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VULCAN 401(k) PLAN





TABLE OF CONTENTS





 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Trustees and Participants of the Vulcan 401(k) Plan 

Birmingham, Alabama





Opinion on the Financial Statements

We have audited the accompanying statements of net assets available for benefits of the Vulcan 401(k) Plan  (the “Plan”) as of December 31, 2021 and 2020, the related statement of changes in net assets available for benefits for the year ended December 31, 2021, and the related notes  (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2021 and 2020, and the changes in net assets available for benefits for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.



Basis for Opinion

These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.



Report on the Supplemental Schedule

The supplemental schedule of assets (held at end of year) as of December 31, 2021 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental schedule is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental schedule reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental schedule. In forming our opinion on the supplemental schedule, we evaluated whether the supplemental schedule, including its form and content, is presented in compliance with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, such schedule is fairly stated, in all material respects, in relation to the financial statements as a whole.





/s/ DELOITTE & TOUCHE LLP

Birmingham, Alabama

June 21, 2022



We have served as the auditor of the Plan since 2007.



 

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VULCAN 401(k) PLAN













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VULCAN 401(k) PLAN



















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VULCAN 401(k) PLAN





NOTES TO FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2021 AND 2020, AND FOR THE YEAR ENDED DECEMBER 31, 2021



NOTE 1: DESCRIPTION OF THE PLAN

GENERAL

The Vulcan 401(k) Plan (Plan), a defined contribution employee benefit plan established effective July 15, 2007, and most recently restated effective January 1, 2020, provides for accumulation of savings, including the option to participate in the Vulcan Materials Company (Company) stock fund for:

The Company has designated a portion of the Plan consisting of the Company’s stock fund as an Employee Stock Ownership Plan (ESOP). The ESOP fund allows a participant to elect to have the dividends on the Company’s stock fund reinvested in the Company’s stock fund or paid to the participant in cash.

A participant may transfer between the Company’s two defined contribution employee benefit plans (as defined in the Plan).  When a participant transfers between plans,  the net assets of the participant’s account will be transferred to the other plan. For the year ended December 31, 2021,  $1,033,467 was transferred to the Plan from the CMG Hourly 401(k) Plan. 

Investment assets of the Plan are held by Great-West Trust Company, LLC (Trustee). Empower Retirement (Recordkeeper), a subsidiary of Great-West Trust Company, LLC, is the recordkeeper for the Plan.

As of July 1, 2021, the Plan adopted a provision from the Setting Every Community Up for Retirement Enhancement Act, which was enacted on January 1, 2020 in order to make retirement savings more accessible to workers. This provision allows participants to make penalty-free withdrawals from the Plan, not to exceed $5,000, for the birth or adoption of a child.

Participation and Vesting

Generally, all qualified employees participate on the first day of employment. Participants are fully vested in all contributions at all times. As such, the Plan does not provide for forfeitures.

Contributions

The Plan is funded through contributions by participants and the Company. The Plan provides for three types of employee contributions to the Plan: pay conversion contributions (pretax contributions),  after-tax contributions and Roth contributions. An employee may designate multiples of 1%  (ranging from 1% to 80%) of earnings as pretax contributions, after-tax contributions, Roth contributions or any combination of the three.  Contributions are subject to certain Internal Revenue Code (IRC) limitations. Participants may also contribute amounts representing distributions from other qualified plans (rollovers).

The Company expects to make matching contributions to match a portion of an employee’s contribution equal to 100% of that contribution, not to exceed 6% of the employee’s earnings. In addition, the Company will make an annual employer contribution of at least 3% of the earnings of each participant. The annual employer contribution was 3% of each participant’s earnings, or $17,223,418, for the year ended December 31, 2021. 









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INVESTMENT OPTIONS

Participants may invest in 25 separate investment funds of the Plan, a stable value fund or in a self-directed brokerage account in proportions elected by the participant. Contributions, allocations and transfers to the Patriot Transportation Holding, Inc. common stock fund are no longer an option. The Company’s matching contributions and annual employer contributions are invested as selected by the participant. In the event that no contribution investment election is made by the participant, the Company’s matching contributions and the annual employer contribution are invested in the State Street Target Retirement 2030 fund and are available for immediate reallocation by the participant.  

