1. Connect With Concrete Cement Outlook: 2009-2020 Ed Sullivan, Chief Economist PCA Electric Power Conference

2. Connect With Concrete Introduction: Overview  Economic fundamentals are weak.  Private Sector no longer drives demand  Residential & Nonresidential recoveries are not expected to materialize anytime soon.  Outlook shaped by policy actions.

3. Connect With Concrete Portland Cement Consumption Thousand Metric Tons - 45MMT

4. Connect With Concrete Capacity Expansion Thousand Metric Tons Stated Capacity Expansions Potential Increases From Specification Changes

5. Connect With Concrete Market Imbalances - Changes in Cement Consumption Tons + Capacity Expansion Tons 1973-74 1980-82 1990-91 2000-01 2007-2010

6. Connect With Concrete Import Volume Thousand Metric Tons

7. Connect With Concrete Introduction: Conclusions  Stimulus will provide some relief….  …but hardship facing the industry will not be avoided…  Further plant actions may materialize in the context of market imbalances.

8. Connect With Concrete After the Economic Crisis

9. Connect With Concrete After the Crisis  Cyclical correction is temporary.

10. Connect With Concrete  Stimulus spending must be paid for…resulting in higher interest rates, higher taxes and potentially higher inflation….  …and…American consumer..the engine of US economic growth may show significantly different spending patterns…  …combining for the potential of slower longer term economic growth (50 basis points).  …But even with these gains…past cyclical peaks are not expected to materialize until 2015. After the Crisis

11. Connect With Concrete Job Recovery: Past Recessions - Change, Thousands of Jobs 1980-1982 Recession 2000-2001 Recession 1990-1991 Recession Current Recession

12. Connect With 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

13. Connect With Concrete After the Crisis  Once recovery is in place….  And despite payback costs for stimulus…  Concrete construction could record large and sustained gains in growth.

14. Connect With Concrete Capacity Utilization Rates Clinker Production/Clinker Capacity Includes Plant Shutdowns. All Shutdowns Assumed Permanent. Downside Risk in Out Years….Reducing Utilization Rates as much a 50 Basis Points.

15. Connect With Concrete Implications Market Imbalances

16. Connect With Concrete Portland Cement Consumption Thousand Metric Tons

17. Connect With Concrete Nuclear Power: Assumptions  Cement Consumption Per Plant  115,000 (low) to 130,000 (high) Metric Tons Per Plant  How Many Plants  28 licenses to build.  3 (low) to 5 (high) Plants Built Through 2020. When.  First Plant: Scheduled 2016  First Pour = 2013 (Implies a three year lag to start-up)  One every eighteen months on-line thereafter through 2020. Implies.  57,500 (low) to 130,000 (high) Metric Tons of Cement Annually 2013-2020.

18. Connect With Concrete U.S. Supply Balance: No New Capacity Expansion Plans Million Metric Tons Cement Consumption Imports: 25.6 MMT Cement Production

19. Connect With Concrete Estimated U.S. Cement Clinker Capacity by Scenario Million Metric Tons

20. Connect With Concrete U.S. Supply Balance: EPA Mercury Impacts Million Metric Tons Cement Consumption Imports: 41.8 MMT Cement Production EPA: Hg Impact

21. Connect With Concrete Climate Change: Accelerated Decline of Wet Kilns Million Metric Tons

22. Connect With Concrete U.S. Supply Balance: No New Capacity Expansion Plans Million Metric Tons Cement Consumption Imports:59 MMT Cement Production

23. Connect With Concrete Cement Outlook: 2009-2010 Ed Sullivan, Chief Economist PCA Spring Board/Committee Meeting