BUILDING A World-Class Organization
Government investment in infrastructure
is a priority on federal, state and
municipal levels as voters have begun
to demand remedies for our long-neglected
roads, bridges, tunnels and rail
lines. Results of last month’s elections
underscore this obvious fact.
Eighty-two percent of 215 state and
local infrastructure initiatives on state
ballots in November were approved.
For our company, this means approximately
$3.7 billion in new transportation
funding initiatives were passed in
places like Texas, Colorado, Georgia,
South Carolina and Kansas – areas
where our presence is quite strong. A
third-party research analyst recently
observed that relative to these November
results, “Martin Marietta is the
largest beneficiary by location as they
should benefit from the new initiatives
…” We continue to emphasize that
where you are matters. We are in the
right places with the right people. This
is very much by design.
Residential housing starts were
robust in 2017 and, according to major
third-party forecasters, will be even
stronger in 2018. The same is true for
nonresidential construction, though
in both sectors a shortage of skilled
workers in certain markets has somewhat
tempered expectations. Similar
labor shortages coupled with wrangling
in Congress have caused several key
state departments of transportation
to postpone the necessary, inevitable
uptick in public sector activity despite
bipartisan congressional support for the
deployment of infrastructure funding
that has already been approved. Once
again, given the election results previous -
ly outlined, I am optimistic and realistic
that these investments will be forthcoming
22 November/December 2017 The Conveyor | www.martinmarietta.com
and that much needed public
projects will proceed across our vibrant
and growing geographic footprint.
Why am I optimistic? Consider this:
the United States added 2.1 million
jobs for the trailing 12 months
through September – and Martin
Marietta has attractive positions in
Texas, North Carolina, Georgia and
Florida, each of which is in the top 10
nationally for employment growth.
Further, more than 70 percent of the
company’s revenue comes from Texas,
Colorado, the Carolinas, Georgia,
Florida, Iowa and Indiana. All of these
states have unemployment rates below
4 percent. History confirms that jobs
create a host of good things, including
consumer confidence, increased tax
revenues, new housing opportunities,
expanded educational investment, and
burgeoning nonresidential activity.
It is clear that projects are coming, but
likely later in 2018 and 2019.
The following financial highlights
sum up our performance in 2017:
■ The year will likely mark the
eighth consecutive year of revenue
growth despite weather-induced
shipment volume headwinds;
■ Average sale prices of our aggregates,
cement, ready mixed concrete
and asphalt products will likely
increase significantly;
■ Our Magnesia Specialties
business is likely to again deliver
steady revenue growth;
■ We have made needed investments
across the company, including
a large project that will transition
operations at Nebraska’s Fort Calhoun
Quarry underground; and
■ Selling, general and administrative
expenses (SG&A) as a percentage
of total revenues remain below those
of comparable industry peers.
We can be proud of all of this – and
build upon it in 2018.
Looking to the Future:
The Good News
and the Better News
Looking ahead, I offer good news,
better news and a forward vision.
The good news is that the macroeconomic
environment continues to be
favorable for our company. Construction
activity will be strong; third-party
economists are forecasting a steady,
yet somewhat slower, recovery in
residential and nonresidential building.
Government spending on infrastructure
improvements will accelerate,
boding well for large, multi-year
projects. This is especially welcome as
it will impact us favorably in 2018 and
the years to follow.
The better news is that the impending
acquisition of Bluegrass Materials
will also have a substantial impact in
2018. This $1.6 billion investment represents
the second largest transaction
in our company’s history. Bluegrass
is a pure-play aggregates business
with more than a century’s worth of
long-term reserves strategically located
within two high-growth U.S. mega-
regions (the Piedmont Atlantic Mega-
Pictured above is a row of newly constructed homes in Colorado. Population
growth in the state, as well as across other states where Martin Marietta has a
strong presence, paints a positive picture for the company’s future.
continued from page 21
PHOTO BY PHYLLIP BOWERS.
/www.martinmarietta.com