Q1 2024 Martin Marietta Materials Inc Earnings Call

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Operator: Good morning, and thank you for joining Martin Marietta's first quarter 2024 earnings call. With me today are Ward Nye, Chairman and Chief Executive Officer, and Jim Nickolas, Executive Vice President and Chief Financial Officer. Today's discussion may include forward-looking statements, as defined by United States securities laws, in connection with future events, future operating results, or financial performance. Martin Marietta is subject to risks and uncertainties that could cause actual results to differ materially.

Welcome to Martin Marietta's first quarter of 'twenty 'twenty four earnings call.

All participants are now in a listen only mode.

<unk> and answer session will follow the company's prepared remarks.

Today's call is being recorded and will be available for replay on the company's website.

I will now turn the call over to your host Ms. Jacqueline Reoccur Martin Marietta's director of Investor Relations Jaclyn you may begin.

Speaker Change: Good morning, and thank you for joining Martin Marietta's first quarter 2024 earnings call.

Jaclyn: With me today are ward Nye, Chairman and Chief Executive Officer, and Jim Nicholas Executive Vice President and Chief Financial Officer.

Operator: We undertake no obligation, except as legally required, to publicly update or revise any forward-looking statement, whether resulting from new information, future developments, or otherwise. Please refer to the legal disclaimers contained in today's earnings release and other public filings, which are available on both our own and the Securities and Exchange Commission's websites. We have made available during this webcast and on the Investors section of our website supplemental information that summarizes our financial results and trends.

Jaclyn: Day's discussion may include forward looking statements as defined by United States Securities laws in connection with future events future operating results or financial performance.

Jaclyn: Like other businesses Martin Marietta is subject to risks and uncertainties that could cause actual results to differ materially.

James A. J. Nickolas: We undertake no obligation except as legally required to publicly update or revise any forward looking statements, whether resulting from new information future developments or otherwise.

Operator: As a reminder, all financial and operating results discussed today are for continuing operations. In addition, non-GAAP measures are defined and reconciled to the most directly comparable GAAP measure in the Appendix to the Supplemental Information, as well as in our filings with the SEC, and are also available on our website. Board night will begin today's earnings call with a discussion of our first quarter operating performance and our recently completed transactions, as well as Market Trends.

Jaclyn: Please refer to the legal disclaimers contained in today's earnings release.

Jaclyn: And other public filings, which are available on both our own and the securities and exchange Commission's website.

Jaclyn: We have made available during this webcast.

Jaclyn: And on the investors section of our website supplemental information that summarizes our financial results and trends.

Operator: Jim Nickolas will then review our financial results and capital allocation, after which Orr will provide some brief concluding remarks. A question and answer session will follow. Please limit your Q&A participation to one question. I will now turn the call over to Ward.

Jaclyn: As a reminder, all financial and operating results discussed today are for continuing operations.

Jaclyn: In addition, non-GAAP measures are defined and reconciled to the most directly comparable GAAP measure in the appendix to the supplemental information as well as our filings with the SEC and are also available on our website.

Ward Nye: Thank you, Jacqueline. And welcome, everyone, and thank you for joining today's teleconference. Martin Marietta's continued growth and results demonstrate our industry-leading performance and disciplined adherence to and execution of our proven Strategic Operating Analysis and Review, or SOAR, plans. With the nadir that is always the industry's first quarter concluded and the 2024 construction season meaningfully underway, we remain confident that steady product demand supporting favorable commercial dynamics, continued adherence to our value over volume strategy, ongoing operational excellence undertakings, and portfolio optimizing transactions will position Martin Marietta for continued outperformance in 2024 and beyond.

Jaclyn: Gordon I will begin today's earnings call with a discussion of our first quarter operating performance.

Gordon: And our recently completed transactions.

Gordon: As well as market trends.

Gordon: Jim Nickolas will then review our financial results and capital allocation.

James A. J. Nickolas: After which we will provide some brief concluding remarks.

Jaclyn: A question and answer session will follow.

Jaclyn: Please limit your Q&A participation to one question.

Jaclyn: I will now turn the call over to ward.

Ward Nye: Thank you Jaclyn and welcome everyone and thank you for joining today's teleconference.

Ward Nye: Martin Marietta is continued growth and results demonstrate our industry, leading performance and disciplined adherence to and execution of our proven strategic operating analysis and review or short line with.

Ward Nye: With the nadir that its always the industry's first quarter concluded in the 2024 construction season meaningfully underway.

Ward Nye: As detailed in today's earnings release, we raised our full-year 2024 adjusted EBITDA guidance to a range of $2.30 billion to $2.44 billion, or $2.37 billion at the midpoint. This increase reflects the benefits that will be realized from the recently acquired blue water operations as well as strong realization of this year's pricing. As is customary, we'll revisit our guidance again at mid-year.

Ward Nye: We remain confident that steady product demand supporting favorable commercial dynamics continued adherence to our value over volume strategy.

Ward Nye: Ongoing operational excellence undertakings and portfolio optimizing transactions will position Martin Marietta for continued outperformance in 2024 and beyond.

Ward Nye: As detailed in today's earnings release, we raised our full year 2024, adjusted EBITDA guidance to a range to $2 301 billion to $244 billion or $2 $37 billion at the midpoint.

Ward Nye: This increase reflects the benefits that will be realized from the recently acquired blue water operations as well as strong realization of this year's pricing actions as is customary.

Ward Nye: Consistent with our SOAR 2025 initiatives, we've executed $4.5 billion of portfolio enhancing transactions this year, reducing cyclical downstream exposure or redeploying the proceeds to expand our aggregates footprint and improve our ability to generate consistently higher margins. More specifically, on January 12th, we completed the acquisition of Albert Frey & Sons, a leading aggregates producer in Colorado, strengthening our aggregates platform in the high-growth Denver metropolitan area. And on April 5th, we acquired 20 aggregate operations from Blue Water Industries, providing us with a new growth platform in Tennessee and Florida.

Ward Nye: Visit our guidance again at mid year.

Ward Nye: Consistent with our Soar 2025 initiatives, we've executed $4 $5 billion of portfolio enhancing transactions this year, reducing cyclical downstream exposure.

Ward Nye: Redeploying the proceeds to expand our aggregates footprint and improve our ability to generate consistently higher margins.

Ward Nye: More specifically on January 12, we completed the acquisition of Albert Fried <unk> sons, a leading aggregates producer in Colorado strengthening our aggregates platform at the high growth Denver Metropolitan area and on April 5th we acquired 20 aggregate operations from Bluewater industries, providing us a new growth platform in Tennessee and Florida.

Ward Nye: These two pure-play aggregates transactions are expected to add approximately 17 million tons of annual shipments and generate approximately $180 million of annualized EBITDA, more than offsetting the EBITDA from the February 9th divestiture of the company's South Texas Cement and Related Concrete business. These transactions are all reflected in our revised adjusted EBITDA guidance as of their respective closing dates.

Ward Nye: These two pure play aggregates transactions are expected to add approximately 17 million tons of annual shipments and generate approximately $180 million of annualized EBITDA more than offsetting the EBITDA from the February 9th divestiture of the Companys, South, Texas cement and related concrete business. These.

Ward Nye: Transactions are all reflected in our revised adjusted EBITDA guidance as of their respective closing dates.

Ward Nye: Turning now to the company's first quarter operating performance, aggregate pricing fundamentals remain subtractive, increasing 12.2% or 12.7% on an organic, mixed-adjusted basis, underscoring the advantages of our value-over-volume commercial strategy and our sales team's unwavering commitment to receiving appropriate commercial consideration for a valuable and long-lived reserve. Aggregate shipments declined 12.3% due largely to the well-chronicled weather-impacted start to the year in our East and Southwest Divisions and softening demand in warehouse, office, and retail construction, partially offset by more favorable weather and relative strength in our Central and West Divisions.

Ward Nye: Turning now to the Companys first quarter operating performance.

Ward Nye: Aggregates pricing fundamentals remains attractive increasing 12, 2% or 12, 7% on an organic mix adjusted basis underscoring the advantages of our value over volume commercial strategy and our sales teams unwavering commitment to receiving appropriate commercial consideration for our valuable and <unk>.

Ward Nye: Long lived reserves.

Ward Nye: Aggregate shipments declined 12, 3% due largely to the well chronicled weather impacted start to the year in our east and southwest divisions, and softening demand in warehouse office and retail construction, partially offset by more favorable weather and relative strength in our central and west divisions.

Ward Nye: Aggregate's product line gross profit per ton increased 14%, and gross margin expanded by 90 basis points notwithstanding the shipment decline. Looking ahead, we remain enthusiastic about Martin Marietta's attractive market fundamentals and long-term secular trends across our three primary end-uses of public works, non-residential, and residential construction. More specifically, we believe these markets and Martin Marietta's chosen geographies will drive aggregate intensive growth and favorable pricing trends for the foreseeable future. We expect robust, multi-year demand in public infrastructure, U.S.-based manufacturing, energy projects, and data center construction will partially offset near-term softness in warehouse, light non-residential, and residential end markets. That said, we fully expect a housing recovery, particularly in single-family homes, once affordability challenges subside as demand in our key markets remains robust.

Ward Nye: Aggregates product line gross profit per ton increased 14% and gross margin expanded by 90 basis points notwithstanding the shipment decline.

Ward Nye: Looking ahead, we remain enthusiastic about Martin Marietta as attractive market fundamentals and long term secular trends across our three primary end uses a public works nonresidential and residential construction.

Ward Nye: More specifically, we believe these markets in Martin Marietta has chosen geographies will drive aggregates intensive growth and favorable pricing trends for the foreseeable future. We expect robust multiyear demand in public infrastructure U S based manufacturing energy projects and data center construction will partially offset.

Ward Nye: Near term softness in warehouse light nonresidential and residential end markets that said, we fully expect the housing recovery, particularly in single family once affordability challenges subside as demand in our key markets remains robust.

Ward Nye: Infrastructure activity is expected to continue to grow in 2024 as early infrastructure investment and jobs Act or Iga a projects advance to the major construction phase, notably according to the annual market outlook provided by the American Road in Transportation Builders Association or ARPA.

Ward Nye: Infrastructure activity is expected to continue to grow in 2024 as Early Infrastructure Investment and Jobs Act, or IIJA, projects advance to the major construction phase. Notably, according to the annual market outlook provided by the American Road and Transportation Builders Association, or ARPA, public highway, pavement, and street construction. The largest market sector is expected to increase 16% to $126 billion in 2024, as compared with $109 billion in 2023, as record State Department of Transportation or DOT budgets match federal funds and provide additional investment.

Ward Nye: Public highway pavement and street construction.

Ward Nye: Largest market sector is expected to increase 16% to $126 billion in 2024 as compared with $109 billion. In 2023 is record state department of transportation or D. O T budgets match federal funds and provide additional investments.

