VULCAN MATERIALS CO (Form: 10-K, Received: 03/27/2002 13:14:50)


UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K
(Mark One) {X} ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2001
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-4033
VULCAN MATERIALS COMPANY (Exact name of registrant as specified in its charter)
New Jersey (State or other jurisdiction of incorporation or organization)	63-0366371 (I.R.S. Employer Identification No.)
1200 Urban Center Drive, Birmingham, Alabama (Address of principal executive offices)	35242 (Zip Code)
Registrant's telephone number, including area code (205) 298-3000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Common Stock, $1 par value	Name of each exchange on which registered New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by referenced in Part III of this Form 10-K or any amendment to this Form 10-K. [_] State the aggregate market value of the voting stock held by non-affiliates of the registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within 60 days prior to the date of filing. Aggregate market value of voting stock held by non-affiliates as of February 28, 2002: $4,863,577,569 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $1.00 par value, as of February 28, 2002: 101,423,679 shares DOCUMENTS INCORPORATED BY REFERENCE (1) Portions of the registrant's Annual Report to Shareholders for the year ended December 31, 2001, are incorporated by reference into Parts I, II and IV of this Annual Report on Form 10-K. (2) Portions of the registrant's annual proxy statement for the annual meeting of its shareholders to be held on May 10, 2002, are incorporated by reference into Part III of this Annual Report on Form 10-K.

VULCAN MATERIALS COMPANY Annual Report On Form 10-K Fiscal Year Ended December 31, 2001 CONTENTS

Part	Item		Page
I	1 2 3 4 4a.	Business Properties Legal Proceedings "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995 Submission of Matters to a Vote of Security Holders Executive Officers of the Registrant	1 5 7 9 9 9
II	5 6 7 7A. 8 9	Market for the Registrant's Common Equity and Related Stockholder Matters Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosure About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	11 12 12 12 13 13
III	10 11 12 13	Directors and Executive Officers of the Registrant Executive Compensation Security Ownership of Certain Beneficial Owners and Management Certain Relationships and Related Transactions	13 13 13 13
IV	14	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	14
	--	Signatures	20

PART I

Item 1.  Business

         Vulcan Materials Company, a New Jersey corporation incorporated in 1956, and its subsidiaries (together called the "Company") are principally engaged in the production, distribution and sale of construction materials ("Construction Materials") and industrial and specialty chemicals ("Chemicals"). Construction Materials and Chemicals are both reported as segments. The Company is the nation's foremost producer of construction aggregates, a major producer of other construction materials and a leading chemicals manufacturer, supplying chloralkali and other industrial and specialty chemicals.

Competition and Customers

         All of the Company's products are marketed under highly competitive conditions, including competition in price, service and product performance. There are a substantial number of competitors in both the Construction Materials segment and the Chemicals segment.

         The Company is the largest construction aggregates producer in the United States. The Company estimates that the top ten producers in the nation represent less than a third of the total market, resulting in a highly fragmented market in some areas. Therefore, depending on the market, the Company competes with a number of large, national and small, local producers. Since construction aggregates are expensive to transport, the main competitive factor in the construction aggregates business is having a transportation advantage over competitors. The Company believes it is strategically located in eight of the ten metropolitan areas expected by the U.S. Census Bureau to experience the greatest absolute growth in population over the next decade. The Company also has facilities located on waterways and rail lines which increase its geographic market extensively, while providing lower cost rail and barge transportation. The Construction Materials segment sells a relatively small amount of construction aggregates outside of the United States. Nondomestic net sales in the Construction Materials segment were $5,519,000 in 2001, $26,000 in 2000, and $27,000 in 1999.

         The Company's Chemicals segment also competes throughout the United States with numerous companies, including some of the nation's largest chemical companies, in the production and sale of its lines of chemicals. The segment competes principally on the basis of quality, price and technical support for its products. The segment also competes for sales to customers outside the United States primarily in Asia, South America and Europe. The segment's net sales to foreign customers were $83.1 million in 2001, $58.8 million in 2000, and $58.2 million in 1999.

         No material part of the business of either segment of the Company is dependent upon a single customer or upon a few customers, the loss of any one of which would have a materially adverse effect on the segment. The Company's products are sold principally to private industry. Although large amounts of construction materials are used in public works, relatively insignificant sales are made directly to federal, state, county or municipal governments, or agencies thereof.

Research and Development Costs

         The Company conducts research and development activities for both of its business segments. The Construction Materials research and development facility is located in Birmingham, Alabama. The Chemicals research and development laboratories are located in Wichita, Kansas and Columbus, Georgia. In general, the Company's research and development effort is directed towards new and more efficient use of its Construction Materials and Chemicals products as well as for the manufacturing or processing of its Chemicals products. The Company spent approximately $1,202,000 in 2001, $1,360,000 in 2000, and $1,231,000 in 1999 on research and development activities for its Construction Materials segment. The Company spent approximately $4,842,000 in 2001, $6,840,000 in 2000, and $8,803,000 in 1999 on research and development activities for its Chemicals segment.

Environmental Costs and Governmental Regulation

         The Company estimates that capital expenditures for environmental control facilities in 2002 and 2003 will be approximately $14,900,000 and $10,055,000, respectively, for the Construction Materials segment, and $5,793,000 and $900,000, respectively, for the Chemicals segment.

         Certain of the Company's chemical operations are subject to the Resource Conservation and Recovery Act ("RCRA"). Under the corrective action requirements of RCRA, the Environmental Protection Agency ("EPA") must identify facilities subject to RCRA's hazardous waste permitting provisions where past practices have caused releases of hazardous waste or constituents thereof. The owner of any such facility is then required to conduct a Remedial Facility Investigation ("RFI") defining the nature and extent of any such releases. If the results of the RFI determine that constituent concentrations from any such release exceed action levels specified by the EPA, the facility owner is further required to perform a Corrective Measures Study ("CMS") identifying feasible technological alternatives for addressing these releases. Depending upon the results reported to the EPA in the RFI and CMS, the EPA subsequently may require Corrective Measures Implementation ("CMI") by the facility owner - essentially, implementation of a cleanup plan developed by the EPA based on the RFI and CMS.

         The Company expects to incur RFI and CMS costs over the next several years at its Geismar and Wichita chemical manufacturing facilities. For each of these two facilities, the RFI and CMS results will determine whether the EPA subsequently requires a CMI to address releases at the facility, and the scope and cost of any such CMI. With respect to those RFI and CMS costs that currently can be reasonably estimated, the Company has determined that its accrued reserves are adequate to cover such costs. However, the total costs which ultimately may be incurred by the Company in connection with discharging its obligations under RCRA's corrective action requirements cannot reasonably be estimated at this time.

         The Company's construction aggregates operations are also subject to federal, state and local laws and regulations relating to the discharge of materials into the environment or otherwise relating to the protection of the environment. The Company takes all appropriate measures to ensure its compliance with such laws and regulations, and continually audits and reviews its operations and procedures for compliance. Environmental expenditures that pertain to current operations or that relate to future revenues are expensed or capitalized consistent with the Company's capitalization policy. Costs associated with environmental assessments and remediation efforts are accrued when determined to represent a probable loss and can be reasonably estimated. There can be no assurance that the ultimate resolution of these matters will not differ materially from the Company's estimates. In recent years, such costs were not material to the Company's operations or financial condition.

Patents and Trademarks

         As of March 27, 2002, the Company owns, has the right to use, or has made applications for approximately 80 patents which have been granted or are pending in the United States and various other countries, as well as some 22 trademarks registered or pending registration in the United States and other countries. These patents, patent applications and trademarks relate to the Company's businesses, primarily, its Chemicals businesses. The Company believes that its patents, patent applications and trademarks are valuable both individually and in the aggregate to the Company's operations, but the Company also believes that neither any individual patent, patent application or trademark nor any specific or general aggregation of its patents, patent applications and trademarks is material to the conduct of the Company's business as a whole.

Other Information

         The Company's principal sources of energy are electricity, natural gas and diesel fuel. The Company does not anticipate any material difficulty in obtaining the required sources of energy for its operations.

         In 2001, the Construction Materials segment employed an average of approximately 7,761 people. The Chemicals segment employed an average of approximately 1,536 people. The Company's corporate office employed an average of approximately 213 people. The Company considers its relationship with its employees to be good.

         Financial results of the Company for any individual quarter are not necessarily indicative of results to be expected for the year, due primarily to the effect that weather can have on the sales and production volume of the Construction Materials segment. Normally, the highest sales and earnings of the Construction Materials segment are attained in the third quarter and the lowest are realized in the first quarter.

         The Company does not consider its backlog of orders to be material to, or a significant factor in, evaluating and understanding either of its business segments or its business considered as a whole.

Segment Information

     Construction Materials

         The Company's construction materials business consists of the production and sale of construction aggregates and other construction materials and related services. Construction aggregates include crushed stone, sand and gravel, rock asphalt, recrushed concrete and crushed slag (a by-product of blast iron and steel production) and are employed in virtually all types of construction, including highway construction and maintenance, and in the production of asphaltic and portland cement concrete mixes. Aggregates also are widely used as railroad track ballast. Construction aggregates constituted approximately 70% of the dollar volume of the Construction Materials segment's 2001 net sales, as compared to 66% in 2000 and 1999.

         Each type of aggregate is sold in competition with other types of aggregates and in competition with other producers of the same type of aggregates. Because of the relatively high transportation costs inherent in the business, competition generally is limited to the areas in relatively close proximity to production facilities. Noteworthy exceptions are the areas along the Mississippi, Tennessee-Tombigbee and James river systems and the Gulf Coast which are served by the Company's river quarries, areas served by rail-connected quarries, and the areas along the U.S. coast served by ocean-going vessels that transport stone from the Company's quarry in Mexico. The Company's construction aggregates are sold in 22 states, the District of Columbia, Mexico, Aruba, Chile, and the Cayman Islands. Shipments of all construction aggregates totaled approximately 237 million tons in 2001.

         During the first quarter of 2001, the Company acquired from Empresas ICA Sociedad Controladora, S.A. de C.V., or ICA, for $121.1 million in cash, all of its interests in the companies that made up the Vulcan/ICA joint venture. These companies produce aggregates on Mexico's Yucatan Peninsula and transport and sell them in various markets primarily along the U.S. Gulf Coast. Following the acquisition, the Company became the sole owner of the joint venture companies, known collectively as the Crescent Market Companies. The businesses of these companies include:

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a limestone quarry, aggregates processing plant, deepwater harbor and other properties, located on the east coast of Mexico's Yucatan Peninsula;

aggregates transportation involving two vessels used to transport aggregates from Mexico to the U.S. and the Caribbean Basin; and

various distribution facilities primarily on the Gulf Coast, as well as two aggregates production facilities in Florida and a fine-grind plant in Texas.

         Additionally, in 2001, the Company acquired two aggregates facilities in Tennessee and two recycling facilities in Illinois.

         As of year-end 2001, the Company, either directly or indirectly or through joint ventures, operated 202 permanent reserve-supplied aggregates production facilities in 18 states and Mexico for the production of crushed stone (limestone and granite), sand and gravel, and rock asphalt with estimated reserves totaling approximately 10.3 billion tons.

         In addition to the aggregates production facilities, as of year-end 2001, the Company operated a total of 60 truck, rail and marine distribution yards in 18 states.

         As of year-end 2001, the Company, either directly or indirectly or through joint ventures, operated 31 recrushed concrete plants, 2 slag plants, and various other types of plants which produce fine grind, dolomitic lime and other aggregates.

          Other Construction Materials products and services include asphalt mix and related products, ready-mixed concrete, trucking services, barge transportation, paving construction, and several other businesses. As of year-end 2001, the Company operated 50 asphalt plants in 6 states and 27 ready-mixed concrete plants in 5 states.

         Environmental and zoning regulations have made it increasingly difficult for the construction aggregates industry either to expand existing quarries or to develop new quarries in some markets. Although it cannot be predicted what policies will be adopted in the future by governmental bodies regarding environmental controls which affect the construction materials industry, the Company believes that future environmental control costs will not have a materially adverse effect upon its business. Furthermore, any future land use restrictions could make zoning and permitting more difficult. Any such restrictions, while curtailing expansion or acquisitions in certain areas, could potentially enhance the value of the Company's existing mineral reserves.

         Management believes that the Construction Materials segment's raw material reserves are sufficient for predicted production levels for the foreseeable future. The Company does not anticipate any material difficulties in either the number of sources or the availability of raw materials in the future.

         The Construction Materials segment strives to maintain a sufficient level of inventory of its aggregates to meet delivery requirements of its customers. The Construction Materials segment generally provides for standard payment terms similar to those customary for the construction aggregates industry. The terms generally provide for payment within 30 days of being invoiced.

      Chemicals

         The Chemicals segment is organized into two business units: the Chloralkali business unit which manages the Company's line of chloralkali products and related businesses, and the Performance Chemicals business unit, operating under the Vulcan Performance Chemicals name, which manages the Company's specialty chemicals and services business.

         The Chloralkali business unit produces and sells chlorine, caustic soda, hydrochloric acid, potassium chemicals and chlorinated organic chemicals principally to the chemical processing, polymer, refrigerant, foam-blowing, food and pharmaceutical, pulp and paper, textile and water management industries. Vulcan Performance Chemicals offers specialty and custom chemical products, services, technologies and manufacturing capabilities for a variety of customer needs in a number of industries, including pulp and paper and water management.

         In the paper industry, caustic soda is used primarily in the kraft and sulfite pulping processes. Chlorine is used in potable water disinfection and sewage management, to remove impurities from recycled aluminum and as an ingredient to make other chlorinated products. Caustic soda and caustic potash are used in the production of soaps and detergents. Caustic soda also is used to demineralize water for steam production at electrical energy facilities and to remove sulfur from gas and coal. The Company supplies hydrochloric acid to the energy industry for stimulation of oil and gas wells. Hydrochloric acid, caustic soda, caustic potash and methylene chloride are used by the food and pharmaceutical industries. Perchloroethylene and methylene chloride are used in industrial cleaning applications. Ethylene dichloride (EDC) is used in the manufacture of PVC, and pentachlorophenol is used in utility pole treatment. The Chloralkali business unit's sales to the chemical processing industry serve companies that produce organic and inorganic chemical intermediates and finished products. Products sold to this market segment include hydrochloric acid, chlorine, caustic soda, caustic potash, potassium carbonate and various chlorinated hydrocarbons. Potassium carbonate is used in the manufacture of screen glass, rubber antioxidants, cleansers and other chemicals. The Company sells chloroform, methyl chloroform, perchloroethylene and other chlorinated hydrocarbons to the fluorocarbons market as feedstocks for manufacturing refrigerants.

         In 1998, the Company first announced the formation of a joint venture with Mitsui & Co., Ltd., to construct a new chloralkali plant and expand EDC production capacity at the Company's current manufacturing site in Geismar, Louisiana. This joint venture was structured to take advantage of the Company's manufacturing and marketing capabilities and Mitsui's access to global EDC markets. Mitsui, the world's leading EDC trader, is purchasing all of the EDC output at Geismar. Both the new chloralkali plant and the expanded EDC plant began production in 2000.

         In February 1999, the Company combined its specialty chemicals businesses into Vulcan Performance Chemicals. This business unit includes Callaway Chemical Company, Callaway's Mayo Division, Callaway Chemical De Mexico S. de R.L. de C.V., Vulcan Chemical Technologies, Inc. and Vulcan's sodium chlorite business. Vulcan Performance Chemicals offers a blend of products, services, technologies and manufacturing capabilities for customers in a variety of industries, with emphasis on pulp and paper and water management. On March 1, 2002, Vulcan Performance Chemicals announced its alliance with Apollo Chemical pursuant to which Apollo will perform the sales and service functions of Vulcan Performance Chemicals' textile product line. Vulcan Performance Chemicals will continue to manufacture all of its textile products.

         Underground reserves of salt, a basic raw material used by the Chloralkali business unit in the production of chlorine and caustic soda, are located near the Company's Wichita, Kansas and Geismar, Louisiana plants. The Company purchases salt for its Port Edwards, Wisconsin plant. Ethylene, methanol and vinyl chloride monomer, the other major raw materials used in the Chloralkali business unit, and various chemicals used as raw materials by Vulcan Performance Chemicals are purchased from several different suppliers. Sources of salt, ethylene, methanol, vinyl chloride monomer and various other raw material chemicals are believed to be adequate for the Company's operations, and the Company does not anticipate any material difficulty in obtaining the raw materials which it uses.

         The Chemicals segment delivers its products upon receipt of orders or requests from customers. On occasion, when necessary to conform to regional industry practices, the Company has sold product under various payment terms.

         In the 1990s, the production of carbon tetrachloride and methyl chloroform for emissive uses was phased out to a large extent because of the ozone depleting properties of these chemicals. The Company has now developed new non-ozone-depleting products to replace those products. The Company is about to complete a plant at its Geismar complex that will produce HCC-240fa, a feedstock to make new fluorocarbons that will replace hydrochlorofluorocarbons. Under long-term agreements, the Company will supply HCC-240fa to Honeywell Fluorine Products Group for its plant which will also be located in Geismar. The resulting foam-blowing agent offers environmental benefits over present ozone-depleting compounds and it exhibits comparable or superior insulation performance. Both the Company's and Honeywell's plants are scheduled to be operational by mid-2002.

Financial Results by Business Segments

         Net sales, total revenues, segment earnings, identifiable assets and related financial data for each of the Company's business segments for the three years ended December 31, 2001, are reported on pages 48 and 49 (Note 14 of the Notes to Consolidated Financial Statements) in the Company's 2001 Annual Report to Shareholders, which referenced pages of said report are incorporated herein by reference.

Item 2. Properties

Construction Materials

         The Company's current estimate of approximately 10.3 billion tons of zoned and permitted aggregates reserves is approximately 0.3 billion tons more than the estimate reported at the end of 2000. Management believes that the quantities of zoned and permitted reserves at the Company's aggregates facilities are sufficient to result in an average life of approximately 44 years at present operating levels. See Note 1 to the table of the Company's 10 largest active aggregates facilities on page 6 for a description of the method used by the Company for estimating the years of life of reserves.

         The foregoing estimates of reserves are of recoverable stone, sand and gravel of suitable quality for economic extraction, based on drilling and studies by the Company's geologists and engineers, recognizing reasonable economic and operating restraints as to maximum depth of overburden and stone excavation.

         Of the 202 permanent reserve-supplied aggregates production facilities which the Company operates directly, or through joint ventures, 67 are located on owned land, 33 are on land owned in part and leased in part, and 102 are on leased land. While some of the Company's leases run until reserves at the leased sites are exhausted, generally the Company's leases have definite expiration dates which range from 2002 to 2105. Most of the Company's leases have options to extend them well beyond their current terms.

Due to transportation costs, the marketing areas for most aggregates facilities in the construction aggregates industry are limited, often consisting of a single metropolitan area or one or more counties or portions thereof when transportation is by truck only. The following table itemizes the Company's 10 largest active aggregates facilities determined on the basis of the quantity of aggregates reserves, with nearby major metropolitan areas (if applicable) shown in parentheses:

Location	Product	Estimated Years of Life At Average Rate of Production (1)	Nature of Interest	Lease Expiration Date, if Applicable (2)

Playa Del Carmen, Mexico	Limestone	98	Owned
McCook (Chicago), Illinois	Limestone	66.3	Owned
Grayson (Atlanta), Georgia	Granite	Over 100	Owned
Gray Court (Greenville), South Carolina	Granite	Over 100	Owned
Reed (Paducah), Kentucky	Limestone	25.3	Leased	(3)
Warrenton, Virginia (Washington, D.C.)	Diabase	Over 100	Leased	(3)
Calera (Birmingham), Alabama	Limestone	69.1	Owned
Jack (Richmond), Virginia	Granite	Over 100	66% Owned 34% Leased	2059
Skippers, Virginia	Granite	89.5	Leased	2016
Mount Misery (Hanover), Pennsylvania	Limestone	47.3	Owned

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(1)	Estimated years of life of aggregates reserves are based on the average annual rate of production of the facility for the most recent three-year period, except that if reserves are acquired or if production has been reactivated during that period, the estimated years of life are based on the annual rate of production from the date of such acquisition or reactivation. Revisions may be necessitated by such occurrences as changes in zoning laws governing facility properties, changes in aggregates specifications required by major customers and passage of government regulations applicable to aggregates operations. Estimates also are revised when and if additional geological evidence indicates that a revision is necessary.
(2)	Renewable by the Company through date shown.
(3)	Lease does not expire until reserves are exhausted. Surface rights at the Paducah, Kentucky facility are owned.

Chemicals

Manufacturing facilities for the chemicals produced by the Chloralkali business unit are owned and operated by the Company in Wichita, Kansas, Geismar, Louisiana, and Port Edwards, Wisconsin. With a few exceptions, the Geismar and Wichita facilities produce the full line of products manufactured by the Company's Chloralkali business unit. The Wichita facility also manufactures sodium chlorite for Vulcan Performance Chemicals. The Port Edwards plant produces chlorine, caustic soda, muriatic acid, caustic potash and potassium carbonate.

         All of the facilities at Wichita are located on a 1,815-acre tract of land owned by the Company. Mineral rights for salt are held by the Company under two leases that are automatically renewable from year to year unless terminated by the Company and under several other leases which may be kept in effect so long as production from the underlying properties is continued. In addition, the Company owns 280 acres of salt reserves and 108 acres of water reserves. The Company maintains an electric power cogeneration facility at the Wichita plant site which is capable of generating approximately one-third of the plant's electricity and two-thirds of its process steam requirements. The Company has placed this cogeneration facility in reserve and is purchasing most of its requirements for electric power from a local utility at favorable rates pursuant to a long-term agreement. Through a separate agreement with this utility, the Company does operate its cogeneration unit upon the request of the utility at various times during the summer peak electricity demand period, selling the cogenerated electricity to the utility at profitable rates.

         The facilities at Geismar are located on a 2,185-acre tract of land owned by the Company. Mineral rights for salt are held under a lease which may be extended, at the Company's option, through 2037. Included in the facilities at the Geismar plant are the operations associated with the joint venture with Mitsui & Co., Ltd. and an electric power cogeneration facility owned by the Company. The cogeneration facility supplies a majority of the electricity and process steam required by the Geismar plant, but not the joint venture facility. A long-term contract from the regional supplier is in place to supply the additional electrical power requirements of the joint venture plant.

         The plant facilities at Port Edwards are located on a 34-acre tract of land, the surface rights to which are owned by the Company. Currently, the Company purchases its salt and electrical power requirements for the Port Edwards facility from regional supply sources.

         Manufacturing facilities for chemicals produced by Vulcan Performance Chemicals (other than sodium chlorite which is produced at Wichita and Port Edwards) are operated by subsidiaries of the Company. Vulcan Performance Chemicals indirectly owns two production facilities in Columbus, Georgia and additional production facilities in Smyrna, Georgia, Dalton, Georgia and Shreveport, Louisiana. Vulcan Performance Chemicals also has an office and small production facility on leased property in Vancouver, British Columbia.

         The Company's Chemicals manufacturing facilities are designed to permit a high degree of flexibility as to raw material feedstocks, product mix and product ratios; therefore, actual plant production capacities vary according to these factors. Management does not believe, however, that there is material excess production capacity at the Company's Chemicals facilities.

Other Properties

         The headquarters staffs for the Construction Materials and Chemicals segments and the Southern and Gulf Coast Division of the Construction Materials segment are located in an office complex in Birmingham, Alabama. The majority of this office space is leased through December 31, 2013 and consists of approximately 189,000 square feet. The annual rental for each year in the initial 5 year period, the second 5 year period and the final 5 year period of the lease will be approximately $3.0 million, $3.2 million and $3.4 million, respectively. Additional space is leased in an adjacent building for a term of five years ending 2005. The square footage of this additional space is 6,995 and the base rent starts at $136,402 and increases to $159,393 by the end of the term.

Item 3.  Legal Proceedings

         In the course of its Construction Materials and Chemicals operations, the Company is subject to occasional governmental proceedings and orders pertaining to occupational safety and health or to protection of the environment, such as proceedings or orders relating to noise abatement, air emissions or water discharges. As part of its continuing program of stewardship in safety, health and environmental matters, the Company has been able to resolve such proceedings and to comply with such orders without any materially adverse effects on its business.

         The Company also is a defendant in various lawsuits in the ordinary course of business. It is not possible to determine with precision the probable outcome of, or the amount of liability, if any, under these lawsuits; however, in the opinion of the Company and its counsel, the disposition of these lawsuits will not adversely affect the consolidated financial position of the Company to a material extent. In addition to those lawsuits in which the Company is involved in the ordinary course of business, certain other legal proceedings involving the Company are more specifically described below. It is the Company's opinion that the disposition of these described lawsuits will not adversely affect the consolidated financial position of the Company to a material extent.

         As reported in the Company's Report on Form-10K for the year ended December 31, 2000, the Company settled a number of notices of violation of air pollution control requirements issued by the Illinois Environmental Protection Agency for a civil forfeiture of approximately $106,000. This settlement covered all but one affected facility. The Company and the State have continued settlement discussions with respect to the alleged violations at the one remaining facility, and the Company expects to settle the alleged violations at this facility for a civil forfeiture payment in excess of $100,000.

          Early in 1999 a subsidiary of the Company terminated a distribution agreement for the sale of certain specialty chemicals in four Asian countries between it and Phillip Barker. Following the termination, Barker filed a claim for breach of contract, unfair competition and unfair business practices, which was submitted to arbitration in California. The arbitrator issued a final Determination stating that the Claimant was entitled to damages, attorneys fees and costs in the amount of $23,234,239. The Company and its subsidiary filed suit in federal court in Virginia challenging the arbitral award based on the fact that the agreement provided that it would be construed under the laws of Virginia. Concurrently, the plaintiff filed a motion to confirm the arbitral award in the Superior Court in Sacramento, California, and an order was entered on June 1, 2001, confirming the award. The Company and its subsidiary appealed that order on June 11, 2001 to the California Court of Appeals where oral arguments have not been scheduled. On July 19, 2001, the Federal District Court for the Western District of Virginia entered an order granting the motion of the Company and its subsidiary to vacate the arbitration award and remanded the matter for further proceedings. The plaintiff filed a notice of appeal of this order with the United States Court of Appeals for the Fourth Circuit and filed a motion with the district court to stay the order pending the appeal. The district judge stayed the remand feature of his order pending the appeal to the Fourth Circuit. Oral argument was held in the Fourth Circuit on February 27, 2002. These appeals will not be decided until later in 2002.

          The Company is involved in fifteen cases as a result of its sale of the chemical product perchloroethylene, which has been sold to the drycleaning and other industries as a cleaning solvent. One of these matters involves environmental contamination that allegedly occurred in connection with operations of drycleaning facilities. This case is an action filed by the City of Modesto in the State Court of California. This case arose from alleged contamination of soils and municipal water wells in the City of Modesto and alleges certain product liability claims against the Company. The case is set for trial in 2003. Other perchloroethylene product liability cases involve claims of IBM employees who allege personal injury as a result of workplace exposure at three IBM semiconductor manufacturing plants. The Company is named as a defendant, along with IBM and other chemical manufacturers and distributors, in approximately 14 cases involving approximately 200 plaintiffs. One of the plaintiff's claims has been settled without any participation by the Company. Seven other plaintiffs' claims are set for trial in November 2002.

         The Company has been named as a defendant in multiple lawsuits filed in state court and federal district court in Louisiana. The lawsuits claim damages for various personal injuries allegedly resulting from releases of chemicals at the Company's Geismar, Louisiana, chloralkali plant. Fifty-three lawsuits, involving approximately 1,000 named plaintiffs have now been filed. Of the cases filed, 19 seek to certify a class.

         In September 2001, the Company was named a defendant in a suit brought by the Illinois Department of Transportation ("IDOT"), in the Circuit Court of Cook County, Chancery Division, Illinois, alleging damage to a 0.9 mile section of Joliet Road that bisects the Company's McCook Quarry in McCook, Illinois, a Chicago suburb. IDOT seeks damages to "repair, restore, and maintain" the road, or in the alternative, judgment for the cost to "improve and maintain other roadways to accommodate" vehicles that previously used the road. The complaint also requests that the court enjoin any McCook Quarry operations that may further damage the road. There are a number of possible resolutions of this litigation, including rerouting the traffic or rebuilding the 0.9 mile section of Joliet Road. The traffic has been rerouted around this .9 mile section of Joliet Road for almost four years. In some preliminary discussions, IDOT has claimed damages in excess of $30 million to settle the matter.

         Note 11, Other Commitments and Contingent Liabilities on page 47 of the Company's 2001 Annual Report to Shareholders is hereby incorporated by reference.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

         The matters and statements made or incorporated by reference into this Annual Report on Form 10-K constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. All such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Wherever possible, the Company has identified these forward-looking statements by words such as "anticipates," "may," "believes," estimates," "projects," "expects," "intends," and words of similar import. In addition to the statements included in this Annual Report on Form 10-K, the Company and its representatives may from time to time make other oral or written forward-looking statements. All forward-looking statements involve certain assumptions, risks and uncertainties that could cause actual results to differ materially from those included in or contemplated by the statements. These assumptions, risks and uncertainties include, but are not limited to, general business conditions, including the timing or extent of any recovery of the economy, the highly competitive nature of each of the industries in which the Company operates, pricing of the Company's products, weather and other natural phenomena, energy costs, the cost of hydrocarbon-based raw materials, the timing and amount of federal, state and local funding for infrastructure and the risks set forth in Item 3 "Legal Proceedings," and Note 11 "Other Commitments and Contingent Liabilities," Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations," Item 7A "Quantitative and Qualitative Disclosures About Market Risk," and other risks and uncertainties. All such forward-looking statements may be affected by inaccurate assumptions or by known or unknown risks and uncertainties, and therefore the statements may turn out to be wrong. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially.

         All forward-looking statements are made as of the date of filing or publication. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Investors are advised, however, to consult any further disclosures the Company makes in future filings with the Securities and Exchange Commission or in any of its press releases.

Item 4.  Submission of Matters to a Vote of Security Holders

         No matter was submitted to the Company's security holders through the solicitation of proxies or otherwise during the fourth quarter of 2001.

Item 4a.  Executive Officers of the Registrant

         The names, positions and ages of the executive officers of the Company are as follows:

Name	Position	Age
Donald M. James	Chairman and Chief Executive Officer	53
Guy M. Badgett, III	Senior Vice President-Construction Materials, East, and President, Southeast Division	53
William F. Denson, III	Senior Vice President, General Counsel and Secretary	58
Mark E. Tomkins	Senior Vice President, Chief Financial Officer and Treasurer	46
Robert A. Wason IV	Senior Vice President, Corporate Development	50
Richard K. Carnwath	Vice President, Planning and Development	53
J. Wayne Houston	Vice President, Human Resources	52
Ejaz A. Khan	Vice President, Controller and Chief Information Officer	45
John A. Heilala	Chairman, Chloralkali Business Unit	61
John L. Holland	President, Performance Chemicals Business Unit	59
Brad C. Rosenwald	President, Chloralkali Business Unit	49
Daniel J. Leemon	Chairman, Midwest and Midsouth Divisions	63
Sherrod B. Clarke, Jr.	President, Midsouth Division	49
Ronald G. McAbee	President, Mideast Division	55
Thomas R. Ransdell	President, Southwest Division	59
Daniel F. Sansone	President, Southern and Gulf Coast Division	49
James W. Smack	President, Western Division	58
Robert R. Vogel	President, Midwest Division	44
Michael R. Mills	Associate General Counsel	41
Harri J. Haikala	Assistant General Counsel	38
Norman Jetmundsen, Jr.	Assistant General Counsel	48

         The principal occupations of the executive officers during the past five years are set forth below:

         Donald M. James, was elected Chairman of the Board of Directors in May 1997. He became President and Chief Executive Officer in February 1997. Prior to that he served as President and Chief Operating Officer.

         Guy M. Badgett, III, was elected Senior Vice President, Construction Materials, East in February 1999. He was elected Chairman, Southern Division in May 1997. He has served as President, Southeast Division, since 1992.

         William F. Denson, III, was elected Senior Vice President and General Counsel in May 1999. Prior to that date he served as Senior Vice President-Law. He has also served as Secretary since April 1981.

         Mark E. Tomkins was elected Senior Vice President and Chief Financial Officer in January 2001. He was also appointed Treasurer in May 2001. From August 1998 to January 2001 he served as Senior Vice President and Chief Financial Officer of Great Lakes Chemical Company. From January 1997 to August 1998 he served as Vice President, Finance and Business Development Polymers Division, and from August 1996 to January 1997 he served as Vice President, Finance and Business Development, Electronic Materials Division of Allied Signal.

         Robert A. Wason IV was elected Senior Vice President, Corporate Development in December 1998. From 1996 until 1998 he served as President, Performance Systems Business Unit.

         Richard K. Carnwath has served as Vice President, Planning and Development since 1985.

         J. Wayne Houston was elected Vice President, Human Resources in October 1997. Prior to that time he served as Director of Compensation and Benefits.

         Ejaz A. Khan was elected Vice President and Controller in February 1999. Prior to that he served as Controller. He was appointed as Chief Information Officer as well in February 2000.

         Brad C. Rosenwald became President of the Chloralkali Business Unit in January 2002. Prior to that he served as Vice President, Manufacturing of the Chloralkali Business Unit.

         John A. Heilala became Chairman of the Chloralkali Business Unit in January 2002, pending his retirement in April 2002. Prior to that time he served as President, Chloralkali Business Unit.

         John L. Holland joined the Company in December 1998 as President of the Performance Chemicals Business Unit. Prior to that he served as President of BetzDearborn Water Management Group and Group Vice President, BetzDearborn, Inc.

         Sherrod B. Clarke, Jr. was appointed President of the Midsouth Division in November 2001. Prior to that, he served as Vice President and General Manager of West Region, Midsouth Division.

         Daniel J. Leemon became Chairman of the Midsouth Division in November 2001 and was appointed Chairman of the Midwest Division in November 2000. He also served as President, Midsouth Division until November 2001. Mr. Leemon plans to retire from the Company in April 2002.

         Ronald G. McAbee was appointed President of Mideast Division in January 1999. Prior to that time he served as Vice President, East Region of the Midsouth Division.

         Thomas R. Ransdell has served as President, Southwest Division since 1994. He also served as President, Vulcan Gulf Coast Materials, Inc., from 1987 to May 1997.

         Daniel F. Sansone is President of Southern and Gulf Coast Division. Formerly he served as President, Southern Division since July 1999 and President, Vulcan Gulf Coast Materials Division since May 1997. Prior to that time he served as Vice President, Finance.

         James W. Smack was appointed President of Western Division effective in January 1999. Prior to that time he served as President, Mideast Division.

         Robert R. Vogel was appointed President of the Midwest Division in November 2000. Prior to that he served as Vice President-Georgia for the Southeast Division.

         Michael R. Mills was appointed Associate General Counsel in July 2000. Prior to that time he served as Assistant General Counsel, Construction Materials Group.

         Harri J. Haikala was appointed Assistant General Counsel effective March 1, 2002. Prior to that time he served as Senior Attorney.

         Norman Jetmundsen, Jr. became Assistant General Counsel effective January 14, 2002. Prior to that time he was a partner at the Birmingham, Alabama, law firm of Bradley Arant Rose & White LLP.

PART II

Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters

The Company's Common Stock is traded on the New York Stock Exchange (ticker symbol VMC). As of February 28, 2002, the number of shareholders of record approximated 3,265. The closing price of the Common Stock on the New York Stock Exchange on February 28, 2002, was $48.33. The prices in the following table represent the high and low sales prices for the Company's Common Stock as reported on the New York Stock Exchange.

Quarter Ended			2001					2000
March 31 June 30 September 30 December 31		High $48.19 55.30 55.22 48.95		Low $40.75 43.60 37.50 40.46			High $ 47.75 48.88 47.00 48.44		Low $ 37.69 41.25 37.50 36.50

         Dividends paid in 2001 totaled $91,080,000, as compared with $84,765,000 paid in 2000. On February 8, 2002, the Board of Directors authorized a quarterly dividend of $.235 per share of Common Stock payable March 8, 2002, to holders of record on February 22, 2002. This quarterly dividend represents a 4.4% increase over quarterly dividends paid in 2001.

         The Company's policy is to pay out a reasonable share of net cash provided by operating activities as dividends, consistent on average with the payout record of past years, and consistent with the goal of maintaining debt ratios within prudent and generally acceptable limits. The future payment of dividends, however, will be within the discretion of the Board of Directors of the Company and depends on the Company's profitability, capital requirements, financial condition, growth, business opportunities and other factors which the Board of Directors may deem relevant.

Item 6.  Selected Financial Data

         The selected statement of earnings, per share data and balance sheet data for each of the 5 years ended December 31, 2001, set forth below have been derived from the audited consolidated financial statements of the Company. The following data should be read in conjunction with the consolidated financial statements of the Company and notes to consolidated financial statements on pages 33 through 36 and 37 through 50 respectively, of the Company's 2001 Annual Report to Shareholders, which are incorporated herein by reference.

	Year Ended December 31,
	2001		2000		1999		1998		1997
	(Amounts in millions, except per share data)
Net sales Total revenues Net earnings	$ $ $	2,755.3 3,020.0 222.7	$ $ $	2,491.7 2,744.6 219.9	$ $ $	2,355.8 2,607.8 239.7	$ $ $	1,776.4 1,969.8 255.9	$ $ $	1,678.6 1,848.9 209.1
Net earnings per: Basic shares outstanding Diluted shares outstanding	$2.20 $2.17		$2.18 $2.16		$2.38 $2.35		$2.54 $2.50		$2.06 $2.03
Total assets Long-term obligations Cash dividends declared per share	$ $	3,398.2 906.3 $0.90	$ $	3,228.6 685.4 $0.84	$ $	2,839.5 698.9 $0.78	$ $	1,658.6 76.5 $0.69	$ $	1,449.2 81.9 $0.63

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations

         "Management's Discussion and Analysis of Results of Operations and Financial Condition" on pages 25 through 31 and "Financial Terminology" on page 62 of the Company's 2001 Annual Report to Shareholders are incorporated herein by reference.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

         "Management's Discussion and Analysis of Results of Operations and Financial Condition" on page 30 of the Company's 2001 Annual Report to Shareholders is incorporated herein by reference.

Item 8.  Financial Statements and Supplementary Data

         The following information relative to this item is included in the Company's 2001 Annual Report to Shareholders on the pages shown below, which are incorporated herein by reference:

Page

Consolidated Financial Statements

33-36

Notes to Consolidated Financial Statements

37-50

Management's Responsibility for Financial Reporting and Internal Control

32

Independent Auditors' Report

32

Net Sales, Total Revenues, Net Earnings and Earnings Per Share Quarterly Financial
Data for Each of the 2 Years Ended December 31, 2001 and 2000 (Unaudited)

58

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

No information is required to be included herein pursuant to Item 304 of Regulation S-K.

PART III

Item 10.  Directors and Executive Officers of the Registrant

         On or before April 19, 2002, the Company will file a definitive proxy statement with the Securities and Exchange Commission pursuant to Regulation 14A (the Company's "2002 Proxy Statement"). The information under the headings "Election of Directors," "Nominees for Election to the Board of Directors" and "Directors Continuing in Office" included in the 2002 Proxy Statement are incorporated herein by reference. For the information required by Item 401 of Regulation S-K concerning executive officers of the registrant, reference is made to the information provided in Part I, Item 4(a) of this Annual Report on Form 10-K. Based solely on a review of Forms 3 and 4 and amendments thereto furnished to the Company pursuant to Rule 240.16a-3(e) during 2001, and of Form 5 and amendments thereto furnished to the Company pursuant to Rule 240.16a-3(e) with respect to 2001, the Company has not identified any persons subject to Section 16(a) of the Securities Exchange Act of 1934 who failed to file on a timely basis required forms. The information set forth under the heading "Section 16(a) Beneficial Ownership Reporting Compliance" included in the Company's 2002 Proxy Statement is incorporated herein by reference.

Item 11.  Executive Compensation

         The information under the headings "Compensation of Directors," "Executive Compensation," "Option Grants in 2001," "Report of the Compensation Committee," "Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values," "Shareholder Return Performance Presentation," "Retirement Income Plan," "Change in Control Employment Agreements" and "Executive Incentive Plan" included in the Company's 2002 Proxy Statement is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         The information under the headings "Stock Ownership of Certain Beneficial Owners" and "Stock Ownership of Management" included in the Company's 2002 Proxy Statement is incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions

         No information is required to be included herein pursuant to Item 404 of Regulation S-K.

PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

         (a) (1) Financial Statements

         The following financial statements are included in the Company's 2001 Annual Report to Shareholders on the pages shown below and are incorporated herein by reference:

Page

Consolidated Statements of Earnings

33

Consolidated Balance Sheets

34

Consolidated Statements of Cash Flows

35

Consolidated Statements of Shareholders' Equity

36

Notes to Consolidated Financial Statements

37-50

Management's Responsibility for Financial Reporting and Internal Control

32

Independent Auditors' Report

32

Net Sales, Total Revenues, Net Earnings and Earnings Per Share Quarterly Financial
Data for each of the 2 Years Ended December 31, 2001 and 2000 (Unaudited)

58

(a) (2) Financial Statement Schedules

The following financial statement schedule for the years ended December 31, 2001, 2000 and 1999 is included in Part IV of this report on the indicated page:

Schedule II

Valuation and Qualifying Accounts and Reserves

18

         Other schedules are omitted because of the absence of conditions under which they are required or because the required information is provided in the financial statements or notes thereto.

         Financial statements (and summarized financial information) of 50% or less owned entities accounted for by the equity method have been omitted because they do not, considered individually or in the aggregate, constitute a significant subsidiary.

          (a) (3) Exhibits

         The exhibits required by Item 601 of Regulation S-K and indicated below, other than Exhibit (12) which is on page 18 of this report, are either incorporated by reference herein or accompany the copies of this report filed with the Securities and Exchange Commission and the New York Stock Exchange. Copies of such exhibits will be furnished to any requesting shareholder of the Company upon payment of the costs of copying and transmitting the same.

Exhibit (3)(a)	Certificate of Incorporation (Restated 1988) of the Company as amended in 1989 and 1999 filed as Exhibit 3(a) to the Company's 1989 Form 10-K Annual Report and Exhibit 3(i) to the Company's 1999 Form 10-K Annual Report (File No. 1-4033). ¹
Exhibit (3)(b)	By-laws of the Company, as restated February 2, 1990, and as last amended July 13, 2001, filed as Exhibit 3(ii) to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001 (File No. 1-4033). ¹
Exhibit (4)(a)	Distribution Agreement dated as of May 14, 1991, by and among the Company, Goldman, Sachs & Co., Lehman Brothers and Salomon Brothers Inc., filed as Exhibit 1 to the Form S-3 filed on May 2, 1991 (Registration No. 33-40284). ¹
Exhibit (4)(b)	Indenture dated as of May 1, 1991, by and between the Company and First Trust of New York (as successor trustee to Morgan Guaranty Trust Company of New York) filed as Exhibit 4 to the Form S-3 on May 2, 1991 (Registration No. 33-40284). ¹
Exhibit (4)(c)	Senior Debt Indenture between the Company and The Bank of New York as trustee, dated as of August 31, 2001 filed as Exhibit 4.1 to the Company's Registration Statement on Form S-3 filed on September 5, 2001 (Registration No. 333-67586). ¹
Exhibit (4)(d)	Subordinated Debt Indenture between the Company and The Bank of New York as trustee, dated August 31, 2001 filed as Exhibit 4.3 to the Company's Registration Statement on Form S-3 filed on September 5, 2001 (Registration No. 333-67586). ¹
Exhibit (10)(a)	The Management Incentive Plan of the Company, as last amended and restated filed as Exhibit 10(a) to the Company's 1989 Form 10-K Annual Report (File No. 1-4033). ^1,2
Exhibit (10)(b)	The Unfunded Supplemental Benefit Plan for Salaried Employees filed as Exhibit 10(d) to the Company's 1989 Form 10-K Annual Report (File No. 1-4033). ^1,2
Exhibit (10)(c)	Amendment to the Unfunded Supplemental Benefit Plan for Salaried Employees. ²
Exhibit (10)(d)	The Deferred Compensation Plan for Directors Who Are Not Employees of the Company. ²
Exhibit (10)(e)	The 1996 Long-Term Incentive Plan of the Company filed as Exhibit 10(h) to the Company's 1995 Form 10-K Annual Report (File No. 1-4033). ^1,2
Exhibit (10)(f)	The Deferred Stock Plan for Nonemployee Directors of the Company. ²
Exhibit (10)(g)	The Restricted Stock Plan for Nonemployee Directors of the Company. ²
Exhibit (10)(h)	Executive Deferred Compensation Plan. ²
Exhibit (10)(i)	Change in Control Employment Agreement Form filed as Exhibit (10)(m) to the Company's 1999 Form 10-K Annual Report (File No. 1-4033). ^1,2
Exhibit (10)(j)	Change in Control Employment Agreement Form filed as Exhibit (10)(n) to the Company's 1999 Form 10-K Annual Report (File No. 1-4033). ^1,2
Exhibit (10)(k)	Executive Incentive Plan of the Company filed as Exhibit (10)(n) to the Company's 2000 Form 10-K Annual Report (File No. 1-4033). ^1,2
Exhibit (10)(l)	Supplemental Executive Retirement Agreement filed as Exhibit 10 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 (File No. 1-4033). ^1,2
Exhibit (12)	Computation of Ratio of Earnings to Fixed Charges for the five years ended December 31, 2001 (set forth on page 19 of this report).
Exhibit (13)	The Company's 2001 Annual Report to Shareholders.
Exhibit (21)	List of the Company's subsidiaries as of December 31, 2001.
Exhibit (23)	Consent of Deloitte & Touche LLP
Exhibit (24)	Powers of Attorney

Information, financial statements and exhibits required by Form 11-K with respect to the Company's Thrift Plan for Salaried Employees, Construction Materials Divisions Hourly Employees Savings Plan and Chemicals Division Hourly Employees Savings Plan, for the fiscal year ended December 31, 2001, will be filed as one or more amendments to this Form 10-K on or before June 28, 2002, as permitted by Rule 15d-21 under the Securities Exchange Act of 1934.

¹ Incorporated by reference.
² Management Contract or Compensatory Plan.

INDEPENDENT AUDITORS' REPORT

Vulcan Materials Company:

We have audited the consolidated financial statements of Vulcan Materials Company and its subsidiary companies as of December 31, 2001, 2000 and 1999 and for the years then ended, and have issued our report thereon dated February 1, 2002; such consolidated financial statements and report are included in your 2001 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of Vulcan Materials Company and its subsidiary companies, listed in Item 14. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements as a whole, presents fairly in all material respects the information shown therein.

/s/ DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP

Birmingham, Alabama
February 1, 2002

Schedule II

VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the Years Ended December 31, 2001, 2000 and 1999
Amounts in Thousands

Column A	Column B	Column C	Column D	Column E		Column F
Description	Balance at Beginning of Period	Additions Charged to Costs and Expenses	Additions Charged to Other Accounts(4)	Deductions		Balance at End Of Period
2001
Accrued Environmental Costs Accrued Reclamation Costs Doubtful Receivables All Other (3)	$ 13,777 23,963 8,982 8,848	$ 1,707 8,738 8,184 4,241		$ 2,078 6,610 10,263 4,666	(1) (2)	$ 13,406 26,091 6,903 8,423
2000
Accrued Environmental Costs Accrued Reclamation Costs Doubtful Receivables All Other(3)	$ 8,800 23,559 9,722 8,985	$ 974 3,503 1,902 5,586	$ 5,200	$ 1,197 3,099 2,642 5,723	(1) (2)	$ 13,777 23,963 8,982 8,848
1999
Accrued Environmental Costs Accrued Reclamation Costs Doubtful Receivables All Other(3)	$ 3,973 0 7,391 1,958	$ 145 3,144 (40) 6,772	$ 4,844 23,460 5,381 7,512	$ 162 3,045 3,010 7,257	(1) (2)	$ 8,800 23,559 9,722 8,985

(1)   Expenditures on environmental remediation projects.
(2)   Write-offs of uncollected accounts and worthless notes, less recoveries.
(3)   Valuation and qualifying accounts and reserves for which additions, deductions and balances are
        individually insignificant.
(4)   Reserves established with acquisitions which increased goodwill.

Exhibit 12

VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
For the Years Ended December 31
Amounts in Thousands

	2001	2000	1999	1998	1997
Fixed charges: Interest expenses before capitalization credits Amortization of financing costs One-third of rental expense Total fixed charges	$ 64,026 494 24,340 $ 88,860	$ 54,236 348 21,668 $ 76,252	$ 53,022 267 20,798 $ 74,087	$ 7,224 93 13,668 $ 20,985	$ 8,074 104 9,735 $ 17,913
Net earnings Provisions for income taxes Fixed charges Capitalized interest credits Amortization of capitalized interest Earnings before income taxes as adjusted	$ 222,680 101,373 88,860 (2,746) 754 $ 410,921	$ 219,893 92,345 76,252 (6,150) 686 $ 383,026	$ 239,693 111,868 74,087 (4,445) 693 $ 421,896	$ 255,908 118,936 20,985 (442) 715 $ 396,102	$ 209,145 91,356 17,913 (1,160) 708 $ 317,962
Ratio of earnings to fixed charges	4.6	5.0	5.7	18.9	17.8

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 27, 2002.

	VULCAN MATERIALS COMPANY
	By /s/Donald M. James Donald M. James Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/Donald M. James Donald M. James	Chairman, Chief Executive Officer and Director (Principal Executive Officer)	March 27, 2002
/s/Mark E. Tomkins Mark E. Tomkins	Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)	March 27, 2002
/s/Ejaz A. Khan Ejaz A. Khan	Vice President, Controller and Chief Information Officer (Principal Accounting Officer)	March 27, 2002
The following directors: Philip J. Carroll, Jr. Livio D. DeSimone Phillip W. Farmer H. Allen Franklin Ann McLaughlin Korologos Douglas J. McGregor James V. Napier Donald B. Rice Orin R. Smith	Director Director Director Director Director Director Director Director Director
By /s/William F. Denson, III William F. Denson, III Attorney-in-Fact		March 27, 2002

Exhibit (10)(c)
AMENDMENT TO THE VULCAN MATERIALS COMPANY UNFUNDED SUPPLEMENTAL BENEFIT PLAN FOR SALARIED EMPLOYEES
The Vulcan Materials Company Unfunded Supplemental Benefit Plan is hereby amended as follows, effective May 11, 2001:
1.	Amend Section 2.1(c) to read as follows:
	(1) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of Common Stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this Section 2.1(c); or
	(2) Individuals who, as of the Effective Date of this Plan, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
	(3) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
	(4) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

	VULCAN MATERIALS COMPANY By: /s/Donald M. James Donald M. James Chairman and Chief Executive Officer
ATTEST: By: /s/William F. Denson, III William F. Denson, III Secretary [CORPORATE SEAL]

Exhibit (10)(d)
AMENDMENT AND RESTATEMENT OF THE VULCAN MATERIALS COMPANY DEFERRED COMPENSATION PLAN FOR DIRECTORS WHO ARE NOT EMPLOYEES OF THE COMPANY
1. Eligibility and Purpose Each member of the Board of Directors (the "Board") of Vulcan Materials Company (the "Company") who is not an employee of the Company or its subsidiaries shall be eligible to participate in the Vulcan Materials Company Deferred Compensation Plan for Directors Who Are Not Employees of the Company (the "Plan"). Any member of the Board who elects to participate in the Plan ("Director") shall thereby defer the receipt of all or any portion of the annual retainer, meeting and committee fees payable by the Company to such Director for serving as a member of the Board or one or more of its committees (the "Deferrable Compensation").
2. Deferral of Compensation A Director may elect to defer all or any portion of the Deferrable Compensation by executing a form prescribed by the Secretary of the Company and delivering such form to the Secretary prior to the first day of the calendar year for which the election is to be effective. In the calendar year that a Director first becomes eligible to participate in the Plan, such Director may elect to defer all or any portion of the Deferrable Compensation, provided that the election form is delivered to the Secretary within sixty (60) days after the Director first becomes eligible to participate in the Plan for such year. An election made in this manner will be applicable only to Deferrable Compensation earned after the effective date of the election. Elections made pursuant to this Section 2 shall be irrevocable. The amount of Deferrable Compensation deferred shall be paid or distributed to the Director in accordance with the provisions of Section 5 or Section 6, below.
3. Deferred Compensation Account The Company shall establish a deferred compensation account (the "Account") for the Director. As of the date payments of Deferrable Compensation otherwise would be made to the Director, the Company shall credit to the Account, in cash or stock equivalents, or a combination thereof, as hereinafter provided, that amount of the Deferrable Compensation which the Director has elected to defer.
4. Cash or Stock Election (a) As of the date payments of Deferrable Compensation otherwise would be made to the Director, the amount due the Director shall be credited to the Account either as a cash allotment or as a stock allotment, or a portion to each, as the Director shall elect at the time the deferral election is made. (b) If a cash allotment is elected in whole or in part, the Account shall be credited with the dollar amount of the allotment. Interest (at the rate described below) on the Average Daily Balance (computed as described below) shall be credited to the Account as of the last day of each calendar month before and after the termination of the Director's service and after the Director's death until the total balance in the Account has been paid out in accordance with the provisions of Section 5 or Section 6, below. The interest rate for each calendar month shall be the composite 30-day offering rate for prime commercial paper placed through dealers (rated A-1 by Standard & Poor's Corporation or its successor and P-1 by Moody's Investors Service, Inc., or its successor) for the last business day of the immediately preceding calendar month as published by the Federal Reserve Bank of New York. The "Average Daily Balance" shall be the quotient obtained by dividing the sum of the closing balance in the Account at the end of each calendar day in a calendar month by the number of days in such calendar month.
(c)(1) If a stock allotment is elected in whole or in part, the Account shall be credited with a stock equivalent that shall be equal to the number of full and fractional shares of the Company's Common Stock, par value $1.00 per share (the "Common Stock"), that could be purchased with the dollar amount of the allotment using the Average Closing Price (as defined below) of the Common Stock for the twenty (20) trading days ending on the day preceding the date the Account is so credited. The "Average Closing Price" of the Common Stock means the average of the daily closing prices for a share of the Common Stock for the applicable twenty (20) trading days on the Composite Tape for New York Stock Exchange - Listed Stocks, or, if the Common Stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on which the Common Stock is listed, or, if the Common Stock is not listed on any such exchange, the average of the daily closing bid quotations with respect to a share of the Common Stock for such twenty (20) trading days on the National Association of Securities Dealers, Inc., Automated Quotations System or any system then in use, or, if no such quotations are available, the fair market value of a share of the Common Stock as determined by a majority of the Board; provided, however, that if a Change in Control (as defined below) shall have occurred, then such determination shall be made by a majority of the Continuing Directors (as defined below).
(2) The Account also shall be credited as of the payment date for each dividend on the Common Stock with additional stock equivalents computed as follows: The dividend paid, either in cash or property (other than Common Stock), upon a share of Common Stock to a shareholder of record shall be multiplied by the number of stock equivalents in the Account and the product thereof shall be divided by the Average Closing Price of the Common Stock for the twenty (20) trading days ending on the day preceding the dividend payment date. In the case of dividends payable in property, the amount paid shall be based on the fair market value of the property at the time of distribution of the dividend, as determined by a majority of the Board; provided, however, that if a Change in Control shall have occurred, then such determination shall be made by a majority of the Continuing Directors.
(3) In the event of any change in the Common Stock, upon which the stock equivalency hereunder is based, by reason of a merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange of shares, or any other change in corporate structure, the number of shares credited to the Account shall be adjusted in such manner as a majority of the Board shall determine to be fair under the circumstances; provided, however, that if a Change in Control shall have occurred, then such determination shall be made by a majority of the Continuing Directors.
5. Distribution (a) At the Director's election, made at the time that a deferral election is made, the balance in the Account shall be paid out to the Director when: (1) the Director ceases to hold office as a member of the Board; or (2) the period of years which the Director specifies has elapsed from the date deferral of Deferrable Compensation. All elections as to the time at which the payout will commence shall be irrevocable except as otherwise provided in Section 7(b).
(b) The balance in the Account shall be paid either in a lump sum or, at the Director's election, in quarterly, semiannual or annual installments over a period of years not to exceed ten (10) years (the "Payout Period"). Such election shall be made by executing a form prescribed by the Secretary of the Company and delivering such form to the Secretary at the time the director begins participating in the Plan. A director may change his election for amounts to be earned in the future at any time. However, a director may only modify a payout election with respect to amounts already earned in accordance with Section 7(b) below. The amount of each installment shall be determined as of each payment date by dividing the then balance in the Account by the then remaining number of payment dates in the Payout Period. The lump sum or first periodic installment shall be paid by the Company as promptly as is practicable.
(c) In the event of the death of the Director prior to distribution of the entire balance in the Director's Account, the balance in the Account shall be paid as promptly as is practicable in a lump sum to
	(i) the surviving beneficiary (or surviving beneficiaries in such proportions) as the Director may have designated by notice in writing to the Company unrevoked by a later notice in writing to the Company or, in the absence of an unrevoked notice, (ii) the beneficiary (or beneficiaries in such proportions) as the Director may have designated by will or, if no beneficiary is designated, (iii) the legal representative of the Director's estate.
(d) The provisions of the Plan shall apply to and be binding upon the beneficiaries, distributees and personal representatives and any other successors in interest of the Director.
(e) Distribution of the cash in the Account shall be made in cash. Distribution of stock equivalents in the Account shall be made in the corresponding number of whole shares of Common Stock. Fractional shares shall be paid in cash.
(f) The Company shall deduct from all distributions hereunder any taxes required to be withheld by the federal or any state or local government.
6. Acceleration of Distribution (a) "Change in Control" means: (1) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of Common Stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this Section 6; or
(2) Individuals who, as of the Effective Date (as defined below) of this Plan, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(3) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(4) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
(b) Notwithstanding any other provision of the Plan, if a Change in Control occurs and at any time after the occurrence of such Change in Control any of the following events occurs: (1) the Director ceases to hold office as a member of the Board; or (2) the Plan is terminated; then the balance in the Account shall be payable in a lump sum (in cash or in shares of Common Stock, as is applicable) to the Director. Such payment shall be made by the Company as promptly as practicable, but not more than thirty (30) days following the date on which the right to such payment arose.
(c) The Company shall promptly reimburse the Director for all legal fees and expenses reasonably incurred in successfully seeking to obtain or enforce any right or benefit provided under this Section 6.
(d) This Section 6 may not be amended or modified after the occurrence of a Change in Control.
7. Miscellaneous (a) The election to defer Deferrable Compensation, including the allocation of the amount deferred between the cash allotment and the stock allotment portion of the Account shall be irrevocable as to amounts earned in the calendar year following the year in which the election is made or, in the case of a Director who first becomes eligible to participate in the Plan during the calendar year, for the remaining portion of the year in which the election is made and, also shall be effective as to and irrevocable for any subsequent calendar year, unless a new election form reflecting a change or revocation of the deferral election or a change in the allocation of the amount deferred between the cash allotment and the stock allotment portion of the Account with respect to amounts earned in such subsequent calendar year is delivered to the Secretary of the Company not later than ten (10) days preceding the first day of the calendar year to which such change or revocation is applicable.
(b) A Director may subsequently modify the payout election made pursuant to Section 5(a); provided that such modification shall be effective only with respect to payments that otherwise would be made at least one year after notice of such modification is received by the Secretary of the Company or if approved by the Board. However, a participant may elect to change the number of payments in any given year (i.e., quarterly to annual) without approval of the Board by giving written notice to the Secretary of the Company.
(c) Neither the Director nor any other person shall have any interest in any fund or in any specific asset of the Company by reason of amounts credited to the Account of a Director hereunder, nor the right to exercise any of the rights or privileges of a shareholder with respect to any stock equivalents credited to the Account, nor the right to receive any distribution under the Plan except as and to the extent expressly provided for in the Plan. Distributions hereunder shall be made from the general funds of the Company, and the rights of the Director shall be those of an unsecured general creditor of the Company. The Company may establish a trust pursuant to a trust agreement and make contributions thereto for the purpose of assisting the Company in meeting its obligations hereunder. Any such trust agreement shall contain procedures to the following effect:
	(i) In the event of the insolvency of the Company, the trust fund will be available to pay the claims of any creditor of the Company to whom a distribution may be made in accordance with state and federal bankruptcy laws. The Company shall be deemed to be "insolvent" if the Company is subject to a pending proceeding as a debtor under the Federal Bankruptcy Code (or any successor federal statute) or any state bankruptcy code. In the event that the Company becomes insolvent, the Board and chief executive officer of the Company shall notify the trustee of the event as soon as practicable. Upon receipt of such notice, or if the trustee receives other written allegations of the Company's insolvency, the trustee shall cease making payments of benefits from the trust fund, shall hold the trust fund for the benefit of the Company's creditors, and shall take such steps as are necessary to determine within 30 days whether the Company is insolvent. In the case of the trustee's actual knowledge of or other determination of the Company's insolvency, the trustee will deliver assets of the trust fund to satisfy claims of the Company's creditors as directed by a court of competent jurisdiction. (ii) The trustee shall resume payments of benefits under the trust agreement only after the trustee has determined that the Company is not insolvent (or is no longer insolvent, if the trustee had previously determined the Company to be insolvent) or upon receipt of an order of a court of competent jurisdiction requiring such payment. If the trustee discontinues payment of benefits pursuant to clause (i), above, and subsequently resumes such payment, the first payment on account of a Director following such discontinuance shall include an aggregate amount equal to the difference between the payments which would have been made on account of such Director by the Company during any such period of discontinuance, plus interest on such amount at a rate equivalent to the net rate of return earned by the trust fund during the period of such discontinuance.
(e) The interest of the Director under the Plan shall not be assignable by the Director or the Director's beneficiary or legal representative, either by voluntary assignment or by operation of law, and any assignment of such interest, whether voluntary or by operation of law, shall be ineffective to transfer the Director's interest; provided, however, that (i) the Director may designate a beneficiary to receive any benefit payable under the Plan upon death, and (ii) the legal representative of the Director's estate may assign the Director's interest under the Plan to the persons entitled to any benefit payable under the Plan upon the Director's death.
(f) Except as provided in Section 6, above, the Company may amend, modify, terminate or discontinue the Plan at any time; provided, however, that no such action shall reduce the amounts credited to the Account of the Director immediately prior to such action, nor change the time, method or manner of distribution of such amount, including, without limitation, distribution in accordance with Section 6, above.
(g) Nothing contained herein shall impose any obligation on the Company to continue the tenure of the Director beyond the term for which such Director may have been elected or shall prevent the removal of such Director.
(h) This Plan shall be interpreted by and all questions arising in connection therewith shall be determined by a majority of the Board, whose interpretation or determination, when made in good faith, shall be conclusive and binding, unless a Change in Control shall have occurred, in which case such interpretation or determination shall be made by a majority of the Continuing Directors.
(i) The effective date (the "Effective Date") of this Amendment and Restatement of the Plan shall be May 11, 2001.
IN WITNESS WHEREOF, the Company has caused this Amendment and Restatement of the Vulcan Materials Company Deferred Compensation Plan for Directors Who Are Not Employees of the Company to be executed for and in its name and its corporate seal to be hereto affixed and attested by its duly authorized Secretary, this 11 ^th day of May, 2001.
ATTEST: By: /s/William F. Denson, III William F. Denson, III Secretary CORPORATE SEAL May 11, 2001		VULCAN MATERIALS COMPANY By: /s/Donald M. James Donald M. James Chairman and Chief Executive Officer

Exhibit (10)(f)

VULCAN MATERIALS COMPANY

DEFERRED STOCK PLAN
FOR NONEMPLOYEE DIRECTORS

	Approved by the Shareholders May 17, 1996 As amended through May 11, 2001
VULCAN MATERIALS COMPANY DEFERRED STOCK PLAN FOR NONEMPLOYEE DIRECTORS

1.	Definitions .
	As used herein, the following terms shall have the meanings hereinafter set forth:
	(a)	" Annual Meeting " means the Annual Meeting of the shareholders of the Company.
	(b)	" Board " shall mean the Board of Directors of the Company.
	(c)	" Company " shall mean Vulcan Materials Company, a New Jersey corporation.
	(d)	" Deferred Stock Unit " means the equivalent of one Share, as established pursuant to this Plan.
	(e)	" Directors Emeriti Plan " means the Vulcan Materials Company Plan for Directors Emeriti and Other Eligible Directors, as amended or restated from time to time.
	(f)	" Exchange Act " means the Securities Exchange Act of 1934, as amended.
	(g)	" Fair Market Value Per Share " means the average of the daily closing prices of a Share as reported on the New York Stock Exchange for the twenty (20) trading days prior to the date of determination, or if the Shares are not listed on such exchange, on the principal United States securities exchange registered under the Exchange Act on which the Shares are listed.
	(h)	" Nonemployee Director " means any person who is a member of the Board and who is not, as of the date of an award under this Plan, an employee of the Company or any of its subsidiaries.
	(i)	" Plan " means this Vulcan Materials Company Deferred Stock Plan for Nonemployee Directors, as it may be amended from time to time.
	(j)	" Share " means a share of the Company's Common Stock, $1.00 par value.
	(k)	" Stock Plan " means the Vulcan Materials Company Stock Plan for Nonemployee Directors.

2.       Purpose and Effective Date .

         The primary purpose of the Plan is to advance the interests of the Company and its shareholders by providing for the payment of a greater portion of the compensation of Nonemployee Directors in the form of equity by the grant to such directors of Deferred Stock Units under the terms set forth herein. By thus compensating Nonemployee Directors and increasing Nonemployee Directors' equity position in the Company, the Company seeks to attract, retain, compensate, and motivate those highly competent individuals upon whose judgment, initiative, leadership, and continued efforts the success of the Company in large measure depends and to align more closely the interests of the Nonemployee Directors with those of the shareholders of the Company.

        This Plan is designed to replace the Stock Plan and the Directors Emeriti Plan. The Stock Plan shall be terminated upon the Effective Date of this Plan. The Directors Emeriti Plan shall be phased out after adoption of this Plan as set forth below. New Nonemployee Directors shall not be permitted to participate in the Directors Emeriti Plan, and shall instead be permitted to participate in this Plan. Furthermore, current Nonemployee Directors who elect to terminate participation in the Directors Emeriti Plan after the adoption of this Plan shall be entitled to a larger annual grant pursuant to paragraph 6 below.

        The Plan shall be deemed adopted and shall become effective as of the date of its approval by the affirmative vote of the holders of a majority of the Shares of the Company voted in person or by proxy at the next Annual Meeting (the "Effective Date"). No grants of Deferred Stock Units shall be made unless and until such shareholder approval is obtained.

3.       Eligibility .

        Each director who as of the date of any award made pursuant to the Plan is not an employee of the Company or any of its subsidiaries shall be eligible to participate in the Plan.

4.       Shares of Common Stock Available .

        The number of Shares that may be issued pursuant to the Plan shall not exceed 100,000, subject to proportionate adjustment in the event of any stock split, reverse stock split, reorganization or recapitalization.

5.       Deferred Stock Account .

        The Company shall establish a deferred stock account (an "Account") for each Nonemployee Director participating in the Plan. On each Award Date (as defined below) and on each Dividend Date (as defined below), as the case may be, the Company shall credit the Account with the number of Deferred Stock Units determined in accordance with paragraph 6 below. Distributions from a Nonemployee Director's Account shall be made in Shares upon the retirement of a Nonemployee Director, unless the distributions are accelerated in accordance with paragraphs 8 or 9 below. The value of the Deferred Stock Units is dependent upon the fair market value of the Shares on the date the Shares are distributed to the Nonemployee Director, and is therefore subject to market fluctuations in value until such distribution.

6.       Annual Awards .

        (a)        On or prior to the Effective Date of the Plan, each Nonemployee Director shall make an irrevocable election to continue or discontinue participation in the Company's Directors Emeriti Plan. On the date that is six (6) months after the Effective Date and on June 1 of each year thereafter (an "Award Date"), the Company shall credit to the Account of (i) each Nonemployee Director who on or prior to the Effective Date has made an irrevocable election not to continue to participate in the Director's Emeriti Plan and (ii) each person who becomes a Nonemployee Director after the Effective Date, the number of Deferred Stock Units calculated by dividing an amount equal to forty percent (40%) of the annual retainer payable to Nonemployee Directors then in effect by the Fair Market Value Per Share as of the applicable Award Date. The Account of each Nonemployee Director who does not irrevocably elect on or prior to the Effective Date to discontinue his or her participation in the Directors Emeriti Plan shall be credited on each Award Date with the number of Deferred Stock Units calculated by dividing an amount equal to fifteen percent (15%) of the annual retainer payable to Nonemployee Directors then in effect by the Fair Market Value Per Share as of the applicable Award Date.

        (b)        At any time a balance is maintained in a Nonemployee Director's Account, there shall be credited to the Account of such Nonemployee Director additional Deferred Stock Units on each regular cash dividend payment date (a "Dividend Date"). The number of such additional Deferred Stock Units shall be determined by (i) multiplying the total number of Deferred Stock Units (including fractional Deferred Stock Units) credited to the Account immediately prior to the Dividend Date by the amount of the dividend and (ii) dividing the product by the Fair Market Value Per Share as of the day preceding the Dividend Date.

        (c)        In the event of any change in the outstanding Shares upon which the stock equivalency hereunder is based, by reason of a merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange of shares, or any other change in corporate structure or in the event of any dividend that is paid in Shares or other property, the number of Deferred Stock Units credited to the Account shall be adjusted in such a manner as a majority of the Board shall determine to be fair under the circumstances; provided, however, that if a Change in Control shall have occurred, then such determination shall be made by a majority of the Continuing Directors. In the case of dividends payable in property, the amount paid shall be based on the fair market value of the property at the time of distribution of the dividend, as determined by a majority of the Board, or, in the event of a Change in Control, by a majority of the Continuing Directors.

7.       Distribution .

        (a)        Except as otherwise provided herein, the balance of each Nonemployee Director's Account shall be paid to the Nonemployee Director, in a lump sum or in installments, as determined by the Nonemployee Director in accordance with paragraph 7(f) below, commencing at the beginning of the first quarter after the first Annual Meeting following the date that such director reaches the mandatory retirement age then in effect.

        (b)        In the event of the death of the Nonemployee Director prior to such director's retirement or prior to the distribution of the entire balance in such director's Account, the entire balance in the Account as of the date of the Nonemployee Director's death shall be paid in Shares in a lump sum or in installments, as determined by the Nonemployee Director in accordance with paragraph 7(f) below, to the surviving beneficiary or beneficiaries as the Nonemployee Director may have designated by notice in writing to the Company or by will, or, if no beneficiaries are so designated, the legal representative of such director's estate.

        (c)        If a Nonemployee Director shall become totally and permanently disabled, as determined by a majority of the Board, while he or she is a director of the Company, the entire balance in the Account as of the date of such total and permanent disability shall be paid to such Nonemployee Director, or his or her personal representative, in a lump sum or in installments, as determined by the Nonemployee Director in accordance with paragraph 7(f) below, within one hundred twenty (120) days of the date of such total and permanent disability.

        (d)        If a Nonemployee Director ceases to be a director of the Company for any reason other than due to death or total and permanent disability, including, without limitation, the failure of such person to be re-elected as a director of the Company by the shareholders of the Company, the balance of such director's Account as of the date such person ceases to be a director of the Company shall be paid in a lump sum or in installments, as determined by the Nonemployee Director in accordance with paragraph 7(f) below, to such director within one hundred twenty (120) days of the date such person ceases to be a director of the Company.

        (e)        All distributions of Deferred Stock Units made pursuant to this Plan shall be in Shares in an amount equal to the number of Deferred Stock Units held in the Account and to be distributed. On the date of any such distribution, the Company shall cause to be issued and delivered to such Nonemployee Director a stock certificate evidencing the Shares registered in the name of such Nonemployee Director, or such other person as the Nonemployee Director may designate.

        (f)        All distributions of Shares in accordance with this paragraph 7 shall be made, at such director's election, either in a lump sum or in monthly, quarterly, semiannual or annual installments, provided , however , that such director shall have delivered to the Secretary of the Company a form specifying the director's election at least six (6) months prior to the date payments are to commence. In the event that such director fails to make a timely election, the distribution of Shares shall be made in a lump sum. Deferred Stock Units representing fractional Shares shall be paid in cash.

        (g)        The provisions of this Plan shall apply to and be binding upon the beneficiaries, distributees, and personal representatives, and any other successors in interest of the Nonemployee Director.

        (h)        The Company shall deduct from all distributions hereunder any taxes required to be withheld by the federal, state or local law.

8.       Acceleration of Distribution .

        (a)        " Change in Control " means:

	(1) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of Common Stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this Section 8(a); or
	(2) Individuals who, as of the Effective Date of this Plan, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
	(3) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
	(4) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(b) Notwithstanding any other provision of the Plan, if a Change in Control occurs and at any time after the occurrence of such Change in Control either of the following events occurs:

	i) the Nonemployee Director ceases for any reason to be a director of the Company; or
	ii) the Plan is terminated;

        then the entire balance of the Account shall be payable in a lump sum to the director in Shares. Such payment shall be made by the Company as promptly as practicable, but not more than thirty (30) days following the date on which the right to such payment arose.

        (c)         The Company shall promptly reimburse the director for all legal fees and expenses reasonably incurred in successfully seeking to obtain or enforce any right or benefit provided under this paragraph 8.

        (d)         This paragraph 8 may not be amended or modified after the occurrence of a Change in Control.

9.       Nontransferability of Deferred Stock Units .

        No Deferred Stock Units shall be transferred by a Nonemployee Director other than by will or the laws of descent and distribution, or, to the extent permitted by Rule 16b-3 under the Exchange Act, pursuant to a qualified domestic relations order as defined by the Internal Revenue Code of 1986, as amended (the "Code").

10.      Amendment and Termination .

        Unless approved by the shareholders of the Company, no amendment of the Plan shall be effective which would (i) materially increase the maximum number of Shares that may be issued under the Plan, (ii) materially increase the benefits accruing to participants under the Plan, or (iii) materially modify the requirements as to eligibility for participation in the Plan. No amendment to the Plan shall materially and adversely affect any right of any Nonemployee Director with respect to any Deferred Stock Units theretofore credited without such Nonemployee Director's written consent.

11.      Term .

        The Plan shall continue in effect without limit unless and until the Board otherwise determines.

12.      Compliance with SEC Regulations .

        It is the Company's intent that the Plan comply with the provisions of Section 16 of the Exchange Act and the rules promulgated thereunder. To the extent that any provision of the Plan is later found not to be in compliance with Section 16 or such rules, such provision shall be deemed to be null and void.

13.      Miscellaneous .

        (a)         Neither the Plan nor any action taken hereunder shall be construed as giving any Nonemployee Director any right to continue to serve as a director of the Company or otherwise to be retained in the service of the Company.

        (b)        No Shares shall be issued hereunder unless and until counsel for the Company shall be satisfied such issuance will be in compliance with applicable federal, state and other securities laws and regulations.

        (c)        The expenses of the Plan shall be borne by the Company.

        (d)        Neither the Nonemployee Director nor any other person shall have any interest in any fund or in any specific asset of the Company by reason of amounts credited to the Account of such director, nor the right to exercise any of the rights or privileges of a shareholder with respect to any Deferred Stock Unit credited to such Account, nor the right to receive any distribution under the Plan except as expressly provided herein. Distributions hereunder shall be made from the general funds of the Company, and the rights of the director shall be those of an unsecured general creditor of the Company.

        (e)        The Plan, the grant of Deferred Stock Units thereunder, and the obligation of the Company to deliver Shares, shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any governmental or regulatory agency or national securities exchange as may be required. The Company shall not be required to issue or deliver any certificates for Shares prior to the completion of any registration or qualification of such Shares under any federal or state law or any ruling or regulation of any governmental body or national securities exchange which the Company shall, in its sole discretion, determine to be necessary or advisable.

        (f)        This Plan shall be interpreted by and all questions arising in connection therewith shall be determined by a majority of the Board, whose interpretation or determination, when made in good faith, shall be conclusive and binding, except in the event of a Change in Control, in which case such interpretation and determination shall be made by a majority of the Continuing Directors.

        IN WITNESS WHEREOF, the Company has caused this Deferred Stock Plan for Nonemployee Directors to be executed for and in its name and its corporate seal to be hereto affixed and attested by its duly authorized Secretary this 11 ^th day of May 2001.

ATTEST:

        /s/William F. Denson, III
          William F. Denson, III
                 Secretary

[SEAL]

VULCAN MATERIALS COMPANY

/s/Donald M. James
Donald M. James
Chairman and Chief Executive Officer

Exhibit (10)(g)

VULCAN MATERIALS COMPANY

RESTRICTED STOCK PLAN
FOR NONEMPLOYEE DIRECTORS

Effective Date November 1, 1997
As Approved on July 18, 1997
As Amended through May 11, 2001

VULCAN MATERIALS COMPANY RESTRICTED STOCK PLAN FOR NONEMPLOYEE DIRECTORS Table of Contents
		Page
1.	Definitions Beneficiary Board Change in Control Company Deferred Stock Unit Effective Date Exchange Act Fair Market Value Per Share Nonemployee Director Plan Restricted Share Share	1 1 1 1 2 2 2 2 2 2 3 3 3
2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.	Purposes and Effective Date Eligibility Grants of Restricted Shares Terms and Conditions of Grants of Restricted Shares Delivery of Restricted Shares Deferred Stock Account Deferred Stock Units Distribution Attributable to Deferred Stock Units Effect of Change in Control Amendment and Termination Term Compliance with SEC Regulations Miscellaneous	3 3 3 4 5 6 7 7 8 9 9 9 9

VULCAN MATERIALS COMPANY
RESTRICTED STOCK PLAN FOR
NONEMPLOYEE DIRECTORS

1. Definitions.

As used herein, the following terms shall have the meanings hereinafter set forth:

(a)	"Beneficiary" shall mean the individual or entity designated by the Nonemployee Director to receive, upon the death of the Nonemployee Director, undelivered Restricted Shares as to which the applicable restrictions have expired and the balance of the Nonemployee Director's Account attributable to Deferred Stock Units. If no such designation is made, or if the designated individual predeceases the Nonemployee Director or the entity no longer exists, then the Beneficiary shall be the Nonemployee Director's estate.
(b)	"Board" shall mean the Board of Directors of the Company.
(c)	"Change in Control" shall mean
	(1) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of Common Stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this Section 1(c); or
	(2) Individuals who, as of the Effective Date (as defined below) of this Plan, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
	(3) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
	(4) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
(d)	"Company" shall mean Vulcan Materials Company, a New Jersey corporation.
(e)	"Deferred Stock Unit" shall mean the equivalent of one Share, as established pursuant to this Plan.
(f)	"Effective Date" shall mean November 1, 1997.
(g)	"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(h)	"Fair Market Value Per Share" shall mean the average of the daily closing prices of Shares as reported on the New York Stock Exchange for the twenty (20) trading days prior to the date of determination of the number of shares subject to the grant by the Board in accordance with Section 4 below, or if the Shares are not listed on such exchange, on the principal United States securities exchange registered under the Exchange Act on which the Shares are listed.
(i)	"Nonemployee Director" shall mean any person who is a member of the Board who is not, as of the date of a grant of Restricted Shares under this Plan, an employee or an officer of the Company or any of its subsidiaries.
(j)	"Plan" shall mean this Vulcan Materials Company Restricted Stock Plan for Nonemployee Directors, as it may be amended from time to time.
(k)	"Restricted Share" shall mean a Share granted to a Nonemployee Director in accordance with paragraph 4 and subject to the restrictions set forth in paragraph 5.
(l)	"Share" shall mean a share of the Company's common stock, $1.00 par value, and such other stock and securities as may be substituted therefor in accordance with paragraph 6(b).

2.          Purposes and Effective Date.

             The purposes of the Plan are to promote a greater identity of interests between the Company's Nonemployee Directors and its stockholders through increasing ownership of Company common stock by the Nonemployee Directors and to assist the Company in attracting and retaining qualified individuals to serve as Nonemployee Directors by affording them an opportunity to share in the future successes of the Company.

             The Plan was adopted on July 18, 1997 and shall become effective on November 1, 1997. No grants of Restricted Shares shall be made until November 1, 1997.

3.          Eligibility.

             Each director who as of the date of any grant made pursuant to the Plan is not an employee of the Company or any of its subsidiaries shall be eligible to participate in the Plan.

4.          Grants of Restricted Shares.

             At the Annual Meeting of the Board each year the Board shall determine the number of restricted shares to be granted to each Board member. The restricted shares shall be granted on June 1 of each year following such determination date.

5.          Terms and Conditions of Grants of Restricted Shares.

(a)	The terms and conditions set forth in this paragraph shall apply to each grant of Restricted Shares. If required by the Company, each such grant shall be evidenced by a written agreement that sets forth the specific terms of the grant in accordance with the Plan and that is duly executed by or on behalf of the Company and the Nonemployee Director.
(b)	At the time of each grant, a share certificate or certificates representing the number of Restricted Shares granted to a Nonemployee Director shall be registered in the Nonemployee Director's name but shall be held by or on behalf of the Company for the Nonemployee Director's account. As a condition to receipt of the first award of Restricted Shares, each Nonemployee Director shall execute and deliver to the Company a stock power in blank with respect to all Restricted Shares that may be awarded to such Nonemployee Director in the future. Such stock power shall be held in custody by the Secretary of the Company and shall be used only to effect a transfer of Restricted Shares to the Company in connection with a forfeiture of Restricted Shares by such Nonemployee Director. The Nonemployee Director shall have all the rights and privileges of a stockholder as to such Restricted Shares, including the right to receive dividends and the right to vote such Restricted Shares, subject to the restrictions set forth in subparagraph c and subject to deferrals of dividend payments as provided in paragraph 7.
(c)	The Restricted Shares granted to any Nonemployee Director under paragraph 4 shall be subject to the following restrictions:
		(i) Such Restricted Shares may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of until such time as such restrictions have expired as to such Restricted Shares as provided in subparagraph (d). (ii) A Nonemployee Director shall not be entitled to delivery of a share certificate representing any Restricted Shares until the expiration of such restrictions as to such Restricted Shares.
(d)	Except as otherwise provided in clause (ii) below or in paragraph 10, the restrictions applicable to Restricted Shares covered by any grant to any Nonemployee Director shall expire in accordance with the terms of the following clause (i):
		(i) Restrictions shall expire as to the Restricted Shares on the date the Nonemployee Director attains age 70; provided, however, that restrictions shall expire as to Restricted Shares only if the Nonemployee Director shall have remained a director of the Company continuously from the date of grant of such Restricted Shares to the scheduled expiration date. (ii) If a Nonemployee Director ceases to be a director of the Company before attaining age 70 because of death or because he or she is totally and permanently disabled as determined by a majority of the Board, the restrictions on all Restricted Shares shall expire as of the date the Nonemployee Director ceases to be a director of the Company.
(e)	All of the Restricted Shares granted to any Nonemployee Director as to which the restrictions have not previously expired shall be forfeited immediately, and all rights of such Nonemployee Director to such Restricted Shares shall terminate without further obligation on the part of the Company, if the Nonemployee Director shall cease to be a director of the Company before age 70 for any reason other than as set forth in clause (ii) of subparagraph (d) above or in paragraph 10; provided, however, that in cases of special circumstances, the Chief Executive Officer or the Company may, in his sole discretion, when he finds that a waiver would be in the best interest of the Company, waive in whole or in part any or all remaining restrictions.
(f)	As soon as practicable after the expiration of the restrictions on any Restricted Shares as herein provided, a share certificate for such Restricted Shares shall be delivered, free of all such restrictions, to the Nonemployee Director (or to the Nonemployee Director's Beneficiary, if applicable) subject to the withholding requirements of paragraph 6(d)(if applicable).

6. Delivery of Restricted Shares.

(a)	Shares granted or delivered under the Plan may be authorized but unissued Shares, Shares reacquired by the Company, or a combination of both, as the Board may from time to time determine. Shares granted under the Plan but subsequently forfeited shall continue to be otherwise available for the purposes of the Plan.
(b)	In the event of any change in the outstanding Shares upon which the stock equivalency hereunder is based, by reason of a merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange of shares, or any other change in corporate structure or in the event of any dividend that is paid in Shares or other property, the number and kind of Restricted Shares which may thereafter be granted under the Plan shall be adjusted and the number and kind of Shares then being held by the Company as Restricted Shares shall be adjusted in such a manner as a majority of the Board shall determine to be fair under the circumstances; provided, however, that if a Change in Control shall have occurred, then such determination shall be made by a majority of the Continuing Directors. Any new or additional Restricted Shares, or stock or other securities substituted therefor, to which an Nonemployee Director may be entitled under this subparagraph shall be subject to all of the terms and conditions of paragraph 5.
(c)	The Company shall not be required to deliver any fractional Share but shall pay, in lieu thereof, the fair market value (measured as of the date restrictions lapse) of such fractional Share to the Nonemployee Director (or the Nonemployee Director's Beneficiary, if applicable).
(d)	Before the issuance or delivery of any Restricted Shares on which the restrictions have expired, the Company shall require payment in cash by the Nonemployee Director of any withholding taxes that the Company may be required by law to pay with respect to the issuance or delivery of such Shares.

7.          Deferred Stock Account.

             The Company shall establish a deferred stock account (an "Account') for each Nonemployee Director participating in the Plan. A Nonemployee Director shall have no right to immediate payment of dividends on Restricted Shares. On each Dividend Date (as defined below), the Company shall credit the Account with the number of Deferred Stock Units determined in accordance with paragraph 8 below. Distributions from a Nonemployee Director's Account shall be made in Shares upon the retirement of a Nonemployee Director, unless the distributions are accelerated in accordance with paragraphs 9 or 10 below. The value of the Deferred Stock Units is dependent upon the fair market value of the Shares on the date the Shares are distributed to the Nonemployee Director, and is therefore subject to market fluctuations in value until such distribution.

8.          Deferred Stock Units.

(a)

There shall be credited to the Account of each Nonemployee Director participating in the Plan Deferred Stock Units on each regular cash dividend payment date (a "Dividend Date"). The number of such Deferred Stock Units shall be determined by (i) multiplying the amount of the dividend by the sum of (x) the total number of Deferred Stock Units (including fractional Deferred Stock Units) credited to such Account immediately prior to the Dividend Date and (y) the total number of Restricted Shares granted to such Nonemployee Director upon which restrictions have not yet lapsed and (ii) dividing the product by the Fair Market Value Per Share as of the day preceding the Dividend Date.

(b)

In the event of any change in the outstanding Shares upon which the stock equivalency hereunder is based, by reason of a merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange of shares, or any other change in corporate structure or in the event of any dividend that is paid in Shares or other property, the number of Deferred Stock Units credited to the Account shall be adjusted in such a manner as a majority of the Board shall determine to be fair under the circumstances; provided, however, that if a Change in Control shall have occurred, then such determination shall be made by a majority of the Continuing Directors. In the case of dividends payable in property, the amount paid shall be based on the fair market value of the property at the time of distribution of the dividend, as determined by a majority of the Board, or, in the event of a Change in Control, by a majority of the Continuing Directors.

9. Distribution Attributable to Deferred Stock Units.

(a)	Except as otherwise provided herein, the balance of each Nonemployee Director's Account shall be paid to the Nonemployee Director, in a lump sum, commencing at the beginning of the first quarter after the first annual meeting of the shareholders of the Company following the date that such director reaches the mandatory retirement age then in effect.
(b)	In the event of the death of the Nonemployee Director prior to such director's retirement or prior to the distribution of the entire balance in such director's Account, the entire balance in the Account as of the date of the Nonemployee Director's death shall be paid in Shares in a lump sum, to the surviving beneficiary or beneficiaries as the Nonemployee Director may have designated by notice in writing to the Company or by will, or, if no beneficiaries are so designated, the legal representative of such director's estate.
(c)	If a Nonemployee Director shall become totally and permanently disabled, as determined by a majority of the Board, while he or she is a director of the Company, the entire balance in the Account as of the date of such total and permanent disability shall be paid to such Nonemployee Director, or his or her personal representative, in a lump sum, within one hundred twenty (120) days of the date of such total and permanent disability.
(d)	If a Nonemployee Director ceases to be a director of the Company for any reason other than due to death or total and permanent disability, including, without limitation, the failure of such person to be re-elected as a director of the Company by the shareholders of the Company, the balance of such director's Account as of the date such person ceases to be a director of the Company shall be paid in a lump sum, to such director within one hundred twenty (120) days of the date such person ceases to be a director of the Company.
(e)	All distributions of Deferred Stock Units made pursuant to this Plan shall be in an amount equal to the number of Deferred Stock Units held in the Account. On the date of any such distribution, the Company shall cause to be issued and delivered to such Nonemployee Director a stock certificate evidencing the Shares registered in the name of such Nonemployee Director, or such other person as the Nonemployee Director my designate. Deferred Stock Units representing fractional Shares shall be paid in cash.

10. Effect of Change in Control.

(a)	Notwithstanding any other provision of the Plan, if a Change in Control occurs and at any time after the occurrence of such Change in Control either of the following events occurs:
		(i) the Nonemployee Director ceases for any reason to be a director of the Company; or (ii) the Plan is terminated;
	then the restrictions on all Restricted Shares shall expire and the entire balance of the Account shall be payable in a lump sum to the director in Shares. Such payment shall be made by the Company as promptly as practicable, but not more than thirty (30) days following the date on which the right to such payment arose.
(b)	The Company shall promptly reimburse the director for all legal fees and expenses reasonably incurred in successfully seeking to obtain or enforce any right or benefit provided under this paragraph 10.
(c)	This paragraph 10 may not be amended or modified after the occurrence of a Change in Control.

11.         Amendment and Termination.

             The Board may from time to time amend, suspend or terminate the Plan, in whole or in part; provided, however, that without the Nonemployee Director's consent, no such amendment, suspension or termination shall materially adversely affect the rights of any Nonemployee Director in respect of Restricted Shares previously granted to such Nonemployee Director. Notwithstanding the foregoing, the Board may, in any circumstance where it deems such approval necessary or desirable, require stockholder approval as a condition to the effectiveness of any amendment or modification of the Plan.

12.         Term.

             The Plan shall continue in effect without limit unless and until the Board otherwise determines.

13.         Compliance with SEC Regulations.

             It is the Company's intent that the Plan comply with the provisions of Section 16 of the Exchange Act and the rules promulgated thereunder. To the extent that any provision of the Plan is later found not to be in compliance with Section 16 or such rules, such provision shall be deemed to be null and void.

14.          Miscellaneous.

(a)	Neither the establishment of the Plan nor the payment of any benefits hereunder nor any action taken hereunder shall be construed as giving any individual any right to continue to serve as a director of the Company or otherwise to be retained in the service of the Company.
(b)	No Shares shall be issued hereunder unless and until counsel for the Company shall be satisfied such issuance will be in compliance with applicable federal, state and other securities laws and regulations.
(c)	The expenses of the Plan shall be borne by the Company.
(d)	Neither the Nonemployee Director nor any other person shall have any interest in any fund or in any specific asset of the Company by reason of amounts credited to the Account of such director, nor the right to exercise any of the rights or privileges of a shareholder with respect to any Deferred Stock Unit credited to such Account, nor the right to receive distribution under the Plan except as expressly provided herein. Distributions hereunder shall be made from the general funds of the Company, and the rights of the directors shall be those of an unsecured general creditor of the Company.
(e)	The Plan, the grant of Restricted Shares and Deferred Stock Units thereunder, and the obligation of the Company to deliver Shares, shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any governmental or regulatory agency or national securities exchange as may be required. The Company shall not be required to issue or deliver any certificates for Shares prior to the completion of any registration or qualification of such Shares under any federal or state law or any ruling or regulation of any governmental body or national securities exchange which the Company shall, in its sole discretion, determine to be necessary or advisable.
(f)	The Plan shall be administered by the Compensation Committee selected by the Board. The Compensation Committee shall have the power to interpret the Plan and, subject to its provisions, to make all determinations necessary or desirable for the Plan's administration. The Compensation Committee shall have the full discretionary authority to adopt rules and regulations for carrying out the Plan, and to interpret, construe and implement the provisions of the Plan. The Compensation Committee's determinations on these matters shall be conclusive, except in the event of a Change in Control, in which case such interpretation and determination shall be made by a majority of the Continuing Directors.
(g)	No rights or benefits under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, except by will or the laws of descent and distribution, and any attempt thereat shall be void. No such right or benefit shall, before receipt thereof, be in any manner liable for or subject to the recipient's debts, contracts, liabilities, engagements, or torts.
(h)	The provisions of this Plan shall apply to and be binding upon the beneficiaries, distributees, and personal representatives, and any successors in interest of the Nonemployee Director.
(i)	The Company shall deduct from all distributions hereunder any taxes required to be withheld by the federal, state or local law.
(j)	The Plan shall be governed by, and construed in accordance with, the laws of the State of Alabama, excluding any choice of law provisions which may indicate the application of the laws of another jurisdiction.

Executed and adopted on the 1st day of November, 1997, pursuant to action taken by the Board of Directors of Vulcan Materials Company at its meeting on July 18, 1997, as amended through May 11, 2001.

VULCAN MATERIALS COMPANY

By             /s/William F. Denson, III
                 William F. Denson, III
      Senior Vice President, General Counsel
                   and Secretary

Exhibit (10)(h)
Vulcan Materials Company Executive Deferred Compensation Plan As Amended Through May 11, 2001
Contents
Article 1.	Establishment and Purpose	1
Article 2.	Definitions	1
Article 3.	Administration	4
Article 4.	Eligibility and Participation	5
Article 5.	Deferral Opportunities	5
Article 6.	Individual Accounts and Crediting of Investment Returns	9
Article 7.	Rabbi Trust	10
Article 8.	Change in Control	10
Article 9.	Beneficiary Designation	10
Article 10.	Withholding Taxes	11
Article 11.	Amendment and Termination	11
Article 12.	Miscellaneous	12

Vulcan Materials Company
Executive Deferred Compensation Plan

Article 1.  Establishment and Purpose

          1.1         Establishment . Vulcan Materials Company, a New Jersey corporation, hereby establishes, effective as of October 9, 1998, as amended through May 11, 2001 (the "Effective Date"), a deferred compensation plan for key management employees as described herein, which shall be known as the "Vulcan Materials Company Executive Deferred Compensation Plan" (the "Plan").

           1.2         Purpose . The primary purpose of the Plan is to provide eligible employees of the Company with the opportunity to defer a portion of their compensation in a tax-efficient manner. By adopting the Plan, the Company desires to enhance its ability to attract and retain management employees of outstanding competence.

Article 2.  Definitions

          2.1         Definitions . Whenever used herein, the following terms shall have the meanings set forth below, and when the meaning is intended, the term is capitalized:

                       (a)          "Accrued Rabbi Trust Obligations" means the then current aggregate deferred compensation account balances of all Participants, consisting of each Participant's deferrals and the net investment gain or loss thereon.

                       (b)          "Annual Bonus" means any incentive award based on an assessment of performance, payable in cash by the Company to a Participant with respect to the Participant's services during a Plan Year. The Term "Annual Bonus" shall not include incentive awards that relate to a period exceeding one year. An Annual Bonus shall be deemed to be earned when the Participant performs the related services regardless of when it is paid.

                       (c)          "Base Salary" means all regular, basic wages, before reduction for amounts deferred pursuant to the Plan or any other plan of the Company, payable in cash to a Participant for services to be rendered during the Plan Year, exclusive of any Annual Bonus, Long-Term Incentive Awards, other special fees, awards, or incentive compensation, allowances, or amounts designated by the Company as payment toward or reimbursement of expenses.

                       (d)          "Board" or "Board of Directors" means the Board of Directors of the Company.

                       (e)          "Change in Control" means:

	(1) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of Common Stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this Section 2.1(e); or
	(2) Individuals who, as of the Effective Date of this Plan, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
	(3) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
	(4) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

                       (f)          "CEO" means the Chief Executive Officer of the Company.

                       (g)          "Code" means the Internal Revenue Code of 1986, as amended from time to time.

                       (h)         "Committee" means the Compensation Committee of the Board (or any other committee designated by the Board that is eligible to administer the Plan in accordance with Rule16b-3 under the Exchange Act).

                       (i)          "Company" means Vulcan Materials Company and also includes any "Employing Company" as such term is defined in the Salaried Retirement Income Plan.

                       (j)          "Company Stock" means the common stock of the Company.

                       (k)          "Disability" shall have the meaning ascribed to such term in the Company's long-term disability plan or, if no plan is then in effect, shall mean the determination by the Committee that the physical or mental condition of a Participant renders such Participant unable to carry out his or her duties and obligations to the Company.

                       (l)          "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.

                       (m)         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

                       (n)          "Long-Term Incentive Award" means a compensation vehicle that provides for the accumulation of value over a time period longer than one year, including, but not limited to, stock options, restricted stock, performance shares, and performance units; but the term shall not include this Plan, any other elective deferred compensation plan, or any tax-qualified or nonqualified retirement plan of the Company.

                       (o)          "Participant" means any key management employee of the Company who has been approved by the Committee for participation in the Plan under Section 4.1.

                       (p)          "Payout Year" means the calendar year in which the payout contemplated by Section 5.4 is made or commences.

                       (q)          "Plan Year" means the calendar year.

                       (r)          "Rabbi Trust" means a grantor trust, as described in Section 677 of the Code, that is established by the Company as provided in Article 7.

                       (s)          "Rabbi Trust Agreement" meaning the instrument establishing the Rabbi Trust, as such instrument may be amended from time to time.

                       (t)          "Retirement" means a termination of a Participant's employment with the Company that entitles such Participant to immediate payment of a pension benefit under the Salaried Retirement Income Plan.

                       (u)          "Salaried Retirement Income Plan" means the Retirement Income Plan for Salaried Employees of Vulcan Materials Company, and any successor plan thereto.

          2.2          Gender and Number . Except where otherwise indicated by the context, any masculine term shall include the feminine, the plural shall include the singular, and the singular shall include the plural.

Article 3.  Administration

          3.1         The Committee . The Plan shall be administered by the Committee. In no event shall any member of the Committee be a Participant.

          3.2         Authority of the Committee .

                       (a)          Subject to the terms of the Plan, the Committee shall have full power and discretionary authority (i) to select the employees who are eligible to participate in the Plan, (ii) to determine the terms and conditions of each Participant's participation in the Plan, (iii) to construe and interpret the Plan and any agreement or instrument entered into under the Plan, (iv) to establish, amend, and waive rules and regulations for the Plan's administration, (v) subject to the provisions of Article 11, to amend the Plan and any agreement or instrument entered into under the Plan or to terminate the Plan, (vi) to appoint and remove the trustee and the recordkeeper for the Rabbi Trust, and to direct the trustee and the recordkeeper with respect to their duties under the agreements pertaining to the Rabbi Trust, and (vii) to make any other determinations that may be necessary or advisable for the administration of the Plan.

                       (b)          To the extent permitted by law, the Committee (i) may delegate any or all of its authority granted under the Plan to one or more executives of the Company (provided that no executive of the Company who is a Participant shall exercise any discretion with respect to his own participation in the Plan) and (ii) may designate one or more individuals who are not Participants (but who may be employees of the Company) to carry out ministerial duties related to the administration of the Plan, except that the Committee shall not delegate responsibility for any matter involving a person subject to Section 16 of the Exchange Act if a decision by the Committee as to such matter would have the effect of exempting a transaction under the Plan from the application of Section 16(b) of the Exchange Act pursuant to Rule 16b-3 or any successor rule thereunder.

          3.3         Decisions Binding . All determinations and decisions of the Committee (or of any person to whom the Committee has delegated its authority) under the Plan, including questions of construction and interpretation, shall be final, conclusive, and binding on the employees of the Company, the Participants and their beneficiaries and estates. Whenever the Plan authorizes the Committee or any other person to exercise discretion with respect to any matter, such discretion may be exercised in the sole and absolute discretion of the Committee or such person, subject only to the terms of the Plan and applicable requirements of law.

Article 4.  Eligibility and Participation

          4.1         Eligibility . Eligibility to participate in the Plan is limited to a select group of management or highly compensated employees consisting solely of key management employees who are nominated to participate in the Plan by the CEO and who are approved by the Committee.

          4.2         Participation .

                       (a)          Each employee approved for participation in the Plan by the Committee shall have the opportunity to defer the receipt of compensation otherwise payable to the Participant in accordance with the provisions of Article V. This opportunity shall continue in effect until the Participant is notified by the Committee that he has ceased to be eligible to make such deferrals.

                       (b)          The Committee may at any time and for any reason determine that a Participant no longer is eligible to make deferrals under Article V. Upon being notified in writing of the Committee's decision, such a Participant shall become an inactive Participant that retains all of the rights of a Participant under the Plan, except for the right to make further deferrals.

Article 5.  Deferral Opportunities

          5.1         Amounts Which May Be Deferred .

                       (a)          An eligible Participant may irrevocably elect, prior to any Plan Year, to defer (i) up to 50% of his Base Salary earned during the Plan Year and (ii) up to 100% of his Annual Bonus for the Plan Year.

                       (b)          In the event that a Participant first becomes eligible to participate in the Plan after the beginning of a Plan Year (including the Plan Year in which the Effective Date occurs), the Committee may allow such Participant to elect to defer (i) up to 50% of his Base Salary earned subsequent to the date on which a valid Deferral Election Form (as described in Section 5.2) is received by the Company from the Participant and (ii) for the Plan Year ended December 31, 1998 only, up to 100% of his Annual Bonus for the entire Plan Year.

                       (c)          The Committee, in its discretion, also may permit the deferral of Long-Term Incentive Awards in accordance with such rules and regulations as the Committee may establish.

                       (d)          A Participant at all times shall be 100% vested in his deferrals under the Plan and all earnings thereon.

           5.2         Timing of Deferral Elections . The election of a Participant to defer compensation under the Plan shall be made within 30 calendar days prior to the beginning of the Plan Year in which the compensation to be deferred is earned, except that, if a Participant is notified during a Plan Year that he is eligible to participate in the Plan for the remainder of the Plan Year, such election shall be made within 30 calendar days following the date of such notification. All deferral elections shall be made by means of a "Deferral Election Form" that is executed by the Participant and delivered to the Company. The Deferral Election Form shall provide for the specification by an eligible Participant of:

	(a) the amount of compensation to be deferred during the Plan Year in accordance with the terms of Section 5.1;
	(b) the length of deferral of such deferred amounts, and the earnings thereon, in accordance with the terms of Section 5.3; and
	(c) the form of payout of such deferred amounts, and the earnings thereon, in accordance with the terms of Section 5.4.

5.3 Length of Deferral .

(a) Each Participant who makes a deferral election as to any Plan Year may elect the length of such deferral by designating a Payout Year. Such election shall be irrevocable except as otherwise provided in Section 5.5. The deferral of Base Salary and the deferral of the Annual Bonus in any Plan Year shall be considered separate deferral elections and each may be deferred to a different Payout Year. Deferral elections are subject to the following limitations, unless the Committee permits otherwise:

	(i) The Payout Year designated shall be no earlier than the second year following the end of the Plan Year in which the compensation deferred is earned; and
	(ii) The Payout Year shall not be later than the year following the Participant's 65th birthday.

All deferral elections are subject to Section 8(a), which requires an immediate lump-sum payment in the event of a Change in Control.

                       (b)          In the event that a deferral election is made and no Payout Year is designated, the Participant shall be deemed to have elected a deferral until the Payout Year following the year of the Participant's Retirement.

                       (c)          Notwithstanding the Payout Years designated by a Participant pursuant to this Section 5.3 or the form of payout elected by a Participant pursuant to Section 5.4, if at any time prior to the end of any deferral period a Participant's employment with the Company is terminated for any reason other than Retirement or Disability (including termination of employment by reason of the Participant's death), (i) all Payout Years shall be accelerated to the year following the year in which the termination of the Participant's employment occurs, and (ii) all deferred amounts, and the earnings thereon, for all Plan Years shall be paid to the Participant in a single lump-sum cash payment.

                       (d)          If the Internal Revenue Service determines that a Participant or beneficiary is subject to federal income tax on an amount credited to the Participant's account under the Plan before that amount would otherwise become payable under the Plan, the amount that is then subject to tax shall be paid to the Participant or beneficiary in a single lump-sum cash payment as soon as practicable after the Committee is notified of the Internal Revenue Service's determination.

          5.4         Form of Payout .

                       (a)          Each Participant who makes a deferral election as to any Plan Year may elect as the form of payout either (i) a single lump-sum payment or (ii) up to fifteen approximately equal annual installment payments (such number to be specified by the Participant); provided that all compensation (whether Base Salary or Annual Bonus) deferred to a specific Payout Year (regardless of the Plan Year for which the compensation is deferred) shall be payable in the same form. Such election shall be irrevocable except as otherwise provided in Section 5.5. If no such election is made, then all deferred amounts, and the earnings thereon, shall be paid in the form of a single lump-sum payment. All deferral elections are subject to Section 8(a), which requires an immediate lump-sum payment in the event of a Change in Control.

                       (b)          Lump-sum and installment payments shall be made on the following terms:

(i) Lump-Sum Payment . Each payout to be made in the form of a single lump-sum payment shall be made in cash on or before the last business day of March in the Payout Year.

(ii) Installment Payments . The first installment payment of a payout to be made in installments shall be made in cash on or before the last business day of March in the Payout Year. The remaining installment payments shall be made in cash each year thereafter, on or before the last business day of March of such year, until the entire balance of such Participant's applicable account has been paid in full. Earnings shall continue to accrue to the Participant's account during the payment period. The amount of each installment payment shall be equal to the balance remaining in the applicable account immediately prior to each such payment, multiplied by a fraction, the numerator of which is one, and the denominator of which is the number of installment payments remaining (including the installment payment immediately due).

                       (c)          Following the termination of the employment of a Participant due to Retirement or Disability, notwithstanding the forms of payout elected by a Participant pursuant to this Section 5.4 for all remaining Payout Years, if, on the date any lump-sum or installment payment is due, the payment to be made would cause the aggregate amount of all of the Participant's account balances under the Plan to fall below $50,000, then the amount due, and the remaining balance of each of the Participant's accounts, shall be paid to such Participant on such date in a single lump-sum cash payment.

                       (d)          Notwithstanding the provisions of this Section 5.4, if a Participant is a "covered employee" (within the meaning of Section 162(m)(3) of the Code) when a payment is scheduled to be made under the Plan, any portion of the payment that would be nondeductible under Section 162(m) of the Code (when considered with all other compensation that the Participant is expected to receive in the same taxable year) shall be deferred, and shall be paid on the earliest date on which it would be deductible under Section 162(m).

                       (e)          If the Company fails to makes any payment due under the Plan within 90 days after it first becomes due, the Committee shall direct the trustee of the Rabbi Trust to make the payment from the Rabbi Trust (to the extent there are assets in the Rabbi Trust available to make the payment).

          5.5         Change in Deferral Election.

                       (a)           Change With Committee Consent. A Participant may petition the Committee to allow a one-time change in the Payout Years or forms of payout, or both, that he has previously elected under the Plan. The Committee may grant or refuse such a request. The Committee may, in its sole discretion, suspend the Participant's right to make additional deferrals under the Plan for a period following the effective date of the change in the Participant's deferral election. Any change in a Participant's payment election shall be effective no earlier than twelve months after the request was granted, and shall not apply to any amount that was otherwise scheduled to be paid to the Participant before the effective date of the election.

                       (b)           Change With Early Payment Penalty. A Participant may elect to receive an early payout of all or any portion of the deferral amount, and the earnings thereon, with respect to any Payout Year in the form of a single lump-sum cash payment. As a penalty for early payout, the Participant shall forfeit an amount equal to 10% of the amount requested as a payout, such that the actual payment shall be equal to 90% of the amount by which the balance of the Participant's account for such Payout Year is reduced. Such payout shall be made as soon as practicable following the receipt of the Participant's request.

                       (c)           Change As a Result of Financial Hardship. If a Participant establishes, to the satisfaction of the Committee, severe financial hardship, the Committee may:

	(i) authorize the cessation of deferrals by such Participant;
	(ii) provide that all or a portion of the amounts previously deferred by the Participant shall immediately be paid in a single lump-sum cash payment;
	(iii) provide that all or a portion of the installments payable over a period of time shall be paid immediately in a single lump-sum cash payment; or
	(iv) provide for such other payment schedule as deemed appropriate by the Committee under the circumstances.

                       (d)           Hardship Criteria. Severe financial hardship will be deemed to exist in the event of an unanticipated emergency that is caused by the Participant's long and serious illness, impending bankruptcy, or a similar event that is beyond the control of the Participant and that would result in severe financial hardship to the Participant if cessation of deferrals or modified payments were not permitted. The amount distributed pursuant to Section 5.5(c) shall not exceed that amount which the Committee determines to be reasonably necessary for the Participant to meet the financial hardship at the time of distribution.

                       (e)           Other Criteria. The Committee's decision with respect to the manner, if at all, in which the Participant's future deferral opportunities shall cease, and/or the manner in which, if at all, the payment of deferred amounts to the Participant shall be modified, shall be final, conclusive, and not subject to appeal. If a Participant is a "covered employee" (within the meaning of Section 162(m)(3) of the Code), any change in the Participant's payout election shall be subject to the limitation described in Section 5.4(d).

Article 6.  Individual Accounts and Crediting of Investment Returns

          6.1         Participants' Accounts .

                       (a)          The Company shall establish and maintain a separate bookkeeping account for each deferral made by a Participant, and the earnings thereon. Deferrals shall be credited to a Participant's account as of the date the amount deferred otherwise would have become due and payable to such Participant. Each Participant shall be furnished a statement of his deferred compensation account balances at least annually.

                       (b)          The establishment and maintenance of such deferred compensation accounts by the Company shall not be construed as entitling any Participant to any specific assets of the Company. The rights of Participants to receive any distribution under the Plan shall be an unsecured claim against the general assets of the Company.

          6.2         Investment Returns on Deferred Amounts .

                       (a)          All compensation deferred by a Participant pursuant to Section 5.1 shall be deemed invested, as directed by the Participant, in one or more of the investment alternatives made available from time to time by the Committee. Each such investment election shall be made (i) by means of the execution by the Participant and delivery to the Company of a "New Investment Election Form or (ii) by means of such other methods as the Committee shall approve. The Committee shall specify the available investment alternatives and may adopt such rules and procedures for the allocation of deferrals among such investment alternatives as the Committee deems necessary or appropriate. An investment election shall be effective for all subsequent deferrals under Plan until the Participant makes a new investment election.

                       (b)          A Participant shall be permitted, at any time and from time to time, to reallocate his deferred compensation account balances under the Plan among the investment alternatives then available, subject to right of the Committee to impose such restrictions on a Participant's ability to change investment elections as the Committee deems necessary or appropriate. The election of a Participant to reallocate account balances shall be made by means of a form provided to the Participant by the Committee for such purpose, and shall become effective as soon as practicable after a properly-executed form is received by the Committee from the Participant.

                       (c)          The balances of each Participant's deferred compensation accounts shall be credited with earnings and charged with losses based upon the actual results that would have been achieved had such balances actually been invested pursuant to the investment elections of the Participant.

                       (d)          The Company shall have no obligation to invest the compensation deferred under the Plan, or the earnings thereon, in any of the investment alternatives selected by Participants.

          6.3         Charges Against Accounts . All payments made to a Participant under the Plan shall be charged against such Participant's accounts when and as made.

Article 7.  Rabbi Trust

          7.1         Establishment of a Rabbi Trust . As soon as administratively practicable following the Effective Date, the Company shall establish an irrevocable Rabbi Trust to accumulate assets that will assist the Company in meeting its obligation under the Plan. The Rabbi Trust shall have an independent trustee that is selected by the Company. The trust agreement with respect to the Rabbi Trust shall provide that the assets of the Rabbi Trust shall at all times be specifically subject to the claims of the Company's general creditors in the event of the bankruptcy or insolvency (as defined by the Rabbi Trust Agreement) of the Company.

          7.2         Funding of the Rabbi Trust . The Company may contribute cash, Company Stock, or any other asset to the Rabbi Trust, as the Company deems appropriate. It is intended that the Rabbi Trust will hold assets with a value approximately equal to the Accrued Rabbi Trust Obligations.

Article 8.  Change in Control

          Upon the occurrence of a Change in Control:

	(a) The Company shall, within ten business days after the Change in Control, accelerate all deferred amounts to the date of the Change in Control and pay all such deferred amounts, and the earnings thereon, to each Participant or Beneficiary in a single lump-sum cash payment.
	(b) The composition of the Committee immediately prior to the Change in Control shall not be changed after the Change in Control, except with the consent of a majority of the Continuing Directors. If, after the Change in Control, a member of the Committee resigns or is unable to serve due to death or disability, the remaining members of the Committee shall appoint a replacement.
	(c) The Company promptly shall reimburse a Participant for all legal fees and expenses reasonably incurred in successfully enforcing any right or benefit under the Plan.

Article 9.  Beneficiary Designation

          9.1         Designation of Beneficiary . Each Participant may designate a beneficiary or beneficiaries who, upon the Participant's death, will receive the amounts that otherwise would have been paid to the Participant under the Plan. All such designations shall be signed by the Participant, and shall be in such form as is prescribed by the Committee. Each designation shall be effective as of the date delivered to the Committee (or to a Company employee appointed by the Committee to receive such designations); provided that the Committee must receive any beneficiary designation or change therein before the Participant's death. A Participant may change his beneficiary designation at any time and from time to time on such form as is prescribed by the Committee. In the event of the death of the Participant, the payment of all amounts deferred under the Plan, and the earnings thereon, shall be in accordance with the last written beneficiary designation signed and delivered by the Participant and not revoked.

          9.2         Payment to Beneficiary . If a Participant dies before the end of the deferral period for any amount under the Plan, the payment of that amount to the Participant's beneficiary or beneficiaries shall be made in a single lump-sum cash payment as provided in Section 5.3. If a Participant dies after installment payments have commenced, but before they have been completed, the remaining payments shall be made to the Participant's beneficiary or beneficiaries under the installment schedule elected by the Participant.

          9.3         Death of Beneficiary . In the event that all the beneficiaries of a Participant predecease the Participant, all amounts deferred under the Plan, and the earnings thereon, that would have been paid to the Participant under the Plan shall be paid in a single lump-sum cash payment to the Participant's estate, or to the person or persons designated in writing by the Participant's estate.

          9.4         Ineffective Designation . In the event a Participant does not designate a beneficiary, or for any reason such designation is ineffective, in whole or in part, the amounts that otherwise would have been paid to the Participant under the Plan shall be paid in a single lump-sum cash payment to the Participant's estate.

Article 10.  Withholding of Taxes

          The Company shall have the right to either (i) require Participants to remit to the Company, or any person or entity designated by the Committee to administer the Plan, an amount sufficient to satisfy any applicable federal, state, and local income and employment tax withholding requirements or (ii) to deduct from any payment made pursuant to the Plan amounts sufficient to satisfy such withholding requirements.

Article 11.  Amendment and Termination

          The Company has the right to amend, suspend, or terminate the Plan at any time by action of the Board of Directors, except that (i) no such amendment, suspension, or termination shall, without the written consent of a Participant, change the time or form of any payout under the Plan or otherwise adversely affect, in any material respect, such Participant's rights with respect to amounts theretofore deferred under the Plan, and the earnings thereon, and (ii) following a Change in Control, the Company shall not amend Section 5.4(f), Articles 3, 7 or 8, or this Article 11, and shall not amend any other provision of the Plan in a manner that would alter the effect of Section 5.4(f), Articles 3, 7 or 8, or this Article 11.

Article 12.  Miscellaneous

          12.1        Employment . No provision of the Plan, nor any action taken by the Committee or the Company pursuant to the Plan, shall give or be construed as giving a Participant any right to be retained in the employ of the Company, or affect or limit in any way the right of the Company to terminate his employment.

          12.2        Notice . Any notice required or permitted to be given to the Committee or the Company under the Plan shall be sufficient if in writing and hand delivered, sent by registered or certified mail, or deliver in any other manner authorized by the Committee, to the Committee (or to a person designated by the Committee to receive such notices). Such notices, if mailed, shall be addressed to the principal executive offices of the Company. Notice to any Participant shall be given in any manner authorized by the Committee and, if mailed, shall be sent to the Participant's address as is set forth in the records of the Company.

          12.3        Unfunded Plan . This Plan is intended to be an unfunded plan for tax purposes and for purposes of Title I of ERISA. The Plan is intended primarily to provide deferred compensation benefits for "a select group of management or highly compensated employees" within the meaning of Sections 201, 301, and 401 of ERISA, and therefore is further intended to be exempt from the provisions of Parts 2, 3, and 4 of Title I of ERISA. The Committee may terminate the Plan for any or all Participants, subject to Article 11, in order to achieve and maintain these intended results.

          12.4        Successors . All obligations of the Company under the Plan shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect merger or consolidation, the purchase of all or substantially all of the assets of the Company, or otherwise. The provision of the Plan with respect to each Participant shall be binding on such Participant's heirs, executors, administrators or other successors in interest.

          12.5        Nontransferability . The Committee may recognize the right of an alternate payee named in a domestic relations order to receive all or a portion of a Participant's benefit under the Plan, provided that (i) the domestic relations order would be a "qualified domestic relations order" within the meaning of Section 414(p) of the Code if Section 414(p) were applicable to the Plan, (ii) the domestic relations order does not purport to give the alternate payee any right to assets of the Company or its affiliates, and (iii) the domestic relations order does not purport to give the alternate payee any right to receive payments under the Plan before the Participant is eligible to receive such payments. Except as set forth in the preceding sentence with respect to domestic relations orders, and except as required under applicable federal, state, or local laws concerning the withholding of tax, the rights of any Participant or beneficiary to amounts deferred under the Plan, and the earnings thereon, are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or any beneficiary, other than by will or by the laws of descent and distribution. In no event shall the Company make any payment under the Plan to any assignee or creditor of a Participant or beneficiary.

          12.6        Severability . In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

          12.7        Costs of the Plan . All costs of implementing and administering the Plan shall be borne by the Company.

          12.8        Governing Law . The Plan shall be governed by and construed in accordance with the laws of the state of New Jersey , without giving effect to any choice or conflict of law provision or rule.

          IN WITNESS WHEREOF, the Company has caused this Executive Deferred Compensation Plan to be executed for and in its name and its corporate seal to be hereto affixed and attested by its duly authorized Secretary this 11 ^th day of May 2001.

ATTEST:

          /s/William F. Denson, III
             William F. Denson, III
                    Secretary

[SEAL]

VULCAN MATERIALS COMPANY

                /s/Donald M. James
                  Donald M. James
        Chairman and Chief Executive Officer

Exhibit (13)

Management's Discussion and Analysis of Results of Operations and Financial Condition
Vulcan Materials Company and Subsidiary Companies

Vulcan is the nation's foremost producer of construction aggregates, a major producer of asphalt and ready-mixed concrete and a leading chemicals manufacturer, supplying chloralkali and other industrial chemicals. We operate through two business segments: Construction Materials and Chemicals. The following is a discussion and analysis of the results of operations and the financial condition of the Company. This discussion and analysis should be read in connection with the historical financial information included in the consolidated financial statements and their notes.

The comparative analysis in this Management's Discussion and Analysis of Results of Operations and Financial Condition is based on net sales and cost of goods sold, which exclude delivery revenues and costs, and is consistent with the basis on which management reviews the Company's results of operations.

Results of Operations
Vulcan's 2001 net sales of $2.755 billion were at a record level, up 11% from the 2000 total of $2.492 billion. Net earnings and diluted earnings per share were $222.7 million and $2.17, respectively. The comparable 2000 net earnings and diluted earnings per share were $219.9 million and $2.16, respectively. The increase in earnings was attributable to the Construction Materials segment, as the Chemicals segment's loss was essentially the same as last year's. Earnings before interest and income taxes equaled $380.9 million, up 7% from last year's amount of $355.6 million.

Construction Materials
2001 vs. 2000
For the ninth consecutive year, Construction Materials' net sales were at record levels. Net sales for 2001 totaled $2.114 billion, up 12% from the 2000 result of $1.886 billion. Record aggregates shipments of 237 million tons increased 7% over the record 2000 level, while the average unit selling price of aggregates rose 3%. Aggregates shipments from our legacy operations increased more than 1%.

Segment earnings, which are before interest and income taxes, rose to a record level of $400.5 million, up 7% from 2000's $375.7 million. Higher aggregates pricing and volume combined with improvements in pricing for asphalt led to this favorable result. Selling, administrative and general costs increased due primarily to the effect of the consolidation of the Crescent Market Companies, the full-year effect of the Tarmac operations and higher bad debt charges. This information is summarized below (in millions of dollars):

Construction Materials 2001 vs. 2000

2000 earnings

$376

Aggregates*

20

Asphalt*

29

Selling, administrative and general

(24)

All other

(1)

2001 earnings

$400

*Excludes Tarmac/Crescent Market Companies acquisitions.

2000 vs. 1999
Net sales for 2000 totaled $1.886 billion, up 4% from the 1999 result of $1.811 billion. Record aggregates shipments of 222 million tons increased 1% over the record 1999 level, while the average unit selling price of aggregates rose 4%. These results included the impact of recent acquisitions and greenfields, most notably the October 2000 Tarmac acquisition. Excluding these acquisitions and greenfields, the 2000 results reflected a 1% decline in shipments. Weaker private construction activity in some markets, delays in TEA-21 project implementation and the early onset of winter weather in the fourth quarter were the primary causes of the decline in volume. Segment earnings of $375.7 million, which are before interest and income taxes, also were at a record level, up 2% from 1999's record level of $370.0 million. This increase reflected the favorable effect of higher aggregates pricing, partially offset by higher costs, primarily in fuel and liquid asphalt. This information is summarized below (in millions of dollars):

Construction Materials 2000 vs. 1999

1999 earnings

$370

Aggregates pricing

43

Aggregates volume

2

Higher fuel and asphalt costs

(27)

All other

(12)

2000 earnings

$376

Chemicals
2001 vs. 2000
Net sales of $641.7 million for 2001 were up 6% from the 2000 level of $605.8 million. This growth in net sales reflected the full-year effect of the Chloralkali joint venture and higher caustic soda prices. For the year, Chemicals' loss of $19.6 million approximated last year's results. The impact of higher caustic soda pricing was offset primarily by the effects of higher natural gas costs and soft demand for most of the segment's products, due to weak demand from the industrial sector of the economy. This information is summarized below (in millions of dollars):

Chemicals 2001 vs. 2000

2000 earnings

$(20)

Higher caustic soda pricing

65

Higher natural gas costs

(21)

Lower chlorinated products pricing and volume, net

(30)

Performance Chemicals' charges

17

All other

(31)

2001 earnings

$(20)

2000 vs. 1999
Net sales of $605.8 million for 2000 were up 11% from the 1999 level of $545.2 million. This growth in net sales resulted primarily from the Chloralkali joint venture, which began operating in the second half of 2000. Chemicals realized improved pricing and higher volumes for chloralkali products, but this was offset by the increase in costs for natural gas and hydrocarbon-based raw materials. In addition, provisions referable to the reorganization of the Performance Chemicals business unit negatively impacted the segment. At a loss of $20.1 million, segment earnings were down significantly from the 1999 earnings of $25.8 million. This information is summarized below (in millions of dollars):

Chemicals 2000 vs. 1999

1999 earnings

$26

Higher costs for energy and hydrocarbon-based raw materials

(31)

Performance Chemicals' reorganization

(32)

All other

17

2000 earnings

$(20)

Selling, Administrative and General
Selling, administrative and general expenses of $245.2 million in 2001 increased 13% from the 2000 level of $217.0 million. This increase resulted primarily from the effect of the consolidation of the Crescent Market Companies, the addition of the Tarmac operations and higher bad debt charges, reflecting the adverse economic climate in the industrial sector of the economy. In 2000, selling, administrative and general expenses were up 6% from the 1999 level. This increase resulted primarily from provisions referable to Performance Chemicals' reorganization and charitable contributions.

Other Operating Costs
Other operating costs of $33.8 million in 2001 increased $7.6 million from the 2000 level of $26.2 million, primarily due to the higher amortization of goodwill referable to acquisitions. In 2000, other operating costs were up $3.5 million from the 1999 level, also reflecting higher amortization of goodwill referable to acquisitions.

Minority Interest
Minority interest income of $8.5 million in 2001 was referable to the minority partner's share of the pretax loss for the Chloralkali joint venture. In 2000, minority interest income of $7.8 million was also referable to the minority partner's share of the pretax loss for the joint venture.

Other Income
In 2001, other income, net of other charges, was $2.0 million compared with the 2000 amount of $7.3 million. This decrease was due primarily to the consolidation of the Crescent Market Companies in 2001. Prior to this consolidation, the Company's share of the Crescent Market Companies' earnings was reported under the equity method in other income. In 2000, other income, net of other charges, decreased $30.5 million from the 1999 level. This decrease principally reflected a reserve for an arbitration assessment against the Company's subsidiary, Vulcan Chemicals Technologies, Inc., referable to the reorganization of our Performance Chemicals business unit.

Interest Expense
Interest expense was $61.3 million in 2001 compared with the 2000 amount of $48.1 million. This increase resulted from increased borrowings referable to recent acquisitions: the fourth-quarter 2000 Tarmac acquisition and the first-quarter 2001 purchase of the remaining interest in the Crescent Market Companies. In 2000, interest expense reflected a small, $0.5 million, decrease from the 1999 level.

Income Taxes
The Company's 2001 effective tax rate was 31.3%, up from the 2000 rate of 29.6%. This increase reflected principally a lesser impact of adjustments to prior year accruals. The effective rate decreased in 2000 from the 1999 rate of 31.8%. This decrease was due principally to adjustments to prior year accruals, as well as an increased favorable effect of statutory depletion due to relatively higher Construction Materials earnings.

2002 Outlook and Beyond
There is considerable uncertainty regarding overall economic activity in 2002. Our outlook is predicated on continuing weakness in the first half of the year, with a modest recovery beginning in the second half. In Construction Materials, we expect spending for publicly funded projects, led by highway construction, to increase 2% to 3% while spending in the private sector is expected to be flat to slightly positive. Demand in most of our key states is expected to remain strong in 2002, particularly in California, Illinois, Texas and Virginia. Spending in Georgia and Tennessee is expected to remain soft. We project our aggregates volume to grow 1% with price increases of 2% to 3%. Additionally, we expect to continue to realize cost improvements in the former CalMat and Tarmac operations, as well as in our other legacy operations. These improvements are expected to be somewhat offset by increases in health care and pension costs. In light of these assumptions, we expect Construction Materials segment earnings to be in the range of $435 million to $455 million, the ninth consecutive year of record earnings.

For the long term, the outlook for our Construction Materials segment is good. Data from the U.S. Department of Transportation show that every year the number of drivers on our roads increases along with per capita miles driven. Roads and highways remain an essential component of our economy due to the trillions of dollars in goods that are transported on them. We believe that construction of new roads and the maintenance and upgrade of existing roadways and related infrastructure will provide significant demand for construction materials in the years to come.

In Chemicals, demand and pricing for key chloralkali products are expected to remain soft in the first half of 2002, with a modest improvement beginning in the second half as the industrial sector of the economy begins to recover. Given this outlook, we are projecting a small loss in Chemicals.

For a number of reasons, we remain optimistic about the long-term prospects for this segment. Most importantly, as the industrial economy improves so will the demand for our chemical products. From its location on the Mississippi River, our Geismar, Louisiana chemical manufacturing complex is positioned to meet growing demand from global markets. Our chloralkali facilities in Wichita, Kansas and Port Edwards, Wisconsin are also strategically located to serve important regional and national markets. In addition, we believe that our supply position will be enhanced because competitors have removed some chloralkali capacity from the marketplace.

For the Company as a whole, full-year 2002 earnings per share are expected to be in the range of $2.40 to $2.60.

The above earnings projections include the effect of the adoption of Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets," which eliminated the recognition of goodwill amortization charges. The Company will adopt the provisions of this standard effective January 1, 2002. As a comparison, in 2001 goodwill amortization of $26.5 million reduced earnings by $0.22 per share.

Liquidity and Capital Resources
Cash Flows
For the seventh consecutive year, net cash provided by operating activities reached a record level, amounting to $510.3 million in 2001 compared to 2000's total of $418.2 million. Net cash provided by the Construction Materials segment increased 31% to $491.4 million, while net cash provided by the Chemicals segment decreased 24% to $53.5 million.

Cash expenditures for property, plant and equipment, excluding acquisitions, equaled $286.9 million in 2001, down $53.5 million from the 2000 level. Cash spending for acquisitions, including amounts referable to working capital and other items, totaled $138.8 million compared with $265.1 million in 2000.

The Company's policy is to pay out a reasonable share of net cash provided by operating activities as dividends, consistent on average with the payout record of past years, as well as with the goal of maintaining debt ratios within prudent and generally acceptable limits.

Working Capital
Working capital, exclusive of debt and cash items (cash, cash equivalents and short-term investments), totaled $360.8 million at December 31, 2001, up $7.5 million from the 2000 level. This increase resulted primarily from the Company's 2001 purchase of its partner's interest in the Crescent Market Companies and the resulting consolidation of these companies. This compares with an increase of $49.8 million in 2000, which included the Tarmac acquisition, and an increase of $110.5 million in 1999, which included the CalMat acquisition.

The current ratio increased to 2.1 at year-end 2001 compared with 1.2 for the prior year end, and 1.6 for 1999. The 2001 increase was due primarily to a reduction in commercial paper borrowing and an increase in cash, while the 2000 decrease resulted mostly from an increase in commercial paper borrowing attributable to the acquisition of Tarmac.

Capital Expenditures
Capital expenditures totaled $288.2 million in 2001, down $58.1 million from the 2000 level of $346.3 million. As explained on page 62, Vulcan classifies its capital expenditures into three categories based on the predominant purpose of the project. Profit-adding projects continued to represent the majority of spending in both segments. Capital expenditures in the Chemicals segment included spending on the previously announced world-class plant to produce a key feedstock for a non-ozone-depleting hydrofluorocarbon used in a variety of foam-blowing applications. Total spending for this plant, which is anticipated to start up in mid-2002, will be approximately $50.0 million.

Commitments for capital expenditures were $38.0 million at December 31, 2001. The Company expects to fund these commitments using internally generated cash flow and short-term borrowing if necessary.

Acquisitions
In 2001, the combined purchase prices of acquisitions amounted to $138.8 million, down $127.6 million from the prior year. The 2001 acquisitions included the Company's purchase of its partner's interests in the Crescent Market Companies for $121.1 million. Other 2001 acquisitions included the addition of two aggregates facilities in Tennessee and two recycling facilities in Illinois. The 2000 acquisitions included the Company's purchase of various assets of Tarmac America Inc. for $226.9 million.

Short-term Borrowings and Investments
The Company was a net short-term borrower during the first three quarters of 2001, but ended the year in a short-term investing position. Combined commercial paper and bank borrowing reached a maximum of $306.7 million, and amounted to $43.9 million at year end. Combined commercial paper and bank borrowing in 2000 reached a peak of $350.3 million, and amounted to $270.3 million at year end. Comparable 1999 combined commercial paper and bank borrowing reached a peak of $756.5 million, and amounted to $93.5 million at year end.

The Company's policy is to maintain committed credit facilities at least equal to its outstanding commercial paper. Unsecured bank lines of credit totaling $305.0 million were maintained at the end of 2001, of which $0.9 million was in use. In addition, the Chloralkali joint venture had an uncommitted bank credit facility in the amount of $45.0 million outstanding at year-end 2001, of which $43.0 million was drawn.

During 2000, the Company financed the October 2000 Tarmac acquisition by incurring short-term debt, principally commercial paper. In connection with its 1999 acquisition of CalMat, the Company entered into a syndicated credit facility with a group of banks in the amount of $550.0 million.

The Company's commercial paper is rated A-1/P-1 by Standard & Poor's and Moody's Investors Service, Inc., respectively.

Long-term Obligations
During 2001, the Company increased its total long-term obligations by $220.9 million to $906.3 million, compared with a net decrease of $13.5 million in 2000. During the three-year period ended December 31, 2001, long-term obligations increased cumulatively by $829.8 million from the $76.5 million outstanding at December 31, 1998. At year end, the Company's long-term borrowings incurred interest at an average rate of 6.29% in 2001, 6.32% in 2000 and 6.42% in 1999.

During the same three-year period, shareholders' equity, net of common stock purchases of $12.5 million and dividends of $254.6 million, increased by $450.6 million to $1.604 billion.

In the future, the ratio of total debt to total capital will depend upon specific investment and financing decisions. Nonetheless, management believes the Company's cash-generating capability, combined with its financial strength and business diversification, can comfortably support a ratio of 30% to 35%. The actual ratio at the end of 2001 was 37.6%, down from 39.5% at the end of 2000. The Company has made acquisitions from time to time and will continue to actively pursue attractive investment opportunities. These acquisitions could be funded by using internally generated cash flow, incurring debt or issuing equity instruments.

In February 2001, the Company issued $240.0 million of five-year senior unsecured notes due February 2006, with a coupon of 6.40%. The Company used approximately $121.1 million of the net proceeds from the sale of the notes to fund the acquisition of its partner's interest in the Crescent Market Companies. The remaining net proceeds from the sale of the notes were used to retire commercial paper indebtedness and for general corporate purposes.

In acquiring CalMat in January 1999, the Company liquidated all its marketable securities and issued commercial paper to purchase CalMat's common stock. In April 1999, the Company issued long-term debt in the amount of $500.0 million, and used the proceeds to reduce commercial paper outstanding.

Standard & Poor's and Moody's rate the Company's public long-term debt at the A+/A1 level, respectively. The A1 rating by Moody's has been assigned a negative outlook.

Contractual Obligations and Contingent Credit Facilities
The Company's obligations to make future payments under contracts as of December 31, 2001 are summarized in the table below (in millions of dollars):

	Payments Due by Year
	Total	2002	2003-2004	2005-2006	Thereafter
Cash Contractual Obligations
Short-term debt:
Principal payments	$43.9	$43.9	$0	$0	$0
Interest payments	0.9	0.9	0	0	0
Long-term debt:
Principal payments	919.6	17.3	297.4	275.9	329.0
Interest payments	294.1	57.1	102.4	69.8	64.8
Operating leases	115.6	21.1	29.9	21.1	43.5
Mineral royalties	72.9	7.0	12.9	8.9	44.1
Unconditional purchase obligations:
Capital	38.0	38.0	0	0	0
Noncapital	81.7	21.9	28.7	18.5	12.6
Total cash contractual obligations	$1,566.7	$207.2	$471.3	$394.2	$494.0

The Company has a number of contracts containing commitments or contingent obligations that are not material to the Company's earnings. These contracts are discrete in nature, and it is unlikely that the various contingencies contained within the contracts would be triggered by a common event. The future payments under these contracts are not included in the table set forth above.

The Company's contingent credit facilities existing as of December 31, 2001 are summarized in the table below (in millions of dollars):

	Amount and Year of Expiration
	Total Facilities	2002	2003-2004	2005-2006	Thereafter
Contingent Credit Facilities
Lines of credit	$350.0	$250.0	$100.0	$0	$0
Standby letters of credit	19.6	19.5	0.1	0	0
Total contingent credit facilities	$369.6	$269.5	$100.1	$0	$0

Bank lines of credit amounted to $350.0 million, of which $250.0 million expire in 2002 and $100.0 million in 2003. Only $43.9 million of the lines of credit were in use at the end of 2001. The Company expects to renew the one-year credit lines expiring in 2002 in full, and expand and extend the 2003 bank lines of credit to $150.0 million and 2007, respectively. Virtually all standby letters of credit are renewable annually at the option of the beneficiary.

Common Stock
During 2001, the Company did not purchase any shares of its common stock. Previously acquired shares are being held for general corporate purposes, including distributions under management incentive plans. The Company's decisions to purchase shares of common stock are made based on the common stock's valuation and price, the Company's liquidity and debt level, and its actual and projected needs for cash for investment projects and regular dividends. The amount, if any, of future share purchases will be determined by management from time to time based upon various factors, including those listed above.

The number and cost of shares purchased during each of the last three years is shown below:

	2001	2000	1999
Shares purchased:
Number	0	0	336,400
Total cost (millions)	$0	$0	$12.5
Average cost	$0	$0	$37.18
Shares in treasury at year end:
Number	38,384,750	38,661,373	38,970,426
Average cost	$15.08	$15.02	$14.96

The number of shares remaining under the current purchase authorization of the Board of Directors was 8,473,988 as of December 31, 2001.

Market Risk
The Company is exposed to certain market risks arising from transactions that are entered into in the normal course of business. In order to manage or reduce this market risk, the Company occasionally utilizes derivative financial instruments. To date, the Company has used commodity price swap contracts to reduce its exposure to fluctuations in prices for natural gas. The fair values of these contracts were as follows: December 31, 2001 - $13,307,000 unfavorable; December 31, 2000 - $6,276,000 favorable; and December 31, 1999 - $361,000 unfavorable. As a result of a 10% reduction in the price of natural gas, the Company would experience a potential loss in the fair value of the underlying commodity price swap contracts for the year ended December 31, 2001 of approximately $3.3 million. The Company is exposed to interest rate risk due to its various long-term debt instruments. Because substantially all of this debt is at fixed rates, a decline in interest rates would result in an increase in the fair market value of the liability. At December 31, 2001, the estimated fair market value of these debt instruments was $951.8 million. The effect of a hypothetical decline in interest rates of 1% would increase the fair market value of the liability by approximately $37.4 million.

New Accounting Standards
In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, "Business Combinations" (FAS 141), and SFAS No. 142, "Goodwill and Other Intangible Assets" (FAS 142). These statements will be adopted effective January 1, 2002, and while the ultimate impact of the new standards is yet to be determined, goodwill amortization expense is expected to be reduced by approximately $27 million annually. FAS 141 applies to all business combinations initiated after June 30, 2001 and requires the purchase method of accounting for business combinations, thereby prohibiting the pooling-of-interest method. Additionally, it requires the initial recognition of acquired intangible assets apart from goodwill and specifies disclosures regarding a business combination. FAS 142 is effective for fiscal years beginning after December 15, 2001. Under this pronouncement, goodwill and intangible assets with indefinite lives will no longer be amortized but reviewed at least annually for impairment. Separable intangible assets that are not deemed to have indefinite lives will continue to be amortized over their useful lives with no set maximum life. In addition, the useful lives of recognized intangible assets acquired in transactions completed before July 1, 2001 were reassessed and the remaining amortization periods adjusted accordingly.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations" (FAS 143). FAS 143 requires the liability associated with asset retirement obligations to be recorded at fair value when incurred and the associated asset retirement obligation costs to be capitalized as part of the carrying value of the long-lived assets. FAS 143 is required to be adopted for fiscal years beginning after June 15, 2002. The Company is currently evaluating FAS 143 and has not yet determined its impact on the Company's consolidated financial statements.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-lived Assets" (FAS 144). FAS 144 establishes a single accounting model for long-lived assets to be disposed of, whether previously held or newly acquired. This statement will be adopted effective January 1, 2002. The Company is currently evaluating FAS 144 and has not yet determined its impact on the Company's consolidated financial statements.

Critical Accounting Policies
The Company follows certain significant accounting policies when preparing its consolidated financial statements. A summary of these policies is included in Note 1 to the consolidated financial statements on pages 37 through 39. The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities at the date of the financial statements. The Company evaluates these estimates and judgments on an ongoing basis and bases its estimates on historical experience, current conditions and various other assumptions that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from these estimates.

The Company believes the following critical accounting policies require the most significant judgments and estimates used in the preparation of its consolidated financial statements.

Environmental Compliance
The Company incurs environmental compliance costs, particularly in its Chemicals segment. These costs include maintenance and operating costs with respect to pollution control facilities, the cost of ongoing monitoring programs, the cost of remediation efforts and other similar costs. Environmental expenditures that pertain to current operations or that relate to future revenues are expensed or capitalized consistent with the Company's capitalization policy. Expenditures that relate to an existing condition caused by past operations that do not contribute to future revenues are expensed. Costs associated with environmental assessments and remediation efforts are accrued when determined to represent a probable loss and the cost can be reasonably estimated. There can be no assurance that the ultimate resolution of these matters will not differ materially from the Company's estimates.

Assessments, Claims and Litigation
From time to time, the Company is involved with assessments, claims and litigation. The Company uses both in-house and outside legal counsel to assess the probability of loss. Generally, the Company establishes an accrual when the claims and litigation represent a probable loss and the cost can be reasonably estimated. Accruals for remediation efforts are recorded no later than the time a feasibility study is undertaken and the Company commits to a formal plan of action. Additionally, legal fees associated with these matters are accrued at the time such claims are made. There can be no assurance that the ultimate resolution of these assessments, claims and litigation will not differ materially from the Company's estimates.

Impairment of Long-lived Assets
The Company evaluates the carrying value of long-lived assets to be held and used, including goodwill and other intangible assets, when events and circumstances warrant such a review. The carrying value of long-lived assets is considered impaired when the anticipated undiscounted cash flows from such assets are less than their carrying value. In that event, a loss is recognized equal to the amount by which the carrying value exceeds the fair value of the long-lived assets. The Company's estimate of net future cash flows is based on the Company's historical experience and assumptions of future trends, which may be different from the actual results.

Special Note Regarding Forward-looking Information
Our disclosures and analysis in this report contain forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. Specifically, forward-looking statements are set forth in the "Looking Forward" section of the Letter to Shareholders and the section of Management's Discussion and Analysis entitled "2002 Outlook and Beyond." Whenever possible, we have identified these forward-looking statements by words such as "may," "believe," "estimate," "project," "expect" and words of similar import. Forward-looking statements involve certain assumptions, risks and uncertainties that could cause actual results to differ materially from those projected. These risks, assumptions and uncertainties include, but are not limited to, those associated with general business conditions including the timing or extent of any recovery of the economy; the highly competitive nature of the industries in which the Company operates; pricing; weather and other natural phenomena; energy costs; costs of hydrocarbon-based raw materials; the timing and amount of federal, state and local funding for infrastructure; and other risks and uncertainties. We undertake no obligation to publicly update any forward-looking statements, as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our future filings with the Securities and Exchange Commission or in any of our press releases.

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING AND INTERNAL CONTROL

The Shareholders of Vulcan Materials Company:

Vulcan's management acknowledges and accepts its responsibility for all the information contained in the financial statements and other sections of this report. The statements were prepared in conformity with accounting principles generally accepted in the United States of America appropriate in the circumstances, and we believe they reflect fairly our Company's financial position, results of operations and cash flows for the periods shown. The financial statements necessarily reflect our informed judgments and estimates of the expected outcome of numerous current events and transactions.

Our Company maintains an internal control structure that we believe provides reasonable assurance that our Company's financial statements, books and records accurately reflect our Company's financial condition, results of operations and cash flows, and that our Company's assets are safeguarded from loss or unauthorized use. This internal control structure includes well-defined and well-communicated policies and procedures; organizational structures that provide for appropriate separations of responsibilities; high standards applied in the selection and training of management personnel; and adequate procedures for properly assessing and applying accounting principles, including careful consideration of the accuracy and appropriateness of all significant accounting estimates. Vulcan also has an internal audit function that continually reviews compliance with established policies and procedures.

Our Company's independent auditors, Deloitte & Touche LLP, consider the internal control structure as a part of their audits of our Company's financial statements and provide an independent opinion as to the fairness of the presentation of those statements. Their report is presented below.

Your Board of Directors pursues its oversight role for the financial statements and internal control structure in major part through the Audit Review Committee, which is composed of five outside directors. In addition, the full Board regularly reviews detailed management reports covering all aspects of the Company's financial affairs. The Audit Review Committee meets periodically with management, the independent auditors and the internal auditors to review the work of each and to ensure that each is properly discharging its responsibilities. To ensure independence, the Audit Review Committee also meets on these matters with the internal and independent auditors without the presence of management representatives.

/s/Mark E. Tomkins
Mark E. Tomkins
Senior Vice President, Chief Financial Officer and Treasurer

/s/Ejaz A. Khan
Ejaz A. Khan
Vice President, Controller and Chief Information Officer

February 1, 2002

INDEPENDENT AUDITORS' REPORT

The Shareholders of Vulcan Materials Company:

We have audited the accompanying consolidated balance sheets of Vulcan Materials Company and its subsidiary companies as of December 31, 2001, 2000 and 1999, and the related consolidated statements of earnings, shareholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 consolidated financial statements present fairly, in all material respects, the financial position of Vulcan Materials Company and its subsidiary companies at December 31, 2001, 2000 and 1999, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Birmingham, Alabama

February 1, 2002

Consolidated Statements of Earnings
Vulcan Materials Company and Subsidiary Companies

For the years ended December 31	2001	2000	1999
Amounts and shares in thousands, except per share data
Net sales	$2,755,291	$2,491,744	$2,355,778
Delivery revenues	264,699	252,850	251,993
Total revenues	3,019,990	2,744,594	2,607,771
Cost of goods sold	2,105,837	1,908,057	1,769,327
Delivery costs	264,699	252,850	251,993
Cost of revenues	2,370,536	2,160,907	2,021,320
Gross profit	649,454	583,687	586,451
Selling, administrative and general expenses	245,216	216,978	205,643
Other operating costs	33,816	26,220	22,714
Minority interest in (earnings) losses of a consolidated subsidiary	8,483	7,843	(54)
Other income, net	1,984	7,315	37,767
Earnings before interest and income taxes	380,889	355,647	395,807
Interest income	4,444	4,678	4,330
Interest expense	61,280	48,087	48,576
Earnings before income taxes	324,053	312,238	351,561
Provision for income taxes
Current	70,366	55,386	90,708
Deferred	31,007	36,959	21,160
Total provision for income taxes	101,373	92,345	111,868
Net earnings	$222,680	$219,893	$239,693
Basic net earnings per share	$2.20	$2.18	$2.38
Diluted net earnings per share	$2.17	$2.16	$2.35
Dividends per share	$0.90	$0.84	$0.78
Weighted-average common shares outstanding	101,445	101,037	100,895
Weighted-average common shares outstanding, assuming dilution	102,497	102,012	102,190
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Consolidated Balance Sheets
Vulcan Materials Company and Subsidiary Companies

As of December 31	2001	2000	1999
Amounts in thousands, except per share data
Assets
Current assets
Cash and cash equivalents	$100,802	$55,276	$52,834
Accounts and notes receivable:
Customers, less allowance for doubtful accounts: 2001, $6,903; 2000, $8,982; 1999, $9,722	333,639	342,910	314,357
Other	6,424	38,957	15,334
Inventories	228,415	199,044	178,734
Deferred income taxes	53,040	44,657	52,931
Prepaid expenses	7,632	13,660	10,534
Total current assets	729,952	694,504	624,724
Investments and long-term receivables	13,352	72,558	77,064
Property, plant and equipment, net	2,000,030	1,848,634	1,639,715
Goodwill	588,562	562,044	454,783
Deferred charges and other assets	66,328	50,834	43,207
Total	$3,398,224	$3,228,574	$2,839,493
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt	$17,264	$6,756	$6,175
Notes payable	43,879	270,331	101,695
Trade payables and accruals	153,619	181,317	136,056
Accrued income taxes	13,651	5,875	15,689
Accrued salaries and wages	44,138	44,877	58,463
Accrued interest	15,020	9,224	10,390
Other accrued liabilities	56,924	53,851	58,174
Total current liabilities	344,495	572,231	386,642
Long-term debt	906,299	685,361	698,862
Deferred income taxes	318,545	268,797	250,833
Deferred management incentive and other compensation	36,997	34,210	28,702
Other postretirement benefits	58,189	55,048	52,465
Minority interest in a consolidated subsidiary	95,144	103,626	67,979
Other noncurrent liabilities	34,281	37,805	30,357
Total liabilities	1,793,950	1,757,078	1,515,840
Other commitments and contingent liabilities (Note 11)
Shareholders' equity
Common stock, $1 par value	139,705	139,705	139,705
Capital in excess of par value	35,638	28,359	17,854
Retained earnings	2,015,809	1,884,269	1,749,212
Accumulated other comprehensive loss	(8,083)	0	0
Total	2,183,069	2,052,333	1,906,771
Less cost of stock in treasury	578,795	580,837	583,118
Total shareholders' equity	1,604,274	1,471,496	1,323,653
Total	$3,398,224	$3,228,574	$2,839,493
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Consolidated Statements of Cash Flows
Vulcan Materials Company and Subsidiary Companies


For the years ended December 31	2001	2000	1999
Amounts in thousands
Operating Activities
Net earnings	$222,680	$219,893	$239,693
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation, depletion and amortization	278,209	232,365	207,108
(Increase) decrease in assets before effects of business acquisitions:
Accounts and notes receivable	43,168	(31,775)	32,977
Inventories	(15,628)	(8,448)	(11,529)
Deferred income taxes	(8,383)	8,274	(28,007)
Prepaid expenses	6,786	(3,021)	(294)
Investments and long-term receivables	220	(8,721)	(22,164)
Deferred charges and other assets	(17,518)	(11,915)	(5,451)
Increase (decrease) in liabilities before effects of business acquisitions:
Accrued interest and income taxes	9,836	(11,288)	3,717
Trade payables, accruals, etc.	(41,148)	13,414	(32,240)
Deferred income taxes	43,292	17,947	24,015
Other noncurrent liabilities	(6,078)	10,540	(2,102)
Other, net	(5,174)	(9,108)	(2,754)
Net cash provided by operating activities	510,262	418,157	402,969
Investing Activities
Purchases of property, plant and equipment	(286,854)	(340,409)	(314,650)
Payment for businesses acquired, net of acquired cash	(138,794)	(265,081)	(780,440)
Proceeds from sale of property, plant and equipment	38,990	62,349	103,067
Withdrawal of earnings from nonconsolidated companies	0	13,227	16,134
Net cash used for investing activities	(386,658)	(529,914)	(975,889)
Financing Activities
Net borrowings (payments) - commercial paper and bank lines of credit	(226,450)	168,635	91,342
Payment of short-term debt	(6,765)	(6,075)	(96,276)
Payment of long-term debt	0	(8,000)	(1,180)
Proceeds from issuance of long-term debt	238,560	0	496,875
Purchases of common stock	0	0	(12,508)
Dividends paid	(91,080)	(84,765)	(78,730)
Contribution from minority interest of consolidated subsidiary	0	35,648	36,064
Other, net	7,657	8,756	9,607
Net cash provided by (used for) financing activities	(78,078)	114,199	445,194
Net increase (decrease) in cash and cash equivalents	45,526	2,442	(127,726)
Cash and cash equivalents at beginning of year	55,276	52,834	180,560
Cash and cash equivalents at end of year	$100,802	$55,276	$52,834
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Consolidated Statements of Shareholders' Equity
Vulcan Materials Company and Subsidiary Companies

For the years ended December 31	2001		2000			1999
Amounts and shares in thousands, except per share data
	Shares	Amount	Shares		Amount	Shares	Amount
Common stock, $1 par value
Authorized: 480,000 shares in 2001, 2000 and 1999
Issued at beginning of year	139,705	$139,705	139,705		$139,705	139,705	$139,705
Issued at end of year	139,705	139,705	139,705		139,705	139,705	139,705
Capital in excess of par value
Balance at beginning of year		28,359			17,854		0
Distributions under stock-based incentive plans, net of tax benefit		7,279			9,437		9,081
Treasury stock issued for acquisition		0			1,068		8,773
Balance at end of year		35,638			28,359		17,854
Retained earnings
Balance at beginning of year		1,884,269			1,749,212		1,588,145
Net earnings		222,680			219,893		239,693
Cash dividends on common stock		(91,080)			(84,765)		(78,730)
Other		(60)			(71)		104
Balance at end of year		2,015,809			1,884,269		1,749,212
Accumulated other comprehensive loss, net of taxes
Fair value adjustment to cash flow hedges:
Balance at beginning of year		0			0		0
Cumulative effect of change in accounting principle		3,828			0		0
Fair value adjustment to cash flow hedges, net of reclassification adjustment		(11,911)			0		0
Balance at end of year		(8,083)			0		0
Common stock held in treasury
Balance at beginning of year	(38,661)	(580,837)		(38,970)	(583,118)	(39,109)	(574,150)
Purchase of common shares	0	0		0	0	(336)	(12,508)
Treasury stock issued for acquisitions	0	0		32	232	242	1,806
Distributions under stock-based incentive plans	276	2,042		277	2,049	233	1,734
Balance at end of year	(38,385)	(578,795)		(38,661)	(580,837)	(38,970)	(583,118)
Total		$1,604,274			$1,471,496		$1,323,653
Reconciliation of comprehensive income (loss):
Net earnings		$222,680			$219,893		$239,693
Other comprehensive loss		(8,083)			0		0
Total comprehensive income		$214,597			$219,893		$239,693
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and all majority or wholly owned subsidiary companies. All significant intercompany transactions and accounts have been eliminated in consolidation. Investments in which the Company has ownership interests of 20% to 50% are accounted for by the equity method.

Cash Equivalents
The Company classifies as cash equivalents all highly liquid securities with a maturity of three months or less at the time of purchase.

Inventories
The Company uses the last-in, first-out (LIFO) method of valuation for most of its inventories because it results in a better matching of costs with revenues. Inventories, other than operating supplies, are stated at the lower of cost or market. Such cost includes raw materials, direct labor and production overhead. Substantially all operating supplies are carried at average cost, which does not exceed market.

Property, Plant and Equipment
Property, plant and equipment are carried at cost less allowances for accumulated depreciation, depletion and amortization. The cost of properties held under capital leases is equal to the lower of the net present value of the minimum lease payments or the fair value of the leased property at the inception of the lease.

Depreciation, Depletion and Amortization
Depreciation is computed by the straight-line method at rates based upon the estimated service lives (ranging from 3 to 30 years) of the various classes of assets, which include machinery and equipment, buildings and land improvements. Amortization of capitalized leases is included with depreciation expense.

Cost depletion on depletable quarry land is computed by the unit-of-production method based on estimated recoverable units.

Leaseholds are amortized over varying periods not in excess of applicable lease terms.

Goodwill
Goodwill represents the excess of the cost of net assets acquired in business combinations over their fair value. Goodwill is amortized on a straight-line basis over periods ranging from 15 to 30 years.

Fair Value of Financial Instruments
The carrying values of the Company's cash equivalents, accounts and notes receivable, trade payables, accrued expenses and notes payable approximate their fair values because of the short-term nature of these instruments. Additional fair value disclosures for derivative instruments and interest-bearing debt are presented in Notes 4 and 5, respectively.

Derivative Instruments
The Company uses derivative instruments, primarily commodity price swap contracts, to manage volatility related to natural gas prices. The Company does not use derivative financial instruments for speculative or trading purposes.

