Page 164 - Martin Marietta - 2024 Proxy Statement

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Erratic weather can significantly impact operations

Production and shipment levels for the Building Materials business correlate with general construction activity, most of which
occurs outdoors and, as a result, is affected by erratic weather, seasonal changes and other climate‐related conditions. Typically,
due to a general slowdown in construction activity during winter months, the first and fourth quarters experience lower production
and shipment activity. As such, temperatures in the months of March and November can meaningfully affect the Company’s first‐
and fourth‐quarter results, respectively, where warm and/or moderate temperatures in March and November allow the
construction season to start earlier and end later, respectively. Additionally, extreme heat during summer months can impact
construction activities, as outdoor work may be limited to protect the health and safety of construction workers.
Excessive rainfall jeopardizes production efficiencies, shipments and profitability in all markets served by the Company.In
particular, the Company’s operations in the Atlantic and GulfCoast regions of the United States and The Bahamas are at risk for
hurricane activityfromJune through November, but most notablyin August, September and October. The Company’s California
operations are at risk for flooding, wildfire activity and water use restrictions in severe drought conditions. Increased intensity and
frequency of extreme weather events have been linked to climate change, and further global warming may increase the risk of
adverse weather conditions.

Capital investment decisions driven by capital intensity of the Building Materials business and focus on
land
The Company’s organic capital program is designed to leverage construction market growth through investment in both permanent
and portable facilities at the Company’s operations. Over an economic cycle, the Company typically invests organic capital at an
annual level that approximates depreciation expense. At mid‐cycle and through cyclical peaks, organic capital investment typically
exceeds depreciation expense, as the Company supports current capacity needs and future growth. Conversely, at a cyclical trough,
the Company may reduce levels of capital investment. Regardless of cycle, the Company sets a priority of investing capital to ensure
safe, environmentally sound and efficient operations, as well as to provide the highest quality of customer service and establish a
foundation for future growth.
The Company is diligent in its focus on land opportunities, including potential new sites (greensites) and existing site expansion.
Land purchases are usually opportunistic and can include contiguous property around existing quarry locations. Such property can
serve as buffer property or additional mineral reserves, assuming regulatory hurdles can be cleared and the underlying geology
supports economical aggregates mining. In either instance, the acquisition of additional property around an existing quarry
typically allows the expansion of the quarry footprint and an extension of quarry life.

Page 62 ♦ 2023 Annual Report