MLM - Earnings call transcript Q2 2022 | Martin Marietta Materials, Inc.

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Operator

Good morning, and welcome to Martin Marietta's Second Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, today's call is being recorded and will be available for replay on the company's website. I would now turn the call over to Jennifer Park, Martin Marietta's Vice President of Investor Relations. Jennifer, you may begin.

Jennifer Park

Good morning. welcome Martin to XXXX Second pleasure Call. Earnings my you Marietta's to Quarter It's

that actual are risks Chairman with Like Chief Marietta Ward Officer; revise today other securities financial undertake statements legal which me are website. Joining legally Nye, Exchange the performance. both otherwise. results United public by future and filings, new no obligation, our Nickolas, required to discussion include subject could or differ States Vice materially. Securities is operating as Today's or and and to defined to We statements, disclaimers from except and in cause contained and Martin publicly any Senior resulting developments on President the events, Officer. other and refer connection as Commission's uncertainties businesses, Financial laws update available may and to forward-looking whether future Jim in future Executive or Chief results today's information, Please own release forward-looking earnings

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

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

follow. to brief turn Ward Instructions] today's efforts reconciled results some to available on now concluding the measure our capital addition, Nickolas non-GAAP then financial measures supplemental will portfolio call SEC provide are second and also session most A as a will call the earnings and our begin are question-and-answer I with defined the our directly website. comparable Jim well In quarter Nye which GAAP after appendix review performance, as the and over and will discussion remarks. in end information trends. the Ward. optimization [Operator to market operating filings allocation, of will with Ward our will

Ward Nye

macroeconomic report the of track Martin in disciplined quarter, joining welcome Marietta Martin teleconference. record and performance profitable to delivered team's of Jenny, light to of quarterly and testament our our strategic excellence, you growth for results including morning the is to the strong key Marietta. differentiated In dynamics record the ability our acceleration today's a strong appropriately costs, model. and input I'm commercial to our respond business everyone, good and our environment, of and resiliency thank that rapid pleased you, changing And focus, to second Thank the quickly of plan. to execution challenging extending

in X and durability to and our downstream announced of with strengthening and balance our divestitures These term profile, while transactions our consistent improving further further our both enhance previously we aggregates-led In the long impressive near Martin sheet also Marietta's through addition results quarter. margin closed product business cycles. strategy, the company's

more the these half for in attractive growth half even provide performance, beyond. accelerated first of coupled an second divestitures, Our XXXX and strategic with foundation

increased diluted X% As consolidated a and increased significant to million, a increased adjusted earnings highlighted $X.XX. million to increased to gross in today's profit include: revenues few to continuing share billion, number consolidated EBITDA total $X.XX X% examples XX% financial quarter, XX% of the operations in operating specific from release adjusted second we $XXX achieved per and $XXX records

acquisitions. strategy coast-to-coast large our to widespread execution from footprint volume our the was over product X value implementation part increases, in performance strong demand diligent and price commercial of our contributions Our due of the April following across

geographies, September of the X between which effect input by broadly such, inflation, declined However, to take cost actions to across X. implementing and third teams this primarily price gross not products mitigate Notably, high impacts our were are and July quarter inflation historic immune taking increases margins slightly. we as and

inflation these commercial growth half from management quarter anticipated of actions rates. benefit our other Additionally, Martin operational second well term markets. position fourth a in together increase pricing we're a believe price record Marietta near advising customers We in number with to of the initiatives,

well at long key customer with endure quality positioned of meeting remember result is pricing products, inflation together material as materials, other as to of pressures environment this produce demand demand, recent quality to product after a that It's facilities. ongoing investments favorable important as focused preference historically, the improvements We're and benefits support operational supports upstream pricing for constructive Continued capital abate. environment. inflationary availability, well an expected which extended our a for to and a

these acquisitions. increase cement portfolio our capital While our in review of durability assets reducing best on balance provide either initiatives we margin-accretive and business not shareholders or the select shareholder plant, our through to on Marietta the proceeds to enhance related where California its the distribution redeploying overall improvements future organic value focused approach, Central and into for exchanging we growth, June concrete may Consistent flexibility CalPortland invest to our we on leverage our net growth we targeted Suburban the value Martin within businesses with also Ready Texas April ready-mixed business monetizing certain our that the be XX, sale refinements maximize Together, and typically portfolio We're to by our for aggregates-led opportunities previously to sale sheet and and concrete completed closed we continuing operations of Company. overall range. the returning Reading while announced X, and to owners. Mix with of Colorado terminals

aggregates. second to operating performance, turn Let's starting now our with quarter

XX.X pace quarter primary experience of Organic governing numerous activity. construction logistics We shipments, across overall the record X% X.X% X healthy of issues over increased million aggregate markets, inclusive with demand continue chain to tons. and supply a despite acquisitions, increasing aggregate our total shipments of aggregates end to second

reflecting cement tons combined delivered quarterly as increased reflecting cement from X. of The offset product as Martin macroeconomic core foreseeable cement Texas shortages The impacted our strong the following aggregate including California X the together market future. on Minneapolis, costs. shipments segment. effectively negatively the other previously growth team's a $XX X.X% July geographic constraining interest effective for strong cement demand pricing and material of partially in per fuel we increase experiencing mix-adjusted in increased in passed have surcharges, pricing materials Additionally, ongoing Marietta's season principally Austin environment Dallas-Fort shipments demand is this Martin million increased cost demand Marietta XX%, or to by X.X raw that concrete shipments XX.X% second businesses. in cement and supply. flat increase later-than-usual XX%, and mentioned the operational price inflationary on construction and and ready-mix ready-mix by Worth, to year, went actions, quarter in execution is across to Sunbelt April to Texas market Including on start attractive XX%. pricing the basis, footprint. key focused starts, set a costs, with ton our X. ton further product our markets, as pricing and import of demand thereby, experience April cement as record X.X%, actions conditions aggregates excellence, robust of which on regions Organic for our in extremely through demand second our $XX The pressures. while outlook pricing Texas, contributions Organic a in remains improved multiple offset customers challenges pricing San commercial inflation effect our Texas for into that stage impact bitumen. were the Organic our strong Shifting increase grew including that Triangle, concrete operating shipments Antonio, the a tightness. backdrop built the organic continued in downstream first raw Denver was asphalt housing and dynamic operations pricing per acquired increase shipments Despite and quarter upon our asphalt rates, Arizona, based and tight high on was Organic momentum robust with and increased Against X.X%

entered we to year firmly are cadence with quarter, backlogs serving third as logistics levels shipments. challenges As primary the product the of ahead of governor the customer prior

increased interstate Transportation the incremental for of cusp began the federal of Act, as healthy States United not trends from end combined expected on any of on highway system affordability-driven users, or that infrastructure of underbuilt receive for X. levels an turn segment. Department allocations backdrop, more We're the As today's With now we let's of as continued outlook company's with seen state demand the fiscal air aggregates X funding the than which robust XXXX year, funding most infrastructure. and offset of historically the to is July demand XXXX potential in IIJA, the nonresidential budgets the residential are examine in each pocket end-use starting Jobs Investment attractive Infrastructure introduction investment already secular infrastructure in and since to primary overview,

in to demand we As accrue year a later this pronounced begin a aggregates calendar result, expansion with XXXX. expect will benefits more

like provides increased an investment should our stable area in and manufacturing of large closer lead their seen from manufacturing hospitality demand. domestic retail, troughs strength base Marietta demand for to infrastructure, to of pandemic this announcements in markets products a acceleration including We've commercial, facilities be years of and pandemic aggregates in continue non-residential disruptions, to come. notable establish to Importantly, to construction sectors, Similar for as works recover impacted businesses public and energy level facilities. chain Martin a supply intensive

starting Stellantis markets near include: Samsung semiconductor and facility April. pandemic venture accelerated centers are the lithium-ion near these the impacts, different warehouses battery electric Austin, of with announcement our Some Indianapolis, and joint with Relative currently campus public examples the Taiwan in in the vehicle site projects Amazon's experiencing plant warehouses, consistent Vinfast data Samsung near Phoenix Semiconductor to sectors, Raleigh-Durham. growth in

moderation footage in their square rate. expect a growth rapid We

end continuing process to projects. shift we're to However, their

preference uptick and an goods. secular other Amazon shift storage adapt we're in brick-and-mortar as though, grocers from and businesses delivered than and traditional for retailers Importantly, warehouse consumers' cold to experiencing construction a

from City Additionally, purposeful supply and the is meta comparatively well remains to residential our center use, projects were to decade due our in population and in location residential underbuilding in essential greater prices factor. and Atlanta, inflows. Kansas demand positioned data We've data home positioning intentional serve which where of significant locations. business a center amid than been the far are is end robust, respect geographies to always With demand nearby including affordable

prices and housing community development two, expect in As equilibrium; rates our affordable such, moderate we constructive borrowing continued find areas. as slowdown and in areas single-family home suburban for to key more the metropolitan be: current one,

second slides, continued supportive slowdown starts aggregates quarter view, supplemental construction to a adjusted which, demand June ancillary guidance. the As community our shown as basis, to well it's call in $X the both approximately is some updated mindful in our important in even requires. healthy development Jim our year that that level and be housing detail a results the as on information sector of turn to direct full for to now in suburban I'll million seasonally context more single-family at housing, discuss over with provide our remain and residential Jim?

Jim Nickolas

you, to Thank and Ward, good everyone. morning

As kiln of growth basis million, profit enough million year's $X.XX services revenues profit was record an and points the offset Product as gross this increase XX.X% $XXX margin noted of declined increase in our the of Building last gross quarter quarter. robust continuing prior release, operations, to our earnings an XX.X% and quarter, to all-time a Materials an pricing quite record XXX gross year product improved business products XX.X%. posted relative with over [record] for aggregates not of and billion, higher of XX.X% to gross second XX.X% All-time a $XXX to Texas energy, exacerbating bottom-line outages that services strategy Cement Execution a both on headwinds allocation. of basis sizable and resulting of at supplies unplanned Hunter results. impacts inflationary constraints already despite plants. capacity market, margin are a cost contributing XXX extremely disciplined and exceptional internal otherwise and tight marketplace Domestic deliver drove Midlothian in well expenses. sold-out points freight, and contract to to the energy production top as commercial the as supply continues is expansion and

the Texas. is incremental taking short for run, PLC, capacity us. in Those increase creating of an in continued production record efforts conversion shipments. all-time are cement, or cement quarterly In Portland-limestone resulted for cement Importantly, setting to capacity steps we

expect plc repeating much it XX% year. product Type PLC historical and XX% We Type between are of the bears X innovative X this that to aware, and second of X% ship and half you volumes be Many converted is that between our in but Texas carbon in an lower XX% contains medium of to limestones cement, standard XXXX. well have intensity. new a performs as net and early with as This the term, our of marketplace. expect to to capacity the late finish provide XXXX, tons In incremental but will mill Midlothian XXX,XXX we completed

revenues million, and and shipments costs. divested second our reminder, acquired material Texas a as-reported divestiture prior the X.X% exclude partially basis, were basis down On as April the $XX higher higher As million lower year results declined diesel to an to operations, that to ASP. comparability Arizona and the were Colorado the to due XX operations to due include concrete on concrete declined impacting X quarter quarter. and were points Central profit the ready-mix Gross offset gross XX.X% by raw $X margin ready-mix

asphalt Our asphalt to operations costs were and demand, material include as-reported liquid offset the paving raw the basis, not an in acquired the the West enough On rapid stable Coast, to and second improved comparability prior the results quarter. acquisition on in pricing impacting increase quarter. contributions

margins XXX to $X declined from one quarterly global strong of revenues $XX points. record profit $XX of demand basis As products million, for benefit million declined its line to used extraction. continued a and is in gross batteries increase. a This cobalt profit product gross chemicals generated X% as business result, Specialties Magnesia million of

to rapid a impressive still are energy escalation costs due quarter's contracted common XX.X%. second this to However, Higher then costs, margins gross quarter. energy the in

flat they to believe points. of crude XXX XXXX year. diesel per the remain for intermediate would expand an our not elevated. If do when Texas approximately we forecasting basis prices to rest barrel, the fuel West are $XX diesel by levels margin for clear, return current be of we average permanently will However, gross To aggregates remain sold with costs levels

However, want subside. slides, information note the increased our pipeline as trends. costs on ultimately to diesel for aggregate context half did our have margins It costs rates in of that is impact above important we not provide to when indicated historical at supplemental hopefully

historical and depreciation with expenses remained personnel, levels. other in have combined line example, For generally

costs, While does it not production impact does interest earnings. expense impact

briefly net fixed, included our borrowing and Colorado other costs million concrete that basis, given exposure will divestiture the touch in Central XXX% consolidated this rates gain the of On rise on So rates. I are on income operations. Texas interest rapid a direct to interest rising In short, year. operating $XXX the ready-mixed eliminating of

payments $XXX year, returned million half first through share and the the During repurchases. shareholders of we dividend to both

continue a We to X X.Xx our ratio to anticipate target net of to leverage return year-end. by

in the cadence as to XX. diligent store of concrete our priorities. we and our manner gain, steadfast of aggregates-led all And We net durable acquisitions and XXXX shareholders. high-return on $XXX continued was value overall capital as volume growth our macroeconomic environment execution well today's value-enhancing in comprehensive proceeds Excluding second the our create focusing returning as initiatives cement shareholders, initiatives allocation for and long-standing balance a driven first and and debt-to-EBITDA organic capital include: the framework from that investing supply sheet. and results, ratio million as detailed release, as divestiture in our completed guidance X.Xx to challenges. half inflationary priorities, logistics we year responsible, to constraints anticipate resilient the remain operating further continued We as plan maintaining our pricing June within prudently have to capital pressure divestitures by expected full reflect in to use well recently a chain diligent of These updated allocating as half the

expect With $X.XXX to year to the that, full now range we result, back a turn to Ward. call $X.XXX billion billion. As adjusted will EBITDA I

Ward Nye

largely conclude, product positioned coast-to-coast on our We're to another year geographic trends well demand footprint XXXX as residential expected Martin to recovery construction, capitalize and record projects Thanks, we in increased near-term domestic the the Jim. To be any strong for from with energy is large-scale headwinds product expect Marietta. shipments markets. to light driven manufacturing across affordability end along investment, in insulate nonresidential infrastructure

to the build and safety and operator and our and commercial we'll If we Our business team our company. our as best-performing addressing turn practices the attention maintain durable your safest, world's and operational public now remains will committed aggregates-led execution excellence, to health required the SOAR questions. the instructions, initiatives sustainable community, XXXX provide most the of of

Operator

first from Instructions] [Operator the with And Trey Stephens. Grooms question comes

Trey Grooms

especially results on touch the that to if in a which nice is the quarter And input the think don't for level cement, back X headwinds. the want career. acceleration energy-related and in inflation year my is we could, this see I deck, in everybody in further to Nice should seen facing. Slide cost quarter, I've given price acceleration both aggregates to pricing And strengthen the especially given the your of even implies the that and I half in

in ask could this 'XX? a really progress gives into the that here for if the the want could deeper you as also at you outlook dynamics to what profitability price Ward, little aggregates play in we just dive cement year for and I mean confidence what back And So around half? and through and

Ward Nye

We've increases seeing They've July on attractive. QX. think the supplemental X. or very we seen aggregates We've what's X. gone thank something been back we QX, I Slide is implemented the price cement environment of Trey, too. that Look, as build generation really you're for pricing at If we're July and increases give we've I was you that we're from X. you nice end is haven't seen commercial to midyear party the And those seen in this commentary seen in. some as a many it very nice career think pricing pricing And best seeing happened in broad in the discussed you in the working the a goes slides that looks look single am, at extraordinary. I far, of of so just and way have and through does that respects and seeing is What your in question.

be a be in this We year the what anticipate mean that's us it's in what confidence going about What exit number. second pricing So feels I so think what we is on aggregates an strongly in going rate that to XX.X%. far. far seen to It's cement be is at point, to really your we've XX.X%. outlook? the that's more gives we've even attractive seen like July, so half really -- seeing throughout here something really building can

I impressions: time, year we attractive that I very we're think with those lot point, gives a thing we rates, So to remarks, next one, happening for energy time, a upstream record a space to have be long is your two, as number this as to subside next Trey, anticipate number year. going energy. noting, not. right as does year; of year, And the we pricing base usually as know, the pricing is is what point. the watched me in what's into having about prepared it we're driving same going But now think go exit X what's heavy material going At year, said to tends very have some another at side this other worth clearly to you into

has inflation team think an comments. an perspective, extraordinary I your I again, management done really from So the appreciate and job,

Operator

And the Stanley Stifel. with comes Elliott from next question

Elliott Stanley

you. for question Quick

the down So the touch updated volumes guide a second does half. take in

maybe anything 'XX? And we of if on just constraints, should else that, was you a year-over-year building in were mentioned mentioned a about You basis the up could that volume and which you backlog, then provide into on frame think how kind color logistics, little there there?

Ward Nye

for Thank Stanley. question. to the you happy No,

I think continuing relevant. they extent the can? Yes. properly to are to things Number contractors that one, hire several are

trucking because Absolutely. better? that a see availability modest markets constraint in drivers? that the constraint Is a is getting So of still Sure. some we of

been as look you from but as I numbers better, it's think, it railroads they fluid, hoped. overall if public hasn't as at think getting have well, would I the the

something noting, of that lot I think is, allocation. is Here's markets, is though, cement and worth on really that else a in

week, through not which fact to So get in the aggregates. they're later think producers to is they're ready-mix the put going concrete, means down about bring what can't going roll in that ready-mix means products cement If the not as process.

some governor growth in looks is So on tight also what have the bit aggregates can market a a really overall like. of a cement markets fact that

So volumes. those the think the as of we're account about some things half back looking taken of into as at we the that year, are we've

customer we X% What and prior we're overall Now to backlogs the if in really point, right what they seeing ahead were look we're backlogs are backlogs customers' aggregates, our pretty to like the about good, are at is, also that. your now of quite levels. heartened try where consider by year

I the What numbers. is heady like that. pretty on wear are some those particular in So of

So about in in really even is is us And in backlog up ready we're throughout market by Central bidding one mix, about the division, the it division, this you've very but divisions, XX% Austin Group, for heard the which, again, And if example, what's prior in in that's is the happening our notable, profitable know, but that remaining backlogs East We're our that's markets where core that that XX%. very and Tiller broadly strong. numbers cement, impacted in so look at Antonio. sold here's we were even as in prior you is West, now year. of over DFW, divisions West to of and basically was is last in consistent, San where particularly they Texas, and as markets But are one year. on seeing of seeing, some we that again, then year, acquisition the Central very look Southwest out. is up

see responsive of your question on But we we So volumes that as importantly, customer and what and I nice we that's summary, hope gives and on confidence on in why. see us look what what the backlog out. to some

Operator

Our Thompson next comes Kevin question from with Davis. Gainey

Kevin Gainey

come years, on and with energy the as then as energy for level? out thinking prices what you're aggregate could at touch a going discuss if guys costs Maybe headwinds maybe what happen I And was maybe you see high to as 'XX could as down far such?

Ward Nye

really and year. story Kevin, nails great actually of look, this a the much has question been that's what

we that about compare year take we're million costs, we at energy the try So and going the we to that to year just the organic business, all-in headline last to have a have last year, look $XXX business here's look cost energy quick question. have, that If relative full we at on but and to the not this year the this year. of number is, take didn't

is do important contextualize think a to million making has what superb and We've by I headwind got billion. this so is think we're I $X.X to about been our performance $XXX team what So talking year.

that So let's mind. keep in

to do we to products, I'm aggregates point, Now question, selling saying your on the that we're cement, come is of subside that subside the see subside. way when we and we're typically in prognosticate To over I'm going energy going to going see other average to not in going down. substream your if see But think not to we're prices these see energy start primarily, past to part time. prologue,

to So happening we're if overall year. be that that somewhere and usage during say, Because, look is at diesel, what's $XXX course we're we're and fuel. million we taking gallons XX between diesel and the again, of fuel again, utilizing diesel ballpark, a million going half ish of in take the just in million be what of XX to then going but headwind if back away

and every from going So on up of Obviously, the it account they the those gas And were electricity. is it's the of natural are I of think least in QX be way, one where what our going forward. is, are forecast there at headline by how considerably into that takes that components diesel. pretty sets much table that to number and

helps. hope I So that

Operator

Research next And our comes question Thompson from Group. Kathryn Thompson from

Brian Biros

nicely How you backdrop? seeing are This is on from any this On in momentum changes activity? you infrastructure, states project inflation ramping standpoint. managing in a Biros Brian Kathryn. are for bid And in up clearly

Ward Nye

you to I thank seen doing the you've we're X mean, question. different in manage help Primarily, what for Brian, inflation inflation. commercially we're managing ways.

thing as particularly year. making feel strive continue operational that this into other lead And year at we those like other possibly is ton the sure we in and will many likely per cost can. as things next we ways margin to look for of to QX we're The doing excellence X lower expansion, to as combination we beginning that

As are it's I to think we any seeing DOTs cancel state, important look at reacting, way we're DOTs projects. not the

I some this occasions, liquid asphalt on think bitumen we're very in high, projects. particular, I some seeing seeing DOTs the pricing. And postponed is notion. think They're or

that is back pull think to degree. some their I see will hope that they

think it. part of I that's

the pricing other part on is the months want the that if say, to cost may DOT fact you're frame. of at what do on have X, I input it think is looking projects done, projects X, X ago, a we been X, for than When that ahead today coming are contractors it happens, in dictates that fundamentally with during different unusual is so was that time of oftentimes estimates. contractors not numbers rebidding anyway. It's for that to be engineers'

and governors I go. then proactive, see the Marietta So important again, inflows, this seeing Brian, mind, in significant numbers realistic of population out. Martin Because I think states putting want to to is think what have being looking seen we're keep that are and seeing to a varying work what's DOTs degree in is what's at part that in legislatures

We've in think we're the actually years 'XX that into as plays we because some We seen very So after. things over more and out see, you canceled. seeing we're plays this postponed. as out places, focused on And nicely value things roll comfortably actually the is us we fact not think volume for anyway.

I So hope Brian, that helps, too.

Operator

with comes Sachs. question Goldman from Revich next Jerry Our

Jerry Revich

estimates for you on economic growth of setting just environment. interest the year looks a the XXX the It on XX% expectations, exiting you year factor like I'm right? Is And mixed that business. also wondering be the you in 'XX. basis and line year, if that? talk up based that full XXX, momentum the can a pretty for aggregates looking into consensus and carrying are guide, might of Can for just next cadence margin gross 'XX, year-over-year about earnings points

in success, interest just around up you as any interest coming pieces around the 'XX. for So initial of moving commenting folks the said, setting in you guidance quarters, in 'XX

Ward Nye

color more we'll much. say it. so I'll And 'XX And will much obviously year. when February this you granular get we you into end get next obviously, closer into year, thank very the to we on is Jerry, what as we of give be

ask some certainly know a exit I our I'll to profile. margin -- specifically do I'll What as some the to good questions. to Jim on at is we cost year to anticipate turn attractive ASPs. of think, very we very a we've respond exiting your said, we We got have to handle rates think relative we him

So Jim?

Jim Nickolas

Yes.

that of being applies, more QX the we should So cement, see. think at QX business. And outpacing yes, We're business, that to that trajectory upward profitable they're you're looking main course, at the consolidated level a point, seen, than cost and we to Aggregates is continue the QX. inflation. expect also which right, we've year And aggregates Jerry. prior at

Now quarter. again, the happen. a in increases we we the rapid of resumption second don't to saw We expect that assumes see that don't that

that think forecasting as come what offset we ASP will projected we're well. to And expecting pass. will we're cost rate that again, we've So than growth growth the more the

and the each QX, out be will and QX. prior meaningfully here than by quarter in getting particular, So better yes, in large, better

Operator

Citigroup. question next comes Our from Anthony with Pettinari

Unidentified Analyst

as the kind Or it of to X do for could that Anthony. is slows is shorten? What [indiscernible] of about asking lag for that interrupted? after if same sort cycle? work potential the XX-month following, When there up This to time we that now, light housing, X [indiscernible] way, on is on continue sort the that commercial of work another is cycle housing that's XX generally down being the currently you expect a starting months commercial follows this on think

Ward Nye

In the of in would to is the is if for going several other housing first, Thank part lag words, it some same. you that I'm X, markets, commercial to in about for answer the and places, take slow. slows months, last question. X, it typically the XX

Carolina, is to Our view again, Meta we're part projects see sector those Data that was you Commerce mean, out Colorado. X different Campo X I among the we're Center see relatively we markets, others. seeing really new, the Samsung specifically Park are the that Logistics if Kansas I very Austin our South in CEO projects and that at it the and what in of nonres High energy City, evolving. for nonres call commentary, except in and were not Point out project looking in Aurora, outlined that. in try called we And

vote that more that, Senate the the is we're things in in quite what here dictate worth you relative I other keeping in seeing we're that X the bipartisan There clearly come are relatively mind: number manufacturing out house in actually activity one, dimension that moves with chips are saw United If a So think forward to attractive. the States. will that of seeing yesterday.

I think a occur that have where very tend areas in likely of we coastal attractive much will to footprint.

million on The energy it's XX.X on tons we've that you about think XXX,XXX bear from of And those size projects those frankly other see is those, can large million and to of we've we've has I requirements. what long talked and ready-mix line tied are happening we even piece The of noting, of gone around the yardage It's that to give it numbers tons The now aggregates and South that talked gone be twofold: think the cubic I be a aggregates in updated of past, likely looks like of about to those than of jobs to ready-mix. anticipate those sense come projects about requirements to we from to Texas more yards this it, looked with million the XXX,XXX. energy. heavy closer XX.X project has is more XXX,XXX if attractive, number is now in XX at potential different what cubic to one, LNG pipeline as Louisiana. side worth

through, energy mind, if nonres on energy bills of Martin the these be I South Texas. some keep frankly, places if tend to perspective, more That's bit. aggregates around moves well. a little in Again, Midwest, those a think go wind as So and see intensive like very again, we Marietta in in from jobs

going we if warehousing, Georgia, looking energy, more storage, So at we're moment, trends Carolina, meaning States, have at be we're North looking for intensive. we're Texas, of can looking very of is We looking states manufacturing actually we're that the number seeing residential population of think, degrees be us. good. follows going to if one, white nonres stay that And We there going cetera. continue to in nonres Martin is at aggregates at that the United very to the et think attractive, these are Florida, heavy think components resilient and we're Marietta if Colorado, very in be to also and cold if we

Operator

next comes question from our And with Hughes Truist. Keith

Keith Hughes

the on a quite been It's last of rollercoaster is ride a natural on couple months. gas. My question

it you talk you lag? operations? that your Is I in how quickly think Unfortunately, could or more X volatility the X there just If feel real for next time? Is a maybe in months. about

Ward Nye

looking time all you to about attributable thank the that at really looking said in this you since over would diesel other a things I'm really natural for and that $XXX imagine. Obviously, has obviously, year. to fuel. sense to natural we how If And back been he just place give half Relative lot volatility And to broadly at we're we on not a energy the come that specifically said going Jim looked can a otherwise energy. to Keith, million there's that. really We got to we're speak of goes headwind gas, that. we move on the going look, be because is of much question. last that. to you of on hedging we gas or around ask the

to Jim, But time. over real relatively is it So you.

Jim Nickolas

Yes.

last So $XXX worth year, -- headwind $XXX of year diesels, million it's $XX is headwind million mentioning natural versus this million the the gas. in

is now. our most have it it volatile to the got question, right of it's our in the it I ability To to costs energy think is react our answer to we've to So we'll approach, similar get pricing against there's on depending that as business pricing and higher It those months manage the from the X the higher we costs. of to be form in that to X anywhere typically. that, a a before of bit can diesel react meaningful to reflected And your operations. we lag to

We're So elevated It we're to kind it. volatility. attention of it. on remains paying

a So we're thing on. that's eye an just keeping

Ward Nye

on to gas, just it's If in at the about year X And more up in versus last Keith, it looking QX of QX, up If sequentially was was this in we're bit to basis we're where here. and nat looking XX%. QX a increase on QX data it where year put percentage it at more about XX%.

in increases. So you're percentage seeing at least pullback those a

Operator

Our PNB Paul next from with question Paribas. comes Exane Roger

Unidentified Analyst

you start This your the is color of of a Europe, an a indication line a for cost? what Do COX. just on tune Clearly, head bit. strategy on cement bit giving bit X and maybe that bit on Changing decarbonization plants of Paul. little George a the in got a mind for of might we've

the might just there. if concerns you behind any curve a wondering So be you that have bit

