Vulcan Announces Fourth Quarter 2013 Earnings Aggregates Shipments Increase 7% and Aggregates Gross Profit Margin Expands 390 Basis Points

Full Year EBITDA Exceeds $500 million

BIRMINGHAM, Ala., Feb. 6, 2014 /PRNewswire/ -- Vulcan Materials Company (NYSE: VMC), the nation's largest producer of construction aggregates, today announced results for the fourth quarter ending December 31, 2013.

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Fourth Quarter Results Summary

  • Earnings from continuing operations were $0.08 per diluted share versus $0.03 per share last year.
  • Fourth quarter Adjusted EBITDA was $129 million versus $90 million in the prior year.
  • Net sales increased $78 million, or 14 percent, versus the prior year's fourth quarter, as volumes continued to improve.
  • Gross profit improved $38 million, or 48 percent, primarily on the strength of the volume growth and operating leverage in aggregates.
  • Aggregates gross profit and profit margin increased $30 million and 390 basis points, respectively.
    • Shipments increased 7 percent
    • Pricing increased 3.5 percent
  • In total, non-aggregates gross profit and profit margin improved $8 million and 330 basis points from the prior year due mostly to double-digit growth in unit shipments in each segment.
  • Selling, Administrative and General (SAG) expenses were reduced $3 million from the prior year.

Don James, Chairman and Chief Executive Officer, said, "Demand for our products continues to benefit from a recovery in private construction activity, particularly residential construction.   As a result, each of our operating segments reported earnings improvement in the fourth quarter.  In particular, our Aggregates segment performed very well – reflecting the strong earnings leverage to volume growth. Higher aggregates pricing and shipments coupled with lower unit cost of sales led to a 37 percent improvement in segment earnings and a 390 basis point improvement in aggregates gross profit margin."

Commentary on Fourth Quarter 2013 Segment Results
Aggregates segment revenues were $470 million and gross profit was $112 million, an increase of 14 percent and 37 percent, respectively, versus the prior year.  Cash gross profit was $4.62 per ton of aggregates, an increase of 12 percent versus the prior year's fourth quarter and 30 percent above the level at prior peak volumes in 2005.   Many of the Company's key markets realized double-digit volume growth versus the prior year, most notably Arizona, California, Florida, Georgia, North Carolina and Texas.  Similarly, the average sales price for aggregates increased from the prior year in most of the Company's key markets, led by growth in Alabama, California, Florida, Texas, and along the Gulf Coast. 

Shipments in each of our non-aggregates segments increased versus the prior year, leading to an earnings improvement of $8 million in total.  Concrete segment gross profit improved $3 million, due mostly to a 15 percent increase in unit shipments.  Asphalt mix segment gross profit increased slightly from the prior year's fourth quarter.  Cement segment gross profit improved $4 million versus the prior year, due to increased volumes and lower operating costs.

Full Year Highlights

  • Earnings from continuing operations were $0.16 per diluted share versus a loss of $0.42 per diluted share in the prior year.
  • Adjusted EBITDA was $468 million, an increase of $57 million from the prior year.
  • Gross profit increased $93 million and gross profit margin improved 230 basis points with each operating segment reporting higher earnings.
  • Aggregates segment gross profit increased $61 million and gross profit margins improved 140 basis points.
    • Aggregates volume increased 3.5 percent.
    • Aggregates pricing increased 3.4 percent.
  • Selling, Administrative and General (SAG) expenses were flat with the prior year.
  • Cash earnings were $292 million, an increase of 39 percent from the prior year.
  • Capital spending was $158 million, excluding $117 million for the purchase of 136 million tons of reserves in California that previously were leased.

Regarding the Company's full year results, Mr. James stated, "Growth in the private end markets, particularly residential, continued to drive increased construction activity and demand for our products in 2013.  As expected, we realized strong volume growth across all our segments in the second half of 2013.  Through our disciplined approach to pricing and cost control, we leveraged volume growth to achieve significant improvements in earnings and profitability.  We improved the unit profitability in aggregates, expanded our gross profit margin, and improved earnings from continuing operations by $0.58 per diluted share. 

