47 unchanged sentences
Three Months Ended
+Added: Six Months Ended
in millions, except per share data
6 unchanged sentences
Operating earnings
−Removed: Other nonoperating income, net
+Added: Other nonoperating income (expense), net
Interest expense, net
7 unchanged sentences
Other comprehensive income (loss), net of tax
−Removed: Deferred loss on interest rate derivative
−Removed: Amortization of prior interest rate derivative loss
+Added: Amortization of prior cash flow hedge loss
Amortization of actuarial loss and prior service
cost for benefit plans
−Removed: Other comprehensive income (loss)
+Added: Other comprehensive income
Comprehensive income
14 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: Three Months Ended
+Added: Six Months Ended
Operating Activities
13 unchanged sentences
Payment for businesses acquired, net of acquired cash
−Removed: Net cash provided by (used for) investing activities
+Added: Net cash used for investing activities
Financing Activities
17 unchanged sentences
We serve markets in twenty-two states, the U.S.
−Removed: Virgin Islands, Washington D.C., the Bahamas and the local markets surrounding our operations in British Columbia, Canada and Quintana Roo, Mexico.
+Added: Virgin Islands, Washington D.C., the Bahamas and the local markets surrounding our operations in British Columbia, Canada and Quintana Roo, Mexico (see Note 8, NAFTA Arbitration).
Our primary focus is serving metropolitan markets in the United States that are expected to experience the most significant growth in population, households and employment.
9 unchanged sentences
For further information, refer to the consolidated financial statements and footnotes included in our most recent Annual Report on Form 10-K.
−Removed: Operating results for the three month period ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, particularly in light of the uncertainty over the economic and operational impacts of the ongoing COVID-19 pandemic as construction activity continues to be impacted by capacity constraints (including supply chain bottlenecks, labor shortages and transportation availability) and cost inflation.
+Added: Operating results for the three and six month periods ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, particularly in light of the uncertainty over the economic and operational impacts of the ongoing COVID-19 pandemic and the current conflict between Russia and Ukraine.
+Added: Construction activity continues to be impacted by capacity constraints (including supply chain bottlenecks, labor shortages and transportation availability) and cost inflation.
Additionally, period-over-period comparisons are significantly impacted by our August 2021 acquisition of U.S.
2 unchanged sentences
The most significant estimates and assumptions included in the preparation of these financial statements are related to goodwill and long-lived asset impairments, business combinations and purchase price allocation, pension and other postretirement benefits, environmental compliance, claims and litigation including self-insurance, and income taxes.
−Removed: Events that relate to conditions arising after March 31, 2022, will be reflected in management’s estimates for future periods.
+Added: Events that relate to conditions arising after June 30, 2022, will be reflected in management’s estimates for future periods.
NONCONTROLLING INTEREST
3 unchanged sentences
The remaining 12 % noncontrolling interest is held by the Namgis First Nation (Namgis).
−Removed: Noncontrolling interest consists of the Namgis’ share of the fair value equity in the partnership offset by capital contributions loaned to the Namgis by us.
+Added: This noncontrolling interest consists of the Namgis’ share of the fair value equity in the partnership offset by capital contributions loaned to the Namgis by us.
Our consolidated financial statements recognize the full fair value of all of the subsidiary’s assets and liabilities offset by the noncontrolling interest in total equity.
10 unchanged sentences
Three Months Ended
+Added: Six Months Ended
Discontinued Operations
6 unchanged sentences
Three Months Ended
+Added: Six Months Ended
Weighted-average common shares
9 unchanged sentences
Three Months Ended
+Added: Six Months Ended
Antidilutive common stock equivalents
8 unchanged sentences
Finance lease assets
−Removed: Accumulated amortization
+Added: Accumulated depreciation
Finance leases, net
13 unchanged sentences
Finance leases
−Removed: The increases from March 31, 2021 in ROU assets and liabilities presented above primarily relate to the acquisition of U.S.
+Added: The increases from June 30, 2021 in ROU assets and liabilities presented above primarily relate to the acquisition of U.S.
Concrete (see Note 16 for additional information).
3 unchanged sentences
Three Months Ended
+Added: Six Months Ended
Finance lease cost
−Removed: Amortization of right-of-use assets
+Added: Depreciation of right-of-use assets
Interest on lease liabilities
5 unchanged sentences
Our short-term lease cost includes the cost of leases with an initial term of one year or less (including those with terms of one month or less).
−Removed: Cash paid for operating leases was $ 20.9 million and $ 14.5 million for the three months ended March 31, 2022 and 2021, respectively.
−Removed: Cash paid for finance leases was $ 8.5 million and $ 0.6 million for the three months ended March 31, 2022 and 2021, respectively.
+Added: Cash paid for operating leases was $ 40.8 million and $ 28.7 million for the six months ended June 30, 2022 and 2021, respectively.
+Added: Cash paid for finance leases was $ 19.4 million and $ 1.3 million for the six months ended June 30, 2022 and 2021, respectively.
Our estimated annual effective tax rate (EAETR) is based on full-year expectations of pretax earnings, statutory tax rates, permanent differences between book and tax accounting such as percentage depletion, and tax planning alternatives available in the various jurisdictions in which we operate.
2 unchanged sentences
Significant judgment is required in determining our EAETR.
−Removed: In the first quarter of 2022, we recorded income tax expense from continuing operations of $ 18.7 million compared to $ 60.6 million in the first quarter of 2021.
−Removed: The decrease in tax expense was primarily related to a decrease in pretax earnings in 2022 and an increase in the Alabama net operating loss (NOL) valuation allowance in 2021.
+Added: In the second quarter of 2022, we recorded income tax expense from continuing operations of $ 63.7 million compared to $ 57.3 million in the second quarter of 2021.
+Added: The increase in tax expense was primarily related to an increase in pretax earnings and an increase in our reserve for uncertain tax positions.
+Added: For the first six months of 2022, we recorded income tax expense from continuing operations of $ 82.4 million compared to $ 118.0 million for the first six months of 2021.
+Added: The decrease in tax expense was primarily related to a decrease in pretax earnings in 2022 and the 2021 increase in the valuation allowance against the Alabama net operating loss (NOL).
In February 2021, the Alabama Business Competitiveness Act (ABC Act) was signed into law.
20 unchanged sentences
Our segment total revenues by geographic market (excluding the U.S.
−Removed: Concrete acquisition which is only presented by segment) for the three month periods ended March 31, 2022 and 2021 are disaggregated as follows:
−Removed: Three Months Ended March 31, 2022
+Added: Concrete acquisition which is only presented by segment) for the three and six month periods ended June 30, 2022 and 2021 are disaggregated as follows:
+Added: Three Months Ended June 30, 2022
Total Revenues by Geographic Market 1
2 unchanged sentences
Total revenues
−Removed: Three Months Ended March 31, 2021
+Added: Three Months Ended June 30, 2021
Total Revenues by Geographic Market 1
2 unchanged sentences
Total revenues
+Added: Six Months Ended June 30, 2022
+Added: Total Revenues by Geographic Market 1
+Added: Segment sales
+Added: Intersegment sales
+Added: Total revenues
+Added: Six Months Ended June 30, 2021
+Added: Total Revenues by Geographic Market 1
+Added: Segment sales
+Added: Intersegment sales
+Added: Total revenues
The geographic markets are defined by states/countries as follows:
6 unchanged sentences
We also generate service revenues from our asphalt construction paving business and service revenues related to our aggregates business, such as landfill tipping fees.
−Removed: Our total service revenues were $ 39.0 million ( 2.5 % of total revenues) and $ 41.2 million ( 3.9 % of total revenues) for the three months ended March 31, 2022 and 2021, respectively.
+Added: Our total service revenues were $ 67.9 million ( 3.5 % of total revenues) and $ 60.8 million ( 4.5 % of total revenues) for the three months ended June 30, 2022 and 2021, respectively, and $ 106.9 million ( 3.1 % of total revenues) and $ 102.0 million ( 4.2 % of total revenues) for the six months ended June 30, 2022 and 2021, respectively.
Our products typically are sold to private industry and not directly to governmental entities.
9 unchanged sentences
Three Months Ended
+Added: Six Months Ended
Freight & Delivery Revenues
26 unchanged sentences
Three Months Ended
+Added: Six Months Ended
Deferred Revenue
−Removed: Balance at beginning of year
+Added: Balance at beginning of period
Revenue recognized from deferred revenue
Balance at end of period
−Removed: Based on expected sales from the specified quarries, we expect to recognize $ 7.5 million of VPP deferred revenue as income during the 12-month period ending March 31, 2023 (reflected in other current liabilities in our March 31, 2022 Condensed Consolidated Balance Sheet).
+Added: Based on expected sales from the specified quarries, we expect to recognize $ 7.5 million of VPP deferred revenue as income during the 12-month period ending June 30, 2023 (reflected in other current liabilities in our June 30, 2022 Condensed Consolidated Balance Sheet).
Fair Value Measurements
16 unchanged sentences
dollar-denominated money market instruments).
−Removed: Net gains (losses) of the Rabbi Trusts’ investments were $( 1.1 ) million and $ 2.0 million for the three months ended March 31, 2022 and 2021, respectively.
−Removed: The portions of the net gains (losses) related to investments still held by the Rabbi Trusts at March 31, 2022 and 2021 were $( 1.3 ) million and $ 1.6 million, respectively.
