Item 1. Financial Statements.

Item 1. Financial Statements.

74K characters. Original on sec.gov · Markdown

(Dollars in Millions)

Weighted-average amortization period

Subject to amortization:

Customer relationships

Not subject to amortization:

Use rights

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED BALANCE SHEETS


	June 30,			December 31,
	2024			2023
	(In Millions, Except Share and Par Value Data)
ASSETS
Current Assets:
Cash and cash equivalents	$	109		$	1,272
Restricted cash		—			10
Accounts receivable, net		909			753
Inventories, net		1,105			989
Current assets held for sale		10			807
Other current assets		96			88
Total Current Assets		2,229			3,919

Property, plant and equipment		13,383			10,708
Allowances for depreciation, depletion and amortization		(4,773	)		(4,522	)
Net property, plant and equipment		8,610			6,186
Goodwill		3,842			3,389
Other intangibles, net		713			698
Operating lease right-of-use assets, net		378			372
Other noncurrent assets		561			561
Total Assets	$	16,333		$	15,125

LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	304		$	343
Accrued salaries, benefits and payroll taxes		58			102
Accrued income taxes		158			6
Accrued other taxes		50			47
Accrued interest		41			41
Current maturities of long-term debt		400			400
Current operating lease liabilities		53			53
Current liabilities held for sale		—			18
Other current liabilities		132			160
Total Current Liabilities		1,196			1,170

Long-term debt		3,947			3,946
Deferred income taxes, net		1,110			874
Noncurrent operating lease liabilities		341			327
Noncurrent asset retirement obligations		397			383
Other noncurrent liabilities		502			389
Total Liabilities		7,493			7,089

Commitments and contingent liabilities - Note 9		—			—

Equity:
Common stock, par value $0.01 per share (61,117,053 shares and 61,821,421 shares outstanding at June 30, 2024 and December 31, 2023, respectively)		1			1
Preferred stock, par value $0.01 per share		—			—
Additional paid-in capital		3,529			3,519
Accumulated other comprehensive loss		(48	)		(49	)
Retained earnings		5,356			4,563
Total Shareholders' Equity		8,838			8,034
Noncontrolling interests		2			2
Total Equity		8,840			8,036
Total Liabilities and Equity	$	16,333		$	15,125

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						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(In Millions, Except Per Share Data)
Revenues	$	1,764		$	1,821		$	3,015		$	3,175
Cost of revenues		1,247			1,261			2,225			2,312

Gross Profit		517			560			790			863

Selling, general and administrative expenses		117			112			236			216
Acquisition, divestiture and integration expenses		21			—			41			1
Other operating income, net		(19	)		(15	)		(1,306	)		(13	)
Earnings from Operations		398			463			1,819			659

Interest expense		40			42			80			84
Other nonoperating income, net		(14	)		(19	)		(46	)		(35	)
Earnings from continuing operations before income tax expense		372			440			1,785			610
Income tax expense		78			92			445			128
Earnings from continuing operations		294			348			1,340			482
Earnings (Loss) from discontinued operations, net of income tax expense (benefit)		—			1			—			(12	)
Consolidated net earnings		294			349			1,340			470
Less: Net earnings attributable to noncontrolling interests		—			1			1			1
Net Earnings Attributable to Martin Marietta	$	294		$	348		$	1,339		$	469

Consolidated Comprehensive Earnings (See Note 1):
Earnings attributable to Martin Marietta	$	295		$	350		$	1,340		$	472
Earnings attributable to noncontrolling interests		—			1			1			1
	$	295		$	351		$	1,341		$	473
Net Earnings (Loss) Attributable to Martin Marietta
Per Common Share:
Basic earnings per share from continuing operations attributable to common shareholders	$	4.77		$	5.61		$	21.72		$	7.78
Basic earnings (loss) per share from discontinued operations attributable to common shareholders		—			0.01			—			(0.20	)
	$	4.77		$	5.62		$	21.72		$	7.58

