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Vulcan Materials
2020 Annual Report

Vulcan Announces Third Quarter 2011 Results

11/02/11

BIRMINGHAM, Ala., Nov. 2, 2011 /PRNewswire via COMTEX/ --

Vulcan Materials Company (NYSE: VMC), the nation's largest producer of construction aggregates, announced results today for the third quarter ended September 30, 2011.

Third Quarter Summary and Comparisons with the Prior Year

  • The average unit sales price increased in most product lines.
    • Freight-adjusted aggregates prices increased 1 percent;
    • Asphalt mix prices increased 10 percent;
    • Ready-mixed concrete prices increased 6 percent.
  • Aggregates shipments declined 2 percent.
  • Unit costs for diesel fuel and liquid asphalt increased 40 percent and 20 percent, respectively, reducing pretax earnings by $21 million.
  • Selling, administrative and general (SAG) expenses were $10 million lower than the prior year.
  • Earnings from continuing operations were $22 million, or $0.17 per diluted share, compared to $11 million, or $0.08 per diluted share, in the prior year.
  • EBITDA was $194 million versus $150 million in the prior year.
  • The current quarter's earnings include $63 million in EBITDA, or $0.30 per diluted share, related to the sale of non-strategic aggregates facilities and recovery from an insurer of legal settlement costs related to the Illinois lawsuit settled in the second quarter of last year.
    • Excluding these two items, EBITDA was $131 million and earnings from continuing operations were a loss of $0.13 per diluted share.

Commenting for the Company, Don James, Chairman and Chief Executive Officer, stated, "Business conditions remained challenging in the third quarter. The fragile economic recovery and absence of meaningful job growth continued to hamper construction activity while diesel fuel and liquid asphalt costs remained at elevated levels. However, we are pleased that continued improvement in product pricing in the third quarter helped offset these higher energy-related costs.

"In recent months, we have completed several actions that increase cash and liquidity and that should enhance our future operating performance. We have closed two transactions that yield $57 million in cash, increase our aggregates reserves position, and should increase our future EBITDA. Also in the quarter, we were awarded $24 million in an insurance arbitration associated with last year's legal settlement with the Illinois Department of Transportation. In addition, we terminated an in-the-money interest rate swap and received $23 million in cash for the future value of the swap. Termination of the swap had no material earnings impact in the third quarter as the cash received will be amortized to income between now and 2016. As a result of these actions, at the end of the third quarter, we had no short-term borrowings and had $152 million in cash, with another $20 million to be received in the fourth quarter."

Third Quarter Operating Results and Commentary

Aggregates segment earnings were $113 million versus $125 million in the prior year's third quarter due mostly to lower shipments and higher unit costs for diesel fuel. The year-over-year decrease in aggregates shipments was due primarily to construction being hampered by continued economic uncertainty. Aggregates shipments increased versus the prior year's third quarter in California, North Carolina, and Maryland due primarily to stronger demand from public infrastructure projects. Aggregates shipments in California were up 26 percent versus the prior year's third quarter due mainly to large project work. The average sales price for aggregates increased 1 percent from the prior year due to improvements across a number of markets. Overall, the earnings effect of a 2 percent decline in shipments reduced segment earnings $5 million and the earnings effect of higher pricing offset some of the impact of the higher unit cost of diesel fuel.

Asphalt Mix segment earnings were $12 million in the third quarter versus $13 million in the prior year's third quarter. The average sales price for asphalt mix increased approximately 10 percent, offsetting the earnings effect of higher liquid asphalt costs. Asphalt mix volume increased 1 percent from the prior year's third quarter.

The Concrete segment reported a loss of $9 million versus a loss of $10 million in the prior year's third quarter. Ready-mixed concrete average sales price increased 6 percent from the prior year's third quarter, contributing to improved unit materials margins versus the prior year. However, the improved materials margin effect was somewhat offset by the earnings impact of an 8 percent decline in volume. Cement segment earnings in the third quarter were a loss of $1 million, a slight improvement over the prior year.

SAG expenses in the third quarter were $10 million lower than the prior year's level. This year-over-year decrease was due primarily to lower legal expenses and cost saving initiatives.

In September, we completed the sale of certain non-strategic aggregates facilities. This divestiture resulted in a pretax gain of approximately $40 million.

