UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 For the quarterly period ended September 30, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33841 VULCAN MATERIALS COMPANY (Exact name of registrant as specified in its charter) FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Large accelerated filer þ Accelerated ...

Vulcan Materials Company (NYSE:VMC) Q3 2023 Earnings Conference Call October 26, 2023 11:00 AM ET Company Participants Mark Warren - VP, IR Tom Hill - Chairman and CEO Mary Andrews Carlisle - SVP and CFO Conference Call Participants Trey Grooms - Stephens Tyler Brown - Raymond James Garik Shmois - Loop Capital Anthony Pettinari - Citigroup Stanley Elliott - Stifel Kathryn Thompson - Thompson Research Group Jerry Revich - Goldman Sachs Mike Dahl - RBC Capital Markets Timna Tanners - Wolfe Research Philip Ng ...

ulcon Materials Con 3Q 2023 I SUPPLEMENTAL INFORMATION I OCTOBER 26, 2023 Safe Harbor and Non-GAAP Financial Measures This presentation contains forward-looking statements. Statements that are not historical fact, including statements about Vulcan's beliefs and expectations, are forward-looking statements. Generally, these statements relate to future financial performance, results of operations, business plans or strategies, projected or anticipated revenues, expenses, earnings (including EBITDA and other m ...

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Vulcan Materials Company's unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Comprehensive Income, and Cash Flows, with detailed accounting notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$14.33 billion** from **$14.23 billion**, while total liabilities decreased and total equity rose, reflecting a stronger financial position Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total current assets** | $2,043.7 | $1,902.0 | | **Property, plant & equipment, net** | $6,105.8 | $6,051.3 | | **Goodwill** | $3,689.5 | $3,689.6 | | **Total assets** | **$14,333.6** | **$14,234.6** | | **Total current liabilities** | $793.3 | $956.6 | | **Long-term debt** | $3,873.2 | $3,875.2 | | **Total liabilities** | **$7,107.2** | **$7,282.4** | | **Total shareholders' equity** | $7,202.6 | $6,928.6 | | **Total liabilities and equity** | **$14,333.6** | **$14,234.6** | [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Q2 2023 total revenues increased to **$2.11 billion**, with net earnings attributable to Vulcan rising to **$308.6 million** and diluted EPS reaching **$2.33** Q2 and Six Months Performance Comparison (in millions, except per share data) | Metric | Q2 2023 | Q2 2022 | Six Months 2023 | Six Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $2,112.9 | $1,954.3 | $3,761.8 | $3,495.0 | | **Gross profit** | $583.3 | $446.2 | $885.3 | $714.9 | | **Operating earnings** | $451.1 | $307.6 | $638.3 | $454.5 | | **Net earnings attributable to Vulcan** | $308.6 | $187.3 | $429.3 | $279.1 | | **Diluted EPS (Continuing Operations)** | $2.33 | $1.50 | $3.25 | $2.20 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to **$507.5 million** in H1 2023, while investing cash outflows decreased and financing activities shifted to a net use of cash Six Months Cash Flow Comparison (in millions) | Activity | Six Months 2023 | Six Months 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $507.5 | $325.5 | | **Net cash used for investing activities** | $(203.2) | $(468.7) | | **Net cash provided by (used for) financing activities** | $(297.6) | $25.4 | | **Net increase (decrease) in cash** | $6.7 | $(117.8) | [Notes to Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, revenue disaggregation, debt structure, significant legal proceedings including NAFTA arbitration, and segment performance - The company is the **largest U.S. supplier of construction aggregates**, with operations in 22 states and select international locations, focusing on aggregates as its principal product[14](index=14&type=chunk)[15](index=15&type=chunk) - Mexican government officials shut down the company's Calica operations in May 2022, leading to a NAFTA arbitration claim and a **$14.5 million valuation allowance** against a deferred tax asset in 2022, with a projected increase in 2023[35](index=35&type=chunk)[94](index=94&type=chunk) Total Revenues by Segment (Six Months Ended June 30, in millions) | Segment | 2023 | 2022 | | :--- | :--- | :--- | | Aggregates | $2,621.4 | $2,266.9 | | Asphalt | $507.1 | $442.0 | | Concrete | $628.7 | $782.8 | | Calcium | $4.6 | $3.3 | | **Total** | **$3,761.8** | **$3,495.0** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 2023 financial results, highlighting strong aggregates performance, revenue growth, margin expansion, and raised full-year Adjusted EBITDA guidance - The company raised its full-year Adjusted EBITDA guidance to a range of **$1,900 million to $2,000 million**, an increase of **$150 million** from initial expectations, driven by strong performance and positive shipment trends[135](index=135&type=chunk)[141](index=141&type=chunk) - Q2 2023 Aggregates