UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
‎For the quarterly period ended March 31, 2023
‎OR ‎
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
‎For the transition period from                 to
‎Commission File Number 001-33841

‎VULCAN MATERIALS COMPANY
‎(Exact name of registrant as specified in its charter)

‎ New Jersey  ‎(State or other jurisdiction of incorporation)			‎20-8579133 ‎(I.R.S. Employer Identification No.)
‎1200 Urban Center Drive, Birmingham, Alabama ‎(Address of principal executive offices)			‎35242 ‎(zip code)
‎(205) 298-3000 ‎(Registrant's telephone number including area code)
‎Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
‎Title of each class	‎Trading Symbol			Name of each exchange on ‎which registered
Common Stock, $1 par value	VMC			New York Stock Exchange
‎Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o ‎ ‎Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o ‎ ‎Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
‎Large accelerated filer þ		‎Accelerated filer o			‎Smaller reporting company o
‎Non-accelerated filer o					‎Emerging growth company o
‎If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
‎Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
‎Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
‎                    Class					Shares outstanding ‎      at April 24, 2023
Common Stock, $1 Par Value					133,059,406

9

VULCAN MATERIALS COMPANY FORM 10-Q QUARTER ENDED MARCH 31, 2023 Contents
			Page
PART I	FINANCIAL INFORMATION
	Item 1.	Financial Statements Condensed Consolidated Balance Sheets Condensed Consolidated Statements of Comprehensive Income Condensed Consolidated Statements of Cash Flows Notes to Condensed Consolidated Financial Statements	2  3  4  5
	Item 2.	Management’s Discussion and Analysis of Financial    Condition and Results of Operations	27
	Item 3.	Quantitative and Qualitative Disclosures About    Market Risk	44
	Item 4.	Controls and Procedures	44
PART II	OTHER INFORMATION
	Item 1.	Legal Proceedings	45
	Item 1A.	Risk Factors	45
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
	Item 4.	Mine Safety Disclosures	45
	Item 6.	Exhibits	46
		Signatures	47
Unless otherwise stated or the context otherwise requires, references in this report to “Vulcan,” the “Company,” “we,” “our,” or “us” refer to Vulcan Materials Company and its consolidated subsidiaries.

‎

1

part I financial information

  ITEM 1

FINANCIAL STATEMENTS

VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited	March 31	December 31	March 31
in millions	2023	2022	2022
Assets
Cash and cash equivalents	$         139.6	$         161.4	$         123.1
Restricted cash	0.4	0.1	9.9
Accounts and notes receivable
Accounts and notes receivable, gross	988.1	1,056.2	928.6
Allowance for credit losses	(13.1)	(10.9)	(10.7)
Accounts and notes receivable, net	975.0	1,045.3	917.9
Inventories
Finished products	437.8	439.3	412.2
Raw materials	70.6	63.4	63.2
Products in process	6.2	6.0	4.4
Operating supplies and other	71.0	70.6	44.7
Inventories	585.6	579.3	524.5
Other current assets	91.9	115.9	87.2
Total current assets	1,792.5	1,902.0	1,662.6
Investments and long-term receivables	31.3	31.8	36.5
Property, plant & equipment
Property, plant & equipment, cost	11,413.5	11,306.4	10,724.1
Allowances for depreciation, depletion & amortization	(5,368.6)	(5,255.1)	(4,998.5)
Property, plant & equipment, net	6,044.9	6,051.3	5,725.6
Operating lease right-of-use assets, net	569.5	572.6	679.7
Goodwill	3,689.6	3,689.6	3,709.2
Other intangible assets, net	1,679.2	1,702.1	1,751.9
Other noncurrent assets	269.9	285.2	295.3
Total assets	$    14,076.9	$    14,234.6	$    13,860.8
Liabilities
Current maturities of long-term debt	0.5	0.5	3.9
Short-term debt	0.0	100.0	100.0
Trade payables and accruals	370.3	454.5	390.1
Other current liabilities	386.1	401.6	398.7
Total current liabilities	756.9	956.6	892.7
Long-term debt	3,876.9	3,875.2	3,874.5
Deferred income taxes, net	1,060.1	1,072.8	1,007.7
Deferred revenue	157.8	159.8	166.8
Noncurrent operating lease liabilities	545.9	548.4	631.7
Other noncurrent liabilities	668.6	669.6	689.1
Total liabilities	$      7,066.2	$      7,282.4	$      7,262.5
Other commitments and contingencies (Note 8)
Equity
Common stock, $1 par value, Authorized 480.0 shares,
Outstanding 133.1, 132.9 and 132.9 shares, respectively	133.1	132.9	132.9
Capital in excess of par value	2,832.9	2,839.0	2,806.8
Retained earnings	4,174.0	4,111.4	3,787.2
Accumulated other comprehensive loss	(153.1)	(154.7)	(151.6)
Total shareholders' equity	6,986.9	6,928.6	6,575.3
Noncontrolling interest	23.8	23.6	23.0
Total equity	$      7,010.7	$      6,952.2	$      6,598.3
Total liabilities and equity	$    14,076.9	$    14,234.6	$    13,860.8
The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.

