McGraw Hill Construction - Dodge U.S. Construction Outlook for the 20th Annual CFO Roundtable and Tax Director Workshop September 2014 Keven McCook Senior Director Contractors and Services McGraw Hill Construction 1 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. Agenda U.S. Construction Market Indicators and Sectors The Environment -- Macroeconomic Picture Single Family Housing and Multifamily Housing Commercial Building Institutional Building, plus Manufacturing Bldgs. Public Works and Electric Utilities Total Construction Forecast 2 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Construction Market Indicators Both Construction Starts and Construction Spending show there’s a recovery underway. Construction starts – the full value of a project is entered into the month in which work begins. Comes from actual project report. Construction put in place or spending – work as . it occurs, estimated for a given month from a sample of projects. In effect, the impact of a project is spread out from the project’s start to its completion. 3 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Construction Market Indicators Total Construction Starts will lead the pattern for Construction Spending. • Construction starts have led the pattern of construction spending in the 2010-2011 upturn. • The percent change for 2012 was similar – starts up 10% and spending up 9%. In 2013, starts up 9% and spending up 6%. • The starts data tends to show wider swings than spending . . Non-Residential Construction Construction spending (MHC basis) up only 1% in 2013 Expect stronger spending gains in 2014 and 2015 As non-res construction continues its expansion 4 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Construction Sectors (Starts) The pattern has varied by major sector. Residential upturn has paused; commercial still heading up; institutional turning the corner; public works now weakening. 5 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 +31% +26% +12% +20% +27% +3% +25% +19% +10% +13% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 +9% -10% -12% +5% +10% -9% 0% McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. 4% +10% +17% U.S. Construction – Dodge Momentum Index The Dodge Momentum Index offers insight on what lies ahead. The Dodge Momentum Index (DMI) tracks the first (or initial) reports for nonresidential building projects at the design stage (architect selected). Some recent points: • The DMI bottomed out in July 2011, and has been trending upward tenuously since that time. • Hesitation in DMI indicated that early stage of recovery would be subject to pauses. • The DMI has picked up some of the timing shown by commercial and institutional starts. Increases in DMI for institutional component during 2013 suggests that the decline for this sector overall is reaching an end. 6 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. TITLE STATE PROJECT TYPE(S) OWNER: COMPANY NAME North Building Apartment Tower (Chicago, IL) IL Apartments Saxony Capital Sophia Square Apartments & Retail Building IN Apartments 4+ Stories Keystone Realty Group West Hollywood Park Ph II Recreation Center CA Athletic Facility City of West Hollywood Multi-Generational Community Recreational Facility NM Athletic Facility City of Hobbs RFP/CM: Choctaw Nation Durant Medical Clinic OK Clinic/Medical Office Choctaw Nation Hospital / Health Services Auth Daniels Chemistry Building (Addition) WI College/University State of Wisconsin Dept of Plan Distribution School of Dentistry WV College/University University Of West Virginia Board Of Trustees CHS Seismic Correction and Fire Safety CA College/University University of California, Los Angeles (UCLA) UNC Campus Commons Building CO College/University University of Northern Colorado Instructional Science Facility (Ph 1) WI College/University State of Wisconsin Dept of Plan Distribution North Central College Science Center IL College/University North Central College Univ of Wisconsin Haas Fine Arts (Renovation & Add) WI College/University State of Wisconsin Dept of Plan Distribution School of Engineering / Brain Science Building RI College/University Brown University Department of Facilities Mgmnt. Student Services Center MD College/University Montgomery College Office of Procurement UIUC Everitt Lab Bioengineering (Renovation) IL College/University University of Illinois Facilities & Services Franz Hall Seismic Renovation & Related Projects CA College/University University of California, Los Angeles (UCLA) Hospital Patient Care Facility (Renov/Upgrade) Ph 1F KY College/University; University of Kentucky (UK) Central Purchasing Grosvenor Townhouse Development MD Condominiums 1-3 Stories EYA Const Inc IIT Innovation Center Chicago, IL IL Education Building Illinois Institute of Technology RFQ/AE: Arkansas State Veterans Home AR Elderly/Assisted Living Arkansas Department of Veterans Affairs Fulton State Hospital MO Hospital Missouri Department of Mental Health Hotel Indigo (Conversion) GA Hotel/Motel Intercontinental Hotels & Resorts High School #4 (Lease/Leaseback) CA Middle/Senior High School Perris Union High School District RFP/GC: South Region High School #8 w/Gym CA Middle/Senior High School Los Angeles Unified School District High School KY Middle/Senior High School Fayette County Public Schools Scott County High School & Athletic Facilities KY Middle/Senior High School Scott County Board of Education Swatara Plaza at The Concourse Mixed Use PA Mixed Use Smith Land Improvement Corp Outer Harbor Future Development (161 acres) Master Plan NY Mixed use Erie Canal Harbor Development Corp Toyota Corporate Campus (New) TX Office Toyota Manufacturing Texas Office Park Development (San Jose Megaproject) CA Office Peery Arrillaga Amtrak 30th Street Station Development PA Passenger Terminal AmTrak Intermodal Transportation Hub/St Car Project OK Passenger Terminal City of Oklahoma City (And Its Trusts) New Elementary School (Thomas Jefferson MS site) VA Primary School Arlington County Public Schools Purchasing Dept Maine Correctional Center Rebuild/Reuse Feasibility ME