Vulcan Materials CO 10-K

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Vulcan Materials Company: Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Vulcan Materials Company and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2025 expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Hewitt Landfill Environmental Matter – Refer to Note 12 to the consolidated financial statements Critical Audit Matter Description The Company is subject to governmental proceedings and orders pertaining to the protection of the environment. Specific to the Hewitt Landfill Environmental Matter, management is engaged in groundwater testing, certain remedial procedures and ongoing dialogue with the Environmental Protection Agency (EPA), Los Angeles Regional Water Quality Control Board (RWQCB), Los Angeles Department of Water and Power (LADWP), and Honeywell. The testing and dialogue is related to the Company’s contribution to soil, soil vapor and/or groundwater contamination in the former Hewitt Landfill in Los Angeles and the potential contribution of the Hewitt Landfill to groundwater contamination in the North Hollywood Operable Unit (NHOU) of the San Fernando Valley Superfund Site. The groundwater treatment system for the Hewitt Landfill on-site remediation is fully operational, and the anticipated costs have been fully accrued for based on facts and circumstances known to the Company at this time. The Company has disclosed facts and circumstances that led to the accrual and the inherent uncertainty that exists in the timing and recognition of potential incremental responsibility or share of costs for the Hewitt Landfill on-site remediation or the NHOU. Due to these uncertainties, future amounts recorded related to the ultimate resolution of claims and assessments could cause actual losses to differ materially from accrued costs. We identified the Hewitt Landfill and NHOU (collectively the “Hewitt Landfill Environmental Matter” or “the Matter”) as a critical audit matter because evaluating the estimate of the liability and the extent and sufficiency of related disclosures is subjective in nature and as such requires an increased extent of effort, involves especially subjective auditing judgments, and requires the involvement of our environmental specialists. Part II 62 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the uncertainty in the timing, recognition and disclosure of the Company’s responsibility and potential share of remediation costs, specifically as they relate to the Hewitt Landfill Environmental Matter include the following, among others: ▪ We tested the operating effectiveness of controls over the identification and evaluation of information available to assess potential responsibility or share of remediation costs for the Hewitt Landfill Environmental Matter, as well as controls over the adequacy of the related financial statement footnote disclosures. ▪ With the assistance of our environmental specialists, we evaluated the accuracy and completeness of management’s recorded liabilities for the Hewitt Landfill Environmental Matter by: ▪ Independently obtaining and reading correspondence from the EPA, RWQCB and LADWP regarding the Hewitt Landfill Environmental Matter. ▪ Obtaining an understanding of the change in estimate of remediation costs, as applicable, and performing procedures to evaluate the appropriateness and sufficiency of the estimate at year-end. ▪ Performing a search of environmental records in the public domain from independently and nationally recognized resources. ▪ We obtained letters from internal and external counsel as to the Matter’s status, probability of an unfavorable outcome, and the amount or range of potential loss should the outcome be unfavorable. ▪ We read and compared the Company’s footnote disclosure to evidential matter obtained during the audit. /s/ DELOITTE & TOUCHE LLP Birmingham, Alabama February 20, 2025 We have served as the Company’s auditor since 1956. Part II 63 VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Years Ended December 31 in millions, except per share data 2024 2023 2022 Total revenues $ 7,417.7 $ 7,781.9 $ 7,315.2 Cost of revenues ( 5,418.1 ) ( 5,833.4 ) ( 5,757.5 ) Gross profit 1,999.6 1,948.5 1,557.7 Selling, administrative and general expenses ( 531.1 ) ( 542.8 ) ( 515.1 ) Gain on sale of property, plant & equipment and businesses 52.3 76.4 10.7 Loss on impairments ( 86.6 ) ( 28.3 ) ( 67.9 ) Other operating expense, net ( 69.7 ) ( 26.4 ) ( 34.0 ) Operating earnings 1,364.5 1,427.4 951.4 Other nonoperating income (expense), net ( 22.1 ) ( 2.7 ) 5.1 Interest income 20.9 16.5 0.8 Interest expense ( 191.2 ) ( 196.1 ) ( 169.2 ) Earnings from continuing operations before income taxes 1,172.1 1,245.1 788.1 Income tax (expense) benefit Current ( 261.3 ) ( 343.6 ) ( 133.4 ) Deferred 9.9 44.2 ( 59.6 ) Total income tax expense ( 251.4 ) ( 299.4 ) ( 193.0 ) Earnings from continuing operations 920.7 945.7 595.1 Loss on discontinued operations, net of tax ( 7.6 ) ( 10.8 ) ( 18.6 ) Net earnings 913.1 934.9 576.5 Earnings attributable to noncontrolling interest ( 1.2 ) ( 1.7 ) ( 0.9 ) Net earnings attributable to Vulcan $ 911.9 $ 933.2 $ 575.6 Other comprehensive income (loss), net of tax Amortization of accumulated cash flow hedge losses 1.7 1.6 1.5 Adjustment for funded status of benefit plans 9.7 4.2 ( 6.5 ) Amortization of accumulated benefit plan costs 5.0 5.1 3.0 Other comprehensive income (loss) 16.4 10.9 ( 2.0 ) Comprehensive income 929.5 945.8 574.5 Comprehensive earnings attributable to noncontrolling interest ( 1.2 ) ( 1.7 ) ( 0.9 ) Comprehensive income attributable to Vulcan $ 928.3 $ 944.1 $ 573.6 Basic earnings (loss) per share attributable to Vulcan Continuing operations $ 6.95 $ 7.10 $ 4.47 Discontinued operations ( 0.06 ) ( 0.08 ) ( 0.14 ) Net earnings $ 6.89 $ 7.02 $ 4.33 Diluted earnings (loss) per share attributable to Vulcan Continuing operations $ 6.91 $ 7.06 $ 4.45 Discontinued operations ( 0.06 ) ( 0.08 ) ( 0.14 ) Net earnings $ 6.85 $ 6.98 $ 4.31 Weighted-average common shares outstanding Basic 132.3 133.0 133.0 Assuming dilution 133.1 133.7 133.6 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. Part II 64 VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS As of December 31 in millions 2024 2023 Assets Cash and cash equivalents $ 559.7 $ 931.1 Restricted cash 41.1 18.1 Accounts and notes receivable, net 892.3 889.7 Inventories 681.8 615.6 Other current assets 90.8 70.4 Total current assets 2,265.7 2,524.9 Investments and long-term receivables 31.3 31.3 Property, plant & equipment, net 8,461.5 6,217.7 Operating lease right-of-use assets, net 526.4 511.7 Goodwill 3,788.1 3,531.7 Other intangible assets, net 1,714.7 1,460.7 Other noncurrent assets 317.1 267.7 Total assets $ 17,104.8 $ 14,545.7 Liabilities Current maturities of long-term debt 400.5 0.5 Trade payables and accruals 407.0 390.4 Accrued salaries, wages and management incentives 124.0 135.8 Accrued interest 31.4 32.8 Other current liabilities 276.2 238.1 Total current liabilities 1,239.1 797.6 Long-term debt 4,906.9 3,877.3 Deferred income taxes, net 1,336.5 1,028.9 Pension and other postretirement benefits 75.2 83.6 Asset retirement obligations 427.4 324.1 Deferred revenue 137.8 145.3 Noncurrent operating lease liabilities 521.4 507.4 Other noncurrent liabilities 318.0 273.6 Total liabilities $ 8,962.3 $ 7,037.8 Other commitments and contingencies (Note 12) Equity Common stock, $ 1 par value, Authorized 480.0 shares, Outstanding 132.1 and 132.1 shares, respectively 132.1 132.1 Capital in excess of par value 2,900.1 2,880.1 Retained earnings 5,213.8 4,615.0 Accumulated other comprehensive loss ( 127.4 ) ( 143.8 ) Total shareholders' equity 8,118.6 7,483.4 Noncontrolling interest 23.9 24.5 Total equity 8,142.5 7,507.9 Total liabilities and equity $ 17,104.8 $ 14,545.7 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. Part II 65 VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31 in millions 2024 2023 2022 Operating Activities Net earnings $ 913.1 $ 934.9 $ 576.5 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation, depletion, accretion and amortization 632.2 617.0 587.5 Loss on impairments 86.6 28.3 67.9 Noncash operating lease expense 51.4 53.9 60.3 Net gain on sale of property, plant & equipment and businesses ( 52.3 ) ( 76.4 ) ( 10.7 ) Contributions to pension plans ( 8.7 ) ( 7.4 ) ( 7.8 ) Share-based compensation expense 53.4 63.2 41.1 Deferred income taxes, net ( 9.4 ) ( 43.3 ) 57.7 (Increase) decrease in assets excluding the initial effects of business acquisitions and dispositions Accounts and notes receivable 63.2 28.2 ( 53.3 ) Inventories ( 27.4 ) ( 54.6 ) ( 49.5 ) Other assets ( 93.0 ) 27.8 ( 92.3 ) Increase (decrease) in liabilities excluding the initial effects of business acquisitions and dispositions Accrued interest and income taxes ( 6.8 ) 18.8 0.4 Trade payables and other accruals ( 193.0 ) ( 25.1 ) ( 17.4 ) Other noncurrent liabilities ( 20.4 ) ( 42.4 ) ( 36.4 ) Other, net 20.7 13.9 24.2 Net cash provided by operating activities $ 1,409.6 $ 1,536.8 $ 1,148.2 Investing Activities Purchases of property, plant & equipment ( 603.5 ) ( 872.6 ) ( 612.6 ) Proceeds from sale of property, plant & equipment 54.7 94.6 38.7 Proceeds from sale of businesses 0.2 613.6 50.0 Payment for businesses acquired, net of acquired cash and adjustments ( 2,266.2 ) 0.9 ( 529.2 ) Other, net ( 0.1 ) 0.0 0.1 Net cash used for investing activities $ ( 2,814.9 ) $ ( 163.5 ) $ ( 1,053.0 ) Financing Activities Proceeds from short-term debt 8.0 166.1 1,361.0 Payment of short-term debt ( 8.0 ) ( 266.1 ) ( 1,261.0 ) Payment of current maturities and long-term debt ( 550.5 ) ( 550.5 ) ( 557.7 ) Proceeds from issuance of long-term debt 2,000.0 550.0 550.0 Debt issuance and exchange costs ( 31.6 ) ( 3.4 ) ( 2.8 ) Payment of finance leases ( 13.0 ) ( 30.8 ) ( 33.8 ) Purchases of common stock ( 68.8 ) ( 200.0 ) 0.0 Dividends paid ( 244.4 ) ( 228.4 ) ( 212.6 ) Share-based compensation, shares withheld for taxes ( 33.0 ) ( 21.9 ) ( 18.5 ) Distribution to noncontrolling interest ( 1.8 ) ( 0.8 ) 0.0 Other, net 0.0 0.2 0.2 Net cash provided by (used for) financing activities $ 1,056.9 $ ( 585.6 ) $ ( 175.2 ) Net increase (decrease) in cash and cash equivalents and restricted cash ( 348.4 ) 787.7 ( 80.0 ) Cash and cash equivalents and restricted cash at beginning of year 949.2 161.5 241.5 Cash and cash equivalents and restricted cash at end of year $ 600.8 $ 949.2 $ 161.5 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. Part II 66 VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF EQUITY Common Stock Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders' Equity Non- controlling Interest Total in millions Shares Amount Balances at December 31, 2021 132.7 $ 132.7 $ 2,816.5 $ 3,748.5 $ ( 152.7 ) $ 6,545.0 $ 22.7 $ 6,567.7 Net earnings 0.0 0.0 0.0 575.6 0.0 575.6 0.9 576.5 Share-based compensation plans, net of shares withheld for taxes 0.2 0.2 ( 18.7 ) 0.0 0.0 ( 18.5 ) 0.0 ( 18.5 ) Share-based compensation expense 0.0 0.0 41.1 0.0 0.0 41.1 0.0 41.1 Cash dividends on common stock 0.0 0.0 0.0 ( 212.6 ) 0.0 ( 212.6 ) 0.0 ( 212.6 ) Other comprehensive income (loss) 0.0 0.0 0.0 0.0 ( 2.0 ) ( 2.0 ) 0.0 ( 2.0 ) Other 0.0 0.0 0.1 ( 0.1 ) 0.0 0.0 0.0 0.0 Balances at December 31, 2022 132.9 $ 132.9 $ 2,839.0 $ 4,111.4 $ ( 154.7 ) $ 6,928.6 $ 23.6 $ 6,952.2 Net earnings 0.0 0.0 0.0 933.2 0.0 933.2 1.7 934.9 Share-based compensation plans, net of shares withheld for taxes 0.2 0.2 ( 22.0 ) 0.0 0.0 ( 21.8 ) 0.0 ( 21.8 ) Purchase and retirement of common stock ( 1.0 ) ( 1.0 ) 0.0 ( 201.5 ) 0.0 ( 202.5 ) 0.0 ( 202.5 ) Share-based compensation expense 0.0 0.0 63.2 0.0 0.0 63.2 0.0 63.2 Cash dividends on common stock 0.0 0.0 0.0 ( 228.4 ) 0.0 ( 228.4 ) 0.0 ( 228.4 ) Other comprehensive income (loss) 0.0 0.0 0.0 0.0 10.9 10.9 0.0 10.9 Distribution to noncontrolling interest 0.0 0.0 0.0 0.0 0.0 0.0 ( 0.8 ) ( 0.8 ) Other 0.0 0.0 ( 0.1 ) 0.3 0.0 0.2 0.0 0.2 Balances at December 31, 2023 132.1 $ 132.1 $ 2,880.1 $ 4,615.0 $ ( 143.8 ) $ 7,483.4 $ 24.5 $ 7,507.9 Net earnings 0.0 0.0 0.0 911.9 0.0 911.9 1.2 913.1 Share-based compensation plans, net of shares withheld for taxes 0.3 0.3 ( 33.5 ) 0.0 0.0 ( 33.2 ) 0.0 ( 33.2 ) Purchase and retirement of common stock ( 0.3 ) ( 0.3 ) 0.0 ( 68.8 ) 0.0 ( 69.1 ) 0.0 ( 69.1 ) Share-based compensation expense 0.0 0.0 53.4 0.0 0.0 53.4 0.0 53.4 Cash dividends on common stock 0.0 0.0 0.0 ( 244.4 ) 0.0 ( 244.4 ) 0.0 ( 244.4 ) Other comprehensive income (loss) 0.0 0.0 0.0 0.0 16.4 16.4 0.0 16.4 Distribution to noncontrolling interest 0.0 0.0 0.0 0.0 0.0 0.0 ( 1.8 ) ( 1.8 ) Other 0.0 0.0 0.1 0.1 0.0 0.2 0.0 0.2 Balances at December 31, 2024 132.1 $ 132.1 $ 2,900.1 $ 5,213.8 $ ( 127.4 ) $ 8,118.6 $ 23.9 $ 8,142.5 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. Part II 67 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS Vulcan Materials Company (the “Company,” “Vulcan,” “we,” “our”), a New Jersey corporation, is the nation's largest supplier of construction aggregates (primarily crushed stone, sand and gravel) and a major producer of aggregates-intensive downstream products such as asphalt mix and ready-mixed concrete. We operate primarily in the United States, and our principal product — aggregates — is used in most types of public and private construction projects and in the production of asphalt mix and ready-mixed concrete. We serve aggregates markets in twenty-three states, the U.S. Virgin Islands, Washington D.C., and the local markets surrounding our operations in Freeport, Bahamas; British Columbia, Canada; Puerto Cortés, Honduras; and Quintana Roo, Mexico (see Note 12 , NAFTA Arbitration). Our primary focus is serving metropolitan markets in the United States that are expected to experience the most significant growth in population, households and employment. These three demographic factors are significant drivers of demand for aggregates. While aggregates is our focus and primary business, 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. Due to the 2005 sale of our Chemicals business as described below, the results of the Chemicals business are presented as discontinued operations in the accompanying Consolidated Statements of Comprehensive Income. DISCONTINUED OPERATIONS In 2005, we sold substantially all the assets of our Chemicals business to Basic Chemicals, a subsidiary of Occidental Chemical Corporation. The financial results of the Chemicals business are classified as discontinued operations in the accompanying Consolidated Statements of Comprehensive Income for all periods presented. Results from discontinued operations are as follows: in millions 2024 2023 2022 Pretax loss $ ( 10.2 ) $ ( 14.7 ) $ ( 25.2 ) Income tax benefit 2.6 3.9 6.6 Loss on discontinued operations, net of tax $ ( 7.6 ) $ ( 10.8 ) $ ( 18.6 ) Our discontinued operations include charges related to general and product liability costs, including legal defense costs, and environmental remediation costs associated with our former Chemicals business (including certain matters as discussed in Note 12 ). In addition, 2022 includes a $ 15.3 million charge for a litigation matter. There were no revenues from discontinued operations for the years presented. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Vulcan Materials Company and all our majority or wholly-owned subsidiary companies. Partially-owned affiliates are either consolidated or accounted for at cost or as equity investments depending on the level of ownership interest or our ability to exercise control over the affiliates’ operations. All intercompany transactions and accounts have been eliminated in consolidation. NONCONTROLLING INTEREST We own 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). This noncontrolling interest consists of the Namgis’ share of the fair value equity in the partnership. Our consolidated financial statements recognize the full fair value of all of the subsidiary’s assets and liabilities offset by the noncontrolling interest in total equity. USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS The preparation of these financial statements in conformity with accounting principles generally accepted (GAAP) in the United States of America requires us to make estimates and judgments that affect 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 evaluate these estimates and judgments on an ongoing basis and base our estimates on historical experience, current conditions and various other assumptions that are believed to be reasonable under the circumstances. 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. Actual results may differ materially from these estimates. The most significant estimates 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 December 31, 2024 will be reflected in management’s estimates for future periods. Part II 68 BUSINESS COMBINATIONS We account for business combinations under the acquisition method of accounting. The purchase price of an acquisition is allocated to the underlying identifiable assets acquired and liabilities assumed based on their respective fair values. The purchase price is determined based on the fair value of consideration transferred to and liabilities assumed from the seller as of the date of acquisition. We allocate the purchase price to the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed as of the date of acquisition. Goodwill is recorded for the excess of the purchase price over the net fair value of the identifiable assets acquired and liabilities assumed. Determining the fair values of assets acquired and liabilities assumed requires judgment and often involves the use of significant estimates and assumptions. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction and, therefore, represents an exit price. A fair value measurement assumes the highest and best use of the asset by market participants. We may adjust the amounts recognized in an acquisition during a measurement period after the acquisition date. Any such adjustments are the result of subsequently obtaining additional information that existed at the acquisition date regarding the assets acquired or the liabilities assumed. Measurement period adjustments are generally recorded as increases or decreases to goodwill, if any, recognized in the transaction. The cumulative impact of measurement period adjustments on depreciation, amortization and other income statement items are recognized in the period the adjustment is determined. For additional information about business combinations, see Note 19 . FOREIGN CURRENCY TRANSACTIONS The U.S. dollar is the functional currency for all of our operations, as the primary economic environment in which we transact business is the United States. For our non-U.S. subsidiaries, local currency inventories and long-term assets such as property, plant & equipment and intangibles are remeasured into U.S. dollars at approximate rates prevailing when acquired; all other assets and liabilities are remeasured at year-end exchange rates. Inventories charged to cost of sales and depreciation are remeasured at historical rates; all other income and expense items are remeasured at average exchange rates prevailing during the year. Gains and losses which result from remeasurement are included in other nonoperating income/expense in the accompanying Consolidated Statements of Comprehensive Income and are not material for the years presented. CASH EQUIVALENTS We classify as cash equivalents all highly liquid securities with a maturity of three months or less at the time of purchase. The carrying amount of these securities approximates fair value due to their short-term maturities. RESTRICTED CASH Restricted cash primarily consists of cash proceeds from the sale of property held in escrow for the acquisition of replacement property under like-kind exchange agreements. The escrow accounts are administered by an intermediary. Cash restricted pursuant to like-kind exchange agreements remains restricted for a maximum of 180 days from the date of the property sale pending the acquisition of replacement property. Restricted cash may also include cash reserved by other contractual agreements (such as asset purchase agreements) for a specified purpose and therefore is not available for use for other purposes. Restricted cash is included with cash and cash equivalents in the accompanying Consolidated Statements of Cash Flows. ACCOUNTS AND NOTES RECEIVABLE Accounts and notes receivable from customers result from our extending credit to trade customers for the purchase of our products. The terms generally provide for payment within 15 days of the month following invoice. On occasion, when necessary to conform to regional industry practices, we sell product under extended payment terms, which may result in either secured or unsecured short-term notes; or, on occasion, notes with durations of less than one year are taken in settlement of existing accounts receivable. Other accounts and notes receivable result from short-term transactions (less than one year) other than the sale of our products, such as interest receivable, insurance claims, freight claims, bid deposits or rents receivable. Allowance for credit losses is based on our assessment of the collectability of customer accounts. We regularly review the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. Allowances for credit losses were $ 13.2 million and $ 13.6 million at December 31, 2024 and 2023, respectively. Bad debt expense (included in selling, administrative and general expense) for the years ended December 31, 2024, 2023 and 2022 was $ 3.7 million, $ 2.1 million and $ 0.7 million, respectively. INVENTORIES Inventories and supplies are stated at the lower of cost or net realizable value. We use the last-in, first-out (LIFO) method of valuation for most of our inventories because it results in a better matching of costs with revenues. Such costs include fuel, parts and supplies, raw materials, direct labor and production overhead. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on our estimates of expected year-end inventory levels and costs and are subject to the final year-end LIFO inventory valuation. Substantially all operating supplies inventory is carried at average cost. For additional information about inventories, see Note 3 . Part II 69 PROPERTY, PLANT & EQUIPMENT Property, plant & equipment are carried at cost less accumulated depreciation, depletion and amortization. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed, and any related gain or loss is reflected in income. Capitalized software costs reflected in property, plant & equipment are immaterial for all years presented. For additional information about our property, plant & equipment, see Note 4 . PREPAID SOFTWARE AS A SERVICE Prepaid software as a service (SaaS) implementation costs of $ 17.7 million are reflected in other noncurrent assets as of December 31, 2024 (there were no related prepaid implementation costs prior to 2024). We recorded prepaid SaaS costs of $ 19.4 million for the year ended December 31, 2024 which are recognized as service expense on a straight-line basis over 7 years. Service expense related to prepaid SaaS implementation costs was $ 1.7 million for the year ended December 31, 2024. REPAIR AND MAINTENANCE Repair and maintenance costs generally are charged to operating expense as incurred. Renewals and betterments that add materially to the utility or useful lives of property, plant & equipment are capitalized and subsequently depreciated. Actual costs for planned major maintenance activities, related primarily to periodic overhauls on our aircrafts and oceangoing vessels, are capitalized and amortized to the next overhaul. LEASES Our nonmineral leases with initial terms in excess of one year are recognized on the balance sheet as right-of-use (ROU) assets and lease liabilities. Mineral leases are exempt from balance sheet recognition. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the leases. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The lease term only includes options to extend or terminate the lease when it is reasonably certain that we will exercise that option. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. ROU assets are adjusted for any prepaid lease payments and lease incentives. Except for equipment with monthly monitoring service where the service component accounts for a majority of the lease cost, the non-lease components of our lease agreements are not separated from the lease components. For additional information about leases, see Note 7 . DEPRECIATION, DEPLETION, ACCRETION AND AMORTIZATION Depreciation is generally computed by the straight-line method at rates based on the estimated service lives of the various classes of assets, which include machinery and equipment ( 3 to 35 years), buildings ( 7 to 20 years) and land improvements ( 3 to 20 years). Finance leases are amortized over varying periods not in excess of applicable lease terms or estimated useful lives. Capitalized costs for software under our control (by ownership or license) are included in machinery and equipment and are depreciated on a straight-line basis beginning when the software project is substantially complete. Cost depletion on depletable land is computed by the unit-of-sales method based on estimated recoverable units. Accretion reflects the period-to-period increase in the carrying amount of the liability for asset retirement obligations. It is computed using the same credit-adjusted, risk-free rate used to initially measure the liability at fair value. Leaseholds are amortized over varying periods not in excess of applicable lease terms or estimated useful lives. Amortization of intangible assets subject to amortization is computed based on the estimated life of the intangible assets. A significant portion of our intangible assets is contractual rights in place associated with zoning, permitting and other rights to access and extract aggregates reserves. Contractual rights in place associated with aggregates reserves are amortized using the unit-of-sales method based on estimated recoverable units. Other intangible assets are amortized principally by the straight-line method. Depreciation, depletion, accretion and amortization expense for the years ended December 31 is outlined below: in millions 2024 2023 2022 Depreciation $ 464.6 $ 441.1 $ 409.1 Depletion 59.5 61.1 50.2 Accretion 14.7 13.9 14.1 Depreciation of finance leases 9.5 12.8 16.5 Amortization of intangibles 83.9 88.1 97.6 Total depreciation, depletion, accretion and amortization $ 632.2 $ 617.0 $ 587.5 Part II 70 DERIVATIVE INSTRUMENTS During the normal course of operations, we are exposed to market risks including interest rates, foreign currency exchange rates and commodity prices. From time to time, and consistent with our risk management policies, we use derivative instruments to balance the cost and risk of such expenses. We do not use derivative instruments for trading or other speculative purposes. The accounting for gains and losses that result from changes in the fair value of derivative instruments depends on whether the derivatives have been designated and qualify as hedging instruments and the type of hedging relationship. Changes in the fair value of interest rate swap fair value hedges are recorded as interest expense consistent with the change in the fair value of the hedged item attributable to the risk being hedged. Changes in the fair value of interest rate swap cash flow hedges are recorded in accumulated other comprehensive income (AOCI) and are reclassified into interest expense in the same period the hedged items affect earnings. We may also enter into contracts that qualify for the normal purchases and normal sales (NPNS) exception. When a contract meets the criteria to qualify as NPNS, we apply such exception. Income recognition and realization related to NPNS contracts generally coincide with the physical delivery of the commodity. For contracts qualifying for the NPNS exception, no recognition of the contract’s fair value in the consolidated financial statements is required until settlement of the contract as long as the transaction remains probable of occurring. For additional information about derivative instruments, see Note 5 . FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as described below: Level 1: Quoted prices in active markets for identical assets or liabilities Level 2: Inputs that are derived principally from or corroborated by observable market data Level 3: Inputs that are unobservable and significant to the overall fair value measurement Our assets at December 31 subject to fair value measurement on a recurring basis are summarized below: in millions 2024 2023 Level 1 Fair Value Rabbi Trust Mutual funds $ 31.1 $ 31.7 Total $ 31.1 $ 31.7 Level 2 Fair Value Interest rate swaps $ 0.0 $ ( 0.3 ) Rabbi Trust Money market mutual fund 0.3 0.5 Total $ 0.3 $ 0.2 We have two Rabbi Trusts for the purpose of providing a level of security for the employee nonqualified retirement and deferred compensation plans and for the directors' nonqualified deferred compensation plans. The fair values of these investments are estimated using a market approach. The Level 1 investments include mutual funds for which quoted prices in active markets are available. Level 2 investments are stated at estimated fair value based on the underlying investments in the fund (high-quality, short-term, U.S. dollar-denominated money market instruments). Net gains (losses) of the Rabbi Trusts’ investments were $( 0.4 ) million, $ 3.0 million and $( 4.8 ) million for the years ended December 31, 2024, 2023 and 2022, respectively. The portions of the net gains (losses) related to investments still held by the Rabbi Trusts at December 31, 2024, 2023 and 2022 were $( 0.6 ) million, $ 3.1 million and $( 5.2 ) 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. These interest rate swaps are more fully described in Note 5 . The carrying values of our cash equivalents, restricted cash, accounts and notes receivable, short-term debt, trade payables and accruals, and all other current liabilities approximate their fair values because of the short-term nature of these instruments. Additional disclosures for derivative instruments and interest-bearing debt are presented in Note 5 and Note 6 , respectively. During the third quarter of 2023, net assets held for sale (our concrete operations in Texas) with a carrying value of $ 513.3 million were written down to their estimated fair value (less cost to sell) of $ 485.0 million, resulting in an impairment loss of $ 28.3 million; these net assets were subsequently sold during the fourth quarter of 2023 resulting in additional loss on sale of $ 13.8 million. The estimated fair value (Level 1 fair value measurement) was determined based on the expected proceeds from the probable sale of the disposal group. See below for a related goodwill impairment charge in 2022 and Note 19 for additional discussion of the disposal of the net assets. Part II 71 GOODWILL IMPAIRMENT Goodwill represents the excess of the cost of net assets acquired in business combinations over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. Goodwill impairment exists when the fair value of a reporting unit is less than its carrying amount. As of December 31, 2024, goodwill totaled $ 3,788.1 million as compared to $ 3,531.7 million at December 31, 2023. Goodwill represents 22 % of total assets at December 31, 2024 and 24 % at December 31, 2023. Goodwill is tested for impairment annually, as of November 1, or more frequently whenever events or changes in circumstances would more likely than not reduce the fair value of a reporting unit below its carrying amount. Goodwill is tested for impairment at the reporting unit level, one level below our operating segments. We have three operating segments organized around our principal product lines: Aggregates, Asphalt and Concrete. Within these three operating segments, we have identified 14 reporting units (of which 10 carry goodwill) based primarily on geographic location. We have the option of either assessing qualitative factors to determine whether it is more likely than not that the carrying value of our reporting units exceeds their respective fair value or proceeding directly to a quantitative test. We elected to perform the quantitative impairment test for all years presented. The quantitative impairment test compares the fair value of a reporting unit to its carrying value, including goodwill. If the fair value exceeds its carrying value, the goodwill of the reporting unit is not considered impaired. However, if the carrying value of a reporting unit exceeds its fair value, we recognize an impairment loss equal to that excess. During the third quarter of 2024, we determined that a triggering event occurred with respect to a reporting unit that includes concrete operations acquired from U.S. Concrete in 2021. Based on an interim goodwill impairment test, we determined that the estimated fair value of this reporting unit was less than its carrying value. As a result, we recorded a $ 86.6 million interim goodwill impairment loss. In addition, 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 19 for additional information). There were no charges for goodwill impairment in the year ended December 31, 2023. We estimate the fair values of the reporting units using both an income approach (which involves discounting estimated future cash flows) and a market approach (which involves the application of revenue and EBITDA multiples of comparable companies). Determining the fair value of our reporting units involves the use of significant estimates and assumptions and considerable management judgment. We base our fair value estimates on assumptions we believe to be reasonable at the time, but such assumptions are subject to inherent uncertainty and actual results may differ. Changes in key assumptions or management judgment with respect to a reporting unit or its prospects, which may result from a change in market conditions, market trends, interest rates or other factors outside of our control, or underperformance relative to historical or projected operating results, could result in a significantly different estimate of the fair value of our reporting units, which could result in an impairment charge in the future. For additional information about goodwill, see Note 18 . IMPAIRMENT OF LONG-LIVED ASSETS EXCLUDING GOODWILL We evaluate the carrying value of long-lived assets, including intangible assets subject to amortization, when events and circumstances indicate that the carrying value may not be recoverable. The carrying value of long-lived assets is considered impaired when the estimated undiscounted cash flows from such assets are less than their carrying value. In that event, we perform a fair value analysis and recognize a loss equal to the amount by which the carrying value exceeds the fair value. Fair value is determined primarily by using a discounted cash flow methodology that requires considerable judgment and assumptions. Our estimate of net future cash flows is based on historical experience and assumptions of future trends, which may be different from actual results. We periodically review the appropriateness of the estimated useful lives of our long-lived assets. We test long-lived assets for impairment at a significantly lower level than the level at which we test goodwill for impairment. In markets where we do not produce downstream products (e.g., asphalt mix and ready-mixed concrete), the lowest level of largely independent identifiable cash flows is at the individual aggregates operation or a group of aggregates operations collectively serving a local market or remote markets through our rail and water distribution networks. Conversely, in vertically integrated markets, the cash flows of our downstream and upstream businesses are not largely independently identifiable as the selling price of the upstream products (aggregates) determines the profitability of the downstream business. As of December 31, 2024, net property, plant & equipment represents 49 % of total assets while net other intangible assets represents 10 % of total assets. As previously noted, during the third quarter of 2023, we recorded a $ 28.3 million loss on impairment of long-lived assets related to the fourth quarter sale of concrete operations in Texas. In addition, during the third quarter of 2022, we recorded a $ 16.9 million loss on impairment of long-lived assets related to the fourth quarter sale of concrete operations in New Jersey, New York and Pennsylvania. See Note 19 for divestiture information and Note 18 for a related goodwill impairment charge in 2022. During 2024, we recorded no significant losses on impairment of long-lived assets. For additional information about long-lived assets and intangible assets, see Note 4 and Note 18 , respectively. Part II 72 REVENUES AND REVENUE RECOGNITION Total revenues include sales of product and services to customers, net of any discounts and taxes, and freight and delivery revenues billed to customers. Freight and delivery generally represent pass-through transportation we incur (including our administrative costs) and pay to third-party carriers to deliver our products to customers. The cost related to freight and delivery is included in cost of revenues. Revenues are measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Sales tax and other taxes we collect are recorded as liabilities until remitted and thus are excluded from revenues. Costs to obtain and fulfill contracts (primarily asphalt construction paving contracts) are immaterial and are expensed as incurred when the expected amortization period is one year or less. Revenues for product sales are recognized when control passes to the customer (typically occurs when finished products are shipped/delivered). Construction paving revenues are recognized using the percentage-of-completion method. Our products typically are sold to private industry and not directly to governmental entities. Although approximately 40 % to 55 % of our aggregates shipments have historically been used in publicly-funded construction (such as highways, airports and government buildings), relatively insignificant 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 aggregates business is not directly subject to renegotiation of profits or termination of contracts with state or federal governments. For additional information regarding revenues and revenue recognition, see Note 2 . STRIPPING COSTS In the mining industry, the costs of removing overburden and waste materials to access mineral deposits are referred to as stripping costs. Stripping costs incurred during the production phase are considered costs of extracted minerals under our inventory costing system, inventoried, and recognized in cost of sales in the same period as the revenue from the sale of the inventory. The production stage is deemed to begin when the activities, including removal of overburden and waste material that may contain incidental saleable material, required to access the saleable product are complete. Stripping costs considered as production costs and included in the costs of inventory produced were $ 132.1 million, $ 135.8 million and $ 133.1 million in 2024, 2023 and 2022, respectively. Conversely, stripping costs incurred during the development stage of a mine (pre-production stripping) are excluded from our inventory cost. Pre-production stripping costs are capitalized and reported within other noncurrent assets in our accompanying Consolidated Balance Sheets. Capitalized pre-production stripping costs are expensed over the productive life of the mine using the unit-of-sales method. Pre-production stripping costs included in other noncurrent assets were $ 104.8 million and $ 98.4 million (net of accumulated amortization of $ 9.8 million and $ 7.7 million) as of December 31, 2024 and 2023, respectively. RECLAMATION COSTS Reclamation costs resulting from normal use of long-lived assets are recognized over the period the asset is in use when there is a legal obligation to incur these costs upon retirement of the assets. Additionally, reclamation costs resulting from normal use under a mineral lease are recognized over the lease term when there is a legal obligation to incur these costs upon expiration of the lease. The obligation, which cannot be reduced by estimated offsetting cash flows, is recorded at fair value as a liability at the obligating event date and is accreted through charges to operating expenses. This fair value is also capitalized as part of the carrying amount of the underlying asset and depreciated over the estimated useful life of the asset. If the obligation is settled for other than the carrying amount of the liability, a gain or loss is recognized on settlement. To determine the fair