Building Bridges To Our Future. Ward Nye Chairman of the Board, NSSGA President and CEO, Martin Marietta Materials

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1 Building Bridges To Our Future Ward Nye Chairman of the Board, NSSGA President and CEO, Martin Marietta Materials Texas Aggregates and Concrete Association 2013 Annual Meeting June 26, 2013

2 Bridging Challenging Times Gauge of Planned US Construction Activity Hits Five-Year High Vital Signs Chart: Government Cuts Slow Economy

3 NSSGA Mission Advancing the interests of the aggregates industry before the federal government, to achieve ever-safer and more healthful workplaces for those in the industry, to support sustainable communities through economic productivity, environmental stewardship and the social contract of tending to the welfare of aggregates workers, their families and their communities.

4 Highway Bill Is Core Current bill expires in less than a year and a half Clock is ticking time will pass quickly Absent congressional action, the Highway Trust Fund will be depleted in 2015 Goal this year is to help promote action to fill the current funding gap Must ensure sustainable funding for the nation s surface transportation system

5 Legislative Update: MAP-21 Moving Ahead for Progress in the 21 st Century Expires September 30, 2014 Contains historic program and policy reforms Implementation rulemaking underway

6 MAP-21 Highway Investment Annual Federal Highway Investment SAFETEA-LU Extensions MAP-21 Billions of dollars $43.0 $41.0 $39.0 $37.0 $35.0 $36.0 $39.1 $40.2 $40.7 $41.1 $41.1 $39.1 $39.7 $40.3 $33.0 $31.0 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14

7 Transportation s Fiscal Cliff

8 Legislative Update Looming Highway Trust Fund insolvency Options: Drastic investment cuts More General Fund infusions New revenues

9 Highway Trust Fund Projections Based on CBO Score of MAP-21 (June 2012) Highway Account Fiscal Year Beginning-of-year balance $ 14 $ 8 $ 4 $ 4 $ (6) $ (15) $ (24) $ (33) $ (42) $ (52) $ (62) Revenue and interest Intra-governmental transfers Outlays End-of-year balance $ 8 $ 4 $ 4 $ (6) $ (15) $ (24) $ (33) $ (42) $ (52) $ (62) $ (72) Mass Transit Account Fiscal Year Beginning-of-year balance $ 7 $ 5 $ 5 $ 1 $ (3) $ (7) $ (12) $ (16) $ (20) $ (24) $ (29) Revenue and interest Intra-governmental transfers Outlays End-of-year balance $ 5 $ 5 $ 1 $ (3) $ (7) $ (12) $ (16) $ (20) $ (24) $ (29) $ (33) Total HTF Balance $ 13 $ 9 $ 15 $ (9) $ (22) $ (36) $ (49) $ (62) $ (76) $ (91) $ (105) ($ billions) Total HTF Balance

10 Estimation of Federal Highway and Transit Obligations Through 2022 $45.0 $40.0 $35.0 $40.7 $41.2 $40.8 $38.9 $39.4 $40.0 $34.7 $35.4 $36.1 $36.8 $37.5 $38.3 $39.1 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $11.9 $11.3 $11.6 $11.7 $11.8 $9.4 $4.2 $1.3 $3.5 $1.3 $1.3 $1.3 $1.2 $1.2 $1.3 $6.3 $6.4 $8.6 $9.2 $9.3 $9.5 $9.6 $1.3 $1.3 $1.3 $1.4 $1.4 $1.4 $1.4 $ Federal-aid Highway Highway Safety Transit Based on MAP-21 Assuming minimum prudent balance of $4 billion in Highway Account and $1 billion in Mass Transit Account Assumes historical General Fund appropriations for transit