Ward Nye: The value of state and local government highway, bridge, and tunnel contract awards, a leading indicator for our future product demand, grew 11% to $116 billion for the 12-month period ending February 29, 2024. This generational investment in our nation's infrastructure, supported by federal, state, and local actions, provides state DOTs with certainty to advance projects in their backlogs, driving sustained multi-year demand in this aggregate-intensive, often counter-cyclical market Shifting to the heavy non-residential market, manufacturing projects continue to be supported by steady demand from ongoing reshoring of critical product supply chains.

Ward Nye: The value of state and local government Highway bridge and tunnel contract awards, a leading indicator for our future product demand grew.

Ward Nye: <unk> grew 11% to $116 billion for the 12 month period, ending February 29 2020 for.

Ward Nye: This generational investment in our nation's infrastructure supported by federal state and local actions provide state dot's with certainty to advanced projects and their backlogs driving sustained multiyear demand in this aggregates intensive often counter cyclical market.

Ward Nye: Shifting to the heavy nonresidential market manufacturing projects continue to be supported by steady demand from ongoing re shoring of critical products supply chains construction spending for domestic manufacturing continues to trend positively with the February seasonally adjusted annual rate of spending for 2024.

Ward Nye: Construction spending for domestic manufacturing continues to trend positively, with the February season adjusted annual rate of spending for 2024 at $223 billion, a 32% increase from the February 2023 value of $169 billion. Similarly, we expect the long-term secular trends toward cloud-based services and artificial intelligence will drive renewed growth in data center construction, which had moderated from a post-COVID peak. As an example, in March, Google announced a new $1 billion data center in Kansas City to help drive its artificial intelligence efforts, which requires nearly 800,000 tons of aggregates from our uniquely positioned underground operation.

Ward Nye: At $223 billion or 32% increase from the February 2023 value of $169 billion.

Ward Nye: Equally we expect the long term secular trends towards cloud based services and artificial intelligence will drive renewed growth in data center construction, which had moderated from its post Covid peak.

Ward Nye: As an example in March Google announced a new $1 billion data center in Kansas City to help drive its artificial intelligence efforts, which requires nearly 800000 tons of aggregates from our uniquely positioned underground operations.

Ward Nye: Looking at the light nonresidential market, we expect 2024 demand will be challenged given higher for longer interest rates high office vacancy rates and the natural construction lag from the last two years of single family residential declines.

Ward Nye: Looking at the light non-residential market, we expect 2024 demand will be challenged given higher-for-longer interest rates, high office vacancy rates, and the natural construction lag from the last two years of single-family residential decline. As for the residential market, despite near-term uncertainty around mortgage rates, we're encouraged by positive trends in single-family housing starts, a leading indicator of aggregate demand, which were at 1 million units in March 2024, a nearly 21 percent increase from a year ago.

Ward Nye: As for the residential market despite near term uncertainty around mortgage rates were encouraged by positive trends in single family housing starts a leading indicator of aggregates demand, which were 1 million units in March 2024, and nearly 21% increase from a year ago.

Ward Nye: Notably, single-family housing starts have been at or above 1 million units since November 2023, indicative of a recovery from the 2023 trough. Given the well-publicized structural housing deficit in our company's key metropolitan areas, we expect Martin Marietta to benefit disproportionately from new home construction once interest rates moderate and monthly mortgage payments become more affordable. I'll now turn the call over to Jim to discuss our first quarter financial results.

Ward Nye: Notably single family housing starts have been at or above 1 million units since November 2023 indicative of recovery from the 2023 trough.

Ward Nye: Given the well publicized structural housing deficit in our company's key metropolitan areas, We expect Martin Marietta to benefit disproportionately from new home construction punched interest rates moderate and monthly mortgage payments become more affordable.

Ward Nye: I'll now turn the call over to Jim to discuss our first quarter financial results Jim.

James A. J. Nickolas: Thanks, Ward, and good morning, everyone. As Ward mentioned and indicated in our earnings release, we raised our full year 2024 adjusted EBITS guidance to $2.37 billion at the midpoint and our full year 2024 aggregate gross profit guidance to $1.75 billion at the midpoint. The updated guidance for aggregate gross profit includes a $30 million non-recurring, non-cash, purchase accounting impact expected in the second quarter for the fair market value write-up of inventory related to the Blue Water acquisition.

Jim: Thanks, and good morning, everyone.

Jim: As ward mentioned and indicated in our earnings release, we raised our full year 2024, adjusted EBIT guidance to $2 $3 $7 billion at the midpoint and our full year 2020 for aggregates gross profit guidance to $1 $75 billion at the midpoint.

Jim: The updated guidance for aggregates gross profit includes a $30 million nonrecurring noncash purchase accounting impact expected in the second quarter for the fair market value write up of inventory related to the blue water acquisition.

James A. J. Nickolas: The building materials business generated revenues of $1.2 billion, a decrease of 8%, and gross profit of $248 million, a decrease of 10%. The vast majority of the decline in both metrics was due to the effect of our divestiture of our South Texas cement and radium-X business. A much smaller portion of the decline was due to shipments impacted by tougher weather this quarter compared to the prior year's unseasonably favorable weather conditions.

Jim: The building materials business generated revenues of $1 2 billion.

Jim: A decrease of 8% and gross profit of $248 million a decrease of 10%.

Jim: The vast majority of the decline in both metrics is due to the effect of our divestiture of our south, Texas cement and ready mix business.

Jim: A much smaller portion of the decline was due to shipments impacted by tougher weather this quarter compared to the prior year's unseasonably favorable weather conditions.

James A. J. Nickolas: Despite the lower shipment volumes, aggregate gross profit increased modestly to $239 million, and gross margin increased 90 basis points to 27%. These results reflect our team's focus on what we can control, specifically the efficacy of our commercial discipline and flexible cost structure, which drives higher profits without the benefit of growing volumes. Turning Toward Texas Cement and Targeted Downstream Businesses. Our cement and concrete revenues decreased 22% to $265 million, and gross profit decreased 47% to $31 million.

Jim: Despite the lower shipment volumes.

Jim: <unk> gross profit increased modestly to $239 billion and gross margin increased 90 basis points to 27%.

Jim: These results reflect our team's focus and what we can control specifically the efficacy of our commercial discipline and flexible cost structure, which drives higher profits without the benefit of growing volumes.

Jim: Turning to our Texas cement and targeted downstream businesses.

Jim: Our cement and concrete revenues decreased 22% to $265 million and gross profit decreased 47% to $31 million.

James A. J. Nickolas: This is driven primarily by the divestiture of our South Texas cement plant and its related concrete operations and secondarily by wet weather in Texas. Additionally, the new finish mill at a Midlothian cement plant in North Texas, which will add approximately 450,000 tons of incremental high-margin annual production capacity, is still on track to be operational in the third quarter of 2024. Consistent with typical seasonal trends in relevant geographies, the asphalt and paving business posted a $22 million gross loss, as our Minnesota-based asphalt facilities were inactive during the first quarter due to winter operational shutdowns, and our Colorado-based operations experienced unfavorable winter conditions. Magnesia Specialties achieved an all-time quarterly gross profit record of $29 million despite a 3% decrease in revenues to $81 million.

Jim: Driven primarily by the divestiture of our South, Texas cement plant and its related concrete operations and secondarily by wet weather in Texas.

Jim: Additionally, the new finished mill at Midlothian cement plant in North, Texas, which will add approximately 450000 tons of incremental high margin annual production capacity is still on track to be operational in the third quarter of 2024.

Jim: Consistent with typical seasonal trends and relevant geographies, the asphalt and paving business posted a $22 million gross loss as a Minnesota based asphalt facilities are inactive during the first quarter due to winter operational shutdowns and a Colorado based operations experienced unfavorable winter conditions.

Jim: Magnesia specialties achieved an all time quarterly gross profit record of $29 million. Despite a 3% decrease in revenues to $81 million as strong pricing improve maintenance cost control and energy tailwind more than offset continued headwinds in metal and mining end markets.

Ward Nye: Strong pricing, improved maintenance cost control, and energy tailwinds more than offset continued headwinds in metal mining and marketing. Our long-standing disciplined capital allocation priorities remain focused on responsibly growing our business through value-enhancing acquisitions. Prudent Organic Capital Investment and the Consistent Return of Capital to Shareholders, all while maintaining our investment-grade credit rating profile. In the first quarter, we invested $200 million of capital into our business. We also returned to shareholders almost $200 million during the quarter, with $150 million of that used to repurchase over 255,000 shares at an average price of $586.85.

Jim: Our long standing disciplined capital allocation priorities remain focused on responsibly growing our business through value enhancing acquisitions.

Jim: Organic capital investment and a consistent return of capital to shareholders, all while maintaining our investment grade credit rating profile.

Jim: In the first quarter, we invested $200 million of capital into our business.

Jim: We also returned to shareholders almost $200 million during the quarter with $150 million of that used to repurchase over 255000 shares.

Jim: At an average price of $586 85.

Jim: Since our repurchase authorization announcement in February 2015, we have returned a total of $2 8 billion to shareholders through both dividends and share repurchases.

Ward Nye: Since our repurchase authorization announcement in February 2015, we have returned a total of $2.8 billion to shareholders through both dividends and share repurchases. Our net debt to EBITS ratio was 0.8 times as of March 31st. Assuming no further M&A activity, we expect net leverage to be 1.4 times by year-end, below a targeted range of 2.0 to 2.5 times, providing a strong balance sheet to capitalize on a robust acquisition pipeline. With that, I will turn the call back over to Ward.

Jim: Our net debt to EBITDA ratio was <unk> eight times as of March 31.

Jim: Assuming no further M&A activity.

Jim: We expect net leverage to be one four times by year and below our targeted range of 2.0 to two five times.

Jim: Providing a strong balance sheet to capitalize on our robust acquisition pipeline with.

Jim: With that I will turn the call back over to ward.

Ward Nye: To conclude, we expect 2024 will be another year of significant achievement for Martin Marietta. We're well positioned to benefit from infrastructure tailwinds providing steady product demand and favorable commercial dynamics across our coast-to-coast footprint. For the past 30 years, as a public company, Martin Marietta has built a resilient and durable business. We'll continue to build on the foundation that has proven so successful, an aggregates-led platform with an unwavering commitment to safety, commercial, and operational excellence, and the disciplined execution of our strategic priorities. We'll turn our attention to addressing your questions. Thank you, and ladies and gentlemen...

Jim: Jim. Thanks, so much to conclude we expect 2024 will be another year of significant achievement for Martin Marietta, we're well positioned to benefit from infrastructure <unk>, providing steady product demand and favorable commercial dynamics across our coast to coast footprint over the past 30 years as a public company Martin Marietta has.

Jim: Build a resilient and durable business will continue to build on the foundation that has proven so successful in aggregates led platform with an unwavering commitment to safety commercial and operational excellence and the disciplined execution of our strategic priorities.

Speaker Change: If the operator will now provide the required instructions, we'll turn our attention to addressing your questions.

Speaker Change: Thank you and ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the number one on your telephone keypad you will hear from <unk> on your question and your question Robby <unk>.

Operator: Thank you. And Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the number 1 on your telephone keypad. You will hear a three-tone prompt acknowledging your request, and your questions will be answered in the order they are received. Should you wish to decline from the polling process, please press the star followed by the number 2. One moment, please, for your first question.

Speaker Change: Should you wish to decline in terms of pulling processes.

Jim: Star followed by the number two well.

Jim: Please for your first question.

Jim: And your first question comes from the line of Kathryn Thompson from Thompson Research Group. Your line is open.

Operator: And your first question comes from the line of Kathryn Thompson from Thompson Research Group. Your line is open. Kathryn Thompson, you might be on mute. All right, we're going to proceed with the next question. And your next question comes from the lineup: Trey Grooms from Stephens.

Kathryn Ingram Thompson: Kathryn Thompson.

Kathryn Ingram Thompson: It might be down here.

Kathryn Ingram Thompson: Alright.

Kathryn Ingram Thompson: The next question and your next question comes from the line of Trey Grooms from Stephens. Your line is open.

Operator: Hey, thank you. Good morning, Ward and Jim. Good morning, Trey, and Jim says we can hear you. Yeah, sorry about that for Kathryn.

Trey Grooms: Hey, Thank you good morning, Jim.

Trey Grooms: Good morning.

Speaker Change: Where are you.

Trey Grooms: [laughter], yeah, sorry about that for Kathryn.

Trey Grooms: You have clearly been very busy with acquisitions.

Ward Nye: You all have clearly been very busy with acquisitions, you know, and overall portfolio optimization. And I know, you know, it's early days, but, you know, maybe if you could talk about, you know, kind of the integration of AFS and BWI, how that's going so far, you know, maybe where you see opportunities there. And then, you know, with that, you know, relative to the information you've given us in the past, I think you might be adjusting your view of the demand environment just a little bit but taking up the ASP and maybe even the standalone EBITDA guide a bit. First off, do I have that right? And maybe you could help us out with that? Thank you.

Trey Grooms: And overall portfolio optimization.

Trey Grooms: And I know, it's early days, but.

Trey Grooms: Maybe if you could talk about.

Trey Grooms: The integration of <unk> in BWI.

Trey Grooms: Thats going so far and maybe where you see opportunities there and then with that relative to the information.

Trey Grooms: The information you've given us in the past I think you might be adjusting your view of the demand environment, just a little bit but.

Trey Grooms: But taking up the asps and maybe even the Standalone EBITDA guide a bit first off do I have that right in and maybe could you help us out with that thank you.

Ward Nye: So let's talk first about integration, and your question's a good one. And look, we closed on Friday. We closed on Blue Water. The transactions went well. And the nice thing from our perspective, one, our teams have done this and done a lot and done it well. Number two, we typically close on a Friday, and we open up on Monday morning, and it's a Martin Marietta operation. It has our signs. It has our tickets. They're on our networks, and that's exactly what we've seen.

Speaker Change: You do have it right and thanks for the question. So I'll try to do all three parts. So let's talk first about integration and your question's a good one and look.

Speaker Change: We closed on Prime we've closed on Blue awarded transactions went well and the nice thing from our perspective, one our teams have done this and done a lot and done it well number two we typically close on a Friday and we open up on Monday morning, and it's Martin Marietta Operation has our signs it's has our tickets there on our networks and that's exactly what we've seen so.

Ward Nye: So, again, the blocking, the tackling, and the people integration is complete, and it's exactly where you would expect it to be based on our history. Now, from a commercial excellence and operational excellence integration perspective, there are a couple of views on that. If we're looking at commercial excellence, I mean, given the fact that we closed on Blue Water relatively quickly, number one, we were able to announce mid-years in all of those markets effective July 15. And we generally like to provide people with at least 90 days of notice to our customers.

Speaker Change: Again, the blocking tackling and people integration is complete and it's exactly where you would expect it to be based on our history now from.

Speaker Change: The commercial excellence and operational excellence integration perspective, a couple of views on that if we're looking at the commercial excellence I mean, given the fact that we closed on blue water relatively quickly number one we were able to announce mid years in all of those markets effective July 15, and we generally want to provide people with at least 90 days of notice to our customers.

Ward Nye: So, again, the early closing of Blue Water worked to our advantage in that respect. With regard to operational excellence, there are several things that I think are worth noting. Look, we look for quick wins.

Trey Grooms: So again, the early closing of Blue water work to our advantage in that respect.

Trey Grooms: With regard to operational excellence several things that I think are worth noting.

Trey Grooms: Look we look for quick wins, we're looking for suppliers, we're looking to spend more on favorable contracts that typically happens within the first 90 days without any incremental capex, we're seeing that longer term, we're obviously going to be looking at plant upgrades. We're looking at fleet modernization and that typically takes some time and it's got it.

Ward Nye: We're looking for suppliers. We're looking to spend more on favorable contracts. It typically happens within the first 90 days without any incremental cutbacks. We're seeing that.

Ward Nye: Longer term, we're obviously going to be looking at plant upgrades. We're looking at fleet modernization. And that typically takes some time, and it's got a CapEx component. And actually, one of the things that you'll see in the guidance is that CapEx is up modestly, and that's up modestly because of things just like that, in addition to what we feel like could be some opportunistic land purchases later. One thing relative to BWI in particular, keep in mind that it was a carve-out, so no corporate SG&A came with that business. So it was already basically synergized from that perspective. So again, all of that has actually gone very nicely, Trey.

Trey Grooms: Capex component and actually one of the things that you'll see in the guidance is capex is up modestly and thats up modestly because of things just like that in addition to what we feel like it could be some opportunistic land purchases later.

Ward Nye: One thing relative to BWI in particular keep in mind that was a carve out so no corporate SG&A came with that business. So it was already basically synergize from that perspective, so again all of that.

Trey Grooms: It's actually gone very nicely right.

Ward Nye: The other piece of it that you mentioned, and you're right on, if we're looking overall at volume, you remember when we came out at the year not taking these transactions into account, we said we thought minus two to plus two, and the midpoint was zero. What we're seeing now because of interest is really a bit of a weather-impacted start to the year, and the fact is, if we look at five million tons down in Q1, if we parse that, several things are worth noting.

Ward Nye: The other piece of it that you mentioned and Youre right on.

Ward Nye: If we're looking overall at volume you'll remember when we came out of the year not taking these transactions into account. We said, we thought minus two to plus two midpoint was zero.

Trey Grooms: Seeing now because of interest longer are really a bit of a weather impacted start to the year and the fact is if we look at 5 million tonnes down in Q1.

Ward Nye: If we parse that several things worth noting one.

Ward Nye: There were three less shipping days in this quarter than they were last year, that's probably about let's call that a couple of million tonnes. So all by itself, but if we're looking at then at the balance which is quite about 3 million tonnes really try.

Ward Nye: One, there were three fewer shipping days in this quarter than there were last year. That's probably about, let's call that a couple million tons all by itself. But if we're looking then at the balance, which is what, about three million tons, really, Trey? I mean, about a third of that was slower private, about a third of that was weather, and about a third of that is value over volume. So again, when we're taking those components into account and we're looking at organic or heritage volume, we think we're probably closer to the lower end of that original guide.

Ward Nye: About a third of that was slower private about a third of that was weather and about a third of that is value over volume. So again, when we're taking those components into account and we're looking at organic or heritage volume, but we think we're probably closer to the lower end of that original guide, let's call it down to down three and then puts.

Ward Nye: Let's call it down two, down three, and then what you're seeing in the new guide takes the acquisition effect into account. So hopefully, that gives you the bridge that you wanted, Trey, so I tried to go through the integration components of it and then deal also with the volume bridge. Was there a piece of your question I did not respond to yet?

Ward Nye: Youre seeing in the New guide takes the acquisitions effect into account. So hopefully that gives you. The bridge that you wanted to trade. So I tried to go through the integration components of it and then deal also with the volume Bridge was there a piece of your question I did not respond to yet.

Ward Nye: Yeah, Ward, the one thing was just, you know, again, there's a lot of moving pieces here, but just based on some of the information you've given us in the past about BWI in particular, it seems like maybe you're adjusting that kind of standalone EBITDA guide up a bit. Do I have that right?

Speaker Change: Yes, the one the one thing was just.

Ward Nye: Again, there's a lot of moving pieces here, but just based on some of the information you've given us in the past about BWI in particular, it seemed like maybe youre adjusting that kind of stand alone EBITDA guide up a bit do I have that right now.

Ward Nye: No, we are. So if you look at the overall EBITDA midpoint, it's now 2.37 billion. Now that's 11% over where we were last year. So take that into account that, basically, we're going to give you a year's worth of blue water in only nine months. So that's one way to think of it. But the other thing that's important to state is that we're also seeing improvement in the heritage business as well. So we're getting a two for there.

Ward Nye: Now we are so if you look at the overall EBITDA midpoint is now $2 37 billion.

Speaker Change: 11% over where we were last year so.

Ward Nye: Take that into account that basically we're going to give you a year's worth of blue water and only nine months. So that's one way to think of it but the other way thing Thats important to state is we're also seeing improvement in the heritage business as well. So we're getting a twofer there we're getting the benefit of blue water by the way, which we think there is.

Ward Nye: We're getting the benefit of blue water, by the way, which we think there's going to be more to come. We're also seeing improvement in the heritage business. You can see, among other things, we raised the aggregate pricing to 12% at the midpoint. So again, that's going to include some degree of mid-years this year.

Ward Nye: To be more to come we're also seeing improvement in the heritage business you can see among other things we raise the aggregate pricing to 12% at the midpoint and so again that's going to include some degree of mid year this year and keeping in mind. Some of the difficulty that we have is if we're looking at pricing that was in <unk> and <unk>.

Ward Nye: And keeping in mind, some of the difficulty that we have is if we're looking at pricing that was at Frye and pricing that was at Blue Water, their pricing was actually below Heritage Martin Marietta pricing. So the pricing that you're seeing and the changes that you're seeing are despite... The overall headwind that we actually have from the new businesses that we brought in, Trey. So I hope that helps relative to the EBITDA range and what we're doing relative to pricing as well.

Ward Nye: <unk> that was a blue water their pricing was actually below heritage Martin Marietta pricing, so the pricing that youre seeing in the changes that youre seeing or despite.

Ward Nye: The overall headwind that we actually have from the new businesses that we brought in tray. So I hope that helps relative to the EBITDA range and what we're doing relative to pricing as well.

Speaker Change: Yep very helpful color Board. Thank you very much very encouraging and good luck for the rest of the year. Thank you. Thank you so much take care.

Ward Nye: Yep, very helpful call our board. Thank you very much. Very encouraging, and good luck for the rest of the year. Thank you. Thank you so much, Trey. Take care.

Speaker Change: You too.

