EXHIBIT 25(c)
TO FORM 10-K
ANNUAL REPORT
OF
VULCAN MATERIALS COMPANY
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
UNDER THE SECURITIES EXCHANGE ACT OF 1934
FINANCIAL STATEMENTS REQUIRED BY FORM 11-K WITH
RESPECT TO THE VULCAN MATERIALS COMPANY CHEMICALS
DIVISION HOURLY EMPLOYEES SAVINGS PLAN FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1994, AND THE INDEPENDENT
CERTIFIED ACCOUNTANTS' CONSENT WITH RESPECT THERETO
FILED AS AN AMENDMENT TO THE VULCAN MATERIALS
COMPANY ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1994,
AS PERMITTED BY RULE 15d-21
UNDER THE SECURITIES EXCHANGE ACT OF 1934
VULCAN MATERIALS COMPANY
VULCAN MATERIALS COMPANY
CHEMICALS DIVISION
HOURLY EMPLOYEES
SAVINGS PLAN
Financial Statements for the Years
Ended December 31, 1994 and 1993
and Independent Auditors' Report
VULCAN MATERIALS COMPANY
CHEMICALS DIVISION HOURLY EMPLOYEES SAVINGS PLAN
Table of Contents
Page
Independent Auditors' Report 36
Financial Statements of the Vulcan Materials Company
Chemicals Division Hourly Employees Savings Plan:
Statements of Net Assets Available for Benefits
as of December 31, 1994 and 1993 37
Statements of Changes in Net Assets Available
for Benefits for Each Year in the Periods Ended
December 31, 1994 and 1993 38
Notes to Financial Statements 39-44
Independent Auditors' Consent 45
INDEPENDENT AUDITORS' REPORT
To the Administrative Committee of Vulcan Materials Company
Chemicals Division Hourly Employees Savings Plan:
We have audited the accompanying statements of net assets available for
benefits of the Vulcan Materials Company Chemicals Division Hourly Employees
Savings Plan as of December 31, 1994 and 1993, and the related statements of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31,
1994 and 1993, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information by fund
in the statements of net assets available for benefits and the statements of
changes in net assets available for benefits is presented for the purpose of
additional analysis rather than to present the net assets available for
benefits and changes in net assets available for benefits of the individual
funds. The supplemental information by fund is the responsibility of the
Plan's management. Such supplemental information by fund has been subjected
to the auditing procedures applied in our audits of the basic financial
statements and, in our opinion, is fairly stated in all material respects
when considered in relation to the basic financial statements taken as a
whole.
/s/ Deloitte & Touche LLP
Birmingham, Alabama
June 2, 1995
VULCAN MATERIALS COMPANY
CHEMICALS DIVISION HOURLY EMPLOYEES SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1994 AND 1993
1994 1993
Supplemental Information by Fund Supplemental Information by Fund
Guaranteed Vulcan Vulcan
Investment Large Materials Large Materials
Contracts Companies Company Guaranteed Companies Company
and Loans to Common Common Investment Common Common
Total Participants Stock Stock Total Contracts Stock Stock
ASSETS:
INVESTMENTS [Cost of $16,410,301
(1994) and $15,602,729 (1993)]
(Notes 1, 3, & 5):
Collective short-term
investments $ 17,884 $ 17,640 $ 28 $ 216 $ 15,595 $ 15,438 $ 8 $ 149
Guaranteed investment
contracts 13,189,161 13,189,161 13,119,928 13,119,928
Commingled funds holding
principally common stock 857,309 857,309 542,420 542,420
Fund holding Vulcan Materials
Company common stock 2,840,316 2,840,316 2,269,969 2,269,969
Loans to participants 48,560 48,560
Total investments 16,953,230 13,255,361 857,337 2,840,532 15,947,912 13,135,366 542,428 2,270,118
RECEIVABLE FROM VULCAN
MATERIALS COMPANY:
Employer contributions 53,256 39,831 13,425 49,191 49,191
Employee contributions 144,531 85,688 19,118 39,725 138,284 88,834 10,736 38,714
Total receivable 197,787 125,519 19,118 53,150 187,475 138,025 10,736 38,714
TOTAL ASSETS 17,151,017 13,380,880 876,455 2,893,682 16,135,387 13,273,391 553,164 2,308,832
TRANSFERS IN PROCESS (20,287) (3,696) 23,983 (28,700) 18,711 9,989
NET ASSETS AVAILABLE
FOR BENEFITS $17,151,017 $13,360,593 $872,759 $2,917,665 $16,135,387 $13,244,691 $571,875 $2,318,821
<FN>
See notes to financial statements.
