VULCAN MATERIALS CO, 10-Q, 1996-08-13

VULCAN MATERIALS CO
10-Q, 1996-08-13
MINING & QUARRYING OF NONMETALLIC MINERALS (NO FUELS)

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

(Mark One)

X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1996

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-4033

VULCAN MATERIALS COMPANY

(Exact name of registrant as specified in its charter)

New Jersey 63-0366371
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

One Metroplex Drive, Birmingham, Alabama 35209
(Address of principal executive offices) (Zip Code)

Registrant's telephone number including area code (205) 877-3000

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:

Shares outstanding
Class at July 31, 1996
Common Stock, $1 Par Value 34,739,447

VULCAN MATERIALS COMPANY

FORM 10-Q
QUARTER ENDED JUNE 30, 1996

Contents

Page No.
PART I FINANCIAL INFORMATION

Item 1. Financial Statements
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Earnings 2
Condensed Consolidated Statements of Cash Flows 3
Notes to Condensed Consolidated Financial Statements 4
Exhibit 11 - Computation of Earnings Per Share 5
Exhibit 12 - Computation of Ratio of Earnings
to Fixed Charges 6

Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 7

PART II OTHER INFORMATION

Item 1. Legal Proceedings 15
Item 6. Exhibits and Reports on Form 8-K 16

SIGNATURES 17

<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS*

(Amounts in thousands)

June 30, December 31, June 30,
Assets 1996 1995 1995
<S> <C> <C> <C>
Current assets
Cash and cash equivalents............................... $ 106 $ 21,869 $ 2
Accounts and notes receivable, less allowance for
doubtful accounts: June 30, 1996, $8,637; Dec. 31,
1995, $8,176; June 30, 1995, $8,381................... 233,175 181,060 219,711
Inventories:
Finished products..................................... 89,265 90,009 91,153
Raw materials......................................... 14,112 10,062 11,283
Products in process................................... 610 979 1,129
Operating supplies and other.......................... 29,396 25,751 26,821
Total inventories................................ 133,383 126,801 130,386
Deferred income taxes................................... 27,421 26,555 26,968
Prepaid expenses........................................ 11,131 5,836 16,691
Total current assets............................. 405,216 362,121 393,758
Investments and long-term receivables..................... 59,139 56,272 61,397
Property, plant and equipment, at cost less accumulated
depreciation, depletion and amortization: June 30,
1996, $1,204,203; Dec. 31, 1995, $1,161,404; June 30,
1995, $1,142,025........................................ 742,660 698,033 710,862
Deferred charges and other assets......................... 101,702 99,368 89,667
Total............................................ $1,308,717 $1,215,794 $1,255,684

Liabilities and Shareholders' Equity

Current liabilities
Current maturities of long-term obligations............. $ 6,791 $ 7,070 $ 5,720
Notes payable........................................... 36,064 3,569 71,048
Trade payables and accruals............................. 100,226 98,253 99,752
Other current liabilities............................... 107,233 68,517 78,798
Total current liabilities........................ 250,314 177,409 255,318
Long-term obligations..................................... 85,199 90,278 91,927
Deferred income taxes..................................... 87,155 85,935 82,570
Other noncurrent liabilities.............................. 66,035 65,534 61,540
Shareholders' equity...................................... 820,014 796,638 764,329
Total............................................ $1,308,717 $1,215,794 $1,255,684
<FN>
* Balance sheets as of June 30 are unaudited.

The accompanying Notes to Condensed Consolidated Financial
Statements are an integral part of these statements.
</TABLE>

<TABLE>
<CAPTION>
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts and shares in thousands, except per share data)

Three Months Ended Six Months Ended
June 30* June 30*
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales.................................... $419,222 $382,819 $727,763 $677,207
Cost of goods sold............................ 289,906 269,632 528,313 505,234
Gross profit on sales......................... 129,316 113,187 199,450 171,973
Selling, administrative and general expenses.. 42,914 38,788 81,833 76,182
Other operating costs......................... 993 998 1,822 2,241
Other income, net............................. 8,176 3,485 11,416 10,338
Earnings before interest
expense and income taxes.................... 93,585 76,886 127,211 103,888
Interest expense.............................. 2,289 3,075 4,460 5,596
Earnings before income taxes.................. 91,296 73,811 122,751 98,292
Provision for income taxes.................... 32,744 26,080 44,068 34,599
Net earnings ................................ $ 58,552 $ 47,731 $ 78,683 $ 63,693

Primary and fully diluted earnings per
share of common stock....................... $1.65 $1.32 $2.22 $1.76

Average common and common equivalent
shares outstanding**........................ 35,301 36,188 35,370 36,143

Cash dividends per share of common stock...... $0.420 0.365 $ 0.840 $ 0.730

Depreciation, depletion and amortization
deducted above.............................. $27,472 $27,270 $53,637 $54,118

Effective tax rate............................ 35.9% 35.3% 35.9% 35.2%

<FN>
* Unaudited

** Primary and fully diluted earnings per share of common stock is
computed by dividing the net earnings by the weighted average number
of common shares and common share equivalents outstanding during the
period. Common share equivalents primarily represent the number of
shares contingently issuable under long-range performance share
plans. Refer to Exhibit 11 for computation.

The accompanying Notes to Condensed Consolidated Financial
Statements are an integral part of these statements.

</TABLE>

<TABLE>
<CAPTION>
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)

Six Months Ended
June 30*
1996 1995
<S> <C> <C>
Operations
Net earnings ............................................... $ 78,683 $ 63,693
Adjustments to reconcile net earnings to net cash
provided by continuing operations:
Depreciation, depletion and amortization................ 53,637 54,118
Increase in assets before effects of
business acquisitions................................. (55,910) (61,030)
Increase in liabilities before effects of
business acquisitions................................. 27,237 16,048
Other, net.............................................. 13,674 (4,173)
Net cash provided by continuing operations........... 117,321 68,656
Net cash used for discontinued operations................... (746) (605)
Net cash provided by operations...................... 116,575 68,051

Investing Activities
Purchases of property, plant and equipment.................. (73,997) (63,048)
Payment for business acquisitions (net of acquired cash).... (54,359) (12,177)
Proceeds from sale of property, plant and equipment......... 6,888 8,107
Investment in nonconsolidated companies..................... (1,178) (1,016)
Withdrawal of earnings from nonconsolidated companies....... -- 250
Net cash used for investing activities............... (122,646) (67,884)

Financing Activities
Net borrowings - commercial paper and bank lines of credit.. 32,495 28,270
Payment of short-term debt.................................. (5,479) (4,399)
Payment of long-term debt................................... -- (22)
Purchases of common stock................................... (13,377) (5,554)
Dividends paid.............................................. (29,331) (26,177)
Net cash used for financing activities............... (15,692) (7,882)

Net decrease in cash and cash equivalents................... (21,763) (7,715)
Cash and cash equivalents at beginning of year.............. 21,869 7,717
Cash and cash equivalents at end of period.................. $ 106 $ 2

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized).................. $ 4,430 $ 5,398
Income taxes.......................................... 25,827 17,717

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Liabilities assumed in business acquisition............. $ 149 $ 1,382
Fair value of stock issued in business acquisition...... 1,316 --
<FN>
*Unaudited

The accompanying Notes to Condensed Consolidated Financial
Statements are an integral part of these statements.
</TABLE>

VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying condensed financial statements have been prepared in
compliance with Form 10-Q instructions and thus do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, the statements reflect all adjustments, including those of a
normal recurring nature, necessary to present fairly the results of the
reported interim periods. The statements should be read in conjunction
with the summary of accounting policies and notes to financial statements
included in the Company's latest annual report on Form 10-K. The
reporting of segment data required by Statement of Financial Accounting
Standards No. 14, Financial Reporting for Segments of a Business
Enterprise, is confined to complete financial statements as provided in
the Company's Form 10-K and annual report to shareholders.

