10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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.

Significant Accounting Policies

Organization

Martin Marietta Materials, Inc. (the Company or Martin Marietta) is a natural resource-based building materials company. As of March 31, 2024, the Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 360 quarries, mines and distribution yards in 28 states, Canada and The Bahamas. Martin Marietta also provides cement and downstream products and services, namely, ready mixed concrete, asphalt and paving, in vertically-integrated structured markets where the Company also 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 and ready mixed concrete and asphalt and paving product lines are reported collectively as the “Building Materials” business.

The Company’s Building Materials business includes two reportable segments: the East Group and the West Group.


BUILDING MATERIALS BUSINESS
Reportable Segments	East Group	West Group
Operating Locations	Alabama, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, Nova Scotia and The Bahamas	Arizona, Arkansas, California, Colorado, Louisiana, Oklahoma, Texas, Utah, Washington and Wyoming

Product Lines	Aggregates and Asphalt	Aggregates, Cement and Ready Mixed Concrete, Asphalt and Paving

The Company’s Magnesia Specialties business, which represents a separate reportable segment, has 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 for steel production and soil stabilization.

Basis of Presentation and Use of Estimates

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. 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, 2023. 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, 2024 are not necessarily indicative of the results expected for other interim periods or the full year. The consolidated balance sheet at December 31, 2023 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

Page 7 of 35

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

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, 2023.

The preparation of the Company’s consolidated financial statements requires management to make certain estimates and assumptions about future events. As future events and their effects cannot be fully determined with precision, actual results could differ significantly from estimates. Changes in estimates are reflected in the consolidated financial statements in the period in which the change in estimate occurs.

Restricted Cash

At March 31, 2024 and December 31, 2023, the Company had restricted cash of $2 million and $10 million, respectively. The 2024 amount is designated to collateralize certain letters of credit, while the 2023 amount was invested in an account designated for the purchase of like-kind exchange replacement assets under Section 1031 of the Internal Revenue Code and related IRS procedures (Section 1031). The Company was restricted from utilizing the 2023 cash for purposes other than the purchase of qualified assets for 180 days from receipt of the proceeds from the sale of the exchanged property. Any unused restricted cash at the end of the 180 days is transferred to unrestricted accounts of the Company and used for general corporate purposes.

The statements of cash flows reflect cash flow changes and balances for cash, cash equivalents and restricted cash on an aggregated basis. The following table reconciles cash, cash equivalents and restricted cash as reported on the consolidated balance sheets to the aggregated amounts presented on the consolidated statements of cash flows:


	March 31,		December 31,
	2024		2023
	(Dollars in Millions)
Cash and cash equivalents	$	2,648	$	1,272
Restricted cash		2		10
Total cash, cash equivalents and restricted cash presented in the consolidated statements of cash flows	$	2,650	$	1,282

Consolidated Comprehensive Earnings and Accumulated Other Comprehensive Loss

Consolidated comprehensive earnings consist of consolidated net earnings, adjustments for the funded status of pension and postretirement benefit plans and foreign currency translation adjustments, and are presented in the Company’s consolidated statements of earnings and comprehensive earnings.

Consolidated comprehensive earnings attributable to Martin Marietta are as follows:


	Three Months Ended
	March 31,
	2024		2023
	(Dollars in Millions)
Net earnings attributable to Martin Marietta	$	1,045	$	121
Other comprehensive earnings, net of tax		—		1
Consolidated comprehensive earnings attributable to Martin Marietta	$	1,045	$	122

Page 8 of 35

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Accumulated other comprehensive loss consists of unrecognized gains and losses related to the funded status of the pension and postretirement benefit plans and foreign currency translation adjustments and is presented on the Company’s consolidated balance sheets.

The components of the changes in accumulated other comprehensive loss, net of tax, are as follows:


	(Dollars in Millions)
	Pension and Postretirement Benefit Plans			Foreign Currency			Accumulated Other Comprehensive Loss
	Three Months Ended March 31, 2024
Balance at beginning of period	$	(48	)	$	(1	)	$	(49	)
Other comprehensive loss before reclassifications, net of tax		—			(1	)		(1	)
Amounts reclassified from accumulated other comprehensive loss, net of tax		1			—			1
Other comprehensive earnings (loss), net of tax		1			(1	)		—
Balance at end of period	$	(47	)	$	(2	)	$	(49	)