Ward Nye: Thank you Andrew. Thank you. The next question again from Kathryn Thompson from Thompson Research Group. Your line is open.

Ward Nye: Thank you so much, Trey. Take care.

Operator: Hi, thank you for taking my question. Apology for the technology glitch back here; 15 years in the business, and things still happen. Just a clarification question from your prior answer, which was very helpful around guidance. Just a reminder, how much of the pricing guidance takes into account mid-year pricing actions and also any other factors that we should take into account given a change in mix from acquired and the opportunities for pricing with those acquisitions? And then finally, if I could just do one follow-on with magnesia specialties, what can we read through from a broader macro perspective on this business segment's outperformance? Thank you. Thank you.

Speaker Change: Hi, Thank you for taking my question apology for the.

Operator: Technology Glitch back here 15 years sure.

Speaker Change: Thanks Sterling.

Operator: It does.

Operator: A cleanup question.

Operator: From your prior answer which was very helpful around guidance.

Operator: Just a clarification how much of the pricing guidance takes into account mid year pricing actions and also.

Operator: Any other factors that we should take into account given a change in mix from acquired and the opportunities for pricing, but does.

Operator: Acquisitions, and then finally, if I could just do one follow on with Magnesia specialties for small portion of EBITDA contribution had a great quarter.

Operator: What can we read through from a broader macro perspective on this business segments outperformance. Thank you.

Speaker Change: Thank you Catharine so a couple of things one if we're looking at the pricing guide that we've given for the rest of the year here.

Ward Nye: I mean, here's the direct answer. It's got some mid-years. It doesn't have everything that we believe we're going to see. So what does that mean? It means that now that we've bought Blue Water, we've already indicated to those customers what they're going to get in the mid-years. So we've built that in.

Ward Nye: Here's the direct answer it's got some mid years. It doesn't have everything that we believe we're going to see so what does that mean it means that now that we bought blue water. We've already indicated that those customers, they're going to get mid years. So we've built that in.

Ward Nye: As you may recall, coming into the year, we had indicated, though we had not put it in guidance, we had already indicated to our customers in California that they were going to get mid-years. That has been worked in. So there have been some very specific mid-years that have been worked into the numbers that you see. So the numbers that you're seeing reflect two things: some very direct mid-years. Very nice realization of the beginning year increases that we put in, but the fact is, we still think we're going to see some more increases at mid-year.

Ward Nye: As you may recall coming into the year, we had indicated though we had not put it in guidance, we had already indicated to our customers in California that they were going to get mid years that has been work done. So there have been some very specific mid years that had been worked in to the numbers that you see so the numbers that you're seeing reflect two things some some very direct.

Ward Nye: Mid years.

Ward Nye: Very nice realization of the beginning gear increases that we put in but the fact is we still think we're going to see some more mid years at mid year. So what that tells you is you should expect us to come back with more color on what that looks like when we're reporting during the summer time. So that's the way I would ask you to think about that now.

Ward Nye: So what that tells you is you should expect us to come back with more color on what that looks like when we're reporting during the summertime. So that's the way I would ask you to think about that. Now, relative to MAG's specialty, I would say several things. Number one, the chemical markets globally are still very difficult markets.

Ward Nye: Now relative to Mag specialty so I would say several things number one the chemical markets globally are still very difficult markets now that said Mac just had its best quarter ever. So I'd say a couple of things are worth reading throwing that number one is still doing relatively well. It is is it belonged.

Ward Nye: Now, that said, MAG just had its best quarter ever. So I would say a couple of things are worth reading through on that. Number one, is steel doing relatively well? Yes, it is. But is it blowing the doors off?

Ward Nye: So it's not so it tells us that business is actually performing quite well so steel utilization is about 72%.

Ward Nye: It's not, so it tells us that business is actually performing quite well. So steel utilization is about 72%. So if we're looking at the way that business is overall going, I'm actually very pleased with it. I think a read through that you may be looking at is this. One of the things that we're seeing begin to recover nicely is TPO revenue. And that tells us now as we're looking at degrees of manufacturing and that manufacturing renaissance that we can look for across the United States. TPO roofing is what we're going to see in a lot of these data centers and a lot of these new battery plants and others. So typically, we're watching those products go into larger industrial uses.

Ward Nye: So if we're looking at the way that business is overall going I'm actually very pleased with it I think a read through that you may be looking at is this one of the things that we're seeing begin to recover nicely.

Ward Nye: As CPO roofing.

Ward Nye: And that tells US now as we're looking at degrees of manufacturing in that manufacturing Renaissance that we can look for across the United States.

Ward Nye: That CPO roofing is what we're going to see in a lot of these data centers and a lot of these new battery plants and others. So typically we're watching those products go into larger industrial uses but when we're seeing tpa roofing recover if youre looking for that read through Catherine I don't think Thats, a bad read through.

Ward Nye: But when we're seeing TPO roofing recover, if you're looking for that read through, Kathryn, I don't think that's a bad read. Very helpful. Thanks so much.

Speaker Change: Very helpful. Thanks, so much and best of luck.

Speaker Change: Thank you Catherine.

Ward Nye: Yeah.

Ward Nye: Your next question comes from the line of Stanley Elliott from Stifel. Your line is open.

Ward Nye: Very helpful. Thanks so much and best of luck. Thank you, Kathryn. Your next question comes from the line of Stanley Elliott from SIPL. Your line is open. Good morning, everyone. Thank you for the question.

Stanley Stoker Elliott: Hey, good morning, everyone. Thank you for the question.

Stanley Stoker Elliott: What can you talk a little bit about what youre seeing from an end market perspective, you mentioned.

Operator: Your next question comes from the line of Stanley Elliott from SIPL. Your line is open. Good morning, everyone. Thank you for the question.

Stanley Stoker Elliott: Kind of some building into.

Stanley Stoker Elliott: From a from a volume standpoint, as we're kind of moving through the rest of the year and I apologize. If some of this was covered on some of the others have had some technical difficulties as well, but would love to kind of give some color on what's happening across the end markets.

Ward Nye: Stanley, thank you for the question. I'll be happy to do so.

Ward Nye: I mean, look, let's start with infrastructure, which is our single largest in use and an end use that we think is going to get nicely larger. Look, we see that up mid-single to high-single digits this year for several reasons. One, you've got the bipartisan infrastructure law that's going to be coming in in a meaningful way this year, and it will build into 25 even more meaningfully, so we see that working in a very significant way in a multi-year fashion.

Ward Nye: Stanley. Thank you for the question happy to do so I mean look let's start with infrastructure, which is our single largest end use in an end use that we think is going to get nicely larger unless we see that up mid single to high single digits. This year for several reasons one you've got the the bipartisan infrastructure law, but it's going to be coming.

Ward Nye: In in a meaningful way this year.

Ward Nye: Build into twenty-five even even more meaningfully so we see that working in a very significant way in a multiyear fashion keep in mind too we've got very healthy dot's in our chosen geographies that we're looking at our top 10 states those budgets are up around 10% year over year and last year keep in mind, those budgets were pretty attractive.

Ward Nye: Keep in mind, too, we've got very healthy DOTs in our chosen geographies. If we're looking at our top 10 states, those budgets are up around 10% year over year. And last year, keep in mind, those budgets were pretty attractive.

Ward Nye: As I mentioned in my prepared comments that if we're looking at the last 12 months Highway Bridge and Tunnel Awards those were up 12%, that's 116 billion versus 104 billion during the prior period and the other thing that I think people forget is what's happening at local levels relative to ballot initiatives and published.

Ward Nye: I mentioned in my prepared comments that if we're looking at the last 12 months, highway bridge and tumble ward spending, those were up 12%. That's $116 billion versus $104 billion during the prior period. And the other thing that I think people forget is what's happening at the local levels relative to ballot initiatives, and what we saw last year were about $7 billion for transportation funding approved in 2023 that we'll see in the marketplace this year. So again, we think infrastructure looks attractive. If we're looking at non-res, you know, our view is still largely the same.

Ward Nye: Sold last year were about $7 billion of transportation funding approved in 2023 that will see in the marketplace. This year. So again, we think infrastructure it looks attractive.

Ward Nye: We're looking at non Res you know our view is still largely the same we think that's down probably mid single digits, perhaps a little bit more keep in mind of the portion of our business that is non res around 55% of it is heavy non res in about 45% of it is light nonresident by the way, we think that's a pretty good break and we like the way that looks.

Ward Nye: We think that's down probably mid-single digits, perhaps a little bit more. Keep in mind that of the portion of our business that is non-res, around 55% of it is heavy non-res, and about 45% of it is light non-res. And by the way, we think that's a pretty good break and we like the way that looks. Now, if we're thinking about heavy things, several things are worth keeping in mind.

Ward Nye: Now if we're thinking about heavy several things are worth keeping in mind.

Ward Nye: When we put it in the supplemental slides the fact that Theres $53 billion worth of chipset money and about $250 billion of inflation reduction act money there'll be flowing through those sectors over the next several years, but we're seeing more specifically is demand for heavy side energy and domestic manufacturing that continues to be really.

Ward Nye: One, we put in the supplemental slides the fact that there's $53 billion worth of CHIPS Act money and about $250 billion of Inflation Reduction Act money that will be flowing through those sectors over the next several years. But what we're seeing more specifically is demand for heavyside energy and domestic manufacturing that continues to be really resilient, and we think that's offsetting moderation in degrees of distribution in warehousing. Now, where we are seeing some green shoots, and I think this is important, is in AI and in data centers. So, for example, I mentioned Google is building a new facility in Kansas City. It's going to take about 800,000 tons, but it's not just here.

Ward Nye: Zillions and we think that's offsetting moderation and degrees of distribution and warehousing.

Ward Nye: We are seeing some green shoots and I think this is important.

Ward Nye: Is in AI and in data centers. So for example, I mentioned, Google is building a new facility in Kansas City, it's going to take about 800000 tons, but it's not just there I mean, we're seeing it across the Midwest, we're seeing it in Omaha were singing and des Moines.

Ward Nye: And we're gonna be a disproportionate beneficiary of that due to the availability of land and wind power in those states, where we actually have a very significant interest.

Ward Nye: Now.

Ward Nye: Light non res is in fact in our view going to be impacted near term by the high interest rates for longer and office vacancy rates and I think that partly goes back to the commentary that I was having with Trey relative to what we see going on with organic volume. So so that's certainly a piece of it.

Ward Nye: I mean, we're seeing it across the Midwest. We're seeing it in Omaha. We're seeing it in Des Moines.

Ward Nye: And we're going to be a disproportionate beneficiary of that due to the availability of land and wind power in those states where we actually have a very significant interest. Now, Light non-res is, in fact, in our view, going to be impacted near-term by the high interest rates for longer and office vacancy rates. And I think that partly goes back to the commentary that I was having with Trey relative to what we see going on with organic volume, so that's certainly a piece of it. And resi, we see that down to, let's call it, low single digits, maybe modestly higher than that.

