Vulcan Materials 10-Q 4 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
	3 Months Ended Mar. 31, 2010	Jun. 30, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	Vulcan Materials CO
Entity Central Index Key	0001396009
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		$5,362,319,558
Entity Common Stock, Shares Outstanding	127,693,022

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009		12 Months Ended Dec. 31, 2009
Assets
Cash and cash equivalents	$35,940	$47,446	[1]	$22,265
Restricted cash	3,643	0	[1]	0
Medium-term investments	4,109	11,530	[1]	4,111
Accounts and notes receivable
Accounts and notes receivable, gross	300,648	339,197	[1]	276,746
Less: Allowance for doubtful accounts	(9,236)	(9,134)	[1]	(8,722)
Accounts and notes receivable, net	291,412	330,063	[1]	268,024
Inventories
Finished products	246,632	292,776	[1]	261,752
Raw materials	22,430	29,023	[1]	21,807
Products in process	4,663	4,857	[1]	3,907
Operating supplies and other	33,876	35,164	[1]	37,567
Inventories	307,601	361,820	[1]	325,033
Deferred income taxes	56,990	70,442	[1]	57,967
Prepaid expenses	51,538	60,840	[1]	50,817
Assets held for sale	14,839	0	[1]	15,072
Total current assets	766,072	882,141	[1]	743,289
Investments and long-term receivables	33,298	28,011	[1]	33,283
Property, plant & equipment
Property, plant & equipment, cost	6,627,203	6,649,867	[1]	6,653,261
Reserve for depr., depl. & amort.	(2,834,162)	(2,560,199)	[1]	(2,778,590)
Property, plant & equipment, net	3,793,041	4,089,668	[1]	3,874,671
Goodwill	3,093,979	3,084,922	[1]	3,093,979
Other intangible assets, net	681,872	672,871	[1]	682,643
Other assets	106,620	80,406	[1]	105,085
Total assets	8,474,882	8,838,019	[1]	8,532,950
Liabilities and Shareholders' Equity
Current maturities of long-term debt	325,344	311,689	[1]	385,381
Short-term borrowings	300,000	667,000	[1]	236,512
Trade payables and accruals	128,974	138,939	[1]	121,324
Other current liabilities	154,479	154,432	[1]	113,109
Liabilities of assets held for sale	425	0	[1]	369
Total current liabilities	909,222	1,272,060	[1]	856,695
Long-term debt	2,101,147	2,536,211	[1]	2,116,120
Deferred income taxes	863,678	926,016	[1]	887,268
Other noncurrent liabilities	537,835	619,386	[1]	620,845
Total liabilities	4,411,882	5,353,673	[1]	4,480,928
Other commitments and contingencies (Notes 13 & 19)			[1]
Shareholders' equity
Common stock, $1 par value	127,693	110,556	[1]	125,912
Capital in excess of par value	2,444,732	1,750,688	[1]	2,368,228
Retained earnings	1,681,624	1,806,603	[1]	1,752,240
Accumulated other comprehensive loss	(191,049)	(183,501)	[1]	(194,358)
Shareholders' equity	4,063,000	3,484,346	[1]	4,052,022
Total liabilities and shareholders' equity	$8,474,882	$8,838,019	[1]	$8,532,950
[1]As Restated See Note 1

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical)
	Mar. 31, 2010	Dec. 31, 2009	Mar. 31, 2009
Shareholders' equity
Common stock, par value	1	1	1	[1]
[1]As Restated See Note 1

Condensed Consolidated Statemen

Condensed Consolidated Statements of Earnings (Unaudited) (USD $)
In Thousands, unless otherwise specified	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Condensed Consolidated Statements of Earnings [Abstract]
Net sales	$464,534	$567,895
Delivery revenues	28,730	32,399
Total revenues	493,264	600,294
Cost of goods sold	463,640	490,288
Delivery costs	28,730	32,399
Cost of revenues	492,370	522,687
Gross profit	894	77,607
Selling, administrative and general expenses	86,495	79,717
Gain on sale of property, plant & equipment and businesses, net	48,371	2,503
Other operating income (expense), net	460	(1,719)
Operating loss	(36,770)	(1,326)
Other income (expense), net	1,378	(1,075)
Interest income	489	795
Interest expense	43,783	43,919
Loss from continuing operations before income taxes	(78,686)	(45,525)
Benefit from income taxes	(34,212)	(13,270)
Loss from continuing operations	(44,474)	(32,255)
Earnings (loss) on discontinued operations, net of tax (Note 2)	5,727	(525)
Net loss	(38,747)	(32,780)
Basic earnings (loss) per share
Continuing operations	-0.35	-0.29
Discontinued operations	0.04	-0.01
Net loss per share	-0.31	-0.3
Diluted earnings (loss) per share
Continuing operations	-0.35	-0.29
Discontinued operations	0.04	-0.01
Net loss per share	-0.31	-0.3
Weighted-average common shares outstanding
Basic	126,692	110,598
Assuming dilution	126,692	110,598
Cash dividends declared per share of common stock	0.25	0.49
Depreciation, depletion, accretion and amortization	$94,197	$99,315
Effective tax rate from continuing operations	0.435	0.291

