1. Cement Outlook Ed Sullivan, Chief Economist PCA PCA Spring Meeting April 2012

2. Cement Consumption: Review 650.1902.81055.2 DecJanFeb 1958 10 Month’s Consecutive Growth

3. Cement Consumption: Weather SAAR 650.1902.81055.2 DecJanFeb 1958

4. Cement Consumption: Weather SAAR

6. Portland Cement Consumption Thousand Metric Tons 3.0%3.7%7.4%13.8%11.7%8.3% 201120122013201420152016

7. Total Construction Outlook $ Billion, Real -5.4%3.3%7.2%14.0%10.8%8.4% 201120122013201420152016

8. Cement Intensity: The Cycle Cement Tons Per Million $ Real Construction Spending 147.8148.3148.6148.4149.7149.5 201120122013201420152016

9. Cement Consumption Growth Number of States States Recording Declines States Recording Gains States Recording Double Digit Gains

10. Economic Outlook

11. Synchronized Recovery Theory In the context of moderating productivity Gains Leads to: Sentiment includes Consumer, Business & Banks: Defaults & perceived lending risks decline Job creation determines how quickly the recovery cycle spins.

12. New Hopes: Net Job Creation Annualized Net Job Creation 2.7 Million Annualized 3 month Moving Average 2.4 Million Annualized 3 month Moving Average

13. Job Creation Link to Sentiment Job Creation Consumer Sentiment

14. Job Creation Link to Sentiment Job Creation Consumer Sentiment

15. Job Creation Link to Sentiment Job Creation Consumer Sentiment

16. Job Creation Link to Sentiment Job Creation Consumer Sentiment

18. Housing Recovery

19. Residential Cement Consumption Thousand Metric Tons - 29.6 MMT 55% of Total Cement Consumption decline is attributed to residential

20. Residential Assessments Stronger labor markets & affordability. Foreclosures increase in 2012.  Inventory improvement is gradual, prices decline in 2012.

21. Foreclosure Estimates Million Homes Actual 2011 2011: Foreclosure Improvement a Mirage. 1.5 Million Delay Will Materialize in 2012-2013

22. Residential Assessments Stronger labor markets & affordability. Foreclosures increase in 2012.  Inventory improvement is gradual, prices decline in 2012. Most troubled SF markets assumed at trough.  No drag on starts. Regional SF markets begin recovery in 2012.

23. Single Family Starts Thousand Starts

24. Residential Assessments Stronger labor markets & affordability. Foreclosures increase in 2012.  Inventory improvement is gradual, prices decline in 2012. Most troubled SF markets assumed at trough.  No drag on starts. Regional SF markets begin recovery in 2012. Multifamily sustained growth.  Household formation expands, troubled tenant credit, rising rents, access to capital.

25. Multifamily Cement Consumption Thousand Metric Tons

26. Residential Assessments Stronger labor markets & affordability. Foreclosures increase in 2012.  Inventory improvement is gradual, prices decline in 2012. Most troubled SF markets assumed at trough.  No drag on starts. Regional SF markets begin recovery in 2012. Multifamily sustained growth.  Household formation expands, troubled tenant credit, rising rents, access to capital. Improvements not a drag.  Nesters (45%), Rehab foreclosures (30%), Green (25%).

27. Total Housing Starts Thousand Starts 6117018211,1631,4021,557 201120122013201420152016

28. Residential Cement Consumption Thousand Metric Tons

29. Generation of Pent-Up Demand Thousand Starts Add: Higher demolition rate due to unfit foreclosed properties

30. Nonresidential Drag

31. Nonresidential Cement Outlook Thousand Metric Tons 347.31590.15897.091902.942743.232816.37 201120122013201420152016 Annual Increase

32. Nonresidential Conclusions No longer a significant drag on construction activity. Large imbalances exist in before a positive NOI materializes  Slow job growth implies slow healing process Conditions for positive ROI Improving.

33. Public Recovery

34. Highway & Street Assessments No increase in nominal spending for federal highway program through 2016.  Upside risks. Highway program expired in 2009. Implies at least a 7 year impasse. ARRA dollars exhausted by mid-2012.  States swapped committed state highway spending with ARRA funds. Near-term state highway spending based on minimum maintenance levels. Pent-up state demand released beginning in fiscal 2014. Competitive price position improves throughout forecast horizon.  No change in states’ selection policies.

35. Discretionary State Cement Consumption Thousand Metric Tons

36. Highway Construction as Percent of Total Budget Real highway/Real State Expenditures Conservative Given Likelihood of Pent-Up Demand Release

37. Projected: Initial Bid Paving Costs Per Two Lane Road Mile - Urban Concrete Asphalt Parity Achieved in Fiscal 2009

38. Roadway Cement Consumption Outlook Thousand Metric Tons SAFETEA-LU/ Highway Bill State & Local

39. Portland Cement Consumption Thousand Metric Tons

40. The Recovery: 2014-2016

41. Introduction: Overview: 2014-2016  Structural Imbalances created during last boom diminish  Banks ease lending standards  Sovereign debt crisis softens  Foreclosures dramatically decline  State deficits replaced by surpluses Economic environment characterized by: Higher interest rates, higher taxes, higher inflation & slower economic growth Construction environment characterized by release of pent-up demand. Concrete competitive environment characterized by: NESHAP costs Improved competitive price advantages versus other building materials.

42. Capacity & Import Outlook 50% Planned Expansions, Wet Shutdowns, 75% Temporary Re-Open, NESHAP, Intensity Gains Re-Openings: Late 2013-2015

43. Cement Outlook Ed Sullivan, Chief Economist PCA PCA Spring Meeting April 2012