Page 155 - Martin Marietta - 2024 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.

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, earnings/loss from nonconsolidated equity affiliates and
certain other adjustments as specified below, or Adjusted EBITDA) within a range of 2.0 times to 2.5 times within a reasonable
period of time, typicallywithin 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, since 2022, the
Company divested its Colorado and Central Texas ready mixed concrete businesses and certain West Coast cement and ready
mixed concrete operations and, as of February 9, 2024, completed the divestiture of its South Texas cement and related ready
mixed concrete operations, refining its product mix and improving its margin profile, while providing balance sheet flexibility. In
total, these divestitures provided pretax cash proceeds of $3.1 billion.
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. Aggregates gross profit represented 68% of 2023
total consolidated gross profit. For Martin Marietta, strategic cement and targeted downstream operations are located where the
Company has, or envisions, among other things, a clear path toward a leading aggregates position. Additionally, strategic cement
operations are geared toward markets in which supply cannot be meaningfully interdicted by water.

2023 Annual Report ♦ Page 53