Vulcan Materials (VMC) 10-K risk factor changes: FY2019 vs FY2018

[removed: RISK FACTORS][added: RISK FACTORS]

[removed: ECONOMIC/POLITICAL RISKS][added: ECONOMIC/POLITICAL RISKS]

[removed: Our] [added: Our] business is dependent on the construction industry and is subject to economic [removed: cycles] [added: cycles] — Our products are principally sold to the U.S. construction industry.

[removed: Changes in] [added: Changes in] legal requirements and governmental policies concerning zoning, land use, [removed: environmental and] [added: environmental and] other areas of the law may result in additional liabilities, a reduction in operating hours and additional capital [removed: expenditures —] [added: expenditures —] Our operations are affected by numerous federal, state and local laws and regulations related to zoning, land use and environmental matters.

[removed: Our] [added: Our] business is dependent on the timing and amount of federal, state and local funding for [removed: infrastructure —] [added: infrastructure —] Our products are used in a variety of public infrastructure projects that are funded and financed by federal, state and local governments.

In [removed: 2018,] [added: 2019,] voters in local jurisdictions in California, [removed: Florida,] Georgia, [added: New Mexico,] North [removed: Carolina] [added: Carolina, Texas] and [removed: Texas,] [added: Virginia,] among others, approved bond and revenue-raising measures to provide additional resources for transportation projects.

In [removed: 2017, three] [added: 2019, two] state legislatures in Vulcan-served areas — [removed: California, South Carolina] [added: Alabama] and [removed: Tennessee] [added: Illinois] — passed new long-term highway funding legislation.

[removed: Climate] [added: Climate] change and climate change legislation or regulations may adversely impact our business [removed: —] [added: —] A number of governmental bodies have introduced or are contemplating legislative and regulatory change in response to the potential impacts of climate change.

Other potential impacts of climate change include physical impacts, such as disruption in production and product distribution due to impacts from major storm events, shifts in regional weather patterns and intensities, [added: availability of water] and potential impacts from sea level changes.

[removed: We] [added: We] are subject to various risks arising from our international business operations and relationships, which could adversely affect our [removed: business —] [added: business —] We have international operations and are subject to both the risks of conducting international business and the requirements of the Foreign Corrupt Practices Act of 1977 (the FCPA).

These risks may include changes in international trade policies, such as the [removed: North American Free Trade Agreement,] [added: United States — Mexico — Canada Agreement (USMCA),] imposition of duties, taxes or government royalties, arbitrary changes to permits, zoning classifications or operating agreements, or overt acts by foreign governments, including expropriations and other forms of takings of property.

[removed: GROWTH] [added: GROWTH] AND COMPETITIVE [removed: RISKS][added: RISKS]

[removed: Within] [added: Within] our local markets, we operate in a highly competitive industry which may negatively impact prices, volumes and [removed: costs —] [added: costs —] The construction aggregates industry is highly fragmented with a large number of independent local producers in a number of our markets.

[removed: The] [added: The] expanded use of aggregates substitutes could have a material adverse effect on our business, financial condition and results of [removed: operations —] [added: operations —] Recycled concrete and asphalt are increasingly being used in a number of our markets, particularly urban markets, as a substitute for aggregates.

[removed: Our long-term] [added: Our long-term] success depends upon securing and permitting aggregates reserves in strategically located [removed: areas.][added: areas.]

If we are unable to secure and permit such reserves it could negatively affect our future [removed: earnings —] [added: earnings —] Construction aggregates are bulky and heavy and, therefore, difficult to transport efficiently.

[removed: Our] [added: Our] future growth depends in part on acquiring other businesses in our industry and successfully integrating them with our existing [removed: operations.][added: operations.]

If we are unable to integrate acquisitions successfully, it could lead to higher costs and could negatively affect our earnings [removed: —] [added: —] The expansion of our business is dependent in part on the acquisition of existing businesses that own or control aggregates reserves.

[removed: FINANCIAL/ACCOUNTING RISKS][added: FINANCIAL/ACCOUNTING RISKS]

[removed: Our industry] [added: Our industry] is capital intensive, resulting in significant fixed and semi-fixed [removed: costs.][added: costs.]

Therefore, our earnings are highly sensitive to changes in product shipments [removed: —] [added: —] Due to the high levels of fixed capital required for extracting and producing construction aggregates, our profits are negatively affected by significant decreases in shipments.

[removed: Significant downturn in] [added: Significant downturn in] the construction industry may result in an impairment of our [removed: goodwill —] [added: goodwill —] 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.

While we have not identified any events or changes in circumstances since our annual impairment test on November 1, [removed: 2018] [added: 2019] that indicate the fair value of any of our reporting units is below its carrying value, a significant downturn in the construction industry may have a material effect on the fair value of our reporting units.

[removed: A] [added: A] deterioration in our credit ratings and/or the state of the capital markets could negatively [removed: impact our business —] [added: impact the cost and/or availability of financing —] We currently have [removed: $2.8] [added: $2.85] billion of debt with maturities between [removed: 2019] [added: 2020] and 2048.

A deterioration in the state of the capital markets, regardless of our credit [removed: rating,] [added: ratings,] could impact our access to, and cost of, new debt or equity capital.

[removed: We] [added: We] use estimates in accounting for a number of significant [removed: items.][added: items.]

Changes in our estimates could adversely affect our future financial results [removed: —] [added: —] As discussed more fully in “Critical Accounting Policies” under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we use significant judgment in accounting for:

[removed: | | § | | goodwill] [added: goodwill] impairment [removed: |]

[removed: | | § | | impairment] [added: impairment] of long-lived assets excluding goodwill [removed: |]

[removed: | | § | | business] [added: business] combinations and purchase price allocation [removed: |]

[removed: | | § | | pension] [added: pension] and other postretirement benefits [removed: |]

[removed: | | § | | environmental] [added: environmental] compliance costs [removed: |]

[removed: | | § | | claims] [added: claims] and litigation including self-insurance [removed: |]

[removed: | | § | | income] [added: income] taxes [removed: |]

[removed: PERSONNEL RISKS][added: PERSONNEL RISKS]

[removed: Our] [added: Our] future success greatly depends upon attracting and retaining qualified personnel, particularly in sales and [removed: operations —] [added: operations —] A significant factor in our future profitability is our ability to attract, develop and retain qualified personnel.

[removed: Disputes] [added: Disputes] with organized labor could disrupt our business [removed: operations —] [added: operations —] Labor unions represent approximately 11% of our workforce.

Disputes with our trade unions, or the inability to renew our labor agreements, may lead to strikes or other actions that could disrupt our business operations leading to higher costs and/or reduced [removed: revenues resulting in lower earnings.][added: revenues.]

[removed: OTHER RISKS][added: OTHER RISKS]

[removed: A significant interruption of our information technology systems or the loss of confidential or other sensitive data could have a material adverse impact on our operations and financial results —] Given our reliance on information technology (our own and our third-party providers’), a significant interruption in the availability of information technology, regardless of the cause, [added: or the loss of confidential, personal, or proprietary information (whether our own, our employees’, our suppliers’, or our customers’), regardless of the cause,] could negatively impact our operations.

A number of our facilities are located in desert climates and while we have not experienced any significant shortages of energy or water in the past, we cannot guarantee that we will not in the future.

Furthermore, public expectations for reductions in greenhouse gas emissions could result in increased energy, transportation and raw material costs, and may require us to make additional investments in facilities and equipment.

The phase-out of LIBOR, or the replacement of LIBOR with a different reference rate or modification of the method used to calculate LIBOR, may adversely affect interest rates — LIBOR is an interest rate benchmark used as a reference rate for a wide range of financial transactions, including derivatives and loans.

In July 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to stop compelling banks to submit LIBOR rates after 2021.

It is unclear whether or not LIBOR will cease to exist at that time (and if so, what reference rate will replace it) or if new methods of calculating LIBOR will be established such that it continues to exist after 2021.

The Alternative Reference Rates Committee (ARRC) has proposed that the Secured Overnight Financing Rate (SOFR) is the rate that represents best practice as the alternative to LIBOR for use in financial and other derivatives contracts that are currently indexed to United States dollar LIBOR.

ARRC has proposed a paced market transition plan to SOFR from LIBOR, and organizations are currently working on industry wide and company specific transition plans as it relates to financial and other derivative contracts exposed to LIBOR.

Uncertainty exists as to the transition process and broad acceptance of SOFR as the primary alternative to LIBOR.

We have three material debt instruments with LIBOR as a reference rate, each of which matures before the end of 2021: 1) $250.0 million floating-rate notes due 2020, 2) $500.0 million floating-rate notes due 2021, and 3) $750.0 million line of credit (none outstanding at December 31, 2019) due 2021.

At this time, we cannot predict the future impact of a departure from LIBOR as a reference rate; however, if future rates based upon the successor reference rate (or a new method of calculating LIBOR) are higher than LIBOR rates as currently determined, it may have a material adverse effect on our financial condition and results of operations.

A significant interruption of our information technology systems or the loss of confidential or other sensitive data, including cybersecurity risks, could have a material adverse impact on our operations and financial results — As part of our regular review of potential risks, we maintain an information and operational technology risk management program that is primarily supervised by information technology management and reviewed by internal cross-functional stakeholders.

As part of this program, analyses of emerging cybersecurity threats as well as our plans and strategies to address them are regularly prepared and presented to senior management, the Audit Committee and the Board of Directors.

The Audit Committee, which has oversight responsibility for our information security program, is briefed on such program at least twice annually, and our Chief Financial Officer is briefed on such program at least quarterly.

Management is not aware of a cybersecurity incident that has had a material adverse impact on our financial condition or results of operations; however, we could suffer material financial or other losses in the future and we are not able to predict the severity of these attacks.

The occurrence of a cyber-attack, breach, unauthorized access, misuse, computer virus or other malicious code or other cybersecurity event could jeopardize or result in the unauthorized disclosure, gathering, monitoring, misuse, corruption, loss or destruction of confidential and other information that belongs to us, our customers, our counterparties, or third-party providers that is processed and stored in, and transmitted through, our computer systems and networks.

The occurrence of such an event could also result in damage to our software, computers or systems, or otherwise cause interruptions or malfunctions in our, our customers’, our counterparties’ or third parties’ operations.

