10-Q 1 mlm-20240331.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-12744

 

MARTIN MARIETTA MATERIALS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

North Carolina

56-1848578

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

4123 Parklake Avenue, Raleigh, NC

27612

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (919) 781-4550

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock (Par Value $0.01)

 

MLM

 

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

 

Class

Outstanding as of April 25, 2024

Common Stock, $0.01 par value

61,640,190

 

 


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

 

Page

Part I. Financial Information:

 

 

 

 

 

Item 1. Financial Statements

 

 

 

 

 

Consolidated Balance Sheets – March 31, 2024 and December 31, 2023

 

3

 

 

 

Consolidated Statements of Earnings and Comprehensive Earnings – Three Months Ended March 31, 2024 and 2023

 

4

 

 

 

Consolidated Statements of Cash Flows – Three Months Ended March 31, 2024 and 2023

 

5

 

 

 

Consolidated Statements of Total Equity – Three Months Ended March 31, 2024 and 2023

 

6

 

 

 

Notes to Consolidated Financial Statements

 

7

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

22

 

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

32

 

 

 

Item 4. Controls and Procedures

 

32

 

 

 

Part II. Other Information:

 

 

 

 

 

Item 1. Legal Proceedings

 

33

 

 

 

Item 1A. Risk Factors

 

33

 

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

33

 

 

 

Item 4. Mine Safety Disclosures

 

33

 

 

 

Item 5. Other Information

 

33

 

 

 

Item 6. Exhibits

 

34

 

 

 

Signatures

 

35

 

 

 

 

 

Page 2 of 35


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED BALANCE SHEETS

 

 

 

March 31,

 

 

December 31,

 

 

 

 

2024

 

 

2023

 

 

 

 

(In Millions, Except Share and Par Value Data)

 

 

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,648

 

 

$

1,272

 

 

Restricted cash

 

 

2

 

 

 

10

 

 

Accounts receivable, net

 

 

703

 

 

 

753

 

 

Inventories, net

 

 

1,077

 

 

 

989

 

 

Current assets held for sale

 

 

18

 

 

 

807

 

 

Other current assets

 

 

70

 

 

 

88

 

 

Total Current Assets

 

 

4,518

 

 

 

3,919

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

11,257

 

 

 

10,708

 

 

Allowances for depreciation, depletion and amortization

 

 

(4,657

)

 

 

(4,522

)

 

Net property, plant and equipment

 

 

6,600

 

 

 

6,186

 

 

Goodwill

 

 

3,479

 

 

 

3,389

 

 

Other intangibles, net

 

 

702

 

 

 

698

 

 

Operating lease right-of-use assets, net

 

 

382

 

 

 

372

 

 

Other noncurrent assets

 

 

559

 

 

 

561

 

 

Total Assets

 

$

16,240

 

 

$

15,125

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

266

 

 

$

343

 

 

Accrued salaries, benefits and payroll taxes

 

 

37

 

 

 

102

 

 

Accrued income taxes

 

 

457

 

 

 

6

 

 

Accrued other taxes

 

 

37

 

 

 

47

 

 

Accrued interest

 

 

40

 

 

 

41

 

 

Current maturities of long-term debt

 

 

400

 

 

 

400

 

 

Current operating lease liabilities

 

 

52

 

 

 

53

 

 

Current liabilities held for sale

 

 

 

 

 

18

 

 

Other current liabilities

 

 

140

 

 

 

160

 

 

Total Current Liabilities

 

 

1,429

 

 

 

1,170

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

3,947

 

 

 

3,946

 

 

Deferred income taxes, net

 

 

865

 

 

 

874

 

 

Noncurrent operating lease liabilities

 

 

344

 

 

 

327

 

 

Noncurrent asset retirement obligations

 

 

388

 

 

 

383

 

 

Other noncurrent liabilities

 

 

390

 

 

 

389

 

 

Total Liabilities

 

 

7,363

 

 

 

7,089

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

Common stock, par value $0.01 per share (61,639,965 shares and 61,821,421 shares
   outstanding at March 31, 2024 and December 31, 2023, respectively)

 

 

1

 

 

 

1

 

 

Preferred stock, par value $0.01 per share

 

 

 

 

 

 

 

Additional paid-in capital

 

 

3,512

 

 

