10-K
1
YEAR ENDING DECEMBER 31, 1994
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 1-4033
VULCAN MATERIALS COMPANY
(Exact name of registrant as specified in its charter)
New Jersey 63-0366371
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Metroplex Drive, Birmingham, Alabama 35209
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 877-3000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, $1 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 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 X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the registrant as of February 28, 1995:
Common Stock, $1 Par Value $1,775,017,728.00
The number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date:
Shares outstanding
at February 28, 1995
Common Stock, $1 Par Value 35,858,944
Documents Incorporated by Reference:
Portions of the registrant's Annual Report to Shareholders for the year
ended December 31, 1994, are incorporated by reference into Parts I, II and IV
of this Annual Report on Form 10-K.
Portions of the registrant's annual proxy statement for the annual meeting
of its shareholders to be held on May 22, 1995, which will be filed within 120
days of the end of the fiscal year covered by this Report, are incorporated by
reference into Part III of this Annual Report on Form 10-K.
VULCAN MATERIALS COMPANY
CROSS REFERENCE SHEET FOR DOCUMENTS INCORPORATED
BY REFERENCE
HEADING IN ANNUAL REPORT PAGE IN
FORM 10-K TO SHAREHOLDERS FOR ANNUAL
ITEM NO. YEAR ENDED DECEMBER 31, 1994 REPORT
1. Business (Financial Results Segment Financial Data 24-25
by Business Segments)
Note 11, Segment Data 49
Note 13, Callaway Chemical
Acquisition 49
3. Legal Proceedings Note 9, Other Commitments and
Contingent Liabilities 47
5. Market for the Registrant's Common Stock Market Prices
Common Equity and Related and Dividends 26
Stockholder Matters
6. Selected Financial Data Selected Financial Data 23
7. Management's Discussion and Management's Discussion 27-35
Analysis of Financial and Analysis
Condition and Results Financial Terminology 51
of Operations
8. Financial Statements and Consolidated Statements of Earnings 38
Supplementary Data
Consolidated Balance Sheets 39
Consolidated Statements of Cash Flows 40
Consolidated Statements of
Shareholders' Equity 41
Notes to Financial Statements 42-49
Management's Responsibility
for Financial Reporting
and Internal Control 50
Independent Auditors' Report 50
Supplementary Information-
Quarterly Financial Data (Unaudited) 36
14. Exhibits, Financial Statement Management's Discussion and
Schedules and Reports and Analysis 27-35
on Form 8-K
HEADING IN PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 1995
10. Directors and Executive Election of Directors, Nominees for
Officers of the Registrant Election to the Board of Directors,
Directors Continuing in Office,
Compliance with the Securities
Exchange Act
11. Executive Compensation Compensation of Directors, Executive
Compensation, Shareholder Return
Performance Presentation, Retirement
Income Plan, Employee Special Severance
Plan
12. Security Ownership of Security Ownership of Certain Beneficial
Certain Beneficial Owners Owners, Security Holdings of Management
and Management
VULCAN MATERIALS COMPANY
ANNUAL REPORT ON FORM 10-K
FISCAL YEAR ENDED DECEMBER 31, 1994
CONTENTS
PART ITEM
I 1 Business 1
2 Properties 5
3 Legal Proceedings 8
4 Submission of Matters to a Vote of Security Holders 14
4 a. Executive Officers of the Registrant 14
II 5 Market for the Registrant's Common Equity and Related
Stockholder Matters 15
6 Selected Financial Data 15
7 Management's Discussion and Analysis of Financial
Condition and Results of Operations 15
8 Financial Statements and Supplementary Data 15
9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 16
III 10 Directors and Executive Officers of the Registrant 16
11 Executive Compensation 16
12 Security Ownership of Certain Beneficial Owners and
Management 16
13 Certain Relationships and Related Transactions 17
IV 14 Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 17
-- Signatures 24
PART I
ITEM 1. BUSINESS
Vulcan Materials Company, a New Jersey corporation incorporated in
1956, and its subsidiaries (together called the "Company") are principally
engaged in the production, distribution and sale of construction materials
("Construction Materials") and industrial and specialty chemicals
("Chemicals"). Construction Materials and Chemicals may each be considered
both a segment (or a line of business) and a class of similar products. The
Company is the nation's leading producer of construction aggregates.
All of the Company's products are marketed under highly competitive
conditions, including competition in price, service and product performance.
There are a substantial number of competitors in both the Construction
Materials segment and Chemicals segment.
No material part of the business of either segment of the Company is
dependent upon a single customer or upon a few customers, the loss of any
one of which would have a materially adverse effect on the segment. The
Company's products are sold principally to private industry. Although large
amounts of construction materials are used in public works, relatively
insignificant sales are made directly to federal, state, county or municipal
governments, or agencies thereof.
The Company conducts research and development activities for both of
its business segments. The Construction Materials research and development
laboratory is located near Birmingham, Alabama. The Chemicals research
and development laboratories are located in Wichita, Kansas, Columbus,
Georgia, and Tuscon, Arizona. In general, the Company's research and
development effort is directed to applied technological development for the
use of its Construction Materials and Chemicals products as well as for the
manufacture or processing of its Chemicals products. The Company spent
approximately $821,000 in 1992, $1,132,000 in 1993, and $1,080,000 in 1994
on research and development activities for its Construction Materials
segment. The Company spent approximately $4,614,000 in 1992, $4,941,000 in
1993 and $7,215,000 in 1994 on research and development activities for its
Chemicals segment.
The Company estimates that capital expenditures for environmental
control facilities in the current fiscal year (1995) and the succeeding fiscal
year (1996) will be approximately $5,363,000 and $2,260,000, respectively, for
the Construction Materials segment, and $11,220,000 and $5,100,000,
respectively, for the Chemicals segment.
The Company's principal sources of energy are electricity, natural gas
and diesel fuel. The Company does not anticipate any material difficulty in
obtaining the required sources of energy required for its operations.
In 1994, the Construction Materials segment employed an average of
approximately 5,002 people. The Chemicals segment employed an average of
approximately 1,597 people. The Company's corporate office employed an
average of approximately 154 people. The Company considers its relationship
with its employees to be good.
Financial results of the Company for any individual quarter are not
necessarily indicative of results to be expected for the year, due primarily
to the effect that weather can have on the sales and production volume of the
Construction Materials segment. Normally, the highest sales and earnings of
the Construction Materials segment are attained in the third quarter and the
lowest are realized in the first quarter.
Page 1
CONSTRUCTION MATERIALS
The Company's construction aggregates business consists of the
production and sale of crushed stone, sand, gravel, rock asphalt and crushed
slag (a by-product of steel production). Crushed stone constituted
approximately 75% of the dollar volume of the Construction Materials segment's
1994 sales, as compared to 81% in 1993 and 78% in 1992. Construction
aggregates of suitable characteristics are employed in virtually all types of
construction, including highway construction and maintenance, and in the
production of asphaltic and portland cement concrete mixes. They also are
widely used as railroad track ballast.
Each type of aggregate is sold in competition with other types of
aggregates and in competition with other producers of the same type of
aggregate. Because of the relatively high transportation costs inherent in
the business, competition is generally limited to the areas in relatively
close proximity to production facilities. Noteworthy exceptions are the areas
along the rivers served by the Company's Reed quarry and related businesses,
which serve markets located along the Mississippi and Tennessee-Tombigbee
river systems and the Gulf Coast, areas served by rail-connected quarries, and
the areas along the Gulf Coast served by ocean-going vessels that transport
stone from the Company's joint venture operation in Mexico. The Company's
construction aggregates are sold principally in portions of most of the
southeastern states, portions of Texas, northern and central Illinois,
northern Indiana, east central Iowa and southern Wisconsin.
Shipments of all construction aggregates from the Company's domestic
operations in 1994 totaled approximately 133 million tons, with crushed stone
shipments to customers accounting for 125 million tons.
In 1994, the Company, directly or through joint ventures, operated 126
domestic permanent and portable plants at quarries located in 14 states for
the production of crushed limestone and granite with estimated reserves
totaling approximately 7.7 billion tons.
The foregoing estimates of reserves are of recoverable stone of suitable
quality for economic extraction, based on drilling and studies by the
Company's geologists and engineers, recognizing reasonable economic and
operating restraints as to maximum depth of overburden and stone excavation.
These estimates do not include reserves at the Company's inactive and
undeveloped sites.
In 1994, the Company, directly or through joint ventures, operated 15
sand and gravel plants, four slag plants and various other types of plants
which produce rock asphalt, mineral filler, pulverized limestone and fine
grind products. Estimates of sand and gravel reserves, calculated in a manner
comparable to the estimates of stone reserves set forth above, total
approximately 45 million tons.
Page 2
Other Construction Materials products and services include asphaltic
concrete, ready-mixed concrete, trucking services, barge transportation, coal
handling services, a Mack Truck distributorship, paving construction,
dolomitic lime, emulsified asphalt and several other businesses.
Environmental and zoning regulations have made it increasingly
difficult for the construction aggregates industry to expand existing quarries
and to develop new quarry operations. Although it cannot be predicted what
policies will be adopted in the future by governmental bodies regarding
environmental controls which affect the Construction Materials industry, the
Company anticipates that future environmental control costs will not have a
materially adverse effect upon its business.
CHEMICALS
In 1994, the Chemicals Division was reorganized to establish two
business units to operate within the segment. The Chloralkali Business Unit
manages the Company's chloralkali business and the Performance Systems
Business Unit manages the Company's specialty chemicals business.
The principal chemicals produced by the Chloralkali Business Unit
at the Company's three chloralkali plants described in Item 2 below, are
chlorine, caustic soda (sodium hydroxide), muriatic acid, caustic potash
(potassium hydroxide) potassium carbonate, chlorinated hydrocarbons and
calcium chloride. Chlorine and various hydrocarbons (primarily ethylene and
methanol) are used to produce the Unit's line of chlorinated hydrocarbons,
including methylene chloride, perchloroethylene, chloroform, methyl chloride,
ethylene dichloride, carbon tetrachloride, methyl chloroform and
pentachlorophenol. In 1994, the Company completed construction of a new plant
at the Port Edwards facility for the production of potassium carbonate.
Principal markets for the Chloralkali Business Unit's chemical products
and services include pulp and paper, energy, food, pharmaceutical, cleaning,
chemical processing, fluorocarbons, water treatment and textiles. In the
paper-making industry, chlorine is used in pulp and paper bleaching, while
caustic soda is used primarily in the kraft and sulfite pulping process. The
Company supplies hydrochloric acid to the energy industry for use in oil well
stimulation and gas extraction. Caustic soda also is used to demineralize
water for steam production at electrical energy facilities and to remove
sulfur from gas and coal. Hydrochloric acid, caustic soda, methylene chloride
and caustic potash are used by the food and pharmaceutical industries.
Perchloroethylene is used in the drycleaning industry. Perchloroethylene,
methylene chloride and methyl chloroform are also used in industrial cleaning
applications. Potassium carbonate is used in the manufacture of screen glass,
rubber antioxidants and other chemicals. The Company's sales to the chemical
processing industry serve companies that produce organic and inorganic
chemical intermediates and finished products ranging from clay-based catalysts
to agricultural herbicides. Products sold to this market include hydrochloric
acid, chlorine, liquid caustic soda and caustic potash. The Company sells
carbon tetrachloride, perchloroethylene, chloroform and methyl chloroform to
the fluorocarbons market. The Company's chlorine also is used in water and
sewage treatment, and its caustic soda and caustic potash are used in the
production of soaps and detergents. Chlorine also is used as an industrial
Page 3
bleaching agent, in cleaning applications for the electronics industry, as a
biocide in the fruit processing industry and in various applications in the
oil industry. Calcium chloride, produced at the Company's Wichita complex,
has a multitude of uses including de-icing of roads, dust control, road
stabilization and oil well completion.
The principal chemicals produced by the Performance Systems Business
Unit include numerous process aids for the pulp and paper and textile
industries and various water treatment chemicals which are produced by the
Company's new Callaway Chemical subsidiaries. The assets of these
subsidiaries, Callaway Chemical Company and Callaway Chemicals Limited, were
purchased in August, 1994, from Exxon Chemical Company and Imperial Oil
Limited, respectively.* Also, through the Vulcan Peroxidation Systems Inc.
("VPSI") subsidiary, the assets of which were acquired in January, 1994, the
Performance Systems Business Unit markets equipment, chemicals (primarily
hydrogen peroxide purchased from others) and services to the municipal,
industrial and environmental water treatment markets. In 1994, the Company
completed construction of two new plants, one at the Wichita facility for the
production of sodium chlorite and the other at the Port Edwards facility for
the production of sodium hydrosulfite. Those chemicals are now included among
the chemicals produced by the Performance Systems Business Unit. Sodium
hydrosulfite is used primarily in the pulp and paper industry, while sodium
chlorite is used as a water disinfection and purification chemical in both
municipal and industrial markets.
The Company competes throughout the United States with numerous
companies, including some of the largest chemical companies, in the production
and sale of its lines of chemicals. The Company also competes for sales to
customers located outside of the United States, with sales to such customers
currently accounting for approximately 7% of the Company's chemicals sales.
During 1994, further progress was made by the Company in its
evaluation and development of a possible joint venture to manufacture and
market soda ash in Owens Lake, California. Efforts are focused on obtaining
environmental permits necessary for this start-up venture, which permits are
expected to be obtained in mid-1995.
The Company's underground reserves of salt, which is a basic raw
material in the production of chlorine and caustic soda, are located at or
near its Wichita, Kansas, and Geismar, Louisiana, plants. The Company
purchases salt for its Port Edwards, Wisconsin, plant. Ethylene and methanol,
the other major raw materials used in the Chloralkali Business Unit and
various chemicals used by the Performance Systems Business Unit are purchased
from several different suppliers. Sources of salt, ethylene, methanol and
other various chemicals are believed to be adequate for the Company's
operations and the Company does not anticipate any material difficulty in
obtaining the raw materials which it uses.
The Company's chemical operations are subject to the Resource
Conservation and Recovery Act ("RCRA"). Under the corrective action
requirements of RCRA, the Environmental Protection Agency ("EPA") must
identify facilities subject to RCRA's hazardous
* A description of this acquisition is contained in Note 13, Callaway
Chemical Acquisition, on page 49 of the Company's 1994 Annual
Report to Shareholders and is incorporated herein by reference.)
Page 4
waste permitting provisions where practices in the past have caused releases
of hazardous waste or constituents thereof. The owner of any such facility is
then required to conduct a Remedial Facility Investigation ("RFI") defining
the nature and extent of any such releases described by the EPA. If the
results of the RFI determine that constituent concentrations from any such
release exceed action levels specified by the EPA, the facility owner is
further required to perform a Corrective Measures Study ("CMS") identifying
feasible technological alternatives for addressing these releases. Depending
upon the results reported to the EPA in the RFI and CMS, the EPA subsequently
may require Corrective Measures Implementation ("CMI") by the facility owner
-- essentially, implementation of a cleanup plan developed by the EPA based on
the RFI and CMS.
The Company expects to incur RFI/CMS costs over the next several
years at its Geismar, Port Edwards and Wichita manufacturing facilities.
For each of these three facilities, the RFI/CMS results will determine whether
the EPA subsequently requires CMI to address releases at the facility, and
the scope and cost of any such CMI. With respect to those RFI/CMS costs that
currently can be reasonably estimated, the Company has determined that its
accrued reserves are adequate to cover such costs. However, the total costs
which ultimately may be incurred by the Company in connection with discharging
its obligations under RCRA's corrective action requirements cannot reasonably
be estimated at this time.
Various other environmental regulations also have a restrictive effect
upon the chemicals industry, both as to production and markets, especially the
production of and markets for certain chemicals which are subject to
regulation as ozone depleting chemicals. Under current law in the United
States regulating such ozone depleting chemicals, the marketing of carbon
tetrachloride and methyl chloroform for emissive uses will end effective
January 1, 1996, but these chemicals will continue to be marketed in lesser
quantities for non-emissive uses.
FINANCIAL RESULTS BY BUSINESS SEGMENTS
Net sales, earnings, identifiable assets and related financial data
for each of the Company's business segments for the three years ended
December 31, 1994, are reported on page 49 (Note 11 of the Notes to Financial
Statements) and on pages 24 and 25 (under the caption "Segment Financial
Data") in the Company's 1994 Annual Report to Shareholders, which pages are
incorporated herein by reference.
ITEM 2. PROPERTIES
CONSTRUCTION MATERIALS
The Company's current estimate of approximately 7.7 billion tons of
stone reserves is approximately 300 million tons more than the estimate
reported at the end of 1993. Increases in the Company's reserves have
resulted from the acquisition of a quarry site in Illinois, new leases or
acquisitions of properties adjacent to existing quarries and revisions in
mining plans. These increases have been partially offset by 1994 production
tonnage. Management believes that the quantities of reserves at the Company's
stone quarries are sufficient to result in an average quarry life of more than
60 years at present operating levels.
Page 5
Of the 126 domestic stone quarries which the Company operates
directly or through joint ventures, 38 are located on owned land, 17 are on
land owned in part and leased in part, and 71 are on leased land. While some
of the Company's leases run until reserves at the leased sites are exhausted,
generally the Company's leases have definite expiration dates which range from
1995 to 2085. Most of the Company's leases have options to extend them well
beyond their current terms.
Due to transportation costs, the marketing areas for most quarries in
the construction aggregates industry are limited, often consisting of a single
metropolitan area or one or more counties or portions thereof. The following
table itemizes the Company's 10 largest active stone quarries in terms of the
quantity of stone reserves, with nearby major metropolitan areas (if
applicable) shown in parentheses:
ESTIMATED
YEARS OF LIFE LEASE
AT AVERAGE EXPIRATION
RATE OF NATURE OF DATE, IF
LOCATION PRODUCT PRODUCTION* INTEREST APPLICABLE**
McCook (Chicago), Illinois Limestone 87*** Owned
Paducah, Kentucky Limestone 50 Leased ****
Grayson (Atlanta), Georgia Granite Over 100 Owned
Gray Court (Greenville), South Carolina Granite Over 100 Owned
Warrenton, Virginia (Washington, D.C.) Diabase Over 100 Leased ****
Kennesaw (Atlanta), Georgia Granite 66 75% Owned
25% Leased 2013
Manteno, Illinois Limestone Over 100 Leased 3004
Skippers, Virginia Granite Over 100 Leased 2016
Stafford, Virginia Granite Over 100 Owned
Lawrenceville (Norfolk/Virginia
Beach), Virginia Granite 92 25% Owned
75% Leased 2024
* Estimated years of life of stone reserves are based on the average
annual rate of production of the quarry for the most recent three-year
period, except that if reserves are acquired or if production has been
reactivated during that period, the estimated years of life are based
on the annual rate of production from the date of such acquisition or
reactivation. Revisions may be necessitated by such occurrences as
changes in zoning laws governing quarry properties, changes in stone
specifications required by major customers and passage of government
regulations applicable to quarry operations. Estimates also are
revised when and if additional geological evidence indicates that a
revision is necessary.
** Renewable by the Company through date shown.
*** The Metropolitan Water Reclamation District of Greater Chicago is
considering condemning a portion of this quarry in order to use it as a
reservoir. The Company believes that this action, if it occurs, could
significantly reduce the life of this quarry, but will not have a
material effect on the financial condition of the Company as a whole.
**** Lease does not expire until reserves are exhausted. Surface rights at
the Paducah, Kentucky, quarry are owned.
Page 6
The estimated average life of the Company's sand and gravel operations,
calculated in the same manner as described in the footnote to the table set
out above, is approximately 8 years. Approximately 51% of the Company's
estimated 45 million tons of sand and gravel reserves are located on owned
land, with the remaining 49% located on leased land.
CHEMICALS
Manufacturing facilities for the chemicals produced by the Chloralkali
Business Unit are owned and operated by the Company at Wichita, Kansas;
Geismar, Louisiana; and Port Edwards, Wisconsin. With a few exceptions, the
Geismar and Wichita facilities produce the full line of products manufactured
in the Company's Chloralkali Business Unit. The Port Edwards plant produces
chlorine, caustic soda, muriatic acid, caustic potash, potassium carbonate and
sodium hydrosulfite.
All of the facilities at Wichita are located on a 1,396-acre tract of
land owned by the Company. Mineral rights for salt are held by the Company
under two leases that are automatically renewable from year to year unless
terminated by the Company and under several other leases which may be kept in
effect so long as production from the underlying properties is continued. In
addition, the Company owns 320 acres of salt reserves and 160 acres of water
reserves. The Company currently operates an electric power cogeneration
facility at the Wichita plant site which generates approximately one-third of
the plant's electricity and two-thirds of its process steam requirements.
Effective in mid-1995, however, pursuant to a long-term agreement, the Company
plans to place this facility in reserve and purchase all of its requirements
for electric power from a local utility at favorable rates.
The facilities at Geismar, Louisiana, are located on a 1,126-acre tract
of land owned by the Company. Included in the facilities at the Geismar plant
is an electric power cogeneration facility owned by the Company which
supplies substantially all of the electricity and process steam required by
the plant. Mineral rights for salt are held under a long-term lease expiring
in 1997 with an option to renew for an additional 10 years.
The plant facilities at Port Edwards, Wisconsin, are located on a
25-acre tract of land, the surface rights to which are owned by the Company.
Currently, the Company purchases its salt requirements for the Port Edwards
facility from regional sources of supply.
VPSI leases its headquarters, equipment assembly, engineering and
research and development facilities in Tucson, Arizona. It also leases eleven
offices in nine other states and one in Langen, Germany. Callaway Chemical
Company owns a headquarters office building and two production facilities in
Columbus, Georgia, and a smaller production facility in Shreveport, Louisiana.
Callaway Chemical Limited has an office and small production facility on
leased property in Vancouver, British Columbia.
The Company's Chemicals manufacturing facilities are designed to
permit a high degree of flexibility as to feedstocks, product mix and
by-product ratios; therefore, actual plant production capacities vary
according to these factors. Management does not believe, however, that there
is material excess in production capacity at the Company's Chemicals
facilities.
