Exhibit 99.1
![](https://capedge.com/proxy/8-K/0001157523-07-000853/vulcan_logo.jpg)
January 31, 2007
FOR IMMEDIATE RELEASE
Investor Contact: Mark Warren (205) 298-3220
Media Contact: David Donaldson (205) 298-3220
VULCAN ANNOUNCES RECORD QUARTERLY SALES AND EARNINGS
Earnings per Share from Continuing Operations Increase 34%
Earnings per Share from Continuing Operations Increase 34%
Birmingham, Alabama - January 31, 2007 - Vulcan Materials Company (NYSE:VMC) today announced record fourth quarter and full year sales and earnings. Earnings from continuing operations were $115 million or $1.19 per diluted share in the fourth quarter as compared with $92 million or $0.89 per diluted share in the prior year. Net sales increased 9 percent from the prior year’s fourth quarter. Full year net sales increased 16 percent to $3 billion. Earnings from continuing operations were $477 million or $4.79 per diluted share, a 45 percent increase per diluted share from the prior year.
Don James, Vulcan’s Chairman and Chief Executive Officer, stated, “We achieved excellent earnings growth in the fourth quarter, demonstrating the strength and diversity of our businesses. Our coast-to-coast footprint serving many of the fastest growing U.S. markets provided regional economic diversification in 2006. The increasing demand for aggregates in a broad range of public infrastructure and nonresidential construction helped offset the correction that has occurred in residential construction. Our consistent earnings growth is a reflection of both our broad geographic and end-use markets and a pricing environment for aggregates that recognizes the high cost of reserves replacement and product distribution in high growth metropolitan markets.”
Earnings per share from continuing operations increased 34 percent and gross profit increased 33 percent from the prior year’s fourth quarter, as improved pricing more than offset the earnings effect from lower shipments.
Fourth quarter aggregates pricing increased 16.5 percent from the prior year’s level. Aggregates shipments were 6 percent lower than the prior year’s record fourth quarter. The average unit cost for diesel fuel in the quarter was favorable to the prior year and somewhat offset higher costs for parts, supplies, electricity and the effects of lower production volumes.
Sales and earnings for asphalt increased from the prior year’s fourth quarter as improved prices more than offset higher costs for liquid asphalt and aggregates and the effects of lower volumes. Concrete earnings were slightly lower than in the prior year as improved selling prices were offset by the effects of lower volumes and higher costs for cement and aggregates.
Other income decreased approximately $11 million from the prior year’s fourth quarter due principally to a $1 million increase in the carrying value of the ECU earn-out as compared with an $11 million increase in the fourth quarter of 2005 (Table E).
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January 31, 2007
FOR IMMEDIATE RELEASE
For the full year, improved pricing for all key products led to a 16 percent increase in net sales and drove earnings per share from continuing operations up 45 percent to a record $4.79 per diluted share. Aggregates pricing improved 14.7 percent and more than offset the effects of a slight decline in aggregates shipments and higher production costs related to diesel fuel, parts, supplies and electricity. Asphalt and concrete earnings also increased significantly as pricing improvements exceeded increases in raw material costs.
The effective tax rate for 2006 was 32.1 percent as compared to 28.4 percent for 2005. Last year’s tax rate included a reduction in estimated income tax liabilities for prior years and a favorable settlement of federal income tax refund claims, representing approximately $0.12 per diluted share. In 2006, favorable tax adjustments totaled $0.01 per diluted share.
For the full year, net cash provided by operating activities increased 22 percent from the prior year to $579 million.
During 2006, the Company purchased 6,757,361 shares at a total cost of approximately $523 million, representing an average cost of $77.37 per share.
All results are unaudited.
Outlook - Full Year 2007
Commenting on Vulcan’s outlook for 2007, Mr. James stated, “We remain confident in our ability to continue strong earnings growth in 2007. Broader economic factors such as low interest rates, job growth, falling office vacancy rates and the solid fiscal condition of most states should continue to aid the more aggregate-intensive infrastructure and private non-residential end use markets in 2007. Overall demand for aggregates in our markets should remain relatively stable.
