13 unchanged sentences
Other current assets
−Removed: Assets held for sale
Total current assets
11 unchanged sentences
Other current liabilities
−Removed: Liabilities held for sale
Total current liabilities
19 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
in millions, except per share data
5 unchanged sentences
Loss on impairments
−Removed: Other operating expense, net
+Added: Other operating income (expense), net
Operating earnings
−Removed: Other nonoperating income (expense), net
+Added: Other nonoperating income, net
Interest expense, net
4 unchanged sentences
Loss on discontinued operations, net of tax
−Removed: (Earnings) loss attributable to noncontrolling interest
+Added: Earnings attributable to noncontrolling interest
Net earnings attributable to Vulcan
−Removed: Other comprehensive income (loss), net of tax
+Added: Other comprehensive income, net of tax
Amortization of prior cash flow hedge loss
3 unchanged sentences
Comprehensive income
−Removed: Comprehensive (earnings) loss attributable to
+Added: Comprehensive earnings attributable to
noncontrolling interest
12 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: Nine Months Ended
+Added: Three Months Ended
Operating Activities
6 unchanged sentences
Share-based compensation expense
−Removed: Deferred tax expense
+Added: Deferred tax provision (benefit)
Changes in assets and liabilities before initial
4 unchanged sentences
Proceeds from sale of property, plant & equipment
+Added: Proceeds from sale of businesses
Payment for businesses acquired, net of acquired cash
Net cash used for investing activities
−Removed: $ ( 1,760.6 )
Financing Activities
15 unchanged sentences
NATURE OF OPERATIONS
−Removed: Vulcan Materials Company (the “Company” or “Vulcan”), a New Jersey corporation, is the nation’s largest supplier of construction aggregates (primarily crushed stone, sand and gravel), a major producer of asphalt mix and ready-mixed concrete, and a supplier of construction paving services.
+Added: Vulcan Materials Company (the “Company,” “Vulcan,” “we,” “our”), a New Jersey corporation, is the nation’s largest supplier of construction aggregates (primarily crushed stone, sand and gravel), a major producer of asphalt mix and ready-mixed concrete, and a supplier of construction paving services.
We operate primarily in the United States, and our principal product — aggregates — is used in virtually all types of public and private construction projects and in the production of asphalt mix and ready-mixed concrete.
6 unchanged sentences
These three demographic factors are significant drivers of demand for aggregates.
−Removed: While aggregates is our focus and primary business, we produce and sell asphalt mix and/or ready-mixed concrete in our Alabama, Arizona, California, Maryland, New Jersey, New Mexico, New York, Oklahoma, Pennsylvania, Tennessee, Texas, Virginia, U.S.
−Removed: Virgin Islands, Washington D.C.
−Removed: and Bahamas markets.
+Added: While aggregates is our focus and primary business, we produce and sell asphalt mix and/or ready-mixed concrete in our Alabama, Arizona, California, Maryland, New Mexico, Oklahoma, Tennessee, Texas, Virginia, U.S.
+Added: Virgin Islands and Washington D.C.
BASIS OF PRESENTATION
4 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 and nine month periods ended September 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 current conflict between Russia and Ukraine.
−Removed: Construction activity continues to be impacted by capacity constraints (including supply chain bottlenecks, labor shortages and transportation availability) and cost inflation.
−Removed: Additionally, period-over-period comparisons are significantly impacted by our August 2021 acquisition of U.S.
−Removed: Concrete (see Note 16).
+Added: Operating results for the three-month period ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 .
+Added: Construction activity continues to be impacted by cost inflation and capacity constraints (including supply chain bottlenecks, labor shortages and transportation availability).
Our condensed consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets, liabilities, revenues and expenses.
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 September 30, 2022 will be reflected in management’s estimates for future periods.
+Added: Events that relate to conditions arising after March 31, 2023 will be reflected in management’s estimates for future periods.
NONCONTROLLING INTEREST
−Removed: In connection with our August 2021 U.S.
−Removed: Concrete acquisition, we obtained an 88 % controlling interest in the Orca Sand and Gravel Limited Partnership (Orca) .
+Added: In connection with our acquisition of U.S.
+Added: Concrete in 2021, we obtained an 88 % controlling interest in the Orca Sand and Gravel Limited Partnership (Orca) .
Orca was formed to develop the Orca quarry in British Columbia, Canada.
13 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
Discontinued Operations
6 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
Weighted-average common shares
9 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
Antidilutive common stock equivalents
1 unchanged sentence
Certain items previously reported in specific financial statement captions have been reclassified to conform to the 2023 presentation.
+Added: Such reclassifications had no impact on our prior results of operations, financial position or cash flows.
Our portfolio of nonmineral leases is composed of leases for real estat e (i ncluding office buildings, aggregates sales yards and terminals , and concrete and asphalt sites) and equipmen t ( including railcars and rail track, barges , and office, plant and mobile equipment).
11 unchanged sentences
Total lease assets
−Removed: Liabilities 1
Other current liabilities
10 unchanged sentences
Finance leases
−Removed: Includes lease assets and liabilities that are classified as held for sale as detailed in Note 16.
+Added: The decreases from March 31, 2022 in ROU assets and liabilities presented above primarily relate to the 2022 sale of concrete operations in New Jersey, New York and Pennsylvania (see Note 16 for additional information).
Our lease agreements do not contain residual value guarantees, restrictive covenants or early termination options that we deem material.
−Removed: We have not sought or been granted any material lease concessions as a result of the COVID-19 pandemic.
The components o f l ease expense are as follows:
Three Months Ended
−Removed: Nine Months Ended
Finance lease cost
7 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 $ 60.0 million and $ 44.6 million for the nine months ended September 30, 2022 and 2021, respectively.
−Removed: Cash paid for finance leases (principal and interest) was $ 28.0 million and $ 4.8 million for the nine months ended September 30, 2022 and 2021, respectively.
+Added: Cash paid for operating leases was $ 18.3 million and $ 20.9 million for the three months ended March 31, 2023 and 2022, respectively.
+Added: Cash paid for finance leases (principal and interest) was $ 6.1 million and $ 8.5 million for the three months ended March 31, 2023 and 2022, respectively.
Our estimated annual effective tax rate (EAETR) is based on full-year expectations of pretax earnings, statutory tax rates and permanent differences between book and tax accounting such as percentage depletion.
2 unchanged sentences
Significant judgment is required in determining our EAETR.
−Removed: In the third quarter of 2022, we recorded income tax expense from continuing operations of $ 82.3 million compared to $ 51.7 million in the third quarter of 2021.
−Removed: The increase in tax expense was primarily related to an increase in pretax earnings, the recording of a valuation allowance during the quarter against the net operating losses of one of our Mexican subsidiaries (discussed further below) and the impairment of non-tax deductible goodwill (see Note 15).
−Removed: For the first nine months of 2022, we recorded income tax expense from continuing operations of $ 164.6 million compared to $ 169.7 million for the first nine months of 2021.
−Removed: The decrease in tax expense was primarily related to lower pretax earnings partially offset by the impairment of non-tax deductible goodwill.
+Added: In the first quarter of 2023, we recorded income tax expense from continuing operations of $ 16.6 million compared to $ 18.7 million in the first quarter of 2022.
+Added: The decrease in tax expense was due to a tax benefit from a prior year business disposition, offsetting the higher taxes on the increase in pretax earnings in 2023.
In August 2022, the Inflation Reduction Act (IRA) was signed into law.
1 unchanged sentence
The CAMT provision is effective for tax years beginning on or after January 1, 2023.
−Removed: We do not anticipate that the provisions of the IRA will be material to our income taxes.
+Added: We do not anticipate being subject to CAMT in 2023.
We recognize deferred tax assets and liabilities (which reflect our best assessment of the future taxes we will pay) based on the differences between the book basis and tax basis of assets and liabilities.
5 unchanged sentences
As discussed in Note 8, in May 2022, Mexican government officials unexpectedly and arbitrarily shut down our Calica operations in Mexico.
−Removed: The impact of the shutdown, combined with recent increased costs (primarily due to underwater mining) has resulted in substantial losses.
−Removed: We project that Calica will generate a net operating loss (NOL) deferred tax asset of $ 13.6 million for 2022.
−Removed: Based on the weight of all available positive and negative evidence, we have concluded that it is more likely than not that Calica will be unable to realize the NOL deferred tax asset during the carryforward period.
−Removed: Therefore, in the third quarter of 2022, we recorded a valuation allowance against the current year NOL deferred tax asset as a component of the EAETR.
−Removed: Should the Mexican government lift the shutdown and/or we are successful in our NAFTA claim, we will reevaluate the need for a valuation allowance against the NOL deferred tax asset.
−Removed: In February 2021, the Alabama Business Competitiveness Act (ABC Act) was signed into law.
−Removed: The ABC Act contained a provision requiring most taxpayers to change from a three-factor, double-weighted sales method to a single-sales factor method to apportion income to Alabama.
−Removed: This provision had the effect of significantly reducing our apportionment of income to Alabama, thereby further inhibiting our ability to utilize our Alabama NOL carryforward.
−Removed: As a result, we recorded a charge in the first quarter of 2021 to increase the valuation allowance by $ 13.7 million.
−Removed: No other material tax impacts resulted from the enactment of the ABC Act.
−Removed: We project Alabama NOL carryforward deferred tax assets at December 31, 2022 of $ 61.6 million against which we have a valuation allowance of $ 42.9 million (after considering the ABC Act).
+Added: As a result, in 2022, Calica generated a net operating loss (NOL) deferred tax asset of $ 14.5 million.
+Added: Based on the weight of all available positive and negative evidence, we concluded that it is more likely than not that Calica will be unable to realize the NOL deferred tax asset during the ten-year carryforward period resulting in a valuation allowance of $ 14.5 million in 2022 ( no ne of which was recorded in the first quarter of 2022).
+Added: We project that Calica will generate a NOL deferred tax asset of $ 9.8 million in 2023 against which we recorded a valuation allowance as a component of the EAETR in the first quarter of 2023.
+Added: Should the Mexican government lift the shutdown and/or if we are successful in our North American Free Trade Agreement (NAFTA) claim, we will reevaluate the need for a valuation allowance against the NOL deferred tax asset.
+Added: We project Alabama NOL carryforward deferred tax assets at December 31, 2023 of $ 74.8 million against which we have a valuation allowance of $ 54.3 million.
Almost all of the Alabama NOL carryforward would expire between 2023 and 2029 if not utilized.
−Removed: We recognize a tax benefit associated with a tax position when, in our judgment, it is more likely than not that the position will be sustained based upon the technical merits of the position.
+Added: We recognize a tax benefit associated with a tax position when we judge it is more likely than not that the position will be sustained based upon the technical merits of the position.
For a tax position that meets the more likely than not recognition threshold, we measure the income tax benefit as the largest amount that we judge to have a greater than 50 % likelihood of being realized.
−Removed: A liability is established for the unrecognized portion of any tax benefit.
−Removed: Our liability for unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation.
+Added: A liability is established for the unrecognized portion of any tax position.
+Added: Our liability for unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new legislation.
While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, we believe our liability for unrecognized tax benefits is appropriate.
Revenues are measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services.
−Removed: Sales and other taxes we collect are recorded as liabilities until remitted and thus are excluded from revenues.
+Added: Sales taxes and other taxes we collect are recorded as liabilities until remitted and thus are excluded from revenues.
Costs to obtain and fulfill contracts (primarily asphalt construction paving contracts) are immaterial and are expensed as incurred when the expected amortization period is one year or less.
−Removed: Our segment total revenues by geographic market (excluding the U.S.
−Removed: Concrete acquisition which is only presented by segment) for the three and nine month periods ended September 30, 2022 and 2021 are disaggregated as follows:
−Removed: Three Months Ended September 30, 2022
−Removed: Total Revenues by Geographic Market 1
−Removed: Segment sales
−Removed: Intersegment sales
−Removed: Total revenues
−Removed: Three Months Ended September 30, 2021
−Removed: Total Revenues by Geographic Market 1
−Removed: Segment sales
−Removed: Intersegment sales
−Removed: Total revenues
−Removed: Nine Months Ended September 30, 2022
+Added: Our segment total revenues by geographic market for the three-month periods ended March 31, 2023 and 2022 are disaggregated as follows (the decrease in East market concrete revenues is primarily attributable to the sale of concrete operations in New Jersey, New York and Pennsylvania in November 2022;
+Added: see Note 16 for additional information):
+Added: Three Months Ended March 31, 2023
Total Revenues by Geographic Market 1
2 unchanged sentences
Total revenues
−Removed: Nine Months Ended September 30, 2021
+Added: Three Months Ended March 31, 2022
Total Revenues by Geographic Market 1
3 unchanged sentences
The geographic markets are defined by states/countries as follows:
−Removed: East market - Arkansas, Delaware, Illinois, Kentucky, Marylan d, N orth Carolina, Pennsylvania, Tennessee, Virgini a and Washington D.C.
−Removed: Gulf Coast market - Alabama, Florida, Georgia, Louisiana, Mississippi, Oklahoma, South Carolina, Texas, Freeport (Bahamas), Puerto Cortés (Honduras) and Quintana Roo (Mexico)
−Removed: West market - Arizon a, C alifornia and New Mexico
−Removed: Concrete - California, Hawaii, New Jersey, New York, Oklahoma, Pennsylvania, Texas, U.S.
−Removed: Virgin Islands, Washington D.C., and British Columbia (Canada)
+Added: East market - Arkansas, Delaware, Illinois, Kentucky, Marylan d, New Jersey, New York, N orth Carolina, Pennsylvania,
+Added: Tennessee, Virgini a and Washington D.C.
+Added: Gulf Coast market - Alabama, Florida, Georgia, Louisiana, Mississippi, Oklahoma, South Carolina, Texas, U.S.
+Added: Islands, Freeport (Bahamas), Puerto Cortés (Honduras) and Quintana Roo (Mexico)
+Added: West market - Arizon a, C alifornia, Hawaii, New Mexico and British Columbia (Canada)
Total revenues are primarily derived from our product sales of aggregates (crushed stone, sand and gravel, sand and other aggregates), asphalt mix and ready-mixed concrete, and include freight & delivery costs that we pass along to our customers to deliver these products.
