FILED BY MARTIN MARIETTA MATERIALS, INC.
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
AND DEEMED FILED PURSUANT TO RULE 14a-12
UNDER THE SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: VULCAN MATERIALS COMPANY
COMMISSION FILE NO. 001-33841
The following is a presentation of Martin Marietta Materials, Inc. given on March 28, 2012 at the BB&T Capital Markets 6th Annual Commercial & Industrial Conference:
 BB&T
Capital Markets 6
th
Annual Commercial &
Industrial Conference
March 28, 2012
1
Rock Solid Fundamentals.
Positioned for the Long Term. |
 M A R T I
N M A R I E T T A M A T E R I A L S The Principles of our Strategy
Remain Unchanged Positioning
Uniquely positioned in an
attractive industry
Performance
Differentiated
performance
2
Growth
Multiple
long-term drivers
Long-term
superior performance |
 M A R T I
N M A R I E T T A M A T E R I A L S Long-Term Strategic
Plan Market attractiveness
drivers
#1 or #2 market position
High population growth or
density
Synergy opportunity
“MLM template”
Acquisition currency
Asset swaps
Financing capacity
Joint ventures
3 |
 Commitment
to Strategy Yields Improved Positioning Last 3-4 years, walked away from
many deals Evaluated over 30 potential transactions during 2011
Expansion of geographic footprint in Texas and Colorado
Investment of $91.6 million in business combinations
Asset swap
4
M A R T I N M A R I E T T A M A T E R I A L S
Disciplined acquisition strategy
Completed 3 acquisitions in 2011
Proposed business combination with Vulcan |
 M A R T I
N M A R I E T T A M A T E R I A L S San Antonio Expansion
•
Acquisition of
–
6 aggregates quarries
–
2 ready mix plants
–
1 asphalt plant
•
High-growth area
•
Serve additional customers in a larger geographic footprint
•
Provides long-term reserves to replace current sites (> over 200M tons)
•
Integration completed
5 |
 M A R T I
N M A R I E T T A M A T E R I A L S Asset Exchange with Lafarge
6
Presence in Colorado
Presence in Colorado
•
Acquired Lafarge’s Denver, CO Front
Range assets:
–
10 aggregates quarries
–
(200M tons reserves)
–
19 ready mix plants
–
12 asphalt plants
–
Road paving business
•
Swapped River business
•
Integration in process |
 M A R T I
N M A R I E T T A M A T E R I A L S The Principles of our Strategy
Remain Unchanged Long-term
superior performance
7
Positioning
Uniquely positioned in an
attractive industry
Growth
Multiple
long-term drivers
Performance
Differentiated
performance |
 M A R T I
N M A R I E T T A M A T E R I A L S Our Differentiated Performance
Profile 8
1
Highly disciplined
+
2
Low cost leader
+
3
Resilient pricing
performance
+
4
Attractive Specialty
Products business
+
5
Strong financial position
Superior
performance and
returns to
shareholders |
 M A R T I
N M A R I E T T A M A T E R I A L S Low Cost Leader
•
Declining costs
even as volume increased
2003 to 2006
•
Investment in new technologies
increased productivity
•
Low cost distribution network
30% by rail and water
9
Significant Headcount
Reduction
6,400
5,600
4,700
-27%
Note: Headcount equal to average number of employees
2003
2006
2011
Hourly
Salary |
    M A R T I
N M A R I E T T A M A T E R I A L S Resilient Pricing Performance
10
Aggregates Product Line Pricing Performance
3.3%
5.3%
2.7%
Average annual
increase since
1986
Increase
since
2006
Increase in
2011 |
 M A R T I
N M A R I E T T A M A T E R I A L S Attractive Specialty Products
Business 11
Operating Margin *
(%)
* Operating margin as % of net sales (excludes freight & delivery revenues)
41% of total 2011 operating profits
7%
29%
33%
2005
2010
2011
Investing $53M for new lime kiln
Chemical products
(water treatment;
pulp and paper)
13% of 2011 consolidated net sales
Key end uses / Product lines
Dolomite lime
(steel manufacturing;
raw material)
28%
71%
Operating Margin *
Net Sales
33%
$201M
Stone |
 M A R T I
N M A R I E T T A M A T E R I A L S Strong Financial Position
•
Balanced cash deployment
–
acquisitions
–
organic capital investment
•
CAPEX below DD&A
–
dividend distributions
•
$313M liquidity at
December 31, 2011
•
3.25X debt to EBITDA Ratio*
12
$M
* Refer to www.martinmarietta.com
for supporting calculations.
CAPEX
$0
$100
$200
$300
$400
2009
2010
2011
Operating cash flow +
proceeds from divestitures
Free cash flow *
–
2012 Ratio amendment |
 The
Principles of our Strategy Remain Unchanged Positioning
Uniquely positioned in an
attractive industry
Performance
Differentiated
performance
13
Growth
Multiple
long-term drivers
Long-term
superior performance
M A R T I N M A R I E T T A M A T E R I A L S
|
 M A R T I
N M A R I E T T A M A T E R I A L S Multiple Long-Term Growth
Drivers 14
Infrastructure renewal
Government funding expansion
Faster growing markets
Growth of Specialty Products
business
Powerful operating leverage
Our
long-term value
proposition
Key Drivers |
 Need for
Infrastructure Renewal 15
Expanding transit a necessity
Feds approve state’s plan for I-95 tolls
Gas tax is too low to meet current
(and future) infrastructure needs.
M A R T I N M A R I E T T A M A T E R I A L S
|
 16
Government Funding is Evolving
M A R T I N M A R I E T T A M A T E R I A L S
Expired September 30, 2009
Current continuing resolution expires March 31, 2012
Likely 2013 before new bill
Introduced on Feb. 3, 2012
5-year bill
$260 B bill for highways & transit
Financing –
energy revenues
House Republicans will not take
action until mid-April
Approved on March 14, 2012
2-year bill
$109 B bill with spending at
current funding levels (adjusted
for inflation)
Eliminates earmarks
American Energy & Infrastructure
Jobs Act of 2012
MAP 21 –
Moving Ahead for
Progress in the 21
st
Century
Federal Highway Bill
Senate
House |
 17
State budgets at healthy levels
Set to play expanding role
—
specific funding such as toll roads, gas taxes
—
examples Texas, North Carolina, Georgia
Funding at the State Level
State Departments of Transportation
Toll Roads & Alternate Financing
Tax Initiatives
M A R T I N M A R I E T T A M A T E R I A L S
|
 M A R T I
N M A R I E T T A M A T E R I A L S Long-Haul Distribution
Network Serves Critical Markets 18
Nova Scotia
Bahamas
Jacksonville
Savannah
Morehead
City
Mobile/
Pensacola
Lake Charles
Tampa/
Pt. Manatee
Baltimore
Charleston
Cape Canaveral
Bermuda
New York City
From Nova Scotia
From Bahamas
Beaumont |
 M A R T I
N M A R I E T T A M A T E R I A L S IN SUMMARY
Rock Solid Fundamentals. Positioned for the Long Term.
Performance
Positioning
•
Uniquely positioned in
attractive industry
—
barriers, resilient
pricing, growing
market share
Growth
19
•
Differentiated
performance
—
low cost leader,
disciplined, Specialty
Products business
•
Multiple long-term
drivers
—
infrastructure
spending, powerful
leverage to volume
Long-term
superior performance |
 Appendix
20 |
 M A R T I
N M A R I E T T A M A T E R I A L S Cautionary Note Regarding Forward
Looking Statements 21
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. |
 M A R T I
N M A R I E T T A M A T E R I A L S Important Additional
Information 22
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
preliminary proxy statement on January 24, 2012 (as amended, the “Vulcan Meeting Preliminary Proxy Statement”) with the SEC and
intends to file a definitive proxy statement in connection therewith (the “Vulcan
Meeting Definitive Proxy Statement”). When completed, 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 PRELIMINARY PROXY STATEMENT, 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 (800)
662-5200).
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 2011 annual meeting of shareholders, filed with the SEC on April 8, 2011, and the Vulcan Meeting
Preliminary Proxy Statement, or will be available in the Vulcan Meeting Definitive
Proxy Statement or the Martin Marietta Meeting Proxy Statement, as
applicable. |
 M A R T I
N M A R I E T T A M A T E R I A L S Contact Information
Corporate Headquarters:
Martin Marietta Materials, Inc.
2710 Wycliff Road
Raleigh, NC 27607
919-781-4500
Investor Relations:
919-788-4367
Website:
www.martinmarietta.com |