“The residential construction slowdown in the U.S. continued in the fourth quarter of 2006 and contributed to lower aggregates shipments for the year. However, with mortgage interest rates still at relatively low historical levels and household formations increasing in high growth markets, residential construction has the potential to stabilize by the second half of 2007.
“Aggregates demand from highway construction in Vulcan-served markets should increase in 2007, primarily as a result of higher state spending levels and moderating liquid asphalt costs. In 2006, construction cost inputs for highway projects increased significantly, particularly liquid asphalt and diesel fuel, resulting in some delays for new contract awards.
“We believe private non-residential construction will continue to improve in 2007. This construction end market includes a wide array of project types and generally is more aggregates intensive than private residential construction. Economic factors, such as job growth, vacancy rates, private infrastructure needs and demographic trends, help drive demand for this type of construction.
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January 31, 2007
FOR IMMEDIATE RELEASE
“We believe that for 2007 our business is very well positioned to achieve earnings from continuing operations of $5.51 to $5.91 per diluted share. In January 2007, we closed a real estate sale transaction in California that resulted in a net after-tax gain of $0.26 per diluted share, and its earnings effect is included in our guidance. Excluding the gain from this real estate sale transaction, our earnings guidance for 2007 is consistent with full year guidance provided at the end of the third quarter. Our current earnings outlook is based on an overall aggregates price improvement of 10 to 11 percent and aggregates shipments in line with the prior year.”
Outlook - First Quarter 2007
Mr. James further stated, “Weather in the first quarter of 2006 was very favorable for construction. As a result, earnings in the first quarter of 2006 far exceeded usual seasonal trends. Typically, the first quarter contributes approximately 10 percent of operating earnings for the full year and we expect the first quarter of 2007 to be more in line with historical performance. Consequently, including the sale of the real estate in California, we expect to earn $0.75 to $0.95 per diluted share in the first quarter of 2007.”
In keeping with past practice, Vulcan will give quarterly and annual earnings guidance. Revised guidance will be issued only if Vulcan determines that comparable earnings per share, on either a quarterly or an annual basis, will be outside its most recent published estimates.
Conference Call
Vulcan will host a conference call at 10:00 a.m. CST on February 1, 2007. Investors and other interested parties may access the teleconference live by calling (800) 510-0219 approximately 10 minutes before the scheduled start. International participants can dial (617) 614-3451. The access code is 97381548. A live webcast will be available via the Internet through Vulcan's website at vulcanmaterials.com. The conference call will be recorded and available for replay approximately two hours after the call through February 8, 2007.
Vulcan Materials Company, a member of the S&P 500 index, is the nation's largest producer of construction aggregates and a major producer of other construction materials.
Certain matters discussed in this release, including expectations regarding future performance, contain forward-looking statements that are subject to risks, assumptions and uncertainties that could cause actual results to differ materially from those projected. These risks, assumptions and uncertainties include, but are not limited to, those associated with general economic and business conditions; changes in interest rates; the timing and amount of federal, state and local funding for infrastructure; changes in the level of spending for residential and private nonresidential construction; the highly competitive nature of the construction materials industry; pricing; weather and other natural phenomena; energy costs; costs of hydrocarbon-based raw materials; increasing healthcare costs; the timing and amount of any future payments to be received by the Company under two earn-outs contained in the agreement for the divestiture of the Company's Chemicals business; and other risks, assumptions and uncertainties detailed from time to time in the Company’s SEC reports, including the report on Form 10-K for the year. Forward-looking statements speak only as of the date hereof, and Vulcan assumes no obligation to update such statements.