‎

2

VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF
‎COMPREHENSIVE INCOME

	Three Months Ended
Unaudited	March 31
in millions, except per share data	2023	2022
Total revenues	$      1,649.0	$      1,540.7
Cost of revenues	(1,347.0)	(1,271.9)
Gross profit	302.0	268.8
Selling, administrative and general expenses	(117.3)	(119.0)
Gain on sale of property, plant & equipment
and businesses	1.7	2.6
Loss on impairments	0.0	(0.1)
Other operating income (expense), net	0.8	(5.3)
Operating earnings	187.2	147.0
Other nonoperating income, net	1.4	1.5
Interest expense, net	(49.0)	(35.9)
Earnings from continuing operations
before income taxes	139.6	112.6
Income tax expense	(16.6)	(18.7)
Earnings from continuing operations	123.0	93.9
Loss on discontinued operations, net of tax	(2.1)	(1.8)
Net earnings	120.9	92.1
Earnings attributable to noncontrolling interest	(0.2)	(0.3)
Net earnings attributable to Vulcan	$         120.7	$           91.8
Other comprehensive income, net of tax
Amortization of prior cash flow hedge loss	0.4	0.4
Amortization of actuarial loss and prior service
cost for benefit plans	1.3	0.7
Other comprehensive income	1.7	1.1
Comprehensive income	122.6	93.2
Comprehensive earnings attributable to
noncontrolling interest	(0.2)	(0.3)
Comprehensive income attributable to Vulcan	$         122.4	$           92.9
Basic earnings (loss) per share attributable to Vulcan
Continuing operations	$           0.92	$           0.70
Discontinued operations	(0.01)	(0.01)
Net earnings	$           0.91	$           0.69
Diluted earnings (loss) per share attributable to Vulcan
Continuing operations	$           0.92	$           0.70
Discontinued operations	(0.02)	(0.01)
Net earnings	$           0.90	$           0.69
Weighted-average common shares outstanding
Basic	133.2	133.0
Assuming dilution	133.7	133.6
Effective tax rate from continuing operations	11.9%	16.6%
The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.