Ward Nye: And Ramsey, we see that down let's call. It low single digits, maybe modestly higher than that we think softness will persist there as we continue navigating this period of higher mortgage rates, that's impacting affordability I think clearly people are thinking today that mortgage rates are going to remain higher than they would have thought.

Ward Nye: In February and I think that's part of the reality of it.

Ward Nye: But I do like the recent trends I mean, if we're looking at recent trends in single family housing starts are encouraging because since last November the starts have been at a million units and that's a nearly 21% year over year increase.

Ward Nye: We think softness will persist there as we continue navigating this period of higher mortgage rates that's impacting affordability. I think clearly people are thinking today that mortgage rates are going to remain higher than they would have thought in February, and I think that's part of the reality. But I do like the recent trends. I mean, if we're looking at recent trends in single-family housing, starts are encouraging because, since last November, starts have been at a million units, and that's a nearly 21% year-over-year increase.

Ward Nye: And we know the demand is going to have to be met with new construction and again, if you take a look at the states with big population inflows I mean think about these states and think about Martin Marietta, Texas, Florida, North Carolina, Georgia et cetera.

Ward Nye: So while we think near term single family housing is going to be a modest headwind. We think long term, it's going to be really very attractive. So our view is if we look at infrastructure and think about how that's going to build multi year. We look at rather think about how that's going to build multi year. We look at the heavy side of non res. We think that's going to continue to be very resilient and we think the <unk>.

Ward Nye: And we know the demand is going to have to be met with new construction. And again, if you take a look at the states with big population inflows, I mean, think about these states and think about Martin Marietta, Texas, Florida, North Carolina, Georgia, et cetera. So while we think near-term single-family housing is going to be a modest headwind, we think long-term it's going to be really very attractive. So our view is if we look at infrastructure and think about how that's going to build multi-year, we look at res, think about how that's going to build multi-year, we look at the heavy side of non-res, we think that's going to continue to be very resilient, and we think the light non-res is going to come behind res, most likely with that six to nine month lag.

Speaker Change: Non res is going to come behind whereas most likely with that six to nine month lag. So Stanley I hope that helps.

Speaker Change: Great color ward, thanks, so much and best of luck.

Ward Nye: Stanley.

Ward Nye: Your next question comes from the line of Anthony Pettinari from Citi. Your line is open.

Speaker Change: Hi, good morning.

Ward Nye: Hum.

Ward Nye: With the portfolio moves it looks like Youll raise your aggregates mix from high <unk> to high <unk> in terms of gross profit and my question is is there a kind of a long term.

Ward Nye: Target percentage that you envision there.

Speaker Change: Understanding you will continue to grow aggregates organically and through acquisitions I'm. Just wondering if you could talk about kind of the role you see Mag and the remaining cement assets playing in the broader portfolio.

Ward Nye: Yeah, I'd say several things number one we arent aggregates led company and we've always told people. That's what you should expect us to be in the moves that we have made are totally consistent with that.

Ward Nye: So Stanley, I hope that helps. Great Color Award, thanks so much and best of luck. Thank you, Stanley. Your next question comes from the line of Anthony Pettinari from Citi. Your line is open. Good morning.

Anthony James Pettinari: So should you expect to see aggregates number go up largely because I think we will be buying relatively aggregates pure businesses I think the answer to that question is yes.

Operator: Your next question comes from the line of Anthony Pettinari from Citi. Your line is open.

Anthony James Pettinari: Equally though if we pivot and talk about the other two businesses that you spoke up remember we've long spoken of the criticality of strategic cement and we've said strategic cement is where we are in aggregates leader, where the market is naturally vertically integrated where we have a significant downstream business, meaning ready mix concrete that takes a significant portion of the Smith <unk>.

Operator: Good morning. Oh, yeah. Hey. Hey.

Ward Nye: Let's say several things. Number one, we are an aggregates-led company, and we've always told people that's what you should expect us to be, and the moves that we have made are totally consistent with that. Should you expect to see aggregates numbers go up largely because I think we'll be buying relatively pure businesses? I think the answer to that question is yes. Equally, though, if we pivot and talk about the other two businesses that you spoke of, remember, we've long spoken of the criticality of strategic cement.

Ward Nye: And where it cannot be meaningfully interdicted by water and the factors that is precisely what midlothian means to us and one of the things that you would keep in mind, Anthony We've got 450000 tons worth of annual capacity that would be coming on at Midlothian. This year in Q3. So we continue to invest in that business, because we like that business.

Ward Nye: We very much like being in that business in Dallas Fort worth.

Ward Nye: Equally if you look at the Magnesia specialties business and keep in mind, that's a business that we have about $100 million worth of investment.

Ward Nye: And we've said strategic cement is where we're an aggregates leader, where the market is naturally vertically integrated, where we have a significant downstream business, meaning ready-mix concrete, that takes a significant portion of the cement, and where it cannot be meaningfully interdicted by water. And the fact is, that is precisely what Midlothian means to us.

Ward Nye: That's a business that's going to make over $100 million a year and frankly, it's a business that if we can find ways to responsibly grow what they've earned that right because from a margin perspective, that's a hugely attractive business. So the way we think of it yes. It's aggregates led you bet are we looking in particular at those three big.

Ward Nye: Screamed businesses is driving the vast majority of our revenues and profits in the upstream businesses, meaning number one aggregates number two cement number three mag specialties. So yes, you will see that aggregates percentage go up and yes. Your number was right I mean, we're sitting here today looking at gross profit.

Ward Nye: And one of the things that you'll keep in mind, Anthony, we've got 450,000 tons of annual capacity that will be coming on at Midlothian this year in Q3. So we continue to invest in that business because we like that business. And we very much like being in that business in Dallas-Fort Worth. Equally, if you look at the Magnesia Specialties business, and keep in mind, that's a business where we have about $100 million worth of investment.

Ward Nye: From aggregates at about 77% and if we look to where we were a year ago. It was somewhere sub 70% closer to 69, so expect that number to keep going up but I hope I've also outlined to the way that we think about are very important and very good cement business in Dallas Fort worth and a high.

Ward Nye: That's a business that's going to make over $100 million a year, and frankly, it's a business that if we can find ways to responsibly grow it, they've earned that right, because from a margin perspective, that's a hugely attractive business. So the way that we think of it, yes, is it aggregated? You bet.

Ward Nye: Performing magnesia specialties business as well.

Ward Nye: Yeah.

Speaker Change: Okay. That's very helpful I'll turn it over.

Ward Nye: Anthony.

Ward Nye: Okay.

Ward Nye: And your next question comes from the line of Jerry Revich from Goldman Sachs. Your line is open.

Ward Nye: Hi, Good morning, everyone. This is Jonathan on behalf of <unk>.

Ward Nye: Are we looking in particular at those three big upstream businesses as driving the vast majority of our revenues and profits? And the upstream businesses meaning, number one, aggregates, number two, cement, and number three, mag specialties? So yes, you will see that aggregate percentage go up, and yes, your number was right. We're sitting here today looking at gross profit from aggregates at about 77%, and if we look at where we were a year ago, it was somewhere sub-70%, closer to 69%. So expect that number to keep going up, but I hope I've also outlined to you the way that, Okay, that's very helpful. Thank you, Anthony, and your next

Speaker Change: From a portfolio standpoint, what has driven significant deal opportunities for you on his desk for the assets refinement for the industry.

Speaker Change: What's the range of additional M&A, if that's feasible based on your pipeline. Thank you.

Speaker Change: Thank you for the question I would say several things one we have looked in the markets in which we want to grow and in the markets. Most importantly that we can grow. So we have several things that advantages number one the condition of our balance sheet. So if you look at our balance sheet. We are in a position that we can grow and we can continue to grow smartly number two if you look at the transactions that we.

Ward Nye: We've done I think youll look at the transactions and say that we have done those in a wise and prudent fashion. If we look at businesses that we want to buy in markets in which we want to enter by our math, we found businesses that on a per annum basis produce and sell about 238 million tons of aggregates per annum.

Operator: And your next question comes from the line of Jerry Revich from Goldman Sachs. Your line is open. Hi, good morning, everyone. This is Jatin.

Operator: Thank you for the question. I would say several things. One, we have looked at the markets in which we want to grow and, most importantly, in the markets where we can grow. So we have several things that are in our favor. Number one, the condition of our balance sheet.

Operator: That's the way to capture that basically theres. Another Martin Marietta, that's out there that we believe we have the ability overtime Dubai now can I sit here and tell you from a linear perspective exactly what that's going to look like no I can't but can I tell you that I believe economically geographically regulatory and otherwise that we are.

Ward Nye: So if you look at our balance sheet, we are in a position that we can grow and we can continue to grow smartly. Number two, if you look at the transactions that we've done, I think you'll look at the transactions and say that we have done those in a wise and prudent fashion. If we look at businesses that we want to buy in markets in which we want to enter, by our math, we've found businesses that, on a per annum basis, produce and sell about 238 million tons of aggregates per annum.

Ward Nye: Our uniquely positioned to do that.

Ward Nye: In my view better than any other publicly held company in the United States I believe that we are and of course I look at the world through Martin Marietta lenses, but I also believe that's a good clinical view of where we are our team is good at that we're good at.

Ward Nye: Identifying businesses were good at the contracting phase of it and as you heard during my earlier comments were very good at the integration and synergy phase of it as well.

Ward Nye: And our shareholders like what we do from M&A. So will it continue to be our first call on capital. If we've got the right deal. The answer is it will so our capital priorities remain the same the right deal is number one investing in the business responsibly is number two and returning cash to shareholder.

Ward Nye: Here's the way to capture that. Basically, there's another Martin Marietta that's out there that we believe we have the ability, over time, to buy. Now, can I sit here and tell you, from a linear perspective, exactly what that's going to look like? No, I can't.

Ward Nye: Through a meaningful and sustainable dividend and through share repurchases remains number three and my guess is those will be our priorities for for quite a while so again I hope that's responsive to your question.

Ward Nye: But can I tell you that, economically, geographically, regulatoryly, and otherwise, that we are uniquely positioned to do that? In my view, better than any other publicly held company in the United States. I believe that we are. And, of course, I look at the world through Martin Marietta lenses, but I also believe that's a good clinical view of where we are.

Ward Nye: So its time slot.

Speaker Change: Thank you.

Ward Nye: Your next question comes from the line of Anjelica Yao from Morgan Stanley.

Ward Nye: Your line is open.

Speaker Change: Alright, Thanks for taking my question and more just to build off of that last comment there. It sounds like nothing's really changing there in terms of our capital allocation priorities, but curious.

Ward Nye: Our team is good at that. We're good at identifying businesses. We're good at the contracting phase of it, and, as you heard during our earlier comments, we're very good at the integration and synergy phase of it as well.

Ward Nye: As M&A, perhaps are there opportunities to do things at attractive.

