Q2 2024 Martin Marietta Materials Inc Earnings Call

August 8, 2024

Welcome to Martin Murrieta's 2nd Quarter 2024 Earnings Conference Call.

Speaker Change: All participants are now in a listen-only mode.

A question and answer session will follow the company's prepared remarks. As a reminder, today's call is being recorded and will be available for replay on the company's website.

Operator: This concludes today's conference call. All participants are now in a listen-only mode.

Operator: Now, I turn the call over to your host, Ms. Jacklyn Rooker, Martin Marietta's Director of Investor Relations. Jacqueline, you may begin.

I will now turn the call over to your host, Ms. Jacklyn Rooker, Martin Marietta's Director of Investor Relations. Jacklyn, you may begin.

Operator: A question-and-answer session will follow the company's prepared remarks. As a reminder, 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. Jacklyn Rooker, Martin Marietta's Director of Investor Relations. Jacqueline, you may begin.

Jacklyn Rooker: Good morning. It's my pleasure to welcome you to Martin Marietta's second quarter 2024 earnings. 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. Like other businesses, Martin Marietta is subject to risks and uncertainties that could cause actual results to differ materially. 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.

Jacklyn Rooker: Good morning. It's my pleasure to welcome you to Martin Marietta's second quarter 2024 earnings. With me today are Ward Nye, Chair 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.

Jacklyn Rooker: Good morning. It's my pleasure to welcome you to Martin Marietta's second quarter 2024 earnings call.

Speaker Change: With me today are Ward Nye, Chair and Chief Executive Officer, and Jim Nickolas, Executive Vice President and Chief Financial Officer.

Jacklyn Rooker: 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 Exchange Commission's website. We have made available, during this webcast and on the Investors section of our website, supplemental information that summarizes our financial results and trends.

Jacklyn Rooker: Please refer to the legal disclaimers contained in today's earnings release and other public filings, which are available both, We have made available, during this webcast and on the Investors section of our website, supplemental information that summarizes our financial results and trends. As a reminder, all financial and operating results discussed today are for continuing operations. Board and I will begin today's earnings call with a discussion of our second quarter operating performance and our Blue Water Industries acquisition. A question and answer session will follow. Thank you, Jack.

Speaker Change: 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

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

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.

Please refer to the legal disclaimers contained in today's earnings release and other public filings, which are available both

Jacklyn Rooker: our own and the securities exchange commission's website

Jacklyn Rooker: We have made available, during this webcast, and on the Investors section of our website, supplemental information that summarizes our financial results and trends.

Jacklyn Rooker: 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 and I will begin today's earnings call with a discussion of our second quarter operating performance and our Blue Water Industries acquisition, as well as our outlook for the remainder of 2024 based on current market trends. Jim Nickolas will then review our financial results and capital allocation.

Jacklyn Rooker: 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 GAP measure in the Appendix to the Supplemental Information, as well as our filings with the SEC, and are also available on our website.

Speaker Change: Board and I will begin today's earnings call with a discussion of our second quarter operating performance and our Blue Water Industries acquisition.

As well as our outlook for the remainder of 2024 in current market trends.

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

Jacklyn Rooker: after which or will provide closing comments

Jacklyn Rooker: A question and answer session will follow.

Jacklyn Rooker: After that, Ward will provide closing comments. 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. Thank you, Jack.

please limit your qna participation to one question

Ward Nye: Thank you, Jacklyn, and thank you all for joining this teleconference. As indicated in today's earnings release, several dynamics impacted our second quarter financial results and, particularly, product shipment. The most notable driver was an historic 119 percent increase in precipitation in Dallas-Fort Worth, our company's single largest and most profitable metropolitan marketplace, as well as disproportionate rain and flooding in parts of the Midwest. Additionally, the lag effect of restrictive monetary policy is pressuring interest rate-sensitive private construction demand more than previously anticipated.

Jacklyn Rooker: I will now turn the call over to Ward.

Speaker: As indicated in today's earnings release, several dynamics impacted our second quarter financial results, and particularly product shipment. The most notable driver was an historic 119 percent increase in precipitation in Dallas-Fort Worth, our company's single largest and most profitable metropolitan marketplace, as well as disproportionate rain and flooding in parts of the Midwest.

Speaker: Thank you, Jacklyn, and thank you all for joining this teleconference.

Speaker: As indicated in today's earnings release, several dynamics impacted our second quarter financial results and particularly product shipments.

Speaker: The most notable driver was an historic 119 percent increase in precipitation in Dallas-Fort Worth, our company's single largest and most profitable metropolitan marketplace, as well as disproportionate rain and flooding in parts of the Midwest.

Speaker: Secondarily, the lag effect of restrictive monetary policy is pressuring interest rate-sensitive private construction demand more than previously anticipated.

Ward Nye: And while our value over volume philosophy also contributed modestly to the shipment decline, the benefits of our commercial strategy are clearly evidenced by the second quarter's strong unit profitability growth and adjusted EBITDA margin expansion. Moving forward, our team remains focused on what we can control and views the demand impacts from weather and high interest rates as temporary. That said, we expect slower shipment trends to persist in the year's second half.

Speaker: And while our value over volume philosophy also contributed modestly to the shipment decline, the benefits of our commercial strategy are clearly evidenced by the strong unit profitability growth and adjusted EBITDA margin expansion. Moving forward, our team remains focused on what we can control and views the demand impacts from weather and high interest rates as temporary. That said, we expect slower shipment trends to persist in the year's second half. As a result, we revised our full year 2024 adjusted EBITDA guidance to $2.2 billion at the midpoint.

Speaker: Moving forward, our team remains focused on what we can control and view the demand impacts from weather and high interest rates as temporary.

Ward Nye: As a result, we revised our full year 2024 adjusted EBITDA guidance to $2.2 billion at the midpoint. While second quarter shipments were below our initial expectations, there were notable highlights worthy of mention as foundational for Martin Marietta's long-term success, starting first with safety.

Speaker: That said, we expect slower shipment trends to persist in the year's second half. As a result, we revised our full year 2024 adjusted EBITDA guidance to $2.2 billion at the midpoint.

Speaker: While second quarter shipments were below our initial expectations, there were notable highlights worthy of mention as foundational for Martin Marietta's long-term success.

Ward Nye: I'm proud to report that we concluded the first half of 2024 with the best safety instant rates in our company's history, inclusive of our newly acquired business. Operationally, we expanded our adjusted EBITDA margin and achieved record second-quarter organic and total aggregates gross profit despite significant weather headwinds. Importantly, aggregates pricing fundamentals remain attractive, with aggregates average selling price increasing 11.6% or 12% on an organic, mix-adjusted basis. We expect this commercial momentum and related margin expansion to continue following realization of our previously announced July Pricing Act.

Speaker Change: Starting first with safety.

Speaker Change: I'm proud to report that we concluded the first half of 2024 with the best safety instant rates in our company's history, inclusive of our newly acquired businesses.

Speaker: Operationally, we expanded our adjusted EBITDA margin and achieved record second quarter organic and total aggregates gross profit despite significant weather headwinds. Importantly, aggregates pricing fundamentals remain attractive, with aggregates average selling price increasing 11.6% or 12% on an organic mix-adjusted basis. We expect this commercial momentum and related margin expansion to continue following realization of our previously announced July Pricing Act. These accomplishments underscore the resiliency of our aggregates-led business, reinforced by our team's fidelity to maintaining a safe workplace and our unrelenting commitment to both commercial and operational excellence.

Speaker: Operationally, we expanded our adjusted EPDOM margin and achieved record second-quarter organic and total aggregates gross profit despite significant weather headwinds.

Speaker: Importantly, aggregates pricing fundamentals remain attractive, with aggregates average selling price increasing 11.6% or 12% on an organic, mix-adjusted basis.

Speaker: we expect this commercial momentum and related margin expansion to continue following realization of our previously announced july pricing actions

Ward Nye: These accomplishments underscore the resiliency of our aggregates-led business, reinforced by our team's fidelity to maintaining a safe workplace and our unrelenting commitment to both commercial and operational excellence. From a portfolio optimization standpoint, on April 5th, we completed the acquisition of 20 aggregates operations from Blue Water Industries and, in so doing, efficiently redeployed the cash proceeds from the South Texas cement and concrete divestiture. These high-quality, pure-play aggregates operations from Blue Water strategically complement our existing footprint in the southeastern United States and position us in attractive new markets, including Tennessee and South Florida, for future growth. I am pleased to report that the integration of both the Blue Water and Albert Frey & Sons acquisitions is complete.

Speaker: These accomplishments underscore the resiliency of our aggregates-led business, reinforced by our team's fidelity to maintaining a safe workplace and our unrelenting commitment to both commercial and operational excellence.

Speaker: From a portfolio optimization standpoint, on April 5th, we completed the acquisition of 20 aggregates operations from Blue Water Industries and, in so doing, efficiently redeployed the cash proceeds from the South Texas cement and concrete divestiture.

Speaker: These high-quality, pure-play aggregates operations from Blue Water strategically complement our existing footprint in the southeastern United States and position us in attractive new markets, including Tennessee and South Florida, for future growth.

Speaker: I'm pleased to report that the integration of both the Blue Water and Albert Frey & Sons acquisitions is complete. The combined financial performance has exceeded management's initial expectations, and the synergy realization will be increasingly compelling.

Ward Nye: The combined financial performance has exceeded management's initial expectations, and this synergy realization will be increasingly compelling. Moving forward, the M&A pipeline remains active and largely focused on pure play aggregates businesses in attractive SOAR-identified geographies. Shifting now to end market trends, our single most aggregates-intensive end use is infrastructure, which continues to benefit from increased funding and investment levels. While highway and street spending is expected to remain well above historic levels, leading indicators are predictably starting to lap more robust comparable periods.

Speaker: Moving forward, the M&A pipeline remains active and largely focused on pure play aggregates businesses in attractive SOAR-defined geographies. While highway and street spending is expected to remain well above historic levels, leading indicators are predictably starting to lap more robust comparable periods. This is evidenced in the value of state and local government highway, bridge, and tunnel contract awards for the 12-month period ending June 30, 2024, which declined modestly below 2023 levels to $114 billion.

Speaker: Moving forward, the M&A pipeline remains active and largely focused on pure-play aggregates businesses in attractive SOAR-identified geographies.

Speaker: shifting now to end market trends our single most aggregates intensive and use is infrastructure which continues to benefit from increased funding and investment levels

Speaker: While highway and street spending is expected to remain well above historic levels, leading indicators are predictably starting to lap more robust, comparable periods.

Ward Nye: This is evidenced in the value of state and local government highway, bridge, and tunnel contract awards for the 12-month period ending June 30, 2024, which declined modestly below 2023 levels to $114 billion. Funding certainty at the federal level through the Infrastructure Investment and Jobs Act, or IIJA, together with record state DOT budgets and constituent actions, support a healthy pricing environment for construction materials in 2025 and beyond. With the 2024 election process well underway, it's important to note rebuilding and enhancing our nation's infrastructure and manufacturing capabilities remain bipartisan national strategic priorities, as revealed by the high passage rates on local infrastructure ballot initiatives and three key legislative actions, the IIHA, the Inflation Reduction Act, and the CHIPS Act.

Speaker: this is evidence in the value of state and local government highway bridge and tunnel contract awardsfor the twelve month period ending junethirtieth two thousand and twenty four which declined modestly below two thousand and twenty three levels to one hundred and fourteen billion dollars

Speaker: Funding certainty at the federal level through the Infrastructure Investment and Jobs Act or IIJA together with record state DOT budgets and constituent actions support a healthy pricing environment for construction materials in 2025 and beyond.

Speaker: With the 2024 election process well underway, it's important to note rebuilding and enhancing our nation's infrastructure and manufacturing capabilities remain bipartisan national strategic priorities, as revealed by the high passage rates on local infrastructure ballot initiatives and three key legislative actions, the IJA, the Inflation Reduction Act, and the CHIPS Act. Moving now to heavy non-residential construction, reshoring activity for large manufacturing and energy projects continues to drive product demand. While not wholly offsetting, construction spending for domestic manufacturing continues to trend positively, with the June 2024 seasonally adjusted annual rate of spending at $236 billion, a 19% increase from the June 2023 value of $198 billion.

Speaker: With the 2024 election process well underway, it's important to note rebuilding and enhancing our nation's infrastructure and manufacturing capabilities remain bipartisan.

Speaker: National Strategic Priorities

Speaker: as revealed by the high passage rates.

Speaker: on local infrastructure ballot initiatives and three key legislative actions theija the inflation reduction act and the chipps act

Ward Nye: Moving now to heavy non-residential construction, reshoring activity for large manufacturing and energy projects continues to drive product demand. Aside from warehouse construction, which is contracting from its post-COVID peak, starts on a square footage basis remain well above what were healthy 2019 levels. While not wholly offsetting, construction spending for domestic manufacturing continues to trend positively, with the June 2024 seasonally adjusted annual rate of spending at $236 billion, a 19% increase from the June 2023 value of $198 billion.

Speaker: moving now to heavy nonresidential construction reuring activity for large manufacturing and energy projects continues to drive product demand

Speaker: Aside from warehouse construction, which is contracting from its post-COVID peak, starts on a square footage basis remain well above what were healthy 2019 levels.

Speaker: While not wholly off-setting...

Speaker: Construction spending for domestic manufacturing continues to trend positively with the June 2024 seasonally adjusted annual rate of spending

Speaker: at two hundred thirty six billion dollars a nineteen percent increase from the june two thousand and twenty three value of one hundred and ninety eight billion dollars importantly the breadth of resuring projects is' expanding from automotive batteries and semiconductors to pharmaceuts

Ward Nye: Importantly, the breadth of restoration projects is expanding from automotive batteries and semiconductors to pharmaceuticals. For example, Nova Nordisk is investing $4 billion to build a 1.4 million square foot manufacturing facility near Raleigh, North Carolina, which we're well positioned to supply from our nearby quarry.

Speaker: For example, Nova Nordisk is investing $4 billion to build a 1.4 million square foot manufacturing facility near Raleigh, North Carolina, which we're well positioned to supply from our nearby quarry. Beyond 2024, we expect generational highway and street investments as the nascent reshoring and artificial intelligence infrastructure build-out are very much expected to provide an extended multi-year construction cycle in these aggregates-intensive end markets. Similarly, when the affordability headwinds recede, we fully expect an accelerated housing construction recovery, specifically in single-family, which will be required to address the structural deficit of homes in many of Martin Marietta's key markets. I'll now turn the call over to Jim to discuss our second quarter financial results. Jim?

Ward Nye: In addition, while artificial intelligence is in its early stages, Martin Marietta is geographically well-positioned to capitalize on the related data center and infrastructure build-out led by big tech, including Amazon, which has announced plans to invest more than $100 billion over the next decade in data centers alone. Relative to light non-residential and residential activity, restrictive monetary policy continues to impact these interest rate-sensitive end markets. The lock-in effect of high mortgage rates and low inventory is only serving to exacerbate the well-chronicled housing affordability and availability issues in many of our company's key metropolitan areas.

Jim: In addition...

Jim: Well, artificial intelligence is in its early stages.

Speaker Change: Martin Marietta is geographically well-positioned to capitalize on the related data center and infrastructure build-out led by big tech Including Amazon who's announced plans to invest more than 100 billion dollars over the next decade on data centers alone

Jim: Relative to light non-residential and residential activity, restrictive monetary policy continues to impact these interest rate-sensitive end markets.

Speaker Change: The lock-in effect of high mortgage rates and low inventory are only serving to exacerbate the well-chronicled housing affordability and availability issues in many of our company's key metropolitan areas.

Ward Nye: That said, recent inflation and employment data should provide the foundation for accommodative Federal Reserve policy actions later this year and into 2025. I encourage you to read more on this, as discussed in the CEO Commentary and Market Perspective released earlier today. Beyond 2024, we expect that generational highway and street investments, as the nascent reshoring and artificial intelligence infrastructure build out, are very much expected to provide an extended multi-year construction cycle in these aggregates-intensive end markets.

Speaker: That said, recent inflation and employment data should provide the foundation for accommodative Federal Reserve policy actions later this year and into 2025.

Jim: I encourage you to read more on this as discussed in the CEO Commentary and Market Perspective released earlier today.

Speaker: Beyond 2024, we expect that generational highway and streets investments, as the nascent reshoring and artificial intelligence infrastructure build-out, are very much expected to provide an extended, multi-year construction cycle in these aggregates-intensive end markets.

Ward Nye: Equally, when the affordability headwinds recede, we fully expect an accelerated housing construction recovery, specifically in single-family homes, which will be required to address the structural deficit of homes in many of Martin Marietta's key markets. Importantly, as history informs us, growth in single-family construction bodes well for light, non-residential activity, which typically follows with a lag, but in this instance, a lag which we believe I'll now turn the call over to Jim to discuss our second quarter financial results.

Speaker: Equally, when the affordability headwinds recede, we fully expect an accelerated housing construction recovery, specifically in single-family, which will be required to address the structural deficit of homes in many of Martin Marietta's key markets.

Jim: Importantly, as history informs us, growth and single-family construction bodes well for light non-residential activity, which typically follows with a lag, but in this instance, a lag which we believe will be more abbreviated than previous cycles.

Jim: As Ward mentioned and shown in today's release, In the second quarter, the building materials business generated revenues of $1.7 billion. The decline in both metrics is attributable to the divestiture of our South Texas cement and related concrete businesses, as well as shipment declines experienced in the quarter, most notably due to wet weather, partially offset by contributions from the Albert Frey and Sons and Blue Water Acquisition. Excluding this purchase accounting impact, gross profit per ton increased 14%.

Jim: I'll now turn the call over to Jim to discuss our second quarter financial results. Jim? Thank you, Ward. And good morning, everyone.

Jim Nickolas: As Ward mentioned and shown in today's release, we revised our full-year 2024 adjusted EBITDA guidance to $2.2 billion at the midpoint, reflecting our first-half results and revised second-half shipments expectations. In the second quarter, the building materials business generated revenues of $1.7 billion, a decrease of 3%, and gross profit of $501 million, a decrease of 7%. The decline in both metrics is attributable to the divestiture of our south Texas cement and related concrete businesses, as well as shipment declines experienced in the quarter, most notably due to wet weather, partially offset by contributions from the Albert Frey and Sons and Blue Water Acquisition. The net positive impact of acquisitions and divestitures in the second quarter was $7 million of adjusted EBIT.

Jim: As Ward mentioned and shown in today's release, we revised our full-year 2024 adjusted EBITDA guidance to $2.2 billion at the midpoint, reflecting our first-half results and revised second-half shipments expectations.

Jim: In the second quarter, the building materials business generated revenues of $1.7 billion, a decrease of 3%, and gross profit of $501 million, a decrease of 7%.

Jim: The decline in both metrics is attributable to the divestiture of our South Texas cement and related concrete businesses, as well as shipment declines experienced in the quarter, most notably due to wet weather partially offset by contributions from the Albert Frey and Sons and Blue Water acquisitions.

Jim: The net positive impact of acquisitions and investitures in the second quarter was $7 million of adjusted EBITDA.

Jim Nickolas: Our Aggregates Private Line established second-quarter records for revenues and gross profit as contributions from acquired operations and strong pricing more than offset lower shipments. Aggregate's gross profit per ton improved 9% to a second-quarter record of $7.41. That number is inclusive of the $20 million, or $0.37 per ton, non-recurring, non-cash purchase accounting impact of the fair market value write-up of inventory related to the Blue Water acquisition, which was fully recognized in the second quarter. Excluding this purchase accounting impact, gross profit per ton increased 14%.

Speaker Change: Our Aggregates Priceline established second quarter records for revenues and gross profit as contributions from acquired operations and strong pricing more than offset lower shipments.

Jim: Aggregate's gross profit per ton improved 9% to a second quarter record of $7.41.

Jim: That number is inclusive of the $20 million, or $0.37 per ton, non-recurring, non-cash purchase accounting impact of the fair market value write-up of inventory related to the Blue Water acquisition, which was fully recognized in the second quarter.

Jim: Excluding this purchase accounting impact, gross profit per ton increased 14 percent.

Jim: These impressive results reveal and affirm how our disciplined commercial strategy and flexible cost structure yields higher profits despite lower volumes. Cement and concrete revenues decreased 37% to $261 million, and gross profit decreased 44% to $72 million, again, driven primarily by the divestiture of our South Texas cement plant and its related concrete operations. Notably, our Strategic Midlothian Cement Plant's daily shipping rates returned to near sold-out levels exiting the quarter. Remember, too, we expect our new finished mill to be operational in the third quarter, which has the capacity to add approximately 450,000 tons of incremental high-margin annual production capacity in the attractive North Texas market.

Jim: These impressive results reveal and affirm how our disciplined commercial strategy and flexible cost structure yields higher profits despite lower volumes.

Jim Nickolas: These impressive results reveal and affirm how our disciplined commercial strategy and flexible cost structure yields higher profits despite lower volumes. Cement and concrete revenues decreased 37% to $261 million, and gross profit decreased 44% to $72 million, again, driven primarily by the divestiture of our South Texas cement plant and its related concrete operations, and secondarily, by significantly wet April, May, and early June weather in Dallas-Fort Worth.

Jim: Cement and concrete revenues decreased 37% to $261 million, and gross profit decreased 44% to $72 million, again driven primarily by the divestiture of our South Texas cement plant and its related concrete operations.

Speaker Change: and secondarily by significant web april may an early june weather in dallaas sportworth

Jim Nickolas: Notably, our Strategic Mid-Lothian Cement Plant's daily shipping rates returned to near sold-out levels exiting the quarter. Remember, too, we expect our new finished mill to be operational in the third quarter, which has the capacity to add approximately 450,000 tons of incremental high-margin annual production capacity in the attractive North Texas market. Our asphalt and paving revenues and gross profit increased modestly to $245 million and $37 million, respectively, both second quarter records, in large measure due to pricing improvements and energy cost tailwinds. Magnesia Specialties revenues of $81 million were in line with the prior year quarter, while gross profit decreased 2%.

