BIRMINGHAM, Ala., Nov. 5, 2020 /PRNewswire/ -- Vulcan
Materials Company (NYSE: VMC), the nation's largest producer of
construction aggregates, today announced results for the quarter
ended September 30, 2020.
Net earnings were $200 million
compared to $216 million in the prior
year's comparable quarter. Third quarter Adjusted EBITDA was
$403 million versus $407 million in the prior year. Adjusted
EBITDA margins expanded by 210 basis points despite an 8 percent
decline in total revenues. This margin expansion was driven
by effective cost control throughout the organization and price
growth in each major product line.
Tom Hill, Chairman and Chief
Executive Officer, said, "Building on strong performance from the
first half of the year, our operational execution produced another
quarter of unit margin expansion in the third quarter. Unit
profitability gains were widespread across our footprint, and our
team remained focused on driving those improvements. The
continued impact of the COVID-19 pandemic on construction activity,
along with severe wet weather, led to lower shipment levels in the
quarter. However, our resilient and best-in-class aggregates
business overcame these disruptive conditions, which enabled us to
expand cash gross profit per ton, drive higher cash flows, and
improve returns on invested capital."
Mr. Hill continued, "Year-to-date, cash gross profit per ton has
increased 7 percent, despite a 4 percent decline in
shipments. The flexibility of our operating plans and our
aggregates-focused business model have enabled us to continue to
perform at a high level while also positioning us for earnings
growth in the future as demand recovers. The pricing
environment remains supportive, and we are encouraged by the
sequential improvement in demand visibility. Residential
construction has rebounded quickly which should bode well for
private nonresidential construction as it has been the weakest end
market since the pandemic began. State transportation
revenues continue to recover to pre-pandemic levels, and the
one-year extension of federal highway funding will support future
highway construction. Continued recovery in these
fundamentals would point to construction activity stabilizing over
the course of 2021. As we consider the remainder of 2020, we
now believe we have sufficient near-term visibility to provide
guidance for the full year. We expect that our 2020 Adjusted
EBITDA will range between $1.285
billion to $1.315
billion."
Highlights as of September 30,
2020 include:
|
Third
Quarter
|
|
Year-to-Date
|
|
Trailing-Twelve
Months
|
Amounts in millions,
except per unit data
|
2020
|
2019
|
|
2020
|
2019
|
|
2020
|
2019
|
Total
revenues
|
$
1,309.9
|
$
1,418.8
|
|
$
3,681.7
|
$
3,743.0
|
|
$
4,867.9
|
$
4,831.0
|
Gross
profit
|
$
380.5
|
$
400.6
|
|
$
978.7
|
$
962.8
|
|
$
1,271.8
|
$
1,238.1
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
Segment
sales
|
$
1,049.0
|
$
1,133.1
|
|
$
2,987.8
|
$
3,030.1
|
|
$
3,947.9
|
$
3,904.1
|
Freight-adjusted
revenue
|
$
807.6
|
$
858.5
|
|
$
2,270.3
|
$
2,293.6
|
|
$
2,990.9
|
$
2,951.2
|
Gross
profit
|
$
337.9
|
$
357.2
|
|
$
883.2
|
$
872.1
|
|
$
1,157.7
|
$
1,128.5
|
Shipments
(tons)
|
55.9
|
60.9
|
|
157.2
|
163.8
|
|
208.8
|
213.6
|
Freight-adjusted
sales price per ton
|
$
14.44
|
$
14.10
|
|
$
14.45
|
$
14.00
|
|
$
14.33
|
$
13.82
|
Gross profit per
ton
|
$
6.04
|
$
5.87
|
|
$
5.62
|
$
5.32
|
|
$
5.54
|
$
5.28
|
Asphalt, Concrete
& Calcium segment gross profit
|
$
42.6
|
$
43.4
|
|
$
95.6
|
$
90.7
|
|
$
114.1
|
$
109.6
|
Selling,
Administrative and General (SAG)
|
$
83.5
|
$
88.8
|
|
$
261.1
|
$
274.7
|
|
$
356.9
|
$
359.1
|
SAG as % of Total
revenues
|
6.4%
|
6.3%
|
|
7.1%
|
7.3%
|
|
7.3%
|
7.4%
|
Earnings from
continuing operations before income taxes
|
$
258.1
|
$
271.5
|
|
$
602.6
|
$
591.7
|
|
$
768.6
|
$
745.6
|
Net
earnings
|
$
199.8
|
$
215.7
|
|
$
470.0
|
$
476.6
|
|
$
611.1
|
$
600.6
|
Adjusted
EBIT
|
$
302.5
|
$
310.6
|
|
$
716.4
|
$
692.6
|
|
$
919.2
|
$
888.4
|
Adjusted
EBITDA
|
$
403.5
|
$
406.8
|
|
$
1,012.3
|
$
971.6
|
|
$
1,310.8
|
$
1,257.1
|
Earnings from
continuing operations per diluted share
|
$
1.51
|
$
1.63
|
|
$
3.54
|
$
3.60
|
|
$
4.61
|
$
4.53
|
Adjusted earnings
from continuing operations per diluted share
|
$
1.56
|
$
1.68
|
|
$
3.62
|
$
3.62
|
|
$
4.70
|
$
4.61
|
Segment Results
Aggregates
Third quarter gross profit margin expanded 70 basis points
despite a decrease in segment sales. Gross profit was
$338 million compared to $357 million in the prior year. Unit
profitability increased 3 percent to $6.04 per ton due to widespread growth in pricing
and effective cost control.
