Tom Hill, Vulcan Materials' Chairman and Chief Executive Officer, said, "Our aggregates-led business delivered solid results in 2022 as our teams executed well in a challenging macro-environment. We continued to improve our aggregates unit profitability and demonstrate the resiliency of our business. Our relentless focus on our operating disciplines, coupled with nimble pricing actions to overcome inflationary pressures, led to a 12 percent increase in our full-year Adjusted EBITDA. Fourth quarter results were negatively impacted by abnormally wet and cold weather that disrupted construction activity and materials shipments, in addition to some softening in single-family residential demand. Despite these disruptions, our industry-leading aggregates cash gross profit per ton increased 11 percent in the fourth quarter. We carry solid pricing momentum into 2023 and are focused on our operating disciplines to manage costs and improve efficiencies. By controlling what we can control, we expect to deliver another year of earnings growth."

Segment Results

Aggregates

Segment gross profit increased in the fourth quarter despite lower shipments due mostly to unfavorable weather. Fourth quarter gross profit increased to $327 million, or $6.04 per ton; shipments declined 6 percent. In early October, the lingering effects of Hurricane Ian slowed shipments in certain southeastern markets while significant rainfall and extreme winter temperatures impacted November and December construction activity across many markets. The prior year's fourth quarter weather was unusually mild, amplifying this year's weather impact. Quarterly shipments were also impacted by the absence of tons available from the Company's Mexico operations, which were unexpectedly and arbitrarily shut down by the Mexican government in May of 2022.

Fourth quarter freight-adjusted selling prices increased 14 percent, or $2.05 per ton, and increases were widespread across the Company's footprint. Freight-adjusted pricing for the full year was $16.40 per ton, an increase of $1.53 per ton, or 10 percent, over the prior year. Adjusting for mix impacts, average selling prices increased 15 percent in the fourth quarter and 11 percent for the full year.

Notwithstanding the challenging weather conditions in the fourth quarter, solid operational execution helped offset continued energy cost headwinds and inflationary pressures for many parts and supplies. Freight-adjusted unit cash cost of sales increased 17 percent, or $1.27 per ton, as compared to the prior year's fourth quarter. The average unit price of diesel fuel in the fourth quarter increased 61 percent from the prior year. Excluding the impact of higher diesel fuel costs, freight-adjusted cash cost of sales increased 11 percent.

Unit profitability expansion accelerated throughout the year with fourth quarter gross profit per ton increasing 7 percent and cash gross profit per ton increasing 11 percent. For the full year, cash gross profit per ton improved 5 percent to $7.83 per ton.

Asphalt, Concrete and Calcium

Asphalt segment gross profit was $17 million, an increase of $13 million over the prior year's fourth quarter, as pricing actions initiated throughout the year outpaced higher input costs. Fourth quarter shipments were 2.8 million tons, a 2 percent decline versus the prior year. Asphalt pricing increased 24 percent, or $14.56 per ton, more than offsetting a 24 percent increase in the unit cost of liquid asphalt and driving strong unit profitability improvement versus the prior year. For the full year, asphalt gross profit improved $36 million with robust pricing gains overcoming a 36 percent increase in the unit cost of liquid asphalt. Volume improved 7 percent for the year, benefiting from solid growth in Arizona and California, the Company's two largest asphalt markets, as well as acquisitions completed during 2022. Full-year cash gross profit was $92 million, a 62 percent increase versus the prior year.

Fourth quarter Concrete segment gross profit was $17 million lower than the prior year due to lower volumes and higher costs for diesel fuel. Shipments of 2.3 million cubic yards were 15 percent lower than the prior year. The year-over-year decline resulted from significant rainfall in Texas and California and some slowdown in residential construction activity. Additionally, the Company divested its concrete operations in New York, New Jersey and Pennsylvania in November. Average selling prices increased 14 percent, partially offsetting higher raw materials, diesel and labor costs. For the full year, concrete gross profit improved $35 million, benefiting from the earnings contribution of acquisitions. Cash gross profit for the full year was $172 million.

Full year Calcium segment gross profit was $2.6 million compared to $2.2 million in the prior year.

Selling, Administrative and General (SAG) and Other Items

SAG expense in the quarter was $126 million, or 7.3 percent of total revenues. Full year SAG expense was $515 million, or 7.0 percent of total revenues, a 50-basis points improvement versus the prior year.

In the fourth quarter, we completed the disposition of our concrete operations in New York, New Jersey and Pennsylvania, resulting in an incremental pretax loss on sale of $17 million ($13 million after-tax) to the estimate recorded in the third quarter.

Financial Position, Liquidity and Capital Allocation

Capital expenditures in the fourth quarter were $266 million, including growth projects. For the full year, capital expenditures were $644 million. In 2023, the Company expects to spend $600 to $650 million, including growth projects. The Company will continue to review its plans and will adjust as needed, while being thoughtful about preserving liquidity.

On December 31, 2022, the ratio of total debt to trailing-twelve-months Adjusted EBITDA was 2.4 times (2.3 times on a net debt basis), down from 2.7 times (2.5 times on a net debt basis) at the end of 2021. The Company remains committed to its stated long-term target leverage range of 2.0 to 2.5 times total debt to trailing-twelve-months Adjusted EBITDA.

On a trailing-twelve-months basis, return on average invested capital was 13.5 percent. The Company is focused on driving improvement through solid operating earnings growth coupled with disciplined capital management.