11 Surface Transportation Funding Options Matrix (all revenue estimates in $ millions) Mechanism Yield Current Illustrative Revenues Avg Revenues Total Revenues Funding Mechanisms (2012) Rate Rate Diesel Tax Increase 1 /gal = $ 386 $ /gal 15.0 $ 5,786 $ 6,226 $ 37,356 Diesel Tax Indexing Transportation interests have provided lawmakers N/A with $ myriad - $ 585 funding $ 3,512 Gas Tax Increase 1 /gal = $ 1,327 $ 1, /gal 10.0 $ 13,272 $ 13,303 $ 79,818 Gas Tax Indexing options N/A $ - $ 1,370 $ 8,218 Truck/Trailer Sales Tax Increase 1% of Sales = $ 162 $ 233 N/A 5.0% $ 812 $ 1,359 $ 8,152 Truck Tire Tax Increase 100% Increase = $ 346 $ 434 N/A 10.0% $ 35 $ 45 $ 270 HVUT Increase Short term, two federal transportation 100% Increase = $ 944 $ commissions, 1,156 N/A 15.0% the $ 142Deficit $ 141 $ 844 Annual Drivers License Surcharge $1.00 Surcharge = $ 214 $ 217 N/A $5.00 $ 1,072 $ 1,116 $ 6,694 Annual Highway Commission Miles Traveled Fee (All and Light Duty the Vehicles)* U.S. Chamber 1 /VMT = $ of 6,499Commerce $ 6,566 N/A 2.0 endorsed $ 12,998 $ an 13,475 increase $ 80,851 Annual Highway Miles Traveled Fee (All Trucks)* 1 /VMT = $ 908 $ 917 N/A 3.0 $ 2,723 $ 2,823 $ 16,936 in the gas user fee Annual Registration Fee (Light Duty Vehicles) $1.00 Fee = $ 248 $ 252 N/A $10.00 $ 2,482 $ 2,614 $ 15,682 Annual Registration Fee (Trucks) $1.00 Fee = $ 9 $ 9 N/A $15.00 $ 129 $ 131 $ 787 Container Tax $1 per TCU= $ 391 $ 401 N/A $15.00 $ 5,866 $ 6,401 $ 38,408 Dedicated Income Long Tax - term, Business both federal transportation 0.1% of current taxes = $ 198 $ commissions 329 N/A 1.0% endorsed $ 1,984 $ 4,291 the $ 25,745 Dedicated Income Tax - Personal 0.1% of current taxes = $ 956 $ 1,141 N/A 1.0% $ 9,560 $ 15,429 $ 92,576 vehicle-miles-traveled user fee to fund the program Harbor Maintenance Tax 0.1% Tax = $ 1,236 $ 1,267 N/A 0.5% $ 6,181 $ 6,745 $ 40,472 Imported Oil Tax $1.00/Bbls = $ 3,528 $ 3,528 N/A $1.00 $ 3,528 $ 3,528 $ 21,171 Sales Tax on Auto-related Parts & Services 1.0% of Sales = $ 2,327 $ 2, % $ 2,327 $ 2,613 $ 15,680 Sales Tax on Federal Diesel lawmakers need to look 1.0% of Sales to = $ the 850 $ states 852 N/Aand 10.6% methods $ 9,013 $ they 10,862are $ 65,172 Sales Tax on Gas 1.0% of Sales = $ 3,347 $ 3,441 N/A 8.4% $ 28,112 $ 34,108 $ 204,647 using to raise additional transportation funds Sales Tax on New and Used Light Duty Vehicles 1.0% of Sales = $ 2,619 $ 2,619 N/A 1.0% $ 2,619 $ 2,619 $ 15,715 Sales Tax on New Light Duty Vehicles 1.0% of Sales = $ 1,625 $ 1,625 N/A 1.0% $ 1,625 $ 1,625 $ 9,752 Share of US Customs Revenues 1% of Receipts = $ 277 $ 298 N/A 1.0% $ 277 $ 360 $ 2,161 Tire Tax on No Light Duty single Vehicles funding option is likely $1.00 Fee = to $ be 1,862 a $ 1,889 panacea N/A $3.00 $ 5,585 $ 5,881 $ 35,284 Ton Freight Charge -- All Modes 1 /ton = $ 164 $ 169 N/A 25.0 $ 4,111 $ 4,565 $ 27,389 Ton Freight Charge -- Truck Only 1 /ton = $ 113 $ 117 N/A 25.0 $ 2,835 $ 3,148 $ 18,890 Ton-Mile Freight It is Charge time -- All Modes for Congress to do their 1 /ton-mile = job $ 43,497 and $ 44,802 make N/A the 0.5 tough $ 21,748 decisions $ 24,150 $ 144,898 Ton-Mile Freight Charge -- Truck Only 1 /ton-mile = $ 12,731 $ 13,113 N/A 0.5 $ 6,365 $ 7,068 $ 42,409 US Freight Bill they -- All Modes were elected to make 1% of Sales = $ 7,612 $ 7,840 N/A 1.0% $ 7,612 $ 8,452 $ 50,713 US Freight Bill -- Truck Only 1% of Sales = $ 6,608 $ 6,807 N/A 1.0% $ 6,608 $ 7,338 $ 44,028 *VMT fee estimates refer to miles traveled on Interstate System. Shading indicates funding options rated as "strong" by the National Surface Transportation Financing Commission

