Martin Marietta Reports Record Fourth-Quarter and Full-Year Results
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Record Fourth-Quarter
Quarterly Earnings per Diluted Share of
Quarterly Heritage Aggregates Business Gross Margin Expands 330 Basis Points;
Quarterly Consolidated Gross Margin Expands 250 Basis Points
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Record Full-Year
Full-Year Consolidated Adjusted EBITDA Growth of 30 Percent;
Full-Year Consolidated Heritage Martin Marietta Business Incremental Gross Margin of 75 Percent
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2016 Outlook Reflects Solid Underlying Demand and Pricing
"The National Oceanic and Atmospheric Administration (NOAA) has tracked
precipitation levels for 121-years, and the fourth quarter was the
wettest, at both the national level and in our key states of
"For the full-year 2015, we achieved record net sales and profitability,
expanded consolidated gross profit margin (excluding freight and
delivery revenues) by 260 basis points, and exceeded both incremental
margin targets for the consolidated heritage businesses and acquisition
synergy targets ahead of the expected timeline. In addition, we invested
strategic capital in our business, completed several bolt-on
acquisitions and returned nearly
"We continue to execute against our strategic objective of securing and
solidifying leading market positions in economically-diverse,
high-growth areas. To that end, in
"Our outlook for 2016 reflects growing underlying demand and strong
pricing across our entire geographic footprint. National employment
growth, a stimulus for construction activity, remained robust throughout
2015, surpassing the pre-recession peak by nearly five million jobs.
These job gains, in addition to substantial contractor backlogs
resulting from historic rainfall in 2015, should fuel growth and further
recovery of the
NOTABLE ITEMS FOR THE FOURTH-QUARTER AND FULL-YEAR ENDED
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Quarter-ended |
Year-ended |
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2015 | 2014 | 2015 | 2014 | |||||
Consolidated net sales |
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% growth | 0.2% | 22.0% | ||||||
Consolidated gross profit |
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% growth | 11.8% | 38.2% | ||||||
Consolidated gross profit margin (excluding freight and delivery revenues) |
23.7% | 21.2% | 22.1% | 19.5% | ||||
margin expansion | 250 bps | 260 bps | ||||||
Aggregates volume (total tons) | 38,001 | 37,350 | 156,422 | 146,050 | ||||
% growth | 1.7% | 7.1% | ||||||
Aggregates price per ton |
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% growth | 8.4% | 8.0% | ||||||
Heritage aggregates business net sales |
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% growth | 8.0% | 8.2% | ||||||
Heritage aggregates business gross profit |
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% growth | 24.1% | 35.6% | ||||||
Heritage aggregates business gross profit margin (excluding freight and delivery revenues) |
25.0% | 21.7% | 23.8% | 19.0% | ||||
margin growth | 330 bps | 480 bps | ||||||
Heritage aggregates volume (external tons) | 33,137 | 32,389 | 135,497 | 132,523 | ||||
% growth | 2.3% | 2.2% | ||||||
Heritage aggregates price per ton |
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% growth | 8.0% | 7.3% | ||||||
Consolidated adjusted earnings from operations 1 |
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% growth | 4.1% | 34.4% | ||||||
Consolidated adjusted EBITDA 1 |
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% growth | 1.2% | 29.8% | ||||||
Earnings per diluted share |
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% growth | 34.0% | 58.3% | ||||||
Adjusted earnings per diluted share 1 |
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% growth | 22.3% | 20.3% | ||||||
1 See page 24 for a reconciliation to as reported consolidated earnings from operations, consolidated EBITDA and earnings per diluted share. |
OPERATING RESULTS (All comparisons are versus the prior-year period, unless noted otherwise)
Aggregates Business
Aggregates Shipments by End-Use |
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Quarter-ended |
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% of total sales | % change | |||
Infrastructure | 42% | 2% | ||
Nonresidential | 32% | -6% | ||
Residential | 18% | 20% | ||
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8% | - | ||
Year-ended |
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% of total sales | % change | |||
Infrastructure | 41% | 5% | ||
Nonresidential | 32% | 3% | ||
Residential | 17% | 20% | ||
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10% | 9% | ||
For the full year, shipments to the infrastructure market increased five
percent in 2015. The growth reflects state-level funding initiatives
positively impacting
The nonresidential market represented 32 percent of fourth-quarter and full-year aggregate product line shipments and increased three percent for full-year 2015. Light nonresidential construction increased approximately 27 percent for the year, following growth in residential demand and driven by construction activity across all geographies, offsetting a reduction in direct energy shipments into the shale fields. For the year, we shipped 3.6 million tons to the shale fields compared with 7.5 million tons in 2014.
The residential end-use market aggregates product line shipments
increased 20 percent for the full-year 2015, reflecting the continued
steady recovery of residential investment.
Heritage aggregates product line shipments increased two percent for
both the fourth-quarter and full-year 2015. Geographically, heritage
aggregates product line shipment gains were led by volume growth in the
Heritage aggregates product line pricing increased in each reportable group in both the fourth-quarter and full-year 2015, led by the West Group's 12 percent improvement for the quarter and 11 percent improvement for the full year.
The heritage ready mixed concrete product line reported robust pricing
and volume improvements in 2015. The Company leveraged a five percent
volume increase and a ten percent price increase to expand gross margin
(excluding freight and delivery revenues) by 220 basis points. The
acquired ready mixed concrete business pricing increased nearly 11
percent, reflective of both underlying demand and the expiration of
certain TXI project commitments included in 2014 results. Ready mixed
concrete shipments increased to 4.6 million cubic yards, but fell below
expectations, principally due to adverse
On a consolidated basis, full-year total production cost per ton shipped for the aggregates product line increased 1.5 percent. The cost per ton reflects lower energy costs offset by higher operating expenses associated with poor weather, most visible in lower productivity per man hour.
Incremental gross margin (excluding freight and delivery revenues) for
the heritage aggregates business exceeded targeted objectives for both
the fourth-quarter and full-year 2015. The incremental gross margin of
82 percent for the full-year 2015 was led by growth in both the
Magnesia Specialties Business
Magnesia Specialties business net sales were negatively affected by a
slowdown in the steel industry and declined
Cement Business
With the sale of the
While 2015 volumes are not comparable due to the
The remaining cement business continues to benefit from significant
pricing improvement throughout
Consolidated Operating Results
SG&A expenses for full-year 2015 were 6.7 percent of net sales, and 7.3 percent in the fourth quarter. The increase of 40 basis points for the full year, and 90 basis points for the fourth quarter, reflects higher pension expense, increased incentive compensation costs (related to performance against strategic, financial and operating objectives) and continued investment in information systems improvements.
Other operating expenses, net, for the full-year was
The Company's effective income tax rate for full-year 2015 was 30
percent, in line with the Company's guidance. Cash taxes for the full
year were
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities for 2015 was
Capital investment for the full-year 2015 was
At
SHARE REPURCHASE PROGRAM
The Company is authorized to execute a share repurchase program under which it may acquire up to 20 million shares of its outstanding common stock. Repurchases are expected to be carried out through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated share purchase transactions, or any combination of such methods. The Company expects to complete the repurchase program over the next several years, though the actual timing of completion will be based on an ongoing assessment of the capital needs of the business, the market price of the Company's common stock and general market conditions. Share repurchases will be executed based on then-current business and market factors; therefore, the actual return of capital in any single quarter may vary. The repurchase program may be modified, suspended or discontinued by the Board at any time without prior notice.