(Tables Follow)
Table A | ||||||||||||||||
Vulcan Materials Company | ||||||||||||||||
and Subsidiary Companies | ||||||||||||||||
(Amounts and shares in thousands, except per share data) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
Consolidated Statements of Earnings | December 31 | December 31 | ||||||||||||||
(Condensed and unaudited) | 2006 | 2005 | 2006 | 2005 | ||||||||||||
Net sales | $ | 742,743 | $ | 680,849 | $ | 3,041,093 | $ | 2,614,965 | ||||||||
Delivery revenues | 73,561 | 73,772 | 301,382 | 280,362 | ||||||||||||
Total revenues | 816,304 | 754,621 | 3,342,475 | 2,895,327 | ||||||||||||
Cost of goods sold | 505,436 | 502,237 | 2,109,099 | 1,906,489 | ||||||||||||
Delivery costs | 73,561 | 73,772 | 301,382 | 280,362 | ||||||||||||
Cost of revenues | 578,997 | 576,009 | 2,410,481 | 2,186,851 | ||||||||||||
Gross profit | 237,307 | 178,612 | 931,994 | 708,476 | ||||||||||||
Selling, administrative and general expenses | 66,320 | 63,020 | 264,396 | 232,531 | ||||||||||||
Gain on sale of property, plant and equipment, net | 1,886 | 5,195 | 5,557 | 8,295 | ||||||||||||
Other operating expense (income), net | 1,233 | 588 | (21,904 | ) | 7,862 | |||||||||||
Operating earnings | 171,640 | 120,199 | 695,059 | 476,378 | ||||||||||||
Other income, net | 881 | 11,470 | 28,541 | 24,378 | ||||||||||||
Interest income | 1,138 | 4,509 | 6,171 | 16,627 | ||||||||||||
Interest expense | 6,621 | 9,123 | 26,310 | 37,146 | ||||||||||||
Earnings from continuing operations | ||||||||||||||||
before income taxes | 167,038 | 127,055 | 703,461 | 480,237 | ||||||||||||
Provision for income taxes | 51,991 | 34,927 | 225,963 | 136,402 | ||||||||||||
Earnings from continuing operations | 115,047 | 92,128 | 477,498 | 343,835 | ||||||||||||
Earnings (loss) on discontinued operations, net of tax | (1,187 | ) | (1,485 | ) | (9,964 | ) | 44,922 | |||||||||
Net earnings | $ | 113,860 | $ | 90,643 | $ | 467,534 | $ | 388,757 | ||||||||
Basic earnings (loss) per share: | ||||||||||||||||
Earnings from continuing operations | $ | 1.21 | $ | 0.91 | $ | 4.89 | $ | 3.37 | ||||||||
Discontinued operations | (0.01 | ) | (0.01 | ) | (0.10 | ) | 0.43 | |||||||||
Net earnings per share | $ | 1.20 | $ | 0.90 | $ | 4.79 | $ | 3.80 | ||||||||
Diluted earnings (loss) per share: | ||||||||||||||||
Earnings from continuing operations | $ | 1.19 | $ | 0.89 | $ | 4.79 | $ | 3.30 | ||||||||
Discontinued operations | (0.02 | ) | (0.01 | ) | (0.10 | ) | 0.43 | |||||||||
Net earnings per share | $ | 1.17 | $ | 0.88 | $ | 4.69 | $ | 3.73 | ||||||||
Weighted-average common shares | ||||||||||||||||
outstanding: | ||||||||||||||||
Basic | 94,704 | 101,217 | 97,577 | 102,179 | ||||||||||||
Assuming dilution | 96,961 | 103,188 | 99,777 | 104,085 | ||||||||||||
Cash dividends declared per share | ||||||||||||||||
of common stock | $ | 0.37 | $ | 0.29 | $ | 1.48 | $ | 1.16 | ||||||||
Depreciation, depletion, accretion and | ||||||||||||||||
amortization from continuing operations | $ | 59,078 | $ | 57,544 | $ | 224,677 | $ | 220,488 | ||||||||
Effective tax rate from continuing operations | 31.1 | % | 27.5 | % | 32.1 | % | 28.4 | % |
Table B | ||||||||||
Vulcan Materials Company | ||||||||||
and Subsidiary Companies | ||||||||||
(Amounts in thousands) | ||||||||||
Consolidated Balance Sheets | December 31 | December 31 | ||||||||
