Vulcan Materials CO 10-Q

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL COMMENTS OVERVIEW We provide the basic materials for the infrastructure needed to maintain and expand the U.S. economy. We operate primarily in the U.S. and are the nation's largest supplier of construction aggregates (primarily crushed stone, sand and gravel) and a major producer of aggregates-intensive downstream products such as asphalt mix and ready-mixed concrete. 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. Demand for our products is dependent on construction activity and correlates positively with changes in population, employment and household formations. End uses include public construction (e.g., highways, bridges, buildings, airports, schools, prisons, sewer and waste disposal systems, water supply systems, dams, reservoirs and other public construction projects), private nonresidential construction (e.g., manufacturing, retail, offices and warehouses) and private residential construction (e.g., single-family houses, duplexes, apartment buildings and condominiums). Aggregates have a very high weight-to-price ratio and, in most cases, must be produced near where they are used; if not, transportation can cost more than the materials, rendering them uncompetitive compared to locally produced materials. Exceptions to this typical market structure include areas along the U.S. Gulf Coast and the Eastern Seaboard where there are limited supplies of locally available, high-quality aggregates. We serve these markets from quarries that have access to cost-effective long-haul transportation, including shipping by barge, rail and our fleet of Panamax-class, self-unloading ships. Additionally, we serve markets in California and Hawaii from our quarry in British Columbia, Canada by means of a long-term marine shipping agreement with CSL Americas. There are limited substitutes for quality aggregates. Due to zoning and permitting regulations and high transportation costs relative to the value of the product, the location of reserves is a critical factor to our long-term success. No material part of our business depends upon any single customer whose loss would have a significant adverse effect on our business. In 2023, our five largest customers accounted for less than 8% of our total revenues, and no single customer accounted for more than 3% of our total revenues. Although approximately 40% to 55% of our aggregates shipments have historically been used in publicly-funded construction, such as highways, airports and government buildings, a relatively small portion of our sales are made directly to federal, state, county or municipal governments/agencies. Therefore, although reductions in state and federal funding can curtail publicly-funded construction, the vast majority of our business is not directly subject to renegotiation of profits or termination of contracts with local, state or federal governments. In addition, our sales to government entities span several hundred entities coast-to-coast, ensuring that negative changes to various government budgets would have a muted impact across such a diversified set of government customers. 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. We produce and sell aggregates-intensive asphalt mix and/or ready-mixed concrete products in our Alabama, Arizona, California, Maryland, New Mexico, Tennessee, Texas, Virginia, U.S. Virgin Islands and Washington D.C. markets. Aggregates comprise approximately 95% of asphalt mix by weight and 80% of ready-mixed concrete by weight. In both of these downstream businesses, aggregates are primarily supplied from our operations. SEASONALITY AND CYCLICAL NATURE OF OUR BUSINESS Almost all of our products are produced and consumed outdoors. Seasonal changes and other weather-related conditions can affect the production and sales volume of our products. Therefore, the financial results for any quarter do not necessarily indicate the results expected for the year. Normally, the highest sales and earnings are in the third quarter, and the lowest are in the first quarter. Furthermore, our sales and earnings are sensitive to national, regional and local economic conditions, demographic and population fluctuations, and particularly to cyclical swings in construction spending, primarily in the private sector. 26 EXECUTIVE SUMMARY FINANCIAL HIGHLIGHTS FOR THIRD QUARTER 2024 Compared to third quarter of 2023: ▪ Total revenues decreased $181.9 million, or 8%, to $2,003.9 million ▪ Gross profit decreased $25.8 million, or 4%, to $565.2 million ▪ Aggregates segment sales decreased $56.0 million, or 3%, to $1,572.4 million ▪ Aggregates segment freight-adjusted revenues decreased $7.7 million, or 1%, to $1,228.0 million ▪ Shipments decreased 10%, or 6.3 million tons, to 57.7 million tons ▪ Freight-adjusted sales price increased 10.2%, or $1.96 per ton, to $21.27 ▪ Aggregates segment gross profit decreased $10.6 million, or 2%, to $498.5 million ▪ Unit profitability (as measured by gross profit per ton) increased 9% to $8.63 per ton ▪ Asphalt and Concrete segment gross profit decreased $15.2 million to $66.7 million, collectively ▪ Selling, administrative and general (SAG) expenses decreased $14.8 million (20 basis points as a percentage of total revenues) ▪ Operating earnings decreased $81.8 million, or 20%, to $337.1 million ▪ Earnings attributable to Vulcan from continuing operations were $1.57 per diluted share compared to $2.09 per diluted share ▪ Adjusted earnings attributable to Vulcan from continuing operations were $2.22 per diluted share compared to $2.29 per diluted share ▪ Net earnings attributable to Vulcan were $207.6 million, a decrease of $68.9 million, or 25% ▪ Adjusted EBITDA was $580.6 million, a decrease of $21.6 million, or 4% ▪ Returned capital to shareholders via dividends of $60.8 million at $0.46 per share versus $57.2 million at $0.43 per share Results and activities in the third quarter evidence the consistent execution of our two-pronged strategy to generate durable growth. We continue to enhance our core through expansion of our aggregates gross profit per ton, which increased 9% in the third quarter. In addition, our industry-leading cash gross profit per ton increased 10% in the third quarter and has grown by double-digits for eight consecutive quarters. We also recently announced the acquisition of Wake Stone Corporation, a leading pure-play aggregates