Ward Nye

for first guess things appreciate that several thank George, that you I much. I would the very question. I say.

to is overall North alternative of to level. that of really very to at of significant good that plant going tardive using look look to what decarbonization at products see for that done we're been at now. to to both in used we're which see have and at at in process relative you happen we've example, Overall, going looking decarbonization, plans our operating our can that we've broadly commercial way is what's at If the for be fuels bit we're Texas, fuels. facilities, Midlothian, a a We've right we have been looking if

to United to we we performance apples actually that. our on a plants footprint go behind to the see not from of I States plants perspective of think don't look think relative globally. the that decarbonization actually that I the our performance we're carbon most and if at we have oranges the apples-to-apples, relative in

great the look I those mechanisms sustainability scores can blending and went report how are be think published at we kept. in April, what to pains you different if we which that the really in to outline

we're think you'll see place. very, good very in actually I that a

is The capital we billion time go $X Texas CapEx XXXX, have strategic other in business. into that we at the worth a put noting and thing that look that gone if cement take we has into in since about that's back worth that of footprint

and very margins as business. business see you'll our what is position think in to: what fair to to is in business; been got is a feel So attractive the we cement to say business That think us we're in a neighbor in attractive and we've we've actually that as the building was toward I designed steward look be. to two, community Texas. want like have That shareholders at a of do need move forward a PLC good to part margins can in that which same utilize to very And the as we expect that prepared facility returns Jim least in make of remarks, place. And at forward, we the that sure referenced business going the and sure very his going has to types is plan. that cement, in invest think we our going a us make people one, our that we're that time, ability aggregates be our in

Operator

And from comes our Phil with question Jefferies. next Ng

Phil Ng

pocket up hold air would I guess year. among in the dialing next and nonres potential recession up certainly how fears here with housing, investors healthy debate

much in next of that's kind Marietta. because projects see do backlog you highlighted to Martin of Curious, have for start of kick business? these line opportunities you some certainly longer You've a sight energy how some do unique year? And

Ward Nye

top owners what's hear big we're the well. on manufacturing voice. that's Phil, with as seeing me of question. of is dates what are occurring type sight of to LNG they thanks line on Part the commentary we treated these spoke be good the going this of next the tend pipelines. as going a February, these we is the intensity through of point jobs again, red, go really states. we're these published equally Day, is months through the consequence people aggregates if are a and facilities, and that now. The a actually our suppliers maybe. is These thinking not go all facilities, it green, Investor you your enormous a are they're was of to to are jobs. talking now pretty number go and on at They're they at frankly, it today size we and notices out, non-res us when green think release basis proceed. generals in size for that as these of green through And not And look about February And nonres. as of if tell from I projects? on that these Good nonres to answer It's we also mean, perspective, on on short yellow, the actually outlined more than go a right number we're lot simply on seeing X your think light we semiconductor striking mean, to particularly I at I to our the past a dictates some So that's much markets we've and part looking are as stop on project but of large a larger giving those today. at before got all good the one we be how nonres is frankly, jobs several look occur, others. to I'll I whatever or dollars occurring facilities

Phil Ng

Okay.

moderate momentum you we Texas recession, seeing do and levers to with for be infrastructure year Cement [indiscernible] combine that the have you're enough on think you next business? up kind in if volumes your of a for So

Ward Nye

it, Ask and between that Phil. say question again, I hear didn't you said the infrastructure again. it

Phil Ng

world, you Just next and a cement aggregates for off infrastructure certainly to dialing a have and you in given what year recession? do moderate levers recession seeing up, you're enough in moderate nonres be think in type

Ward Nye

is perspective. and obviously what this we would in at operate The some very come we'll say, But a budget guidance up here's are very out states bill I which good detailed considerably. that Look, on Phil. infrastructure give in Look, point.

taxes and to infrastructure. latest if certain looking what attractive. been saying in the seen states, trends North Obviously, states in we're going that like now approved that's population at have our sales a and been forward ahead is that are quite I trends we're budget that take are themselves putting Carolina key probably percentage looking You've the of to have,

business, and of the safe. the for, is is of durable a in what as things built we the has the volatile are outperform. durable continue end that outperform that outperform. looks think looking at durable people We business believes not a think just what that business. very that one go And will built to through and market And it's a have in markets a we I enough time, ability team business we'll capacity I to we that have day, cycles, Phil, management a this we that think

into I'm seeing But we'll next So some anything what around obviously, give we give going get we'll in gives 'XX. you us data we're you year, more more, but not such trying detail closer. confidence to give and you as

we scares right As us look at it now. broadly, that

Phil Ng

a And year of lot that's That's certainly, well. helpful. great. as into carryover fraction Yes, going next

Operator

MacGregor And David our next from comes with question Longbow Research.

