Martin Marietta Materials (MLM) 10-K risk factor changes: FY2019 vs FY2018

[removed: _Unexpected] [added: Unexpected] equipment failures, catastrophic events and scheduled maintenance may lead to production curtailments or [removed: shutdowns._][added: shutdowns.]

In [removed: 2018,] [added: 2019,] the cement product line incurred shutdown costs of [removed: $17.3] [added: $26.3] million during the year.

In [removed: 2018,] [added: 2019,] the Magnesia Specialties business incurred shutdown costs of [removed: $5.8] [added: $4.4] million during the year.

[removed: _Our] [added: Our] paving operations present additional risks to our [removed: business._][added: business.]

In some instances, including many of our fixed-price contracts, we guarantee [removed: that we will complete a] project [added: completion] by a certain date.

In our paving operations, we also have [removed: fixed price] [added: fixed-price] and [removed: fixed unit price] [added: fixed-unit-price] contracts where our profits can be adversely affected by a number of factors beyond our control, which can cause our actual costs to materially exceed the costs estimated at the time of our original bid.

[removed: _Our] [added: Our] ready mixed concrete and asphalt and paving product lines have lower profit margins and operating results can be more [removed: volatile._][added: volatile.]

Our overall ready mixed concrete and asphalt and paving operations’ gross margin was [removed: 10.3%] [added: 10.4%] for [removed: 2018] [added: 2019] and [removed: 12.7%] [added: 10.3%] for [removed: 2017.][added: 2018.]

[removed: _Short] [added: Short] supplies and high costs of fuel, energy and raw materials affect our [removed: businesses._][added: businesses.]

The average cost per gallon of diesel fuel was [added: $2.08,] $2.29, [removed: $1.81] and [removed: $1.96] [added: $1.81] in [added: 2019,] 2018, [removed: 2017] and [removed: 2016,] [added: 2017,] respectively.

For [removed: 2018,] [added: 2019,] the average cost per MCF (thousand cubic feet) for natural gas decreased [removed: 4%] [added: 4.7%] versus [removed: 2017,] [added: 2018,] which had [removed: increased] [added: decreased] approximately [removed: 33%] [added: 4%] from [removed: 2016] [added: 2017] levels.

The [removed: Company] [added: Company’s Magnesia Specialties business] has [removed: fixed price] [added: fixed-price] agreements for [removed: 100% of its 2019 coal needs, approximately 50%] [added: 62%] of its [removed: 2019] [added: 2020 coal,] natural [removed: gas needs,] [added: gas,] and [removed: 100% of its 2019] petroleum coke needs.

Energy costs represented approximately [removed: 23%] [added: 22%] of the [removed: 2018] [added: 2019] direct production costs of our cement product line.

The cement product line incurred shutdown costs of [removed: $17.3] [added: $26.3] million and [removed: $14.0] [added: $17.3] million during [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] respectively.

Part I [removed: ◆] [added: ♦] Item 1A [removed: -] [added: –] Risk Factors

[removed: Similarly] [added: Similarly,] our ready mixed concrete and asphalt and paving operations also require a continued supply of liquid asphalt and cement, which serve as key raw materials in the production of hot mix asphalt and ready mixed concrete, respectively.

Liquid asphalt prices were higher in [removed: 2018] [added: 2019] than in [removed: 2017.][added: 2018.]

Liquid asphalt prices may not always follow other energy products (e.g., oil or diesel fuel) because of complexities in the refining [removed: process] [added: process,] which converts a barrel of oil into other fuels and petrochemical products.

[removed: _Cement] [added: Cement] is [removed: a commodity] sensitive to supply and price [removed: volatility._][added: volatility.]

Cement [removed: is a commodity, and] competition is often based [removed: mainly] [added: primarily] on price, which is highly sensitive to changes in supply and demand.

[removed: _Our] [added: Our] Magnesia Specialties business depends in part on the steel industry and the supply of reasonably priced [removed: fuels._][added: fuels.]

[removed: _We] [added: We] are dependent on information technology and our systems and infrastructure face certain risks, including cybersecurity risks and data leakage [removed: risks._][added: risks.]

We are dependent on information technology systems and [removed: infrastructure.][added: infrastructure, including reliance on third-party vendors and third-party software.]

[removed: Other] [added: Other] Risk [removed: Factors][added: Factors]

[removed: _Delays] [added: Delays] or interruptions in shipping products of our businesses could affect our [removed: operations._][added: operations.]

Transportation logistics play an important role in allowing us to supply products to our customers, whether by truck, rail or [removed: ship.][added: water.]

[added: Part I ♦] Item 1A [removed: -] [added: –] Risk Factors [removed: ◆ Part I]

[removed: We still distribute some] [added: Some] of our product [added: is distributed] by barge along rivers in [added: Ohio and] West Virginia.

[removed: _Our] [added: Our] articles of incorporation and bylaws and North Carolina law may inhibit a change in control that you may [removed: favor._][added: favor.]

| | • | [removed: |] the ability of the Board of Directors to establish the terms of, and issue, preferred stock without shareholder approval; |

| | • | [removed: |] the requirement that our shareholders may only remove directors for cause; |

| | • | [removed: |] the inability of shareholders to call special meetings of shareholders; and |

| | • | [removed: |] super-majority shareholder approval requirements for business combination transactions with certain five percent shareholders. |

An investment in our common stock or debt securities involves risks and uncertainties.

You should consider the following factors carefully, in addition to the other information contained in this Form 10-K, before deciding to purchase or otherwise trade our securities.

This Form 10-K and other written reports and oral statements made from time to time by the Company contain statements that, to the extent they are not recitations of historical fact, constitute forward-looking statements within the meaning of federal securities law.

Investors are cautioned that all forward-looking statements involve risks and uncertainties, and are based on assumptions that the Company believes in good faith are reasonable, but which may be materially different from actual results.

Investors can identify these statements by the fact that they do not relate only to historic or current facts.

The words “may,” “will,” “could,” “should,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “outlook,” “plan,” “project,” “scheduled,” and similar expressions in connection with future events or future operating or financial performance are intended to identify forward-looking statements.

Any or all of the Company’s forward-looking statements in this Form 10‑K and in other publications may turn out to be wrong.

Statements and assumptions on future revenues, income and cash flows, performance, economic trends, the outcome of litigation, regulatory compliance, and environmental remediation cost estimates are examples of forward-looking statements.

Numerous factors, including potentially the risk factors described in this section, could affect our forward-looking statements and actual performance.

Investors are also cautioned that it is not possible to predict or identify all such factors.

Consequently, the reader should not consider any such list to be a complete statement of all potential risks or uncertainties.

Other factors besides those listed may also adversely affect the Company and may be material to the Company.

The Company has listed the known material risks it considers relevant in evaluating the Company and its operations.

The forward-looking statements in this document are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act.

These forward-looking statements are made as of the date hereof based on management’s current expectations, and the Company does not undertake an obligation to update such statements, whether as a result of new information, future events, or otherwise.

For a discussion identifying some important factors that could cause actual results to vary materially from those anticipated in the forward-looking statements, see the factors listed below, along with the discussion of “Competition” under Item 1 of this Form 10-K, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Item 7 of this Form 10-K, and “Note A: Accounting Policies” and “Note O: Commitments and Contingencies” of the “Notes to Financial Statements” of the Company’s consolidated financial statements included under Item 8, “Financial Statements and Supplemental Data,” of this Form 10-K.

General Risk Factors

Our business is cyclical and depends on activity within the construction industry.

Economic and political uncertainty can impede growth in the markets in which we operate.

Demand for our products, particularly in the private nonresidential and residential construction markets, could decline if companies and consumers are unable to obtain credit for construction projects or if an economic slowdown causes delays or cancellations of capital projects.

State and federal budget issues may also hurt the funding available for infrastructure spending.

The lack of available credit may limit the ability of states to issue bonds to finance construction projects.

As a result of these issues, several of our top sales generating states, from time-to-time, stop bidding or slow bid projects in their transportation departments.

We sell most of our aggregates products, our primary business, and our cement products, to the construction industry, so our results depend on that industry’s strength.

Since our businesses depend on construction spending, which can be cyclical, our profits are sensitive to national, regional, and local economic conditions and the intensity of the underlying spending on aggregates and cement products.

Construction spending is affected by economic conditions, changes in interest rates, demographic and population shifts, and changes in construction spending by federal, state, and local governments.

If economic conditions change, a recession in the construction industry may occur and affect the demand for our products.

The Great Recession of the late 2000s and early 2010s (the “Great Recession”) was an example, and our shipment volumes were significantly reduced.

Construction spending can also be disrupted by terrorist activity and armed conflicts.

While our business operations cover a wide geographic area, our earnings depend on the strength of the local economies in which we operate because of the high cost to transport our products relative to their price.

If economic conditions and

| Form 10-K ♦ Page 14 |  | Celebrating 25 Years as a Public Company |

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construction spending decline significantly in one or more areas, particularly in our top five sales-generating states of our Building Materials business of Texas, Colorado, North Carolina, Georgia, and Iowa our profitability will decrease.

We experienced this situation with the Great Recession.

The Great Recession resulted in large declines in shipments of aggregates products in our industry.

Recent years, however, have shown a slow but steady turnaround in this trend.

The current economic expansion in the United States, which began in 2009, has now become the longest economic recovery in United States history.

While historical spending on public infrastructure projects has been, comparatively, more stable as governmental appropriations and expenditures are typically less interest rate-sensitive than private sector spending, we experienced a slight retraction in aggregates product line shipments to the infrastructure market after uncertainty regarding the passage of the federal highway bill in 2014.

Contractors were not able to get any certainty on the availability of federal infrastructure funding until late 2015 with the enactment of a new federal highway bill.

Pricing in 2016 reflects an unfavorable fixed-price agreement which expired on December 31, 2016.

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| | | | |  | | 2018 FORM 10-K | | 21 |

##### [Table of Contents](#toc)

When we sold our River District operations in 2011 as part of our asset exchange with Lafarge, we sold most of our barge long-haul distribution network.

As a result, we reduced our risks from distributing our products by barges, especially along the Mississippi

| 22 | | 2018 FORM 10-K | |  | | | | |

River.

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INTRODUCTORY OVERVIEW

Martin Marietta Materials, Inc. (the “Company” or “Martin Marietta”) is a natural resource-based building materials company.

The Company supplies aggregates (crushed stone, sand and gravel) through its network of more than 300 quarries, mines and distribution yards in 27 states, Canada and the Bahamas.

In the western United States, Martin Marietta also provides cement and downstream products, namely ready mixed concrete, asphalt and paving services, in markets where the Company has a leading aggregates position.

Specifically, the Company has two cement plants in Texas and ready mixed concrete and asphalt operations in Texas, Colorado, Louisiana, Arkansas and Wyoming.

Paving services are exclusively in Colorado.

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, ready mixed concrete, asphalt and paving product lines are reported collectively as the “Building Materials” business.

As more fully discussed in the *Consolidated Strategic Objectives* section, geography is critically important for the Building Materials business.

The Company conducts its Building Materials business through three reportable segments, organized by geography: Mid-America Group, Southeast Group and West Group.

The Mid-America and Southeast Groups provide aggregates products only.

The West Group provides aggregates, cement and downstream products and services.

Further, the following five states accounted for 72% of the Building Materials business 2019 total products and services revenues: Texas, Colorado, North Carolina, Georgia and Iowa.


| Form 10-K ♦ Page 34 |  | Celebrating 25 Years as a Public Company |

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| | | |

Part II ♦ Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Building Materials business is a mature, cyclical business, dependent on activity within the construction marketplace.

As of December 31, 2019, the nation’s current economic expansion, which started in June 2009, has lasted 126 months and is the longest economic recovery in history.

By comparison, the average trough-to-peak expansionary cycle since 1938 was 60 months.

During the current economic expansion, however, governmental uncertainty, labor shortages and logistical challenges have tempered the recovery pace of growth of heavy construction activity, resulting in a slow, steady, extended construction cycle that is expected to continue over the next several years.

The level of economic recovery varies within the Company’s geographic footprint.

Magnesia Specialties

The Company operates a Magnesia Specialties business with production facilities in Michigan and Ohio.

The Magnesia Specialties business produces magnesia-based chemicals products used in industrial, agricultural and environmental applications.

It also produces dolomitic lime sold primarily to customers in the steel and mining industries.

Magnesia Specialties’ products are shipped to customers worldwide.

Consolidated Strategic Objectives

The Company’s strategic planning process, or Strategic Operating Analysis and Review (SOAR), provides the framework for  execution of Martin Marietta’s long-term strategic plan.

Guided by this framework and considering the cyclicality of the Building Materials business, the Company determines capital allocation priorities to maximize long-term shareholder value.

The Company’s strategy includes ongoing evaluation of aggregates-led opportunities of scale in new domestic markets (i.e., platform acquisitions), expansion through acquisitions that complement existing operations (i.e., bolt-on acquisitions), divestitures of assets that are not consistent with stated strategic goals, and arrangements with other companies engaged in similar or complementary businesses.

The Company finances such opportunities with the goal of preserving its financial flexibility by having a leverage ratio (consolidated debt-to-consolidated earnings before interest, taxes, depreciation and amortization, or EBITDA) within a target range of 2.0 times to 2.5 times within a reasonable time following the completion of a debt-financed transaction.

The Company, by purposeful design, will continue to be an aggregates-led business (aggregates product revenues represented 62% of 2019 total consolidated products and services revenues) that focuses on markets with strong, underlying growth fundamentals where it can sustain or achieve a leading market position.

Driven by this intentional approach, the Company has leading positions in 90% of its markets.

As part of its long-term strategic plan, the Company may pursue strategic cement and targeted downstream opportunities.

For Martin Marietta, strategic cement and targeted downstream operations are located in vertically-integrated markets where the Company has, or envisions a clear path toward, a leading aggregates position.

Additionally, strategic cement operations are attractive where market supply cannot be meaningfully interdicted by water.

Generally, the Company’s building materials products are both sourced and sold locally.

The information required in response to this Item 7 is included under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2018 Annual Report filed as Exhibit 13.01 to this Form 10-K, and that information is incorporated herein by reference, except that the information contained under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Outlook 2019” in the 2018 Annual Report is not incorporated herein by reference.

