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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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, 2022


☐	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 No.)
4123 Parklake Avenue, Raleigh, NC	27612
(Address of principal executive offices)	(Zip Code)

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

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, 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.

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 Exchange 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 27, 2022
Common Stock, $0.01 par value		62,090,694

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended September 30, 2022


	Page
Part I. Financial Information:

Item 1. Financial Statements

Consolidated Balance Sheets – September 30, 2022 and December 31, 2021		3

Consolidated Statements of Earnings and Comprehensive Earnings – Three and Nine Months Ended September 30, 2022 and 2021		4

Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2022 and 2021		5

Consolidated Statements of Total Equity – Three and Nine Months Ended September 30, 2022 and 2021		6

Notes to Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		26

Item 3. Quantitative and Qualitative Disclosures About Market Risk		49

Item 4. Controls and Procedures		50

Part II. Other Information:

Item 1. Legal Proceedings		51

Item 1A. Risk Factors		51

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		51

Item 4. Mine Safety Disclosures		51

Item 6. Exhibits		52

Signatures		53

Page 2 of 53

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED BALANCE SHEETS


	September 30,			December 31,
	2022			2021
	(In Millions, Except Par Value Data)
ASSETS
Current Assets:
Cash and cash equivalents	$	135.7		$	258.4
Restricted cash		—			0.5
Restricted investments (to satisfy discharged debt and related interest)		704.6			—
Accounts receivable, net		1,011.7			774.0
Inventories, net		823.4			752.6
Current assets held for sale		79.5			102.2
Other current assets		92.4			137.9
Total Current Assets		2,847.3			2,025.6

Property, plant and equipment		10,400.0			10,370.0
Allowances for depreciation, depletion and amortization		(4,246.2	)		(4,032.0	)
Net property, plant and equipment		6,153.8			6,338.0
Goodwill		3,640.4			3,494.4
Other intangibles, net		855.7			1,065.0
Operating lease right-of-use assets, net		397.3			426.7
Noncurrent assets held for sale		375.1			616.9
Other noncurrent assets		460.1			426.4
Total Assets	$	14,729.7		$	14,393.0

LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	333.5		$	356.2
Accrued salaries, benefits and payroll taxes		77.1			86.6
Accrued other taxes		57.9			58.4
Accrued interest		41.1			48.0
Current maturities of discharged long-term debt		698.7			—
Operating lease liabilities		55.0			53.9
Current liabilities held for sale		4.6			7.5
Other current liabilities		151.8			142.0
Total Current Liabilities		1,419.7			752.6

Long-term debt		4,339.9			5,100.8
Deferred income taxes, net		886.0			895.3
Noncurrent operating lease liabilities		348.4			379.4
Noncurrent liabilities held for sale		23.8			53.5
Other noncurrent liabilities		774.1			673.8
Total Liabilities		7,791.9			7,855.4

Equity:
Common stock, par value $0.01 per share (62.1 shares and 62.4 shares outstanding at September 30, 2022 and December 31, 2021, respectively)		0.6			0.6
Preferred stock, par value $0.01 per share		—			—
Additional paid-in capital		3,483.2			3,470.4
Accumulated other comprehensive loss		(125.1	)		(97.6	)
Retained earnings		3,577.0			3,161.9
Total Shareholders' Equity		6,935.7			6,535.3
Noncontrolling interests		2.1			2.3
Total Equity		6,937.8			6,537.6
Total Liabilities and Equity	$	14,729.7		$	14,393.0

See accompanying notes to the consolidated financial statements.