+Added: Net gains (losses) of the Rabbi Trusts’ investments were $( 6.1 ) million and $ 3.4 million for the six months ended June 30, 2022 and 2021, respectively.
+Added: The portions of the net gains (losses) related to investments still held by the Rabbi Trusts at June 30, 2022 and 2021 were $( 6.3 ) million and $ 3.0 million, respectively.
Interest rate swaps are measured at fair value using quoted market prices or pricing models that use prevailing market interest rates as of the measurement date.
11 unchanged sentences
Three Months Ended
+Added: Six Months Ended
Cash Flow Hedges
Loss reclassified from AOCI
−Removed: For the 12-month period ending March 31, 2023, we estimate that $ 2.1 million of the $ 22.1 million net of tax loss in AOCI will be reclassified to interest expense.
+Added: For the 12-month period ending June 30, 2023, we estimate that $ 2.1 million of the $ 21.8 million net of tax loss in AOCI will be reclassified to interest expense.
Debt is detailed as follows:
20 unchanged sentences
Borrowings on the bank line of credit are classified as short-term if we intend to repay within twelve months and as long-term if we have the intent and ability to extend payment beyond twelve months.
−Removed: Discounts and debt issuance costs are amortized using the effective interest method over the terms of the respective notes resulting in $ 1.3 million and $ 1.1 million of net interest expense for these items for the three months ended March 31, 2022 and 2021, respectively.
+Added: Discounts and debt issuance costs are amortized using the effective interest method over the terms of the respective notes resulting in $ 2.4 million and $ 11.4 million of net interest expense for these items for the six months ended June 30, 2022 and 2021, respectively.
BRIDGE FACILITY, DELAYED DRAW TERM LOAN AND LINE OF CREDIT
4 unchanged sentences
Concrete and was paid down to $ 1,100.0 million in September 2021 (amounts repaid are no longer available for borrowing).
−Removed: In March 2022, the delayed draw term loan was amended to extend the maturity date from August 2024 to August 2026.
+Added: In March 2022, the delayed draw term loan was amended to extend the maturity date from August
+Added: 2024 to August 2026.
The delayed draw term loan contains covenants customary for an unsecured investment-grade facility and mirror those in our line of credit.
−Removed: As of March 31, 2022, we were in compliance with the delayed draw term loan covenants.
+Added: As of June 30, 2022, we were in compliance with the delayed draw term loan covenants.
Financing costs for the bridge facility commitment and the delayed draw term loan totaled $ 13.3 million, $ 9.4 million of which was recognized as interest expense in the second quarter of 2021.
1 unchanged sentence
The margins are determined by our credit ratings.
−Removed: As of March 31, 2022, the margin for SOFR borrowings was 0.975 % and the margin for base rate borrowings was 0.000 %.
+Added: As of June 30, 2022, the margin for SOFR borrowings was 0.875 % and the margin for base rate borrowings was 0.000 %.
Our unsecured $ 1,000.0 million line of credit was amended in March 2022 to extend the maturity date from September 2025 to September 2026.
Our line of credit contains covenants customary for an unsecured investment-grade facility.
−Removed: As of March 31, 2022, we were in compliance with the line of credit covenants.
+Added: As of June 30, 2022, we were in compliance with the line of credit covenants.
Borrowings on the line of credit bear interest, at our option, at either SOFR plus a margin ranging from 1.000 % to 1.625 %, or Truist Bank’s base rate (generally, its prime rate) plus a margin ranging from 0.000 % to 0.625 %.
2 unchanged sentences
We also pay a commitment fee on the daily average unused amount of the line of credit that ranges from 0.090 % to 0.225 % determined by our credit ratings.
−Removed: As of March 31, 2022, the margin for SOFR borrowings was 1.125 %, the margin for base rate borrowings was 0.125 %, and the commitment fee for the unused amount was 0.100 %.
−Removed: As of March 31, 2022, our available borrowing capacity under the line of credit was $ 830.4 million.
+Added: As of June 30, 2022, the margin for SOFR borrowings was 1.125 %, the margin for base rate borrowings was 0.125 %, and the commitment fee for the unused amount was 0.100 %.
+Added: As of June 30, 2022, our available borrowing capacity under the line of credit was $ 745.9 million.
Utilization of the borrowing capacity was as follows:
$ 176.0 million was borrowed
−Removed: $ 69.6 million was used to provide support for outstanding standby letters of credit
+Added: $ 78.1 million was used to support standby letters of credit
Essentially all of our $ 3,941.9 million (face value) of term debt (which includes the $1,100.0 million delayed draw term loan) is unsecured.
$ 2,840.2 million of such debt is governed by two essentially identical indentures that contain customary investment-grade type covenants.
−Removed: As of March 31, 2022, we were in compliance with all term debt covenants.
+Added: As of June 30, 2022, we were in compliance with all term debt covenants.
In August 2021, we assumed $ 434.5 million (fair value) of senior notes due 2029 in connection with the acquisition of U.S.
4 unchanged sentences
Except for $ 24.8 million of risk management letters of credit that expire in July 2022, our standby letters of credit are issued by banks that participate in our $ 1,000.0 million line of credit, and reduce the borrowing capacity thereunder.
−Removed: Our standby letters of credit as of March 31, 2022 are summarized by purpose in the table below:
+Added: Our standby letters of credit as of June 30, 2022 are summarized by purpose in the table below:
Standby Letters of Credit
4 unchanged sentences
As the holder of the working interest, we have responsibility to bear the cost of mining and producing the reserves attributable to this nonoperating interest.
−Removed: As stated in Note 2, our lease liabilities totaled $ 770.5 million as of March 31, 2022.
−Removed: As summarized by purpose in Note 7, our standby letters of credit totaled $ 94.5 million as of March 31, 2022.
−Removed: As described in Note 9, our asset retirement obligations totaled $ 319.7 million as of March 31, 2022.
+Added: As stated in Note 2, our lease liabilities totaled $ 774.9 million as of June 30, 2022.
+Added: As summarized by purpose in Note 7, our standby letters of credit totaled $ 102.9 million as of June 30, 2022.
+Added: As described in Note 9, our asset retirement obligations totaled $ 321.1 million as of June 30, 2022.
LITIGATION AND ENVIRONMENTAL MATTERS
56 unchanged sentences
A joint bench trial (judge only) began in September 2017 and ended in October 2017 in the pipeline cases.
−Removed: The trial was limited in scope to the allocation of comparative fault or liability for causing the sinkhole, with a second trial phase addressed to contract and damages to be held at a later date.
+Added: The trial was limited in scope to the allocation of comparative fault or liability for causing the sinkhole, with a second trial phase addressed to contract and damages set to be held during the third quarter of 2022.
In December 2017, the judge issued a ruling on the allocation of fault among the three defendants as follows:
3 unchanged sentences
The Court of Appeal affirmed the 15 % fault allocation to Vulcan.
−Removed: The Court of Appeal made
−Removed: various other findings, including findings related to the arbitrability of certain claims between Occidental and Texas Brine.
−Removed: In May 2021, the Court of Appeal issued a judgment in a second pipeline case, assigning the same allocation of fault between the parties.
−Removed: Vulcan and Texas Brine applied to the Louisiana Supreme Court seeking review of these judgments.
+Added: Appeal made various other findings, including findings related to the arbitrability of certain claims between Occidental and Texas Brine.
+Added: In May 2021 and April 2022, the Court of Appeal issued judgments in the other two pipeline cases, assigning the same allocation of fault between the parties.
+Added: Writs were sought from the Louisiana Supreme Court for review of all three appellate decisions.
Those applications were denied, resulting in final judgments regarding fault allocations in two of the three pipeline cases.
−Removed: The appeal in the third pipeline case remains pending.
+Added: Texas Brine’s writ in the third pipeline case remains pending.
We have settled claims by all plaintiffs except in two outstanding cases, and our insurers to date have funded these settlements in excess of our self-insured retention amount.
The remaining cases involve Texas Brine and the State of Louisiana.
−Removed: Discovery remains ongoing and w e cannot reasonably estimate a range of liability pertaining to these open cases at this time.
+Added: This quarter we recorded an immaterial loss related to the claims brought by Texas Brine.
+Added: At this time w e cannot reasonably estimate a range of liability pertaining to the claims brought by the State of Louisiana.
+Added: The State’s lawsuit has been dormant awaiting final disposition of the Phase 1 (liability) proceedings, which remain pending before the Louisiana Supreme Court in one of the three pipeline cases.
■ NEW YORK WATER DISTRICT CASES (DISCONTINUED OPERATIONS) — During the operation of our former Chemicals Division, which was divested to Occidental in 2005, Vulcan manufactured a chlorinated solvent known as 1,1,1-trichloroethane.
13 unchanged sentences
In November 2017, we submitted a Pre-Design Investigation (PDI) Work Plan to the EPA, which sets forth the activities and schedule for collection of data in support of o ur evaluation of the need for a n offsite remedy.
−Removed: In addition, this evaluation was expanded as part of the PDI to include the evaluation of a remedy in light of a new project by LADWP at the Rinaldi-Toluca (RT) wellfield.
+Added: In addition, this evaluation was expanded as part of the PDI to include the evaluation of a remedy in light of LADWP’s Rinaldi-Toluca (RT) wellfield project.