Page 7
OTHER PROPERTIES
The Company's corporate offices are located in an office complex near
Birmingham, Alabama. Headquarters staff of the Chemicals segment, the
Southern division of the Construction Materials segment, and of Vulcan Gulf
Coast Materials, Inc., also are located in this complex. The space is
occupied pursuant to a lease which runs through December 31, 1998. The
Company has the option of extending this lease for two five-year periods.
The Company's space in this complex is leased at an approximate annual rental,
as of December 31, 1994, of $1,300,000, which is subject to limited
escalation.
ITEM 3. LEGAL PROCEEDINGS
The Company is a defendant in various lawsuits in the ordinary course
of business. It is not possible to determine with precision the probable
outcome of or the amount of liability, if any, under these lawsuits; however,
in the opinion of the Company and its counsel, the disposition of these
lawsuits will not adversely affect the consolidated financial position of the
Company to a material extent.
In the course of its Construction Materials and Chemicals operations,
the Company is subject to occasional governmental proceedings and orders
pertaining to occupational health and safety or to protection of the
environment, such as proceedings or orders relating to noise abatement, air
emissions or water discharges. As part of its continuing program of
environmental stewardship, however, the Company has been able to resolve such
proceedings and to comply with such orders without any materially adverse
effects on its business.
(a) The Company received a letter from the United States
Environmental Protection Agency ("EPA") in May 1985 regarding remedial actions
at a chemical waste site in Ascension Parish, Louisiana. Records indicate
that the Company generated a portion of the waste placed at the site, and the
Company therefore has been deemed by the EPA to be a potentially responsible
party ("PRP") with respect to the site under the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA").
On February 5, 1991, the EPA issued a unilateral administrative order
("UAO") which directs the named respondents, including the Company and other
PRPs, to clean up the site. In a letter dated April 9, 1991, the Company,
along with three other PRPs named in the UAO, gave notice to the EPA that they
intend to comply with all lawful terms and conditions of the UAO. Effective
June 8, 1992, the Company and other PRPs entered into a Site Participation
Agreement ("Agreement") allocating among the parties those costs which are
anticipated to be incurred both in connection with the remediation activity
and the EPA's past response work or oversight work at the Ascension Parish
site.
Cleanup of the site is in progress and is expected to be substantially
completed in 1995. Experience to-date in conducting EPA's final remediation
plan suggests that the cost originally estimated to perform the remediation is
likely to be exceeded when such remediation is completed. In addition and as
had been anticipated, in a letter dated March 8, 1995, the EPA has demanded
that the Company and other PRPs reimburse EPA for past and future costs
related to EPA's response to conditions at the site, and has offered the
Company and other PRPs
Page 8
an opportunity to negotiate an agreement for payment of such costs. The March
8 letter asserts that EPA has incurred costs not inconsistent with the
National Contingency Plan for its removal or remedial action at the site and
that through December 31, 1994, such past response costs total $6,335,298.80.
Considering the (i) likelihood of higher than estimated remediation costs, and
(ii) the intent of the EPA to seek response and oversight costs in an amount
greater than previously anticipated, the Company decided to record an
additional provision of $7,000,000 at the end of calendar year 1994. The
Company believes that total provisions recorded for cleanup of this site are
adequate to cover its allocated share of currently anticipated costs and has
been making payments from its accrued reserve pursuant to the Agreement.
(b) The Company has received a letter dated August 2, 1991, from
the State of New Jersey Department of Environmental Protection and Energy
("NJDEPE") concerning a site located in Newark, New Jersey, which the Company
previously owned and upon which the Company operated a chemicals production
facility from the early 1960s until 1974. The NJDEPE's letter contends that
hazardous substances and pollutants contaminate the site and that a Remedial
Investigation/Feasibility Study ("RI/FS") is required in order to determine
the nature and extent of such contamination and whether a remedial action plan
with respect thereto should be developed.
On November 11, 1991, the Company received from the NJDEPE "a
Directive and Notice to Insurers" (the "Directive") purporting to direct the
Company to pay within thirty (30) days to the NJDEPE $1,000,000 to be used by
it in conducting an RI/FS at the site. The NJDEPE also asserts that it may
have the right to cause a lien to be placed against the real and personal
property of the Company to secure the payment of any such amounts. If the
Company fails to comply with the Directive without sufficient grounds for such
non-compliance, the Company could be subject to liability in an amount equal
to three times the cost of the work performed by the NJDEPE and statutory
penalties in an amount not to exceed $50,000 per day. Although the NJDEPE has
not withdrawn its Directive, the NJDEPE has informally agreed that it will not
seek to enforce its Directive as long as the Company participates in the RI/FS
for this site.
On August 20, 1993, two other allegedly responsible parties, Safety-
Kleen Environsystems Company and Bristol-Meyers Squibb Company (collectively,
the "Respondents"), entered into an Administrative Consent Order ("ACO")
issued by the NJDEPE concerning the site. The ACO contains certain findings
of fact by the NJDEPE and provisions governing the conduct by the Respondents
of an RI/FS for the site and remedial actions, if any, resulting therefrom.
Under a separate agreement with Respondents and certain successors,
the Company will share in the cost of the RI/FS. The Respondents estimate a
cost of $250,000 to complete the RI. The cost of the FS depends upon the
results of the RI.
Depending, in turn, upon the results of the RI/FS, it is possible that
the NJDEPE will require site remediation under the ACO. In that event, it is
also possible that the Respondents or the NJDEPE will assert that the Company
should bear some responsibility in connection with such remediation. At this
time, however, it is impossible to predict the ultimate outcome of this
matter.
Page 9
(c) The Company received a letter dated October 21, 1991, from
Chevron USA, Inc. ("Chevron"), contending that hazardous substances and
pollutants contaminate a site owned by Chevron and located in Woodbridge
Township, Middlesex County, New Jersey. The Company sold that site to Chevron
in 1958, and the Company owned and operated a detinning facility adjacent to
the Chevron site until 1964. Chevron has advised the Company that Chevron is
investigating the feasibility of corrective action pursuant to applicable
provisions of RCRA, and is seeking assistance from parties who may have been
responsible for some or all of the contamination at the site.
The Company and other allegedly responsible parties have had
meetings with Chevron to discuss the status of the site. Given the limited
information available to the Company regarding this site, the extent, if any,
to which the Company's former operations may have contributed to contamination
at the site cannot now be established or confirmed. For these reasons, it is
impossible at this time for the Company to predict the outcome of this matter
or the existence or extent of any liability of the Company with respect to
this matter.
(d) On January 3, 1992, the Company received a letter from the
EPA regarding alleged releases or threatened releases of hazardous substances
at a hazardous waste treatment, storage and disposal site in Greer, South
Carolina, which was operated by Aqua-Tech Environmental, Inc., a South
Carolina corporation. The EPA's letter advised that the Company may be
considered a CERCLA PRP. The Company confirmed that in 1987 it had sent
cylinders containing titanium tetrachloride to the site for disposal. On
April 20, 1992, the Company became a party to a PRP Agreement whereby the
signatories thereto agreed to cooperate in responding as a PRP group to the
EPA.
On April 24, 1992, the EPA issued a CERCLA Section 106 UAO to
many of the PRPs, including the Company, directing the PRPs to conduct a
removal action with respect to hazardous substances on-site. (The UAO covers
only the removal action; the EPA is considering whether to place the site on
the National Priorities List for remediation purposes.) A total of 179 PRPs
have agreed to participate in the removal action and to share the related
costs according to a series of interim allocations.
The estimated cost of the removal action is $19,700,000. The Company
has paid over $116,000 pursuant to interim allocations. Because the Company
concluded that it had already paid more than its likely share of removal
costs, the Company withdrew from further participation in the removal action
as a member of the PRP group.
The participating PRPs have now substantially completed the removal
work required by the UAO, and on September 20, 1994, a proposed final removal
allocation formula was circulated for comment and correction. Although the
Company's final allocation was determined to be $90,409.10, certain
corrections will reduce this amount slightly. It is impossible at this time
to estimate whether the Company will recoup amounts overpaid for removal
action. The extent to which the site is contaminated has not been assessed,
so additional costs associated with assessing and remediating any such site
contamination cannot yet be estimated. Consequently, neither the extent, if
any, to which the wastes the Company sent to the site may have contributed to
site contamination, nor the Company's potential share, if any, of the costs
associated with the assessment and remediation of such site contamination,
can yet be determined. However, the
Page 10
Company does not believe that its potential share of any costs related to the
site will adversely affect the consolidated financial position of the Company
to a material extent.
(e) On October 23, 1992, the Company received a letter from the
EPA requesting information regarding waste generated by the Company and
disposed of at a sanitary landfill in Muskego, Wisconsin, which is operated by
Waste Management of Wisconsin ("Muskego Landfill"). The Company responded by
stating that it had no knowledge of the generation of any solid waste by the
Company's former aluminum recycling facility in Oak Creek, Wisconsin, which
was disposed of in the Muskego Landfill. Nevertheless, on January 14, 1993,
the Company received a CERCLA Section 106 UAO directing that the Company and
45 other respondents/PRPs perform remedial design and action work with respect
to the Muskego Landfill.
The Company and other PRPs formed a PRP Group to formulate
allocations for: (i) Waste Management's past response costs, totaling
approximately $5.6 million; (ii) a remedial design study for the first phase
of remediation, costing approximately $470,000; and (iii) first phase remedial
work, costing an estimated $10.5 million. The Company paid $5,998 toward
administrative costs for the PRP Group and for its share of the remedial
design study. The Company has since paid $17,928 in settlement of the
Company's share of the costs relating to past response efforts and the first
phase of remediation. The Company's potential share of the ultimate cleanup
cost cannot be determined at this time. The Company does not believe that its
potential share of any additional costs for the second phase of remediation
involving groundwater cleanup will adversely affect the consolidated financial
position of the Company to a material extent.
(f) During the spring of 1992, representatives of the EPA inspected
the Company's chemicals manufacturing plant in Geismar, Louisiana. On March
18, 1993, a Complaint, Compliance Order, and Notice of Opportunity for Hearing
(the "Multimedia Complaint and Order") was issued to the Company by the EPA.
In the Multimedia Complaint and Order, the EPA alleged multiple count
violations of RCRA, CERCLA and the Clean Air Act, for which violations EPA
sought civil penalties in the total amount of $298,650. On April 30, 1993,
the Company filed its Answer to Complaint and Compliance Order and Request for
Hearing (the "Answer") with the EPA. Subsequent to filing the Answer, the
Company and EPA settled this matter and the Company entered into an
Administrative Consent Agreement and Consent Order pursuant to which the
Company paid civil penalties totaling $164,370 to the EPA and $15,000 as a
Supplemental Environmental Project to the State of Louisiana.
(g) By letter dated March 1, 1994, the EPA notified the Company
that it was a CERCLA PRP with respect to the Jack's Creek/Sitkin Smelting
Superfund Site in Mifflin County, Pennsylvania, where the Sitkin Smelting
Company ("Sitkin") operated a secondary smelting facility from 1958 until
declaring bankruptcy in 1977.
EPA claims that there are releases and threatened releases of various
hazardous substances from this site. In its March 1 letter, EPA advised that
it may order some or all of the PRPs to take response actions at the site, and
that EPA may seek recovery of costs which EPA has incurred or may incur in the
future with respect to investigation and remediation of the site. By the fall
of 1994, EPA had undertaken investigative and response actions which
Page 11
reportedly cost approximately $5,043,000. Although a record of decision
("ROD") for this site is not expected until the second quarter of 1995, the
RI/FS prepared by EPA's contractor favors a remedy involving chemical fixation
and capping, with an estimated cost of $56.2 million.
The Company is among some 880 PRPs that EPA claims shipped to the
site a total of approximately 286 million pounds of material alleged to
contain hazardous substances. During that period, EPA claims that the
Company's shipments totaled approximately 1.8 million pounds, over the five
year period from 1972-1977.
Although EPA asserts that the PRPs are jointly and severally
responsible under CERCLA for the costs of response at the site, EPA has
prepared a volumetric ranking of those who allegedly sent material to the site
during 1972-77 period. Under that ranking, EPA has advocated an allocation of
percentages among the parties which results in a percentage attributed to the
Company of 0.877%. Such number, however, has not been agreed to by the
Company or other PRPs as a basis for allocating responsibility at this site.
In addition to EPA's claims, the Department of the Interior ("DOI") has
asserted a natural resources damage claim which it indicated it would be
willing to settle for a total payment of approximately $2.2 million. To date,
the State natural resource trustees have not asserted claims arising from
impacts on State-protected natural resources. Similarly, the Pennsylvania
Department of Environmental Resources ("DER") has allegedly incurred costs of
investigation and response at the site. DER has indicated that it may assert
a claim for such costs, but has not yet formally asserted such a claim or
stated the amount of the alleged expenditures.
The Company and 37 other PRPs have signed a PRP Organization
Agreement, forming a PRP Group to respond to claims which may be asserted by
EPA, DOI, DER and others. In January 1995, EPA indicated its willingness to
enter into negotiations with the PRP Group with respect to a possible
"cash-out" settlement of liabilities arising from the site. A negotiating
team has been appointed by the PRP Group, but negotiations have not yet been
scheduled.
Under the circumstances, the Company is not able to predict the
probability of a favorable or unfavorable outcome, or the amount of potential
loss in the event of any unfavorable outcome.
(h) Eighteen complaints naming the Company have been filed in the
District Courts of Jefferson, Ector and Harris Counties, Texas, by individual
plaintiffs alleging silicosis arising from exposure to industrial sand used
for abrasive blasting which was marketed by the Company from 1988 to 1994.
The Company is but one of from 20-40 defendants named in each case. The
earliest of these cases was filed in May 1994; the most recent was filed in
January 1995. The Company has been dismissed from one case and has settled
another for less than $10,000. Although the Company sold its industrial sand
business in November, 1994, the Company expects to be served in additional
cases in the future, but does not expect at this time that settlements or
adverse judgments, if any, will adversely affect the consolidated financial
position of the Company to a material extent.
Page 12
(i) On October 5, 1994, the Company received an Administrative
Complaint, Findings of Violation, Notice of Proposed Assessment of a Civil
Penalty and Notice of Opportunity to Request a Hearing Thereon (the
"Complaint") from the EPA alleging that the Company violated various
provisions of the Clean Water Act at its Geismar, Louisiana, facility. The
Complaint proposes to issue a final order assessing civil penalties in the
amount of $125,000. The Company has requested a hearing to contest certain of
the violations alleged and the amount of the penalty, but no hearing date has
yet been set. The Company and EPA are presently engaged in settlement
negotiations and the Company believes that this matter may be settled for
substantially less than the proposed civil penalty amount.
(j) On October 6, 1994, a complaint was filed in the United States
District Court for the Western District of Oklahoma by 325 individual
plaintiffs against 70 defendants, including the Company. Plaintiffs alleged
personal injuries and damages arising from exposure to chemicals, solvents,
minerals and metals in connection with plaintiffs' employment at Tinker Air
Force Base in Oklahoma City, Oklahoma. Plaintiffs sought $1.2 billion in
damages from all defendants. Settlement was mutually pursued and based on
that settlement, the action against the Company was dismissed with prejudice.
Due to the large number of individual plaintiffs, the Company has not yet
received executed final settlement agreements. Pursuant to the settlement
agreement, the amounts to be paid by the Company may not be disclosed, but the
amounts to be paid will not adversely affect the consolidated financial
position of the Company to a material extent.
(k) On November 14, 1994, the EPA filed a Complaint and Notice
of Opportunity for Hearing (the "Complaint") against the Company, alleging in
ten counts that the Company's Geismar, Louisiana, chemicals plant violated
both its PCB incineration permit issued under the Toxic Substance Control Act
(TSCA) and certain regulations promulgated pursuant to TSCA. The Complaint
seeks civil penalties in the amount of $158,775. The Company timely filed its
answer to the Complaint and has requested a hearing on this matter, but no
hearing date has yet been set.
(l) In 1987, the Company sold its former Neville Island,
Pennsylvania, detinning facility to AMG Resources Corporation. Under
the terms of the sale and subsequent agreements, the Company retained
responsibility for the assessment of environmental contamination at the
site, the preparation of a remediation plan for submission to appropriate
environmental agencies, and the implementation of the approved remediation
plan.
In 1991, the Company prepared and submitted to the Pennsylvania
Department of Environmental Resources ("DER") the results of an extensive site
investigation. Subsequently, the Company's independent consultants prepared a
remediation proposal, and on November 18, 1994, the Company presented its
remediation concept to DER representatives. At that time, DER indicated that
it was potentially willing to consider the proposed remediation concept, and
requested submission of certain additional information. DER further stated
that it intended to negotiate and enter into a Consent Order setting forth the
Company's remediation obligations at the Site. If such a Consent Order is not
agreed upon, it is considered probable that DER will assert claims with
respect to remediation of the site through issuance of a UAO. Under the
circumstances, the Company cannot predict the probability of a favorable or
unfavorable outcome, nor the amount of any costs in excess of current
reserves.
Page 13
Note 9, Other Commitments and Contingent Liabilities on page 47 of
the Company's 1994 Annual Report to Shareholders is hereby incorporated by
reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to the Company's security holders through the
solicitation of proxies or otherwise during the fourth quarter of 1994.
ITEM 4a. EXECUTIVE OFFICERS OF THE REGISTRANT
The names, positions and ages of the executive officers of the Company
are as follows:
NAME POSITION AGE
Herbert A. Sklenar Chairman, Chief Executive Officer and Director 63
William J. Grayson, Jr. Vice Chairman 64
Peter J. Clemens, II Senior Vice President, West - Construction
Materials Group 51
Guy K. Mitchell, Jr. Senior Vice President, East - Construction
Materials Group 46
Michael J. Ferris President, Chemicals Division 50
R. Morrieson Lord Senior Vice President, Human Resources 64
William F. Denson, III Vice President-Law and Secretary 51
Daniel F. Sansone Vice President-Finance and Treasurer 42
The principal occupations of the executive officers during the past
five years are set forth below:
Herbert A. Sklenar was elected President and Chief Executive Officer
in May 1986. He was elected to his present position in May 1992.
William J. Grayson, Jr., was elected Vice Chairman effective March 7,
1995. He served as Executive Vice President, Construction Materials Group,
prior thereto.
Peter J. Clemens, III, served as Senior Vice President, Finance, until
January 1, 1994, when he was appointed Senior Vice President-West,
Construction Materials Group.
Guy K. Mitchell, Jr., served as President, Chattanooga Division, until
May 1991, when he was appointed Senior Vice President-East, Construction
Materials Group.
Page 14
Michael J. Ferris was appointed President, Chemicals Division, in May
1987.
R. Morrieson Lord was elected Senior Vice President, Human
Resources, in April 1979.
William F. Denson, III, has served continuously as Secretary since
April 1981. He served as Assistant General Counsel until May 1992, when he
was elected Vice President and Assistant General Counsel, and was elected
Vice President-Law effective January 1, 1994.
Daniel F. Sansone served as Controller until May 1991, when he was
elected Vice President and Controller, and was elected Vice President-Finance
and Treasurer effective January 1, 1994.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
"Common Stock Market Prices and Dividends" on page 26 of the
Company's 1994 Annual Report to Shareholders is incorporated herein by
reference.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial Data" on page 23 of the Company's 1994 Annual
Report to Shareholders is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
"Management's Discussion and Analysis" on pages 27 through 35 and
"Financial Terminology" on page 51 of the Company's 1994 Annual Report to
Shareholders are incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following information relative to this item is included in the
Company's 1994 Annual Report to Shareholders on the pages shown below,
which are incorporated herein by reference:
PAGE
Financial Statements and Notes 38
Management's Responsibility for Financial Reporting and Internal Control 50
Independent Auditors' Report 50
Supplementary Information-Quarterly Financial Data (Unaudited) 36
Page 15
With the exception of the aforementioned information and the
information incorporated by reference in Items 1, 3, 5, 6, 7, 8 and 14, the
Company's 1994 Annual Report to Shareholders is not deemed filed as part of
this Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
No information is required to be included herein pursuant to Item
304 of Regulation S-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Within 120 days of the close of the Company's fiscal year on
December 31, 1994, the Company will file a definitive proxy statement with
the Securities and Exchange Commission pursuant to Regulation 14A (the
Company's "1995 Proxy Statement"). The information under the headings
"Election of Directors," "Nominees for Election to the Board of Directors" and
"Directors Continuing in Office" included in the 1995 Proxy Statement are
incorporated herein by reference. For the information required by Item 401 of
Regulation S-K concerning executive officers of the registrant, reference is
also made to the information provided in Part I, Item 4a, of this Annual
Report on Form 10-K. Based solely on a review of Forms 3 and 4 and amendments
thereto furnished to the Company pursuant to Rule 240.16a-3(e) during 1994,
and of Form 5 and amendments thereto furnished to the Company pursuant to Rule
240.16a-3(e) with respect to 1994, the Company has identified certain persons
subject to Section 16(a) of the Securities Exchange Act of 1934 who failed to
file on a timely basis required forms. Information concerning such failures
under the heading "Compliance with the Securities Exchange Act" included in
the Company's 1995 Proxy Statement is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information under the headings "Compensation of Directors,"
"Executive Compensation," "Shareholder Return Performance Presentation,"
"Retirement Income Plan" and "Employee Special Severance Plan" included in
the Company's 1995 Proxy Statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The information under the headings "Security Ownership of Certain
Beneficial Owners" and "Security Holdings of Management" included in the
Company's 1995 Proxy Statement is incorporated herein by reference.
