ 859,880 $ 870,115
Interest cost 1,904,787 1,984,365 1,937,423
Expected return on plan assets (3,058,180) (2,887,594) (2,349,451)
Amortization of prior service cost 99,728 99,728 99,728
Recognized net actuarial loss 1,098,528 818,188 1,333,634
Net periodic pension expense $ 975,423 $ 874,567 $ 1,891,449

The Company has estimated the long-term rate of return on plan assets based primarily on historical returns on plan
assets as well as current facts and circumstances.

Plan assets are held by a trustee bank. A fund manager has been retained to make investment decisions within
guidelines specified by Monarch. The guidelines permit investment in both equities and fixed income securities including
common stocks, corporate bonds and debentures and U.S. Government securities. An investment committee appointed by
the Board also invests a portion of the funds in equity securities. Asset allocation is primarily based on a strategy to provide
stable earnings through investing in interest-generating or fixed income investments while still permitting the plan to

23.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, 2014 AND 2013

recognize potentially higher returns through investments in equity securities. Focusing on balancing the risks and rewards
of each broad asset class, the percentage of allocation between fixed income and equity investments for 2015 and 2014 are
as follows:
Equities 60%
Fixed Income 40%

The pension investment guidelines strive for diversification of equity securities among the various market sectors
and do not permit participation in higher risk investment strategies involving hedging activities and the use of derivative
instruments.

The plan allows a 5% fluctuation before assets are rebalanced. During periods of extreme market volatility, the
fluctuation may exceed 5% before rebalancing is complete. At December 31, 2015 and 2014, plan assets by category were
as follows:
2015 2014
Equities 61% 65%
Debt Securities 36% 35%
Other 3% -

Following is a description of the valuation methodologies used for pension plan assets measured at fair value on a
recurring basis and recognized in the accompanying balance sheets, as well as the general classification of pension plan
assets pursuant to the valuation hierarchy.

Fair value prices for all securities in the pension plan portfolio are provided by our trustee bank which utilizes an
internationally recognized independent pricing service. Where quoted market prices are available in an active market, plan
assets are classified within Level 1 of the valuation hierarchy. Level 1 plan assets include equity securities which were
priced at the market close. Level 2 assets have observable inputs other than Level 1 prices. Plan assets are classified within
Level 3 of the hierarchy when relevant observable inputs for a security are not available.

We have established control procedures in which we independently assess the pricing obtained from the trustee
bank which utilizes the pricing service. These internal processes include obtaining and reviewing available reports on
controls at the trustee bank and pricing service, evaluating the prices for reasonableness given market changes,
investigating anomalies and confirming determinations through discussions with the trustee bank.

The fair value of Monarch’s pension plan assets by asset category at December 31, 2015 and 2014 are as follows:

Fair Value Measurements Using:

Quoted Prices
in Active Significant Significant
Markets for Observable Unobservable
Identical Assets Inputs Inputs
2015 Total (Level 1) (Level 2) (Level 3)
Cash and cash equivalents $ 1,051,369 $ 1,051,369 $ - $ -
Equity securities:
Materials 3,696,957 3,696,957 - -
Industrials 3,283,133 3,283,133 - -
Telecommunication 1,286,407 1,286,407 - -
Consumer discretion 1,527,409 1,527,409 - -
Consumer staples 924,286 924,286 - -
Energy 2,303,053 2,303,053 - -
Financials 4,483,399 4,483,399 - -
Healthcare 1,143,849 1,143,849 - -
Information technology 2,367,647 2,367,647 - -
Utilities 1,341,047 1,341,047 - -
Miscellaneous 472,584 472,584 - -
Fixed income securities: -
Intermediate Duration Fund 13,957,277 13,957,277 - -
Total $ 37,838,417 $ 37,838,417 $ - $ -

24.
 Fair Value Measurements Using:
Quoted Prices
in Active Significant Significant
Markets for Observable Unobservable
Identical Assets Inputs Inputs
2014 Total (Level 1) (Level 2) (Level 3)
Cash and cash equivalents $ 304,568 $ 304,568 $ - $ -
Equity securities:
Materials 3,223,603 3,223,603 - - -
Industrials 3,103,833 3,103,833 - - -
Telecommunication 1,827,414 1,827,414 - - -
Consumer discretion 1,548,248 1,548,248 - - -
Consumer staples 2,134,133 2,134,133 - - -
Energy 3,363,120 3,363,120 - - -
Financials 3,837,911 3,837,911 - - -
Healthcare 1,304,270 1,304,270 - - -
Information technology 2,594,502 2,594,502 - - -
Utilities 1,478,947 1,478,947 - - -
Miscellaneous 376,092 376,092 - - -
Fixed income securities: - - -
Intermediate Duration Fund 13,418,771 13,418,771 - --
Total $ 38,515,412 $ 38,515,412 $ - $ -

