Vulcan Materials CO (VMC)

OVERVIEW

We provide the basic materials for the infrastructure needed to maintain and expand the U.S. economy. We operate primarily in the U.S. and are 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. 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.

Demand for our products is dependent on construction activity and correlates positively with changes in population, employment and household formations. End uses include public construction (e.g., highways, bridges, buildings, airports, schools, prisons, sewer and waste disposal systems, water supply systems, dams, reservoirs and other public construction projects), private nonresidential construction (e.g., manufacturing, retail, offices and warehouses) and private residential construction (e.g., single-family houses, duplexes, apartment buildings and condominiums).

Aggregates have a very high weight-to-price ratio and, in most cases, must be produced near where they are used; if not, transportation can cost more than the materials, rendering them uncompetitive compared to locally produced materials. Exceptions to this typical market structure include areas along the U.S. Gulf Coast and the Eastern Seaboard where there are limited supplies of locally available, high-quality aggregates. We serve these markets from quarries that have access to cost-effective long-haul transportation, including shipping by barge, rail and our fleet of Panamax-class, self-unloading ships. Additionally, we serve markets in California and Hawaii from our quarry in British Columbia, Canada by means of a long-term marine shipping agreement with CSL Americas.

There are limited substitutes for quality aggregates. Due to zoning and permitting regulations and high transportation costs relative to the value of the product, the location of reserves is a critical factor to our long-term success.

No material part of our business depends upon any single customer whose loss would have a significant adverse effect on our business. In 2025, our five largest customers accounted for approximately 7% of our total revenues, and no single customer accounted for more than 2% of our total revenues. Although approximately 40% to 55% of our aggregates shipments have historically been used in publicly-funded construction, such as highways, airports and government buildings, a relatively small portion of our sales are made directly to federal, state, county or municipal governments/agencies. Therefore, although reductions in state and federal funding can curtail publicly-funded construction, the vast majority of our business is not directly subject to renegotiation of profits or termination of contracts with local, state or federal governments. In addition, our sales to government entities span several hundred entities coast-to-coast, ensuring that negative changes to various government budgets would have a muted impact across such a diversified set of government customers.

While aggregates is our focus and primary business, we believe vertical integration between aggregates and downstream products, such as asphalt mix and ready-mixed concrete, can be managed effectively in certain markets to generate attractive financial returns and enhance financial returns in our core Aggregates segment. We produce and sell aggregates-intensive asphalt mix and/or ready-mixed concrete products in our Alabama, Arizona, California, Maryland, New Mexico, Tennessee, Texas, Virginia, and Washington D.C. markets. Aggregates comprise approximately 95% of asphalt mix by weight and 80% of ready-mixed concrete by weight. In both of these downstream businesses, aggregates are primarily supplied from our operations.

SEASONALITY AND CYCLICAL NATURE OF OUR BUSINESS

Almost all of our products are produced and consumed outdoors. Seasonal changes and other weather-related conditions can affect the production and sales volume of our products. Therefore, the financial results for any quarter do not necessarily indicate the results expected for the year. Normally, the highest sales and earnings are in the third quarter, and the lowest are in the first quarter. Furthermore, our sales and earnings are sensitive to national, regional and local economic conditions, demographic and population fluctuations, and particularly to cyclical swings in construction spending, primarily in the private sector.

Part I Financial Information

Executive Summary

FINANCIAL HIGHLIGHTS FOR SECOND QUARTER 2026

Compared to second quarter of 2025:

•Total revenues increased $53.4 million, or 3%, to $2,155.8 million

•Gross profit increased $0.3 million, or less than 1%, to $625.5 million

•Aggregates segment sales increased $113.4 million, or 7%, to $1,763.0 million

•Aggregates segment freight-adjusted revenues increased $66.3 million, or 5%, to $1,376.4 million

•Shipments increased 1%, or 0.6 million tons, to 59.9 million tons

•Freight-adjusted sales price increased 3.9%, or $0.86 per ton, to $22.97

•Aggregates segment gross profit increased $7.8 million, or 1%, to $567.3 million

•Unit profitability (as measured by gross profit per ton) increased less than 1% to $9.47 per ton

