filings.toolsVulcan Materials 10-K 2024-12-31
Filed 2025-02-20. 24 sections, 501K characters. Original on sec.gov · Markdown · JSON
Cover and table of contents
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, 2024
OR
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Transition Period From to
Commission file number 001-33841
VULCAN MATERIALS COMPANY
(Exact Name of Registrant as Specified in Its Charter)
| New Jersey (State or other jurisdiction of incorporation or organization) | 20-8579133 (I.R.S. Employer Identification No.) | ||||
| 1200 Urban Center Drive, Birmingham, Alabama (Address of Principal Executive Offices) | 35242 (Zip Code) |
(205) 298-3000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
| Common Stock, $1 par value | VMC | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes þ No 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 o No 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 þ No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | þ | Accelerated filer | o | Smaller reporting company | o | ||||||||||||
| Non-accelerated filer | o | Emerging growth company | o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. þ
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). 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
The aggregate market value of voting and non-voting common stock held by non-affiliates amounted to $32,788,771,088 as of June 30, 2024.
There were 132,109,660 shares of common stock, $1.00 par value, outstanding as of February 13, 2025.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s annual proxy statement for the annual meeting of its shareholders to be held on May 9, 2025 are incorporated by reference into Part III of this Annual Report on Form 10-K.
VULCAN MATERIALS COMPANY
ANNUAL REPORT ON FORM 10-K
FISCAL YEAR ENDED DECEMBER 31, 2024
CONTENTS
Unless otherwise stated or the context otherwise requires, references in this report to “Vulcan,” the “Company,” “we,” “our,” or “us” refer to Vulcan Materials Company and its consolidated subsidiaries.
| Table of Contents | i |
PART I
“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Certain of the matters and statements made herein or incorporated by reference into this report constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. All such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect our intent, belief or current expectation. Often, forward-looking statements can be identified by the use of words, such as “anticipate,” “may,” “believe,” “estimate,” “project,” “expect,” “intend” and words of similar import. In addition to the statements included in this report, we may from time to time make other oral or written forward-looking statements in other filings under the Securities Exchange Act of 1934 or in other public disclosures. Forward-looking statements are not guarantees of future performance, and actual results could differ materially from those indicated by the forward-looking statements. All forward-looking statements involve certain assumptions, risks and uncertainties that could cause actual results to differ materially from those included in or contemplated by the statements. These assumptions, risks and uncertainties include, but are not limited to:
▪general economic and business conditions
▪our dependence on the construction industry, which is subject to economic cycles
▪the timing and amount of federal, state and local funding for infrastructure
▪changes in the level of spending for private residential and private nonresidential construction
▪changes in our effective tax rate
▪domestic and global political, economic or diplomatic developments
▪the increasing reliance on information technology infrastructure, including the risks that the infrastructure does not work as intended, experiences technical difficulties or is subjected to cyber-attacks
▪the impact of the state of the global economy on our businesses and financial condition and access to capital markets
▪international business operations and relationships, including recent actions taken by the Mexican government with respect to our property and operations in that country
▪the highly competitive nature of the construction industry
▪a pandemic, epidemic or other public health emergency
▪the impact of future regulatory or legislative actions, including those relating to climate change, biodiversity, land use, wetlands, greenhouse gas emissions, the definition of minerals, tax policy and domestic and international trade
▪the outcome of pending legal proceedings
▪pricing of our products
▪weather and other natural phenomena, including the impact of climate change and availability of water
▪availability and cost of trucks, railcars, barges and ships, as well as their licensed operators, for transport of our materials
▪energy costs
▪costs of hydrocarbon-based raw materials
▪healthcare costs
▪labor relations, shortages and constraints
▪the amount of long-term debt and interest expense we incur
▪changes in interest rates
▪volatility in pension plan asset values and liabilities, which may require cash contributions to the pension plans
▪the impact of environmental cleanup costs and other liabilities relating to existing and/or divested businesses
▪our ability to secure and permit aggregates reserves in strategically located areas
▪our ability to manage and successfully integrate acquisitions
▪the effect of changes in tax laws, guidance and interpretations
▪significant downturn in the construction industry may result in the impairment of goodwill or long-lived assets
▪changes in technologies, which could disrupt the way we do business and how our products are distributed
▪the risks of open pit and underground mining
▪expectations relating to environmental, social and governance considerations
▪claims that our products do not meet regulatory requirements or contractual specifications
▪the risks set forth in Item 1A “Risk Factors,” Item 3 “Legal Proceedings,” Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 12 “Commitments and Contingencies” to the consolidated financial statements in Item 8 “Financial Statements and Supplementary Data,” all as set forth in this report
▪other assumptions, risks and uncertainties detailed from time to time in our filings made with the Securities and Exchange Commission
All forward-looking statements are made as of the date of filing or publication. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law. Investors are cautioned not to rely unduly on such forward-looking statements when evaluating the information presented in our filings, and are advised to consult any of our future disclosures in filings made with the Securities and Exchange Commission and our press releases with regard to our business and consolidated financial position, results of operations and cash flows.
| Part I | 1 |
OUR MISSION
We are the company we are today thanks to the positive actions of our employees. We believe that doing the right thing is good for our business, our environment and our society. That’s our commitment.
Our Mission
Provide quality products and services that consistently exceed our customers’ expectations.
Be responsible stewards with respect to safety and the environmental impact of our operations and products.
Drive value and superior returns for our customers, employees, communities and shareholders.
▪We maintain the highest degree of respect for people — for their dignity, talents and interests. We believe that empowering, mentoring, training and rewarding our people helps create a highly engaged workforce, happy people and sustainable, long-term value.
▪We act fairly and honorably to earn the respect and trust of all parties with whom we interact. We hold ourselves to high ethical standards, including abiding by both the letter and spirit of the laws and regulations related to our business.
▪We are committed to excellence in all of our activities. We value innovation. We strive to maintain a position of leadership in all of our businesses.
DOING THE RIGHT THING, THE RIGHT WAY, AT THE RIGHT TIME. IT’S THE VULCAN WAY.
| Part I | 2 |
Item 1. BUSINESS
BUSINESS
Vulcan Materials Company operates primarily in the U.S. and is the nation’s largest supplier of construction aggregates (primarily crushed stone, sand and gravel) and a major producer of aggregates-intensive downstream products such as asphalt mix and ready-mixed concrete. We provide the basic materials for the infrastructure needed to maintain and expand the U.S. economy. Delivered by trucks, ships, barges and trains, our products are the indispensable materials building homes, offices, places of worship, schools, hospitals and factories, as well as vital infrastructure including highways, bridges, roads, ports and harbors, water systems, campuses, dams, airports and rail networks. As of December 31, 2024, we had 423 active aggregates facilities as shown below.
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.”
Additionally, we further serve our customers through our 70 asphalt facilities and 74 concrete facilities located in Alabama, Arizona, California, Maryland, New Mexico, Tennessee, Texas, Virginia, the U.S. Virgin Islands and Washington D.C.
Our top ten revenue producing states accounted for 89% of our 2024 revenues while our top five accounted for 63%.
| VULCAN’S TOP TEN REVENUE PRODUCING STATES IN 2024 | |||||
| 1.California | 6.Florida | ||||
| 2.Texas | 7.Arizona | ||||
| 3.Georgia | 8.South Carolina | ||||
| 4.Tennessee | 9.North Carolina | ||||
| 5.Virginia | 10.Alabama |
| Part I | 3 |
BUSINESS STRATEGY
Our strategy and competitive advantage are based on our strength in aggregates which are used in most types of construction and in the production of asphalt mix and ready-mixed concrete. Our strategy for long-term value creation is built on: (1) an aggregates-focused business, (2) an emphasis on durable growth, (3) a holistic approach to land management, and (4) our commitment to safety, health and the environment.
**1.**AGGREGATES FOCUS
Aggregates are an essential product with high barriers to entry, limited substitutes and very favorable pricing characteristics. Vulcan is uniquely positioned as the largest aggregates supplier in the U.S. and the most aggregates-focused public company.
Given our focus on aggregates, we:
▪TAKE ADVANTAGE OF SIZE AND SCALE: While certain aspects of each aggregates operation are unique, such as its location within a local market and its particular geological characteristics, every operation uses a similar group of assets to produce saleable aggregates and provide customer service. Our 423 active aggregates facilities as of December 31, 2024 provide opportunities to share and scale best practices across our operations and to procure equipment (fixed and mobile), parts, supplies and services in an efficient and cost-effective manner, both regionally and nationally. Additionally, we are able to leverage our size for administrative support, customer service, accounting, procurement, technical support and engineering.
▪BUILD AND HOLD SUBSTANTIAL RESERVES: Our reserves are critical to our long-term success. We currently have 16.5 billion tons of proven and probable aggregates reserves. They are strategically located to economically serve high-growth areas in the United States that are expected to require large amounts of aggregates to meet future construction demand. Moreover, there are significant barriers to entry in many metropolitan markets due to stringent zoning and permitting regulations. These restrictions curtail expansion in certain areas, but they also increase the value of our reserves at existing locations.
While aggregates are the core of our business, complementary aggregates-intensive asphalt and concrete products in select markets support our aggregates-driven returns throughout the cycle.
| Part I | 4 |
Demand for our products is dependent on construction activity and correlates positively with changes in population, employment and household formations. As such, we have pursued a strategy to increase our presence in U.S. metropolitan areas that are expected to grow the most rapidly and to divest assets that are no longer considered part of our long-term growth strategy. During the next decade (2024 - 2034), Woods & Poole Economics projects that 76% of the U.S. population growth, 75% of new jobs and 74% of household formations will occur in Vulcan-served states. Our coast-to-coast footprint serves 35 of the top 50 highest-growth metropolitan statistical areas in 23 states plus Washington D.C. The close proximity of our aggregates reserves and our production facilities to this projected population growth creates many opportunities to invest capital in high-return projects.
Projected Demographic Growth, 2024 to 2034
in millions
Source: Woods & Poole Economics, Complete Economic and Demographic Data Source (CEDDS) 2024
**2.**DURABLE GROWTH
Our durable growth comes from organic growth in our existing business as well as inorganic growth through mergers and acquisitions supplemented with greenfield developments. Together, this three-pronged approach enables us to enhance our core and expand our reach. The result is an ability to grow our aggregates unit profitability throughout the cycle.
ENHANCING OUR CORE: We drive organic growth and differentiate ourselves from other aggregates producers through our strategic disciplines, the Vulcan Way of Selling (Commercial Excellence & Logistics Innovation) and the Vulcan Way of Operating (Operational Excellence & Strategic Sourcing). The Vulcan Way of Selling uses technology, innovation and analytics to win work and capture value. Custom, proprietary technology gives us real-time, forward-looking insight into all our end markets. Coaching and development of our people, along with clear performance metrics and accountability, drive sales execution. The Vulcan Way of Operating is the combination of tools, processes and approaches used by our teams to drive value in our operations every day. By focusing on consistent execution, production efficiency and controlling costs, we provide the highest quality material and the best service to our customers. Expanding on these strategic disciplines:
▪Commercial Excellence — We place great emphasis on the unique characteristics of each geographic market, and we interact with our customers accordingly. We leverage our coast-to-coast presence, sharing best practices and real-time, forward-looking metrics with our sales teams to drive high quality discussions, value selling and improved solutions for our customers. We have clearly defined roles and responsibilities which enable our sales teams to spend less time on non-selling activities and more time responding to our customers’ needs.
▪Logistics Innovation — Our industry-leading logistics team manages the shipments of nearly half of our products. Our logistics systems produce real-time information including on-site and mobile visibility to orders, deliveries and digital shipping records. Partnering with our customers (truck drivers and contractors), our bundled logistics solutions enable streamlined scheduling, speed and accuracy of delivery, as well as efficient back-
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Item 1A. RISK FACTORS
RISK FACTORS
The following risks could materially and adversely affect our business, financial condition and results of operations, and cause the trading price of our common stock to decline. This list does not identify all risks that we face; our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial. Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. You should also refer to the other information set forth in this Annual Report on Form 10-K, including Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8 “Financial Statements and Supplementary Data.”
ECONOMIC/POLITICAL RISKS
Our business is dependent on the construction industry and is subject to economic cycles — Our products are principally sold to the U.S. construction industry. Construction spending is affected by general economic conditions, changes in interest rates, demographic shifts, industry cycles, employment levels, inflation and other business, economic and financial factors, any of which could contribute to a downturn in construction activities or spending in Vulcan-served markets. A downturn in Vulcan-served markets, particularly in our top revenue-generating markets, could have a material adverse effect on our business, financial condition and results of operations.
Our business is dependent on the timing and amount of federal, state and local funding for infrastructure — Our products are used in a variety of public infrastructure projects that are funded and financed by federal, state and local governments. In November 2021, the federal Infrastructure Investment and Jobs Act (IIJA), which included a five-year road, bridge and public transportation program reauthorization at record levels, was signed into law. This federal highway program, as well as funding for other aggregates-intensive public infrastructure, will support demand for our products for several years to come. However, given the time to set up new federal programs, varying state and local budgetary situations and the stages of projects, we cannot be entirely assured of the existence, amount and timing of appropriations for future public infrastructure projects.
We are subject to various risks arising from our international business operations and relationships — We are subject to risks associated with potential disruption caused by changes in domestic or global political, economic and diplomatic developments, including war, civil and political unrest, illnesses declared as a public health emergency (including viral pandemics such as COVID-19), terrorism, expropriation and local labor conditions. We are also subject to both the risks of conducting international business and the requirements of the Foreign Corrupt Practices Act of 1977 (the FCPA) associated with our aggregates production facilities including those located in British Columbia, Canada; Puerto Cortés, Honduras; and Quintana Roo, Mexico. These risks have included, and may in the future include, changes in international trade policies, such as the United States - Mexico - Canada Agreement (USMCA), imposition of duties, tariffs, 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. Recently, the Mexican government has taken actions that adversely affect our property and operations in Mexico, including arbitrary shutdown orders to immediately cease underwater quarrying and extraction operations. We continue to vigorously pursue all lawful avenues available to us in order to protect our rights, under both Mexican and international law.
OPERATIONS, GROWTH AND COMPETITIVE RISKS
Within our local markets, we operate in a highly competitive industry — The construction aggregates industry is highly fragmented with a large number of independent local producers in a number of our markets. Additionally, in most markets, we also compete against large private and public companies, some of which are significantly vertically integrated. This significant competition or any unfavorable change in competitive circumstances in our markets could lead to lower prices and lower sales volumes.
Certain markets are experiencing the expanded use of aggregates substitutes — Recycled concrete and asphalt are increasingly being used in a number of our markets, particularly urban markets, as a substitute for aggregates. The expanded use of recycled concrete and asphalt could cause a significant reduction in the demand for aggregates.
Our long-term success depends upon securing and permitting aggregates reserves in strategically located areas — Construction aggregates have a high weight-to-price ratio, and transportation costs can quickly exceed the cost of the aggregates. Therefore, except for geographic regions that do not possess commercially viable deposits of aggregates and are served by rail, barge or ship, the markets for our products tend to be localized around our quarry sites and are served by truck. New quarry sites often take years to develop, so our strategic planning and new site development must stay ahead of actual growth. Additionally, in a number of urban and suburban areas in which we operate, it is increasingly difficult to permit new sites or expand existing sites due to community resistance. Therefore, our future success is dependent, in part, on our ability to accurately forecast future areas of high growth in order to locate optimal facility sites and on our ability to secure operating and environmental permits to operate at those sites.
Our future growth depends in part on acquiring and successfully integrating other businesses in our industry — Our ability to acquire and integrate businesses is dependent upon the availability of attractive businesses with owners that are willing to sell at fair market prices, conducting proper due diligence on such available businesses, developing and executing integration plans for acquired businesses, and retaining the customers and partners of acquired businesses following their acquisition. If we are not successful with respect to those matters, we may not realize the anticipated benefits associated with such acquisitions, which could adversely affect our business and results of operations.
| Part I | 19 |
Our aggregates operations are subject to the risks of open pit and underground mining — Aggregates mining involves risks such as pit wall failures, pillar or ceiling collapse, flooding, and seismic events related to geologic conditions and our mining activities. Any ground control event could lead to serious injuries, loss of life, equipment damage, production delays or cessation, and increased operating costs.
FINANCIAL/ACCOUNTING RISKS
Our industry is capital intensive, resulting in significant fixed and semi-fixed costs — Due to the high levels of fixed capital required for extracting and producing construction aggregates, our earnings are highly sensitive to changes in product shipments. Therefore, it is important that our capital allocation decisions are properly informed and our capital deployment is well planned and executed. Any decrease in product shipments or an inability to generate sufficient cash to execute our capital deployment may adversely affect our financial condition and results of operations.
A deterioration in our credit ratings and/or the state of the capital markets could negatively impact the cost and/or availability of financing — We currently have approximately $5.3 billion of debt with maturities between 2025 and 2054. We expect to finance acquisitions with a combination of cash flows from existing operations, additional debt and/or additional equity. The mix of financing sources for acquisitions will be situationally dependent.
A deterioration in our credit ratings, regardless of the cause, could limit our debt financing options and increase the cost of such debt financing. While we do not anticipate a credit ratings downgrade and plan to manage our capital structure consistent with investment-grade credit metrics, we cannot assure our current credit ratings.
A deterioration in the state of the capital markets, regardless of our credit ratings, could impact our access to and/or cost of new debt or equity capital.
We use estimates in accounting for a number of significant items — 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 estimates and assumptions that require significant judgment in accounting for the following items:
▪goodwill impairment
▪impairment of long-lived assets excluding goodwill
▪business combinations and purchase price allocation
▪pension and other postretirement benefits
▪environmental compliance costs
▪claims and litigation including self-insurance
▪income taxes
Additionally, the calculation of mineral resources and reserves are estimates and depend upon geological interpretation and statistical inferences or assumptions drawn from drilling and sampling analysis. These estimates are subject to uncertainty due to factors that include the inherent variability of the deposit and recoverability of saleable material in the mining process. If we used different estimates and assumptions or used different ways to determine these estimates, our financial results could differ.
These estimates and assumptions could change significantly in the future and could adversely affect our financial position, results of operations or cash flows.
Our effective tax rate is subject to change — Factors that may increase our future effective tax rate include, but are not limited to: governmental authorities increasing statutory income tax rates or eliminating deductions (particularly the depletion deduction) or credits; the mix of jurisdictions in which our earnings are taxed and the mix of earnings from depletable versus non-depletable businesses; changes in the valuation of our deferred tax assets and liabilities; the effect our stock price has with regard to excess tax benefits from share-based compensation; adjustments to estimated taxes upon finalization of various income tax returns; the resolution of issues arising from income tax audits with various tax authorities; and the interpretation of income tax laws and/or administrative practices.
LEGAL/REGULATORY COMPLIANCE RISKS
Our operations are subject to changes in legal requirements and governmental policies — Our operations are affected by numerous federal, state and local laws and regulations, including those related to zoning, land use and environmental matters. In addition, our operations require numerous governmental approvals and permits, which often require us to make significant capital and operating expenditures to comply with the applicable requirements. Stricter laws and regulations, or more stringent interpretations of existing laws or regulations, may impose new liabilities, taxes or tariffs on us; reduce operating hours; require additional investment by us in pollution control equipment; create restrictions on our products; impede our access to reserves or hamper the opening of new, or the expansion of existing, plants or facilities.
We are involved in certain environmental matters and other legal proceedings — We are involved in environmental investigations and cleanups at sites that we own or owned, where we operate or have operated or where we sent materials for recycling or disposal, as well as related offsite investigations and cleanups. We are also involved in several other complex, non-environmental, legal proceedings. As required by GAAP, we establish reserves when a loss is determined to be probable and the amount can be reasonably estimated. Our assessment of probability and loss estimates are based on the facts and circumstances known to us at a particular point in time. Subsequent developments related to these matters may affect our assessment and estimates of loss contingency. For a description of our current significant legal proceedings and environmental matters, see Note 12 “Commitments and Contingencies” in Item 8 “Financial Statements and Supplementary Data.”
| Part I | 20 |
Climate change legislation or regulations may adversely impact our business — A number of governmental bodies have introduced or are contemplating legislative and regulatory change in response to the potential impacts of climate change. Such legislation or regulation, if enacted, potentially could include provisions for a “cap and trade” system of allowances and credits or a carbon tax, among other provisions, and adversely impact the availability and/or cost of purchased electricity.
Expectations relating to environmental, social and governance considerations and related reporting obligations expose us to potential liabilities, increased costs, reputational harm and other adverse effects on our business — Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance considerations relating to businesses, including climate change and greenhouse gas emissions, and human capital matters. In addition, we make statements about our sustainability goals and initiatives through our sustainability report, our other non-financial reports, information provided on our website, press releases and other communications. Responding to these environmental, social and governance considerations and implementing these goals and initiatives involves risks and uncertainties, requires investments, and depends in part on third-party performance or data that is outside our control. We cannot guarantee that we will achieve our announced sustainability goals and initiatives. In addition, some stakeholders may disagree with our goals and initiatives. Any failure, or perceived failure, by us to achieve our goals, further our initiatives, adhere to our public statements, comply with related federal, state or international laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us.
We may incur material costs and losses as a result of claims that our products do not meet regulatory requirements or contractual specifications — Our operations involve providing products that must meet building code or other regulatory requirements and contractual specifications for durability, stress-level capacity, weight-bearing capacity and other characteristics. If we fail to provide products meeting these requirements and specifications, product liability claims may arise against us. We have resolved certain claims of this kind, but there are currently open claims, and we expect future claims, some of which may exceed our product liability insurance coverage.
PERSONNEL RISKS
Our future success depends upon attracting and retaining qualified personnel, particularly in sales and operations — Our success in attracting qualified personnel, particularly in the areas of sales and operations, is affected by changing demographics of the available pool of workers with the training and skills necessary to fill the available positions, the impact on the labor supply due to general economic conditions, and our ability to offer competitive compensation and benefit packages.
Disputes with organized labor could disrupt our business 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.
GENERAL RISK FACTORS
We are dependent on information technology systems (our own and those of our service providers such as Amazon Web Services), and these systems contain non-public data about our business, employees, suppliers and customers — The protection of our information technology systems and the data contained therein is critical to us. We have a dedicated information security team that executes our information security program and routinely tests the security of our applications, networks, databases, etc. While we have security measures and technology in place designed to protect proprietary or classified information about our business, employees, suppliers and customers, there can be no assurance that our efforts will prevent all threats to our information technology systems (or those of our service providers). In addition, the rapid evolution and increased adoption of artificial intelligence and machine learning technologies may intensify our cybersecurity risks. Because the techniques used to obtain unauthorized access or sabotage information technology systems change frequently, become more sophisticated and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. The loss of use of information technology systems (whether ours or our service providers), regardless of the cause, could disrupt our business operations. The failure to keep secure the confidential and sensitive data about our business, employees, suppliers and customers (regardless of the reason for such failure) or failure by us to comply with applicable laws, rules or regulations could expose us, our employees, suppliers and/or our customers to the misuse of such data and could damage our reputation, cause us to incur significant liability and have a material adverse effect on our business, financial condition and results of operations.
Weather can, and climate change may, materially affect our operations — Almost all of our products are consumed outdoors in the public or private construction industry, and our production and distribution facilities are located outdoors. Inclement weather affects both our ability to produce and distribute our products and affects our customers’ short-term demand because their work also can be hampered by weather. Potential impacts of climate change include disruption in production and product distribution due to impacts from major storm events, shifts in regional weather patterns and intensities, availability of energy and/or water, and sea level changes. 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 addressing climate change could result in increased energy, transportation and raw material costs and may require us to make additional investments in facilities and equipment.
Our product distribution is multi-modal and often dependent upon third-party providers — Our products are distributed either by truck to local markets or by rail, barge or oceangoing vessel to remote markets. The distribution and cost of distribution could be negatively affected by factors such as rail service interruptions or rate increases, tariffs, rising fuel costs, truck/railcar/barge shortages, truck driver and rail crew shortages, capacity constraints and minimum tonnage requirements.
| Part I | 21 |
The production of our products is dependent upon the supply chain for several key inputs — In our production and distribution processes, we consume significant amounts of electricity, diesel fuel, liquid asphalt and other petroleum-based resources. Additionally, we operate significant amounts of fixed and mobile equipment that require regular maintenance and replacement of parts. The availability and pricing of these resources are subject to market forces.
Item 1B. UNRESOLVED STAFF COMMENTS
UNRESOLVED STAFF COMMENTS
We have not received any written comments from the Securities and Exchange Commission staff regarding our periodic or current reports under the Exchange Act of 1934 that remain unresolved.
| Part I | 22 |
Item 1C. CYBERSECURITY
CYBERSECURITY
We have a cross-departmental approach to addressing cybersecurity risk, including input from employees and our Board of Directors (the "Board"). The Board, Audit Committee, senior management and our Risk Management Committee (a task force led by senior corporate officers that draws on the subject matter expertise of senior managers from various functional departments and from line operations management) devote significant resources to cybersecurity and risk management processes to adapt to the changing cybersecurity landscape and respond to emerging threats in a timely and effective manner. Our cybersecurity risk management program leverages the National Institute of Standards and Technology (NIST) framework, which organizes cybersecurity risks into five categories: identify, protect, detect, respond and recover. We regularly assess the threat landscape and take a holistic view of cybersecurity risks, with a layered cybersecurity strategy based on prevention, detection and mitigation. Key enterprise-level cybersecurity risks are incorporated into the Risk Management Committee’s framework and are assessed throughout the year. In addition, internal and external auditors assess our information technology general controls on an annual basis. Furthermore, we have a set of Company-wide policies and procedures concerning cybersecurity matters, which include an IT Security Policy and Cyber Incident Response Plan, as well as other policies that directly or indirectly relate to cybersecurity, non-public information and the use of the internet, social media, email, and wireless devices. These policies go through an internal review process and are approved by appropriate members of management.
Our Chief Information Officer is responsible for developing and implementing our information security program and reporting on cybersecurity matters to the Board. Our Chief Information Officer has served in this role since April 2022 and has over 25 years of experience in Information Technology. He earned a bachelor’s degree in Computer Science and a master’s degree in Information Technology. We view cybersecurity as a shared responsibility, and we periodically perform simulations and tabletop exercises at a management level and incorporate external resources and advisors as needed. All employees with computer access are asked to complete cybersecurity training at least once per year and have access to more frequent cybersecurity trainings through online trainings. We conduct employee phishing tests on a quarterly basis and also require employees in certain roles to complete additional role-based, specialized cybersecurity trainings.
We have continued to expand investments in IT security, including additional end-user training, using layered defenses, identifying and protecting critical assets, strengthening monitoring and alerting, and engaging experts. We regularly test defenses by performing simulations and drills at both a technical level (including through penetration tests) and by reviewing our operational policies and procedures with third-party experts. At the management level, our IT cybersecurity team regularly monitors cybersecurity threats and alerts and meets to discuss threat levels, trends and remediation. The team regularly collects data on risk areas and conducts an annual risk assessment. Further, we conduct periodic external penetration tests and maturity testing to assess our processes and procedures and the threat landscape. These tests and assessments are useful tools for maintaining a robust cybersecurity program to protect our investors, customers, employees and vendors. In addition to assessing our own cybersecurity preparedness, we also consider and evaluate cybersecurity risks associated with use of third-party service providers. Our Internal Audit team conducts an annual review of critical third-party hosted applications with a specific focus on any sensitive data shared with third parties. User access reviews of critical hosted applications are required at least annually, and System and Organization Controls (SOC) 1 or SOC 2 reports provided by the vendors are reviewed annually. If a third-party vendor is not able to provide a SOC 1 or SOC 2 report, we take additional steps to assess their cybersecurity preparedness and assess our relationship on that basis. Our assessment of risks associated with use of third-party providers is part of our overall cybersecurity risk management framework.
The Audit Committee and the full Board actively participate in discussions with management and among themselves regarding cybersecurity risks. The Audit Committee performs an annual review of our cybersecurity program, which includes discussion of management’s actions to identify and detect threats, as well as planned actions in the event of a response or recovery situation. The Audit Committee’s annual review also includes review of recent enhancements to the Company’s defenses and management’s progress on its cybersecurity strategic roadmap. In addition, the Board receives updates from the Chief Information Officer throughout the year. Further, at least annually, the Board receives updates on the Company’s Crisis Management Guide, including its relation to our Cybersecurity Incident Response Plan. To aid the Board with its cybersecurity and data privacy oversight responsibilities, the Board periodically hosts experts for presentations on these topics. For example, the Board has hosted an expert to discuss developments in the cybersecurity threat landscape and to review our performance at our most recent tabletop exercise.
We face a number of cybersecurity risks in connection with our business. Although such risks have not materially affected us, our business strategy, results of operations or financial condition, to date, we have, from time to time, experienced threats to and breaches of our data and systems, including malware and computer virus attacks. For more information about the cybersecurity risks we face, see the risk factor entitled “We are dependent on information technology systems (our own and those of our service providers such as Amazon Web Services), and these systems contain non-public data about our business, employees, suppliers and customers” in Item 1A “Risk Factors.”
| Part I | 23 |
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 244 aggregates production stage properties and 79 development stage properties. Our 40 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.
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, 2024, we directly operated substantially all of our aggregates production facilities.
| Part I | 24 |
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, 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.
| Part I | 25 |
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 2024 measured, indicated and inferred aggregates resources are based on an initial assessment using an average sales price assumption ranging from approximately $9.10 to $26.50 per ton depending on the location/market. The table below presents, by division, details of our aggregates resources as of December 31, 2024.
| (millions of tons) | |||||||||||||||||||||||||||||
| Stone 2 | Sand & Gravel | ||||||||||||||||||||||||||||
| Division 1 | Measured (M) Resources | Indicated (I) Resources | Total (M)+(I) Resources | Measured (M) Resources | Indicated (I) Resources | Total (M)+(I) Resources | Total (M)+(I) Resources | Inferred Resources | |||||||||||||||||||||
| Central | 629.1 | 1,163.3 | 1,792.4 | 8.8 | 3.9 | 12.7 | 1,805.1 | 580.5 | |||||||||||||||||||||
| East | 2,644.2 | 748.5 | 3,392.7 | 0.0 | 0.0 | 0.0 | 3,392.7 | 295.3 | |||||||||||||||||||||
| International | 0.0 | 61.1 | 61.1 | 0.0 | 0.0 | 0.0 | 61.1 | 0.0 | |||||||||||||||||||||
| Northeast | 855.0 | 15.9 | 870.9 | 31.8 | 0.0 | 31.8 | 902.7 | 19.2 | |||||||||||||||||||||
| South | 558.7 | 497.2 | 1,055.9 | 32.5 | 52.4 | 84.9 | 1,140.8 | 384.4 | |||||||||||||||||||||
| Southern Gulf Coast | 671.6 | 175.1 | 846.7 | 42.0 | 0.0 | 42.0 | 888.7 | 218.4 | |||||||||||||||||||||
| Southwest | 478.5 | 38.9 | 517.4 | 93.1 | 58.7 | 151.8 | 669.2 | 500.0 | |||||||||||||||||||||
| Western | 476.4 | 875.8 | 1,352.2 | 214.1 | 883.6 | 1,097.7 | 2,449.9 | 962.3 | |||||||||||||||||||||
| Total | 6,313.5 | 3,575.8 | 9,889.3 | 422.3 | 998.6 | 1,420.9 | 11,310.2 | 2,960.1 |
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 (SGC) 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
| Part I | 26 |
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 2024 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 $9.10 to $26.50 per ton depending on the location/market.
The table below presents, by division, details of our aggregates reserves and production as of December 31, 2024.
| (millions of tons) | |||||||||||||||||||||||||||||
| Stone 3 | Sand & Gravel | ||||||||||||||||||||||||||||
| Division 1 | Proven Reserves | Probable Reserves | Total Reserves | Proven Reserves | Probable Reserves | Total Reserves | Total Reserves | 2024 2 Production | |||||||||||||||||||||
| Central | 1,984.0 | 1,020.3 | 3,004.3 | 3.6 | 5.2 | 8.8 | 3,013.1 | 33.0 | |||||||||||||||||||||
| East 4 | 3,233.8 | 1,106.8 | 4,340.6 | 0.0 | 0.0 | 0.0 | 4,340.6 | 48.7 | |||||||||||||||||||||
| International 5 | 471.1 | 0.0 | 471.1 | 0.0 | 0.0 | 0.0 | 471.1 | 1.7 | |||||||||||||||||||||
| Northeast | 1,364.2 | 503.5 | 1,867.7 | 90.0 | 17.9 | 107.9 | 1,975.6 | 25.3 | |||||||||||||||||||||
| South | 853.6 | 359.1 | 1,212.7 | 173.6 | 27.3 | 200.9 | 1,413.6 | 30.3 | |||||||||||||||||||||
| Southern Gulf Coast | 1,864.3 | 117.5 | 1,981.8 | 0.0 | 0.0 | 0.0 | 1,981.8 | 24.6 | |||||||||||||||||||||
| Southwest | 1,159.6 | 105.0 | 1,264.6 | 156.5 | 0.0 | 156.5 | 1,421.1 | 27.7 | |||||||||||||||||||||
| Western | 815.9 | 108.4 | 924.3 | 481.1 | 431.9 | 913.0 | 1,837.3 | 32.9 | |||||||||||||||||||||
| Total | 11,746.5 | 3,320.6 | 15,067.1 | 904.8 | 482.3 | 1,387.1 | 16,454.2 | 224.2 |
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: 2023 – 236.0 million tons and 2022 – 235.0 million tons.
3**Stone: amphibolite, argillite, gneiss, granite, limestone, marble, quartzite and sandstone.
4Includes a maximum of 256.7 million tons of reserves encumbered by volumetric production payments as defined in Note 2 “Revenues” in Item 8 “Financial Statements and Supplementary Data**.”
5Includes 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**.”
Our current estimate of 16.5 billion tons of proven and probable aggregates reserves reflects an increase of 0.8 billion tons from the prior year’s estimate which is primarily attributable to acquisitions (see Note 19 "Acquisitions and Divestitures" in Item 8 “Financial Statements and Supplementary Data”). 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 16.5 billion tons of estimated proven and probable aggregates reserves reported at the end of 2024, 13.7 billion tons or 83% are located on production stage properties, and 2.8 billion tons or 17% are located on development stage properties. We do not report aggregates reserves for exploration stage sites.
Of the 16.5 billion tons of aggregates reserves at December 31, 2024, 10.3 billion tons or 63% are located on owned land and 6.2 billion tons or 37% are located on leased land. Our land portfolio consists of approximately 310,000 acres.
| Part I | 27 |
Our Aggregates segment includes a production stage, leased calcium operation located in Brooksville, Florida. This limestone quarry produces a supplement for end-use products such as animal feed and plastics and has an average calcium carbonate content of 97%. As of December 31, 2024, this quarry had 10.7 million tons of proven and probable reserves (there are no mineral resources at this quarry).
In addition to our aggregates mining properties, we operate aggregates sales yards, recycled concrete plants and landfill sites. The table below presents, by division, the count of active aggregates facilities as of December 31, 2024 and the types of facilities operated.
| Count of Active Aggregates Operating Facilities | ||||||||||||||||||||
| Production Stage Mining Properties 1 | ||||||||||||||||||||
| Division 2 | Stone | Sand & Gravel | Total | Sales Yards | Recycle and Landfill Sites | Total | ||||||||||||||
| Central | 48 | 1 | 49 | 4 | 12 | 65 | ||||||||||||||
| East | 57 | 0 | 57 | 8 | 8 | 73 | ||||||||||||||
| International | 1 | 0 | 1 | 0 | 0 | 1 | ||||||||||||||
| Northeast | 17 | 6 | 23 | 26 | 7 | 56 | ||||||||||||||
| South | 15 | 8 | 23 | 19 | 1 | 43 | ||||||||||||||
| Southern Gulf Coast | 30 | 0 | 30 | 20 | 2 | 52 | ||||||||||||||
| Southwest | 16 | 11 | 27 | 25 | 0 | 52 | ||||||||||||||
| Western | 15 | 19 | 34 | 7 | 35 | 76 | ||||||||||||||
| Total | 199 | 45 | 244 | 109 | 65 | 418 |
1**The facility counts above only include mining properties with production in the current year (for example, mining properties with sales from existing stockpiles with no current year production are excluded).
2**The divisions are defined geographically in the first table within this Item 2 - Properties.
ASPHALT AND CONCRETE
As of December 31, 2024, we operated a number of facilities producing asphalt mix and ready-mixed concrete in several of our divisions as reflected in the table below:
| Division 1 | Asphalt 2 Facilities | Concrete Facilities | ||||||
| Central | 11 | 0 | ||||||
| East | 0 | 0 | ||||||
| International | 0 | 0 | ||||||
| Northeast | 0 | 36 | ||||||
| South | 0 | 1 | ||||||
| Southern Gulf Coast | 4 | 0 | ||||||
| Southwest | 14 | 0 | ||||||
| Western | 41 | 37 | ||||||
| Total | 70 | 74 |
1**The divisions are defined geographically in the first table within this Item 2 - Properties.
2**Asphalt facilities for the Central, Southern Gulf Coast and Southwest Divisions are comprised of asphalt mix facilities and construction paving businesses.
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.
HEADQUARTERS
Our headquarters are located in an office complex in Birmingham, Alabama. The office space consists of approximately 184,000 square feet and is leased through December 31, 2038. The annual rental cost for the current term of the lease is approximately $4.4 million.
| Part I | 28 |
Item 3. LEGAL PROCEEDINGS
LEGAL PROCEEDINGS
We are subject to occasional governmental proceedings and orders pertaining to occupational safety and health or to protection of the environment, such as proceedings or orders relating to noise abatement, air emissions or water discharges. As part of our continuing program of stewardship in safety, health and environmental matters, we have been able to resolve such proceedings and to comply with such orders without any material adverse effects on our business.
We are a defendant in various lawsuits in the ordinary course of business. It is not possible to determine with precision the outcome of, or the amount of liability, if any, under these lawsuits, especially where the cases involve possible jury trials with as yet undetermined jury panels.
We were not subject to any penalties in 2024 for failure to disclose transactions identified by the Internal Revenue Service as abusive under Internal Revenue Code Section 6707A.
See Note 12 “Commitments and Contingencies” in Item 8 “Financial Statements and Supplementary Data” for a discussion of our material legal proceedings.
Item 4. MINE SAFETY DISCLOSURES
MINE SAFETY DISCLOSURES
The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 of this report.
| Part I | 29 |
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The names, positions and ages, as of February 20, 2025, of our executive officers are as follows:
| Name | Position | Age | ||||||
| J. Thomas Hill | Chairman and Chief Executive Officer | 65 | ||||||
| Thompson S. Baker II | President | 66 | ||||||
| Mary Andrews Carlisle | Senior Vice President and Chief Financial Officer | 44 | ||||||
| Stanley G. Bass | Chief Strategy Officer | 63 | ||||||
| Ronnie A. Pruitt | Chief Operating Officer | 54 | ||||||
| Denson N. Franklin III | Senior Vice President, General Counsel and Secretary | 61 | ||||||
| David P. Clement | Senior Vice President, Operations Support, Procurement | 64 | ||||||
| Jerry F. Perkins Jr. | Senior Vice President, Business Development, Commercial Excellence, Land, Logistics | 55 | ||||||
| Randy L. Pigg | Vice President, Controller and Principal Accounting Officer | 52 |
The principal occupations of the executive officers during the past five years are set forth below:
J. Thomas Hill was elected Chairman of the Board of Directors effective January 1, 2016 and President and Chief Executive Officer in July 2014. He served as President through September 2023. Previously, he served as Executive Vice President and Chief Operating Officer from January 2014 to July 2014, and Senior Vice President of the South Region from December 2011 to December 2013. Prior to that, he served in a number of positions with Vulcan including President, Florida Rock Division from September 2010 to December 2011.
Thompson S. Baker II was elected President effective September 2023 after serving as Chief Operating Officer since May 2019. He previously served as Senior Vice President from March 2017 to April 2019. Prior to that, he served in a number of positions with Vulcan, including President of the Florida Rock Division, 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.
Mary Andrews Carlisle was appointed Chief Financial Officer effective September 1, 2022. In her prior role as Vice President, Finance, she led a number of key financial, operational and corporate initiatives since March 2020. Ms. Carlisle joined the Company in 2006 and has held roles of increasing responsibility in multiple divisions as well as in corporate finance and business development.
Stanley G. Bass was elected Chief Strategy Officer in March 2021 after serving as Chief Growth Officer since February 2016. He served as Senior Vice President of the Western and Mountain West Divisions from January 2015 to February 2016, and Senior Vice President of the West Region from September 2013 to December 2014. Prior to that, he served as Senior Vice President of the Central and West Regions from February 2013 to September 2013 and Senior Vice President of the Central Region from December 2011 to February 2013. Prior to that, he served in a number of positions with Vulcan including President, Midsouth and Southwest Divisions from September 2010 to December 2011.
Ronnie A. Pruitt was appointed Chief Operating Officer effective September 2023. He previously served as Senior Vice President of the Southwest and Western Divisions. He joined Vulcan as part of Vulcan’s August 2021 acquisition of U.S. Concrete, Inc. He held various leadership roles at U.S. Concrete, including President and Chief Executive Officer from April 2020 to August 2021, President and Chief Operating Officer from April 2019 to April 2020, and Senior Vice President and Chief Operating Officer from October 2015 to April 2019. Prior to joining U.S. Concrete in 2015, he served as the Vice President of Cement Sales of Martin Marietta Materials, Inc. and held various positions at Texas Industries, Inc.
Denson N. Franklin III joined the Company 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.
David P. Clement is Senior Vice President of Operations Support and Strategic Sourcing. He previously served as Senior Vice President of the Central Division since August 2021 and, prior to that role, served as Senior Vice President of the Mountain West and Western Divisions since March 2020. He first joined the organization as an operations management trainee in 1983 and progressed to the position of area production manager in 1993. After spending a few years at Pioneer Mid-Atlantic and working as a consultant, he rejoined Vulcan in 2004 as Vice President and General Manager of the Midwest Division. He has held the positions of Vice President of Operations for the Midwest Division, Vice President and General Manager of the Central Region, Senior Vice President of the Central Region and President of the Central Division.
Jerry F. Perkins Jr. is Senior Vice President of Business Development, Commercial Excellence, Land and Logistics. He previously served as Senior Vice President of the Southern Gulf Coast and Mountain West Divisions since August 2021 and, prior to that role, served as Senior Vice President of the Southern Gulf Coast and Southwest Divisions since March 2020. Prior to that role, he was President of the Southern and Gulf Coast Division. He also served as General Counsel and Corporate Secretary and held various legal leadership roles for Vulcan. Before joining Vulcan in 2002, he worked as a certified public accountant (CPA) at a global accounting firm and was an attorney with Burr & Forman LLP in Birmingham, Alabama.
Randy L. Pigg was elected Vice President, Controller and Principal Accounting Officer in April 2018. He served as Vice President, Accounting since June 2016, and prior to that served as Director, Financial Shared Services since April 2014. Prior to that, he served in a number of positions with Vulcan, including Manager, Financial Research & Reporting and Finance Director of the Central Region.
| Part I | 30 |
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is traded on the New York Stock Exchange (ticker symbol VMC). As of February 13, 2025, the number of shareholders of record was 1,977.
We did not purchase any of our equity securities during the fourth quarter of 2024.
We did not have any unregistered sales of equity securities during the fourth quarter of 2024.
Item 6. [RESERVED]
[RESERVED]
| Part II | 31 |
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The objective of our management’s discussion and analysis is to help investors understand our operations and current business environment from the perspective of our management. The following discussion should be read in conjunction with the consolidated financial statements and the accompanying notes contained in this Annual Report. The following generally includes a comparison of our results of operations and liquidity and capital resources for 2024 and 2023. For the discussion of changes from 2022 to 2023 and other financial information related to 2022, refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on February 22, 2024.
EXECUTIVE SUMMARY
FINANCIAL SUMMARY FOR 2024
COMPARED TO 2023:
▪Total revenues decreased $364.2 million, or 5%, to $7,417.7 million
▪Gross profit increased $51.1 million, or 3%, to $1,999.6 million
▪Selling, administrative and general (SAG) expenses decreased 2% to $531.1 million and increased 20 basis points as a percentage of total revenues
▪Operating earnings decreased $62.9 million, or 4%, to $1,364.5 million
▪Earnings attributable to Vulcan from continuing operations were $6.91 per diluted share, compared to $7.06 per diluted share
▪Adjusted earnings attributable to Vulcan from continuing operations were $7.53 per diluted share, compared to $7.00 per diluted share
▪Net earnings attributable to Vulcan were $911.9 million, a decrease of $21.3 million, or 2%
▪Adjusted EBITDA was $2,057.2 million, an increase of $45.9 million, or 2%
▪Aggregates segment sales increased $30.7 million, or 1%, to $5,949.6 million
▪Aggregates segment freight-adjusted revenues increased $174.9 million, or 4%, to $4,636.2 million
▪Shipments decreased 6%, or 14.6 million tons, to 219.9 million tons
▪Freight-adjusted sales price increased 10.8%, or $2.06 per ton to $21.08
▪Aggregates segment gross profit increased $79.9 million, or 5%, to $1,816.7 million
▪Unit profitability (as measured by gross profit per ton) increased 12% to $8.26 per ton
▪Unit profitability (as measured by cash gross profit per ton) increased 12% to $10.61 per ton
▪Asphalt and Concrete segment sales decreased $490.9 million, or 21%, to $1,899.1 million, collectively
▪Asphalt and Concrete segment gross profit decreased $28.8 million, or 14%, to $182.9 million, collectively
▪Returned capital to shareholders via dividends of $244.4 million at $1.84 per share versus $228.4 million at $1.72 per share
▪Returned capital to shareholders via share repurchases of $68.8 million at $254.71 average price per share compared to $200.0 million at $204.52 average price per share
Our aggregates-led business delivered a strong finish to the year. Adjusted EBITDA in the fourth quarter improved 16%, and Adjusted EBITDA margin expanded 370 basis points. The favorable pricing environment coupled with strong operational execution led to consistent year-over-year improvement in aggregates gross profit per ton each quarter (and double-digit improvement in cash gross profit per ton) – finishing 2024 with aggregates gross profit per ton of $9.02 and cash gross profit per ton of $11.50 for the fourth quarter. As we look to 2025, the pricing environment remains favorable, and we are focused on our operating disciplines to manage costs and improve efficiencies. By controlling what we can control, we expect to deliver approximately 19% growth in Adjusted EBITDA.
At year-end 2024, total debt to Adjusted EBITDA was 2.6 times (2.3 times on a net debt basis, reflecting $600.8 million of cash on hand). Our weighted-average debt maturity was 12.6 years, and our total weighted-average effective interest rate was 5.0%. Return on invested capital was 16.2%. We remain well positioned for continued growth with a strong liquidity position and balance sheet profile.
Adjusted EBITDA, Aggregates segment freight-adjusted revenues, cash gross profit per ton, debt to Adjusted EBITDA and return on invested capital are non-GAAP measures. See the definitions and reconciliations within this Item 7 under the caption “Reconciliation of Non-GAAP Financial Measures.”
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CAPITAL ALLOCATION
Our balanced approach to capital allocation remains unchanged. Through economic cycles we intend to balance reinvestment in our business, growth through acquisitions and internal growth projects, and return of capital to shareholders while maintaining financial strength and flexibility evidenced by our strong balance sheet and investment-grade credit ratings. Our capital allocation priorities are as follows:
1.Operating Capital (maintain and grow the value of our franchise)
2.Growth Capital (including acquisitions and greenfields)
3.Dividend Growth (with a keen focus on sustainability)
4.Return Excess Cash to Shareholders (primarily via share repurchases)
Our first priority is to maintain and protect our valuable franchise by keeping our operations in good working order to ensure the production of high quality materials and timely delivery of goods and services to our customers. This capital requirement expands and contracts as production and shipment levels change. During 2024, we invested $638.0 million in capital expenditures to replace or improve existing property, plant & equipment.
Our second priority is to grow our franchise, primarily through business acquisitions and complemented by internal growth investments. For business acquisitions, we tend to look for bolt-on acquisitions, which are easier to integrate, and will pursue large business combinations that are the right fit and the right price. We use strategic and returns-based criteria to price potential acquisitions and are disciplined in our approach. We evaluate many potential acquisitions and only make offers on a few. We closed six business acquisitions during 2024 for total consideration of $2,297.1 million, including our acquisitions of Wake Stone Corporation (Wake Stone) and Superior Ready Mix, L.P. (Superior). Wake Stone was a leading pure-play aggregates supplier in the Carolinas, and Superior was an integrated aggregates, asphalt and concrete producer in Southern California. These acquisitions add quality aggregates reserves to our existing franchise in three attractive states. We also completed bolt-on acquisitions in both Alabama and Texas. All of our 2024 acquisitions were in our top 10 revenue states, demonstrating consistency with our disciplined capital allocation priorities and aggregates-led strategy of continuing to expand our reach through value-enhancing acquisitions.
Our third priority is growing the dividend with a keen focus on sustainability through the economic cycle. During 2024, we paid a dividend per share of $1.84 and paid total dividends of $244.4 million.
And finally, if there is excess cash after fulfilling the prior capital allocation priorities, we will consider returning cash to shareholders via share repurchases. During 2024, we returned $68.8 million to our shareholders through share repurchases.
For a detailed discussion of our acquisitions and divestitures, see Note 19 “Acquisitions and Divestitures” in Item 8 “Financial Statements and Supplementary Data.”
MARKET DEVELOPMENTS AND OUTLOOK
We carry solid momentum into 2025 and are well positioned to deliver another year of strong earnings growth and cash generation. Continued strength in public construction activity and our recent ac
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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
MARKET RISK
We are exposed to certain market risks arising from transactions that are entered into in the normal course of business. To manage these market risks, we may use derivative financial instruments. We do not enter into derivative financial instruments for trading or speculative purposes.
As discussed in the Liquidity and Financial Resources section of Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we actively manage our capital structure and resources to balance the cost of capital and risk of financial stress. Such activity includes balancing the cost and risk of interest expense. In addition to floating-rate borrowings, we at times use interest rate swaps to manage the mix of fixed-rate and floating-rate debt.
At December 31, 2024, the estimated fair value of our long-term debt including current maturities was $5,162.7 million compared to a face value of $5,391.1 million. The estimated fair value was determined by averaging several asking price quotes for the publicly traded notes and assuming par value for the remainder of the debt. The fair value estimate is based on information available as of the balance sheet date. The effect of a decline in interest rates of one percentage point would increase the fair value of our debt by approximately $399.8 million.
We are exposed to certain economic risks related to the costs of our pension and other postretirement benefit plans. These economic risks include changes in the discount rate for high-quality bonds and the expected return on plan assets. The impact of a change in these assumptions on our annual pension and other postretirement benefits costs is discussed in greater detail within the Critical Accounting Policies section of this Annual Report.
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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Vulcan Materials Company:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Vulcan Materials Company and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2025 expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Hewitt Landfill Environmental Matter – Refer to Note 12 to the consolidated financial statements
Critical Audit Matter Description
The Company is subject to governmental proceedings and orders pertaining to the protection of the environment. Specific to the Hewitt Landfill Environmental Matter, management is engaged in groundwater testing, certain remedial procedures and ongoing dialogue with the Environmental Protection Agency (EPA), Los Angeles Regional Water Quality Control Board (RWQCB), Los Angeles Department of Water and Power (LADWP), and Honeywell. The testing and dialogue is related to the Company’s contribution to soil, soil vapor and/or groundwater contamination in the former Hewitt Landfill in Los Angeles and the potential contribution of the Hewitt Landfill to groundwater contamination in the North Hollywood Operable Unit (NHOU) of the San Fernando Valley Superfund Site.
The groundwater treatment system for the Hewitt Landfill on-site remediation is fully operational, and the anticipated costs have been fully accrued for based on facts and circumstances known to the Company at this time. The Company has disclosed facts and circumstances that led to the accrual and the inherent uncertainty that exists in the timing and recognition of potential incremental responsibility or share of costs for the Hewitt Landfill on-site remediation or the NHOU. Due to these uncertainties, future amounts recorded related to the ultimate resolution of claims and assessments could cause actual losses to differ materially from accrued costs.
We identified the Hewitt Landfill and NHOU (collectively the “Hewitt Landfill Environmental Matter” or “the Matter”) as a critical audit matter because evaluating the estimate of the liability and the extent and sufficiency of related disclosures is subjective in nature and as such requires an increased extent of effort, involves especially subjective auditing judgments, and requires the involvement of our environmental specialists.
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How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the uncertainty in the timing, recognition and disclosure of the Company’s responsibility and potential share of remediation costs, specifically as they relate to the Hewitt Landfill Environmental Matter include the following, among others:
▪We tested the operating effectiveness of controls over the identification and evaluation of information available to assess potential responsibility or share of remediation costs for the Hewitt Landfill Environmental Matter, as well as controls over the adequacy of the related financial statement footnote disclosures.
