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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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 June 30, 2020

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 Number)

 

2710 Wycliff Road, Raleigh, NC

 

27607-3033

(Address of principal executive offices)

 

(Zip Code)

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

Former name, former address and former fiscal year, if changes since last report: None

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

NYSE

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, a 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 Securities 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 July 21, 2020

Common Stock, $0.01 par value

 

62,268,855

 

 

 

 


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

 

 

Page

Part I. Financial Information:

 

 

 

 

 

Item 1. Financial Statements

 

 

 

 

 

Consolidated Balance Sheets – June 30, 2020 and December 31, 2019

 

3

 

 

 

Consolidated Statements of Earnings and Comprehensive Earnings – Three and Six Months Ended June 30, 2020 and 2019

 

4

 

 

 

Consolidated Statements of Cash Flows – Six Months Ended June 30, 2020 and 2019

 

5

 

 

 

Consolidated Statement of Total Equity – Three and Six Months Ended June 30, 2020 and 2019

 

6

 

 

 

Notes to Consolidated Financial Statements

 

8

 

 

 

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

 

24

 

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

47

 

 

 

Item 4. Controls and Procedures

 

48

 

 

 

Part II. Other Information:

 

 

 

 

 

Item 1. Legal Proceedings

 

49

 

 

 

Item 1A. Risk Factors

 

49

 

 

 

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

 

50

 

 

 

Item 4. Mine Safety Disclosures

 

50

 

 

 

Item 6. Exhibits

 

51

 

 

 

Signatures

 

52

 

 

 

 

 

 

Page 2 of 52


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions, Except Par Value Data)

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

70.1

 

 

$

21.0

 

Accounts receivable, net

 

 

690.4

 

 

 

573.7

 

Inventories, net

 

 

712.9

 

 

 

690.8

 

Other current assets

 

 

113.7

 

 

 

141.2

 

Total Current Assets

 

 

1,587.1

 

 

 

1,426.7

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

8,737.8

 

 

 

8,633.5

 

Allowances for depreciation, depletion and amortization

 

 

(3,577.3

)

 

 

(3,427.5

)

Net property, plant and equipment

 

 

5,160.5

 

 

 

5,206.0

 

Goodwill

 

 

2,397.5

 

 

 

2,396.8

 

Other intangibles, net

 

 

481.0

 

 

 

486.8

 

Operating lease right-of-use assets, net

 

 

468.0

 

 

 

481.9

 

Other noncurrent assets

 

 

132.5

 

 

 

133.4

 

Total Assets

 

$

10,226.6

 

 

$

10,131.6

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

197.2

 

 

$

229.6

 

Accrued salaries, benefits and payroll taxes

 

 

43.4

 

 

 

56.7

 

Accrued insurance and other taxes

 

 

58.2

 

 

 

63.1

 

Current maturities of long-term debt and short-term

   facilities

 

 

130.0

 

 

 

340.0

 

Operating lease liabilities

 

 

51.4

 

 

 

52.7

 

Other current liabilities

 

 

115.1

 

 

 

96.4

 

Total Current Liabilities

 

 

595.3

 

 

 

838.5

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

2,624.5

 

 

 

2,433.6

 

Deferred income taxes, net

 

 

741.2

 

 

 

733.0

 

Noncurrent operating lease liabilities

 

 

420.7

 

 

 

433.9

 

Other noncurrent liabilities

 

 

351.3

 

 

 

339.3

 

Total Liabilities

 

 

4,733.0

 

 

 

4,778.3

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Common stock, par value $0.01 per share

 

 

0.6

 

 

 

0.6

 

Preferred stock, par value $0.01 per share

 

 

 

 

 

 

Additional paid-in capital

 

 

3,431.0

 

 

 

3,418.8

 

Accumulated other comprehensive loss

 

 

(142.2

)

 

 

(145.8

)

Retained earnings

 

 

2,201.7

 

 

 

2,077.2

 

Total Shareholders' Equity

 

 

5,491.1

 

 

 

5,350.8

 

Noncontrolling interests

 

 

2.5

 

 

 

2.5

 

Total Equity

 

 

5,493.6

 

 

 

5,353.3

 

Total Liabilities and Equity

 

$

10,226.6

 

 

$

10,131.6

 

 

See accompanying notes to the consolidated financial statements.

 

Page 3 of 52


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(In Millions, Except Per Share Data)

 

Products and services revenues

 

$

1,189.5

 

 

$

1,196.1

 

 

$

2,080.5

 

 

$

2,074.4

 

Freight revenues

 

 

81.1

 

 

 

83.4

 

 

 

148.4

 

 

 

144.0

 

Total Revenues

 

 

1,270.6

 

 

 

1,279.5

 

 

 

2,228.9

 

 

 

2,218.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues - products and services

 

 

807.4

 

 

 

838.3

 

 

 

1,554.8

 

 

 

1,572.5

 

Cost of revenues - freight

 

 

82.7

 

 

 

84.3

 

 

 

151.2

 

 

 

146.1

 

Total Cost of Revenues

 

 

890.1

 

 

 

922.6

 

 

 

1,706.0

 

 

 

1,718.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

380.5

 

 

 

356.9

 

 

 

522.9

 

 

 

499.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general & administrative expenses

 

 

71.2

 

 

 

72.4

 

 

 

149.9

 

 

 

150.7

 

Acquisition-related expenses

 

 

0.5

 

 

 

 

 

 

0.8

 

 

 

0.2

 

Other operating expenses and (income), net

 

 

2.4

 

 

 

(1.4

)

 

 

8.0

 

 

 

(6.2

)

Earnings from Operations

 

 

306.4

 

 

 

285.9

 

 

 

364.2

 

 

 

355.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

31.2

 

 

 

33.3

 

 

 

61.0

 

 

 

66.2

 

Other nonoperating (income) and expenses, net

 

 

(3.8

)

 

 

13.2

 

 

 

(1.9

)

 

 

11.7

 

Earnings before income tax expense

 

 

279.0

 

 

 

239.4

 

 

 

305.1

 

 

 

277.2

 

Income tax expense

 

 

61.4

 

 

 

49.9

 

 

 

61.6

 

 

 

44.9

 

Consolidated net earnings

 

 

217.6

 

 

 

189.5

 

 

 

243.5

 

 

 

232.3

 

Less: Net earnings attributable to noncontrolling

   interests

 

 

 

 

 

 

 

 

 

 

 

 

Net Earnings Attributable to Martin Marietta Materials, Inc.

 

$

217.6

 

 

$

189.5

 

 

$

243.5

 

 

$

232.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Comprehensive Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings attributable to Martin Marietta Materials, Inc.

 

$

220.8

 

 

$

192.5

 

 

$

247.1

 

 

$

238.6

 

Earnings attributable to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

220.8

 

 

$

192.5

 

 

$

247.1

 

 

$

238.6

 

Net Earnings Attributable to Martin Marietta Materials, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic attributable to common shareholders

 

$

3.49

 

 

$

3.02

 

 

$

3.91

 

 

$

3.71

 

Diluted attributable to common shareholders

 

$

3.49

 

 

$

3.01

 

 

$

3.90

 

 

$

3.69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-Average Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

62.3

 

 

 

62.6

 

 

 

62.3

 

 

 

62.6

 

Diluted

 

 

62.3

 

 

 

62.7

 

 

 

62.4

 

 

 

62.7

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 4 of 52


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

Consolidated net earnings

 

$

243.5

 

 

$

232.3

 

Adjustments to reconcile consolidated net earnings to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

193.4

 

 

 

182.0

 

Stock-based compensation expense

 

 

19.7

 

 

 

22.3

 

Gain on divestitures and sales of assets

 

 

(3.1

)

 

 

(3.9

)

Deferred income taxes

 

 

6.6

 

 

 

(6.4

)

Other items, net

 

 

1.2

 

 

 

14.9

 

Changes in operating assets and liabilities, net of effects of

   acquisitions and divestitures:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(117.4

)

 

 

(187.1

)

Inventories, net

 

 

(21.7

)

 

 

15.7

 

Accounts payable

 

 

(0.5

)

 

 

36.6

 

Other assets and liabilities, net

 

 

51.5

 

 

 

27.3

 

Net Cash Provided by Operating Activities

 

 

373.2

 

 

 

333.7

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(175.7

)

 

 

(207.4

)

Acquisitions, net

 

 

(2.3

)

 

 

 

Proceeds from divestitures and sales of assets

 

 

17.9

 

 

 

6.0

 

Investments in life insurance contracts, net

 

 

(6.2

)

 

 

0.5

 

Other investing activities, net

 

 

(4.5

)

 

 

(1.0

)

Net Cash Used for Investing Activities

 

 

(170.8

)

 

 

(201.9

)

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Borrowings of debt

 

 

618.0

 

 

 

165.0

 

Repayments of debt

 

 

(637.0

)

 

 

(170.0

)

Payments on financing leases

 

 

(1.6

)

 

 

(1.8

)

Debt issuance costs

 

 

(1.7

)

 

 

 

Distributions to owners of noncontrolling interest

 

 

 

 

 

(0.6

)

Repurchases of common stock

 

 

(50.0

)

 

 

(50.0

)

Dividends paid

 

 

(69.4

)

 

 

(60.6

)

Proceeds from exercise of stock options

 

 

1.3

 

 

 

7.1

 

Shares withheld for employees' income tax obligations

 

 

(12.9

)

 

 

(12.2

)

Net Cash Used for Financing Activities

 

 

(153.3

)

 

 

(123.1

)

Net Increase in Cash and Cash Equivalents

 

 

49.1

 

 

 

8.7

 

Cash and Cash Equivalents, beginning of period

 

 

21.0

 

 

 

44.9

 

Cash and Cash Equivalents, end of period

 

$

70.1

 

 

$

53.6

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 5 of 52


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF TOTAL EQUITY

 

(In Millions, Except 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 March 31, 2020

 

 

62.2

 

 

$

0.6

 

 

$

3,423.1

 

 

$

(145.4

)

 

$

2,018.6

 

 

$

5,296.9

 

 

$

2.5

 

 

$

5,299.4

 

Consolidated net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

217.6

 

 

 

217.6

 

 

 

 

 

 

217.6

 

Other comprehensive earnings,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

3.2

 

 

 

 

 

 

3.2

 

 

 

 

 

 

3.2

 

Dividends declared ($0.55 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34.5

)

 

 

(34.5

)

 

 

 

 

 

(34.5

)

Issuances of common stock for stock

   award plans

 

 

0.1

 

 

 

 

 

 

1.1

 

 

 

 

 

 

 

 

 

1.1

 

 

 

 

 

 

1.1

 

Shares withheld for employees'

   income tax obligations

 

 

 

 

 

 

 

 

(0.4

)

 

 

 

 

 

 

 

 

(0.4

)

 

 

 

 

 

(0.4

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

7.2

 

 

 

 

 

 

 

 

 

7.2

 

 

 

 

 

 

7.2

 

Balance at June 30, 2020

 

 

62.3

 

 

$

0.6

 

 

$

3,431.0

 

 

$

(142.2

)

 

$

2,201.7

 

 

$

5,491.1

 

 

$

2.5

 

 

$

5,493.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2019

 

 

62.4

 

 

$

0.6

 

 

$

3,418.8

 

 

$

(145.8

)

 

$

2,077.2

 

 

$

5,350.8

 

 

$

2.5

 

 

$

5,353.3

 

Consolidated net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

243.5

 

 

 

243.5

 

 

 

 

 

 

243.5

 

Other comprehensive earnings,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

3.6

 

 

 

 

 

 

3.6

 

 

 

 

 

 

3.6

 

Dividends declared ($1.10 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(69.0

)

 

 

(69.0

)

 

 

 

 

 

(69.0

)

Issuances of common stock for stock

   award plans

 

 

0.1

 

 

 

 

 

 

5.6

 

 

 

 

 

 

 

 

 

5.6

 

 

 

 

 

 

5.6

 

Shares withheld for employees'

   income tax obligations

 

 

 

 

 

 

 

 

(13.1

)

 

 

 

 

 

 

 

 

(13.1

)

 

 

 

 

 

(13.1

)

Repurchases of common stock

 

 

(0.2

)

 

 

 

 

 

 

 

 

 

 

 

(50.0

)

 

 

(50.0

)

 

 

 

 

 

(50.0

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

19.7

 

 

 

 

 

 

 

 

 

19.7

 

 

 

 

 

 

19.7

 

Balance at June 30, 2020

 

 

62.3

 

 

$

0.6

 

 

$

3,431.0

 

 

$

(142.2

)

 

$

2,201.7

 

 

$

5,491.1

 

 

$

2.5

 

 

$

5,493.6

 

 

See accompanying notes to the consolidated financial statements.

 

Page 6 of 52


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF TOTAL EQUITY (Continued)

 

(In Millions, Except 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 March 31, 2019

 

 

62.6

 

 

$

0.6

 

 

$

3,406.5

 

 

$

(140.3

)

 

$

1,705.7

 

 

$

4,972.5

 

 

$

3.0

 

 

$

4,975.5

 

Consolidated net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

189.5

 

 

 

189.5

 

 

 

 

 

 

189.5

 

Other comprehensive earnings,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

3.0

 

 

 

 

 

 

3.0

 

 

 

 

 

 

3.0

 

Dividends declared ($0.48 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30.2

)

 

 

(30.2

)

 

 

 

 

 

(30.2

)

Issuances of common stock for stock

   award plans

 

 

 

 

 

 

 

 

6.5

 

 

 

 

 

 

 

 

 

6.5

 

 

 

 

 

 

6.5

 

Shares withheld for employees'

   income tax obligations

 

 

 

 

 

 

 

 

(5.1

)

 

 

 

 

 

 

 

 

(5.1

)

 

 

 

 

 

(5.1

)

Repurchases of common stock

 

 

(0.2

)

 

 

 

 

 

 

 

 

 

 

 

(50.0

)

 

 

(50.0

)

 

 

 

 

 

(50.0

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

8.7

 

 

 

 

 

 

 

 

 

8.7

 

 

 

 

 

 

8.7

 

Distributions to owners of

   noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.6

)

 

 

(0.6

)

Balance at June 30, 2019

 

 

62.4

 

 

$

0.6

 

 

$

3,416.6

 

 

$

(137.3

)

 

$

1,815.0

 

 

$

5,094.9

 

 

$

2.4

 

 

$

5,097.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2018

 

 

62.5

 

 

$

0.6

 

 

$

3,396.1

 

 

$

(143.6

)

 

$

1,693.3

 

 

$

4,946.4

 

 

$

3.0

 

 

$

4,949.4

 

Consolidated net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

232.3

 

 

 

232.3

 

 

 

 

 

 

232.3

 

Other comprehensive earnings,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

6.3

 

 

 

 

 

 

6.3

 

 

 

 

 

 

6.3

 

Dividends declared ($0.96 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(60.6

)

 

 

(60.6

)

 

 

 

 

 

(60.6

)

Issuances of common stock for stock

   award plans

 

 

0.1

 

 

 

 

 

 

10.5

 

 

 

 

 

 

 

 

 

10.5

 

 

 

 

 

 

10.5

 

Shares withheld for employees'

  income tax obligations

 

 

 

 

 

 

 

 

(12.3

)

 

 

 

 

 

 

 

 

(12.3

)

 

 

 

 

 

(12.3

)

Repurchases of common stock

 

 

(0.2

)

 

 

 

 

 

 

 

 

 

 

 

(50.0

)

 

 

(50.0

)

 

 

 

 

 

(50.0

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

22.3

 

 

 

 

 

 

 

 

 

22.3

 

 

 

 

 

 

22.3

 

Distributions to owners of

   noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.6

)

 

 

(0.6

)

Balance at June 30, 2019

 

 

62.4

 

 

$

0.6

 

 

$

3,416.6

 

 

$

(137.3

)

 

$

1,815.0

 

 

$

5,094.9

 

 

$

2.4

 

 

$

5,097.3

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 7 of 52


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(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. The Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 300 quarries, mines and distribution yards in 27 states, Canada and The Bahamas.  In the southwestern and western United States, 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 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, ready mixed concrete and asphalt and paving product lines are reported collectively as the “Building Materials” business.

Effective January 1, 2020, the Company moved the management of its one quarry in the state of Washington from the Mid-America Group to the West Group, resulting in an immaterial change to its reportable segments. The Company’s Building Materials business includes three reportable segments: the Mid-America Group, the Southeast Group and the West Group.

 

BUILDING MATERIALS BUSINESS

Reportable Segments

  

Mid-America Group

  

Southeast Group

  

West Group

Operating Locations

  

Indiana, Iowa, northern Kansas, Kentucky, Maryland, Minnesota, Missouri, eastern Nebraska, North Carolina, Ohio, Pennsylvania,
South Carolina, Virginia
and West Virginia

  

Alabama, Florida, Georgia, southwestern South Carolina, Tennessee, Nova Scotia and The Bahamas

  

Arkansas, Colorado, southern Kansas, Louisiana, western Nebraska, Nevada, Oklahoma, Texas, Utah, Wyoming
and Washington

 

 

 

 

 

 

 

 

Product Lines

 

Aggregates

 

Aggregates

 

Aggregates, Cement, Ready Mixed Concrete, Asphalt and Paving

The Company has a Magnesia Specialties business with 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 in the steel and mining industries.

Basis of Presentation

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, 2019. 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 and six months ended June 30, 2020 are not indicative of the results expected for other interim periods or the full year. The consolidated

 

Page 8 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

balance sheet at December 31, 2019 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 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, 2019.

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, including the impact of the coronavirus (COVID-19) pandemic and the related responses, 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.

New Accounting Pronouncement

Credit Losses

Effective January 1, 2020, the Company adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments – Credit Losses (ASU 2016-13), which includes a current expected credit loss (CECL) model that requires an entity to estimate credit losses expected over the life of an exposure or pool of exposures based on historical information, current information and reasonable and supportable forecasts at the time the asset is recognized and is remeasured at each reporting period. ASU 2016-13 primarily relates to the Company’s receivables, but the scope also includes retainage and contract assets related to its paving business. The adoption of ASU 2016-13 did not have a material impact on the Company’s financial position or statement of earnings and comprehensive earnings. The Company amended its allowance for credit losses policy, which follows, for the implementation of ASU 2016-13.

The Company records an allowance for credit losses, which includes a provision for probable losses based on historical write-offs, adjusted for current conditions as deemed necessary, and a specific reserve for accounts deemed at risk. The allowance is the Company’s estimate for receivables as of the balance sheet date that ultimately will not be collected. Any changes in the allowance are reflected in earnings in the period in which the change occurs.  The Company writes-off accounts receivable when it becomes probable, based upon customer facts and circumstances, that such amounts will not be collected.

Consolidated Comprehensive Earnings/Loss and Accumulated Other Comprehensive Loss

Consolidated comprehensive earnings/loss and accumulated other comprehensive loss consist of consolidated net earnings or loss; 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.

Comprehensive earnings attributable to Martin Marietta is as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Net earnings attributable to Martin Marietta

 

$

217.6

 

 

$

189.5

 

 

$

243.5

 

 

$

232.3

 

Other comprehensive earnings, net of tax

 

 

3.2

 

 

 

3.0

 

 

 

3.6

 

 

 

6.3

 

Comprehensive earnings attributable to Martin

   Marietta

 

$

220.8

 

 

$

192.5

 

 

$

247.1

 

 

$

238.6

 

 

 

Page 9 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

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 June 30, 2020

 

Balance at beginning of period

 

$

(142.4

)

 

$

(3.0

)

 

$

(145.4

)

Other comprehensive earnings before reclassifications,

   net of tax

 

 

 

 

 

0.8

 

 

 

0.8

 

Amounts reclassified from accumulated other

   comprehensive loss, net of tax

 

 

2.4

 

 

 

 

 

 

2.4

 

Other comprehensive earnings, net of tax

 

 

2.4

 

 

 

0.8

 

 

 

3.2

 

Balance at end of period

 

$

(140.0

)

 

$

(2.2

)

 

$

(142.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2019

 

Balance at beginning of period

 

$

(138.7

)

 

$

(1.6

)

 

$

(140.3

)

Other comprehensive earnings before reclassifications,

   net of tax

 

 

 

 

 

0.3

 

 

 

0.3

 

Amounts reclassified from accumulated other

   comprehensive loss, net of tax

 

 

2.7

 

 

 

 

 

 

2.7

 

Other comprehensive earnings, net of tax

 

 

2.7

 

 

 

0.3

 

 

 

3.0

 

Balance at end of period

 

$

(136.0

)

 

$

(1.3

)

 

$

(137.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in Millions)

 

 

 

Pension and

Postretirement Benefit Plans

 

 

Foreign Currency

 

 

Accumulated

Other Comprehensive

Loss

 

 

 

Six Months Ended June 30, 2020

 

Balance at beginning of period

 

$

(144.9

)

 

$

(0.9

)

 

$

(145.8

)

Other comprehensive loss before

   reclassifications, net of tax

 

 

 

 

 

(1.3

)

 

 

(1.3

)

Amounts reclassified from accumulated

   other comprehensive loss, net of tax

 

 

4.9

 

 

 

 

 

 

4.9

 

Other comprehensive earnings (loss), net of tax

 

 

4.9

 

 

 

(1.3

)

 

 

3.6

 

Balance at end of period

 

$

(140.0

)

 

$

(2.2

)

 

$

(142.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2019

 

Balance at beginning of period

 

$

(141.5

)

 

$

(2.1

)

 

$

(143.6

)

Other comprehensive earnings before

   reclassifications, net of tax

 

 

 

 

 

0.8

 

 

 

0.8

 

Amounts reclassified from accumulated

   other comprehensive loss, net of tax

 

 

5.5

 

 

 

 

 

 

5.5

 

Other comprehensive earnings, net of tax

 

 

5.5

 

 

 

0.8

 

 

 

6.3

 

Balance at end of period

 

$

(136.0

)

 

$

(1.3

)

 

$

(137.3

)

 

Page 10 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

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

 

 

 

Pension and Postretirement Benefit Plans

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Balance at beginning of period

 

$

84.4

 

 

$

83.3

 

 

$

85.2

 

 

$

84.2

 

Tax effect of other comprehensive earnings

 

 

(0.8

)

 

 

(0.9

)

 

 

(1.6

)

 

 

(1.8

)

Balance at end of period

 

$

83.6

 

 

$

82.4

 

 

$

83.6

 

 

$

82.4

 

Reclassifications out of accumulated other comprehensive loss are as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

Affected line items in the consolidated

 

 

June 30,

 

 

June 30,

 

 

statements of earnings and

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

comprehensive earnings

 

 

(Dollars in Millions)

 

 

 

Pension and postretirement

   benefit plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service credit

 

$

 

 

$

(0.2

)

 

$

(0.1

)

 

$

(0.4

)

 

 

Actuarial loss

 

 

3.2

 

 

 

3.8

 

 

 

6.6

 

 

 

7.7

 

 

 

 

 

 

3.2

 

 

 

3.6

 

 

 

6.5

 

 

 

7.3

 

 

Other nonoperating (income) and expenses, net

Tax benefit

 

 

(0.8

)

 

 

(0.9

)

 

 

(1.6

)

 

 

(1.8

)

 

Income tax expense

 

 

$

2.4

 

 

$

2.7

 

 

$

4.9

 

 

$

5.5

 

 

 

Earnings per Common Share

The numerator for basic and diluted earnings per common share is net earnings attributable to Martin Marietta reduced by dividends and undistributed earnings attributable to certain of the Company’s stock-based compensation. If there is a net loss, no amount of the undistributed loss is attributed to unvested participating securities. 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 are 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 and six months ended June 30, 2020 and 2019, the diluted per-share computations reflect the number of common shares outstanding to include the number of additional shares that would have been outstanding if the potentially dilutive common shares had been issued.

Page 11 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

The following table reconciles the numerator and denominator for basic and diluted earnings per common share:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(In Millions)

 

Net earnings attributable to Martin Marietta

 

$

217.6

 

 

$

189.5

 

 

$

243.5

 

 

$

232.3

 

Less: Distributed and undistributed earnings

   attributable to unvested awards

 

 

0.2

 

 

 

0.4

 

 

 

0.2

 

 

 

0.5

 

Basic and diluted net earnings available to common

   shareholders attributable to Martin Marietta

 

$

217.4

 

 

$

189.1

 

 

$

243.3

 

 

$

231.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted-average common shares outstanding

 

 

62.3

 

 

 

62.6

 

 

 

62.3

 

 

 

62.6

 

Effect of dilutive employee and director awards

 

 

 

 

 

0.1

 

 

 

0.1

 

 

 

0.1

 

Diluted weighted-average common shares

   outstanding

 

 

62.3

 

 

 

62.7

 

 

 

62.4

 

 

 

62.7

 

 

2.

Revenue Recognition

Total revenues include sales of products and services to customers, net of any discounts or allowances, and freight revenues. Product revenues are recognized when control of the promised good is transferred to the customer, typically when finished products are shipped. Intersegment and interproduct revenues are eliminated in consolidation. Service revenues are derived from the paving business and recognized using the percentage-of-completion method under the cost-to-cost approach. Freight revenues reflect delivery arranged by the Company using a third party on behalf of the customer and are recognized consistently with the timing of the product revenues.

Performance Obligations. Performance obligations are contractual promises to transfer or provide a distinct good or service for a stated price. The Company’s product sales agreements are single-performance obligations that are satisfied at a point in time. Performance obligations within paving service agreements are satisfied over time, primarily ranging from one day to 21 months. For product revenues and freight revenues, customer payment terms are generally 30 days from invoice date. Customer payments for the paving operations are based on a contractual billing schedule and are due 30 days from invoice date.

Future revenues from unsatisfied performance obligations at June 30, 2020 and 2019 were $202.7 million and $177.9 million, respectively, where the remaining periods to complete these obligations ranged from one month to 14 months and one month to 18 months, respectively.  

Page 12 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

Revenue by Category. The following table presents the Company’s total revenues by category for each reportable segment. Prior-year segment information has been reclassified to conform to the reporting structure change described in Note 1.

 

 

 

Three Months Ended

 

 

 

June 30, 2020

 

 

 

Products and Services

 

 

Freight

 

 

Total

 

 

 

(Dollars in Millions)

 

Mid-America Group

 

$

362.9

 

 

$

29.4

 

 

$

392.3

 

Southeast Group

 

 

136.8

 

 

 

5.4

 

 

 

142.2

 

West Group

 

 

640.9

 

 

 

41.6

 

 

 

682.5

 

Total Building Materials Business

 

 

1,140.6

 

 

 

76.4

 

 

 

1,217.0

 

Magnesia Specialties

 

 

48.9

 

 

 

4.7

 

 

 

53.6

 

Total

 

$

1,189.5

 

 

$

81.1

 

 

$

1,270.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

June 30, 2019

 

 

 

Products and Services

 

 

Freight

 

 

Total

 

 

 

(Dollars in Millions)

 

Mid-America Group

 

$

381.9

 

 

$

32.6

 

 

$

414.5

 

Southeast Group

 

 

132.0

 

 

 

5.0

 

 

 

137.0

 

West Group

 

 

611.8

 

 

 

39.9

 

 

 

651.7

 

Total Building Materials Business

 

 

1,125.7

 

 

 

77.5

 

 

 

1,203.2

 

Magnesia Specialties

 

 

70.4

 

 

 

5.9

 

 

 

76.3

 

Total

 

$

1,196.1

 

 

$

83.4

 

 

$

1,279.5

 

 

Service revenues, which include paving operations located in Colorado, were $94.0 million and $71.0 million for the three months ended June 30, 2020 and 2019, respectively.

Page 13 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

 

 

 

Six Months Ended

 

 

 

June 30, 2020

 

 

 

Products and Services

 

 

Freight

 

 

Total

 

 

 

(Dollars in Millions)

 

Mid-America Group

 

$

603.9

 

 

$

49.2

 

 

$

653.1

 

Southeast Group

 

 

253.7

 

 

 

9.7

 

 

 

263.4

 

West Group

 

 

1,114.1

 

 

 

79.0

 

 

 

1,193.1

 

Total Building Materials Business

 

 

1,971.7

 

 

 

137.9

 

 

 

2,109.6

 

Magnesia Specialties

 

 

108.8

 

 

 

10.5

 

 

 

119.3

 

Total

 

$

2,080.5

 

 

$

148.4

 

 

$

2,228.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2019

 

 

 

Products and Services

 

 

Freight

 

 

Total

 

 

 

(Dollars in Millions)

 

Mid-America Group

 

$

611.5

 

 

$

51.1

 

 

$

662.6

 

Southeast Group

 

 

247.4

 

 

 

8.9

 

 

 

256.3

 

West Group

 

 

1,076.0

 

 

 

73.2

 

 

 

1,149.2

 

Total Building Materials Business

 

 

1,934.9

 

 

 

133.2

 

 

 

2,068.1

 

Magnesia Specialties

 

 

139.5

 

 

 

10.8

 

 

 

150.3

 

Total

 

$

2,074.4

 

 

$

144.0

 

 

$

2,218.4

 

 

Service revenues for the six months ended June 30, 2020 and 2019 were $108.5 million and $81.0 million, respectively.

Contract Balances. Costs in excess of billings relate to the conditional right to consideration for completed contractual performance and are contract assets on the consolidated balance sheets. Costs in excess of billings are reclassified to accounts receivable when the right to consideration becomes unconditional. Billings in excess of costs relate to customers invoiced in advance of contractual performance and are contract liabilities on the consolidated balance sheets. The following table presents information about the Company’s contract balances:

 

(Dollars in Millions)

 

June 30, 2020

 

 

December 31, 2019

 

Costs in excess of billings

 

$

7.2

 

 

$

2.8

 

Billings in excess of costs

 

$

9.9

 

 

$

7.8

 

 

Revenues recognized from the beginning balance of contract liabilities for the three months ended June 30, 2020 and 2019 were $4.1 million and $4.8 million, respectively, and for the six months ended June 30, 2020 and 2019 were $6.6 million and $5.8 million, respectively.

