Page 158 - Martin Marietta - 2023 Proxy Statement

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

2022 Performance Highlights
Achieved Industry‐Leading Safety Performance:
 Record company‐wide Lost‐Time Incident Rate (LTIR) of 0.15, the sixth consecutive year of world‐class or better LTIR
thresholds
 Record company‐wide Total Injury Incident Rate (TIIR) of 0.78, the second consecutive year of world‐class or better
TIIR thresholds

Achieved Record Financial Performance:
The Company achieved record total revenues, products and services revenues, consolidated gross profit and Adjusted EBITDA
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(defined in Results of Operations section), benefiting from double‐digit pricing growth across all product lines of the Building
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Materials business and contributions from acquired operations, which more than offset increased inflationary pressure from
rising input costs and divestiture impacts on an absolute basis. Further, 2022 represented the eleventh consecutive year of
annual growth for products and services revenues, adjusted gross profit and Adjusted EBITDA. The Company’s commitment to
safety and operational and commercial excellence resulted in the following financial performance from continuing operations
(comparisons with 2021):
 Record consolidated total revenues of $6.16 billion compared with $5.41 billion, an increase of 13.8%
 Record consolidated gross profit of $1.42 billion compared with $1.35 billion, an increase of 5.6%; 2021 consolidated
gross profit was burdened by $30.6 million of costs related to the impact of selling acquired inventory aftf er its markup
to fair value as part of acquisition accounting
 Consolidated selling, general and administrative (SG&A) expenses representing 6.4% of total revenues
 Net earnings from continuing operations attributable to Martin Marietta of $856.3 million compared with $702.0
million, an increase of 22.0%
 Record consolidated Adjusted EBITDA from continuing operations of $1.60 billion, an increase of 4.7%
 Operating cash flow of $991.2 million, a decrease of 12.9%

Continued Disciplined Execution Against Capital Allocation Priorities:
 Optimized portfolio with divestitures of the Company's Colorado and Central Texas ready mixed concrete businesses
and certain West Coast cement and ready mixed concrete operations
 Capital investments into operations of $481.8 million
 Quarterly dividend increase of 8% in August 2022, resulting in total annual dividends paid of $159.1 million, or $2.54
per share
 Repurchase of 0.4 million shares of common stock at a total cost of $150.0 million

BUSINESS ENVIRONMENT

Building Materials Business
The Building Materials business serves customers in the construction marketplace. The business’ profitability is sensitive to
national, regional and local economic conditions and cyclical swings in construction spending, which are affected byfluctuations
in levels of public‐sector infrastructure funding; interest rates; access to capital markets; and demographic, geographic,
employment and population dynamics.

The heavy‐side construction business, inclusive of much of the Company’s operations, is conducted outdoors. Therefore, erratic
weather patterns, precipitation and other weather‐related conditions, including flooding, hurricanes, cold temperatures,
earthquakes, droughts and wildfires, can significantly affect production schedules, shipments, costs, efficiencies and
profitability. Generally, the financial results for the first and fourth quarters are most subject to the impacts of winter weather,
while the second and third quarters can be subject to the impacts of heavy precipitation. The impacts of erratic weather
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patterns are more fully discussed in the Building Materials Business’ Key Considerations section.
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