What changed in this filing

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Item 1. Financial Statements

2023-08-04 compared with 2023-05-05 · 292 added, 189 removed, 1091 unchanged (31% of the section changed)

47 unchanged sentences

Three Months Ended

Six Months Ended

in millions, except per share data

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and businesses

Loss on impairments

Other operating income (expense), net

Other operating expense, net

Operating earnings

Other nonoperating income, net

Other nonoperating income (expense), net

Interest expense, net

27 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

Operating Activities

1 unchanged sentence

Depreciation, depletion, accretion and amortization

Loss on impairments

Noncash operating lease expense

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Proceeds from sale of businesses

Payment for businesses acquired, net of acquired cash

Payment for businesses acquired, net of acquired cash and adjustments

Net cash used for investing activities

6 unchanged sentences

Payment of finance leases

Purchases of common stock

Dividends paid

1 unchanged sentence

Net cash provided by (used for) financing activities

Net decrease in cash and cash equivalents and restricted cash

Net increase (decrease) in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of year

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For further information, refer to the consolidated financial statements and footnotes included in our most recent Annual Report on Form 10-K.

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 .

Operating results for the three and six month periods ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 .

Construction activity continues to be impacted by cost inflation and capacity constraints (including supply chain bottlenecks, labor shortages and transportation availability).

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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.

Events that relate to conditions arising after March 31, 2023 will be reflected in management’s estimates for future periods.

Events that relate to conditions arising after June 30, 2023 will be reflected in management’s estimates for future periods.

NONCONTROLLING INTEREST

In connection with our acquisition of U.S.

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.

Concrete in 2021, we obtained an 88 % controlling interest in the Orca Sand and Gravel Limited Partnership (Orca) which was formed to develop the Orca quarry in British Columbia, Canada.

The remaining 12 % noncontrolling interest is held by the Namgis First Nation (Namgis).

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Three Months Ended

Six Months Ended

Discontinued Operations

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Three Months Ended

Six Months Ended

Weighted-average common shares

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Three Months Ended

Six Months Ended

Antidilutive common stock equivalents

RECLASSIFICATIONS

Certain items previously reported in specific financial statement captions have been reclassified to conform to the 2023 presentation.

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).

Additionally, we entered into an agreement to lease a terminal in California.

We expect the lease to commence in late 2023 or early 2024 once all required permits are obtained.

Lease right-of-use (ROU) assets and liabilitie s a nd the w eighted-average lease term s and discount rate s are as follows:

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Operating lease right-of-use assets, net

Finance lease assets

Finance lease ROU assets

Accumulated depreciation

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Finance leases

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.

The decreases from June 30, 2022 in total lease 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 material residual value guarantees, restrictive covenants or early termination option s.

The components o f l ease expense are as follows:

Three Months Ended

Six Months Ended

Finance lease cost

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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).

Cash paid for operating leases was $ 18.3 million and $ 20.9 million for the three months ended March 31, 2023 and 2022, respectively.

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.

Cash paid for operating leases was $ 36.6 million and $ 40.8 million for the six months ended June 30, 2023 and 2022, respectively.

Cash paid for finance leases (principal and interest) was $ 12.1 million and $ 19.4 million for the six months ended June 30, 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.

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Significant judgment is required in determining our EAETR.

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.

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 the second quarter of 2023, we recorded income tax expense from continuing operations of $ 92.0 million compared to $ 63.7 million in the second quarter of 2022.

The increase in tax expense was due to higher pretax earnings.

For the first six months of 2023, we recorded income tax expense from continuing operations of $ 108.6 million compared to $ 82.4 million for the first six months of 2022.

The increase in tax expense was due to higher pretax earnings partially offset by a tax benefit from a prior year business disposition recorded in the first quarter.

In August 2022, the Inflation Reduction Act (IRA) was signed into law.

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As a result, in 2022, Calica generated a net operating loss (NOL) deferred tax asset of $ 14.5 million.

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).

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.

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.

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.

In 2023, we project a $ 15.2 million increase in deferred tax assets against which a valuation allowance was recorded as a component of the EAETR in the first six months of 2023.

We project Alabama NOL carryforward deferred tax assets at December 31, 2023 of $ 74.7 million, against which we have a valuation allowance of $ 54.3 million as of June 30, 2023.

Almost all of the Alabama NOL carryforward would expire between 2023 and 2029 if not utilized.

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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.

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;

Our segment total revenues by geographic market for the three and six month periods ended June 30, 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;

see Note 16 for additional information):

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Total Revenues by Geographic Market 1

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Total revenues

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Total Revenues by Geographic Market 1

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Total revenues

Six Months Ended June 30, 2023

Total Revenues by Geographic Market 1

Segment sales

Intersegment sales

Total revenues

Six Months Ended June 30, 2022

Total Revenues by Geographic Market 1

Segment sales

Intersegment sales

Total revenues

The geographic markets are defined by states/countries as follows:

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We also generate service revenues from our asphalt construction paving business and service revenues related to our aggregates business, such as landfill tipping fees.

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 total service revenues were $ 69.7 million ( 3.3 % of total revenues) and $ 67.9 million ( 3.5 % of total revenues) for the three months ended June 30, 2023 and 2022, respectively, and $ 104.8 million ( 2.8 % of total revenues) and $ 106.9 million ( 3.1 % of total revenues) for the six months ended June 30, 2023 and 2022, respectively.

Our products typically are sold to private industry and not directly to governmental entities.