Diluted earnings per share from continuing operations attributable to common shareholders	$	4.76		$	5.60		$	21.66		$	7.76
Diluted earnings (loss) per share from discontinued operations attributable to common shareholders		—			0.01			—			(0.20	)
	$	4.76		$	5.61		$	21.66		$	7.56

Weighted-Average Common Shares Outstanding:
Basic		61.5			61.9			61.6			62.0
Diluted		61.6			62.1			61.8			62.2

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


	Six Months Ended
	June 30,
	2024			2023
	(Dollars in Millions)
Cash Flows from Operating Activities:
Consolidated net earnings	$	1,340		$	470
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities:
Depreciation, depletion and amortization		272			253
Stock-based compensation expense		33			28
Gain on divestitures and sales of assets		(1,336	)		(16	)
Deferred income taxes, net		(90	)		1
Noncash asset and portfolio rationalization charge		50			—
Other items, net		(5	)		(4	)
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable, net		(151	)		(196	)
Inventories, net		(63	)		(92	)
Accounts payable		40			45
Other assets and liabilities, net		83			30
Net Cash Provided by Operating Activities		173			519

Cash Flows from Investing Activities:
Additions to property, plant and equipment		(339	)		(293	)
Acquisitions, net of cash acquired		(2,538	)		—
Proceeds from divestitures and sales of assets		2,121			95
Other investing activities, net		(10	)		1
Net Cash Used for Investing Activities		(766	)		(197	)

Cash Flows from Financing Activities:
Payments on finance lease obligations		(10	)		(8	)
Dividends paid		(92	)		(83	)
Repurchases of common stock		(450	)		(150	)
Distributions to owners of noncontrolling interest		—			(1	)
Proceeds from exercise of stock options		—			1
Shares withheld for employees’ income tax obligations		(28	)		(18	)
Net Cash Used for Financing Activities		(580	)		(259	)
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash		(1,173	)		63
Cash, Cash Equivalents and Restricted Cash, beginning of period		1,282			359
Cash, Cash Equivalents and Restricted Cash, end of period	$	109		$	422

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 Share and Per Share Data)	Shares of Common Stock			Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance at March 31, 2024		61,639,965		$	1	$	3,512		$	(49	)	$	5,411		$	8,875		$	2		$	8,877
Consolidated net earnings		—			—		—			—			294			294			—			294
Other comprehensive earnings, net of tax		—			—		—			1			—			1			—			1
Dividends declared ($0.74 per common share)		—			—		—			—			(46	)		(46	)		—			(46	)
Issuances of common stock for stock award plans		7,245			—		—			—			—			—			—			—
Shares withheld for employees' income tax obligations		—			—		(1	)		—			—			(1	)		—			(1	)
Repurchases of common stock		(530,157	)		—		—			—			(303	)		(303	)		—			(303	)
Stock-based compensation expense		—			—		18			—			—			18			—			18
Balance at June 30, 2024		61,117,053		$	1	$	3,529		$	(48	)	$	5,356		$	8,838		$	2		$	8,840

Balance at December 31, 2023		61,821,421		$	1	$	3,519		$	(49	)	$	4,563		$	8,034		$	2		$	8,036
Consolidated net earnings		—			—		—			—			1,339			1,339			1			1,340
Other comprehensive earnings, net of tax		—			—		—			1			—			1			—			1
Dividends declared ($1.48 per common share)		—			—		—			—			(92	)		(92	)		—			(92	)
Issuances of common stock for stock award plans		81,390			—		5			—			—			5			—			5
Shares withheld for employees' income tax obligations		—			—		(28	)		—			—			(28	)		—			(28	)
Repurchases of common stock		(785,758	)		—		—			—			(454	)		(454	)		—			(454	)
Stock-based compensation expense		—			—		33			—			—			33			—			33
Distributions to owners of noncontrolling interest		—			—		—			—			—			—			(1	)		(1	)
Balance at June 30, 2024		61,117,053		$	1	$	3,529		$	(48	)	$	5,356		$	8,838		$	2		$	8,840

See accompanying notes to the consolidated financial statements.