Participant Accounts

Separate accounts are maintained for each investment option: pretax contributions, after-tax contributions, Roth contributions, rollovers and transfers, and Company contributions and accumulated earnings thereon. Earnings (losses) are allocated daily to each participant’s account in the ratio of the participant’s account balance to total participants’ account balances. Distributions and withdrawals are charged to participant accounts.

Benefits paid to participants

A participant’s total account is distributed upon retirement, disability, death, or termination of employment, unless the account value is greater than $1,000, in which case the participant may defer distribution until age 72. Distributions are made in cash, except that the portion invested in the Company stock fund may be distributed in whole shares of such stock, if requested by the participant or beneficiary. Participants eligible to receive a distribution from the Plan may elect either a lump-sum payment or various installment options offered by the Plan (subject to the IRC’s required minimum distribution rules).

Prior to a termination of employment, a participant may withdraw any amount up to the value of his or her entire account subject to certain restrictions (as defined in the Plan). However, no portion of an actively employed participant’s pretax contribution account may be distributed to him or her before age 59-1/2, unless the participant is approved for a  “hardship” withdrawal as defined in the Plan and consistent with IRC guidelines. 

Notes Receivable from participants

A participant may apply for a loan at any time provided that the participant is receiving compensation from which payroll deductions can be made. The amount of the loan cannot exceed the lesser of 50% of the participant’s total account, less the outstanding balance of all existing loans, or $50,000, reduced by the highest outstanding balance of existing loans during the 12 months preceding the effective date of such loan. Additionally, in no event will a participant be permitted to have more than two loans outstanding at any one time, with the exception of those participants with three loans prior to the trustee change in 2018.

A loan is considered a note receivable of the Plan. The participant’s account will be reduced by the amount of the loan. Any repayment made will be allocated to the participant’s account in accordance with his or her current investment direction. Loans must be repaid in monthly installments through payroll deductions within 60 months. The annual interest rate for a loan is determined by adding 1% to The Wall Street Journal Prime Rate or as otherwise determined by the Administrative Committee at the time the application for the loan is made. The rate may not exceed the maximum rate for such loans permitted by law. The average rate of interest on loans approximated 5.0% and 5.5% as of December 31, 2021 and 2020, respectively.  





















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NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The accompanying financial statements of the Plan have been prepared in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles or GAAP).

Valuation of Investments and Income Recognition

The Plan’s investments are reported based on the fair values, net asset values or contract values of the underlying investments. Fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Investments in securities traded on national and over-the-counter exchanges are valued at the closing bid price of the security as of the last trading day of the year.

Investments in common/collective trust funds are stated at net asset value as determined by the issuer of the funds based on the underlying investments. The stable value fund is stated at contract value which is principal plus accrued interest, the value at which participants ordinarily transact (see Note 3).

Security transactions are recorded on the trade date. Distributions of stock, if any, to participants are recorded at the market value of such stock at the time of distribution. Interest income is recorded on the accrual basis. Net appreciation or depreciation includes the Plan’s gains and losses on investments bought and sold as well as held during the year. Dividends are recorded on the ex-dividend date. Investment manager fees are netted against Plan investment income and are not separately reflected. Consequently, management fees and operating expenses are reflected as a reduction of investment return for such investments. Expenses incurred in connection with the transfer of securities, such as brokerage commissions and transfer taxes, are added to the cost of such securities or deducted from the proceeds thereof.

Use of Estimates and Risks and Uncertainties

The preparation of financial statements in conformity with GAAP requires Plan management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. The Plan invests in various securities including a  corporate stock fund,  mutual funds, a stable value fund, other domestic equities, and interests in common/collective  trusts. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that the values of investment securities, including the value of the Company’s common stock, could decline in the near term and that such declines could materially affect the amounts reported in the Plan’s financial statements. Given recent volatility in the financial markets, it is reasonably possible that investment values could decline in subsequent periods. 

Notes Receivable from Participants

Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent participant loans are recorded as distributions based upon the terms of the Plan.

Excess Contributions Payable

The Plan is required to return contributions received during the Plan year in excess of the IRC limits. There were no excess contributions payable at December 31, 2021 or 2020.

Payment of Benefits

Benefits are recorded when paid. There were no participants who elected to withdraw from the Plan that had not been paid at December 31, 2021 or 2020.