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Three Months Ended

Six Months Ended

Freight & Delivery Revenues

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Under this approach, recognized contract revenue equals the total estimated contract revenue multiplied by the percentage of completion.

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.

The remaining period to complete the obligations at March 31, 2023 ranged from 1 month to 41 months.

Future revenues from unsatisfied performance obligations (including contracts with an expected duration of 1 year or less) at June 30, 2023 and 2022 were $ 130.2 million and $ 173.0 million, respectively.

The remaining period to complete the obligations at June 30, 2023 ranged from 1 month to 38 months.

Our construction contracts are unit priced, and an account receivable is recorded for amounts invoiced based on actual units produced.

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Three Months Ended

Six Months Ended

Deferred Revenue

Balance at beginning of year

Balance at beginning of period

Revenue recognized from deferred revenue

Balance at end of period

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).

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 June 30, 2024 (reflected in other current liabilities in our June 30, 2023 Condensed Consolidated Balance Sheet).

Fair Value Measurements

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dollar-denominated money market instruments).

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.

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.

Net gains (losses) of the Rabbi Trusts’ investments were $ 2.0 million and $( 6.1 ) million for the six months ended June 30, 2023 and 2022, respectively.

The portions of the net gains (losses) related to investments still held by the Rabbi Trusts at June 30, 2023 and 2022 were $ 2.1 million and $( 6.3 ) 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.

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Interest rate swaps

Other current assets

Other noncurrent assets

Interest rate swaps

Other noncurrent liabilities

Interest rate swaps net asset

Other current liabilities

Interest rate swaps net liability

See Note 5 for further discussion of fair value determination.

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Three Months Ended

Six Months Ended

Income Statement

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Interest expense

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.

For the twelve-month period ending June 30, 2024, we estimate that $ 2.2 million of the $ 20.2 million net of tax loss in AOCI will be reclassified to interest expense.

Debt is detailed as follows:

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See Note 6 for additional information on our fair value hedging strategy.

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.

Discounts and debt issuance costs are amortized using the effective interest method over the terms of the respective notes resulting in $ 3.7 million and $ 2.4 million of net interest expense for these items for the six months ended June 30, 2023 and 2022, respectively.

DELAYED DRAW TERM LOAN, LINE OF CREDIT AND COMMERCIAL PAPER PROGRAM

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Our line of credit contains covenants customary for an unsecured investment-grade facility.

As of March 31, 2023, we were in compliance with the covenants.

As of June 30, 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 %.

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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.

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 %.

As of June 30, 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 %.

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.

Commercial paper borrowings bear interest at rates determined at the time of borrowing and as agreed between us and the commercial paper investors.

As of March 31, 2023, our available borrowing capacity under the line of credit was $ 1,516.8 million.

As of June 30, 2023, our available borrowing capacity under the line of credit was $ 1,516.8 million.

Utilization of the borrowing capacity was as follows:

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All of the covenants in the debt agreements are customary for investment-grade facilities.

As of March 31, 2023, we were in compliance with all term debt covenants.

As of June 30, 2023, we were in compliance with all term debt covenants.

In March 2023, we issued $ 550.0 million of 5.80 % senior notes due 2026.

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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.

Our standby letters of credit as of March 31, 2023 are summarized by purpose in the table below:

Our standby letters of credit as of June 30, 2023 are summarized by purpose in the table below:

Standby Letters of Credit

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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.

As stated in Note 2, our lease liabilities totaled $ 646.3 million as of March 31, 2023.

As summarized by purpose in Note 7, our standby letters of credit totaled $ 83.2 million as of March 31, 2023.

As described in Note 9, our asset retirement obligations totaled $ 311.9 million as of March 31, 2023.

As stated in Note 2, our lease liabilities totaled $ 631.1 million as of June 30, 2023.

As summarized by purpose in Note 7, our standby letters of credit totaled $ 83.2 million as of June 30, 2023.

As described in Note 9, our asset retirement obligations totaled $ 311.6 million as of June 30, 2023.

LITIGATION AND ENVIRONMENTAL MATTERS

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The final set of comments included a request for Vulcan to revise and develop a final PDI Evaluation Report.

The final comments further provided, if Vulcan agrees, a proposal for an alternative approach for offsite remediation (as opposed to installation of offsite extraction wells) and development of a Supplemental PDI Evaluation Report that would require the EPA to modify the remedy in the 2009 ROD as it relates to the Hewitt Landfill.

The final comments further provided, if Vulcan agrees, a proposal for an alternative approach for offsite remediation (as opposed to installation of offsite extraction wells) and development of a Supplemental PDI Evaluation Report (Supplemental Report) that would require the EPA to modify the remedy in the 2009 ROD as it relates to the Hewitt Landfill.

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.

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).

Vulcan submitted the Supplemental Report in March 2023 and agreed to submit the RDWP by May 31, 2023.

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 February 2023, the EPA requested that Vulcan provide the Supplemental Report and an Alternative Design Work Plan (ADWP).

Vulcan submitted the Supplemental Report in March 2023 and submitted the ADWP in May 2023.

Similar to the PDI Evaluation Report, the Supplemental Report and ADWP identified expansion of the onsite Hewitt remedy in conjunction with the offsite treatment being performed by LADWP as the preferred options for addressing contamination in offsite areas, instead of the two wells proposed by the EPA.

The EPA is currently reviewing the reports and has requested meetings with stakeholders including LADWP to determine a path forward.

During the second quarter of 2023, we accrued an immaterial amount based on an engineer’s estimate of the cost associated with the expansion of the onsite system.