Part II [removed: ◆] [added: ♦] Item 8 [removed: -] [added: –] Financial Statements and Supplementary Data

As discussed earlier, the Company’s operations are highly dependent upon the interest rate-sensitive construction and steelmaking industries.

Consequently, these marketplaces could experience lower levels of economic activity in an environment of rising interest rates or escalating costs (see *Business Environment* section included under Item 7 – MD&A of this Form 10-K).

Management has considered the current economic environment and its potential impact to the Company’s business.

Demand for aggregates products, particularly in the infrastructure construction market, is affected by federal and state budget and deficit issues.

Further, delays or cancellations of capital projects in the nonresidential and residential construction markets could occur if companies and consumers are unable to obtain financing for construction projects or if consumer confidence is eroded by economic uncertainty.

Demand in the residential construction market is affected by interest rates.

During 2019, the Federal Reserve lowered the federal funds rate several times throughout the year.

The rate at December 31, 2019 was 1.55%.

The residential construction market accounted for approximately 22% of the Company’s aggregates product line shipments in 2019.

Aside from these inherent risks from within its operations, the Company’s earnings are also affected by changes in short-term interest rates.

Variable-Rate Borrowing Facilities

At December 31, 2019, the Company had a $700 million Revolving Facility and a $400 million Trade Receivable Facility.

The Company also has $300 million of variable-rate senior notes outstanding.

Borrowings under these facilities bear interest at a variable interest rate.

A hypothetical 100-basis-point increase in interest rates on borrowings of $640 million, which was the collective outstanding balance at December 31, 2019, would increase interest expense by $6.4 million on an annual basis.

Pension Expense

The Company’s results of operations are affected by its pension expense.

Assumptions that affect pension expense include the discount rate and, for the defined benefit pension plans only, the expected long-term rate of return on assets.

Therefore, the Company has interest rate risk associated with these factors.

The impact of hypothetical changes in these assumptions on the Company’s annual pension expense is discussed in the *Critical Accounting Policies and Estimates – Pension Expense – Selection of Assumptions* section included under Item 7 – MD&A of this Form 10-K.

Energy Costs

Energy costs, including diesel fuel, natural gas, coal, petroleum coke and liquid asphalt, represent significant production costs of the Company.

The Company may be unable to pass along increases in the costs of energy to customers in the form of price increases for the Company’s products.

The cement product line and Magnesia Specialties business each have varying fixed-price agreements for a portion of their energy requirements.

A hypothetical 10% change in the Company’s energy prices in 2020 as compared with 2019, assuming constant volumes, would change 2020 energy expense by $27.9 million.

Commodity Risk

Cement is a commodity and competition is based principally on price, which is highly sensitive to changes in supply and demand.

Prices are often subject to material changes in response to relatively minor fluctuations in supply and demand, general economic conditions and other market conditions beyond the Company’s control.

Increases in the production capacity of industry participants or increases in cement imports tend to create an oversupply of such products leading to an imbalance between supply and demand, which can have a negative impact on product prices.

There can be no assurance that product prices will not decline in the future or that such declines will not have a material adverse effect on the Company’s business, financial condition and results of operations.

A hypothetical 10% change in sales price of the cement product line would impact cement product line revenues by $43.9 million, excluding the net impact of internal sales.

Cement is a key raw material in the production of ready mixed concrete.

The Company may be unable to pass along increases in the costs of cement and raw materials to customers in the form of price increases for the Company’s products.

A hypothetical 10% change in cement costs in 2020 compared with 2019, assuming constant volumes, would change the ready mixed concrete product line cost of sales by $24.5 million.

| Celebrating 25 Years as a Public Company |  | Form 10-K ♦ Page 71 |

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The information required in response to this Item 7A is included under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Quantitative and Qualitative Disclosures About Market Risk” of the 2018 Annual Report filed as Exhibit 13.01 to this Form 10-K, and that information is incorporated herein by reference.

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| | | | |  | | 2018 FORM 10-K | | 29 |

##### [Table of Contents](#toc)

[removed: Magnesia] [added: Magnesia] Specialties [removed: Business][added: Business]

[removed: Additionally, at its Manistee, Michigan facility,] [added: The] Magnesia Specialties [added: business] manufactures magnesia-based chemical products for industrial, agricultural and environmental [removed: applications.][added: applications at its Manistee, Michigan facility.]

These [added: magnesia-based] chemical products have varying uses, including flame retardants, wastewater treatment, pulp and paper production and other environmental applications.

In [removed: 2018, 70%] [added: 2019, 69%] of Magnesia Specialties’ total revenues were attributable to chemical products, [removed: 29%] [added: 30%] to lime, and 1% to stone sold as construction materials.

In [removed: 2018,] [added: 2019,] 81% of the lime produced was sold to third-party customers, while the remaining 19% was used internally as a raw material in making the business’ chemical products.

Products used in the steel industry, either directly as dolomitic lime or indirectly as a component of other industrial products, accounted for [removed: 33%] [added: 35%] of the Magnesia Specialties’ total revenues in [removed: 2018,] [added: 2019,] attributable primarily to the sale of dolomitic lime products.

The dolomitic lime business runs most profitably at 70% or greater steel capacity utilization; domestic capacity utilization averaged [removed: 78%] [added: 80%] in [removed: 2018,] [added: 2019,] according to the American Iron and Steel Institute.

Average steel production in [removed: 2018] [added: 2019] increased [removed: 6.2%] [added: 1.8%] versus [removed: 2017.][added: 2018.]

To help mitigate this risk, the Magnesia Specialties business has [removed: fixed price] [added: fixed-price] agreements for [removed: 100% of its 2019 coal needs,] approximately [removed: 50%] [added: 62%] of its [removed: 2019] [added: 2020 coal,] natural [removed: gas needs] [added: gas,] and [removed: 100% of its 2019] petroleum coke needs.

For [removed: 2018,] [added: 2019,] the Company’s average cost per MCF (thousand cubic feet) for natural gas decreased [removed: 4%] [added: 4.7%] versus [removed: 2017.][added: 2018.]

In [removed: 2003, Magnesia Specialties entered into] [added: 2010, Occidental Chemical Corporation (“Occidental”) acquired interests in, and became the counterparty to,] a long-term processed brine supply agreement [removed: with The Dow Chemical Company (“Dow”)] [added: previously entered into by Magnesia Specialties,] pursuant to which [removed: Dow] [added: Occidental] purchases processed brine from Magnesia Specialties, at market rates, for use in [removed: Dow’s] [added: Occidental’s] production of calcium chloride products.

[removed: Magnesia Specialties] [added: Occidental] also [removed: entered into] [added: succeeded as Magnesia Specialties’ partner in] a joint venture [removed: with Dow] to [removed: construct,] own and operate a processed brine supply pipeline between the Magnesia Specialties facility in Manistee, Michigan, and [removed: Dow’s] [added: Occidental’s] facility in Ludington, Michigan.

A significant portion of the 275,000 ton dolomitic lime capacity from a lime kiln [removed: completed in 2012] at Woodville, Ohio is committed under a long-term supply contract.

The segment can be affected by the specific transportation and other risks and uncertainties outlined under Item [removed: IA., Risk Factors,] [added: IA, “Risk Factors,”] of this Form 10-K.

[removed: Patents] [added: Patents] and [removed: Trademarks][added: Trademarks]

As of February [removed: 8, 2019,] [added: 7, 2020,] the Company owns, has the right to use, or has pending applications for approximately 23 patents pending or granted by the United States and various countries and approximately [removed: 96] [added: 94] trademarks related to business.

Part I [removed: ◆] [added: ♦] Item 1 [removed: -] [added: –] Business

[added: The Company believes that its] rights under its existing patents, patent applications and trademarks are of value to its operations, but no one patent or trademark or group of patents or trademarks is material to the conduct of the Company’s business as a whole.

[removed: Customers][added: Customers]

The largest ten producers account for approximately [removed: 35%] [added: 45-47%] of the total market.

Rogers Group [added: Inc.]

While the revenues of the Magnesia Specialties business in [removed: 2018] [added: 2019] were predominantly from North America, a [removed: small but growing amount] [added: portion] was derived from customers located outside the United States.

According to the Portland Cement Association, United States cement production is widely dispersed with the operation of [removed: 97] [added: 98] cement plants in 34 states.

The top five companies collectively operate [removed: 59.5%] [added: 62.5%] of U.S. clinker capacity with the largest company representing [removed: 18.7%] [added: 18.8%] of all domestic clinker capacity.

In [removed: reviewing] [added: reporting] these figures for cement plants, capacity is often stated in terms of “clinker” capacity.

The Company’s [added: strategic] cement product line competes with various companies in different geographic and product areas principally on the basis of proximity, quality and price for its products, but level of customer service is also a factor.

The cement product line also competes with imported cement because of the higher value of the product and the existence of major ports [added: or terminals] in [removed: some of our markets.][added: Texas.]

Crushed stone production from [removed: stone] quarries or mines, or sand and gravel production by dredging, is [added: moderately capital intensive.]

[removed: tem 1 - Business ◆] Part I [added: ♦ Item 1 – Business]

The Company’s major competitors in the aggregates markets are [removed: typically] [added: often] large, vertically-integrated companies, with international operations.

The Company’s operations are subject to and affected by federal, state, and local laws and regulations relating to zoning, land use, air emissions (including [added: CO2 and other] greenhouse gases) and water discharges, waste management, noise and dust exposure control, reclamation and [removed: other] environmental, health and safety, regulatory matters.

Certain of the Company’s operations may from time to time involve the use of substances that are classified as toxic or hazardous [removed: substances] within the meaning of these laws and regulations.

The Company has a [removed: full time staff] [added: full-time team] of environmental engineers and managers that perform these responsibilities.

The direct costs of ongoing environmental compliance were approximately [removed: $25.3] [added: $26.0] million in [removed: 2018] [added: 2019] and [removed: $23.4] [added: $25.3] million in [removed: 2017] [added: 2018] and are related to the Company’s environmental staff, ongoing monitoring costs for various matters (including those matters disclosed in this Form 10-K), and asset retirement costs.

Capitalized costs related to environmental control facilities were approximately [removed: $14] [added: $11] million in [removed: 2018] [added: 2019] and are expected to be approximately $15 million in [removed: 2019] [added: 2020] and [removed: 2020.][added: 2021.]

The Company’s capital expenditures for environmental matters were not material to its results of operations or financial condition in [removed: 2018] [added: 2019] and [removed: 2017.][added: 2018.]

However, [removed: our] [added: the Company’s] expenditures for environmental matters generally have increased over time and are likely to increase in the future.

Despite [removed: our] [added: the Company’s] compliance efforts, risk of environmental liability is inherent in the operation of the Company’s businesses, and environmental liabilities could have a material adverse effect on the Company in the future.

The water spray bar also [removed: suffices] [added: serves] as a dust control mechanism that complies with applicable environmental laws.

[removed: The] [added: Moreover, the] Company does not break out the portion of the cost, depreciation, and other financial information relating to the water spray bar that is attributable only to environmental purposes, as [removed: it would be derived from] [added: such] an [removed: arbitrary] allocation [removed: methodology.][added: would be arbitrary.]

General

Martin Marietta Materials, Inc. (the “Company” or “Martin Marietta”) is a natural resource-based building materials company.

The Company supplies aggregates (crushed stone, sand and gravel) through its network of more than 300 quarries, mines and distribution yards in 27 states, Canada, the Bahamas and the Caribbean Islands.

In the western United States, Martin Marietta also provides cement and downstream products, namely, ready mixed concrete, asphalt and paving services in markets where the Company has a leading aggregates position.

Specifically, the Company has two cement plants in Texas, and ready mixed concrete and asphalt operations in Texas, Colorado, Louisiana, Arkansas, and Wyoming.

Paving services are exclusively in Colorado.

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, ready mixed concrete and asphalt and paving product lines are reported collectively as the “Building Materials” business.

The Company also operates a Magnesia Specialties business with production facilities in Michigan and Ohio.

The Magnesia Specialties business produces magnesia-based chemical products that are used in industrial, agricultural and environmental applications.

It also produces dolomitic lime sold primarily to customers in the steel and mining industries.

Magnesia Specialties’ products are shipped to customers worldwide.

The Company was formed in 1993 as a North Carolina corporation to serve as successor to the operations of the materials group of the organization that is now Lockheed Martin Corporation.

An initial public offering of a portion of the Company’s common stock was completed in 1994, followed by a tax-free exchange transaction in 1996 that resulted in 100% of the Company’s common stock being publicly traded.

The Company completed over 90 smaller acquisitions from the time of its initial public offering until the present, which allowed the Company to enhance and expand its aggregates-led presence in the building materials marketplace.

This included an exchange of certain assets in 2011 with Lafarge North America Inc. (“Lafarge”), pursuant to which it received aggregates quarry sites, ready mixed concrete and asphalt plants, and a road paving business in and around the metropolitan Denver, Colorado, and the I-25 corridor, in exchange for which Lafarge received properties consisting of quarries, an asphalt plant and distribution yards operated by the Company along the Mississippi River (called the Company’s “River District Operations”) and a cash payment.

The business has developed further through the following transactions over the past few years.

In 2014, the Company completed the acquisition of Texas Industries, Inc. (“TXI”), further augmenting its position as a leading supplier of aggregates and heavy building materials.

TXI was a major supplier of natural aggregates in Texas, in northern Louisiana and, to a lesser extent, in Oklahoma and Arkansas.

TXI was the then largest supplier of cement and ready mixed concrete products in Texas.

TXI enhanced the Company’s position as an aggregates-led, low-cost operator in large and fast-growing geographies in the United States, adding 800 million tons of aggregates to the Company’s reserves, and provided high-quality assets in cement and ready mixed concrete.

In connection with the TXI acquisition, the Company acquired nine quarries and six aggregates distribution terminals located in Texas, Louisiana and Oklahoma.

The Company also acquired two cement plants in Midlothian, Texas, south of Dallas, and Hunter, Texas, north of San Antonio, and approximately 120 ready mixed concrete plants, situated primarily in three areas of Texas (the Dallas/Fort Worth/Denton area of north Texas; the Austin area of central Texas; and from Beaumont to Texarkana in east Texas), in north and central Louisiana and in Southwestern Arkansas.

