Vulcan(US:VMC)2026-02-19 16:58Operations and Facilities - Vulcan Materials Company operates 425 active aggregates facilities, with top ten revenue-producing states accounting for 90% of 2025 revenues, and top five states contributing 63%[25] - In 2025, the company operated 425 active aggregates facilities, 71 asphalt facilities, and 76 concrete facilities[56] - The company has approximately 310,000 acres in its land portfolio, actively managing land use from pre-mining to reclamation to maximize value[41] - The company has 248 production stage properties and 81 development stage properties, with production currently halted at operations in Calica, Mexico, and Puerto Cortés, Honduras[162][160] - The aggregates segment includes 248 active facilities, comprising 204 production stage mining properties and 44 sand and gravel facilities[183] Financial Performance - Net earnings attributable to Vulcan increased 18% to $1,076.7 million, with adjusted earnings per diluted share rising to $8.00 from $7.53[212] - Total revenues increased by $523.4 million, or 7%, to $7,941.1 million, while gross profit rose by $175.0 million, or 9%, to $2,174.6 million[213] - Adjusted EBITDA improved by 13% to $2,323.6 million, with an adjusted EBITDA margin expansion of 160 basis points[212] - The company expects net earnings attributable to Vulcan for 2026 to be between $1,100 million and $1,300 million, with adjusted EBITDA projected between $2,400 million and $2,600 million[218] - The total debt to adjusted EBITDA ratio was 1.9 times, with a weighted-average debt maturity of 13.7 years and an effective interest rate of 5.0%[214] Market and Demand - In 2025, total annual housing starts in the U.S. reached approximately 1.5 million units, indicating a recovery in the housing market[77] - The company is currently operating below full capacity, positioning itself to benefit from economies of scale as demand for aggregates grows[69] - The company anticipates continued strength in public construction activity and improving private nonresidential opportunities in 2026[215] - Approximately 80% of total aggregates shipments are delivered by truck directly from the production location to customers, with less than 5% delivered by rail or water[58][60] - The company has over 25,000 customers across its markets, benefiting from a coast-to-coast footprint of strategically located permitted reserves[62] Sustainability and Environmental Initiatives - The company recycled 2.5 million tons of recycled asphalt pavement (RAP) and 1.7 million tons of concrete in 2025, contributing to sustainability efforts[52] - The company is committed to reducing greenhouse gas emissions, with approximately 90% of gross profit derived from producing aggregates, which results in low emissions[95] - In 2025, Tier IV machines performed over 67% of the off-road fleet's work, positively impacting air emissions and GHG emissions[96] - The company has planned four additional solar projects in California for 2026, aimed at lowering operating costs and benefiting the local electric grid[97] - The company has licensed CarbonCure technology for its Concrete segment, which captures and sequesters carbon dioxide within ready-mixed concrete, enhancing strength and reducing the carbon footprint[99] Strategic Acquisitions and Growth - The company has completed over 30 acquisitions in the last 10 years, including more than 75 aggregates quarries and sales yards in top revenue states[35] - The company’s future growth is partially reliant on acquiring and successfully integrating other businesses within the industry, which involves various risks[132] - The company disposed of its asphalt mix and construction paving operations in the greater Houston market in 2025 to optimize its asset portfolio[84] - In Q4 2025, the company divested its concrete business in California, aligning with its aggregates-led strategy and generating cash proceeds for future growth opportunities[86] Safety and Workforce - In 2025, Vulcan achieved a safety performance of 0.9 injuries per 200,000 employee hours worked, significantly better than the industry average of 1.8[46] - The company employed 11,172 people in the U.S. as of January 1, 2026, with a satisfactory relationship with its workforce, including unionized employees[105] Legal and Regulatory Environment - The company is subject to various legal proceedings but did not incur any penalties in 2025 for failure to disclose transactions identified as abusive by the IRS[189] - The company’s operations are affected by numerous legal requirements and governmental policies, which may impose new liabilities or require additional investments[141] - The company is involved in environmental investigations and legal proceedings, which may result in significant costs and liabilities[142] Financial Obligations and Risks - The company has $4,362.1 million in debt with maturities ranging from 2027 to 2054, indicating a significant financial obligation[135] - The company’s operations are highly sensitive to changes in product shipments due to the capital-intensive nature of the industry, which could adversely affect financial results[134] - The company faces competition from a fragmented industry with numerous independent producers and larger companies, which could lead to lower prices and sales volumes[129] - The company is dependent on the construction industry, which is influenced by economic cycles, interest rates, and demographic shifts, potentially impacting demand for its products[126] Resources and Reserves - As of December 31, 2025, the company reported total proven and probable aggregates reserves of 16.6 billion tons, reflecting an increase of 0.1 billion tons from the previous year[177] - Proven and probable aggregates reserves are defined as the economically mineable part of a measured or indicated mineral resource, with the company applying modifying factors to establish economic viability[173] - The company’s aggregates resources are estimated based on an average sales price assumption ranging from approximately $14.30 to $28.10 per ton depending on the location/market[171] - The aggregates reserves include a maximum of 243.8 million tons encumbered by volumetric production payments[177] - Of the total reserves, 13.8 billion tons (83%) are located on production stage properties, while 2.8 billion tons (17%) are on development stage properties[178]