segment gross profit increased **24%** to **$498.6 million**, with gross profit per ton improving **25%** to **$7.87**, driven by a **15.0%** increase in freight-adjusted sales price[138](index=138&type=chunk)[148](index=148&type=chunk)[150](index=150&type=chunk) - The ratio of total debt to trailing-twelve months Adjusted EBITDA improved to **2.1 times** as of June 30, 2023, remaining within the target leverage range of **2.0 to 2.5 times**[137](index=137&type=chunk) [Executive Summary and Outlook](index=30&type=section&id=Executive%20Summary%20and%20Outlook) Q2 2023 saw an **8%** revenue increase and **31%** gross profit rise, leading to an updated 2023 outlook with Adjusted EBITDA projected between **$1.9 billion** and **$2.0 billion** Q2 2023 Financial Highlights vs. Q2 2022 | Metric | Q2 2023 | Change vs. Q2 2022 | | :--- | :--- | :--- | | Total Revenues | $2,112.9M | +8% | | Gross Profit | $583.3M | +31% | | Operating Earnings | $451.1M | +47% | | Adjusted EBITDA | $595.3M | +32% | | Diluted EPS (Continuing Ops) | $2.33 | +$0.83 | - Updated 2023 Outlook includes aggregates shipments down **1% to 4%**, net earnings attributable to Vulcan between **$855 million and $935 million**, and Adjusted EBITDA between **$1,900 million and $2,000 million**[141](index=141&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q2 2023 revenue growth was driven by strong Aggregates pricing and improved Asphalt gross profit, while Concrete segment gross profit declined due to divestiture and residential slowdown - Aggregates segment showed strong Q2 2023 performance with a **13%** sales increase, **24%** gross profit increase to **$498.6 million**, and cash gross profit per ton rising **22%** to **$9.76**[148](index=148&type=chunk) - Asphalt segment gross profit surged **318%** to **$56.6 million** in Q2 2023, driven by a **16%** increase in shipments, an **8.8%** price increase, and lower liquid asphalt costs[146](index=146&type=chunk)[153](index=153&type=chunk) - Concrete segment gross profit declined **10%** to **$27.0 million** in Q2 2023, primarily due to the November 2022 divestiture and a slowdown in residential construction[146](index=146&type=chunk)[154](index=154&type=chunk) [Liquidity and Financial Resources](index=41&type=section&id=Liquidity%20and%20Financial%20Resources) Primary liquidity sources include operating cash flow, a **$1.6 billion** credit line, and commercial paper, with H1 2023 operating cash flow increasing to **$507.5 million** and debt-to-capital ratio improving to **34.9%** - Net cash from operating activities increased by **$182.0 million** to **$507.5 million** in H1 2023, primarily due to higher net earnings and favorable working capital changes[188](index=188&type=chunk)[189](index=189&type=chunk) - In March 2023, the company issued **$550.0 million** of **5.80%** senior notes due 2026, using the proceeds to fully repay its delayed draw term loan[200](index=200&type=chunk) Debt to Capital Ratio | Date | Total Debt ($M) | Total Equity ($M) | Total Debt as % of Total Capital | | :--- | :--- | :--- | :--- | | June 30, 2023 | $3,873.7 | $7,226.4 | 34.9% | | Dec 31, 2022 | $3,975.7 | $6,952.2 | 36.4% | | June 30, 2022 | $4,050.2 | $6,744.2 | 37.5% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk through derivative instruments, including a **$550.0 million** fixed-to-floating interest rate swap initiated in March 2023 to hedge new fixed-rate debt - In March 2023, the company entered into a **$550.0 million** fixed-to-floating interest rate swap, designated as a fair value hedge, to manage interest rate risk on its new **5.80%** notes due 2026[222](index=222&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2023, while a legacy software system replacement for concrete operations is underway - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2023[226](index=226&type=chunk) [PART II OTHER INFORMATION](index=49&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 8 of the financial statements for detailed information on recent legal proceedings developments - The report directs readers to **Note 8** of the financial statements for details on legal proceedings[230](index=230&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported in this period - No material changes to risk factors were reported for the quarter[231](index=231&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2023, the company repurchased **241,363** shares for **$49.9 million**, with **7,823,488** shares remaining available under board authorization Q2 2023 Share Repurchases | Period | Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Apr 1 - Apr 30 | 0 | $0.00 | | May 1 - May 31 | 0 | $0.00 | | June 1 - June 30 | 241,363 | $206.82 | | **Total** | **241,363** | **$206.82** | [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures, as required by the Dodd-Frank Act, are provided in Exhibit 95 of this report - Mine safety disclosures are provided in **Exhibit 95** of the Form 10-Q[234](index=234&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) Chief Strategy Officer Stanley G. Bass adopted a Rule 10b5-1 trading plan in Q2 to sell **12,300** shares of company common stock - Chief Strategy Officer Stanley G. Bass adopted a Rule 10b5-1 trading plan on June 9, 2023, to sell **12,300** shares[237](index=237&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications, mine safety disclosures, and iXBRL formatted financial statements