2. Effective Tax Rate

In accordance with generally accepted accounting principles, it is the
Company's practice at the end of each interim reporting period to make a
best estimate of the effective tax rate expected to be applicable for the
full fiscal year. The rate so determined is used in providing for income
taxes on a current year-to-date basis.

<TABLE>
<CAPTION>
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
(Amounts and shares in thousands, except per share data)

Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Primary and fully diluted earnings:

Average common shares outstanding........ 34,853 35,870 34,895 35,870

Common share equivalents................. 448 318 475 273

Total shares..................... 35,301 36,188 35,370 36,143

Net earnings............................... $58,552 $47,731 $78,683 $63,693

Primary and fully diluted earnings per
share of common stock:................. $ 1.65 $ 1.32 $ 2.22 $ 1.76

</TABLE>

<TABLE>
<CAPTION>
EXHIBIT 12
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Amounts in thousands)

For the Years Ended December 31
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Fixed charges:
Interest expense before
capitalization credits ......... $ 11,396 $ 10,699 $ 10,187 $ 10,441 $11,336
Amortization of financing costs .......... 109 114 115 116 75
One-third of rental expense .......... 9,532 10,393 7,375 7,190 4,815
Total fixed charges ......... $ 21,037 $ 21,206 $ 17,677 $ 17,747 $16,226

Net earnings ......... $166,240 $ 97,976 $ 88,229 $ 90,980 $52,580
Provision for income taxes .......... 92,181 47,930 36,993 39,746 20,867
Fixed charges .......... 21,037 21,206 17,677 17,747 16,226
Capitalized interest credits .......... (297) (878) (1,016) (673) (131)
Amortization of capitalized interest .......... 1,031 997 882 792 840
Earnings before income taxes
as adjusted ......... $280,192 $167,231 $142,765 $148,592 $90,382

Ratio of earnings to fixed charges .......... 13.3 7.9 8.1 8.4 5.6

For the Six Months
Ended June 30, 1996
Fixed charges:
Interest expense before
capitalization credits ......... $ 4,738
Amortization of financing costs .......... 53
One-third of rental expense .......... 4,958
Total fixed charges ......... $ 9,749

Net earnings ......... $ 78,683
Provision for income taxes .......... 44,068
Fixed charges .......... 9,749
Capitalized interest credits .......... (278)
Amortization of capitalized interest .......... 318
Earnings before income taxes
as adjusted ......... $132,540

Ratio of earnings to fixed charges .......... 13.6

<FN>

NOTE: Since 1987, the Company has guaranteed a portion of certain debts
of two of the entities through which it participates in the Crescent
Market Project. In addition, since February 1994, the Company has
guaranteed a portion of certain debt of a third entity. The fixed
charges associated with such guaranties (under which the Company has
not been required to make any payments) for the six months ended
June 30, 1996, were $960,000 and for the one-year periods ended
December 31, 1995, 1994, 1993, 1992, and 1991 were $2,588,000,
$2,666,000, $2,731,000, $3,583,000, and $3,525,000 respectively.
Because the Company's ownership interests in the Crescent Market
Project are accounted for by the equity method, these amounts have not
been included in the computation of the ratios of earnings to fixed
charges presented above.

</TABLE>

Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition

GENERAL COMMENTS

Seasonality of the Company's Business

Results of any individual quarter are not necessarily indicative of results to
be expected for the year due principally 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 when sales and earnings are substantially below the levels realized in
all subsequent quarters of the year.

Segment Sales and Earnings

Segment sales and earnings have been determined on the same basis as used in
prior Form 10-Q reports. Segment earnings are earnings before interest
expense and income taxes and after allocation of corporate expenses and
income, other than "interest income, etc.," (principally interest income
earned on cash items and gains or losses on corporate financing transactions),
and after assignment of equity income to the segment with which it is related
in terms of products and services. Allocations are based primarily on one or
a combination of the following factors: average gross investment, average
equity and sales.

RESULTS OF OPERATIONS

Second Quarter 1996 as Compared with Second Quarter 1995

Vulcan's sales, net earnings and earnings per share were at record levels for
the second quarter. Net earnings were $58.6 million, or $1.65 per share, as
compared with 1995 earnings and earnings per share of $47.7 million and $1.32.
Net earnings and earnings per share were up 23% and 25%, respectively, from
comparable 1995 results.

Sales in 1996 were $419.2 million, up 10% from last year's total of $382.8
million. The segment detail of that increase is as follows (amounts in
millions):
Second Quarter Sales

1996 1995 Increase

Construction Materials $268.9 $238.2 $30.7
Chemicals 150.3 144.6 5.7
Total $419.2 $382.8 $36.4

Second quarter Construction Materials sales were up 13% from last year's
second quarter total. Shipments of crushed stone increased 12%. Excluding
the impact of freight to remote distribution yards, the average sales price of
crushed stone increased 4%. The increase in stone revenues was partially
offset by declines in certain other product lines. Chemicals sales increased
4% from last year's level due to increased sales in the Performance Systems
Business Unit and stronger volumes for most Chloralkali products, offset by
lower liquid caustic soda prices. The Performance Systems increase reflects
the June 17, 1996, acquisition of Mayo Chemical Company, Inc. and an
additional two months of sales from Vulcan Chemical Technologies, the former
Rio Linda Chemical Company, Inc., which was acquired on June 1, 1995.

Earnings before interest expense and income taxes were $93.6 million as
compared to $76.9 million in the same period last year. The segment detail of
this result is shown in the following summary (amount in millions):

Second Quarter Earnings Before
Interest Expense and Income Taxes *

1996 1995 Increase

Construction Materials $68.1 $53.7 $14.4
Chemicals 24.2 23.2 1.0
Segment earnings* 92.3 76.9 15.4
Interest income, etc. 1.3 - 1.3
Total $93.6 $76.9 $16.7

* After allocation of corporate expense and income,
other than "interest income, etc." (principally
interest income earned on short-term investment of
funds and gains or losses on corporate financing
transactions), and after assignment of equity
income to the segment with which it is related in
terms of products and services.

The Construction Materials segment reported record second quarter earnings of
$68.1 million, up 27% from 1995 earnings of $53.6 million. The increase
reflects sharply higher volume and improved prices. The Chemicals segment
recorded second quarter earnings of $24.2 million as compared with earnings
of $23.2 million in 1995. The increase of 4% reflects principally an
increased contribution from Performance Systems. Chloralkali earnings were
comparable to 1995 as the effects of an 8% decline in liquid caustic soda
prices and a $2.2 million negative earnings impact from plant outages offset
the impact of lower raw material costs and higher volume.

Selling, administrative and general expenses of $42.9 increased 11% from the
1995 second quarter level. This reflects principally the effect of
acquisitions and higher accruals referable to management incentive plans.

Other income, net of other charges, was $8.2 million, up sharply from the $3.5
million earned in the second quarter of 1995. The increase reflects higher
gains on the sales of assets and increased interest income.

The effective tax rate for the quarter was 35.9%, up slightly from last year's
second quarter rate of 35.3%. The increase mainly reflects a reduced effect
on the tax rate of statutory depletion referable to construction aggregates
production.

Year-To-Date Comparisons as of June 30, 1996 and June 30, 1995

Sales of $727.8 million for the first six months of 1996 increased 7% from the
first half 1995 total of $677.2. Sales of the segments are summarized as
follows (amounts in millions):
Sales for the Six Months
Ended June 30

1996 1995 Increase

Construction Materials $428.6 $393.7 $34.9
Chemicals 299.2 283.5 15.7
Total $727.8 $677.2 $50.6

Construction Materials sales were up 9% over 1995. Crushed stone shipments
increased 7%, while prices, exclusive of freight to distribution yards,
increased 3%. Chemicals sales increased 6% due to increased sales in the
Performance System Business Unit and stronger volumes for most Chloralkali
products, partially offset by lower liquid caustic prices.