▪With the assistance of our environmental specialists, we evaluated the accuracy and completeness of management’s recorded liabilities for the Hewitt Landfill Environmental Matter by:
▪Independently obtaining and reading correspondence from the EPA, RWQCB and LADWP regarding the Hewitt Landfill Environmental Matter.
▪Obtaining an understanding of the change in estimate of remediation costs, as applicable, and performing procedures to evaluate the appropriateness and sufficiency of the estimate at year-end.
▪Performing a search of environmental records in the public domain from independently and nationally recognized resources.
▪We obtained letters from internal and external counsel as to the Matter’s status, probability of an unfavorable outcome, and the amount or range of potential loss should the outcome be unfavorable.
▪We read and compared the Company’s footnote disclosure to evidential matter obtained during the audit.
/s/ DELOITTE & TOUCHE LLP
Birmingham, Alabama
February 20, 2025
We have served as the Company’s auditor since 1956.
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VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| For the Years Ended December 31 | |||||||||||
| in millions, except per share data | 2024 | 2023 | 2022 | ||||||||
| Total revenues | $ | 7,417.7 | $ | 7,781.9 | $ | 7,315.2 | |||||
| Cost of revenues | (5,418.1) | (5,833.4) | (5,757.5) | ||||||||
| Gross profit | 1,999.6 |
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Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
Item 9A. CONTROLS AND PROCEDURES
CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
We maintain a system of controls and procedures designed to ensure that information required to be disclosed in reports we file with the SEC is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms. These disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a - 15(e) or 15d - 15(e)), include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer, with the participation of other management officials, evaluated the effectiveness of the design and operation of the disclosure controls and procedures as of December 31, 2024. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2024.
We completed the implementation of our quote to invoice system for our aggregates and asphalt operations in the third quarter of 2024. Excluding the acquisitions of Wake Stone and Superior noted below, no other changes were made during the fourth quarter of 2024 to our internal controls over financial reporting, nor have there been other factors that materially affect these controls.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting as required by the Sarbanes-Oxley Act of 2002 and as defined in Securities Exchange Act Rule 13a-15(f).
Under management's supervision, an evaluation of the design and effectiveness of our internal control over financial reporting was conducted based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2024.
We completed our acquisitions of Wake Stone on November 8, 2024 and Superior on December 20, 2024 and have not yet included either company in management's assessment of the effectiveness of our internal control over financial reporting. We are currently integrating both companies into our operations and internal control processes. Accordingly, pursuant to the SEC's general guidance that an assessment of a recently acquired business may be omitted from the scope of an assessment for one year following the acquisition, the scope of management's assessment of the effectiveness of our disclosure controls and procedures does not include Wake Stone or Superior. Wake Stone and Superior combined constituted approximately 13.7% of our total assets as of December 31, 2024 and approximately 0.2% of our total revenues for the year ended December 31, 2024.
Deloitte & Touche LLP, an independent registered public accounting firm, as auditors of our consolidated financial statements, has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 31, 2024. Deloitte & Touche LLP's report, which expresses an unqualified opinion on the effectiveness of our internal control over financial reporting, follows this report.
INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS
Management does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM – INTERNAL CONTROL OVER FINANCIAL REPORTING
To the shareholders and the Board of Directors of Vulcan Materials Company:
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Vulcan Materials Company and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024 of the Company and our report dated February 20, 2025, expressed an unqualified opinion on those financial statements.
As described in Item 9A, Disclosure Controls and Procedures, management excluded from its assessment the internal control over financial reporting at Wake Stone Corporation (“Wake Stone”) and Superior Ready Mix Concrete, L.P. (“Superior”), which were acquired by Vulcan Materials Company on November 8, 2024 and December 20, 2024, respectively, and whose combined financial statements constitute 13.7% of total assets as of December 31, 2024, and approximately 0.2% of total revenues for the year ended December 31, 2024. Accordingly, our audit did not include the internal control over financial reporting at Superior and Wake Stone.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
Birmingham, Alabama
February 20, 2025
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Item 9B. OTHER INFORMATION
OTHER INFORMATION
SECURITIES TRADING PLANS OF SECTION 16 OFFICERS AND DIRECTORS
During the three months ended December 31, 2024, none of our Section 16 officers or directors adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement as defined in Item 408(a) of Regulation S-K.
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
On or about March 24, 2025, we expect to file a definitive proxy statement with the Securities and Exchange Commission pursuant to Regulation 14A (our “2025 Proxy Statement”). The information under the headings “Proposal 1 - Election of Directors,” “Corporate Governance – Policies,” “Corporate Governance – Director Nomination Process,” “Corporate Governance – Committees of the Board of Directors” and “Delinquent Section 16(a) Reports” (to the extent reported therein) included in our 2025 Proxy Statement is incorporated herein by reference. See also the information about our executive officers and governance policies set forth above in Part I of this report.
Item 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The information under the headings “Compensation Discussion and Analysis,” “Director Compensation,” “Executive Compensation,” “Corporate Governance – Compensation Committee Interlocks and Insider Participation,” and “Compensation Committee Report” included in our 2025 Proxy Statement is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The information under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plans” included in our 2025 Proxy Statement is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The information under the headings “Corporate Governance – Director Independence” and “Corporate Governance – Transactions with Related Persons” included in our 2025 Proxy Statement is incorporated herein by reference.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information under the heading “Independent Registered Public Accounting Firm” included in our 2025 Proxy Statement is incorporated herein by reference.
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PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) (1) Financial statements
The following financial statements are included herein on the pages shown below:
(a) (2) Financial statement schedules
Financial statement schedules are omitted because of the absence of conditions under which they are required or because the required information is provided in the financial statements or notes thereto.
Financial statements (and summarized financial information) of 50% or less owned entities accounted for by the equity method have been omitted because they do not, considered individually or in the aggregate, constitute a significant subsidiary.
(a) (3) Exhibits
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1**Incorporated by reference.
2**Management contract or compensatory plan.
Our SEC file number for documents filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended, is 001-33841.
Item 16. FORM 10-K SUMMARY
FORM 10-K SUMMARY
We have chosen not to include an optional summary of the information required by this Form 10-K.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on February 20, 2025.
| VULCAN MATERIALS COMPANY | ||
| /s/ J. Thomas Hill | ||
| J. Thomas Hill | ||
| Chairman and Chief Executive Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Name | Title | Date | ||||||
| /s/ J. Thomas Hill | Chairman and Chief Executive Officer (Principal Executive Officer) | February 20, 2025 | ||||||
| /s/ Mary Andrews Carlisle | Senior Vice President and Chief Financial Officer (Principal Financial Officer) | February 20, 2025 | ||||||
| /s/ Randy L. Pigg | Vice President, Controller (Principal Accounting Officer) | February 20, 2025 | ||||||
| /s/ Melissa H. Anderson | Director | February 20, 2025 | ||||||
| /s/ Thomas A. Fanning | Director | February 20, 2025 | ||||||
| /s/ O. B. Grayson Hall, Jr. | Director | February 20, 2025 | ||||||
| /s/ Cynthia L. Hostetler | Director | February 20, 2025 | ||||||
| /s/ Lydia H. Kennard | Director | February 20, 2025 | ||||||
| /s/ Richard T. O'Brien | Director | February 20, 2025 | ||||||
| /s/ James T. Prokopanko | Director | February 20, 2025 | ||||||
| /s/ Kathleen L. Quirk | Director | February 20, 2025 | ||||||
| /s/ David P. Steiner | Director | February 20, 2025 | ||||||
| /s/ Lee J. Styslinger, III | Director | February 20, 2025 | ||||||
| /s/ George Willis | Director | February 20, 2025 | ||||||
| /s/ Denson N. Franklin III | Attorney-in-Fact | February 20, 2025 |
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