Financial Data and Key Metrics Changes - The company generated $595 million of adjusted EBITDA in Q2 2023, a 32% improvement over the prior year [5] - Gross margin expanded by 480 basis points, with each product line delivering year-over-year improvement [5] - The adjusted EBITDA margin improved by 350 basis points year-to-date through a combination of gross margin expansion and disciplined cost management [12] Business Line Data and Key Metrics Changes - In the Aggregates segment, cash gross profit per ton improved by 22%, with gross margin improving by 290 basis points [6] - Asphalt cash gross profit nearly tripled to $66 million, with volume growth of 16% and price improvement of 9% [7] - Concrete cash unit profitability improved by 24% despite lower volumes due to a slowdown in residential construction activity [7] Market Data and Key Metrics Changes - The Southeastern markets showed solid growth, while California rebounded after a wet first quarter [6] - The company expects Aggregates volumes to decline between 1% to 4% in 2023, an improvement from initial expectations of a decline between 2% and 6% [10] - Private nonresidential construction starts remained healthy, particularly in large manufacturing and industrial projects [9] Company Strategy and Development Direction - The company is focused on enhancing its core operations and expanding its reach, with a commitment to improving return on invested capital [12][13] - Investments in maintenance and growth capital totaled $677 million over the last 12 months, with an additional $340 million for acquisitions [13] - The company plans to spend between $600 million and $650 million on maintenance and growth capital in 2023 [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver between $1.9 billion and $2 billion in adjusted EBITDA for 2023, reflecting a 17% to 23% improvement over the prior year [15] - The company anticipates accelerating growth into 2024, driven by strong demand in both private and public sectors [9][10] - Management noted that the impact of the slowdown in residential activity has not been as significant as initially feared, with expectations for recovery in the second half of the year [8] Other Important Information - The company has reduced its leverage on a net debt to adjusted EBITDA basis to 2x as of June 30, 2023, down from 2.5x a year earlier [13] - The company is strategically managing its land portfolio to create maximum value, with a focus on acquiring high-quality reserves [16][17] Q&A Session Summary Question: Could you elaborate on the primary drivers for the increase in volume outlook for the year? - Management indicated that both strong year-to-date results and an improved outlook contributed to the raised guidance, with private demand being stronger than anticipated [22] Question: Can you discuss the pricing environment and expectations for future price increases? - Management confirmed that prices were up 15% in the quarter and expect similar growth for the full year, with plans for January 1 price increases [29][30] Question: What is the outlook for the downstream businesses and their margin recovery? - Management expressed optimism about margin recovery in Asphalt and Concrete, with expectations for continued improvement in unit margins [34][37] Question: How are labor availability and costs impacting operations? - Management noted that while the labor market remains tight, conditions have improved, leading to better retention and handling of labor challenges [42] Question: What is the status of the NAFTA claim regarding the situation in Mexico? - Management stated that the final hearing on the NAFTA tribunal is expected this year, with a ruling anticipated in 2024 [62] Question: How do you see the growth profile for infrastructure in 2024? - Management indicated that while it is too early to call, there is strong visibility for growth in both highway and non-highway infrastructure projects [56][57]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33841 VULCAN MATERIALS COMPANY (Exact name of registrant as specified in its charter) New Jersey (State or other jurisdiction of ...

Vulcan Materials Company (NYSE:VMC) Q1 2023 Earnings Conference Call May 4, 2023 11:00 AM ET Company Participants Mark Warren - VP, IR Tom Hill - Chairman & CEO Mary Andrews Carlisle - SVP & CFO Conference Call Participants Trey Grooms - Stephens Stanley Elliott - Stifel Anthony Pettinari - Citi Jerry Revich - Goldman Sachs Mike Dahl - RBC Capital Kathryn Thompson - Thompson Research Group Keith Hughes - Truist Securities Brent Thielman - D.A. Davidson Timna Tanners - Wolfe Research Adam Thalhimer - Thompso ...