 

3,519

 

 

Accumulated other comprehensive loss

 

 

(49

)

 

 

(49

)

 

Retained earnings

 

 

5,411

 

 

 

4,563

 

 

Total Shareholders' Equity

 

 

8,875

 

 

 

8,034

 

 

Noncontrolling interests

 

 

2

 

 

 

2

 

 

Total Equity

 

 

8,877

 

 

 

8,036

 

 

Total Liabilities and Equity

 

$

16,240

 

 

$

15,125

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 3 of 35


 

 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

 

 

(In Millions, Except Per Share Data)

 

Total Revenues

 

$

1,251

 

 

$

1,354

 

Total cost of revenues

 

 

979

 

 

 

1,051

 

 

 

 

 

 

 

 

Gross Profit

 

 

272

 

 

 

303

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

118

 

 

 

104

 

Acquisition, divestiture and integration expenses

 

 

20

 

 

 

1

 

Other operating (income) expense, net

 

 

(1,287

)

 

 

2

 

Earnings from Operations

 

 

1,421

 

 

 

196

 

 

 

 

 

 

 

 

Interest expense

 

 

40

 

 

 

42

 

Other nonoperating income, net

 

 

(33

)

 

 

(17

)

Earnings from continuing operations before income
   tax expense

 

 

1,414

 

 

 

171

 

Income tax expense

 

 

368

 

 

 

36

 

Earnings from continuing operations

 

 

1,046

 

 

 

135

 

Loss from discontinued operations, net of
   income tax benefit

 

 

 

 

 

(13

)

Consolidated net earnings

 

 

1,046

 

 

 

122

 

Less: Net earnings attributable to noncontrolling interests

 

 

1

 

 

 

1

 

Net Earnings Attributable to Martin Marietta

 

$

1,045

 

 

$

121

 

 

 

 

 

 

 

 

Consolidated Comprehensive Earnings (See Note 1):

 

 

 

 

 

 

Earnings attributable to Martin Marietta

 

$

1,045

 

 

$

122

 

Earnings attributable to noncontrolling interests

 

 

1

 

 

 

1

 

 

$

1,046

 

 

$

123

 

Net Earnings (Loss) Attributable to Martin Marietta

 

 

 

 

 

 

Per Common Share:

 

 

 

 

 

 

Basic earnings per share from continuing operations attributable to
   common shareholders

 

$

16.92

 

 

$

2.17

 

Basic loss per share from discontinued operations attributable to
   common shareholders

 

 

 

 

 

(0.21

)

 

 

$

16.92

 

 

$

1.96

 

 

 

 

 

 

 

 

Diluted earnings per share from continuing operations attributable to
   common shareholders

 

$

16.87

 

 

$

2.16

 

Diluted loss per share from discontinued operations attributable to
   common shareholders

 

 

 

 

 

(0.21

)

 

 

$

16.87

 

 

$

1.95

 

 

 

 

 

 

 

 

Weighted-Average Common Shares Outstanding:

 

 

 

 

 

 

Basic

 

 

61.8

 

 

 

62.1

 

Diluted

 

 

62.0

 

 

 

62.2

 

 

See accompanying notes to the consolidated financial statements.

 

Page 4 of 35


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

 

 

(Dollars in Millions)

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Consolidated net earnings

 

$

1,046

 

 

$

122

 

Adjustments to reconcile consolidated net earnings to net cash
   provided by operating activities:

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

130

 

 

 

124

 

Stock-based compensation expense

 

 

15

 

 

 

14

 

Gain on divestitures and sales of assets

 

 

(1,333

)

 

 

(1

)

Deferred income taxes, net

 

 

(95

)

 

 

6

 

Noncash asset and portfolio rationalization charge

 

 

49

 

 

 

 

Other items, net

 

 

(2

)

 

 

(2

)

Changes in operating assets and liabilities, net of effects of
   acquisitions and divestitures:

 

 

 

 

 

 

Accounts receivable, net

 

 

55

 

 

 

(14

)

Inventories, net

 

 

(85

)

 

 

(82

)

Accounts payable

 

 

15

 

 

 

18

 

Other assets and liabilities, net

 

 

377

 

 

 

(24

)

Net Cash Provided by Operating Activities

 

 

172

 

 

 

161

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(200

)

 

