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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act.        

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes      No  

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

 

Class

 

Outstanding as of April 25, 2019

Common Stock, $0.01 par value

 

62,594,087

 

 

 


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2019

 

 

Page

Part I. Financial Information:

 

 

 

 

 

Item 1. Financial Statements

 

 

 

 

 

Consolidated Balance Sheets – March 31, 2019 and December 31, 2018

 

3

 

 

 

Consolidated Statements of Earnings and Comprehensive Earnings – Three Months Ended March 31, 2019 and 2018

 

4

 

 

 

Consolidated Statements of Cash Flows – Three Months Ended March 31, 2019 and 2018

 

5

 

 

 

Consolidated Statement of Total Equity – Three Months Ended March 31, 2019 and 2018

 

6

 

 

 

Notes to Consolidated Financial Statements

 

7

 

 

 

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

 

26

 

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

40

 

 

 

Item 4. Controls and Procedures

 

41

 

 

 

Part II. Other Information:

 

 

 

 

 

Item 1. Legal Proceedings

 

42

 

 

 

Item 1A. Risk Factors

 

42

 

 

 

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

 

42

 

 

 

Item 4. Mine Safety Disclosures

 

42

 

 

 

Item 6. Exhibits

 

43

 

 

 

Signatures

 

44

 

 

 

 

 

 

Page 2 of 44


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED BALANCE SHEETS

 

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(Dollars in Thousands)

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

37,357

 

 

$

44,892

 

Accounts receivable, net

 

 

550,607

 

 

 

523,276

 

Inventories, net

 

 

646,176

 

 

 

663,035

 

Other current assets

 

 

135,971

 

 

 

134,613

 

Total Current Assets

 

 

1,370,111

 

 

 

1,365,816

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

8,339,050

 

 

 

8,294,962

 

Allowances for depreciation, depletion and amortization

 

 

(3,192,368

)

 

 

(3,137,733

)

Net property, plant and equipment

 

 

5,146,682

 

 

 

5,157,229

 

Goodwill

 

 

2,397,483

 

 

 

2,399,118

 

Other intangibles, net

 

 

498,195

 

 

 

501,282

 

Operating lease right-of-use assets

 

 

498,233

 

 

 

 

Other noncurrent assets

 

 

137,703

 

 

 

127,974

 

Total Assets

 

$

10,048,407

 

 

$

9,551,419

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

184,844

 

 

$

210,808

 

Accrued salaries, benefits and payroll taxes

 

 

27,313

 

 

 

51,434

 

Pension and postretirement benefits

 

 

9,923

 

 

 

9,942

 

Accrued insurance and other taxes

 

 

52,895

 

 

 

63,543

 

Current maturities of long-term debt and short-term

   facilities

 

 

360,056

 

 

 

390,042

 

Accrued interest

 

 

31,844

 

 

 

17,176

 

Operating lease liabilities

 

 

50,776

 

 

 

 

Other current liabilities

 

 

39,986

 

 

 

43,805

 

Total Current Liabilities

 

 

757,637

 

 

 

786,750

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

2,801,228

 

 

 

2,730,439

 

Pension, postretirement and postemployment benefits

 

 

138,049

 

 

 

134,469

 

Deferred income taxes, net

 

 

695,771

 

 

 

705,564

 

Noncurrent operating lease liabilities

 

 

446,128

 

 

 

 

Other noncurrent liabilities

 

 

234,098

 

 

 

244,785

 

Total Liabilities

 

 

5,072,911

 

 

 

4,602,007

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Common stock, par value $0.01 per share

 

 

625

 

 

 

624

 

Preferred stock, par value $0.01 per share

 

 

 

 

 

 

Additional paid-in capital

 

 

3,406,456

 

 

 

3,396,059

 

Accumulated other comprehensive loss

 

 

(140,324

)

 

 

(143,579

)

Retained earnings

 

 

1,705,717

 

 

 

1,693,259

 

Total Shareholders' Equity

 

 

4,972,474

 

 

 

4,946,363

 

Noncontrolling interests

 

 

3,022

 

 

 

3,049

 

Total Equity

 

 

4,975,496

 

 

 

4,949,412

 

Total Liabilities and Equity

 

$

10,048,407

 

 

$

9,551,419

 

 

See accompanying notes to the consolidated financial statements.