Jim: Notably, our Strategic Midlothian Cement Plant's daily shipping rates returned to near sold-out levels exiting the quarter.

Jim: remember two we expect our new finish me to be operational in the third quarter which has the capacity to add approximately four hundred fifty thousand tons of aninchmentinal high-margin annual production capacity in attractive north texas market

Speaker Change: our asb ping revenues and grossprofit increased modly two hundred forty-five million dollars and thirty-seven miondollars respectively both second quarter records in large measure due to pricing improvements and energy cost tailwinds

Jim: Magnesia Specialty's revenues of $81 million were in line with the prior year quarter, while gross profit decreased 2%, providing balance sheet strength and ample flexibility to actively pursue our M&A pipeline, reinvest in our business, and extend our long-term track record of returning capital to Martin Marietta shareholders.

Jim: Magnesia Specialties revenues of $81 million were in line with the prior year quarter while gross profit decreased 2% to $27 million.

Jim Nickolas: $27 million. Strong pricing, improved maintenance cost management, and energy cost tailwinds helped counterbalance lower chemical and lime shipments. SOAR has long provided the framework we use to grow our business and deploy capital for long-term success. During the first half of this year, we deployed over $2.5 billion on pure play aggregates acquisitions, invested $339 million of capital into our business, and returned $542 million to shareholders through dividend payments and share repurchases. In the second quarter alone, we repurchased 530,000 shares at an average price of $566 per share.

Jim: Strong pricing, improved maintenance cost management, and energy cost tailwinds helped counterbalance lower chemical and lime shipments.

Jim: SOAR has long provided the framework we use to grow our business and deploy capital for long-term success.

Jim: During the first half of this year, we deployed over $2.5 billion on pure play aggregates acquisitions.

Jim: Invested $339 million of capital into our business and returned $542 million to shareholders through dividend payments and share repurchases.

Jim: In the second quarter alone, we repurchased 530,000 shares at an average price of $566 per share.

Jim Nickolas: Since our repurchase authorization was announced in February 2015, we have returned a total of $3.2 billion to shareholders through both dividends and share repurchase. Our net debt to EBITDA ratio was 2x as of June 30th, at the low end of our targeted range of 2x to 2.5x, providing balance sheet strength and ample flexibility to actively pursue our M&A pipeline, reinvest in our business, and extend our long-term track record of returning capital to Martin Marietta shareholders. All while preserving financial flexibility and our investment grade credit rating profile. With that, I will turn the call back over to Ward. Thanks, Jim.

Jim: Since our repurchase authorization announced in February 2015, we have returned a total of $3.2 billion to shareholders through both dividends and share repurchases.

Jim: Our net debt to EBITDA ratio was two times as of June 30th, at the low end of our targeted range of 2 to 2.5 times.

Jim: providing balance sheet strengths and ample flexibility to activeately pursue our eate pipeline revestit business and extend our long track record of returning capital to minary to shareholders all while preserving financial leibility and our investment grade credit rating profile

Speaker Change: with that i was for the call back over to ward thanks jim

Ward Nye: In 2024, Martin Marietta is proudly celebrating its 30th year as a publicly traded company. Our three decades of success have been the result of an unwavering commitment to safety and the disciplined execution of our proven strategy. As we plan for the next 30 years, we're confident Martin Marietta is well-positioned to continue leading our industry's evolution while at the same time navigating through inevitable macroeconomic cycles and driving sustainable, attractive growth. We remain committed to building and maintaining the safest, best-performing, and most durable aggregates-led business and look forward to delivering superior shareholder value for our stakeholders for years and decades. If the operator will now provide the required instructions, we'll turn our attention to addressing your question.

Jim: In 2024, Martin Marietta is proudly celebrating our 30th year as a publicly traded company.

Jim: Our three decades of success has been the result of an unwavering commitment to safety and the disciplined execution of our proven strategy.

Jim: As we plan for the next 30 years, we're confident Martin Marietta is well-positioned to continue leading our industry's evolution, while at the same time, navigating through inevitable macroeconomic cycles and driving sustainable, attractive growth.

Jim: we remain committed to building and maintaining the safest best performing and most durable aggregate led business and look forward to delivering superior shareholder value for our stakeholders for years and decades to come

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

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by number two. If you are using a speakerphone, please leave the handset before pressing any key.

Speaker Change: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by number one on your touchtone phone. You will hear a prompt that your hand has been raised.

Speaker Change: Should you wish to decline from the polling process, please press star followed by number two. If you are using a speakerphone, please leave the handset before pressing any keys.

Operator: One moment, please, for your first question. Your first question comes from the line of Kathryn Thompson from Thompson Research Group. Your line is now open. Please ask your question.

Speaker Change: One moment, please, for your first question.

Speaker Change: Your first question comes from the line of Kathryn Thompson from Thompson Research Group. Your line is now open. Please ask your question.

Ward Nye: Hi. Thank you for taking my questions today. The first is focused on Q2 and just better understanding the impact of, you know, how much of it was market, maybe more color on the volume over volume impacting the quarter. And then, part and parcel with that, how should we think about the balance of Q3 and Q4 in terms of how profitability should flow through, given some of the obvious weather currents that you and your peers have been facing. Thank you.

Questioner: Hi. Thank you for taking my questions today. The first is focused on Q2 and just better understanding the impact of, you know, how much of it was market, maybe more color on the volume over volume impacting the quarter. And then, part and parcel with that, how should we think about the balance of Q3 and Q4 in terms of how profitability should flow through, given some of the obvious weather conditions that you and your peers have been facing. Thank you.

Questioner: be

Questioner: and

Questioner: Hi, thank you for taking my questions today. The first is focused on Q2 and just better understanding the impact of, you know, how much of it was market, maybe more color on the volume over volume and patching the quarter.

Questioner: in then partner parcel with that how should we think about the balance of q three and q four in terms of how profitability should flow through given some of the obvious weather con cept you and your peers have been facing thank you

Ward Nye: Good morning, Kathryn. Thank you for the question. So, look, weather was a big deal, and Q2, there's no doubt about that. So, I said in my prepared remarks that it was 119 percent wetter in DFW this year than it was last year. And the fact is, if you look at what happened in North Texas all by itself, but then you couple that with what happened in the Central Division, and what I'll guess is most people don't think about the Central Division as being impactful to us as it is.

Speaker Change: Good morning, Kathryn. Thank you for the question.

Speaker Change: Look, weather was a big deal, and then in Q2, there's no doubt about it. So I said in the prepared remarks that it was 119% wetter in DFW this year than it was last year. And the fact is, if you look at what happened in North Texas all by itself, but then you couple that with what happened in the Central Division.

Ward Nye: Really, if we're looking at Dallas itself and the Central Division together, those two areas of business typically represent nearly 40 percent of our Q2 shipments. So, if we're looking at significant rain in Dallas and significant rain and flooding in the Midwest... That was really a serious body blow to the business, and what I liked about that is it took that blow and came in with record aggregate profitability, record unit profitability, and did all of that taking on the $20 million of inventory fair markup that we totally absorbed in Q2. So seeing what happened in Dallas was important. Understanding what happened in the Midwest was important.

Speaker Change: And what I'll suppose is most people don't think about the Central Division as being impactful to us as it is. Really, if we're looking at Dallas itself and the Central Division together, those two areas of business typically represent nearly 40% of our Q2 shipments.

Speaker: So, if we're looking at significant rain in Dallas and significant rain and flooding in the Midwest... That was really a serious body blow to the business, and what I liked about that is it took that blow and came in with record aggregate profitability, record unit profitability, and did all of that taking on the $20 million of inventory fair markup that we totally absorbed in Q2. So seeing what happened in Dallas was important. Understanding what happened in the Midwest was important. But I was also taken with the resilience of our cement business in North Texas. Again, we've long defined what equals strategic cement for us.

Speaker: So if we're looking at significant rain in Dallas and significant rain and flooding in the Midwest

Speaker: that was really a serious body blow to the business

Speaker: And what I liked about that is it took that blow and came in with record aggregates profitability, record unit profitability.

Speaker: And did all of that taking on the $20 million of inventory fair markup that we've totally absorbed in Q2.

Speaker Change: seem what happened in dallas was important to understand what happened in the midwest was important

Ward Nye: But I was also taken with the resiliency of our cement business in North Texas. Again, we've long defined what equals strategic cement for us. And clearly, what we have in that market is just that. I mean, we saw organic shipment volumes down about 18 percent, and again, that was all driven by rain, but prices up nearly 10, and with very, very good performance. And, as Jim indicated in his comments, we were seeing that the marketplace turn to near-sold-out levels as soon as the rain abated.

Speaker: But I was also taken with the resiliency of our cement business in North Texas. Again, we've long defined what equals strategic cement for us.

Speaker: And clearly, what we have in that market is just that. I mean, we saw organic shipment volumes down about 18 percent, and again, that was all driven by rain, but prices up nearly 10, and with very, very good performance. And as Jim indicated in his comments, we were seeing that marketplace turn to near-sold-out levels as soon as the rain abated. So those were issues, I think 50 percent, at least, of what we saw in the quarter was attributable to rain. Do I think a portion of it was attributable to the economy? Yeah, probably 25 percent of it. So what am I seeing there? It's really what we indicated.

Speaker: And clearly, what we have in that market is just that. I mean, we saw organic shipment volumes down about 18%.

Speaker: And again, that was all driven by rain.

Speaker: but pricing up nearly 10 and with very, very good performance.

Speaker: And as Jim indicated in his comments, we were seeing that marketplace turn to near sold-out levels as soon as the rain abated. So those were issues, I think, 50 percent at least of what we saw in the quarter was attributable to rain.

Ward Nye: So those were issues, I think 50 percent, at least of what we saw in the quarter was attributable to rain. Do I think a portion of it was attributable to the economy? Yeah, probably 25 percent of it. So what am I saying there? It's really what we indicated. Private construction, because of what's happening with interest rates, is seeing degrees of modest pullback.

Speaker: Do I think a portion of it was attributable to the economy? Yeah, probably 25% of it. So what am I saying there? It's really what we indicated.

Speaker Change: private construction because of what's happening with interest rates

Jim Nickolas: But the important thing to remember there, Kathryn, is we don't see markets that are overbuilt today in Martin Marietta's marketplaces. So we feel like that's going to be fleeting. But equally, value over volume costs us some tonnage during the quarter. But the fact is, we're perfectly okay with that. Again, we monitor that, we're going to be thoughtful around it, but again, we're seeing continued expanded adjusted EBITDA margins in what we're doing.

Speaker Change: our sameing degrees of modest pullback but the important thing to remember their catherineis we don't see markets that are overbuilt today in martinmaryian a marketplaceplaces so we feel like that's going to be fleeing but equally value overvolume

Speaker Change: Cost us some tonnage during the quarter.

Speaker Change: But the fact is...

Speaker Change: We're perfectly okay with that.

Speaker Change: Again, we monitor that. We're going to be thoughtful around it.

Speaker: but again we're seeing continued expanded adjusted ebitda margins in what we're doing we feel like the breakdown we've had between whether at fifty percent market at twenty five percent and value of revolume about twenty five percent makes sense

Jim Nickolas: We feel like the breakdown we've had between weather at 50%, market at 25%, and value over volume at about 25% makes sense. But the other part of your question went to the cadence of how we think about the quarters. Let me turn that over to Jim to talk you through that a bit, because that is going to change a lot.

Speaker: But the other part of your question went to the cadence of how we think about the quarters. Let me turn that over to Jim to talk you through that a bit, because that is going to change modestly.

Jim Nickolas: Yes, last year, Kathryn, in the second half of the year, about 60% of consolidated EBITDA came through in Q3 and 40% came through in Q4. Because of what we're seeing this year with weather, et cetera, in July and even August, the split is probably closer to 55% in Q3, 45% in Q4. So a little bit more Q4 weighted this year than normal.

Speaker Change: yes last year ktherine second half of the year about sixty percent of consolidated ebitda came through in q three and forty percent came through in q four

Jim: Because of what we're seeing this year with weather, etc., in July and even August , the split is probably closer to 55% Q3, 45% in Q4, so a little bit more Q4 weighted this year than normal.

Questioner: Okay, perfect. And just one follow-up, if I may, just on the outlook when you look at backlogs or jobs in the queue, what are you seeing in terms of project type, and how do you know how pricing on these types of projects, which obviously play into margins?

Ward Nye: Okay, perfect. And just one follow-up, if I may, just on the outlook when you look at backlogs or jobs in the queue, what are you seeing in terms of project type, and how do you know how pricing on these types of projects, which obviously play into margins?

Speaker Change: Okay, perfect. And just one follow-up, if I may, just on the outlook when you look at backlogs or jobs in the queue.

Speaker Change: what are you seeing in terms of project types

Speaker Change: And how are, you know, how is pricing on these type of projects, which obviously play into margins? Thanks very much.

Speaker: Thanks very much.

Ward Nye: Thanks very much.

Ward Nye: Thank you, Kathryn. Well, look, if we're looking at customer backlogs, they're up sequentially, so they continue to build. Number one, I think that's important. Number two, if we're looking at the nature of the projects, look, infrastructure is going to be a good end use for several years, and we see that continuing. If we're looking at non-res, we're seeing degrees of shifts there. And by the way, that's not a surprise to us.

Speaker Change: Thank you, Kathryn. Well, look, if we're looking at customer backlogs, they're up sequentially, so they continue to build. Number one, I think that's important.

Speaker Change: Number two, if we're looking at the nature of the projects, infrastructure is going to be a good end-use for several years, and we see that continuing.

Operator: As a reminder, today's call is being recorded and will be available for replay on the company's website.

Speaker Change: If we're looking at non-res, we're seeing degrees of shifts there, and by the way, that's not a surprise to us. So are we seeing more factories? The answer is yes. Are we seeing good pricing that goes with that? The answer is yes.

Jacklyn Rooker: I will now turn the call over to your host, Ms. Jacqueline Rooker, Martin Marietta's Director of Investor Relations Jacqueline, you may begin Thank you. Good morning. It's my pleasure to welcome you to Martin Marietta's second quarter 2024 earnings call. With me today are Ward Nye, Chair 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 Security's laws in connection with future events, future operating results, or financial performance.

Ward Nye: So are we seeing more factories? The answer is yes. But are we seeing good prices that go with that?

Ward Nye: The answer is yes. But are we seeing good steady work and growing work, frankly, relative to energy?

Speaker Change: Are we seeing good, steady work and growing work, frankly, relative to energy? The answer is yes.

Ward Nye: Are we seeing growing work relative to data centers? For all the reasons that I indicated in the prepared remarks and in the commentary that we published today, that continues to grow. Obviously, warehousing is not. That's not a surprise to anyone.

Speaker Change: Are we seeing growing work relative to data centers?

Speaker Change: for all the reasons that i indicated in the prepared remarks and in the commentary that we published today that continues to grow obviously warehousing is not that's not a surprisise anyone in what we're see is suyou almost have two lanes of travelling

Ward Nye: And what we're seeing is you almost have two lanes of travel. You have data centers in one lane, and they're going in a positive direction. And warehousing is going in the other direction, and you're seeing those percentages almost pass each other on a precise precision or percentage basis today. So that's the type of work that we're seeing. The other thing that we're beginning to see, and this is more in Georgia. It's in North Carolina.

Speaker Change: You have data centers in one lane and they're going in a positive direction and warehousing is going in the other and you're seeing those percentages almost pass each other on a precise precision or percentage basis today.

Jacklyn Rooker: Like other businesses, Martin Marietta is subject to risks and uncertainties that could cause actual results to differ materially. 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. Please refer to the legal disclaimers contained in today's earnings release and other public filings, which are available both our own and the Securities Exchange Commission's websites. We have made available during this webcast and on the investor's section of our website, supplemental information that summarizes our financial results and trends.

Ward Nye: It's in South Carolina. We're seeing green shoots and degrees of single-family housing. And again, that's not a big surprise, simply because of population dynamics. And again, relative to housing, we're such a small portion of the overall housing that, traditionally, in single-family housing, back to the essence of your question, that tends to be very attractively priced materials, Kathryn, so I hope that's helpful. Yes, thanks so much, and best of luck.

Speaker Change: So, that's the type of work that we're seeing. The other thing that we're beginning to see, and this is more in Georgia. It's in North Carolina. It's in South Carolina. We're seeing green shoots in degrees of single-family housing right now.

Speaker Change: And again, that's not a big surprise, simply because of the population dynamics.

Speaker: And again, relative to housing, we're such a small portion of the overall housing that traditionally in single family housing, back to the essence of your question, that tends to be very attractive priced materials, Kathryn, so I hope that's helpful.

Operator: Yeah, thanks so much and best of luck. The Bulletproof Executive, 2013

Operator: Yeah, thanks so much and best of luck. Thank you. Your next question comes from the line of Stanley Elliott of.

Jacklyn Rooker: As a reminder, all financial and operating results discussed today are for continuing operations. In addition, non-gap measures are defined and reconciled to the most directly comparable gap 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 will begin today's earnings call with the discussion of our second quarter operating performance and our blue water industry's acquisition, as well as our outlook for the remainder of 2024 in current market trends. Jim Nicholas will then review our financial results and capital allocation, after which Ward will provide closing comments. A question and answer session will follow. Please limit your Q&A participation to one question.

Operator: Yes, thanks so much and best of luck.

Speaker Change: Thank you.

Operator: Your next question comes from the line of Stanley Elliott of STICO. If your line is now open, please ask your question. Hey, good morning, everyone. Nice work despite this difficult environment.

Speaker Change: Your next question comes from the line of Stanley Elliott of STICO. Your line is now open. Please ask your question.

Speaker Change: Hey, good morning everyone. Nice work despite this difficult environment.

Operator: Ward, could you maybe walk us through kind of the revised guide, some of the puts and takes and see maybe what will get us to the high end versus the low end, just as we're sitting here today, kind of halfway through the year?

Operator: You bet. I'm happy to.

Ward Nye: And Stanley, thank you for your comments. We appreciate them. I'm with you.

Speaker Change: You bet. Happy to. And Stanley, thank you for your comments. We appreciate it. I'm with you. I think that was actually very good performance given what our team managed through.

Ward Nye: I think that was actually a very good performance given what our team managed through. So, several things. Look, let's start with pricing. So, as you've seen, we've reaffirmed our pricing guide of 11%, 13% up. And that includes the previously announced mid-years for California for the fry business and for blue water locations, as well as targeted product and market-specific mid-years in other geographies. And by the way, that's pretty typical for us.

Speaker Change: So, several things. Let's start with pricing.

Speaker Change: As you've seen, we've reaffirmed our pricing guide of 11% to 13% up.

Ward Nye: I will now turn the call over to Ward. Thank you, Jacqueline, and thank you all for joining this teleconference. As indicated in today's earnings release, several dynamics impacted our second quarter financial results and particularly product shipments.

Speaker Change: And that includes the previously announced mid-years for California for the fry business for blue water locations as well as the targeted product and market-specific mid-years in other geographies. And by the way, that's pretty typical for us.

Ward Nye: The one thing that I think is going to be important this year relative to the mid-years is that so much volume that had already been bid at the January 1 pricing is still yet to go because of the deferral that we've seen. So typically, in a year, I've always told you historically, look, you could probably see about a quarter of the mid-years really show up in any given year in which they're put. I think the mid-years are going to be notably more impactful in 2025.

Speaker: The one thing that I think is going to be important this year relative to the mid-years is that so much volume that had already been bid at the January 1 pricing is still yet to go because of the deferral that we've seen. So typically, in a year, I've always told you historically, look, you could probably see about a quarter of the mid-years really show up in any given year in which they're used. I think the mid-years are going to be notably more impactful in 2025.

Speaker: the one thing that i think 's going to be important this year relative to the mid years

Ward Nye: The most notable driver was on historic 119% increase in precipitation and Dallas Fort Worth, our company's single largest and most profitable metropolitan marketplace, as well as disproportionate rain and flooding in parts of the Midwest. Secondarily, the lag effect of restrictive monetary policy is pressuring interest rates sensitive private construction demand, more than previously anticipated. And while our value of revolving philosophy also contributed modestly to the shipment client, the benefits of our commercial strategy are clearly evidenced by the second quarter strong unit profitability growth and adjusted E-Pdom margin expansion.

Speaker: So much volume that had already been bid at the January 1 pricing is still yet to go because of the deferral that we've seen.

Speaker: So, typically in a year, I've always told you historically, look, you could probably see about a quarter of the mid-years really show up in any given year in which they're put in.

Speaker: I think the mid-years are going to be notably more impactful in 25, in other words...

Speaker: In other words, when we come back to you in January and talk about our guide for next year, I think you're going to see more mid-years affecting that this year than not. So that's how we think about the ASP and the guide. Relative to volumes... Clearly, that reflects an impacted first half result and early weather here in the second half of the year. Look, July was wet, and we're sitting here today as Tropical Storm Debbie is going through the Carolinas, so we're living that.

Ward Nye: In other words, when we come back to you in January and talk about our guide for next year, I think you're going to see more mid-years affecting that this year than not. So that's how we think about the ASP and the guide. Clearly, that reflects an impacted first-half result and early weather here in the second half of the year. Look, July was wet, and we're sitting here today as Tropical Storm Debbie is going through the Carolinas, so we're experiencing that.

Speaker: When we come back to you in January and talk about our guide for next year, I think you're going to see more mid-years affecting that this year than not. So that's how we're thinking about the ASP and the guide. Relative to volumes...

