1. Count on Concrete Cement Outlook: 2009 Ed Sullivan, Chief Economist PCA

2. CCoun Count on Concrete Key Questions  How deep will retrenchment go ?  How long will it last ?  What recovery to expect?

3. CCoun Count on Concrete Portland Cement Consumption Thousand Metric Tons Declines Continue Through 2010. One Year Later than Previously Expected

4. CCoun Count on Concrete Portland Cement Consumption - Annual Change, Thousand Tons Peak (2005)-to-Trough (2010) Decline: 41 MMT (Worst in History)

5. CCoun Count on Concrete Capacity Expansion Thousand Metric Tons Stated Capacity Expansions Potential Increases From Specification Changes

6. CCoun Count on Concrete Market Imbalances - Changes in Cement Consumption Tons + Capacity Expansion Tons 1973-74 1980-82 1990-91 2000-01 2007-2010

7. CCoun Count on Concrete Import Volume Thousand Metric Tons

8. CCoun Count on Concrete Capacity Adjustments * Thousand Metric Tons Capacity Adjustments Due to Delayed Expansions and Plant Closures * Adjustments Include Five Delays in Plant Commissioning and Seven Plant Closures

9. CCoun Count on Concrete Average Days Supply Inventory Cement Inventory/ Daily Selling Rate 17 Days Supply = Historical Average

10. CCoun Count on Concrete Capacity Utilization Rates Clinker Production/Clinker Capacity

11. Count on Concrete Economic Outlook It is a Recession, and going to last longer than previously expected

12. CCoun Count on Concrete Economic Outlook: Five Factors Sub-Prime Defaults Write-Downs Risk Aversion Tight Lending Standards Commercial, Consumer, homeowner capital access reduced Global Financial Crisis Mortgage Payments Credit Cards Defaults Tight Lending Standards Home Price Declines Reliance on Home Equity Gone Structural Global Realities Gasoline Prices Heating Prices Fertilizer/Biofuels hit Ag Prices Supply Side Costs Ingrained Cost of Business Adds Weakness to Dollar Energy/ Inflation State Deficits Labor Markets Slower Economic Growth One Million Job Loss in 2008 Housing Recovery Delayed Nonresidential Declines State Fiscal Crisis Looming Public Declines Slower Job Revenues Slow Entitlement Programs Continue Deficits Drag on Recovery Offsets Possible Federal Stimulus Package

13. CCoun Count on Concrete Economic Adversity Sub-Prime Financial Crisis Energy Inflation Labor Markets 2006 2008 2007 2009 2010 State Deficits

14. CCoun Count on Concrete Net Job Creation (Loss) - Annual Change, Thousand Net Jobs Job Loss 2008 = 1.4 Million Job Loss 2009 = 1.9 Million Unemployment Peaks at 7.5% Mid-2009

15. CCoun Count on Concrete Economic Growth Outlook Percent Change, GDP Growth Rate Tax Rebate Bump

16. CCoun Count on Concrete

17. Economic Policy Impacts

18. CCoun Count on Concrete Left to Itself…Adverse Economic Momentum will Accelerate….Leading to Potentially the Worst economic Downturn in Post-War Era… The Effectiveness of Policy Will Determine the Character of the Economy during the Two Years

19. CCoun Count on Concrete Transmission Mechanism: Simple/Effective $700 Billion Stronger Economy Banks Stronger Increased Liquidity Averts Economic Meltdown: But May have Muted Impact in Stimulating Economy

20. CCoun Count on Concrete Transmission Mechanism: Longer/Weaker Stronger Economy Further Write downs Increased Liquidity $700 Billion Compromises Liquidity Banks Stronger Reduced Risk Aversion Lending Risk Increases Economy Weakens Longer Financial Adjustment Period Than Many Expect: Begins late 2009

