Item 1. Financial Statements.

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Item 1. Financial Statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2022			2021
	(In Millions, Except Par Value Data)
ASSETS
Current Assets:
Cash and cash equivalents	$	189.6		$	258.4
Restricted cash		—			0.5
Accounts receivable, net		759.2			774.0
Inventories, net		782.4			752.6
Current assets held for sale		121.2			102.2
Other current assets		135.1			137.9
Total Current Assets		1,987.5			2,025.6

Property, plant and equipment		10,252.0			10,370.0
Allowances for depreciation, depletion and amortization		(4,043.1	)		(4,032.0	)
Net property, plant and equipment		6,208.9			6,338.0
Goodwill		3,392.0			3,494.4
Other intangibles, net		1,050.7			1,065.0
Operating lease right-of-use assets, net		410.7			426.7
Noncurrent assets held for sale		812.9			616.9
Other noncurrent assets		378.8			426.4
Total Assets	$	14,241.5		$	14,393.0

LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	383.8		$	356.2
Accrued salaries, benefits and payroll taxes		43.1			86.6
Accrued other taxes		46.6			58.4
Accrued interest		41.5			48.0
Operating lease liabilities		53.8			53.9
Current liabilities held for sale		9.3			7.5
Other current liabilities		134.8			142.0
Total Current Liabilities		712.9			752.6

Long-term debt		5,102.3			5,100.8
Deferred income taxes, net		890.0			895.3
Noncurrent operating lease liabilities		362.1			379.4
Noncurrent liabilities held for sale		63.9			53.5
Other noncurrent liabilities		679.2			673.8
Total Liabilities		7,810.4			7,855.4

Equity:
Common stock, par value $0.01 per share (62.4 shares outstanding at March 31, 2022 and December 31, 2021)		0.6			0.6
Preferred stock, par value $0.01 per share		—			—
Additional paid-in capital		3,462.6			3,470.4
Accumulated other comprehensive loss		(129.2	)		(97.6	)
Retained earnings		3,094.9			3,161.9
Total Shareholders' Equity		6,428.9			6,535.3
Noncontrolling interests		2.2			2.3
Total Equity		6,431.1			6,537.6
Total Liabilities and Equity	$	14,241.5		$	14,393.0

See accompanying notes to the consolidated financial statements.

Page 3 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS

	Three Months Ended
	March 31,
	2022			2021
	(In Millions, Except Per Share Data)
Products and services revenues	$	1,147.8		$	921.9
Freight revenues		83.0			60.5
Total Revenues		1,230.8			982.4

Cost of revenues - products and services		991.9			746.0
Cost of revenues - freight		82.8			61.7
Total Cost of Revenues		1,074.7			807.7

Gross Profit		156.1			174.7

Selling, general & administrative expenses		97.1			79.8
Acquisition and integration expenses		1.4			1.2
Other operating income, net		(2.3	)		(5.6	)
Earnings from Operations		59.9			99.3

Interest expense		40.5			27.4
Other nonoperating income, net		(10.8	)		(9.5	)
Earnings from continuing operations before income tax expense		30.2			81.4
Income tax expense		5.8			15.9
Earnings from continuing operations		24.4			65.5
Loss from discontinued operations, net of income tax benefit		(3.1	)		—
Consolidated net earnings		21.3			65.5
Less: Net (loss) earnings attributable to noncontrolling interests		(0.1	)		0.2
Net Earnings Attributable to Martin Marietta Materials, Inc.	$	21.4		$	65.3

Consolidated Comprehensive (Loss) Earnings:
(Loss) Earnings attributable to Martin Marietta Materials, Inc.	$	(10.2	)	$	68.1
(Loss) Earnings attributable to noncontrolling interests		(0.1	)		0.2
	$	(10.3	)	$	68.3
Net Earnings (Loss) Attributable to Martin Marietta Materials, Inc.
Per Common Share:
Basic from continuing operations attributable to common shareholders	$	0.39		$	1.05
Basic from discontinued operations attributable to common shareholders		(0.05	)		—
	$	0.34		$	1.05

Diluted from continuing operations attributable to common shareholders	$	0.39		$	1.04
Diluted from discontinued operations attributable to common shareholders		(0.05	)		—
	$	0.34		$	1.04

Weighted-Average Common Shares Outstanding:
Basic		62.4			62.3
Diluted		62.6			62.5

See accompanying notes to the consolidated financial statements.

