Vulcan Materials' strategy focuses on leveraging its strength in aggregates, which are essential construction materials. The company has the largest proven reserves of aggregates and operates in markets that represent a high percentage of US population and economic growth. Vulcan aims to maximize long-term earnings growth through strong operational performance, cost controls, and strategic positioning in attractive regions.
2. I M P O R T A N T D I S C L O S U R E N O T E S
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 Vulcan’s effective tax rate; the
increasing reliance on technology infrastructure for Vulcan’s 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 Vulcan’s 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.
Safe Harbor
2
3. Notes
C O M P A N Y S N A P S H O T
95%
2012 Net Sales: $2.4 Billion Aggregates Facilities: 341
Headquarters: Birmingham, AL Ticker: VMC
Company 2012 10-K Report
Vulcan-Served States Our value proposition and
leading position is based
upon…
1. Favorable geographic footprint
that provides attractive long-
term growth prospects
2. Largest proven and probable
reserve base
3. Operational expertise and
pricing discipline which provides
attractive unit profitability
Industry-Leading Position in Aggregates
3
4. Notes
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
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 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
B U S I N E S S S T R A T E G Y
Aggregates-led Value Creation
4
95% of Sales are tied to Aggregates
5. Notes
B U S I N E S S S T R A T E G Y
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.
Positioning the Business to Maximize Future
Earnings Growth
5
6. Notes
CA, FL and TX accounted for more than 40% of total sales in 2012. Source: Moody’s Analytics as of June 2013
VMC-Served States
74%
Population Growth
69%
62%
Household Formation
Employment Growth
CA,FL,TX
38%
43%
33%
Strategically Positioned in Attractive Markets
S H A R E O F T O T A L U . S . G R O W T H ( 2 0 1 0 – 2 0 2 0 )
6
7. Notes
$4.01
$4.21
2011 2012
17.7%
20.4%
2011 2012
11.8%
13.9%
2011 2012
14.6%
17.1%
2011 2012
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
M O S T R E C E N T F U L L Y E A R F I N A N C I A L R E S U L T S
Operating Leverage Driven by Higher Pricing and
Effective Cost Control
7
8. Notes
Net Sales up 5% and Gross Profit up 18%
Broad-based improvement in aggregates pricing, up 4%
Aggregates volumes down 1% due in part to extremely wet weather
Concrete and Cement volumes up 11% and 18% respectively
Gross Profit Margin up 140 basis points
Aggregates earnings up 4%
Non-aggregates earnings improvement of $17 million
EPS Improvement of $0.33 per diluted share
Improved Credit Metrics
Net Debt / EBITDA 5.4x, down from 6.3x
C U R R E N T Y E A R F I N A N C I A L R E S U L T S – 1 H ’ 1 3 V S . 1 H ’ 1 2
Margin Expansion and Earnings Improvement in
Each Operating Segment
8
Note: Please see Non-GAAP reconciliations at the end of this presentation. Margin calculated using Net Sales.
9. Notes
Tons in Millions. Note: Please see Non-GAAP reconciliations at the end of this presentation.
C A S H G R O S S P R O F I T P E R T O N O F A G G R E G A T E S
Unit Profitability That Was Maintained Throughout
the Downturn, Now Beginning to Grow
9
2012 Profitability is higher than prior year and 27% higher than peak-year in volumes (2005)
10. Notes
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 the U.S. Bureau of Labor Statistics. For comparison purposes, Vulcan price not freight adjusted.
6.4%
5.3%
CAGR ’92-’02 ’02-’12
Industry*
Vulcan 3.6%
2.8%
Vulcan Consistently Outperforms, Contributing to
Higher Unit Profitability
A G G R E G A T E S P R I C E G R O W T H ( I N D E X , 1 9 9 2 = 1 0 0 )
10
11. Notes
Total SAG down $115
million from 2007
(31% decrease)
Millions of $ Source: Company filings Note: 2007 SAG includes Florida Rock on a pro forma basis ($84.5M).
S A G E X P E N S E S
Reduced During the Downturn. Well Positioned to
Leverage ERP Investment and Shared Services
11
12. Notes
2 0 1 2 C A S H F L O W B R I D G E
Sources of Cash
Uses of Cash
Operating activities, less debt
service costs, generated $121
million of cash in 2012
Progress on Planned Asset Sales
coincidently offset cash used for
debt maturities and exchange
offer defense costs
VPP = Volumetric Production Payment. Exchange Offer = Costs incurred as a result of an unsolicited exchange offer initiated by Martin Marietta Materials on December 12, 2011 and subsequently withdrawn in 2012.
De-Risking the Balance Sheet Through Higher Cash
Generation from Operations and Asset Sales
12
13. Notes
(1) Line of credit is an Asset Based Lending facility: $500 million 5 year facility expiring March 2018.