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.

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.

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from the defendants.

CalMat has yet to be served with the complaint, and discussions are ongoing with Honeywell regarding the reasonable costs Honeywell has incurred.

Discussions are ongoing with Honeywell regarding the reasonable costs Honeywell has incurred.

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.

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The liability is accreted through charges to operating expenses.

If the ARO is settled for other than the carrying amount of the liability, we recognize a gain or loss on settlement.

If the ARO is settled for a value other than the carrying amount of the liability, we recognize a gain or loss on settlement.

ARO operating costs related to accretion of the liabilities and depreciation of the assets are as follows:

Three Months Ended

Six Months Ended

ARO Operating Costs

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Three Months Ended

Six Months Ended

Asset Retirement Obligations

Balance at beginning of year

Balance at beginning of period

Liabilities incurred

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Three Months Ended

Six Months Ended

Components of Net Periodic Benefit Cost

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Amortization of actuarial loss

Net periodic pension benefit cost

Net periodic pension benefit cost (credit)

Pretax reclassifications from AOCI included in

net periodic pension benefit cost

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.

The contributions to pension plans for the six months ended June 30, 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

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Three Months Ended

Six Months Ended

Components of Net Periodic Benefit Cost

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Under these plans, we match employees’ eligible contributions at established rates.

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.

Expense recognized in connection with these matching obligations totaled $ 41.1 million and $ 29.6 million for the six months ended June 30, 2023 and 2022, respectively.

other Comprehensive Income

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Pension and postretirement plans

Changes in AOCI, net of tax, for the three months ended March 31, 2023 are as follows:

Changes in AOCI, net of tax, for the six months ended June 30, 2023 are as follows:

Postretirement

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Net current period OCI changes

Balances as of March 31, 2023

Balances as of June 30, 2023

Amounts reclassified from AOCI to earnings are as follows:

Three Months Ended

Six Months Ended

Amortization of Cash Flow Hedge Losses

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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.

There were no shares held in treasury as of March 31, 2023, December 31, 2022 and March 31, 2022.

There were no common stock purchases for the periods ended March 31, 2023, December 31, 2022 and March 31, 2022.

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.

There were no shares held in treasury as of June 30, 2023, December 31, 2022 and June 30, 2022.

Our common stock purchases (all of which were open market purchases) and subsequent retirements for the year-to-date periods ended are as follows:

in millions, except average cost

Shares Purchased and Retired

Total purchase price

Average cost per share

As of June 30, 2023, 7,823,488 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

Six Months Ended

in millions, except per share data

Total Shareholders'

Balance at beginning of year

Balance at beginning of period

Net earnings attributable to Vulcan

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withheld for taxes

Purchase and retirement of common stock

Share-based compensation expense

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Noncontrolling Interest

Balance at beginning of year

Balance at beginning of period

Earnings attributable to noncontrolling interest

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Three Months Ended

Six Months Ended

Total Revenues

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Supplemental information referable to our Condensed Consolidated Statements of Cash Flows is summarized below:

Three Months Ended

Six Months Ended

Cash Payments

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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).

There were no charges for goodwill impairment in the three-month periods ended March 31, 2023 and 2022.

There were no charges for goodwill impairment in the six month periods ended June 30, 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).

We have four reportable segments organized around our principal product lines:

Aggregates, Asphalt, Concrete and Calcium.

Changes in the carrying amount of goodwill by reportable segment from December 31, 2022 to March 31, 2023 are shown below:

Changes in the carrying amount of goodwill by reportable segment from December 31, 2022 to June 30, 2023 are shown below:

Totals at December 31, 2022

Totals at March 31, 2023

Goodwill of acquired businesses 1

Totals at June 30, 2023

See Note 16 for acquisitions.

The current year includes a purchase price allocation adjustment from a prior year acquisition.

Acquisitions and Divestitures

BUSINESS ACQUISITIONS

2023 BUSINESS ACQUISITIONS — Through the three months ended March 31, 2023, we completed no business acquisitions.

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).

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):

2023 BUSINESS ACQUISITIONS — Through the six months ended June 30 , 2023, we completed no business acquisitions.

2022 BUSINESS ACQUISITIONS — Through the six months ended June 30, 2022, we acquired operations in Texas and Virginia for total consideration of $ 233.5 million ($ 188.1 million cash and $ 45.4 million noncash).

For the full year 2022 , including adjustments made in the current year, we purchased the following operations for total consideration of $ 593.7 million ($ 528.3 million cash and $ 65.4 million noncash):

 California — eight aggregates, four asphalt mix and seven ready-mixed concrete operations

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 Honduras — an aggregates operation serving limited markets along the Gulf Coast

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

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The $ 12.4 million of goodwill recognized represents deferred tax liabilities generated from carrying over the seller’s tax basis in the assets acquired.

No ne of goodwill recognized will be deductible for income tax purposes.

No ne of the goodwill recognized will be deductible for income tax purposes.

DIVESTITURES AND PENDING DIVESTITURES

We had no significant divestitures through the three months ended March 31, 202 3 .

In 2023, we sold:

 Second quarter – real estate associated with a former recycled concrete facility in Illinois resulting in a pretax gain of $ 15.2 million

In 2022, we sold:

 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)

 Third quarter – excess real estate in Southern California resulting in a pretax gain of $ 23.5 million

No material assets met the criteria for held for sale at March 31, 2023, December 31, 2022 or March 31, 2022.