This could result in loss of customers and business opportunities, reputational damage, litigation, regulatory fines, penalties or intervention, reimbursement or other compensatory costs, or otherwise adversely affect our business, financial condition or results of operations.

| | |

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| Part I | 20 |

In 2016, three states saw one-time revenue increases for transportation, and numerous ballot measures were passed to increase investment in several Vulcan-served areas including northern and southern California, Georgia, North Carolina and South Carolina.

| --- | --- | --- | --- |

Additionally, the loss of confidential, personal, or proprietary information (whether our own, our employees’, our suppliers’, or our customers’), regardless of the cause, could result in a business interruption, reputational damage, lost revenue, litigation, penalties or higher costs.

Management is not aware of a cybersecurity incident that has had a material adverse impact on our operations.

[removed: MANAGEMENT'S] [added: MANAGEMENT'S] DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS][added: OPERATIONS]

[removed: FINANCIAL] [added: FINANCIAL] SUMMARY FOR [removed: 2018] [added: 2019] (compared to [removed: 2017)][added: 2018)]

[removed: | | § | | Total] [added: Total] revenues increased [removed: $492.6] [added: $546.2] million, or [removed: 13%,] [added: 12%,] to [removed: $4,382.9] [added: $4,929.1] million [removed: |]

[removed: | | § | | Gross] [added: Gross] profit increased [removed: $107.4] [added: $155.0] million, or [removed: 11%,] [added: 14%,] to [removed: $1,100.9] [added: $1,255.9] million [removed: |]

[removed: | | § | | Aggregates] [added: Aggregates] segment sales increased [removed: $417.6] [added: $476.6] million, or [removed: 13%,] [added: 14%,] to [removed: $3,513.6] [added: $3,990.3] million [removed: |]

[removed: | | § | | Aggregates] [added: Aggregates] segment freight-adjusted revenues increased [removed: $274.6] [added: $346.9] million, or [removed: 11%,] [added: 13%,] to [removed: $2,667.3] [added: $3,014.2] million [removed: |]

[removed: | | § | | Shipments] [added: Shipments] increased [removed: 10%,] [added: 7%,] or [removed: 18.2] [added: 14.1] million tons, to [removed: 201.4] [added: 215.5] million tons [removed: |]

[removed: | | § | | Same-store] [added: Same-store] shipments increased 6%, or [removed: 10.7] [added: 12.2] million tons, to [removed: 193.8] [added: 213.5] million tons [removed: |]

[removed: | | § | | Freight-adjusted] [added: Freight-adjusted] sales price increased [removed: 1%,] [added: 6%,] or [removed: $0.19] [added: $0.74] per ton [removed: |]

[removed: | | § | | Same-store] [added: Same-store] freight-adjusted sales price increased [removed: 2%,] [added: 6%,] or [removed: $0.21] [added: $0.74] per ton [removed: |]

[removed: | | § | | Segment] [added: Segment] gross profit increased [removed: $137.3] [added: $154.8] million, or 16%, to [removed: $991.9] [added: $1,146.6] million [removed: |]

[removed: | | § | | Asphalt,] [added: Asphalt,] Concrete and Calcium segment gross profit [removed: decreased $29.9] [added: increased $0.2] million, or [removed: 22%,] [added: 0%,] to [removed: $109.1] [added: $109.3] million, collectively [removed: |]

[removed: | | § | | Selling,] [added: Selling,] administrative and general (SAG) expenses increased [removed: 3%] [added: 11%] to [removed: $333.4] [added: $370.5] million and decreased [removed: 0.75] [added: 0.10] percentage points [removed: (75] [added: (10] basis points) as a percentage of total revenues [removed: |]

[removed: | | § | | Operating] [added: Operating] earnings increased [removed: $108.7] [added: $129.7] million, or 17%, to [removed: $747.7] [added: $877.5] million [removed: |]

[removed: | | § | | Earnings] [added: Earnings] from continuing operations before income taxes were [removed: $623.3] [added: $757.7] million compared to [removed: $361.3] [added: $623.3] million [removed: |]

| [removed: | § | |] Effective tax rate [removed: was] [added: | | | 17.8% | | |] 16.9% [removed: compared with negative 64.2%] | [added: | | \-64.2% | |]

[removed: | | § | | Earnings] [added: Earnings] from continuing operations were [removed: $517.8] [added: $622.5] million, or [removed: $3.87] [added: $4.67] per diluted share, compared to [removed: $593.4] [added: $517.8] million, or [removed: $4.40] [added: $3.87] per diluted share [removed: |]

[removed: | | § | | Discrete] [added: Discrete] items in 2018 include: [removed: |]

[removed: | | § | | $0.6] [added: $0.6] million of tax expense related to the Tax Cuts and Jobs Act (TCJA) [removed: |]

[removed: | | § | | pretax] [added: pretax] interest charges of $7.4 million related to the January and March early debt retirements [removed: |]

[removed: | | § | | pretax] [added: pretax] gains of $2.9 million for the sale of businesses [removed: |]

[removed: | | § | | pretax] [added: pretax] charges of $18.5 million for divested operations [removed: |]

[removed: | | § | | pretax] [added: pretax] gains of $2.3 million for business interruption claims [removed: |]

[removed: | | § | | pretax] [added: pretax] charges of $5.2 million associated with non-routine business development [removed: |]

[removed: | | § | | pretax] [added: pretax] charges of $6.2 million for restructuring [removed: |]

[removed: | | § | | Discrete] [added: Discrete] items in [removed: 2017] [added: 2019] include: [removed: |]

[removed: | | § | | $297.0] [added: $297.0] million of net tax benefits [removed: (including] [added: (TCJA —] $268.2 [removed: million related to TCJA] [added: million,] and [removed: a $28.8 million] partial release of [removed: a net operating loss (NOL)] [added: the Alabama NOL] carryforward valuation [removed: allowance) |][added: allowance — $28.8 million)]

[removed: | | § | | pretax] [added: pretax] interest charges of [removed: $153.1] [added: $7.4] million related to [added: early] debt [removed: purchases |][added: retirements]

[removed: | | § | | pretax] [added: pretax] gains of $10.5 million [removed: for] [added: related to] the sale of real estate and businesses [removed: |]

[removed: | | § | | pretax] [added: pretax] charges of $4.3 million for property donation [removed: |]

[removed: | | § | | pretax] [added: pretax] charges of [removed: $18.1] [added: $3.0] million for divested operations [removed: |]

[removed: | | § | | pretax] [added: pretax] charges of $6.7 million for one-time employee bonuses [removed: |]

[removed: | | § | | pretax] [added: pretax] charges of $3.1 million associated with non-routine business development, net of an asset purchase agreement termination fee [removed: |]

[removed: | | § | | pretax] [added: pretax] charges of $1.9 million for restructuring [removed: |]

[removed: | | § | | Adjusted] [added: Adjusted] EBITDA was [removed: $1,131.7] [added: $1,270.0] million, an increase of [removed: $149.8] [added: $138.3] million, or [removed: 15% |][added: 12%]

[removed: | | § | | Returned] [added: Returned] capital to shareholders via dividends [removed: ($148.1] [added: ($164.0] million versus [removed: $132.3] [added: $148.1] million) and share repurchases [removed: ($134.0] [added: ($2.6] million versus [removed: $60.3] [added: $134.0] million) [removed: |]

For the full year, capital expenditures were [removed: $469.1] [added: $404.3] million.

This amount included [removed: $221.7] [added: $239.3] million of core operating and maintenance capital investments to improve or replace existing property, plant & equipment.

In addition, we invested [removed: $247.4] [added: $165.0] million in internal growth projects to secure new aggregates reserves, develop new production sites, enhance our distribution capabilities and support the targeted growth of our asphalt and concrete operations.

At year end, total debt was [removed: $2,912.4 million,] [added: $2.8 billion,] or [removed: 2.6] [added: 2.2] times [removed: 2018] [added: 2019] Adjusted EBITDA.

pretax gains of $13.4 million for the sale of businesses and property donation

pretax charges of $10.8 million for property donation

pretax charges of $1.7 million associated with non-routine business development

pretax charges of $6.5 million for restructuring

Adjusted (for the discrete pretax items noted above) earnings from continuing operations were $4.70 per diluted share, compared to $4.05 per diluted share

Net earnings were $617.7 million, an increase of $101.9 million, or 20%

2019 marked another year of strong earnings growth and cash generation.

We are particularly proud of our people who worked hard to achieve these results while ensuring another year of world class safety performance.

Widespread improvements in pricing helped drive 8% growth in our industry-leading unit profitability (gross profit per ton) in aggregates and double-digit growth in Adjusted EBITDA.

Industry leadership in safety and pace-setting unit margins are both evidence of a strong and healthy business.

Going forward, our compounding unit margins and our disciplined capital allocation position us well to increase our cash flows and improve our return on invested capital.

Full year revenues were $4.9 billion, up 12% as compared to the prior year, and net earnings were $617.7 million, an increase of 20%.

Adjusted EBITDA increased 12% to $1,270.0 million.

Our weighted-average debt maturity was 14 years and the weighted-average interest rate was 4.4%.

CAPITAL ALLOCATION

We closed two business acquisitions during 2019 for total consideration of $45.3 million.

These acquisitions strengthened both our aggregates position in Tennessee and our ready-mixed concrete position in Virginia.

During 2019, we returned $166.6 million to our shareholders through dividends and share repurchases.

Demand in our markets will continue to benefit from higher levels of highway funding and continued growth in residential and nonresidential markets.

Residential construction should continue to strengthen after some softness in certain of our markets during the second half of 2019.

Private nonresidential construction activity should also improve as leading indicators point to positive growth in 2020.

Demand fundamentals, including population and employment growth, continue to support longer-term growth in residential and nonresidential construction.

We are seeing a positive pricing environment driven by shipment momentum in private demand and visibility of public demand.

This visibility to demand growth sets the stage for solid price improvement in 2020.

Price improvement coupled with our four strategic initiatives (operational excellence, strategic sourcing, commercial excellence and logistics innovation) should continue to increase unit profitability.

In summary, we expect another year of strong earnings growth in 2020.