2_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Operating Activities
Net loss	($38,747)	($32,780)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation, depletion, accretion and amortization	94,197	99,315
Net gain on sale of property, plant & equipment and businesses	(57,165)	(3,227)
Contributions to pension plans	(20,050)	(1,131)
Share-based compensation	5,277	5,791
Deferred tax provision	(32,369)	2,619
Changes in assets and liabilities before initial effects of business acquisitions and dispositions	46,543	36,311
Other, net	8,753	(1,800)
Net cash provided by operating activities	6,439	105,098
Investing Activities
Purchases of property, plant & equipment	(19,759)	(25,638)
Proceeds from sale of property, plant & equipment	1,054	3,070
Proceeds from sale of businesses, net of transaction costs	51,064	11,537
Increase in restricted cash	(3,643)	0
Redemption of medium-term investments	22	25,203
Other, net	(51)	436
Net cash provided by investing activities	28,687	14,608
Financing Activities
Net short-term borrowings (payments)	63,487	(417,475)
Payment of current maturities and long-term debt	(75,093)	(15,083)
Proceeds from issuance of long-term debt, net of discounts	0	397,660
Debt issuance costs	0	(3,033)
Proceeds from issuance of common stock	11,249	6,800
Dividends paid	(31,600)	(54,069)
Proceeds from exercise of stock options	10,106	2,755
Other, net	400	(9)
Net cash used for financing activities	(21,451)	(82,454)
Net increase in cash and cash equivalents	13,675	37,252
Cash and cash equivalents at beginning of year	22,265	10,194
Cash and cash equivalents at end of period	$35,940	$47,446	[1]
[1]As Restated See Note 1

Basis of Presentation

Basis of Presentation
	3 Months Ended Mar. 31, 2010
Basis of Presentation [Abstract]
Basis of Presentation	Note 1 Basis of Presentation Our accompanying unaudited condensed consolidated financial statements were prepared in compliance with the instructions to Form 10-Q and Article10 of RegulationS-X and thus do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of our management, the statements reflect all adjustments, including those of a normal recurring nature, necessary to present fairly the results of the reported interim periods. Operating results for the three month period ended March31, 2010 are not necessarily indicative of the results that may be expected for the year ended December31, 2010. For further information, refer to the consolidated financial statements and footnotes included in our most recent Annual Report on Form 10-K. We disaggregated our asphalt mix and concrete operating segments for reporting purposes as of January1, 2010 (see Note 17). Due to the 2005 sale of our Chemicals business as presented in Note 2, the operating results of the Chemicals business are presented as discontinued operations in the accompanying Condensed Consolidated Statements of Earnings. Correction of Prior Period Financial Statements During the third quarter of 2009, we completed a comprehensive analysis of our deferred income tax balances and concluded that our deferred income tax liabilities were overstated. The errors arose during the fourth quarter of 2008 and during periods prior to January1, 2006, and were not material to previously issued financial statements. However, correcting the errors in 2009 would have materially impacted that years deferred tax provision. As a result, we restated all affected prior period financial statements in our Annual Report on Form 10-K for the year ended December31, 2009 and our Quarterly Report on Form 10-Q for the quarterly period ended September30, 2009. A summary of the effects of the correction of the errors on our Condensed Consolidated Balance Sheet as of March31, 2009 is presented in the table below (in thousands of dollars): March 31, 2009 As As Reported Corrections Restated Goodwill $ 3,082,467 $ 2,455 $ 3,084,922 Total assets $ 8,835,564 $ 2,455 $ 8,838,019 Deferred income taxes $ 954,577 $ (28,561 ) $ 926,016 Total liabilities $ 5,382,234 $ (28,561 ) $ 5,353,673 Retained earnings $ 1,775,587 $ 31,016 $ 1,806,603 Shareholders equity $ 3,453,330 $ 31,016 $ 3,484,346 Total liabilities and shareholders equity $ 8,835,564 $ 2,455 $ 8,838,019