Favorable debt maturity profile with substantial liquidity
Minimal maturities of $150 million over the next three years
$87 million cash on hand and $500 million line of credit (1)
Limited financial covenants
B A L A N C E S H E E T
Significant Financial and Operational Flexibility With
Limited Near-Term Maturities
13
Amounts in Millions, except ratios 2013 2012 2011
Total Debt 2,625$ 2,813$ 2,891$
Cash and Cash Equivalents 87 158 107
Net Debt 2,538$ 2,655$ 2,784$
Net Debt / TTM EBITDA 5.4 6.3 7.7
As of June 30
14. Notes
Source: Company estimates of aggregates demand using data from Woods & Poole CEDDS.
Aggregate demand
significantly below
population trend line.
A G G R E G A T E S D E M A N D I N V U L C A N M A R K E T S ( 1 9 7 2 = 1 0 0 )
Vulcan’s Key Markets Are Leveraged to Favorable
Long-Term Growth Prospects
14
15. Notes
Source: Company estimates of aggregates demand.
U . S . A G G R E G A T E S D E M A N D ( M I L L I O N S O F T O N S )
Privately Funded Construction Accounts for Most of
the Cyclicality
15
16. Notes
Source: McGraw-Hill and Company Estimates. Trailing Twelve Months. Includes both Single-family and Multi-family. TTM = Trailing Twelve Months
+26%
U . S . H O U S I N G S T A R T S ( T T M )
Growth Bodes Well for Continued Recovery in
Vulcan-Served Markets…
16
Vulcan-served states account for more than 60% of all housing starts
17. Notes
Source: McGraw-Hill and Company Estimates. TTM = Trailing Twelve Months. Includes both Single-family and Multi-family
H O U S I N G S T A R T S I N K E Y V U L C A N - S E R V E D S T A T E S
…Evident by the Significant Growth in These States
17
Year-over-Year % Change in TTM – June 2013
18. Notes
Source: McGraw-Hill and Company Estimates. TTM = Trailing Twelve Months.
Year-
over-Year
Change in
TTM
+11%
P R I V A T E N O N R E S I D E N T I A L
Growth in Residential is Helping Drive Growth in
Private Nonresidential Buildings
18
19. Notes
Note: The Architectural Billings Index (ABI) is a diffusion index derived from the monthly Work-on-the-Boards Survey conducted by the AIA Economics & Market Research Group
P R I V A T E N O N R E S I D E N T I A L
Another Leading Indicator, the ABI, Has Remained
Above 50 for 10 of the Last 12 Months
19
Architectural Billing Index – Monthly Value
A value greater than 50
indicates an increase in
billing activity from the
prior month.
20. Notes
As of June 2013. Sources: The American Road & Transportation Builders Association, McGraw-Hill and Company Estimates. 1 U.S. Department of Transportation Secretary July 27, 2012
Growth in TTM Contract Awards for New Highway Projects
U.S. +1% and VMC-served markets +5%
Growth in VMC-served markets driven by new road projects which are more
aggregates intensive than other types of construction
Growth in Obligation of Regular Highway Program Funds
$20.2 billion obligated year-to-date, up 22% from prior year
Obligated $ greater than any year since 2009 (last year of SAFETEA-LU)
Increased State-led Highway Funding Initiatives
TIFIA Funding Authorization Expanded in MAP-21
$1.75 billion of funding authorization could support up to $50 billion of new
construction 1
P U B L I C C O N S T R U C T I O N - H I G H W A Y S
More Stabile and Predictable Funding Environment
Leads to Improving Construction Activity
20
21. Notes
Enacted in 1998 to provide Federal credit assistance
for eligible transportation projects and stimulate private
capital investment.
Each dollar put into TIFIA can provide approximately
$10 in loans and support up to $30 in infrastructure
investment.
MAP-21 Funding Authorization: $1.75 billion over
two years (FY’13 & FY’14). Signed into law July 2012.
12 projects
$14 billion
14 projects
$13 billion
5 projects
$9 billion
3 projects
$3 billion
4 projects
$3 billion
59 projects submitted for approval as of August 2013 totaling $74 billion. Includes FY 2011-FY 2013
$74Bn of Potential
Projects Submitted
>60%Share of Total Project $
in Vulcan Markets
LA, FL and GA
4 projects
$4 billion
P U B L I C C O N S T R U C T I O N
Vulcan States Should Get a Disproportionate Number
of TIFIA-funded Projects
21
22. Notes
Attractive unit
profitability
Cost reduction initiatives
resetting mid-cycle
EBITDA to new, higher
level
Favorable trends in
private construction
activity
New multi-year Federal
Highway Bill
Superior Aggregates
Operations
Strong Operating
Leverage
De-Risked Balance
Sheet
Largest reported reserve
base
Favorable long term
growth prospects
Benefits of scale
Operational expertise and
pricing growth
Attractive real estate
opportunities
Substantial liquidity
Moderate debt maturity
profile
Commitment to
strengthening balance
sheet
Commitment to restore a
meaningful dividend
Well Positioned to Capitalize on Market Recovery
S U M M A R Y – V U L C A N ’ S V A L U E P R O P O S I T I O N
22
24. Notes
Source: Company filings
Amounts in millions of dollars, except per share data
EBITDA
EBITDA is an acronym for Earnings Before Interest, Taxes, Depreciation and Amortization.
Cash gross profit
Cash gross profit adds back noncash charges for depreciation, depletion, accretion and amortization to gross profit.
YTD
12/31/12
YTD
12/31/11
EBITDA and Adjusted EBITDA
Net earnings (loss) (52.6) (70.8)
Provision (benefit) for income taxes (66.5) (78.4)
Interest expense, net 211.9 217.2
Discontinued operations, net of tax (1.3) (4.5)
EBIT 91.5 63.5
Plus: Depr., depl., accretion and amort. 332.0 361.7
EBITDA 423.5 425.2
Legal settlement - (46.4)
Restructuring charges 9.5 12.9
Exchange offer costs 43.4 2.2
Gain on sale of real estate and businesses (65.1) (42.1)
Adjusted EBITDA 411.3 351.8
Q2 Q2 Q2
2013 2012 2011
Net earnings (loss) (8.2) (78.2) (96.5)
Provision (benefit) for income taxes (43.0) (56.9) (112.0)
Interest expense, net 209.6 210.1 206.9
Discontinued operations, net of tax (3.0) 0.7 (10.7)
Depr., depl., accretion and amort. 315.0 348.2 373.2
EBITDA 470.4 423.9 360.9
Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4
2012 2011 2010 2009 2008 2007 2006 2005
Aggregates segment gross profit 352.1 306.2 320.1 393.3 657.6 828.7 819.0 650.0
Agg. Depr., depl., accretion and amort. 240.7 267.0 288.6 312.2 310.8 246.9 210.3 206.4
Aggregates segment cash gross profit 592.8 573.2 608.8 705.5 968.4 1,075.6 1,029.3 856.4
Aggregate tons 141.0 143.0 147.6 150.9 204.3 231.0 255.4 259.5
Aggregates segment cash gross profit per ton 4.21 4.01 4.12 4.68 4.74 4.66 4.03 3.30
Generally Accepted Accounting Principles (GAAP) does not define "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)" and "cash gross profit." Thus, they should not be
considered as an alternative to any earnings measure defined by GAAP. We present these metrics for the convenience of investment professionals who use such metrics in their analysis, and for
shareholders who need to understand the metrics we use to assess performance and to monitor our cash and liquidity positions. The investment community often uses these metrics as indicators of a
company's ability to incur and service debt. We use cash gross profit, EBITDA and other such measures to assess the operating performance of our various business units and the consolidated
company. Additionally, we adjust EBITDA for certain items to provide a more consistent comparison of performance from period to period. We do not use these metrics as a measure to allocate
resources. Reconciliations of these metrics to their nearest GAAP measures are presented below:
Trailing 12 Months
Aggregates Segment Cash Gross Profit
Trailing 12 Months EBITDA
Reconciliation of Non-GAAP Financial Measures
A P P E N D I X
23
25. Notes
A P P E N D I X – S I M P L I F I E D G E O L O G Y M A P
Below the Geological Fall Line, Little or No Hard
Rock Aggregates Reserves Suitable for Mining
24
26. Notes
Geological Fall Line
4-5 truckloads per rail car
$0.04-0.12 per ton mile
65 truckloads per barge
$0.02-0.03 per ton mile
2,500 truckloads per ship
Less than $0.01 per ton mile
20-25 tons per truck
$0.15-0.35 per ton mile
Note: Per ton mile costs exclude loading and unloading.
A P P E N D I X
Comprehensive Distribution Network to Serve
Attractive Markets With Reserves
25
31. 1200 Urban Center Drive
Birmingham, AL 35242-2545
Telephone: (205) 298-3000
Fax: (205) 298-2963
Shareholder Services:
(866) 886-9902 (toll free inside the U.S. and Canada)
(201) 680-6578 (outside the U.S. and Canada, may call collect)
(800) 231-5469 (TDD, hearing impaired)
Internet: computershare.com/investor
Investor Relations:
Mark Warren
Telephone: (205) 298-3191
Email: ir@vmcmail.com
Independent Auditors:
Deloitte & Touche LLP
Birmingham, Alabama
Registrar and Transfer Listing:
Computershare Shareowner Services LLC
Other Information
A P P E N D I X
Media Relations:
David Donaldson
Telephone: (205) 298-3220
Email: media@vmcmail.com
30