Martin Marietta Materials, Inc. · NYSE:MLM
Martin Marietta Materials — Merger or Acquisition (January 2014)
32 slides from Martin Marietta Materials's merger presentation, Jan 28, 2014
Slide 1: Martin Marietta and Texas Industries: An Expanded Platform for Growth
Martin Marietta MaterialsMartin Marietta and Texas Industries: An Expanded Platform for Growth January 28, 2014 Rock Solid Fundamentals. Positioned for the Long Term.TM
Slide 2: Forward-looking statements
MARTIN MARIETTA MATERIALS Certain statements in this communication regarding the proposed acquisition of TXI by Martin Marietta, the expected timetable for completing the transaction, benefits and synergies of the transaction, future opportunities for the combined company and products and any other
Slide 3: Additional Information and Where to Find It
MARTIN MARIETTA MATERIALS Additional Information and Where to Find It In connection with the proposed transaction between Martin Marietta and TXI, Martin Marietta and TXI intend to file relevant materials with the Securities and Exchange Commissions, including a Martin Marietta registration statemen
Slide 4: In Today's Meeting
MARTIN MARIETTA MATERIALS In Today’s Meeting * Executive Vice President and Chief Financial Officer Martin Marietta Materials Anne H. Lloyd C. Howard Nye Mel G. Brekhus President, Chief Executive Officer and Board member Martin Marietta Materials President, Chief Executive Officer and Board member T
Slide 5: An Expanded Platform for Growth
MARTIN MARIETTA MATERIALS * Martin Marietta and Texas Industries: An Expanded Platform for Growth Exposure to perennially largest, fastest growing geographies Vertical integration across aggregates and targeted cement operations Highly efficient, low-cost operators Early stages of cyclical economic
Slide 6: Transaction terms
MARTIN MARIETTA MATERIALS Stock-for-stock, tax-free exchange Texas Industries shareholders will receive 0.700 Martin Marietta shares for each share of Texas Industries common stock they own at closing 15% premium to implied exchange ratio on December 12, 2013 and 13% premium to implied average excha
Slide 7: Combination of Strong U.S. Aggregates / Heavy Building Materials Franchises
MARTIN MARIETTA MATERIALS Combination of Strong U.S. Aggregates / Heavy Building Materials Franchises * Source: Company filings 1 Martin Marietta as of 9/30/2013. Texas Industries as of 11/30/2013. Excludes intersegment sales. 2 Martin Marietta as of 12/31/2012. Texas Industries as of 5/31/2013. #2
Slide 8: Significant Benefits for Texas Industries Shareholders
An Expanded Platform for Growth Significant Benefits for Texas Industries Shareholders
Slide 9: Evolution of Texas Industries: Low-Cost Producer with State-of-the-Art Facilities
MARTIN MARIETTA MATERIALS Evolution of Texas Industries: A Low-Cost Producer with State-of-the-Art Facilities * Spring 2013 Construction of new Hunter 2 kiln; additional clinker capacity of 1.4mm tons 2008 Expanded Oro Grande, California productive clinker capacity to 2.2mm 2005 Completed spinoff of
Slide 10: Combination is the Right Step Forward for Texas Industries
MARTIN MARIETTA MATERIALS Increases scale and scope creating the premier U.S. aggregates / heavy building materials company Diversifies operating risk and balances portfolio of products Provides expanded access to attractive aggregates business Combination with Martin Marietta is the Right Step Forw
Slide 11: Strategic Benefits of the Transaction
An Expanded Platform for Growth Strategic Benefits of the Transaction
Slide 12: Positioning, Growth and Performance
MARTIN MARIETTA MATERIALS Positioning Uniquely positioned in an attractive industry Growth Multiple long-term drivers Performance Differentiated performance Expands product and geographic growth platform High growth markets from coast-to-coast Combined company’s top markets are in states that accoun
Slide 13: Uniquely Positioned in Attractive Markets
MARTIN MARIETTA MATERIALS Net sales by geography Texas Industries1 Positioning Uniquely Positioned in Attractive Markets * Combined Martin Marietta Source: Company filings Note: Based on calendar year end 2012. 1 Net sales excludes Texas Industries delivery fees, expanded shale and clay and miscella
Slide 14: Leading U.S. Aggregates Producer
MARTIN MARIETTA MATERIALS * Source: Company filings Note: Based on latest fiscal year. 1 Assumes U.S. aggregates tonnage produced is equal to U.S. aggregates tonnage shipped. 2 Assumes U.S. aggregates revenue as a percentage of total revenue is equal to U.S. tonnage as a percentage of total tonnage.
Slide 15: Enhanced by Complementary Cement Assets
MARTIN MARIETTA MATERIALS Positioning … Enhanced by Complementary Cement Assets * Key Benefits Improved distribution network Lower transportation costs End-market diversification Increased aggregates and cement pull-through Aggregates Asphalt Cement Residential Non-Residential Infrastructure Source:
Slide 16: Environmental Regulations Expected to Make Texas Industries' Cement Facilities More Valuable
MARTIN MARIETTA MATERIALS Cement Facilities U.S. Clinker Production Capacity 7 4.4 million short tons Positioning Environmental Regulations Are Expected to Make Texas Industries' Cement Facilities More Valuable 19% of current clinker capacity is expected to be removed from the U.S. market * Environm
Slide 17: Increased Exposure to Attractive, High Growth Markets
MARTIN MARIETTA MATERIALS Source: Company filings and website; Moody's Economy.com 1 Pro forma net sales excludes Martin Marietta freight and delivery revenues and Texas Industries delivery fees, expanded shale and clay and miscellaneous sales. 2 Represents each states’ weighted contribution to U.S.