In the third quarter, we recognized earnings of approximately $24 million for an arbitration award related to the lawsuit settled last year with the Illinois Department of Transportation from the third and final insurer. Included in this total amount was approximately $3 million of current year legal fees and interest income. In the first quarter of this year, we recovered approximately $26 million in an arbitration with two other insurers.

All results are unaudited.

Outlook Highlights and Commentary

  • Assuming normal weather patterns, aggregates volume in the fourth quarter should approximate the prior year.
  • Aggregates pricing in the fourth quarter should be higher than the prior year, offsetting slightly higher costs due in part to higher prices for energy.
  • In the fourth quarter, Asphalt mix volumes should be higher than the prior year due mostly to project work in California.
    • Higher pricing for asphalt mix in the fourth quarter should offset higher costs for liquid asphalt.
  • Fourth quarter ready-mixed concrete pricing should be higher versus the prior year while concrete volumes are expected to be lower.
  • SAG costs in the fourth quarter of 2011 are anticipated to be lower than in the prior year.

Commenting on the Company's outlook, Mr. James stated, "In the current economic environment, we expect future demand for our products to be supported by contract awards for public spending on highway projects, specifically road-related construction, and a modest improvement in private nonresidential building construction. For the twelve month period ending September 30, 2011, contract awards for highways, which include federal, state and local road and bridge projects, were down 3 percent in Vulcan-served states. However, contract awards for the more aggregates-intensive road-related projects were up 6 percent versus the prior year while bridges were down 19 percent. We believe this sharp contrast between road and bridge contract award activity is due in part to the types of projects funded with stimulus dollars as well as the increase in spending from regular funding programs by departments of transportation, which in the absence of a new multi-year federal highway bill, are currently more focused on maintaining existing capacity.

"Several developments in Congress offer encouragement that federal highway funding is moving in a positive direction. The current six-month funding extension, which was signed into law September 16, 2011, includes annualized budget authority of approximately $40 billion, essentially in line with 2011 funding levels. The extension passed by wide margins in both chambers of Congress, as did the Continuing Resolution that appropriated funds at essentially current levels, at the beginning of the new fiscal year on October 1. It is notable that leaders in Congress from both parties have been working to maintain highway funding at or very near current levels at a time of dramatic proposed cuts in many other areas of the federal budget. With respect to the reauthorization of the multi-year surface transportation bill, Senate Environment & Public Works Committee bipartisan leadership announced on October 21 plans to mark up its proposed two-year surface transportation reauthorization bill on November 9, 2011. This bill is intended to maintain Fiscal Year 2011 highway funding levels, plus inflation, for Fiscal Years 2012 and 2013, providing further stability to the federal surface transportation program. And in a shift from its previous position, House leadership is now promoting transportation infrastructure legislation as a way to create jobs, and has authorized the House Transportation and Infrastructure Committee to find significant new sources of revenue for the Highway Trust Fund.

"Private construction has remained at low levels with some indications of improvement in certain categories. In residential construction, single-family housing starts remain at historically low levels. Multi-family starts, on the other hand, have increased sharply since late last year. In Vulcan-served states, trailing twelve-month multi-family housing starts have increased 21 percent, the fourth consecutive quarter of double-digit increases, providing evidence that favorable demographics can support construction activity even with weak economic conditions.

"Private nonresidential construction has also remained at low levels; however, trailing twelve-month contract awards are up across the U.S. for the third quarter in a row. While the growth in contract awards in the manufacturing sector has remained strong since late last year, awards for new projects in the categories of retail and office buildings have increased modestly for the second consecutive quarter. While the recent growth in contract awards is encouraging, we believe employment growth, as well as an increase in business investment and lending activity is needed to sustain a recovery in nonresidential construction activity.

"Our full year SAG costs should be approximately $25 million lower than the prior year with additional measures in place that will further reduce overhead cost in 2012. Planned capital spending remains at $100 million, up modestly from $86 million in 2010.

"In summary, we are encouraged by the recent developments in Washington regarding federal highway funding as well as the modest improvement in contract awards in a variety of private nonresidential building categories, albeit from a small base. To position our company today for significant earnings growth from a recovery in demand for our products, we remain focused on taking prudent steps to control costs, to improve liquidity and to continue to adjust our product mix and geographic footprint."

