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Vulcan Materials
2020 Annual Report

Vulcan Announces Fourth Quarter Results

02/08/10

BIRMINGHAM, Ala., Feb 08, 2010 /PRNewswire via COMTEX/ -- Vulcan Materials Company (NYSE: VMC), the nation's largest producer of construction aggregates, announced results today for the fourth quarter and full year ended December 31, 2009.

Fourth Quarter Summary and Comparisons with the Prior Year

  • Net earnings from continuing operations were a loss of $13 million, or $0.10 per diluted share.
  • Cash earnings from continuing operations were $67 million.
  • Aggregates shipments declined 23 percent, reducing earnings $0.57 per diluted share.
  • Aggregates pricing increased 5 percent.
  • Aggregates cash fixed costs decreased 8 percent.
  • Selling, administrative and general expenses decreased 7 percent.
  • Total contract awards for highways increased 13 percent in Vulcan-served states.

Commenting for the Company, Don James, Vulcan's Chairman and Chief Executive Officer, stated, "Our employees continue to run the business in a cost-efficient manner, maximizing our cash generation during the economic downturn. Their efforts in the fourth quarter contributed to further reductions in cash fixed costs in our operations as well as reductions in overhead expenses. Continued weakness in private construction activity, uncertainty surrounding the timing and amount of either a formal extension or reauthorization of the multi-year federal highway program, and extremely wet weather suppressed momentum gained from stimulus-related construction. Nonetheless, we finished the year with strong cash generation. For the full year 2009, free cash flow was $343 million, an increase of $261 million from the prior year, and cash earnings per ton of aggregates remained in-line with the prior year.

"We continue to believe that 2010 will be the biggest year for stimulus-related highway construction. Economic stimulus funds of $27.5 billion designated for highway projects under the American Recovery and Reinvestment Act of 2009 buoyed contract awards for highways in the second half of 2009. Despite the failure of Congress to pass a fully-funded extension of SAFETEA-LU, the previous highway authorization that expired on September 30, 2009, contract awards for highways in the fourth quarter increased 9 percent from the prior year. Vulcan-served states, which were apportioned 55 percent more funds than other states, generally have lagged the rest of the country in awarding contracts and starting stimulus-related construction. In the fourth quarter, however, contract awards for highway projects in our states increased 13 percent from the prior year versus a 2 percent increase in other states. We are encouraged by the increased award activity and are optimistic that stimulus-related highway projects in Vulcan-served states, after a slow start, are now moving forward and will benefit demand for our products in 2010."

Fourth Quarter Operating Results Commentary

Fourth quarter earnings for aggregates were lower versus the prior year as the impact of reduced shipments more than offset the earnings benefit from improved prices and cost control measures. Aggregates shipments declined 23 percent from the prior year due to weak demand and extremely wet weather in most key markets. Lower aggregates volumes reduced fourth quarter EBITDA by approximately $69 million versus the prior year. Most markets realized price improvement from the prior year. The overall price increase benefited somewhat from a product mix shift to more aggregates for highway construction.

Key Vulcan-served markets in the Mid-Atlantic, Southeast, Midwest, and Southwest regions were hampered by an unusually large amount of rainfall throughout the quarter. Additionally, aggregates volumes were negatively affected by the varied timing of spending of stimulus-related funding, the uncertainty regarding timing and duration of an extension of the federal highway bill as well as the lack of visibility regarding timing for ultimate passage of a new multi-year highway bill. Construction activity on stimulus-related highway projects has varied widely in Vulcan-served states and in certain key states lagged the rest of the country. Florida, Virginia, California, and Georgia spent less than 10 percent of their highway-related stimulus funds by the end of 2009. Conversely, Illinois, Tennessee, and North Carolina spent 41, 36 and 23 percent, respectively, of stimulus funds by year end.

Segment earnings in asphalt and concrete were a slight loss due to the earnings effects of lower volumes and lower materials margins. Asphalt materials margins in the fourth quarter were lower than the prior year as lower selling prices for asphalt mix more than offset lower costs, including a 29 percent decline in the costs for liquid asphalt.