Third quarter aggregates shipments were 8 percent lower than the
prior year's third quarter due to economic uncertainty caused by
the pandemic, severe wet weather and wildfires in key
markets. Last year's third quarter included very few severe
weather events, helping drive strong volume growth. Despite
lower shipments in most markets, virtually all of the Company's
markets improved their respective unit profitability compared to
the prior year's third quarter. Shipments declined in most of
our markets reflecting weaker demand resulting from the
pandemic. Shipments along the Atlantic Coast, in the
Southeast and Texas were impacted
by severe weather. Shipments in California were impacted by wildfires and
resulting power outages which interrupted the supply of cement for
ready-mix concrete production and limited construction
activity.
On a mix-adjusted basis, most of the Company's markets reported
year-over-year price growth. For the quarter, mix-adjusted
sales price increased 2.9 percent (reported freight-adjusted sales
price increased 2.4 percent). Year-to-date, mix-adjusted
pricing has increased 3.5 percent (reported freight-adjusted sales
price increased 3.2 percent) despite a 4 percent decline in
shipments.
Freight-adjusted unit cost of sales increased 2 percent, and
cash costs were flat versus the prior year's third quarter.
Effective operating efficiencies and lower diesel fuel costs
helped mitigate the cost impact of lower sales volumes. The
Aggregates segment earnings impact from lower diesel fuel was
$9 million in the quarter.
Asphalt, Concrete and Calcium
Asphalt segment gross profit was $30
million, an improvement of $3
million from the prior year's third quarter. The
year-over-year improvement was driven by higher material margins
(sales price less unit cost of raw materials). Although
asphalt volumes in the third quarter declined 13 percent compared
to the prior year, results benefited from slightly higher prices
and effective cost containment, including lower liquid asphalt
costs. Shipments in the current year's quarter were impacted
by wildfires in California, the
Company's largest asphalt market, and the completion of certain
large projects last year in the Tennessee market.
Concrete segment gross profit was $12
million compared with $15
million in the prior year's third quarter. Shipments
decreased 11 percent versus the prior year, and average selling
prices increased 3 percent compared to the prior year. Third
quarter shipments were impacted by wet weather in Virginia, the Company's largest concrete
market, and wildfires in Northern
California.
Calcium segment gross profit was $0.2
million versus $0.8 million in
the prior year quarter.
Selling, Administrative and General (SAG) and Other Operating
Expense
SAG expense declined 6 percent to $84
million in the quarter due mostly to continued execution of
cost reduction initiatives and general cost control. On a
trailing twelve-month basis, SAG expense as a percentage of total
revenues is 7.3 percent. The Company remains focused on
further leveraging its overhead cost structure.
Other operating expense of $10
million included $6 million in
charges associated with divested operations. The prior year
did not include a similar charge.
Financial Position, Liquidity and Capital Allocation
Capital expenditures in the third quarter were $52 million and $229
million year-to-date. The Company expects to spend
between $300 million and $350 million on capital this year, most of which
is for core operating and maintenance projects. The Company
continues to review its plans and will adjust as needed, while
being thoughtful about preserving liquidity.
Year-to-date September 30, the
Company returned $135 million to
shareholders through dividends, a 10 percent increase versus the
prior year. Year-to-date, the Company repurchased
$26 million in common stock.
At quarter-end, total debt to trailing-twelve month Adjusted
EBITDA was 2.5 times or 1.7 times on a net debt basis reflecting
$1.1 billion of cash on hand - of
which approximately $500 million will
be used to pay off certain maturities due March 2021. The
Company's weighted-average debt maturity was 14 years, and the
effective weighted-average interest rate was 4.1 percent.
On a trailing twelve-month basis, return on invested capital
increased to 14.2 percent and operating cash flows were
$1.1 billion, up 23 percent versus
the comparable previous trailing twelve months. Solid
earnings growth coupled with disciplined capital management led to
these results.