Prison/Jail State of ME Dept of Corrections Clarksburg Premium Outlets at Cabin Branch MD Regional Shopping Mall Aventist Healthcare Wastewater Treatment Plant (Renovation/Addition) MT Sewage Treatment Plant City of Billings Public Works, Engineering Div. Kennesaw Shopping Center Whole Foods Store GA Shopping Center Fuqua Development LLC Gaylord Stadium OK Stadium; The University of Oklahoma Board of Regents EWU Science II- Biology and Geology Building WA Univ Education Building Eastern Washington University, Project Manager 7 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. Edith Transfer Station/Office/Truck Maintenance NM Vehicle Service City of Albuquerque CIP Divsion U.S. Non-Residential Building ARCHITECT: COMPANY NAME Hartshorne Plunkard CSO Architects, Inc. LPA Inc Barker Rinker Seacat Architecture James R Childers Architect, Inc. Strang Inc Einhorn Yaffee & Prescott Zimmer Gunsul Frasca RNL Design River Architects Inc Holabird & Root, LLC HGA (Hammel Green Abrahamson Kieran Timberlake Assocs LLP Cho Benn Holback Architects, Inc. BSA LifeStructures CO Architects GBBN (Louisville) Lessard Design John Ronan Architect Polk Stanley Wilcox Parsons Brinckerhoff John Portman & Associates Baker Nowicki Design Studio DLR Group WWCOT Architects Tate Hill Jacobs Architects Sherman Carter Barnhart Architects Smith Land Improvement Corp Perkins & Will Corgan Associates Inc Kenneth Rodrigues & Partners Skidmore Owings & Merrill TAP Architecture VMDO Architects, PC S M R T Architects & Engineers Architects Orange HDR Engineering Pieper O'Brien Herr Architects Populous Architects PC LMN Architects J R Miller & Associates Projects in the Dodge Database that will lead the way to further growth U.S. Macroeconomic Picture On balance, the pace of economic growth has been subdued – expansion followed by deceleration. Improved 2nd half of 2013 followed by a down Q1 and an up Q2. GDP Pattern: History 2009 -2.8% Forecast 2010 2011 2012 2013 2014 2015 +2.5% +1.6% +2.3% +2.2% +2.1% +3.2% Shape of Recovery: • • 8 One caution: The second-quarter GDP report up 4.2% - came from inventory building rather than final demand. For 2015 and 2016, we predict GDP growth will be 3.2% and 3.5%, respectively, followed by deceleration as we see long term interests move up. • Subdued – Periods of moderate expansion have been followed by deceleration. • Recent positives - corporate profits healthy, GDP in 2013 Q3 (+4.5%) fairly strong. FY 2014 federal budget passed in January. Debt ceiling battle averted. • In 2014 Q1, adverse winter weather, slower buildup of inventories by firms, weak exports dampened GDP (-2.1%). McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Macroeconomic Picture Recent employment statistics provide a relatively upbeat view of the US Economy. After a slow start, the pace of job growth finally topped the jobs lost during the recession. • Jobs lost from Feb.’08 to Feb. ’10: 8.7 Million. • Job creation so far in 2010-2014: 9.5 Million. Unemployment rate at 6.1% • Job growth in Jan.’13-Nov.’13: in Dec.’13-Jan.’14: 204,000 /mo. 114,000 /mo. in Feb.‘14.-Aug.‘14: 226,000 /mo. • Construction employment during 2013 was up 3%, slightly stronger than the 2% gain reported in 2012. 9 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Macroeconomic Picture Long term interest rates edged up in late spring 2013. Federal Reserve began to taper bond purchases in January 2014 - not much rise yet in long-term rates. • Since Dec. 2008, the federal funds rate target set at 0% to .25%. • Federal Reserve expects “exceptionally low levels for the federal funds rate at least through mid-2015.” 10 • At its December 2013 meeting, Fed announced it would reduce bond purchases from $85 billion per month to $75 billion per month in January. Bond purchases at next five meetings reduced by $10 billion. Now, proceeding at $25 billion per month, likely to end by Oct./Nov. McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Macroeconomic Picture Other long-term interest rates are still low. Inflation has been subdued, but there’s emerging concern about rising food and energy prices. By the end of August, the 10-year municipal bond rate and the 30-year fixed mortgage rate stood at 2.2% and 4.1%, respectively 11 The year-over-year change in the CPI moved above 2% in May 2014, for the first time since mid-2012. In July, year-over-year change was 2.0% for the CPI, 1.9% for the core CPI. McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Macroeconomic Picture Lending standards for commercial real estate loans continue to show gradual easing. • Lending standards for commercial real estate loans have eased for 14 straight qtrs. •Impact of financial regulatory reform? • Lending standards for C&I loans have eased for 18 out of 19 quarters. • Mortgage Bankers Survey results – • But, lending standards for residential mortgage loans showed little or no easing through 2014 Q1. In 2014 Q2 – a shift? 18% of respondents reported easing of lending standards. 12 commercial and multifamily mortgage originations up 24% in 2012, up 15% in 2013, steady during 2014 first half McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Macroeconomic Picture Some uncertainty related to federal fiscal matters has eased for now. GSA to get modest funding hike in 2014. Fed. budget deficit large but shrinking. Fed. 2014 Spending Bill Finalized in mid-January. • Follows Dec. 8 budget agreement in Congress, that eased expected sequestration cuts by $63 billion over two years and lifted overall discretionary spending by $44.5 billion. • GSA new construction account gets $506 million, up from 2013’s $50 million. • Military construction cut by 8% to $9 billion. • .Federal-aid $12.3 Billion June legislation that made surprising progress; Water Resources Reform and Development Act (WRRDA) $12.3 (34 new USACE plus 8 mods) $10,8 Billion August “patch” keeps Highway Trust Fund solvent thru May 15 highway obligation limit increased by $557 million to $40.3 billion, tracking the MAP-21 level. • Airport Improvement Program grants held at $3.35 billion. • Corps of Engineers civil works program lifted 10% to $5.5 billion. (Comparison excludes post-Sandy repairs.) • Clean water SRF’s get $1.45 billion and drinking water SRF’s get $907 million, flat versus 2013. 