Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
 	 	 	
x	 	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934	
For the quarterly period ended June 30, 2011
OR
 	 	 	
o	 	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934	
For the transition period from            to            
Commission File Number 001-33841
VULCAN MATERIALS COMPANY
(Exact name of registrant as specified in its charter)

New Jersey
(State or other jurisdiction of incorporation)	 	20-8579133
(I.R.S. Employer Identification No.)	
 	 	 	
1200 Urban Center Drive, Birmingham, Alabama
(Address of principal executive offices)	 	35242
(zip code)	
(205) 298-3000 ( Registrant’s telephone number including area code)
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 for 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 o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	 	Accelerated filer o	 	Non-accelerated filer o	 	Smaller reporting company o	
 		
(Do not check if a smaller reporting company)	 	 	
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class
	 	Shares outstanding
at June 30, 2011
	
Common Stock, $1 Par Value	 	129,224,468	

 

VULCAN MATERIALS COMPANY
FORM 10-Q
QUARTER ENDED JUNE 30, 2011
CONTENTS
 	 	 	 	 	
 	 	Page	 	
PART I            FINANCIAL INFORMATION	 	 	 	 	
 		
Item 1.      Financial Statements	 	 	 	 	
  Condensed Consolidated Balance Sheets	 	 	3	 	
  Condensed Consolidated Statements of Comprehensive Income	 	 	4	 	
  Condensed Consolidated Statements of Cash Flows	 	 	5	 	
  Notes to Condensed Consolidated Financial Statements	 	 	6	 	
 		
Item 2.      Management’s Discussion and Analysis of Financial
Condition and Results of Operations	 	 	24	 	
 		
Item 3.      Quantitative and Qualitative Disclosures About
Market Risk	 	 	38	 	
 		
Item 4.      Controls and Procedures	 	 	38	 	
 		
PART II          OTHER INFORMATION	 	 	 	 	
 		
Item 1.      Legal Proceedings	 	 	39	 	
 		
Item 1A.   Risk Factors	 	 	39	 	
 		
Item 6.      Exhibits	 	 	39	 	
 		
  Signatures	 	 	40	 	
  EX-31.A	
  EX-31.B	
  EX-32.A	
  EX-32.B	
  EX-99	
  EX-101 INSTANCE DOCUMENT	
  EX-101 SCHEMA DOCUMENT	
  EX-101 CALCULATION LINKBASE DOCUMENT	
  EX-101 LABELS LINKBASE DOCUMENT	
  EX-101 PRESENTATION LINKBASE DOCUMENT	
  EX-101 DEFINITION LINKBASE DOCUMENT	
2 

Table of Contents
PART I FINANCIAL INFORMATION
ITEM 1
FINANCIAL STATEMENTS
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS

 	 	June 30	 	 	December 31	 	 	June 30	 	
 	 	2011	 	 	2010	 	 	2010	 	
Unaudited, except for December 31	 	 	 	 	 	 	(As Restated,	 	
in thousands, except per share data	 	 	 	 	 	 	See Note 1)	 	
 	 	 	 	 	 	 	 	 	 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	   	$106,744	 	 	 	$47,541	 	 	 	$42,173	 	
Restricted cash	 	 	109	 	 	 	547	 	 	 	3,746	 	
Medium-term investments	 	 	0	 	 	 	0	 	 	 	3,910	 	
Accounts and notes receivable	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts and notes receivable, gross	 	 	397,423	 	 	 	325,303	 	 	 	398,613	 	
Less: Allowance for doubtful accounts	 	 	(7,641	)	 	 	(7,505	)	 	 	(9,290	)	
 	 	 	 	 	 	 	 	 	 	
Accounts and notes receivable, net	 	 	389,782	 	 	 	317,798	 	 	 	389,323	 	
Inventories	 	 	 	 	 	 	 	 	 	 	 	 	
Finished products	 	 	259,109	 	 	 	254,840	 	 	 	246,956	 	
Raw materials	 	 	26,300	 	 	 	22,222	 	 	 	23,114	 	
Products in process	 	 	4,930	 	 	 	6,036	 	 	 	3,784	 	
Operating supplies and other	 	 	38,926	 	 	 	36,747	 	 	 	37,486	 	
 	 	 	 	 	 	 	 	 	 	
Inventories	 	 	329,265	 	 	 	319,845	 	 	 	311,340	 	
Current deferred income taxes	 	 	44,794	 	 	 	53,794	 	 	 	57,575	 	
Prepaid expenses	 	 	21,659	 	 	 	19,374	 	 	 	33,972	 	
Assets held for sale	 	 	0	 	 	 	13,207	 	 	 	14,864	 	
 	 	 	 	 	 	 	 	 	 	
Total current assets	 	 	892,353	 	 	 	772,106	 	 	 	856,903	 	
Investments and long-term receivables	 	 	37,251	 	 	 	37,386	 	 	 	34,078	 	
Property, plant & equipment	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant & equipment, cost	 	 	6,739,908	 	 	 	6,692,814	 	 	 	6,632,580	 	
Reserve for depreciation, depletion & amortization	 	 	(3,197,163	)	 	 	(3,059,900	)	 	 	(2,915,565	)	
 	 	 	 	 	 	 	 	 	 	
Property, plant & equipment, net	 	 	3,542,745	 	 	 	3,632,914	 	 	 	3,717,015	 	
Goodwill	 	 	3,097,016	 	 	 	3,097,016	 	 	 	3,096,300	 	
Other intangible assets, net	 	 	694,509	 	 	 	691,693	 	 	 	681,059	 	
Other noncurrent assets	 	 	121,736	 	 	 	106,776	 	 	 	101,610	 	
 	 	 	 	 	 	 	 	 	 	
Total assets	 	 	$8,385,610	 	 	 	$8,337,891	 	 	 	$8,486,965	 	
 	 	 	 	 	 	 	 	 	 	
Liabilities	 	 	 	 	 	 	 	 	 	 	 	 	
Current maturities of long-term debt	 	 	$5,230	 	 	 	$5,246	 	 	 	$425,300	 	
Short-term borrowings	 	 	100,000	 	 	 	285,500	 	 	 	320,000	 	
Trade payables and accruals	 	 	153,729	 	 	 	102,315	 	 	 	168,269	 	
Other current liabilities	 	 	162,001	 	 	 	172,495	 	 	 	160,151	 	
Liabilities of assets held for sale	 	 	0	 	 	 	116	 	 	 	409	 	
 	 	 	 	 	 	 	 	 	 	
Total current liabilities	 	 	420,960	 	 	 	565,672	 	 	 	1,074,129	 	
Long-term debt	 	 	2,785,843	 	 	 	2,427,516	 	 	 	2,001,180	 	
Noncurrent deferred income taxes	 	 	762,406	 	 	 	849,448	 	 	 	843,408	 	
Other noncurrent liabilities	 	 	535,136	 	 	 	530,275	 	 	 	538,929	 	
 	 	 	 	 	 	 	 	 	 	
Total liabilities	 	 	4,504,345	 	 	 	4,372,911	 	 	 	4,457,646	 	
 	 	 	 	 	 	 	 	 	 	
Other commitments and contingencies (Note 19)	 	 	 	 	 	 	 	 	 	 	 	 	
Equity	 	 	 	 	 	 	 	 	 	 	 	 	
Common stock, $1 par value	 	 	129,224	 	 	 	128,570	 	 	 	128,270	 	
Capital in excess of par value	 	 	2,534,562	 	 	 	2,500,886	 	 	 	2,477,672	 	
Retained earnings	 	 	1,385,208	 	 	 	1,512,863	 	 	 	1,610,835	 	
Accumulated other comprehensive loss	 	 	(167,729	)	 	 	(177,339	)	 	 	(187,458	)	
 	 	 	 	 	 	 	 	 	 	
Total equity	 	 	3,881,265	 	 	 	3,964,980	 	 	 	4,029,319	 	
 	 	 	 	 	 	 	 	 	 	
Total liabilities and equity	 	 	$8,385,610	 	 	 	$8,337,891	 	 	 	$8,486,965	 	
 	 	 	 	 	 	 	 	 	 	
The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
3 

Table of Contents

VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME

 	 	Three Months Ended	 	 	Six Months Ended	 	
Unaudited	 	 	 	 	 	June 30	 	 	 	 	 	 	June 30	 	
in thousands, except per share data	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	 	$657,457	 	 	 	$692,758	 	 	 	$1,113,773	 	 	 	$1,157,293	 	
Delivery revenues	 	 	44,514	 	 	 	43,394	 	 	 	75,398	 	 	 	72,122	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues	 	 	701,971	 	 	 	736,152	 	 	 	1,189,171	 	 	 	1,229,415	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of goods sold (Note 8)	 	 	556,617	 	 	 	570,423	 	 	 	1,020,039	 	 	 	1,034,063	 	
Delivery costs	 	 	44,514	 	 	 	43,394	 	 	 	75,398	 	 	 	72,122	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of revenues	 	 	601,131	 	 	 	613,817	 	 	 	1,095,437	 	 	 	1,106,185	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	100,840	 	 	 	122,335	 	 	 	93,734	 	 	 	123,230	 	
Selling, administrative and general expenses (Note 8)	 	 	75,893	 	 	 	83,376	 	 	 	153,408	 	 	 	169,872	 	
Gain on sale of property, plant & equipment	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
and businesses, net	 	 	2,919	 	 	 	1,362	 	 	 	3,373	 	 	 	49,734	 	
Recovery (charge) from legal settlement (Note 19)	 	 	0	 	 	 	(40,000	)	 	 	25,546	 	 	 	(40,000	)	
Other operating income (expense), net	 	 	(4,378	)	 	 	889	 	 	 	(6,940	)	 	 	1,347	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating earnings (loss)	 	 	23,488	 	 	 	1,210	 	 	 	(37,695	)	 	 	(35,561	)	
Other nonoperating income (expense), net	 	 	(20	)	 	 	(1,233	)	 	 	1,361	 	 	 	144	 	
Interest expense, net (Note 8)	 	 	70,911	 	 	 	43,723	 	 	 	113,161	 	 	 	87,016	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
before income taxes	 	 	(47,443	)	 	 	(43,746	)	 	 	(149,495	)	 	 	(122,433	)	
Benefit from income taxes	 	 	(40,341	)	 	 	(21,231	)	 	 	(77,771	)	 	 	(55,444	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	 	(7,102	)	 	 	(22,515	)	 	 	(71,724	)	 	 	(66,989	)	
Earnings (loss) on discontinued operations, net of tax	 	 	(1,037	)	 	 	(1,477	)	 	 	8,852	 	 	 	4,250	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	 	($8,139	)	 	 	($23,992	)	 	 	($62,872	)	 	 	($62,739	)	

Other comprehensive income, net of tax	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fair value adjustments to cash flow hedges	 	 	0	 	 	 	124	 	 	 	0	 	 	 	(320	)	
Reclassification adjustment for cash flow hedges	 	 	4,003	 	 	 	2,645	 	 	 	5,453	 	 	 	5,498	 	
Amortization of pension and postretirement plan	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
actuarial loss and prior service cost	 	 	1,941	 	 	 	823	 	 	 	4,158	 	 	 	1,722	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income	 	 	5,944	 	 	 	3,592	 	 	 	9,611	 	 	 	6,900	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Comprehensive loss	 	 	($2,195	)	 	 	($20,400	)	 	 	($53,261	)	 	 	($55,839	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings (loss) per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	 	($0.05	)	 	 	($0.18	)	 	 	($0.55	)	 	 	($0.53	)	
Discontinued operations	 	 	($0.01	)	 	 	($0.01	)	 	 	$0.06	 	 	 	$0.04	 	
Net loss per share	 	 	($0.06	)	 	 	($0.19	)	 	 	($0.49	)	 	 	($0.49	)	
Diluted earnings (loss) per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	 	($0.05	)	 	 	($0.18	)	 	 	($0.55	)	 	 	($0.53	)	
Discontinued operations	 	 	($0.01	)	 	 	($0.01	)	 	 	$0.06	 	 	 	$0.04	 	
Net loss per share	 	 	($0.06	)	 	 	($0.19	)	 	 	($0.49	)	 	 	($0.49	)	
Weighted-average common shares outstanding	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	 	129,446	 	 	 	128,168	 	 	 	129,263	 	 	 	127,452	 	
Assuming dilution	 	 	129,446	 	 	 	128,168	 	 	 	129,263	 	 	 	127,452	 	
Cash dividends declared per share of common stock	 	 	$0.25	 	 	 	$0.25	 	 	 	$0.50	 	 	 	$0.50	 	
Depreciation, depletion, accretion and amortization	 	 	$92,137	 	 	 	$97,280	 	 	 	$182,723	 	 	 	$191,476	 	
Effective tax rate from continuing operations	 	 	85.0 %	 	 	 	48.5%	 	 	 	52.0 %	 	 	 	45.3%	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
4 

Table of Contents

VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 	 	Six Months Ended	 	
Unaudited	 	 	 	 	 	June 30	 	
in thousands	 	2011	 	 	2010	 	
 	 	 	 	 	 	 	
Operating Activities	 	 	 	 	 	 	 	 	
Net loss	 	 	($62,872	)	 	 	($62,739	)	
Adjustments to reconcile net loss to net cash provided by operating activities	 	 	 	 	 	 	 	 	
Depreciation, depletion, accretion and amortization	 	 	182,723	 	 	 	191,476	 	
Net gain on sale of property, plant & equipment and businesses	 	 	(15,657	)	 	 	(58,527	)	
Contributions to pension plans	 	 	(1,995	)	 	 	(21,075	)	
Share-based compensation	 	 	8,849	 	 	 	10,524	 	
Deferred tax provision	 	 	(92,031	)	 	 	(54,755	)	
Changes in assets and liabilities before initial effects of business acquisitions	 	 	 	 	 	 	 	 	
and dispositions	 	 	(37,591	)	 	 	2,585	 	
Cost of debt purchase	 	 	19,153	 	 	 	0	 	
Other, net	 	 	6,437	 	 	 	11,167	 	
 	 	 	 	 	 	 	
Net cash provided by operating activities	 	 	7,016	 	 	 	18,656	 	
 	 	 	 	 	 	 	
Investing Activities	 	 	 	 	 	 	 	 	
Purchases of property, plant & equipment	 	 	(51,512	)	 	 	(42,158	)	
Proceeds from sale of property, plant & equipment	 	 	6,717	 	 	 	3,224	 	
Proceeds from sale of businesses, net of transaction costs	 	 	12,284	 	 	 	50,954	 	
Decrease (increase) in restricted cash	 	 	437	 	 	 	(3,746	)	
Other, net	 	 	927	 	 	 	(283	)	
 	 	 	 	 	 	 	
Net cash provided by (used for) investing activities	 	 	(31,147	)	 	 	7,991	 	
 	 	 	 	 	 	 	
Financing Activities	 	 	 	 	 	 	 	 	
Net short-term borrowings (payments)	 	 	(185,500	)	 	 	83,488	 	
Payment of current maturities and long-term debt	 	 	(737,739	)	 	 	(75,188	)	
Proceeds from issuance of long-term debt	 	 	1,100,000	 	 	 	0	 	
Debt issuance costs	 	 	(17,904	)	 	 	0	 	
Proceeds from issuance of common stock	 	 	4,936	 	 	 	35,314	 	
Dividends paid	 	 	(64,570	)	 	 	(63,600	)	
Proceeds from exercise of stock options	 	 	3,232	 	 	 	12,597	 	
Cost of debt purchase	 	 	(19,153	)	 	 	0	 	
Other, net	 	 	32	 	 	 	650	 	
 	 	 	 	 	 	 	