producer, that will expand our reach in high-growth geographies in the Carolinas. Our Vulcan Way of Selling and Vulcan Way of Operating disciplines remain fundamental to compounding profitability across our franchise and successfully integrating new operations. Capital expenditures, including maintenance and growth projects, were $104.3 million in the third quarter and $402.2 million on a year-to-date basis. During 2024, we expect to spend between $625 million and $650 million on maintenance and growth projects. During the quarter, we returned $60.8 million to shareholders through dividends, a 6% increase versus the prior year. Interest expense, net of interest income, was $38.4 million in the third quarter compared with $46.6 million in the prior year. We remain well positioned for continued growth with a strong liquidity position and balance sheet profile. As of September 30, 2024, the ratio of total debt to trailing-twelve months Adjusted EBITDA was 1.7 times, below our stated long-term target leverage range of 2.0 to 2.5 times. On a trailing twelve months basis, return on invested capital improved 70 basis points over the prior year to 16.1%. The acquisition of Wake Stone Corporation is consistent with our disciplined capital allocation priorities and aggregates-led strategy of continuing to expand our reach to better serve more high-growth regions in the United States, most notably with this transaction in Raleigh, North Carolina. The acquisition is expected to provide more than 60 years of quality hard rock reserves. We expect to close the transaction during the fourth quarter of this year, subject to the satisfaction of customary closing conditions. OUTLOOK While significant weather disruptions have impacted construction activity through the first nine months of the year, overall demand fundamentals continue to underpin long-term growth. The pricing environment remains positive, and we continue to execute well. Given the decline in shipments to date and continued weather events so far in the fourth quarter, we now expect full-year Adjusted EBITDA of approximately $2,000 million. As we look to 2025, we expect aggregates price to improve high-single digits, costs to benefit from moderating inflation and our Vulcan Way of Operating discipline, and most importantly cash gross profit per ton to continue expanding at double-digit levels. A demand backdrop underpinned by growth in public construction activity and an improving private demand environment should lead to volume growth in 2025. Our steadfast focus to execute at the highest level – both commercially and operationally – positions us well to capitalize on improving volume and grow earnings. 27 RESULTS OF OPERATIONS Total revenues are primarily derived from our product sales of 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 services related to our aggregates business. We present separately our discontinued operations, which consist of our former Chemicals business. The following table highlights significant components of our consolidated operating results including EBITDA and Adjusted EBITDA. CONSOLIDATED OPERATING RESULTS HIGHLIGHTS Three Months Ended September 30 Nine Months Ended September 30 in millions, except per share and per unit data 2024 2023 2024 2023 Total revenues $ 2,003.9 $ 2,185.8 $ 5,564.0 $ 5,947.6 Cost of revenues (1,438.7) (1,594.8) (4,101.6) (4,471.3) Gross profit 565.2 591.0 1,462.4 1,476.3 Gross profit margin 28.2 % 27.0 % 26.3 % 24.8 % Selling, administrative and general expenses (129.1) (143.9) (393.0) (400.4) SAG as a percentage of total revenues 6.4 % 6.6 % 7.1 % 6.7 % Gain on sale of property, plant & equipment and businesses 0.2 4.3 4.6 22.8 Loss on impairments (86.6) (28.3) (86.6) (28.3) Operating earnings 337.1 418.9 963.5 1,057.3 Interest expense, net (38.4) (46.6) (117.7) (142.2) Earnings from continuing operations before income taxes 294.9 365.9 833.1 909.8 Income tax expense (85.2) (85.8) (208.5) (194.4) Effective tax rate from continuing operations 28.9 % 23.4 % 25.0 % 21.4 % Earnings from continuing operations 209.7 280.1 624.6 715.4 Loss on discontinued operations, net of tax (1.3) (2.8) (5.0) (8.6) Earnings attributable to noncontrolling interest (0.8) (0.8) (1.4) (1.0) Net earnings attributable to Vulcan $ 207.6 $ 276.5 $ 618.2 $ 705.8 Diluted earnings (loss) per share attributable to Vulcan Continuing operations $ 1.57 $ 2.09 $ 4.68 $ 5.34 Discontinued operations (0.01) (0.02) (0.03) (0.06) Net earnings $ 1.56 $ 2.07 $ 4.65 $ 5.28 EBITDA 1 $ 491.3 $ 569.0 $ 1,411.0 $ 1,503.8 Adjusted EBITDA 1 $ 580.6 $ 602.2 $ 1,507.1 $ 1,535.1 Average Sales Price and Unit Shipments Aggregates Tons 57.7 64.0 166.0 179.2 Freight-adjusted sales price $ 21.27 $ 19.31 $ 20.98 $ 18.92 Asphalt Mix Tons 4.1 4.0 10.2 10.1 Average sales price $ 80.88 $ 76.22 $ 79.42 $ 75.37 Ready-mixed concrete Cubic yards 0.9 2.1 2.7 6.0 Average sales price $ 185.61 $ 169.98 $ 182.88 $ 165.27 1 Non-GAAP measures are defined and reconciled within this Item 2 under the caption Reconciliation of Non-GAAP Financial Measures. 28 THIRD QUARTER 2024 COMPARED TO THIRD QUARTER 2023 Third quarter 2024 total revenues were $2,003.9 million, down 8% from the third quarter of 2023. Shipments decreased in aggregates (-10%), decreased in ready-mixed concrete (-56%) and increased in asphalt mix (+1%). Gross profit decreased in the Aggregates segment (-$10.6 million or 2%) and increased in the Asphalt segment (+$4.3 million or 8%). Concrete segment gross profit decreased by $19.5 million (-75%) in part as a result of the divestiture of our operations in Texas in November 2023 (see Note 16 to the condensed consolidated financial statements). Net earnings attributable to Vulcan for the third quarter of 2024 were $207.6 million, or $1.56 per diluted share, compared to $276.5 million, or $2.07 per diluted share, in the third quarter of 2023. Each period’s results were impacted by discrete items, as follows: Net earnings attributable to Vulcan for the third quarter of 2024 include: ▪ pretax charges of $86.6 million associated with a goodwill impairment ▪ pretax charges of $0.8 million associated with non-routine acquisitions ▪ pretax loss on discontinued operations of $1.8 million ▪ $1.9 million of tax charges related to a valuation allowance against Calica deferred tax assets, including NOL carryforwards Net earnings attributable to Vulcan for the third quarter of 2023 include: ▪ pretax