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1st qtrearningsresults13
1. First Quarter 2013 Earnings Results
Earnings Conference Call, May 2, 2013
2. 1Q 2013 Earnings Results – May 2, 2013 2
This document 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 intended 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; the impact of a prolonged economic recession on Vulcan's industry,
business and financial condition and access to capital markets; changes in the level of spending for private residential and 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 Vulcan’s effective tax rate; 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; Vulcan’s increasing reliance on information technology; the potential of goodwill 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.
Important Disclosure Notes – Forward Looking Statements
3. 1Q 2013 Earnings Results – May 2, 2013
First Quarter Highlights
Business segments in line with expectations, outlook reaffirmed
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• Shipment levels in line with our expectations
• Broad-based improvement in aggregates pricing, up 5 percent overall
• Higher TTM cash gross profit per ton of aggregates, despite a 5 percent
decline in first quarter shipments
• Non-aggregates gross profit improved $5 million
• Trends in private sector construction continue to improve
• Contract awards for public highways, a leading indicator of future
construction activity, turned positive in the first quarter
4. 1Q 2013 Earnings Results – May 2, 2013
First Quarter Aggregates Volumes
Last year’s unseasonably mild winter distorts year-over-year comparisons
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Vulcan Operations in:
YoY %
Volume Chg. Precipitation / Temperature
1Q’13 1Q’12 1Q’13 1Q’12 1Q’11
East Coast & Central U.S. (16%) +9%
Wet /
Normal
Dry /
Warm
Dry /
Normal
Gulf Coast, Southwest &
West U.S. +13% +13%
Dry /
Normal
Dry /
Warm
Dry /
Normal
Total (5%) +10%
Source: Temperature and Precipitation from National Climatic Data Center
5. 1Q 2013 Earnings Results – May 2, 2013
Aggregates Performance
Higher unit profitability despite 5 percent decline in volumes
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Trailing Twelve Months Cash Gross Profit Per Ton of Aggregates
Note: Please see Non-GAAP reconciliations at the end of this presentation.
+2%
6. 1Q 2013 Earnings Results – May 2, 2013
Non-Aggregates Performance
Concrete and cement volumes recovering from cyclical lows
• Gross profit improved in each of the 3 segments.
• Concrete and Cement segments have benefitted from increased private construction activity.
• Asphalt materials margin increased 19 percent versus prior year.
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Year-Over-Year Change in First Quarter Volumes
-4%
6%
14%
Asphalt Tons Concrete Cyds Cement Tons
7. 1Q 2013 Earnings Results – May 2, 2013
Amounts in Millions, except ratios 2013 2012 2011
Total Debt 2,666$ 2,814$ 2,733$
Cash and Cash Equivalents 188$ 191$ 63$
Net Debt 2,478$ 2,623$ 2,670$
Net Debt / TTM Adjusted EBITDA 6.4 6.7 7.5
Net Debt / Total Capital 38.8% 40.0% 40.3%
As of March 31
Balance Sheet
Strengthening the balance sheet through debt reduction
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8. 1Q 2013 Earnings Results – May 2, 2013
End Markets - Residential
Most Vulcan-Served states have seen double-digit increases in starts
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Trailing Twelve Months of Total Starts, including Single-family and Multi-family. Source: McGraw-Hill and Company Estimates
• TTM U.S. housing starts up 27% versus the prior year
• Vulcan-served states now account for more than 60% of all starts
• TX, FL and CA starts more than next 10 states combined
9. 1Q 2013 Earnings Results – May 2, 2013
End Markets – Private Nonresidential
ABI has been above 50 for 8 consecutive months
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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. A value greater than 50 indicates an increase in activity.
10. 1Q 2013 Earnings Results – May 2, 2013
End Markets – Private Nonresidential
Contract awards in the U.S. up 16% year-over-year, with room to grow
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Trailing Twelve Months. Source: McGraw-Hill and Company Estimates
11. 1Q 2013 Earnings Results – May 2, 2013
End Markets - Highways
MAP-21 beginning to provide stability and predictability in highways
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Source: McGraw-Hill and Company Estimates
First increase
since January 2011
ARRA Signed into Law - Feb’09
SAFETEA-LU Expires September ’09. No Federal Hwy Bill MAP21 – July ’12
12. 1Q 2013 Earnings Results – May 2, 2013
Full Year 2013 Outlook – Commentary
On track for earnings improvement
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• Demand from private construction expected to grow, led by residential
• Residential demand should increase approximately 20 percent
• Private nonresidential demand should increase 8 percent
• Aggregates volume up 1 to 5 percent
• In line with prior guidance
• Growth weighted towards 2H of 2013
• Driven mostly by continued recovery in private construction
• Aggregates pricing up approximately 4 percent
• Broad-based pricing gains expected to continue
• Earnings improvement expected in each non-aggregates segment