Discontinued Operations

Discontinued Operations
	3 Months Ended Mar. 31, 2010
Discontinued Operations [Abstract]
Discontinued Operations	Note 2 Discontinued Operations In June2005, we sold substantially all the assets of our Chemicals business to Basic Chemicals, a subsidiary of Occidental Chemical Corporation. In addition to the initial cash proceeds, Basic Chemicals was required to make payments under two earn-out agreements subject to certain conditions. During 2007, we received the final payment under the ECU (electrochemical unit) earn-out, bringing cumulative cash receipts to its $150,000,000 cap. Proceeds under the second earn-out agreement are determined based on the performance of the hydrochlorocarbon product HCC-240fa (commonly referred to as 5CP) from the closing of the transaction through December31, 2012 (5CP earn-out). Under this earn-out agreement, cash plant margin for 5CP, as defined in the Asset Purchase Agreement, in excess of an annual threshold amount is shared equally between Vulcan and Basic Chemicals. The primary determinant of the value for this earn-out is the level of growth in 5CP sales volume. At the June7, 2005 closing date, the value assigned to the 5CP earn-out was limited to an amount that resulted in no gain on the sale of the business, as the gain was contingent in nature. A gain on disposal of the Chemicals business is recognized to the extent cumulative cash receipts under the 5CP earn-out exceed the initial value recorded. In March2010, we received a payment of $8,794,000 (recorded as gain on disposal of discontinued operations) under the 5CP earn-out related to performance during the year ended December31, 2009. Any future payments received pursuant to the 5CP earn-out will be recorded as additional gain on disposal of discontinued operations. During 2009, we received $11,625,000 under the 5CP earn-out related to the year ended December31, 2008. These 2009 receipts resulted in a gain on disposal of discontinued operation of $812,000 for 2009. Through March31, 2010, we have received a total of $42,707,000 under the 5CP earn-out, a total of $9,606,000 in excess of the receivable recorded on the date of disposition. We are liable for a cash transaction bonus payable to certain key former Chemicals employees. This transaction bonus is payable if cash receipts realized from the two earn-out agreements described above exceed an established minimum threshold. The bonus is payable annually based on the prior years results. We expect the 2010 payout will be approximately $879,000 and have accrued this amount as of March31, 2010. In comparison, we had accrued approximately $700,000 as of March31, 2009. There were no net sales or revenues from discontinued operations during the three month periods ended March31, 2010 or 2009. Results from discontinued operations are as follows (in thousands of dollars): Three Months Ended March 31 2010 2009 Discontinued operations Earnings (loss)from results $ 81 $ (1,599 ) Gain on disposal 8,794 723 Income tax (provision)benefit (3,148 ) 351 Earnings (loss)on discontinued operations, net of tax $ 5,727 $ (525 ) The first quarter 2010 pretax earnings from result

Earnings Per Share

Earnings Per Share (EPS)
	3 Months Ended Mar. 31, 2010
Earnings Per Share (EPS) [Abstract]
Earnings Per Share (EPS)	Note 3 Earnings Per Share (EPS) We report two earnings per share numbers: basic and diluted. These are computed by dividing net earnings (loss)by the weighted-average common shares outstanding (basic EPS) or weighted-average common shares outstanding assuming dilution (diluted EPS) as set forth below (in thousands of shares): Three Months Ended March 31 2010 2009 Weighted-average common shares outstanding 126,692 110,598 Dilutive effect of Stock options/SOSARs 0 0 Other stock compensation plans 0 0 Weighted-average common shares outstanding, assuming dilution 126,692 110,598 All dilutive common stock equivalents are reflected in our earnings per share calculations. Antidilutive common stock equivalents are not included in our earnings per share calculations. Because we operated at a loss for the quarters ended March31, 2010 and 2009, all potential common shares were antidilutive. Had earnings from operations been positive, weighted-average common shares outstanding, assuming dilution would have increased by 476,000 shares and 479,000 shares in 2010 and 2009, respectively. The amount of antidilutive common stock equivalents are as follows (in thousands of shares): Three Months Ended March 31 2010 2009 Antidilutive common stock equivalents 4,414 3,838

Income Taxes

Income Taxes
	3 Months Ended Mar. 31, 2010
Income Taxes [Abstract]
Income Taxes	Note 4 Income Taxes Our effective tax rate is based on expected income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which we operate. For interim financial reporting, except in circumstances as described in the following paragraph, we estimate the annual tax rate based on projected taxable income for the full year and record a quarterly tax provision in accordance with the anticipated annual rate. As the year progresses, we refine the estimates of the years taxable income as new information becomes available, including year-to-date financial results. This continual estimation process often results in a change to our expected effective tax rate for the year. When this occurs, we adjust the income tax provision during the quarter in which the change in estimate occurs so that the year-to-date provision reflects the expected annual tax rate. Significant judgment is required in determining our effective tax rate and in evaluating our tax positions. When application of the estimated annual effective tax rate distorts the financial results of an interim period, we calculate the income tax provision or benefit using an alternative methodology as prescribed by the accounting standards. This alternative methodology results in an income tax provision or benefit based solely on the year-to-date pretax loss as adjusted for permanent differences on a pro rata basis. We recognize a tax benefit associated with an uncertain tax position when, in our judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more-likely-than-not recognition threshold, we initially and subsequently measure the tax benefit as the largest amount that we judge to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. Our liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments are recognized entirely in the period in which they are identified. Our effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as we consider appropriate. We applied the alternative methodology discussed above in the determination of the income tax benefit from continuing operations for the first quarter of 2010. We recognized a tax benefit from continuing operations of $34,212,000 for the first three months of 2010. During the same period of 2009, we recognized a tax benefit from continuing operations of $13,270,000.