 

(174

)

Acquisitions, net of cash acquired

 

 

(488

)

 

 

 

Proceeds from divestitures and sales of assets

 

 

2,107

 

 

 

22

 

Investments in life insurance contracts, net

 

 

6

 

 

 

4

 

Other investing activities, net

 

 

 

 

 

(4

)

Net Cash Provided by (Used for) Investing Activities

 

 

1,425

 

 

 

(152

)

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

Payments on finance lease obligations

 

 

(5

)

 

 

(4

)

Dividends paid

 

 

(46

)

 

 

(42

)

Repurchases of common stock

 

 

(150

)

 

 

(75

)

Distributions to owners of noncontrolling interest

 

 

(1

)

 

 

 

Shares withheld for employees’ income tax obligations

 

 

(27

)

 

 

(17

)

Net Cash Used for Financing Activities

 

 

(229

)

 

 

(138

)

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash

 

 

1,368

 

 

 

(129

)

Cash, Cash Equivalents and Restricted Cash, beginning of period

 

 

1,282

 

 

 

359

 

Cash, Cash Equivalents and Restricted Cash, end of period

 

$

2,650

 

 

$

230

 

 

See accompanying notes to the consolidated financial statements.

 

Page 5 of 35


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF TOTAL EQUITY

 

(In Millions, Except Share and Per Share Data)

 

Shares of Common Stock

 

 

Common Stock

 

 

Additional Paid-in Capital

 

 

Accumulated
Other Comprehensive
Loss

 

 

Retained Earnings

 

 

Total Shareholders' Equity

 

 

Noncontrolling Interests

 

 

Total Equity

 

Balance at December 31, 2022

 

 

62,102,353

 

 

$

1

 

 

$

3,489

 

 

$

(38

)

 

$

3,719

 

 

$

7,171

 

 

$

2

 

 

$

7,173

 

Consolidated net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

121

 

 

 

121

 

 

 

1

 

 

 

122

 

Other comprehensive earnings,
   net of tax

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Dividends declared ($0.66 per common share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(41

)

 

 

(41

)

 

 

 

 

 

(41

)

Issuances of common stock for
   stock award plans

 

 

69,374

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Shares withheld for employees'
   income tax obligations

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

(17

)

Repurchases of common stock

 

 

(203,770

)

 

 

 

 

 

 

 

 

 

 

 

(75

)

 

 

(75

)

 

 

 

 

 

(75

)

Stock-based compensation
   expense

 

 

 

 

 

 

 

 

14

 

 

 

 

 

 

 

 

 

14

 

 

 

 

 

 

14

 

Balance at March 31, 2023

 

 

61,967,957

 

 

$

1

 

 

$

3,487

 

 

$

(37

)

 

$

3,724

 

 

$

7,175

 

 

$

3

 

 

$

7,178

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2023

 

 

61,821,421

 

 

$

1

 

 

$

3,519

 

 

$

(49

)

 

$

4,563

 

 

$

8,034

 

 

$

2

 

 

$

8,036

 

Consolidated net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,045

 

 

 

1,045

 

 

 

1

 

 

 

1,046

 

Dividends declared ($0.74 per common share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(46

)

 

 

(46

)

 

 

 

 

 

(46

)

Issuances of common stock for
   stock award plans

 

 

74,145

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

 

5

 

Shares withheld for employees'
   income tax obligations

 

 

 

 

 

 

 

 

(27

)

 

 

 

 

 

 

 

 

(27

)

 

 

 

 

 

(27

)

Repurchases of common stock

 

 

(255,601

)

 

 

 

 

 

 

 

 

 

 

 

(151

)

 

 

(151

)

 

 

 

 

 

(151

)

Stock-based compensation
   expense

 

 

 

 

 

 

 

 

15

 

 

 

 

 

 

 

 

 

15

 

 

 

 

 

 

15

 

Distributions to owners of
   noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

Balance at March 31, 2024

 

 

61,639,965

 

 

$

1

 

 

$

3,512

 

 

$

(49

)

 

$

5,411

 

 

$

8,875

 

 

$

2

 

 

$

8,877

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 6 of 35


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1.
Significant Accounting Policies

Organization

Martin Marietta Materials, Inc. (the Company or Martin Marietta) is a natural resource-based building materials company. As of March 31, 2024, the Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 360 quarries, mines and distribution yards in 28 states, Canada and The Bahamas. Martin Marietta also provides cement and downstream products and services, namely, ready mixed concrete, asphalt and paving, in vertically-integrated structured markets where the Company also has a leading aggregates position. The Company’s heavy-side building materials are used in infrastructure, nonresidential and residential construction projects. Aggregates are also used in agricultural, utility and environmental applications and as railroad ballast. The aggregates, cement and ready mixed concrete and asphalt and paving product lines are reported collectively as the “Building Materials” business.

