mlm-10q_20180331.htm

 

 

 

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, 2018

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: None

Former name, former address and former fiscal year, if changes since last report.

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting 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 May 2, 2018

Common Stock, $0.01 par value

 

62,951,453

 

 

 

 


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2018

 

 

Page

Part I. Financial Information:

 

 

 

 

 

Item 1. Financial Statements

 

 

 

 

 

Consolidated Balance Sheets – March 31, 2018, December 31, 2017 and March 31, 2017

 

3

 

 

 

Consolidated Statements of Earnings and Comprehensive Earnings – Three-Months Ended March 31, 2018 and 2017

 

4

 

 

 

Consolidated Statements of Cash Flows – Three-Months Ended March 31, 2018 and 2017

 

5

 

 

 

Consolidated Statement of Total Equity – Three-Months Ended March 31, 2018

 

6

 

 

 

Notes to Consolidated Financial Statements

 

7

 

 

 

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

 

24

 

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

38

 

 

 

Item 4. Controls and Procedures

 

39

 

 

 

Part II. Other Information:

 

 

 

 

 

Item 1. Legal Proceedings

 

40

 

 

 

Item 1A. Risk Factors

 

40

 

 

 

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

 

40

 

 

 

Item 4. Mine Safety Disclosures

 

40

 

 

 

Item 6. Exhibits

 

41

 

 

 

Signatures

 

42

 

 

 

 

 

 

Page 2 of 42


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED BALANCE SHEETS

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

 

2018

 

 

2017

 

 

2017

 

 

 

(Dollars in Thousands)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,422,373

 

 

$

1,446,364

 

 

$

55,418

 

Accounts receivable, net

 

 

466,465

 

 

 

487,240

 

 

 

479,215

 

Inventories, net

 

 

606,794

 

 

 

600,591

 

 

 

537,000

 

Other current assets

 

 

106,298

 

 

 

96,965

 

 

 

51,609

 

Total Current Assets

 

 

2,601,930

 

 

 

2,631,160

 

 

 

1,123,242

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

6,523,364

 

 

 

6,498,067

 

 

 

6,211,813

 

Allowances for depreciation, depletion and amortization

 

 

(2,940,870

)

 

 

(2,905,254

)

 

 

(2,744,168

)

Net property, plant and equipment

 

 

3,582,494

 

 

 

3,592,813

 

 

 

3,467,645

 

Goodwill

 

 

2,160,290

 

 

 

2,160,290

 

 

 

2,159,398

 

Operating permits, net

 

 

437,438

 

 

 

439,116

 

 

 

440,411

 

Other intangibles, net

 

 

61,338

 

 

 

67,233

 

 

 

67,318

 

Other noncurrent assets

 

 

104,560

 

 

 

101,899

 

 

 

135,777

 

Total Assets

 

$

8,948,050

 

 

$

8,992,511

 

 

$

7,393,791

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

162,328

 

 

$

183,638

 

 

$

188,399

 

Accrued salaries, benefits and payroll taxes

 

 

23,329

 

 

 

44,255

 

 

 

22,760

 

Pension and postretirement benefits

 

 

12,812

 

 

 

13,652

 

 

 

8,136

 

Accrued insurance and other taxes

 

 

52,413

 

 

 

64,958

 

 

 

49,535

 

Current maturities of long-term debt and short-term

   facilities

 

 

300,006

 

 

 

299,909

 

 

 

290,048

 

Accrued interest

 

 

39,720

 

 

 

19,825

 

 

 

23,649

 

Other current liabilities

 

 

60,371

 

 

 

67,979

 

 

 

49,031

 

Total Current Liabilities

 

 

650,979

 

 

 

694,216

 

 

 

631,558

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

2,728,102

 

 

 

2,727,294

 

 

 

1,556,246

 

Pension, postretirement and postemployment benefits

 

 

248,501

 

 

 

244,043

 

 

 

252,568

 

Deferred income taxes, net

 

 

413,570

 

 

 

410,723

 

 

 

667,160

 

Other noncurrent liabilities

 

 

227,068

 

 

 

233,758

 

 

 

210,305

 

Total Liabilities

 

 

4,268,220

 

 

 

4,310,034

 

 

 

3,317,837

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

Common stock, par value $0.01 per share

 

 

628

 

 

 

628

 

 

 

626

 

Preferred stock, par value $0.01 per share

 

 

 

 

 

 

 

 

 

Additional paid-in capital

 

 

3,381,280

 

 

 

3,368,007

 

 

 

3,349,813

 

Accumulated other comprehensive loss

 

 

(127,485

)

 

 

(129,104

)

 

 

(128,425

)

Retained earnings

 

 

1,422,207

 

 

 

1,440,069

 

 

 

851,354

 

Total Shareholders' Equity

 

 

4,676,630

 

 

 

4,679,600

 

 

 

4,073,368

 

Noncontrolling interests

 

 

3,200

 

 

 

2,877

 

 

 

2,586

 

Total Equity

 

 

4,679,830

 

 

 

4,682,477

 

 

 

4,075,954

 

Total Liabilities and Equity

 

$

8,948,050

 

 

$

8,992,511

 

 

$

7,393,791

 

 

See accompanying notes to the consolidated financial statements.

 

Page 3 of 42


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS

 

 

 

Three-Months Ended

 

 

 

March 31,

 

 

 

2018

 

 

2017

 

 

 

(In Thousands, Except Per Share Data)

 

 

 

 

 

Products and services revenues

 

$

753,305

 

 

$

792,316

 

Freight revenues

 

 

48,699

 

 

 

51,543

 

Total Revenues

 

 

802,004

 

 

 

843,859

 

 

 

 

 

 

 

 

 

 

Cost of revenues - products and services

 

 

641,620

 

 

 

644,617

 

Cost of revenues - freight

 

 

49,992

 

 

 

52,175

 

Total Cost of Revenues

 

 

691,612

 

 

 

696,792

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

110,392

 

 

 

147,067

 

 

 

 

 

 

 

 

 

 

Selling, general & administrative expenses

 

 

70,121

 

 

 

69,535

 

Acquisition-related expenses

 

 

711

 

 

 

22

 

Other operating expense, net

 

 

479

 

 

 

360

 

Earnings from Operations

 

 

39,081

 

 

 

77,150

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

35,087

 

 

 

20,851

 

Other nonoperating income, net

 

 

(8,503

)

 

 

(536

)

Earnings before income tax expense

 

 

12,497

 

 

 

56,835

 

Income tax expense

 

 

2,457

 

 

 

14,528

 

Consolidated net earnings

 

 

10,040

 

 

 

42,307

 

Less: Net earnings (loss) attributable to noncontrolling

   interests

 

 

17

 

 

 

(27

)

Net Earnings Attributable to Martin Marietta Materials, Inc.

 

$

10,023

 

 

$

42,334

 

 

 

 

 

 

 

 

 

 

Consolidated Comprehensive Earnings:  (See Note 1)

 

 

 

 

 

 

 

 

Earnings attributable to Martin Marietta Materials, Inc.

 

$

11,642

 

 

$

44,596

 

Earnings (Loss) attributable to noncontrolling interests

 

 

17

 

 

 

(26

)

 

 

$

11,659

 

 

$

44,570

 

Net Earnings Attributable to Martin Marietta Materials, Inc.

 

 

 

 

 

 

 

 

Per Common Share:

 

 

 

 

 

 

 

 

Basic attributable to common shareholders

 

$

0.16

 

 

$

0.67

 

Diluted attributable to common shareholders

 

$

0.16

 

 

$

0.67

 

 

 

 

 

 

 

 

 

 

Weighted-Average Common Shares Outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

62,957

 

 

 

63,024

 

Diluted

 

 

63,222

 

 

 

63,319

 

 

 

 

 

 

 

 

 

 

Cash Dividends Per Common Share

 

$

0.44

 

 

$

0.42

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 4 of 42


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

March 31,

 

 

 

2018

 

 

2017

 

 

 

(Dollars in Thousands)

 

 

 

 

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

Consolidated net earnings

 

$

10,040

 

 

$

42,307

 

Adjustments to reconcile consolidated net earnings to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

76,821

 

 

 

70,376

 

Stock-based compensation expense

 

 

9,760

 

 

 

10,275

 

(Gain) Loss on divestitures and sales of assets

 

 

(951

)

 

 

73

 

Deferred income taxes

 

 

2,029

 

 

 

2,827

 

Other items, net

 

 

(2,269

)

 

 

(179

)

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

   and divestitures:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

20,951

 

 

 

(21,305

)

Inventories, net

 

 

(8,873

)

 

 

(15,375

)

Accounts payable

 

 

7,925

 

 

 

8,536

 

Other assets and liabilities, net

 

 

(10,421

)

 

 

(23,670

)

Net Cash Provided by Operating Activities

 

 

105,012

 

 

 

73,865

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(96,259

)

 

 

(102,095

)

Proceeds from divestitures and sales of assets

 

 

2,528

 

 

 

539

 

Payment of railcar construction advances

 

 

(8,430

)

 

 

(37,011

)

Reimbursement of railcar construction advances

 

 

8,430

 

 

 

37,011

 

Investments in life insurance contracts, net

 

 

99

 

 

 

181

 

Net Cash Used for Investing Activities

 

 

(93,632

)

 

 

(101,375

)

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Borrowings of debt

 

 

 

 

 

205,000

 

Repayments of debt

 

 

(13

)

 

 

(45,012

)

Payments on capital lease obligations

 

 

(829

)

 

 

(761

)

Debt issuance costs

 

 

(3,194

)

 

 

 

Contributions by owners of noncontrolling interest

 

 

129

 

 

 

 

Dividends paid

 

 

(27,885

)

 

 

(26,560

)

Proceeds from exercise of stock options

 

 

2,801

 

 

 

3,917

 

Shares withheld for employees' income tax obligations

 

 

(6,380

)

 

 

(3,695

)

Repurchases of common stock

 

 

 

 

 

(99,999

)

Net Cash (Used for) Provided by Financing Activities

 

 

(35,371

)

 

 

32,890

 

Net (Decrease) Increase in Cash and Cash Equivalents

 

 

(23,991

)

 

 

5,380

 

Cash and Cash Equivalents, beginning of period

 

 

1,446,364

 

 

 

50,038

 

Cash and Cash Equivalents, end of period

 

$

1,422,373

 

 

$

55,418

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 5 of 42


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENT OF TOTAL EQUITY

 

(in thousands)

 

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, 2016

 

 

63,176

 

 

$

630

 

 

$

3,334,461

 

 

$

(130,687

)

 

$

935,574

 

 

$

4,139,978

 

 

$

2,612

 

 

$

4,142,590

 

Consolidated net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

42,334

 

 

 

42,334

 

 

 

(27

)

 

 

42,307

 

Other comprehensive earnings,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

2,262

 

 

 

 

 

 

2,262

 

 

 

1

 

 

 

2,263

 

Dividends declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,560

)

 

 

(26,560

)

 

 

 

 

 

(26,560

)

Issuances of common stock for stock

   award plans

 

 

60

 

 

 

1

 

 

 

5,077

 

 

 

 

 

 

 

 

 

5,078

 

 

 

 

 

 

5,078

 

Repurchases of common stock

 

 

(458

)

 

 

(5

)

 

 

 

 

 

 

 

 

(99,994

)

 

 

(99,999

)

 

 

 

 

 

(99,999

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

10,275

 

 

 

 

 

 

 

 

 

10,275

 

 

 

 

 

 

10,275

 

Balance at March 31, 2017

 

 

62,778

 

 

$

626

 

 

$

3,349,813

 

 

$

(128,425

)

 

$

851,354

 

 

$

4,073,368

 

 

$

2,586

 

 

$

4,075,954

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2017

 

 

62,873

 

 

$

628

 

 

$

3,368,007

 

 

$

(129,104

)

 

$

1,440,069

 

 

$

4,679,600

 

 

$

2,877

 

 

$

4,682,477

 

Consolidated net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,023

 

 

 

10,023

 

 

 

17

 

 

 

10,040

 

Other comprehensive earnings,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

1,619

 

 

 

 

 

 

1,619

 

 

 

 

 

 

1,619

 

Dividends declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27,885

)

 

 

(27,885

)

 

 

 

 

 

(27,885

)

Issuances of common stock for stock

   award plans

 

 

75

 

 

 

 

 

 

9,893

 

 

 

 

 

 

 

 

 

9,893

 

 

 

 

 

 

9,893

 

Shares withheld for employees' income

   tax obligations

 

 

 

 

 

 

 

 

(6,380

)

 

 

 

 

 

 

 

 

(6,380

)

 

 

 

 

 

(6,380

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

9,760

 

 

 

 

 

 

 

 

 

9,760

 

 

 

 

 

 

9,760

 

Contributions from owners of

   noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

306

 

 

 

306

 

Balance at March 31, 2018

 

 

62,948

 

 

$

628

 

 

$

3,381,280

 

 

$

(127,485

)

 

$

1,422,207

 

 

$

4,676,630

 

 

$

3,200

 

 

$

4,679,830

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 6 of 42


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2018

(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 282 quarries, mines and distribution yards to its customers in 30 states, Canada, the Bahamas and the Caribbean Islands.  In the 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.

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,

South Carolina,

Virginia, Washington and

West Virginia

  

Alabama, Florida, Georgia, Tennessee,
Nova Scotia and the Bahamas

  

Arkansas, Colorado, southern Kansas,

Louisiana, western Nebraska, Nevada, Oklahoma, Texas, Utah

and Wyoming

 

 

 

 

 

 

 

 

 

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.

 

Page 7 of 42


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2018

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

1.

Significant Accounting Policies (continued)

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles (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. Other than the required adoption of two new accounting pronouncements described below, 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, 2017. 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, 2018 are not indicative of the results expected for other interim periods or the full year. The consolidated balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by 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, 2017.

New Accounting Pronouncements

Revenue from Contracts with Customers

Effective January 1, 2018, the Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which changes the evaluation and accounting for revenue recognition under contracts with customers and enhances financial statement disclosures.  The Company implemented ASU 2014-09 using the modified retrospective approach.  The adoption resulted in insignificant changes to the Company’s policies in reporting revenues and had an immaterial impact on the Company’s financial position and results of operations but required new disclosures (see Note 2).  

Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments

Effective January 1, 2018, the Company adopted ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15), which provides clarification or additional guidance on certain transactions and its classification on the statement of cash flows on a retrospective basis.  Notably, ASU 2016-15 states settlement proceeds from corporate-owned life insurance policies should be classified as investing activities and premiums paid may be presented as either investing or operating activities or a combination of both.  At March 31, 2017, the Company reclassified $181,000 from operating activities to investing activities.  

 

Page 8 of 42


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2018

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

1.

Significant Accounting Policies (continued)

Pending Accounting Pronouncement

Lease Standard

In February 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standard, Accounting Codification Standard 842 – Leases, intending to improve financial reporting of leases and to provide more transparency into off-balance sheet leasing obligations.  The guidance requires virtually all leases, excluding mineral interest leases, to be recorded on the balance sheet and provides guidance on the recognition of lease expense and income.  The new standard is effective January 1, 2019.  The FASB recently proposed to eliminate the need for retrospective presentation of comparative financial statements and to allow the use of certain practical expedients in the adoption of the new standard.  The Company is currently assessing the impact of the new standard on the Company’s financial statements. The Company believes the new standard will have a material effect on its balance sheet but has not quantified the impact at this time.

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; foreign currency translation adjustments; and the amortization of the value of terminated forward starting interest rate swap agreements into interest expense, 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,

 

 

 

2018

 

 

2017

 

 

 

(Dollars in Thousands)

 

Net earnings attributable to Martin Marietta Materials, Inc.

 

$

10,023

 

 

$

42,334

 

Other comprehensive earnings, net of tax

 

 

1,619

 

 

 

2,262

 

Comprehensive earnings attributable to Martin Marietta

   Materials, Inc.

 

$

11,642

 

 

$

44,596

 

 

Comprehensive earnings attributable to noncontrolling interests, consisting of net earnings and adjustments for the funded status of pension and postretirement benefit plans, is as follows:

 

 

Three-Months Ended

 

 

 

March 31,

 

 

 

2018

 

 

2017

 

 

 

(Dollars in Thousands)

 

Net earnings (loss) attributable to noncontrolling interests

 

$

17

 

 

$

(27

)

Other comprehensive earnings, net of tax

 

 

 

 

 

1

 

Comprehensive earnings (loss) attributable to

   noncontrolling interests

 

$

17

 

 

$

(26

)

 

 

Page 9 of 42


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2018

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

1.

Significant Accounting Policies (continued)

Consolidated Comprehensive Earnings/Loss and Accumulated Other Comprehensive Loss (continued)

Changes in accumulated other comprehensive earnings (loss), net of tax, are as follows:  

 

 

 

(Dollars in Thousands)

 

 

 

 

 

 

 

 

 

 

 

Unamortized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Terminated

 

 

Accumulated

 

 

 

Pension and

 

 

 

 

 

 

Forward Starting

 

 

Other

 

 

 

Postretirement

 

 

Foreign

 

 

Interest Rate

 

 

Comprehensive

 

 

 

Benefit Plans

 

 

Currency

 

 

Swap

 

 

Loss

 

 

 

Three-Months Ended March 31, 2018

 

Balance at beginning of period

 

$

(128,802

)

 

$

(22

)

 

$

(280

)

 

$

(129,104

)

Other comprehensive loss before

   reclassifications, net of tax

 

 

 

 

 

(587

)

 

 

 

 

 

(587

)

Amounts reclassified from accumulated

   other comprehensive earnings, net of tax

 

 

1,996

 

 

 

 

 

 

210

 

 

 

2,206

 

Other comprehensive earnings (loss), net of tax

 

 

1,996

 

 

 

(587

)

 

 

210

 

 

 

1,619

 

Balance at end of period

 

$

(126,806

)

 

$

(609

)

 

$

(70

)

 

$

(127,485

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three-Months Ended March 31, 2017

 

Balance at beginning of period

 

$

(128,373

)

 

$

(1,162

)

 

$

(1,152

)

 

$

(130,687

)

Other comprehensive earnings before

   reclassifications, net of tax

 

 

 

 

 

137

 

 

 

 

 

 

137

 

Amounts reclassified from accumulated

   other comprehensive earnings, net of tax

 

 

1,910

 

 

 

 

 

 

215

 

 

 

2,125

 

Other comprehensive earnings, net of tax

 

 

1,910

 

 

 

137

 

 

 

215

 

 

 

2,262

 

Balance at end of period

 

$

(126,463

)

 

$

(1,025

)

 

$

(937

)

 

$

(128,425

)

 

 

Page 10 of 42


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2018

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

1.

Significant Accounting Policies (continued)

Consolidated Comprehensive Earnings/Loss and Accumulated Other Comprehensive Loss (continued)

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

 

 

 

(Dollars in Thousands)

 

 

 

Pension and

Postretirement

Benefit Plans

 

 

Unamortized

Value of

Terminated

Forward Starting

Interest Rate

Swap

 

 

Net Noncurrent

Deferred Tax

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three-Months Ended March 31, 2018

 

Balance at beginning of period

 

$

79,938

 

 

$

178

 

 

$

80,116

 

Tax effect of other comprehensive earnings

 

 

(658

)

 

 

(137

)

 

 

(795

)

Balance at end of period

 

$

79,280

 

 

$

41

 

 

$

79,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three-Months Ended March 31, 2017

 

Balance at beginning of period