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
<FN>
* 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