Vulcan Materials DFAN14A Additional proxy materials by non-management

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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VULCAN MATERIALS COMPANY
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Update on Martin Marietta

Materials’

Proposed

Combination with Vulcan

Materials

May 1, 2012

Rock Solid Fundamentals.

Positioned for the Long Term.

Introduction: Martin Marietta Continues to Outperform Vulcan

2

Aggregates YoY

Shipments Growth

10%

Gross Margin

4.4%

YoY Net Sales Growth

9.5%

Adj. EBITDA Margin 2

8.5%

10%

6.8%

12.5%

10.0%

Vulcan

Q1 2012 Results

Martin Marietta

Q1 2012 Results

SG&A % of Net Sales 3

13.0%

9.4%

Other Results

Non-aggregates

4

Specialty Products

4

Negative gross margin

Quarterly record for net sales

and earnings from operations

37.5% gross margin

Aggregates YoY Price

Growth

(0.8%)

2.8%

Martin Marietta’s net

sales is growing at a

faster rate than

Vulcan’s…

…and generating

stronger margins

•

Vulcan's earnings

announcement focused on

promises for future

performance but did not

provide a substantive

update on their recently

announced Profit

Enhancement Plan and

Planned Asset Sales

•

When asked, Vulcan did

not quantify savings in

Q1 associated with their

recently announced

Profit Enhancement Plan

•

Vulcan still did not

provide detail on which

assets are included in

their Planned Asset Sales

and expected timing

2012 Aggregates

Outlook

Volume growth: 2% -

4%

Price growth: 1% -

3%

Volume growth: 4% -

5%

Price growth: 2% -

4%

1

Note 1:

YoY Net Sales growth reflects Heritage Aggregates business. Inclusive of acquisitions, the YoY Net Sales growth is 20.6%.

Note 2:

Please see EBITDA reconciliation in appendix.

Note 3:

SG&A not adjusted for R&D expense, as item not disclosed in Vulcan's Q1 2012 press release.

Note 4:

Vulcan’s non-aggregates

segment

includes

concrete,

asphalt

and

cement.

Martin

Marietta’s

Specialty

Products

segment

includes

the

magnesia-based

chemicals and dolomitic lime businesses.

Source:

Company filings

Summary

3

Vulcan Shareholders Should Show Their Support for Martin Marietta's

Compelling Offer

Martin Marietta believes that:

•

There

is

undeniable

strategic

logic

in

the

combination

of

Martin

Marietta

and

Vulcan

•

Vulcan’s claims of undervaluation ignore the fact that Vulcan shareholders are

not cashing out, but rather maintaining ~58% ownership in a stronger entity

•

Vulcan continues to mask underperformance and value destruction while

refusing to accept Martin Marietta’s invitation to engage in discussions

•

Vulcan

shareholders

have

an

opportunity

to

send

a

strong

message

to

their

Board

–

Elect Martin Marietta’s independent nominees to the Vulcan Board

–

Communicate support for the transaction to fellow shareholders

4

Martin Marietta’s Proposal is a 100% Stock-for-Stock Combination,

With Vulcan Shareholders Retaining ~58% Ownership

Note 1:

Vulcan implied TEV/2012E EBITDA based on 0.50 of a Martin Marietta share of common stock for each Vulcan share of common stock (as of 4/27/2012).  EBITDA projections based on

Thomson median consensus estimates as of 4/27/2012.

Martin Marietta’s

Proposed Stock-for-Stock

Combination

Cash Acquisition

Less important as parties ride economic

cycle together

Realized and shared

No incremental leverage related to financing

of transaction

Shared by both parties

Meaningful premium to the unaffected price

Opportunistic timing is critical

Accrue to buyer only

Burden increases for buyer

Seller does not participate in future upside

Typically higher than transactions with stock

or mixed consideration

Vulcan’s statements about value for its shareholders fundamentally mischaracterize Martin

Marietta’s proposal, ignoring the shared upside of a stock-for-stock combination

The offer:

–

Does

not

undervalue

Vulcan;

it

provides

an

immediate

premium

to the unaffected price and

values

Vulcan at a 2012 EBITDA

multiple

of

16.7x

while

Martin

Marietta

is

trading

at

12.7x

1

–

Does not exploit cyclical lows; Vulcan’s share price already reflects expected recovery given

current

trading

multiple

and

offer

at

a

fixed

exchange

ratio

–

Enhances

Vulcan

shareholder

value

through

synergies

and

shared

upside

in

a

tax-free

combination

5

Stock

Cash

Consideration

Leverage

Synergies

Timing

Premium

Future Upside

We Agree With Vulcan’s Assertion that “It All Comes Down to Value”

1

…

6

•

Combination

creates

a

“world-class”

U.S.-based aggregates leader

•

$200

–

250

million

expected

annual

cost

synergies

2

•

Immediate meaningful dividend restoration (20x improvement over

the current Vulcan dividend)

•

Immediately “de-risked”

balance sheet and improved access to and

credibility with capital markets

•

Continued focus on operational excellence

•

Participation in the eventual cyclical recovery through ~58%

continuing ownership in the combined company

Aggregates Leader

Participation in

the Recovery

Synergies

Meaningful

Dividend

Strong Balance

Sheet

Best-in-Class

Management

Shareholders stand to benefit immediately from the powerful combination

•

Significantly increased scale

•

Complementary geographic footprint

•

Outstanding combined asset base, including 28 billion tons of mineral reserves

Note 1:

Source: Vulcan’s “The Vulcan Value Proposition”, March 2012.

