Vulcan Materials Company (Holding Company) · NYSE:VMC

Vulcan Materials Company (Holding Company) — Non-Deal Roadshow (June 2006)

25 slides from Vulcan Materials Company (Holding Company)'s roadshow presentation, June 2006

  1. Slide 1: 50 Years, 1956-2006

    50 Years, 1956-2006 50 Years 1956 - 2006 Early Summer, 2006 www.vulcanmaterials.com 1

  2. Slide 2: Safe Harbor

    Safe Harbor 50 Years, 1956-2006 Certain matters discussed in this presentation, including expectations regarding future performance, contain forward-looking statements that are subject to risks, assumptions and uncertainties that could cause actual results to differ materially from those projected.

  3. Slide 3: Overview

    Overview 50 Years, 1956-2006 VMC ƒ U.S. based public company since Shareholder Return S&P 500 1956, member of S&P 500 Index '00-'05 ƒ 364 building materials operations in 21 U.S. States and Mexico '95-'05 ƒ Largest producer of aggregates and top 5 producer of asphalt in '90-'05 the U.S. ƒ Consistent

  4. Slide 4: 2005 Highlights

    2005 Highlights 50 Years, 1956-2006 ƒ Strong sales growth (Millions $, except EPS) 2005 2004 % Chg – Aggregates +15% – Asphalt +36% – Concrete +12% Net Sales $2,615 $2,213 18% ƒ Aggregates – pricing +8% Gross Profit $708 $583 21% – shipments + 7% % of Sales 27.1% 26.3% 0.8 pts ƒ Unit cost for diesel

  5. Slide 5: 2006 1st Quarter Highlights

    2006 1st Quarter Highlights 50 Years, 1956-2006 (Millions $, except EPS) ƒ Strong sales growth 2006 2005 – Aggregates +29% – Asphalt +60% – Concrete +29% Net Sales $642 $479 ƒ Aggregates Gross Profit $164 $92 – pricing +15% – shipments + 13% % of Sales 25.5% 19.2% ƒ Unit cost for diesel fuel reduced

  6. Slide 6: Earnings Growth Without Chemicals

    Earnings Growth Without Chemicals 50 Years, 1956-2006 Earnings per Diluted Share $4.00 $3.00 Growth Rate 8% $3.50 R sq 60% $2.50 $3.00 $2.50 $2.00 $2.00 $1.50 $1.50 Growth Rate 11% $1.00 $1.00 R sq 78% $0.50 $0.50 $0.00 $0.00 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '94 '95 '96 '97 '98 '99 '0

  7. Slide 7: Strategic Objectives to Add Value

    Strategic Objectives to Add Value 50 Years, 1956-2006 2005 Net Sales by Product ƒ Coast-to-coast footprint (Millions $) ƒ Large, high growth U.S. markets Other 4% ƒ Diversified regional exposure Asphalt Concrete 10% 14% ƒ Profitable growth ƒ Quality top line organic growth ƒ Execute strategic acquis

  8. Slide 8: Aggregates – U.S. Market Fundamentals

    Aggregates – U.S. Market Fundamentals 50 Years, 1956-2006 ƒ Location and quality of reserves are critical Aggregates ƒ Primarily local markets due to high weight-to-value ratio ƒ Barriers to entry Asphalt Concrete ƒ Relatively stable demand due to public funding Public Private ƒ Highly fragmented in

  9. Slide 9: Operational Footprint

    Operational Footprint 50 Years, 1956-2006 States with Vulcan- 33% served markets..... ƒ Account for over 70% of the projected population growth ƒ Include the fastest growing metropolitan areas Top 10 Aggregates-Served State ƒ Provide regional Early Summer, 2006 Aggregates-Served State economic Metro

  10. Slide 10: Vulcan's U.S. Aggregates Distribution Network

    WY WY WY WY WY WY NY NY NY NY NY NY Vulcan’s Remote– Distribution U.S. Aggregates Network Future Demand and Supply NE NE NE NE NE NE IA IA IA PA PA PA PA PA PA 50 Years, 1956-2006 OH OH OH OH OH OH NJ NJ NJ IN IN NJ NJ NJ IL IL IL IN IN IN IL IL IL DC DC DC DC DC DC DE DE DE CO CO CO CO CO CO MD MDD

  11. Slide 11: U.S. Aggregates Demand – Industry

    U.S. Aggregates Demand – Industry 50 Years, 1956-2006 Billions of Tons Annual Industry Volume 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1975 1985 1995 2005 Early Summer, 2006 Source: US Geological Survey and Company estimates. Long periods of recovery are typical after short, steep downturns. 11

  12. Slide 12: Major End Uses for Aggregates

    Major End Uses for Aggregates 50 Years, 1956-2006 2005 Construction $ Put-in-Place Aggregates Tons 3% 11% 17% 23% 25% 27% 21% 47% 26% < 1MM tons Highways (includes both new & maintenance) Non Residential (private new construction) Residential (includes new construction) Other Public (e.g. government

