UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
11-K
ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For
the Fiscal Year Ended December 31, 2009
Commission
File Number: 001-33841
VULCAN
MATERIALS COMPANY
401(k)
AND PROFIT SHARING RETIREMENT PLAN
(Full
title of the Plan)
VULCAN
MATERIALS COMPANY
(Name of
issuer of the securities held pursuant to the Plan)
1200
Urban Center Drive
Birmingham,
Alabama 35242
(205)
298-3000
(Address
of issuer’s principal executive offices and address of the Plan)
Vulcan
Materials Company
401(k)
and Profit Sharing Retirement Plan
Financial
Statements as of December 31, 2009 and 2008
for
the Year Ended December 31, 2009,
Supplemental
Schedule as of December 31, 2009,
and
Report of Independent Registered Public Accounting Firm
VULCAN
MATERIALS COMPANY
401(k)
AND PROFIT SHARING PLAN
INDEX
DECEMBER 31,
2009 AND 2008
|
Page(s)
|
Report of Independent Registered
Accounting Firm
|
1
|
|
|
Financial
Statements
|
|
Statements of Net Assets Available
for Benefits as of December 31, 2009 and 2008
|
2
|
Statement of Changes in Net Assets
Available for Benefits for the year ended December 31,
2009
|
3
|
Notes to Financial
Statements
|
4 - 14
|
|
|
Supplemental
Schedule
|
|
Schedule of Assets (Held at End of
Year) Schedule H, line 4(i) as of December 31, 2009
|
15
|
Note: Other schedules required by 29 CFR
2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 have been
omitted because they are not applicable.
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Trustees and Participants of
Vulcan
Materials Company 401(k) and Profit
Sharing
Retirement Plan
We have
audited the accompanying statements of net assets available for benefits of
Vulcan Materials Company 401(k) and Profit Sharing Retirement Plan (the "Plan")
as of December 31, 2009 and 2008, and the related statement of changes in net
assets available for benefits for the year ended December 31, 2009. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Plan is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Plan's internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our
opinion, such financial statements present fairly, in all material respects, the
net assets available for benefits of the Plan as of December 31, 2009 and 2008,
and the changes in net assets available for benefits for the year ended December
31, 2009 in conformity with accounting principles generally accepted in the
United States of America.
Our
audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
(held at end of year) as of December 31, 2009, is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This schedule is the
responsibility of the Plan's management. Such schedule has been subjected
to the auditing procedures applied in our audit of the basic 2009 financial
statements and, in our opinion, is fairly stated in all material respects when
considered in relation to the basic financial statements taken as a
whole.
/s/DELOITTE
& TOUCHE LLP
Birmingham,
Alabama
June 28,
2010
VULCAN
MATERIALS COMPANY 401(k) AND PROFIT SHARING
RETIREMENT
PLAN
STATEMENTS
OF NET ASSETS AVAILABLE FOR BENEFITS
AS
OF DECEMBER 31, 2009 AND 2008
|
|
2009
|
|
|
2008
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
in Vulcan Materials Company
|
|
|
|
|
|
|
Retirement
Savings Trust, at fair value
|
|
$ |
185,863,411 |
|
|
$ |
179,301,960 |
|
Participant
loans
|
|
|
13,385,835 |
|
|
|
14,344,347 |
|
Employer
contributions receivable
|
|
|
3,600,419 |
|
|
|
4,186,015 |
|
|
|
|
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR BENEFITS — At fair value
|
|
|
202,849,665 |
|
|
|
197,832,322 |
|
|
|
|
|
|
|
|
|
|
Adjustment
from fair value to contract value for fully benefit-responsive investment
contracts
|
|
|
(182,253 |
) |
|
|
24,207 |
|
|
|
|
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR BENEFITS
|
|
$ |
202,667,412 |
|
|
$ |
197,856,529 |
|
See notes
to financial statements.
