UNITED STATES |
Vulcan Materials Company | |
VULCAN MATERIALS COMPANY CONSTRUCTION MATERIALS DIVISIONS HOURLY EMPLOYEE SAVINGS PLAN |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Administrative Committee
Vulcan Materials Company Construction Materials Divisions
Hourly Employees Savings Plan
We have audited the accompanying statements of net assets available for benefits of the Vulcan Materials Company Construction Materials Divisions Hourly Employees Savings Plan (the "Plan") as of December 31, 2004 and 2003, and the related statement of changes in net assets available for benefits for the year ended December 31, 2004. 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 presentat ion. 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, 2004 and 2003, and the changes in net assets available for benefits for the year ended December 31, 2004 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, 2004 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 2004 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.
DELOITTE & TOUCHE LLP
Birmingham, Alabama
June 27, 2005
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VULCAN MATERIALS COMPANY | ||
ASSETS | 2004 | 2003 |
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VULCAN MATERIALS COMPANY | |
ADDITIONS TO NET ASSETS ATTRIBUTED TO: |
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VULCAN MATERIALS COMPANY
CONSTRUCTION MATERIALS DIVISIONS HOURLY EMPLOYEES SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2004 AND 2003 AND FOR THE YEAR ENDED DECEMBER 31, 2004
1. | DESCRIPTION OF THE PLAN | ||
General-The Vulcan Materials Company Construction Materials Divisions Hourly Employees Savings Plan (the "Plan"), a defined contribution employee benefit plan established effective October 1, 1983 for the purpose of providing for accumulation of savings for qualifying nonunion hourly employees of Vulcan Materials Company's (the "Company") southeast, mideast, midsouth, southwest, western, southern gulf coast, and midwest divisions. | |||
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. | |||
3. | 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 participating companies. 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 net investment income or loss of the Master Trust is allocated by the Recordkeeper to each participating plan based on the relationship of the interest of each plan to the total of the interests of the participating plans. | |||
| 2004 | 2003 | |
Percentage of Plan's investments in the Master Trust's investments | 6.4% | 6.1% | |
*Consists of both participant-directed and nonparticipant-directed contributions. | |||
The total investment income of the Master Trust for the year ended December 31, 2004 is summarized as follows: | |||
Interest-net | $ 9,408,604 | ||
4. | NONPARTICIPANT-DIRECTED INVESTMENTS | ||
Information about the net assets and the significant components of the changes in net assets relating to Vulcan Materials Company common stock, which includes both participant- and | |||
Net assets-beginning of year | $ 269,938,820 | ||
5. | PLAN TERMINATION | ||
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 ERISA. | |||
6. | FEDERAL INCOME TAX STATUS | ||
The Internal Revenue Service has determined and informed the Company by a letter dated January 10, 2003 that the Plan and related trust were designed in accordance with the applicable regulations of the Internal Revenue Code. The Plan has been amended since receiving the determination letter; however, the Company and plan administrator believe that the Plan is currently designed and operated in compliance with the applicable requirements of the Internal Revenue Code and that the Plan and the related trust continue to be tax-exempt. Therefore, no provision for income taxes has been included in the Plan's financial statements. | |||
7. | EXEMPT PARTY-IN-INTEREST TRANSACTIONS | ||
At December 31, 2004 and 2003, the Master Trust held 5,267,666 and 5,532,758 shares, respectively, of common stock of Vulcan Materials Company, the sponsoring employer, with a cost basis of $143,032,290 and $136,430,142 respectively. During the year ended December 31, 2004, the Master Trust recorded dividend income of $5,711,312 attributable to its investment in Vulcan Materials Company's common stock. | |||
8. | DISCRIMINATION TESTING | ||
The Plan failed the ADP/ACP discrimination test for the year ended December 31, 2004. Therefore, the Plan recorded a payable in the amount of $76,363 to be refunded to these highly compensated employees. In 2005, the Plan Sponsor determined that the Plan also failed the ADP/ACP discrimination testing in several prior years. Accordingly, the Plan has recorded a payable in the amount of $124,938 to be refunded to certain highly compensated employees. Further, the accompanying 2004 financial statements include a contribution receivable due from the Company totaling $124,938. | |||
SUPPLEMENTAL SCHEDULE | |||
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VULCAN MATERIALS COMPANY | ||||
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| (c) Description of Investment, Including |
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* | Various Plan participants | Participant loans at interest rates of 5% to 10.5% maturing in 1 to 48 months | ** | $4,552,754 |
* Party-in-interest. |
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