Vmc ir handout feb 2014

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Investor Presentation, February 2014

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

2Investor Presentation, February 2014

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

2Investor Presentation, February 2014 2

NotesC O M P A N Y S N A P S H O T

95%2013 Net Sales: $2.6 Billion

Largest U.S. Aggregates Producer

Vulcan-Served States

1. Strong Execution and Operating Leverage

2. Best Asset Base for Long-term Growth

3. Demand Recovery Just Beginning

Aggregates-Led Value Creation


Notes

Earnings Improvement EPS increased $0.58 per diluted share

Cash earnings increased 40%

EBITDA increased 14%

Aggregates Gross Profit Margin up 140 basis points Volume and price up 3%

Cash gross profit per ton of $4.37, up 4%

Significant increase in Gross Profit from Non-aggregates

Improved Credit Metrics Net Debt / EBITDA 5.0x, down from 5.8x in 2012

F I N A N C I A L R E S U L T S – 2 0 1 3 V S . 2 0 1 2

Continued Improvement in Earnings and Profitability

4

Note: Please see Non-GAAP reconciliations at the end of this presentation. Margin calculated using Net Sales.


Notes

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

R E C E N T T R E N D S I N F U L L Y E A R F I N A N C I A L R E S U L T S

Strong Execution and Improving Operating Leverage


Notes

Profit Enhancement Plan

> $100 million incremental EBITDA run rate by mid 2013

Planned Asset Sales

> $500 million in cash

Capital Structure and Dividend

Reiterating commitment to long-standing practice

+ +

ANNOUNCED February 2012

ACCOMPLISHED as of February 2014 Increased Adjusted EBITDA $116 million and Adjusted EBIT $173 million

Raised $1 billion* in proceeds and invested more than $240 million to add aggregates operations and reserves.

Paid down almost $800 million of debt and improved credit profile.*

*Following closing of asset sale transaction and completion of tender offer - each announced January 23, 2014. See Non-GAAP reconciliations at the end of this presentation.

I N I T I A T I V E S U P D A T E

Increased Profitability, Divestiture of Non-Strategic Assets and Stronger Balance Sheet


Notes

*Full year 2013 results assuming both the sale of the Company’s Florida cement and concrete operations and the tender offer to purchase up to $500 million of senior notes had been completed on January 1, 2013. See Non-GAAP reconciliations at the end of this presentation and Table G included as part of 4Q 2013 earnings release for additional information.

Gross Profit Margin Net Debt

EPS Continuing Ops, diluted Net Debt / Adjusted EBITDA

D I V E S T I T U R E A N D T E N D E R O F F E R U P D A T E – P R O F O R M A

Profitability and Capital Structure Enhanced


Notes

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

Already Strong Unit Profitability, Continuing to Expand


30% higher than prior peak in volumes

Trailing Twelve Month Sales Volume

Cash Gross Profit per Ton at Prior Peak in Volume

NotesB U S I N E S S S T R A T E G Y C O M P O N E N T S

Attractive Long-Term

Growth

Leading Reserve Position

Favorable Product Mix

15.0 Billion Tons of Aggregates Reserves

100% Sales Tied to Aggregates*

75% Share of U.S. Population Growth

Source: Company 10-K Report. Represents sales to external customers of aggregates and Company’s downstream products that use aggregates.*After closing of cement and concrete asset sale announced January 23, 2014.

Best Asset Base for Long-Term Growth


Notes

CA, FL and TX accounted for more than 40% of total sales in 2012. Source: Moody’s Analytics as of November 2013

VMC-Served States

75%Population Growth

70%

63%

Household Formation

Employment Growth

CA,FL,TX

38%

43%

34%

Strategically Positioned in Attractive MarketsS 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 )


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.

+5.9%/yr+4.9%/yrIndustry*

Vulcan

Favorable Demographics Contributes to Above-Average Price Growth and Operating Leverage

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 , 2 0 0 3 = 1 0 0 )


Notes

Source: Company estimates of aggregates demand. Population 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 )

Favorable Growth Prospects Combined With Good Operating Leverage


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 )

Demand Growing Again, Led by Private Construction


NotesU . S . A G G R E G A T E S D E M A N D – E N D M A R K E T S

Vulcan-Served Markets Expected to Grow Faster Than Other Markets

14

Broad-based construction activity

Levels of affordability are high and inventory levels are low

Vulcan markets growing faster than other markets

Typical for this point in the demand cycle, growth more geographically concentrated

Key Vulcan-served states, including TX, CA and FL, account for most of the growth in contract awards

Occupancy rates and rents increasing

Private Non-Residential Buildings

State fiscal condition improving.

State-led funding initiatives enacted in key states

MAP21 stable funding through FY 2014 and expanded Federal direct loan program (TIFIA)

$85 billion of potential TIFIA projects – more than 60% in Vulcan-served markets

Highways

At this point in the cycle, large projects are a key component of demand

Large energy, refinery and industrial projects located in key Vulcan-served markets

State fiscal condition improving

Increased funding for port and waterway projects

Other Infrastructure


Residential

Notes

Largest Reserve Base

Favorable Long-term Growth Prospects

100% of Sales Tied to Aggregates

Attractive Real Estate Opportunities Possible

Strong Operating Leverage

Superior Aggregates Operations

End Markets Recovering

Attractive Unit Profitability in Aggregates

Initiatives Resetting Mid-cycle EBITDA to New, Higher Level

Benefits of Scale

Moderate Debt Maturity Profile

Favorable Trends in Private Construction Activity Leading the Way

Each Major End Market Expected to Grow in 2014

Well Positioned to Serve Large Projects

State-led Funding Initiatives Enacted in Key Vulcan-Served States

Well Positioned to Capitalize on Market RecoveryV U L C A N ’ S V A L U E P R O P O S I T I O N - S U M M A R Y


Supplemental Information Follows

Notes

Source: Company filings

Reconciliation of Non-GAAP Financial Measures(Amounts in Millions $, Except Per Ton and Per Share Data)

A P P E N D I X


EBITDAEBITDA is an acronym for Earnings Before Interest, Taxes, Depreciation and Amortization.