Medium-term Investments

Medium-term Investments
	3 Months Ended Mar. 31, 2010
Medium-term Investments [Abstract]
Medium-term Investments	Note 5 Medium-term Investments We held investments in money market and other money funds at The Reserve, an investment management company specializing in such funds, as follows: March31, 2010 $5,532,000, December 31, 2009 $5,554,000 and March31, 2009 $13,633,000. The substantial majority of our investment was held in the Reserve International Liquidity Fund, Ltd. On September15, 2008, Lehman Brothers Holdings Inc. filed for bankruptcy protection. In the following days, The Reserve announced that it was closing all of its money funds, some of which owned Lehman Brothers securities, and was suspending redemptions from and purchases of its funds, including the Reserve International Liquidity Fund. As a result of the temporary suspension of redemptions and the uncertainty as to the timing of such redemptions, we changed the classification of our investments in The Reserve funds from cash and cash equivalents to medium-term investments and reduced the carrying value of our investment to its estimated fair value. Based on public statements issued by The Reserve and the maturity dates of the underlying investments, we believe that proceeds from the liquidation of the money funds in which we have investments will be received within twelve months of March31, 2010, and therefore, such investments are classified as current. The Reserve has redeemed our investment, as follows: $22,000 during the first quarter of 2010, $25,203,000 during the first quarter of 2009, $8,079,000 during the remaining three quarters of 2009 and $258,000 during 2008. In addition, during 2008, we recognized a charge of $2,103,000 to reduce the principal balance to an estimate of the fair value of our investment in these funds. During 2009, we recognized income included in other income (expense), net of $660,000 to increase the principal balance to an estimate of the fair value of our investment in these funds. None of this income was recognized in the first quarter of 2009. During the first quarter of 2010, we recognized additional income included in other income (expense), net of $20,000. See Note 7 for further discussion of the fair value determination. These adjustments resulted in balances as of March31, 2010, December31, 2009 and March31, 2009 of $4,109,000, $4,111,000 and $11,530,000, respectively, as reported on our accompanying Condensed Consolidated Balance Sheets.

Derivative Instruments

Derivative Instruments
	3 Months Ended Mar. 31, 2010
Derivative Instruments [Abstract]
Derivatives Instruments	Note 6 Derivative Instruments During the normal course of operations, we are exposed to market risks including fluctuations in interest rates, fluctuations in foreign currency exchange rates and changes in commodity pricing. From time to time, and consistent with our risk management policies, we use derivative instruments to hedge against these market risks. We do not utilize derivative instruments for trading or other speculative purposes. The interest rate swap agreements described below were designated as cash flow hedges of future interest payments. In December2007, we issued $325,000,000 of 3-year floating (variable)rate notes that bear interest at 3-month London Interbank Offered Rate (LIBOR)plus 1.25% per annum. Concurrently, we entered into a 3-year interest rate swap agreement in the stated (notional)amount of $325,000,000. Under this agreement, we pay a fixed interest rate of 5.25% and receive 3-month LIBOR plus 1.25% per annum. Concurrent with each quarterly interest payment, the portion of this swap related to that interest payment is settled and the associated realized gain or loss is recognized. The pretax loss of $8,956,000 accumulated in Other Comprehensive Income (OCI)related to this interest rate swap will be reclassified to earnings by the end of the current year in conjunction with the retirement of the related debt. Additionally, during 2007, we entered into fifteen forward starting interest rate swap agreements for a total notional amount of $1,500,000,000. On December11, 2007, upon the issuance of the related fixed-rate debt, we terminated and settled for a cash payment of $57,303,000 a portion of these forward starting swaps with an aggregate notional amount of $900,000,000 ($300,000,000 5-year, $350,000,000 10-year and $250,000,000 30-year). In December2007, the remaining forward starting swaps on an aggregate notional amount of $600,000,000 were extended to August29, 2008. On June20, 2008, upon the issuance of $650,000,000 of related fixed-rate debt, we terminated and settled for a cash payment of $32,474,000 the remaining forward starting swaps. Amounts accumulated in other comprehensive loss related to the highly effective portion of the fifteen forward starting interest rate swaps are being amortized to interest expense over the term of the related debt. For the 12-month period ending March31, 2011, we estimate that $7,765,000 of the pretax loss accumulated in OCI will be reclassified to earnings. Derivative instruments are recognized at fair value in the accompanying Condensed Consolidated Balance Sheets. Fair values of derivative instruments designated as hedging instruments are as follows (in thousands of dollars): Fair Value 1 March 31 December 31 March 31 Balance Sheet Location 2010 2009 2009 Liability derivatives Interest rate derivatives Other accrued liabilities $ 8,956 $ 11,193 $ 0 Interest rate derivatives Other noncurrent liabilities 0 0 15,400 Total derivatives liability $ 8,956 $ 11,193 $ 15,40

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Mar. 31, 2010
Fair Value Measurements [Abstract]
Fair Value Measurements	Note 7 Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as described below: Level 1: Quoted prices in active markets for identical assets or liabilities; Level 2: Inputs that are derived principally from or corroborated by observable market data; Level 3: Inputs that are unobservable and significant to the overall fair value measurement. Our assets and liabilities that are subject to fair value measurements on a recurring basis are summarized below (in thousands of dollars): Level 1 March 31 December 31 March 31 2010 2009 2009 Fair value recurring Rabbi Trust Mutual funds $ 11,947 $ 10,490 $ 12,019 Equities 7,740 8,472 5,222 Net asset $ 19,687 $ 18,962 $ 17,241 Level 2 March 31 December 31 March 31 2010 2009 2009 Fair value recurring Medium-term investments $ 4,109 $ 4,111 $ 11,530 Interest rate derivative (8,956 ) (11,193 ) (15,400 ) Rabbi Trust Common/collective trust funds 2,769 4,084 409 Net liability $ (2,078 ) $ (2,998 ) $ (3,461 ) The fair values of the Rabbi Trust investments are estimated using a market approach. The Level 1 investments include mutual funds and equity securities for which quoted prices in active markets are available. Investments in common/collective trust funds are stated at estimated fair value based on the underlying investments in those funds. The underlying investments are comprised of short-term, highly liquid assets in commercial paper, short-term bonds and treasury bills. The medium-term investments are comprised of money market and other money funds, as more fully described in Note 5. Using a market approach, we estimated the fair value of these funds by adjusting the remaining investment principal in securities of Lehman Brothers Holdings Inc. to reflect their current trading value. As of March31, 2010, these securities were trading at approximately 21.5% of their face value as reported by the Temporary Supervisor of the Reserve International Liquidity Fund. Additionally, we estimated a discount against our investment balances to allow for the risk that legal and accounting costs and pending or threatened claims and litigation against The Reserve and its management may reduce the principal available for distribution. The interest rate derivative consists of an interest rate swap agreement applied to our $325,000,000 3-year notes issued December2007 and is more fully described in Note 6. This interest rate swap is measured at fair value using a market approach based on the prevailing