VULCAN MATERIALS COMPANY
CHEMICALS DIVISION HOURLY EMPLOYEES SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
1994 1993
Supplemental Information by Fund Supplemental Information by Fund
Guaranteed Vulcan Vulcan
Investment Large Materials Large Materials
Contracts Companies Company Guaranteed Companies Company
and Loans to Common Common Investment Common Common
Total Participants Stock Stock Total Contracts Stock Stock
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
INVESTMENT INCOME (LOSS):
Interest $ 758,054 $ 756,656 $ 293 $ 1,105 $ 817,064 $ 815,964 $ 140 $ 960
Dividends 67,796 67,796 57,930 57,930
Net investment gains (losses):
Realized 17,853 16,756 1,097 8,803 1,366 7,437
Unrealized (Note 4) 197,746 5,430 192,316 (2,467) 68,041 (70,508)
Net investment income
(loss) 1,041,449 756,656 22,479 262,314 881,330 815,964 69,547 (4,181)
CONTRIBUTIONS (Note 2):
Participants 1,384,294 839,069 173,321 371,904 1,329,129 843,136 95,016 390,977
Vulcan Materials Company 495,185 409,549 85,636 435,262 435,262
Total contributions 1,879,479 1,248,618 173,321 457,540 1,764,391 1,278,398 95,016 390,977
REDISTRIBUTION OF
PARTICIPANTS' INVESTMENT
OPTIONS UNDER THE PLAN (104,982) 130,416 (25,434) (67,173) 101,349 (34,176)
TOTAL ADDITIONS 2,920,928 1,900,292 326,216 694,420 2,645,721 2,027,189 265,912 352,620
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
WITHDRAWALS BY
PARTICIPANTS (Note 2) (1,905,298) (1,784,390) (25,332) (95,576) (1,110,924) (959,368) (17,527) (134,029)
NET INCREASE 1,015,630 115,902 300,884 598,844 1,534,797 1,067,821 248,385 218,591
NET ASSETS AVAILABLE
FOR BENEFITS:
BEGINNING OF YEAR 16,135,387 13,244,691 571,875 2,318,821 14,600,590 12,176,870 323,490 2,100,230
END OF YEAR $17,151,017 $13,360,593 $872,759 $2,917,665 $16,135,387 $13,244,691 $571,875 $2,318,821
<FN>
See notes to financial statements.
VULCAN MATERIALS COMPANY
CHEMICALS DIVISION HOURLY EMPLOYEES SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL - The financial statements of the Vulcan Materials Company
Chemicals Division Hourly Employees Savings Plan ("Plan") have been
prepared on the accrual basis of accounting. All assets of the Plan are
held by The Northern Trust Company, Chicago, Illinois ("Trustee"). Vulcan
Materials Company ("Company") pays the administrative costs of the Plan,
including the trustee's fees and charges.
VALUATION OF INVESTMENTS - Investments other than guaranteed investment
contracts are reported at fair value. Investments in securities traded on
national and over-the-counter exchanges are valued at the closing bid
price of the security as of the last day of the year. Guaranteed
investment contracts are reported at their contract value, which is cost
increased by interest earned. The average cost of securities sold or
distributed is used to determine net investment gains (losses) realized.
Security transactions are recorded on the settlement date. Distributions
of common stock, if any, to participants are recorded at the market value
of such stock at the end of the month prior to distribution.
BENEFITS PAYABLE - In 1993, the Plan changed its method of accounting for
benefits payable to comply with the 1993 AICPA Audit and Accounting Guide,
"Audits of Employee Benefit Plans." The new guidance requires that
benefits payable to persons who have withdrawn from participation in a
defined contribution plan be disclosed in the footnotes to the financial
statements rather than be recorded as a liability of the Plan. As of
December 31, 1994 and 1993, benefits of $101,489 and $55,517,
respectively, were due to participants who had elected to receive a
distribution from the Plan.
NEW ACCOUNTING STANDARD NOT YET ADOPTED - The Plan has not yet adopted
Statement of Position (SOP) No. 94-4 "Reporting of Investment Contracts
Held by Health and Welfare Benefit Plans and Defined Contribution Pension
Plans," issued in September 1994. The new guidance requires defined
contribution plans to report investment contracts with fully-benefit
responsive features (as defined in the SOP) at contract value. Other
investment contracts are reported at fair value. This SOP is effective
for financial statements for plan years beginning after December 15, 1994,
except that the application of this SOP to investment contracts entered
into before December 31, 1993, is delayed to plan years beginning after
December 15, 1995, at which time the Plan intends to adopt this SOP. The
impact of adoption of SOP No. 94-4 is expected to be insignificant.
2. DESCRIPTION OF THE PLAN
GENERAL - The Plan was established effective January 1, 1972 and was most
recently restated as of May 1, 1991. The purpose of the Plan is to
provide for accumulation of savings for qualifying hourly paid employees
of the Chemicals Division of Vulcan Materials Company ("Employer") who are
represented by collective bargaining units which have specifically adopted
the Plan.