The plans’ expected benefit payments as of December 31, 2015, shown separately for the next five fiscal years and
in the aggregate for the subsequent five-year period, are presented below:

2016 $ 2,858,588
2017 2,867,661
2018 2,894,100
2019 2,980,959
2020 3,114,178
Five fiscal years ending
December 31, 2025 15,704,604

The Company has defined contribution plans covering substantially all permanent employees of the Ready-Mixed
Concrete Business. These plans allow the Company, at its discretion, to match the employee’s contributions. For the 2015,
2014 and 2013 plan years, the Company matched 25% of the first 6% of the employee’s compensation up to a maximum
match of $2,500. The Company contributed $60,252, $66,354 and $70,910 to these plans for the years 2015, 2014 and
2013, respectively. The Company expects to contribute approximately $60,000 to these plans in 2016.

The Company contributes to multiemployer defined benefit pension plans under the terms of collective bargaining
agreements that cover its union-represented employees. The risks of participating in these multiemployer plans are different
from single-employer plans in the following aspects:

a) Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of
other participating employers.

b) If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by
the remaining participating employers.

c) If the Company chooses to stop participating in one of its multiemployer plans, the Company may be required to
pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

The Company’s participation in these plans for the annual period ended December 31, 2015, is outlined in the table
below. The Company considers only one plan it contributes to under collective bargaining agreements to be significant. The
“EIN/Pension Plan Number” column provides the plan’s Employer Identification Number (EIN) and the three-digit plan
number, if applicable. Unless otherwise noted, the most recent Pension Protection Act (PPA) zone status available in 2015

25.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, 2014 AND 2013

and 2014 is for the plan’s year-end at December 31, 2014 and 2013, respectively. The zone status is based on information
that the Company received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone
are generally less than 65% funded, plans in the yellow zone are less than 80% funded and plans in the green zone are at
least 80% funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement
plan (FIP) or rehabilitation plan (RP) is either pending or has been implemented. The last column lists the expiration dates
of the collective bargaining agreements to which the plan is subject. There have been no significant changes that affect the
comparability of 2015, 2014 and 2013 contributions.

Pension
Protection
Act Zone Expiration
Status Contributions by Company Date of
FIP/RP Status Collective
EIN/Pension Plan Pending/ Surcharge Bargaining
Pension Fund Number 2015 2014 Implemented 2015 2014 2013 Imposed Agreement
Central States,
Southeast &
Southwest Areas 3/31/2016 &
Pension Plan 36-6044243/001 Red Red Yes $301,893 $298,382 $273,243 Yes 4/30/2017 (a)
Other Funds 44,031 39,933 35,941
$ 345,924 $ 338,315 $ 309,184
(a)
The Company is party to two collective bargaining agreements that require contributions to Central States, Southeast
& Southwest Areas Pension Plan. In 2015, 38% of the Company's contributions were required by a collective bargaining
agreement that expires 3/31/2016 and 62% were required by an agreement that expires 4/30/2017.

The Company was not listed in any of its multiemployer plans’ Forms 5500 as providing more than 5% of the total
contributions. Forms 5500 were not available for the plan year ending in 2015.

(11) RECLASSIFICATION OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table presents the reclassifications out of accumulated other comprehensive income for the periods
indicated and the affected line item in the statements where net income is presented:

Reclassification for 2015 2014 2013

Net periodic pension and postretirement costs in:
Cost of Sales $ (123,308) $ (409,395) $ (1,222,417)
Tax benefit 49,467 163,895 489,180
Net of tax $ (73,841) $ (245,500) $ (733,237)

Selling, General & Administrative Expenses $ 661,735 $ 1,361,097 $ (821,692)

Tax benefit (expense) (265,467) (544,895) 328,820
Net of tax $ 396,268 $ 816,202 $ (492,872)

Unrealized net gains on available-for-sale securities in:

Gain (loss) on sale of equity investments $ 8,343,407 $ (12,706) $ 3,891,296
Tax benefit (expense) (3,336,000) 4,000 (1,556,000)
Net of tax $ 5,007,407 $ (8,706) $ 2,335,296

Reclassifications, net of tax $ 5,329,834 $ 561,996 $ 1,109,187

See Note 10, “Pension and Other Postretirement Benefits”, for discussion of pension and postretirement amounts yet to be
reclassed in accumulated other comprehensive income.

