CONEXPO-CON/AGG VIP SHOW GUIDE contains Floor Plans and a complete listing of companies exhibiting at the ConExpo-Con/Agg 2014 trade show in Las Vegas March 3-7, 2014. It also contains 2014 forecasts for the Aggregate, Concrete and Cement industries

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Page 21 of 93

AGGREGATES & CONSTRUCTION MARKET REPORT "This year-to-date growth in aggregates demand is in-line with our expectations at the beginning of the year and is driven by improved private construction activity, par- ticularly in several of our key states, including Arizona, California, Flor- ida, Georgia and Texas," james said. "Through the first nine months of the year, aggregates shipments in these five states combined were up more than 16 percent. Looking ahead, these states have accounted for more than one-third of all U.S. housing starts in the trailing twelve months ending September and 80 percent of contract awards for all U.S. private nonresidential buildings, measured in square feet, during the same peri- od. As a result, we believe the out- look for volume growth in these key states should continue and help offset the impact of several large highway and industrial projects that have now been deferred into the first half of 2014." James continued, "As we look at the projects that could impact our aggregates volumes for the remainder of the year and into 2014, we continue to see a disproportionately greater number of large highway and industrial projects. The timing of shipments to these projects remains difficult to predict. New highway projects, as measured by trailing 12-month contract awards, increased 7 percent versus the prior year's level – the third consecutive quar- ter with an increase. The large increase in TIFIA funding con- tained in last year's highway bill should also positively impact future demand. Year-to-date, aggregates volumes are up more than 2 percent and pricing has increased more than 3 percent with virtually all markets realizing price growth versus the prior year. Assuming normal weather patterns, we expect these year- over-year growth trends to continue in the fourth quarter." Ward Nye, president and CEO of Martin Marietta Materials said, "We are encouraged by various positive trends in our business and markets – especially in employment and private-sector construc- tion. Nonresidential construction is expected to grow in both the heavy industrial and commercial sectors. Shale development and related follow-on public and private construction activities are anticipated to remain strong. Further, the commercial building sector is expected to benefit from improved market fundamen- tals, such as higher occupancies and rents, strengthened property values and increased real estate lending. "Based on these factors, we anticipate that the nonresidential end-use market will increase in the mid-to-high single digits. Residen- tial construction should continue to grow, driven by historically low mort- gage rates, rising housing prices and total annual housing starts, which are expected to exceed one million units for the first time since 2007. We believe these trends will lead to dou- ble-digit volume growth in residen- tial end-use shipments. "For the public sector, autho- rized highway funding from MAP-21 should increase slightly compared with 2013. Additionally, state initia- tives to finance infrastructure proj- ects are expected to grow and con- tinue to play a more critical role in public-sector activity. Based on these trends and expectations, we expect aggregates shipments to the infrastructure end-use market to increase slightly. "Cumulatively, we anticipate aggregates product line ship- ments will be up 4 percent to 5 percent compared with 2013 levels. We currently expect aggregates product line pricing will increase 3 percent to 5 percent for the year compared with 2013. A vari- ety of factors beyond our direct control may continue to exert pressure on our volumes, and our forecasted pricing increase will not be uniform across the company. We expect aggregates prod- uct line direct production cost per ton will decrease slightly com- pared with 2013," Nye said. "We have had a strong year," said David L. Goodin, president and CEO of MDU Resources. "With the strength of our results in October and November and our current estimate for December, we felt it was important to provide an update of how we are seeing 2013. We experienced good construction weather in the northern tier states of operation in October and November allowing us to execute further into the season on our higher construction mate- rials backlog. In December, as expected, we have seen a slowdown in construction because of colder weather. However, the colder weather is resulting in higher natural gas and electric sales at our utility, demonstrating the strength of our diversification. Con- struction services, including its equipment sales and rental busi- ness, also is seeing continued solid performance. These improved results from our construction and utility businesses have more than offset the effects of wider basis differentials in key E&P pro- duction areas like the Bakken." Construction Spending The U.S. Census Bureau of the Department of Commerce announced that construction spending during December 2013 was estimated at a seasonally adjusted annual rate of $930.5 bil- lion, 0.1 percent (±1.2 percent) above the revised November esti- mate of $929.9 billion. The December figure is 5.3 percent (±1.5 percent) above the December 2012 estimate of $883.6 billion. The value of construction in 2013 was $898.4 billion, 4.8 per- cent (±1.3 percent) above the $857.0 billion spent in 2012. 18 • March 2014 VIP Show Guide U854.indd 18 2/14/14 12:10 PM

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