Note 2:

Martin Marietta continues to believe that it can achieve $200 to $250 million of annual cost synergies as a result of the combination.  With respect to the purported savings programs announced by

Vulcan since December 12, 2011, Martin Marietta believes that Vulcan’s programs will be far from fully effective, at best, for several years, and not necessarily sustainable, although they may

result in some level of cost reductions during this period.  Martin Marietta’s belief is based on Martin Marietta’s understanding of the design and attempted implementation to date of Vulcan’s

programs and Martin Marietta’s experience in implementing its own fully operational management reporting system.  Moreover, Martin Marietta believes that Vulcan’s senior management lacks

demonstrated capability and discipline to be credible to deliver Vulcan’s “hope plan” on a standalone basis, leaving Vulcan shareholders exposed to substantial execution risk.  Actual synergies will

be based on future performance, as to which there can be no assurance.

…But Management Credibility is Essential

Martin Marietta believes that:

Vulcan has masked underperformance and value destruction:

•

Relied on flawed operating comparisons

•

Mischaracterized the historical performance of its businesses

Vulcan

continues

to

use

“smokescreen”

tactics

to

impede

a

transaction:

•

Ignored

its

own

elevated

trading

multiple,

which

Martin

Marietta

believes

already

reflects the potential benefits of an eventual economic recovery

•

Set unrealistic expectations for the relative timing and extent of Vulcan's

recovery

•

Created vague “hope plans”

as a response to Martin Marietta’s proposal

•

Disregarded Vulcan’s 26% stock price increase (approximately $1.1 billion in

equity

value)

since

12/9/2011,

which

appears

to

have

been

driven

by Martin

Marietta’s proposal

1

7

Note 1:

Equity value reflects change from 12/9/2011 to 4/27/2012.

Source:

Company filings, Capital IQ

Can You Trust Today’s Vulcan to Make the Right Transaction Decision?

8

Essentially a cash out transaction

(~70% cash) with minimal interest in

ongoing entity

$3.2B of additional debt that

ultimately led to near elimination of

the dividend 

Destroyed $4.3B of the combined

company’s shareholder value

1

“The combined company will have

enhanced earnings growth and a strong

cash flow profile to reduce debt while

maintaining Vulcan Materials' historical

dividend practices ...”

(Vulcan Press Release, 2/19/2007)

Continuing participation in market

recovery (~58% ownership) through

all-stock merger

Immediate deleveraging for Vulcan

from 7.4x to 4.0x-4.3x with

immediate restoration of meaningful

dividend

3

Expected to create ~$1.8B-$2.2B of

incremental value for the combined

company

2

“We do not believe that Martin

Marietta’s offer reflects the intrinsic

value of Vulcan’s assets or would create

value for our shareholders”

(Vulcan Q1 2012 Earnings Conference Call)

Acquisition of Florida Rock in

2007

Martin Marietta’s Proposal

Vulcan’s View

Value Impact

Transaction

Structure

Leverage

Vulcan shareholders deserve the opportunity to participate in Martin Marietta’s

value-enhancing proposal

Note 1:

Reflects change in market capitalization of Vulcan between 12/31/2007 and 12/9/2011.

Note 2:

Assumes $200 - $250M annual synergies at estimated cycle-average EBITDA multiple of 10x, less one-time costs to achieve synergies equal to one times fully achieved annual synergies. Excludes

divestitures.

Note 3:

Assumes annual synergies of $200 - $250M, attributable to cost savings related to SG&A, duplicative operating functions, and purchasing economies of scale. Excludes divestitures. Please refer to

note 2 on page 6.

Source:

Company filings

Vulcan’s Underperformance Provides Little Evidence that Vulcan

Management Can Deliver on its “Hope Plans”

9

Vulcan Gross Profit (% of Net Sales)

Vulcan Adj. SG&A (% of Net Sales)

1

Note 1:

Vulcan’s SG&A excludes R&D for comparative purposes.  Please see SG&A reconciliation in the appendix.

Note 2:

Please see EBIT reconciliation in the appendix.

Note 3:

Reflects net income from continuing operations.

Source:

Company filings

Vulcan Adj. EBIT (% of Net Sales)

2

Vulcan Net Income (% of Net Sales)

3

(1,900 bps)

+270 bps

(2,200 bps)

(1,810 bps)

30.8%

11.8%

2007

2011

21.0%

(1.0%)

2007

2011

15.0%

(3.1%)

2007

2011

9.3%

12.0%

2007

2011

Vulcan’s Underperformance Has Destroyed Significant Shareholder

Value

10

Note 1:

Vulcan’s

share

price

performance

for

the

period

12/31/2007

–

12/9/2011.

Source:

Company filings, Capital IQ

Vulcan Share Price Performance

1

Vulcan Dividend Level ($/share)

$1.84

$0.04

2007

Q1 2012 annualized

$20

$30

$40

$50

$60

$70

$80

$90

2008

2009

2010

2011

11

Note:

Note 1:

Source: Vulcan’s “The Vulcan Value Proposition”, March 2012.

Source:

Company filings

Vulcan’s Valuation Analysis Appears to be Based on Flawed Assumptions

Regarding its Recovery

($M)

Vulcan cited a mid-cycle EBITDA 50% higher than Vulcan’s historical average

Actual

Vulcan Average

EBITDA (’05-’11): $780

Vulcan Claimed

“Profit-

Enhanced”

Mid-Cycle

EBITDA:

¹

$1,179

$1,006

$1,306

$1,143

$800

$516

$352

$338

PF2005

PF2006

PF2007

2008

2009

2010

2011

Vulcan EBITDA

Average Vulcan EBITDA ('05-'11)

Vulcan Profit-Enhanced Mid-Cycle EBITDA

Please

see

EBITDA

reconciliation

in

appendix.

2005

–

2007

pro

forma

for

the

acquisition

of

Florida

Rock.