No material assets met the criteria for held for sale at June 30, 2023, December 31, 2022 or June 30, 2022.

New Accounting Standards

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EXECUTIVE SUMMARY

Financial highlights for FIRST Quarter 2023

Compared to first quarter of 2022:

Financial highlights for SECOND Quarter 2023

Compared to second quarter of 2022:

 Total revenues increased $158.6 million, or 8%, to $2,112.9 million

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 Unit profitability (as measured by gross profit per ton) increased 25% to $7.87 per ton

 Asphalt, Concrete and Calcium segment gross profit decreased $26.8 million, or 103%, to a loss of $0.8 million, collectively

 Selling, administrative and general (SAG) expenses decreased $1.7 million (60 basis points as a percentage of total revenues)

 Asphalt, Concrete and Calcium segment gross profit increased $40.9 million, or 93%, to $84.7 million, collectively

 Selling, administrative and general (SAG) expenses increased $4.7 million but decreased 30 basis points as a percentage of total revenues

 Operating earnings increased $143.5 million, or 47%, to $451.1 million

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 Adjusted earnings attributable to Vulcan from continuing operations were $2.29 per diluted share, compared to $1.53 per diluted share

 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)

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.

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.

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.

We now expect full-year Adjusted EBITDA of $1,850 million to $1,950 million.

Capital expenditures in the first quarter were $112.8 million, including $33.5 million for growth projects.

For the full year, we expect to spend $600 million to $650 million on capital expenditures, including growth projects.

We will continue to review our plans and will adjust as needed.

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).

 Net earnings attributable to Vulcan increased $121.3 million, or 65%, to $308.6 million

 Adjusted EBITDA increased $145.1 million, or 32%, to $595.3 million

 Returned capital to shareholders via dividends of $57.2 million at $0.43 per share versus $53.2 million at $0.40 per share

 Returned capital to shareholders via share repurchases of $49.9 million at $206.82 average price per share compared to none in the prior quarter

Our earnings growth through the first half of 2023 reflects the compounding benefits of the consistent execution of our strategic disciplines and the strength of our aggregates-led business.

Aggregates gross profit margin has expanded 230 basis points, gross profit per ton has improved 26% to $6.96 and cash gross profit per ton has improved 23% to $8.98 per ton.

Strong sales and operating momentum across our business is expected to carry through the rest of the year.

Shipments have benefited from large industrial projects, and residential construction activity has been better than expected.

As a result, we now expect to deliver full-year Adjusted EBITDA of $1,900 million to $2,000 million, an increase of $150 million compared to our initial expectations communicated in February.

Through the first half of the year, cash provided by operating activities was $507.5 million, a 56% increase from the comparable prior year period.

Capital expenditures in the second quarter were $157.4 million, including $44.4 million for growth projects (year-to-date $270.2 million and $77.9 million, respectively).

As planned, we expect to spend $600 million to $650 million for maintenance and growth projects in 2023.

Additionally, we now expect to spend approximately $200 million on opportunistic land purchases for strategic reserves in California, North Carolina and Texas.

As of June 30, 2023, the ratio of total debt to trailing-twelve months Adjusted EBITDA was 2.1 times (2.0 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.

Interest expense, net of interest income, was $49.0 million in the first quarter compared with $35.9 million in the prior year.

On a trailing-twelve months basis, return on invested capital was 13.7%, a 20 basis points improvement from December 31, 2022.

We are focused on driving improvement through solid operating earnings growth coupled with disciplined capital management.

We are increasing our full-year earnings expectations to incorporate the success of our pricing efforts during the first quarter.

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.

Despite a challenging macro-environment, our uniquely positioned aggregates business and our best-in-class execution position us to successfully navigate shifts in demand.

Interest expense, net of interest income, was $46.7 million in the second quarter compared with $38.7 million in the prior year.

On a trailing-twelve months basis, return on invested capital was 14.7%, a 110 basis points improvement from the comparable prior year period.

We are focused on continuing to drive improvement through solid operating earnings growth coupled with disciplined capital management.

We are increasing our full-year earnings expectations to reflect shipment trends and the earnings momentum in our Asphalt segment.

Through the first half of the year, aggregates shipments have been in line with the upper end of our original expectations.

Private non-residential construction activity has remained healthy and should partially offset declines in residential activity which have been more moderate than anticipated.

As a result, we are updating our volume outlook to reflect shipment levels through the first half.

As always, we remain focused on the things we can control, and we are well positioned to navigate shifts in demand and deliver attractive earnings growth in 2023.

Management expectations for 2023 include the following updates:

 Aggregates segment freight-adjusted price growth of approximately 15% ($16.40 in 2022)

 Aggregates shipments down 1% to 4% (236.3 million tons in 2022)

 Total Asphalt, Concrete and Calcium segment cash gross profit of approximately $295 million

 Asphalt expected to contribute 50% to 55% of non-aggregates cash gross profit with mid-single digit growth in both volume and price

 Concrete expected to contribute 45% to 50% of non-aggregates cash gross profit reflecting the impact of the weather-challenged first quarter

 Net earnings attributable to Vulcan of between $855 million and $935 million

 Adjusted EBITDA of between $1,900 million and $2,000 million

 All other aspects of our expectations for 2023 remain unchanged from those reported as part of our fourth quarter earnings release in February

 All other aspects of our expectations for 2023 remain unchanged

RESULTS OF OPERATIONS

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Three Months Ended

in millions, except per share, unit and per unit data

Six Months Ended

in millions, except per share and per unit data

Total revenues

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SAG as a percentage of total revenues

Gain on sale of property, plant &

equipment and businesses

Operating earnings

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Average Sales Price and Unit Shipments

Tons (thousands)

Freight-adjusted sales price

Tons (thousands)

Average sales price

Ready-mixed concrete

Cubic yards (thousands)

Average sales price

Tons (thousands)

Average sales price

Non-GAAP measures are defined and reconciled within this Item 2 under the caption Reconciliation of Non-GAAP Financial Measures.