Page 6 of 41


(In Millions, Except Share And Per Share Data)	Shares of Common Stock			Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance at March 31, 2023		61,967,957		$	1	$	3,487		$	(37	)	$	3,724		$	7,175		$	2		$	7,177
Consolidated net earnings		—			—		—			—			348			348			1			349
Other comprehensive earnings, net of tax		—			—		—			2			—			2			—			2
Dividends declared ($0.66 per common share)		—			—		—			—			(41	)		(41	)		—			(41	)
Issuances of common stock for stock award plans		13,189			—		1			—			—			1			—			1
Shares withheld for employees' income tax obligations		—			—		(1	)		—			—			(1	)		—			(1	)
Repurchases of common stock		(177,750	)		—		—			—			(76	)		(76	)		—			(76	)
Stock-based compensation expense		—			—		14			—			—			14			—			14
Distributions to owners of noncontrolling interest		—			—		—			—			—			—			(1	)		(1	)
Balance at June 30, 2023		61,803,396		$	1	$	3,501		$	(35	)	$	3,955		$	7,422		$	2		$	7,424

Balance at December 31, 2022		62,102,353		$	1	$	3,489		$	(38	)	$	3,719		$	7,171		$	2		$	7,173
Consolidated net earnings		—			—		—			—			469			469			1			470
Other comprehensive earnings, net of tax		—			—		—			3			—			3			—			3
Dividends declared ($1.32 per common share)		—			—		—			—			(82	)		(82	)		—			(82	)
Issuances of common stock for stock award plans		82,563			—		2			—			—			2			—			2
Shares withheld for employees' income tax obligations		—			—		(18	)		—			—			(18	)		—			(18	)
Repurchases of common stock		(381,520	)		—		—			—			(151	)		(151	)		—			(151	)
Stock-based compensation expense		—			—		28			—			—			28			—			28
Distributions to owners of noncontrolling interest		—			—		—			—			—			—			(1	)		(1	)
Balance at June 30, 2023		61,803,396		$	1	$	3,501		$	(35	)	$	3,955		$	7,422		$	2		$	7,424

See accompanying notes to the consolidated financial statements.

Page 7 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Significant Accounting Policies

Organization

Martin Marietta Materials, Inc. (the Company or Martin Marietta) is a natural resource-based building materials company. As of June 30, 2024, the Company supplies aggregates (crushed stone, sand and gravel) through its network of approximately 380 quarries, mines and distribution yards in 28 states, Canada and The Bahamas. Martin Marietta also provides cement and downstream products and services, namely, ready mixed concrete, asphalt and paving, in vertically-integrated structured markets where the Company also has a leading aggregates position. The Company’s heavy-side building materials are used in infrastructure, nonresidential and residential construction projects. Aggregates are also used in agricultural, utility and environmental applications and as railroad ballast. The aggregates, cement and ready mixed concrete and asphalt and paving product lines are reported collectively as the “Building Materials” business.

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 and 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 for steel production and soil stabilization.

Basis of Presentation and Use of Estimates

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, 2023. 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 and six months ended June 30, 2024 are not necessarily indicative of the results expected for other interim periods or the full year. The consolidated balance sheet at December 31, 2023 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

Page 8 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

financial statements. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

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.

Restricted Cash

At December 31, 2023, the Company had restricted cash of $10 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 qualified assets for 180 days from receipt of the proceeds from the sale of the exchanged property. Any unused restricted cash at the end of the 180 days was transferred to unrestricted accounts of the Company and used for general corporate purposes. There was no restricted cash at June 30, 2024.

The statements of cash flows reflect 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:


	June 30,		December 31,
	2024		2023
	(Dollars in Millions)
Cash and cash equivalents	$	109	$	1,272
Restricted cash		—		10
Total cash, cash equivalents and restricted cash presented in the consolidated statements of cash flows	$	109	$	1,282

Consolidated Comprehensive Earnings and Accumulated Other Comprehensive Loss

Consolidated comprehensive earnings 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.