Outlook
Mr. Hill stated, "Going into 2020, we expected shipment growth;
however, in March, that trajectory was disrupted by COVID-19 and
the resulting shelter-in-place ordinances. Since then, the
economic uncertainty and the evolving nature of the pandemic have
continued to weigh on construction activity. We are
encouraged by the recent sequential improvement in leading
indicators that foreshadow future construction activity, and now
believe that we have sufficient near-term visibility to provide
full-year guidance. We expect full-year 2020 Adjusted EBITDA
of $1.285 billion to $1.315 billion. This full year outlook
reflects year-over-year earnings growth despite lower
shipments. It assumes no major changes in COVID
shelter-in-place restrictions and also assumes a normal weather
pattern for the balance of the year. As we look ahead to
2021, the pricing environment remains positive and we continue to
work hard to add value for our customers. We expect to
provide full-year guidance when we report fourth quarter earnings
in February."
Reflecting on the Company's execution, Mr. Hill went on to say,
"While demand is subject to market fluctuations outside of our
control, we remain focused on the factors we can control, such as
our pricing and cost actions, both of which help to compound our
unit margins. Our year-to-date results demonstrate our
capabilities to drive continued improvement in challenging
circumstances. Actions taken across our more than 360
locations have ensured an effective response to the economic
disruption resulting from COVID-19. Our operating plans are
underpinned by our four strategic disciplines (Commercial and
Operational Excellence, Logistics Innovation and Strategic
Sourcing), a healthy balance sheet, strong liquidity, and the
engagement of our people."
Conference Call
Vulcan will host a conference call at 10:00 a.m. CST on November
5, 2020. 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
833-962-1439, or 832-900-4623 if outside the U.S., approximately 10
minutes before the scheduled start. The conference ID is
7796747. The conference call will be recorded and available
for replay at the Company's website approximately two hours after
the call.
Vulcan Materials Company, a member of the S&P 500 Index with
headquarters in Birmingham,
Alabama, is the nation's largest producer 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.
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 recent outbreak of COVID-19; 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; the highly competitive
nature of the construction industry; the impact of future
regulatory or legislative actions, including those relating to
climate change, wetlands, greenhouse gas emissions, the definition
of minerals, tax policy or 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; energy costs; costs of hydrocarbon-based
raw materials; healthcare costs; the amount of long-term debt and
interest expense incurred by Vulcan; changes in interest rates; the
impact of a discontinuation of the London Interbank Offered Rate
(LIBOR); 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; 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.
|
|
|
|
|
|
|
|
|
|
Table A
|
Vulcan Materials
Company
|
|
|
|
|
|
and Subsidiary
Companies
|
|
|
|
|
|
|
|
|
|
(in thousands, except
per share data)
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
Consolidated
Statements of Earnings
|
|
September
30
|
|
September
30
|
(Condensed and
unaudited)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
$1,309,890
|
|
$1,418,758
|
|
$3,681,707
|
|
$3,742,951
|
Cost of
revenues
|
|
929,392
|
|
1,018,115