 

Page 3 of 44


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2019

 

 

2018

 

 

 

(In Thousands, Except Per Share Data)

 

 

 

 

 

Products and services revenues

 

$

878,305

 

 

$

753,305

 

Freight revenues

 

 

60,650

 

 

 

48,699

 

Total Revenues

 

 

938,955

 

 

 

802,004

 

 

 

 

 

 

 

 

 

 

Cost of revenues - products and services

 

 

734,168

 

 

 

641,620

 

Cost of revenues - freight

 

 

61,880

 

 

 

49,992

 

Total Cost of Revenues

 

 

796,048

 

 

 

691,612

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

142,907

 

 

 

110,392

 

 

 

 

 

 

 

 

 

 

Selling, general & administrative expenses

 

 

78,292

 

 

 

70,121

 

Acquisition-related expenses, net

 

 

144

 

 

 

711

 

Other operating (income) expenses, net

 

 

(4,750

)

 

 

479

 

Earnings from Operations

 

 

69,221

 

 

 

39,081

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

32,948

 

 

 

35,087

 

Other nonoperating income, net

 

 

(1,562

)

 

 

(8,503

)

Earnings before income tax expense

 

 

37,835

 

 

 

12,497

 

Income tax (benefit) expense

 

 

(4,991

)

 

 

2,457

 

Consolidated net earnings

 

 

42,826

 

 

 

10,040

 

Less: Net (loss) earnings attributable to noncontrolling

   interests

 

 

(27

)

 

 

17

 

Net Earnings Attributable to Martin Marietta Materials, Inc.

 

$

42,853

 

 

$

10,023

 

 

 

 

 

 

 

 

 

 

Consolidated Comprehensive Earnings:

 

 

 

 

 

 

 

 

Earnings attributable to Martin Marietta Materials, Inc.

 

$

46,108

 

 

$

11,642

 

(Loss) Earnings attributable to noncontrolling interests

 

 

(27

)

 

 

17

 

 

 

$

46,081

 

 

$

11,659

 

Net Earnings Attributable to Martin Marietta Materials, Inc.

 

 

 

 

 

 

 

 

Per Common Share:

 

 

 

 

 

 

 

 

Basic attributable to common shareholders

 

$

0.68

 

 

$

0.16

 

Diluted attributable to common shareholders

 

$

0.68

 

 

$

0.16

 

 

 

 

 

 

 

 

 

 

Weighted-Average Common Shares Outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

62,584

 

 

 

62,957

 

Diluted

 

 

62,777

 

 

 

63,222

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 4 of 44


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

March 31,

 

 

 

2019

 

 

2018

 

 

 

(Dollars in Thousands)

 

 

 

 

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

Consolidated net earnings

 

$

42,826

 

 

$

10,040

 

Adjustments to reconcile consolidated net earnings to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

89,211

 

 

 

76,821

 

Stock-based compensation expense

 

 

13,552

 

 

 

9,760

 

Gain on divestitures and sales of assets

 

 

(2,413

)

 

 

(951

)

Deferred income taxes

 

 

4,781

 

 

 

2,029

 

Other items, net

 

 

495

 

 

 

(2,269

)

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

   and divestitures:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(26,059

)

 

 

20,951

 

Inventories, net

 

 

16,416

 

 

 

(8,873

)

Accounts payable

 

 

20,393

 

 

 

7,925

 

Other assets and liabilities, net

 

 

(41,338

)

 

 

(10,421

)

Net Cash Provided by Operating Activities

 

 

117,864

 

 

 

105,012

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(130,056

)

 

 

(96,259

)

Proceeds from divestitures and sales of assets

 

 

2,927

 

 

 

2,528

 

Payment of railcar construction advances

 

 

 

 

 

(8,430

)

Reimbursement of railcar construction advances

 

 

 

 

 

8,430

 

Investments in life insurance contracts, net

 

 

193

 

 

 

99

 

Other investing activities, net

 

 

(600

)

 

 

 

Net Cash Used for Investing Activities

 

 

(127,536

)

 

 

(93,632

)

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Borrowings of debt

 

 

125,000

 

 

 

 

Repayments of debt

 

 

(85,000

)

 

 

(13

)

Payments on finance leases

 

 

(951

)

 

 

 

Payments on capital lease

 

 

 

 

 

(829

)

Debt issuance costs

 

 

 

 

 

(3,194

)

Contributions by owners of noncontrolling interest

 

 

 

 

 

129

 

Dividends paid

 

 

(30,395

)

 

 

(27,885

)

Proceeds from exercise of stock options

 

 

611

 

 

 

2,801

 

Shares withheld for employees' income tax obligations

 

 

(7,128

)

 

 

(6,380

)

Net Cash Provided by (Used for) Financing Activities

 

 

2,137

 

 

 

(35,371

)

Net Decrease in Cash and Cash Equivalents

 

 

(7,535

)

 

 

(23,991

)

Cash and Cash Equivalents, beginning of period

 

 

44,892

 

 

 

1,446,364

 

Cash and Cash Equivalents, end of period

 

$

37,357

 

 

$

1,422,373

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 5 of 44


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS 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, 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 ($0.44 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2018

 

 

62,515

 

 

$

624

 

 

$

3,396,059

 

 

$

(143,579

)

 

$

1,693,259

 

 

$

4,946,363

 

 

$

3,049

 

 

$

4,949,412

 

Consolidated net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

42,853

 

 

 

42,853

 

 

 

(27

)

 

 

42,826

 

Other comprehensive earnings,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

3,255

 

 

 

 

 

 

3,255

 

 

 

 

 

 

3,255

 

Dividends declared ($0.48 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30,395

)

 

 

(30,395

)

 

 

 

 

 

(30,395

)

Issuances of common stock for stock

   award plans

 

 

78

 

 

 

1

 

 

 

3,973

 

 

 

 

 

 

 

 

 

3,974

 

 

 

 

 

 

3,974

 

Shares withheld for employees' income

   tax obligations

 

 

 

 

 

 

 

 

(7,128

)

 

 

 

 

 

 

 

 

(7,128

)

 

 

 

 

 

(7,128

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

13,552

 

 

 

 

 

 

 

 

 

13,552

 

 

 

 

 

 

13,552

 

Balance at March 31, 2019

 

 

62,593

 

 

 

625

 

 

 

3,406,456

 

 

 

(140,324

)

 

 

1,705,717

 

 

 

4,972,474

 

 

 

3,022

 

 

$

4,975,496

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 6 of 44


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2019

(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 more than 300 quarries, mines and distribution yards to its customers in 31 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, Pennsylvania, 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.

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and in Article 10 of Regulation S-X. Other than the required adoption of Accounting Standards Codification 842 – Leases (ASC 842), 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, 2018. 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, 2019 are not indicative of the results expected for other interim periods or the full year. The consolidated balance sheet at

 

Page 7 of 44


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2019

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

December 31, 2018 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by U.S. GAAP for complete financial statements. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

New Accounting Pronouncement

Leases

Effective January 1, 2019, the Company adopted ASC 842, which requires virtually all leases, excluding mineral interest leases, to be recorded as right-of-use (ROU) assets and lease liabilities on the balance sheet and provides guidance on the recognition of lease expense and income. ASC 842 requires the modified retrospective transition approach, applying the new standard to all leases existing at the date of initial application. It further states that an entity may use either 1) its effective date or 2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company used the effective date as the date of initial application. As such, financial information and disclosures required under ASC 842 will not be provided for dates and periods prior to January 1, 2019.

The new standard provides a number of practical expedients for transition and policy elections for ongoing accounting. The Company elected the “package of practical expedients”, which permits the Company to not reassess its prior conclusions about lease identification, lease classification and initial direct costs. The Company elected the practical expedients pertaining to the use of hindsight and to land easements. Applying the hindsight practical expedient resulted in longer lease terms for many leases. The standard provides policy election options for recognition exemption for short-term leases and separation of lease and non-lease components. The Company elected the short-term lease recognition exemption and elected not to separate lease and non-lease components for all underlying asset classes with the exceptions of railcars and fleet vehicle leases.  The Company determines lease and non-lease components based on observable information, including rates provided by the lessor.  

The adoption of ASC 842 resulted in the recognition of ROU assets and lease liabilities of $502.5 million and $501.6 million, respectively, for operating leases and $10.9 million and $12.1 million, respectively, for finance leases. The adoption did not have a material impact on the Company’s consolidated statement of earnings or consolidated statement of cash flows.

Subsequent to the date of adoption, the Company determines if a contract is or contains a lease at inception of the agreement. Operating and finance leases are recognized as ROU assets and the related obligations are recognized as current or noncurrent liabilities on the Company’s consolidated balance sheets. Leases with an initial lease term of one year or less are not recorded on the balance sheet.

ROU assets, which represent the Company’s right to use an underlying asset, and lease liabilities, which represent the Company’s obligation to make lease payments arising from the lease, are recognized based on the present value of the future lease payments over the lease term at commencement date. The ROU asset also includes any lease payments made at or before commencement date and any initial direct costs incurred and excludes lease incentives. Certain of the Company’s leases contain renewal and/or termination options. The Company recognizes renewal or termination options as part of its ROU assets and lease liabilities when the Company has the unilateral right to renew or terminate and it is reasonably certain these options will be exercised. The Company determines the present value of lease payments based on the implicit rate, which may be explicitly stated in the lease if available or the Company’s estimated collateralized incremental borrowing rate based on the term of the lease. For operating leases, lease expense is recognized on a straight-line basis over the lease term.

Page 8 of 44


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2019

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

Some leases require the Company pay non-lease components, which may include taxes, maintenance, insurance and certain other expenses applicable to the leased property, and are primarily considered variable costs.  The Company generally accounts for lease and non-lease components as a single amount. However, for railcars and fleet vehicle leases, the Company separately accounts for the lease and non-lease components.

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,

 

 

 

2019

 

 

2018

 

 

 

(Dollars in Thousands)

 

Net earnings attributable to Martin Marietta Materials, Inc.

 

$

42,853

 

 

$

10,023

 

Other comprehensive earnings, net of tax

 

 

3,255

 

 

 

1,619

 

Comprehensive earnings attributable to Martin Marietta

   Materials, Inc.

 

$

46,108

 

 

$

11,642

 

 

Comprehensive earnings attributable to noncontrolling interests consist of net earnings and adjustments for the funded status of pension and postretirement benefit plans.  For the three months ended March 31, 2019 and 2018, there were no other comprehensive earnings attributable to noncontrolling interests.

Page 9 of 44


MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2019

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

 

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

 

 

 

(Dollars in Thousands)

 

 

 

Pension and

Postretirement Benefit Plans

 

 

Foreign Currency

 

 

Unamortized Value of Terminated

Forward Starting Interest Rate

Swap

 

 

Accumulated

Other Comprehensive

Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2019

 

Balance at beginning of period

 

$

(141,505

)

 

$

(2,074

)

 

$

 

 

$

(143,579

)

Other comprehensive earnings before

   reclassifications, net of tax