value of the obligation, we estimate the cost (including a reasonable profit margin) for a third party to perform the legally required reclamation tasks. This cost is then increased for both future estimated inflation and an estimated market risk premium related to the estimated years to settlement. Once calculated, this cost is discounted to fair value using present value techniques with a credit-adjusted, risk-free rate commensurate with the estimated years to settlement. In estimating the settlement date, we evaluate the current facts and conditions to determine the most likely settlement date. If this evaluation identifies alternative estimated settlement dates, we use a weighted-average settlement date considering the probabilities of each alternative. We review reclamation obligations at least annually for a revision to the cost or a change in the estimated settlement date. Additionally, reclamation obligations are reviewed in the period that a triggering event occurs that would result in either a revision to the cost or a change in the estimated settlement date. Examples of events that would trigger a change in the cost include a new reclamation law or amendment of an existing mineral lease. Examples of events that would trigger a change in the estimated settlement date include the acquisition of additional reserves or the closure of a facility. The carrying value of these obligations was $ 427.4 million and $ 324.1 million as of December 31, 2024 and 2023, respectively. For additional information about reclamation obligations (referred to in our financial statements as asset retirement obligations), see Note 17 . Part II 73 ENVIRONMENTAL COMPLIANCE Our environmental compliance costs are undiscounted and include the cost of ongoing monitoring programs, the cost of remediation efforts and other similar costs. We accrue costs for environmental assessment and remediation efforts when we determine that a liability is probable and we can reasonably estimate the cost. At the early stages of a remediation effort, environmental remediation liabilities are not easily quantified due to the uncertainties of various factors. The range of an estimated remediation liability is defined and redefined as events in the remediation effort occur, but generally liabilities are recognized no later than the completion of the remedial feasibility study. When we can estimate a range of probable loss, we accrue the most likely amount. If no amount in the range of probable loss is considered most likely, the minimum loss in the range is accrued. As of December 31, 2024, the spread between the amount accrued and the maximum loss in the range for all sites for which a range can be reasonably estimated was $ 4.1 million; this amount does not represent our maximum exposure to loss for all environmental remediation obligations as it excludes those sites for which a range of loss cannot be reasonably estimated at this time. Accrual amounts may be based on technical cost estimations or the professional judgment of experienced environmental managers. Our Safety, Health and Environmental Affairs Management Committee routinely reviews cost estimates and key assumptions in response to new information, such as the kinds and quantities of hazardous substances, available technologies and changes to the parties participating in the remediation efforts. However, a number of factors, including adverse agency rulings and encountering unanticipated conditions as remediation efforts progress, may cause actual results to differ materially from accrued costs. For additional information about environmental compliance costs, see Note 8 . CLAIMS AND LITIGATION INCLUDING SELF-INSURANCE We are involved with claims and litigation, including items covered under our self-insurance program. We are self-insured for losses related to workers' compensation up to $ 3.0 million per occurrence and automotive and general/product liability up to $ 10.0 million per occurrence. We have excess coverage on a per occurrence basis beyond these retention levels. Under our self-insurance program, we aggregate certain claims and litigation costs that are reasonably predictable based on our historical loss experience and accrue losses, including future legal defense costs, based on actuarial studies. Certain claims and litigation costs, due to their unique nature, are not included in our actuarial studies. We use both internal and outside legal counsel to assess the probability of loss and establish an accrual when the claims and litigation represent a probable loss and the cost can be reasonably estimated. For matters not included in our actuarial studies, legal defense costs are accrued when incurred. The following table outlines our self-insurance program at December 31: dollars in millions 2024 2023 Self-insurance Program Self-insured liabilities (undiscounted) $ 138.2 $ 151.7 Insured liabilities (undiscounted) 2.3 2.3 Discount rate 4.22 % 4.56 % Amounts Recognized in Consolidated Balance Sheets Investments and long-term receivables 2.3 2.3 Other current liabilities ( 47.3 ) ( 59.6 ) Other noncurrent liabilities ( 74.6 ) ( 76.1 ) Net insurance liabilities (discounted) $ ( 119.6 ) $ ( 133.4 ) Estimated payments (undiscounted and excluding the impact of related receivables) under our self-insurance program for the five years subsequent to December 31, 2024 are as follows: in millions Estimated Payments under Self-insurance Program 2025 $ 40.1 2026 29.0 2027 17.6 2028 10.0 2029 5.4 Significant judgment is used in determining the timing and amount of the accruals for probable losses, and the actual liability could differ materially from the accrued amounts. For additional information about claims and litigation, see Note 12 under the caption "Litigation and Environmental Matters." Part II 74 SHARE-BASED COMPENSATION All of our share-based compensation awards are classified as equity awards. We measure share-based compensation awards using fair-value-based measurement methods. This results in the recognition of compensation expense for all share-based compensation awards based on their fair value as of the grant date with adjustments for performance, as applicable. Compensation cost is recognized over the requisite service period. Forfeitures are recognized as they occur. A summary of the estimated future compensation cost (unrecognized compensation expense) as of December 31, 2024 related to share-based awards granted to employees under our long-term incentive plans is presented below: dollars in millions Unrecognized Compensation Expense Expected Weighted-Average Recognition (Years) SOSARs 1 $ 1.7 1.4 Performance shares 18.6 1.7 Restricted shares 13.4 1.7 Total/weighted-average $ 33.7 1.7 1 Stock-Only Stock Appreciation Rights (SOSARs) Pretax compensation expense related to our employee share-based compensation awards and related income tax benefits for the years ended December 31 are summarized below: in millions 2024 2023 2022 Pretax compensation expense $ 50.6 $ 60.6 $ 38.7 Income tax benefits 7.7 9.1 6.9 We receive an income tax deduction for share-based compensation equal to the excess of the market value of our common stock on the date of exercise or issuance over the exercise price. Excess tax benefits resulting from tax deductions, after considering any deductibility limitations such as IRC section 162(m), in excess of the compensation cost recognized are reflected as discrete income tax benefits in the period of exercise or issuance. For additional information about share-based compensation, see Note 11 under the caption "Share-based Compensation Plans". PENSION AND OTHER POSTRETIREMENT BENEFITS Accounting for pension and other postretirement benefits requires that we use assumptions for the valuation of projected benefit obligations (PBO) and the performance of plan assets. Each year, we review our assumptions (listed below) for discount rates (used for PBO, service cost, and interest cost calculations), expected return on plan assets and the cost of covered healthcare benefits. Due to plan changes made in 2013, annual pay increases do not materially impact plan obligations. ▪ Discount Rates — We use a high-quality bond full yield curve approach (specific spot rates for each annual expected cash flow) to establish the discount rates at each measurement date. ▪ Expected Return on Plan Assets — Our expected return on plan assets is a long-term view based on our current asset allocation and a judgment informed by consultation with our retirement plans’ consultant and our pension plans’ actuary. ▪ Rate of Increase in the Per Capita Cost of Covered Healthcare Benefits — We project the expected increases in the cost of covered healthcare benefits. Accounting standards provide for the delayed recognition of differences between actual results and expected or estimated results. This delayed recognition of actual results allows for a smoothed recognition in earnings of changes in benefit obligations and asset performance. The differences between actual results and expected or estimated results are recognized in full in other comprehensive income. Amounts recognized in other comprehensive income are reclassified to earnings in a systematic manner over the average remaining service period of participants for our active plans or the average remaining lifetime of participants for our inactive plans. We present the service cost component of net periodic benefit cost in cost of revenues and selling, administrative and general expense consistent with employee compensation costs. The other components of net periodic benefit cost are reported within other nonoperating income in our accompanying Consolidated Statements of Comprehensive Incom e. For additional information about pension and other postretirement benefits, see Note 10 . Part II 75 INCOME TAXES We file federal, state and foreign income tax returns and account for the current and deferred tax effects of such returns using the asset and liability method. We recognize deferred tax assets and liabilities (which reflect our best assessment of the future taxes we will pay) based on the differences between the book basis and tax basis of assets and liabilities. Deferred tax assets represent items to be used as a tax deduction or credit in future tax returns while deferred tax liabilities represent items that will result in additional tax in future tax returns. Significant judgments and estimates are required in determining our deferred tax assets and liabilities. These estimates are updated throughout the year to consider income tax return filings, our geographic mix of earnings, legislative changes and other relevant items. We are required to account for the effects of changes in income tax rates on deferred tax balances in the period in which the legislation is enacted. Each quarter we analyze the likelihood that our deferred tax assets will be realized. Realization of the deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in either the carryback or carryforward period. A valuation allowance is recorded if, based on the weight of all available positive and negative evidence, it is more likely than not (a likelihood of more than 50 %) that some portion, or all, of a deferred tax asset will not be realized. A summary of our deferred tax assets is included in Note 9 . We recognize a tax benefit associated with a tax position when, in our judgment, it is more likely than not that the position will be sustained based upon the technical merits of the position. For a tax position that meets the more likely than not recognition threshold, we measure the income tax benefit as the largest amount that we judge to have a greater than 50 % likelihood of being realized. A liability is established for the unrecognized portion of any tax position. Our liability for unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new legislation. Generally, we are not subject to significant changes in income taxes by any taxing jurisdiction for the years before 2021. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, we believe our liability for unrecognized tax benefits is appropriate. We consider a tax position to be resolved at the earlier of the issue being “effectively settled,” settlement of an examination, or the expiration of the statute of limitations. Upon resolution of a tax position, any liability for unrecognized tax benefits will be released. Our liability for unrecognized tax benefits is generally presented as noncurrent. However, if we anticipate paying cash within one year to settle an uncertain tax position, the liability is presented as current. We classify interest and penalties associated with our liability for unrecognized tax benefits as income tax expense. Our largest permanent item in computing both our taxable income and effective tax rate is the deduction allowed for statutory depletion. The impact of statutory depletion on the effective tax rate is presented in Note 9 . The deduction for statutory depletion does not necessarily change proportionately to changes in pretax earnings. COMPREHENSIVE INCOME We report comprehensive income in our Consolidated Statements of Comprehensive Income and Consolidated Statements of Equity. Comprehensive income comprises two subsets: net earnings and other comprehensive income (OCI). OCI includes adjustments to cash flow hedges, as well as actuarial gains or losses and prior service costs related to pension and postretirement benefit plans. For additional information about comprehensive income, see Note 14 . EARNINGS PER SHARE (EPS) Earnings per share are computed by dividing net earnings by the weighted-average common shares outstanding (basic EPS) or weighted-average common shares outstanding assuming dilution (diluted EPS) , as set forth below: in millions 2024 2023 2022 Weighted-average common shares outstanding 132.3 133.0 133.0 Dilutive effect of SOSARs 0.2 0.2 0.2 Other stock compensation awards 0.6 0.5 0.4 Weighted-average common shares outstanding, assuming dilution 133.1 133.7 133.6 All dilutive common stock equivalents are reflected in our earnings per share calculations. In periods of loss, shares that otherwise would have been included in our diluted weighted-average common shares outstanding computation would be excluded. Antidilutive common stock equivalents are not included in our earnings per share calculations. The number of antidilutive common stock equivalents for which the exercise price exceeds the weighted-average market price for the years ended December 31 is as follows: in millions 2024 2023 2022 Antidilutive common stock equivalents 0.0 0.0 0.1 Part II 76 RECLASSIFICATIONS As a result of a first quarter 2024 change in our internal management reporting structure, prior period segment information has been revised to conform to our current segment reporting structure. This change had no impact on our prior consolidated results of operations, financial position or cash flows (refer to Note 15 for further information). NEW ACCOUNTING STANDARDS ACCOUNTING STANDARDS RECENTLY ADOPTED During the fourth quarter of 2024, we adopted Accounting Standards Update (ASU) 2023-07, “Segment Reporting – Improvements to Reportable Segment Disclosures,” which resulted in enhanced disclosures related to significant segment expenses and a description of how the chief operating decision maker utilizes segment operating profit or loss to assess segment performance (see Note 15 ). ACCOUNTING STANDARDS PENDING ADOPTION In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, “Income Taxes – Improvements to Income Tax Disclosures,” which requires disclosure of specific categories and disaggregation of information in the rate reconciliation table and expands disclosures related to income taxes paid. The new standard is effective for fiscal years beginning after December 15, 2024 and is to be applied prospectively. We are assessing the effect of this ASU on our disclosures that will be included in our Form 10-K for the year ending December 31, 2025. In November 2024, the FASB issued ASU 2024-03, "Disaggregation of Income Statement Expenses," which requires disaggregated disclosure of prescribed expense categories within relevant income statement captions. The new standard is effective for fiscal years beginning after December 15, 2026 and is to be applied prospectively. We are assessing the effect of this ASU on our consolidated financial statements and related disclosures. Part II 77 NOTE 2: REVENUES Total revenues are primarily derived from our product sales of aggregates (crushed stone, sand and gravel, sand and other aggregates), asphalt mix and ready-mixed concrete, and include freight & delivery costs that we pass along to our customers to deliver these products. We also generate service revenues from our asphalt construction paving business and service revenues related to our aggregates business, such as landfill tipping fees. Our total service revenues were as follows: 2024 — $ 275.7 million ( 3.7 % of total revenues), 2023 — $ 239.6 million ( 3.1 % of total revenues) and 2022 — $ 233.1 million ( 3.2 % of total revenues). Our segment total revenues by geographic market for the years ended December 31, 2024, 2023 and 2022 are disaggregated as follows: For the Year Ended December 31, 2024 in millions Aggregates Asphalt Concrete Total East revenues $ 1,758.6 $ 200.0 $ 338.3 $ 2,296.9 Gulf Coast revenues 3,242.9 277.4 8.8 3,529.1 West revenues 948.1 768.2 306.4 2,022.7 Segment sales $ 5,949.6 $ 1,245.6 $ 653.5 $ 7,848.7 Intersegment sales ( 431.0 ) 0.0 0.0 ( 431.0 ) Total revenues 1 $ 5,518.6 $ 1,245.6 $ 653.5 $ 7,417.7 For the Year Ended December 31, 2023 in millions Aggregates Asphalt Concrete Total East revenues $ 1,665.2 $ 201.4 $ 363.0 $ 2,229.6 Gulf Coast revenues 3,333.8 231.6 539.8 4,105.2 West revenues 919.9 707.7 346.5 1,974.1 Segment sales $ 5,918.9 $ 1,140.7 $ 1,249.3 $ 8,308.9 Intersegment sales ( 527.0 ) 0.0 0.0 ( 527.0 ) Total revenues 1 $ 5,391.9 $ 1,140.7 $ 1,249.3 $ 7,781.9 For the Year Ended December 31, 2022 in millions Aggregates Asphalt Concrete Total East revenues $ 1,508.2 $ 177.3 $ 694.2 $ 2,379.7 Gulf Coast revenues 2,940.8 211.2 551.9 3,703.9 West revenues 831.6 601.7 347.8 1,781.1 Segment sales $ 5,280.6 $ 990.2 $ 1,593.9 $ 7,864.7 Intersegment sales ( 549.5 ) 0.0 0.0 ( 549.5 ) Total revenues 1 $ 4,731.1 $ 990.2 $ 1,593.9 $ 7,315.2 1 The geographic markets are defined by states/countries as follows: East market — Arkansas, Delaware, Illinois, Kentucky, Maryland, New Jersey, New York, North Carolina, Pennsylvania, Tennessee, Virginia, and Washington D.C. Gulf Coast market — Alabama, Florida, Georgia, Louisiana, Mississippi, Oklahoma, South Carolina, Texas, U.S. Virgin Islands, Freeport (Bahamas), Puerto Cortés (Honduras) and Quintana Roo (Mexico) West market — Arizona, California, Hawaii, New Mexico and British Columbia (Canada) PRODUCT REVENUES Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally, this occurs at a point in time when our aggregates, asphalt mix and ready-mixed concrete are shipped/delivered and control passes to the customer. Revenue for our products is recorded at the fixed invoice amount, and payment is due by the 15 th day of the following month; we do not offer discounts for early payment. Freight & delivery generally represents pass-through transportation costs we incur (including our administrative costs) and pay to third-party carriers to deliver our products to customers and are accounted for as a fulfillment activity. Likewise, the costs related to freight & delivery are included in cost of revenues. Part II 78 Freight & delivery revenues are as follows: in millions 2024 2023 2022 Total revenues $ 7,417.7 $ 7,781.9 $ 7,315.2 Freight & delivery revenues 1 ( 988.2 ) ( 1,003.4 ) ( 960.3 ) Total revenues excluding freight & delivery $ 6,429.5 $ 6,778.5 $ 6,354.9 1 Includes freight & delivery to remote distribution sites. CONSTRUCTION PAVING SERVICE REVENUES Revenue from our asphalt construction paving business is recognized over time using the percentage-of-completion method under the cost approach. The percentage of completion is determined by costs incurred to date as a percentage of total costs estimated for the project. 