EXECUTIVE SUMMARY

FINANCIAL SUMMARY FOR 2012

¡ Gross profit increased $50.2 million on flat revenues

¡ Gross profit margin as a percentage of net sales improved 2.1 percentage points (210 basis points)

¡ Aggregates segment gross profit margin as a percentage of segment revenues improved 2.7 percentage points (270 basis points) from the prior year due to lower unit cost of sales and higher pricing

¡ Aggregates shipments declined 1% and pricing increased 2%

¡ Aggregates segment cash gross profit per ton increased 5%

¡ Selling, Administrative and General (SAG) expenses were $259.1 million versus $290.0 million in the prior year

¡ Net loss improved by $18.2 million and Adjusted EBITDA increased $59.5 million

¡ Gross cash proceeds of $173.6 million were realized from asset sales

¡ We retired $134.8 million of debt as scheduled

KEY DRIVERS OF VALUE CREATION

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* Source: Moody's Analytics

EARNINGS GROWTH INITIATIVES

In February 2012, our Board of Directors approved a two-part initiative to accelerate earnings and cash flow growth, improve our operating leverage, reduce overhead costs and strengthen our credit profile:

§ A Profit Enhancement Plan that includes cost reductions and other earnings enhancements intended to improve our run-rate profitability, as measured by EBITDA, by more than $100 million annually at current volumes. The Profit Enhancement Plan is focused on three areas - sourcing, general & administrative costs and transportation/logistics. Including the $55 million run-rate benefit referable to our previously announced organizational restructuring and ERP and Shared Services Platforms, we expect to increase pretax earnings by $130 million in 2013 and $155 million in 2014 from 2011 levels.

§ Planned Asset Sales with targeted net proceeds of approximately $500 million from the sale of non-core assets. Through 2012, we have achieved $168.6 million of proceeds net of $5.0 million of transaction costs related to the sale of assets as outlined in Note 19 "Acquisitions and Divestitures" in Item 8 "Financial Statements and Supplementary Data." The intended asset sales are consistent with our strategic focus on building leading aggregates positions in markets with above-average long-term demand growth. However, the ultimate composition and timing of such transactions is difficult to project. The proceeds of these sales, together with the increased earnings resulting from the Profit Enhancement Plan, will be used to strengthen our balance sheet, unlock capital for more productive uses, improve our operating results and create value for shareholders.

MARKET DEVELOPMENTS

We believe economic and construction-related fundamentals that drive demand for our products are continuing to improve from the historically low levels created by the economic downturn. The passage of the new federal highway bill in July 2012 is providing stability and predictability to future highway funding. Through the first three months of fiscal year 2013 (i.e., October-December 2012), obligation of federal funds for future highway projects is up sharply versus the prior year, a positive indicator of growth in future contract awards. The large increase in TIFIA (Transportation Infrastructure Finance and Innovation Act) funding contained in the new highway bill should also positively impact demand going forward.

Leading indicators of private construction activity, specifically residential housing starts and contract awards for nonresidential buildings, continue to improve. Consequently, aggregates demand in private construction is growing. We are seeing tangible evidence of this growth in several key states, including Florida, Texas, California, Georgia and Arizona. Growth in residential construction has historically been a leading indicator of other construction end uses.

UNSOLICITED EXCHANGE OFFER

In December 2011, Martin Marietta commenced an unsolicited exchange offer for all outstanding shares of our common stock at a fixed exchange ratio of 0.50 shares of Martin Marietta common stock for each Vulcan common share and indicated its intention to nominate a slate of directors to our Board. After careful consideration, including a thorough review of the offer with its financial and legal advisors, our Board unanimously determined that Martin Marietta's offer was inadequate, substantially undervalued Vulcan, had substantial execution risk, and therefore was not in the best interests of Vulcan and its shareholders.

In May 2012, the Delaware Chancery Court ruled and the Delaware Supreme Court affirmed that Martin Marietta had breached two confidentiality agreements between the companies, and enjoined Martin Marietta for a period of four months from pursuing its exchange offer for our shares, prosecuting its proxy contest, or otherwise taking steps to acquire control of our shares or assets and from any further violations of the two confidentiality agreements between the parties. As a result of the court ruling, Martin Marietta withdrew its exchange offer and its board nominees.

In response to Martin Marietta's action, we incurred legal, professional and other costs of $43.4 million in 2012 and $2.2 million in 2011.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Generally Accepted Accounting Principles (GAAP) does not define "free cash flow," "segment cash gross profit" and "Earnings Before Interest, Taxes, Depreciation and Amortization" (EBITDA). Thus, free cash flow should not be considered as an alternative to net cash provided by operating activities or any other liquidity measure defined by GAAP. Likewise, segment cash gross profit and EBITDA should not be considered as alternatives to earnings measures defined by GAAP. We present these metrics for the convenience of investment professionals who use such metrics in their analyses and for shareholders who need to understand the metrics we use to assess performance and to monitor our cash and liquidity positions. The investment community often uses these metrics as indicators of a company's ability to incur and service debt. We use free cash flow, segment cash gross profit, EBITDA and other such measures to assess liquidity and the operating performance of our various business units and the consolidated company. Additionally, we adjust EBITDA for certain items to provide a more consistent comparison of performance from period to period and provide the earnings per share impact of these adjustments for the convenience of the investment community. We do not use these metrics as a measure to allocate resources. Reconciliations of these metrics to their nearest GAAP measures are presented below:

FREE CASH FLOW

Free cash flow is calculated by deducting purchases of property, plant &
equipment from net cash provided by operating activities.



in millions                                   2012          2011         2010
Net cash provided by operating activities   $ 238.5      $ 169.0      $ 202.7
Purchases of property, plant & equipment      (93.4 )      (98.9 )      (86.3 )
Free cash flow                              $ 145.1        $70.1      $ 116.4

SEGMENT CASH GROSS PROFIT

Segment cash gross profit adds back noncash charges for depreciation, depletion,
accretion and amortization to gross profit.



in millions, except per ton data                            2012           2011           2010
Aggregates segment
Gross profit                                              $352.1         $306.2         $320.2
Depreciation, depletion, accretion and amortization        240.7          267.0          288.6
Aggregates segment cash gross profit                      $592.8         $573.2         $608.8
Sales tons                                                 141.0          143.0          147.6
Aggregates segment cash gross profit per ton               $4.21          $4.01          $4.12
Concrete segment
Gross profit                                              ($38.2 )       ($43.4 )       ($45.0 )
Depreciation, depletion, accretion and amortization         41.3           47.7           50.5
Concrete segment cash gross profit                          $3.1           $4.3           $5.5
Asphalt Mix segment
Gross profit                                               $22.9          $25.6          $29.3
Depreciation, depletion, accretion and amortization          8.7            7.7            8.4
Asphalt Mix segment cash gross profit                      $31.6          $33.3          $37.7
Cement segment
Gross profit                                               ($2.8 )        ($4.5 )        ($3.8 )
Depreciation, depletion, accretion and amortization         18.1           17.8           20.1
Cement segment cash gross profit                           $15.3          $13.3          $16.3

EBITDA AND ADJUSTED EBITDA

EBITDA is an acronym for Earnings Before Interest, Taxes, Depreciation and
Amortization.



in millions                                                 2012           2011           2010
Net loss                                                  ($52.6 )       ($70.8 )       ($96.5 )
Benefit from income taxes                                  (66.5 )        (78.5 )        (89.7 )
Interest expense, net of interest income                   211.9          217.3          180.7
Earnings on discontinued operations, net of taxes           (1.3 )         (4.5 )         (6.0 )
Depreciation, depletion, accretion and amortization        332.0          361.7          382.1
EBITDA                                                    $423.5         $425.2         $370.6
Gain on sale of real estate and businesses                ($65.1 )       ($42.1 )       ($39.5 )
(Recovery from) charge for legal settlement                  0.0          (46.4 )         40.0
Restructuring charges                                        9.5           12.9            0.0
Exchange offer costs                                        43.4            2.2            0.0
Adjusted EBITDA                                           $411.3         $351.8         $371.1

EPS AND ADJUSTED EPS

EPS is an acronym for Earnings Per Share, a GAAP measure of performance. The
table below adjusts this GAAP measure for the same items as noted in the
Adjusted EBITDA table above.



                                                  2012          2011          2010
Diluted Earnings (Loss) Per Share
Net loss                                        ($0.41 )      ($0.55 )      ($0.75 )
Less: Discontinued operations earnings            0.01          0.03          0.05
Continuing operations loss                      ($0.42 )      ($0.58 )      ($0.80 )
Gain on sale of real estate and businesses       (0.30 )       (0.20 )       (0.19 )
(Recovery from) charge for legal settlement       0.00         (0.22 )        0.19
Restructuring charges                             0.05          0.06          0.00
Exchange offer costs                              0.20          0.01          0.00
Adjusted EPS - continuing operations            ($0.47 )      ($0.93 )      ($0.80 )

RESULTS OF OPERATIONS

Net sales and cost of goods sold exclude intersegment sales and delivery revenues and cost. This presentation is consistent with the basis on which we review our consolidated results of operations. We discuss separately our discontinued operations, which consists of our former Chemicals business.

The following table shows net earnings in relationship to net sales, cost of goods sold, operating earnings, EBITDA and Adjusted EBITDA.

CONSOLIDATED OPERATING RESULTS



For the years ended December 31               2012            2011            2010
in millions, except per share data

Net sales                                 $2,411.2        $2,406.9        $2,405.9
Cost of goods sold                         2,077.2         2,123.0         2,105.2
Gross profit                                $334.0          $283.9          $300.7

Operating earnings (loss)                    $84.8           $63.4          ($14.5 )

Loss from continuing operations
before income taxes                        ($120.4 )       ($153.7 )       ($192.2 )

Loss from continuing operations             ($53.9 )        ($75.3 )       ($102.5 )
Earnings on discontinued operations,
net of income taxes                            1.3             4.5             6.0
Net loss                                    ($52.6 )        ($70.8 )        ($96.5 )

Basic earnings (loss) per share
Continuing operations                       ($0.42 )        ($0.58 )        ($0.80 )
Discontinued operations                       0.01            0.03            0.05
Basic net earnings (loss) per share         ($0.41 )        ($0.55 )        ($0.75 )

Diluted earnings (loss) per share
Continuing operations                       ($0.42 )        ($0.58 )        ($0.80 )
Discontinued operations                       0.01            0.03            0.05
Diluted net earnings (loss) per share       ($0.41 )        ($0.55 )        ($0.75 )

EBITDA                                      $423.5          $425.2          $370.6

Adjusted EBITDA                             $411.3          $351.8          $371.1

OPERATING LEVERAGE EMBEDDED IN OUR BUSINESS

The strong recovery in 2012's gross profit demonstrates the operating leverage embedded in our business as demand recovers. We expect this momentum to continue in 2013 due primarily to an improving demand environment, continued improvement in pricing and our continued focus on:

§ reducing overhead costs through streamlined management structure

§ reducing debt

§ improving our liquidity position and earnings through divestitures of non-strategic assets or other strategic alternatives

Since 2007, we have invested $63.5 million to implement our new ERP and Shared Services platforms. We initiated the project to create a common platform for all systems that support our business, and have completed all of the major milestones for the project. These platforms are helping to streamline processes enterprise-wide and standardize administrative and support functions while providing enhanced flexibility to monitor and control costs.

These new platforms enabled us to consolidate our eight divisions into four regions, streamline our support functions, and reduce related positions and overhead costs - resulting in annualized overhead cost savings of over $55 million. As a

result of these restructuring initiatives, we incurred severance and other related charges of $10.0 million during 2012 and $13.0 million during 2011.

To position Vulcan for significant earnings growth, we remain focused on taking prudent steps to control costs. When prudent, we adjust our geographic footprint so as to focus on building leading aggregates positions in markets with above-average long-term demand growth.

We completed several transactions in 2012 that provided $173.6 million in gross cash proceeds. And, we continue to work on additional asset sales. However, the ultimate timing of such transactions is difficult to predict. We remain committed to completing transactions designed to strengthen our balance sheet, unlock capital for more productive uses, improve our operating results and create value for shareholders.

Results for 2012 were a net loss of $52.6 million, or $0.41 per diluted share, compared to a net loss of $70.8 million, or $0.55 per diluted share in 2011. Higher unit costs for diesel fuel and liquid asphalt resulted in higher pretax costs of $3.9 million and $10.7 million, respectively. Additionally, each year's results were impacted by discrete items as follows:

§ The 2012 results include a $65.1 million pretax gain on sale of real estate and businesses, a pretax charge of $9.6 million related to our restructuring and a pretax charge of $43.4 million related to the unsolicited exchange offer

§ The 2011 results include a $42.1 million pretax gain on sale of real estate and businesses, a $46.4 million recovery from legal settlement (settled in 2010 for $40.0 million, see Note 12 "Commitments and Contingencies" in Item 8 "Financial Statements and Supplementary Data), a pretax charge of $12.9 million related to our restructuring and a pretax charge of $2.2 million related to the unsolicited exchange offer

§ The 2010 results include a $39.5 million pretax gain on sale of real estate and businesses and a $40.0 million charge for legal settlement

Year-over-year changes in earnings from continuing operations before income taxes are summarized below:

in millions
                                                      2010       ($192.2 )      2011       ($153.7 )
Higher (lower) aggregates earnings due to
Lower volumes                                                      (26.7 )                   (11.8 )
Higher selling prices                                               17.6                      27.2
Lower (higher) costs and other items                                (4.9 )                    30.5
Higher concrete earnings                                             1.6                       5.2
Lower asphalt mix earnings                                          (3.7 )                    (2.7 )
Higher (lower) cement earnings                                      (0.7 )                     1.7
Lower selling, administrative and general
expenses                                                            37.5                      30.9
Higher (lower) gain on sale of property, plant &
equipment and businesses                                           (11.5 )                    20.7
Legal settlement - 2010 charge, 2011 insurance
recovery                                                            86.4                     (46.4 )
Lower (higher) restructuring charges                               (13.0 )                     3.4
Higher exchange offer costs                                         (2.2 )                   (41.2 )
Lower (higher) interest expense                                    (39.0 )                     7.6
All other                                                           (2.9 )                     8.2
                                                      2011       ($153.7 )      2012       ($120.4 )

OPERATING RESULTS BY SEGMENT

We present our results of operations by segment at the gross profit level. We have four reporting segments organized around our principal product lines: 1) Aggregates, 2) Concrete, 3) Asphalt Mix and 4) Cement. Management reviews earnings for the product line segments principally at the gross profit level.

1. AGGREGATES

Our year-over-year aggregates shipments:

§ declined 1% in 2012

§ declined 3% in 2011

§ declined 2% in 2010

Several key states, including Florida and Texas, reported volume growth versus the prior year. Other markets in key states such as Virginia, North Carolina and Georgia were down modestly in 2012. Shipments in California were relatively flat versus the prior year. Less large-scale project work contributed to lower shipments in certain markets.

Our year-over-year freight-adjusted selling price for aggregates:

§ increased 2% in 2012

§ increased 1% in 2011

§ declined 2% in 2010

Nearly all of our markets realized increased pricing in 2012.

              AGGREGATES REVENUES       AGGREGATES GROSS PROFIT AND
                                        CASH GROSS PROFIT
              in millions
                                        in millions
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 AGGREGATES UNIT SHIPMENTS                  AGGREGATES SELLING PRICE AND
                                            CASH GROSS PROFIT PER TON

 Customer and internal 1 tons, in           Freight-adjusted average sales price
 millions                                   per ton 2

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 1 Represents tons shipped primarily to     2 Freight-adjusted sales price is
 our downstream operations (i.e., asphalt   calculated as total sales dollars
 mix and ready-mixed concrete)              less freight to remote distribution
                                            sites divided by total sales units

Aggregates segment gross profit increased $45.9 million from the prior year and gross profit margin as a percentage of segment revenues increased 2.7 percentage points (270 basis points). As shown on the chart on page 35, the increase in Aggregates segment gross profit resulted from lower costs and higher selling prices slightly offset by lower shipments. Most key labor productivity and energy efficiency metrics improved from the prior year, more than offsetting a 3% increase in the unit cost of diesel fuel.

Aggregates segment cash gross profit per ton increased 5% to $4.21 in 2012. This measure continues to improve from a cyclical low in the third quarter of 2011, reflecting the cumulative effect of our cost-control efforts and a disciplined approach to pricing during the downturn. These efforts are establishing unit profitability higher than in 2005, which was a peak year for volume, adding to the attractiveness of the earnings potential of our aggregates business.

2. CONCRETE

Our year-over-year ready-mixed concrete shipments:

§ increased 9% in 2012

§ declined 6% in 2011

§ declined 5% in 2010

The Concrete segment reported a loss of $38.2 million in 2012 compared to a loss of $43.4 million in 2011. Ready-mixed concrete shipments were up 9% benefitting from increased private construction activity while the average sales price was essentially flat, contributing to a $5.2 million improvement.

               CONCRETE REVENUES         CONCRETE GROSS PROFIT AND
                                         CASH GROSS PROFIT
               in millions
                                         in millions
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3. ASPHALT MIX

Our year-over-year asphalt mix shipments:

§ declined 7% in 2012

§ increased 1% in 2011

§ declined 3% in 2010

Asphalt Mix segment gross profit of $22.9 million was down $2.7 million from the prior year. The average sales price for asphalt mix increased 1% from the prior year, offsetting some of the earnings effect of the 7% decline in shipments. The decline in shipments was due in part to less large project work in California in the second half of 2012 and the divestiture of our New Mexico asphalt mix business in the fourth quarter of 2011, partially offset by a 15% increase in our asphalt mix shipments in Texas. Materials margin remained steady despite lower volumes, finishing the year 3% higher than the prior year.

4. CEMENT

The $1.7 million improvement in the Cement segment's profitability resulted from
an 18% increase in shipments and a 6% increase in pricing.



                CEMENT REVENUES           CEMENT GROSS PROFIT AND
                                          CASH GROSS PROFIT
                in millions
                                          in millions
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SELLING, ADMINISTRATIVE AND

GENERAL EXPENSES

in millions

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SAG expenses decreased $30.9 million, or 11%, from 2011. This 2012 decrease resulted from lower spending in most major overhead categories, including savings from reduced employment levels. In 2011, we substantially completed the implementation of a multi-year project to replace our legacy information technology systems with new ERP and Shared Services platforms. These platforms are helping us streamline processes enterprise-wide and standardize administrative and support functions while providing enhanced flexibility to monitor and control costs. During 2012, we consolidated our eight divisions into four regions as part of an ongoing effort to reduce overhead costs, and we initiated a Profit Enhancement

Plan that further leverages our streamlined management structure and substantially completed ERP and Shared Services platforms. These actions allowed us to achieve cost reductions and reduce overhead and administrative staff.

Our comparative total company employment levels at year end:

§ declined 9% in 2012

§ declined 7% in 2011

§ declined 4% in 2010

Severance charges included in SAG expenses were as follows: 2012 - $0.9 million, 2011 - $4.1 million and 2010 - $6.9 million. Severance and other related restructuring charges not included in SAG expenses were as follows: 2012 - $9.6 million and 2011 - $13.0 million.

GAIN ON SALE OF PROPERTY, PLANT &

EQUIPMENT AND BUSINESSES, NET

in millions

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The 2012 gain includes a $41.2 million pretax gain from the sale of reclaimed and surplus real estate, a $5.6 million pretax gain from the sale of a non-strategic aggregates production facility, a $12.3 million pretax gain from the sale of mitigation credits and a $6.0 million pretax gain on the sale of developed real estate. The 2011 gain includes a $39.7 million pretax gain associated with the sale of four aggregates facilities and a $0.6 million pretax gain associated with an exchange of assets (see Note 19 "Acquisitions and . . .