Comprehensive Income

Comprehensive Income
	3 Months Ended Mar. 31, 2010
Comprehensive Income [Abstract]
Comprehensive Income	Note 8 Comprehensive Income Comprehensive income (loss)includes charges and credits to equity from nonowner sources and comprises two subsets: net earnings (loss)and other comprehensive income (loss). Total comprehensive income (loss)comprises the following (in thousands of dollars): Three Months Ended March 31 2010 2009 Net loss $ (38,747 ) $ (32,780 ) Other comprehensive income (loss) Fair value adjustments to cash flow hedges, net of tax (478 ) (476 ) Reclassification adjustment for cash flow hedges amounts included in net loss, net of tax 2,887 1,983 Amortization of pension and postretirement plan acturarial loss and prior service cost, net of tax 899 274 Total comprehensive loss $ (35,439 ) $ (30,999 ) Amounts accumulated in other comprehensive loss, net of tax, are as follows (in thousands of dollars): March 31 December 31 March 31 2010 2009 2009 Cash flow hedges $ (46,956 ) $ (49,365 ) $ (55,012 ) Pension and postretirement plans (144,093 ) (144,993 ) (128,489 ) Accumulated other comprehensive loss $ (191,049 ) $ (194,358 ) $ (183,501 )

Shareholders Equity

Shareholders Equity
	3 Months Ended Mar. 31, 2010
Stockholders' Equity [Abstract]
Shareholders' Equity	Note 9 Shareholders Equity In March2010, we issued 1,190,000 shares of common stock to our qualified pension plan (par value of $1 per share) as described in Note 10. The transaction increased shareholders equity by $53,864,000 (common stock $1,190,000 and capital in excess of par $52,674,000). In June2009, we completed a public offering of common stock (par value of $1 per share) resulting in the issuance of 13,225,000 common shares at a price of $41.00 per share. The total number of shares issued through the offering included 1,725,000 shares issued upon full exercise of the underwriters option to purchase additional shares. We received net proceeds of $519,993,000 (net of commissions and transaction costs of $22,232,000) from the sale of the shares. The net proceeds from the offering were used for debt reduction and general corporate purposes. The transaction increased shareholders equity by $519,993,000 (common stock $13,225,000 and capital in excess of par $506,768,000). We periodically issue shares of common stock to the trustee of our 401(k) savings and retirement plan to satisfy the plan participants elections to invest in Vulcans common stock and the resulting cash proceeds provide a means of improving cash flow, increasing shareholders equity and reducing leverage. Under this arrangement, the stock issuances and resulting cash proceeds were as follows: first quarter of 2010 issued 250,368 shares for cash proceeds of $11,249,000, and first quarter of 2009 issued 162,075 shares for cash proceeds of $6,800,000. On November16, 2007, pursuant to the terms of the agreement to acquire Florida Rock, all treasury stock held immediately prior to the close of the transaction was canceled. Our Board of Directors resolved to carry forward the existing authorization to purchase common stock. As of March31, 2010, 3,411,416 shares remained under the current authorization. There were no shares purchased during the three month periods ended March31, 2010 and 2009, and there were no shares held in treasury as of March31, 2010, December31, 2009 or March31, 2009.

Benefit Plans

Benefit Plans
	3 Months Ended Mar. 31, 2010
Benefit Plans [Abstract]
Benefit Plans	Note 10 Benefit Plans The following tables set forth the components of net periodic benefit cost (in thousands of dollars): Three Months Ended March 31 PENSION BENEFITS 2010 2009 Components of net periodic benefit cost Service cost $ 4,808 $ 4,661 Interest cost 10,405 10,485 Expected return on plan assets (12,535 ) (11,670 ) Amortization of prior service cost 115 115 Amortization of actuarial loss 1,336 400 Net periodic pension benefit cost $ 4,129 $ 3,991 Three Months Ended March 31 OTHER POSTRETIREMENT BENEFITS 2010 2009 Components of net periodic benefit cost Service cost $ 1,066 $ 978 Interest cost 1,663 1,761 Amortization of prior service credit (182 ) (206 ) Amortization of actuarial loss 222 149 Net periodic postretirement benefit cost $ 2,769 $ 2,682 In March2010, we contributed $72,500,000 ($18,636,000 in cash and $53,864,000 in stock 1,190,000 shares valued at $45.2637 per share) to our qualified pension plans for the 2009 plan year. This contribution, along with the existing funding credits, should be sufficient to cover expected required contributions to the qualified plans through 2012. The net periodic benefit costs for pension plans during the three months ended March31, 2010 and 2009 include pretax reclassifications from other comprehensive income of $1,451,000 and $515,000, respectively. During the three months ended March31, 2010 and 2009, contributions of $73,914,000 and $1,131,000, respectively, were made to our qualified and nonqualified pension plans. The net periodic benefit costs for postretirement plans during the three months ended March31, 2010 and 2009 include pretax reclassifications from other comprehensive income totaling $40,000 and ($57,000), respectively. These reclassifications from other comprehensive income are related to amortization of prior service costs or credits and actuarial losses.