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 December 31, 2024, 2023 and 2022 were $ 159.0 million, $ 137.0 million and $ 112.3 million, respectively. The remaining period to complete the obligations remaining at December 31, 2024 ranged from 1 month to 48 months. Our construction contracts are unit priced, and an account receivable is recorded for amounts invoiced based on actual units produced. Contract assets for estimated earnings in excess of billings, contract assets related to retainage provisions and contract liabilities for billings in excess of costs are immaterial. Variable consideration in our construction paving contracts is immaterial and consists of incentives and penalties based on the quality of work performed. Our construction paving contracts may contain warranty provisions covering defects in equipment, materials, design or workmanship that generally run from nine months to one year after project completion. Due to the nature of our construction paving projects, including contract owner inspections of the work during construction and prior to acceptance, we have not experienced material warranty costs for these short-term warranties. VOLUMETRIC PRODUCTION PAYMENT DEFERRED REVENUES In 2013 and 2012, we sold a percentage interest in certain future aggregates production for net cash proceeds of $ 226.9 million. These transactions, structured as volumetric production payments (VPPs): ▪ relate to eight quarries in Georgia and South Carolina ▪ provide the purchaser solely with a nonoperating percentage interest in the subject quarries’ future aggregates production ▪ contain no minimum annual or cumulative guarantees by us for production or sales volume, nor minimum sales price ▪ are both volume and time limited We are the exclusive sales agent for, and transmit quarterly to the purchaser the proceeds from the sale of, the purchaser’s share of aggregates production. Our consolidated total revenues exclude the revenue from the sale of the purchaser’s share of aggregates. The proceeds we received from the sale of the percentage interest were recorded as deferred revenue on the balance sheet. We recognize revenue on a unit-of-sales basis (as we sell the purchaser’s share of production) relative to the volume limitations of the transactions. Given the nature of the risks and potential rewards assumed by the buyer, the transactions do not reflect financing activities. Changes in the VPP deferred revenue balances (current and noncurrent) are as follows: in millions 2024 2023 2022 Deferred revenue balance at beginning of year $ 152.8 $ 161.8 $ 170.1 Revenue recognized from deferred revenue ( 7.5 ) ( 9.0 ) ( 8.3 ) Deferred revenue balance at end of year $ 145.3 $ 152.8 $ 161.8 Based on expected sales from the specified quarries, we expect to recognize $ 7.5 million of VPP deferred revenue as income in 2025 (reflected in other current liabilities in our December 31, 2024 Consolidated Balance Sheet). Part II 79 NOTE 3: INVENTORIES Inventories at December 31 are as follows: in millions 2024 2023 Finished products 1 $ 534.6 $ 494.4 Raw materials 69.7 51.2 Products in process 9.0 6.5 Operating supplies and other 68.5 63.5 Total inventories $ 681.8 $ 615.6 1 Includes inventories encumbered by volumetric production payments (see Note 2) of $ 3.9 million and $ 3.6 million as of December 31, 2024 and 2023, respectively. In addition to the inventory balances presented above, as of December 31, 2024 and 2023, we had $ 22.8 million and $ 12.5 million, respectively, of inventory classified as long-term assets (other noncurrent assets) as we do not expect to sell the inventory within one year of their respective balance sheet dates. We use the LIFO method of valuation for most of our inventories as it results in a better matching of costs with revenues. Inventories valued under the LIFO method total $ 389.8 million and $ 356.9 million at December 31, 2024 and 2023, respectively. During 2024, 2023 and 2022, inventory reductions resulted in liquidations of LIFO inventory layers carried at costs prevailing in prior years as compared to current-year costs. The effect of the LIFO liquidation on our results was as follows: ▪ 2024 — decrease cost of revenues by $ 5.1 million and increase net earnings by $ 3.8 million ▪ 2023 — decrease cost of revenues by $ 3.6 million and increase net earnings by $ 2.7 million ▪ 2022 — decrease cost of revenues by $ 4.8 million and increase net earnings by $ 3.5 million Estimated current cost exceeded LIFO cost at December 31, 2024 and 2023 by $ 370.6 million and $ 302.6 million, respectively. In periods of increasing costs, LIFO generally results in higher cost of revenues than under FIFO. In periods of decreasing costs, the results are generally the opposite. We provide supplemental income disclosures to facilitate comparisons with companies not on LIFO. The supplemental income calculation is derived by tax-affecting the change in the LIFO reserve for the periods presented. If all inventories valued at LIFO cost had been valued under first-in, first-out (FIFO) method, the approximate effect on net earnings would have been an increase of $ 47.2 million in 2024, an increase of $ 27.9 million in 2023 and an increase of $ 48.1 million in 2022. NOTE 4: PROPERTY, PLANT & EQUIPMENT Balances of major classes of assets and allowances for depreciation, depletion and amortization at December 31 are as follows: in millions 2024 2023 Land and land improvements 1 $ 5,804.8 $ 4,292.6 Buildings 304.4 204.4 Machinery and equipment 7,717.2 6,785.5 Finance leases (see Note 7) 54.7 62.3 Deferred asset retirement costs 235.6 171.3 Construction in progress 400.1 319.4 Total, gross property, plant & equipment $ 14,516.8 $ 11,835.5 Allowances for depreciation, depletion and amortization ( 6,055.3 ) ( 5,617.8 ) Total, net property, plant & equipment $ 8,461.5 $ 6,217.7 1 Includes depletable land of $ 4,015.7 million and $ 2,684.4 million as of December 31, 2024 and 2023, respectively. Capitalized interest costs with respect to qualifying construction projects and total interest costs incurred before recognition of the capitalized amount for the years ended December 31 are as follows: in millions 2024 2023 2022 Capitalized interest cost $ 4.0 $ 3.7 $ 3.6 Total interest cost incurred before recognition of the capitalized amount 195.2 199.8 172.8 Part II 80 NOTE 5: DERIVATIVE INSTRUMENTS During the normal course of operations, we are exposed to market risks including interest rates, foreign currency exchange rates and commodity prices. From time to time, we use derivative instruments to balance the cost and risk of such expenses. We do not use derivative instruments for trading or other speculative purposes. In March 2023, we issued $ 550.0 million of 5.80 % fixed-rate debt maturing in March 2026. Concurrently, we entered into fixed-to-floating interest rate swap agreements designated as fair value hedges in the amount of $ 550.0 million. These swap agreements terminated in March 2024, coinciding with the redemption of the debt. The changes in the fair value of these swaps designated as fair value hedges were recorded in interest expense and were perfectly offset by changes in the fair value of the related debt also recorded in interest expense. These swaps were recognized at fair value in the accompanying Consolidated Balance Sheets at December 31 as follows: in millions Balance Sheet Location 2024 2023 Fair Value Hedges 1 Interest rate swaps Other noncurrent assets $ 0.0 $ 3.9 Interest rate swaps Other current liabilities 0.0 ( 4.2 ) Interest rate swaps net liability $ 0.0 $ ( 0.3 ) 1 See Note 1 under the caption “Fair Value Measurements” for further discussion of fair value determination. In 2007, 2018 and 2020, we entered into interest rate locks of future debt issuances to hedge the risk of higher interest rates. These interest rate locks were designated as cash flow hedges. The gain/loss upon settlement of these cash flow hedges is deferred (recorded in accumulated other comprehensive income (AOCI)) and amortized to interest expense over the term of the related debt. This amortization was reflected in the accompanying Consolidated Statements of Comprehensive Income for the years ended December 31 as follows: in millions Income Statement Location 2024 2023 2022 Cash Flow Hedges Loss reclassified from AOCI Interest expense $ ( 2.2 ) $ ( 2.1 ) $ ( 2.0 ) For the twelve-month period ending December 31, 2025, we estimate that $ 2.4 million of the $ 17.7 million net of tax loss in AOCI will be reclassified to interest expense. Part II 81 NOTE 6: DEBT Debt at December 31 is detailed as follows: in millions Effective Interest Rates 2024 2023 Bank line of credit expires 2029 1 $ 0.0 $ 0.0 Commercial paper expires 2029 1 0.0 0.0 Total short-term debt $ 0.0 $ 0.0 Bank line of credit expires 2029 1 $ 0.0 $ 0.0 Commercial paper expires 2029 1 550.0 550.0 4.50 % notes due 2025 4.65 % 400.0 400.0 5.80 % notes due 2026 0.0 550.0 3.90 % notes due 2027 4.00 % 400.0 400.0 4.95 % notes due 2029 5.17 % 500.0 0.0 3.50 % notes due 2030 3.94 % 750.0 750.0 5.35 % notes due 2034 5.48 % 750.0 0.0 7.15 % notes due 2037 8.05 % 129.2 129.2 4.50 % notes due 2047 4.59 % 700.0 700.0 4.70 % notes due 2048 5.42 % 460.9 460.9 5.70 % notes due 2054 5.82 % 750.0 0.0 Other notes 1.0 1.4 Total long-term debt - face value $ 5,391.1 $ 3,941.5 Unamortized discounts and debt issuance costs ( 83.7 ) ( 63.4 ) Fair value adjustments 2 0.0 ( 0.3 ) Total long-term debt - book value $ 5,307.4 $ 3,877.8 Current maturities ( 400.5 ) ( 0.5 ) Total long-term debt - reported value $ 4,906.9 $ 3,877.3 Estimated fair value of long-term debt $ 4,762.6 $ 3,798.0 1 Borrowings on the bank line of credit and commercial paper are classified as short-term if we intend to repay within twelve months and as long-term if we have the intent and ability to extend payment beyond twelve months. 2 See Note 5 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 $ 11.4 million and $ 6.2 million of net interest expense for these items for 2024 and 2023, respectively. LINE OF CREDIT AND COMMERCIAL PAPER PROGRAM Our $ 1,600.0 million commercial paper program was established in August 2022 and matures in November 2029. 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 December 31, 2024, we had $ 550.0 million in long-term commercial paper borrowings. Our $ 1,600.0 million unsecured line of credit was amended in November 2024 to extend the maturity date from August 2027 to November 2029. Our line of credit contains covenants customary for an unsecured investment-grade facility. As of December 31, 2024, we were in compliance with the line of credit covenants. Borrowings on the line of credit bear interest, at our option, at either SOFR plus a margin or Truist Bank’s base rate plus a margin. The margins are determined by our credit ratings. Standby letters of credit, which are issued under the line of credit and reduce availability, are charged a fee equal to the margin for SOFR borrowings plus 0.175 %. 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 December 31, 2024, 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 December 31, 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 Part II 82 TERM DEBT All of our $ 5,391.1 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 December 31, 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. 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. In November 2024, we entered into a $ 2,000.0 million unsecured delayed draw term loan which was partially drawn in November 2024 upon the acquisition of Wake Stone Corporation (Wake Stone). Subsequently, the delayed draw term loan balance was fully repaid and terminated in November 2024 using proceeds from the issuance of senior notes as described below. In November 2024, we issued $ 500.0 million of 4.95 % senior notes due 2029, $ 750.0 million of 5.35 % senior notes due 2034 and $ 750.0 million of 5.70 % senior notes due 2054. Total proceeds of $ 1,975.0 million (net of discounts and transaction costs), together with cash on hand, were used to repay the outstanding balance on the $ 2,000.0 million delayed draw term loan and to provide liquidity for acquisitions and debt maturing in 2025. The total scheduled (principal and interest) debt payments, excluding the line of credit, for the five years subsequent to December 31, 2024 are as follows: in millions Total Principal Interest Scheduled Debt Payments (excluding the line of credit) 2025 $ 649.2 $ 400.5 $ 248.7 2026 233.5 0.4 233.1 2027 624.9 400.0 224.9 2028 217.1 0.0 217.1 2029 1,265.3 1,050.0 215.3 STANDBY LETTERS OF CREDIT We provide, in the normal course of business, certain third-party beneficiaries with standby letters of credit to support our obligations to pay or perform according to the requirements of an underlying agreement. Such letters of credit typically have an initial term of one year , renew automatically and can only be modified or canceled with the approval of the beneficiary. Except for $ 9.6 million of letters of credit related to acquisitions completed in 2024, 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 December 31, 2024 are summarized by purpose in the table below: in millions Risk management insurance $ 81.4 Reclamation/restoration requirements 23.4 Total standby letters of credit $ 104.8 Part II 83 NOTE 7: LEASES Our portfolio of nonmineral leases is composed of leases for real estate (including office buildings, aggregates sales yards and terminals, and concrete and asphalt sites) and equipment (including railcars and rail track, barges, and office, plant and mobile equipment). Lease right-of-use (ROU) assets and liabilities reflected on our December 31 balance sheets and the weighted-average lease terms and discount rates are as follows: dollars in millions Classification on the Balance Sheet 2024 2023 Assets Operating lease ROU assets $ 673.2 $ 636.1 Accumulated amortization ( 146.8 ) ( 124.4 ) Operating leases, net Operating lease right-of-use assets, net 526.4 511.7 Finance lease ROU assets 54.7 62.3 Accumulated depreciation ( 24.3 ) ( 20.2 ) Finance leases, net Property, plant & equipment, net 30.4 42.1 Total lease assets $ 556.8 $ 553.8 Liabilities Current Operating Other current liabilities $ 49.3 $ 47.3 Finance Other current liabilities 10.7 12.5 Noncurrent Operating Noncurrent operating lease liabilities 521.4 507.4 Finance Other noncurrent liabilities 9.7 16.6 Total lease liabilities $ 591.1 $ 583.8 Lease Term and Discount Rate Weighted-average remaining lease term (years) Operating leases 18.9 19.5 Finance leases 2.2 2.5 Weighted-average discount rate Operating leases 4.5 % 4.3 % Finance leases 3.2 % 2.4 % Our lease agreements do not contain material residual value guarantees, restrictive covenants or early termination options. In addition to the lease assets and liabilities presented in the table above, we entered into an agreement to lease a terminal in California and expect to have all permits in place associated with all lease commencement options by the second quarter of 2025. Our building leases have remaining noncancelable periods of 0 - 14 years and lease terms (including options to extend) of 1 - 22 years. Key factors in determining the certainty of lease renewals include the location of the building, the value of leasehold improvements and the cost to relocate. Rental payments for certain of our building leases are periodically adjusted for inflation, and this variable component is recognized as expense when incurred. Many of our building leases contain common area maintenance charges which we include in the calculation of our lease liability (the lease consideration is not allocated between the lease and non-lease components). Our aggregates sales yard leases have remaining noncancelable periods of 0 - 24 years and lease terms of 1 - 74 years. The key factor in determining the certainty of lease renewals is the financial impact of extending the lease, including the reserve life of the sourcing aggregates quarry. Certain aggregates sales yard lease agreements include rental payments based on a percentage of sales over contractual levels or the number of shipments received into the sales yard. Variable payments for these sales yards comprise a majority of the overall variable lease cost presented in the table below. Our concrete and asphalt site leases have remaining noncancelable periods of 0 - 15 years and lease terms of 0 - 74 years. The key factor in determining the certainty of lease renewals is the financial impact of extending the lease, including the reserve life of the sourcing aggregates quarry. Rental payments are generally fixed for our concrete and asphalt sites. Our rail (car and track) leases have remaining noncancelable periods of 0 - 15 years and lease terms of 0 - 60 years. Key factors in determining the certainty of lease renewals include the market rental rate for comparable assets and, in some cases, the cost incurred to restore the asset. Rental payments are fixed for our rail leases. The majority of our rail leases contain substitution rights that allow the supplier to replace damaged equipment. Because these rights are generally limited to either replacing railcars or moving our placement on rail track for purposes of repair or maintenance, we do not consider these substitution rights to be substantive and have recorded a lease liability and ROU asset for all leased rail. Part II 84 Our barge leases have remaining noncancelable periods of 3 - 4 years and lease terms of 10 - 18 years. Key factors in determining the certainty of lease renewals include the market rental rate for comparable assets and, in some cases, the cost incurred to restore the asset. Rental payments are fixed. Like our rail leases, our barge leases contain non-substantive substitution rights that are limited to replacing barges in need of repair or maintenance. Office, plant and mobile equipment leases have remaining noncancelable periods of 0 - 5 years and lease terms of 0 - 5 years. The key factor in determining the certainty of lease renewals is the market rental rate for comparable assets. Rental payments are generally fixed for our equipment leases with terms greater than 1 year. The significant majority of our short-term lease cost presented in the table below is derived from office and plant equipment leases with terms of 1 year or less. The components of lease expense for the years ended December 31, 2024, 2023 and 2022 are as follows: in millions 2024 2023 2022 Finance lease cost Depreciation of right-of-use assets $ 9.5 $ 12.8 $ 16.5 Interest on lease liabilities 0.7 0.9 1.2 Operating lease cost 75.6 77.5 85.6 Short-term lease cost 1 46.9 50.4 46.4 Variable lease cost 20.6 23.5 14.4 Sublease income ( 2.8 ) ( 3.4 ) ( 2.9 ) Total lease expense $ 150.5 $ 161.7 $ 161.2 1 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 $ 73.8 million and $ 73.0 million for 2024 and 2023, respectively. Cash paid for finance leases (principal and interest) was $ 13.7 million and $ 31.6 million for 2024 and 2023, respectively. Maturity analysis on an undiscounted basis of our lease liabilities (see Note 12 for mineral lease payments) as of December 31, 2024 is as follows: in millions Operating Leases Finance Leases 2025 $ 73.8 $ 11.2 2026 66.7 6.7 2027 62.2 2.1 2028 55.2 0.8 2029 50.8 0.4 Thereafter 608.7 0.0 Total minimum lease payments $ 917.4 $ 21.2 Lease payments representing interest ( 346.7 ) ( 0.8 ) Present value of future minimum lease payments $ 570.7 $ 20.4 Current obligations under leases ( 49.3 ) ( 10.7 ) Long-term lease obligations $ 521.4 $ 9.7 Part II 85 NOTE 8: ACCRUED ENVIRONMENTAL REMEDIATION COSTS Our Consolidated Balance Sheets as of December 31 include accrued environmental remediation costs (measured on an undiscounted basis) as follows: in millions 2024 2023 Continuing operations $ 47.9 $ 32.6 Retained from former Chemicals business 8.3 8.3 Total accrued environmental remediation costs $ 56.2 $ 40.9 The long-term portion of the accruals noted above is included in other noncurrent liabilities in the accompanying Consolidated Balance Sheets and amounted to $ 42.5 million and $ 28.0 million at December 31, 2024 and 2023, respectively. The $ 14.5 million increase relates to environmental matters associated with divested operations. The short-term portion of these accruals is included in other current liabilities in the accompanying Consolidated Balance Sheets. The accrued environmental remediation costs in continuing operations relate primarily to the former U.S. Concrete, Florida Rock, Tarmac and CalMat facilities acquired in 2021, 2007, 2000 and 1999, respectively. The balances noted above for the former Chemicals business relate to retained environmental remediation costs from the 2003 sale of