Conference Call

Vulcan will host a conference call at 10:00 a.m. CDT on November 3, 2011. Investors and other interested parties in the U.S. may access the teleconference live by calling 866.761.0749 approximately 10 minutes before the scheduled start. International participants can dial 617.614.2707. The access code is 57673585. A live webcast will be available via the Internet through Vulcan's home page at http://www.vulcanmaterials.com/. The conference call will be recorded and available for replay approximately two hours after the call through November 10, 2011.

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; the timing and amount of federal, state and local funding for infrastructure; the lack of a multi-year federal highway funding bill with an automatic funding mechanism; the reluctance of state departments of transportation to undertake federal highway projects without a reliable method of federal funding; the impact of a prolonged economic recession on our industry, business and financial condition and access to capital markets; changes in the level of spending for private residential and 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 of our products; 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; changes in interest rates; the impact of our below investment grade debt rating on our cost of capital; volatility in pension plan asset values which may require cash contributions to the pension plans; 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 potential of goodwill impairment; the potential impact of future legislation or regulations relating to climate change or greenhouse gas emissions or the definition of minerals; 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


Nine Months Ended


Consolidated Statements of Earnings


September 30


September 30


(Condensed and unaudited)


2011


2010


2011


2010












Net sales


$ 714,947


$ 699,792


$ 1,828,720


$ 1,857,085


Delivery revenues


45,805


43,412


121,203


115,534


Total revenues


760,752


743,204


1,949,923


1,972,619












Cost of goods sold


599,167


573,045


1,619,206


1,607,109


Delivery costs


45,805


43,412


121,203


115,534


Cost of revenues


644,972


616,457


1,740,409


1,722,643












Gross profit


115,780


126,747


209,514


249,976


Selling, administrative and general expenses


67,859


77,560


221,267


247,431


Gain on sale of property, plant & equipment











and businesses, net


41,457


476


44,831


50,210


Recovery (charge) from legal settlement


20,857


-


46,404


(40,000)


Other operating income (expense), net


(3,567)


769


(10,509)


2,117


Operating earnings


106,668


50,432


68,973


14,872












Other nonoperating income (expense), net


(3,745)


1,637


(2,384)


1,780


Interest expense, net


50,678


47,526


163,839


134,541


Earnings (loss) from continuing operations











before income taxes


52,245


4,543


(97,250)


(117,889)


Provision (benefit) for income taxes


29,833


(6,048)


(47,938)


(61,491)


Earnings (loss) from continuing operations


22,412


10,591


(49,312)


(56,398)


Earnings (loss) on discontinued operations, net of tax


(2,453)


2,655


6,399


6,905


Net earnings (loss)


$ 19,959


$ 13,246


$ (42,913)


$ (49,493)


Basic earnings (loss) per share:











Continuing operations


$ 0.17


$ 0.08


$ (0.38)


$ (0.44)



Discontinued operations


(0.02)


0.02


0.05


0.05



Net earnings (loss) per share


$ 0.15


$ 0.10


$ (0.33)


$ (0.39)












Diluted earnings (loss) per share:











Continuing operations


$ 0.17


$ 0.08


$ (0.38)


$ (0.44)



Discontinued operations


(0.02)


0.02


0.05


0.05



Net earnings (loss) per share


$ 0.15


$ 0.10


$ (0.33)


$ (0.39)












Weighted-average common shares










outstanding:












Basic


129,493


128,602


129,341


127,840




Assuming dilution


129,768


128,910


129,341


127,840


Cash dividends declared per share











of common stock


$ 0.25


$ 0.25


$ 0.75


$ 0.75


Depreciation, depletion, accretion and











amortization


$ 90,948


$ 97,697


$ 273,671


$ 289,174


Effective tax rate from continuing operations


57.1%


-133.1%


49.3%


52.2%










Table B


Vulcan Materials Company


and Subsidiary Companies












(Amounts in thousands, except per share data)











Consolidated Balance Sheets


September 30


December 31


September 30


(Condensed and unaudited)


2011


2010


2010










As Restated (a)


Assets








Cash and cash equivalents


$ 152,379


$ 47,541


$ 82,496


Restricted cash


81


547


531


Medium-term investments


-


-


3,910


Accounts and notes receivable:









Accounts and notes receivable, gross


437,754


325,303


414,316



Less: Allowance for doubtful accounts


(7,715)


(7,505)


(9,382)




Accounts and notes receivable, net


430,039


317,798


404,934


Inventories:









Finished products


249,265


254,840


251,457



Raw materials


26,284


22,222


22,924



Products in process


3,473


6,036


5,905



Operating supplies and other


38,755


36,747


35,958




Inventories


317,777


319,845


316,244


Current deferred income taxes


47,833


53,794


64,768


Prepaid expenses


27,074


19,374


34,279


Assets held for sale


26,883


13,207


14,582




Total current assets


1,002,066


772,106


921,744


Investments and long-term receivables


28,917


37,386


33,808


Property, plant & equipment:









Property, plant & equipment, cost


6,665,937


6,692,814


6,664,335



Less: Reserve for depr., depl. & amort.


(3,222,469)


(3,059,900)


(2,987,287)




Property, plant & equipment, net


3,443,468


3,632,914


3,677,048


Goodwill


3,086,716


3,097,016


3,096,300


Other intangible assets, net


698,703


691,693


685,696


Other noncurrent assets


122,011


106,776


106,922




Total assets


$ 8,381,881


$ 8,337,891


$ 8,521,518






















Liabilities and Equity








Current maturities of long-term debt


$ 5,215


$ 5,246


$ 325,249


Short-term borrowings


-


285,500


-


Trade payables and accruals


134,853


102,315


138,462


Other current liabilities


222,762


172,495


207,085


Liabilities of assets held for sale


1,474


116


460




Total current liabilities


364,304


565,672


671,256


Long-term debt


2,816,223


2,427,516


2,432,521


Noncurrent deferred income taxes


800,770


849,448


856,631


Other noncurrent liabilities


524,485


530,275


537,041




Total liabilities


4,505,782


4,372,911


4,497,449


Equity:










Common stock, $1 par value


129,233


128,570


128,391



Capital in excess of par value


2,538,987


2,500,886


2,487,538



Retained earnings


1,372,822


1,512,863


1,591,969



Accumulated other comprehensive loss


(164,943)


(177,339)


(183,829)




Total equity


3,876,099


3,964,980


4,024,069




Total liabilities and equity


$ 8,381,881


$ 8,337,891


$ 8,521,518


(a) The September 30, 2010 balance sheet reflects corrections of errors related to an understatement of deferred income tax liabilities.






Table C


Vulcan Materials Company


and Subsidiary Companies








(Amounts in thousands)




Nine Months Ended


Consolidated Statements of Cash Flows


September 30


(Condensed and unaudited)


2011


2010








Operating Activities






Net loss


$ (42,913)


$ (49,493)


Adjustments to reconcile net loss to







net cash provided by operating activities:








Depreciation, depletion, accretion and amortization


273,671


289,174




Net gain on sale of property, plant & equipment and businesses


(55,886)


(59,004)




Contributions to pension plans


(3,762)


(23,400)




Share-based compensation


12,991


15,198




Deferred tax provision


(58,569)


(51,060)




Changes in assets and liabilities before initial









effects of business acquisitions and dispositions


(31,858)


(6,647)




Cost of debt purchase


19,153


-


Other, net


8,899


13,059





Net cash provided by operating activities


121,726


127,827








Investing Activities






Purchases of property, plant & equipment


(77,332)


(62,104)


Proceeds from sale of property, plant & equipment


11,730


4,008


Proceeds from sale of businesses, net of transaction costs


72,830


50,954


Payment for businesses acquired, net of acquired cash


-


(35,404)


Decrease (increase) in restricted cash


466


(531)


Other, net


1,218


894





Net cash provided by (used for) investing activities


8,912


(42,183)








Financing Activities






Net short-term payments


(285,500)


(236,512)


Payment of current maturities and long-term debt


(737,952)


(193,994)


Proceeds from issuance of long-term debt


1,100,000


450,000


Debt issuance costs


(17,904)


(3,058)


Proceeds from settlement of interest rate swap agreements


23,387


-


Proceeds from issuance of common stock


4,936


41,734


Dividends paid


(96,878)


(95,696)


Proceeds from exercise of stock options


3,232


12,597


Cost of debt purchase


(19,153)