Outlook

Regarding the Company's outlook, Mr. Hill said, "Most leading indicators of demand remain healthy in the near term, and we carry strong pricing momentum into 2023. Overall shipments will be dependent upon the depth and duration of the decline in residential construction activity, the timing of highway starts converting to aggregates shipments, and the impact of rising interest rates on private nonresidential construction activity as the year progresses. We are encouraged by the strength in leading indicators that support growth in public construction activity, particularly highways, and we are well positioned to benefit in geographic markets where the need is greatest. On the private side, slowing single-family construction activity has outweighed continued growth in multi-family, leading to overall declines in residential demand. Nonresidential demand remains at healthy levels and continues to benefit from manufacturing and other heavy industrial projects. As always, we are focused on the things we can control, and our execution on our operating and commercial disciplines will lead to further improvement in our aggregates unit profitability and earnings growth in 2023."

Management expectations for 2023 include:

Continued acceleration in Aggregates segment cash gross profit per ton improvement ($7.83 in 2022)
- Total shipments down 2 to 6 percent (236.3 million tons in 2022)
- Freight-adjusted price growth of 11 to 13 percent ($16.40 in 2022)
- High single-digit increase in freight-adjusted cash cost (freight-adjusted price less segment cash gross profit per ton; $8.57 in 2022)
Total Asphalt, Concrete and Calcium segment cash gross profit collectively in line with 2022 ($268 million in 2022)
- Asphalt improvement driven by low single-digit growth in volume and price. The price and cost inflection achieved in the second half of 2022 should lead to continued margin improvement. Expected to contribute approximately 40 to 50 percent of non-aggregates cash gross profit.
- Concrete same-store volumes (divested approximately 2 million cubic yards in 2022) expected to decline mid-single-digit due to slowing residential construction activity. Price growth should offset higher cost for raw materials. Expected to contribute approximately 50 to 60 percent of non-aggregates cash gross profit.
Selling, Administrative and General expenses of $515 to $530 million
Interest expense of approximately $195 million
Depreciation, depletion, accretion, and amortization expense of approximately $610 million
An effective tax rate of approximately 22 percent
Net earnings attributable to Vulcan of between $715 and $835 million
Adjusted EBITDA of between $1.725 and $1.875 billion

Conference Call

Vulcan will host a conference call at 10:00 a.m. CT on February 16, 2023. A webcast will be available via the Company's website at www.vulcanmaterials.com. Investors and other interested parties may access the teleconference live by calling 800-267-6316, or 203-518-9783 if outside the U.S. The conference ID is 1023841. The conference call will be recorded and available for replay at the Company's website approximately two hours after the call.

About Vulcan Materials Company

Vulcan Materials Company, a member of the S&P 500 Index with headquarters in Birmingham, Alabama, is the nation's largest supplier of construction aggregates – primarily crushed stone, sand and gravel – and a major producer of aggregates-based construction materials, including asphalt and ready-mixed concrete. For additional information about Vulcan, go to www.vulcanmaterials.com.

Non-GAAP Financial Measures

Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures, other than the reconciliation of Projected EBITDA as included in Appendix 2 hereto. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.

FORWARD-LOOKING STATEMENT DISCLAIMER

This document contains forward-looking statements. Statements that are not historical fact, including statements about Vulcan's beliefs and expectations, are forward-looking statements. Generally, these statements relate to future financial performance, results of operations, business plans or strategies, projected or anticipated revenues, expenses, earnings (including EBITDA and other measures), dividend policy, shipment volumes, pricing, levels of capital expenditures, intended cost reductions and cost savings, anticipated profit improvements and/or planned divestitures and asset sales. These forward-looking statements are sometimes identified by the use of terms and phrases such as "believe," "should," "would," "expect," "project," "estimate," "anticipate," "intend," "plan," "will," "can," "may" or similar expressions elsewhere in this document. These statements are subject to numerous risks, uncertainties, and assumptions, including but not limited to general business conditions, competitive factors, pricing, energy costs, and other risks and uncertainties discussed in the reports Vulcan periodically files with the SEC.

Forward-looking statements are not guarantees of future performance and actual results, developments, and business decisions may vary significantly from those expressed in or implied by the forward-looking statements. The following risks related to Vulcan's business, among others, could cause actual results to differ materially from those described in the forward-looking statements: general economic and business conditions; a pandemic, epidemic or other public health emergency, such as the COVID-19 outbreak; Vulcan's 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 Vulcan's effective tax rate; 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 Vulcan's 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 Vulcan's property and operations in that country; the highly competitive nature of the construction industry; 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 Vulcan's 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 Vulcan's 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 incurred by Vulcan; 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; Vulcan's ability to secure and permit aggregates reserves in strategically located areas; Vulcan's 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 Vulcan does business and how Vulcan's 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; and other assumptions, risks and uncertainties detailed from time to time in the reports filed by Vulcan with the SEC. All forward-looking statements in this communication are qualified in their entirety by this cautionary statement. Vulcan disclaims and does not undertake any obligation to update or revise any forward-looking statement in this document except as required by law.

Investor Contact: Mark Warren (205) 298-3220
Media Contact: Janet Kavinoky (205) 298-3220

VULCAN REPORTS FOURTH QUARTER AND FULL YEAR 2022 RESULTS