Page 16
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No information is required to be included herein pursuant to Item
404 of Regulation S-K, which requires disclosure of certain information with
respect to certain relationships or related transactions of the directors and
management.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) FINANCIAL STATEMENTS
The following financial statements are included in the Company's
1994 Annual Report to Shareholders on the pages shown below and are
incorporated herein by reference:
PAGE
Consolidated Statements of Earnings 38
Consolidated Balance Sheets 39
Consolidated Statements of Cash Flows 40
Consolidated Statements of Shareholders' Equity 41
Notes to Financial Statements 42
Management's Responsibility for Financial Reporting and
Internal Control 50
Independent Auditors' Report 50
Supplementary Information-Quarterly Financial Data
(Unaudited) 36
(a) (2) FINANCIAL STATEMENT SCHEDULES
The following financial statement schedule for the years ended
December 31, 1994, 1993 and 1992 is included in Part IV of this report on the
indicated pages:
Schedule II Valuation and Qualifying Accounts and Reserves 21
Other schedules are omitted because of the absence of conditions
under which they are required or because the required information is provided
in the financial statements or notes thereto.
Financial statements (and summarized financial information) of
50% or less owned entities accounted for by the equity method have been
omitted because they do not, considered individually or in the aggregate,
constitute a significant subsidiary.
Page 17
(a) (3) EXHIBITS
The exhibits required by Item 601 of Regulation S-K and indicated below,
other than Exhibits (11) and (12) which are on pages 22 and 23 of this report,
are either incorporated by reference herein or accompany the copies of this
report filed with the Securities and Exchange Commission and the New York
Stock Exchange. Copies of such exhibits will be furnished to any requesting
shareholder of the Company upon payment of the costs of copying and
transmitting the same.
(3)(i) Certificate of Incorporation (Restated 1988) of the Company.
Exhibit 3(a) to the Company's 1988 Form 10-K Annual Report is incorporated
herein by reference (File No. 1-4033).
(3)(ii) By-laws of the Company, as restated February 2, 1990, and as last
amended March 5, 1995. (pages 29 through 48 of the bound exhibits)
(4) Exhibits 1 (Distribution Agreement by and among the Company,
Goldman, Sachs & Co., Lehman Brothers and Salomon Brothers Inc) and 4
(Indenture by and between the Company and Morgan Guaranty Trust Company of
New York) to the Form S-3 filed with the Securities and Exchange Commission by
the Company on May 2, 1991, and registering $200,000,000 in debt securities is
incorporated herein by reference. Form 8-K Report filed with the Securities
and Exchange Commission by the Company on May 14, 1991, is incorporated herein
by reference. The Company hereby agrees to furnish the Securities and
Exchange Commission, upon request, all instruments defining the rights of
holders of its other long-term debt or that of any of its consolidated
subsidiaries.
(10)(a) The Management Incentive Plan of the Company, as last amended
and restated. Exhibit 10(a) to the Company's 1989 Form 10-K Annual Report
is incorporated herein by reference (File No. 1-4033).*
(10)(b) The 1981 Long-Range Performance Share Plan of the Company,
as last amended and restated. Exhibit 10(b) to the Company's 1989 Form
10-K Annual Report is incorporated herein by reference (File No. 1-4033).*
(10)(c) The 1991 Long-Range Performance Share Plan of the Company.
Exhibit A to the Company's definitive proxy statement for the annual meeting
of its shareholders held May 16, 1991 ("1991 Proxy Statement"), is
incorporated herein by reference (File No. 1-4033).*
(10)(d) The Plan for Directors Emeriti and Other Eligible Directors, as
last amended and restated. Exhibit 10(c) to the Company's 1990 Form 10-K
Annual Report is incorporated herein by reference (File No. 1-4033).*
(10)(e) The Unfunded Supplemental Benefit Plan for Salaried Employees.
Exhibit 10(d) to the Company's 1989 Form 10-K Annual Report is
incorporated herein by reference (File No. 1-4033).*
Page 18
(10)(f) The Deferred Compensation Plan for Directors Who Are Not
Employees of the Company, as last amended and restated on December 8,
1992. Exhibit A to the Company's definitive proxy statement for the annual
meeting of its shareholders held May 20, 1993 is incorporated herein by
reference.*
(10)(g) The 1983 Long-Term Incentive Plan, as last amended and restated.
Exhibit 10(f) to the Company's 1989 Form 10-K Annual Report is
incorporated herein by reference (File No. 1-4033).*
(10)(h) The Stock Plan for Nonemployee Directors. Exhibit B to the
Company's 1991 Proxy Statement is incorporated herein by reference (File No.
1-4033).*
(10)(i) The Employee Special Severance Plan of the Company. Exhibit
10(g) to the Company's 1989 Form 10-K Annual Report is incorporated herein
by reference (File No. 1-4033).*
(11) Computation of Earnings Per Share for the five years ended
December 31, 1994. (page 22 of this report)
(12) Computation of Ratio of Earnings to Fixed Charges for the five years
ended December 31, 1994. (page 23 of this report)
(13) The Company's 1994 Annual Report to Shareholders. (pages 49
through 116 of the bound exhibits)
(21) List of the Company's subsidiaries as of December 31, 1994. (page
117 of the bound exhibits)
(24) Powers of Attorney for all directors whose names are signed to this
report pursuant to such Powers of Attorney. (pages 118 through 127 of the
bound exhibits)
(27) Financial Data Schedule (electronic filing only)
Information, financial statements and exhibits required by Form 11-K with
respect to the Company's Thrift Plan for Salaried Employees, Construction
Materials Divisions Hourly Employees Savings Plan and Chemicals Division
Hourly Employees Savings Plan, for the fiscal year ended December 31, 1994,
will be filed as one or more amendments to this Form 10-K on or before June
29, 1995, as permitted by Rule 15d-21 under the Securities Exchange Act of
1934.
* Management Contract or Compensatory Plan.
(b) REPORTS ON FORM 8-K
None.
Page 19
INDEPENDENT AUDITORS' REPORT
Vulcan Materials Company:
We have audited the consolidated financial statements of Vulcan Materials
Company and its subsidiary companies as of December 31, 1994, 1993 and 1992
and for the years then ended, and have issued our report thereon dated
February 3, 1995; such consolidated financial statements and report are
included in your 1994 Annual Report to Shareholders and are incorporated
herein by reference. Our audits also included the consolidated financial
statement schedule of Vulcan Materials Company and its subsidiary companies,
listed in Item 14. This consolidated financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express
an opinion based on our audits. In our opinion, such consolidated financial
statement schedule, when considered in relation to the basic consolidated
financial statements as a whole, presents fairly in all material respects the
information shown therein.
DELOITTE & TOUCHE LLP
Birmingham, Alabama
February 3, 1995
Page 20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
VULCAN MATERIALS COMPANY
(Registrant)
March 29, 1995 By /s/ H. A. Sklenar
Date H. A. Sklenar
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ H. A. Sklenar Chairman, Chief Executive March 29, 1995
H. A. Sklenar Officer and Director
(Principal Executive Officer)
/s/ D. F. Sansone Vice President-Finance and Treasurer March 29, 1995
D. F. Sansone (Principal Financial Officer and
Principal Accounting Officer)
The following directors:
Marion H. Antonini Director
Livio D. DeSimone Director
William J. Grayson, Jr. Director
John K. Greene Director
Richard H. Leet Director
Douglas J. McGregor Director
Ann D. McLaughlin Director
Page 24
James V. Napier Director
Donald B. Rice Director
Orin R. Smith Director
By /s/ William F. Denson, III March 29, 1995
William F. Denson, III
Attorney-in-Fact for
each of the ten
directors listed above
Page 25
EX-3
2
BY-LAWS
BY - LAWS
VULCAN MATERIALS COMPANY
(Incorporated under the laws of the State of New Jersey)
Restated: February 2, 1990
Amended: June 27, 1990
March 27, 1991
February 5, 1992
(eff. 5/11/92)
May 11, 1992
December 8, 1992
February 12, 1993
March 5, 1995
Page 29
I N D E X
Page
ARTICLE I Shareholders' Meetings
Section 1.1 Annual Meetings 1
Section 1.2 Special Meetings 1
Section 1.3 Notice and Purpose of Meetings 1
Section 1.4 Quorum and Adjournments 1
Section 1.5 Organization 2
Section 1.6 Voting 2
Section 1.7 Selection of Inspectors 3
Section 1.8 Duties of Inspectors 3
ARTICLE II Directors
Section 2.1 Number, Qualification, Tenure, Term,
Quorum, Vacancies, Removal
(a) Number, Qualification and Tenure 4
(b) Term 4
(c) Quorum 5
Section 2.2 Meetings of the Board of Directors 5
Section 2.3 Committees of the Board of Directors 6
Section 2.4 Participation in Meetings by Means of
Conference Telephone or Similar
Instrument 7
Section 2.5 Action of Board of Directors and
Committees Without a Meeting 7
Section 2.6 Dividends 7
Section 2.7 Conflict of Interest 8
ARTICLE III Officers
Section 3.1 (a) Corporate Officers 8
(b) Group Officers 8
(c) Division Officers 9
Section 3.2 (a) Term and Removal of Officers
of the Corporation 9
(b) Term and Removal of Group
and Division Officers 9
Section 3.3 (a) Chairman of the Board 9
(b) Vice Chairman 10
Section 3.4 President 10
Section 3.5 Vice Presidents 10
Section 3.6 General Counsel 10
Section 3.7 Secretary 11
Section 3.8 Treasurer 11
Section 3.9 Controller 11
Section 3.10 Other Officers 11
Section 3.11 Voting Corporation's Securities 11
Page 30
ARTICLE IV Indemnification of Directors, Officers
and Employees 12
ARTICLE V Certificates of Stock
Section 5.1 Transfer of Shares 14
Section 5.2 Transfer Agent and Registrar 14
Section 5.3 Fixing Record Date 14
Section 5.4 Lost, Stolen or Destroyed Certificates 14
ARTICLE VI Miscellaneous
Section 6.1 Fiscal Year 15
Section 6.2 Corporate Seal 15
Section 6.3 Delegation of Authority 15
Section 6.4 Notices 15
ARTICLE VII By-Laws and Their Amendments 16
ARTICLE VIII National Emergency 16
(ii)
Page 31
ARTICLE I
Shareholders' Meetings
SECTION 1.1. Annual Meetings
(a) The annual meeting of the shareholders of the corporation
may be held at such place within or without the State of New Jersey
as may be fixed by the Board of Directors, at 10 a.m., local time, or
at such other hour as may be fixed by the Board of Directors, on
such day in April or May of each year as may be fixed by the Board
of Directors, for the purpose of electing directors and for the
transaction of such other business as may properly be brought before
the meeting.
(b) If the annual meeting for the election of directors is not
held in one of the months set forth in Section 1.1(a), the Board of
Directors shall cause the meeting to be held as soon thereafter as
convenient.
SECTION 1.2. Special Meetings
(a) Special meetings of the shareholders may be called by the
Board of Directors, the chairman of the Board of Directors or the
chief executive officer.
(b) Special meetings shall be held at such time and date and
at such place as shall have been fixed by the Board of Directors, the
chairman of the Board of Directors or by the chief executive officer.
SECTION 1.3. Notice and Purpose of Meetings
Written notice of the time, place and purpose or purposes of every
meeting of shareholders shall be given, not less than ten nor more than 60
days before the meeting, either personally or by mail, to each shareholder
of record entitled to vote at the meeting.
SECTION 1.4. Quorum and Adjournments
(a) A quorum at all meetings of shareholders shall consist of
the holders of record of a majority of the shares of the issued and
outstanding capital stock of the corporation, entitled to vote thereat,
present in person or by proxy, except as otherwise provided by law
or the Certificate of Incorporation.
(b) A shareholders' meeting may be adjourned to another time
or place, and, if no new record date is fixed, it shall not be
necessary to give notice of the adjourned meeting if the time and
place to which the meeting is adjourned are
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announced at the meeting at which the adjournment is taken, and at the
adjourned meeting only such business is transacted as might have been
transacted at the original meeting. If after the adjournment a new
record date is fixed by the Board of Directors, notice of the
adjourned meeting shall be given to shareholders of record on the new
record date entitled to vote. Less than a quorum may adjourn the
meeting as herein provided.
SECTION 1.5. Organization
Meetings of the shareholders shall be presided over by the chief
executive officer, or, if he is not present, by a chairman to be chosen by a
majority of the shareholders entitled to vote who are present in person or by
proxy at the meeting. The Secretary of the corporation, or, in his or her
absence, an Assistant Secretary, shall act as secretary of every meeting, but
if neither the Secretary nor an Assistant Secretary is present, the meeting
shall choose any person present to act as secretary of the meeting.
SECTION 1.6. Voting
(a) At all meetings of the shareholders the voting need not be
by ballot, except that all elections for directors shall be by ballot,
and except that the voting shall be by ballot on all other matters
upon which voting by ballot is expressly required by the Certificate
of Incorporation or by the laws of the State of New Jersey.
(b) The poll at all elections of directors shall be open in
accordance with the laws of the State of New Jersey.
(c) Subject to the foregoing provisions, the right
of any shareholder to vote at a meeting of shareholders shall be
determined on the basis of the number of shares registered in his or
her name on the date fixed as the record date for said meeting.
(d) Except as otherwise provided by statute or these By-laws,
any matter submitted to a vote of shareholders shall be viva voce
unless the person presiding at the meeting determines that the
voting shall be by ballot or unless the circumstances are such that
the will of the holders of a majority of shares entitled to vote cannot
be determined with certainty and the holder of a share entitled to
vote or his or her proxy shall demand a vote by ballot. In either of
such events a vote by ballot shall be taken.
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SECTION 1.7. Selection of Inspectors
(a) The Board of Directors may in advance of any
shareholders' meeting or any proposed shareholder action without
a meeting appoint one or more inspectors to act at the meeting or
any adjournment thereof or to receive consents of shareholders. If
inspectors are not so appointed for a shareholders' meeting or shall
fail to qualify, the person presiding at the shareholders' meeting
may, and upon the request of any shareholder entitled to vote
thereat shall, make such appointment.
(b) In case any person appointed as inspector fails to appear
or act, the vacancy may be filled by appointment made by the Board
of Directors in advance of the meeting or at the meeting by the
person presiding.
(c) Each inspector, before entering upon the discharge of his
or her duties, shall take and sign an oath faithfully to execute the
duties of inspector at such meeting or in tabulating consents with
strict impartiality and according to the best of his or her ability.
(d) No person shall be elected a director in an election for
which he has served as an inspector.
SECTION 1.8. Duties of Inspectors
The inspectors shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting or the shares
entitled to consent, the existence of a quorum, the validity and effect of
proxies, and shall receive votes or consents, hear and determine all
challenges and questions arising in connection with the right to vote, count
and tabulate all votes or consents, determine the result, and do such acts as
are proper to conduct the election or vote or consents with fairness to all
shareholders. If there are three or more inspectors, the act of a majority
shall govern. On request of the person presiding at the meeting or any
shareholder entitled to vote thereat or of any officer, the inspectors shall
make a report in writing of any challenge, question or matter determined by
them. Any report made by them shall be prima facie evidence of the facts
therein stated, and such report shall be filed with the minutes of the
meeting.
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ARTICLE II
Directors
SECTION 2.1. Number, Qualification, Tenure, Term, Quorum,
Vacancies, Removal
(a) Number, Qualification and Tenure. The business and
affairs of the corporation shall be managed by or under the direction
of its Board of Directors, consisting of 11 persons. The number
may, from time to time, be increased or decreased by resolution
adopted by a majority of the entire Board of Directors, but the
number shall not be less than nine nor more than 21. Any
directorship to be filled by reason of an increase in the number of
directors may be filled by the affirmative vote of two-thirds of the
directors in office at the time. Directors shall be at least 25 years
of age and need not be United States citizens or residents of New
Jersey or shareholders of the corporation.
Any outside director shall retire from the Board of Directors at
the annual meeting next following their 70th birthday, regardless of
the term for which they might have been elected; provided, howeer,
that current outside directors who continue to serve until the annual
meeting next following their 68th birthday shall have the option to
retire then. Any outside director who ceases to hold the position
with the business or professional organization with which such
person was associated when most recently elected a director shall
automatically be deemed to have offered his or her resignation as
a director of the corporation, and the Director and Management
Succession Committee shall make a recommendation to the Board
of Directors with respect to such resignation; and, if the deemed
offer to resign is accepted by the Board of Directors, such
resignation shall be effective as of the next annual meeting of
shareholders.
Any inside director shall retire from the Board of Directors at
the annual meeting next following his or her 65th birthday; provided,
however, that any inside director who has served as chief executive
officer of the corporation and who has been requested by the Board
of Directors to do so shall serve until the next annual meeting
following his or her 67th birthday, but not thereafter.
An inside director is one who is or has been in the full-time
employment of the corporation, and an outside director is any other
director.
(b) Term. Directors shall be divided into three classes, with
the term of office of one class expiring each year. Except as
otherwise provided in the Certificate of Incorporation or these
By-laws, directors shall be chosen at annual
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meetings of the shareholders, and each director shall be chosen to
serve until the third succeeding annual meeting of shareholders
following his or her election and until his or her successor shall
have been elected and qualified.
(c) Quorum. A majority of the members of the Board of
Directors then acting, but, in no event less than one-third of the
entire Board of Directors, acting at a meeting duly assembled, shall
constitute a quorum for the transaction of business. Directors
having a personal or conflicting interest in any matter to be acted
upon may be counted in determining the presence of a quorum. If
at any meeting of the Board of Directors there shall be less than a
quorum present, a majority of those present may adjourn the
meeting, without further notice, from time to time until a quorum
shall have been obtained.
SECTION 2.2. Meetings of the Board of Directors
(a) Meetings of the Board of Directors shall be held at such
place within or without the State of New Jersey and at such time
and date as may from time to time be fixed by the Board of
Directors, or, if not so fixed, as may be specified in the notice
of the meeting. A meeting of the Board of Directors shall be held
without notice immediately after the annual meeting of the shareholders.
(b) Regular meetings of the Board of Directors shall be held
on such day of such months as may be fixed by the Board of
Directors. At any regular meeting of the Board of Directors any
business that comes before such meeting may be transacted except
where special notice is required by these By-laws.
(c) Special meetings of the Board of Directors may be held on
the call of the chairman of the Board of Directors, the chief
executive officer or any three directors.
(d) Notice of each regular meeting of the Board of Directors,
other than the meeting following the annual meeting of shareholders,
shall be given not less than seven days before the date on which such
regular meeting is to be held. Notice of each special meeting of the
Board of Directors shall be given to each member of the Board of
Directors not less than two days before the date upon which such meeting
is held. Notice of any such meeting may be given by mail, telegraph,
telephone, telex, facsimile transmission, personal service or by
personally advising the director orally. Notice of a meeting of the
Board of Directors may be waived in writing before or after the meeting.
Meetings may be held at any time without notice if all the directors are
present. Notice of special meetings of the Board of Directors shall
specify the purpose or purposes of the meeting. Neither the business to
be transacted nor the purpose or purposes of any meeting of the Board of
Directors need be specified in the notice of
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regular meetings or in the waiver of notice of any regular or special
meeting of the Board of Directors.
(e) Notice of an adjourned meeting of the Board of Directors
need not be given if the time and place are fixed at the meeting
adjourning and if the period of adjournment does not exceed ten
days in any one adjournment.
SECTION 2.3. Committees of the Board of Directors
(a) The Board of Directors, by resolution adopted by a
majority of the entire Board of Directors, may appoint from among
its members an Executive Committee and one or more other
committees, each of which shall have at least three members. To
the extent provided in such resolution each such committee shall
have and may exercise all the authority of the Board of Directors,
except as expressly limited by the New Jersey Business Corporation
Act.
(b) The Board of Directors, by resolution adopted by a
majority of the entire Board of Directors, may: (1) fill any vacancy
in any such committee; (2) appoint one or more directors to serve
as additional members of any such committee; (3) appoint one or
more directors to serve as alternate members of any such
committee, to act in the absence or disability of members of any
such committee with all the powers of such absent or disabled
members; (4) abolish any such committee at its pleasure; and (5)
remove any director from membership on such committee at any
time, with or without cause.
(c) The Executive Committee shall meet at such time or times,
and at such place within or outside the State of New Jersey, as it
shall designate or, in the absence of such designation, as shall be
designated by the person or persons calling the meeting; and it shall
make its own rules of procedure. Meetings may be held at any time
without notice if all members of the Executive Committee are
present, or if at any time before or after the meeting those not
present waive notice of the meeting in writing. A majority of the
members of the Executive Committee shall constitute a quorum
thereof, but at any meeting of the Committee at which all the
members are not present no action shall be taken except by the
unanimous vote of those present.
(d) Meetings of any committee may be called by the chairman
of the Board of Directors, the chief executive officer, the chairman
of the committee, by any two members of the committee or as
provided in the resolution appointing the committee. Notice of such
meeting shall be given to each member of the committee by mail,
telegraph, telephone, telex, facsimile transmission, personal service
or by personally advising the member orally. Said notice shall state the
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time and place of any meeting of any such committee and shall be fixed
by the person or persons calling the meeting.
(e) Actions taken at a meeting of any committee shall be
reported to the Board of Directors at its next meeting following such
committee meeting; except that, when the meeting of the Board of
Directors is held within two days after the committee meeting, such
report shall, if not made at the first meeting, be made to the Board
of Directors at its second meeting following such committee
meeting.
SECTION 2.4. Participation in Meetings by Means of Conference
Telephone or Similar Instrument
Where appropriate communication facilities are available, any or all
directors may participate in all or any part of a meeting of the Board of
Directors or in a meeting of any committee of the Board of Directors by means of
a conference telephone or any means of communication by which the persons
participating in the meeting are able to hear each other as though he was or
they were present in person at such meeting. Such participation without
propesting prior to the conclusion of such participation the lack of notice of
such meeting shall constitute a waiver of notice by such participating director
or directs with respect to business transacted during such participation.
SECTION 2.5. Action of Board of Directors and Committees
Without a Meeting
Any action required or permitted to be taken pursuant to authorization
voted at a meeting of the Board of Directors or any committee of the Board of
Directors may be taken without a meeting if, prior or subsequent to such
action, all members of the Board of Directors or of such committee, as the
case may be, consent thereto in writing and such written consents are filed
with the minutes of the proceedings of the Board of Directors or committee.