Timing of Vulcan’s Recovery Remains Highly Uncertain

12

Note 1:

2012-2014 based on Thomson median consensus estimates as of 4/27/2012.

Note 2:

Based on Vulcan’s “The Vulcan Value Proposition”, March 2012.

Source:

Company filings, Vulcan’s “The Vulcan Value Proposition”, March 2012

Vulcan

EBITDA

¹

To calculate its “Profit-Enhanced

Mid-Cycle”

EBITDA, Vulcan added

$100 million to an estimate that

already appeared aggressive

How long to

achieve

Vulcan’s “Profit

Enhanced”

mid-

cycle

EBITDA?

²

Analyst consensus estimates

($M)

Martin Marietta's Proposal, as Reflected in Vulcan's TEV/EBITDA Multiple, Already

Incorporates Analysts' Views of the Eventual Cyclical Recovery And Future

Performance

13

Note:     Market data as of 4/27/2012.

Note

1:

EBITDA projections based on Thomson median consensus estimates as of 4/27/2012.

Source:

Company filings, ThomsonOne

Martin Marietta’s proposal provides a significant, real premium to Vulcan shareholders;

Vulcan’s contrary claim is demonstrably wrong

Total

Enterprise

Value

/

EBITDA

Multiple

¹

At the proposed exchange

ratio, Vulcan is valued at a

premium to Martin Marietta,

even using current 2014 analyst

EBITDA estimates that

incorporate significant recovery

assumptions

1

Estimated cycle-average

EBITDA multiple of 10.0x

12.7x

10.8x

9.1x

16.7x

13.6x

11.1x

2012

2013

2014

Martin Marietta

Vulcan (at Martin Marietta's Proposal)

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

Vulcan TEV implied based on current proposed exchange ratio of 0.50 of a Martin Marietta share of common stock for each Vulcan share of common stock.

Martin Marietta’s Proposal, and Not the Profit Enhancement

Plan, Appears to Have Driven Up Vulcan’s Stock Price

14

Stock Price Performance Since 12/9/2011

Note:

Market data as of 4/27/2012.

Note 1:

Vulcan share price performance equals Vulcan 1-day change less S&P 500 1-day change.

Note 2:

S&P price indexed to Vulcan share price as of 12/9/2011.

Source:

Company filings, Capital IQ

Following

an

increase

of

~17%

upon

announcement

of

the

proposal,

Vulcan’s

share

price

has

traded

in

line

with

Martin

Marietta’s

¹

12/12/2011:

Change

vs.

S&P

500:

+16.8%

¹

Positive price reaction to Martin Marietta proposal

12/19/2011:

Change vs. S&P 500: (2.5%)

1

Vulcan announcement of

“ongoing”

restructuring efforts

2/16/2012:

Change vs. S&P 500 : (0.6%)

1

Announcement of Vulcan’s

“hope plans”

Martin

Marietta

Vulcan

S&P

500

²

Through a Combination, Vulcan Shareholders Would Realize

Immediate Balance Sheet Improvement…

15

Credit

Rating 

A3/A-

Baa2/BBB+

Baa2/BBB

Baa3 / BBB-

Ba2/BB

3/31/2012

($M)

MARTIN

MARIETTA

VULCAN

Combined

²

Debt

$1,135

$2,814

$3,949

LTM Adj.

EBITDA

³

$349

$379

$928-$978

4

Total Debt/

LTM Adj.

EBITDA

³

3.3x

7.4x

4.3x –

4.0x

4

Vulcan

claims

that

it

will

de-risk

its

balance

sheet

“as

EBITDA

grows”

but

ignores

the

time

needed

for

Vulcan

to

achieve

a

reasonable

leverage

ratio

on

a

standalone

basis

and the opportunity cost and risk of an extended achievement period

Vulcan

Standalone

Leverage

¹

Combined Financials

“In the absence of a combination, we

expect credit measures to remain weak

for the rating in the near term, despite

some improvement in 2012 as

aggregates volumes and pricing rise.”

(Standard & Poor’s, 4/27/2012)

Note 1:

Leverage defined as total debt / LTM adjusted EBITDA. Please see EBITDA reconciliation in the appendix.

Note 2:

Combined financials exclude fees and expenses associated with the proposed combination.

Note 3:

Please see EBITDA reconciliation in the appendix.

Note 4:

Assumes annual synergies of $200 - $250 million, attributable to cost savings related to SG&A, duplicative operating functions, and purchasing economies of scale. Excludes divestitures. 

Please refer to note 2 on page 6.

Source:

Company filings

16

Vulcan

recently cut

its quarterly

dividend to

$0.01

per share

Vulcan Dividend Per Share ($)

…

And an Immediate Return to a Meaningful Dividend

Implied annual

dividend after

combination

0.80

1.16

1.48

1.84

1.96

1.48

1.00

0.76

0.04

2005

2006

2007

2008

2009

2010

2011

Q1 2012

Annualized

1

The dramatic 3-year decline in Vulcan’s dividend does not inspire confidence in its

stated

“commitment

to

restore

a

competitive

dividend

when

prudent

to

do

so”

²

Note 1:  Reflects Vulcan’s October 14, 2011 announcement to cut its quarterly dividend to $0.01.

Note 2:

Source: Vulcan’s “The Vulcan Value Proposition”, March 2012.