Page 14 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

Retainage, which primarily relates to the paving services, represents amounts that have been billed to customers but payment withheld until final acceptance by the customer of the performance obligation.  Included in other current assets on the Company’s consolidated balance sheets, retainage was $9.5 million and $10.2 million at June 30, 2020 and December 31, 2019, respectively.

Policy Elections. When the Company arranges third-party freight to deliver products to customers, the Company has elected the delivery to be a fulfillment activity rather than a separate performance obligation.  Further, the Company acts as a principal in the delivery arrangements and, as required by the accounting standard, the related revenues and costs are presented gross and are included in the consolidated statements of earnings.

3.

Inventories, Net

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Finished products

 

$

671.5

 

 

$

643.6

 

Products in process

 

 

37.8

 

 

 

41.9

 

Raw materials

 

 

36.7

 

 

 

32.4

 

Supplies and expendable parts

 

 

144.9

 

 

 

141.5

 

 

 

 

890.9

 

 

 

859.4

 

Less: Allowances

 

 

(178.0

)

 

 

(168.6

)

Total

 

$

712.9

 

 

$

690.8

 

 

4.

Long-Term Debt

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

4.250% Senior Notes, due 2024

 

$

397.3

 

 

$

397.0

 

7% Debentures, due 2025

 

 

124.4

 

 

 

124.4

 

3.450% Senior Notes, due 2027

 

 

297.4

 

 

 

297.3

 

3.500% Senior Notes, due 2027

 

 

495.6

 

 

 

495.3

 

2.500% Senior Notes, due 2030

 

 

489.6

 

 

 

 

6.25% Senior Notes, due 2037

 

 

228.2

 

 

 

228.1

 

4.250% Senior Notes, due 2047

 

 

591.8

 

 

 

591.7

 

Floating Rate Senior Notes, due 2020, interest rate of 2.55%

   at December 31, 2019

 

 

 

 

 

299.7

 

Trade Receivable Facility, interest rate of 0.89% and 2.42% at

   June 30, 2020 and December 31, 2019, respectively

 

 

130.0

 

 

 

340.0

 

Other notes

 

 

0.2

 

 

 

0.1

 

Total debt

 

 

2,754.5

 

 

 

2,773.6

 

Less: Current maturities of long-term debt and short-term

   facilities

 

 

(130.0

)

 

 

(340.0

)

Long-term debt

 

$

2,624.5

 

 

$

2,433.6

 

 

Page 15 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

On March 5, 2020, the Company issued $500 million aggregate principal amount of 2.500% Senior Notes due 2030 (the 2.500% Senior Notes). The 2.500% Senior Notes are carried net of original issue discount, which is being amortized by the effective interest method over the life of the issue. The 2.500% Senior Notes are redeemable prior to December 15, 2029 at their make-whole redemption price at a discount rate of the U.S. Treasury Rate plus 30 basis points, or on or after December 15, 2029 at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest to the date of redemption. The Company used the net proceeds for general corporate purposes, including the repayment of $300 million of Floating Rate Senior Notes at maturity in May 2020. At December 31, 2019, the Floating Rate Senior Notes due May 2020 were classified as noncurrent long-term debt on the consolidated balance sheet as the Company had the intent and ability to refinance the notes on a long-term basis.

The Company, through a wholly-owned special-purpose subsidiary, has a $400 million trade receivable securitization facility (the Trade Receivable Facility) which matures on September 23, 2020. The Trade Receivable Facility, with Truist Bank, Regions Bank, PNC Bank, N.A., The Bank of Tokyo-Mitsubishi UFJ, LTD. (New York Branch), and certain other lenders that may become a party to the facility from time to time, is backed by eligible trade receivables, as defined, and is limited to the lesser of the facility limit or the borrowing base, as defined.  These receivables are originated by the Company and then sold to the wholly-owned special-purpose subsidiary by the Company.  The Company continues to be responsible for the servicing and administration of the receivables purchased by the wholly-owned special-purpose subsidiary.  Borrowings under the Trade Receivable Facility bear interest at a rate equal to one-month London Interbank Offered Rate, or LIBOR, plus 0.725%, subject to change in the event that this rate no longer reflects the lender’s cost of lending.  The Trade Receivable Facility contains a cross-default provision to the Company’s other debt agreements.

The Company has a $700 million five-year senior unsecured revolving facility (the Revolving Facility) with JPMorgan Chase Bank, N.A., as Administrative Agent, Truist Bank, Deutsche Bank Securities, Inc., and Wells Fargo Bank, N.A., as Co-Syndication Agents, and the lenders party thereto.  Borrowings under the Revolving Facility bear interest, at the Company’s option, at rates based upon LIBOR or a base rate, plus, for each rate, a margin determined in accordance with a ratings-based pricing grid. There were no borrowings outstanding under the Revolving Facility at June 30, 2020 or December 31, 2019. The Revolving Facility requires the Company’s ratio of consolidated debt-to-consolidated earnings before interest, taxes, depreciation and amortization (EBITDA), as defined by the Revolving Facility, for the trailing-twelve months (the Ratio) to not exceed 3.50x as of the end of any fiscal quarter, provided that the Company may exclude from the Ratio debt incurred in connection with certain acquisitions during such quarter or the three preceding quarters so long as the Ratio calculated without such exclusion does not exceed 3.75x.  Additionally, if there are no amounts outstanding under the Revolving Facility and the Trade Receivable Facility, consolidated debt, including debt for which the Company is a co-borrower, may be reduced by the Company’s unrestricted cash and cash equivalents in excess of $50 million, such reduction not to exceed $200 million, for purposes of the covenant calculation.  The Company was in compliance with this covenant at June 30, 2020.

The Revolving Facility expires on December 5, 2024, with any outstanding principal amounts, together with interest accrued thereon, due in full on that date. Available borrowings under the Revolving Facility are reduced by any outstanding letters of credit issued by the Company under the Revolving Facility.  The Company had $2.3 million of outstanding letters of credit issued under the Revolving Facility at June 30, 2020 and December 31, 2019.

Page 16 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

5.

Financial Instruments

The Company’s financial instruments include cash equivalents, accounts receivable, notes receivable, accounts payable, publicly-registered long-term notes, debentures and other long-term debt.

Cash equivalents are placed primarily in money market funds, money market demand deposit accounts and Eurodollar time deposits. The Company’s cash equivalents have original maturities of less than three months. Due to the short maturity of these investments, they are carried on the consolidated balance sheets at cost, which approximates fair value.

Accounts receivable are due from a large number of customers, primarily in the construction industry, and are dispersed across wide geographic and economic regions. No single customer accounted for 10% or more of consolidated total revenues. The estimated fair values of accounts receivable approximate their carrying amounts due to the periodic reset of interest rates.

Accounts payable represent amounts owed to suppliers and vendors. The estimated fair value of accounts payable approximates the carrying amount due to the short-term nature of the payables.

The carrying values and fair values of the Company’s long-term debt were $2.75 billion and $3.05 billion, respectively, at June 30, 2020 and $2.77 billion and $2.94 billion, respectively, at December 31, 2019. The estimated fair value of the publicly-registered long-term notes was estimated based on Level 2 of the fair value hierarchy using quoted market prices. The estimated fair value of other borrowings approximate their carrying amounts as the interest rates reset periodically.  

6.

Income Taxes

The effective income tax rate reflects the effect of federal and state income taxes on earnings and the impact of differences in book and tax accounting arising primarily from the permanent tax benefits associated with the statutory depletion deduction for mineral reserves.  For the six months ended June 30, 2020, the effective income tax rate of 20.2% reflected a $6.9 million discrete benefit from financing third-party railroad track maintenance. In exchange, the Company received a federal income tax credit and deduction.  For the six months ended June 30, 2019, the effective income tax rate of 16.2% reflected a $13.2 million discrete benefit from a change in the tax status of a subsidiary from a partnership to a corporation.

The Company records interest accrued in relation to unrecognized tax benefits as income tax expense. Penalties, if incurred, are recorded as operating expenses in the consolidated statements of earnings and comprehensive earnings.

Page 17 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

7.

Pension and Postretirement Benefits

The estimated components of the recorded net periodic benefit cost (credit) for pension and postretirement benefits are as follows:

 

 

Pension

 

 

Postretirement Benefits

 

 

 

Three Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Service cost

 

$

10.4

 

 

$

7.6

 

 

$

 

 

$

 

Interest cost

 

 

9.8

 

 

 

9.3

 

 

 

0.1

 

 

 

0.1

 

Expected return on assets

 

 

(14.8

)

 

 

(11.8

)

 

 

 

 

 

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service cost (credit)

 

 

0.2

 

 

 

 

 

 

(0.2

)

 

 

(0.2

)

Actuarial loss (gain)

 

 

3.2

 

 

 

3.9

 

 

 

 

 

 

(0.1

)

Net periodic benefit cost (credit)

 

$

8.8

 

 

$

9.0

 

 

$

(0.1

)

 

$

(0.2

)

 

 

 

Pension

 

 

Postretirement Benefits

 

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Service cost

 

$

19.6

 

 

$

15.4

 

 

$

 

 

$

 

Interest cost

 

 

18.5

 

 

 

18.9

 

 

 

0.2

 

 

 

0.3

 

Expected return on assets

 

 

(28.6

)

 

 

(23.9

)

 

 

 

 

 

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service cost (credit)

 

 

0.3

 

 

 

 

 

 

(0.4

)

 

 

(0.4

)

Actuarial loss (gain)

 

 

6.7

 

 

 

7.9

 

 

 

(0.1

)

 

 

(0.2

)

Net periodic benefit cost (credit)

 

$

16.5

 

 

$

18.3

 

 

$

(0.3

)

 

$

(0.3

)

 

The service cost component of net periodic benefit cost (credit) is included in cost of revenues – products and services and selling, general and administrative expenses. All other components are included in other nonoperating (income) and expenses, net, in the consolidated statements of earnings and comprehensive earnings.

8.

Commitments and Contingencies

Legal and Administrative Proceedings

The Company is engaged in certain legal and administrative proceedings incidental to its normal business activities, including matters relating to environmental protection. The Company considers various factors in assessing the probable outcome of each matter, including but not limited to the nature of existing legal proceedings and claims, the asserted or possible damages, the jurisdiction and venue of the case and whether it is a jury trial, the progress of the case, existing law and precedent, the opinions or views of legal counsel and other advisers, the Company’s experience in similar cases and the experience of other companies, the facts available to the Company at the time of assessment, and how the Company intends to respond to the proceeding or claim. The Company’s assessment of these factors may change over time as proceedings or claims progress. The Company believes the probability is remote that the outcome of any currently pending legal or administrative proceeding will result in a material loss to the Company as a whole, based on currently available facts.

Page 18 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

Borrowing Arrangements with Affiliate

The Company is a co-borrower with an unconsolidated affiliate for a $12.5 million revolving line of credit agreement with Truist Bank, of which $10.3 million was outstanding as of June 30, 2020 and has a maturity date of March 2022. The affiliate has agreed to reimburse and indemnify the Company for any payments and expenses the Company may incur from this agreement. The Company holds a lien on the affiliate’s membership interest in a joint venture as collateral for payment under the revolving line of credit.

In addition, the Company has a $6.0 million interest-only loan, due December 31, 2022, outstanding from this unconsolidated affiliate as of June 30, 2020 and December 31, 2019.  The interest rate is one-month LIBOR plus a current spread of 1.75%.

Letters of Credit

In the normal course of business, the Company provides certain third parties with standby letter of credit agreements guaranteeing its payment for certain insurance claims, contract performance and permit requirements.  At June 30, 2020, the Company was contingently liable for $31.8 million in letters of credit, of which $2.3 million were issued under the Company’s Revolving Facility.

9.

Business Segments

The Building Materials business contains three reportable business segments: Mid-America Group, Southeast Group and West Group. The Company also has a Magnesia Specialties segment.  The Company’s evaluation of performance and allocation of resources are based primarily on earnings from operations. Consolidated earnings from operations include total revenues less cost of revenues; selling, general and administrative expenses; acquisition-related expenses, net; other operating income and expenses, net; and exclude interest expense; other nonoperating income and expenses, net; and income taxes. Corporate loss from operations primarily includes depreciation on capitalized interest; unallocated expenses for corporate administrative functions; acquisition-related expenses, net; and other nonrecurring income and expenses excluded from the Company’s evaluation of business segment performance and resource allocation. All debt and related interest expense are held at Corporate.

The following table displays selected financial data for the Company’s reportable business segments. Total revenues, as presented on the consolidated statements of earnings and comprehensive earnings, exclude intersegment revenues which represent sales from one segment to another segment, which are eliminated in consolidation. Prior-year segment information has been reclassified to conform to the reporting structure change described in Note 1.

 

Page 19 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Total revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

$

392.3

 

 

$

414.5

 

 

$

653.1

 

 

$

662.6

 

Southeast Group

 

 

142.2

 

 

 

137.0

 

 

 

263.4

 

 

 

256.3

 

West Group

 

 

682.5

 

 

 

651.7

 

 

 

1,193.1

 

 

 

1,149.2

 

Total Building Materials Business

 

 

1,217.0

 

 

 

1,203.2

 

 

 

2,109.6

 

 

 

2,068.1

 

Magnesia Specialties

 

 

53.6

 

 

 

76.3

 

 

 

119.3

 

 

 

150.3

 

Total

 

$

1,270.6

 

 

$

1,279.5

 

 

$

2,228.9

 

 

$

2,218.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

$

362.9

 

 

$

381.9

 

 

$

603.9

 

 

$

611.5

 

Southeast Group

 

 

136.8

 

 

 

132.0

 

 

 

253.7

 

 

 

247.4

 

West Group

 

 

640.9

 

 

 

611.8

 

 

 

1,114.1

 

 

 

1,076.0

 

Total Building Materials Business

 

 

1,140.6

 

 

 

1,125.7

 

 

 

1,971.7

 

 

 

1,934.9

 

Magnesia Specialties

 

 

48.9

 

 

 

70.4

 

 

 

108.8

 

 

 

139.5

 

Total

 

$

1,189.5

 

 

$

1,196.1

 

 

$

2,080.5

 

 

$

2,074.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

$

136.2

 

 

$

141.3

 

 

$

157.0

 

 

$

171.9

 

Southeast Group

 

 

33.7

 

 

 

32.7

 

 

 

47.7

 

 

 

53.8

 

West Group

 

 

133.2

 

 

 

110.6

 

 

 

155.9

 

 

 

130.9

 

Total Building Materials Business

 

 

303.1

 

 

 

284.6

 

 

 

360.6

 

 

 

356.6

 

Magnesia Specialties

 

 

13.2

 

 

 

25.2

 

 

 

34.9

 

 

 

47.9

 

Corporate

 

 

(9.9

)

 

 

(23.9

)

 

 

(31.3

)

 

 

(49.4

)

Total

 

$

306.4

 

 

$

285.9

 

 

$

364.2

 

 

$

355.1

 

 

Page 20 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

10.

Revenues and Gross Profit

The Building Materials business includes the aggregates, cement, ready mixed concrete and asphalt and paving product lines. All cement, ready mixed concrete and asphalt and paving product lines reside in the West Group. The following table, which is reconciled to consolidated amounts, provides total revenues and gross profit by product line.  

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Total revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

$

754.9

 

 

$

757.8

 

 

$

1,325.2

 

 

$

1,302.7

 

Cement

 

 

109.5

 

 

 

112.3

 

 

 

216.1

 

 

 

211.4

 

Ready mixed concrete

 

 

245.1

 

 

 

241.2

 

 

 

434.8

 

 

 

452.3

 

Asphalt and paving services

 

 

107.0

 

 

 

82.2

 

 

 

125.1

 

 

 

94.6

 

Less: interproduct revenues

 

 

(75.9

)

 

 

(67.8

)

 

 

(129.5

)

 

 

(126.1

)

Products and services

 

 

1,140.6

 

 

 

1,125.7

 

 

 

1,971.7

 

 

 

1,934.9

 

Freight

 

 

76.4

 

 

 

77.5

 

 

 

137.9

 

 

 

133.2

 

Total Building Materials Business

 

 

1,217.0

 

 

 

1,203.2

 

 

 

2,109.6

 

 

 

2,068.1

 

Magnesia Specialties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services

 

 

48.9

 

 

 

70.4

 

 

 

108.8

 

 

 

139.5

 

Freight

 

 

4.7

 

 

 

5.9

 

 

 

10.5

 

 

 

10.8

 

Total Magnesia Specialties

 

 

53.6

 

 

 

76.3

 

 

 

119.3

 

 

 

150.3

 

Total

 

$

1,270.6

 

 

$

1,279.5

 

 

$

2,228.9

 

 

$

2,218.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

$

268.0

 

 

$

251.5

 

 

$

361.3

 

 

$

349.5

 

Cement

 

 

43.4

 

 

 

42.2

 

 

 

70.7

 

 

 

56.0

 

Ready mixed concrete

 

 

26.1

 

 

 

19.0

 

 

 

32.0

 

 

 

33.5

 

Asphalt and paving services

 

 

21.9

 

 

 

15.7

 

 

 

13.8

 

 

 

7.4

 

Products and services

 

 

359.4

 

 

 

328.4

 

 

 

477.8

 

 

 

446.4

 

Freight

 

 

(0.3

)

 

 

0.2

 

 

 

(0.6

)

 

 

0.1

 

Total Building Materials Business

 

 

359.1

 

 

 

328.6

 

 

 

477.2

 

 

 

446.5

 

Magnesia Specialties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services

 

 

18.2

 

 

 

29.2

 

 

 

44.3

 

 

 

55.8

 

Freight

 

 

(1.3

)

 

 

(1.1

)

 

 

(2.2

)

 

 

(2.2

)

Total Magnesia Specialties

 

 

16.9

 

 

 

28.1

 

 

 

42.1

 

 

 

53.6

 

Corporate

 

 

4.5

 

 

 

0.2

 

 

 

3.6

 

 

 

(0.3

)

Total

 

$

380.5

 

 

$

356.9

 

 

$

522.9

 

 

$

499.8

 

Page 21 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

11.

Supplemental Cash Flow Information

Noncash investing and financing activities are as follows:

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Noncash investing and financing activities:

 

 

 

 

 

 

 

 

Accrued liabilities for purchases of property, plant and equipment

 

$

22.0

 

 

$

18.7

 

Acquisition of assets through swap

 

$

 

 

$

1.1

 

Receivable issued in connection with sale of property, plant

   and equipment

 

$

 

 

$

0.3

 

Right-of-use assets obtained in exchange for new

   operating lease liabilities

 

$

18.0

 

 

$

 

Remeasurement of operating leases

 

$

1.1

 

 

$

 

Right-of-use assets obtained in exchange for

   new finance lease liabilities

 

$

1.1

 

 

$

 

 

Supplemental disclosures of cash flow information are as follows:

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Cash paid for interest

 

$

53.0

 

 

$

65.9

 

Cash paid for income taxes

 

$

4.7

 

 

$

8.0

 

During the six months ended June 30, 2020, the Company repaid $7.2 million of loans related to its company-owned life insurance policies.  The repayment is included in the ‘Investments in life insurance contracts, net’ in the investing activities of the consolidated statement of cash flows.

12.

Other Operating Expenses and (Income), Net

Other operating expenses and (income), net, for the six months ended June 30, 2020, reflected a $2.5 million increase in credit loss expenses and a $2.8 million increase in asset reclamation costs compared with the prior-year period.  For the six months ended June 30, 2019, other operating (income) and expenses, net, reflected the reversal of $4.2 million of accruals for unclaimed property contingencies.  

13.

Other Nonoperating (Income) and Expenses, Net

For the six months ended June 30, 2020, nonoperating (income) and expenses, net, included $5.6 million of third-party railroad track maintenance expense. The expense for the six months ended June 30, 2019 included a $15.7 million ($12.0 million net of tax) out-of-period correction of a Company-identified overstatement of the investment balance for a nonconsolidated equity affiliate.

Page 22 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

14.Subsequent Events

Effective July 1, 2020, the Company made organizational changes, including consolidating its operational management and operating divisions, in connection with the retirement of two senior executives as of the end of the second quarter. Notably, the Mid-Atlantic Division and Southeast Division have been combined into the newly formed East Division. Additionally, the Southwest Aggregates Division and the Cement and Southwest Ready Mix Division have been combined into the newly formed Southwest Division. Subsequent to these changes, the Building Materials business consists of four divisions, which also includes the Central and West Divisions. The impact of the organizational changes on the Company’s operating segments, reportable segments and reporting units will be reflected in the Company’s financial statements as of and for the three and nine months ended September 30, 2020. Prior year segment information will be reclassified to conform to the reporting structure change.

In July 2020, the Company entered into an agreement to sell investment land for gross proceeds of $97 million.

 

Page 23 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

 

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

OVERVIEW

Martin Marietta Materials, Inc. (the Company or Martin Marietta) is a natural resource-based building materials company. The Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 300 quarries, mines and distribution yards in 27 states, Canada and The Bahamas.  In the southwestern and western United States, 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 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, ready mixed concrete and asphalt and paving product lines are reported collectively as the “Building Materials” business.

Effective January 1, 2020, the Company moved the management of its one quarry in the state of Washington from the Mid-America Group to the West Group, resulting in an immaterial change to its reportable segments. During the period covered by this report, the Company conducted its Building Materials business through three reportable business segments: Mid-America Group, Southeast Group and West Group.

 

BUILDING MATERIALS BUSINESS

Reportable Segments

 

Mid-America Group

 

Southeast Group

 

West Group

Operating Locations

  

Indiana, Iowa, northern Kansas, Kentucky, Maryland, Minnesota, Missouri, eastern Nebraska, North Carolina, Ohio, Pennsylvania, South Carolina, Virginia
and West Virginia

  

Alabama, Florida,

Georgia, southwestern South Carolina, Tennessee,

Nova Scotia and The Bahamas

  

Arkansas, Colorado, southern Kansas, Louisiana, western Nebraska, Nevada, Oklahoma, Texas, Utah, Wyoming and Washington

 

 

 

 

Product Lines

  

Aggregates

  

Aggregates

  

Aggregates, Cement, Ready

Mixed Concrete, Asphalt and

Paving

 

 

 

 

Plant Types

  

Quarries, Mines and Distribution Facilities

  

Quarries, Mines and Distribution Facilities

  

Quarries, Mines, Plants and

Distribution Facilities

 

 

 

 

Modes of Transportation

  

Truck and Railcar

  

Truck, Railcar and Ship

  

Truck and Railcar

 

The Company also has a Magnesia Specialties business that produces magnesia-based chemicals products used in industrial, agricultural and environmental applications and dolomitic lime sold primarily to customers in the steel and mining industries.

CRITICAL ACCOUNTING POLICIES

The Company outlined its critical accounting policies in its Annual Report on Form 10-K for the year ended December 31, 2019. There were no changes to the Company’s critical accounting policies during the six months ended June 30, 2020.  

 

Page 24 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

RESULTS OF OPERATIONS

The Building Materials business is significantly affected by weather patterns and seasonal changes.  Production and shipment levels for aggregates, cement, ready mixed concrete and asphalt and paving materials correlate with general construction activity levels, most of which occur in the spring, summer and fall.  Thus, production and shipment levels vary by quarter.  Operations concentrated in the northern and midwestern United States generally experience more severe winter weather conditions than operations in the southeast and southwest. Excessive rainfall, and conversely excessive drought, can also jeopardize production, shipments and profitability in all markets served by the Company.  Due to the potentially significant impact on the Company’s operations of weather and the coronavirus (COVID-19) pandemic, including governmental responses to prevent further outbreak of COVID-19 and other matters, current period results are not indicative of expected performance for other interim periods or the full year.

Earnings before interest; income taxes; depreciation, depletion and amortization; and the earnings/loss from nonconsolidated equity affiliates (Adjusted EBITDA) is an indicator used by the Company and investors to evaluate the Company’s operating performance from period to period. Adjusted EBITDA is not defined by accounting principles generally accepted in the United States and, as such, should not be construed as an alternative to net earnings, operating earnings or operating cash flow. However, the Company’s management believes that Adjusted EBITDA may provide additional information with respect to the Company’s performance and is a measure used by management to evaluate the Company’s performance. Because Adjusted EBITDA excludes some, but not all, items that affect net earnings and may vary among companies, Adjusted EBITDA as presented by the Company may not be comparable with similarly titled measures of other companies.

A reconciliation of net earnings attributable to Martin Marietta to consolidated Adjusted EBITDA is as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Net Earnings Attributable to Martin Marietta

 

$

217.6

 

 

$

189.5

 

 

$

243.5

 

 

$

232.3

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net of interest income

 

 

31.0

 

 

 

33.2

 

 

 

60.7

 

 

 

66.0

 

Income tax expense for controlling interests

 

 

61.4

 

 

 

49.9

 

 

 

61.5

 

 

 

44.9

 

Depreciation, depletion and amortization and

   earnings/loss from nonconsolidated equity

   affiliates

 

 

97.0

 

 

 

105.9

 

 

 

190.3

 

 

 

193.5

 

Consolidated Adjusted EBITDA

 

$

407.0

 

 

$

378.5

 

 

$

556.0

 

 

$

536.7

 

 

The following table presents ready mixed concrete shipment data and volume variances excluding the Arkansas, Louisiana and eastern Texas ready mix business ("ArkLaTex business") from the periods of Martin Marietta's ownership to provide a more comparable analysis of ready mixed concrete volume variance:

 

Page 25 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Shipments

 

(Cubic Yards in Millions)

 

Reported ready mixed concrete shipments

 

 

2.2

 

 

 

2.2

 

 

 

3.8

 

 

 

4.1

 

Less: Ready mixed concrete shipments for the

   ArkLaTex business during periods of Martin

   Marietta ownership

 

 

 

 

 

(0.2

)

 

 

 

 

 

(0.3

)

Adjusted ready mixed concrete shipments

 

 

2.2

 

 

 

2.0

 

 

 

3.8

 

 

 

3.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted ready mixed concrete volume variance

   excluding shipments for the ArkLaTex business

 

 

8.7

%

 

 

 

 

 

 

0.1

%

 

 

 

 

 

Financial highlights for the quarter ended June 30, 2020 (unless noted, all comparisons are versus the prior-year quarter):

 

Consolidated total revenues of $1,270.6 million compared with $1,279.5 million

 

Building Materials business products and services revenues of $1,140.6 million compared with $1,125.7 million, and Magnesia Specialties products revenues of $48.9 million compared with $70.4 million

 

Consolidated gross profit of $380.5 million compared with $356.9 million

 

Consolidated earnings from operations of $306.4 million compared with $285.9 million

 

Net earnings attributable to Martin Marietta of $217.6 million compared with $189.5 million

 

Consolidated Adjusted EBITDA of $407.0 million compared with $378.5 million

 

Earnings per diluted share of $3.49 compared with $3.01

The following tables present total revenues, gross profit (loss), selling, general and administrative (SG&A) expenses and earnings (loss) from operations data for the Company and its reportable segments by product line for the three months ended June 30, 2020 and 2019. In each case, the data is stated as a percentage of revenues of the Company or the relevant segment or product line, as the case may be. Prior-year segment information has been reclassified to conform to the operations and management reporting structure change effective January 1, 2020 (see Note 1 to financial statements).