Vulcan-served markets should continue to benefit from robust public construction demand, led by higher levels of highway funding in our key states.

Our focus remains the same — compounding our unit margins through all parts of the cycle.

COMPOUNDING IMPROVEMENT IN PROFITABILITY

*.*

*As an approximation, a truck has a capacity of 20-25 tons of aggregates; a railcar has a capacity of 4-5 truckloads; a barge has a capacity of 65 truckloads and our ocean vessels have the capacity of 2,500 truckloads.*

STRONG FINANCIAL FOUNDATION

Our strong balance sheet gives us the financial flexibility to implement our strategy and initiatives and allows us to negotiate from a position of strength.

We have a well-established set of priorities with respect to capital allocation, as follows:

1.Operating Capital (maintain and grow value of franchise)

2.Growth Capital (including greenfields and business acquisitions)

3.Dividend Growth with Earnings (with a keen focus on sustainability)

4.Return Excess Cash to Shareholders (primarily via share repurchases)

Our first and highest use of cash is to maintain and protect our valuable franchise by keeping our operations in good working order to ensure the timely delivery of goods and services to our customers.

This cash use takes the form of operating and maintenance capital and the requirements expand and contract as volume changes.

| --- | --- | --- | --- |

| | § | | Net earnings were $515.8 million, a decrease of $85.4 million, or 14% |

In 2018, we executed on our goals through a commitment to our shareholders, customers, employees and the communities we serve.

We delivered growth and enhanced profitability in the face of several severe weather events that disrupted operations in some states for weeks at a time.

With a clear and compelling strategy, a lean and locally-led operational structure, and unparalleled positions in attractive long-term growth markets, we are especially well-situated to benefit as infrastructure demand in key Vulcan states continues to grow, fueled by marked increases in state and local funding and we are well-equipped to overcome market challenges.

Even though the year provided plenty of headwinds for the construction industry, including weather disruptions and a 25% increase in the cost of diesel fuel during the year, we delivered strong top and bottom line growth.

For the year, we increased total revenues, gross profit and earnings from continuing operations before income taxes, and adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA).

Our 2018 net earnings were down compared to 2017 because of the one-time impact of TCJA on our 2017 income tax provision (-64.2% effective tax rate).

As a result of these actions, the weighted-average term of our debt portfolio has more than doubled to approximately 15 years.

Additionally, we advanced our world-class safety performance, improving on our record-setting results from the previous year.

2018 ACQUISITIONS

These acquisitions complement our existing positions in our Alabama, California and Texas markets.

Our aggregates-focused business is well positioned in 2019 for further gains in our industry-leading unit profitability in aggregates and double-digit earnings growth.

Vulcan-served markets are benefitting disproportionally from both strong growth in public construction demand and continued growth in private demand.

Public funding for transportation infrastructure has changed significantly over the last three years.

State transportation funding legislation and local ballot measures are bringing about important increases in public spending for much needed projects and are finally beginning to generate new highway construction and the repair and maintenance work necessary to address the country’s failing infrastructure — all projects that depend upon aggregates as the fundamental building block.

Nine of our key states that generate almost 80% of our revenue have passed legislation over the last three years that raises their transportation infrastructure funding by almost 60% over 2015 levels.

These nine key states — California, Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Texas and Virginia — have all addressed their transportation infrastructure needs and boosted their economies.

Altogether, state laws and local initiatives to increase transportation infrastructure funding have added more than $20 billion annually in just these nine Vulcan states.

To put that in perspective, that’s nearly half as much as the federal transportation law, the FAST Act, provides on an annual basis to all 50 states.

We expect more Vulcan-served states to follow suit in 2019 and following years.

In last November’s elections, 352 state and local transportation funding initiatives appeared on ballots in 31 states, and 79% of them were approved by voters.

We are excited about accelerating public sector growth.

At the same time, demand from private sector projects has continued to be stable in our markets, providing a solid base for overall growth.

In fact, private construction activity continues to improve in several of our important markets, particularly housing and nonresidential construction in the South and West.

Overall, we see significant room for growth, with demand for aggregates still below historical averages, and well below past peaks in demand, even as population and economic activity continue to increase in our key markets.

We believe that we are in the middle stages of the market upturn that began five and a half years ago and see significant upside in revenues and profitability.

Management Expectations for 2019 — We expect solid growth in private demand and strong growth in public demand.

Above-average demand growth in Vulcan markets compared to the rest of the U.S. further supports our positive outlook for aggregates shipment growth.

The underlying direction of aggregates unit profitability remains clear, strongly supported by our strategic and tactical focus on compounding pricing improvements.

We expect double-digit earnings growth in 2019.

OPERATIONAL EXCELLENCE

| Continuing operations | | | $ 3.91 | | | $ 4.48 | | | $ 3.17 | |

| Basic net earnings per share | | | $ 3.90 | | | $ 4.54 | | | $ 3.15 | |

| | § | | pretax interest charges of $7.4 million related to early debt retirements (see Note 6 “Debt” in Item 8 “Financial Statements and Supplementary Data”) |

| | § | | $297.0 million of net tax benefits (TCJA — $268.2 million, and partial release of the Alabama NOL carryforward valuation allowance — $28.8 million) |

| | § | | $11.3 million of tax benefits (utilization of foreign tax credits — $6.5 million, and partial release of the Alabama NOL carryforward valuation allowance — $4.8 million) |

| | § | | pretax gains of $16.2 million related to the sale of real estate |

| | § | | pretax losses of $10.5 million from asset impairment |

| | 2016 | $ 547.3 | | | 2017 | $ 361.3 | |

[removed: QUANTITATIVE] [added: QUANTITATIVE] AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK][added: RISK]

[removed: MARKET RISK][added: MARKET RISK]

We do not enter into derivative financial instruments for [removed: speculative or] trading [added: or speculative] purposes.

At December 31, [removed: 2018,] [added: 2019,] the estimated fair value of our long-term debt including current maturities was [removed: $2,695.8] [added: $3,073.7] million compared to a [removed: book] [added: face] value of [removed: $2,779.4] [added: $2,846.4] million.

The effect of a decline in interest rates of one percentage point would increase the fair value of our debt by approximately [removed: $236.1] [added: $305.4] million.

| Part II | [removed: 62] [added: 63] |

‎

[removed: BUSINESS][added: BUSINESS]

As of December 31, [removed: 2018,] [added: 2019,] we had [removed: 351] [added: 366] active aggregates facilities, [removed: 67] [added: 70] asphalt facilities and [removed: 46] [added: 53] concrete facilities.

[removed: BUSINESS STRATEGY][added: BUSINESS STRATEGY]

[removed: AGGREGATES FOCUS][added: 1. AGGREGATES FOCUS]

Aggregates are used in virtually all types of public and private [removed: construction] [added: construction,] and practically no substitutes for quality aggregates exist.

[removed: BUILD] [added: BUILD] AND HOLD SUBSTANTIAL [removed: RESERVES:] [added: RESERVES:] Our reserves are critical to our long-term success.

We currently have [removed: 16.3] [added: 16.2] billion tons of permitted and proven or probable aggregates reserves.

[removed: TAKE] [added: nTAKE] ADVANTAGE [removed: OF SIZE] [added: OF SIZE] AND [removed: SCALE: We are the largest aggregates supplier in the U.S.] [added: SCALE:] Our [removed: 351] [added: 366] active aggregates facilities as of December 31, [removed: 2018] [added: 2019] provide opportunities to standardize operating practices and procure equipment (fixed and mobile), parts, supplies and services in an efficient and cost-effective manner, both regionally and nationally.

PORTFOLIO MANAGEMENT AND CAPITAL [removed: ALLOCATION][added: ALLOCATION]

During the period 2020 - 2030, Moody's Analytics projects that [removed: 80%] [added: 72%] of the U.S. population growth, [removed: 73%] [added: 68%] of household formation and [removed: 64%] [added: 65%] of new jobs will occur in Vulcan-served states.

The close proximity of our [removed: production facilities and our] aggregates reserves [added: and our production facilities] to this projected population growth creates many opportunities to invest capital in high-return projects.

][added: 46](https://www.sec.gov/Archives/edgar/data/1396009/000139600920000006/vmc-20191231x10kg001.jpg)]

[removed: Source:] [added: *Source:] Moody’s Analytics as of December [removed: 14, 2018][added: 12, 2019*]

We have pursued a strategy to increase our presence in U.S. metropolitan areas that are expected to grow the most rapidly and [removed: by divesting] [added: to divest] assets that are no longer considered part of our long-term growth strategy.

Our top ten revenue producing states accounted for [removed: 86%] [added: 87%] of our [removed: 2018] [added: 2019] revenues while our top five accounted for 61%.

| | [removed: VULCAN’S] [added: VULCAN’S] TOP TEN REVENUE PRODUCING STATES IN [removed: 2018] [added: 2019] | | | | | | | | | | | |

| | [removed: 4.] [added: 5.] | [removed: Tennessee] [added: Georgia] | | | | [removed: 9.] [added: 10.] | | South Carolina | | | | |

Additionally, throughout our history we have completed many bolt-on [added: aggregates] acquisitions that have contributed significantly to our growth.

From [removed: 2015] [added: 2017] to [removed: 2017,] [added: 2019,] we invested over [removed: $1.2] [added: $1.1] billion in [removed: acquisitions and internal projects for long-term growth,] [added: acquisitions,] while further strengthening our portfolio through divestitures and swaps, including swapping our concrete operations in Arizona for asphalt operations in Arizona during 2017.

In [removed: January] 2017, we entered the asphalt market in Tennessee through the acquisition of several asphalt mix operations and a construction paving business.

[removed: During] [added: In] 2018, we entered the asphalt mix and construction paving markets in Alabama and expanded our asphalt operations and service offerings in Texas through the acquisition of several asphalt mix operations and construction paving businesses.

[removed: compounding] [added: 3. compounding] improvement in [removed: profitability][added: profitability]

Our focus on the following [removed: three major profit drivers] [added: four strategic initiatives] has made us one of the most profitable public companies in the industry (as measured by aggregates gross profit per ton).

We manage these [removed: factors] [added: initiatives] locally and align our talent and incentives accordingly.