	Three Months Ended March 31, 2023
Balance at beginning of period	$	(36	)	$	(2	)	$	(38	)
Amounts reclassified from accumulated other comprehensive loss, net of tax		1			—			1
Other comprehensive earnings, net of tax		1			—			1
Balance at end of period	$	(35	)	$	(2	)	$	(37	)

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


	Pension and Postretirement Benefit Plans
	Three Months Ended
	March 31,
	2024			2023
	(Dollars in Millions)
Balance at beginning of period	$	54		$	50
Tax effect of other comprehensive earnings		(1	)		—
Balance at end of period	$	53		$	50

Page 9 of 35

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Reclassifications out of accumulated other comprehensive loss are as follows:


	Three Months Ended					Affected line items in the consolidated
	March 31,					statements of earnings
	2024			2023		and comprehensive earnings
	(Dollars in Millions)
Pension and postretirement benefit plans
Amortization of prior service cost		2			1	Other nonoperating income, net
Tax effect		(1	)		—	Income tax expense
Total	$	1			1

Earnings per Common Share

The numerator for basic and diluted earnings per common share is net earnings attributable to Martin Marietta. The denominator for basic earnings per common share is the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is computed assuming that the weighted-average number of common shares is increased by the conversion, using the treasury stock method, of awards to be issued to employees and nonemployee members of the Company’s Board of Directors under certain stock-based compensation arrangements if the conversion is dilutive. For the three months ended March 31, 2024 and 2023, the diluted per-share computations reflect the number of common shares outstanding including the number of additional shares that would have been outstanding if the potentially dilutive common shares had been issued.

The following table reconciles the denominator for basic and diluted earnings from continuing operations per common share:


	Three Months Ended
	March 31,
	2024		2023
	(In Millions)
Basic weighted-average common shares outstanding		61.8		62.1
Effect of dilutive employee and director awards		0.2		0.1
Diluted weighted-average common shares outstanding		62.0		62.2

Page 10 of 35

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

New Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker. The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This ASU requires companies to apply retrospectively to all prior periods presented in the financial statements. The ASU will impact the Company's disclosures, but will have no impacts to its results of operations, cash flows and financial condition.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid. ASU 2023-09 requires public entities to disclose, on annual basis, a tabular tax rate reconciliation using both percentages and currency amounts with specific categories, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. Additionally, all entities are required to disclose income taxes paid, net of refunds received, disaggregated by federal, state, local, and foreign taxes and by individual jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. The ASU also requires additional qualitative disclosures. ASU 2023-09 is effective prospectively for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted. The ASU will impact the Company's income tax disclosures, but not its results of operations, cash flows and financial condition.

Reclassifications

Certain reclassifications have been made in the Company's financial statements of the prior year to conform to the current-year presentation. The reclassifications had no impact on the Company’s previously reported results of operations, financial position or cash flows.

Business Combinations, Divestitures, Discontinued Operations and Assets and Liabilities Held for Sale

Business Combinations

On January 12, 2024, the Company acquired Albert Frei & Sons, Inc. (AFS), a leading aggregates producer in Colorado. This acquisition provides more than 60 years (at 2023 production levels) of high-quality, hard rock reserves to better serve new and existing customers and enhances the Company's aggregates platform in the high-growth Denver metropolitan area. The Company has recorded preliminary fair values of the assets acquired and liabilities assumed, which are subject to additional reviews, such as asset verification, that are not yet complete. Thus, these amounts are subject to change during the measurement period, which remains open as of March 31, 2024. The goodwill generated by the transaction is not deductible for income tax purposes. The acquisition is reported in the Company's West Group but is immaterial for pro-forma financial statement disclosures.

On February 11, 2024, the Company entered into a definitive agreement to acquire 20 active aggregates operations in Alabama, South Carolina, South Florida, Tennessee, and Virginia from affiliates of Blue Water Industries LLC (BWI Southeast) for $2.05 billion of cash on hand. The BWI Southeast acquisition complements Martin Marietta’s existing geographic footprint in the dynamic southeast region by allowing the Company to expand into new growth platforms in target markets including Nashville and Miami. The transaction closed on April 5, 2024 and the Company is in the process of determining the acquisition-date fair values of assets acquired and liabilities assumed.