PDI investigative activities were completed between the first and third quarters of 2018, and in December 2018 we submitted a Draft PDI Evaluation Report to the EPA.
1 unchanged sentence
The EPA provided an initial set of comments on the Draft PDI Evaluation Report in May 2019 and a final set of comments in October 2020.
−Removed: The final set of comments includes a request for Vulcan to revise and develop a final PDI Evaluation Report.
−Removed: The final comments further provide, if Vulcan agrees, a proposal for an alternative approach for offsite remediation (as opposed to installation of offsite extraction wells) and development of a Supplemental PDI Evaluation Report that would require the EPA to modify the remedy in the 2009 ROD as it relates to the Hewitt Landfill.
−Removed: In December 2020, Vulcan submitted the Final PDI Evaluation Report, which includes edits to the Draft PDI Evaluation Report and responses to the EPA’s comments.
+Added: The final set of comments included a request for Vulcan to revise and develop a final PDI Evaluation Report.
+Added: The final comments further provided, if Vulcan agrees, a proposal for an alternative approach for offsite remediation (as opposed to installation of offsite extraction wells) and development of a Supplemental PDI Evaluation Report that would require the EPA to modify the remedy in the 2009 ROD as it relates to the Hewitt Landfill.
+Added: In December 2020, Vulcan submitted the Final PDI Evaluation Report, which included edits to the Draft PDI Evaluation Report and responses to the EPA’s comments.
Until the EPA’s review and approval of the Final PDI Evaluation Report and any Supplemental PDI Evaluation Report on remedial alternative(s) is complete and an effective remedy has been selected by the EPA or agreed upon, we cannot identify any further remedial action that may be required.
3 unchanged sentences
During the fourth quarter of 2021, Vulcan completed a partial settlement with Honeywell related to certain of the costs that Honeywell has incurred for an immaterial amount.
+Added: Discussions are ongoing with Honeywell regarding other costs Honeywell has incurred or will incur.
We are also gathering and analyzing data and developing technical information to determine the extent of possible contribution by the Hewitt Landfill to the groundwater contamination in the area.
14 unchanged sentences
In January 2019, ICSID registered our Request for Arbitration.
−Removed: A hearing on the merits took place in July 2021, and we expect that the NAFTA arbitration tribunal will issue a decision in the second half of 2022.
−Removed: While we await the final resolution from the tribunal, we have continued to engage with government officials to pursue an amicable resolution of the dispute.
−Removed: The Mexican government’s taking of any measures that force us to cease or that otherwise impede our operations in Mexico would have an adverse effect on our ability to supply customers.
+Added: A hearing on the merits took place in July 2021.
+Added: While we awaited the final resolution from the tribunal, we continued to engage with government officials to pursue an amicable resolution of the dispute.
+Added: On May 5, 2022, Mexican government officials unexpectedly and arbitrarily shut down Calica’s remaining operations in Mexico.
+Added: On May 8, 2022, Legacy Vulcan filed an application in the NAFTA arbitration seeking provisional measures and leave to file an ancillary claim in connection with this latest shutdown (see Part I, Item 2.
+Added: Management’s Discussion and Analysis of Financial Condition and Results of Operations – Known Trends or Uncertainties).
+Added: On July 11, 2022, the NAFTA arbitration tribunal granted Legacy Vulcan’s application and ordered Mexico not to take any action that might further aggravate the dispute between the parties or render the resolution of the dispute potentially more difficult.
+Added: Legacy Vulcan’s ancillary claim will be addressed as part of the pending arbitration, and we expect that the NAFTA arbitration tribunal will issue a decision no earlier than 2023.
At this time, there can be no assurance whether we will be successful in our NAFTA claim, and we cannot quantify the amount we may recover, if any, under this arbitration proceeding if we are successful.
−Removed: It is not possible to predict with certainty the ultimate outcome of these and other legal proceedings in which we are involved, and a number of factors, including developments in ongoing discovery or adverse rulings, or the verdict of a particular jury, could cause actual losses to differ materially from accrued costs.
+Added: It is not possible to predict the ultimate outcome of these and other legal proceedings in which we are involved, and a number of factors, including developments in ongoing discovery or adverse rulings, or the verdict of a particular jury, could cause actual losses to differ materially from accrued costs.
No liability was recorded for claims and litigation for which a loss was determined to be only reasonably possible or for which a loss could not be reasonably estimated.
9 unchanged sentences
Three Months Ended
+Added: Six Months Ended
ARO Operating Costs
3 unchanged sentences
Three Months Ended
+Added: Six Months Ended
Asset Retirement Obligations
−Removed: Balance at beginning of year
+Added: Balance at beginning of period
Liabilities incurred
3 unchanged sentences
Balance at end of period
−Removed: The increase in ARO liabilities from March 31, 2021 to March 31, 2022 primarily relate to those assumed in the acquisition of U.S.
+Added: The increase in ARO liabilities from June 30, 2021 to June 30, 2022 primarily relate to those assumed in the acquisition of U.S.
Concrete (see Note 16).
8 unchanged sentences
1) we incurred a settlement charge of $ 12.1 million, 2) we were relieved of all responsibility for these pension obligations, and 3) the insurance company is now required to pay and administer the retirement benefits owed to 2,764 U.S.
−Removed: retirees and beneficiaries (representing approximately 50 % of retirees currently in payment status), with no change to the amount, timing or form of retirement benefit payments.
+Added: retirees and beneficiaries (representing approximately 50 % of retirees in payment status at that time), with no change to the amount, timing or form of retirement benefit payments.
The following table sets forth the components of net periodic pension benefit cost:
1 unchanged sentence
Three Months Ended
+Added: Six Months Ended
Components of Net Periodic Benefit Cost
6 unchanged sentences
net periodic pension benefit cost
−Removed: The contributions to pension plans for the three months ended March 31, 2022 and 2021, as reflected on the Condensed Consolidated Statements of Cash Flows, pertain to benefit payments under nonqualified plans for both periods.
+Added: The contributions to pension plans for the six months ended June 30, 2022 and 2021, as reflected on the Condensed Consolidated Statements of Cash Flows, pertain to benefit payments under nonqualified plans for both periods.
POSTRETIREMENT PLANS
7 unchanged sentences
Three Months Ended
+Added: Six Months Ended
Components of Net Periodic Benefit Cost
10 unchanged sentences
Under these plans, we match employees’ eligible contributions at established rates.
−Removed: Expense recognized in connection with these matching obligations totaled $ 15.8 million and $ 22.1 million for the three months ended March 31, 2022 and 2021, respectively.
+Added: Expense recognized in connection with these matching obligations totaled $ 29.6 million and $ 35.0 million for the six months ended June 30, 2022 and 2021, respectively.
other Comprehensive Income
3 unchanged sentences
Amounts in accumulated other comprehensive income (loss) (AOCI), net of tax, are as follows:
−Removed: Interest rate hedges
+Added: Cash flow hedges
Pension and postretirement plans
−Removed: Changes in AOCI, net of tax, for the three months ended March 31, 2022 are as follows:
−Removed: Interest Rate
+Added: Changes in AOCI, net of tax, for the six months ended June 30, 2022 are as follows:
Postretirement
3 unchanged sentences
Net current period OCI changes
−Removed: Balances as of March 31, 2022
+Added: Balances as of June 30, 2022
Amounts reclassified from AOCI to earnings are as follows:
Three Months Ended
−Removed: Amortization of Interest Rate Hedge Losses
+Added: Six Months Ended
+Added: Amortization of Cash Flow Hedge Losses
Interest expense
9 unchanged sentences
The terms and provisions of such shares will be determined by our Board of Directors upon any issuance of preferred shares in accordance with our Certificate of Incorporation.
−Removed: There were no shares held in treasury as of March 31, 2022, December 31, 2021 and March 31, 2021.
+Added: There were no shares held in treasury as of June 30, 2022, December 31, 2021 and June 30, 2021.
Our common stock purchases (all of which were open market purchases) and subsequent retirements for the year-to-date periods ended are as follows:
3 unchanged sentences
Average cost per share
−Removed: As of March 31, 2022, 8,064,851 shares may b e p urchased under the current authorizatio n o f our Board of Directo rs.
+Added: As of June 30, 2022, 8,064,851 shares may b e p urchased under the current authorizatio n o f our Board of Directo rs.
Changes in total equity are summarized below:
Three Months Ended
+Added: Six Months Ended
in millions, except per share data
Total Shareholders'
−Removed: Balance at beginning of year
+Added: Balance at beginning of period
Net earnings attributable to Vulcan
8 unchanged sentences
Noncontrolling Interest
−Removed: Balance at beginning of year
+Added: Balance at beginning of period
Earnings (loss) attributable to noncontrolling interest
11 unchanged sentences
Three Months Ended
+Added: Six Months Ended
Total Revenues
15 unchanged sentences
Supplemental information referable to our Condensed Consolidated Statements of Cash Flows is summarized below:
−Removed: Three Months Ended
−Removed: Cash Payments (Refunds)
+Added: Six Months Ended
+Added: Cash Payments
Interest (exclusive of amount capitalized)
11 unchanged sentences
Goodwill is allocated to reporting units for purposes of testing goodwill for impairment.
−Removed: There were no charges for goodwill impairment in the three month periods ended March 31, 2022 and 2021.
+Added: There were no charges for goodwill impairment in the six month periods ended June 30, 2022 and 2021.