Page 4 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended
	March 31,
	2022			2021
	(Dollars in Millions)
Cash Flows from Operating Activities:
Consolidated net earnings	$	21.3		$	65.5
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities:
Depreciation, depletion and amortization		128.2			98.6
Stock-based compensation expense		12.0			10.9
Gain on divestitures and sales of assets		(2.9	)		(3.8	)
Deferred income taxes, net		5.2			(4.7	)
Other items, net		(0.9	)		(4.7	)
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable, net		14.8			11.5
Inventories, net		(28.9	)		19.0
Accounts payable		95.5			25.0
Other assets and liabilities, net		(74.4	)		(25.4	)
Net Cash Provided by Operating Activities		169.9			191.9

Cash Flows from Investing Activities:
Additions to property, plant and equipment		(139.8	)		(110.3	)
Acquisitions, net of cash acquired		18.8			—
Proceeds from divestitures and sales of assets		1.0			12.2
Investments in life insurance contracts, net		—			9.8
Other investing activities, net		(3.0	)		—
Net Cash Used for Investing Activities		(123.0	)		(88.3	)

Cash Flows from Financing Activities:
Payments on finance lease obligations		(3.7	)		(2.2	)
Repurchases of common stock		(50.0	)		—
Dividends paid		(38.9	)		(36.1	)
Proceeds from exercise of stock options		0.6			0.6
Shares withheld for employees' income tax obligations		(24.2	)		(15.5	)
Net Cash Used for Financing Activities		(116.2	)		(53.2	)
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash		(69.3	)		50.4
Cash, Cash Equivalents and Restricted Cash, beginning of period		258.9			304.4
Cash, Cash Equivalents and Restricted Cash, end of period	$	189.6		$	354.8

See accompanying notes to the consolidated financial statements.

Page 5 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF TOTAL EQUITY

(In Millions, Except Per Share Data)			Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance at December 31, 2020	62.3		$	0.6	$	3,440.8		$	(158.4	)	$	2,607.7		$	5,890.7		$	2.6		$	5,893.3
Consolidated net earnings	—			—		—			—			65.3			65.3			0.2			65.5
Other comprehensive earnings, net of tax	—			—		—			2.8			—			2.8			—			2.8
Dividends declared ($0.57 per share)	—			—		—			—			(35.8	)		(35.8	)		—			(35.8	)
Issuances of common stock for stock award plans	0.1			—		5.5			—			—			5.5			—			5.5
Shares withheld for employees' income tax obligations	—			—		(15.5	)		—			—			(15.5	)		—			(15.5	)
Stock-based compensation expense	—			—		10.9			—			—			10.9			—			10.9
Balance at March 31, 2021	62.4		$	0.6	$	3,441.7		$	(155.6	)	$	2,637.2		$	5,923.9		$	2.8		$	5,926.7

Balance at December 31, 2021	62.4		$	0.6	$	3,470.4		$	(97.6	)	$	3,161.9		$	6,535.3		$	2.3		$	6,537.6
Consolidated net earnings (loss)	—			—		—			—			21.4			21.4			(0.1	)		21.3
Other comprehensive loss, net of tax	—			—		—			(31.6	)		—			(31.6	)		—			(31.6	)
Dividends declared ($0.61 per share)	—			—		—			—			(38.4	)		(38.4	)		—			(38.4	)
Issuances of common stock for stock award plans	0.1			—		4.6			—			—			4.6			—			4.6
Shares withheld for employees' income tax obligations				—		(24.4	)		—			—			(24.4	)		—			(24.4	)
Repurchases of common stock	(0.1	)		—		—			—			(50.0	)		(50.0	)		—			(50.0	)
Stock-based compensation expense				—		12.0			—			—			12.0			—			12.0
Balance at March 31, 2022	62.4		$	0.6	$	3,462.6		$	(129.2	)	$	3,094.9		$	6,428.9		$	2.2		$	6,431.1

See accompanying notes to the consolidated financial statements.

Page 6 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	Significant Accounting Policies

Organization

Martin Marietta Materials, Inc. (the Company or Martin Marietta) is a natural resource-based building materials company. As of March 31, 2022, the Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 350 quarries, mines and distribution yards in 28 states, Canada and The Bahamas. Martin Marietta also provides cement and downstream products and services, namely, ready mixed concrete, asphalt and paving, in vertically-integrated structured markets where the Company has a leading aggregates position. In addition, the Company has two cement plants, cement distribution terminals and ready mixed concrete operations primarily in California that are classified as assets held for sale and discontinued operations as of and for the quarter ended March 31, 2022. 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’s Building Materials business includes two reportable segments: the East Group and the West Group.

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

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

The Company’s Magnesia Specialties business, which represents a separate reportable segment, has manufacturing facilities in Manistee, Michigan, and Woodville, Ohio. The Magnesia Specialties business produces magnesia-based chemicals products used in industrial, agricultural and environmental applications, and dolomitic lime sold primarily to customers in the steel and mining industries.

