Martin Marietta Reports Record Fourth-Quarter and Full-Year 2017 Results
Full-Year EBITDA Surpasses
Company Delivers Record Revenues, Profitability and Earnings per Diluted Share
Pricing Growth Remains Solid Across All Product Lines and Segments
Consolidated Gross Margin Expands Despite Volume Headwinds
Company Remains Confident the Nation is in the Midst of a Steady Multi-Year Construction Recovery
Reaffirms Guidance of Mid-Single-Digit Growth in 2018 Aggregates Shipments
Highlights Include the Following Records:
Quarter ended |
Year ended |
|||||||||
($ in millions, except per share) | 2017 | 2016 | 2017 | 2016 | ||||||
Consolidated total revenues | ||||||||||
Building Materials business total revenues | ||||||||||
Magnesia Specialties total revenues | ||||||||||
Consolidated gross profit | ||||||||||
Consolidated earnings from operations | ||||||||||
Net earnings attributable to Martin Marietta 1 | ||||||||||
EBITDA 2 | ||||||||||
Earnings per diluted share 1 |
1 2017 fourth-quarter and full-year results include a one-time, non-cash benefit of
2 See appendix to this earnings release for a reconciliation to net earnings.
"Even more noteworthy, we achieved these safety and financial results despite externally-driven volume headwinds prevalent throughout much of the year that reduced full-year aggregates volumes by one million tons compared with 2016 and almost nine million tons as measured against our initial 2017 guidance. Our ability to post record results despite these external factors, among them extraordinary weather events, contractor labor constraints, and a slower-than-expected pace of public contract lettings, validates the successful execution of our strategic plan and underpins our optimism for a steady and extended cyclical recovery as we begin 2018.
"Our confidence in our 2018 outlook is particularly strengthened by positive fourth-quarter trends. Once again, we posted solid pricing growth across all product lines and segments. These ongoing pricing improvements, coupled with the benefits from the strategic deployment of capital into our business, contributed in part to a 290-basis-point expansion in fourth-quarter consolidated gross margin compared with the prior-year quarter. Notably, the aggregates product line posted a fourth-quarter incremental gross margin well in excess of management's targeted goal of 60 percent despite lower volumes. These results underscore the comparative strength of our markets and our continued focus on operational excellence.
"While employment expansion has led to continued strength in private residential and nonresidential construction, we have yet to see meaningful and consistent growth in public heavy construction activity. Infrastructure projects have been hindered by project delays and uncertainty concerning regulatory and other related reform. We are encouraged, however, by the recent enactment of the Tax Cuts and Jobs Act of 2017 (2017 Tax Act) and its long-term benefits for Martin Marietta, our customers and our industry. Importantly, passage of this legislation provides positive momentum in
Mr. Nye's CEO Earnings Commentary and Market Perspective can be found on the Investor Relations section of the Company's website.
Operating Results
(All comparisons are versus the prior-year quarter unless noted otherwise)
Building Materials Business
Fourth-quarter total revenues for the
Overall, fourth-quarter aggregates product line shipments decreased slightly, driven by government uncertainty, labor constraints and ongoing project delays, particularly in the Mid-America and West Groups.
Infrastructure Market Highlights
♦ Aggregates product line shipments to the infrastructure market increased slightly over the prior-year fourth quarter. Continued underinvestment in the nation's infrastructure, coupled with marginal construction activity from the FAST Act and ongoing project delays, limited the growth in overall infrastructure shipments. However, the
Nonresidential Market Highlights
♦ Aggregates product line shipments to the nonresidential market decreased 7 percent during the fourth quarter. While the
Residential Market Highlights
♦ Aggregates product line shipments to the residential market increased 9 percent during the fourth quarter, driven by continued strength in housing across the Company's geographic footprint, particularly in the western and southeastern United States. Notably,
♦ Aggregates product line volumes for the
Magnesia Specialties Business
Fourth-quarter total revenues for the Magnesia Specialties business were
Consolidated Operating Results
On
Liquidity and Capital Resources
Cash provided by operating activities was
Property, plant and equipment additions for 2017 were
In
At
Capital Allocation Priorities Enhance Shareholder Value
Martin Marietta is dedicated to maintaining disciplined capital allocation to further enhance shareholder value. The Company's unchanged capital allocation priorities include the right acquisitions that enable the successful execution of the Company's strategic growth plan, organic capital investment, and the return of cash to shareholders through a meaningful and sustainable dividend and share repurchases.