Accumulated goodwill impairment losses amount to $ 252.7 million (year 2008) in our former Cement segment.
1 unchanged sentence
Aggregates, Asphalt, Concrete and Calcium.
−Removed: Changes in the carrying amount of goodwill by reportable segment from December 31, 2021 to March 31, 2022 are shown below:
+Added: Changes in the carrying amount of goodwill by reportable segment from December 31, 2021 to June 30, 2022 are shown below:
Totals at December 31, 2021
Goodwill of acquired businesses 1
−Removed: Totals at March 31, 2022
+Added: Totals at June 30, 2022
See Note 16 for acquisitions .
3 unchanged sentences
BUSINESS ACQUISITIONS
−Removed: 2022 BUSINESS ACQUISITIONS — During the first quarter of 2022 , we purchased the following operations for total consideration of $ 193.5 million:
+Added: 2022 BUSINESS ACQUISITIONS — Through the six months ended June 30, 2022 , we purchased the following operations for total consideration of $ 233.5 million:
Texas — five aggregates facilities (includes three production stage properties, one development stage property and one sales yard)
+Added: Virginia — four ready-mixed concrete facilities and two idle ready-mixed concrete sites
The 2022 acquisitions listed above are reported in our consolidated financial statements as of their respective acquisition dates.
32 unchanged sentences
Three Months Ended
+Added: Six Months Ended
Supplemental Pro Forma Results
3 unchanged sentences
The fair value of consideration transferred for the U.S.
−Removed: Concrete acquisition and the preliminary amounts (pending final appraisals of intangible assets and property, plant & equipment and related deferred taxes ) of assets acquired and liabilities assumed are summarized below:
+Added: Concrete acquisition and the preliminary amounts (pending final inspection of p roperty, plant & equipment and related deferred taxes ) of assets acquired and liabilities assumed are summarized below:
Fair Value of Purchase Consideration
22 unchanged sentences
DIVESTITURES AND PENDING DIVESTITURES
−Removed: We had no significant divestitures through the three months ended March 31, 2022 .
+Added: We had no significant divestitures through the six months ended June 30, 2022 .
In 2021, we sold:
First quarter — a reclaimed quarry in Southern California resulting in a pretax gain of $ 114.7 million (net of a $ 12.9 million contingency and other directly related obligations)
−Removed: No material assets met the criteria for held for sale at March 31, 2022, December 31, 2021 or March 31, 2021.
+Added: No material assets met the criteria for held for sale at June 30, 2022, December 31, 2021 or June 30, 2021.
New Accounting Standards
13 unchanged sentences
Gulf Coast and the Eastern Seaboard where there are limited supplies of locally available, high-quality aggregates.
−Removed: We serve these markets from quarries that have access to cost-effective long-haul transportation — shipping by barge and rail — and from our quarry on Mexico's Yucatan Peninsula with our fleet of Panamax-class, self-unloading ships.
+Added: We serve these markets from quarries that have access to cost-effective long-haul transportation — shipping by barge and rail — and from our quarry on Mexico's Yucatan Peninsula (see Known Trends or Uncertainties within this Item 2.) with our fleet of Panamax-class, self-unloading ships.
Additionally, as a result of our 2021 acquisition of U.S.
20 unchanged sentences
EXECUTIVE SUMMARY
−Removed: Financial highlights for FIRST Quarter 2022
−Removed: Compared to first quarter of 2021:
+Added: Financial highlights for Second Quarter 2022
+Added: Compared to second quarter of 2021:
Total revenues increased $593.3 million, or 44%, to $1,954.3 million
8 unchanged sentences
Unit profitability (as measured by gross profit per ton) decreased 1% to $6.31 per ton
−Removed: Same-store unit profitability (as measured by gross profit per ton) increased 3.5% to $4.99 per ton.
Asphalt, Concrete and Calcium segment gross profit increased $19.2 million, or 78%, to $43.8 million, collectively
Selling, administrative and general (SAG) expenses increased $33.7 million but decreased 0.5 percentage points (50 basis points) as a percentage of total revenues
−Removed: Operating earnings decreased $102.5 million, or 41%, to $147.0 million
−Removed: Gain on sale of property, plant & equipment and businesses was down $114.6 million to $2.6 million
+Added: Operating earnings increased $20.1 million, or 7%, to $307.6 million
Earnings attributable to Vulcan from continuing operations were $1.50 per diluted share compared to $1.47 per diluted share
2 unchanged sentences
Adjusted EBITDA was $450.2 million, an increase of $44.2 million, or 11%
+Added: Includes an approximate $20 million negative impact related to our aggregates operations in Mexico that were unexpectedly and arbitrarily shut down in May
Returned capital to shareholders via dividends ($53.2 million @ $0.40 per share versus $49.1 million @ $0.37 per share)
−Removed: Consistent with our expectations, we delivered strong year-over-year earnings growth in the first quarter.
−Removed: Our teams executed well, despite macro environment challenges that included accelerating inflation, volatility in the energy markets, and ongoing disruptions in supply chains.
−Removed: We remain focused on executing our four strategic disciplines (operational excellence, commercial excellence, logistics innovation and strategic sourcing) to control what we can control and to dampen the headwinds of things outside of our control.
−Removed: We remain confident in our full-year outlook and our ability to deliver strong earnings growth in 2022.
−Removed: Through robust growth in aggregates pricing and a relentless focus on operational excellence, we can continue to expand unit profitability, despite the macro challenges.
−Removed: In our asphalt business, pricing efforts mitigated higher liquid asphalt costs in the first quarter and we remain focused on expanding our gross profit margins.
−Removed: In concrete, improvement in private nonresidential construction activity and a favorable pricing environment support earnings growth in 2022.
−Removed: We remain confident in our prospects for the year, particularly with respect to demand visibility, pricing opportunities, and cost reduction initiatives.
−Removed: Capital expenditures in the first quarter were $122.7 million, including $34.4 million for growth projects.
−Removed: In 2022, we expect to spend $600 million to $650 million on capital expenditures.
+Added: Total revenues increased sharply from the prior year driven by double-digit growth in our legacy operations as well as the addition of U.S.
+Added: Concrete operations.
+Added: Our teams continued to execute well and delivered another quarter of solid earnings growth amidst a challenging backdrop.
+Added: We are well on our way to delivering another year of double-digit earnings growth.
+Added: During the trailing-twelve months, we increased our Aggregates segment gross profit by 11% despite ongoing inflation and other external headwinds.
+Added: Robust growth in aggregates pricing and a relentless focus on operating disciplines will help us carry this momentum forward.
+Added: Our asphalt pricing actions, which began late last year, are increasingly offsetting sharply higher liquid asphalt costs, and we remain focused on growing our gross profit in our Asphalt segment.
+Added: In our Concrete segment, leading indicators for private nonresidential construction activity and a favorable pricing environment will support earnings growth in 2022.
+Added: Capital expenditures in the second quarter were $117.4 million, including $56.3 million for growth projects (year-to-date $240.1 million and $90.7 million, respectively).
+Added: For the full year, we expect to spend $600 million to $650 million on capital expenditures.
Full-year capital expenditures include spending for U.S.
1 unchanged sentence
We will continue to review our plans and will adjust as needed, while being thoughtful about preserving liquidity.
−Removed: During the quarter, we completed acquisitions of aggregates businesses in Texas.
−Removed: As of March 31, 2022, the ratio of total debt to trailing-twelve months Adjusted EBITDA was 2.7 times (2.6 times on a net debt basis).
+Added: During the quarter, we completed acquisitions of Virginia ready-mixed concrete facilities (see Note 16 to the condensed consolidated financial statements).
+Added: As of June 30, 2022, the ratio of total debt to trailing-twelve months Adjusted EBITDA was 2.6 times (2.5 times on a net debt basis).
We remain committed to our stated long-term target leverage range of 2.0 to 2.5 times total debt to trailing-twelve months Adjusted EBITDA.
−Removed: Interest expense, net of interest income, was $35.9 million in the first quarter compared with $33.1 million in the prior year.
−Removed: On a trailing-twelve months basis, return on invested capital was 14.0%.
+Added: Interest expense, net of interest income, was $38.7 million in the second quarter compared with $41.7 million in the prior year.
+Added: On a trailing-twelve months basis, return on invested capital was 13.6%, 1.2 percentage points (120 basis points) lower than the comparable prior year period.
We are focused on driving further improvement through solid operating earnings growth coupled with disciplined capital management.
−Removed: We reiterate our full-year Adjusted EBITDA range of $1.72 to $1.82 billion.
−Removed: In the first quarter, we capitalized on the considerable momentum in our business, growing Adjusted EBITDA by 20%, and we are on our way to delivering double-digit earnings growth again in 2022.
−Removed: Our markets are positioned to continue to outperform other parts of the country, and our industry-leading aggregates focus will continue to drive substantial value.
−Removed: Growing our aggregates unit profitability consistently during the last two years of pandemic-related disruptions demonstrates the resiliency of our business and our ability to capitalize on any changes in the macro environment.
−Removed: We expect the favorable pricing dynamics and strong execution to lead to attractive growth in aggregates unit profitability in 2022 and beyond.
+Added: We are revising our full-year Adjusted EBITDA guidance range to reflect the considerable pricing momentum in our aggregates business as well as higher than expected energy-related cost inflation that is currently impacting each of our segments.
+Added: Additionally, our outlook now reflects the previously disclosed impact ($80 million to $100 million) of the closure of our Mexico operations for the balance of 2022.
+Added: Updates to our expectations for 2022 include:
+Added: Net earnings attributable to Vulcan of between $680 million to $760 million
+Added: Adjusted EBITDA of between $1.60 billion to $1.70 billion
+Added: Aggregates freight-adjusted price increase of 9% to 11% ($14.87 per ton in 2021)
+Added: Mid-single digit growth in Aggregates segment cash gross profit per ton despite severe inflationary pressures from diesel fuel and other commodities and supply chain challenges
+Added: Cash gross profit of $280 to $300 million in Asphalt, Concrete and Calcium segments, collectively, with the Concrete segment expected to account for approximately 80% of the total
+Added: SAG expense of between $495 million to $505 million
+Added: Interest expense of approximately $165 million
+Added: Depreciation, depletion, accretion and amortization expense of approximately $565 million
+Added: Our ability to grow our aggregates unit profitability consistently during the last two years of pandemic-related disruptions differentiates us from the rest of our industry.
+Added: These results demonstrate the resiliency of our business and our ability to capitalize on changes in the macro environment.
+Added: We are positioned in markets that will continue to outperform other parts of the country, from a demand perspective, both in the near-term and longer term, and we expect both the favorable pricing dynamics and our strong execution to lead to attractive growth in aggregates unit profitability in 2022 and beyond.
+Added: Mexico Update
+Added: After the unexpected and arbitrary shut down of our Mexico operations on May 5, 2022, and upon suspension of its three-year customs permit (granted in March 2022) on May 13, 2022, we disclosed a potential EBITDA impact of $80 million to $100 million should we be unable to fully operate in Mexico for the balance of 2022.
+Added: Operations remain shut down, and the aforementioned potential impact has now been incorporated into our full year 2022 outlook as noted above.
+Added: On May 8, 2022, we filed an application in our NAFTA arbitration seeking permission to file an ancillary claim in connection with this latest shutdown of our remaining Mexico operations.
+Added: On July 11, 2022, the NAFTA arbitration tribunal granted our application.
+Added: The ancillary claim will be addressed as part of the pending arbitration, and it is expected that the NAFTA arbitration tribunal will issue a decision no earlier than 2023.
RESULTS OF OPERATIONS
5 unchanged sentences
Three Months Ended
+Added: Six Months Ended
in millions, except unit and per unit data
33 unchanged sentences
Non-GAAP measures are defined and reconciled within this Item 2 under the caption Reconciliation of Non-GAAP Financial Measures.
−Removed: FIRST quarter 2022 Compared to FIRST Quarter 2021
−Removed: First quarter 2022 total revenues were $1,540.7 million, up 44% from the first quarter of 2021.
+Added: second quarter 2022 Compared to second Quarter 2021
+Added: Second quarter 2022 total revenues were $1,954.3 million, up 44% from the second quarter of 2021.
Shipments increased in aggregates (+9%), asphalt mix (+9%) and ready-mixed concrete (+287%).
−Removed: Likewise, gross profit increased in the Aggregates (+$19.2 million or 9%) and Concrete (+$20.4 million or +264%) segments but remained essentially flat in the Asphalt segment.
−Removed: A 62% increase in the unit cost of diesel fuel increased costs by $20.8 million from the prior year’s first quarter with most ($16.7 million) of this cost increase reflected in the Aggregates segment.
−Removed: Net earnings attributable to Vulcan for the first quarter of 2022 were $91.8 million, or $0.69 per diluted share, compared to $160.6 million, or $1.20 per diluted share, in the first quarter of 2021.
+Added: Likewise, gross profit increased in the Aggregates (+$28.6 million or 8%), Concrete (+$19.7 million or +191%) and Asphalt (+$0.1 million or less than 1%) segments.
+Added: A 102% increase in the unit cost of diesel fuel increased costs by $40.3 million from the prior year’s second quarter with most ($32.2 million) of this cost increase reflected in the Aggregates segment.
+Added: Net earnings attributable to Vulcan for the second quarter of 2022 were $187.3 million, or $1.40 per diluted share, compared to $195.3 million, or $1.46 per diluted share, in the second quarter of 2021.
Each period’s results were impacted by discrete items, as follows:
−Removed: Net earnings attributable to Vulcan for the first quarter of 2022 include:
+Added: Net earnings attributable to Vulcan for the second quarter of 2022 include:
pretax charges of $0.4 million associated with divested operations
1 unchanged sentence
pretax charges of $0.9 million for managerial restructuring (related to U.S.
−Removed: Net earnings attributable to Vulcan for the first quarter of 2021 include:
−Removed: $13.7 million of tax charges related to an increase in the Alabama NOL carryforward valuation allowance
−Removed: pretax net gain of $114.7 million related to the sale of a reclaimed quarry in Southern California
+Added: pretax charges of $15.3 million for a litigation matter included in discontinued operations
+Added: Net earnings attributable to Vulcan for the second quarter of 2021 include:
pretax charges of $0.4 million associated with divested operations
1 unchanged sentence
pretax charges of $1.3 million for COVID-19 pandemic direct incremental costs
−Removed: Adjusted for these discrete items, earnings attributable to Vulcan from continuing operations (Adjusted Diluted EPS) was $0.73 per diluted share for the first quarter of 2022 compared to $0.69 per diluted share in the first quarter of 2021.
−Removed: Continuing Operations — Changes in earnings from continuing operations before income taxes for the first quarter of 2022 versus the first quarter of 2021 are summarized below:
+Added: pretax interest charges of $9.4 million related to financing the acquisition of U.S.
+Added: Adjusted for these discrete items, earnings attributable to Vulcan from continuing operations (Adjusted Diluted EPS) was $1.53 per diluted share for the second quarter of 2022 compared to $1.57 per diluted share in the second quarter of 2021.
+Added: Continuing Operations — Changes in earnings from continuing operations before income taxes for the second quarter of 2022 versus the second quarter of 2021 are summarized below:
earnings from continuing operations before income taxes
−Removed: First quarter 2021
+Added: Second quarter 2021
Higher aggregates gross profit
3 unchanged sentences
Higher selling, administrative and general expenses
−Removed: Lower gain on sale of property, plant & equipment and businesses
−Removed: Higher interest expense, net
−Removed: First quarter 2022
−Removed: First quarter Aggregates segment sales increased 25%, while gross profit increased $19.2 million, or 9%, to $242.8 million ($4.58 per ton).
−Removed: These first quarter results included a $2.4 million unfavorable impact from selling acquired inventory after its markup to fair value and a $16.7 million unfavorable impact from significantly higher (62%) diesel fuel costs.
−Removed: Cash gross profit per ton was $6.53 in the quarter.
−Removed: Excluding the impact of higher diesel fuel costs and the impact of selling acquired inventory after its markup to fair value, cash gross profit per ton increased 5% to $6.90 per ton.
−Removed: Total aggregates shipments were 53.0 million tons versus 46.4 million in last year’s first quarter, an increase of 14%.
+Added: Higher gain on sale of property, plant & equipment and businesses
+Added: Lower interest expense, net
+Added: Second quarter 2022
+Added: Second quarter Aggregates segment sales increased 25%, while gross profit increased $28.6 million, or 8%, to $402.4 million ($6.31 per ton).
+Added: Strong price growth and solid operational execution helped offset a $2.9 million unfavorable impact from selling acquired inventory after its markup to fair value, a $32.2 million unfavorable impact from significantly higher (102%) diesel fuel costs and inflationary pressures for many other parts and supplies.
+Added: Cash gross profit per ton was $7.99 in the quarter compared to $7.83 in the prior year quarter.
+Added: Excluding the impact of higher diesel fuel costs, cash gross profit per ton increased 9% to $8.50 per ton.
+Added: Results in the second quarter were also negatively impacted by the unexpected and arbitrary shut down by the Mexican government of our Mexico operations in early May.
+Added: Total aggregates shipments were 63.8 million tons versus 58.5 million in last year’s second quarter, an increase of 9%.
+Added: This increase reflects shipment contribution from acquisitions and construction activity consistent with our expectations.
Same-store aggregates shipments increased 2%.
−Removed: The increased volume reflected construction activity consistent with our expectations as well as the benefit of more typical weather in certain markets.
−Removed: Shipments in the prior year’s first quarter were impacted by severe winter weather conditions in February.
−Removed: As a result, daily shipping rates in February of the current year were sharply higher while daily shipping rates in March (the start of construction activity in many of our markets) were consistent with the full-year expectations.
−Removed: Growth in average selling prices continues to accelerate as a result of improvement in demand visibility and increasing inflationary pressures.
−Removed: In the first quarter, freight-adjusted pricing increased 5.8% over the prior year, or $0.85 per ton (mix adjusted pricing increased 6.9%).
−Removed: The growth was widespread across geographies.
−Removed: Solid operational execution helped mitigate higher year-over-year costs for diesel fuel and for certain parts and supplies.
−Removed: Freight-adjusted unit cash cost of sales increased 11%, or $0.88 per ton, as compared to the prior year’s first quarter.
−Removed: Excluding the impact of higher diesel fuel costs and the impact of selling acquired inventory after its markup to fair value, cash costs of sales increased 6%, or $0.51 per ton.
−Removed: On a trailing-twelve months basis, freight-adjusted cash costs per ton were 5% higher versus the comparable twelve months period.
−Removed: Overall, non-aggregates segments gross profit of $26.0 million was $20.3 million higher than the prior year’s first quarter.
−Removed: Asphalt segment gross profit was a loss of $2.9 million.
−Removed: Despite higher costs for liquid asphalt and natural gas in the first quarter of 2022, results were in line with the prior year.
−Removed: The average cost of liquid asphalt was 33% higher ($14.2 million) than the prior year’s first quarter when liquid prices were favorable to segment gross profit.
−Removed: Average selling prices for asphalt mix increased 12.8%, or $7.28 per ton, versus the prior year’s first quarter as pricing actions initiated in the second half of last year continued to gain traction.
−Removed: Strong price growth helped maintain material margins (selling price less cost of raw materials) despite the significant year-over-year increase in liquid asphalt.
−Removed: Asphalt volumes increased 5% overall driven by growth in Arizona, California and Tennessee.
−Removed: Concrete segment gross profit was $28.2 million for the first quarter compared to $7.8 million in the prior year.
−Removed: Segment results benefited mostly from the contribution of the U.S.
−Removed: Concrete operations but also from growth in shipments and price in our legacy operations.
−Removed: Material margins improved as higher selling prices helped offset higher raw materials costs, including aggregates supplied by us.
−Removed: Segment results were negatively impacted by higher diesel prices and the availability of truck drivers in certain markets.
+Added: Shipment activity was particularly good in many southeastern markets and Texas.
+Added: Price growth in the second quarter was widespread across our markets.
+Added: Freight-adjusted pricing was $16.25 per ton, an increase of 8.8% ($1.32 per ton) over the prior year.
+Added: Same-store freight-adjusted average sales price increased 9.0%, or
+Added: $1.35 per ton — excluding mix impact, aggregates price increased 9.6%.
+Added: We expect this pricing momentum to continue throughout the remainder of the year as the second round of price increases gains traction across our markets.
+Added: Freight-adjusted unit cash cost of sales increased 16%, or $1.16 per ton, as compared to the prior year’s second quarter.
+Added: Excluding the impact of higher diesel fuel costs and the impact of selling acquired inventory, cash cost of sales increased 8%, or $0.60 per ton.
+Added: Overall, non-aggregates segments gross profit of $43.8 million was $19.2 million higher than the prior year’s second quarter.
+Added: Asphalt segment gross profit of $13.6 million was up $0.1 million from the prior year’s second quarter.
+Added: Asphalt pricing increased 19.4%, or $11.28 per ton, helping offset a 42% ($29.5 million) increase in the average price paid for liquid asphalt as well as a $3.8 million year-over-year increase in natural gas cost.
+Added: Asphalt volumes increased 9% overall driven by growth in Arizona, California, and Texas, three of our largest asphalt markets.
+Added: Strong price growth through the first half of the year (up 16.8%, or $9.67 per ton, year-over-year) helped preserve unit material margins (selling price per ton less cost of raw materials per ton) despite sharp increases in liquid asphalt as well as higher prices for aggregates supplied by our Aggregates segment.
+Added: Concrete segment gross profit was $30.0 million for the second quarter compared to $10.3 million in the prior year.
+Added: Concrete results benefited from the contribution of U.S.
+Added: Concrete operations as well as strong price growth in our legacy operations.
+Added: Material unit margins improved as higher selling prices helped offset higher raw materials costs, including aggregates supplied by our Aggregates segment.
+Added: Segment results were negatively impacted by higher diesel prices and the availability of truck drivers and cement in certain markets.
Calcium segment gross profit of $0.2 million was $0.6 million lower than the prior year quarter.
2 unchanged sentences
Additionally, increased routine business development activities and more normalized travel expenses, due in part to integration activities, contributed to the year-over-year increase.
−Removed: Trailing-twelve months SAG expenses were 7.4% of total revenues, in line with the prior year.
−Removed: The prior year’s first quarter included the sale of a reclaimed quarry in Southern California.
−Removed: The transaction resulted in a pretax gain on sale of property, plant & equipment and businesses of $114.7 million, or $0.64 per diluted share.
−Removed: We remain focused on efforts to maximize the value of our portfolio of quarry operations as it moves through the land management life cycle.
+Added: Trailing-twelve months SAG expenses were 7.3% of total revenues, down 0.3 percentage points (30 basis points) from the comparable prior year amount.
Other operating expense, which has an approximate run-rate of $12.0 million a year (exclusive of discrete items), is composed primarily of idle facilities expense, environmental remediation costs, property abandonments and gain (loss) on settlement of AROs.
Total other operating expense and significant items included in the total were:
−Removed: $5.4 million in first quarter 2022 — includes discrete items as follows:
+Added: $6.2 million in second quarter 2022 — includes discrete items as follows:
$0.4 million of charges associated with divested operations
$0.2 million of non-routine business development charges (excludes items included in cost of goods sold)
−Removed: $1.8 million for managerial restructuring (related to U.
−Removed: $8.4 million in first quarter 2021 — includes discrete items as follows:
+Added: $0.9 million for managerial restructuring (related to U.S.
+Added: $10.4 million in second quarter 2021 — includes discrete items as follows:
$0.4 million of charges associated with divested operations
1 unchanged sentence
$1.3 million for COVID-19 pandemic direct incremental costs
−Removed: Other nonoperating income, net was a net income of $1.5 million for the first quarter of 2022 and was unfavorable by $4.4 million from the first quarter of 2021.
−Removed: Net interest expense was $35.9 million in the first quarter of 2022 compared to $33.1 million in the first quarter of 2021.
−Removed: Income tax expense from continuing operations was $18.7 million in the first quarter of 2022 compared to $60.6 million in the first quarter of 2021.
−Removed: The decrease in tax expense was primarily related to a decrease in pretax earnings in 2022 and an increase in the valuation allowance against the Alabama net operating loss in 2021.
−Removed: Earnings attributable to Vulcan from continuing operations were $0.70 per diluted share in the first quarter of 2022 compared to $1.21 per diluted share in the first quarter of 2021.
−Removed: Discontinued Operations — First quarter pretax loss from discontinued operations was $2.4 million in 2022 compared with a pretax loss of $1.4 million in 2021.
−Removed: Both periods include charges/credits related to general and product liability costs, including legal defense costs, and environmental remediation costs associated with our former Chemicals business.
+Added: Other nonoperating income (expense) was a net expense of $4.7 million for the second quarter of 2022 and was unfavorable by $13.0 million from the second quarter of 2021.
+Added: This unfavorable variance resulted primarily from unfavorable Rabbi Trust gains/losses and benefit plan costs of $6.3 million and $3.4 million, respectively.
+Added: Net interest expense was $38.7 million in the second quarter of 2022 compared to $41.7 million in the second quarter of 2021.
+Added: The prior year quarter included $9.4 million of interest expense related to financing the acquisition of U.S.
+Added: Concrete (see Note 7 to the condensed consolidated financial statements).
+Added: Income tax expense from continuing operations was $63.7 million in the second quarter of 2022 compared to $57.3 million in the second quarter of 2021.
+Added: The increase in tax expense was primarily related to an increase in pretax earnings in 2022 and an increase in our reserve for uncertain tax positions.
+Added: Earnings attributable to Vulcan from continuing operations were $1.50 per diluted share in the second quarter of 2022 compared to $1.47 per diluted share in the second quarter of 2021.
+Added: Discontinued Operations — Second quarter pretax loss from discontinued operations was $17.6 million in 2022 compared with a pretax loss of $1.9 million in 2021.
+Added: Both periods include charges/credits related to general and product liability costs, including legal defense costs, and environmental remediation costs associated with our former Chemicals business while the second quarter of 2022 includes an additional charge for a litigation matter.
For additional details, see Note 1 to the condensed consolidated financial statements under the caption Discontinued Operations.
+Added: year-to-date june 30, 2022 Compared to year-to-date june 30, 2021
+Added: Total revenues for the first six months of 2022 were $3,495.0 million, up 44% from the first six months of 2021.
+Added: Shipments increased in aggregates (+11%), asphalt mix (+7%) and ready-mixed concrete (+297%).
+Added: Gross profit increased in the Aggregates (+$47.7 million or 8%), Asphalt (+$0.2 million or 1%) and Concrete (+$40.1 million or 222%) segments.
+Added: An 83% increase in the unit cost of diesel fuel increased costs by $60.9 million from the first half of 2021 with most ($48.5 million) of this cost increase reflected in the Aggregates segment.
+Added: Net earnings attributable to Vulcan for the first six months of 2022 were $279.1 million, or $2.09 per diluted share, compared to $356.0 million, or $2.67 per diluted share, in the first six months of 2021.
+Added: Each period’s results were impacted by discrete items, as follows:
+Added: Net earnings attributable to Vulcan for the first six months of 2022 include:
+Added: pretax charges of $0.7 million associated with divested operations
+Added: pretax charges of $5.6 million associated with non-routine business development
+Added: pretax charges of $2.7 million for managerial restructuring (related to U.S.
+Added: pretax charges of $15.3 million for a litigation matter included in discontinued operations
+Added: Net earnings attributable to Vulcan for the first six months of 2021 include:
+Added: $13.7 million of tax charges related to an increase in the Alabama NOL carryforward valuation allowance
+Added: pretax net gain of $114.7 million related to the sale of a reclaimed quarry in Southern California
+Added: pretax charges of $0.7 million associated with divested operations
+Added: pretax charges of $5.9 million associated with non-routine business development
+Added: pretax charges of $3.8 million for COVID-19 pandemic direct incremental costs
+Added: pretax interest charges of $9.4 million related to financing the acquisition of U.S.
+Added: Adjusted for these discrete items, earnings attributable to Vulcan from continuing operations (Adjusted Diluted EPS) was $2.25 per diluted share for the first half of 2022 compared to $2.26 per diluted share in the first half of 2021.
+Added: Continuing Operations — Changes in earnings from continuing operations before income taxes for year-to-date June 30, 2022 versus year-to-date June 30, 2021 are summarized below:
+Added: earnings from continuing operations before income taxes
+Added: Year-to-date June 30, 2021
+Added: Higher aggregates gross profit
+Added: Higher asphalt gross profit
+Added: Higher concrete gross profit
+Added: Lower calcium gross profit
+Added: Higher selling, administrative and general expenses
+Added: Lower gain on sale of property, plant & equipment and businesses
+Added: Lower interest expense, net
+Added: Year-to-date June 30, 2022
+Added: First half 2022 Aggregates segment sales of $2,523.0 million were up 25% while aggregates shipments increased 11%, or 11.9 million tons, compared to the prior year.
+Added: Same-store aggregates shipments increased 4.5%, or 4.7 million tons.
+Added: Freight-adjusted average sales price for aggregates increased 7.4%, or $1.09 per ton, versus the first half of 2021.
+Added: Same-store freight-adjusted average sales price increased 7.8%, or $1.15 per ton — excluding mix impact, aggregates price increased 8.3%.
+Added: Aggregates segment gross profit was $645.2 million ($5.52 per ton) versus $597.5 million ($5.69 per ton) in the first half of 2021.
+Added: Cash gross profit per ton increased 1% from the prior year’s first half to $7.33 per ton.
+Added: First half 2022 freight-adjusted unit cost of sales increased 14%, or $1.26 per ton, versus the prior year.
+Added: The average unit cost of diesel fuel increased 83% versus the first half of 2021, decreasing Aggregates segment gross profit by $48.5 million or $0.41 per ton.
+Added: Additionally, first half r esults were negatively impacted by the aforementioned shut down by the Mexican government of our Mexico operations in early May.
+Added: On a trailing-twelve months basis, Aggregates segment gross profit margin as a percentage of segment sales excluding freight & delivery decreased 2.2 percentage points (220 basis points) to 36.1%.
+Added: Asphalt segment gross profit of $10.7 million was up $0.2 million from the first six months of 2021.
+Added: Asphalt mix shipments increased 7% while average unit selling prices increased 16.8%, or $9.67 per ton.
+Added: Compared to the prior year’s first half, asphalt mix unit material margins only decreased 1% despite a 39% increase in the average unit cost for liquid asphalt.
+Added: Concrete segment gross profit was $58.2 million for the first six months of 2022, an increase of $40.1 million from the prior year period.
+Added: Ready-mixed concrete shipments increased 297% (flat same-store) while the average sales price increased 11.8% and the unit material margins increased 18%.
+Added: Calcium segment’s gross profit of $0.8 million was down $0.7 million compared to the first half of 2021.
+Added: SAG expenses were $253.4 million versus $189.3 million in the prior year’s first half reflecting a 0.5 percentage point (50 basis point) decrease as a percentage of total revenues.
+Added: The current year included overhead expenses associated with U.S.
+Added: Concrete that were not in the prior year’s first half.
+Added: Gain on sale of property, plant & equipment and businesses was $4.6 million in the first half of 2022 versus $117.4 million in the first half of 2021.
+Added: The 2021 amount includes the aforementioned net pretax gain of $114.7 million from the sale of a reclaimed quarry in Southern California.
+Added: Other operating expense, which has an approximate run-rate of $12 million a year (exclusive of discrete items), is composed primarily of idle facilities expense, environmental remediation costs, property abandonments and gain (loss) on settlement of AROs.
+Added: Total other operating expense and significant items included in the total were:
+Added: $11.6 million in first half of 2022 — includes discrete items as follows:
+Added: $0.7 million of charges associated with divested operations
+Added: $0.2 million of non-routine business development charges (excludes items included in cost of goods sold)
+Added: $2.7 million for managerial restructuring (related to U.S.
+Added: $18.7 million in first half of 2021 — includes discrete items as follows:
+Added: $0.7 million of charges associated with divested operations
+Added: $5.9 million of non-routine business development charges
+Added: $3.8 million for COVID-19 pandemic direct incremental costs
+Added: Other nonoperating income (expense) was a net expense of $3.0 million for the first half of 2022, unfavorable by $17.2 million from the first half of 2021.
+Added: This unfavorable variance resulted primarily from unfavorable Rabbi Trust gains/losses and benefit plan costs of $9.5 million and $7.3 million, respectively.
+Added: Net interest expense was $74.7 million in the first half of 2022 compared to $74.8 million in the first half of 2021.
+Added: The 2022 expense factored in a higher debt level resulting from financing the acquisition of U.S Concrete while 2021 included $9.4 million of interest expense related t o f inancing the acquisition of U.S.
+Added: Concrete (see Note 7 to the condensed consolidated financial statements).
+Added: Income tax expense from continuing operations was $82.4 million in the first half of 2022 compared to $118.0 million in the first half of 2021.
+Added: The decrease in tax expense was primarily related to a decrease in pretax earnings in 2022 and the 2021 increase in the valuation allowance against the Alabama net operating loss (NOL).
+Added: Earnings attributable to Vulcan from continuing operations were $2.20 per diluted share in the first half of 2022 compared to $2.69 per diluted share in the first half of 2021.
+Added: Discontinued Operations — First half pretax loss from discontinued operations was $20.0 million in 2022 compared with a loss of $3.4 million in 2021.
+Added: Both periods include charges/credits related to general and product liability costs, including legal defense costs, and environmental remediation costs associated with our former Chemicals business while 2022 includes an additional charge for a litigation matter.
+Added: For additional details, see Note 1 to the condensed consolidated financial statements under the caption Discontinued Operations.
+Added: KNOWN TRENDS OR UNCERTAINTIES
+Added: Inflationary pressures and labor constraints are trends continuing to impact our operations in 2022.
+Added: Although inflationary pressures can create short- to medium-term headwinds, the combination of inflation and improving visibility of demand has created and may continue to create a favorable environment for price increases.
+Added: Additionally, labor constraints (especially truck drivers) have caused delays and inefficiencies in our operations as well as those of our customers.
+Added: If labor constraints continue and demand remains strong, our operations may proceed at a slower pace, which may effectively extend the recovery while allowing us the opportunity to compound price, control costs and grow earnings.
+Added: Further, recently, the Mexican government has taken actions adverse to our operations in that country.
+Added: On May 5, 2022, Mexican government officials presented employees at our SAC TUN subsidiary in Quintana Roo, Mexico with arbitrary shutdown orders to immediately cease underwater quarrying and extraction operations.
+Added: On May 13, 2022, the Mexican government suspended the three-year customs permit granted in March 2022 to our SAC TUN subsidiary and began a proceeding that could result in the revocation of that permit.
+Added: We strongly believe that the actions taken by Mexico are arbitrary and illegal.
+Added: We have sought injunctive relief in Mexico that, if granted and complied with, would enable us to resume normal operations including the extraction, processing and export of materials.
+Added: We intend to vigorously pursue all lawful avenues available to us in order to protect our rights, under both Mexican and international law, and resume normal operations as soon as permitted.
+Added: Our second quarter results included an approximate $20 million impact from this shutdown while our full year 2022 Outlook includes a potential EBITDA impact of $80 million to $100 million should we be unable to fully operate in Mexico for the balance of 2022.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
12 unchanged sentences
Three Months Ended
+Added: Six Months Ended
in millions, except per ton data
27 unchanged sentences
Aggregates segment
−Removed: Contribution from acquisitions (same-store)
−Removed: Same-store gross profit
Segment sales
1 unchanged sentence
Segment sales excluding freight & delivery
−Removed: Contribution from acquisitions (same-store)
−Removed: Same-store segment sales excluding freight & delivery
Gross profit margin excluding freight & delivery
−Removed: Same-store gross profit margin excluding
−Removed: freight & delivery
Incremental gross profit flow-through rate
−Removed: Same-store incremental gross profit flow-through rate
At the segment level, freight & delivery revenues include intersegment freight & delivery (which are eliminated at the consolidated level) and freight to remote distribution sites.
6 unchanged sentences
Aggregates segment cash gross profit per ton is computed by dividing Aggregates segment cash gross profit by tons shipped.
−Removed: Reconciliation of this metric to its nearest GAAP measure is presented below:
+Added: Aggregates segment cash cost of sales per ton is computed by subtracting Aggregates segment cash gross profit per ton from Aggregates segment freight-adjusted sales price.