FIRST quarter 2023 Compared to FIRST Quarter 2022

First quarter 2023 total revenues were $1,649.0 million, up 7% from the first quarter of 2022.

Shipments decreased in aggregates (-2%), asphalt mix (-11%) and ready-mixed concrete (-30%).

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.

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.

SECOND quarter 2023 Compared to SECOND Quarter 2022

Second quarter 2023 total revenues were $2,112.9 million, up 8% from the second quarter of 2022.

Shipments decreased in aggregates (-1%) and ready-mixed concrete (-26%) and increased in asphalt mix (+16%).

Gross profit increased in the Aggregates (+$96.2 million or 24%) and Asphalt (+$43.0 million or 318%) segments.

Conversely, gross profit decreased in the Concrete segment (-$3.0 million or 10%) as a result of the divestiture of our operations in New Jersey, New York and Pennsylvania in November 2022 (see Note 16).

Net earnings attributable to Vulcan for the second quarter of 2023 were $308.6 million, or $2.31 per diluted share, compared to $187.3 million, or $1.40 per diluted share in the second quarter of 2022.

Each period’s results were impacted by discrete items, as follows:

Net earnings attributable to Vulcan for the first quarter of 2023 include:

 pretax charges of $0.6 million associated with non-routine business development

 pretax charges of $0.3 million for managerial restructuring (related to acquisitions)

Net earnings attributable to Vulcan for the second quarter of 2023 include:

 pretax net gain of $15.2 million related to the sale of real estate in Illinois

 pretax charges of $4.3 million associated with divested operations

 pretax charges of $0.3 million associated with non-routine acquisitions

 pretax loss on discontinued operations of $4.9 million

 $2.6 million of tax charges related to a Calica NOL carryforward valuation allowance

Net earnings attributable to Vulcan for the first quarter of 2022 include:

Net earnings attributable to Vulcan for the second quarter of 2022 include:

 pretax charges of $0.4 million associated with divested operations

 pretax charges of $2.5 million associated with non-routine business development

 pretax charges of $1.8 million for managerial restructuring (related to U.S.

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.

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:

 pretax charges of $4.0 million associated with non-routine acquisitions

 pretax loss on discontinued operations of $17.6 million

Adjusted for these discrete items, earnings attributable to Vulcan from continuing operations (Adjusted Diluted EPS) was $2.29 per diluted share for the second quarter of 2023 compared to $ 1.53 per diluted share for the second quarter of 2022.

Continuing Operations — Changes in earnings from continuing operations before income taxes for the second quarter of 2023 versus the second quarter of 2022 are summarized below:

earnings from continuing operations before income taxes

First quarter 2022

Second quarter 2022

Higher aggregates gross profit

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Higher calcium gross profit

Lower selling, administrative and general expenses

Lower gain on sale of property, plant & equipment and businesses

Higher selling, administrative and general expenses

Higher gain on sale of property, plant & equipment and businesses

Higher interest expense, net

First quarter 2023

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.

Gross profit margin expanded 170 basis points due to strong pricing growth and solid operational execution.

This earnings improvement was widespread across our footprint.

Total aggregates shipments were 51.7 million tons versus 53.0 million in last year’s first quarter, a decrease of 2%.

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.

First quarter volume also benefited from some shipments delayed by unfavorable weather in the fourth quarter of 2022.

The pricing environment remains positive.

Pricing actions effective at the start of the year resulted in another quarter of accelerating price growth.

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.

Adjusting for mix impacts, average selling prices increased 18.5% in the first quarter.

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.

Solid operational execution helped mitigate continued year-over-year inflationary pressures, particularly for parts and services.

The average price of diesel was 3% higher ($1.7 million) than the prior year.

We remain focused on compounding improvements in unit margins throughout the cycle through fixed cost leverage, price growth and operating efficiencies.

Overall, non-aggregates segments gross profit was a loss of $ 0.8 million, $ 26.8 million lower than the prior year’s first quarter.

Asphalt segment gross profit of $ 0.8 million was up $3.7 million from the prior year’s first quarter.

Second quarter 2023

Second quarter Aggregates segment sales increased 13%, while gross profit increased $96.2 million, or 24%, to $498.6 million ($7.87 per ton).

Cash gross profit per ton was $9.76 in the quarter compared to $ 7.99 in the prior year quarter, an increase of 22%.

Gross profit margin increased 290 basis points due to strong pricing growth and improving efficiencies from our operating disciplines.

Earnings improvement was widespread across our footprint.

Total aggregates shipments were 63.4 million tons versus 63.8 million in last year’s second quarter, a decrease of 1% with variations across geographies.

Shipment activity in California was particularly strong, following the weather impacted first quarter.

Certain markets in the Southeast benefited from healthy shipment activity to industrial projects.

The pricing environment remains positive across our footprint.

Freight-adjusted pricing was $18.69 per ton, an increase of 15.0% ($2.44 per ton), with all markets realizing year-over-year improvement.