(Condensed and unaudited) | 2006 | 2005 | ||||||||
Assets | ||||||||||
Cash and cash equivalents | $ | 55,230 | $ | 275,138 | ||||||
Medium-term investments | - | 175,140 | ||||||||
Accounts and notes receivable: | ||||||||||
Accounts and notes receivable, gross | 394,815 | 480,647 | ||||||||
Less: Allowance for doubtful accounts | (3,355 | ) | (4,277 | ) | ||||||
Accounts and notes receivable, net | 391,460 | 476,370 | ||||||||
Inventories: | ||||||||||
Finished products | 214,508 | 170,539 | ||||||||
Raw materials | 9,967 | 9,602 | ||||||||
Products in process | 1,619 | 1,589 | ||||||||
Operating supplies and other | 17,443 | 16,022 | ||||||||
Inventories | 243,537 | 197,752 | ||||||||
Deferred income taxes | 20,108 | 23,184 | ||||||||
Prepaid expenses | 15,388 | 17,138 | ||||||||
Total current assets | 725,723 | 1,164,722 | ||||||||
Investments and long-term receivables | 6,664 | 6,942 | ||||||||
Property, plant and equipment: | ||||||||||
Property, plant and equipment, cost | 3,897,618 | 3,481,708 | ||||||||
Less: Reserve for depr., depl., & amort. | (2,028,504 | ) | (1,877,741 | ) | ||||||
Property, plant and equipment, net | 1,869,114 | 1,603,967 | ||||||||
Goodwill | 620,189 | 617,083 | ||||||||
Other assets | 196,879 | 196,170 | ||||||||
Total assets | $ | 3,418,569 | $ | 3,588,884 | ||||||
Liabilities and Shareholders' Equity | ||||||||||
Current maturities of long-term debt | $ | 630 | $ | 272,067 | ||||||
Short-term borrowings | 198,900 | - | ||||||||
Trade payables and accruals | 154,215 | 142,221 | ||||||||
Other current liabilities | 139,942 | 164,726 | ||||||||
Total current liabilities | 493,687 | 579,014 | ||||||||
Long-term debt | 322,064 | 323,392 | ||||||||
Deferred income taxes | 282,249 | 275,065 | ||||||||
Other noncurrent liabilities | 319,458 | 284,872 | ||||||||
Shareholders' equity | 2,001,111 | 2,126,541 | ||||||||
Total liabilities and shareholders' equity | $ | 3,418,569 | $ | 3,588,884 |
Table C | ||||||||||
Vulcan Materials Company | ||||||||||
and Subsidiary Companies | ||||||||||
(Amounts in thousands) | ||||||||||
Twelve Months Ended | ||||||||||
Consolidated Statements of Cash Flows | December 31 | |||||||||
(Condensed and unaudited) | 2006 | 2005 | ||||||||
Operating Activities | ||||||||||
Net earnings | $ | 467,534 | $ | 388,757 | ||||||
Adjustments to reconcile net earnings to | ||||||||||
net cash provided by operating activities: | ||||||||||
Depreciation, depletion, accretion and amortization | 224,696 | 220,956 | ||||||||
Net gain on sale of property, plant and equipment | (5,557 | ) | (9,414 | ) | ||||||
Net gain on sale of contractual rights | (24,841 | ) | - | |||||||
Contributions to pension plans | (1,433 | ) | (29,100 | ) | ||||||
Increase in assets before initial | ||||||||||
effects of business acquisitions and dispositions | (66,589 | ) | (115,005 | ) | ||||||
Increase (decrease) in liabilities before initial | ||||||||||
effects of business acquisitions and dispositions | (27,639 | ) | 5,983 | |||||||
Other, net | 13,178 | 11,007 | ||||||||
Net cash provided by operating activities | 579,349 | 473,184 | ||||||||
Investing Activities | ||||||||||
Purchases of property, plant and equipment | (435,207 | ) | (215,646 | ) | ||||||
Proceeds from sale of property, plant and equipment | 7,918 | 10,629 | ||||||||
