Page 155 - Martin Marietta - 2023 Proxy Statement

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Magnesia Specialties
The Company operates a Magnesia Specialties business with production facilities in Michigan and Ohio. The Magnesia
Specialties business produces magnesia‐based chemicals products used in industrial, agricultural and environmental
applications. It also produces dolomitic lime sold primarily to customers for steel production and soil stabilization. Magnesia
Specialties’ products are shipped to customers domestically and worldwide.

Consolidated Strategic Objectives
The Company’s strategic planning process, or Strategic Operating Analysis and Review (SOAR), provides the framework for
execution of Martin Marietta’s long‐term strategic plan. Guided by this framework and considering the cyclicality of the Building
Materials business, the Company determines capital allocation priorities to maximize long‐term shareholder value creation.
The Company’s strategy includes ongoing evaluation of aggregates‐led opportunities of scale in new domestic markets (i.e.,
platform acquisitions) and expansion through acquisitions that complement existing operations (i.e., bolt‐on acquisitions). To
that effect, the Company has invested nearly $8.0 billion in acquisitions since the launch of SOAR in 2010. The Companyfinances
such opportunities with the goal of preserving its financial flexibility by having a leverage ratio (consolidated net debt‐to‐
consolidated earnings before interest, taxes, depreciation, depletion and amortization, or EBITDA) within a range of 2.0 times
to 2.5 times within a reasonable period of time, typically within 18 months, following the completion of a debt‐financed
transaction. SOAR also includes the identification and potential disposition of assets that are not consistent with stated
strategic goals. Notably, in 2022, the Company divested its Colorado and Central Texas ready mixed concrete businesses and
certain West Coast cement and ready mixed concrete operations, refining its product mix and improving margin profile, while
providing balance sheet flexibility.

The Company, by purposeful design, will continue to be an aggregates‐led business that focuses on markets with strong,
underlying growth fundamentals where it can sustain or achieve a leading market position. In fact, aggregates product gross
profit represented 69% of 2022 total consolidated products and services gross profit. As part of its long‐term strategic plan,
the Company may also pursue strategic cement and targeted downstream opportunities. For Martin Marietta, strategic cement
and targeted downstream operations are located in vertically‐integrated markets where the Company has, or envisions, among
other things, a clear path toward a leading aggregates position.

Annual Report ♦ Page 51