Net cash provided by (used for) financing activities	 	 	83,334	 	 	 	(6,739	)	
 	 	 	 	 	 	 	
Net increase in cash and cash equivalents	 	 	59,203	 	 	 	19,908	 	
Cash and cash equivalents at beginning of year	 	 	47,541	 	 	 	22,265	 	
 	 	 	 	 	 	 	
Cash and cash equivalents at end of period	 	 	$106,744	 	 	 	$42,173	 	
 	 	 	 	 	 	 	
The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
5 

Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
Vulcan Materials Company (the “Company,” “Vulcan,” “we,” “our”), a New Jersey corporation, is the nation’s largest producer of construction aggregates, primarily crushed stone, sand and gravel; a major producer of asphalt mix and ready-mixed concrete and a leading producer of cement in Florida.
Our accompanying unaudited condensed consolidated financial statements were prepared in compliance with the instructions to Form 10-Q and Article 10 of Regulation S-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 and six month periods ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ended December 31, 2011. For further information, refer to the consolidated financial statements and footnotes included in our most recent Annual Report on Form 10-K.
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 Comprehensive Income.
RECLASSIFICATIONS
Certain items previously reported in specific financial statement captions have been reclassified to conform with the 2011 presentation.
CORRECTION OF PRIOR PERIOD FINANCIAL STATEMENTS
During 2010 we completed a comprehensive analysis of our deferred income tax balances and concluded that our deferred income tax liabilities were understated. The errors arose during 2008 and during periods prior to January 1, 2007, and are not material to previously issued financial statements. As a result, we did not amend previously filed financial statements but restated the December 31, 2009 balance sheet in our Annual Report on Form 10-K for the year ended December 31, 2010 and have restated the June 30, 2010 balance sheet presented in this Form 10-Q.
The errors that arose during 2008 related to the calculations of deferred income taxes referable to the Florida Rock acquisition and additional 2008 federal return adjustments. The correction of these errors resulted in a decrease to deferred income tax liabilities of $6,129,000, an increase to goodwill referable to our Aggregates segment of $2,321,000 and an increase in current taxes payable of $8,450,000 for the year ended December 31, 2008.
The errors that arose during periods prior to January 1, 2007 resulted in an understatement of deferred income tax liabilities of $14,785,000. Based on the work performed to confirm the current and deferred income tax provisions recorded during 2007, 2008 and 2009, and to determine the correct deferred income tax account balances as of January 1, 2007, we were able to substantiate that the $14,785,000 understatement related to periods prior to January 1, 2007. The correction of these errors resulted in an increase to deferred income tax liabilities and a corresponding decrease to retained earnings of $14,785,000 as of January 1, 2007.
6 

Table of Contents

A summary of the effects of the correction of the errors on our Condensed Consolidated Balance Sheet as of June 30, 2010, is presented in the table below:

 	 	As of June 30, 2010	 	
 	 	As	 	 	 	 	 	 	As	 	
in thousands	 	Reported	 	 	Correction	 	 	Restated	 	
 	
Balance Sheet	 	 	 	 	 	 	 	 	 	 	 	 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	
Current deferred income taxes	 	 	$59,525	 	 	 	($1,950	)	 	 	$57,575	 	
Prepaid expenses	 	 	42,422	 	 	 	(8,450	)	 	 	33,972	 	
 	
Total current assets	 	 	867,303	 	 	 	(10,400	)	 	 	856,903	 	
Goodwill	 	 	3,093,979	 	 	 	2,321	 	 	 	3,096,300	 	
 	
Total assets	 	 	$8,495,044	 	 	 	($8,079	)	 	 	$8,486,965	 	
 	
Liabilities	 	 	 	 	 	 	 	 	 	 	 	 	
Noncurrent deferred income taxes	 	 	$836,702	 	 	 	$6,706	 	 	 	$843,408	 	
 	
Total liabilities	 	 	4,450,940	 	 	 	6,706	 	 	 	4,457,646	 	
 	
Equity	 	 	 	 	 	 	 	 	 	 	 	 	
Retained earnings	 	 	1,625,620	 	 	 	(14,785	)	 	 	1,610,835	 	
 	
Total equity	 	 	4,044,104	 	 	 	(14,785	)	 	 	4,029,319	 	
 	
Total liabilities and equity	 	 	$8,495,044	 	 	 	($8,079	)	 	 	$8,486,965	 	
 	
NOTE 2: DISCONTINUED OPERATIONS
In 2005, 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 based on the performance of the hydrochlorocarbon product HCC-240fa (commonly referred to as 5CP) from the closing of the transaction through December 31, 2012 (5CP earn-out). The primary determinant of the value for this earn-out is the level of growth in 5CP sales volume. At the June 7, 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 March 2011, we received a payment of $12,284,000 under the 5CP earn-out related to performance during the year ended December 31, 2010. During the first quarter of 2010, we received $8,794,000 under the 5CP earn-out related to the year ended December 31, 2009. These receipts were recorded as gains on disposal of discontinued operations. Through June 30, 2011, we have received a total of $54,991,000 under the 5CP earn-out, a total of $21,890,000 in excess of the receivable recorded on the date of disposition.
We are liable for a cash transaction bonus payable to certain former key 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 year’s results. We expect the 2011 payout will be $1,228,000 and have accrued this amount as of June 30, 2011. In comparison, we had accrued $882,000 as of June 30, 2010.
7 

Table of Contents

The financial results of the Chemicals business are classified as discontinued operations in the accompanying Condensed Consolidated Statements of Comprehensive Income for all periods presented. There were no net sales or revenues from discontinued operations during the six month periods ended June 30, 2011 and 2010. Results from discontinued operations are as follows:

 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30	 	 	June 30	 	
in thousands	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	
Discontinued Operations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pretax earnings (loss) from results	 	 	($1,719	)	 	 	($1,821	)	 	 	$3,587	 	 	 	($860	)	
Gain on disposal, net of transaction bonus	 	 	0	 	 	 	(2	)	 	 	11,056	 	 	 	7,912	 	
Income tax (provision) benefit	 	 	682	 	 	 	346	 	 	 	(5,791	)	 	 	(2,802	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings (loss) on discontinued operations,
net of tax	 	 	($1,037	)	 	 	($1,477	)	 	 	$8,852	 	 	 	$4,250	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
The second quarter pretax losses from results of discontinued operations of ($1,719,000) in 2011 and ($1,821,000) in 2010 were due primarily to general and product liability costs, including legal defense costs, and environmental remediation costs associated with our former Chemicals business. The pretax earnings from results of discontinued operations of $3,587,000 for the six months ended June 30, 2011 includes a $7,500,000 pretax gain recognized in the first quarter on recovery from an insurer in lawsuits involving perchloroethylene. This gain was offset in part by general and product liability costs, including legal defense costs, and environmental remediation costs. The pretax loss from results of discontinued operations of ($860,000) for the six months ended June 30, 2010 includes litigation settlements associated with our former Chemicals business offset in part by general and product liability costs, including legal defense costs, and environmental remediation costs.
NOTE 3: EARNINGS PER SHARE (EPS)
We report two earnings per share numbers: basic and diluted. These are computed by dividing net earnings by the weighted-average common shares outstanding (basic EPS) or weighted-average common shares outstanding assuming dilution (diluted EPS) as set forth below:

 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30	 	 	June 30	 	
in thousands	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	
Weighted-average common shares
outstanding	 	 	129,446	 	 	 	128,168	 	 	 	129,263	 	 	 	127,452	 	
Dilutive effect of	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stock options/SOSARs	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	
Other stock compensation plans	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted-average common shares
outstanding, assuming dilution	 	 	129,446	 	 	 	128,168	 	 	 	129,263	 	 	 	127,452	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
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. In periods of loss, shares that otherwise would have been included in our diluted weighted-average common shares outstanding computation are excluded. These excluded shares are as follows: three months ended June 30, 2011 — 291,000 shares, three months ended June 30, 2010 — 513,000 shares, six months ended June 30, 2011 — 324,000 shares and six months ended June 30, 2010 — 533,000 shares.
8 

Table of Contents

The number of antidilutive common stock equivalents for which the exercise price exceeds the weighted-average market price, are as follows:

 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30	 	 	June 30	 	
in thousands	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	
Antidilutive common stock equivalents	 	 	5,873	 	 	 	4,067	 	 	 	5,873	 	 	 	4,254	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
NOTE 4: INCOME TAXES
Our income tax provision and the corresponding annual effective tax rate are 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 effective tax rate based on projected taxable income for the full year and record a quarterly tax provision in accordance with the expected annual effective tax rate. As the year progresses, we refine the estimates of the year’s 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 annual 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 income tax provision reflects the expected annual effective tax rate. Significant judgment is required in determining our annual effective tax rate and in evaluating our tax positions.
When application of the expected annual effective tax rate distorts the financial results of an interim period, we calculate the income tax provision or benefit using an alternative methodology. This alternative methodology results in an income tax provision or benefit based solely on the year-to-date pretax income or loss as adjusted for permanent differences on a pro rata basis.
We recognize an income 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 income 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. We consider resolution for an issue to occur at the earlier of settlement of an examination, the expiration of the statute of limitations, or when the issue is effectively settled. Our income tax provision includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as we consider appropriate.
In the first quarter of 2011, we applied the alternative methodology discussed above in the determination of the income tax benefit from continuing operations. However, as of June 30, 2011, the conditions requiring the alternative methodology no longer existed. As a result, in the second quarter of 2011, we estimated the annual effective tax rate based on our projected taxable loss for the full year and recorded a quarterly tax benefit in accordance with the expected annual effective tax rate.
We recorded income tax benefits from continuing operations of $40,341,000 in the second quarter of 2011 compared to $21,231,000 in the second quarter of 2010. An adjustment to the current quarter’s income tax benefit was required so that the year-to-date benefit reflects the expected annual effective tax rate. The increase in our income tax benefit resulted largely from applying the alternative methodology in the second quarter of 2010. We recorded income tax benefits from continuing operations of $77,771,000 for the six months ended June 30, 2011 compared to $55,444,000 for the six months ended June 30, 2010. The increase in our income tax benefit resulted largely from applying the alternative methodology for the first six months of 2010.
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: June 30, 2011 — $0, December 31, 2010 — $5,531,000 and June 30, 2010 — $5,532,000. The substantial majority of our investment was held in the Reserve International Liquidity Fund, Ltd. On September 15, 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.
9 

Table of Contents

As a result of the temporary suspension of redemptions and the uncertainty as to the timing of such redemptions, during 2008 we changed the classification of our investments in The Reserve funds from cash and cash equivalents to medium-term investments. We reduced the carrying value of our investment to its estimated fair value of $3,630,000 and $3,910,000 as of December 31, 2010 and June 30, 2010, respectively. See Note 7 for further discussion of the fair value determination.
During January 2011, we received $3,630,000 from the Reserve representing the final redemption of the investment. As a result of this redemption, we reclassified our investments in The Reserve funds from medium-term investments to cash and cash equivalents as of December 31, 2010.
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 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 accounting for gains and losses that result from changes in the fair value of derivative instruments depends on whether the derivatives have been designated and qualify as hedging instruments and the type of hedging relationship. The interest rate swap agreements described below were designated as either fair value hedges or cash flow hedges. The changes in fair value of our interest rate swap fair value hedges are recorded as interest expense consistent with the change in the fair value of the hedged items attributable to the risk being hedged. The changes in fair value of our interest rate swap cash flow hedges are recorded in accumulated other comprehensive income (AOCI) and are reclassified into interest expense in the same period the hedged items affect 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:

 	 	 	 	 	 	Fair Value 1	 	
 	 	 	 	 	 	June 30	 	 	December 31	 	 	June 30	 	
in thousands	 	Balance Sheet Location	 	2011	 	 	2010	 	 	2010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest rate swaps	 	Other current liabilities	 	 	$0	 	 	 	$0	 	 	 	$5,614	 	
Interest rate swaps	 	Other noncurrent liabilities	 	 	7,419	 	 	 	0	 	 	 	0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total hedging instrument liabilities	 	 	 	 	 	 	$7,419	 	 	 	$0	 	 	 	$5,614	 	

    1	 	See Note 7 for further discussion of the fair value determination.	
We use interest rate swap agreements designated as cash flow hedges to minimize the variability in cash flows of liabilities or forecasted transactions caused by fluctuations in interest rates. In December 2007, we issued $325,000,000 of 3-year floating-rate notes that bore 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 amount of $325,000,000. Under this agreement, we paid a fixed interest rate of 5.25% and received 3-month LIBOR plus 1.25% per annum. Concurrent with each quarterly interest payment, the portion of this swap related to that interest payment was settled and the associated realized gain or loss was recognized. This swap agreement terminated December 15, 2010, coinciding with the maturity of the 3-year notes.
Additionally, during 2007, we entered into fifteen forward starting interest rate swap agreements for a total stated amount of $1,500,000,000. Upon the 2007 and 2008 issuances of the related fixed-rate debt, we terminated and settled these forward starting swaps for cash payments of $89,777,000. Amounts accumulated in other comprehensive loss are being amortized to interest expense over the term of the related debt. For the twelve month period ending June 30, 2012, we estimate that $6,247,000 of the pretax loss accumulated in other comprehensive income (OCI) will be reclassified to earnings.
10 

Table of Contents

The effects of changes in the fair values of derivatives designed as cash flow hedges on the accompanying Condensed Consolidated Statements of Comprehensive Income are as follows:

 	 	 	 	 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	Location on	 	 	June 30	 	 	June 30	 	
in thousands	 	Statements	 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash Flow Hedges	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gain (loss) recognized in OCI
(effective portion)	 	OCI	 	 	 	$0	 	 	 	$234	 	 	 	$0	 	 	 	($574	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gain (loss) reclassified from	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accumulated OCI	 	Interest	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(effective portion)	 	expense	 	 	 	(6,678	)	 	 	(4,997	)	 	 	(8,672	)	 	 	(9,895)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
We use interest rate swap agreements designated as fair value hedges to minimize exposure to changes in the fair value of fixed-rate debt that results from fluctuations in the benchmark interest rates for such debt. In June 2011, we issued $500,000,000 of 6.50% fixed-rate debt maturing on December 1, 2016. Concurrently, we entered into interest rate swap agreements in the stated amount of $500,000,000. Under these agreements, we pay 6-month LIBOR plus a spread of approximately 4.05% and receive a fixed interest rate of 6.50%. Additionally, in June 2011, we entered into interest rate swap agreements on our $150,000,000 fixed-rate 10.125% 7-year notes issued in 2009. Under these agreements, we pay 6-month LIBOR plus a spread of approximately 8.03% and receive a fixed interest rate of 10.125%.
The effects of changes in the fair value of derivatives designated as fair value hedges on the accompanying Condensed Consolidated Statements of Comprehensive Income are as follows:

 	 	 	 	 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	Location on	 	 	June 30	 	 	June 30	 	
in thousands	 	Statements	 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fair Value Hedges	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gain (loss) recognized in income	 	Interest	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Interest rate swaps	 	expense	 	 	($7,419	)	 	 	$0	 	 	 	($7,419	)	 	 	$0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gain (loss) recognized in income	 	Interest	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Fixed rate debt	 	expense	 	 	7,419	 	 	 	0	 	 	 	7,419	 	 	 	0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
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:

 	 	 	 	 	 	Level 1	 	 	 	 	
 	 	June 30	 	 	December 31	 	 	June 30	 	
in thousands	 	2011	 	 	2010	 	 	2010	 	
 	 	 	 	 	 	 	 	 	 	
