MARTIN MARIETTA MATERIALS INC

Previous wording

Martin Marietta Materials, Inc. (the Company or Martin Marietta) is a natural resource-based building materials company. As of September 30, 2024, the Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 380 quarries, mines and distribution yards in 28 states, Canada and The Bahamas. Martin Marietta also provides cement and downstream products, namely, ready mixed concrete, asphalt and paving services, in certain vertically-integrated structured markets where the Company 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.

Current wording

Martin Marietta Materials, Inc. (the Company or Martin Marietta) is a natural resource-based building materials company. As of March 31, 2025, the Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 390 quarries, mines and distribution yards in 28 states, Canada and The Bahamas. Martin Marietta also provides cement and downstream products, namely, ready mixed concrete, asphalt and paving services, in certain vertically-integrated structured markets where the Company 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.

Previous wording

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

Current wording

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

Previous wording

The Company outlined its critical accounting policies in its Annual Report on Form 10-K for the year ended December 31, 2023. There were no changes to the Company’s critical accounting policies during the nine months ended September 30, 2024.

Current wording

The Company outlined its critical accounting policies in its Annual Report on Form 10-K for the year ended December 31, 2024. There were no changes to the Company’s critical accounting policies during the three months ended March 31, 2025.

Previous wording

Earnings from continuing operations before interest; income taxes; depreciation, depletion and amortization; earnings/loss from nonconsolidated equity affiliates; acquisition, divestiture and integration expenses; the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting (the Inventory Markup); nonrecurring gain on divestiture; and noncash asset and portfolio rationalization charge, or Adjusted EBITDA, is an indicator used by the Company and investors to evaluate the Company’s operating performance from period to period. Effective January 1, 2024, the Company has elected to add back, for purposes of its Adjusted EBITDA calculation, acquisition, divestiture and integration expenses and the Inventory Markup only for transactions with consideration of $2.0 billion or more and expected acquisition, divestiture and integration expenses of at least $15 million. For 2024, this includes the acquisition of 20 active aggregates operations from affiliates of Blue Water Industries LLC (BWI Southeast) and the divestiture of the South Texas cement plant and related ready mixed concrete operations (the Divestiture).

Current wording

Earnings before interest; income taxes; depreciation, depletion and amortization; earnings/loss from nonconsolidated equity affiliates; acquisition, divestiture and integration expenses; the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting (the Inventory Markup); nonrecurring gain on divestiture; and noncash asset and portfolio rationalization charge, or Adjusted EBITDA, is an indicator used by the Company and investors to evaluate the Company’s operating performance from period to period. The Company has elected to add back, for purposes of its Adjusted EBITDA calculation, acquisition, divestiture and integration expenses and the Inventory Markup only for transactions with consideration of $2.0 billion or more and expected acquisition, divestiture and integration expenses of at least $15 million.

Previous wording

The following table presents a reconciliation of net earnings from continuing operations attributable to Martin Marietta to Adjusted EBITDA:

Current wording

The following table presents a reconciliation of net earnings attributable to Martin Marietta to Adjusted EBITDA:

Previous wording

The following tables present revenues and gross profit (loss) for the Company and its reportable segments by product line for continuing operations for the three months ended September 30, 2024 and 2023. Gross profit (loss) is stated as a percentage of revenues of the Company, the relevant segment or the product line, as the case may be.

Current wording

The following tables present revenues and gross profit (loss) for the Company and its reportable segments by product line for the three months ended March 31, 2025 and 2024. Gross profit (loss) is stated as a percentage of revenues of the Company, the relevant segment or the product line, as the case may be.

Previous wording

Aggregates shipments to the infrastructure market decreased 4% quarter-over-quarter, as contributions from acquired operations were more than offset by weather-driven project delays. The infrastructure market accounted for 39% of third-quarter aggregates shipments.

Current wording

Aggregates shipments to the infrastructure market increased 3% quarter-over-quarter as contributions from operations acquired in 2024 more than offset weather-driven project delays. The infrastructure market accounted for 33% of first-quarter aggregates shipments.