[removed: LAND MANAGEMENT][added: 4. LAND MANAGEMENT]

[removed: SAFETY,] [added: 5. SAFETY,] HEALTH AND THE [removed: ENVIRONMENT][added: ENVIRONMENT]

And, our community relations programs serve our [removed: neighbors,] [added: neighbors] while ensuring that we grow and thrive in the communities where we operate.

[removed: PRODUCT LINES][added: PRODUCT LINES]

We have four operating (and reportable) segments [added: (Aggregates, Asphalt, Concrete and Calcium)] organized around our principal product [removed: lines:][added: lines.]

[removed: | | 4. | | Calcium – less than 1% of 2018’s] [added: Our 2019] total revenues and [removed: less than 1% of] gross profit [removed: |][added: by segment are illustrated as follows (Calcium revenues and gross profit were less than one percent):]

[removed: See] [added: For actual amounts, see] Note 15 “Segment Reporting” in Item 8 “Financial Statements and Supplementary Data.”

[removed: AGGREGATES][added: AGGREGATES]

[removed: | | § | | as] [added: as] a base material underneath highways, walkways, airport runways, parking lots and railroads [removed: |]

[removed: | | § | | to] [added: to] aid in water filtration, purification and erosion control [removed: |]

[removed: | | § | | as] [added: as] a raw material used in combination with other resources to construct many of the items we rely on to sustain our quality of life including: [removed: |]

[removed: | | § | | houses] [added: houses] and apartments [removed: |]

[removed: | | § | | roads,] [added: roads,] bridges and parking lots [removed: |]

[removed: | | § | | schools] [added: schools] and hospitals [removed: |]

[removed: | | § | | commercial] [added: commercial] buildings and retail space [removed: |]

[removed: | | § | | sewer] [added: sewer] systems [removed: |]

Vulcan is uniquely positioned as the largest aggregates supplier in the U.S. and the most aggregates-focused public company.

*Source: 2018 reported financial information and Company estimates*

2.

| | 1. | Texas | | | | 6. | | Florida | | | | |

| | 2. | California | | | | 7. | | Arizona | | | | |

| | 4. | Tennessee | | | | 9. | | Alabama | | | | |

portfolio management: Since becoming a public company in 1956, Vulcan has principally grown by mergers and acquisitions.

For example, in 1999 we acquired CalMat Co., thereby expanding our aggregates operations into California and Arizona and making us one of the nation’s leading producers of asphalt mix.

In 2007, we acquired Florida Rock Industries, Inc. This acquisition expanded our aggregates business in Florida and our aggregates and ready-mixed concrete businesses in other Mid-Atlantic and Southeastern states.

In 2017, we acquired Aggregates USA — this acquisition greatly expanded our ability to serve customers in Florida, Georgia and South Carolina.

For example, during 2019 we acquired aggregates operations that strengthened our position in Tennessee.

Additionally, throughout our history we have completed many bolt-on downstream acquisitions that have contributed significantly to our growth.

For example, during 2019 we expanded our Virginia ready-mixed concrete operations.

capital allocation: Our long-term strategy around capital allocation has given us the ability to leverage decisions we have made over the past few years.

During 2019, we reinvested $384.1 million into core operating & maintenance capital and internal growth capital, in addition to $469.1 million and $459.6 million reinvested in 2018 and 2017, respectively.

These investments are fundamental actions that sustain and strengthen the business.

They improve the longer-term efficiency, capacity and flexibility of our production, and they support our strong commitment to superior customer service.

Operational Excellence — Continuous and sustainable improvements in both our operating disciplines and our industry-leading safety performance coupled with better asset utilization through improved availability and throughput leads to effective cost control.

Strategic Sourcing — Leveraging common practices and innovation leads to more time in our plants and with our suppliers to optimize the total cost of ownership (right part at the right time).

Commercial Excellence — Clearly defined roles and responsibilities together with access to real time, forward-looking metrics leads to our sales teams spending less time on non-selling activities and more time responding to our customers’ needs.

Logistics Innovation – Partnering with our customers (truck drivers and contractors) to provide a bundled logistics solution with digital shipping records and on-site, mobile visibility leads to streamlined scheduling, speed and accuracy of delivery, and efficient back-office processes.

|  |  |

1.

Approximately 80% of our total aggregates shipments are delivered exclusively from the producing location to the customer by truck.

Exceptions to this typical market structure include areas along the U.S. Gulf Coast and the Eastern Seaboard where there are limited supplies of locally available, high-quality aggregates.

We serve these markets from quarries that have access to cost-effective long-haul transportation — shipping by barge and rail — and from our quarry on Mexico’s Yucatan Peninsula with our fleet of Panamax-class, self-unloading ships.

Limited product substitution: There are limited substitutes for quality aggregates.

Recycled concrete and asphalt have certain applications as a lower-cost alternative to virgin aggregates.

Likewise, the amount of recycled asphalt included in asphalt mix as a substitute for aggregates is limited due to specifications.

Highly fragmented industry: The U.S. aggregates industry is composed of over 5,800 companies that manage close to 10,000 operations.

This fragmented structure provides many opportunities for consolidation.

Companies in the industry commonly enter new markets or expand positions in existing markets through the acquisition of existing facilities.

Production capacity is flexible by adjusting operating hours to meet changing market demand.

We are currently operating considerably below full capacity, making us extremely well positioned to further benefit from economies of scale when additional growth materializes.

Stone, sand and gravel are naturally occurring resources.

However, production does require the use of explosives, hydrocarbon fuels and electric power.

Demand cycles: Long-term growth in demand for aggregates is largely driven by growth in population, jobs and households.

Federal spending is governed by authorization, budget and appropriations laws.

The level of state and local spending on infrastructure varies across the United States and depends on individual state needs and economies.

STATE AND LOCAL TRANSPORTATION FUNDING: Since 2012, 32 states have increased or adjusted taxes on motor fuel to increase revenues available for transportation investment.

1.

2.

| | 1. | California | | | | 6. | | Florida | | | | |

| | 2. | Texas | | | | 7. | | Arizona | | | | |

| | 5. | Georgia | | | | 10. | | Alabama | | | | |

| | § | | portfolio management: Since becoming a public company in 1957, Vulcan has principally grown by mergers and acquisitions. For example, in 1999 we acquired CalMat Co., thereby expanding our aggregates operations into California and Arizona and making us one of the nation’s leading producers of asphalt mix. In 2007, we acquired Florida Rock Industries, Inc. This acquisition expanded our aggregates business in Florida and our aggregates and ready-mixed concrete businesses in other Southeastern and Mid-Atlantic states. In 2017, we acquired Aggregates USA — this acquisition greatly expanded our ability to serve customers in Florida, Georgia and South Carolina. |

| --- | --- | --- | --- |

We closed seven additional acquisitions in 2017 that complement our existing positions in Arizona, California, Illinois, New Mexico, Tennessee, and Virginia.

| | § | | capital allocation: Our long-term strategy around capital allocation has given us the ability to leverage decisions we have made over the past few years. During 2018, we reinvested $469.1 million into core operating, internal growth and maintenance capital expenditures, in addition to $459.6 million reinvested in 2017. These investments are fundamental actions that strengthen the business. They improve the longer-term efficiency, capacity and flexibility of our production, and they support our strong commitment to superior customer service. |

3.

| | § | | Price for Service — We seek to receive full and fair value for the quality of products and services we provide. We should be paid appropriately for helping our customers be successful. Our expanding margins will continue to benefit from the compounding pricing gains associated with cyclical recoveries. |

| | § | | Operating Efficiency and Leverage — We focus on rigorous cost management throughout the economic cycle. Small savings per ton add up to significant cost reductions. We are operating a capital-intensive business well below full capacity and are extremely well positioned to further leverage fixed costs on incremental sales as we move forward. |

| | § | | Sales and Production Mix — We adjust production levels to meet varying market conditions. Managing inventories responsibly results in improved cost performance and an improved return on capital. As the recovery continues and as we see a larger portion of new construction activity in the end-use mix, we will sell the entire production mix much more efficiently and at fuller value. |

Recovery in demand serves as a tailwind for all three major profit drivers.

4.

5.

| | 1. | | Aggregates – 74% of 2018’s total revenues and 90% of gross profit |

| | 2. | | Asphalt – 17% of 2018’s total revenues and 5% of gross profit |

| | 3. | | Concrete – 9% of 2018’s total revenues and 5% of gross profit |

| | § | | Highly fragmented industry: The U.S. aggregates industry is composed of over 5,800 companies that manage more than 10,600 operations. This fragmented structure provides many opportunities for consolidation. Companies in the industry commonly enter new markets or expand positions in existing markets through the acquisition of existing facilities. |

| | § | | STATE AND LOCAL TRANSPORTATION FUNDING: Since 2012, 31 states have approved plans to increase revenues for transportation investment through motor fuel tax increases, revenues outside of fuel taxes, and one-time increases; 13 of those states, representing 81% of our 2018 revenues, are in Vulcan’s footprint. In 2017 alone, 7 state legislatures voted to raise motor fuel taxes for transportation investment. |

In the November 2018 general election, voters in 31 states approved 79% of 352 state and local transportation funding ballot measures.

Including 2018, voters have approved 78% of nearly 1,700 transportation investment ballot measures since 2009.

| | § | | Nonresidential Construction: Private nonresidential building construction includes a wide array of projects. Such projects generally are more aggregates intensive than residential construction. Overall demand in private nonresidential construction generally is driven by job growth, vacancy rates, private infrastructure needs and demographic trends. The growth of the private workforce creates demand for offices, hotels and restaurants. Likewise, population growth generates demand for stores, shopping centers, warehouses and parking decks as well as hospitals, places of worship and entertainment facilities. Large industrial projects, such as a new manufacturing facility, can increase the need for other manufacturing plants to supply parts and assemblies. Construction activity in this end market is influenced by a firm's ability to finance a project and the cost of such financing. This end market also includes capital investments in public nonresidential facilities to meet the needs of a growing population. |

| | § | | Residential Construction: Household formations in Vulcan-served states continue to outpace household formations in the rest of the United States. The majority of residential construction is for single-family housing with the remainder consisting of multi-family construction (i.e., two family houses, apartment buildings and condominiums). Public housing comprises only a small portion of housing demand. Construction activity in this end market is influenced by the cost and availability of mortgage financing and builders’ ability to maintain skilled labor. |

We produce and sell asphalt mix and/or ready-mixed concrete primarily in our Alabama, mid-Atlantic, Southwestern, Tennessee and Western markets.

