Appendix 2

Reconciliation of Non-GAAP Measures (Continued)

GAAP does not define "Earnings Before Interest, Taxes, Depreciation and Amortization" (EBITDA) and it should not be considered as an alternative to earnings measures defined by GAAP. We use this metric to assess the operating performance of our business and as a basis for strategic planning and forecasting as we believe that it closely correlates to long-term shareholder value. We do not use this metric as a measure to allocate resources. We adjust EBITDA for certain items to provide a more consistent comparison of earnings performance from period to period. Reconciliation of this metric to its nearest GAAP measure is presented below:

EBITDA and Adjusted EBITDA

(in thousands)

Three Months Ended

TTM

March 31

March 31

2019

2018

2019

2018

Net earnings

$63,299

$52,979

$526,125

$609,243

Income tax expense (benefit)

10,693

(4,903)

121,045

(233,803)

Interest expense, net

32,934

37,774

132,583

294,783

(Earnings) loss on discontinued operations, net of tax

636

416

2,256

(5,980)

EBIT

$107,562

$86,266

$782,009

$664,243

Depreciation, depletion, accretion and amortization

89,181

81,439

353,988

315,841

EBITDA

$196,743

$167,705

$1,135,997

$980,084

Gain on sale of businesses

(4,064)

(2,929)

(4,064)

(13,437)

Property donation

0

0

0

4,290

Business interruption claims recovery

0

(1,694)

(559)

(1,694)

Charges associated with divested operations

0

0

18,545

16,683

Business development ¹

0

516

4,686

3,580

One-time employee bonuses

0

0

0

6,716

Restructuring charges

0

4,245

1,974

4,245

Adjusted EBITDA

$192,679

$167,843

$1,156,579

$1,000,467

Depreciation, depletion, accretion and amortization

(89,181)

(81,439)

(353,988)

(315,841)

Adjusted EBIT

$103,498

$86,404

$802,591

$684,626

¹Represents non-routine charges associated with acquisitions including the cost impact of purchase accounting inventory valuations.

Similar to our presentation of Adjusted EBITDA, we present Adjusted Diluted EPS from continuing operations to provide a more consistent comparison of earnings performance from period to period.

Adjusted Diluted EPS from Continuing Operations (Adjusted Diluted EPS)

Three Months Ended

TTM

March 31

March 31

2019

2018

2019

2018

Diluted EPS from continuing operations

$0.48

$0.40

$3.95

$4.48

Items included in Adjusted EBITDA above

(0.02)

0.00

0.11

0.09

Interest charges associated with debt purchase

0.00

0.00

0.00

0.02

Debt refinancing costs

0.00

0.04

0.00

0.75

Tax reform income tax savings

0.00

0.00

0.01

(1.99)

Alabama NOL carryforward valuation allowance

0.00

0.00

0.00

(0.21)

Adjusted Diluted EPS

$0.46

$0.44

$4.07

$3.14

The following reconciliation to the mid-point of the range of 2019 Projected EBITDA excludes adjustments (as noted in Adjusted EBITDA above) as they are difficult to forecast (timing or amount). Due to the difficulty in forecasting such adjustments, we are unable to estimate their significance. This metric is not defined by GAAP and should not be considered as an alternative to earnings measures defined by GAAP. Reconciliation of this metric to its nearest GAAP measure is presented below:

2019 Projected EBITDA

(in millions)

Mid-point

Net earnings

$640

Income tax expense

160

Interest expense, net

130

Discontinued operations, net of tax

0

Depreciation, depletion, accretion and amortization

360

Projected EBITDA

$1,290

Vulcan Announces First Quarter 2019 Results