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 $ 71.1 million ( 3.4 % of total revenues) and $ 66.2 million ( 4.4 % of total revenues) for the three months ended September 30, 2022 and 2021, respectively, and $ 178.0 million ( 3.2 % of total revenues) and $ 168.2 million ( 4.3 % of total revenues) for the nine months ended September 30, 2022 and 2021, respectively.
+Added: Our total service revenues were $ 35.0 million ( 2.1 % of total revenues) and $ 39.0 million ( 2.5 % of total revenues) for the three months ended March 31, 2023 and 2022, respectively.
Our products typically are sold to private industry and not directly to governmental entities.
9 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
Freight & Delivery Revenues
7 unchanged sentences
Under this approach, recognized contract revenue equals the total estimated contract revenue multiplied by the percentage of completion.
+Added: Future revenues from unsatisfied performance obligations (including contracts with an expected duration of 1 year or less) at March 31, 2023 and 2022 were $ 126.2 million and $ 167.2 million, respectively.
+Added: The remaining period to complete the obligations at March 31, 2023 ranged from 1 month to 41 months.
Our construction contracts are unit priced, and an account receivable is recorded for amounts invoiced based on actual units produced.
15 unchanged sentences
Given the nature of the risks and potential rewards assumed by the buyer, the transactions do not reflect financing activities.
−Removed: Reconciliation of the VPP deferred revenue balances (current and noncurrent) is as follows:
+Added: Changes in the VPP deferred revenue balances (current and noncurrent) are as follows:
Three Months Ended
−Removed: Nine Months Ended
Deferred Revenue
−Removed: Balance at beginning of period
+Added: Balance at beginning of year
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 twelve-month period ending September 30, 2023 (reflected in other current liabilities in our September 30, 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 twelve-month period ending March 31, 2024 (reflected in other current liabilities in our March 31, 2023 Condensed Consolidated Balance Sheet).
Fair Value Measurements
9 unchanged sentences
Fair Value Recurring
+Added: Interest rate swaps
Money market mutual fund
5 unchanged sentences
dollar-denominated money market instruments).
−Removed: Net gains (losses) of the Rabbi Trusts’ investments were $( 8.1 ) million and $ 2.4 million for the nine months ended September 30, 2022 and 2021, respectively.
−Removed: The portions of the net gains (losses) related to investments still held by the Rabbi Trusts at September 30, 2022 and 2021 were $( 8.3 ) million and $ 2.0 million, respectively.
+Added: Net gains (losses) of the Rabbi Trusts’ investments were $ 1.1 million and $( 1.1 ) million for the three months ended March 31, 2023 and 2022, respectively.
+Added: The portions of the net gains (losses) related to investments still held by the Rabbi Trusts at March 31, 2023 and 2022 were $ 1.3 million and $( 1.3 ) 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.
2 unchanged sentences
Additional disclosures for derivative instruments and interest-bearing debt are presented in Notes 6 and 7, respectively.
−Removed: During the third quarter of 2022, net assets held for sale with a carrying value of $ 196.9 million were written down to their estimated fair value less cost to sell of $ 180.0 million, resulting in an impairment loss of $ 16.9 million.
−Removed: The estimated fair value was determined based on the expected proceeds from the probable sale of the disposal group.
−Removed: Refer to Note 16 for the major categories of assets and liabilities classified as held for sale and Note 15 for a related goodwill impairment charge.
Derivative Instruments
2 unchanged sentences
We do not use derivative instruments for trading or other speculative purposes.
+Added: In March 2023, we issued $ 550.0 million of 5.80 % fixed-rate debt maturing in March 2026 .
+Added: Concurrently, we entered into fixed-to-floating interest rate swap agreements designated as fair value hedges in the amount of $ 550.0 million.
+Added: Under these swap agreements, we receive a fixed interest rate of 5.80 % (matches the fixed rate we pay on the $ 550.0 million of debt) and pay daily compound Secured Overnight Financing Rate (SOFR) plus 0.241 %.
+Added: The changes in the fair value of these swaps designated as fair value hedges are recorded in interest expense and are perfectly offset by changes in the fair value of the related debt also recorded in interest expense.
+Added: These swaps are recognized at fair value in the accompanying Condensed Consolidated Balance Sheets as follows:
+Added: Balance Sheet Location
+Added: Fair Value Hedges
+Added: Interest rate swaps
+Added: Other current assets
+Added: Interest rate swaps
+Added: Other noncurrent liabilities
+Added: Interest rate swaps net asset
+Added: See Note 5 for further discussion of fair value determination.
In 2007, 2018 and 2020, we entered into interest rate locks of future debt issuances to hedge the risk of higher interest rates.
3 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
+Added: Income Statement
Cash Flow Hedges
Loss reclassified from AOCI
−Removed: For the twelve-month period ending September 30, 2023, we estimate that $ 2.1 million of the $ 21.4 million net of tax loss in AOCI will be reclassified to interest expense.
+Added: Interest expense
+Added: For the twelve-month period ending March 31, 2024, we estimate that $ 2.2 million of the $ 20.6 million net of tax loss in AOCI will be reclassified to interest expense.
Debt is detailed as follows:
7 unchanged sentences
Commercial paper expires 2027 1
−Removed: Delayed draw term loan expires 2026
+Added: Delayed draw term loan due 2026
4.50 % notes due 2025
7 unchanged sentences
Unamortized discounts and debt issuance costs
+Added: Fair value adjustments 3
Total long-term debt - book value
3 unchanged sentences
Borrowings on the bank line of credit and commercial paper 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 $ 5.0 million and $ 12.6 million of net interest expense for these items for the nine months ended September 30, 2022 and 2021, respectively.
+Added: The effective interest rate excludes the impact of the interest rate swap described in Note 6.
+Added: See Note 6 for additional information on our fair value hedging strategy.
+Added: Discounts and debt issuance costs are amortized using the effective interest method over the terms of the respective notes resulting in $ 2.5 million and $ 1.3 million of net interest expense for these items for the three months ended March 31, 2023 and 2022, respectively.
DELAYED DRAW TERM LOAN, LINE OF CREDIT AND COMMERCIAL PAPER PROGRAM
−Removed: In June 2021, concurrent with the announcement of the pending acquisition of U.S.
−Removed: Concrete (see Note 16 for additional information), we obtained a $ 2,200.0 million bridge facility commitment from Truist Bank.
−Removed: Later in June 2021, we entered into a $ 1,600.0 million unsecured delayed draw term loan with a subset of the banks that provide our line of credit and terminated the bridge facility commitment.
−Removed: The delayed draw term loan was drawn in August 2021 for $ 1,600.0 million upon the acquisition of U.S.
−Removed: Concrete, was paid down to $ 1,100.0 million in September 2021 and was further paid down to $ 550.0 million in August 2022 (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.
−Removed: 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 September 30, 2022, we were in compliance with the delayed draw term loan covenants.
−Removed: 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.
−Removed: Borrowings on the delayed draw term loan bear interest, at our option, at either the Secured Overnight Financing Rate (SOFR) plus a margin ranging from 0.750 % to 1.250 % or Truist Bank’s base rate (generally, its prime rate) plus a margin ranging from 0.000 % to 0.250 %.
−Removed: The margins are determined by our credit ratings.
−Removed: As of September 30, 2022, the margin for SOFR borrowings was 0.875 %, and the margin for base rate borrowings was 0.000 %.
−Removed: Our unsecured line of credit was amended in August 2022 to increase the amount from $ 1,000.0 million to $ 1,600.0 million and extend the maturity date from September 2026 to August 2027.
+Added: In June 2021, we entered into a $ 1,600.0 million unsecured delayed draw term loan which was fully drawn in August 2021 upon the acquisition of U.S.
+Added: The delayed draw term loan was paid down to $ 1,100.0 million in September 2021 with cash on hand, paid down to $ 550.0 million in August 2022 using the proceeds from the issuance of commercial paper as described below and fully repaid in March 2023 using proceeds from the issuance of 5.80 % senior notes as described below.
+Added: Our unsecured line of credit was amended in August 2022 to increase the borrowing capacity from $ 1,000.0 million to $ 1,600.0 million and extend the maturity date from September 2026 to August 2027.
Our line of credit contains covenants customary for an unsecured investment-grade facility.
−Removed: As of September 30, 2022, we were in compliance with the covenants.
+Added: As of March 31, 2023, we were in compliance with the 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 September 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 %.
−Removed: In August 2022, we established a $ 1,600.0 million commercial paper program and borrowed $ 550.0 million under the program.
−Removed: Commercial paper borrowings bear interest at rates determined at the time of issuance and as agreed between us and the commercial paper investors.
−Removed: As of September 30, 2022, our available borrowing capacity under the line of credit was $ 1,210.0 million.
+Added: As of March 31, 2023, 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: In August 2022, we established a $ 1,600.0 million commercial paper program through which we borrowed $ 550.0 million that was used to partially repay the delayed draw term loan.
+Added: Commercial paper borrowings bear interest at rates determined at the time of borrowing and as agreed between us and the commercial paper investors.
+Added: As of March 31, 2023, our available borrowing capacity under the line of credit was $ 1,516.8 million.
Utilization of the borrowing capacity was as follows:
−Removed: $ 312.0 million was borrowed
+Added: No ne was borrowed
$ 83.2 million was used to support standby letters of credit
−Removed: Essentially all of our $ 3,941.9 million (face value) of term debt (which includes the $ 550.0 million delayed draw term loan and the $ 550.0 million commercial paper) is unsecured.
−Removed: $ 2,840.2 million of such debt is governed by two essentially identical indentures that contain customary investment-grade type covenants.
−Removed: As of September 30, 2022, we were in compliance with all term debt covenants.
−Removed: In August 2021, we assumed $ 434.5 million (fair value) of senior notes due 2029 in connection with the acquisition of U.S.
−Removed: Concrete and retired these notes in September 2021.
+Added: All of our $ 3,941.6 million (face value) of term debt (which includes the $ 550.0 million commercial paper) is unsecured.
+Added: All of the covenants in the debt agreements are customary for investment-grade facilities.
+Added: As of March 31, 2023, we were in compliance with all term debt covenants.
+Added: In March 2023, we issued $ 550.0 million of 5.80 % senior notes due 2026.
+Added: Total proceeds of $ 546.6 million (net of discounts and transaction costs), together with cash on hand, were used to repay the $ 550.0 million delayed draw term loan.
STANDBY LETTERS OF CREDIT
We provide, in the normal course of business, certain third-party beneficiaries with standby letters of credit to support our obligations to pay or perform according to the requirements of an underlying agreement.
−Removed: Such letters of credit typically have an initial term of one year , typically renew automatically, and can only be modified or canceled with the approval of the beneficiary.
−Removed: Except for $ 26.1 million of risk management letters of credit that expire in 2023, our standby letters of credit are issued by banks that participate in our $ 1,600.0 million line of credit and reduce the borrowing capacity thereunder.
−Removed: Our standby letters of credit as of September 30, 2022 are summarized by purpose in the table below:
+Added: Such letters of credit typically have an initial term of one year , renew automatically and can only be modified or canceled with the approval of the beneficiary.
+Added: Our standby letters of credit are issued by banks that participate in our $ 1,600.0 million line of credit and reduce the borrowing capacity thereunder.
+Added: Our standby letters of credit as of March 31, 2023 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 $ 768.8 million as of September 30, 2022 (including liabilities classified as held for sale – see Note 16).
−Removed: As summarized by purpose in Note 7, our standby letters of credit totaled $ 104.1 million as of September 30, 2022.
−Removed: As described in Note 9, our asset retirement obligations totaled $ 340.0 million as of September 30, 2022.
+Added: As stated in Note 2, our lease liabilities totaled $ 646.3 million as of March 31, 2023.
+Added: As summarized by purpose in Note 7, our standby letters of credit totaled $ 83.2 million as of March 31, 2023.
+Added: As described in Note 9, our asset retirement obligations totaled $ 311.9 million as of March 31, 2023.
LITIGATION AND ENVIRONMENTAL MATTERS
28 unchanged sentences
Certain PRPs, including Vulcan, thereafter received a joint confidential settlement demand from the EPA/Department of Justice (DOJ).
−Removed: In early February 2022, Vulcan and certain of the other PRPs that received the joint confidential settlement demand (the Settling Defendants) reached an agreement in principle with the EPA/DOJ.
−Removed: The Settling Defendants and the governmental agencies intend to negotiate a consent decree.
−Removed: If the consent decree is approved by the court, Vulcan’s portion of the settlement would be within the immaterial loss recorded for this matter in 2015.
−Removed: In July 2018, Vulcan, along with more than one hundred other defendants, was sued by Occidental in United States District Court for the District of New Jersey, Newark Vicinage.
−Removed: Occidental is seeking cost recovery and contribution under CERCLA.
−Removed: It is unknown at this time how the proposed settlement with the EPA/DOJ would affect the Occidental lawsuit.
−Removed: ■ TEXAS BRINE MATTER (DISCONTINUED OPERATIONS) — Durin g o peration of its former Chemicals Division, Vulcan secured the right to mine salt out of an underground salt dome formation in Assumption Parish, Louisiana from 1976 - 2005.
−Removed: Throughout that perio d, T exas Brine Company, L.L.C.
−Removed: (Texas Brine) was the operator contracted by Vulca n t o mine and deliver th e brine.
−Removed: W e sold our Chemicals Division in 2005 and transferred our rights and interest related to the salt and mining operations to the purchaser, a subsidiary of Occidental Chemical Company (Occidental), a nd we have had no association with the leased premises or Texas Brine since that time.
−Removed: After the sale, Texas Brine continued to mine and deliver brine to Occidental.
−Removed: In August 2012, a sinkhole developed in the vicinity of the Texas Brine mining operations, and numerous lawsuits were filed in state court in Assumption Parish, Louisiana.
−Removed: Other lawsuits, including class action litigation, wer e f iled in federal court before the Eastern District of Louisiana in New Orleans.
−Removed: There have been numerous defendants , including Texas Brine and Occidental, to the litigation in state and federal court.
−Removed: Vulcan was first brought into the litigation as a third-party defendant in August 2013 b y T exas Bri ne .
−Removed: We were then added as a direct and third-party defendant by other parties, including a direct claim by the S tate of Louisian a.
−Removed: Damage categories encompassed within the litigation include, but are not limited to, individual plaintiffs’ claims for property damage ;
+Added: Vulcan and certain of the other PRPs that received the joint confidential settlement demand (the Settling Defendants) reached an agreement to settle with the EPA/DOJ and negotiated a Consent Decree.
