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, 2011, filed with the Securities and Exchange Commission on February 29, 2012. 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 and nine months ended September 30, 2012 are not indicative of the results expected for other interim periods or the full year. The balance sheet at December 31, 2011 has been derived from the audited financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles for complete financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2011.

Warranties

The Corporation’s construction contracts contain warranty provisions covering defects in equipment, materials, design or workmanship that generally run from nine months to one year after project completion. Because of the nature of its projects, including contract owner inspections of the work both during construction and prior to acceptance, the Corporation has not experienced material warranty costs for these short-term warranties and therefore does not believe an accrual for these costs is necessary. Certain construction contracts carry longer warranty periods, ranging from two to ten years for which the Corporation has accrued an estimate of warranty cost. The warranty cost is estimated based on experience with the type of work and any known risks relative to the project and was not material for the three or nine months ended September 30, 2012 and 2011.

Consolidated Comprehensive Earnings/Loss and Accumulated Other Comprehensive Loss

Consolidated comprehensive earnings/loss for the Corporation consist of consolidated net earnings or loss; adjustments for the funded status of pension and postretirement benefit plans; foreign currency translation adjustments; and the amortization of the value of terminated forward starting interest rate swap agreements into interest expense.

Effective January 1, 2012, as required by recent accounting guidance, the Corporation changed its presentation of consolidated comprehensive earnings/loss. The Corporation no longer reports total consolidated comprehensive earnings/loss and related components of other comprehensive earnings/loss in its consolidated statement of total equity. Rather, the Corporation presents total consolidated comprehensive earnings/loss in its consolidated statements of earnings and comprehensive earnings for interim periods and in separate but consecutive consolidated statements of comprehensive earnings for annual periods. Prior-year information has been recast to conform to this presentation approach.

Comprehensive earnings attributable to Martin Marietta Materials, Inc. consist of the following:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2012		2011			2012		2011
	(Dollars in Thousands)
Net earnings attributable to Martin Marietta Materials, Inc.	$	62,922	$	49,156		$	62,940	$	67,541
Other comprehensive earnings (loss), net of tax		3,160		(240	)		6,410		4,100

Consolidated comprehensive earnings attributable to Martin Marietta Materials, Inc.	$	66,082	$	48,916		$	69,350	$	71,641

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


	Three Months Ended September 30, 2012
	(Dollars in Thousands)
	Pension and Postretirement Benefit Plans			Foreign Currency		Unamortized Value of Terminated Forward Starting Interest Rate Swap			Accumulated Other Comprehensive Loss
Balance at beginning of period	$	(81,407	)	$	5,222	$	(4,455	)	$	(80,640	)
Other comprehensive earnings, net of tax		1,568			1,435		157			3,160

Balance at end of period	$	(79,839	)	$	6,657	$	(4,298	)	$	(77,480	)


	Nine Months Ended September 30, 2012
	(Dollars in Thousands)
	Pension and Postretirement Benefit Plans			Foreign Currency		Unamortized Value of Terminated Forward Starting Interest Rate Swap			Accumulated Other Comprehensive Loss
Balance at beginning of period	$	(84,204	)	$	5,076	$	(4,762	)	$	(83,890	)
Other comprehensive earnings, net of tax		4,365			1,581		464			6,410

Balance at end of period	$	(79,839	)	$	6,657	$	(4,298	)	$	(77,480	)

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


	Three Months Ended September 30, 2012
	(Dollars in Thousands)
	Pension and Postretirement Benefit Plans			Unamortized Value of Terminated Forward Starting Interest Rate Swap			Net Noncurrent Deferred Tax Assets
Balance at beginning of period	$	53,328		$	2,915		$	56,243
Tax effect of other comprehensive earnings		(1,026	)		(103	)		(1,129	)

Balance at end of period	$	52,302		$	2,812		$	55,114


	Nine Months Ended September 30, 2012
	(Dollars in Thousands)
	Pension and Postretirement Benefit Plans			Unamortized Value of Terminated Forward Starting Interest Rate Swap			Net Noncurrent Deferred Tax Assets
Balance at beginning of period	$	55,161		$	3,116		$	58,277
Tax effect of other comprehensive earnings		(2,859	)		(304	)		(3,163	)

Balance at end of period	$	52,302		$	2,812		$	55,114

Comprehensive earnings attributable to noncontrolling interests consist of net earnings and adjustments for the funding status of pension and postretirement benefit plans as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	(Dollars in Thousands)
Net earnings attributable to noncontrolling interests	$	747	$	1,176	$	863	$	949
Other comprehensive earnings, net of tax		3		1		10		3

Consolidated comprehensive earnings attributable to noncontrolling interests	$	750	$	1,177	$	873	$	952

Earnings per Common Share

The numerator for basic and diluted earnings per common share is net earnings attributable to Martin Marietta Materials, Inc., reduced by dividends and undistributed earnings attributable to the Corporation’s unvested restricted stock awards and incentive stock awards. 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 are 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 Corporation’s Board of Directors under certain stock-based compensation arrangements if the conversion is dilutive. The diluted per-share computations reflect a change in the number of common shares outstanding to include the number of additional shares that would have been outstanding if the potentially dilutive common shares had been issued.

The following table reconciles the numerator and denominator for basic and diluted earnings per common share:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(In Thousands)
Net earnings from continuing operations attributable to Martin Marietta Materials, Inc.	$	63,040		$	49,160		$	63,335		$	69,953
Less: Distributed and undistributed earnings attributable to unvested awards		336			378			386			557

Basic and diluted net earnings available to common shareholders from continuing operations attributable to Martin Marietta Materials, Inc.		62,704			48,782			62,949			69,396
Basic and diluted net loss available to common shareholders from discontinued operations		(118	)		(4	)		(395	)		(2,412	)

Basic and diluted net earnings available to common shareholders attributable to Martin Marietta Materials, Inc.	$	62,586		$	48,778		$	62,554		$	66,984

Basic weighted-average common shares outstanding		45,860			45,690			45,792			45,634
Effect of dilutive employee and director awards		132			109			137			149

Diluted weighted-average common shares outstanding		45,992			45,799			45,929			45,783