charges of $28.3 million associated with long-lived asset impairments ▪ pretax charges of $1.2 million associated with non-routine acquisitions ▪ pretax loss on discontinued operations of $3.8 million ▪ $5.0 million of tax charges related to a valuation allowance against Calica deferred tax assets, including NOL carryforwards Adjusted for these discrete items, earnings attributable to Vulcan from continuing operations (Adjusted Diluted EPS) was $2.22 per diluted share for the third quarter of 2024 compared to $2.29 per diluted share for the third quarter of 2023. CONTINUING OPERATIONS — Changes in earnings from continuing operations before income taxes for the third quarter of 2024 versus the third quarter of 2023 are summarized below: in millions Third quarter 2023 $ 365.9 Lower aggregates gross profit (10.6) Higher asphalt gross profit 4.3 Lower concrete gross profit (19.5) Lower selling, administrative and general expenses 14.8 Lower gain on sale of property, plant & equipment and businesses (4.1) Higher impairment charges (58.3) Lower interest expense, net 8.2 All other (5.8) Third quarter 2024 $ 294.9 Third quarter Aggregates segment gross profit decreased 2% to $498.5 million (increased 9% to $8.63 on a per ton basis), and gross profit margin expanded 40 basis points. Cash gross profit per ton increased 10% to $10.89 per ton, despite lower shipments and harsh weather conditions throughout the quarter. Improvements in unit profitability were widespread across our footprint. Aggregates shipments decreased 10% compared to the prior year. Shipments across the Southeast were impacted by significant rainfall in July, followed by numerous hurricanes and severe storms in August and September. The prior year's third quarter included fewer severe weather events. The pricing environment remained positive across our footprint. Freight-adjusted selling prices increased 10.2%, as compared to the prior year. Freight-adjusted unit cash cost of sales was negatively impacted by lower volume and challenging, weather-affected operating conditions; freight-adjusted cash cost of sales dollars remained flat compared to the prior year. Overall, non-aggregates segments gross profit of $66.7 million was $15.2 million lower than the prior year’s third quarter. Asphalt segment gross profit of $60.2 million was up $4.3 million from the prior year’s third quarter, and cash gross profit of $72.2 million was a 12% improvement over the prior year. Asphalt mix shipments increased 1%, and pricing increased 6.1%. Concrete segment gross profit of $6.5 million was down $19.5 million from the prior year's third quarter, and cash gross profit of $17.4 million was a 63% decrease from the prior year. The prior year's third quarter included results from the previously divested operations in Texas which accounted for the majority of the year-over-year decline in cash gross profit. SAG expense was $129.1 million for the third quarter compared to $143.9 million in the prior year. As a percent of total revenues, SAG expense was 6.4% in the third quarter, a 20 basis point improvement compared to the prior year. Gain on sale of property, plant & equipment and businesses was $0.2 million in the third quarter of 2024 compared to $4.3 million in the third quarter of 2023. 29 During the third quarter of 2024, we recorded an $86.6 million pretax goodwill impairment charge related to a reporting unit that includes concrete operations acquired from U.S. Concrete in 2021 ($84.2 million after tax). During the third quarter of 2023, our concrete assets in Texas were classified as held for sale, resulting in a pretax long-lived asset impairment charge of $28.3 million ($21.1 million after tax). Other operating income (expense), net 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 $12.6 million of expense for the third quarter of 2024 compared to $4.2 million of expense in the third quarter of 2023. Other nonoperating income (expense), net was $3.8 million of expense for the third quarter of 2024 compared to $6.4 million of expense in the third quarter of 2023. Net interest expense was $38.4 million in the third quarter of 2024 compared to $46.6 million in the third quarter of 2023. Income tax expense from continuing operations was $85.2 million in the third quarter of 2024 compared to $85.8 million in the third quarter of 2023. The tax expense is comparable to the amount recorded in the third quarter of 2023, as the reduction in pretax earnings in the third quarter of 2024 was primarily due to a goodwill impairment, the majority of which was non-tax deductible. Earnings attributable to Vulcan from continuing operations were $1.57 per diluted share in the third quarter of 2024 compared to $2.09 per diluted share in the third quarter of 2023. DISCONTINUED OPERATIONS — Third quarter pretax loss from discontinued operations was $1.8 million in 2024 compared with a pretax loss of $3.8 million in 2023. 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. 30 YEAR-TO-DATE SEPTEMBER 30, 2024 COMPARED TO YEAR-TO-DATE SEPTEMBER 30, 2023 Total revenues for the first nine months of 2024 were $5,564.0 million, down 6% from the first nine months of 2023. Shipments decreased in aggregates (-7%), decreased in ready-mixed concrete (-55%) and increased in asphalt mix (+1%). Gross profit increased in the Aggregates (+$18.0 million or 1%) and Asphalt (+$10.6 million or 9%) segments. Concrete segment gross profit decreased by $42.5 million (-84%) in part as a result of the divestiture of our operations in Texas in November 2023 (see Note 16 to the condensed consolidated financial statements). Net earnings attributable to Vulcan for the first nine months of 2024 were $618.2 million, or $4.65 per diluted share, compared to $705.8 million, or $5.28 per diluted share, in the first nine months of 2023. Each period’s results were impacted by discrete items, as follows: Net earnings attributable to Vulcan for the first nine months of 2024 include: ▪ pretax charges of $86.6 million associated with a goodwill impairment ▪ pretax charges of $1.0 million associated with divested operations ▪ pretax charges of $1.8 million associated with non-routine acquisitions ▪ pretax loss on discontinued operations of $6.8 million ▪ $4.5 million of tax charges related to a valuation allowance against Calica deferred tax assets, including NOL carryforwards Net earnings attributable to Vulcan for the first nine months