First half earnings before interest expense and income taxes were $127.2
million, up 23% from the 1995 result. Segment detail is shown below (amounts
in millions):

Earnings Before Interest Expense
and Income Taxes for the
Six Months Ended June 30

1996 1995 Increase

Construction Materials $ 71.0 $ 64.2 $ 6.8
Chemicals 54.5 39.7 14.8
Segment earnings* 125.5 103.9 21.6
Interest income, etc. 1.7 - 1.7
Total $127.2 $103.9 $ 23.3

Construction Materials earnings increased 11% due to higher volumes and
prices. Chemicals earnings reflected increased contribution from Performance
Systems, higher Chloralkali volume and lower raw materials costs.

Selling, administrative and general expenses increased 7% due to the impact of
acquisitions and the costs of a project begun in 1995 to redesign the
Construction Materials segment's procurement process.

The provision for income taxes for the first half was $44.1 million as
compared with 1995's provision of $34.6 million, reflecting increases in
pretax earnings and the effective tax rate. The effective tax rate for the
period was 35.9%, up from last year's rate of 35.2%. The increase reflects
principally the relatively greater impact of higher chemicals earnings which
diluted the effect on the tax rate of statutory depletion referable to
construction aggregates production.

On July 23, 1996, H. A. Sklenar, Chairman and Chief Executive Officer of
Vulcan, made certain statements concerning the Company's earnings outlook.
Excerpts of the relevant press release quoting Mr. Sklenar are as follows:

"Strong operating results in Vulcan's Construction Materials
segment accounted for the significant improvement in 1996
second quarter results. Construction activity in most regions
benefited from strong demand, favorable weather conditions and
catch-up activity following a weak first quarter. For the
balance of 1996, we think stone shipments and earnings from
operations could exceed last year's record levels; however,
segment earnings in the second half are expected to be down
from last year's result due to lower gains from land sales,
which were especially large in last year's fourth quarter.
For the full year, we expect Construction Materials segment
earnings to approximate 1995's record level.

"Second quarter earnings for our Chemicals segment were
slightly ahead of the comparable 1995 result but below first
quarter 1996 earnings. Chloralkali results were hurt by a
softening in liquid caustic soda prices and outages at the two
major chloralkali plants. Performance Systems recorded improved
earnings. For the balance of 1996, continued softness in
liquid caustic soda prices as well as higher energy costs are
expected to result in lower Chloralkali operating earnings.

"Performance Systems is expected to continue to benefit from
improved earnings contributions from both Callaway and Vulcan
Technologies. For the full year, Chloralkali earnings are
expected to compare favorably with 1995 due to the absence of
the significant unusual charges recorded in last year's second
half. This plus improved Performance Systems results should
generate record segment earnings for Chemicals.

"If these outlooks hold up, 1996 net earnings and earnings per
share for the Company will be at record levels."

LIQUIDITY AND CAPITAL RESOURCES

Working Capital

Working capital, exclusive of debt and cash items, totaled $213.6 million at
June 30, 1996, 22% above the 1995 year-end amount of $174.8 million. Higher
receivables and inventories, due primarily to seasonal build-ups in the
Construction Materials segment, were partially offset by higher current
liabilities. Working capital at June 30, 1996 decreased slightly from the
same date last year. Higher receivables were offset by increased accrued
liabilities.

The Company's current ratio, which is based on all components of working
capital, including cash and debt items, was 1.6 as of June 30, 1996. This
compares to the 2.0 ratio at year-end 1995 and a 1.5 ratio at June 30, 1995.

Cash Flows

First half net cash provided by operations totaled $116.6 million, up 71% from
the $68.1 million generated in the same period last year. This substantial
increase reflects higher earnings, a reduction in escrow deposits referable to
land sales and lower working capital. Cash used for investing activities was
$122.6 million, as compared with the 1995 total of $67.9 million. This
increase reflects higher spending for business acquisitions and higher
purchases of property, plant and equipment. Net cash used for financing
activities totaled $15.7 million, up from the 1995 amount of $7.9 million.
The increase reflects principally higher purchases of common stock in 1996.

Property Additions

Property additions in the first half of 1996 totaled $104.0 million as
compared with $66.4 million in the first half of last year. In the second
quarter of 1996, the Chemicals segment acquired Mayo Chemical Company, Inc.
and Miller-Aldridge Chemicals, Inc. Mayo, which will be incorporated into
Callaway Chemical Company, is a leading manufacturer of specialty chemicals
serving niche markets in the water management, textile, industrial cleaning,
mining and pulp and paper industries. Sales for Mayo in 1995 were $44
million. Miller-Aldridge, which will be incorporated into Vulcan Chemical
Technologies, is a leading supplier of industrial sanitation chemicals to
the food processing industry in the Midwest, with particular emphasis on the
poultry market. Sales for Miller-Aldridge in 1995 were approximately
$3 million.

Short-term Borrowings

Short-term borrowings as of June 30, 1996 consisted of commercial paper
of $24.2 million and notes payable to banks totaling $11.9 million.
June 30, 1995 borrowings were notes payable to banks of $71.0 million.

Long-term Obligations

As of June 30, 1996, long-term obligations were 8.0% of long-term capital and
10.4% of shareholders' equity. The corresponding 1995 percentages were 9.2%
and 12.0%.

Common Stock Transactions

Pursuant to the Company's common stock purchase program, 122,100 shares of
common stock were purchased in the second quarter of 1996 at a total cost of
$7.0 million, equal to an average price of $57.55 per share. In the first six
months of 1996, 237,700 shares were purchased at a total cost of $13.4
million, or $56.28 per share.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

As previously reported in the Company's Annual Report on Form 10-K,
in May 1985, the Company received a letter from the Environmental
Protection Agency ("EPA") regarding the Company's status as a
potentially responsible party ("PRP") with respect to the Cleve Reber
Superfund Site in Ascension Parish, Louisiana (the "Reber Site"). In
the second quarter of 1996, the Company and other participating PRPs
completed all required remediation work at the Reber Site in
accordance with the Unilateral Administrative Order ("UAO") issued by
the EPA. The Company together with the other participating PRPs will
continue performing certain on-going operation maintenance and
groundwater monitoring requirements under the UAO. In five years the
EPA will review conditions at the Reber Site and based on that review
determine if the Reber Site should be removed from the National
Priorities List ("NLP") of Superfund Sites. The Company continues to
believe that total provisions now recorded are adequate to cover its
share of the anticipated remaining costs.

In July 1996, the Company received a copy of a Complaint filed May
10, 1996, by Amoco Chemical Company ("Amoco") in the U.S. District
Court (Southern District of Texas). The Company is included among
more than 100 defendants named in the Complaint, which alleges that
certain of the defendants are present or former owners or operators
of a Site operated by Tex Tin Corporation (the "Tex Tin Site") and
that the remainder of the defendants, including the Company,
generated CERCLA hazardous substances which were sent to the Tex Tin
Site. The Complaint further alleges that plaintiff, Amoco, together
with defendant, Tex Tin Corporation, entered into a March 30, 1990,
Administrative Consent Order ("ACO") with the EPA and that under the
ACO, Amoco conducted certain remedial investigations of the Tex Tin
Site, which was at the time listed on the NPL as a Superfund site and
that such investigations remained on-going until May 11, 1993, when
the Tex Tin Site was removed from the NPL by order of the U.S. Court
of Appeals (D.C. Circuit). The action brought by Amoco asserts that
Amoco spent over $8,000,000 in conducting these past remedial
investigations, that Amoco will incur costs in the future relating to
the Tex Tin Site, and that all such costs, together with pre- and
post-judgment interest, are CERCLA response costs for which
defendants are liable to Amoco, either jointly and severally or
in contribution.