+Added: The Consent Decree has been lodged with the court.
+Added: Vulcan’s portion of the settlement is within the immaterial loss recorded for this matter in 2015.
+Added: In July 2018, Vulcan, along with more than 100 other defendants, was sued by Occidental in United States District Court for the District of New Jersey, Newark Vicinage.
+Added: Occidental is seeking cost recovery and contribution under CERCLA for costs related to the River.
+Added: This lawsuit is currently stayed pending adjudication of the Consent Decree.
+Added: In another related proceeding, Occidental filed a lawsuit in March 2023 against Vulcan and 39 other defendants in United States District Court for the District of New Jersey, Newark Vicinage seeking cost recovery and contribution under CERCLA for costs related to the upper 9 miles of the River.
+Added: It is unknown at this time how the settlement and approval of the Consent Decree with the EPA/DOJ would affect the Occidental lawsuits.
+Added: ■ TEXAS BRINE MATTER (DISCONTINUED OPERATIONS) — Durin g o peration of its former Chemicals Division, Vulcan leased the right to mine salt out of an underground salt dome formation in Assumption Parish, Louisiana from 1976 - 2005.
+Added: Throughout that perio d, T exas Brine Company (Texas Brine) was the operator contracted by Vulca n t o mine and deliver th e salt as brine.
+Added: W e sold our Chemicals Division in 2005 and transferred our rights and interests related to the salt and mining operations to the purchaser, a subsidiary of Occidental Chemical Company (Occidental), a nd we have had no association with the leased premises or Texas Brine since that time.
+Added: In August 2012, a sinkhole developed in the vicinity of the Texas Brine mining operations.
+Added: Numerous lawsuits were filed thereafter in state court in Assumption Parish, Louisiana.
+Added: Other lawsuits, including class action litigation, wer e f iled in the United States District Court for the Eastern District of Louisiana in New Orleans.
+Added: In these lawsuits, the main plaintiffs sued numerous defendants , including Texas Brine, Occidental and Vulcan, alleging various damages including, but not limited to, property damages ;
a claim by the S tate of Louisia na for response costs and civil penalties ;
−Removed: claims by Texas Brine for past and future response costs , l os s of profits and investment opportunities, indemnity and contribution, attorneys’ fees, other litigation costs, and judicial interest;
−Removed: c laims for physical damages to nearby oil and gas pipeline s and storage facilities (pipelines);
−Removed: and business interruption claims .
−Removed: The claims implicating Vulcan sound in tort and contract.
−Removed: With regard to the tort claims, it has been alleged that the sinkhole was caused, in whole or in part, by our negligent or fraudulent actions or failure to act.
−Removed: With regard to the contract claims, it has also been alleged that we breached the salt lease with Occidental , as well as an operating agreement and related contracts with Texas Brin e;
−Removed: that we are strictly liable for certain damages in our capacity as a former lessee of the salt lease;
−Removed: and that we violated certain covenants and conditions in the agreement under which we sold our Chemicals Division to Occidental.
−Removed: We likewise made claims for contractual indemnity and on the basis of comparative fault against Texas Brine and Occidental.
−Removed: Vulcan and Occidental have since dismissed their claims against one another.
−Removed: The State of Louisiana has claims that remain pending against Texas Brine, Vulcan, and Occidental.
−Removed: Texas Brine and Occidental also have claims pending against each other in arbitration.
−Removed: A joint bench trial (judge only) began in September 2017 and ended in October 2017 in the three pipeline cases.
−Removed: The trial addressed comparative fault and liability for causing the sinkhole.
−Removed: In December 2017, the judge issued a ruling allocating fault among the three defendants as follows:
−Removed: Occidental (and affiliates) 50 %, Texas Brine (and its wholly-owned subsidiary) 35 % and Vulcan 15 %.
−Removed: This ruling was appealed by the parties in each of the pipeline cases.
−Removed: In December 2020, the Louisiana Court of Appeal, First Circuit , issued a Notice of Jud gm ent and Disposition in one of the pipeline cases reversing in part and amending the trial court judgment to reallocate 20 % of the fault from Occidental to Texas Brine, with the result that 30 % of the fault is now allocated to Occidental and 55 % of the fault is now allocated to Texas Brine (and its wholly-owned subsidiary) .
−Removed: The Court of Appeal affirmed the 15 % fault allocation to Vulcan.
−Removed: The Court of Appeal made various other findings, including findings related to the arbitrability o f cl aims between Occidental and Texas Brine.
−Removed: In May 2021 and April 2022, the Court of Appeal issued judgments in the other two pipeline cases, assigning the same fault allocation.
−Removed: Writs were sought from the Louisiana Supreme Court for review of all three appellate decisions.
−Removed: Those applications were denied, resulting in final judgments regarding fault allocations in the three pipeline cases.
−Removed: We have settled claims by all plaintiffs except claims by the State of Louisiana and Texas Brine, including a recent overlapping lawsuit by Texas Brine asserting claims and demands against Vulcan concerning potential exposure by Texas Brine to Occidental and the State of Louisiana and ongoing and future sinkhole-related Louisiana regulatory matters.
−Removed: The new Texas Brine lawsuit also adds a former Vulcan employee as a defendant.
−Removed: In August 2022, Vulcan removed this lawsuit to federal court and filed initial responsive pleadings.
−Removed: During the second quarter of 2022, we recorded an immaterial loss related to claims by Texas Brine.
−Removed: During August 2022, Vulcan and Texas Brine commenced a bench trial related to Texas Brine’s claims that remained pending in the three pipeline cases.
−Removed: After three days of trial, the parties stipulated to the amount of Texas Brine’s tort damages at issue in the trial.
+Added: physical damages to oil and gas pipelines and storage facilities (pipelines);
+Added: and business interruption losses .
+Added: All such claims have been settled except for the claims by the State of Louisiana.
+Added: Our insurers to date have funded these settlements in excess of our self-insured retention amount.
+Added: Additionally, Texas Brine, Occidental and Vulcan sued each other in various state and federal court forums.
+Added: Vulcan and Occidental have since dismissed all of their claims against one another;
+Added: Texas Brine’s and Occidental’s claims against each other are pending in arbitration;
+Added: and Texas Brine’s and Vulcan’s claims against each other are pending in state and federal court.
+Added: In general, Texas Brine alleges that the sinkhole was caused, in whole or in part, by our negligent or fraudulent actions or failure to act;
+Added: that we breached the salt lease with Occidental, as well as an operating agreement and related contracts with Texas Brine;
+Added: that we were strictly liable for certain property damages in our capacity as a former lessee of the salt lease;
+Added: and that we violated the agreement under which we sold our Chemicals Division to Occidental.
+Added: Texas Brine’s claims against Vulcan include claims for past and future response costs, lost profits and investment costs, indemnity payments, attorneys’ fees, other litigation costs, and judicial interests.
+Added: Texas Brine also recently filed a lawsuit against Vulcan seeking indemnity for potential exposure Texas Brine may have to Occidental in the related arbitration, the State of Louisiana, and for ongoing and future Louisiana regulatory matters.
+Added: In August 2022, we removed the lawsuit to federal court.
+Added: The state court held a joint bench trial (judge only) in 2017 in three cases brought by pipeline companies claiming damages to their facilities as a result of the sinkhole.
+Added: This “Phase 1” trial was limited in scope to comparative fault and liability for causing the sinkhole.
+Added: In December 2017, the trial court issued a ruling allocating fault as follows:
+Added: Occidental 50 %, Texas Brine (and its wholly-owned subsidiary) 35 % and Vulcan 15 %.
+Added: In December 2020, the Louisiana Court of Appeal, First Circuit reversed the judgment in part in one of the three jointly tried cases, allocating 55 % of the fault to Texas Brine (and its wholly-owned subsidiary);
+Added: 30 % to Occidental;
+Added: and affirming the 15 % fault allocation to Vulcan.
+Added: In May 2021 and April 2022, the Court of Appeal issued judgments in the other two pipeline cases, adopting the same fault allocation.
+Added: The Louisiana Supreme Court has declined to review the judgments, resulting in final judgments regarding fault allocations in those matters.
+Added: In the second quarter of 2022, we recorded an immaterial loss related to the claims brought by Texas Brine.
+Added: In August 2022, Vulcan and Texas Brine commenced a joint “Phase 2” bench trial in the same three pipeline cases where fault was allocated.
+Added: Prior to trial, the trial court granted various motions by Vulcan seeking dismissal of Texas Brine’s contract-based claims and hundreds of millions of dollars in alleged damages.
+Added: Thus, the Phase 2 trial addressed the claims that remained pending between Texas Brine and Vulcan after that motion practice.
+Added: During the Phase 2 trial, Texas Brine and Vulcan reached a negotiated joint stipulation as to the amount of Texas Brine’s damages for its surviving tort claims at issue in the trial.
After applying Vulcan’s 15 % fault allocation, Vulcan’s stipulated financial responsibility for the damages at issue in the trial is within the immaterial loss recorded during the second quarter of 2022.
−Removed: The court will now decide the amount of interest and costs, if any, to apply to the stipulated award.
−Removed: We anticipate that the court’s judgment will be consistent with the immaterial loss recorded during the second quarter of 2022.
−Removed: The stipulation did not resolve the numerous pre-trial judgments that are on appeal, which dismissed or barred what were potentially much more significant damage claims between Texas Brine and Vulcan.
−Removed: We cannot at this time reasonably estimate the range of liability, if any, that could result if an appellate court reverses any of the trial court’s pre-trial judgments.
−Removed: At this time w e cannot reasonably estimate a range of liability pertaining to the claims brought by the State of Louisiana.
−Removed: The State’s lawsuit has been dormant awaiting final disposition of the Phase 1 (liability) proceedings in the three pipeline cases.
−Removed: We are also unable to assess the range of liability, if any, that could result from Texas Brine’s new lawsuit.
−Removed: ■ 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.
−Removed: We are a defendant in 27 cases allegedly involving 1,1,1-trichloroethane.
−Removed: All of the cases are filed in the United States District Court for the Eastern District of New York.
−Removed: According to the various complaints, the plaintiffs are public drinking water providers who serve customers in seven New York counties (Nassau, Orange, Putnam, Sullivan, Ulster, Washington and Westchester).
−Removed: It is alleged that our 1,1,1-trichloroethane was stabilized with 1,4-dioxane and that various water wells of the plaintiffs are contaminated with 1,4-dioxane.
−Removed: The plaintiffs are seeking unspecified compensatory and punitive damages.
−Removed: We will vigorously defend the cases.
−Removed: At this time we cannot determine the likelihood or reasonably estimate a range of loss, if any, pertaining to the c ases.
+Added: In December 2022, the trial court entered a judgment in the pipeline cases reflecting this stipulation.
+Added: Texas Brine has moved to assess trial costs against Vulcan.
+Added: The December 2022 Phase 2 judgment did not address numerous of Texas Brine’s claims seeking hundreds of millions of dollars in damages that were dismissed prior to trial.
+Added: Texas Brine has appealed or is in the process of appealing each of those judgments.
+Added: We cannot at this time reasonably estimate the range of liability, if any, that could result if an appellate court reverses any of the trial court’s decisions.
+Added: At this time, w e also cannot reasonably estimate a range of liability pertaining to the claims brought by the State of Louisiana.
+Added: ■ NEW YORK WATER DISTRICT CASES AND NEW JERSEY NATURAL RESOURCE DAMAGES CASE (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 (TCA) .
+Added: We are a defendant in 29 cases allegedly involvin g TCA.
+Added: We are a defendant in 28 cases brought by New York water providers, and in one case brought by the State of New Jersey, all involving TCA stabilized with 1,4-dioxane.
+Added: The cases in New York are filed in the United States District Court for the Eastern District of New York.
+Added: According to the various complaints, the plaintiff-water providers serve customers in a number of New York counties (Nassau, Suffolk, Orange, Putnam, Sullivan, Ulster, Washington and Westchester) and seek unspecified compensatory damages associated with the remediation of water wells allegedly contaminated with 1,4-dioxane.
+Added: They are also seeking punitive damages.
+Added: The New Jersey case, filed in state court in Mercer County (Trenton) in March 2023, seeks recovery for the entire State of New Jersey based on alleged damages to surface water, ground water and other natural resources.
+Added: In the New Jersey case, the plaintiff seeks unspecified compensatory damages to restore the allegedly contaminated natural resources to a condition with zero 1,4-dioxane.
+Added: The plaintiff also seeks disgorgement of profits from the sale of TCA in New Jersey, as well as penalties and attorneys’ fees under various New Jersey statutes.
+Added: We will vigorously defend these cases on substantive and procedural grounds.
+Added: At this time , we cannot determine the likelihood of loss , or reasonably estimate a range of loss, if any, pertaining to the above-referenced c ases.
■ HEWITT LANDFILL MATTER (SUPERFUND SITE) — In September 2015, the Los Angeles Regional Water Quality Control Board (RWQCB) issued a Cleanup and Abatement Orde r di recting Vulcan to assess, monitor, cleanup and abate wastes that have been discharged to soil, soil vapor, and/or groundwater at the former Hewitt Landfill in Los Angeles.
12 unchanged sentences
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.
−Removed: 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.
−Removed: Given the various stakeholders involved and the uncertainties relating to remediation alternatives, we cannot reasonably estimate a loss pertaining to Vulcan’s responsibility for future remedial action required by the EPA.
+Added: In February 2023, the EPA requested that Vulcan provide a further report under the AOC, the Supplemental PDI Evaluation Report (Supplemental Report) and a Remedial Design Work Plan (RDWP).
+Added: Vulcan submitted the Supplemental Report in March 2023 and agreed to submit the RDWP by May 31, 2023.
+Added: Until the Supplemental Report and RDWP are finalized and the EPA has selected or agreed upon the remedy, we cannot reasonably estimate a loss pertaining to Vulcan’s responsibility for any such future remedial action.
In December 2019, Honeywell agreed with LADWP to build a water treatment system (often referred to as the Cooperative Containment Concept or CCC or the second interim remedy) that will provide treated groundwater in the NHOU to LADWP for public water supply purposes.
−Removed: Honeywell contends that some of the contamination to be remediated by the system it will build originated from the Hewitt Landfill and that Vulcan should fund some portion of the costs that Honeywell has incurred and will incur in developing the second interim remedy.