-


Other, net


32


(484)





Net cash used for financing activities


(25,800)


(25,413)








Net increase in cash and cash equivalents


104,838


60,231


Cash and cash equivalents at beginning of year


47,541


22,265


Cash and cash equivalents at end of period


$ 152,379


$ 82,496








Table D


Segment Financial Data and Unit Shipments



(Amounts in thousands, except per unit data)






Three Months Ended


Nine Months Ended



September 30


September 30




2011


2010


2011


2010


Total Revenues



Aggregates segment (a)


$ 514,723


$ 514,332


$ 1,324,754


$ 1,369,492



Intersegment sales


(42,473)


(44,792)


(111,770)


(119,239)




Net sales


472,250


469,540


1,212,984


1,250,253



Concrete segment (b)


101,390


105,049


281,809


293,028



Intersegment sales


-


-


-


(7)




Net sales


101,390


105,049


281,809


293,021



Asphalt Mix segment


128,897


115,788


304,432


282,309



Intersegment sales


-


-


-


-




Net sales


128,897


115,788


304,432


282,309



Cement segment (c)


19,137


20,360


52,491


61,208



Intersegment sales


(6,727)


(10,945)


(22,996)


(29,706)




Net sales


12,410


9,415


29,495


31,502



Total











Net sales


714,947


699,792


1,828,720


1,857,085




Delivery revenues


45,805


43,412


121,203


115,534




Total revenues


$ 760,752


$ 743,204


$ 1,949,923


$ 1,972,619













Gross Profit





Aggregates


$ 113,391


$ 125,129


$ 227,007


$ 262,514



Concrete


(8,887)


(10,070)


(32,327)


(31,736)



Asphalt Mix


12,292


13,440


20,418


21,756



Cement


(1,016)


(1,752)


(5,584)


(2,558)



Total gross profit


$ 115,780


$ 126,747


$ 209,514


$ 249,976













Depreciation, depletion, accretion and amortization





Aggregates


$ 70,287


$ 74,512


$ 211,502


$ 222,561



Concrete


13,058


13,622


39,291


40,064



Asphalt Mix


1,953


2,212


5,877


6,689



Cement


4,505


5,787


13,554


15,360



Corporate and other unallocated


1,145


1,564


3,447


4,500



Total DDA&A


$ 90,948


$ 97,697


$ 273,671


$ 289,174













Unit Shipments







Aggregates customer tons


39,461


40,079


100,389


105,144



Internal tons (d)


3,106


3,314


8,072


8,748



Aggregates - tons


42,567


43,393


108,461


113,892














Ready-mixed concrete - cubic yards


1,043


1,137


2,911


3,165



Asphalt Mix - tons


2,283


2,258


5,522


5,462














Cement customer tons


124


70


251


245



Internal tons (d)


97


148


316


390



Cement - tons


221


218


567


635













Average Unit Sales Price (including internal sales)







Aggregates (freight-adjusted) (e)


$ 10.24


$ 10.18


$ 10.31


$ 10.18



Ready-mixed concrete


$ 93.06


$ 87.62


$ 92.38


$ 86.95



Asphalt Mix


$ 55.84


$ 50.62


$ 54.53


$ 50.54



Cement


$ 72.63


$ 79.56


$ 75.44


$ 80.01


(a) Includes crushed stone, sand and gravel, sand, other aggregates, as well as transportation and service revenues associated with the aggregates business.



(b) Includes 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 nine months ended
September 30 is summarized below:






(Amounts in thousands)




2011


2010














Supplemental Disclosure of Cash Flow Information






Cash paid (refunded) during the period for:







Interest


$ 102,260


$ 101,917



Income taxes


(31,127)


3,897









Supplemental Schedule of Noncash Investing and Financing Activities






Liabilities assumed in business acquisition


13,774


150


Accrued liabilities for purchases of property, plant & equipment


6,511


4,674


Stock issued for pension contribution


-


53,864


Fair value of equity consideration for business acquisition


18,529


-














2. Reconciliation of Non-GAAP Measures












Net cash provided by operating activities


$ 121,726


$ 127,827


Purchases of property, plant & equipment


(77,332)


(62,104)


Free cash flow


$ 44,394


$ 65,723








Free cash flow deducts purchases of property, plant & equipment from net cash provided by operating activities. This financial metric is used by the investment community as an indicator of a company's ability to incur and service debt. Generally Accepted Accounting Principles (GAAP) does not define "free cash flow." Thus, it should not be considered as an alternative to net cash provided by operating activities or any other liquidity measure defined by GAAP.