Administrative Expenses

All reasonable expenses for administration of the Plan may be paid out of the Plan’s trust unless paid by the Company.  Participants are assessed a flat fee of $7.50 per quarter to cover administrative expenses. Certain additional expenses relating to specific participant transactions (such as loan fees or distribution processing fees) or professional investment management services, are charged directly to the participant’s account.







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NOTE 3: STABLE VALUE FUND — GUARANTEED INVESTMENT CONTRACT (GIC)

The Plan contains a stable value investment option (Fund or GIC) that meets the criteria of a fully benefit-responsive investment contract and is therefore reported at contract value. Contract value represents contributions made to the Fund, plus earnings, less participant withdrawals. The Fund is comprised of a portfolio of bonds and other fixed income securities and an investment contract issued by an insurance company or other financial institution, designed to provide a contract value “wrapper” around the fixed income portfolio to guarantee a specific interest rate which is reset quarterly and that cannot be less than zero. The wrapper contract provides that realized and unrealized gains and losses on the underlying fixed income portfolio are not reflected immediately in the net assets of the Fund, but rather are amortized over the duration of the underlying assets through adjustments to the future interest crediting rate. Primary variables impacting future crediting rates of the Fund include the current yield, duration, and existing difference between market and contract value of the underlying assets within the wrapper contract.

Limitations on the Ability of the Guaranteed Investment Contract to Transact at

Contract Value

Certain events may limit the ability of the Fund to transact at contract value or may allow for the termination of the wrapper contract at less than contract value. The following employer-initiated events may limit the ability of the Fund to transact at contract value:

The wrapper contract contains provisions that limit the ability of the Fund to transact at contract value upon the occurrence of certain events. These events include: any substantive modification of the Fund or the administration of the Fund that is not consented to by the wrapper issuer; any change in law, regulation, or administrative ruling applicable to a plan that could have a material adverse effect on the Fund’s cash flow; and employer-initiated transactions as described above.

In the event that the wrapper contract fails to perform as intended, the Fund’s net asset value may decline if the market value of its assets declines. The Fund’s ability to receive amounts due pursuant to the wrapper contract is dependent on the third-party issuer’s ability to meet its financial obligations. The wrapper issuer’s ability to meet its contractual obligations under the wrapper contract may be affected by future economic and regulatory developments.

The Fund is unlikely to maintain a stable net asset value if, for any reason, it cannot obtain or maintain wrapper contracts covering all of its underlying assets. This could result from the Fund’s inability to promptly find a replacement wrapper contract following termination of a wrapper contract. Wrapper contracts are not transferable and have no trading market. There are a limited number of wrapper issuers. The Fund may lose the benefit of wrapper contracts on any portion of its assets in default in excess of a certain percentage of portfolio assets.

Company management believes that the occurrence of events that may limit the ability of the Fund to transact at contract value is not probable.

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NOTE 4:  FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Plan classifies its investments into a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of these three levels:

Level 1 — Quoted prices in active markets for identical assets or liabilities

Level 2 — Inputs that are derived principally from or corroborated by observable market data

Level 3 — Inputs that are unobservable and significant to the overall fair value measurement

Investment assets measured using either the net asset value (NAV) per share practical expedient or contract value are not categorized in the fair value hierarchy.

The following tables set forth, by Level within the fair value hierarchy, the Plan’s investment assets at fair value for the years ended December 31, 2021 and 2020, respectively:  



























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Asset Valuation Techniques

The following methods and assumptions were used to estimate the values of the Plan’s investments.  There have been no changes in the methodologies used at December 31, 2021 and 2020, respectively.

Vulcan Materials Company Stock Fund — The fair value of the Company’s stock fund is based on the quoted market price.

Mutual Funds — These investments are valued daily at the closing price as reported on the active market in which the securities are traded.

Other Domestic Equities — These investments include common stock, preferred stock and other equity investments. Fair value is based on quoted market prices.

Common/Collective Trust Funds —  These investments include various index funds for domestic equities and fixed income securities, as well as international equities. Investments are valued at the net asset value of units of a bank collective trust. The net asset value, as provided in each fund’s audited financial statements, is used as a practical expedient to estimate fair value. The net asset value is based on the fair value of the underlying investments held by the fund less its liabilities. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported net asset value. Were the Plan to initiate a full redemption of the collective trust, the investment advisor reserves the right to temporarily delay withdrawal from the collective trust in order to ensure that securities liquidations will be carried out in an orderly business manner.

