Americas Materials Divisional Profile Tom Hill

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1 Americas Materials Divisional Profile Tom Hill 1

2 Americas Materials Financials $m US States # 1 Asphalt # 4 Aggregates Sales 3,202 2,905 2,837 Operating Profit Avg Net Assets 3,036 2,685 2,338 Operating Margin 10.3% 10.9% 10.9% Top 10 readymixed concrete 2003 Sales 33% 15% New England 25% 15% 2003 Op Profit 16% New York / New Jersey Central 22% West 36% 38% 2

3 Americas Materials - Organisation Chief Executive Officer Tom Hill Finance Glenn Culpepper Government Relations John Hay Development Michael Brady Chief Operating Officer Mark Towe New England Division Randy Pike NY / NJ Division Chris Madden Central Division Don Eshleman West Division Bill Sandbrook 3

4 Americas Materials - Development Sales US$m Tilcon New England NY/NJ Development Spend, Sales and EBITA Thompson McCully Michigan Shelly Ohio Mt Hope NJ EBITA/Dev Spend US$m US Aggregates West/Central SE Johnson Ohio/Michigan # of Deals Acquistion Spend Sales EBITA 4

5 Regional Review New England 5

6 New England Maine Maine New New Hampshire Hampshire Vermont Vermont Massachusetts Massachusetts Connecticut Connecticut Rhode Rhode Island Island 2003 Sales $453m Operating Margin c 11% Aggregates (m tons) 19.8 Asphalt (m tons) 7.6 Readymixed concrete (mcyds) 0.4 Strategy Strategy Mature Mature market market Bolt-on Bolt-on acquisitions acquisitions still still available available Campaign Campaign for for improved improved paving paving programs programs 6

7 Regional Review New York / / New Jersey 7

8 New York / New Jersey New New York York New New Jersey Jersey 2003 Sales $604m Operating Margin c 12% Aggregates (m tons) 29.3 Asphalt (m tons) 7.0 Readymixed concrete (mcyds) 0.6 Strategy Strategy Enhance Enhance strong strong NY NY Metro Metro // New New Jersey Jersey market market positions positions through through further further bolt-ons bolt-ons Expand Expand Upstate Upstate New New York York businesses businesses 8

9 Regional Review Central 9

10 Central Michigan Michigan Ohio Ohio Pennsylvania Pennsylvania Delaware Delaware West West Virginia Virginia Tennessee Tennessee Alabama Alabama Georgia Georgia 2003 Sales $1,132m Operating Margin c 11% Aggregates (m tons) 54.3 Asphalt (m tons) 15.1 Readymixed concrete (mcyds) 0.6 Strategy Strategy Manage Manage impact impact of of higher higher energy energy costs costs Continued Continued vertical vertical integration integration of of operations operations in in MI, MI, OH, OH, WV WV Many Many further further bolt-on bolt-on opportunities opportunities 10

11 Regional Review West 11

12 West Washington Washington Utah Utah New New Mexico Mexico Oregon Oregon Montana Montana South South Dakota Dakota Nevada Nevada Wyoming Wyoming Nebraska Nebraska Idaho Idaho Colorado Colorado Iowa Iowa 2003 Sales $1,013m Operating Margin c 8% Aggregates (m tons) 35.4 Asphalt (m tons) 6.1 Readymixed concrete (mcyds) 5.4 Strategy Strategy Expand Expand sucessful sucessful readymix readymix business business in in the the Mountain Mountain Region Region Develop Develop new new opportunities opportunities in in Northwest, Northwest, Iowa Iowa and and upper upper Midwest Midwest 12

13 Highway Funding Backdrop Infrastructure including highway construction accounts for c 65% of Divisional sales Federal Govt accounts for c50% of highway investment: States & Local c50% Highway funding popular issue with politicians and public; Car is King culture Americans are growing more dependent on roads Many roads are in poor or mediocre condition As congestion and conditions worsen, political support increases 13

14 Highway Funding Backdrop Federal funding has increased historically Highway Program Expenditures (US $BN) Year 14

15 Highway Funding Backdrop State Highway Funding Federal projects require state to fund a portion of the project Many states have faced recent deficits; improving economy easing the pressures Federal Highway Funding TEA-21 expired September 30th funding $33.6 bn (+7% on 2003 level); 2005 funding $34.5 bn (+3% on 2004 level) Expect final passage of TEA-21 renewal in Spring 2005 c$290bn total 6 year Transportation bill seems likely Would lead to average $37 - $40bn per year for highways 15

16 Business Issues - Energy 60 US Crude Oil Prices Jan 88 Jul 88 Jan 89 Jul 89 Jan 90 Jul 90 Jan 91 Jul 91 Jan 92 Jul 92 Jan 93 Jul 93 Jan 94 Jul 94 Jan 95 Jul 95 Jan 96 Jul 96 Jan 97 Jul 97 Jan 98 Jul 98 Jan 99 Jul 99 Jan 00 Jul 00 Jan 01 Jul 01 Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 $ BBL Energy used in three primary areas Burner fuel for asphalt plants Bitumen in asphalt Mobiles Higher and more volatile energy prices since 2000 Energy prices likely to remain high

17 Business Issues - Energy Focus on managing energy cost increases through Substitution: RAP, Used Oil Hedging: Bitumen storage RAP % of Asphalt Tons % % Used Oil % of burner fuel used 5% 65% Bitumen Storage 000 tons Price recovery 17

18 Summary State budgets deficits improving Successful completion to TEA-21 renewal in Spring 2005 Energy prices stabilising? Focus on cost recovery Continuing growth opportunities Good population of small to medium sized add-ons Some larger family-owned targets 18

3+ 3+ N = 155, 442 3+ R 2 =.32 < < < 3+ N = 149, 685 3+ R 2 =.27 < < < 3+ N = 99, 752 3+ R 2 =.4 < < < 3+ N = 98, 887 3+ R 2 =.6 < < < 3+ N = 52, 624 3+ R 2 =.28 < < < 3+ N = 36, 281 3+ R 2 =.5 < < < 7+

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