Page 167 - Martin Marietta - 2024 Proxy Statement

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Bernardino Counties, California; Los Angeles – South Coast Basin, California; Phoenix/Mesa, Arizona; San Diego County, California;
San Francisco Bay Area, California; San Joaquin Valley, California; and Sacramento County, California. Federal transportation
funding has been directly tied to compliance with the Clean Air Act.
Large emitters (facilities that emit 25,000 metric tons or more per year) of greenhouse gases (GHG) must report GHG generation
to complywith the USEPA’s Mandatory Greenhouse Gases Reporting Rule (GHG Rule). The Company in 2023 filed annual reports
in accordance with the GHG Rule relating to operations at its two cement plants in Texas, as well as its Magnesia Specialties facilities
in Woodville, Ohio, and Manistee, Michigan, each ofwhich emit certain GHG, including carbon dioxide, methane and nitrous oxide.
IfCongress passes additional legislation limiting GHG emissions, these operations will likely be subject to such legislation. The
Company believes that any increased operating costs or taxes related to GHG emission limitations at its cement or Woodville
operations would be passed on to its customers. The Manistee facility may have to absorb extra costs due to the regulation ofGHG
emissions in order to maintain competitive pricing in its markets. The Company cannot reasonably predict how much those
increased costs may be.
The Company is engaged in certain legal and administrative proceedings incidental to its normal business activities. In the opinion
of management, based upon currently available facts, the likelihood is remote that the ultimate outcome of any litigation or other
proceedings, including those pertaining to environmental matters, relating to the Company and its subsidiaries, will have a material
adverse effect on the overall results of the Company’s operations, cash flows orfinancial position.

FINANCIAL OVERVIEW
In 2023, the Company achieved record revenues, gross profit, diluted earnings per share and Adjusted EBITDA, extending its track
record of profitability growth to twelve consecutive years. This section presents metrics for continuing operations.

Results of Operations

The discussion and analysis that follow reflect management’s assessment of the financial condition and results of operations
(MD&A) of the Company and should be read in conjunction with the audited consolidated financial statements. As discussed in
more detail, the Company’s operating results are highly dependent upon activity within the construction marketplace, economic
cycles within the public and private business sectors, and seasonal and other weather‐related conditions. Accordingly, financial
results for anyyear presented, oryear‐to‐year comparisons of reported results, may not be indicative offuture operating results.
As permitted by the Securities and Exchange Commission (SEC) under the FAST Act Modernization and Simplification of Regulation
S‐K, the Company has elected to omit the discussion of the earliest period (2021) presented as it was included in its MD&A in its
2022 Annual Report on Form 10‐K filed on February 24, 2023, incorporated by reference from Item 7, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” thereto.
The Company’s Building Materials business generated the majority of consolidated total revenues and earningsfrom continuing
operations. The following comparative analysis and discussion should be read within this context. Further, sensitivity analysis and
certain other data are provided to enhance the reader’s understanding of MD&A and are not intended to be indicative of
management’s judgment of materiality.

2023 Annual Report ♦ Page 65