VULCAN
MATERIALS COMPANY 401(k) AND PROFIT SHARING
RETIREMENT
PLAN
STATEMENT
OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR
THE YEAR ENDED DECEMBER 31, 2009
ADDITIONS
TO NET ASSETS:
|
|
|
|
|
|
|
|
Investment
income from interest in Vulcan Materials Company Retirement Savings
Trust
|
|
$ |
19,728,718 |
|
Participant
loan interest income
|
|
|
853,516 |
|
|
|
|
|
|
Contributions:
|
|
|
|
|
Participants
|
|
|
7,257,143 |
|
Employer
|
|
|
7,257,727 |
|
|
|
|
|
|
Total
contributions
|
|
|
14,514,870 |
|
|
|
|
|
|
Total
additions to net assets
|
|
|
35,097,104 |
|
|
|
|
|
|
DEDUCTIONS
FROM NET ASSETS:
|
|
|
|
|
|
|
|
|
|
Withdrawals
by participants
|
|
|
30,195,826 |
|
|
|
|
|
|
Transfer
of participants' investment accounts to other Vulcan Materials Company
plans
|
|
|
90,395 |
|
|
|
|
|
|
Total
deductions from net assets
|
|
|
30,286,221 |
|
|
|
|
|
|
NET
INCREASE
|
|
|
4,810,883 |
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR BENEFITS:
|
|
|
|
|
|
|
|
|
|
Beginning
of year
|
|
|
197,856,529 |
|
|
|
|
|
|
End
of year
|
|
$ |
202,667,412 |
|
See notes
to financial statements.
VULCAN
MATERIALS COMPANY 401(k) AND PROFIT SHARING RETIREMENT PLAN
NOTES
TO FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2009 AND 2008, AND FOR THE YEAR ENDED DECEMBER 31,
2009
1.
|
DESCRIPTION
OF THE PLAN
|
General — The Vulcan Materials
Company 401(k) and Profit Sharing Retirement Plan (the “Plan”), a defined
contribution employee benefit plan established effective July 15, 2007, provides
for accumulation of savings, including ownership of common stock of Vulcan
Materials Company (the “Company”), for all qualified employees of the Company
hired on or after July 15, 2007.
The
Company has designated a portion of the Plan consisting of the Vulcan Materials
Company common stock fund as an Employee Stock Ownership Plan (ESOP). The ESOP
fund allows a participant to elect to have the dividends on Vulcan Materials
Company common stock reinvested in the Company’s common stock or paid to the
participant in cash.
A
participant may transfer between the Company’s divisions. In these instances,
the net assets of the participant’s account will be transferred between the
other defined contribution employee benefit plans that participate in the Vulcan
Materials Company Retirement Savings Trust (the “Master Trust”).
All
assets of the Plan are held by The Northern Trust Company of Chicago, Illinois
(the “Trustee”). Hewitt Associates, LLC (the “Recordkeeper”) is the recordkeeper
for the Plan.
Participation and Vesting —
Generally, all qualified employees participate on the first day of employment.
Participants are fully vested in all contributions at all times.
Contributions —
The Plan is funded through contributions by participants and the Company. The
Plan provides for two types of employee contributions to the Plan: pay
conversion contributions (pretax) and after-tax contributions. An employee may
designate multiples of 1%, ranging from 1% to 35%, of earnings as before-tax
contributions. Pay conversion contributions, which are subject to annual
increases pursuant to federal regulations, are limited to a maximum dollar
amount of $16,500 in 2009. Certain additional limits may be imposed on the
amount of contributions by or on behalf of certain higher-paid employees. For
participants over the age of 50, additional contributions may be made in the
amount of $5,500 for the year ended December 31,
2009. Participants may also contribute amounts representing
distributions from other qualified plans.
The
Company expects to make matching contributions out of accumulated earnings and
profits to match a portion of an employee’s contribution equal to 100% of that
contribution, not to exceed 4% of the employee’s earnings. In addition to the
contributions described above, the Company may make an additional discretionary
bonus match not to exceed 2% of the employee’s earnings and a profit sharing
contribution with a minimum equal to 3% of the employee’s earnings for the
portion of the Plan year in which the employee was an eligible participant.
These discretionary profit sharing contributions totaled approximately
$3,600,000 for the year ended December 31, 2009.
Investment Options —
Participants’ contributions are invested in 15 separate investment funds of the
Plan in proportions elected by the participant. The Company’s
matching contributions are invested in the Company stock fund, which invests
primarily in the Company’s common stock and are available for immediate
reallocation by the participants. The Company’s profit sharing
contributions are invested as selected by the participant. In the event that no
contribution investment election is made by the participant, the profit sharing
contribution is invested into a target fund based on the participant’s year of
birth.
Participant Accounts —
Separate accounts are maintained for each investment option, before-tax
contributions, rollovers, transfers, and Company contributions and accumulated
earnings thereon. Earnings (losses) are allocated daily to each participant’s
account in the ratio of the participant’s account balance to total participants’
account balances. Distributions and withdrawals are charged to
participant accounts.