The Company’s Building Materials business includes two reportable segments: the East Group and the West Group.

 

BUILDING MATERIALS BUSINESS

Reportable Segments

East Group

West Group

Operating Locations

Alabama, Florida, Georgia, Indiana,
Iowa, Kansas, Kentucky, Maryland,
Minnesota, Missouri,
Nebraska, North Carolina, Ohio,
Pennsylvania, South Carolina,
Tennessee, Virginia, West Virginia,
Nova Scotia and The Bahamas

Arizona, Arkansas, California, Colorado, Louisiana, Oklahoma, Texas, Utah,
Washington and Wyoming

 

 

 

 

 

 

Product Lines

 

Aggregates and Asphalt

 

Aggregates, Cement and Ready Mixed Concrete, Asphalt and Paving

The Company’s Magnesia Specialties business, which represents a separate reportable segment, has manufacturing facilities in Manistee, Michigan, and Woodville, Ohio. The Magnesia Specialties business produces magnesia-based chemicals products used in industrial, agricultural and environmental applications, and dolomitic lime sold primarily to customers for steel production and soil stabilization.

Basis of Presentation and Use of Estimates

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and in Article 10 of Regulation S-X. The Company has continued to follow the accounting policies set forth in the audited consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, the interim consolidated financial information provided herein reflects all adjustments, consisting of normal recurring accruals, necessary for a fair statement of the results of operations, financial position and cash flows for the interim periods. The consolidated results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results expected for other interim periods or the full year. The consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by U.S. GAAP for complete financial statements. These

Page 7 of 35


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The preparation of the Company’s consolidated financial statements requires management to make certain estimates and assumptions about future events. As future events and their effects cannot be fully determined with precision, actual results could differ significantly from estimates. Changes in estimates are reflected in the consolidated financial statements in the period in which the change in estimate occurs.

Restricted Cash

At March 31, 2024 and December 31, 2023, the Company had restricted cash of $2 million and $10 million, respectively. The 2024 amount is designated to collateralize certain letters of credit, while the 2023 amount was invested in an account designated for the purchase of like-kind exchange replacement assets under Section 1031 of the Internal Revenue Code and related IRS procedures (Section 1031). The Company was restricted from utilizing the 2023 cash for purposes other than the purchase of qualified assets for 180 days from receipt of the proceeds from the sale of the exchanged property. Any unused restricted cash at the end of the 180 days is transferred to unrestricted accounts of the Company and used for general corporate purposes.

The statements of cash flows reflect cash flow changes and balances for cash, cash equivalents and restricted cash on an aggregated basis. The following table reconciles cash, cash equivalents and restricted cash as reported on the consolidated balance sheets to the aggregated amounts presented on the consolidated statements of cash flows:

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

(Dollars in Millions)

 

Cash and cash equivalents

 

$

2,648

 

 

$

1,272

 

Restricted cash

 

 

2

 

 

 

10

 

Total cash, cash equivalents and restricted cash
   presented in the consolidated statements of cash flows

 

$

2,650

 

 

$

1,282

 

 

Consolidated Comprehensive Earnings and Accumulated Other Comprehensive Loss

Consolidated comprehensive earnings consist of consolidated net earnings, adjustments for the funded status of pension and postretirement benefit plans and foreign currency translation adjustments, and are presented in the Company’s consolidated statements of earnings and comprehensive earnings.

Consolidated comprehensive earnings attributable to Martin Marietta are as follows:

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

 

 

(Dollars in Millions)

 

Net earnings attributable to Martin Marietta

 

$

1,045

 

 

$

121

 

Other comprehensive earnings, net of tax

 

 

 

 

 

1

 

Consolidated comprehensive earnings
   attributable to Martin Marietta

 

$

1,045

 

 

$

122

 

 

Page 8 of 35


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

Accumulated other comprehensive loss consists of unrecognized gains and losses related to the funded status of the pension and postretirement benefit plans and foreign currency translation adjustments and is presented on the Company’s consolidated balance sheets.