PARTICIPATION AND VESTING - Chemicals Division Hourly employees, with one
year of service covered by a collective bargaining unit which has adopted
the Plan, are eligible for participation. Participants are fully vested
at all times.
The number of participants in the Plan at December 31, 1994 and 1993 was
as follows:
1994 1993
Total participants 530 551
Participants included in the above total who
have transferrd to a bargaining unit not
covered by the Plan, or are no longer employed
by the Company, but who have vested benefits
under the Plan 18 29
FUNDING - The Plan is funded through participants' and Company
contributions. Participants contribute to the Plan through weekly payroll
deductions at a rate dependent upon the participant's years of service. A
participant may make weekly matched contributions in multiples of $1 up to
a maximum weekly matched contribution as stated in the plan document for
the participants' collective bargaining unit. Company contributions equal
a percentage of participants' contributions, such percentage being defined
in the plan document for the collective bargaining unit covering the
participant. In addition to the matched contributions, participants may
make weekly unmatched contributions in multiples of $1 up to a maximum as
stated in the applicable plan document for the participants' collective
bargaining agreement.
ALLOCATION AND DETERMINATION OF ACCOUNTS - Separate accounts are
maintained for each participant for matched, unmatched, deductible
supplemental, and Company contributions and accumulated earnings on each.
Additionally, subaccounts are maintained for matched and unmatched
accounts for the portion of each account that is attributable to pre-tax
contributions and the portion attributable to after-tax contributions.
Monthly net earnings are allocated to each participant's account in the
ratio of the participant's account balance to total participants' account
balances.
DISTRIBUTIONS AND WITHDRAWALS - A participant's total account is
distributed upon retirement, disability, death or termination of
employment unless the account value is greater than $3,500, in which case
the participant may defer until age 70-1/2. Prior to a termination of
employment, participants may make partial withdrawals or may withdraw
their total account, except that if a participant has not maintained a
participant contribution account for the 60 months immediately preceding
the voluntary withdrawal, no Company contributions which have been on
deposit less than 24 months will be distributed until 24 months after the
earlier of the employee's withdrawal date or the employee's termination of
employment. In addition, any in-service distribution from a participant's
pre-tax contributions must meet the requirements of a "hardship
withdrawal," as set forth in the plan document.
INVESTMENTS - Participants' contributions are invested in three separate
investment funds (see Note 5) of the Plan in proportions elected by the
participant. The Company's matching contributions are invested either in
the fund which invests primarily in guaranteed investment contracts or the
fund which invests in Vulcan Materials Company common stock.
LOANS - Effective September 1, 1994, participants covered by certain
collective bargaining unit agreements may apply for a loan at any time
provided that the aggregate value of his account invested in Fund 1 (see
Note 5) is at least equal to the proposed loan plus any existing loan.
The amount of the loan cannot exceed the lesser of 50% of the
participant's total account or $50,000. If a loan is made, the
participant shall execute a note payable to the Trustee in the amount of
the loan and bearing interest at the prime interest rate plus 1%. During
1994, the average rate of interest on loans approximated 8.75%. Such note
shall be held as an investment by the Trustee as part of that portion of
the fund invested in guaranteed investment contracts. Loans must be
repaid in 36 monthly installments through payroll deductions.
PLAN TERMINATION - In the event it becomes necessary to terminate the
Plan, participants will receive a distribution of the amounts held for
their accounts.
3. INVESTMENTS
The Plan's investment assets consist of an interest in one of the
investment accounts of the Vulcan Materials Company Master Trust ("Master
Trust") administered by Northern Trust Company. Use of the Master Trust
permits the commingling of investment assets of a number of employee
benefit plans of the participating companies. Although the assets are
commingled, the Company maintains supporting records for the purpose of
allocating the investment assets and the related net earnings to the
various participating employee benefit plans.