+Added: Honeywell contends that some of the contamination to be remediated by the treatment system it will build originated from the Hewitt Landfill and that Vulcan should fund some portion of the costs that Honeywell has incurred and will incur in developing the second interim remedy.
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.
−Removed: Discussions are ongoing with Honeywell regarding other costs Honeywell has incurred or will incur.
−Removed: 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 to be treated by Honeywell’s system, and we expect this work to be completed during the fourth quarter of 2022.
+Added: In March 2023, Honeywell filed a lawsuit against CalMat Co., a Vulcan subsidiary, and a third party alleging that Honeywell has incurred more than $ 11 million in costs to resolve its liability to the EPA and that it estimates that it will spend in excess of $ 100 million to construct and operate its water treatment system.
+Added: Honeywell seeks an "equitable share of necessary response costs"
+Added: from the defendants.
+Added: CalMat has yet to be served with the complaint, and discussions are ongoing with Honeywell regarding the reasonable costs Honeywell has incurred.
+Added: 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.
+Added: Based on this technical information, we have accrued an immaterial amount for our contribution of costs anticipated to be incurred by Honeywell.
This work is also intended to assist in identification of other PRPs that may have contributed to groundwater contamination in the area.
−Removed: At this time, we cannot reasonably estimate a range of an additional loss to Vulcan pertaining to this contribution claim.
Further, LADWP has announced plans to install new treatment capabilities at two city wellfields located near the Hewitt Landfill — the NHW wellfield and the RT wellfield.
−Removed: LADWP has alleged that the Hewitt Landfill is one of the primary PRPs for the contamination at the NHW wellfield and is one of many PRPs for the contamination at the RT wellfield.
−Removed: We are 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, consistent with the parallel request by the EPA.
−Removed: This work is also intended to assist in identification of other PRPs that may have contributed to groundwater contamination in the area.
−Removed: At this time, we cannot reasonably estimate a range of a loss to Vulcan pertaining to this contribution claim.
+Added: LADWP has alleged that the Hewitt Landfill is one of the primary PRPs responsible for the contamination at the NHW wellfield and is one of many PRPs responsible for the contamination at the RT wellfield.
+Added: We are gathering and analyzing records and data and developing technical information to assess the reasonableness of LADWP’s remediation efforts and the extent of possible contribution by the Hewitt Landfill to the groundwater contamination in the area, consistent with the parallel request by the EPA.
+Added: This work is intended to assess Vulcan’s anticipated equitable contribution to LADWP’s remediation efforts.
+Added: This work is also intended to assist in identification of other PRPs that may have contributed to groundwater contamination in the area of the NHW and RT wellfields.
+Added: At this time, we cannot reasonably estimate a range of a loss to Vulcan pertaining to LADWP’s potential contribution claim.
■ NAFTA ARBITRATION — In September 2018, our subsidiary Legacy Vulcan, LLC (Legacy Vulcan), on its own behalf, and on behalf of our Mexican subsidiary Calizas Industriales del Carmen, S.A.
(Calica), served the United Mexican States (Mexico) a Notice of Intent to Submit a Claim to Arbitration under Chapter 11 of the North American Free Trade Agreement (NAFTA).
−Removed: Our NAFTA claim relates to the treatment of a portion of our quarrying operations in Playa del Carmen (Cancun), Mexico, arising from, among other measures, Mexico’s failure to comply with a legally binding zoning agreement and relates to other unfair, arbitrary and capricious actions by Mexico’s environmental enforcement agency.
+Added: This NAFTA claim relates to the treatment of a portion of our quarrying operations in Quintana Roo, Mexico arising from, among other measures, Mexico’s failure to comply with a legally binding zoning agreement and relates to other unfair, arbitrary and capricious actions by Mexico’s environmental enforcement agency.
We assert that these actions are in breach of Mexico’s international obligations under NAFTA and international law.
15 unchanged sentences
Asset Retirement Obligations
−Removed: Asset retirement obligations (AROs) are legal obligations associated with the retirement of long-lived assets resulting from the acquisition, construction, development and/or normal use of the underlying assets, including legal obligations for land reclamation at both owned properties and mineral leases.
+Added: Asset retirement obligations (AROs) are legal obligations associated with the retirement of long-lived assets resulting from the acquisition, construction, development and/or normal use of the underlying assets, including legal obligations for land reclamation.
Recognition of a liability for an ARO is required in the period in which it is incurred at its estimated fair value.
4 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
ARO Operating Costs
3 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
Asset Retirement Obligations
−Removed: Balance at beginning of period
+Added: Balance at beginning of year
Liabilities incurred
3 unchanged sentences
Balance at end of period
−Removed: The increase in ARO liabilities from September 30, 2021 to September 30, 2022 primarily relates to acquisitions completed in 2022 (see Note 16).
Benefit Plans
4 unchanged sentences
In addition to these qualified plans, we sponsor three unfunded, nonqualified pension plans.
−Removed: During October 2021, we purchased (using pension plan assets) an ir revocable group annuity contract (pension lift-out) from an insurance company to transfer approximately 10 % of the total projected benefit obligation as of the purchase date.
−Removed: As a result of this transaction:
−Removed: 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 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
−Removed: Nine Months Ended
Components of Net Periodic Benefit Cost
3 unchanged sentences
Amortization of actuarial loss
−Removed: Net periodic pension benefit cost (credit)
+Added: Net periodic pension benefit cost
Pretax reclassifications from AOCI included in
net periodic pension benefit cost
−Removed: The contributions to pension plans for the nine months ended September 30, 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 three months ended March 31, 2023 and 2022, as reflected on the Condensed Consolidated Statements of Cash Flows, pertain to benefit payments under nonqualified plans for both periods.
POSTRETIREMENT PLANS
In addition to pension benefits, we provide certain healthcare and life insurance benefits for some retired employees.
−Removed: In 2021, we amended our postretirement healthcare plan to increase our employer contribution rate from the previously capped level (established in 2015) to a higher level effective 2022.
−Removed: This will serve as a cost reduction for retirees in 2022 that will carry forward as we use this new benchmark for future employer contributions.
+Added: In 2021, we amended our postretirement healthcare plan to increase our employer contribution rate from the previously capped level to a higher level effective 2022.
+Added: This served as a cost reduction for retirees in 2022 and beyond as we use this new benchmark for future employer contributions.
Substantially all our salaried employees and, where applicable, certain of our hourly employees may become eligible for these benefits if they reach a qualifying age and meet certain service requirements.
3 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
Components of Net Periodic Benefit Cost
Interest cost
−Removed: Amortization of prior service credit
+Added: Amortization of prior service cost (credit)
Amortization of actuarial gain
−Removed: Net periodic postretirement benefit cost (credit)
+Added: Net periodic postretirement benefit cost
Pretax reclassifications from AOCI included in
1 unchanged sentence
DEFINED CONTRIBUTION PLANS
−Removed: In addition to our pension and postretirement plans, we sponsor five defined contribution plans including three plans related to the U.S.
−Removed: Concrete acquisition.
+Added: In addition to our pension and postretirement plans, we sponsor five defined contribution plans.
Substantially all salaried and nonunion hourly employees are eligible to be covered by one of these plans.
Under these plans, we match employees’ eligible contributions at established rates.
−Removed: Expense recognized in connection with these matching obligations totaled $ 49.1 million and $ 49.9 million for the nine months ended September 30, 2022 and 2021, respectively.
+Added: Expense recognized in connection with these matching obligations totaled $ 18.9 million and $ 15.8 million for the three months ended March 31, 2023 and 2022, respectively.
other Comprehensive Income
5 unchanged sentences
Pension and postretirement plans
−Removed: Changes in AOCI, net of tax, for the nine months ended September 30, 2022 are as follows:
+Added: Changes in AOCI, net of tax, for the three months ended March 31, 2023 are as follows:
Postretirement
3 unchanged sentences
Net current period OCI changes
−Removed: Balances as of September 30, 2022
+Added: Balances as of March 31, 2023
Amounts reclassified from AOCI to earnings are as follows:
Three Months Ended
−Removed: Nine Months Ended
Amortization of Cash Flow Hedge Losses
10 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 September 30, 2022, December 31, 2021 and September 30, 2021.
−Removed: There were no common stock purchases for the periods ended September 30, 2022, December 31, 2021 and September 30, 2021.
−Removed: As of September 30, 2022, 8,064,851 shares may b e p urchased under the current authorizatio n o f our Board of Directo rs.
+Added: There were no shares held in treasury as of March 31, 2023, December 31, 2022 and March 31, 2022.
+Added: There were no common stock purchases for the periods ended March 31, 2023, December 31, 2022 and March 31, 2022.
+Added: As of March 31, 2023, 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
−Removed: Nine Months Ended
in millions, except per share data
Total Shareholders'
−Removed: Balance at beginning of period
+Added: Balance at beginning of year
Net earnings attributable to Vulcan
8 unchanged sentences
Noncontrolling Interest
−Removed: Balance at beginning of period
−Removed: Acquisition of noncontrolling interest
−Removed: Earnings (loss) attributable to noncontrolling interest
+Added: Balance at beginning of year
+Added: Earnings attributable to noncontrolling interest
Balance at end of period
7 unchanged sentences
These intersegment sales are made at local market prices for the particular grade and quality of product used in the production of asphalt mix and ready-mixed concrete and are excluded from total revenues.
−Removed: Management reviews earnings from the product line reporting segments principally at the gross profit level.
+Added: Management reviews earnings from these reporting segments principally at the gross profit level.
segment financial disclosure
Three Months Ended
−Removed: Nine Months Ended
Total Revenues
11 unchanged sentences
Certain temporarily idled assets are included within a segment's Identifiable Assets but the associated DDA&A is shown within Other in the DDA&A section above as the related DDA&A is excluded from segment gross profit.
−Removed: Includes assets classified as held for sale (see Note 16) .
+Added: The increase in Aggregates is primarily due to 2022 acquisitions, and the decrease in Concrete is primarily due to the divestiture of concrete operations in New Jersey, New York and Pennsylvania in November 2022 (see Note 16).
Supplemental Cash Flow Information
Supplemental information referable to our Condensed Consolidated Statements of Cash Flows is summarized below:
−Removed: Nine Months Ended
+Added: Three Months Ended
Cash Payments
1 unchanged sentence
Noncash Investing and Financing Activities
−Removed: Accrued liabilities for purchases of property, plant & equipment
−Removed: Recognition of new and revised asset retirement obligations 1
+Added: Accruals for purchases of property, plant & equipment
Recognition of new and revised lease obligations for
−Removed: Operating lease ROU assets
−Removed: Finance lease ROU assets
−Removed: Amounts referable to business acquisitions
−Removed: Operating lease ROU assets
−Removed: Finance lease ROU assets
−Removed: Other liabilities assumed
−Removed: Consideration payable to seller
−Removed: Excludes amounts acquired in business acquisitions .
+Added: Operating lease right-of-use assets
+Added: Finance lease right-of-use assets
+Added: Consideration payable to seller in business acquisitions
Goodwill is recognized when the consideration paid for a business exceeds the fair value of the tangible and identifiable intangible assets acquired.
1 unchanged sentence
We test goodwill for impairment on an annual basis or more frequently if events or circumstances change in a manner that would more likely than not reduce the fair value of a reporting unit below its carrying value.
−Removed: During the third quarter of 2022, we performed an interim goodwill impairment test due to a more-likely-than-not expectation of selling a reporting unit classified as held for sale (see Note 16).
−Removed: The carrying value of this reporting unit exceeded its estimated fair value (based on the expected proceeds from the probable sale) resulting in an impairment loss of $ 50.9 million.
−Removed: There were no charges for goodwill impairment in the nine month period ended September 30, 2021.
+Added: During the third quarter of 2022, we recorded an interim goodwill impairment loss of $ 50.9 million related to the fourth quarter sale of a reporting unit comprised of concrete operations in New Jersey, New York and Pennsylvania (see Note 16).
+Added: There were no charges for goodwill impairment in the three-month periods ended March 31, 2023 and 2022.
Accumulated goodwill impairment losses amount to $ 303.6 million ($ 252.7 million in our former Cement segment and $ 50.9 in our Concrete 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 September 30, 2022 are shown below:
+Added: Changes in the carrying amount of goodwill by reportable segment from December 31, 2022 to March 31, 2023 are shown below:
Totals at December 31, 2022
−Removed: Goodwill of acquired businesses 1
−Removed: Goodwill impairment
−Removed: Totals at September 30, 2022
+Added: Totals at March 31, 2023
See Note 16 for acquisitions.
1 unchanged sentence
BUSINESS ACQUISITIONS
−Removed: 2022 BUSINESS ACQUISITIONS — Through the nine months ended September 30, 2022 , we purchased the following operations for total consideration of $ 593.4 million:
+Added: 2023 BUSINESS ACQUISITIONS — Through the three months ended March 31, 2023, we completed no business acquisitions.
+Added: 2022 BUSINESS ACQUISITIONS — During the first quarter of 2022, we acquired operations in Texas for total consideration of $ 193.5 million ($ 148.2 million cash and $ 45.3 million noncash).
+Added: For the full year 2022 , we purchased the following operations for total consideration of $ 594.6 million ($ 529.2 million cash and $ 65.4 million noncash):
California — eight aggregates, four asphalt mix and seven ready-mixed concrete operations
2 unchanged sentences
Honduras — an aggregates operation serving limited markets along the Gulf Coast
−Removed: The 2022 acquisitions listed above are reported in our consolidated financial statements as of their respective acquisition dates.
−Removed: None of these acquisitions were material to our result s of operatio ns ei ther individually or collectively , and acquisition related expenses were immaterial.
−Removed: The fair value of consideration transferred for these 2022 acquisitions 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: The fair value of consideration transferred for these 2022 acquisitions and th e preliminary a mount s (pending final working capital adjustments) o f assets acquired and liabilities assumed as of March 31, 2023 are summarized below:
Fair Value of Purchase Consideration
13 unchanged sentences
The $ 12.5 million of goodwill recognized represents deferred tax liabilities generated from carrying over the seller’s tax basis in the assets acquired.
−Removed: No ne of the goodwill recognized will be deductible for income tax purposes.
−Removed: 2021 BUSINESS ACQUISITIONS — On August 26, 2021 , we purchased the following operations in connection with the acquisition of U.S.
−Removed: Concrete, Inc.