Part I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Vulcan Materials Company is the largest U.S. supplier of construction aggregates and a major producer of asphalt and ready-mixed concrete, focusing on its core aggregates business and disciplined growth in high-potential U.S. metropolitan areas [Business Overview](index=5&type=section&id=Business%20Overview) Vulcan Materials is the leading U.S. supplier of construction aggregates, asphalt, and concrete, operating hundreds of facilities nationwide - Vulcan Materials is the largest U.S. supplier of construction aggregates, including crushed stone, sand, and gravel, and a major producer of asphalt mix and ready-mixed concrete[21](index=21&type=chunk) Facility Count as of December 31, 2022 | Facility Type | Count | | :--- | :--- | | Active Aggregates Facilities | 404 | | Asphalt Facilities | 71 | | Concrete Facilities | 142 | [Business Strategy](index=5&type=section&id=Business%20Strategy) The company's strategy emphasizes aggregates, disciplined growth in high-potential U.S. markets, and sustainable practices, supported by vast reserves - The company's long-term value creation strategy is built on five key pillars: - An aggregates-focused business model - Disciplined growth management and capital allocation - Continuous improvement in profitability - A holistic approach to land management - Commitment to safety, health, and the environment[23](index=23&type=chunk) - Vulcan holds **15.6 billion tons** of proven and probable aggregates reserves, strategically located to serve high-growth areas in the United States[28](index=28&type=chunk) - The company focuses on U.S. metropolitan areas with high growth potential. Projections indicate that **75% of U.S. population growth**, **74% of household formation**, and **73% of new jobs** between 2022 and 2032 will occur in Vulcan-served states[29](index=29&type=chunk) Top Ten Revenue Producing States in 2022 | Rank | State | | :--- | :--- | | 1 | Texas | | 2 | California | | 3 | Georgia | | 4 | Tennessee | | 5 | Virginia | | 6 | Florida | | 7 | Alabama | | 8 | Arizona | | 9 | South Carolina | | 10 | North Carolina | [Product Lines and Segments](index=11&type=section&id=Product%20Lines%20and%20Segments) Vulcan operates through four segments, with Aggregates as its core business, vertically integrating with Asphalt and Concrete, and a specialized Calcium segment - The company operates through four reportable segments: Aggregates, Asphalt, Concrete, and Calcium. As of year-end 2022, it had **404 active aggregates facilities**, **71 asphalt facilities**, and **142 concrete facilities**[49](index=49&type=chunk) - The Aggregates segment is the core of the business, supplying materials for public infrastructure and private construction. The industry is characterized by localized markets due to high transportation costs, limited product substitutes, and high barriers to entry[50](index=50&type=chunk)[51](index=51&type=chunk)[53](index=53&type=chunk) - The Asphalt and Concrete segments are vertically integrated with the Aggregates segment. Aggregates comprise approximately **95% of asphalt mix** and **80% of ready-mixed concrete by weight**, with most of the supply sourced internally[69](index=69&type=chunk)[70](index=70&type=chunk)[72](index=72&type=chunk) - The Calcium segment consists of a single operation in Brooksville, Florida, producing calcium products for animal feed, plastics, and water treatment industries[76](index=76&type=chunk) [Other Business-Related Items](index=18&type=section&id=Other%20Business-Related%20Items) The business experiences seasonality, operates in a fragmented industry with consolidation opportunities, and is committed to environmental stewardship and workforce diversity - The business is seasonal, with the highest sales and earnings typically in the third quarter and the lowest in the first quarter, due to weather conditions affecting outdoor construction[77](index=77&type=chunk) - The U.S. aggregates industry is highly fragmented, with the ten largest producers accounting for only **33% of total production in 2022**, providing opportunities for consolidation[78](index=78&type=chunk) - The company is committed to environmental stewardship and climate change mitigation, voluntarily reporting GHG emissions and setting interim goals for Scope 1 and 2 emissions reduction[82](index=82&type=chunk)[83](index=83&type=chunk) - As of January 1, 2023, Vulcan employed **11,397 people** in the United States, with **1,252 represented by labor unions**. The company emphasizes diversity, equity, and inclusion, with a **42% diverse Board of Directors**[92](index=92&type=chunk)[96](index=96&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) The company faces a range of risks categorized as economic/political, operational, financial, legal/regulatory, personnel, and general, including dependence on the cyclical construction industry and international business challenges - **Economic/Political Risks:** Business is highly dependent on the U.S. construction industry, which is subject to economic cycles. It also relies on the timing and amount of federal, state, and local infrastructure funding[110](index=110&type=chunk)[112](index=112&type=chunk) - **International Risks:** The company is exposed to risks from international operations, highlighted by recent adverse actions from the Mexican government, including arbitrary shutdown orders of its operations in that country[113](index=113&type=chunk) - **Operational Risks:** The industry is highly competitive and fragmented. Long-term success depends on securing and permitting strategically located aggregates reserves, which is increasingly difficult in urban areas[115](index=115&type=chunk)[117](index=117&type=chunk) - **Financial/Accounting Risks:** The business is capital-intensive with significant fixed costs, making earnings sensitive to shipment volumes. A deterioration in credit ratings could negatively impact financing[120](index=120&type=chunk)[121](index=121&type=chunk) - **Legal/Regulatory & General Risks:** Operations are subject to extensive environmental, zoning, and land use laws. Climate change legislation, ESG expectations, weather events, and dependence on IT systems also pose significant risks[127](index=127&type=chunk)[128](index=128&type=chunk)[135](index=135&type=chunk) [Item 1B. Unresolved Staff Comments](index=28&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved written comments from the Securities and Exchange Commission staff regarding its periodic or current reports - As of the report date, there are no unresolved written comments from the SEC staff[138](index=138&type=chunk) [Item 2. Properties](index=29&type=section&id=Item%202.