The Company is investigating the matters alleged in Amoco's
Complaint. Under present circumstances, the Company is unable to
predict the probability of a favorable or unfavorable outcome, or the
amount of any potential loss in the event of an unfavorable outcome.
The Company does not, however, believe that any such potential loss
will adversely affect the consolidated financial position of the
Company to a material extent.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit 3(ii) - Bylaws
Exhibit 11 - Computation of Earnings per Share *
Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges *

(b) Reports on Form 8-K

There were no reports on Form 8-K filed for the six months
ended June 30, 1996.

* Included in Part I

SIGNATURES

Pursuant to the requirements 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.

VULCAN MATERIALS COMPANY

Date August 13, 1996 /s/ E. A. Khan
E. A. Khan
Controller

/s/ D. F. Sansone
D. F. Sansone
Vice President - Finance

EXHIBIT 3(ii)

BY - LAWS

VULCAN MATERIALS COMPANY

(Incorporated under the laws of the State of New Jersey)

Restated: February 2, 1990
Amended: June 27, 1990
March 27, 1991
February 5, 1992
(eff. 5/11/92)
May 11, 1992
December 8, 1992
February 12, 1993
March 5, 1995
February 17, 1996
May 17, 1996

I N D E X

Page

ARTICLE I Shareholders' Meetings

Section 1.1 Annual Meetings. . . . . . . . . . . . 1
Section 1.2 Special Meetings . . . . . . . . . . . 1
Section 1.3 Notice and Purpose of Meetings . . . . 1
Section 1.4 Quorum and Adjournments. . . . . . . . 1
Section 1.5 Organization . . . . . . . . . . . . . 2
Section 1.6 Voting . . . . . . . . . . . . . . . . 2
Section 1.7 Selection of Inspectors. . . . . . . . 3
Section 1.8 Duties of Inspectors . . . . . . . . . 3

ARTICLE II Directors

Section 2.1 Number, Qualification, Tenure, Term,
Quorum, Vacancies, Removal
(a) Number, Qualification and Tenure . 4
(b) Term . . . . . . . . . . . . . . . 4
(c) Quorum . . . . . . . . . . . . . . 5
Section 2.2 Meetings of the Board of Directors . . 5
Section 2.3 Committees of the Board of Directors . 6
Section 2.4 Participation in Meetings by Means of
Conference Telephone or Similar Instrument 7
Section 2.5 Action of Board of Directors and
Committees Without a Meeting. . . . . . 7
Section 2.6 Dividends. . . . . . . . . . . . . . . 7
Section 2.7 Conflict of Interest . . . . . . . . . 8

ARTICLE III Officers

Section 3.1 (a) Corporate Officers . . . . . . . . 8
(b) Group Officers . . . . . . . . . . 8
(c) Division and Business Unit Officers 9
Section 3.2 (a) Term and Removal of Officers of
the Corporation. . . . . . . . . . 9
(b) Term and Removal of Group and
Division Officers. . . . . . . . . 9
Section 3.3 (a) Chairman of the Board. . . . . . . 9
(b) Vice Chairman. . . . . . . . . . 10
Section 3.4 President. . . . . . . . . . . . . . 10
Section 3.5 Chief Administrative Officer. . . . 10
Section 3.6 Vice Presidents. . . . . . . . . . . 10
Section 3.7 General Counsel. . . . . . . . . . . 11
Section 3.8 Secretary. . . . . . . . . . . . . . 11
Section 3.9 Treasurer. . . . . . . . . . . . . . 11
Section 3.10 Controller. . . . . . . . . . . . . 11
Section 3.11 Other Officers. . . . . . . . . . . 11
Section 3.12 Voting Corporation's Securities . . 12

ARTICLE IV Indemnification of Directors, Officers
and Employees . . . . . . . . . . . . . . . . . 12

ARTICLE V Certificates of Stock

Section 5.1 Transfer of Shares . . . . . . . . . 14
Section 5.2 Transfer Agent and Registrar . . . . 14
Section 5.3 Fixing Record Date . . . . . . . . . 14
Section 5.4 Lost, Stolen or Destroyed Certificates 14

ARTICLE VI Miscellaneous

Section 6.1 Fiscal Year. . . . . . . . . . . . . 15
Section 6.2 Corporate Seal . . . . . . . . . . . 15
Section 6.3 Delegation of Authority. . . . . . . 16
Section 6.4 Notices. . . . . . . . . . . . . . . 16

ARTICLE VII By-Laws and Their Amendments. . . . . . . . . . 16

ARTICLE VIII National Emergency. . . . . . . . . . . . . . . 16

ARTICLE I
Shareholders' Meetings

SECTION 1.1. Annual Meetings

(a) The annual meeting of the shareholders of the corporation may
be held at such place within or without the State of New Jersey as may be
fixed by the Board of Directors, at 10 a.m., local time, or at such other
hour as may be fixed by the Board of Directors, on such day in April or
May of each year as may be fixed by the Board of Directors, for the
purpose of electing directors and for the transaction of such other
business as may properly be brought before the meeting.

(b) If the annual meeting for the election of directors is not
held in one of the months set forth in Section 1.1(a), the Board of
Directors shall cause the meeting to be held as soon thereafter as
convenient.

SECTION 1.2. Special Meetings

(a) Special meetings of the shareholders may be called by the Board
of Directors, the chairman of the Board of Directors or the chief
executive officer.

(b) Special meetings shall be held at such time and date and at
such place as shall have been fixed by the Board of Directors, the
chairman of the Board of Directors or by the chief executive officer.

SECTION 1.3. Notice and Purpose of Meetings

Written notice of the time, place and purpose or purposes of every
meeting of shareholders shall be given, not less than ten nor more than 60
days before the meeting, either personally or by mail, to each shareholder
of record entitled to vote at the meeting.

SECTION 1.4. Quorum and Adjournments

(a) A quorum at all meetings of shareholders shall consist of
the holders of record of a majority of the shares of the issued and
outstanding capital stock of the corporation, entitled to vote thereat,
present in person or by proxy, except as otherwise provided by law or
the Certificate of Incorporation.

(b) A shareholders' meeting may be adjourned to another time or
place, and, if no new record date is fixed, it shall not be necessary to
give notice of the adjourned meeting if the time and place to which the
meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting only such business
is transacted as might have been transacted at the original meeting.
If after the adjournment a new record date is fixed by the Board of
Directors, notice of the adjourned meeting shall be given to shareholders
of record on the new record date entitled to vote. Less than a quorum
may adjourn the meeting as herein provided.

SECTION 1.5. Organization

Meetings of the shareholders shall be presided over by the chief
executive officer, or, if he is not present, by a chairman to be chosen by a
majority of the shareholders entitled to vote who are present in person or by
proxy at the meeting. The Secretary of the corporation, or, in his or her
absence, an Assistant Secretary, shall act as secretary of every meeting, but
if neither the Secretary nor an Assistant Secretary is present, the meeting
shall choose any person present to act as secretary of the meeting.

SECTION 1.6. Voting

(a) At all meetings of the shareholders the voting need not be by
ballot, except that all elections for directors shall be by ballot, and
except that the voting shall be by ballot on all other matters upon which
voting by ballot is expressly required by the Certificate of
Incorporation or by the laws of the State of New Jersey.

(b) The poll at all elections of directors shall be open in
accordance with the laws of the State of New Jersey.

(c) Subject to the foregoing provisions, the right of any
shareholder to vote at a meeting of shareholders shall be determined on
the basis of the number of shares registered in his or her name on the
date fixed as the record date for said meeting.

(d) Except as otherwise provided by statute or these By-laws, any
matter submitted to a vote of shareholders shall be viva voce unless the
person presiding at the meeting determines that the voting shall be by
ballot or unless the circumstances are such that the will of the holders
of a majority of shares entitled to vote cannot be determined with
certainty and the holder of a share entitled to vote or his or her proxy
shall demand a vote by ballot. In either of such events a vote by ballot
shall be taken.

SECTION 1.7. Selection of Inspectors

(a) The Board of Directors may in advance of any shareholders'
meeting or any proposed shareholder action without a meeting appoint one
or more inspectors to act at the meeting or any adjournment thereof or to
receive consents of shareholders. If inspectors are not so appointed for
a shareholders' meeting or shall fail to qualify, the person presiding at
the shareholders' meeting may, and upon the request of any shareholder
entitled to vote thereat shall, make such appointment.

(b) In case any person appointed as inspector fails to appear or
act, the vacancy may be filled by appointment made by the Board of
Directors in advance of the meeting or at the meeting by the person
presiding.

(c) Each inspector, before entering upon the discharge of his or
her duties, shall take and sign an oath faithfully to execute the duties
of inspector at such meeting or in tabulating consents with strict
impartiality and according to the best of his or her ability.

(d) No person shall be elected a director in an election for which
he has served as an inspector.

SECTION 1.8. Duties of Inspectors

The inspectors shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting or the shares
entitled to consent, the existence of a quorum, the validity and effect of
proxies, and shall receive votes or consents, hear and determine all
challenges and questions arising in connection with the right to vote, count
and tabulate all votes or consents, determine the result, and do such acts as
are proper to conduct the election or vote or consents with fairness to all
shareholders. If there are three or more inspectors, the act of a majority
shall govern. On request of the person presiding at the meeting or any
shareholder entitled to vote thereat or of any officer, the inspectors shall
make a report in writing of any challenge, question or matter determined by
them. Any report made by them shall be prima facie evidence of the facts
therein stated, and such report shall be filed with the minutes of the
meeting.

ARTICLE II
Directors

SECTION 2.1. Number, Qualification, Tenure, Term, Quorum, Vacancies,
Removal

(a) Number, Qualification and Tenure. The business and affairs of
the corporation shall be managed by or under the direction of its Board
of Directors, consisting of 11 persons. The number may, from time to
time, be increased or decreased by resolution adopted by a majority of
the entire Board of Directors, but the number shall not be less than nine
nor more than 21. Any directorship to be filled by reason of an increase
in the number of directors may be filled by the affirmative vote of
two-thirds of the directors in office at the time. Directors shall be at
least 25 years of age and need not be United States citizens or residents
of New Jersey or shareholders of the corporation.

Any outside director shall retire from the Board of Directors at the
annual meeting next following their 70th birthday, regardless of the term
for which they might have been elected; provided, however, that current
outside directors who continue to serve until the annual meeting next
following their 68th birthday shall have the option to retire then. Any
outside director who ceases to hold the position with the business or
professional organization with which such person was associated when most
recently elected a director shall automatically be deemed to have offered
his or her resignation as a director of the corporation, and the Director
and Management Succession Committee shall make a recommendation to the
Board of Directors with respect to such resignation; and, if the deemed
offer to resign is accepted by the Board of Directors, such resignation
shall be effective as of the next annual meeting of shareholders.

Any inside director shall retire from the Board of Directors at the
annual meeting next following his or her 65th birthday; provided,
however, that any inside director who has served as chief executive
officer of the corporation and who has been requested by the Board of
Directors to do so shall serve until the next annual meeting following
his or her 67th birthday, but not thereafter.

An inside director is one who is or has been in the full-time
employment of the corporation, and an outside director is any other
director.

(b) Term. Directors shall be divided into three classes, with the
term of office of one class expiring each year. Except as otherwise
provided in the Certificate of Incorporation or these By-laws, directors
shall be chosen at annual meetings of the shareholders, and each director
shall be chosen to serve until the third succeeding annual meeting of
shareholders following his or her election and until his or her successor
shall have been elected and qualified.

(c) Quorum. A majority of the members of the Board of Directors
then acting, but, in no event less than one-third of the entire Board of
Directors, acting at a meeting duly assembled, shall constitute a quorum
for the transaction of business. Directors having a personal or
conflicting interest in any matter to be acted upon may be counted in
determining the presence of a quorum. If at any meeting of the Board of
Directors there shall be less than a quorum present, a majority of those
present may adjourn the meeting, without further notice, from time to
time until a quorum shall have been obtained.

SECTION 2.2. Meetings of the Board of Directors

(a) Meetings of the Board of Directors shall be held at such place
within or without the State of New Jersey and at such time and date as
may from time to time be fixed by the Board of Directors, or, if not so
fixed, as may be specified in the notice of the meeting. A meeting of
the Board of Directors shall be held without notice immediately after the
annual meeting of the shareholders.

(b) Regular meetings of the Board of Directors shall be held on
such day of such months as may be fixed by the Board of Directors. At
any regular meeting of the Board of Directors any business that comes
before such meeting may be transacted except where special notice is
required by these By-laws.

(c) Special meetings of the Board of Directors may be held on the
call of the chairman of the Board of Directors, the chief executive
officer or any three directors.

(d) Notice of each regular meeting of the Board of Directors, other
than the meeting following the annual meeting of shareholders, shall be
given not less than seven days before the date on which such regular
meeting is to be held. Notice of each special meeting of the Board of
Directors shall be given to each member of the Board of Directors not
less than two days before the date upon which such meeting is held.
Notice of any such meeting may be given by mail, telegraph, telephone,
telex, facsimile transmission, personal service or by personally advising
the director orally. Notice of a meeting of the Board of Directors may
be waived in writing before or after the meeting. Meetings may be held at
any time without notice if all the directors are present. Notice of
special meetings of the Board of Directors shall specify the purpose or
purposes of the meeting. Neither the business to be transacted nor the
purpose or purposes of any meeting of the Board of Directors need be
specified in the notice of regular meetings or in the waiver of notice of
any regular or special meeting of the Board of Directors.

(e) Notice of an adjourned meeting of the Board of Directors need
not be given if the time and place are fixed at the meeting adjourning
and if the period of adjournment does not exceed ten days in any one
adjournment.

SECTION 2.3. Committees of the Board of Directors

(a) The Board of Directors, by resolution adopted by a majority of
the entire Board of Directors, may appoint from among its members an
Executive Committee and one or more other committees, each of which shall
have at least three members. To the extent provided in such resolution
each such committee shall have and may exercise all the authority of the
Board of Directors, except as expressly limited by the New Jersey
Business Corporation Act.

(b) The Board of Directors, by resolution adopted by a majority of
the entire Board of Directors, may: (1) fill any vacancy in any such
committee; (2) appoint one or more directors to serve as additional
members of any such committee; (3) appoint one or more directors to serve
as alternate members of any such committee, to act in the absence or
disability of members of any such committee with all the powers of such
absent or disabled members; (4) abolish any such committee at its
pleasure; and (5) remove any director from membership on such committee
at any time, with or without cause.

(c) The Executive Committee shall meet at such time or times, and
at such place within or outside the State of New Jersey, as it shall
designate or, in the absence of such designation, as shall be designated
by the person or persons calling the meeting; and it shall make its own
rules of procedure. Meetings may be held at any time without notice if
all members of the Executive Committee are present, or if at any time
before or after the meeting those not present waive notice of the meeting
in writing. A majority of the members of the Executive Committee shall
constitute a quorum thereof, but at any meeting of the Committee at which
all the members are not present no action shall be taken except by the
unanimous vote of those present.

(d) Meetings of any committee may be called by the chairman of the
Board of Directors, the chief executive officer, the chairman of the
committee, by any two members of the committee or as provided in the
resolution appointing the committee. Notice of such meeting shall be
given to each member of the committee by mail, telegraph, telephone,
telex, facsimile transmission, personal service or by personally advising
the member orally. Said notice shall state the time and place of any
meeting of any such committee and shall be fixed by the person or persons
calling the meeting.

(e) Actions taken at a meeting of any committee shall be reported
to the Board of Directors at its next meeting following such committee
meeting; except that, when the meeting of the Board of Directors is held
within two days after the committee meeting, such report shall, if not
made at the first meeting, be made to the Board of Directors at its
second meeting following such committee meeting.

SECTION 2.4. Participation in Meetings by Means of Conference Telephone
or Similar Instrument

Where appropriate communication facilities are available, any or all
directors may participate in all or any part of a meeting of the Board of
Directors or in a meeting of any committee of the Board of Directors by means
of a conference telephone or any means of communication by which the persons
participating in the meeting are able to hear each other as though he was or
they were present in person at such meeting. Such participation without
protesting prior to the conclusion of such participation the lack of notice of
such meeting shall constitute a waiver of notice by such participating
director or directors with respect to business transacted during such
participation.

SECTION 2.5. Action of Board of Directors and Committees Without a Meeting

Any action required or permitted to be taken pursuant to authorization
voted at a meeting of the Board of Directors or any committee of the Board of
Directors may be taken without a meeting if, prior or subsequent to such
action, all members of the Board of Directors or of such committee, as the
case may be, consent thereto in writing and such written consents are filed
with the minutes of the proceedings of the Board of Directors or committee.

SECTION 2.6. Dividends

Subject to the provisions of the laws of the State of New Jersey and the
Certificate of Incorporation, the Board of Directors shall have full power to
determine whether any and, if any, what part of any funds of the corporation
shall be declared in dividends and paid to shareholders; the division of the
whole or any part of such funds of the corporation shall rest wholly within
the lawful discretion of the Board of Directors, and it shall not be required
at any time, against such discretion, to divide or pay any part of such funds
among or to the shareholders as dividends or otherwise, and the Board of
Directors may fix a sum which may be set aside or reserved over and above the
capital paid in of the corporation as working capital for the corporation or
as a reserve for any proper purpose, and from time to time may increase,
diminish and vary the same in its absolute judgment and discretion.

SECTION 2.7. Conflict of Interest

No contract or other transaction between the corporation and one or more
of its directors, or between the corporation and any domestic or foreign
corporation, firm or association of any type or kind in which one or more of
its directors are directors or are otherwise interested, shall be void or
voidable solely by reason of such common directorship or interest, or solely
because such director or directors are present at the meeting of the Board of
Directors or a committee thereof which authorizes or approves the contract or
transaction, or solely because his or their votes are counted for such
purpose, if any of the following is true: (1) the contract or other
transaction is fair and reasonable as to the corporation at the time it is
authorized, approved or ratified; or (2) the fact of the common directorship
or interest is disclosed or known to the Board of Directors or committee and
the Board of Directors or committee authorizes, approves, or ratifies the
contract by unanimous written consent, provided at least one director so
consenting is disinterested, or by the affirmative vote of a majority of the
disinterested directors, even though the disinterested directors be less than
a quorum; or (3) the fact of the common directorship or interest is disclosed
or known to the shareholders, and they authorize, approve or ratify the
contract or transaction.

The Board of Directors, by the affirmative vote of a majority of
directors in office and irrespective of any personal interest of any of them,
shall have authority to establish reasonable compensation of directors for
services to the corporation as directors, officers or otherwise.

ARTICLE III
Officers

SECTION 3.1

(a) Corporate Officers. Each year promptly after the annual
meeting of the shareholders, the Board of Directors shall elect a
Chairman of the Board, a President, one or more Vice Presidents, with
such designations, if any, as it may determine, a General Counsel, a
Secretary, a Treasurer, and a Controller, and from time to time may elect
or appoint one or more Assistants to any of such officers, and such one
or more Assistant Secretaries, Assistant Treasurers, and Assistant
Controllers, and such other officers, agents, and employees, and with
such designations, as it may deem proper. Any two or more offices may be
concurrently held by the same person at the same time. The Chairman of
the Board and the President shall be chosen from among the directors.

(b) Group Officers. The chief executive officer of the corporation
may appoint such officers of any group of the corporation as he may deem
proper, except that group senior vice presidents may be appointed only by
the Board of Directors. A group officer shall not be an officer of the
corporation, and shall serve as an officer only of the group to which he
is appointed, but a person who holds a group office may also hold a
corporate office or a division office, or both.

(c) Division and Business Unit Officers. The chief executive
officer of the corporation may appoint such officers of any division or
business unit of the corporation as he may deem proper, except that
division and business unit chairmen and presidents may be appointed only
by the Board of Directors. A division or business unit officer shall not
be an officer of the corporation, and shall serve as an officer only of
the division or business unit to which appointed, but a person who holds
a division or business unit office may also hold a corporate office or a
group office, or both.

SECTION 3.2

(a) Term and Removal of Officers of the Corporation. The term of
office of all officers shall be one year and until their respective
successors are elected and qualify, but any officer may be removed from
office, either with or without cause, at any time, by the affirmative
vote of a majority of the members of the Board of Directors then in
office.

(b) Term and Removal of Group and Division Officers. Group senior
vice presidents and division chairmen and presidents shall serve at the
pleasure of the Board of Directors. Group senior vice presidents and
division chairmen and presidents may be removed from office, either with
or without cause, at any time, by the Board of Directors. Other group
and division officers shall serve at the pleasure of the chief executive
officer of the corporation. Any other group or division officer may be
removed from office as a group or division officer, either with or
without cause, at any time, by the chief executive officer of the
corporation.

SECTION 3.3.

(a) Chairman of the Board. The Chairman of the Board may execute bonds,
mortgages, and bills of sale, assignments, conveyances, and all other
contracts, except those required by law to be otherwise signed and executed,
or except when the signing and execution thereof when permitted by law shall
be expressly delegated by the Board of Directors to some other officer or
agent of the corporation. The Chairman of the Board shall preside at all
meetings of the Board of Directors. The Chairman of the Board shall serve as
the chief executive officer of the corporation responsible to the Board of
Directors for planning and directing the business of the corporation and for
initiating and directing those actions essential to its profitable growth and
development and shall perform such other duties as may be assigned to him by
the Board of Directors. The Chairman of the Board shall serve as an ex
officio member (nonvoting) of all committees of the Board of Directors of
which he is not otherwise a member.

(b) Vice Chairman. The Vice Chairman may execute bonds, mortgages, and
bills of sale, assignments, conveyances, and all other contracts, except those
required by law to be otherwise signed and executed, or except when the
signing and execution thereof when permitted by law shall be expressly
delegated by the Board of Directors to some other officer or agent of the
corporation. The Vice Chairman shall advise and counsel with the Chairman of
the Board, and with other officers of the corporation on any or all activities
in which the corporation may engage, and shall perform such other duties as
may be assigned to him by the Chairman of the Board or the Board of
Directors.

SECTION 3.4. President

The President may execute bonds, mortgages, and bills of sale,
assignments, conveyances, and all other contracts, except those required by
law to be otherwise signed and executed, or except when the signing and
execution thereof when permitted by law shall be expressly delegated by the
Board of Directors to some other officer or agent of the corporation. The
President shall serve as the chief operating officer of the corporation and,
subject to the authority and direction of the Chairman of the Board, the
President shall have general and active management of the operating affairs of
the corporation and shall carry into effect the resolutions of the Board of
Directors and the orders of the Chairman of the Board with respect to the
operating affairs of the corporation.

SECTION 3.5. Chief Administrative Officer

The Chief Administrative Officer shall be the chief administrative
officer of the corporation and shall supervise and manage the administrative
affairs of the corporation. He shall supervise and direct those officers and
agents of the corporation who are engaged in the administrative affairs of the
corporation. He shall perform such functions for the corporation as may be
designated by the chief executive officer or the chief operating officer, and
shall carry into effect the resolutions of the Board of Directors and the
orders of the chief executive officer or the chief operating officer with
respect to such functions.