Distributions and
Withdrawals — A
participant’s total account is distributed upon retirement, disability, death,
or termination of employment, unless the account value is greater than $1,000,
in which case the participant may defer distribution until age 70-1/2.
Distributions are made in cash, except that the portion invested in common stock
of the Company may be distributed in whole shares of such stock, if requested by
the participant or beneficiary.
Prior to
a termination of employment, a participant may withdraw any amount up to the
value of his or her entire account provided, however, that (1) no portion
of an actively employed participant’s pay conversion contribution account may be
distributed to him or her before age 59-1/2, unless the administrative committee
approves a “hardship” withdrawal (as defined in the Plan) and (2) the
preceding 24 months of matching contributions may not be withdrawn by an
actively employed participant who has not been a participant in the Plan for at
least 60 months.
Participant Loans — A
participant may apply for a loan at any time provided that the participant is
receiving compensation from which payroll deductions may be made. The amount of
the loan cannot exceed the lesser of 50% of the participant’s total account,
less the outstanding balance of all existing loans, or $50,000, reduced by the
highest outstanding balance of existing loans during the 12 months preceding the
effective date of such loan. The interest rate of the loan will be determined by
the administrative committee, which consists of at least three members appointed
by the Chief Executive Officer of the Company, at the time the application for
the loan is made and may not exceed the maximum rate for such loans permitted by
law. The average rate of interest on loans approximated 5.8% and 7.4% as of
December 31, 2009 and 2008, respectively. A loan is considered an
investment of the Plan. The participant’s investment accounts will be reduced by
the amount of the loan. Any repayment made will be allocated to the
participant’s investment accounts in accordance with his or her current
investment direction. Loans must be repaid in monthly installments through
payroll deductions within 60 months.
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
Basis of Accounting —
The financial statements of the Plan have been prepared in accordance with
accounting principles generally accepted in the United States of America
(“generally accepted accounting principles”).
Recent Accounting Pronouncements
— In June 2009, the Financial Accounting Standards Board (“FASB”)
issued guidance, “The FASB Accounting Standards Codification and the Hierarchy
of Generally Accepted Accounting Principles.” This Codification became the
source of authoritative U.S. generally accepted accounting principles recognized
by the FASB. This guidance was adopted by the Plan effective July 1, 2009
and had no impact on the Plan’s financial statements.
For the
year ended December 31, 2009, the Plan adopted the FASB’s update to general
standards on accounting for disclosures of events that occur after the balance
sheet date but before the financial statements are issued or are available to be
issued. The adoption of this guidance did not materially impact the Plan’s
financial statements. See Note 10 for further discussion of subsequent
events.
In
April 2009, the FASB issued new guidance for determining when a transaction
is not orderly and for estimating fair value when there has been a significant
decrease in the volume and level of activity for an asset or liability. The
guidance requires disclosure of the inputs and valuation techniques used, as
well as any changes in valuation techniques and inputs used during the period,
to measure fair value in interim and annual periods. In addition, the
presentation of the fair value hierarchy is required to be presented by major
security type. The Plan adopted this new guidance effective December 31,
2009. The adoption of this guidance did not materially impact the Plan’s
financial statements.
In 2009,
the FASB issued new guidance for the fair value measurement of investments in
certain entities that calculate net asset value (“NAV”) per share. The new
guidance permits, as a practical expedient, a reporting entity to measure the
fair value of an investment on the basis of the NAV per share of the investment
if the NAV is calculated in a manner consistent with the measurement principles
for Investment Companies. This guidance requires disclosure by major category of
investment about the attributes of investments, such as the nature of the
restrictions on the investor’s ability to redeem its investments at the
measurement date, any unfunded commitments, and the investment strategies of the
investees. This guidance was adopted by the Plan in 2009. Refer to Note 5 for
related disclosures.
In
January 2010, the FASB issued new guidance related to fair value measurement and
disclosure. The guidance requires additional disclosure requirements for
measurement Levels 1 and 2 of the fair value hierarchy as well as separate
disclosures of purchases, sales, issuances and settlements relating to Level 3
measurements. The guidance is effective for periods beginning after December 15,
2009, except for the requirement to provide Level 3 activity of purchases,
sales, issuances and settlements on a gross basis, which will be effective for
fiscal years beginning after December 15, 2010. The Plan is currently evaluating
the impact this guidance will have on the financial statements.
Valuation of Investments and Income
Recognition —
The Plan’s investment in the Master Trust established by the Company and
administered by the Trustee is presented at fair value, which has been
determined based on the fair values of the underlying investments of the Master
Trust.
