Vulcan Materials (VMC) to Consolidate Ops, About 200 Positions Will Be Affected

Vulcan Materials Company (NYSE: VMC) announced that it is consolidating its eight divisions into four operating regions as part of ongoing efforts to reduce overhead costs and increase operating efficiency. This initiative is expected to generate an ongoing annualized pre-tax cost savings of approximately $30 million, in addition to approximately $25 million in annual pre-tax overhead reductions already implemented in 2011. The initiative, which senior management began developing earlier in the year, was approved by Vulcan's Board of Directors at its regularly scheduled quarterly meeting on December 9, 2011, following a preliminary review of the Company's proposal at the Board's October 14, 2011 meeting.

The new organizational structure is consistent with Vulcan's longstanding commitment to decentralized management of its sales, marketing and operating functions, and will enable the Company to maintain close, local relationships with its customers. It also will allow the Company to leverage significant investments in technology that have replaced legacy IT and financial reporting systems. These new systems support improvement in administrative and operating efficiencies while also creating new opportunities for greater standardization and implementation of best practices throughout the organization.

The Company expects that approximately 200 positions will be affected, with most coming from overhead and administrative staff. Staffing at plant facilities will be largely unaffected.

Following the consolidation, Vulcan will have four regions: East, South, Central and West.

• The East Region, which will comprise the Company's former Southeast and Mideast Divisions, will be headquartered in Atlanta and led by Michael R. Mills, Senior Vice President, East. Mills, age 50, was President of Vulcan's Southeast Division.
  
• The South Region will comprise the Company's former Florida Rock and Southwest Divisions, and will include Vulcan's quarry and harbor on Mexico's Yucatan Peninsula and related shipping assets. The South Region will be headquartered in Jacksonville, Florida and led by James T. Hill, Senior Vice President, South. Hill, age 51, was President of the Company's Florida Rock Division.
  
• The Central Region will comprise the Company's former Midwest, Midsouth and Southern and Gulf Coast Divisions, excluding Vulcan's Mexico facilities and related assets. The Central Region will be headquartered in Birmingham, Alabama and led by Stanley G. Bass, Senior Vice President, Central. Bass, age 49, was President of the Midsouth and Southwest Divisions.
  
• The West Region will comprise the Company's former Western Division facilities. It will be headquartered in Los Angeles and led by Alan D. Wessel, Senior Vice President, West. Wessel, age 53, previously was President of the Western Division.

The Senior Vice Presidents heading the newly formed regions will report to Danny R. Shepherd, Executive Vice President, Construction Materials.

As a result of the consolidation, Vulcan expects to record a charge of approximately $10 million on a pre-tax basis, or $0.05 per share after tax, during the fourth quarter of 2011. This charge will consist primarily of severance costs. Vulcan expects to substantially complete the consolidation in the first quarter of 2012.

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