Ward Nye: Moving forward, our team remains focused on what we can control and view the demand impact from weather and high interest rates as temporary That said, we expect slower ship and trends to persist in the year second half As a result, we revised our full year 2024 adjusted EBITDA guidance to $2.2 billion at the midpoint While second quarter shipments were below our initial expectations, there were notable highlights worthy of mentioning the foundation as foundational from Martin Marietta's long-term success, starting first with safety. I'm proud to report that we concluded the first half of 2024 with the best safety instant rates in our company's history inclusive of our newly acquired businesses.

Speaker: Clearly, that reflects an impacted first-half result, and early weather here in the second half of the year. Look, July was wet, and we're sitting here today as Tropical Storm Debbie is going through the Carolinas, so we're living that.

Ward Nye: And so we're trying to take our experience with those events and really build that into the volume guide for the second half of the year. So we feel confident that we've hit that with as much clarity as we can given these circumstances. Look, relative to what will be expected as lower shipment levels, our teams are going to be focused, as you would imagine us to, very much on cost control and making sure we're flexing our costs with demand.

Speaker: And so we're trying to take our experience with those events and really build that into the volume guide for the second half of the year. So we feel confident that we've hit that with as much clarity as we can given these circumstances. Look, relative to what will be expected as lower shipment levels, our teams are going to be focused, as you would imagine us to, very much on cost control and making sure we're flexing our costs with demand.

Speaker: and so we're trying to take our experience with those events and really build that into the volume guide for the second half of the year so we feel confident that we've we've hit that with as much clarity as we can given these circumstances.

Speaker: Look, relative to what will be expected as lower shipment levels, our teams are going to be focused, as you would imagine us to.

Speaker: very much on cost control and making sure we're flexing our costs

Ward Nye: So we're very focused on that. The other thing that I think you'll see is, given the inventory bills that we had with wet weather, where we're producing but not selling, you know what, there's going to be a little bit of inventory drawdown, and that's going to impact us a bit in half, too, and it can provide a modest headwind to EBITDA, but, again, we've taken that into account in what we've put out there for you.

Ward Nye: Operationally, we expanded our adjusted EBITDA margin and achieved record second quarter organic and total aggregates gross profit despite significant weather headwinds. Importantly, aggregates pricing fundamentals remain attractive with aggregates average selling price increasing 11.6% or 12% on an organic mix-adjusted basis. We expect this commercial momentum and related margin expansion to continue following realization of our previously announced July pricing actions. These accomplishments underscore the resiliency of our aggregates led business reinforced by our team's fidelity to maintaining a safe workplace in our unrelenting commitment to both commercial and operation excellence.

Speaker: So we're very focused on that. The other thing that I think you'll see is, given the inventory bills that we had with wet weather, where we're producing but not selling, you know what? There's going to be a little bit of inventory drawdown, and that's going to impact us a bit in half, too, and it can provide a modest headwind to EBITDA, but, again, we've taken that into account in what we've put out One thing to keep in mind, too, as we're looking at the EBITDA guide... And I think this is something that's easy to forget. We grew Ividyne 2023 by 33%.

Speaker: With demand so we're very focused on that The other thing that I think you'll see is given the inventory bills that we had with wet weather where we're producing But not selling

Speaker: You know what, there's going to be a little bit of inventory drawdown, and that's going to impact us a bit and have to, and it can provide a modest headwind to EBITDA, but again, we've taken that into account in what we've put out there for you. You know, one thing to keep in mind, too, as we're looking at the EBITDA guide,

Ward Nye: One thing to keep in mind, too, as we're looking at the EBITDA guide... And I think this is something that's easy to forget. We grew Ividyne 2023 by 33%. I mean, that's a really big number, and it gives you a difficult year to compare, but at the same time, we're seeing EBITDA margin grow, and even at the guide, we're looking at a two-year CAGR of the high teens. I mean, getting close to 17, getting close to 20%.

Speaker: And I think this is something that's easy to forget. We grew Ividyne 2023.

Speaker: by 33%.

Speaker Change: I mean, that's a really big number.

Speaker: and it gives you a difficult year compared but at the same time we're seeing EBITDA margin grow.

Speaker: And even at the guide, we're looking at a two-year CAGR of high teens, I mean, getting close to 17, getting close to 20%.

Ward Nye: From a portfolio optimization standpoint, on April 5, we completed the acquisition of 20 aggregates operations from Bluewater Industries and, in so doing, efficiently redeploy the cash proceeds from the South Texas summit and concrete divestiture. These high-quality, pure-play aggregates operations from Bluewater strategically complement our existing footprint in the southeastern United States and position us in attractive new markets including Tennessee and South Florida for future growth. I'm pleased to report that the integration above the Bluewater and Albert Fry and Suns acquisitions is complete. The combined financial performance has exceeded management's initial expectations and the synergy realization will be increasingly compelling.

Ward Nye: So again, numbers that we're very proud of, numbers that we feel good about as we go into the second half of the year, and again, a foundation, particularly relative to pricing, that we think puts us in a very attractive place as we start increasingly thinking about 2025, Stanley.

Speaker: So, again, numbers that we're very proud of, numbers that we feel good about as we're going into the second half of the year, and, again, a foundation particularly relative to pricing that we think puts us in a very attractive place as we start increasingly thinking about 2025, Stanley.

Speaker: Perfect Ward, thanks so much for the color and best of luck in the back half of the year. Thanks Stanley.

Operator: Your next question comes from the line of Trey Grooms of Defense. If your line is not open, please ask your question.

Speaker Change: Your next question comes from the line of Trey Grooms of Defense. If your line is not open, please ask your question.

Operator: Hey, good morning, everyone. And I'll echo Stanley's comment about good work in a tough environment.

Speaker: Hey, good morning everyone, and I'll echo Stanley's comment about good work in a tough environment. Thank you, Trey, very much.

Ward Nye: Thank you, Trey, very much.

Speaker: Thank you, Trey, very much.

Ward Nye: Moving forward, the M&A pipeline remains active and largely focused on pure-play aggregates businesses and attractive sore identified geographies. Shifting now to end market trends, our single most aggregates intensive end use is infrastructure which continues to benefit from increased funding and investment levels. While highway and street spending is expected to remain well above historic levels, leading indicators are predictably starting to lap more robust comparable periods. This is evidence that the value of state and local government highway, bridge and tunnel contract awards for the 12-month period ending June 30, 2024, which declined modestly below 2023 levels to $114 billion. Funding certainty at the federal level through the Infrastructure Investment and Jobs Act or IIA. Together with record-state DOT budgets and constituent actions support a healthy pricing environment for construction materials in 2025 and beyond.

Ward Nye: So I guess I've got really, the main one I wanted to talk about was kind of, you know, you've seen some slowing, or maybe a little bit of deceleration, you mentioned, on the activity front, in addition to weather, you know, there was some of that. And you've broken out in the past, you know, I think as recently as the last call, infrastructure and kind of your expectation for the year were kind of mid to high single improvement.

Trey Grooms: So I guess I've got really, the main one I wanted to talk about was kind of, you know, you've seen some slowing, or maybe a little bit of deceleration, you mentioned, on the activity front, in addition to weather, you know, there was some of that. And you've broken out in the past, you know, I think as recently as the last call, infrastructure and kind of your expectation for the year were kind of mid to high single improvement.

Trey Grooms: so i guess i've got really

Trey Grooms: The main one I wanted to talk about was kind of, you know, you've seen some slowing or maybe a little bit of deceleration, you mentioned, you know, on the kind of on the activity front. In addition to weather, you know, there was some of that. And you've broken out in the past.

Trey Grooms: You know, I think as recently as the last call, infrastructure and kind of your expectation for the year, I think what's kind of mid to high single improvement res was

Ward Nye: Res was, I think, down low singles and non-res low singles to mid single down. So, if we kind of look at your new view of the world and in light of kind of what we've seen with some of the activity out there, Is there any way you can kind of help us kind of bridge back these these kind of expectations for these in markets relative to kind of what you were looking for?

Trey Grooms: Res was, I think, down low singles and non-res low singles to mid single down. So, if we kind of look at your new view of the world and in light of kind of what we've seen with some of the activity out there, Is there any way you can kind of help us kind of bridge back these these kind of expectations for these in markets relative to kind of what you were looking for?

Trey Grooms: I think down low singles and non-res low singles to mid single down. If we kind of look at your new view of the world and in light of kind of what we've seen with

Trey Grooms: Some of the activity out there. Is there any way you can kind of help us kind of bridge back these these kind of expectations for these in markets relative to kind of what you were looking for?

Speaker: Sure. Happy to too, Trey.

Ward Nye: Sure. Happy to too, Trey.

Ward Nye: And look, that's a great question. So if we think through it, I'll actually work from the bottom up. So we were previously in recession. We were saying, look, inflation was going to be down low single digits to mid single digits. So now as we see it, look, we think it's going to be at mid. So we've gone to the lower end of the original guide, if you understand what I mean, relative to res.

Speaker: And look, that's a great question. So if we think through it, I'll actually work from the bottom up. So we were previously in res. We were saying, look, res was going to be down low single digits to mid single digits. So now as we see it, look, we think it's going to be at mid.

Speaker: Sure, happy to, Trey. That's a great question. So if we think through it, I'll actually work from the bottom up.

Ward Nye: With the 2024 election process, well underway, it's important to note rebuilding and enhancing our nation's infrastructure and manufacturing capabilities remained bipartisan, national strategic priorities, is revealed by the high passage rates on local infrastructure ballot initiatives and three key legislative actions, the IHA, the Inflation Reduction Act, and the Chips Act. Moving now to having non-residential construction, resuring activity for large manufacturing and energy projects continues to drive product demand. Aside from warehouse construction, which is contracting from its post-COVID peak, starts on a square footage basis remain well above what were healthy in 2019 levels.

Speaker: So, we were previously in res, we were saying, look, res was going to be down low single digits to mid-single digits, so now as we see it...

Speaker: So we've gone to the lower end of the original guide, if you see what I mean, relative to res. If we're looking at non-res, we had previously said, look, that's going to be down mid single digits to high. So we've really taken the same view on that as we have relative to res. We said that it's going to be down in the high single digits, not because we think heavy is not going to be good. I think Heavy is going to be increasingly good.

Speaker: Look, we think it's going to be at mid, so we've gone to the lower end of the original guide, if you see what I mean, relative to res.

Ward Nye: If we're looking at non-res, we had previously said, look, that's going to be down mid single digits to high. So we've really taken the same view on that that we have relative to res. We said that's going to be down high single digits, not because we think heavy is not going to be good. I think heavy is going to be increasingly good.

Speaker: If we're looking at non-RAS, we had previously said, look, that's going to be down mid-single digits to high. So we've really taken the same view on that that we have relative to RAS. We said that's going to be down high single digits.

Speaker: Not because we think heavy is not going to be good. I think heavy is going to be increasingly good.

Speaker: These are going to be big jobs, and it's going to take a little bit of time. But really, what we've done, excuse me, we've looked at the public side of it. We said we thought public would be up mid-single digits to high-single digits. We actually think that's now going to be modestly down, and it's more of a timing issue than anything else. Frankly, you're rolling the dice a little bit on whether you're going to have a good business.

Ward Nye: These are going to be big jobs. It's going to take a little bit of time. But really, what we've done, excuse me, we've looked at the public side of it. We had said we thought it would be up mid-single digits to high-single digits. We actually think that's now going to be modestly down, and it's more of a timing issue than anything else. Because part of what we're assuming is, let's assume we're going to have a relatively normal weather calendar year this year.

Speaker: these are going to be big jos 's going to take a bit of time

Speaker: but really we've done ly me we've look at the public side of it we said we thought public would be a mid-single digits to high singledigits we actually think that's now going to be modestly down and it'smore of a timing issue than anything else

Ward Nye: While not wholly offsetting, construction spending for domestic manufacturing continues to trend positively with the June 2024 ceasely adjusted annual rate of spending at $236 billion, a 19 percent increase from the June 2023 value of $198 billion. Importantly, the breadth of reshoring projects is extending from automotive batteries and semiconductors to pharmaceuticals. For example, Nova Nordesk is investing $4 billion to build a 1.4 million square foot manufacturing facility near Raleigh, North Carolina for which we're well positioned to supply from our nearby quarries.

Speaker: because part of what we're assuming is, you know, let's assume we're going to have a relatively normal weather calendar year this year. And if we go to businesses like the Central Division, you know, once we get toward late October

Ward Nye: And if we go to businesses like the Central Division, once we get toward late October, Frankly, you're rolling the dice a little bit on whether you're going to have good business. There won't be frozen weather impacted in November and December, so now we have pulled back a bit on infrastructure. Again, that's not work, Trey, as you know, that's going to go away. It's going to be work that's going to be pushed into 2025. For a lot of reasons, we're perfectly okay with that.

Speaker: Frankly, you're rolling the dice a little bit on whether you're going to have good business.

Speaker: There won't be frozen weather impacted in November and December, so now we pulled back a bit on infrastructure. Again, that's not work, Trey, as you know, that's going to go away. It's going to be work that's going to be pushed into 2025. For a lot of reasons, we're perfectly okay with that.

Speaker: frozen weather of impacted in November and December so now we pulled back a bit on infrastructure and again that's not work Trey as you know that's going to go away it's going to be work that's going to be pushed into 2025 and for a lot of reasons we're perfectly okay with that but

Ward Nye: In addition, while artificial intelligences in its early stages, Martin Marietta is geographically well positioned to capitalize on the related data center and infrastructure build out led by big tech, including Amazon, whose announced plans to invest more than $100 billion over the next decade on data centers alone. Relative to light non-residential and residential activity, restrictive monetary policy continues to impact these interest rates sensitive end markets. The lock-in effect of high mortgage rates and low inventory are only serving to exacerbate the well-cronicled housing affordability and availability issues in many of our company's key metropolitan areas. That said, recent inflation and employment data should provide the foundation for a accommodative federal reserve policy actions later this year and end to 2025.

Ward Nye: Relative to the guide and relative to the end uses, I hope that it gives you the specificity around it that will be helpful to you.

Speaker: Relative to the guide and relative to the end uses, I hope that it gives you the specificity around it that will be helpful to you.

Speaker: Relative to the guide and relative to the end uses, I hope that puts the specificity around it that will be helpful to you.

Ward Nye: Yeah, absolutely. That was perfectly helpful. Just one last one, if I could sneak one in.

Trey Grooms: Yeah, absolutely. That was perfectly helpful. Just one last one, if I could sneak one in.

Trey Grooms: Yeah, absolutely. That was perfectly helpful. Just one last one, if I could sneak one in. I think you mentioned that the integration of

Trey Grooms: I think you mentioned that the integration of Blue Water and Albert Fry and Sons is complete, and it sounds like they're performing at least as well as your expectations, if not better. If you could maybe make a few more comments about kind of where you're seeing the outsized benefits or where they're exceeding expectations. And also, just on the pipeline, you know. I mean, you just completed two deals this year, one pretty big one.

Ward Nye: I think you mentioned that the integration of Blue Water and Albert Frey & Sons is complete, and it sounds like they're performing at least as well as your expectations, if not better. If you could maybe go a little bit more, Collins, about kind of where you're seeing the outsized benefits or where they're exceeding expectations, and also just on the pipeline, you know. I mean, you just completed two deals this year, one pretty big one.

Speaker Change: Blue Water and Albert Fransons are complete and it sounds like they're...

Speaker Change: Performing at least as good as your expectations, if not better. If you could maybe go a little bit more comments about kind of where you're seeing the outsized benefits or where they're exceeding expectations and also I'm just on the pipeline you know I mean you just completed two

Trey Grooms: Do you think we should, you know, what the pipeline looks like? And do you think we should be looking for more kind of tuck-in deals, given that recent M&A activity you've been doing? Or, you know, could there still be the potential for some chunky deals out there for you guys?

Trey Grooms: deals this year. One pretty big one. Do you think we should, you know, what's the pipeline look like and do you think we should be looking for more kind of tuck-in deals given that recent M&A activity you've been doing or, you know, could there still be the potential for some chunky deals out there for you guys?

Ward Nye: What's the pipeline look like, and do you think we should be looking for more kind of tuck-in deals, given the recent M&A activity you've been doing, or could there still be the potential for some chunky deals out there for you guys?

Ward Nye: I encourage you to read more on this as discussed in the CEO commentary and market perspective released earlier today. Beyond 2024, we expect the generational highway and streets investments as the nascent reshoring and artificial intelligence infrastructure build out are very much expected to provide an extended multi-year construction cycle in these aggregates intensive end markets. Equally, when the affordability headwinds recede, we fully expect an accelerated housing construction recovery, specifically in single-family, which will be required to address the structural deficit of homes in many of our market market. Importantly, as history informs us, growth and single-family construction boats well for light non-residential activity, which typically follows with a lag, but in this instance, a lag which we believe will be more abbreviated than previous cycles.

Speaker: Great questions, Trey, so thank you for all of that. So we'll start with both Blue Water and Alfry relative to integration. So you're right. I mean, from our perspective, those integrations are done. They have been tucked in.

Ward Nye: Great questions, Trey, so thank you for all of that. So we'll start with both Blue Water and Alfry relative to integration. So you're right. I mean, from our perspective, those integrations are done. They have been tucked in.

Speaker: Great questions, Trey. So thank you for all of that. So we'll start with both Blue Water and Alfry relative to integration. So you're right. I mean, from our perspective, those integrations are done, they have been tucked in, they're pure bolt-ons, our integration process.

Speaker: They're pure bolt-ons. Our integration process is extraordinarily efficient, and we've discussed that before. We typically integrate the back office systems and processes and onboard people literally over the course of a weekend. So our intention is typically to close on a Friday and do a lot of training over the course of the weekend, open on Monday, and have people going over our scales, getting Martin Marietta tickets, and having them in our systems, and that's exactly what happened.

Ward Nye: They're pure bolt-ons. Our integration process is extraordinarily efficient, and we discussed that before. We typically integrate the back office systems and processes and onboard people literally over the course of a weekend. So our intention is typically to close on a Friday and do a lot of training over the course of the weekend, open on Monday, and have people going over our scales, getting Martin Marietta tickets, and having them in our systems, and that's exactly what happened.

Speaker: is extraordinarily efficient and and we discussed that before. We we typically integrate the back office systems and processes and onboard people.

Speaker: literally over the course of a weekend. So our intention is typically to close on Friday and do a lot of training over the course of the weekend, open Monday, and have people going over our scales, getting Martin Marietta tickets, and having them in our systems. And that's exactly what happened.

Speaker: So as we think about what's happening with those businesses now, operationally, they're performing really, very well, number one. Number two, these are folks who know that they've got a forever home right now. I mean, we're an aggregates-led business, and they're delighted to be a part of Martin Marietta. Number three, their safety numbers have been extraordinary. I mentioned in my opening commentary that from an incident rate perspective, this was the safest quarter that Martin Marietta has ever had.

Ward Nye: So as we think about what's happening with those businesses now, operationally, they're performing really, very well, number one. Number two, these are folks who know that they've got a forever home right now. I mean, we're an aggregates-led business, and they're delighted to be a part of Martin Marietta. Number three, their safety numbers have been extraordinary. I mentioned in my opening commentary that from an incident rate perspective, this was the safest quarter that Martin Marietta has ever had.

Speaker: So, as we think about what's happening with those businesses now, operationally, they're performing really very well, number one. Number two, these are folks who know that they've got a forever home right now. I mean, we're an aggregates-led business. They're delighted to be a part of Martin Marietta. Number three...

Jim Nickolas: I'll now turn the call over to Jim to discuss our second quarter financial results. Jim? Thank you, Ward, and good morning, everyone.

Jim Nickolas: As Ward mentioned and shown in today's release, we revised our full year 2024 adjusted even the guidance to $2.2 billion at the midpoint, reflecting our first half results and revised second half shipments expectations. In the second quarter, the building materials business generated revenues of $1.7 billion, a decrease of 3% and gross profit of $501 million, a decrease of 7%. The decline in both metrics is attributable to the divestiture of our South Texas cement and related concrete businesses, as well as shipment declines experienced in the quarter, most notably due to wet weather, partially offset by contributions from the Albert Fry and Suns and Bluewater acquisitions.

Speaker: Their safety numbers have been extraordinary. I mentioned in my opening commentary that from an incident rate perspective, this was the safest quarter that Martin Marietta has ever had.

Speaker: To be able to say that after we've done the degree of acquisitions that we've done is, in my view, pretty extraordinary. Now, if we think about what continued synergy realization is going to look like, several things.

Ward Nye: To be able to say that after we've done the degree of acquisitions that we've done is, in my view, pretty extraordinary. Now, if we think about what continued synergy realization is going to look like. Several things. Number one, we will continue to invest responsibly in these businesses, in fixed plant, rolling stock, etc., and we think that will continue to make the businesses more efficient. But equally important, the pricing at those locations is actually notably below the Martin Marietta corporate average. By that, I mean, let's call it four plus dollars a ton.

Speaker: and to be able to say that after we've done the degree of acquisitions that we've done in my view is pretty extraordinary now if we think about what continued synergy realization is going to look like

Speaker: Number one, we will continue to invest responsibly in these businesses, in fixed plant, rolling stock, etc., and we think that will continue to make the businesses more efficient. But equally important, and the pipeline continues to look attractive. The pipeline continues to be almost entirely pure aggregates businesses.

Speaker: Several things. Number one, we will continue to invest responsibly in these businesses in fixed plant, rolling stock, etc. and we think that will continue to make the businesses more efficient.

Speaker: But equally important...