−Removed: for total consideration of $ 1,634.5 million, net of cash acquired:
−Removed: British Columbia, Canada — aggregates and aggregates blue-water transportation operations
−Removed: California — aggregates distribution terminals and concrete operations
−Removed: New Jersey — aggregates and concrete operations
−Removed: New York — aggregates and concrete operations
−Removed: Oklahoma — aggregates and concrete operations
−Removed: Pennsylvania — concrete operations
−Removed: Texas — aggregates and concrete operations
−Removed: Virgin Islands — aggregates and concrete operations
−Removed: Washington, D.C.
−Removed: — concrete operations
−Removed: The unaudited pro forma financial information in the table below summarizes the results of operations for Vulcan and U.S.
−Removed: Concrete as if they were combined as of January 1, 2020.
−Removed: T he pro forma financial information does not reflect any cost savings, operating efficiencies or synergies as a result of this combination.
−Removed: Consistent with the assumed acquisition date of January 1, 2020, the pro forma information excludes t ransactions between Vulcan and U.S.
−Removed: The following pro forma information also includes 1) charges directly attributable to the acquisition, 2) cost of sales related to the sale of acquired inventory marked up to fair value, 3) depreciation, depletion, amortization & accretion expense related to the mark up to fair value of acquired assets and 4) interest expense and debt retirement costs reflecting the new debt structure :
−Removed: Three Months Ended
−Removed: Nine Months Ended
−Removed: Supplemental Pro Forma Results
−Removed: Total revenues
−Removed: Net earnings attributable to Vulcan
−Removed: The unaudited pro forma results above may not be indicative of the results that would have been obtained had this acquisition occurred at the beginning of 2020, nor does it intend to be a projection of future results.
−Removed: The fair value of consideration transferred for the U.S.
−Removed: Concrete acquisition and th e a mount s o f assets acquired and liabilities assumed are summarized below:
−Removed: Fair Value of Purchase Consideration
−Removed: Total fair value of purchase consideration
−Removed: Identifiable Assets Acquired and Liabilities Assumed
−Removed: Accounts and notes receivable, net
−Removed: Other current assets
−Removed: Property, plant & equipment
−Removed: Operating lease right-of-use assets
−Removed: Intangible assets
−Removed: Contractual rights in place
−Removed: Other intangibles
−Removed: Other noncurrent assets
−Removed: Deferred income taxes, net
−Removed: Other liabilities assumed
−Removed: Noncontrolling interest
−Removed: Net identifiable assets acquired
−Removed: Includes $ 1,268.5 million paid to acquire all issued and outstanding shares of U.S.
−Removed: Concrete common stock and $ 384.4 million of U.S.
−Removed: Concrete obligations paid on the acquisition date, less $ 18.4 million of cash acquired .
−Removed: Additionally, during 2021, we purchased concrete operations in California for total consideration of $ 4.9 million.
−Removed: A s a collective result o f the 2021 acquisitions, we recognized $ 685.5 million o f amortizable intangible assets and $ 571.2 million of goodwill, representing an increase in goodwill of $ 46.6 million from December 31, 2021 (see Note 15 for subsequent impairment of a portion of this goodwill) .
−Removed: The amortizable intangible assets will be amortized against earnings over a weighted-average period in excess of 15 years.
−Removed: The $ 571.2 million of goodwill recognized represents deferred tax liabilities generated from carrying over the seller’s tax basis in the assets acquired and synergies expected to be realized from acquiring an established business with assets that have been assembled over a long period of time — the collection of those assets combined with our assets can earn a higher rate of return than either individually.
−Removed: Of the total goodwill recognized, $ 106.0 million will be deductible for income tax purposes.
+Added: No ne of goodwill recognized will be deductible for income tax purposes.
DIVESTITURES AND PENDING DIVESTITURES
−Removed: During the third quarter of 2022, we sold:
−Removed: Excess real estate in Southern California resulting in a pretax gain of $ 23.5 million
−Removed: In the first quarter of 2 021, we sold:
−Removed: 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: The probable divestiture of concrete operations in New York, New Jersey and Pennsylvania (acquired in the 2021 U.S.
−Removed: Concrete acquisition) is presented as assets held for sale in the accompanying Condensed Consolidated Balance Sheet at September 30, 2022.
−Removed: We expect the sale to occur in the fourth quarter of 2022.
−Removed: The major classes of assets and liabilities classified as held for sale as of September 30 are as follows:
−Removed: Held for Sale (Concrete Segment)
−Removed: Land and land improvements, net
−Removed: Buildings, machinery and equipment, net
−Removed: Operating leases, net
−Removed: Finance leases, net
−Removed: Intangible contractual rights in place
−Removed: reserve for assets held for sale
−Removed: Total assets held for sale
−Removed: Current operating lease liabilities
−Removed: Current finance lease liabilities
−Removed: Noncurrent operating lease liabilities
−Removed: Noncurrent finance lease liabilities
−Removed: Total liabilities held for sale
−Removed: No material assets met the criteria for held for sale at December 31, 2021 or September 30, 2021.
+Added: We had no significant divestitures through the three months ended March 31, 202 3 .
+Added: In 2022, we sold:
+Added: Fourth quarter – concrete operations in New Jersey, New York and Pennsylvania resulting in a third quarter impairment charge of $ 67.8 million and a fourth quarter loss on sale of $ 17.4 million (the assets were written down to fair value less cost to sell in the third quarter)
+Added: Third quarter – excess real estate in Southern California resulting in a pretax gain of $ 23.5 million
+Added: No material assets met the criteria for held for sale at March 31, 2023, December 31, 2022 or March 31, 2022.
New Accounting Standards
5 unchanged sentences
We operate primarily in the U.S.
−Removed: and are the nation's largest supplier of construction aggregates (primarily crushed stone, sand and gravel), a major producer of asphalt mix and ready-mixed concrete, and a supplier of construction paving services.
+Added: and are the nation's largest supplier of construction aggregates (primarily crushed stone, sand and gravel), a major producer of asphalt mix and ready-mixed concrete, and a supplier of asphalt construction paving services.
Our strategy and competitive advantage are based on our strength in aggregates which are used in most types of construction and in the production of asphalt mix and ready-mixed concrete.
5 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 quarries in Quintana Roo, Mexico (see Note 8, NAFTA Arbitration) and Puerto Cortés, Honduras (acquired in the third quarter of 2022) 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 quarries in Quintana Roo, Mexico (see Note 8, NAFTA Arbitration) and Puerto Cortés, Honduras (acquired in 2022) with our fleet of Panamax-class, self-unloading ships.
Additionally, as a result of our 2021 acquisition of U.S.
8 unchanged sentences
While aggregates is our focus and primary business, we believe vertical integration between aggregates and downstream products, such as asphalt mix and ready-mixed concrete, can be managed effectively in certain markets to generate attractive financial returns and enhance financial returns in our core Aggregates segment.
−Removed: We produce and sell asphalt mix and/or ready-mixed concrete primarily in our Alabama, Arizona, California, Maryland, New Jersey, New Mexico, New York, Oklahoma, Pennsylvania, Tennessee, Texas, Virginia, U.S.
−Removed: Virgin Islands, Washington D.C.
−Removed: and Bahamas markets.
+Added: We produce and sell asphalt mix and/or ready-mixed concrete primarily in our Alabama, Arizona, California, Maryland, New Mexico, Oklahoma, Tennessee, Texas, Virginia, the U.S.
+Added: Virgin Islands and Washington D.C.
Aggregates comprise approximately 95% of asphalt mix by weight and 80% of ready-mixed concrete by weight.
7 unchanged sentences
EXECUTIVE SUMMARY
−Removed: Financial highlights for THIRD Quarter 2022
−Removed: Compared to third quarter of 2021:
+Added: Financial highlights for FIRST Quarter 2023
+Added: Compared to first quarter of 2022:
Total revenues increased $108.3 million, or 7%, to $1,649.0 million
2 unchanged sentences
Aggregates segment freight-adjusted revenues increased $143.2 million, or 17%, to $965.9 million
−Removed: Shipments increased 9%, or 5.2 million tons, to 65.4 million tons
−Removed: Same-store shipments increased 3%, or 2.0 million tons, to 60.8 million tons
+Added: Shipments decreased 2%, or 1.3 million tons, to 51.7 million tons
Freight-adjusted sales price increased 20.3%, or $3.15 per ton to $18.67
−Removed: Same-store freight-adjusted sales price increased 13.2%, or $1.97 per ton to $16.86
Aggregates segment gross profit increased $60.0 million, or 25%, to $302.8 million
Unit profitability (as measured by gross profit per ton) increased 28% to $5.85 per ton
−Removed: Asphalt, Concrete and Calcium segment gross profit increased $35.1 million, or 162%, to $56.8 million, collectively
−Removed: Selling, administrative and general (SAG) expenses increased $31.5 million but decreased 0.3 percentage points (30 basis points) as a percentage of total revenues
+Added: Asphalt, Concrete and Calcium segment gross profit decreased $26.8 million, or 103%, to a loss of $0.8 million, collectively
+Added: Selling, administrative and general (SAG) expenses decreased $1.7 million (60 basis points as a percentage of total revenues)
Operating earnings increased $40.2 million, or 27%, to $187.2 million
−Removed: Earnings attributable to Vulcan from continuing operations were unchanged at $1.33 per diluted share
+Added: Earnings attributable to Vulcan from continuing operations were $0.92 per diluted share compared to $0.70 per diluted share
Adjusted earnings attributable to Vulcan from continuing operations were $0.95 per diluted share, compared to $0.73 per diluted share
−Removed: Net earnings attributable to Vulcan were essentially unchanged at $177.1 million, an increase of $0.2 million
+Added: Net earnings attributable to Vulcan were $120.7 million, an increase of $28.9 million, or 31%
Adjusted EBITDA was $337.6 million, an increase of $43.7 million, or 15%
Returned capital to shareholders via dividends ($57.2 million @ $0.43 per share versus $53.2 million @ $0.40 per share)
−Removed: Consistent with our expectations for the second half of the year, strong pricing momentum and solid operational execution led to earnings growth in each of our segments.
−Removed: Aggregates cash gross profit per ton improved by 9%, a considerable acceleration from the first half of the year.
−Removed: This momentum, along with the ongoing favorable pricing environment and current visibility into private nonresidential and infrastructure demand, reinforces our confidence in our ability to deliver strong earnings growth in 2022.
−Removed: Capital expenditures in the third quarter were $137.6 million, including $66.4 million for growth projects (year-to-date $377.6 million and $157.1 million, respectively).
−Removed: For the full year, we expect to spend $600 million to $650 million on capital expenditures.
−Removed: Full-year capital expenditures include spending for U.S.
−Removed: Concrete operations (acquired in August 2021) as well as spending for projects put on hold in 2020 due to the pandemic.
−Removed: We will continue to review our plans and will adjust as needed, while being thoughtful about preserving liquidity.
−Removed: During the quarter, we acquired strategic aggregates and downstream assets to complement our position in Northern California.
−Removed: Additionally, we acquired a quarry in Honduras from which we have been distributing materials to certain Gulf Coast markets since 2019 (see Note 16 to the condensed consolidated financial statements).
−Removed: As of September 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).
+Added: The powerful combination of our aggregates-led business and our commitment to execute on our strategic disciplines resulted in strong earnings growth in the first quarter.
+Added: Aggregates segment earnings increased sharply with gross profit per ton improving 28% and cash gross profit per ton improving 23% despite lower shipments and persistent inflationary cost pressures.
+Added: As we look ahead, we are increasing our full-year earnings outlook to reflect the pricing momentum and solid execution realized in our first quarter results.
+Added: We now expect full-year Adjusted EBITDA of $1,850 million to $1,950 million.
+Added: Capital expenditures in the first quarter were $112.8 million, including $33.5 million for growth projects.
+Added: For the full year, we expect to spend $600 million to $650 million on capital expenditures, including growth projects.
+Added: We will continue to review our plans and will adjust as needed.
+Added: As of March 31, 2023, the ratio of total debt to trailing-twelve months Adjusted EBITDA was 2.3 times (2.2 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 $46.1 million in the third quarter compared with $36.8 million in the prior year.
−Removed: On a trailing-twelve months basis, return on invested capital was 13.6%, 0.6 percentage points (60 basis points) lower than the comparable prior year period.
−Removed: We are focused on driving further improvement through solid operating earnings growth coupled with disciplined capital management.
−Removed: We have continued to execute well and now expect full-year 2022 Adjusted EBITDA of $1.640 to $1.680 billion.
−Removed: Through the first nine months, aggregates shipments have exceeded the upper end of our expectations, driven by acquisitions and healthy underlying demand on our markets.
−Removed: As we look ahead to 2023, leading indicators suggest that growing public construction activity, particularly highways, and the recovery in private nonresidential contract awards should help to offset contracting single-family residential demand.
−Removed: The pricing environment remains positive, and we expect to carry the strong momentum into 2023.
−Removed: Our industry-leading aggregates focus positions us well for continued growth and value creation.
−Removed: We have a durable business model with strong fundamentals and less execution risk through economic cycles.
−Removed: This durability is evidenced by the consistent growth in our aggregates unit profitability, despite ongoing volatility in the macro environment.
−Removed: We are positioned in geographic markets that will continue to outperform other parts of the country from a demand perspective, both in the near term and long term, and we expect both the favorable pricing dynamics and our strong execution to lead to continued earnings growth.
+Added: Interest expense, net of interest income, was $49.0 million in the first quarter compared with $35.9 million in the prior year.
+Added: On a trailing-twelve months basis, return on invested capital was 13.7%, a 20 basis points improvement from December 31, 2022.
+Added: We are focused on driving improvement through solid operating earnings growth coupled with disciplined capital management.
+Added: We are increasing our full-year earnings expectations to incorporate the success of our pricing efforts during the first quarter.
+Added: Leading indicators of demand remain mixed, and full-year shipments for 2023 will ultimately depend upon the depth of the decline in residential construction activity and the timing of highway starts converting to shipments.
+Added: Despite a challenging macro-environment, our uniquely positioned aggregates business and our best-in-class execution position us to successfully navigate shifts in demand.
