Florida Rock Industries — Merger or Acquisition (February 2007)
32 slides from Florida Rock Industries's merger presentation, Feb 27, 2007
Slide 1: Florida Rock Industries, Inc.
Florida Rock Industries, Inc.
Slide 2: Forward-looking statements
This presentation and discussion may include comments or information about the future of Florida Rock Industries, Inc. and subsidiaries, including plans, expectations and, in some cases, predictions. These forward-looking statements are based on management's beliefs and assumptions and are, by their
Slide 3: Solicitation material and proposed transaction notice
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 STATEMENT AND ANY OTHER R
Slide 4: Company Overview
Founded in 1929 by the Thompson S. Baker Family: Baker Family owns approx. 26% of the Company. One of the Nation's largest producers of aggregates. Major supplier of Ready Mix Concrete in Florida, south Georgia, Virginia and Maryland (Ranked #1 or #2 in most markets). Major Florida cement supplier t
Slide 5: Business Segments
Business Segments
Slide 6: Aggregate & Cement Facilities
Corporate Headquarters Jacksonville, Florida Aggregate & Cement Facilities LOCATIONS INCLUDE: 21 Stone Quarries 15 Sand Plants 11 Distribution Terminals 1 Calcium Products Plants 1 Cement Plant 2 Cement Import & Grinding Facilities 2.5 Billion tons of Reserves
Slide 7: Concrete Facilities
LOCATIONS INCLUDE: 114 Ready-mix Plants 13 Concrete Block Plants 1 Prestress Plant 1 Precast Plant 1 Brickyard Corporate Headquarters Jacksonville, Florida Concrete Facilities
Slide 8: Key Strengths: Reasons for Confidence
Key Strengths Reasons for Confidence Strong Position in the Most Attractive US Building Materials Markets Location and Quality of Reserves Low Cost Producer High Quality Balance Sheet and Strong Internal Cash Flow Great Track Record
Slide 9: Sales Growth History (excluding freight)
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 3-D Column 398.7 456.8 492.5 579.3 647.8 696.6 707.5 728.7 926.6 1126.6 1328.3 (Amounts in Millions) CAGR +12.8 % CAGR +13.8% +17.9% Sales Growth History (excluding freight)
Slide 10: Earnings Growth History
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 3-D Column 27 37.1 38.9 46.6 59.7 69.3 68.9 75.9 113.7 157.7 211.8 (Amounts in Millions) CAGR +22.9% CAGR +25.0% +34.3% Earnings Growth History
Slide 11: Earnings Per Share - Diluted
2002 2003 2004 2005 2006 Nine Months 1.01 1.11 1.52 2.27 3.11 Asset Sales 0.04 0.05 0.2 0.1 0.05 Earnings Per Share - Diluted Twelve Months Ended September 30 $1.06 $1.16 $1.72 $2.36 $3.16 Gain on Asset Sales +33.7% CAGR 31.4%
Slide 12: 2006 Sales by Market
Florida Georgia/Western Tennessee Mid-Atlantic North Carolina East 977485 116466 6966 382061 6029 2006 Sales by Market
Slide 13: Asset Sale Contribution to Annual Earnings
2002 2003 2004 2005 2006 67.086 73.589 105.256 153.7 208.2 Asset Sales 1.81 2.31 8.41 4 3.6 $75.9 $157.7 $68.9 $113.7 (Amounts in Millions) Asset Sale Contribution to Annual Earnings 5-Year Comparative $211.8
Slide 14: Return on Equity (ROE) 5-Year Comparative
2002 2003 2004 2005 2006 YTD 0.144 0.139 0.19 0.23 0.254 Return on Equity (ROE) 5-Year Comparative
Slide 15: Net Cash Provided by Operating Activities 5-Year Comparative
2002 2003 2004 2005 2006 Replacement Cap Ex 20.8 27.2 48 48.8 54.2 Free Cash Flow 123.251 106.8 149 176.2 237.5 $134 M $144 M $197 M (Amounts in Millions) $225 M Net Cash Provided by Operating Activities 5-Year Comparative $292 M
Slide 16: Capital Expenditures 5-Year Comparative
2002 2003 2004 2005 2006 Land 5.8 4.36 33.862806 26.7 15.8 Replacements 20.8 27.179 48 48.8 54.2 New Projects 22.9 138.4 22.8 64.6 109.8 $49.8 $170.0 $104.7 (Amounts in Millions) $140.1 Capital Expenditures 5-Year Comparative (Includes Acquisitions) $179.8
Slide 17: Capital Expenditures Annual Comparison by Category FY 2007
FY 2007 Replacements 74.8872 New Projects 233.4952 Land 35.714 Acquisitions Capital Expenditures Annual Comparison by Category FY 2007 (Budget) 21.8% $344.1 10.4% 67.9%
Slide 18: Annual Depreciation Expense