Fair Value Recurring	 	 	 	 	 	 	 	 	 	 	 	 	
Rabbi Trust	 	 	 	 	 	 	 	 	 	 	 	 	
Mutual funds	 	 	$14,836	 	 	 	$13,960	 	 	 	$10,787	 	
Equities	 	 	8,413	 	 	 	9,336	 	 	 	7,236	 	
 	 	 	 	 	 	 	 	 	 	
Total asset	 	 	$23,249	 	 	 	$23,296	 	 	 	$18,023	 	
 	 	 	 	 	 	 	 	 	 	
11 

Table of Contents

 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Level 2	
 	 	June 30	 	December 31	 	 	June 30	 	
in thousands	 	2011	 	 	2010	 	 	2010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Fair Value Recurring	 	 	 	 	 	 	 	 	 	 	 	 	
Medium-term investments	 	 	$0	 	 	 	$0	 	 	 	$3,910	 	
Interest rate swaps	 	 	(7,419	)	 	 	0	 	 	 	(5,614	)	
Rabbi Trust	 	 	 	 	 	 	 	 	 	 	 	 	
Common/collective trust funds	 	 	1,368	 	 	 	2,431	 	 	 	3,185	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net asset (liability)	 	 	($6,051	)	 	 	$2,431	 	 	 	$1,481	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
The Rabbi Trust investments relate to funding for the executive nonqualified deferred compensation and excess benefit plans. The fair values of these 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 were 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 applying our historical distribution ratio to the liquidated value of investments in The Reserve funds. 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 would reduce the principal available for distribution.
Interest rate swaps are measured at fair value using quoted market prices or pricing models using prevailing market interest rate as of the measurement date. These interest rate swaps are more fully described in Note 6.
The carrying values of our cash equivalents, restricted cash, accounts and notes receivable, current maturities of long-term debt, short-term borrowings, trade payables and other accrued expenses approximate their fair values because of the short-term nature of these instruments. Additional disclosures for derivative instruments and interest-bearing debt are presented in Notes 6 and 11, respectively.
Assets that were subject to fair value measurement on a nonrecurring basis are summarized below:

 	 	As of December 31, 2010	 	
 	 	 	 	 	 	Impairment	 	
in thousands	 	Level 3	 	 	Charges	 	
 	
Fair Value Nonrecurring	 	 	 	 	 	 	 	 	
Property, plant & equipment	 	 	$1,536	 	 	 	$2,500	 	
Assets held for sale	 	 	9,625	 	 	 	1,436	 	
 	
Totals	 	 	$11,161	 	 	 	$3,936	 	
 	
We recorded a $3,936,000 loss on impairment of long-lived assets in 2010. We utilized an income approach to measure the fair value of the long-lived assets and determined that the carrying value of the assets exceeded the fair value. The loss on impairment represents the difference between the carrying value and the fair value (less costs to sell for assets held for sale) of the impacted long-lived assets.
12 

Table of Contents

NOTE 8: OTHER COMPREHENSIVE INCOME (OCI)
Comprehensive income includes charges and credits to equity from nonowner sources and comprises two subsets: net earnings and other comprehensive income. The components of other comprehensive income are presented in the accompanying Condensed Consolidated Statements of Comprehensive Income, net of applicable taxes.
Amounts accumulated in other comprehensive income (loss), net of tax, are as follows:

 	 	June 30	 	 	December 31	 	 	June 30	 	 	 	 	
in thousands	 	2011	 	 	2010	 	 	2010	 	 	 	 	 	
Accumulated Other Comprehensive Loss	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flow hedges	 	 	($33,685	)	 	 	($39,137	)	 	 	($44,187	)	 	 	 	 	
Pension and postretirement plans	 	 	(134,044	)	 	 	(138,202	)	 	 	(143,271	)	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	($167,729	)	 	 	($177,339	)	 	 	($187,458	)	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Amounts reclassified from other comprehensive income (loss) to net loss, are as follows:

 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30	 	 	June 30	 	
in thousands	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
Reclassification Adjustment for Cash Flow
Hedges	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense, net	 	 	$6,658	 	 	 	$4,977	 	 	 	$8,632	 	 	 	$9,855	 	
Benefit from income taxes	 	 	($2,655	)	 	 	($2,332	)	 	 	($3,179	)	 	 	($4,357	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	$4,003	 	 	 	$2,645	 	 	 	$5,453	 	 	 	$5,498	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Amortization of Pension and Postretirement
Plan Actuarial Loss and Prior Service Cost	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of goods sold	 	 	$2,454	 	 	 	$1,273	 	 	 	$4,697	 	 	 	$2,376	 	
Selling, administrative and general expense	 	 	761	 	 	 	422	 	 	 	1,545	 	 	 	810	 	
Benefit from income taxes	 	 	(1,274	)	 	 	(872	)	 	 	(2,084	)	 	 	(1,464	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	$1,941	 	 	 	$823	 	 	 	$4,158	 	 	 	$1,722	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total reclassifications from OCI to net loss	 	 	$5,944	 	 	 	$3,468	 	 	 	$9,611	 	 	 	$7,220	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
NOTE 9: SHAREHOLDERS’ EQUITY
In March 2010, 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. This transaction increased shareholders’ equity by $53,864,000 (common stock $1,190,000 and capital in excess of par $52,674,000).
In February 2011, we issued 372,992 shares (368,527 shares net of acquired cash) of common stock in connection with a business acquisition as described in Note 14.
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 our common stock. 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:

§	 	six months ended June 30, 2011 — issued 110,881 shares for cash proceeds of $4,745,000; and	
 		
§	 	six months ended June 30, 2010 — issued 768,735 shares for cash proceeds of $35,314,000 and a receivable of $1,453,000.	
No shares were held in treasury as of June 30, 2011, December 31, 2010 and June 30, 2010. As of June 30, 2011, 3,411,416 shares may be repurchased under the current authorization of our Board of Directors.
13 

Table of Contents

NOTE 10: BENEFIT PLANS
The following tables set forth the components of net periodic benefit cost:

PENSION BENEFITS	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30	 	 	June 30	 	
in thousands	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
Components of Net Periodic Benefit Cost	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Service cost	 	 	$5,191	 	 	 	$4,800	 	 	 	$10,381	 	 	 	$9,608	 	
Interest cost	 	 	10,650	 	 	 	10,406	 	 	 	21,192	 	 	 	20,811	 	
Expected return on plan assets	 	 	(12,370	)	 	 	(12,526	)	 	 	(24,740	)	 	 	(25,061	)	
Amortization of prior service cost	 	 	85	 	 	 	115	 	 	 	170	 	 	 	230	 	
Amortization of actuarial loss	 	 	3,011	 	 	 	1,540	 	 	 	5,835	 	 	 	2,876	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net periodic pension benefit cost	 	 	$6,567	 	 	 	$4,335	 	 	 	$12,838	 	 	 	$8,464	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Pretax reclassification from OCI included in net periodic pension benefit cost	 	 	$3,096	 	 	 	$1,655	 	 	 	$6,005	 	 	 	$3,106	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	
OTHER POSTRETIREMENT BENEFITS	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30	 	 	June 30	 	
in thousands	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
Components of Net Periodic Benefit Cost	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Service cost	 	 	$1,198	 	 	 	$1,067	 	 	 	$2,395	 	 	 	$2,133	 	
Interest cost	 	 	1,612	 	 	 	1,662	 	 	 	3,225	 	 	 	3,325	 	
Amortization of prior service credit	 	 	(168	)	 	 	(182	)	 	 	(337	)	 	 	(364	)	
Amortization of actuarial loss	 	 	287	 	 	 	222	 	 	 	574	 	 	 	444	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net periodic postretirement benefit cost	 	 	$2,929	 	 	 	$2,769	 	 	 	$5,857	 	 	 	$5,538	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Pretax reclassification from OCI included in net periodic postretirement benefit cost	 	 	$119	 	 	 	$40	 	 	 	$237	 	 	 	$80	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
The reclassifications from OCI noted in the tables above are related to amortization of prior service costs or credits and actuarial losses as shown in Note 8.
In March 2010, we contributed $72,500,000 ($18,636,000 in cash and $53,864,000 in stock — 1,190,000 shares valued at $45.26 per share) and an additional $1,300,000 in July 2010 to our qualified pension plans for the 2009 plan year. These contributions, along with the existing funding credits, should be sufficient to cover expected required contributions to the qualified plans through 2012.
As of December 31, 2008, our Master Pension Trust had assets invested at Westridge Capital Management, Inc. (WCM) with a reported fair value of $59,245,000. In February 2009, the New York District Court appointed a receiver over WCM due to allegations of fraud and other violations of federal commodities and securities laws by principals of a WCM affiliate. In light of these allegations, we reassessed the fair value of our investments at WCM and recorded a $48,018,000 write-down in the estimated fair value of these assets for the year ended December 31, 2008.
During 2010, the Master Pension Trust received $6,555,000 from the receiver over WCM as a partial distribution of assets, and received a $15,000,000 insurance settlement related to our WCM loss. In April 2011, the court-appointed receiver released an additional $22,041,000 to our Master Pension Trust.
14 

Table of Contents

NOTE 11: CREDIT FACILITIES, SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings are summarized as follows:

 	 	June 30	 	 	December 31	 	 	June 30	 	
dollars in thousands	 	2011	 	 	2010	 	 	2010	 	
Short-term Borrowings	 	 	 	 	 	 	 	 	 	 	 	 	
Bank borrowings	 	 	$100,000	 	 	 	$285,500	 	 	 	$0	 	
Commercial paper	 	 	0	 	 	 	0	 	 	 	320,000	 	
 	 	 	 	 	 	 	 	 	 	
Total	 	 	$100,000	 	 	 	$285,500	 	 	 	$320,000	 	
 	 	 	 	 	 	 	 	 	 	
Bank Borrowings	 	 	 	 	 	 	 	 	 	 	 	 	
Maturity	 	15 days	 	 	3 - 74 days	 	 	 	n/a	 	
Weighted-average interest rate	 	 	0.53 %	 	 	 	0.59 %	 	 	 	n/a	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Commercial Paper	 	 	 	 	 	 	 	 	 	 	 	 	
Maturity	 	 	n/a	 	 	 	n/a	 	 	1 - 2 days	 	
Weighted-average interest rate	 	 	n/a	 	 	 	n/a	 	 	 	0.70%	 	
 	 	 	 	 	 	 	 	 	 	
We utilize our bank lines of credit to fund our working capital and for general corporate purposes. Bank lines of credit totaling $1,500,000,000 were maintained at June 30, 2011, all of which expire November 16, 2012. Interest rates referable to borrowings under these lines of credit are determined at the time of borrowing based on current market conditions. Bank loans totaled $100,000,000 as of June 30, 2011 and were borrowed for 15 days at 0.53%.
All lines of credit extended to us in 2011 and 2010 required no compensating balances. In the normal course of business, we maintain balances in our bank accounts for which we are credited with earnings allowances toward our cash management related service fees. To the extent the earnings allowances are not sufficient to fully cover the related fees for these non-credit services, we pay the difference.
In June 2011, we issued $1,100,000,000 of long-term notes in two series, as follows: $500,000,000 of 6.50% notes due in 2016 and $600,000,000 of 7.50% notes due in 2021. These notes were issued principally to:

§	 	repay and terminate our $450,000,000 5-year floating-rate term loan,	
 		
§	 	fund the purchase of $165,443,000 of our outstanding 5.60% 5-year notes issued in 2007 and $109,556,000 of our outstanding 6.30% 5-year notes issued in 2008 through a tender offer,	
 		
§	 	repay $275,000,000 outstanding under our revolving credit facility,	
 		
§	 	and for general corporate purposes.	
The aforementioned $450,000,000 5-year term loan was established in July 2010 in order to repay the $100,000,000 outstanding balance of our 3-year syndicated term loan issued in 2008 and all outstanding commercial paper. Unamortized deferred financing costs of $2,423,000 were recognized in June 2011 as a component of interest expense upon the termination of the term loan.
The 5.60% and 6.30% 5-year notes were purchased for total consideration of $294,533,000, representing a $19,534,000 premium above the $274,999,000 face value of the notes. This premium primarily reflects the trading price of the notes at the time of purchase relative to par value. Additionally, $4,711,000 of expense associated with a proportional amount of unamortized discounts, deferred financing costs and amounts accumulated in OCI was recognized in June 2011 upon the partial termination of the notes. The combined expense of $24,245,000 is presented in the accompanying Condensed Consolidated Statements of Comprehensive Income as a component of interest expense for the three and six month periods ended June 30, 2011.
As of June 30, 2011, $40,000 of our long-term debt, including current maturities, was secured. This secured debt was assumed with the November 2007 acquisition of Florida Rock. All other debt obligations, both short-term and long-term, are unsecured.
15 

Table of Contents

Long-term debt is summarized as follows:

 	 	June 30	 	 	December 31	 	 	June 30	 	
in thousands	 	2011	 	 	2010	 	 	2010	 	
 	 	 	 	 	 	 	 	 	 	
Long-term Debt	 	 	 	 	 	 	 	 	 	 	 	 	
6.50% 5.5-year notes issued 2011 1	 	   	$500,000	 	 	 	$0	 	 	 	$0	 	
7.50% 10-year notes issued 2011 2	 	 	600,000	 	 	 	0	 	 	 	0	 	
5-year floating-rate term loan issued 2010	 	 	0	 	 	 	450,000	 	 	 	0	 	
10.125% 7-year notes issued 2009 3	 	 	149,628	 	 	 	149,597	 	 	 	149,567	 	
10.375% 10-year notes issued 2009 4	 	 	248,457	 	 	 	248,391	 	 	 	248,329	 	
3-year floating-rate term loan issued 2008	 	 	0	 	 	 	0	 	 	 	100,000	 	
6.30% 5-year notes issued 2008 5	 	 	140,322	 	 	 	249,729	 	 	 	249,680	 	
7.00% 10-year notes issued 2008 6	 	 	399,675	 	 	 	399,658	 	 	 	399,641	 	
3-year floating-rate notes issued 2007	 	 	0	 	 	 	0	 	 	 	325,000	 	
5.60% 5-year notes issued 2007 7	 	 	134,483	 	 	 	299,773	 	 	 	299,719	 	
6.40% 10-year notes issued 2007 8	 	 	349,861	 	 	 	349,852	 	 	 	349,844	 	
7.15% 30-year notes issued 2007 9	 	 	239,717	 	 	 	249,324	 	 	 	249,321	 	
Private placement notes	 	 	0	 	 	 	0	 	 	 	15,181	 	
Medium-term notes	 	 	21,000	 	 	 	21,000	 	 	 	21,000	 	
Industrial revenue bonds	 	 	14,000	 	 	 	14,000	 	 	 	17,550	 	
Other notes	 	 	1,349	 	 	 	1,438	 	 	 	1,648	 	
Fair value adjustments 10	 	 	(7,419	)	 	 	0	 	 	 	0	 	
 	 	 	 	 	 	 	 	 	 	
Total debt excluding short-term borrowings	 	 	$2,791,073	 	 	 	$2,432,762	 	 	 	$2,426,480	 	
 	 	 	 	 	 	 	 	 	 	
Less current maturities of long-term debt	 	 	5,230	 	 	 	5,246	 	 	 	425,300	 	
 	 	 	 	 	 	 	 	 	 	
Total long-term debt	 	 	$2,785,843	 	 	 	$2,427,516	 	 	 	$2,001,180	 	

Estimated fair value of total long-term debt	 	 	$2,857,684	 	 	 	$2,559,059	 	 	 	$2,240,447	 	

1	 	The effective interest rate for these notes is 6.85% , excluding the impact of the interest rate swap described in Note 6.	
 		