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and in Article 10 of Regulation S-X. The Company has continued to follow the accounting policies set forth in the audited consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, the interim consolidated financial information provided herein reflects all adjustments, consisting of normal recurring accruals, necessary for a fair statement of the results of operations, financial position and cash flows for the interim periods. The consolidated results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results expected for other interim periods or the full year. The consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by U.S. GAAP for complete financial statements. These consolidated financial statements should be read in conjunction with the audited

Page 7 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

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

Consolidated Comprehensive (Loss) Earnings and Accumulated Other Comprehensive Loss

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

Comprehensive (loss) earnings attributable to Martin Marietta is as follows:

	Three Months Ended
	March 31,
	2022			2021
	(Dollars in Millions)
Net earnings attributable to Martin Marietta	$	21.4		$	65.3
Other comprehensive (loss) earnings, net of tax		(31.6	)		2.8
Comprehensive (loss) earnings attributable to Martin Marietta	$	(10.2	)	$	68.1

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

	(Dollars in Millions)
	Pension and Postretirement Benefit Plans			Foreign Currency			Total
	Three Months Ended March 31, 2022
Balance at beginning of period	$	(97.6	)	$	—		$	(97.6	)
Other comprehensive (loss) earnings before reclassifications, net of tax		(33.3	)		0.4			(32.9	)
Amounts reclassified from accumulated other comprehensive loss, net of tax		1.3			—			1.3
Other comprehensive (loss) earnings, net of tax		(32.0	)		0.4			(31.6	)
Balance at end of period	$	(129.6	)	$	0.4		$	(129.2	)

	Three Months Ended March 31, 2021
Balance at beginning of period	$	(158.1	)	$	(0.3	)	$	(158.4	)
Other comprehensive earnings before reclassifications, net of tax		—			0.3			0.3
Amounts reclassified from accumulated other comprehensive loss, net of tax		2.5			—			2.5
Other comprehensive earnings, net of tax		2.5			0.3			2.8
Balance at end of period	$	(155.6	)	$	—		$	(155.6	)

Page 8 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

The $33.3 million, net of tax, other comprehensive loss before reclassifications in the Pension and Postretirement Benefit Plans for the three months ended March 31, 2022 is driven by the remeasurement of the funded status of the Company’s qualified pension plan, required as a result of the plan amendment that provided an enhanced benefit for eligible hourly employees.

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

	Pension and Postretirement Benefit Plans
	Three Months Ended
	March 31,
	2022		2021
	(Dollars in Millions)
Balance at beginning of period	$	69.7	$	89.4
Tax effect of other comprehensive loss (earnings)		10.5		(0.7	)
Balance at end of period	$	80.2	$	88.7

Reclassifications out of accumulated other comprehensive loss are as follows:

	Three Months Ended						Affected line items in the
	March 31,						consolidated statements of earnings
	2022			2021			and comprehensive earnings
	(Dollars in Millions)
Pension and postretirement benefit plans
Amortization of:
Prior service credit	$	1.0		$	—
Actuarial loss		0.8			3.2
		1.8			3.2		Other nonoperating income, net
Tax benefit		(0.5	)		(0.7	)	Income tax expense
	$	1.3		$	2.5

Earnings per Common Share

The numerator for basic and diluted earnings per common share is net earnings attributable to Martin Marietta reduced by dividends and undistributed earnings attributable to certain of the Company’s stock-based compensation. If there is a net loss, no amount of the undistributed loss is attributed to unvested participating securities. The denominator for basic earnings per common share is the weighted-average number of common shares outstanding during the period. Diluted earnings per common share are computed assuming that the weighted-average number of common shares is increased by the conversion, using the treasury stock method, of awards to be issued to employees and nonemployee members of the Company’s Board of Directors under certain stock-based compensation arrangements if the conversion is dilutive. For the three months ended March 31, 2022 and 2021, the diluted per-share computations reflect the number of common shares outstanding to include the number of additional shares that would have been outstanding if the potentially dilutive common shares had been issued.

Page 9 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

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

	Three Months Ended
	March 31,
	2022		2021
	(In Millions)
Net earnings from continuing operations attributable to Martin Marietta	$	24.5	$	65.3
Less: Distributed and undistributed earnings attributable to unvested awards		—		0.1
Basic and diluted net earnings from continuing operations available to common shareholders attributable to Martin Marietta	$	24.5	$	65.2

Basic weighted-average common shares outstanding		62.4		62.3
Effect of dilutive employee and director awards		0.2		0.2
Diluted weighted-average common shares outstanding		62.6		62.5

Restricted Cash

At December 31, 2021, the Company had restricted cash of $0.5 million, which was invested in an account designated for the purchase of like-kind exchange replacement assets under Section 1031 of the Internal Revenue Code and related IRS procedures (Section 1031). The Company was restricted from utilizing the cash for purposes other than the purchase of the qualified assets for a designated period from receipt of the proceeds from the sale of the exchanged property. There was no restricted cash at March 31, 2022.

In connection with Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230), the statement of cash flows reflects cash flow changes and balances for cash, cash equivalents and restricted cash on an aggregated basis.

The following table reconciles cash, cash equivalents and restricted cash as reported on the consolidated balance sheets to the aggregated amounts presented on the consolidated statements of cash flows:

	March 31,		December 31,
	2022		2021
	(Dollars in Millions)
Cash and cash equivalents	$	189.6	$	258.4
Restricted cash		—		0.5
Total cash, cash equivalents and restricted cash presented in the consolidated statements of cash flows	$	189.6	$	258.9

2.	Revenue Recognition

Total revenues include sales of products and services to customers, net of any discounts or allowances, and freight revenues. Product revenues are recognized when control of the promised good is transferred to the customer, typically when finished products are shipped. Intersegment and interproduct revenues are eliminated in consolidation. Service revenues are derived from the paving business and are recognized using the percentage-of-completion method

Page 10 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

under the cost-to-cost approach. Freight revenues reflect delivery arranged by the Company using a third party on behalf of the customer and are recognized consistently with the timing of the product revenues.