13 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Macroeconomic Picture State fiscal health improving, although still fragile for some states. With interest rates low, more State construction bond measures are getting passed. State and local bond measures are providing positive news for construction. About 75% of statewide bond referendums have been approved totaling $3.2 billion, as well as almost $36 billion in local measures. Voters in NJ approve a measure to borrow $750 million for university construction projects – first measure since 1988. San Diego voters approved $2,8 billion in bond measures for school renovations and computer upgrades. Houston voters approved $1.9 billion for school construction Note: For fiscal year 2014, if TX (+21%) and AK (175%) excluded, then year-end balance is 3.0% down from 5% in 2013 – translating into fiscal caution. • Structural challenges remain; the need to fund pensions and infrastructure work plus deal with the increasing cost of healthcare and education. Public Private Partnerships are an opportunity as states and local governments seek new ways to finance construction projects. The rise in tax collections was smaller (up 1.2%) compared to what took place in fiscal 2013 (up 7.1%). 14 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Single Family Housing Since 2012, single family housing on upswing. However, starts paused in first half of 2014. Home sales, after stalling recently, have been mixed. 2005 2011 Peak Trough 1.6 mil. 0.4 mil. -75% 15 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Single Family Housing Job growth, low inventories, low mortgage rates should help single family housing rise But, first-time homebuyers having trouble entering market. • Inventory of new homes for sale fell to 3.9 months in January 2013, lowest since 2004 before edging back up to 5 months. • Record low mortgage rates – reached 3.3% In late 2012. Moved back up to 4.6% over the summer 2013, although then have settled back. Beginning August, 30-year fixed rate at 4.1%. • Beginning in Q2, lending standards for home mortgages while tight, appear to be loosening. •The 20% down payment requirement is still restraining first-time homebuyer demand. • Demographic demand: 1 to 1.2 million units per year. However, will “Millennials”, burdened by student debt, stay in urban apartments and becoming purchasers? 16 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Multifamily Housing Construction has shown steady gains since 2010, still going…2017? 2005 Peak 530 K 2009 Trough 136 K -74% • Apartments led early upturn. • Some benefit from stimulus act -Affordable housing projects received a boost. • Helped by push for downtown redevelopment. • Demographics supportive, from both empty-nesters and now young adults. • Rental vacancy rates retreating, rents have been increasing. • Condominium projects now picking up. • Compared to commercial building, still a relatively attractive investment target given more stable revenue. . 17 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Multifamily Housing Recent Large Projects Value Dwelling City State Year: Mo Luxury Residential/Hotel Redevelopment - 70 Pine St. New York NY 2013:11 800 Residential Development - 626 First Avenue New York NY 2014:02 400.0 160 Apartment Building - 220 Central Park South New York NY 2014:03 395.0 191 Condominium Apartment Building - 50 West St. New York NY 2014:01 390.0 195 The Greenwich Lane Condos - New & Conversion New York NY 2013:07 365.0 760 625 W 57 ST Apartment Building New York NY 2013:04 334.0 450 Millennium Tower Bldg. Mixed Use- multifamily portion Boston MA 2013:09 330.2 581 The Hub Downtown Brooklyn Apartment Tower Brooklyn NY 2014:03 322.0 271 Apartment Tower - 252 E. 57th St. New York NY 2014:02 295.0 1,168 Atelier II Apartment Building New York NY 2013:02 267.5 309 Ritz Waikiki Tower Residences Honolulu HI 2013:10 $ Millions Units 450.0 616 425.0 18 Start Date McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Multifamily Housing Top 10 Metros – 2013 vs. 2012. Based on Dollars. Top 10 Metros Jan.-July 2014 Ranked by Dollars % ch from a year ago 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 19 New York NY Washington DC Los Angeles CA Miami FL Boston MA San Francisco CA Dallas-Ft. Worth TX Denver CO Seattle WA Phoenix AZ McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. +56% +41% +67% +24% -28% +61% -8% +5% +4% +17% U.S. Multifamily Housing New York Multi-Residential Projects Breaking Ground in 2014 PROJECT TITLE CITY Residential Development New York Apartment Building New York Condominium Apartment and Commercial Building New York Mixed Use Building (Apartments/Retail) Astoria The Hub Downtown Brooklyn Apartment Tower & Stores Brooklyn 271 Unit Apartment Tower -Retail -Swimming Pool Devel PH II New York Mixed Use Building At 590 Fulton ST - AKA 250 Ashland Place Brooklyn Apartment Building Astoria Apartment Building New York Historic Temple Court Hotel & Condo Add/Renovations New York Mixed Use Building Brooklyn Apartment Bldgs - Retail - Garage at High Line New York 610 Lexington Avenue Condominiums New York River Tides Luxury Rental Apartments Yonkers Mixed Use Apartment and School Development New York Apartment Building/Parking Long Island City Apartment Building New York 17 MULTI-RESIDENTIAL PROJECTS STARTED JAN THRU JULY Started 2014:02 2014:03 2014:01 2014:07 2014:03 2014:02 2014:02 2014:04 2014:04 2014:06 2014:05 2014:04 2014:05 2014:07 2014:04 2014:05 2014:01 4 in Los Angeles, 4 in Virginia, 3 in NJ 20 20 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. Thous $ Thous SqFt 853 $ 425,000 $ 400,000 472 $ 395,000 584 $ 350,000 786 $ 330,200 686 $ 322,000 617 $ 240,000 582 $ 175,000 399 $ 125,000 403 $ 120,000 175 $ 111,000 409 $ 105,787 338 $ 105,000 274 $ 97,000 354 $ 95,000 304 $ 94,000 337 $ 90,000 290 $ 3,579,987 7,861 U.S. Commercial – Office Buildings Construction has stabilized, with upward trend gaining momentum. 