Page 169 - Martin Marietta - 2025 Proxy Statement

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Asignificant portionof the Magnesia Specialtiesbusiness’ costs isof a fixedorsemi-fixednature. Theproduction process
requiresthe useof natural gas, coal andpetroleum coke;therefore, fluctuations intheir pricingdirectlyaffect operating results.
Tohelp mitigatethis risk, the Company has fixed-price agreements for43% of itsanticipated 2025 energy needs for coal,
petroleumcokeand naturalgas.Given inherently high fixedcosts,low capacity utilizationcan negatively affect thesegment’s
results of operations.Managementexpects future organicprofitgrowthto result from increased pricing, commercializationof
new products, entry intonew marketsand optimization of overall product mix.
In 2024,directproductioncosts represented81% of theMagnesiaSpecialties business' totalcostofrevenues:

The MagnesiaSpecialties business ishighly dependent on rail transportation, particularlyfor movement of dolomiticlime from
Woodville to Manistee anddirectcustomershipments of dolomiticlimeand magnesia chemicalsproducts from both Woodville
and Manistee.The segmentcan be affected by the risks mentioned inthe long-hauldistributiondiscussion in the Building
C
C
Materials Business’ KeyConsiderations section.
Environmental Regulation and Litigation
he expansionand growth of theaggregates industry issubjectto increasingchallenges from environmentaland political
advocates aiming to controlthe pace anddirection offuture development.Certainenvironmental groups have publishedlists
of targeted municipalareas, including areas withinthe Company’s marketplace, for environmentaland suburban growth
control. The effect of these initiatives on the Company’s growth is typically localized.Further challenges areexpectedasthe
momentum of theseinitiatives ebband flow. Railand othertransportationalternativesare beingheraldedby these special-
interestgroupsassolutions to mitigate road trafficcongestionand overcrowding.
The Company’s operations aresubject to andaffectedbyfederal, state andlocal laws, rules and regulations relating to the
environment,healthand safety andother regulatory matters. Certain of the Company’s operations may occasionally use
substances classified as toxicorhazardous. The Companyregularly monitors and reviews itsoperations, procedures andpolicies
for compliancewiththese laws and regulations. Despite thesecomplianceefforts, risk of environmentalliabilityis inherent in
theoperation of the Company’s businesses, as it is with otherentitiesengaged in similarbusinesses.
Environmental operating permits are, or may be, required for certainof the Company’soperations; such permitsare subject
to modification, renewal and revocation. New permits are generally required for openingnew sitesor for expansionatexisting
operationsand cantakeseveral yearstoobtain. Moreover,landuse, rezoning and specialorconditional use permits are
increasingly difficult to obtain.Oncea permit is issued,the location is requiredtogenerally operate inaccordance with the
approved site plan.

2024 Annual Report ♦ Page 61