Exhibit 99.1 |
VULCAN ANNOUNCES RECORD SECOND QUARTER RESULTS |
Birmingham, Alabama - July 31, 2006 - Vulcan Materials Company (NYSE:VMC) announced today that second quarter earnings from continuing operations increased 50 percent to a record level of $1.47 per diluted share as compared to $0.98 per diluted share in the prior year. Second quarter earnings per diluted share include $0.15 attributable to the sale of certain contractual rights and $0.06 due to an increase in the carrying value of the ECU earn-out (see Table E), partially offset by $0.03 referable to an adjustment to estimated income tax liabilities for prior years. Operating income was approximately $218 million, an increase of 42 percent from the prior year's second quarter. Second quarter net earnings of $1.45 per diluted share include a $0.02 per diluted share loss from discontinued operations. |
TABLE A | ||||
Vulcan Materials Company and Subsidiary Companies | ||||
(Amounts and shares in thousands, except per share data) | ||||
Consolidated Statements of Earnings | Three Months Ended | Six Months Ended | ||
2006 | 2005 | 2006 | 2005 | |
Net sales | $807,781 | $705,348 | $1,450,053 | $1,184,748 |
TABLE B | |||
Vulcan Materials Company and Subsidiary Companies | (Amounts in thousands) | ||
Consolidated Balance Sheets | June 30 | December 31 | June 30 |
TABLE C | ||
Vulcan Materials Company and Subsidiary Companies | (Amounts in thousands) | |
| 2006 | 2005 |
TABLE D | |||
Notes to Condensed Consolidated Financial Statements | |||
| 2006 | 2005 |
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Three Months Ended | Six Months Ended | |||
| 2006 | 2005 | 2006 | 2005 |
*Represents tons shipped to our non-aggregates operations (e.g., asphalt mix and concrete). |
TABLE E | ||||
3. Reconciliation of Non-GAAP Performance Measures (Amounts in thousands, except per share data) | ||||
Three Months Ended | Six Months Ended | |||
| 2006 | 2005 | 2006 | 2005 |
GAAP Earnings from continuing operations, |
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GAAP Diluted earnings per share from continuing |
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(1) During the second quarter of 2006, the Company recognized a $25 million pretax gain from the sale of its contractual rights to mine the Bellwood quarry in Atlanta, Georgia. The City of Atlanta plans to convert the property into a city park and greenspace as part of a larger economic growth and development project around the city's perimeter. The Company worked with city and county officials to achieve this mutually beneficial transaction. Over the next two years, the Company will continue operating the quarry as it transitions customers to its existing 12 quarries in the greater Atlanta area and to a new, zoned site purchased in 2004 in anticipation of the Bellwood sale.
(2) In June 2005, the Company sold substantially all the assets of its Chemicals business, known as Vulcan Chemicals, to a subsidiary of Occidental Chemical Corporation, Basic Chemicals. Subject to certain conditions as defined in a separate earn-out agreement, Basic Chemicals is required to make future payments based on ECU and natural gas prices during the five-year period beginning July 1, 2005, and is capped at $150 million (ECU earn-out or ECU derivative). The ECU earn-out is accounted for as a derivative instrument; accordingly, it is reported at fair value. Changes to the fair value of the ECU derivative are recorded within continuing operations pursuant to SAB Topic 5:Z:5.
(3) The Company prepares and reports its financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Internally, management monitors the operating performance of its construction materials business using non-GAAP metrics similar to those above. These non-GAAP measures exclude the effects of two items, described more fully above: 1) the gain on the sale of contractual rights at the Bellwood quarry in Atlanta, Georgia, during the second quarter of 2006 (included in other operating income, net in the accompanying condensed consolidated statements of earnings), and 2) the ECU earn-out obtained in connection with the June 2005 sale of our Chemicals business, including the associated changes in carrying value (included in other income, net in the accompanying condensed consolidated statements of earnings).
In Management's opinion, these non-GAAP measures are important indicators of the ongoing operations of our construction materials business and provide better comparability between reporting periods because they exclude items that may not be indicative of or are unrelated to our core business and provide a better baseline for analyzing trends in our core operations. The Company does not, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The Company believes the disclosure of the effects of these items increases the reader's understanding of the underlying performance of the business and that such non-GAAP financial measures provide investors with an additional tool to evaluate our financial results and assess our prospects for future performance.