Empower Self-Directed Brokerage Account — The investments in this account include various mutual funds, money market funds, and corporate stocks. Fair value is based on quoted market prices.

Stable Value Fund — The stable value fund is measured at contract value as described in Note 3. Contract value represents contributions made to the fund, plus earnings, less participant withdrawals.

The methods described above may produce a fair value calculation that may not be indicative of net asset value or reflective of future fair value. Furthermore, while the Plan’s valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in different estimates of fair value at the reporting date.

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Net Asset Value Per Share

The following tables set forth information related to investment assets held by the Plan for which fair value is measured using net asset value per share as a practical expedient for the years ended December 31, 2021 and 2020, respectively:

















The Plan’s investment assets include interests in various common/collective trust funds. The underlying funds may invest in a wide variety of asset classes, including equity and fixed-income securities. The investment objective of each common/collective trust fund is to approximate as closely as practicable, before expenses, the performance of a benchmark index over the long-term, while providing participants the ability to purchase and redeem units on a daily basis with no notice periods and limited restrictions.

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NOTE 5:  PLAN TERMINATION

Although it has not expressed any intention to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions set forth under ERISA. In the event of termination, the net assets of the Plan will be distributed in accordance with ERISA.



NOTE 6:  FEDERAL INCOME TAX STATUS

The Internal Revenue Service has determined and informed the Company (most recently by letter dated August 7, 2020) that the Plan and related trust were designed in accordance with the applicable regulations of the IRC. The Company and Plan administrator believe that the Plan is currently designed and operated in compliance with the applicable requirements of the IRC and that the Plan and the related trust continue to be tax-exempt. Therefore, no provision for income taxes has been included in the Plan’s financial statements. GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain tax position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The Plan is subject to routine audits by the Internal Revenue Service; however, there are currently no audits for any tax periods in progress. The Plan’s management believes it is no longer subject to income tax examinations for years prior to 2018.





NOTE 7:  EXEMPT PARTY-IN-INTEREST TRANSACTIONS

Plan investments include shares of a self-directed brokerage account sponsored by Empower Retirement, which also serves as Recordkeeper for the Plan. These transactions, along with trustee and recordkeeping fees paid to Great-West Trust Company, LLC (Trustee) and Empower Retirement (Recordkeeper), qualify as exempt party-in-interest transactions.

At December 31, 2021 and 2020, the Plan’s trust held 544,262 and 636,360 shares of common stock of the Company with a cost basis of $87,899,483 and $80,142,531, respectively. The Plan recorded dividend income of $863,532 attributable to its investment in the Company’s stock fund for the year ended December 31, 2021. A significant decline in the market value of the Company’s common stock would significantly affect the net assets available for benefits. 

See Note 2 under the caption Use of Estimates and Risks and Uncertainties for information related to risks, including recent volatility in the financial markets, to the Plan’s investment in the Company’s stock fund.



NOTE 8: NEW ACCOUNTING STANDARDS

ACCOUNTING STANDARDS RECENTLY ADOPTED

None.

ACCOUNTING STANDARDS PENDING ADOPTION

None.



NOTE 9: SUBSEQUENT EVENTS

On March 1, 2022, assets totaling approximately $116,306,000 were transferred into the Vulcan 401(k) Plan from the former U.S. Concrete, Inc. 401(k) Savings Plan. The Company acquired U.S. Concrete, Inc. in August 2021.





 

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SUPPLEMENTAL SCHEDULE

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VULCAN 401(k) PLAN

Employer ID No: 20--8579133

Plan No: 041

















 

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SIGNATURES



The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.



VULCAN 401(k) PLAN





 /s/ Steven Smith             

     Steven Smith

     Vice President, Compensation and Employee Benefits



Date:  June 21, 2022

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Exhibit 23(a)



CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





We consent to the incorporation by reference in Registration Statements No. 333-147449 and 333-160302 on Form S-8 of our report dated June 21, 2022 relating to the financial statements of the Vulcan 401(k) Plan appearing in this Annual Report on Form 11-K for the year ended December 31, 2021. 



/s/ DELOITTE & TOUCHE LLP



Birmingham, Alabama

June 21, 2022







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