2001 2002 2003 2004 2005 2006 2007B Depr amd Amort 62.6 66.152 63.126 63.628 64.6 74.7 84.1 (Amounts in Millions) Annual Depreciation Expense
Slide 19: First Quarter Highlights Fiscal Year 2007
First Quarter Highlights Fiscal Year 2007
Slide 20: Sales Growth Comparison (First Quarter)
2003 2004 2005 2006 2007 3-D Column 160.741 220.308 245.34 297.834 287.059 ($ in Millions) CAGR 15.61% Sales Growth Comparison (First Quarter Ended December 31) (excluding freight)
Slide 21: Earnings Per Share - Diluted First Quarter Comparison
2003 2004 2005 2006 2007 YTD 0.1953 0.3606 0.4526 0.59 0.63 Gain on Sale of Real Estate 0.13 0.04 0.04 Earnings Per Share - Diluted First Quarter Comparison
Slide 22: Financial Condition Comparison
Financial Condition Comparison (in millions except per share)
Slide 23: Construction Data for Residential and Non-Residential in Florida Rock Markets
(Square Feet in Thousands) Construction Data for Total Residential and Non-Residential in Florida Rock Markets Annual Comparison - October to September Consolidated Source: Dodge Construction Reports FY 2004 FY 2005 FY 2006 Residential 551868 643030 617194 Non-Residential 168432 180198 177831 720,30
Slide 24: Construction Data October 2005 - October 2006 Comparative
Construction Data for Total Residential and Non-Residential in Florida Rock Markets October 2005 -October 2006 Comparative Source: Dodge Construction Reports (Square Feet in Thousands) FY2005 Non-Res FY2005 Res FY2006 Non-Res FY2006 Res FY2007 Non-Res FY2007 Res
Slide 25: Florida Rock Residential vs All Other Ready Mix Concrete Sales Data
Florida Rock Residential vs All Other Ready Mix Concrete Sales Data Annual Comparison - FY 2005 / FY 2006 Consolidated FY 2005 FY 2006 Residential 3206.0704 3198.90875 Non-Residential 3795.1877 4054.83455 (Yards in Thousands)
Slide 26: Ready Mix Concrete Sales Data Fiscal Year to Date
Florida Rock Residential vs All Other Ready Mix Concrete Sales Data Fiscal Year to Date Comparative (Yards) FY2005 Non-Res FY2005 Res FY2006 Non-Res FY2006 Res FY2007 Non-Res FY2007 Res
Slide 27: Volume vs Price per Yard - Concrete
Volume vs Price per Yard - Concrete Annual Comparison - Nine Months Trailing Apr May Jun Jul Aug Sept Oct Nov Dec 2005 637329 642073 673733 623288 716216 665075 587793 617732 571646 2006 653477 694739 632218 570487 636318 520635 578345 498564 469579 (Yards) April May June July August September Octob
Slide 28: Volume vs Price per Unit - Block
Apr May Jun Jul Aug Sept Oct Nov Dec 2005 7.408245 7.347073 6.947128 6.47951 8.040311 7.441197 6.651611 7.455124 7.772595 2006 7.250796 7.531345 6.947288 5.957893 5.917162 5.16889 5.687261 4.833743 4.371925 (Block in millions) Volume vs Price per Unit - Block Annual Comparison - Nine Months Trailing
Slide 29: Volume vs Price per Ton - Cement/Calcium
Apr May Jun Jul Aug Sept Oct Nov Dec Calcium Products 25311 23152 18111 20754 16767 18608 22958 23865 22403 2005 218053 216684 220035 187792 198087 203632 191770 192118 198474 2006C 21672 26208 25526 25500 25087 24859 25573 25860 22074 2006 194495 203755 194430 164229 181222 179610 205217 146153 119
Slide 30: Florida DOT Construction Spending FY2003 - 2007
NOTE: *2003, 2004, 2005 Spending was budgeted to be $2.1B, $3.8B, $3.7B respectively 2003-2005 are Actual Construction Spending 2006, 2007 Budgeted Construction Spending as of July 2006 2003 2004 2005 2006 2007 Historical Spending 1937 2630.7 3000 4370 5301 $2,631* $3,004* Source: Florida Department
Slide 31: Real Population Growth by State
Source: US Census Bureau Note: This chart reflects the projected real growth over the proceeding five-year period. Real Population Growth by State
Slide 32: Vulcan Materials to Acquire Florida Rock Industries
$4.6 billion agreed transaction price. FRK shareholders can elect to receive 0.63 shares of the new holding company or $67.00 in cash, subject to proration, such that in the aggregate the transaction will be 70% cash and 30% converted stock. Key Statistics: Resulting debt of $3.7 billion (50% debt-t
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