Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2008 Vulcan Materials' Earnings Conference Call. My name is Dan and I will be your coordinator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to your host for today's call, Mr. Don James, Chairman and CEO. Please proceed sir.

Good morning. Thank you for joining this conference call to discuss our fourth quarter results and our outlook for 2009. I am Don James, Chairman and Chief Executive Officer of Vulcan Materials. We appreciate your interest in Vulcan and we hope our remarks and dialog today will be helpful to you. A replay of this conference call will be available later today on our website. Joining me today is Dan Sansone, our Senior Vice President and Chief Financial Officer; and Mac Badgett and Danny Shepherd, two of our Senior Vice Presidents in Construction Materials. Before I begin, let me remind you that certain matters discussed in this conference call contain forward-looking statements, which are subject to risks and uncertainties. Descriptions to these risks and uncertainties are detailed in the company's SEC reports, including our most recent report on Form 10-K. The fourth quarter brings to a close a very challenging year. The economic uncertainty, turmoil in the financial markets and tighter credit standards weakened the construction activity further in 2008. Our employees continue to respond aggressively to weakness in demand for our products by making tough decisions regarding reducing operating hours, rationalizing our production facilities and reducing manning levels. To underscore this point, a turn of aggregates in 2008 in our legacy business generated more cash earnings than it did last year in 2007, and over 50% more cash earnings than it be at the peak of the demand cycle in 2005. This fact highlights the sound fundamentals of Vulcan's aggregates business, the capabilities of our organization and the attractiveness of the markets we serve. Fourth quarter earnings in our aggregates segment were lower compared to last year. Sharply lower volumes more than offset the earnings effect on price improvement and prudent cost control. The current downturn in demand for…

(Operator Instructions). Your first question comes from the line of Garik Shmois from Longbow Research. Please proceed.

Hi good morning. Just first off on your pricing guidance; 60%, pretty impressive for 2009 considering looking at probably for straight year volume declines. Just wondering, if you could talk about, you're obviously confident of that number but what markets are giving you particular confidence and will you be able to achieve that?

I think, overall we are seeing the opportunities for price improvement. Some markets are weaker than others, but its' not focused on any one market. I would say it is generally overall.

Okay. And just to be clear, your pricing guidance does not include the Lake Belt.

It does not include any effect from the Lake Belt.

Okay, and just a follow-up on that point; are you seeing any weakness in the pricing in any of your markets?

Well, yes. I think California has been weaker than normal. Other than that, I think there are some parts of Florida that have weakened, but overall our price increases have been good across the country.

Okay, I just lastly, you mentioned in the prepared remarks, you expect have a mid-single digit volume decline on the combined non-housing end markets. Can you just talk a little bit more about what you are seeing both on the non-res side and on the public works side?

Well non-res, the buildings part of non-res was down about 8% in 2008, and I think we expect it to be down another 7% in 2009. That includes office buildings and retail hotels. There is not a great deal of strength in that end market. Other infrastructures, construction volume was down about 11% in 2008. We see that being down about 6% in 2009. The strong point there is we I think have said publicly is in large industrial and energy projects along the Gulf Coast which have been the bright spot for us over the last year and should continue to be and are continuing to be bright spot for us in 2009. Housing was extremely weak in 2008, which should come as no surprise. It was down about 37% and I think we believe it's going to be down about 19 or 20% more in 2009, down 37% in 2008. Highways were down about 9% in 2008. We expect that to be down may be 6%. There are several things working there. Obviously, the stimulus being one of them and the California infrastructure program being another one. Hopefully, California Legislature will vote on its budget this week. Right now those projects are stalled because of the budget issues in California. But with the passage of a budget which would free up the bond money, hopefully those projects can restart. But and as I said, all of these are without regard to the effect of whatever stimulus package gets passed in Washington in the next couple of weeks.

Okay, thanks for the detail Don. Just one quick follow-up on the large energy projects that you talked about in Gulf Coast. I know they've been source of stability for you. Are you seeing them continue in '09 or are you seeing actually maybe an influx of new projects that are going to be coming up on the books?

I think it's the continuation of multiyear projects rather than starting of new project. You could say this Winston crop (ph) plant is just starting in '09 but it's really underway and has been underway in '08. So that will be... those are large multiyear projects. There is a large rail multi-model facility that's starting construction south of Chicago and that should continue for throughout 2009. Those are the two examples.

Great. Thank you very much.

Your next question comes from the line of Chris Manuel from KeyBanc Capital Markets, please proceed.

Good morning, gentlemen.

Hi Chris.

A couple of questions for you. Whenever we think about your debt that you have got sitting here today, what's the maturity schedule over the next six to twelve months that you are looking at?

We have 250 million of bonds that we will pay off in April and then we don't have a significant bond repayment until the end of 2010 and it's in the $300 million range. There are small amounts of maturities coming due along the way but nothing large other than the weak maturities.

Okay are there any specific... what are the covenants within there that are most restricted to you? Are there any balance sheet-related covenants for shareholder equities and things ...

Chris not in the bond transactions. No, in our bank lines of credit, we have a single covenant that debt-to-total capital and not to exceed 65%. Our current level is about 48%, so there is plenty of headroom there. The bond deals due have change to control provisions which are customary. But there is no other financial covenants in those bond deals as well as there is no coupon step-ups in the current outstanding bonds either.

Okay, last question I had on the finance side is related to your dividend. I think you highlighted that it was about $215 or so million users of cash this past year. In light of... well, I guess we work for banks, so it's invoked the cut dividends. But when you think about usage of cash for the next twelve months, is it more important to you to continue to work down debt or how do you think about that dividend?

Well, our Board will consider our dividend, quarterly dividend our board meeting end of this week. Certainly a factor we look at in addition to GAAP earnings or cash earnings, we had about $624 million of cash earnings in 2008 to support the $215 million dividend. So our Board will make that decision. But we continue to believe that reducing debt is important, but we also believe returning cash to shareholders when we have cash is an appropriate use of cash. So we will try to balance those priorities.

And last question I had was, in your volume outlook of down 5 to 10% for the full year, from a momentum standpoint coming out of the fourth quarter down I think 23% or so, do you think it's... you have some tougher comps in the first half versus back half or, how would you help us think about the momentum of that working through the year?

Well, as we've said I think many times before Chris, you really can't draw momentum conclusions much from the fourth quarter or the first quarter, because weather tends to be a big factor in those quarters. Clearly demand is slowing, but as you point out, we will have more favorable comps in the second half of '09 compared to the second half of '08. We do our forecast on both a macro basis and a bottom-up basis and they both come in within this range. So we believe that while demand will continue to be weak in '09 that volumes should come in within that range, again ex the impact of an economic stimulus package and without taking into account whether the Lake Belt ruling will increase or decrease our volumes in Florida.

Okay. Thank you very much gentlemen.

Your next question comes from the line of Jack Kasprzak from BB&T Capital Markets. Please proceed. Jack Kasprzak - BB&T Capital Markets: Thanks. Good morning, Don.

Good morning, Jack. Jack Kasprzak - BB&T Capital Markets: I wanted to ask first, what sort of tax rate assumptions should we be using for 2009?

Our tax rate we think will be about 27%. Jack Kasprzak - BB&T Capital Markets: And I was going to ask about volumes as well. I guess a follow-up to the last question, ask a little differently. The guidance is down 5 to 10%, but it looks to me like there's no reason to think the first half of '09 would be any better than the second half of '08 when the volumes are down a little more than 20% on a same-on-same basis. Looking at things like housing permits are down as much as 50% right now, when you look at the seasonally adjusted rate. And if that's the case, the first half of '09 is down again 20% just to get to a down 10 for the year, you have to be about flat in the back half. I mean am I... the macro picture, am I missing something or how would that square with the way you guys see the world?

Well I am not sure I followed your math there. But housing is a dramatically smaller portion of our business going into '09 than it was going into '08 and going into '07. So a large decline in housing has less impact on us now that it has been. Public infrastructure is a larger piece of our business going into '09 than it was going into '08 or '07. And that piece is holding up; holding up as better than most end markets. Certainly, and as I said, we did not include any impact of the potential stimulus package but that package will certainly increase the percentage of our shipments that go into publicly-funded infrastructure projects, which is the strongest demand segment, even without the infrastructure package as we move into 2009. Jack Kasprzak - BB&T Capital Markets: Okay that's helpful thank you. With regard to your pricing, your guidance above 6 to 8%. Would that be on a same product basis or would there be some mix effect, some mix shift that might be favorable in 2009?

Well that's the total weighted, total average of our pricing over all products. So the mix shift, any mix shift both in terms of products and geographies is included in that guidance. I would say that we would expect to see greater shipments into public infrastructure projects and lower shipments into housing. There is always some geographic shift and product mix shift that goes on from year-to-year. But the 6 to 8% includes all of that. But I don't think there is any material change that would move that significantly one way or the other in geographic mix or product mix. Jack Kasprzak - BB&T Capital Markets: Okay, great. Thanks for the clarification.

Your next question comes from line of Kathryn Thompson, of Avondale Partners. Please proceed.

Hi, thank you.

Hey Kathryn.

Just a question regarding pricing. I know you gave your full year guidance, but in looking how pricing has trended on to $20 basis it's tended down pretty much of the last four quarters and then looking into '09, assume that there you see a similar trend going to Q1. It would imply fairly significant upside into the back half of the year in pricing. Are we thinking about that correctly or is there another way that you would guide us to think for '09?

I'm not sure I understand the predicate of your question, pricing has continued to increase.

Don, I was just saying on a dollars basis, so on an unit basis

Yes. Pricing in dollars is higher in '08 than it was in '07 by 7%.

Sure.

Now the momentum --

That's what I'm taking about

Has been reduced. But we think ...we think that as we look at '09, the opportunities for pricing will not be the same in every market for every product. But overall, as we roll it up we think the write-up price increase in '09 should be comfortable to that we achieved in '08.

What I'm asking is do you expect the momentum improve in the back half of the year as opposed to having equal momentum throughout the year. That's really what I was asking?

I don't have that much insight. I think it can vary from quarter-to-quarter. But we don't really look at it on that basis.

Okay. What is --

Full year pricing is a much more reliable indicator to us than trying to talk about it quarter by quarter.

Sure. Absolutely, and really we're just looking for trends. I know that you'd announced a price increase and just wondering any color about how these are sticking?

Are you talking about aggregates or --?

Aggregates.

We believe that we will get price increases again, they don't come at different times in different markets for different products and different end users. We have not had pricing... downward pricing pressure except with respect to Southwest Florida. That's been the one place where there's been some significant pricing pressure. In California with all the new work that's been rolling out, there's certainly been an eagerness on our part and everybody's part to build backlogs, which we've done. But we expect if that infrastructure program in California moves forward that the trends in California probably will resume.

Okay. I guess, just to clarify have you had any price increases announced for aggregates, specifically?

Yes.

Yes. Okay, that's I...

I'm sorry I didn't understand that. Yes, absolutely.

Alright. Sorry about the confusion there. Regarding volumes, could you just give a little bit of color about trends at the end of the quarter and your perspective on assuming a stimulus package would be passed by the 1st of March, your perspective on the flow of dollars into '09 and to 2010?

If the first part of your question is asking what we are seeing about volume so far in '09, we don't disclose that until the end of the quarter and we're not a retail store that discloses weekly or monthly sales, I'm not trying to be difficult as just never been our practice, because there's so much seasonality from in our business particularly in the fourth and first quarters it's more misleading than it is helpful depending on how weather has been. With respect to second part of your question, Kathryn was, could you repeat that?

Really, once again, most of my questions are based on trends and what's your outlook for the economic stimulus package?

Okay sure. So much of... the reason, I think it's reasonably clear when you study the Senate Bill that will be voted on shortly and in a matter of hours now. In the house built, you can come up with plus or minus about $60 billion of projects that will used aggregate asphalt and concrete. We have... as I gave you in my remarks, we have metrics that have been developed over a time over how much aggregate content per billion dollars of spending and how much asphalt content and how much concrete content. What we will need to do to give more specific guidance on that is to look at what the projects are, where they are and what the timing is. It is harder for us to say how much of this is going to occur in the second half of '09 versus '10 than it is to say there is going to be X million tons of aggregate asphalt and yards of concrete. So right now assuming the bills pass and are signed by the President and something that is close to the Senate version or the House version, 60 billion of projects that use our material is a fair number. The harder thing is when that spending occurs spread over second half of '09, '10 and perhaps into '11. We'll continue to work on that once we are able to get the list of projects and the timing of those projects. But that's one reason why forecasting in the near term of the impact of that on our business is very difficult at this point.

Of course I understand difficulty. As you know we've been doing a lot of work on it, and it's liking us to say catching jell, it's very difficult. But really just little color on once again trends and flow and not specifics, because we're definitely not trying to manage quarter-to-quarter, just...

Right, right. Well, just clearly I think I will... one trend we will see is that public infrastructure spending as a percentage of our total or public infrastructure demand as a percentage of total demand is going to continue to increase, which is a good thing for us. Housing will continue to decrease and the private buildings piece will probably also continue to decrease and large privately-funded infrastructure projects hopefully will have some stability for us in 2009, and hopefully, going on into 2010.

Okay. My final question really relates more to aggregate margins specifically. And the fairly wide swing in the quarter just reported and just to get a sense and how we model for the out year and it seems difficult to guess specific EPS guidance given current market. But at least conceptually, is it fair to think that roughly flat margins on the aggregate gross margins, is appropriate for fiscal '09 or any other qualitative color related to that would be very helpful? Thank you.

As I indicated in our remarks, our cash margin per ton has continued to improve. The issue for us is the allocation of DD&A over a smaller number of tons, our DD&A for 2008 was $389.1 million. We project it will be about $402,5 million in 2009. If our volumes are in fact down 5 to 10% and we have to spread that slightly higher DD&A over larger tonnage, it will impact our GAAP margins. But our cash margins we think still have some opportunity to improve. Hopefully, you'll see improvement in cash margins but you may see the impact of DD&A on smaller production levels having a negative impact on the GAAP margins. If that helps any.

Yes, it does. We want to be completely secured and one has to... it gives us some sense of direction. That's all I have for right now. Thank you very much.

Thank you, Kathryn.

Your next question comes from the line of Timna Tanners from UBS. Please proceed.

Hi, good morning Don, Dan.

Hello Timna.

Just got a few hopefully quick ones, let's on the price side, and I have to follow-up on that. But in the past you have talked a little about January price increases and then sometimes you may deal price increases. Can you give any sense from the 68% how much of that is already known to you from January price increases and how much might be... remain to be seen later in the year?

I don't have that king of data. I mean we have some price increases that are in effect in January. We'll have some more that will along in the spring, perhaps some more in the summer. But that somebody always ask me that question and we've never been clever enough to figure out how to answer it.

Okay, you wouldn't give a second average of the January price increases are any sense there.

No because it's all over the board.

Got you, okay. And then on you did give a great detail but we use to have forecast for EPS and I am wondering if you could tell us why you might have excluded that for the upcoming quarter and for the full year.

Well, there are couple of reasons one is trying to predict the timing of the effect of the stimulus package is very difficult for us. The other is the economy absent to stimulus package is very difficult for us to predict and we decided that it would be better for us to give you price, volume and elements of cost to let you do your own work than for us to try to predict EPS certainly for a quarter but even for the full year. As the year progresses, if the stimulus plan passes and if we get to a point where we have some level of confidence that is not or lack of confidence that is not reflected in the analyst estimates, we will consider guidance. But at this point, as you know we were wrong throughout much of 2008. And we need to get to a point where there is some predictability and stability in the economy and demand in order to have confidence in giving you EPS guidance.

That's fair. And I don't mean to be picky about this but could you give us a level of confidence in your volume and price forecast. As well can... that is sort of the same argument, you just said that at this point in time that to your best estimates of the things the influx?

Yes, I think that's a fair statement.

Okay, great. And final question from us, on the goodwill side that declined about $600 million quarter-to-quarter. Do we miss something there that you explained?

What that was Kim is a reclassification of dollars from goodwill end of last year into other intangibles. At year end last year, we were... we had just close the Florida Rock transaction and had very limited time to fully evaluate the whole array of intangibles that were acquired with that business. And as you know, the accounting rules require you to, in a very detailed fashion try to identify all intangibles by items. And so what you're seeing is a shift of dollars out of goodwill which was kind of a holding account, if you will at last year end into an array of other intangibles. For the most part those other intangibles have to do with the value... the estimated value of the zoning and permitting that's in place at the aggregate production facilities. And that most of that shift from goodwill into other intangible will be become amortizable through the P&L over time, where as the amount that we made in goodwill will not.

Okay. And then along those lines do you have any comments that you can regarding the potential or the reasons why or why not you'd have to consider any write-down related to Florida Rock.

At this point in time we've completed our year-end goodwill impairment testing and have not taken an impairment charge. So it's judgment of management that these assets are not impaired. But under the accounting rules that test occurs annually, right at the minimum. So we'll continue to look at it and so right now we've satisfied ourselves that we do not believe there has been an impairment.

Okay great, thank very much.

Your next question comes from line of Trey Grooms from Stevens Incorporated. Please proceed.

Good morning.

Hey Trey.

Hey. Just a couple of quick questions. Don one is related to competition; with pull back in diesel that we have seen since summer time, do you have any markets where you are seeing an increase in competition as we have got lower diesel prices and folks are eager to go further to find volume?

Well that's certainly a possibility and that is some thing we will have to look at. That works both ways. Our shipping radius certainly improves some as do our competitors. So that's just one of the things that our guys have to take into account, every day, every week when they are bidding jobs and quoting prices.

And I didn't know, when you are looking at your markets, you have got several way you have got great market share and I didn't know if there was just some in particular that you could point to and say yeah, these are the ones that we are worried about where there are some guys on the edges that are I guess kind of neck-neck to edges if you will and as diesel comes down, you can see this increase?

Not. I don't think there is any particular markets where that's a bigger factor than in others. That's been part of this industry and part of this business for ever is the delivered cost of material and that's just the factor that we take into account in our whole pricing and competitive structure. We have competition in every market and it will then flow for a lot of reasons, including the price of diesel fuel.

Okay, that's helpful. And I know that this next question it gets more difficult as time goes on as you've indicated before, but could you give us an idea what legacy volume was in aggregates in the quarter as far as, how much it was down?

Yeah, I do have that. Legacy volume was down in the fourth quarter about 26%.

Okay, that's helpful. And then you laid out some detail on kind of what's going on with GAAP margins and it sounds like its mostly a function of the volume there with the DD&A. Can you also give us an idea just where... kind of how the fixed versus variable structure kind of shakes out right now?

Go ahead Dan.

Of the cost of producing a ton of aggregates today, approximately 30 to 35% of that would be considered a fixed cost with a half to two-thirds of that fixed cost probably skewed more towards the two-thirds at the moment being depreciation, depletion and amortization. The rest being cash fixed costs associated with supervision and basic services at the manufacturing facilities.

Okay, that's helpful. And then Don, you gave us some metrics related to demand versus, I guess that would be generated from different amount spent and that was very helpful. But like for example the number that you gave for highway for every billion dollars spent, it was 14 million tons, is that a current prices for aggregates?

Yes.

Okay and I guess my last question would be on the asphalt side?

That number can move. I mean that's a number that's based on a lot of highway projects over a lot of years adjusted for throughout the year end '08 aggregate price.

Okay.

Did that answer your question?

Yes absolutely.

How much of that we ultimately get at Vulcan depends on where it is. Whether we gets the work whether we don't, but we'll have a lot better calibration of that if we move down the timeline of when those projects get approved by Congress and when they're put out to bid by the contracting agencies.

Sure. One other question on CapEx, you'd kind of reiterated the $200 million for 2009. How close are we getting at that $200 million level. How close are we getting to kind of have bear bounds kind of maintenance CapEx for you guys?

Well our five-year average replacement CapEx has been about $160 million about year and that's on legacy Vulcan. Of course we now have the Florida Rock assets as well. But, I think $200 million a year is ample for replacement CapEx. Obviously, other things that will come along to be profit improvement projects or volume improvement projects would not be necessarily included in that number. But, we think we're fine given our current state of our plant and equipment, to be able to maintain that effectively at 200 million a year.

Okay. And then I've just have two other quick questions. One is on price of aggregates. You've mentioned, you expect greater shipment in the infrastructure projects and less in the housing in 2009. Is there a much of a price difference as far on aggregates that going into those different end markets?

I don't believe we would change our pricing guidance based on whether the stimulus bill passes or does not pass. It really, there is a volume impact but we don't believe there will be a price impact coming from the stimulus package.

Okay. But, so if, I guess if you are looking at it, with the demand being higher for infrastructure projects ex-stimulus, would just in general terms is infrastructure... aggregates that go into the infrastructure projects typically higher or lower or about the same price as something going into some top of the building or some top of residential construction?

Pricing would generally be higher, because specifications are tighter. And often times we have a better competitive advantage on tight specification projects like federal highways and airports. Housing on the other end just typically would not have as high a specification. So there is a pricing benefit to public infrastructure, but it also cost us more to produce some of that high specification material. So there is not a dramatic margin differential between different end markets although pricing can be higher, it can push our cost.

Okay. And then my last question is just to make sure I understand, I understood one of your comments earlier on the 6 to 8% you'd mentioned that you have price increases out now. But did I hear you correctly that you have price increases now and also expect to have like a mid-year price increase as well?

I know people can't get their head around this one, but we price material every day, every week and we don't put out a general overall U.S. price increase to all customers for all products on January 1, and another one on July 1. That's just not the way we price products. So, the answer to your question is, we are getting price increases every week somewhere. We generally put out some price increases at the beginning of the year and some at the beginning of the construction season in some markets and some in mid year. But you shouldn't try to force fit our pricing strategy into... we put out a 8% price increase on January 1 and we are able to get 4% of that, that's just not the way this business works.

Okay understood. Thanks guys.

Your next question comes from the line of John Fox from Fenimore Asset. Please proceed.

Hi good mornings everyone.

Hi John.

Believe it or not, I have a couple of questions left.

Good.

Could we get the actual dollar amount for liquid asphalt fourth quarter of '08, and fourth quarter of '07, please?

Yes, I will get that for you in just a SEC.

Okay, and the second, while you are working on that I guess maybe for Dan. Do you anticipate and if so how much your contribution for your pension plan in 2009?

There will no mandatory contribution for the pension plan in 2009.

Okay. Dan what's the nature of medium-term investments on the balance sheet?

Those were some investments that we had back... had made back in 2008 in the reserve money market funds. And when they broke the buck, they slowed down their pace of redemption and that's what that money is. We have... we are continuing to receive distribution and but because it's unpredictable as to when we'll get the money, we have reclassified that out of cash and cash equivalents.

Okay. Do you believe that you will get it all?

Okay great.

Don... and by the way John, we received some $23 million or $24 million of distribution since the end of the year. So we are beginning to see that fund loosen up.

Okay. Alright great.

John we buy liquid asphalt in four different states. So I won't give you the average price for'07 and '08.

That would be fine.

And you recognize we probably didn't buy single ton of liquid asphalt at this price anywhere, but this is the rollup of a lot of different transactions in lot of different locations. Our average price for liquid in 2007 was $321 and in 2008 it was $541. That price differential impacted our material margins in asphalt, which is the margin we make above the material cost. As I've said in my remarks, we have now been able to get our pricing for asphalt mix up to reflect that higher cost of liquid asphalt and our material margins are improving. We expect that to continue into 2009.

Okay. So, was that the fourth quarter price or the average for those two years?

Averaged for the year. You want fourth quarter?

If you have it.

In the fourth quarter 2007, it was $342 a ton and for '08 it was $574 a ton.

Okay. Thank you very much.

Your next question comes from the line of Todd Vencil from Davenport & Company. Please proceed. Todd Vencil - Davenport & Co.: Thanks guys. Most of my questions have been answered, but just to kind of hit on a couple of things to clarify and make sure I'm not jumping to conclusions. When you refer to price weakness in Southwest Florida and in California, is that to say that prices have... your prices have actually fallen in those markets?

More than Southwest Florida, I think California it's on a product-by-product basis, we're still getting some price increases. Our mix has shifted somewhat in California and that's changed the overall pricing. But California is okay and will be okay and Florida is going to be interesting with respect to the New Year's Lake Belt ruling what happens later? Todd Vencil - Davenport & Co.: Well, Don I appreciate that. Could you just saying right into my next question which is, has anybody announced a price increase related to that recent ruling down in Lake belt?

Not that I am aware of. I think everybody in the Lake Belt has shut down. Nobody is operating, there are a few packets. Some of the quarries that are not covered by the Lake Belt permit including a little bit in our Miami quarry. I think most producers have stockpiled raw materials, which they have mined already in the month pile that can be processed and there is probably a fair amount of inventory. I think everybody in that area is probably having to look at their hand to see what happens demand for cement, feedstock by the two large cement producers in the Lake Belt, will be an issue. But as it sits today, I don't think we know we have any price announcement that we are aware of by any of the producers yet. But it's only been as said about two weeks and it's in a period of low demand about from the economy as well as the time of the year. So I think that will play out over the next few months. Todd Vencil - Davenport & Co.: Okay and do you... any I realize that it's a relatively small issue for you guys. But any thoughts on how long as whatever stockpile you guys have done there will ask to you sell.

Well we have got... we have several months of inventory on the ground. As you may know we did not run that quarry for a good portion of 2008, because of the prior ruling and then once that was reversed, we could resume production which we did. We also have the distribution and transportation and production capacity to continue to move material into Florida from Mexico, from Alabama and from Georgia as need be by ship and by rail. So I think there will be a lot of adjusting by the producers in Florida depending on Vulcan outcome of this. The Corps of Engineers permitting process which is ongoing, I think will also have a significant impact on the future of supply in Florida and that of course is not yet known where The Corp is going to come out on all this. Todd Vencil - Davenport & Co.: Got it. On the liquid asphalt you mentioned that you got all the contracts rolling off and new is coming on. Given that liquid prices have come down, are you now seeing the prices on your sort of newest quoted contracts for asphalt mix also coming under pressure, are they're coming down a little bit sort of follow on liquid price down?

Well as we've said in 2008, our pricing for asphalt mix or the fourth quarter certainly was up. I think that's every project bid and it's hard to say at this point whether what the relationship between liquid asphalt price and asphalt mix price will be. There's a lot of different dynamics in terms of location and jobs and there is certainly not a direct correlation. Typically we do worse on margins in periods of rising liquid asphalt cost and better on margins in period of declining liquid asphalt cost.

The way I would think about it is you have as the cost of liquid asphalt stabilizes, many of the market are just returning to what I would describe as historical levels of margins, not distorted by the pace of the change in that input costs? Todd Vencil - Davenport & Co.: Got it. And final question, one for Dan. On debt-to-cash covenant; two questions. Is that a net debt covenant or a total debt and how is the goodwill treated under that?

Total debt to cap, and goodwill is in the well I mean, yeah I mean its debt in capital, I mean it's debt and equity, so it's in there. Todd Vencil - Davenport & Co.: So, if you had... so I understand that you guys have already tested for this year. But if you did take a write-down that would affect your debt-to-cap ratio.

Yes, yes it would. Todd Vencil - Davenport & Co.: Okay. Alright. Thanks a lot.

Your next question comes from the line of Aynsley Lammin from Citigroup. Please proceed.

Hi, good morning. Just another one, fortunately. But in aggregate, if you could just give us a feel for how much inflation is already in the system and I presume that the year end aggregates price was higher than the average for 2008. And then just secondly on the non-res I think, I heard you right. Kind of expected non-res work for demand in the areas to be down around 7% in 2009, that's been quite surprising given how much restrained the kind of lead indicators and other companies just talk about. How quickly non-res has pulled away. If you could just give us some kind of background for that, expectations will be great?

With respect to... if I understood your first question has to do with how much of our projected 6 to 8% price increases already in place. Let me say for about the fourth time, I don't know. That's not the way we price our products. So I can't answer that question as I ask. And it's not... it's just because we don't do, we don't have metrics on pricing that's once a year or twice a year or three times a year. With respect to the projection for non-residential buildings, we saw some decline in that in 2008. We see some more decline in 2009, but these are our markets, the counties that we serve not the total U.S. so there may be some differential there. And with in non-residential building there are probably some overlap between what I'll call private infrastructure. And the non-residential buildings category includes public building as well. So if you've driven through a college campus lately you know there is a tremendous amount of construction generally going on there and than they are state and local facilities as well as federal facilities including the big barrack programs, base realignment and closure programs which are very significant in many of our markets where the military are building new facilities, as they close bases and move things to other bases. So all of that rolled up together is in the non-res building category which is both public and private that may be the place that you are seeing disconnected, if you are not putting the public piece in that category.

Okay, just on the price, I was trying to ask the question of how much do already been kind of price. Just if you have a feel for, how much rolling over was from 2008, or was that probably you are going to --

Well, some of it clearly is rolling over, meaning is already in place. I can't quantify what that is

Okay, thank you very much.

Your next question comes from the line of Brent Thielman from D.A. Davidson. Please proceed.

Good morning. Thanks for taking my questions

Good morning

Just on the pricing guidance. Obviously, thanks every much for the forecast there in terms of aggregate and asphalt. And it looks like Q4 price for concrete looks a little bit better. Do you have any sense or can you give any direction where you see pricing go into that business or for that product going forward?

Well, concrete... there has been a large reduction in concrete volume throughout the U.S, first from housing now from at least a privately-funded portion non residential buildings. We expect concrete pricing to be relatively stable in '09. Not any significant opportunity for increases or any pressure for erosion volumes are down there. And until housing begins to recover that's concrete volumes are likely to stay relatively flat.