As part of an agreement in conjunction with the United States Department of Justice’s review of the transaction, the Company divested its North Troy Quarry in Oklahoma and two related rail distribution yards in Dallas and Frisco, Texas.

TXI was also a cement producer in California.

In 2015, the Company divested its California cement operations acquired from TXI.

These operations were not in close proximity to aggregates and other core assets of the Company and, unlike other marketplace competitors, were not vertically integrated with ready mixed concrete production.

The divestiture primarily included a cement plant, two distribution terminals, mobile equipment, intangible assets and inventory.

The Company also completed the integration of the TXI operations in 2015, and completed three smaller acquisitions the same year, which included three aggregates operations and related assets.

In 2016, the Company acquired aggregates, ready mixed concrete and asphalt and paving operations in southern Colorado that provided more than 500 million tons of mineral reserves and expanded the Company’s presence along the Front Range

| Celebrating 25 Years as a Public Company |  | Form 10-K ♦ Page 1 |

| --- | --- | --- |

of the Rocky Mountains, home to 85% of Colorado’s population.

The Company also acquired the remaining and controlling interest in a ready mixed concrete company that serves the I-35 corridor in central Texas between Dallas and Austin, which enhanced the Company’s position and provided additional vertical integration benefits with the Company’s cement product line.

In 2018, the Company completed the acquisition of Bluegrass Materials Company (“Bluegrass”), the then largest privately held, pure-play aggregates business in the United States.

With a portfolio of 22 active sites acquired by the Company, the operations provided more than 2.2 billion tons, or approximately 125 years, of strategically-located, high-quality reserves, in Georgia, South Carolina, Tennessee, Maryland, Kentucky and Pennsylvania.

These operations complemented the Company’s existing southeastern footprint in its Mid-America and Southeast Groups and provided a new growth platform within Maryland and Kentucky.

Between 2001 and 2019, the Company disposed of a number of underperforming operations, including aggregates, ready mixed concrete, trucking, and asphalt and road paving operations of its Building Materials business and the refractories business of its Magnesia Specialties business.

In some of its divestitures, the Company concurrently entered into supply agreements to provide aggregates at market rates to certain of these divested businesses.

In the past, the business did this by reinjecting the processed brine back into its underground brine reserve network around its facility in Manistee, Michigan.

The business has also sold a portion of this processed brine to third parties.

Construction of the pipeline was completed in 2003, and Dow began purchasing processed brine from Magnesia Specialties through the pipeline.

In 2010, Dow sold the assets of its facility in Ludington, Michigan to Occidental Chemical Corporation (“Occidental”) and assigned to Occidental its interests in the long-term processed brine supply agreement and the pipeline venture with Magnesia Specialties.

The Company believes that its

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| | | | |  | | 2018 FORM 10-K | | 7 |

##### [Table of Contents](#toc)

| 8 | | 2018 FORM 10-K | |  | | | | |

moderately capital intensive.

Research and Development

The Company conducts research and development activities, principally for its magnesia-based chemicals business, at its plant in Manistee, Michigan.

In general, the Company’s research and development efforts are directed to applied technological development for the use of its chemicals products.

The Company records an accrual for environmental remediation liabilities in the period in which it is probable that a liability has been incurred and the amounts can be reasonably estimated.

Such accruals are adjusted as further information develops or circumstances change.

The accruals are not discounted to their present value or offset for potential insurance or other claims or potential gains from future alternative uses for a site.

| | | | |  | | 2018 FORM 10-K | | 9 |

| 10 | | 2018 FORM 10-K | |  | | | | |

alternative fuels, carbon credits (such as a “cap and trade” system) and a carbon tax.

It is not possible, however, to estimate the cost of any such future requirements at this time.

These other products include natural magnesites produced around the world by calcining magnesium carbonate, and also naturally occurring and mined magnesium hydroxide powder (brucite) products.

Production of magnesium products from these other sources requires less energy, resulting in the generation of fewer GHGs per ton of production.

In addition, climate and inclement weather can reduce the useful life of an asset.

In particular, the Company’s operations in the southeastern and Gulf Coast regions of the United States and the Bahamas are at risk for hurricane activity, most notably in August, September and October.

For example, according to the National Oceanic and Atmospheric Administration (“NOAA”), Hurricane Florence in the third quarter of 2018 caused catastrophic flooding in portions of North Carolina and South Carolina.

NOAA also reported that 2018 marked the wettest year for nine states, including North Carolina, Maryland, Virginia, West Virginia, and Tennessee.

These events, along with significant precipitation in Texas, adversely impacted our aggregates production and shipments, as well as our other businesses, in those areas during the year.

Our businesses also are dependent on reliable sources of electricity and fuels.

| | | | |  | | 2018 FORM 10-K | | 11 |

or other materials used in our operations.

These and other climate-related risks also could impact our customers, such as a downturn in the construction sector, which could lead to reduced demand for our products.

In fact, 2018 marked the 22nd consecutive warmer-than-average year for the contiguous United States, and five states, including North Carolina and South Carolina, had a record warmest year.

The extended warmer periods helped the Company deliver record revenues and profitability for the full year.

| 12 | | 2018 FORM 10-K | |  | | | | |

An investment in our common stock or debt securities involves risks and uncertainties.

You should consider the following factors carefully, in addition to the other information contained in this Form 10-K, before deciding to purchase or otherwise trade our securities.

This Form 10-K and other written reports and oral statements made from time to time by the Company contain statements which, to the extent they are not recitations of historical fact, constitute forward-looking statements within the meaning of federal securities law.

Investors are cautioned that all forward-looking statements involve risks and uncertainties, and are based on assumptions that the Company believes in good faith are reasonable, but which may be materially different from actual results.

Investors can identify these statements by the fact that they do not relate only to historic or current facts.

The Company was not required to pay any penalties in [removed: 2018] [added: 2019] for failure to disclose certain “reportable transactions” under Section 6707A of the Internal Revenue Code.

See also “Note O: Commitments and Contingencies” of the “Notes to Financial Statements” of the [removed: 2018 Financial Statements] [added: Company’s consolidated financial statements] included [removed: in the 2018 Annual Report filed as Exhibit 13.01 to] [added: under Item 8, “Financial Statements and Supplemental Data,” of] this Form 10-K and [added: the “Environmental Regulation and Litigation” section included under Item 7,] “Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations – Environmental Regulation and Litigation” included in the 2018 Annual Report filed as Exhibit 13.01 to] [added: Operations,” of] this Form 10-K.

[removed: 10-K 1 d640896d10k.htm] FORM 10-K

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: WASHINGTON,] [added: WASHINGTON,] D.C. [removed: 20549][added: 20549]

[removed: (Mark One)][added: (Mark One)]

| [removed: \[X\]] [added: ☒] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

For the fiscal year ended December 31, [removed: 2018][added: 2019]

| [removed: \[ \]] [added: ☐] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

[removed: MARTIN] [added: MARTIN] MARIETTA MATERIALS, [removed: INC.][added: INC.]

| [removed: North Carolina] [added: North Carolina] | | [removed: 56-1848578] [added: 56-1848578] |

| [removed: 2710] [added: 2710] Wycliff Road, Raleigh, North [removed: Carolina] [added: Carolina] | | [removed: 27607-3033] [added: 27607-3033] |

[removed: (919) 781-4550][added: (919) 781-4550]

| Title of each class | | [added: Trading Symbol(s) | |] Name of each exchange on which registered |

| [removed: Common] [added: Common] Stock (par value $.01 per [removed: share)] [added: share)] | | [removed: New] [added: MLM | | New] York Stock [removed: Exchange] [added: Exchange] |

Securities registered pursuant to Section 12(g) of the Act: [removed: None][added: None]

[added: | |] Yes [removed: \[X\]] [added: ☒ |] No [removed: \[ \]][added: ☐ |]

[added: | |] Yes [removed: \[ \]] [added: ☐ |] No [removed: \[X\]][added: ☒ |]

| Large accelerated filer [removed: \[X\]] | | [added: ☒ |] Accelerated filer [removed: \[ \]] | [added: ☐ |]

| Non-accelerated filer [removed: \[ \]] | | [added: ☐ |] Smaller reporting company [removed: \[ \]] | [added: ☐ |]

| [added: | | |] Emerging growth company [removed: \[ \]] | [removed: |] [added: ☐] |

As of June [removed: 29, 2018,] [added: 28, 2019,] the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was [removed: $11,000,435,608.61] [added: $12,807,658,433.72] based on the closing sale price as reported on the New York Stock Exchange.

| Class | | Outstanding at February [removed: 15, 2019] [added: 14, 2020] |

| [removed: Common] [added: Common] Stock, $.01 par value per [removed: share] [added: share] | | [removed: 62,430,548 shares] [added: 62,198,867 shares] |

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

| Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 9, 2019] [added: 14, 2020] (Proxy Statement) | | Part III |

| [removed: [PART I](#toc640896_1) | | | |] [added: [PART I](#PART_I)] | [removed: 1] | [added: 1] |

| [removed: ITEM 1. | | [BUSINESS](#toc640896_2) | |] [added: ITEM 1.] | [removed: 1] [added: [BUSINESS](#ITEM_1_BUSINESS)] | [added: 1] |

| [removed: ITEM 1A. | | [RISK FACTORS](#toc640896_3) | |] [added: ITEM 1A.] | [removed: 13] [added: [RISK FACTORS](#ITEM_1A_RISK_FACTORS)] | [added: 14] |

| [removed: ITEM 1B. |] [added: ITEM 1B.] | [removed: [UNRESOLVED] [added: [UNRESOLVED] STAFF [removed: COMMENTS](#toc640896_4) | | | 23] [added: COMMENTS](#ITEM_1B_UNRESOLVED_STAFF_COMMENTS)] | [added: 25] |

| [removed: ITEM 2. | | [PROPERTIES](#toc640896_5) | |] [added: ITEM 2.] | [removed: 23] [added: [PROPERTIES](#ITEM_2_PROPERTIES)] | [added: 25] |

| [removed: ITEM 3. | | [LEGAL PROCEEDINGS](#toc640896_6) | |] [added: ITEM 3.] | [removed: 27] [added: [LEGAL PROCEEDINGS](#ITEM_3_LEGAL_PROCEEDINGS)] | [added: 28] |

| [removed: ITEM 4. |] [added: ITEM 4.] | [removed: [MINE] [added: [MINE] SAFETY [removed: DISCLOSURES](#toc640896_7) | | | 27] [added: DISCLOSURES](#ITEM_4_MINE_SAFETY_DISCLOSURES)] | [added: 28] |

| [removed: [PART II](#toc640896_9) | | | |] [added: [PART II](#PART_II)] | [removed: 29] | [added: 30] |

| [removed: [ITEM 5.](#toc640896_10) |] [added: ITEM 5.] | [removed: [MARKET] [added: [MARKET] FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#toc640896_10) | | | 29] [added: SECURITIES](#ITEM_5_MARKET_FOR_REGISTRANTS_COMMON_EQU)] | [added: 30] |

| [removed: [ITEM 6.](#toc640896_11) |] [added: ITEM 6.] | [removed: [SELECTED] [added: [SELECTED] FINANCIAL [removed: DATA](#toc640896_11) | | | 29] [added: DATA](#ITEM_6_SELECTED_FINANCIAL_DATA)] | [added: 32] |

| [removed: [ITEM 7.](#toc640896_12) |] [added: ITEM 7.] | [removed: [MANAGEMENT’S] [added: [MANAGEMENT’S] DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS](#toc640896_12) | | | 29] [added: OPERATIONS](#ITEM_7_MANAGEMENTS_DISCUSSION_ANALYSIS_F)] | [added: 34] |

| [removed: [ITEM 7A.](#toc640896_13) |] [added: ITEM 7A.] | [removed: [QUANTITATIVE] [added: [QUANTITATIVE] AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#toc640896_13) | | | 29] [added: RISK](#ITEM_7A_QUANTITATIVE_QUALITATIVE_DISCLOS)] | [added: 71] |

| [removed: [ITEM 8.](#toc640896_14) |] [added: ITEM 8.] | [removed: [FINANCIAL] [added: [FINANCIAL] STATEMENTS AND SUPPLEMENTARY [removed: DATA](#toc640896_14) | | | 30] [added: DATA](#ITEM_8_FINANCIAL_STATEMENTS_SUPPLEMENTAR)] | [added: 72] |

| [removed: [ITEM 9.](#toc640896_15) |] [added: ITEM 9.] | [removed: [CHANGES] [added: [CHANGES] IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL [removed: DISCLOSURE](#toc640896_15) | | | 30] [added: DISCLOSURE](#ITEM_9_CHANGES_IN_DISAGREEMENTS_WITH_ACC)] | [added: 118] |

| [removed: [ITEM 9A.](#toc640896_16) |] [added: ITEM 9A.] | [removed: [CONTROLS] [added: [CONTROLS] AND [removed: PROCEDURES](#toc640896_16) | | | 30] [added: PROCEDURES](#ITEM_9A_CONTROLS_PROCEDURES)] | [added: 118] |

OR

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| | Yes ☒ | No ☐ |

| | Yes ☒ | No ☐ |

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| | Yes ☐ | No ☒ |

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| [INFORMATION ABOUT OUR EXECUTIVE OFFICERS](#INFORMATION_ABOUT_OUR_EXECUTIVE_FICERS) | | 29 |

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| [PART IV](#PART_IV) | | 121 |

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| [SIGNATURES](#SIGNATURES) | | 127 |

##### [Table of Contents](#toc)

FORM 10-K

OR

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

\[X\]

\[ \]

| Excerpts from Annual Report to Shareholders for the Fiscal Year Ended December 31, 2018 (Annual Report) | | Parts I, II, and IV |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| [EXECUTIVE OFFICERS OF THE REGISTRANT](#toc640896_8) | | | | | 28 | |

| [PART IV](#toc640896_24) | | | | | 33 | |

| [SIGNATURES](#toc640896_27a) | | | | | 39 | |

ITEM 1 - BUSINESS

General

Martin Marietta Materials, Inc. (the “Company” or “Martin Marietta”) is a natural resource-based building materials company.

The Company supplies aggregates (crushed stone, sand and gravel) through its network of more than 300 quarries, mines and distribution yards to customers in 31 states, Canada, the Bahamas and the Caribbean Islands.