2	 	The effective interest rate for these notes is 7.73% .	
 		
3	 	Includes decreases for unamortized discounts, as follows: June 30, 2011 — $372 thousand, December 31, 2010 — $403 thousand and June 30, 2010 — $433 thousand. The effective interest rate for these notes is 10.31% , excluding the impact of the interest rate swap described in Note 6.	
 		
4	 	Includes decreases for unamortized discounts, as follows: June 30, 2011 — $1,543 thousand, December 31, 2010 — $1,609 thousand and June 30, 2010 — $1,671 thousand. The effective interest rate for these notes is 10.58%.	
 		
5	 	Includes decreases for unamortized discounts, as follows: June 30, 2011 — $122 thousand, December 31, 2010 — $271 thousand and June 30, 2010 — $320 thousand. The effective interest rate for these notes is 7.46%.	
 		
6	 	Includes decreases for unamortized discounts, as follows: June 30, 2011 — $325 thousand, December 31, 2010 — $342 thousand and June 30, 2010 — $359 thousand. The effective interest rate for these notes is 7.86%.	
 		
7	 	Includes decreases for unamortized discounts, as follows: June 30, 2011 — $74 thousand, December 31, 2010 — $227 thousand and June 30, 2010 — $281 thousand. The effective interest rate for these notes is 6.55%.	
 		
8	 	Includes decreases for unamortized discounts, as follows: June 30, 2011 — $139 thousand, December 31, 2010 — $148 thousand and June 30, 2010 — $156 thousand. The effective interest rate for these notes is 7.39%.	
 		
9	 	Includes decreases for unamortized discounts, as follows: June 30, 2011 — $646 thousand, December 31, 2010 — $676 thousand and June 30, 2010 — $679 thousand. The effective interest rate for these notes is 8.04%.	
 		
10	 	See Note 6 for additional information about our fair value hedging strategy.	
The estimated fair value of total long-term debt presented in the table above was determined by discounting expected future cash flows based on credit-adjusted interest rates on U.S. Treasury bills, notes or bonds, as appropriate. The fair value estimates were based on information available to us as of the respective balance sheet dates. Although we are not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued since those dates.
Our bank credit facility and the indentures governing our notes contain a covenant limiting our total debt as a percentage of total capital to 65%. Our total debt as a percentage of total capital was 42.7% as of June 30, 2011; 40.7% as of December 31, 2010; and 40.5% as of June 30, 2010.
16 

Table of Contents

NOTE 12: ASSET RETIREMENT OBLIGATIONS
Asset retirement obligations (AROs) 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 ARO 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 ARO is settled for other than the carrying amount of the liability, we recognize a gain or loss on settlement.
We record all AROs for which we have legal obligations for land reclamation at estimated fair value. Essentially all these AROs relate to our underlying land parcels, including both owned properties and mineral leases. For the three and six month periods ended June 30, we recognized ARO operating costs related to accretion of the liabilities and depreciation of the assets as follows:

 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30	 	 	June 30	 	
in thousands	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
ARO Operating Costs	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accretion	 	 	$2,124	 	 	 	$2,255	 	 	 	$4,296	 	 	 	$4,444	 	
Depreciation	 	 	1,853	 	 	 	3,157	 	 	 	3,395	 	 	 	6,340	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	$3,977	 	 	 	$5,412	 	 	 	$7,691	 	 	 	$10,784	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
ARO operating costs for our continuing operations are reported in cost of goods sold. AROs are reported within other noncurrent liabilities in our accompanying Condensed Consolidated Balance Sheets.
Reconciliations of the carrying amounts of our AROs are as follows:

 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30	 	 	June 30	 	
in thousands	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Asset Retirement Obligations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at beginning of period	 	 	$162,591	 	 	 	$163,931	 	 	 	$162,730	 	 	 	$167,757	 	
Liabilities incurred	 	 	278	 	 	 	1,441	 	 	 	278	 	 	 	1,441	 	
Liabilities settled	 	 	(3,632	)	 	 	(1,740	)	 	 	(5,964	)	 	 	(4,117	)	
Accretion expense	 	 	2,124	 	 	 	2,255	 	 	 	4,296	 	 	 	4,444	 	
Revisions up (down)	 	 	(628	)	 	 	(3,719	)	 	 	(607	)	 	 	(7,357	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at end of period	 	 	$160,733	 	 	 	$162,168	 	 	 	$160,733	 	 	 	$162,168	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Revisions to our AROs during 2010 related primarily to extensions in the estimated settlement dates at numerous sites.
17 

Table of Contents

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 such letters of credit to back our obligations to pay or perform when required to do so according 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.
Our standby letters of credit as of June 30, 2011 are summarized in the table below:

 	 	June 30	 	
in thousands	 	2011	 	
 	 	 	 	
Standby Letters of Credit	 	 	 	 	
Risk management requirement for insurance claims	 	 	$41,083	 	
Payment surety required by utilities	 	 	133	 	
Contractual reclamation/restoration requirements	 	 	8,468	 	
Financial requirement for industrial revenue bond	 	 	14,230	 	
 	 	 	 	
Total	 	 	$63,914	 	
 	 	 	 	
Since banks consider standby 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 automatically renewed unless cancelled with the approval of the beneficiary. Of the total $63,914,000 outstanding standby letters of credit as of June 30, 2011, $60,882,000 is backed by our $1,500,000,000 bank credit facility which expires November 16, 2012.
NOTE 14: ACQUISITIONS AND DIVESTITURES
During the first quarter of 2011, we acquired ten ready-mixed concrete facilities located in Georgia for 432,407 shares of common stock valued at the closing date price of $42.85 per share (total consideration of $18,529,000 net of acquired cash). We issued 368,527 shares to the seller at closing and retained 63,880 shares to fulfill certain working capital adjustments and indemnification obligations.
As a result of this acquisition, we recognized $6,246,000 of amortizable intangible assets, none of which is expected to be deductible for income tax purposes. The amortizable intangible assets consist of contractual rights in place and will be amortized over an estimated weighted-average period of 20 years. The purchase price allocation for this 2011 acquisition is preliminary and subject to adjustment.
We no longer anticipate the sale of an aggregates production facility and a ready-mixed concrete operation located outside the United States within the next twelve months. Thus, these assets no longer meet the criteria for classification as held for sale. The property, plant & equipment was measured at the lower of fair value or carrying amount adjusted to recapture suspended depreciation. This remeasurement had an immaterial earnings impact. This facility was presented in the accompanying Condensed Consolidated Balance Sheets as of December 31, 2010 and June 30, 2010 as assets held for sale and liabilities of assets held for sale. The major classes of assets and liabilities of assets classified as held for sale were as follows:

 	 	December 31	 	 	June 30	 	
in thousands	 	2010	 	 	2010	 	
 	 	 	 	 	 	 	
Held for Sale	 	 	 	 	 	 	 	 	
Current assets	 	 	$3,460	 	 	 	$3,695	 	
Property, plant & equipment, net	 	 	9,625	 	 	 	11,016	 	
Other assets	 	 	122	 	 	 	153	 	
 	 	 	 	 	 	 	
Total assets held for sale	 	 	$13,207	 	 	 	$14,864	 	

Current liabilities	 	 	$116	 	 	 	$409	 	
 	 	 	 	 	 	 	
Total liabilities of assets held for sale	 	 	$116	 	 	 	$409	 	
 	 	 	 	 	 	 	
During the first quarter of 2010, we sold three aggregates facilities located in rural Virginia for approximately $42,750,000 (total cash consideration).
18 

Table of Contents

NOTE 15: GOODWILL
Changes in the carrying amount of goodwill by reportable segment from December 31, 2010 to June 30, 2011 are summarized below: 

																					
GOODWILL	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
in thousands	 	Aggregates	 	 	Concrete	 	 	Asphalt mix	 	 	Cement	 	 	Total	 	

Gross Carrying Amount	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total as of December 31, 2010	 	 	$3,005,383	 	 	 	$0	 	 	 	$91,633	 	 	 	$252,664	 	 	 	$3,349,680	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Goodwill of acquired businesses	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total as of June 30, 2011	 	 	$3,005,383	 	 	 	$0	 	 	 	$91,633	 	 	 	$252,664	 	 	 	$3,349,680	 	

Accumulated Impairment Losses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total as of December 31, 2010	 	 	$0	 	 	 	$0	 	 	 	$0	 	 	 	($252,664	)	 	 	($252,664	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Goodwill impairment loss	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total as of June 30, 2011	 	 	$0	 	 	 	$0	 	 	 	$0	 	 	 	($252,664	)	 	 	($252,664	)	

Goodwill, net of Accumulated
Impairment Losses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total as of December 31, 2010	 	 	$3,005,383	 	 	 	$0	 	 	 	$91,633	 	 	 	$0	 	 	 	$3,097,016	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total as of June 30, 2011	 	 	$3,005,383	 	 	 	$0	 	 	 	$91,633	 	 	 	$0	 	 	 	$3,097,016	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NOTE 16: NEW ACCOUNTING STANDARDS
ACCOUNTING STANDARDS RECENTLY ADOPTED
ENHANCED DISCLOSURES FOR FAIR VALUE MEASUREMENTS As of and for the interim period ended March 31, 2011, we adopted Accounting Standards Update (ASU) No. 2010-6, “Improving Disclosures about Fair Value Measurements” as it relates to separate disclosures about purchases, sales, issuances and settlements applicable to Level 3 measurements. Our adoption of this standard had no impact on our financial position, results of operations or liquidity.
PRESENTATION OF OTHER COMPREHENSIVE INCOME As of and for the interim period ended June 30, 2011 we early adopted ASU No. 2011-05, “Presentation of Comprehensive Income.” This standard eliminates the option to present components of other comprehensive income (OCI) as part of the statement of shareholders’ equity. The amendments in this standard require that all nonowner changes in shareholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Our Condensed Consolidated Statements of Comprehensive Income conform to the presentation requirements of this standard.
ACCOUNTING STANDARD RECENTLY ISSUED
AMENDMENTS TO FAIR VALUE MEASUREMENT REQUIREMENTS In May 2011, the Financial Accounting Standards Board (FASB) issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. The amendments in the ASU achieve the objectives of developing common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards (IFRSs) and improving their understandability. Some of the requirements clarify the FASB’s intent about the application of existing fair value measurement requirements while other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this ASU are effective prospectively for interim and annual periods beginning after December 15, 2011, with no early adoption permitted. We will adopt this standard as of and for the interim period ended March 31, 2012. We do not expect the adoption of this standard to have a material impact on our condensed consolidated financial statements.
19 

Table of Contents

NOTE 17: SEGMENT REPORTING
We have four operating segments organized around our principal product lines: aggregates, concrete, asphalt mix and cement. The vast majority of our activities are domestic. We sell a relatively small amount of products 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.
SEGMENT FINANCIAL DISCLOSURE

																	
 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30	 	 	June 30	 	
 	 	 	 	 	 	
in millions	 	2011	 	 	2010	 	 	2011	 	 	2010	 	

Total Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Aggregates 1	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Segment revenues	 	 	$478.4	 	 	 	$513.9	 	 	 	$810.1	 	 	 	$855.2	 	
Intersegment sales	 	 	(39.5	)	 	 	(42.4	)	 	 	(69.3	)	 	 	(74.5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	 	438.9	 	 	 	471.5	 	 	 	740.8	 	 	 	780.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Concrete 2	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Segment revenues	 	 	98.2	 	 	 	105.0	 	 	 	180.4	 	 	 	188.0	 	
Intersegment sales	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	 	98.2	 	 	 	105.0	 	 	 	180.4	 	 	 	188.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Asphalt mix	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Segment revenues	 	 	110.9	 	 	 	103.5	 	 	 	175.5	 	 	 	166.5	 	
Intersegment sales	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	 	110.9	 	 	 	103.5	 	 	 	175.5	 	 	 	166.5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Cement 3	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Segment revenues	 	 	16.8	 	 	 	22.9	 	 	 	33.4	 	 	 	40.8	 	
Intersegment sales	 	 	(7.3	)	 	 	(10.1	)	 	 	(16.3	)	 	 	(18.7	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	 	9.5	 	 	 	12.8	 	 	 	17.1	 	 	 	22.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	 	657.5	 	 	 	692.8	 	 	 	1,113.8	 	 	 	1,157.3	 	
Delivery revenues	 	 	44.5	 	 	 	43.4	 	 	 	75.4	 	 	 	72.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues	 	 	$702.0	 	 	 	$736.2	 	 	 	$1,189.2	 	 	 	$1,229.4	 	

Gross Profit	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Aggregates	 	 	$102.8	 	 	 	$122.0	 	 	 	$113.6	 	 	 	$137.4	 	
Concrete	 	 	(9.0	)	 	 	(5.6	)	 	 	(23.4	)	 	 	(21.7	)	
Asphalt mix	 	 	8.3	 	 	 	7.3	 	 	 	8.1	 	 	 	8.3	 	
Cement	 	 	(1.3	)	 	 	(1.4	)	 	 	(4.6	)	 	 	(0.8	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	$100.8	 	 	 	$122.3	 	 	 	$93.7	 	 	 	$123.2	 	

Depreciation, Depletion,
Accretion and Amortization	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Aggregates	 	 	$71.1	 	 	 	$74.9	 	 	 	$141.2	 	 	 	$148.1	 	
Concrete	 	 	13.2	 	 	 	13.4	 	 	 	26.2	 	 	 	26.4	 	
Asphalt mix	 	 	2.0	 	 	 	2.3	 	 	 	3.9	 	 	 	4.5	 	
Cement	 	 	4.7	 	 	 	5.2	 	 	 	9.1	 	 	 	9.6	 	
Corporate and other unallocated	 	 	1.1	 	 	 	1.5	 	 	 	2.3	 	 	 	2.9	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	$92.1	 	 	 	$97.3	 	 	 	$182.7	 	 	 	$191.5	 	

1	 	Includes crushed stone, sand and gravel, sand, other aggregates, as well as transportation and service revenues associated with the aggregates business.	
 		
2	 	Includes ready-mixed concrete, concrete block, precast concrete, as well as building materials purchased for resale.	
 		
3	 	Includes cement and calcium products.	
20 

Table of Contents

NOTE 18: SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental information referable to our Condensed Consolidated Statements of Cash Flows is summarized below:

									
 	 	Six Months Ended	 	
 	 	June 30	 	
 	 	 	
in thousands	 	2011	 	 	2010	 	
 	 	 	 	 	 	 	
Cash Payments (Refunds)	 	 	 	 	 	 	 	 	
Interest (exclusive of amount capitalized)	 	   	$102,984	 	 	 	$90,942	 	
Income taxes	 	 	(33,070	)	 	 	1,130	 	
 	 	 	 	 	 	 	
Noncash Investing and Financing Activities	 	 	 	 	 	 	 	 	
Accrued liabilities for purchases of property, plant & equipment	 	 	6,414	 	 	 	5,165	 	
Stock issued for pension contribution (Note 9)	 	 	0	 	 	 	53,864	 	
Proceeds receivable from issuance of common stock	 	 	0	 	 	 	1,453	 	
Amounts referable to business acquisition (Note 14)	 	 	 	 	 	 	 	 	
Liabilities assumed	 	 	13,774	 	 	 	0	 	
Fair value of equity consideration	 	 	18,529	 	 	 	0	 	
 	 	 	 	 	 	 	
NOTE 19: 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 material legal proceedings are more specifically described below.
PERCHLOROETHYLENE CASES
We are a defendant in 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 one of a number of defendants in each of these cases and is vigorously defending all of them. 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:

§	 	CALIFORNIA WATER SERVICE COMPANY — On June 6, 2008, we were served in an 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. Trial is scheduled for September 2012.	
 		