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

| Vulcan Materials Company | | | | | | $ 100.00 | | | $ 111.00 | | | $ 161.06 | | | $ 213.73 | | | $ 220.99 | | | $ 171.71 | |

| S&P 500 | | | | | | $ 100.00 | | | $ 113.70 | | | $ 115.29 | | | $ 129.13 | | | $ 157.28 | | | $ 150.36 | |

| Wilshire 5000 M&S | | | | | | $ 100.00 | | | $ 108.30 | | | $ 113.50 | | | $ 126.44 | | | $ 161.33 | | | $ 149.23 | |

[removed: LEGAL PROCEEDINGS][added: LEGAL PROCEEDINGS]

We were not subject to any penalties in [removed: 2018] [added: 2019] for failure to disclose transactions identified by the Internal Revenue Service as abusive under Internal Revenue Code Section 6707A.

| [removed: New Jersey] [added: New Jersey] (State or other jurisdiction of incorporation or organization) | | [removed: 20-8579133] [added: | 20-8579133] (I.R.S. Employer Identification No.) | [added: | |]

| [removed: 1200] [added: 1200] Urban Center [removed: Drive, Birmingham, Alabama 35242] [added: Drive, Birmingham, Alabama] (Address of Principal Executive Offices) [added: | | | 35242] (Zip Code) [removed: (205) 298-3000 (Registrant’s telephone number, including area code)] | | |

| Securities registered pursuant to Section 12(b) of the Act: | | | [added: | | |]

| Title of each class [removed: Common] [added: Common] Stock, $1 par [removed: value] [added: value] | [added: | Trading Symbol VMC | |] Name of each exchange on which registered [removed: New] [added: New] York Stock [removed: Exchange] [added: Exchange] | |

| Securities registered pursuant to Section 12(g) of the Act: [removed: None] [added: None] | | | [added: | | |]

| Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [removed: ☑] [added: þ] No [removed: ☐] [added: o] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [removed: ☐] [added: o] No [removed: ☑] [added: þ] 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 [removed: ☑] [added: þ] No [removed: ☐] [added: 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 [removed: ☑] [added: þ] No [removed: ☐ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☑] [added: 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. [removed: Large accelerated filer ☑ Accelerated filer ☐ Smaller reporting company ☐ Non-accelerated filer ☐ Emerging growth company ☐ 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. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑] | | | [added: | | |]

| Aggregate market value of voting and non-voting common stock held by non-affiliates as of June [removed: 29, 2018:] [added: 28, 2019:] | [removed: $17,035,024,582] [added: ‎$18,124,821,274] |

| Number of shares of common stock, $1.00 par value, outstanding as of February [removed: 12, 2019:] [added: 13, 2020:] | [removed: 131,830,868] [added: 132,394,732] |

| Portions of the registrant’s annual proxy statement for the annual meeting of its shareholders to be held on May [removed: 10, 2019,] [added: 8, 2020,] are incorporated by reference into Part III of this Annual Report on Form 10-K. | |

| VULCAN MATERIALS COMPANY ANNUAL REPORT ON FORM 10-k [removed: fISCAL] [added: ‎fISCAL] YEAR ENDED DECEMBER 31, [removed: 2018] [added: 2019] CONTENTs | | | |

| | 1B | [Unresolved Staff Comments](#PartI_Item1B) | [removed: 20] [added: 21] |

| | 2 | [Properties](#PartI_Item2) | [removed: 21] [added: 22] |

| | 3 | [Legal Proceedings](#PartI_Item3) | [removed: 24] [added: 25] |

| | 4 | [Mine Safety Disclosures](#PartI_Item4) | [removed: 24] [added: 25] |

| II | 5 | [Market for the Registrant’s Common Equity, Related [added: ‎] Stockholder Matters and Issuer Purchases of Equity Securities](#PartII_Item5) | [removed: 27] [added: ‎27] |

| | 7 | [Management’s Discussion and Analysis of Financial Condition [added: ‎] and Results of Operations](#PartII_Item7) | [removed: 29] [added: ‎29] |

| | 7A | [Quantitative and Qualitative Disclosures about Market Risk](#PartII_Item7A) | [removed: 62] [added: 63] |

| | 8 | [Financial Statements and Supplementary Data](#PartII_Item8) | [removed: 63] [added: 64] |

| | 9 | [Changes in and Disagreements with Accountants on Accounting and [added: ‎] Financial Disclosure](#PartII_Item9) | [removed: 118] [added: ‎119] |

| | 9A | [Controls and Procedures](#PartII_Item9A) | [removed: 118] [added: 119] |

| | 9B | [Other Information](#PartII_Item9B) | [removed: 120] [added: 121] |

| III | 10 | [Directors, Executive Officers and Corporate Governance](#PartIII_Item10) | [removed: 121] [added: 122] |

| | 11 | [Executive Compensation](#PartIII_Item11) | [removed: 121] [added: 122] |

| | 12 | [Security Ownership of Certain Beneficial Owners and [added: ‎] Management and Related Stockholder Matters](#PartIII_Item12) | [removed: 121] [added: ‎122] |

| | 13 | [Certain Relationships and Related Transactions, and Director Independence](#PartIII_Item13) | [removed: 121] [added: 122] |

| | 14 | [Principal Accounting Fees and Services](#PartIII_Item14) | [removed: 121] [added: 122] |

| IV | 15 | [Exhibits and Financial Statement Schedules](#PartIV_Item15) | [removed: 122] [added: 123] |

| | 16 | [Form 10-K Summary](#PartIV_Item16) | [removed: 127] [added: 128] |

[removed: “SAFE] [added: “SAFE] HARBOR” STATEMENT UNDER THE PRIVATE [removed: SECURITIES][added: SECURITIES‎LITIGATION REFORM ACT OF 1995]

[removed: | | § | | general] [added: general] economic and business conditions [removed: |]

[removed: | | § | | the] [added: the] timing and amount of federal, state and local funding for infrastructure [removed: |]

[removed: | | § | | changes] [added: changes] in the level of spending for private residential and private nonresidential construction [removed: |]

[removed: | | § | | changes] [added: changes] in our effective tax rate [removed: |]

[removed: | | § | | the] [added: the] increasing reliance on information technology [removed: infrastructure for our ticketing, procurement, financial statements and other processes could adversely affect operations in] [added: infrastructure, including] the [removed: event] [added: risks] that the infrastructure does not work as [removed: intended or] [added: intended,] experiences technical difficulties or is subjected to cyber-attacks [removed: |]

[removed: | | § | | the] [added: the] impact of the state of the global economy on our businesses and financial condition and access to capital markets [removed: |]

[removed: | | § | | the] [added: the] highly competitive nature of the construction [removed: materials] industry [removed: |]

[removed: | | § | | the] [added: the] impact of future regulatory or legislative actions, including those relating to climate change, wetlands, greenhouse gas emissions, the definition of minerals, tax policy or international trade [removed: |]

[removed: | | § | | the] [added: the] outcome of pending legal proceedings [removed: |]

[removed: | | § | | pricing] [added: pricing] of our products [removed: |]

[removed: | | § | | weather] [added: weather] and other natural phenomena, including the impact of climate change [removed: |][added: and availability of water]

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K | | | | | |

| þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2019 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) | | | | | |

| (205) 298-3000 (Registrant’s telephone number, including area code) | | | | | |

| Large accelerated filer þ Non-accelerated filer o | | | Accelerated filer o Smaller reporting company 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 Act). | | | | | ‎Yes o No þ |

| | — | [Information about our Executive Officers](#Executive_Officers) | 26 |

| | — | [Signatures](#Signatures) | 129 |

our dependence on the construction industry, which is subject to economic cycles

the impact of a discontinuation of the London Interbank Offered Rate (LIBOR)

10-K 1 vmc-20181231x10k.htm 10-K

| | | |

| --- | --- | --- |

| UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2018 Commission file number: 001-33841 VULCAN MATERIALS COMPANY (Exact Name of Registrant as Specified in Its Charter) | | |

| --- | --- | --- | --- |

| | | [Executive Officers of the Registrant](#Executive_Officers) | 25 |

| | — | [Signatures](#Signatures) | 128 |

LITIGATION REFORM ACT OF 1995

[removed: UNRESOLVED] [added: UNRESOLVED] STAFF [removed: COMMENTS][added: COMMENTS]

| Part I | [removed: 20] [added: 21] |

[removed: PROPERTIES][added: PROPERTIES]

[removed: AGGREGATES][added: AGGREGATES]

[removed: We principally] [added: As the largest U.S. supplier of construction aggregates, we] serve markets in [removed: 20] [added: twenty] states, Washington D.C. and the local markets surrounding our operations in Mexico and the Bahamas.

][added: 39](https://www.sec.gov/Archives/edgar/data/1396009/000139600920000006/vmc-20191231x10kg009.jpg)]

Our current estimate of [removed: 16.3] [added: 16.2] billion tons of proven and probable aggregates reserves reflects [removed: an increase] [added: a decrease] of [removed: 0.3] [added: 0.1] billion tons from the prior year’s estimate.

| Part I | [removed: 21] [added: 24] |

The [removed: 16.3] [added: 16.2] billion tons of estimated proven and probable aggregates reserves reported at the end of [removed: 2018] [added: 2019] include reserves at inactive and greenfield (undeveloped) sites.

