BIRMINGHAM, Ala. -- Vulcan Materials Company (NYSE:VMC) has announced that it has completed asset sale transactions which generated total gross proceeds of approximately $149 million. These transactions include the sale of reclaimed and excess land in California, one small quarry in rural Virginia, and a percentage of future production at four aggregates quarries in South Carolina. The South Carolina transaction is with Plum Creek Timber Company, Inc. (NYSE: PCL), one of the largest landowners in the U.S. and a leading manager of timberlands and other natural resources, and enables Vulcan to unlock long-term value in these quarries tax-efficiently, while maintaining full ownership as well as operational and marketing control. With this transaction, Vulcan received $75 million in exchange for an estimated 10.5% royalty interest in the sale of approximately 144 million tons of production over 25 years.
Pre-tax gains on these transactions total approximately $120 million, $47 million of which will be recognized in the fourth quarter of 2012 with the remainder to be recognized over the life of the transaction with Plum Creek.
Consistent with its long-term strategy of enhancing aggregates reserves positions in the fastest-growing regions and urban markets of the U.S., Vulcan will further strengthen its aggregates businesses in Texas and Georgia with the acquisition of two active quarries and additional reserves adjacent to two existing quarries for a total investment of approximately $80 million. Total reserves related to these investments are approximately 91 million tons.
In the fourth quarter the Company retired $135 million of debt as scheduled. As of December 31, 2012, the Company's cash and cash equivalents, net of the above transactions, was in excess of $200 million.
Donald M. James, Chairman and Chief Executive Officer of Vulcan Materials, said, "These transactions mark important progress on Vulcan's planned asset sales, debt reduction, and strategic investment programs to strengthen our balance sheet and our aggregates asset portfolio, which already delivers among the highest profit margins in our industry. Our management team will continue its focus on selling non-core assets, reducing debt and building our aggregates positions in key markets."