Page 11 of 35

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Divestitures

On February 9, 2024, the Company completed the sale of its South Texas cement business and certain of its related ready mixed concrete operations to CRH Americas Materials, Inc., a subsidiary of CRH plc, for $2.10 billion in cash. Specifically, the divested facilities included the Hunter cement plant in New Braunfels, Texas, related cement distribution terminals and 20 ready mixed concrete plants that served the Austin and San Antonio region, all of which were classified as assets held for sale as of December 31, 2023. The divestiture provided additional balance sheet flexibility to redeploy net proceeds into pure-play aggregates acquisitions. The transaction resulted in a pretax gain of $1.3 billion, which is included in Other operating (income) expense, net, on the Company's consolidated statement of earnings and comprehensive earnings for the three months ended March 31, 2024 and is exclusive of expenses incurred due to the divestiture. The divested operations and the gain on divestiture are reported in the West Group.

Discontinued Operations

For the three months ended March 31, 2023, discontinued operations included the Company's Tehachapi, California cement plant, which was divested in October 2023, and the Stockton, California cement import terminal, which was divested in May 2023. There were no discontinued operations for the three months ended March 31, 2024.

Financial results for the Company's discontinued operations are as follows:


	Three Months Ended
	March 31, 2023
	(Dollars in Millions)
Total revenues	$	25

Pretax loss from discontinued operations	$	(17	)
Income tax benefit		(4	)
Loss from discontinued operations, net of income tax benefit	$	(13	)

Cash flow information for the Company's discontinued operations is as follows:


	Three Months Ended
	March 31, 2023
	(Dollars in Millions)
Net cash used for operating activities	$	(4	)
Net cash used for investing activities (capital expenditures)	$	(2	)

Page 12 of 35

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Assets and Liabilities Held for Sale

Assets and liabilities held for sale at March 31, 2024 included certain nonoperating land. At December 31, 2023, assets and liabilities held for sale also included the South Texas cement plant, related cement distribution terminals and 20 ready mixed concrete plants that were sold in February 2024.

Assets and liabilities held for sale are as follows:


	March 31, 2024		December 31, 2023
	Continuing Operations
	(Dollars in Millions)
Inventories, net	$	—	$	61
Investment land		18		18
Other assets		—		4
Property, plant and equipment		—		327
Intangible assets, excluding goodwill		—		122
Operating lease right-of-use assets		—		15
Goodwill		—		260
Total current assets held for sale	$	18	$	807

Lease obligations		—	$	(16	)
Asset retirement obligations		—		(2	)
Total current liabilities held for sale	$	—	$	(18	)


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)


Class		Outstanding as of April 25, 2024
Common Stock, $0.01 par value		61,640,190


	Page
Part I. Financial Information:

Item 1. Financial Statements

Consolidated Balance Sheets – March 31, 2024 and December 31, 2023		3

Consolidated Statements of Earnings and Comprehensive Earnings – Three Months Ended March 31, 2024 and 2023		4

Consolidated Statements of Cash Flows – Three Months Ended March 31, 2024 and 2023		5

Consolidated Statements of Total Equity – Three Months Ended March 31, 2024 and 2023		6

Notes to Consolidated Financial Statements		7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		22

Item 3. Quantitative and Qualitative Disclosures About Market Risk		32

Item 4. Controls and Procedures		32

Part II. Other Information:

Item 1. Legal Proceedings		33

Item 1A. Risk Factors		33

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		33

Item 4. Mine Safety Disclosures		33

Item 5. Other Information		33

Item 6. Exhibits		34

Signatures		35


	March 31,			December 31,
	2024			2023
	(In Millions, Except Share and Par Value Data)
ASSETS
Current Assets:
Cash and cash equivalents	$	2,648		$	1,272
Restricted cash		2			10
Accounts receivable, net		703			753
Inventories, net		1,077			989
Current assets held for sale		18			807
Other current assets		70			88
Total Current Assets		4,518			3,919

Property, plant and equipment		11,257			10,708
Allowances for depreciation, depletion and amortization		(4,657	)		(4,522	)
Net property, plant and equipment		6,600			6,186
Goodwill		3,479			3,389
Other intangibles, net		702			698
Operating lease right-of-use assets, net		382			372
Other noncurrent assets		559			561
Total Assets	$	16,240		$	15,125

LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	266		$	343
Accrued salaries, benefits and payroll taxes		37			102
Accrued income taxes		457			6
Accrued other taxes		37			47
Accrued interest		40			41
Current maturities of long-term debt		400			400
Current operating lease liabilities		52			53
Current liabilities held for sale		—			18
Other current liabilities		140			160
Total Current Liabilities		1,429			1,170