|
|
2,702,967
|
|
2,780,131
|
Gross
profit
|
|
380,498
|
|
400,643
|
|
978,740
|
|
962,820
|
Selling,
administrative and general expenses
|
|
83,511
|
|
88,789
|
|
261,146
|
|
274,747
|
Gain on sale of
property, plant & equipment
|
|
|
|
|
|
|
|
|
and
businesses
|
|
1,576
|
|
234
|
|
2,317
|
|
10,982
|
Other operating
expense, net
|
|
(10,459)
|
|
(8,712)
|
|
(20,610)
|
|
(15,173)
|
Operating
earnings
|
|
288,104
|
|
303,376
|
|
699,301
|
|
683,882
|
Other nonoperating
income, net
|
|
5,787
|
|
359
|
|
3,818
|
|
5,954
|
Interest expense,
net
|
|
35,782
|
|
32,197
|
|
100,509
|
|
98,165
|
Earnings from
continuing operations
|
|
|
|
|
|
|
|
|
before income
taxes
|
|
258,109
|
|
271,538
|
|
602,610
|
|
591,671
|
Income tax
expense
|
|
56,984
|
|
53,472
|
|
130,530
|
|
111,764
|
Earnings from
continuing operations
|
|
201,125
|
|
218,066
|
|
472,080
|
|
479,907
|
Loss on discontinued
operations, net of tax
|
|
(1,337)
|
|
(2,353)
|
|
(2,118)
|
|
(3,338)
|
Net
earnings
|
|
$199,788
|
|
$215,713
|
|
$469,962
|
|
$476,569
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$1.52
|
|
$1.65
|
|
$3.56
|
|
$3.63
|
Discontinued
operations
|
|
($0.01)
|
|
($0.02)
|
|
($0.01)
|
|
($0.03)
|
Net
earnings
|
|
$1.51
|
|
$1.63
|
|
$3.55
|
|
$3.60
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$1.51
|
|
$1.63
|
|
$3.54
|
|
$3.60
|
Discontinued
operations
|
|
($0.01)
|
|
($0.01)
|
|
($0.01)
|
|
($0.02)
|
Net
earnings
|
|
$1.50
|
|
$1.62
|
|
$3.53
|
|
$3.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
132,573
|
|
132,414
|
|
132,564
|
|
132,244
|
Assuming
dilution
|
|
133,268
|
|
133,375
|
|
133,192
|
|
133,273
|
Depreciation,
depletion, accretion and amortization
|
|
$100,962
|
|
$96,247
|
|
$295,912
|
|
$278,925
|
Effective tax rate
from continuing operations
|
|
22.1%
|
|
19.7%
|
|
21.7%
|
|
18.9%
|
|
|
|
|
|
|
|
|
Table B
|
Vulcan Materials
Company
|
|
|
|
|
|
|
and Subsidiary
Companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
Consolidated
Balance Sheets
|
|
September
30
|
|
December
31
|
|
September
30
|
(Condensed and
unaudited)
|
|
2020
|
|
2019
|
|
2019
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$1,084,100
|
|
$271,589
|
|
$90,411
|
Restricted
cash
|
|
630
|
|
2,917
|
|
691
|
Accounts and notes
receivable
|
|
|
|
|
|
|
Accounts and notes
receivable, gross
|
|
647,362
|
|
573,241
|
|
727,900
|
Allowance for
doubtful accounts
|
|
(3,155)
|
|
(3,125)
|
|
(2,960)
|
Accounts and notes
receivable, net
|
|
644,207
|
|
570,116
|
|
724,940
|
Inventories
|
|
|
|
|
|
|
Finished
products
|
|
384,575
|
|
391,666
|
|
364,164
|
Raw
materials
|
|
34,562
|
|
31,318
|
|
31,250
|
Products in
process
|
|
5,098
|
|
5,604
|
|
6,062
|
Operating supplies
and other
|
|
31,226
|
|
29,720
|
|
28,184
|
Inventories
|
|
455,461
|
|
458,308
|
|
429,660
|
Other current
assets
|
|
80,935
|
|
76,396
|
|
78,540
|
Total current
assets
|
|
2,265,333
|
|
1,379,326
|
|
1,324,242
|
Investments and
long-term receivables
|
|
41,778
|
|
60,709
|
|
57,059
|
Property, plant &
equipment
|
|
|
|
|
|
|
Property, plant &
equipment, cost
|
|
8,958,342
|
|
8,749,217
|
|
8,657,731
|
Allowances for
depreciation, depletion & amortization
|
|
(4,614,543)
|
|
(4,433,179)
|
|
(4,370,386)
|
Property, plant &
equipment, net
|
|
4,343,799
|
|
4,316,038
|
|
4,287,345
|
Operating lease
right-of-use assets, net
|
|
431,227
|
|
408,189
|
|
410,833
|
Goodwill
|
|
3,172,112
|
|
3,167,061
|
|
3,167,061
|
Other intangible
assets, net
|
|
1,107,091
|
|
1,091,475
|
|
1,071,330
|
Other noncurrent
assets
|
|
229,193
|
|
225,995
|
|
221,803
|
Total
assets
|
|
$11,590,533
|
|
$10,648,793
|
|
$10,539,673
|
Liabilities
|
|
|
|
|
|