Okay great. Thank you. And then I guess just a broader question in terms of I mean were there any particular states I guess that surprised you had a positive or negative in terms of recorded volumes in the quarter?

Well the strongest markets we have had for 2008 as a whole and to try to do it on quarterly basis would be distorted, but the entire Gulf Coast has been our strongest market, from Texas to Louisiana, Mississippi and Alabama. That's where those have been our best markets. And that surprises a lot of people but that's the reality of where our demand has been strongest.

Okay great. Thanks guys.

Your next question comes from the line of Mike Betts from JPMorgan. Please proceed.

Yes. Good morning.

Hey Mike.

Hi Mike.

Hi. I had three questions if I could. You will be relieved none of them to do with pricing. The first one is Don, can I just ask you in terms of cost; you have obviously talked about asphalt and diesel. Are there any other pressure on the this year, I mean people across I mean they like it to be fairly flat or general inflation of 2 or 3%. Could you give me some kind of guidance on what sort of cost increases you like to see on the other stuff?

You know, we'll see some price I mean wage increases for our hourly workforce. We expect to more than make it up with productivity and efficiency. Steel components were a factor in 2007-2008, not so much a factor are in 2009. So, when our... so, I think the things that will move the needle in 2009 will be diesel fuel and liquid asphalt and electricity may have an impact although at lower production levels we hope income manage our demand charges efficiently to try to limit the rate of increase in electricity cost.

Okay.

So those will be the major categories.

My second question to you Don, in the statement and you mentioned when you spoke, you were talking about the legacy businesses' shipments '05 to '08 were down about 30% that was legacy. Do you have any idea how much Florida Rock's volumes have declined during that period?

I have for the period we've owned Florida Rock which would be basically full year '08 shipments and aggregates were down about 34%

Okay, thank for that.

And the vast majority of that would be in Florida. Our other quarries in Georgia, Virginia and Maryland and Alabama that came with part of the Florida Rock acquisition, track of largely our performance in those markets from our legacy operations.

Okay. Thank you for that. My final question is probably for you Dan. How much of your debt is now floating rate based on LIBOR and I'm not going to follow-up question once I get that answer from you.

I've got that here, just let me look at up Mike. We come out of this way about at this point in time, just under $1 billion of our debt would be floating rate and the remainder of it is going to be fixed rate. We have a total about $3.6 billion. Yes, it's around 60:40 at the moment. 60 fixed, 40 floating.

Right. I guess what I was coming to Dan is I'm a bit... I mean obviously you've got the debt that you've just fixed, which adds probably $30 million to the interest charge. But I would have thought on the floating there was quite a big benefit from the decline in LIBOR, U.S. LIBOR or LIBOR rates. Am I missing something that you have any hedges or anything else, or I might just wrong on that? Is it more a comparison in terms of yester rates declined for LIBOR in the last three months, but it's probably a function of what it did before that?

Well, you're right. LIBOR rates have declined considerably and the recent transaction we did obviously moved $400 million out of floating rate short-term debt into fixed rate and long-term debt. That transaction was done principally to ensure adequate liquidity to meet the refunding, the repayment obligation as we have in 2009 without putting too much strain on our bank lines to give us adequate operating flexibility.

Okay. But there's no... on you're LIBOR floating debt, it just moves with LIBOR. There's no kind of a hedging that you've done at all on that?

That's correct. Our LIBOR-based bank borrowing is just that, it's LIBOR plus a spread.

Right. That's great. Thank you very much.

This concludes our question-and-answer session for today's call. I would now like to turn the call back over to Mr. Don James for closing remarks.

Well thank you for being with us today. We appreciate your interest and your questions. I think, at this point I would urge you to not only pay attention to what's happening in the overall economy but also focus on what will happen in Washington with the stimulus plan and ultimately, pay attention to what happens with the Lake Belt ruling in Florida. Those are probably the things that will have the greatest impact on Vulcan's 2009. Although until we have better visibility in those factors, predicting what that impact will be or quantifying what that impact would be in quantifying the timing of that impact, remains a challenge for us. But those are all significant events for us. We look forward to talking with you again after the first quarter to be and hopefully will be able to give you some more information on each of those items at that point. Thank you so much. Have a good day.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect good day.