+Added: Management expectations for 2023 include the following updates:
+Added: Aggregates segment freight-adjusted price growth of approximately 15% ($16.40 in 2022)
+Added: Net earnings attributable to Vulcan of between $815 million and $895 million
+Added: Adjusted EBITDA of between $1,850 million and $1,950 million
+Added: All other aspects of our expectations for 2023 remain unchanged from those reported as part of our fourth quarter earnings release in February
RESULTS OF OPERATIONS
5 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: in millions, except unit and per unit data
+Added: in millions, except per share, unit and per unit data
Total revenues
3 unchanged sentences
SAG as a percentage of total revenues
−Removed: Gain on sale of property, plant &
−Removed: equipment and businesses
−Removed: Loss on impairments
Operating earnings
7 unchanged sentences
net of income taxes
−Removed: (Earnings) loss attributable to noncontrolling interest
+Added: Earnings attributable to noncontrolling interest
Net earnings attributable to Vulcan
15 unchanged sentences
Non-GAAP measures are defined and reconciled within this Item 2 under the caption Reconciliation of Non-GAAP Financial Measures.
−Removed: THIRd quarter 2022 Compared to THIRd Quarter 2021
−Removed: Third quarter 2022 total revenues were $2,088.3 million, up 38% from the third quarter of 2021.
−Removed: Shipments increased in aggregates (+9%), asphalt mix (+13%) and ready-mixed concrete (+83%).
−Removed: Likewise, gross profit increased in the Aggregates (+$63.7 million or 17%), Asphalt (+$22.4 million or 318%) and Concrete (+$12.2 million or +85%) segments.
−Removed: An 82% increase in the unit cost of diesel fuel increased costs by $30.6 million from the prior year’s third quarter with most ($27.5 million) of this cost increase reflected in the Aggregates segment.
−Removed: Net earnings attributable to Vulcan for the third quarter of 2022 were $177.1 million, or $1.33 per diluted share, compared to $176.9 million, or $1.32 per diluted share, in the third quarter of 2021.
+Added: FIRST quarter 2023 Compared to FIRST Quarter 2022
+Added: First quarter 2023 total revenues were $1,649.0 million, up 7% from the first quarter of 2022.
+Added: Shipments decreased in aggregates (-2%), asphalt mix (-11%) and ready-mixed concrete (-30%).
+Added: Conversely, gross profit increased in the Aggregates (+$60.0 million or 25%) and Asphalt (+$3.7 million or 130%) segments while it declined in the Concrete (-$30.6 million or 108%) segment.
+Added: Net earnings attributable to Vulcan for the first quarter of 2023 were $120.7 million, or $0.90 per diluted share, compared to $91.8 million, or $0.69 per diluted share in the first quarter of 2022.
Each period’s results were impacted by discrete items, as follows:
−Removed: Net earnings attributable to Vulcan for the third quarter of 2022 include:
−Removed: pretax net gain of $23.5 million related to the sale of excess real estate in Southern California
−Removed: pretax charges of $67.8 million associated with goodwill and long-lived asset impairments
−Removed: pretax charges of $0.4 million associated with divested operations
+Added: Net earnings attributable to Vulcan for the first quarter of 2023 include:
pretax charges of $0.6 million associated with non-routine business development
1 unchanged sentence
$3.6 million of tax charges related to a Calica NOL carryforward valuation allowance
−Removed: Net earnings attributable to Vulcan for the third quarter of 2021 include:
+Added: Net earnings attributable to Vulcan for the first quarter of 2022 include:
pretax charges of $0.3 million associated with divested operations
pretax charges of $2.5 million associated with non-routine business development
−Removed: pretax charges of $5.9 million for COVID-19 pandemic direct incremental costs
pretax charges of $1.8 million for managerial restructuring (related to U.S.
−Removed: Adjusted for these discrete items, earnings attributable to Vulcan from continuing operations (Adjusted Diluted EPS) was $1.78 per diluted share for the third quarter of 2022 compared to $1.54 per diluted share in the third quarter of 2021.
−Removed: Continuing Operations — Changes in earnings from continuing operations before income taxes for the third quarter of 2022 versus the third quarter of 2021 are summarized below:
+Added: Adjusted for these discrete items, earnings attributable to Vulcan from continuing operations (Adjusted Diluted EPS) was $0.95 per diluted share for the first quarter of 2023 compared to $0.73 per diluted share in the first quarter of 2022.
+Added: Continuing Operations — Changes in earnings from continuing operations before income taxes for the first quarter of 2023 versus the first quarter of 2022 are summarized below:
earnings from continuing operations before income taxes
−Removed: Third quarter 2021
+Added: First quarter 2022
Higher aggregates gross profit
Higher asphalt gross profit
−Removed: Higher concrete gross profit
+Added: Lower concrete gross profit
Higher calcium gross profit
−Removed: Higher selling, administrative and general expenses
−Removed: Higher gain on sale of property, plant & equipment and businesses
−Removed: Higher impairment charges
+Added: Lower selling, administrative and general expenses
+Added: Lower gain on sale of property, plant & equipment and businesses
Higher interest expense, net
−Removed: Concrete acquisition related expenses in 2021
−Removed: Third quarter 2022
−Removed: Third quarter Aggregates segment sales increased 27%, while gross profit increased $63.7 million, or 17%, to $436.1 million ($6.67 per ton).
−Removed: Double-digit price growth and solid operational execution helped offset a $27.5 million unfavorable impact from significantly higher diesel fuel costs, $2.2 million unfavorable impact from selling acquired inventory after its markup to fair value, and continued inflationary pressures for many other parts and supplies.
+Added: First quarter 2023
+Added: First quarter Aggregates segment sales increased 15%, while gross profit increased $60.0 million, or 25%, to $302.8 million ($5.85 per ton).
Cash gross profit per ton was $8.02 in the quarter compared to $6.53 in the prior year quarter.
−Removed: Higher diesel fuel costs negatively impacted the Aggregates segment by $0.42 per ton.
−Removed: Total aggregates shipments were 65.4 million tons versus 60.2 million in last year’s third quarter, an increase of 9%.
−Removed: This increase reflects shipment contribution from acquisitions and healthy construction activity levels.
−Removed: Same-store aggregates shipments increased 3%.
−Removed: Shipment growth was geographically widespread and particularly strong in many southeastern markets and California.
−Removed: Price growth in the third quarter was consistently strong across our markets.
−Removed: Freight-adjusted pricing was $16.79 per ton, an increase of 12.5% ($1.86 per ton) over the prior year.
−Removed: Same-store freight-adjusted average sales price increased 13.2%, or $1.97 per ton – excluding mix impact, aggregates price increased 12.4%.
−Removed: Freight-adjusted unit cost of sales increased 16%, or $1.38 per ton, and cash cost of sales increased 17%, or $1.19 per ton, as compared to the prior year’s third quarter.
−Removed: Excluding the impact of higher diesel fuel costs, freight-adjusted cash cost of sales increased 11%, or $0.77 per ton.
−Removed: Overall, non-aggregates segments gross profit of $56.8 million was $35.1 million higher than the prior year’s third quarter.
−Removed: Asphalt segment gross profit of $29.5 million was up $22.4 million from the prior year’s third quarter.
−Removed: The year-over-year increase was driven by widespread volume improvement and continued pricing momentum.
−Removed: Asphalt volumes increased 13% driven by growth in Arizona and California, our two largest asphalt markets.
−Removed: Asphalt pricing increased 25.9%, or $15.37 per ton, more than offsetting a 42% ($33.1 million) increase in the average price paid for liquid asphalt as well as a $2.9 million year-over-year increase in natural gas cost.
−Removed: Concrete segment gross profit was $26.5 million for the third quarter compared to $14.3 million in the prior year.
−Removed: Concrete results benefited from the contribution of acquired operations as well as strong volume and price growth in our legacy operations.
−Removed: Unit material margins improved as higher selling prices helped offset higher raw materials costs, including aggregates supplied by our Aggregates segment.
−Removed: Segment results were negatively impacted by higher diesel prices and the availability of truck drivers and cement in certain markets.
+Added: Gross profit margin expanded 170 basis points due to strong pricing growth and solid operational execution.
+Added: This earnings improvement was widespread across our footprint.
+Added: Total aggregates shipments were 51.7 million tons versus 53.0 million in last year’s first quarter, a decrease of 2%.
+Added: Shipments across the Southeast and East coast benefited from more favorable weather, while shipments in California and Texas were impacted by significant rainfall throughout most of the quarter.
+Added: First quarter volume also benefited from some shipments delayed by unfavorable weather in the fourth quarter of 2022.
+Added: The pricing environment remains positive.
+Added: Pricing actions effective at the start of the year resulted in another quarter of accelerating price growth.
+Added: Freight-adjusted pricing was $18.67 per ton, an increase of 20.3% ($3.15 per ton) over the prior year, with all markets realizing year-over-year improvement.
+Added: Adjusting for mix impacts, average selling prices increased 18.5% in the first quarter.
+Added: Consistent with expectations, freight-adjusted unit cost of sales increased 17%, or $ 1.88 per ton, and cash cost of sales increased 18%, or $ 1.66 per ton, as compared to the prior year’s first quarter.
+Added: Solid operational execution helped mitigate continued year-over-year inflationary pressures, particularly for parts and services.
+Added: The average price of diesel was 3% higher ($1.7 million) than the prior year.
+Added: We remain focused on compounding improvements in unit margins throughout the cycle through fixed cost leverage, price growth and operating efficiencies.
+Added: Overall, non-aggregates segments gross profit was a loss of $ 0.8 million, $ 26.8 million lower than the prior year’s first quarter.
+Added: Asphalt segment gross profit of $ 0.8 million was up $3.7 million from the prior year’s first quarter.
+Added: Cash gross profit was $9.8 million compared to $5.7 million in the prior year.
+Added: Asphalt pricing increased 14.6%, or $9.38 per ton, and drove the year-over-year improvement in earnings.
+Added: The average unit cost of liquid asphalt was 7% higher ($3.6 million) than the prior year.
+Added: Asphalt volumes decreased 11% driven by lower shipments in California and Arizona, our largest asphalt markets, due to significant rainfall in the quarter.
+Added: Concrete segment gross profit was a loss of $ 2.4 million for the first quarter, down $30.6 million from the prior year.
+Added: Cash gross profit was $18.0 million compared to $49.3 million in the prior year.
+Added: Current year results were impacted by the divestiture of our concrete operations in New York, New Jersey and Pennsylvania.
+Added: Additionally, unfavorable weather in California and Texas and a slowdown in residential construction activity affected segment earnings.
+Added: Average selling prices increased 12.1%, partially offsetting higher raw materials, diesel and labor costs.
Calcium segment gross profit was $0.8 million compared to $0.7 million in the prior year quarter.
−Removed: SAG expenses were $135.3 million in the quarter, or 6.5% of total revenues.
−Removed: Higher expenses versus the prior year were driven by elevated legal and professional fees, related mostly to Mexico and business development activities, and increased incentives driven by favorable current year performance.
−Removed: Additionally, more normalized travel expenses and travel related to U.S.
−Removed: Concrete integration activities contributed to the year-over-year increase.
−Removed: Trailing-twelve months SAG expense was 7.1% of total revenues, down 0.5 percentage points (50 basis points) from the prior year.
−Removed: For the three months ended September 30, 2022, we sold excess real estate in Southern California resulting in a pretax gain of $23.5 million ($17.5 million after tax).
−Removed: There were no similar gains in the prior comparable period.
−Removed: During the third quarter of 2022, we recognized a goodwill impairment charge of $50.9 million and a long-lived asset impairment charge of $16.9 million related to the probable divestiture of concrete operations in New York, New Jersey and Pennsylvania (expected to close in the fourth quarter of 2022, subject to obtaining regulatory approvals and the satisfaction of other customary closing conditions).
−Removed: There were no similar charges in the prior comparable period.
−Removed: Other operating expense is composed primarily of idle facilities expense, environmental remediation costs and gain (loss) on settlement of AROs.
−Removed: Total other operating expense and significant items included in the total were:
−Removed: $8.2 million in third quarter 2022 — includes discrete items as follows:
−Removed: $0.4 million of charges associated with divested operations
−Removed: $0.3 million of non-routine business development charges (excludes items included in cost of revenues)
−Removed: $2.1 million for managerial restructuring (related to acquisitions)
−Removed: $30.8 million in third quarter 2021 — includes discrete items as follows:
−Removed: $21.7 million of non-routine business development charges (excludes items included in cost of revenues)
−Removed: $5.9 million for COVID-19 pandemic direct incremental costs
−Removed: $3.5 million for managerial restructuring (related to U.S.
−Removed: Other nonoperating income, net was a net income of $1.3 million for the third quarter of 2022 and was unfavorable by $1.8 million from the third quarter of 2021.
−Removed: Net interest expense was $46.1 million in the third quarter of 2022 compared to $36.8 million in the third quarter of 2021.
−Removed: Income tax expense from continuing operations was $82.3 million in the third quarter of 2022 compared to $51.7 million in the third quarter of 2021.
−Removed: The increase in tax expense was primarily related to an increase in pretax earnings, the recording of a valuation allowance against the net operating losses of one of our Mexican subsidiaries and the impairment of non-tax deductible goodwill in the current quarter.
−Removed: Earnings attributable to Vulcan from continuing operations were $1.33 per diluted share in the third quarter of 2022, unchanged from the third quarter of 2021.
−Removed: Discontinued Operations — Third quarter pretax loss from discontinued operations was $1.6 million in 2022 compared with a pretax loss of $0.3 million in 2021.
+Added: SAG expenses were $117.3 million in the quarter, or 7.1% of total revenues, a 60 basis points improvement from the prior year.
+Added: Trailing-twelve months SAG expense was 6.9% of total revenues, a 50 basis points improvement from the prior year.
+Added: We remain focused on further leveraging our overhead cost structure.
+Added: Other operating income (expense), which is composed primarily of idle facilities expense, environmental remediation costs, gain (loss) on settlement of AROs, finance charges collected and net rental income (expense), was $0.8 million of income for the first quarter of 2023 compared to $5.3 million of expense in the first quarter of 2022.
+Added: Other nonoperating income, net was $1.4 million for the first quarter of 2023, a slight decrease from $1.5 million in the first quarter of 2022.
+Added: Net interest expense was $49.0 million in the first quarter of 2023 compared to $35.9 million in the first quarter of 2022.
+Added: Income tax expense from continuing operations was $16.6 million in the first quarter of 2023 compared to $18.7 million in the first quarter of 2022.
+Added: The decrease in tax expense was due to a tax benefit from a prior year business disposition, offsetting the higher taxes on the increase in pretax earnings in 2023.