David MacGregor

Ward, awfully maybe just strong year. the to an it be like could build on question, looking XXXX, previous

ago. funding bring moment that You the state you a referenced in

relatively of how very be I'm of layer impact top of, is from You the much by And XXXX. might a get IIJ guess what aggregate of just trying really on standpoint in tighter. of market some trying shipments constraint? supply a get tight flow of to cement to cement building a the to in aggregate going to And guess constraint I should percentage sense I deeply would represent? total really a a get market, influenced recessionary absence be the which projects, sense even just And I'm in that your a that well momentum on

Ward Nye

question. mean, you great I I saw it it. And I quarter. this that's it think think just David, constrains a

react shocking things states I are is Because to a happens, differently it. think I horribly does tighter. think cement shortage. it David, what going to different modestly don't to it very makes it

to a a come a Texas. here's where plant way is We're largely we It to big of largest be don't don't state. good state. Obviously, calcium be a access places facilities part of has same At cement state. Texas there. would criteria in So state there's to it's is so the in And have cement time, the entire the that the it's we concrete the with to meet not you and cement-producing do meaningful in the here found in remarkably carbonate, can backyard our limestone eastern it. going in that in need high here be have today. because we number the you of that Texas state, difficult that producer different Carolina, a see the North it's cement acting going plan granite like think to If to

I'm going be to we I concern that going going something materials David, because can be to frankly, one work side. about it's degree is you I'm degree. be The And that could not going would be great I'm we in pushed where for large in that the I away. not the sitting, to commercial a recognize it that about where down work are tight, and is the again, to just measure is or margin, something which might sitting to slow It's on sitting the a to more very call things environment have if it likely of So of us. again, a circumstance attractive talk go a think in it's to

It don't modestly. I it's will So the to volume. horribly think be be meaningful on going

be I the positively to it's think on meaningful ASP. more going

Operator

Vertical And Dudas Partners. our from with final comes Research question Michael

Michael Dudas

maybe that sense a how some front? up? is how the assess XXXX? could And your during maybe nonres cement of acquired you over some have last could provide upside on how been properties or market stability assets Ward, And you and So the shaping and California performing -- the get

Ward Nye

question. to. that so thanks Mike, Happy for much

it X So really break into material buckets. we'll

Let's talk the assets Lehigh first the in West. about

and these not that's is we've unlocked. being potential substantial and been have earnings seeing frankly the that in assets we're surprised ASP anything So by, of that growth process

ask So way, and the performed the many business you that go would what back on I in is the then. reflect way TXI since the it's and respects, came into do to

we, the now increases were well. X wins we're in aggregates quickest recall, single increases as that July was in up we large what right may seeing saw to January That's California TXI on relative orderly measure, digit. ASP. in way the you As in also price what's really portfolio making X double and see of $X that much midyear per very across the a best us, sure California. at going core are in where to And can we're that keeping looking through we're in ton fact, owners. you

process in that. of we're the So doing

it's actually gone well. think quite I

Frankly, surprise some high-class to So anything get sure in a California cement in Arizona, days, I'm more concede we're not many could but a also us. in seeing will respects. to that's been Arizona wish on that's I problem I or

about as ahead that just very those business. the As limited requirements Hanson Tiller CapEx assets, Part we and we about in think really modestly recall, of the we assets bought you year. business what that last like is of

part these are So be that's to a come. And seeing to we we're to think flow of likely portfolio some best going from case of in for cash assets the be the what perspective. years there,

for of that for really was and come attractive had than other that. back thing we've it's a been to faster available land frankly, that's take we valuations sale in make that thought reduction transaction. bit higher price that, process go been us investment sure and reclaimed to the as than The is Tiller basically, And have net would And a the helped able purchase at monetizing the to us, there have that's have we really good of we we would going thought. be us of attractive through we're

a we're in as operating in Minnesota. looking it's that's largely business business Obviously, it's at well. nice a So performing very Tiller,

business a led and year, management well, doing So excited as footprint. We've January very that and be well. it's Minnesota where this that predictably, that's about got January, saw March. is March what But continue because, in very cold don't quite of February go. past in to and aggregates we is good expect people is and capable doing much coast-to-coast and feel very meaningful very in the we February about will a overseeing it, now team business Hansen

Michael Dudas

And work. this beautiful still state is a

Ward Nye

Thank you so much.

Operator

turn like call to Ward now for And over to I any Mr. Nye comments. the back closing would

Ward Nye

much earnings Thank joining you so conference today's for call.

confident safety, quarter strive and Marietta's in inevitably now and results continue fall. to growth that enhance and operational believe and on XXXX our We look attractive sharing We excellence. the We forward value to the driving we're commercial [triumbrent] leads into future. to for prospects shareholder late continue Martin results, third superior to

always, of you Thank and As for may Marietta. we're follow-up time you available continued your have. questions for any Martin support

Operator

Thank your for participation. you

a may You have day. Everyone, now wonderful disconnect.

Martin Marietta Materials (MLM) 28 Jul 222022 Q2 Earnings call transcript