2007 Peak 218 msf 2010 Trough 57 msf -74% • Market fundamentals -vacancies peaked in 2010, now retreating. CB Richard Ellis for 2014 Q2 – Downtown office vacancy rate at 11.8% Suburban office vacancy rate at 15.9% • Much of recent activity -Data Centers Government office buildings Corporate buildings, including headquarters. 21 • Corporate earnings have been strong. Will that translate into more corporate headquarters? • A few signs that speculative development is picking up. McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Commercial – Office Buildings Office vacancy rates receding, but in a more gradual manner than prior upturns. 22 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Commercial – Office Buildings Recent Large Projects – Data Centers, Government Office Buildings Value Sq. Ft. Start Date $ Millions Thous. 23 City State Year: Mo 860.6 600 High Performance Computing Center - U.S. Army Ft. Meade MD 2013:06 300.0 476 Facebook Data Center (Building 1) Altoona IA 2013:08 200.0 96 Fidelity Investments Data Center Papillion NE 2013:05 200.0 190 Travelers Insurance Data Center Springfield NE 2014:04 150.0 242 Capital One Data Center Richmond VA 2013:01 250.0 0 International Monetary Fund HQ 1 Renovation Washington DC 2013:05 191.6 300 Social Security National Support Center Urbana MD 2013:02 118.9 696 National Science Foundation HQ Hoffman Block 8 Alexandria VA 2014:04 100.0 1,500 Health & Human Servics Office - Ph 1 Shell Rockville MD 2013:08 100.0 UN General Assembly Building (Renovation) New York NY 2013:06 0 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Commercial – Government Office Building Profile National Science Foundation Headquarters in Alexandria, Virginia Owner-Builder/Developer Architect Civil Engineer Electrical Engineer Structural Engineer Mechanical Engineer General Contractor Plumbing Earthwork Hoffman Buildings LP WDG Architecture LLC LSG Architecture Allen & Shariff Tadjer Cohen Edelson Associates Inc Allen & Shariff Balfour Beatty Construction John J Kirlin Inc William B Hopke Co Inc Some of the Owners working with Balfour Beatty Rank 1 2 3 4 5 6 7 8 9 10 24 Firm The JBG Companies USACE George Mason University USACE Bainbridge EPN-SSPO Turkish American Islamic Foundation Georgetown Strategic Capital First Potomac Realty Trust Rolls-Royce North America McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. State MD TX VA AL MD VA MD DC MD VA Projects 4 4 2 2 1 1 1 1 1 1 U.S. Commercial – Office Buildings Recent Large Projects – Breaking Ground in 2014 Corporate office buildings and private development TITLE CITY STATE Started Apple Corporate / Headquarters Building / Parking Downtown East Offices/Apartments/Retail/Parking Garage 609 Main at Texas Office And Parking Garage Crescent McKinney and Olive Mixed Use Development 100 Northern Ave Office Building - Fan Pier (Core & Shell) River Point Office Tower/Parking FMC Tower at Cira Centre South Phillips 66 Headquarters Buildings RA4 Intel Office Building National Science Foundation/Garage HQ Hoffman Block 8 ZEN Building (Design/Build) Conde Nast (Fit-Out) Constellation Exelon Corporation - Headquarters Bldg/Garage Frost Office Bldg/Parking Garage Columbia Square Office Buildings & Parking Garage Riata Vista Office/Parking Phase 2 3737 Buffalo Speedway Office Building (Phase 1) Cupertino Minneapolis Houston Dallas Boston Chicago Philadelphia Houston Hillsboro Alexandria Albany New York Baltimore San Antonio Los Angeles Austin Houston CA MN TX TX MA IL PA TX OR VA NY NY MD TX CA TX TX 2014:05 2014:07 2014:04 2014:07 2014:03 2014:06 2014:06 2014:01 2014:07 2014:04 2014:02 2014:03 2014:06 2014:02 2014:03 2014:03 2014:03 25 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. Thous $ 2,341,000 252,306 196,000 169,500 160,000 146,000 142,650 125,000 125,000 118,900 102,500 100,000 96,922 92,050 92,000 87,288 83,000 Thous Sq Ft 2,800 1,200 1,250 480 516 1,250 627 1,100 500 696 475 0 264 434 330 524 400 U.S. Commercial – Office Buildings Top 10 Metros – 2013 vs. 2012. Based on Dollars. Top 10 Metros Jan.-July 2014 Ranked by Dollars % ch from a year ago 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 26 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. San Jose CA +862% New York NY -8% Houston TX +159% Washington DC -34% Boston MA +16% Chicago IL +58% Dallas-Ft. Worth TX -60% Seattle WA -16% Minneapolis MN +3712% San Antonio TX +327% U.S. Commercial - Hotels Hotel construction up sharply in 2011-2012; more growth underway. 2007 Peak 85 msf 2010 Trough 17 msf -80% • More positives now: Business travel has improved Industry financials stronger • Casino building becoming more active • Several major projects reaching groundbreaking. • Occupancies for 2013 at 62.3% Revpar for 2013 up 5.4%, 2014 ytd up 7.5% 27 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Commercial – Hotels Recent Large Projects TITLE Marriott Marquis Hotel And Swimming Pool Cleveland Convention Center Hilton Hotel (Design/Build) Hilton Hawaiian Village Grand Islander Time Share Towers Metropolis Mixed-Use Development (Phase I) MOA Luxury Hotel/Retail/Restaurant/Parking/Pool Convention Center Hotels (2) Aloft & Element /Parking Garage Great Wolf Lodge Resort Hotel & Water Park/ Swimming Pool 28 CITY State Houston TX Cleveland OH Honolulu HI Los AngeleCA Minneapoli MN Boston MA Garden Gr CA Started 2014:05 2014:05 2014:07 2014:07 2014:03 2014:06 2014:04 Thous $ Thous Sq Ft 272,200 864 260,000 600 190,000 550 114,200 274 95,000 300 92,000 377 90,000 495 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Commercial - Warehouses Warehouse construction showed healthy percent growth; expansion maturing. 2007 Peak 254 msf 2010 Trough 49 msf -81% • Vacancy rates are easing. Reached 14.5% in 2010 Q2, and have since retreated to 10.8% in 2014 Q2. • Some larger regional facilities being built by major retailers. In 2011-2013, several large facilities built for Amazon.com. • Continued need for updated facilities to handle improved inventory management practices. • Increased trade would help lift demand for warehouse space Imports/exports likely to be dampened in near term, due to global economic slowdown. 