Investments
are reported at fair value. Fair value of a financial instrument is 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.
Investments in securities traded on national and over-the-counter exchanges are
valued at the closing bid price of the security as of the last trading day of
the year. Investments in common/collective-trust funds are stated at estimated
fair value as determined by the issuer of the funds based on the underlying
investments. The stable value fund is stated at fair value and then adjusted to
contract value as described below. Fair value of the stable value fund is the
fair value of its underlying investments, and contract value is principal plus
accrued interest. Loans to participants are valued at outstanding loan balances,
which approximate fair value.
In
accordance with Accounting Standards Codification (ASC) Topic 962-325, Plan Accounting – Defined
Contribution Pension Plans – Investments – Others, the stable value fund
is included at fair value in participant-directed investments in the statement
of net assets available for benefits, and an additional line is presented
representing the adjustment from fair value to contract value. The statement of
changes in net assets available for benefits is prepared on a contract value
basis.
The
average cost of securities sold or distributed is used to determine net
investment gains or losses realized. Security transactions are recorded on the
trade date. Distributions of common stock, if any, to participants are recorded
at the market value of such stock at the time of distribution. Interest income
is recorded on the accrual basis. Dividends are recorded on the ex-dividend
date. Investment manager fees are netted against Plan investment income and are
not separately reflected. Consequently, management fees and operating expenses
are reflected as a reduction of investment return for such investments. Expenses
incurred in connection with the transfer of securities, such as brokerage
commissions and transfer taxes, are added to the cost of such securities or
deducted from the proceeds thereof.
Valuation of Investments (Securities
With no Quoted Market Prices) — Amounts for securities that have no
quoted market price represent estimated fair value. Many factors are considered
in arriving at that fair value. In general, however, corporate debt instruments
are valued based on yields currently available on comparable securities of
issuers with similar credit ratings. Investments in certain other equity
instruments are valued at the quoted market price of the issuer’s unrestricted
common stock, less an appropriate discount. If a quoted market price for
unrestricted common stock of the issuer is not available, restricted common
stocks are valued at a multiple of current earnings. The multiple chosen is
consistent with multiples of similar companies based on current market
prices. The fair value of venture capital and partnership investments
has been estimated on the basis of methods employed by the general
partners, including consideration of, among other things, reference to
third-party transactions, valuations of comparable companies operating within
the same or similar industry, current economic and competitive environment,
creditworthiness of the corporate issuer, as well as market prices for
instruments with similar quality rate, maturity, term, and
conditions.
Use of Estimates and Risks and
Uncertainties —
The preparation of financial statements in conformity with generally accepted
accounting principles requires Plan management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, and changes therein and
disclosure of contingent assets and liabilities. Actual results could differ
from those estimates. The Master Trust invests in various securities including
U.S. government securities, corporate debt instruments, a stable value fund,
other equities, common/collective-trusts, interest-bearing cash, commingled
funds holding principally venture capital and partnership investments, other
equity investments, and corporate stocks. Investment securities, in general, are
exposed to various risks, such as interest rate, credit, and overall market
volatility. Due to the level of risk associated with certain investment
securities, it is reasonably possible that changes in the values of investment
securities will occur in the near term and that such changes could materially
affect the amounts reported in the financial statements.
Payment of Benefits —
Benefits are recorded when paid.
Administrative Expenses — The
Company pays the administrative costs of the Plan, including the Trustee’s fees
and charges.
3.
|
STABLE
VALUE FUND — SYNTHETIC GUARANTEED INVESTMENT
CONTRACT
|
The Plan
provides participants a self-managed stable value investment option (“Fund” or
“Synthetic Guaranteed Investment Contract”) that simulates the performance of a
guaranteed investment contract (GIC), whereby participants execute plan
transactions at contract value. Contract value represents contributions made to
the fund, plus earnings, less participant withdrawals. The self-managed stable
value fund is comprised of a portfolio of bonds and other fixed income
securities owned by the Plan and an investment contract issued by an insurance
company or other financial institution, designed to provide a contract value
“wrapper” around the fixed income portfolio to guarantee a specific interest
rate which is reset quarterly and that cannot be less than zero. The wrapper
contract provides that realized and unrealized gains and losses on the
underlying fixed income portfolio are not reflected immediately in the net
assets of the fund, but rather are amortized over the duration of the underlying
assets through adjustments to the future interest crediting rate. Primary
variables impacting future crediting rates of the Fund include the current
yield, duration, and existing difference between market and contract value of
the underlying assets within the wrapper contract.