"Our cash generation from operating activities increased sharply in 2013 due in part to improved earnings.  As we look ahead to 2014, the operating leverage in our aggregates business sets the stage for even stronger earnings growth and cash generation as volumes continue to grow." 

Update on Initiatives
Mr. James continued, "Upon closing of the previously announced sale of our Florida cement and concrete operations for $720 million, which is expected to occur in the first quarter of 2014, we will have delivered on our commitments made two years ago to enhance profitability, divest non-strategic assets and reduce debt.  Since that time, we will have increased Adjusted EBITDA by more than $110 million, generated more than $1 billion from the sales of non-strategic assets and future sales production agreements, and reduced total debt approximately $800 million.  In addition, we have continued to strengthen our core aggregates business through the acquisition of reserves and quarries in California, Georgia, Texas and Virginia.

"I would like to thank our employees for their dedication in achieving these goals.  Their relentless effort has strengthened our competitive advantage and positioned us for significant earnings improvement as our markets continue to recover and grow."

Attached is a table that reflects the Company's full year 2013 operating results assuming both the sale of its Florida cement and concrete operations and the tender offer to purchase up to $500 million of senior notes had been completed on January 1, 2013.  Refer to Reconciliation of Non-GAAP Measures - Table G.  This information will be included in a Form 8-K filing upon closing of the Florida cement and concrete sale transaction. 

2014 Outlook
Regarding the Company's outlook, Mr. James stated, "External industry forecasts suggest a recovery in U.S. construction activity is underway – and we concur.  In 2014, we expect U.S. aggregates demand in each of the major end markets – residential, non-residential buildings, highways and other public infrastructure – to increase over the prior year for the first time since 2004.  Even better, we expect growth in Vulcan-served markets to outperform other markets, led by continued improvement in private construction activity.  Additionally, we continue to track a number of large-scale transportation and industrial projects in our markets, which we are well positioned to supply.  While the timing of these large projects can be difficult to forecast, we expect these projects to play a meaningful role in our full year volumes again in 2014.  As a result, we expect aggregates shipments in 2014 to increase 4 to 7 percent from the prior year.  We expect this year-over-year volume growth to occur across most of our key markets and provide positive momentum for broad-based price growth.  Overall, we expect the average freight-adjusted selling price to increase 3 to 5 percent, with the timing and rate of price increases varying across our markets.  This top-line growth in aggregates coupled with tight management of our production costs should result in further margin expansion in aggregates.       

"In our asphalt and concrete segments, gross profit improved in 2013 versus the prior year, and we expect improvements in both segments, on a comparable basis, again in 2014.  Full year volume and price are expected to improve in both segments, driven mostly by increased private construction activity. 

"SAG expenses in 2014 are expected to be in line with the prior year, allowing us to leverage our overhead structure with expected higher sales.

"Our confidence in a sustained multi-year recovery in demand for aggregates continues to grow.  Our markets are recovering off trough levels of demand and appear to be outpacing other markets.  To support this level of future shipments for 2014 and beyond and to improve further our production costs and operating efficiencies, we anticipate increasing our capital spending in 2014 to approximately $220 million.

"We are excited about our future as the leading aggregates supplier in the U.S.  We have enhanced our leading reserve position in attractive, high-growth markets in California, Florida, Georgia, Texas and Virginia, and our earnings leverage to volume growth is better today than at the prior peak.  The changes we have made in our organizational structure and our technology platforms will allow us to achieve additional leverage as volumes recover.  We remain committed to improving our operating results, further strengthening our balance sheet, unlocking capital for more productive uses, and continuing to create value for our shareholders." 

Conference Call
Vulcan will host a conference call at 10:00 a.m. CT on February 6, 2014.  Investors and other interested parties can access the live webcast via the Company's website at www.vulcanmaterials.com.  To participate by phone within the U.S., call 855-877-0343 approximately 10 minutes before the scheduled start.  International participants can dial 678-509-8772.  The conference identification is 50941919.  The webcast will be recorded and available for replay at the Company's website approximately two hours after the call.

Vulcan Materials Company, a member of the S&P 500 Index, is the nation's largest producer of construction aggregates and a major producer of asphalt mix and concrete.

FORWARD-LOOKING STATEMENT DISCLAIMER 
This document contains forward-looking statements.  Statements that are not historical fact, including statements about Vulcan's beliefs and expectations, are forward-looking statements. Generally, these statements relate to future financial performance, results of operations, business plans or strategies, projected or anticipated revenues, expenses, earnings (including EBITDA and other measures), dividend policy, shipment volumes, pricing, levels of capital expenditures, intended cost reductions and cost savings, anticipated profit improvements and/or planned divestitures and asset sales.  These forward-looking statements are sometimes identified by the use of terms and phrases such as "believe," "should," "would," "expect," "project," "estimate," "anticipate," "intend," "plan," "will," "can," "may" or similar expressions elsewhere in this document.  These statements are subject to numerous risks, uncertainties, and assumptions, including but not limited to general business conditions, competitive factors, pricing, energy costs, and other risks and uncertainties discussed in the reports Vulcan periodically files with the SEC.

Forward-looking statements are not guarantees of future performance and actual results, developments, and business decisions may vary significantly from those expressed in or implied by the forward-looking statements.  The following risks related to Vulcan's business, among others, could cause actual results to differ materially from those described in the forward-looking statements: risks that Vulcan's intentions, plans and results with respect to cost reductions, profit enhancements and asset sales, as well as streamlining and other strategic actions adopted by Vulcan, will not be able to be realized to the desired degree or within the desired time period and that the results thereof will differ from those anticipated or desired; uncertainties as to the timing and valuations that may be realized or attainable with respect to planned asset sales; those associated with general economic and business conditions; the timing and amount of federal, state and local funding for infrastructure; the effects of the sequestration on demand for our products in markets that may be subject to decreases in federal spending; changes in Vulcan's effective tax rate; the increasing reliance on technology infrastructure for Vulcan's ticketing, procurement, financial statements and other processes could adversely affect operations in the event such infrastructure does not work as intended or experiences technical difficulties; the impact of the state of the global economy on Vulcan's businesses and financial condition and access to capital markets; changes in the level of spending for private residential and private 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 Vulcan's 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 incurred by Vulcan; changes in interest rates; the impact of Vulcan's below investment grade debt rating on Vulcan's cost of capital; volatility in pension plan asset values and liabilities which may require cash contributions to the pension plans; the impact of environmental clean-up costs and other liabilities relating to previously divested businesses; Vulcan's ability to secure and permit aggregates reserves in strategically located areas; Vulcan's ability to manage and successfully integrate acquisitions; the potential of goodwill or long-lived asset impairment; 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 the reports filed by Vulcan with the SEC. All forward-looking statements in this communication are qualified in their entirety by this cautionary statement.  Vulcan disclaims and does not undertake any obligation to update or revise any forward-looking statement in this document except as required by law.

 

 











Table A

Vulcan Materials Company









and Subsidiary Companies













(Amounts and shares in thousands, except per share data)





Three Months Ended


Twelve Months Ended

Consolidated Statements of Earnings


December 31


December 31

(Condensed and unaudited)


2013


2012


2013


2012

Net sales


$652,882


$574,885


$2,628,696


$2,411,243

Delivery revenues


27,364


33,546


142,013


156,067

Total revenues


680,246


608,431


2,770,709


2,567,310

Cost of goods sold


535,535


495,679


2,201,816


2,077,217

Delivery costs


27,364


33,546


142,013


156,067

Cost of revenues


562,899


529,225


2,343,829


2,233,284

Gross profit


117,347


79,206


426,880


334,026

Selling, administrative and general expenses


64,016


66,873


259,427


259,140

Gain on sale of property, plant & equipment









and businesses, net


2,381


46,768


39,250


68,455

Restructuring charges


-


(540)


(1,509)


(9,557)

Exchange offer costs


-


(49)


-


(43,380)

Other operating expense, net


(1,883)


(2,980)


(14,790)


(5,623)

Operating earnings


53,829


55,532


190,404


84,781

Other nonoperating income, net


2,570


2,531


7,538


6,727

Interest expense, net


48,888


52,928


201,645


211,926

Earnings (loss) from continuing operations









before income taxes


7,511


5,135


(3,703)


(120,418)

Provision for (benefit from) income taxes


(2,585)


647


(24,459)


(66,492)

Earnings (loss) from continuing operations


10,096


4,488


20,756


(53,926)

Earnings (loss) on discontinued operations, net of taxes


(1,013)


(1,005)


3,626


1,333

Net earnings (loss)


$9,083


$3,483


$24,382


($52,593)

Basic earnings (loss) per share









Continuing operations


$0.08


$0.03


$0.16


($0.42)

Discontinued operations


($0.01)


$0.00


$0.03


$0.01

Net earnings (loss)


$0.07


$0.03


$0.19


($0.41)












Diluted earnings (loss) per share









Continuing operations


$0.08


$0.03


$0.16


($0.42)

Discontinued operations


($0.01)


$0.00


$0.03


$0.01

Net earnings (loss)


$0.07


$0.03


$0.19


($0.41)












Weighted-average common shares outstanding









Basic


130,383


129,954


130,272


129,745

Assuming dilution


131,650


131,008


131,467


129,745

Dividends declared per share


$0.01


$0.01


$0.04


$0.04

Depreciation, depletion, accretion and amortization


$74,235


$78,568


$305,112


$331,959

Effective tax rate from continuing operations


-34.4%


12.6%


660.5%


55.2%












 







Table B

Vulcan Materials Company





and Subsidiary Companies








(Amounts in thousands, except per share data)

Consolidated Balance Sheets


December 31


December 31

(Condensed and unaudited)


2013


2012

Assets





Cash and cash equivalents


$198,201


$275,478

Accounts and notes receivable





Accounts and notes receivable, gross


344,475


303,178

Less: Allowance for doubtful accounts


(4,854)


(6,198)

Accounts and notes receivable, net


339,621


296,980

Inventories





Finished products


270,603


262,886

Raw materials


29,996


27,758

Products in process


6,613


5,963

Operating supplies and other


37,394


38,415

Inventories


344,606


335,022

Current deferred income taxes


40,423


40,696

Prepaid expenses


22,549


21,713

Assets held for sale


10,559


15,083

Total current assets


955,959


984,972

Investments and long-term receivables


42,387


42,081

Property, plant & equipment





Property, plant & equipment, cost


6,933,602


6,666,617

Reserve for depreciation, depletion & amortization


(3,621,585)


(3,507,432)

Property, plant & equipment, net


3,312,017


3,159,185

Goodwill


3,081,521


3,086,716

Other intangible assets, net


697,578


692,532

Other noncurrent assets


174,144


161,113

Total assets


$8,263,606


$8,126,599

Liabilities





Current maturities of long-term debt


$170


$150,602

Trade payables and accruals


143,807


113,337

Other current liabilities


154,620


171,671

Liabilities of assets held for sale


-


801

Total current liabilities


298,597


436,411

Long-term debt


2,522,243


2,526,401

Noncurrent deferred income taxes


701,075


657,367

Deferred revenue


224,743


73,583

Other noncurrent liabilities


578,842


671,775

Total liabilities


4,325,500


4,365,537

Equity





Common stock, $1 par value


130,200


129,721

Capital in excess of par value


2,611,703


2,580,209

Retained earnings


1,295,834


1,276,649

Accumulated other comprehensive loss


(99,631)


(225,517)

Total equity


3,938,106


3,761,062

Total liabilities and equity


$8,263,606


$8,126,599



 








Table C

Vulcan Materials Company





and Subsidiary Companies










(Amounts in thousands)






Twelve Months Ended

Consolidated Statements of Cash Flows


December 31

(Condensed and unaudited)


2013


2012

Operating Activities





Net earnings (loss)


$24,382


($52,593)

Adjustments to reconcile net earnings to net cash provided by operating activities




Depreciation, depletion, accretion and amortization


305,112


331,959

Net gain on sale of property, plant & equipment and businesses


(50,978)


(78,654)

Proceeds from sale of future production, net of transaction costs


153,095


73,583

Contributions to pension plans


(4,855)


(4,509)

Share-based compensation


22,093


17,474

Deferred tax provision


(35,063)


(69,830)