We present this metric for the convenience of investment professionals who use this metric in their analysis, and for shareholders who need to understand the metrics we use to assess performance and to monitor our cash and liquidity positions. We use free cash flow and other such measures to assess the operating performance of our various business units and the consolidated company. We do not use this metric as a measure to allocate resources.









Table F










Reconciliation of Non-GAAP Measures









EBITDA and Cash Earnings Reconciliations











(Amounts in thousands)



Three Months Ended


Nine Months Ended



September 30


September 30



2011


2010


2011


2010










Reconciliation of Net Cash Provided by Operating Activities to EBITDA and Cash Earnings







Net cash provided by operating activities


$ 114,710


$ 109,171


$ 121,726


$ 127,827

Changes in operating assets and liabilities before initial









effects of business acquisitions and dispositions


(5,735)


9,231


31,858


6,647

Other net operating items (providing) using cash


1,932


(7,459)


77,174


105,207

(Earnings) loss on discontinued operations, net of tax


2,453


(2,655)


(6,399)


(6,905)

Provision (benefit) for income taxes


29,833


(6,048)


(47,938)


(61,491)

Interest expense, net


50,678


47,526


163,839


134,541

Less: Depreciation, depletion, accretion and amortization


(90,948)


(97,697)


(273,671)


(289,174)

EBIT


102,923


52,069


66,589


16,652

Plus: Depreciation, depletion, accretion and amortization


90,948


97,697


273,671


289,174

EBITDA


$ 193,871


$ 149,766


$ 340,260


$ 305,826

Less: Interest expense, net


(50,678)


(47,526)


(163,839)


(134,541)

Current taxes


3,488


13,303


(10,278)


10,393

Cash earnings


$ 146,681


$ 115,543


$ 166,143


$ 181,678










Reconciliation of Net Earnings (Loss) to EBITDA and Cash Earnings









Net earnings (loss)


$ 19,959


$ 13,246


$ (42,913)


$ (49,493)

Provision (benefit) for income taxes


29,833


(6,048)


(47,938)


(61,491)

Interest expense, net


50,678


47,526


163,839


134,541

(Earnings) loss on discontinued operations, net of tax


2,453


(2,655)


(6,399)


(6,905)

EBIT


102,923


52,069


66,589


16,652

Plus: Depreciation, depletion, accretion and amortization


90,948


97,697


273,671


289,174

EBITDA


$ 193,871


$ 149,766


$ 340,260


$ 305,826

Less: Interest expense, net


(50,678)


(47,526)


(163,839)


(134,541)

Current taxes


3,488


13,303


(10,278)


10,393

Cash earnings


$ 146,681


$ 115,543


$ 166,143


$ 181,678



















EBITDA Bridge


Three Months Ended




Nine Months Ended



(Amounts in millions)


September 30




September 30





EBITDA




EBITDA



Continuing Operations - 2010 Actual


$ 150




$ 306



Increase / (Decrease) due to:









Recovery (charge) from legal settlement


21




86



Gain on pp&e and divestitures, net


41




(5)



Aggregates:

Volumes


(5)




(33)




Selling prices


3




14




Costs and other items


(14)




(27)



Concrete


-




(2)



Asphalt Mix


(1)




(2)



Cement


-




(5)



Selling, administrative and general expenses


10




26



All other


(11)




(18)



Continuing Operations - 2011 Actual


$ 194




$ 340





















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. Generally Accepted Accounting Principles (GAAP) does not define "EBITDA" and "cash earnings." Thus, they should not be considered as an alternative to net cash provided by operating activities, operating earnings or any other liquidity or earnings measure defined by GAAP.



We present these metrics for the convenience of investment professionals who use such metrics in their analysis, and for shareholders who need to understand the metrics we use to assess performance and to monitor our cash and liquidity positions. We use EBITDA, cash earnings and other such measures to assess the operating performance of our various business units and the consolidated company. We do not use these metrics as a measure to allocate resources.

SOURCE Vulcan Materials Company