Vulcan Materials Reports Record Third Quarter Results Earnings from Continuing Operations up 39 Percent

Commenting on the third quarter results and fourth quarteroutlook, Chairman and Chief Executive Officer Don James said, "OurConstruction Materials business achieved the highest quarterly salesand earnings in its history. We are pleased with the underlyingstrength in our markets and the solid pricing gains realized for ourproducts. Volume gains were realized despite the disruptive effects offive hurricanes in the quarter. Going forward, construction activityshould continue to be robust."

During the third quarter, the Company repurchased 795,800 sharesof its common stock at a total cost of approximately $54 million,representing an average cost of $68.01 per share. Year to date, theCompany has repurchased 2,008,438 shares at a total cost ofapproximately $123 million, representing an average cost of $61.30 pershare. The number of shares remaining under the Company's repurchaseauthorization is approximately 6.5 million shares.

Continuing Operations

Third quarter earnings from continuing operations before incometaxes were $173 million, an increase of 24 percent from the prioryear's level. Net sales were a record $749 million, an increase of$100 million, or 15 percent, from the record level reported last year.

The strong increase in sales resulted from sharply higher pricesfor all key products and a 3 percent increase in aggregates shipments.Prices for aggregates in the quarter increased 9 percent as comparedto the same period in the prior year. Sales volume growth was limitedsomewhat by wet weather and the related disruptions in constructionactivity from the hurricanes. Higher prices for aggregates more thanoffset sharp increases in the cost of diesel fuel and higher spendingfor repairs, maintenance, parts and supplies necessary to improverecently acquired plants and to operate at record production levels.Diesel fuel price per gallon increased over 50 percent from the prioryear, reducing pretax earnings by approximately $11 million.

Sales for both asphalt and ready-mixed concrete were up sharply inthe third quarter from the prior year due mostly to significantlyhigher prices. Price increases for both products offset higher costsfor raw materials, including liquid asphalt and cement. Sales volumesfor both products increased versus the prior year, driven by strongdemand in California and Arizona and the addition of an asphaltbusiness acquired in Arizona during the first quarter of this year.

Selling, administrative and general expenses increased $10 millionfrom the prior year's quarter due mostly to the effect of theCompany's performance share incentive plan. Compensation expense underthe plan is influenced by the degree to which business targets areachieved and is affected by stock price, which increased sharply inthe third quarter.

Other income increased $9 million from the prior year's thirdquarter due to an increase in the carrying value of a contingent ECUearn-out agreement included as part of the consideration paid by thebuyer of the Company's Chemicals business. This earn-out is accountedfor as a derivative instrument with future adjustments to the carryingvalue, if any, recorded as other income or charges in continuingoperations.

Interest income increased $5 million from the prior year's thirdquarter due to interest recorded from the settlement of federal taxrefunds, higher returns and higher average balances on short andmedium-term investments.

The effective tax rate on earnings from continuing operations was25.8 percent in the third quarter as compared to 34.2 percent in theprior year's third quarter. The current year's effective tax ratedecreased due principally to a reduction in estimated income taxliabilities for prior years and a favorable settlement of federalrefund claims. In the third quarter of 2004, an increase in thecontingency for uncertain tax positions raised the quarterly effectivetax rate.

All results are unaudited.

Discontinued Operations

On June 7, 2005, the Company closed the sale of its Chemicalsbusiness. The reported loss of $6 million in the quarter was dueprimarily to related exit and disposal costs. In the prior year,earnings were approximately $7 million.

Outlook

According to Mr. James, "Overall demand remains strong andaggregates pricing gains achieved thus far in 2005 provide momentum aswe move into 2006. Our challenge is to continue to achieveproductivity improvements in order to meet increased demand and offsethigher costs for energy and materials. Energy-related costs havebecome particularly acute since Hurricane Katrina in late August. Forthe fourth quarter, we expect diesel fuel costs to increaseapproximately $13 million from last year's fourth quarter.

"Aggregates pricing and volumes are each up approximately 7percent year to date. We expect increases in both price and volume inthe fourth quarter as compared to last year. Our outlook for demand inthe fourth quarter is based on residential construction remaining athigh levels and a continuation of the modest recovery underway inprivate nonresidential construction. The new multi-year highway billpassed by Congress and signed into law by the President enables statesto move forward with significant new projects and sets the stage forsteady growth in highway spending for the coming years.

"In the fourth quarter we expect earnings of $0.64 to $0.84 perdiluted share from continuing operations, assuming normal weatherpatterns. Our fourth quarter guidance does not reflect any futuremarket value adjustment to the ECU earn-out. For the full year, weexpect to earn $3.05 to $3.25 per diluted share from continuingoperations, an increase of 21 to 29 percent from last year. We are inthe midst of our business planning for 2006 and, preliminarily,believe that the expected level of construction activity should leadto continued growth in earnings."

In keeping with past practice, the Company will give quarterly andannual earnings guidance, and will issue press releases to reviseearnings guidance if the Company is reasonably certain that itsearnings per share, on either a quarterly basis or an annual basis,will be outside its last published guidance.

Conference Call

Vulcan will host a broadcast of the quarterly earnings conferencecall scheduled for 10:00 a.m. CDT on Friday, October 28, 2005.Investors and other interested parties may access the teleconferencelive by calling (800) 706-7748 or via the Internet through Vulcan'shome page at vulcanmaterials.com. For international calls dial (617)614-3473. The participant access code is 95260066.

Vulcan Materials Company, a member of the S&P 500 index, is thenation's foremost producer of construction aggregates and a majorproducer of other construction materials.

Certain matters discussed in this release, including expectationsregarding future performance, contain forward-looking statements thatare subject to risks, assumptions and uncertainties that could causeactual results to differ materially from those projected. These risks,assumptions and uncertainties include, but are not limited to, thoseassociated with general business conditions; the timing and amount offederal, state and local funding for infrastructure; the highlycompetitive nature of the construction materials industry; pricing;weather and other natural phenomena; energy costs; costs ofhydrocarbon-based raw materials; increasing healthcare costs; thetiming and amount, if any, of the payments to be received by theCompany under two earn-outs contained in the agreement for thedivestiture of the Company's Chemicals business unit; and other risks,assumptions and uncertainties detailed from time to time in theCompany's SEC reports, including the report on Form 10-K for the year.Forward-looking statements speak only as of the date hereof, andVulcan assumes no obligation to update such statements.
Table A
Vulcan Materials Company
and Subsidiary Companies
Consolidated (Amounts in thousands, except per share data)
Statements of Three Months Ended Nine Months Ended
Earnings September 30 September 30
----------------------- -----------------------
(Condensed and
unaudited) 2005 2004 2005 2004
----------------------------------------------------------------------

Net sales $ 749,367 $ 649,309 $1,934,116 $1,665,906
Delivery revenues 80,649 74,066 206,590 179,775
----------- ----------- ----------- -----------
Total revenues 830,016 723,375 2,140,706 1,845,681

Cost of goods sold 522,111 452,096 1,404,252 1,221,415
Delivery costs 80,649 74,066 206,590 179,775
----------- ----------- ----------- -----------
Cost of revenues 602,760 526,162 1,610,842 1,401,190
----------- ----------- ----------- -----------

Gross profit 227,256 197,213 529,864 444,491
Selling,
administrative and
general expenses 62,387 52,378 169,511 146,977
Other operating
expense (income), net (37) (1,190) 4,173 (6,203)
Other income, net 10,673 1,670 12,907 6,017
----------- ----------- ----------- -----------
Earnings from
continuing operations
before interest and
income taxes 175,579 147,695 369,087 309,734
Interest income 6,484 1,106 12,118 3,654
Interest expense 9,150 8,982 28,023 31,116
----------- ----------- ----------- -----------
Earnings from
continuing operations
before income taxes 172,913 139,819 353,182 282,272
Provision for income
taxes 44,592 47,828 101,475 86,016
----------- ----------- ----------- -----------
Earnings from
continuing operations 128,321 91,991 251,707 196,256
Earnings (loss) on
discontinued
operations, net of
tax (6,105) 6,971 46,407 5,497
----------- ----------- ----------- -----------
Net earnings $ 122,216 $ 98,962 $ 298,114 $ 201,753

======================================================================
Basic earnings (loss)
per share:
Earnings from
continuing
operations $ 1.25 $ 0.90 $ 2.46 $ 1.92
Discontinued
operations (0.06) 0.07 0.45 0.05
----------- ----------- ----------- -----------
Net earnings per share $ 1.19 $ 0.97 $ 2.91 $ 1.97

Diluted earnings (loss)
per share:
Earnings from
continuing
operations $ 1.23 $ 0.89 $ 2.41 $ 1.90
Discontinued
operations (0.06) 0.07 0.45 0.05
----------- ----------- ----------- -----------
Net earnings per
share $ 1.17 $ 0.96 $ 2.86 $ 1.95

======================================================================
Weighted-average
common shares
outstanding:
Basic 102,320 102,502 102,503 102,361
Assuming dilution 104,397 103,659 104,376 103,513
Cash dividends per
share of common stock $ 0.290 $ 0.260 $ 0.870 $ 0.780
Depreciation,
depletion, accretion
and amortization from
continuing operations $ 55,759 $ 52,361 $ 162,944 $ 156,266
Effective tax rate 25.8% 34.2% 28.7% 30.5%

======================================================================




Table B
Vulcan Materials Company
and Subsidiary Companies

(Amounts in thousands)

Consolidated Balance Sheets September December 31 September
(Condensed and unaudited) 30, 2005 2004 30, 2004
---------------------------------- ----------- ----------- -----------

Assets
----------------------------------
Cash and cash equivalents $ 253,594 $ 271,450 $ 159,578
Medium-term investments 192,720 179,210 187,105
Accounts and notes receivable:
Accounts and notes receivable,
gross 540,709 286,809 466,378
Less: Allowance for doubtful
accounts (4,166) (5,196) (9,457)
----------- ----------- -----------
Accounts and notes receivable,
net 536,543 281,613 456,921
Inventories:
Finished products 158,853 158,350 162,357
Raw materials 8,727 6,512 7,579
Products in process 1,525 937 781
Operating supplies and other 16,774 11,385 35,550
----------- ----------- -----------
Inventories 185,879 177,184 206,267
Deferred income taxes 42,446 34,433 35,100
Prepaid expenses 20,643 15,846 24,771
Assets held for sale - 458,223 -
----------- ----------- -----------
Total current assets 1,231,825 1,417,959 1,069,742
Investments and long-term
receivables 6,919 7,226 20,371
Property, plant and equipment:
Property, plant and equipment,
cost 3,429,186 3,264,193 4,227,205
Less: Reserve for depr., depl.,
& amort. (1,838,360) (1,727,700) (2,356,348)
----------- ----------- -----------
Property, plant and equipment,
net 1,590,826 1,536,493 1,870,857
Goodwill 646,833 600,181 579,817
Other assets 178,318 103,274 95,267
----------- ----------- -----------
Total $3,654,721 $3,665,133 $3,636,054
=========== =========== ===========

Liabilities and Shareholders'
Equity
----------------------------------
Current maturities of long-term
debt $ 242,120 $ 3,226 $ 1,302
Notes payable - - 48,000
Trade payables and accruals 146,788 95,312 157,606
Other current liabilities 158,318 139,716 169,485
Liabilities of assets held for
sale - 188,435 -
----------- ----------- -----------
Total current liabilities 547,226 426,689 376,393
Long-term debt 355,308 604,522 607,158
Deferred income taxes 300,432 348,613 341,949
Other noncurrent liabilities 287,870 271,334 268,341
Minority interest - - 95,277
Shareholders' equity 2,163,885 2,013,975 1,946,936
----------- ----------- -----------
Total $3,654,721 $3,665,133 $3,636,054

======================================================================



Table C
Vulcan Materials Company
and Subsidiary Companies

(Amounts in thousands)
Nine Months Ended
September 30
Consolidated Statements of Cash Flows -----------------------
(Condensed and unaudited) 2005 2004
---------------------------------------------- ----------- -----------

Operating Activities
----------------------------------------------
Net earnings $ 298,114 $ 201,753
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation, depletion, accretion and
amortization 163,392 191,047
Net gain on disposal of property, plant, &
equipment (4,219) (11,150)
Contributions to pension plans (28,847) (712)
Increase in assets before effects of
business acquisitions and dispositions (199,154) (100,420)
Increase in liabilities before effects of
business acquisitions and dispositions 35,655 77,856
Other, net 9,197 5,257
----------- -----------
Net cash provided by operating activities 274,138 363,631
----------- -----------

Investing Activities
----------------------------------------------
Purchases of property, plant and equipment (151,210) (142,017)
Proceeds from sale of property, plant and
equipment 5,069 26,665
Proceeds from sale of Chemicals business, net
of cash transaction fees 209,327 -
Payment for partner's interest in consolidated
joint venture (62,701) -
Payment for business acquisitions, net of
acquired cash (93,314) (29,433)
Purchases of medium-term investments (283,765) (293,598)
Proceeds from sales and maturities of
medium-term investments 270,255 380,387
Change in investments and long-term
receivables 620 661
----------- -----------
Net cash used for investing activities (105,719) (57,335)
----------- -----------

Financing Activities
----------------------------------------------
Net borrowings - commercial paper and bank
lines of credit - 19,000
Payment of short-term debt and current
maturities (1,291) (249,542)
Payment of long-term debt (8,253) (195)
Purchases of common stock (123,125) -
Dividends paid (89,046) (79,684)
Proceeds from exercise of stock options 35,394 14,551
Other, net 46 1,383
----------- -----------
Net cash used for financing activities (186,275) (294,487)
----------- -----------

Net increase (decrease) in cash and cash
equivalents (17,856) 11,809
Cash and cash equivalents at beginning of
period 271,450 147,769
----------- -----------
Cash and cash equivalents at end of period $ 253,594 $ 159,578

======================================================================



Table D
1. Supplemental Cash Flow Information

Supplemental information referable to the Condensed Consolidated
Statements of Cash Flows for the nine months ended September 30 is
summarized below (amounts in thousands):
2005 2004
---------------------------------------------- ----------- -----------

Supplemental Disclosure of Cash Flow
Information
----------------------------------------------
Cash paid during the period for:
Interest, net of amount capitalized $ 26,170 $ 33,045
Income taxes 173,053 58,635

Supplemental Schedule Of Noncash Investing and
Financing Activities
----------------------------------------------
Liabilities assumed in business acquisitions 4,709 -
Noncash proceeds from the sale of the
Chemicals business:
Earn-outs 128,167 -
Working capital adjustments 14,213 -