29 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Commercial – Warehouses Recent Large Projects Thous Sq Ft TITLE STATE Started Thous $ Distribution Center Expansion Project - Urban Outfitters PA 2014:01 105,000 1,000 30 Nordstrom Online Order Fulfillment PA 2014:02 1,142 McGraw Hill Construction Confidential. AllCenter information presented @ McGraw Hill Construction, 2014. All rights reserved. 79,000 U.S. Commercial - Warehouses Other Warehouse Characteristics – Average Project Size. 31 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Commercial - Stores After steep decline in 2008-2010, store construction is growing – but slowly. 2007 Peak 312 msf 2010 Trough 81 msf -74% • Derived demand from housing market – definitely true on the downside of the cycle; also present on the upside of the cycle. • Recent retail sales have fluctuated. Payroll tax increase could be a negative for consumer spending in near term. • Some outlet mall projects starting, along with projects by a few major retailers. • Extreme discounters (Family Dollar, Dollar General) still expanding. • Store renovations have seen much smaller decline. 32 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Commercial - Stores Construction by Major Retail Chains. Major Retail Chains Projects Started during 2013 Millions of Dollars 33 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Commercial – Stores Recent Large Projects TITLE CITY STATE Started Thous $ International Market Place (Redevelopment) Honolulu HI 2014:04 215,600 Mountain Grove at Citrus Plaza Redlands CA 2014:06 137,500 34 Bloc Downtown The Renovation/Transformation Los AngeCA 2014:04 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. 80,000 Thous Sq Ft 357 670 0 U.S. Commercial - Stores Other Store Characteristics – Alterations and Average Project Size. 35 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Institutional – Educational Buildings The decline for educational buildings reaching an end. 2008 2013 Peak Trough 224 msf 110 msf -51% • Several large bond measures passed in November 2012 elections, in Texas, California, New Jersey, among other states.. • College endowments investment returns increased 12% in 2013, after being basically flat in 2012. • Major universities now re-visiting deferred capital spending plans. 36 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Institutional – Educational Buildings K-12 school construction larger and more volatile than colleges/universities. Sq. ft. for K-12 school construction was 3.3 times the size of Colleges/Univ./Comm. Colleges. 37 Dollars for K-12 school construction were 2.1 times the size of Colleges/Univ./Comm. Colleges. McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Institutional – Educational Buildings Large Projects Started in 2013 for Comparison 38 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Institutional – Educational Buildings Recent Large Projects – Breaking Ground in 2014 TITLE U of Buffalo School of Medicine and Biomedical Sciences - P1 20 Washington Road (Re-Purpose) David Starr Jordan High School (Renov) (Lease/Leaseback) RFQ/SUB: Winchester High School (Renovation/Addition) Interdisciplinary Science & Engineering Complex / ISEC Roosevelt High School (Renovation)(Design/Build) Paul L. Foster Campus for Business & Innovation 12th High School (East) Bentonville West High School/Gymnasium Severna Park High School - Gymnasium UT Strong Hall Science Laboratory Facilities Patricia R Guerrieri Academic Commons (Design/Build) U of ND School of Medicine and Health Sciences Building UTD Bioengineering and Sciences Building Laramie High School Allen Institute for Brain Science Phillipsburg High School (PHILLIPSBURG SD) Leander ISD High School #6 Agricultural Sciences Building New/Addition 39 CITY Buffalo Princeton Long Beach Winchester Boston Washington Waco Manassas Centerton Severna Park Knoxville Salisbury Grand Forks Richardson Laramie Seattle Phillipsburg Leander Morgantown STATE NY NJ CA MA MA DC TX VA AR MD TN MD ND TX WY WA NJ TX WV Started 2014:04 2014:01 2014:02 2014:07 2014:04 2014:06 2014:01 2014:05 2014:07 2014:06 2014:01 2014:07 2014:04 2014:01 2014:07 2014:07 2014:07 2014:05 2014:01 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. Thous $ 251,300 155,000 135,600 129,923 115,000 104,000 100,000 97,907 94,000 93,999 92,000 90,000 90,000 86,450 85,800 84,400 80,490 79,000 76,898 Thous Sq Ft 625 0 0 30 180 0 286 379 370 354 268 220 320 223 300 271 330 347 240 U.S. Institutional – Educational Buildings Top 10 States – 2013 vs. 2012. Based on Dollars. Top 10 States Jan.-July 2014 Ranked by Dollars % ch from a year ago 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 40 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. Texas +10% New York +44% California -23% Illinois +31% Virginia +20% Massachusetts -6% Georgia -6% Pennsylvania -11% New Jersey +101% Ohio +26% U.S. Institutional – Healthcare Facilities The recovery for healthcare facilities remains on hold. 2006 Peak 110 msf 2009 Trough 68 msf -38% Based on Sq. Ft. 2013 2014 YTD Clinics +11% -13% Hospitals -11% -27% • Hospital chains hard-hit in 2009 by tight credit conditions. • Debate over healthcare reform created near-term uncertainty. • U.S. military Veterans Admin. projects helped to ease some of the slowdown. • Now – uncertainty over reduced Medicare reimbursements, Affordable Care Act implementation More healthcare mergers. • Sector still supported by – Need to replace aging facilities Growth of elderly population. Move toward “hub-and-spoke” system. 