+Added: Earnings attributable to Vulcan from continuing operations were $0.92 per diluted share in the first quarter of 2023 compared to $0.70 per diluted share in the first quarter of 2022.
+Added: Discontinued Operations — First quarter pretax loss from discontinued operations was $2.9 million in 2023 compared with a pretax loss of $2.4 million in 2022.
Both periods include charges related to general and product liability costs, including legal defense costs, and environmental remediation costs associated with our former Chemicals business.
For additional details, see Note 1 to the condensed consolidated financial statements under the caption Discontinued Operations.
−Removed: year-to-date SEPTEMBER 30, 2022 Compared to year-to-date SEPTEMBER 30, 2021
−Removed: Total revenues for the first nine months of 2022 were $5,583.3 million, up 41% from the first nine months of 2021.
−Removed: Shipments increased in aggregates (+10%), asphalt mix (+10%) and ready-mixed concrete (+181%).
−Removed: Gross profit increased in the Aggregates (+$111.5 million or 11%), Asphalt (+$22.6 million or 128%) and Concrete (+$52.3 million or 162%) segments.
−Removed: A 98% increase in the unit cost of diesel fuel increased costs by $96.1 million from the first nine months of 2021 with most ($83.2 million) of this cost increase reflected in the Aggregates segment.
−Removed: Net earnings attributable to Vulcan for the first nine months of 2022 were $456.2 million, or $3.42 per diluted share, compared to $532.9 million, or $3.99 per diluted share, in the first nine months of 2021.
−Removed: Each period’s results were impacted by discrete items, as follows:
−Removed: Net earnings attributable to Vulcan for the first nine months of 2022 include:
−Removed: pretax gain of $23.5 million related to the sale of excess real estate in Southern California
−Removed: pretax charges of $67.8 million associated with goodwill and long-lived asset impairments
−Removed: pretax charges of $1.0 million associated with divested operations
−Removed: pretax charges of $8.1 million associated with non-routine business development
−Removed: pretax charges of $4.9 million for managerial restructuring (related to acquisitions)
−Removed: pretax charges of $15.3 million for a litigation matter included in discontinued operations
−Removed: $9.6 million of tax charges related to a Calica NOL carryforward valuation allowance
−Removed: Net earnings attributable to Vulcan for the first nine months of 2021 include:
−Removed: pretax net gain of $114.7 million related to the sale of a reclaimed quarry in Southern California
−Removed: pretax charges of $1.1 million associated with divested operations
−Removed: pretax charges of $30.6 million associated with non-routine business development
−Removed: pretax charges of $9.7 million for COVID-19 pandemic direct incremental costs
−Removed: pretax charges of $3.5 million for managerial restructuring (related to U.S.
−Removed: pretax interest charges of $9.4 million related to financing the U.S.
−Removed: Concrete acquisition
−Removed: $13.7 million of tax charges related to an increase in the Alabama NOL carryforward valuation allowance
−Removed: Adjusted for these discrete items, earnings attributable to Vulcan from continuing operations (Adjusted Diluted EPS) was $4.03 per diluted share for the first nine months of 2022 compared to $3.80 per diluted share in the first nine months of 2021.
−Removed: Continuing Operations — Changes in earnings from continuing operations before income taxes for year-to-date September 30, 2022 versus year-to-date September 30, 2021 are summarized below:
−Removed: earnings from continuing operations before income taxes
−Removed: Year-to-date September 30, 2021
−Removed: Higher aggregates gross profit
−Removed: Higher asphalt gross profit
−Removed: Higher concrete gross profit
−Removed: Lower calcium gross profit
−Removed: Higher selling, administrative and general expenses
−Removed: Lower gain on sale of property, plant & equipment and businesses
−Removed: Higher impairment charges
−Removed: Higher interest expense, net
−Removed: Concrete acquisition related expenses in 2021
−Removed: Year-to-date September 30, 2022
−Removed: Aggregates segment sales for the first nine months of 2022 were $4,013.5 million (up 26%) while aggregates shipments increased 10%, or 17.1 million tons, compared to the prior year.
−Removed: Same-store aggregates shipments increased 4%, or 6.7 million tons.
−Removed: Freight-adjusted average sales price for aggregates increased 9.2%, or $1.37 per ton, versus the first nine months of 2021.
−Removed: Same-store freight-adjusted average sales price increased 9.8%, or $1.45 per ton — excluding mix impact, aggregates price increased 9.8%.
−Removed: Aggregates segment gross profit was $1,081.3 million ($5.94 per ton) versus $969.8 million ($5.87 per ton) in the first nine months of 2021.
−Removed: Cash gross profit per ton increased 4% from the prior year’s first nine months to $7.72 per ton.
−Removed: First nine months 2022 freight-adjusted unit cost of sales increased 14%, or $1.30 per ton, versus the prior year.
−Removed: The average unit cost of diesel fuel increased 98% versus the first nine months of 2021, decreasing Aggregates segment gross profit by $83.2 million or $0.46 per ton.
−Removed: On a trailing-twelve months basis, Aggregates segment gross profit margin as a percentage of segment sales excluding freight & delivery decreased 2.4 percentage points (240 basis points) to 35.8%.
−Removed: Asphalt segment gross profit of $40.2 million was up $22.6 million from the first nine months of 2021.
−Removed: Asphalt mix shipments increased 10% while average unit selling prices increased 20%, or $11.90 per ton.
−Removed: Compared to the prior year’s first nine months, asphalt mix unit material margins increased 10% despite a 40% increase in the average unit cost for liquid asphalt.
−Removed: Concrete segment gross profit was $84.7 million for the first nine months of 2022, an increase of $52.3 million from the prior year period.
−Removed: Ready-mixed concrete shipments increased 181% (flat same-store) while the average sales price increased 11% and the unit material margins increased 12%.
−Removed: Calcium segment’s gross profit of $1.6 million was down $0.3 million compared to the first nine months of 2021.
−Removed: SAG expenses were $388.7 million versus $293.1 million in the prior year’s first nine months reflecting a 0.4 percentage point (40 basis point) decrease as a percentage of total revenues.
−Removed: The current year included overhead expenses associated with U.S.
−Removed: Concrete that were only in September of the prior year’s first nine months.
−Removed: Gain on sale of property, plant & equipment and businesses was $28.4 million in the first nine months of 2022 versus $120.3 million in the first nine months of 2021.
−Removed: The 2022 amount includes a net pretax gain of $23.5 million from the sale of excess real estate in Southern California while the 2021 amount includes a net pretax gain of $114.7 million from the sale of a reclaimed quarry in Southern California.
−Removed: For the nine months ended September 30, 2022, we recognized a goodwill impairment charge of $50.9 million and a long-lived asset impairment charge of $16.9 million related to the probable divestiture of concrete operations in New York, New Jersey and Pennsylvania (expected to close in the fourth quarter of 2022).
−Removed: There were no similar charges in the prior comparable period.
−Removed: Other operating expense is composed primarily of idle facilities expense, environmental remediation costs and gain (loss) on settlement of AROs.
−Removed: Total other operating expense and significant items included in the total were:
−Removed: $19.8 million in first nine months of 2022 — includes discrete items as follows:
−Removed: $1.0 million of charges associated with divested operations
−Removed: $0.5 million of non-routine business development charges (excludes items included in cost of revenues)
−Removed: $4.9 million for managerial restructuring (related to acquisitions)
−Removed: $44.9 million in first nine months of 2021 — includes discrete items as follows:
−Removed: $27.6 million of non-routine business development charges (excludes items included in cost of revenues)
−Removed: $9.7 million for COVID-19 pandemic direct incremental costs
−Removed: $3.5 million for managerial restructuring (related to U.S.
−Removed: Other nonoperating income (expense) was a net expense of $1.7 million for the first nine months of 2022, unfavorable by $19.0 million from the first nine months of 2021.
−Removed: This unfavorable variance included unfavorable Rabbi Trust gains/losses and benefit plan costs of $10.5 million and $11.2 million, respectively.
−Removed: Net interest expense was $120.8 million in the first nine months of 2022 compared to $111.6 million in the first nine months of 2021.
−Removed: 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.
−Removed: Concrete (see Note 7 to the condensed consolidated financial statements).
−Removed: Income tax expense from continuing operations was $164.6 million in the first nine months of 2022 compared to $169.7 million in the first nine months of 2021.
−Removed: The decrease in tax expense was primarily related to lower pretax earnings partially offset by the impairment of non-tax deductible goodwill in the current year.
−Removed: Earnings attributable to Vulcan from continuing operations were $3.54 per diluted share in the first nine months of 2022 compared to $4.01 per diluted share in the first nine months of 2021.
−Removed: Discontinued Operations — First nine months pretax loss from discontinued operations was $21.7 million in 2022 compared with a pretax loss of $3.6 million in 2021.
−Removed: Both periods include charges related to general and product liability costs, including legal defense costs, and environmental remediation costs associated with our former Chemicals business while 2022 includes a $15.3 million charge for a litigation matter.
−Removed: For additional details, see Note 1 to the condensed consolidated financial statements under the caption Discontinued Operations.
KNOWN TRENDS OR UNCERTAINTIES
3 unchanged sentences
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.
−Removed: Further, recently, the Mexican government has taken actions adverse to our operations in that country.
+Added: Further, the Mexican government has taken actions adverse to our property and operations in that country.
On May 5, 2022, Mexican government officials presented employees at our Calica operations in Quintana Roo, Mexico with arbitrary shutdown orders to immediately cease underwater quarrying and extraction operations.
1 unchanged sentence
We strongly believe that the actions taken by Mexico are arbitrary and illegal, and we intend to vigorously pursue all lawful avenues available to us in order to protect our rights, under both Mexican and international law.
−Removed: Our full year 2022 Outlook includes an EBITDA impact of $80 million to $100 million as a result of this shutdown.
+Added: For additional information regarding our Calica operations, see Note 8, NAFTA Arbitration.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
−Removed: We have provided certain information on a same-store basis.
−Removed: When discussing our financial results in comparison to prior periods, we may exclude the operating results of recently acquired/divested businesses that do not have comparable results in the periods being discussed.
−Removed: These recently acquired/divested businesses are disclosed in Note 16 “Acquisitions and Divestitures.” This approach allows us to evaluate the performance of our operations on a comparable basis.
−Removed: We believe that measuring performance on a same-store basis is useful to investors because it enables evaluation of how our operations are performing period over period without the effects of acquisition and divestiture activity.
−Removed: Our same-store information may not be comparable to similar measures used by other companies.
Aggregates segment FREIGHT-ADJUSTED REVENUES
Aggregates segment freight-adjusted revenues is not a Generally Accepted Accounting Principle (GAAP) measure and should not be considered as an alternative to metrics defined by GAAP.
−Removed: We present this metric as it is consistent with the basis by which we review our operating results.
+Added: We present this measure as it is consistent with the basis by which we review our operating results.
We believe that this presentation is consistent with our competitors and meaningful to our investors as it excludes revenues associated with freight & delivery, which are pass-through activities.
3 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
in millions, except per ton data
7 unchanged sentences
At the segment level, freight & delivery revenues include intersegment freight & delivery (which are eliminated at the consolidated level) and freight to remote distribution sites.
−Removed: Aggregates segment incremental gross profit
−Removed: Aggregates segment incremental gross profit flow-through rate is not a GAAP measure and represents the year-over-year change in gross profit divided by the year-over-year change in segment sales excluding freight & delivery (revenues and costs).
−Removed: This metric should not be considered as an alternative to metrics defined by GAAP.
−Removed: W e evaluate this metric on a trailing-twelve months basis as q uarterly gross profit flow-through rates can vary widely from quarter to quarter.
−Removed: We present this metric as it is consistent with the basis by which we review our operating results.
−Removed: We believe that this presentation is consistent with our competitors and meaningful to our investors as it excludes revenues associated with freight & delivery, which are pass-through activities.
−Removed: Reconciliation of this metric to its nearest GAAP measure is presented below:
−Removed: margin in accordance with gaap
−Removed: Three Months Ended
−Removed: Trailing-Twelve Months
−Removed: dollars in millions
−Removed: Aggregates segment
−Removed: Segment sales
−Removed: Gross profit margin
−Removed: Incremental gross profit margin
−Removed: FLOW-THROUGH RATE (non-gaap)
−Removed: Three Months Ended
−Removed: Trailing-Twelve Months
−Removed: dollars in millions
−Removed: Aggregates segment
−Removed: Segment sales
−Removed: Freight & delivery revenues 1
−Removed: Segment sales excluding freight & delivery
−Removed: Gross profit margin excluding freight & delivery
−Removed: Incremental gross profit flow-through rate
−Removed: At the segment level, freight & delivery revenues include intersegment freight & delivery (which are eliminated at the consolidated level) and freight to remote distribution sites.
cash gross profit
4 unchanged sentences
Cash gross profit adds back noncash charges for depreciation, depletion, accretion and amortization to gross profit.
−Removed: Aggregates segment cash gross profit per ton is computed by dividing Aggregates segment cash gross profit by tons shipped.
−Removed: 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: Segment cash gross profit per unit is computed by dividing segment cash gross profit by units shipped.
+Added: Segment cash cost of sales per unit is computed by subtracting segment cash gross profit per unit from segment freight-adjusted sales price.
Reconciliation of these metrics to their nearest GAAP measures are presented below:
Three Months Ended
−Removed: Nine Months Ended
in millions, except per ton data
6 unchanged sentences
Aggregates segment freight-adjusted sales price
−Removed: Aggregates segment cash cost of sales per ton
+Added: Aggregates segment freight-adjusted cash cost of sales per ton
Asphalt segment
1 unchanged sentence
Asphalt segment cash gross profit
+Added: Unit shipments - tons
+Added: Asphalt segment gross profit per ton
+Added: Asphalt segment cash gross profit per ton
+Added: Asphalt segment average sales price
+Added: Asphalt segment cash cost of sales per ton
Concrete segment
1 unchanged sentence
Concrete segment cash gross profit
+Added: Unit shipments - cubic yards
+Added: Concrete segment gross profit per cubic yard
+Added: Concrete segment cash gross profit per cubic yard
+Added: Concrete segment average sales price
+Added: Concrete segment cash cost of sales per cubic yard
Calcium segment
8 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
Trailing-Twelve Months
5 unchanged sentences
Gain on sale of real estate and businesses, net
−Removed: Loss on impairments
Charges associated with divested operations
1 unchanged sentence
COVID-19 direct incremental costs
+Added: Loss on impairments
Pension settlement charge
2 unchanged sentences
Represents non-routine charges or gains associated with acquisitions and dispositions including the cost impact of purchase accounting inventory valuations.