Source:  Company filings

Vulcan

Shareholders

Should

Send

a

Strong

Message

to

Their

Board

1)

Elect Martin Marietta’s independent nominees to the Vulcan Board

–

Martin Marietta has nominated four highly qualified independent director

nominees to replace the four incumbent Vulcan directors seeking re-election

–

Nominees are independent and have no affiliation with Martin Marietta or

Vulcan

–

Nominees

will

bring

a

fresh

perspective

-

including

an

open

mind

-

to

the

Vulcan Boardroom on whether Vulcan should engage with Martin Marietta on

its business combination

2) Don’t

wait

–

promptly

and

publicly

communicate

support

for

the

transaction

to:

–

The Vulcan Board

–

Your fellow shareholders

17

Vulcan

shareholders

should

support

the

transaction

by

voting

for

the

four

independent director candidates nominated by Martin Marietta

Addressing Vulcan's Most Recent Mischaracterizations

18

Vulcan’s Tactics Are a Smokescreen to Impede the Proposed

Transaction

Asked its shareholders to believe in the Profit Enhancement Plan, and overlook

the unfulfilled promises following the acquisition of Florida Rock

Refused to acknowledge that the divestiture plan that may be required as part of

Martin Marietta’s proposed business combination builds a stronger enterprise as

opposed to Vulcan’s asset sale plan which at best will reduce excessive leverage

resulting from its Florida Rock transaction

Cherry-picked metrics for flawed performance comparisons

Ignored relevant profitability and operating metric comparisons

19

1

2

3

4

In its

March

2012

presentation,

“The

Vulcan

Value

Proposition,”

Vulcan

appears

to

have:

Vulcan Overpromised and Underdelivered Following the Florida

Rock Acquisition

20

Adjusted EBITDA and % EBITDA Margin

Given Vulcan’s lack of credibility, Martin Marietta believes shareholders should not

trust Vulcan to deliver significant cost savings over its projected three year time

horizon

Note 1:

Compares Vulcan’s EBITDA and SG&A for 2007 and 2011.

Source:

Company filings

($M)

30%

margin

23%

margin

20%

margin

15%

margin

14%

margin

•

EBITDA

has

fallen

by

63%

¹

and

is

currently

17% of the $2B goal

•

Stated focus on cost reduction has yielded

only

a

9%

reduction

in

SG&A

costs

¹

(excluding $50M Florida Rock synergies)

•

Failed to accomplish stated goals of

de-levering the balance sheet and

maintaining an investment grade rating

What Vulcan Delivered Since 2007:

What Vulcan Said in 2007:

$2B targeted EBITDA

“Anticipated average annual EBITDA of

more

than

$2

billion

over

the

next

3

years,

enabling rapid debt reduction.”

(Vulcan Investor Presentation, February 20, 2007)

Potential Divestitures in the Business Combination Build a Stronger

Enterprise, Versus Vulcan’s Planned Asset Sales to Reduce Excessive leverage

•

Discussions with the DOJ continue; optimistic

that outstanding issues will be resolved in

the next several weeks

•

Numerous buyers have expressed interest in

assets that may be divested

21

Source: Vulcan’s “The Vulcan Value Proposition”, March 2012

Divestitures

•

Not the optimal strategy to reduce the

excessive leverage from Vulcan’s acquisition

of Florida Rock

•

In order to achieve $500M of asset sales,

meaningful EBITDA generating assets may

need to be divested, further extending

the time required to reduce leverage

•

Vulcan is ignoring an opportunity to

strengthen its balance sheet immediately

and restore its dividend through a

combination with Martin Marietta

Vulcan’s Planned Asset Sales

Flawed Comparisons

22

VULCAN CLAIM

MARTIN MARIETTA’S POSITION

3

Note 1:

Top 5 states’

population growth weighted by 2011 sales.

Source:

Company

filings,

Moody’s

2010

–

2020

population

projections

(April

2012)

Top States

% of 2011 Net

Sales

2010 –

2020

Estimated

Population Growth

Texas

19%

19.2%

North Carolina

17%

19.1%

Iowa

8%

3.3%

Georgia

8%

18.1%

South Carolina

5%

13.3%

Top 5 total

57%

16.3%

Top States

% of 2011 Net

Sales

2010 –

2020

Estimated

Population Growth

California

21%

11.6%

Virginia

13%

9.9%

Texas

9%

19.2%

Florida

9%

22.4%

Georgia

7%

18.1%

Top 5 total

59%

14.8%

MARTIN MARIETTA

VULCAN

•

Both companies well positioned to benefit from 

estimated long term demographic growth

•

Weighted average estimated population growth of

16.3% for Martin Marietta and 14.8% for Vulcan

1

1

1

Flawed Comparisons (continued)

23

•

•

MARTIN MARIETTA’S POSITION

Adj.

SG&A

(%

of

Net

Sales)

¹

EBITDA Per Employee Comparison

2

VULCAN CLAIM

126%

119%

134%

183%

163%

2007

2009

2010

2011

3

2008

Over the last 5 years, Martin

Marietta has generated on

average 45% more EBITDA per

employee than Vulcan

8.0%

8.2%

9.3%

12.0%

2007

2011

Martin Marietta

Vulcan

For a meaningful comparison, SG&A should be evaluated

as a percentage of sales rather than on an absolute basis

Vulcan’s EBITDA per employee has been significantly

below Martin Marietta’s

Note 1: Vulcan’s SG&A excludes R&D for comparative purposes.  Please see SG&A reconciliation in the appendix.

Note 2: Martin Marietta EBITDA per employee divided by Vulcan EBITDA per employee.

Note 3: 2011 headcount for Martin Marietta adjusted to exclude impact of asset swap transaction closed in December 2011, with a net impact of approximately 450 employees.

Source: Company filings

3

Relevant Metrics Show Martin Marietta has Clearly Outperformed

Vulcan

24

Gross Profit (% of Net Sales)

Adj. SG&A (% of Net Sales) ¹

Note 1:

Vulcan’s SG&A excludes R&D for comparative purposes.  Please see SG&A reconciliation in the appendix.

Note 2:

Please see EBIT reconciliation in the appendix.