Selling, administrative and general (SAG) expenses in the fourth quarter declined $6 million from the prior year. This year-over-year decline in overhead costs is due mostly to reductions in employee-related expenses, which more than offset a year-over-year increase in project costs of $2.6 million related to the replacement of legacy IT systems. Additionally, the current year's fourth quarter included expenses of $8.5 million for the fair market value of donated real estate as compared to $5.1 million in the prior year. Excluding the effects of donated real estate from both years, SAG expenses declined 11 percent versus the prior year's fourth quarter.

Full Year Summary and Comparisons with the Prior Year

  • Net earnings were $30 million, including $19 million from continuing operations.
  • Cash earnings were $369 million from continuing operations and $12 million from discontinued operations.
  • Aggregates shipments declined 26 percent, reducing pretax earnings $334 million.
  • Aggregates pricing increased 3 percent.
  • Cash provided by operating activities was $453 million compared with $435 million in the prior year.
  • Full year capital spending was $110 million compared with $353 million in the prior year.
  • Free cash flow was $343 million compared with $82 million in the prior year.
  • Total debt was reduced by $810 million in 2009.

Commenting on the full year, Mr. James stated, "Throughout the period of protracted decline in demand for construction materials, Vulcan employees have managed costs aggressively. In 2009, their efforts further rationalized production and reduced operating hours, thereby offsetting some of the cost impact related to lower volumes. Their efforts also contributed to an increase in free cash flow, demonstrating the cash generation ability of our business even in the midst of an economic recession."

All results are unaudited.

Outlook Highlights and Commentary

Commenting on the Company's outlook, Mr. James stated, "Overall, the construction environment remains challenging, reflecting continued weak private nonresidential construction activity and uncertainty regarding the timing and amount of a new multi-year federal highway program.

"Since May of last year, highway construction awards have been buoyed by stimulus-related funding. Through December 2009, the Federal Highway Administration reported approximately $15 billion of stimulus-related highway projects under construction with $5.6 billion of these stimulus funds having been paid to contractors for work performed. During this same period, Vulcan-served states lagged the rest of the country in awarding and starting stimulus-related highway construction projects. These differences in awarding projects and spending patterns are due in part to the types of projects planned and to the proportion sub-allocated to Metropolitan Planning Organizations less accustomed to implementing a large number of projects. The above-average increase in our states in fourth quarter contract awards for highways provides some encouragement that construction activity in our states should improve in 2010.

"Overall, our outlook for aggregates demand in 2010 reflects an increase in highway and other infrastructure-related construction activity due primarily to stimulus-related funding. While we have assumed that regular federal funding for highways will remain at an annualized level consistent with fiscal year 2009 under SAFETEA-LU, Congress will need to act quickly to restore fiscal year 2010 funding levels and contract authority prior to the start of the construction season. Additionally, residential construction activity should increase year-over-year in 2010, albeit from low levels. Further weakness is expected in private nonresidential construction. As a result, aggregates volumes are expected to be flat to up 5 percent from 2009 levels. For the full year 2010, we expect aggregates pricing to improve 2 to 3 percent.

"In our asphalt business, we expect sales volumes to increase approximately 5 percent from 2009 levels. Pricing for asphalt mix is expected to increase from 2009 levels but not enough to offset projected higher prices for liquid asphalt and aggregates. As a result, we expect lower material margins in asphalt when compared with the prior year. In concrete, we expect sales volumes to remain flat with the prior year and pricing to decline modestly, reflecting continued weakness in private nonresidential construction.

"Debt reduction and achieving target debt ratios remain a priority use of cash flows. For the full year, we expect capital spending of approximately $125 million, up from $110 million spent in 2009 and down sharply from the $353 million spent in 2008.