SECTION 3.6. Vice Presidents

Each Vice President of the corporation may execute bonds, mortgages,
bills of sale, assignments, conveyances, and all other contracts, except where
required by law to be otherwise signed and executed. Each Vice President of
the corporation shall perform such functions for the corporation as may be
designated by the chief executive officer of the corporation, and shall carry
into effect the resolutions of the Board of Directors and the orders of the
chief executive officer of the corporation with respect to such functions.

SECTION 3.7. General Counsel

The General Counsel shall be the chief legal officer of the corporation
and shall have overall responsibility for all legal affairs of the
corporation. The General Counsel shall have management responsibility for the
corporation's legal department and its relationships with outside counsel.
The General Counsel's duties shall include providing legal advice to corporate
and division officers, confirming compliance with applicable laws, overseeing
litigation, reviewing significant agreements, participating in important
negotiations, and selecting all outside counsel. He shall perform such other
functions for the corporation as may be designated by the Board of Directors
or the chief executive officer.

SECTION 3.8. Secretary

The Secretary shall keep or cause to be kept the minutes of all meetings
of the shareholders, of the Board of Directors, of the Executive Committee,
and unless otherwise directed by the Board of Directors, the minutes of
meetings of other committees of the Board of Directors. He shall attend to
the giving or serving of all notices required to be given by law or by the
By-laws or as directed by the Board of Directors or the chief executive
officer of the corporation. He shall have custody of the seal of the
corporation and shall have authority to affix or cause the same or a facsimile
thereof to be affixed to any instrument requiring the seal and to attest the
same. He shall perform such other functions for the corporation as may be
designated by the Board of Directors or the chief executive officer of the
corporation.

SECTION 3.9. Treasurer

The Treasurer shall be responsible for safeguarding the cash and
securities of the corporation and shall keep or cause to be kept a full and
accurate account of the receipts and disbursements of the corporation. He
shall perform such other functions for the corporation as may be designated by
the Board of Directors or the chief executive officer of the corporation.

SECTION 3.10. Controller

The Controller shall be the principal accounting officer of the
corporation, shall have supervision over the accounting records of the
corporation and shall be responsible for the preparation of financial
statements. He shall perform such other functions for the corporation as may
be designated by the Board of Directors or by the chief executive officer of
the corporation.

SECTION 3.11. Other Officers

The other officers of the corporation shall have such powers and duties
as generally pertain to their respective offices as well as such powers and
duties as from time to time may be designated by the Board of Directors or by
the chief executive officer of the corporation.

SECTION 3.12. Voting Corporation's Securities

Unless otherwise ordered by the Board of Directors, the chief executive
officer or his or her delegate, or, in the event of his or her inability to
act, such other officer as may be designated by the Board of Directors to act
in the absence of the chief executive officer shall have full power and
authority on behalf of the corporation to attend and to act and to vote, and
to execute a proxy or proxies empowering others to attend and to act and to
vote, at any meetings of security holders of the corporations in which the
corporation may hold securities, and at such meetings the chief executive
officer or such other officer of the corporation, or such proxy, shall possess
and may exercise any and all rights and powers incident to the ownership of
such securities, and which as the owner thereof the corporation might have
possessed and exercised, if present. The Secretary or any Assistant Secretary
may affix the corporate seal to any such proxy or proxies so executed by the
chief executive officer or such other officer and attest the same. The Board
of Directors by resolution from time to time may confer like powers upon any
other person or persons.

ARTICLE IV

Indemnification of Directors, Officers and Employees

(a) Subject to the provisions of this Article IV, the corporation
shall indemnify the following persons to the fullest extent permitted and
in the manner provided by and the circumstances described in the laws of
the State of New Jersey, including Section 14A:3-5 of the New Jersey
Business Corporation Act and any amendments thereof or supplements
thereto: (i) any person who is or was a director, officer, employee or
agent of the corporation; (ii) any person who is or was a director,
officer, employee or agent of any constituent corporation absorbed by the
corporation in a consolidation or merger, but only to the extent that (a)
the constituent corporation was obligated to indemnify such person at
the effective date of the merger or consolidation or (b) the claim or
potential claim of such person for indemnification was disclosed to the
corporation and the operative merger or consolidation documents contain
an express agreement by the corporation to pay the same; (iii) any person
who is or was serving at the request of the corporation as a director,
officer, trustee, fiduciary, employee or agent of any other domestic or
foreign corporation, or any partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise, whether
or not for profit; and (iv) the legal representative of any of the
foregoing persons (collectively, a "Corporate Agent").

(b) Anything herein to the contrary notwithstanding, the
corporation shall not be obligated under this Article IV to provide
indemnification (i) to any bank, trust company, insurance company,
partnership or other entity, or any director, officer, employee or agent
thereof or (ii) to any other person who is not a director, officer or
employee of the corporation, in respect of any service by such person or
entity, whether at the request of the corporation or by agreement
therewith, as investment advisor, actuary, custodian, trustee, fiduciary
or consultant to any employee benefit plan.

(c) To the extent that any right of indemnification granted
hereunder requires any determination that a Corporate Agent shall have
been successful on the merits or otherwise in any Proceeding (as
hereinafter defined) or in defense of any claim, issue or matter therein,
the Corporate Agent shall be deemed to have been "successful" if, without
any settlement having been made by the Corporate Agent, (i) such
Proceeding shall have been dismissed or otherwise terminated or abandoned
without any judgment or order having been entered against the Corporate
Agent, (ii) such claim, issue or other matter therein shall have been
dismissed or otherwise eliminated or abandoned as against the Corporate
Agent, or (iii) with respect to any threatened Proceeding, the Proceeding
shall have been abandoned or there shall have been a failure for any
reason to institute the Proceeding within a reasonable time after the
same shall have been threatened or after any inquiry or investigation
that could have led to any such Proceeding shall have been commenced.
The Board of Directors or any authorized committee thereof shall have the
right to determine what constitutes a "reasonable time" or an
"abandonment" for purposes of this paragraph (c), and any such
determination shall be conclusive and final.

(d) To the extent that any right of indemnification granted
hereunder shall require any determination that the Corporate Agent has
been involved in a Proceeding by reason of his or her being or having
been a Corporate Agent, the Corporate Agent shall be deemed to have been
so involved if the Proceeding involves action allegedly taken by the
Corporate Agent for the benefit of the corporation or in the performance
of his or her duties or the course of his or her employment for the
corporation.

(e) If a Corporate Agent shall be a party defendant in a
Proceeding, other than a Proceeding by or in the right of the
corporation, and the Board of Directors or a duly authorized committee of
disinterested directors shall determine that it is in the best interests
of the corporation for the corporation to assume the defense of any such
Proceeding, the Board of Directors or such committee may authorize and
direct that the corporation assume the defense of the Proceeding and pay
all expenses in connection therewith without requiring such Corporate
Agent to undertake to pay or repay any part thereof. Such assumption
shall not affect the right of any such Corporate Agent to employ his or
her own counsel or to recover indemnification under this By-law to the
extent that he may be entitled thereto.

(f) As used herein, the term "Proceeding" shall mean and include
any pending, threatened or completed civil, criminal, administrative or
arbitrative action, suit or proceeding, and any appeal therein and any
inquiry or investigation which could lead to such action, suit or
proceeding.

(g) The right to indemnification granted under this Article IV
shall not be exclusive of any other rights to which any Corporate Agent
seeking indemnification hereunder may be entitled.

ARTICLE V
Certificates of Stock

SECTION 5.1. Transfer of Shares

Stock of the corporation shall be transferable in accordance with the
provisions of Chapter 8 of the Uniform Commercial Code as adopted in New
Jersey (N.J.S. 12A:8-101, et seq.) as amended from time to time, except as
otherwise provided in the New Jersey Business Corporation Act.

SECTION 5.2. Transfer Agent and Registrar

The Board of Directors may appoint one or more transfer agents and one or
more registrars of transfers and may require all stock certificates to bear
the signatures of such transfer agent and registrar, one of which signatures
may be a facsimile.