Consolidated comprehensive earnings attributable to Martin Marietta are as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(Dollars in Millions)
Net earnings attributable to Martin Marietta	$	294	$	348	$	1,339	$	469
Other comprehensive earnings, net of tax		1		2		1		3
Consolidated comprehensive earnings attributable to Martin Marietta	$	295	$	350	$	1,340	$	472

Page 9 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Accumulated other comprehensive loss consists of unrecognized gains and losses related to the funded status of the pension and postretirement benefit plans and foreign currency translation adjustments and is presented on the Company’s consolidated balance sheets.

The components of the changes in accumulated other comprehensive loss, net of tax, are as follows:


	(Dollars in Millions)
	Pension and Postretirement Benefit Plans			Foreign Currency			Accumulated Other Comprehensive Loss
	Three Months Ended June 30, 2024
Balance at beginning of period	$	(47	)	$	(2	)	$	(49	)
Amounts reclassified from accumulated other comprehensive loss, net of tax		1			—			1
Other comprehensive earnings, net of tax		1			—			1
Balance at end of period	$	(46	)	$	(2	)	$	(48	)

	Three Months Ended June 30, 2023
Balance at beginning of period	$	(35	)	$	(2	)	$	(37	)
Other comprehensive earnings before reclassifications, net of tax		—			1			1
Amounts reclassified from accumulated other comprehensive loss, net of tax		1			—			1
Other comprehensive earnings, net of tax		1			1			2
Balance at end of period	$	(34	)	$	(1	)	$	(35	)

Page 10 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)


	(Dollars in Millions)
	Pension and Postretirement Benefit Plans			Foreign Currency			Accumulated Other Comprehensive Loss
	Six Months Ended June 30, 2024
Balance at beginning of period	$	(48	)	$	(1	)	$	(49	)
Other comprehensive loss before reclassifications, net of tax		—			(1	)		(1	)
Amounts reclassified from accumulated other comprehensive loss, net of tax		2			—			2
Other comprehensive earnings (loss), net of tax		2			(1	)		1
Balance at end of period	$	(46	)	$	(2	)	$	(48	)

	Six Months Ended June 30, 2023
Balance at beginning of period	$	(36	)	$	(2	)	$	(38	)
Other comprehensive earnings before reclassifications, net of tax		—			1			1
Amounts reclassified from accumulated other comprehensive loss, net of tax		2			—			2
Other comprehensive earnings, net of tax		2			1			3
Balance at end of period	$	(34	)	$	(1	)	$	(35	)

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


	Pension and Postretirement Benefit Plans
	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2024		2023			2024			2023
	(Dollars in Millions)
Balance at beginning of period	$	53	$	50		$	54		$	50
Tax effect of other comprehensive earnings		—		(1	)		(1	)		(1	)
Balance at end of period	$	53	$	49		$	53		$	49

Reclassifications out of accumulated other comprehensive loss are as follows:


	Three Months Ended						Six Months Ended						Affected line items in the consolidated
	June 30,						June 30,						statements of earnings
	2024			2023			2024			2023			and comprehensive earnings
	(Dollars in Millions)
Pension and postretirement benefit plans
Amortization of prior service cost	$	2		$	2		$	3		$	4		Other nonoperating income, net
Tax effect		(1	)		(1	)		(1	)		(2	)	Income tax expense
Total	$	1		$	1		$	2		$	2

Page 11 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Earnings per Common Share

The numerator for basic and diluted earnings per common share is net earnings attributable to Martin Marietta. 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 is 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 and six months ended June 30, 2024 and 2023, the diluted per-share computations reflect the number of common shares outstanding including the number of additional shares that would have been outstanding if the potentially dilutive common shares had been issued.