In the western United States, Martin Marietta also provides cement and downstream products, namely, ready mixed concrete, asphalt and paving services in markets where the Company has a leading aggregates position.

Specifically, the Company has two cement plants in Texas, and ready mixed concrete and asphalt operations in Texas, Colorado, Louisiana and Arkansas.

Paving services are exclusively in Colorado.

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, ready mixed concrete, asphalt and paving product lines are reported collectively as the “Building Materials” business.

The Company also operates a Magnesia Specialties business with production facilities in Michigan and Ohio.

The Magnesia Specialties business produces magnesia-based chemicals products which are used in industrial, agricultural and environmental applications.

It also produces dolomitic lime sold primarily to customers in the steel and mining industries.

Magnesia Specialties’ products are shipped to customers worldwide.

The Company was formed in 1993 as a North Carolina corporation to serve as successor to the operations of the materials group of the organization that is now Lockheed Martin Corporation.

An initial public offering of a portion of the Company’s Common Stock was completed in 1994, followed by a tax-free exchange transaction in 1996 that resulted in 100% of the Company’s Common Stock being publicly traded.

The Company completed over 90 smaller acquisitions from the time of its initial public offering until the present, which allowed the Company to enhance and expand its aggregates-led presence in the building materials marketplace.

This included an exchange of certain assets in 2011 with Lafarge North America Inc. (“Lafarge”), pursuant to which it received aggregates quarry sites, ready mixed concrete and asphalt plants, and a road paving business in and around the metropolitan Denver, Colorado, and the I-25 corridor, in exchange for which Lafarge received properties consisting of quarries, an asphalt plant and distribution yards operated by the Company along the Mississippi River (called the Company’s “River District Operations”) and a cash payment.

The business has developed further through the following transactions over the past five years.

In 2014, the Company completed the acquisition of Texas Industries, Inc. (“TXI”), further augmenting its position as a leading supplier of aggregates and heavy building materials.

TXI, as a stand-alone entity, was a leading supplier of heavy construction materials in the southwestern United States and a major supplier of natural aggregates and ready mixed concrete in Texas, northern Louisiana and, to a lesser extent, in Oklahoma and Arkansas.

TXI was the largest supplier of cement, ready mixed concrete, and concrete products in Texas.

TXI enhanced the Company’s position as an aggregates-led, low-cost operator in large and fast-growing geographies in the United States and provided high-quality assets in cement and ready mixed concrete.

In addition to the cement operations, the Company acquired as part of the TXI acquisition nine quarries and six aggregates distribution terminals located in Texas, Louisiana and Oklahoma.

The Company also acquired approximately 120 ready mixed concrete plants, situated primarily in three areas of Texas (the Dallas/Fort Worth/Denton area of north Texas; the Austin area of central Texas; and from Beaumont to Texarkana in east Texas), in north and central Louisiana and in Southwestern Arkansas.

As part of an agreement in conjunction with the United States Department of Justice’s review of the transaction, the Company divested its North Troy Quarry in Oklahoma and two related rail distribution yards in Dallas and Frisco, Texas.

TXI was also a cement producer in California.

In 2015, the Company divested its California cement operations acquired from TXI.

ITEM 2 - PROPERTIES

Building Materials Business

As of December 31, 2018, the Company processed or shipped aggregates from more than 300 quarries, underground mines, and distribution yards in 26 states, Canada, and the Bahamas, of which 124 are located on land owned by the Company free of major encumbrances, 61 are on land owned in part and leased in part, 110 are on leased land, and 10 are on facilities neither owned nor leased, where raw materials are removed under an agreement.

The Company’s aggregates reserves, on the average, exceed 75 years based on normalized levels of production, and approximate 100 years at current production rates.

However, certain locations may be subject to more limited reserves and may not be able to expand.

In addition, as of December 31, 2018, the Company processed and shipped ready mixed concrete and/or asphalt products from 149 properties in five states, of which 126 are located on land owned by the Company free of major encumbrances, one is on land owned in part and leased in part, and 22 are on leased land.

The Company uses various drilling methods, depending on the type of aggregate, to estimate aggregates reserves that are economically mineable.

The extent of drilling varies and depends on whether the location is a potential new site (greensite), an existing location, or a potential acquisition.

More extensive drilling is performed for potential greensites and acquisitions, and in rare cases, the Company may rely on existing geological data or results of prior drilling by third parties.

Subsequent to drilling, selected core samples are tested for soundness, abrasion resistance, and other physical properties relevant to the aggregates industry.

If the reserves meet the Company’s standards and are economically mineable, then they are either leased or purchased.

The Company estimates proven and probable reserves based on the results of drilling.

Proven reserves are reserves of deposits designated using closely spaced drill data, and based on that data the reserves are believed to be relatively homogenous.

Proven reserves have a certainty of 85% to 90%.

Probable reserves are reserves that are inferred utilizing fewer drill holes and/or assumptions about the economically mineable reserves based on local geology or drill results from adjacent properties.

The degree of certainty for probable reserves is 70% to 75%.

In determining the amount of reserves, the Company’s policy is to not include calculations that exceed certain depths, so for deposits, such as granite, that typically continue to depths well below the ground, there may be additional deposits that are not included in the reserve calculations.

The Company also deducts reserves not available due to property boundaries, set-backs, and plant configurations, as deemed appropriate when estimating reserves.

The Company uses the same methods of analysis to evaluate and estimate the amount of its aggregates reserves used in the cement manufacturing process for its cement product line as

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| | | | |  | | 2018 FORM 10-K | | 23 |

##### [Table of Contents](#toc)

Part I ◆ Item 2 - Properties

it does for its aggregates product line.

For additional information on the Company’s assessment of reserves, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Other Financial Information – Critical Accounting Policies and Estimates- Property, Plant and Equipment” included in the 2018 Annual Report filed as Exhibit 13.01 to this Form 10-K for a discussion of reserves evaluation by the Company.

Set forth in the tables below are the Company’s estimates of reserves of recoverable aggregates (hard rock and sand and gravel) of suitable quality for economic extraction, shown on a state-by-state basis, and the Company’s total annual production for the last three years, along with the Company’s estimate of years of production available, shown on a segment-by-segment basis.

The number of producing quarries shown on the table includes underground mines.

The Company’s reserve estimates for the last two years are shown for comparison purposes on a state-by-state basis.

The changes in reserve estimates at a particular state level from year to year reflect the tonnages of reserves on locations that have been opened or closed during the year, whether by acquisition, disposition, or otherwise; production and sales in the normal course of business; additional reserve estimates or refinements of the Company’s existing reserve estimates; opening of additional reserves at existing locations; the depletion of reserves at existing locations; and other factors.

The Company evaluates its reserve estimates primarily on a Company-wide, or segment-by-segment basis, and does not believe comparisons of changes in reserve estimates on a state-by-state basis from year to year are particularly meaningful.

The Company’s estimate of reserves shown in the tables below include reserves used in the Company’s cement product line and Magnesia Specialties business.

| 24 | | 2018 FORM 10-K | |  | | | | |

| [removed: State | | Number of Producing Quarries | | | | | Tonnage of Reserves for each general type of aggregate at 12/31/17 (Add 000) | |] [added: State] | | [added: Number of Producing Quarries] | | [added: Tonnage of Reserves for each general type of aggregate at 12/31/18 (in thousands)] | | | | [removed: Tonnage of Reserves for each general type of aggregate at 12/31/18 (Add 000)] | | | | [added: Tonnage of Reserves for each general type of aggregate at 12/31/19 (in thousands)] | | | | | | [removed: Change in Tonnage from 2017 (Add 000)] | | [added: Change in Tonnage from 2018 (in thousands)] | | | | | | | | [removed: Percentage of aggregate reserves located] [added: Percentage of aggregate reserves located] at [removed: an existing quarry, and reserves not located] [added: an existing quarry, and reserves not located] at [removed: an existing quarry. | | | | |] [added: an existing quarry.] | | | | | [removed: Percentage of aggregate reserves on land that has not been zoned for quarrying.*] | | | [added: Percentage of aggregate reserves on land that has not been] | | [removed: Percent of reserves owned and percent leased] | | [added: Percent of reserves owned and percent leased] | | | | | | |

| | [removed: 2018] | [removed: | | |] [added: 2019] | [removed: Hard Rock] | [added: Hard Rock] | | | | [removed: S] [added: S] & [removed: G | |] [added: G] | | | [removed: Hard Rock] | [added: Hard Rock] | | | | [removed: S] [added: S] & [removed: G | |] [added: G] | | | [removed: Hard Rock] | [added: Hard Rock] | | | | [removed: S] [added: S] & [removed: G | | | | | At Quarry | |] [added: G] | | | [removed: Not at Quarry] | [added: At Quarry] | | | | [removed: Owned] [added: Not at Quarry] | | | | [added: zoned for quarrying.*] | [removed: Leased] | | | [added: Owned] | | | | [added: Leased] | | |

| Mississippi | | [removed: | |] 0 | | | [removed: | |] 0 | | | | [removed: |] 67,238 | | | | [removed: |] 0 | | | | [removed: |] 67,238 | | | | [removed: |] 0 | | | | [removed: |] 0 | | | | [removed: |] 100 | % | | [removed: |] [added: 0%] | [removed: 0] | [removed: %] | | 0% | | | | [removed: | | | 100] [added: 100%] | [removed: %] | | | [added: 0%] | [removed: 0] | [removed: %] |

| Pennsylvania | | [removed: | |] 1 | | | [removed: | | 0 |] [added: 4,531] | | | | 0 | | | | [removed: | 4,531 |] [added: 4,331] | | | | 0 | | | | [removed: | 4,531 |] [added: (200] | [added: )] | | | 0 | | | | [removed: |] 100 | % | | [removed: |] [added: 0%] | [removed: 0] | [removed: %] | | 0% | | | | [removed: | | | 100] [added: 100%] | [removed: %] | | | [added: 0%] | [removed: 0] | [removed: %] |

| Tennessee | | [removed: | |] 2 | | | [removed: | | 35,101 |] [added: 104,066] | | | | 0 | | | | [removed: | 104,066 |] [added: 13,372] | | | | 0 | | | | [removed: | 68,965 |] [added: (724] | [added: )] | | | 0 | | | | [removed: |] 100 | % | | [removed: |] [added: 0%] | [removed: 0] | [removed: %] | | 0% | | | | [removed: | | | 36] [added: 36%] | [removed: %] | | | [added: 64%] | [removed: 64] | [removed: %] |

| West Virginia | | [removed: | |] 1 | | | [removed: | | 23,956 |] [added: 23,243] | | | | 0 | | | | [removed: | 23,243 |] [added: 16,425] | | | | 0 | | | | [removed: | (714] [added: (6,818] | ) | | | [removed: |] 0 | | | | [removed: |] 100 | % | | [removed: |] [added: 0%] | [removed: 0] | [removed: %] | | 0% | | | | [removed: | | | 79] [added: 66%] | [removed: %] | | | [added: 34%] | [removed: 21] | [removed: %] |

Part I [removed: ◆] [added: ♦] Item 2 [removed: -] [added: –] Properties

| | | [removed: Total] [added: Total] Annual Production (in tons) [removed: (add 000) For] [added: (in thousands) For] year ended December [removed: 31 | | |] [added: 31] | | | | | | | | | | | | [removed: Number] [added: Number] of years of production available at December [removed: 31, |] [added: 31,] | | |

| [removed: Reportable Segment | | 2018 | |] [added: Reportable Segment] | | [added: 2019] | [removed: 2017] | | | [added: 2018] | | [removed: 2016] | | [added: 2017] | | | [removed: 2018] | [added: 2019] | | |

| Mid-America Group | | | [removed: | 78,137 | | |] [added: 91,108] | | [removed: 70,340] | | [added: 78,137] | | | [removed: 67,431] | [added: 70,340] | | | | [removed: 105.7] [added: 89] | |

| Southeast Group | | | [removed: | 25,328 | | |] [added: 28,465] | | [removed: 22,274] | | [added: 25,328] | | | [removed: 20,468] | [added: 22,274] | | | | [removed: 139.2] [added: 123] | |

| West Group | | | [removed: | 71,538 | | |] [added: 74,483] | | [removed: 74,184] | | [added: 71,538] | | | [removed: 75,421] | [added: 74,184] | | | | [removed: 78.2] [added: 75] | |

| [removed: Total] [added: Total] Aggregates Product [removed: Line | | | | 175,003] [added: Line] | | | [added: 194,056] | | [removed: 166,798] | | [added: 175,003] | | | [removed: 163,320] | [added: 166,798] | | | | [removed: 99.3] [added: 89] | |

[removed: Cement] [added: Cement] Product [removed: Line][added: Line]

As of December 31, [removed: 2018,] [added: 2019,] the Company, through its subsidiaries, processed or shipped cement from [removed: six] [added: seven] properties in [removed: one state,] [added: two states,] of which [removed: four] [added: five] are located on land owned by the Company free of major encumbrances and two are on leased land.

The Company’s cement product line has production facilities located at two sites in Texas: Midlothian, Texas, south of Dallas/Fort Worth; [added: and] Hunter, Texas, north of San Antonio.

The following table summarizes certain information about the Company’s cement manufacturing facilities at December 31, [removed: 2018:][added: 2019:]

| [removed: Plant | | Rated Annual Productive Capacity-Tons of Clinker | | | | | Manufacturing Process |] [added: Plant] | | [added: Rated Annual Productive Capacity-Tons of Clinker] | | [removed: Service Date] | | [added: Manufacturing Process] | | [added: Service Date] | [removed: Internally Estimated Minimum Reserves—Years] | [added: Internally Estimated Minimum Reserves—Years] | | |

| Midlothian, TX | | [removed: 2,200,000] | [removed: |] [added: 2,400,000] | | | Dry | | [removed: | | |] 2001 | | | [removed: | |] 65 | | [removed: | |]

| Hunter, TX | | [removed: 2,250,000] | [removed: |] [added: 2,100,000] | | | Dry | | [removed: | | | 2013 and] [added: 2013,] 1981 | | | [removed: | |] 140 | | [removed: | |]

| [removed: Total | | 4,450,000 | | | | | |] [added: Total] | | | [added: 4,500,000] | | | | | | | | | |

As of December 31, [removed: 2018,] [added: 2019,] the Company estimated its total proven and probable limestone reserves on such land to be approximately [removed: 692] [added: 687] million tons.