Note 3:

Reflects net income from continuing operations.

Source:

Company filings

Adj. EBIT (% of Net Sales) ²

Net Income (% of Net Sales) ³

4

Confronted with the same downturn in the construction market,

Martin Marietta has outperformed Vulcan

Revisiting the Compelling Nature of the Proposal

25

Undeniable Strategic Logic for a Combination

26

Martin Marietta believes that a combination:

Aggregates

Leader

•

Creates

a

“world-class”

U.S.-based

aggregates

leader

•

Significantly increased scale

•

Complementary geographic footprint

•

Outstanding combined asset base, including 28 billion tons of mineral

reserves

Synergies

•

Generates

significantly

greater

cost

reduction

through

synergies

than

Vulcan is likely to achieve on its own

•

$200 –

250M annual cost synergies vs. Vulcan’s unsubstantiated

“hope plan”

1

Positioned for

Growth

•

Presents greater growth opportunities than either company on a

standalone basis

Value Creation

•

Creates

significant

value

for

both

companies’

shareholders

Note 1:

Please refer to note 2 on page 6.

Combined Company Will Have the Most Extensive Aggregates Footprint

27

Combined company has extensive geographic coverage and diversity

States with Martin Marietta locations

States with Vulcan locations

States with both companies’

locations

Locations served by Martin Marietta

MD

Nova Scotia

Bahamas

Yucatán

Peninsula

MA

Note 1:

Fiscal year 2011 annual shipments measured in millions of short tons and based on publicly available information.  Excludes divestitures.

Note 2:

Martin Marietta includes shipments from Nova Scotia and the Bahamas which are primarily used to service the U.S.

Note 3:

Vulcan includes shipments from the Yucatán Peninsula and the Bahamas.

Note 4:

Heidelberg reports North American aggregates volumes, which includes production sites in western Canada.

Source:

Company filings

U.S. aggregates producers

(by shipments) ¹

4

2,3

WA

NV

UT

WY

CO

NM

AZ

CA

OR

ID

MT

NE

KS

OK

TX

IA

MO

AR

WI

IN

OH

WV

SC

TN

MS

AL

GA

FL

KY

IL

LA

SD

MI

MN

ND

VT

NH

ME

VA

NC

PA

NY

DE

NJ

CT

RI

U.S.

Global

28

Note:

Fiscal year 2011 annual shipments measured in millions of short tons and based on publicly available information.  Excludes divestitures.

Note 1:

Vulcan includes shipments from the Yucatán Peninsula and the Bahamas.

Note 2:

Martin Marietta includes shipments from Nova Scotia and the Bahamas which are primarily used to service the U.S.

Note 3:

Heidelberg reports North American aggregates volumes, which includes production sites in Western Canada.

Source:

Company filings

Combination

creates

the

“must

own”

U.S.

heavy

building

materials

stock

Aggregates Shipments by Tonnage

Creates a “World-Class”

U.S.-Based Aggregates Leader

Realization of $200 -

250M in Annual Cost Synergies

29

Duplicative SG&A Functions

•

Management, facility, corporate overhead and information

technology integration

•

Public company costs

Duplicative Operating Functions

•

Realigned organizational structure

•

Management, facility, sales force and production overhead

integration

Improved Purchasing Efficiencies from Greater Scale

•

Goods and services

•

Distribution network

Realization of cost synergies creates significant shareholder value

$50 –

60M

$50 –

60M

$100 –

130M

Realization and Cost to Achieve

•

Synergies expected to be realized over two to three years

•

One-time costs to achieve synergies expected to be equal to one

times fully achieved annual synergies

Note:

Please refer to note 2 on page 6.

Significant Shareholder Value Creation

30

Estimated

$200 -

$250 million

in annual synergies

1

Meaningful dividend

Balance sheet well-

positioned for

cyclical recovery

and growth

Efficiencies gained

from size and scale

Continued focus on

operational

excellence

Stronger platform

for long term growth

Note 1:

Please refer to note 2 on page 6.

Significant

shareholder

value creation

Martin Marietta is Committed to Making This

Combination a Reality

31

The Election of Martin Marietta’s Independent Director Nominees is

The Important Next Step for a Successful Transaction

•

Martin Marietta has nominated 4 independent director candidates

to the Vulcan Board who would replace the 4 incumbent Vulcan

directors seeking re-election

•

Election of Martin Marietta’s independent nominees will bring a

fresh perspective

–

including an open mind

–

to the Vulcan

Boardroom on whether Vulcan should engage with Martin Marietta

on its business combination

32

This election provides a critical opportunity to the Vulcan shareholders

to show support for a combination of the two companies

•

In contrast, a vote for the incumbent Board members is a

vote for the status quo, encouraging the current Vulcan Board

to continue to ignore value creating opportunities for

shareholders

Qualified and Independent Board Nominees

•

Martin Marietta has proposed qualified, independent Board nominees

•

Each nominee has been carefully screened to ensure independence

–

No affiliation with Martin Marietta, Vulcan or any of their subsidiaries

•

Board nominees have a broad set of skills and experience required to

ensure the Board functions efficiently and provides appropriate

oversight

33

Skills

Experience

–

Corporate governance

–

Securities and disclosure

–

Executive compensation

–

Finance and accounting

–

Operations

–

Current and former directors of

public companies

–

Financial and operating

experience

–

Major corporate M&A transaction

experience

34

Vote the blue proxy card or blue voting

instruction form today and communicate

your support for the proposal to the

Vulcan Board

Now is the Time for Vulcan Shareholders to Act

Appendix

35

Qualified Independent Board Nominees

36

Board Nominees

Selected Qualifications

Expertise

Philip R. Lochner, Jr.

-

Senior VP and Chief Administrative Officer of Time Warner,

Inc. (1991-1998)

-

Commissioner of the SEC (1990-1991)

-

Currently serves as director on four publicly traded U.S.

corporations

Corporate Governance

Securities and

Disclosure

Edward W. Moneypenny

-

Senior VP of Finance and CFO of 7-ELEVEN, Inc. (2002-2006)

-

Executive VP of Finance and CFO of Covanta Energy

Corporation (2001)

-

Previously CFO at two former Fortune 500 companies in the

energy industry

Finance and Accounting

Karen R. Osar

-

Executive VP and CFO of Chemtura Corporation (2004-2007)

-

Senior VP and CFO of Westvaco Corporation and

MeadWestvaco Corporation (1999-2003)

-

Previously Managing Director, investment banking, of

JPMorgan Chase & Co.

Executive Compensation

Corporate Governance

Finance and Accounting

V. James Sardo

-

Chairman of the Board of Capstone Infrastructure Corp.

-

Significant prior experience as former director or trustee of

multiple institutions

-

Interim CEO of Royal Group Technologies Limited

(2005-2006)

Corporate Governance

Operations

Martin Marietta EBITDA & EBIT Reconciliation

37

Note: Adjusted Q1 2012 and LTM EBITDA is preliminary and amounts may change upon finalization of Martin Marietta’s Q1 2012 earnings as reported on Form 10-Q.

Source:   Company filings

(dollars in millions)

For the Quarter Ended

March 31,

LTM

For the Year Ended December 31,

2012

2011

3/31/2012

2011

2010

2009

2008

2007

Net earnings attributable to entity

$         (36.7)

$         (17.4)

$           63.1

$           82.4

$     

97.0

$           85.5

$         176.3

$  

262.7

Add back:

Interest expense

13.5

18.2

53.9

58.6

68.5

73.5

74.3

60.9

Income tax expense for controlling interests

(10.0)

(6.4)

19.6

23.2

29.3

27.4

77.3

116.6

Depreciation, depletion and amortization expense

43.8

42.9

172.7

171.8

179.9

177.7

169.8

150.4

EBITDA

$        10.6

$        37.3

$        309.3

$        336.0

$  

374.7

$        364.1

$        497.7

$     

590.6

Adjusted for:

Legal settlement

-

-

-

-

-

11.9

-

-

Reversal of excess legal reserve

-

-

-

-

(5.0)

-

-

-

Nonrecurring reduction in workforce charge

-

-

-

-

-

-

5.4

-

Charge for early retirement benefit

-

-

4.4

4.4

-

-

-

-

Loss (gain) on sales of assets

0.5

(3.0)

(2.0)

(5.5)

(4.5)

3.0

(12.8)

-

Transaction costs

25.9

1.0

43.5

18.6

1.2

2.2

3.6

-

Settlement expense for pension plan

-

-

0.4

0.4

3.5

-

2.8

0.7

Asset write-offs

-

-

-

-

-

-

3.3

-

Other nonoperating (income) expense

(1.8)

(0.2)

0.2

1.8

0.2

(1.1)

2.0

(7.3)

Pretax loss

(gain) on discontinued operations

0.7

1.8

(7.3)

(6.2)

(0.3)

(0.5)

(10.1)

(3.7)

Income attributable to noncontrolling interests

(1.0)

(0.3)

0.5

1.2

1.7

2.8

3.7

0.9

Adjusted EBITDA

$  

34.9

$  

36.6

$  

349.0

$  

350.7

$ 

371.5

$

382.4

$        495.6

$    

581.2

Less:

Depreciation, depletion and amortization expense

43.8

42.9

172.7

171.8

179.9

177.7

169.8

150.4

Adjusted EBIT

$ 

(8.9)

$ 

(6.3)

$ 

176.3

$ 

178.9

$

191.6

$

204.7

$     

325.8

$  

430.8

Vulcan EBITDA & EBIT Reconciliation

38

(dollars in millions)

For the Quarter Ended

March 31,

LTM

For the Year Ended December 31,

2012

2011

3/31/2012

2011

2010

2009

2008

2007

2006

2005

Net (loss) earnings

$     (52.1)

$     (54.7)

$     (68.1)

$     (70.8)

$     (96.5)

$        30.3

$          0.9

$      450.9

$      470.2

$       470.2

Add back:

Interest expense

52.3

42.3

227.2

217.2

180.7

173.0

169.7

41.6

20.1

20.5

Income tax (benefit) expense

(38.4)

(31.0)

(83.0)

(75.6)

(85.7)

(30.1)

70.1

197.2

216.7

164.1

Depreciation, depletion and amortization expense

85.2

90.6

356.3

361.7

382.1

394.6

389.1

271.5

226.4

222.9

Goodwill impairment

-

-

-

-

-

-

252.7

-

-

-

EBITDA

47.0

47.1

432.4

432.5

380.6

567.8

882.5

961.2

933.4

796.5

Adjusted for:

Legal settlement

-

-

-

-

40.0

-

-

-

-

-

Recovery for legal settlement

-

(25.5)

(20.9)

(46.4)

-

-

-

-

-

-

Legal expense

-

-

-

-

3.0

-

-

-

-

-

Transaction expenses

10.1

-

10.1

(0.0)

-

-

-

-

-

-

Restructuring charges

-

-

15.2

15.2

-

-

-

-

-

-

Gain on sales of assets

(6.5)

(0.5)

(53.8)

(47.8)

(59.3)

(27.1)

(94.2)

(58.7)

(5.6)

(8.3)

Asset write-offs

-

-

-

-

9.2

8.5

10.5

-

-

-

Accretion expense for asset retirement obligations

-

(2.2)

(6.0)

(8.2)

(8.6)

(8.8)

(7.1)

(5.9)

(5.5)

(4.8)

Other nonoperating (income) expense

(3.1)

(1.4)

(1.7)

(0.0)

(3.1)

(5.3)

4.4

5.3

(28.5)

(24.4)

(Earnings) loss on discontinued operations, net of tax

(5.0)

(16.4)

(4.0)

(7.4)

(10.0)

(19.5)

4.1

19.3

16.6

(83.7)

Income attributable to noncontrolling interests

-

-

-

-

-

-

-

0.2

-

11.2

Adjusted EBITDA

$     42.4

$    

1.2

$     379.2

$     337.9

$     351.8

$     515.6

$     800.1

$     921.5

$     910.4

$     686.6

Less:

Depreciation, depletion and amortization expense

85.2

90.6

356.3

361.7

382.1

394.6

389.1

271.5

226.4

222.9

Adjusted EBIT

$    (42.7)

$     (89.4)

$       22.9

$     (23.8)

$    (30.3)

$     121.0

$     411.0

$     650.0

$     684.0

$     463.7

Plus:

Florida Rock adjusted EBITDA ¹

221.1

395.2

319.0

Adjusted pro forma EBITDA

$  1,142.6

$  1,305.6

$  1,005.6

Note:

Adjusted Q1 2012 and LTM EBITDA is preliminary and amounts may change upon finalization of Vulcan’s Q1 2012 earnings as reported on Form 10-Q.

Note 1: Florida Rock financials calendarized to December 31 year-end. 2007 period represents financials for the first 9 months of 2007.

Source: 

Company filings

Florida Rock EBITDA Reconciliation

39

For the 9 months

(dollars in millions)

ended Sept. 30,

For the Year Ended December 31,

2007

2006

2005

Net (loss) earnings

$

$

169.6

Add back:

Interest expense (income)

(1.1)

(3.6)

(0.5)

Income tax (benefit) expense

52.2

119.2

104.7

Depreciation, depletion and amortization expense

63.7

76.9

65.5

EBITDA

211.5

406.2

339.2

Adjusted for:

Recovery for legal expenses

-

-

(0.6)

Transaction expenses

10.1

-

-

Gain on sales of assets

0.0

(6.3)

(7.5)

Life insurance proceeds

-

-

(0.6)

Insurance settlement

-

-

(2.1)

Other nonoperating (income) expense

(0.6)

(4.6)

(9.5)

Adjusted EBITDA

$

$

$

$

319.0

213.7

395.2

96.7

221.1

Note:     Florida Rock financials calendarized to December 31 year-end. 2007 period represents financials for the first 9 months of 2007.

Source:  Company filings 

Vulcan SG&A Reconciliation

40

Source:

Company filings

(dollars in millions)

For the Year Ended December 31,

2011

2010

2009

2008

2007

SG&A, as reported

$       290.0

$       327.5

$          321.6

$       342.6

$        289.6

R&D expense, as disclosed in notes to financials

1.1

1.6

1.5

1.5

1.6

Adjusted SG&A

$       288.9

$       326.0

$          320.1

$       341.0

$        288.0

Net Sales

$    2,406.9

$    2,405.9

$       2,543.7

$    3,453.1

$     3,090.1

Adjusted SG&A as Percentage of Net Sales

12.0%

13.5%

12.6%

9.9%

9.3%

Cautionary Note Regarding Forward-Looking Statements

41

This presentation may include "forward-looking statements." Statements that include words such as "anticipate," "expect," "should be," "believe," "will," and other words

of similar meaning in connection with future events or future operating or financial performance are often used to identify forward-looking statements. All statements

in this presentation, other than those relating to historical information or current conditions, are forward-looking statements. These forward-looking statements are

subject to a number of risks and uncertainties, many of which are beyond Martin Marietta's control, which could cause actual results to differ materially from such

statements. Risks and uncertainties relating to the proposed transaction with Vulcan include, but are not limited to: Vulcan's willingness to accept Martin Marietta's

proposal and enter into a definitive transaction agreement reasonably satisfactory to the parties; Martin Marietta's ability to obtain shareholder, antitrust and other

approvals on the proposed terms and schedule; uncertainty as to the actual premium that will be realized by Vulcan shareholders in connection with the proposed

transaction; uncertainty of the expected financial performance of the combined company following completion of the proposed transaction; Martin Marietta's ability to

achieve the cost-savings and synergies contemplated by the proposed transaction within the expected time frame; Martin Marietta's ability to promptly and effectively

integrate the businesses of Vulcan and Martin Marietta; the combined company’s ability to pay dividends in the amounts anticipated; a downgrade of the credit rating of

Vulcan's indebtedness, which could give rise to an obligation to redeem Vulcan's existing indebtedness; the potential implications of alternative transaction structures

with respect to Vulcan, Martin Marietta and/or the combined company, including potentially requiring an offer to repurchase certain of Martin Marietta's existing

debt;  the implications of the proposed transaction on certain of Martin Marietta’s and Vulcan’s employee benefit plans; and disruption from the proposed transaction

making it more difficult to maintain relationships with customers, employees or suppliers. Additional risks and uncertainties include, but are not limited to: the

performance of the United States economy; decline in aggregates pricing; the inability of the U.S. Congress to pass a successor federal highway bill; the discontinuance

of the federal gasoline tax or other revenue related to infrastructure construction; the level and timing of federal and state transportation funding, including federal

stimulus projects; the ability of states and/or other entities to finance approved projects either with tax revenues or alternative financing structures; levels of

construction spending in the markets that Martin Marietta and Vulcan serve; a decline in the commercial component of the nonresidential construction market, notably

office and retail space; a slowdown in residential construction recovery; unfavorable weather conditions, particularly Atlantic Ocean hurricane activity, the late start to

spring or the early onset of winter and the impact of a drought or excessive rainfall in the markets served by Martin Marietta and Vulcan; the volatility of fuel costs,

particularly diesel fuel, and the impact on the cost of other consumables, namely steel, explosives, tires and conveyor belts; continued increases in the cost of other

repair and supply parts; transportation availability, notably barge availability on the Mississippi River system and the availability of railcars and locomotive power to

move trains to supply Martin Marietta's and Vulcan's long haul distribution markets; increased transportation costs, including increases from higher passed-through

energy and other costs to comply with tightening regulations as well as higher volumes of rail and water shipments; availability and cost of construction equipment in

the United States; weakening in the steel industry markets served by Martin Marietta's dolomitic lime products; inflation and its effect on both production and interest

costs; Martin Marietta’s ability to successfully integrate acquisitions and business combinations quickly and in a cost-effective manner and achieve anticipated

profitability to maintain compliance with Martin Marietta's leverage ratio debt covenants; changes in tax laws, the interpretation of such laws and/or administrative

practices that would increase Martin Marietta's and/or Vulcan's tax rate; violation of Martin Marietta's debt covenant if price and/or volumes return to previous levels of

instability; a potential downgrade in the rating of Martin Marietta's or Vulcan’s indebtedness; downward pressure on Martin Marietta's or Vulcan's common stock price

and its impact on goodwill impairment evaluations; the highly competitive nature of the construction materials industry; the impact of future regulatory or legislative

actions; the outcome of pending legal proceedings; healthcare costs; the amount of long-term debt and interest expense; changes in interest rates; volatility in pension

plan asset values which may require cash contributions to pension plans; the impact of environmental clean-up costs and liabilities relating to previously divested

businesses; the ability to secure and permit aggregates reserves in strategically located areas; exposure to residential construction markets; and the impact on the

combined company (after giving effect to the proposed transaction with Vulcan) of any of the foregoing risks, as well as other risk factors listed from time to time in

Martin Marietta's and Vulcan's filings with the SEC.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are

included elsewhere, including the Risk Factors section of the Registration Statement and our most recent report on Form 10-K, and any other documents of Martin

Marietta and Vulcan filed with the SEC.  Any forward-looking statements made in this presentation are qualified in their entirety by these cautionary statements, and

there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected

consequences to, or effects on, us or our business or operations.  Except to the extent required by applicable law, we undertake no obligation to update publicly or

revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

Important Additional Information

42

This presentation relates to the Exchange Offer by Martin Marietta to exchange each issued and outstanding share of common stock of Vulcan for 0.50 shares of Martin

Marietta common stock. This presentation is for informational purposes only and does not constitute an offer to exchange, or a solicitation of an offer to exchange,

shares of Vulcan common stock, nor is it a substitute for the Tender Offer Statement on Schedule TO or the preliminary prospectus/offer to exchange included in the

Registration Statement on Form S-4 (the "Registration Statement") (including the letter of transmittal and related documents and as amended and supplemented from

time to time, the "Exchange Offer Documents") initially filed by Martin Marietta on December 12, 2011 with the SEC. The Registration Statement has not yet become

effective. The Exchange Offer will be made only through the Exchange Offer Documents. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE EXCHANGE OFFER

DOCUMENTS AND ALL OTHER RELEVANT DOCUMENTS THAT MARTIN MARIETTA HAS FILED OR MAY FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY

CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION.

In connection with the solicitation of proxies for Vulcan's 2012 annual meeting of shareholders (the "Vulcan Meeting"), Martin Marietta filed a definitive proxy statement

on April 25, 2012 (the "Vulcan Meeting Definitive Proxy Statement") with the SEC. The Vulcan Meeting Definitive Proxy Statement and accompanying proxy card will be

mailed to the shareholders of Vulcan. Martin Marietta also intends to file a proxy statement on Schedule 14A and other relevant documents with the SEC in connection

with its solicitation of proxies for a meeting of Martin Marietta shareholders (the "Martin Marietta Meeting") to approve, among other things, the issuance of shares of

Martin Marietta common stock pursuant to the Exchange Offer (the "Martin Marietta Meeting Proxy Statement"). INVESTORS AND SECURITY HOLDERS ARE URGED TO READ

THE VULCAN MEETING DEFINITIVE PROXY STATEMENT, THE MARTIN MARIETTA MEETING PROXY STATEMENT AND OTHER RELEVANT MATERIALS AS THEY BECOME AVAILABLE

BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

All documents referred to above, if filed, will be available free of charge at the SEC's website (www.sec.gov) or by directing a request to Morrow & Co., LLC at (877)

757-5404 (banks and brokers may call (203) 658-9400).

Martin Marietta, its directors and executive officers and the individuals nominated by Martin Marietta for election to Vulcan's Board of Directors are participants in any

solicitation of proxies from Vulcan shareholders for the Vulcan Meeting or any adjournment or postponement thereof. Martin Marietta, its directors and executive

officers are participants in any solicitation of proxies from Martin Marietta shareholders for the Martin Marietta Meeting or any adjournment or postponement thereof.

Information about the participants, including a description of their direct and indirect interests, by security holdings or otherwise, is available in the Registration

Statement, the proxy statement for Martin Marietta's 2012 annual meeting of shareholders, filed with the SEC on April 18, 2012, and the Vulcan Meeting Definitive Proxy

Statement, or will be available in the Martin Marietta Meeting Proxy Statement, as applicable.

Martin Marietta anticipates that some divestitures may be required in connection with the regulatory approval process. Certain information in this presentation reflects

the combined operations of Martin Marietta and Vulcan, but does not reflect the impact of any divestitures that may be necessary.