26.
(12) SIGNIFICANT ESTIMATES AND CERTAIN CONCENTRATIONS

Thirty-nine percent (39%) of the Company’s employees are covered by various collective bargaining
agreements. Approximately 77% of those union employees (30% of our total employees) are covered by a contract that
expires in 2016. The Company believes it has a good working relationship with its employees and has been successful in
negotiating multi-year union contracts without work stoppages.

The Company has noncontributory defined benefit pension plans and postretirement health care plans that provide
certain postretirement benefits to eligible employees. The benefit obligation is the actuarial present value of all benefits
attributed to services rendered prior to the valuation date based on the Entry Age Actuarial Cost Method and the Projected
Unit Credit Actuarial Cost Method, respectively. It is reasonably possible that events could occur that would change the
estimated amount of these liabilities materially in the near term. The financial statements have been prepared using values
and information currently available to the Company.

Economic and financial market conditions could adversely affect our results of operations in future periods.
Instability in the financial markets may make it difficult for certain of our customers to obtain financing, which may
significantly impact the volume of future sales and adversely impact the Company’s future operating results.

In addition, volatility of economic conditions could rapidly change the values of assets and liabilities recorded in
the financial statements, resulting in material future adjustments in investment values (including defined benefit pension
plan investments), allowances for accounts, net realizable value of inventory and realization of deferred tax assets that
could negatively impact the Company’s ability to meet debt covenants or maintain sufficient liquidity.

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the
opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material
adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

The Company invests in various equity securities which are exposed to market risks. Due to the level of risk
associated with certain equity securities, it is at least reasonably possible that changes in the values of equity securities will
occur in the near term and that those changes could materially affect the amounts reported in the accompanying balance
sheet.

(13) STOCKHOLDERS’ EQUITY

Capital Stock and Class B Capital Stock have the same rights except as follows: Class B Capital Stock has voting
rights of ten votes per share and restricted transferability; Class B Capital Stock is convertible at all times into Capital
Stock on a share-for-share basis; and Capital Stock has one vote per share and is freely transferable.

(14) LINES OF BUSINESS

The Company groups its operations into two lines of business - Cement Business and Ready-Mixed Concrete
Business. The Company’s business lines are separate business units that offer different products. The accounting policies
for each line are the same as those described in the summary of significant accounting policies. Corporate assets include
cash and cash equivalents, deferred income taxes, investments and other assets for 2015, 2014 and 2013. Corporate assets
also include refundable federal and state income taxes for 2014. The operations of TDI and BLC, subsidiaries in the Ready-
Mixed Concrete Business segment, have been presented as discontinued operations in the financial statements and not
included in segment results for periods prior to March 31, 2014. See Note 4, “Discontinued Operations”, for further
discussion.

Following is information for each line for the years ended December 31, 2015, 2014 and 2013:

27.
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, 2014 AND 2013

Ready-Mixed Adjustments
Cement Concrete and
Business Business Eliminations Consolidated
For the Year Ended December 31, 2015
Sales to unaffiliated customers $ 69,132,427 $ 78,767,195 $ - $ 147,899,622
Intersegment sales 16,072,919 35,320 (16,108,239) -
Total net sales $ 85,205,346 $ 78,802,515 $ (16,108,239) $ 147,899,622
Income from operations $ 15,709,948 $ 1,222,171 $ 16,932,119
Other income, net 9,779,291
Income before income taxes $ 26,711,410
Identifiable assets at December 31, 2015 $ 93,655,658 $ 38,957,101 $ 132,612,759
Corporate assets 49,401,592
Total assets at December 31, 2015 $ 182,014,351

For the Year Ended December 31, 2014

Sales to unaffiliated customers $ 65,458,122 $ 81,439,606 $ - $ 146,897,728
Intersegment sales 17,160,386 19,999 (17,180,385) -
Total net sales $ 82,618,508 $ 81,459,605 $ (17,180,385) $ 146,897,728
Income (loss) from operations $ 14,755,705 $ (153,654) $ 14,602,051
Other income, net 1,289,675
Income before income taxes $ 15,891,726
Identifiable assets at December 31, 2014 $ 91,614,058 $ 38,146,055 $ 129,760,113
Corporate assets 50,107,011
Total assets at December 31, 2014 $ 179,867,124