Page 3 of 53

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,
	2022			2021			2022			2021
	(In Millions, Except Per Share Data)
Products and services revenues	$	1,680.5		$	1,462.7		$	4,352.1		$	3,679.9
Freight revenues		131.2			94.6			332.1			237.7
Total Revenues		1,811.7			1,557.3			4,684.2			3,917.6

Cost of revenues - products and services		1,193.8			1,021.0			3,281.3			2,676.9
Cost of revenues - freight		130.1			94.4			333.8			239.0
Total Cost of Revenues		1,323.9			1,115.4			3,615.1			2,915.9

Gross Profit		487.8			441.9			1,069.1			1,001.7

Selling, general & administrative expenses		94.9			86.0			296.0			248.2
Acquisition and integration expenses		1.8			7.4			6.1			18.0
Other operating income, net		(14.8	)		(8.4	)		(177.4	)		(28.2	)
Earnings from Operations		405.9			356.9			944.4			763.7

Interest expense		42.8			44.3			126.4			99.9
Other nonoperating income, net		(7.3	)		(5.6	)		(40.1	)		(23.8	)
Earnings from continuing operations before income tax expense		370.4			318.2			858.1			687.6
Income tax expense		79.2			63.6			189.4			141.7
Earnings from continuing operations		291.2			254.6			668.7			545.9
Earnings from discontinued operations, net of income tax expense		4.1			—			14.3			—
Consolidated net earnings		295.3			254.6			683.0			545.9
Less: Net (loss) earnings attributable to noncontrolling interests		—			—			(0.2	)		0.2
Net Earnings Attributable to Martin Marietta	$	295.3		$	254.6		$	683.2		$	545.7

Consolidated Comprehensive Earnings (Loss):
Earnings attributable to Martin Marietta	$	298.3		$	256.2		$	655.7		$	552.7
(Loss) Earnings attributable to noncontrolling interests		—			—			(0.2	)		0.2
	$	298.3		$	256.2		$	655.5		$	552.9
Net Earnings Attributable to Martin Marietta
Per Common Share:
Basic from continuing operations attributable to common shareholders	$	4.67		$	4.08		$	10.73		$	8.74
Basic from discontinued operations attributable to common shareholders		0.07			—			0.23			—
	$	4.74		$	4.08		$	10.96		$	8.74

Diluted from continuing operations attributable to common shareholders	$	4.67		$	4.07		$	10.69		$	8.72
Diluted from discontinued operations attributable to common shareholders		0.06			—			0.23			—
	$	4.73		$	4.07		$	10.92		$	8.72

Weighted-Average Common Shares Outstanding:
Basic		62.3			62.4			62.4			62.4
Diluted		62.5			62.6			62.5			62.6

See accompanying notes to the consolidated financial statements.

Page 4 of 53

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended
	September 30,
	2022			2021
	(Dollars in Millions)
Cash Flows from Operating Activities:
Consolidated net earnings	$	683.0		$	545.9
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities:
Depreciation, depletion and amortization		380.3			320.0
Stock-based compensation expense		34.3			33.0
Gain on divestitures, sales of assets and extinguishment of debt		(190.7	)		(26.6	)
Deferred income taxes, net		(1.0	)		25.7
Other items, net		(1.0	)		(8.3	)
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable, net		(237.9	)		(218.0	)
Inventories, net		(87.0	)		65.1
Accounts payable		18.1			66.9
Other assets and liabilities, net		(37.4	)		(23.4	)
Net Cash Provided by Operating Activities		560.7			780.3

Cash Flows from Investing Activities:
Additions to property, plant and equipment		(309.1	)		(321.3	)
Acquisitions, net of cash acquired		11.0			(792.9	)
Proceeds from divestitures and sales of assets		679.1			41.4
Purchase of restricted investments to discharge long-term debt		(704.6	)		—
Investments in life insurance contracts, net		2.2			13.9
Other investing activities, net		(3.0	)		—
Net Cash Used for Investing Activities		(324.4	)		(1,058.9	)

Cash Flows from Financing Activities:
Borrowings of debt		—			2,896.6
Repayments of debt		(54.5	)		(400.0	)
Payments on finance lease obligations		(11.1	)		(7.6	)
Debt issuance and extinguishment costs		(0.3	)		(6.1	)
Distributions to owners of noncontrolling interest		—			(0.5	)
Repurchases of common stock		(150.0	)		—
Dividends paid		(118.1	)		(109.7	)
Proceeds from exercise of stock options		0.6			1.1
Shares withheld for employees' income tax obligations		(26.1	)