  13. Slide 13: End Market Demand - Public Construction

    End Market Demand - Public Construction 50 Years, 1956-2006 Billions of tons (L) Billions of ‘96$ (R) 4.0 $200 Public Construction Put-in-Place U.S. Aggregates Volume 3.0 $150 2.0 $100 1.0 Early Summer, 2006 0.0 $50 75 85 95 05 Sources: US Department of Commerce, US Geological Survey and Company est

  14. Slide 14: End Market Demand – Federal Funding Levels for Highways

    End Market Demand – Federal Funding Levels for Highways 50 Years, 1956-2006 Annual Funding of Federal Spending Pattern of Federal Highways by Year Highway Annual Authorizations (Fiscal Year 98’-09’) 45 50% Billions of U.S. $ Example: Funding of $1 41% billion would result in 40% $270 million of spen

  15. Slide 15: End Market Demand - Private Non-Residential Construction

    End Market Demand - Private Non-Residential Construction 50 Years, 1956-2006 Monthly Construction Put-in-Place 255 205 Annual Construction Put-in-Place 250 Jan. ‘99 Dec ‘05 Billions of ‘96$ 155 Billions of ‘96$ 200 150 100 Early Summer, 2006 50 0 '75 '85 '95 '05 Source: U.S. Department of Commerce.

  16. Slide 16: End Market Demand - Residential Construction

    End Market Demand - Residential Construction 50 Years, 1956-2006 10 Supply of Single Family Housing (No. of Months) 8 6 4 2 Dec 05’ 0 90' 92' 94' 96' 98' 00' 02' 04' 06' 1800 18 (L) Single (R) 30Yr. Source: National Assoc. of Realtors. Starts- Rates 000’s Single Family Starts Mortgage Rates 1200 12

  17. Slide 17: Aggregates – Top Line Growth Trend

    Aggregates – Top Line Growth Trend 50 Years, 1956-2006 230 Volume 230 170 Price 210 210 Industry Industry Vulcan Vulcan 150 190 190 170 170 Indexed on Indexed on 130 1991=100 1991=100 150 150 130 130 110 110 110 Early Summer, 2006 90 9090 91 05 91 05 Note: Company volume includes acquisitions. Sourc

  18. Slide 18: U.S. Aggregates – Future Demand and Supply

    U.S. Aggregates – Future Demand and Supply 50 Years, 1956-2006 Aggregates Reserves Billions of Tons 12 10 8 5.7 2.1 6 11.1 4 7.5 2 0 Early Summer, 2006 1995 Shipments Additions 2005 Our 45 years of zoned and permitted reserves are strategically located to meet future demand. 18

  19. Slide 19: Contribution of Acquisitions to Growth – Bolt-ons & Greenfields

    Contribution of Acquisitions to Growth – Bolt-ons & Greenfields 50 Years, 1956-2006 End of 1990 (117 Sites) Calmat (27 Sites) Early Summer, 2006 Tarmac (21 Sites) ICA Joint Venture (11 Sites) Yucatan Yucatan Peninsula Peninsula Other Acquisitions & Greenfields (116 Sites) of of Mexico Mexico Acquisi

  20. Slide 20: Growth through Acquisitions and Greenfields

    Growth through Acquisitions and Greenfields 50 Years, 1956-2006 Percent of U.S. Production >3MM tons 17% Public Private 1-3MM tons 15% 42% 58% Companies Companies 1-3MM tons <1MM tons 26% < 1MM tons Early Summer, 2006 Company estimates of production tons based on 2005 data. Bolt-on acquisition of sm

  21. Slide 21: Cash Provided by Operating Activities

    Cash Provided by Operating Activities 50 Years, 1956-2006 Cash Flows from Operations 325 Dividends $ Millions 28% increase announced 600 OCF less Capex Feb. 10, 2006 Capex (excl. acquisitions) CPI 500 S&P500 250 VMC 400 * * 300 175 Index 200 1994=100 100 0 Early Summer, 2006 100 94 95 96 97 98 99 00

  22. Slide 22: Uses of Cash to Create Shareholder Value

    Uses of Cash to Create Shareholder Value 50 Years, 1956-2006 Cumulative Uses of Cash (’95-’05) Millions of $ ƒ Internal projects with high returns remain a priority Dividends 17% ƒ Acquisition strategy includes synergistic bolt-on targets and Stock opportunistic larger deals Repurchase PP&E 8% $5,28

  23. Slide 23: Cash Returned to Shareholders

    Cash Returned to Shareholders 50 Years, 1956-2006 Millions of $ 350 Approximately 3.6 300 million shares at an Dividends Paid average cost of 250 Purchases of Common Stock $63.67 per share 200 150 100 50 0 Early Summer, 2006 95 96 97 98 99 00 01 02 03 04 05 From September 1985 through February 9, 20

  24. Slide 24: Balance Sheet Position

    Balance Sheet Position 50 Years, 1956-2006 Total Debt / Total Capital Ratio 40% 20% Early Summer, 2006 0% 95' 96' 97' 98' 99' 00' 01' 02' 03' 04' 05' Strong balance sheet can support future growth. 24

  25. Slide 25: U.S. Aggregates – Examples of Land Development Potential

    U.S. Aggregates – Examples of Land Development Potential 50 Years, 1956-2006 San Diego, California Miami, Florida Early Summer, 2006 25

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