"Our available production capacity and ongoing efforts to improve cash margins position Vulcan to participate efficiently and effectively in the $50 to $60 billion of stimulus-related construction, including significant remaining portions of the $27 billion for highways and bridges. We expect 2010 to be the largest year of stimulus-related highway demand for our products followed by another solid year in 2011. By that time, we expect demand from private construction activity to be improving, accelerating the earnings leverage from our improved cost structure and disciplined approach to pricing."

Conference Call

Vulcan will host a conference call at 10:00 a.m. CST on February 9, 2010. Investors and other interested parties in the U.S. may access the teleconference live by calling 888.713.4218 approximately 10 minutes before the scheduled start. International participants can dial 617.213.4870. The access code is 41673485. A live webcast will be available via the Internet through Vulcan's home page at www.vulcanmaterials.com. The conference call will be recorded and available for replay approximately two hours after the call through February 16, 2010.

Vulcan Materials Company, a member of the S&P 500 Index, is the nation's largest producer of construction aggregates, a major producer of asphalt mix and concrete and a leading producer of cement in Florida.

Certain matters discussed in this release, including expectations regarding future performance, contain forward-looking statements that are subject to assumptions, risks and uncertainties that could cause actual results to differ materially from those projected. These assumptions, risks and uncertainties include, but are not limited to, those associated with general economic and business conditions; changes in interest rates; the timing and amount of federal, state and local funding for infrastructure, including the federal stimulus funds; changes in the level of spending for residential and private nonresidential construction; the highly competitive nature of the construction materials industry; the impact of future regulatory or legislative actions; the outcome of pending legal proceedings; pricing; weather and other natural phenomena; energy costs; costs of hydrocarbon-based raw materials; healthcare costs; the amount of long-term debt and interest expense incurred by the Company; volatility in pension plan asset values which may require cash contributions to the pension plans; the timing and amount of any future payments to be received under the 5CP earn-out contained in the agreement for the divestiture of the Company's Chemicals business; the impact of environmental clean-up costs and other liabilities relating to previously divested businesses; the Company's ability to secure and permit aggregates reserves in strategically located areas; the Company's ability to manage and successfully integrate acquisitions; the impact of the global financial crisis on our business and financial condition and access to the capital markets; the potential impact of future legislation or regulations relating to climate change or greenhouse gas emissions; and other assumptions, risks and uncertainties detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year. Forward-looking statements speak only as of the date hereof, and Vulcan assumes no obligation to publicly update such statements.