The investment accounts of the Master Trust at December 31, 1994 and 1993
are summarized as follows:
1994 1993
Pension Investment Account $264,288,286 $270,465,591
Thrift Plan Investment Account 159,750,043 153,862,152
Chemicals Savings Account 17,151,017 16,135,387
Construction Savings Account 9,732,139 8,160,414
Net assets $450,921,485 $448,623,544
The net assets of the Master Trust at December 31, 1994 and 1993 are
summarized as follows:
1994 1993
Commingled fund holding principally
short-term fixed income investments
and loans to participants $ 30,247,021 $ 18,678,781
Guaranteed investment contracts 20,924,682 19,803,668
Fund holding principally real
estate investments 14,449,642 12,044,398
Fund holding principally intermediate-
term fixed income investments 51,667,752 57,877,310
Commingled funds holding principally
common stock 160,969,643 157,489,866
Commingled funds holding principally
international equity instruments 56,042,408 73,558,068
Fund holding Vulcan Materials Company
common stock 116,620,337 109,171,453
Net assets $450,921,485 $448,623,544
The total investment income by type of the Master Trust at December 31,
1994 and 1993 is summarized as follows:
1994 1993
Interest, net $ 1,971,049 $ 1,897,072
Dividends 3,003,469 2,898,022
Other 346,867 69,745
Net investment gains (losses):
Realized 15,145,823 24,636,203
Unrealized (4,905,558) 5,391,112
Total $15,561,650 $34,892,154
Investments held by the Plan at December 31, 1994 and 1993, respectively
are as follows:
1994 1993
Collective short-term investments
(cost and market) $17,884 $15,595
Guaranteed investment contract (at contract value) -
Insurance Contract Guaranteed
Company Year Rate* Maturity Dates 1994 1993
Metropolitan Life 1991 5.75%** May 1, annually $13,189,161 $13,119,928
<FN>
* Rates are net of insurance company charges.
** Interest rate was 7.43% from January 1 - April 30, 1993,
6.09% from May 1, 1993 - April 30, 1994,
and 5.75% from May 1 - December 31, 1994.
Upon maturity, the Company renegotiates new terms on these contracts.
Commingled funds: 1994 1993
Cost Market Cost Market
Funds holding principally
common stock - 2,924.24
shares (1994) and
1,909.70 shares (1993) $ 739,822 $ 857,309 $ 430,363 $ 542,420
Fund holding Vulcan Materials
Company common stock -
56,105 shares (1994)
and 48,426 shares (1993) $2,414,874 $2,840,316 $2,036,843 $2,269,969
4. CHANGES IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
Investments held by the Plan at December 31, 1994 and 1993 and changes in
unrealized appreciation (depreciation) of investments for the years then
ended are summarized below:
Market or Current Year
Contract Cumulative Appreciation Prior Years
Cost Value Appreciation (Depreciation) Appreciation
December 31, 1994:
Collective short-term
investments $ 17,884 $ 17,884
Guaranteed investment
contracts 13,189,161 13,189,161
Commingled funds
holding principally
common stock 739,822 857,309 $117,487 $ 5,430 $112,057
Fund holding Vulcan
Materials Company
common stock 2,414,874 2,840,316 425,442 192,316 233,126
Loans to participants 48,560 48,560
Total $16,410,301 $16,953,230 $542,929 $197,746 $345,183
December 31, 1993:
Collective short-term
investments $ 15,595 $ 15,595
Guaranteed investment
contracts 13,119,928 13,119,928
Commingled funds
holding principally
common stock 430,363 542,420 $112,057 $ 68,041 $ 44,016
Fund holding Vulcan
Materials Company
common stock 2,036,843 2,269,969 233,126 (70,508) 303,634
Total $15,602,729 $15,947,912 $345,183 $ (2,467) $347,650
5. INVESTMENT PROGRAM
The number of participants electing each investment option is shown
below:
As of December 31,
1994 1993
(1) A fund invested in guaranteed
investment contracts 209 245
(2) Commingled funds invested
primarily in common stocks
of large companies 13 6
(3) Common stock of Vulcan
Materials Company 30 31
(4) Any combination of (1),
(2) or (3) 278 269
Investment managers have been appointed whose duty is to advise the
trustee as to particular investments to be made. As of December 31, 1994,
the investment managers were as follows:
(1) Guaranteed investment The Northern Trust Company
contracts and Vulcan 50 South LaSalle Street
Materials Company Chicago, Illinois 60675
stock fund
(2) Large companies Trinity Investment
common stock fund Management Corporation
Ten Tremont Street
Boston, Massachusetts 02108
6. TAX STATUS
The Plan obtained its latest determination letter on June 14, 1993, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. The Plan has been amended since receiving the determination letter.
However, the Plan administrator believes that the Plan is currently
designed and being operated in compliance with the applicable requirements
of the Internal Revenue Code. Therefore, no provision for income taxes
has been included in the Plan's financial statements.
* * * * *
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement
No. 33-28397 of Vulcan Materials Company on Form S-8 of our reports dated
February 3, 1995 and June 2, 1995, appearing in the Annual Report on Form
10-K of Vulcan Materials Company for the year ended December 31, 1994 and in
the Annual Report on Form 11-K of the Vulcan Materials Company Chemicals
Division Hourly Employees Savings Plan for the year ended December 31, 1994,
respectively. We also consent to the reference to us under the heading
"Experts" in the Registration Statement.
/s/ Deloitte & Touche LLP
Birmingham, Alabama
June 26, 1995