Speaker Change: The pricing at those locations is actually notably below a Martin Marietta corporate average by that I mean, let's call it four plus dollars a ton

Ward Nye: So if I go back to the commentary that we had on targeted mid-years and the fact that they're coming through in the way that we would have expected on the acquisitions, that's going to give us continued near-term upside on those businesses, and we think that's likely to persist for a number of years. Operationally, they will continue to get better for a while. So we think there's going to be goodness that's going to be coming to us from Blue Water, from Albert Frye and Sons, and, by the way, from the continued acquisitions in California and Arizona for a while yet.

Jim Nickolas: The net positive impact of acquisitions and investitures in the second quarter was $7 million of adjusted EBITDA. Our aggregates pipeline established second quarter records for revenues and gross profit, as contributions from acquired operations and strong pricing more than offset lower shipments. Aggregates gross profit per ton improved 9% to a second quarter record of $7.41. That number is inclusive of the $20 million or $0.37 per ton, non-recurring, non-cash purchase accounting impact of the fair market value right up of inventory related to the Bluewater acquisition, which was fully recognized in the second quarter. Excluding this purchase accounting impact, gross profit per ton increased 14%. These impressive results reveal and affirm how our discipline commercial strategy and flexible cost structure yields higher profits, despite lower volumes.

Speaker Change: so if i go back to the commentary that we had on targeted midyears and the fact that they're coming through the way that we would have expected

Speaker: on the acquisitions.

Speaker: That's going to give us continued near-term upside on those businesses. We think that's likely to persist for a number of years.

Speaker: operationally they will continue to get better for a while. So we think there's going to be goodness that's going to be coming to us from Blue Water, from the Albert Bryan Sons, and by the way from the continued acquisitions in California and Arizona for a while yet.

Ward Nye: Now that leads into the second part of your question, that is, what does the pipeline look like? And the pipeline continues to look attractive. The pipeline continues to be almost entirely pure aggregates businesses. And they tend to be a bit of a blend of what you said. Some of them have a little bit of chalkiness to them.

Speaker: Now that leads into the second part of your question, that is, what does the pipeline look like?

Speaker: And the pipeline continues to look attractive. The pipeline continues to be almost entirely pure aggregates businesses.

Speaker: And they tend to be a bit of a blend of what you said. Some of them have a little bit of chalkiness to them. A lot of them are nice, tuck-away transactions.

Speaker: and and they tend to be a bit of a blend of what you said some of them have a little bit of chalkiness to them a lot of them are nice tuck away transactions

Ward Nye: A lot of them are nice, tuck-away transactions. We hope we'll have more for you on some of those as the year goes on. As you know, between what's gone in and what's gone out this year, we've done well over $4 billion worth of transactions, but... If we're sitting at a net leverage of two times as of June 30th, as you know, that gives us ample dry powder to continue doing what I think is really a core competency for Martin Marietta, and that is doing M&A and doing it well. M&A is something that's in our DNA, and we're very proud of that.

Speaker: We hope we'll have more for you on some of that as the year goes on as you know Between what's gone in and what's gone out this year. We've done well over four billion dollars worth of transactions, but

Jim Nickolas: Submitted in concrete revenues decreased 37% to $261 million and gross profit decreased 44% to $72 million. Again, different primarily by the divesture of our South Texas cement plant and its related concrete operations, and secondarily by significant wet April, May and early June weather in Dallas Fort Worth. Notably, our strategic mid-loathe and cement plants daily shipping rates returned to near sold out levels exiting the quarter. Remember, too, we expect our new finish mill to be operational in the third quarter, which has the capacity to add approximately 450,000 tons of incremental high margin annual production capacity in the attractive North Texas market.

Speaker: if we're sitting at a net leverage of two times as of june thirtieth

Trey Grooms: As you know, that gives us ample dry powder to continue doing what I think is really a core competency for Martin Marietta, and that is doing M&A and doing it well. M&A is something that's in our DNA, and we're very proud of that. So, Trey, thank you for that second question. I hope that cleared some of those items up, too.

Ward Nye: So Trey, thank you for that second question. I hope that cleared some of those things up. Yeah, great color. Thanks, Ward. Best of luck.

Speaker: Yeah, great color. Thanks, Ward. Best of luck.

Operator: Your next question comes from the line of Jerry Revich from Goldman Sachs. Your line is now open. Please ask your question.

Operator: Your next question comes from the line of Jerry Revitch from Goldman Sachs. Your line is now open. Please ask your question.

Jerry Revich: And can I ask you, Jim, in terms of the midpoint of the aggregates, gross profit, and top-line parameters, it looks like on a year-over-year basis you're guiding to about two points of gross margin expansion in the back half 24 versus back half 23, which is better than the first half. Is that right? And can you unpack the drivers behind that? If that's the case, how much of that is the mid-years in Tennessee and California, et cetera, that's driving the acceleration in the outlook? Yeah, no, you're right. Those are the ballpark numbers.

Ward Nye: Yes, hi, good morning, everyone. Good morning, Jerry.

Jim Nickolas: Our asphalt and paving revenues and gross profit increased modestly to $245 million and $37 million respectively, both second quarter records, in large measure through the pricing improvements and energy cost tailwinds. Maggasia specialties revenues of $81 million were in line with the prior year quarter, while the gross profit decreased 2% to $27 million. Strong pricing, improved maintenance cost management, and energy cost tailwinds helped counterbalance lower chemical and lime shipments.

Ward Nye: What I wonder, if I can just ask you, conceptually, right, this year, you folks had excellent pricing based on the volumes that we're seeing from everyone across the board. You haven't had to cede market share to get this level of pricing. We're seeing stubborn inflation across repair and maintenance and elsewhere. How does that impact how you're thinking about 25? Obviously, we can't count on a volume ramp back up. So, I'm wondering, based on what you're seeing and the receptivity of price increases and inflation, what are the prospects for potential double-digit pricing year again in 25, based on everything you've seen here today?

Jerry Revich: Yes, hi. Good morning, everyone. Good morning, Jerry.

Speaker Change: what do i wonder if i just as you conceptually right this year you folks had excellent pricing based on the volumes that we're seeing from everyone across the board you haven't had to succeed market share

Speaker Change: To get this level of pricing, we're seeing stubborn inflation across repair and maintenance and elsewhere. How does that impact how you're thinking about...

Speaker Change: 25. Obviously, we can't count on a volume ramp back up. So I'm wondering, based on what you're seeing, and the receptivity of price increases and inflation.

Jim Nickolas: SOAR has long provided the framework we use to grow our business and deploy capital for long-term success. During the first half of this year, we deployed over $2.5 billion on pure play aggregate acquisition. Invested $339 million of capital into our business, and returned $542 million to shareholders through dividend payments and sharey purchases. In the second quarter alone, we repurchased $530,000 shares at an average price of $566 per share. Since our repurchase authorization announced in February 2015, we have returned a total of $3.2 billion to shareholders through both dividends and sharey purchases.

Speaker Change: i guess what are the prospects for potential

Speaker Change: Double-Digit Pricing Year, again, in...

Ward Nye: You know, but obviously we'll give you more of a definitive guide on that as we go into next year But Jerry, as I think about the building blocks for what we have, I think infrastructure is going to stay very attractive I think housing and our markets has more than found bottom. I think that's going to get attractive I think heavy non-res is and is going to stay attractive. As I indicated in the commentary I think the lag we've typically seen between non-res on the light side and res is going to be abbreviated I think that sets us up for a really attractive 2025 and beyond relative to pricing From my perspective, the pricing that you have seen in Martin Marietta for 30 years as a public company that I think you would look at and say historically has looked really good, frankly, is seeing a step change.

Speaker Change: in twenty five based on it everything you've seenyou

Jerry Revich: to date

Speaker Change: You know what, obviously we'll give you more of a definitive guide on that as we go into next year.

Jerry Revich: Jerry, as I think about the building blocks for what we have, I think infrastructure is going to stay very attractive. I think housing in our markets has more than found bottom. I think that's going to get attractive. I think heavy non-res...

Speaker Change: is and is going to stay attractive. As I indicated in the commentary, I think the lag we've typically seen between non-res on the light side and res is going to be abbreviated. I think that sets us up for a really attractive 2025 and beyond relative to pricing.

Jim Nickolas: Our debt to EBITDA ratio was two times as of June 30th at the low end of our target range of 2 to 2.5 times, providing balance sheet strength and ample flexibility to actively pursue or emanate pipeline, reinvest into business, and extend our long track record of returning capital to Martin area to shareholders, all while preserving financial flexibility and our investment grade credit rating profile.

Speaker Change: From my perspective, the pricing that you have seen in Martin Marietta for 30 years as a public company that I think you would look at and say historically has looked really good.

Ward Nye: I think the step change is appropriate, but for a number of reasons. Among others is that people are now starting to think about this business and what replacement costs will look like for these hugely valuable reserves. If we look at the reserves we have today, 70 plus years at current extraction rates is a significant body of reserves at the same time. I don't think that we should be punished for having the discipline and having the vision to make sure that we've got adequate reserves.

Speaker Change: frankly is seeing a step change and I think the step change is appropriate but for a number of reasons and among others is people now are starting to think about this business on what does replacement cost look like for these hugely valuable reserves

Ward Nye: With that, I will throw the call back over to ward. Thanks Jim.

Speaker Change: I mean, if we look at the reserves we have today, 70 plus years at current extraction rates is a significant body of reserves at the same time.

Ward Nye: In 2024, Martin Marietta is proudly celebrating our 30th year as a publicly traded company. Our three decades of success has been the result of an unwavering commitment to safety and the discipline dexecution of our proven strategy. As we plan for the next 30 years, we're confident Martin Marietta is well positioned to continue leading our industry's evolution, while at the same time navigating through inevitable macroeconomics and driving sustainable attractive growth. We remain committed to building and maintaining the safest, best performing, and most durable aggregates led business and look forward to delivering superior shareholder value for our stakeholders for years and decades to come.

Speaker Change: I don't think that we should be punished for having the discipline and having the vision to make sure that we've got adequate reserves.

Ward Nye: So does that tell me, and does that help inform you, that we think pricing will continue to be at what I think will be new levels? And probably, in that zip code of what you're talking about, I think the answer is, yeah, it probably will. And again, we'll come back with more definitiveness on that in February, but I would not encourage you to think about it materially differently.

Speaker Change: does that tell me and does that help inform you that we think pricing will continue to be

Speaker Change: atwhat i think will be new levels and probably in that siipcodeof what you're talking about i think the answerersis yet it probably will and again we'll come back with more definitiveness on that in february but but i would not encourage you to think about it materially differently

Jim Nickolas: And can I ask Jim, in terms of the midpoint of the aggregates, gross profit, and top-line parameters, it looks like on a year-over-year basis, you're guiding to about two points of gross margin expansion in the back half 24 versus back half 23, which is better than the first half. Is that right? And can you unpack the drivers behind that, if that's the case? How much of that is the mid-years in Tennessee and California, et cetera, that's driving the acceleration in the outlook? Yeah, no, you're right about those ballpark numbers.

Jerry Revich: And can I ask you, Jim, in terms of the midpoint of the aggregates, gross profit,

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

Jerry Revich: and Topline Parameters. It looks like on a year-over-year basis, you're guiding to about

Jerry Revich: two points of gross margin expansion backhalf twenty-four versus track half twenty-three which is

Operator: Ladies and gentlemen, we will now begin the question and end of session. Should you have a question, please press star followed by number one on your touchstone phone. You will hear a prompt that your hand has been raised.

Jerry Revich: better than the first half, but is that right? And can you unpack the drivers behind that, if that's the case? How much of that is the mid-years in Tennessee and California, et cetera, that's driving the acceleration in the outlook?

Operator: Should you restrict the client from the polling process, please press star followed by number two. If you're using a speaker phone, please leave the handset for pressing any keys. One moment please for your first question.

Jim Nickolas: Yeah, you're right. Those ballpark numbers are correct. The star of the show, as always, has been growing ASP, so that's... Floating through in the second half of the year.

Speaker: Yeah, you're right. Those ballpark numbers are correct. The star of the show, as always, has been growing ASP, so that's... flowing through in the second half of the year. That's the primary metric that's driving that improved margin, Jerry. The secondary impact is, as I mentioned in prior calls, inflation is abating. It's moderating as the year goes on. So the cost pressures are, by and large, coming back down, not to where they were pre-COVID, of course, but, you know, five to six percentage points on baseline cost inflation. So those two things are the main drivers. Thank you. Your next question comes from the line of Anthony Pettinari of Citi. Please ask your question.

Speaker: Yeah, you're right, those ballpark numbers are correct. The star of the show, as always, has been growing ASP, so that's...

Jim Nickolas: That's the primary metric that's driving that improved margin, Jerry. The secondary impact is, as I mentioned in prior calls, inflation is abating. It's moderating as the year goes on. So the cost pressures are, by and large, coming back down. Not to where they were pre-COVID, of course, but, you know, five to six percentage points on baseline cost inflation. So those two things are the main driver.

Speaker: Floating through in the second half of the year, that's the primary metric that's driving that improved margin, Jerry. Secondary impact is, as I mentioned in prior calls, inflation is abating, it's moderating as the year goes on.

Kathryn Thompson: Your first question comes from the line of Catherine Thompson from Thompson Research Group. Your line is now open. Please ask your question.

Ward Nye: Hi, thank you for taking my questions today. The first is focused on Q2 and just better understanding the impact of how much of it was marked. Maybe more color on the volume of our volume and patching the quarter. And then part and parcel with that. How should we think about the balance of Q3 and Q4 in terms of how profitability should flow through given some of the obvious weather constitutes you and your peers have been facing.

Speaker: The cost pressures are by and large coming back down, not to where they were pre-COVID, of course, but five to six percentage points on baseline cost inflation. So those two things are the main driver.

Operator: Thank you. Thank you, Jerry. Your next question comes from the line of Anthony Pettinari of Citi. Please ask your question. Hi Anthony. Hey.

Anthony Pettinari: Thank you.

Operator: Your next question comes from the line of Anthony Pettinari of Citi. Please ask your question. Good morning. Hi Anthony. Hey.

Anthony Pettinari: Thank you, Jerry.

Speaker: Your next question comes from the line of Anthony Pettinari of Citi. Please ask your question.

Anthony Pettinari: now good morning

Speaker: fanthony

Anthony Pettinari: Hey, Ward, could you talk a little bit more about maybe state funding environments as you think about, you know, next 12 months and fiscal 25? I think there was some data that suggested, you know, general fund spending for the states could be

Ward Nye: Thank you. Good morning, Catherine. Thank you for the question. So look, weather was a big deal. And then Q2, there's no doubt about it. So I said in the prepared remarks that it was 119% wetter in DFW this year than it was last year. And the fact is, if you look at what happened in North Texas all by itself, but then you couple that with what happened in the central division. And what I'll suppose is most people don't think about the central division as being impactful to us as it is.

Ward Nye: Really, if we're looking at Dallas itself and the central division together, those two areas of business typically represent nearly 40% of our Q2 shipments. So if we're looking at significant rain in Dallas and significant rain in flooding in the Midwest, that was really a serious body blow to the to the business. And what I liked about that is it took that blow and came in with record aggregate profitability, record unit profitability and did all of that taking on the $20 million of inventory fair markup that we've totally absorbed in Q2.

Anthony Pettinari: Down in fiscal 25, you know, after a number of years of very strong growth, obviously that's not one-to-one to DOT spending, but I'm just wondering if you could kind of walk through the states and where you're maybe the most excited and seeing some growth versus which could be lighter, kind of as you think about next 12 months.

Ward Nye: No, thank you for the question. I appreciate it very much.

Speaker Change: no thank you with the question iappreciate very much so let's missris smmark fu march thetogether

Ward Nye: So let's just do March together. So, look, if we're looking at Texas DOT lettings for FY24 at 13.7, that's up 17% from the year before. But equally, if we're looking to see where they are next year, again, they're looking to be up over that next year. If I'm looking at Colorado, they passed a $5.3 billion 10-year infrastructure bill, and that basically ensures a consistent stream of DOT funding beginning in 2023, and that's going to go on for several years. And we expect, even going into 2025, that Colorado DOT is going to have at least $3.7 billion available to spend, and that's going to be a really attractive budget.

Speaker Change: So, look, if we're looking at Texas DOT lettings for FY24 lettings, forecasts of 13.7.

Speaker Change: That's up 17% from the year before, but equally, if we're looking to see where they are next year, again, they're looking to be up over that next year.

Anthony Pettinari: If I'm looking at...

Speaker Change: Colorado, you know they passed a 5.3 billion dollar 10-year infrastructure bill.

Speaker Change: And that basically ensures consistent stream of DOT funding beginning in 2023 and that's going to go on for several years. We expect, even going into 2025, that Colorado DOT is going to have at least $3.7 billion available to spend and that's going to be a really attractive budget.

Ward Nye: So seeing what happened in Dallas was important. Understanding what happened in the Midwest was important. But I was also taken with the resiliency of our cement business in North Texas. Again, we've long defined what equals strategic cement for us. And clearly what we have in that market is just that. I mean, we saw organic shipment volumes down about 18% and that was all driven by rain. But pricing up nearly 10 and with very, very good performance.

Ward Nye: If we're looking here in the backyard in North Carolina, you know, we expect their budget to increase to $7.6 billion for FY25. Again, that's an increase over the previous year. And part of what's notable there, keep in mind, North Carolina started looking at different ways to fund their infrastructure a few years ago, and from 2025, they're going to be using sales taxes at about 6% to fund infrastructure work here in North Carolina. That's going to make a nice difference.

Speaker Change: If we're looking here in the backyard in North Carolina, you know, we expect their budget to increase to $7.6 billion for FY25. Again, that's an increase over prior year.

Speaker Change: And part of what's notable there, keep in mind, North Carolina started looking at different ways to fund their infrastructure a few years ago, and from 2025 thereafter, they're going to be using sales taxes at about 6%.

Ward Nye: Similarly, if we look at Georgia, their 25 budget of $4.2 billion, that's a 7% increase over where it was in 24. And this one's interesting to me, even if we look at Florida. Florida's budget, if you look at it from the top, looks like it's going down, but that's only because FY24 had about $2.1 billion of one-time supplements that were in it. So if we're looking at a base budget in Florida of about $15.1 billion, we're looking at what we think is a base in FY25 of about 15.5. The punchline is this:

Ward Nye: And as Jim indicated in his comments, we were seeing that marketplace turned to near sold out levels as soon as the rain abated. So those were your issues, I think 50% at least of what we saw in the quarter was attributable to rain. Do I think a portion of it was attributable to the economy? Yeah, probably 25% of it. So what am I seeing there? It's really what we indicated, and private construction because of what's happening with interest rates are seeing degrees of modest pullback, but the important thing to remember there are Kathryn's, we don't see markets that are overbuilt today in Marietta Marketplaces, so we feel like that's going to be fleeting, but equally value over volume causes some tonnage during the quarter, but the fact is we're perfectly okay with that.

Speaker Change: to fund infrastructure work here in North Carolina, that's going to make a nice difference.

Speaker Change: Equally, if we look at Georgia, their 25 budget of $4.2 billion, that's a 7% increase.

Speaker Change: Over where it was in 24 and this one's interesting to me Even if we look at Florida Florida's budget if you look at a topside looks like it's going down

Speaker Change: But that's only because FY24 had about 2.1 billion dollars of one-time supplements that were in it. So if we're looking at a base budget in Florida of about 15.1 billion dollars, we're looking at what we think is a base in FY25 of about 15.5.

Ward Nye: If we go and look at our top 10 states, Texas is up. Florida is up from a base budget perspective. North Carolina is up. Indiana is up. Georgia is up. Colorado is up. Arizona is up. So really, there are two states that are down. One is Minnesota.

Speaker Change: The punchline is this, if we go and look at our top ten states...

Speaker: Texas is up, Florida is up from a base budget perspective, North Carolina is up, Indiana is up, Georgia is up, Colorado is up, Arizona is up, and Texas is up. So really, there are two states that are down.

Speaker: texas is up floridaus up from a base budget perspective north carolina indiana' up george's up colorados up arizonais up and texas is up so really thereare two states that are down

Ward Nye: It's going from 4.5 to about 4. And to put that in some context, Minnesota is going to have a DOT budget next year that's comparable to about where Georgia is. I don't think that's a bad place for Minnesota to be, and California is going to be modestly down. And I think that's simply in keeping with what we see more broadly in the California budgeting process. But again, if I look at these top 10 states, it looks awfully attractive to me, but equally, when I look at the Highway Contract Awards over a period of time, like if we go back to, let's call it, mid-year 2022 on an LTM basis and look at where it is this year, in June, on an LTM basis.

Speaker Change: one is minnesota it's goingone from four point five to about four and to put that as some context minnesotaisgoing to have a drt budget next year that's wling backwhere georgia is

Jim Nickolas: Again, we monitor that, we're going to be thoughtful around it, but again, we're seeing continued expanded adjusted EBITDA margins in what we're doing, we feel like the breakdown we've had between whether at 50% market at 25% and value over volume at about 25% makes sense, but the other part of your question went to the cadence of how we think about the quarters, let me turn that over to Jim to talk you through that a bit because that is going to change modestly. Yes, last year, Kathryn, second half of the year, about 60% of consolidated EBITDA came through in Q3 and 40% came through in Q4 because of what we're seeing this year with weather, et cetera, in July and even August, the split is probably closer to 55% Q3, 45% in Q4, so a little bit more Q4 weighted this year than normal.

Speaker Change: I don't think that's a bad place for Minnesota to be. And California is going to be modestly down, and I think that's simply in keeping with what we see more broadly in the California budgeting process.

Speaker Change: But again, if I look at these top 10 states, it looks awfully attractive to me, but equally when I look at the Highway Contract Awards over a period of time, like if we go back to, let's call it mid-year 2022 on an LTM basis,

Speaker: and look at where it is this year in June at an LTM basis.

