Item 2. PROPERTIES

PROPERTIES

AGGREGATES

As the largest U.S. supplier of construction aggregates, we have mining properties across the U.S. and in the Bahamas, Canada and Mexico. We principally serve markets in twenty-two states, the U.S. Virgin Islands, Washington D.C., and the local markets surrounding our operations in British Columbia, Canada and Quintana Roo, Mexico. Our primary focus is serving states and metropolitan markets in the U.S. 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.

Our mining properties are categorized as follows: (1) Production Stage – properties with reported proven or probable reserves where we are actively mining aggregates, (2) Development Stage – properties with reported proven or probable reserves where we are not actively mining aggregates, and (3) Exploration Stage – properties with no reported reserves. The following map illustrates the location of our 228 aggregates production stage properties and 71 development stage properties. Our 34 aggregates exploration stage properties are excluded from this map.

Active aggregates facilities generally include one or more scale houses, office buildings, maintenance shops and processing plants.

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Our aggregates resources and reserves are our foundation and fundamental to our success. However, no individual mining property is individually material to our business. As of December 31, 2021, we directly operated substantially all of our aggregates production facilities.

Our aggregates resources and reserves estimates are calculated in accordance with subpart 1300 of Regulation S-K under the Exchange Act. Our proven and probable aggregates reserves may not be comparable to similar information regarding aggregates reserves disclosed in accordance with the guidance of other countries. We conduct ongoing studies of our deposits to optimize economic values and to manage risk.

We revise our mine plans and estimates of proven and probable aggregates reserves as required and in accordance with the latest available studies. Once mine plans are initially established, the ongoing viability of the plan is reviewed regularly with the benefit of hindsight. Discussions between mine planning, operations, and management determine the need for adjustments, additional resources, drilling information, or other key information. While construction aggregates reserves and resources are relatively consistent, conditions can change with time that require a newly tailored solution. Examples of changes include fluctuations in physical or chemical parameters of the product, sales product shifts, overburden removal or placement management, structural changes, entitlement changes and land additions.

Our estimates of proven and probable aggregates reserves are prepared by and are the responsibility of our employees. The methodology employed takes a systematic approach to collecting sufficient information to estimate the reserves and resources. Each of our reserve and resource bearing properties is evaluated with supporting information to identify its geological, mining and economic viability. The supporting information includes aerial photography, topography, geologic maps, aggregates rock quality information (including core drilling, hand samples, and bulk sample testing, and/or geophysical data), hydrology, archaeology, biology, property boundary information, zoning information, relevant municipal and environmental permitting information. The information is collected by experienced mining engineers and geologists who determine the extent of a resource using a combination of methods including ordinary planimetric based measurements to computer aided design 3-dimensional models.

The results of the supporting information are reviewed by various levels of management, including our “qualified person” (as defined by subpart 1300). This qualified person then verifies that the information adheres to regulatory mandated quantification methods. The economic viability of our reserves is evaluated taking into account historical performance of relevant operations and sales forecasts, among other factors.

Measurements of our proven and probable aggregates reserves have inherent risks. These risks include the accuracy and completeness of geologic information, the interpretation of the data, operational execution, market shifts, structural events and the uncertainty of uncovered material. Management and the qualified person work together to assess these risks regularly and amend the reserves assessments with new information as appropriate. New information can yield site changes that require capital expenditures or cause production performance changes that have financial impacts.

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AGGREGATES RESOURCES

Mineral resources are defined as a concentration or occurrence of material of economic interest in or on the earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for its economic extraction. Mineral resources are classified into three categories, in decreasing level of confidence, as follows:

Measured — based on conclusive geological evidence and sampling, meaning that evidence is sufficient to test and confirm geological and grade or quality continuity. After applying modifying factors (as noted in the Aggregates Reserves section below), measured resources may be converted to either proven or probable reserves

Indicated — based on adequate geological evidence and sampling, meaning that evidence is sufficient to establish geological and grade or quality continuity with reasonable certainty. After applying modifying factors, indicated resources may be converted to probable reserves

Inferred — based on limited geological evidence and sampling, meaning that evidence is only sufficient to establish that geological and grade or quality continuity is more likely than not. Inferred resources may not be converted to reserves

Our reported aggregates resources do not include amounts that have been identified as mineral reserves. Our 2021 measured, indicated and inferred aggregates resources are based on an initial assessment using an average sales price assumption ranging from $5.00 to $20.00 per ton depending on the location/market. The table below presents, by division, the tons of measured, indicated and inferred aggregates resources and the percentage of aggregates resources by commodity as of December 31, 2021.