As of December 31, [removed: 2018,] [added: 2019,] the Company, through its subsidiaries, also operated, directly or through third parties, four cement distribution terminals and owned the real estate at the California cement grinding and packaging facility it sold on September 30, 2015, which it expects to sell for non-cement use.

[removed: Magnesia] [added: Magnesia] Specialties [removed: Business][added: Business]

[removed: Other Properties][added: Other Properties]

[removed: Condition] [added: Condition] and [removed: Utilization][added: Utilization]

During [removed: 2018,] [added: 2019,] the principal properties of the aggregates product line were believed to be utilized at average productive capacities of approximately [removed: 65%] [added: 75% to 80%] and were capable of supporting a higher level of market demand.

For example, [added: during] the [added: Great Recession the] Company reduced operating hours at a number of its facilities, closed some of [added: its facilities, and temporarily idled some of its facilities.]

[added: Part I ♦] Item 2 [removed: -] [added: –] Properties [removed: ◆ Part I]

[removed: The] [added: When business improved, the] Company [removed: expects, however, it will be] [added: was] able to [added: gradually] resume production at its normalized levels and increase production again as demand for its products [removed: increases.][added: increased.]

During [removed: 2018] [added: 2019,] the Texas cement plants operated on average at [removed: 75% to] 80% [added: to 85%] utilization.

The Portland Cement Association (“PCA”) has projected that cement consumption will slow modestly in [removed: 2019] [added: 2020] from [removed: 2018,] [added: 2019,] with the rate of change decreasing in [removed: 2019] [added: 2020] to [removed: 2.6%] [added: 1.7%] from [removed: 2.9%] [added: 2.4%] in [removed: 2018.][added: 2019.]

Due to the [removed: 24/7/365] [added: “24/7/365”] nature of cement operations, significant gains in plant utilization and efficiency are typically achieved only during plant shutdowns.

In the current operating [removed: environment] [added: environment,] where steel utilization is at levels close to or below 70% and the strength of the United States dollar pressures product competitiveness in international markets, any unplanned change in costs or customers introduces volatility to the earnings of the Magnesia Specialties segment.

The dolomitic lime business of the Magnesia Specialties segment operated at [removed: 74%] [added: 80%] utilization in [removed: 2018.][added: 2019.]

Building Materials Business

As of December 31, 2019, the Company processed or shipped aggregates from more than 300 quarries, underground mines, and distribution yards in 27 states, Canada, and the Bahamas, of which 124 are located on land owned by the Company free of major encumbrances, 59 are on land owned in part and leased in part, 109 are on leased land, and 10 are on facilities neither owned nor leased, where raw materials are removed under an agreement.

The Company’s aggregates reserves, on the average, represent 89 years at current production levels.

However, certain locations may be subject to more limited reserves and may not be able to expand.

In addition, as of December 31, 2019, the Company processed and shipped ready mixed concrete and/or asphalt products from 148 properties in five states, of which 124 are located on land owned by the Company free of major encumbrances, one is on land owned in part and leased in part, and 23 are on leased land.

The Company uses various drilling methods, depending on the type of aggregate, to estimate aggregates reserves that are economically mineable.

The extent of drilling varies and depends on whether the location is a potential new site (“greensite”), an existing location, or a potential acquisition.

More extensive drilling is performed for potential greensites and acquisitions, and in rare cases, the Company may rely on existing geological data or results of prior drilling by third parties.

Subsequent to drilling, selected core samples are tested for soundness, abrasion resistance, and other physical properties relevant to the aggregates industry.

If the reserves meet the Company’s standards and are economically mineable, then they are either leased or purchased.

The Company estimates proven and probable reserves based on the results of drilling.

Proven reserves are reserves of deposits designated using closely spaced drill data, and based on that data the reserves are believed to be relatively homogenous.

Proven reserves have a certainty of 85% to 90%.

Probable reserves are reserves that are inferred utilizing fewer drill holes and/or assumptions about the economically mineable reserves based on local geology or drill results from adjacent properties.

The degree of certainty for probable reserves is 70% to 75%.

In determining the amount of reserves, the Company’s policy is to not include calculations that exceed certain depths, so for deposits, such as granite, that typically continue to depths well below the ground, there may be additional deposits that are not included in the reserve calculations.

The Company also deducts reserves not available due to property boundaries, set-backs, and plant configurations, as deemed appropriate when estimating reserves.

The Company uses the same methods of analysis to evaluate and estimate the amount of its aggregates reserves used in the cement manufacturing process for its cement product line as it does for its aggregates product line.

For additional information on the Company’s assessment of reserves, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Other Financial Information - Critical Accounting Policies and Estimates - Property, Plant and Equipment” included under Article 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this Form 10-K.

Set forth in the tables below are the Company’s estimates of reserves of recoverable aggregates (hard rock and sand and gravel) of suitable quality for economic extraction, shown on a state-by-state basis, and the Company’s total annual production for the last three years, along with the Company’s estimate of years of production available, shown on a segment-by-segment basis.

The number of producing quarries shown on the table includes underground mines.

The Company’s reserve estimates for the last two years are shown for comparison purposes on a state-by-state basis.

The changes in reserve estimates at a particular state level from year to year reflect the tonnages of reserves on locations that have been opened or closed during the year, whether by acquisition, disposition, or otherwise; production and sales in the normal course of business; additional reserve estimates or refinements of the Company’s existing reserve estimates; opening of additional reserves at existing locations; the depletion of reserves at existing locations; and other factors.

The Company evaluates its

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| Celebrating 25 Years as a Public Company |  | Form 10-K ♦ Page 25 |

reserve estimates primarily on a Company-wide, or segment-by-segment basis, and does not believe comparisons of changes in reserve estimates on a state-by-state basis from year to year are particularly meaningful.

The Company’s estimate of reserves shown in the tables below include reserves used in the Company’s cement product line and Magnesia Specialties business.

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| Alabama | | 4 | | | 174,754 | | | | 11,623 | | | | 171,371 | | | | 11,623 | | | | (3,382 | ) | | | 0 | | | | 100 | % | | 0% | | | | 0% | | | | 55% | | | | 45% | | |

| Arkansas | | 3 | | | 230,811 | | | | 0 | | | | 242,504 | | | | 0 | | | | 11,692 | | | | 0 | | | | 100 | % | | 0% | | | | 0% | | | | 48% | | | | 52% | | |

| Colorado | | 10 | | | 754,812 | | | | 117,204 | | | | 750,309 | | | | 182,829 | | | | (4,503 | ) | | | 65,625 | | | | 91 | % | | 9% | | | | 0% | | | | 19% | | | | 81% | | |

| Florida | | 1 | | | 122,724 | | | | 0 | | | | 122,022 | | | | 0 | | | | (702 | ) | | | 0 | | | | 100 | % | | 0% | | | | 0% | | | | 36% | | | | 64% | | |

| Georgia | | 18 | | | 2,185,263 | | | | 19,380 | | | | 2,168,486 | | | | 18,813 | | | | (16,777 | ) | | | 568 | | | | 97 | % | | 3% | | | | 0% | | | | 83% | | | | 17% | | |

| Indiana | | 10 | | | 481,120 | | | | 60,392 | | | | 476,879 | | | | 73,678 | | | | (4,240 | ) | | | 13,286 | | | | 100 | % | | 0% | | | | 0% | | | | 52% | | | | 48% | | |

| Iowa | | 25 | | | 727,232 | | | | 21,802 | | | | 703,737 | | | | 19,852 | | | | (23,495 | ) | | | 1,951 | | | | 100 | % | | 0% | | | | 0% | | | | 30% | | | | 70% | | |

| Kansas | | 3 | | | 75,210 | | | | 0 | | | | 68,928 | | | | 0 | | | | (6,283 | ) | | | 0 | | | | 100 | % | | 0% | | | | 8% | | | | 40% | | | | 60% | | |

| Kentucky | | 6 | | | 179,959 | | | | 24,206 | | | | 177,666 | | | | 21,641 | | | | (2,293 | ) | | | 2,565 | | | | 100 | % | | 0% | | | | 0% | | | | 70% | | | | 30% | | |

| Louisiana | | 2 | | | 0 | | | | 7,830 | | | | 0 | | | | 7,545 | | | | 0 | | | | 285 | | | | 100 | % | | 0% | | | | 0% | | | | 0% | | | | 100% | | |

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| Alabama | | | | 4 | | | | | 126,447 | | | | | 11,623 | | | | | 174,754 | | | | | 11,623 | | | | | 48,307 | | | | | 0 | | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 54 | % | | | | 46 | % |

| Arkansas | | | | 3 | | | | | 223,326 | | | | | 0 | | | | | 230,811 | | | | | 0 | | | | | 7,485 | | | | | 0 | | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 50 | % | | | | 50 | % |

| Colorado | | | | 11 | | | | | 749,238 | | | | | 98,888 | | | | | 754,812 | | | | | 117,204 | | | | | 5,574 | | | | | 18,315 | | | | | 99 | % | | | | 1 | % | | 0% | | | | | | | 22 | % | | | | 78 | % |

| Florida | | | | 1 | | | | | 123,385 | | | | | 0 | | | | | 122,724 | | | | | 0 | | | | | (661 | ) | | | | 0 | | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 35 | % | | | | 65 | % |

| Georgia | | | | 18 | | | | | 2,062,738 | | | | | 0 | | | | | 2,185,263 | | | | | 19,380 | | | | | 122,525 | | | | | 19,380 | | | | | 97 | % | | | | 3 | % | | 0% | | | | | | | 83 | % | | | | 17 | % |

| Indiana | | | | 10 | | | | | 486,057 | | | | | 46,530 | | | | | 481,120 | | | | | 60,392 | | | | | (4,938 | ) | | | | 13,862 | | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 52 | % | | | | 48 | % |

| Iowa | | | | 26 | | | | | 738,800 | | | | | 17,150 | | | | | 727,232 | | | | | 21,802 | | | | | (11,568 | ) | | | | 4,652 | | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 30 | % | | | | 70 | % |

| Kansas | | | | 3 | | | | | 78,102 | | | | | 0 | | | | | 75,210 | | | | | 0 | | | | | (2,892 | ) | | | | 0 | | | | | 100 | % | | | | 0 | % | | 8% | | | | | | | 36 | % | | | | 64 | % |

| Kentucky | | | | 6 | | | | | 0 | | | | | 24,595 | | | | | 179,959 | | | | | 24,206 | | | | | 179,959 | | | | | (389 | ) | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 80 | % | | | | 20 | % |

| Louisiana | | | | 3 | | | | | 0 | | | | | 8,158 | | | | | 0 | | | | | 7,830 | | | | | 0 | | | | | (328 | ) | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 0 | % | | | | 100 | % |

| Maryland | | | | 8 | | | | | 120,524 | | | | | 0 | | | | | 883,671 | | | | | 6,902 | | | | | 763,147 | | | | | 6,902 | | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 99 | % | | | | 1 | % |

| Minnesota | | | | 2 | | | | | 323,298 | | | | | 0 | | | | | 320,612 | | | | | 0 | | | | | (2,686 | ) | | | | 0 | | | | | 67 | % | | | | 33 | % | | 0% | | | | | | | 64 | % | | | | 36 | % |

| Missouri | | | | 4 | | | | | 362,892 | | | | | 0 | | | | | 347,721 | | | | | 0 | | | | | (15,171 | ) | | | | 0 | | | | | 90 | % | | | | 10 | % | | 0% | | | | | | | 6 | % | | | | 94 | % |

| Nebraska | | | | 6 | | | | | 171,174 | | | | | 0 | | | | | 158,074 | | | | | 23,581 | | | | | (13,100 | ) | | | | 23,581 | | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 48 | % | | | | 52 | % |

| Nevada | | | | 1 | | | | | 135,338 | | | | | 0 | | | | | 134,507 | | | | | 0 | | | | | (831 | ) | | | | 0 | | | | | 99 | % | | | | 1 | % | | 0% | | | | | | | 92 | % | | | | 8 | % |

| North Carolina | | | | 38 | | | | | 3,266,317 | | | | | 1,807 | | | | | 3,367,662 | | | | | 1,696 | | | | | 101,345 | | | | | (111 | ) | | | | 75 | % | | | | 25 | % | | 0% | | | | | | | 74 | % | | | | 26 | % |

| Ohio* | | | | 11 | | | | | 576,166 | | | | | 117,978 | | | | | 571,805 | | | | | 115,656 | | | | | (4,362 | ) | | | | (2,322 | ) | | | | 45 | % | | | | 55 | % | | 0% | | | | | | | 96 | % | | | | 4 | % |

| Oklahoma | | | | 9 | | | | | 1,203,406 | | | | | 11,892 | | | | | 1,191,901 | | | | | 11,647 | | | | | (11,505 | ) | | | | (245 | ) | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 86 | % | | | | 14 | % |

| South Carolina | | | | 10 | | | | | 707,437 | | | | | 27,481 | | | | | 773,008 | | | | | 77,893 | | | | | 65,571 | | | | | 50,412 | | | | | 97 | % | | | | 3 | % | | 0% | | | | | | | 82 | % | | | | 18 | % |

| Texas | | | | 25 | | | | | 2,462,794 | | | | | 125,561 | | | | | 2,481,790 | | | | | 137,278 | | | | | 18,996 | | | | | 11,717 | | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 60 | % | | | | 40 | % |

| Utah | | | | 1 | | | | | 22,472 | | | | | 0 | | | | | 22,147 | | | | | 0 | | | | | (324 | ) | | | | 0 | | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 0 | % | | | | 100 | % |

| Virginia | | | | 5 | | | | | 337,285 | | | | | 0 | | | | | 333,860 | | | | | 0 | | | | | (3,425 | ) | | | | 0 | | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 60 | % | | | | 40 | % |

| Washington | | | | 2 | | | | | 6,585 | | | | | 17,484 | | | | | 6,274 | | | | | 17,097 | | | | | (311 | ) | | | | (386 | ) | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 73 | % | | | | 27 | % |

| Wyoming | | | | 2 | | | | | 156,891 | | | | | 0 | | | | | 153,092 | | | | | 0 | | | | | (3,799 | ) | | | | 0 | | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 42 | % | | | | 58 | % |

| U. S. Total | | | | 213 | | | | | 14,499,731 | | | | | 576,386 | | | | | 15,809,851 | | | | | 721,427 | | | | | 1,310,120 | | | | | 145,041 | | | | | 91 | % | | | | 9 | % | | 0% | | | | | | | 67 | % | | | | 33 | % |

| Non-U. S. | | | | 2 | | | | | 848,190 | | | | | 0 | | | | | 840,939 | | | | | 0 | | | | | (7,251 | ) | | | | 0 | | | | | 100 | % | | | | 0 | % | | 0% | | | | | | | 100 | % | | | | 0 | % |

| Grand Total | | | | 215 | | | | | 15,347,920 | | | | | 576,386 | | | | | 16,650,790 | | | | | 721,427 | | | | | 1,302,869 | | | | | 145,041 | | | | | | | | | | | | | | | | | | | | | | | | | | |

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| | | | |  | | 2018 FORM 10-K | | 25 |

##### [Table of Contents](#toc)

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| 26 | | 2018 FORM 10-K | |  | | | | |

its facilities, and temporarily idled some of its facilities.

