Vulcan Materials COVMC
Vulcan Materials CO Income Taxes Disclosure
INCOME TAXES
The components of earnings from continuing operations before income taxes are as follows:
| in millions | 2025 | 2024 | 2023 | ||||||||||||||||||||
| Earnings from Continuing Operations before Income Taxes | |||||||||||||||||||||||
| Domestic | $ | 1,409.0 | $ | 1,196.1 | $ | 1,251.0 | |||||||||||||||||
| Foreign | (18.9) | (24.0) | (5.9) | ||||||||||||||||||||
| Total | $ | 1,390.1 | $ | 1,172.1 | $ | 1,245.1 | |||||||||||||||||
Income tax expense (benefit) from continuing operations consists of the following:
| in millions | 2025 | 2024 | 2023 | ||||||||||||||||||||
| Income Tax Expense (Benefit) from Continuing Operations | |||||||||||||||||||||||
| Current | |||||||||||||||||||||||
| Federal | $ | 209.8 | $ | 204.7 | $ | 274.8 | |||||||||||||||||
| State and local | 66.7 | 51.8 | 64.0 | ||||||||||||||||||||
| Foreign | 5.1 | 4.8 | 4.8 | ||||||||||||||||||||
| Total | $ | 281.6 | $ | 261.3 | $ | 343.6 | |||||||||||||||||
| Deferred | |||||||||||||||||||||||
| Federal | $ | 32.6 | $ | 13.6 | $ | (44.1) | |||||||||||||||||
| State and local | 0.7 | (20.5) | (4.2) | ||||||||||||||||||||
| Foreign | (7.4) | (3.0) | 4.1 | ||||||||||||||||||||
| Total | $ | 25.9 | $ | (9.9) | $ | (44.2) | |||||||||||||||||
| Total expense | $ | 307.5 | $ | 251.4 | $ | 299.4 | |||||||||||||||||
Income tax expense (benefit) differs from the amount computed by applying the federal statutory income tax rate to earnings from continuing operations before income taxes. The sources and tax effects of the differences are as follows:
| dollars in millions | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||
| Income tax expense / Federal statutory tax rate | $ | 291.9 | 21.0 | % | $ | 246.1 | 21.0 | % | $ | 261.5 | 21.0 | % | ||||||||||||||||||||
Expense (Benefit) from Income Tax Differences | ||||||||||||||||||||||||||||||||
State & local income taxes, net of federal Income tax effect 1 | $ | 54.4 | 3.9 | % | 24.7 | 2.1 | % | 49.0 | 3.9 | % | ||||||||||||||||||||||
Foreign tax effects | (1.1) | (0.1 | %) | 6.3 | 0.5 | % | 9.2 | 0.7 | % | |||||||||||||||||||||||
| Effect of cross-border tax laws | 0.3 | 0.0 | % | 1.0 | 0.1 | % | 1.2 | 0.1 | % | |||||||||||||||||||||||
| Tax credits | (3.6) | (0.3 | %) | (4.2) | (0.4 | %) | (1.9) | (0.2 | %) | |||||||||||||||||||||||
| Nontaxable or nondeductible items | ||||||||||||||||||||||||||||||||
| Tax benefit of depletion | (43.1) | (3.1 | %) | (39.9) | (3.4 | %) | (38.9) | (3.1 | %) | |||||||||||||||||||||||
| Impairment | 0.1 | 0.0 | % | 16.2 | 1.4 | % | 16.2 | 1.3 | % | |||||||||||||||||||||||
| Other | 10.9 | 0.8 | % | 3.8 | 0.3 | % | 5.5 | 0.5 | % | |||||||||||||||||||||||
| Changes in unrecognized tax benefits | (2.3) | (0.1 | %) | (2.5) | (0.2 | %) | (2.7) | (0.2 | %) | |||||||||||||||||||||||
| Other adjustments | 0.0 | 0.0 | % | (0.1) | 0.0 | % | 0.3 | 0.0 | % | |||||||||||||||||||||||
| Total income tax expense / Effective tax rate | $ | 307.5 | 22.1 | % | $ | 251.4 | 21.4 | % | $ | 299.4 | 24.0 | % | ||||||||||||||||||||
1.The following states comprised the majority (greater than 50%) of the tax effect in this category for the years ending December 31:
•2025: California, Georgia and Virginia
•2024: California, Georgia and Virginia
•2023: California and Georgia
Income taxes paid (net of refunds received) consists of the following:
| in millions | 2025 | 2024 | 2023 | ||||||||||||||||||||