SECTION 2.6. Dividends
Subject to the provisions of the laws of the State of New Jersey and the
Certificate of Incorporation, the Board of Directors shall have full power to
determine whether any and, if any, what part of any funds of the corporation
shall be declared in dividends and paid to shareholders; the division of the
whole or any part of such funds of the corporation shall rest wholly within
the lawful discretion of the Board of Directors, and it shall not be required
at any time, against such discretion, to divide or pay any part of such funds
among or to the shareholders as dividends or otherwise, and the Board of
Directors may fix a sum which may be set aside or reserved over and above the
capital paid in of the corporation as working capital for the corporation or
as a reserve for any proper purpose, and from time to time may increase,
diminish and vary the same in its absolute judgment and discretion.
Page 38
SECTION 2.7. Conflict of Interest
No contract or other transaction between the corporation and one or more
of its directors, or between the corporation and any domestic or foreign
corporation, firm or association of any type or kind in which one or more of
its directors are directors or are otherwise interested, shall be void or
voidable solely by reason of such common directorship or interest, or solely
because such director or directors are present at the meeting of the Board of
Directors or a committee thereof which authorizes or approves the contract or
transaction, or solely because his or their votes are counted for such
purpose, if any of the following is true: (1) the contract or other
transaction is fair and reasonable as to the corporation at the time it is
authorized, approved or ratified; or (2) the fact of the common directorship
or interest is disclosed or known to the Board of Directors or committee and
the Board of Directors or committee authorizes, approves, or ratifies the
contract by unanimous written consent, provided at least one director so
consenting is disinterested, or by the affirmative vote of a majority of the
disinterested directors, even though the disinterested directors be less than
a quorum; or (3) the fact of the common directorship or interest is disclosed
or known to the shareholders, and they authorize, approve or ratify the
contract or transaction.
The Board of Directors, by the affirmative vote of a majority of directors
in office and irrespective of any personal interest of any of them, shall have
authority to establish reasonable compensation of directors for services to the
corporation as directors, officers or otherwise.
ARTICLE III
Officers
SECTION 3.1
(a) Corporate Officers. Each year promptly after the annual
meeting of the shareholders, the Board of Directors shall elect a
Chairman of the Board, a President, one or more Vice Presidents,
with such designations, if any, as it may determine, a General
Counsel, a Secretary, a Treasurer, and a Controller, and from time
to time may elect or appoint one or more Assistants to any of such
officers, and such one or more Assistant Secretaries, Assistant
Treasurers, and Assistant Controllers, and such other officers,
agents, and employees, and with such designations, as it may deem
proper. Any two or more offices may be concurrently held by the
same person at the same time. The Chairman of the Board and the
President shall be chosen from among the directors.
(b) Group Officers. The chief executive officer of the
corporation may appoint such officers of any group of the
corporation as he may deem proper, except that group senior vice
presidents may be appointed only by the Board of Directors. A
group officer shall not be an officer of the corporation, and shall
serve as an officer only of the group to which he is appointed, but
a person who
Page 39
holds a group office may also hold a corporate office or a division
office, or both.
(c) Division Officers. The chief executive officer of the
corporation may appoint such officers of any division of the
corporation as he may deem proper, except that division chairmen
and presidents may be appointed only by the Board of Directors. A
division officer shall not be an officer of the corporation, and shall
serve as an officer only of the division to which appointed, but a
person who holds a division office may also hold a corporate office
or a group office, or both.
SECTION 3.2
(a) Term and Removal of Officers of the Corporation. The
term of office of all officers shall be one year and until their
respective successors are elected and qualify, but any officer may be
removed from office, either with or without cause, at any time, by
the affirmative vote of a majority of the members of the Board of
Directors then in office.
(b) Term and Removal of Group and Division Officers. Group
senior vice presidents and division chairmen and presidents shall
serve at the pleasure of the Board of Directors. Group senior vice
presidents and division chairmen and presidents may be removed
from office, either with or without cause, at any time, by the Board
of Directors. Other group and division officers shall serve at the
pleasure of the chief executive officer of the corporation. Any
other group or division officer may be removed from office as a
group or division officer, either with or without cause, at any time,
by the chief executive officer of the corporation.
SECTION 3.3.
(a) Chairman of the Board. The Chairman of the Board may execute
bonds, mortgages, and bills of sale, assignments, conveyances, and all other
contracts, except those required by law to be otherwise signed and executed,
or except when the signing and execution thereof when permitted by law shall
be expressly delegated by the Board of Directors to some other officer or
agent of the corporation. The Chairman of the Board shall preside at all
meetings of the Board of Directors. The Chairman of the Board shall serve as
the chief executive officer of the corporation responsible to the Board of
Directors for planning and directing the business of the corporation and for
initiating and directing those actions essential to its profitable growth and
development and shall perform such other duties as may be assigned to him by
the Board of Directors. The Chairman of the Board shall serve as an ex
officio member (nonvoting) of all committees of the Board of Directors of
which he is not otherwise a member.
Page 40
(b) Vice Chairman. The Vice Chairman may execute bonds, mortgages,
and bills of sale, assignments, conveyances, and all other contracts, except
those required by law to be otherwise signed and executed, or except when the
signing and execution thereof when permitted by law shall be expressly
delegated by the Board of Directors to some other officer or agent of the
corporation. The Vice Chairman shall advise and counsel with the Chairman of
the Board, and with other officers of the corporation on any or all activities
in which the corporation may engage, and shall perform such other duties as
may be assigned to him by the Chairman of the Board or the Board of
Directors.
SECTION 3.4. President
The President may execute bonds, mortgages, and bills of sale, assignments,
conveyances, and all other contracts, except those required by law to be
otherwise signed and executed, or except when the signing and execution
thereof when permitted by law shall be expressly delegated by the Board of
Directors to some other officer or agent of the corporation. The President
shall serve as the chief operating officer of the corporation and, subject to
the authority and direction of the Chairman of the Board, the President shall
have general and active management of the operating affairs of the corporation
and shall carry into effect the resolutions of the Board of Directors and the
orders of the Chairman of the Board with respect to the operating affairs of
the corporation.
SECTION 3.5. Vice Presidents
Each Vice President of the corporation may execute bonds, mortgages,
bills of sale, assignments, conveyances, and all other contracts, except
where required by law to be otherwise signed and executed. Each Vice
President of the corporation shall perform such functions for the corporation
as may be designated by the chief executive officer of the corporation, and
shall carry into effect the resolutions of the Board of Directors and the
orders of the chief executive officer of the corporation with respect to such
functions.
SECTION 3.6. General Counsel
The General Counsel shall be the chief legal officer of the corporation
and shall have overall responsibility for all legal affairs of the
corporation. The General Counsel shall have management responsibility for the
corporation's legal department and its relationships with outside counsel.
The General Counsel's duties shall include providing legal advice to corporate
and division officers, confirming compliance with applicable laws, overseeing
litigation, reviewing significant agreements, participating in important
negotiations, and selecting all outside counsel. He shall perform such other
functions for the corporation as may be designated by the Board of Directors
or the chief executive officer.
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SECTION 3.7. Secretary
The Secretary shall keep or cause to be kept the minutes of all meetings
of the shareholders, of the Board of Directors, of the Executive Committee,
and unless otherwise directed by the Board of Directors, the minutes of
meetings of other committees of the Board of Directors. He shall attend to
the giving or serving of all notices required to be given by law or by the
By-laws or as directed by the Board of Directors or the chief executive
officer of the corporation. He shall have custody of the seal of the
corporation and shall have authority to affix or cause the same or a facsimile
thereof to be affixed to any instrument requiring the seal and to attest the
same. He shall perform such other functions for the corporation as may be
designated by the Board of Directors or the chief executive officer of the
corporation.
SECTION 3.8. Treasurer
The Treasurer shall be responsible for safeguarding the cash and
securities of the corporation and shall keep or cause to be kept a full and
accurate account of the receipts and disbursements of the corporation. He
shall perform such other functions for the corporation as may be designated by
the Board of Directors or the chief executive officer of the corporation.
SECTION 3.9. Controller
The Controller shall be the principal accounting officer of the
corporation, shall have supervision over the accounting records of the
corporation and shall be responsible for the preparation of financial
statements. He shall perform such other functions for the corporation as may
be designated by the Board of Directors or by the chief executive officer of
the corporation.
SECTION 3.10. Other Officers
The other officers of the corporation shall have such powers and duties
as generally pertain to their respective offices as well as such powers and
duties as from time to time may be designated by the Board of Directors or by
the chief executive officer of the corporation.
SECTION 3.11. Voting Corporation's Securities
Unless otherwise ordered by the Board of Directors, the chief executive
officer or his or her delegate, or, in the event of his or her inability to
act, such other officer as may be designated by the Board of Directors to act
in the absence of the chief executive officer shall have full power and
authority on behalf of the corporation to attend and to act and to vote, and
to execute a proxy or proxies empowering others to attend and to act and to
vote, at any meetings of security holders of the corporations in which the
corporation may hold securities, and at such meetings the chief executive
officer or such other officer of the corporation, or such proxy, shall possess
and may exercise any and all rights and powers incident to the ownership
Page 42
of such securities, and which as the owner thereof the corporation might have
possessed and exercised, if present. The Secretary or any Assistant Secretary
may affix the corporate seal to any such proxy or proxies so executed by the
chief executive officer or such other officer and attest the same. The Board
of Directors by resolution from time to time may confer like powers upon any
other person or persons.
ARTICLE IV
Indemnification of Directors, Officers and Employees
(a) Subject to the provisions of this Article IV, the
corporation shall indemnify the following persons to the fullest
extent permitted and in the manner provided by and the circum-
stances described in the laws of the State of New Jersey, including
Section 14A:3-5 of the New Jersey Business Corporation Act and
any amendments thereof or supplements thereto: (i) any person
who is or was a director, officer, employee or agent of the
corporation; (ii) any person who is or was a director, officer,
employee or agent of any constituent corporation absorbed by the
corporation in a consolidation or merger, but only to the extent that
(a) the constituent corporation was obligated to indemnify such
person at the effective date of the merger or consolidation or (b) the
claim or potential claim of such person for indemnification was
disclosed to the corporation and the operative merger or
consolidation documents contain an express agreement by the
corporation to pay the same; (iii) any person who is or was serving
at the request of the corporation as a director, officer, trustee,
fiduciary, employee or agent of any other domestic or foreign
corporation, or any partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise, whether or not for
profit; and (iv) the legal representative of any of the foregoing
persons (collectively, a "Corporate Agent").
(b) Anything herein to the contrary notwithstanding, the
corporation shall not be obligated under this Article IV to provide
indemnification (i) to any bank, trust company, insurance company,
partnership or other entity, or any director, officer, employee or
agent thereof or (ii) to any other person who is not a director,
officer or employee of the corporation, in respect of any service by
such person or entity, whether at the request of the corporation or
by agreement therewith, as investment advisor, actuary, custodian,
trustee, fiduciary or consultant to any employee benefit plan.
(c) To the extent that any right of indemnification granted
hereunder requires any determination that a Corporate Agent shall
have been successful on the merits or otherwise in any Proceeding
(as hereinafter defined) or in defense of any claim, issue or matter
therein, the Corporate Agent shall be deemed to
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have been "successful" if, without any settlement having been made by the
Corporate Agent, (i) such Proceeding shall have been dismissed or
otherwise terminated or abandoned without any judgment or order having
been entered against the Corporate Agent, (ii) such claim, issue or other
matter therein shall have been dismissed or otherwise eliminated or
abandoned as against the Corporate Agent, or (iii) with respect to any
threatened Proceeding, the Proceeding shall have been abandoned or there
shall have been a failure for any reason to institute the Proceeding
within a reasonable time after the same shall have been threatened or
after any inquiry or investigation that could have led to any such
Proceeding shall have been commenced. The Board of Directors or any
authorized committee thereof shall have the right to determine what
constitutes a "reasonable time" or an "abandonment" for purposes of this
paragraph (c), and any such determination shall be conclusive and final.
(d) To the extent that any right of indemnification granted
hereunder shall require any determination that the Corporate Agent
has been involved in a Proceeding by reason of his or her being or
having been a Corporate Agent, the Corporate Agent shall be
deemed to have been so involved if the Proceeding involves action
allegedly taken by the Corporate Agent for the benefit of the
corporation or in the performance of his or her duties or the course
of his or her employment for the corporation.
(e) If a Corporate Agent shall be a party defendant in a
Proceeding, other than a Proceeding by or in the right of the
corporation, and the Board of Directors or a duly authorized
committee of disinterested directors shall determine that it is in the
best interests of the corporation for the corporation to assume the
defense of any such Proceeding, the Board of Directors or such
committee may authorize and direct that the corporation assume the
defense of the Proceeding and pay all expenses in connection
therewith without requiring such Corporate Agent to undertake to
pay or repay any part thereof. Such assumption shall not affect the
right of any such Corporate Agent to employ his or her own counsel
or to recover indemnification under this By-law to the extent that he
may be entitled thereto.
(f) As used herein, the term "Proceeding" shall mean and
include any pending, threatened or completed civil, criminal,
administrative or arbitrative action, suit or proceeding, and any
appeal therein and any inquiry or investigation which could lead to
such action, suit or proceeding.
(g) The right to indemnification granted under this Article
IV shall not be exclusive of any other rights to which any Corporate
Agent seeking indemnification hereunder may be entitled.
Page 44
ARTICLE V
Certificates of Stock
SECTION 5.1. Transfer of Shares
Stock of the corporation shall be transferable in accordance with the
provisions of Chapter 8 of the Uniform Commercial Code as adopted in New
Jersey (N.J.S. 12A:8-101, et seq.) as amended from time to time, except as
otherwise provided in the New Jersey Business Corporation Act.
SECTION 5.2. Transfer Agent and Registrar
The Board of Directors may appoint one or more transfer agents and one
or more registrars of transfers and may require all stock certificates to bear
the signatures of such transfer agent and registrar, one of which signatures
may be a facsimile.
SECTION 5.3. Fixing Record Date
For the purpose of determining the shareholders entitled to notice of or
to vote at any meeting of shareholders or any adjournment thereof, or to
express consent to or dissent from any proposal without a meeting, or for the
purpose of determining shareholders entitled to receive payment of any
dividend or allotment of any right, or for the purpose of any other action,
the Board of Directors may fix, in advance, a date as the record date for any
such determination of shareholders. Such date shall not be more than 60 nor
less than ten days before the date of such meeting, nor more than 60 days
prior to any other action.
SECTION 5.4. Lost, Stolen or Destroyed Certificates
(a) Where a certificate for shares has been lost, apparently
destroyed, or wrongfully taken and the owner thereof fails to so
notify the corporation or the transfer agent of that fact within a
reasonable time after he has notice of it and the transfer agent or
the corporation registers a transfer of the shares before receiving
such a notification, the owner shall be precluded from asserting
against the corporation any claim for registering the transfer of such
shares or any claim to a new certificate.
(b) Subject to the foregoing, where the owner of shares claims
that the certificate representing shares has been lost, destroyed or
wrongfully taken, the corporation shall issue a new certificate in
place of the original certificate if the owner thereof requests the
issue of a new certificate before the corporation has notice that the
certificate has been acquired by a bona fide purchaser, makes proof
in affidavit form, satisfactory to the Secretary or Assistant Secretary
of the corporation and to its transfer agent, of his or her ownership
of the shares
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represented by the certificate and that the certificate has been lost,
destroyed or wrongfully taken; files an indemnity bond for an open or
unspecified amount or if authorized in a specific case by the
corporation, for such fixed amount as the chief executive officer, or a
Vice President, or the Secretary of the corporation may specify, in such
form and with such surety as may be approved by the transfer agent and
the Secretary or Assistant Secretary of the corporation, indemnifying the
corporation and the transfer agent and registrar of the corporation
against all loss, cost and damage which may arise from issuance of a new
certificate in place of the original certificate; and satisfies any other
reasonable requirements imposed by the corporation or transfer agent. In
case of the surrender of the original certificate, in lieu of which a new
certificate has been issued, or the surrender of such new certificate,
for cancellation, the bond of indemnity given as a condition of the
issuance of such new certificate may be surrendered.
ARTICLE VI
Miscellaneous
SECTION 6.l. Fiscal Year
The fiscal year of the corporation shall begin on the first day of
January in each year and shall end on the 31st day of December next following,
unless otherwise determined by the Board of Directors.
SECTION 6.2. Corporate Seal
The corporate seal of the corporation shall have inscribed thereon the
name of the corporation, the year 1956 and the words "Corporate Seal, New
Jersey."
SECTION 6.3. Delegation of Authority
Any provision of these By-laws granting authority to the Board of
Directors shall not be construed as indicating that such authority may not be
delegated by the Board of Directors to a committee to the extent authorized by
the New Jersey Business Corporation Act and these By-laws.
SECTION 6.4 Notices
In computing the period of time for the giving of any notice required or
permitted for any purpose, the day on which the notice is given shall be
excluded and the day on which the matter noticed is to occur shall be
included. If notice is given by mail, telegraph, telex or
Page 46
facsimile transmission, the notice shall be deemed to be given when deposited
in the mail, delivered to the telegraph or telex office or transmitted via
facsimile transmitter, addressed to the person to whom it is directed at his
or her last address as it appears on the records of the corporation, with
postage or charges prepaid thereon; provided, however, that notice must be
given by telegraph, telephone, telex, facsimile transmission, personal service
or by personally advising the person orally when, as authorized in these
By-laws, less than three days' notice is given. Notice to a shareholder shall
be addressed to the address of such shareholder as it appears on the stock
transfer records of the corporation.
ARTICLE VII
By-Laws and Their Amendments
Subject to the rights, if any, of the holders of any series of Preference
Stock then outstanding, the By-laws of the corporation shall be subject to
alteration, amendment or repeal, and new By-laws not inconsistent with any
provisions of the Certificate of Incorporation and not inconsistent with the
laws of the State of New Jersey may be made, either by the affirmative vote of
a majority of the votes cast at any annual or special meeting of shareholders
by the holders of shares entitled to vote thereon, or, except with respect to
By-laws adopted by the shareholders of the corporation which by their terms
may not be altered, amended or repealed by the Board of Directors, by the
affirmative vote of a majority of the whole Board of Directors at any regular
or special meeting of the Board of Directors, provided that notice of the
proposal so to make, alter, amend or repeal such By-laws be included in the
notice of such meeting of the shareholders or of the Board of Directors, as
the case may be.
ARTICLE VIII
National Emergency
For the purpose of this Article VIII a national emergency is hereby
defined as any period following an enemy attack on the continental United
States of America or any nuclear or atomic disaster as a result of which and
during the period that communication or the means of travel among states in
which the corporation's plants or offices are disrupted or made uncertain or
unsafe. Persons not directors of the corporation may conclusively rely upon
a determination by the Board of Directors of the corporation, at a meeting
held or purporting to be held pursuant to this Article VIII that a national
emergency as hereinabove defined exists regardless of the correctness of such
determination. During the existence of a national emergency under the
foregoing provisions of this Article VIII the following provisions shall
become operative but no other provisions of these By-laws shall become
inoperative in such event unless directly in conflict with this Article VIII
or action taken pursuant hereto:
(a) When it is determined in good faith by any director that a
national emergency exists, special meetings of the Board of
Directors may be called by such director and at any such special
meeting two directors shall constitute a quorum for the transaction
of business including without limiting the generality
Page 47
hereof the filling of vacancies among directors and officers of the
corporation and the election of additional officers. The act of a
majority of the directors present thereat shall be the act of the Board
of Directors. If at any such special meeting of the Board of Directors
there shall be only one director present such director present may
adjourn the meeting from time to time until a quorum is obtained, and no
further notice thereof need be given of any such adjournment. The
director calling any such special meeting shall make a reasonable effort
to notify all other directors of the time and place of such special
meeting, and such effort shall be deemed to constitute the giving of
reasonable notice of such special meeting and every director shall be
deemed to have waived any requirement, of law or otherwise, that any
other notice of such special meeting be given. The directors present at
any such special meeting shall make reasonable effort to notify all
absent directors of any action taken thereat, but failure to give such
notice shall not affect the validity of the action taken at any such
meeting. Any action taken at any such special meeting may be
conclusively relied upon by all directors, officers, employees, and
agents of, and all persons dealing with, the corporation.
(b) The Board of Directors shall have the power to alter,
amend, or repeal any Articles of these By-laws by the affirmative
vote of at least two-thirds of the directors present at any special
meeting attended by two or more directors and held in the manner
prescribed in paragraph (a) of this Article, if it is determined in
good faith by said two-thirds that such alteration, amendment or
repeal would be conducive to the proper direction of the
corporation's affairs.
