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62 • ROCK products • August 2018 Aggregates Strength Drives Vulcan's First- Quarter Success Vulcan Materials Co. announced that first-quarter earnings from continuing operations increased 23 percent year-over- year to $53 million on a 9 percent increase in total revenues. Gross profit was $159 million, led by a 7 percent increase in Aggregates segment gross profit to $148 million. Asphalt, Concrete and Calcium segment gross profit was $11 million, as delayed work and higher input costs negatively impacted Asphalt margins. Selling, administrative, and gen- eral expenses declined $4 million to $78 million. In the company's core Aggregates segment, unit margins improved despite higher energy costs and shipment delays due to unusually cold and wet weather in certain markets. On a same-store basis, the aggregates business delivered cash gross profit per ton of $5.33, a record for the first quarter. This $0.19 per ton increase over the prior-year period was achieved despite an $0.11 per ton increase in diesel. Same-store shipments grew 1 percent for the quarter, with a 7 percent increase in daily shipment rates in March as weather conditions improved. Adjusted for mix, freight-ad- justed average selling price rose 3 percent over the prior year. Same-store total cost of revenues per ton declined year- over-year despite the aforementioned weather and energy cost headwinds as well as the planned shutdown of certain large production facilities for maintenance ahead of the con- struction season. Tom Hill, chairman and chief executive officer, said, "Our first quarter results represent a solid start to the year and were consistent with our internal plans and full-year expec- tations despite difficult weather and higher than anticipated energy costs. Key leading indicators, as well as our shipment patterns through the first quarter and through April, sup- port our full-year volume expectations. Aggregates pricing momentum continues to improve, supported by demand visibility, higher diesel prices, and tight logistics capacity. And as seen in our first quarter results, we've begun to turn the corner with respect to cost challenges faced in 2017. As such, we reiterate our full-year expectations for 2018 earn- ings from continuing operations of between $4.00 and $4.65 per diluted share and Adjusted EBITDA of between $1.150 and $1.250 billion." First-quarter Aggregates segment gross profit increased 7 percent to $148 million, or $3.66 per ton. Solid operating disciplines and the absence of one-time costs (e.g. California flooding) experienced in the prior year's first quarter helped offset a 26 percent increase in the unit cost for diesel fuel, the planned shutdown of three large facilities for repairs ahead of the construction season, and above normal distri- bution costs due to lingering storm-related ship and barge movement inefficiencies. The company has taken possession of one of its two new, more efficient, Panamax-class ships, and expects to take possession of the second ship during the second quarter. First-quarter aggregates shipments increased 6 percent (1 percent on a same-store basis) versus the prior year's quarter. After being down 3 percent through February, same- store daily shipment rates for aggregates were up 7 percent year-over-year in March, reflecting demand fundamentals consistent with our full-year expectations. Shipments in Arizona, California, Florida and coastal Texas experienced double-digit gains due to solid demand growth and the start of some large projects. Shipment growth in other Texas markets, particularly north Texas, were held back due to wet weather. Wetter and colder weather led to reduced shipments in a number of other southeastern mar- kets and Virginia. On a same-store basis, shipments in Georgia and South Carolina were down double-digits and Virginia decreased high-single digits. Daily shipping rates in these markets strengthened in April, and the company's overall shipment momentum remained consistent with full-year plans. With respect to the balance of 2018, leading indicators such as employment growth and construction starts indicate a continued recovery in demand across Vulcan's footprint. Private demand, both residential and nonresidential, con- tinues to recover across Vulcan-served markets, and highway demand is again growing after a disappointing 2017. Trans- portation agencies appear to be catching up to new, higher funding levels in key Vulcan-served states. Construction starts data for Vulcan markets – as well as the company's backlogs, booking rates for future work, and shipment patterns – all suggest improved demand visibil- ity. Certain markets do face near-term logistics challenges, Aggregates Industry Almanac Publicly Traded Companies Publicly Traded Companies The Aggregates Industry's Publicly Traded Companies Reported First Quarter Results.

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