During the quarter, the Company repurchased 1,698,000 shares of its
common stock for
"I am very pleased with our 2015 performance and achievements,
notwithstanding the extraordinary weather challenges that temporarily
suppressed our growth trajectory. The backlog of construction projects,
coupled with meaningful state department of transportation initiatives
and passage of the FAST Act should provide substantial growth
opportunities in 2016 and beyond. We remain committed to our core
pillars - world-class safety, ethical conduct, our people,
sustainability, operational excellence, cost discipline and customer
satisfaction - with the goal of continuing to reward our shareholders
for their investment in Martin Marietta," concluded
FULL-YEAR 2016 OUTLOOK
"Based on current forecasts and indications of market activity, we
remain positive about the outlook of our business in 2016. Aggregates
product line pricing is expected to increase from six to eight percent.
Volume growth is expected to continue with an increase of five to seven
percent. These gains in aggregates, coupled with pricing improvements
across the downstream and cement businesses together with our cost
discipline and strategic growth initiatives, are expected to drive
increased earnings for the year," said
The Company also expects positive trends in its business and markets, notably:
- Nonresidential construction is expected to increase in both the heavy industrial and commercial sectors. The Dodge Momentum Index is near its highest level since 2009 and signals continued growth.
- Energy-related economic activity, including follow-on public and private construction activities in its primary markets, will be mixed with overall strength in downstream activity more than offsetting the decline in shale-related volumes.
- Residential construction is expected to continue to grow, driven by positive employment gains, historically low levels of construction activity over the previous several years, low mortgage rates, significant lot absorption, and higher multi-family rental rates.
- For the public sector, modest growth is expected in 2016 as new monies begin to flow into the system, particularly in the second half of the year. Additionally, state initiatives to finance infrastructure projects, including support from the Transportation Infrastructure Finance and Innovation Act (TIFIA), are expected to grow and continue to play an expanded role in public-sector activity.
Based on these trends and expectations, the Company anticipates the following for full-year 2016:
-
Aggregates end-use markets compared to 2015 levels are as follows:
- Infrastructure market to increase mid-single digits.
- Nonresidential market to increase in the high-single digits.
- Residential market to experience a double-digit increase.
-
ChemRock /Rail market to remain relatively flat to modestly down.
2016 GUIDANCE |
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Low |
High |
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Consolidated Results |
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Consolidated net sales |
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Consolidated gross profit |
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SG&A |
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Interest expense |
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Estimated tax rate (excluding discrete events) | 30.0% | 30.0% | ||
Capital Expenditures |
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EBITDA |
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Aggregates Product Line |
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Volume (total tons) 1 | 164.0M | 167.0M | ||
% growth 1 | 5% | 7% | ||
Volume (external tons) |
154.5M |
157.5M |
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% growth | 5% | 7% | ||
Average selling price per ton |
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% growth | 6% | 8% | ||
Net sales |
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Gross profit |
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Direct production cost per ton shipped |
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Aggregates-related downstream operations |
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Net sales |
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Gross profit |
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Cement |
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Volume (external tons) | 2.8M | 2.9M | ||
% growth 2 | 8% | 11% | ||
Average selling price per ton |
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% growth 2 | 8% | 10% | ||
Net sales |
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Gross profit |
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Magnesia Specialties |
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Net sales |
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Gross profit |
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1 Represents 2016 total aggregate volumes, which includes approximately 9.5 million internal tons. Volume growth ranges are in comparison to total volumes of 156.4 million tons as reported for the full-year 2015, which includes 9.2 million internal tons. |
2 2016 cement volume and price growth ranges are provided
for |
RISKS TO OUTLOOK
The 2016 outlook includes management's assessment of the likelihood of certain risks and uncertainties that will affect performance, including but not limited to: both price and volume, and a recurrence of widespread decline in aggregates volume negatively affecting aggregates price; the termination, capping and/or reduction of the federal and/or state gasoline tax(es) or other revenue related to infrastructure construction; a significant change in the funding patterns for traditional federal, state and/or local infrastructure projects; a reduction in defense spending, and the subsequent impact on construction activity on or near military bases; a decline in nonresidential construction; a further decline in energy-related drilling activity resulting from a sustained period of low global oil prices or changes in oil production patterns in response to this decline and certain regulatory or other economic factors; a slowdown in the residential construction recovery, or some combination thereof; a reduction in economic activity in the Company's Midwest states resulting from reduced funding levels provided by the Agricultural Act of 2014 and a reduction in capital investment by the railroads; an increase in the cost of compliance with governmental laws and regulations; unexpected equipment failures, unscheduled maintenance, industrial accident or other prolonged and/or significant disruption to its cement and/or magnesia specialties production facilities; and the possibility that certain remaining synergies and operating efficiencies in connection with the TXI acquisition will not be fully realized within the expected time-frames or at all. Further, increased highway construction funding pressures resulting from either federal or state issues can affect profitability. If these negatively affect transportation budgets more than in the past, construction spending could be reduced. Cement is subject to cyclical supply and demand and price fluctuations. The Magnesia Specialties business essentially runs at capacity; therefore, any unplanned changes in costs or realignment of customers introduce volatility to the earnings of this segment.
The Company's principal business serves customers in aggregates-related construction markets. This concentration could increase the risk of potential losses on customer receivables; however, payment bonds normally posted on public projects, together with lien rights on private projects, help to mitigate the risk of uncollectible receivables. The level of aggregates demand in the Company's end-use markets, production levels and the management of production costs will affect the operating leverage of the Aggregates business and, therefore, profitability. Production costs in the Aggregates business are also sensitive to energy and raw material prices, both directly and indirectly. Diesel fuel and other consumables change production costs directly through consumption or indirectly by increased energy-related input costs, such as steel, explosives, tires and conveyor belts. Fluctuating diesel fuel pricing also affects transportation costs, primarily through fuel surcharges in the Company's long-haul distribution network. The Cement business is also energy intensive and fluctuations in the price of coal affects costs. The Magnesia Specialties business is sensitive to changes in domestic steel capacity utilization and the absolute price and fluctuations in the cost of natural gas.
Transportation in the Company's long-haul network, particularly the
supply of rail cars and locomotive power and condition of rail
infrastructure to move trains, affects the Company's ability to
efficiently transport aggregate into certain markets, most notably
All of the Company's businesses are also subject to weather-related
risks that can significantly affect production schedules and
profitability. The first and fourth quarters are most adversely affected
by winter weather. Hurricane activity in the
Risks to the outlook also include shipment declines as a result of economic events beyond the Company's control. In addition to the impact on nonresidential and residential construction, the Company is exposed to risk in its estimated outlook from credit markets and the availability of and interest cost related to its debt.
The Company's future performance is also exposed to risks from tax reform at the federal and state levels.
CONFERENCE CALL INFORMATION
The Company will discuss its fourth-quarter and full-year 2015 earnings
results on a conference call and online web simulcast today (
Martin Marietta, an American-based company and a member of the S&P 500
Index, is a leading supplier of aggregates and heavy building materials,
with operations spanning 26 states,
If you are interested in
Investors are cautioned that all statements in this press release that relate to the future involve risks and uncertainties, and are based on assumptions that the Corporation believes in good faith are reasonable but which may be materially different from actual results. Forward-looking statements give the investor the Corporation'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 our forward-looking statements here and in other publications may turn out to be wrong.