In 2018, the Company’s aggregates product line operated at a level significantly below capacity, which restricted the Company’s ability to capitalize $44.5 million of costs that could have been inventoried under normal operating conditions.

If demand does not improve over the near term, such reductions and temporary idling could continue.

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95 to this [removed: Annual Report on] Form 10-K.

The following sets forth certain information regarding the executive officers of Martin Marietta [removed: Materials, Inc.] as of February [removed: 8, 2019:][added: 21, 2020:]

| [removed: Name | | Age |] [added: Name] | [removed: Present Position] [added: Age] | [added: Present Position] | [removed: Year] [added: Year] Assumed Present [removed: Position |] [added: Position] | [removed: Other] [added: Other] Positions and Other Business Experience Within the Last Five [removed: Years] [added: Years] |

| C. Howard Nye | [removed: | 56 |] [added: 57] | Chairman of the Board; | [removed: |] 2014 | | [removed: |]

| | | [removed: | |] Chief Executive Officer; | [removed: |] 2010 | | [removed: |]

| | | [removed: | |] President; | [removed: |] 2006 | | [removed: |]

| | | [removed: | |] President of Aggregates | [removed: |] 2010 | | [removed: |]

| | | [removed: | |] Business; | | | [removed: | |]

| | | [removed: | |] Chairman of Magnesia | [removed: |] 2007 | | [removed: |]

| | | [removed: | |] Specialties Business | | | [removed: | |]

| James A. J. Nickolas | [removed: | 48 |] [added: 49] | Senior Vice President, Chief Financial Officer | [removed: |] 2017 | [removed: |] [added: Principal Accounting Officer (March 2019- May 2019);] Head, Corporate Development [removed: group,] [added: and] Caterpillar [added: Ventures, Caterpillar] Inc. (January-July 2017), Group Chief Financial Officer of Caterpillar’s Resources Industries segment (October 2014-December [removed: 2016), Group Chief Financial Officer of Caterpillar’s Global Mining business unit (December 2012-September 2014)] [added: 2016)] |

| Roselyn R. Bar | [removed: | 60 |] [added: 61] | Executive Vice President; | [removed: |] 2015 | [removed: |] Senior Vice President (2005-2015) |

| | | [removed: | |] General Counsel; | [removed: |] 2001 | | [removed: |]

| | | [removed: | |] Corporate Secretary | [removed: |] 1997 | | [removed: |]

| Daniel L. Grant | [removed: | 64 |] [added: 65] | Senior Vice President, [removed: |] [added: Strategy & Development] | 2013 | | [removed: |]

| [removed: Dana F. Guzzo] | | [removed: 53] [added: Chief Information Officer] | [added: 2015] | [removed: Senior] Vice [removed: President; | | 2011 | | Chief] [added: President,] Information [removed: Officer (2011-2015)] [added: Services, Liggett Vector Brands (2007-2015)] |

| John P. Mohr | [removed: | 54 |] [added: 55] | Senior Vice President, | [removed: |] 2017 | [removed: |] Vice President (2015-2017); |

[added: Part II ♦] Item 5 [removed: -] [added: –] Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities [removed: ◆ Part II]

| Form 10-K ♦ Page 28 |  | Celebrating 25 Years as a Public Company |

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Part I ♦ Information About Our Executive Officers

Information about our Executive Officers

| --- | --- | --- | --- | --- |

| Robert J. Cardin | 56 | Senior Vice President; Controller, and Chief Accounting Officer | 2019 | Vice President (March 2019-May 2019); Chief Accounting Officer, SWM International (2013-2019), Interim CFO, SWM International (April 2015-October 2015) |

| Craig M. LaTorre | 52 | Senior Vice President, Chief Human Resource Officer | 2019 | Vice President, Human Resources (July 2018-March 2019); Senior Vice President; and Chief Human Resources Officer (2013-2018), Andeavor (formerly known as Tesoro Corporation) |

| | | |

| --- | --- | --- |

| Celebrating 25 Years as a Public Company |  | Form 10-K ♦ Page 29 |

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| | | | |  | | 2018 FORM 10-K | | 27 |

##### [Table of Contents](#toc)

Part I ◆ Item 4 - Mine Safety Disclosures

Executive Officers of the Registrant

| | | | | Strategy & Development | | | | |

| | | | | Chief Accounting Officer; | | 2006 | | |

| | | | | Controller | | 2005 | | |

| Donald A. McCunniff | | 61 | | Senior Vice President, Human Resources | | 2011 | | |

| | | | | Chief Information Officer | | 2015 | | Vice President, Information Services, Liggett Vector Brands (2007-2015) |

| 28 | | 2018 FORM 10-K | |  | | | | |

[removed: Market] [added: Market] Information and [removed: Holders][added: Holders]

There were [removed: 878] [added: 834] holders of record of the Company’s [removed: Common Stock] [added: common stock] as of February [removed: 15, 2019.][added: 14, 2020.]

[removed: Issuer] [added: Issuer] Purchases of Equity [removed: Securities][added: Securities]

| [removed: Period] [added: Period] | | [removed: Total] [added: Total] Number of Shares [removed: Purchased] [added: Purchased] | | | | [removed: Average] [added: Average] Price Paid per [removed: Share] [added: Share] | | | | [removed: Total] [added: Total] Number of Shares Purchased as Part of Publicly Announced Plans or [removed: Programs(1)] [added: Programs1] | | | | [removed: Maximum] [added: Maximum] Number of Shares that May Yet be Purchased Under the Plans or [removed: Programs] [added: Programs] | | |

| [removed: (1)] [added: 1] | The Company’s stock repurchase program, which currently authorizes the repurchase of 20 million shares of common stock, is approved by the [removed: Company’s] Board of Directors from time to time, and updated as appropriate by the [removed: Board,] [added: Board of Directors,] and announced to the public by press release. The latest announcement on this topic was the Company’s press release dated February 10, 2015 that its Board of Directors had authorized the repurchase of up to 20 million shares of its outstanding common stock, which included 5 million shares authorized under the Company’s previous share repurchase program. Previous press releases announcing prior share repurchase programs and the related amounts of common stock included under the share repurchase authorizations were as follows: (i) press release dated August 15, 2007 (5 million shares); (ii) press release dated February 22, 2006 (5 million shares); and (iii) May 6, 1994 (2.5 million shares). |

Common Stock Performance Graph

The following graph and accompanying table compare the seven-year cumulative total return from December 31, 2012 to December 31, 2019 for (a) the Company’s common stock, (b) the Standard & Poor’s 500 Composite Stock Index, and (c) the Standard & Poor’s 500 Materials Index.


| Form 10-K ♦ Page 30 |  | Celebrating 25 Years as a Public Company |

| --- | --- | --- |

Part II ♦ Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

| October 1, 2019 — October 31, 2019 | | | 20,290 | | | $ | 264.86 | | | | 20,290 | | | | 13,865,827 | |

| November 1, 2019 — November 30, 2019 | | | 62,752 | | | $ | 258.09 | | | | 62,752 | | | | 13,803,075 | |

| December 1, 2019 — December 31, 2019 | | | 71,507 | | | $ | 270.99 | | | | 71,507 | | | | 13,731,568 | |

| Total | | | 154,549 | | | $ | 264.95 | | | | 154,549 | | | | 13,731,568 | |

| | | |

| --- | --- | --- |

| Celebrating 25 Years as a Public Company |  | Form 10-K ♦ Page 31 |

Part II ♦ Item 6 – Selected Financial Data

| | | | | | | | | | | | | | | | | |

| October 1, 2018 – October 31, 2018 | | | 0 | | | $ | — | | | | 0 | | | | 14,364,323 | |

| November 1, 2018 – November 30, 2018 | | | 125,507 | | | $ | 186.92 | | | | 125,507 | | | | 14,238,816 | |

| December 1, 2018 – December 31, 2018 | | | 91,065 | | | $ | 181.63 | | | | 91,065 | | | | 14,147,751 | |

| Total | | | 216,572 | | | $ | 184.70 | | | | 216,572 | | | | 14,147,751 | |

The selected financial data below should be read in conjunction with Item 7 of this Form 10-K, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as the Company’s consolidated financial statements and related notes included under Item 8, “Financial Statements and Supplemental Data,” of this Form 10-K.

Five Year Selected Financial Data

| (in millions, except per share data) | | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | | | 2015 | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Consolidated Operating Results | | | | | | | | | | | | | | | | | | | | |

| Products and services revenues1 | | $ | 4,422.3 | | | $ | 3,980.4 | | | $ | 3,723.5 | | | $ | 3,578.6 | | | $ | 3,269.2 | |

| Freight revenues1 | | | 316.8 | | | | 263.9 | | | | 242.1 | | | | 240.1 | | | | 270.4 | |

| Total revenues | | | 4,739.1 | | | | 4,244.3 | | | | 3,965.6 | | | | 3,818.7 | | | | 3,539.6 | |

| Cost of revenues - products and services | | | 3,239.1 | | | | 3,009.8 | | | | 2,749.5 | | | | 2,665.0 | | | | 2,541.2 | |

| Cost of revenues - freight | | | 321.0 | | | | 267.9 | | | | 244.2 | | | | 242.0 | | | | 271.5 | |

| Total cost of revenues2 | | | 3,560.1 | | | | 3,277.7 | | | | 2,993.7 | | | | 2,907.0 | | | | 2,812.7 | |

| Gross Profit2 | | | 1,179.0 | | | | 966.6 | | | | 971.9 | | | | 911.7 | | | | 726.9 | |

| Selling, general and administrative expenses2 | | | 302.7 | | | | 280.6 | | | | 262.1 | | | | 241.6 | | | | 210.8 | |

| Acquisition-related expenses, net | | | 0.5 | | | | 13.5 | | | | 8.6 | | | | 0.9 | | | | 6.3 | |

| Other operating (income) and expenses, net | | | (9.1 | ) | | | (18.2 | ) | | | 0.8 | | | | (8.1 | ) | | | 15.6 | |

| Earnings from Operations2 | | | 884.9 | | | | 690.7 | | | | 700.4 | | | | 677.3 | | | | 494.2 | |

| Interest expense | | | 129.3 | | | | 137.1 | | | | 91.5 | | | | 81.7 | | | | 76.3 | |

| Other nonoperating expenses and (income), net2 | | | 7.3 | | | | (22.5 | ) | | | (10.0 | ) | | | (11.4 | ) | | | 4.1 | |

| Earnings before income tax expense (benefit) | | | 748.3 | | | | 576.1 | | | | 618.9 | | | | 607.0 | | | | 413.8 | |

| Income tax expense (benefit) | | | 136.3 | | | | 105.7 | | | | (94.5 | ) | | | 181.6 | | | | 124.9 | |

| Consolidated net earnings | | | 612.0 | | | | 470.4 | | | | 713.4 | | | | 425.4 | | | | 288.9 | |

| Less: Net earnings attributable to noncontrolling interests | | | 0.1 | | | | 0.4 | | | | 0.1 | | | | — | | | | 0.1 | |

| Net Earnings Attributable to Martin Marietta | | $ | 611.9 | | | $ | 470.0 | | | $ | 713.3 | | | $ | 425.4 | | | $ | 288.8 | |

| Net Earnings Attributable to Martin Marietta Per Common Share (see Note A): | | | | | | | | | | | | | | | | | | | | |

| Basic attributable to common shareholders | | $ | 9.77 | | | $ | 7.46 | | | $ | 11.30 | | | $ | 6.66 | | | $ | 4.31 | |

| Diluted attributable to common shareholders | | $ | 9.74 | | | $ | 7.43 | | | $ | 11.25 | | | $ | 6.63 | | | $ | 4.29 | |

| | | | | | | | | | | | | | | | | | | | | |

| Cash Dividends Per Common Share | | $ | 2.06 | | | $ | 1.84 | | | $ | 1.72 | | | $ | 1.64 | | | $ | 1.60 | |

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (in millions) | | 2019 | | | | 20183 | | | | 20173 | | | | 2016 | | | | 2015 | | |

| Condensed Consolidated Balance Sheet Data | | | | | | | | | | | | | | | | | | | | |

| Total current assets4 | | $ | 1,426.7 | | | $ | 1,365.8 | | | $ | 2,631.2 | | | $ | 1,086.4 | | | $ | 1,081.6 | |

| Property, plant and equipment, net | | | 5,206.0 | | | | 5,157.2 | | | | 3,592.8 | | | | 3,423.4 | | | | 3,156.0 | |

| Goodwill | | | 2,396.8 | | | | 2,399.1 | | | | 2,160.3 | | | | 2,159.3 | | | | 2,068.2 | |

| Other intangibles, net | | | 486.8 | | | | 501.3 | | | | 506.3 | | | | 511.3 | | | | 510.6 | |

| Other noncurrent assets4,5 | | | 615.3 | | | | 128.0 | | | | 101.9 | | | | 120.5 | | | | 141.2 | |

| Total Assets | | $ | 10,131.6 | | | $ | 9,551.4 | | | $ | 8,992.5 | | | $ | 7,300.9 | | | $ | 6,957.6 | |

| Current liabilities – other5 | | $ | 498.5 | | | $ | 396.7 | | | $ | 394.3 | | | $ | 366.6 | | | $ | 347.9 | |

| Current maturities of long-term debt4 | | | 340.0 | | | | 390.0 | | | | 299.9 | | | | 180.0 | | | | 18.7 | |

