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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 March 31, 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 April 29, 2020

Common Stock, $0.01 par value

 

62,241,366

 

 

 

 


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2020

 

 

Page

Part I. Financial Information:

 

 

 

 

 

Item 1. Financial Statements

 

 

 

 

 

Consolidated Balance Sheets – March 31, 2020 and December 31, 2019

 

3

 

 

 

Consolidated Statements of Earnings and Comprehensive Earnings – Three Months Ended March 31, 2020 and 2019

 

4

 

 

 

Consolidated Statements of Cash Flows – Three Months Ended March 31, 2020 and 2019

 

5

 

 

 

Consolidated Statement of Total Equity – Three Months Ended March 31, 2020 and 2019

 

6

 

 

 

Notes to Consolidated Financial Statements

 

7

 

 

 

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

 

20

 

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

36

 

 

 

Item 4. Controls and Procedures

 

37

 

 

 

Part II. Other Information:

 

 

 

 

 

Item 1. Legal Proceedings

 

38

 

 

 

Item 1A. Risk Factors

 

38

 

 

 

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

 

39

 

 

 

Item 4. Mine Safety Disclosures

 

39

 

 

 

Item 6. Exhibits

 

40

 

 

 

Signatures

 

41

 

 

 

 

 

 

Page 2 of 41


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED BALANCE SHEETS

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions, Except Par Value Data)

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

424.0

 

 

$

21.0

 

Accounts receivable, net

 

 

562.8

 

 

 

573.7

 

Inventories, net

 

 

700.5

 

 

 

690.8

 

Other current assets

 

 

145.7

 

 

 

141.2

 

Total Current Assets

 

 

1,833.0

 

 

 

1,426.7

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

8,691.1

 

 

 

8,633.5

 

Allowances for depreciation, depletion and amortization

 

 

(3,505.7

)

 

 

(3,427.5

)

Net property, plant and equipment

 

 

5,185.4

 

 

 

5,206.0

 

Goodwill

 

 

2,397.1

 

 

 

2,396.8

 

Other intangibles, net

 

 

483.3

 

 

 

486.8

 

Operating lease right-of-use assets, net

 

 

477.9

 

 

 

481.9

 

Other noncurrent assets

 

 

126.7

 

 

 

133.4

 

Total Assets

 

$

10,503.4

 

 

$

10,131.6

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

202.0

 

 

$

229.6

 

Accrued salaries, benefits and payroll taxes

 

 

31.6

 

 

 

56.7

 

Accrued insurance and other taxes

 

 

47.2

 

 

 

63.1

 

Current maturities of long-term debt and short-term

   facilities

 

 

639.9

 

 

 

340.0

 

Operating lease liabilities

 

 

52.9

 

 

 

52.7

 

Other current liabilities

 

 

102.0

 

 

 

96.4

 

Total Current Liabilities

 

 

1,075.6

 

 

 

838.5

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

2,623.9

 

 

 

2,433.6

 

Deferred income taxes, net

 

 

737.0

 

 

 

733.0

 

Noncurrent operating lease liabilities

 

 

429.2

 

 

 

433.9

 

Other noncurrent liabilities

 

 

338.3

 

 

 

339.3

 

Total Liabilities

 

 

5,204.0

 

 

 

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

 

 

3,423.1

 

 

 

3,418.8

 

Accumulated other comprehensive loss

 

 

(145.4

)

 

 

(145.8

)

Retained earnings

 

 

2,018.6

 

 

 

2,077.2

 

Total Shareholders' Equity

 

 

5,296.9

 

 

 

5,350.8

 

Noncontrolling interests

 

 

2.5

 

 

 

2.5

 

Total Equity

 

 

5,299.4

 

 

 

5,353.3

 

Total Liabilities and Equity

 

$

10,503.4

 

 

$

10,131.6

 

 

See accompanying notes to the consolidated financial statements.

 

Page 3 of 41


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

 

 

(In Millions, Except Per Share Data)

 

Products and services revenues

 

$

891.0

 

 

$

878.3

 

Freight revenues

 

 

67.2

 

 

 

60.7

 

Total Revenues

 

 

958.2

 

 

 

939.0

 

 

 

 

 

 

 

 

 

 

Cost of revenues - products and services

 

 

747.4

 

 

 

734.2

 

Cost of revenues - freight

 

 

68.4

 

 

 

61.9

 

Total Cost of Revenues

 

 

815.8

 

 

 

796.1

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

142.4

 

 

 

142.9

 

 

 

 

 

 

 

 

 

 

Selling, general & administrative expenses

 

 

78.7

 

 

 

78.3

 

Acquisition-related expenses

 

 

0.3

 

 

 

0.1

 

Other operating expenses and (income), net

 

 

5.6

 

 

 

(4.7

)

Earnings from Operations

 

 

57.8

 

 

 

69.2

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

29.8

 

 

 

32.9

 

Other nonoperating expenses and (income), net

 

 

2.0

 

 

 

(1.6

)

Earnings before income tax expense (benefit)

 

 

26.0

 

 

 

37.9

 

Income tax expense (benefit)

 

 

0.1

 

 

 

(5.0

)

Consolidated net earnings

 

 

25.9

 

 

 

42.9

 

Less: Net earnings attributable to noncontrolling

   interests

 

 

 

 

 

 

Net Earnings Attributable to Martin Marietta Materials, Inc.

 

$

25.9

 

 

$

42.9

 

 

 

 

 

 

 

 

 

 

Consolidated Comprehensive Earnings:

 

 

 

 

 

 

 

 

Earnings attributable to Martin Marietta Materials, Inc.

 

$

26.3

 

 

$

46.1

 

Earnings attributable to noncontrolling interests

 

 

 

 

 

 

 

 

$

26.3

 

 

$

46.1

 

Net Earnings Attributable to Martin Marietta Materials, Inc.

 

 

 

 

 

 

 

 

Per Common Share:

 

 

 

 

 

 

 

 

Basic attributable to common shareholders

 

$

0.42

 

 

$

0.68

 

Diluted attributable to common shareholders

 

$

0.41

 

 

$

0.68

 

 

 

 

 

 

 

 

 

 

Weighted-Average Common Shares Outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

62.3

 

 

 

62.6

 

Diluted

 

 

62.5

 

 

 

62.8

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 4 of 41


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

Consolidated net earnings

 

$

25.9

 

 

$

42.9

 

Adjustments to reconcile consolidated net earnings to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

95.0

 

 

 

89.2

 

Stock-based compensation expense

 

 

12.5

 

 

 

13.5

 

Gain on divestitures and sales of assets

 

 

(1.5

)

 

 

(2.4

)

Deferred income taxes

 

 

3.2

 

 

 

4.8

 

Other items, net

 

 

(0.4

)

 

 

0.5

 

Changes in operating assets and liabilities, net of effects of

   acquisitions and divestitures:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

10.2

 

 

 

(26.1

)

Inventories, net

 

 

(9.6

)

 

 

16.4

 

Accounts payable

 

 

4.9

 

 

 

20.4

 

Other assets and liabilities, net

 

 

(33.5

)

 

 

(41.3

)

Net Cash Provided by Operating Activities

 

 

106.7

 

 

 

117.9

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(104.1

)

 

 

(130.1

)

Proceeds from divestitures and sales of assets

 

 

15.9

 

 

 

3.0

 

Investments in life insurance contracts, net

 

 

(7.2

)

 

 

0.2

 

Other investing activities, net

 

 

(0.1

)

 

 

(0.6

)

Net Cash Used for Investing Activities

 

 

(95.5

)

 

 

(127.5

)

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Borrowings of debt

 

 

618.0

 

 

 

125.0

 

Repayments of debt

 

 

(127.0

)

 

 

(85.0

)

Payments on financing leases

 

 

(0.8

)

 

 

(1.0

)

Debt issuance costs

 

 

(1.1

)

 

 

 

Repurchases of common stock

 

 

(50.0

)

 

 

 

Dividends paid

 

 

(34.8

)

 

 

(30.4

)

Proceeds from exercise of stock options

 

 

0.2

 

 

 

0.6

 

Shares withheld for employees' income tax obligations

 

 

(12.7

)

 

 

(7.1

)

Net Cash Provided by Financing Activities

 

 

391.8

 

 

 

2.1

 

Net Increase (Decrease) in Cash and Cash Equivalents

 

 

403.0

 

 

 

(7.5

)

Cash and Cash Equivalents, beginning of period

 

 

21.0

 

 

 

44.9

 

Cash and Cash Equivalents, end of period

 

$

424.0

 

 

$

37.4

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 5 of 41


 

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 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

42.9

 

 

 

42.9

 

 

 

 

 

 

42.9

 

Other comprehensive earnings,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

3.2

 

 

 

 

 

 

3.2

 

 

 

 

 

 

3.2

 

Dividends declared ($0.48 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30.4

)

 

 

(30.4

)

 

 

 

 

 

(30.4

)

Issuances of common stock for stock

   award plans

 

 

0.1

 

 

 

 

 

 

3.9

 

 

 

 

 

 

 

 

 

3.9

 

 

 

 

 

 

3.9

 

Shares withheld for employees'

   income tax obligations

 

 

 

 

 

 

 

 

(7.1

)

 

 

 

 

 

 

 

 

(7.1

)

 

 

 

 

 

(7.1

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

13.5

 

 

 

 

 

 

 

 

 

13.5

 

 

 

 

 

 

13.5

 

Balance at March 31, 2019

 

 

62.6

 

 

$

0.6

 

 

$

3,406.4

 

 

$

(140.4

)

 

$

1,705.8

 

 

$

4,972.4

 

 

$

3.0

 

 

$

4,975.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25.9

 

 

 

25.9

 

 

 

 

 

 

25.9

 

Other comprehensive earnings,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

0.4

 

 

 

 

 

 

0.4

 

 

 

 

 

 

0.4

 

Dividends declared ($0.55 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34.5

)

 

 

(34.5

)

 

 

 

 

 

(34.5

)

Issuances of common stock for stock

   award plans

 

 

 

 

 

 

 

 

4.5

 

 

 

 

 

 

 

 

 

4.5

 

 

 

 

 

 

4.5

 

Shares withheld for employees'

   income tax obligations

 

 

 

 

 

 

 

 

(12.7

)

 

 

 

 

 

 

 

 

(12.7

)

 

 

 

 

 

(12.7

)

Repurchases of common stock

 

 

(0.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(50.0

)

 

 

(50.0

)

 

 

 

 

 

(50.0

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

12.5

 

 

 

 

 

 

 

 

 

12.5

 

 

 

 

 

 

12.5

 

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

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 6 of 41


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 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, namely, ready mixed concrete, asphalt and paving services, 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 months ended March 31, 2020 are not indicative of the results expected for other interim periods or the full year. The consolidated balance

 

Page 7 of 41


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

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 societal response, 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 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

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

 

 

(Dollars in Millions)

 

Net earnings attributable to Martin Marietta Materials, Inc.

 

$

25.9

 

 

$

42.9

 

Other comprehensive earnings, net of tax

 

 

0.4

 

 

 

3.2

 

Comprehensive earnings attributable to Martin Marietta

   Materials, Inc.

 

$

26.3

 

 

$

46.1

 

 

 

Page 8 of 41


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 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 March 31, 2020

 

Balance at beginning of period

 

$

(144.9

)

 

$

(0.9

)

 

$

(145.8

)

Other comprehensive loss before reclassifications,

   net of tax

 

 

 

 

 

(2.1

)

 

 

(2.1

)

Amounts reclassified from accumulated other

   comprehensive loss, net of tax

 

 

2.5

 

 

 

 

 

 

2.5

 

Other comprehensive earnings (loss), net of tax

 

 

2.5

 

 

 

(2.1

)

 

 

0.4

 

Balance at end of period

 

$

(142.4

)

 

$

(3.0

)

 

$

(145.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2019

 

Balance at beginning of period

 

$

(141.5

)

 

$

(2.1

)

 

$

(143.6

)

Other comprehensive earnings before reclassifications,

   net of tax

 

 

 

 

 

0.5

 

 

 

0.5

 

Amounts reclassified from accumulated other

   comprehensive loss, net of tax

 

 

2.7

 

 

 

 

 

 

2.7

 

Other comprehensive earnings, net of tax

 

 

2.7

 

 

 

0.5

 

 

 

3.2

 

Balance at end of period

 

$

(138.8

)

 

$

(1.6

)

 

$

(140.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

(Dollars in Millions)

 

 

 

Pension and

Postretirement

Benefit Plans

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2020

 

Balance at beginning of period

 

$

85.2

 

Tax effect of other comprehensive earnings

 

 

(0.8

)

Balance at end of period

 

$

84.4

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2019

 

Balance at beginning of period

 

$

84.2

 

Tax effect of other comprehensive earnings

 

 

(0.9

)

Balance at end of period

 

$

83.3

 

 

 

 

 

 

Page 9 of 41


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

Reclassifications out of accumulated other comprehensive loss are as follows:

 

 

 

Three Months Ended

 

 

Affected line items in the consolidated

 

 

March 31,

 

 

statements of earnings and

 

 

2020

 

 

2019

 

 

comprehensive earnings

 

 

(Dollars in Millions)

 

Pension and postretirement benefit

   plans

 

 

 

 

 

 

 

 

 

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

Prior service credit

 

$

 

 

$

(0.2

)

 

 

Actuarial loss

 

 

3.3

 

 

 

3.8

 

 

 

 

 

 

3.3

 

 

 

3.6

 

 

Other nonoperating expenses and (income),

   net

Tax benefit

 

 

(0.8

)

 

 

(0.9

)

 

Income tax expense (benefit)

 

 

$

2.5

 

 

$

2.7

 

 

 

Earnings per Common Share

The numerator for basic and diluted earnings per common share is net earnings attributable to Martin Marietta Materials, Inc. 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 months ended March 31, 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

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

 

 

(In Millions)

 

Net earnings attributable to Martin Marietta

   Materials, Inc.

 

$

25.9

 

 

$

42.9

 

Less: Distributed and undistributed earnings

   attributable to unvested awards

 

 

 

 

 

0.1

 

Basic and diluted net earnings available to common

   shareholders attributable to Martin Marietta

   Materials, Inc.

 

$

25.9

 

 

$

42.8

 

 

 

 

 

 

 

 

 

 

Basic weighted-average common shares outstanding

 

 

62.3

 

 

 

62.6

 

Effect of dilutive employee and director awards

 

 

0.2

 

 

 

0.2

 

Diluted weighted-average common shares outstanding

 

 

62.5

 

 

 

62.8

 

 

Page 10 of 41


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2020

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

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 revenue-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 March 31, 2020 and 2019 were $212.7 million and $149.4 million, respectively, where the remaining periods to complete these obligations ranged from one month to 21 months for both periods.  

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

 

 

 

March 31, 2020

 

 

 

Products and Services

 

 

Freight

 

 

Total

 

 

 

(Dollars in Millions)

 

Mid-America Group

 

$

241.0

 

 

$

19.8

 

 

$

260.8

 

Southeast Group

 

 

116.9

 

 

 

4.2

 

 

 

121.1

 

West Group

 

 

473.2

 

 

 

37.4

 

 

 

510.6

 

Total Building Materials Business

 

 

831.1

 

 

 

61.4

 

 

 

892.5

 

Magnesia Specialties

 

 

59.9

 

 

 

5.8

 

 

 

65.7

 

Total

 

$

891.0

 

 

$

67.2

 

 

$

958.2