+Added: Reconciliation of these metrics to their nearest GAAP measures are presented below:
Three Months Ended
+Added: Six Months Ended
in millions, except per ton data
5 unchanged sentences
Aggregates segment cash gross profit per ton
−Removed: Aggregates segment (same-store)
−Removed: Depreciation, depletion, accretion and amortization
−Removed: Aggregates segment (same-store) cash gross profit
−Removed: Unit shipments (same-store) - tons
−Removed: Aggregates segment (same-store) gross profit per ton
−Removed: Aggregates segment (same-store) cash gross profit per ton
+Added: Aggregates segment freight-adjusted sales price
+Added: Aggregates segment cash cost of sales per ton
Asphalt segment
14 unchanged sentences
Three Months Ended
+Added: Six Months Ended
Trailing-Twelve Months
29 unchanged sentences
Three Months Ended
+Added: Six Months Ended
Diluted Earnings Per Share
4 unchanged sentences
AL NOL carryforward valuation allowance
+Added: Acquisition financing interest costs
Adjusted diluted EPS attributable to Vulcan from
36 unchanged sentences
Projected EBITDA
+Added: Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures, other than the reconciliation of Projected EBITDA as noted above.
+Added: For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.
LIQUIDITY AND FINANCIAL RESOURCES
16 unchanged sentences
minimize financial and other covenants that limit our operating and financial flexibility
−Removed: Included in our March 31, 2022 cash and cash equivalents and restricted cash balances of $133.0 million is $9.9 million of restricted cash as described in Note 1 under the caption Restricted Cash.
+Added: Included in our June 30, 2022 cash and cash equivalents and restricted cash balances of $123.7 million is $3.0 million of restricted cash as described in Note 1 under the caption Restricted Cash.
cash from operating activities
−Removed: Three Months Ended
+Added: Six Months Ended
Depreciation, depletion, accretion and amortization (DDA&A)
6 unchanged sentences
Primarily reflects changes to working capital balances.
−Removed: Net cash provided by operating activities was $175.6 million during the three months ended March 31, 2022, a $6.3 million increase compared to the same period of 2021.
−Removed: Days sales outstanding, a measurement of the time it takes to collect receivables, were 44.8 days at March 31, 2022 compared to 40.1 days at March 31, 2021.
−Removed: Additionally, our over 90 day balance of $43.4 million at March 31, 2022 was up significantly from the $13.9 million at March 31, 2021.
+Added: Net cash provided by operating activities was $325.5 million during the six months ended June 30, 2022, a $72.4 million decrease compared to the same period of 2021.
+Added: Days sales outstanding, a measurement of the time it takes to collect receivables, were 46.5 days at June 30, 2022 compared to 41.7 days at June 30, 2021.
+Added: Additionally, our over 90 day balance of $39.1 million at June 30, 2022 was up from the $10.0 million at June 30, 2021.
All customer accounts are actively managed and no losses in excess of amounts reserved are currently expected.
cash from investing activities
−Removed: Net cash used for investing activities was $302.5 million during the first three months of 2022, a $388.3 million increase in cash used compared to cash provided of $85.8 million in the same period of 2021.
−Removed: D uring the first three months of 2022, w e invested $160.4 million in our existing operations (includes changes in accruals for property, plant & equipment) compared to $100.7 million in the prior year period.
+Added: Net cash used for investing activities was $468.7 million during the first six months of 2022, a $467.2 million increase in cash used compared to cash used of $1.5 million in the same period of 2021.
+Added: D uring the first six months of 2022, w e invested $290.6 million in our existing operations (includes changes in accruals for property, plant & equipment) compared to $192.2 million in the prior year period.
Of this $290.6 million, $90.7 million was invested in internal growth projects to enhance our distribution capabilities, develop new production sites and enhance existing production facilities and other growth opportunities.
−Removed: In the first three months of 2022, proceeds from the sale of property, plant & equipment were down $180.3 million from the first three months of 2021.
−Removed: In 2021, we sold reclaimed real estate in Southern California for net cash proceeds of $182.3 million (see Note 16 to the condensed consolidated financial statements).
+Added: In the first six months of 2022, proceeds from the sale of property, plant & equipment were down $180.5 million from the first six months of 2021.
+Added: In 2021, we sold reclaimed real estate in Southern California for net cash proceeds of $182.3 million.
+Added: Additionally, during the first half of 2022 we acquired businesses for $188.1 million of cash consideration as compared to no business acquisitions in the same period of 2021 (see Note 16 to the condensed consolidated financial statements).
cash from financing activities
−Removed: Net cash provided by financing activities in the first three months of 2022 was $18.4 million, compared to cash used of $562.2 million in the same period of 2021.
−Removed: The current year includes a $100.0 million net draw on our line of credit.
−Removed: The prior year includes cash paid to retire the $500.0 million floating rate notes due March 2021.
+Added: Net cash provided by financing activities in the first six months of 2022 was $25.4 million, compared to cash used of $626.0 million in the same period of 2021.
+Added: The current year includes a $176.0 million net draw on our line of credit (see Note 7 to the condensed consolidated financial statements).
+Added: The prior year period includes cash paid to retire the $500.0 million floating rate notes due March 2021 and $13.3 million of financing costs for a bridge facility commitment and delayed draw term loan.
Additionally, capital returned to our shareholders increased by $8.1 million as a result of higher dividends ($0.80 per share compared to $0.74 per share).
13 unchanged sentences
we also paid upfront fees that are amortized to interest expense and pay fees for unused borrowing capacity and standby letters of credit.
−Removed: At March 31, 2022, total debt to trailing-twelve months Adjusted EBITDA was 2.7 times or 2.6 times on a net debt basis reflecting $133.0 million of cash on hand.
+Added: At June 30, 2022, total debt to trailing-twelve months Adjusted EBITDA was 2.6 times (2.5 times on a net debt basis reflecting $123.7 million of cash on hand).
Our weighted-average debt maturity was 11.4 years.
7 unchanged sentences
The delayed draw term loan contains covenants customary for an unsecured investment-grade facility and mirror those in our line of credit.
−Removed: As of March 31, 2022, we were in compliance with the delayed draw term loan covenants.
+Added: As of June 30, 2022, we were in compliance with the delayed draw term loan covenants.
Borrowings, cost ranges and other details are described in Note 7 to the condensed consolidated financial statements.
3 unchanged sentences
Covenants, borrowings, cost ranges and other details are described in Note 7 to the condensed consolidated financial statements.
−Removed: As of March 31, 2022, we were in compliance with the line of credit covenants, the margin for the Secured Overnight Financing Rate (SOFR) borrowings was 1.125%, the margin for base rate borrowings was 0.125%, and the commitment fee for the unused amount was 0.100%.
−Removed: As of March 31, 2022, our available borrowing capacity under the line of credit was $830.4 million.
+Added: As of June 30, 2022, we were in compliance with the line of credit covenants, the margin for the Secured Overnight Financing Rate (SOFR) borrowings was 1.125%, the margin for base rate borrowings was 0.125%, and the commitment fee for the unused amount was 0.100%.
+Added: As of June 30, 2022, our available borrowing capacity under the line of credit was $745.9 million.
Utilization of the borrowing capacity was as follows:
$176.0 million was borrowed
−Removed: $69.6 million was used to provide support for outstanding standby letters of credit
+Added: $78.1 million was used to support standby letters of credit
Essentially all of our $3,941.9 million (face value) of term debt (which includes the $1,100.0 million delayed draw term loan) is unsecured.
$2,840.2 million of such debt is governed by two essentially identical indentures that contain customary investment-grade type covenants.
−Removed: As of March 31, 2022, we were in compliance with all term debt covenants.
+Added: As of June 30, 2022, we were in compliance with all term debt covenants.
In August 2021, we assumed $434.5 million (fair value) of senior notes due 2029 in connection with the acquisition of U.S.
1 unchanged sentence
CURRENT MATURITIES of long-term debt
−Removed: The $3.9 million of current maturities of long-term debt as of March 31, 2022 is due as follows:
−Removed: Second quarter 2022
+Added: The $0.5 million of current maturities of long-term debt as of June 30, 2022 is due as follows:
Third quarter 2022
1 unchanged sentence
First quarter 2023
−Removed: Our debt ratings and outlooks as of March 31, 2022 are as follows:
+Added: Second quarter 2023
+Added: Our debt ratings and outlooks as of June 30, 2022 are as follows:
Rating/Outlook
13 unchanged sentences
issued and outstanding
−Removed: As of March 31, 2022, there were 8,064,851 shares remaining under the February 2017 Board of Directors’ share purchase authorization.
+Added: As of June 30, 2022, there were 8,064,851 shares remaining under the February 2017 Board of Directors’ share purchase authorization.
Depending upon market, business, legal and other conditions, we may purchase shares from time to time through the open market (including plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934) and/or privately negotiated transactions.
5 unchanged sentences
Average cost per share
−Removed: There were no shares held in treasury as of March 31, 2022, December 31, 2021 and March 31, 2021.
+Added: There were no shares held in treasury as of June 30, 2022, December 31, 2021 and June 30, 2021.
off-balance sheet arrangements
11 unchanged sentences
We believe that the accounting policies described in the “Management's Discussion and Analysis of Financial Condition and Results of Operations” section of our Form 10-K require the most significant judgments and estimates used in the preparation of our consolidated financial statements, so we consider these to be our critical accounting policies.
−Removed: There have been no changes to our critical accounting policies during the three months ended March 31, 2022.
+Added: There have been no changes to our critical accounting policies during the six months ended June 30, 2022.
new Accounting standards
54 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.