Income taxes paid (net of refunds received) | |||||||||||||||||||||||
| Federal taxes paid | $ | 226.7 | $ | 208.3 | $ | 235.8 | |||||||||||||||||
| State taxes paid | |||||||||||||||||||||||
| California | 22.2 | 17.8 | 15.9 | ||||||||||||||||||||
| All other states | 40.2 | 46.7 | 38.9 | ||||||||||||||||||||
| Foreign taxes paid | 1.6 | 7.0 | 1.1 | ||||||||||||||||||||
| Total | $ | 290.7 | $ | 279.8 | $ | 291.7 | |||||||||||||||||
Deferred taxes on the balance sheet result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax liability at December 31 are as follows:
| in millions | 2025 | 2024 | |||||||||||||||
| Deferred Tax Assets | |||||||||||||||||
| Operating lease liabilities | $ | 145.9 | $ | 140.8 | |||||||||||||
| Asset retirement obligations & other reserves | 96.7 | 86.6 | |||||||||||||||
| State net operating losses | 62.8 | 74.7 | |||||||||||||||
| Incentive compensation | 55.3 | 52.4 | |||||||||||||||
Capitalized research expenditures | 0.0 | 39.7 | |||||||||||||||
Foreign net operating losses | 35.1 | 28.9 | |||||||||||||||
| Employee benefits | 23.8 | 22.2 | |||||||||||||||
| Other | 40.6 | 52.9 | |||||||||||||||
| Total gross deferred tax assets | $ | 460.2 | $ | 498.2 | |||||||||||||
| Valuation allowance | (86.3) | (87.7) | |||||||||||||||
| Total net deferred tax asset | $ | 373.9 | $ | 410.5 | |||||||||||||
Deferred Tax Liabilities | |||||||||||||||||
| Property, plant & equipment | $ | 1,177.3 | $ | 1,189.1 | |||||||||||||
| Goodwill/other intangible assets | 315.6 | 323.2 | |||||||||||||||
| Operating lease right-of-use assets | 134.6 | 129.8 | |||||||||||||||
| Other | 104.7 | 104.9 | |||||||||||||||
| Total deferred tax liabilities | $ | 1,732.2 | $ | 1,747.0 | |||||||||||||
| Deferred income tax liability, net | $ | 1,358.3 | $ | 1,336.5 | |||||||||||||
At December 31, 2025, we have Alabama state NOL carryforward deferred tax assets of $57.6 million, against which we have a valuation allowance of $42.7 million. We expect $8.2 million of the Alabama NOL carryforward to expire in 2025, resulting in additional tax expense of $0.2 million over the previous amount of valuation allowance recorded. Almost all of the remaining Alabama NOL carryforward would expire between 2025 and 2029 if not utilized.
As discussed in Note 12, in May 2022, Mexican government officials unexpectedly and arbitrarily shut down our Calica operations in Mexico. In 2025, Calica had deferred tax assets (including NOLs) of $37.3 million. As a result of the continued shutdown, we recorded a charge of $9.8 million in 2025 to increase the valuation allowance to $37.3 million. $3.9 million of this charge was recorded as currency translation due to the increase in our deferred tax assets from appreciation of the Mexican peso during the year. The Calica NOL deferred tax asset carryforward of $30.4 million would expire between 2032 and 2035 if not utilized. Should the Mexican government lift the shutdown and/or if we are successful in our NAFTA claim, we will reevaluate the need for a valuation allowance against the deferred tax assets.
In August 2022, the Inflation Reduction Act ("IRA") was signed into law, effective for tax years beginning on or after January 1, 2023. The IRA introduced a corporate alternative minimum tax ("CAMT") of 15% applicable to corporations with adjusted financial statement income in excess of $1 billion, as well as certain climate-related tax provisions. We were not subject to CAMT in 2023, 2024 or 2025.