The table below presents, by division, the tons of proven and probable aggregates reserves as of December 31, [removed: 2018] [added: 2019] and the types of facilities operated.

| | | | [removed: (millions] [added: *(millions] of [removed: tons)] [added: tons)*] | | | | | | | | | | | | [removed: Count] [added: *Count] of Aggregates Operating [removed: Facilities 2] [added: Facilities* *2*] | | | | | | | |

| | | | [removed: Aggregates Reserves] [added: *Aggregates Reserves*] | | | | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: Sand and] [added: *Sand and*] | | | | |

| [removed: Division 1] [added: *Division* *1*] | | | [removed: Proven] [added: *Proven*] | | | [removed: Probable] [added: *Probable*] | | | [removed: Total] [added: *Total*] | | | [removed: Production] [added: *Production*] | | | [removed: Stone] [added: *Stone*] | | | [removed: Gravel] [added: *Gravel*] | | | [removed: Sales Yards] [added: *Sales Yards*] | |

| Southern Gulf Coast | | | [removed: 1,326.8] | | | [removed: 45.4] | | | [removed: 1,372.2] | | | [removed: 16.3] | | | [removed: 22] [added: 2] | | | 0 | | | [removed: 19] [added: 0] | |

| [removed: 1] [added: *1*] | [removed: The] [added: *The] divisions are defined by states/countries as [removed: follows: Central Division] [added: follows:* *Central Division*] — [removed: Arkansas,] [added: *Arkansas,] Illinois, Kentucky and [removed: Tennessee International Division] [added: Tennessee* *International Division*] — [removed: Mexico Mideast Division] [added: *Mexico* *Mideast Division*] — [removed: Delaware,] [added: *Delaware,] Maryland, North Carolina, Pennsylvania, Virginia and Washington [removed: D.C. Mountain] [added: D.C.* *Mountain] West [removed: Division] [added: Division*] — [removed: Arizona] [added: *Arizona] and New [removed: Mexico Southeast Division] [added: Mexico* *Southeast Division*] — [removed: Florida] [added: *Florida] (excluding panhandle), Georgia, South Carolina and the [removed: Bahamas Southern] [added: Bahamas* *Southern] Gulf Coast [removed: Division] [added: Division*] — [removed: Alabama,] [added: *Alabama,] Florida Panhandle, Louisiana and [removed: Mississippi Southwest Division] [added: Mississippi* *Southwest Division*] — [removed: Oklahoma] [added: *Oklahoma] and [removed: Texas Western Division] [added: Texas* *Western Division*] — [removed: California] [added: *California*] | |

| [removed: 2] [added: *2*] | [removed: In] [added: *In] addition to [removed: the facilities] [added: the* *aggregates* *facilities] included in the table above, we [removed: operated 30 recycled concrete] [added: operated* *46 recycled* *concrete] plants which are not dependent on [removed: reserves.] [added: reserves.*] | |

| [removed: 3] [added: *3*] | [removed: Includes] [added: *Includes] a maximum [removed: of 340.1 million] [added: of* *327.0* *million] tons of reserves [removed: encumbered by volumetric] [added: encumbered* *by volumetric] production [removed: payments as] [added: payments* *as] defined in [removed: Note 2 “Revenues”] [added: Note* *2* *“Revenues”] in Item 8 “Financial Statements and Supplementary [removed: Data.”] [added: Data.”*] | |

Of the [removed: 16.3] [added: 16.2] billion tons of aggregates reserves at December 31, [removed: 2018, 9.0] [added: 2019, 9.1] billion tons or [removed: 55%] [added: 56%] are located on owned land and [removed: 7.3] [added: 7.1] billion tons or [removed: 45%] [added: 44%] are located on leased land.

None of our aggregates facilities, other than Playa del Carmen, contributed more than 5% to our total revenues in [removed: 2018.][added: 2019.]

| [removed: (millions] [added: *(millions] of [removed: tons)] [added: tons)*] | | | | | | | | | | | | | | | | | | | | |

| [removed: Location] [added: *Location] (nearest major metropolitan [removed: area)] [added: area)*] | | | | | | | | | | [removed: Proven] [added: *Proven*] | | | [removed: Probable] [added: *Probable*] | | | [removed: Total] [added: *Total*] | | | [removed: Production] [added: *Production*] | |

| Playa del Carmen (Cancun), Mexico | | | | | | | | | | [removed: 554.2] [added: 540.2] | | | 0.0 | | | [removed: 554.2] [added: 540.2] | | | [removed: 12.7] [added: 14.0] | |

| Hanover (Harrisburg), Pennsylvania | | | | | | | | | | [removed: 226.3] [added: 223.6] | | | 236.4 | | | [removed: 462.7] [added: 460.0] | | | [removed: 2.7] [added: 2.8] | |

| McCook (Chicago), Illinois | | | | | | | | | | [removed: 105.8] [added: 101.2] | | | 266.5 | | | [removed: 372.3] [added: 367.7] | | | [removed: 5.0] [added: 4.7] | |

| Corona (Los Angeles), California | | | | | | | | | | 12.5 | | | [removed: 321.8] [added: 319.5] | | | [removed: 334.3] [added: 332.0] | | | 2.2 | |

| Gold Hill (Charlotte), North Carolina | | | | | | | | | | [removed: 148.6] [added: 147.7] | | | [removed: 121.2] [added: 121.1] | | | [removed: 269.8] [added: 268.8] | | | 1.0 | |

| Postell (Macon), Georgia | | | | | | | | | | [removed: 195.3] [added: 190.9] | | | 72.3 | | | [removed: 267.6] [added: 263.2] | | | [removed: 3.8] [added: 4.5] | |

| Norcross (Atlanta), Georgia | | | | | | | | | | [removed: 186.9] [added: 183.4] | | | 27.7 | | | [removed: 214.6] [added: 211.1] | | | [removed: 2.8] [added: 3.6] | |

[removed: ASPHALT,] [added: ASPHALT,] CONCRETE AND [removed: CALCIUM][added: CALCIUM]

As of December 31, [removed: 2018,] [added: 2019,] we operated a number of facilities producing asphalt mix, ready-mixed concrete and calcium in several of our divisions as reflected in the table below:

| | | | | | | | | | | | | | | | [removed: Asphalt 2] [added: *Asphalt* *2*] | | | [removed: Concrete 3] [added: *Concrete* *3*] | | | [removed: Calcium 4] [added: *Calcium* *4*] | |

| [removed: Division 1] [added: *Division* *1*] | | | | | | | | | | | | | | | [removed: Facilities] [added: *Facilities*] | | | [removed: Facilities] [added: *Facilities*] | | | [removed: Facilities] [added: *Facilities*] | |

| Central | | | | | | | | | | | | | | | [removed: 10] [added: 11] | | | 0 | | | 0 | |

| Mideast | | | | | | | | | | | | | | | 0 | | | [removed: 31] [added: 39] | | | 0 | |

| Mountain West | | | | | | | | | | | | | | | [removed: 21] [added: 20] | | | 2 | | | 0 | |

| Southern Gulf Coast | | | [added: 1,376.2] | | | [added: 45.0] | | | [added: 1,421.2] | | | [added: 18.0] | | | [removed: 3] [added: 23] | | | 0 | | | [removed: 0] [added: 19] | |

| Southwest | | | | | | | | | | | | | | | [removed: 13] [added: 15] | | | 7 | | | 0 | |

| Western | | | | | | | | | | | | | | | [removed: 20] [added: 22] | | | [removed: 5] [added: 4] | | | 0 | |

| [removed: Total] [added: Total] | | | | | | | | | | | | | | | [removed: 67] [added: 70] | | | [removed: 46] [added: 53] | | | [removed: 1] [added: 1] | |

| [removed: 1] [added: *1*] | [removed: International Division] [added: *International* *Division] has no asphalt, concrete [removed: or calcium facilities.] [added: or* *calcium* *facilities.*] |

| [removed: 2] [added: *2*] | [removed: Asphalt] [added: *Asphalt] facilities for the Central, Southern Gulf Coast and Southwest Divisions are [removed: comprised] [added: comprised] of asphalt mix [removed: facilities and] [added: facilities* *and] construction paving [removed: businesses.] [added: businesses.*] |

| [removed: 3] [added: *3*] | [removed: Southeast] [added: *Southeast] Division Concrete is [removed: comprised of a] [added: comprised of* *a] ready-mixed concrete plant in the [removed: Bahamas.] [added: Bahamas.*] |

| Central | | | 2,838.9 | | | 819.6 | | | 3,658.5 | | | 38.9 | | | 53 | | | 4 | | | 9 | |

| International | | | 540.2 | | | 0.0 | | | 540.2 | | | 14.0 | | | 1 | | | 0 | | | 0 | |

| Mideast | | | 2,464.5 | | | 981.3 | | | 3,445.8 | | | 39.4 | | | 34 | | | 3 | | | 24 | |

| Mountain West | | | 173.2 | | | 119.1 | | | 292.3 | | | 9.1 | | | 2 | | | 12 | | | 2 | |

| Southeast 3 | | | 3,007.0 | | | 874.1 | | | 3,881.1 | | | 52.6 | | | 44 | | | 9 | | | 22 | |

| Southwest | | | 1,406.6 | | | 0.0 | | | 1,406.6 | | | 23.9 | | | 15 | | | 1 | | | 22 | |

| Western | | | 1,017.1 | | | 489.7 | | | 1,506.8 | | | 21.1 | | | 6 | | | 13 | | | 2 | |

| Total | | | 12,823.7 | | | 3,328.8 | | | 16,152.5 | | | 217.0 | | | 178 | | | 42 | | | 100 | |

| | | | | | | | | | | *Reserves at 12/31/2019* | | | | | | | | | *2019* | |

| Medina (San Antonio), Texas | | | | | | | | | | 247.3 | | | 0.0 | | | 247.3 | | | 1.0 | |

| Macon, Georgia | | | | | | | | | | 117.4 | | | 128.0 | | | 245.4 | | | 1.9 | |

| | | | | | | | | | | | | *Reserves at 12/31/2019* | | | | | | | | | *2019* | |

| Brooksville | | | | | | | | | | | | 4.8 | | | 7.1 | | | 11.9 | | | 0.3 | |

As the largest U.S. supplier of construction aggregates, we have operating facilities across the U.S. and in Mexico and the Bahamas.