21. CCoun Count on Concrete Policy Assessments  Rebate impact of spring has dissipated.  Stimulatory impact of rate cuts waning and not as effective as historical measures.  Issue not level of interest rates  Financial bailout is a stop gap measure not a true stimulus policy.  Economic adversity gains momentum in absence of a major fiscal policy initiative.  First half 2009 action.  $150 Billion.  Infrastructure – Higher “Multipiers”  Will increased Federal spending work in the face of large cuts in state and local spending?  Aid to States

22. Count on Concrete Residential Outlook Recovery Delayed

23. CCoun Count on Concrete 000 Starts Single Family Housing– United States

24. CCoun Count on Concrete Residential Cement Consumption - Annual Change, Thousand Tons Peak (2005)-to-Trough (2010) Decline: 19 MMT = 63% of Total Decline

25. CCoun Count on Concrete Future Weakness  Residential Weakness is largely over.  Most of Future Weakness Tied to Nonresidential & Public Cement Consumption.

26. CCoun Count on Concrete Nonresidential Construction

27. CCoun Count on Concrete Nonresidential: Portland Cement Consumption Thousand Metric Tons Declines Continue Through 2010. Recovery Could be Strong Colorado Nonresidential Cement Consumption 2007: +7.8% 2008: +6.5% 2009:-22.0% 2010: -11.3% 2011: +4.6%

28. CCoun Count on Concrete Nonresidential Cement Consumption - Annual Change, Thousand Tons Peak (2005)-to-Trough (2010) Decline: 5 MMT

29. CCoun Count on Concrete Public Construction

30. CCoun Count on Concrete District of Columbia Stable Pessimistic Fiscal 2009 Revenue Outlook Concerned Optimistic Source: National Conference of State Legislatures

31. CCoun Count on Concrete Public Cement Consumption - Annual Change, Thousand Tons Peak (2005)-to-Trough (2010) Decline: 12 MMT

32. Count on Concrete Mid-Term Recovery 2011-2013

33. CCoun Count on Concrete Portland Cement Consumption Thousand Metric Tons Declines Continue Through 2010. One Year Later than Previously Expected

34. CCoun Count on Concrete The “V” Economic Recovery: Sub-Prime Drag Abates Stimulus Gains Employment Traction Bank Lending Aversion Improves Lending Risk Declines: Credit Easing Energy Stimulus 2009 2008 2010 2011 State Deficits Improve Pent-Up Demand Released

35. CCoun Count on Concrete 000 Starts Single Family Housing– United States Pent-Up Demand Interest Rates low, Decline in Home Price, Job Recovery Translate into Improved Affordability Excess Inventories Worked Off

36. CCoun Count on Concrete Nonresidential Long Term Trend Million Real $, 1996

37. CCoun Count on Concrete Current: Gasoline Prices Vs Asphalt Prices Per Barrel Price Per Barrel

38. CCoun Count on Concrete Gasoline - Asphalt Margin Per Barrel Differential - Net Threshold of $14 Per Barrel Price Differential Per Barrel Threshold Differential = $14 per barrel Estimated on a Ten Year Payoff for Coker Investment

39. CCoun Count on Concrete Announced New Coker Installations Cumulative: Thousands of Barrels Per Day

40. CCoun Count on Concrete Liquid Asphalt Supply Thousands of Barrels 44 Million Barrel Decline by 2011

41. CCoun Count on Concrete Projected: Initial Bid Concrete Vs Asphalt Paving Costs Per Two Lane Road Mile - Urban Concrete Asphalt Parity Achieved in Fiscal 2009

42. CCoun Count on Concrete Projected: Life Cycle Concrete Vs Asphalt Paving Costs Per Two Lane Road Mile - Urban Concrete Asphalt Concrete Advantages Materialize in Fiscal 2009

43. CCoun Count on Concrete Portland Cement Consumption Thousand Metric Tons

44. Count on Concrete Cement Outlook: 2009 Ed Sullivan, Chief Economist PCA