Martin Marietta Materials

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Martin Marietta Materials
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Changes in Aggregates Industry Fundamentals

• Industry consolidation
• Barriers to entry
• Scarcity of supply in the southern United States
• Limited transportation availability
• Limited distribution sites

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Our Strategy Capture Value from Changing
Fundamentals
Loading barges at Three Rivers Quarry, Kentucky
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Strategy

• Assemble leading set of assets in high growth
  Southeast and Southwest areas
• Focus on long-haul transportation to build
  competitive advantage
• Focus on best practices and information systems
  to drive cost performance

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Company Profile 2006
74 of 2006 Aggregates business net sales from
southern United States
Aggregates Production and Sales
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Scarcity of Aggregate Supply
Limestone Hard Rock
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Information from the Department of Interior
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Population Movement
NC 20
Rank 7
GA 8
TX 19
Rank - 4
Rank 8
FL 5
Rank 3
Percentage of 2006 Aggregates business net
sales Rank of percent change population 2000
to 2030 (source Census Bureau)
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Aggregates Supply
U.S. consumption 3.3B tons annually
Average quarry produces 1M tons annually

Barriers to entry can limit new quarry openings
3 GDP growth 100M additional tons required
annually
Additional volume predominantly in southern U.S.
Per U.S. Geological Survey
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Transportation Mode
7 Rail
11 Water
16 Rail
73 Truck
93 Truck
(198.5 millions tons)
(71.2 million tons)
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Transportation Economies of Scale
Transportation Mode Cost Per Ton Mile
20 tons per truck
15 - 35 Cents / Ton Mile
100 tons per rail car
6 - 11 Cents / Ton Mile
1,800 tons per barge
2 - 4 Cents / Ton Mile
45,000 tons per ship
.4 - 1.2 Cents / Ton Mile
1,000
0
500
135
50
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Maturing Distribution Network Water Markets
Prince Edward Island
Nova Scotia
New York City
Linden
Philadelphia
Wilmington, DE
Kaskaskia
Sparrows Pt.
Wilmington, NC
Three Rivers
Producing Locations Major Shipping Points Other
Shipping Points
Charleston
Mobile
Pensacola
Lake Charles
Savannah
Beaumont
Brunswick
Jacksonville
Houston
Panama City
Port Canaveral
Freeport Bahamas
New Orleans
Tampa
Pascagoula
St. Croix
Aruba
Trinidad
Guyana
Suriname
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Scarcity Increased Pricing
9 - 11
Based on latest guidance of flat volume
(1)
(1) Selling price is established locally at the
point of sale and is subject to competitive and
other factors at each locality. ASP increases
reflect the average of the Corporations selling
price across all markets, some of which may have
already been implemented. Local prices can vary
significantly from this average.
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Demand Segments
2006
2007 Infrastructure ? Commercial
? Residential ? Other ?
Infrastructure 46
Commercial 27
Estimated percentage of 2006 aggregates product
line shipments
Note These percentages do not vary
significantly across markets, with the exception
of Florida which is dominated by infrastructure
demand.
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Cost Reduction Initiatives
Lemon Springs Quarry
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Cost Reduction Initiatives

• Excellent Best Practices Program
• Increased Plant Automation
• Overhead Reduction
• Better Information Systems
• Effective Management of Benefits Cost

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Plant Automation

• Sensors maximize efficient flow of material
  through crushing process
• Results in lower operating costs (cost per ton
  produced)
• Reduces headcount (allows one individual to run
  plant via sensors, cameras, etc.)

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Headcount Reduction
6700
6400
6000
5700
5600
Net sales per average number of employees up 71
over five-year period ended December 31, 2006
Hourly Salary
Note Headcount equal to average number of
employees.
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Capital Initiatives
Bahama Rock
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Capital Spending Priorities

• Capital spending has been focused on the
  long-haul distribution network
• Current priority-recapitalize the Southeast
  operations
• 2007 capital spending expected to be
  approximately 235 million

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Long-Haul Network - Three Rivers (KY)

• Second largest capital project in Corporations
  history
• New plant and load out provide variable cost
  savings
• Forecasted after-tax Internal Rate of Return - 23

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Three Rivers (KY) Strategic Location
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Underground Mines

• Largest operator of underground aggregates mines
  in the United States (15 locations)
• Neighbor-friendly alternative
• Production costs higher than surface mines
• Long-term capital focus

North Indianapolis Mine
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Operating Margin

• Attain 30 operating margin in 5 years
• Continued pricing improvements
• Ongoing cost reduction initiatives
• Plant automation
• Headcount and overhead reduction

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Aggregates Business Financials (M)
Year Ended
Percent
December 31, Change
2006(1)
2005(1) Net Sales 1,792 1,615
11 Operating Earnings 400
316 27 Operating Margin 22.3
19.6
(1) All amounts presented are from continuing
operations as presented in 2006 Annual Report.
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Magnesia Specialties
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Market Overview Industrial
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Market Overview - Environmental
Thioguard
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Market Overview Rubber Plastics
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Market Overview - Other
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Magnesia Specialties Financials (M)
Year Ended

December 31,
2006
2005 2004 Net Sales
143 123 106 Operating Earnings
36 24 18 Operating
Margin 25.0 19.4 16.6
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Restructured Magnesia Specialties
2000
2006
Refractories 44
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Financial Information
Pensacola Yard
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Selected Balance Sheet Data
(1)
(1) The calculation of net debt to capitalization
is available on the Companys website and in the
Companys annual report.
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Materials Financials (M)
Year Ended
Percent
December 31, Change
2006
2005 Net Sales(1) 1,943
1,746 11.3 Operating Earnings(1)
388 309 25.5 Net Earnings
245 193 27.4 Earnings per

Diluted Share 5.29(2)
4.08(3) 29.7
(1) Net sales and operating earnings are from
continuing operations as presented in 2006 Annual
Report. (2)Earnings per diluted share includes a
charge of 0.05 related to the write off of the
composite truck trailer business. (3)Earnings per
diluted share includes favorable tax items of
0.15 per diluted share.
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Uses of Cash (M)
2006
2005
2004

• Pension Investment
  12 15 51
• Capital Investment 266 221 163
• Share Repurchase 173 176 75
• Dividends
• (20 per share increase in 9/06) 46
  40 37
• Net Cash on Hand 24 69 152

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Cash Returned to Shareholders
219
216
In millions
111
49
28
Dividends
Share Repurchases
36
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The document attached represents one part of a
presentation which has been or will be made. It
is not a complete record of the presentation
because it does not reflect the lengthy oral
comments which will be part of the presentation.
This document is not intended to be a substitute
for our Form 10-K or other SEC filings.   Further,
while we may make presentations from time to
time, please understand that we do not undertake
any obligation to update any information
contained in these materials.   Finally, any
forward-looking statements are, by their nature,
uncertain and dependent upon numerous
contingencies, including the accuracy of the
assumptions underlying the statements, which
could cause actual results and events to differ
materially from those indicated in such
forward-looking statements.   If you have any
questions or comments, please contact Investor
Relations at 919-783-4660.  
Thank you.