Ward Nye: It's up 25%, and that's the step change that we thought we would see in contract awards. And again, part of SOAR that Jim referenced in his comments... dictated where we wanted to be in one of the places we wanted to be or places that had good, durable DOT budgets and had people moving into those states so they would have the imperative to continue to invest. And as we look at how those state DOT budgets look today and how they're going to look, more importantly to your question tomorrow, we have a lot of confidence about that and So Anthony, I hope this was helpful.

Speaker Change: It's up 25%. And that's the step change that we thought we would see on contract awards. And again, part of SOAR, that Jim referenced in his comments...

Speaker Change: dictated where we wanted to be and one of the places we wanted to be were places that had good, long, durable DOT budgets and had people moving those states so they would have the imperative to continue to invest.

Kathryn Thompson: Okay, perfect, and just one follow-up if I may, just on the outlook when you look at backlogs or jobs in the Q, what are you seeing in terms of project types and how is pricing on these type of projects, which obviously play into margins? Thanks very much. Thank you, Kathryn. If we're looking at customer backlogs, they're up sequentially so they continue to build, number one, I think that's important. Number two, if we're looking at the nature of the projects, infrastructure is going to be a good end use for several years, and we see that continuing.

Speaker Change: And as we look at how those state DOT budgets look today and how they're going to look more importantly to your question tomorrow

Speaker Change: We have a lot of confidence about that and have a very attractive outlook as we contemplate it. So, Anthony, I hope that was helpful.

Speaker Change: No, that's extremely helpful. I'll turn it over. Thank you. Thank you.

Operator: Your next question comes from the line of Angel Castillo of Morgan Stanley. Please ask your question.

Operator: Your next question comes from the line of Angel Castillo of Morgan Stanley . Please ask your question.

Operator: Hi, good morning. Thanks for taking the time to answer that question. Just wanted to drill in a little bit more on the kind of 25% of the volume that the client was maybe more related to kind of the price over volume strategy. Could you just talk about, is there any sense for kind of what markets that may be occurring more in or, you know, some of the competitive dynamics that might be driving that versus kind of a greater or increasing kind of discipline toward price over volume?

Angel Castillo: like good morning and work thanks for taking that question

Kathryn Thompson: If we're looking at non-Res, we're seeing degrees of shifts there, and by the way, that's not a surprise to us. So are we seeing more factories, the answer is yes, are we seeing good pricing that goes with that, the answer is yes. Are we seeing good steady work and growing work, frankly relative to energy, the answer is yes. Are we seeing growing work relative to data centers for all the reasons that I indicated in the prepare remarks and in the commentary that we published today, that continues to grow.

Angel Castillo: Just wanted to drill in a little bit more on the kind of 25% of the volume that the client was maybe more related to kind of the price over volume strategy.

Angel Castillo: Could you just talk about, is there any sense for kind of what markets that may be occurring more in or, you know, some of the competitive dynamics that might be driving that versus kind of the greater or increasing kind of discipline toward price over volume?

Ward Nye: You know what it was interesting? Because I took that same deep dive that you're trying to do intellectually, just to make sure that there wasn't some overriding trend or something that we needed to be concerned about or alarmed by, and it wasn't. I mean, as you recognize, and we do too, markets in our world tend to be an MSA, because the weight-to-price ratio that I spoke of in the CEO commentary, the material often doesn't travel very far, and what we see on occasion is somebody can be aggressive, somebody can be long on any given product, and there can be just a whole host of things that can drive different degrees of behavior in different markets. So we're not seeing anything that's overwhelming in any one market that causes us any concern.

Speaker Change: You know what it was interesting because I took that same deep dive that you're trying to do intellectually just to make sure that there wasn't some

Kathryn Thompson: Obviously, warehousing is not, that's not a surprise to anyone, and what we're seeing is you almost have two lines of traveling. You have data centers in one lane, and they're going in a positive direction, and warehousing is going in the other, and you're seeing those percentages almost pass each other on a precise precision or percentage basis today. So that's the type of work that we're seeing, the other thing that we're beginning to see, and this is more in Georgia, it's in North Carolina, it's in South Carolina, we're seeing green shoots and degrees of single family housing right now.

Speaker Change: overriding trend or something that we needed to be concerned about or alarmed by and it wasn't.

Speaker Change: I mean, as you recognize, and we do too,

Speaker Change: Markets in our world tend to be an MSA because of the weight to price ratio that I spoke of in the CEO commentary.

Speaker Change: The material often doesn't travel very far.

Speaker Change: And what we see on occasion is...

Speaker Change: Somebody can be aggressive, somebody can be long on any given product.

Speaker Change: There can be just a whole host of things.

Speaker Change: that can drive different degrees of behavior in different markets. So we're not seeing anything that's overwhelming in any one market that causes us any concern. Obviously...

Kathryn Thompson: And again, that's not a big surprise, simply because of the population dynamics. And again, relative to housing, we're such a small portion of the overall housing that traditionally in single family housing, back to the essence of your question, that tends to be very attractive priced materials Catherine.

Ward Nye: Obviously, we've stated a preference for value over volume, and we believe in that. We see it in the numbers. We believe that it's proving its efficacy through what we're seeing in the financial results. At the same time, we're always going to be thoughtful around, "Are we pushing too hard on occasion, and are we losing too much?" And so it's a process we go through. It's a dialogue that we do have here in this office, but more importantly, we have it with our division presidents and VPGMs.

Speaker Change: We've stated a preference for value over volume. We believe in that. We see it in the numbers. We believe that it's proving its efficacy in what we're seeing in the financial results. At the same time, we're always going to be thoughtful around

Kathryn Thompson: Thanks so much, and best of luck. Thank you.

Speaker: Are we pushing too hard on occasion? And are we losing too much?

Stanley Elliott: Your next question comes from the line of Stanley Elliott of Steeple. If your line is not open, please ask your question.

Speaker: And so it's a process we do go through. It's a dialogue that we do have here in this office, but more importantly, we have it with our division presidents and VPGMs.

Speaker: Are we pushing too hard on occasion, and are we losing too much? And so it's a process we do go through, it's a dialogue that we do have here in this office, but more importantly...

Speaker: So there's no one area that, if I were you, I would look at and have any concern about. Obviously, I don't want to talk about specific markets per se. It was really more of a weather event than anything else. Degrees of softening and then here or there on pricing.

Ward Nye: So there's no one area that, if I were you, I would look at and have any concern about. Obviously, I don't want to talk about specific markets per se. It was really more of a weather event than anything else.

Ward Nye: Thank you, morning, everyone. Nice work, guys, despite this difficult environment. Could you maybe walk us through kind of the revised guide, some of the puts and takes, and see maybe what we'll get us to the high end versus the low end, just as we're sitting here today, kind of halfway through the year. You bet. Happy to. And Stanley, thank you for your comments. We appreciate it. I'm with you. I think that was actually very good performance given what our team managed through. So several things.

Speaker: We have it with our division presidents and VPGMs, so there's no one area that if I were you, I would look at and have any concern about. Obviously, I don't want to talk about specific markets per se.

Ward Nye: Degrees of softening, and then here or there on pricing, but Angel, that's the best way that I can guide you to think about it right now.

Speaker: It was really more of a weather event than anything else, degrees of softening, and then

Angel Castillo: But Angel, that's the best way that I can guide you to think about it right now.

Angel Castillo: Here or there on pricing. But, Angel, that's the best way that I can guide you to think about it right now.

Speaker: That's very helpful. Thank you. And then maybe, yeah, of course, and maybe just to follow up on the cement business, you talked about that returning kind of being close to full, sold out in the quarter, or I guess shuffling quarters. I was hoping you could give us a little bit more color, remind us how we should kind of be thinking about the flow through of the expansion in terms of ramping up volumes and, you know, how you kind of see the profitability of that business as we kind of normalize from these weather impacts.

Ward Nye: That's very helpful. Thank you. And then maybe, yeah, of course, and maybe just to follow up on the cement business, you talked about that returning kind of being close to full, sold out in the quarter, or I guess shuffling through quarters. I was hoping you could give us a little bit more color, remind us how we should kind of be thinking about the flow through of the expansion in terms of ramping up volumes and how you kind of see the profitability of that business as we kind of normalize from these weather impacts.

Speaker: That's very helpful. Thank you. Thank you. And maybe just to follow up on the cement business, you talked about that returning kind of being close to full, sold out in the quarter, or I guess short in the quarter.

Ward Nye: Let's start with pricing. So as you've seen, we've turned our pricing guide of 11% to 13% up. And that includes the previously announced mid-years for California, for the Friday business, for blue water locations, as well as a targeted product and market specific mid-years in other geographies. And by the way, that's pretty typical for us. The one thing that I think it's going to be important this year relative to the mid-years, so much volume that had already been bid at the January 1 pricing, is still yet to go because of the furl that we've seen.

Speaker: I was hoping you could give us a little bit more color, remind us, you know, how we should kind of be thinking about the flow through of the expansion in terms of ramp up of volumes and, you know, how you kind of see the profitability of that business as we kind of normalize from these weather impacts.

Speaker: Sure. So I'll do a couple of things.

Ward Nye: Sure. So I'll do a couple of things.

Speaker: One, I'll ask Jim to speak to the capital project that we have underway, and he can give you a bit more on that and the 450,000 tons that will be added through that because we'll be thoughtful about the way that we do it. But obviously, if we're just looking at what happened relative to the weather in DFW, that was the driver, pure and simple. I mean, that took organic shipments down about 18%, but again, pricing was up 9.5%.

Jim Nickolas: One, I'll ask Jim to speak to the capital project that we have underway, and he can give you a bit more on that and the 450,000 tons that will be added through that because we'll be thoughtful about the way that we do it. But obviously, if we're just looking at what happened relative to the weather in DFW, that was the driver, pure and simple. I mean, that took organic shipments down about 18%, but again, pricing was up 9.5%.

Speaker: I'll do a couple of things. One, I'll ask Jim to speak to the capital project that we have underway and he can give you a bit more on that and the 450,000 tons that will be added through that because we'll be thoughtful around the way that we do it. But obviously, if we're just looking at what happened relative to the weather in DFW,

Ward Nye: So typically in a year, I've always told you historically, look, you could probably see about a quarter of the mid-years really show up in any given year and puts their put in. I think the mid-years are going to be notably more impactful in 25, in other words, when we come back to you in January and talk about our guide for next year, I think you're more mid-years affecting that this year than not. So that's how we're thinking about the ASP and the guide.

Speaker: That was the driver, pure and simply. I mean, that took organic shipments down about 18 percent, but again, pricing was up 9.5.

Speaker: And part of what we saw in that business is that we actually saw gross margins expand in that business. And that's one reason that we speak to what we've long called strategic cement. It's where we're an aggregates leader, where the market's naturally vertically integrated, where we have a downstream business, and we do it in Dallas that takes about 30% of what we're doing there. And its ability to be interdicted by waterborne imports is really quite minimal.

Jim Nickolas: And part of what we saw in that business is that we actually saw gross margins expand in that business. And that's one reason that we speak to what we've long called strategic cement. It's where we're an aggregates leader, where the market's naturally vertically integrated, where we have a downstream business, and we do it in Dallas that takes about 30% of what we're doing there. And its ability to be interdicted by waterborne imports is really quite minimal.

Speaker: and and part of what we saw in that business is we actually saw gross margins expand in that business and

Speaker: That's one reason that we speak to what we've long called strategic cement. It's where we're an aggregates leader, where the market's naturally vertically integrated, where we have a downstream business and we do in Dallas.

Jim Nickolas: Relative to volumes, clearly, that reflects an impacted first half result. And early in the second half of the year, look, July was wet and we're sitting here today as Tropical Storm Debbie is going through the Carolina, so we're living that. And so we're trying to take our experience with those events and really build that into the volume guide for the second half of the year. So we feel confident that we've hit that with as much clarity as we can given these circumstances.

Speaker: that takes about 30% of what we're doing there and its ability to be interdicted by waterborne imports is really quite minimal and so if we look at what strategic cement for us is, it's Midlothian. If we look at how the pricing behaved, it behaved well.

Speaker: So if we look at what our strategic cement for us is, it's Midlothian. If we look at how the pricing behaved, it behaved well. Despite the fact that organic shipments were down, we still expanded gross margins, which is why we want to invest capital in that market. And on that, let me turn to Jim, who can give you a sense of where we are in that process and how we think about volume.

Jim Nickolas: So if we look at what our strategic cement for us is, it's Midlothian. If we look at how the pricing behaved, it behaved well. Despite the fact that organic shipments were down, we still expanded gross margins, which is why we want to invest capital in that market. And on that, let me turn to Jim, who can give you a sense of where we are in that process and how we think about volume.

Speaker: Despite the fact, excuse me, that organic shipments were down.

Speaker: We still expanded gross margins, which is why we want to invest capital in that market. And for that, let me turn to Jim and he can give you a sense of...

Jim Nickolas: Look, relative to what will be expected as lower shipment levels, our teams are going to be focused as you would imagine us to, very much on cost control and making sure we're flexing our costs with demand. So we're very focused on that. The other thing that I think you'll see is given the inventory builds that we had with wet weather, where we're producing, but not selling. You know what, there's going to be a little bit of inventory drawdown and that's going to impact us a bit in and half too. And it can provide a modest headwind at EBITOP. But again, we've taken that into account in what we put out there for you.

Jim Nickolas: Yeah, so that project, the Finish Bill 7, as we call it, will be completed this quarter. As you know, it's 450,000 tons per year of annual production capacity, so give or take 110-ish thousand per quarter.

Jim: where we are in that process and how we think about volume. Yeah, so that project, the Finish Bill 7 as we call it, will be completed this quarter.

Jim: As you know, it's 450,000 tons per year annual production capacity, so give or take.

Jim Nickolas: We won't hit the market at full speed on day one. We'll be responsible for feathering in those volumes to ensure we don't disrupt the commercial strategy we've been following in that marketplace. Some more to come on when that comes out, but that will be helpful to us, A, in terms of volume but also, more importantly, operational flexibility. Wait times for customers, storage facilities, and our ability to react to different events are enhanced as a result of this project. So we're looking for this to improve margins going forward and, of course, volumes as those become available to us. Thank you.

Jim: $110,000 per quarter. We won't hit the market with that full speed on day one. We'll be responsible about feathering in those volumes to ensure we don't disrupt

Jim: The Commercial Strategy we've been following in that marketplace. Some more to come on when that comes out, but that will be helpful to us, A, in terms of volume, but also, more importantly, operational flexibility. Wait times for customers, storage facilities, our ability to react to different events is enhanced.

Jim Nickolas: One thing to keep in mind, too, is we're looking at the EBITDA guide. And I think this is something that's easy to forget. That we grew EBITDA in 2023 by 33%. I mean, that's a really big number. And it gives you a difficult year compare, but at the same time, we're seeing EBITDA margin grow. And even at the guide, we're looking at a two-year cager of high teams and getting close to 17, getting close to 20%.

Jim: As a result of this project, so we're looking for this to improve margins going forward and, of course, volumes as those become available to us. Angel, the last part of your question was, you know, what we see happening in volumes here as the quarter ended, and I think we indicated as weather got better in Dallas-Fort Worth, we were back to near sold-out conditions.

Ward Nye: Angel, the last part of your question was what we saw happening in volumes here as the quarter ended, and I think we indicated as the weather got better in Dallas-Fort Worth, we were back to near sold-out conditions at Midlothian, so I think that puts a bow on it. Thank you so much.

Jim Nickolas: So again, numbers that we're very proud of, numbers that we feel good about as we're going into the second half of the year. And again, a foundation, particularly relative to pricing, that we think puts us in a very attractive place as we start increasingly thinking about 2025 standards.

Operator: Thank you so much. I appreciate it. Thank you. Your line is now open. Please ask your question.

Ward Nye: Thank you so much. I appreciate it. Thank you. Your next question comes from the line of Garik Shmois of Loop Capital. Your line is now open. Please ask your question. Good morning. It's actually Zach.

Speaker Change: ad midd th and so i think that puts a all around it

Operator: Thank you so much. Appreciate it. Thank you.

Operator: Your next question comes from the line of Garik Shmois of Loop Capital.

Operator: Your next question comes from the line of Garik Shmois of Loop Capital. Your line is now open. Please ask your question. Good morning.

Operator: Your next question comes from the line of Garik Shmois of Loop Capital. Your line is now open. Please ask your question.

Stanley Elliott: Thanks so much for the color and best luck in the back half of the year. Thanks, Stanley.

Operator: It's actually Zach Pacheco.

Operator: Good morning. It's actually Zach Pacheco on for Garik this morning. Thanks for taking my question.

Garik Shmois: Appreciate you guys walking through the outlook on state funding moving forward a couple questions ago. Maybe just to dive into that real quickly. We've been hearing others citing inflation kind of eating into those IIJA-based dollars, therefore causing some delays.

Jerry Revich: So I guess I've got really the main one I wanted to talk about was kind of you know you've seen some slowing or maybe a little bit of deceleration you mentioned you know on the kind of on the activity front in addition to weather you know there was some of that and you've broken out in the past. You know I think as recently as the last call infrastructure kind of your expectation for the year I think what's kind of mid to high single improvement res was I think down low singles and non res low singles to mid single down if we kind of look at your your new view of the world and in the light of kind of what we've seen with some of the activity out there.

Speaker Change: Just curious if you guys are seeing that at all, or are the base dollars truly just flowing through nicely?

Ward Nye: I think we'd be naive to assume that degrees of inflation haven't eaten into that. When we go back over time, as I've said before, whatever the volume that people thought would come out of IIJA the year it was signed into law, have we seen some of that being eroded by inflation? Yes, I think so. But at the end of the day, very selfishly, from a Martin Marietta perspective, would we trade the volume that we see for the pricing that we're seeing? The answer is yes. But I think part of what's so important to keep in mind, too, is I don't think IIJA is a one-hit wonder.

Speaker Change: I think we'd be naive to assume that degrees of inflation haven't eaten into that. And so, when we went back over time, I've said before, if whatever the volume that people thought would come out of IIJA the year it was signed into law.

Speaker Change: Have you seen some of that being eroded by inflation? Yeah, I think so.

Speaker Change: But at the end of the day...

Jim: Very selfishly from a Mark Marietta perspective, would we trade the volume that we see for the pricing that we're seeing? The answer is yes.

Jim: I think part of what's so important to keep in mind, too...

Ward Nye: In other words, I think we have simply changed the floor in the way that the United States Congress and the government will continue to invest in infrastructure because, keep in mind, we went a decade and a half with woefully underfunded infrastructure. I think, in many respects, yes, some degree of volume has been taken out simply because of inflation. At the same time, I believe when we see a reauthorization of this act, we're likely to see something at or above where this is, and again, it'll provide a nice extended period of time for the United States to invest in this much-needed infrastructure.

Speaker Change: I don't think IIJA is a one-hit wonder. In other words...

Jerry Revich: Is there any way you can kind of help us kind of bridge back these kind of expectations for these in markets relative to kind of what you are looking for. Sure happy to try and look that's a great question so if we think through it I'll actually work from the bottom up so we were previously in res we were saying what res was going to be down low single digits to mid single digits so now as we see it.

Speaker Change: I think we simply changed the floor.

Speaker Change: in the way that united ates congress in the government will continue to invest in infrastructure because keep in mind

Speaker Change: We went a decade and a half with...

Speaker Change: wofully underfunded infrastructure so i think in many respects yes some degree of volume has been taken out simply because of inflation at the same time i believe when we see a reauthorization of this act we're likely to see something at or above where this is

Jerry Revich: Look we think it's going to be a mid so we've gone to the lower end of the original guide if you see what I mean relative to res if we're looking at non res we previously said look that's going to be down mid single digits to high so we've really taken the same view on that that we have relative to res we said that's going to be down high single digits not because we think heavy is not going to be good I think heavy is going to be increasingly good these are going to be big jobs is going to take a little bit of time. But really what we've done is excuse me we've looked at the public side of it we said we thought public would be a mid single digits to high single digits we actually think that's now going to be modestly down and it's more of a timing issue than anything else because part of what we're assuming is let's assume we're going to have a relatively normal weather calendar year this year.

Speaker Change: and again will provide a nice extended period of time for the united states to invest in this much needed infrastructure

Ward Nye: At the same time, it will allow us to make sure that we're getting the appropriate return for our very valuable materials that are in the ground and that we work hard to turn into a spec product. That's the way that we think about it. There's nothing, per se, new in that, but I think it's important to be able to articulate that to the investing public because, from our perspective, it works. Thanks. Thank you. Your next question comes from the line of Keith Hughes.

Speaker Change: At the same time, it will allow us to make sure that we're getting the appropriate return

Speaker Change: For our very valuable materials that are in the ground, and that we work hard to turn into a spec product. So, that's the way that we think about it. There's nothing per se new in that, but I think it's important to be able to articulate that to the investing public. Because I think from our perspective it works.

Speaker Change: Now that makes sense. Thanks.

Operator: Your next question comes from the line of Keith Hughes of Truist. Your line is now open. Please ask your question.

Operator: Your next question comes from the line of Keith Hughes of Truist. Your line is now open. Please ask your question. Thank you.

Speaker Change: Thank you.

Operator: Your next question comes from the line of Keith Hughes of Truist. Your line is now open. Please ask your question.

Jerry Revich: And if we go to businesses like the central division you know once we get toward late October. Frankly you're rolling the dice a little bit on whether you're going to have a good business there won't be frozen weather of impacted in November and December so now we pull back a bit on infrastructure and again that's not worth. So we're trying to go away it's going to be work that's going to be pushed into 2025 and for a lot of reasons we're perfectly okay with that but relative to the guide and relative to the end uses I hope that puts the specificity around it that will be helpful to you.

