Martin Marietta Materials, Inc.

Welcome to Martin Marietta's fourth quarter and full year 2024 earnings conference call. 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. I will now Turn the conference over to your host, Ms. Jacqueline Rooker, Martin Marietta's Director of Investor Relations. Jacqueline, you may begin.

Good morning. It's my pleasure to welcome you to Martin Marietta's fourth quarter and full year 2024 earnings call. Joining me today are Ward Nye, Chair and Chief Executive Officer, and Jim Nicholas, 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. 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 on both our own and the Securities and Exchange Commission's websites. We have made available during this webcast and on the Investors section of our website supplemental information that summarizes our financial results and trends. 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 our filings with the SEC, and are also available on our website. Ward and I will begin today's earnings call with a discussion of our full year operating performance, 2025 outlook, and supporting 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. I will now turn the call over to Ward.

Thank you, Jacqueline. Good morning, and thank you all for joining today's teleconference. Over the years, the disciplined execution of our proven strategic operating analysis and review, or SOAR plan, has significantly transformed our company by providing Martin Marietta with a coast-to-coast footprint with the majority of our products and services, going to areas exhibiting the highest growth potential, by demonstrating our ability to manage through uncontrollable circumstances, by adhering to our value over volume approach to meet customers' needs without discounting the value of our own assets, and generating a higher return on those assets, and by showing the resiliency of our business model no matter the macroeconomic backdrop. As a result, our business is superbly positioned for near, medium, and long-term success. 2024 was no exception to those themes, as we once again delivered record aggregate financial performance and successfully completed nearly $6 billion of portfolio-enhancing transactions. Operationally, our team successfully managed many exogenous factors, including persistent inclement weather, tighter-than-expected monetary policy, and a related modest private construction slowdown. The team's steadfast commitment to managing what they could control, namely commercial excellence, cost management, and portfolio optimization, enabled the fourth quarter delivery of record profits, margin expansion, and record cash flow from operations. Before discussing our full year results in 2025 outlook, I'll highlight a few notable takeaways from 2024's fourth quarter. With the weather better cooperating in fourth quarter, earnings growth and margin expansion resumed, evidenced by a record fourth quarter consolidated gross profit of $489 million, consolidated adjusted EBITDA of $545 million, reflecting an increase of 8%, and consolidated adjusted EBITDA margin of 33%, an improvement of 210 basis points. Pricing gains more than offset the impact of inventory management efforts, driving fourth quarter record aggregates gross profit per ton of $7.92, an increase of 12%, and aggregates gross margin of 33%, an improvement of 120 basis points. In addition to our impressive financial results, we successfully completed three aggregates bolt-on acquisitions in southwest Florida, southern California, and west Texas, all of which are attractive SOAR-identified geographies. Our four-year results were notable given the year's extreme weather and a difficult macro economy. Despite these headwinds, we established new aggregates and magnesia specialties records. Specifically, aggregates revenues and gross profit both increased 5%, to $4.5 billion and $1.4 billion, respectively. Aggregate's gross profit per ton increased over 9% to $7.58. Magnesia Specialty's revenues increased 2% to $320 million, and Magnesia Specialty's gross profit increased 10% to $107 million. Martin Marietta's safety and enterprise excellence culture have long underpinned our financial results. I'm pleased to report we achieved our best four-year safety incident rates in our company's history, inclusive of our newly acquired businesses. Notably, this marks our eighth consecutive year of a world-class lost-time incident rate and fourth consecutive year of a world-class total injury incident rate. 2024 surpassed 2021 as our most active M&A year ever, with nearly $4 billion of aggregates-led acquisitions and over $2 billion of non-core asset divestitures. We selectively pruned cyclical and non-strategic cement and ready-mix concrete operations and redeployed the proceeds into pure aggregate assets in attractive markets, adding nearly 1 billion tons of aggregate reserves to our footprint. These proactive portfolio actions created a more durable business, increased the gross profit contribution from our core aggregates product line, and enhanced our margin profile, all while maintaining a strong balance sheet for continued acquisitive growth. Looking ahead, we expect the reshaped portfolio, together with our fourth quarter results, will provide a solid foundation for profitable growth in 2025 and beyond. Specifically, our full-year 2025 aggregate shipment guidance of 4% growth at the midpoint assumes that strong infrastructure and data center demand A full year of 2024 acquisition contributions and normalized weather patterns will all more than offset the slowdown in private construction, which is primarily interest rate driven. Our full year 2025 pricing guidance of 6.5% growth at the midpoint, while lower than the last three years of double-digit growth, remains notably higher than the long-term industry average of 3% to 4%. These revenue drivers, combined with moderating cost inflation, Contributions from our cement and downstream businesses, magnesia specialties, and a full year of contributions from our 2024 acquisitions underpin our 2025 full-year adjusted EBITDA guidance of $2.25 billion at the midpoint, a 9% improvement compared with prior year. Moving now to end markets, we'll start with infrastructure, our most aggregates-intensive and often counter-cyclical end market. Both building and maintaining our nation's heavy infrastructure remains a bipartisan national strategic priority. Three years into the Five-Year Infrastructure and Investment in Jobs Act, or IIJA, nearly 70% of highway and bridge funds remain to be invested, indicating robust multi-year tailwinds. Importantly, according to the American Road and Transportation Builders Association, or ARTBA, public highway, pavement, and street construction is expected to continue to grow, reaching $128.4 billion in 2025, compared with $119.1 billion in 2024, an 8% increase. Notably, based on recent state and government contract awards, ARPA's 2025 Transportation Construction Market Outlook shows Texas, Florida, North Carolina, and South Carolina, key Martin Marietta states, are among the largest markets expected to show growth. Moving now to non-residential construction, artificial intelligence, or AI, continues to drive unprecedented demand for digital and energy infrastructure, as evidenced by recent announcements from Microsoft and the new administration in Washington. Microsoft expects to invest $80 billion in fiscal 2025 on the construction of data centers that can handle AI workloads with over half of that spend in the United States. Moreover, the new administration recently announced Stargate, which aims to simplify permitting and significantly boost data center construction in the U.S. through a massive investment of up to $500 billion. The build-out is already underway with the data center in Abilene, Texas, that Martin Marietta is supplying from its December acquisition of R.E. Jane's Gravel Company. Moreover, Dodge Construction Network's warehouse where footage starts for the 12 months ended November 2024 inflected positively for the first time since December 2022, and Martin Marietta was recently awarded the material supply for two large Amazon warehouse projects in North Texas and Fort Myers, Florida, respectively. Shifting to residential activity, affordability and availability remain key issues impacting single-family demand. Neither is expected to resolve in the near term, given the higher-for-longer interest rate environment. Relative to the availability issue alone, Realtor.com recently estimated that the U.S. housing market is underserved by approximately 7 million homes. That said, when single-family residential construction inevitably rebounds, Martin Marietta's leading positions in key Sunbelt MSAs provide attractive opportunities to capitalize on structurally underbuilt markets with pent-up demand. In summary, record state and federal investments, reshoring, the artificial intelligence infrastructure build-out, and the long-awaited single-family housing recovery should provide multi-year shipment stability and provide a healthy pricing environment for years to come. I'll now turn the call over to Jim to discuss our full-year financial results and liquidity. Jim?