Previous wording

Aggregates shipments to the nonresidential market decreased 4%, driven by inclement weather in many of the Company's markets and declining warehouse construction, partially offset by shipments at acquired operations. The nonresidential market represented 33% of third-quarter aggregates shipments.

Current wording

Aggregates shipments to the nonresidential market increased 6%, reflecting contributions from acquired operations that more than offset declining warehouse construction and severe winter weather in many of the Company's markets. The nonresidential market represented 36% of first-quarter aggregates shipments.

Previous wording

Aggregates shipments to the residential market decreased 2%, resulting from inclement weather and general softening in single-family housing resulting from affordability concerns. The residential market accounted for 23% of third-quarter aggregates shipments.

Current wording

Aggregates shipments to the residential market increased 10%, driven by contributions from acquired operations. The Company continues to experience general softening in single-family housing within some markets resulting from affordability headwinds. The residential market accounted for 24% of first-quarter aggregates shipments.

Previous wording

The ChemRock/Rail market accounted for the remaining 5% of third-quarter aggregates shipments. Volumes to this end use market decreased 15% quarter-over-quarter due to inclement weather and project delays.

Current wording

The ChemRock/Rail market accounted for the remaining 7% of first-quarter aggregates shipments. Volumes to this end use market increased 20% quarter-over-quarter due to robust agricultural lime and ballast shipments.

Previous wording

Consolidated SG&A for the third quarter of 2024 was 5.6% of revenues compared with 5.4% in the prior-year quarter.

Current wording

Consolidated SG&A for the first quarter of 2025 was 9.6% of revenues compared with 9.5% in the prior-year quarter.

Previous wording

For the nine months ended September 30, consolidated other operating income, net, was $1.3 billion in 2024 and $16 million in 2023. The 2024 amount included a $1.3 billion pretax gain on the Divestiture, which was partially offset by a $50 million pretax, noncash asset and portfolio rationalization charge (the Rationalization Charge; see Note 13 to the unaudited consolidated financial statements).

Current wording

For the three months ended March 31, consolidated other operating expense (income), net, was expense of $9 million in 2025 and income of $1.3 billion in 2024. The 2024 amount included a $1.3 billion pretax gain on the divestiture of the South Texas cement business and certain of its related ready mixed concrete operations (the Divestiture; see Note 2 to the unaudited consolidated financial statements), which was partially offset by a $49 million pretax, noncash asset and portfolio rationalization charge (the Rationalization Charge; see Note 13 to the unaudited consolidated financial statements).

Previous wording

Earnings from operations for the nine months ended September 30 were $2.3 billion in 2024 compared with $1.2 billion in 2023. The 2024 amount included a $1.3 billion pretax gain on the Divestiture.

Current wording

Earnings from operations for the three months ended March 31 were $194 million in 2025 compared with $1.4 billion in 2024.

Previous wording

For the nine months ended September 30, 2024 and 2023, the effective income tax rates for continuing operations were 24.1% and 20.6%, respectively. The higher 2024 effective income tax rate versus 2023 was driven by the Divestiture, which reflected the write-off of certain nondeductible goodwill and was treated as a discrete tax event.

Current wording

For the three months ended March 31, 2025 and 2024, the effective income tax rates were 21.3% and 26.0%, respectively. The higher 2024 effective income tax rate versus 2025 was driven by the Divestiture, which reflected the write-off of certain nondeductible goodwill and was treated as a discrete tax event.

Previous wording

Net earnings from continuing operations attributable to Martin Marietta were $1.7 billion, or $27.60 per diluted share, in 2024 compared with $912 million, or $14.69 per diluted share, in 2023. 2024 included an after-tax gain of $976 million, or $15.83 per diluted share, on the Divestiture, an after-tax loss of $37 million, or $0.61 per diluted share, for the Rationalization Charge, an after-tax charge of $15 million, or $0.23 per diluted share, for the Inventory Markup and after-tax acquisition, divestiture and integration expenses of $31 million, or $0.50 per diluted share, related to the Blue Water Industries LLC acquisition and the Divestiture.

