Page 6 - 2019 Annual Report

LETTER TO SHAREHOLDERS

experienced transient delays in a major infrastructure project. The second targeted downstream business is our Colorado-based
asphalt and paving operations. These operations overcame challenges from poor weather and its impact of fewer work days to
achieve both shipment and pricing growth.

Finally, while at near record-profitability levels, our Magnesia Specialties business faced the most notable market challenges of
any of our businesses. In 2019, Magnesia Specialties product revenues decreased 7 percent and gross profit declined 3 percent
as a result of a slowdown in domestic steel shipments as well as customer inventory rationalization in our Chemicals business.
Despite what we believe are short-term headwinds, the Magnesia Specialties business actually grew its product gross margin
150 basis points to nearly 40 percent. This is not due to good fortune. Rather, it is operating a business intelligently and
proactively adjusting the cost structure.

As you can see, 2019 was a successful year for Martin Marietta from an operational and financial perspective. However, this
Annual Letter only touches the surface. I encourage you to read all of the information we present on the following pages to get
a full picture of how we performed.
As impressive as our past accomplishments are, I believe the foundation we have built over our more than 25 years as a public
company is but a prologue to an even more exceptional future. In the upcoming year, we expect to set new financial and
operating performance records. Further, Martin Marietta
“Culture drives us to lead with a will continue to be a constructive and visionary force in
building, caring and growing the nearly 400 communities –
purpose that makes Martin Marietta large and small – that we serve, and where we also work
and live.
and the communities and people we
No doubt Martin Marietta has had a remarkable history.
engage with sustainable.” What can, and should, you expect for the future?

Just as SOAR guided Martin Marietta through the Great
Recession of the late 2000s and early 2010s, and has since propelled us to new heights over the past five years, we are now
commencing SOAR 2025. This iteration of our plan will serve as the roadmap for our next five years. Underpinning that roadmap
will be the key attributes that have served us so well in the past, including our steadfast fidelity to safety and ethics. We believe
attractive opportunities exist for us to expand our aggregates-led geographic footprint in some of the nation’s fastest-growing
regions. We have the financial flexibility, regulatory ability and market credibility to pursue such opportunities. Simply review
the results of our Texas Industries and Bluegrass Materials acquisitions – which helped propel us from leading positions in 65
percent of our markets a decade ago to #1 or #2 in 90 percent of our markets today – to better understand our unparalleled
abilities in this important dimension.
Another focus in 2020 and over the next five years is to continue making you a proud owner of Martin Marietta by further
enhancing our environmental, sustainability and governance practices.

Recently, we’ve seen an uptick in investors and others inquiring about our sustainability practices and goals to better understand
how these critical objectives are intertwined in our strategy. Simply put, we agree that these objectives play an important role in
ensuring long-term sustainable value. When looked at through a corporate prism, we believe sustainability comes down to
three common principles: people, planet and profits. That said, we believe sustainability is most attainable when viewed as
foundational to our industry and business and embedded in our organization as a part of four vital pillars:

 Safety, or keeping all who come in contact with our products and business safe;
 Environment, or being cognizant of and responsive to our impacts on the climate, air, water, biodiversity and other
natural resources;
 Employees, or engaging with our colleagues in a manner that recognizes our shared but diverse culture and that
encourages employee growth and development; and
 Community, or being a responsible neighbor and caring for the communities in which we live, work and serve.

Page 4  Annual Report Celebrating 25 Years as a Public Company