of 2023 include: ▪ pretax net gain of $15.2 million related to the sale of real estate in Illinois ▪ pretax charges of $28.3 million associated with long-lived asset impairments ▪ pretax charges of $4.7 million associated with divested operations ▪ pretax charges of $2.0 million associated with non-routine acquisitions ▪ pretax loss on discontinued operations of $11.7 million ▪ $11.2 million of tax charges related to a valuation allowance against Calica deferred tax assets, including NOL carryforwards Adjusted for these discrete items, earnings attributable to Vulcan from continuing operations (Adjusted Diluted EPS) was $5.37 per diluted share for the first nine months of 2024 compared to $5.54 per diluted share for the first nine months of 2023. CONTINUING OPERATIONS — Changes in earnings from continuing operations before income taxes for year-to-date September 30, 2024 versus year-to-date September 30, 2023 are summarized below: in millions Year-to-date September 30, 2023 $ 909.8 Higher aggregates gross profit 18.0 Higher asphalt gross profit 10.6 Lower concrete gross profit (42.5) Lower selling, administrative and general expenses 7.4 Lower gain on sale of property, plant & equipment and businesses (18.2) Higher impairment charges (58.3) Lower interest expense, net 24.5 All other (18.2) Year-to-date September 30, 2024 $ 833.1 Aggregates segment sales for the first nine months of 2024 were $4,477.3 million (down 1%), and shipments decreased 7%, or 13.2 million tons, compared to the prior year. Aggregates segment gross profit was $1,330.3 million ($8.01 per ton) in the first nine months of 2024 versus $1,312.3 million ($7.32 per ton) in the prior year. On a year-to-date basis, cash gross profit per ton increased 11% to $10.31 per ton. Freight-adjusted selling prices increased 10.9% as compared to the prior year. Freight-adjusted unit cost of sales for the first nine months of 2024 increased 12%, or $1.37 per ton, versus the prior year. Asphalt segment gross profit of $123.9 million was up $10.6 million from the first nine months of 2023, and cash gross profit of $155.8 million was an 11% improvement over the prior year. Asphalt mix shipments increased 1%, and average unit selling prices increased 5.4%, or $4.05 per ton. Concrete segment gross profit of $8.2 million was down $42.5 million from the first nine months of 2023, and cash gross profit of $43.1 million was a 61% decrease from the prior year. The prior year included results from our previously divested operations in Texas. SAG expenses were $393.0 million (7.1% of total revenues) versus $400.4 million (6.7% of total revenues) in the prior year’s first nine months. 31 Gain on sale of property, plant & equipment and businesses was $4.6 million in the first nine months of 2024 versus $22.8 million in the first nine months of 2023. The 2023 amount includes a net pretax gain of $15.2 million from the sale of real estate associated with a former recycled concrete facility in Illinois. For the nine months ended September 30, 2024, we recorded an $86.6 million pretax goodwill impairment charge related to a reporting unit that includes concrete operations acquired from U.S. Concrete in 2021 ($84.2 million after tax). For the nine months ended September 30, 2023, we recognized a pretax long-lived asset impairment charge of $28.3 million ($21.1 million after tax) related to the fourth quarter divestiture of our concrete assets in Texas. Other operating income (expense), net 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 $23.9 million of expense for the first nine months of 2024 compared to $13.1 million of expense in the first nine months of 2023. Other nonoperating income (expense), net was $12.7 million of expense for the first nine months of 2024 compared to $5.3 million of expense in the first nine months of 2023. Net interest expense was $117.7 million in the first nine months of 2024 compared to $142.2 million in the first nine months of 2023. The decrease in interest expense reflects the first quarter 2024 redemption of $550.0 million senior notes due 2026. Income tax expense from continuing operations was $208.5 million in the first nine months of 2024 compared to $194.4 million in the first nine months of 2023. The increase in tax expense was primarily due to a goodwill impairment recorded in the third quarter of 2024, the majority of which was non-tax deductible, and a discrete benefit recognized in the first nine months of 2023 related to a 2022 business disposition, partially offset by lower pretax earnings. Earnings attributable to Vulcan from continuing operations were $4.68 per diluted share in the first nine months of 2024 compared to $5.34 per diluted share in the first nine months of 2023. DISCONTINUED OPERATIONS — First nine months pretax loss from discontinued operations was $6.8 million in 2024 compared with $11.7 million in 2023. 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. KNOWN TRENDS OR UNCERTAINTIES Inflationary pressures and labor constraints can be factors that impact our operations. Although inflationary pressures can create short-term to medium-term headwinds, the combination of inflation and visibility of demand may create a favorable environment for price increases. Additionally, labor constraints can cause delays and inefficiencies in our operations as well as those of our customers. If labor constraints continue, 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 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. On May 13, 2022, the Mexican government suspended the three-year customs permit granted in March 2022 to Calica and began a proceeding that could result in the revocation of that permit. In September 2024, the Mexican government ordered the closure of Calica's already-suspended quarrying activities and the shutdown of certain activities at Calica's Punta Venado port facilities. On September 23, 2024, the President of Mexico signed a presidential decree declaring the entirety of Calica's properties as a "Natural Protected Area" (the "ANP Decree"). Among other provisions, the ANP Decree prohibits Calica from extracting petrous or construction materials from its properties. 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. For additional information regarding our Calica operations, see the NAFTA Arbitration section in Note 8 to the condensed consolidated financial statements. 