Florida Rock Industries — Infrastructure and Basic Industry Conference, Davenport & Company 2007
31 slides from Florida Rock Industries's conference presentation, Feb 28, 2007
Slide 1: Infrastructure and Basic Industry Conference
Infrastructure and Basic Industry Conference Davenport & Company February 27, 2007
Slide 2: Important Information
Important Information This document may be deemed to be solicitation material in respect of the proposed transaction. In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. SHAREHOLDERS OF FLORIDA ROCK ARE ENCOURAGED TO READ THE REGISTRATION STA
Slide 3: Strategic Objectives to Add Value
Strategic Objectives to Add Value Cumulative shareholder return with dividends reinvested for period ending February 16, 2007. 1 Year 3 Year 5 Year 8 Years Since CalMat Acquisition VMC 0.44 1.54 1.71 2.04 S&P 500 0.15 0.34 0.44 0.28 Leveraged coast-to-coast footprint Large, high growth U.S. markets
Slide 4: Financial Highlights, 2006
Financial Highlights, 2006 Aggregates pricing +14.7% shipments -1.6% Margin expansion in all three major product lines Unit cost for diesel fuel reduced pretax earnings approximately $14 million Significant increase in purchase of common stock Received ECU earn-out payment of $128 million (Millions,
Slide 5: Vulcan - Outstanding Financial Performance
Vulcan - Outstanding Financial Performance Note: Net Sales are $ in Millions. EPS is from Continuing Operations and adjusted for stock splits. Growth rates calculated by linear regression analysis of the logarithms of data. '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 EPS 1.19 1.53 2.02 2.13 2.2 2.26
Slide 6: Strategically positioned in the fastest growing markets
Source: National Planning Association, November 2006 Strategically positioned in the fastest growing markets Top 10 Aggregates-Served State Metropolitan areas projected to experience the largest absolute population growth 2000 - 2010 Aggregates-Served State
Slide 7: Strategically positioned in the fastest growing markets
Strategically positioned in the fastest growing markets Georgia Florida Texas California 2010 1816 3745 3896 4142 2020 2032 4341 4422 4796 2030 2262 4792 4948 5419 Top Four U.S. Growth States from 2000 to 2030 (Projected Absolute Population Growth Over 10-Year Periods) (in 000's) Vulcan States Growi
Slide 8: Aggregates - U.S. Market Fundamentals Are Attractive
Location and quality of reserves are critical Primarily local markets due to high weight-to-value ratio Highly fragmented industry Relatively stable demand due to public funding Diverse end markets Widely used in downstream products; limited product substitution Aggregates - U.S. Market Fundamentals
Slide 9: Future Supply - location and quality of reserves are critical
Future Supply - location and quality of reserves are critical Aggregates Reserves Billions of Tons 1996 Vulcan Reserves Shipments Additions 2006 Vulcan Reserves 7500 5108 5108 11400 2392 6318 6.3 - -2.4 7.5 11.4
Slide 10: Differing characteristics of the major end uses for aggregates
Differing characteristics of the major end uses for aggregates Major End Market Aggregate Intensity Demand Drivers Examples of Aggregate Use Residential Low Employment, interest rates Streets and other infrastructure, foundation, driveways Non-residential Low/Medium Employment, income, interest rate
Slide 11: End Market Demand - U.S. Residential Construction
End Market Demand - U. S. Residential Construction Sin. Fam. Mtg. Rte. '76 1162.3 8.87 1977 1450.9 8.84 1978 1433.4 9.64 1979 1194.1 11.19 1980 852.1 13.77 1981 705.3 16.63 1982 662.6 16.08 1983 1067.5 13.23 '84 1084.1 13.87 '85 1072.3 12.42 '86 1179.5 10.18 1987 1146.3 10.2 1988 1081.4 10.34 1989 1
Slide 12: End Market Demand - U.S. Private Non-Residential Construction
End Market Demand - U.S. Private Non-Residential Construction Billions of '96$ 1976 141.75 1977 142.08 1978 158.06 1979 177.01 1980 179.05 1981 178.96 1982 174.61 1983 166.88 '84 194.71 '85 217.61 1986 205.14 1987 198.57 1988 199.83 1989 206.4 1990 203.77 1991 175.52 1992 163.91 1993 162.68 '94 168.
Slide 13: Relatively stable demand from public construction
Relatively stable demand from public construction U.S. Aggregates Volume Public Construction Put-in-Place Billions of tons (L) Billions of '96$ (R) Sources: US Department of Commerce, US Geological Survey. Note: Aggregates demand for 2006 estimated using 3Q 2006 Mineral Industry Survey.