Page 48
EX-11
3
EARNINGS PER SHARE
EXHIBIT 11
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
COMPUTATION OF EARNINGS PER SHARE
For the Years Ended December 31
Amounts in thousands, except per share data
1994 1993 1992 1991 1990
Primary and fully diluted earnings:
Average common shares outstanding 36,450 36,757 37,590 38,052 38,676
Common share equivalents:
Performance Share Plan 233 218 190 164 154
Total shares 36,683 36,975 37,780 38,216 38,830
Net earnings from continuing
operations $97,976 $88,229 $90,980 $52,580 $120,278
Net earnings (loss) from discontinued
operations -- -- -- -- --
Net earnings before cumulative effect
of accounting changes 97,976 88,229 90,980 52,580 120,278
Net earnings from cumulative effect
of accounting changes -- -- 3,005 -- --
Net earnings $97,976 $88,229 $93,985 $52,580 $120,278
Primary and fully diluted earnings
(loss) per share of common stock:
Continuing operations $2.67 $2.39 $2.41 $1.38 $3.10
Discontinued operations -- -- -- -- --
Earnings before cumulative effect
of accounting changes 2.67 2.39 2.41 1.38 3.10
Cumulative effect of accounting
changes -- -- .08 -- --
Net earnings $2.67 $2.39 $2.49 $1.38 $3.10
EX-12
4
EARNINGS TO FIXED CHARGES
EXHIBIT 12
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
For the Years Ended December 31
(Amounts in thousands)
1994 1993 1992 1991 1990
Fixed charges:
Interest expense before
capitalization credits $ 10,699 $ 10,187 $ 10,441 $ 11,336 $ 9,349
Amortization of financing costs 114 115 116 75 44
One-third of rental expense 10,393 7,375 7,190 4,815 5,678
Total fixed charges $ 21,206 $ 17,677 $ 17,747 $ 16,226 $ 15,071
Net earnings from continuing
operations $ 97,976 $ 88,229 $ 90,980 $ 52,580 $120,278
Provision for income taxes 47,930 36,993 39,746 20,867 58,951
Fixed charges 21,206 17,677 17,747 16,226 15,071
Capitalized interest credits (878) (1,016) (673) (131) (1,591)
Amortization of capitalized interest 997 882 792 840 705
Earnings from continuing operations
before income taxes as adjusted $167,231 $142,765 $148,592 $ 90,382 $193,414
Ratio of earnings to fixed charges 7.9 8.1 8.4 5.6 12.8
EX-13
5
ANNUAL REPORT
VULCAN
MATERIALS
COMPANY
1994 ANNUAL REPORT
Selected Financial Data
Amounts and shares in millions, except per share data
1994 1993 1992 1991 1990
Operations
Net sales....................................................... $1,253.4 $1,133.5 $ 1,078.0 $ 1,007.5 $ 1,105.3
Gross profit.................................................... $ 268.2 $ 246.7 $ 249.1 $ 212.1 $ 291.4
As a percent of net sales................................... 21.4% 21.8% 23.1% 21.1% 26.4%
Interest expense................................................ $ 9.8 $ 9.2 $ 9.8 $ 11.3 $ 7.8
Net earnings before cumulative effect of accounting change...... $ 98.0 $ 88.2 $ 91.0 $ 52.6 $ 120.3
As a percent of average shareholders' equity................ 13.6% 12.8% 13.3% 7.7% 18.2%
Cumulative effect of accounting change.......................... $ - $ - $ 3.0 $ - $ -
Net earnings.................................................... $ 98.0 $ 88.2 $ 94.0 $ 52.6 $ 120.3
Primary and fully diluted earnings per common share:
Net earnings before cumulative effect of accounting change.. $ 2.67 $ 2.39 $ 2.41 $ 1.38 $ 3.10
Cumulative effect of accounting change...................... $ - $ - $ 0.08 $ - $ -
Net earnings................................................ $ 2.67 $ 2.39 $ 2.49 $ 1.38 $ 3.10
Effective tax rate.............................................. 32.8% 29.5% 30.4% 28.4% 32.9%
Operating income after taxes.................................... $ 104.5 $ 93.3 $ 98.7 $ 59.5 $ 125.1
As a percent of average capital employed.................... 10.5% 9.7% 10.3% 6.1% 13.7%
Liquidity and Capital Resources
Working capital................................................. $ 125.5 $ 161.8 $ 169.8 $ 149.8 $ 61.5
Current ratio................................................... 1.6 2.1 2.3 2.1 1.3
Net cash provided by continuing operations...................... $ 209.2 $ 194.1 $ 199.1 $ 184.9 $ 205.9
As a percent of long-term obligations (year end)............ 214.8% 190.2% 185.6% 166.4% 460.9%
Ratio of earnings to fixed charges.............................. 7.9 8.1 8.4 5.6 12.8
Total assets (year end)......................................... $1,181.1 $1,078.6 $ 1,083.9 $ 1,073.1 $ 1,118.0
Average capital employed:
Short-term debt............................................. $ 39.4 $ 25.2 $ 24.1 $ 72.7 $ 62.1
Long-term obligations....................................... 99.1 105.6 108.2 66.5 47.2
Other noncurrent liabilities................................ 135.0 140.4 138.4 155.7 144.1
Shareholders' equity........................................ 719.6 691.7 686.5 682.7 661.5
Total................................................... $ 993.1 $ 962.9 $ 957.2 $ 977.6 $ 914.9
Long-term obligations (year end)................................ $ 97.4 $ 102.0 $ 107.3 $ 111.1 $ 44.7
As a percent of long-term capital........................... 10.0% 10.9% 11.3% 11.8% 5.1%
Dividends declared and paid per common share.................... $ 1.32 $ 1.26 $ 1.20 $ 1.20 $ 1.20
Total common stock dividends.................................... $ 48.1 $ 46.3 $ 45.1 $ 45.7 $ 46.4
Common shares outstanding (year end)............................ 35.9 36.3 37.2 38.0 38.1
Segment Financial Data
Amounts in millions
Amount
1994 1993 1992 1992 1991
Net Sales
Construction Materials........... $842.9 $756.7 $686.4 $648.1 $696.1
Chemicals........................ 410.5 376.8 391.6 359.4 409.2
Total.................... $1,253.4 $1,133.5 $1,078.0 $1,007.5 $1,105.3
Earnings Before Interest
Expense and Income Taxes
Construction Materials........... $162.5 $116.7 $88.3 $41.8 $112.0
Chemicals........................ (7.3) 17.4 51.3 42.6 72.4
Segment earnings................. 155.2 134.1 139.6 84.4 184.4
Interest income, etc............. 0.5 0.3 0.9 0.3 2.6
Total.................... $155.7 $134.4 $140.5 $84.7 $187.0
Operating Income
After Taxes
Construction Materials........... $108.8 $81.6 $65.3 $32.1 $77.3
Chemicals........................ (4.7) 11.5 32.7 27.3 46.0
Interest income, etc............. 0.4 0.2 0.7 0.1 1.8
Total.................... $104.5 $93.3 $98.7 $59.5 $125.1
Net Cash Provided by
Continuing Operations
Construction Materials........... $182.5 $156.6 $141.9 $141.8 $130.2
Chemicals........................ 31.5 41.1 63.8 50.0 76.4
Interest expense, interest
income, etc., net............ (4.8) (3.6) (6.6) (6.9) (0.7)
Total.................... $209.2 $194.1 $199.1 $184.9 $205.9
Property Additions
Construction Materials........... $69.3 $59.3 $56.5 $60.8 $187.3
Chemicals........................ 90.5 41.3 42.0 24.9 35.2
Total.................... $159.8 $100.6 $98.5 $85.7 $222.5
Depreciation, Depletion and
Amortization
Construction Materials........... $72.8 $74.3 $75.5 $80.4 $71.7
Chemicals........................ 33.9 28.5 27.8 29.3 28.5
Total.................... $106.7 $102.8 $103.3 $109.7 $100.2
Average Capital Employed
Construction Materials........... $688.1 $707.4 $708.4 $748.4 $656.8
Chemicals........................ 294.0 248.5 226.4 226.1 228.9
Cash items....................... 11.0 7.0 22.4 3.1 29.2
Total.................... $993.1 $962.9 $957.2 $977.6 $914.9
Operating Income After
Taxes as a Percent of
Average Capital Employed
Construction Materials........... 15.8% 11.5% 9.2% 4.3% 11.8%
Chemicals........................ (1.6) 4.6 14.5 12.1 20.1
Interest income, etc. ........... 3.4 3.0 3.0 5.1 6.1
Total.................... 10.5% 9.7% 10.3% 6.1% 13.7%
Definitions of certain financial terms used in this report are provided on page 51.
Common Stock Market Prices and Dividends
Range of Dividend Paid
Common Stock Market Prices Per Share
1994 1993
Quarter Ended High Low High Low 1994 1993
March 31 $51 7/8 $45 1/2 $56 1/8 $47 $ .33 $.31 1/2
June 30 48 1/2 44 52 40 1/4 .33 .31 1/2
September 30 54 44 7/8 49 3/4 43 3/4 .33 .31 1/2
December 31 56 1/2 46 1/2 50 3/4 43 1/2 .33 .31 1/2
$1.32 $ 1.26
The Company's common stock is traded on the New York Stock Exchange (tickler
symbol VMC). As of January 31, 1995, the number of shareholders of record
approximated 4,500.
Dividends paid in 1994 totaled $48,109,000 as compared with $46,296,000 paid
in 1993. On February 16, 1995, the Board of Directors authorized a quarterly
dividend of 36 1/2 cents per common share payable March 10, 1995. The new
quarterly dividend represents a 10.6% increase over quarterly dividends paid
in 1994.
During the last five years, the Company's dividend payout rate has averaged
48% of prior year net earnings. The Company's policy is to pay out a
reasonable share of earnings as dividends consistent, on average, with the
payout record of the last few years, and consistent with the goal of
maintaining debt ratios within prudent and generally acceptable limits.
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Vulcan's net earnings in 1994 were $98.0 million, or $2.67 per share as
compared with net earnings and earnings per share of $88.2 million and $2.39
in 1993. Sales in 1994 were $1,253.4 million as compared to the 1993 total of
$1,133.5 million. Pretax earnings of $145.9 million in 1994 increased from
$125.2 million in 1993.
SALES
Sales in 1994 increased 11% from the 1993 total and were at a record level.
Specific elements of the change in sales from 1993 to 1994 are shown below
(amounts in millions):
Higher
Increased (Lower) Total
Unit Volume Prices Increase
Construction Materials $58.9 $27.4 $ 86.3
Chemicals 36.5 (2.9) 33.6
Total $95.4 $24.5 $119.9
The following table summarizes the increase in sales from 1992 to 1993
(amounts in millions):
Increased Higher Total
(Decreased) (Lower) Increase
Unit Volume Prices (Decrease)
Construction Materials $60.2 $10.1 $ 70.3
Chemicals (9.9) (4.9) (14.8)
Total $50.3 $ 5.2 $ 55.5
Construction Materials sales were at a record level of $842.9 million, up 11%
from the 1993 result of $756.7 million. This improvement reflects an 8%
increase in crushed stone shipments and a 5% rise in unit selling prices.
Chemicals 1994 sales of $410.5 million increased 9% from the 1993 level of
$376.8 million, due entirely to the effects of acquisitions. Excluding
acquisitions, sales decreased 4% due mainly to lower liquid caustic soda
prices in the first half of the year. Average prices also declined for
chlorinated organics as a group, but this decline was mitigated by improved
prices for chlorine.
Construction Materials sales increased in 1993 due to stronger demand for
crushed stone, which reflected increased construction activity in most
markets. Shipments of crushed stone improved 7% from the 1992 level.
Slightly higher unit selling prices also contributed to the increase. The
decline in Chemicals sales in 1993 reflects sharply lower caustic soda prices
and unfavorable product mix changes, only partially offset by improved prices
for chlorine and chlorinated organic products. Total Chemicals tons shipped
remained at 1992 levels. However, sales were shifted from higher to lower
margin products due to market conditions and the regulatory phaseout of
certain products.
EARNINGS
Earnings before interest expense and income taxes for 1994 were $155.7
million, a 16% improvement from comparable 1993 earnings of $134.4 million.
The 1993 amount was down 4% from the $140.5 million earned in 1992.
Construction Materials segment earnings of $162.5 million, which are before
interest expense and income taxes, were at a record level and increased 39%
from 1993's level of $116.7 million. The improvement reflects principally
higher volumes and prices, partially offset by higher operating costs.
In 1994, the Company sold its industrial sand operation, which is located in
Brady, Texas for a pretax gain of $4.2 million. This business had been
operated jointly by the Construction Materials and Chemicals segments.
Accordingly, the gain resulting from the sale of the business is shared
equally by the two segments. The Construction Materials share of the gain was
offset by provisions associated with the shutdown of an operating facility.
Construction Materials segment earnings in 1993 increased 32% from the 1992
result of $88.3 million. The increase principally reflects the impact of
higher volume.
The Chemicals segment reported a loss for the year of $7.3 million as compared
with 1993 earnings of $17.4 million. Within the segment's Chloralkali
business unit, lower sales, higher raw material prices, a $7.0 million
environmental remediation provision and costs related to production outages at
both major plants were the principal causes of the segment earnings decline.
Chemicals segment earnings in 1993 of $17.4 million were down sharply from
1992's result of $51.3 million. The decline reflects net lower prices, a less
favorable product mix, and higher energy, raw materials and other
manufacturing costs. Bad debt expense also increased in 1993.
OPERATING COSTS AND EXPENSES
Costs of goods sold of $985.2 million increased 11% from 1993's level.
In the Construction Materials segment, cost of goods sold was up due to higher
volume, and to a lesser extent, higher operating costs. Chemicals cost of
goods sold increased due to acquisitions, higher raw material prices, an
environmental remediation provision and costs related to production outages
at both major plants.
Cost of goods sold increased 7% in 1993 from the 1992 amount, reflecting
mainly higher volume in the Construction Materials segment and increased
energy, raw materials and manufacturing costs in the Chemicals segment.
Repair and maintenance expenses were $128.6 million in 1994, a 7% increase
from the 1993 amount. These expenses were up 4% in 1993 from the 1992 amount.
Increases in both periods reflect higher volume in the Construction Materials
segment.
Depreciation, depletion and amortization expense totaled $106.7 million in
1994, a 4% increase from the 1993 amount of $102.8 million. The increase
relates to higher spending for property additions in the Chemicals segment,
including acquisitions. Depreciation, depletion and amortization expense
declined slightly in 1993 from the 1992 level, reflecting reduced capital
spending over the prior two years.
Energy costs (excluding depreciation and operating expenses referable to
Chemicals cogeneration facilities) totaled $122.0 million, a 2% decrease from
the 1993 amount of $124.7 million due to lower costs for fuels in the
Construction Materials segment. The 4% increase in 1993 relates mainly to
higher natural gas prices in the Chemicals segment.
During the years 1985 through 1989, the Company recorded provisions totaling
$28.8 million for environmental remediation at a now-closed third party waste
disposal site to which the Chemicals segment last shipped waste materials in
1970. In 1994, the Company recorded an additional $7.0 million provision for
remedial actions at this site. The Company and other companies that also
generated waste placed at the site have received approval of a cleanup plan
from the United States Environmental Protection Agency ("EPA"). Cleanup of
the site is underway and expected to be completed during 1995. Although the
cost of the cleanup and the related EPA oversight and the Company's share of
such costs cannot be determined precisely at this time, the Company currently
believes that the aforementioned provisions are adequate. Provisions for
other environmental expenses for the last three years have not been material.
Contingent liabilities for environmental remediation activities of the
Chemicals segment and discontinued operations are discussed in Note 9 to the
financial statements.
Selling, administrative and general expenses of $125.0 million in 1994
increased 13% from the 1993 level of $111.1 million. This increase reflects
principally the effect of acquisitions by the Chemicals segment and higher
provisions for stock- based incentive plans. In 1993, selling, administrative
and general expenses were up 5% from the 1992 level. This increase reflects
principally higher bad debt provisions, higher professional fees and normal
increases in personnel costs, partially offset by lower provisions for
stock-based incentive plans.
Other operating costs totaled $5.5 million in 1994 as compared with $5.0
million in 1993. These costs were $5.3 million in 1992. They primarily
include costs referable to abandonments and idle facilities.
OTHER ITEMS
Other income, net of other charges, was $18.0 million in 1994 as compared with
the 1993 amount of $3.8 million. The favorable comparison reflects a sharp
increase in gains on sales of assets, including gains from the sale of the
industrial sand business and the sale of surplus land in the Construction
Materials segment, as well as lower miscellaneous charges. In addition,
results from joint ventures also improved in 1994. The profitability of
the Crescent Market Project reflected continued improvement despite a modest
charge to reflect the devaluation of the Mexican peso. Since the vast
majority of its revenues are U.S. dollar denominated, and its functional
currency is U.S. dollars, the Crescent Market Project is not materially
impacted by fluctuations in the value of the Mexican peso. Other income
in 1993 compared favorably with $2.4 million in 1992. The increase reflects
mainly improved results referable to current as well as discontinued joint
ventures.
Interest expense was $9.8 million in 1994, up from $9.2 million in 1993.
Higher average borrowings as well as lower capitalized interest on
construction projects accounted for the increase. The 1992 amount was $9.8
million.
INCOME TAXES
The Company's 1994 effective tax rate was 32.8%, up significantly from the
1993 rate of 29.5%. The increase reflects principally the absence in 1994 of
adjustments comparable to those made in 1993 to close out excess provisions
referable to completed tax audits. The 1993 effective rate decreased from the
1992 rate of 30.4%. The decrease reflects an increased favorable effect of
statutory depletion and the previously mentioned adjustment to prior year
accruals for state income taxes, partially offset by an increase in the
federal statutory rate. The increase in the federal rate, including an
adjustment to deferred taxes for the rate change, lowered 1993 earnings per
share by 6 cents.
RETURN ON EQUITY AND CAPITAL
The ratio of net earnings to average shareholders' equity was 13.6% in 1994,
as compared with the 1993 and 1992 returns of 12.8% and 13.3%, respectively.
The ratio of operating income after taxes to average capital employed for the
Company was 10.5% in 1994. Comparable returns in 1993 and 1992 were 9.7% and
10.3%, respectively. The increases in the 1994 return measures are due
principally to the effects of higher earnings in the Construction Materials
segment, partially offset by lower earnings in the Chemicals segment. The
decreases in the 1993 return measures are due principally to the effects of
lower earnings in the Chemicals segment, substantially offset by improved
results from the Construction Materials segment.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS
Net cash provided by continuing operations amounted to $209.2 million in 1994,
modestly higher than 1993's total of $194.1 million. Net cash provided by the
Chemicals segment decreased by $9.7 million, principally as a result of lower
earnings and spending on acquisitions. Net cash provided by the Construction
Materials segment increased $26.0 million due to higher earnings. Although
total indebtedness increased moderately as a result of the aforementioned
Chemicals segment acquisitions, the Company's ability to generate significant
cash flows enabled it to fund other capital requirements internally, reduce
long-term debt, and return $76.7 million to shareholders through dividends and
share repurchases.
Net cash provided by operations for each segment in each of the last three
years, including the effect of working capital changes, is summarized below
(amounts in millions):
1994 1993 1992
Construction Materials $182.5 $156.6 $141.9
Chemicals 31.5 41.1 63.8
Interest expense, interest
income, etc., net (4.8) (3.6) (6.6)
Total $209.2 $194.1 $199.1
Net cash used for investing activities totaled $174.4 million in 1994, up
$70.6 million from the 1993 level. Cash expenditures for property, plant and
equipment, including acquisitions, were $187.7 million in 1994, up $87.2
million, while cash investments of $2.1 million in associated companies
decreased $7.5 million from comparable 1993 investments. Cash spending for
acquisitions totaled $87.6 million as compared with $4.5 million in 1993.
Net cash used for financing activities amounted to $40.2 million in 1994, down
$50.7 million from the prior year's $90.9 million. Interest-bearing debt
increased $36.6 million in 1994 compared with a net decrease of $4.6 million
in 1993. No long-term debt was issued during 1993 or 1994. Purchases of the
Company's common stock decreased by $11.4 million to $28.6 million in 1994.
Cash and cash equivalents amounted to $7.7 million at December 31, 1994, down
$6.3 million from the 1993 year end balance of $14.0 million.
WORKING CAPITAL
Working capital, exclusive of debt and cash items (cash, cash equivalents and
short-term investments), totaled $166.6 million at December 31, 1994, up $15.7
million from the 1993 level. This increase compares with a working capital
decrease of $5.7 million in 1993 and an increase of $10.9 million in 1992.
Working capital increases referable to acquisitions amounted to $11.4 million
in 1994, $300,000 in 1993 and $4.2 million in 1992.
Accounts and notes receivable totaled $182.1 million at December 31, 1994, an
increase of $31.7 million from the 1993 balance attributable to significantly
higher fourth quarter sales in the current year. Inventories at year-end 1994
of $112.5 million were $7.5 million above the comparable 1993 level due to
inventories of businesses acquired by the Chemicals segment.
Current liabilities, excluding debt items, were $162.5 million at the end of
1994, up 18% from the 1993 total of $137.7 million due mainly to higher
accrued liabilities in Chemicals.
The Company's overall current position is summarized below (dollar amounts in
millions and as of year end):
1994 1993 1992
Working capital, exclusive of
debt and cash items $166.6 $150.9 $156.6
Cash and cash equivalents 7.7 14.0 15.7
Short-term debt (47.5) (1.7) (1.1)
Accrued interest (1.4) (1.4) (1.4)
Total working capital
(including debt and
cash items) $125.4 $161.8 $169.8
Current ratio 1.6 2.1 2.3
Acid test ratio .9 1.2 1.2
Turnover ratios:*
Customer receivables:
Construction Materials 7.5 7.2 7.2
Chemicals 6.5 5.7 6.0
Total 7.1 6.7 6.7
Inventories:
Construction Materials 7.6 6.8 6.1
Chemicals 12.3 10.5 12.5
Total 8.9 7.8 7.6
* Calculated by dividing net sales and cost of goods sold by the average of
month-end receivables and inventories, respectively.
The decrease in the current ratio from 1993 to 1994 was attributable to higher
current liabilities, i.e., short-term borrowing of $42.8 million at year-end
1994 as compared with none at December 31, 1993. The reduction in the current
ratio from 1992 to 1993 was due to higher current liabilities, mainly accrued
liabilities for materials and services, and slightly lower receivables and
inventories. These were partially offset by a higher current portion of
deferred taxes.
The receivables turnover ratio improved for both Construction Materials and
Chemicals in 1994. The turnover ratio for Construction Materials receivables
was 7.2 in 1993, the same as 1992. The small decrease in the Chemicals
turnover ratio from 6.0 in 1992 to 5.7 in 1993 reflects slower collections
from customers.
Both segments had better inventory turnover ratios in 1994 than 1993 primarily
due to lower average inventory levels and higher sales volumes. Construction
Materials achieved a better inventory turnover ratio in 1993 compared to 1992
due to lower average inventory levels and higher sales volume. Chemicals
inventory turnover declined from 12.5 in 1992 to 10.5 in 1993 due mostly to an
increase in average inventory levels.