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(In Millions)
Basic weighted-average common shares outstanding		61.5		61.9		61.6		62.0
Effect of dilutive employee and director awards		0.1		0.2		0.2		0.2
Diluted weighted-average common shares outstanding		61.6		62.1		61.8		62.2

Page 12 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

New Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker. The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This ASU requires companies to apply retrospectively to all prior periods presented in the financial statements. The ASU will impact the Company's disclosures, but will have no impact on its results of operations, cash flows or financial condition.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid. ASU 2023-09 requires public entities to disclose, on an annual basis, a tabular tax rate reconciliation using both percentages and currency amounts, broken out into specified categories. Certain reconciling items are further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. Additionally, all entities are required to disclose income taxes paid, net of refunds received, disaggregated by federal, state, local, and foreign taxes and by individual jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. The ASU also requires additional qualitative disclosures. ASU 2023-09 is effective prospectively for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted. The ASU will impact the Company's income tax disclosures, but will have no impact on its results of operations, cash flows or financial condition.

Reclassifications

Certain reclassifications have been made in the Company's financial statements of the prior year to conform to the current-year presentation. The reclassifications had no impact on the Company’s previously reported results of operations, financial condition or cash flows.

Business Combinations, Divestitures, Discontinued Operations and Assets and Liabilities Held for Sale

Business Combinations

Revenues and pretax earnings attributable to operations acquired in 2024 (as subsequently described) included in the Company's consolidated statements of earnings and comprehensive earnings were $83 million and $11 million, respectively, for the three months ended June 30, 2024, and $97 million and $12 million, respectively, for the six months ended June 30, 2024. The pretax earnings for both the quarter and year-to-date periods include a $20 million charge for the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting for the Blue Water Industries LLC transaction.

Page 13 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Albert Frei & Sons, Inc. On January 12, 2024, the Company acquired Albert Frei & Sons, Inc. (AFS), a leading aggregates producer in Colorado. This acquisition provides more than 60 years (at 2023 production levels) of high-quality, hard rock reserves to better serve new and existing customers and enhances the Company's aggregates platform in the high-growth Denver metropolitan area. The Company has recorded preliminary fair values of the assets acquired and liabilities assumed, which are subject to additional reviews that are not yet complete. Thus, these amounts are subject to change during the measurement period, which remains open as of June 30, 2024. Specific accounts subject to ongoing purchase accounting adjustments include, but are not limited to, goodwill and deferred income taxes. The goodwill generated by the transaction is not deductible for income tax purposes. The acquisition is reported in the Company's West Group and is immaterial for pro-forma financial statement disclosures.

Blue Water Industries LLC. On April 5, 2024, the Company completed the acquisition of 20 active aggregates operations in Alabama, South Carolina, South Florida, Tennessee, and Virginia from affiliates of Blue Water Industries LLC (BWI Southeast) for $2.05 billion in cash. The BWI Southeast acquisition complements Martin Marietta’s existing geographic footprint in the southeast region by allowing the Company to expand into new growth platforms in target markets including Tennessee and South Florida. The results from the acquired operations are reported in the Company's East Group.

The Company determined the acquisition-date 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. Therefore, the measurement period remains open as of June 30, 2024. Specific accounts subject to ongoing purchase accounting adjustments include, but are not limited to, property, plant and equipment; intangible assets; goodwill; deferred income taxes; asset retirement obligations; and other liabilities. The goodwill generated by the transaction is not deductible for income tax purposes.

The following is a summary of the preliminary estimated fair values of the assets acquired and liabilities assumed as of April 5, 2024 (dollars in millions):


Assets:
Inventories	$	50
Property, plant and equipment 1		1,961
Intangible assets, other than goodwill		19
Other assets		1
Total assets		2,031
Liabilities:
Deferred income taxes		233
Asset retirement obligations		3
Other liabilities		90
Total liabilities		326
Net identifiable assets acquired		1,705
Goodwill		345
Total consideration	$	2,050

1 Includes mineral reserves of $1.8 billion.

Page 14 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

The following unaudited pro forma financial information summarizes the combined results of operations for the Company and BWI Southeast as though the companies were combined as of January 1, 2023. Consistent with the assumed acquisition date of January 1, 2023, the pro forma financial results include acquisition and integration expenses of $22 million and the $20 million charge for selling inventory after its markup to fair value for the six months ended June 30, 2023.