			(millions of tons)								Percentage of Aggregates Resources by Commodity
			Aggregates Resources														Sand &
Division 1			Measured (M)		Indicated (I)		Total (M) + (I)		Inferred		Limestone			Granite			Gravel			Other 2
Central			556.4		1,144.1		1,700.5		362.9		16.0%			0.0%			0.1%			0.0%
International			144.2		757.2		901.4		0.0		0.0%			0.6%			0.5%			5.9%
Mideast			2,133.7		132.0		2,265.7		6.2		0.0%			6.0%			0.1%			11.7%
Mountain West			30.1		0.4		30.5		31.5		0.0%			0.1%			0.4%			0.0%
Southeast			2,009.8		1,205.1		3,214.9		671.9		1.8%			0.7%			1.2%			26.8%
Southern Gulf Coast			667.5		129.2		796.7		177.7		6.8%			0.4%			0.3%			0.1%
Southwest			449.6		31.6		481.2		500.0		7.7%			0.0%			0.0%			0.0%
Western			69.0		1,183.8		1,252.8		275.2		0.0%			3.0%			9.0%			0.0%
U.S. Concrete			94.4		0.0		94.4		0.0		0.0%			0.0%			0.2%			0.6%
Total			6,154.7		4,583.4		10,738.1		2,025.4		32.2%			10.8%			11.8%			45.2%

1	The divisions are defined by states/countries as follows: Central Division — Illinois, Kentucky and Tennessee International Division — *Quintana Roo (*Mexico), the U.S. Virgin Islands and British Columbia (Canada) Mideast Division — Delaware, Maryland, North Carolina, Pennsylvania, Virginia and Washington D.C. Mountain West Division — Arizona and New Mexico Southeast Division — Florida (excluding panhandle), Georgia and South Carolina Southern Gulf Coast Division — Alabama, Arkansas, Florida Panhandle, Louisiana and Mississippi Southwest Division — Oklahoma and Texas Western Division — California U.S. Concrete — Aggregates facilities are located in New Jersey, New York, Oklahoma, and Texas. Excludes the U.S. Virgin Islands and British Columbia (Canada) which are included in the International Division
2	Other: amphibolite, argillite, gneiss, marble, sandstone and quartzite

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AGGREGATES RESERVES

Mineral reserves are defined as the economically mineable part of a measured or indicated mineral resource. Mineral reserves are classified into two categories, in decreasing level of confidence, as follows:

Proven — those reserves for which the quantity is computed from dimensions revealed by drill data, together with other direct and measurable observations, such as outcrops, trenches and quarry faces. The grade and quality of those reserves are computed from the results of detailed sampling, and the sampling and measurement data are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well established

Probable — those reserves for which quantity, grade and quality are computed partly from specific measurements and partly from projections based on reasonable, though not drilled, geologic evidence. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation

Reported proven and probable reserves include only quantities that are owned in fee or under lease and for which all appropriate zoning and permitting have been obtained through permit, contract or grandfathered status. We apply modifying factors to establish the economic viability of the reserves, as follows:

Contractual and governmental regulations (for example, leases, zoning, permits and reclamation plans) often set limits on the areas, depths and lengths of time allowed for mining, stipulate setbacks and slopes that must be left in place, and designate which areas may be used for surface facilities, berms, and overburden or waste storage, among other requirements and restrictions

Technical and economic factors affect the estimates of reported reserves regardless of what might otherwise be considered proven or probable based on a geologic analysis. For example, excessive overburden or weathered rock, rock quality issues, excessive mining depths, groundwater issues, overlying wetlands, endangered species habitats, and rights of way or easements may effectively limit the quantity of reserves considered proven and probable

Mining and processing waste are also factored in our computations for proven and probable reserves

Our 2021 proven and probable aggregates reserves were estimated by internal experts (i.e. geologists or engineers). The economic viability of our reserves were determined using average aggregates prices ranging from $5.00 to $20.00 per ton depending on the location/market.