§	 	SUFFOLK COUNTY WATER AUTHORITY — On July 29, 2010, we were served in an action styled Suffolk County Water Authority v. The Dow Chemical Company, et al. , in the Supreme Court for Suffolk County, State of New York. The complaint alleges that the plaintiff “owns and/or operates drinking water systems and supplies drinking water to thousands of residents and businesses, in Suffolk County, New York.” The complaint alleges that perc and its breakdown products “have been and are contaminating and damaging Plaintiff’s drinking water supply wells.” The plaintiff is seeking compensatory and punitive damages. Discovery is ongoing.	
21 

Table of Contents

§	 	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. The perc manufacturing defendants, including Vulcan, have filed a motion for summary judgment. The Court has yet to rule on the motion but in the interim has stayed the litigation. As such, there has been no activity on this matter pending the Court’s ruling.	
 		
§	 	WEST VIRGINIA COAL SINK LAB LITIGATION — This is a mass tort action consisting of over 100 cases filed in 17 different counties in West Virginia from September 1 to October 13, 2010, for medical monitoring and personal injury damages for exposure to perc used in coal sink labs. The West Virginia Supreme Court of Appeals, in an order entered January 19, 2011, transferred all of these cases (referred to as Jeffrey Blount v. Arkema, Inc., et al. ) to the West Virginia Mass Litigation Panel. Discovery is ongoing. Trial is scheduled for September 2012.	
 		
§	 	SANTARSIERO — This is a case styled Robert Santarsiero v. R.V. Davies, et al. , pending in Supreme Court, New York County, New York. We were brought in as a third-party defendant by original defendant R.V. Davies. We have learned that the plaintiff, who was alleging perc exposure, is now deceased. The case has been stayed pending further information about this development.	
 		
§	 	R.R. STREET INDEMNITY — Street, a former distributor of perc manufactured by us, alleges that we owe Street , and its insurer (National Union), a defense and indemnity in several of these litigation matters, as well as some prior litigation which we have now settled. National Union alleges that we are obligated to contribute to National Union’s share of defense fees, costs and any indemnity payments made on Street’s behalf. We have had discussions with Street about the nature and extent of indemnity obligations, if any, and to date there has been no resolution of these issues.	
FLORIDA ANTITRUST LITIGATION — Our subsidiary, Florida Rock Industries, Inc., has been named as a defendant in a number of class action lawsuits filed in the United States District Court for the Southern District of Florida. The lawsuits were filed by several ready-mixed concrete producers and construction companies against a number of concrete and cement producers and importers in Florida. There are now two consolidated amended complaints: (1) on behalf of direct independent ready-mixed concrete producers, and (2) on behalf of indirect users of ready-mixed concrete. The other defendants include Cemex Inc., Tarmac America LLC, and VCNA Prestige Ready-Mix Florida, Inc. The complaints allege various violations under the federal antitrust laws, including price fixing and market allocations. We have no reason to believe that Florida Rock is liable for any of the matters alleged in the complaint, and we are defending the case vigorously. Discovery in ongoing. Trial is scheduled for July 2012.
IDOT/JOLIET ROAD — In September 2001, we were named a defendant in a suit brought by the Illinois Department of Transportation (IDOT), in the Circuit Court of Cook County, Chancery Division, Illinois, alleging damage to a 0.9-mile section of Joliet Road that bisects our McCook quarry in McCook, Illinois, a Chicago suburb. On May 18, 2010, we settled this lawsuit for $40,000,000 and recognized the full settlement as a charge to operations in the second quarter of 2010. Under the terms of the settlement we paid IDOT $20,000,000 in May 2010 and we paid the second installment of $20,000,000 on February 17, 2011. We are taking appropriate actions, including participating in two arbitrations in 2011, to recover the settlement amount in excess of the self-insured retention of $2,000,000, as well as a portion of our defense costs from our insurers. In February 2011, we completed the first arbitration with two of our three insurers. The arbitration panel awarded us a total of $25,546,000 in payment of their share of the settlement amount and attorneys’ fees. This award was recorded as income in the first quarter of 2011. The second arbitration was held in May 2011.
LOWER PASSAIC RIVER CLEAN-UP — We have been sued as a third-party defendant in New Jersey Department of Environmental Protection, et al. v. Occidental Chemical Corporation, et al. , a case brought by the New Jersey Department of Environmental Protection in the New Jersey Superior Court. The third-party complaint was filed on February 4, 2009. This suit by the New Jersey Department of Environmental Protection seeks recovery of past and future clean-up costs, as well as unspecified economic damages, punitive damages, penalties and a variety of other forms of relief arising from alleged discharges into the Passaic River of dioxin and other unspecified hazardous substances. Our former Chemicals Division operated a plant adjacent to the Passaic River and has been sued, along with approximately 300 other third-party defendants. Additionally, Vulcan and approximately 70 other companies are parties to a May 2007 Administrative Order of Consent with the U.S. Environmental Protection Agency to perform a Remedial Investigation/Feasibility Study of the contamination in the lower 17 miles of the Passaic River. This study is ongoing. At this time, we cannot determine the likelihood or reasonably estimate a range of loss pertaining to this matter. A liability trial is scheduled for April 2013. A separate damages trial, if required, is scheduled for January 2014.
22 

Table of Contents

It is not possible to predict with certainty the ultimate outcome of these and other legal proceedings in which we are involved and a number of factors, including developments in ongoing discovery or adverse rulings, could cause actual losses to differ materially from accrued costs. No liability was recorded for claims and litigation for which a loss was determined to be only reasonably possible or for which a loss could not be reasonably estimated. In addition, losses on certain claims and litigation described above may be subject to limitations on a per occurrence basis by excess insurance, as described in our most recent Annual Report on Form 10-K.
23 

Table of Contents

ITEM 2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL COMMENTS
OVERVIEW
Vulcan provides the basic materials for the infrastructure needed to expand the U.S. economy. We are the nation’s largest producer of construction aggregates, primarily crushed stone, sand and gravel. We also are a major producer of asphalt mix and ready-mixed concrete as well as a leading producer of cement in Florida.
Demand for our products is dependent on construction activity. The primary end uses include public construction, such as highways, bridges, airports, schools and prisons, as well as private nonresidential (e.g., manufacturing, retail, offices, industrial and institutional) and private residential construction (e.g., single-family houses, duplexes, apartment buildings and condominiums). Customers for our products include heavy construction and paving contractors; commercial building contractors; concrete products manufacturers; residential building contractors; state, county and municipal governments; railroads and electric utilities.
We operate primarily in the United States and our principal product — aggregates — is used in virtually all types of public and private construction projects and in the production of asphalt mix and ready-mixed concrete. Aggregates have a high weight-to-value ratio and, in most cases, must be produced near where they are used; if not, transportation can cost more than the materials. Exceptions to this typical market structure include areas along the U.S. Gulf Coast and the Eastern Seaboard where there are limited supplies of locally available high quality aggregates. We serve these markets from inland quarries — shipping by barge and rail — and from our quarry on Mexico’s Yucatan Peninsula. We transport aggregates from Mexico to the U.S. principally on our three Panamax-class, self-unloading ships.
There are practically no substitutes for quality aggregates. Because of barriers to entry created by zoning and permitting regulation and because of high transportation costs relative to the value of the product, the location of reserves is a critical factor to long-term success.
While aggregates is our primary business, we believe vertical integration between aggregates and downstream products, such as asphalt mix and concrete, can be managed effectively in certain markets to generate acceptable financial returns. We produce and sell asphalt mix and ready-mixed concrete primarily in our mid-Atlantic, Georgia, Florida, southwestern and western markets. Aggregates comprise approximately 95% of asphalt mix by weight and 78% of ready-mixed concrete by weight. In all of these downstream businesses, we supply virtually all of the required aggregates from our own operations.
SEASONALITY AND CYCLICAL NATURE OF OUR BUSINESS
Almost all our products are produced and consumed outdoors. Seasonal changes and other weather-related conditions can affect the production and sales volumes of our products. Therefore, the financial results for any quarter do not necessarily indicate the results expected for the year. Normally, the highest sales and earnings are in the third quarter and the lowest are in the first quarter. Furthermore, our sales and earnings are sensitive to national, regional and local economic conditions and particularly to cyclical swings in construction spending, primarily in the private sector. The levels of construction spending are affected by changing interest rates and demographic and population fluctuations.
24 

Table of Contents

EXECUTIVE SUMMARY
FINANCIAL HIGHLIGHTS FOR SECOND QUARTER 2011

§	 	The average unit sales price increased in all major product lines	

 	§	 	Freight-adjusted aggregates prices increased 2.5%, reflecting increased pricing across many markets	
 		
 	§	 	Asphalt mix prices increased 8%, leading to improved unit materials margin despite higher liquid asphalt costs	
 		
 	§	 	Ready-mixed concrete prices increased 8% with resultant improvement in unit materials margin	
 		
 	§	 	Cement prices increased 2%	

§	 	Aggregates shipments declined 9%, reflecting the impact of severe storms in April across many of our markets. Markets in California, Virginia and Maryland realized increased shipments due primarily to strength in infrastructure projects	
 		
§	 	Unit costs for diesel fuel and liquid asphalt increased 43% and 17%, respectively, reducing pretax earnings by $19.2 million	
 		
§	 	Selling, administrative and general (SAG) expenses were $7.5 million lower than the prior year	
 		
§	 	Earnings from continuing operations were a loss of ($7.1) million, or ($0.05) per diluted share, compared to a loss of ($22.5) million, or ($0.18) per diluted share in the prior year	

 	§	 	The current year’s loss includes a $0.12 per diluted share charge related to our tender offer and debt retirement in June	
 		
 	§	 	The prior year’s loss includes a $0.21 per diluted share charge due to the settlement of a lawsuit in Illinois	
 		
 	§	 	Excluding these specific charges, earnings from continuing operations were $9.4 million, or $0.07 per diluted share, compared to $5.0 million, or $0.03 per diluted share in the prior year	
Business conditions remained challenging in the second quarter due to weaker than expected demand, as well as to April’s severe weather, flooding throughout the quarter in our river markets and a significant increase in diesel fuel costs. However, we are encouraged by the improved pricing reported in the second quarter in each of our segments. Cost control remains a priority — whether it’s lowering plant costs or reducing SAG expenses. In the second quarter, SAG costs decreased 9% from the prior year and our aggregates operations continued to enhance production efficiency.
25 

Table of Contents

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Generally Accepted Accounting Principles (GAAP) does not define “free cash flow” and “Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA).” Thus, they should not be considered as an alternative to net cash provided by operating activities or any other liquidity or earnings measure defined by GAAP. We present these metrics for the convenience of investment professionals who use such metrics in their analysis, and for shareholders who need to understand the metrics we use to assess performance and to monitor our cash and liquidity positions. The investment community often uses these metrics as indicators of a company’s ability to incur and service debt. We use free cash flow, EBITDA and other such measures to assess the operating performance of our various business units and the consolidated company. We do not use these metrics as a measure to allocate resources. Reconciliations of these metrics to their nearest GAAP measures are presented below:
FREE CASH FLOW
Free cash flow deducts purchases of property, plant & equipment from net cash provided by operating activities.

 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30	 	 	June 30	 	
in millions	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	
Net cash (used for) provided by operating activities	 	   	($37.0	)	 	 	$12.3	 	 	   	$7.0	 	 	 	$18.7	 	
Purchases of property, plant & equipment	 	 	(27.3	)	 	 	(22.5	)	 	 	(51.5	)	 	 	(42.2	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Free cash flow	 	 	($64.3	)	 	 	($10.2	)	 	 	($44.5	)	 	 	($23.5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA
EBITDA is an acronym for Earnings Before Interest, Taxes, Depreciation and Amortization.

 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30	 	 	June 30	 	
in millions	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	
Net cash (used for) provided by operating activities	 	   	($37.0	)	 	 	$12.3	 	 	   	$7.0	 	 	 	$18.7	 	
Changes in operating assets and liabilities
before initial effects of business acquisitions
and dispositions	 	 	106.0	 	 	 	43.9	 	 	 	37.6	 	 	 	(2.6	)	
Other net operating items using cash	 	 	15.0	 	 	 	17.1	 	 	 	75.3	 	 	 	112.7	 	
(Earnings) loss on discontinued operations,
net of taxes	 	 	1.0	 	 	 	1.5	 	 	 	(8.9	)	 	 	(4.3	)	
Benefit from income taxes	 	 	(40.3	)	 	 	(21.2	)	 	 	(77.8	)	 	 	(55.4	)	
Interest expense, net	 	 	70.9	 	 	 	43.7	 	 	 	113.2	 	 	 	87.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA	 	 	$115.6	 	 	 	$97.3	 	 	 	$146.4	 	 	 	$156.1	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	 	Three Months Ended	 	
 	 	June 30	 	 	June 30	 	
in millions	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	
Net loss	 	   	($8.1	)	 	 	($24.0	)	 	   	($62.9	)	 	 	($62.7	)	
Benefit from income taxes	 	 	(40.3	)	 	 	(21.2	)	 	 	(77.8	)	 	 	(55.4	)	
Interest expense, net	 	 	70.9	 	 	 	43.7	 	 	 	113.2	 	 	 	87.0	 	
(Earnings) loss on discontinued operations, net
of taxes	 	 	1.0	 	 	 	1.5	 	 	 	(8.9	)	 	 	(4.3	)	
Depreciation, depletion, accretion and
amortization	 	 	92.1	 	 	 	97.3	 	 	 	182.8	 	 	 	191.5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA	 	 	$115.6	 	 	 	$97.3	 	 	 	$146.4	 	 	 	$156.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
26 

Table of Contents

RESULTS OF OPERATIONS
Net sales and cost of goods sold exclude intersegment sales and delivery revenues and costs. This presentation is consistent with the basis on which we review results of operations. We discuss separately our discontinued operations, which consist of our former Chemicals business.
CONSOLIDATED OPERATING RESULTS

 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30	 	 	June 30	 	
in millions, except per share data	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	
Net sales	 	 	$657.5	 	 	 	$692.8	 	 	 	$1,113.8	 	 	 	$1,157.3	 	
Cost of goods sold	 	 	556.7	 	 	 	570.5	 	 	 	1,020.1	 	 	 	1,034.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	$100.8	 	 	 	$122.3	 	 	 	$93.7	 	 	 	$123.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating earnings (loss)	 	 	$23.5	 	 	 	$1.2	 	 	 	($37.7	)	 	 	($35.6	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from continuing operations
before income taxes	 	 	($47.4	)	 	 	($43.7	)	 	 	($149.5	)	 	 	($122.4	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	   	($7.1	)	 	 	($22.5	)	 	   	($71.7	)	 	 	($67.0	)	
Earnings (loss) on discontinued operations,
net of income taxes	 	 	(1.0	)	 	 	(1.5	)	 	 	8.8	 	 	 	4.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	 	($8.1	)	 	 	($24.0	)	 	 	($62.9	)	 	 	($62.7	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings (loss) per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	 	($0.05	)	 	 	($0.18	)	 	 	($0.55	)	 	 	($0.53	)	
Discontinued operations	 	 	(0.01	)	 	 	(0.01	)	 	 	0.06	 	 	 	0.04	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic net loss per share	 	 	($0.06	)	 	 	($0.19	)	 	 	($0.49	)	 	 	($0.49	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings (loss) per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	 	($0.05	)	 	 	($0.18	)	 	 	($0.55	)	 	 	($0.53	)	
Discontinued operations	 	 	(0.01	)	 	 	(0.01	)	 	 	0.06	 	 	 	0.04	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted net loss per share	 	 	($0.06	)	 	 	($0.19	)	 	 	($0.49	)	 	 	($0.49	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
SECOND QUARTER 2011 COMPARED TO SECOND QUARTER 2010
Second quarter net sales were $657.5 million, down 5% from the second quarter of 2010. Shipments were down in all product lines with the exception of asphalt. The average unit sales price was up in all product lines.
Results for the second quarter were a net loss of ($8.1) million or ($0.06) per diluted share this year versus a net loss of ($24.0) million or ($0.19) per diluted share last year. Higher unit costs for diesel fuel and liquid asphalt resulted in higher pretax costs of $19.2 million. The current quarter’s results include a pretax charge of $26.5 million referable to our tender offer and debt retirement in June while the second quarter 2010 results include a pretax charge of $41.5 million referable to the settlement and associated legal fees of a lawsuit in Illinois (see IDOT/Joliet Road in Note 19 to the condensed consolidated financial statements).
27 