%20Properties) As the largest U.S. aggregates supplier, Vulcan operates extensive mining properties across the U.S. and internationally, holding 15.6 billion tons of proven and probable aggregates reserves and numerous asphalt and concrete facilities Aggregates Resources by Division (as of Dec 31, 2022) | Division | Measured (M tons) | Indicated (M tons) | Total (M+I) (M tons) | Inferred (M tons) | | :--- | :--- | :--- | :--- | :--- | | Central | 581.3 | 1,167.5 | 1,748.8 | 529.5 | | East | 2,685.7 | 757.9 | 3,443.6 | 295.3 | | International | 0.0 | 61.1 | 61.1 | 0.0 | | Mountain West | 31.5 | 0.4 | 31.9 | 26.7 | | Northeast | 947.4 | 16.0 | 963.4 | 19.2 | | South | 581.0 | 578.7 | 1,159.7 | 382.8 | | Southern Gulf Coast | 690.0 | 108.3 | 798.3 | 218.4 | | Southwest | 568.1 | 97.3 | 665.4 | 500.0 | | Western | 521.6 | 1,751.9 | 2,273.5 | 666.6 | | **Total** | **6,606.6** | **4,539.1** | **11,145.7** | **2,638.5** | Total Proven & Probable Aggregates Reserves by Division (as of Dec 31, 2022) | Division | Total Proven & Probable (M tons) | 2022 Production (M tons) | | :--- | :--- | :--- | | Central | 3,033.3 | 34.0 | | East | 3,786.9 | 47.5 | | International | 476.8 | 5.0 | | Mountain West | 323.8 | 8.6 | | Northeast | 1,819.5 | 26.3 | | South | 1,435.6 | 27.3 | | Southern Gulf Coast | 1,751.9 | 27.6 | | Southwest | 1,453.7 | 32.4 | | Western | 1,527.1 | 26.3 | | **Total** | **15,608.6** | **235.0** | - The total estimate of **15.6 billion tons** of proven and probable aggregates reserves is unchanged from the prior year. Of this total, **85% is on production-stage properties** and **15% is on development-stage properties**[158](index=158&type=chunk)[159](index=159&type=chunk) - The company operates **71 asphalt facilities** and **142 concrete facilities** across several divisions, primarily in the Central, Mountain West, Northeast, Southwest, and Western regions[163](index=163&type=chunk) [Item 3. Legal Proceedings](index=36&type=section&id=Item%203.%20Legal%20Proceedings) The company is subject to various lawsuits and governmental proceedings in the ordinary course of business, with material legal proceedings detailed in Note 12 of the financial statements - Vulcan is a defendant in various lawsuits in the ordinary course of business and is subject to occasional governmental proceedings related to occupational safety, health, and the environment[169](index=169&type=chunk)[170](index=170&type=chunk) - A detailed discussion of material legal proceedings is provided in Note 12, "Commitments and Contingencies"[171](index=171&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Information regarding mine safety violations and other regulatory matters as required by the Dodd-Frank Act is included as an exhibit to the 10-K report - Information concerning mine safety violations required by Section 1503(a) of the Dodd-Frank Act is included in Exhibit 95 of this report[172](index=172&type=chunk) [Information about our Executive Officers](index=37&type=section&id=Information%20about%20our%20Executive%20Officers) This section lists the names, positions, ages, and brief biographies of the company's executive officers as of February 20, 2023, including Chairman, President and CEO J. Thomas Hill and CFO Mary Andrews Carlisle - J. Thomas Hill serves as Chairman, President and Chief Executive Officer[173](index=173&type=chunk) - Mary Andrews Carlisle was appointed Chief Financial Officer effective September 1, 2022[174](index=174&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=39&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Vulcan's common stock trades on the New York Stock Exchange under the ticker symbol VMC, with no equity repurchases in Q4 2022, and over 8 million shares remaining authorized for repurchase - The company's common stock is traded on the NYSE under the ticker **VMC**[185](index=185&type=chunk) - No shares of the company's equity securities were repurchased during the quarter ended December 31, 2022[186](index=186&type=chunk) - As of December 31, 2022, **8,064,851 shares** remained authorized for repurchase under a 10,000,000 share program approved in February 2017[186](index=186&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, Vulcan achieved a 32% increase in total revenues to $7.3 billion and a 12% increase in Adjusted EBITDA to $1.6 billion, driven by strong pricing and aggregates shipments, while projecting continued earnings growth for 2023 [Executive Summary and Financial Highlights](index=40&type=section&id=Executive%20Summary%20and%20Financial%20Highlights) Vulcan's 2022 performance saw significant revenue and Adjusted EBITDA growth, driven by aggregates pricing, while maintaining a healthy debt-to-EBITDA ratio 2022 Financial Summary (vs. 2021) | Metric | 2022 | Change vs. 2021 | | :--- | :--- | :--- | | Total Revenues | $7,315.2 million | +32% | | Gross Profit | $1,557.7 million | +13% | | Net Earnings Attributable to Vulcan | $575.6 million | -14% | | Adjusted EBITDA | $1,625.6 million | +12% | | Diluted EPS from Continuing