Changes in assets and liabilities before initial





effects of business acquisitions and dispositions


(53,945)


20,378

Other, net


1,121


667

Net cash provided by operating activities


360,962


238,475

Investing Activities





Purchases of property, plant & equipment


(275,380)


(93,357)

Proceeds from sale of property, plant & equipment


17,576


80,829

Proceeds from sale of businesses, net of transaction costs


51,604


21,166

Payment for businesses acquired, net of acquired cash


(89,951)


-

Other, net


(39)


1,761

Net cash provided by (used for) investing activities


(296,190)


10,399

Financing Activities





Proceeds from line of credit


156,000


-

Payment of current maturities of long-term debt & line of credit


(306,602)


(134,780)

Proceeds from issuance of common stock


3,821


-

Dividends paid


(5,191)


(5,183)

Proceeds from exercise of stock options


9,762


10,462

Other, net


161


266

Net cash used for financing activities


(142,049)


(129,235)

Net increase (decrease) in cash and cash equivalents


(77,277)


119,639

Cash and cash equivalents at beginning of year


275,478


155,839

Cash and cash equivalents at end of year


$198,201


$275,478









 














Table D

Segment Financial Data and Unit Shipments












(Amounts in thousands, except per unit data)







Three Months Ended


Twelve Months Ended







December 31


December 31







2013


2012


2013


2012

Total Revenues










Aggregates (a)










Segment revenues



$470,376


$411,496


$1,899,020


$1,729,419

Intersegment sales



(50,804)


(35,311)


(185,385)


(148,230)

Net sales



419,572


376,185


1,713,635


1,581,189

Concrete (b)










Segment revenues



121,813


103,085


471,748


406,370

Intersegment sales



-


-


-


-

Net sales



121,813


103,085


471,748


406,370

Asphalt Mix










Segment revenues



98,268


84,860


393,356


378,126

Intersegment sales



-


-


-


-

Net sales



98,268


84,860


393,356


378,126

Cement (c)










Segment revenues



25,657


20,998


97,298


84,567

Intersegment sales



(12,428)


(10,243)


(47,341)


(39,009)

Net sales



13,229


10,755


49,957


45,558

Totals











Net sales



652,882


574,885


2,628,696


2,411,243

Delivery revenues



27,364


33,546


142,013


156,067

Total revenues



$680,246


$608,431


$2,770,709


$2,567,310

Gross Profit










Aggregates



$111,606


$81,332


$413,301


$352,100

Concrete



(4,996)


(8,384)


(24,774)


(38,234)

Asphalt Mix



7,944


7,472


32,704


22,970

Cement




2,793


(1,214)


5,649


(2,810)

Total




$117,347


$79,206


$426,880


$334,026

Depreciation, Depletion, Accretion and Amortization






Aggregates



$53,577


$57,044


$222,812


$240,704

Concrete



8,457


9,211


32,996


41,316

Asphalt Mix



2,297


2,097


8,697


8,687

Cement




4,335


4,508


18,093


18,055

Other





5,569


5,708


22,514


23,197

Total




$74,235


$78,568


$305,112


$331,959

Unit Shipments










Aggregates customer tons (d)



32,865


30,963


134,516


130,520

Internal tons (e)



2,871


2,441


11,409


10,440

Aggregates - tons



35,736


33,404


145,925


140,960

Ready-mixed concrete - cubic yards


1,240


1,075


4,798


4,223

Asphalt Mix - tons



1,665


1,493


6,869


6,701



























Cement customer tons



137


114


517


442

Internal tons (e)



141


130


556


497

Cement - tons



278


244


1,073


939

Average Unit Sales Price (including internal sales)










Aggregates (freight-adjusted) (f)



$10.82


$10.45


$10.80


$10.44

Ready-mixed concrete



$93.12


$91.38


$93.10


$92.19

Asphalt Mix



$54.93


$56.07


$54.83


$55.33

Cement




$84.73


$77.20


$83.05


$77.77



(a)

Includes crushed stone, sand and gravel, sand, other aggregates, as well as transportation and service revenues associated with the aggregates business.

(b)

Includes ready-mixed concrete, concrete block, precast concrete, as well as building materials purchased for resale.