Credit Facilities, Short-term B

Credit Facilities, Short-term Borrowings and Long-term Debt
	3 Months Ended Mar. 31, 2010
Credit Facilities, Short-term Borrowings and Long-term Debt [Abstract]
Credit Facilities, Short-term Borrowings and Long-term Debt	Note 11 Credit Facilities, Short-term Borrowings and Long-term Debt Short-term borrowings are summarized as follows (in thousands of dollars): March 31 December 31 March 31 2010 2009 2009 Short-term borrowings Bank borrowings $ 0 $ 0 $ 565,000 Commercial paper 300,000 236,512 100,000 Other notes payable 0 0 2,000 Total short-term borrowings $ 300,000 $ 236,512 $ 667,000 Bank borrowings Maturity n/a n/a 1 to 20 days Weighted-average interest rate n/a n/a 0.73 % Commercial paper Maturity 1 day 42 days 1 day Weighted-average interest rate 0.34 % 0.39 % 0.82 % Other notes payable Maturity n/a n/a 2 months Weighted-average interest rate n/a n/a n/a We utilize our bank lines of credit as liquidity back-up for outstanding commercial paper or draw on the bank lines to access LIBOR-based short-term loans to fund our borrowing requirements. Periodically, we issue commercial paper for general corporate purposes, including working capital requirements. Our policy is to maintain committed credit facilities at least equal to our outstanding commercial paper. Unsecured bank lines of credit totaling $1,500,000,000 were maintained at March 31, 2010, all of which expire November16, 2012. As of March31, 2010, there were no borrowings under the lines of credit. Interest rates referable to borrowings under these lines of credit are determined at the time of borrowing based on current market conditions. Pricing of bank loans, if any lines were drawn, would be 30 basis points (0.30%) over LIBOR based on our long-term debt ratings at March31, 2010. All lines of credit extended to us in 2010 and 2009 were based solely on a commitment fee; no compensating balances were required. In the normal course of business, we maintain balances for which we are credited with earnings allowances. To the extent the earnings allowances are not sufficient to fully compensate banks for the services they provide, we pay the fee equivalent for the differences. As of March31, 2010, $3,648,000 of our long-term debt, including current maturities, was secured. This secured debt was assumed with the November2007 acquisition of Florida Rock. All other debt obligations, both short-term borrowings and long-term debt, are unsecured. In February2009, we issued $400,000,000 of long-term notes in two related series (tranches), as follows: $150,000,000 of 10.125% coupon notes due December2015 and $250,000,000 of 10.375% coupon notes due December2018. These notes were issued principally to repay borrowings outstanding under our short- and long-term debt obligations. The notes are presented in the table below net of unamortized discounts from par. Discounts and debt issuance costs are being amortized using the effective interest method over the respective lives of the notes.

Asset Retirement Obligations

Asset Retirement Obligations
	3 Months Ended Mar. 31, 2010
Asset Retirement Obligations [Abstract]
Asset Retirement Obligations	Note 12 Asset Retirement Obligations Asset retirement obligations are legal obligations associated with the retirement of long-lived assets resulting from the acquisition, construction, development and/or normal use of the underlying assets. Recognition of a liability for an asset retirement obligation is required in the period in which it is incurred at its estimated fair value. The associated asset retirement costs are capitalized as part of the carrying amount of the underlying asset and depreciated over the estimated useful life of the asset. The liability is accreted through charges to operating expenses. If the asset retirement obligation is settled for other than the carrying amount of the liability, we recognize a gain or loss on settlement. We record all asset retirement obligations for which we have legal obligations for land reclamation at estimated fair value. Essentially all these asset retirement obligations relate to our underlying land parcels, including both owned properties and mineral leases. For the three month periods ended March31, we recognized asset retirement obligation (ARO)operating costs related to accretion of the liabilities and depreciation of the assets as follows (in thousands of dollars): Three Months Ended March 31 2010 2009 ARO operating costs Accretion $ 2,189 $ 2,272 Depreciation 3,183 3,603 Total $ 5,372 $ 5,875 ARO operating costs for our continuing operations are reported in cost of goods sold. Asset retirement obligations are reported within other noncurrent liabilities in our accompanying Condensed Consolidated Balance Sheets. Reconciliations of the carrying amounts of our asset retirement obligations are as follows (in thousands of dollars): Three Months Ended March 31 2010 2009 Asset retirement obligations Balance at beginning of period $ 167,757 $ 173,435 Liabilities incurred 0 334 Liabilities settled (2,377 ) (2,599 ) Accretion expense 2,189 2,272 Revisions up (down) (3,638 ) 332 Balance at end of period $ 163,931 $ 173,774 Downward revisions to our asset retirement obligations during 2010 relate primarily to changes in the estimated settlement dates at select sites.