SECTION 5.3. Fixing Record Date

For the purpose of determining the shareholders entitled to notice of or
to vote at any meeting of shareholders or any adjournment thereof, or to
express consent to or dissent from any proposal without a meeting, or for the
purpose of determining shareholders entitled to receive payment of any
dividend or allotment of any right, or for the purpose of any other action,
the Board of Directors may fix, in advance, a date as the record date for any
such determination of shareholders. Such date shall not be more than 60 nor
less than ten days before the date of such meeting, nor more than 60 days
prior to any other action.

SECTION 5.4. Lost, Stolen or Destroyed Certificates

(a) Where a certificate for shares has been lost, apparently
destroyed, or wrongfully taken and the owner thereof fails to so notify
the corporation or the transfer agent of that fact within a reasonable
time after he has notice of it and the transfer agent or the corporation
registers a transfer of the shares before receiving such a notification,
the owner shall be precluded from asserting against the corporation any
claim for registering the transfer of such shares or any claim to a new
certificate.

(b) Subject to the foregoing, where the owner of shares claims that
the certificate representing shares has been lost, destroyed or
wrongfully taken, the corporation shall issue a new certificate in place
of the original certificate if the owner thereof requests the issue of a
new certificate before the corporation has notice that the certificate
has been acquired by a bona fide purchaser, makes proof in affidavit
form, satisfactory to the Secretary or Assistant Secretary of the
corporation and to its transfer agent, of his or her ownership of the
shares represented by the certificate and that the certificate has been
lost, destroyed or wrongfully taken; files an indemnity bond for an open
or unspecified amount or if authorized in a specific case by the
corporation, for such fixed amount as the chief executive officer, or a
Vice President, or the Secretary of the corporation may specify, in such
form and with such surety as may be approved by the transfer agent and
the Secretary or Assistant Secretary of the corporation, indemnifying the
corporation and the transfer agent and registrar of the corporation
against all loss, cost and damage which may arise from issuance of a new
certificate in place of the original certificate; and satisfies any other
reasonable requirements imposed by the corporation or transfer agent.
In case of the surrender of the original certificate, in lieu of which a
new certificate has been issued, or the surrender of such new
certificate, for cancellation, the bond of indemnity given as a condition
of the issuance of such new certificate may be surrendered.

ARTICLE VI

Miscellaneous

SECTION 6.l. Fiscal Year

The fiscal year of the corporation shall begin on the first day of
January in each year and shall end on the 31st day of December next following,
unless otherwise determined by the Board of Directors.

SECTION 6.2. Corporate Seal

The corporate seal of the corporation shall have inscribed thereon
the name of the corporation, the year 1956 and the words "Corporate Seal,
New Jersey."

SECTION 6.3. Delegation of Authority

Any provision of these By-laws granting authority to the Board of
Directors shall not be construed as indicating that such authority may not be
delegated by the Board of Directors to a committee to the extent authorized by
the New Jersey Business Corporation Act and these By- laws.

SECTION 6.4 Notices

In computing the period of time for the giving of any notice required or
permitted for any purpose, the day on which the notice is given shall be
excluded and the day on which the matter noticed is to occur shall be
included. If notice is given by mail, telegraph, telex or facsimile
transmission, the notice shall be deemed to be given when deposited in the
mail, delivered to the telegraph or telex office or transmitted via facsimile
transmitter, addressed to the person to whom it is directed at his or her last
address as it appears on the records of the corporation, with postage or
charges prepaid thereon; provided, however, that notice must be given by
telegraph, telephone, telex, facsimile transmission, personal service or by
personally advising the person orally when, as authorized in these By-laws,
less than three days' notice is given. Notice to a shareholder shall be
addressed to the address of such shareholder as it appears on the stock
transfer records of the corporation.

ARTICLE VII
By-Laws and Their Amendments

Subject to the rights, if any, of the holders of any series of Preference
Stock then outstanding, the By-laws of the corporation shall be subject to
alteration, amendment or repeal, and new By-laws not inconsistent with any
provisions of the Certificate of Incorporation and not inconsistent with the
laws of the State of New Jersey may be made, either by the affirmative vote of
a majority of the votes cast at any annual or special meeting of shareholders
by the holders of shares entitled to vote thereon, or, except with respect to
By-laws adopted by the shareholders of the corporation which by their terms
may not be altered, amended or repealed by the Board of Directors, by the
affirmative vote of a majority of the whole Board of Directors at any regular
or special meeting of the Board of Directors.

ARTICLE VIII
National Emergency

For the purpose of this Article VIII a national emergency is hereby
defined as any period following an enemy attack on the continental United
States of America or any nuclear or atomic disaster as a result of which and
during the period that communication or the means of travel among states in
which the corporation's plants or offices are disrupted or made uncertain or
unsafe. Persons not directors of the corporation may conclusively rely upon a
determination by the Board of Directors of the corporation, at a meeting held
or purporting to be held pursuant to this Article VIII that a national
emergency as hereinabove defined exists regardless of the correctness of such
determination. During the existence of a national emergency under the
foregoing provisions of this Article VIII the following provisions shall
become operative but no other provisions of these By-laws shall become
inoperative in such event unless directly in conflict with this Article VIII
or action taken pursuant hereto:

(a) When it is determined in good faith by any director that a
national emergency exists, special meetings of the Board of Directors may
be called by such director and at any such special meeting two directors
shall constitute a quorum for the transaction of business including
without limiting the generality hereof the filling of vacancies among
directors and officers of the corporation and the election of additional
officers. The act of a majority of the directors present thereat shall
be the act of the Board of Directors. If at any such special meeting of
the Board of Directors there shall be only one director present such
director present may adjourn the meeting from time to time until a quorum
is obtained, and no further notice thereof need be given of any such
adjournment. The director calling any such special meeting shall make a
reasonable effort to notify all other directors of the time and place of
such special meeting, and such effort shall be deemed to constitute the
giving of reasonable notice of such special meeting and every director
shall be deemed to have waived any requirement, of law or otherwise, that
any other notice of such special meeting be given. The directors present
at any such special meeting shall make reasonable effort to notify all
absent directors of any action taken thereat, but failure to give such
notice shall not affect the validity of the action taken at any such
meeting. Any action taken at any such special meeting may be
conclusively relied upon by all directors, officers, employees, and
agents of, and all persons dealing with, the corporation.

(b) The Board of Directors shall have the power to alter, amend, or
repeal any Articles of these By-laws by the affirmative vote of at least
two-thirds of the directors present at any special meeting attended by
two or more directors and held in the manner prescribed in paragraph (a)
of this Article, if it is determined in good faith by said two-thirds
that such alteration, amendment or repeal would be conducive to the
proper direction of the corporation's affairs.

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Earnings for the six months ended June 30, 1996, and
the Consolidated Balance Sheet as of June 30, 1996, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 106
<SECURITIES> 0
<RECEIVABLES> 241812
<ALLOWANCES> 8637
<INVENTORY> 133383
<CURRENT-ASSETS> 405216
<PP&E> 1946863
<DEPRECIATION> 1204203
<TOTAL-ASSETS> 1308717
<CURRENT-LIABILITIES> 250314
<BONDS> 85199
0
0
<COMMON> 46573
<OTHER-SE> 773441
<TOTAL-LIABILITY-AND-EQUITY> 1308717
<SALES> 727763
<TOTAL-REVENUES> 727763
<CGS> 528313
<TOTAL-COSTS> 528313
<OTHER-EXPENSES> 1822
<LOSS-PROVISION> 399
<INTEREST-EXPENSE> 4460
<INCOME-PRETAX> 122751
<INCOME-TAX> 44068
<INCOME-CONTINUING> 78683
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 78683
<EPS-PRIMARY> 2.22
<EPS-DILUTED> 2.22

</TABLE>