(c)

Includes cement and calcium products.

(d)

Includes tons marketed and sold on behalf of a third-party pursuant to a volumetric production payment (VPP) agreement.

(e)

Represents tons shipped primarily to our downstream operations (i.e., asphalt mix and ready-mixed concrete). Sales from internal shipments are eliminated in net sales presented above and in the accompanying Condensed Consolidated Statements of Earnings.

(f)

Freight-adjusted sales price is calculated as total sales dollars less freight to remote distribution sites divided by total sales units excluding third-party VPP tons.










 
















Table E


1. Supplemental Cash Flow Information





Supplemental information referable to the Condensed Consolidated Statements of Cash Flows is summarized below:

































(Amounts in thousands)














Twelve Months Ended














December 31














2013


2012


Cash Payments









Interest (exclusive of amount capitalized)





$196,794


$207,745


Income taxes





30,938


20,374


















Noncash Investing and Financing Activities








Liabilities assumed in business acquisition





232


-


Accrued liabilities for purchases of property, plant & equipment




18,864


9,627


















2. Reconciliation of Non-GAAP Measures








Generally Accepted Accounting Principles (GAAP) does not define "free cash flow," "Aggregates segment cash gross profit," "Earnings Before Interest, Taxes, Depreciation and Amortization" (EBITDA) and "cash earnings." Thus, free cash flow should not be considered as an alternative to net cash provided by operating activities or any other liquidity measure defined by GAAP. Likewise, aggregates segment cash gross profit, EBITDA and cash earnings should not be considered as alternatives to earnings measures defined by GAAP. We present these metrics for the convenience of investment professionals who use such metrics in their analyses, 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, Aggregates segment cash gross profit, EBITDA, cash earnings and other such measures to assess liquidity and the operating performance of our various business units and the consolidated company. Additionally, we adjust EBITDA for certain items to provide a more consistent comparison of performance from period to period. We do not use these metrics as a measure to allocate resources. Reconciliations of these metrics to their nearest GAAP measures are presented below:


Additionally, we have presented in Table G the impact of the Florida area cement and concrete divestiture as well as the debt purchase to our 2013 full year operating results as if these transactions had occurred on January 1, 2013. This information is provided to enable the reader to isolate the impact of these transactions.



Free Cash Flow

Free cash flow deducts purchases of property, plant & equipment from net cash provided by operating activities.










(Amounts in thousands)










Twelve Months Ended










December 31










2013


2012

Net cash provided by operating activities


$360,962


$238,475

Purchases of property, plant & equipment


(275,380)


(93,357)

Free cash flow


$85,582


$145,118













Aggregates Segment Cash Gross Profit





Aggregates segment cash gross profit adds back noncash charges for depreciation, depletion, accretion and amortization (DDA&A) to Aggregates segment gross profit.






(Amounts in thousands)






Three Months Ended


Twelve Months Ended






December 31


December 31






2013


2012


2013


2012

Aggregates segment









Gross profit


$111,606


$81,332


$413,301


$352,100

DDA&A


53,577


57,044


222,812


240,704


Aggregates segment cash gross profit


$165,183


$138,376


$636,113


$592,804













 

 

 

















Table F


Reconciliation of Non-GAAP Measures (Continued)



























EBITDA, Cash Earnings and Adjusted EBITDA

























EBITDA is an acronym for Earnings Before Interest, Taxes, Depreciation and Amortization.  Cash earnings adjusts EBITDA for net interest expense and current taxes.  













(Amounts in thousands)











Three Months Ended


Twelve Months Ended











December 31


December 31











2013


2012


2013


2012


Reconciliation of Net Earnings to EBITDA and Cash Earnings



























Net earnings (loss)




$9,083


$3,483


$24,382


($52,593)


Provision for (benefit from) income taxes




(2,585)


647


(24,459)


(66,492)


Interest expense, net




48,888


52,928


201,645


211,926


(Earnings) loss on discontinued operations, net of taxes




1,013


1,005


(3,626)


(1,333)


EBIT




56,399


58,063


197,942


91,508


Plus: Depreciation, depletion, accretion and amortization




74,235


78,568


305,112


331,959


EBITDA




$130,634


$136,631


$503,054


$423,467


Less: Interest expense, net




(48,888)