Proceeds from sale of contractual rights, net of cash transaction fees | 24,849 | - | ||||||||
Proceeds from sale of Chemicals business, net of cash transaction fees | 141,916 | 209,254 | ||||||||
Payment for partner's interest in consolidated Chemicals joint venture | - | (65,172 | ) | |||||||
Payment for businesses acquired, net of acquired cash | (20,531 | ) | (93,965 | ) | ||||||
Purchases of medium-term investments | - | (313,490 | ) | |||||||
Proceeds from sales and maturities of medium-term investments | 175,140 | 317,560 | ||||||||
Change in investments and long-term receivables | 304 | 596 | ||||||||
Other, net | 604 | 1,062 | ||||||||
Net cash used for investing activities | (105,007 | ) | (149,172 | ) | ||||||
Financing Activities | ||||||||||
Net short-term borrowings | 198,900 | - | ||||||||
Payment of short-term debt and current maturities | (272,532 | ) | (3,350 | ) | ||||||
Payment of long-term debt | - | (8,253 | ) | |||||||
Purchases of common stock | (522,801 | ) | (228,479 | ) | ||||||
Dividends paid | (144,082 | ) | (118,229 | ) | ||||||
Proceeds from exercise of stock options | 28,889 | 37,940 | ||||||||
Excess tax benefits from exercise of stock options | 17,376 | - | ||||||||
Other, net | - | 47 | ||||||||
Net cash used for financing activities | (694,250 | ) | (320,324 | ) | ||||||
Net (decrease) increase in cash and cash equivalents | (219,908 | ) | 3,688 | |||||||
Cash and cash equivalents at beginning of year | 275,138 | 271,450 | ||||||||
Cash and cash equivalents at end of year | $ | 55,230 | $ | 275,138 |
Table D | ||||||||||||||||
1. Supplemental Cash Flow Information | ||||||||||||||||
Supplemental information referable to the Condensed Consolidated Statements of Cash Flows for the twelve months ended December 31 is summarized below (amounts in thousands): | ||||||||||||||||
2006 | 2005 | |||||||||||||||
Supplemental Disclosure of Cash Flow Information | ||||||||||||||||
Cash paid during the period for: | ||||||||||||||||
Interest, net of amount capitalized | $ | 32,616 | $ | 37,331 | ||||||||||||
Income taxes | 219,218 | 211,985 | ||||||||||||||
Supplemental Schedule of Noncash Investing and Financing Activities | ||||||||||||||||
Liabilities assumed in business acquisitions | - | 4,684 | ||||||||||||||
Accrued liabilities for purchases of property, plant and equipment | 32,941 | 14,244 | ||||||||||||||
Debt issued for purchases of property, plant and equipment | 177 | - | ||||||||||||||
Proceeds receivable from exercise of stock options | 31 | - | ||||||||||||||
Noncash proceeds from the sale of the Chemicals business: | ||||||||||||||||
Earn-outs | - | 127,979 | ||||||||||||||
Working capital adjustments | - | 14,255 | ||||||||||||||
2. Net Sales and Unit Shipments | ||||||||||||||||
(Amounts in thousands) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31 | December 31 | |||||||||||||||
Net Sales by Product - Customer | 2006 | 2005 | 2006 | 2005 | ||||||||||||
Aggregates, excluding freight | ||||||||||||||||
to remote distribution sites | $ | 488,899 | $ | 445,715 | $ | 1,991,348 | $ | 1,758,111 | ||||||||
Freight to remote distribution sites | 32,567 | 33,821 | 140,557 | 125,864 | ||||||||||||
Aggregates | 521,466 | 479,536 | 2,131,905 | 1,883,975 | ||||||||||||
Asphalt mix | 133,429 | 109,558 | 500,188 | 371,405 | ||||||||||||