Slide 14: End Market Demand - Federal Funding Levels for Highways
End Market Demand - Federal Funding Levels for Highways Billions of U.S. $ Includes Highway Obligation Limitation plus Exempt Contract Authority. Excludes Mass Transit Obligations. Avg. Annual Amount (FY98'-04') vs (FY05'-09') VMC served states +32% Other states +28% Total U.S. +30% Year 1 0.27 Year
Slide 15: Long term outlook for transportation construction in California remains promising
Long term outlook for transportation construction in California remains promising Proposed FY 2008 Budget allocations at record level for new transportation projects FY 2008B $5.8 billion FY 2007E $4.6 billion FY 2006A $4.2 billion FY 2005A $0.9 billion SAFETEA provides 34% increase in average fundi
Slide 16: Florida Rock Transaction Summary
Florida Rock Transaction Summary Structure One-step merger with cash/stock election, subject to pro-ration Merger Consideration Total consideration: approximately $4.6 billion Cash: $67.00 per share for 70% of the shares Stock: 0.630 fixed exchange ratio for 30% of the shares Total blended cash and
Slide 17: Strategic Rationale for Florida Rock Acquisition
Strategic Rationale for Florida Rock Acquisition Logical, natural business fit Enhances Vulcan's position in fast growing, highly-attractive Florida markets Expands our geographic footprint and further diversifies regional exposure Builds on our successful aggregates-focused business mix in top grow
Slide 18: Strategic Rationale for Florida Rock Acquisition
Strategic Rationale for Florida Rock Acquisition Logical, natural business fit Enhances Vulcan's position in fast growing, highly-attractive Florida markets Expands our geographic footprint and further diversifies regional exposure Builds on our successful aggregates-focused business mix in top grow
Slide 19: Strategic Rationale for Florida Rock Acquisition
Strategic Rationale for Florida Rock Acquisition Logical, natural business fit Enhances Vulcan's position in fast growing, highly-attractive Florida markets Expands our geographic footprint and further diversifies regional exposure Builds on our successful aggregates-focused business mix in top grow
Slide 20: Outstanding Financial Performance By Both Companies
Outstanding Financial Performance By Both Companies Note: Net Sales are $ in Millions. EPS is from Continuing Operations and adjusted for stock splits. Growth rates calculated by linear regression analysis of the logarithms of data. '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 Sales 398.7 456.6 492.3
Slide 21: Outstanding Financial Performance By Both Companies
Outstanding Financial Performance By Both Companies Note: Net Sales are $ in Millions. EPS is from Continuing Operations and adjusted for stock splits. Growth rates calculated by linear regression analysis of the logarithms of data. '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 EPS 1.19 1.53 2.02 2.13
Slide 22: Capital Structure Benefits
Capital Structure Benefits Vulcan capital structure at closing contemplates $3.7 billion of total debt Total Debt / total capital ratio to be approximately 51% at close Anticipate average annual EBITDA of more than $2 billion over next 3 years (2008 - 2010), enabling rapid debt reduction Target tota
Slide 23: Future Supply - location and quality of reserves are critical
Future Supply - location and quality of reserves are critical Vulcan 45 Florida Rock 56 Aggregates Reserves Billions of Tons** Average Reserve Life Years* * Calculated using FY06 sales volumes 1996 Vulcan Reserves Shipments Additions 2006 Vulcan Reserves Florida Rock Reserves Pro Forma Combined 7500
Slide 24: Aggregates-Focused Business
Aggregates-Focused Business $4.3 Billion 2006 Pro Forma Combined Net Sales Aggregates* 60 Concrete 22 Cement 5 Other 3 Asphalt 10 All Aggregates** 88 Cement 5 Other 1 Asphalt and Concrete*** 6 **Aggregates sales plus asphalt and concrete sales that include company aggregates ***Asphalt and concrete
Slide 25: Vulcan's Coast-to-Coast Footprint
Vulcan's Coast-to-Coast Footprint Vulcan Aggregates, Asphalt, and Ready Mix Vulcan Aggregates, Asphalt, and Ready Mix Vulcan Aggregates, Asphalt, and Ready Mix Vulcan Aggregates, Asphalt, and Ready Mix Vulcan Aggregates, Asphalt, and Ready Mix Vulcan Aggregates, Asphalt, and Ready Mix Vulcan Aggrega
Slide 26: Florida Rock Footprint
Florida Rock Foot; E50 You, 19567006
Slide 27: Expanded Geographic Footprint
Expanded Geographic Footprint Vulcan Aggregates, Asphalt, and Ready Mix Vulcan Aggregates, Asphalt, and Ready Mix Vulcan Aggregates, Asphalt, and Ready Mix Vulcan Aggregates, Asphalt, and Ready Mix Vulcan Aggregates, Asphalt, and Ready Mix Vulcan Aggregates, Asphalt, and Ready Mix Vulcan Aggregates,
Slide 28: Strategically Positioned in High Growth Markets
Georgia Florida Texas California 2010 1816 3745 3896 4142 2020 2032 4341 4422 4796 2030 2262 4792 4948 5419 Strategically Positioned in High Growth Markets Vulcan strongly established in California and Texas Acquisition broadens position in Florida and Georgia Florida population, employment and hous
Slide 29: Presentation Highlights
Presentation Highlights Throughout its 50-year history, Vulcan has a proven track record of adding value for its shareholders 2006 was another year of record results and earnings growth Strategically positioned in high growth markets The announced combination of Vulcan and Florida Rock is a strong s
Slide 30: Infrastructure and Basic Industry Conference
Infrastructure and Basic Industry Conference Davenport & Company February 27, 2007
Slide 31: Appendix - EBITDA Reconciliation
Appendix - EBITDA Reconciliation Reconciliation of Net Cash Provided by Operating Activities to EBITDA (FY 2006 $millions) Vulcan Florida Materials Rock Net Cash Provided by Operating Activities $579 $292 Changes in operating assets and liabilities before initial effect of business acquisitions and