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The tables below present by reserve classification — proven, probable and total proven & probable (P&P) — and by division, the tons of aggregates reserves as of December 31, 2021 and the percentages by commodity type. The third (proven & probable) table also notes the 2021 production.

			(millions of tons)							Percentage of Proven Aggregates Reserves by Commodity
			Aggregates Reserves													Sand &
Division 1			Proven							Limestone			Granite			Gravel			Other 3
Central			2,015.1							17.2%			0.0%			0.1%			0.0%
International			499.2							3.5%			0.0%			0.8%			0.0%
Mideast			2,317.5							3.8%			2.9%			0.5%			12.7%
Mountain West			234.6							0.0%			0.3%			1.3%			0.4%
Southeast 4			2,888.6							3.0%			1.0%			1.7%			19.2%
Southern Gulf Coast			1,734.5							13.6%			0.9%			0.0%			0.5%
Southwest			1,230.4							9.8%			0.8%			0.0%			0.0%
Western			715.1							0.0%			3.8%			2.3%			0.0%
U.S. Concrete			0.0							0.0%			0.0%			0.0%			0.0%
Total Proven Reserves			11,635.0							50.9%			9.7%			6.7%			32.7%

			(millions of tons)							Percentage of Probable Aggregates Reserves by Commodity
			Aggregates Reserves													Sand &
Division 1			Probable							Limestone			Granite			Gravel			Other 3
Central			1,038.3							25.9%			0.0%			0.1%			0.0%
International			29.1							0.0%			0.7%			0.0%			0.0%
Mideast			960.3							6.1%			4.7%			0.4%			12.8%
Mountain West			98.8							0.0%			0.5%			2.0%			0.0%
Southeast 4			880.3							1.6%			1.4%			0.7%			18.4%
Southern Gulf Coast			46.7							1.2%			0.0%			0.0%			0.0%
Southwest			105.0							2.6%			0.0%			0.0%			0.0%
Western			688.9							0.0%			8.4%			8.8%			0.0%
U.S. Concrete			143.9							0.3%			0.0%			3.0%			0.4%
Total Probable Reserves			3,991.3							37.6%			15.8%			15.0%			31.6%

			(millions of tons)							Percentage of Total P&P Aggregates Reserves by Commodity
			Aggregates Reserves				2021 2									Sand &
Division 1			Total Proven & Probable				Production			Limestone			Granite			Gravel			Other 3
Central			3,053.4				33.8			19.4%			0.0%			0.1%			0.0%
International			528.3				10.2			2.6%			0.2%			0.6%			0.0%
Mideast			3,277.8				38.6			4.4%			3.4%			0.5%			12.7%
Mountain West			333.4				8.8			0.0%			0.3%			1.5%			0.3%
Southeast 4			3,768.9				56.1			2.6%			1.1%			1.4%			19.0%
Southern Gulf Coast			1,781.2				25.7			10.4%			0.7%			0.0%			0.3%
Southwest			1,335.4				24.7			7.9%			0.6%			0.0%			0.0%
Western			1,404.0				20.7			0.0%			5.0%			4.0%			0.0%
U.S. Concrete			143.9				4.2			0.1%			0.0%			0.8%			0.1%
Total P&P Reserves			15,626.3				222.8			47.5%			11.3%			8.8%			32.4%

1	The divisions are defined geographically in the first table within this Item 2 - Properties.
2	Production totals for the two prior years were as follows: 2020 – 203.1 million tons and 2019 – 217.0 million tons.
3	Other: amphibolite, argillite, gneiss, marble, sandstone and quartzite.
4	Includes a maximum of 300.3 million tons of reserves encumbered by volumetric production payments as defined in Note 2 “Revenues” in Item 8 “Financial Statements and Supplementary Data.”

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Our current estimate of 15.6 billion tons of proven and probable aggregates reserves reflects a decrease of 0.3 billion tons from the prior year’s estimate. Approximately 0.3 billion tons were added as a result of 2021 acquisitions. Estimates of reserves are of recoverable stone, sand and gravel of suitable quality for economic extraction, based on drilling and studies by our geologists and engineers, recognizing reasonable economic and operating constraints as to maximum depth of overburden and stone excavation, and subject to permit or other restrictions.

Of the 15.6 billion tons of estimated proven and probable aggregates reserves reported at the end of 2021, 13.2 billion tons or 86% are located on production stage properties and 2.2 billion tons or 14% are located on development stage properties. We do not report aggregates reserves for exploration stage sites.