Limitations on the Ability of the
Synthetic Guaranteed Investment Contract to Transact at Contract Value —
Certain events, such as Plan termination or plan merger initiated by the
Company, may limit the ability of the Plan to transact at contract value or may
allow for the termination of the wrapper contract at less than contract value.
The Company does not believe that any events that may limit the ability of the
Plan to transact at contract value are probable.
Average Yields —
|
|
2009
|
|
|
2008
|
|
Average
yields:
|
|
|
|
|
|
|
Based on annualized
earnings(1)
|
|
3.04%
|
|
|
4.75%
|
|
Based on interest rate credited
to participants(2)
|
|
2.40%
|
|
|
4.55%
|
|
(1)Computed
by dividing the annualized one-day actual earnings of the contract on the last
day of the Plan year by
the fair value of the investments on the same date.
(2)Computed
by dividing the annualized one-day earnings credited to the participants on the
last day of the Plan year
by the fair value of the investments on the same date.
4.
|
INTEREST
IN MASTER TRUST
|
The
Plan’s investment assets are held in a trust account by the Trustee. Use of the
Master Trust permits the commingling of investment assets of a number of
employee benefit plans of the Company. Each participating plan has an undivided
interest in the Master Trust. Although assets of the plans are commingled in the
Master Trust, the Recordkeeper maintains supporting records for the purpose of
allocating the net gain or loss of the investment account to the participating
plans.
The fair
value of investments of the Master Trust at December 31, 2009 and 2008, is
summarized as follows:
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
Vulcan
Materials Company common stock*
|
|
$ |
244,000,210 |
|
|
$ |
299,992,678 |
|
Stable
value fund
|
|
|
36,397,720 |
|
|
|
36,457,536 |
|
Corporate
debt investments-preferred
|
|
|
59,680,435 |
|
|
|
31,104,274 |
|
Corporate
debt investments-other
|
|
|
1,235,412 |
|
|
|
4,292,399 |
|
U.S.
government securities
|
|
|
32,867,915 |
|
|
|
51,073,811 |
|
Other
equities**
|
|
|
280,156,723 |
|
|
|
211,633,650 |
|
Interest-bearing
cash
|
|
|
128,019,627 |
|
|
|
140,448,983 |
|
Value
of interest in common/collective-trusts
|
|
|
265,533,299 |
|
|
|
217,433,093 |
|
Commingled
funds holding principally venture capital and partnership
investments
|
|
|
93,262,145 |
|
|
|
84,207,459 |
|
Total
assets
|
|
|
1,141,153,486 |
|
|
|
1,076,643,883 |
|
|
|
|
|
|
|
|
|
|
Adjustment
from fair value to contract value for fully benefit-responsive investment
contracts
|
|
|
(1,119,040 |
) |
|
|
145,332 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,140,034,446 |
|
|
$ |
1,076,789,215 |
|
|
|
|
|
|
|
|
|
|
Percentage
of Plan’s investments in the Master Trust’s investments
|
|
|
16.3 |
% |
|
|
16.7 |
% |
*The
Master Trust’s investment in the Company’s common stock is held solely by
participants in the Company’s defined contribution plans.
**As of
December 31, 2008, the Master Trust has assets invested at Westridge Capital
Management, Inc. (WCM), reported by WCM to have a fair value of approximately
$59,000,000. Due to allegations of fraud and other violations of federal
commodities and securities laws which were alleged to have occurred prior to
December 31, 2008, these assets were frozen on February 25, 2009. As a
result, the Plan reassessed the fair value of investments as of December 31,
2008 related to WCM and recorded a $48,018,000 write-down in the estimated fair
value of these assets. At December 31, 2009 WCM assets of $11,227,000 are
included in the Other equities asset category above.
The total
investment income of the Master Trust for the year ended December 31, 2009,
is summarized as follows:
Interest
|
|
$ |
9,285,485 |
|
Dividends
|
|
|
7,337,640 |
|
Other
|
|
|
2,279,078 |
|
Net
investment gains
|
|
|
61,186,349 |
|
|
|
|
|
|
Total
|
|
$ |
80,088,552 |
|
5.
|
FAIR
VALUE MEASUREMENT
|
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 Plan classifies its investments into a fair value
hierarchy that prioritizes the inputs to valuation techniques used to measure
fair value into three broad levels. The following is a brief description of
those three levels:
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.