PROPERTY ADDITIONS
Property additions, including acquisitions, totaled $159.8 million in 1994,
up 59% from the 1993 level of $100.6 million. The Company classifies its
property additions into three categories based upon the predominant purpose
of the project, as explained on page 51.
The table below summarizes property additions by each category (amounts in
millions):
Project Purpose 1994 1993 1992
Replacement $53.0 $ 48.7 $29.2
Environmental control 3.9 7.1 11.6
Subtotal 56.9 55.8 40.8
Profit adding:
Acquisitions 58.1 4.2 23.0
Other 44.8 40.6 34.7
Subtotal 102.9 44.8 57.7
Total $159.8 $100.6 $98.5
Total property additions were substantially higher in 1994 due to spending for
acquisitions by the Chemicals segment.
The increase in property additions in 1993 reflects higher spending for
replacement projects in Construction Materials which more than offset lower
spending for environmental control and profit-adding projects.
As a percent of net cash provided by continuing operations, spending for
replacement and environmental control projects was 27% in 1994, 29% in 1993
and 20% in 1992. Commitments for capital expenditures were $8.2 million at
December 31, 1994. This included $5.3 million referable to various Chemicals
projects.
SHORT-TERM BORROWINGS AND INVESTMENTS
During most of the years 1992 through 1994, the Company was in a net short-
term borrowing position. Short-term borrowings in 1994 reached a maximum of
$91.7 million, averaged $36.0 million and were $42.8 million at year end.
Comparable 1993 amounts were $64.0 million, $25.5 million and zero,
respectively. The higher 1994 levels were attributable mostly to funding of
acquisitions by the Chemicals segment.
Details pertaining to short-term borrowings during the last three years
(dollar amounts in millions) are as follows:
1994 1993 1992
Year end $42.8 $ - $ -
Maximum outstanding $91.7 $64.0 $56.3
Average outstanding $36.0 $25.5 21.3
Weighted average interest rate 4.8% 3.2% 3.8%
The above interest rate averages were computed using daily outstanding
principal amounts.
The Company's policy is to maintain unused bank lines of credit and/or
committed credit facilities at least equal to its outstanding commercial
paper. Unsecured bank lines of credit totaling $130.0 million were maintained
at the end of 1994. Standard & Poor's Corporation and Moody's Investors
Services, Inc. have assigned ratings of A-1+ and P-1, respectively, to the
Company's commercial paper.
It is the Company's policy to invest cash in excess of its operating
requirements in interest-bearing securities having an original or remaining
maturity of one year or less. When investing such temporarily excess funds,
the Company's objectives, in order of their importance, are (1) to meet
projected cash requirements; (2) to preserve the principal of each short-term
investment; and (3) to realize the maximum available return consistent with
the preceding objectives.
The investment of excess cash during the last three years (dollar amounts
in millions) is shown below:
1994 1993 1992
Maximum invested $45.1 $26.2 $32.7
Average invested $ 7.7 $ 7.2 $21.9
Taxable-equivalent yield 4.7% 3.3% 4.3%
Year end $ - $ - $15.7
LONG-TERM OBLIGATIONS
During 1994 the Company reduced its total long-term obligations by $4.6
million to $97.4 million as compared with a net decrease of $5.3 million in
1993. During the three-year period ended December 31, 1994, long-term
obligations decreased cumulatively by $13.7 million from the $111.1 million
outstanding at December 31, 1991. Total interest bearing obligations
(including short-term debt) increased $20.5 million during the same period.
During the same three year period, shareholders' equity, net of common stock
purchases of $101.0 million and dividends of $139.5 million, increased by
$48.7 million to $731.6 million. The Company's overall long-term capital
position is shown in the following table (dollar amounts in millions and as
of year end):
1994 1993 1992
Long-term debt $ 97.4 $102.0 $107.2
Other noncurrent liabilities 140.8 132.8 141.6
Shareholders' equity 731.6 703.0 700.1
Total long-term capital $969.8 $937.8 $948.9
Long-term obligations
as a percent of:
Total long-term capital 10.0% 10.9% 11.3%
Shareholders' equity 13.3% 14.5% 15.3%
Net cash provided by
continuing operations
as a percent of
long-term obligations 215% 190% 186%
Ratio of earnings to
fixed charges 7.9 8.1 8.4
The ratio of earnings to fixed charges decreased in 1994 because the increase
in earnings was more than offset by an increase in rental expense. The ratio
of earnings to fixed charges decreased in 1993 due to the decline in earnings.
Although the future ratio of long-term obligations to total long-term capital
will depend upon specific investment and financing decisions, management
believes the Company's cash-generating capability, along with its financial
strength and business diversification, can reasonably support a ratio of 25% to
30%. The actual ratio at the end of 1994 was 10.0%. The Company has made
acquisitions from time to time and will continue to actively pursue attractive
investment opportunities. If financing is required for this purpose, it may be
accomplished temporarily on a short-term basis or by incurring long-term debt.
The Company's long-term borrowing requirements can be satisfied in either the
public debt or private placement markets. The Company's medium-term notes
issued in 1991 are rated AA- by Standard & Poor's and A1 by Moody's.
COMMON STOCK
Common stock issued during 1994 equaled 160,966 shares valued at $7,441,000 of
which 139,310 shares were referable to the acquisition of Peroxidation Systems
Inc. In 1993, 21,479 shares valued at $904,000 were issued. Common stock
issued during 1993 and 1992 related to the Company's long-term management
incentive plans. In addition, shares were issued in 1994 and 1993 through the
Stock Plan for Non-Employee Directors. Shares held in the treasury were used
to satisfy these distributions.
During 1994 the Company purchased 603,700 shares of its common stock at a cost
of $28.6 million, equal to an average price of $47.39 per share. The acquired
shares are being held for general corporate purposes, including distributions
under management incentive plans. The Company's decisions to purchase shares
of common stock are made based upon the common stock's valuation and price, the
Company's liquidity, its actual and projected needs for cash for investment
projects and regular dividends, and the Company's debt level.
The number and cost of shares purchased during each of the last three years is
shown below:
1994 1993 1992
Shares purchased:
Number 603,700 895,015 786,230
Total cost (millions) $28.6 $40.0 $32.4
Average cost $47.39 $44.68 $41.24
Shares in treasury at year-end:
Number 10,666,952 10,224,218 9,350,682
Average cost $35.93 $35.03 $34.05
The number of shares remaining under purchase authorization is
2,500,000 shares.
CAPITAL EMPLOYED
During 1994 total average capital employed in continuing operations was $993.1
million, up $30.2 million from the 1993 average of $962.9 million. The latter
figure reflects an increase of $5.7 million, or 1%, from the $957.2 million
employed on average in 1992. Average capital employed in the Company's
business segments is shown in the table below (amounts in millions):
1994 1993 1992
Construction Materials $688.1 $707.4 $708.4
Chemicals 294.0 248.5 226.4
Cash items 11.0 7.0 22.4
Total $993.1 $962.9 $957.2
The sources and deployment of the year-to-year increases in total average
capital employed are shown below (amounts in millions; brackets indicate a
decrease)
1993-94 1992-93
Sources:
Short-term debt $ 14.2 $ 1.1
Long-term obligations (6.5) (2.6)
Other noncurrent liabilities (5.4) 2.0
Shareholders' equity 27.9 5.2
Total $ 30.2 $ 5.7
Deployment:
Construction Materials $(19.3) $ (1.0)
Chemicals 45.5 22.0
Cash items 4.0 (15.3)
Total $ 30.2 $ 5.7
During the period 1990 through 1994, total average capital employed in
continuing operations has grown at an average annual compound rate of 2.6%, or
by the cumulative amount of $141.0 million. During this period, interest-
bearing debt has increased by $72.8 million and, as a percent of average
capital employed, has increased from 7.7% to 13.9%.
The following summary indicates the sources and deployment of the increase in
average capital employed from 1990 to 1994 (amounts in millions):
Amount
of Increase % of
(Decrease) Total
Sources:
Short-term debt $ 31.1 22%
Long-tertions 41.7 30
Shareholders' equity 68.2 48
Total $141.0 100%
Deployment:
Construction Materials $137.5 97%
Chemicals 66.1 47
Cash items (62.7) (44)
To $141.0 100%
Summary of Internal Cash Flows and Transactions with Investors
Pages 58 and 59 of this report contain detailed information showing the
principal elements of operating and investing cash flows referable to the
Company's segments for each of the last 11 years. The table on page 60
summarizes these detailed cash flows and also shows the cash flows referable to
nonsegment activities and transactions between the Company and its suppliers of
invested capital, both lenders and shareholders.
A cumulative summary of these flows for the five-year period ended
December 31, 1994 is provided on the following page. As indicated in the
table, the net cash flows referable to all of the Company's operating and
investing activities, and to the tax deductibility of interest expense,
totaled $290.3 million during the last five years. Transactions with capital
suppliers during the same period required $359.5 million, including $385.4
million returned to shareholders and $25.9 million received from lenders.
Discontinued operations required $10.3 million. The net result of these cash
flows was a decrease in cash items of $76.5 million from the end of 1989 to
the end of 1994.
Supplementary Information - Quarterly Financial Data
Amounts in millions, except per share data
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
1994
Net sales........................................... $216.9 $326.7 $360.4 $349.4 $1,253.4
Gross profit........................................ 21.0 77.4 90.4 79.4 268.2
Net earnings (loss)................................. (5.2) 33.7 37.6 31.9 98.0
Primary and fully diluted earnings (loss) per share. (.14) .92 1.02 .87 2.67
1993
Net sales........................................... $214.1 $306.0 $331.4 $282.0 $1,133.5
Gross profit........................................ 29.7 74.0 85.1 57.9 246.7
Net earnings (loss)................................. (.5) 31.6 36.6 20.5 88.2
Primary and fully diluted earnings (loss) per share. (.01) .84 .99 .57 2.39
1992
Net sales........................................... $210.6 $284.2 $312.3 $270.9 $1,078.0
Gross profit........................................ 35.6 74.5 80.8 58.2 249.1
Net earnings before cumulative effect
of accounting change............................ 4.6 30.2 35.8 20.4 91.0
Cumulative effect of accounting change.............. 3.0 - - - 3.0
Net earnings........................................ 7.6 30.2 35.8 20.4 94.0
Primary and fully diluted earnings per share:
Before cumulative effect of accounting change... .12 .80 .94 .55 2.41
Cumulative effect of accounting change.......... .08 - - - .08
Net earnings.................................... .20 .80 .94 .55 2.49
CONSOLIDATED STATEMENTS OF EARNINGS
Vulcan Materials Company and Subsidiary Companies
For the Years Ended December 31, 1994, 1993 and 1992
Amounts and shares in thousands, except per share data
1994 1993 1992
Net sales................................................... $ 1,253,360 $ 1,133,489 $ 1,078,035
Cost of goods sold.......................................... 985,198 886,764 828,951
Gross profit on sales....................................... 268,162 246,725 249,084
Selling, administrative and general expenses................ 125,036 111,085 105,749
Other operating costs....................................... 5,526 4,987 5,326
Other income, net
Interest income........................................... 1,224 1,013 1,795
Other, net................................................ 16,903 2,727 690
Total other income, net........................ 18,127 3,740 2,485
Earnings before interest expense and income taxes........... 155,727 134,393 140,494
Interest expense (Note 4)................................... 9,821 9,171 9,768
Earnings before income taxes................................ 145,906 125,222 130,726
Provision for income taxes (Note 7)
Current................................................... 41,339 37,460 46,833
Deferred.................................................. 6,591 (467) (7,087)
Total provision for income taxes............... 47,930 36,993 39,746
Net earnings before cumulative effect of accounting change.. 97,976 88,229 90,980
Cumulative effect of accounting change (Note 7)............. - - 3,005
Net earnings................................................ $ 97,976 $ 88,229 $ 93,985
Primary and fully diluted earnings per share:
Net earnings before cumulative effect of accounting change.. $2.67 $2.39 $2.41
Cumulative effect of accounting change (Note 7)........... - - 0.08
Net earnings.............................................. $2.67 $2.39 $2.49
Dividends per share......................................... $1.32 $1.26 $1.20
Average common and common equivalent shares outstanding..... 36,683 36,975 37,780
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
CONSOLIDATED BALANCE SHEETS
Vulcan Materials Company and Subsidiary Companies
For the Years Ended December 31, 1994, 1993 and 1992
Amounts in thousands
1994 1993 1992
Assets
Current assets
Cash and cash equivalents (Note 2).............................$ 7,717 $ 13,996 $ 15,669
Accounts and notes receivable:
Customers, less allowance for doubtful accounts:
1994, $8,244; 1993, $7,284; 1992, $6,814................. 179,315 141,606 142,454
Other........................................................ 2,813 8,798 8,941
Inventories (Note 3).......................................... 112,481 105,017 107,948
Deferred income taxes.......................................... 29,074 26,898 24,604
Prepaid expenses............................................... 5,398 6,298 5,213
Total current assets................................ 336,798 302,613 304,829
Investments and long-term receivables............................ 58,138 56,505 49,970
Property, plant and equipment, net (Note 4)...................... 701,757 657,785 663,721
Deferred charges and other assets (Note 8)....................... 84,451 61,648 65,395
Total ..............................................$ 1,181,144 $ 1,078,551 $ 1,083,915
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt...........................$ 4,687 1,671 $ 1,029
Notes payable (Note 2)......................................... 42,779 - -
Trade payables and accruals.................................... 102,394 89,504 81,775
Accrued income taxes........................................... 19,423 14,450 17,040
Accrued salaries and wages..................................... 23,068 20,437 19,371
Accrued interest............................................... 1,415 1,356 1,383
Other accrued liabilities (Note 9)............................. 17,582 13,397 14,438
Total current liabilities........................... 211,348 140,815 135,036
long-term debt (Note 5).......................................... 97,380 102,035 107,205
Deferred income taxes (Note 7)................................... 82,507 74,193 72,383
Deferred management incentive and other compensation (Note 8).... 21,575 17,885 18,618
Other postretirement benefits (Note 8)........................... 29,835 27,377 24,880
Other noncurrent liabilities (Note 9)............................ 6,870 13,283 25,681
Other commitments and contingent liabilities (Note 9)
Shareholders' equity
Common stock, $1 par value..................................... 46,573 46,573 46,573
Capital in excess of par value................................. 8,585 4,587 3,962
Retained earnings.............................................. 1,059,779 1,009,912 967,979
Total............................................... 1,114,937 1,061,072 1,018,514
Less cost of stock in treasury................................. 383,308 358,109 318,402
Total shareholders' equity.......................... 731,629 702,963 700,112
Total...............................................$ 1,181,144 $ 1,078,551 $ 1,083,915
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Vulcan Materials Company and Subsidiary Companies
For the Years Ended December 31, 1994, 1993 and 1992
Amounts in thousands
1994 1993 1992
Operations
Net earnings before cumulative effect of accounting change.......$ 97,976 $ 88,229 $ 90,980
Adjustments to reconcile net earnings to net cash provided by
continuing operations:
Depreciation, depletion and amortization................... 106,695 102,780 103,345
(Increase) decrease in assets before effects of business
acquisitions:
Accounts and notes receivable...................... (21,188) 991 (11,760)
Inventories....................................... 965 3,199 6,592
Deferred income taxes............................. (2,176) (2,294) (12,704)
Prepaid expenses.................................. 1,056 (1,085) (681)
Increase (decrease ) in liabilities before effects of
business acquisitions:
Accrued interest and income taxes................. (84) (27) (305)
Trade payables, accrual, etc...................... 16,457 5,906 12,828
Deferred income taxes............................ 8,314 1,810 2,757
Other noncurrent liabilities..................... (266) (10,564) (4,954)
Issuance of common stock in connection with Performance
Share Plan........................................... 998 904 717
Other, net............................................... 470 4,246 12,311
Net cash provided by continuing operations ............ 209,217 194,095 199,126
Net cash used for discontinued operations (Note 9)..... (958) (1,077) (1,031)
Cumulative effect of accounting change (Note 7)........ - - 3,005
Net cash provided by operations........................ 208,259 193,018 201,100
Investing Activities
Purchases of property plant and equipment........................ (100,090) (95,977) (75,191)
Payment for business acquisitions................................ (87,540) (4,507) (33,216)
Proceeds from sale of property, plant and equipment.............. 15,358 6,009 8,924
Net investment in nonconsolidated companies...................... (2,112) (9,336) (11,209)
Net cash used for investing activities................. (174,384) (103,811) (110,692)
Financing Activities
Net borrowings (payments)- commercial paper and
bank lines of credit.......................................... 42,779 - (9,803)
Payment of short-term debt....................................... (1,809) (1,184) (3,759)
Payment of long-term debt........................................ (4,403) (3,414) (2,651)
Purchases of common stock (Note 10).............................. (28,612) (39,986) (32,424)
Dividends paid................................................... (48,109) (46,296) (45,095)
Net cash used for financing activities................. (40,154) (90,880) (93,732)
Net decrease in cash and cash equivalents........................ (6,279) (1,673) (3,324)
Cash and cash equivalents at beginning of year................... 13,996 15,669 18,993
Cash and cash equivalents at end of year.........................$ 7,717 $ 13,996 $ 15,669
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Vulcan Materials Company and Subsidiary Companies
For the Years Ended December 31, 1994, 1993 and 1992
Amounts and shares in thousands
1994 1993 1992
Shares Amount Shares Amount Shares Amount
Common stock, $1 par value
Authorized:160,000 shares
Issued (no changes in 1994,
1993 and 1992)........................... 46,573 $ 46,573 46,573 $ 46,573 46,573 $ 46,573
Capital in excess of par value
Balance at beginning of year............... 4,587 3,962 3,463
Shares issued in connection
with the acquisition of
business .......................... 3,490 - -
Distributions under Performance
Share Plan............................ 514 604 499
Distributions under Stock Plan for
Non-employee Directors................ 23 21 -
Other..................................... (29) - -
Balance at end of year.................... 8,585 4,587 3,962
Retained earnings
Balance at beginning of year............... 1,009,912 967,979 919,089
Net earnings.............................. 97,976 88,229 93,985
Cash dividends on common stock (48,109) (46,296) (45,095)
Balance at end of year.................... 1,059,779 1,009,912 967,979
Common stock held in treasury
Balance at beginning of year............... (10,224) (358,109) (9,350) (318,402) (8,582) (286,197)
Shares issued in connection
with the acquisition of
business .......................... 140 2,952 - - - -
Purchase of common shares.................. (604) (28,612) (895) (39,985) (786) (32,423)
Distributions under Performance
Share Plan............................ 21 442 20 270 18 218
Distributions under Stock Plan for
Non-employee Directors................ 1 19 1 8 - -
Balance at end of year.................... (10,666) (383,308) (10,224) (358,109) (9,350) (318,402)
Total............................. $ 731,629 $ 702,963 $ 700,112
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
all majority or wholly-owned subsidiary companies. All significant
intercompany transactions and accounts have been eliminated in consolidation.
Investments in joint ventures and the common stock of associated companies in
which the Company has ownership interests of 20% to 50% are accounted for by
the equity method. All other investments are carried at the lower of cost or
market, and income is recorded as dividends are received or interest is
earned.
CASH EQUIVALENTS
The Company classifies as cash equivalents all highly liquid securities with a
maturity of three months or less at the time of purchase.
INVENTORIES
The Company uses the last-in, first-out (LIFO) method of valuation for most of
its inventories because it results in a better matching of costs with revenues.
Inventories, other than operating supplies, are stated at the lower of cost, as
determined by the LIFO method, or market. Such cost includes raw materials,
direct labor and production overhead. Substantially all operating supplies are
carried at average cost, which does not exceed market.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are carried at cost less allowances for
accumulated depreciation, depletion and amortization. The cost of properties
held under capital leases is equal to the lower of the net present value of the
minimum lease payments or the fair value of the leased property at the
inception of the lease.
DEPRECIATION, DEPLETION AND AMORTIZATION
Depreciation is computed by the straight-line method at rates based upon the
estimated service lives of the various classes of assets, which include
machinery and equipment, buildings and land improvements. Amortization of
capitalized leases is included with depreciation expense.
Cost depletion on depletable quarry land is computed by the unit of production
method based upon estimated recoverable units.
Leaseholds are amortized over varying periods not in excess of applicable lease
terms.
OTHER COSTS
Income is charged as costs are incurred for start-up of new plants and for
normal recurring costs of mineral exploration, removal of overburden from
active mineral deposits, and research and development.
Repairs and maintenance are charged to costs and operating expenses. Renewals
and betterments which add materially to the utility or useful lives of
property, plant and equipment are capitalized.
Environmental expenditures that pertain to current operations or relate to
future revenues are expensed or capitalized consistent with the Company's
capitalization policy. Expenditures that relate to an existing condition
caused by past operations and do not contribute to future revenue are expensed.
Environmental compliance costs include maintenance and operating costs with
respect to pollution control facilities, the cost of ongoing monitoring
programs and similar costs. These amounts are accrued as liabilities and
expensed when environmental assessments and/or remedial efforts are probable,
and the cost can be reasonably estimated. Costs are accrued no later than the
feasibility study and/or when the Company commits to a formal plan of action.
INCOME TAXES
Effective January 1, 1992, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 109, Accounting for Income Taxes, which
supersedes and amends SFAS No. 96. The principal change made by SFAS No. 109
is to revise the criteria for recognition and measurement of deferred tax
assets. The effect of the change in accounting method is disclosed in Note 7.
Annual provisions for income taxes are based primarily on reported earnings
before income taxes and include appropriate provisions for deferred income
taxes resulting from the tax effect of the difference between the tax basis
of assets and liabilities and their carrying amounts for financial reporting
purposes. In addition, such provisions reflect adjustments for the following
items:
Permanent differences, principally the excess of percentage
depletion over the tax basis of depletable properties.
An estimate of additional cost that may be incurred,
including interest on deficiencies but excluding adjustments
representing temporary differences, upon final settlement of
returns after audit by various taxing authorities.
Balances or deficiencies in prior year provisions that become
appropriate as audits of those years progress.
EARNINGS PER SHARE
Primary and fully diluted earnings per share of common stock are computed by
dividing net earnings by the weighted average number of common shares and
common share equivalents outstanding during the year. Common share equivalents
represent the number of shares contingently issuable under long-term
performance share plans and the stock plan for non-employee directors.
2. CASH
Bank lines of credit amounted to $130,000,000, $70,000,000 and $60,000,000 at
year end 1994, 1993 and 1992, respectively. At the end of 1994, $35,000,000
was used to back up commercial paper outstanding and $7,800,000 was drawn down
as bank borrowings. The weighted average interest rate applicable to these
borrowings as of December 31, 1994 was 6.12%. The lines were not in use at
the end of years 1993 and 1992.
All of the lines of credit extended to the Company in 1994, 1993, and 1992 were
based on a commitment fee arrangement. The Company also maintained balances or
paid fees to compensate its banks for certain services. The Company was in
compliance with these informal compensation arrangements during all three
years. Because the arrangements are evaluated on a twelve-month average basis,
the Company does not consider any of its cash balances to be restricted as of
any specific date.
3. INVENTORIES
Inventories at December 31 are as follows (in thousands of dollars):
1994 1993 1992
Finished products $ 77,721 $ 75,954 $ 74,684
Raw materials 9,248 3,856 4,123
Products in process 622 965 943
Operating supplies and other 24,890 24,242 28,198
Total inventories $112,481 $105,017 $107,948
The above amounts include inventories valued under the last-in, first-out
(LIFO) method totaling $79,909,000, $80,614,000 and $78,968,000 at December 31,
1994, 1993 and 1992, respectively. Estimated current cost exceeded LIFO cost
at December 31, 1994, 1993 and 1992 by $29,049,000, $32,986,000 and
$32,371,000, respectively. If all inventories valued at LIFO cost had been
valued under the methods (substantially average cost) used prior to the
adoption of the LIFO method, the approximate effect on net earnings would have
been a decrease of $2,476,000 ($.07 per share effect) in 1994, an increase of
$387,000 ($.01 per share effect) in 1993 and a decrease of $6,409,000 ($.17 per
share effect) in 1992.
4. PROPERTY, PLANT AND EQUIPMENT
Balances of major classes of assets and allowances for depreciation, depletion
and amortization at December 31 are as follows (in thousands of dollars):
1994 1993 1992
Land and land
improvements $ 206,457 $ 200,856 $ 198,272
Buildings 76,629 62,995 61,088
Machinery and equipment 1,486,577 1,372,667 1,317,671
Leaseholds 6,471 5,575 5,490
Construction in progress 32,754 55,912 41,912
Total 1,808,888 1,698,005 1,624,433
Less allowances for
depreciation, depletion
and amortization 1,107,131 1,040,220 960,712
Property, plant and
equipment, net $ 701,757 $ 657,785 $ 663,721
The Company capitalized interest cost of $878,000 in 1994, $1,016,000 in 1993
and $673,000 in 1992 with respect to qualifying construction projects. Total
interest cost incurred before recognition of the capitalized amount was
$10,699,000 in 1994, $10,187,000 in 1993 and $10,441,000 in 1992.
5. DEBT
Long-term debt, exclusive of current maturities, at December 31 is summarized
as follows (in thousands of dollars):
1994 1993 1992
Medium-term notes $76,000 $ 80,000 $ 81,000
Notes issued for businesses
acquired in 1987 2,478 2,478 5,863
6 5/8% pollution control
revenue bonds 6,800 6,800 6,800
6 3/8% pollution control
revenue bonds 5,800 5,800 5,800
Variable rate pollution control
revenue bonds 3,000 3,350 3,700
Other notes 3,302 3,607 4,042
Total $97,380 $102,035 $107,205
Estimated fair value $98,597 $114,372 $114,797
In May 1991 the Company filed a shelf registration statement with the
Securities and Exchange Commission for the registration of $200,000,000
principal amount of debt securities. The issuances of these medium-term notes
in 1991 totaled $81,000,000. The net proceeds from the sale of the debt
securities in 1991 were used for general corporate purposes, principally the
reduction of commercial paper borrowings and long-term indebtedness. The
dollar-weighted average maturity of the notes, as calculated from the dates of
issuance, approximated 13 years. Maturities at the time of issuance ranged
from three to thirty years with a maximum of $10,000,000 due in any one year.
The weighted average interest rate on the notes is 8.53% with a range of 7.59%
to 8.85%. The notes outstanding as of December 31, 1994 have a weighted
average maturity of 9.8 years with a weighted average interest rate of 8.55%.
The notes issued for businesses acquired in 1987 consist of $1,648,000 in
fixed rate notes (10.13%) due 2007 and $830,000 in variable rate notes due
2008. The fixed rate notes are payable in ten equal annual installments
beginning in 1998. The variable rate notes, which are resettable every three
years based upon a spread over a specified U.S. Treasury note index, are
payable in three equal installments in 2002, 2005 and 2008, unless the holders
exercise put options at earlier dates. In September 1993 the Company paid
$3,385,000 to certain variable rate noteholders who elected to exercise put
options on the three-year anniversary of the reset date as specified in the
notes. This reduced the principal balance of the variable rate notes from
$4,215,000 to $830,000.
The 6 5/8% pollution control revenue bonds issued on behalf of the Company in
1978 are payable in installments of $1,000,000 in the years 1998 and 1999 and
installments of $1,200,000 in the years 2000-2003. The 7 7/8% and 8%
pollution control revenue bonds issued in 1980 were refunded effective
February 1, 1992, at an interest rate of 6 3/8%, and are now payable in 2012.
The variable rate pollution control revenue bonds issued in 1981 and 1984 are
due in 1996 ($1,400,000) and 1999 ($1,600,000), respectively.
Other notes include various obligations with interest rates ranging from 7.49%
to 10.00%. These relate principally to notes issued for acquired properties.
The aggregate principal payments for the five years subsequent to December 31,
1994 are: 1995-$4,715,000; 1996-$7,074,000; 1997-$5,400,000; 1998-$6,565,000;
and 1999-$6,565,000.
The Company is not subject to any contractual restrictions on the aggregate
amount of its indebtedness or minimum working capital, or the amount it may
expend for cash dividends and purchases of its stock.
The estimated fair value amounts of long-term debt have been determined by
discounting expected future cash flows using interest rates on U.S. Treasury
bills, notes or bonds, as appropriate. For cash equivalents, accounts and
notes receivable, current portion of deferred income taxes, accounts payable,
accrued income taxes, accrued interest and other applicable accrued
liabilities, the carrying amounts are a reasonable estimate of fair value. The
fair value estimates presented are based on information available to management
as of December 31, 1994, 1993 and 1992. Although management is not aware of
any factors that would significantly affect the estimated fair value amounts,
such amounts have not been comprehensively revalued since those dates.
6. OPERATING LEASES
Total rental expense of nonmineral leases, exclusive of rental payments made
under leases of one month or less, is summarized as follows (in thousands of
dollars):
1994 1993 1992
Minimum rentals $16,138 $ 7,600 $ 7,247
Contingent rentals (based
principally on usage) 11,212 10,021 8,875
Total $27,350 $17,621 $16,122
Future minimum operating lease payments under all leases with initial or
remaining noncancellable lease terms in excess of one year, exclusive of
mineral leases, at December 31, 1994 range from $2,780,000 to $7,972,000
annually through 1999 and aggregate $9,774,000 thereafter.
Lease agreements frequently include renewal options and require that the
Company pay for utilities, taxes, insurance and maintenance expense. Options
to purchase also are included in some lease agreements.
7. INCOME TAXES
Effective January 1, 1992, the Company adopted SFAS No. 109, Accounting for
Income Taxes. The cumulative effect of applying the new accounting method to
years prior to 1992 increased net earnings by $3,005,000 ($.08 per share),
which was reflected separately in the consolidated statement of earnings for
the first quarter of 1992. The cumulative effect is not included in any of
the summary information provided below. Implementation of the new method
had no material impact on 1994, 1993 or 1992 earnings.
The components of earnings before income taxes are as follows (in thousands of
dollars):
1994 1993 1992
Domestic $143,502 $123,932 $132,370
Foreign 2,404 1,290 (1,644)
Total $145,906 $125,222 $130,726
Provisions for income taxes consist of the following (in thousands of
dollars):
1994 1993 1992
Current:
Federal $34,194 $33,179 $38,798
State and local 7,135 4,277 8,016
Foreign 10 4 19
Total 41,339 37,460 46,833
Deferred:
Federal 5,953 (59) (5,988)
State and local 578 (408) (1,099)
Foreign 60 - -
Total 6,591 (467) (7,087)
Total provision $47,930 $36,993 $39,746
The effective tax rate on income differs from the U. S. statutory rate due to
the following:
1994 1993 1992
Federal statutory tax rate 35.0% 35.0% 34.0%
Increase (decrease) in tax
rate resulting from:
Depletion (7.2) (7.3) (6.2)
State and local income taxes,
net of federal income
tax benefit 3.4 2.0 3.5
Adjustment to net deferred income
tax liability for enacted federal
tax rate change - 0.9 -
Miscellaneous items 1.6 (1.1) (0.9)
Effective tax rate 32.8% 29.5% 30.4%
Deferred income 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 are
as follows (in thousands of dollars):
1994 1993 1992
Deferred tax assets related to:
Accrual for postretirement benefits $12,123 $11,117 $ 9,900
Accrual for environmental reclamation 5,902 8,675 11,639
Accounts receivable, principally
allowance for doubtful accounts 3,780 3,075 2,820
Inventory adjustments 7,079 7,231 6,985
Pensions, incentives and
deferred compensation 7,142 4,827 4,361
Other items 7,765 6,126 5,633
Total deferred tax assets 43,791 41,051 41,338
Deferred tax liabilities related to:
Fixed assets, principally depreciation 92,120 83,175 84,461
Other items 5,259 5,171 4,656
Total deferred tax liabilities 97,379 88,346 89,117
Net deferred tax liability $53,588 $47,295 $47,779
8. PENSION, OTHER POSTRETIREMENT BENEFITS AND INCENTIVE
COMPENSATION PLANS
PENSION PLANS
The Company sponsors three noncontributory, defined benefit pension plans.
These plans cover substantially all employees other than those covered by
union- administered plans. Normal retirement age is 65, but the plans contain
provisions for earlier retirement. Benefits for the Salaried Plan and the
Chemicals Hourly Plan are based on salaries or wages and years of service; the
Construction Materials Hourly Plan provides benefits equal to a flat dollar
amount for each year of service.
Charges to earnings referable to company-administered pension plans totaled
$3,088,000 in 1994, $2,148,000 in 1993 and $2,216,000 in 1992. Components of
the net periodic pension charges are as follows (in thousands of dollars):
1994 1993 1992
Service cost - benefits earned
during the period $ 9,551 $ 8,286 $ 8,072
Interest cost 17,167 16,195 15,465
Actual return on plan assets (3,923) (32,280) (15,176)
Net amortization and deferral (19,707) 9,947 (6,145)
Net periodic pension charge $ 3,088 $ 2,148 $ 2,216
The Company's qualified pension plans have assets in excess of the accumulated
benefit obligation. Plan assets are composed primarily of marketable domestic
and international equity securities, corporate and government debt securities
and real estate. Unrecognized net plan assets at the implementation of SFAS
No. 87, Employers' Accounting for Pensions, in 1986 are being amortized over
the average of the covered employees' remaining service lives, which range from
12 to 16 years. The following table reconciles the funded status of all the
Company's plans with the related amounts recognized in the Company's
consolidated balance sheets at December 31 (in thousands of dollars):
1994 1993 1992
Actuarial present value of
benefit obligations:
Based on employment
service to date
and current salary levels:
Vested $(134,409) $(139,958) $(120,923)
Nonvested (4,792) (5,927) (5,087)
Accumulated benefit
obligation (139,201) (145,885) (126,010)
Effect of projected future
salary increases (68,107) (85,297) (71,511)
Projected benefit
obligation (207,308) (231,182) (197,521)
Plan assets at fair market
value 264,174 271,821 248,558
Plan assets in excess of
projected benefit
obligation 56,866 40,639 51,037
Unamortized portion of
unrecognized net asset
at implementation of
SFAS No. 87 (16,696) (20,167) (23,638)
Unrecognized net gain (38,748) (16,395) (22,300)
Unrecognized prior
service cost 9,151 9,308 10,145
Net prepaid pension cost $ 10,573 $ 13,385 $ 15,244
Annual net periodic pension charges and credits are calculated using plan
assumptions as of the end of the prior year, whereas the funded status and
related pension obligations are determined using the assumptions as of the end
of the current year. Plan assumptions at December 31 were as follows:
1994 1993 1992 1991
Discount rates used to determine
the pension obligations
- First 18 years 8.50% 7.25% 8.00% 8.00%
- Thereafter 8.50 7.25 6.75 6.75
Discount rates used to determine
the net periodic cost and
other recognized gains
- First 18 years 7.25 8.00 8.00 8.00
- Thereafter 7.25 6.75 6.75 6.75
Rates of increase in
compensation levels
(for salary-related plans) 5.00 5.50 5.50 5.50
Expected long-term rates of
return on plan assets 8.25 8.25 8.25 8.25
The Company funds the pension trusts currently in amounts determined under the
individual entry age level premium method, including benefit increases expected
as a result of projected wage and salary increases occurring between the date
of valuation and the individual retirement dates.
Certain of the Company's hourly employees in unions are covered by multi-
employer defined benefit pension plans. Contributions to these plans
approximated $1,617,000 in 1994, $1,637,000 in 1993 and $1,281,000 in 1992.
The actuarial present value of accumulated plan benefits and net assets
available for benefits for employees in the union-administered plans are not
determinable from available information.
POSTRETIREMENT PLANS
In addition to pension benefits, the Company provides certain health care
benefits and life insurance for some retired employees. Substantially all of
the Company's salaried employees and, where applicable, hourly employees may
become eligible for those benefits if they reach at least age 55 and meet
certain service requirements while working for the Company. Generally,
company-provided health care benefits terminate when covered individuals become
eligible for Medicare benefits or reach age 65, whichever first occurs.
The components of net periodic postretirement benefit charges and credits are
as follows (in thousands of dollars):
1994 1993 1992
Service cost - benefits attributed
to service during the period $1,742 $1,536 $1,418
Interest cost 2,919 2,792 2,514
Actual return on assets (150) (136) (124)
Net amortization and deferral 329 178 128
Net periodic postretirement
benefit cost $4,840 $4,370 $3,936
The Company funds the postretirement benefits plan each year through
contributions to a trust fund for health care benefits and through payments of
premiums to providers of life insurance. All assets of the plan relate to the
life insurance and are composed of reserves held by the insurer. The following
table sets forth the combined funded status of the plan and its reconciliation
with the related amounts recognized in the Company's consolidated balance sheet
at December 31 (in thousands of dollars):
1994 1993 1992
Accumulated postretirement
benefit obligation:
Retirees. . . . . . . . . . . . . . . . . . $(10,570) $(11,471) $(10,032)
Fully eligible active
plan participants . . . . . . . . . . . . (11,934) (11,982) (10,788)
Other active plan participants. . . . . . . (18,439) (16,004) (13,363)
Total accumulated postretirement
benefit obligation. . . . . . . . . . . (40,943) (39,457) (34,183)
Plan assets at fair market value. . . . . . . 2,628 2,378 2,171
Accumulated postretirement benefit
obligation in excess of plan assets . . . . (38,315) (37,079) (32,012)
Unrecognized prior service cost . . . . . . . 6 7 7
Unrecognized net loss . . . . . . . . . . . . 7,274 8,495 5,925
Accrued postretirement benefit cost . . . $(31,035) $(28,577) $(26,080)
Annual net periodic postretirement benefit charges and credits are calculated
using plan assumptions as of the end of the prior year, whereas the funded
status and related benefit obligations are determined using the assumptions
as of the end of the current year. Plan assumptions at December 31 were as
follows:
1994 1993 1992 1991
Discount rates
- First 18 years. . . . . . . . . . 8.50% 7.25% 8.00% 8.00%
- Thereafter . . . . . . . . . . . 8.50 7.25 6.75 6.75
Expected long-term rate of
return on plan assets . . . . . . . 7.00 7.00 7.00 7.00
Rate of increase in per
capita claims cost
- First year . . . . . . . . . . . 12.0 13.0 14.0 7.5
- Ultimate rate . . . . . . . . . . 6.0 6.0 6.0 7.5
Effective December 31, 1992, the assumed annual rate of increase in per capita
claims cost was changed to reflect current rates of claims cost increase. A
decrease of 1.0% per year in the rate is assumed until an ultimate rate of 6.0%
is achieved. If the health care cost trend rates were increased 1.0% each
year, the accumulated postretirement benefit obligation as of December 31, 1994
would have increased by $4,121,000 (or 10.1%) and the aggregate of the service
and interest cost for 1994 would have increased by $451,000 (or 9.7%).
INCENTIVE COMPENSATION PLANS
The Company has a number of incentive compensation plans under which awards are
made to officers and other key employees. Expense provisions referable to the
plans amounted to $7,494,000 in 1994, $4,295,000 in 1993 and $7,467,000 in
1992. The expense provisions for these plans reflect the cost of distributions
payable currently as well as distributions that may be payable in future
periods if certain conditions are satisfied. Expense provisions for certain of
the plans also are affected by changes in the market value of the Company's
common stock.
9. OTHER COMMITMENTS AND CONTINGENT LIABILITIES
In 1987 the Company formed three jointly owned companies with Industrias ICA,
S.A. de C.V., ("Indica"), a principal member of Grupo ICA, one of Mexico's
leading diversified industrial entities, to develop and operate a limestone
quarry on Mexico's Yucatan Peninsula and to import Mexican crushed stone for
sale along the U.S. Gulf Coast (the "Crescent Market Project"). The
shareholder agreements for these three companies provide that each sponsor will
contribute its share of the equity required to fund the project. The Company's
share of $68,608,000 had been contributed as of December 31, 1994; Indica
contributed a substantially equal pro rata amount. Two of the jointly owned
companies have entered into term loan agreements to fund up to $90,750,000 of
their investments. The current balance of these loans is $62,139,000. The
Company and Indica have agreed to guarantee these loans on a several and pro
rata basis equal to approximately 50% each. Certain of the loan guarantees
will be terminated if and when the project meets defined financial tests. In
addition, the Company has approximately $3,700,000 outstanding from the three
companies at December 31, 1994 as its share of loans to the project.
Other commitments of the Company include the purchase of property, plant and
equipment approximating $8,234,000 at December 31, 1994.
The Company is a defendant in various lawsuits incident to the ordinary course
of business. It is not possible to determine with precision the probable
outcome or the amount of liability, if any, under these lawsuits; however, in
the opinion of the Company and its counsel, the disposition of these lawsuits
will not adversely affect the consolidated financial statements of the Company
to a material extent.
The Company received a letter from the United States Environmental Protection
Agency ("EPA") in May 1985 regarding remedial actions at a chemical waste site
in Ascension Parish, Louisiana. Records indicate that the Company generated a
portion of the waste placed at the site, and the Company therefore has been
deemed by the EPA to be a potentially responsible party ("PRP") with respect to
the site under the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA").
On February 5, 1991, the EPA issued a unilateral administrative order ("UAO")
which directs the named respondents, including the Company and other PRPs, to
clean up the site. In a letter dated April 9, 1991, the Company, along with
three other PRPs named in the UAO gave notice to the EPA that they intend to
comply with all lawful terms and conditions of the UAO. Effective June 8,
1992, the Company and other PRPs entered into a Site Participation Agreement
("Agreement") allocating among the parties those costs which are anticipated to
be incurred or which might be incurred in connection with the remediation
activity in connection with their past response work or oversight work at the
site.
Cleanup of the site is in progress and expected to be completed during 1995.
Experience to-date in conducting EPA's final remediation plan suggests that the
cost originally estimated to perform the cleanup is likely to be exceeded when
the remediation is completed.
In December 1988, the Company and other PRPs received a letter from the EPA
demanding reimbursement for approximately $1,540,000 in past costs and
administrative expenses incurred by the EPA in connection with the foregoing
matter. In June 1992, the EPA orally informed the Company and other PRPs that
it would seek to recover its response and oversight costs incurred to date, and
toward that end made a supplemental Information Request, pursuant to Section
104(e) of CERCLA, seeking information to support such recovery of costs. The
Company responded to the Information Request on July 14, 1992. In 1994 the
Company was advised that EPA intends to demand reimbursement of past response
costs in a sum in excess of the $1,540,000 total demanded in 1988.
Considering (i) the likelihood of higher than originally estimated remediation
costs, and (ii) the intent of the EPA to seek response and oversight costs in
excess of the amount of the 1988 notification, the Company decided to increase
its accrued reserve by the total amount of $7,000,000 in 1994. The Company has
reviewed the cost estimates for completing the remediation and such information
as is currently available relative to those past response costs that EPA may
seek to recover from the Company and other PRPs. On the basis of this review,
the Company has determined that its accrued reserve is adequate based on
information currently available to cover its allocated share of currently
anticipated site remediation costs and those response and oversight costs which
may be recovered by the EPA. The Company will continue to review relevant cost
information as it becomes available, particularly information relative to the
EPA's request for recovery of its costs.
The Company has been identified by government authorities and certain private
parties as potentially responsible for cleanup costs at various other sites,
including sites formerly owned and operated by the Company. The operations of
the Company also continue to be affected by the compliance requirements of
various laws, regulations, administrative orders and permits relating to
protection of the environment. Although future costs of cleanup at other sites
and the future costs of environmental compliance may be significant, the
Company does not believe that these matters and the aforementioned potential
share of cleanup costs for the Ascension Parish site will adversely affect the
consolidated financial position of the Company to a material extent.
The Company's consolidated balance sheets as of December 31 include accrued
environmental cleanup costs for the Chemicals segment of $12,867,000 for 1994,
$19,100,000 for 1993 and $26,530,000 for 1992. The 1993 and 1992 amounts
include noncurrent liabilities of $5,701,000 and $17,458,000, respectively.