−Removed: NET DEBT TO ADJUSTED EBITDA
−Removed: Net debt to Adjusted EBITDA is not a GAAP measure and should not be considered as an alternative to metrics defined by GAAP.
−Removed: We, the investment community and credit rating agencies use this metric to assess our leverage.
−Removed: Net debt subtracts cash and cash equivalents and restricted cash from total debt.
−Removed: Reconciliation of this metric to its nearest GAAP measure is presented below :
−Removed: Current maturities of long-term debt
−Removed: Short-term debt
−Removed: Long-term debt
−Removed: Cash and cash equivalents and restricted cash
−Removed: Trailing-Twelve Months (TTM) Adjusted EBITDA
−Removed: Total debt to TTM Adjusted EBITDA
−Removed: Net debt to TTM Adjusted EBITDA
Adjusted Diluted EPS attributable to vulcan from continuing Operations
3 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
Diluted Earnings Per Share
4 unchanged sentences
NOL carryforward valuation allowance
−Removed: Acquisition financing interest costs
Adjusted diluted EPS attributable to Vulcan from
continuing operations
+Added: NET DEBT TO ADJUSTED EBITDA
+Added: Net debt to Adjusted EBITDA is not a GAAP measure and should not be considered as an alternative to metrics defined by GAAP.
+Added: We, the investment community and credit rating agencies use this metric to assess our leverage.
+Added: Net debt subtracts cash and cash equivalents and restricted cash from total debt.
+Added: Reconciliation of this metric to its nearest GAAP measure is presented below :
+Added: Current maturities of long-term debt
+Added: Short-term debt
+Added: Long-term debt
+Added: Cash and cash equivalents and restricted cash
+Added: Trailing-Twelve Months (TTM) Adjusted EBITDA
+Added: Total debt to TTM Adjusted EBITDA
+Added: Net debt to TTM Adjusted EBITDA
RETURN ON INVESTED CAPITAL
54 unchanged sentences
minimize financial and other covenants that limit our operating and financial flexibility
−Removed: Included in our September 30, 2022 cash and cash equivalents and restricted cash balances of $146.9 million is $24.5 million of restricted cash as described in Note 1 under the caption Restricted Cash.
+Added: Included in our March 31, 2023 cash and cash equivalents and restricted cash balances of $140.0 million is $0.4 million of restricted cash as described in Note 1 under the caption Restricted Cash.
cash from operating activities
−Removed: Nine Months Ended
+Added: Three Months Ended
Depreciation, depletion, accretion and amortization (DDA&A)
+Added: Loss on impairments
Noncash operating lease expense
Net gain on sale of property, plant & equipment and businesses
−Removed: Loss on impairments
−Removed: Deferred tax expense
+Added: Contributions to pension plans
+Added: Deferred tax provision (benefit)
Other operating cash flows, net 1
1 unchanged sentence
Primarily reflects changes to working capital balances.
−Removed: Net cash provided by operating activities was $748.3 million during the nine months ended September 30, 2022, a $23.5 million increase compared to the same period of 2021.
−Removed: Days sales outstanding, a measurement of the time it takes to collect receivables, were 47.6 days at September 30, 2022 compared to 45.9 days at September 30, 2021.
−Removed: Additionally, our over 90 day balance of $46.4 million at September 30, 2022 was $33.1 million above the $13.3 million at September 30, 2021.
+Added: Net cash provided by operating activities was $ 221.3 million during the three months ended March 31, 2023, a $ 45.7 million increase compared to the same period of 2022.
+Added: The increase was primarily attributable to a $28.8 million increase in net earnings and changes in working capital balances.
+Added: Days sales outstanding, a measurement of the time it takes to collect receivables, were 44.1 days at March 31, 2023 compared to 44.8 days at March 31, 2022.
+Added: Additionally, our over 90 day receivables balance of $ 49.2 million at March 31, 2023 was up from the $43.4 million at March 31, 2022.
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 $940.7 million during the first nine months of 2022, an $819.9 million decrease compared to cash used of $1,760.6 million in the same period of 2021.
−Removed: This decrease was primarily attributable to less cash used for business acquisitions in the current period compared to the prior period.
−Removed: During the first nine months of 2022, we acquired businesses for $528.0 million of cash consideration as compared to $1,634.5 million of acquisitions in the first nine months of 2021 (see Note 16 to the condensed consolidated financial statements).
−Removed: Additionally, d uring the first nine months of 2022, w e invested $450.4 million in our existing operations (includes changes in accruals for property, plant & equipment) compared to $318.6 million in the prior year period.
−Removed: Of this $450.4 million, $157.1 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: Further, in the first nine months of 2022, proceeds from the sale of property, plant & equipment were $37.8 million, a decrease of $154.6 million from the first nine months of 2021.
−Removed: In 2021, we sold reclaimed real estate in Southern California for net cash proceeds of $182.3 million.
+Added: Net cash used for investing activities was $ 61.7 million during the first three months of 2023, a $ 240.8 million decrease compared to cash used of $302.5 million in the same period of 2022.
+Added: This decrease was primarily attributable to a $148.7 million decrease in payments for businesses acquired in the current period compared to the prior period.
+Added: During the first three months of 2022, we acquired businesses for $148.2 million (see Note 16 to the condensed consolidated financial statements).
+Added: Additionally, during the first three months of 2023, we received $130.0 million in proceeds from the collection of a note receivable related to the sale of concrete operations in New Jersey, New York and Pennsylvania in November 2022.
+Added: Furthermore, d uring the first three months of 2023, w e invested $ 193.6 million in our existing operations (includes changes in accruals for property, plant & equipment) compared to $160.4 million in the prior year period.
+Added: Of this $ 193.6 million, $ 33.5 million was invested in internal growth projects to enhance our distribution capabilities, develop new production sites and enhance existing production facilities.
cash from financing activities
−Removed: Net cash provided by financing activities in the first nine months of 2022 was $97.8 million, compared to cash used of $25.8 million in the same period of 2021.
−Removed: The current year includes a $312.0 million net draw on our line of credit.
−Removed: The prior year includes $156.0 million of net cash provided from debt issuances and debt payments (see Note 7 to the condensed consolidated financial statements).
+Added: Net cash used for financing activities in the first three months of 2023 was $181.1 million, compared to cash provided of $18.4 million in the same period of 2022.
+Added: The current year includes a $100.0 million net payment on our line of credit, whereas the prior year includes a $100.0 million net draw on our line of credit.
Additionally, capital returned to our shareholders increased by $4.0 million as a result of higher dividends ($0.43 per share compared to $0.40 per share).
14 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 September 30, 2022, total debt to trailing-twelve months Adjusted EBITDA was 2.6 times (2.5 times on a net debt basis reflecting $146.9 million of cash on hand).
+Added: At March 31, 2023, total debt to trailing-twelve months Adjusted EBITDA was 2.3 times (2.2 times on a net debt basis reflecting $140.0 million of cash on hand).
Our weighted-average debt maturity was 10.7 years.
delayed draw term loan, line of credit AND COMMERICAL PAPER PROGRAM
−Removed: In June 2021, concurrent with the announcement of the pending acquisition of U.S.
−Removed: Concrete (see Note 16 for additional information), we obtained a $2,200.0 million bridge facility commitment from Truist Bank.
−Removed: Later, in June 2021, we entered into a $1,600.0 million unsecured delayed draw term loan with a subset of the banks that provide our line of credit and terminated the bridge facility commitment.
−Removed: The delayed draw term loan was drawn in August 2021 for $1,600.0 million upon the acquisition of U.S.
−Removed: Concrete, was paid down to $1,100.0 million in September 2021 and was further paid down to $550.0 million in August 2022 (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.
−Removed: 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 September 30, 2022, we were in compliance with the delayed draw term loan covenants.
−Removed: Borrowings, cost ranges and other details are described in Note 7 to the condensed consolidated financial statements.
−Removed: Financing costs for the bridge facility commitment and the delayed draw term loan facility totaled $13.3 million, $9.4 million of which was recognized as interest expense in the second quarter of 2021.
−Removed: Our unsecured line of credit was amended in August 2022 to increase the amount from $1,000.0 million to $1,600.0 million and extend the maturity date from September 2026 to August 2027.
+Added: In June 2021, we entered into a $1,600.0 million unsecured delayed draw term loan which was fully drawn in August 2021 upon the acquisition of U.S.
+Added: The delayed draw term loan was paid down to $1,100.0 million in September 2021 with cash on hand, paid down to $550.0 million in August 2022 using the proceeds from the issuance of commercial paper as described below and fully repaid in March 2023 using proceeds from the issuance of 5.80% senior notes as described below.
+Added: Our unsecured line of credit was amended in August 2022 to increase the borrowing capacity from $1,000.0 million to $1,600.0 million and extend the maturity date from September 2026 to August 2027.
Our line of credit contains covenants customary for an unsecured investment-grade facility.
Covenants, borrowings, cost ranges and other details are described in Note 7 to the condensed consolidated financial statements.
−Removed: As of September 30, 2022, we were in compliance with the 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: In August 2022, we established a $1,600.0 million commercial paper program and borrowed $550.0 million under the program.
−Removed: Commercial paper borrowings bear interest at rates determined at the time of issuance and as agreed between us and the commercial paper investors.
−Removed: As of September 30, 2022, our available borrowing capacity under the line of credit was $1,210.0 million.
+Added: As of March 31, 2023, we were in compliance with the 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: In August 2022, we established a $1,600.0 million commercial paper program through which we borrowed $550.0 million that was used to partially repay the delayed draw term loan.
+Added: Commercial paper borrowings bear interest at rates determined at the time of borrowing and as agreed between us and the commercial paper investors.
+Added: As of March 31, 2023, our available borrowing capacity under the line of credit was $1,516.8 million.
Utilization of the borrowing capacity was as follows:
−Removed: $312.0 million was borrowed
+Added: None was borrowed
$83.2 million was used to support standby letters of credit
−Removed: Essentially all of our $3,941.9 million (face value) of term debt (which includes the $550.0 million delayed draw term loan and the $550.0 million commercial paper) is unsecured.
−Removed: $2,840.2 million of such debt is governed by two essentially identical indentures that contain customary investment-grade type covenants.
−Removed: As of September 30, 2022, we were in compliance with all term debt covenants.
−Removed: In August 2021, we assumed $434.5 million (fair value) of senior notes due 2029 in connection with the acquisition of U.S.
−Removed: Concrete and retired these notes in September 2021.
+Added: All of our $ 3,941.6 million (face value) of term debt (which includes the $550.0 million commercial paper) is unsecured.
+Added: All of the covenants in the debt agreements are customary for investment-grade facilities.
+Added: As of March 31, 2023, we were in compliance with all term debt covenants.
+Added: In March 2023, we issued $550.0 million of 5.80% senior notes due 2026.
+Added: Total proceeds of $ 546.6 million (net of discounts and transaction costs), together with cash on hand, were used to repay the $550.0 million delayed draw term loan.
CURRENT MATURITIES of long-term debt
−Removed: The $0.5 million of current maturities of long-term debt as of September 30, 2022 is due as follows:
−Removed: Fourth quarter 2022
−Removed: First quarter 2023
+Added: The $0.5 million of current maturities of long-term debt as of March 31, 2023 is due as follows:
Second quarter 2023
Third quarter 2023
−Removed: Our debt ratings and outlooks as of September 30, 2022 are as follows:
+Added: Fourth quarter 2023
+Added: First quarter 2024
+Added: Our debt ratings and outlooks as of March 31, 2023 are as follows:
Standard & Poor's
8 unchanged sentences
issued and outstanding
−Removed: As of September 30, 2022, there were 8,064,851 shares remaining under the February 2017 Board of Directors’ share purchase authorization.
+Added: As of March 31, 2023, there were 8,064,851 shares remaining under the February 2017 authorization by our Board of Directors.
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.
The authorization has no time limit, does not obligate us to purchase any specific number of shares and may be suspended or discontinued at any time.
−Removed: There were no shares held in treasury as of September 30, 2022, December 31, 2021 and September 30, 2021.
−Removed: There were no common stock purchases for the periods ended September 30, 2022, December 31, 2021 and September 30, 2021.
+Added: There were no shares held in treasury as of March 31, 2023, December 31, 2022 and March 31, 2022.
+Added: There were no common stock purchases for the periods ended March 31, 2023, December 31, 2022 and March 31, 2022.
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 nine months ended September 30, 2022.
+Added: There have been no changes to our critical accounting policies during the three months ended March 31, 2023.
new Accounting standards
31 unchanged sentences
changes in technologies, which could disrupt the way we do business and how our products are distributed
+Added: the risks of open pit and underground mining
+Added: expectations relating to environmental, social and governance considerations
+Added: claims that our products do not meet regulatory requirements or contractual specifications
other assumptions, risks and uncertainties detailed from time to time in our periodic reports filed with the SEC
12 unchanged sentences
Code of Ethics for the CEO and Senior Financial Officers
−Removed: Copies of the Business Conduct Policy and the Code of Ethics are available on our website under the heading “Corporate Governance.” If we make any amendment to, or waiver of, any provision of the Code of Ethics, we will disclose such information on our website as well as through filings with the SEC.
+Added: Copies of the Business Conduct Policy and the Code of Ethics are available on our website under the “Investor Relations” tab (“Governance” section).
+Added: If we make any amendment to, or waiver of, any provision of the Code of Ethics, we will disclose such information on our website as well as through filings with the SEC.
Our Board of Directors has also adopted:
2 unchanged sentences
These documents meet all applicable SEC and New York Stock Exchange regulatory requirements.
−Removed: The Charters of the Audit, Compensation and Governance Committees are available on our website under the heading “Corporate Governance” under the “Investor Relations” tab or you may request a copy of any of these documents by writing to Denson N.
+Added: The Charters of the Audit, Compensation and Governance Committees are available on our website under the “Investor Relations” tab (“Governance – Committee Composition” section) or you may request a copy of any of these documents by writing to Denson N.
Franklin III, Senior Vice President, General Counsel and Secretary, Vulcan Materials Company, 1200 Urban Center Drive, Birmingham, Alabama 35242.
1 unchanged sentence
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.