Ward Nye: And our shareholders like what we do in M&A. So will it continue to be our first call on capital if we've got the right deal? The answer is it will.

Ward Nye: Detractive a multiple than you have done and kind of the last.

Speaker Change: Several quarters here just curious as you think about that valuation one how is it evolving in terms of the pipeline opportunities and two.

Ward Nye: So our capital priorities remain the same. The right deal is number one. Investing in the business responsibly is number two. And returning cash to shareholders through a meaningful and sustainable dividend and through share repurchases remains number three. And my guess is those will be our priorities for quite some time. So again, I hope that's responsive to your question.

Ward Nye: I think some of your peers have talked about the ability to do greenfields and kind of a shorter period of time. This is four years.

Speaker Change: Help us understand I guess, maybe how that's evolving with rates, where they are with valuations where they are just any kind of puts and takes there in terms of opportunities of operating plants as well as M&A.

Operator: Your next question comes from the line of Angel Castillo from Morgan Stanley. Your line is open.

Angel Castillo: Thank you for the question.

Operator: Hi, thanks for taking my question. And to build off of that last comment there, it sounds like nothing's really changing there in terms of the capital allocation priorities. But curious, you know, as in M&A perhaps, or the opportunities to do things as attractive, as attractive of multiples as you have done in kind of the last several quarters here, just curious as you think about that valuation, one, how is it evolving in terms of the pipeline opportunities?

Angel Castillo: Number one what I would say is when we go through a transaction and look at what we can do from a synergy perspective on making the operations safer on making the operations more efficient and making sure that we can bring more products to market the ability to go through our business and synergize with from those perspective. So it works for our customers is.

Operator: Important and that's precisely what we've been able to do at Blue water and that's what we're doing right now at Albert fried and through through that type of process that we have we can take what might otherwise look like a relatively high multiple and by the time, we're done with it bring it to a multiple but you look at I look at our shareholders look at it and feel like that's a very attractive multiple.

Operator: And two, you know, I think some of your peers have talked about the ability to do greenfields in kind of a shorter period of time, like four years. So just. Help us understand, I guess, maybe how that's evolving with rates where they are, with valuations where they are, just any kind of puts and takes there in terms of opportunities around greenfields as well. Yeah, thank you for the question. Number one, what I would say is when we go through a transaction and look at what we can do.

Operator: Our view is that's the way that we're going to continue growing our business now from a land use and planning perspective.

Operator: Look we're good at that too where we're good at identifying property. We're good at going through the zoning, we're good at going through special use permitting.

Operator: But frankly, you're going to see more of that adjacent to ongoing operations than you will from a greenfield perspective, and one one reason I feel that way like I think four years is a pretty heady timeframe to think about a greenfield operation I think a more realistic time frame is probably seven to 10 years and if we think about.

Ward Nye: Yeah, thank you for the question. Number one, what I would say is when we go through a transaction and look at what we can do from a synergy perspective on making the operations safer, on making the operations more efficient, and making sure that we can bring more products to market, the ability to go through a business and synergize it from those perspectives so it works for our customers is important, and that's precisely what we've been able to do at Blue Water, and that's what we're doing right now at Albert Frye.

Ward Nye: The difference in cash flow getting a meaningful profit in buying a business today as opposed to Greenfield and we think that's a more constructive way to do it.

Ward Nye: Other thing to keep in mind is we're an awfully long way away from being anywhere near peak volumes in our business. So we're looking at reserves in the ground today that are at nearly 70 years at current extraction rates. So our need to go out and put in Greenfield locations is not terribly high our need in some instances.

Ward Nye: And through that type of process that we have, we can take what might otherwise look like a relatively high multiple and, by the time we're done with it, bring it down to a multiple that you look at, I look at, our shareholders look at, and feel like that's a very attractive multiple. Our view is that's the way that we're going to continue growing our business. Now, from a land use and planning perspective, look, we're good at that, too. We're good at identifying property. We're good at going through zoning. We're good at going through special use permitting.

Ward Nye: For example, in California, and what we did in Colorado years ago in buying adjacent properties bulking up.

Ward Nye: What looks like a 30 year reserve position in California, It's something that's gonna be a lot longer we think that's a very sensible way to go through land purchase and you heard me speak earlier in our Capex number we're looking at some opportunistic land purchases, but I would expect us to do M&A I would expect us to do it within multiples.

Ward Nye: That to us and I believe you will look quite reasonable and I would look for us not to do so much greenfield ing, but to be more focused in our heritage business and adding reserves to existing locations.

Ward Nye: But frankly, you're going to see more of that adjacent to ongoing operations than you will from a greenfield perspective. And one reason I feel that way is that, look, I think four years is a pretty short time frame to think about a greenfield operation. I think a more realistic time frame is probably 7 to 10 years, and if we think about the difference in cash flow, getting a meaningful profit, and buying a business today as opposed to greenfielding, we think that's a more constructive way to do it.

Speaker Change: Okay helpful. Thank you.

Ward Nye: <unk>.

Ward Nye: And hearing no production comes from the line of Derek <unk> from loop capital markets. Your line is open.

Speaker Change: Oh, hi, Thank you I was hoping if you could speak to what Youre seeing on the cost side. Obviously, you had good margin performance in aggregates in the quarter. Despite the weaker volumes I'm just wondering if you could speak to.

Ward Nye: The other thing to keep in mind is we're an awfully long way away from being anywhere near peak volumes in our business, so we're looking at reserves in the ground today that are at nearly 70 years at current extraction rates, so our need to go out and put in greenfield locations is not terribly high. Our need in some instances, for example, in California and what we did in Colorado years ago in buying adjacent properties, bulking up what looks like a 30-year reserve position in California to something that's going to be a lot longer, we think that's a very sensible way to go through land purchase, and you heard me speak earlier in our CapEx number, we're looking at some opportunistic land purchases, but I would expect us to do M&A.

Ward Nye: Any updated cost assumptions, if anything has changed since the beginning of the year.

Speaker Change: Yeah, Hey, Gary Jim here.

Ward Nye: I think I indicated in last quarter's call about 7%.

Ward Nye: Cogs per ton inflation, I think that's still accurate for the full year.

Ward Nye: I would say that inflation rate will be higher in the first half of the year and lower in the back half of the year, but at a blended average of 7%. So I think that's still consistent we did have some diesel tailwind Q1, that's going to fade as the year goes on but I think on an overall basis, I think 7% still the right number.

Speaker Change: Very helpful. Thank you.

Speaker Change: Thank you Garrett.

Ward Nye: Yeah.

Suntrust: Your next question comes from the line of Suntrust. Your line is open.

Ward Nye: I would expect us to do it within multiples that will look quite reasonable to us, and I believe it will look quite reasonable to you, and I would look for us not to do so much greenfielding but to be more focused on our heritage business and adding reserves to existing locations.

Speaker Change: Hi, Thank you just wanted to go back to the organic units.

Speaker Change: Expectation for the year I'm, a little surprised at some of your comments given the usually this weather gets pushed whether short.

Ward Nye: Shortfall gets pushed forward and with the highway money coming in as the as the nominal sort of offset that drag if you could just talk a little more about that.

Ward Nye: Very helpful. Thank you. Thank you.

Ward Nye: I think the overall private offset is is what we're more focused on.

Operator: And your next question comes from the line of Garik Shmois from Lube Capital Markets. Your line is open. Oh, hi. Thank you. I was hoping you could speak to

Garik Simha Shmois: I think we believe the heavy side of non res will continue to be attractive Keith I think we believe that we're going to see a continued build in public throughout the year with momentum going into next year I think if we're seeing degrees of softness and we are it's going to be in the light non res and the res and of course single family raises about two to three.

Operator: Yeah, Garik, Jim here. I think I indicated on the last quarter's call, about 7%. Cogs Per Ton Inflation.

James A. J. Nickolas: Very helpful. Thank you. Thank you, Garik. Your next question comes from

Operator: Your next question comes from the line of Keith Hughes from Truist. Your line has been Uh, thank you. I just want to go back to the organic.

Keith Brian Hughes: Times more aggregates intensive than multifamily is.

Keith Brian Hughes: So I think as we're just looking at it through those lenses with longer higher interest rates and frankly degrees of shared that we're probably giving up and have given up with respect to our value over volume philosophy I think as we're looking at those things together that that leads us to the <unk>.

Ward Nye: I think the overall private offset is what we're more focused on. I think we believe the heavy side of non-res will continue to be attractive, Keith. I think we believe that we're going to see a continued build in public throughout the year with momentum going into next year. I think if we're seeing degrees of softness, and we are, it's going to be in the light non-res and the res. And, of course, single-family housing is about two to three times more aggregate-intensive than multi-family housing.

Ward Nye: <unk> that I've offered to you relative to the organic overall vault.

Ward Nye: Volume on aggregates.

Speaker Change: Okay. Thank you thank.

Speaker Change: Thank you Kate.

Ward Nye: Your next question comes from the line of Phil <unk> from Jefferies.

Speaker Change: Your line is open.

Speaker Change: Hey, guys.

Ward Nye: So I think as we're just looking at it through those lenses with longer, higher interest rates and frankly degrees of share that we're probably giving up and have given up with respect to our value over volume philosophy, I think as we're looking at those things together, that leads us to the conclusion that I've offered to you relative to the organic overall volume on aggregates. Thank you, Keith. Your next question comes from the line of Phil Ng from Jaffa, Reese. Dreadline is open.

Ward Nye: <unk>, Texas, a metal are smaller now the divestiture.

Philip H. Ng: What it was obviously a little left to start the year. So just curious how is the April Texas demand increase coming along.

Philip H. Ng: You guys are obviously ramping up grinding capacity from melodeon.

Philip H. Ng: Have you locked up some of that business any risk that it puts on perhaps pricing in the back half and does the market in your view support potentially a mid year for Texas cement at least where you guys are situated.

Philip H. Ng: Well thanks for the question on say several things one if we're looking at ASP really looking at it on a mix adjusted it was up by eight 7% I mean number one that's a pretty good number taking into account a lot of things happened in April the other thing that I would tell you is we have not given up the ghost on the prospect of a price increase in September.

Operator: Your next question comes from the line of Phil Ng from Jaffa, West Virginia. Dreadline is open. Hey guys, appreciating Texas America.

Operator: Well, thanks for the question. I'd say several things.

Ward Nye: One, if we're looking at ASP, really, we're looking at it on a mixed adjusted basis, it was up like 8.7%. I mean, number one, that's a pretty good number taking into account a lot of things that happened in April. The other thing that I will tell you is we have not given up the ghost on the prospect of a price increase in September as well. So, no, we continue to see North Texas as very healthy.

Philip H. Ng: As well so no we continue to see North, Texas being very healthy we continue to see the pricing environment. There very good and keep in mind, we've got a big internal customer there of of our own as well and and we treat our own business just like we treat other customers.