Consistent with expectations, Aggregates freight-adjusted unit cost of sales increased 9%, or $ 0.88 per ton, and cash cost of sales increased 8%, or $ 0.67 per ton, as compared to the prior year’s second quarter.

Persistent inflationary pressures for parts and supplies offset the benefit of lower diesel prices.

We remain focused on compounding improvements in unit profitability throughout the cycle through fixed cost leverage, price growth and operating efficiencies.

Overall, non-aggregates segments gross profit of $84.7 million was $40.9 million higher than the prior year’s second quarter.

Asphalt segment gross profit of $ 56.6 million was up $43.0 million from the prior year’s second quarter, and gross profit margin continued to expand.

Cash gross profit was $65.5 million compared to $22.1 million in the prior year.

Asphalt pricing increased 14.6%, or $9.38 per ton, and drove the year-over-year improvement in earnings.

The average unit cost of liquid asphalt was 7% higher ($3.6 million) than the prior year.

Asphalt volumes decreased 11% driven by lower shipments in California and Arizona, our largest asphalt markets, due to significant rainfall in the quarter.

Concrete segment gross profit was a loss of $ 2.4 million for the first quarter, down $30.6 million from the prior year.

The year-over-year improvement in earnings was driven by a combination of strong shipment growth, continued pricing momentum and lower liquid asphalt costs.

Asphalt shipments increased 16%, benefiting from solid growth in Arizona and California, our largest asphalt markets.

Asphalt pricing in creased 8.8%, or $6.10 per ton, with improvements across all markets.

Concrete segment gross profit was $ 27.0 million for the second quarter, down $ 3.0 million from the prior year.

Cash gross profit was $46.5 million compared to $50.7 million in the prior year.

Current year results were impacted by the divestiture of our concrete operations in New York, New Jersey and Pennsylvania.

Additionally, unfavorable weather in California and Texas and a slowdown in residential construction activity affected segment earnings.

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.

Average selling prices increased 10.1 %, and u nit gross profit improved 22%, or $2.35 per cubic yard, despite lower shipments.

Current year results were impacted by the divestiture of our concrete operations in New Jersey, New York and Pennsylvania in November 2022 and the slowdown in residential construction activity.

Calcium segment gross profit was $ 1.1 million compared to $ 0.2 million in the prior year’s second quarter.

SAG expenses were $139.1 million in the quarter, or 6.6% of total revenues, a 30 basis points improvement from the prior year.

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We remain focused on further leveraging our overhead cost structure.

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.

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.

Net interest expense was $49.0 million in the first quarter of 2023 compared to $35.9 million in the first quarter of 2022.

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.

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.

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.

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 the three months ended June 30, 2023, we sold real estate associated with a former recycled concrete facility in Illinois resulting in a pretax net gain of $15.2 million.

There were no similar gains in the prior comparable period.

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 $9.8 million of expense for the second quarter of 2023 compared to $6.2 million of expense in the second quarter of 2022.

Other nonoperating income (expense), net was $0.1 million of expense for the second quarter of 2023 compared to $4.7 million of expense in the second quarter of 2022.

Net interest expense was $46.7 million in the second quarter of 2023 compared to $38.7 million in the second quarter of 2022.

Income tax expense from continuing operations was $92.0 million in the second quarter of 2023 compared to $63.7 million in the second quarter of 2022.

The increase in tax expense was due to higher pretax earnings.

Earnings attributable to Vulcan from continuing operations were $2.33 per diluted share in the second quarter of 2023 compared to $1.50 per diluted share in the second quarter of 2022.

Discontinued Operations — Second quarter pretax loss from discontinued operations was $4.9 million in 2023 compared with a pretax loss of $17.6 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 while the second quarter of 2022 includes a $15.3 million charge for a litigation matter.

For additional details, see Note 1 to the condensed consolidated financial statements under the caption Discontinued Operations.

YEAR-TO-DATE June 30, 2023 Compared to year-to-date june 30, 2022

Total revenues for the first six months of 2023 were $3,761.8 million, up 8% from the first six months of 2022.

Shipments decreased in aggregates (-1%) and ready-mixed concrete (-28%) and increased in asphalt mix (+5%).

Gross profit increased in the Aggregates (+$156.1 million or 24%) and Asphalt (+$46.7 million or 438%) segments.

Conversely, gross profit decreased in the Concrete segment (-$33.5 million or 58%) as a result of the divestiture of our operations in New Jersey, New York and Pennsylvania in November 2022 (see Note 16).

Net earnings attributable to Vulcan for the first six months of 2023 were $429.3 million, or $3.21 per diluted share, compared to $279.1 million, or $2.09 per diluted share, in the first six months of 2022.

Each period’s results were impacted by discrete items, as follows:

Net earnings attributable to Vulcan for the first six months of 2023 include:

 pretax net gain of $15.2 million related to the sale of real estate in Illinois

 pretax charges of $4.7 million associated with divested operations

 pretax charges of $0.8 million associated with non-routine acquisitions

 pretax loss on discontinued operations of $7.9 million

 $6.2 million of tax charges related to a Calica NOL carryforward valuation allowance

Net earnings attributable to Vulcan for the first six months of 2022 include:

 pretax charges of $0.7 million associated with divested operations

 pretax charges of $8.4 million associated with non-routine acquisitions

 pretax loss on discontinued operations of $20.0 million

Adjusted for these discrete items, earnings attributable to Vulcan from continuing operations (Adjusted Diluted EPS) was $3.25 per diluted share for the first half of 2023 compared to $ 2.25 per diluted share for the first half of 2022.