12 Safety Will Continue To Be #1 Priority As an industry, we need to have the highest degree of commitment to employee safety and health It s unquestionably the right thing to do, but it s good business as well

13 U.S. Aggregates Operations Dollars Assessed vs. Injury Incidence Rates $ Dollars Assessed $20 $15 $10 $5 $ Total dollars assessed by MSHA (in millions) Total injury incidence rates (per 200,000 hours) $7.0 $6.9 $7.4 $6.3 $5.3 $ $11.3 $ $ $20.4 $17.0 $ Injury Incidence Rate 0.5 $

14 MSHA Regulatory Agenda: Major Rules Pattern of violations Civil penalty reform Mine identification Crystalline silica

15 POV Rule: NSSGA Litigation with NMA and PCA Case being heard in 6 th Circuit Court of Appeals Briefs will be filed in June 2013 Oral arguments expected in early 2014 MSHA should follow the letter and spirit of the Mine Act Current rule allows agency to violate operator s due process rights

16 Minerals Definition: The Facts

17 Minerals Definition: The Challenge

18 Minerals Definition: Competing Solutions Legislation Science Accurate definitions Reliable analytical methods Threshold level that is based on sound science

19 Environmental Issues NSSGA members work diligently to be good stewards of the environment However, NSSGA will challenge: Unattainable air and water standards Revocation of existing permits Regulations that go beyond the intent of the Clean Water Act and Clean Air Act

20 EPA Jurisdictional Guidance and Rule Regulate isolated ponds, wetlands, dry stream beds and ditches Complicate/slow CWA 404 permitting Goes far beyond court decisions Underestimates economic impacts NSSGA supports Senate and House bills/riders denying funding for this EPA action

21 Examples of Waters of the U.S.

22 Building Bridges to NSSGA s Constituencies State associations

23 Building Bridges to NSSGA s Constituencies State associations M & S

24 Building Bridges to NSSGA s Constituencies State associations M & S Like-minded associations

25 Building Bridges to NSSGA s Constituencies State associations M & S Like-minded associations Governors

26 Governor s Transportation Coalition Mission Build support for timely passage of a long-term, well-funded surface transportation program Create coalition of suppliers, contractors, highway users and safety groups to engage governors Unify the voices of key governors to deliver critical messages to Washington Purpose Raise the alarm for action now Use key governors to drive the debate in Washington Coordinate state activities to pressure Congress

27 Governor s Transportation Coalition Approach Engage former Governor Ed Schafer as Chairman Enlist leading Democratic and Republican governors as co-chairs Recruit small Advisory Board to leverage private sector efforts Develop and implement aggressive public affairs campaign to engage key governors Leverage support with key members of Congress, the Administration and the media

28 Governor s Transportation Coalition Key activities Recruit and engage leadership and key governors Launch countdown clock number of days to Highway Trust Fund bankruptcy at summer NGA meeting Meet with governors in state action events across the country Engage state media Impact gubernatorial races 2013: NJ and VA 2014: 36 states Promote model state solutions (MD, VA) Enlist gubernatorial support for federal legislation

29 NSSGA s New President and CEO Mike Johnson assumes position August 1 Succeeds R.A. Gus Edwards, retiring after 16 years Currently EVP and Chief Advocacy Officer for National Beer Wholesalers Association Instrumental in developing and advocating their strategic, membershipfocused agenda Achieved public policy objectives and reinvigorated membership programs Familiar with construction industry from five years with National Association of Home Builders Named Leading Association Lobbyist in 2012 and a Young and Aspiring Association Executive in 2007 Bachelor s degree in political science and journalism from University of Kentucky in Lexington

30 Building Bridges To Our Future