Ward Nye: Marketplace. So again, we feel like that that's going to be pretty attractive you know the other piece of it that fits together I think this is worth saying as we look at it equally if we look at Asps in ready mix I mean, they they were up 9% versus the prior year quarter. So again, the ready mix business. Despite the fact that we had significant weather headwinds in the southwest.

Ward Nye: We continue to see the pricing environment there as very good. And keep in mind, we've got a big internal customer there of our own as well. And we treat our own business just like we treat other customers in that marketplace. So, again, we feel like that's going to be pretty attractive. The other piece of it that fits together, I think this is worth saying as we look at it, equally. If we look at ASPs in ReadyMix, I mean, they were up 9% versus the prior year quarter.

Ward Nye: We actually had nice weather or nicer weather in Arizona, and if we look at the overall gross profit for ready mix for the quarter.

Ward Nye: Quarter over quarter, it was actually nicely up and again I read that through for you Phil because I think thats a good indicator of what's happening in cement as well.

Ward Nye: So, again, the ReadyMix business, despite the fact that we had significant weather headwinds in the Southwest, we actually had nice weather or better weather in Arizona. And if we look at the overall gross profit for ReadyMix for the quarter, quarter over quarter, it was actually nicely up. And again, I'll read that through for you, Phil, because I think that's a good indicator of what's happening in cement as well. And your next question comes from the line of Brent Dillman.

Ward Nye: Yeah.

Ward Nye: Yes.

Ward Nye: Yeah.

Ward Nye: And your next question comes from the line of Brent Thielman from D. A Davidson your line is open.

Brent Edward Thielman: Hey, Thanks, good morning.

Brent Edward Thielman: Word what inning are quarter, or however, you'd like to describe.

Brent Edward Thielman: Do you think you are in with respect to the legacy Heidelberg assets, essentially the California business I'm thinking in particular, just around the pricing optimization strategy and can we infer sort of a similar timeline for what you plan to implement an ASX BWI.

Operator: And your next question comes from the line of Brent Tillman from DA Davidson. Your line is open. Hey, thanks. Good morning.

Brent Edward Thielman: But thank you for the question I would say several things one I still think we are in relatively early innings in California, I mean, that's still a business that if we look at the overall average selling price it's below our corporate average.

Operator: But thank you for the question. I would say several things.

Ward Nye: One, I still think we're in relatively early innings in California. I mean, that's still a business that, if we look at the overall average selling price, it's below our corporate average. You can't say that about many things in California.

Operator: You can't say that about many things in California. So I think that's a piece of it I think the other thing that we're focused on is continuing to grow our business in aggregates in that state and I think as we continue to do that.

Ward Nye: So I think that's a piece of it. I think the other thing that we're focused on is continuing to grow our business in aggregates in that state. And I think as we continue to do that, that business will mature. That business will become more profitable. And our team will become more seasoned.

Ward Nye: That business will mature that business will become more profitable our team will become more seasoned and that business from the perspective of what does that look like from a percentage of.

Ward Nye: <unk> profit looked like it looked like a lot of blood to the rest of Martin Marietta side I would think we are in relatively early innings. There. If we think about the fry business and the blue water businesses, Yeah look I mean, they're clearly below a Martin Marietta average were already talking obviously about mid years in the blue water transactions.

Ward Nye: And that business, from the perspective of what it looks like from a percentage of profit, it'll look like a lot of the rest of Martin Marietta. So I would think we're in relatively early innings there. If we think about the fry business and the blue water businesses, yeah, look, I mean, they're clearly below the Martin Marietta average. We're already talking, obviously, about mid-years in the blue water transactions. You know, those are also more home markets for us.

Ward Nye: Yeah. Those are also more home markets for us I mean, that's those are south eastern markets and markets that we know well I'm not sure, but the rate and pace of those businesses will look like compared to California.

Ward Nye: I mean, those are southern markets and markets that we know well. I'm not sure what the rate and pace of those businesses will look like compared to California, but my guess is they will likely run in parallel, maybe modestly ahead. That would be the way I would think about it.

Ward Nye: But my guess is they will likely run in parallel maybe modestly ahead that that would be the way I would think about it Brian.

Speaker Change: Okay very good thank you.

Speaker Change: Thank you.

Operator: Your next question comes from the line of Michael Dudas from Vertical Research. Your line is open.

Ward Nye: Your next question comes from the line of Michael Dudas from vertical research. Your line is open.

Operator: Corny Jacklyn, Ward, Jim. Hey, Michael. Let's come back to your comment on data centers relative to some of the other heavy non-res markets. It seems a little bit more, at least in the presentation as well, a bit more cautious. Is that a reflection of just the fact of, you know, power siting issues, lumpiness, and where these data centers are going to be in the areas that you participate in? It's just a little, it's just, there's so much demand there.

Speaker Change: Good morning, Jacqueline Award Jim.

Speaker Change: Hey, Michael.

Operator:

Operator: Come back to your comment on data centers.

Operator: Relative to some of the other heavy non res markets seemed a little bit more clearly seen in the presentation as well a bit more cautious kind of a reflection of just the fact of power siting issues Lumpiness and where these datacenters are going to be in the areas that you participate. It's just is it just there's so much demand there.

Operator: It just needs to be in the.

Operator: Kind of.

Operator: It just needs to be a kind of sorting out of this opportunity. I just want to get a sense from your standpoint being a large vendor in the early stages. Yeah, I would say several things about it. Number one, there's a really good piece in the wall.

Operator: Sorting out of this opex I just want to get a sense from your standpoint being a large vendor on the early stage of it.

Operator: Yes, I would say several things about it number one there was a really good piece in the Wall Street Journal about 10 days ago talking about how prolific these data centers will be in talking to a degree about but some of the roadblocks that have been in getting them in and they're multiple one is land I mean, what's available to us degrees of energy and I think one reason we.

Ward Nye: Yeah, I would say several things about it. Number one, there was a really good piece in the Wall Street Journal about ten days ago talking about how prolific these data centers will be and talking to a degree about what some of the roadblocks have been in getting them in. And they're multiple. One is land. I mean, what's available. Two is energy.

Ward Nye: Feel particularly good about that is the presence that we have in the central part of the United States. So as I'm sitting here today, there are four data centers under construction today in eastern Nebraska and Western Iowa.

Ward Nye: And those are actually really important markets for us. So again as we're looking at the long term secular e-commerce cloud AI trends, but importantly, the player on that I think that's where we get to advantaged Martin Marietta because are we going to have to have more of that in the south east, yes, as land use is going to be a bit more complicated here.

Ward Nye: And I think one reason we feel particularly good about that is the presence that we have in the central part of the United States. So, as I'm sitting here today, there are four data centers under construction today in eastern Nebraska and western Iowa. I mean, and those are actually really important markets for us. So again, as we're looking at the long-term secular e-commerce, cloud, and AI trends, but importantly where on that, I think that's where we get to advantage Martin Marietta because are we going to have to have more of that in the southeast? Yes. But is land use going to be a bit more complicated here? Yes. Will they need more in Texas in the southwest? Yes. And so will land use, people, water, etc.

Ward Nye: Yes, well they need more in Texas, and the southwest, Yes, and we'll land use people water et cetera would be a bit more complicated, yes, but again as we're looking in the central United States today.

Ward Nye: We have a very significant presence in a very attractive business I think in the near term, meaning 24 part of early 'twenty five.

Ward Nye: I think that's where we'll see it and I think that's going to be our differentiator.

Ward Nye: Thank you thank.

Speaker Change: Thank you.

Ward Nye: Yeah.

Ward Nye: Your next question comes from the line of Adam Thalheimer from Thompson Davis Your line is open.

Speaker Change: Hey, good morning, guys.

Ward Nye: Be a bit more complicated? Yes. But again, as we're looking in the central United States today, where we have a very significant presence and a very attractive business, I think in the near term, meaning 24, part of early 25, I think that's where we'll see it, and I think that's going to be our differentiator. Thank you, Ward. Thank you.

Speaker Change: Or can you comment on the the value over volume strategy kind of why is that.

Ward Nye: Sticking with US here and then any additional color on.

Ward Nye: Why are we dealing with that issue.

Ward Nye: I guess, one thing that I would I would say is you know frankly, I think our products have been underpriced for a long time and you know theres no heavy side building activity that takes place without our product.

Ward Nye: And we're 10% of the cost of building a road were 2% of the cost of building a home and somewhere between those two numbers on a non res project.

Ward Nye: Your next question comes from the line of Adam Thalhimer from Thompson Davis. Your line is open. Hey, good morning, guys. Hey, Ward, can you comment on

Ward Nye: But we're also mining and putting something on the ground that takes a lot of skill to do it well and to do it safely.

Operator: I guess one thing that I would say is, you know, frankly, I think our products have been underpriced for a long time. And, you know, there's no heavyside building activity that takes place without our products, and we're 10% of the cost of building a road, we're 2% of the cost of building a home, and somewhere between those two numbers on a non-res project. But we're also mining and putting something on the ground that takes a lot of skill to do it well and to do it safely.

Operator: And from our perspective, making sure we're getting good value for the product is really important and yeah. If you look at the quarter that just ended if ever there was a quarter that revealed why value over volume is so important. This has been at right I mean, youre looking that asp's up over 12% Youre looking at volume down, 12%, but here's what you and I know the <unk>.

Operator: Pricing is going to stick and the volume is going to come back and when those two things happened. What you have is a margin expansion show that's really quite impressive so.

Ward Nye: And from our perspective, making sure we're getting good value for the product is really important. And if you look at the quarter that just ended, if ever there was a quarter that revealed why value over volume is so important, this was it, right? I mean, you're looking at ASPs up over 12%, you're looking at volume down 12%, but here's what you and I know. The pricing is going to stick, and the volume is going to come back. And when those two things happen, what you have is a margin expansion show that's really quite impressive.

Ward Nye: If we look at the overall difficulties of doing our business the overall difficulties of getting into our business.

Ward Nye: And the degree of work that we have to go through to <unk>.

Ward Nye: Put a quality specification product on the ground safely.

Ward Nye: I think talking to our teams about value is an important conversation for us to have and from a customer perspective, what we've largely seen as if they have enough time to work those numbers into their bid.

Ward Nye: So, if we look at the overall difficulties of doing our business, the overall difficulties of getting into our business, and the degree of work that we have to go through to put a quality specification product on the ground safely, I think talking to our teams about value is an important conversation for us to have. And from a customer perspective, what we've largely seen is whether they have enough time to work those numbers into their bid.

Ward Nye: It tends to work relatively well from their perspective as well so look as we've said before I think if we're in a world that we're looking at pricing the way. It was looked at in our company here four or five years ago going forward something has gone wrong at that point.

Ward Nye: I just I believe we're in a different period of time, a different economic cycle in a different way of thinking about the value of our product in the ground and in the stockpile.

Ward Nye: It tends to work relatively well from their perspective as well. So look, as we've said before, I think if we're in a world where we're looking at pricing the way it was looked at in our company here four or five years ago, going forward, something has gone wrong at that point. I just believe we're in a different period of time, a different economic cycle, and a different way of thinking about the value of our product on the ground and in the stock market.