 Table A Vulcan Materials Company and Subsidiary Companies (Amounts and shares in thousands, except per share data) Three Months Ended Twelve Months Ended Consolidated Statements December 31 December 31 of Earnings ------------------ ------------------- (Condensed and unaudited) 2009 2008 2009 2008 ------------------------------------------------------------------------ Net sales $555,767 $756,523 $2,543,707 $3,453,081 Delivery revenues 34,377 42,676 146,783 198,357 -------- -------- ---------- ---------- Total revenues 590,144 799,199 2,690,490 3,651,438 Cost of goods sold 487,726 607,333 2,097,745 2,703,369 Delivery costs 34,377 42,676 146,783 198,357 -------- -------- ---------- ---------- Cost of revenues 522,103 650,009 2,244,528 2,901,726 -------- -------- ---------- ---------- Gross profit 68,041 149,190 445,962 749,712 Selling, administrative and general expenses 82,979 88,863 321,608 342,584 Goodwill impairment - 252,664 - 252,664 Gain on sale of property, plant & equipment and businesses, net 16,451 7,537 27,104 94,227 Other operating income (expense), net (122) 371 (3,006) 411 ------ --------- ------- ------- Operating earnings (loss) 1,391 (184,429) 148,452 249,102 Other income (expense), net 730 (1,322) 5,307 (4,357) Interest income 367 502 2,282 3,126 Interest expense 43,318 46,583 175,262 172,813 -------- --------- -------- ------- Earnings (loss) from continuing operations before income taxes (40,830) (231,832) (19,221) 75,058 Provision (benefit) for income taxes (28,248) (19,673) (37,869) 71,691 -------- -------- -------- ------ Earnings (loss) from continuing operations (12,582) (212,159) 18,648 3,367 Earnings (loss) on discontinued operations, net of tax (767) (661) 11,666 (2,449) --------- ---------- ------- ------- Net earnings (loss) $(13,349) $(212,820) $30,314 $918 ======================================================================= Basic earnings (loss) per share: Continuing operations $(0.10) $(1.92) $0.16 $0.03 Discontinued operations (0.01) (0.01) 0.09 (0.02) ------- ------- ----- ------ Net earnings (loss) per share $(0.11) $(1.93) $0.25 $0.01 Diluted earnings (loss) per share: Continuing operations $(0.10) $(1.92) $0.16 $0.03 Discontinued operations (0.01) (0.01) 0.09 (0.02) ------- ------- ----- ------ Net earnings (loss) per share $(0.11) $(1.93) $0.25 $0.01 ======================================================================= Weighted-average common shares outstanding: Basic 125,889 110,394 118,891 109,774 Assuming dilution 125,889 110,394 119,430 110,954 Cash dividends declared per share of common stock $0.25 $0.49 $1.48 $1.96 Depreciation, depletion, accretion and amortization from continuing operations $96,454 $97,570 $394,612 $389,060 Effective tax rate from continuing operations 69.2% 8.5% 197.0% 95.5% ======================================================================= Table B Vulcan Materials Company and Subsidiary Companies (Amounts in thousands) Consolidated Balance Sheets December 31 December 31 (Condensed and unaudited) 2009 2008 -------------------------------------------------------------------- Assets ------ Cash and cash equivalents $22,265 $10,194 Medium-term investments 4,111 36,734 Accounts and notes receivable: Accounts and notes receivable, gross 276,746 365,688 Less: Allowance for doubtful accounts (8,722) (8,711) ------- ------- Accounts and notes receivable, net 268,024 356,977 Inventories: Finished products 261,752 295,525 Raw materials 21,807 28,568 Products in process 3,907 4,475 Operating supplies and other 37,567 35,743 ------- ------- Inventories 325,033 364,311 Deferred income taxes 57,967 71,205 Prepaid expenses 51,821 54,469 Assets held for sale 15,072 - ------- ------- Total current assets 744,293 893,890 Investments and long-term receivables 33,283 27,998 Property, plant & equipment: Property, plant & equipment, cost 6,653,261 6,635,873 Less: Reserve for depr., depl. & amort. (2,778,590) (2,480,061) ----------- ----------- Property, plant & equipment, net 3,874,671 4,155,812 Goodwill 3,093,979 3,085,468 Other intangible assets 682,643 673,792 Other assets 105,086 79,664 ---------- ---------- Total assets $8,533,955 $8,916,624 ========== ========== Liabilities and Shareholders' Equity ------------------------------------ Current maturities of long-term debt $385,381 $311,685 