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 Declines Continue Through 2010. One Year Later than Previously Expected 2008 = -8.7% 2009 = -11.8% 2010 = -5.0% 2011 = +6.9% Total Cement Consumption – Colorado Thousand Metric Tons

6. CCoun Count on Concrete Peak to Trough Decline = 31% Volume Decline = 800,000 Metric Tons Total Cement Consumption – Colorado Annual Change, Thousand Metric Tons

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

8. 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

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

10. 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

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

12. CCoun Count on Concrete

13. Economic Policy Impacts

14. 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

15. 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

16. 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

17. Count on Concrete Residential Outlook Recovery Delayed

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

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

20. CCoun Count on Concrete Single Family Housing– Colorado 2007: - 31.5% 2008: - 35.7% 2009: -13.0% 2010: +1.0%

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

22. CCoun Count on Concrete Nonresidential Construction

23. 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%

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

25. CCoun Count on Concrete Public Construction

26. CCoun Count on Concrete Public Residential Nonresidential Cement Composition - Colorado 2005 2009

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

28. CCoun Count on Concrete Net Job Creation (Loss) - Annual Change, Thousand Net Jobs Job Loss 2008 = 1.2 Million Job Loss 2009 = 1.8 Million Unemployment Peaks at 7.5% Mid-2009 Colorado Fiscal Condition 2007: +$1.546 Billion 2008: +$1.166 Billion 2009:-$0.427 Billion 2010: -0.331 Billion

29. CCoun Count on Concrete Public: Portland Cement Consumption Thousand Metric Tons Declines Continue Through 2010. Colorado Public Cement Consumption 2007: +6% 2008: -5.2% 2009:-3.6% 2010: -3.6% 2011: +3.3%

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

31. Count on Concrete Market Imbalances The Cyclical Correction

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

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

34. CCoun Count on Concrete Import Volume Thousand Metric Tons

35. 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

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

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

38. CCoun Count on Concrete Near Term Conclusions  Double-digit decline in consumption with trough in 2010.  Large capacity increases magnify potential market imbalances.  Accelerated shutdown in wet & old long dry kilns reduces some imbalances.  Longer maintenance shutdown periods.  Imports record large, sustained declines.  Global conditions suggest freight rates continue slide.  May contribute to 2009-2010 market imbalances.  Utilization Rates decline.  Materializes to a greater extent in 2009-2010.  Days Supply Inventory remains above historical average.  Most pressure materialize in 2009-2010.

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

40. CCoun Count on Concrete Mid-Term Conclusions: 2011-2013  Stimulus package.  Provides floor and generates modest job creation in 2010.  Easing in Tight Lending Standards.  Lower risks  A year recovery from sub-prime (mid-2010) Oil prices low. Interest rates low. Inflation low. Consumer debt re-balanced. Inventory/sales ratio entering recession low. Pent-up demand

41. CCoun Count on Concrete 000 Starts Single Family Housing– United States Pent-Up Demand

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

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

44. 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

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

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

47. 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

48. 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

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

50. CCoun Count on Concrete Total Cement Consumption – Pennsylvania Thousand Metric Tons

51. Count on Concrete Conclusions Will We Miss the Upside?

52. CCoun Count on Concrete Portland Cement Consumption Thousand Metric Tons Ride the Cycle Diversification Survival Position for Next Cycle Ride the Cycle Positioning Set in Context of: Green - Climate Change State Deficits - Asphalt Prices Housing Recovery

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