The
Plan’s investments are measured at fair value on a recurring basis in the
accompanying Statements of Net Assets Available for Benefits. The
following methods and assumptions were used to estimate the fair
values:
Interest bearing cash and Vulcan
Materials Company common stock – These investments consist of various
publicly-traded money market funds, mutual funds and common stock. The fair
values are based on quoted market prices.
Stable value fund – The fair
value of the stable value fund is calculated by valuing the underlying assets
using quoted prices for similar assets or liabilities in active markets, quotes
prices for identical or similar assets or liabilities in markets that are not
active, inputs other than quoted prices that are observable for the asset or
liability and inputs that are derived principally or corroborated by observable
market data.
Corporate debt investments
(preferred and other) – The fair
values of corporate debt securities are based on current market rates and credit
spreads for debt securities with similar maturities.
U.S. government securities –
These investments consist of U.S. government and U.S. government agency debt
investments. The fair values of these securities are based on current market
rates and credit spreads for debt securities with similar
maturities.
Other equities – These
investments include common stock, preferred stock, asset-backed securities,
mutual funds, and other equity investments. For investments publicly
traded on a national securities exchange, the fair value is based on quoted
market prices. For investment funds not traded on an exchange, the total fair
value of the underlying securities is used to determine the net asset value for
each unit of the fund held by the pension fund. The estimated fair values of the
underlying securities are generally based on quoted market prices. For
securities without quoted market prices, other observable market inputs are
utilized to determine the fair value.
Interest in
common/collective-trusts –The fair value for these investments is
calculated by utilizing quoted market prices, most recent bid prices in the
principal market in which the securities are normally traded, pricing services
and dealer quotes. The Plan’s fair value is based on the Plan’s
proportionate ownership of the underlying investments.
Venture capital and partnership
investments – The venture capital and partnerships asset category
consists of various limited partnership funds, mezzanine debt funds and
leveraged buy-out funds. The fair value of these investments has been estimated
based on methods employed by the general partners, including consideration of,
among other things, reference to third-party transactions, valuations of
comparable companies operating within the same or similar industry, the current
economic and competitive environment, creditworthiness of the corporate issuer,
as well as market prices for instruments with similar maturity, term, conditions
and quality ratings. The use of different assumptions, applying different
judgment to inherently subjective matters and changes in future market
conditions could result in significantly different estimates of fair value of
these securities.
Participant Loans - Loans to
plan participants are valued at outstanding loan balances, which approximate
fair value.
The
methods described above may produce a fair value calculation that may not be
indicative of net asset value or reflective of future fair value. Furthermore,
while the Plan’s valuation methods are appropriate and consistent with other
market participants, the use of different methodologies or assumptions to
determine the fair value of certain financial instruments could result in
different estimates of fair value at the reporting date.
The
following tables set forth, by level within the fair value hierarchy, the Master
Trust investment assets at fair value:
|
|
As of December 31, 2009
|
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vulcan
Materials Company common stock
|
|
$ |
244,000,210 |
|
|
$ |
244,000,210 |
|
|
$ |
- |
|
|
$ |
- |
|
Stable
value fund
|
|
|
36,397,720 |
|
|
|
- |
|
|
|
36,397,720 |
|
|
|
- |
|
Corporate
debt investments-preferred
|
|
|
59,680,435 |
|
|
|
- |
|
|
|
59,680,435 |
|
|
|
- |
|
Corporate
debt investments-other
|
|
|
1,235,412 |
|
|
|
- |
|
|
|
1,235,412 |
|
|
|
- |
|
U.S.