Performance Obligations. Performance obligations are contractual promises to transfer or provide a distinct good or service for a stated price. The Company’s product sales agreements are single-performance obligations that are satisfied at a point in time. Performance obligations within paving service agreements are satisfied over time, primarily ranging from one day to two years. For product revenues and freight revenues, customer payment terms are generally 30 days from invoice date. Customer payments for the paving operations are based on a contractual billing schedule and are due 30 days from invoice date.

Future revenues from unsatisfied performance obligations at March 31, 2022 and 2021 were $213.9 million and $172.8 million, respectively, where the remaining periods to complete these obligations ranged from one month to 25 months and one month to 19 months, respectively.

Revenue by Category. The following table presents the Company’s total revenues by category for each reportable segment.

	Three Months Ended
	March 31, 2022
	Products and Services		Freight		Total
	(Dollars in Millions)
East Group	$	394.6	$	24.2	$	418.8
West Group		682.4		52.6		735.0
Total Building Materials business		1,077.0		76.8		1,153.8
Magnesia Specialties		70.8		6.2		77.0
Total	$	1,147.8	$	83.0	$	1,230.8

	Three Months Ended
	March 31, 2021
	Products and Services		Freight		Total
	(Dollars in Millions)
East Group	$	372.5	$	22.4	$	394.9
West Group		484.1		32.5		516.6
Total Building Materials business		856.6		54.9		911.5
Magnesia Specialties		65.3		5.6		70.9
Total	$	921.9	$	60.5	$	982.4

Service revenues, which include paving services located in California and Colorado, were $18.3 million and $8.8 million for the three months ended March 31, 2022 and 2021, respectively, and are reported in the West Group.

Page 11 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Contract Balances. Costs in excess of billings relate to the conditional right to consideration for completed contractual performance and are contract assets on the consolidated balance sheets. Costs in excess of billings are reclassified to accounts receivable when the right to consideration becomes unconditional. Billings in excess of costs relate to customers invoiced in advance of contractual performance and are contract liabilities on the consolidated balance sheets. The following table presents information about the Company’s contract balances:

(Dollars in Millions)		March 31, 2022				December 31, 2021
Costs in excess of billings		$	3.9			$	4.3
Billings in excess of costs		$	6.4			$	7.8

Revenues recognized from the beginning balance of contract liabilities for the three months ended March 31, 2022 and 2021 were $3.5 million and $4.9 million, respectively.

Retainage, which primarily relates to the paving services, represents amounts that have been billed to customers but payment withheld until final acceptance by the customer of the performance obligation. Included in other current assets on the Company’s consolidated balance sheets, retainage was $5.5 million and $10.5 million at March 31, 2022 and December 31, 2021, respectively.

Policy Elections. When the Company arranges third-party freight to deliver products to customers, the Company has elected the delivery to be a fulfillment activity rather than a separate performance obligation. Further, the Company acts as a principal in the delivery arrangements and, as required by the accounting standard, the related revenues and costs are presented gross and are included in the consolidated statements of earnings.

3.	Business Combinations and Discontinued Operations

Business Combinations

In October 2021, the Company completed the acquisition of Lehigh Hanson, Inc.’s West Region business (Lehigh West Region) for $2.26 billion. The acquisition was primarily financed using proceeds from the issuance of publicly traded debt. These operations provided a new upstream, materials-led growth platform across several of the nation’s largest and fastest-growing megaregions in California and Arizona. The results from the acquired business are included in the Company’s West Group.

The Company determined fair values of assets acquired and liabilities assumed. Although the initial accounting for the business combination has been recorded, these amounts are subject to change during the measurement period, which extends no longer than one year from the consummation date based on additional reviews, such as asset verification. Therefore, the measurement period remains open as of March 31, 2022. Specific accounts subject to ongoing purchase accounting adjustments included, but are not limited to, property, plant and equipment; lease assets and liabilities; goodwill; intangible assets; asset retirement obligations; and other liabilities. The goodwill generated by the transaction is deductible for income tax purposes.