the Performance Chemicals business and the 2005 sale of the Chloralkali business. Refer to Note 12 for additional discussion of contingent environmental matters. NOTE 9: INCOME TAXES The components of earnings from continuing operations before income taxes are as follows: in millions 2024 2023 2022 Earnings from Continuing Operations before Income Taxes Domestic $ 1,196.1 $ 1,251.0 $ 788.7 Foreign ( 24.0 ) ( 5.9 ) ( 0.6 ) Total $ 1,172.1 $ 1,245.1 $ 788.1 Income tax expense (benefit) from continuing operations consists of the following: in millions 2024 2023 2022 Income Tax Expense (Benefit) from Continuing Operations Current Federal $ 204.7 $ 274.8 $ 85.2 State and local 51.8 64.0 43.6 Foreign 4.8 4.8 4.6 Total $ 261.3 $ 343.6 $ 133.4 Deferred Federal $ 13.6 $ ( 44.1 ) $ 43.4 State and local ( 20.5 ) ( 4.2 ) 3.3 Foreign ( 3.0 ) 4.1 12.9 Total $ ( 9.9 ) $ ( 44.2 ) $ 59.6 Total expense $ 251.4 $ 299.4 $ 193.0 Part II 86 Income tax expense (benefit) differs from the amount computed by applying the federal statutory income tax rate to earnings from continuing operations before income taxes. The sources and tax effects of the differences are as follows: dollars in millions 2024 2023 2022 Income tax expense at the federal statutory tax rate $ 246.1 21.0 % $ 261.5 21.0 % $ 165.5 21.0 % Expense (Benefit) from Income Tax Differences Statutory depletion ( 41.0 ) ( 3.5 %) ( 39.0 ) ( 3.1 %) ( 30.6 ) ( 3.9 %) State and local income taxes, net of federal income tax benefit 51.4 4.4 % 48.7 3.9 % 37.5 4.8 % Nondeductible goodwill 16.2 1.4 % 16.2 1.3 % 10.7 1.4 % Valuation allowance 0.1 0.0 % 10.3 0.8 % 14.5 1.8 % Deferred tax rate remeasurement ( 21.9 ) ( 1.9 %) 0.0 0.0 % 0.0 0.0 % Other, net 0.5 0.0 % 1.7 0.1 % ( 4.6 ) ( 0.6 %) Total income tax expense / Effective tax rate $ 251.4 21.4 % $ 299.4 24.0 % $ 193.0 24.5 % During the fourth quarter of 2024, we determined that the rate at which our deferred tax liabilities will reverse has decreased, largely as a result of changes in our state tax profile from the Wake Stone acquisition. As a result, we remeasured our deferred tax liabilities and recorded a tax benefit of $ 21.9 million. Deferred taxes on the balance sheet result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax liability at December 31 are as follows: in millions 2024 2023 Deferred Tax Assets Operating lease liabilities $ 140.8 $ 139.1 Asset retirement obligations & other reserves 86.6 87.1 State net operating losses 74.7 79.6 Incentive compensation 52.4 57.6 State bonus depreciation 55.7 54.7 Capitalized research expenditures 39.7 25.4 Employee benefits 22.2 22.9 Other 81.8 56.9 Total gross deferred tax assets $ 553.9 $ 523.3 Valuation allowance ( 87.7 ) ( 89.5 ) Total net deferred tax asset $ 466.2 $ 433.8 Deferred Tax Liabilities Property, plant & equipment $ 1,244.8 $ 907.1 Goodwill/other intangible assets 323.2 334.4 Operating lease right-of-use assets 129.8 128.2 Other 104.9 93.0 Total deferred tax liabilities $ 1,802.7 $ 1,462.7 Deferred income tax liability, net $ 1,336.5 $ 1,028.9 The December 31, 2024 net deferred tax liability reflects a $ 307.6 million increase from the prior year. This increase includes a net deferred tax liability of $ 311.2 million related to our acquisition of Wake Stone, reflecting book over tax basis differences, of which $ 328.9 million relates to property, plant and equipment. At December 31, 2024, we have Alabama state NOL carryforward deferred tax assets of $ 68.5 million, against which we have a valuation allowance of $ 50.8 million. $ 4.9 million of the Alabama NOL carryforward expired in 2024, resulting in additional tax expense of $ 1.3 million over the previous amount of valuation allowance recorded. Almost all of the remaining Alabama NOL carryforward would expire between 2025 and 2029 if not utilized. As discussed in Note 12 , in May 2022, Mexican government officials unexpectedly and arbitrarily shut down our Calica operations in Mexico. In 2024, Calica had deferred tax assets (including NOLs) of $ 27.5 million. Although Calica continues to record losses, the devaluation of the Mexican peso during the year resulted in an immaterial change to its deferred tax assets in U.S. dollars. As a result, we recorded a charge to increase the valuation allowance by $ 0.1 million to $ 27.5 million in 2024. The Calica NOL deferred tax asset carryforward of $ 23.3 million would expire between 2032 and 2033 if not utilized. Should the Mexican government lift the shutdown and/or if we are successful in our NAFTA claim, we will reevaluate the need for a valuation allowance against the deferred tax assets. Part II 87 In August 2022, the Inflation Reduction Act (IRA) was signed into law, effective for tax years beginning on or after January 1, 2023. The IRA introduced a corporate alternative minimum tax (CAMT) of 15% applicable to corporations with adjusted financial statement income in excess of $1 billion, as well as certain climate-related tax provisions. We were not subject to CAMT in 2023 or in 2024. The Organization for Economic Co-operation and Development (OECD) has developed a framework to enact a two-pillar solution to address the challenges arising from the digitization of a global economy. Pillar Two introduced a global minimum effective tax rate where multinational groups with consolidated revenue over €750.0 million are subject to a minimum effective tax rate of 15% on income arising in low-tax jurisdictions. Pillar Two legislation has been enacted in certain jurisdictions in which we operate and it was effective on January 1, 2024. Most jurisdictions in which we operate have tax rates in excess of 15%. However, our operations in the Bahamas are not eligible for transitional safe harbor relief, and we have reflected an immaterial amount of Pillar Two tax in our effective tax rate for 2024. We consider the undistributed earnings, if any, related to the investment in our Canadian and Honduran subsidiaries and Canadian investment in its U.S. subsidiary to be indefinitely reinvested; accordingly, no foreign withholding or other income taxes have been provided thereon. Due to complexities in the tax laws, it is not practicable to estimate the amount of deferred income taxes not recorded that are associated with these earnings. We have not, nor do we currently anticipate in the foreseeable future, the need to repatriate funds (other than for the repayment of intercompany loan obligations) to satisfy domestic liquidity needs arising in the ordinary course of business. Changes in our liability for unrecognized tax benefits for the years ended December 31 are as follows: in millions 2024 2023 2022 Unrecognized tax benefits as of January 1 $ 21.0 $ 18.7 $ 10.8 Increases for tax positions related to Prior years 0.8 0.3 4.6 Current year 6.7 4.8 6.6 Decreases for tax positions related to Prior years 0.0 ( 0.3 ) ( 0.2 ) Settlements ( 0.3 ) ( 0.2 ) 0.0 Expiration of applicable statute of limitations ( 3.3 ) ( 2.3 ) ( 3.1 ) Unrecognized tax benefits as of December 31 $ 24.9 $ 21.0 $ 18.7 We classify interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. Interest and penalties recognized as income tax expense were $ 1.5 million, $ 1.5 million and $ 0.8 million in 2024, 2023 and 2022, respectively. The balance of accrued interest and penalties included in our liability for unrecognized tax benefits as of December 31 was $ 4.8 million, $ 3.3 million and $ 1.8 million in 2024, 2023 and 2022, respectively. Our liability for unrecognized tax benefits at December 31 in the table above includes $ 23.7 million, $ 19.8 million and $ 17.6 million in 2024, 2023 and 2022, respectively, that would affect the effective tax rate if recognized. We anticipate no single tax position generating a significant increase or decrease in our liability for unrecognized tax benefits within 12 months of this reporting date. We file income tax returns in U.S. federal, various state and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state or foreign exams by tax authorities for years prior to 2021. As of December 31, 2024, income tax receivables of $ 4.7 million and $ 0.1 million are included in other accounts and notes receivable and other current assets, respectively, in the accompanying Consolidated Balance Sheet. There were similar receivables of $ 1.3 million and $ 0.2 million recorded in other accounts and notes receivable and other current assets, respectively, as of December 31, 2023. Part II 88 NOTE 10: BENEFIT PLANS PENSION PLANS We sponsor two qualified, noncontributory defined benefit pension plans, the Vulcan Materials Company Pension Plan (VMC Pension Plan) and the CMG Hourly Pension Plan (CMG Pension Plan). The VMC Pension Plan has been closed to new entrants since 2007, and benefit accruals ceased in 2005 for hourly participants and 2013 for salaried participants. The CMG Pension Plan is closed to new entrants other than through one small union, and benefits continue to accrue equal to a flat dollar amount for each year of service. In addition to these qualified plans, we sponsor three unfunded, nonqualified pension plans. The projected benefit obligation (PBO) presented in the table below includes $ 32.5 million and $ 39.7 million related to these unfunded, nonqualified pension plans for 2024 and 2023, respectively. The following table sets forth the combined funded status of the plans and their reconciliation with the related amounts recognized in our consolidated financial statements at December 31: in millions 2024 2023 Change in Benefit Obligation Projected benefit obligation at beginning of year $ 693.3 $ 691.1 Service cost 2.3 2.5 Interest cost 32.9 34.0 Actuarial (gain) loss ( 40.2 ) 12.4 Benefits paid ( 47.5 ) ( 46.7 ) Projected benefit obligation at end of year $ 640.8 $ 693.3 Change in Fair Value of Plan Assets Fair value of assets at beginning of year $ 647.9 $ 637.8 Actual return on plan assets ( 2.0 ) 49.4 Employer contribution 8.7 7.4 Benefits paid ( 47.5 ) ( 46.7 ) Fair value of assets at end of year $ 607.1 $ 647.9 Funded status ( 33.7 ) ( 45.4 ) Net amount recognized $ ( 33.7 ) $ ( 45.4 ) Amounts Recognized in the Consolidated Balance Sheets Noncurrent assets $ 8.1 $ 6.5 Current liabilities ( 4.1 ) ( 7.3 ) Noncurrent liabilities ( 37.7 ) ( 44.6 ) Net amount recognized $ ( 33.7 ) $ ( 45.4 ) Amounts Recognized in Accumulated Other Comprehensive Income Net actuarial loss $ 153.1 $ 168.4 Prior service cost 0.0 1.0 Total amount recognized $ 153.1 $ 169.4 The decrease in actuarial loss as of December 31, 2024 was primarily attributable to the increase in discount rates compared with the prior year. The following table sets forth the pension plans for which their accumulated benefit obligation (ABO) or projected benefit obligation (PBO) exceeds the fair value of their respective plan assets at December 31: in millions 2024 2023 Pension plans with ABO in excess of plan assets Accumulated benefit obligation $ 177.5 $ 182.7 Fair value of assets 135.8 140.3 Pension plans with PBO in excess of plan assets Projected benefit obligation $ 177.7 $ 192.2 Fair value of assets 135.8 140.3 Part II 89 The following table sets forth the components of net periodic benefit cost, amounts recognized in other comprehensive income and weighted-average assumptions of the plans at December 31: dollars in millions 2024 2023 2022 Components of Net Periodic Pension Benefit Cost Service cost $ 2.3 $ 2.5 $ 4.0 Interest cost 32.9 34.0 21.1 Expected return on plan assets ( 28.1 ) ( 27.6 ) ( 30.1 ) Amortization of prior service cost 1.0 1.4 1.4 Amortization of actuarial loss 5.1 5.6 4.2 Net periodic pension benefit cost $ 13.2 $ 15.9 $ 0.6 Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income Net actuarial loss (gain) $ ( 10.2 ) $ ( 9.4 ) $ 11.2 Reclassification of prior service cost ( 1.0 ) ( 1.4 ) ( 1.4 ) Reclassification of actuarial loss ( 5.1 ) ( 5.6 ) ( 4.2 ) Amount recognized in other comprehensive income $ ( 16.3 ) $ ( 16.4 ) $ 5.6 Amount recognized in net periodic pension benefit cost and other comprehensive income $ ( 3.1 ) $ ( 0.5 ) $ 6.2 Assumptions Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31 Discount rate — PBO 5.00 % 5.19 % 2.92 % Discount rate — service cost 5.10 % 5.29 % 3.17 % Discount rate — interest cost 4.90 % 5.09 % 2.37 % Expected return on plan assets 4.85 % 4.85 % 4.00 % Weighted-average assumptions used to determine benefit obligation at December 31 Discount rate 5.65 % 5.00 % 5.19 % Plan assets are primarily invested in liability hedging assets which include money market securities, inflation linked debt securities, public corporate debt securities and government debt securities that are actively managed to match the duration of the plans’ liabilities. At each measurement date, we estimate the net asset values and fair values of our pension assets using various valuation techniques. For certain investments, we use the net asset value (NAV) as a practical expedient to estimating fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as described below: Level 1: Quoted prices in active markets for identical assets or liabilities Level 2: Inputs that are derived principally from or corroborated by observable market data Level 3: Inputs that are unobservable and significant to the overall fair value measurement The fair values and net asset values of our pension plan assets at December 31, 2024 and 2023 are in the tables below. The assets in the common/collective trusts and in the private partnerships consist of both return seeking and liability hedging investments. FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2024 in millions Level 1 Level 2 Level 3 Total Asset Category Debt funds $ 0.0 $ 590.2 $ 0.0 $ 590.2 Investments in the fair value hierarchy $ 0.0 $ 590.2 $ 0.0 $ 590.2 Interest in common/collective trusts (at NAV) 13.1 Private partnerships (at NAV) 3.8 Total pension plan assets $ 607.1 Part II 90 FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2023 in millions Level 1 Level 2 Level 3 Total Asset Category Debt funds $ 0.0 $ 634.9 $ 0.0 $ 634.9 Investments in the fair value hierarchy $ 0.0 $ 634.9 $ 0.0 $ 634.9 Interest in common/collective trusts (at NAV) 9.3 Private partnerships (at NAV) 3.7 Total pension plan assets $ 647.9 The following describes the types of investments included in each asset category listed in the tables above and the valuation techniques we used to determine the fair values or net asset values as of December 31, 2024 and 2023. The debt funds category consists of U.S. federal, state and local government debt securities, corporate debt securities, foreign government debt securities, asset-backed securities and derivatives. The fair values of U.S. government and corporate debt securities are based on current market rates and credit spreads for debt securities with similar maturities. The fair values of debt securities issued by foreign governments are based on prices obtained from broker/dealers and international indices. The fair values of asset-backed securities are priced using prepayment speed and spread inputs that are sourced from the new issue market. Derivatives are valued using pricing models based on the prevailing forward exchange rate of the underlying currencies taking into account the creditworthiness of the counterparties. Common/collective trust fund investments consist of an index fund investing primarily in domestic equities and a short-term investment fund for highly liquid, short-term debt securities. Investments are valued at the NAV of units of a bank collective trust. The NAV is based on the fair value of the underlying investments held by the fund less its liabilities. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported NAV. The private partnerships category consists primarily of secondary private equity funds and mezzanine debt funds. The NAV of these investments has been estimated based on methods employed by the general partners, including reference to third-party transactions and valuations of comparable companies. Total employer contributions to the pension plans are presented below: in millions Pension Employer Contributions 2022 $ 7.8 2023 7.4 2024 8.7 2025 (estimated) 13.8 For our qualified pension plans, we made a contribution of $ 2.0 million in 2024 and made no contributions during 2023 and 2022. We anticipate making a $ 9.6 million contribution to our qualified pension plans in 2025. For our nonqualified pension plans, we contributed $ 6.7 million , $ 7.4 million and $ 7.8 million during 2024, 2023 and 2022, respectively, and expect to contribute $ 4.2 million during 2025. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: in millions Pension Estimated Future Benefit Payments 2025 $ 48.0 2026 48.5 2027 49.6 2028 49.6 2029 50.0 2030-2034 247.5 We contribute to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements for union-represented employees. The risks of participating in multiemployer plans differ from single employer plans as follows: ▪ assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers ▪ if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers ▪ if we cease to have an obligation to contribute to one or more of the multiemployer plans to which we contribute, we may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability Part II 91 None of the multiemployer pension plans that we participate in are individually significant. Our contributions to individual multiemployer pension plans did not exceed 5 % of the plans’ total contributions in the three years ended December 31, 2024, 2023 and 2022. Total contributions to multiemployer pension plans were $ 30.2 million, $ 36.6 million and $ 48.6 million in 2024, 2023 and 2022, respectively. As of December 31, 2024, a total of 14.7 % of our domestic hourly labor force was covered by collective-bargaining agreements. Of such employees covered by collective-bargaining agreements, 48.8 % were covered by agreements that expire in 2025. We also employed 248 union employees in Mexico who are covered by a collective-bargaining agreement that will expire in 2025. None of our union employees in Mexico participate in multiemployer pension plans. In addition to the pension plans noted above, we had one unfunded supplemental retirement plan as of December 31, 2024 and 2023. The accrued costs for the supplemental retirement plan were $ 0.5 million and $ 0.4 million at December 31, 2024 and 2023, respectively. POSTRETIREMENT PLANS In addition to pension benefits, we provide certain healthcare and life insurance benefits for some retired employees. Our employer portion of the medical coverage cost for the postretirement healthcare plan is capped. Substantially all of our salaried employees and, where applicable, certain of our hourly employees may become eligible for these benefits if they reach a qualifying age and meet certain service requirements. Generally, Company-provided healthcare benefits end when covered individuals become eligible for Medicare benefits, become eligible for other group insurance coverage or reach age 65 (whichever occurs first). The following table sets forth the combined funded status of the plans and their reconciliation with the related amounts recognized in our consolidated financial statements at December 31: in millions 2024 2023 Change in Benefit Obligation Projected benefit obligation at beginning of year $ 44.2 $ 41.8 Service cost 2.2 2.0 Interest cost 2.2 2.0 Actuarial (gain) loss ( 3.0 ) 3.6 Benefits paid ( 3.4 ) ( 5.2 ) Projected benefit obligation at end of year $ 42.2 $ 44.2 Change in Fair Value of Plan Assets Fair value of assets at beginning of year $ 0.0 $ 0.0 Actual return on plan assets 0.0 0.0 Fair value of assets at end of year $ 0.0 $ 0.0 Funded status $ ( 42.2 ) $ ( 44.2 ) Net amount recognized $ ( 42.2 ) $ ( 44.2 ) Amounts Recognized in the Consolidated Balance Sheets Current liabilities $ ( 4.7 ) $ ( 5.2 ) Noncurrent liabilities ( 37.5 ) ( 39.0 ) Net amount recognized $ ( 42.2 ) $ ( 44.2 ) Amounts Recognized in Accumulated Other Comprehensive Income Net actuarial gain $ ( 15.0 ) $ ( 12.7 ) Prior service cost 10.2 11.7 Total amount recognized $ ( 4.8 ) $ ( 1.0 ) The increase in actuarial gain as of December 31, 2024 was primarily attributable to the increase in discount rates and favorable claims experience for the plans compared with the prior year. Part II 92 The following table sets forth the components of net periodic benefit cost, amounts recognized in other comprehensive income, weighted-average assumptions and assumed trend rates of the plans at December 31: dollars in millions 2024 2023 2022 Components of Net Periodic Postretirement Benefit Cost Service cost $ 2.2 $ 2.0 $ 2.2 Interest cost 2.2 2.0 0.9 Amortization of prior service cost (credit) 1.4 1.4 ( 0.3 ) Amortization of actuarial gain ( 0.7 ) ( 1.5 ) ( 1.3 ) Net periodic postretirement benefit cost $ 5.1 $ 3.9 $ 1.5 Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income Net actuarial (gain) loss $ ( 3.0 ) $ 3.6 $ ( 2.4 ) Reclassification of prior service (cost) credit ( 1.4 ) ( 1.4 ) 0.3 Reclassification of actuarial gain 0.7 1.5 1.3 Amount recognized in other comprehensive income $ ( 3.7 ) $ 3.7 $ ( 0.8 ) Amount recognized in net periodic postretirement benefit cost and other comprehensive income $ 1.4 $ 7.6 $ 0.7 Assumptions Assumed Healthcare Cost Trend Rates at December 31 Healthcare cost trend rate assumed for next year (Pre-65/Post-65) 8.45 % / n/a 10.20 % / n/a 7.04 % / n/a Rate to which the cost trend rate gradually declines 4.50 % 4.50 % 4.50 % Year that the rate reaches the rate it is assumed to maintain 2035 2031 2030 Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31 Discount rate — PBO 4.90 % 5.09 % 2.59 % Discount rate — service cost 4.96 % 5.15 % 2.89 % Discount rate — interest cost 4.85 % 5.03 % 2.06 % Weighted-average assumptions used to determine benefit obligation at December 31 Discount rate 5.51 % 4.90 % 5.08 % Total employer contributions to the postretirement plans are presented below: in millions Postretirement Employer Contributions 2022 $ 4.9 2023 5.2 2024 3.4 2025 (estimated) 4.7 The employer contributions shown above are equal to the cost of benefits during the year. The plans are not funded and are not subject to any regulatory funding requirements. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: in millions Postretirement Estimated Future Benefit Payments 2025 $ 4.7 2026 4.9 2027 5.1 2028 5.1 2029 5.0 2030–2034 21.4 Part II 93 Contributions by participants to the postretirement benefit plans for the years ended December 31 are as follows: in millions Postretirement Participants Contributions 2022 $ 2.0 2023 1.5 2024 1.7 PENSION AND OTHER POSTRETIREMENT BENEFITS ASSUMPTIONS Each year, we review our assumptions for discount rates (used for PBO, service cost, and interest cost calculations), the per capita cost of healthcare benefits and the expected return on plan assets. Due to plan changes made in 2013, annual pay increases do not materially impact plan obligations. We use a high-quality bond full yield curve approach (specific spot rates for each annual expected cash flow) to establish the discount rates at each measurement date. At December 31, 2024, the discount rates used were as follows: ▪ PBO for various plans – ranged from 5.25 % to 5.73 % (December 31, 2023 ranged from 4.77 % to 5.05 %) ▪ Service cost – weighted average of 5.10 % and 4.96 % for our pension plans and our other postretirement plans, respectively (2023 figures were 5.29 % and 5.15 %, respectively) ▪ Interest cost – weighted average of 4.90 % and 4.85 % for our pension plans and our other postretirement plans, respectively (2023 figures were 5.09 % and 5.03 %, respectively) In selecting the rate of increase in the per capita cost of covered healthcare benefits, we consider past performance and forecast of future healthcare cost trends. At December 31, 2024 , our assumed rate of increase in the per capita cost of covered healthcare benefits was 8.45 % for pre-65 coverage, with rates decreasing each year until reaching 4.50 % in 2035 and remaining level thereafter. Our expected return on plan assets is a long-term view based on our current asset allocation and a judgment informed by consultation with our retirement plans’ consultant and our pension plans’ actuary. For 2024 and 2023, the expected return on plan assets used to measure plan benefit costs was set at 4.85 % and 4.85 %, respectively. For 2025, the preliminary expected return on plan assets is 5.90 %. DEFINED CONTRIBUTION PLANS In addition to our pension and postretirement plans, we sponsor seven defined contribution plans. Substantially all salaried and non-union hourly employees are eligible to be covered by one of these plans. Under these plans, we match employees’ eligible contributions at established rates. Expense recognized in connection with these matching obligations totaled $ 87.5 million, $ 79.2 million and $ 68.2 million in 2024, 2023 and 2022, respectively. Part II 94 NOTE 11: INCENTIVE PLANS SHARE-BASED COMPENSATION PLANS Our 2016 Omnibus Long-term Incentive Plan (Plan) authorizes the granting of performance shares, restricted shares, Stock-Only Stock Appreciation Rights (SOSARs) and other types of share-based awards to key salaried employees and nonemployee directors. The maximum number of shares that may be issued under the Plan is 8,000,000 , of which 4,396,033 shares remain under this authorization as of December 31, 2024. PERFORMANCE SHARES — Each performance share unit is equal to and paid in one share of our common stock but carries no voting rights. The number of units ultimately paid for performance share awards may range from 0 % to 200 % of the number of units awarded on the date of grant. Payment is based upon the outcome of performance and/or market conditions. Awards vest on December 31 of the third year after date of grant. Vesting is accelerated upon death, disability, or change of control and the awards become non-forfeitable upon reaching retirement age — all as defined in the award agreement. Nonvested units are forfeited upon termination for any other reason. Expense provisions referable to performance share awards amounted to $ 30.4 million, $ 40.1 million and $ 23.2 million in 2024, 2023 and 2022, respectively. The fair value of performance shares is estimated as of the date of grant using a Monte Carlo simulation model. The following table summarizes the activity for nonvested performance share units during the year ended December 31, 2024: Number of Shares Weighted-Average Grant Date Fair Value Performance Shares Nonvested at January 1, 2024 227,472 $ 180.13 Granted 110,240 247.00 Vested ( 105,541 ) 185.31 Canceled/forfeited ( 8,625 ) 207.00 Nonvested at December 31, 2024 223,546 $ 209.62 During 2023 and 2022, the weighted-average grant date fair value of performance shares granted was $ 175.46 and $ 185.31 , respectively. The aggregate values for distributed performance share awards are based on the closing price of our common stock as of the distribution date. The aggregate values of distributed performance shares for the years ended December 31 are as follows: in millions 2024 2023 2022 Aggregate value of distributed performance shares $ 45.3 $ 24.8 $ 33.4 RESTRICTED SHARES — Each restricted share unit is equal to and paid in one share of our common stock but carries no voting rights. Awards vest on the third anniversary of the grant date. Vesting is accelerated upon reaching retirement age, death, disability, or change of control, all as defined in the award agreement. Nonvested units are forfeited upon termination for any other reason. Expense provisions referable to restricted share awards amounted to $ 15.1 million, $ 16.5 million and $ 11.6 million in 2024, 2023 and 2022, respectively. The fair value of restricted shares is estimated as of the date of grant based on the stock price adjusted for dividends foregone (for restricted share units that do not accrue dividends). The following table summarizes the activity for nonvested restricted share units during the year ended December 31, 2024: Number of Shares Weighted-Average Grant Date Fair Value Restricted Stock Units Nonvested at January 1, 2024 236,673 $ 175.29 Granted 71,087 247.00 Vested ( 61,320 ) 166.42 Canceled/forfeited ( 10,864 ) 200.35 Nonvested at December 31, 2024 235,576 $ 198.08 During 2023 and 2022, the weighted-average grant date fair value of restricted shares granted was $ 175.46 and $ 184.49 , respectively. Part II 95 The aggregate values for distributed restricted share awards are based on the closing price of our common stock as of the distribution date. The aggregate values of distributed restricted shares for the years ended December 31 are as follows: in millions 2024 2023 2022 Aggregate value of distributed restricted shares $ 15.6 $ 11.1 $ 15.7 STOCK-ONLY STOCK APPRECIATION RIGHTS (SOSARs) — SOSARs granted have an exercise price equal to the market value of our underlying common stock on the date of grant. The SOSARs vest ratably over 3 years and expire 10 years subsequent to the date of grant. Vesting is accelerated upon reaching retirement age, death, disability, or change of control, all as defined in the award agreement. Nonvested awards are forfeited upon termination for any other reason. The fair value of SOSARs is estimated as of the date of grant using the Black-Scholes option pricing model. Compensation cost for SOSARs is based on this grant date fair value and is recognized for awards that ultimately vest. The following table presents the weighted-average fair value and the weighted-average assumptions used in estimating the fair value of grants during the years ended December 31: 2024 2023 2022 SOSARs Fair value $ 86.32 $ 72.39 $ 60.57 Risk-free interest rate 1.94 % 3.90 % 2.02 % Dividend yield 0.84 % 0.79 % 0.77 % Volatility 28.81 % 28.88 % 26.68 % Expected term (years) 9.0 9.0 9.0 The risk-free interest rate is based on the yield at the date of grant of a U.S. Treasury security with a maturity period approximating the SOSARs expected term. The dividend yield assumption is based on our historical dividend payouts adjusted for current expectations of future payouts. The volatility assumption is based on the historical volatility and expectations about future volatility of our common stock over a period equal to the SOSARs expected term. The expected term is based on historical experience and expectations about future exercises and represents the period of time that SOSARs granted are expected to be outstanding. A summary of our SOSAR activity as of December 31, 2024 and changes during the year are presented below: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (in millions) SOSARs Outstanding at January 1, 2024 533,457 $ 134.35 Granted 60,730 253.43 Exercised ( 168,420 ) 106.43 Forfeited or expired 0 0.00 Outstanding at December 31, 2024 425,767 $ 162.38 5.83 $ 40.9 Exercisable at December 31, 2024 303,269 $ 140.10 4.76 $ 35.9 The aggregate intrinsic values in the table above represent the total pretax intrinsic value (the difference between our stock price on the last trading day of 2024 and the exercise price, multiplied by the number of in-the-money SOSARs) that would have been received by the option holders had all SOSARs been exercised on December 31, 2024. These values change based on the fair market value of our common stock. The aggregate intrinsic values of SOSARs exercised for the years ended December 31 are as follows: in millions 2024 2023 2022 Aggregate intrinsic value of SOSARs exercised $ 27.9 $ 25.1 $ 1.9 The following table presents cash received and tax benefit realized from SOSAR exercises and compensation cost recorded referable to SOSARs for the years ended December 31: in millions 2024 2023 2022 SOSARs Cash received from exercises $ 0.0 $ 0.0 $ 0.0 Tax benefit from exercises 5.7 6.0 0.4 Compensation cost 5.1 4.0 4.0 Part II 96 NONEMPLOYEE DIRECTOR AWARDS — In addition to the share-based compensation plans for employees discussed above, we issue a limited number of stock units to our nonemployee directors annually. Expense provisions referable to nonemployee director stock units amounted to $ 2.8 million, $ 2.6 million and $ 2.4 million in 2024, 2023 and 2022, respectively. CASH-BASED COMPENSATION PLANS We have incentive plans under which cash awards may be made annually. Expense provisions under these plans referable to awards to officers and certain employees amounted to $ 58.8 million, $ 77.3 million and $ 42.8 million in 2024, 2023 and 2022, respectively. NOTE 12: COMMITMENTS AND CONTINGENCIES We have commitments in the form of unconditional purchase obligations as of December 31, 2024. These include commitments for the purchase of property, plant & equipment of $ 78.2 million and commitments for noncapital purchases of $ 146.8 million. These commitments are due as follows: in millions Unconditional Purchase Obligations Property, Plant & Equipment 2025 $ 78.2 Thereafter 0.0 Total $ 78.2 Noncapital (primarily transportation and electricity contracts) 2025 $ 42.4 2026–2027 56.1 2028–2029 42.3 Thereafter 6.0 Total $ 146.8 Expenditures for noncapital purchases totaled $ 117.6 million, $ 120.8 million and $ 96.7 million in 2024, 2023 and 2022, respectively. We have commitments in the form of minimum royalties under mineral leases as of December 31, 2024 in the amount of $ 237.6 million, due as follows: in millions Mineral Leases Minimum Royalties 2025 $ 27.5 2026–2027 43.5 2028–2029 29.9 Thereafter 136.7 Total $ 237.6 Expenditures for royalties under mineral leases totaled $ 118.6 million, $ 113.6 million and $ 109.1 million in 2024, 2023 and 2022, respectively. Certain of our aggregates reserves are burdened by volumetric production payments (nonoperating interest) as described in Note 2 . 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 described in Note 1 under the caption "Claims and Litigation Including Self-Insurance", our net liabilities for our self-insurance program totaled $ 119.6 million as of December 31, 2024. As summarized by purpose in Note 6 , our standby letters of credit totaled $ 104.8 million as of December 31, 2024. As outlined in Note 7 , our present value of future minimum (nonmineral) lease payments totaled $ 591.1 million as of December 31, 2024. As described in Note 9 , our liability for unrecognized tax benefits is $ 24.9 million as of December 31, 2024. As described in Note 17 , our asset retirement obligations totaled $ 427.4 million as of December 31, 2024. Part II 97 LITIGATION AND ENVIRONMENTAL MATTERS We are subject to occasional governmental proceedings and orders pertaining to occupational safety and health or to protection of the environment, such as proceedings or orders relating to noise abatement, air emissions or water discharges. As part of our continuing program of stewardship in safety, health and environmental matters, we have been able to resolve such proceedings and to comply with such orders without any material adverse effects on our business. We have received notices from the United States Environmental Protection Agency (EPA) or similar state or local agencies that we are considered a potentially responsible party (PRP) at a limited number of sites under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) or similar state and local environmental laws. Generally, we share the cost of remediation at these sites with other PRPs or alleged PRPs in accordance with negotiated or prescribed allocations. There is inherent uncertainty in determining the potential cost of remediating a given site and in determining any individual party's share in that cost. As a result, estimates can change substantially as additional information becomes available regarding the nature or extent of site contamination, remediation methods, other PRPs and their probable level of involvement, and actions by or against governmental agencies or private parties. We have reviewed the nature and extent of our involvement at each Superfund site as well as potential obligations arising under other federal, state and local environmental laws. While ultimate resolution and financial liability is uncertain at a number of the sites, in our opinion, based on information currently available, the ultimate resolution of claims and assessments related to these sites will not have a material effect on our consolidated results of operations, financial position or cash flows, although amounts recorded in a given period could be material to our results of operations or cash flows for that period. Amounts accrued for environmental matters are presented in Note 8 . We are a defendant in various lawsuits in the ordinary course of business. It is not possible to determine with precision the outcome, or the amount of liability, if any, under these lawsuits, especially where the cases involve possible jury trials with as yet undetermined jury panels. In addition to these lawsuits in which we are involved in the ordinary course of business, certain other material legal proceedings are specifically described below. ▪ LOWER PASSAIC RIVER STUDY AREA (DISCONTINUED OPERATIONS and SUPERFUND SITE) — The Lower Passaic River Study Area is part of the Diamond Shamrock Superfund Site in New Jersey. Vulcan and approximately 70 other companies are parties (collectively the Cooperating Parties Group, CPG) to a May 2007 Administrative Order on Consent (AOC) with the EPA to perform a Remedial Investigation/Feasibility Study (draft RI/FS) of the lower 17 miles of the Passaic River (River). The draft RI/FS was submitted recommending a targeted hot spot remedy; however, the EPA issued a record of decision (ROD) in March 2016 that calls for a bank-to-bank dredging remedy for the lower 8 miles of the River. The EPA estimates that the cost of implementing this proposal is $ 1.38 billion. In September 2016, the EPA entered into an Administrative Settlement Agreement and Order on Consent with Occidental Chemical Corporation (Occidental) in which Occidental agreed to undertake the remedial design for this bank-to-bank dredging remedy and to reimburse the United States for certain response costs. Efforts to investigate and remediate the River have been underway for many years and have involved hundreds of entities that have had operations on or near the River at some point during the past several decades. We formerly owned a chemicals operation near the mouth of the River, which was sold in 1974. The major risk drivers in the River have been identified to include dioxins, PCBs, DDx and mercury. We did not manufacture any of these risk drivers and have no evidence that any of these were discharged into the River by Vulcan. In August 2017, the EPA informed certain members of the CPG, including Vulcan and others, that it planned to use the services of a third-party allocator with the expectation of offering cash-out settlements to some parties in connection with the bank-to-bank remedy identified in the ROD. This voluntary allocation process established an impartial third-party expert recommendation for use by the government and the participants as the basis of possible settlements, including settlements related to future remediation actions. The final allocation recommendations, which are subject to confidentiality provisions, were submitted to the EPA for its review and consideration in late December 2020. Certain PRPs, including Vulcan, thereafter received a joint confidential settlement demand from the EPA/Department of Justice (DOJ). Vulcan and certain of the other PRPs that received the joint confidential settlement demand (the Settling Defendants) reached an agreement to settle with the EPA/DOJ and negotiated a Consent Decree. The court granted the motion to enter the Consent Decree in December 2024. Vulcan’s portion of the settlement is within the immaterial loss recorded for this matter in 2015. In July 2018, Vulcan, along with more than 100 other defendants, was sued by Occidental in United States District Court for the District of New Jersey, Newark Vicinage. Occidental is seeking cost recovery and contribution under CERCLA for costs related to the River. This lawsuit is currently stayed. In another related proceeding, Occidental filed a lawsuit in March 2023 against Vulcan and 39 other defendants in United States District Court for the District of New Jersey, Newark Vicinage seeking cost recovery and contribution under CERCLA for costs related to the upper 9 miles of the River. It is unknown at this time how the settlement and approval of the Consent Decree with the EPA/DOJ would affect the Occidental lawsuits. ▪ TEXAS BRINE MATTER (DISCONTINUED OPERATIONS) — During operation of its former Chemicals Division, Vulcan leased the right to mine salt out of an underground salt dome formation in Assumption Parish, Louisiana from 1976 - 2005. Throughout that period, Texas Brine Company (Texas Brine) was the operator contracted by Vulcan to mine and deliver the salt as brine. We sold our Chemicals Division in 2005 and transferred our rights and