The components of the changes in accumulated other comprehensive loss, net of tax, are as follows:

 

 

 

(Dollars in Millions)

 

 

 

Pension and
Postretirement Benefit Plans

 

 

Foreign Currency

 

 

Accumulated
Other Comprehensive
Loss

 

 

 

Three Months Ended March 31, 2024

 

Balance at beginning of period

 

$

(48

)

 

$

(1

)

 

$

(49

)

Other comprehensive loss before reclassifications,
   net of tax

 

 

 

 

 

(1

)

 

 

(1

)

Amounts reclassified from accumulated other
   comprehensive loss, net of tax

 

 

1

 

 

 

 

 

 

1

 

Other comprehensive earnings (loss), net of tax

 

 

1

 

 

 

(1

)

 

 

 

Balance at end of period

 

$

(47

)

 

$

(2

)

 

$

(49

)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2023

 

Balance at beginning of period

 

$

(36

)

 

$

(2

)

 

$

(38

)

Amounts reclassified from accumulated other
   comprehensive loss, net of tax

 

 

1

 

 

 

 

 

 

1

 

Other comprehensive earnings, net of tax

 

 

1

 

 

 

 

 

 

1

 

Balance at end of period

 

$

(35

)

 

$

(2

)

 

$

(37

)

Changes in net noncurrent deferred tax assets related to accumulated other comprehensive loss are as follows:

 

 

 

Pension and Postretirement Benefit Plans

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

 

 

(Dollars in Millions)

 

Balance at beginning of period

 

$

54

 

 

$

50

 

Tax effect of other comprehensive
   earnings

 

 

(1

)

 

 

 

Balance at end of period

 

$

53

 

 

$

50

 

 

Page 9 of 35


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

Reclassifications out of accumulated other comprehensive loss are as follows:

 

 

 

Three Months Ended

 

 

Affected line items in the consolidated

 

 

March 31,

 

 

statements of earnings

 

 

2024

 

 

2023

 

 

and comprehensive earnings

 

 

(Dollars in Millions)

 

Pension and postretirement
   benefit plans

 

 

 

 

 

 

 

 

Amortization of prior service cost

 

 

2

 

 

 

1

 

 

Other nonoperating income, net

Tax effect

 

 

(1

)

 

 

Income tax expense

Total

 

$

1

 

 

1

 

 

Earnings per Common Share

The numerator for basic and diluted earnings per common share is net earnings attributable to Martin Marietta. The denominator for basic earnings per common share is the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is computed assuming that the weighted-average number of common shares is increased by the conversion, using the treasury stock method, of awards to be issued to employees and nonemployee members of the Company’s Board of Directors under certain stock-based compensation arrangements if the conversion is dilutive. For the three months ended March 31, 2024 and 2023, the diluted per-share computations reflect the number of common shares outstanding including the number of additional shares that would have been outstanding if the potentially dilutive common shares had been issued.

The following table reconciles the denominator for basic and diluted earnings from continuing operations per common share:

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

 

 

(In Millions)

 

Basic weighted-average common shares outstanding

 

 

61.8

 

 

 

62.1

 

Effect of dilutive employee and director awards

 

 

0.2

 

 

 

0.1

 

Diluted weighted-average common shares outstanding

 

 

62.0

 

 

 

62.2

 

 

Page 10 of 35


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

New Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker. The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This ASU requires companies to apply retrospectively to all prior periods presented in the financial statements. The ASU will impact the Company's disclosures, but will have no impacts to its results of operations, cash flows and financial condition.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid. ASU 2023-09 requires public entities to disclose, on annual basis, a tabular tax rate reconciliation using both percentages and currency amounts with specific categories, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. Additionally, all entities are required to disclose income taxes paid, net of refunds received, disaggregated by federal, state, local, and foreign taxes and by individual jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. The ASU also requires additional qualitative disclosures. ASU 2023-09 is effective prospectively for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted. The ASU will impact the Company's income tax disclosures, but not its results of operations, cash flows and financial condition.