Page 12 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

The following is a summary of the preliminary estimated fair values of the assets acquired and liabilities assumed as of October 1, 2021 (dollars in millions):

Assets:
Inventories	$	94.1
Property, plant and equipment		850.2
Intangible assets, other than goodwill		551.0
Goodwill		992.8
Other assets		54.6
Total assets		2,542.7
Liabilities:
Asset retirement obligations		178.9
Operating and finance lease liabilities		57.5
Other liabilities		41.7
Total liabilities		278.1
Total consideration	$	2,264.6

In July 2021, the Company acquired assets of Southern Crushed Concrete (SCC) in the Houston area, one of the country’s largest addressable aggregates markets. SCC was a leading producer of recycled concrete, which is principally used as a base aggregates product in infrastructure, commercial and residential construction applications. Although the initial accounting for the business combination has been recorded, the fair values of these amounts are subject to change during the measurement period, which remains open as of March 31, 2022. The goodwill generated by the transaction is deductible for income tax purposes. The results from the acquired business are included in the Company’s West Group, but are immaterial for pro-forma financial statement disclosures.

In April 2021, the Company completed the acquisition of Tiller Corporation (Tiller), a leading aggregates and hot mix asphalt supplier in the Minneapolis/St. Paul area, which is one of the largest and fastest-growing midwestern metropolitan areas. The Tiller acquisition complemented the Company’s existing product offerings in the surrounding areas. The Company has recorded fair values of the assets acquired and liabilities assumed, which are subject to asset verification and a normal post-closing working capital adjustment. Although the initial accounting for the business combination has been recorded, the fair values of these amounts are subject to change during the measurement period, which remains open as of March 31, 2022. The goodwill generated by the transaction is deductible for income tax purposes. The results from the acquired business are included in the Company’s East Group, but are immaterial for pro-forma financial statement disclosures.

Discontinued Operations

Discontinued operations include the cement and California ready-mixed concrete businesses acquired as part of the Lehigh West Region acquisition.

Page 13 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Discontinued operations for the quarter ended March 31, 2022 include the following:

(Dollars in Millions)
Total revenues	$	94.7

Loss from operations	$	(4.0	)

Pretax loss	$	(4.1	)
Income tax benefit		1.0
Net loss	$	(3.1	)

Total cash used for operating and investing activities for the discontinued operations was $14.0 million, including $8.6 million in capital expenditures, for the quarter ended March 31, 2022. Non-cash items related to operating and investing activities for the discontinued operations were immaterial for the quarter ended March 31, 2022.

Assets Held for Sale. On March 1, 2022, the Company announced a definitive agreement to sell the Redding, California cement plant, related cement distribution terminals and 14 California ready mix operations for $250 million in cash. The transaction is expected to close in the second half of 2022, subject to customary regulatory approvals and closing conditions. The Company did not record any amortization or depreciation expense related to these businesses for the quarter ended March 31, 2022, as these are classified as assets held for sale.

During the quarter, the Company reached agreement with one of the nation’s largest privately-owned concrete producers to divest the Colorado and Central Texas ready mix concrete operations, which was completed on April 1, 2022. This opportunity optimized the Company’s aggregates-led portfolio and improved its ability to generate generally more attractive margins over the long term by reducing both business cyclicality and exposure to raw material cost inflation.

Page 14 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Assets and liabilities held for sale as of March 31, 2022 and December 31, 2021, which also include a cement plant in Tehachapi, California; related cement distribution terminals; the remaining California ready mixed concrete plants; certain investment properties; and the Colorado and Central Texas ready mixed concrete operations, which were only classified as held for sale as of March 31, 2022 (see Note 14), are as follows:

	March 31, 2022									December 31, 2021
	Continuing Operations			Discontinued Operations			Total			Continuing Operations		Discontinued Operations			Total
	(Dollars in Millions)
Inventories, net	$	8.9		$	41.8		$	50.7		$	—	$	53.1		$	53.1
Investment land		40.7			—			40.7			32.7		—			32.7
Other assets		0.5			29.3			29.8			—		16.4			16.4
Total current assets held for sale	$	50.1		$	71.1		$	121.2		$	32.7	$	69.5		$	102.2

Property, plant and equipment	$	65.6		$	226.9		$	292.5		$	—	$	226.0		$	226.0
Intangible assets, excluding goodwill		5.7			264.9			270.6			—		264.9			264.9
Operating lease right-of-use assets		7.4			18.9			26.3			—		18.1			18.1
Goodwill		115.9			104.7			220.6			—		109.3			109.3
Other assets		—			8.9			8.9			—		4.6			4.6
Valuation allowance for loss on sale		—			(6.0	)		(6.0	)		—		(6.0	)		(6.0	)
Total noncurrent assets held for sale	$	194.6		$	618.3		$	812.9		$	—	$	616.9		$	616.9

Lease obligations	$	(1.0	)	$	(8.3	)	$	(9.3	)	$	—	$	(7.5	)	$	(7.5	)
Total current liabilities held for sale	$	(1.0	)	$	(8.3	)	$	(9.3	)	$	—	$	(7.5	)	$	(7.5	)

Asset retirement obligations	$	(0.7	)	$	(32.7	)	$	(33.4	)	$	—	$	(31.5	)	$	(31.5	)
Lease obligations		(6.8	)		(23.2	)		(30.0	)		—		(22.0	)		(22.0	)
Other liabilities		—			(0.5	)		(0.5	)		—		—			—
Total noncurrent liabilities held for sale	$	(7.5	)	$	(56.4	)	$	(63.9	)	$	—	$	(53.5	)	$	(53.5	)