Short-term borrowings 236,512 1,082,500 Trade payables and accruals 121,324 147,104 Other current liabilities 113,109 121,777 Liabilities of assets held for sale 369 - ------- --------- Total current liabilities 856,695 1,663,066 Long-term debt 2,116,120 2,153,588 Deferred income taxes 888,272 920,475 Other noncurrent liabilities 620,846 625,743 --------- --------- Total liabilities 4,481,933 5,362,872 --------- --------- Shareholders' equity: Common stock, $1 par value 125,912 110,270 Capital in excess of par value 2,368,228 1,734,835 Retained earnings 1,752,240 1,893,929 Accumulated other comprehensive loss (194,358) (185,282) --------- --------- Shareholders' equity 4,052,022 3,553,752 --------- --------- Total liabilities and shareholders' equity $8,533,955 $8,916,624 ==================================================================== Table C Vulcan Materials Company and Subsidiary Companies (Amounts in thousands) Twelve Months Ended Consolidated Statements of Cash Flows December 31 ------------------- (Condensed and unaudited) 2009 2008 ------------------------------------------------------------------------ Operating Activities -------------------- Net earnings $30,314 $918 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation, depletion, accretion and amortization 394,612 389,060 Goodwill impairment - 252,664 Net gain on sale of property, plant & equipment and businesses (27,916) (94,227) Contributions to pension plans (27,616) (3,127) Share-based compensation 23,120 19,096 Excess tax benefits from share-based compensation (2,072) (11,209) Deferred tax provision (43,773) (19,756) Changes in assets and liabilities before initial effects of business acquisitions and dispositions 90,275 (85,171) Other, net 16,091 (13,063) ------- -------- Net cash provided by operating activities 453,035 435,185 ------- ------- Investing Activities -------------------- Purchases of property, plant & equipment (109,729) (353,196) Proceeds from sale of property, plant & equipment 17,750 25,542 Proceeds from sale of businesses 16,075 225,783 Payment for businesses acquired, net of acquired cash (36,980) (84,057) Reclassification from cash equivalents to medium-term investments - (36,734) Redemption of medium-term investments 33,282 - Proceeds from loan on life insurance policies - 28,646 Other, net (400) 4,976 -------- --------- Net cash used for investing activities (80,002) (189,040) -------- --------- Financing Activities -------------------- Net short-term payments (847,963) (1,009,000) Payment of current maturities of long-term debt (311,724) (48,794) Payment of long-term debt (50,000) - Proceeds from issuance of long- term debt, net of discounts 397,660 949,078 Debt issuance costs (3,033) (5,633) Settlements of forward starting swaps - (32,474) Proceeds from issuance of common stock 606,546 55,072 Dividends paid (171,468) (214,783) Proceeds from exercise of stock options 17,327 24,602 Excess tax benefits from share-based compensation 2,072 11,209 Other, net (379) (116) --------- --------- Net cash used for financing activities (360,962) (270,839) --------- --------- Net increase (decrease) in cash and cash equivalents 12,071 (24,694) Cash and cash equivalents at beginning of year 10,194 34,888 ------- ------- Cash and cash equivalents at end of year $22,265 $10,194 ======================================================================== Table D Segment Financial Data and Unit Shipments (Amounts in thousands, except per unit data) Three Months Ended Twelve Months Ended December 31 December 31 ----------- ----------- 2009 2008 2009 2008 ---- ---- ---- ---- Total Revenues Aggregates (a) Segment revenues $406,246 $529,531 $1,838,599 $2,406,800 Intersegment sales (37,162) (47,254) (165,210) (206,187) ------- ------- -------- -------- Net sales 369,084 482,277 1,673,389 2,200,613 ------- ------- --------- --------- Asphalt mix and Concrete (b) Segment revenues 178,416 268,511 833,129 1,201,191 Intersegment sales (6) (80) (123) (560) --- --- ---- ---- Net sales 178,410 268,431 833,006 1,200,631 ------- ------- ------- --------- Cement (c) Segment revenues 16,108 20,614 72,531 106,468 Intersegment sales (7,835) (14,799) (35,219) (54,631) ------ ------- ------- ------- Net sales 8,273 5,815 37,312 51,837 ----- ----- ------ ------ Total Net sales 555,767 756,523 2,543,707 