(52,928)


(201,645)


(211,926)


         Current taxes




(7,403)


(3,983)


(9,673)


(1,913)


Cash earnings




$74,343


$79,720


$291,736


$209,628



















Adjusted EBITDA and Adjusted EBIT





























EBITDA




$130,634


$136,631


$503,054


$423,467


Gain on sale of real estate and businesses




(1,377)


(46,801)


(36,759)


(65,122)


Restructuring charges




-


540


1,509


9,557


Exchange offer costs




-


49


-


43,380


Adjusted EBITDA




$129,257


$90,419


$467,804


$411,282


Less: Depreciation, depletion, accretion and amortization




74,235


78,568


305,112


331,959


Adjusted EBIT




$55,022


$11,851


$162,692


$79,323


































EBITDA Bridge 


Three Months Ended



Twelve Months Ended






(Amounts in millions)


December 31



December 31






2012 Actual EBITDA


$137



$423






Plus:

Gain on sale of real estate and businesses


(47)



(65)







Restructuring charges


1



10







Exchange offer costs


-



43






2012 Adjusted EBITDA


91



411


















Increase / (Decrease) due to











Aggregates: Volumes


14



30






                     Selling prices


13



53






                     Costs and other items


-



(39)






Concrete


2



5






Asphalt Mix


-



10






Cement


4



8






Selling, administrative and general expenses


3



-






Other


3



(10)






2013 Adjusted EBITDA


130



468


















Plus:

Gain on sale of real estate and businesses


1



37







Restructuring charges


-



(2)






2013 Actual EBITDA


$131



$503






































 











Table G














Reconciliation of Non-GAAP Measures (Continued)
















2013 Results Adjusted for Divestiture and Debt Purchase



















(Amounts and shares in thousands, except per share data)



Consolidated Statements of Earnings







Debt Purchase





(Condensed and unaudited)



As Reported

(1)

Divestiture

(2)

(3)

Adjusted

(4)














Net sales



$2,628,696


$172,963




$2,455,733



Delivery revenues



142,013


-




142,013



Total revenues



2,770,709


172,963




$2,597,746



Cost of goods sold



2,201,816


194,761




2,007,055



Delivery costs



142,013


-




142,013



Cost of revenues



2,343,829


194,761




2,149,068



Gross profit



426,880


(21,798)




448,678



Selling, administrative and general expenses


259,427


9,386




250,041



Gain on sale of property, plant & equipment











and businesses, net



39,250


-




39,250



Restructuring charges



(1,509)


-




(1,509)



Other operating expense, net



(14,790)


(2,889)




(11,901)



Operating earnings



190,404


(34,073)




224,477



Other nonoperating income, net


7,538


-




7,538



Interest expense (income), net


201,645


-


(32,800)


168,845



Earnings (loss) from continuing operations











before income taxes



(3,703)


(34,073)


32,800


63,170



Provision for (benefit from) income taxes


(24,459)


(12,852)


12,074


467



Earnings (loss) from continuing operations


$20,756


($21,221)


$20,726


$62,703















Basic earnings per share - continuing operations


$0.16






$0.48



Diluted earnings per share - continuing operations


$0.16






$0.48















Weighted-average common shares outstanding











Basic



130,272






130,272



Assuming dilution



131,467






131,467















Depreciation, depletion, accretion and amortization


$305,112


$36,025




$269,087



(1)

Represents results of operations for the year ended December 31, 2013 as reported in Table A.

(2)

Represents the results of operations of the Florida area cement and concrete businesses assuming the divestiture occurred on January 1, 2013.  Net sales include adjustments for recurring intercompany sales between the Company and the divested operations that were previously eliminated in consolidation.  Tax effects have been determined based on the statutory rates in effect during the period.



(3)

Represents the reduction in interest expense resulting from the use of proceeds to retire $500 million face value of debt assuming the debt purchase occurred on January 1, 2013. 


(4)

Represents the results of operations after adjustments for the divestiture and debt purchase assuming the transactions occurred on January 1, 2013.

 

SOURCE Vulcan Materials Company



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