In July 2025, President Trump signed into law H.R.1 - One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing and an increased business interest expense limitation, as well as certain modifications to the international tax framework. Changes in tax rates and laws on deferred tax balances are recognized in the period in which the legislation is enacted. Consequently, we have evaluated our deferred tax balances and incorporated all applicable changes required into our financial statements as a result of the OBBBA for the year ended December 31, 2025. The results include an increase to our deferred tax liability and a reduction to income taxes payable related to the provisions for 100% bonus depreciation and full expensing of domestic research expenditures. No material changes to our effective tax rate resulted from the OBBBA.
We consider the undistributed earnings, if any, related to the investment in our Canadian and Honduran subsidiaries and Canadian investment in its U.S. subsidiary to be indefinitely reinvested. Accordingly, no foreign withholding or other income taxes have been provided thereon. Due to complexities in the tax laws, it is not practicable to estimate the amount of deferred income taxes not recorded that are associated with these earnings. We have not, nor do we currently anticipate in the foreseeable future, the need to repatriate funds (other than for the repayment of intercompany loan obligations) to satisfy domestic liquidity needs arising in the ordinary course of business.
Changes in our liability for unrecognized tax benefits for the years ended December 31 are as follows:
| in millions | 2025 | 2024 | 2023 | ||||||||||||||||||||
| Unrecognized Tax Benefits | |||||||||||||||||||||||
| Balance as of January 1 | $ | 24.9 | $ | 21.0 | $ | 18.7 | |||||||||||||||||
| Increases for tax positions related to | |||||||||||||||||||||||
| Prior years | 0.9 | 0.8 | 0.3 | ||||||||||||||||||||
| Current year | 4.3 | 6.7 | 4.8 | ||||||||||||||||||||
| Decreases for tax positions related to | |||||||||||||||||||||||
| Prior years | (0.4) | 0.0 | (0.3) | ||||||||||||||||||||
Settlements | 0.0 | (0.3) | (0.2) | ||||||||||||||||||||
| Expiration of applicable statute of limitations | (3.8) | (3.3) | (2.3) | ||||||||||||||||||||
| Balance as of December 31 | $ | 25.9 | $ | 24.9 | $ | 21.0 | |||||||||||||||||
We classify interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. Interest and penalties recognized as income tax expense were $2.5 million, $1.5 million and $1.5 million in 2025, 2024 and 2023, respectively. The balance of accrued interest and penalties included in our liability for unrecognized tax benefits as of December 31 was $7.3 million, $4.8 million and $3.3 million in 2025, 2024 and 2023, respectively. Our liability for unrecognized tax benefits at December 31 in the table above includes $24.8 million, $23.7 million and $19.8 million in 2025, 2024 and 2023, respectively, that would affect the effective tax rate if recognized.
We file income tax returns in U.S. federal, various state and foreign jurisdictions and are routinely examined by various taxing authorities. In the first quarter of 2024, we were notified that our Mexican subsidiary, Calica, is under examination by the Mexican Servicio de Adminstración (“SAT”) for tax year 2018, and in the first quarter of 2025, SAT expanded the examination to tax year 2019. In the fourth quarter of 2025, SAT issued Calica an audit findings letter for 2018. Among other claims, SAT asserts that Calica had no right to mine and has denied its cost of goods sold deduction. Calica filed its request and received acceptance for a conclusive agreement (mediation) to address the audit findings. The deadline to settle any audit findings through mediation is December 2026. We have recognized the full tax benefit associated with Calica’s cost of goods sold deduction in Mexico, as we believe it is more likely than not that the position will be sustained based upon the technical merits of the position. Aside from Mexico and a few other exceptions, we are no longer subject to U.S. federal, state or foreign exams by tax authorities for years prior to 2022.
As of December 31, 2025, income tax receivables of $2.7 million and $0.5 million are included in other accounts and notes receivable and other current assets, respectively, in the accompanying Consolidated Balance Sheet. There were similar receivables of $4.7 million and $0.1 million recorded in other accounts and notes receivable and other current assets, respectively, as of December 31, 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 25, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.