Keith Hughes: Thank you. Questions back in CEMENT. To your point, tremendous pricing. It's the best pricing increase I've seen during this earnings season from CEMENT. Now that Midlothian is back to sold out, is there going to be further increases this calendar year or is it something we'll have to contemplate for next year?

Operator: You know, look, we've certainly told the market that we are looking to have another dialogue in September. Obviously, it's not yet September, so we'll have to see how that goes, Keith.

Operator: You know it look we've certainly told the market that we are looking to have another dialogue in September Obviously, it's not yet September . So so we'll have to see how that goes Keith but again, I there are a lot of different cement markets across the United States and

Ward Nye: But again, there are a lot of different cement markets across the United States. Dallas is a really good cement market, and obviously, Dallas had a strange market in Q2 simply because it was wet. But, you know, when Martin Marietta was buying TXI back in 2014 and 2015, I remember very clearly what I said to our board of directors at the time, and that was, I felt like Dallas-Fort Worth might well be the single most attractive heavy side building materials market in the United States for the next 25 years.

Speaker Change: Dallas is a really good cement market and obviously Dallas had a strange market in Q2 simply because it was wet.

Ward Nye: Yeah absolutely that was that was perfectly helpful just one last one if I could sneak one in I think you mentioned that the integration of of blue water and our prime zones are complete and it sounds like they're performing at least as good as your expectations of not better if you can maybe go a little bit more comments about kind of where you're seeing the outside benefits or where they're exceeding expectations and also I'm just on the pipeline you know I mean you just clear. They look completed to deals this year one pretty big one do you think we should what's the pipeline look like and do you think we should be looking for more kind of tuck in deals given that recent MNA activity you've been doing or you know could there still be the potential for some chunky deals out there for you guys.

Operator: But...

Speaker Change: You know, when Martin Marietta was buying TXI back in 2014 and 2015, I remember very clearly...

Speaker Change: What I said to our board of directors at the time, and that was...

Speaker Change: I felt like Dallas-Fort Worth might well be the single most attractive heavy-side building materials market.

Ward Nye: It has not disappointed, so have we told our customers that we're going to have a dialogue in September? Yes. Am I ready to tell you what that's going to look like? The answer is no, but in any event, to your point, as I've watched public data come out, I concur with your conclusion. I haven't seen a market that has reacted more attractively than DFW has on pricing on a percentage basis. Thank you, Keith.

Speaker Change: in the United States for the next 25 years. It has not disappointed, so...

Operator: um

Speaker Change: Have we told our customers that we're going to have a dialogue in September ? Yes.

Speaker Change: Am I ready to tell you what that's going to look like? The answer is no, but in any event, to your point, as I've watched public data come out, I concur with your conclusion. I haven't seen a market that has reacted more attractively than DFW has on pricing on a percentage basis.

Ward Nye: Great questions, Christy. Thank you for all of that. So we'll start with both Bluewater and Al Fry relative to integration. So you're right. I mean, from our perspective, those integrations are done. They have been tucked in. Their pure bolt-ons, our integration process, is extraordinarily efficient. And we discussed that before. We typically integrate the back-off systems and processes and onboard people, literally, over the course of a weekend. So our intention is typically to close on Friday.

Keith Hughes: Thank you, Keith.

Speaker Change: Okay, thank you. Thank you, Keith.

Operator: Your next question comes from the line of Adam Thalhimer of Thompson & Davis. Please ask your question. Good morning, guys. I am. Good morning.

Operator: Your next question comes from the line of Adam Thalhimer of Thompson & Davis. Please ask your question. Morning, guys. Hi Adam.

Operator: Your next question comes from the line of Adam Thalhimer of Thompson & Davis. Please ask your question.

Operator: Morning guys. Hi Adam. Share repurchases. That was a really heavy pace in the first half of the year. Curious how we should read that and with the outlet.

Ward Nye: And do a lot of training over the course of the weekend, open Monday, and have people going over our scales, getting Martin Marietta tickets, and having them in our systems. And that's exactly what happened. So as we think about what's happening with those businesses now, operationally, they're performing really very well. Number one. Number two, these are folks who know that they've got a forever home right now. I mean, we're in aggregates like business.

Ward Nye: Yeah, well, simply, there are a couple things that go into that. One is we were well below our target leverage ratio. And we had entered the year with, or the quarter with, over $2 billion in cash on the balance sheet. So, that was part of it, but of course, we thought the stock price was an attractive level as well. We thought it was undervalued.

Speaker Change: Yeah, well, simply, you know, there's a couple things that go into that. One is we were well below our target leverage ratio.

Adam Thalhimer: We had entered the quarter with over $2 billion in cash on the balance sheet. That was part of it. Of course, we thought the stock price was an attractive level as well. We thought it was undervalued. Really, it's as simple as that. We're pretty opportunistic about our stock buybacks. We try to avoid a lazy balance sheet at the same time. Those things just coalesced this quarter. Thanks, Jeff

Adam Thalhimer: And we had entered the quarter with over $2 billion in cash on the balance sheet. So that was part of it, but of course we thought the stock price was an attractive level as well.

Jim Nickolas: So, that's really, it's as simple as that. We're pretty opportunistic about our stock buybacks and try to avoid a lazy balance sheet at the same time, and those things just coalesced this quarter.

Adam Thalhimer: Undervalued so that's really it's as simple as that. We're pretty opportunistic about our stock buyback Try to avoid a lazy balance sheet at the same time and those things just coalesce this quarter

Jim Nickolas: Thank you, Adam. Your next question comes from the line of Phil Ng of Jeff. Asher,

Ward Nye: They're delighted to be a part of Martin Marietta. Number three, their safety numbers have been extraordinary. I mentioned in my opening commentary that from an incident-rape perspective, this was the safest quarter that Martin Marietta has ever had. And to be able to say that, after we've done the degree of acquisitions that we've done, in my view, is pretty extraordinary. Now, if we think about what continued synergy realization is going to look like, several things.

Adam Thalhimer: exton

Operator: Your next question comes from the line of Phil Ng of Jeff. Please ask your question. Hey, good morning. This is actually a call-in question for Phil. Thank you for taking the question. Uh-huh

Jeff: Thank you, Adam.

Speaker Change: Your next question comes from the line of Phil Ng of Jeffries. Please ask your question.

Adam Thalhimer: Hey, good morning. This is actually a call-in on for Phil. Thank you for taking the question.

Speaker Change: I just wanted to ask about the Aggregates Volume Guide. What is baked into the Aggregates 1-4% decline from an organic perspective, and how are you thinking about those organic trends in the back half of the year here, just given the wet start to the third quarter, and maybe some of the softer trends that you're seeing in the warehouse, office, and resi markets that you called out?

Ward Nye: Number one, we will continue to invest responsibly in these businesses and fix plant, rolling stock, et cetera. And we think that will continue to make the businesses more efficient. But equally important, the pricing of those locations is actually notably below a Martin Marietta corporate average. By that, I mean, let's call it four plus dollars a ton. So if I go back to the commentary that we had on targeted mid years, in the fact that they're coming through the way that we would have expected on the acquisitions, that's going to give us continued near term upside on those businesses.

Speaker: Yeah, thanks, Colin. Thanks for the question. We try at this point, now that those operations are really fully integrated, I wanted to break some out for the quarter because we were going through the integration process, but now that they're fully integrated, we just think about it candidly at this point as all organic going forward. I mean, it clearly gave...

Operator: Yeah, thanks, Collin. Thanks for the question.

Speaker: Yeah, thanks Colin, thanks for the question. We try at this point now that those operations are really fully integrated, I wanted to break some out for the quarter because we were going through the integration process, but now that they're fully integrated we just think about it candidly at this point as all organic going forward. I mean it clearly I gave

Ward Nye: We try at this point now that those operations are really fully integrated. I wanted to break some out for the quarter because we were going through the integration process, but now that they're fully integrated, we just think about it candidly at this point as all organic going forward. I mean, it clearly gave...

Ward Nye: I thought it was helpful color relative to end uses and what we thought the shifts were going to be relative to up, down, sideways, etc. But again, if we're looking at the second half of the year on infrastructure, we think it's going to be a busy second half of the year. At the same time, the biggest things that we're trying to get our heads around are what we're navigating right now and what will be the fallout from, as I said, a wet July and what has so far been a wet August with a hurricane making its way literally from somewhere between Myrtle Beach and Charleston right now, eventually up through the Greensboro High Point area.

Speaker: I thought it was helpful color relative to end uses and what we thought the shifts were going to be relative to up, down, sideways, etc. But again, if we're looking at the second half of the year on infrastructure, we think it's going to be a busy second half of the year. At the same time, the biggest things that we're trying to get our heads around are what we're navigating right now and what will be the fallout from, as I said, a wet July and what has so far been a wet August with a hurricane making its way literally from somewhere between Myrtle Beach and Charleston right now, eventually up through the Greensboro High Point area.

Speaker: Some, I thought, helpful color relative to end uses and what we thought, you know, the shifts are going to be relative to up, down, sideways, etc.

Ward Nye: We think that's likely to persist for a number of years. And that's, operationally, they will continue to get better for a while. So we think there's going to be goodness that's going to be coming to us from Bluewater, from the Everfrying Suns. And by the way, from the continued acquisitions in California and Arizona for a while yet. Now, that leads into the second part of your question.

Speaker: But again, if we're looking at the second half of the year on infrastructure, we think it's going to be a busy second half of the year. At the same time, you know, the biggest things that we're trying to get our heads around is what we're navigating right now.

Speaker: And what will be the fallout from, as I said, a wet July , and what has so far been a wet August .

Ward Nye: That is, what does the pipeline look like? And the pipeline continues to look attractive. The pipeline continues to be almost entirely pure aggregates businesses. And they tend to be a bit of a blend of what you said. Some of them have a little bit of chalkiness to them. A lot of them are nice, tuck away transactions. We hope we'll have more for you on some of that as the year goes on.

Speaker: with a hurricane making its way literally from somewhere between Myrtle Beach and Charleston right now.

Ward Nye: So those are more the swing factors in the near term and then the longer term this year, to the extent there can be longer-term this year. It's really going to be more driven by when winter sets in and what its effects may be in certain markets. I can remember years when we were doing asphalt and paving in Colorado in December. That doesn't happen very often, but it does happen.

Speaker: So those are more the swing factors in the near term and then the longer term this year, to the extent there can be longer-term this year. It's really going to be more driven by when winter sets in and what its effects may be in certain markets. I can remember years when we were doing asphalt and paving in Colorado in December. That doesn't happen very often, but it does happen.

Speaker: eventually up through...

Speaker: The Greensboro High Point area, so...

Speaker: Those are more the swing factors in the near term.

Speaker: And in the longer term this year, to the extent there can be longer term this year, it's really going to be more driven by when winter sets in and what the effects of that may be in certain markets. Look, I can remember years...

Ward Nye: As you know, between what's gone in and what's gone out this year, we've done well over four billion dollars with the transactions. But if we're sitting in a net leverage of two times as of June 30th, as you know, that gives us ample dry powder to continue doing what I think is really a core competency from Mark Marietta. And that is doing M&A and doing it well. M&A is something that's in our DNA and we're very proud of that. So, Trey, thank you for that second question. I hope that cleared some of those items up too. Yeah, great color. Thanks, Ward. That's a lot. Thank you.

Speaker: That we were doing asphalt and paving in Colorado in December. That doesn't happen very often, but it does happen

Ward Nye: And those will be your swing factors, really, as we think about volumes, but more granularly as we think about infrastructure. Great, that's helpful. And just one follow-up question, I guess, if we see some more accommodating monetary policy here in the back later this year, how quickly do you think that starts to show up in your shift? I think it starts to show up reasonably early in 2025, because I do think in portions of private, particularly in home building, etc., you've got to pin up demand.

Speaker: And those will be your swing factors, really, as we think about volumes, but more granularly as we think about infrastructure.

Speaker: Great, that's helpful. And just one follow-up question, I guess, if we see some more accommodating monetary policy here in the back later this year, how quickly do you think that starts to show up in your shift? I think it starts to show up reasonably early in 2025 because I do think in certain areas of private housing, particularly in home building, etc., you've got to pin up demand. It's interesting, as we have people looking to move to Raleigh, one of the issues that they chronically run into, and by the way, I'm using Raleigh as an example, but we could go across our footprint and say the same thing. The inventory is just really, very low, and frankly, from our perspective, that's a pretty serious problem, Colin.

Colin: Great, that's helpful. And just one follow-up question, I guess, if we see some more accommodating monetary policy here in the back later this year, how quickly do you think that starts to show up in your shipments?

Speaker: I think it starts to show up...

Speaker: Recently early in 2025, because I do think in portions of private, particularly in home building, etc., you've got to pin up demand, and it's interesting, as we have people looking to move to Raleigh, one of the issues that they...

Jerry Revich: Your next question comes from the line of Jerry Revedge from Goldman Sachs. Your line is now open. Please ask your... Yes, hi, good morning, everyone. Good morning, Jerry. If I can just ask you conceptually, right? This year, you folks had excellent pricing based on the volumes that we're seeing from everyone across the board. You haven't had to see the market share to get this level of pricing. We're seeing stubborn inflation across repair and maintenance and elsewhere.

Ward Nye: It's interesting, as we have people looking to move to Raleigh, one of the issues that they chronically run into, and by the way, I'm using Raleigh as an example, but we could go across our footprint and say the same thing. The inventory is just really, very low, and, frankly, from our perspective, that's a pretty high-class problem, Collin.

Speaker: Chronically run into and by the way, I'm using Raleigh as an example, but we could go across our footprint and say the same thing

Speaker: The inventory is just really very low.

Ward Nye: Is it tough for people moving to the area because they can't find the home that they want? Yes. Does that mean, however, that once you have that more accommodating policy, you're going to see homebuilders moving, we think with alacrity, to fill what's a needed hole right now? We think that's the case. And that tends to be, particularly if they've made the investment in land, which in many instances they have, that they can move relatively quickly, and keep in mind, a portion of what we're going to call residential will be those streets, it will be that curb and gutter, it will be the sidewalks, it will be the utilities, until those subdivisions are turned over to the local municipality for maintenance.

Speaker: Is it tougher for people moving to the area because they can't find the home that they want? Yes. Does that mean, however, that once you have that more accommodating policy, you're going to see home builders moving, we think with alacrity, to fill what's a needed hole right now? We think that's the case, and that tends to be, particularly if they've made the investment in land, which in many instances they have, that they can move relatively quickly?

Speaker: Frankly, from our perspective, that's a pretty high-class problem, Colin. Is it tough for people moving to the area because they can't find a home that they want? Yes. Does it mean, however...

Jerry Revich: How does that impact how you're thinking about 25? Obviously, we can't count on a volume ramp back up. So I'm wondering based on what you're seeing and the resuppivity of price increases inflation. I guess what are the prospects for potential double digit pricing year again in 25 based on everything you've seen here today? You know what, obviously, we'll give you more of a definitive guide on that as we go into next year.

Speaker: That once you have that more accommodating policy, that you're going to see homebuilders moving, we think, with alacrity.

Speaker: To fill what's a needed hole right now, we think that's the case.

Speaker: And that tends to be particularly if they've made the investment in land, which in many instances they have.

Speaker: Keep in mind, a portion of what we're going to call residential will be those streets. It will be that curb and gutter. It will be the sidewalks. It will be the utilities until those subdivisions are turned over to the local municipality for maintenance.

Speaker: that they can move relatively quickly. And keep in mind a portion of what we're going to caption as residential will be those streets. It will be that curb and gutter. It will be the sidewalks. It will be the utilities until those subdivisions are turned over to the local municipality for maintenance.

Jerry Revich: But Jerry, as I think about the building blocks for what we have, I think infrastructure is going to stay very attractive. I think housing in our markets has more than found bottom. I think that's going to get attractive. I think heavy non-res is and is going to stay attractive as I indicated in the commentary. I think the lag we've typically seen between non-res on the light side and res is going to be abbreviated.

Speaker: So will we see it on the RESi side? I think so. Does that mean you're gonna see light non-res come behind it in that more abbreviated period? I think so. And all that underlies what we think will be a continuing attractive infrastructure setting. So again, I hope that's helpful, and Bed Collar. Your next question comes from the line of David MacGregor of Longbow Research. Please ask your question.

Ward Nye: So will we see it on the Resi side? I think so. Does that mean you're gonna see light non-res come behind it in that more abbreviated period? I think so. And all that underlies what we think will be a continuing attractive infrastructure setting. So again, I hope that's all. Thank you for the call, and Ben Collin. Your next question comes from the line of David MacGregor of Longbow Research. Please ask your question.

Speaker: So, will we see it on the resi side? I think so. Does that mean you're going to see light non-res come behind it in that more abbreviated period? I think so. And all that underlies what we think will be a continuing attractive infrastructure setting. So, again, I hope that's helpful.

Jerry Revich: I think that sets us up for a really attractive 2025 and beyond relative to pricing. From my perspective, the pricing that you have seen in Martin, Marietta, for 30 years is a public company that I think you would look at and say historically has looked really good, frankly, is seeing a step change. I think the step change is appropriate. But for a number of reasons, and among others is people now are starting to think about this business on what does replacement cost look like for these hugely valuable reserves?

Colin: It is. Thank you for the caller. You bet, Colin.

Speaker Change: Your next question comes from the line of David MacGregor of Longbow Research. Please ask your question.

Speaker: Hey, good morning. This is Joe Nolan. I'm for David.

David Macgregor: You touched on cost briefly, but I was just hoping you could provide an updated cost outlook for the year and discuss some of the moving parts within that. You also mentioned your focus on controlling costs. I guess I was just wondering, what are some of the areas that you can focus on with cost-cutting measures in a softer market?

Jerry Revich: I mean, if we look at the reserves we have today, 70 plus years at current extraction rates is a significant body of reserves at the same time. I don't think that we should be punished for having the discipline and having the vision to make sure that we've got adequate reserves. So does that tell me and does that help inform you that we think pricing will continue to be at what I think will be new levels?

Jim Nickolas: So happy to. Jim, you want to go ahead and take the first tile and come back on where we'll focus.

Speaker: So happy to. Jim, you want to go ahead and take the first panel and come back on where we'll focus. Yeah, yeah. So the...

Jim Nickolas: Yeah. Yeah. The full year guide on cogs per ton, well, second half, rather, to be more precise, is up 7% second half this year versus second half last year. It's reflective of, again, general inflation slowly coming down. There's a little bit of under-absorption in that as well, as volumes come down versus our old view. And the repairs and maintenance costs have remained elevated. However, we've seen some improvement as volumes have come down on contract services.

Speaker: The full year guide on cogs per ton, well, second half rather, to be more precise, is up here, and the repairs and maintenance costs have remained elevated. We've seen some improvement as volumes have come down on contract services. The outsourced services have been reduced lower over time. And, of course, we do have a bit of diesel tailwind built in, so that's helpful too.

Speaker: The full year guide on cogs per ton, well second half rather, to be more precise, is up.

Speaker: 7% second half this year versus second half last year.

Speaker Change: it' reflected of again general inflation slowly coming down there's a little bit of underabsorption in that as well as the volumes come down vers their old our old view

Jerry Revich: And probably in that zip code of what you're talking about, I think the answer is, yeah, it probably will. And again, we'll come back with more definitiveness on that in February, but I would not encourage you to think about it materially differently. It's super. And it can ask Jim in terms of the midpoint of the aggregates gross profit and top line parameters, it looks like on a year basis, you're guiding to about two points of gross margin expansion, back up 24 versus back up 23, which is better than the first half.

Speaker: The repairs and maintenance costs have remained elevated. We've seen some improvement as volumes have come down on contract services. The outsourced services have been reduced over time. And, of course, we do have a bit of diesel tailwind built in, so that's helpful too.

Jim Nickolas: The outsourced services have been reduced, and lower overtime has been added. And, of course, we do have a bit of diesel tailwind built in, so that's helpful, too. I think Jim really hit the nail on the head, A, what the percentages look like, and B, what the emphasis is going to be. Obviously, we're going to be focused on maintenance and repairs because we've seen those go up disproportionately, but we're also seeing general inflation come down. We are seeing some nice tailwinds coming from areas of energy.

Speaker: I think Jim really hit very, very nicely.

Speaker Change: A, what the percentages look like, B, what the emphasis is going to be. Obviously, we're going to be focused on maintenance and repairs because we've seen those up disproportionately, but we're also seeing general inflation come down. We are seeing some nice tailwinds coming from portions.

Jerry Revich: Is that right? And can you unpack the drivers behind that? If that's the case, how much of that is the mid years in Tennessee and California, et cetera, that's driving the acceleration in that look? Yeah, you're right. Those ballpark numbers are correct. The star of the show, as always, has been growing ASP. So that's flowing through in the second half of the year. That's the primary metric that's driving that improved margin, Jerry.

Jim Nickolas: It's been a bit of a fabricated situation, though, because we've seen diesel clearly better. up. But, again, managing our hours, managing our overtime, keeping our people safe will be areas that we will have a unique focus, as we always do, in the second half of the year, but I think you will see a better trend on repairs in particular.

Speaker Change: energy it's been a bit of a fabricated situation though because we've seen diesel clearly better we've seen electric modestly up but again managing our hours managing our overtime keeping our people safe

Jerry Revich: Secondary impact is, as I mentioned in prior calls, inflation is abating, it's moderating as the year goes on. So the cost pressures are by and large coming back down, not to where they were pre-COVID, of course, but five to six percentage points on baseline cost inflation. So those two things are the main driver. Thank you, Jerry.

Speaker: will be areas that we will have a unique focus, as we always do, in the second half of the year. But I think you will see a better trend on repairs in particular.

Speaker Change: Great, thanks for taking my question. You best. Good to talk to you, Jeff.