32 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 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. 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. It also excludes other revenues related to services, such as landfill tipping fees, that are derived from our aggregates business. Additionally, we use this metric as the basis for calculating the average sales price of our aggregates products. Reconciliation of this metric to its nearest GAAP measure is presented below: Three Months Ended September 30 Nine Months Ended September 30 in millions, except per ton data 2024 2023 2024 2023 Aggregates segment Segment sales $ 1,572.4 $ 1,628.4 $ 4,477.3 $ 4,505.9 Freight & delivery revenues 1 (320.5) (366.3) (922.4) (1,040.8) Other revenues (23.9) (26.4) (72.9) (74.4) Freight-adjusted revenues $ 1,228.0 $ 1,235.7 $ 3,482.0 $ 3,390.7 Unit shipments - tons 57.7 64.0 166.0 179.2 Freight-adjusted sales price $ 21.27 $ 19.31 $ 20.98 $ 18.92 1 At the segment level, freight & delivery revenues include intersegment freight & delivery (which are eliminated at the consolidated level) and freight to remote distribution sites. 33 CASH GROSS PROFIT GAAP does not define “cash gross profit,” and it should not be considered as an alternative to earnings measures defined by GAAP. We and the investment community use this metric to assess the operating performance of our business. Additionally, we present this metric as we believe that it closely correlates to long-term shareholder value. Cash gross profit adds back noncash charges for depreciation, depletion, accretion and amortization to gross profit. Segment cash gross profit per unit is computed by dividing segment cash gross profit by units shipped. 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 September 30 Nine Months Ended September 30 in millions, except per unit data 2024 2023 2024 2023 Aggregates segment Gross profit $ 498.5 $ 509.1 $ 1,330.3 $ 1,312.3 Depreciation, depletion, accretion and amortization 130.3 125.6 381.8 357.6 Cash gross profit $ 628.8 $ 634.7 $ 1,712.1 $ 1,669.9 Unit shipments - tons 57.7 64.0 166.0 179.2 Gross profit per ton $ 8.63 $ 7.95 $ 8.01 $ 7.32 Freight-adjusted sales price $ 21.27 $ 19.31 $ 20.98 $ 18.92 Cash gross profit per ton 10.89 9.92 10.31 9.32 Freight-adjusted cash cost of sales per ton $ 10.38 $ 9.39 $ 10.67 $ 9.60 Asphalt segment Gross profit $ 60.2 $ 55.9 $ 123.9 $ 113.3 Depreciation, depletion, accretion and amortization 12.0 8.8 31.9 26.7 Cash gross profit $ 72.2 $ 64.7 $ 155.8 $ 140.0 Unit shipments - tons 4.1 4.0 10.2 10.1 Gross profit per ton $ 14.85 $ 13.92 $ 12.17 $ 11.26 Average sales price $ 80.88 $ 76.22 $ 79.42 $ 75.37 Cash gross profit per ton 17.82 16.11 15.30 13.90 Cash cost of sales per ton $ 63.06 $ 60.11 $ 64.12 $ 61.47 Concrete segment Gross profit $ 6.5 $ 26.0 $ 8.2 $ 50.7 Depreciation, depletion, accretion and amortization 10.9 20.5 34.9 60.4 Cash gross profit $ 17.4 $ 46.5 $ 43.1 $ 111.1 Unit shipments - cubic yards 0.9 2.1 2.7 6.0 Gross profit per cubic yard $ 7.04 $ 12.16 $ 3.07 $ 8.46 Average sales price $ 185.61 $ 169.98 $ 182.88 $ 165.27 Cash gross profit per cubic yard 18.52 21.74 16.12 18.54 Cash cost of sales per cubic yard $ 167.09 $ 148.24 $ 166.76 $ 146.73 34 EBITDA AND ADJUSTED EBITDA GAAP does not define “Earnings Before Interest, Taxes, Depreciation and Amortization” (EBITDA), and it should not be considered as an alternative to earnings measures defined by GAAP. We use this metric to assess the operating performance of our business and as a basis for strategic planning and forecasting as we believe that it closely correlates to long-term shareholder value. We do not use this metric as a measure to allocate resources. We adjust EBITDA for certain items to provide a more consistent comparison of earnings performance from period to period. Reconciliation of this metric to its nearest GAAP measure is presented below (numbers may not foot due to rounding): Three Months Ended September 30 Nine Months Ended September 30 Trailing-Twelve Months September 30 in millions 2024 2023 2024 2023 2024 2023 Net earnings attributable to Vulcan $ 207.6 $ 276.5 $ 618.2 $ 705.8 $ 845.6 $ 825.1 Income tax expense, including discontinued operations 84.7 84.8 206.7 191.3 311.0 218.8 Interest expense, net of interest income 38.4 46.6 117.7 142.2 155.1 189.8 Depreciation, depletion, accretion and amortization 160.7 161.1 468.4 464.4 620.9 616.9 EBITDA $ 491.3 $ 569.0 $ 1,411.0 $ 1,503.8 $ 1,932.6 $ 1,850.7 Loss on discontinued operations $ 1.8 $ 3.8 $ 6.8 $ 11.7 $ 9.8 $ 15.1 (Gain) loss on sale of real estate and businesses, net 0.0 0.0 0.0 (15.2) (51.9) 2.2 Loss on impairments 86.6 28.3 86.6 28.3 86.6 28.3 Charges associated with divested operations 0.0 0.0 1.0 4.7 4.2 7.4 Acquisition related charges 1 0.8 1.2 1.8 2.0 1.9 6.1 Adjusted EBITDA $ 580.6 $ 602.2 $ 1,507.1 $ 1,535.1 $ 1,983.3 $ 1,909.8 1 Represents charges associated with acquisitions requiring clearance under federal antitrust laws. ADJUSTED DILUTED EPS ATTRIBUTABLE TO VULCAN FROM CONTINUING OPERATIONS Similar to our presentation of Adjusted EBITDA, we present Adjusted diluted earnings per share (EPS) attributable to Vulcan from continuing operations to provide a more consistent comparison of earnings performance from period to period. This metric is not defined by GAAP and should not be considered as an alternative to earnings measures defined by GAAP. Reconciliation of this metric to its nearest GAAP measure is presented below: Three Months Ended September 30 Nine Months Ended September 30 2024 2023 2024 2023 Diluted Earnings Per Share Net earnings attributable to Vulcan $ 1.56 $ 2.07 $ 4.65 $ 5.28 Items included in Adjusted EBITDA above, net of tax 0.65 0.18 0.69 $ 0.17 NOL carryforward valuation allowance 0.01 0.04 0.03 0.09 Adjusted diluted EPS attributable to Vulcan from continuing operations $ 2.22 $ 2.29 $ 5.37 $ 5.54 35 NET DEBT TO ADJUSTED EBITDA Net debt to Adjusted EBITDA is not a GAAP measure and should not be considered as an alternative to metrics defined by GAAP. We, the investment community and credit rating agencies use this metric to assess our leverage. Net debt subtracts cash and cash equivalents and restricted cash from total debt. Reconciliation of this metric to its nearest GAAP measure is presented below: September 30 in millions 2024 2023 Current maturities of long-term debt $ 0.5 $ 0.5 Long-term debt 3,329.2 3,874.3 Total debt $ 3,329.7 $ 3,874.8 Cash and cash equivalents and