Table of Contents

CONTINUING OPERATIONS — Changes in loss from continuing operations before income taxes for the second quarter of 2011 versus the second quarter of 2010 are summarized below:
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

in millions
 	 	 	 	 	
Second quarter 2010	 	 	($43.7	)	

Lower aggregates earnings due to	 	 	 	 	
Lower volumes	 	 	(23.3	)	
Higher selling prices	 	 	9.7	 	
Higher costs and other	 	 	(5.6	)	
Lower concrete earnings	 	 	(3.5	)	
Higher asphalt mix earnings	 	 	1.1	 	
Lower selling, administrative and general expenses 1	 	 	6.0	 	
2010 IDOT settlement, including related legal fees	 	 	41.5	 	
Expenses associated with June 2011 debt purchase	 	 	(26.5	)	
All other	 	 	(3.1	)	

Second quarter 2011	 	 	($47.4	)	

1	 	Excludes $1.5 million of legal expenses in 2010 charged to selling, administrative and general expenses noted within the IDOT settlement line.	
Gross profit for the Aggregates segment was $102.8 million versus $122.0 million in the prior year’s second quarter. This decline in profitability was due to lower shipments. A number of Vulcan-served markets, most notably markets in the southeast and along the Mississippi River, experienced disruptions in construction activity due to flooding and unusually severe weather. However, aggregates shipments increased versus the prior year’s second quarter in California, Virginia and Maryland due primarily to stronger demand from public infrastructure projects. More specifically, aggregates shipments in California were up more than 20% versus the prior year’s second quarter due to some large project work. The average sales price for aggregates increased 2.5% from the prior year due to improvements in many markets. The earnings effect of higher pricing offset the impact of a sharp increase in the unit cost of diesel fuel.
The Concrete segment reported a loss of ($9.0) million versus a loss of ($5.6) million in the prior year’s second quarter. Ready-mixed concrete average sales price increased 8% from the prior year’s second quarter leading to improved unit materials margin. However, the improved materials margin effect was more than offset by a 12% decline in volume.
Asphalt mix segment gross profit was $8.3 million in the second quarter versus $7.3 million in the prior year’s second quarter. The average sales price for asphalt mix increased approximately 8%, more than offsetting the earnings effect of higher liquid asphalt costs and leading to higher unit materials margin versus the prior year. Asphalt mix volumes increased 3% from the prior year’s second quarter.
The Cement segment reported a loss of ($1.3) million, essentially flat with the prior year.
SAG expenses in the second quarter were $7.5 million lower than the prior year’s level. This year-over-year decrease resulted from lower spending in most major categories, including our legacy IT replacement project.
Net interest expense in the second quarter was $70.9 million versus $43.7 million in the prior year due specifically to $26.5 million of charges incurred in connection with the tender offer and debt retirement completed in June. These charges are due primarily to the difference between the purchase price and par value of the senior unsecured notes purchased in the tender offer and the noncash write-off of previously deferred issuance costs related to the debt retired in June.
We recorded income tax benefits from continuing operations of $40.3 million in the second quarter of 2011 compared to $21.2 million in the second quarter of 2010. An adjustment to the current quarter’s income tax benefit was required so that the year-to-date benefit reflects the expected annual effective tax rate. The increase in our income tax benefit resulted largely from applying the alternative methodology in the second quarter of 2010 as discussed in Note 4 to the condensed consolidated financial statements.
Results from continuing operations were a loss of ($0.05) per diluted share compared with a loss of ($0.18) per diluted share in the second quarter of 2010.
28 

Table of Contents

DISCONTINUED OPERATIONS — Second quarter pretax loss on discontinued operations was ($1.7) million in 2011 and ($1.8) million in 2010. The losses primarily reflect charges related to general and product liability costs, including legal defense costs, and environmental remediation costs associated with our former Chemicals business.
YEAR-TO-DATE JUNE 30, 2011 COMPARED TO YEAR-TO-DATE JUNE 30, 2010
First half 2011 net sales were $1,113.8 million, a decrease of 4% versus $1,157.3 million in the first half of 2010. Comparatively, shipments were down in all major product lines with the exception of asphalt mix while pricing was up in all major product lines with the exception of cement.
First half results were a net loss of ($62.9) million or ($0.49) per diluted share versus a net loss of ($62.7) million or ($0.49) per diluted share for the first half of 2010. Higher unit costs for diesel fuel and liquid asphalt resulted in higher pretax costs of $29.2 million. Additionally, each period’s results were impacted by significant items that mostly offset each other, as follows:

§	 	The 2011 first half results include a pretax gain of $25.5 million related to the partial recovery of a settlement of a lawsuit in Illinois and additional interest expense charges of $26.5 million referable to our tender offer and debt retirement completed in June 2011	

§	 	The 2010 first half results include a pretax charge of $41.5 million related to the original settlement and associated legal fees of the Illinois lawsuit and a pretax gain of $39.5 million related to the sale of three non-strategic aggregates facilities located in rural Virginia	
CONTINUING OPERATIONS — Changes in loss from continuing operations before income taxes for year-to-date June 30, 2010 versus year-to-date June 30, 2011 are summarized below:
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

in millions	 	 	 	 	
 	 	 	 	 	
Year-to-date June 30, 2010	 	 	($122.4	)	
 	
Lower aggregates earnings due to	 	 	 	 	
Lower volumes	 	 	(26.7	)	
Higher selling prices	 	 	9.9	 	
Higher costs and other	 	 	(6.9	)	
Lower concrete earnings	 	 	(1.8	)	
Lower cement earnings	 	 	(3.8	)	
Lower selling, administrative and general expenses 1, 2	 	 	15.0	 	
Lower gain on sale of property, plant & equipment	 	 	 	 	
and businesses	 	 	(46.4	)	
2010 IDOT settlement net of 2011 recovery, including related	 	 	 	 	
legal fees	 	 	67.0	 	
Expenses associated with June 2011 debt purchase	 	 	(26.5	)	
All other	 	 	(6.9	)	
 	
Year-to-date June 30, 2011	 	 	($149.5	)	

    1	 	Excludes $1.5 million of legal expenses in 2010 charged to selling, administrative and general expenses noted within the IDOT settlement line.	
 		
    2	 	Includes $9.2 million of expenses in 2010 for the fair value of property donations.	
Gross profit for the Aggregates segment was $113.6 million for the first six months of 2011 versus $137.4 million in 2010. This $23.8 million decline was due mostly to lower shipments and a 38.5% increase in the unit cost for diesel fuel partially offset by a 1.5% increase in average sales prices. The lower shipments resulted from varied market conditions across our footprint as well as unusually wet and/or severe weather across many of our markets in March and April.
The Concrete segment reported a loss of ($23.4) million, down $1.8 million from the first half of 2010. Shipments of ready-mixed concrete declined 8% offsetting the earnings effect of the 6% increase in average sales prices.
29 

Table of Contents

Asphalt mix segment gross profit of $8.1 million was down slightly, $0.2 million, from the first half 2010 level. This shortfall resulted primarily from an increase in non-materials related costs. Average sales prices for asphalt mix increased 6% from the first half of 2010, more than offsetting the earnings effect of higher liquid asphalt costs resulting in a higher unit materials margin. Asphalt mix volume increased 1%.
The Cement segment reported a loss of ($4.6) million for the first six months of 2011 versus a loss of ($0.8) million in the prior year. This shortfall was due mostly to a scheduled maintenance event in the first quarter of 2011.
SAG expenses decreased $16.5 million, or 10%, from the prior year’s first half. This year-over-year decrease was due to lower current period spending in most major overhead categories, including lower spending for our IT replacement project, and the absence of the $9.2 million charge recorded in the prior year for the fair value of donated land and the $1.5 million charge recorded in the prior year related to legal expenses for the IDOT settlement.
Gain on sale of property, plant & equipment and businesses was $3.4 million for the first six months of 2011, a decrease of $46.4 million from the prior year. The difference between the fair value of the above mentioned donated real estate and the carrying value, which was $8.4 million, was recorded as a gain on sale of property, plant & equipment in the first half of 2010. Additionally, during the first quarter of 2010 we sold three non-strategic aggregates facilities in rural Virginia for a pretax gain of $39.5 million.
Net interest expense was $113.2 million for the first half of 2011 versus $87.0 million in the prior year. Second quarter charges of $26.5 million incurred specifically in connection with the tender offer and debt retirement completed in June accounted for all of the increase. These charges are due primarily to the difference between the purchase price and par value of the senior unsecured notes purchased in the tender offer and the noncash write-off of previously deferred financing costs related to the debt retired in June.
We recorded income tax benefits from continuing operations of $77.8 million for the six months ended June 30, 2011 compared to $55.4 million for the six months ended June 30, 2010. The increase in our income tax benefit resulted largely from applying the alternative methodology for the first six months of 2010 as discussed in Note 4 to the condensed consolidated financial statements.
Results from continuing operations were a loss of ($0.55) per diluted share compared with a loss of ($0.53) per diluted share in the first six months of 2010.
DISCONTINUED OPERATIONS — Year-to-date June pretax earnings on discontinued operations were $14.6 million in 2011 and $7.1 million in 2010. The 2011 pretax earnings include an $11.1 million gain related to the 5CP earn-out compared to $7.9 million in 2010, and $7.5 million of gains related to litigation settlements compared to $1.6 million in 2010. Excluding these gains, the 2011 and 2010 year-to-date June pretax earnings primarily reflect charges related to general and product liability costs, including legal defense costs, and environmental remediation costs associated with our former Chemicals business.
CASH AND LIQUIDITY
Our primary source of liquidity is cash provided by our operating activities. Our additional financial resources include bank lines of credit and access to the capital markets. We believe these financial resources are sufficient to fund our future business requirements, including

§	 	debt service obligations	
 		
§	 	cash contractual obligations	
 		
§	 	capital expenditures	
 		
§	 	dividend payments	
 		
§	 	potential future acquisitions	
We operate a centralized cash management system that minimizes the level of cash at each division and utilizes all excess cash after funding daily working capital requirements to reduce borrowings under our bank lines of credit. When cash on hand is not sufficient to fund daily working capital requirements, we draw on our bank lines of credit. The weighted-average interest rate on short-term debt was 0.59% during the six months ended June 30, 2011 and 0.53% at June 30, 2011.
30 

Table of Contents

CURRENT MATURITIES AND SHORT-TERM BORROWINGS
As of June 30, 2011, current maturities of long-term debt are $5.2 million, of which $5.0 million is due as follows:

 	 	June 30	 	
in millions	 	2011	 	
 	
Current maturities due	 	 	 	 	
Third quarter 2011	 	 	$0.0	 	
Fourth quarter 2011	 	 	5.0	 	
First quarter 2012	 	 	0.0	 	
Second quarter 2012	 	 	0.0	 	
 	
There are various maturity dates for the remaining $0.2 million of current maturities. We expect to retire the current maturities using cash generated from operations or by drawing on our bank lines of credit.
Short-term borrowings consisted of the following:

 	 	June 30	 	 	December 31	 	 	June 30	 	
dollars in millions	 	2011	 	 	2010	 	 	2010	 	
 	 	 	 	 	 	 	 	 	 	
Short-term Borrowings	 	 	 	 	 	 	 	 	 	 	 	 	
Bank borrowings	 	   	$100.0	 	 	 	$285.5	 	 	 	$0.0	 	
Commercial paper	 	 	0.0	 	 	 	0.0	 	 	 	320.0	 	
 	 	 	 	 	 	 	 	 	 	
Total	 	 	$100.0	 	 	 	$285.5	 	 	 	$320.0	 	
 	 	 	 	 	 	 	 	 	 	
Bank Borrowings	 	 	 	 	 	 	 	 	 	 	 	 	
Maturity	 	15 days	 	 	3 - 74 days	 	 	 	n/a	 	
Weighted-average interest rate	 	 	0.53%		 	 	0.59%	 	 	 	n/a	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Commercial Paper	 	 	 	 	 	 	 	 	 	 	 	 	
Maturity	 	 	n/a	 	 	 	n/a	 	 	1 - 2 days	 	
Weighted-average interest rate	 	 	n/a	 	 	 	n/a	 	 	 	0.70%	 	
 	 	 	 	 	 	 	 	 	 	
Our $1.5 billion bank credit facility expires November 16, 2012. Borrowings under this credit facility, which are classified as short-term, bear an interest rate based on London Interbank Offer Rate (LIBOR) plus a credit spread determined at the time of borrowing based on current conditions in the LIBOR market. This credit spread was 30 basis points (0.30 percentage points) based on our long-term debt ratings at June 30, 2011 resulting in an interest rate of 0.53%. We access our bank lines of credit to fund daily working capital requirements if cash on hand is insufficient.
Utilization of the borrowing capacity under our bank credit facility as of June 30, 2011

§	 	$100.0 million was drawn	
 		
§	 	$60.9 million was used to provide backup for outstanding standby letters of credit	
 		
§	 	as a result, we had available credit of $1,339.1 million	
Our short-term debt ratings/outlook as of June 30, 2011 were

§	 	Standard and Poor’s — B/stable (rating dated March 18, 2011; downgraded from A-3/credit watch - negative)	
 		
§	 	Moody’s — not prime/stable (rating dated March 4, 2011; downgraded from P-3/under review)	
31 

Table of Contents

WORKING CAPITAL
Working capital, current assets less current liabilities, is a common measure of liquidity used to assess a company’s ability to meet short-term obligations. Our working capital is calculated as follows:

 	 	June 30	 	 	December 31	 	 	June 30	 	
in millions	 	2011	 	 	2010	 	 	2010	 	
 	 	 	 	 	 	
Working Capital	 	 	 	 	 	 	 	 	 	 	 	 	
Current assets 1	 	 	     $ 892.4	 	 	 	$772.1	 	 	 	$856.9	 	
Current liabilities	 	 	(421.0	)	 	 	(565.7	)	 	 	(1,074.1	)	
 	 	 	 	 	 	
Total working capital	 	 	$ 471.4	 	 	 	$206.4	 	 	 	($217.2	)	

    1	 	As restated for June 30, 2010, see Note 1 to the condensed consolidated financial statements.	
The $265.0 million increase in our working capital over the six month period ended June 30, 2011 was a result of an increase in cash and cash equivalents of $59.2 million, an increase in accounts and notes receivable of $72.0 million and a decrease in short-term borrowings of $185.5 million. These variances were partially offset by an increase in trade payables and accruals of $51.4 million. The increase in cash and cash equivalents and the decrease in short-term borrowings are a result of the $1.1 billion of long-term notes issued in the second quarter of 2011. The increases in accounts and notes receivable and trade payables and accruals reflect our seasonal increases in sales as evidenced by the 20% increase in net sales for the three months ended June 30, 2010 as compared to the three months ended December 31, 2010.
The $688.6 million increase in our working capital over the twelve month period ended June 30, 2011 was due to an increase in cash and cash equivalents of $64.6 million, a decrease in current maturities of long-term debt of $420.1 million and a decrease in short-term borrowings of $220.0 million. These variances are a result of the $1.1 billion of long-term notes issued in the second quarter of 2011.
CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by operating activities is derived primarily from net earnings before deducting noncash charges for depreciation, depletion, accretion and amortization.