Standby Letters of Credit

Standby Letters of Credit
	3 Months Ended Mar. 31, 2010
Standby Letters of Credit [Abstract]
Standby Letters of Credit	Note 13 Standby Letters of Credit We provide certain third parties with irrevocable standby letters of credit in the normal course of business. We use commercial banks to issue standby letters of credit to back our obligations to pay or perform when required to do so pursuant to the requirements of an underlying agreement. The standby letters of credit listed below are cancelable only at the option of the beneficiaries who are authorized to draw drafts on the issuing bank up to the face amount of the standby letter of credit in accordance with its terms. Since banks consider letters of credit as contingent extensions of credit, we are required to pay a fee until they expire or are canceled. Substantially all of our standby letters of credit have a one-year term and are renewable annually at the option of the beneficiary. Our standby letters of credit as of March31, 2010 are summarized in the table below (in thousands of dollars): March 31 2010 Standby letters of credit Risk management requirement for insurance claims $ 38,278 Payment surety required by utilities 133 Contractual reclamation/restoration requirements 11,931 Financial requirement for industrial revenue bond 14,230 Total $ 64,572 Of the total $64,572,000 outstanding letters of credit, $61,288,000 is backed by our $1,500,000,000 bank credit facility which expires November16, 2012.

Divestitures and Pending Divest

Divestitures and Pending Divestiture
	3 Months Ended Mar. 31, 2010
Divestitures and Pending Divestiture [Abstract]
Divestitures and Pending Divestiture	Note 14 Divestitures and Pending Divestiture We sold three aggregates facilities located in rural Virginia in the first quarter of 2010 for cash proceeds of approximately $42,750,000. Assets held for sale and liabilities of assets held for sale as presented in the accompanying Condensed Consolidated Balance Sheets as of March31, 2010 and December31, 2009, relate to an aggregates production facility and ready-mixed concrete operation located outside the United States. We expect the transaction to close during the second quarter of 2010. There were no pending divestitures as of March31, 2009. The major classes of assets and liabilities of assets classified as held for sale are as follows (in thousands of dollars): March 31 2010 December 31 2009 Current assets $ 3,670 $ 3,799 Property, plant equipment, net 11,016 11,117 Intangible assets 93 96 Other assets 60 60 Total assets held for sale $ 14,839 $ 15,072 Current liabilities $ 425 $ 369 Total liabilities of assets held for sale $ 425 $ 369

Goodwill

Goodwill
	3 Months Ended Mar. 31, 2010
Goodwill [Abstract]
Goodwill	Note 15 Goodwill Changes in the carrying amount of goodwill by reportable segment from December31, 2009 to March31, 2010 are summarized below (in thousands of dollars): Goodwill Aggregates Concrete Asphalt mix Cement Total Gross carrying amount Total as of December31, 2009 $ 3,002,346 $ 0 $ 91,633 $ 252,664 $ 3,346,643 Purchase price allocation adjustment 0 0 0 0 0 Total as of March31, 2010 $ 3,002,346 $ 0 $ 91,633 $ 252,664 $ 3,346,643 Accumulated impairment losses Total as of December31, 2009 $ 0 $ 0 $ 0 $ (252,664 ) $ (252,664 ) Goodwill impairment loss 0 0 0 0 0 Total as of March31, 2010 $ 0 $ 0 $ 0 $ (252,664 ) $ (252,664 ) Goodwill, net of accumulated impariment losses Total as of December31, 2009 $ 3,002,346 $ 0 $ 91,633 $ 0 $ 3,093,979 Total as of March31, 2010 $ 3,002,346 $ 0 $ 91,633 $ 0 $ 3,093,979

New Accounting Standards

New Accounting Standards
	3 Months Ended Mar. 31, 2010
New Accounting Standards [Abstract]
New Accounting Standards	Note 16 New Accounting Standards Recently Adopted Enhanced disclosures for fair value measurements As of and for the interim period ended March31, 2010, we adopted Accounting Standards Update (ASU) No.2010-6, Improving Disclosures about Fair Value Measurements (ASU 2010-6) as it relates to disclosures about transfers into and out of Level 1 and 2. Our adoption of this standard had no impact on our financial position, results of operations or liquidity. We will adopt ASU 2010-6 as it relates to separate disclosures about purchases, sales, issuances and settlements relating to Level 3 measurements as of and for the interim period ended March31, 2011.