41 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Institutional – Healthcare Facilities Large Projects from 2013 for comparison 42 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Institutional – Healthcare Facilities Recent Large Projects – Breaking Ground in 2014 TITLE STATE CPMC Van Ness and Geary Campus Hospital & GCA Kaiser Permanente Central Hospital Kearny Mesa CA VCMC Replacement Hospital Wing Project DesignCA Centegra Hospital & Medical Office Building IL Cook Children's South Tower Shell TX Good Shepherd Hospital (Renovation/Addition) IL Golisano Children's Hospital of Southwest Florida FL Kapiolani Medical Center Expansion - Phase I HI Methodist Mansfield Hospital (Add/Renovs) TX Medical Research & Translation Building (Core & SNY Children's Hospital (convert City Centre) TX UW Medical Center Expansion Phase II WA Scripps Clinic John R Anderson V Medical PavilionCA WVU Ruby Memorial Hospital Expansion/Renovat WV 43 Started 2014:06 2014:03 2014:04 2014:05 2014:07 2014:05 2014:06 2014:04 2014:05 2014:04 2014:01 2014:04 2014:05 2014:02 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. Thous $ 900,000 800,000 214,913 209,945 150,000 150,000 142,000 120,000 118,000 95,769 90,000 90,000 83,000 78,000 Thous Sq Ft 740 566 232 375 314 230 292 200 98 225 0 0 175 0 U.S. Institutional – Healthcare Facilities Top 10 States – 2013 vs. 2012. Based on Dollars. Top 10 States Jan.-July 2014 Ranked by Dollars % ch from a year ago 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 44 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. California Texas Florida New York Illinois Ohio Washington Pennsylvania Indiana Virginia +78% -2% 0% -13% +41% -17% +419% -15% -1% +1% U.S. Institutional – Public Buildings Public Buildings experienced lengthy decline, now stabilizing. 2007 Peak 51 msf 2013 Trough 16 msf -69% Based on Sq. Ft. 2013 2014 YTD Detention Facilities -36% -55% Armories/Military -62% -37% Courthouses -21% +81% Police & Fire Stations -4% 0% negligible negligible Post Offices • Received benefits of 2009 federal stimulus act for courthouses, federal buildings, land ports of entry. • Now affected by reduced federal spending for GSA projects, military-related construction. GSA new construction account gets $506 million for 2014 up from $50 million 13. 45 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Institutional – Public Buildings Recent Large Projects TITLE State San Diego County Central Courthouse CA US Courthouse/Fed Bldg/Parking Ph 2(DeCA RFP/SUB: Stockton Courthouse CA The County Courts Project Addn/Renovs (MO Detention Center North Tower Renov (Ph NV Waterbury State Office Complex VT 46 Started 2014:05 2014:03 2014:05 2014:03 2014:03 2014:04 Thous $ 395,500 317,000 200,000 105,000 88,000 80,000 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. Thous Sq Ft 704 600 306 150 0 0 U.S. Institutional – Amusement & Rec. Amusement/Recreational has turned the corner, now heading up. 2007 Peak 73 msf 2012 Trough 33 msf -55% Based on Sq. Ft. 2013 2014 YTD Convention Centers +32% +45% Sports Arenas +8% +161% Theaters +31% +1% Misc. Amuse. (Inc.casinos) +6% -7% • This category is affected by both public and private financial support. • The year 2013 featured several large amusement projects, including -$763 million Vikings stadium in Minneapolis MN $305 million conv. ctr. expan. in San Antonio TX $169 million Horseshoe Casino in Baltimore MD • Casino projects gained momentum. 47 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Institutional – Amusement & Rec. Recent Large Projects TITLE State Started MGM / AEG Arena Jamul Tribe Hollywood Branded Casino UIUC State Farm Center (Renovation/Addition) Billie Jean King National Tennis Center Avatar Land Attraction - Disney Animal Kingdom UNO Community Arena (PPP) NV CA IL NY FL NE 2014:06 2014:07 2014:03 2014:03 2014:01 2014:01 48 Thous $ 375,000 129,326 120,000 110,000 90,000 76,000 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. Thous Sq Ft 650 206 20 0 180 220 U.S. Institutional – Airport Terminals Airport terminal work in 2013 down in sq. ft., but up in dollars. Renovation work supporting dollar gains. 49 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Institutional – Airport Terminals Recent Large Projects 50 Value Sq. Ft. $ Millions Thous. 230.4 0 228.8 Start Date City State Year: Mo Bradley Int'l Terminal Renovation-Aprons Ph 2 Los Angeles CA 2013:12 0 Delta Terminal 5 Renovation Los Angeles CA 2013:05 158.0 0 Charleston SC Airport Terminal (Redevel.) Charleston SC 2013:05 136.0 280 Hobby Airport International Concourse Houston TX 2013:10 105.2 23 SFIA Terminal 3 Checkpoint Project San Francisco CA 2013:07 100.0 0 DFW Terminal A Renovations Ph 2 DFW Airport TX 2013:04 90.0 225 Ft. Lauderdale Terminal 4 Gate Replacement Ft. Lauderdale FL 2013:05 82.3 65 Bradley West Terminal 4 Connector Los Angeles CA 2014:02 75.0 0 DFW Terminal E Renovations Ph 2 DFW Airport TX 2013:05 50.0 40 Greenville Spartanburg Airport (Expan.) Ph 2 Greer SC 2013:01 40.7 121 Minot International Airport New Terminal Bldg. Minot ND 2013:09 37.2 0 Logan Airport Terminals B-E Improvement MA 2013:04 East Boston Signature Flight Support Aviation Facility (Mineta Airport) 1401 AIRPORT BLVD San Jose CA 2014:06 CM/GC Airport Capital LaGuardia Airport 2014. Flushing NY 2014:05 McGraw-LaGuardia Hill Construction Confidential. AllInfrastructure information presented @ McGraw Hill Construction, All rights reserved. 82,000 118,232 270 0 Institutional – Airport Terminals Larger Airport Terminal Projects seem to be getting a boost internationally… Al Maktoum International Airport (Expansion)(Dubai UAE) Quito Airport Expansion - Phase 2 Mexico City New International Airport - Expansion Kuwait International Airport Re-Development Heathrow Airport Resilience Program Terminal 3 Construction at Frankfurt Airport - Phase 1 Aerotropolis Airport Cluster Modernization Porto Alegre International Airport SLCDA Terminal Redevelopment Program Newark Liberty International Airport Terminal A (EWR) Changi Project Jewel Aviation -Retail -Entertainment -Garden Tampa International Airport Gateway Center (MasterReport) JKIA Int'l Aprt Expansion - Terminal 4 (Greenfield) & Runway Lufthansa Technik Aviation Maintenance Building Greater Sudbury Airport Aircraft Hangar Extension of Yard Aircraft Hangar 1 Renovation-Alteration Ph 1 Multi-Purpose Corporate Aviation Hangars PPP Aircraft Maintenance Instructional Building Hangar 1 Renovation-Alteration Ph 1 (Building 7087) 51 DUBAI ARE QUITO ECU MEXICO CITY MEX KUWAIT CITY KWT LONDON GBR FRANKFURT DEU BRASILIA BRA PORT ALEGRE BRA SALT LAKE CITY USA NEWARK USA SINGAPORE SGP TAMPA USA NAIROBI KEN AGUADILLA PRI GARSON CAN SAN SALVADOR SLV CHICOPEE USA WARWICK USA FORT INDIANTOWNUSA CHICOPEE USA Dubai Airports Quiport Netherlands Airport Consultants (NACO) Directorate General of Civil Aviation (DGCA) Jacobs Engineering Group Inc. (Headquarters) Fraport AG Inframerica Consortium (Joint Venture) ANAC / National Civil Aviation Agency - Brazil HOK/Hellmuth Obata & Kassabaum Inc Pierce Goodwin Alexander & Linville (PGAL) Safdie Architects HOK / Hellmuth Obata + Kassabaum Inc Pascall + Watson Architects Lufthansa Technik J L Richards & Associates Ltd State Government of Bahia Woods Peacock Engineering Consultants Inc Louis Berger Group Lobar Inc. P & S Construction Inc McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Manufacturing Buildings Plant construction had a mixed 2013 - sq. ft. down, dollars up. Upward trend for both ahead - In 2014, manufacturing starts will increase by a slight 4% in square footage, while dollar value will increase by 34%. 52 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Manufacturing Buildings Large Projects breaking ground in 2013 for comparison 53 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Manufacturing Buildings Recent Large Projects Starting in 2014 TITLE State Started Chevron Phillips Cracker Ethylene Plant Chevron Phillips Polyethylene Plant 2 Exxon Petrochemical Plant Expansion Dow Chemical Ethylene Plant Propane Dehydrogenation Facility Methanol Unit Chemical Plant - Celanese Clear Lake Facility Thunder Butte Petroleum (Expansion) Oil Refinery RA4 Intel Office Building Pine Bend Refinery (Upgrades) CF Industries Nitrogen Plant Expansion ( Donaldsonville, LA) Calumet Refinery (Expansion) Voestalpine Direct Reduction/Iron Ore Processing Plant Yokohama Tire Plant (Design/Build) Normal Alpha Olefins Plant Expansion Flint Assembly Paint Shop Pandemic Influenza Vaccine Lab/Manuf Building (DESIGN BUILD) Dow Texas Innovation R & D Center Toyo Tire & Rubber Mfg Plant (Expansion) Pha IV Design/Build Natural Gas Processing Facility (Refinery) Design/Build Great Lakes Cheese Company Packaging Plant (Design/Build) 3M Research and Development Lab (Bldg 280) RIO Hub - Crude Oil and Frac Sand Terminal (Phase 1) Colgate-Palmolive Research & Office Bldgs & Parking Garage TX TX TX TX TX TX ND OR MN LA MT TX MS TX MI TX TX GA LA TN MN NM NJ 2014:04 2014:06 2014:07 2014:07 2014:01 2014:03 2014:01 2014:07 2014:03 2014:06 2014:06 2014:07 2014:04 2014:07 2014:04 2014:02 2014:04 2014:01 2014:04 2014:04 2014:02 2014:03 2014:05 54 54 Thous $ 3,000,000 3,000,000 3,000,000 1,700,000 1,200,000 800,000 450,000 450,000 400,000 396,000 375,000 370,000 290,000 200,000 200,000 142,800 111,530 100,000 100,000 100,000 85,000 80,000 79,500 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. Thous Sq Ft 0 0 0 0 0 0 0 500 0 0 0 480 931 0 596 152 580 1,023 0 300 412 0 89 U.S. Public Works – Highways and Bridges Highways and Bridges were lifted by large projects in 2013… Pulling back in 2014 before moving forward again in 2015 … • Substantial lift in 2013 came from large projects, including a portion of the $3 billion Tappan Zee Bridge project across the Hudson River in New York. (Oct. 2013 start). • Fiscal 2014 appropriations – federal highway funding increased slightly (up 1%) as part of January budget agreement. • MAP-21 (Moving Ahead for Progress in the 21st Century) called for transportation funding to receive slight increases through 2014. Contains mechanisms to “stretch” funding. MAP-21 was scheduled to expire on Sept. 30. 55 • A $10.8 billion “patch” to Highway Trust Fund passed by Congress at end of July. Legislation provides funding support for Highway Trust Fund through May 2015, also extends current transportation bill authorization through May 2015. • Successor bill to MAP-21 outlined by Senate. Senate committee. Passage this year unlikely. McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Public Works – Highways and Bridges 2013 Large Projects for comparison Value Start Date $ Millions 56 City State Year: Mo 2,841.6 Tappan Zee Bridge Replacement - structural part Tarrytown NY 2013:10 1,614.4 Ohio River Bridges Louisville KY-IN 2013:06 1,500.0 Goethals Bridge Replacement Staten Isl/Elizabeth NY-NJ 2013:12 1,350.0 Downtown Tunnel/Midtown Tunnel/MLK Expansion Norfolk VA 2013:01 1,040.0 TX/DOT: SH 99 Grand Parkway Expansion TX 2013:06 TX 2013:12 Houston 990.0 IH 35W Reconstruction 798.0 Dallas Horseshoe Project Dallas TX 2013:08 743.3 Raising Bayonne Bridge Roadway Bayonne NJ 2013:08 488.0 CA/DOT Doyle Drive Dist 4 Phase 2 San Francisco CA 2013:03 292.2 MA/DOT: Whittier Bridge/I-95 Improvement Newburyport MA 2013:07 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Public Works – Bridges Large Projects breaking ground in 2014 TITLE State Started Gerald Desmond Bridge Replacement (Design/Build) OH/DOT Bridge Replacement I90 Bridge over Hudson River & I90/I787 Interchange Bridge PA/DOT I-95N: Columbia-Ann St N CT/DOT: I 95 Bridge Replacement Roadway and Bridge Reconstruction MI/DOT I-96 Improvement (Call 601) New HOV Ramp (Verrazano Narrows Bridge) - (RE-BID) NC/DOT Greensboro Western Loop Paving - Drainage (Call#005) LAX Second Level Roadway Repair/NFCTA/WWS/CWTI NC/DOT NC-12 Grading - Drainage -Structure (Call#001) THA-4144 Fox River Bridge Reconstruction Widening I90 RE-BID CA OH NY PA CT PA MI NY NC CA NC IL 2014:03 2014:01 2014:05 2014:02 2014:02 2014:05 2014:02 2014:02 2014:01 2014:04 2014:01 2014:07 57 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. Thous $ 584,550 218,389 146,000 124,940 103,818 94,900 86,589 84,300 80,000 79,995 79,656 75,413 U.S. Public Works – Highways and Bridges Top 10 States – 2013 vs. 2012. Based on Dollars. Top 10 States Jan.