government securities
|
|
|
32,867,916 |
|
|
|
2,926,039 |
|
|
|
29,941,877 |
|
|
|
- |
|
Other
equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
backed securities
|
|
|
73,564,903 |
|
|
|
- |
|
|
|
73,564,903 |
|
|
|
- |
|
Commodity
funds
|
|
|
23,093,230 |
|
|
|
- |
|
|
|
23,093,230 |
|
|
|
- |
|
Domestic
equities
|
|
|
94,200,628 |
|
|
|
3,972,894 |
|
|
|
90,227,734 |
|
|
|
- |
|
Mutual
funds
|
|
|
83,719,765 |
|
|
|
- |
|
|
|
83,719,765 |
|
|
|
- |
|
Other
|
|
|
5,578,196 |
|
|
|
944,098 |
|
|
|
4,634,098 |
|
|
|
- |
|
Total
other equities
|
|
|
280,156,722 |
|
|
|
4,916,992 |
|
|
|
275,239,730 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
cash
|
|
|
128,019,627 |
|
|
|
128,019,627 |
|
|
|
- |
|
|
|
- |
|
Value
of interest in common/collective-trusts
|
|
|
265,533,299 |
|
|
|
- |
|
|
|
265,533,299 |
|
|
|
- |
|
Commingled
funds holding principally venture capital and partnership
investments
|
|
|
93,262,145 |
|
|
|
- |
|
|
|
- |
|
|
|
93,262,145 |
|
Total
investment assets at fair value
|
|
$ |
1,141,153,486 |
|
|
$ |
379,862,868 |
|
|
$ |
668,028,473 |
|
|
$ |
93,262,145 |
|
|
|
As of December 31, 2008
|
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vulcan
Materials Company common stock
|
|
$ |
299,992,678 |
|
|
$ |
299,992,678 |
|
|
$ |
- |
|
|
$ |
- |
|
Stable
value fund
|
|
|
36,457,536 |
|
|
|
- |
|
|
|
36,457,536 |
|
|
|
- |
|
Corporate
debt investments-preferred
|
|
|
31,104,274 |
|
|
|
- |
|
|
|
31,104,274 |
|
|
|
- |
|
Corporate
debt investments-other
|
|
|
4,292,399 |
|
|
|
- |
|
|
|
4,292,399 |
|
|
|
- |
|
U.S.
government securities
|
|
|
51,073,811 |
|
|
|
- |
|
|
|
51,073,811 |
|
|
|
- |
|
Other
equities
|
|
|
211,633,650 |
|
|
|
70,405,475 |
|
|
|
141,228,175 |
|
|
|
- |
|
Interest-bearing
cash
|
|
|
140,448,983 |
|
|
|
140,448,983 |
|
|
|
- |
|
|
|
- |
|
Value
of interest in common/collective-trusts
|
|
|
217,433,093 |
|
|
|
- |
|
|
|
217,433,093 |
|
|
|
- |
|
Commingled
funds holding principally venture capital and partnership
investments
|
|
|
84,207,459 |
|
|
|
- |
|
|
|
- |
|
|
|
84,207,459 |
|
Total
investment assets at fair value
|
|
$ |
1,076,643,883 |
|
|
$ |
510,847,136 |
|
|
$ |
481,589,288 |
|
|
$ |
84,207,459 |
|
The
following tables set forth, by level within the fair value hierarchy, the Plan’s
participant loans, held outside the Master Trust:
|
|
As of December 31, 2009
|
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participant
loans
|
|
$ |
13,385,835 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
13,385,835 |
|
|
|
As of December 31, 2008
|
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participant
loans
|
|
$ |
14,344,347 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
14,344,347 |
|
The
following table sets forth information related to fair value measurements of the
venture capital and partnership investments held by the master trust that
calculate net asset value per share:
|
|
As of December 31, 2009
|
|
|
|
|
|
Unfunded
|
|
Remaining
|
|
|
Fair Value
|
|
|
Commitment
|
|
Life
|
Venture
capital funds
|
|
$ |
33,430,548 |
|
|
$ |
16,703,000 |
|
0 -
10 years
|
Secondary
private equity funds
|
|
|
21,584,626 |
|
|
|
19,221,000 |
|
5
years
|
Mezzanine
funds
|
|
|
20,789,024 |
|
|
|
6,489,684 |
|
0 -
10 years
|
Leveraged
buyout and growth capital funds
|
|
|
16,704,915 |
|
|
|
1,792,000 |
|
0 -
7 years
|
Independent
power funds
|
|
|
461,266 |
|
|
|
- |
|
2
years
|
International
equity funds
|
|
|
291,766 |
|
|
|
513,000 |
|
2
years
|
Total
|
|
$ |
93,262,145 |
|
|
$ |
44,718,684 |
|
|
These
investments can not be redeemed during the life of the funds, although such
investments may be liquidated through secondary markets, subject to negotiated
terms. Distributions are received through the liquidation of the underlying
assets of the funds. It is expected that the underlying assets will be
liquidated over the remaining life and any contractual extension of the
investment agreements.
The
venture capital funds invest in early-stage, high potential, growth companies.
The secondary private equity funds acquire pre-existing commitments made by
others to private equity and other alternative investment funds. The mezzanine
funds invest in subordinated debt or preferred equity instruments of established
firms. The leveraged buyout and growth capital funds invest in large privately
negotiated equity instruments. The independent power funds invest in electricity
generation and related assets. The international equity funds invest in mid-size
international companies, with a focus on Asia.