| Central | | | 2,875.6 | | | 859.9 | | | 3,735.5 | | | 38.3 | | | 53 | | | 5 | | | 9 | |

| International | | | 554.2 | | | 0.0 | | | 554.2 | | | 12.7 | | | 1 | | | 0 | | | 0 | |

| Mideast | | | 2,519.9 | | | 988.8 | | | 3,508.7 | | | 35.4 | | | 34 | | | 5 | | | 22 | |

| Mountain West | | | 177.0 | | | 125.8 | | | 302.8 | | | 9.4 | | | 2 | | | 12 | | | 2 | |

| Southeast 3 | | | 3,067.1 | | | 882.5 | | | 3,949.6 | | | 49.8 | | | 43 | | | 11 | | | 22 | |

| Southwest | | | 1,322.4 | | | 0.0 | | | 1,322.4 | | | 22.5 | | | 15 | | | 1 | | | 23 | |

| Western | | | 1,033.6 | | | 504.1 | | | 1,537.7 | | | 22.2 | | | 5 | | | 13 | | | 2 | |

| Total | | | 12,876.6 | | | 3,406.5 | | | 16,283.1 | | | 206.6 | | | 175 | | | 47 | | | 99 | |

| | | | | | | | | | | Reserves at 12/31/2018 | | | | | | | | | 2018 | |

| Macon, Georgia | | | | | | | | | | 119.2 | | | 128.0 | | | 247.2 | | | 1.8 | |

| 1604 Stone (San Antonio), Texas | | | | | | | | | | 208.1 | | | 0.0 | | | 208.1 | | | 1.4 | |

| | | | | | | | | | | | | Reserves at 12/31/2018 | | | | | | | | | 2018 | |

| Brooksville | | | | | | | | | | | | 5.0 | | | 7.2 | | | 12.2 | | | 0.3 | |

[removed: MINE] [added: MINE] SAFETY [removed: DISCLOSURES][added: DISCLOSURES]

The names, positions and ages, as of February 20, [removed: 2019,] [added: 2020,] of our executive officers are as follows:

| [removed: Name] [added: *Name*] | [removed: Position] [added: *Position*] | [removed: Age] [added: *Age*] |

| J. Thomas Hill | Chairman, President and Chief Executive Officer | [removed: 59] [added: 60] |

| Suzanne H. Wood | Senior Vice President and Chief Financial Officer | [removed: 58] [added: 59] |

| Stanley G. Bass | Chief Growth Officer | [removed: 57] [added: 58] |

| Randy L. Pigg | Vice President, Controller and Principal Accounting Officer | [removed: 46] [added: 47] |

Thomas Hill was elected Chairman of the Board of Directors effective January 1, [removed: 2016.][added: 2016 and President and Chief Executive Officer in July 2014.]

[removed: Prior to that,] [added: Previously,] he served as Executive Vice President and Chief Operating Officer [removed: (January] [added: from January] 2014 [removed: –] [added: to] July [removed: 2014),] [added: 2014, and] Senior Vice President – South Region [removed: (December] [added: from December] 2011 [removed: –] [added: to] December [removed: 2013).][added: 2013.]

Prior to that, he served in a number of positions with Vulcan including President, Florida Rock Division [removed: (September] [added: from September] 2010 [removed: –] [added: to] December [removed: 2011).][added: 2011.]

Wood was elected Senior Vice President, Chief Financial Officer effective September [removed: 2018.][added: 2018 and also served as Secretary from September 2019 to December 2019.]

He served as Senior Vice President – Western and Mountain West Divisions from January 2015 to February [removed: 2016.][added: 2016, and Senior Vice President – West Region from September 2013 to December 2014.]

[removed: He] [added: Prior to that, he] served as Senior Vice President – [added: Central and] West [removed: Region] [added: Regions] from [removed: September] [added: February] 2013 to [added: September 2013 and Senior Vice President – Central Region from] December [removed: 2014.][added: 2011 to February 2013.]

Prior to that, he served in a number of positions with Vulcan including President, Midsouth and Southwest Divisions [removed: (September] [added: from September] 2010 [removed: –] [added: to] December [removed: 2011).][added: 2011.]

[removed: He] [added: Prior to that, he] served in a number of positions with Vulcan, including President – Florida Rock Division, [removed: prior to] [added: before] serving as Chief Executive Officer of FRP Holdings, Inc. from October 2010 to March 2017 and President and Chief Executive Officer of Patriot Transportation Holding, Inc. from December 2014 to March 2017.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

| Thompson S. Baker II | Chief Operating Officer | 61 |

| Denson N. Franklin III | Senior Vice President, General Counsel and Secretary | 56 |

Baker II was appointed Chief Operating Officer effective May 2019.

He previously served as Senior Vice President from March 2017 to April 2019.

Denson N.

Franklin III joined us in December 2019 as Senior Vice President, General Counsel and Secretary.

Prior to that he was a partner at Bradley Arant Boult Cummings LLP, a law firm based in Birmingham, Alabama.

While at Bradley, he served as Vulcan’s primary outside counsel for more than 20 years and advised other companies in the construction materials, building and engineering industries.

| | |

| --- | --- |

| Part I | 24 |

EXECUTIVE OFFICERS OF THE REGISTRANT

| --- | --- | --- |

| Michael R. Mills | Chief Administrative Officer | 58 |

| Thompson S. Baker II | Senior Vice President | 60 |

| Jerry F. Perkins Jr. | General Counsel and Secretary | 49 |

| David P. Clement 1 | President, Central Division | 58 |

| C. Brockway Lodge, Jr. 1 | President, Western Division | 46 |

| | | |

| 1 | These Division Presidents are designated as Executive Officers as a result of their significant policy-making function and direct reporting relationship to J. Thomas Hill. | |

He was elected President and Chief Executive Officer in July 2014.

Prior to that, he served as Senior Vice President – Central and West Regions (February 2013 – September 2013), Senior Vice President – Central Region (December 2011 – February 2013).

Michael R.

Mills was elected Chief Administrative Officer in February 2016.

He served as Senior Vice President and General Counsel from November 2012 to February 2016; and as Senior Vice President – East Region from December 2011 to October 2012.

Prior to that, he was President, Southeast Division.

Baker II was elected Senior Vice President in March 2017.

Jerry F.

Perkins Jr. was elected General Counsel and Secretary in February 2016.

He served as Assistant General Counsel and Secretary since 2011.

David P.

Clement was named President, Central Division effective January 1, 2015.

He served as Senior Vice President – Central Region from September 2013 through December 2014.

During the five years prior to such role, he served in a number of positions with Vulcan including Vice President and General Manager, Midwest Division and Vice President of Operations, Midwest Division.

C.

Brockway (Brock) Lodge, Jr. was named President, Western Division in February 2016.

He served as Vice President and General Manager, Western Division from April 2015 to February 2016.

Before that, he was Senior Area General Manager – Central Division (June 2013 – March 2015) and Director of Sales and Marketing – Midsouth Division (April 2010 – May 2013).

[removed: MARKET] [added: MARKET] FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER [removed: MATTERS][added: MATTERS‎ AND ISSUER PURCHASES OF EQUITY SECURITIES]

[removed: AND ISSUER] [added: ISSUER] PURCHASES OF EQUITY [removed: SECURITIES][added: SECURITIES]

As of February [removed: 12, 2019,] [added: 13, 2020,] the number of shareholders of record was [removed: 2,601.][added: 2,474.]

Purchases of our equity securities during the quarter ended December 31, [removed: 2018] [added: 2019] are summarized below.

| | | | | | | | [removed: Total Number] [added: *Total Number*] | | | [removed: Maximum] [added: *Maximum*] | |

| | | | | | | | [removed: of Shares] [added: *of Shares*] | | | [removed: Number of] [added: *Number of*] | |

| | [removed: Total] [added: *Total*] | | | | | | [removed: Purchased as] [added: *Purchased as*] | | | [removed: Shares] [added: *Shares] that [removed: May] [added: May*] | |

| | [removed: Number of] [added: *Number of*] | | | [removed: Average] [added: *Average*] | | | [removed: Part] [added: *Part] of [removed: Publicly] [added: Publicly*] | | | [removed: Yet] [added: *Yet] Be [removed: Purchased] [added: Purchased*] | |

| | [removed: Shares] [added: *Shares*] | | | [removed: Price Paid] [added: *Price Paid*] | | | [removed: Announced Plans] [added: *Announced Plans*] | | | [removed: Under] [added: *Under] the [removed: Plans] [added: Plans*] | |

| [removed: Period] [added: *Period*] | [removed: Purchased] [added: *Purchased*] | | | [removed: Per Share] [added: *Per Share*] | | | [removed: or Programs] [added: *or Programs*] | | | [removed: or Programs 1] [added: *or Programs* *1*] | |

| [removed: 1] [added: *1*] | [removed: On] [added: *On] February [removed: 10, 2017,] [added: 10,* *2017,] our Board of Directors authorized us to purchase up [removed: to 8,243,243] [added: to* *8,243,243] shares of our common stock to refresh the number of shares we were authorized to purchase [removed: to 10,000,000. As] [added: to* *10,000,000.* *As] of December 31, [removed: 2018,] [added: 2019,] there [removed: were 8,297,789 shares] [added: were* *8,279,189* *shares] remaining [removed: under this authorization.] [added: under* *this authorization.] Depending upon market, business, legal and other conditions, we [removed: may purchase shares from] [added: may purchase shares* *from] time to time [removed: through the open market (including plans] [added: through* *the* *open market* *(including* *plans] designed to comply with Rule 10b5-1 of the Securities Exchange Act of [removed: 1934)] [added: 1934)] and/or [removed: through privately] [added: through* *privately] negotiated [removed: transactions. The] [added: transactions.* *The] authorization has no time limit, does not obligate us to purchase any specific number of shares, and may be suspended or discontinued at any [removed: time.] [added: time.*] | |

We did not have any unregistered sales of equity securities during the fourth quarter of [removed: 2018.][added: 2019.]