Impairment of Long-lived Assets
The Company evaluates the carrying value of long-lived assets to be held and used, including goodwill and other intangible assets, when events and circumstances warrant such a review. The carrying value of long-lived assets is considered impaired when the anticipated undiscounted cash flows from such assets are less than their carrying value. In that event, a loss is recognized equal to the amount by which the carrying value exceeds the fair value of the long-lived assets. The Company periodically reviews the appropriateness of the estimated useful lives of its long-lived assets.

Revenue Recognition
Revenue is generally recognized at the time a sale transaction is completed, as evidenced by either delivery of goods or performance of services, and collectibility of the sales proceeds is reasonably assured. Total revenues generally include sales of products or services to customers, net of any discounts, and third-party delivery costs billed to customers.

Other Costs
Costs are charged to earnings as incurred for the start-up of new plants and for normal recurring costs of mineral exploration, removal of overburden from active mineral deposits, and research and development.

Repairs and maintenance are charged to costs and operating expenses. Renewals and betterments that add materially to the utility or useful lives of property, plant and equipment are capitalized.

The Company accrues the estimated cost of reclamation over the life of the reserves based on tons sold in relation to total estimated tons.

Insurance
The Company is self-insured for losses related to workers' compensation up to $1,000,000 per occurrence, and automotive and general/product liability up to $2,000,000 per occurrence. The Company has excess coverage on a per occurrence basis beyond these deductible levels. Losses under these self-insurance programs are accrued based upon the Company's estimates of the liability for claims using certain actuarial assumptions from the insurance industry and based on the Company's experience.

Environmental Compliance
The Company incurs environmental compliance costs, particularly in its Chemicals segment. These costs include maintenance and operating costs with respect to pollution control facilities, the cost of ongoing monitoring programs, the cost of remediation efforts and other similar costs. Environmental expenditures that pertain to current operations or that relate to future revenues are expensed or capitalized consistent with the Company's capitalization policy. Expenditures that relate to an existing condition caused by past operations that do not contribute to future revenues are expensed. Costs associated with environmental assessments and remediation efforts are accrued when determined to represent a probable loss and the cost can be reasonably estimated. There can be no assurance that the ultimate resolution of these matters will not differ materially from the Company's estimates.

Assessments, Claims and Litigation
From time to time, the Company is involved with assessments, claims and litigation. The Company uses both in-house and outside legal counsel to assess the probability of loss. Generally, the Company establishes an accrual when the claims and litigation represent a probable loss and the cost can be reasonably estimated. Accruals for remediation efforts are recorded no later than the time a feasibility study is undertaken and the Company commits to a formal plan of action. Additionally, legal fees associated with these matters are accrued at the time such claims are made. There can be no assurance that the ultimate resolution of these assessments, claims and litigation will not differ materially from the Company's estimates.

Minority Interest
Minority interest reflected in the accompanying Consolidated Statements of Earnings consists of the minority partner's share of the Chloralkali joint venture's pretax income or loss.

Income Taxes
Annual provisions for income taxes are based primarily on reported earnings before income taxes and include appropriate provisions for deferred income taxes resulting from the tax effect of the difference between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes. In addition, such provisions reflect adjustments for the following items:

- permanent differences, principally the excess of percentage depletion over the tax basis of depletable properties
- an estimate of additional cost that may be incurred, including interest on deficiencies but excluding adjustments
representing temporary differences, upon final settlement of returns after audit by various taxing authorities
- balances or deficiencies in prior year provisions that become appropriate as audits of those years progress

Comprehensive Income
The Company reports comprehensive income in its Consolidated Statements of Shareholders' Equity. Comprehensive income represents charges and credits to equity from nonowner sources. Comprehensive income is composed of two subsets: net earnings and other comprehensive income. Included in other comprehensive income for the Company are cumulative fair value adjustments related to cash flow hedges.

Earnings Per Share (EPS)
The Company reports two separate earnings per share numbers, basic and diluted. These are computed by dividing net earnings by the average common shares outstanding (basic EPS) or average common shares outstanding assuming dilution (diluted EPS), as detailed below (in thousands of shares):

2001

2000

1999

Weighted-average common shares outstanding

101,445

101,037

100,895

Dilutive effect of:

     Stock options

980

849

858

     Performance shares and other

72

126

437

Weighted-average common shares outstanding,
   assuming dilution

102,497

102,012

102,190

All dilutive common stock equivalents are reflected in the Company's earnings per share calculations. Antidilutive common stock equivalents as of December 31 were as follows: 2001 - 2,152; 2000 - 962,885; and 1999 - 869,752.

Recent Accounting Pronouncements
In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, "Business Combinations" (FAS 141), and SFAS No. 142, "Goodwill and Other Intangible Assets" (FAS 142). These statements will be adopted effective January 1, 2002, and while the ultimate impact of the new standards is yet to be determined, goodwill amortization expense is expected to be reduced by approximately $27 million annually. FAS 141 applies to all business combinations initiated after June 30, 2001 and requires the purchase method of accounting for business combinations, thereby prohibiting the pooling-of-interest method. Additionally, it requires the initial recognition of acquired intangible assets apart from goodwill and specifies disclosures regarding a business combination. FAS 142 is effective for fiscal years beginning after December 15, 2001. Under this pronouncement, goodwill and intangible assets with indefinite lives will no longer be amortized but reviewed at least annually for impairment. Separable intangible assets that are not deemed to have indefinite lives will continue to be amortized over their useful lives with no set maximum life. In addition, the useful lives of recognized intangible assets acquired in transactions completed before July 1, 2001 were reassessed and the remaining amortization periods adjusted accordingly.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations" (FAS 143). FAS 143 requires the liability associated with asset retirement obligations to be recorded at fair value when incurred and the associated asset retirement obligation costs to be capitalized as part of the carrying value of the long-lived assets. FAS 143 is required to be adopted for fiscal years beginning after June 15, 2002. The Company is currently evaluating FAS 143 and has not yet determined its impact on the Company's consolidated financial statements.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-lived Assets" (FAS 144). FAS 144 establishes a single accounting model for long-lived assets to be disposed of, whether previously held or newly acquired. This statement will be adopted effective January 1, 2002. The Company is currently evaluating FAS 144 and has not yet determined its impact on the Company's consolidated financial statements.

Use of Estimates in the Preparation of Financial Statements
The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities at the date of the financial statements. The Company evaluates these estimates and judgments on an ongoing basis and bases its estimates on historical experience, current conditions and various other assumptions that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from these estimates under different assumptions or conditions.

Reclassifications
Certain items previously reported in specific financial statement captions have been reclassified to conform with the 2001 presentation.

Note 2. Inventories
Inventories at December 31 are as follows (in thousands of dollars):

2001

2000

1999

Finished products

$176,940

$155,258

$131,032

Raw materials

13,284

15,578

13,735

Products in process

564

1,020

933

Operating supplies and other

37,627

27,188

33,034

Total inventories

$228,415

$199,044

$178,734

The above amounts include inventories valued under the LIFO method totaling $143,531,000, $129,237,000 and $123,268,000 at December 31, 2001, 2000 and 1999, respectively. Estimated current cost exceeded LIFO cost at December 31, 2001, 2000 and 1999 by $44,620,000, $39,836,000 and $35,225,000, respectively. If all inventories valued at LIFO cost had been valued under the methods (substantially average cost) used prior to the adoption of the LIFO method, the approximate effect on net earnings would have been an increase of $2,940,000 ($0.03 per share effect) in 2001, an increase of $2,880,000 ($0.03 per share effect) in 2000 and an increase of $197,000 (no per share effect) in 1999.

Note 3. Property, Plant and Equipment
Balances of major classes of assets and allowances for depreciation, depletion and amortization at December 31 are as follows (in thousands of dollars):

2001

2000

1999

Land and land improvements

$681,330

$634,982

$609,578

Buildings

122,768

108,520

97,057

Machinery and equipment

3,011,781

2,644,619

2,246,314

Leaseholds

6,627

6,355

7,049

Construction in progress

121,448

101,728

189,899

Total

3,943,954

3,496,204

3,149,897

Less allowances for depreciation, depletion
and amortization

1,943,924

1,647,570

1,510,182

Property, plant and equipment, net

$2,000,030

$1,848,634

$1,639,715

The Company capitalized interest costs of $2,746,000 in 2001, $6,150,000 in 2000 and $4,445,000 in 1999 with respect to qualifying construction projects. Total interest costs incurred before recognition of the capitalized amount were $64,026,000 in 2001, $54,237,000 in 2000 and $53,021,000 in 1999.

Note 4. Derivative Instruments
Effective January 1, 2001, the Company adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" (FAS 133), as amended, which established accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. The cumulative effect of adopting this statement was $6,276,000, net of income tax expense of $2,448,000, related to the Company's natural gas over-the-counter commodity price swap contracts.

Natural gas used by the Company in its Chemicals segment is subject to price volatility caused by supply conditions, political and economic variables and other unpredictable factors. The Company uses over-the-counter commodity price swap contracts to manage the volatility related to future natural gas purchases. These instruments have been designated as effective cash flow hedges in accordance with FAS 133. Accordingly, the fair value of the open contracts, which extend through December 2003, has been reflected as a component of other comprehensive loss of $13,307,000, net of income tax benefit of $5,224,000, in the Company's consolidated financial statements as of December 31, 2001. If market prices for natural gas remained at the December 31, 2001 level, $7,100,000 of this total loss would be classified into earnings within the next 12 months. No cash flow hedges were discontinued and there was no impact to earnings due to hedge ineffectiveness during the 12 months ended December 31, 2001.

Note 5. Credit Facilities, Notes Payable and Long-term Debt
Notes payable at December 31 is summarized as follows (in thousands of dollars):

2001

2000

1999

Commercial paper

$0

$249,130

$91,556

Bank borrowings

43,879

21,201

1,939

Other notes payable

0

0

8,200

Total notes payable

$43,879

$270,331

$101,695

At year-end 2001, the Company had no commercial paper outstanding. The comparable year-end amounts and weighted-average interest rates for 2000 and 1999 were $249,130,000 at 6.57% and $91,556,000 at 5.91%, respectively.

The Company had in place unused committed lines of credit with a group of banks that provide for borrowings of up to $300,000,000. The agreement pertaining to $200,000,000 is scheduled to expire in March 2002; the agreement pertaining to $100,000,000 is scheduled to expire in March 2003. The Company expects to renew the one-year credit line expiring in March 2002 in full, and expand and extend the 2003 bank lines of credit to $150,000,000 and 2007, respectively. Interest rates are determined at the time of borrowing based on current market conditions.

As of December 31, 2001, the Company's Chloralkali joint venture had an uncommitted bank line of credit with a foreign bank in the amount of $45,000,000, of which $43,000,000 was drawn. The interest rate on this note is a floating rate based on the London Interbank Offered Rate (LIBOR) plus 35 basis points. As a joint venture partner, the Company guaranteed a portion of the amounts borrowed under the credit line on a several basis, which reflects its pro rata ownership interest (51%). At December 31, 2001, the Company was in compliance with the minimum net worth covenant contained in the attendant credit agreement.

A foreign subsidiary of the Company maintains a credit line with a foreign bank, which provides for short-term borrowings up to $5,000,000. At December 31, 2001, $879,000 was outstanding under this agreement and bears interest at a rate of 2.35%. The comparable year-end amounts and interest rates for 2000 and 1999 were $1,201,000 at 5.88% and $1,939,000 at 5.21%, respectively.

All lines of credit extended to the Company in 2001, 2000 and 1999 were based solely on a commitment fee, thus no compensating balances were required. In the normal course of business, the Company maintains balances for which it is credited with earnings allowances. To the extent the earnings allowances are not sufficient to fully compensate banks for the services they provide, the Company pays the fee equivalent for the differences.

Long-term debt at December 31 is summarized as follows (in thousands of dollars):

2001

2000

1999

6.40% 5-year notes issued 2001

$240,000

$0

$0

5.75% 5-year notes issued 1999

250,000

250,000

250,000

6.00% 10-year notes issued 1999

250,000

250,000

250,000

Private placement notes*

122,112

123,741

125,541

Medium-term notes

38,000

43,000

56,000

Tax-exempt bonds

17,000

17,000

17,000

Other notes

9,485

10,691

9,274

Unamortized discount

(3,034)

(2,315)

(2,778)

Total debt excluding notes payable

$923,563

$692,117

$705,037

Less current maturities of long-term debt

17,264

6,756

6,175

Total long-term debt

$906,299

$685,361

$698,862

Estimated fair value of long-term debt

$934,569

$675,767

$660,589

*Includes a purchase accounting adjustment. The stated principal amount of the private placement notes is $115,000,000.

During 2001, the Company accessed the public debt market by issuing $240,000,000 of five-year notes with a 6.40% coupon maturing in February 2006. The discount from par recorded on these notes is being amortized over the lives of the notes.

During 1999, the Company accessed the public debt market by issuing $500,000,000 of 5-year and 10-year notes in two tranches of $250,000,000 each. The 5.75% coupon notes mature in April 2004 and the 6.00% notes mature in April 2009. The combined discount from par recorded on these notes is being amortized over the lives of the notes.

The private placement notes were issued by CalMat in December 1996 in a series of four tranches at interest rates ranging from 7.19% to 7.66%. Principal payments on the notes begin in December 2003 and end December 2011. The Company entered into an agreement with the noteholders effective February 1999 whereby it guaranteed the payment of principal and interest.

During 1991, the Company issued $81,000,000 of medium-term notes ranging in maturity from 3 to 30 years, and in interest rates from 7.59% to 8.85%. The $38,000,000 in notes outstanding as of December 31, 2001 have a weighted-average maturity of 8.2 years with a weighted-average interest rate of 8.64%.

The $17,000,000 of tax-exempt bonds consists of variable-rate obligations of $8,200,000 maturing in 2009 and fixed-rate obligations of $8,800,000. In 2001, the Company exercised its call options for early redemption of the two fixed-rate bond issues: (1) $3,000,000 of 7.50% coupon bonds maturing in 2011 and (2) $5,800,000 of 6.375% coupon bonds maturing in 2012. The aforementioned bonds were called and redeemed on January 2 and February 1, 2002, respectively.

Other notes of $9,485,000 were issued at various times to acquire land or businesses.

The aggregate principal payments of long-term debt, including current maturities, for the five years subsequent to December 31, 2001 are: 2002 - $17,264,000; 2003 - $41,205,000; 2004 - $256,220,000; 2005 - $3,237,000; and 2006 - $272,623,000.

The Company's debt agreements do not subject it to contractual restrictions with regard to working capital or the amount it may expend for cash dividends and purchases of its stock. Pursuant to a provision in the Company's bank credit facility agreements, the percentage of consolidated debt to total capitalization must be less than 60%. The total debt to total capitalization ratio was 37.6% as of December 31, 2001; 39.5% as of December 31, 2000; and 37.9% as of December 31, 1999.

The estimated fair value amounts of long-term debt have been determined by discounting expected future cash flows using interest rates on U.S. Treasury bills, notes or bonds, as appropriate. The fair value estimates presented are based on information available to management as of December 31, 2001, 2000 and 1999. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued since those dates.

Note 6. Operating Leases
Total rental expense, exclusive of rental payments made under leases of one month or less, is summarized as follows (in thousands of dollars):

2001

2000

1999

Minimum rentals

$33,515

$28,511

$26,145

Contingent rentals (based principally on usage)

15,667

16,223

15,920

Total

$49,182

$44,734

$42,065

Future minimum operating lease payments under all leases with initial or remaining noncancelable lease terms in excess of one year, exclusive of mineral leases, at December 31, 2001 are payable as follows: 2002 - $21,114,000; 2003 - $16,603,000; 2004 - $13,344,000; 2005 - $11,678,000; 2006 - $9,393,000; and aggregate $43,456,000 thereafter. Lease agreements frequently include renewal options and require that the Company pay for utilities, taxes, insurance and maintenance expense. Options to purchase are also included in some lease agreements.

Note 7. Accrued Environmental and Reclamation Costs
The Company's Consolidated Balance Sheets as of December 31 include accrued environmental cleanup costs by segment, as follows: Chemicals 2001 - $5,766,000, 2000 - $5,919,000 and 1999 - $5,406,000; Construction Materials 2001 - $7,640,000, 2000 - $7,858,000 and 1999 - $3,394,000. The accrued environmental cleanup costs in the Construction Materials segment relate to the former CalMat and Tarmac facilities acquired in 1999 and 2000, respectively.

The Company's Consolidated Balance Sheets as of December 31 include accrued land reclamation costs for the Construction Materials segment of $26,091,000 in 2001, $23,963,000 in 2000 and $23,559,000 in 1999. These accrued costs relate to the acquired CalMat facilities.

Note 8. Income Taxes
The components of earnings before income taxes are as follows (in thousands of dollars):

2001

2000

1999

Domestic

$312,891

$308,271

$343,625

Foreign

11,162

3,967

7,936

Total

$324,053

$312,238

$351,561

Provisions for income taxes consist of the following (in thousands of dollars):

2001

2000

1999

Current:

   Federal

$59,754

$48,585

$79,443

   State and local

9,574

6,592

11,048

   Foreign

1,038

209

217

      Total

70,366

55,386

90,708

Deferred:

   Federal

25,532

28,841

18,535

   State and local

5,348

8,146

2,630

   Foreign

127

(28)

(5)

      Total

31,007

36,959

21,160

Total provision

$101,373

$92,345

$111,868

The effective income tax rate varied from the federal statutory income tax rate due to the following:

2001

2000

1999

Federal statutory tax rate

35.0%

35.0%

35.0%

Increase (decrease) in tax rate resulting from:

    Depletion

(7.0)

(7.1)

(5.9)

    State and local income taxes, net of
      federal income tax benefit

3.0

3.0

2.5

    Amortization of goodwill

1.7

1.5

1.4

    Miscellaneous items

(1.4)

(2.8)

(1.2)

Effective tax rate

31.3%

29.6%

31.8%

Deferred income taxes on the balance sheet result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax liability are as follows (in thousands of dollars):

2001

2000

1999

Deferred tax assets related to:

   Postretirement benefits

$23,102

$21,880

$20,876

   Reclamation and environmental accruals

11,714

10,748

11,342

   Accounts receivable, principally allowance
      for doubtful accounts

4,611

4,845

4,911

   Inventory adjustments

5,212

5,745

7,906

   Deferred compensation, vacation pay and incentives

19,520

18,180

25,035

   Other items

20,475

16,141

8,808

      Total deferred tax assets

84,634

77,539

78,878

Deferred tax liabilities related to:

   Fixed assets

313,105

273,623

255,947

   Pensions

16,288

10,703

6,448

   Other items

20,746

17,353

14,385

      Total deferred tax liabilities

350,139

301,679

276,780

Net deferred tax liability

$265,505

$224,140

$197,902

Note 9. Pension and Postretirement Benefit Plans
Pension Plans
The Company sponsors three noncontributory defined benefit pension plans. These plans cover substantially all employees other than those covered by union-administered plans. Normal retirement age is 65, but the plans contain provisions for earlier retirement. Benefits for the Salaried Plan and one out of four union groups in the Chemicals Hourly Plan are based on salaries or wages and years of service; the Construction Materials Hourly Plan and three union groups in the Chemicals Hourly Plan provide benefits equal to a flat dollar amount for each year of service.

The following tables set forth the combined funded status of the plans and their reconciliation with the related amounts recognized in the Company's consolidated financial statements at December 31 (in thousands of dollars):

2001

2000

1999

Change in benefit obligation:

   Benefit obligation at beginning of year

$350,815

$323,530

$344,758

   Service cost

15,064

14,819

14,961

   Interest cost

25,937

24,579

21,135

   Amendments

2,565

3,114

0

   Actuarial (gain) loss

(2,884)

2,015

(40,757)

   Benefits paid

(18,234)

(17,242)

(16,567)

   Benefit obligation at end of year

$373,263

$350,815

$323,530

Change in plan assets:

   Fair value of assets at beginning of year

$553,115

$502,621

$445,553

   Actual return on plan assets

(66,886)

66,985

72,865

   Employer contribution

977

751

770

   Benefits paid

(18,234)

(17,242)

(16,567)

   Fair value of assets at end of year

$468,972

$553,115

$502,621

Funded status

$95,709

$202,300

$179,091

Unrecognized net transition asset

0

(957)

(2,678)

Unrecognized net actuarial gain

(95,767)

(210,436)

(190,164)

Unrecognized prior service cost

14,509

13,694

12,778

Net amount recognized

$14,451

$4,601

$(973)

Amounts recognized in the Consolidated Balance Sheets:

   Prepaid benefit cost

$43,767

$39,764

$37,238

   Accrued benefit liability

(29,316)

(35,163)

(38,211)

   Net amount recognized

$14,451

$4,601

$(973)

2001

2000

1999

Components of net periodic pension cost (income):

   Service cost

$15,064

$14,819

$14,961

   Interest cost

25,937

24,579

21,135

   Expected return on plan assets

(41,645)

(36,973)

(32,505)

   Amortization of transition asset

(957)

(1,721)

(2,382)

   Amortization of prior service cost

1,750

2,198

1,892

   Recognized actuarial gain

(9,022)

(7,725)

(1,977)

   Net periodic pension cost (income)

$(8,873)

$(4,823)

$1,124

Weighted-average assumptions as of December 31:

   Discount rate

7.25%

7.25%

7.50%

   Expected return on assets

8.25%

8.25%

8.25%

   Rate of compensation increase (for salary-related plans)

4.25%

4.25%

4.25%

Plan assets are composed primarily of marketable domestic and international equity securities and corporate and government debt securities. The Company also sponsors an unfunded, nonqualified pension plan. The projected benefit obligation, accumulated benefit obligation and fair value of assets for this plan were: $14,367,000, $10,115,000 and $0 as of December 31, 2001; $16,516,000, $10,850,000 and $0 as of December 31, 2000; and $16,585,000, $11,064,000 and $0 as of December 31, 1999.

Certain of the Company's hourly employees in unions are covered by multiemployer defined benefit pension plans. Contributions to these plans approximated $5,844,000 in 2001, $5,930,000 in 2000 and $7,038,000 in 1999. The actuarial present value of accumulated plan benefits and net assets available for benefits for employees in the union-administered plans are not determinable from available information. Twenty-nine percent of the hourly labor force were covered by collective bargaining agreements. Of the hourly workforce covered by collective bargaining agreements, 40% are covered by agreements that expire in 2002.

Postretirement Plans
In addition to pension benefits, the Company provides certain health care benefits and life insurance for some retired employees. Substantially all of the Company's salaried employees and, where applicable, hourly employees may become eligible for those benefits if they reach at least age 55 and meet certain service requirements while working for the Company. Generally, Company-provided health care benefits terminate when covered individuals become eligible for Medicare benefits or reach age 65, whichever first occurs.

The following tables set forth the combined funded status of the plans and their reconciliation with the related amounts recognized in the Company's consolidated financial statements at December 31 (in thousands of dollars):

	2001	2000	1999
Change in benefit obligation:
Benefit obligation at beginning of year	$56,212	$54,320	$50,932
Service cost	2,364	1,991	1,964
Interest cost	3,883	3,766	3,480
Amendments	(3,159)	(2,271)	7,946
Actuarial (gain) loss	(1,461)	1,123	(7,334)
Benefits paid	(2,632)	(2,717)	(2,668)
Benefit obligation at end of year	$55,207	$56,212	$54,320
Change in plan assets:
Fair value of assets at beginning of year	$3,507	$3,488	$3,484
Actual return on plan assets	(348)	119	128
Amendments	(3,159)	0	0
Employer contribution	0	0	0
Benefits paid	0	(100)	(124)
Fair value of assets at end of year	$0	$3,507	$3,488
Funded status	$(55,207)	$(52,705)	$(50,832)
Unrecognized net gain	(1,001)	(134)	(1,482)
Unrecognized prior service cost	(1,981)	(2,209)	(151)
Net amount recognized	$(58,189)	$(55,048)	$(52,465)
Amounts recognized in the Consolidated Balance Sheets:
Accrued benefit liability	$(58,189)	$(55,048)	$(52,465)

	2001	2000	1999
Components of net periodic postretirement benefit cost:
Service cost	$2,364	$1,991	$1,964
Interest cost	3,883	3,766	3,480
Expected return on plan assets	(245)	(244)	(244)
Amortization of prior service cost	(228)	(213)	(11)
Recognized actuarial loss	0	0	0
Net periodic postretirement benefit cost	$5,774	$5,300	$5,189

During 2001, the Company used the assets available for retiree life insurance to purchase policies for retirees covered under the program.

The weighted-average discount rates used as of December 31, 2001, 2000 and 1999 were 7.25%, 7.25% and 7.50%, respectively. For measurement purposes, a 5% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2002 and beyond.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. If the health care cost trend rates were increased 1% each year, the accumulated postretirement benefit obligation as of December 31, 2001 would have increased by $5,220,000, and the aggregate of the service and interest cost for 2001 would have increased by $722,000. Similarly, if the health care cost trend rates were decreased 1% each year, the accumulated postretirement benefit obligation as of December 31, 2001 would have decreased by $4,556,000, and the aggregate of the service and interest cost for 2001 would have decreased by $618,000.

Note 10. Incentive Plans
Stock-based Compensation Plans
The Company's 1996 Long-term Incentive Plan authorizes the granting of stock-based awards to key salaried employees of the Company and its affiliates. The Plan permits the granting of stock options (including incentive stock options), stock appreciation rights, restricted stock and restricted stock units, performance share awards, deferred stock units, dividend equivalents and other awards valued in whole or in part by reference to or otherwise based on common stock of the Company. The number of shares available for awards is 0.95% of the issued common shares of the Company (including treasury shares) as of the first day of each calendar year, plus the unused shares that are carried over from prior years.

Deferred stock unit awards were granted beginning in 2001. These awards vest ratably over years 6 through 10 from the date of grant. During 2001, 103,100 deferred stock units were granted and vesting will begin in 2007.

Stock options issued during the years 1996 through 2001 were granted at the fair market value of the stock on the date of the grant. They vest ratably over 5 years and expire 10 years subsequent to the grant.

Performance share awards were granted through 1995. As of December 31, 2001, none of these awards were outstanding and no further payments were due. These awards were based on the achievement of established performance goals, and the majority of the awards vested over five years. Expense provisions referable to these awards amounted to $0 in 2001, $3,451,000 in 2000 and $3,313,000 in 1999. Expense provisions were affected by changes in the market value of the Company's common stock and performance versus a preselected peer group.