Long-term debt		3,947			3,946
Deferred income taxes, net		865			874
Noncurrent operating lease liabilities		344			327
Noncurrent asset retirement obligations		388			383
Other noncurrent liabilities		390			389
Total Liabilities		7,363			7,089

Equity:
Common stock, par value $0.01 per share (61,639,965 shares and 61,821,421 shares outstanding at March 31, 2024 and December 31, 2023, respectively)		1			1
Preferred stock, par value $0.01 per share		—			—
Additional paid-in capital		3,512			3,519
Accumulated other comprehensive loss		(49	)		(49	)
Retained earnings		5,411			4,563
Total Shareholders' Equity		8,875			8,034
Noncontrolling interests		2			2
Total Equity		8,877			8,036
Total Liabilities and Equity	$	16,240		$	15,125


	Three Months Ended
	March 31,
	2024			2023
	(In Millions, Except Per Share Data)
Total Revenues	$	1,251		$	1,354
Total cost of revenues		979			1,051

Gross Profit		272			303

Selling, general and administrative expenses		118			104
Acquisition, divestiture and integration expenses		20			1
Other operating (income) expense, net		(1,287	)		2
Earnings from Operations		1,421			196

Interest expense		40			42
Other nonoperating income, net		(33	)		(17	)
Earnings from continuing operations before income tax expense		1,414			171
Income tax expense		368			36
Earnings from continuing operations		1,046			135
Loss from discontinued operations, net of income tax benefit		—			(13	)
Consolidated net earnings		1,046			122
Less: Net earnings attributable to noncontrolling interests		1			1
Net Earnings Attributable to Martin Marietta	$	1,045		$	121

Consolidated Comprehensive Earnings (See Note 1):
Earnings attributable to Martin Marietta	$	1,045		$	122
Earnings attributable to noncontrolling interests		1			1
	$	1,046		$	123
Net Earnings (Loss) Attributable to Martin Marietta
Per Common Share:
Basic earnings per share from continuing operations attributable to common shareholders	$	16.92		$	2.17
Basic loss per share from discontinued operations attributable to common shareholders		—			(0.21	)
	$	16.92		$	1.96

Diluted earnings per share from continuing operations attributable to common shareholders	$	16.87		$	2.16
Diluted loss per share from discontinued operations attributable to common shareholders		—			(0.21	)
	$	16.87		$	1.95

Weighted-Average Common Shares Outstanding:
Basic		61.8			62.1
Diluted		62.0			62.2


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


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


(In Millions, Except Share and 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 December 31, 2022		62,102,353		$	1	$	3,489		$	(38	)	$	3,719		$	7,171		$	2		$	7,173
Consolidated net earnings		—			—		—			—			121			121			1			122
Other comprehensive earnings, net of tax		—			—		—			1			—			1			—			1
Dividends declared ($0.66 per common share)		—			—		—			—			(41	)		(41	)		—			(41	)
Issuances of common stock for stock award plans		69,374			—		1			—			—			1			—			1
Shares withheld for employees' income tax obligations		—			—		(17	)		—			—			(17	)		—			(17	)
Repurchases of common stock		(203,770	)		—		—			—			(75	)		(75	)		—			(75	)
Stock-based compensation expense		—			—		14			—			—			14			—			14
Balance at March 31, 2023		61,967,957		$	1	$	3,487		$	(37	)	$	3,724		$	7,175		$	3		$	7,178

Balance at December 31, 2023		61,821,421		$	1	$	3,519		$	(49	)	$	4,563		$	8,034		$	2		$	8,036
Consolidated net earnings		—			—		—			—			1,045			1,045			1			1,046
Dividends declared ($0.74 per common share)		—			—		—			—			(46	)		(46	)		—			(46	)
Issuances of common stock for stock award plans		74,145			—		5			—			—			5			—			5
Shares withheld for employees' income tax obligations		—			—		(27	)		—			—			(27	)		—			(27	)
Repurchases of common stock		(255,601	)		—		—			—			(151	)		(151	)		—			(151	)
Stock-based compensation expense		—			—		15			—			—			15			—			15
Distributions to owners of noncontrolling interest		—			—		—			—			—			—			(1	)		(1	)
Balance at March 31, 2024		61,639,965		$	1	$	3,512		$	(49	)	$	5,411		$	8,875		$	2		$	8,877