|
Current maturities of
long-term debt
|
|
509,435
|
|
25
|
|
24
|
Trade payables and
accruals
|
|
263,296
|
|
265,159
|
|
265,012
|
Other current
liabilities
|
|
297,162
|
|
270,379
|
|
270,248
|
Total current
liabilities
|
|
1,069,893
|
|
535,563
|
|
535,284
|
Long-term
debt
|
|
2,777,072
|
|
2,784,315
|
|
2,783,068
|
Deferred income
taxes, net
|
|
685,520
|
|
633,039
|
|
628,726
|
Deferred
revenue
|
|
174,488
|
|
179,880
|
|
180,541
|
Operating lease
liabilities
|
|
407,336
|
|
388,042
|
|
391,079
|
Other noncurrent
liabilities
|
|
547,872
|
|
506,097
|
|
478,736
|
Total
liabilities
|
|
$5,662,181
|
|
$5,026,936
|
|
$4,997,434
|
Equity
|
|
|
|
|
|
|
Common stock, $1 par
value
|
|
132,454
|
|
132,371
|
|
132,350
|
Capital in excess of
par value
|
|
2,797,222
|
|
2,791,353
|
|
2,785,245
|
Retained
earnings
|
|
3,204,671
|
|
2,895,871
|
|
2,795,834
|
Accumulated other
comprehensive loss
|
|
(205,995)
|
|
(197,738)
|
|
(171,190)
|
Total
equity
|
|
$5,928,352
|
|
$5,621,857
|
|
$5,542,239
|
Total liabilities and
equity
|
|
$11,590,533
|
|
$10,648,793
|
|
$10,539,673
|
|
|
|
|
|
|
|
Table C
|
Vulcan Materials
Company
|
|
|
|
|
and Subsidiary
Companies
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
Nine Months
Ended
|
Consolidated
Statements of Cash Flows
|
|
September
30
|
(Condensed and
unaudited)
|
|
2020
|
|
2019
|
Operating
Activities
|
|
|
|
|
Net
earnings
|
|
|
|
|
$469,962
|
|
$476,569
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities
|
|
|
|
|
Depreciation,
depletion, accretion and amortization
|
|
295,912
|
|
278,925
|
Noncash operating
lease expense
|
|
27,820
|
|
26,349
|
Net gain on sale of
property, plant & equipment and businesses
|
|
(2,317)
|
|
(10,982)
|
Contributions to
pension plans
|
|
(6,540)
|
|
(6,767)
|
Share-based
compensation expense
|
|
23,239
|
|
24,815
|
Deferred tax expense
(benefit)
|
|
50,346
|
|
62,232
|
Changes in assets and
liabilities before initial
|
|
|
|
|
effects of business
acquisitions and dispositions
|
|
(76,545)
|
|
(221,001)
|
Other, net
|
|
|
|
|
(3,951)
|
|
15,989
|
Net cash provided by
operating activities
|
|
$777,926
|
|
$646,129
|
Investing
Activities
|
|
|
|
|
Purchases of
property, plant & equipment
|
|
(268,989)
|
|
(306,893)
|
Proceeds from sale of
property, plant & equipment
|
|
9,440
|
|
12,112
|
Proceeds from sale of
businesses
|
|
651
|
|
1,744
|
Payment for
businesses acquired, net of acquired cash
|
|
(5,668)
|
|
1,122
|
Other, net
|
|
|
|
|
10,819
|
|
(11,342)
|
Net cash used for
investing activities
|
|
($253,747)
|
|
($303,257)
|
Financing
Activities
|
|
|
|
|
Proceeds from
short-term debt
|
|
0
|
|
366,900
|
Payment of short-term
debt
|
|
0
|
|
(499,900)
|
Payment of current
maturities and long-term debt
|
|
(250,018)
|
|
(17)
|
Proceeds from
issuance of long-term debt
|
|
750,000
|
|
0
|
Debt issuance and
exchange costs
|
|
(15,394)
|
|
0
|
Settlements of
interest rate derivatives
|
|
(19,863)
|
|
0
|
Purchases of common
stock
|
|
(26,132)
|
|
(2,602)
|
Dividends
paid
|
|
|
|
(135,161)
|
|
(122,943)
|
Share-based
compensation, shares withheld for taxes
|
|
(16,303)
|
|
(37,598)
|
Other, net
|
|
|
|
|
(1,084)
|
|
(14)
|
Net cash provided by
(used for) financing activities
|
|
$286,045
|
|
($296,174)
|
Net increase in cash
and cash equivalents and restricted cash
|
|
810,224
|
|
46,698
|
Cash and cash
equivalents and restricted cash at beginning of year
|
|
274,506
|
|
44,404
|
Cash and cash
equivalents and restricted cash at end of period
|
|
$1,084,730
|
|
$91,102
|
|
|
|
|
|
|
|
|
|
|
|
Table D
|
Segment Financial
Data and Unit Shipments
|
|
|
|
|
|
|
|
|
|
(in thousands, except