Continuing Operations — Changes in earnings from continuing operations before income taxes for year-to-date June 30, 2023 versus year-to-date June 30, 2022 are summarized below:

earnings from continuing operations before income taxes

Year-to-date June 30, 2022

Higher aggregates gross profit

Higher asphalt gross profit

Lower concrete gross profit

Higher calcium gross profit

Higher selling, administrative and general expenses

Higher gain on sale of property, plant & equipment and businesses

Higher interest expense, net

Year-to-date June 30, 2023

Aggregates segment sales for the first six months of 2023 were $2,872.8 million (up 14%) while aggregates shipments decreased 1%, or 1.7 million tons, compared to the prior year.

Freight-adjusted average sales price increased 17.4%, or $2.77 per ton, versus the first six months of 2022.

Aggregates segment gross profit was $801.3 million ($6.96 per ton) versus $645.2 million ($5.52 per ton) in the first half of 2022.

Cash gross profit per ton increased 23% from the prior year’s first six months to $8.98 per ton.

Freight-adjusted unit cost of sales for the first half of 2023 increased 13%, or $1.33 per ton, versus the prior year.

Asphalt segment gross profit of $ 57.4 million was up $46.7 million from the first six months of 2022.

Asphalt mix shipments increased 5% while average unit selling prices increased 11.2%, or $7.55 per ton.

Compared to the prior year’s first half, asphalt mix unit material margins increased 47% as a result of continued pricing momentum and lower liquid asphalt costs.

Concrete segment gross profit was $ 24.7 million for the first half of 2023, a decrease of $ 33.5 million from the prior year period.

Ready-mixed concrete shipments decreased 28% while the average sales price increased 11.1% and unit material margins increased 7%.

Current year results were impacted by the divestiture of our concrete operations in New Jersey, New York and Pennsylvania in November 2022.

Calcium segment gross profit of $ 1.9 million was up $1.1 million compared to the first half of 2022.

SAG expenses were $256.5 million versus $253.4 million in the prior year’s first half reflecting a 50 basis points improvement from the prior year.

We remain focused on further leveraging our overhead cost structure.

Gain on sale of property, plant & equipment and businesses was $18.5 million in the first half of 2023 versus $4.6 million in the first half of 2022.

The 2023 amount includes the aforementioned net pretax gain of $15.2 million from the sale of real estate associated with a former recycled concrete facility in Illinois.

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 $9.0 million of expense for the first half of 2023 compared to $11.6 million of expense in the first half of 2022.

Other nonoperating income (expense), net was $1.3 million of income for the first half of 2023 compared to $3.0 million of expense in the first half of 2022.

Net interest expense was $95.7 million in the first half of 2023 compared to $74.7 million in the first half of 2022.

Income tax expense from continuing operations was $108.6 million in the first half of 2023 compared to $82.4 million in the first half of 2022.

The increase in tax expense was due to higher pretax earnings partially offset by a tax benefit from a prior year business disposition recorded in the first quarter.

Earnings attributable to Vulcan from continuing operations were $3.25 per diluted share in the first half of 2023 compared to $2.20 per diluted share in the first half of 2022.

Discontinued Operations — First half pretax loss from discontinued operations was $7.9 million in 2023 compared with a pretax loss of $20.0 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 while 2022 includes a $15.3 million charge for a litigation matter.

For additional details, see Note 1 to the condensed consolidated financial statements under the caption Discontinued Operations.

KNOWN TRENDS OR UNCERTAINTIES

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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.

Further, the Mexican government has taken actions adverse to our property and operations in that country.

Further, the Mexican government has taken actions adverse to our property and operations in Mexico.

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.

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Three Months Ended

Six Months Ended

in millions, except per ton data

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Segment cash cost of sales per unit is computed by subtracting segment cash gross profit per unit from segment freight-adjusted sales price.

Segment freight-adjusted sales price is calculated by dividing revenues generated from the shipment of product (excluding service revenues generated by the segments) by the total units of the product shipped.

Reconciliation of these metrics to their nearest GAAP measures are presented below:

Three Months Ended

Six Months Ended

in millions, except per ton data

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Aggregates segment freight-adjusted sales price

Aggregates segment freight-adjusted cash cost of sales per ton

Aggregates segment freight-adjusted cash cost of

sales per ton

Asphalt segment

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Three Months Ended

Six Months Ended

Trailing-Twelve Months

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Interest expense, net of interest income

Loss on discontinued operations, net of tax

Depreciation, depletion, accretion and amortization

Loss on discontinued operations

Gain on sale of real estate and businesses, net

Loss on impairments

Charges associated with divested operations

Business development 1

Acquisition related charges 1

COVID-19 direct incremental costs

Loss on impairments

Pension settlement charge

Restructuring charges

Adjusted EBITDA

Represents non-routine charges or gains associated with acquisitions and dispositions including the cost impact of purchase accounting inventory valuations.

Represents charges associated with acquisitions requiring clearance under federal antitrust laws.

Costs for trailing-twelve months ended June 30, 2022 include U.S.

Concrete acquisition related expenses of $21.8 million, the cost impact of purchase accounting inventory valuations of $14.8 million and change in control severance and retention charges of $16.0 million (see Note 16 for additional information).

Adjusted Diluted EPS attributable to vulcan from continuing Operations

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Three Months Ended

Six Months Ended

Diluted Earnings Per Share

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RETURN ON INVESTED CAPITAL

We define “Return on Invested Capital” (ROIC) as Adjusted EBITDA for the trailing-twelve months divided by average invested capital (as illustrated below) during the trailing 5-quarters.