The Company applies Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," in accounting for its stock-based compensation. Pro forma information regarding net earnings and earnings per share is required by SFAS No. 123, "Accounting for Stock-based Compensation" (FAS 123), and has been determined as if the Company had accounted for its employee stock options and performance share awards under the fair value method of that statement. The fair value for performance share awards was based on a discounted fair market value of the Company's stock at grant date. The fair value for options was estimated at the date of the grant using a Black-Scholes option pricing model with the following weighted-average assumptions for the years ended December 31, 2001, 2000 and 1999 as presented below:

2001

2000

1999

Risk-free interest rate

4.85%

6.78%

5.21%

Dividend yields

2.00%

1.98%

1.70%

Volatility factors of the expected market price of the
Company's common stock

23.82%

25.54%

21.35%

Weighted-average expected life of the option

5 years

5 years

5 years

For purposes of pro forma disclosures, the estimated fair value of the options and performance share awards is amortized to expense over the options' vesting period. The effects of applying FAS 123 on a pro forma basis would have decreased net earnings by approximately $4,227,000 in 2001, $1,691,000 in 2000 and $1,253,000 in 1999. For 2001, the impact on basic and diluted earnings per share would have been a $0.05 and $0.04 decrease, respectively. The impact on both basic and diluted earnings per share in 2000 would have been a $0.02 decrease. Similarly, the impact on basic and diluted earnings per share in 1999 would have been a $0.02 decrease.

A summary of the Company's stock option activity; related information as of December 31, 2001, 2000 and 1999; and changes during each year is presented below:

	2001		2000		1999
	Shares	Weighted-Average Exercise Price	Shares	Weighted-Average Exercise Price	Shares	Weighted-Average Exercise Price
Outstanding at beginning of year	5,157,958	$32.16	4,092,846	$28.96	3,248,640	$24.04
Granted at fair value	1,093,600	$44.93	1,238,000	$42.34	963,400	$45.17
Exercised	(247,338)	$22.49	(88,048)	$22.04	(60,109)	$22.03
Forfeited	(64,095)	$42.41	(84,840)	$36.87	(59,085)	$29.47
Outstanding at year end	5,940,125	$34.80	5,157,958	$32.16	4,092,846	$28.96
Options exercisable at year end	2,945,545	$27.96	2,117,758	$24.71	1,405,331	$21.73
Weighted-average grant date fair value of each option granted during the year	$7.26		$8.25		$7.27

The following table summarizes information about stock options outstanding and exercisable at December 31, 2001:

	Options Outstanding			Options Exercisable
	Number of Shares	Weighted-Average Remaining Contractual Life (Years)	Weighted-Average Exercise Price	Number of Shares	Weighted-Average Exercise Price

Range of Exercise Price
$18.58 - $19.73	894,298	4.38	$18.86	894,298	$18.86
$21.31	996,782	5.12	$21.31	824,897	$21.31
$29.20 - $32.95	872,625	6.12	$32.94	556,635	$32.94
$42.34 - $42.48	1,168,760	8.11	$42.34	236,940	$42.34
$43.75 - $45.63	948,660	7.16	$45.15	432,475	$45.13
$44.90	1,055,500	9.11	$44.90	0	$0
$47.44 - $48.78	3,500	9.13	$48.20	300	$47.44
Total/Average	5,940,125	6.78	$34.80	2,945,545	$27.96

Cash-based Compensation Plans
The Company has incentive plans under which cash awards may be made annually to officers and key employees. Expense provisions referable to these plans amounted to $6,893,000 in 2001, $8,546,000 in 2000 and $6,832,000 in 1999.

Note 11.  Other Commitments and Contingent Liabilities
The Company has commitments in the form of unconditional purchase obligations as of December 31, 2001. These include commitments for the purchase of property, plant and equipment of $38,025,000 and commitments for noncapital purchases of $81,712,000. The commitments for the purchase of property, plant and equipment are due in 2002; the commitments for noncapital purchases are due as follows: 2002, $21,889,000; 2003-2004, $28,721,000; 2005-2006, $18,452,000; and aggregate $12,650,000 thereafter.

The Company has commitments in the form of contractual obligations related to its mineral royalties as of December 31, 2001 in the amount of $72,857,000, due as follows: 2002, $7,009,000; 2003-2004, $12,891,000; 2005-2006, $8,921,000; and aggregate $44,036,000 thereafter.

The Company is a defendant in various lawsuits incident to the ordinary course of business. It is not possible to determine with precision the probable outcome or the amount of liability, if any, with respect to these lawsuits; however, in the opinion of the Company and its counsel, the disposition of these lawsuits will not adversely affect the consolidated financial statements of the Company to a material extent.

Note 12.  Shareholders' Equity
A total of 42,511,981 shares has been purchased at a cost of $608,423,000 pursuant to a common stock purchase plan initially authorized by the Board of Directors in July 1985 and increased in subsequent years, and pursuant to a tender offer during the period November 5, 1986 through December 4, 1986. The number of shares remaining under the current purchase authorization was 8,473,988 as of December 31, 2001. No shares were purchased in 2001.

Note 13.  Other Comprehensive Income (Loss)
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income," which established new rules for the reporting of comprehensive income and its components in the financial statements. Comprehensive income includes charges and credits to equity that are not the result of transactions with shareholders. Comprehensive income is composed of two subsets: net earnings and other comprehensive income (loss). Other comprehensive income (loss) for the Company is comprised of fair value adjustments to cash flow hedges pertaining to its commodity price swap contracts to purchase natural gas. The Company adopted this pronouncement in the first quarter of 1998. However, prior to 2001, there was no material impact on the Company's financial reporting resulting from this adoption. Effective in 2001, the components of other comprehensive income (loss) are presented in the Consolidated Statements of Shareholders' Equity, net of applicable taxes.

The amount of income tax (expense) benefit allocated to each component of other comprehensive income (loss) at December 31, 2001 is summarized as follows (in thousands of dollars):

	Before-Tax Amount	Tax (Expense) Benefit	Net-of-Tax Amount
Other comprehensive income (loss), net of taxes:
Cumulative effect of a change in accounting principle	$6,276	$(2,448)	$3,828
Fair value adjustment to cash flow hedges	(25,859)	10,120	(15,739)
Less reclassification adjustment for losses included in net earnings	6,276	(2,448)	3,828
Net fair value adjustment to cash flow hedges	(19,583)	7,672	(11,911)
Total other comprehensive loss, net of taxes	$(13,307)	$5,224	$(8,083)

Note 14. Segment Data
The Company's reportable segments are organized around products and services and continue to be Construction Materials and Chemicals. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company's determination of segment earnings (a) recognizes equity in the income or losses of nonconsolidated companies as part of segment earnings; (b) reflects allocations of general corporate expenses to the segments; (c) does not reflect interest income or expense; and (d) is before income taxes.

The Construction Materials segment produces and sells aggregates and related products and services in seven regional divisions. These divisions have been aggregated for reporting purposes. During 2001, the Company had sales in 22 states, the District of Columbia, Mexico, Aruba, Chile and the Cayman Islands. Customers use aggregates primarily in the construction and maintenance of highways, streets and other public works and in the construction of housing and commercial, industrial and other nonresidential facilities.

The Chemicals segment is organized into two business units: Chloralkali and Performance Chemicals. The Chloralkali business unit produces and sells chlorine, caustic soda, hydrochloric acid, potassium chemicals and chlorinated organic chemicals principally to the chemical processing, polymer, refrigerant, foam-blowing, food and pharmaceutical, pulp and paper, textile and water management industries. The Performance Chemicals business unit offers specialty and custom chemical products, services, technologies and manufacturing capabilities for a variety of customer needs in a number of industries, including pulp and paper and water management. These business units have been aggregated for reporting purposes.

Because the majority of the Company's activities are domestic, assets outside the United States are not material. The Construction Materials segment sells a relatively small amount of construction aggregates outside the United States. Nondomestic net sales in the Construction Materials segment were $5,519,000 in 2001, $26,000 in 2000 and $27,000 in 1999. The Chemicals segment sells to customers outside the United States primarily in Asia, South America and Europe. This segment's net sales to foreign customers were $83,121,000 in 2001, $58,800,000 in 2000 and $58,200,000 in 1999.

Segment Financial Disclosure

Amounts in millions	2001	2000	1999
Net Sales
Construction Materials	$2,113.6	$1,885.9	$1,810.6
Chemicals	641.7	605.8	545.2
Total	$2,755.3	$2,491.7	$2,355.8
Total Revenues
Construction Materials	$2,331.9	$2,083.8	$2,008.2
Chemicals	688.1	660.8	599.6
Total	$3,020.0	$2,744.6	$2,607.8
Earnings (Loss) Before Interest and Income Taxes
Construction Materials	$400.5	$375.7	$370.0
Chemicals	(19.6)	(20.1)	25.8
Total	$380.9	$355.6	$395.8
Identifiable Assets
Construction Materials	$2,594.9	$2,375.2	$2,101.3
Chemicals	611.1	639.5	547.7
Identifiable assets	3,206.0	3,014.7	2,649.0
Investment in nonconsolidated companies	1.4	59.5	65.3
General corporate assets	90.0	99.1	72.4
Cash items	100.8	55.3	52.8
Total	$3,398.2	$3,228.6	$2,839.5
Depreciation, Depletion and Amortization
Construction Materials	$212.5	$177.6	$160.7
Chemicals	65.7	54.8	46.4
Total	$278.2	$232.4	$207.1
Capital Expenditures
Construction Materials	$230.6	$213.5	$200.0
Chemicals	57.6	132.9	118.1
Total	$288.2	$346.4	$318.1
Net Sales by Product
Construction Materials
Aggregates	$1,483.0	$1,248.1	$1,193.0
Asphaltic products and placement	342.8	328.5	289.9
Ready-mixed concrete	186.2	201.6	206.6
Other	101.6	107.7	121.1
Total	$2,113.6	$1,885.9	$1,810.6
Chemicals
Chloralkali - Inorganic	$264.8	$192.0	$149.0
Chloralkali - Organic	213.5	238.8	209.7
Performance Chemicals	163.4	175.0	186.5
Total	$641.7	$605.8	$545.2

Note 15. Supplemental Cash Flow Information
Supplemental information referable to the Consolidated Statements of Cash Flows is summarized below (in thousands of dollars):

	2001	2000	1999
Cash payments:
Interest (exclusive of amount capitalized)	$55,484	$49,253	$39,079
Income taxes	57,408	70,615	85,756
Noncash investing and financing activities:
Amounts referable to business acquisitions:
Liabilities assumed	30,505	16,742	480,087
Fair value of stock issued	0	1,300	10,580
Debt issued in purchase of assets, net of liabilities	0	3,421	8,645

Note 16.  Acquisitions
Early in 2001, the Company acquired all of its former joint venture partner's, Empresas ICA Sociedad Controladora, S.A. de C.V. (ICA), interests in the companies that made up the former Vulcan/ICA joint venture for $121,100,000 in cash subject to certain adjustments. These companies produce aggregates on the Yucatan Peninsula and transport and sell them in various markets primarily along the U.S. Gulf Coast. The acquisition resulted in Vulcan becoming the sole owner of the joint venture companies, known collectively as the Crescent Market Companies. The businesses of these companies include:

- a limestone quarry, aggregates processing plant, deepwater harbor and other properties located on the east coast
  of Mexico's Yucatan Peninsula
- aggregates transportation involving two ships used to transport aggregates from Mexico to the United States and
  the Caribbean Basin
- aggregates production and various distribution facilities primarily on the Gulf Coast, as well as two aggregates
  production facilities in Florida and a fine-grind plant in Texas

In addition to the three large acquisitions (Crescent Market Companies in 2001 for $121,100,000, Tarmac in 2000 for $226,900,000 plus related working capital and CalMat in 1999 for $748,579,000), at various dates during 2001, 2000 and 1999 the Company acquired several smaller companies. The combined purchase prices for these years were approximately $18,000,000, $11,000,000 and $56,000,000, respectively. With the exception of the three aforementioned large acquisitions, funds for the purchases were primarily provided by internally generated cash flows or stock issuances. The amount by which the total cost of these acquisitions exceeded the fair value of the net assets acquired, including identifiable intangibles, was recognized as goodwill.

All the 2001, 2000 and 1999 acquisitions described above were accounted for as purchases and, accordingly, the results of operations of the acquired businesses are included in the accompanying consolidated financial statements from their respective dates of acquisition. Had the businesses been acquired at the beginning of fiscal 2000 and 1999, respectively, on a pro forma basis, revenue, net income and earnings per share would not differ materially from the amounts reflected in the accompanying consolidated financial statements for 2000 and 1999.

Goodwill and the allowances for amortization at December 31 are as follows (in thousands of dollars):

2001

2000

1999

Goodwill

$681,289

$627,896

$499,861

Less allowances for amortization

92,727

65,852

45,078

Goodwill, net

$588,562

$562,044

$454,783

Net Sales, Total Revenues, Net Earnings and Earnings Per Share
Vulcan Materials Company and Subsidiary Companies

Amounts in millions, except per share data

2001

2000

Net Sales

First quarter

$569.1

$515.0

Second quarter

760.5

665.2

Third quarter

766.0

681.2

Fourth quarter

659.7

630.3

     Total

$2,755.3

$2,491.7

Total Revenues

First quarter

$620.4

$565.4

Second quarter

828.3

732.9

Third quarter

843.1

753.0

Fourth quarter

728.2

693.3

     Total

$3,020.0

$2,744.6

Gross Profit

First quarter

$85.5

$99.2

Second quarter

198.9

174.1

Third quarter

211.9

180.8

Fourth quarter

153.2

129.6

     Total

$649.5

$583.7

Net Earnings (Loss)

First quarter

$5.7

$23.3

Second quarter

79.6

76.1

Third quarter

92.2

86.0

Fourth quarter

45.2

34.5

     Total

$222.7

$219.9

Basic Earnings (Loss) Per Share

First quarter

$0.06

$0.23

Second quarter

0.79

0.75

Third quarter

0.91

0.85

Fourth quarter

0.44

0.34

     Full year

$2.20

$2.18

Diluted Earnings (Loss) Per Share

First quarter

$0.06

$0.23

Second quarter

0.78

0.75

Third quarter

0.90

0.84

Fourth quarter

0.44

0.34

     Full year

$2.17

$2.16

Financial Terminology
Acquisitions
The sum of net assets (assets less liabilities, including acquired debt) obtained in a business combination. Net assets are recorded at their fair value at the date of the combination, and include tangible and intangible items.

Capital Employed
The sum of interest-bearing debt, other noncurrent liabilities and shareholders' equity; for a segment: the net sum of the segment's assets, current liabilities, and allocated corporate assets and current liabilities, exclusive of cash items and debt.

Capital Expenditures
Capital expenditures include capitalized replacements of and additions to property, plant and equipment, including capitalized leases, renewals and betterments. Capital expenditures exclude the property, plant and equipment obtained by business acquisitions. Each segment's capital expenditures include allocated corporate amounts.

The Company classifies its capital expenditures into three categories based on the predominant purpose of the project expenditures. Thus, a project is classified entirely as a replacement if that is the principal reason for making the expenditure even though the project may involve some cost-saving and/or capacity improvement aspects. Likewise, a profit-adding project is classified entirely as such if the principal reason for making the expenditure is to add operating facilities at new locations (which occasionally replace facilities at old locations), to add product lines, to expand the capacity of existing facilities, to reduce costs, to increase mineral reserves, to improve products, etc.

Capital expenditures classified as environmental control do not reflect those expenditures for environmental control activities, including industrial health programs, that are expensed currently. Such expenditures are made on a continuing basis and at significant levels in each of the Company's segments. Frequently, profit-adding and major replacement projects also include expenditures for environmental control purposes.

Cash Items
The sum of cash, cash equivalents and short-term investments.

Common Shareholders' Equity
The sum of common stock (less the cost of common stock in treasury), capital in excess of par value and retained earnings, as reported in the balance sheet.

EBIT
Earnings before interest and income taxes.

EBITDA
Earnings before interest, income taxes, depreciation, depletion and amortization.

Long-term Capital
The sum of long-term debt, other noncurrent liabilities and shareholders' equity.

Net Sales
Total customer revenues for the Company's products and services, net of discounts, if any.

Operating Income after Taxes
Net earnings from operations plus the after-tax cost of interest expense.

Ratio of Earnings to Fixed Charges
The sum of earnings from continuing operations before income taxes, amortization of capitalized interest and fixed charges net of interest capitalization credits, divided by fixed charges. Fixed charges are the sum of interest expense before capitalization credits, amortization of financing costs and one-third of rental expense.

Segment Earnings
Earnings before net interest and income taxes and after allocation of corporate expenses and income, and after assignment of equity income to the segments with which it is related in terms of products and services. Allocations are based on average capital employed and net sales.

Short-term Debt
The sum of current interest-bearing debt, including current maturities of long-term debt and interest-bearing notes payable.

Total Shareholder Return
Average annual rate of return using both stock price appreciation and quarterly dividend reinvestment. Stock price appreciation is based on a point-to-point calculation, using end-of-year data.

Exhibit (21)

VULCAN MATERIALS COMPANY
SUBSIDIARIES
As of December 31, 2001
(Active Subsidiaries Only)

Entity

State or Other
Jurisdiction of
Incorporation
or Organization

% Owned
Directly
or Indirectly
By Vulcan

Subsidiaries :

Allied Concrete & Materials Co.

Arizona

100

Atlantic Granite Company

South Carolina

66-2/3

Azusa Rock, Inc.

California

100

Calizas Industriales del Carmen, S.A. de C.V.

Mexico

100

Callaway Chemical Company

New Jersey

100

Callaway Chemical De Mexico S. de R.L. de C.V.

Mexico

100

CalMat Co.

Delaware

100

CalMat Co. of New Mexico

New Mexico

100

CalMat Leasing Co.

Arizona

100

Goodman Road Properties, LLC

North Carolina

100

Kirst Construction Co., Inc.

California

100

MedTex Lands, Inc.

Texas

100

Palomar Transit Mix Co.

California

100

R.C. Fulfer Company, Inc

Texas

100

Rancho Piedra Caliza, S.A. de C.V.

Mexico

100

Rapica Servicios Tecnicos Y Administrativos, S.A. de C.V.

Mexico

100

RECO Transportation, LLC

Delaware

100

Reliance Transport Co.

California

100

Rio Norte Este Co.

California

100

River Bend Corp.

California

100

Sanger Rock and Sand

California

100

Servicios Integrales, Gestoria Y Administracion, S.A. de C.V.

Mexico

100

Sloan Canyon Sand Co.

California

100

Soportes Tecnicos Y Administrativos, S.A. de C.V.

Mexico

100

Statewide Transport, Inc.

Texas

100

Triangle Rock Products, Inc.

California

100

Vulcan Aggregates Company, LLC

Delaware

100

Vulcan Chemical Technologies, Inc.

Delaware

100

Vulcan Chemicals Investments, LLC

Delaware

100

Vulcan Chloralkali, LLC

Delaware

51

Vulcan Construction Materials, Inc.

Delaware

100

Vulcan Construction Materials, LP

Delaware

100

Vulcan Gulf Coast Aggregates, Inc.

New Jersey

100

Vulcan Gulf Coast Materials, Inc.

New Jersey

100

Vulcan Holdings, Inc.

New Jersey

100

Vulcan International Holdings ApS

Denmark

100

Vulcan International Holdings II ApS

Denmark

100

Vulcan International, Ltd.

U.S. Virgin Islands

100

Vulcan Lands, Inc.

New Jersey

100

Vulcan Materials Finance Company

Tennessee

100

Vulcan Performance Chemicals, Ltd.

British Columbia

100

Vulica Shipping Company, Limited

Bahamas

100

Wanatah Trucking Co., Inc.

Indiana

100

Western Environmental Contracting, Inc.

California

100

Exhibit (23)

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statements No. 333-48894 and 333-67586 on Form S-3 and Registration Statements No. 333-40394, 333-40496, and 333-40498 on Form S-8 of Vulcan Materials Company of our reports dated February 1, 2002, appearing in and incorporated by reference in the Annual Report on Form 10-K of Vulcan Materials Company for the year ended December 31, 2001, and to the reference to us under the heading "Experts" in the Prospectus, which is part of these Registration Statements.

/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP

Birmingham, Alabama
March 27, 2002

Exhibit (24)
POWER OF ATTORNEY
The undersigned director of Vulcan Materials Company, a New Jersey corporation, hereby nominates, constitutes and appoints William F. Denson, III, and Michael R. Mills, and each of them, the true and lawful attorneys of the undersigned to sign the name of the undersigned as director to the Annual Report on Form 10-K for the year ended December 31, 2001 of said corporation to be filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and to any and all amendments to said report. The undersigned hereby grants to said attorneys full power of substitution, resubstitution and revocation, all as fully as the undersigned could do if personally present, hereby ratifying all that said attorneys or their substitutes may lawfully do by virtue hereof. IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company has executed this Power of Attorney this 21st day of March, 2002.
	/s/ Philip J. Carroll, Jr. Philip J. Carroll, Jr.
	/s/ Livio D. DeSimone Livio D. DeSimone
	/s/ Phillip W. Farmer Phillip W. Farmer
	/s/ H. Allen Franklin H. Allen Franklin
	/s/ Ann McLaughlin Korologos Ann McLaughlin Korologos
	/s/ Douglas J. McGregor Douglas J. McGregor
	/s/ James V. Napier James V. Napier
	/s/ Donald B. Rice Donald B. Rice
	/s/ Orin R. Smith Orin R. Smith

	Page
Consolidated Financial Statements	33-36
Notes to Consolidated Financial Statements	37-50
Management's Responsibility for Financial Reporting and Internal Control	32
Independent Auditors' Report	32
Net Sales, Total Revenues, Net Earnings and Earnings Per Share Quarterly Financial Data for Each of the 2 Years Ended December 31, 2001 and 2000 (Unaudited)	58

	Page
Consolidated Statements of Earnings	33
Consolidated Balance Sheets	34
Consolidated Statements of Cash Flows	35
Consolidated Statements of Shareholders' Equity	36
Notes to Consolidated Financial Statements	37-50
Management's Responsibility for Financial Reporting and Internal Control	32
Independent Auditors' Report	32
Net Sales, Total Revenues, Net Earnings and Earnings Per Share Quarterly Financial Data for each of the 2 Years Ended December 31, 2001 and 2000 (Unaudited)	58

Construction Materials 2001 vs. 2000
2000 earnings	$376
Aggregates*	20
Asphalt*	29
Selling, administrative and general	(24)
All other	(1)
2001 earnings	$400
*Excludes Tarmac/Crescent Market Companies acquisitions.

Construction Materials 2000 vs. 1999
1999 earnings	$370
Aggregates pricing	43
Aggregates volume	2
Higher fuel and asphalt costs	(27)
All other	(12)
2000 earnings	$376

Chemicals 2001 vs. 2000
2000 earnings	$(20)
Higher caustic soda pricing	65
Higher natural gas costs	(21)
Lower chlorinated products pricing and volume, net	(30)
Performance Chemicals' charges	17
All other	(31)
2001 earnings	$(20)

Chemicals 2000 vs. 1999
1999 earnings	$26
Higher costs for energy and hydrocarbon-based raw materials	(31)
Performance Chemicals' reorganization	(32)
All other	17
2000 earnings	$(20)

Entity	State or Other Jurisdiction of Incorporation or Organization	% Owned Directly or Indirectly By Vulcan
Subsidiaries :
Allied Concrete & Materials Co.	Arizona	100
Atlantic Granite Company	South Carolina	66-2/3
Azusa Rock, Inc.	California	100
Calizas Industriales del Carmen, S.A. de C.V.	Mexico	100
Callaway Chemical Company	New Jersey	100
Callaway Chemical De Mexico S. de R.L. de C.V.	Mexico	100
CalMat Co.	Delaware	100
CalMat Co. of New Mexico	New Mexico	100
CalMat Leasing Co.	Arizona	100
Goodman Road Properties, LLC	North Carolina	100
Kirst Construction Co., Inc.	California	100
MedTex Lands, Inc.	Texas	100
Palomar Transit Mix Co.	California	100
R.C. Fulfer Company, Inc	Texas	100
Rancho Piedra Caliza, S.A. de C.V.	Mexico	100
Rapica Servicios Tecnicos Y Administrativos, S.A. de C.V.	Mexico	100
RECO Transportation, LLC	Delaware	100
Reliance Transport Co.	California	100
Rio Norte Este Co.	California	100
River Bend Corp.	California	100
Sanger Rock and Sand	California	100
Servicios Integrales, Gestoria Y Administracion, S.A. de C.V.	Mexico	100
Sloan Canyon Sand Co.	California	100
Soportes Tecnicos Y Administrativos, S.A. de C.V.	Mexico	100
Statewide Transport, Inc.	Texas	100
Triangle Rock Products, Inc.	California	100
Vulcan Aggregates Company, LLC	Delaware	100
Vulcan Chemical Technologies, Inc.	Delaware	100
Vulcan Chemicals Investments, LLC	Delaware	100
Vulcan Chloralkali, LLC	Delaware	51
Vulcan Construction Materials, Inc.	Delaware	100
Vulcan Construction Materials, LP	Delaware	100
Vulcan Gulf Coast Aggregates, Inc.	New Jersey	100
Vulcan Gulf Coast Materials, Inc.	New Jersey	100
Vulcan Holdings, Inc.	New Jersey	100
Vulcan International Holdings ApS	Denmark	100
Vulcan International Holdings II ApS	Denmark	100
Vulcan International, Ltd.	U.S. Virgin Islands	100
Vulcan Lands, Inc.	New Jersey	100
Vulcan Materials Finance Company	Tennessee	100
Vulcan Performance Chemicals, Ltd.	British Columbia	100
Vulica Shipping Company, Limited	Bahamas	100
Wanatah Trucking Co., Inc.	Indiana	100
Western Environmental Contracting, Inc.	California	100