Slide 18: Leading Aggregates / Heavy Building Materials Supplier in Texas Market
MARTIN MARIETTA MATERIALS One of the most attractive heavyside markets globally GDP of $1.2 trillion growing at a 4.3% CAGR Leads the U.S. in employment growth Pro forma company will have an excellent asset base in key markets in Texas * Growth Combination Creates Leading Aggregates / Heavy Building
Slide 19: Texas: Attractive Dynamics Supporting Continued Growth
MARTIN MARIETTA MATERIALS Growth Texas: Attractive Dynamics Supporting Continued Growth * Source: Bureau of Economic Analysis; Moody’s.com; USGS; PCA; Texas Industries management Revival of core energy and energy-related industries, supported by a diversified industry base and a favorable business c
Slide 20: California: Early Stages of a Significant Anticipated Growth Cycle
MARTIN MARIETTA MATERIALS * Demand Reaches Equilibrium In 2015 Macroeconomic Drivers GDP of over $2.0 trillion growing at a 3.5% CAGR 8th largest economy in the world Strong employment growth outlook Foreign trade and direct investment support R&D services High barriers to entry #2 U.S. consumer of
Slide 21: Attractive Shareholder Return Profile
MARTIN MARIETTA MATERIALS Performance Attractive Shareholder Return Profile EPS Accretion Synergy and Growth Advantage Enhanced Overall Return Profile Proposed transaction provides multi-pronged financial benefits for shareholders Expect the transaction to be immediately accretive to Martin Marietta
Slide 22: Realization of Synergies Should Create Significant Shareholder Value
MARTIN MARIETTA MATERIALS * Projected Annual Synergies1,2 ($ in mm) $ in mm Synergy Overview By Area SG&A Operational Efficiencies $34 million $ in mm % of Total 40% ~80% ~95% 100% $36 million Incremental aggregates volume Incremental cement volume Ready-mix improvement Purchasing $70 million of ann
Slide 23: Industry-Leading Leverage Position
MARTIN MARIETTA MATERIALS * Debt Maturity Schedule1 Commentary Source: FactSet; Company filings; Wall Street research; Martin Marietta management 1 Martin Marietta 9/30/2013 balance sheet adjusted for refinancing on 12/5/2013; Texas Industries 11/30/13 balance sheet. 2 LTM 9/30/2013 for Martin Marie
Slide 24: Disciplined Martin Marietta Management Should Accelerate Shareholder Value Creation
MARTIN MARIETTA MATERIALS Uninterrupted Dividends Performance Disciplined Martin Marietta Management Should Accelerate Shareholder Value Creation * Strong Cost Management Track Record1 Source: Company filings; Martin Marietta management 1 Excludes one-time costs related to an IT systems upgrade in 2
Slide 25: FY Q4 2013 Earnings - Financial Summary
MARTIN MARIETTA MATERIALS * Source: Company filings Note: All figures in millions of USD except for per share figures. Fiscal Quarter Ended December 31, Fiscal Quarter Ended December 31, 2013 2012 % growth Sales $545.0 $502.2 8.5% Gross Profit $101.0 $76.7 31.7% EBITDA $106.3 $83.4 27.5% EPS $0.77 $
Slide 26: Aggregates Product Line Pricing and Volume Growth
MARTIN MARIETTA MATERIALS Aggregates Product Line Pricing and Volume Growth Q4 2013 Full Year 2013 Heritage Aggregates Product Line Mid-America Group 5.2% 3.2% Southeast Group 0.4% 1.9% West Group 3.6% 3.9% Heritage Aggregates Operations 3.3% 2.9% Aggregates Product Line 3.4% 3.0% * Pricing growth i
Slide 27: 2014 Outlook
MARTIN MARIETTA MATERIALS 2014 Outlook Aggregates Product Line Vertically-Integrated Specialty Products *
Slide 28: Roadmap to Closing
MARTIN MARIETTA MATERIALS Announcement of the transaction: January 28, 2014 Filing and review of documentation by SEC Obtain regulatory approvals Martin Marietta and Texas Industries shareholder approvals Expected closing of the transaction: Q2 2014 * Roadmap to Closing
Slide 29: An Expanded Platform for Growth
MARTIN MARIETTA MATERIALS * Martin Marietta and Texas Industries: An Expanded Platform for Growth Exposure to perennially largest, fastest growing geographies Vertical integration across aggregates and targeted cement operations Highly efficient, low-cost operators Early stages of cyclical economic
Slide 30: Appendix
An Expanded Platform for Growth Appendix
Slide 31: Non-GAAP to GAAP Reconciliation – Martin Marietta
MARTIN MARIETTA MATERIALS Non-GAAP to GAAP Reconciliation – Martin Marietta (dollars in millions) For the Nine Months Ended September 30, For the Nine Months Ended September 30, For the Nine Months Ended September 30, For the Year Ended December 31, LTM 2013 2012 2012 9/30/2013 Net earnings attribut
Slide 32: Non-GAAP to GAAP Reconciliation – Texas Industries
MARTIN MARIETTA MATERIALS Non-GAAP to GAAP Reconciliation – Texas Industries (dollars in millions) For the Six Months Ended November 30, For the Six Months Ended November 30, For the Six Months Ended November 30, For the Year Ended May 31, LTM 2013 2012 2013 11/30/2013 Net earnings attributable to e
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