4.	Goodwill

The following table shows the changes in goodwill by reportable segment and in total:

	East		West
	Group		Group			Total
	(Dollars in Millions)
Balance at January 1, 2022	$	759.4	$	2,735.0		$	3,494.4
Adjustments to purchase price allocations		5.0		3.8			8.8
Goodwill allocated to assets held for sale		—		(111.2	)		(111.2	)
Balance at March 31, 2022	$	764.4	$	2,627.6		$	3,392.0

Page 15 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

5.	Inventories, Net

	March 31,			December 31,
	2022			2021
	(Dollars in Millions)
Finished products	$	810.8		$	713.3
Products in process		14.1			30.1
Raw materials		83.9			69.6
Supplies and expendable parts		133.5			153.9
		1,042.3			966.9
Less: Allowances		(259.9	)		(214.3	)
Total	$	782.4		$	752.6

6.	Long-Term Debt

	March 31,			December 31,
	2022			2021
	(Dollars in Millions)
0.650% Senior Notes, due 2023	$	697.8		$	697.4
4.250% Senior Notes, due 2024		398.4			398.3
7% Debentures, due 2025		124.6			124.6
3.450% Senior Notes, due 2027		298.0			297.9
3.500% Senior Notes, due 2027		496.5			496.4
2.500% Senior Notes, due 2030		491.4			491.1
2.400% Senior Notes, due 2031		892.1			891.8
6.25% Senior Notes, due 2037		228.3			228.3
4.250% Senior Notes, due 2047		592.1			592.1
3.200% Senior Notes, due 2051		883.1			882.9
Other notes		0.1			0.1
Total debt		5,102.4			5,100.9
Less: Current maturities		(0.1	)		(0.1	)
Long-term debt	$	5,102.3		$	5,100.8

Page 16 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

The Company, through a wholly-owned special-purpose subsidiary, has a $400 million trade receivable securitization facility (the Trade Receivable Facility). On September 22, 2021 the Company extended the maturity to September 21, 2022. The Trade Receivable Facility, with Truist Bank, Regions Bank, PNC Bank, N.A., MUFG Bank, Ltd., New York Branch, and certain other lenders that may become a party to the facility from time to time, is backed by eligible trade receivables, as defined, and is limited to the lesser of the facility limit or the borrowing base, as defined. These receivables are originated by the Company and then sold by the Company to the wholly-owned special-purpose subsidiary. The Company continues to be responsible for the servicing and administration of the receivables purchased by the wholly-owned special-purpose subsidiary. Borrowings under the Trade Receivable Facility bear interest at a rate equal to asset-backed commercial paper costs of conduit lenders plus 0.85% for borrowings funded by conduit lenders and one-month London Inter-bank Offered Rate (LIBOR) plus 1.00%, subject to change in the event that this rate no longer reflects the lender’s cost of lending, for borrowings funded by all other lenders. The Trade Receivable Facility contains a cross-default provision to the Company’s other debt agreements. Subject to certain conditions, including lenders providing the requisite commitments, the Trade Receivable Facility may be increased to a borrowing base not to exceed $500 million. There were no borrowings outstanding under the Trade Receivable Facility at March 31, 2022 and December 31, 2021.

The Company has a $800 million five-year senior unsecured revolving facility (the Revolving Facility) with JPMorgan Chase Bank, N.A., as Administrative Agent, Deutsche Bank Securities, Inc., PNC Bank, Truist Bank and Wells Fargo Bank, N.A., as Syndication Agents, and the lenders party thereto (the Credit Agreement). Borrowings under the Revolving Facility bear interest, at the Company’s option, at rates based upon LIBOR or a base rate, plus, for each rate, a margin determined in accordance with a ratings-based pricing grid. There were no borrowings outstanding under the Credit Agreement at March 31, 2022 or December 31, 2021. The Credit Agreement requires the Company’s ratio of consolidated net debt-to-consolidated earnings before interest, taxes, depreciation, depletion and amortization (EBITDA), as defined, by the Revolving Facility, for the trailing-twelve months (the Ratio) to not exceed 3.50x as of the end of any fiscal quarter, provided that the Company may exclude from the Ratio debt incurred in connection with certain acquisitions during such quarter or the three preceding quarters so long as the Ratio calculated without such exclusion does not exceed 4.00x. Additionally, if there are no amounts outstanding under both the Revolving Facility and the Trade Receivable Facility, consolidated debt, including debt for which the Company is a co-borrower (see Note 10), may be reduced in an amount equal to the lesser of $500 million or the sum of the Company’s unrestricted cash and temporary investments, for purposes of the covenant calculation. The Company was in compliance with this covenant at March 31, 2022.

The Revolving Facility expires on December 21, 2026, with any outstanding principal amounts, together with interest accrued thereon, due in full on that date. Available borrowings under the Revolving Facility are reduced by any outstanding letters of credit issued by the Company under the Revolving Facility. The Company had $2.6 million of outstanding letters of credit issued under the Revolving Facility at March 31, 2022 and December 31, 2021.