 	 	Six Months Ended	 	
 	 	June 30	 	
in millions	 	2011	 	 	2010	 	
 	 	 	 	 	 	
Net loss	 	 	     ($62.9	)	 	 	($62.7	)	
Depreciation, depletion, accretion and amortization	 	 	182.7	 	 	 	191.5	 	
Net gain on sale property, plant & equipment and businesses	 	 	(15.7	)	 	 	(58.5	)	
Contributions to pension plans	 	 	(2.0	)	 	 	(21.1	)	
Changes in assets and liabilities before initial
effects of business acquisitions and dispositions	 	 	(37.6	)	 	 	2.6	 	
Other operating cash flows, net	 	 	(57.5	)	 	 	(33.1	)	
 	 	 	 	 	 	
Net cash provided by operating activities	 	 	$ 7.0	 	 	 	$18.7	 	
 	
Net earnings before noncash deductions for depreciation, depletion, accretion and amortization were $119.8 million during the first six months of 2011 as compared to $128.8 million during the same period in 2010. Changes in assets and liabilities before initial effects of business acquisitions and dispositions decreased $40.2 million as compared to the six month period ended June 30, 2010. This decrease was largely caused by an unfavorable variance in trade payables and accruals. The cash outflows were partially offset by lower contributions to pension plans and a decrease in net gain on sale of property, plant & equipment and businesses. The cash received associated with net gains on sale of property, plant & equipment and businesses is adjusted out of operating activities and presented as a component of investing activities.
32 

Table of Contents

CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used for investing activities was $31.1 million during the six months ended June 30, 2011, a decrease in cash flow of $39.1 million as compared to the same period in the prior year. The decline in investing cash flows is largely due to a decrease in proceeds from the sale of businesses of $38.7 million. In the first quarter of 2010, three non-strategic aggregates facilities in rural Virginia were sold resulting in net proceeds of $42.3 million.
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by financing activities was $83.3 million during the first six months of 2011, an increase in cash flow of $90.1 million. This increase largely reflects net proceeds from the issuance of $1.1 billion of long-term notes that were retained for general corporate purposes, net of debt retired.
CAPITAL STRUCTURE AND RESOURCES
We pursue attractive investment opportunities and fund acquisitions using internally generated cash or by issuing debt or equity securities. We actively manage our capital structure and resources in order to maximize shareholder wealth. Our primary goals include

§	 	maintaining credit ratings that allow access to the credit markets on favorable terms	
 		
§	 	maintaining a debt to total capital ratio within what we believe to be a prudent and generally acceptable range of 35% to 40%	
 		
§	 	paying out a reasonable share of net cash provided by operating activities as dividends	
In June 2011, we issued $1.1 billion of unsecured long-term notes at favorable interest rates and with financial/contractual covenants and restrictions that mirror our existing debt. This issuance improves our debt maturity profile and provides financial flexibility to continue investing in our business as the economy recovers.
LONG-TERM DEBT
Our total debt as a percentage of total capital and the weighted-average interest rates on our long-term debt are summarized below:

 	 	June 30	 	 	December 31	 	 	June 30	 	
dollars in millions	 	2011	 	 	2010	 	 	2010	 	
 	 	 	 	 	 	
Debt	 	 	 	 	 	 	 	 	 	 	 	 	
Current maturities of long-term debt	 	 	$ 5.2	 	 	 	$5.2	 	 	 	$425.3	 	
Short-term borrowings	 	 	100.0	 	 	 	285.5	 	 	 	320.0	 	
Long-term debt	 	 	2,785.8	 	 	 	2,427.5	 	 	 	2,001.2	 	
 	 	 	 	 	 	
Total debt	 	 	     $ 2,891.0	 	 	 	$2,718.2	 	 	 	$2,746.5	 	
 	 	 	 	 	 	
Capital	 	 	 	 	 	 	 	 	 	 	 	 	
Total debt	 	 	$ 2,891.0	 	 	 	$2,718.2	 	 	 	$2,746.5	 	
Equity 1	 	 	3,881.3	 	 	 	3,965.0	 	 	 	4,029.3	 	
 	 	 	 	 	 	
Total capital	 	 	$ 6,772.3	 	 	 	$6,683.2	 	 	 	$6,775.8	 	
 	 	 	 	 	 	
Total Debt as a Percentage of
Total Capital	 	 	42.7	%	 	 	40.7	%	 	 	40.5	%	
 	 	 	 	 	 	
Long-term Debt — Weighted-average
Interest Rate	 	 	7.44	%	 	 	7.02	%	 	 	8.03	%	

			
1  	 	As restated for June 30, 2010, see Note 1 to the condensed consolidated financial statements.	
33 

Table of Contents

In June 2011 we issued $1.1 billion of long-term notes in two series, as follows: $500.0 million of 6.50% notes due in 2016 and $600.0 million of 7.50% notes due in 2021. These notes were issued principally to

§	 	repay and terminate our $450.0 5-year floating-rate term loan	
 		
§	 	fund the purchase of $165.4 million of our outstanding 5.60% 5-year notes issued in 2007 and $109.6 million of our outstanding 6.30% 5-year notes issued in 2008 through a tender offer	
 		
§	 	repay $275.0 million outstanding under our revolving credit facility	
 		
§	 	and for general corporate purposes	
Our bank credit facility and the indenture governing our notes contain a covenant limiting our total debt as a percentage of total capital to 65%. Our total debt as a percentage of total capital was 42.7% as of June 30, 2011, compared with 40.7% six months previously and 40.5% twelve months previously.
In the future, our total debt as a percentage of total capital will depend on specific investment and financing decisions. We have made acquisitions from time to time and will continue to pursue attractive investment opportunities. Such acquisitions could be funded by using internally generated cash or issuing debt or equity securities.
Our long-term debt ratings/outlook as of June 30, 2011 were

§	 	Standard and Poor’s — BB/stable (rating dated March 18, 2011; downgraded from BBB-/credit watch)	
 		
§	 	Moody’s — Ba1/stable (rating dated March 4, 2011; downgraded from Baa3/under review)	
The rating agencies confirmed the long-term ratings above upon our issuance of the $1.1 billion of long-term notes.
EQUITY
Our common stock issuances are summarized below:

 	 	June 30	 	 	December 31	 	 	June 30	 	
in thousands	 	2011	 	 	2010	 	 	2010	 	
 	 	 	 	 	 	
Common stock shares at beginning of year
issued and outstanding	 	 	     128,570	 	 	 	125,912	 	 	 	125,912	 	
 	 	 	 	 	 	
Common Stock Issuances	 	 	 	 	 	 	 	 	 	 	 	 	
Pension plan contribution	 	 	0	 	 	 	1,190	 	 	 	1,190	 	
Acquisition	 	 	373	 	 	 	0	 	 	 	0	 	
401(k) savings and retirement plan	 	 	111	 	 	 	882	 	 	 	769	 	
Share-based compensation plans	 	 	170	 	 	 	586	 	 	 	399	 	
 	 	 	 	 	 	
Common stock shares at end of period
issued and outstanding	 	 	129,224	 	 	 	128,570	 	 	 	128,270	 	
 	
In March 2010, we issued 1.2 million shares of common stock (par value of $1 per share) to our qualified pension plan as explained in Notes 9 and 10 to the condensed consolidated financial statements. This transaction increased shareholders’ equity by $53.9 million (common stock $1.2 million and capital in excess of par $52.7 million).
In February 2011, we issued 0.4 million shares of common stock in connection with a business acquisition as explained in Note 14 to the condensed consolidated financial statements.
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 our common stock. This arrangement provides a means of improving cash flow, increasing shareholders’ equity and reducing leverage. Under this arrangement, the stock issuances and resulting cash proceeds for the periods presented were

§	 	six months ended June 30, 2011 — issued 0.1 million shares for cash proceeds of $4.7 million	
 		
§	 	twelve months ended December 31, 2010 — issued 0.9 million shares for cash proceeds of $41.7 million	
 		
§	 	six months ended June 30, 2010 — issued 0.8 million shares for cash proceeds of $35.3 million and a receivable of $1.5 million	
34 

Table of Contents

There were no shares held in treasury as of June 30, 2011, December 31, 2010 and June 30, 2010. There were 3,411,416 shares remaining under the current purchase authorization of the Board of Directors as of June 30, 2011.
STANDBY LETTERS OF CREDIT
For a discussion of our standby letters of credit see Note 13 to the condensed consolidated financial statements.
CASH CONTRACTUAL OBLIGATIONS
Our obligation to make future payments under contracts is presented in our most recent Annual Report on Form 10-K.
CRITICAL ACCOUNTING POLICIES
We follow certain significant accounting policies when preparing our consolidated financial statements. A summary of these policies is included in our Annual Report on Form 10-K for the year ended December 31, 2010 (Form 10-K).
We prepare these financial statements to conform with accounting principles generally accepted in the United States of America. These principals require us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and contingent liabilities at the date of the financial statements. We base our estimates on historical experience, current conditions and various other assumptions we believe reasonable under existing circumstances and evaluate these estimates and judgments on an ongoing basis. The results of these estimates form the basis for our judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Our actual results may differ from these estimates.
We believe that the accounting policies described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Form 10-K require the most significant judgments and estimates used in the preparation of our financial statements, so we consider these to be our critical accounting policies. There have been no changes to our critical accounting policies during the six months ended June 30, 2011.
NEW ACCOUNTING STANDARDS
For a discussion of the accounting standards recently adopted and pending adoption and the affect such accounting changes will have on our results of operations, financial position or liquidity, see Note 16 to the condensed consolidated financial statements.
35 

Table of Contents

FORWARD-LOOKING STATEMENTS
Certain matters discussed in this report, including expectations regarding future performance, contain forward-looking statements that are subject to assumptions, risks and uncertainties that could cause actual results to differ materially from those projected. These assumptions, risks and uncertainties include, but are not limited to:

§	 	general economic and business conditions;	
 		
§	 	the timing and amount of federal, state and local funding for infrastructure;	
 		
§	 	the lack of a multi-year federal highway funding bill with an automatic funding mechanism;	
 		
§	 	the reluctance of state departments of transportation to undertake federal highway projects without a reliable method of federal funding;	
 		
§	 	the impact of the global economic recession on our business and financial condition and access to capital markets;	
 		
§	 	changes in the level of spending for private residential and nonresidential construction;	
 		
§	 	the highly competitive nature of the construction materials industry;	
 		
§	 	the impact of future regulatory or legislative actions;	
 		
§	 	the outcome of pending legal proceedings;	
 		
§	 	pricing of our products;	
 		
§	 	weather and other natural phenomena;	
 		
§	 	energy costs;	
 		
§	 	costs of hydrocarbon-based raw materials;	
 		
§	 	healthcare costs;	
 		
§	 	the amount of long-term debt and interest expense we incur;	
 		
§	 	changes in interest rates;	
 		
§	 	the impact of our below investment grade debt rating on our cost of capital;	
 		
§	 	volatility in pension plan asset values which may require cash contributions to the pension plans;	
 		
§	 	the impact of environmental clean-up costs and other liabilities relating to previously divested businesses;	
 		
§	 	our ability to secure and permit aggregates reserves in strategically located areas;	
 		
§	 	our ability to manage and successfully integrate acquisitions;	
 		
§	 	the potential impact of future legislation or regulations relating to climate change or greenhouse gas emissions or the definition of minerals;	
 		
§	 	and other assumptions, risks and uncertainties detailed from time to time in our periodic reports.	
All forward-looking statements are made as of the date of filing. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Investors are cautioned not to rely unduly on such forward-looking statements when evaluating the information presented in our filings, and are advised to consult any of our future disclosures in filings made with the Securities and Exchange Commission and our press releases with regard to our business and consolidated financial position, results of operations and cash flows.
INVESTOR INFORMATION
We make available on our website, www.vulcanmaterials.com , free of charge, copies of our

§	 	Annual Report on Form 10-K	
 		
§	 	Quarterly Reports on Form 10-Q	
 		
§	 	Current Reports on Form 8-K	
We also provide amendments to those reports filed with or furnished to the Securities and Exchange Commission (SEC) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as well as all Forms 3, 4 and 5 filed with the SEC by our executive officers and directors, as soon as the filings are made publicly available by the SEC on its EDGAR database ( www.sec.gov ).
36 

Table of Contents

The public may read and copy materials filed with the SEC at the Public Reference Room of the SEC at 100 F Street, NE, Washington, D. C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-732-0330. In addition to accessing copies of our reports online, you may request a copy of our Annual Report on Form 10-K, including financial statements, by writing to Jerry F. Perkins Jr., Secretary, Vulcan Materials Company, 1200 Urban Center Drive, Birmingham, Alabama 35242.
We have a

§	 	Business Conduct Policy applicable to all employees and directors	
 		
§	 	Code of Ethics for the CEO and Senior Financial Officers	
Copies of the Business Conduct Policy and the Code of Ethics are available on our website under the heading “Corporate Governance.” If we make any amendment to, or waiver of, any provision of the Code of Ethics, we will disclose such information on our website as well as through filings with the SEC.
Our Board of Directors has also adopted

§	 	Corporate Governance Guidelines	
 		
§	 	Charters for its Audit, Compensation and Governance Committees	
These documents meet all applicable SEC and New York Stock Exchange regulatory requirements.
Each of these documents is available on our website under the heading, “Corporate Governance,” or you may request a copy of any of these documents by writing to Jerry F. Perkins Jr., Secretary, Vulcan Materials Company, 1200 Urban Center Drive, Birmingham, Alabama 35242.
37 

Table of Contents

ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to certain market risks arising from transactions that are entered into in the normal course of business. In order to manage or reduce these market risks, we may utilize derivative financial instruments. We do not enter into derivative financial instruments for speculative or trading purposes.
We are exposed to interest rate risk due to our various credit facilities and long-term debt instruments. At times, we use interest rate swap agreements to manage this risk.
In June 2011, we issued $500.0 million of 6.50% fixed-rate debt maturing on December 1, 2016. Concurrently, we entered into interest rate swap agreements in the stated amount of $500.0 million. Under these agreements, we pay 6-month LIBOR plus a spread of approximately 4.05% and receive a fixed interest rate of 6.50%. Additionally, in June 2011, we entered into interest rate swap agreements on our $150.0 million fixed-rate 10.125% 7-year notes issued in 2009. Under these agreements, we pay 6-month LIBOR plus a spread of approximately 8.03% and receive a fixed interest rate of 10.125%. The changes in fair value of our interest rate swap fair value hedges are recorded as interest expense consistent with the change in the fair value of the hedged fixed-rate debt. At June 30, 2011, we recognized a liability of $7.4 million included in other noncurrent liabilities equal to the fair value of this swap and a corresponding decrease in the fair value of the hedged fixed-rate debt.
In December 2007, we issued $325.0 million of 3-year floating-rate notes that bear interest at 3-month LIBOR plus 1.25% per annum. Concurrently, we entered into an interest rate swap agreement in the stated amount of $325.0 million. The swap agreement terminated December 15, 2010, coinciding with the maturity of the 3-year notes. The realized gains and losses upon settlement related to the swap agreement are reflected in interest expense concurrent with the hedged interest payments on the debt. At June 30, 2010, we recognized a liability of $5.6 million (included in other current liabilities) equal to the fair value of this swap.
At June 30, 2011, the estimated fair value of our long-term debt instruments including current maturities was $2,862.9 million compared to a book value of $2,791.1 million. The estimated fair value was determined by discounting expected future cash flows based on credit-adjusted interest rates on U.S. Treasury bills, notes or bonds, as appropriate. The fair value estimate is based on information available as of the measurement date. Although we are not aware of any factors that would significantly affect the estimated fair value amount, it has not been comprehensively revalued since the measurement date. The effect of a decline in interest rates of 1 percentage point would increase the fair value of our liability by approximately $133.8 million.
We are exposed to certain economic risks related to the costs of our pension and other postretirement benefit plans. These economic risks include changes in the discount rate for high-quality bonds, the expected return on plan assets, the rate of compensation increase for salaried employees and the rate of increase in the per capita cost of covered healthcare benefits. The impact of a change in these assumptions on our annual pension and other postretirement benefits costs is discussed in our most recent Annual Report on Form 10-K.
ITEM 4
CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
We maintain a system of controls and procedures designed to ensure that information required to be disclosed in reports we file with the SEC is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. These disclosure controls and procedures (as defined in the Securities and Exchange Act of 1934 Rules 13a — 15(e) and 15d - 15(e)), include, without limitation, controls and procedures designed to ensure that information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer, with the participation of other management officials, evaluated the effectiveness of the design and operation of the disclosure controls and procedures as of June 30, 2011. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.
38 

