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Independent Auditors' Report | 2 |
INDEPENDENT AUDITORS' REPORT
To the Administrative Committee of Vulcan Materials Company
Construction Materials Divisions Hourly Employees Savings Plan:
We have audited the accompanying statements of net assets available for benefits of the Vulcan Materials Company Construction Materials Divisions Hourly Employees Savings Plan (the "Plan") as of December 31, 2002 and 2001, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 financial statements present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2002 and 2001, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Birmingham, Alabama
June 13, 2003
VULCAN MATERIALS COMPANY | ||
ASSETS | 2002 | 2001 |
INVESTMENTS [Cost of $53,449,493 (2002) |
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VULCAN MATERIALS COMPANY | ||
ADDITIONS (DEDUCTIONS) TO NET ASSETS |
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INVESTMENT INCOME: |
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: |
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VULCAN MATERIALS COMPANY
CONSTRUCTION MATERIALS DIVISIONS HOURLY EMPLOYEES SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||
General - The financial statements of the Vulcan Materials Company Construction Materials Divisions Hourly Employees Savings Plan (the "Plan") have been prepared on the accrual basis of accounting. All assets of the Plan are held by the Northern Trust Company of Chicago, Illinois (the "Trustee"). Vulcan Materials Company ("Company") pays the administrative costs of the Plan, including the Trustee's fees and charges. | |||||||||||
2. | DESCRIPTION OF THE PLAN | ||||||||||
General - The Plan, established effective October 1, 1983 and most recently restated effective October 1, 2002 provides for additional investment options and daily valuation of individual account balances, and is defined contribution employee benefit plan. The purpose of the Plan is to provide for accumulation of savings for qualifying non-union hourly employees of the Company's Southeast, Mideast, Midsouth, Southwest, Western, Southern and Midwest Divisions and its wholly owned subsidiaries, Vulcan Gulf Coast Materials and RECO Transportation, LLC, (collectively, the "Participating Companies"). | |||||||||||
3. | NET REALIZED INVESTMENT GAINS | ||||||||||
Aggregate | Aggregate | Net Realized | |||||||||
2002 |
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4. | INVESTMENTS | ||||||||||
The Plan's investment assets consist of an interest in one of the investment accounts of the Vulcan Materials Company Master Trust ("Master Trust") administered by Northern Trust Company. Use of the Master Trust permits the commingling of investment assets of a number of employee benefit plans of the Participating Companies. Although the assets are commingled, the Company maintains supporting records for the purpose of allocating the investment assets and the related net earnings to the various participating employee benefit plans. | |||||||||||
| 2002 | 2001 | |||||||||
The net assets of the Master Trust at December 31, 2002 and 2001 are summarized as follows: | |||||||||||
| 2002 | 2001 | |||||||||
The total investment income (loss) by type of the Master Trust for the years ended December 31, 2002 and 2001 is summarized as follows: | |||||||||||
| 2002 | 2001 | |||||||||
Investments held by the Plan at December 31, 2002 and 2001 and changes in unrealized appreciation (depreciation) of investments for the years then ended, are as follows: | |||||||||||
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| Market | Appreciation | ||||||||
The guaranteed investment contracts were established in 1991 with Metropolitan Life with a guaranteed rate, net of insurance company charges, of 6.20% and an annual maturity date of May 1. Upon maturity, the Company renegotiates new terms on these contracts. The interest rate was 6.00% from January 1 - April 30, 2001; 5.75% from May 1 - December 31, 2001; 5.50% from January 1 - April 30, 2002; and 5.75% from May 1- December 31, 2002. | |||||||||||
5. | INVESTMENT PROGRAM | ||||||||||
All contributions of Participating Companies are invested in the fund which consists of the Company's common stock. With respect to investment alternatives (1) the guaranteed investment contracts fund, (2) the S&P 500 index fund, (3) the large-cap value index fund, (4) the small-cap value index fund, (5) the large-cap growth index fund, (6) the small-cap growth index fund, (7) the international equity fund, (8) the Vulcan Materials Company common stock fund, and (9) through (13) the balanced funds, investment managers have been appointed whose duty it is to advise the Trustee as to particular investments to be made. At December 31, 2002, the investment managers were as follows: | |||||||||||
(1) Guaranteed investment contracts fund | Metropolitan Life Insurance Company | ||||||||||
6. | TAX STATUS | ||||||||||
The Plan obtained its latest determination letter on January 10, 2003, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. |
SIGNATURES | |
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee (or other person who administers the employee benefit plan) has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. | |
| VULCAN MATERIALS COMPANY |