per unit data)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
September
30
|
|
September
30
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Total
Revenues
|
|
|
|
|
|
|
|
|
Aggregates
1
|
|
$1,048,962
|
|
$1,133,085
|
|
$2,987,784
|
|
$3,030,111
|
Asphalt
2
|
|
235,201
|
|
270,237
|
|
597,940
|
|
649,490
|
Concrete
|
|
102,807
|
|
112,964
|
|
298,255
|
|
300,369
|
Calcium
|
|
|
1,354
|
|
2,119
|
|
5,269
|
|
6,073
|
Segment
sales
|
|
$1,388,324
|
|
$1,518,405
|
|
$3,889,248
|
|
$3,986,043
|
Aggregates
intersegment sales
|
|
(78,434)
|
|
(99,647)
|
|
(207,541)
|
|
(243,092)
|
Total
revenues
|
|
$1,309,890
|
|
$1,418,758
|
|
$3,681,707
|
|
$3,742,951
|
Gross
Profit
|
|
|
|
|
|
|
|
|
Aggregates
|
|
$337,891
|
|
$357,202
|
|
$883,184
|
|
$872,133
|
Asphalt
|
|
|
30,217
|
|
27,639
|
|
58,246
|
|
51,950
|
Concrete
|
|
12,157
|
|
15,037
|
|
35,597
|
|
36,487
|
Calcium
|
|
|
|
|
233
|
|
765
|
|
1,713
|
|
2,250
|
Total
|
|
|
|
$380,498
|
|
$400,643
|
|
$978,740
|
|
$962,820
|
Depreciation,
Depletion, Accretion and Amortization
|
|
|
|
|
Aggregates
|
|
$82,487
|
|
$78,978
|
|
$240,370
|
|
$227,259
|
Asphalt
|
|
|
8,644
|
|
8,909
|
|
26,046
|
|
26,343
|
Concrete
|
|
3,987
|
|
3,371
|
|
12,070
|
|
9,662
|
Calcium
|
|
|
49
|
|
59
|
|
146
|
|
177
|
Other
|
|
|
|
5,795
|
|
4,930
|
|
17,280
|
|
15,484
|
Total
|
|
|
|
$100,962
|
|
$96,247
|
|
$295,912
|
|
$278,925
|
Average Unit Sales
Price and Unit Shipments
|
|
|
|
|
Aggregates
|
|
|
|
|
|
|
|
|
Freight-adjusted
revenues 3
|
|
$807,575
|
|
$858,522
|
|
$2,270,321
|
|
$2,293,573
|
Aggregates -
tons
|
|
55,920
|
|
60,898
|
|
157,163
|
|
163,845
|
Freight-adjusted
sales price 4
|
|
$14.44
|
|
$14.10
|
|
$14.45
|
|
$14.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Products
|
|
|
|
|
|
|
|
|
Asphalt Mix -
tons
|
|
3,493
|
|
4,007
|
|
8,953
|
|
9,624
|
Asphalt Mix - sales
price
|
|
$58.36
|
|
$58.20
|
|
$58.05
|
|
$57.76
|
|
|
|
|
|
|
|
|
|
|
|
|
Ready-mixed concrete
- cubic yards
|
|
775
|
|
875
|
|
2,295
|
|
2,359
|
Ready-mixed concrete
- sales price
|
|
$131.51
|
|
$127.99
|
|
$128.93
|
|
$126.19
|
|
|
|
|
|
|
|
|
|
|
|
|
Calcium -
tons
|
|
49
|
|
75
|
|
193
|
|
216
|
Calcium - sales
price
|
|
$27.51
|
|
$28.33
|
|
$27.18
|
|
$28.04
|
|
1 Includes
product sales (crushed stone, sand and gravel, sand, and other
aggregates), as well as freight & delivery
|
|
costs that we pass
along to our customers, and service revenues related to
aggregates.
|
2 Includes
product sales, as well as service revenues from our asphalt
construction paving business.
|
3
Freight-adjusted revenues are Aggregates segment sales excluding
freight & delivery revenues and immaterial
|
|
other revenues
related to services, such as landfill tipping fees, that are
derived from our aggregates business.
|
4
Freight-adjusted sales price is calculated as freight-adjusted
revenues divided by aggregates unit shipments.
|
|
|
|
|
|
|
|
|
|
|
|
Appendix 1
|
|
1.
Reconciliation of Non-GAAP Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates segment
freight-adjusted revenues is not a Generally Accepted Accounting
Principle (GAAP) measure. We present this metric as it is
consistent with the basis by which we review our operating results.
We believe that this presentation is consistent with our
competitors and meaningful to our investors as it excludes revenues
associated with freight & delivery, which are pass-through
activities. It also excludes immaterial other revenues related to
services, such as landfill tipping fees, that are derived from our
aggregates business. Additionally, we use this metric as the basis
for calculating the average sales price of our aggregates products.