Speaker Change: Good color thanks, a lot.

Speaker Change: Thank you Adam.

Ward Nye: Yeah.

Ward Nye: And your next question comes from the line of David Macgregor with Longbow Research. Your line is open.

Speaker Change: Yes, good morning, everyone and thanks for taking my questions and congratulations on all the progress on the portfolio management very impressed David. Thank you. Thank you so much you've watched it a long time. So you have you been able to see it.

Speaker Change: Yeah, well, it's still go on it sounds like it's still has more to go.

Speaker Change: I wanted to just.

Ward Nye: Ask you about the.

Operator: And your next question comes from the line of David MacGregor from Longbow Research. Your line is open.

Ward Nye: Weather impact in the first quarter and how that May have complicated price realizations on your kind of your pricing.

Operator: Good morning, everyone, and thanks for taking my questions. Ward, congratulations on all the progress on portfolio management. David, thank you so much. You've watched it a long time, so you've been able to see it.

David Sutherland MacGregor: Touched this in response to a previous question, but I wanted to come at this a slightly different angle.

David Sutherland MacGregor: Can you just talk about the variance that you're seeing on kind of an MSA MSA basis across Europe.

David Sutherland MacGregor: Our footprint in terms of traction on this price increase and also from from a weather standpoint, given that maybe some of this is getting pushed out a little bit does it leave you maybe looking at some ASP pressure temporarily into Q before youre able to get us.

Ward Nye: Yeah, well, it's still going. It sounds like it still has more to go. I wanted to just ask you about... The Weather Impact, www.youtube.com.uk, And also, from a weather standpoint, given that maybe some of this is getting pushed out a little bit, does it leave you maybe looking at some ASP pressure temporarily? For more information, visit www.fema.gov.

Ward Nye: Greater footing on those price actions in <unk> and beyond.

Ward Nye: David Thanks for the question I would say several things no to the last part of your question first I don't think it puts any degree of <unk>.

Ward Nye: Pressure on that and again.

Ward Nye: We think we're gonna see degrees of mid years, even beyond what we've already built in to the guide right now.

Ward Nye: David, thank you for the question. I would say several things.

Speaker Change: I would say relative to the weather.

Ward Nye: No, to the last part of your question first, I don't think it puts a degree of too acute pressure on the And again, we think we're going to see degrees of mid-years even beyond what we were already built into the guide right now. But I would say relative to the weather, it was really more of a southwest issue than anything else because there was so much rain in Texas and it was so considerably different year over year.

Ward Nye: It was really more of a southwest issue than anything else because there was so much rain in Texas and it was so considerably different year over year, we did see degrees of deferrals in some places in Texas from January one to April one and that was part of the conversation that I was having a bit earlier.

Ward Nye: Relative to cement in particular, so I do think the weather in that unique circumstance played a bit of a role but again keep in mind a lot of the country was accustomed to seeing April one pricing. So this notion of pushing everything to January one was really something that we've introduced.

Ward Nye: We did see degrees of deferrals in some places in Texas from January 1 to April 1, and that was part of the conversation that I was having a bit earlier relative to cement in particular. So I do think the weather, in that unique circumstance, played a bit of a role. But again, keep in mind, a lot of countries are accustomed to seeing April 1 pricing. So this notion of pushing everything to January 1 was really something that we've introduced with our customer base here over the last, let's call it 18 months to 24 months anyway.

Ward Nye: With our customer base here over the last let's call. It 18 months to 24 months anyway.

Ward Nye: So I think if I'm looking at whether how it affected pricing I think that was it I think it was relatively discrete I don't think it puts any degree of undue pressure on what we'll see here in the second quarter or for the balance of the year and I do think it's one of the reasons again that we're gonna be at least looking at.

Ward Nye: So I think if I'm looking at weather, how it affects prices, I think that was it. I think it was relatively discreet. I don't think it puts any degree of undue pressure on what we'll see here in the second quarter or for the balance of the year. And I do think it's one of the reasons, again, that we're going to be at least looking at the prospect of some September price increases in cement because it was a little bit slower coming out of the gate in January. David, does that help?

Ward Nye: The prospect of some September price increases in cement because it was a little bit slower coming out of the gate in January David does that help.

David: Yes. It does thanks very much work you bet good to talk to you.

Ward Nye: Yeah.

Speaker Change: And your next question comes from.

Ward Nye: From the line of Timna Tanners from Wolfe Research Your line is open.

David: Yeah, Hey, good morning.

Ward Nye: Yeah, it does. Thanks very much, Ward. You bet. Good to talk to you.

Speaker Change: Hi, gentlemen.

Speaker Change: I wanted to ask about the data center commentary with regard to the 800000 tons is that normal for a data center is that that particular, Google One you mentioned and also how do we compare that with the footprint of <unk>.

Ward Nye: You bet! It's good to talk to you.

Operator: And your next question comes from the line of Timna Tanners from Wolf Research. Your line is open.

Operator: I wanted to ask about the data center commentary with regard to the 800,000 tons. Is that normal for a data center? Is that the particular Google one you mentioned?

Timna Beth Tanners: Warehouses I've heard some comparison there just wondering like size wise, how they compare against one another and and and I think there was an earlier question about.

Ward Nye: And also, how do we compare that with the footprint of a warehouse? Because I've heard some comparisons there. Just wondering, like size-wise, how they compare against one another.

Timna Beth Tanners: Maybe your caution there, but it is in your presentation is something youre more cautious and so I just want to make sure we understand that.

Speaker Change: Yeah. Good question Timna look at I don't I don't look at that and think of that as being anywhere outside of a normal fairway.

Ward Nye: And, you know, I think there was an earlier question about maybe your caution there, but it is in your presentation as something you're more cautious about. So I just want to make sure we understand that.

Ward Nye: What you would expect on that type of a large commercial project.

Ward Nye: That type of space.

Ward Nye: So do I think that's pretty consistent with degrees of other large warehousing, yeah. I think it probably is because if you think about attended several things are happening.

Ward Nye: Yeah, good question, Timna. Look, I don't look at that and think of that as being anywhere outside of a normal fairway for what you'd expect on that type of large commercial project in that type of space. So do I think that's pretty consistent with degrees of other large warehousing? Yeah, I think it probably is because if you think about it, Timna, several things are happening. One, they're doing the normal site work. It's going to take a good deal of bait.

Ward Nye: One they're doing the normal site work.

Ward Nye: It's going to take a good deal of base at some point theyre, putting up putting into floors that would typically be concrete.

Ward Nye: At some point to they're going to build the walls and keep in mind. This isn't typically an exercise in aesthetics in other words, it's not gonna be brick, it's not going to be other things that are that are painted for beauty in large measure, although I'm, not saying, there's not beauty and concrete walls.

Ward Nye: At some point, they're putting up, putting in the floors that would typically be concrete. At some point, too, they're going to build the walls. And keep in mind, this isn't typically an exercise in aesthetics. In other words, it's not going to be brick. It's not going to be other things that are painted to beauty in large measure, although I'm not saying there's not beauty in concrete walls. In large measure, these will be concrete tilt-up walls. And then the last piece of it; it goes back to some of the conversation I had earlier.

Ward Nye: In large measure that these will be concrete tilt up walls and then the last piece of it goes back to some of the conversation I had earlier oftentimes, you'll see T. P. O roofing on these and I referenced it relative to the question on a read through in Mag was there anything that could pull through I think this is an example of that so.

Ward Nye: No 800000 tons isn't unusual too I think it's about in the middle of the fairway three you know that that put the typical build looks like at one of these and as you know for us in many respects, it's all about location and what I was referencing there in particular, you know we're the largest underground miner in.

Ward Nye: Oftentimes, you'll see TPO roofing on these. And I referenced, relative to the question on a read-through in MAG, was there anything that could pull through? I think this is an example of that. So no, 800,000 tons isn't unusual. Two, I think it's about in the middle of the fairway. Three, that's what the typical build looks like at one of these.

Ward Nye: Aggregates in the United States and when we get in the central part of the United States in particular, we're able to use our underground mine locations to actually be closer to market centers than we would be able to if we were mining in open pit locations and what that means is you know this for sure.

Ward Nye: And as you know, for us, in many respects, it's all about location. And what I was referencing there, in particular, we're the largest underground miner of aggregates in the United States. And when we get in the central part of the United States, in particular, we're able to use our underground mine locations to actually be closer to market centers than we would be able to if we were mining an open pit location. And what that means is, you know, this facility that we're talking about is one that is literally, um..., almost above us. So from a proximity perspective, Timna, it actually works very well.

Ward Nye: They were talking about is one that is literally.

Ward Nye: Almost above us so so from a proximity perspective terminate actually works very well.

Timna: That's helpful color I like the BD and concrete thanks again.

Speaker Change: Well I appreciate that.

Ward Nye: Yeah.

Speaker Change: Alright, Thank you and that concludes our Q&A portion for today's call I would like to turn it back to <unk> for closing remarks.

Speaker Change: Thank you all for joining today's earnings conference call in summary, we believe our commitment to world class safety commercial and operational excellence and sustainable business practices position us to provide compelling results for the foreseeable future. Thanks to our best in class teams differentiated business model well defined strategic plan.

Ward Nye: That's a helpful color. I like the beauty in concrete. Thanks again. Well, I appreciate that, Timna.

Ward Nye: And unrivaled growth opportunities Martin Marietta is well positioned to continue driving sustainable growth and superior shareholder value as we build and maintain the world's safest best performing and most durable aggregates led public company. We look forward to sharing our second quarter 2024 results in the summer as always we're available for <unk>.

Operator: All right, thank you. And that concludes our Q&A portion for today's call. I would like to turn it back to Ward 9 for closing remarks. Thank you.

Ward Nye: Thank you all for joining today's earnings conference call. In summary, we believe our commitment to world-class safety, commercial and operational excellence, and sustainable business practices positions us to provide compelling results for the foreseeable future. Thanks to our best-in-class teams, differentiated business model, well-defined strategic plan, and unrivaled growth opportunities, Martin Marietta is well-positioned to continue driving sustainable growth and superior shareholder value as we build and maintain the world's safest, best-performing, and most durable aggregates-led public company. We look forward to sharing our second quarter 2024 results in the summer. As always, we are available for any follow-up questions. Thank you again for your time and continued support of Martin Marietta.

Ward Nye: Follow up questions. Thank you again for your time and continued support of Martin Marietta.

Speaker Change: Thank you presenters, ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.

Ward Nye: Yeah.

Ward Nye: [music].

Ward Nye: Yes.

Ward Nye: [music].

Ward Nye: Yeah.

Ward Nye: [music].

Operator: Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Operator: Okay.

Operator: [music].

Operator: Okay.

Operator: Yeah.

Operator: Yes.

Operator: Okay.

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