Current wording

For the three months ended March 31, net earnings attributable to Martin Marietta were $116 million, or $1.90 per diluted share, in 2025 compared with $1.0 billion, or $16.87 per diluted share, in 2024. First-quarter 2024 included an after-tax gain of $976 million, or $15.75 per diluted share, on the Divestiture and an after-tax loss of $37 million, or $0.59 per diluted share, for the Rationalization Charge. Earnings per diluted share for 2024 also included acquisition, divestiture and integration expenses of $0.22 per diluted share.

Previous wording

Cash provided by operating activities for the nine months ended September 30, 2024 and 2023 was $773 million and $973 million, respectively, with the year-over-year decrease driven largely by significantly higher income tax payments in 2024 resulting from the Divestiture. Operating cash flow is substantially derived from consolidated net earnings before deducting depreciation, depletion and amortization, and changes in working capital requirements.

Current wording

Cash provided by operating activities for the three months ended March 31, 2025 and 2024 was $218 million and $172 million, respectively. Operating cash flow is substantially derived from consolidated net earnings before deducting depreciation, depletion and amortization, changes in working capital requirements, and, in 2024, the nonrecurring gain on divestiture.

Previous wording

The Internal Revenue Service recently announced disaster tax relief for North Carolina businesses affected by Hurricanes Debby and Helene. This relief allows the Company to defer estimated federal and certain state income, payroll and excise tax payments for the period from August 2024 through April 2025. The deferred obligation will be due May 1, 2025. The Company deferred income tax payments of $123 million under this provision as of September 30, 2024, which benefited operating cash flow for the nine months ended September 30, 2024.

Current wording

The Internal Revenue Service has provided certain disaster tax relief for North Carolina businesses affected by Hurricanes Debby and Helene, which allows the Company to defer estimated federal and certain state income, payroll and excise tax payments for the period from August 2024 through September 2025. The deferred obligation will be due September 25, 2025. The Company deferred income tax payments of $102 million under this provision as of March 31, 2025.

Previous wording

During the nine months ended September 30, 2024 and 2023, the Company paid $622 million and $464 million, respectively, for additions to property, plant and equipment. Included in the 2024 additions is the purchase of land and aggregates reserves.

Current wording

During the three months ended March 31, 2025 and 2024, the Company paid $233 million and $200 million, respectively, for additions to property, plant and equipment.

Previous wording

During the first quarter of 2024, the Company received pretax cash proceeds of $2.1 billion from the Divestiture. On April 5, 2024, the Company used $2.05 billion of cash on hand to fund the acquisition of 20 active aggregates operations in Alabama, South Carolina, South Florida, Tennessee, and Virginia from affiliates of Blue Water Industries LLC. Subsequently, the Company used available liquidity to fund the South Florida aggregates acquisition on October 25, 2024.

Current wording

During the first quarter of 2024, the Company received pretax cash proceeds of $2.1 billion from the Divestiture. On April 5, 2024, the Company used $2.05 billion of cash on hand to fund the acquisition of 20 active aggregates operations in Alabama, South Carolina, South Florida, Tennessee, and Virginia from affiliates of Blue Water Industries LLC.

Previous wording

The Company can repurchase its common stock through open-market purchases pursuant to authority granted by its Board of Directors or through private transactions at such prices and upon such terms as the Chief Executive Officer deems appropriate. During the first nine months of 2024, the Company repurchased 785,758 shares of common stock at an average price of $572.70 and an aggregate cost of $450 million. At September 30, 2024, 11.9 million shares of common stock remain under the Company’s repurchase authorization.

Current wording

The Company can repurchase its common stock through open-market purchases pursuant to authority granted by its Board of Directors or through private transactions at such prices and upon such terms as the Chief Executive Officer deems appropriate. During the first three months of 2025, the Company repurchased 910,831 shares of common stock at an average price of $494.04 and an aggregate cost of $450 million. At March 31, 2025, 11.0 million shares of common stock remain under the Company’s repurchase authorization.