Factors that the Corporation currently believes could cause actual
results to differ materially from the forward-looking statements in this
press release include, the performance of
MLM-E
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Unaudited Statements of Earnings | ||||||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
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2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Net sales | $ | 780.8 | $ | 779.5 | $ | 3,268.1 | $ | 2,679.1 | ||||||||||||
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63.8 | 76.8 | 271.5 | 278.9 | ||||||||||||||||
Total revenues | 844.6 | 856.3 | 3,539.6 | 2,958.0 | ||||||||||||||||
Cost of sales | 596.0 | 614.2 | 2,546.3 | 2,156.7 | ||||||||||||||||
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63.8 | 76.8 | 271.5 | 278.9 | ||||||||||||||||
Total cost of revenues | 659.8 | 691.0 | 2,817.8 | 2,435.6 | ||||||||||||||||
Gross profit | 184.8 | 165.3 | 721.8 | 522.4 | ||||||||||||||||
Selling, general and administrative expenses | 57.1 | 50.0 | 218.2 | 169.2 | ||||||||||||||||
Acquisition-related expenses, net | 2.7 | 1.7 | 8.5 | 42.9 | ||||||||||||||||
Other operating (income) and expenses, net | (12.4 | ) | (5.0 | ) | 15.7 | (4.6 | ) | |||||||||||||
Earnings from operations | 137.4 | 118.6 | 479.4 | 314.9 | ||||||||||||||||
Interest expense | 18.9 | 21.1 | 76.3 | 66.1 | ||||||||||||||||
Other nonoperating income, net | (4.0 | ) | (1.7 | ) | (10.7 | ) | (0.4 | ) | ||||||||||||
Earnings from continuing operations before taxes on income | 122.5 | 99.2 | 413.8 | 249.2 | ||||||||||||||||
Income tax expense | 39.3 | 35.3 | 124.9 | 94.9 | ||||||||||||||||
Earnings from continuing operations | 83.2 | 63.9 | 288.9 | 154.3 | ||||||||||||||||
Earnings on discontinued operations, net of related tax expense | ||||||||||||||||||||
of |
- | 0.1 | - | - | ||||||||||||||||
Consolidated net earnings | 83.2 | 64.0 | 288.9 | 154.3 | ||||||||||||||||
Less: Net earnings (loss) attributable to noncontrolling interests | - | - | 0.1 | (1.3 | ) | |||||||||||||||
Net earnings attributable to |
$ | 83.2 | $ | 64.0 | $ | 288.8 | $ | 155.6 | ||||||||||||
Net earnings per common share: | ||||||||||||||||||||
Basic from continuing operations attributable to common shareholders | $ | 1.27 | $ | 0.95 | $ | 4.31 | $ | 2.73 | ||||||||||||
Discontinued operations attributable to common shareholders | - | - | - | - | ||||||||||||||||
$ | 1.27 | $ | 0.95 | $ | 4.31 | $ | 2.73 | |||||||||||||
Diluted from continuing operations attributable to common shareholders | $ | 1.26 | $ | 0.94 | $ | 4.29 | $ | 2.71 | ||||||||||||
Discontinued operations attributable to common shareholders | - | - | - | - | ||||||||||||||||
$ | 1.26 | $ | 0.94 | $ | 4.29 | $ | 2.71 | |||||||||||||
Dividends per common share | $ | 0.40 | $ | 0.40 | $ | 1.60 | $ | 1.60 | ||||||||||||
Average number of common shares outstanding: | ||||||||||||||||||||
Basic | 65.5 | 67.3 | 66.8 | 56.9 | ||||||||||||||||
Diluted | 65.7 | 67.6 | 67.0 | 57.1 | ||||||||||||||||
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Unaudited Financial Highlights | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
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2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Net sales: | ||||||||||||||||||||
Aggregates Business: | ||||||||||||||||||||
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$ | 219.1 | $ | 201.0 | $ | 851.9 | $ | 770.5 | ||||||||||||
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70.8 | 60.8 | 285.3 | 255.0 | ||||||||||||||||
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379.8 | 359.5 | 1,535.8 | 1,207.9 | ||||||||||||||||
Total Aggregates Business | 669.7 | 621.3 | 2,673.0 | 2,233.4 | ||||||||||||||||
Cement | 60.1 | 100.0 | 367.6 | 209.6 | ||||||||||||||||
Magnesia Specialties | 51.0 | 58.2 | 227.5 | 236.1 | ||||||||||||||||
Total | $ | 780.8 | $ | 779.5 | $ | 3,268.1 | $ | 2,679.1 | ||||||||||||
Gross profit (loss): | ||||||||||||||||||||
Aggregates Business: | ||||||||||||||||||||
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$ | 71.9 | $ | 66.9 | $ | 256.6 | $ | 216.9 | ||||||||||||
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10.1 | 5.8 | 34.2 | 10.6 | ||||||||||||||||
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58.7 | 39.0 | 255.0 | 155.7 | ||||||||||||||||
Total Aggregates Business | 140.7 | 111.7 | 545.8 | 383.2 | ||||||||||||||||
Cement | 15.8 | 28.3 | 103.5 | 52.5 | ||||||||||||||||
Magnesia Specialties | 17.9 | 22.4 | 78.7 | 84.6 | ||||||||||||||||
Corporate | 10.4 | 2.9 | (6.2 | ) | 2.1 | |||||||||||||||
Total | $ | 184.8 | $ | 165.3 | $ | 721.8 | $ | 522.4 | ||||||||||||
Selling, general and administrative expenses: | ||||||||||||||||||||
Aggregates Business: | ||||||||||||||||||||
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$ | 13.4 | $ | 13.1 | $ | 52.6 | $ | 52.2 | ||||||||||||
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5.2 | 4.6 | 18.5 | 17.8 | ||||||||||||||||
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18.3 | 14.3 | 66.6 | 50.1 | ||||||||||||||||
Total Aggregates Business | 36.9 | 32.0 | 137.7 | 120.1 | ||||||||||||||||
Cement | 6.5 | 6.5 | 26.6 | 12.7 | ||||||||||||||||
Magnesia Specialties | 2.4 | 2.5 | 9.5 | 9.8 | ||||||||||||||||
Corporate | 11.3 | 9.0 | 44.4 | 26.6 | ||||||||||||||||
Total | $ | 57.1 | $ | 50.0 | $ | 218.2 | $ | 169.2 | ||||||||||||
Earnings (Loss) from operations: | ||||||||||||||||||||
Aggregates Business: | ||||||||||||||||||||
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$ | 58.5 | $ | 55.5 | $ | 206.8 | $ | 172.2 | ||||||||||||
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5.6 | 1.8 | 16.4 | (5.3 | ) | |||||||||||||||
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54.5 | 28.1 | 205.7 | 153.2 | ||||||||||||||||
Total Aggregates Business | 118.6 | 85.4 | 428.9 | 320.1 | ||||||||||||||||
Cement 2 | 10.4 | 22.5 | 47.8 | 40.8 | ||||||||||||||||
Magnesia Specialties | 15.3 | 19.8 | 68.9 | 74.8 | ||||||||||||||||
Corporate | (6.9 | ) | (9.1 | ) | (66.2 | ) | (120.8 | ) | ||||||||||||
Total | $ | 137.4 | $ | 118.6 | $ | 479.4 | $ | 314.9 | ||||||||||||
(1) West results for the year ended |