Reconciliation of this metric to its nearest GAAP measure is
presented below:
|
|
|
|
Aggregates Segment
Freight-Adjusted Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
per ton data)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
September
30
|
|
September
30
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
|
Segment
sales
|
|
$1,048,962
|
|
$1,133,085
|
|
$2,987,784
|
|
$3,030,111
|
|
Less:
|
|
Freight &
delivery revenues 1
|
|
225,382
|
|
259,417
|
|
671,969
|
|
695,924
|
|
|
|
|
Other
revenues
|
|
16,005
|
|
15,146
|
|
45,494
|
|
40,614
|
|
Freight-adjusted
revenues
|
|
$807,575
|
|
$858,522
|
|
$2,270,321
|
|
$2,293,573
|
|
Unit shipment -
tons
|
|
55,920
|
|
60,898
|
|
157,163
|
|
163,845
|
|
Freight-adjusted
sales price
|
|
$14.44
|
|
$14.10
|
|
$14.45
|
|
$14.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 At
the segment level, freight & delivery revenues include
intersegment freight & delivery (which are eliminated at the
consolidated level) and freight to remote distribution
sites.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates segment
incremental gross profit flow-through rate is not a GAAP measure
and represents the year-over-year change in gross profit divided by
the year-over-year change in segment sales excluding freight &
delivery (revenues and costs). We present this metric as it is
consistent with the basis by which we review our operating results.
We believe that this presentation is consistent with our
competitors and meaningful to our investors as it excludes revenues
associated with freight & delivery, which are pass-through
activities. Reconciliation of this metric to its nearest GAAP
measure is presented below:
|
|
|
|
Aggregates Segment
Incremental Gross Profit Margin in Accordance with
GAAP
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
September
30
|
|
September
30
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
$337,891
|
|
$357,202
|
|
$883,184
|
|
$872,133
|
|
Segment
sales
|
|
$1,048,962
|
|
$1,133,085
|
|
$2,987,784
|
|
$3,030,111
|
|
Gross profit
margin
|
|
32.2%
|
|
31.5%
|
|
29.6%
|
|
28.8%
|
|
Incremental gross
profit margin
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates Segment
Incremental Gross Profit Flow-through Rate
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
September
30
|
|
September
30
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
$337,891
|
|
$357,202
|
|
$883,184
|
|
$872,133
|
|
Segment
sales
|
|
$1,048,962
|
|
$1,133,085
|
|
$2,987,784
|
|
$3,030,111
|
|
Less:
|
|
Freight &
delivery revenues 1
|
|
225,382
|
|
259,417
|
|
671,969
|
|
695,924
|
|
|
Segment sales
excluding freight & delivery
|
|
$823,580
|
|
$873,668
|
|
$2,315,815
|
|
$2,334,187
|
|
Gross profit margin
excluding freight & delivery
|
|
41.0%
|
|
40.9%
|
|
38.1%
|
|
37.4%
|
|
Incremental gross
profit flow-through rate
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 At the
segment level, freight & delivery revenues include intersegment
freight & delivery (which are eliminated at the consolidated
level) and freight to remote distribution sites.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP does not define
"Aggregates segment cash gross profit" and it should not be
considered as an alternative to earnings measures defined by GAAP.
We and the investment community use this metric to assess the
operating performance of our business. Additionally, we present
this metric as we believe that it closely correlates to long-term
shareholder value. We do not use this metric as a measure to
allocate resources. Aggregates segment cash gross profit per
ton is computed by dividing Aggregates segment cash gross profit by
tons shipped. Reconciliation of this metric to its nearest GAAP
measure is presented below:
|
|
|
|
Aggregates Segment
Cash Gross Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
per ton data)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
September
30
|
|
September
30
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
$337,891
|
|
$357,202
|
|
$883,184
|
|
$872,133
|
|
Depreciation,
depletion, accretion and amortization
|
|
82,487
|
|
78,978
|
|
240,370
|
|
227,259
|
|
|
Aggregates segment
cash gross profit
|
|
$420,378
|
|
$436,180
|
|
$1,123,554
|
|
$1,099,392
|
|
Unit shipments -
tons
|
|
55,920
|
|
60,898
|
|
157,163
|
|
163,845
|
|
Aggregates segment
cash gross profit per ton
|
|
$7.52
|
|
$7.16
|
|
$7.15
|
|
$6.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix 2
|
|
Reconciliation of
Non-GAAP Measures (Continued)
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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:
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EBITDA and
Adjusted EBITDA
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(in
thousands)
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Three Months
Ended
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Nine Months
Ended
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TTM
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September
30
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September
30
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September
30
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2020
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2019
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2020
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2019
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2020
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2019
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Net
earnings
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$199,788
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$215,713
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$469,962
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$476,569
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$611,055
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$600,591
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Income tax
expense
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56,984
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53,472
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130,530
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111,764
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153,964
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141,408
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Interest expense,
net
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35,782
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32,197
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100,509
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98,165
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131,344
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131,022
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Loss on discontinued
operations, net of tax
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1,337
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2,353
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2,118
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3,338
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3,621
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3,596
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EBIT
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$293,891
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$303,735
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$703,119
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$689,836
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$899,984
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$876,617
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Depreciation,
depletion, accretion and amortization
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100,962
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96,247
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295,912
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278,925
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391,583
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368,708
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EBITDA
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$394,853
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$399,982
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$999,031
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$968,761
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$1,291,567
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$1,245,325
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Gain on sale of
businesses
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0
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0
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0
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(4,064)
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(9,289)
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(4,064)
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Property
donation
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0
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0
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0
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0
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10,847
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0
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Charges associated
with divested operations
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5,892
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0
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6,666
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0
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9,699
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8,497
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Business development
1
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346
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403
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(2,113)
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403
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(768)
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403
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COVID-19 direct
incremental costs
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2,380
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0
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7,389
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0
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7,389
