Martin Marietta Materials, Inc.

Welcome everyone to Martin Marietta's second quarter 2025 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 call over to your host, Ms. Jacqueline Rooker, Martin Marietta's Vice President of Investor Relations. Jacqueline, you may begin.

Good morning. And thank you for joining Martin Marietta's second quarter 2025 earnings call. With me today are Ward Nye, Chair and Chief Executive Officer, and Michael Petro, Senior Vice President and Chief Financial Officer. As a reminder, 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 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. 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. Today's earnings call will begin with Ward Nye, whose remarks will focus on our second quarter operating performance, continued portfolio transformation, 2025 outlook, and related market trends. Michael Petro 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 for joining today's teleconference. I'm pleased to report Martin Marietta delivered outstanding operational and financial results in the second quarter, despite weather headwinds and subdued residential demand. In addition to record financial performance, in the first half of 2025, we also achieved our safest six-month start to the year in our company's hit as measured by total reportable instant rates, which continue to exceed world-class safety levels. Together, these results are a tribute to our team's steadfast dedication and focus and reaffirm the strategic advantages of our company's geographic footprint, the resiliency of our differentiated business model, and our company's unwavering commitment to safety. Subsequent to the quarter end on August 3rd, we entered into a definitive agreement with Quickrete Holdings for the exchange of certain assets. Specifically, Martin Marietta will receive aggregate operations producing approximately 20 million tons annually in Virginia, Missouri, Kansas, and Vancouver, British Columbia, as well as $450 million of cash. In exchange, Quickrete will receive our Midlothian cement plant, related cement terminals, and North Texas Ready Mix concrete assets. This transaction is expected to close in the first quarter of 2026, subject to regulatory approvals and other customary closing conditions. Consistent with the priorities outlined in our Strategic Operating Analysis and Review of the Oarsore 2025 Plan, our focus remains on shaping a higher margin enterprise that is increasingly aggregates-led, which possesses a more durable and resilient earnings profile through cycles. The strategic exchange of our remaining cement plant and related Ready Mix concrete operations for core aggregates achieves this objective, enhancing the product mix of our portfolio while preserving balance sheet flexibility for continued strategic plan execution. As highlighted in this morning's release, Martin Marietta established new records for the second quarter with key metrics showing gains year over year as sustained pricing momentum and effective cost management continue to yield strong results. Specifically, we reported consolidated adjusted EBITDA of $630 million, an 8% increase. Consolidated adjusted EBITDA margin of 35%, an increase of 170 basis points. Aggregates revenues of $1.32 billion, an increase of 6%. Aggregates gross profit of $430 million, an increase of 9%. Aggregates gross margin of 33%, an increase of 94 basis points. And aggregates gross profit per ton of $8.16, an increase of 10%. Magnesia Specialties once again established new records in the second quarter, achieving new quarterly record revenues of $90 million and second quarter records for gross profit and gross margin, with gross margin increasing 605 basis points compared with the prior year In the second quarter, reaffirming as we previously indicated, that this business has earned the right to grow. Accordingly, on July 25, we completed the acquisition of Premier Magnesia, enhancing Martin Marietta's position as the leading producer of natural and synthetic magnesia-based products in the United States. Given our strong first half results and third -to-date shipping trends, we're increasing our full year 2025 adjusted EBITDA guidance to $2.3 billion at the midpoint. This revised EBITDA guidance also reflects contributions from the Premier acquisition for the remaining five months of 2025, most of which will not occur until late in the year as we work through existing inventories written up to fair value, consistent with purchase price accounting. As we progress through the year's second half, our teams remain focused on the key levers within our control, world-class safety, executing our strategic plan, commercial discipline, and prudent cost management. Moving now to end market trends. The outlook across our core end markets remains varied, with infrastructure demonstrating relative strength while residential and non-residential construction trends remain mixed. Infrastructure, our most aggregate intensive end use, remains a strong comparative performer during a decidedly wet second quarter, underpinned by robust federal and state investment. Encouragingly, the value of state and local government highway, bridge, and tunnel contract awards, a leading indicator of future product demand, increased 10% year over year to $126 billion for the 12-month period ended June 30, 2025, well above historical levels. As we look beyond the late 2026 exploration of the Infrastructure Investment and Jobs Act, or IIJA, early legislative efforts pertaining to surface transportation reauthorization are centered on roads, bridges, and ports, which offer a compelling pathway to extend infrastructure momentum into the next cycle. The ongoing reliability of infrastructure investment at both federal and state levels points to a resilient, years-long infrastructure outlook marked by long-term planning stability, steady durable demand, and sustained pricing tailwinds in this often counter-cyclical public end market. Shifting to non-residential, the heavy side continues to benefit from the increasing demand for data center development and an inflection in warehouse construction. Texas is seeing substantial data center growth propelled by its low-cost energy, grid accessibility, and business-friendly tax and regulatory environment. In July 2025, OpenAI announced the expansion of its Stargate data center in Abilene, Texas, to develop 4.5 gigawatts of additional data center capacity. The second phase, which is already underway, adds six more buildings, bringing the total to eight buildings encompassing approximately 4 million square feet. Secondarily, on not yet a meaningful contributor to shipments, we expect medium-term upside from utilities investing in energy generation capacity to reinforce grid reliability to support this expanding data center and artificial intelligence infrastructure. According to the Texas Tribune, the Electric Reliability Council of Texas, or ERCOT, is projecting that statewide electricity demand could nearly double by 2030. To address this anticipated demand, Texas is actively expanding its generation capacity. Currently, four new natural gas-fired power plants are under construction and an additional 33 have received permits and are positioned for future development. The administration's prioritization of increasing semiconductor manufacturing in the U.S. is also driving significant investments. As an example, in June 2025, Texas Instruments announced its plans to invest more than $60 billion across three manufacturing megasites in Texas and Utah. At the national level, we expect green shoots will inevitably emerge from the newly enacted Reconciliation Bill, which reinstates immediate expensing for capital investment and expands R&D incentives and targeted tax credits, establishing a strong foundation for multi-year resurgence in U.S. manufacturing and GDP growth. Turning to light non-residential and residential activity, we expect residential activity in the near term to remain subdued until affordability headwinds recede. That said, long-term demand drivers for housing remain intact, supported by demographic tailwinds and under supply across Martin Marietta's high-growth Sunbelt markets. Based on historical trends, as residential construction recovers, increased light non-residential activity typically follows. While near-term cyclical headwinds persist, secular momentum across infrastructure, data centers, and energy-related development, along with the eventual residential recovery, continues to support our long-term growth outlook. I'll now turn the call over to the company's newly appointed Chief Financial Officer, Michael Petro, to discuss our second quarter financial results.