We define “Return on Invested Capital” (ROIC) as Adjusted EBITDA for the trailing-twelve months divided by average invested capital (as illustrated below) during the trailing -five quarters.

Our calculation of ROIC is considered a non-GAAP financial measure because we calculate ROIC using the non-GAAP metric EBITDA.

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 minimize financial and other covenants that limit our operating and financial flexibility

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.

Included in our June 30, 2023 cash and cash equivalents and restricted cash balances of $168.2 million is $2.2 million of restricted cash as described in Note 1 under the caption Restricted Cash.

cash from operating activities

Three Months Ended

Six Months Ended

Depreciation, depletion, accretion and amortization (DDA&A)

Loss on impairments

Noncash operating lease expense

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Primarily reflects changes to working capital balances.

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.

Net cash provided by operating activities was $ 507.5 million during the six months ended June 30, 2023, a $ 182.0 million increase compared to the same period of 2022.

The increase was primarily attributable to a $ 150.0 million increase in net earnings and changes in working capital balances.

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.

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.

Days sales outstanding, a measurement of the time it takes to collect receivables, were 43.8 days at June 30 , 2023 compared to 46.5 days at June 30 , 2022.

Additionally, our over 90 day receivables balance was $ 36.5 million at June 30, 2023, a decrease of $2.6 million from the $39.1 million balance at June 30, 2022.

All customer accounts are actively managed, and no losses in excess of amounts reserved are currently expected.

cash from investing activities

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.

Net cash used for investing activities was $ 203.2 million during the first six months of 2023, a $ 265.5 million decrease compared to cash used of $468.7 million in the same period of 2022.

This decrease was primarily attributable to a $ 189.0 million decrease in payments for businesses acquired in the current period compared to the prior period.

During the first three months of 2022, we acquired businesses for $148.2 million (see Note 16 to the condensed consolidated financial statements).

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.

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.

During the first six months of 2022, we acquired businesses for $188.1 million (see Note 16 to the condensed consolidated financial statements).

Additionally, during the first six 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.

Furthermore, d uring the first six months of 2023, w e invested $ 354.6 million in our existing operations (includes changes in accruals for property, plant & equipment) compared to $290.6 million in the prior year period.

Of this $ 354.6 million, $ 77.9 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

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.

Net cash used for financing activities in the first six months of 2023 was $297.6 million, compared to cash provided of $25.4 million in the same period of 2022.

The current year includes a $100.0 million net payment on our line of credit, whereas the prior year includes a $176.0 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).

Additionally, we increased the capital returned to our shareholders by $58.0 million via higher dividends of $8.1 million ($0.43 per share compared to $0.40 per share) and higher share repurchases of $49.9 million (241,363 shares repurchased at $206.82 average price per share compared to none in the first half of 2022).

Certain debt measures are presented below:

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we also paid upfront fees that are amortized to interest expense and pay fees for unused borrowing capacity and standby letters of credit.

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).

At June 30, 2023, total debt to trailing-twelve months Adjusted EBITDA was 2.1 times (2.0 times on a net debt basis reflecting $168.2 million of cash on hand).

Our weighted-average debt maturity was 10.4 years.

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Covenants, borrowings, cost ranges and other details are described in Note 7 to the condensed consolidated financial statements.

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%.

As of June 30, 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%.

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.

Commercial paper borrowings bear interest at rates determined at the time of borrowing and as agreed between us and the commercial paper investors.

As of March 31, 2023, our available borrowing capacity under the line of credit was $1,516.8 million.

As of June 30, 2023, our available borrowing capacity under the line of credit was $1,516.8 million.

Utilization of the borrowing capacity was as follows:

3 unchanged sentences

All of the covenants in the debt agreements are customary for investment-grade facilities.

As of March 31, 2023, we were in compliance with all term debt covenants.

As of June 30, 2023, we were in compliance with all term debt covenants.

In March 2023, we issued $550.0 million of 5.80% senior notes due 2026.

1 unchanged sentence

CURRENT MATURITIES of long-term debt

The $0.5 million of current maturities of long-term debt as of March 31, 2023 is due as follows:

Second quarter 2023

The $0.5 million of current maturities of long-term debt as of June 30, 2023 is due as follows:

Third quarter 2023

1 unchanged sentence

First quarter 2024

Our debt ratings and outlooks as of March 31, 2023 are as follows:

Second quarter 2024

Our debt ratings and outlooks as of June 30, 2023 are as follows:

Standard & Poor's

8 unchanged sentences

issued and outstanding

As of March 31, 2023, there were 8,064,851 shares remaining under the February 2017 authorization by our Board of Directors.

As of June 30, 2023, there were 7,823,488 shares remaining under the February 2017 share purchase 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.

There were no shares held in treasury as of March 31, 2023, December 31, 2022 and March 31, 2022.

There were no common stock purchases for the periods ended March 31, 2023, December 31, 2022 and March 31, 2022.

The detail of our common stock purchases (all of which were open market purchases) for the year-to-date periods ended are as follows:

in millions, except average cost

Shares Purchased and Retired

Total purchase price

Average cost per share

There were no shares held in treasury as of June 30, 2023, December 31, 2022 and June 30, 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.

There have been no changes to our critical accounting policies during the three months ended March 31, 2023.

There have been no changes to our critical accounting policies during the six months ended June 30, 2023.

new Accounting standards

58 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements