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mlm-10q_20210930.htm

UNITED STATES

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 September 30, 2021

☐	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)

4123 Parklake Avenue, Raleigh, NC		27612
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 919-781-4550

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

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of each exchange on
which registered

Common Stock (Par Value $0.01)

MLM

NYSE

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 October 28, 2021
Common Stock, $0.01 par value		62,381,891

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2021

	Page
Part I. Financial Information:

Item 1. Financial Statements

Consolidated Balance Sheets – September 30, 2021 and December 31, 2020		3

Consolidated Statements of Earnings and Comprehensive Earnings – Three and Nine Months Ended September 30, 2021 and 2020		4

Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2021 and 2020		5

Consolidated Statement of Total Equity – Three and Nine Months Ended September 30, 2021 and 2020		6

Notes to Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		28

Item 3. Quantitative and Qualitative Disclosures About Market Risk		50

Item 4. Controls and Procedures		51

Part II. Other Information:

Item 1. Legal Proceedings		52

Item 1A. Risk Factors		52

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		52

Item 4. Mine Safety Disclosures		52

Item 6. Exhibits		53

Signatures		54

Page 2 of 54

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2021			2020
	(Dollars in Millions, Except Par Value Data)
ASSETS
Current Assets:
Cash and cash equivalents	$	2,381.4		$	207.3
Restricted cash		1.7			97.1
Accounts receivable, net		801.9			575.1
Inventories, net		717.5			709.0
Other current assets		98.2			79.8
Total Current Assets		4,000.7			1,668.3

Property, plant and equipment		9,536.9			8,955.0
Allowances for depreciation, depletion and amortization		(3,926.4	)		(3,712.7	)
Net property, plant and equipment		5,610.5			5,242.3
Goodwill		2,610.6			2,414.0
Other intangibles, net		787.2			508.0
Operating lease right-of-use assets, net		417.8			453.0
Other noncurrent assets		359.4			295.2
Total Assets	$	13,786.2		$	10,580.8

LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	249.3		$	207.8
Accrued salaries, benefits and payroll taxes		65.5			82.6
Accrued other taxes		59.4			45.4
Current maturities of long-term debt and short-term facilities		20.1			—
Accrued interest		46.1			18.3
Operating lease liabilities		47.3			48.6
Other current liabilities		113.5			96.6
Total Current Liabilities		601.2			499.3

Long-term debt		5,099.4			2,625.8
Deferred income taxes, net		809.3			781.5
Noncurrent operating lease liabilities		375.9			410.4
Other noncurrent liabilities		542.2			370.5
Total Liabilities		7,428.0			4,687.5

Equity:
Common stock, par value $0.01 per share (62.4 and 62.3 shares outstanding at September 30, 2021 and December 31, 2020, respectively)		0.6			0.6
Preferred stock, par value $0.01 per share		—			—
Additional paid-in capital		3,463.3			3,440.8
Accumulated other comprehensive loss		(151.4	)		(158.4	)
Retained earnings		3,043.4			2,607.7
Total Shareholders' Equity		6,355.9			5,890.7
Noncontrolling interests		2.3			2.6
Total Equity		6,358.2			5,893.3
Total Liabilities and Equity	$	13,786.2		$	10,580.8

See accompanying notes to the consolidated financial statements.

Page 3 of 54

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020
	(In Millions, Except Per Share Data)
Products and services revenues	$	1,462.7		$	1,240.7		$	3,679.9		$	3,321.2
Freight revenues		94.6			80.7			237.7			229.1
Total Revenues		1,557.3			1,321.4			3,917.6			3,550.3

Cost of revenues - products and services		1,021.0			836.1			2,676.9			2,390.9
Cost of revenues - freight		94.4			80.8			239.0			232.0
Total Cost of Revenues		1,115.4			916.9			2,915.9			2,622.9

Gross Profit		441.9			404.5			1,001.7			927.4

Selling, general & administrative expenses		86.0			71.1			248.2			221.0
Acquisition-related expenses		7.4			0.4			18.0			1.2
Other operating income, net		(8.4	)		(67.6	)		(28.2	)		(59.6	)
Earnings from Operations		356.9			400.6			763.7			764.8

Interest expense		44.3			28.7			99.9			89.7
Other nonoperating income, net		(5.6	)		(4.0	)		(23.8	)		(5.9	)
Earnings before income tax expense		318.2			375.9			687.6			681.0
Income tax expense		63.6			81.5			141.7			143.0
Consolidated net earnings		254.6			294.4			545.9			538.0
Less: Net earnings attributable to noncontrolling interests		—			—			0.2			—
Net Earnings Attributable to Martin Marietta Materials, Inc.	$	254.6		$	294.4		$	545.7		$	538.0

Consolidated Comprehensive Earnings:
Earnings attributable to Martin Marietta Materials, Inc.	$	256.2		$	298.0		$	552.7		$	545.2
Earnings attributable to noncontrolling interests		—			—			0.2			—
	$	256.2		$	298.0		$	552.9		$	545.2
Net Earnings Attributable to Martin Marietta Materials, Inc.
Per Common Share:
Basic attributable to common shareholders	$	4.08		$	4.72		$	8.74		$	8.63
Diluted attributable to common shareholders	$	4.07		$	4.71		$	8.72		$	8.61

Weighted-Average Common Shares Outstanding:
Basic		62.4			62.3			62.4			62.3
Diluted		62.6			62.4			62.6			62.4

See accompanying notes to the consolidated financial statements.

Page 4 of 54

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	September 30,
	2021			2020
	(Dollars in Millions)
Cash Flows from Operating Activities:
Consolidated net earnings	$	545.9		$	538.0
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities:
Depreciation, depletion and amortization		320.0			292.2
Stock-based compensation expense		33.0			22.4
Gain on divestitures and sales of assets		(26.6	)		(71.2	)
Deferred income taxes		25.7			24.8
Other items, net		(8.3	)		0.8
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable, net		(218.0	)		(104.5	)
Inventories, net		65.1			(22.6	)
Accounts payable		66.9			(0.8	)
Other assets and liabilities, net		(23.4	)		4.9
Net Cash Provided by Operating Activities		780.3			684.0

Cash Flows from Investing Activities:
Additions to property, plant and equipment		(321.3	)		(250.8	)
Acquisitions, net of cash acquired		(792.9	)		(64.0	)
Proceeds from divestitures and sales of assets		41.4			141.2
Investments in life insurance contracts, net		13.9			(12.7	)
Other investing activities, net		—			(5.4	)
Net Cash Used for Investing Activities		(1,058.9	)		(191.7	)

Cash Flows from Financing Activities:
Borrowings of debt		2,896.6			628.1
Repayments of debt		(400.0	)		(777.0	)
Payments on financing leases		(7.6	)		(2.3	)
Debt issuance costs		(6.1	)		(2.0	)
Distributions to owners of noncontrolling interest		(0.5	)		—
Repurchases of common stock		—			(50.0	)
Dividends paid		(109.7	)		(104.8	)
Proceeds from exercise of stock options		1.1			1.4
Shares withheld for employees' income tax obligations		(16.5	)		(13.0	)
Net Cash Provided by (Used for) Financing Activities		2,357.3			(319.6	)
Net Increase in Cash, Cash Equivalents and Restricted Cash		2,078.7			172.7
Cash, Cash Equivalents and Restricted Cash, beginning of period		304.4			21.0
Cash, Cash Equivalents and Restricted Cash, end of period	$	2,383.1		$	193.7

See accompanying notes to the consolidated financial statements.

Page 5 of 54

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF TOTAL EQUITY

(In Millions, Except Per Share Data)	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 June 30, 2021		62.4	$	0.6	$	3,451.1		$	(153.0	)	$	2,827.2		$	6,125.9		$	2.3	$	6,128.2
Consolidated net earnings		—		—		—			—			254.6			254.6			—		254.6
Other comprehensive earnings, net of tax		—		—		—			1.6						1.6			—		1.6
Dividends declared ($0.61 per share)		—		—		—			—			(38.4	)		(38.4	)		—		(38.4	)
Issuances of common stock for stock award plans		—		—		0.4			—			—			0.4			—		0.4
Shares withheld for employees' income tax obligations		—		—		(0.4	)		—			—			(0.4	)		—		(0.4	)
Stock-based compensation expense		—		—		12.2			—			—			12.2			—		12.2
Balance at September 30, 2021		62.4	$	0.6	$	3,463.3		$	(151.4	)	$	3,043.4		$	6,355.9		$	2.3	$	6,358.2