Of the 15.6 billion tons of aggregates reserves at December 31, 2021, 9.1 billion tons or 58% are located on owned land and 6.5 billion tons or 42% are located on leased land. Our land portfolio consists of more than 240,000 acres.

In addition to our aggregates mining properties we operate aggregates sales yards and recycled concrete plants. The table below presents, by division, the count of active aggregates facilities as of December 31, 2021 and the types of facilities operated.

			Count of Active Aggregates Operating Facilities
			Production Stage Mining Properties 1									Sales			Recycled			Total
Division 2			Stone			Sand & Gravel			Total			Yards			Plants
Central			48			3			51			5			10			66
International			3			1			4			0			0			4
Mideast			33			4			37			24			19			80
Mountain West			2			10			12			2			4			18
Southeast			43			8			51			25			3			79
Southern Gulf Coast			25			0			25			22			3			50
Southwest			17			0			17			24			1			42
Western			7			8			15			1			11			27
U.S. Concrete			3			13			16			8			0			24
Total			181			47			228			111			51			390

1	The facility counts above only include mining properties with production in the current year (excludes for example, mining properties with sales from existing stockpiles with no current year production).
2	The divisions are defined geographically in the first table within this Item 2 - Properties.

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ASPHALT, CONCRETE AND CALCIUM

As of December 31, 2021, 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:

															Asphalt 2			Concrete 3			Calcium 4
Division 1															Facilities			Facilities			Facilities
Central															10			0			0
Mideast															0			33			0
Mountain West															20			0			0
Southeast															0			0			1
Southern Gulf Coast															2			0			0
Southwest															16			7			0
Western															21			3			0
U.S. Concrete															0			130			0
Total															69			173			1

1	The divisions are defined geographically in the first table within this Item 2 - Properties. Our International Division has no asphalt, concrete or calcium facilities. U.S. Concrete — Concrete facilities are located in California, New Jersey, New York, Oklahoma, Pennsylvania, Texas, the U.S. Virgin Islands and Washington D.C.
2	Asphalt facilities for the Central, Southern Gulf Coast and Southwest Divisions are c**omprised of asphalt mix facilities and construction paving businesses*.*
3	In addition to the concrete facilities above, U.S. Concrete operated a fleet of approximately 90 volumetric mixer trucks (which are effectively mobile mini-plants) serving major markets in Texas*, and is one of the largest volumetric operations in the U.S. Volumetric ready-mixed concrete trucks mix concrete to the customer's specification on the job site, better serving smaller jobs and specialized applications, and allowing flexibility for servicing remote job locations. Because of their versatility, these trucks offer the contractor multiple options for a single job without the inconvenience or added costs typically associated with standard ready-mix trucks delivering special or short-loads to a job site. Because of their unique on-demand production capabilities, these trucks minimize the amount of wasted concrete, which improves margins and reduces environmental impact**.*
4	Comprised of a ground calcium plant in Brooksville, Florida.

The asphalt and concrete facilities are able to meet their needs for raw material inputs with a combination of internally sourced and purchased raw materials.

Our Calcium segment operates a quarry at Brooksville, Florida that provides feedstock for the ground calcium operation. The Brooksville quarry is not individually material to our business. Calcium resources and reserves are outlined in the table below:

			(millions of tons)
			Calcium Resources
Location			Measured (M)			Indicated (I)			Total (M) + (I)			Inferred
Brooksville			0.0			0.0			0.0			0.0

			(millions of tons)
			Calcium Reserves									2021 1
Location			Proven			Probable			Total			Production
Brooksville			4.2			7.2			11.4			0.3

1	Production totals for the two prior years were as follows: 2020 – 0.3 million tons and 2019 – 0.3 million tons.

Our production stage, leased Brooksville limestone quarry produces a supplement for end-use products, such as animal feed and plastics. High purity limestone is inert and relatively inexpensive compared to the other components used in these end-use products. The Brooksville limestone quarry has an average calcium carbonate (CaCO3) content of 97%.

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HEADQUARTERS

Our headquarters are located in an office complex in Birmingham, Alabama. The office space consists of approximately 184,410 square feet and is leased through December 31, 2038. The annual rental cost for the current term of the lease is approximately $3.8 million.