restricted cash (434.3) (345.0) Net debt $ 2,895.4 $ 3,529.8 Trailing-Twelve Months (TTM) Adjusted EBITDA $ 1,983.3 $ 1,909.8 Total Debt to TTM Adjusted EBITDA 1.7x 2.0x Net Debt to TTM Adjusted EBITDA 1.5x 1.8x 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-five quarters. Our calculation of ROIC is considered a non-GAAP financial measure because we calculate ROIC using the non-GAAP metric EBITDA. We believe that our ROIC metric is meaningful because it helps investors assess how effectively we are deploying our assets. Although ROIC is a standard financial metric, numerous methods exist for calculating a company’s ROIC. As a result, the method we use to calculate our ROIC may differ from the methods used by other companies. This metric is not defined by GAAP and should not be considered as an alternative to earnings measures defined by GAAP. Reconciliation of this metric to its nearest GAAP measure is presented below (numbers may not foot due to rounding): Trailing-Twelve Months in millions September 30 2024 September 30 2023 Adjusted EBITDA $ 1,983.3 $ 1,909.8 Average invested capital Property, plant & equipment, net $ 6,273.7 $ 6,059.8 Goodwill 3,516.4 3,661.0 Other intangible assets 1,457.9 1,642.9 Fixed and intangible assets $ 11,248.0 $ 11,363.7 Current assets $ 2,264.6 $ 2,154.6 Cash and cash equivalents (428.0) (192.3) Current tax (36.4) (41.7) Adjusted current assets 1,800.2 1,920.6 Current liabilities (785.8) (946.7) Current maturities of long-term debt 0.5 0.5 Short-term debt 19.0 82.4 Adjusted current liabilities (766.3) (863.8) Adjusted net working capital $ 1,033.9 $ 1,056.8 Average invested capital $ 12,281.9 $ 12,420.5 Return on invested capital 16.1 % 15.4 % 36 2024 PROJECTED ADJUSTED EBITDA Projected Adjusted EBITDA is not defined by GAAP and should not be considered as an alternative to earnings measures defined by GAAP. Reconciliation of this metric to its nearest GAAP measure is presented below: in millions 2024 Projected Mid-Point Net earnings attributable to Vulcan $ 845 Income tax expense, including discontinued operations 274 Interest expense, net of interest income 155 Depreciation, depletion, accretion and amortization 630 Projected EBITDA $ 1,904 Items included in YTD Adjusted EBITDA 96 Projected Adjusted EBITDA $ 2,000 Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures, other than the reconciliation of Projected Adjusted EBITDA as noted above. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results. LIQUIDITY AND FINANCIAL RESOURCES Our primary sources of liquidity are cash provided by our operating activities, a substantial, committed bank line of credit and our commercial paper program. Additional sources of capital include access to the capital markets, the sale of surplus real estate and dispositions of nonstrategic operating assets. We believe these financial resources are sufficient to fund our business requirements for 2024 including: ▪ contractual obligations ▪ capital expenditures ▪ debt service obligations ▪ dividend payments ▪ potential acquisitions (including the proposed acquisition of Wake Stone Corporation) ▪ potential share repurchases Our balanced approach to capital deployment remains unchanged. We intend to balance reinvestment in our business, growth through acquisitions and return of capital to shareholders, while sustaining financial strength and flexibility. We actively manage our capital structure and resources in order to balance the cost of capital and the risk of financial stress. We seek to meet these objectives by adhering to the following principles: ▪ maintain substantial bank line of credit borrowing capacity ▪ proactively manage our debt maturity schedule such that repayment/refinancing risk in any single year is low ▪ maintain an appropriate balance of fixed-rate and floating-rate debt ▪ minimize financial and other covenants that limit our operating and financial flexibility 37 CASH Included in our September 30, 2024 cash and cash equivalents and restricted cash balances of $434.3 million is $1.1 million of restricted cash as described in Note 1 to the condensed consolidated financial statements under the section Restricted Cash. CASH FROM OPERATING ACTIVITIES Nine Months Ended September 30 in millions 2024 2023 Net earnings $ 619.6 $ 706.8 Depreciation, depletion, accretion and amortization 468.4 464.4 Loss on impairments 86.6 28.3 Noncash operating lease expense 38.6 40.7 Net gain on sale of property, plant & equipment and businesses (4.6) (22.8) Deferred income taxes, net (30.3) (6.0) Other operating cash flows, net 1 (208.8) (156.2) Net cash provided by operating activities $ 969.5 $ 1,055.2 1 Primarily reflects changes to working capital balances. Net cash provided by operating activities was $969.5 million during the nine months ended September 30, 2024, an $85.7 million decrease compared to the same period of 2023. The decrease was primarily attributable to changes in working capital balances. Days sales outstanding, a measurement of the time it takes to collect receivables, were 43.3 days at September 30, 2024 compared to 45.3 days at September 30, 2023. Additionally, our over 90 day receivables balance was $26.3 million at September 30, 2024, a decrease of $1.8 million from the $28.1 million balance at September 30, 2023. 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 $641.8 million during the first nine months of 2024, a $132.6 million increase compared to the same period of 2023. During the first nine months of 2024, we acquired businesses for $206.4 million of cash consideration whereas there were no business acquisitions in 2023 (see Note 16 to the condensed consolidated financial statements). Additionally, the first nine months of 2023 includes the collection of a $130.0 million note receivable related to the 2022 sale of concrete operations in New Jersey, New York and Pennsylvania. Partially offsetting these net increases to cash used for investing activities, during the first nine months of 2024, we invested $441.0 million in our existing operations (includes changes in accruals for property, plant & equipment) compared to $666.3 million in the prior year period. This $441.0 million investment includes both maintenance and internal growth projects to enhance our distribution capabilities, develop new production sites and improve existing production facilities. CASH FROM FINANCING ACTIVITIES Net cash used for financing activities was $842.6 million during the first nine months of 2024, a $480.1 million increase compared to cash used of $362.5 million in the same period of 2023. The current year includes cash paid to redeem the $550.0 million senior notes due 2026 whereas the prior year includes a $100.0 million net payment on our line of credit. Additionally, we returned $252.4 million to shareholders (a $30.9 million increase over the prior year) through $183.6 million of dividends ($1.38 per share compared to $1.29 per share) and $68.8 million of common stock repurchases (270,142 shares repurchased at $254.71 average price per share in 2024 compared to 241,363 shares repurchased at $206.82 average price per share in 2023). 