Concrete | 53,944 | 66,556 | 260,727 | 252,091 | ||||||||||||
Other products | 33,904 | 25,199 | 148,273 | 107,494 | ||||||||||||
Total net sales | $ | 742,743 | $ | 680,849 | $ | 3,041,093 | $ | 2,614,965 | ||||||||
Unit Shipments | ||||||||||||||||
Aggregates | ||||||||||||||||
Customer tons | 57,287 | 60,882 | 242,473 | 245,709 | ||||||||||||
Internal tons * | 2,975 | 3,468 | 12,936 | 13,831 | ||||||||||||
Aggregates - tons | 60,262 | 64,350 | 255,409 | 259,540 | ||||||||||||
Asphalt mix - tons | 2,867 | 3,052 | 11,599 | 11,698 | ||||||||||||
Concrete - cubic yards | 574 | 810 | 2,893 | 3,238 | ||||||||||||
* Represents tons shipped primarily to our other operations (e.g., asphalt mix and concrete). | ||||||||||||||||
Revenue from internal shipments is not included in net sales as presented in the accompanying Consolidated Statements of Earnings. |
Table E | ||||||||||||||||
Reconciliation of Non-GAAP Performance Measures | ||||||||||||||||
(Amounts in thousands, except per share data) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31 | December 31 | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
GAAP Earnings from continuing operations before income taxes | $ | 167,038 | $ | 127,055 | $ | 703,461 | $ | 480,237 | ||||||||
Gain on sale of contractual rights (1) | 9 | - | (24,841 | ) | - | |||||||||||
Gain from adjustment in the carrying value | ||||||||||||||||
of the ECU earn-out (2) | (1,002 | ) | (11,070 | ) | (28,722 | ) | (20,420 | ) | ||||||||
Earnings from continuing operations before income taxes, | ||||||||||||||||
excluding gains on sale of contractual rights and adjustment | ||||||||||||||||
in the carrying value of the ECU earn-out (3) | $ | 166,045 | $ | 115,985 | $ | 649,898 | $ | 459,817 | ||||||||
GAAP Earnings from continuing operations, net of tax | $ | 115,047 | $ | 92,128 | $ | 477,498 | $ | 343,835 | ||||||||
Gain on sale of contractual rights, net of tax (1) | 5 | - | (14,845 | ) | - | |||||||||||
Gain from adjustment in the carrying value | ||||||||||||||||
of the ECU earn-out, net of tax (2) | (600 | ) | (6,634 | ) | (17,213 | ) | (12,238 | ) | ||||||||
Earnings from continuing operations, excluding gains on sale of | ||||||||||||||||
contractual rights and adjustment in the carrying value | ||||||||||||||||
of the ECU earn-out, net of tax (3) | $ | 114,452 | $ | 85,494 | $ | 445,440 | $ | 331,597 | ||||||||
GAAP Diluted earnings per share from continuing operations | $ | 1.19 | $ | 0.89 | $ | 4.79 | $ | 3.30 | ||||||||
After-tax gain per diluted share resulting from the sale of | ||||||||||||||||
contractual rights (1) | - | - | (0.15 | ) | - | |||||||||||
After-tax gain per diluted share resulting from the adjustment | ||||||||||||||||
in the carrying value of the ECU earn-out (2) | (0.01 | ) | (0.06 | ) | (0.17 | ) | (0.12 | ) | ||||||||
Earnings per share from continuing operations, excluding gains | ||||||||||||||||
on sale of contractual rights and adjustment in the | ||||||||||||||||
carrying value of the ECU earn-out, net of tax (3) | $ | 1.18 | $ | 0.83 | $ | 4.47 | $ | 3.18 |
(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. The Company will continue operating the quarry for approximately 2 years subsequent to the sale 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, 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. |