-July 2014 Ranked by Dollars % ch from a year ago 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 58 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. Texas California Ohio Pennsylvania Illinois Florida New York North Carolina Virginia New Jersey -10% -13% +17% +45% -2% +5% -18% +22% -54% -17% U.S. Public Works – Environmental Public Works Environmental public works generally declining, although activity picked up in 2013. • Projects generally take longer to reach construction start stage compared to transportation work. • Construction often the result of EPA mandates to local governments. • Fiscal 2014 federal budget offered support to water resources, steady funding for sewers and water. • Water Resources Reform and Development Act ($12.3 billion over ten years) recently passed by Congress. 59 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Public Works – Environmental Public Works Recent Large Water Projects TITLE CITY State Started Brackish Groundwater Desalination Program Davis Woodland Regional Water Supply (Design/Build) Integrated Pipeline (Section 15-1) Mary Rhodes Pipeline Phase 2 - Pipeline Sections A, B, & C Baker Water Treatment Plant San Antonio Woodland Corsicana Corpus Christi Lake Forest TX CA TX TX CA 2014:06 2014:04 2014:05 2014:04 2014:02 Thous $ 107,500 100,000 92,900 84,121 77,521 Recent Large Sewer Projects TITLE CITY State Started Thous $ Owens Lake Dust Mitigation Phase 7A Kaneohe-Kailua Sewer Tunnel Project Virginia Initiative Plant Nutrient Reduction - Contract B Southport Advanced WWT Capacity (Expansion) Waste Water Treatment Plant (Expansion) Fy13 Waste Water Treatment Plant (Design/Build) Hartford WPCF - IPS - Headworks - Odor Control (Alts) Lone Pine Honolulu Norfolk Indianapolis Visalia Seattle Hartford CA HI VA IN CA WA CT 2014:01 2014:01 2014:06 2014:04 2014:05 2014:04 2014:04 208,512 173,144 107,959 100,000 92,318 77,477 76,138 60 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Public Works – “Other” Public Works Diverse set of project types can be volatile. Slipped back in 2013 after strong 2012. • Includes site work, rail-related work, pipelines, airport runways, outdoor sports stadiums. • Pipelines strengthened though 2010, retreated in 2011, made partial rebound in 2012 with segment of Keystone oil pipeline. Major part of Keystone oil pipeline did not start in 2013. In 2013, new pipeline work down by 50%. • Federal mass transit account has fared relatively well, with slight increase for fiscal 2014. • In 2012 -2013 – numerous rail projects – - $877 mil. RTD Eagle commuter rail in Denver CO - $595 mil. SVRT South Bay Extension in San Jose CA -$326 mil. Metro Gold Line in Pasadena CA • High-speed rail plans? Received zero federal funding for fiscal 2012, but still has support of Obama Admin. California high-speed rail project in planning. 61 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Electric Utilities New electric utility starts reached a record high in 2012. Downturn now underway. 62 • Energy Bills of 2005-2007 – provided tax incentives for electric utilities, transmission lines, etc. • Stimulus act provided boost – incentives for alternative sources of electricity generation. • Capacity utilization was at 87% for 2007; utilization retreated to 79% in 2013, reflecting surge of new plants. • Gas-fired plants strong in 2012, down 89% in 2013. • Vogtle and Summer nuclear plants (at $8.5 billion each) started in 2012. Prospects for nuclear plants being reevaluated, however. • Alternative energy power plants very strong in 20102011, but now slipping – 2012 down 33%, 2013 down 35%. • Power lines also strong – 2010 up 52% and 2011 up 8%. But, 2012 slipped 5%, and 2013 down 58%. McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Electric Utilities 2013 Large Projects for comparison 63 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved. U.S. Electric Utilities Large Projects starts in 2014 to date TITLE State Started Thous $ Natural Gas Liquid (NGL) Fractionator Facility Port Everglades Next Generation Energy Center Moxie Liberty Natural Gas-Fired Power Plant (Design/Build) Moapa Solar Generation Facility (Design/Build) Natural Gas Generation Plant Sys Facilities for the East Side Access Project (Package 1) El Cabo Wind Power Farm Carty Generating Station - 440 Megawatts Oakfield Wind Energy Project Wind Farm - Thunder Spirit Buckeye Wind Farm Osage County Wind Farm Design/Build ML&P Power Plant 2A Expansion Project (Design/Build) Pleasant Valley Wind Farm 43 Wind Turbines - Phase 2 Solar Generating Facility (Adams East) Perryman #6 - Electrical Generator Expansion Lonesome Creek Station Power Phase II 64 -MW Gas Fired Power Plant (Design/Build) LNG Export Facility Charles D Lamb Energy Center (Natural Gas Power Plant) 64 64 McGraw Construction Confidential. All informationC1a presented McGraw Hill Construction, 2014. CT/DOT RailHill Electrification Catenary &@ C2 (Improvement) TX 2014:07 FL 2014:03 PA 2014:01 NV 2014:04 IA 2014:06 NY 2014:07 NM 2014:02 OR 2014:03 ME 2014:03 ND 2014:04 KS 2014:05 OK 2014:06 AK 2014:05 MN 2014:05 NE 2014:02 CA 2014:04 MD 2014:07 ND 2014:06 LA 2014:05 TX 2014:06 OK 2014:02 All rights reserved. CT 2014:04 1,500,000 1,180,000 800,000 750,000 700,000 500,000 450,000 364,000 350,000 350,000 335,000 225,000 200,125 176,000 145,000 136,000 120,000 115,000 112,000 91,000 85,000 77,829 U.S. Total Construction Starts for 2014-2015 Billions of Dollars Total Construction Single Family Housing Multifamily Housing Commercial Bldgs. Institutional Bldgs. Manufacturing Bldgs. Public Works Electric Utilities 65 2008 2009 2010 2011 2012 2013 2014 2015 558.2 426.3 435.3 443.5 489.2 532.8 550.7 606.0 -13% -24% +2% +2% +10% +9% +3% +10% 122.4 94.3 100.0 97.3 125.8 159.1 166.6 190.5 -39% -23% +6% -3% +29% +26% +5% +14% 38.1 17.9 22.1 29.7 40.5 50.4 58.6 64.2 -37% -53% +23% +34% +37% +24% +16% +10% 81.4 47.3 42.2 48.3 54.8 66.5 76.3 88.1 -19% -42% -11% +14% +14% +21% +15% +15% 130.6 112.3 112.2 100.3 91.3 91.1 94.9 104.3 +11% -14% -0- -11% -9% -0- +4% +10% 31.0 9.7 9.5 17.3 13.0 18.4 24.8 23.2 +50% -69% -2% +82% -25% +42% +34% -7% 121.2 123.6 120.7 106.7 111.6 124.1 111.1 118.6 -0- +2% -2% -12% +5% +11% -10% +7% 33.5 21.1 28.7 44.0 52.2 23.1 18.4 17.2 +77% -37% +36% +53% +19% -56% -20% -7% McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2014. All rights reserved.