Level 3 Gains and Losses — The
following table presents a reconciliation of the beginning and ending balances
of the fair value measurements using significant unobservable inputs (Level
3):
|
|
|
|
|
|
|
|
Commingled
|
|
|
|
|
|
|
|
|
|
Funds Holding
|
|
|
|
|
|
|
|
|
|
Principally
|
|
|
|
|
|
|
Loan Fund
|
|
|
Venture Capital
|
|
|
|
|
|
|
(held outside
|
|
|
and
|
|
|
|
Total
|
|
|
the Master Trust)
|
|
|
Partnerships
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
January 1, 2009
|
|
$ |
98,551,806 |
|
|
$ |
14,344,347 |
|
|
$ |
84,207,459 |
|
Realized
gains / (losses)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Unrealized
gains / (losses)
|
|
|
2,743,000 |
|
|
|
- |
|
|
|
2,743,000 |
|
Purchases,
sales, issuances, and settlements
|
|
|
5,353,174 |
|
|
|
(958,512 |
) |
|
|
6,311,686 |
|
Transfers
in (out) of Level 3
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Balance,
December 31, 2009
|
|
$ |
106,647,980 |
|
|
$ |
13,385,835 |
|
|
$ |
93,262,145 |
|
Although
it has not expressed any intention to do so, the Company has the right under the
Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions set forth in the Employee Retirement Income Security
Act.
7.
|
FEDERAL
INCOME TAX STATUS
|
The Plan
has applied for a letter from the Internal Revenue Service determining and
informing the Company that the Plan and related trust were designed in
accordance with the applicable regulations of the Internal Revenue Code (“IRC”).
However, the Plan has not received such letter. The Company and Plan
administrator believe that the Plan is currently designed and operated in
compliance with the applicable requirements of the IRC and that the Plan and the
related trust is tax-exempt. Therefore, no provision for income taxes has been
included in the Plan’s financial statements.
8.
|
EXEMPT
PARTY-IN-INTEREST
TRANSACTIONS
|
At
December 31, 2009 and 2008, the Master Trust held 4,540,694 and 4,311,479
shares, respectively, of common stock of the Company with a cost basis of
$227,352,786 and $217,262,815, respectively. During the year ended
December 31, 2009, the Master Trust recorded dividend income of $6,881,053
attributable to its investment in the Company’s common stock.
Effective
February 14, 2008, the Florida Rock Industries, Inc. Profit Sharing and Deferred
Earnings Plan and the Arundel Corporation Profit Sharing and Savings Plan were
merged into the defined contribution employee benefit plans that participate in
the Master Trust. The merger resulted in the transfer of $276,008,182
and $280,842,023 of net assets into this Plan and into the Master Trust,
respectively in December 2009.
Subsequent
events have been evaluated since the date of these financial statements. There
were no events or transactions discovered during this evaluation that require
recognition or disclosure in the financial statements.
VULCAN
MATERIALS COMPANY 401(k) AND PROFIT SHARING
RETIREMENT
PLAN
FORM
5500, SCHEDULE H, PART IV, LINE 4i —
SCHEDULE
OF ASSETS (HELD AT END OF YEAR)
AS
OF DECEMBER 31, 2009
|
|
(c) Description of Investment, Including
|
|
|
|
|
|
|
(a)
|
(b) Identity of Issue, Borrower,
|
Maturity Date, Rate of Interest,
|
|
|
|
|
(e) Current
|
|
|
Lessor, or Similar Party
|
Collateral, and Par or Maturity Value
|
|
(d) Cost
|
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
*
|
Various
plan participants
|
Participant
loans at interest rates of 4.3% to 9.1% maturing in 1 to 60
months
|
|
**
|
|
|
$ |
13,385,835 |
|
**
|
Cost
information is not required for participant-directed investments and,
therefore, is not included.
|
SIGNATURES
The Plan. Pursuant
to the requirements of the Securities Exchange Act of 1934, the trustee (or
other persons who administer the employee benefit plan) have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
VULCAN
MATERIALS COMPANY
|
|
401(K)
AND PROFIT SHARING RETIREMENT
|
|
PLAN
|
|
|
|
Date: June
28, 2010
|
By:
|
/s/ Charles D. Lockhart
|
|
|
Charles
D. Lockhart
|
|
|
Chairman
of the Administrative Committee
|