Ops | $4.45 | -11.9% | | Adjusted Diluted EPS from Cont. Ops | $5.11 | +1.4% | | Aggregates Shipments | 236.3 million tons | +6% | | Aggregates Freight-Adjusted Price | $16.40/ton | +10.3% | - The company's aggregates-led business executed well, with nimble pricing actions overcoming inflationary pressures to drive a **12% increase in full-year Adjusted EBITDA**[191](index=191&type=chunk) - At year-end 2022, the total debt to Adjusted EBITDA ratio was **2.4x**, within the company's target range of **2.0x to 2.5x**[192](index=192&type=chunk) [Market Developments and 2023 Outlook](index=42&type=section&id=Market%20Developments%20and%202023%20Outlook) Vulcan anticipates continued earnings growth in 2023, driven by strong pricing and public construction, despite expected residential declines and ongoing issues with Mexican operations - The company carries strong pricing momentum into 2023, supported by healthy leading indicators for public construction activity, particularly highways. This is expected to be partially offset by a decline in residential construction[198](index=198&type=chunk) 2023 Full-Year Expectations | Metric | 2023 Projection | | :--- | :--- | | Net Earnings Attributable to Vulcan | $715 million - $835 million | | Adjusted EBITDA | $1,725 million - $1,875 million | | Total Aggregates Shipments | Down 2% to 6% | | Aggregates Freight-Adjusted Price | Up 11% to 13% | | Capital Expenditures | $600 million - $650 million | - The company's Calica operations in Mexico were arbitrarily shut down by the Mexican government in May 2022. Vulcan is pursuing a NAFTA arbitration claim, with a decision not expected before 2024[200](index=200&type=chunk) [Results of Operations by Segment](index=50&type=section&id=Results%20of%20Operations%20by%20Segment) All segments reported increased gross profit in 2022, driven by strong pricing and shipment growth, despite cost headwinds and acquisition impacts - **Aggregates:** Total shipments increased **6% in 2022**. Freight-adjusted selling price rose **10.3%**. Segment gross profit increased **9% to $1,408.5 million**, or **$5.96 per ton**, despite significant diesel fuel cost headwinds[229](index=229&type=chunk)[232](index=232&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk) - **Asphalt:** Shipments increased **7%**. Segment gross profit rose to **$57.3 million** from $21.2 million in 2021, driven by a **21% increase in pricing** that offset a **36% rise in liquid asphalt unit costs**[237](index=237&type=chunk) - **Concrete:** Shipments increased **88%**, primarily due to acquisitions, while same-store shipments were flat. Segment gross profit increased to **$89.3 million** from $54.3 million, with an **11% price increase** partially offsetting higher input costs[240](index=240&type=chunk) [Liquidity and Financial Resources](index=62&type=section&id=Liquidity%20and%20Financial%20Resources) The company maintains strong liquidity through operating cash flow and credit facilities, with increased operating cash flow and reduced investing cash flow in 2022, while managing debt within target ranges - Primary liquidity sources are cash from operations, a committed bank line of credit, and a commercial paper program. Available liquidity was **$1,582.8 million** at year-end 2022[273](index=273&type=chunk)[211](index=211&type=chunk) - Net cash provided by operating activities increased by **$136.3 million** to **$1,148.2 million** in 2022, primarily due to higher net earnings before noncash charges[284](index=284&type=chunk) - Net cash used for investing activities was **$1,053.0 million**, a decrease from $1,874.1 million in 2021, mainly due to lower acquisition spending (**$529.2 million in 2022** vs. $1,639.4 million in 2021)[287](index=287&type=chunk) Debt Summary (as of Dec 31) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Total Debt | $3,975.7 million | $3,880.0 million | | Total Debt as % of Total Capital | 36.4% | 37.1% | | Weighted-average Debt Maturity | 11.0 years | N/A | | Total Debt to Adjusted EBITDA | 2.4x | 2.7x | [Critical Accounting Policies](index=68&type=section&id=Critical%20Accounting%20Policies) The company's critical accounting policies involve significant judgment, particularly in areas like goodwill impairment, which is tested annually at the reporting unit level - The company identifies several critical accounting policies that require significant judgment and estimates, including: - Goodwill Impairment - Impairment of Long-Lived Assets - Business Combinations and Purchase Price Allocation - Pension and Other Postretirement Benefits - Environmental Compliance Costs - Claims and Litigation - Income Taxes[310](index=310&type=chunk) - Goodwill is tested for impairment annually at the reporting unit level. The 2022 test indicated that the fair values of all reporting units with goodwill exceeded their carrying values by approximately **10% to over 100%**. An interim goodwill impairment loss of **$50.9 million** was recognized in Q3 2022 for a reporting unit that was subsequently sold[313](index=313&type=chunk)[314](index=314&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=75&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, primarily interest rate risk on its debt and economic risks related to its pension and postretirement benefit plans, with a 1% decline in interest rates increasing long-term debt fair value by $232.4 million - The company is exposed to market risks from transactions in the normal course of business, primarily related to interest rates[350](index=350&type=chunk) - As of December 31, 2022, the estimated fair value of long-term debt was **$3,672.3 million**. A **1% decline in interest rates** would increase this fair value by approximately **$232.4 million**[352](index=352&type=chunk) - Economic risks related to pension and postretirement benefit plans include changes in the discount