| 2019 | | | | | | | | | | | |

| Oct 1 - Oct 31 | 0 | | | $ 0.00 | | | 0 | | | 8,279,189 | |

| Nov 1 - Nov 30 | 0 | | | $ 0.00 | | | 0 | | | 8,279,189 | |

| Dec 1 - Dec 31 | 0 | | | $ 0.00 | | | 0 | | | 8,279,189 | |

| Total | 0 | | | $ 0.00 | | | 0 | | | | |

ISSUER PURCHASES OF EQUITY SECURITIES

| 2018 | | | | | | | | | | | |

| Oct 1 - Oct 31 | 0 | | | $ 0.00 | | | 0 | | | 8,623,227 | |

| Nov 1 - Nov 30 | 325,438 | | | $ 104.68 | | | 325,438 | | | 8,297,789 | |

| Dec 1 - Dec 31 | 0 | | | $ 0.00 | | | 0 | | | 8,297,789 | |

| Total | 325,438 | | | $ 104.68 | | | 325,438 | | | | |

[removed: SELECTED] [added: SELECTED] FINANCIAL [removed: DATA][added: DATA]

| | | | | [removed: 2018] [added: 2019] | | | [removed: 2017] [added: *2018*] | | | [removed: 2016] [added: *2017*] | | | [removed: 2015] [added: *2016*] | | | [removed: 2014] [added: *2015*] | |

| [removed: As] [added: *As] of and for the years ended December [removed: 31] [added: 31*] | | | | | | | | | | | | | | | | | |

| [removed: in] [added: *in] millions, except per share [removed: data] [added: data*] | | | | | | | | | | | | | | | | | |

| Total revenues | | | [added: $ | 4,929.1 | |] $ | 4,382.9 | | $ | 3,890.3 | | $ | 3,592.7 | | $ | 3,422.2 | | [removed: $ | 2,994.2 | |]

| Gross profit [removed: 1] | | | [added: $ | 1,255.9 | |] $ | 1,100.9 | | $ | 993.5 | | $ | 988.9 | | $ | 857.5 | | [removed: $ | 587.6 | |]

| Gross profit margin | | | | [added: 25.5% | | |] 25.1% | | | 25.5% | | | 27.5% | | | 25.1% | | [removed: | 19.6% | |]

| Earnings from continuing operations [removed: 2] [added: 1] | | | [added: $ | 622.5 | |] $ | 517.8 | | $ | 593.4 | | $ | 422.4 | | $ | 232.9 | | [removed: $ | 207.1 | |]

| net of tax [removed: 3] [added: 2] | | | [added: $ | (4.8) | |] $ | (2.0) | | $ | 7.8 | | $ | (2.9) | | $ | (11.7) | | [removed: $ | (2.2) | |]

| Net earnings | | | [added: $ | 617.7 | |] $ | 515.8 | | $ | 601.2 | | $ | 419.5 | | $ | 221.2 | | [removed: $ | 204.9 | |]

| Continuing operations | | | [added: $ | 4.71 | |] $ | 3.91 | | $ | 4.48 | | $ | 3.17 | | $ | 1.75 | | [removed: $ | 1.58 | |]

| Discontinued operations | | | | [added: (0.04) | | |] (0.01) | | | 0.06 | | | (0.02) | | | (0.09) | | [removed: | (0.02) | |]

| Basic net earnings [removed: (loss)] per share | | | [added: $ | 4.67 | |] $ | 3.90 | | $ | 4.54 | | $ | 3.15 | | $ | 1.66 | | [removed: $ | 1.56 | |]

| Continuing operations | | | [added: $ | 4.67 | |] $ | 3.87 | | $ | 4.40 | | $ | 3.11 | | $ | 1.72 | | [removed: $ | 1.56 | |]

| Discontinued operations | | | | [added: (0.04) | | |] (0.02) | | | 0.06 | | | (0.02) | | | (0.08) | | [removed: | (0.02) | |]

| Diluted net earnings [removed: (loss)] per share | | | [added: $ | 4.63 | |] $ | 3.85 | | $ | 4.46 | | $ | 3.09 | | $ | 1.64 | | [removed: $ | 1.54 | |]

| Cash and cash equivalents | | | [added: $ | 271.6 | |] $ | 40.0 | | $ | 141.6 | | $ | 259.0 | | $ | 284.1 | | [removed: $ | 141.3 | |]

| Total assets [added: 3] | | | [added: $ | 10,648.8 | |] $ | 9,832.1 | | $ | 9,504.9 | | $ | 8,471.5 | | $ | 8,301.6 | | [removed: $ | 8,041.1 | |]

| Working capital | | | [added: $ | 843.8 | |] $ | 476.6 | | $ | 737.2 | | $ | 764.9 | | $ | 731.1 | | [removed: $ | 468.6 | |]

| Current maturities and short-term debt | | | [removed: $] [added: $] | [removed: 133.0] [added: 0.0] | | $ | [removed: 41.4] [added: 133.0] | | $ | [removed: 0.1] [added: 41.4] | | $ | 0.1 | | $ | [removed: 150.1] [added: 0.1] | |

| Long-term debt [added: 4] | | | [added: $ | 2,784.3 | |] $ | 2,779.4 | | $ | 2,813.5 | | $ | 1,982.8 | | $ | 1,980.3 | | [removed: $ | 1,834.6 | |]

| Equity | | | [added: $ | 5,621.9 | |] $ | 5,202.9 | | $ | 4,968.9 | | $ | 4,572.5 | | $ | 4,454.2 | | [removed: $ | 4,176.7 | |]

| Cash dividends declared per share | | | [added: $ | 1.24 | |] $ | 1.12 | | $ | 1.00 | | $ | 0.80 | | $ | 0.40 | | [removed: $ | 0.22 | |]

| [removed: 1] [added: *3*] | [removed: As] [added: *As] a result of our first quarter [removed: 2018] [added: 2019] adoption of ASU [removed: 2017-07 (see] [added: 2016-02 (see] Note 1 “Summary of Significant Accounting Policies” in Item 8 “Financial Statements and Supplementary Data” under the caption New Accounting [removed: Standards), gross profit was reduced by $7.0 million and $11.9 million for the years ended] [added: Standards), total assets* *and total liabilities* *as of] December 31, [removed: 2017 and 2016, respectively.] [added: 2019 included $408.2* *million* *and $418.0, respectively,* *of reported right-of-use assets* *and related liabilities.] We [removed: have] [added: elected] not [removed: revised years prior] to [removed: 2016 as the impact is deemed as immaterial.] [added: restate comparative periods.*] |

| [removed: 2] [added: *1*] | [removed: Earnings] [added: *Earnings] from continuing operations [removed: for 2017] [added: for* *2017] include pretax interest charges of [removed: $153.1] [added: $148.0] million referable to debt purchases and $297.0 million of discrete net tax [removed: benefits. Earnings from continuing operations for 2014 include a pretax gain of $211.4 million referable to the sale of our Florida cement and concrete businesses.] [added: benefits.*] |

| [removed: 3] [added: *2*] | [removed: Discontinued] [added: *Discontinued] operations include the [removed: results attributable] [added: results attributable] to our former Chemicals [removed: business.] [added: business.*] |

| Total liabilities 3 | | | $ | 5,026.9 | | $ | 4,629.2 | | $ | 4,536.0 | | $ | 3,899.0 | | $ | 3,847.4 | |

| *4* | *Long-term debt includes $250.0 million of floating-rate notes due June 2020 (see Note 6 “Debt”* *in Item 8 “Financial Statements and Supplementary Data”) as we intend to refinance these notes, and we have the ability to do so by borrowing on our line of credit.* |

[removed: FINANCIAL] [added: FINANCIAL] STATEMENTS AND SUPPLEMENTARY [removed: DATA][added: DATA]

[removed: REPORT] [added: REPORT] OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING [removed: FIRM][added: FIRM]

[removed: Opinion] [added: Opinion] on the Financial [removed: Statements][added: Statements]

We have audited the accompanying consolidated balance sheets of Vulcan Materials Company and subsidiaries (the “Company”) as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the related consolidated statements of comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2018,] [added: 2019,] 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, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2018,] [added: 2019,] 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, [removed: 2018,] [added: 2019,] based on the criteria established in [removed: Internal Control — Integrated] [added: *Internal Control* *—* *Integrated] Framework [removed: (2013)] [added: (2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, [removed: 2019] [added: 2020] expressed an unqualified opinion on the Company's internal control over financial reporting.

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

| Part II | [removed: 63] [added: 118] |

[removed: VULCAN] [added: VULCAN] MATERIALS COMPANY AND SUBSIDIARY [removed: COMPANIES][added: COMPANIES]

| | [removed: 2018] [added: 2019] | | | [removed: 2017] [added: *2018*] | | | [removed: 2016] [added: *2017*] | |

| [removed: For] [added: *For] the years ended December [removed: 31] [added: 31*] | | | | | | | | |

| [removed: in] [added: *in] thousands, except per share [removed: data] [added: data*] | | | | | | | | |

| Total revenues | [removed: $ 4,382,869] [added: $ 4,929,103] | | | $ [removed: 3,890,296] [added: 4,382,869] | | | $ [removed: 3,592,667] [added: 3,890,296] | |

| Cost of revenues | [removed: 3,281,924] [added: 3,673,202] | | | [removed: 2,896,783] [added: 3,281,924] | | | [removed: 2,603,782] [added: 2,896,783] | |

| Gross profit | [removed: 1,100,945] [added: 1,255,901] | | | [removed: 993,513] [added: 1,100,945] | | | [removed: 988,885] [added: 993,513] | |

| Selling, administrative and general expenses | [removed: 333,371] [added: 370,548] | | | [removed: 324,972] [added: 333,371] | | | [removed: 316,769] [added: 324,972] | |

| Gain on sale of property, plant & equipment and businesses | [removed: 14,944] [added: 23,752] | | | [removed: 17,827] [added: 14,944] | | | [removed: 15,431] [added: 17,827] | |

| Other operating expense, net | [removed: (34,805)] [added: (31,647)] | | | [removed: (47,324)] [added: (34,805)] | | | [removed: (21,645)] [added: (47,324)] | |

| Operating earnings | [removed: 747,713] [added: 877,458] | | | [removed: 639,044] [added: 747,713] | | | [removed: 665,902] [added: 639,044] | |

| Other nonoperating income, net | [removed: 13,000] [added: 9,243] | | | [removed: 13,357] [added: 13,000] | | | [removed: 14,624] [added: 13,357] | |

| Interest income | [removed: 554] [added: 1,155] | | | [removed: 4,437] [added: 554] | | | [removed: 807] [added: 4,437] | |

| Interest expense | [removed: 137,977] [added: 130,155] | | | [removed: 295,522] [added: 137,977] | | | [removed: 134,076] [added: 295,522] | |

| Earnings from continuing operations before income taxes | [removed: 623,290] [added: 757,701] | | | [removed: 361,316] [added: 623,290] | | | [removed: 547,257] [added: 361,316] | |