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0
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Restructuring charges
2
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0
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6,457
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1,333
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6,457
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1,333
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6,970
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Adjusted
EBITDA
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$403,471
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$406,842
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$1,012,306
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$971,557
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$1,310,778
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$1,257,131
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Depreciation,
depletion, accretion and amortization
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(100,962)
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(96,247)
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(295,912)
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(278,925)
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(391,583)
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(368,708)
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Adjusted
EBIT
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$302,509
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$310,595
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$716,394
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$692,632
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$919,195
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$888,423
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1 Represents non-routine charges or
gains associated with acquisitions including the cost impact of
purchase accounting inventory valuations.
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2
Restructuring charges are included within other operating expenses.
The charges relate to managerial restructuring.
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Similar to our
presentation of Adjusted EBITDA, we present Adjusted Diluted
earnings per share (EPS) from continuing operations to provide a
more consistent comparison of earnings performance from period to
period. 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:
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Adjusted Diluted
EPS from Continuing Operations (Adjusted Diluted
EPS)
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Three Months
Ended
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Nine Months
Ended
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TTM
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September
30
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September
30
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September
30
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2020
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2019
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2020
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2019
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2020
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2019
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Diluted EPS from
continuing operations
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$1.51
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$1.63
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$3.54
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$3.60
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$4.61
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$4.53
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Items included in
Adjusted EBITDA above
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0.05
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0.05
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0.08
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0.02
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0.09
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0.08
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Adjusted Diluted
EPS
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$1.56
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$1.68
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$3.62
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$3.62
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$4.70
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$4.61
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The following
reconciliation to the mid-point of the range of 2020 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:
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2020 Projected
EBITDA
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(in
millions)
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Mid-point
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Net
earnings
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$607
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Income tax
expense
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168
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Interest expense,
net
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135
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Discontinued
operations, net of tax
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0
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Depreciation,
depletion, accretion and amortization
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390
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Projected
EBITDA
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$1,300
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Appendix 3
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Reconciliation of
Non-GAAP Measures (Continued)
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We define Return on
Invested Capital (ROIC) as Adjusted EBITDA for the trailing-twelve
months divided by average invested capital (as illustrated below)
during the trailing 5-quarters. Our calculation of ROIC is
considered a non-GAAP financial measure because we calculate ROIC
using the non-GAAP metric EBITDA. We believe that our ROIC metric
is meaningful because it helps investors assess how effectively we
are deploying our assets. Although ROIC is a standard financial
metric, numerous methods exist for calculating a company's ROIC. As
a result, the method we use to calculate our ROIC may differ from
the methods used by other companies.
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Return on Invested
Capital
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(in
thousands)
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TTM
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September
30
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2020
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2019
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Adjusted
EBITDA
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$1,310,778
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$1,257,131
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Average invested
capital 1
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Property, plant &
equipment
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4,346,256
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4,255,879
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Goodwill
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3,169,082
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3,166,195
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Other intangible
assets
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1,093,601
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1,085,689
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Fixed and intangible
assets
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$8,608,939
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$8,507,763
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Current
assets
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1,655,158
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1,183,633
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Less: Cash and cash
equivalents
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477,562
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47,241
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Less: Deferred
tax
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16,002
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9,078
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Adjusted current
assets
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1,161,594
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1,127,314
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Current
liabilities
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731,033
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630,289
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Less: Current
maturities of long-term debt
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201,907
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24
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Less: Short-term
debt
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0
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129,700
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Adjusted current
liabilities
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529,126
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500,565
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Adjusted net working
capital
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$632,468
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$626,749
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Average invested
capital
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$9,241,407
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$9,134,512
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Return on Invested
Capital
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14.2%
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13.8%
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1 Average Invested Capital is based
on a trailing 5-quarters.
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SOURCE Vulcan Materials Company