rate and the expected return on plan assets[353](index=353&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=76&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements for the fiscal year ended December 31, 2022, including the Report of Independent Registered Public Accounting Firm, Consolidated Statements of Comprehensive Income, Balance Sheets, Cash Flows, and Equity, and the accompanying Notes to Consolidated Financial Statements [Report of Independent Registered Public Accounting Firm](index=76&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued an unqualified opinion on the financial statements, highlighting critical audit matters related to goodwill valuation and the Hewitt Landfill environmental liability - Deloitte & Touche LLP issued an unqualified opinion on the consolidated financial statements, stating they present fairly, in all material respects, the financial position and results of operations of Vulcan Materials Company[354](index=354&type=chunk) - The audit identified two critical audit matters: (1) the valuation of goodwill for certain concrete reporting units due to significant management estimates in determining fair value, and (2) the estimation and disclosure of the liability for the Hewitt Landfill environmental matter due to its subjective nature[361](index=361&type=chunk)[363](index=363&type=chunk) [Consolidated Financial Statements](index=79&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's key consolidated financial statements, including comprehensive income, balance sheets, and cash flows, for the fiscal years presented Consolidated Statements of Comprehensive Income Highlights (in millions) | | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total revenues | $7,315.2 | $5,552.2 | $4,856.8 | | Gross profit | $1,557.7 | $1,373.4 | $1,281.5 | | Operating earnings | $951.4 | $1,010.8 | $895.7 | | Net earnings attributable to Vulcan | $575.6 | $670.8 | $584.5 | | Diluted net earnings per share | $4.31 | $5.02 | $4.39 | Consolidated Balance Sheets Highlights (in millions) | | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total current assets | $1,902.0 | $1,696.6 | | Property, plant & equipment, net | $6,051.3 | $5,546.8 | | Goodwill | $3,689.6 | $3,696.7 | | Total assets | $14,234.6 | $13,682.6 | | Total current liabilities | $956.6 | $769.3 | | Long-term debt | $3,875.2 | $3,874.8 | | Total liabilities | $7,282.4 | $7,114.9 | | Total equity | $6,952.2 | $6,567.7 | Consolidated Statements of Cash Flows Highlights (in millions) | | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $1,148.2 | $1,011.9 | $1,070.4 | | Net cash used for investing activities | $(1,053.0) | $(1,874.1) | $(381.5) | | Net cash provided by (used for) financing activities | $(175.2) | $(94.3) | $234.6 | [Notes to Consolidated Financial Statements](index=83&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail the company's debt structure, significant commitments and contingencies including the NAFTA arbitration, and recent acquisition and divestiture activities - **Note 6 (Debt):** As of Dec 31, 2022, total debt was **$3.98 billion**, consisting of **$100 million in short-term debt** and **$3.88 billion in long-term debt**. The company has a **$1.6 billion line of credit** expiring in 2027 and a **$1.6 billion commercial paper program**[482](index=482&type=chunk)[487](index=487&type=chunk)[489](index=489&type=chunk) - **Note 12 (Commitments and Contingencies):** The company is involved in a NAFTA arbitration claim against Mexico regarding the shutdown of its Calica quarrying operations. A decision is not expected before 2024. The company is also a party in litigation related to the Lower Passaic River Superfund Site and the Texas Brine sinkhole matter, both associated with its discontinued Chemicals business[566](index=566&type=chunk)[569](index=569&type=chunk)[581](index=581&type=chunk) - **Note 19 (Acquisitions and Divestitures):** In 2022, Vulcan acquired several operations in California, Texas, Virginia, and Honduras for total consideration of **$594.6 million**. In 2021, the company completed the major acquisition of U.S. Concrete for **$1.63 billion**. In 2022, it divested its concrete operations in New Jersey, New York, and Pennsylvania[614](index=614&type=chunk)[616](index=616&type=chunk)[624](index=624&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=133&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no disagreements with its accountants on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure - None reported[625](index=625&type=chunk) [Item 9A. Controls and Procedures](index=133&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of December 31, 2022, a conclusion supported by an unqualified auditor opinion on internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[625](index=625&type=chunk) - Management's report on internal control over financial reporting concluded that the system was effective as of December 31, 2022. This assessment was based on the COSO framework[629](index=629&type=chunk) - The independent auditor, Deloitte & Touche LLP, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[630](index=630&type=chunk)[632](index=632&type=chunk) [Item 9B. Other Information](index=135&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[639](index=639&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=135&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[641](index=641&type=chunk) Part III [Items 10-14](index=136&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) Information required for Items 10 through 14, covering directors, executive officers, corporate governance, executive compensation, security ownership, and principal accounting fees, is incorporated by reference from the company's definitive proxy statement - Information for the following items is incorporated by reference from the registrant's 2023 