7.	Financial Instruments

The Company’s financial instruments include temporary cash investments, restricted cash, accounts receivable, notes receivable, accounts payable, publicly-registered long-term notes, debentures and other long-term debt.

Temporary cash investments are placed primarily in money market funds, money market demand deposit accounts and Eurodollar time deposits. The Company’s cash equivalents have original maturities of less than three months. Due to the short maturity of these investments, they are carried on the consolidated balance sheets at cost, which approximates fair value.

Restricted cash is held in a trust account with a third-party intermediary. Due to the short-term nature of this account, the fair value of restricted cash approximates its carrying value.

Page 17 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Accounts receivable are due from a large number of customers, primarily in the construction industry, and are dispersed across wide geographic and economic regions. No single customer accounted for 10% or more of consolidated accounts receivable in the three-month period ended March 31, 2022 and 2021. The estimated fair values of accounts receivable approximate their carrying amounts due to the short-term nature of the accounts.

Notes receivable are primarily promissory notes with customers and are not publicly traded. Management estimates that the fair value of notes receivable approximates its carrying amount.

Accounts payable represent amounts owed to suppliers and vendors. The estimated fair value of accounts payable approximates the carrying amount due to the short-term nature of the payables.

The carrying values and fair values of the Company’s long-term debt were $5.10 billion and $4.93 billion, respectively, at March 31, 2022 and $5.10 billion and $5.45 billion, respectively, at December 31, 2021. The estimated fair value of the publicly-registered long-term notes was estimated using quoted market prices. The estimated fair values of other borrowings approximate their carrying amounts as the interest rates reset periodically.

8.	Income Taxes

The effective income tax rate reflects the effect of federal and state income taxes on earnings and the impact of differences in book and tax accounting arising primarily from the permanent tax benefits associated with the statutory depletion deduction for mineral reserves. The effective income tax rates for continuing operations were 19.3% and 19.5% for the three months ended March 31, 2022 and March 31, 2021, respectively.

The Company records interest accrued in relation to unrecognized tax benefits as income tax expense. Penalties, if incurred, are recorded as operating expenses in the consolidated statements of earnings and comprehensive earnings.

Page 18 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

9.	Pension and Postretirement Benefits

During the quarter ended March 31, 2022, the Company amended its qualified pension plan and provided an enhanced benefit for eligible hourly active participants who retire subsequent to April 30, 2022. The amendment required a pension remeasurement. The Company elected the use of a practical expedient to perform the pension remeasurement as of February 28, 2022, the month end closest to the approval of the plan amendment. The discount rate for the remeasurement was 3.75% compared with 3.23% prior to the remeasurement. The enhanced benefit and remeasurement resulted in higher projected pension expense for the year compared with the initial annual pension expense for the qualified plan.

The estimated components of the recorded net periodic benefit cost (credit) for pension and postretirement benefits are as follows:

	Pension						Postretirement Benefits
	Three Months Ended March 31,
	2022			2021			2022			2021
	(Dollars in Millions)
Service cost	$	11.5		$	11.6		$	—		$	—
Interest cost		10.2			9.0			0.1			0.1
Expected return on assets		(19.4	)		(17.6	)		—			—
Amortization of:
Prior service cost (credit)		1.2			0.2			(0.2	)		(0.2	)
Actuarial loss (gain)		0.9			3.3			(0.1	)		(0.1	)
Net periodic benefit cost (credit)	$	4.4		$	6.5		$	(0.2	)	$	(0.2	)

The service cost component of net periodic benefit (credit) cost is included in Cost of revenues – products and services and Selling, general and administrative expenses. All other components are included in Other nonoperating income, net, in the consolidated statements of earnings and comprehensive earnings.

10.	Commitments and Contingencies

Legal and Administrative Proceedings

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

Borrowing Arrangements with Affiliate

The Company is a co-borrower with an unconsolidated affiliate for a $12.5 million revolving line of credit agreement with Truist Bank, of which $4.5 million was outstanding as of March 31, 2022. The affiliate has agreed to reimburse and indemnify the Company for any payments and expenses the Company may incur from this agreement. The

Page 19 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Company holds a lien on the affiliate’s membership interest in a joint venture as collateral for payment under the revolving line of credit.

In addition, the Company has a $6.0 million interest-only loan receivable, due December 31, 2022, outstanding from this unconsolidated affiliate as of March 31, 2022 and December 31, 2021. The interest rate is one-month LIBOR plus a current spread of 1.63%.

Letters of Credit

In the normal course of business, the Company provides certain third parties with standby letter of credit agreements guaranteeing its payment for certain insurance claims, contract performance and permit requirements. At March 31, 2022, the Company was contingently liable for $17.2 million in letters of credit, of which $2.6 million were issued under the Company’s Revolving Facility.