Previous wording

The Company has an $800 million five-year senior unsecured revolving facility (the Revolving Facility), which matures in December 2028. The Revolving Facility requires the Company’s ratio of consolidated net debt-to-consolidated EBITDA, as defined, for the trailing-twelve-month period (the Ratio) to not exceed 3.50 times as of the end of any fiscal quarter, provided that the Company may exclude from the Ratio debt incurred in connection with certain acquisitions during the quarter or the three preceding quarters so long as the Ratio calculated without such exclusion does not exceed 4.00 times. Additionally, if there are no amounts outstanding under the Revolving Facility or the Trade Receivable Facility, consolidated debt, including debt for which the Company is a guarantor, shall be reduced in an amount equal to the lesser of $500 million or the sum of the Company’s unrestricted cash and temporary investments, for purposes of the covenant calculation. The Company was in compliance with the Ratio at September 30, 2024.

Current wording

The Company has an $800 million five-year senior unsecured revolving facility (the Revolving Facility), which matures in December 2029. The Revolving Facility requires the Company’s ratio of consolidated net debt-to-consolidated EBITDA, as defined, for the trailing-twelve-month period (the Ratio) to not exceed 3.50 times as of the end of any fiscal quarter, provided that the Company may exclude from the Ratio debt incurred in connection with certain acquisitions during the quarter or the three preceding quarters so long as the Ratio calculated without such exclusion does not exceed 4.00 times. Additionally, if there are no amounts outstanding under the Revolving Facility and the Trade Receivable Facility, consolidated debt, including debt for which the Company is a guarantor, shall be reduced in an amount equal to the lesser of $500 million or the sum of the Company’s unrestricted cash and temporary investments, for purposes of the covenant calculation. The Company was in compliance with the Ratio at March 31, 2025. In the event of a default on the Ratio, the lenders can terminate the Revolving Facility and Trade Receivable Facility and declare any outstanding balances as immediately due.

Previous wording

Cash on hand, along with the Company’s projected internal cash flows and availability of financing resources, including its access to debt and equity capital markets, is expected to continue to be sufficient to provide the capital resources necessary to support anticipated operating needs, cover debt service requirements, address near-term debt maturities, meet capital expenditures and discretionary investment needs, fund certain acquisition opportunities that may arise, allow for payment of dividends for the foreseeable future and allow the repurchase of shares of the Company’s common stock. At September 30, 2024, there was $95 million outstanding under the Trade Receivable Facility and no amounts outstanding under the Revolving Facility, and the Company had $1.10 billion of unused borrowing capacity under its Revolving Facility and Trade Receivable Facility, subject to complying with the related leverage covenant. As of October

Current wording

Cash on hand, along with the Company’s projected internal cash flows and availability of financing resources, including its access to debt and equity capital markets, is expected to continue to be sufficient to provide the capital resources necessary to support anticipated operating needs, cover debt service requirements, address near-term debt maturities, meet capital expenditures and discretionary investment needs, fund certain acquisition opportunities that may arise, allow for payment of dividends for the foreseeable future and allow the repurchase of shares of the Company’s common stock. At March 31, 2025, there were no amounts outstanding under the Trade Receivable Facility or under the Revolving Facility, and the Company had $1.2 billion of unused borrowing capacity under its Revolving Facility and Trade Receivable Facility, subject to complying with the related leverage covenant. Historically, the Company has successfully extended the maturity dates of these credit facilities.