•Asphalt and Concrete segment gross profit decreased $7.5 million to $58.2 million, collectively

•Selling, administrative and general (SAG) expenses decreased $3.2 million and decreased 30 basis points as a percentage of total revenues

•Operating earnings decreased $15.5 million, or 3%, to $455.5 million

•Earnings attributable to Vulcan from continuing operations were $2.47 per diluted share compared to $2.43 per diluted share

•Adjusted earnings attributable to Vulcan from continuing operations were $2.59 per diluted share compared to $2.45 per diluted share

•Net earnings attributable to Vulcan were $323.4 million, an increase of $2.5 million, or 1%

•Adjusted EBITDA was $654.0 million, a decrease of $5.5 million, or 1%

•Returned capital to shareholders via dividends of $67.5 million at $0.52 per share versus $64.7 million at $0.49 per share

•Returned capital to shareholders via share repurchases of $250.3 million at a $276.69 average price per share compared to no share repurchases

Commercial and operational execution drove solid results in the second quarter. Despite significant energy inflation and disruptive weather, aggregates gross profit per ton improved to $9.47 per ton and our industry-leading aggregates cash gross profit per ton grew to over $12 per ton in the second quarter. These results demonstrate the resiliency of our uniquely advantaged pure-play aggregates business.

Through the first six months, cash provided by operating activities was $584.6 million. Capital expenditures for maintenance and growth projects were $176.3 million in the second quarter. We returned $67.5 million to shareholders through dividends (a 4% increase versus the prior year) and $250.3 million through share repurchases (compared to no share repurchases in the prior year quarter). As of June 30, 2026, the ratio of total debt to trailing-twelve months Adjusted EBITDA was 1.9 times (1.7 times on a net debt basis, reflecting $288.7 million of cash on hand). Our weighted-average debt maturity was 13.2 years, and our weighted-average effective interest rate was 5.04%.

On a trailing-twelve months basis, return on invested capital of 16.1% increased 20 basis points over the prior year.

Consistent with our aggregates growth strategy, during the second quarter we completed several portfolio enhancing actions. In early June, we completed the previously announced divestiture of our ready-mixed concrete operations in California. Additionally, we acquired a quarry in southern Colorado and a rail yard in Dallas-Fort Worth from Brannan Sand & Gravel. These portfolio actions align with our aggregates-led growth strategy by expanding our reach into southern Colorado and strengthening our distribution network in Dallas-Fort Worth. The pipeline for strategic acquisitions remains active, and we have the financial strength and flexibility to capitalize on the most value-accretive opportunities.

OUTLOOK

Our aggregates business is executing well, and we reiterate our full-year outlook to deliver between $2.4 and $2.6 billion of Adjusted EBITDA. The construction environment remains supportive of continued aggregates price growth, and large projects and public construction activity continue to support our expectation for volume growth in 2026. As always, our focus remains on compounding aggregates unit profitability to drive earnings growth and strong cash generation for our shareholders.

Part I Financial Information

Results of Operations

Total revenues are primarily derived from our product sales of aggregates, asphalt mix and ready-mixed concrete, and include freight & delivery costs that we pass along to our customers to deliver these products. We also generate service revenues from our asphalt construction paving business and services related to our aggregates business. We present separately our discontinued operations, which consist of our former Chemicals business.

The following table highlights significant components of our consolidated operating results including EBITDA and Adjusted EBITDA.

CONSOLIDATED OPERATING RESULTS HIGHLIGHTS

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Executive Summary

FINANCIAL SUMMARY FOR 2025

Compared To 2024:

•Total revenues increased $523.4 million, or 7%, to $7,941.1 million

•Gross profit increased $175.0 million, or 9%, to $2,174.6 million

•Selling, administrative and general (SAG) expenses increased 6% to $564.1 million and decreased 10 basis points as a percentage of total revenues

•Operating earnings increased $255.1 million, or 19%, to $1,619.6 million

•Earnings attributable to Vulcan from continuing operations were $8.15 per diluted share, compared to $6.91 per diluted share

•Adjusted earnings attributable to Vulcan from continuing operations were $8.00 per diluted share, compared to $7.53 per diluted share

•Net earnings attributable to Vulcan were $1,076.7 million, an increase of $164.8 million, or 18%