11.	Business Segments

The Building Materials business contains two reportable segments: the East Group and the West Group. The Company also has a Magnesia Specialties segment. The Company’s evaluation of performance and allocation of resources are based primarily on earnings from operations. Consolidated earnings from operations include total revenues less cost of revenues; selling, general and administrative expenses; acquisition and integration expenses; other operating income and expenses, net; and exclude interest expense; other nonoperating income and expenses, net; and income taxes. Corporate loss from operations primarily includes depreciation; expenses for corporate administrative functions; acquisition and integration expenses; and other nonrecurring income and expenses excluded from the Company’s evaluation of business segment performance and resource allocation. All long-term debt and related interest expense are held at Corporate.

Page 20 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

The following table displays selected financial data for the Company’s reportable segments. Total revenues, as well as the consolidated statements of earnings and comprehensive earnings, exclude intersegment revenues, which represent sales from one segment to another segment and are eliminated in consolidation. Total revenues, product and services revenues, and earnings (loss) from operations reflect continuing operations only.

	Three Months Ended
	March 31,
	2022			2021
	(Dollars in Millions)
Total revenues:
East Group	$	418.8		$	394.9
West Group		735.0			516.6
Total Building Materials business		1,153.8			911.5
Magnesia Specialties		77.0			70.9
Total	$	1,230.8		$	982.4

Products and services revenues:
East Group	$	394.6		$	372.5
West Group		682.4			484.1
Total Building Materials business		1,077.0			856.6
Magnesia Specialties		70.8			65.3
Total	$	1,147.8		$	921.9

Earnings (Loss) from operations:
East Group	$	28.0		$	61.7
West Group		43.0			31.9
Total Building Materials business		71.0			93.6
Magnesia Specialties		21.5			23.5
Corporate		(32.6	)		(17.8	)
Total	$	59.9		$	99.3

Page 21 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

12.	Revenues and Gross Profit

The Building Materials business includes the aggregates, cement, ready mixed concrete and asphalt and paving product lines. Cement and ready mixed concrete product lines and paving services reside only in the West Group. The following table, which is reconciled to consolidated amounts, provides total revenues and gross profit (loss) by product line and reflects continuing operations only.

	Three Months Ended
	March 31,
	2022			2021
	(Dollars in Millions)
Total revenues:
Building Materials business:
Products and services:
Aggregates	$	685.9		$	572.6
Cement		134.3			109.6
Ready mixed concrete		290.1			235.3
Asphalt and paving services		54.8			12.2
Less: interproduct revenues		(88.1	)		(73.1	)
Products and services		1,077.0			856.6
Freight		76.8			54.9
Total Building Materials business		1,153.8			911.5
Magnesia Specialties:
Products and services		70.8			65.3
Freight		6.2			5.6
Total Magnesia Specialties		77.0			70.9
Total	$	1,230.8		$	982.4

Gross profit (loss):
Building Materials business:
Products and services:
Aggregates	$	101.9		$	121.8
Cement		27.3			15.3
Ready mixed concrete		21.1			19.4
Asphalt and paving services		(13.3	)		(8.2	)
Products and services		137.0			148.3
Freight		1.4			(0.3	)
Total Building Materials business		138.4			148.0
Magnesia Specialties:
Products and services		26.8			28.4
Freight		(1.2	)		(0.9	)
Total Magnesia Specialties		25.6			27.5
Corporate		(7.9	)		(0.8	)
Total	$	156.1		$	174.7

Page 22 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

13.	Supplemental Cash Flow Information

Noncash investing and financing activities are as follows:

	Three Months Ended
	March 31,
	2022		2021
	(Dollars in Millions)
Noncash investing and financing activities:
Right-of-use assets obtained in exchange for new finance lease liabilities	$	3.6	$	115.1
Right-of-use assets obtained in exchange for new operating lease liabilities	$	6.1	$	6.0
Accrued liabilities for purchases of property, plant and equipment	$	24.5	$	28.7
Remeasurement of operating lease right-of-use assets	$	0.3	$	(6.2	)
Remeasurement of finance lease right-of-use assets	$	0.4	$	—

For the three months ended March 31, 2021, the right-of-use assets obtained in exchange for new finance lease liabilities balance were primarily attributable to the lease of the new corporate headquarters.

Supplemental disclosures of cash flow information are as follows:

	Three Months Ended
	March 31,
	2022		2021
	(Dollars in Millions)
Cash paid for interest, net of capitalized amount	$	44.8	$	14.8
Cash paid for income taxes, net of refunds	$	0.8	$	—

During the three months ended March 31, 2021, the Company received proceeds of $9.8 million related to its company-owned life insurance policies. The proceeds are included in the Investments in life insurance contracts, net, in the investing activities of the consolidated statements of cash flows.

14.	Subsequent Event

On April 1, 2022, the Company divested its Colorado and Central Texas ready-mixed concrete operations to Smyrna Ready Mix Concrete LLC. The Company expects the transaction to result in a gain. These operations are all reported in the Company’s West Group.

Page 23 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Previous: Cover and table of contents · Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.