Reclassifications

Certain reclassifications have been made in the Company's financial statements of the prior year to conform to the current-year presentation. The reclassifications had no impact on the Company’s previously reported results of operations, financial position or cash flows.

2.
Business Combinations, Divestitures, Discontinued Operations and Assets and Liabilities Held for Sale

Business Combinations

On January 12, 2024, the Company acquired Albert Frei & Sons, Inc. (AFS), a leading aggregates producer in Colorado. This acquisition provides more than 60 years (at 2023 production levels) of high-quality, hard rock reserves to better serve new and existing customers and enhances the Company's aggregates platform in the high-growth Denver metropolitan area. The Company has recorded preliminary fair values of the assets acquired and liabilities assumed, which are subject to additional reviews, such as asset verification, that are not yet complete. Thus, these amounts are subject to change during the measurement period, which remains open as of March 31, 2024. The goodwill generated by the transaction is not deductible for income tax purposes. The acquisition is reported in the Company's West Group but is immaterial for pro-forma financial statement disclosures.

On February 11, 2024, the Company entered into a definitive agreement to acquire 20 active aggregates operations in Alabama, South Carolina, South Florida, Tennessee, and Virginia from affiliates of Blue Water Industries LLC (BWI Southeast) for $2.05 billion of cash on hand. The BWI Southeast acquisition complements Martin Marietta’s existing geographic footprint in the dynamic southeast region by allowing the Company to expand into new growth platforms in target markets including Nashville and Miami. The transaction closed on April 5, 2024 and the Company is in the process of determining the acquisition-date fair values of assets acquired and liabilities assumed.

Page 11 of 35


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

Divestitures

On February 9, 2024, the Company completed the sale of its South Texas cement business and certain of its related ready mixed concrete operations to CRH Americas Materials, Inc., a subsidiary of CRH plc, for $2.10 billion in cash. Specifically, the divested facilities included the Hunter cement plant in New Braunfels, Texas, related cement distribution terminals and 20 ready mixed concrete plants that served the Austin and San Antonio region, all of which were classified as assets held for sale as of December 31, 2023. The divestiture provided additional balance sheet flexibility to redeploy net proceeds into pure-play aggregates acquisitions. The transaction resulted in a pretax gain of $1.3 billion, which is included in Other operating (income) expense, net, on the Company's consolidated statement of earnings and comprehensive earnings for the three months ended March 31, 2024 and is exclusive of expenses incurred due to the divestiture. The divested operations and the gain on divestiture are reported in the West Group.

Discontinued Operations

For the three months ended March 31, 2023, discontinued operations included the Company's Tehachapi, California cement plant, which was divested in October 2023, and the Stockton, California cement import terminal, which was divested in May 2023. There were no discontinued operations for the three months ended March 31, 2024.

Financial results for the Company's discontinued operations are as follows:

 

 

 

Three Months Ended

 

 

 

March 31, 2023

 

 

 

(Dollars in Millions)

 

Total revenues

 

$

25

 

 

 

 

 

Pretax loss from discontinued operations

 

$

(17

)

Income tax benefit

 

 

(4

)

Loss from discontinued operations,
   net of income tax benefit

 

$

(13

)

Cash flow information for the Company's discontinued operations is as follows:

 

 

 

Three Months Ended

 

 

 

March 31, 2023

 

 

 

(Dollars in Millions)

 

Net cash used for operating activities

 

$

(4

)

Net cash used for investing activities (capital expenditures)

 

$

(2

)

 

Page 12 of 35


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

Assets and Liabilities Held for Sale

Assets and liabilities held for sale at March 31, 2024 included certain nonoperating land. At December 31, 2023, assets and liabilities held for sale also included the South Texas cement plant, related cement distribution terminals and 20 ready mixed concrete plants that were sold in February 2024.

Assets and liabilities held for sale are as follows:

 

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

Continuing Operations

 

 

 

(Dollars in Millions)

 

Inventories, net

 

$

 

 

$

61

 

Investment land

 

 

18

 

 

 

18

 

Other assets

 

 

 

 

 

4

 

Property, plant and equipment

 

 

 

 

 

327

 

Intangible assets, excluding goodwill

 

 

 

 

 

122

 

Operating lease right-of-use assets

 

 

 

 

 

15