Table of Contents

We are in the process of replacing our legacy information technology systems and have substantially completed the implementation of new financial reporting software, which is a major component of the replacement. We also began implementation of new quote to cash software in the second quarter of 2011, which is another significant component of the replacement. The new information technology systems were a source for most of the information presented in this Quarterly Report on Form 10-Q. We are continuing to work towards the full implementation of the new information technology systems.
No other changes were made to our internal controls over financial reporting or other factors that could materially affect these controls during the second quarter of 2011.
PART II OTHER INFORMATION
ITEM 1
LEGAL PROCEEDINGS
Certain legal proceedings in which we are involved are discussed in Note 12 to the consolidated financial statements and Part I, Item 3 of our Annual Report on Form 10-K for the year ended December 31, 2010, and in Note 19 to the condensed consolidated financial statements of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011. See Note 19 to the condensed consolidated financial statements of this Form 10-Q for a discussion of certain recent developments concerning our legal proceedings.
ITEM 1A
RISK FACTORS
There were no material changes to the risk factors disclosed in Item 1A of Part 1 in our Form 10-K for the year ended December 31, 2010.
ITEM 6
EXHIBITS

Exhibit 31(a)	 	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	
 	 	 	
Exhibit 31(b)	 	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	
 	 	 	
Exhibit 32(a)	 	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	
 	 	 	
Exhibit 32(b)	 	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	
 	 	 	
Exhibit 99	 	MSHA Citations and Litigation	
 	 	 	
Exhibit 101.INS	 	XBRL Instance Document	
 	 	 	
Exhibit 101.SCH	 	XBRL Taxonomy Extension Schema Document	
 	 	 	
Exhibit 101.CAL	 	XBRL Taxonomy Extension Calculation Linkbase Document	
 	 	 	
Exhibit 101.LAB	 	XBRL Taxonomy Extension Label Linkbase Document	
 	 	 	
Exhibit 101.PRE	 	XBRL Taxonomy Extension Presentation Linkbase Document	
 	 	 	
Exhibit 101.DEF	 	XBRL Taxonomy Extension Definition Linkbase Document	
39 

Table of Contents
 
SIGNATURES
Pursuant to the requirements 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
 	 	
 	/s/ Ejaz A. Khan  	 	
 	Ejaz A. Khan 	 	
Date August 4, 2011 	Vice President, Controller and Chief Information Officer
(Principal Accounting Officer) 	 	

 	/s/ Daniel F. Sansone  	 	
 	Daniel F. Sansone 	 	
Date August 4, 2011 	Executive Vice President, Chief Financial Officer
(Principal Financial Officer) 	 	
 	
40 

EXHIBIT 31(a)
CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Donald M. James, certify that:	

1.	 	I have reviewed this quarterly report on Form 10-Q of Vulcan Materials Company;	
 		
2.	 	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
 		
3.	 	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
 		
4.	 	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

a)	 	Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 		
b)	 	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 		
c)	 	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 		
d)	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	 	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

a)	 	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 		
b)	 	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
Date     August 4, 2011
 	 	 	 	 	
 	/s/ Donald M. James  	 	
 	Donald M. James 	 	
 	Chairman and Chief Executive Officer 	 	
Exhibit 31(a)

EXHIBIT 31(b)
CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Daniel F. Sansone, certify that:      	

1.	 	I have reviewed this quarterly report on Form 10-Q of Vulcan Materials Company;	
 		
2.	 	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
 		
3.	 	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
 		
4.	 	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

a)	 	Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 		
b)	 	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 		
c)	 	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 		
d)	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	 	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

a)	 	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 		
b)	 	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
Date     August 4, 2011
 	 	 	 	 	
 	/s/ Daniel F. Sansone  	 	
 	Daniel F. Sansone 	 	
 	Executive Vice President, Chief Financial Officer 	 	
Exhibit 31(b)

EXHIBIT 32(a)
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
OF
VULCAN MATERIALS COMPANY
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES OXLEY ACT OF 2002
I, Donald M. James, Chairman and Chief Executive Officer of Vulcan Materials Company, certify that the Quarterly Report on Form 10-Q (the “report”) for the quarter ended June 30, 2011, filed with the Securities and Exchange Commission on the date hereof:

(i)	 	Fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and	
 		
(ii)	 	the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of Vulcan Materials Company.	
 	 	 	 	 	
 	/s/ Donald M. James  	 	
 	Donald M. James 	 	
 	Chairman and Chief Executive Officer
August 4, 2011 	 	
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Vulcan Materials Company and will be retained by Vulcan Materials Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32(a)

EXHIBIT 32(b)
CERTIFICATION OF CHIEF FINANCIAL OFFICER
OF
VULCAN MATERIALS COMPANY
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES OXLEY ACT OF 2002
I, Daniel F. Sansone, Senior Vice President and Chief Financial Officer of Vulcan Materials Company, certify that the Quarterly Report on Form 10-Q (the “report”) for the quarter ended June 30, 2011, filed with the Securities and Exchange Commission on the date hereof:

(i)	 	fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and	
 		
(ii)	 	the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of Vulcan Materials Company.	
 	 	 	 	 	
 	/s/ Daniel F. Sansone  	 	
 	Daniel F. Sansone 	 	
 	Executive Vice President, Chief Financial Officer
August 4, 2011 	 	
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Vulcan Materials Company and will be retained by Vulcan Materials Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32(b)

EXHIBIT 99
MSHA CITATIONS AND LITIGATION
On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) was enacted. Section 1503 of the Dodd-Frank Act requires companies that are “operators” (as such term is defined in the Federal Mine Safety and Health Act of 1977 (the Mine Act)) to disclose certain mine safety information in each periodic report to the Commission. This information is related to the enforcement of the Mine Act by the Mine Safety and Health Administration (MSHA).
The Dodd-Frank Act requires disclosure of the following categories of violations, orders and citations under the Mine Act: (1) Section 104 S&S Citations, which are citations issued for violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard; (2) Section 104(b) Orders, which are orders issued upon a follow up inspection where the inspector finds the violation previously cited has not been totally abated in the prescribed time period; (3) Section 104(d) Citations and Orders, which are issued upon violations of mandatory health or safety standards caused by an unwarrantable failure of the operator to comply with the standards; (4) Section 110(b)(2) Violations, which result from the reckless and repeated failure to eliminate a known violation; (5) Section 107(a) Orders, which are given when MSHA determines that an imminent danger exists and results in an order of immediate withdrawal from the area of the mine affected by the condition; and (6) written notices from MSHA of a pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of mine health or safety hazards under Section 104(e) or could have the potential to have such a pattern. In addition, the Dodd-Frank Act requires the disclosure of the total dollar value of proposed assessments from MSHA under the Mine Act and the total number of mining related fatalities.
The following disclosures are made pursuant to Section 1503.
During the three months ended June 30, 2011, none of our operations: (i) received Section 104(b) Orders; (ii) had any flagrant violations under Section 110(b)(2); (iii) received Section 107(a) Orders; (iv) received notice from MSHA of a pattern of violations of mandatory health or safety standards under Section 104(e); or (v) had any mining-related fatalities.
Exhibit 99

 

SECOND QUARTER 2011
The table below sets forth, by mine, the total number of citations and/or orders issued during the period covered by this report to us by MSHA under the indicated provisions of the Mine Act, together with the total dollar value of proposed assessments, if any, from MSHA, received during the three months ended June 30, 2011. Of our 256 active MSHA-regulated facilities, we received 149 federal mine safety inspections at 132 operations during the reporting period. Of our inspected operations, 113 did not receive any reportable citations or orders.

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Total Dollar	 	 	 	 	 	 	 	 	Received	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Value of	 	 	 	 	 	 	 	 	Written	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Mine Act	 	 	 	 	 	 	 	 	 	 	 	 	 	Proposed	 	 	 	Total	 	 	 	Notice	 	 	
 	 	 	 	 	 	 	 	 	Total	 	 	 	 	 	 	 	 	§ 104(d)	 	 	 	 	 	 	 	 	 	 	 	 	 	MSHA	 	 	 	Number	 	 	 	under	 	 	
 	 	 	 	 	 	 	 	 	Number	 	 	 	Mine Act	 	 	 	Citations	 	 	 	Mine Act	 	 	 	Mine Act	 	 	 	Assessments	 	 	 	of Mining	 	 	 	Mine Act	 	 	
 	 	 	 	Number of	 	 	 	of S&S	 	 	 	§ 104(b)	 	 	 	and	 	 	 	§ 110(b)(2)	 	 	 	§ 107(a)	 	 	 	(dollars in	 	 	 	Related	 	 	 	§ 104(e)	 	 	
 	Name of Operation	 	 	Inspections	 	 	 	Citations	 	 	 	Orders	 	 	 	Orders	 	 	 	Violations	 	 	 	Orders	 	 	 	thousands)	 	 	 	Fatalities	 	 	 	(yes/no)	 	 	
 	Athens Quarry, TN	 	 	 	1	 	 	 	 	5	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Bartlett UG Bluff City, IL	 	 	 	1	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Black Angus S&G, AZ	 	 	 	1	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0.2	 	 	 	 	0	 	 	 	No	 	
 	Clear Creek Quarry, NC	 	 	 	2	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	2.1	 	 	 	 	0	 	 	 	No	 	
 	Fort Payne Quarry, AL	 	 	 	1	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Grand Rivers Quarry, KY	 	 	 	2	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Lakeside Quarry, SC	 	 	 	1	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Laraway Quarry, IL	 	 	 	1	 	 	 	 	2	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	New Bristol Quarry, TN	 	 	 	1	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0.3	 	 	 	 	0	 	 	 	No	 	
 	Pacolet Quarry, SC	 	 	 	1	 	 	 	 	2	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Palmdale S&G, CA	 	 	 	1	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Puddledock S&G, VA	 	 	 	1	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Reliance S&G, CA	 	 	 	1	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Richmond Rd Quarry, KY	 	 	 	2	 	 	 	 	2	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Sanger S&G, CA	 	 	 	1	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Scottsboro Quarry, AL	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Spruce Pine Quarry, NC	 	 	 	2	 	 	 	 	2	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	1.1	 	 	 	 	0	 	 	 	No	 	
 	Sweet Water Quarry, TN	 	 	 	1	 	 	 	 	2	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0.3	 	 	 	 	0	 	 	 	No	 	
 	Tampa Cement Grinding
Plant, FL	 	 	 	1	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Other Operations - 113	 	 	 	126	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	No	 	
 	Total	 	 	 	149	 	 	 	 	27	 	 	 	 	0	 	 	 	 	1	 	 	 	 	0	 	 	 	 	0	 	 	 	 	3.9	 	 	 	 	0	 	 	 	 	 	 	 	
 	
The total dollar value of proposed assessments received during the three and six months ended June 30, 2011 for all other citations, as well as proposed assessments received during the reporting period for citations previously issued, are $41,730 and $133.469, respectively.
The table below set forth, by mine, the pending legal actions filed before the Federal Mine Safety and Health Review Commission during the three months ended June 30, 2011. We initiated each of these actions in order to contest the appropriateness of citations issued.

 	 
Name of Operation	 	 	State	 	 	Case Type	 	 	Action Type	 	 	Date Case Filed	 	
 	Hanover Quarry	 	 	PA	 	 	Contest Penalty	 	 	104(a) Non S&S, 104(a) S&S	 	 	04/06/2011	 	
 	Havre De Grace Quarry	 	 	MD	 	 	Contest Penalty	 	 	104(a) S&S	 	 	04/21/2011	 	
 	Clarkesville Quarry	 	 	TN	 	 	Contest Penalty	 	 	104(a) S&S	 	 	04/22/2011	 	
 	TSB Cement Plant	 	 	FL	 	 	Contest Penalty	 	 	104(a) Non S&S, 104(a) S&S	 	 	04/29/2011	 	
 	Bartlett UG Bluff City	 	 	IL	 	 	Contest Penalty	 	 	104(a) Non S&S	 	 	05/04/2011	 	
 	Witherspoon Sand Plant	 	 	FL	 	 	Contest Penalty	 	 	104(a) S&S	 	 	05/20/2011	 	
 	Helotes Stone Quarry	 	 	TX	 	 	Contest Penalty	 	 	104(a) Non S&S	 	 	05/24/2011	 	
 	Dabney Asphalt Quarry	 	 	TX	 	 	Contest Penalty	 	 	104(a) S&S	 	 	05/24/2011	 	
 	Kankakee Quarry & Mill	 	 	IL	 	 	Contest Penalty	 	 	104(a) Non S&S	 	 	05/24/2011	 	
 	Franklin Quarry	 	 	TN	 	 	Contest Penalty	 	 	104(a) S&S	 	 	05/24/2011	 	
 	Midsouth Machine & Service	 	 	TN	 	 	Contest Penalty	 	 	104(a) S&S	 	 	05/26/2011	 	
 	Maynardville Quarry	 	 	TN	 	 	Contest Penalty	 	 	104(a) Non S&S	 	 	05/26/2011	 	
 	Sanders Quarry	 	 	VA	 	 	Contest Penalty	 	 	104(a) Non S&S	 	 	05/31/2011	 	
 	Pocomoke City S&G	 	 	MD	 	 	Contest Penalty	 	 	104(a) Non S&S	 	 	05/31/2011	 	
 	Miami Quarry	 	 	FL	 	 	Contest Penalty	 	 	104(a) Non S&S	 	 	06/06/2011	 	
 	Black Angus S&G	 	 	AZ	 	 	Contest Penalty	 	 	104(a) S&S	 	 	06/09/2011	 	
 	Sanders Quarry	 	 	VA	 	 	Contest Penalty	 	 	104(d)(1) S&S	 	 	06/14/2011	 	
 	Grandin Sand Plant	 	 	FL	 	 	Contest Penalty	 	 	104(a) Non S&S	 	 	06/15/2011	 	
 	Elkton Quarry	 	 	VA	 	 	Contest Penalty	 	 	104(a) Non S&S	 	 	06/24/2011	 	
 	Dale Quarry	 	 	VA	 	 	Contest Penalty	 	 	104(a) Non S&S	 	 	06/24/2011	 	
 	
Exhibit 99