Previous wording

the impact of the U.S. elections on the amount available under and timing of federal and state infrastructure spending;

Current wording

the impact of the new Administration on the amount available under and timing of federal and state infrastructure spending;

Previous wording

the level and timing of federal, state or local transportation or infrastructure or public projects funding, most particularly in Texas, North Carolina, Colorado, California, Georgia, Minnesota, Arizona, Iowa, Florida and Indiana;

Current wording

the level and timing of federal, state or local transportation or infrastructure or public projects funding and any issues arising from such federal and state budgets, most particularly in Texas, North Carolina, Colorado, California, Georgia, Florida, Minnesota, Arizona, South Carolina and Iowa;

Previous wording

a decline in energy-related construction activity resulting from a sustained period of low global oil prices or changes in oil production patterns or capital spending in response to such a decline, particularly in Texas and West Virginia;

Current wording

a decline in energy-related construction activity resulting from a sustained period of low global oil prices or changes in oil production patterns or capital spending in response to such a decline, particularly in Texas;

Previous wording

unfavorable weather conditions, particularly Atlantic Ocean, Pacific Ocean and Gulf of Mexico storm and hurricane activity, wildfires, the late start to spring or the early onset of winter and the impact of a drought, excessive rainfall or extreme temperatures in the markets served by the Company, any of which can significantly affect production schedules, volumes, product and/or geographic mix and profitability;

Current wording

unfavorable weather conditions, particularly Atlantic Ocean, Pacific Ocean and Gulf Coast storm and hurricane activity, wildfires, the late start to spring or the early onset of winter and the impact of a drought, excessive rainfall or extreme temperatures in the markets served by the Company, any of which can significantly affect production schedules, volumes, product and/or geographic mix and profitability;

Previous wording

the potential negative impacts of new waves of COVID-19 or its variants, or any other outbreak of diseases, epidemic or pandemic, or similar public health threat, or fear of such event and its related economic or societal response, including any impact on the Company's suppliers, customers, or other business partners as well as on its employees;

Current wording

the potential negative impacts of outbreak of diseases, epidemic or pandemic, or similar public health threat, or fear of such event, and its related economic or societal response, including any impact on the Company's suppliers, customers or other business partners as well as on its employees;

Previous wording

increasing governmental regulation, including environmental laws and climate change regulations at the federal and state levels;

Current wording

Governmental regulation, including environmental laws and climate change regulations at both the state and federal levels;

Previous wording

transportation availability or a sustained reduction in capital investment by the railroads, notably the availability of railcars, locomotive power and the condition of rail infrastructure to move trains to supply the Company’s Texas, Colorado, Florida, Carolinas and Gulf Coast markets, including the movement of essential dolomitic lime for magnesia chemicals to the Company’s plant in Manistee, Michigan and its customers;

Current wording

transportation availability or a sustained reduction in capital investment by the railroads, notably the availability of railcars, locomotive power and the condition of rail infrastructure to move trains to supply the Company’s Texas, Southeast and Gulf Coast markets, including the movement of essential dolomitic lime for magnesia chemicals to the Company’s plant in Manistee, Michigan and its customers;

Previous wording

potential impact on costs, supply chain, oil and gas prices, or other matters relating to geopolitical conflicts, including the war between Russia and Ukraine, the war in Israel and related conflict in the Middle East and the conflict between China and Taiwan;

Current wording

potential impact on costs, supply chain, oil and gas prices, or other matters relating to geopolitical conflicts, including the war between Russia and Ukraine, the war in Israel and related conflict in the Middle East and any potential conflict between China and Taiwan;

Previous wording

trade disputes with one or more nations impacting the U.S. economy, including the impact of tariffs on the steel industry;

Current wording

trade disputes with one or more nations impacting the U.S. economy, including the impact of tariffs;

Previous wording

the possibility that the expected synergies from acquisitions will not be realized or will not be realized within the expected time period, including achieving anticipated profitability to maintain compliance with the Company’s leverage ratio debt covenant;

Current wording

the possibility that the expected synergies from acquisitions will not be realized or will not be realized within the expected time period, including achieving anticipated profitability to maintain compliance with the Company’s leverage ratio debt covenants;

Previous wording

the strategic benefits, outlook, performance and opportunities expected as a result of acquisitions and portfolio optimization;

Current wording

the strategic benefits, outlook, performance and opportunities expected as a result of acquisitions and portfolio optimization will not be realized;

Previous wording

violation of the Company’s debt covenant if price and/or volumes return to previous levels of instability;

Current wording

violation of the Company’s debt covenants if price and/or volumes return to previous levels of instability;