3,453,081 Delivery revenues 34,377 42,676 146,783 198,357 ------ ------ ------- ------- Total revenues $590,144 $799,199 $2,690,490 $3,651,438 ======== ======== ========== ========== Gross Profit Aggregates $69,613 $127,619 $393,288 $657,566 Asphalt mix and Concrete (1,042) 18,425 54,516 74,463 Cement (530) 3,146 (1,842) 17,683 ---- ----- ------ ------ Total gross profit $68,041 $149,190 $445,962 $749,712 ======= ======== ======== ======== Unit Shipments Aggregates Customer tons 30,873 40,209 139,297 188,344 Internal tons (d) 2,671 3,302 11,566 15,908 ----- ----- ------ ------ Aggregates - tons 33,544 43,511 150,863 204,252 ====== ====== ======= ======= Asphalt mix - tons 1,779 2,026 7,415 9,538 Ready-mixed concrete - cubic yards 930 1,352 4,337 6,354 Cement Customer tons 58 117 262 595 Internal tons (d) 81 87 369 444 --- --- --- --- Cement - tons 139 204 631 1,039 === === === ===== Average Unit Sales Price (including internal sales) Aggregates (freight-adjusted) (e) $10.39 $9.91 $10.30 $9.98 Asphalt mix $49.93 $61.29 $52.66 $55.16 Ready-mixed concrete $93.34 $97.76 $96.53 $97.75 Cement $94.03 $95.11 $95.70 $96.75 (a) Includes crushed stone, sand and gravel, sand, other aggregates, as well as transportation and service revenues associated with the aggregates business. (b) Includes asphalt mix, ready-mixed concrete, concrete block, precast concrete, as well as building materials purchased for resale. (c) Includes cement and calcium products. (d) Represents tons shipped primarily to our downstream operations (e.g., asphalt mix and ready-mixed concrete). Sales from internal shipments are eliminated in net sales presented above and in the accompanying Condensed Consolidated Statements of Earnings. (e) Freight-adjusted sales price is calculated as total sales dollars (internal and external) less freight to remote distribution sites divided by total sales units (internal and external). Table E 1. Supplemental Cash Flow Information Supplemental information referable to the Condensed Consolidated Statements of Cash Flows for the twelve months ended December 31 is summarized below (amounts in thousands): 2009 2008 ------------------------------------------------------------------------ Supplemental Disclosure of Cash Flow Information ------------------------------------ Cash paid (refunded) during the period for: Interest $181,352 $179,880 Income taxes (25,097) 91,544 Supplemental Schedule of Noncash Investing and Financing Activities ------------------------------------- Liabilities assumed in business acquisitions - 2,024 Accrued liabilities for purchases of property & equipment 13,459 22,974 Note received from sale of businesses 1,450 - Carrying value of noncash assets and liabilities exchanged - 42,974 Debt issued for purchases of property, plant & equipment 1,987 389 Proceeds receivable from exercise of stock options - 325 Fair value of stock issued in business acquisitions - 25,023 2. Reconciliation of Non-GAAP Measures Free Cash Flow Reconciliations 2009 2008 ------------------------- Net cash provided by operating activities $453,035 $435,185 less: Purchases of property, plant and equipment (109,729) (353,196) -------- -------- Free Cash Flow $343,306 $81,989 ======== ======= Free Cash Flow deducts Purchases of Property, Plant and Equipment from Net Cash Provided by Operating activities. This financial metric is used by the investment community as an indicator of the company's ability to incur and service debt. It is not defined by Generally Accepted Accounting Principles (GAAP); thus, it should not be considered as an alternative to net cash provided by operating activities or any other liquidity measure defined by GAAP. This metric is presented for the convenience of investment professionals that use such metrics in their analysis and to provide the Company's shareholders an understanding of metrics management uses to assess performance and to monitor our cash and liquidity positions. Vulcan's management internally uses Free Cash Flow and other such measures to assess the operating performance of its' various business units and the consolidated company. Vulcan's management does not use this metric as a measure to allocate resources internally. Table F Reconciliation of Non-GAAP Measures EBITDA and Cash Earnings Reconciliations (Amounts in thousands) Three