Investor presentationmay13

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  • 1. Investor Presentation May 2013 Our strategy is based on our strength Aggregates Essential Material | Valuable Asset
  • 2. 2Investor Presentation, May 2013 Important Disclosure Notes This presentation contains forward-looking statements. Statements that are not historical fact, including statements about Vulcan's beliefs and expectations, are forward-looking statements. Generally, these statements relate to future financial performance, results of operations, business plans or strategies, projected or anticipated revenues, expenses, earnings (including EBITDA and other measures), dividend policy, shipment volumes, pricing, levels of capital expenditures, intended cost reductions and cost savings, anticipated profit improvements and/or planned divestitures and asset sales. These forward-looking statements are sometimes identified by the use of terms and phrases such as "believe," "should," "would," "expect," "project," "estimate," "anticipate," "intend," "plan," "will," "can," "may" or similar expressions elsewhere in this document. These statements are subject to numerous risks, uncertainties, and assumptions, including but not limited to general business conditions, competitive factors, pricing, energy costs, and other risks and uncertainties discussed in the reports Vulcan periodically files with the SEC. Forward-looking statements are not guarantees of future performance and actual results, developments, and business decisions may vary significantly from those expressed in or implied by the forward-looking statements. The following risks related to Vulcan's business, among others, could cause actual results to differ materially from those described in the forward-looking statements: risks that Vulcan's intentions, plans and results with respect to cost reductions, profit enhancements and asset sales, as well as streamlining and other strategic actions adopted by Vulcan, will not be able to be realized to the desired degree or within the desired time period and that the results thereof will differ from those anticipated or desired; uncertainties as to the timing and valuations that may be realized or attainable with respect to planned asset sales; those associated with general economic and business conditions; the timing and amount of federal, state and local funding for infrastructure; the effects of the sequestration on demand for our products in markets that may be subject to decreases in federal spending; changes in Vulcans effective tax rate; the increasing reliance on technology infrastructure for Vulcans ticketing, procurement, financial statements and other processes could adversely affect operations in the event such infrastructure does not work as intended or experiences technical difficulties; the impact of the state of the global economy on Vulcans businesses and financial condition and access to capital markets; changes in the level of spending for private residential and private nonresidential construction; the highly competitive nature of the construction materials industry; the impact of future regulatory or legislative actions; the outcome of pending legal proceedings; pricing of Vulcan's products; weather and other natural phenomena; energy costs; costs of hydrocarbon- based raw materials; healthcare costs; the amount of long-term debt and interest expense incurred by Vulcan; changes in interest rates; the impact of Vulcan's below investment grade debt rating on Vulcan's cost of capital; volatility in pension plan asset values which may require cash contributions to the pension plans; the impact of environmental clean-up costs and other liabilities relating to previously divested businesses; Vulcan's ability to secure and permit aggregates reserves in strategically located areas; Vulcan's ability to manage and successfully integrate acquisitions; the potential of goodwill or long-lived asset impairment; the potential impact of future legislation or regulations relating to climate change or greenhouse gas emissions or the definition of minerals; and other assumptions, risks and uncertainties detailed from time to time in the reports filed by Vulcan with the SEC. All forward-looking statements in this communication are qualified in their entirety by this cautionary statement. Vulcan disclaims and does not undertake any obligation to update or revise any forward-looking statement in this document except as required by law. .
  • 3. 3Investor Presentation, May 2013 Company Snapshot Vulcan is the Leading Aggregates Producer in the U.S. 95% 2012 Net Sales: $2.4 Billion Aggregates Facilities: 341 Headquarters: Birmingham, AL Ticker: VMC Company 2012 10-K Report Vulcan-Served States Our leading position in aggregates is based on 1. Favorable geographic footprint that provides attractive long-term growth prospects 2. Largest proven and probably reserve base 3. Operational expertise and pricing discipline which provides attractive unit profitability
  • 4. 4Investor Presentation, May 2013 Positioning the Business to Maximize Future Earnings Growth Strategically Positioned Leading Reserve Position Unit Profitability Continues to Grow 75% Share of U.S. Population Growth 27% Higher than peak-year in volumes 15.0 Billion Tons of Aggregates Reserves Source: Company 2012 10-K Report. As of December 31, 2012 . Unit Profitability = Cash Gross Profit / Ton. See Non-GAAP reconciliation at end of presentation.
  • 5. 5Investor Presentation, May 2013 Aggregates-Led Value Creation 95% Build and Hold Substantial Reserves Used in virtually all types of public and private construction projects Strategically located in high-growth markets that will require large amounts of aggregates to meet construction demand Aggregates operations require virtually no other raw material other than aggregates reserves Coast-to-coast Footprint Diversified regional exposure Complementary asphalt, concrete and cement businesses in select markets More opportunities to manage portfolio of locations to further enhance long-term earnings growth Profitable Growth Tightly managed operational and overhead costs Benefits of scale as the largest producer Effective Land Management Can lead to attractive real estate transactions 95Percent Sales Tied to Aggregates
  • 6. 6Investor Presentation, May 2013 Source: Moodys Analytics as of November 2012 Share of Total U.S. Growth 2010 to 2020 Vulcans Aggregates Assets are Strategically Positioned in Attractive Markets 75% in VMC-served states 70% in VMC-served states 63% in VMC-served states
  • 7. 7Investor Presentation, May 2013 2012 F(U) Amounts in Millions, except EPS 2012 2011 vs. 2011 Net Sales 2,411$ 2,407$ 4$ Gross Profit 334$ 284$ 50$ % Margin 13.9% 11.8% 2.1 pts SAG 259$ 290$ 31$ EBITDA 423$ 425$ (2)$ Adjusted EBITDA 1 411$ 352$ 59$ % Margin 17.1% 14.6% 2.5 pts EPS from Cont. Ops, diluted (0.42)$ (0.58)$ 0.16$ Adjusted EPS1 from Cont. Ops, diluted (0.47)$ (0.93)$ 0.46$ Full Year Most Recent Full Year Financial Results Demonstrate Operating Leverage Margin Expansion and Earnings Improvement on Flat Revenues Note: Please see Non-GAAP reconciliations at the end of this presentation. Margin calculated using Net Sales. 1 Adjusted to exclude gain on sale of real estate and businesses, recovery from a legal settlement, exchange offer and restructuring costs.
  • 8. 8Investor Presentation, May 2013 $4.01 $4.21 2011 2012 17.7% 20.4% 2011 2012 11.8% 13.9% 2011 2012 14.6% 17.1% 2011 2012 Most Recent Full Year Financial Results Demonstrate Operating Leverage Increase in Profitability Driven by Higher Pricing and Effective Cost Control Note: Please see Non-GAAP reconciliations at the end of this presentation. Aggregates Gross Profit Margin calculated using Segment Total Revenues. Adjusted EBITDA Margin Aggregates Cash Gross Profit per Ton Gross Profit Margin Aggregates Gross Profit Margin
  • 9. 9Investor Presentation, May 2013 Attractive Profitability Unit Profitability That Was Maintained Throughout the Downturn, Now Beginning to Grow 2012 profitability is higher than prior year and 27% higher than peak-year in volumes (2005) Trailing Twelve Months Cash Gross Profit Per Ton of Aggregates Note: Please see Non-GAAP reconciliations at the end of this presentation.
  • 10. 10Investor Presentation, May 2013 Track Record for Price Growth Vulcan Consistently Outperforms, Contributing to Higher Unit Profitability Aggregates Price Growth Index, 1992 = 100 Note: Historical performance is not a guarantee or assurance of future performance nor that previous results will be attained or surpassed. *Industry = Producer Price Index for Aggregates reported by t