Eagle Materials : Fiscal Year 2023

2023 ANNUAL REPORT AND FORM 10-K

LETTER TO OUR SHAREHOLDERS

Eagle Materials chalked-up another banner year, again setting new performance records. We have grown our annual revenues to above the two billion dollar level and our year-over-year EPœ is up 36%. These results have been achieved in a year that prognosticators anticipated would be an especially challenging one for construction materials companies, especially due to sharply rising interest (mortgage) rates.

We are frequently asked about our secret to success. The short answer is that the "secret" is not just one thing but rather numerous things, each done better than we did them before, wherever and whenever possible. Let us share some of the specific differentiating factors that we feel are among the most important for us, and some of the ways that we think about things perhaps a bit differently than others. These differences are reflected in our operating model and, hence, in our track record of results.

Strength from the Core

We believe we operate in commodity industries. We are not ashamed of this fact. Construction materials like Portland cement and gypsum wallboard are necessities, not luxuries, and are essential to the growth and renewal of America, and especially to the paths that create a net zero carbon future for our country.

Our two core businesses are well-defined,well-established and well-positioned. These businesses have a lot in common. Each manufactures products with defined performance standards that must be faithfully met without fail, in commercial, residential and non-residential (infrastructure) construction applications. The lifeblood for both businesses is mined soft minerals, notably limestone and gypsum. Market selection is important for both because we sell low-value-to-weight products for which transportation distances can make or break the economics. Both businesses operate in consolidated Uœ industries with fragmented buyer- bases - and both are in cyclical sectors, so cycle management skills are important -- and this is an area in which we excel.

There is one more notable way in which these two core businesses are becoming even more alike. For some time Uœ manufacturing response to higher demand in cement has been constrained due to stringent regulation and high capital barriers to entry or expansion. In more recent years the gypsum wallboard industry has faced new constraints to capacity addition or to full capacity utilization, notably due to the declining availability of synthetic gypsum, which is generated through the environmental scrubbing processes at coal-fired power plants. The competitive dynamics of "scarcity" can be powerful, and some version of these dynamics is arguably developing not only in the Uœ cement industry, but also, albeit for different reasons, in the gypsum wallboard industry as well.

Over the past five years we have invested nearly $48‰ million to strengthen and improve these core businesses and to ensure their sustainability. These priority investments ensure we own many decades of quality raw materials that are highly proximate to our plants. We maintain our plants in "like new" condition and invest in technologies that will enable higher throughput, lower costs and in some cases, create opportunities for value-added products.

These core improvement investments are -- and will remain -- among our top capital allocation priorities. Growth is an important tandem priority. We have invested nearly $86‰ million in prudent acquisitions to grow our heavy-side business system over these same five years. Our cash flows give us tremendous financial flexibility to capture opportunities that arise. We have invested over $ı.7 billion dollars in share repurchases over this same five-year interval, which is another way in which we are demonstrably investing in our "core".

These investments over the last five years (capital improvements, acquisitions, and the return of cash to shareholders) totaled over $3 billion. It is worth noting that we ended this fiscal year with a net leverage ratio of ı.4x, which is virtually the same as our leverage ratio five years ago. This is another vivid testament to the cash generation capability of our company.

Superior Execution

œince we are in commodity industries it follows that the way to outperform the competition through cycles is to be a low-cost producer and work to continually expand that low-cost advantage. Our EBITDA margins are industry leading. Analysis of ž5‰ building products industry players consistently puts us at or near the top of the group depending on the quarter. The reasons for this are partly culturally related. We are a "no-frills culture" and we are relentless about focusing on value-adding activities, which also means we are scrupulous about not indulging in activities and initiatives that are not value-adding. There is an intense intolerance for bureaucracy at Eagle. We also lean on process disciplines and reliable methods and expect team members to be good teachers and mentors about these process disciplines, most notably safety, environmental and operational disciplines.

Effective Engagement

We have a three-part saying at Eagle that embodies our success philosophy and it also reflects where we spend our time: "Choose the value to create" (wisely, strategically), "create the value" (superior execution) and "communicate the value". We believe that doing all three exceptionally well is essential to our success.

"Communicating the value" is important in a number of ways. It is essential to level-set the understanding of all team members that have a role in creating the value (which at Eagle means all team members, since if it is not a vital role it is not a position). It is essential to communicate our product and service value proposition to customers so they choose us as a supplier and reward us for the value created. It is essential to communicate with investors so they can evaluate our company's value proposition in light of their other investment options.

A great example of "communicating the value" this year has been our roll-out of Portland Limestone Cement and the work to provide the right information and perspectives about this product so that œtate Departments of Transportation can make prudent decisions about its adoption.

We set an internal goal of making a product mix shift to ı‰‰% Limestone Cement for all construction grades (which entails œtate DOT approvals) and we are well ahead of plan here. This is an important initiative for two reasons. First, it makes our finite clinker production go farther, in effect increasing our salable cement capacity, and second, in conjunction with related actions, implies a 2‰% reduction in CO2 per ton from our 2‰ıı baseline.

This fiscal year has been a stellar year of accomplishment in which our team takes great pride. And our track record gives us conviction in saying that the best is indeed yet to come.

Œeturn on Equity

Percentages, LTM Quarters Ending

4‰

EXP

35

3‰

25

2‰

ı5

	Key
ı‰	Peers
5
‰
MAŒ '2ı JUN '2ı	œEP '2ı DEC '2ı MAŒ '22 JUN '22 œEP '22 DEC '22 MAŒ '23

Pre-Tax Margins

Percentages, LTM Quarters Ending

3‰

EXP

25
2‰
ı5	Key
Peers
ı‰
5
‰	MAŒ '2ı JUN '2ı œEP '2ı DEC '2ı MAŒ '22 JUN '22 œEP '22 DEC '22 MAŒ '23

Key Peers included on these graphs are Martin Marietta Materials, Vulcan Materials, œummit Materials and Arcosa œource: Factœet

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year Ended

March 31, 2023

Commission File No. 1-12984

EAGLE MATERIALS INC.

(Exact name of registrant as specified in its charter)

Delaware (State of Incorporation)

75-2520779 (I.R.S. Employer Identification No.)

5960 Berkshire Lane, Suite 900, Dallas, Texas 75225 (Address of principal executive offices)

1. 432-2000 (Registrant's telephone number)

Securities registered pursuant to Section 12(b) of the Act:

			Trading
Title of each class		Symbol(s)			Name of each exchange on which registered
Common Stock (par value $.01 per share)		EXP			New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
			YES "	NO !
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.	YES !	NO "

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES " NO !

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES " NO !

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See definition of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	"	Accelerated filer !
Non-accelerated filer	!	Smaller reporting company !
Emerging growth company !

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. !

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. "

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. !

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). !

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ! NO "

The aggregate market value of the voting stock held by nonaffiliates of the Company at September 30, 2022 (the last business day of the registrant's most recently completed second fiscal quarter) was approximately $3.9 billion.

As of May 17, 2023, the number of outstanding shares of common stock was:

Class		Outstanding Shares
Common Stock, $.01 Par Value		35,385,442

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the Annual Meeting of Stockholders of Eagle Materials Inc. to be held on August 3, 2023 are incorporated by reference in Part III of this Report.