The information required in response to this Item 6 is included under the caption “Five Year Summary” of the 2018 Annual Report filed as Exhibit 13.01 to this Form 10-K, and that information is incorporated herein by reference.

| Index to Consolidated Financial Statements | | | Page |

| --- | --- | --- | --- |

| | | | |

| | [Statement of Responsibility and Management’s Report on](#STATEMENT_FINANCIAL_RESPONSIBILITY_MANAG) [Internal Control over Financial Reporting](#STATEMENT_FINANCIAL_RESPONSIBILITY_MANAG) | | 72 |

| | | | |

| | [Report of Independent Registered Public Accounting Firm](#REPORT_INDEPENDENT_REGISTERED_PUBLIC_ACC) | | 74 |

| | | | |

| | [Consolidated Statements of Earnings –](#STATEMENTS_OF_EARNINGS) [for years ended December 31, 2019, 2018, and 2017](#STATEMENTS_OF_EARNINGS) | | 76 |

| | | | |

| | [Consolidated Statements of Comprehensive Earnings –](#STATEMENTS_OF_COMPREHENSIVE_EARNINGS) [for years ended December 31,2019, 2018, and 2017](#STATEMENTS_OF_COMPREHENSIVE_EARNINGS) | | 77 |

| | | | |

| | [Consolidated Balance Sheets –](#BALANCE_SHEETS) [at December 31, 2019 and 2018](#BALANCE_SHEETS) | | 78 |

| | | | |

| | [Consolidated Statements of Cash Flows –](#STATEMENT_OF_CASH_FLOWS) [for years ended December 31, 2019, 2018, and 2017](#STATEMENT_OF_CASH_FLOWS) | | 79 |

| | | | |

| | [Consolidated Statements of Total Equity –](#STATEMENT_OF_TOTAL_EQUITY) [for years ended December 31, 2019, 2018, and 2017](#STATEMENT_OF_TOTAL_EQUITY) | | 80 |

| | | | |

| | [Notes to Financial Statements](#NOTE_A_ACCOUNTING_POLICIES) | | 81 |

Additional information required in response to this Item 8 is included under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included as Item 7 of this Form 10-K.

Statement of Responsibility and Management’s Report on Internal Control over Financial Reporting

Management’s Statement of Responsibility

The management of Martin Marietta Materials, Inc. (the “Company” or “Martin Marietta”) is responsible for the consolidated financial statements, the related financial information contained in this Form 10-K and the establishment and maintenance of adequate internal control over financial reporting.

The consolidated balance sheets for Martin Marietta, at December 31, 2019 and 2018, and the related consolidated statements of earnings, comprehensive earnings, total equity and cash flows for each of the three years in the period ended December 31, 2019, include amounts based on estimates and judgments and have been prepared in accordance with accounting principles generally accepted in the United States applied on a consistent basis.

A system of internal control over financial reporting is designed to provide reasonable assurance, in a cost-effective manner, that assets are safeguarded, transactions are executed and recorded in accordance with management’s authorization, accountability for assets is maintained and financial statements are prepared and presented fairly in accordance with accounting principles generally accepted in the United States.

Internal control systems over financial reporting have inherent limitations and may not prevent or detect misstatements.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The Company operates in an environment that establishes an appropriate system of internal control over financial reporting and ensures that the system is maintained, assessed and monitored on a periodic basis.

This internal control system includes examinations by internal audit staff and oversight by the Audit Committee of the Board of Directors.

The Company’s management recognizes its responsibility to foster a strong ethical climate.

Management has issued written policy statements that document the Company’s business code of ethics.

The importance of ethical behavior is regularly communicated to all employees through the distribution of the *Code of Ethical Business Conduct* and through ongoing education and review programs designed to create a strong commitment to ethical business practices.

| Form 10-K ♦ Page 72 |  | Celebrating 25 Years as a Public Company |

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| | | |

Part II ♦ Item 8 – Financial Statements and Supplementary Data

The Audit Committee of the Board of Directors, which consists of three independent, nonemployee directors, meets periodically and separately with management, the independent auditors and the internal auditors to review the activities of each.

The Audit Committee meets standards established by the Securities and Exchange Commission (SEC) and the New York Stock Exchange as they relate to the composition and practices of audit committees.

Management’s Report on Internal Control over Financial Reporting

The management of Martin Marietta is responsible for establishing and maintaining adequate internal control over financial reporting.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019.

The information required in response to this Item 8 is included under the caption “Consolidated Statements of Earnings,” “Consolidated Statements of Comprehensive Earnings,” “Consolidated Balance Sheets,” “Consolidated Statements of Cash Flows,” “Consolidated Statements of Total Equity,” “Notes to Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Quarterly Performance (Unaudited)” of the 2018 Annual Report filed as Exhibit 13.01 to this Form 10-K, and that information is incorporated herein by reference, except that the information contained under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Outlook 2019” in the 2018 Annual Report is not incorporated herein by reference.

[removed: Evaluation] [added: Evaluation] of Disclosure Controls and [removed: Procedures][added: Procedures]

As of December 31, [removed: 2018,] [added: 2019,] an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures.

[removed: Management’s] [added: Management’s] Report on Internal Control over Financial [removed: Reporting][added: Reporting]

Our management’s report on internal control over financial reporting is included [removed: in the Annual Report filed] as [removed: Exhibit 13.01 to this Form 10-K, under] the [removed: heading] “Statement of Financial Responsibility and Management’s Report on Internal Controls over Financial [removed: Reporting,”] [added: Reporting” in Item 8, “Financial Statements] and [removed: is incorporated by reference.][added: Supplemental Data,” of this Form 10-K.]

The Company’s management concluded that the Company’s internal control over financial reporting was effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles as of December 31, [removed: 2018.][added: 2019.]

[removed: Changes] [added: Changes] in Internal Control over Financial [removed: Reporting][added: Reporting]

There were no changes in the Company’s internal control over financial reporting during the most recently completed fiscal quarter ended December 31, [removed: 2018] [added: 2019] that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

[removed: Limitations] [added: Limitations] on the Effectiveness of [removed: Controls][added: Controls]

Further, the design of a control system must reflect the fact that there are resource [added: constraints, and the benefits of controls must be considered relative to their costs.]

[added: Part II ♦] Item 9A [removed: -] [added: –] Controls and Procedures [removed: ◆Part II]

These inherent limitations include the realities that judgments in [removed: decision-making] [added: decision making] can be faulty and that breakdowns can occur because of simple error or mistake.

PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the Company’s consolidated financial statements contained herein, also audited the Company’s internal control over financial reporting as of December 31, 2019.

The audit report is included in Item 8, “Financial Statements and Supplementary Data,” of this Form 10-K.

| | | |

| --- | --- | --- |

| Form 10-K ♦ 118 |  | Celebrating 25 Years as a Public Company |

Management has excluded certain elements of the internal control over financial reporting of Bluegrass Materials Company (Bluegrass) from its assessment of the Company’s internal control over financial reporting as of December 31, 2018 because it was acquired by the Company in a purchase business combination during 2018.

Subsequent to the acquisition, certain elements of Bluegrass’ internal control over financial reporting and related processes were integrated into the Company’s existing systems and internal control over financial reporting.

Those controls that were not integrated have been excluded from management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2018.

The excluded elements represent controls over accounts of less than 1% of consolidated assets and 4% of consolidated total revenues as of and for the year ended December 31, 2018.

| | | | | | | | | |

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| 30 | | 2018 FORM 10-K | |  | | | | |

##### [Table of Contents](#toc)

constraints, and the benefits of controls must be considered relative to their costs.

| | | |

| --- | --- | --- |

| Celebrating 25 Years as a Public Company |  | Form 10-K ♦ Page 119 |

Part III ♦ Item 10 – Directors, Executive Officers and Corporate Governance

| | | | | | | | | |

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| | | | |  | | 2018 FORM 10-K | | 31 |

##### [Table of Contents](#toc)

Part III ◆

The information concerning directors of the Company, the Audit Committee of the Board of Directors, and the Audit Committee financial expert serving on the Audit Committee, all as required in response to this Item 10, is included under the captions “Corporate Governance Matters” [removed: and “Section 16(a) Beneficial Ownership Reporting Compliance”] in the Company’s definitive proxy statement to be filed with the SEC pursuant to Regulation 14A within 120 days after the close of the Company’s fiscal year ended December 31, [removed: 2018] [added: 2019] (the [removed: “2019] [added: “2020] Proxy Statement”), and that information is hereby incorporated by reference in this Form 10-K.

Information concerning executive officers of the Company required in response to this Item 10 is included in Part I, under the heading [removed: “Executive Officers of the Registrant,”] [added: “Information about our Executive Officers,”] of this Form 10-K.

The information concerning the Company’s code of ethics required in response to this Item 10 is included in Part I, under the heading “Available Information,” of this Form [removed: 10-K.][added: 10‑K.]

Information concerning Section 16(a) reporting compliance is incorporated by reference to the information appearing under the caption “Delinquent Section 16(a) Reports” in the 2020 Proxy Statement.

The information required in response to this Item 11 is included under the captions “Executive Compensation,” “Compensation Discussion and Analysis,” “Corporate Governance Matters,” “Management Development and Compensation Committee Report,” and “Compensation Committee Interlocks and Insider Participation” in the Company’s [removed: 2019] [added: 2020] Proxy Statement, and that information is hereby incorporated by reference in this Form 10-K.

The information required in response to this Item 12 is included under the captions “General Information,” “Security Ownership of Certain Beneficial Owners and Management,” and “Securities Authorized for Issuance Under Equity Compensation Plans” in the Company’s [removed: 2019] [added: 2020] Proxy Statement, and that information is hereby incorporated by reference in this Form 10-K.

The information required in response to this Item 13 is included under the captions “Compensation Committee Interlocks and Insider Participation in Compensation Decisions” and “Corporate Governance Matters” in the Company’s [removed: 2019] [added: 2020] Proxy Statement, and that information is hereby incorporated by reference in this Form 10-K.

The information required in response to this Item 14 is included under the caption “Independent Auditors” in the Company’s [removed: 2019] [added: 2020] Proxy Statement, and that information is hereby incorporated by reference in this Form 10-K.

[added: Part IV ♦] Item 15 [removed: -] [added: –] Exhibits and Financial Statement Schedules [removed: ◆ Part IV]

| Form 10-K ♦ 120 |  | Celebrating 25 Years as a Public Company |

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| 32 | | 2018 FORM 10-K | |  | | | | |

##### [Table of Contents](#toc)

ITEM 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) (1) List of financial statements filed as part of this Form 10-K.

The following consolidated financial statements of Martin Marietta Materials, Inc. and consolidated subsidiaries, included in the 2018 Annual Report and incorporated by reference under Item 8 of this Form 10-K:

Consolidated Statements of Earnings – for years ended December 31, 2018, 2017, and 2016

Consolidated Statements of Comprehensive Earnings – for years ended December 31, 2018, 2017, and 2016

Consolidated Balance Sheets – at December 31, 2018 and 2017

Consolidated Statements of Cash Flows – for years ended December 31, 2018, 2017, and 2016

Consolidated Statements of Total Equity – for years ended December 31, 2018, 2017, and 2016

Notes to Financial Statements

(2) List of financial statement schedules filed as part of this Form 10-K

The following financial statement schedule of Martin Marietta Materials, Inc. and consolidated subsidiaries is included in Item 15(c) of this Form 10-K.

Schedule II – Valuation and Qualifying Accounts

All other schedules have been omitted because they are not applicable, not required, or the information has been otherwise supplied in the financial statements or notes to the financial statements.

The report of the Company’s independent registered public accounting firm with respect to the above-referenced financial statements is included in the 2018 Annual Report, and that report is hereby incorporated by reference in this Form 10-K.

The report on the financial statement schedule and the consent of the Company’s independent registered public accounting firm are attached as Exhibit 23.01 to this Form 10-K.

(3) Exhibits

The list of Exhibits on the accompanying Index of Exhibits included in Item 15(b) of this Form 10-K is hereby incorporated by reference.