Operator: Your next question comes from the line of Tyler Brown of Raymond James. Please ask your question.

Speaker Change: Your next question comes from the line of Tyler Brown of Raymond James. Please ask your question.

Operator: Hey, good morning. Hey, Warren. Hi, Tyler.

Ward Nye: Yeah, hey, you talked a little bit about this earlier, but if I'm not mistaken, in conjunction with Blue Water, there was a notice of a July 15th mid-year. I believe you had already communicated mid-years out west early in the year, so I'm just curious, though. Yeah. When you look at the portfolio, just how close are prices out west and in those recently acquired operations to being harmonized with your heritage markets, because I assume your heritage markets are also increasing in price, so do you feel like there's still some catch-up work there, and why wouldn't this be a sizable tailwind of pricing over the next few years, just as you harmonize that whole portfolio?

Speaker Change: Hey, good morning. Hey, Warren, you talked a little bit about this earlier, but if I'm not mistaken, in conjunction with Blue Water, there was a notice of a July 15th mid-year. I believe you had already communicated mid-years out west.

Anthony Pettinari: Your next question comes from the line of Anthony Pettinari of City. Please ask your question.

Anthony Pettinari: Good morning. Hey, could you talk a little bit more about maybe state funding environments as you think about, you know, next 12 months in fiscal 25? I think there was some data that suggested, you know, general fund spending for the states could be down in fiscal 25, you know, after a number of years of very strong growth. Obviously, that's not one-to-one to DOT spending, but I just wonder if you could kind of walk through the states and where you're maybe the most excited and seeing some growth versus which could be lighter, kind of as you think about next 12 months.

Speaker Change: I'm just curious though, when you look at the portfolio, just how close are prices out west in those recently acquired operations?

Speaker Change: to being harmonized to your heritage markets, because I assume your heritage markets are also price increasing. So do you feel like there's still some catch-up work there and why wouldn't this be a sizable tailwind to pricing over the next few years, just as you harmonize that whole portfolio?

Ward Nye: So Tyler, thank you for the question. So I would say two things. One, we are getting closer; we are getting ever closer to harmony in the Western U.S., so pretty soon, you can start humming that music.

Speaker Change: So, Tyler, thank you for the question. So, I would say two things. One, we are getting closer. We are getting ever closer to harmony in the Western U.S. So, pretty soon you can start humming that music. I think that's going to be there. But here's the other thought that I would have for you.

Anthony Pettinari: No, thank you for the question. I appreciate it very much. So let's, let's, let's just mark two marks together. So look, if we're looking at Texas DOT litings for FY 24 litings, forecast of 13.7, you know, that's up 17% from the year before, but equally, you know, if we're looking to see where they are next year, again, they're looking to be up over that next year. If I'm looking at Colorado, you know, they passed a $5.3 billion 10-year infrastructure bill.

Ward Nye: I think that's going to be there. But here's the other thought that I would have for you. I'm not sure we're looking for harmony in the West. I think the West ought to be a price leader because, as we look at... The West Coast businesses should never, in my view, have been businesses priced below a Martin Marietta heritage number.

Speaker Change: I'm not sure we're looking for harmony in the West. I think the West ought to be a price leader because as we look at

Speaker Change: The cost of doing business in California, as we look at barriers to entry in California, just a host of things. You know, the West Coast businesses should never, in my view, have been businesses priced below a Martin Marietta Heritage number.

Anthony Pettinari: And that basically ensures consistent stream of DOT funding beginning in 2023, and that's going to go on for several years. You know, we expect even going into 25 that Colorado DOT is going to have at least $3.7 billion available to spend, and that's going to be a really attractive budget. If we're looking here in a backyard in North Carolina, you know, we expect their budget to increase to $7.6 billion for FY 25.

Ward Nye: I think there should be a premium associated with businesses in that geography because you get, at times, some premium costs associated with that geography. To the rest of your question, should there be recovery in places like Tennessee and elsewhere as we continue to go through the synergy realization process of the Bluewater operations, the answer is yes. There should be.

Speaker Change: and and I think there should be a premium associated with businesses in that geography because you get at times some premium costs associated with that geography.

Speaker Change: Now, to the rest of your question, should there be recovery in places like Tennessee and elsewhere as we continue?

Speaker Change: to go through the synergy realization process of a blue water operation? The answer is yes, there should be.

Anthony Pettinari: Again, that's an increase over prior year. And part of what's notable there, keep in mind, North Carolina started looking at different ways to fund their infrastructure a few years ago, and from 2025 thereafter, they're going to be using sales taxes at about 6% to fund infrastructure work here in North Carolina. That's going to make a nice difference. Equally, if we look at Georgia, they're 25 budget of $4.2 billion. That's a 7% increase over where it was in 24.

Ward Nye: As I indicated in some of my earlier commentary, there's over a $4 a ton delta right now between the average in those locations and Heritage Martin Marietta. To your point, should there be an extended period of goodness in that, the answer is yes because, obviously, the heritage footprint or price profile will continue to go up as we continue to move up at the Bluewater operations as well and get those closer to that harmony point that we spoke of before. It doesn't make a lot of sense to me as I look at our portfolio that North Carolina, Georgia, and Tennessee would or should look materially different. That's where we're endeavoring to take it.

Speaker: And as I indicated, I think in some of my earlier commentary, there's over $4 a ton.

Speaker Change: Delta, right now between the average and those locations.

Speaker Change: and Heritage Mart Marietta. So to your point...

Speaker: Should there be an extended period of goodness in that? The answer is yes, because obviously the heritage footprint or price profile will continue to go up.

Speaker: as we continue to move up at the Blue Water Operations as well and get those closer.

Anthony Pettinari: And this one's interesting to me, even if we look at Florida. Florida's budget, if you look at a top side, looks like it's going down, but that's only because FY 24 had about $2.1 billion of one-time supplements that were in it. So if we're looking at a base budget in Florida of about $15.1 billion, we're looking at what we think is a base in FY 25. Of about 15.5. The punchline is this, if we go and look at our top 10 states, Texas is up.

Speaker Change: to that harmony point that we spoke of before. It doesn't make a lot of sense to me as I look at our portfolio that North Carolina, Georgia, and Tennessee would or should look materially different. And that's where we're endeavoring to take the business.

Operator: Excellent. Okay, thank you. Thank you, Tyler. Your next question comes from the line of Michael Dudas of Vertical Research.

Speaker: Yeah, excellent. Okay, thank you. Thank you, Tyler.

Operator: Your next question comes from the line of Michael Dudas of Vertical Research. Your line is now open. Please ask your question. Good morning, gentlemen and gentlewomen. Good morning.

Speaker Change: Your next question comes from the line of Michael Dudas of Vertical Research. Your line is now open. Please ask your question.

Operator: Your line is now open. Please ask your question. Good morning gentlemen, Jacqueline. Good morning.

Anthony Pettinari: Florida's up from a base budget perspective, North Carolina's up, Indiana's up, Georgia's up, Colorado's up, Arizona's up, and Texas is up. So really, there are two states that are down. One is Minnesota. It's going from 4.5 to about 4. And to put that in some context, Minnesota is going to have a DOT budget next year that's rivaling about where Georgia is. I don't think that's a bad place for Minnesota to be.

Speaker: Excellent. Okay. Thank you. Thank you, Tyler. Good morning, gentlemen, Jacqueline. Good morning.

Speaker: Good morning.

Speaker: Good morning, gentlemen and Jacqueline.

Speaker Change: Good morning.

Speaker: um

Speaker Change: You did notice in the presentation that the magnesia outlook is up.

Speaker Change: for 2024 relative to expectations. So maybe spend a minute on that business, and is there any reads or indications on general economic or business activity that can be helpful to thinking about how that business flows over the next several quarters?

Anthony Pettinari: And California is going to be modestly down. And I think that's simply in keeping with what we've seen more broadly in the California budgeting process. But again, if I look at these top 10 states, it looks awfully attractive to me, but equally when I look at the highway contract awards over a period of time, like if we go back to, let's call it mid-year, 2022 on an LTM basis, and look at where it is this year in June at an LTM basis.

Operator: Timna Tanners, Garik Shmois, Anthony Pettinari, Michael Dudas, James Nickolas, Garik Shmois, Timna Tanners, Garik Shmois, Anthony Pettinari, Michael Dudas, James Nickolas, James Nickolas, Garik Shmois, Number two, they're going about their commercial strategy in a fundamentally different way. That's been a business that historically has had longer-term contracts, and they've been in a position to revisit those contracts, reset them, and make sure that, again, same circumstances, aggregates.

Speaker: Quarters. No, happy to, and it's really a tale of two different businesses there. So if we're looking just at revenue, as Jim said in his comment, they were relatively flat. Now, as we look at that, you know, chemicals up around 7 percent, lime, though, up 24 percent. And what we're seeing is pricing gains from more than offsetting lower chemical shipments, so chemical markets around the world. And keep in mind, this is not just a regional business. This is a business that would cover the U.S., and we have, you know, double-digit international business there as well. So we obviously saw volumes down.

Speaker: No, happy to. And it's really a tale of two different businesses there. So if we're looking just at revenues, as Jim said in his comments, they were relatively flat. Now, as we look at that, you know...

Speaker: Chemicals up around 7%.

Speaker: Lime, though, up 24%. And what we're seeing is pricing gains are more than offsetting lower chemical shipments. So chemical markets around the world, and keep in mind, this is not just a regional business, this is a business that...

Anthony Pettinari: It's up 25 percent. And that's the step change that we thought we would see on contract awards. And again, part of SOAR that Jim referenced in his comments dictated where we wanted to be, and one of the places we wanted to be, were places that had good, long, durable DOT budgets, and had people moving those states so they would have the imperative to continue to invest. And as we look at how those state DOT budgets booked today, and how they're going to look more importantly to your question tomorrow, we have a lot of confidence about that and have a very attractive outlook as we contemplate it. So, Anthony, I hope that's helpful.

Angel Castillo: No, that's extremely helpful. I'll turn it over.

Angel Castillo: Thank you.

Speaker: We cover the U.S. and we have, you know, double-digit international business there as well. So we obviously saw volumes down. We saw pricing up. So you're seeing a lot of the same dynamics in the in the magnesia specialties business.

Speaker: We saw pricing go up. So you're seeing a lot of the same dynamics in the magnesia specialties business that we're seeing overall in the aggregates business as well. Part of what I'm pleased with is that steel utilization levels are remaining just above the 70 percent historical average. That's not a terribly high number.

Speaker: that we're seeing overall in the aggregates business as well. Part of what I'm pleased with is steel utilization levels are remaining just above the 70% historical average. That's not a terribly high number.

Speaker: And what our team has been able to do there is several-fold. One, we control costs really well. Number two, they're going about their commercial strategy in a fundamentally different way. That's been a business that historically has had longer-term contracts, and they've been in a position to revisit those contracts, reset them, and make sure that, again, the same circumstances as aggregates. We've got long-lived reserves at our facility in Woodville, Ohio. We also have long-lived brine reserves in Manistee, Michigan.

Speaker: And what our team has been able to do there is several fold. One, control costs really well.

Speaker: Number two...

Speaker: They're going about their commercial strategy in a fundamentally different way. That's been a business that historically has had longer-term contracts, and they've been in a position to revisit those contracts, reset them, and make sure that, again, same circumstances, aggregates.

Ward Nye: Your next question comes from the line of Angel Castillo of Morgan Stanley. Please ask your question. Good morning, Ward. Thanks for taking that question. Just wanted to drill in a little bit more on the kind of 25 percent of the volume that the client was maybe more related to the price of volume strategy. Could you just talk about, is there any sense for kind of what market that may be occurring more in or some of the competitive dynamics that might be driving that versus kind of a greater or increasing kind of discipline toward price of volume?

Operator: We've got long-lived reserves at our facility in Woodville, Ohio. We also have long-lived brine reserves in Manistee, Michigan. At the same time, we need to be getting good value for them, and Chris Amborski and his team have managed both sides of that business, controlling costs well and controlling pricing really well. And the EBITDA numbers that we're seeing in that business based on the volume of that business. Frankly, it looks fundamentally different today than it would have two or three years ago under the same economic circumstances.

Speaker: We've got long-lived reserves at our facility in Woodville, Ohio. We have long-lived brine reserves in Manistee, Michigan.

Speaker: At the same time, we need to be getting good value for them, and Chris Amborski and his team have managed both sides of that business, controlling costs well and controlling pricing really well, and the EBITDA numbers that we're seeing in that business based on the volume in that business. Frankly, it looks fundamentally different today than it would have two or three years ago under the same economic circumstances.

Speaker: At the same time, we need to be getting good value for those, and Chris Amborski and his team have managed both sides of that business, controlling cost well and controlling pricing really well, and the EBITDA numbers that we're seeing in that business based on the volume in that business.

Ward Nye: You know what it was interesting because I took that same deep dive that you're trying to do intellectually just to make sure that there wasn't some overriding trend or something that we needed to be concerned about or alarmed by, and it wasn't. I mean, as you recognize and we do too, markets in our world tend to be an MSA because the weight to price ratio that I spoke of in the CEO commentary.

Speaker: Frankly, it looks fundamentally different today than it would have two or three years ago under the same economic circumstances. So I'm very pleased with that business. The other thing that I'll say, too, it wasn't part of your question, but I think it underscores the efficiency of the business.

Ward Nye: So I'm very pleased with that business deal. The other thing that I'll say, too, wasn't part of your question, but I think it underscores the efficiency of the business. Their safety numbers have also gotten notably better, and you just see that business going in a direction that we're very pleased with. And what's probably one of the tougher economies that any sector of our business is dealing with, and they're likely to come in with a record EBITDA year this year, and that's the type of performance in this setting that makes us really excited about what Martin Marietta is going to look like in 2025, 2026, 2027, etc.

Speaker: So I'm very pleased with that business deal. The other thing that I'll say, too, wasn't part of your question, but I think it underscores the efficiency of the business. Their safety numbers have also gotten notably better, and you just see that business going in a direction that we're very pleased with. And what's probably one of the tougher economies that any sector of our business is dealing with, and they're likely to come in with a record EBITDA year this year, and that's the type of performance in this setting that makes us really excited about what Martin Marietta is going to look like in 2025, 2026, 2027, etc.

Speaker: their're saty numbers have also gotten notably better and and you just see that business going in into direction that we're very pleased with

Ward Nye: The material often doesn't travel very far and what we see on occasion is somebody can be aggressive. Somebody can be long on any given product. There can be just a whole host of things that can drive different degrees of behavior in different markets. So we're not seeing anything that's overwhelming in any one market that causes us any concern. Obviously, we've stated a preference for value over volume. We believe in that, we see it in the numbers, we believe that it's proving its efficacy and what we're seeing and the financial results. At the same time, we're always going to be thoughtful around, are we pushing too hard on occasion and are we losing too much?

Speaker: in what's probably one of the tougher...

Speaker: economies that any sector of our business is dealing with and and they're likely to come in with a record EBITDA year this year and and that's the type of performance in this setting that makes us really excited about what Martin Marietta is going to look like in 25, 26, 27, etc.

Ward Nye: Excellent. I appreciate that, Ward. Thank you. Your next question comes from the line of Timna Tanners, Wolf Research.

Operator: Excellent. I appreciate that, Ward. Thank you. Your next question comes from the line of Timna Tanners, Wolf Research.

Operator: Excellent. I appreciate that, Ward. Thank you.

Operator: Your next question comes from the line of Timna Tanners, Wolf Research. Your line is now open. Please ask your question. Hey, good morning.

Timna Tanners: Your next question comes from the line of Timna Tanners, Wolf Research. Your line is now open. Please ask your question. Hey, good morning.

Timna Tanners: yeah

Timna Tanners: thank

Timna Tanners: Your next question comes from the line of Timna Tanners, Wolf Research. Your line is now open. Please ask your question.

Timna Tanners: Hey, good morning. One remaining one from us, if I could. You're welcome.

Ward Nye: And so it's a process we do go through, it's a dialogue that we do have here in this office, but more importantly, we have it with our division presence in VPGMs. So there's no one area that if I were you, I would look at and have any concern about, obviously, I don't want to talk about specific markets per se. It was really more of a weather event than anything else, degrees of softening, and then here or there on pricing. But Angela, that's the best way that I can guide you to think about it right now.

Timna Tanners: Good morning. So I wanted to touch on the comments you had earlier about interest rates. And I wanted to ask something similar, but about the election, because we are hearing that there's some pause in activity around the election. And so curious about that, but also if you could dive into maybe any risk to some of the IRA-related projects, especially as they relate to EB demand and given the potential outcome of the election. Thank you.

Ward Nye: That's very helpful. Thank you.

Speaker: Timna, thank you so much. What we're not seeing, I don't think we're seeing a real slowdown in public transport relative to the election. So I think that just chugs along. I think that can have an effect on private equity, and I think that's probably some of what we've seen in the first half of this year. So I think that's probably just more of the same, relative to the public and what that could look like on IIJA reauthorization or the Inflation Reduction Act or otherwise. Yeah, I would say several things.

Ward Nye: Timna, thank you so much. What we're not seeing, I don't think we're seeing a real slowdown in public opinion relative to the election, so I think that just chugs along. I think that can have an effect on private, and I think that's probably some of what we've seen in the first half of this year, so I think that's probably just more of the same. Relative to private and what that could look like on IIJA reauthorization or the Inflation Reduction Act or otherwise, I would say several things. One, I think we're relatively agnostic, and here's why, Timna.

Speaker: So, Timna, thank you so much. You know, what we're not seeing, I don't think we're seeing real slowdown on public relative to the election, so I think that just chugs along. I think that can have an effect on private and I think that's probably some of what we've seen in the first half of this year, so I think that's probably just more of the same.

Ward Nye: Yes, of course, and maybe just to follow up on this and my business, you talked about that returning kind of being costiful, sold out in the quarter or I guess so. I'll do a couple of things. One, I'll ask Jim to speak to the Capitol Project that we have underway, and he can give you a bit more on that, and the 450,000 tons, so we'll be added through that, because we'll be thoughtful around the way that we do it.

Speaker: Relative to public and what that could look like on IIJA reauthorization or the Inflation Reduction Act or otherwise, I would say several things.

Speaker: One, I think we're relatively agnostic, and here's why, Timna. Look, I think if you have a democratic administration that's in power this next time, my guess is IIJA looks pretty similar on a reauthorization basis, and then you continue to see things like the Inflation Reduction Act. I think if you had a Republican administration, honestly, you probably would have a more amped-up infrastructure law and probably less IRA. And again, from our perspective... They're probably almost awash.

Speaker: I think we're relatively agnostic and and here's why, Timna. Look, I think if you have a Democratic administration that's in power this next time, my guess is IIJA looks

Ward Nye: Look, I think if you have a Democratic administration that's in power this next time, my guess is IIJA looks pretty similar on a reauthorization basis, and then you continue to see things like the Inflation Reduction Act. I think if you have a Republican administration, honestly, you probably have a more amped-up infrastructure law and probably less IRA. And again, from our perspective, they're probably almost awash

Speaker: Pretty similar on a reauthorization basis and then you continue to see things like the Inflation Reduction Act

Ward Nye: But obviously, if we're just looking at what happened relative to the weather in DFW, that was the driver, pure and simply. I mean, that took organic shipments down about 18%, but again, pricing was up 9.5. And part of what we saw in that business is we actually saw gross margins expand in that business, and that's one reason that we speak to what we've long called strategic cement. It's where we're in aggregates leader, where the markets naturally vertically integrated, where we have a downstream business, and we do in Dallas, that takes about 30% of what we're doing there.

Speaker: I think if you have a Republican administration, honestly, you probably have a more amped-up infrastructure law and probably less IRA. And again, from our perspective...

Speaker: And again, if we're looking at where the big investments are going to be made in highways, bridges, roads, and streets, it's going to follow where people are. It's going to be driven by what's happening with DOT budgets, and it's going to be driven by what happens at the ballot box, where most of these places that are seeing big population trends continue to pass initiatives at well over 80% rates of passage, and we think that's going to endure. Frankly, if we've looked at the last several elections and you look at what's passed... Almost half of it tends to be in text form.

Ward Nye: And again, if we're looking at where the big investments are going to be made in highways, bridges, roads, and streets, it's going to follow where people are. It's going to be driven by what's happening with DOT budgets, and it's going to be driven by what happens at the ballot box, where most of these places that are seeing big population trends continue to pass initiatives at well over 80% rates of passage, and we think that's going to endure. Frankly, if we've looked at the last several elections and you look at what's passed... Almost half of it tends to be in text form.

Speaker: They're probably almost awash, and again if we're looking at where the big investment is going to be made in highways, bridges, roads, and streets, it's going to follow where people are, it's going to be driven by what's happening with DOT budgets, and it's going to be happening driven by what happens at the ballot box.

Speaker: where most of these places that are seeing big population trends continue to pass initiatives at well over 80 percent rates of passage and we think that's going to endure. Frankly if we've looked at the last several elections and you look at what's passed

Ward Nye: And it's ability to be entertained by waterborne imports is really quite minimal. And so if we look at what strategic cement for us is, it's middle of the end. If we look at how the pricing behaved, it behaved well. Despite the fact, excuse me, that organic shipments were down, we still expanded gross margins, which is why we want to invest capital in that market.

Ward Nye: And again, it goes back to building that marketplace that we have in Dallas-Fort Worth and San Antonio and in Houston. And again, relative to what we see going on in energy and otherwise. I think that can move around a little bit depending on whether we have regime change. But if you built your businesses the way that we have, on major commerce corridors... That's where the activity is going to be, whether it's factories, whether it's industrial, whether it's energy or otherwise.