Page 26 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

 

 

Three Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

Amount

 

 

% of Revenues

 

 

Amount

 

 

% of Revenues

 

 

 

(Dollars in Millions)

 

Total revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

$

362.9

 

 

 

 

 

 

$

381.9

 

 

 

 

 

Southeast Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

 

136.8

 

 

 

 

 

 

 

132.0

 

 

 

 

 

West Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

 

255.2

 

 

 

 

 

 

 

243.9

 

 

 

 

 

Cement

 

 

109.5

 

 

 

 

 

 

 

112.3

 

 

 

 

 

Ready mixed concrete

 

 

245.1

 

 

 

 

 

 

 

241.2

 

 

 

 

 

Asphalt and paving

 

 

107.0

 

 

 

 

 

 

 

82.2

 

 

 

 

 

Less: Interproduct revenues

 

 

(75.9

)

 

 

 

 

 

 

(67.8

)

 

 

 

 

West Group Total

 

 

640.9

 

 

 

 

 

 

 

611.8

 

 

 

 

 

Products and services

 

 

1,140.6

 

 

 

 

 

 

 

1,125.7

 

 

 

 

 

Freight

 

 

76.4

 

 

 

 

 

 

 

77.5

 

 

 

 

 

Total Building Materials Business

 

 

1,217.0

 

 

 

 

 

 

 

1,203.2

 

 

 

 

 

Magnesia Specialties Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

48.9

 

 

 

 

 

 

 

70.4

 

 

 

 

 

Freight

 

 

4.7

 

 

 

 

 

 

 

5.9

 

 

 

 

 

Total Magnesia Specialties Business

 

 

53.6

 

 

 

 

 

 

 

76.3

 

 

 

 

 

Total

 

$

1,270.6

 

 

 

 

 

 

$

1,279.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 27 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

 

 

Three Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

Amount

 

 

% of Revenues

 

 

Amount

 

 

% of Revenues

 

 

 

(Dollars in Millions)

 

Gross profit (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

$

152.6

 

 

 

42.0

 

 

$

155.2

 

 

 

40.5

 

Southeast Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

 

41.4

 

 

 

30.2

 

 

 

38.1

 

 

 

28.9

 

West Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

 

74.0

 

 

 

29.0

 

 

 

58.2

 

 

 

24.0

 

Cement

 

 

43.4

 

 

 

39.7

 

 

 

42.2

 

 

 

37.6

 

Ready mixed concrete

 

 

26.1

 

 

 

10.6

 

 

 

19.0

 

 

 

7.9

 

Asphalt and paving

 

 

21.9

 

 

 

20.4

 

 

 

15.7

 

 

 

19.2

 

West Group Total

 

 

165.4

 

 

 

25.8

 

 

 

135.1

 

 

 

22.2

 

Products and services

 

 

359.4

 

 

 

31.5

 

 

 

328.4

 

 

 

29.2

 

Freight

 

 

(0.3

)

 

 

 

 

 

 

0.2

 

 

 

 

 

Total Building Materials Business

 

 

359.1

 

 

 

29.5

 

 

 

328.6

 

 

 

27.3

 

Magnesia Specialties Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

18.2

 

 

 

37.3

 

 

 

29.2

 

 

 

41.5

 

Freight

 

 

(1.3

)

 

 

 

 

 

 

(1.1

)

 

 

 

 

Total Magnesia Specialties Business

 

 

16.9

 

 

 

31.5

 

 

 

28.1

 

 

 

36.8

 

Corporate

 

 

4.5

 

 

 

 

 

 

 

0.2

 

 

 

 

 

Total

 

$

380.5

 

 

 

29.9

 

 

$

356.9

 

 

 

27.9

 

Aggregates Products Gross Profit Rollforward

The following presents a rollforward of aggregates products gross profit (dollars in millions):  

 

Aggregates products gross profit, quarter ended June 30, 2019

 

$

251.5

 

Volume

 

 

(14.6

)

Pricing

 

 

24.1

 

Operational performance (1)

 

 

7.0

 

Change in aggregates products gross profit

 

 

16.5

 

Aggregates products gross profit, quarter ended June 30, 2020

 

$

268.0

 

(1)

Inclusive of cost increases/decreases, product and geographic mix and other operating impacts

 

Page 28 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

 

 

Three Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

Amount

 

 

% of

Revenues

 

 

Amount

 

 

% of

Revenues

 

 

 

(Dollars in Millions)

 

Selling, general & administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

$

17.6

 

 

 

 

 

 

$

15.5

 

 

 

 

 

Southeast Group

 

 

6.8

 

 

 

 

 

 

 

5.4

 

 

 

 

 

West Group

 

 

32.7

 

 

 

 

 

 

 

27.7

 

 

 

 

 

Total Building Materials Business

 

 

57.1

 

 

 

 

 

 

 

48.6

 

 

 

 

 

Magnesia Specialties

 

 

3.4

 

 

 

 

 

 

 

2.8

 

 

 

 

 

Corporate

 

 

10.7

 

 

 

 

 

 

 

21.0

 

 

 

 

 

Total

 

$

71.2

 

 

 

5.6

 

 

$

72.4

 

 

 

5.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

$

136.2

 

 

 

 

 

 

$

141.3

 

 

 

 

 

Southeast Group

 

 

33.7

 

 

 

 

 

 

 

32.7

 

 

 

 

 

West Group

 

 

133.2

 

 

 

 

 

 

 

110.6

 

 

 

 

 

Total Building Materials Business

 

 

303.1

 

 

 

 

 

 

 

284.6

 

 

 

 

 

Magnesia Specialties

 

 

13.2

 

 

 

 

 

 

 

25.2

 

 

 

 

 

Corporate

 

 

(9.9

)

 

 

 

 

 

 

(23.9

)

 

 

 

 

Total

 

$

306.4

 

 

 

24.1

 

 

$

285.9

 

 

 

22.3

 

Page 29 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

Building Materials Business

The following tables present aggregates products volume and pricing variance data and shipments data by segment:

 

 

 

Three Months Ended

 

 

 

June 30, 2020

 

 

 

Volume

 

 

Pricing

 

Volume/Pricing variance (1)

 

 

 

 

 

 

 

 

Mid-America Group

 

 

(7.2

)%

 

 

2.3

%

Southeast Group

 

 

3.0

%

 

 

0.7

%

West Group

 

 

(1.0

)%

 

 

5.5

%

Total Aggregates Operations(2)

 

 

(3.7

)%

 

 

3.3

%

 

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

 

(Tons in Millions)

 

Shipments

 

 

 

 

 

 

 

 

Mid-America Group

 

 

25.6

 

 

 

27.6

 

Southeast Group

 

 

7.4

 

 

 

7.2

 

West Group

 

 

18.2

 

 

 

18.4

 

Total Aggregates Operations(2)

 

 

51.2

 

 

 

53.2

 

(1) Volume/pricing variances reflect the percentage increase/(decrease) from the comparable period in the prior year.

(2) Total aggregates operations include acquisitions from the date of acquisition and divestitures through the date of disposal.

Mid-America Group shipments decreased 7.2%, driven by near-record rainfall across much of its footprint, limited COVID-19 impacts and anticipated lower infrastructure shipments in portions of North Carolina. Geographic mix limited pricing growth to 2.3% as the Central Division, which has lower selling prices relative to the consolidated average, contributed a higher percentage of second-quarter shipments to the Group.  Shipments for the Southeast Group increased 3.0%, as the Florida Department of Transportation (DOT) accelerated certain transportation projects to leverage construction efficiencies driven by lower vehicle traffic during the COVID-19 shelter-in-place orders, along with continued strength in warehouse, data center and distribution facility construction. These favorable trends were partially offset by weather-impacted construction delays. Product mix, reflecting a higher percentage of lower-priced base shipments, limited pricing growth to 0.7%.  West Group shipments decreased 1.0%, with double-digit growth in North Texas and Colorado offset by the completion of certain Gulf Coast liquefied natural gas (LNG) projects and reduced energy-sector shipments. Pricing improved 5.5%.

Page 30 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

The following table presents shipments data for the Building Materials business by product line:

 

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

Shipments

 

 

 

 

 

 

 

 

Aggregates (in millions):

 

 

 

 

 

 

 

 

Tons to external customers

 

 

47.9

 

 

 

50.5

 

Internal tons used in other product lines

 

 

3.3

 

 

 

2.7

 

Total aggregates tons

 

 

51.2

 

 

 

53.2

 

 

 

 

 

 

 

 

 

 

Cement (in millions):

 

 

 

 

 

 

 

 

Tons to external customers

 

 

0.7

 

 

 

0.7

 

Internal tons used in ready mixed concrete

 

 

0.3

 

 

 

0.3

 

Total cement tons

 

 

1.0

 

 

 

1.0

 

 

 

 

 

 

 

 

 

 

Ready Mixed Concrete (in millions of cubic yards)

 

 

2.2

 

 

 

2.2

 

 

 

 

 

 

 

 

 

 

Asphalt (in millions):

 

 

 

 

 

 

 

 

Tons to external customers

 

 

0.2

 

 

 

0.2

 

Internal tons used in paving business

 

 

0.9

 

 

 

0.6

 

Total asphalt tons

 

 

1.1

 

 

 

0.8

 

 

The average selling price by product line for the Building Materials business is as follows:

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

% Change

 

Aggregates (per ton)

 

$

14.66

 

 

$

14.18

 

 

 

3.3

%

Cement (per ton)

 

$

114.34

 

 

$

114.17

 

 

 

0.1

%

Ready Mixed Concrete (per cubic yard)

 

$

112.89

 

 

$

111.39

 

 

 

1.3

%

Asphalt (per ton)

 

$

46.54

 

 

$

47.22

 

 

 

(1.4

)%

Aggregates End-Use Markets

Aggregates shipments to the infrastructure market increased modestly. The Company benefited from large transportation projects in Texas, Colorado and Florida, as most state DOTs continued to advance transportation projects during the COVID-19 shelter-in-place orders. However, consistent with expectations prior to COVID-19, North Carolina DOT temporarily suspended awards for certain transportation projects in response to funding issues specific to weather-related disaster spending and Map Act settlements. The infrastructure market accounted for 38% of second-quarter aggregates shipments, which is below the Company’s most recent ten-year annual average of 45%.

Aggregates shipments to the nonresidential market declined following double-digit growth in commercial and heavy industrial construction activity in the prior-year quarter. Precipitation and temporary project delays hindered otherwise

Page 31 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

robust distribution center, warehouse and data center construction activity. The Company also experienced reduced energy-related shipments due to the completion of certain windfarm and LNG projects, as well as lower overall demand to the shale sector. The nonresidential market represented 32% of second-quarter aggregates shipments.

Aggregates shipments to the residential market increased, with notable growth throughout Texas, as well as in Denver and Charlotte. Following a brief COVID-19-related pause in activity by national homebuilders, housing construction returned to pre-COVID levels, reflective of pent-up demand, low available inventories and favorable interest rates. The residential market accounted for 24% of second-quarter aggregates shipments.

The ChemRock/Rail market accounted for the remaining 6% of second-quarter aggregates shipments. Volumes to this end use increased, driven by improved ballast shipments to the Class I western railroads.

Building Materials Business Product Lines

Second-quarter aggregates shipments declined 3.7% compared with prior-year quarter volumes that benefited from carryover work from an extraordinarily wet 2018. Near-record wet weather resulted in a double-digit shipment decline in the Mid-Atlantic division. Pricing improved 3.3% compared with the prior-year quarter, with all divisions contributing to the growth. Aggregates product gross margin increased 230 basis points to 35.5%, largely driven by improved pricing, production efficiencies and lower diesel fuel costs.  

Second-quarter cement shipments decreased 2.7%, driven by reduced demand for West Texas oil-well specialty cement products caused by historically low oil prices. While cement pricing increased in North Texas, Houston, and portions of Central Texas, notably lower sales of higher-priced oil-well specialty cement products limited overall pricing growth to 0.1% compared with prior-year quarter. Cement product gross margin expanded 210 basis points over the prior-year quarter to 39.7%, driven by reduced fuel costs and improved kiln reliability.

Ready mixed concrete shipments and pricing improved 0.3% and 1.3%, respectively, in the second quarter compared with the prior-year quarter. Shipments in the prior-year quarter included 168,000 cubic yards from the Southwest Ready Mix Division’s business in the Arkansas, Louisiana and eastern Texas (ArkLaTex) areas that was divested in January 2020. Excluding these divested operations in the prior period, shipment volumes increased 8.7%. Lower delivery expenses and improved leveraging of costs along with cost reduction initiatives drove a 270-basis-point increase in gross margin.  Asphalt volume increased 34.6% versus an extremely weather-challenged prior-year quarter. Asphalt pricing decreased 1.4% due to unfavorable product mix from a higher percentage of shipments to lower-priced municipal projects.  

Magnesia Specialties Business

Magnesia Specialties product revenues decreased 30.6% to $48.9 million. Lime and periclase shipments to the steel industry declined in response to the COVID-19-induced shutdown of domestic auto manufacturers. Additionally, domestic and international demand for chemicals products slowed due to COVID-19. Product gross profit was $18.2 million compared with $29.2 million. Product gross margin was 37.3% compared with 41.5%. Second-quarter earnings from operations were $13.2 million in 2020 compared with $25.2 million in 2019.

Consolidated Operating Results

Consolidated SG&A for second quarter 2020 was 5.6% of total revenues compared with 5.7% in the prior-year quarter. During second-quarter 2020, the Company incurred $3.4 million in COVID-19 related expenses for enhanced cleaning and sanitizing protocols across the Company’s operations, which are recorded in SG&A. Earnings from operations for the quarter were $306.4 million in 2020 compared with $285.9 million in 2019.  

Page 32 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

Among other items, other operating income and expenses, net, includes gains and losses on the sale of assets; recoveries and write-offs related to customer accounts receivable; rental, royalty and services income; accretion expense, depreciation expense and gains and losses related to asset retirement obligations. For the second quarter, consolidated other operating income and expenses, net, was an expense of $2.4 million in 2020 and income of $1.4 million in 2019. The income in 2019 reflected the reversal of $4.2 million of accruals for unclaimed property contingencies.

Other nonoperating income and expenses, net, includes interest income; pension and postretirement benefit cost excluding service cost; foreign currency transaction gains and losses; equity earnings or losses from nonconsolidated affiliates and other miscellaneous income and expenses.  For the second quarter, other nonoperating expenses and income, net, was income of $3.8 million and expense of $13.2 million in 2020 and 2019, respectively. The expense in 2019 was primarily due to a $15.7 million ($12.0 million net of tax) out-of-period correction of a Company-identified overstatement of the investment balance for a nonconsolidated equity affiliate.

Financial highlights for the six months ended June 30, 2020 (unless noted, all comparisons are versus the prior-year period):

 

Consolidated total revenues of $2,228.9 million compared with $2,218.4 million

 

Building Materials business products and services revenues of $1,971.7 million compared with $1,934.9 million, and Magnesia Specialties products revenues of $108.8 million compared with $139.5 million

 

Consolidated gross profit of $522.9 million compared with $499.8 million

 

Consolidated earnings from operations of $364.2 million compared with $355.1 million

 

Net earnings attributable to Martin Marietta of $243.5 million compared with $232.3 million

 

Consolidated Adjusted EBITDA of $556.0 million compared with $536.7 million

 

Earnings per diluted share of $3.90 compared with $3.69

Page 33 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

The following tables present total revenues, gross profit (loss), SG&A expenses and earnings (loss) from operations data for the Company and its reportable segments by product line for the six months ended June 30, 2020 and 2019. In each case, the data is stated as a percentage of revenues of the Company or the relevant segment or product line, as the case may be. Prior-year segment information has been reclassified to conform to the operations and management reporting structure change effective January 1, 2020 (see Note 1 to financial statements).

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

Amount

 

 

% of Revenues

 

 

Amount

 

 

% of Revenues

 

 

 

(Dollars in Millions)

 

Total revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

$

603.9

 

 

 

 

 

 

$

611.5

 

 

 

 

 

Southeast Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

 

253.7

 

 

 

 

 

 

 

247.4

 

 

 

 

 

West Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

 

467.6

 

 

 

 

 

 

 

443.8

 

 

 

 

 

Cement

 

 

216.1

 

 

 

 

 

 

 

211.4

 

 

 

 

 

Ready mixed concrete

 

 

434.8

 

 

 

 

 

 

 

452.3

 

 

 

 

 

Asphalt and paving

 

 

125.1

 

 

 

 

 

 

 

94.6

 

 

 

 

 

Less: Interproduct revenues

 

 

(129.5

)

 

 

 

 

 

 

(126.1

)

 

 

 

 

West Group Total

 

 

1,114.1

 

 

 

 

 

 

 

1,076.0

 

 

 

 

 

Products and services

 

 

1,971.7

 

 

 

 

 

 

 

1,934.9

 

 

 

 

 

Freight

 

 

137.9

 

 

 

 

 

 

 

133.2

 

 

 

 

 

Total Building Materials Business

 

 

2,109.6

 

 

 

 

 

 

 

2,068.1

 

 

 

 

 

Magnesia Specialties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

108.8

 

 

 

 

 

 

 

139.5

 

 

 

 

 

Freight

 

 

10.5

 

 

 

 

 

 

 

10.8

 

 

 

 

 

Total Magnesia Specialties Business

 

 

119.3

 

 

 

 

 

 

 

150.3

 

 

 

 

 

Total

 

$

2,228.9

 

 

 

 

 

 

$

2,218.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 34 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

Amount

 

 

% of Revenues

 

 

Amount

 

 

% of Revenues

 

 

 

(Dollars in Millions)

 

Gross profit (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

$

190.6

 

 

 

31.6

 

 

$

200.2

 

 

 

32.6

 

Southeast Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

 

63.3

 

 

 

25.0

 

 

 

64.6

 

 

 

26.1

 

West Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

 

107.4

 

 

 

23.0

 

 

 

84.7

 

 

 

19.2

 

Cement

 

 

70.7

 

 

 

32.7

 

 

 

56.0

 

 

 

26.5

 

Ready mixed concrete

 

 

32.0

 

 

 

7.4

 

 

 

33.5

 

 

 

7.4

 

Asphalt and paving

 

 

13.8

 

 

 

11.0

 

 

 

7.4

 

 

 

7.8

 

West Group Total

 

 

223.9

 

 

 

20.1

 

 

 

181.6

 

 

 

17.0

 

Products and services

 

 

477.8

 

 

 

24.2

 

 

 

446.4

 

 

 

23.1

 

Freight

 

 

(0.6

)

 

 

 

 

 

 

0.1

 

 

 

 

 

Total Building Materials Business

 

 

477.2

 

 

 

22.6

 

 

 

446.5

 

 

 

21.6

 

Magnesia Specialties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

44.3

 

 

 

40.7

 

 

 

55.8

 

 

 

40.0

 

Freight

 

 

(2.2

)

 

 

 

 

 

 

(2.2

)

 

 

 

 

Total Magnesia Specialties Business

 

 

42.1

 

 

 

35.3

 

 

 

53.6

 

 

 

35.6

 

Corporate

 

 

3.6

 

 

 

 

 

 

 

(0.3

)

 

 

 

 

Total

 

$

522.9

 

 

 

23.5

 

 

$

499.8

 

 

 

22.5

 

Aggregates Products Gross Profit Rollforward

The following presents a rollforward of aggregates products gross profit (dollars in millions):  

Aggregates products gross profit, six months ended June 30, 2019

 

$

349.5

 

Volume

 

 

(12.1

)

Pricing

 

 

38.9

 

Operational performance (1)

 

 

(15.0

)

Change in aggregates products gross profit

 

 

11.8

 

Aggregates products gross profit, six months ended June 30, 2020

 

$

361.3

 

(1) Inclusive of cost increases/decreases, product and geographic mix and other operating impacts

 

Page 35 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

Amount

 

 

% of Total Revenues

 

 

Amount

 

 

% of Total Revenues

 

 

 

(Dollars in Millions)

 

Selling, general & administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

$

35.4

 

 

 

 

 

 

$

31.1

 

 

 

 

 

Southeast Group

 

 

13.8

 

 

 

 

 

 

 

10.8

 

 

 

 

 

West Group

 

 

66.0

 

 

 

 

 

 

 

57.0

 

 

 

 

 

Total Building Materials Business

 

 

115.2

 

 

 

 

 

 

 

98.9

 

 

 

 

 

Magnesia Specialties

 

 

6.9

 

 

 

 

 

 

 

5.7

 

 

 

 

 

Corporate

 

 

27.8

 

 

 

 

 

 

 

46.1

 

 

 

 

 

Total

 

$

149.9

 

 

 

6.7

 

 

$

150.7

 

 

 

6.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

$

157.0

 

 

 

 

 

 

$

171.9

 

 

 

 

 

Southeast Group

 

 

47.7

 

 

 

 

 

 

 

53.8

 

 

 

 

 

West Group

 

 

155.9

 

 

 

 

 

 

 

130.9

 

 

 

 

 

Total Building Materials Business

 

 

360.6

 

 

 

 

 

 

 

356.6

 

 

 

 

 

Magnesia Specialties

 

 

34.9

 

 

 

 

 

 

 

47.9

 

 

 

 

 

Corporate

 

 

(31.3

)

 

 

 

 

 

 

(49.4

)

 

 

 

 

Total

 

$

364.2

 

 

 

16.3

 

 

$

355.1

 

 

 

16.0

 

 

Page 36 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

Building Materials Business

The following tables present aggregates products volume and pricing variance data and shipments data by segment:

 

 

Six Months Ended

 

 

 

June 30, 2020

 

 

 

Volume

 

 

Pricing

 

Volume/Pricing variance (1)

 

 

 

 

 

 

 

 

Mid-America Group

 

 

(3.0

)%

 

 

2.0

%

Southeast Group

 

 

0.1

%

 

 

2.6

%

West Group

 

 

0.6

%

 

 

4.7

%

Total Aggregates Operations(2)

 

 

(1.2

)%

 

 

3.1

%

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

 

(Tons in Millions)

 

Shipments

 

 

 

 

 

 

 

 

Mid-America Group

 

 

42.1

 

 

 

43.3

 

Southeast Group

 

 

13.6

 

 

 

13.6

 

West Group

 

 

33.8

 

 

 

33.6

 

Total Aggregates Operations(2)

 

 

89.5

 

 

 

90.5

 

(1) Volume/pricing variances reflect the percentage increase/(decrease) from the comparable period in the prior year.

(2) Total aggregates operations include acquisitions from the date of acquisition and divestitures through the date of disposal.

Page 37 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

The following table presents shipments data for the Building Materials business by product line:

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

Shipments

 

 

 

 

 

 

 

 

Aggregates (in millions):

 

 

 

 

 

 

 

 

Tons to external customers

 

 

83.9

 

 

 

85.8

 

Internal tons used in other product lines

 

 

5.6

 

 

 

4.7

 

Total aggregates tons

 

 

89.5

 

 

 

90.5

 

 

 

 

 

 

 

 

 

 

Cement (in millions):

 

 

 

 

 

 

 

 

Tons to external customers

 

 

1.3

 

 

 

1.3

 

Internal tons used in ready mixed concrete

 

 

0.6

 

 

 

0.6

 

Total cement tons

 

 

1.9

 

 

 

1.9

 

 

 

 

 

 

 

 

 

 

Ready Mixed Concrete (in millions of cubic yards)

 

 

3.8

 

 

 

4.1

 

 

 

 

 

 

 

 

 

 

Asphalt (in millions):

 

 

 

 

 

 

 

 

Tons to external customers

 

 

0.3

 

 

 

0.3

 

Internal tons used in paving business

 

 

1.0

 

 

 

0.6

 

Total asphalt tons

 

 

1.3

 

 

 

0.9

 

The average selling price by product line for the Building Materials business is as follows:

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

% Change

 

Aggregates (per ton)

 

$

14.72

 

 

$

14.28

 

 

 

3.1

%

Cement (per ton)

 

$

114.06

 

 

$

112.63

 

 

 

1.3

%

Ready Mixed Concrete (per cubic yard)

 

$

113.53

 

 

$

110.40

 

 

 

2.8

%

Asphalt (per ton)

 

$

46.38

 

 

$

47.08

 

 

 

(1.5

)%

Aggregates Product Line End-Use Markets

For the six months ended June 30, 2020, aggregates shipments to the infrastructure market accounted for 36% of year-to-date aggregates volumes and increased modestly, driven by large projects in Texas and Colorado, and partially offset by lower volumes in North Carolina.

Aggregates shipments to the nonresidential market declined following double-digit growth in commercial and heavy industrial construction activity, namely in Iowa and Texas, in the prior-year period. Additionally, energy-sector shipments declined, driven by historically low oil prices. The nonresidential market represented 33% of year-to-date aggregates shipments.

Page 38 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

Following a slowdown in the residential market due to rainfall in the first quarter and COVID-19, aggregates shipments to the residential market increased during the spring selling season due to pent-up housing demand and emerging homebuying trends as prospective buyers look to move to small metro or suburban locations. The residential market accounted for 24% of year-to-date aggregates shipments.

The ChemRock/Rail market accounted for the remaining 7% of year-to-date aggregates shipments. Volumes to this end use increased, driven by improved ballast shipments to the Class I western railroads.

Building Materials Business Product Lines

For the six months ended June 30, 2020, aggregates shipments decreased 1.2% as prior year volumes benefited from carryover work from 2018. Pricing increased 3.1% compared with the prior-year period. Aggregates product gross margin improved 50 basis points to 27.3%.  

For the six months ended June 30, 2020, cement shipments and pricing increased 1.1% and 1.3%, respectively, compared with the prior-year period. Production efficiencies, lower fuel costs and improved kiln reliability contributed to the 620-basis-point expansion in cement product gross margin to 32.7%.

Ready mixed concrete pricing improved 2.8% while shipments declined 6.5% in the first half of the year as compared with the prior-year period. The volume decline is attributable to the divestiture of the Southwest Ready Mix Division’s ArkLaTex operations in January 2020, which accounted for 300,000 cubic yards in the prior-year period. Excluding ArkLaTex shipments from the prior period, volumes were flat. Asphalt volume increased 39.6% attributable to favorable weather compared with the prior-year period. Asphalt pricing decreased 1.5% due to unfavorable product mix.  

Magnesia Specialties Business

For the six months ended June 30, 2020, Magnesia Specialties reported product revenues of $108.8 million compared with $139.5 million for the prior-year period. Year over year revenue decline is attributable to lower lime and periclase shipments to the steel industry in response to the COVID-19-induced shutdown of domestic auto manufacturers. Additionally, the business experienced a continued decline in chemicals products sales as both domestic and international customers experienced a downturn in economic activity related to COVID-19. Product gross profit was $44.3 million compared with $55.8 million. Product gross margin improved 70 basis points to 40.7% over the six months ended June 30, 2019. Earnings from operations were $34.9 million compared with $47.9 million.

Consolidated Operating Results

For the six months ended June 30, 2020, consolidated SG&A was 6.7% of total revenues compared with 6.8% in 2019. During the first six months of 2020, the Company incurred $3.5 million in COVID-19 related expenses for enhanced cleaning and sanitizing protocols across the Company’s operations, which are recorded in SG&A. Earnings from operations for the six months ended June 30 were $364.2 million in 2020 compared with $355.1 million in 2019. Among other items, other operating income and expenses, net, includes gains and losses on the sale of assets; recoveries and write-offs related to customer accounts receivable; rental, royalty and services income; accretion expense, depreciation expense and gains and losses related to asset retirement obligations. For the six months ended June 30, consolidated other operating income and expenses, net, was an expense of $8.0 million and income of $6.2 million in 2020 and 2019, respectively. The 2020 amount reflected a $2.5 million increase in credit loss expenses and a $2.8 million increase in asset reclamation costs compared with the prior-year period. The 2019 amount included the reversal of $4.2 million of accruals for unclaimed property contingencies.  Other nonoperating income and expenses, net, includes interest

Page 39 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

income; pension and postretirement benefit cost, excluding service cost; foreign currency transaction gains and losses; equity in earnings or losses of nonconsolidated affiliates and other miscellaneous income. For the six months ended June 30, other nonoperating income and expenses, net, was income of $1.9 million in 2020 and an expense of $11.7 million in 2019. The 2020 amount included an expense of $5.6 million for third-party railroad track maintenance. The 2019 expense included a $15.7 million ($12.0 million net of tax) out-of-period correction of a Company-identified overstatement of the investment balance for a nonconsolidated equity affiliate.

Income Tax Expense

For the six months ended June 30, 2020, the effective income tax rate reflected a $6.9 million discrete benefit from financing third-party railroad track maintenance. In exchange, the Company received a federal income tax credit and deduction. For the six months ended June 30, 2019, the effective income tax rate reflected a $13.2 million discrete benefit from a change in the tax status of a subsidiary from a partnership to a corporation.

LIQUIDITY AND CAPITAL RESOURCES

For the six months ended June 30, cash provided by operating activities was $373.2 million in 2020 compared with $333.7 million in 2019.  Operating cash flow is primarily derived from consolidated net earnings before deducting depreciation, depletion and amortization, and the impact of changes in working capital.  Depreciation, depletion and amortization were as follows:

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Depreciation

 

$

167.0

 

 

$

155.7

 

Depletion

 

 

16.4

 

 

 

16.0

 

Amortization

 

 

10.0

 

 

 

10.3

 

Total

 

$

193.4

 

 

$

182.0

 

 

The seasonal nature of construction activity impacts the Company’s quarterly operating cash flow when compared with the full year. Full-year 2019 net cash provided by operating activities was $966.1 million.

During the six months ended June 30, 2020, the Company paid $175.7 million for capital investments.

The Company can repurchase its common stock through open-market purchases pursuant to authority granted by its Board of Directors or through private transactions at such prices and upon such terms as the Chief Executive Officer deems appropriate. The Company repurchased 210,616 shares of common stock during the first six months of 2020, at an aggregate cost of $50.0 million.  Future share repurchases are at the discretion of management and were temporarily paused in March 2020 in light of the COVID-19 pandemic. Management may resume share repurchases as circumstances dictate. At June 30, 2020, 13,520,952 shares of common stock were remaining under the Company’s repurchase authorization.  

Page 40 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

On March 5, 2020, the Company issued $500 million aggregate principal amount of 2.500% Senior Notes due 2030 (the 2.500% Senior Notes). The 2.500% Senior Notes are carried net of original issue discount, which is being amortized by the effective interest method over the life of the issue. The 2.500% Senior Notes are redeemable prior to December 15, 2029 at their make-whole redemption price at a discount rate of the U.S. Treasury Rate plus 30 basis points, or on or after December 15, 2029 at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest to the date of redemption. The Company used the net proceeds for general corporate purposes, including the repayment of $300 million of floating rate senior notes due at maturity in May 2020.

The Company has a $700 million five-year senior unsecured revolving facility (the Revolving Facility), which expires on December 5, 2024. The Revolving Facility requires the Company’s ratio of consolidated debt-to-consolidated EBITDA, as defined, for the trailing-twelve-month period (the Ratio) to not exceed 3.50x as of the end of any fiscal quarter, provided that the Company may exclude from the Ratio debt incurred in connection with certain acquisitions during the quarter or the three preceding quarters so long as the Ratio calculated without such exclusion does not exceed 3.75x. Additionally, if there are no amounts outstanding under the Revolving Facility and the $400 million trade receivable securitization facility (the Trade Receivable Facility) held by the Company’s wholly-owned special-purpose subsidiary, consolidated debt, including debt for which the Company is a co-borrower, may be reduced by the Company’s unrestricted cash and cash equivalents in excess of $50 million, such reduction not to exceed $200 million, for purposes of the covenant calculation.

The Ratio is calculated as debt, including debt for which the Company is a co-borrower, divided by consolidated EBITDA, as defined by the Company’s Revolving Facility, for the trailing-twelve months.  Consolidated EBITDA is generally defined as earnings before interest expense, income tax expense, and depreciation and amortization expense. Additionally, stock-based compensation expense is added back and interest income is deducted in the calculation of consolidated EBITDA. During periods that include an acquisition, pre-acquisition adjusted EBITDA of the acquired company is added to consolidated EBITDA as if the acquisition occurred on the first day of the calculation period. Certain other nonrecurring items, if they occur, can affect the calculation of consolidated EBITDA.