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(2) Cement results for the year ended |
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Unaudited Financial Highlights | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
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2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Net sales by product line: | ||||||||||||||||||||
Heritage: | ||||||||||||||||||||
Aggregates Business: | ||||||||||||||||||||
Aggregates | $ | 412.7 | $ | 374.6 | $ | 1,642.9 | $ | 1,502.5 | ||||||||||||
Asphalt | 9.6 | 16.3 | 64.9 | 76.3 | ||||||||||||||||
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58.5 | 49.2 | 224.1 | 196.0 | ||||||||||||||||
Road Paving | 41.3 | 43.3 | 158.6 | 156.6 | ||||||||||||||||
Total Aggregates Business | 522.1 | 483.4 | 2,090.5 | 1,931.4 | ||||||||||||||||
Magnesia Specialties Business | 51.0 | 58.2 | 227.5 | 236.1 | ||||||||||||||||
Acquisition: | ||||||||||||||||||||
Aggregates Business: | ||||||||||||||||||||
Aggregates | 37.2 | 30.7 | 150.8 | 67.5 | ||||||||||||||||
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110.4 | 107.2 | 431.7 | 234.5 | ||||||||||||||||
Total Aggregates Business | 147.6 | 137.9 | 582.5 | 302.0 | ||||||||||||||||
Cement Business | 60.1 | 100.0 | 367.6 | 209.6 | ||||||||||||||||
Total | $ | 780.8 | $ | 779.5 | $ | 3,268.1 | $ | 2,679.1 | ||||||||||||
Gross profit (loss) by product line: | ||||||||||||||||||||
Heritage: | ||||||||||||||||||||
Aggregates Business: | ||||||||||||||||||||
Aggregates | $ | 111.2 | $ | 91.8 | $ | 427.0 | $ | 321.0 | ||||||||||||
Asphalt | 4.5 | 2.8 | 18.2 | 13.6 | ||||||||||||||||
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8.7 | 6.7 | 34.3 | 25.6 | ||||||||||||||||
Road Paving | 6.0 | 3.8 | 17.6 | 6.4 | ||||||||||||||||
Total Aggregates Business | 130.4 | 105.1 | 497.1 | 366.6 | ||||||||||||||||
Magnesia Specialties Business | 17.9 | 22.4 | 78.7 | 84.6 | ||||||||||||||||
Corporate | 7.1 | 3.7 | (7.7 | ) | 3.4 | |||||||||||||||
Acquisition: | ||||||||||||||||||||
Aggregates Business: | ||||||||||||||||||||
Aggregates | 11.0 | 2.8 | 40.0 | 3.1 | ||||||||||||||||
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(0.7 | ) | 3.8 | 8.7 | 13.5 | |||||||||||||||
Total Aggregates Business | 10.3 | 6.6 | 48.7 | 16.6 | ||||||||||||||||
Cement Business | 15.8 | 28.3 | 103.5 | 52.5 | ||||||||||||||||
Corporate | 3.3 | (0.8 | ) | 1.5 | (1.3 | ) | ||||||||||||||
Total | $ | 184.8 | $ | 165.3 | $ | 721.8 | $ | 522.4 | ||||||||||||
Depreciation | $ | 55.9 | $ | 59.5 | $ | 232.5 | $ | 200.2 | ||||||||||||
Depletion | 3.8 | 4.7 | 14.4 | 11.0 | ||||||||||||||||
Amortization | 4.0 | 4.5 | 16.7 | 11.5 | ||||||||||||||||
$ | 63.7 | $ | 68.7 | $ | 263.6 | $ | 222.7 | |||||||||||||
|
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Unaudited Financial Highlights | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
|
|||||||||||||||||||
Heritage Martin |
Acquired |
Nonrecurring |
Consolidated | ||||||||||||||||
2015 | 2015 | 2015 | 2015 | ||||||||||||||||
Net sales | $ | 573.1 | $ | 207.7 | $ | - | $ | 780.8 | |||||||||||
|
53.8 | 10.0 | - | 63.8 | |||||||||||||||
Total revenues | 626.9 | 217.7 | - | 844.6 | |||||||||||||||
Cost of sales | 417.7 | 178.3 | - | 596.0 | |||||||||||||||
|
53.8 | 10.0 | - | 63.8 | |||||||||||||||
Total cost of revenues | 471.5 | 188.3 | - | 659.8 | |||||||||||||||
Gross profit | 155.4 | 29.4 | - | 184.8 | |||||||||||||||
Selling, general and administrative expenses(4) | 43.5 | 13.6 | - | 57.1 | |||||||||||||||
Acquisition-related expenses, net | - | - | 2.7 | 2.7 | |||||||||||||||
Other operating expenses and (income), net | 2.8 | (1.3 | ) | (13.9 | ) | (12.4 | ) | ||||||||||||
Earnings from operations | $ | 109.1 | $ | 17.1 | $ | 11.2 | $ | 137.4 | |||||||||||
(1) Heritage Martin Marietta is consolidated 2015 results excluding the operating results of acquired TXI locations and three small acquisitions closed during 2015, acquisition-related expenses, net, and the gain on divestitures of businesses. | |||||||||||||||||||
(2) Acquired operations reflect operating results of acquired TXI locations and three small acquisitions closed in 2015. | |||||||||||||||||||
(3) Nonrecurring transaction items are primarily integration expenses related to the TXI acquisition and the gain on a business divestiture. | |||||||||||||||||||
(4) Selling, general and administrative expenses for acquired
operations include the allocation of |
|||||||||||||||||||
Three Months Ended | |||||||||||||||||||
|
|||||||||||||||||||
Heritage Martin |
Heritage Martin |
Variance(5) - |
|||||||||||||||||
2015 | 2014 | (Unfavorable) | |||||||||||||||||
Net sales | $ | 573.1 | $ | 541.6 | $ | 31.5 | |||||||||||||
|
53.8 | 63.3 | (9.5 | ) | |||||||||||||||
Total revenues | 626.9 | 604.9 | 22.0 | ||||||||||||||||
Cost of sales | 417.7 | 410.4 | (7.3 | ) | |||||||||||||||
|
53.8 | 63.3 | 9.5 | ||||||||||||||||
Total cost of revenues | 471.5 | 473.7 | 2.2 | ||||||||||||||||
Gross profit | 155.4 | 131.2 | 24.2 | ||||||||||||||||
Selling, general and administrative expenses | 43.5 | 38.4 | (5.1 | ) | |||||||||||||||
Other operating expenses and (income), net | 2.8 | (3.9 | ) | (6.7 | ) | ||||||||||||||
Earnings from operations, excluding acquisition-related expenses, net |
$ | 109.1 | $ | 96.7 | $ | 12.4 | |||||||||||||
(5) The variance reflects the change between Heritage Martin Marietta 2015 and Heritage Martin Marietta 2014. | |||||||||||||||||||
|
||||||||||||||||||
Unaudited Financial Highlights | ||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||
Year Ended | ||||||||||||||||||
|
||||||||||||||||||
Heritage Martin |
Acquired |
Nonrecurring |
Consolidated | |||||||||||||||
2015 | 2015 | 2015 | 2015 | |||||||||||||||
Net sales | $ | 2,318.0 | $ | 950.1 | $ | - | $ | 3,268.1 | ||||||||||
|
225.7 | 45.8 | - | 271.5 | ||||||||||||||
Total revenues | 2,543.7 | 995.9 | - | 3,539.6 | ||||||||||||||
Cost of sales | 1,749.9 | 796.4 | - | 2,546.3 | ||||||||||||||
|
225.7 | 45.8 | - | 271.5 | ||||||||||||||
Total cost of revenues | 1,975.6 | 842.2 | - | 2,817.8 | ||||||||||||||
Gross profit | 568.1 | 153.7 | - | 721.8 | ||||||||||||||
Selling, general and administrative expenses(4) | 165.8 | 52.4 | - | 218.2 | ||||||||||||||
Acquisition-related expenses, net | - | 8.5 | 8.5 | |||||||||||||||
Other operating expenses and (income), net | 1.0 | (1.3 | ) | 16.0 | 15.7 | |||||||||||||
Earnings (Loss) from operations | $ | 401.3 | $ | 102.6 | $ | (24.5 | ) | $ | 479.4 | |||||||||
(1) Heritage Martin Marietta is consolidated 2015 results excluding the operating results of acquired TXI locations and three small acquisitions closed during 2015, acquisition-related expenses, net, and gains and losses on divestitures of businesses. | ||||||||||||||||||
(2) Acquired operations reflect operating results of acquired TXI locations and three small acquisitions closed in 2015. | ||||||||||||||||||
(3) Nonrecurring transaction items are primarily integration expenses related to the TXI acquisition and gains and losses on divestitures of businesses. | ||||||||||||||||||
(4) Selling, general and administrative expenses for acquired
operations include the allocation of |
||||||||||||||||||
Year Ended | ||||||||||||||||||
|
||||||||||||||||||
Heritage Martin |
Heritage Martin |
Variance(5) - |
||||||||||||||||
2015 | 2014 | (Unfavorable) | ||||||||||||||||
Net sales | $ | 2,318.0 | $ | 2,167.5 | $ | 150.5 | ||||||||||||
|
225.7 | 250.8 | (25.1 | ) | ||||||||||||||
Total revenues | 2,543.7 | 2,418.3 | 125.4 | |||||||||||||||
Cost of sales | 1,749.9 | 1,712.9 | (37.0 | ) | ||||||||||||||
|
225.7 | 250.8 | 25.1 | |||||||||||||||
Total cost of revenues | 1,975.6 | 1,963.7 | (11.9 | ) | ||||||||||||||
Gross profit | 568.1 | 454.6 | 113.5 | |||||||||||||||
Selling, general and administrative expenses | 165.8 | 141.8 | (24.0 | ) | ||||||||||||||
Other operating expenses and (income), net | 1.0 | (1.1 | ) | (2.1 | ) | |||||||||||||
Earnings from operations, excluding acquisition-related expenses, net | $ | 401.3 | $ | 313.9 | $ | 87.4 | ||||||||||||
(5) The variance reflects the change between Heritage Martin Marietta 2015 and Heritage Martin Marietta 2014. | ||||||||||||||||||
|
||||||||||||
Unaudited Financial Highlights - |
||||||||||||
(Dollars in millions) | ||||||||||||
Three Months Ended | ||||||||||||
|
||||||||||||
Heritage West |
Acquired |
West | ||||||||||
2015(1) |
2015(2) | 2015 | ||||||||||
Net sales | $ | 232.9 | $ | 146.9 | $ | 379.8 | ||||||
|
26.0 | 6.2 | 32.2 | |||||||||
Total revenues | 258.9 | 153.1 | 412.0 | |||||||||
Cost of sales | 184.3 | 136.8 | 321.1 | |||||||||
|
26.0 | 6.2 | 32.2 | |||||||||
Total cost of revenues | 210.3 | 143.0 | 353.3 | |||||||||
Gross profit | $ | 48.6 | $ | 10.1 | $ | 58.7 | ||||||
(1) Heritage West 2015 results reflect the 2015 West results less the operating results of acquired TXI locations and two other small acquisitions. | ||||||||||||
(2) Acquired operations reflect the operating results for all
acquired TXI aggregates and ready mixed concrete operations reported
in the |
||||||||||||
Three Months Ended | ||||||||||||
|
||||||||||||
Heritage West | Heritage West |
Variance(3) - |
||||||||||
2015 | 2014 | (Unfavorable) | ||||||||||
Net sales | $ | 232.9 | $ | 221.5 | $ | 11.4 | ||||||
|
26.0 | 32.4 | (6.4) | |||||||||
Total revenues | 258.9 | 253.9 | 5.0 | |||||||||
Cost of sales | 184.3 | 189.1 | 4.8 | |||||||||
|
26.0 | 32.4 | 6.4 | |||||||||
Total cost of revenues | 210.3 | 221.5 | 11.2 | |||||||||
Gross profit | $ | 48.6 | $ | 32.4 | $ | 16.2 | ||||||
(3) The variance reflects the change between Heritage West 2015 and Heritage West 2014. | ||||||||||||
|
||||||||||||
Unaudited Financial Highlights - |
||||||||||||
(Dollars in millions) | ||||||||||||
Year Ended |
||||||||||||
Heritage West |
Acquired |
West | ||||||||||
2015(1) | 2015(2) | 2015 | ||||||||||
Net sales | $ | 956.0 | $ | 579.8 | $ | 1,535.8 | ||||||
|
114.1 | 25.1 | 139.2 | |||||||||
Total revenues | 1,070.1 | 604.9 | 1,675.0 | |||||||||
Cost of sales | 749.3 | 531.5 | 1,280.8 | |||||||||
|
114.1 | 25.1 | 139.2 | |||||||||
Total cost of revenues | 863.4 | 556.6 | 1,420.0 | |||||||||
Gross profit | $ | 206.7 | $ | 48.3 | $ | 255.0 | ||||||
(1) Heritage West 2015 results reflect the 2015 West results less the operating results of acquired TXI locations and two other small acquisitions. | ||||||||||||
(2) Acquired operations reflect the operating results for all
acquired TXI aggregates and ready mixed concrete operations reported
in the |
||||||||||||
Year Ended |
||||||||||||
Heritage West | Heritage West |
Variance(3) - |
||||||||||
2015 | 2014 | (Unfavorable) | ||||||||||
Net sales | $ | 956.0 | $ | 905.9 | $ | 50.1 | ||||||
|
114.1 | 133.1 | (19.0) | |||||||||
Total revenues | 1,070.1 | 1,039.0 | 31.1 | |||||||||
Cost of sales | 749.3 | 766.9 | 17.6 | |||||||||
|
114.1 | 133.1 | 19.0 | |||||||||
Total cost of revenues | 863.4 | 900.0 | 36.6 | |||||||||
Gross profit | $ | 206.7 | $ | 139.0 | $ | 67.7 | ||||||
(3) The variance reflects the change between Heritage West 2015 and Heritage West 2014. | ||||||||||||
|
||||||||
Balance Sheet Data | ||||||||
(In millions) | ||||||||
|
|
|||||||
2015 | 2014 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 168.4 | $ | 108.7 | ||||
Accounts receivable, net | 410.9 | 421.0 | ||||||
Inventories, net | 469.1 | 484.9 | ||||||
Other current assets | 33.7 | 29.6 | ||||||
Property, plant and equipment, net | 3,156.0 | 3,402.8 | ||||||
Intangible assets, net | 2,578.8 | 2,664.0 | ||||||
Other noncurrent assets | 144.8 | 108.8 | ||||||
Total assets |
$ |
6,961.7 |
$ |
7,219.8 |
||||
LIABILITIES AND EQUITY | ||||||||
Current maturities of long-term debt | $ | 19.2 | $ | 14.3 | ||||
Other current liabilities | 348.0 | 382.3 | ||||||
Long-term debt (excluding current maturities) | 1,553.6 | 1,571.1 | ||||||
Other noncurrent liabilities | 980.7 | 899.4 | ||||||
Total equity | 4,060.2 | 4,352.7 | ||||||
Total liabilities and equity | $ | 6,961.7 | $ | 7,219.8 | ||||
|
||||||||||
Unaudited Statements of Cash Flows | ||||||||||
(In millions) | ||||||||||
Year Ended | ||||||||||
|
||||||||||
2015 | 2014 | |||||||||
Operating activities: | ||||||||||
Consolidated net earnings | $ | 288.9 | $ | 154.3 | ||||||
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: | ||||||||||
Depreciation, depletion and amortization | 263.6 | 222.7 | ||||||||
Stock-based compensation expense | 13.6 | 9.0 | ||||||||
Loss (gain) on divestitures and sales of assets | 14.1 | (52.3 | ) | |||||||
Deferred income taxes | 85.2 | 50.3 | ||||||||
Excess tax benefits from stock-based compensation | - | (2.5 | ) | |||||||
Other items, net | (5.9 | ) | 4.9 | |||||||
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | ||||||||||
Accounts receivable, net | 12.3 | (16.7 | ) | |||||||
Inventories, net | (21.5 | ) | (12.0 | ) | ||||||
Accounts payable | (40.1 | ) | 5.3 | |||||||
Other assets and liabilities, net | (37.0 | ) | 18.7 | |||||||
Net cash provided by operating activities | 573.2 | 381.7 | ||||||||
Investing activities: | ||||||||||
Additions to property, plant and equipment | (318.2 | ) | (232.2 | ) | ||||||
Acquisitions, net | (43.2 | ) | (0.2 | ) | ||||||
Cash received in acquisition | - | 59.9 | ||||||||
Proceeds from divestitures and sales of assets | 448.1 | 122.0 | ||||||||
Repayments from affiliate | 1.8 | 1.2 | ||||||||
Payment of railcar construction advances | (25.2 | ) | (14.5 | ) | ||||||
Reimbursement of railcar construction advances | 25.2 | 14.5 | ||||||||
Net cash provided by (used for) investing activities | 88.5 | (49.3 | ) | |||||||
Financing activities: | ||||||||||
Borrowings of long-term debt | 230.0 | 868.8 | ||||||||
Repayments of long-term debt | (244.7 | ) | (1,057.3 | ) | ||||||
Payments on capital leases | (6.6 | ) | (3.1 | ) | ||||||
Debt issue costs | - | (2.8 | ) | |||||||
Change in bank overdraft | 10.0 | (2.3 | ) | |||||||
Repurchase of common stock | (520.0 | ) | - | |||||||
Dividends paid | (107.5 | ) | (91.3 | ) | ||||||
Purchase of remaining interest in existing subsidiaries | - | (19.5 | ) | |||||||
Distributions to owners of noncontrolling interests | (0.3 | ) | (0.8 | ) | ||||||
Excess tax benefits from stock-based compensation | - | 2.5 | ||||||||
Issuances of common stock | 37.1 | 39.7 | ||||||||
Net cash used for financing activities | (602.0 | ) | (266.1 | ) | ||||||
Net increase in cash and cash equivalents | 59.7 | 66.3 | ||||||||
Cash and cash equivalents, beginning of period | 108.7 | 42.4 | ||||||||
Cash and cash equivalents, end of period | $ | 168.4 | $ | 108.7 | ||||||
|
||||||||||||||||||||
Unaudited Operational Highlights | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
|
|
|||||||||||||||||||
Volume | Pricing | Volume | Pricing | |||||||||||||||||
Volume/Pricing Variance (1) | ||||||||||||||||||||
Heritage Aggregates Product Line: (2) | ||||||||||||||||||||
|
3.2 | % | 4.9 | % | 5.2 | % | 4.7 | % | ||||||||||||
|
8.1 | % | 7.8 | % | 6.5 | % | 5.4 | % | ||||||||||||
|
(2.0 | %) | 11.9 | % | (3.0 | %) | 10.8 | % | ||||||||||||
Heritage Aggregates Operations | 1.9 | % | 8.0 | % | 2.1 | % | 7.3 | % | ||||||||||||
Aggregates Product Line (3) | 1.7 | % | 8.4 | % | 7.1 | % | 8.0 | % | ||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
|
|
|||||||||||||||||||
Shipments (tons in thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
Heritage Aggregates Product Line: (2) | ||||||||||||||||||||
|
17,332 | 16,800 | 68,324 | 64,959 | ||||||||||||||||
|
4,710 | 4,358 | 19,479 | 18,289 | ||||||||||||||||
|
12,408 | 12,665 | 53,212 | 54,873 | ||||||||||||||||
Heritage Aggregates Operations | 34,450 | 33,823 | 141,015 | 138,121 | ||||||||||||||||
Acquisitions | 3,551 | 3,527 | 15,407 | 7,929 | ||||||||||||||||
Aggregates Product Line (3) | 38,001 | 37,350 | 156,422 | 146,050 | ||||||||||||||||
(1) Volume/pricing variances reflect the percentage increase (decrease) from the comparable period in the prior year. | ||||||||||||||||||||
(2) Heritage Aggregates Product Line and Heritage Aggregates Operations exclude volume and pricing data for acquisitions that have not been included in prior-year operations for a full calendar year. | ||||||||||||||||||||
(3) Aggregates Product Line includes acquisitions from the date of acquisition and divestitures through the date of disposal. | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
|
|
|||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Heritage: | ||||||||||||||||||||
Aggregates tons - external customers | 33,137 | 32,389 | 135,497 | 132,523 | ||||||||||||||||
Internal aggregates tons used in other product lines | 1,313 | 1,434 | 5,518 | 5,598 | ||||||||||||||||
Total aggregates tons | 34,450 | 33,823 | 141,015 | 138,121 | ||||||||||||||||
Asphalt tons - external customers | 178 | 326 | 1,220 | 1,508 | ||||||||||||||||
Internal asphalt tons used in road paving business | 401 | 460 | 1,697 | 1,807 | ||||||||||||||||
Total asphalt tons | 579 | 786 | 2,917 | 3,315 | ||||||||||||||||
|
545 | 493 | 2,133 | 2,033 | ||||||||||||||||
Acquisitions: | ||||||||||||||||||||
Aggregates tons - external customers | 2,731 | 2,541 | 11,700 | 5,699 | ||||||||||||||||
Internal aggregates tons used in other product lines | 820 | 986 | 3,707 | 2,230 | ||||||||||||||||
Total aggregates tons | 3,551 | 3,527 | 15,407 | 7,929 | ||||||||||||||||
|
1,073 | 1,280 | 4,574 | 2,746 | ||||||||||||||||
Cement tons - external customers | 569 | 1,048 | 3,667 | 2,318 | ||||||||||||||||
Internal cement tons used in other product lines | 233 | 252 | 891 | 506 | ||||||||||||||||
|
802 | 1,300 | 4,558 | 2,824 | ||||||||||||||||
Average unit sales price by product line (including internal sales): | ||||||||||||||||||||
Heritage: | ||||||||||||||||||||
Aggregates (per ton) | $ | 12.21 | $ | 11.30 | $ | 11.88 | $ | 11.07 | ||||||||||||
Asphalt (per ton) | $ | 41.64 | $ | 39.90 | $ | 42.57 | $ | 41.26 | ||||||||||||
|
$ | 103.84 | $ | 96.02 | $ | 102.20 | $ | 93.27 | ||||||||||||
Acquisitions: | ||||||||||||||||||||
Aggregates (per ton) | $ | 14.08 | $ | 12.13 | $ | 13.55 | $ | 11.96 | ||||||||||||
|
$ | 101.96 | $ | 82.74 | $ | 93.52 | $ | 84.53 | ||||||||||||
Cement (per ton) | $ | 102.44 | $ | 93.02 | $ | 98.35 | $ | 89.21 | ||||||||||||
|
||||||||||||||||||||
Non-GAAP Financial Measures and Other Information | ||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
Gross margin as a percentage of net sales and operating margin as a percentage of net sales represent non-GAAP measures. The Company presents these ratios calculated based on net sales, as it is consistent with the basis by which management reviews the Company's operating results. Further, management believes it is consistent with the basis by which investors analyze the Company's operating results, given that freight and delivery revenues and costs represent pass-throughs and have no profit markup. Gross margin and operating margin calculated as percentages of total revenues represent the most directly comparable financial measures calculated in accordance with generally accepted accounting principles ("GAAP"). The following tables present the calculations of gross margin and operating margin for the three months and year ended December 31, 2015 and 2014, in accordance with GAAP and reconciliations of the ratios as percentages of total revenues to percentages of net sales: | ||||||||||||||||||||
Consolidated Gross Margin in Accordance with Generally Accepted Accounting Principles |
Three Months Ended | Year Ended | ||||||||||||||||||
|
December 31, | December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Gross profit | $ | 184.8 | $ | 165.3 | $ | 721.8 | $ | 522.4 | ||||||||||||
Total revenues | $ | 844.6 | $ | 856.3 | $ | 3,539.6 | $ | 2,958.0 | ||||||||||||
Gross margin | 21.9 | % | 19.3 | % | 20.4 | % | 17.7 | % | ||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
Consolidated Gross Margin Excluding Freight and Delivery Revenues | December 31, | December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Gross profit | $ | 184.8 | $ | 165.3 | $ | 721.8 | $ | 522.4 | ||||||||||||
Total revenues | $ | 844.6 | $ | 856.3 | $ | 3,539.6 | $ | 2,958.0 | ||||||||||||
Less: |
(63.8 | ) | (76.8 | ) | (271.5 | ) | (278.9 | ) | ||||||||||||
Net sales | $ | 780.8 | $ | 779.5 | $ | 3,268.1 | $ | 2,679.1 | ||||||||||||
Gross margin excluding freight and delivery revenues | 23.7 | % | 21.2 | % | 22.1 | % | 19.5 | % | ||||||||||||
Consolidated Operating Margin in Accordance with Generally Accepted Accounting Principles |
Three Months Ended | Year Ended | ||||||||||||||||||
|
December 31, | December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Earnings from operations | $ | 137.4 | $ | 118.6 | $ | 479.4 | $ | 314.9 | ||||||||||||
Total revenues | $ | 844.6 | $ | 856.3 | $ | 3,539.6 | $ | 2,958.0 | ||||||||||||
Operating margin | 16.3 | % | 13.9 | % | 13.5 | % | 10.6 | % | ||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
Consolidated Operating Margin Excluding Freight and Delivery Revenues | December 31, | December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Earnings from operations | $ | 137.4 | $ | 118.6 | $ | 479.4 | $ | 314.9 | ||||||||||||
Total revenues | $ | 844.6 | $ | 856.3 | $ | 3,539.6 | $ | 2,958.0 | ||||||||||||
Less: |
(63.8 | ) | (76.8 | ) | (271.5 | ) | (278.9 | ) | ||||||||||||
Net sales | $ | 780.8 | $ | 779.5 | $ | 3,268.1 | $ | 2,679.1 | ||||||||||||
Operating margin excluding freight and delivery revenues | 17.6 | % | 15.2 | % | 14.7 | % | 11.8 | % | ||||||||||||
Cement Business Gross Margin in Accordance with Generally Accepted Accounting Principles |
Three Months Ended | Year Ended | ||||||||||||||||||
|
December 31, | December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Gross profit | $ | 15.8 | $ | 28.3 | $ | 103.5 | $ | 52.5 | ||||||||||||
Total revenues | $ | 63.8 | $ | 106.0 | $ | 387.9 | $ | 221.8 | ||||||||||||
Gross margin | 24.8 | % | 26.7 | % | 26.7 | % | 23.7 | % | ||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
Cement Business Gross Margin Excluding Freight and Delivery Revenues | December 31, | December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Gross profit | $ | 15.8 | $ | 28.3 | $ | 103.5 | $ | 52.5 | ||||||||||||
Total revenues | $ | 63.8 | $ | 106.0 | $ | 387.9 | $ | 221.8 | ||||||||||||
Less: |
(3.7 | ) | (6.0 | ) | (20.3 | ) | (12.2 | ) | ||||||||||||
Net sales | $ | 60.1 | $ | 100.0 | $ | 367.6 | $ | 209.6 | ||||||||||||
Gross margin excluding freight and delivery revenues | 26.3 | % | 28.3 | % | 28.1 | % | 25.0 | % | ||||||||||||
California Cement 2015 Metrics (divested on September 30, 2015) | Three Months Ended |
Nine Months |
||||||||||||||||||
March 31 | June 30 | September 30 | September 30 | |||||||||||||||||
Shipment tons (000s) | 376 | 367 | 328 | 1,071 | ||||||||||||||||
Net sales | $ | 32.5 | $ | 33.9 | $ | 30.0 | $ | 96.4 | ||||||||||||
Gross (loss) profit | $ | (4.0 | ) | $ | 3.7 | $ | 3.4 | $ | 3.1 | |||||||||||
|
||||||||||||||||||||
Non-GAAP Financial Measures (continued) | ||||||||||||||||||||
(Dollars, other than per share amounts, in millions) | ||||||||||||||||||||
The Company presents the consolidated adjusted earnings from
operations, adjusted earnings per diluted share and consolidated
adjusted earnings before interest, income taxes, depreciation,
depletion and amortization (EBITDA). These non-GAAP measures exclude
the impacts of (1) the loss on the sale of the |
||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
Consolidated Adjusted Earnings from Operations | December 31, | December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Consolidated earnings from operations in accordance with generally accepted accounting principles | $ | 137.4 | $ | 118.6 | $ | 479.4 | $ | 314.9 | ||||||||||||
Loss on sale of |
(0.8 | ) | - | 29.1 | - | |||||||||||||||
Gain on sale of |
(13.1 | ) | - | (13.1 | ) | - | ||||||||||||||
TXI acquisition-related expenses, net | - | - | - | 42.7 | ||||||||||||||||
Impact of selling acquired inventory from TXI due to markup to fair value | - | - | - | 11.1 | ||||||||||||||||
Adjusted consolidated earnings from operations | $ | 123.5 | $ | 118.6 | $ | 495.4 | $ | 368.7 | ||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
Adjusted Earnings Per Diluted Share | December 31, | December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Earnings per diluted share in accordance with generally accepted accounting principles | $ | 1.26 | $ | 0.94 | $ | 4.29 | $ | 2.71 | ||||||||||||
Loss on sale of |
(0.01 | ) | - | 0.31 | - | |||||||||||||||
Gain on sale of |
(0.10 | ) | - | (0.10 | ) | - | ||||||||||||||
TXI acquisition-related expenses, net | - | - | - | 0.91 | ||||||||||||||||
Impact of selling acquired inventory from TXI due to markup to fair value | - | - | - | 0.12 | ||||||||||||||||
Adjusted earnings per diluted share | $ | 1.15 | $ | 0.94 | $ | 4.50 | $ | 3.74 | ||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
Consolidated Adjusted EBITDA | December 31, | December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Consolidated net earnings attributable to Martin Marietta | $ | 83.2 | $ | 64.0 | $ | 288.8 | $ | 155.6 | ||||||||||||
Interest expense | 18.9 | 21.1 | 76.3 | 66.1 | ||||||||||||||||
Taxes on income | 39.3 | 35.3 | 124.9 | 94.9 | ||||||||||||||||
Depreciation, depletion and amortization | 63.0 | 67.9 | 260.7 | 220.4 | ||||||||||||||||
Consolidated EBITDA | 204.4 | 188.3 | 750.7 | 537.0 | ||||||||||||||||
Pretax loss on sale of |
(0.8 | ) | - | 29.1 | - | |||||||||||||||
Pretax gain on sale of |
(13.1 | ) | - | (13.1 | ) | - | ||||||||||||||
TXI acquisition-related expenses, net | - | - | - | 42.7 | ||||||||||||||||
Impact of selling acquired inventory from TXI due to markup to fair value | - | - | - | 11.1 | ||||||||||||||||
Consolidated adjusted EBITDA | $ | 190.5 | $ | 188.3 | $ | 766.7 | $ | 590.8 | ||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
Cement Business EBITDA | December 31, | December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Pretax earnings | $ | 10.4 | $ | 22.4 | $ | 47.8 | $ | 40.7 | ||||||||||||
Interest expense | - | 0.1 | 0.1 | 0.1 | ||||||||||||||||
Depreciation, depletion and amortization | 11.5 | 15.2 | 53.6 | 30.6 | ||||||||||||||||
Cement Business EBITDA | $ | 21.9 | $ | 37.7 | $ | 101.5 | $ | 71.4 | ||||||||||||
Cement Sales | $ | 60.1 | $ | 100.0 | $ | 367.6 | $ | 209.6 | ||||||||||||
Cement EBITDA margin | 36 | % | 38 | % | 28 | % | 34 | % | ||||||||||||
|
|||||
Non-GAAP Financial Measures (continued) | |||||
(Dollars in millions) | |||||
Incremental gross margin (excluding freight and delivery revenues) is a non-GAAP measure. The Company presents this metric to enhance analysts' and investors' understanding of the impact of increased sales on profitability. The following shows the calculation of incremental gross margin (excluding freight and delivery revenues) for the heritage consolidated business, heritage Aggregates business, heritage Southeast Group and heritage West Group for the year ended December 31, 2015: | |||||
Heritage Consolidated Business | |||||
Net sales for the year ended December 31, 2015 | $ | 2,318.0 | |||
Net sales for the year ended December 31, 2014 | 2,167.5 | ||||
Incremental net sales | $ | 150.5 | |||
Gross Profit for the year ended December 31, 2015 | $ | 568.1 | |||
Gross Profit for the year ended December 31, 2014 | 454.6 | ||||
Incremental gross profit | $ | 113.5 | |||
Heritage consolidated business incremental gross margin (excluding freight and delivery revenues) for the year ended December 31, 2015 | 75 | % | |||
Heritage Aggregates Business | |||||
Net sales for the year ended December 31, 2015 | $ | 2,090.5 | |||
Net sales for the year ended December 31, 2014 | 1,931.4 | ||||
Incremental net sales | $ | 159.1 | |||
Gross Profit for the year ended December 31, 2015 | $ | 497.1 | |||
Gross Profit for the year ended December 31, 2014 | 366.6 | ||||
Incremental gross profit | $ | 130.5 | |||
Heritage Aggregates business incremental gross margin (excluding freight and delivery revenues) for the year ended December 31, 2015 | 82 | % | |||
Heritage Southeast Group | |||||
Net sales for the year ended December 31, 2015 | $ | 285.3 | |||
Net sales for the year ended December 31, 2014 | 255.0 | ||||
Incremental net sales | $ | 30.3 | |||
Gross Profit for the year ended December 31, 2015 | $ | 34.2 | |||
Gross Profit for the year ended December 31, 2014 | 10.7 | ||||
Incremental gross profit | $ | 23.5 | |||
Heritage Southeast Group incremental gross margin (excluding freight and delivery revenues) for the year ended December 31, 2015 | 78 | % | |||
Heritage West Group | |||||
Net sales for the year ended December 31, 2015 | $ | 956.0 | |||
Net sales for the year ended December 31, 2014 | 905.9 | ||||
Incremental net sales | $ | 50.1 | |||
Gross Profit for the year ended December 31, 2015 | $ | 206.7 | |||
Gross Profit for the year ended December 31, 2014 | 139.0 | ||||
Incremental gross profit | $ | 67.7 | |||
Heritage West Group gross margin (excluding freight and delivery revenues) for the year ended December 31, 2015 | 135 | % | |||
|
|||||
Non-GAAP Financial Measures (continued) | |||||
(Dollars in millions) | |||||
The ratio of Consolidated Debt-to-Consolidated EBITDA, as defined, for the trailing 12 months is a covenant under the Company's revolving credit facility, term loan facility and accounts receivable securitization facility. Under the terms of these agreements, as amended, the Company's ratio of Consolidated Debt-to-Consolidated EBITDA as defined, for the trailing 12 months can not exceed 3.50 times as of December 31, 2015, with certain exceptions related to qualifying acquisitions, as defined. | |||||
The following presents the calculation of Consolidated Debt-to-Consolidated EBITDA, as defined, for the trailing 12 months at December 31, 2015. For supporting calculations, refer to Company's website at www.martinmarietta.com. |
|||||
Twelve Month Period January 1, 2015 to December 31, 2015 |
|||||
Earnings from continuing operations attributable to |
$ | 288.8 | |||
Add back: | |||||
Interest expense | 76.3 | ||||
Income tax expense | 124.8 | ||||
Depreciation, depletion and amortization expense | 260.8 | ||||
Stock-based compensation expense | 13.6 | ||||
Nonrecurring expenses (acquisition-related expenses, net loss on divestitures and other noncash related charges) | 21.9 | ||||
Deduct: | |||||
Interest income | (0.3 | ) | |||
Consolidated EBITDA, as defined | $ | 785.9 | |||
Consolidated Net Debt, including debt for which the Company is a co-borrower, at December 31, 2015 | $ | 1,480.1 | |||
Consolidated Debt-to-Consolidated EBITDA, as defined, at December 31, 2015 for the trailing twelve month EBITDA |
1.88 times | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160209006039/en/
Executive Vice President and Chief Financial
Officer
www.martinmarietta.com
or
Investor
Contact:
Director,
Investor Relations
Elisabeth.eisleben@martinmarietta.com
Source:
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