MARTIN MARIETTA MATERIALS INC

The Company is engaged in certain legal and administrative proceedings incidental to its normal business activities, including proceedings relating to environmental matters. The Company considers various factors in assessing the probable outcome of each matter, including but not limited to the nature of existing legal proceedings and claims, the asserted or possible damages, the jurisdiction and venue of the case and whether it is a jury trial, the progress of the case, existing law and precedent, the opinions or views of legal counsel and other advisers, the Company’s experience in similar cases and the experience of other companies, the facts available to the Company at the time of assessment, and how the Company intends to respond to the proceeding or claim. The Company’s assessment of these factors may change over time as proceedings or claims progress. The Company believes the probability is remote that the outcome of any currently pending legal or administrative proceeding will result in a material loss to the Company's financial condition, results of operations or cash flows, as a whole, based on currently available facts.

Letters of Credit

In the normal course of business, the Company provides certain third parties with standby letter of credit agreements guaranteeing its payment for certain insurance claims, contract performance and permit requirements. At September 30, 2025, the Company was contingently liable for $37 million in letters of credit.

Segments

The Building Materials business is comprised offour divisions that represent individual operating segments. These operating segments are consolidated intotwo reportable segments, the East Group and the West Group, for financial reporting purposes, as they meet the aggregation criteria. The Specialties business represents an individual operating and reportable segment.

The Company’s Chief Operating Decision Maker (CODM) is the Chair, President and Chief Executive Officer. The CODM reviews results by reportable segment on a quarterly basis and allocates resources to achieve the Company’s strategic objectives based on an evaluation of each reportable segment’s performance. This evaluation is largely based on segment earnings from operations, as management believes this is the best metric of segment profitability and operating performance. Segment earnings from operations is also a measure in the determination of incentive compensation targets and awards. Segment earnings from operations includes revenues less cost of revenues; selling, general and administrative expenses; other operating income and expenses, net; and exclude interest income and expense; other nonoperating income and expenses, net; and income tax expense.

The significant expense categories shown below align with the segment-level information regularly provided to the CODM. Other costs of revenues for each reportable segment mainly include repairs and maintenance, contract services, supplies and royalties.

Corporate loss from operations primarily includes depreciation and amortization; expenses for corporate administrative functions; acquisition, divestiture and integration expenses; and other nonrecurring income and expenses not attributable to operations of the Company's operating segments.

Earnings from operations for the West Group for the nine months ended September 30, 2024 included a $1.3 billion gain and $16 million in transaction expenses on the divestiture of the South Texas cement business and certain of its related ready mixed concrete operations (see Note 2) and anoncash asset and portfolio rationalization charge of $50 million (see Note 13).

The following tables display selected financial data for the Company’s reportable segments. Revenues, as presented on the consolidated statements of earnings and comprehensive earnings, reflect the elimination of intersegment revenues, which represent sales from one segment to another segment and are immaterial. Revenues and earnings (loss) from operations reflect continuing operations only. Income tax expense is not allocated to the Company's reportable segments.

Assets employed by segment include assets directly identified with those operations. Corporate assets consist primarily of cash and cash equivalents; property, plant and equipment for corporate operations; and other assets not directly identifiable with a reportable segment.

The following tables display property additions for the Company’s reportable segments.

Revenues and Gross Profit

The following tables, which are reconciled to consolidated amounts and reflect continuing operations only, provide revenues and gross profit (loss) by line of business: Building Materials (further divided by product line) and Specialties. Effective September 30, 2025, the Company combined the cement and ready mixed concrete and the asphalt and paving services product lines (hereinafter, other building materials). The change was driven by the reduced significance of each of these product lines relative to consolidated revenues from continuing operations and consolidated income from continuing operating results as a result of the pending divestiture of the Company's Midlothian cement plant, related cement terminals and Texas ready mixed concrete plants (see Note 2) and associated reclassification of these revenues and income to discontinued operations for all periods presented. Interproduct revenues represent sales from the aggregates product line to the other building materials product line.

The above information for 2024 has been reclassified to conform to the current-year presentation. For the three months ended September 30, 2024, the cement and ready mixed concrete product line reported revenues of $296 million and gross profit of $89 million (of which, $247 million and $86 million, respectively, are now classified as discontinued operations) and the asphalt and paving services product line reported revenues of $343 million and gross profit of $61 million. For thenine months ended September 30, 2024, the cement and ready mixed concrete product line reported revenues of $822 million and gross profit of $192 million (of which, $655 million and $177 million, respectively, are now classified as discontinued operations) and the asphalt and paving services product line reported revenues of $647 million and gross profit of $77 million.

Performance Obligations. Performance obligations are contractual promises to transfer or provide a distinct good or service for a stated price. The Company’s product sales agreements are single-performance obligations that are satisfied at a point in time. Performance obligations within paving service agreements are satisfied over time, primarily ranging fromone day totwo years. Customer payments for the paving operations are based on a contractual billing schedule and are typically "paid-when-paid", meaning the Company is paid once the customer is paid.

Future revenues from unsatisfied performance obligations at September 30, 2025 and 2024 were $225 million and $322 million, respectively, where the remaining periods to complete these obligations ranged from one month to 27 months andone month to 21 months, respectively.

Service Revenues. Service revenues were $130 million and $164 million for thethree months ended September 30, 2025 and 2024, respectively, and reported in the West Group. Service revenues for the nine months ended September 30, 2025 and 2024 were $267 million and $307 million, respectively. Service revenues include paving services in California through its April 2025 divestiture date and Colorado.

Supplemental Cash Flow Information

Noncash investing and financing activities are as follows:

Supplemental disclosures of cash flow information are as follows:

Other Operating (Expense) Income, Net

Other operating income, net, is comprised generally of gains and losses on divestitures and the sale of assets; asset and portfolio rationalization charges; recoveries and losses related to certain customer accounts receivable; recoveries and losses on the resolution of contingency accruals; rental, royalty and services income; and accretion expense and depreciation expense related to asset retirement obligations. For the nine months ended September 30, 2024, other operating income, net, 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, which was partially offset by a $50 million pretax, noncash asset and portfolio rationalization charge.

The noncash asset and portfolio rationalization charge for the nine months ended September 30, 2024 relates to the Company's decision to discontinue usage of certain long-haul distribution facilities to transport aggregates products into Colorado as the Albert Frei & Sons, Inc. acquisition completed in January 2024 provides more economical, local aggregates supply. This charge, which is reported in the West Group, reflects the Company's evaluation of the recoverability of certain long-lived assets, including property, plant and equipment and operating lease right-of-use assets, for the cessation of these railroad operations.