Vulcan Materials CO

NOTE 17: ASSET RETIREMENT OBLIGATIONS

Asset retirement obligations (AROs) are legal obligations associated with the retirement of long-lived assets resulting from the acquisition, construction, development and/or normal use of the underlying assets, including legal obligations for land reclamation. Recognition of a liability for an ARO is required in the period in which it is incurred at its estimated fair value. The associated asset retirement costs are capitalized as part of the carrying amount of the underlying asset and depreciated over the estimated useful life of the asset. The ARO liability is accreted through charges to operating expenses. If the ARO liability is settled for a value other than the carrying amount of the liability, we recognize a gain or loss on settlement.

ARO operating costs related to accretion of the liabilities and depreciation of the assets for the years ended December 31 are as follows:

ARO operating costs are reported in cost of revenues. ARO liabilities are reported within Other noncurrent liabilities in our accompanying Consolidated Balance Sheets.

Reconciliations of the carrying amounts of our ARO liabilities for the years ended December 31 are as follows:

1. Includes $1.0 million of noncash settlements related to business dispositions in 2025.

ARO liabilities incurred during 2024 and 2025 relate to those assumed in 2024 acquisitions (see Note 19). ARO revisions during 2024 primarily related to cost adjustments for a number of aggregates properties in California that are being reclaimed for alternative uses post mining.