Months Ended Twelve Months Ended December 31 December 31 ----------- ----------- 2009 2008 2009 2008 ------------------------------------------- ------------------ Reconciliation of Net Cash Provided by Operating Activities to EBITDA and Cash Earnings Net cash provided by operating activities $98,214 $156,942 $453,035 $435,185 Changes in operating assets and liabilities before initial effects of business acquisitions and dispositions (38,429) (59,525) (90,275) 85,171 Goodwill Impairment - (252,664) - (252,664) Other net operating items (providing) using cash 23,320 39,997 62,166 122,286 (Earnings) loss on discontinued operations, net of tax 767 661 (11,666) 2,449 Provision (benefit) for income taxes (28,248) (19,673) (37,869) 71,691 Interest expense, net 42,951 46,081 172,980 169,687 Less: Depreciation, depletion, accretion and amortization (96,454) (97,570) (394,612) (389,060) ------- ------- -------- -------- EBIT 2,121 (185,751) 153,759 244,745 Plus: Goodwill Impairment - 252,664 - 252,664 Plus: Depreciation, depletion, accretion and amortization 96,454 97,570 394,612 389,060 ------ ------ ------- ------- EBITDA $98,575 $164,483 $548,371 $886,469 Less: Interest expense, net (42,951) (46,081) (172,980) (169,687) Current taxes 10,893 1,578 (6,106) (92,346) ------ ----- ------- ------- Cash earnings $66,517 $119,980 $369,285 $624,436 ======= ======== ======== ======== Reconciliation of Operating Earnings to EBITDA and Cash Earnings Operating earnings (loss) $1,391 $(184,429) $148,452 $249,102 Other income (expense), net 730 (1,322) 5,307 (4,357) --- ------ ----- ------ EBIT 2,121 (185,751) 153,759 244,745 Plus: Goodwill Impairment - 252,664 - 252,664 Plus: Depreciation, depletion, accretion and amortization 96,454 97,570 394,612 389,060 ------ ------ ------- ------- EBITDA $98,575 $164,483 $548,371 $886,469 Less: Interest expense, net (42,951) (46,081) (172,980) (169,687) Current taxes 10,893 1,578 (6,106) (92,346) ----- ----- ------- ------- Cash earnings $66,517 $119,980 $369,285 $624,436 ======= ======== ======== ======== ------------------------------------------------------------------------- EBITDA and Earnings Per Share (EPS) Bridge (Amounts in millions, Three Months Ended Twelve Months Ended except per share data) December 31 December 31 -------------- ------------- EBITDA EPS EBITDA EPS ------ --- ------ --- Continuing Operations - 2008 Actual $164 $(1.92) $886 $0.03 Increase / (Decrease) due to: Aggregates: Volumes (69) (0.57) (334) (2.12) Selling prices 16 0.13 48 0.30 Costs (6) (0.05) 25 0.16 Asphalt mix and Concrete (19) (0.16) (19) (0.12) Cement (4) (0.03) (20) (0.13) Selling, administrative and general expenses 6 0.03 21 0.11 Gain on sale of property, plant & equipment and businesses n/a n/a (67) (0.43) Depreciation, depletion, accretion and amortization n/a 0.01 n/a (0.04) Interest expense, net n/a 0.02 n/a (0.02) Tax rate differential and discrete items n/a 0.23 n/a 0.29 Goodwill Impairment n/a 2.09 n/a 2.06 Additional shares outstanding and other 11 0.12 8 0.07 --- ---- --- ---- Continuing Operations - 2009 Actual $99 $(0.10) $548 $0.16 === ====== ==== ===== ------------------------------------------------------------------------- EBITDA is an acronym for Earnings Before Interest, Taxes, Depreciation and Amortization. Cash earnings adjusts EBITDA for net interest and current taxes. These financial metrics are often used by the investment community as indicators of a company's ability to incur and service debt. They are not defined by Generally Accepted Accounting Principles (GAAP); thus, they should not be considered as an alternative to net cash provided by operating activities, operating earnings, or any other liquidity or performance measure defined by GAAP. These metrics are presented for the convenience of investment professionals that use such metrics in their analysis and to provide the Company's shareholders an understanding of metrics management uses to assess performance and to monitor our cash and liquidity positions. Vulcan's management internally uses EBITDA, cash earnings and other such measures to assess the operating performance of its' various business units and the consolidated company. Vulcan's management does not use these metrics as a measure to allocate resources internally. 

SOURCE Vulcan Materials Company