•Adjusted EBITDA was $2,323.6 million, an increase of $266.4 million, or 13%

•Aggregates segment sales increased $347.6 million, or 6%, to $6,297.2 million

•Aggregates segment freight-adjusted revenues increased $349.2 million, or 8%, to $4,985.4 million

•Shipments increased 3%, or 6.9 million tons, to 226.8 million tons

•Freight-adjusted sales price increased 4.3%, or $0.90 per ton, to $21.98

•Aggregates segment gross profit increased $148.1 million, or 8%, to $1,964.8 million

•Unit profitability (as measured by gross profit per ton) increased 5% to $8.66 per ton

•Unit profitability (as measured by cash gross profit per ton) increased 7% to $11.33 per ton

•Asphalt and Concrete segment sales increased $241.9 million, or 13%, to $2,141.0 million, collectively

•Asphalt and Concrete segment gross profit increased $26.9 million, or 15%, to $209.8 million, collectively

•Returned capital to shareholders via dividends of $259.8 million at $1.96 per share versus $244.4 million at $1.84 per share

•Returned capital to shareholders via share repurchases of $438.4 million at $283.82 average price per share compared to $68.8 million at $254.71 average price per share

Our aggregates-led business delivered another year of strong earnings growth and margin expansion. Net earnings attributable to Vulcan increased 18%, Adjusted EBITDA improved 13%, and Adjusted EBITDA margin expanded 160 basis points. Through a consistent focus on commercial and operational execution, we continue to deliver attractive organic growth and expand our industry-leading aggregates gross profit per ton (which increased 5% to $8.66 per ton) and cash gross profit per ton (which increased 7% to $11.33). The resulting strong cash generation, coupled with disciplined M&A and portfolio management, positions us well to continue compounding results and creating value for our shareholders in 2026 and beyond.

Part II

At year-end 2025, total debt to Adjusted EBITDA was 1.9 times (1.8 times on a net debt basis, reflecting $189.4 million of cash on hand). Our weighted-average debt maturity was 13.7 years, and our total weighted-average effective interest rate was 5.0%. Return on invested capital was 15.7%. Our strong balance sheet and ample liquidity position us well for continued growth.

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.”

MARKET DEVELOPMENTS AND OUTLOOK

As we look to 2026, we are encouraged about the demand backdrop in our markets. We expect continued strength in public construction activity and improving private nonresidential opportunities, a combination that should benefit an already healthy pricing environment. Growing demand, coupled with our Vulcan Way of Selling and Vulcan Way of Operating disciplines, will drive another year of earnings growth and further improvement in our aggregates unit profitability.

Our expectations for 2026 include:

•Continued improvement in Aggregates segment cash gross profit per ton ($11.33 in 2025)

•Total shipments up 1% to 3% (226.8 million tons in 2025)

•Freight-adjusted price improvement of 4% to 6% ($21.98 in 2025)

•Low-single digit increase in freight-adjusted unit cash cost (freight-adjusted price less segment cash gross profit per ton; $10.65 in 2025)

•Total Asphalt and Concrete segment cash gross profit of approximately $290 million ($322 million in 2025); excludes California ready-mixed concrete assets held for sale

•Relative contribution of approximately 85% from the Asphalt segment and 15% from the Concrete segment

•Selling, Administrative and General expenses of $580 million to $590 million ($564 million in 2025)

•Interest expense of approximately $225 million

•Capital spending for maintenance and growth projects of $750 million to $800 million

•Depreciation, depletion, accretion and amortization expense of approximately $700 million

•An effective tax rate of 22% to 23%

•Net earnings attributable to Vulcan of $1,100 million to $1,300 million

•Adjusted EBITDA between $2,400 million and $2,600 million

Source: Dodge Data & Analytics

Part II

KNOWN TRENDS OR UNCERTAINTIES

Inflationary pressures and labor constraints can be factors that impact our operations. Although inflationary pressures can create short-term to medium-term headwinds, the combination of inflation and visibility of demand may create a favorable environment for price increases. Additionally, labor constraints can cause delays and inefficiencies in our operations as well as those of our customers. If labor constraints continue, our operations may proceed at a slower pace, which may effectively extend the recovery while allowing us the opportunity to compound price, control costs and grow earnings.

