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, Honduras, Mexico and the U.S. Virgin Islands. We principally serve markets in 23 states, the U.S. Virgin Islands, Washington D.C., and the local markets surrounding our operations in Freeport, Bahamas; British Columbia, Canada; Puerto Cortés, Honduras and Quintana Roo, Mexico (see the NAFTA Arbitration section in Note 12 “Commitments and Contingencies” in Item 8 “Financial Statements and Supplementary Data”). 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 235 aggregates production stage properties and 80 development stage properties. Our 34 aggregates exploration stage properties are excluded from this map.

Production and sales are currently halted at our Calica operations in Mexico. For additional information, see Note 12 “Commitments and Contingencies” in Item 8 “Financial Statements and Supplementary Data.”

Production stage properties 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, 2023, 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, and 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 2023 measured, indicated and inferred aggregates resources are based on an initial assessment using an average sales price assumption ranging from approximately $12.00 to $23.00 per ton depending on the location/market. The table below presents, by division, details of our aggregates resources as of December 31, 2023.

(millions of tons)
		Stone 2						Sand & Gravel
		Measured (M)		Indicated (I)		Total (M)+(I)		Measured (M)		Indicated (I)		Total (M)+(I)		Total (M)+(I)		Inferred
Division 1		Resources		Resources		Resources		Resources		Resources		Resources		Resources		Resources
Central		615.8		1,167.3		1,783.1		8.8		4.6		13.4		1,796.5		580.7
East		2,594.4		747.0		3,341.4		0.0		0.0		0.0		3,341.4		295.3
International		0.0		61.1		61.1		0.0		0.0		0.0		61.1		0.0
Northeast		835.5		15.9		851.4		41.2		0.0		41.2		892.6		19.2
South		558.7		526.3		1,085.0		22.2		52.4		74.6		1,159.6		384.4
Southern Gulf Coast		635.2		108.3		743.5		42.0		0.0		42.0		785.5		218.4
Southwest		478.5		39.0		517.5		93.1		57.5		150.6		668.1		500.0
Western		449.8		873.6		1,323.4		220.3		897.6		1,117.9		2,441.3		901.0
Total		6,167.9		3,538.5		9,706.4		427.6		1,012.1		1,439.7		11,146.1		2,899.0

1	The divisions are defined by states/countries as follows: Central Division — Illinois, Kentucky and Tennessee East Division — North Carolina, South Carolina and North/Central Georgia International Division — Puerto Cortés (Honduras) and *Quintana Roo (*Mexico) Northeast Division — Delaware, Maryland, New Jersey, New York, Pennsylvania, Virginia and Washington D.C. South Division — Florida (excluding panhandle), South Georgia, Freeport (Bahamas) and the U.S. Virgin Islands Southern Gulf Coast Division — Alabama, Arkansas, Florida Panhandle, Louisiana and Mississippi Southwest Division — Oklahoma and Texas Western Division — Arizona, California, New Mexico and British Columbia (Canada)
2	Stone: amphibolite, argillite, gneiss, granite, limestone, marble, quartzite and sandstone

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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 2023 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 approximately $12.00 to $23.00 per ton depending on the location/market.

The table below presents, by division, details of our aggregates reserves and production as of December 31, 2023.

(millions of tons)
			Stone 3						Sand & Gravel
			Proven		Probable		Total		Proven		Probable		Total		Total		2023 2
Division 1			Reserves		Reserves		Reserves		Reserves		Reserves		Reserves		Reserves		Production
Central			1,971.9		1,056.6		3,028.5		7.5		5.0		12.5		3,041.0		35.1
East 4			2,839.6		993.8		3,833.4		0.0		0.0		0.0		3,833.4		50.1
International 5			472.8		0.0		472.8		0.0		0.0		0.0		472.8		4.0
Northeast			1,370.8		503.5		1,874.3		60.7		37.2		97.9		1,972.2		26.1
South			802.9		389.2		1,192.1		180.0		27.3		207.3		1,399.4		29.8
Southern Gulf Coast			1,679.0		58.1		1,737.1		0.0		0.0		0.0		1,737.1		26.4
Southwest			1,183.2		105.0		1,288.2		151.9		0.0		151.9		1,440.1		31.1
Western			754.7		171.7		926.4		414.9		399.5		814.4		1,740.8		33.4
Total			11,074.9		3,277.9		14,352.8		815.0		469.0		1,284.0		15,636.8		236.0

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: 2022 – 235.0 million tons and 2021 – 222.8 million tons.
3	Stone: amphibolite, argillite, gneiss, granite, limestone, marble, quartzite and sandstone.
4	Includes a maximum of 269.9 million tons of reserves encumbered by volumetric production payments as defined in Note 2 “Revenues” in Item 8 “Financial Statements and Supplementary Data.”
5	Includes 407.6 million tons of reserves at our Calica quarry subject to the NAFTA Arbitration disclosed in Note 12 “Commitments and Contingencies” 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 is unchanged from the prior year’s estimate. 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 2023, 12.9 billion tons or 82% are located on production stage properties, and 2.7 billion tons or 18% 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, 2023, 9.6 billion tons or 61% are located on owned land and 6.0 billion tons or 39% are located on leased land. Our land portfolio consists of approximately 300,000 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, 2023 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			46			4			50			4			8			62
East			52			0			52			8			5			65
International			1			0			1			0			0			1
Northeast			17			6			23			24			12			59
South			14			8			22			21			1			44
Southern Gulf Coast			26			0			26			21			2			49
Southwest			16			14			30			25			1			56
Western			13			18			31			5			19			55
Total			185			50			235			108			48			391

1	The facility counts above only include mining properties with production in the current year (for example, excludes 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, 2023, 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			Calcium 3
Division 1															Facilities			Facilities			Facilities
Central															11			0			0
East															0			0			0
International															0			0			0
Northeast															0			36			0
South															0			1			1
Southern Gulf Coast															2			0			0
Southwest															14			0			0
Western															39			26			0
Total															66			63			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.
2	Asphalt facilities for the Central, Southern Gulf Coast and Southwest Divisions are c**omprised of asphalt mix facilities and construction paving businesses*.*
3	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 tables 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									2023 1
Location			Proven			Probable			Total			Production
Brooksville			3.8			7.1			10.9			0.2

1	Production totals for the two prior years were as follows: 2022 – 0.2 million tons and 2021 – 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 $4.3 million.