Vulcan Materials Company For a printer friendly version, click here. Monday, October 30, 2006 VULCAN ANNOUNCES RECORD THIRD QUARTER SALES AND EARNINGS - EARNINGS PER SHARE FROM CONTINUING OPERATIONS UP 49% YEAR-TO-DATE Birmingham, Alabama – October 30, 2006 – Vulcan Materials Company (NYSE:VMC) announced today that third quarter net sales, operating earnings and earnings per share from continuing operations were at record levels. Net sales increased 13 percent while operating earnings and earnings per share increased 25 percent and 18 percent respectively, compared to the third quarter last year. Net sales increased approximately $99 million to $848 million. The average price for aggregates in the third quarter increased 15 percent from the prior year’s third quarter, driving operating earnings and margins higher than last year on 6.6 percent lower shipments. Earnings from continuing operations were $1.45 per diluted share, compared to $1.23 per diluted share in the prior year. The effective tax rate from continuing operations increased to 31.0 percent from 25.8 percent in the prior year due to income tax adjustments that were $0.07 per diluted share less favorable. Earnings per share for the current quarter include $0.03 due to an increase in the carrying value of the ECU earn-out, compared to the $0.06 recorded in the third quarter of 2005 (see Table E). Third quarter net earnings were $1.39 per diluted share and include a $0.06 per diluted share loss from discontinued operations. Don James, Vulcan’s Chairman and Chief Executive Officer, stated, “Sales increased in each of our major end use markets leading to higher operating earnings. Our employees achieved these outstanding results in the face of slower residential construction activity in many markets and some temporary deferrals of highway projects resulting from escalating liquid asphalt costs that sharply exceeded prior estimates for these projects. While the excess supply of single family houses is likely to restrain new construction in many markets into 2007, the recent trend of falling liquid asphalt and diesel costs should bring highway bids back in line with project estimates in the future.” Gross profit increased 20 percent as price increases more than offset the effects of lower volumes and higher costs for liquid asphalt, cement, diesel fuel and electricity. As a percent of net sales, gross profit improved to 32 percent from the prior year’s level of 30 percent. In California, Vulcan’s largest state by revenue, gross profit increased over 40 percent. Earnings growth in California more than offset the effects of lower aggregates volumes due in part to wet weather conditions in the second half of the quarter in Virginia, North Carolina and Illinois. Earnings and margins from asphalt and concrete product lines improved as price increases more than offset lower volumes and the effects of higher costs for liquid asphalt, cement and internally transferred aggregates. Other income decreased approximately $6 million from the prior year’s third quarter due primarily to a smaller increase in the carrying value of the ECU earn-out. The third quarter 2006 increase in the value of the earn-out was $4.7 million, or $0.03 per diluted share. This earn-out agreement is accounted for as a derivative instrument, with any adjustments to the carrying value recorded as other income or charges from continuing operations (Table E). We received the first ECU earn-out payment of approximately $128 million during the third quarter. This earn-out runs for four additional years with total cash receipts capped at $150 million. Last year’s tax rate reflected a reduction in estimated income tax liabilities for prior years and a favorable settlement of federal income tax refund claims representing approximately $0.10 per diluted share. Favorable tax adjustments in 2006 totaled $0.03 per diluted share. Through the first nine months of 2006, net cash provided by operating activities was $364 million, an increase of $90 million from the prior year's amount of $274 million. During the third quarter, the Company purchased 2,238,939 shares of its common stock at a total cos For further information contact Mark Warren (IR) or David Donaldson (Media) at (205) 298-3220.