Our industry is experiencing uncertainty due to rapid changes in global trade policies including announced tariff increases, potential additional tariff increases, potential new or renegotiated bilateral or multilateral trade agreements, and other measures that could restrict international trade. Economic pressures on our customers, including the challenges of inflation and the impact of tariffs and other trade measures, may negatively impact our shipment volumes. We will continue to evaluate the evolving macroeconomic environment to take action to mitigate the impact on our business.

Further, the Mexican government has taken actions adverse to our property and operations in Mexico. On May 5, 2022, Mexican government officials presented employees at our Calica operations in Quintana Roo, Mexico with arbitrary shutdown orders to immediately cease underwater quarrying and extraction operations. On May 13, 2022, the Mexican government suspended the three-year customs permit granted in March 2022 to Calica. In September 2024, the Mexican government ordered the closure of Calica's already-suspended quarrying activities and the shutdown of certain activities at Calica's Punta Venado port facilities. On September 23, 2024, the President of Mexico signed a presidential decree declaring the entirety of Calica's properties as a "Natural Protected Area" (the "ANP Decree"). Among other provisions, the ANP Decree prohibits Calica from extracting petrous or construction materials from its properties. We strongly believe that the actions taken by Mexico are arbitrary and illegal, and we intend to vigorously pursue all lawful avenues available to us in order to protect our rights, under both Mexican and international law. For additional information regarding our Calica operations, see the NAFTA Arbitration section in Note 12 “Commitments and Contingencies” in Item 8 “Financial Statements and Supplementary Data.”

VALUE PROPOSITION

1.Focused Strategy: Two-pronged approach to durable growth supported by foundation of talent, sustainability and innovation

Our durable growth comes from organic growth in our existing businesses as well as inorganic growth through mergers and acquisitions supplemented with greenfield developments. Together, this two-pronged approach enables us to consistently drive earnings growth.

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 a combination of tools, processes and approaches used by our teams to drive value in our operations through production efficiency, cost control and consistent execution. Together, these strategic disciplines enable us to provide the highest quality material and the best service to our customers.

These disciplines enable us to deliver consistent compounding results, and our focus on digital transformation elevates our capabilities on both the commercial and operational sides of our business. On the commercial side, we continue to focus on strengthening the productivity of our sales teams and providing the best customer experience in our industry. We developed enhanced solutions to provide robust, real-time information to our sales teams and also launched a new MyVulcan customer portal. In our operations, we continue to adopt and utilize our Process Intelligence System to measure real-time plant performance and accelerate problem solving to make the right products at the lowest possible cost. There are a lot of complexities in operating an aggregates plant on a daily basis. Process Intelligence gives us the visibility, data, and platform to instantly collaborate and align our teams to drive optimal plant efficiency.

EXPANDING OUR REACH: We also drive growth by expanding our reach through mergers and acquisitions and by pursuing greenfield development in anticipation of future growth. Our disciplined approach focuses on aggregates, aims to achieve a number one or number two position in the fastest growing markets in the United States and strategically pursues downstream asphalt and concrete businesses complementary to our aggregates position in select markets.

Part II

In 2024, we acquired Wake Stone Corporation (Wake Stone), which expanded our reach in high-growth geographies in the Carolinas, and Superior Ready Mix, L.P. (Superior), which solidified our position as the leading aggregates producer in Southern California. We also completed two bolt-on acquisitions during 2024 in Alabama and Texas, strengthening our position in two of our top 10 revenue states. From 2023 to 2025, we invested $2,310.6 million in business acquisitions as outlined in Note 19 “Acquisitions and Divestitures” in Item 8 “Financial Statements and Supplementary Data.”

2.Right Product: Most aggregates-led company in the U.S. construction materials industry

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

2025 Gross Profit

Aggregates are an essential product with wide logistical moats, high barriers to entry, limited product substitutes, flexible production capacity, a diverse demand base and very favorable pricing characteristics. These attractive fundamentals lead to lower risk through demand cycles.

Source: BLS and Company estimates for U.S. Industry. Demand (L Axis) in billions of tons. Price (R Axis) is indexed (1982=100).

Part II

3.Co

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