Consistent with these objectives, the Company previously announced the acquisition of Bluegrass Materials, the largest privately-held, pure-play aggregates business in the United States. Martin Marietta and Bluegrass Materials continue to work closely and cooperatively with the
The Company returned
Outlook for 2018
Martin Marietta remains optimistic about its near-term and long-term outlook given its continued ability to successfully execute its strategic business plan and the largely positive trends in the markets it serves. The fundamental drivers for the Company's expected growth remain intact as the current broad-based recovery continues on a steady and extended basis. Notably:
♦ Infrastructure construction activity should see benefits from the funding provided by the FAST Act as state DOTs and contractors address labor constraints and further regulatory reform emerges. Additionally, state and local initiatives that support infrastructure funding, including gas tax increases and other ballot initiatives passed over the previous 24 months, continue to gain overwhelming voter support and will play an expanded role in public-sector activity. Third-party forecasts support increased infrastructure spending in 2018, particularly spending for aggregates-intensive highways and streets.
♦ Nonresidential construction is expected to modestly increase in both the heavy industrial and commercial sectors for the next several years as supported by third-party forecasts. Management expects new energy-related projects will bid in 2018 with construction activity in 2019 and beyond as permitting and final investment decisions are either made and/or approved.
♦ Residential construction is expected to continue growing, particularly in key Martin Marietta markets, driven by employment gains, historically low levels of construction activity over the previous years, low mortgage rates and higher lot development. Notably, six of Martin Marietta's key states rank in the top ten for single-family housing unit permits.
Management's view of 2018 anticipates growth in all three primary construction end-use markets and faster expansion in the West and Southeast Groups and comparatively slower growth in the
♦ Aggregates product line end-use markets compared with 2017 levels are as follows:
- Infrastructure market to increase in the mid-single digits.
- Nonresidential market to increase in the low- to mid-single digits.
- Residential market to increase in the high-single digits.
ChemRock /Rail market to remain stable.
As a result of the recent 2017 Tax Act, management expects the Company's effective tax rate, excluding discrete events, to range from 20 percent to 22 percent compared with its 2017 guidance of 28 percent.
Martin Marietta's 2018 guidance excludes any benefit from a potential increase in federal infrastructure funding as well as any impact from the pending acquisition of Bluegrass Materials which is expected to be accretive to earnings per share and cash flow in the first full year of Martin Marietta's ownership.
2018 GUIDANCE | |||||||
($ and tons in millions, except per ton) | Low * | High * | |||||
Consolidated | |||||||
Total revenues 1 | $ | 4,160 | $ | 4,355 | |||
Gross profit | $ | 1,040 | $ | 1,140 | |||
SG&A | $ | 275 | $ | 285 | |||
Interest expense | $ | 125 | $ | 130 | |||
Estimated tax rate (excluding discrete events) | 20 | % | 22 | % | |||
Net earnings attributable to Martin Marietta | $ | 490 | $ | 595 | |||
EBITDA 2 | $ | 1,075 | $ | 1,185 | |||
Capital expenditures | $ | 450 | $ | 500 | |||
Building Materials Business | |||||||
Aggregates Product Line | |||||||
Volume (total tons) 3 | 164 | 167 | |||||
% growth 3 | 4.0 | % | 6.0 | % | |||
Average selling price per ton (ASP) | $ | 13.85 | $ | 14.10 | |||
% growth 4 | 3.0 | % | 5.0 | % | |||
Total revenues | $ | 2,490 | $ | 2,595 | |||
Gross profit | $ | 655 | $ | 715 | |||
Cement Product Line | |||||||
Total revenues | $ | 415 | $ | 445 | |||
Gross profit | $ | 140 | $ | 160 | |||
Total revenues | $ | 1,370 | $ | 1,445 | |||
Gross profit | $ | 160 | $ | 175 | |||
Magnesia Specialties Business | |||||||
Total revenues | $ | 265 | $ | 270 | |||
Gross profit | $ | 85 | $ | 90 | |||
* Guidance range represents the low end and high end of the respective line items provided above.
1 2018 consolidated total revenues exclude
2 The 2018 guidance range for EBITDA is calculated in a manner consistent with the presentation of EBITDA. See appendix to this press release for a reconciliation to net earnings.
3 Represents 2018 total aggregates volumes, which includes approximately 11.2 million internal tons. Volume growth ranges are in comparison to total volumes of 157.7 million tons as reported for the full year 2017, which includes 10.9 million internal tons.
4 ASP growth ranges are in comparison to ASP of
Risks to Outlook
The outlook includes management's assessment of the likelihood of certain risks and uncertainties that may affect performance, including but not limited to: both price and volume, and a 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; the United States Congress' inability to reach agreement among themselves or with the current Administration on policy issues that impact the federal budget; the volatility in the commencement of 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 construction 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; a sustained reduction in capital investment by the railroads; an increase in the cost of compliance with governmental laws, rules and regulations; construction labor shortages and/or supply-chain challenges; and unexpected equipment failures, unscheduled maintenance, industrial accident or other prolonged and/or significant disruption to its cement and/or its Magnesia Specialties production facilities. 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 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, mitigate the risk of uncollectible receivables. The level of demand in the Company's end-use markets, production levels and the management of production costs will affect the operating leverage of the
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 efficient transportation of aggregates products in 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 resulting from economic events beyond the Company's control.
Non-GAAP Financial Information
This press release contains financial measures that have not been prepared in accordance with GAAP — earnings per diluted share excluding the impact of the 2017 Tax Act, EBITDA and the ratio of consolidated debt-to-consolidated EBITDA, as defined in the applicable credit agreement. Tables reconciling these non-GAAP financial measures for the respective periods are included in the appendix to this earnings release.
Conference Call Information
The Company will discuss its fourth-quarter and full-year 2017 earnings results on a conference call and an online web simulcast today
Martin Marietta, a member of the S&P 500 Index, is an American-based company and a leading supplier of building materials, including aggregates, cement, ready mixed concrete, and asphalt. Through a network of operations spanning 26 states,
Investor Contact:
Vice President, Investor Relations
(919) 783-4691
Suzanne.Osberg@martinmarietta.com
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 Company believes in good faith are reasonable but which may be materially different from actual results. Forward-looking statements give the investor 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 our forward-looking statements here and in other publications may turn out to be wrong.
Factors that the Company currently believes could cause actual results to differ materially from the forward-looking statements in this press release include, the performance of
Unaudited Statements of Earnings | ||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net sales | $ | 911.3 | $ | 889.0 | $ | 3,721.4 | $ | 3,576.8 | ||||||||
Freight and delivery revenues | 59.2 | 59.8 | 244.2 | 241.9 | ||||||||||||
Total revenues | 970.5 | 948.8 | 3,965.6 | 3,818.7 | ||||||||||||
Cost of sales | 652.2 | 663.2 | 2,749.5 | 2,665.1 | ||||||||||||
Freight and delivery costs | 59.2 | 59.8 | 244.2 | 241.9 | ||||||||||||
Total cost of revenues | 711.4 | 723.0 | 2,993.7 | 2,907.0 | ||||||||||||
Gross profit | 259.1 | 225.8 | 971.9 | 911.7 | ||||||||||||
Selling, general and administrative expenses | 67.0 | 68.7 | 262.1 | 241.6 | ||||||||||||
Acquisition-related expenses, net | 5.3 | 0.1 | 8.6 | 0.9 | ||||||||||||
Other operating expense (income), net | 3.4 | (0.7 | ) | 0.8 | (8.1 | ) | ||||||||||
Earnings from operations | 183.4 | 157.7 | 700.4 | 677.3 | ||||||||||||
Interest expense | 23.4 | 20.8 | 91.5 | 81.7 | ||||||||||||
Other nonoperating (income) expense, net | (3.6 | ) | 0.5 | (10.0 | ) | (11.4 | ) | |||||||||
Earnings before income tax (benefit) expense | 163.6 | 136.4 | 618.9 | 607.0 | ||||||||||||
Income tax (benefit) expense | (213.7 | ) | 37.6 | (94.5 | ) | 181.6 | ||||||||||
Consolidated net earnings | 377.3 | 98.8 | 713.4 | 425.4 | ||||||||||||
Less: Net earnings (loss) attributable to noncontrolling interests | 0.1 | (0.1 | ) | 0.1 | - | |||||||||||
Net earnings attributable to |
$ | 377.2 | $ | 98.9 | $ | 713.3 | $ | 425.4 | ||||||||
Net earnings per common share attributable to common shareholders: | ||||||||||||||||
Basic | $ | 5.98 | $ | 1.56 | $ | 11.30 | $ | 6.66 | ||||||||
Diluted | $ | 5.95 | $ | 1.55 | $ | 11.25 | $ | 6.63 | ||||||||
Dividends per common share | $ | 0.44 | $ | 0.42 | $ | 1.72 | $ | 1.64 | ||||||||
Average number of common shares outstanding: | ||||||||||||||||
Basic | 62.9 | 63.3 | 62.9 | 63.6 | ||||||||||||
Diluted | 63.2 | 63.5 | 63.2 | 63.9 | ||||||||||||
Unaudited Financial Highlights | ||||||||||||||||
(In millions) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Total revenues: | ||||||||||||||||
Building Materials Business: | ||||||||||||||||
$ | 264.9 | $ | 254.8 | $ | 1,053.3 | $ | 1,017.1 | |||||||||
85.1 | 78.0 | 362.6 | 321.1 | |||||||||||||
553.0 | 551.9 | 2,279.7 | 2,223.5 | |||||||||||||
Total |
903.0 | 884.7 | 3,695.6 | 3,561.7 | ||||||||||||
Magnesia Specialties | 67.5 | 64.1 | 270.0 | 257.0 | ||||||||||||
Total | $ | 970.5 | $ | 948.8 | $ | 3,965.6 | $ | 3,818.7 | ||||||||
Net sales: | ||||||||||||||||
Building Materials Business: | ||||||||||||||||
$ | 247.8 | $ | 237.0 | $ | 982.1 | $ | 945.1 | |||||||||
81.9 | 74.4 | 348.4 | 304.5 | |||||||||||||
519.9 | 518.2 | 2,142.8 | 2,089.2 | |||||||||||||
Total |
849.6 | 829.6 | 3,473.3 | 3,338.8 | ||||||||||||
Magnesia Specialties | 61.7 | 59.4 | 248.1 | 238.0 | ||||||||||||
Total | $ | 911.3 | $ | 889.0 | $ | 3,721.4 | $ | 3,576.8 | ||||||||
Gross profit (loss): | ||||||||||||||||
Building Materials Business: | ||||||||||||||||
$ | 92.6 | $ | 82.4 | $ | 335.4 | $ | 306.5 | |||||||||
23.0 | 15.4 | 74.6 | 57.3 | |||||||||||||
116.4 | 105.5 | 465.6 | 466.8 | |||||||||||||
Total |
232.0 | 203.3 | 875.6 | 830.6 | ||||||||||||
Magnesia Specialties | 23.6 | 22.0 | 89.4 | 89.6 | ||||||||||||
Corporate | 3.5 | 0.5 | 6.9 | (8.5 | ) | |||||||||||
Total | $ | 259.1 | $ | 225.8 | $ | 971.9 | $ | 911.7 | ||||||||
Selling, general and administrative expenses: | ||||||||||||||||
Building Materials Business: | ||||||||||||||||
$ | 14.0 | $ | 13.5 | $ | 53.9 | $ | 52.7 | |||||||||
4.2 | 4.6 | 17.1 | 17.3 | |||||||||||||
27.0 | 26.6 | 102.7 | 95.6 | |||||||||||||
Total |
45.2 | 44.7 | 173.7 | 165.6 | ||||||||||||
Magnesia Specialties | 2.4 | 2.5 | 9.5 | 9.6 | ||||||||||||
Corporate | 19.4 | 21.5 | 78.9 | 66.4 | ||||||||||||
Total | $ | 67.0 | $ | 68.7 | $ | 262.1 | $ | 241.6 | ||||||||
Earnings (Loss) from operations: | ||||||||||||||||
Building Materials Business: | ||||||||||||||||
$ | 79.9 | $ | 70.7 | $ | 284.8 | $ | 258.4 | |||||||||
18.9 | 11.1 | 61.2 | 41.7 | |||||||||||||
West Group | 90.3 | 79.7 | 360.6 | 379.4 | ||||||||||||
Total |
189.1 | 161.5 | 706.6 | 679.5 | ||||||||||||
Magnesia Specialties | 20.8 | 19.0 | 79.4 | 79.3 | ||||||||||||
Corporate | (26.5 | ) | (22.8 | ) | (85.6 | ) | (81.5 | ) | ||||||||
Total | $ | 183.4 | $ | 157.7 | $ | 700.4 | $ | 677.3 | ||||||||
Unaudited Financial Highlights (Continued) | ||||||||||||||||
(In millions) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Total revenues by product line: | ||||||||||||||||
Building Materials Business: | ||||||||||||||||
Aggregates | $ | 565.2 | $ | 552.1 | $ | 2,341.5 | $ | 2,267.6 | ||||||||
231.9 | 237.3 | 937.0 | 903.8 | |||||||||||||
Cement | 93.6 | 87.9 | 384.1 | 375.8 | ||||||||||||
Asphalt and Paving | 77.7 | 70.9 | 297.0 | 261.6 | ||||||||||||
Less: Interproduct revenues | (65.4 | ) | (63.5 | ) | (264.0 | ) | (247.1 | ) | ||||||||
Total |
903.0 | 884.7 | 3,695.6 | 3,561.7 | ||||||||||||
Magnesia Specialties Business | 67.5 | 64.1 | 270.0 | 257.0 | ||||||||||||
Total | $ | 970.5 | $ | 948.8 | $ | 3,965.6 | $ | 3,818.7 | ||||||||
Net sales by product line: | ||||||||||||||||
Building Materials Business: | ||||||||||||||||
Aggregates | $ | 516.3 | $ | 501.2 | $ | 2,137.2 | $ | 2,060.9 | ||||||||
231.6 | 237.1 | 936.1 | 902.6 | |||||||||||||
Cement | 90.2 | 85.4 | 371.5 | 364.5 | ||||||||||||
Asphalt and Paving | 76.9 | 69.4 | 292.5 | 257.9 | ||||||||||||
Less: Interproduct sales | (65.4 | ) | (63.5 | ) | (264.0 | ) | (247.1 | ) | ||||||||
Total |
849.6 | 829.6 | 3,473.3 | 3,338.8 | ||||||||||||
Magnesia Specialties Business | 61.7 | 59.4 | 248.1 | 238.0 | ||||||||||||
Total | $ | 911.3 | $ | 889.0 | $ | 3,721.4 | $ | 3,576.8 | ||||||||
Gross profit (loss) by product line: | ||||||||||||||||
Building Materials Business: | ||||||||||||||||
Aggregates | $ | 161.3 | $ | 137.3 | $ | 601.9 | $ | 558.3 | ||||||||
21.1 | 23.1 | 91.7 | 99.0 | |||||||||||||
Cement | 29.4 | 26.7 | 117.3 | 120.2 | ||||||||||||
Asphalt and Paving | 20.2 | 16.2 | 64.7 | 53.1 | ||||||||||||
Total |
232.0 | 203.3 | 875.6 | 830.6 | ||||||||||||
Magnesia Specialties Business | 23.6 | 22.0 | 89.4 | 89.6 | ||||||||||||
Corporate | 3.5 | 0.5 | 6.9 | (8.5 | ) | |||||||||||
Total | $ | 259.1 | $ | 225.8 | $ | 971.9 | $ | 911.7 | ||||||||
Balance Sheet Data | |||||||
(In millions) | |||||||
2017 | 2016 | ||||||
(Unaudited) | (Audited) | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 1,446.4 | $ | 50.0 | |||
Accounts receivable, net | 487.2 | 457.9 | |||||
Inventories, net | 600.6 | 521.6 | |||||
Other current assets | 97.0 | 56.9 | |||||
Property, plant and equipment, net | 3,592.8 | 3,423.4 | |||||
Intangible assets, net | 2,666.6 | 2,670.7 | |||||
Other noncurrent assets | 101.9 | 120.4 | |||||
Total assets | $ | 8,992.5 | $ | 7,300.9 | |||
LIABILITIES AND EQUITY | |||||||
Current maturities of long-term debt and short-term facilities | $ | 299.9 | $ | 180.0 | |||
Other current liabilities | 394.3 | 366.6 | |||||
Long-term debt (excluding current maturities) | 2,727.3 | 1,506.2 | |||||
Other noncurrent liabilities | 888.5 | 1,105.5 | |||||
Total equity | 4,682.5 | 4,142.6 | |||||
Total liabilities and equity | $ | 8,992.5 | $ | 7,300.9 | |||
Unaudited Statements of Cash Flows | ||||||||
(In millions) | ||||||||
Twelve Months Ended | ||||||||
2017 | 2016 | |||||||
Operating activities: | ||||||||
Consolidated net earnings | $ | 713.4 | $ | 425.4 | ||||
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: | ||||||||
Depreciation, depletion and amortization | 297.2 | 285.3 | ||||||
Stock-based compensation expense | 30.5 | 20.5 | ||||||
(Gain) Loss on divestitures and sales of assets | (19.4 | ) | 0.4 | |||||
Deferred income taxes | (239.1 | ) | 67.1 | |||||
Other items, net | (13.1 | ) | (17.8 | ) | ||||
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | ||||||||
Accounts receivable, net | (29.3 | ) | (25.1 | ) | ||||
Inventories, net | (79.0 | ) | (47.4 | ) | ||||
Accounts payable | (17.9 | ) | (8.1 | ) | ||||
Other assets and liabilities, net | 14.6 | (11.1 | ) | |||||
Net cash provided by operating activities | 657.9 | 689.2 | ||||||
Investing activities: | ||||||||
Additions to property, plant and equipment | (410.3 | ) | (387.3 | ) | ||||
Acquisitions, net | (12.1 | ) | (178.8 | ) | ||||
Cash received in acquisition | - | 4.3 | ||||||
Proceeds from divestitures and sales of assets | 36.0 | 6.5 | ||||||
Payment of railcar construction advances | (43.6 | ) | (82.9 | ) | ||||
Reimbursement of railcar construction advances | 43.6 | 82.9 | ||||||
Net cash used for investing activities | (386.4 | ) | (555.3 | ) | ||||
Financing activities: | ||||||||
Borrowings of long-term debt | 2,408.8 | 560.0 | ||||||
Repayments of long-term debt | (1,065.0 | ) | (449.3 | ) | ||||
Payments on capital leases | (3.5 | ) | (3.4 | ) | ||||
Debt issue costs | (2.2 | ) | (2.3 | ) | ||||
Change in bank overdraft | - | (10.2 | ) | |||||
Contributions by noncontrolling interest to joint venture | 0.2 | - | ||||||
Distributions to owners of noncontrolling interests | - | (0.4 | ) | |||||
Payments of deferred acquisition consideration | (2.8 | ) | - | |||||
Repurchases of common stock | (100.0 | ) | (259.2 | ) | ||||
Dividends paid | (108.9 | ) | (105.0 | ) | ||||
Proceeds from exercise of stock options | 10.1 | 27.2 | ||||||
Shares withheld for employees' income tax obligations | (11.8 | ) | (9.7 | ) | ||||
Net cash provided by (used for) financing activities | 1,124.9 | (252.3 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 1,396.4 | (118.4 | ) | |||||
Cash and cash equivalents, beginning of period | 50.0 | 168.4 | ||||||
Cash and cash equivalents, end of period | $ | 1,446.4 | $ | 50.0 | ||||
Unaudited Operational Highlights | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
Volume | Pricing | Volume | Pricing | |||||||||||||
Volume/Pricing Variance (1) | ||||||||||||||||
(1.9 | %) | 6.9 | % | (0.7 | %) | 5.0 | % | |||||||||
5.6 | % | 4.2 | % | 5.3 | % | 8.7 | % | |||||||||
(1.5 | %) | (0.2 | %) | (2.2 | %) | 1.7 | % | |||||||||
Total Aggregates Product Line (2) | (0.9 | %) | 4.0 | % | (0.6 | %) | 4.5 | % | ||||||||
Three Months Ended | Year Ended | |||||||||||||||
Shipments (tons in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
17,915 | 18,269 | 72,539 | 73,060 | |||||||||||||
4,849 | 4,594 | 20,429 | 19,396 | |||||||||||||
15,094 | 15,324 | 64,730 | 66,170 | |||||||||||||
Total Aggregates Product Line (2) | 37,858 | 38,187 | 157,698 | 158,626 | ||||||||||||
(1) Volume/pricing variances reflect the percentage increase (decrease) from the comparable period in the prior year. | ||||||||||||||||
(2) Aggregates Product Line includes acquisitions from the date of acquisition and divestitures through the date of disposal. | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Shipments (in thousands) | ||||||||||||||||
Aggregates tons - external customers | 35,201 | 35,677 | 146,818 | 148,198 | ||||||||||||
Internal aggregates tons used in other product lines | 2,657 | 2,510 | 10,880 | 10,428 | ||||||||||||
Total aggregates tons | 37,858 | 38,187 | 157,698 | 158,626 | ||||||||||||
2,116 | 2,220 | 8,559 | 8,490 | |||||||||||||
Cement tons - external customers | 524 | 496 | 2,271 | 2,331 | ||||||||||||
Internal cement tons used in other product lines | 300 | 314 | 1,196 | 1,194 | ||||||||||||
824 | 810 | 3,467 | 3,525 | |||||||||||||
Asphalt tons - external customers | 260 | 268 | 1,123 | 1,023 | ||||||||||||
Internal asphalt tons used in road paving business | 552 | 534 | 2,167 | 2,131 | ||||||||||||
Total asphalt tons | 812 | 802 | 3,290 | 3,154 | ||||||||||||
Average unit sales price by product line (including internal sales): | ||||||||||||||||
Aggregates (per ton) | $ | 13.55 | $ | 13.03 | $ | 13.46 | $ | 12.88 | ||||||||
$ | 107.07 | $ | 104.84 | $ | 107.27 | $ | 104.26 | |||||||||
Cement (per ton) | $ | 108.23 | $ | 103.94 | $ | 105.97 | $ | 101.96 | ||||||||
Asphalt (per ton) | $ | 44.42 | $ | 38.21 | $ | 43.41 | $ | 39.20 | ||||||||
Non-GAAP Financial Measures | |||||||||||||||
(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 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 cannot exceed 3.50 times as of |
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The following presents the calculation of Consolidated Debt-to-Consolidated EBITDA, as defined by the Company's Credit Agreement, at |
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Twelve Month Period | |||||||||||||||
Earnings from continuing operations attributable to |
$ | 713.3 | |||||||||||||
Add back: | |||||||||||||||
Interest expense | 91.5 | ||||||||||||||
Depreciation, depletion and amortization expense | 294.0 | ||||||||||||||
Stock-based compensation expense | 30.5 | ||||||||||||||
Acquisition-related expenses | 8.6 | ||||||||||||||
Deduct: | |||||||||||||||
Income tax benefit | (94.6 | ) | |||||||||||||
Interest income | (0.7 | ) | |||||||||||||
Consolidated EBITDA, as defined by the Company's Credit Agreement | $ | 1,042.6 | |||||||||||||
Consolidated Net Debt, as defined and including debt for which the Company is a co-borrower, at |
$ | 1,643.0 | |||||||||||||
Consolidated Debt-to-Consolidated EBITDA, as defined by the Company's Credit Agreement, | |||||||||||||||
at |
1.58 times | ||||||||||||||
EBITDA is a widely accepted financial indicator of a company's ability to service and/or incur indebtedness. EBITDA is not defined by generally accepted accounting principles and, as such, should not be construed as an alternative to net earnings or operating cash flow. For further information on EBITDA, refer to the Company's website at www.martinmarietta.com. EBITDA is as follows: | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Consolidated Earnings Before Interest, Income Taxes, Depreciation, Depletion and Amortization (EBITDA) | $ | 262.4 | $ | 229.7 | $ | 1,004.4 | $ | 971.6 | |||||||
A Reconciliation of Net Earnings Attributable to |
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Three Months Ended | Year Ended | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net Earnings Attributable to |
$ | 377.2 | $ | 98.9 | $ | 713.3 | $ | 425.4 | |||||||
Add back: | |||||||||||||||
Interest Expense | 23.4 | 20.8 | 91.5 | 81.7 | |||||||||||
Income Tax (Benefit) Expense for Controlling Interests | (213.6 | ) | 37.6 | (94.4 | ) | 181.5 | |||||||||
Depreciation, Depletion and Amortization Expense | 75.4 | 72.4 | 294.0 | 283.0 | |||||||||||
Consolidated EBITDA | $ | 262.4 | $ | 229.7 | $ | 1,004.4 | $ | 971.6 | |||||||
A reconciliation of Net Earnings Attributable to |
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Midpoint of Full-Year 2018 Outlook |
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Net Earnings Attributable to |
$ | 542.5 | |||||||||||||
Add back: | |||||||||||||||
Interest Expense | 127.5 | ||||||||||||||
Income Tax Expense for Controlling Interests | 145.0 | ||||||||||||||
Depreciation, Depletion and Amortization Expense | 315.0 | ||||||||||||||
Consolidated EBITDA | $ | 1,130.0 | |||||||||||||
Earnings per diluted share excluding the impact of the Tax Cuts and Jobs Act of 2017 (2017 Tax Act) is a non-GAAP measure. The Company presents this measure to provide an earnings per diluted share measure that is comparable to prior periods as the impact of the 2017 Tax Act is a nonrecurring, non-cash benefit. The following reconciles earnings per diluted share in accordance with generally accepted accounting principles to earnings per diluted share excluding the impact of the 2017 Tax Act for the quarter and year ended |
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Three Months Ended | Year Ended | ||||||||||||||
2017 |
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Earnings per diluted share in accordance with generally accepted accounting principles | $ | 5.95 | $ | 11.25 | |||||||||||
Less: Per diluted share impact of the 2017 Tax Act | (4.07 | ) | (4.07 | ) | |||||||||||
Earnings per diluted share excluding the impact of the 2017 Tax Act | $ | 1.88 | $ | 7.18 | |||||||||||
Source:
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