Each management contract or compensatory plan or arrangement required to be filed as an exhibit is indicated by asterisks.

| | | | |  | | 2018 FORM 10-K | | 33 |

Part IV ◆ Item 15 - Exhibits and Financial Statement Schedules

(b) Index of Exhibits

| | | |

| Exhibit No. | | |

| 3.01 | | [– Restated Articles of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.01 to the Martin Marietta Materials, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed on February 24, 2017) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000119312517056282/d344578dex301.htm) |

| 3.02 | | [– Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Martin Marietta Materials, Inc. Current Report on Form 8-K, filed on February 22, 2018) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095015718000241/ex3-2.htm) |

| 4.01 | | – Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.01 to the Martin Marietta Materials, Inc. registration statement on Form S-1, filed on December 8, 1993 (SEC Registration No. 33-72648) (P) |

| 4.02 | | [– Article 5 of the Company’s Restated Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.01 to the Martin Marietta Materials, Inc. Annual Report on Form 10- K for the fiscal year ended December 31, 2016, filed on February 24, 2017) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000119312517056282/d344578dex301.htm) |

| 4.03 | | [– Article 1 of the Company’s Restated Bylaws, as amended (incorporated by reference to Exhibit 3.2 to the Martin Marietta Materials, Inc. Current Report on Form 8-K, filed on February 22, 2018) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095015718000241/ex3-2.htm) |

| 4.04 | | – Indenture dated as of December 1, 1995 between Martin Marietta Materials, Inc. and First Union National Bank of North Carolina (incorporated by reference to Exhibit 4(a) to the Martin Marietta Materials, Inc. registration statement on Form S-3 (SEC Registration No. 33-99082)) (P) |

| 4.05 | | – Form of Martin Marietta Materials, Inc. 7% Debenture due 2025 (incorporated by reference to Exhibit 4(a)(i) to the Martin Marietta Materials, Inc. registration statement on Form S-3 (SEC Registration No. 33-99082)) (P) |

| 4.06 | | [– Indenture dated as of April 30, 2007 between Martin Marietta Materials, Inc. and Branch Banking and Trust Company, Inc., as trustee (incorporated by reference to Exhibit 4.1 to the Martin Marietta Materials, Inc. Current Report on Form 8-K, filed on April 30, 2007 (Commission File No. 1-12744))](http://www.sec.gov/Archives/edgar/data/916076/000095014407003966/g07010exv4w1.htm) |

| 4.07 | | [– Second Supplemental Indenture, dated as of April 30, 2007, between Martin Marietta Materials, Inc. and Branch Banking and Trust Company, Inc., as trustee, to that certain Indenture dated as of April 30, 2007 between Martin Marietta Materials, Inc. and Branch Banking and Trust Company, Inc., as trustee, pursuant to which were issued $250,000,000 aggregate principal amount of 6_1⁄4%_ Senior Notes due 2037 of Martin Marietta Materials, Inc. (incorporated by reference to Exhibit 4.3 to the Martin Marietta Materials, Inc. Current Report on Form 8-K, filed on April 30, 2007 (Commission File No. 1-12744))](http://www.sec.gov/Archives/edgar/data/916076/000095014407003966/g07010exv4w3.htm) |

| 4.08 | | [– Purchase Agreement dated as of June 23, 2014 among Martin Marietta Materials, Inc. and Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC, as representatives of the several initial purchasers named in Schedule 1 thereto (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed on June 24, 2014) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095015714000679/ex10-1.htm) |

| 4.09 | | [– Indenture, dated as of July 2, 2014, between Martin Marietta Materials, Inc. and Regions Bank, as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K, filed on July 2, 2014) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095015714000736/ex4-1.htm) |

| 4.10 | | [– Form of 4.250% Senior Notes due 2024 (included in Exhibit 4.09)](http://www.sec.gov/Archives/edgar/data/916076/000095015714000736/ex4-1.htm) |

| 4.11 | | [– Indenture, dated as of May 22, 2017, between Martin Marietta Materials, Inc. and Regions Bank, as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K, filed on May 22, 2017) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000119312517178064/d401743dex41.htm) |

| [removed: Exhibit No. |] [added: Exhibit No.] | |

| 4.15 | [removed: | [– Form] [added: [\--Form] of [removed: Floating Rate] [added: 3.500%] Senior Notes due [removed: 2019] [added: 2027] (included in Exhibit 4.14)](http://www.sec.gov/Archives/edgar/data/916076/000119312517374738/d499713dex42.htm) |

| 4.16 | [removed: | [– Form] [added: [\--Form] of [removed: 3.500%] [added: 4.250%] Senior Notes due [removed: 2027] [added: 2047] (included in Exhibit 4.14)](http://www.sec.gov/Archives/edgar/data/916076/000119312517374738/d499713dex42.htm) |

| [removed: 4.17 |] [added: 4.10] | [removed: [– Form] [added: [\--Form] of 4.250% Senior Notes due [removed: 2047] [added: 2024] (included in Exhibit [removed: 4.14)](http://www.sec.gov/Archives/edgar/data/916076/000119312517374738/d499713dex42.htm)] [added: 4.09)](http://www.sec.gov/Archives/edgar/data/916076/000095015714000736/ex4-1.htm)] |

| 10.01 | [removed: | [– $700,000,000] [added: [\--$700,000,000] Credit Agreement dated as of December 5, 2016 among Martin Marietta Materials, Inc., JPMorgan Chase Bank, N.A., as Administrative Agent, and Wells Fargo Bank, N.A., [removed: Branch Banking and Trust Company, SunTrust] [added: Truist] Bank, and Deutsche Bank Securities Inc., as Co-Syndication Agents (incorporated by reference to Exhibit 10.01 to the Martin Marietta Materials, Inc., Current Report on Form 8-K filed on December 7, 2016) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000156459016029917/mlm-ex1001_6.htm) |

| 10.02 | [removed: | [–] [added: [\--] Credit and Security Agreement dated as of April 19, 2013, among Martin Marietta Funding LLC, as borrower, Martin Marietta Materials, Inc., as servicer, and [removed: SunTrust] [added: Truist] Bank, as [removed: lender] [added: lender,] together with the other lenders from time to time party thereto, and [removed: SunTrust] [added: Truist] Bank, as administrative agent for the lenders (incorporated by reference to Exhibit 10.01 to the Martin Marietta Materials, Inc. Current Report on Form 8-K filed on April 24, 2013) (Commission File No. [removed: 1- 12744)](http://www.sec.gov/Archives/edgar/data/916076/000119312513169367/d524115dex1001.htm)] [added: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000119312513169367/d524115dex1001.htm)] |

| 10.03 | [removed: | [– Commitment] [added: [\--Commitment] Letter dated as of June 20, 2014 to the Credit and Security Agreement, dated as of April 19, 2013 (as last amended April 18, 2014), among Martin Marietta Funding LLC, as borrower, Martin Marietta Materials, Inc., as servicer, and [removed: SunTrust] [added: Truist] Bank, as [removed: lender] [added: lender,] together with the other lenders from time to time party thereto, and [removed: SunTrust] [added: Truist] Bank, as administrative agent for the lenders (incorporated by reference to Exhibit 10.01 to the Martin Marietta Materials, Inc. Current Report on Form 8-K filed on June 25, 2014) (Commission File No. [removed: 1- 12744)](http://www.sec.gov/Archives/edgar/data/916076/000095015714000705/ex10-1.htm)] [added: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095015714000705/ex10-1.htm)] |

| 10.04 | [removed: | [– Second] [added: [\--Second] Amendment to Credit and Security Agreement, dated as of April 18, 2014, among Martin Marietta Funding LLC, as borrower, Martin Marietta Materials, Inc., as servicer, and [removed: SunTrust] [added: Truist] Bank, as [removed: lender] [added: lender,] together with the other lenders from time to time party thereto, and [removed: SunTrust] [added: Truist] Bank, as administrative agent for the lenders (incorporated by reference to Exhibit 10.02 to the Martin Marietta Materials, Inc. Current Report on Form 8-K filed on April 24, 2014) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000119312514156286/d714228dex1001.htm) |

| 10.05 | [removed: | [– Fifth] [added: [\--Fifth] Amendment to Credit and Security Agreement, dated as of September 30, 2014, among Martin Marietta Funding LLC, as borrower, Martin Marietta Materials, Inc., as servicer, and [removed: SunTrust] [added: Truist] Bank, as [removed: lender] [added: lender,] together with the other lenders from time to time party thereto, and [removed: SunTrust] [added: Truist] Bank, as administrative agent for the lenders (incorporated by reference to Exhibit 10.01 to the Martin Marietta Materials, Inc. Current Report on Form 8-K filed on October 3, 2014) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000119312514363178/d799882dex1001.htm) |

| 10.06 | [removed: | [– Seventh] [added: [\--Seventh] Amendment to Credit and Security Agreement, dated as of September 28, 2016, among Martin Marietta Funding LLC, as borrower, Martin Marietta Materials, Inc., as servicer, and [removed: SunTrust] [added: Truist] Bank, as [removed: lender] [added: lender,] together with the other lenders from time to time party thereto, and [removed: SunTrust] [added: Truist] Bank, as administrative agent for the lenders (incorporated by reference to Exhibit 10.01 to the Martin Marietta Materials, Inc. Current Report on Form 8-K filed on September 30, 2016) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000156459016025538/mlm-ex1001_6.htm) |

| 10.07 | [removed: | [– Ninth] [added: [\--Ninth] Amendment to Credit and Security Agreement, dated as of April 17, 2018, among Martin Marietta Funding LLC, as borrower, Martin Marietta Materials, Inc., as servicer, and [removed: SunTrust] [added: Truist] Bank, as [removed: lender] [added: lender,] together with the other lenders from time to time party thereto, and [removed: SunTrust] [added: Truist] Bank, as administrative agent for the lenders (incorporated by reference to Exhibit 10.1 to the Martin Marietta Materials, Inc. Current Report on Form 8-K filed on April 17, 2018) (Commission File No. [removed: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095015718000431/ex10-1.htm)] [added: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000156459016025538/mlm-ex1001_6.htm)] |

| 10.08 | [removed: | [– Tenth] [added: [\--Tenth] Amendment to Credit and Security Agreement, dated as of September 28, 2018, among Martin Marietta Funding LLC, as borrower, Martin Marietta Materials, Inc., as servicer, and [removed: SunTrust] [added: Truist] Bank, as [removed: lender] [added: lender,] together with the other lenders from time to time party thereto, and [removed: SunTrust] [added: Truist] Bank, as administrative agent for the lenders (incorporated by reference to Exhibit 10.1 to the Martin Marietta Materials, Inc. Current Report on Form 8-K filed on September 25, 2018) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095015718001002/ex10-1.htm) |

| [removed: 10.09 |] [added: 10.10] | [removed: [– Purchase] [added: [\--Purchase] and Contribution Agreement dated as of April 19, 2013, between Martin Marietta Materials, Inc., as seller and as servicer, and Martin Marietta Funding LLC, as buyer (incorporated by reference to Exhibit 10.02 to the Martin Marietta Materials, Inc. Current Report on Form 8-K filed on April 24, 2013) (Commission File No. [removed: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000119312513169367/d524115dex1002.htm)] [added: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014408006590/g14828k1exv10w1.htm)] |

| [removed: 10.10 |] [added: 10.11] | [removed: [– Form] [added: [\--Form] of Martin Marietta Materials, Inc. Third Amended and Restated Employment Protection Agreement (incorporated by reference to Exhibit 10.01 to the Martin Marietta Materials, Inc. Current Report on Form [removed: 8-K,] [added: 8‑K,] filed on August 19, 2008) (Commission File No. [removed: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014408006590/g14828k1exv10w1.htm)] [added: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014409001377/g17638exv10w05.htm)] |

| [removed: 10.11 |] [added: 10.12] | [removed: [– Amended] [added: [\--Amended] and Restated Martin Marietta Materials, Inc. Common Stock Purchase Plan for Directors (incorporated by reference to Exhibit 10.05 to the Martin Marietta Materials, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2013) (Commission File [removed: No.1- 12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014409001377/g17638exv10w05.htm)] [added: No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014409001377/g17638exv10w05.htm)] |

Part IV [removed: ◆] [added: ♦] Item 15 [removed: -] [added: –] Exhibits and Financial Statement Schedules

| [removed: 10.12 |] [added: 10.13] | [removed: [– Martin] [added: [\--Martin] Marietta Materials, Inc. Amended and Restated Executive Incentive Plan (incorporated by reference to Exhibit 10.05 to the Martin Marietta Materials, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2008) (Commission File No. [removed: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014409001377/g17638exv10w05.htm)] [added: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014409001377/g17638exv10w06.htm)] |

| [removed: 10.13 |] [added: 10.14] | [removed: [– Martin] [added: [\--Martin] Marietta Materials, Inc. Incentive Stock Plan, as Amended (incorporated by reference to Exhibit 10.06 to the Martin Marietta Materials, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2008) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014409001377/g17638exv10w06.htm) |

| [removed: 10.14 |] [added: 10.15] | [removed: [– Martin] [added: [\--Martin] Marietta Amended and Restated Stock-Based Award Plan last amended and restated February 18, 2016 (incorporated by reference to Exhibit 10.01 to the Martin Marietta Materials, Inc. Quarterly Report on Form [removed: 10-Q] [added: 10‑Q] for the quarter ended June 30, 2016) (Commission File No. [removed: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000156459016022616/mlm-ex1001_10.htm)] [added: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000156459016022616/mlm-ex1002_8.htm)] |

| [removed: 10.15 |] [added: 10.16] | [removed: [– Martin] [added: [\--Martin] Marietta Executive Cash Incentive Plan adopted February 18, 2016 (incorporated by reference to Exhibit 10.02 to the Martin Marietta Materials, Inc. Quarterly Report on Form [removed: 10-Q] [added: 10‑Q] for the quarter ended June 30, 2016) (Commission File No. [removed: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000156459016022616/mlm-ex1002_8.htm)] [added: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014401003808/g67160ex10-16.txt)] |

| [removed: 10.16 |] [added: 10.17] | [removed: [– Martin] [added: [\--Martin] Marietta Materials, Inc. Amended Omnibus Securities Award Plan (incorporated by reference to Exhibit 10.16 to the Martin Marietta Materials, Inc. Annual Report on Form [removed: 10-K] [added: 10‑K] for the fiscal year ended December 31, 2000) (Commission File No. [removed: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014401003808/g67160ex10-16.txt)] [added: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000119312512337410/d367571dex10.htm)] |

| [removed: 10.17 |] [added: 10.18] | [removed: [– Martin] [added: [\--Martin] Marietta Materials, Inc. Third Amended and Restated Supplemental Excess Retirement Plan (incorporated by reference to Exhibit 10 to the Martin Marietta Materials, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2012) (Commission File No. [removed: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000119312512337410/d367571dex10.htm)] [added: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014409001377/g17638exv10w11.htm)] |

| [removed: 10.18 |] [added: 10.19] | [removed: [– Form] [added: [\--Form] of Option Award Agreement under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan (incorporated by reference to Exhibit 10.11 to the Martin Marietta Materials, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2008) (Commission File No. [removed: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014409001377/g17638exv10w11.htm)] [added: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014409001377/g17638exv10w13.htm)] |

| [removed: 10.19 |] [added: 10.20] | [removed: [– Form] [added: [\--Form] of Amendment to the Stock Unit Agreement under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan (incorporated by reference to Exhibit 10.13 to the Martin Marietta Materials, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2008) (Commission File No. 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000095014409001377/g17638exv10w13.htm) |

| [removed: 10.20 |] [added: 10.21] | [removed: [– Form] [added: [\--Form] of Restricted Stock Unit Agreement for Directors under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan (incorporated by reference to Exhibit 10.14 to the Martin Marietta Materials, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2013) (Commission File No. [removed: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000119312514064999/d654417dex1014.htm)] [added: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000119312515060008/d877241dex1019.htm)] |

| [removed: 10.21 |] [added: 10.22] | [removed: [– Form] [added: [\--Form] of Special Restricted Stock Unit Agreement under the Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan (incorporated by reference to Exhibit 10.19 to the Martin Marietta Materials, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2014) (Commission File No. [removed: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000119312515060008/d877241dex1019.htm)] [added: 1-12744)](http://www.sec.gov/Archives/edgar/data/916076/000156459017010260/mlm-ex1001_100.htm)] |