Proxy Statement: - **Item 10:** Directors, Executive Officers and Corporate Governance - **Item 11:** Executive Compensation - **Item 12:** Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters - **Item 13:** Certain Relationships and Related Transactions, and Director Independence - **Item 14:** Principal Accounting Fees and Services[644](index=644&type=chunk)[645](index=645&type=chunk)[646](index=646&type=chunk)[648](index=648&type=chunk)[649](index=649&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=137&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements included in the report and provides a comprehensive list of exhibits filed, including corporate governance documents, debt agreements, compensation plans, and required certifications - This section lists the financial statements included in the Form 10-K[652](index=652&type=chunk) - A detailed list of exhibits is provided, including the Certificate of Incorporation, By-Laws, various debt indentures, credit agreements, compensation plans, and certifications by the CEO and CFO[654](index=654&type=chunk)[655](index=655&type=chunk)[657](index=657&type=chunk) [Item 16. Form 10-K Summary](index=141&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has elected not to include an optional summary of the information required by the Form 10-K - The company has chosen not to include an optional Form 10-K summary[660](index=660&type=chunk)

Financial Data and Key Metrics Changes - The company generated $375 million of adjusted EBITDA in Q4 2022, with an 11% year-over-year growth in aggregates cash gross profit per ton despite a 6% decline in aggregates shipments [7][9] - For the full year, adjusted EBITDA improved by 12%, with all segments posting year-over-year growth in gross profit [9][24] - The net debt to adjusted EBITDA ratio was 2.3 times at year-end, indicating a reduction in leverage back to the target range of 2 to 2.5 times [24] Business Line Data and Key Metrics Changes - In the aggregates segment, gross profit improved by 9%, with a 6% increase in volume and a 10% improvement in average selling prices [10][12] - The asphalt segment saw a 21% increase in pricing, which more than offset a 36% increase in liquid asphalt costs, leading to gross profit improvement from $21 million to $57 million [12] - The concrete segment's full-year gross profit increased by 64% to $89 million, driven by contributions from U.S. concrete assets and improved earnings in legacy businesses [13] Market Data and Key Metrics Changes - The demand environment for 2023 is mixed, with expected modest growth in public demand but contraction in private demand, particularly in residential construction [14][15] - Highway starts grew significantly at 25% on a trailing 12-month basis by the end of 2022, supported by the Infrastructure Investment and Jobs Act funding [18][19] - The company expects aggregate shipments to decline between 2% and 6% in 2023, with pricing momentum expected to increase between 11% and 13% [22] Company Strategy and Development Direction - The company aims to capitalize on strengths in its aggregates-led business and maintain a focus on operational execution to drive profitability [27][32] - Continued investment in both organic and inorganic opportunities is planned, with a capital expenditure budget of $600 million to $650 million for 2023 [30][24] - The company is focused on improving shareholder returns and return on invested capital while managing its balance sheet and overhead costs [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to grow adjusted EBITDA to between $1.725 billion and $1.875 billion in 2023 despite macroeconomic challenges [27] - The company anticipates that the depth and duration of declines in residential construction activity will significantly impact overall demand for aggregates [21] - Management highlighted the importance of timing in highway projects and the potential for increased public infrastructure investment to drive future demand [19][75] Other Important Information - The company completed the sale of its ready-mix assets in New York, New Jersey, and Pennsylvania during Q4 2022 [26] - The return on invested capital at year-end was 13.5%, reflecting the impact of divestitures and operational challenges [26] Q&A Session Summary Question: What changed regarding the volume outlook for 2023? - Management noted that while January showed a bounce-back from bad weather, the full impact of declining single-family housing starts is expected to be felt in Q2, leading to a projected decline in shipments [36][37] Question: Can you elaborate on the pricing and cost dynamics for 2023? - Management indicated strong pricing momentum entering 2023, with expectations for unit margin growth in the mid-teens, despite tougher pricing comparisons in the second half of the year [40][42] Question: How do you view the balance of price and cost in light of historical volatility? - Management expressed confidence in unit margin growth due to consistent performance and operational disciplines, despite challenges from inflationary pressures [51][54] Question: What is the outlook for non-residential construction? - Management expects flat volumes in non-residential construction, with a focus on heavy industrial projects, while monitoring potential impacts from light non-residential sectors [88] Question: How does the company view its portfolio and potential divestitures? - Management stated that they continuously evaluate their assets and are open to divestitures if they do not meet performance expectations, while remaining optimistic about current concrete markets [66][68]

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR For the transition period from to Commission File Number 001-33841 VULCAN MATERIALS COMPANY (Exact name of registrant as specified in its charter) New Jersey (State or other jurisdictio ...