The unaudited pro forma financial information does not purport to project the future financial position or operating results of the combined company. The following pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place as of January 1, 2023:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(Dollars in Millions)
Revenues	$	1,764	$	1,876	$	3,067	$	3,277
Net earnings from continuing operations attributable to Martin Marietta	$	324	$	342	$	1,373	$	420

Divestitures

On February 9, 2024, the Company completed the sale of its South Texas cement business and certain of its related ready mixed concrete operations to CRH Americas Materials, Inc., a subsidiary of CRH plc, for $2.1 billion in cash plus normal customary closing adjustments. Specifically, the divested facilities included the Hunter cement plant in New Braunfels, Texas, related cement distribution terminals and 20 ready mixed concrete plants that served the Austin and San Antonio region, all of which were classified as assets held for sale as of December 31, 2023. The divestiture provided proceeds the Company used to consummate the BWI Southeast acquisition. The transaction resulted in a pretax gain of $1.3 billion, which is included in Other operating (income) expense, net, on the Company's consolidated statement of earnings and comprehensive earnings for the six months ended June 30, 2024 and is exclusive of transaction expenses incurred due to the divestiture. The divested operations and the gain on divestiture are reported in the West Group.

Discontinued Operations

For the three and six months ended June 30, 2023, discontinued operations included the Company's Tehachapi, California cement plant, which was divested in October 2023, and the Stockton, California cement import terminal, which was divested in May 2023. There were no discontinued operations for the three and six months ended June 30, 2024.

Page 15 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Financial results for the Company's discontinued operations are as follows:


	Three Months Ended			Six Months Ended
	June 30, 2023
	(Dollars in Millions)
Revenues	$	35		$	59

Pretax loss from operations	$	(1	)	$	(18	)
Pretax gain on divestitures and sales of assets		2			2
Pretax earnings (loss)		1			(16	)
Income tax benefit		—			(4	)
Earnings (loss) from discontinued operations, net of income tax benefit	$	1		$	(12	)

Cash flow information for the Company's discontinued operations is as follows:


	Six Months Ended
	June 30, 2023
	(Dollars in Millions)
Net cash used for operating activities	$	(11	)

Additions to property, plant and equipment	$	(4	)
Proceeds from divestitures and sales of assets		57
Net cash provided by investing activities	$	53

Assets and Liabilities Held for Sale

Assets and liabilities held for sale at June 30, 2024 included certain nonoperating land. At December 31, 2023, assets and liabilities held for sale also included the South Texas cement plant, related cement distribution terminals and 20 ready mixed concrete plants that were sold in February 2024.

Page 16 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Assets and liabilities held for sale are as follows:


	June 30, 2024		December 31, 2023
	Continuing Operations
	(Dollars in Millions)
Inventories, net	$	—	$	61
Investment land		10		18
Other assets		—		4
Property, plant and equipment		—		327
Intangible assets, excluding goodwill		—		122
Operating lease right-of-use assets		—		15
Goodwill		—		260
Total current assets held for sale	$	10	$	807

Lease obligations	$	—	$	(16	)
Asset retirement obligations		—		(2	)
Total current liabilities held for sale	$	—	$	(18	)

Goodwill and Other Intangibles

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, 2024	$	764	$	2,625	$	3,389
Acquisitions		345		108		453
Balance at June 30, 2024	$	1,109	$	2,733	$	3,842

Intangible assets acquired during 2024 are as follows:

Page 17 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Inventories, Net


	June 30,			December 31,
	2024			2023
	(Dollars in Millions)
Finished products	$	1,313		$	1,152
Products in process		23			25
Raw materials		81			60
Supplies and expendable parts		158			155
Total inventories		1,575			1,392
Less: allowances		(470	)		(403	)
Inventories, net	$	1,105		$	989

Long-Term Debt


	June 30,			December 31,
	2024			2023
	(Dollars in Millions)
4.250% Senior Notes, due 2024	$	400		$	400
7% Debentures, due 2025		125			125
3.450% Senior Notes, due 2027		299			299
3.500% Senior Notes, due 2027		493			492
2.500% Senior Notes, due 2030		472			472
2.400% Senior Notes, due 2031		890			890
6.25% Senior Notes, due 2037		228			228
4.250% Senior Notes, due 2047		590			590
3.200% Senior Notes, due 2051		850			850
Total debt		4,347			4,346
Less: current maturities		(400	)		(400	)
Long-term debt	$	3,947		$	3,946