interests related to the salt and mining operations to the purchaser, a subsidiary of Occidental Chemical Company (Occidental), and we have had no association with the leased premises or Texas Brine since that time. In August 2012, a sinkhole developed in the vicinity of the Texas Brine mining operations. Numerous lawsuits were filed thereafter in state court in Assumption Parish, Louisiana. Other lawsuits, including class action litigation, were filed in the United States District Court for the Eastern District of Louisiana in New Orleans. Part II 98 In these lawsuits, the main plaintiffs sued numerous defendants, including Texas Brine, Occidental and Vulcan, alleging various damages including, but not limited to, property damages; a claim by the State of Louisiana for response costs and civil penalties; physical damages to oil and gas pipelines and storage facilities (pipelines); and business interruption losses. All such claims have been settled except for the claims by the State of Louisiana. Our insurers to date have funded these settlements in excess of our self-insured retention amount. Additionally, Texas Brine, Occidental and Vulcan sued each other in various state and federal court forums. Vulcan and Occidental have since dismissed all of their claims against one another; Texas Brine and Occidental have settled their claims against each other; and Texas Brine’s and Vulcan’s claims against each other are pending in state and federal court. In general, Texas Brine alleges that the sinkhole was caused, in whole or in part, by our negligent or fraudulent actions or failure to act; that we breached the salt lease with Occidental, as well as an operating agreement and related contracts with Texas Brine; that we were strictly liable for certain property damages in our capacity as a former lessee of the salt lease; and that we violated the agreement under which we sold our Chemicals Division to Occidental. Texas Brine’s claims against Vulcan include claims for past and future response costs, lost profits and investment costs, indemnity payments, attorneys’ fees, other litigation costs, and judicial interests. Texas Brine also recently filed a lawsuit against Vulcan seeking indemnity for potential exposure Texas Brine may have to Occidental in the related arbitration, the State of Louisiana, and for ongoing and future Louisiana regulatory matters. In August 2022, we removed the lawsuit to federal court. The state court held a joint bench trial (judge only) in 2017 in three cases brought by pipeline companies claiming damages to their facilities as a result of the sinkhole. This “Phase 1” trial was limited in scope to comparative fault and liability for causing the sinkhole. In December 2017, the trial court issued a ruling allocating fault as follows: Occidental 50 %, Texas Brine (and its wholly-owned subsidiary) 35 % and Vulcan 15 %. In December 2020, the Louisiana Court of Appeal, First Circuit reversed the judgment in part in one of the three jointly tried cases, allocating 55 % of the fault to Texas Brine (and its wholly-owned subsidiary); 30 % to Occidental; and affirming the 15 % fault allocation to Vulcan. In May 2021 and April 2022, the Court of Appeal issued judgments in the other two pipeline cases, adopting the same fault allocation. The Louisiana Supreme Court has declined to review the judgments, resulting in final judgments regarding fault allocations in those matters. In the second quarter of 2022, we recorded an immaterial loss related to the claims brought by Texas Brine. In August 2022, Vulcan and Texas Brine commenced a joint “Phase 2” bench trial in the same three pipeline cases where fault was allocated. Prior to trial, the trial court granted various motions by Vulcan seeking dismissal of Texas Brine’s contract-based claims and hundreds of millions of dollars in alleged damages. Thus, the Phase 2 trial addressed the claims that remained pending between Texas Brine and Vulcan after that motion practice. During the Phase 2 trial, Texas Brine and Vulcan reached a negotiated joint stipulation as to the amount of Texas Brine’s damages for its surviving tort claims at issue in the trial. After applying Vulcan’s 15 % fault allocation, Vulcan’s stipulated financial responsibility for the damages at issue in the trial is within the immaterial loss recorded during the second quarter of 2022. I n December 2022, the trial court entered a judgment in the pipeline cases reflecting this stipulation. Texas Brine moved to assess all trial costs against Vulcan. Texas Brine and Vulcan thereafter reached a settlement, wherein Vulcan agreed to pay a portion of Texas Brine's trial costs, the amount of which was within the remaining immaterial loss recorded in the second quarter of 2022. The December 2022 Phase 2 judgment did not address numerous of Texas Brine’s claims seeking hundreds of millions of dollars in damages that were dismissed prior to trial. Texas Brine appealed those judgments. In December 2024, the Court of Appeal affirmed the dismissal of most of those damage claims but remanded the dispute to the District Court for further adjudication of an indemnity claim under one of the agreements. We cannot at this time reasonably estimate the range of liability, if any, that could result from Texas Brine's indemnity claim or should the Louisiana Supreme Court exercise jurisdiction to review any of the December 2024 appellate court rulings. At this time, we also cannot reasonably estimate a range of liability pertaining to the claims brought by the State of Louisiana. ▪ 1,1,1-TRICHLOROETHANE LITIGATION (DISCONTINUED OPERATIONS) — During the operation of our former Chemicals Division, which was divested to Occidental in 2005, Vulcan manufactured a chlorinated solvent known as 1,1,1-trichloroethane. Vulcan faces liabilities related to 1,1,1-trichloroethane stabilized with 1,4-dioxane ("TCA"). We are one of the defendants in cases filed in both state and federal courts, including one case filed by the State of New Jersey. According to the various complaints, the plaintiffs seek damages including, but not limited to, unspecified compensatory damages associated with the remediation of water wells allegedly contaminated with 1,4-dioxane, natural resource damages, disgorgement of profits from the sale of TCA, punitive damages, as well as penalties and attorney's fees under various statutes. We will vigorously defend these cases on substantive and procedural grounds. At this time, we cannot determine the likelihood of loss, or reasonably estimate a range of loss, if any, pertaining to the above-referenced cases. ▪ HEWITT LANDFILL MATTER (SUPERFUND SITE) — In September 2015, the Los Angeles Regional Water Quality Control Board (RWQCB) issued a Cleanup and Abatement Order directing Calmat Co., a Vulcan subsidiary (hereinafter "Vulcan") to assess, monitor, cleanup, and abate wastes that have been discharged to soil, soil vapor, and/or groundwater at the former Hewitt Landfill in Los Angeles. Following an onsite and offsite investigation and pilot scale testing, the RWQCB approved a corrective action under a Cleanup and Abatement Order (CAO) to include leachate recovery, storm water capture and conveyance improvements, and a groundwater pump, treat and reinjection system. Certain on-site source control measures have been implemented, and the treatment system is fully operational. In October 2024, the RWQCB made a request under the CAO for a work plan to install additional monitoring wells and optimize and expand the existing on-site remediation system. This request complements expansion discussions with the EPA and other stakeholders, as part of the Alternative Design Work Plan (ADWP) which was submitted in January 2025. Currently-anticipated costs of these on-site source control activities, including those associated with this work plan, have been fully accrued. Part II 99 We are also engaged in an ongoing dialogue with the EPA, Honeywell, and the Los Angeles Department of Water and Power (LADWP) regarding the potential contribution of the Hewitt Landfill to groundwater contamination in the North Hollywood Operable Unit (NHOU) of the San Fernando Valley Superfund Site. The EPA and Vulcan entered into an AOC and Statement of Work having an effective date of September 2017 for the design of two extraction wells south of the Hewitt Landfill to protect the North Hollywood West (NHW) well field located within the NHOU. In November 2017, we submitted a Pre-Design Investigation (PDI) Work Plan to the EPA, which sets forth the activities and schedule for collection of data in support of our evaluation of the need for an offsite remedy. In addition, this evaluation was expanded as part of the PDI to include the evaluation of a remedy in light of LADWP’s Rinaldi-Toluca (RT) wellfield project. PDI investigative activities were completed between the first and third quarters of 2018, and in December 2018 we submitted a Draft PDI Evaluation Report to the EPA. The Draft PDI Evaluation Report summarizes data collection activities conducted pursuant to the Draft PDI Work Plan and provides model updates and evaluation of remediation alternatives for offsite areas. The EPA provided a final set of comments to the Draft PDI Evaluation Report in October 2020. The final set of comments included a request that Vulcan revise and develop a final PDI Evaluation Report. The final comments further provided 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 record of decision as it relates to the Hewitt Landfill. In December 2020, we submitted the Final PDI Evaluation Report, which included responses to the EPA’s comments. At the EPA's request, we submitted a Supplemental Report in March 2023 and an 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 option for addressing contamination in offsite areas, instead of the two wells proposed by the EPA. In conjunction with its review of the Supplemental Report, the EPA held an initial meeting with stakeholders, including LADWP, in November 2023 and has requested additional meetings to determine a path forward. 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 is building originated from the Hewitt Landfill and that Vulcan should fund some portion of the costs that Honeywell has incurred and will incur in developing and implementing the second interim remedy. During the fourth quarter of 2021, we completed a partial settlement with Honeywell related to certain of the costs that Honeywell has incurred for an immaterial amount. In March 2023, Honeywell filed a lawsuit against Vulcan and a third party alleging that Honeywell has incurred more than $ 11 million in costs to resolve its liability to the EPA and that it estimates that it will spend in excess of $ 100 million to construct and operate its water treatment system. Honeywell seeks an "equitable share of necessary response costs" from Vulcan and the third party, which claims indemnity from Vulcan. 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. Based on this technical information and recent settlement discussions, we have accrued an immaterial amount for our contribution of costs anticipated to be incurred by Honeywell. This work is also intended to assist in identification of other PRPs that may have contributed to groundwater contamination in the area. Further, LADWP is constructing two new production and treatment facilities at city wellfields located near the Hewitt Landfill — the NHW wellfield and the RT wellfield (also referred to as the NHW treatment system and North Hollywood Central (NHC) treatment system, respectively). LADWP has alleged that the Hewitt Landfill is one of the primary sources of contamination at the NHW treatment system and one of the sources of contamination at the NHC treatment system. According to information available on the California State Water Resources Control Board (SWRCB) website, the capital cost of the NHW treatment system is estimated at $ 92 million, and the capital cost of the NHC treatment system is estimated at $ 245 million. The NHW system commenced operation in late 2024, and the NHC system is expected to commence operation in 2025. Both systems will incur costs for operation and maintenance. LADWP has applied for and received substantial funding to contribute to both treatment systems from grants of Proposition 1 bond funding from the SWRCB. According to information available on the SWRCB website, the bond money obtained for the NHW treatment system is $ 46 million, and the bond money obtained for the NHC treatment system is $ 95 million. We anticipate continued discussions with LADWP regarding its potential claims. In conjunction with those discussions, we are engaging in further efforts to gather and analyze records and data in order to assess the extent of possible contribution by the Hewitt Landfill to the groundwater contamination in the area, consistent with the parallel request by the EPA, and the reasonableness of LADWP’s remediation efforts. This work is also intended to assist in identification of other PRPs that may have contributed to groundwater contamination in the area of the NHW and RT wellfields. Together, these efforts will allow us to analyze our anticipated equitable contribution to LADWP’s remediation efforts. Among other factors, we anticipate that any equitable contribution should take into account the on-site source control and other measures implemented by Vulcan at the former Hewitt Landfill, the relative contribution and duration of any contaminants originating from the Hewitt Landfill to the LADWP systems, and the cost effectiveness of the LADWP systems. At this time, we cannot reasonably estimate a range of a loss to Vulcan pertaining to LADWP’s potential contribution claim. ▪ NAFTA ARBITRATION — In September 2018, our subsidiary Legacy Vulcan, LLC (Legacy Vulcan), on its own behalf, and on behalf of our Mexican subsidiary Calizas Industriales del Carmen, S.A. de C.V. (Calica), served the United Mexican States (Mexico) a Notice of Intent to Submit a Claim to Arbitration under Chapter 11 of the North American Free Trade Agreement (NAFTA). This NAFTA claim relates to the treatment of a portion of our quarrying operations in Quintana Roo, Mexico arising from, among other measures, Mexico’s failure to comply with a legally binding zoning agreement and relates to other unfair, arbitrary and capricious actions by Mexico’s environmental enforcement agency. We assert that these actions are in breach of Mexico’s international obligations under NAFTA and international law. Part II 100 As required by Article 1118 of NAFTA, we sought to settle this dispute with Mexico through consultations. Notwithstanding our good faith efforts to resolve the dispute amicably, we were unable to do so and filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes (ICSID) in December 2018. In January 2019, ICSID registered our Request for Arbitration. A hearing on the merits took place in July 2021. While we awaited the final resolution from the tribunal, we continued to engage with government officials to pursue an amicable resolution of the dispute. On May 5, 2022, Mexican government officials unexpectedly and arbitrarily shut down Calica’s remaining operations in Mexico. On May 8, 2022, Legacy Vulcan filed an application in the NAFTA arbitration seeking provisional measures and leave to file an ancillary claim in connection with this latest shutdown (see Part I I , Item 7 " Management’s Discussion and Analysis of Financial Condition and Results of Operations " under the caption "Known Trends or Uncertainties"). In July 2022, the NAFTA arbitration tribunal granted Legacy Vulcan’s application and ordered Mexico not to take any action that might further aggravate the dispute between the parties or render the resolution of the dispute potentially more difficult. A hearing on the merits of the ancillary claim took place in August 2023. We expect that the NAFTA arbitration tribunal will issue a decision on the claim and ancillary claim during the first half of 2025. At this time, there can be no assurance whether we will be successful in our NAFTA claim and ancillary claim, and we cannot quantify the amount we may recover, if any, under this arbitration proceeding if we are successful. It is not possible to predict the ultimate outcome of these and other legal proceedings in which we are involved, and a number of factors, including developments in ongoing discovery or adverse rulings, or the verdict of a particular jury, could cause actual losses to differ materially from accrued costs. No liability was recorded for claims and litigation for which a loss was determined to be only reasonably possible or for which a loss could not be reasonably estimated. Legal costs incurred in defense of lawsuits are expensed as incurred. In addition, losses on certain claims and litigation described above may be subject to limitations on a per occurrence basis by excess insurance, as described in Note 1 under the caption "Claims and Litigation Including Self-Insurance." NOTE 13: EQUITY Our capital stock consists solely of common stock, par value $ 1.00 per share, of which 480,000,000 shares may be issued. Holders of our common stock are entitled to one vote per share. We may also issue 5,000,000 shares of preferred stock, but no shares have been issued. 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 December 31, 2024, 2023 and 2022. Our common stock purchases (all of which were open market purchases) and subsequent retirements for the years ended December 31 are summarized below: in millions, except average cost 2024 2023 2022 Number of shares purchased and retired 0.3 1.0 0.0 Total purchase price 1 $ 68.8 $ 200.0 $ 0.0 Average cost per share $ 254.71 $ 204.52 $ 0.00 1 The amount paid to purchase shares in excess of the par value and related excise taxes are recorded in retained earnings. As of December 31, 2024, 6,817,118 shares may be purchased under the current authorization of our Board of Directors. Dividends for the years ended December 31 were as follows: in millions, except per share data 2024 2023 2022 Cash dividends $ 244.4 $ 228.4 $ 212.6 Cash dividends per share $ 1.84 $ 1.72 $ 1.60 Total equity as presented in the consolidated financial statements for the year ended December 31, 2024 includes a noncontrolling interest of $ 23.9 million, representing the unowned portion of a subsidiary. See Note 1 under the caption "Noncontrolling Interest" for additional discussion. Part II 101 NOTE 14: OTHER COMPREHENSIVE INCOME Comprehensive income comprises two subsets: net earnings and other comprehensive income (OCI). The components of OCI are presented in the accompanying Consolidated Statements of Comprehensive Income and Consolidated Statements of Equity, net of applicable taxes. Amounts in accumulated other comprehensive income (loss) (AOCI), net of tax, at December 31, are as follows: in millions 2024 2023 2022 Cash flow hedges $ ( 17.7 ) $ ( 19.4 ) $ ( 21.0 ) Pension and postretirement plans ( 109.7 ) ( 124.4 ) ( 133.7 ) Total AOCI $ ( 127.4 ) $ ( 143.8 ) $ ( 154.7 ) Changes in AOCI, net of tax, for the three years ended December 31, 2024 are as follows: in millions Cash Flow Hedges Pension and Postretirement Benefit Plans Total AOCI Balances at December 31, 2021 $ ( 22.5 ) $ ( 130.2 ) $ ( 152.7 ) Other comprehensive income (loss) before reclassifications 0.0 ( 6.5 ) ( 6.5 ) Amounts reclassified from AOCI 1.5 3.0 4.5 Net OCI changes 1.5 ( 3.5 ) ( 2.0 ) AOCI Balances at December 31, 2022 $ ( 21.0 ) $ ( 133.7 ) $ ( 154.7 ) Other comprehensive income (loss) before reclassifications 0.0 4.2 4.2 Amounts reclassified from AOCI 1.6 5.1 6.7 Net OCI changes 1.6 9.3 10.9 AOCI Balances at December 31, 2023 $ ( 19.4 ) $ ( 124.4 ) $ ( 143.8 ) Other comprehensive income (loss) before reclassifications 0.0 9.7 9.7 Amounts reclassified from AOCI 1.7 5.0 6.7 Net OCI changes 1.7 14.7 16.4 AOCI Balances at December 31, 2024 $ ( 17.7 ) $ ( 109.7 ) $ ( 127.4 ) Amounts reclassified from AOCI to earnings are as follows: in millions 2024 2023 2022 Amortization of Accumulated Cash Flow Hedge Losses Interest expense $ 2.2 $ 2.1 $ 2.0 Benefit from income taxes ( 0.5 ) ( 0.5 ) ( 0.5 ) Total $ 1.7 $ 1.6 $ 1.5 Amortization of Accumulated Benefit Plan Costs Other nonoperating expense $ 6.8 $ 6.9 $ 4.0 Benefit from income taxes ( 1.8 ) ( 1.8 ) ( 1.0 ) Total $ 5.0 $ 5.1 $ 3.0 Total reclassifications from AOCI to earnings $ 6.7 $ 6.7 $ 4.5 Part II 102 NOTE 15: SEGMENT REPORTING Our operating