Aggregates Segment Cash Gross ProfitAggregates segment cash gross profit adds back noncash charges for depreciation, depletion, accretion and amortization to gross profit.

Cash EarningsCash earnings adjusts EBITDA for net interest expense and current taxes.

YTD YTD YTDEBITDA and Adjusted EBITDA 2013 2012 2011Net earnings (loss) 24.4 (52.6) (70.8)Provision (benefit) for income taxes (24.5) (66.5) (78.4)Interest expense, net 201.7 211.9 217.2Discontinued operations, net of tax (3.6) (1.3) (4.5)

EBIT 198.0 91.5 63.5Plus: Depr., depl., accretion and amort. 307.1 332 361.7

EBITDA 505.1 423.5 425.2Revenue amortized from deferred revenue (2.0) 0.0 0.0Legal settlement 0.0 0.0 (46.4)Restructuring charges 1.5 9.5 12.9Exchange offer costs 0.0 43.4 2.2Gain on sale of real estate and businesses (36.8) (65.1) (42.1)

Adjusted EBITDA 467.8 411.3 351.8Net sales 2,628.7 2,411.2 2,406.9Adjusted EBITDA margin 17.8% 17.1% 14.6%

YTD YTDCash Earnings 2013 2012EBITDA 505.1 423.5Less: Interest expense, net (201.7) (211.9)

Current taxes (9.7) (2.0)Cash Earnings 293.7 209.6

Trailing 12 Months Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3Aggregates Segment Cash Gross Profit 2013 2013 2013 2013 2012 2012 2012 2012 2011 2011 2011 2011 2010 2010 2010 2010 2009 2009Aggregates segment gross profit 413.3 383.0 358.1 342.8 352.1 350.0 338.5 329.5 306.2 284.6 296.4 315.5 320.1 332.2 340.2 345.0 393.3 451.2Agg. Depr., depl., accretion and amort. 224.8 226.3 229.2 234.2 240.7 247.7 255.1 261.8 267.0 272.5 279.3 284.8 288.6 293.1 295.9 298.6 303.9 304.9

Aggregates segment cash gross profit 638.1 609.3 587.3 577.1 592.8 597.6 593.6 591.3 573.2 557.1 575.7 600.3 608.8 625.3 636.1 643.6 697.1 756.1Aggregate tons 145.9 143.6 140.2 139.4 141.0 142.1 145.3 145.8 143.0 142.2 143.0 146.8 147.6 147.4 148.6 146.2 150.9 160.7

Aggregates segment cash gross profit per ton 4.37 4.24 4.19 4.14 4.21 4.20 4.08 4.06 4.01 3.92 4.03 4.09 4.12 4.24 4.28 4.40 4.62 4.70

Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q12009 2009 2008 2008 2008 2008 2007 2007 2007 2007 2006 2006 2006 2006 2005 2005 2005 2005

Aggregates segment gross profit 503.2 594.3 657.6 722.3 775.2 808.2 828.7 846.3 849.7 826.9 819.0 772.8 732.4 690.4 650.0 591.9 565.5 524.1Agg. Depr., depl., accretion and amort. 304.4 302.7 299.8 298.8 283.2 266.4 248.0 228.3 220.8 213.1 206.6 205.1 203.0 202.7 201.6 197.7 194.4 191.8

Aggregates segment cash gross profit 807.6 897.0 957.4 1,021.1 1,058.4 1,074.6 1,076.7 1,074.6 1,070.4 1,040.0 1,031.1 977.8 935.3 893.1 828.7 789.7 759.9 715.9Aggregates tons 172.6 190.8 204.3 217.4 224.4 228.5 231.0 234.5 239.8 246.7 255.4 258.8 263.6 265.3 259.5 255.0 252.6 245.8

Aggregates segment cash gross profit per ton 4.68 4.70 4.68 4.70 4.72 4.70 4.67 4.58 4.46 4.22 4.05 3.78 3.55 3.37 3.20 3.10 3.01 2.91

Net SalesGross profitEarnings from continuing operationsDiluted earnings per share from continuing operation $0.16 $0.47

Additionally, we have presented the impact of the Florida area cement and conrete divestiture as well as the debt purchase to our 2013 full year operating results as if these transactions had occurred on January 1, 2013. This information is provided to enable the reader to isolate the impact of these transactions.

2013 Operating Results Adjusted for Divestiture and Debt Purchase

2,455.7448.70.0(21.8)

Generally Accepted Accounting Principles (GAAP) does not define "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)," "aggregates segment cash gross profit" and "cash earnings." 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. 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, cash earnings 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:

Divestiture Debt

Purchase

(21.2) 20.1 62.1

2,628.7426.9

173.0 0.0As Reported Adjusted

20.8

NotesA 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


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 shipLess 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


NotesA P P E N D I X

South Region Map



Central Region Map



East Region Map



West Region Map


Notes

1200 Urban Center DriveBirmingham, AL 35242-2545Telephone: (205) 298-3000Fax: (205) 298-2963

Other InformationA P P E N D I X

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 WarrenTelephone: (205) 298-3191Email: [email protected]

Independent Auditors:Deloitte & Touche LLPBirmingham, Alabama

Registrar and Transfer Listing:Computershare Shareowner Services LLC

Media Relations:David DonaldsonTelephone: (205) 298-3220Email: [email protected]


Vmc ir handout feb 2014

Investor Relations

Transcript of Vmc ir handout feb 2014