In 1987 the Company discontinued its former Metals segment and recorded a loss
on disposal that reflected provisions for phaseout costs, including the
estimated cost of contractual liabilities associated with environmental
remediation at several Metals plants. Whereas the costs for many contractual
liabilities associated with environmental remediation were reasonably
ascertainable when an additional provision for estimated phaseout costs was
recorded in 1989, the estimates for other such liabilities vary widely and
could result in future increases, or possibly decreases, in the total provision
for phaseout costs. Factors that might have an impact on such estimates
include the results of further environmental testing, engineering analyses and
planning, and negotiations among interested parties. The Company has completed
several environmental remediation projects at certain of these Metals plants,
and expenditures were within recorded provisions. While completion of these
projects represents significant progress in addressing the contractual
liabilities, several substantial remediation projects remain to be completed by
the Company.
Current liabilities reported on the Company's consolidated balance sheets
include accrued provisions for discontinued operations in the following amounts
as of December 31: $2,649,000 in 1994; $1,583,000 in 1993 and $2,666,000 in
1992. In addition, other noncurrent liabilities include $493,000 in 1994 and
$2,650,000 each in 1993 and 1992 referable to discontinued operations.
10. COMMON STOCK
A total of 11,103,663 shares has been purchased at a cost of $392,523,000
pursuant to a common stock purchase plan initially authorized by the Board of
Directors in July 1985 and increased in subsequent years, and pursuant to a
tender offer during the period November 5, 1986 through December 4, 1986. The
number of shares remaining under purchase authorizations is 2,500,000 shares.
11. SEGMENT DATA
Operations in the Company's Construction Materials segment principally involve
the production and sale of crushed aggregates and related products and
services. The Chemicals segment produces and sells basic industrial and
specialty chemicals.
Segment data referable to net sales to unaffiliated customers, earnings,
property additions, and depreciation, depletion and amortization are provided
in Segment Financial Data on pages 58 and 59.
The Company's determination of segment earnings recognizes equity in the income
or losses of nonconsolidated affiliates as part of segment earnings and also
reflects allocations of general corporate expenses to the segments. SFAS No.
14, Financial Reporting for Segments of a Business Enterprise, does not provide
for the inclusion of these items in "operating profit or loss of reportable
segments." The net amounts of those items were expenses of $14,110,000 in
1994, $15,542,000 in 1993 and $17,819,000 in 1992.
Segment earnings are reconciled with earnings before income taxes as follows
(in thousands of dollars):
1994 1993 1992
Segment earnings $155,156 $134,089 $139,609
Interest income, etc. 571 304 885
Interest expense (9,821) (9,171) (9,768)
Earnings before income taxes $145,906 $125,222 $130,726
Identifiable assets by segment at December 31 are as follows (in thousands
of dollars):
1994 1993 1992
Construction Materials $ 678,793 $ 670,079 $ 688,898
Chemicals 389,491 288,720 285,163
Total identifiable assets 1,068,284 958,799 974,061
Investment in
nonconsolidated
affiliates 53,902 51,054 43,424
General corporate assets 51,241 54,702 50,761
Cash items 7,717 13,996 15,669
Total assets $1,181,144 $1,078,551 $1,083,915
12. SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental information referable to the Consolidated Statements of Cash
Flows is summarized below (amounts in thousands):
1994 1993 1992
Cash payments:
Interest (exclusive of
amount capitalized) $ 9,762 $ 9,198 $10,073
Income taxes 36,846 41,393 45,413
Noncash investing and
financing activities:
Amounts referable to
business acquisitions:
Liabilities assumed 12,198 - 213
Fair value of stock issued 6,443 - -
13. CALLAWAY CHEMICAL ACQUISITION
On August 1, 1994, the Company acquired the net assets and business of Callaway
Chemical Company from Exxon Chemical Company. In a related transaction, the
Company also acquired the net assets and business of Comcor Chemicals Limited
from Exxon Corporation's affiliated Canadian company, Imperial Oil Limited.
The Company paid cash for the assets acquired. The purchase price paid for all
assets, including net working capital, was approximately $82,000,000. Funds
for the purchase price were primarily obtained by the Company through issuance
and sale of short-term notes.
On a pro forma basis, as if the assets and businesses had been acquired at the
beginning of each fiscal year, consolidated revenues of the Company would have
increased by $84,900,000 in 1994 and $51,800,000 in 1993. On a pro forma
basis, net income and earnings per share would not differ materially with
amounts reflected in the Company's consolidated financial statements. Pro
forma results do not purport to be indicative of results of operations which
may be obtained in the future.
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
AND INTERNAL CONTROL
The Shareholders of Vulcan Materials Company:
Vulcan's management acknowledges and accepts its responsibility for all the
information contained in the financial statements and other sections of this
report. The statements were prepared in conformity with generally accepted
accounting principles appropriate in the circumstances and we believe they
reflect fairly the Company's financial position, results of operations and cash
flows for the periods shown. The financial statements necessarily reflect our
informed judgments and estimates of the expected outcome of numerous current
events and transactions.
The Company maintains an internal control structure which we believe provides
reasonable assurance that the Company's financial statements, books and records
accurately reflect the Company's financial condition, results of operations and
cash flows and that the Company's assets are safeguarded from loss or
unauthorized use. This internal control structure includes well-defined and
communicated policies and procedures, organizational structures that provide
for appropriate separations of responsibilities, high standards applied in the
selection and training of management personnel, and adequate procedures for
properly assessing and applying accounting principles, including careful
consideration of the accuracy and appropriateness of all significant accounting
estimates. Vulcan also has an internal audit function that continually reviews
compliance with established policies and procedures.
The Company's independent auditors, Deloitte & Touche LLP, consider the internal
control structure as a part of their audits of the Company's financial
statements and provide an independent opinion as to the fairness of the
presentation of those statements. Their report is presented below.
The Board of Directors pursues its oversight role for the financial statements
and internal control structure in major part through the Audit Review
Committee, which is composed of five outside directors. In addition, the full
Board regularly reviews detailed management reports covering all aspects of the
Company's financial affairs. The Audit Review Committee meets periodically
with management, the independent auditors and the internal auditors to review
the work of each and to ensure that each is properly discharging its
responsibilities. To ensure independence, the Committee also meets on these
matters with the internal and independent auditors without the presence of
management representatives.
D. F. Sansone
Vice President, Finance
February 3, 1995
INDEPENDENT AUDITORS' REPORT
The Shareholders of Vulcan Materials Company:
We have audited the accompanying consolidated balance sheets of Vulcan
Materials Company and its subsidiary companies as of December 31, 1994,
1993, and 1992, and the related consolidated statements of earnings,
shareholders' equity, and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Vulcan Materials Company
and its subsidiary companies at December 31, 1994, 1993 and 1992, and the
results of their operations and their cash flows for the years then ended
in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Birmingham, Alabama
February 3, 1995
FINANCIAL TERMINOLOGY
Capital employed For the Company; the sum of interest-bearing debt,
capitalized lease obligations, other noncurrent
liabilities and shareholders' equity; for a segment:
the net sum of the segment's assets, current
liabilities, and allocated corporate assets and
current liabilities, exclusive of cash items and
short-term debt.
Cash items The sum of cash, cash equivalents and short-term
investments
Common shareholders' The sum of common stock (less the cost of common
equity stock in treasury), capital in excess of par value and
retained earnings, as reported in the balance sheet
Long-term capital The sum of long-term debt, long-term capitalized
lease obligations, other noncurrent liabilities and
shareholders' equity
Operating income from For the Company: net earnings from continuing
continuing operations operations plus the after-tax cost of interest
after taxes expense; for a segment: segment earnings less the
segment's computed share of the consolidated
provision for income taxes
Property additions * Capitalized replacements of and additions to
property, plant and equipment (and such asses of
businesses acquired), including capitalized leases,
renewals and betterments; each segment's property
additions include allocated corporate amounts
Ratio of earnings to The sum of earnings from continuing operations
fixed charges before income taxes, amortization of capitalized
interest and fixed charges net of interest
capitalization credits, divided by fixed charges.
Fixed charges are the sum of interest expense
before capitalization credits, amortization of
financing costs and one-third of rental expense.
Segment earnings Earnings before interest expense and income taxes
and after allocation of corporate expenses and
income, other than "interest income, etc,"
(principally interest income earned on cash items
and gains or losses on corporate financing
transactions), and after assignment of equity income
to the segments with which it is related in terms of
products and services. Allocations are based
primarily on one or a combination of the following
factors: average gross investment, average equity
and sales.
Short-term debt The sum of current interest-bearing debt, including
current maturities of long-term debt and capitalized
lease obligations, and interest-bearing notes payable
* The Company classifies its property additions into three categories based
upon the predominant purpose of the project expenditures. Thus, a project
is classified entirely as a replacement if that is the principal reason for
making the expenditure even though the project may involve some cost saving
and/or capacity improvement aspects. Likewise, a profit-adding project is
classified entirely as such if the principal reason for making the
expenditure is to add operating facilities at new locations (which
occasionally replace facilities at old locations), to add product lines,
to expand the capacity of existing facilities, to reduce costs, to
increase mineral reserves or to improve products, etc.
Property additions classified as environmental control expenditures do not
reflect those expenditures for environmental control activities, including
industrial health programs, which are expensed currently. Such
expenditures are made on a continuing basis and at significant levels in
each of the Company's segments. Frequently, profit-adding and major
replacement projects also include expenditures for environmental control
purposes.
EX-21
6
SUBSIDIARIES
VULCAN MATERIALS COMPANY
SUBSIDIARIES
AS OF DECEMBER 31, 1994
STATE OR OTHER % OWNED
JURISDICTION OF DIRECTLY OR
INCORPORATION INDIRECTLY
ENTITY OR ORGANIZATION BY VULCAN
Subsidiaries
Atlantic Granite Company* South Carolina 33
Birmingham Slag Company* Alabama 100
BRT Transfer Terminal, Inc. Kentucky 100
Calizas Industriales del Carmen, S.A. de C.V. Mexico 49
Callaway Chemical Company New Jersey 100
Callaway Chemical Limited British Columbia 100
Central States Materials, Inc. Kentucky 100
CSM Trucking Company, Inc. Tennessee 100
Dixie Sand and Gravel Company* Tennessee 100
Kapkowski Road Properties, Inc.* New Jersey 100
Knoxville Mack Distributors, Inc.* Tennessee 100
Lambert Bros., Inc.* Tennessee 100
Midsouth Machine and Service Company Tennessee 100
Peroxidation Systems GmbH Germany 100
Reco Transportation, Inc. Kentucky 100
Reed Crushed Stone Company, Incorporated Kentucky 100
Reed Terminal Company, Inc. Kentucky 100
Statewide Transport, Inc. Texas 100
Vulcan/ICA Distribution Company (Partnership) Texas 51
Vulcan Gulf Coast Aggregates, Inc. New Jersey 100
Vulcan Gulf Coast Materials, Inc. New Jersey 100
Vulcan International, Ltd. U.S. Virgin Islands 100
Vulcan Lands, Inc. New Jersey 100
Vulcan Peroxidation Systems Inc. New Jersey 100
Vulcan Soda Ash Company California 100
VULICA Shipping Company, Limited Bahamas 50
Wanatah Trucking Co., Inc. Indiana 100
Wesco Contracting Company* Tennessee 100
White's Mines, Inc.* Texas 100
* Inactive
EX-24.1
7
POWERS OF ATTORNEY
POWER OF ATTORNEY
STATE OF CONNECTICUT )
COUNTY OF FAIRFIELD )
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints W. F. Denson, III, and
E. Starke Sydnor, and each of them, the true and lawful attorneys of the
undersigned to sign the name of the undersigned as director to the Report on
Form 10-K for the year ended December 31, 1994 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to said
report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan
Materials Company has executed this Power of Attorney this 25th day of
January, 1995.
/s/ Marion H. Antonini
Marion H. Antonini
STATE OF CONNECTICUT )
COUNTY OF FAIRFIELD )
On this 25th day of January in the year 1995, before me, Cynthia G.
Puchalski, a Notary Public of said State, duly commissioned and sworn,
personally appeared Marion H. Antonini, known to me to be the person whose
name is subscribed to the within instrument, and acknowledged that he
executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Cynthia G. Puchalski
Notary Public in and for said State
[SEAL] My Commission Expires: 6/30/98
EX-24.2
8
POWERS OF ATTORNEY
POWER OF ATTORNEY
STATE OF MINNESOTA )
COUNTY OF RAMSEY )
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints W. F. Denson, III, and
E. Starke Sydnor, and each of them, the true and lawful attorneys of the
undersigned to sign the name of the undersigned as director to the Report on
Form 10-K for the year ended December 31, 1994 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to said
report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan
Materials Company has executed this Power of Attorney this 25th day of
January, 1995.
/s/Livio D. DeSimone
Livio D. DeSimone
STATE OF MINNESOTA )
COUNTY OF RAMSEY )
On this 25th day of January in the year 1995, before me, Kathleen M.
Cramer, a Notary Public of said State, duly commissioned and sworn,
personally appeared Livio D. DeSimone, known to me to be the person whose
name is subscribed to the within instrument, and acknowledged that he
executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Kathleen M. Cramer
Notary Public in and for said State
[SEAL]
My Commission Expires: 12/18/95
EX-24.3
9
POWERS OF ATTORNEY
POWER OF ATTORNEY
STATE OF ALABAMA )
COUNTY OF JEFFERSON )
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints W. F. Denson, III, and
E. Starke Sydnor, and each of them, the true and lawful attorneys of the
undersigned to sign the name of the undersigned as director to the Report on
Form 10-K for the year ended December 31, 1994 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to said
report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan
Materials Company has executed this Power of Attorney this 8th day of
March, 1995.
/s/ William J. Grayson, Jr.
William J. Grayson, Jr.
STATE OF ALABAMA )
COUNTY OF JEFFERSON )
On this 8th day of March in the year 1995, before me, Mary Angela
Miller, a Notary Public of said State, duly commissioned and sworn, personally
appeared William J. Grayson, Jr., known to me to be the person whose name
is subscribed to the within instrument, and acknowledged that he executed the
same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Mary Angela Miller
Notary Public in and for said State
[SEAL]
My Commission Expires: 11/14/95
EX-24.4
10
POWERS OF ATTORNEY
POWER OF ATTORNEY
STATE OF ILLINOIS )
COUNTY OF COOK )
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints W. F. Denson, III, and
E. Starke Sydnor, and each of them, the true and lawful attorneys of the
undersigned to sign the name of the undersigned as director to the Report on
Form 10-K for the year ended December 31, 1994 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to said
report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan
Materials Company has executed this Power of Attorney this 23rd day of
January, 1995.
/s/John K. Greene
John K. Greene
STATE OF ILLINOIS )
COUNTY OF COOK )
On this 23rd day of January in the year 1995, before me, Barbara A.
Hohmann, a Notary Public of said State, duly commissioned and sworn,
personally appeared John K. Greene, known to me to be the person whose
name is subscribed to the within instrument, and acknowledged that he
executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Barbara A. Hohmann
Notary Public in and for said State
[SEAL]
My Commission Expires: 3/19/98
EX-24.5
11
POWERS OF ATTORNEY
POWER OF ATTORNEY
STATE OF GEORGIA )
COUNTY OF HALL )
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints W. F. Denson, III, and
E. Starke Sydnor, and each of them, the true and lawful attorneys of the
undersigned to sign the name of the undersigned as director to the Report on
Form 10-K for the year ended December 31, 1994 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to said
report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan
Materials Company has executed this Power of Attorney this 25th day of
January, 1995.
/s/Richard H. Leet
Richard H. Leet
STATE OF GEORGIA )
COUNTY OF HALL )
On this 25th day of January in the year 1995, before me, Janey R.
Smith, a Notary Public of said State, duly commissioned and sworn, personally
appeared Richard H. Leet, known to me to be the person whose name is
subscribed to the within instrument, and acknowledged that he executed the
same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Janey R. Smith
Notary Public in and for said State
[SEAL]
My Commission Expires: 1/24/98
EX-24.6
12
POWERS OF ATTORNEY
POWER OF ATTORNEY
STATE OF OHIO )
COUNTY OF CUYAHOGA )
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints W. F. Denson, III, and
E. Starke Sydnor, and each of them, the true and lawful attorneys of the
undersigned to sign the name of the undersigned as director to the Report on
Form 10-K for the year ended December 31, 1994 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to said
report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan
Materials Company has executed this Power of Attorney this 23rd day of
January, 1995.
/s/ Douglas J. McGregor
Douglas J. McGregor
STATE OF OHIO )
COUNTY OF CUYAHOGA )
On this 23rd day of January in the year 1995, before me, Barbara A.
Haag, a Notary Public of said State, duly commissioned and sworn, personally
appeared Douglas J. McGregor, known to me to be the person whose name is
subscribed to the within instrument, and acknowledged that he executed the
same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Barbara A. Haag
Notary Public in and for said State
[SEAL]
My Commission Expires: 1/7/98
EX-24.7
13
POWERS OF ATTORNEY
POWER OF ATTORNEY
DISTRICT OF COLUMBIA )
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints W. F. Denson, III, and
E. Starke Sydnor, and each of them, the true and lawful attorneys of the
undersigned to sign the name of the undersigned as director to the Report on
Form 10-K for the year ended December 31, 1994 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to said
report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan
Materials Company has executed this Power of Attorney this 23rd day of
January, 1995.
/s/Ann D. McLaughlin
Ann D. McLaughlin
DISTRICT OF COLUMBIA )
On this 23rd day of January in the year 1995, before me, Sarah A.
Agnew, a Notary Public of said State, duly commissioned and sworn,
personally appeared Ann D. McLaughlin, known to me to be the person whose
name is subscribed to the within instrument, and acknowledged that he
executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Sarah A. Agnew
Notary Public in and for said State
[SEAL]
My Commission Expires: 5-31-96
EX-24.8
14
POWERS OF ATTORNEY
POWER OF ATTORNEY
STATE OF GEORGIA )
COUNTY OF FULTON )
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints W. F. Denson, III, and
E. Starke Sydnor, and each of them, the true and lawful attorneys of the
undersigned to sign the name of the undersigned as director to the Report on
Form 10-K for the year ended December 31, 1994 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to said
report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan
Materials Company has executed this Power of Attorney this 3rd day of
February, 1995.
/s/James V. Napier
James V. Napier
STATE OF GEORGIA )
COUNTY OF FULTON )
On this 3rd day of February in the year 1995, before me, Rheta
Johnson, a Notary Public of said State, duly commissioned and sworn,
personally appeared James V. Napier, known to me to be the person whose
name is subscribed to the within instrument, and acknowledged that he
executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Rheta Johnson
Notary Public in and for said State
[SEAL]
My Commission Expires: 6/19/95
EX-24.9
15
POWERS OF ATTORNEY
POWER OF ATTORNEY
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES )
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints W. F. Denson, III, and
E. Starke Sydnor, and each of them, the true and lawful attorneys of the
undersigned to sign the name of the undersigned as director to the Report on
Form 10-K for the year ended December 31, 1994 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to said
report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan
Materials Company has executed this Power of Attorney this 27th day of
January, 1995.
/s/ Donald B. Rice
Donald B. Rice
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES )
On this 27th day of January in the year 1995, before me, Frances B.
DeVincent, a Notary Public of said State, duly commissioned and sworn,
personally appeared Donald B. Rice, known to me to be the person whose
name is subscribed to the within instrument, and acknowledged that he
executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Frances B. DeVincent
Notary Public in and for said State
[SEAL]
My Commission Expires: 9/24/98
EX-24.10
16
POWERS OF ATTORNEY
POWER OF ATTORNEY
STATE OF NEW JERSEY )
COUNTY OF MIDDLESEX )
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints W. F. Denson, III, and
E. Starke Sydnor, and each of them, the true and lawful attorneys of the
undersigned to sign the name of the undersigned as director to the Report on
Form 10-K for the year ended December 31, 1994 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to said
report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan
Materials Company has executed this Power of Attorney this 6th day of
February, 1995.
/s/Orin R. Smith
Orin R. Smith
STATE OF NEW JERSEY )
COUNTY OF MIDDLESEX )
On this 6th day of February in the year 1995, before me, Theresa
Richards, a Notary Public of said State, duly commissioned and sworn,
personally appeared Orin R. Smith, known to me to be the person whose
name is subscribed to the within instrument, and acknowledged that he
executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Theresa Richards
Notary Public in and for said State
[SEAL]
My Commission Expires: 6/27/95
EX-27
17
5
1000
YEAR
DEC-31-1994
DEC-31-1994
7717
0
187559
8244
112481
336798
1808888
1107131
1181144
211348
97380
46573
0
0
685056
1181144
1253360
1253360
985198
985198
5526
990
9821
145906
47930
97976
0
0
0
97976
2.67
2.67
EX-99
18
SCHEDULE II
SCHEDULE II
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the Years Ended December 31, 1994, 1993 and 1992
Amounts in thousands
Column A Column B Column C Column D Column E Column F
Additions Charged to
Balance at Costs Balance
Beginning and Other at End of
Description of Period Expenses Accounts Deductions Period
Reserves deducted from assets to
which they apply:
1994
Accrued environmental costs $19,100 $ 7,833 $ 14,066 (1) $ 12,867
Doubtful receivables 7,284 1,001 $ 70 112 (2) 8,243
All other (3) 2,428 2,005
1993
Accrued environmental costs $26,530 $ (110) $ 7,320 (1) $ 19,100
Doubtful receivables 6,814 1,237 767 (2) 7,284
All other (3) 5,078 2,428
1992
Accrued environmental costs $30,371 $ 3,184 $ 7,025 (1) $ 26,530
Doubtful receivables 6,267 1,666 1,119 (2) 6,814
All other (3) 5,265 5,078
(1) Expenditures on environmental remdiation projects
(2) Write-offs of uncollected accounts and worthless notes, less recoveries
(3) Valuation and qualifying accounts and reserves for which additions, deductions and balances are not individually significant