segments are based on our internal management reporting structure. Our chief operating decision maker (CODM), the Chairman and Chief Executive Officer, evaluates our operating results through reportable segment gross profit. This financial metric is used to review operating trends, perform analytical comparisons between periods and monitor budget-to-actual variances on a monthly basis in order to assess performance and allocate resources. We continually assess our internal management reporting structure and the financial information evaluated by our CODM to determine whether any changes have occurred that would impact segment reporting. During the first quarter of 2024, we reorganized the financial information provided to our CODM. As a result, we now report our calcium operation within our Aggregates reporting segment to align with our new reporting structure. All prior period segment information has been revised to conform to the current presentation. This change in our reporting segments had no impact on previously reported consolidated financial results. We have three operating (and reportable) segments organized around our principal product lines: Aggregates, Asphalt and Concrete. Management reviews earnings from these reporting segments principally at the gross profit level. The Aggregates segment produces and sells aggregates (crushed stone, sand and gravel, sand, and other aggregates) and related products and services. During 2024, the Aggregates segment principally served markets in twenty-three states, the U.S. Virgin Islands, Washington D.C., Freeport (Bahamas), British Columbia (Canada), Puerto Cortés (Honduras) and Quintana Roo (Mexico) — see Note 12 , NAFTA Arbitration — with a full line of aggregates. Aggregates are used primarily in the construction and maintenance of highways, streets and other public works and in the construction of housing and commercial, industrial and other nonresidential facilities. Customers are served by truck, rail and water distribution networks from our production facilities and sales yards. Due to the high weight-to-price ratio of aggregates, markets generally are local in nature. Quarries located on waterways and rail lines allow us to serve remote markets where local aggregates reserves may not be available. The Asphalt segment produces and sells asphalt mix in six states (Alabama, Arizona, California, New Mexico, Tennessee and Texas) and provides asphalt construction paving services in three states (Alabama, Tennessee and Texas). The Concrete segment produces and sells ready-mixed concrete in three states (California, Maryland and Virginia) in addition to the U.S. Virgin Islands and Washington D.C. Aggregates comprise approximately 95 % of asphalt mix by weight and 80 % of ready-mixed concrete by weight. Our Asphalt and Concrete segments are primarily supplied with their aggregates requirements from our Aggregates segment. These intersegment sales are made at local market prices for the particular grade and quality of product used in the production of asphalt mix and ready-mixed concrete and are excluded from total revenues. Customers for our Asphalt and Concrete segments are generally served locally at our production facilities or by truck. Because asphalt mix and ready-mixed concrete harden rapidly, delivery is time constrained and generally confined to a radius of approximately 20 to 25 miles from the producing facility. The vast majority of our activities are domestic. We sell a relatively small amount of construction aggregates outside the United States. Total domestic revenues were $ 7,401.0 million, $ 7,769.7 million and $ 7,263.9 million in 2024, 2023 and 2022, respectively. Nondomestic Aggregates segment revenues were $ 16.7 million, $ 12.2 million and $ 51.3 million in 2024, 2023 and 2022, respectively; there were no significant nondomestic revenues in our Asphalt or Concrete segments. Long-lived assets outside the United States, which consist primarily of property, plant & equipment, were $ 501.4 million, $ 524.1 million and $ 534.2 million in 2024, 2023 and 2022, respectively. Equity method investments of $ 26.6 million in 2024, $ 26.6 million in 2023 and $ 26.5 million in 2022 are included in the identifiable assets for the Aggregates segment and in investments and long-term receivables on the accompanying Consolidated Balance Sheets. Part II 103 SEGMENT FINANCIAL DISCLOSURE in millions 2024 2023 2022 Total Revenues Aggregates 1 $ 5,949.6 $ 5,918.9 $ 5,280.6 Asphalt 2 1,245.6 1,140.7 990.2 Concrete 3 653.5 1,249.3 1,593.9 Segment sales $ 7,848.7 $ 8,308.9 $ 7,864.7 Aggregates intersegment sales ( 431.0 ) ( 527.0 ) ( 549.5 ) Total revenues $ 7,417.7 $ 7,781.9 $ 7,315.2 Cost of Revenues Aggregates $ ( 3,701.9 ) $ ( 3,655.1 ) $ ( 3,320.0 ) Asphalt ( 1,075.5 ) ( 991.1 ) ( 932.9 ) Concrete 3 ( 640.7 ) ( 1,187.2 ) ( 1,504.6 ) Total $ ( 5,418.1 ) $ ( 5,833.4 ) $ ( 5,757.5 ) Gross Profit Aggregates $ 1,816.7 $ 1,736.8 $ 1,411.1 Asphalt 170.1 149.6 57.3 Concrete 3 12.8 62.1 89.3 Total $ 1,999.6 $ 1,948.5 $ 1,557.7 Reconciliation to Pretax Earnings Selling, administrative and general expenses $ ( 531.1 ) $ ( 542.8 ) $ ( 515.1 ) Other operating income (expense), net ( 104.0 ) 21.7 ( 91.2 ) Other nonoperating income (expense), net ( 22.1 ) ( 2.7 ) 5.1 Interest expense, net ( 170.3 ) ( 179.6 ) ( 168.4 ) Earnings from continuing operations before income taxes $ 1,172.1 $ 1,245.1 $ 788.1 1 Includes product sales, as well as freight & delivery costs that we pass along to our customers, and service revenues (see Note 2 ) related to our aggregates business. 2 Includes product sales, as well as service revenues (see Note 2 ) from our asphalt construction paving business. 3 The decreases in the Concrete segment are primarily due to the 2022 divestiture of concrete operations in New Jersey, New York and Pennsylvania and the 2023 divestiture of concrete operations in Texas. See Note 19 for additional information. Part II 104 SEGMENT FINANCIAL DISCLOSURE (CONTINUED) in millions 2024 2023 2022 Depreciation, Depletion, Accretion & Amortization 1 Aggregates $ 515.7 $ 482.3 $ 441.3 Asphalt 44.1 35.6 35.1 Concrete 45.5 72.8 83.1 Other 26.9 26.3 28.0 Total $ 632.2 $ 617.0 $ 587.5 Capital Expenditures 2 Aggregates $ 588.4 $ 764.9 $ 540.4 Asphalt 36.1 46.9 23.3 Concrete 12.2 15.8 50.4 Corporate 0.7 0.9 30.0 Total $ 637.4 $ 828.5 $ 644.1 Identifiable Assets 3 Aggregates $ 14,294.6 $ 11,753.2 $ 11,579.0 Asphalt 805.7 613.4 597.6 Concrete 1,065.8 962.3 1,436.2 Total identifiable assets 4 $ 16,166.1 $ 13,328.9 $ 13,612.8 General corporate 337.9 267.6 460.3 Cash and cash equivalents and restricted cash 600.8 949.2 161.5 Total assets $ 17,104.8 $ 14,545.7 $ 14,234.6 1 Depreciation, Depletion, Accretion & Amortization (DDA&A) for each segment is included in cost of revenues. 2 Capital expenditures include changes in accruals for purchases of property, plant & equipment. Capital expenditures exclude property, plant & equipment obtained by business acquisitions. 3 Certain temporarily idled assets are included within a segment's Identifiable Assets, but the associated DDA&A is shown within Other in the DDA&A section above as the related DDA&A is excluded from segment gross profit. 4 The increases in total identifiable assets are primarily due to acquisitions completed in 2024 (see Note 19 f or additional information) . NOTE 16: SUPPLEMENTAL CASH FLOW INFORMATION Supplemental information referable to the Consolidated Statements of Cash Flows is summarized below: in millions 2024 2023 2022 Cash Payments Interest (exclusive of amount capitalized) $ 182.9 $ 178.7 $ 164.3 Income taxes 279.8 291.7 143.5 Noncash Investing and Financing Activities Accruals for purchases of property, plant & equipment $ 98.5 $ 64.6 $ 108.7 Note received from sale of business 0.9 0.0 130.0 Recognition of new and revised lease obligations: Operating lease right-of-use assets 68.8 4.0 44.8 Finance lease right-of-use assets 4.6 2.9 3.8 Consideration payable to seller in business acquisitions 30.9 0.0 65.4 Part II 105 NOTE 17: ASSET RETIREMENT OBLIGATIONS Asset retirement obligations (AROs) are legal obligations associated with the retirement of long-lived assets resulting from the acquisition, construction, development and/or normal use of the underlying assets, including legal obligations for land reclamation. Recognition of a liability for an ARO is required in the period in which it is incurred at its estimated fair value. The associated asset retirement costs are capitalized as part of the carrying amount of the underlying asset and depreciated over the estimated useful life of the asset. The liability is accreted through charges to operating expenses. If the ARO is settled for a value other than the carrying amount of the liability, we recognize a gain or loss on settlement. For the years ended December 31, ARO operating costs related to accretion of the liabilities and depreciation of the assets are as follows: in millions 2024 2023 2022 Accretion $ 14.7 $ 13.9 $ 14.1 Depreciation 12.5 9.0 9.4 Total ARO operating costs $ 27.2 $ 22.9 $ 23.5 ARO operating costs are reported in cost of revenues. AROs are reported within other noncurrent liabilities in our accompanying Consolidated Balance Sheets. Reconciliations of the carrying amounts of our AROs for the years ended December 31 are as follows: in millions 2024 2023 ARO balance at beginning of year $ 324.1 $ 311.3 Liabilities incurred 42.3 0.0 Liabilities settled ( 19.1 ) ( 9.9 ) Accretion expense 14.7 13.9 Revisions, net 65.4 8.8 ARO balance at end of year $ 427.4 $ 324.1 ARO liabilities incurred during 2024 relate to those assumed in 2024 acquisitions (see Note 19 ). ARO revisions during 2024 primarily related to cost adjustments for a number of aggregates properties in California that are being reclaimed for alternative uses post mining. Part II 106 NOTE 18: GOODWILL AND INTANGIBLE ASSETS Acquired identifiable intangible assets are classified into three categories: (1) goodwill, (2) intangible assets with finite lives subject to amortization and (3) intangible assets with indefinite lives. Goodwill and intangible assets with indefinite lives are not amortized; rather, they are reviewed for impairment at least annually. GOODWILL Goodwill is recognized when the consideration paid for a business exceeds the fair value of the tangible and identifiable intangible assets acquired. Goodwill is allocated to reporting units for purposes of testing goodwill for impairment. We test goodwill for impairment on an annual basis or more frequently if events or circumstances change in a manner that would more likely than not reduce the fair value of a reporting unit below its carrying value. A decrease in the estimated fair value of one or more of our reporting units could result in the recognition of a material, noncash write-down of goodwill. During the third quarter of 2024, we determined that a triggering event occurred with respect to a reporting unit that includes concrete operations acquired from U.S. Concrete in 2021. We previously disclosed that the estimated fair value of this reporting unit exceeded its carrying value by less than 5%. Based on an interim goodwill impairment test, we determined that the estimated fair value of this reporting unit was less than its carrying value. As a result, we recorded an $ 86.6 million noncash impairment charge. In addition, 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. There were no charges for goodwill impairment in the year ended December 31, 2023. Accumulated goodwill impairment losses amount to $ 390.2 million ($ 252.7 million in our former Cement segment and $ 137.5 in our Concrete segment). We have three reportable segments organized around our principal product lines: Aggregates, Asphalt and Concrete. Changes in the carrying amount of goodwill by reportable segment for the three years ended December 31 are shown below: in millions Aggregates Asphalt Concrete Total Goodwill at December 31, 2022 $ 3,330.3 $ 91.6 $ 267.7 $ 3,689.6 Goodwill of acquired businesses 1 ( 0.1 ) 0.0 0.0 ( 0.1 ) Goodwill of divested businesses 1 0.0 0.0 ( 157.8 ) ( 157.8 ) Goodwill at December 31, 2023 $ 3,330.2 $ 91.6 $ 109.9 $ 3,531.7 Goodwill of acquired businesses 1 343.0 0.0 0.0 343.0 Goodwill impairment 0.0 0.0 ( 86.6 ) ( 86.6 ) Goodwill at December 31, 2024 $ 3,673.2 $ 91.6 $ 23.3 $ 3,788.1 1 See Note 19 for acquisitions and divestitures. INTANGIBLE ASSETS Intangible assets consist of contractual rights in place (primarily permitting and zoning rights), noncompetition agreements, customer relationships and trade names and trademarks. Intangible assets acquired in business combinations are stated at their fair value determined as of the date of acquisition. Intangible assets acquired individually or otherwise obtained outside a business combination consist primarily of permitting, permitting compliance and zoning rights and are stated at their historical cost less accumulated amortization. Costs incurred to renew or extend the life of existing intangible assets are capitalized. These capitalized renewal/extension costs were immaterial for the years presented. See Note 19 for the details of the intangible assets acquired in business acquisitions. Amortization of finite-lived intangible assets is computed based on the estimated life of the intangible assets. Contractual rights in place associated with aggregates reserves are amortized using the unit-of-sales method based on estimated recoverable units. Other intangible assets are amortized principally by the straight-line method. Intangible assets are reviewed for impairment when events or circumstances indicate that the carrying amount may not be recoverable. There were no material charges for impairment of intangible assets in 2024, 2023 and 2022. Part II 107 The gross carrying amount and accumulated amortization by major intangible asset class for the years ended December 31 are summarized below: in millions 2024 2023 Gross Carrying Amount Contractual rights in place $ 1,899.0 $ 1,592.7 Permitting, permitting compliance and zoning rights 221.3 206.8 Other 1 101.6 90.4 Total gross carrying amount $ 2,221.9 $ 1,889.9 Accumulated Amortization Contractual rights in place $ ( 407.0 ) $ ( 344.5 ) Permitting, permitting compliance and zoning rights ( 70.4 ) ( 59.5 ) Other 1 ( 29.8 ) ( 25.2 ) Total accumulated amortization $ ( 507.2 ) $ ( 429.2 ) Total Intangible Assets Subject to Amortization, net $ 1,714.7 $ 1,460.7 Intangible Assets with Indefinite Lives 0.0 0.0 Total Intangible Assets, net $ 1,714.7 $ 1,460.7 Amortization Expense for the Year $ 83.9 $ 88.1 1 Includes noncompetition agreements, patents, customer relationships, tradenames and trademarks. Estimated amortization expense for the five years subsequent to December 31, 2024 is as follows: in millions Estimated Amortization Expense for Five Subsequent Years 1 2025 $ 89.7 2026 88.2 2027 85.3 2028 83.7 2029 81.1 1 Includes amortization of quarry development assets (including pre-production stripping costs) reported within other noncurrent assets in our accompanying Consolidated Balance Sheets. NOTE 19: ACQUISITIONS AND DIVESTITURES BUSINESS ACQUISITIONS 2024 BUSINESS ACQUISITIONS — During 2024, we acquired the following operations for total consideration of $ 2,297.1 million ($ 2,266.2 million cash and $ 30.9 million noncash): ▪ Alabama — aggregates, asphalt mix and construction paving operations ▪ California — aggregates, asphalt and ready-mixed concrete operations ▪ North Carolina — aggregates operations ▪ South Carolina — aggregates operations ▪ Texas — asphalt mix and construction paving operations While none of these acquisitions were individually material, our fourth quarter acquisitions of Wake Stone Corporation (Wake Stone) and Superior Ready Mix, L.P. (Superior) were collectively material. The amounts of total revenues and net earnings attributable to Vulcan from the Wake Stone and Superior acquisitions are included in our Consolidated Statement of Comprehensive Income for the year ended December 31, 2024 as follows: in millions 2024 Actual Results Total revenues $ 13.3 Net loss attributable to Vulcan ( 10.5 ) Part II 108 The unaudited pro forma financial information in the table below summarizes the results of operations for Vulcan, Wake Stone and Superior as if they were combined as of January 1, 2023. The pro forma financial information does not reflect any cost savings, operating efficiencies or synergies as a result of these acquisitions. Consistent with the assumed acquisition date of January 1, 2023, the pro forma information excludes transactions between Vulcan, Wake Stone and Superior. The following pro forma information also includes: 1) charges directly attributable to the acquisitions, including acquisition related expenses of $ 8.5 million; 2) cost of sales related to the sale of acquired inventory marked up to fair value; 3) depreciation, depletion, amortization & accretion expense related to the mark up to fair value of acquired assets; 4) interest expense reflecting the new debt structure; and 5) tax effects of the business combination: in millions 2024 2023 Supplemental Pro Forma Results Total revenues $ 7,810.2 $ 8,188.9 Net earnings attributable to Vulcan 818.2 835.9 The unaudited pro forma results above may not be indicative of the results that would have been obtained had these acquisitions occurred at the beginning of 2023, nor does it intend to be a projection of future results. These acquisitions are reported in our consolidated financial statements as of their respective acquisition dates. The fair value of consideration transferred for the Wake Stone and Superior acquisitions and the preliminary amounts (pending final appraisals of intangible assets and property, plant & equipment as well as working capital adjustments) of assets acquired and liabilities assumed are summarized below: in millions December 31 2024 Fair Value of Purchase Consideration Cash $ 2,059.8 Payable to seller 30.9 Total fair value of purchase consideration $ 2,090.7 Identifiable Assets Acquired and Liabilities Assumed Inventories $ 28.5 Property, plant & equipment 1,918.2 Identifiable intangible assets 275.5 Other assets 60.5 Asset retirement obligations ( 41.5 ) Deferred tax liabilities ( 311.2 ) Other liabilities ( 173.7 ) Net identifiable assets acquired $ 1,756.3 Goodwill $ 334.4 As a collective result of the Wake Stone and Superior acquisitions, as well as other immaterial acquisitions completed in 2024, we recognized $ 306.4 million of amortizable intangible assets and $ 343.0 million of goodwill. The amortizable intangible assets will be amortized against earnings over a weighted-average of approximately 20 years and will be deductible for income tax purposes over 15 years. The $ 343.0 million of goodwill primarily represents deferred tax liabilities generated from carrying over the seller's tax basis in the assets acquired as well as synergies expected to be realized from acquiring established businesses with assets that have been assembled over a long period of time; the collection of those assets combined with our assets can earn a higher rate of return than either individually. Of the total goodwill recognized, $ 31.8 million will be deductible for income tax purposes. 2023 BUSINESS ACQUISITIONS — During 2023, we completed no business acquisitions. 2022 BUSINESS ACQUISITIONS — During 2022, including adjustments made in 2023, we purchased the following operations for total consideration of $ 593.7 million ($ 528.3 million cash and $ 65.4 million noncash): ▪ California — aggregates, asphalt mix and ready-mixed concrete operations ▪ Texas — aggregates operations ▪ Virginia — ready-mixed concrete operations ▪ Honduras — an aggregates operation serving limited markets along the Gulf Coast Part II 109 DIVESTITURES AND PENDING DIVESTITURES In 2024, we sold: ▪ Fourth quarter — real estate associated with a former sales yard in Virginia resulting in a pretax gain of $ 36.7 million In 2023, we sold: ▪ Fourth quarter — concrete operations in Texas resulting in a third quarter impairment charge of $ 28.3 million and a fourth quarter loss on sale of $ 13.8 million (the assets were written down to fair value less cost to sell in the third quarter) ▪ Fourth quarter — excess real estate in Virginia resulting in a pretax gain of $ 65.7 million ▪ 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 December 31, 2024, 2023 or 2022. Part II 110 ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.