‎

3

VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended
Unaudited	March 31
in millions	2023	2022
Operating Activities
Net earnings	$         120.9	$           92.1
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation, depletion, accretion and amortization	148.4	141.0
Loss on impairments	0.0	0.1
Noncash operating lease expense	13.6	16.4
Net gain on sale of property, plant & equipment and businesses	(1.7)	(2.6)
Contributions to pension plans	(1.9)	(2.0)
Share-based compensation expense	8.2	7.5
Deferred tax provision (benefit)	(13.3)	1.1
Changes in assets and liabilities before initial
effects of business acquisitions and dispositions	(55.2)	(77.8)
Other, net	2.3	(0.2)
Net cash provided by operating activities	$         221.3	$         175.6
Investing Activities
Purchases of property, plant & equipment	(193.6)	(160.4)
Proceeds from sale of property, plant & equipment	1.4	6.2
Proceeds from sale of businesses	130.0	0.0
Payment for businesses acquired, net of acquired cash	0.5	(148.2)
Other, net	0.0	(0.1)
Net cash used for investing activities	$        (61.7)	$      (302.5)
Financing Activities
Proceeds from short-term debt	28.0	189.0
Payment of short-term debt	(128.0)	(89.0)
Payment of current maturities and long-term debt	(550.4)	(2.3)
Proceeds from issuance of long-term debt	550.0	0.0
Debt issuance and exchange costs	(3.4)	(0.7)
Payment of finance leases	(5.8)	(8.5)
Dividends paid	(57.2)	(53.2)
Share-based compensation, shares withheld for taxes	(14.3)	(17.1)
Other, net	0.0	0.2
Net cash provided by (used for) financing activities	$      (181.1)	$           18.4
Net decrease in cash and cash equivalents and restricted cash	(21.5)	(108.5)
Cash and cash equivalents and restricted cash at beginning of year	161.5	241.5
Cash and cash equivalents and restricted cash at end of period	$         140.0	$         133.0
The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of the statements.

4

notes to condensed 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), a major producer of asphalt mix and ready-mixed concrete, and a supplier of construction paving services.

We operate primarily in the United States, and our principal product — aggregates — is used in virtually all types of public and private construction projects and in the production of asphalt mix and ready-mixed concrete. We serve aggregates markets in twenty-two 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 8, NAFTA Arbitration). Our primary focus is serving metropolitan markets in the United States that are expected to experience the most significant growth in population, households and employment. These three demographic factors are significant drivers of demand for aggregates. While aggregates is our focus and primary business, we produce and sell asphalt mix and/or ready-mixed concrete in our Alabama, Arizona, California, Maryland, New Mexico, Oklahoma, Tennessee, Texas, Virginia, U.S. Virgin Islands and Washington D.C. markets.

BASIS OF PRESENTATION

Our accompanying unaudited condensed consolidated financial statements were prepared in compliance with the instructions to Form 10-Q and Article 10 of Regulation S-X and thus do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) for complete financial statements. We prepared the accompanying condensed consolidated financial statements on the same basis as our annual financial statements, except for the adoption of new accounting standards, if any, as described in Note 17. Our Condensed Consolidated Balance Sheet as of December 31, 2022 was derived from the audited financial statement, but it does not include all disclosures required by GAAP. In the opinion of our management, the statements reflect all adjustments, including those of a normal recurring nature, necessary to present fairly the results of the reported interim periods. For further information, refer to the consolidated financial statements and footnotes included in our most recent Annual Report on Form 10-K.

Operating results for the three-month period ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. Construction activity continues to be impacted by cost inflation and capacity constraints (including supply chain bottlenecks, labor shortages and transportation availability).

Our condensed consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets, liabilities, revenues and expenses. The most significant estimates and assumptions included in the preparation of these financial statements are related to goodwill and long-lived asset impairments, business combinations and purchase price allocation, pension and other postretirement benefits, environmental compliance, claims and litigation including self-insurance, and income taxes. Events that relate to conditions arising after March 31, 2023 will be reflected in management’s estimates for future periods.

NONCONTROLLING INTEREST

In connection with our acquisition of U.S. Concrete in 2021, we obtained an 88% controlling interest in the Orca Sand and Gravel Limited Partnership (Orca). Orca was formed to develop the Orca quarry in British Columbia, Canada. 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 condensed 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.

5

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 Condensed Consolidated Statements of Cash Flows.

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 Condensed Consolidated Statements of Comprehensive Income for all periods presented. Results from discontinued operations are as follows: