SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2009

o		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 þ     No o

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 o     No o

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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

Yes o     No þ

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 30, 2009
Common Stock, $0.01 par value		44,518,585

 

 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

		Page
Part I. Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheets — March 31, 2009, December 31, 2008 and March 31, 2008			3
Consolidated Statements of Earnings — Three Months Ended March 31, 2009 and 2008			4
Consolidated Statements of Cash Flows — Three Months Ended March 31, 2009 and 2008			5
Consolidated Statement of Total Equity			6
Condensed Notes to Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3. Quantitative and Qualitative Disclosures About Market Risk			33
Item 4. Controls and Procedures			34
Part II. Other Information:
Item 1. Legal Proceedings			35
Item 1A. Risk Factors			35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			35
Item 6. Exhibits			36
Signatures			37
Exhibit Index			38
EX-31.01
EX-31.02
EX-32.01
EX-32.02

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

		March 31,				December 31,				March 31,
		2009				2008				2008
		(Unaudited)				(Audited)				(Unaudited)
		(Dollars in Thousands, Except Per Share Data)
ASSETS
Current Assets:
Cash and cash equivalents		$	222,003			$	37,794			$	13,577
Accounts receivable, net			206,785				211,596				239,009
Inventories, net			324,949				318,018				296,466
Current portion of notes receivable			1,313				1,474				2,020
Current deferred income tax benefits			56,177				57,967				43,411
Proceeds receivable for common stock issuances			37,612				—				—
Other current assets			43,100				38,182				26,397
Total Current Assets			891,939				665,031				620,880
Property, plant and equipment			3,349,606				3,320,905				3,082,223
Allowances for depreciation, depletion and amortization			(1,665,923	)			(1,630,376	)			(1,577,039	)
Net property, plant and equipment			1,683,683				1,690,529				1,505,184
Goodwill			623,810				622,297				578,447
Other intangibles, net			13,445				13,890				12,101
Noncurrent notes receivable			6,821				7,610				7,438
Other noncurrent assets			33,401				33,145				36,058
Total Assets		$	3,253,099			$	3,032,502			$	2,760,108
LIABILITIES AND EQUITY
Current Liabilities:
Bank overdraft		$	4,434			$	4,677			$	6,735
Accounts payable			77,029				62,921				92,623
Accrued salaries, benefits and payroll taxes			13,306				19,232				13,073
Pension and postretirement benefits			2,405				3,728				8,710
Accrued insurance and other taxes			27,009				23,419				28,169
Income taxes			—				—				2,773
Current maturities of long-term debt and short-term facilities			181,926				202,530				338,605
Accrued interest			28,282				13,277				23,668
Other current liabilities			13,261				18,855				30,152
Total Current Liabilities			347,652				348,639				544,508
Long-term debt			1,152,107				1,152,414				855,655
Pension, postretirement and postemployment benefits			213,517				207,830				106,880
Noncurrent deferred income taxes			175,806				174,308				163,031
Other noncurrent liabilities			79,830				82,051				91,133
Total Liabilities			1,968,912				1,965,242				1,761,207
Equity:
Common stock, par value $0.01 per share			445				414				413
Preferred stock, par value $0.01 per share			—				—				—
Additional paid-in capital			317,717				78,545				57,541
Accumulated other comprehensive loss			(99,753	)			(101,672	)			(40,852	)
Retained earnings			1,021,832				1,044,417				938,085
Total Shareholders’ Equity			1,240,241				1,021,704				955,187
Noncontrolling interests			43,946				45,556				43,714
Total Equity			1,284,187				1,067,260				998,901
Total Liabilities and Equity		$	3,253,099			$	3,032,502			$	2,760,108

See accompanying condensed notes to consolidated financial statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS

		Three Months Ended
		March 31,
		2009				2008
		(In Thousands, Except Per Share Data)
		(Unaudited)
Net Sales		$	330,344			$	396,293
Freight and delivery revenues			44,719				55,266
Total revenues			375,063				451,559
Cost of sales			281,867				321,145
Freight and delivery costs			44,719				55,266
Total cost of revenues			326,586				376,411
Gross Profit			48,477				75,148
Selling, general & administrative expenses			37,157				37,696
Research and development			136				178
Other operating (income) and expenses, net			293				(5,586	)
Earnings from Operations			10,891				42,860
Interest expense			18,525				15,838
Other nonoperating (income) and expenses, net			1,022				(114	)
(Loss) Earnings from continuing operations before taxes on income			(8,656	)			27,136
Income tax (benefit) expense			(2,190	)			6,874
(Loss) Earnings from Continuing Operations			(6,466	)			20,262
Gain (Loss) on discontinued operations, net of related tax expense (benefit) of $36 and $(146), respectively			93				(211	)
Consolidated net (loss) earnings			(6,373	)			20,051
Less: Net loss attributable to noncontrolling interests			(609	)			(813	)
Net (Loss) Earnings Attributable to Controlling Interests		$	(5,764	)		$	20,864
Net (Loss) Earnings Per Common Share:
Basic from continuing operations attributable to common shareholders		$	(0.14	)		$	0.51
Discontinued operations attributable to common shareholders			—				(0.01	)
		$	(0.14	)		$	0.50
Diluted from continuing operations attributable to common shareholders		$	(0.14	)		$	0.51
Discontinued operations attributable to common shareholders			—				(0.01	)
		$	(0.14	)		$	0.50
Net (Loss) Earnings Attributable to Common Shareholders:
(Loss) Earnings from continuing operations		$	(5,857	)		$	21,075
Discontinued operations			93				(211	)
		$	(5,764	)		$	20,864
Reconciliation of Denominators for Basic and Diluted Earnings Per Share Computations:
Basic weighted-average common shares outstanding			41,863				41,322
Effect of dilutive employee and director awards			—				602
Diluted weighted-average shares outstanding and assumed conversions			41,863				41,924
Cash Dividends Per Common Share		$	0.40			$	0.345

See accompanying condensed notes to consolidated financial statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

		Three Months Ended
		March 31,
		2009				2008
		(Dollars in Thousands)
		(Unaudited)
Cash Flows from Operating Activities:
Consolidated net (loss) earnings		$	(6,373	)		$	20,051
Adjustments to reconcile consolidated net (loss) earnings to net cash provided by operating activities:
Depreciation, depletion and amortization			42,619				38,922
Stock-based compensation expense			5,086				4,141
Losses (Gains) on divestitures and sales of assets			796				(5,465	)
Deferred income taxes			765				5,032
Excess tax benefits from stock-based compensation transactions			(95	)			(251	)
Other items, net			638				(1,136	)
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable, net			4,811				6,829
Inventories, net			(6,931	)			(9,506	)
Accounts payable			14,436				5,705
Other assets and liabilities, net			9,002				12,388
Net Cash Provided by Operating Activities			64,754				76,710
Cash Flows from Investing Activities:
Additions to property, plant and equipment			(40,316	)			(85,413	)
Acquisitions, net			(1,524	)			(19,016	)
Proceeds from divestitures and sales of assets			5,082				1,219
Railcar construction advances			—				(7,286	)
Repayments of railcar construction advances			—				7,286
Net Cash Used for Investing Activities			(36,758	)			(103,210	)
Cash Flows from Financing Activities:
Repayments of long-term debt and capital lease obligations			(1,097	)			(44	)
(Repayments) Borrowings on short-term facilities, net			(20,000	)			59,000
Change in bank overdraft			(243	)			384
Dividends paid			(16,821	)			(14,435	)
Distributions to owners of noncontrolling interests			(1,000	)			(1,470	)
Repurchases of common stock			—				(24,017	)
Issuances of common stock			195,279				370
Excess tax benefits from stock-based compensation transactions			95				251
Net Cash Provided by Financing Activities			156,213				20,039
Net Increase (Decrease) in Cash and Cash Equivalents			184,209				(6,461	)
Cash and Cash Equivalents, beginning of period			37,794				20,038
Cash and Cash Equivalents, end of period		$	222,003			$	13,577
Noncash Investing and Financing Activities:
Proceeds receivable for common stock issuances		$	37,612			$	—
Issuance of notes payable for acquisition of land		$	—			$	11,500
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest		$	3,377			$	4,163
Cash payments (refunds) for income taxes		$	290			$	(2,671	)

See accompanying condensed notes to consolidated financial statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF TOTAL EQUITY
(Unaudited)

		Shares of																				Total
		Common				Common				Additional				Accumulated Other				Retained				Shareholders’				Noncontrolling				Total
(in thousands)		Stock				Stock				Paid-in Capital				Comprehensive Loss				Earnings				Equity				Interests				Equity
Balance at December 31, 2008			41,462			$	414			$	78,545			$	(101,672	)		$	1,044,417			$	1,021,704			$	45,556			$	1,067,260
Consolidated net loss			—				—				—				—				(5,764	)			(5,764	)			(609	)			(6,373	)
Amortization of actuarial losses, prior service costs and transition assets related to pension and postretirement benefits, net of tax benefit of $1,474			—				—				—				2,256				—				2,256				(1	)			2,255
Foreign currency translation loss			—				—				—				(460	)			—				(460	)			—				(460	)
Amortization of terminated value of forward starting interest rate swap agreements into interest expense, net of tax benefit of $80			—				—				—				123				—				123				—				123
Consolidated comprehensive loss																							(3,845	)			(610	)			(4,455	)
Dividends declared			—				—				—				—				(16,821	)			(16,821	)			—				(16,821	)
Issuances of common stock			3,052				31				232,824				—				—				232,855				—				232,855
Issuances of common stock for stock award plans			4				—				1,262				—				—				1,262				—				1,262
Stock-based compensation expense			—				—				5,086				—				—				5,086				—				5,086
Distributions to owners of noncontrolling interests			—				—				—				—				—				—				(1,000	)			(1,000	)
Balance at March 31, 2009			44,518			$	445			$	317,717			$	(99,753	)		$	1,021,832			$	1,240,241			$	43,946			$	1,284,187

See accompanying condensed notes to consolidated financial statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.		Significant Accounting Policies
		Basis of Presentation
		The accompanying unaudited consolidated financial statements of Martin Marietta Materials, Inc. (the “Corporation”) have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and to Article 10 of Regulation S-X. The Corporation has continued to follow the accounting policies set forth in the audited consolidated financial statements and related notes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission on February 17, 2009. In the opinion of management, the interim financial information provided herein reflects all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results of operations, financial position and cash flows for the interim periods. The results of operations for the quarter ended March 31, 2009 are not indicative of the results expected for other interim periods or the full year.
		Comprehensive Earnings
		Consolidated comprehensive earnings/loss for the three months ended March 31, 2009 and 2008 was a loss of $4,455,000 and earnings of $16,231,000, respectively, and consist of consolidated net earnings or loss; amortization of actuarial losses, prior service costs and transition assets related to pension and postretirement benefits; foreign currency translation adjustments; for 2009, amortization of the terminated value of forward starting interest rate swap agreements into interest expense; and, for 2008, changes in the fair value of forward starting interest rate swap agreements.
		Derivatives
		The Corporation records derivative instruments at fair value on its consolidated balance sheet. At March 31, 2009 and December 31, 2008, the Corporation did not hold any derivative instruments. At March 31, 2008, the Corporation’s derivatives were forward starting interest rate swaps, which represented cash flow hedges. The Corporation’s objective for holding these derivatives was to lock in the interest rate related to a portion of the Corporation’s refinancing of Notes due in 2008. In accordance with Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (“FAS 133”), the fair values of these hedges were recorded as other assets or liabilities in the consolidated balance sheet and changes in the fair value were recorded, net of tax, directly in shareholders’ equity as other comprehensive earnings or loss. In April 2008, the Corporation unwound these cash flow hedges in connection with a public debt offering (see Note 5) and the accumulated other comprehensive loss at the date of termination is being charged to earnings in the same periods as interest expense is incurred on the underlying debt issuance.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

1.		Significant Accounting Policies (continued)
		Accounting Changes
		In accordance with Financial Accounting Standards Board Staff Position No. FAS 157-2, Effective Date of FASB Statement No. 157, beginning January 1, 2009, if the Corporation is required to record any nonrecurring nonfinancial assets and nonfinancial liabilities at fair value, they are measured in accordance with Statement of Financial Accounting Standards No. 157, Fair Value Measurements.
		On January 1, 2009, the Corporation adopted Statements of Financial Accounting Standards No. 141 (revised 2007), Business Combinations (“FAS 141(R)”) and No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB 51 (“FAS 160”). FAS 141(R) requires recognizing the full fair value of all assets acquired, liabilities assumed and noncontrolling minority interests in acquisitions of less than a 100% controlling interest; expensing all acquisition-related transaction and restructuring costs; capitalizing in-process research and development assets acquired; and recognizing contingent consideration obligations and contingent gains acquired and contingent losses assumed. FAS 160 requires the classification of noncontrolling interests as a separate component of equity and net earnings attributable to noncontrolling interests as a separate line item on the face of the income statement. FAS 141(R) and FAS 160 require prospective application for all business combinations with acquisition dates on or after the effective date. The Corporation did not consummate any business combinations during the three months ended March 31, 2009.
		FAS 160 also requires retrospective application of its disclosure and presentation requirements for all periods presented. Accordingly, noncontrolling interests at December 31, 2008 and March 31, 2008, which were previously reported as other noncurrent liabilities, have been reclassified as a separate component of equity. Furthermore, the net loss attributable to noncontrolling interests for the three months ended March 31, 2008 has been presented as a separate line item on the Corporation’s consolidated statement of earnings. Consolidated comprehensive earnings for the three months ended March 31, 2008 were also adjusted to include the comprehensive loss attributable to noncontrolling interests.
		Reclassifications
		Certain 2008 amounts, in addition to those required by FAS 160, have been reclassified to conform to the 2009 presentation. The reclassifications had no impact on previously reported results of operations or financial position.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

2.		Discontinued Operations
		Operations that are disposed of or permanently shut down represent discontinued operations, and, therefore, the results of their operations through the dates of disposal and any gain or loss on disposals are included in discontinued operations on the consolidated statements of earnings. All discontinued operations relate to the Aggregates business.
		Discontinued operations included the following net sales, pretax gain on operations, pretax loss on disposals, income tax expense or benefit and overall net earnings or loss:

		Three Months Ended
		March 31,
		2009				2008
		(Dollars in Thousands)
Net sales		$	39			$	2,339
Pretax gain on operations		$	129			$	43
Pretax loss on disposals			—				(400	)
Pretax gain (loss)			129				(357	)
Income tax expense (benefit)			36				(146	)
Net earnings (loss)		$	93			$	(211	)

3.

Inventories, Net

		March 31,				December 31,				March 31,
		2009				2008				2008
		(Dollars in Thousands)
Finished products		$	273,468			$	268,763			$	257,161
Products in process and raw materials			18,872				17,206				15,766
Supplies and expendable parts			51,622				51,068				43,132
			343,962				337,037				316,059
Less allowances			(19,013	)			(19,019	)			(19,593	)
Total		$	324,949			$	318,018			$	296,466

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

4.		Goodwill
		The following table shows changes in goodwill, all of which relate to the Aggregates business, by reportable segment and in total for the quarter ended March 31, 2009 (dollars in thousands):

		Mideast				Southeast				West
		Group				Group				Group				Total
Balance at beginning of period		$	118,249			$	105,857			$	398,191			$	622,297
Adjustments to purchase price allocations			1,500				13				—				1,513
Balance at end of period		$	119,749			$	105,870			$	398,191			$	623,810

5.

Long-Term Debt

		March 31,				December 31,				March 31,
		2009				2008				2008
		(Dollars in Thousands)
6.875% Notes, due 2011		$	249,901			$	249,892			$	249,867
6.6% Senior Notes, due 2018			297,986				297,946				—
7% Debentures, due 2025			124,355				124,350				124,335
6.25% Senior Notes, due 2037			247,829				247,822				247,801
Floating Rate Senior Notes, due 2010, interest rate of 1.324% at March 31, 2009			224,716				224,650				224,453
5.875% Notes, due 2008			—				—				201,510
Revolving Credit Agreement, interest rate of 2.645% at March 31, 2009			180,000				200,000				—
Commercial paper, interest rate of 3.10%			—				—				81,000
Money market notes, interest rate of 3.17%			—				—				50,000
Acquisition note, interest rate of 8.00%			622				629				657
Other notes			8,624				9,655				14,637
			1,334,033				1,354,944				1,194,260
Less current maturities			(181,926	)			(202,530	)			(338,605	)
Total		$	1,152,107			$	1,152,414			$	855,655

On April 21, 2008, the Corporation issued $300,000,000 of 6.6% Senior Notes due in 2018 (the “6.6% Senior Notes”). The 6.6% Senior Notes, which are unsecured, may be redeemed in whole or in part prior to their maturity at a make whole redemption price. The 6.6% Senior Notes are senior unsecured obligations of the Corporation, ranking equal in right of payment with the Corporation’s existing and future unsubordinated indebtedness. Upon a change of control repurchase event and a below investment grade credit rating, the Corporation will be required to make an offer to repurchase all outstanding 6.6% Senior Notes at a price in cash equal to 101% of the principal amount, plus any accrued and unpaid interest to, but not including, the purchase date.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

5.		Long-Term Debt (continued)
		In connection with the issuance of the 6.6% Senior Notes, on April 16, 2008, the Corporation unwound its two forward starting interest rate swap agreements with a total notional amount of $150,000,000 (the “Swap Agreements”). The Corporation made a cash payment of $11,139,000, which represented the fair value of the Swap Agreements on the date of termination. The accumulated other comprehensive loss, net of tax, at the date of termination is being recognized in earnings over the life of the 6.6% Senior Notes. For the three months ended March 31, 2009, the Corporation recognized $203,000, net of tax, as additional interest expense. The accumulated other comprehensive loss related to the Swap Agreements at March 31, 2009 was $6,271,000, net of cumulative noncurrent deferred tax assets of $4,102,000. The ongoing amortization of the terminated value of the Swap Agreements will increase annual interest expense by approximately $1,000,000 until the maturity of the 6.6% Senior Notes in 2018. At March 31, 2008, the fair value of the Swap Agreements was a liability of $13,786,000 and was included in other current liabilities in the Corporation’s consolidated balance sheet. This fair value represented the estimated amount, using Level 2 observable market inputs for similar liabilities, the Corporation would have expected to pay to terminate the Swap Agreements at that date. Other comprehensive earnings/loss for the three months ended March 31, 2008 included a loss of $3,935,000, net of tax, for the change in fair value of the Swap Agreements.
		On October 24, 2008, the Corporation amended its $325,000,000 five-year revolving credit agreement (the “Credit Agreement”) to provide for an increased leverage ratio covenant. As amended, the covenant requires the Corporation’s ratio of consolidated debt to consolidated earnings before interest, taxes, depreciation, depletion and amortization (EBITDA), as defined, for the trailing twelve months (the “Ratio”) to not exceed 3.25 to 1.00 as of the end of any fiscal quarter. Furthermore, the covenant allows the Ratio to exclude debt incurred in connection with an acquisition for a period of 180 days, provided that the Ratio does not exceed 3.50 to 1.00. The Corporation was in compliance with the Ratio at March 31, 2009.
		At March 31, 2009 and December 31, 2008, $180,000,000 and $200,000,000, respectively, was outstanding under the Credit Agreement. The Corporation used the borrowings from the Credit Agreement to repay its $200,000,000 5.875% Notes that matured in December 2008. No borrowings were outstanding under the Credit Agreement at March 31, 2008.
		The Credit Agreement supports a $325,000,000 commercial paper program to the extent commercial paper is available to the Corporation. No borrowings were outstanding under the commercial paper program at March 31, 2009 or December 31, 2008. At March 31, 2008, commercial paper borrowings of $81,000,000 were outstanding.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

6.		Income Taxes
		As required by FAS 160, income tax (benefit) expense reported on the Corporation’s consolidated statements of earnings includes income taxes on earnings attributable to both controlling and noncontrolling interests. The adoption of FAS 160 increased the consolidated overall effective income tax rate for the three months ended March 31, 2008 by 0.9%.

		Three Months Ended March 31,
		2009				2008
Estimated effective income tax rate:
Continuing operations			25.3	%			25.3	%
Discontinued operations			27.9	%			40.9	%
Consolidated Overall			25.3	%			25.1	%

The Corporation’s effective income tax rate reflects the effect of state income taxes and the impact of differences in book and tax accounting arising from the net permanent benefits associated with the depletion allowances for mineral reserves, the domestic production deduction and the tax effect of nondeductibility of goodwill related to asset sales. The effective income tax rates for discontinued operations reflect the tax effects of individual operations’ transactions and are not indicative of the Corporation’s overall effective income tax rate.

7.		Pension and Postretirement Benefits
		The following presents the estimated components of the recorded net periodic benefit cost for pension and postretirement benefits for the three months ended March 31 (dollars in thousands):

		Pension								Postretirement Benefits
		2009				2008				2009				2008
Service cost		$	3,022			$	3,140			$	154			$	159
Interest cost			5,715				5,417				695				689
Expected return on assets			(4,080	)			(5,681	)			—				—
Amortization of:
Prior service cost (credit)			164				169				(372	)			(372	)
Actuarial loss (gain)			3,958				1,000				(21	)			(35	)
Total net periodic benefit cost		$	8,779			$	4,045			$	456			$	441

The Corporation’s current estimate of contributions to its pension and SERP plans in 2009 ranges from $10,000,000 to $25,000,000.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

8.		Contingencies
		In the opinion of management and counsel, it is unlikely that the outcome of litigation and other proceedings, including those pertaining to environmental matters, relating to the Corporation and its subsidiaries, will have a material adverse effect on the results of the Corporation’s operations or its financial position.
9.		Business Segments
		The Corporation conducts its aggregates operations through three reportable business segments: Mideast Group, Southeast Group and West Group. The Corporation also has a Specialty Products segment that includes magnesia chemicals and dolomitic lime. These segments are consistent with the Corporation’s current management reporting structure.
		The following tables display selected financial data for the Corporation’s reportable business segments. Corporate loss from operations primarily includes depreciation on capitalized interest, expenses for corporate administrative functions, unallocated corporate expenses and other nonrecurring and/or non-operational adjustments.

		Three Months Ended
		March 31,
		2009				2008
		(Dollars in Thousands)
Total revenues:
Mideast Group		$	86,753			$	124,582
Southeast Group			114,515				125,871
West Group			137,025				153,267
Total Aggregates Business			338,293				403,720
Specialty Products			36,770				47,839
Total		$	375,063			$	451,559
Net sales:
Mideast Group		$	82,040			$	118,674
Southeast Group			95,604				103,052
West Group			119,544				131,670
Total Aggregates Business			297,188				353,396
Specialty Products			33,156				42,897
Total		$	330,344			$	396,293

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

9.

Business Segments (continued)

		Three Months Ended
		March 31,
		2009				2008
		(Dollars in Thousands)
Earnings (Loss) from operations:
Mideast Group		$	5,155			$	32,104
Southeast Group			8,141				9,553
West Group			52				1,720
Total Aggregates Business			13,348				43,377
Specialty Products			6,342				9,078
Corporate			(8,799	)			(9,595	)
Total		$	10,891			$	42,860

The asphalt, ready mixed concrete, road paving and other product lines are considered internal customers of the core aggregates business. Net sales by product line are as follows:

		Three Months Ended
		March 31,
		2009				2008
		(Dollars in Thousands)
Aggregates		$	274,734			$	331,000
Asphalt			10,340				11,405
Ready Mixed Concrete			8,078				8,929
Road Paving			2,481				1,356
Other			1,555				706
Total Aggregates Business			297,188				353,396
Specialty Products			33,156				42,897
Total		$	330,344			$	396,293

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

10.		Supplemental Cash Flow Information
		The following table presents the components of the change in other assets and liabilities, net:

		Three Months Ended
		March 31,
		2009				2008
		(Dollars in Thousands)
Other current and noncurrent assets		$	(3,950	)		$	(2,583	)
Notes receivable			(3	)			18
Accrued salaries, benefits and payroll taxes			(4,795	)			(6,365	)
Accrued insurance and other taxes			3,590				3,047
Accrued income taxes			(1,835	)			8,227
Accrued pension, postretirement and postemployment benefits			8,094				3,413
Other current and noncurrent liabilities			7,901				6,631
		$	9,002			$	12,388

11.		Accrual for Reduction in Workforce
		During the fourth quarter of 2008, the Corporation accrued severance and other termination benefits for certain employees that were terminated as part of a reduction in workforce designed to control its cost structure. During the three months ended March 31, 2009, the Corporation paid $1,172,000 in accordance with the terms of the severance arrangements. At March 31, 2009, the remaining accrual was $3,044,000, of which $2,526,000 was included in accrued salaries, benefits and payroll taxes and $518,000 was included in other noncurrent liabilities on the Corporation’s consolidated balance sheet.

12.		Sale of Equity Securities
		On March 5, 2009, the Corporation entered into a distribution agreement with J.P. Morgan Securities Inc. (“J.P. Morgan”). Under the distribution agreement, the Corporation could offer and sell up to 5,000,000 shares of its common stock having an aggregate offering price of up to $300,000,000 from time to time through J.P. Morgan, as distribution agent. From March 5, 2009 through March 31, 2009, the Corporation sold 3,051,365 shares of its common stock at an average price of $77.90 per share, resulting in gross proceeds to the Corporation of $237,701,000. The aggregate net proceeds from such sales were $232,855,000 after deducting related expenses, including $4,800,000 in gross sales commissions paid to J.P. Morgan. Of the aggregate net proceeds, $37,612,000 was received subsequent to March 31, 2009.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

13.		Subsequent Events
		On April 21, 2009, the Corporation entered into a $100,000,000 three-year secured accounts receivable credit facility (the “AR Credit Facility”) with Wells Fargo Bank, N.A. (“Wells Fargo”). The AR Credit Facility provides for borrowings, on a revolving basis, of up to 90% of the Corporation’s eligible accounts receivable less than 90 days old and bears interest at a rate equal to the one-month LIBOR plus 2.75%, 3.19% at May 5, 2009. Under the AR Credit Facility, purchases and settlements will be made bi-weekly between the Corporation and Wells Fargo. Upon the terms and subject to the conditions in the AR Credit Facility, Wells Fargo may determine which receivables are eligible receivables, may determine the amount it will advance on such receivables, and may require the Corporation to repay advances made on receivables and thereby repay amounts outstanding under the AR Credit Facility. Wells Fargo also has the right to require the Corporation to repurchase receivables that remain outstanding 90 days past their invoice date. The Corporation continues to be responsible for the servicing and administration of the receivables purchased. The Corporation will carry the receivables and outstanding borrowings on its consolidated balance sheet.
		On April 23, 2009, the Corporation entered into a $130,000,000 unsecured term loan with a syndicate of banks (the “Term Loan”). The Term Loan bears interest, at the Corporation’s option, at rates based upon LIBOR or a base rate, plus, for each rate, basis points related to a pricing grid. The base rate is defined as the highest of (i) the bank’s prime lending rate, (ii) the Federal Funds rate plus 0.5% and (iii) one-month LIBOR plus 1%. The initial rates on the Term Loan were at one-month LIBOR plus 300 basis points, or 3.44%. The Term Loan requires quarterly principal payments of $1,625,000 through March 31, 2011 and $3,250,000 thereafter, with the remaining outstanding principal due in full on June 6, 2012.
		Both the AR Credit Facility and Term Loan require the Corporation’s ratio of consolidated debt to consolidated earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) for the trailing twelve months (the “Ratio”) to not exceed 3.25 to 1.00 as of the end of any fiscal quarter, provided that the Corporation may exclude from the Ratio debt incurred in connection with acquisitions for a period of 180 days so long as the Corporation maintains specified ratings on its long-term unsecured debt and the Ratio calculated without such exclusion does not exceed 3.50 to 1.00.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2009

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

OVERVIEW Martin Marietta Materials, Inc. (the “Corporation”), conducts its operations through four reportable business segments: Mideast Group, Southeast Group, West Group (collectively, the “Aggregates business”) and Specialty Products. The Corporation’s net sales and earnings are predominately derived from its Aggregates business, which processes and sells granite, limestone, and other aggregates products from a network of 288 quarries, distribution facilities and plants to customers in 29 states, Canada, the Bahamas and the Caribbean Islands. The Aggregates business’ products are used primarily by commercial customers principally in domestic construction of highways and other infrastructure projects and for commercial and residential buildings. The Specialty Products segment produces magnesia-based chemicals products used in industrial, agricultural and environmental applications and dolomitic lime sold primarily to customers in the steel industry.

CRITICAL ACCOUNTING POLICIES The Corporation outlined its critical accounting policies in its Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission on February 17, 2009.

RESULTS OF OPERATIONS

Except as indicated, the following comparative analysis in the Results of Operations section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations reflects results from continuing operations and is based on net sales and cost of sales.

Gross margin as a percentage of net sales and operating margin as a percentage of net sales represent non-GAAP measures. The Corporation presents these ratios calculated based on net sales, as it is consistent with the basis by which management reviews the Corporation’s operating results. Further, management believes it is consistent with the basis by which investors analyze the Corporation’s operating results given that freight and delivery revenues and costs represent pass-throughs and have no profit mark-up. 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 ended March 31, 2009 and 2008 in accordance with GAAP and reconciliations of the ratios as percentages of total revenues to percentages of net sales (dollars in thousands):

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2009
(Continued)

Gross Margin in Accordance with GAAP

		Three Months Ended
		March 31,
		2009				2008
Gross profit		$	48,477			$	75,148
Total revenues		$	375,063			$	451,559
Gross margin			12.9	%			16.6	%

Gross Margin Excluding Freight and Delivery Revenues

		Three Months Ended
		March 31,
		2009				2008
Gross profit		$	48,477			$	75,148
Total revenues		$	375,063			$	451,559
Less: Freight and delivery revenues			(44,719	)			(55,266	)
Net sales		$	330,344			$	396,293
Gross margin excluding freight and delivery revenues			14.7	%			19.0	%

Operating Margin in Accordance with GAAP

		Three Months Ended
		March 31,
		2009				2008
Earnings from operations		$	10,891			$	42,860
Total revenues		$	375,063			$	451,559
Operating margin			2.9	%			9.5	%

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2009
(Continued)

Operating Margin Excluding Freight and Delivery Revenues

		Three Months Ended
		March 31,
		2009				2008
Earnings from operations		$	10,891			$	42,860
Total revenues		$	375,063			$	451,559
Less: Freight and delivery revenues			(44,719	)			(55,266	)
Net sales		$	330,344			$	396,293
Operating margin excluding freight and delivery revenues			3.3	%			10.8	%

Operating margin excluding freight and delivery revenues and excluding nonrecurring gains on sales of assets for the quarter ended March 31, 2008 is a non-GAAP measure. The following reconciles operating margin excluding freight and delivery revenues and excluding nonrecurring gains on sales of assets to operating margin excluding freight and delivery revenues for the quarter ended March 31, 2008.

		Three Months Ended
		March 31, 2008
Earnings from operations		$	42,860
Less: Gains on sales of assets			(5,465	)
Earnings from operations excluding gains on sales of assets		$	37,395
Total revenues		$	451,559
Less: Freight and delivery revenues			(55,266	)
Net sales		$	396,293
Operating margin excluding freight and delivery revenues and excluding gains on sales of assets			9.4	%

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2009
(Continued)

Quarter Ended March 31

Notable items for the quarter ended March 31, 2009 included:

•		Net sales of $330.3 million, down 17% compared with 2008 first quarter net sales of $396.3 million
•		Earnings from operations of $10.9 million compared with $42.9 million in 2008
•		Loss per diluted share of $0.14, compared with earnings per diluted share of $0.50 for the prior-year quarter
•		Heritage aggregates product line pricing up 3.5% and volume down 21.1%
•		Diesel expense down $13.6 million, or 58%, compared with the prior-year quarter
•		Selling, general and administrative expenses down compared with the prior-year quarter, offsetting $1.8 million of increased pension costs
•		Strengthened financial flexibility through issuance of 3.1 million shares of common stock for $233 million
•		Secured new bank financing in advance of April 2010 debt maturity

The following table presents net sales, gross profit, selling, general and administrative expenses and earnings (loss) from operations data for the Corporation and its reportable segments for the three months ended March 31, 2009 and 2008. In each case, the data is stated as a percentage of net sales of the Corporation or the relevant segment, as the case may be.

Earnings from operations include research and development expense and other operating income and expenses, net. Research and development expense for the Corporation was $0.1 million and $0.2 million for the quarters ended March 31, 2009 and 2008, respectively. Consolidated other operating income and expenses, net, was expense of $0.3 million and income of $5.6 million for the quarters ended March 31, 2009 and 2008, respectively.

		Three Months Ended March 31,
		2009								2008
						% of								% of
		Amount				Net Sales				Amount				Net Sales
		(Dollars in Thousands)
Net sales:
Mideast Group		$	82,040							$	118,674
Southeast Group			95,604								103,052
West Group			119,544								131,670
Total Aggregates Business			297,188				100.0				353,396				100.0
Specialty Products			33,156				100.0				42,897				100.0
Total		$	330,344				100.0			$	396,293				100.0

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2009
(Continued)

		Three Months Ended March 31,
		2009								2008
						% of								% of
		Amount				Net Sales				Amount				Net Sales
		(Dollars in Thousands)
Gross profit:
Mideast Group		$	15,969							$	37,403
Southeast Group			14,853								15,949
West Group			10,748								12,042
Total Aggregates Business			41,570				14.0				65,394				18.5
Specialty Products			8,674				26.2				11,748				27.4
Corporate			(1,767	)			—				(1,994	)			—
Total		$	48,477				14.7			$	75,148				19.0
Selling, general & administrative expenses:
Mideast Group		$	11,142							$	11,318
Southeast Group			6,521								6,510
West Group			10,693								11,294
Total Aggregates Business			28,356				9.5				29,122				8.2
Specialty Products			2,354				7.1				2,518				5.9
Corporate			6,447				—				6,056				—
Total		$	37,157				11.2			$	37,696				9.5
Earnings (Loss) from operations:
Mideast Group		$	5,155							$	32,104
Southeast Group			8,141								9,553
West Group			52								1,720
Total Aggregates Business			13,348				4.5				43,377				12.3
Specialty Products			6,342				19.1				9,078				21.2
Corporate			(8,799	)			—				(9,595	)			—
Total		$	10,891				3.3			$	42,860				10.8

Historically, due to the seasonality of the Aggregates business, the first quarter is the Corporation’s weakest since aggregates shipments and profitability are lowest and most volatile during this period. Further, the Corporation’s performance was affected this year by the recession and unusually cold, wet weather throughout the southern United States. The Corporation mitigated the impact of declining aggregates volumes by maintaining its focus on cost management, thereby continuing to generate operating earnings.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2009
(Continued)

Mindful of the state of the economy, the Corporation’s operating teams remained focused on efficiently running the business while positioning the Corporation’s cost structure for the current environment and eventual recovery. The results of their efforts included a 12% reduction in consolidated cost of sales, despite expected increases in depreciation and pension costs. Productivity, as measured by tons-per-worked man hours, improved over the first quarter of 2008, despite a 25% decline in production volumes. The Corporation reduced its aggregates inventory tonnage by closely controlling the operating schedules at each of its quarries. As expected, diesel fuel prices continued to decline during the first quarter from the peak prices experienced in 2008. This decrease, combined with a reduction in consumption, contributed to a $14 million decline in diesel fuel expense compared with the prior-year period.

The Aggregates business continued to experience pricing increases in the aggregates product line consistent with management’s expectations for the full year; however, weather affected pricing more than management had anticipated. The unusually cold and wet weather in the Carolinas and Georgia, particularly during March, skewed the geographic mix of business toward the Southeast and West Groups. Management believes that heritage aggregates pricing in the first quarter of 2009 would have increased an additional 100 basis points if the geographic distribution of business were the same as in the first quarter 2008.

The following tables present volume and pricing data and shipments data for the aggregates product line. Heritage aggregates operations exclude volume and pricing data for acquisitions that were not included in prior-year operations for the comparable period and divestitures.

		Three Months Ended
		March 31, 2009
		Volume				Pricing
Volume/Pricing Variance (1)
Heritage Aggregates Product Line (2):
Mideast Group			(31.4	%)			0.7	%
Southeast Group			(17.8	%)			5.3	%
West Group			(15.9	%)			7.6	%
Heritage Aggregates Operations			(21.1	%)			3.5	%
Aggregates Product Line (3)			(20.2	%)			3.7	%

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2009
(Continued)

		Three Months Ended
		March 31,
		2009				2008
		(tons in thousands)
Shipments
Heritage Aggregates Product Line (2):
Mideast Group			6,681				9,740
Southeast Group			7,427				9,039
West Group			11,749				13,974
Heritage Aggregates Operations			25,857				32,753
Acquisitions			534				—
Divestitures(4)			9				313
Aggregates Product Line (3)			26,400				33,066

The Aggregates business is significantly affected by seasonal changes and other weather-related conditions. Aggregates production and shipment levels coincide with general construction activity levels, most of which occurs in the spring, summer and fall. Thus, production and shipment levels vary by quarter. Operations concentrated in the northern United States generally experience more severe winter weather conditions than operations in the Southeast and Southwest. Excessive rainfall, and conversely excessive drought, can also jeopardize shipments, production and profitability. Because of the potentially significant impact of weather on the Corporation’s operations, first quarter results are not indicative of expected performance for other interim periods or the full year.

Specialty Products’ net sales were $33.2 million for the first quarter 2009 compared with $42.9 million for the prior-year period. The decrease in net sales is due to reduced dolomitic lime shipments to the steel industry and slowing magnesia chemicals sales. Price increases, coupled with cost control, helped mitigate the decline in volumes. Earnings from operations for the quarter of $6.3 million decreased $2.8 million compared with the prior-year quarter.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 2009

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 2009
(Continued)

The Corporation’s gross margin excluding freight and delivery revenues for the quarter ended March 31 decreased 430 basis points to 14.7% in 2009. The following presents a rollforward of the Corporation’s gross profit (dollars in thousands):

Consolidated gross profit, quarter ended March 31, 2008		$	75,148
Aggregates Business:
Pricing strength			9,221
Volume weakness			(65,430	)
Cost decreases, net			32,385
Decrease in Aggregates Business gross profit			(23,824	)
Specialty Products			(3,074	)
Corporate			227
Decrease in consolidated gross profit			(26,671	)
Consolidated gross profit, quarter ended March 31, 2009		$	48,477