38 DEBT Certain debt measures are presented below: in millions September 30 2024 December 31, 2023 September 30 2023 Debt Current maturities of long-term debt $ 0.5 $ 0.5 $ 0.5 Long-term debt 3,329.2 3,877.3 3,874.3 Total debt $ 3,329.7 $ 3,877.8 $ 3,874.8 Capital Total debt $ 3,329.7 $ 3,877.8 $ 3,874.8 Total equity 7,893.1 7,507.9 7,465.2 Total capital $ 11,222.8 $ 11,385.7 $ 11,340.0 Total Debt as a Percentage of Total Capital 29.7 % 34.1 % 34.2 % Weighted-Average Effective Interest Rates Line of credit 1 1.13 % 1.13 % 1.13 % Commercial paper 5.02 % 5.64 % 5.58 % Term debt 4.63 % 4.82 % 4.82 % Fixed Versus Floating Interest Rate Debt Fixed-rate debt 83.8 % 72.1 % 72.1 % Floating-rate debt 16.2 % 27.9 % 27.9 % 1 Reflects the margin above SOFR for SOFR-based borrowings; we also paid upfront fees that are amortized to interest expense and pay fees for unused borrowing capacity and standby letters of credit. At September 30, 2024, total debt to trailing-twelve months Adjusted EBITDA was 1.7 times (1.5 times on a net debt basis reflecting $434.3 million of cash on hand). Our weighted-average debt maturity was 10.4 years, and our total weighted-average effective interest rate was 4.70%. DELAYED DRAW TERM LOAN, LINE OF CREDIT AND COMMERCIAL PAPER PROGRAM 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. Concrete. 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. In 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. As of September 30, 2024, we had $550.0 million in long-term commercial paper borrowings. Commercial paper borrowings bear interest at rates determined at the time of borrowing and as agreed between us and the commercial paper investors. Our $1,600.0 million unsecured line of credit matures in August 2027 and 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. As of September 30, 2024, we were in compliance with the covenants, 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 September 30, 2024, our available borrowing capacity under the line of credit was $1,504.8 million. Utilization of the borrowing capacity was as follows: ▪ None was borrowed ▪ $95.2 million was used to support standby letters of credit TERM DEBT All of our $3,391.1 million (face value) of term debt (which includes $550.0 million of commercial paper) is unsecured. All of the covenants in the debt agreements are customary for investment-grade facilities. As of September 30, 2024, we were in compliance with all term debt covenants. In March 2023, we issued $550.0 million of 5.80% senior notes due 2026. 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. We redeemed these notes at par in March 2024 using cash on hand and recognized noncash expense of $2.3 million with the acceleration of unamortized deferred debt issuance costs. 39 CURRENT MATURITIES OF LONG-TERM DEBT The $0.5 million of current maturities of long-term debt as of September 30, 2024 is due as follows: in millions Current Maturities Fourth quarter 2024 $ 0.0 First quarter 2025 0.5 Second quarter 2025 0.0 Third quarter 2025 0.0 The above table excludes $400.0 million of notes due April 2025 as we have the intent and ability to refinance these notes on a long-term basis. DEBT RATINGS Our debt ratings and outlooks as of September 30, 2024 are as follows: Short-term Long-term Outlook Fitch F2 BBB Positive Moody's P-2 Baa2 Stable Standard & Poor's A-2 BBB+ Stable EQUITY The number of our common stock issuances and purchases for the year-to-date periods ended are as follows: in millions September 30 2024 December 31, 2023 September 30 2023 Common stock shares at January 1, issued and outstanding 132.1 132.9 132.9 Common stock issued for share-based compensation plans 0.3 0.2 0.2 Common stock purchased and retired (0.3) (1.0) (0.2) Common stock shares at end of period, issued and outstanding 132.1 132.1 132.9 As of September 30, 2024, there were 6,817,118 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. 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 price September 30 2024 December 31, 2023 September 30 2023 Number of shares purchased and retired 0.3 1.0 0.2 Total purchase price $ 68.8 $ 200.0 $ 49.9 Average price per share $ 254.71 $ 204.52 $ 206.82 There were no shares held in treasury as of September 30, 2024, December 31, 2023 and September 30, 2023. 40 OFF-BALANCE SHEET ARRANGEMENTS We have no off-balance sheet arrangements such as financing or unconsolidated variable interest entities. STANDBY LETTERS OF CREDIT For a discussion of our standby letters of credit, see Note 7 to the condensed consolidated financial statements. CRITICAL ACCOUNTING POLICIES We follow certain significant accounting policies when preparing our consolidated financial statements. A summary of these policies is included in our Annual Report on Form 10-K for the year ended December 31, 2023 (Form 10-K). We prepare these financial statements to conform with accounting principles generally accepted in the United States of America. These principles require us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and contingent liabilities at the date of the financial statements. We base our estimates on historical experience, current conditions and various other assumptions we believe reasonable under existing circumstances and evaluate these estimates and judgments on an ongoing basis. The results of these estimates form the basis for our judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Our actual results may materially differ from these estimates. 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 nine months ended September 30, 2024. NEW ACCOUNTING STANDARDS For a discussion of the accounting standards recently adopted or pending adoption and the effect such accounting changes will have on our results of operations, financial position or liquidity, see Note 17 to the condensed consolidated financial statements. 