Speaker: Almost half of it tends to be in Texas and again it goes back to building that marketplace that we have in Dallas-Fort Worth and San Antonio and in Houston and and again relative to what what we see going on in energy and otherwise

Speaker: And again, relative to what we see going on in energy and otherwise, I think that can move around a little bit depending on whether we have regime change. But if you've built your businesses the way that we have on the major commerce card, that's where the activity is going to be, whether it's factories, whether it's industrial, whether it's energy or otherwise. And that's why the positions we have along the I-95 corridor, the I-25 corridor, the I-35 corridor, and the I-5 corridor are so important to us.

Jim Nickolas: And for that, let me turn to Jim, and he can give you a sense of where we are in that process, and how we think about body. Yeah, so that's that project, the finish mill seven, as we call it, will be completed this quarter. As you know, it's 450,000 tons per year annual production capacity, so give or take 110,000 per quarter. We won't hit the market with that full speed on day one.

Speaker: I think that can move around a little bit depending on whether we have regime change but if you built your businesses the way that we have on major commerce corridors

Speaker: That's where the activity is going to be, whether it's factories, whether it's industrial, whether it's energy or otherwise.

Ward Nye: And that's why the positions we have along the I-85 corridor, the I-95 corridor, the I-25 corridor, the I-35 corridor, and the I-5 corridor are so important to us. And keep in mind, Timna... We're the largest shipper of crushed stone on the railroads for a reason. We're the largest shipper of stone on BNUP, number one on CSX, number two on Norfolk Southern, and now number one on the Canadians after they bought Kansas City Southern.

Speaker: And that's why the positions we have along the I-95 corridor, the I-95 corridor, the I-25 corridor, the I-35 corridor, and the I-5 corridor are so important to us. And keep in mind, Timna...

Jim Nickolas: We'll be responsible about feathering in those volumes to ensure we don't disrupt the commercial strategy we've been following in that marketplace. So more to come on when that comes out, but that will be helpful to us, a in terms of volume, but also more importantly, operational flexibility, wait time for customers, storage facilities, our ability to react to different events is enhanced as a result of this project. So we're looking for this to improve margins going forward, and of course volumes as those become available to us.

Speaker: And keep in mind, Timna... We're the largest shipper of crushed stone on the railroads for a reason. We're the largest shipper of stone on BNUP, number one on CSX, number two on Norfolk Southern, and now number one on the Canadians after they bought Kansas City Southern. And to the extent that this industrial build-out continues on either commerce by truck or commerce by rail, we're going to be well-suited to that. And I think that's why, from an election perspective, we're relatively agnostic and think we're going to be good either way, and we love that durability.

Speaker: We're the largest shipper of crushed stone on the railroads for a reason. We're the largest shipper of stone on BNUP, number one on CSX, number two on Norfolk Southern, and now number one on the Canadians after they bought the Kansas City Southern.

Ward Nye: And to the extent that this industrial build-out continues on either commerce by truck or commerce by rail, we're going to be well-suited to that. And I think that's why, from an election perspective, we're relatively agnostic and think we're going to be good either way, and we love that durability.

Speaker: And to the extent that this industrial build-out continues on either commerce by truck or commerce by rail, we're going to be well-suited by that.

Jim Nickolas: And for the last part of your question was what we see happening volumes here as quarter ended, and I think we indicated as whether it got better and down for worth, we were back to near sold out conditions at middle of the end. So I think that puts a vote around it. Thank you so much. Appreciate it. Thank you.

Speaker: And I think that's why, from an election perspective, we're relatively agnostic and think we're going to be good either way, and we love that durability.

Speaker Change: okay appreciate the thoughts thank you thank you te

Ward Nye: If we do not have any further questions at this time, I would now like to turn the call back to Ward 9. Thanks for watching, and don't forget to like, share, and subscribe to our channel.

Speaker: If we do not have any further questions at this time, I would now like to turn the call back to Ward 9.

Zach Pacheco: Your next question comes from the line of garish moi of loop capital. Your line is now open. Please ask your question.

Ward Nye: Thank you all for joining today's earnings conference call. Martin Marietta has built a durable and resilient business poised to continue out performing through dynamic macroeconomic cycles. Our compelling underlying fundamentals, dedicated teams, well-defined strategic plan, carefully curated coast-to-coast footprint in the country's fastest-growing markets, and unparalleled attractive growth opportunities reinforce our confidence in Martin Marietta's ability to continue delivering sustainable growth and superior shareholder value now and into the future. We look forward to sharing our third quarter 2024 results with you in the fall. As always, we're available for any follow-up questions. Thank you for your time and continued support of Martin Marietta.

Speaker: Thank you all for joining today's earnings conference call. Martin Marietta has built a durable and resilient business poised to continue out performing through dynamic macroeconomic cycles. Our compelling underlying fundamentals, dedicated teams, well-defined strategic plan, carefully curated coast-to-coast footprint in the country's fastest-growing markets, and unparalleled attractive growth opportunities reinforce our confidence in Martin Marietta's ability to continue delivering sustainable growth and superior shareholder value now and into the future. We look forward to sharing our third quarter 2024 results with you in the fall. As always, we're available for any follow-up questions. Thank you for your time and continued support of Martin Marietta.

Speaker: thank you all for joining today's earnings conference call martin marioeta has built a durable and resilient business poised to continue outperforming through dynamic macroeconomic cycles

Zach Pacheco: Good morning. It's actually Zach Pacheco on for Garrett this morning. Thanks for taking my question. Appreciate you guys walking through the outlook on a state fund and moving forward a couple questions to go. Maybe just a dive into that real quickly. We've been hearing other citing inflation kind of eating into those iij based dollars, therefore causing some delays. Just curious if you guys are seeing that at all or are the base dollars truly just flowing through nicely.

Speaker: are compelling underlying fundamentals.

Speaker: Dedicated teams, well-defined strategic plan, carefully curated coast-to-coast footprint in the country's fastest-growing markets.

Speaker: and Unparalleled Attractive Growth Opportunities.

Speaker: Reinforce our confidence in Martin Marietta's ability to continue delivering sustainable growth and superior shareholder value now and into the future.

Zach Pacheco: Thanks. I think we'd be naive to assume that degrees of inflation haven't eaten into that. And so when we went back over time, I've said before, whatever the volume that people thought would come out of iijA, the year it was signed at law, have you seen some of that being eroded by inflation? Yeah, I think so. But at the end of the day, very selfishly, from a mark, very out of perspective, would we trade the volume that we see for the pricing that we're seeing?

Speaker: We look forward to sharing our third quarter 2024 results with you in the fall. As always we're available for any follow-up questions Thank you for your time and continued support of Martin Marietta

Zach Pacheco: The answer is yes. I think part of what's so important to keep in mind, too, is I don't think iijA is the one hit wonder. In other words, I think we simply changed the floor in the way that the United States Congress and the government will continue to invest in infrastructure. Because keep in mind, we want a decade and a half with woefully underfunded infrastructure. So I think in many respects, yes, some degree of volume has been taken out simply because of inflation.

Operator: This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Operator: This concludes today's conference call. Thank you for your participation and you may now disconnect.

Zach Pacheco: At the same time, I believe when we see a reauthorization of this act, we're likely to see something at or above where this is. And again, to provide a nice extended period of time for the United States to invest in this much needed infrastructure. At the same time, it will allow us to make sure that we're getting the appropriate return for our very valuable materials that are in the ground and that we work hard to turn into a spec product.

Zach Pacheco: So that's the way that we think about it. There's nothing per se in you in that, but I think it's important to be able to articulate that to the investing public because I think from our perspective, it works. No, that makes sense. Thanks.

Zach Pacheco: Thank you.

Keith Hughes: Your next question comes from the line of Keith Hughes of Trouist. The line is open. Please ask your question.

Keith Hughes: Thank you. Our question back in cement. To your point, tremendous pricing is the best pricing increase I've seen during this running city from cement. Now that the loading is back to sold out, is there going to be further increases this calendar year or is that something that will have to come to play for next year? We've certainly told the market that we are looking to have another dialogue in September. Obviously, it's not yet September.

Keith Hughes: So we'll have to see how that goes, Keith. But again, there are a lot of different cement markets across the United States. And Dallas is a really good cement market. And obviously Dallas had a strange marketing cue to simply because it was wet. But when Martin Marietta was buying TXI back in 2014 and 2015, I remember very clearly what I said to our Board of Directors at the time. And that was, I felt like Dallas Fort Worth might well be the single most attractive heavy side building materials market in the United States for the next 25 years.

Operator: oh

Keith Hughes: It has not disappointed. So have we told our customers that we're going to have a dialogue in September? Yes. Am I ready to tell you what that's going to look like? The answer is no. But in any event to your point, as I've watched public data, I concur with your conclusion, I haven't seen a market that has reacted more attractively than DFW has on pricing on a percentage basis.

Adam Thalhimer: Thank you, Keith.

Adam Thalhimer: Your next question comes from the line of Adam Thalheimer, Austin Davis. Please ask your question. Morning, guys. Hi, Adam. I'm chair repurchases. That was a really heavy pace in the first half of the year. Curious how we should read that and what the outlook is. Yeah, well, simply, you know, there's a couple things that go into that. One is we were well below our target leverage ratio. And we had entered the year with the quarter with over two billion in cash on the balance sheet.

Adam Thalhimer: So that was part of it. Of course, we thought the stock price was an attractive level as well. We thought it was under undervalued. So that's really it's as simple as that. We're pretty opportunistic about our stock buyback. Try to avoid a lazy balance sheet at the same time. And those things just coalesce this quarter. Next time.

Phil Ng: Thank you, Adam.

Phil Ng: Your next question comes from the line of fill on of Jeffries. Please ask your question. Hey, good morning.

Michael Dudas: This is actually a column on for fill. Thank you for taking the question. I just wanted to ask about the aggregate volume guide. What is baked into the aggregate from one to four percent decline from an organic perspective? And how are you thinking about those organic trends in the back half of the year here just given the wet start to the third quarter. And maybe some of the softer trends that you're seeing in the warehouse office and resin markets that you called out.

Michael Dudas: Yeah, thanks, Colin. Thanks for the question. We try at this point now that those operations are really fully integrated. I wanted to break some out for the quarter because we were going through the integration process. But now that they're fully integrated, we just think about it candidly at this point as all organic going forward. I mean, clearly, I gave some, I thought helpful color relative to end uses and what we thought, you know, the shifts are going to be relative to up down sideways, etc.

Michael Dudas: But again, if we're looking the second half of the year on infrastructure, we think it's going to be a busy second half of the year. At the same time, you know, the biggest things that we're trying to get our heads around is, you know, what we're navigating right now. And what will be the fallout from, as I said, a wedgel eye and what has so far been a wet August with a hurricane making its way literally from somewhere between Mertel Beach and Charleston right now, eventually up through the Greensboro High Point area.

Michael Dudas: So those are, those are more of the swing factors in the near term and then the longer term this year to the extent there can be longer term this year. It's really going to be more driven by when winter sets in and what the effects of that may be in certain markets. So I can remember years that we were doing a swan and paving in Colorado in December. That doesn't happen very often, but it does happen, and those will be your swing factors really as we think about volumes but more granularly as we think about infrastructure.

Collin Verron: Great, that's helpful and just one follow up question. I guess if we see some more accommodating monetary policy here in the back later this year, how quickly do you think that starts to show up in your shipments? I think it starts to show up recently early in 2025 because I do think in portion of private particularly in home building, etc. You've got to pen up demand and it's interesting as we have people looking to move to Raleigh, one of the issues that they chronically run into and by the way I'm using Raleigh as an example, but we could go across our footprint and say the same thing.

Collin Verron: The inventory is really very low and frankly from our perspective, that's a pretty high class problem, Collin, is it tougher people moving to the area because they can't find the home that they want, yes, doesn't mean however that once you have that more accommodating policy that you're going to see home builders moving, we think with a laquity to fill what's in needed hole right now, we think that's the case. And that tends to be particularly if they've made the investment in land, which in many instances they have, that they can move relatively quickly and keep in mind, a portion of what we're going to caption as residential will be those streets, it will be that carbon gutter, it will be sidewalks, it will be the utilities, until those subdivisions are turned over to the local municipality for maintenance.

Collin Verron: So what we see it on the on the residue side, I think so, does that mean you're going to see light non-res come behind it in that more abbreviated period, I think so. And all that underlies what we think will be a continuing attractive infrastructure setting. So again, I hope that's helpful.

Collin Verron: It is a thank you for the caller.

David Macgregor: Your next question comes from the line of David Macregor of Longwear Research. Please ask your question. Hey, good morning, this is Joe Nolan on for David. You touched on top briefly, but I was just hoping you could provide an updated cost outlook for the year and discuss some of the moving parts within that. You also mentioned your focus on controlling costs. I guess I was just wondering what are some of the areas that you can focus on with cost cutting measures in a softer market.

Jim Nickolas: So happy to Jim. You want to take the first time I'll come back on fire with focus. Yeah, so the full year guide on COGS per ton, it's, well, second half rather is to be more precise is up 7%, second half this year versus second half last year. It's reflected, again, general inflation slowly coming down. There's a little bit of under absorption in that as well as the volumes come down versus their old view.

Jim Nickolas: Then the repairs of maintenance costs have remained elevated. We've seen some improvement as the volumes have come down on contract services, the outside services have been reduced lower over time. And of course, we do have a bit of diesel, tail and built-in, so that's helpful, too. And you know, I think Jim really hit very, very nicely. A, what the percentage of supply, B, what the emphasis is going to be, obviously we're going to be focused on maintenance and repairs because we've seen those up disproportionately.

Jim Nickolas: But we're also seeing general inflation come down. We are seeing some nice tailwinds coming from portions of energy. It's been a bit of a fabricated situation though because we've seen diesel clearly better. We've seen electric modestly up. But again, managing our hours, managing our overtime, keeping our people safe will be areas that we will have a unique focus as we always do in the second half of the year. But I think you will see a better trend on repairs in particular.

Jim Nickolas: Great, thanks for taking that question. You best, good start to your job.

Tyler Brown: Your next question comes from the line of Tyler Brown of Raymond James. Please ask your question. Hey, good morning. Hey, what are you talking about? Yeah, hey, you talked a little bit about this earlier, but if I'm not mistaken in conjunction with blue water, there was a notice of a July 15th mid-year. I believe you had already communicated mid-years out west early in the year. I'm just curious though. When you look at the portfolio, just how close are prices out west and in those recently acquired operations to being harmonized to your heritage markets?

Tyler Brown: Because I assume your heritage markets are also price increasing. So do you feel like there's still some catch-up work there? And why wouldn't this be a sizable tailwind pricing over the next few years just as you harmonize that whole portfolio?

Ward Nye: So Tyler, thank you for the question. So I would say two things. One, we are getting closer. We are getting ever closer to harmony in the western U.S. So pretty soon you can start humming that music. I think that's going to be there. But here's the other thought that I would have for you. I'm not sure we're looking for harmony in the west. I think the west ought to be a price leader because as we look at the cost of doing business in California, as we look at barriers to entry in California, just a host of things.

Ward Nye: You know, the west coast businesses should never in my view have been businesses priced below a more married heritage number. And I think there should be a premium associated with businesses in that geography because you've got at times some premium costs associated with that geography. Now to the rest of your question, should there be recovery in places like Tennessee and elsewhere as we continue to go through the synergy realization process of the blue water operations?

Ward Nye: The answer is yes. There should be. And as I indicated, I think in some earlier commentary, there's over $4 a ton delta right now between the average and those locations. And Heritage Mart Marietta, so to your point, should there be an extended period of goodness in that? The answer is yes because obviously the heritage footprint or price profile will continue to go up as we continue to move up. At the blue water operations as well and get those closer to that harmony point that we spoke up before. It doesn't make a lot of sense to me as I look at our portfolio that North Carolina, Georgia and Tennessee would or should look materially different. And that's where we're endeavoring to take the business. Yes.

Ward Nye: Excellent. Okay. Thank you. Thank you, Todd.

Michael Dudas: Your next question comes from the line of Michael Judith of vertical research. Your line is now open. Please ask your question.

Ward Nye: Good morning, gentlemen. Good morning. You know, did you did notice in the presentation that the Magnesia outlook is up for 2024 relative expectations? So maybe maybe spend a little bit on a minute on that business and there's any read your indications on general economic or business activity that can be helpful to, you know, thinking about how that business flows over the next quarter? No, happy to.

Ward Nye: And it's really a tale of two different businesses there. So, you know, if we're looking just at revenues as Jim said in his comment, they were relatively flat. As we look at that, you know, chemicals up around 7% limed though up 24%. And what we're seeing is pricing gains are more than offsetting lower chemical shipments, so chemical markets around the world. And keep in mind, this is not just a regional business.

Ward Nye: This is a business that we cover the U.S, and we have, you know, double digit international business there as well. So we obviously saw volumes down. We saw pricing up. So you're seeing a lot of the same dynamics in the in the Magnesia specialties business that we're seeing overall in the aggregate business as well. Part of what I'm pleased with is still the utilization levels are remaining just above the 70% historical average.

Ward Nye: You know, that's not a terribly high number. And what our team has been able to do there is several. One control costs really well. Number two, they're going about their commercial strategy in a fundamentally different way. That's been a business that historically has had longer term contracts, and they've been in a position to revisit those contracts, reset them, and make sure that, again, same circumstances aggregates. We've got long-lived reserves at our facility in Woodville, Ohio.

Ward Nye: We have long-lived Brian reserves in Manistee, Michigan. At the same time, we need to be getting good value for those, and Chris Emborsky and his team have managed both sides of that business, controlling cost well, and controlling pricing really well, and the EBITDA numbers that we're seeing in that business based on the volume in that business, frankly, looks fundamentally different today than it would have two or three years ago, under the same economic circumstances. So I'm very pleased with that business.

Ward Nye: The other thing that I'll say too, it wasn't part of your question, but I think it underscores the efficiency of the business. They're safety numbers have also gotten notably better, and you just see that business going in the direction that we're very pleased with, and what's probably one of the tougher economies that any sector of our business is dealing with, and then they're likely to come in with a record EBITDA year this year. And that's the type of performance in this setting that makes us really excited about what Martin Marietta is going to look like in 25, 26, 27, et cetera.

Ward Nye: Thank you.

Timna Tanners: Your next question comes from the line of Team Nutaners. All research. Your line is now open.

Timna Tanners: Please ask your question. Hey, good morning. One remaining one from us, if I could. So I want to touch on the comments you had earlier about interest rates. And I want to ask something similar, but about the election, because we are hearing that there's some pause and activity around the election, and I'm curious about that, but also if you could dive into maybe any risk to some of the IRA related projects, especially if they relate to EV demand and given the potential outcome of the election.

Timna Tanners: Thanks. So Tim, to thank you so much. Yeah, but we're not seeing, I don't think we're seeing real slow down on public relative to the election. So I think that just chugs along. I think that can have an effect on private, and I think that's probably some of what we've seen in the first half of this year. So I think that's probably just more of same relative to public and what that could look like on I.I.J.A, reauthorization or the inflation reduction act or otherwise.

Timna Tanners: Yeah, I would say several things. One, I think we're relatively agnostic, and here's why, Tim. Look, I think if you have a democratic administration that's in power this next time, my guess is I.I.J.A, looks pretty similar. On a reauthorization basis, and then you continue to see things like the inflation reduction act. I think if you have a Republican administration, honestly, you probably have a more apt up infrastructure law and probably less IRA.

Timna Tanners: And again, from our perspective. They're probably almost a wash. And again, if we're looking at where the big investments are going to be made in highways, bridges, roads and streets, it's going to follow where people are, it's going to be driven by what's happening with DOT budgets and it's going to be happening driven by what happens at the ballot box, where most of these places that are seeing big population trends continue to pass initiatives at well over 80% rates of passage, and we think that's going to endure.

Timna Tanners: Frankly, if we've looked at the last several elections and you look at what's passed, almost half of it tends to be in Texas. And again, it goes back to building that marketplace that we have in Dallas, Fort Worth and San Antonio and in Houston. And again, relative to what we see going on in energy and otherwise, I think that can move around a little bit depending on whether we have regime change.

Timna Tanners: But if you built your businesses the way that we have on major commerce carders, that's where the activity is going to be, whether it's factories, whether it's industrial, whether it's energy or otherwise. And that's why the positions we have along the I-85 corridor, the I-95 corridor, the I-25 corridor, the I-35 corridor and the I-5 corridor are so important to us. And keep in mind, Temna, we're the largest shipper of crushed stone on the railroads for a reason.

Timna Tanners: We're the largest shipper of stone on BNUP, number one on CSX, number two on Norfolk Southern, and now number one on the Canadians, after they bought the Kansas City Southern. And to the extent that this industrial buildout continues on either commerce by truck or commerce by rail, we're going to be well suited by that. And I think that's why from an election perspective, we're relatively agnostic and think we're going to be good either way, and we love that durability. Okay, appreciate the thoughts. Thank you. Thank you, Temna. We do not have any further questions at this time.

Ward Nye: I would now like to turn the call back to Ward Knight.

Ward Nye: Thank you all for joining today's earnings conference call. Martin Marietta has built a durable and resilient business poised to continue out performing through dynamic macroeconomic cycles, our compelling underlying fundamentals, dedicated teams, well-defined strategic plan, carefully curated coast-to-coast footprint in the country's fastest growing markets and unparalleled attractive growth opportunities, reinforce our confidence in Martin Marietta's ability to continue delivering sustainable growth and superior shareholder value now and into the future.

Ward Nye: We look forward to sharing our third quarter 2024 results with you in the fall. As always, we're available for any follow-up questions.

Operator: Thank you for your time and continued support of Martin Marietta. This includes today's conference call. Thank you for your participation and you may know this.

Q2 2024 Martin Marietta Materials Inc Earnings Call

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