Segment Reporting - Continuing

Segment Reporting - Continuing Operations
	3 Months Ended Mar. 31, 2010
Segment Reporting - Continuing Operations [Abstract]
Segment Reporting - Continuing Operations	Note 17 Segment Reporting Continuing Operations We have four operating segments organized around our principal product lines: aggregates, asphalt mix, concrete and cement. For reporting purposes, we historically combined our Asphalt mix and Concrete operating segments into one reporting segment as the products are similar in nature and the businesses exhibited similar economic characteristics, production processes, types and classes of customer, methods of distribution and regulatory environments. We routinely receive inquiries from our investors specific to these individual operating segments. In an effort to provide more meaningful information to the public, these two segments are now reported separately. We have recast our 2009 data to reflect this change in reportable segments to conform to the current periods presentation. The majority of our activities are domestic. We sell a relatively small amount of aggregates outside the United States. Transactions between our reportable segments are recorded at prices approximating market levels. Management reviews earnings from the product line reporting units principally at the gross profit level. Three Months Ended Segment Financial Disclosure March 31 Amounts in millions 2010 2009 TOTAL REVENUES Aggregates Segment revenues $ 341.3 $ 401.8 Intersegment sales (32.0 ) (37.1 ) Net sales 309.3 364.7 Concrete Segment revenues 82.9 114.8 Intersegment sales 0.0 (0.1 ) Net sales 82.9 114.7 Asphalt mix Segment revenues 63.6 78.4 Intersegment sales (0.6 ) 0.0 Net sales 63.0 78.4 Cement Segment revenues 17.9 19.7 Intersegment sales (8.6 ) (9.6 ) Net sales 9.3 10.1 Total Net sales 464.5 567.9 Delivery revenues 28.8 32.4 Total revenues $ 493.3 $ 600.3 GROSS PROFIT Aggregates $ 15.4 $ 63.6 Concrete (16.1 ) (0.9 ) Asphalt mix 1.1 16.2 Cement 0.5 (1.3 ) Total gross profit $ 0.9 $ 77.6 Depreciation, Depletion, Accretion and Amortization Aggregates $ 73.1 $ 78.8 Concrete 13.0 12.9 Asphalt mix 2.2 2.0 Cement 4.4 4.6 Corporate and other unallocated 1.5 1.0 Total depreciation, depletion, accretion and amortization $ 94.2 $ 99.3

Supplemental Cash Flow Informat

Supplemental Cash Flow Information
	3 Months Ended Mar. 31, 2010
Supplemental Cash Flow Information [Abstract]
Supplemental Cash Flow Information	Note 18 Supplemental Cash Flow Information Supplemental information referable to our Condensed Consolidated Statements of Cash Flows is summarized below (in thousands of dollars): Three Months Ended March 31 2010 2009 Cash payments (refunds) Interest (exclusive of amount capitalized) $ 7,035 $ 13,334 Income taxes (2,657 ) (330 ) Noncash investing and financing activities Accrued liabilities for purchases of property, plant equipment 10,273 19,082 Debt issued for purchases of property, plant equipment 0 1,982 Stock issued for pension contribution (Note 9) 53,864 0 Other noncash transactions 0 25

Other Commitments and Contingen

Other Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
Other Commitments and Contingencies [Abstract]
Other Commitments and Contingencies	Note 19 Other Commitments and Contingencies We are a defendant in various lawsuits in the ordinary course of business. It is not possible to determine with precision the outcome, or the amount of liability, if any, under these lawsuits, especially where the cases involve possible jury trials with as yet undetermined jury panels. In addition to these lawsuits in which we are involved in the ordinary course of business, certain other legal proceedings are more specifically described below. Perchloroethylene cases We are a defendant in several cases involving perchloroethylene (perc), which was a product manufactured by our former Chemicals business. Perc is a cleaning solvent used in dry cleaning and other industrial applications. These cases involve various allegations of groundwater contamination, or exposure to perc allegedly resulting in personal injury. Vulcan is vigorously defending all of these cases. At this time, we cannot determine the likelihood or reasonably estimate a range of loss pertaining to any of these matters, which are listed below: Addair This is a purported class action case for medical monitoring and personal injury damages styled Addair et al. v. Processing Company, LLC, et al., pending in the Circuit Court of Wyoming County, West Virginia. The plaintiffs allege various personal injuries from exposure to perc used in coal sink labs. Discovery is now complete. The class certification hearing is scheduled for August2010. California Water Service Company On June 6, 2008, we were served in the action styled California Water Service Company v. Dow, et al, now pending in the San Mateo County Superior Court, California. According to the complaint, California Water Service Company owns and/or operates public drinking water systems, and supplies drinking water to hundreds of thousands of residents and businesses throughout California. The complaint alleges that water systems in a number of communities have been contaminated with perc. The plaintiff is seeking compensatory damages and punitive damages. Discovery is ongoing. City of Sunnyvale California On January 6, 2009, we were served in an action styled City of Sunnyvale v. Legacy Vulcan Corporation, f/k/a Vulcan Materials Company, filed in the San Mateo County Superior Court, California. The plaintiffs are seeking cost recovery and other damages for alleged environmental contamination from perc and its breakdown products at the Sunnyvale Town Center Redevelopment Project. Discovery is ongoing. R.R. Street Indemnity Street, a former distributor of perc manufactured by Vulcan, alleges that Vulcan owes Street, and its insurer (National Union), a defense and indemnity in several of these litigation matters, as well as some prior litigation which Vulcan has now settled. National Union alleges that Vulcan is obligated to contribute to National Unions share of defense fees, costs and any indemnity payments made on Streets behalf. Street and Vulcan are having ongoing discussions about the nature and extent of indemnity obligations, if any, and to date there has been no resolution of these issues. Santarsiero This i