Eagle Materials Inc · NYSE:EXP
Eagle Materials — Longbow Research Construction Materials Conference (February 2009)
49 slides from Eagle Materials's conference presentation, Feb 19, 2009
Slide 1: Eagle Materials
Eagle Materials
Slide 2: Longbow Research Construction Materials Conference
Longbow Research Construction Materials Conference February 19, 200 9 Exhibit 99.1
Slide 3: Forward Looking Statement
Forward Looking Statement This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified b
Slide 4: Current Business Environment
1. Current Business Environment 2. Industry Outlook 3. Eagle at a Glance
Slide 5: Current Business Environment
New residential construction continues to weaken Non-residential construction’s near term outlook is weak Public construction varies from state to state Eagle Materials’ Response Intense focus on quality and customer service Minimize capital spending but maintain plants in like new condition Reduce/
Slide 6: Current Business Environment
1. Current Business Environment 2. Industry Outlook 3. Eagle at a Glance
Slide 7: nag
nag E77 JEagle 1Vli Materials
Slide 8: U.S. Cement Industry Update
U.S. Cement Industry Update Current Supply/Demand Dynamics Demand anticipated to decline approximately 15% in calendar Due to the decline in demand, several plant closures have been announced Announced delays of expansion projects Landed cost of imported cement has been dramatically reduced Imports
Slide 9: Cost of imported cement (through September 2008)
Cost of imported cement (through September 2008) Source: Portland Cement Association; Company estimates Current landed price – Mid-$50’s/ton Asian Financial Crisis $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 Landed price of Asian imports to U.S. Handymax - Southeast Asia to U.S. Gulf $0 $10 $20 $30
Slide 10: U.S. Cement Industry Consumption
Source: PCA Data and Company estimates U.S. Cement Industry – Consumption 30% imports 7% imports Calendar Year Imports
Slide 11: Public Construction Spending – Value Put in Place
Public Construction Spending – Value Put in Place Source: Portland Cement Association (Projection from Fall 2008). ? $50 $100 $150 $200 2009E
Slide 12: Architectural Billings Index (ABI)
Architectural Billings Index (ABI) Source: American Institute of Architects As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag between architectural billings and construction spending. Any score above 50 indicates an increase in billin
Slide 13: Private Non-Residential Construction Spending – Value Put in Place
Private Non-Residential Construction Spending – Value Put in Place $0 $50 $100 $150 $200 $250 $300 $350 Source: U.S. Bureau of the Census; PCA (Projection from Fall 2008) -23%
Slide 14: Wind Farms
Wind Farms
Slide 15: Wind Farms
Wind Farms
Slide 16: Our Cement Operations
Our Cement Operations Eagle Operations Overview Approximately 3.1 million tons of capacity 3.1% market share (12th in North America) Low cost producer Exceptional quality and customer service Cement Plants Cement Terminals Markets Served
Slide 17: Eagle
Eagle Ft =
Slide 18: Wallboard Industry Update
Wallboard Industry Update Wallboard demand was approximately 25 billion square feet (BSF) in calendar 2008 (down 31% from the 2005 peak) We expect demand to decline nearly 20% in calendar 2009 New plant capacity increases are operational All new plants were built in the East Older plants are closing
Slide 19: Residential Construction Near Term Outlook
Residential Construction Near Term Outlook Extreme low pace of new home construction Overhang of existing homes and foreclosures continues to put downward pressure on pricing and new housing starts Access to 30-year fixed-rate traditional mortgages is limited; however, interest rates are at historic
Slide 20: U.S. Single Family Housing Starts 1972-2008
U.S Single Family Housing Starts – 1972-2008 1,000 1,200 1,400 1,600 1,800 2,000 2,200 Source: U.S Bureau of the Census; Eagle estimates Wallboard consumption by type of construction: -Single Family – approx. 10,000 sf -Multi Family – approx. 4,000 sf
Slide 21: Home Supply
Home Supply – 1972 - Source: U.S Bureau of the Census Months Supply of New Unsold Homes (L) Actual Inventory of New Unsold Homes
Slide 22: Home Ownership Rates
Home Ownership Rates – 1972 – Source: U.S. Bureau of the Census Total occupied homes 111.8 million Owner occupied 75.5 million Renter occupied 36.3 million 60.00% 65.00% 70.00% Home Ownership Rates Total occupied homes 111.8 million Owner occupied 75.5 million Renter occupied 36.3 million
Slide 23: Ratio of Median Existing Single Family Home Price to Median Income
Ratio of Median Existing Single Family Home Price to Median Income – 1975-2008 Source: National Association of Realtors Average Ratio – 2.9 Ratio in December - 2.9 3.6 3.9 3.9 3.7 3.3 - 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
Slide 24: Mortgage Rates
Year Mortgage Rates – – (January) Source: Freddie Mac Record low
Slide 25: Unemployment Rate
Unemployment Rate – – (January) Source: Department of Labor Current Month
Slide 26: New Home or Existing Home?
New Home OR Existing Home?