41 FORWARD-LOOKING STATEMENTS Certain matters discussed in this report, including expectations regarding future performance, contain forward-looking statements that are subject to assumptions, risks and uncertainties that could cause actual results to differ materially from those projected. These assumptions, risks and uncertainties include, but are not limited to: ▪ general economic and business conditions ▪ our dependence on the construction industry, which is subject to economic cycles ▪ the timing and amount of federal, state and local funding for infrastructure ▪ changes in the level of spending for private residential and private nonresidential construction ▪ changes in our effective tax rate ▪ domestic and global political, economic or diplomatic developments ▪ the increasing reliance on information technology infrastructure, including the risks that the infrastructure does not work as intended, experiences technical difficulties or is subjected to cyber-attacks ▪ the impact of the state of the global economy on our businesses and financial condition and access to capital markets ▪ international business operations and relationships, including recent actions taken by the Mexican government with respect to our property and operations in that country ▪ the highly competitive nature of the construction industry ▪ a pandemic, epidemic or other public health emergency ▪ the impact of future regulatory or legislative actions, including those relating to climate change, biodiversity, land use, wetlands, greenhouse gas emissions, the definition of minerals, tax policy and domestic and international trade ▪ the outcome of pending legal proceedings ▪ pricing of our products ▪ weather and other natural phenomena, including the impact of climate change and availability of water ▪ availability and cost of trucks, railcars, barges and ships, as well as their licensed operators, for transport of our materials ▪ energy costs ▪ costs of hydrocarbon-based raw materials ▪ healthcare costs ▪ labor relations, shortages and constraints ▪ the amount of long-term debt and interest expense we incur ▪ changes in interest rates ▪ volatility in pension plan asset values and liabilities, which may require cash contributions to the pension plans ▪ the impact of environmental cleanup costs and other liabilities relating to existing and/or divested businesses ▪ our ability to secure and permit aggregates reserves in strategically located areas ▪ our ability to manage and successfully integrate acquisitions ▪ our proposed acquisition of Wake Stone Corporation, including: ▪ our ability to complete the transaction on the proposed terms or on the anticipated timeline, or at all, including risks and uncertainties related to securing the necessary approvals and the satisfaction of other closing conditions to consummate the proposed transaction ▪ the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive merger agreement relating to the proposed transaction ▪ failure to realize the expected benefits of the proposed transaction ▪ significant transaction costs and/or unknown or inestimable liabilities ▪ the risk that Wake Stone Corporation’s business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected ▪ risks related to future opportunities and plans for the combined company ▪ disruption from the proposed transaction, making it more difficult to conduct business as usual or maintain relationships with customers, employees or suppliers ▪ the possibility that, if Vulcan does not achieve the perceived benefits of the proposed transaction as rapidly or to the extent anticipated by financial analysts or investors, the market price of Vulcan’s common stock could decline ▪ the effect of changes in tax laws, guidance and interpretations ▪ significant downturn in the construction industry may result in the impairment of goodwill or long-lived assets ▪ changes in technologies, which could disrupt the way we do business and how our products are distributed ▪ the risks of open pit and underground mining ▪ expectations relating to environmental, social and governance considerations ▪ 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 All forward-looking statements are made as of the date of filing or publication. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law. Investors are cautioned not to rely unduly on such forward-looking statements when evaluating the information presented in our filings, and are advised to consult any of our future disclosures in filings made with the Securities and Exchange Commission and our press releases with regard to our business and consolidated financial position, results of operations and cash flows. 42 INVESTOR INFORMATION We make available on our website, www.vulcanmaterials.com , free of charge, copies of our: ▪ Annual Report on Form 10-K ▪ Quarterly Reports on Form 10-Q ▪ Current Reports on Form 8-K Our website also includes amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as well as all Forms 3, 4 and 5 filed with the SEC by our executive officers and directors, as soon as the filings are made publicly available by the SEC on its EDGAR database ( www.sec.gov ). In addition to accessing copies of our reports online, you may request a copy of our Annual Report on Form 10-K, including financial statements, by writing to Denson N. Franklin III, Senior Vice President, General Counsel and Secretary, Vulcan Materials Company, 1200 Urban Center Drive, Birmingham, Alabama 35242. We have a: ▪ Business Conduct Policy applicable to all employees and directors ▪ Code of Ethics for the CEO and Senior Financial Officers Copies of the Business Conduct Policy and the Code of Ethics are available on our website under the “Investor Relations” tab (“Governance” section). 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: ▪ Corporate Governance Guidelines ▪ Charters for our Audit, Compensation & Human Capital, Executive, Finance, Governance and Safety, Health & Environmental Affairs Committees These documents meet all applicable SEC and New York Stock Exchange regulatory requirements. The Charters of the Audit, Compensation & Human Capital 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. Information included on our website is not incorporated into, or otherwise made a part of, this report. 43