Page 41 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

At June 30, 2020, the Company’s ratio of consolidated debt-to-consolidated EBITDA, as defined by the Company’s Revolving Facility, for the trailing-twelve months was 2.11 times and was calculated as follows:

 

 

 

July 1, 2019 to

 

 

 

June 30, 2020

 

 

 

(Dollars in Millions)

 

Earnings from continuing operations attributable to Martin Marietta

 

$

623.1

 

Add back:

 

 

 

 

Income tax expense

 

 

152.9

 

Interest expense

 

 

124.1

 

Depreciation, depletion and amortization expense and noncash

   nonconsolidated equity affiliate adjustment

 

 

382.0

 

Stock-based compensation expense

 

 

31.6

 

 

 

 

 

 

Deduct:

 

 

 

 

Interest income

 

 

(0.5

)

Consolidated EBITDA, as defined by the Company’s Revolving Facility

 

$

1,313.2

 

Consolidated debt, as defined and including debt for which the Company

     is a co-borrower, at June 30, 2020

 

$

2,773.0

 

Consolidated debt-to-consolidated EBITDA, as defined by the Company’s Revolving

    Facility, at June 30, 2020 for the trailing-twelve months EBITDA

 

2.11 times

 

 

The Trade Receivable Facility contains a cross-default provision to the Company’s other debt agreements. In the event of a default on the Ratio, the lenders can terminate the Revolving Facility and Trade Receivable Facility and declare any outstanding balances as immediately due.  Outstanding amounts on the Trade Receivable Facility have been classified as a current liability on the Company’s consolidated balance sheets.

Cash on hand, along with the Company’s projected internal cash flows and availability of financing resources, including its access to debt and equity capital markets, is expected to continue to be sufficient to provide the capital resources necessary to support anticipated operating needs, cover debt service requirements, address near-term debt maturities, meet capital expenditures and discretionary investment needs, fund certain acquisition opportunities that may arise, allow the repurchase of shares of the Company’s common stock when the repurchase program is resumed and allow for payment of dividends for the foreseeable future.  Any future significant strategic acquisition for cash would likely require an appropriate balance of newly-issued equity with debt in order to maintain a composite investment-grade credit rating. At June 30, 2020, the Company had $967.7 million of unused borrowing capacity under its Revolving Facility and Trade Receivable Facility, subject to complying with the related leverage covenant.  The Revolving Facility matures on December 5, 2024 and the Trade Receivable Facility expires September 23, 2020. Historically, the Company has successfully extended the maturity dates of these credit facilities.  Further, as of June 30, 2020, the Company does not have any publicly-traded debt that matures prior to 2024.  While the future impact of the COVID-19 pandemic is not currently quantifiable, management believes the Company’s liquidity is sufficient to meet its cash flow needs through the foreseeable future.

The Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law in March 2020 and provides liquidity support for businesses.  The CARES Act allows the Company to defer the payment of the 6.2% employer share

Page 42 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

of Social Security taxes for the period from March 27, 2020 through December 31, 2020.  Half of the deferred obligation will be due December 31, 2021 and the remaining half will be due December 31, 2022.  There will be no interest assessed on amounts deferred.  The Company estimates it will defer payment of approximately $25 million under this provision.  

The CARES Act also provides a quarterly refundable employee retention credit if companies suspend operations due to government restrictions or experience a 50% or more decline in quarterly revenues compared with the prior-year quarter.  The credit is equal to 50% of qualified wages, up to $10,000 per employee who is not performing services for the Company.  While the Company has had minimal short-term shutdowns related to the COVID-19 pandemic such that the Company has not utilized this aid, if future shutdowns are mandated and more extensive, the Company would be eligible to claim this credit.

The CARES Act also includes other provisions, including increasing the interest expense deduction limitation to 50% of adjusted taxable income and providing a credit facility for investment-grade companies. The Company does not currently expect the interest expense deduction provision to result in a change in its ability to take a full income tax deduction.  The Company also believes it has adequate liquidity and does not currently expect to utilize the credit facility under the CARES Act.

TRENDS AND RISKS

The Company outlined the risks associated with its business in its Annual Report on Form 10-K for the year ended December 31, 2019.  Management continues to evaluate its exposure to all operating risks on an ongoing basis. A discussion of risks and uncertainties related to the COVID-19 pandemic are included in Part II, Item 1A Risk Factors of this report.

OTHER MATTERS

If you are interested in Martin Marietta stock, management recommends that, at a minimum, you read the Company’s current annual report and Forms 10-K, 10-Q and 8-K reports to the Securities and Exchange Commission (SEC) over the past year.  The Company’s recent proxy statement for the annual meeting of shareholders also contains important information.  These and other materials that have been filed with the SEC are accessible through the Company’s website at www.martinmarietta.com and are also available at the SEC’s website at www.sec.gov.  You may also write or call the Company’s Corporate Secretary, who will provide copies of such reports.

Investors are cautioned that all statements in this Form 10-Q that relate to the future involve risks and uncertainties, and are based on assumptions that the Company believes in good faith are reasonable but which may be materially different from actual results.  These statements, which are forward-looking statements under the Private Securities Litigation Reform Act of 1995, provide the investor with the Company’s expectations or forecasts of future events.  You can identify these statements by the fact that they do not relate only to historical or current facts.  They may use words such as “anticipate,” “expect,” “should be,” “believe,” “will,” and other words of similar meaning in connection with future events or future operating or financial performance.  Any or all of management’s forward-looking statements here and in other publications may turn out to be wrong.

The Company’s outlook is subject to various risks and uncertainties, and is based on assumptions that the Company believes in good faith are reasonable but which may be materially different from actual results. Factors that the Company currently believes could cause actual results to differ materially from the forward-looking statements in this

Page 43 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

Form 10-Q (including the outlook) include, but are not limited to: the ability of the Company to face challenges, including those posed by the COVID-19 pandemic and implementation of any such related response plans; the recent dramatic increases in COVID-19 cases in the Sunbelt and the extent that geography of outbreak primarily matches the regions in which the Company’s Building Materials business principally operates; the resiliency and potential declines of the Company’s various construction end-use markets; the potential negative impact of the COVID-19 pandemic on the Company’s ability to continue supplying heavy-side building materials and related services at normal levels or at all in the Company’s key regions; the duration, impact and severity of the impact of the COVID-19 pandemic on the Company, including the markets in which the Company does business, its suppliers, customers or other business partners as well as the Company’s employees; the economic impact of government responses to the pandemic; the performance of the United States economy, including the impact on the economy of the COVID-19 pandemic and governmental orders restricting activities imposed to prevent further outbreak of COVID-19; shipment declines resulting from economic events beyond the Company’s control; a widespread decline in aggregates pricing, including a decline in aggregates shipment volume negatively affecting aggregates price; the history of both cement and ready mixed concrete being subject to significant changes in supply, demand and price fluctuations; the termination, capping and/or reduction or suspension of the federal and/or state gasoline tax(es) or other revenue related to public construction; the level and timing of federal, state or local transportation or infrastructure or public projects funding, most particularly in Texas, Colorado, North Carolina, Georgia, Iowa and Maryland; the impact of governmental orders restricting activities imposed to prevent further outbreak of COVID-19 on travel, potentially reducing state fuel tax revenues used to fund highway projects; the United States Congress’ inability to reach agreement among themselves or with the Administration on policy issues that impact the federal budget; the ability of states and/or other entities to finance approved projects either with tax revenues or alternative financing structures; levels of construction spending in the markets the Company serves; a reduction in defense spending and the subsequent impact on construction activity on or near military bases; a decline in the commercial component of the nonresidential construction market, notably office and retail space, including a decline resulting from economic distress related to the COVID-19 pandemic; a decline in energy-related construction activity resulting from a sustained period of low global oil prices or changes in oil production patterns or capital spending in response to this decline, particularly in Texas; increasing residential mortgage rates and other factors that could result in a slowdown in residential construction; unfavorable weather conditions, particularly Atlantic Ocean and Gulf of Mexico hurricane activity, the late start to spring or the early onset of winter and the impact of a drought or excessive rainfall in the markets served by the Company, any of which can significantly affect production schedules, volumes, product and/or geographic mix and profitability; whether the Company’s operations will continue to be treated as “essential” operations under applicable government orders restricting business activities imposed to prevent further outbreak of COVID-19 or, even if so treated, whether site-specific health and safety concerns might otherwise require certain of the Company’s operations to be halted for some period of time; the volatility of fuel costs, particularly diesel fuel, and the impact on the cost, or the availability generally, of other consumables, namely steel, explosives, tires and conveyor belts, and with respect to the Company’s Magnesia Specialties business, natural gas; continued increases in the cost of other repair and supply parts; construction labor shortages and/or supply‐chain challenges; unexpected equipment failures, unscheduled maintenance, industrial accident or other prolonged and/or significant disruption to production facilities; increasing governmental regulation, including environmental laws; the failure of relevant government agencies to implement expected regulatory reductions; transportation availability or a sustained reduction in capital investment by the railroads, notably the availability of railcars, locomotive power and the condition of rail infrastructure to move trains to supply the Company’s Texas, Colorado, Florida, Carolinas and the Gulf Coast markets, including the movement of essential dolomitic lime for magnesia chemicals to the Company’s plant in Manistee, Michigan and its customers; increased transportation costs, including increases from higher or fluctuating passed-through energy costs or fuel surcharges, and other costs to comply with tightening regulations, as well as higher

Page 44 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

volumes of rail and water shipments; availability of trucks and licensed drivers for transport of the Company’s materials; availability and cost of construction equipment in the United States; weakening in the steel industry markets served by the Company’s dolomitic lime products; trade disputes with one or more nations impacting the U.S. economy, including the impact of tariffs on the steel industry; unplanned changes in costs or realignment of customers that introduce volatility to earnings, including that of the Magnesia Specialties business that is running at capacity; proper functioning of information technology and automated operating systems to manage or support operations; inflation and its effect on both production and interest costs; the concentration of customers in construction markets and the increased risk of potential losses on customer receivables; the impact of the level of demand in the Company’s end-use markets, production levels and management of production costs on the operating leverage and therefore profitability of the Company; the possibility that the expected synergies from acquisitions will not be realized or will not be realized within the expected time period, including achieving anticipated profitability to maintain compliance with the Company’s leverage ratio debt covenant; changes in tax laws, the interpretation of such laws and/or administrative practices that would increase the Company’s tax rate; violation of the Company’s debt covenant if price and/or volumes return to previous levels of instability; downward pressure on the Company’s common stock price and its impact on goodwill impairment evaluations; the possibility of a reduction of the Company’s credit rating to non-investment grade; and other risk factors listed from time to time found in the Company’s filings with the SEC.  

You should consider these forward-looking statements in light of risk factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and other periodic filings made with the SEC.  All of the Company’s forward-looking statements should be considered in light of these factors.  In addition, other risks and uncertainties not presently known to the Company or that the Company considers immaterial could affect the accuracy of its forward-looking statements, or adversely affect or be material to the Company.  The Company assumes no obligation to update any such forward-looking statements.

Page 45 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter June 30, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Second Quarter Ended June 30, 2020

(Continued)

 

INVESTOR ACCESS TO COMPANY FILINGS

Shareholders may obtain, without charge, a copy of Martin Marietta’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission for the fiscal year ended December 31, 2019, by writing to:

Martin Marietta

Attn: Corporate Secretary

2710 Wycliff Road

Raleigh, North Carolina 27607-3033

Additionally, Martin Marietta’s Annual Report, press releases and filings with the Securities and Exchange Commission, including Forms 10-K, 10-Q, 8-K and 11-K, can generally be accessed via the Company’s website. Filings with the Securities and Exchange Commission accessed via the website are available through a link with the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. Accordingly, access to such filings is available upon EDGAR placing the related document in its database. Investor relations contact information is as follows:

Telephone: (919) 783-4691

Website address: www.martinmarietta.com

Information included on the Company’s website is not incorporated into, or otherwise create a part of, this report.

 

Page 46 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The impact of the COVID-19 pandemic on the global and domestic economy is currently not fully known.  The Company’s operations have to date been considered “essential” operations under applicable governmental orders that restrict activities in an effort to prevent further outbreak of COVID-19. As such, the Company is conducting business with certain modifications, including having non-operational personnel working remotely; limiting site access to necessary employees and critical third parties; engaging medical experts to screen those who may have had COVID-19 exposure before allowing access to sites; enhancing the cleaning and disinfection of equipment and common areas, including engaging third-party specialists to disinfect work spaces; and issuing a quarantine policy requiring employees with COVID-19 symptoms to stay home for at least 14 days, among other things.  The Company continues to actively monitor the situation and may take further actions that alter its business operations including any that may be required by federal, state or local authorities or that the Company determines are in the best interests of its employees, customers, suppliers, vendors, communities and other stakeholders.

Demand for aggregates products, particularly in the infrastructure construction market, is affected by federal, state and local budget and deficit issues. Remote working and stay-at-home orders and other guidelines are reducing miles driven, which is having a negative impact on various revenue streams that fund roadway projects. Further, delays or cancellations of projects in the nonresidential and residential construction markets could occur if companies and consumers are unable to obtain financing for construction projects or if consumer confidence continues to be eroded by economic uncertainty. The residential construction market accounted for 22% of the Company’s aggregates shipments in 2019 and 24% in the first half of 2020.

The Company’s operations are highly dependent upon the interest rate-sensitive construction and steelmaking industries. Consequently, these marketplaces could experience lower levels of economic activity in an environment of rising interest rates or escalating costs.

Aside from these inherent risks from within its operations, the Company’s earnings are also affected by changes in short-term interest rates.

Variable-Rate Borrowing Facilities. At June 30, 2020, the Company had a $700 million Revolving Facility and a $400 million Trade Receivable Facility. Borrowings under these facilities bear interest at a variable interest rate. A hypothetical 100-basis-point increase in interest rates on borrowings of $130 million, which was the collective outstanding balance at June 30, 2020, would increase interest expense by $1.3 million on an annual basis.

Pension Expense. The Company’s results of operations are affected by its pension expense. Assumptions that affect pension expense include the discount rate and, for the qualified defined benefit pension plan only, the expected long-term rate of return on assets. Therefore, the Company has interest rate risk associated with these factors. The impact of hypothetical changes in these assumptions on the Company’s annual pension expense is discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. As of June 30, 2020, discount rates were approximately 50 basis points lower than the rate selected as of December 31, 2019, the most recent measurement date. Unless an event requires an interim remeasurement, the Company will next remeasure its pension obligation and funded status as of December 31, 2020.  Any decreases in the discount rate and pension asset values will negatively impact 2021 pension expense.

Energy Costs. Energy costs, including diesel fuel, natural gas, coal and liquid asphalt, represent significant production costs of the Company.  The cement operations and Magnesia Specialties business have fixed price agreements covering a majority of their 2020 coal requirements.  Energy expense for the six months ended June 30, 2020 decreased approximately 16% compared with the prior-year period, due to lower crude oil prices in 2020; however, any future energy prices cannot be reliably predicted.  A hypothetical 16% change in the Company’s energy prices for the full year 2020 as compared with 2019, assuming constant volumes, would change full year 2020 energy expense by $45 million.  

 

Page 47 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

(Continued)

 

Commodity Risk. Cement is a commodity, and competition is based principally on price, which is highly sensitive to changes in supply and demand. Prices are often subject to material changes in response to relatively minor fluctuations in supply and demand, general economic conditions and other market conditions beyond the Company’s control. Increases in the production capacity of industry participants or increases in cement imports tend to create an oversupply of such products leading to an imbalance between supply and demand, which can have a negative impact on product prices. There can be no assurance that prices for products sold will not decline in the future or that such declines will not have a material adverse effect on the Company’s business, financial condition and results of operations.  Assuming full year 2019 total product revenues for cement of $439 million, a hypothetical 10% change in sales price would impact total revenues by $43.9 million.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures.  As of June 30, 2020, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and the operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2020. There were no changes in the Company’s internal control over financial reporting during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.  

 

 

Page 48 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

PART II- OTHER INFORMATION

 

Certain legal proceedings in which the Company is involved are discussed in Note O to the consolidated financial statements and Part I, Item 3 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. See also Note 8 Commitments and Contingencies, Legal and Administrative Proceedings, of this Form 10-Q.

Item 1A. Risk Factors.

The Company’s businesses could be adversely affected by the ongoing COVID-19 pandemic, or any other outbreak of disease, epidemic or pandemic, or similar public health threat, or fear of such an event and its related economic and societal response.

The Company could be negatively impacted by the widespread outbreak of an illness or any other communicable disease, or any other public health crisis that results in economic and trade disruptions. In or around December 2019, a novel strain of coronavirus (COVID-19) was initially reported and in March 2020, the World Health Organization declared COVID-19 a global pandemic. The spreading of COVID-19, and more recently dramatic increases in COVID-19 cases in the Sunbelt and the extent that geography of outbreak primarily matches the regions in which the Company’s Building Materials business principally operates, and the related governmental orders limiting individuals’ movements and social gatherings, as well as requiring many businesses to close for an undetermined period of time, are negatively impacting economic activity, consumer confidence and discretionary spending, and market conditions. Further, COVID-19 could continue to negatively affect the health of the Company’s employees, employee productivity, customer purchasing patterns and fulfillment of purchase orders, availability of supplies, pricing for raw materials, and the ability to transport materials via the Company’s distribution network. While the Company’s operations have been treated as “essential” operations under applicable government orders restricting business activities imposed to prevent further outbreak of COVID-19, and accordingly have been permitted to continue to operate during the pendency of these orders, it is possible that they may not continue to be so treated under future government orders, or, even if so treated, site-specific health and safety concerns might otherwise require certain of the Company’s operations to be halted for some period of time. The Company is monitoring the impact of COVID-19 on its operations and on the demand for its products. Due to economic uncertainty related to COVID-19, contractors and customers may delay advancing, or ultimately cancel, building projects. In addition, reduced travel due to remote working and stay-at-home practices, including as a result of governmental orders restricting activity, may continue to negatively impact fuel tax revenues that fund highway projects. While the Company does not currently expect that the virus will have a material adverse effect on its liquidity, it is unable to accurately and fully predict the impact that the COVID-19 will have on its results of operations due to various uncertainties, including the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, actions that may be taken by governmental authorities and other third-parties in response to COVID-19 and the timing and pace of any economic recovery as COVID-19 impacts ultimately abate.  

Other than the item listed above, there have been no material changes in the risk factors disclosed in Part I. Item 1A. Risk Factors and Forward-Looking Statements of the Martin Marietta Annual Report on Form 10-K for the year ended December 31, 2019.

 

Page 49 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

PART II- OTHER INFORMATION

(Continued)

 

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

ISSUER PURCHASES OF EQUITY SECURITIES

 

 

 

 

 

 

 

 

 

 

 

Total Number of Shares

 

 

Maximum Number of

 

 

 

 

 

 

 

 

 

 

 

Purchased as Part of

 

 

Shares that May Yet

 

 

 

Total Number of

 

 

Average Price

 

 

Publicly Announced

 

 

be Purchased Under

 

Period

 

Shares Purchased

 

 

Paid per Share

 

 

Plans or Programs

 

 

the Plans or Programs

 

April 1, 2020 -  April 30, 2020

 

 

 

 

$

 

 

 

 

 

 

13,520,952

 

May 1, 2020 - May 31, 2020

 

 

 

 

$

 

 

 

 

 

 

13,520,952

 

June 1, 2020 - June 30, 2020

 

 

 

 

$

 

 

 

 

 

 

13,520,952

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reference is made to the press release dated February 10, 2015 for the December 31, 2014 fourth-quarter and full-year results and announcement of the share repurchase program. The Company’s Board of Directors authorized a maximum of 20 million shares to be repurchased under the program.  The program does not have an expiration date but has been temporarily suspended in light of the COVID-19 pandemic.

Item 4. Mine Safety Disclosures.

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95 to this Quarterly Report on Form 10-Q.

Page 50 of 52


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2020

PART II- OTHER INFORMATION

(Continued)

 

Item 6. Exhibits.

 

Exhibit No.

  

Document

 

 

10.1

  

Martin Marietta Nonqualified Deferred Cash Compensation Plan (incorporated by reference to Exhibit 10.1 to the Martin Marietta Materials, Inc. Current Report on Form 8-K, filed on June 29, 2020 (Commission File No. 1-12744))

 

 

10.2

  

Martin Marietta Nonqualified Deferred Cash Compensation Plan Adoption Agreement (incorporated by reference to Exhibit 10.2 to the Martin Marietta Materials, Inc. Current Report on Form 8-K, filed on June 29, 2020 (Commission File No. 1-12744))

 

 

31.01

  

Certification dated July 28, 2020 of Chief Executive Officer pursuant to Securities and Exchange Act of 1934 Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

31.02

  

Certification dated July 28, 2020 of Chief Financial Officer pursuant to Securities and Exchange Act of 1934 Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

32.01

  

Written Statement dated July 28, 2020 of Chief Executive Officer required by 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

32.02

  

Written Statement dated July 28, 2020 of Chief Financial Officer required by 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

95

  

Mine Safety Disclosures

 

 

101.INS

  

Inline XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

 

 

101.SCH

  

Inline XBRL Taxonomy Extension Schema Document

 

 

101.CAL

  

Inline XBRL Taxonomy Extension Calculation Linkbase Document

 

 

101.LAB

  

Inline XBRL Taxonomy Extension Label Linkbase Document

 

 

101.PRE

  

Inline XBRL Taxonomy Extension Presentation Linkbase Document

 

 

101.DEF

  

Inline XBRL Taxonomy Extension Definition Linkbase

 

 

104

 

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

 

 

 

 

Page 51 of 52


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

MARTIN MARIETTA MATERIALS, INC.

 

 

 

            (Registrant)

 

 

 

 

Date: July 28, 2020

By:

 

/s/ James A. J. Nickolas

 

 

 

James A. J. Nickolas

 

 

 

Sr. Vice President and

 

 

 

   Chief Financial Officer

 

 

Page 52 of 52

mlm-ex3101_10.htm

 

 

 

EXHIBIT 31.01

 

 

CERTIFICATION PURSUANT TO SECURITIES AND EXCHANGE ACT OF 1934 RULE 13a-14 AS ADOPTED PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

 

 

I, C. Howard Nye, certify that:

 

 

1.

I have reviewed this Form 10-Q of Martin Marietta Materials, Inc.;

 

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

3.

Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the consolidated financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4.

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


 


 

 

 

 

 

 

 

5.

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

Date:  July 28, 2020

 

By:

 

/s/ C. Howard Nye

 

 

 

 

C. Howard Nye

 

 

 

 

Chairman, President and

 

 

 

 

   Chief Executive Officer

 

 

mlm-ex3102_8.htm

 

 

 

EXHIBIT 31.02

 

 

CERTIFICATION PURSUANT TO SECURITIES AND EXCHANGE ACT OF 1934 RULE 13a-14 AS ADOPTED PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

 

 

I, James A. J. Nickolas, certify that:

 

 

1.

I have reviewed this Form 10-Q of Martin Marietta Materials, Inc.;

 

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

3.

Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the consolidated financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4.

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


 


 

 

 

 

 

 

 

5.

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a.

all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: July 28, 2020

 

By:

 

/s/ James A. J. Nickolas

 

 

 

 

James A. J. Nickolas

 

 

 

 

Sr. Vice President and

 

 

 

 

   Chief Financial Officer

 

 

mlm-ex3201_7.htm

EXHIBIT 32.01

 

Written Statement Pursuant to 18 U.S.C. 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

In connection with the Quarterly Report on Form 10-Q for the period ended June 30, 2020 (the “Report”) of Martin Marietta Materials, Inc. (the “Registrant”), as filed with the Securities and Exchange Commission on the date hereof, I, C. Howard Nye, the Chief Executive Officer of the Registrant, certify, to the best of my knowledge, that:

 

 

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

 

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

 

/s/ C. Howard Nye

C. Howard Nye

Chairman, President and

   Chief Executive Officer

 

Dated: July 28, 2020

 

A signed original of this written statement required by Section 906 has been provided to Martin Marietta Materials, Inc. and will be retained by Martin Marietta Materials, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

mlm-ex3202_6.htm

EXHIBIT 32.02

 

Written Statement Pursuant to 18 U.S.C. 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

In connection with the Quarterly Report on Form 10-Q for the period ended June 30, 2020 (the “Report”) of Martin Marietta Materials, Inc. (the “Registrant”), as filed with the Securities and Exchange Commission on the date hereof, I, James A. J. Nickolas, the Chief Financial Officer of the Registrant, certify, to the best of my knowledge, that:

 

 

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

 

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

 

/s/ James A. J. Nickolas

James A. J. Nickolas

Sr. Vice President and

   Chief Financial Officer

 

Dated: July 28, 2020

 

A signed original of this written statement required by Section 906 has been provided to Martin Marietta Materials, Inc. and will be retained by Martin Marietta Materials, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

mlm-ex95_9.htm

EXHIBIT 95

 

MINE SAFETY DISCLOSURES

 

The operation of the Corporation’s domestic aggregates quarries and mines is subject to regulation by the federal Mine Safety and Health Administration (MSHA) under the Federal Mine Safety and Health Act of 1977 (the Mine Act).  MSHA inspects the Corporation’s quarries and mines on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act.  Whenever MSHA issues a citation or order, it also generally proposes a civil penalty, or fine, related to the alleged violation.  Citations or orders may be contested and appealed, and as part of that process, are often reduced in severity and amount, and are sometimes dismissed.

 

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), the Corporation is required to present information regarding certain mining safety and health citations which MSHA has issued with respect to its aggregates mining operations in its periodic reports filed with the Securities and Exchange Commission (SEC).  In evaluating this information, consideration should be given to factors such as: (i) the number of citations and orders will vary depending on the size of the quarry or mine and types of operations (underground or surface), (ii) the number of citations issued will vary from inspector to inspector and location to location, and (iii) citations and orders can be contested and appealed, and in that process, may be reduced in severity and amount, and are sometimes dismissed.  

 

The Corporation has provided the information below in response to the SEC’s rules and regulations issued under the provisions of the Dodd-Frank Act.  The disclosures reflect U.S. mining operations only, as the requirements of the Dodd-Frank Act and the SEC rules and regulations thereunder do not apply to the Corporation’s quarries and mines operated outside the United States.

 

The Corporation presents the following items regarding certain mining safety and health matters for the three months ended June 30, 2020:

 

Total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard under section 104 of the Mine Act for which the Corporation has received a citation from MSHA (hereinafter, “Section 104 S&S Citations”).  If MSHA determines that a violation of a mandatory health or safety standard is likely to result in a reasonably serious injury or illness under the unique circumstance contributed to by the violation, MSHA will classify the violation as a “significant and substantial” violation (commonly referred to as an S&S violation).  MSHA inspectors will classify each citation or order written as an S&S violation or not.

Total number of orders issued under section 104(b) of the Mine Act (hereinafter, “Section 104(b) Orders”).  These orders are issued for situations in which MSHA determines a previous violation covered by a Section 104(a) citation has not been totally abated within the prescribed time period, so a further order is needed to require the mine operator to immediately withdraw all persons (except authorized persons) from the affected area of a quarry or mine.

 

Total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under Section 104(d) of the Mine Act (hereinafter, “Section 104(d) Citations and Orders”).  These violations are similar to those described above, but the standard is that the violation could significantly and substantially contribute to the cause and effect of a safety

 

 


or health hazard, but the conditions do not cause imminent danger, and the MSHA inspector finds that the violation is caused by an unwarranted failure of the operator to comply with the health and safety standards.

 

Total number of flagrant violations under section 110(b)(2) of the Mine Act (hereinafter, “Section 110(b)(2) Violations”). These violations are penalty violations issued if MSHA determines that violations are “flagrant”, for which civil penalties may be assessed. A “flagrant” violation means a reckless or repeated failure to make reasonable efforts to eliminate a known violation of a mandatory health or safety standard that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury.

 

Total number of imminent danger orders issued under section 107(a) of the Mine Act (hereinafter, “Section 107(a) Orders”).  These orders are issued for situations in which MSHA determines an imminent danger exists in the quarry or mine and results in orders of immediate withdrawal of all persons (except certain authorized persons) from the area of the quarry or mine affected by its condition until the imminent danger and the underlying conditions causing the imminent danger no longer exist.

 

Total dollar value of proposed assessments from MSHA under the Mine Act.  These are the amounts of proposed assessments issued by MSHA with each citation or order for the time period covered by the reports. Penalties are assessed by MSHA according to a formula that considers a number of factors, including the mine operator’s history, size, negligence, gravity of the violation, good faith in trying to correct the violation promptly, and the effect of the penalty on the operator’s ability to continue in business.

 

Total number of mining-related fatalities.  Mines subject to the Mine Act are required to report all fatalities occurring at their facilities unless the fatality is determined to be “non-chargeable” to the mining industry.  The final rules of the SEC require disclosure of mining-related fatalities at mines subject to the Mine Act.  Only fatalities determined by MSHA not to be mining-related may be excluded.

 

Receipt of written notice from MSHA of a pattern (or a potential to have such a pattern) of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of other mine health or safety hazards under Section 104(e) of the Mine Act.  If MSHA determines that a mine has a “pattern” of these types of violations, or the potential to have such a pattern, MSHA is required to notify the mine operator of the existence of such a thing.

 

Legal actions before the Federal Mine Safety and Health Review Commissions pending as of the last day of period.

 

Legal actions before the Federal Mine Safety and Health Review Commissions initiated during period.

 

Legal actions before the Federal Mine Safety and Health Review Commissions resolved during period.

 

The Federal Mine Safety and Health Review Commission (the Commission) is an independent adjudicative agency that provides administrative trial and appellate review of legal disputes arising under the Mine Act. The cases may involve, among other questions, challenges by operators to citations, orders and

 

 


penalties they have received from MSHA, or complaints of discrimination by miners under Section 105 of the Mine Act.  Appendix 1 shows, for each of the Corporation’s quarries and mines identified, as of June 30, 2020, the number of legal actions pending before the Commission, along with the number of legal actions initiated before the Commission during the quarter as well as resolved during the quarter. In addition, Appendix 1 includes a footnote to the column for legal actions before the Commission pending as of the last day of the period, which footnote breaks down that total number of legal actions pending by categories according to the type of proceeding in accordance with various categories established by the Procedural Rules of the Commission.

 

Appendix 1 attached.

 

 

 

 


Appendix 1

 

Location

MSHA ID

Section 104 S&S Citations (#)

Section 104(b) Orders (#)

Section 104(d) Citations and Orders (#)

Section 110(b)(2) Violations (#)

Section 107(a) Orders (#)

 

Total Dollar Value of MSHA Assessment/ $Proposed

 

Total Number of Mining Related Fatalities (#)

Received Notice of Pattern of Violation Under Section 104(e) (yes/no)

Received Notice of Potential to have Pattern under Section 104(e) (yes/no)

Legal Actions Pending as of Last Day of Period (#)*

Legal Actions Instituted During Period (#)

Legal Actions Resolved During Period (#)

Alexander Quarry

3101636

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Amelia Quarry

4407372

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

American Stone

3100189

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Anderson Creek Quarry

4402963

0

0

0

0

0

 

$

246

 

0

no

no

0

0

0

Arrowood Quarry

3100059

0

0

0

0

0

 

$

720

 

0

no

no

0

0

0

Asheboro Quarry

3100066

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Bakers Quarry

3100071

0

0

0

0

0

 

$

308

 

0

no

no

0

0

0

Belgrade Quarry

3100064

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Benson Quarry

3101979

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Berkeley Quarry

3800072

0

0

0

0

0

 

$

445

 

0

no

no

0

0

0

Bessemer City Quarry

3101105

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Black Ankle Quarry

3102220

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Bonds Quarry

3101963

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Boonesboro Quarry

1800024

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Burlington Quarry

3100042

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Caldwell Quarry

3101869

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Calhoun Sand

3800716

0

0

0

0

0

 

$

-

 

0

no

no

0

0

1

Castle Hayne Quarry

3100063

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Cayce

3800016

0

0

0

0

0

 

$

258

 

0

no

no

0

0

0

Central Rock Quarry

3100050

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Charlotte Quarry

3100057

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Churchville Quarry

1800012

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Clarks Quarry

3102009

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Cumberland Quarry

3102237

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Denver Quarry

3101971

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Doswell Quarry  VA

4400045

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

 

 


Appendix 1

 

East  Alamance Quarry

3102021

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Edmund Sand

3800662

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Fountain Quarry

3100065

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Franklin Quarry

3102130

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Frederick Quarry

1800013

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Fuquay Quarry

3102055

1

0

0

0

0

 

$

1,017

 

0

no

no

0

0

0

Garner Quarry

3100072

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Georgetown II Quarry

3800525

0

0

0

0

0

 

$

157

 

0

no

no

0

0

0

Greensboro Portable Plt

3102336

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Greensboro Portable Plt II

3102335

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Hickory Quarry

3100043

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Hicone

3102088

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Jamestown Quarry

3100051

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Kannapolis Quarry

3100070

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Kent Sand & Gravel

1800745

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Kings Mountain Quarry

3100047

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Lemon Springs Quarry

3101104

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Loamy Sand  Gravel

3800721

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Maiden Quarry

3102125

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Mallard Creek Quarry

3102006

0

0

0

0

0

 

$

185

 

0

no

no

0

0

0

Matthews Quarry

3102084

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Medford Quarry

1800035

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Midlothian Quarry

4403767

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Misc Greensboro District

B8611

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

North Columbia

3800146

0

0

0

0

0

 

$

521

 

0

no

no

0

0

0

North East Quarry

1800417

0

0

0

0

0

 

$

246

 

0

no

no

0

0

0

Old Charleston Sand

3800702

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Onslow Quarry

3102120

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Pinesburg Quarry

1800021

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Pomona Quarry

3100052

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Raleigh Durham Quarry

3101941

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Red Hill Quarry

4400072

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Reidsville Quarry

3100068

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Rock Hill Quarry

3800026

1

0

0

0

0

 

$

308

 

0

no

no

0

0

0

 

 


Appendix 1

 

Salem Stone

3102038

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Statesville Quarry

3100055

0

0

0

0

0

 

$

185

 

0

no

no

0

0

0

Texas Quarry

1800009

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Thomasville Quarry

3101475

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Warfordsburg Quarry

3600168

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Wilmington Sand

3101308

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Wilson Quarry

3102230

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Woodleaf Quarry

3100069

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Appling Quarry

0901083

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Auburn Al Quarry

0100006

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Auburn GA Quarry

0900436

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Augusta GA Quarry

0900065

2

0

0

0

0

 

$

719

 

0

no

no

0

0

0

Ball Ground Quarry

0900955

0

0

0

0

0

 

$

-

 

0

no

no

1

1

1

Calhoun Quarry

4003395

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Chattanooga Quarry

4003159

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Cumming Quarry

0900460

0

0

0

0

0

 

$

123

 

0

no

no

1

1

1

Douglasville Quarry

0900024

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Edgefield Quarry

3800738

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Jefferson Quarry

0901106

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Junction City Quarry

0901029

1

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Lithonia Quarry

0900023

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Maylene Quarry

0100634

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Morgan County

0901126

1

0

0

0

0

 

$

597

 

0

no

no

0

0

0

Newton Quarry

0900899

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

O'Neal Plant   Co 19

0103076

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Paulding Quarry

0901107

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Perry Quarry

0801083

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Red Oak Quarry

0900069

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Ruby Quarry

0900074

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Six Mile Quarry

0901144

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

St. Marys Sand Company

0901199

0

0

0

0

0

 

$

157

 

0

no

no

0

0

0

Tyrone Quarry

0900306

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Vance Quarry   Co 19

0103022

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Warrenton Quarry

0900580

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

 

 


Appendix 1

 

(45) North Indianapolis SURFACE

1200002

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Alden Portable Plant #1

1302031

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Alden Portable Plant #2

1302033

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Alden Portable Sand

1302037

0

0

0

0

0

 

$

492

 

0

no

no

0

0

0

Alden Quarry

1300228

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Alden Shop

1302320

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Ames Mine

1300014

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Apple Grove S  G

3301676

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Belmont Sand

1201911

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Bowling Green North Quarry

1500065

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Bowling Green South Quarry

1500025

0

0

0

0

0

 

$

377

 

0

no

no

0

1

1

Burning Springs Mine

4608862

0

0

0

0

0

 

$

246

 

0

no

no

0

0

0

Carmel Sand

1202124

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Cedar Rapids Quarry

1300122

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Cedar Rapids Sand Divest

1300724

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Cedarville Quarry

3304072

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Cloverdale Quarry

1201744

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Cumberland Quarry

1500037

0

0

0

0

0

 

$

403

 

0

no

no

0

0

0

Des Moines Portable

1300150

0

0

0

0

0

 

$

294

 

0

no

no

0

0

0

Des Moines Portable #2

1300932

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Dubois Quarry

2501046

0

0

0

0

0

 

$

246

 

0

no

no

0

0

0

Durham Mine

1301225

1

0

0

0

0

 

$

1,557

 

0

no

no

0

0

0

E Town Sand  Gravel

3304279

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Earlham Quarry

1302123

0

0

0

0

0

 

$

123

 

0

no

no

0

0

1

Fairborn Gravel

3301388

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Fairfield Quarry

3301396

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Ferguson Quarry

1300124

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Fort Calhoun Quarry

2500006

1

0

0

0

0

 

$

1,185

 

0

no

no

1

0

1

Fort Dodge Mine

1300032

0

0

0

0

0

 

$

246

 

0

no

no

0

0

0

Franklin Gravel

3302940

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Greenwood Quarry   New

2300141

3

0

0

0

0

 

$

448

 

0

no

no

0

0

0

Harlan Quarry

1500071

1

0

0

0

0

 

$

351

 

0

no

no

0

0

0

Hartford Quarry

1500095

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

 

 


Appendix 1

 

Indiana Recycling #1

1202198

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Iowa Grading

1302316

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Kentucky Ave Mine

1201762

1

0

0

0

0

 

$

3,187

 

0

no

no

0

0

0

Kokomo Mine

1202105

0

0

0

0

0

 

$

246

 

0

no

no

0

0

0

Kokomo Sand

1202203

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Kokomo Stone

1200142

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Linn County Sand

1302208

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Malcom Mine

1300112

0

0

0

0

0

 

$

246

 

0

no

no

0

0

0

Marshalltown Sand

1300718

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Midwest Division OH

A2354

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Moore Quarry

1302188

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

New Harvey Sand

1301778

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Noblesville Sand

1201994

1

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Noblesville Stone

1202176

2

0

0

0

0

 

$

123

 

0

no

no

1

1

1

North Indianapolis Quarry

1201993

3

0

0

0

0

 

$

2,149

 

0

no

no

0

0

0

North Valley Sand

2501271

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Ottawa Quarry   New

1401590

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Pana Quarry Divest

1100549

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Parkville Mine   New

2301883

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Pedersen Quarry

1302192

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Petersburg Ky Gravel

1516895

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Phillipsburg Quarry

3300006

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Portland Quarry

1302122

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Raccoon River Sand

1302315

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Randolph Mine

2302308

1

0

0

0

0

 

$

217

 

0

no

no

0

0

1

Reasnor Sand

1300814

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Ross Gravel

3301587

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Saylorville Sand

1302290

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Shamrock SG

3304011

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Spring Valley Cook Rd SG

3304534

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

St Cloud Quarry

2100081

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Stamper Mine

2302232

2

0

0

0

0

 

$

3,581

 

0

no

no

0

0

0

Sully Mine

1300063

0

0

0

0

0

 

$

369

 

0

no

no

0

0

0

Sunflower Qy   Co 61

1401556

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

 

 


Appendix 1

 

Troy Gravel

3301678

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Waverly Sand

1202038

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Weeping Water Mine

2500998

7

0

0

0

0

 

$

11,922

 

0

no

no

1

1

0

West Center Sand

2501231

2

0

0

0

0

 

$

1,844

 

0

no

no

0

0

0

Xenia Gravel

3301393

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Yellow Medicine Quarry

2100033

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Beckmann Quarry

4101335

0

0

0

0

0

 

$

615

 

0

no

no

0

0

0

Bedrock Sand  Gravel

4103283

0

0

0

0

0

 

$

246

 

0

no

no

0

0

0

Bells Savoy SG

4104019

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Black Rock Quarry

0300011

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Black Spur Quarry

4104159

0

0

0

0

0

 

$

1,095

 

0

no

no

0

0

0

Blake Quarry

1401584

1

0

0

0

0

 

$

1,140

 

0

no

no

1

0

1

Bridgeport Stone

4100007

1

0

0

0

0

 

$

1,166

 

0

no

no

0

0

0

Broken Bow SG

3400460

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Chico Quarry

4103360

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Davis Quarry

3401299

1

0

0

0

0

 

$

644

 

0

no

no

0

0

0

Garfield SG

4103909

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Garwood Gravel

4102886

1

0

0

0

0

 

$

1,486

 

0

no

no

0

0

0

GMS

C335

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

South Texas Port #2

4104204

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Hatton Quarry

0301614

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Helotes

4103137

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Highway 211 Quarry

4103829

0

0

0

0

0

 

$

403

 

0

no

no

0

0

0

Hondo

4104708

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Hondo West

4104090

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Hugo Quarry

3400061

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Hunter Stone

4105230

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Idabel Quarry

3400507

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Jones Mill Quarry

0301586

0

0

0

0

0

 

$

123

 

0

no

no

0

0

0

Koontz McCombs Pit

4105048

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Medina Rock  Rail

4105170

0

0

0

0

0

 

$

171

 

0

no

no

0

0

0

Mill Creek Limestone

3401859

0

0

0

0

0

 

$

246

 

0

no

no

0

0

0

Mill Creek Quarry

3401285

1

0

0

0

0

 

$

605

 

0

no

no

0

0

0

Perryville Aggregates

1601417

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

 

 


Appendix 1

 

Rio Medina

4103594

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

San Pedro Quarry

4101337

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Sawyer Quarry

3401634

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Smithson Valley Quarry

4104108

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Snyder Quarry

3401651

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Tin Top SG

4102852

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Troy Quarry

3401581

0

0

0

0

0

 

$

-

 

0

no

no

0

0

0

Washita Quarry

3402049

0

0

0

0

0

 

$

171

 

0

no

no

0

0

0

Webberville

4104363

0

0

0

0

 

0

 

$

-

 

0

no

no

0

0

0

Woodworth Aggregates

1601070

0

0

0

0

 

0

 

$

123

 

0

no

no

0

0

0

Granite Canyon Quarry

4800018

4

0

0

0

 

0

 

$

3,917

 

0

no

no

0

0

0

Greeley 35th Ready Mix

0503215

0

0

0

0

 

0

 

$

-

 

0

no

no

0

0

0

Greeley 35th Sand  Gravel

0504613

0

0

0

0

 

0

 

$

288

 

0

no

no

0

0

0

Guernsey Quarry

4800004

1

0

0

0

 

0

 

$

2,595

 

0

no

no

0

0

0

Milford Quarry   Utah

4202177

1

0

0

0

 

0

 

$

535

 

0

no

no

0

0

0

Pacific Quarry

4500844

1

0

0

0

 

0

 

$

4,635

 

0

no

no

0

0

0

Parkdale Quarry

0504635

0

0

0

0

 

0

 

$

-

 

0

no

no

0

0

0

Parsons Sand  Gravel

0504382

0

0

0

0

 

0

 

$

-

 

0

no

no

0

0

0

PC Portable Plant 4

4801565

0

0

0

0

 

0

 

$

-

 

0

no

no

0

0

0

Penrose Sand and Gravel

0504509

0

0

0

0

 

0

 

$

123

 

0

no

no

0

0

0

Platte Sand & Gravel

0504418

0

0

0

0

 

0

 

$

135

 

0

no

no

0

0

0

Portable  Crushing

0503984

0

0

0

0

 

0

 

$

246

 

0

no

no

0

0

0

Portable Plant 1

0504359

0

0

0

0

 

0

 

$

-

 

0

no

no

0

0

0

Portable Plant 21

0504520

0

0

0

0

 

0

 

$

-

 

0

no

no

0

0

0

Red Canyon Quarry

0504136

0

0

0

0

 

0

 

$

615

 

0

no

no

0

0

0

Riverbend Sand  Gravel

0504841

0

0

0

0

 

0

 

$

246

 

0

no

no

0

0

0

Spanish Springs Quarry Co 2

2600803

2

0

0

0

 

0

 

$

2,964

 

0

no

no

0

0

0

Spec Agg Quarry

0500860

1

0

0

0

 

0

 

$

1,486

 

0

no

no

0

0

0

Taft Sand  Gravel

0504526

0

0

0

0

 

0

 

$

123

 

0

no

no

0

0

0

Taft Shop

0504735

0

0

0

0

 

0

 

$

-

 

0

no

no

0

0

0

Hunter Cement

4102820

4

0

0

0

 

0

 

$

7,790

 

0

no

no

2

2

0

Midlothian Cement

4100071

2

0

0

0

 

0

 

$

5,966

 

0

no

no

2

1

0

Geology and Exploration

B7127

0

0

0

0

 

0

 

$

-

 

0

no

no

0

0

0

Salisbury Shop

3101235

0

0

0

0

 

0

 

$

-

 

0

no

no

0

0

0

 

 


Appendix 1

 

Woodville   Stone

3300156

1

0

0

0

 

0

 

$

4,773

 

0

no

no

1

1

0

TOTAL

 

53

0

0

0

 

0

 

$

82,560

 

0

 

 

11

9

9

* Of the 11 legal actions pending on June 30, 2020, none were contests of citations or orders referenced in Subpart B of CFR Part 2700, which includes contests of citations and orders issued under Section 104 of the Mine Act and contests of imminent danger orders under Section 107 of the Mine Act and all were a contest of proposed penalties referenced in Subpart C of 29 CFR Part 2700, which are administrative proceedings before the Commission challenging a civil penalty that MSHA has proposed for the violation contained in a citation or order.

 

 

v3.20.2
Document and Entity Information - shares
6 Months Ended
Jun. 30, 2020
Jul. 21, 2020
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2020  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q2  
Trading Symbol MLM  
Entity Registrant Name MARTIN MARIETTA MATERIALS, INC.  
Entity Central Index Key 0000916076  
Current Fiscal Year End Date --12-31  
Entity Filer Category Large Accelerated Filer  
Entity Shell Company false  
Entity Small Business false  
Entity Emerging Growth Company false  
Title of 12(b) Security Common Stock (Par Value $0.01)  
Security Exchange Name NYSE  
Entity File Number 1-12744  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Incorporation, State or Country Code NC  
Entity Tax Identification Number 56-1848578  
Entity Address, Address Line One 2710 Wycliff Road  
Entity Address, City or Town Raleigh  
Entity Address, State or Province NC  
Entity Address, Postal Zip Code 27607-3033  
City Area Code 919  
Local Phone Number 781-4550  
Document Quarterly Report true  
Document Transition Report false  
Entity Common Stock, Shares Outstanding   62,268,855
v3.20.2
Consolidated Balance Sheets - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Current Assets:    
Cash and cash equivalents $ 70.1 $ 21.0
Accounts receivable, net 690.4 573.7
Inventories, net 712.9 690.8
Other current assets 113.7 141.2
Total Current Assets 1,587.1 1,426.7
Property, plant and equipment 8,737.8 8,633.5
Allowances for depreciation, depletion and amortization (3,577.3) (3,427.5)
Net property, plant and equipment 5,160.5 5,206.0
Goodwill 2,397.5 2,396.8
Other intangibles, net 481.0 486.8
Operating lease right-of-use assets, net 468.0 481.9
Other noncurrent assets 132.5 133.4
Total Assets 10,226.6 10,131.6
Current Liabilities:    
Accounts payable 197.2 229.6
Accrued salaries, benefits and payroll taxes 43.4 56.7
Accrued insurance and other taxes 58.2 63.1
Current maturities of long-term debt and short-term facilities 130.0 340.0
Operating lease liabilities 51.4 52.7
Other current liabilities 115.1 96.4
Total Current Liabilities 595.3 838.5
Long-term debt 2,624.5 2,433.6
Deferred income taxes, net 741.2 733.0
Noncurrent operating lease liabilities 420.7 433.9
Other noncurrent liabilities 351.3 339.3
Total Liabilities 4,733.0 4,778.3
Equity:    
Common stock, par value $0.01 per share 0.6 0.6
Preferred stock, par value $0.01 per share
Additional paid-in capital 3,431.0 3,418.8
Accumulated other comprehensive loss (142.2) (145.8)
Retained earnings 2,201.7 2,077.2
Total Shareholders' Equity 5,491.1 5,350.8
Noncontrolling interests 2.5 2.5
Total Equity 5,493.6 5,353.3
Total Liabilities and Equity $ 10,226.6 $ 10,131.6
v3.20.2
Consolidated Balance Sheets (Parenthetical) - $ / shares
Jun. 30, 2020
Dec. 31, 2019
Statement Of Financial Position [Abstract]    
Common stock, par value $ 0.01 $ 0.01
Preferred stock, par value $ 0.01 $ 0.01
v3.20.2
Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) - USD ($)
shares in Millions, $ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Total Revenues $ 1,270.6 $ 1,279.5 $ 2,228.9 $ 2,218.4
Total Cost of Revenues 890.1 922.6 1,706.0 1,718.6
Gross Profit 380.5 356.9 522.9 499.8
Selling, general & administrative expenses 71.2 72.4 149.9 150.7
Acquisition-related expenses 0.5   0.8 0.2
Other operating expenses and (income), net 2.4 (1.4) 8.0 (6.2)
Earnings from Operations 306.4 285.9 364.2 355.1
Interest expense 31.2 33.3 61.0 66.2
Other nonoperating (income) and expenses, net (3.8) 13.2 (1.9) 11.7
Earnings before income tax expense 279.0 239.4 305.1 277.2
Income tax expense 61.4 49.9 61.6 44.9
Consolidated net earnings 217.6 189.5 243.5 232.3
Net Earnings Attributable to Martin Marietta Materials, Inc. 217.6 189.5 243.5 232.3
Consolidated Comprehensive Earnings:        
Earnings attributable to Martin Marietta Materials, Inc. 220.8 192.5 247.1 238.6
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest $ 220.8 $ 192.5 $ 247.1 $ 238.6
Net Earnings Attributable to Martin Marietta Materials, Inc. Per Common Share:        
Basic attributable to common shareholders $ 3.49 $ 3.02 $ 3.91 $ 3.71
Diluted attributable to common shareholders $ 3.49 $ 3.01 $ 3.90 $ 3.69
Weighted-Average Common Shares Outstanding:        
Basic 62.3 62.6 62.3 62.6
Diluted 62.3 62.7 62.4 62.7
Products and Services        
Total Revenues $ 1,189.5 $ 1,196.1 $ 2,080.5 $ 2,074.4
Total Cost of Revenues 807.4 838.3 1,554.8 1,572.5
Freight        
Total Revenues 81.1 83.4 148.4 144.0
Total Cost of Revenues $ 82.7 $ 84.3 $ 151.2 $ 146.1
v3.20.2
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Cash Flows from Operating Activities:    
Consolidated net earnings $ 243.5 $ 232.3
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities:    
Depreciation, depletion and amortization 193.4 182.0
Stock-based compensation expense 19.7 22.3
Gain on divestitures and sales of assets (3.1) (3.9)
Deferred income taxes 6.6 (6.4)
Other items, net 1.2 14.9
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:    
Accounts receivable, net (117.4) (187.1)
Inventories, net (21.7) 15.7
Accounts payable (0.5) 36.6
Other assets and liabilities, net 51.5 27.3
Net Cash Provided by Operating Activities 373.2 333.7
Cash Flows from Investing Activities:    
Additions to property, plant and equipment (175.7) (207.4)
Acquisitions, net (2.3)  
Proceeds from divestitures and sales of assets 17.9 6.0
Investments in life insurance contracts, net (6.2) 0.5
Other investing activities, net (4.5) (1.0)
Net Cash Used for Investing Activities (170.8) (201.9)
Cash Flows from Financing Activities:    
Borrowings of debt 618.0 165.0
Repayments of debt (637.0) (170.0)
Payments on financing leases (1.6) (1.8)
Debt issuance costs (1.7)  
Distributions to owners of noncontrolling interest   (0.6)
Repurchases of common stock (50.0) (50.0)
Dividends paid (69.4) (60.6)
Proceeds from exercise of stock options 1.3 7.1
Shares withheld for employees' income tax obligations (12.9) (12.2)
Net Cash Used for Financing Activities (153.3) (123.1)
Net Increase in Cash and Cash Equivalents 49.1 8.7
Cash and Cash Equivalents, beginning of period 21.0 44.9
Cash and Cash Equivalents, end of period $ 70.1 $ 53.6
v3.20.2
Consolidated Statements of Total Equity (Unaudited) - USD ($)
shares in Millions, $ in Millions
Total
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive Loss
Retained Earnings
Total Shareholders' Equity
Noncontrolling Interests
Beginning Balance at Dec. 31, 2018 $ 4,949.4 $ 0.6 $ 3,396.1 $ (143.6) $ 1,693.3 $ 4,946.4 $ 3.0
Beginning Balance (in shares) at Dec. 31, 2018   62.5          
Consolidated net earnings 232.3       232.3 232.3  
Other comprehensive earnings, net of tax 6.3     6.3   6.3  
Dividends declared (60.6)       (60.6) (60.6)  
Issuances of common stock for stock award plans 10.5   10.5     10.5  
Issuances of common stock for stock award plans (in shares)   0.1          
Shares withheld for employees' income tax obligations (12.3)   (12.3)     (12.3)  
Repurchases of common stock (50.0)       (50.0) (50.0)  
Repurchases of common stock, Shares   (0.2)          
Stock-based compensation expense 22.3   22.3     22.3  
Distributions to owners of noncontrolling interest (0.6)           (0.6)
Ending Balance at Jun. 30, 2019 5,097.3 $ 0.6 3,416.6 (137.3) 1,815.0 5,094.9 2.4
Ending Balance (in shares) at Jun. 30, 2019   62.4          
Beginning Balance at Mar. 31, 2019 4,975.5 $ 0.6 3,406.5 (140.3) 1,705.7 4,972.5 3.0
Beginning Balance (in shares) at Mar. 31, 2019   62.6          
Consolidated net earnings 189.5       189.5 189.5  
Other comprehensive earnings, net of tax 3.0     3.0   3.0  
Dividends declared (30.2)       (30.2) (30.2)  
Issuances of common stock for stock award plans 6.5   6.5     6.5  
Shares withheld for employees' income tax obligations (5.1)   (5.1)     (5.1)  
Repurchases of common stock (50.0)       (50.0) (50.0)  
Repurchases of common stock, Shares   (0.2)          
Stock-based compensation expense 8.7   8.7     8.7  
Distributions to owners of noncontrolling interest (0.6)           (0.6)
Ending Balance at Jun. 30, 2019 5,097.3 $ 0.6 3,416.6 (137.3) 1,815.0 5,094.9 2.4
Ending Balance (in shares) at Jun. 30, 2019   62.4          
Beginning Balance at Dec. 31, 2019 5,353.3 $ 0.6 3,418.8 (145.8) 2,077.2 5,350.8 2.5
Beginning Balance (in shares) at Dec. 31, 2019   62.4          
Consolidated net earnings 243.5       243.5 243.5  
Other comprehensive earnings, net of tax 3.6     3.6   3.6  
Dividends declared (69.0)       (69.0) (69.0)  
Issuances of common stock for stock award plans 5.6   5.6     5.6  
Issuances of common stock for stock award plans (in shares)   0.1          
Shares withheld for employees' income tax obligations (13.1)   (13.1)     (13.1)  
Repurchases of common stock (50.0)       (50.0) (50.0)  
Repurchases of common stock, Shares   (0.2)          
Stock-based compensation expense 19.7   19.7     19.7  
Ending Balance at Jun. 30, 2020 5,493.6 $ 0.6 3,431.0 (142.2) 2,201.7 5,491.1 2.5
Ending Balance (in shares) at Jun. 30, 2020   62.3          
Beginning Balance at Mar. 31, 2020 5,299.4 $ 0.6 3,423.1 (145.4) 2,018.6 5,296.9 2.5
Beginning Balance (in shares) at Mar. 31, 2020   62.2          
Consolidated net earnings 217.6       217.6 217.6  
Other comprehensive earnings, net of tax 3.2     3.2   3.2  
Dividends declared (34.5)       (34.5) (34.5)  
Issuances of common stock for stock award plans 1.1   1.1     1.1  
Issuances of common stock for stock award plans (in shares)   0.1          
Shares withheld for employees' income tax obligations (0.4)   (0.4)     (0.4)  
Stock-based compensation expense 7.2   7.2     7.2  
Ending Balance at Jun. 30, 2020 $ 5,493.6 $ 0.6 $ 3,431.0 $ (142.2) $ 2,201.7 $ 5,491.1 $ 2.5
Ending Balance (in shares) at Jun. 30, 2020   62.3          
v3.20.2
Consolidated Statements of Total Equity (Parenthetical) (Unaudited) - $ / shares
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement Of Stockholders Equity [Abstract]        
Dividends declared $ 0.55 $ 0.48 $ 1.10 $ 0.96
v3.20.2
Significant Accounting Policies
6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Significant Accounting Policies

1.

Significant Accounting Policies

Organization

Martin Marietta Materials, Inc. (the Company or Martin Marietta) is a natural resource-based building materials company. The Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 300 quarries, mines and distribution yards in 27 states, Canada and The Bahamas.  In the southwestern and western United States, 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 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, ready mixed concrete and asphalt and paving product lines are reported collectively as the “Building Materials” business.

Effective January 1, 2020, the Company moved the management of its one quarry in the state of Washington from the Mid-America Group to the West Group, resulting in an immaterial change to its reportable segments. The Company’s Building Materials business includes three reportable segments: the Mid-America Group, the Southeast Group and the West Group.

 

BUILDING MATERIALS BUSINESS

Reportable Segments

  

Mid-America Group

  

Southeast Group

  

West Group

Operating Locations

  

Indiana, Iowa, northern Kansas, Kentucky, Maryland, Minnesota, Missouri, eastern Nebraska, North Carolina, Ohio, Pennsylvania,
South Carolina, Virginia
and West Virginia

  

Alabama, Florida, Georgia, southwestern South Carolina, Tennessee, Nova Scotia and The Bahamas

  

Arkansas, Colorado, southern Kansas, Louisiana, western Nebraska, Nevada, Oklahoma, Texas, Utah, Wyoming
and Washington

 

 

 

 

 

 

 

 

Product Lines

 

Aggregates

 

Aggregates

 

Aggregates, Cement, Ready Mixed Concrete, Asphalt and Paving

The Company has a Magnesia Specialties business with 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 in the steel and mining industries.

Basis of Presentation

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, 2019. 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 and six months ended June 30, 2020 are not indicative of the results expected for other interim periods or the full year. The consolidated

balance sheet at December 31, 2019 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 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, 2019.

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, including the impact of the coronavirus (COVID-19) pandemic and the related responses, 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.

New Accounting Pronouncement

Credit Losses

Effective January 1, 2020, the Company adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments – Credit Losses (ASU 2016-13), which includes a current expected credit loss (CECL) model that requires an entity to estimate credit losses expected over the life of an exposure or pool of exposures based on historical information, current information and reasonable and supportable forecasts at the time the asset is recognized and is remeasured at each reporting period. ASU 2016-13 primarily relates to the Company’s receivables, but the scope also includes retainage and contract assets related to its paving business. The adoption of ASU 2016-13 did not have a material impact on the Company’s financial position or statement of earnings and comprehensive earnings. The Company amended its allowance for credit losses policy, which follows, for the implementation of ASU 2016-13.

The Company records an allowance for credit losses, which includes a provision for probable losses based on historical write-offs, adjusted for current conditions as deemed necessary, and a specific reserve for accounts deemed at risk. The allowance is the Company’s estimate for receivables as of the balance sheet date that ultimately will not be collected. Any changes in the allowance are reflected in earnings in the period in which the change occurs.  The Company writes-off accounts receivable when it becomes probable, based upon customer facts and circumstances, that such amounts will not be collected.

Consolidated Comprehensive Earnings/Loss and Accumulated Other Comprehensive Loss

Consolidated comprehensive earnings/loss and accumulated other comprehensive loss consist of consolidated net earnings or loss; 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.

Comprehensive earnings attributable to Martin Marietta is as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Net earnings attributable to Martin Marietta

 

$

217.6

 

 

$

189.5

 

 

$

243.5

 

 

$

232.3

 

Other comprehensive earnings, net of tax

 

 

3.2

 

 

 

3.0

 

 

 

3.6

 

 

 

6.3

 

Comprehensive earnings attributable to Martin

   Marietta

 

$

220.8

 

 

$

192.5

 

 

$

247.1

 

 

$

238.6

 

 

 

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 June 30, 2020

 

Balance at beginning of period

 

$

(142.4

)

 

$

(3.0

)

 

$

(145.4

)

Other comprehensive earnings before reclassifications,

   net of tax

 

 

 

 

 

0.8

 

 

 

0.8

 

Amounts reclassified from accumulated other

   comprehensive loss, net of tax

 

 

2.4

 

 

 

 

 

 

2.4

 

Other comprehensive earnings, net of tax

 

 

2.4

 

 

 

0.8

 

 

 

3.2

 

Balance at end of period

 

$

(140.0

)

 

$

(2.2

)

 

$

(142.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2019

 

Balance at beginning of period

 

$

(138.7

)

 

$

(1.6

)

 

$

(140.3

)

Other comprehensive earnings before reclassifications,

   net of tax

 

 

 

 

 

0.3

 

 

 

0.3

 

Amounts reclassified from accumulated other

   comprehensive loss, net of tax

 

 

2.7

 

 

 

 

 

 

2.7

 

Other comprehensive earnings, net of tax

 

 

2.7

 

 

 

0.3

 

 

 

3.0

 

Balance at end of period

 

$

(136.0

)

 

$

(1.3

)

 

$

(137.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in Millions)

 

 

 

Pension and

Postretirement Benefit Plans

 

 

Foreign Currency

 

 

Accumulated

Other Comprehensive

Loss

 

 

 

Six Months Ended June 30, 2020

 

Balance at beginning of period

 

$

(144.9

)

 

$

(0.9

)

 

$

(145.8

)

Other comprehensive loss before

   reclassifications, net of tax

 

 

 

 

 

(1.3

)

 

 

(1.3

)

Amounts reclassified from accumulated

   other comprehensive loss, net of tax

 

 

4.9

 

 

 

 

 

 

4.9

 

Other comprehensive earnings (loss), net of tax

 

 

4.9

 

 

 

(1.3

)

 

 

3.6

 

Balance at end of period

 

$

(140.0

)

 

$

(2.2

)

 

$

(142.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2019

 

Balance at beginning of period

 

$

(141.5

)

 

$

(2.1

)

 

$

(143.6

)

Other comprehensive earnings before

   reclassifications, net of tax

 

 

 

 

 

0.8

 

 

 

0.8

 

Amounts reclassified from accumulated

   other comprehensive loss, net of tax

 

 

5.5

 

 

 

 

 

 

5.5

 

Other comprehensive earnings, net of tax

 

 

5.5

 

 

 

0.8

 

 

 

6.3

 

Balance at end of period

 

$

(136.0

)

 

$

(1.3

)

 

$

(137.3

)

 

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

 

 

 

Pension and Postretirement Benefit Plans

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Balance at beginning of period

 

$

84.4

 

 

$

83.3

 

 

$

85.2

 

 

$

84.2

 

Tax effect of other comprehensive earnings

 

 

(0.8

)

 

 

(0.9

)

 

 

(1.6

)

 

 

(1.8

)

Balance at end of period

 

$

83.6

 

 

$

82.4

 

 

$

83.6

 

 

$

82.4

 

Reclassifications out of accumulated other comprehensive loss are as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

Affected line items in the consolidated

 

 

June 30,

 

 

June 30,

 

 

statements of earnings and

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

comprehensive earnings

 

 

(Dollars in Millions)

 

 

 

Pension and postretirement

   benefit plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service credit

 

$

 

 

$

(0.2

)

 

$

(0.1

)

 

$

(0.4

)

 

 

Actuarial loss

 

 

3.2

 

 

 

3.8

 

 

 

6.6

 

 

 

7.7

 

 

 

 

 

 

3.2

 

 

 

3.6

 

 

 

6.5

 

 

 

7.3

 

 

Other nonoperating (income) and expenses, net

Tax benefit

 

 

(0.8

)

 

 

(0.9

)

 

 

(1.6

)

 

 

(1.8

)

 

Income tax expense

 

 

$

2.4

 

 

$

2.7

 

 

$

4.9

 

 

$

5.5

 

 

 

Earnings per Common Share

The numerator for basic and diluted earnings per common share is net earnings attributable to Martin Marietta reduced by dividends and undistributed earnings attributable to certain of the Company’s stock-based compensation. If there is a net loss, no amount of the undistributed loss is attributed to unvested participating securities. 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 are 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 and six months ended June 30, 2020 and 2019, the diluted per-share computations reflect the number of common shares outstanding to include the number of additional shares that would have been outstanding if the potentially dilutive common shares had been issued.

The following table reconciles the numerator and denominator for basic and diluted earnings per common share:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(In Millions)

 

Net earnings attributable to Martin Marietta

 

$

217.6

 

 

$

189.5

 

 

$

243.5

 

 

$

232.3

 

Less: Distributed and undistributed earnings

   attributable to unvested awards

 

 

0.2

 

 

 

0.4

 

 

 

0.2

 

 

 

0.5

 

Basic and diluted net earnings available to common

   shareholders attributable to Martin Marietta

 

$

217.4

 

 

$

189.1

 

 

$

243.3

 

 

$

231.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted-average common shares outstanding

 

 

62.3

 

 

 

62.6

 

 

 

62.3

 

 

 

62.6

 

Effect of dilutive employee and director awards

 

 

 

 

 

0.1

 

 

 

0.1

 

 

 

0.1

 

Diluted weighted-average common shares

   outstanding

 

 

62.3

 

 

 

62.7

 

 

 

62.4

 

 

 

62.7

 

 

v3.20.2
Revenue Recognition
6 Months Ended
Jun. 30, 2020
Revenue From Contract With Customer [Abstract]  
Revenue Recognition

2.

Revenue Recognition

Total revenues include sales of products and services to customers, net of any discounts or allowances, and freight revenues. Product revenues are recognized when control of the promised good is transferred to the customer, typically when finished products are shipped. Intersegment and interproduct revenues are eliminated in consolidation. Service revenues are derived from the paving business and recognized using the percentage-of-completion method under the cost-to-cost approach. Freight revenues reflect delivery arranged by the Company using a third party on behalf of the customer and are recognized consistently with the timing of the product revenues.

Performance Obligations. Performance obligations are contractual promises to transfer or provide a distinct good or service for a stated price. The Company’s product sales agreements are single-performance obligations that are satisfied at a point in time. Performance obligations within paving service agreements are satisfied over time, primarily ranging from one day to 21 months. For product revenues and freight revenues, customer payment terms are generally 30 days from invoice date. Customer payments for the paving operations are based on a contractual billing schedule and are due 30 days from invoice date.

Future revenues from unsatisfied performance obligations at June 30, 2020 and 2019 were $202.7 million and $177.9 million, respectively, where the remaining periods to complete these obligations ranged from one month to 14 months and one month to 18 months, respectively.  

Revenue by Category. The following table presents the Company’s total revenues by category for each reportable segment. Prior-year segment information has been reclassified to conform to the reporting structure change described in Note 1.

 

 

 

Three Months Ended

 

 

 

June 30, 2020

 

 

 

Products and Services

 

 

Freight

 

 

Total

 

 

 

(Dollars in Millions)

 

Mid-America Group

 

$

362.9

 

 

$

29.4

 

 

$

392.3

 

Southeast Group

 

 

136.8

 

 

 

5.4

 

 

 

142.2

 

West Group

 

 

640.9

 

 

 

41.6

 

 

 

682.5

 

Total Building Materials Business

 

 

1,140.6

 

 

 

76.4

 

 

 

1,217.0

 

Magnesia Specialties

 

 

48.9

 

 

 

4.7

 

 

 

53.6

 

Total

 

$

1,189.5

 

 

$

81.1

 

 

$

1,270.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

June 30, 2019

 

 

 

Products and Services

 

 

Freight

 

 

Total

 

 

 

(Dollars in Millions)

 

Mid-America Group

 

$

381.9

 

 

$

32.6

 

 

$

414.5

 

Southeast Group

 

 

132.0

 

 

 

5.0

 

 

 

137.0

 

West Group

 

 

611.8

 

 

 

39.9

 

 

 

651.7

 

Total Building Materials Business

 

 

1,125.7

 

 

 

77.5

 

 

 

1,203.2

 

Magnesia Specialties

 

 

70.4

 

 

 

5.9

 

 

 

76.3

 

Total

 

$

1,196.1

 

 

$

83.4

 

 

$

1,279.5

 

 

Service revenues, which include paving operations located in Colorado, were $94.0 million and $71.0 million for the three months ended June 30, 2020 and 2019, respectively.

 

 

 

Six Months Ended

 

 

 

June 30, 2020

 

 

 

Products and Services

 

 

Freight

 

 

Total

 

 

 

(Dollars in Millions)

 

Mid-America Group

 

$

603.9

 

 

$

49.2

 

 

$

653.1

 

Southeast Group

 

 

253.7

 

 

 

9.7

 

 

 

263.4

 

West Group

 

 

1,114.1

 

 

 

79.0

 

 

 

1,193.1

 

Total Building Materials Business

 

 

1,971.7

 

 

 

137.9

 

 

 

2,109.6

 

Magnesia Specialties

 

 

108.8

 

 

 

10.5

 

 

 

119.3

 

Total

 

$

2,080.5

 

 

$

148.4

 

 

$

2,228.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2019

 

 

 

Products and Services

 

 

Freight

 

 

Total

 

 

 

(Dollars in Millions)

 

Mid-America Group

 

$

611.5

 

 

$

51.1

 

 

$

662.6

 

Southeast Group

 

 

247.4

 

 

 

8.9

 

 

 

256.3

 

West Group

 

 

1,076.0

 

 

 

73.2

 

 

 

1,149.2

 

Total Building Materials Business

 

 

1,934.9

 

 

 

133.2

 

 

 

2,068.1

 

Magnesia Specialties

 

 

139.5

 

 

 

10.8

 

 

 

150.3

 

Total

 

$

2,074.4

 

 

$

144.0

 

 

$

2,218.4

 

 

Service revenues for the six months ended June 30, 2020 and 2019 were $108.5 million and $81.0 million, respectively.

Contract Balances. Costs in excess of billings relate to the conditional right to consideration for completed contractual performance and are contract assets on the consolidated balance sheets. Costs in excess of billings are reclassified to accounts receivable when the right to consideration becomes unconditional. Billings in excess of costs relate to customers invoiced in advance of contractual performance and are contract liabilities on the consolidated balance sheets. The following table presents information about the Company’s contract balances:

 

(Dollars in Millions)

 

June 30, 2020

 

 

December 31, 2019

 

Costs in excess of billings

 

$

7.2

 

 

$

2.8

 

Billings in excess of costs

 

$

9.9

 

 

$

7.8

 

 

Revenues recognized from the beginning balance of contract liabilities for the three months ended June 30, 2020 and 2019 were $4.1 million and $4.8 million, respectively, and for the six months ended June 30, 2020 and 2019 were $6.6 million and $5.8 million, respectively.

Retainage, which primarily relates to the paving services, represents amounts that have been billed to customers but payment withheld until final acceptance by the customer of the performance obligation.  Included in other current assets on the Company’s consolidated balance sheets, retainage was $9.5 million and $10.2 million at June 30, 2020 and December 31, 2019, respectively.

Policy Elections. When the Company arranges third-party freight to deliver products to customers, the Company has elected the delivery to be a fulfillment activity rather than a separate performance obligation.  Further, the Company acts as a principal in the delivery arrangements and, as required by the accounting standard, the related revenues and costs are presented gross and are included in the consolidated statements of earnings.

v3.20.2
Inventories, Net
6 Months Ended
Jun. 30, 2020
Inventory Disclosure [Abstract]  
Inventories, Net

3.

Inventories, Net

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Finished products

 

$

671.5

 

 

$

643.6

 

Products in process

 

 

37.8

 

 

 

41.9

 

Raw materials

 

 

36.7

 

 

 

32.4

 

Supplies and expendable parts

 

 

144.9

 

 

 

141.5

 

 

 

 

890.9

 

 

 

859.4

 

Less: Allowances

 

 

(178.0

)

 

 

(168.6

)

Total

 

$

712.9

 

 

$

690.8

 

v3.20.2
Long-Term Debt
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Long-Term Debt

4.

Long-Term Debt

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

4.250% Senior Notes, due 2024

 

$

397.3

 

 

$

397.0

 

7% Debentures, due 2025

 

 

124.4

 

 

 

124.4

 

3.450% Senior Notes, due 2027

 

 

297.4

 

 

 

297.3

 

3.500% Senior Notes, due 2027

 

 

495.6

 

 

 

495.3

 

2.500% Senior Notes, due 2030

 

 

489.6

 

 

 

 

6.25% Senior Notes, due 2037

 

 

228.2

 

 

 

228.1

 

4.250% Senior Notes, due 2047

 

 

591.8

 

 

 

591.7

 

Floating Rate Senior Notes, due 2020, interest rate of 2.55%

   at December 31, 2019

 

 

 

 

 

299.7

 

Trade Receivable Facility, interest rate of 0.89% and 2.42% at

   June 30, 2020 and December 31, 2019, respectively

 

 

130.0

 

 

 

340.0

 

Other notes

 

 

0.2

 

 

 

0.1

 

Total debt

 

 

2,754.5

 

 

 

2,773.6

 

Less: Current maturities of long-term debt and short-term

   facilities

 

 

(130.0

)

 

 

(340.0

)

Long-term debt

 

$

2,624.5

 

 

$

2,433.6

 

 

On March 5, 2020, the Company issued $500 million aggregate principal amount of 2.500% Senior Notes due 2030 (the 2.500% Senior Notes). The 2.500% Senior Notes are carried net of original issue discount, which is being amortized by the effective interest method over the life of the issue. The 2.500% Senior Notes are redeemable prior to December 15, 2029 at their make-whole redemption price at a discount rate of the U.S. Treasury Rate plus 30 basis points, or on or after December 15, 2029 at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest to the date of redemption. The Company used the net proceeds for general corporate purposes, including the repayment of $300 million of Floating Rate Senior Notes at maturity in May 2020. At December 31, 2019, the Floating Rate Senior Notes due May 2020 were classified as noncurrent long-term debt on the consolidated balance sheet as the Company had the intent and ability to refinance the notes on a long-term basis.

The Company, through a wholly-owned special-purpose subsidiary, has a $400 million trade receivable securitization facility (the Trade Receivable Facility) which matures on September 23, 2020. The Trade Receivable Facility, with Truist Bank, Regions Bank, PNC Bank, N.A., The Bank of Tokyo-Mitsubishi UFJ, LTD. (New York Branch), and certain other lenders that may become a party to the facility from time to time, is backed by eligible trade receivables, as defined, and is limited to the lesser of the facility limit or the borrowing base, as defined.  These receivables are originated by the Company and then sold to the wholly-owned special-purpose subsidiary by the Company.  The Company continues to be responsible for the servicing and administration of the receivables purchased by the wholly-owned special-purpose subsidiary.  Borrowings under the Trade Receivable Facility bear interest at a rate equal to one-month London Interbank Offered Rate, or LIBOR, plus 0.725%, subject to change in the event that this rate no longer reflects the lender’s cost of lending.  The Trade Receivable Facility contains a cross-default provision to the Company’s other debt agreements.

The Company has a $700 million five-year senior unsecured revolving facility (the Revolving Facility) with JPMorgan Chase Bank, N.A., as Administrative Agent, Truist Bank, Deutsche Bank Securities, Inc., and Wells Fargo Bank, N.A., as Co-Syndication Agents, and the lenders party thereto.  Borrowings under the Revolving Facility bear interest, at the Company’s option, at rates based upon LIBOR or a base rate, plus, for each rate, a margin determined in accordance with a ratings-based pricing grid. There were no borrowings outstanding under the Revolving Facility at June 30, 2020 or December 31, 2019. The Revolving Facility requires the Company’s ratio of consolidated debt-to-consolidated earnings before interest, taxes, depreciation and amortization (EBITDA), as defined by the Revolving Facility, for the trailing-twelve months (the Ratio) to not exceed 3.50x as of the end of any fiscal quarter, provided that the Company may exclude from the Ratio debt incurred in connection with certain acquisitions during such quarter or the three preceding quarters so long as the Ratio calculated without such exclusion does not exceed 3.75x.  Additionally, if there are no amounts outstanding under the Revolving Facility and the Trade Receivable Facility, consolidated debt, including debt for which the Company is a co-borrower, may be reduced by the Company’s unrestricted cash and cash equivalents in excess of $50 million, such reduction not to exceed $200 million, for purposes of the covenant calculation.  The Company was in compliance with this covenant at June 30, 2020.

The Revolving Facility expires on December 5, 2024, with any outstanding principal amounts, together with interest accrued thereon, due in full on that date. Available borrowings under the Revolving Facility are reduced by any outstanding letters of credit issued by the Company under the Revolving Facility.  The Company had $2.3 million of outstanding letters of credit issued under the Revolving Facility at June 30, 2020 and December 31, 2019.

v3.20.2
Financial Instruments
6 Months Ended
Jun. 30, 2020
Financial Instruments Disclosure [Abstract]  
Financial Instruments

5.

Financial Instruments

The Company’s financial instruments include cash equivalents, accounts receivable, notes receivable, accounts payable, publicly-registered long-term notes, debentures and other long-term debt.

Cash equivalents are placed primarily in money market funds, money market demand deposit accounts and Eurodollar time deposits. The Company’s cash equivalents have original maturities of less than three months. Due to the short maturity of these investments, they are carried on the consolidated balance sheets at cost, which approximates fair value.

Accounts receivable are due from a large number of customers, primarily in the construction industry, and are dispersed across wide geographic and economic regions. No single customer accounted for 10% or more of consolidated total revenues. The estimated fair values of accounts receivable approximate their carrying amounts due to the periodic reset of interest rates.

Accounts payable represent amounts owed to suppliers and vendors. The estimated fair value of accounts payable approximates the carrying amount due to the short-term nature of the payables.

The carrying values and fair values of the Company’s long-term debt were $2.75 billion and $3.05 billion, respectively, at June 30, 2020 and $2.77 billion and $2.94 billion, respectively, at December 31, 2019. The estimated fair value of the publicly-registered long-term notes was estimated based on Level 2 of the fair value hierarchy using quoted market prices. The estimated fair value of other borrowings approximate their carrying amounts as the interest rates reset periodically.  

v3.20.2
Income Taxes
6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes

6.

Income Taxes

The effective income tax rate reflects the effect of federal and state income taxes on earnings and the impact of differences in book and tax accounting arising primarily from the permanent tax benefits associated with the statutory depletion deduction for mineral reserves.  For the six months ended June 30, 2020, the effective income tax rate of 20.2% reflected a $6.9 million discrete benefit from financing third-party railroad track maintenance. In exchange, the Company received a federal income tax credit and deduction.  For the six months ended June 30, 2019, the effective income tax rate of 16.2% reflected a $13.2 million discrete benefit from a change in the tax status of a subsidiary from a partnership to a corporation.

The Company records interest accrued in relation to unrecognized tax benefits as income tax expense. Penalties, if incurred, are recorded as operating expenses in the consolidated statements of earnings and comprehensive earnings.

v3.20.2
Pension and Postretirement Benefits
6 Months Ended
Jun. 30, 2020
Compensation And Retirement Disclosure [Abstract]  
Pension and Postretirement Benefits

7.

Pension and Postretirement Benefits

The estimated components of the recorded net periodic benefit cost (credit) for pension and postretirement benefits are as follows:

 

 

Pension

 

 

Postretirement Benefits

 

 

 

Three Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Service cost

 

$

10.4

 

 

$

7.6

 

 

$

 

 

$

 

Interest cost

 

 

9.8

 

 

 

9.3

 

 

 

0.1

 

 

 

0.1

 

Expected return on assets

 

 

(14.8

)

 

 

(11.8

)

 

 

 

 

 

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service cost (credit)

 

 

0.2

 

 

 

 

 

 

(0.2

)

 

 

(0.2

)

Actuarial loss (gain)

 

 

3.2

 

 

 

3.9

 

 

 

 

 

 

(0.1

)

Net periodic benefit cost (credit)

 

$

8.8

 

 

$

9.0

 

 

$

(0.1

)

 

$

(0.2

)

 

 

 

Pension

 

 

Postretirement Benefits

 

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Service cost

 

$

19.6

 

 

$

15.4

 

 

$

 

 

$

 

Interest cost

 

 

18.5

 

 

 

18.9

 

 

 

0.2

 

 

 

0.3

 

Expected return on assets

 

 

(28.6

)

 

 

(23.9

)

 

 

 

 

 

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service cost (credit)

 

 

0.3

 

 

 

 

 

 

(0.4

)

 

 

(0.4

)

Actuarial loss (gain)

 

 

6.7

 

 

 

7.9

 

 

 

(0.1

)

 

 

(0.2

)

Net periodic benefit cost (credit)

 

$

16.5

 

 

$

18.3

 

 

$

(0.3

)

 

$

(0.3

)

 

The service cost component of net periodic benefit cost (credit) is included in cost of revenues – products and services and selling, general and administrative expenses. All other components are included in other nonoperating (income) and expenses, net, in the consolidated statements of earnings and comprehensive earnings.

v3.20.2
Commitments and Contingencies
6 Months Ended
Jun. 30, 2020
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

8.

Commitments and Contingencies

Legal and Administrative Proceedings

The Company is engaged in certain legal and administrative proceedings incidental to its normal business activities, including matters relating to environmental protection. The Company considers various factors in assessing the probable outcome of each matter, including but not limited to the nature of existing legal proceedings and claims, the asserted or possible damages, the jurisdiction and venue of the case and whether it is a jury trial, the progress of the case, existing law and precedent, the opinions or views of legal counsel and other advisers, the Company’s experience in similar cases and the experience of other companies, the facts available to the Company at the time of assessment, and how the Company intends to respond to the proceeding or claim. The Company’s assessment of these factors may change over time as proceedings or claims progress. The Company believes the probability is remote that the outcome of any currently pending legal or administrative proceeding will result in a material loss to the Company as a whole, based on currently available facts.

Borrowing Arrangements with Affiliate

The Company is a co-borrower with an unconsolidated affiliate for a $12.5 million revolving line of credit agreement with Truist Bank, of which $10.3 million was outstanding as of June 30, 2020 and has a maturity date of March 2022. The affiliate has agreed to reimburse and indemnify the Company for any payments and expenses the Company may incur from this agreement. The Company holds a lien on the affiliate’s membership interest in a joint venture as collateral for payment under the revolving line of credit.

In addition, the Company has a $6.0 million interest-only loan, due December 31, 2022, outstanding from this unconsolidated affiliate as of June 30, 2020 and December 31, 2019.  The interest rate is one-month LIBOR plus a current spread of 1.75%.

Letters of Credit

In the normal course of business, the Company provides certain third parties with standby letter of credit agreements guaranteeing its payment for certain insurance claims, contract performance and permit requirements.  At June 30, 2020, the Company was contingently liable for $31.8 million in letters of credit, of which $2.3 million were issued under the Company’s Revolving Facility.

v3.20.2
Business Segments
6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Business Segments

9.

Business Segments

The Building Materials business contains three reportable business segments: Mid-America Group, Southeast Group and West Group. The Company also has a Magnesia Specialties segment.  The Company’s evaluation of performance and allocation of resources are based primarily on earnings from operations. Consolidated earnings from operations include total revenues less cost of revenues; selling, general and administrative expenses; acquisition-related expenses, net; other operating income and expenses, net; and exclude interest expense; other nonoperating income and expenses, net; and income taxes. Corporate loss from operations primarily includes depreciation on capitalized interest; unallocated expenses for corporate administrative functions; acquisition-related expenses, net; and other nonrecurring income and expenses excluded from the Company’s evaluation of business segment performance and resource allocation. All debt and related interest expense are held at Corporate.

The following table displays selected financial data for the Company’s reportable business segments. Total revenues, as presented on the consolidated statements of earnings and comprehensive earnings, exclude intersegment revenues which represent sales from one segment to another segment, which are eliminated in consolidation. Prior-year segment information has been reclassified to conform to the reporting structure change described in Note 1.

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Total revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

$

392.3

 

 

$

414.5

 

 

$

653.1

 

 

$

662.6

 

Southeast Group

 

 

142.2

 

 

 

137.0

 

 

 

263.4

 

 

 

256.3

 

West Group

 

 

682.5

 

 

 

651.7

 

 

 

1,193.1

 

 

 

1,149.2

 

Total Building Materials Business

 

 

1,217.0

 

 

 

1,203.2

 

 

 

2,109.6

 

 

 

2,068.1

 

Magnesia Specialties

 

 

53.6

 

 

 

76.3

 

 

 

119.3

 

 

 

150.3

 

Total

 

$

1,270.6

 

 

$

1,279.5

 

 

$

2,228.9

 

 

$

2,218.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

$

362.9

 

 

$

381.9

 

 

$

603.9

 

 

$

611.5

 

Southeast Group

 

 

136.8

 

 

 

132.0

 

 

 

253.7

 

 

 

247.4

 

West Group

 

 

640.9

 

 

 

611.8

 

 

 

1,114.1

 

 

 

1,076.0

 

Total Building Materials Business

 

 

1,140.6

 

 

 

1,125.7

 

 

 

1,971.7

 

 

 

1,934.9

 

Magnesia Specialties

 

 

48.9

 

 

 

70.4

 

 

 

108.8

 

 

 

139.5

 

Total

 

$

1,189.5

 

 

$

1,196.1

 

 

$

2,080.5

 

 

$

2,074.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

$

136.2

 

 

$

141.3

 

 

$

157.0

 

 

$

171.9

 

Southeast Group

 

 

33.7

 

 

 

32.7

 

 

 

47.7

 

 

 

53.8

 

West Group

 

 

133.2

 

 

 

110.6

 

 

 

155.9

 

 

 

130.9

 

Total Building Materials Business

 

 

303.1

 

 

 

284.6

 

 

 

360.6

 

 

 

356.6

 

Magnesia Specialties

 

 

13.2

 

 

 

25.2

 

 

 

34.9

 

 

 

47.9

 

Corporate

 

 

(9.9

)

 

 

(23.9

)

 

 

(31.3

)

 

 

(49.4

)

Total

 

$

306.4

 

 

$

285.9

 

 

$

364.2

 

 

$

355.1

 

 

v3.20.2
Revenues and Gross Profit
6 Months Ended
Jun. 30, 2020
Revenues And Gross Profit [Abstract]  
Revenues and Gross Profit

10.

Revenues and Gross Profit

The Building Materials business includes the aggregates, cement, ready mixed concrete and asphalt and paving product lines. All cement, ready mixed concrete and asphalt and paving product lines reside in the West Group. The following table, which is reconciled to consolidated amounts, provides total revenues and gross profit by product line.  

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Total revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

$

754.9

 

 

$

757.8

 

 

$

1,325.2

 

 

$

1,302.7

 

Cement

 

 

109.5

 

 

 

112.3

 

 

 

216.1

 

 

 

211.4

 

Ready mixed concrete

 

 

245.1

 

 

 

241.2

 

 

 

434.8

 

 

 

452.3

 

Asphalt and paving services

 

 

107.0

 

 

 

82.2

 

 

 

125.1

 

 

 

94.6

 

Less: interproduct revenues

 

 

(75.9

)

 

 

(67.8

)

 

 

(129.5

)

 

 

(126.1

)

Products and services

 

 

1,140.6

 

 

 

1,125.7

 

 

 

1,971.7

 

 

 

1,934.9

 

Freight

 

 

76.4

 

 

 

77.5

 

 

 

137.9

 

 

 

133.2

 

Total Building Materials Business

 

 

1,217.0

 

 

 

1,203.2

 

 

 

2,109.6

 

 

 

2,068.1

 

Magnesia Specialties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services

 

 

48.9

 

 

 

70.4

 

 

 

108.8

 

 

 

139.5

 

Freight

 

 

4.7

 

 

 

5.9

 

 

 

10.5

 

 

 

10.8

 

Total Magnesia Specialties

 

 

53.6

 

 

 

76.3

 

 

 

119.3

 

 

 

150.3

 

Total

 

$

1,270.6

 

 

$

1,279.5

 

 

$

2,228.9

 

 

$

2,218.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

$

268.0

 

 

$

251.5

 

 

$

361.3

 

 

$

349.5

 

Cement

 

 

43.4

 

 

 

42.2

 

 

 

70.7

 

 

 

56.0

 

Ready mixed concrete

 

 

26.1

 

 

 

19.0

 

 

 

32.0

 

 

 

33.5

 

Asphalt and paving services

 

 

21.9

 

 

 

15.7

 

 

 

13.8

 

 

 

7.4

 

Products and services

 

 

359.4

 

 

 

328.4

 

 

 

477.8

 

 

 

446.4

 

Freight

 

 

(0.3

)

 

 

0.2

 

 

 

(0.6

)

 

 

0.1

 

Total Building Materials Business

 

 

359.1

 

 

 

328.6

 

 

 

477.2

 

 

 

446.5

 

Magnesia Specialties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services

 

 

18.2

 

 

 

29.2

 

 

 

44.3

 

 

 

55.8

 

Freight

 

 

(1.3

)

 

 

(1.1

)

 

 

(2.2

)

 

 

(2.2

)

Total Magnesia Specialties

 

 

16.9

 

 

 

28.1

 

 

 

42.1

 

 

 

53.6

 

Corporate

 

 

4.5

 

 

 

0.2

 

 

 

3.6

 

 

 

(0.3

)

Total

 

$

380.5

 

 

$

356.9

 

 

$

522.9

 

 

$

499.8

 

v3.20.2
Supplemental Cash Flow Information
6 Months Ended
Jun. 30, 2020
Supplemental Cash Flow Elements [Abstract]  
Supplemental Cash Flow Information

11.

Supplemental Cash Flow Information

Noncash investing and financing activities are as follows:

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Noncash investing and financing activities:

 

 

 

 

 

 

 

 

Accrued liabilities for purchases of property, plant and equipment

 

$

22.0

 

 

$

18.7

 

Acquisition of assets through swap

 

$

 

 

$

1.1

 

Receivable issued in connection with sale of property, plant

   and equipment

 

$

 

 

$

0.3

 

Right-of-use assets obtained in exchange for new

   operating lease liabilities

 

$

18.0

 

 

$

 

Remeasurement of operating leases

 

$

1.1

 

 

$

 

Right-of-use assets obtained in exchange for

   new finance lease liabilities

 

$

1.1

 

 

$

 

 

Supplemental disclosures of cash flow information are as follows:

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Cash paid for interest

 

$

53.0

 

 

$

65.9

 

Cash paid for income taxes

 

$

4.7

 

 

$

8.0

 

During the six months ended June 30, 2020, the Company repaid $7.2 million of loans related to its company-owned life insurance policies.  The repayment is included in the ‘Investments in life insurance contracts, net’ in the investing activities of the consolidated statement of cash flows.

v3.20.2
Other Operating Expenses and (Income), Net
6 Months Ended
Jun. 30, 2020
Other Income And Expenses [Abstract]  
Other Operating Expenses and (Income), Net

12.

Other Operating Expenses and (Income), Net

Other operating expenses and (income), net, for the six months ended June 30, 2020, reflected a $2.5 million increase in credit loss expenses and a $2.8 million increase in asset reclamation costs compared with the prior-year period.  For the six months ended June 30, 2019, other operating (income) and expenses, net, reflected the reversal of $4.2 million of accruals for unclaimed property contingencies.  

v3.20.2
Other Nonoperating (Income) and Expenses, Net
6 Months Ended
Jun. 30, 2020
Other Income And Expenses [Abstract]  
Other Nonoperating (Income) and Expenses, Net

13.

Other Nonoperating (Income) and Expenses, Net

For the six months ended June 30, 2020, nonoperating (income) and expenses, net, included $5.6 million of third-party railroad track maintenance expense. The expense for the six months ended June 30, 2019 included a $15.7 million ($12.0 million net of tax) out-of-period correction of a Company-identified overstatement of the investment balance for a nonconsolidated equity affiliate.

v3.20.2
Subsequent Events
6 Months Ended
Jun. 30, 2020
Subsequent Events [Abstract]  
Subsequent Events

14.Subsequent Events

Effective July 1, 2020, the Company made organizational changes, including consolidating its operational management and operating divisions, in connection with the retirement of two senior executives as of the end of the second quarter. Notably, the Mid-Atlantic Division and Southeast Division have been combined into the newly formed East Division. Additionally, the Southwest Aggregates Division and the Cement and Southwest Ready Mix Division have been combined into the newly formed Southwest Division. Subsequent to these changes, the Building Materials business consists of four divisions, which also includes the Central and West Divisions. The impact of the organizational changes on the Company’s operating segments, reportable segments and reporting units will be reflected in the Company’s financial statements as of and for the three and nine months ended September 30, 2020. Prior year segment information will be reclassified to conform to the reporting structure change.

In July 2020, the Company entered into an agreement to sell investment land for gross proceeds of $97 million.

v3.20.2
Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Organization

Organization

Martin Marietta Materials, Inc. (the Company or Martin Marietta) is a natural resource-based building materials company. The Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 300 quarries, mines and distribution yards in 27 states, Canada and The Bahamas.  In the southwestern and western United States, 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 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, ready mixed concrete and asphalt and paving product lines are reported collectively as the “Building Materials” business.

Effective January 1, 2020, the Company moved the management of its one quarry in the state of Washington from the Mid-America Group to the West Group, resulting in an immaterial change to its reportable segments. The Company’s Building Materials business includes three reportable segments: the Mid-America Group, the Southeast Group and the West Group.

 

BUILDING MATERIALS BUSINESS

Reportable Segments

  

Mid-America Group

  

Southeast Group

  

West Group

Operating Locations

  

Indiana, Iowa, northern Kansas, Kentucky, Maryland, Minnesota, Missouri, eastern Nebraska, North Carolina, Ohio, Pennsylvania,
South Carolina, Virginia
and West Virginia

  

Alabama, Florida, Georgia, southwestern South Carolina, Tennessee, Nova Scotia and The Bahamas

  

Arkansas, Colorado, southern Kansas, Louisiana, western Nebraska, Nevada, Oklahoma, Texas, Utah, Wyoming
and Washington

 

 

 

 

 

 

 

 

Product Lines

 

Aggregates

 

Aggregates

 

Aggregates, Cement, Ready Mixed Concrete, Asphalt and Paving

The Company has a Magnesia Specialties business with 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 in the steel and mining industries.

Basis of Presentation

Basis of Presentation

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, 2019. 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 and six months ended June 30, 2020 are not indicative of the results expected for other interim periods or the full year. The consolidated

balance sheet at December 31, 2019 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 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, 2019.

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, including the impact of the coronavirus (COVID-19) pandemic and the related responses, 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.

New Accounting Pronouncement

New Accounting Pronouncement

Credit Losses

Effective January 1, 2020, the Company adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments – Credit Losses (ASU 2016-13), which includes a current expected credit loss (CECL) model that requires an entity to estimate credit losses expected over the life of an exposure or pool of exposures based on historical information, current information and reasonable and supportable forecasts at the time the asset is recognized and is remeasured at each reporting period. ASU 2016-13 primarily relates to the Company’s receivables, but the scope also includes retainage and contract assets related to its paving business. The adoption of ASU 2016-13 did not have a material impact on the Company’s financial position or statement of earnings and comprehensive earnings. The Company amended its allowance for credit losses policy, which follows, for the implementation of ASU 2016-13.

The Company records an allowance for credit losses, which includes a provision for probable losses based on historical write-offs, adjusted for current conditions as deemed necessary, and a specific reserve for accounts deemed at risk. The allowance is the Company’s estimate for receivables as of the balance sheet date that ultimately will not be collected. Any changes in the allowance are reflected in earnings in the period in which the change occurs.  The Company writes-off accounts receivable when it becomes probable, based upon customer facts and circumstances, that such amounts will not be collected.

Consolidated Comprehensive Earnings/Loss and Accumulated Other Comprehensive Loss

Consolidated Comprehensive Earnings/Loss and Accumulated Other Comprehensive Loss

Consolidated comprehensive earnings/loss and accumulated other comprehensive loss consist of consolidated net earnings or loss; 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.

Comprehensive earnings attributable to Martin Marietta is as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Net earnings attributable to Martin Marietta

 

$

217.6

 

 

$

189.5

 

 

$

243.5

 

 

$

232.3

 

Other comprehensive earnings, net of tax

 

 

3.2

 

 

 

3.0

 

 

 

3.6

 

 

 

6.3

 

Comprehensive earnings attributable to Martin

   Marietta

 

$

220.8

 

 

$

192.5

 

 

$

247.1

 

 

$

238.6

 

 

 

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 June 30, 2020

 

Balance at beginning of period

 

$

(142.4

)

 

$

(3.0

)

 

$

(145.4

)

Other comprehensive earnings before reclassifications,

   net of tax

 

 

 

 

 

0.8

 

 

 

0.8

 

Amounts reclassified from accumulated other

   comprehensive loss, net of tax

 

 

2.4

 

 

 

 

 

 

2.4

 

Other comprehensive earnings, net of tax

 

 

2.4

 

 

 

0.8

 

 

 

3.2

 

Balance at end of period

 

$

(140.0

)

 

$

(2.2

)

 

$

(142.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2019

 

Balance at beginning of period

 

$

(138.7

)

 

$

(1.6

)

 

$

(140.3

)

Other comprehensive earnings before reclassifications,

   net of tax

 

 

 

 

 

0.3

 

 

 

0.3

 

Amounts reclassified from accumulated other

   comprehensive loss, net of tax

 

 

2.7

 

 

 

 

 

 

2.7

 

Other comprehensive earnings, net of tax

 

 

2.7

 

 

 

0.3

 

 

 

3.0

 

Balance at end of period

 

$

(136.0

)

 

$

(1.3

)

 

$

(137.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in Millions)

 

 

 

Pension and

Postretirement Benefit Plans

 

 

Foreign Currency

 

 

Accumulated

Other Comprehensive

Loss

 

 

 

Six Months Ended June 30, 2020

 

Balance at beginning of period

 

$

(144.9

)

 

$

(0.9

)

 

$

(145.8

)

Other comprehensive loss before

   reclassifications, net of tax

 

 

 

 

 

(1.3

)

 

 

(1.3

)

Amounts reclassified from accumulated

   other comprehensive loss, net of tax

 

 

4.9

 

 

 

 

 

 

4.9

 

Other comprehensive earnings (loss), net of tax

 

 

4.9

 

 

 

(1.3

)

 

 

3.6

 

Balance at end of period

 

$

(140.0

)

 

$

(2.2

)

 

$

(142.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2019

 

Balance at beginning of period

 

$

(141.5

)

 

$

(2.1

)

 

$

(143.6

)

Other comprehensive earnings before

   reclassifications, net of tax

 

 

 

 

 

0.8

 

 

 

0.8

 

Amounts reclassified from accumulated

   other comprehensive loss, net of tax

 

 

5.5

 

 

 

 

 

 

5.5

 

Other comprehensive earnings, net of tax

 

 

5.5

 

 

 

0.8

 

 

 

6.3

 

Balance at end of period

 

$

(136.0

)

 

$

(1.3

)

 

$

(137.3

)

 

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

 

 

 

Pension and Postretirement Benefit Plans

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Balance at beginning of period

 

$

84.4

 

 

$

83.3

 

 

$

85.2

 

 

$

84.2

 

Tax effect of other comprehensive earnings

 

 

(0.8

)

 

 

(0.9

)

 

 

(1.6

)

 

 

(1.8

)

Balance at end of period

 

$

83.6

 

 

$

82.4

 

 

$

83.6

 

 

$

82.4

 

Reclassifications out of accumulated other comprehensive loss are as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

Affected line items in the consolidated

 

 

June 30,

 

 

June 30,

 

 

statements of earnings and

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

comprehensive earnings

 

 

(Dollars in Millions)

 

 

 

Pension and postretirement

   benefit plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service credit

 

$

 

 

$

(0.2

)

 

$

(0.1

)

 

$

(0.4

)

 

 

Actuarial loss

 

 

3.2

 

 

 

3.8

 

 

 

6.6

 

 

 

7.7

 

 

 

 

 

 

3.2

 

 

 

3.6

 

 

 

6.5

 

 

 

7.3

 

 

Other nonoperating (income) and expenses, net

Tax benefit

 

 

(0.8

)

 

 

(0.9

)

 

 

(1.6

)

 

 

(1.8

)

 

Income tax expense

 

 

$

2.4

 

 

$

2.7

 

 

$

4.9

 

 

$

5.5

 

 

 

Earnings per Common Share

Earnings per Common Share

The numerator for basic and diluted earnings per common share is net earnings attributable to Martin Marietta reduced by dividends and undistributed earnings attributable to certain of the Company’s stock-based compensation. If there is a net loss, no amount of the undistributed loss is attributed to unvested participating securities. 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 are 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 and six months ended June 30, 2020 and 2019, the diluted per-share computations reflect the number of common shares outstanding to include the number of additional shares that would have been outstanding if the potentially dilutive common shares had been issued.

The following table reconciles the numerator and denominator for basic and diluted earnings per common share:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(In Millions)

 

Net earnings attributable to Martin Marietta

 

$

217.6

 

 

$

189.5

 

 

$

243.5

 

 

$

232.3

 

Less: Distributed and undistributed earnings

   attributable to unvested awards

 

 

0.2

 

 

 

0.4

 

 

 

0.2

 

 

 

0.5

 

Basic and diluted net earnings available to common

   shareholders attributable to Martin Marietta

 

$

217.4

 

 

$

189.1

 

 

$

243.3

 

 

$

231.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted-average common shares outstanding

 

 

62.3

 

 

 

62.6

 

 

 

62.3

 

 

 

62.6

 

Effect of dilutive employee and director awards

 

 

 

 

 

0.1

 

 

 

0.1

 

 

 

0.1

 

Diluted weighted-average common shares

   outstanding

 

 

62.3

 

 

 

62.7

 

 

 

62.4

 

 

 

62.7

 

Policy Elections

Policy Elections. When the Company arranges third-party freight to deliver products to customers, the Company has elected the delivery to be a fulfillment activity rather than a separate performance obligation.  Further, the Company acts as a principal in the delivery arrangements and, as required by the accounting standard, the related revenues and costs are presented gross and are included in the consolidated statements of earnings.

v3.20.2
Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2020
Significant Accounting Policies [Line Items]  
Changes in Accumulated Other Comprehensive Loss Net of Tax

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 June 30, 2020

 

Balance at beginning of period

 

$

(142.4

)

 

$

(3.0

)

 

$

(145.4

)

Other comprehensive earnings before reclassifications,

   net of tax

 

 

 

 

 

0.8

 

 

 

0.8

 

Amounts reclassified from accumulated other

   comprehensive loss, net of tax

 

 

2.4

 

 

 

 

 

 

2.4

 

Other comprehensive earnings, net of tax

 

 

2.4

 

 

 

0.8

 

 

 

3.2

 

Balance at end of period

 

$

(140.0

)

 

$

(2.2

)

 

$

(142.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2019

 

Balance at beginning of period

 

$

(138.7

)

 

$

(1.6

)

 

$

(140.3

)

Other comprehensive earnings before reclassifications,

   net of tax

 

 

 

 

 

0.3

 

 

 

0.3

 

Amounts reclassified from accumulated other

   comprehensive loss, net of tax

 

 

2.7

 

 

 

 

 

 

2.7

 

Other comprehensive earnings, net of tax

 

 

2.7

 

 

 

0.3

 

 

 

3.0

 

Balance at end of period

 

$

(136.0

)

 

$

(1.3

)

 

$

(137.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in Millions)

 

 

 

Pension and

Postretirement Benefit Plans

 

 

Foreign Currency

 

 

Accumulated

Other Comprehensive

Loss

 

 

 

Six Months Ended June 30, 2020

 

Balance at beginning of period

 

$

(144.9

)

 

$

(0.9

)

 

$

(145.8

)

Other comprehensive loss before

   reclassifications, net of tax

 

 

 

 

 

(1.3

)

 

 

(1.3

)

Amounts reclassified from accumulated

   other comprehensive loss, net of tax

 

 

4.9

 

 

 

 

 

 

4.9

 

Other comprehensive earnings (loss), net of tax

 

 

4.9

 

 

 

(1.3

)

 

 

3.6

 

Balance at end of period

 

$

(140.0

)

 

$

(2.2

)

 

$

(142.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2019

 

Balance at beginning of period

 

$

(141.5

)

 

$

(2.1

)

 

$

(143.6

)

Other comprehensive earnings before

   reclassifications, net of tax

 

 

 

 

 

0.8

 

 

 

0.8

 

Amounts reclassified from accumulated

   other comprehensive loss, net of tax

 

 

5.5

 

 

 

 

 

 

5.5

 

Other comprehensive earnings, net of tax

 

 

5.5

 

 

 

0.8

 

 

 

6.3

 

Balance at end of period

 

$

(136.0

)

 

$

(1.3

)

 

$

(137.3

)

 

Noncurrent Deferred Tax Assets Recorded In Accumulated Other Comprehensive Loss

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

 

 

 

Pension and Postretirement Benefit Plans

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Balance at beginning of period

 

$

84.4

 

 

$

83.3

 

 

$

85.2

 

 

$

84.2

 

Tax effect of other comprehensive earnings

 

 

(0.8

)

 

 

(0.9

)

 

 

(1.6

)

 

 

(1.8

)

Balance at end of period

 

$

83.6

 

 

$

82.4

 

 

$

83.6

 

 

$

82.4

 

Reclassification Out of Accumulated Other Comprehensive Loss

Reclassifications out of accumulated other comprehensive loss are as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

Affected line items in the consolidated

 

 

June 30,

 

 

June 30,

 

 

statements of earnings and

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

comprehensive earnings

 

 

(Dollars in Millions)

 

 

 

Pension and postretirement

   benefit plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service credit

 

$

 

 

$

(0.2

)

 

$

(0.1

)

 

$

(0.4

)

 

 

Actuarial loss

 

 

3.2

 

 

 

3.8

 

 

 

6.6

 

 

 

7.7

 

 

 

 

 

 

3.2

 

 

 

3.6

 

 

 

6.5

 

 

 

7.3

 

 

Other nonoperating (income) and expenses, net

Tax benefit

 

 

(0.8

)

 

 

(0.9

)

 

 

(1.6

)

 

 

(1.8

)

 

Income tax expense

 

 

$

2.4

 

 

$

2.7

 

 

$

4.9

 

 

$

5.5

 

 

 

Basic and Diluted Earnings Per Common Share

The following table reconciles the numerator and denominator for basic and diluted earnings per common share:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(In Millions)

 

Net earnings attributable to Martin Marietta

 

$

217.6

 

 

$

189.5

 

 

$

243.5

 

 

$

232.3

 

Less: Distributed and undistributed earnings

   attributable to unvested awards

 

 

0.2

 

 

 

0.4

 

 

 

0.2

 

 

 

0.5

 

Basic and diluted net earnings available to common

   shareholders attributable to Martin Marietta

 

$

217.4

 

 

$

189.1

 

 

$

243.3

 

 

$

231.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted-average common shares outstanding

 

 

62.3

 

 

 

62.6

 

 

 

62.3

 

 

 

62.6

 

Effect of dilutive employee and director awards

 

 

 

 

 

0.1

 

 

 

0.1

 

 

 

0.1

 

Diluted weighted-average common shares

   outstanding

 

 

62.3

 

 

 

62.7

 

 

 

62.4

 

 

 

62.7

 

Parent  
Significant Accounting Policies [Line Items]  
Comprehensive Earnings

Comprehensive earnings attributable to Martin Marietta is as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Net earnings attributable to Martin Marietta

 

$

217.6

 

 

$

189.5

 

 

$

243.5

 

 

$

232.3

 

Other comprehensive earnings, net of tax

 

 

3.2

 

 

 

3.0

 

 

 

3.6

 

 

 

6.3

 

Comprehensive earnings attributable to Martin

   Marietta

 

$

220.8

 

 

$

192.5

 

 

$

247.1

 

 

$

238.6

 

 

v3.20.2
Revenue Recognition (Tables)
6 Months Ended
Jun. 30, 2020
Revenue From Contract With Customer [Abstract]  
Schedule of Company's Total Revenues by Category for each Reportable Segment The following table presents the Company’s total revenues by category for each reportable segment. Prior-year segment information has been reclassified to conform to the reporting structure change described in Note 1.

 

 

Three Months Ended

 

 

 

June 30, 2020

 

 

 

Products and Services

 

 

Freight

 

 

Total

 

 

 

(Dollars in Millions)

 

Mid-America Group

 

$

362.9

 

 

$

29.4

 

 

$

392.3

 

Southeast Group

 

 

136.8

 

 

 

5.4

 

 

 

142.2

 

West Group

 

 

640.9

 

 

 

41.6

 

 

 

682.5

 

Total Building Materials Business

 

 

1,140.6

 

 

 

76.4

 

 

 

1,217.0

 

Magnesia Specialties

 

 

48.9

 

 

 

4.7

 

 

 

53.6

 

Total

 

$

1,189.5

 

 

$

81.1

 

 

$

1,270.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

June 30, 2019

 

 

 

Products and Services

 

 

Freight

 

 

Total

 

 

 

(Dollars in Millions)

 

Mid-America Group

 

$

381.9

 

 

$

32.6

 

 

$

414.5

 

Southeast Group

 

 

132.0

 

 

 

5.0

 

 

 

137.0

 

West Group

 

 

611.8

 

 

 

39.9

 

 

 

651.7

 

Total Building Materials Business

 

 

1,125.7

 

 

 

77.5

 

 

 

1,203.2

 

Magnesia Specialties

 

 

70.4

 

 

 

5.9

 

 

 

76.3

 

Total

 

$

1,196.1

 

 

$

83.4

 

 

$

1,279.5

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2020

 

 

 

Products and Services

 

 

Freight

 

 

Total

 

 

 

(Dollars in Millions)

 

Mid-America Group

 

$

603.9

 

 

$

49.2

 

 

$

653.1

 

Southeast Group

 

 

253.7

 

 

 

9.7

 

 

 

263.4

 

West Group

 

 

1,114.1

 

 

 

79.0

 

 

 

1,193.1

 

Total Building Materials Business

 

 

1,971.7

 

 

 

137.9

 

 

 

2,109.6

 

Magnesia Specialties

 

 

108.8

 

 

 

10.5

 

 

 

119.3

 

Total

 

$

2,080.5

 

 

$

148.4

 

 

$

2,228.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2019

 

 

 

Products and Services

 

 

Freight

 

 

Total

 

 

 

(Dollars in Millions)

 

Mid-America Group

 

$

611.5

 

 

$

51.1

 

 

$

662.6

 

Southeast Group

 

 

247.4

 

 

 

8.9

 

 

 

256.3

 

West Group

 

 

1,076.0

 

 

 

73.2

 

 

 

1,149.2

 

Total Building Materials Business

 

 

1,934.9

 

 

 

133.2

 

 

 

2,068.1

 

Magnesia Specialties

 

 

139.5

 

 

 

10.8

 

 

 

150.3

 

Total

 

$

2,074.4

 

 

$

144.0

 

 

$

2,218.4

 

 

Summary of Information About the Company's Contract Balances The following table presents information about the Company’s contract balances:

(Dollars in Millions)

 

June 30, 2020

 

 

December 31, 2019

 

Costs in excess of billings

 

$

7.2

 

 

$

2.8

 

Billings in excess of costs

 

$

9.9

 

 

$

7.8

 

 

v3.20.2
Inventories, Net (Tables)
6 Months Ended
Jun. 30, 2020
Inventory Disclosure [Abstract]  
Schedule of Inventories Net

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Finished products

 

$

671.5

 

 

$

643.6

 

Products in process

 

 

37.8

 

 

 

41.9

 

Raw materials

 

 

36.7

 

 

 

32.4

 

Supplies and expendable parts

 

 

144.9

 

 

 

141.5

 

 

 

 

890.9

 

 

 

859.4

 

Less: Allowances

 

 

(178.0

)

 

 

(168.6

)

Total

 

$

712.9

 

 

$

690.8

 

v3.20.2
Long-Term Debt (Tables)
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Long-Term Debt

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

4.250% Senior Notes, due 2024

 

$

397.3

 

 

$

397.0

 

7% Debentures, due 2025

 

 

124.4

 

 

 

124.4

 

3.450% Senior Notes, due 2027

 

 

297.4

 

 

 

297.3

 

3.500% Senior Notes, due 2027

 

 

495.6

 

 

 

495.3

 

2.500% Senior Notes, due 2030

 

 

489.6

 

 

 

 

6.25% Senior Notes, due 2037

 

 

228.2

 

 

 

228.1

 

4.250% Senior Notes, due 2047

 

 

591.8

 

 

 

591.7

 

Floating Rate Senior Notes, due 2020, interest rate of 2.55%

   at December 31, 2019

 

 

 

 

 

299.7

 

Trade Receivable Facility, interest rate of 0.89% and 2.42% at

   June 30, 2020 and December 31, 2019, respectively

 

 

130.0

 

 

 

340.0

 

Other notes

 

 

0.2

 

 

 

0.1

 

Total debt

 

 

2,754.5

 

 

 

2,773.6

 

Less: Current maturities of long-term debt and short-term

   facilities

 

 

(130.0

)

 

 

(340.0

)

Long-term debt

 

$

2,624.5

 

 

$

2,433.6

 

v3.20.2
Pension and Postretirement Benefits (Tables)
6 Months Ended
Jun. 30, 2020
Compensation And Retirement Disclosure [Abstract]  
Schedule of Components of Net Periodic Benefit Cost (Credit)

The estimated components of the recorded net periodic benefit cost (credit) for pension and postretirement benefits are as follows:

 

 

Pension

 

 

Postretirement Benefits

 

 

 

Three Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Service cost

 

$

10.4

 

 

$

7.6

 

 

$

 

 

$

 

Interest cost

 

 

9.8

 

 

 

9.3

 

 

 

0.1

 

 

 

0.1

 

Expected return on assets

 

 

(14.8

)

 

 

(11.8

)

 

 

 

 

 

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service cost (credit)

 

 

0.2

 

 

 

 

 

 

(0.2

)

 

 

(0.2

)

Actuarial loss (gain)

 

 

3.2

 

 

 

3.9

 

 

 

 

 

 

(0.1

)

Net periodic benefit cost (credit)

 

$

8.8

 

 

$

9.0

 

 

$

(0.1

)

 

$

(0.2

)

 

 

 

Pension

 

 

Postretirement Benefits

 

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Service cost

 

$

19.6

 

 

$

15.4

 

 

$

 

 

$

 

Interest cost

 

 

18.5

 

 

 

18.9

 

 

 

0.2

 

 

 

0.3

 

Expected return on assets

 

 

(28.6

)

 

 

(23.9

)

 

 

 

 

 

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service cost (credit)

 

 

0.3

 

 

 

 

 

 

(0.4

)

 

 

(0.4

)

Actuarial loss (gain)

 

 

6.7

 

 

 

7.9

 

 

 

(0.1

)

 

 

(0.2

)

Net periodic benefit cost (credit)

 

$

16.5

 

 

$

18.3

 

 

$

(0.3

)

 

$

(0.3

)

 

v3.20.2
Business Segments (Tables)
6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Financial Data for Continuing Operation for Company's Reportable Business Segments

The following table displays selected financial data for the Company’s reportable business segments. Total revenues, as presented on the consolidated statements of earnings and comprehensive earnings, exclude intersegment revenues which represent sales from one segment to another segment, which are eliminated in consolidation. Prior-year segment information has been reclassified to conform to the reporting structure change described in Note 1.

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Total revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

$

392.3

 

 

$

414.5

 

 

$

653.1

 

 

$

662.6

 

Southeast Group

 

 

142.2

 

 

 

137.0

 

 

 

263.4

 

 

 

256.3

 

West Group

 

 

682.5

 

 

 

651.7

 

 

 

1,193.1

 

 

 

1,149.2

 

Total Building Materials Business

 

 

1,217.0

 

 

 

1,203.2

 

 

 

2,109.6

 

 

 

2,068.1

 

Magnesia Specialties

 

 

53.6

 

 

 

76.3

 

 

 

119.3

 

 

 

150.3

 

Total

 

$

1,270.6

 

 

$

1,279.5

 

 

$

2,228.9

 

 

$

2,218.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

$

362.9

 

 

$

381.9

 

 

$

603.9

 

 

$

611.5

 

Southeast Group

 

 

136.8

 

 

 

132.0

 

 

 

253.7

 

 

 

247.4

 

West Group

 

 

640.9

 

 

 

611.8

 

 

 

1,114.1

 

 

 

1,076.0

 

Total Building Materials Business

 

 

1,140.6

 

 

 

1,125.7

 

 

 

1,971.7

 

 

 

1,934.9

 

Magnesia Specialties

 

 

48.9

 

 

 

70.4

 

 

 

108.8

 

 

 

139.5

 

Total

 

$

1,189.5

 

 

$

1,196.1

 

 

$

2,080.5

 

 

$

2,074.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-America Group

 

$

136.2

 

 

$

141.3

 

 

$

157.0

 

 

$

171.9

 

Southeast Group

 

 

33.7

 

 

 

32.7

 

 

 

47.7

 

 

 

53.8

 

West Group

 

 

133.2

 

 

 

110.6

 

 

 

155.9

 

 

 

130.9

 

Total Building Materials Business

 

 

303.1

 

 

 

284.6

 

 

 

360.6

 

 

 

356.6

 

Magnesia Specialties

 

 

13.2

 

 

 

25.2

 

 

 

34.9

 

 

 

47.9

 

Corporate

 

 

(9.9

)

 

 

(23.9

)

 

 

(31.3

)

 

 

(49.4

)

Total

 

$

306.4

 

 

$

285.9

 

 

$

364.2

 

 

$

355.1

 

 

v3.20.2
Revenues and Gross Profit (Tables)
6 Months Ended
Jun. 30, 2020
Revenues And Gross Profit [Abstract]  
Total Revenues and Gross Profit by Product Line The following table, which is reconciled to consolidated amounts, provides total revenues and gross profit by product line.

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Total revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

$

754.9

 

 

$

757.8

 

 

$

1,325.2

 

 

$

1,302.7

 

Cement

 

 

109.5

 

 

 

112.3

 

 

 

216.1

 

 

 

211.4

 

Ready mixed concrete

 

 

245.1

 

 

 

241.2

 

 

 

434.8

 

 

 

452.3

 

Asphalt and paving services

 

 

107.0

 

 

 

82.2

 

 

 

125.1

 

 

 

94.6

 

Less: interproduct revenues

 

 

(75.9

)

 

 

(67.8

)

 

 

(129.5

)

 

 

(126.1

)

Products and services

 

 

1,140.6

 

 

 

1,125.7

 

 

 

1,971.7

 

 

 

1,934.9

 

Freight

 

 

76.4

 

 

 

77.5

 

 

 

137.9

 

 

 

133.2

 

Total Building Materials Business

 

 

1,217.0

 

 

 

1,203.2

 

 

 

2,109.6

 

 

 

2,068.1

 

Magnesia Specialties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services

 

 

48.9

 

 

 

70.4

 

 

 

108.8

 

 

 

139.5

 

Freight

 

 

4.7

 

 

 

5.9

 

 

 

10.5

 

 

 

10.8

 

Total Magnesia Specialties

 

 

53.6

 

 

 

76.3

 

 

 

119.3

 

 

 

150.3

 

Total

 

$

1,270.6

 

 

$

1,279.5

 

 

$

2,228.9

 

 

$

2,218.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregates

 

$

268.0

 

 

$

251.5

 

 

$

361.3

 

 

$

349.5

 

Cement

 

 

43.4

 

 

 

42.2

 

 

 

70.7

 

 

 

56.0

 

Ready mixed concrete

 

 

26.1

 

 

 

19.0

 

 

 

32.0

 

 

 

33.5

 

Asphalt and paving services

 

 

21.9

 

 

 

15.7

 

 

 

13.8

 

 

 

7.4

 

Products and services

 

 

359.4

 

 

 

328.4

 

 

 

477.8

 

 

 

446.4

 

Freight

 

 

(0.3

)

 

 

0.2

 

 

 

(0.6

)

 

 

0.1

 

Total Building Materials Business

 

 

359.1

 

 

 

328.6

 

 

 

477.2

 

 

 

446.5

 

Magnesia Specialties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products and services

 

 

18.2

 

 

 

29.2

 

 

 

44.3

 

 

 

55.8

 

Freight

 

 

(1.3

)

 

 

(1.1

)

 

 

(2.2

)

 

 

(2.2

)

Total Magnesia Specialties

 

 

16.9

 

 

 

28.1

 

 

 

42.1

 

 

 

53.6

 

Corporate

 

 

4.5

 

 

 

0.2

 

 

 

3.6

 

 

 

(0.3

)

Total

 

$

380.5

 

 

$

356.9

 

 

$

522.9

 

 

$

499.8

 

v3.20.2
Supplemental Cash Flow Information (Tables)
6 Months Ended
Jun. 30, 2020
Supplemental Cash Flow Elements [Abstract]  
Schedule Of Other Significant Noncash Transactions

Noncash investing and financing activities are as follows:

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Noncash investing and financing activities:

 

 

 

 

 

 

 

 

Accrued liabilities for purchases of property, plant and equipment

 

$

22.0

 

 

$

18.7

 

Acquisition of assets through swap

 

$

 

 

$

1.1

 

Receivable issued in connection with sale of property, plant

   and equipment

 

$

 

 

$

0.3

 

Right-of-use assets obtained in exchange for new

   operating lease liabilities

 

$

18.0

 

 

$

 

Remeasurement of operating leases

 

$

1.1

 

 

$

 

Right-of-use assets obtained in exchange for

   new finance lease liabilities

 

$

1.1

 

 

$

 

 

Supplemental Disclosures of Cash Flow Information

Supplemental disclosures of cash flow information are as follows:

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Cash paid for interest

 

$

53.0

 

 

$

65.9

 

Cash paid for income taxes

 

$

4.7

 

 

$

8.0

 

v3.20.2
Significant Accounting Policies - Additional Information (Detail)
6 Months Ended
Jun. 30, 2020
Facility
State
Segment
Accounting Policies [Abstract]  
Number of quarries and yards | Facility 300
Number of states with aggregates business sales by destination | State 27
Reportable business segments | Segment 3
v3.20.2
Significant Accounting Policies - Comprehensive Earnings Attributable to Martin Marietta Materials Incorporated (Detail) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement Of Income And Comprehensive Income [Abstract]        
Net earnings attributable to Martin Marietta $ 217.6 $ 189.5 $ 243.5 $ 232.3
Other comprehensive earnings, net of tax 3.2 3.0 3.6 6.3
Earnings attributable to Martin Marietta Materials, Inc. $ 220.8 $ 192.5 $ 247.1 $ 238.6
v3.20.2
Significant Accounting Policies - Changes in Accumulated Other Comprehensive Loss Net of Tax (Detail) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance $ 5,299.4 $ 4,975.5 $ 5,353.3 $ 4,949.4
Other comprehensive earnings (loss), net of tax 3.2 3.0 3.6 6.3
Ending Balance 5,493.6 5,097.3 5,493.6 5,097.3
Pension and Postretirement Benefit Plans        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (142.4) (138.7) (144.9) (141.5)
Amounts reclassified from accumulated other comprehensive loss, net of tax 2.4 2.7 4.9 5.5
Other comprehensive earnings (loss), net of tax 2.4 2.7 4.9 5.5
Ending Balance (140.0) (136.0) (140.0) (136.0)
Foreign Currency        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (3.0) (1.6) (0.9) (2.1)
Other comprehensive earnings (loss) before reclassifications, net of tax 0.8 0.3 (1.3) 0.8
Other comprehensive earnings (loss), net of tax 0.8 0.3 (1.3) 0.8
Ending Balance (2.2) (1.3) (2.2) (1.3)
Accumulated Other Comprehensive Loss        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (145.4) (140.3) (145.8) (143.6)
Other comprehensive earnings (loss) before reclassifications, net of tax 0.8 0.3 (1.3) 0.8
Amounts reclassified from accumulated other comprehensive loss, net of tax 2.4 2.7 4.9 5.5
Other comprehensive earnings (loss), net of tax 3.2 3.0 3.6 6.3
Ending Balance $ (142.2) $ (137.3) $ (142.2) $ (137.3)
v3.20.2
Significant Accounting Policies - Noncurrent Deferred Tax Assets Recorded in Accumulated Other Comprehensive Loss (Detail) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Equity [Abstract]        
Balance at beginning of period, Pension and Postretirement Benefit Plans $ 84.4 $ 83.3 $ 85.2 $ 84.2
Tax effect of other comprehensive earnings, Pension and Postretirement Benefit Plans (0.8) (0.9) (1.6) (1.8)
Balance at end of period, Pension and Postretirement Benefit Plans $ 83.6 $ 82.4 $ 83.6 $ 82.4
v3.20.2
Significant Accounting Policies - Reclassifications Out of Accumulated Other Comprehensive Loss (Detail) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Additional interest expense $ 31.2 $ 33.3 $ 61.0 $ 66.2
Tax benefit 61.4 49.9 61.6 44.9
Pension and Postretirement Benefit Plans        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Earnings from Continuing Operations 2.4 2.7 4.9 5.5
Reclassification out of Accumulated Other Comprehensive Income | Pension and Postretirement Benefit Plans        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Prior service credit   (0.2) (0.1) (0.4)
Actuarial loss 3.2 3.8 6.6 7.7
Tax benefit (0.8) (0.9) (1.6) (1.8)
Earnings from Continuing Operations 2.4 2.7 4.9 5.5
Reclassification out of Accumulated Other Comprehensive Income | Pension and Postretirement Benefit Plans | Other Nonoperating (Income) and Expense, Net        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Total reclassifications out of accumulated other comprehensive loss before taxes $ 3.2 $ 3.6 $ 6.5 $ 7.3
v3.20.2
Significant Accounting Policies - Basic and Diluted Earnings Per Common Share (Detail) - USD ($)
shares in Millions, $ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Earnings Per Share [Abstract]        
Net earnings attributable to Martin Marietta $ 217.6 $ 189.5 $ 243.5 $ 232.3
Less: Distributed and undistributed earnings attributable to unvested awards 0.2 0.4 0.2 0.5
Basic and diluted net earnings available to common shareholders attributable to Martin Marietta $ 217.4 $ 189.1 $ 243.3 $ 231.8
Basic weighted-average common shares outstanding 62.3 62.6 62.3 62.6
Effect of dilutive employee and director awards   0.1 0.1 0.1
Diluted weighted-average common shares outstanding 62.3 62.7 62.4 62.7
v3.20.2
Revenue Recognition - Additional Information (Detail) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Revenue Recognition [Line Items]          
Performance obligations, description of timing     Performance obligations within paving service agreements are satisfied over time, primarily ranging from one day to 21 months. For product revenues and freight revenues, customer payment terms are generally 30 days from invoice date. Customer payments for the paving operations are based on a contractual billing schedule and are due 30 days from invoice date.    
Product and freight revenues customer payment terms     30 days    
Customer payments terms based on contractual billing     30 days    
Future revenues from unsatisfied performance obligations $ 202.7 $ 177.9 $ 202.7 $ 177.9  
Service revenues 1,270.6 1,279.5 2,228.9 2,218.4  
Revenue recognized from contract liabilities 4.1 4.8 6.6 5.8  
Retainage on contracts 9.5   9.5   $ 10.2
Service          
Revenue Recognition [Line Items]          
Service revenues     $ 108.5 $ 81.0  
Service | COLORADO          
Revenue Recognition [Line Items]          
Service revenues $ 94.0 $ 71.0      
Minimum | Service          
Revenue Recognition [Line Items]          
Performance obligations, period     1 day    
Maximum | Service          
Revenue Recognition [Line Items]          
Performance obligations, period     21 months    
v3.20.2
Revenue Recognition - Additional Information (Detail 1)
Jun. 30, 2020
Jun. 30, 2019
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-07-01    
Revenue Recognition [Line Items]    
Performance obligations, customer satisfaction period   1 month
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-07-01    
Revenue Recognition [Line Items]    
Performance obligations, customer satisfaction period 1 month  
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-07-01    
Revenue Recognition [Line Items]    
Performance obligations, customer satisfaction period   18 months
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-07-01    
Revenue Recognition [Line Items]    
Performance obligations, customer satisfaction period 14 months  
v3.20.2
Revenue Recognition - Schedule of Company's Total Revenues by Category for each Reportable Segment (Detail) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Revenue Recognition [Line Items]        
Total $ 1,270.6 $ 1,279.5 $ 2,228.9 $ 2,218.4
Building Materials Business        
Revenue Recognition [Line Items]        
Total 1,217.0 1,203.2 2,109.6 2,068.1
Products and Services        
Revenue Recognition [Line Items]        
Total 1,189.5 1,196.1 2,080.5 2,074.4
Products and Services | Building Materials Business        
Revenue Recognition [Line Items]        
Total 1,140.6 1,125.7 1,971.7 1,934.9
Freight        
Revenue Recognition [Line Items]        
Total 81.1 83.4 148.4 144.0
Freight | Building Materials Business        
Revenue Recognition [Line Items]        
Total 76.4 77.5 137.9 133.2
Operating Segments | Building Materials Business Mid-America Group        
Revenue Recognition [Line Items]        
Total 392.3 414.5 653.1 662.6
Operating Segments | Building Materials Business Southeast Group        
Revenue Recognition [Line Items]        
Total 142.2 137.0 263.4 256.3
Operating Segments | Building Materials Business West Group        
Revenue Recognition [Line Items]        
Total 682.5 651.7 1,193.1 1,149.2
Operating Segments | Building Materials Business        
Revenue Recognition [Line Items]        
Total 1,217.0 1,203.2 2,109.6 2,068.1
Operating Segments | Magnesia Specialties        
Revenue Recognition [Line Items]        
Total 53.6 76.3 119.3 150.3
Operating Segments | Products and Services | Building Materials Business Mid-America Group        
Revenue Recognition [Line Items]        
Total 362.9 381.9 603.9 611.5
Operating Segments | Products and Services | Building Materials Business Southeast Group        
Revenue Recognition [Line Items]        
Total 136.8 132.0 253.7 247.4
Operating Segments | Products and Services | Building Materials Business West Group        
Revenue Recognition [Line Items]        
Total 640.9 611.8 1,114.1 1,076.0
Operating Segments | Products and Services | Magnesia Specialties        
Revenue Recognition [Line Items]        
Total 48.9 70.4 108.8 139.5
Operating Segments | Freight | Building Materials Business Mid-America Group        
Revenue Recognition [Line Items]        
Total 29.4 32.6 49.2 51.1
Operating Segments | Freight | Building Materials Business Southeast Group        
Revenue Recognition [Line Items]        
Total 5.4 5.0 9.7 8.9
Operating Segments | Freight | Building Materials Business West Group        
Revenue Recognition [Line Items]        
Total 41.6 39.9 79.0 73.2
Operating Segments | Freight | Building Materials Business        
Revenue Recognition [Line Items]        
Total 76.4 77.5 137.9 133.2
Operating Segments | Freight | Magnesia Specialties        
Revenue Recognition [Line Items]        
Total $ 4.7 $ 5.9 $ 10.5 $ 10.8
v3.20.2
Revenue Recognition - Summary of Information About the Company's Contract Balances (Detail) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Revenue From Contract With Customer [Abstract]    
Costs in excess of billings $ 7.2 $ 2.8
Billings in excess of costs $ 9.9 $ 7.8
v3.20.2
Inventories, Net - Schedule of Inventories Net (Detail) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Inventory Disclosure [Abstract]    
Finished products $ 671.5 $ 643.6
Products in process 37.8 41.9
Raw materials 36.7 32.4
Supplies and expendable parts 144.9 141.5
Inventories, Gross 890.9 859.4
Less: Allowances (178.0) (168.6)
Total $ 712.9 $ 690.8
v3.20.2
Long-Term Debt - Long-Term Debt (Detail) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Debt Instrument [Line Items]    
Total debt $ 2,754.5 $ 2,773.6
Less: Current maturities of long-term debt and short-term facilities (130.0) (340.0)
Long-term debt 2,624.5 2,433.6
4.25% Senior Notes, Due 2024    
Debt Instrument [Line Items]    
Total debt 397.3 397.0
7% Debentures, Due 2025    
Debt Instrument [Line Items]    
Total debt 124.4 124.4
3.450% Senior Notes, Due 2027    
Debt Instrument [Line Items]    
Total debt 297.4 297.3
3.500% Senior Notes, Due 2027    
Debt Instrument [Line Items]    
Total debt 495.6 495.3
2.500% Senior Notes, Due 2030    
Debt Instrument [Line Items]    
Total debt 489.6  
6.25% Senior Notes, Due 2037    
Debt Instrument [Line Items]    
Total debt 228.2 228.1
4.250% Senior Notes, Due 2047    
Debt Instrument [Line Items]    
Total debt 591.8 591.7
Floating Rate Senior Notes, Due 2020    
Debt Instrument [Line Items]    
Total debt   299.7
Other Notes    
Debt Instrument [Line Items]    
Total debt 0.2 0.1
Trade Receivable Facility    
Debt Instrument [Line Items]    
Total debt $ 130.0 $ 340.0
v3.20.2
Long-Term Debt - Long-Term Debt (Parenthetical) (Detail)
6 Months Ended
Mar. 05, 2020
Jun. 30, 2020
Dec. 31, 2019
4.25% Senior Notes, Due 2024      
Debt Instrument [Line Items]      
Maturity year   2024  
Interest rate on notes   4.25%  
7% Debentures, Due 2025      
Debt Instrument [Line Items]      
Maturity year   2025  
Interest rate on notes   7.00%  
3.450% Senior Notes, Due 2027      
Debt Instrument [Line Items]      
Maturity year   2027  
Interest rate on notes   3.45%  
3.500% Senior Notes, Due 2027      
Debt Instrument [Line Items]      
Maturity year   2027  
Interest rate on notes   3.50%  
2.500% Senior Notes, Due 2030      
Debt Instrument [Line Items]      
Maturity year 2030 2030  
Interest rate on notes 2.50% 2.50%  
6.25% Senior Notes, Due 2037      
Debt Instrument [Line Items]      
Maturity year   2037  
Interest rate on notes   6.25%  
4.250% Senior Notes, Due 2047      
Debt Instrument [Line Items]      
Maturity year   2047  
Interest rate on notes   4.25%  
Floating Rate Senior Notes, Due 2020      
Debt Instrument [Line Items]      
Maturity year   2020  
Interest rate     2.55%
Trade Receivable Facility      
Debt Instrument [Line Items]      
Credit Facility interest rate   0.89% 2.42%
v3.20.2
Long-Term Debt - Additional Information (Detail) - USD ($)
6 Months Ended
Mar. 05, 2020
Sep. 24, 2019
Jun. 30, 2020
Dec. 31, 2019
Debt Instrument [Line Items]        
Debt instrument redemption price percentage 100.00%      
Maximum consolidated debt reduction for unrestricted cash and cash equivalents for debt covenant calculation     $ 200,000,000  
Outstanding letters of credit     31,800,000  
Minimum        
Debt Instrument [Line Items]        
Reduction of consolidated debt in the debt ratio calculation     $ 50,000,000  
Including Acquisition Bridge Debt | Maximum        
Debt Instrument [Line Items]        
Debt covenant     3.50  
Excluding Acquisition Bridge Debt | Maximum        
Debt Instrument [Line Items]        
Debt covenant     3.75  
Revolving Facility        
Debt Instrument [Line Items]        
Credit facility commitment     $ 700,000,000  
Debt instrument maturity period     Dec. 05, 2024  
Senior unsecured revolving facility, maturity period     5 years  
Revolving facility, borrowings outstanding     $ 0 $ 0
Outstanding letters of credit     $ 2,300,000 $ 2,300,000
US Treasury (UST) Interest Rate        
Debt Instrument [Line Items]        
Basis spread on variable rate 30.00%      
2.500% Senior Notes, Due 2030        
Debt Instrument [Line Items]        
Aggregate principal amount of long term debt $ 500,000,000      
Interest rate on notes 2.50%   2.50%  
Maturity year 2030   2030  
Floating Rate Senior Notes, Due 2020        
Debt Instrument [Line Items]        
Maturity year     2020  
Debt Instrument Payable Upon Maturity $ 300,000,000      
Trade Receivable Facility        
Debt Instrument [Line Items]        
Credit facility commitment     $ 400,000,000  
Debt instrument maturity period   Sep. 23, 2020    
Trade Receivable Facility | London Interbank Offered Rate(LIBOR)        
Debt Instrument [Line Items]        
Basis spread on variable rate     0.725%  
v3.20.2
Financial Instruments - Additional Information (Detail)
$ in Millions
6 Months Ended
Jun. 30, 2020
USD ($)
Customer
Dec. 31, 2019
USD ($)
Debt Instrument [Line Items]    
Long-term debt, carrying values $ 2,754.5 $ 2,773.6
Long-term debt, fair values $ 3,050.0 $ 2,940.0
Customer Concentration Risk | Total Revenues    
Debt Instrument [Line Items]    
Number of customer accounted for 10% or more of consolidated total revenues | Customer 0  
Customer Concentration Risk | Total Revenues | Minimum    
Debt Instrument [Line Items]    
Percentage of concentration risk 10.00%  
v3.20.2
Income Taxes - Additional Information (Detail) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Income Tax Disclosure [Abstract]    
Effective change in income tax rate 20.20% 16.20%
Discrete benefit from change in tax status of subsidiary from partnership to corporation $ 6.9 $ 13.2
v3.20.2
Pension and Postretirement Benefits - Schedule of Components of Net Periodic Benefit Cost (Credit) (Detail) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Pension        
Defined Benefit Plan Disclosure [Line Items]        
Service cost $ 10.4 $ 7.6 $ 19.6 $ 15.4
Interest cost 9.8 9.3 18.5 18.9
Expected return on assets (14.8) (11.8) (28.6) (23.9)
Prior service cost (credit) 0.2   0.3  
Actuarial loss (gain) 3.2 3.9 6.7 7.9
Net periodic benefit cost (credit) 8.8 9.0 16.5 18.3
Postretirement Benefits        
Defined Benefit Plan Disclosure [Line Items]        
Interest cost 0.1 0.1 0.2 0.3
Prior service cost (credit) (0.2) (0.2) (0.4) (0.4)
Actuarial loss (gain)   (0.1) (0.1) (0.2)
Net periodic benefit cost (credit) $ (0.1) $ (0.2) $ (0.3) $ (0.3)
v3.20.2
Commitments and Contingencies - Additional Information (Detail) - USD ($)
6 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Commitments and Contingencies [Line Items]    
Guarantee of affiliate's obligations $ 12,500,000  
Due from affiliate 10,300,000  
Outstanding letters of credit 31,800,000  
Revolving Facility    
Commitments and Contingencies [Line Items]    
Outstanding letters of credit 2,300,000 $ 2,300,000
Interest-only loan    
Commitments and Contingencies [Line Items]    
Due from affiliate $ 6,000,000.0 $ 6,000,000.0
Maturity date Dec. 31, 2022  
Interest-only loan | London Interbank Offered Rate(LIBOR)    
Commitments and Contingencies [Line Items]    
Basis spread on variable rate 1.75%  
Revolving Line Of Credit Expires In August 2015    
Commitments and Contingencies [Line Items]    
Line of credit maturity period 2022-03  
v3.20.2
Business Segments - Additional Information (Detail)
6 Months Ended
Jun. 30, 2020
Segment
Segment Reporting [Abstract]  
Reportable business segments 3
v3.20.2
Business Segments - Financial Data for Continuing Operations for Company's Reportable Business Segments (Detail) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Segment Reporting Information [Line Items]        
Total revenues $ 1,270.6 $ 1,279.5 $ 2,228.9 $ 2,218.4
Earnings (Loss) from operations 306.4 285.9 364.2 355.1
Products and Services        
Segment Reporting Information [Line Items]        
Total revenues 1,189.5 1,196.1 2,080.5 2,074.4
Building Materials Business        
Segment Reporting Information [Line Items]        
Total revenues 1,217.0 1,203.2 2,109.6 2,068.1
Earnings (Loss) from operations 303.1 284.6 360.6 356.6
Building Materials Business | Products and Services        
Segment Reporting Information [Line Items]        
Total revenues 1,140.6 1,125.7 1,971.7 1,934.9
Operating Segments | Building Materials Business Mid-America Group        
Segment Reporting Information [Line Items]        
Total revenues 392.3 414.5 653.1 662.6
Earnings (Loss) from operations 136.2 141.3 157.0 171.9
Operating Segments | Building Materials Business Mid-America Group | Products and Services        
Segment Reporting Information [Line Items]        
Total revenues 362.9 381.9 603.9 611.5
Operating Segments | Building Materials Business Southeast Group        
Segment Reporting Information [Line Items]        
Total revenues 142.2 137.0 263.4 256.3
Earnings (Loss) from operations 33.7 32.7 47.7 53.8
Operating Segments | Building Materials Business Southeast Group | Products and Services        
Segment Reporting Information [Line Items]        
Total revenues 136.8 132.0 253.7 247.4
Operating Segments | Building Materials Business West Group        
Segment Reporting Information [Line Items]        
Total revenues 682.5 651.7 1,193.1 1,149.2
Earnings (Loss) from operations 133.2 110.6 155.9 130.9
Operating Segments | Building Materials Business West Group | Products and Services        
Segment Reporting Information [Line Items]        
Total revenues 640.9 611.8 1,114.1 1,076.0
Operating Segments | Magnesia Specialties        
Segment Reporting Information [Line Items]        
Total revenues 53.6 76.3 119.3 150.3
Earnings (Loss) from operations 13.2 25.2 34.9 47.9
Operating Segments | Magnesia Specialties | Products and Services        
Segment Reporting Information [Line Items]        
Total revenues 48.9 70.4 108.8 139.5
Operating Segments | Building Materials Business        
Segment Reporting Information [Line Items]        
Total revenues 1,217.0 1,203.2 2,109.6 2,068.1
Corporate        
Segment Reporting Information [Line Items]        
Earnings (Loss) from operations $ (9.9) $ (23.9) $ (31.3) $ (49.4)
v3.20.2
Revenues and Gross Profit - Total Revenues and Gross Profit by Product Line (Detail) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Product Information [Line Items]        
Total revenues $ 1,270.6 $ 1,279.5 $ 2,228.9 $ 2,218.4
Gross profit (loss) 380.5 356.9 522.9 499.8
Interproduct Revenues        
Product Information [Line Items]        
Total revenues (75.9) (67.8) (129.5) (126.1)
Corporate        
Product Information [Line Items]        
Gross profit (loss) 4.5 0.2 3.6 (0.3)
Building Materials Business        
Product Information [Line Items]        
Total revenues 1,217.0 1,203.2 2,109.6 2,068.1
Building Materials Business | Operating Segments        
Product Information [Line Items]        
Total revenues 1,217.0 1,203.2 2,109.6 2,068.1
Gross profit (loss) 359.1 328.6 477.2 446.5
Building Materials Business | Operating Segments | Products and Services        
Product Information [Line Items]        
Total revenues 1,140.6 1,125.7 1,971.7 1,934.9
Gross profit (loss) 359.4 328.4 477.8 446.4
Magnesia Specialties | Operating Segments        
Product Information [Line Items]        
Total revenues 53.6 76.3 119.3 150.3
Gross profit (loss) 16.9 28.1 42.1 53.6
Magnesia Specialties | Operating Segments | Products and Services        
Product Information [Line Items]        
Total revenues 48.9 70.4 108.8 139.5
Gross profit (loss) 18.2 29.2 44.3 55.8
Aggregates | Building Materials Business | Operating Segments | Reportable Subsegments | Products and Services        
Product Information [Line Items]        
Total revenues 754.9 757.8 1,325.2 1,302.7
Gross profit (loss) 268.0 251.5 361.3 349.5
Cement | Building Materials Business | Operating Segments | Reportable Subsegments | Products and Services        
Product Information [Line Items]        
Total revenues 109.5 112.3 216.1 211.4
Gross profit (loss) 43.4 42.2 70.7 56.0
Ready Mixed Concrete | Building Materials Business | Operating Segments | Reportable Subsegments | Products and Services        
Product Information [Line Items]        
Total revenues 245.1 241.2 434.8 452.3
Gross profit (loss) 26.1 19.0 32.0 33.5
Asphalt and Paving | Building Materials Business | Operating Segments | Reportable Subsegments | Products and Services        
Product Information [Line Items]        
Total revenues 107.0 82.2 125.1 94.6
Gross profit (loss) 21.9 15.7 13.8 7.4
Freight        
Product Information [Line Items]        
Total revenues 81.1 83.4 148.4 144.0
Freight | Building Materials Business        
Product Information [Line Items]        
Total revenues 76.4 77.5 137.9 133.2
Freight | Building Materials Business | Operating Segments        
Product Information [Line Items]        
Total revenues 76.4 77.5 137.9 133.2
Gross profit (loss) (0.3) 0.2 (0.6) 0.1
Freight | Magnesia Specialties | Operating Segments        
Product Information [Line Items]        
Total revenues 4.7 5.9 10.5 10.8
Gross profit (loss) $ (1.3) $ (1.1) $ (2.2) $ (2.2)
v3.20.2
Supplemental Cash Flow Information - Schedule Of Noncash Investing and Financing Activities (Detail) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Supplemental Cash Flow Elements [Abstract]    
Accrued liabilities for purchases of property, plant and equipment $ 22.0 $ 18.7
Acquisition of assets through swap   1.1
Receivable issued in connection with sale of property, plant and equipment   $ 0.3
Right-of-use assets obtained in exchange for new operating lease liabilities 18.0  
Remeasurement of operating leases 1.1  
Right-of-use assets obtained in exchange for new finance lease liabilities $ 1.1  
v3.20.2
Supplemental Cash Flow Information -Supplemental Disclosures of Cash Flow Information (Detail) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Supplemental Cash Flow Elements [Abstract]    
Cash paid for interest $ 53.0 $ 65.9
Cash paid for income taxes $ 4.7 $ 8.0
v3.20.2
Supplemental Cash Flow Information - Narrative (Detail)
$ in Millions
6 Months Ended
Jun. 30, 2020
USD ($)
Supplemental Cash Flow Elements [Abstract]  
Repayment of loans related to life insurance policies $ 7.2
v3.20.2
Other Operating Expenses and (Income), Net - Additional Information (Detail) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Other Income And Expenses [Abstract]    
Increase in credit loss expenses $ 2.5  
Increase in asset reclamation costs $ 2.8  
Reversal of accruals for unclaimed property contingencies   $ 4.2
v3.20.2
Other Nonoperating (Income) and Expenses, Net - Additional Information (Detail) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Other Income And Expenses [Abstract]    
Nonoperating (income)and expenses, net $ 5.6  
Out of period expense   $ 15.7
Out of period expense net of tax   $ 12.0
v3.20.2
Subsequent Events - Additional Information (Detail)
$ in Millions
1 Months Ended
Jul. 28, 2020
USD ($)
Subsequent Event  
Subsequent Event [Line Items]  
Gross proceeds from investment land $ 97