Slide 27: U.S. Demand for Gypsum Wallboard (BSF)
U.S. Demand for Gypsum Wallboard (BSF) Source: Gypsum Association; Eagle estimates 10.7 13.1 15.4 16.4 16.7 14.1 13.8 13.1 16.8 18.3 19.4 20.4 20.6 20.6 20.9 20.5 18.3 20.2 21.4 23.2 23.1 24.7 25.5 27.0 29.1 28.2 29.3 29.8 31.8 34.0 36.2 35.0 30.2 24.8 20.0 - 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0
Slide 28: Wallboard Industry Capacity Share
Materials Capacity | Capacity Hl Share 1 | use i 28% | RS ¢¥ [2 | National Gypsum i 24% | 4 tP 3 | Koch Industries (tka Georgia Pacific) 13% | et [4 | CenainTeed 14% | U A 5 | American Gypsum (Eagle Materials) fo Subtotal | | RS 16 | LaFarge 3411 ¢ B Temple Inland 19) : ' 2; 8 | Pabeo L ae » Subtota
Slide 29: Wallboard Industry Capacity Expansions/Closures
Wallboard Industry Capacity Expansions/Closures INDUSTRY CAPACITY ADDITIONS CAPACITY CLOSURES EAGLE PLANTS Capacity Summary (in BSF) 1/1/07 37.9 Additions 5.7 Closures (7.1) Current 36.5
Slide 30: Eagle's Wallboard Operations
Eagle’s Wallboard Operations American Gypsum Operations Overview 18-year history Nearly 4.0 billion square feet of capacity 10% market share (5th in U.S.) Lowest cost producer Exceptional customer service Premium quality Wallboard Plants Reload/Distribution Yards Core Markets Served
Slide 31: Materials
Materials
Slide 32: Gypsum Paperboard Industry Update
Gypsum Paperboard Industry Update Nearly 100% vertically integrated One notable exception – CertainTeed – • 40% of Republic Paperboard’s capacity supplies 65% of CertainTeed’s U.S. paper needs Wallboard industry’s paperboard capacity is mostly high cost cylinder machines that produce high basis weig
Slide 33: Materials
Materials wo e e
Slide 34: Materials
Materials
Slide 35: Our Concrete and Aggregates Operations
Eagle’s Operations Overview Strong competitive position in local markets Capacity • Aggregates – 5.5 million tons • Concrete – 850,000 cubic yards Complimentary to Eagle’s Cement business Organic growth opportunities Vast aggregates reserves of over 1 billion tons in Northern California Exceptional
Slide 36: Current Business Environment
1. Current Business Environment 2. Industry Outlook 3. Eagle at a Glance
Slide 37: Current Business Environment
New residential construction continues to weaken Non-residential construction’s near term outlook is weak Public construction varies from state to state Eagle Materials’ Response Intense focus on quality and customer service Minimize capital spending but maintain plants in like new condition Reduce/
Slide 38: Construction Demand Drivers
Construction Demand Drivers • Public Infrastructure • New Residential Construction • New Non-Residential Construction • Repair and Remodel Construction Public Infrastructure , 58% New Non- Residential, 18% New Residential, 17% Other, 6% American Gypsum’s Wallboard Eagle’s Cement New Residential, 37%
Slide 39: Our Cement Production and Cost
Our Cement Production and Cost Total Manufactured Tons Produced (L) Manufactured Cost per Equivalent Ton (R) * - Includes effect of downtime for Illinois Cement start-up Energy costs up 50% Since FY04
Slide 40: American Gypsum's Wallboard Production and Cost
American Gypsum’s Wallboard Production and Cost * Before SG&A ** Includes effect from start-up of new plant in Georgetown, South Carolina
Slide 41: Financial Highlights
Financial Highlights ($ in millions) $429 $503 $617 $860 $922 $750 $610 $0 $200 $400 $600 $800 $1,000 $1,200 2009E For Fiscal Year Ending March 31 * Before Corporate G&A Revenues Operating Earnings * $102 $115 $172 $264 $330 $184 $105 $0 $100 $200 $300 $400 2009E
Slide 42: Senior Note Purchase
Dec. 31, Purchase of Senior Notes After Note Purchase Senior Notes $ 400.0 $ (100.0) $ 300.0 Revolver - 95.0 95.0 Total Debt $ 400.0 $ (5.0) $ 395.0 Cash Balance $ 47.8 $ 47.8 Quarterly Interest on Debt $ 5.9 $ 4.9 Senior Notes Revolver - No maturities until 2012 - Committed through June 2011 - Wtd
Slide 43: We Continue to Outperform the Group
We Continue to Outperform the Group * -4.1% 3.1% 6.3% 11.2% 13.7% 15.2% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% USG Cemex TXI (1) Vulcan Eagle Martin Marietta EBIT Margins (TTM as of 12/31/08) • Based on comparison of EBIT Margins (TTM) for each of the listed companies (1) TTM as of 11/30/08
Slide 44: Why Eagle Materials likes its position in bad times and in good times
Why Eagle Materials likes its position in bad times and in good times Premium quality products Exceptional customer service Strong long-term customer relationships Low overhead Extremely efficient modern, low-cost manufacturing plants Smart, hard working, technologically proficient employees Solid b
Slide 45: Question & Answer
Eagle Materials Inc. Question & Answer
Slide 46: Eagle Materials
Eagle Materials
Slide 47: Longbow Research Construction Materials Conference
Longbow Research Construction Materials Conference February 19, 2009
Slide 48: Contact Information
Contact Information Steve Rowley, President and CEO Telephone: 214-432-2020 Email: srowley@eaglematerials.com Mark Dendle, Executive Vice President and CFO Telephone: 214-432-2011 Email: mdendle@eaglematerials.com Craig Kesler, Vice President - Investor Relations and Corporate Development Telephone:
Slide 49: Major Facilities
MAJOR FACILITIES CONCRETE GYPSUM WALLBOARD PLANTS. _ CEMENT PLANTS PAPERBOARD MILL AND AGGREGATES PLANTS AMERICAN GYPSUM COMPANY ILLINOIS CENENT COMPANY LLC REPUBLIC PAPERBOARD CENTEX MATERIALS LiC Abuquerqe, ew Mexico Lal, lino COMPANY Lic Austin and Buda, Texas Bera New Mexko—yguytan cenent couran
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