For the Year Ended December 31, 2013

Sales to unaffiliated customers $ 55,793,229 $ 71,648,370 $ - $ 127,441,599
Intersegment sales 18,859,698 3,046 (18,862,744) -
Total net sales $ 74,652,927 $ 71,651,416 $ (18,862,744) $ 127,441,599
Income (loss) from operations $ 5,716,116 $ (199,791) $ 5,516,325
Other income, net 5,348,203
Income before income taxes $ 10,864,528
Identifiable assets at December 31, 2013 $ 91,279,098 $ 34,106,903 $ 125,386,001
Corporate assets 48,719,861
Total assets at December 31, 2013 $ 174,105,862

Total sales by line of business before adjustments and eliminations include both sales to unaffiliated customers (as
reported in the Company’s consolidated statements of income, comprehensive income and stockholders’ equity) and
intersegment sales. Intersegment sales are accounted for by the same method as sales to unaffiliated customers.

Income from operations is total net sales less operating expenses. In computing income from operations, none of
the following items have been added or deducted: general corporate income and expenses; interest expense; and income
taxes. Depreciation and depletion for the Cement Business and Ready-Mixed Concrete Business, respectively, was
approximately: $9.1 million and $5.4 million in 2015; $8.3 million and $4.8 million in 2014; and $7.6 million and $3.7
million in 2013. Capital expenditures for the Cement Business and Ready-Mixed Concrete Business, respectively,
were: $8.8 million and $4.9 million in 2015; $7.0 million and $5.7 million in 2014; and $10.7 million and $5.0 million in
2013. Identifiable assets by line of business are those assets that are used in the Company’s operations in each industry.

During 2015, 2014 and 2013, there were no sales to any one customer in excess of 10% of consolidated net sales.

28.
(15) OTHER COMPREHENSIVE INCOME

The following table summarizes the changes in each component of accumulated other comprehensive income, net
of 40% estimated tax:
2014 Change 2015
Unrealized appreciation on available-for-sale securities $ 10,668,000 $ (2,160,000) $ 8,508,000
Pension liability adjustment (9,695,068) (4,918,136) (14,613,204)
Postretirement liability adjustment (209,019) 873,541 664,522
$ 763,913 $ (6,204,595) $ (5,440,682)

2013 Change 2014

Unrealized appreciation on available-for-sale securities $ 10,116,000 $ 552,000 $ 10,668,000
Pension liability adjustment (7,786,992) (1,908,076) (9,695,068)
Postretirement liability adjustment 1,182,375 (1,391,394) (209,019)
$ 3,511,383 $ (2,747,470) $ 763,913

(16) SUBSEQUENT EVENTS

Subsequent events have been evaluated through the date of the Independent Auditor’s Report, which is the date the
financial statements were available to be issued.

29.
 CORPORATE INFORMATION

DIRECTORS OFFICERS

Jack R. Callahan Walter H. Wulf, Jr.

President and Chairman of the Board
Ronald E. Callaway
*Byron K. Radcliff
David L. Deffner Vice Chairman of the Board, Secretary and Treasurer

Robert M. Kissick *Robert M. Kissick

Vice President
Gayle C. McMillen
Kent A. Webber
Byron J. Radcliff Executive Vice President

Byron K. Radcliff Debra P. Roe

Chief Financial Officer and
Steve W. Sloan Assistant Secretary-Treasurer

Michael R. Wachter Lisa J. Fontaine

Assistant Secretary
Walter H. Wulf, Jr.
Kenneth G. Miller
Walter H. Wulf, III Vice President - Cement Manufacturing

N. Joan Perez
Vice President - Sales

*Not actively involved in the daily affairs of the Company

SHAREHOLDER INFORMATION

CORPORATE OFFICE TRANSFER AGENT AND REGISTRAR

449 1200 Street The Monarch Cement Company
P.O. Box 1000 P.O. Box 1000
Humboldt, KS 66748 Humboldt, KS 66748-0900
Phone: (620) 473-2222 shareholder.relations@monarchcement.com
Fax: (620) 473-2447
STOCK TRADING INFORMATION
AUDITORS Trading Symbol: MCEM
BKD, LLP Over-the-Counter Market
Kansas City, Missouri
INVESTOR RELATIONS
ANNUAL MEETING
The annual meeting of the stockholders of Inquiries may be directed to Debra P. Roe,
The Monarch Cement Company is held the Chief Financial Officer and Assistant
second Wednesday in April of each year at the Secretary-Treasurer, at the corporate address
Company’s corporate offices. shown above.

FINANCIAL INFORMATION
The Company’s financial statements are
available on the Company’s website,
http://www.monarchcement.com.