The Company has a credit agreement 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), which provides for an $800 million five-year senior unsecured revolving facility (the Revolving Facility) with a maturity date of December 21, 2028. Borrowings under the Revolving Facility bear interest, at the Company’s option, at rates based upon the Secured Overnight Financing Rate (SOFR) or a base rate, plus, for each rate, a margin determined in accordance with a ratings-based pricing grid. Any outstanding principal amounts, together with interest accrued thereon, are due in full on that maturity date. There were no borrowings outstanding under the Revolving Facility as of June 30, 2024 and December 31, 2023. Available borrowings under the Revolving Facility are reduced by any outstanding letters of credit issued by the Company under the Revolving Facility. At June 30, 2024 and December 31, 2023, the Company had $3 million of outstanding letters of credit issued under the Revolving Facility.

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 any debt incurred in connection with certain acquisitions during the quarter or three preceding

Page 18 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

quarters so long as the Ratio calculated without such exclusion does not exceed 4.00x. Additionally, if no amounts are outstanding under the Revolving Facility or the Company's trade receivable securitization facility (discussed below), consolidated debt, as defined, which includes debt for which the Company is a guarantor, shall be reduced in an amount equal to the lesser of $500 million or the sum of the Company’s unrestricted cash and temporary investments, for purposes of the covenant calculation. The Company was in compliance with the Ratio at June 30, 2024.

The Company, through a wholly-owned special-purpose subsidiary, has a $400 million trade receivable securitization facility (the Trade Receivable Facility) that matures on September 19, 2024. The Trade Receivable Facility, with Truist Bank, Regions Bank, First-Citizens Bank & Trust Company, and certain other lenders that may become a party to the facility from time to time, is backed by eligible trade receivables, as defined. Borrowings are limited to the lesser of the facility limit or the borrowing base, as defined. These receivables are originated by the Company and then sold or contributed 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 Adjusted Term Secured Overnight Financing Rate (Adjusted Term SOFR), as defined, plus 0.7%. 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 June 30, 2024 and December 31, 2023.

On July 2, 2024, the Company used available liquidity to repay the $400 million of 4.250% Senior Notes that matured by their own terms.

Financial Instruments

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

Temporary cash investments are placed primarily in money market funds, money market demand deposit accounts and Eurodollar time deposit accounts with financial institutions. The Company’s cash equivalents have 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 carrying value of restricted cash approximates its fair value.

Accounts receivable are due from a large number of customers, primarily in the construction industry, and are dispersed across wide geographic and economic regions. However, accounts receivable are more heavily concentrated in certain states, namely Texas, North Carolina, Colorado, California, Georgia, Minnesota, Arizona, Iowa, Florida and Indiana. The carrying values of accounts receivable approximate their fair values.

The note receivable at June 30, 2024 is a promissory note and is not publicly traded. Management estimates that the carrying value of the note receivable approximates its fair value.

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

The carrying value and fair value of the Company’s long-term debt were $4.3 billion and $3.7 billion, respectively, at June 30, 2024 and $4.3 billion and $3.9 billion, respectively, at December 31, 2023. The estimated fair value of the Company’s publicly-registered long-term debt was estimated based on Level 1 of the fair value hierarchy using quoted market prices.

Page 19 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

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 25.0% and 20.9% for the six months ended June 30, 2024 and 2023, respectively. The higher 2024 effective income tax rate versus 2023 was driven by the impact of the February 2024 divestiture of the South Texas cement business and certain related ready mixed concrete operations, which reflected the write off of certain nondeductible goodwill and was treated as a discrete tax event.

Pension Benefits

The net periodic benefit cost for pension benefits includes the following components:


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	(Dollars in Millions)
Service cost	$	10		$	9		$	19		$	16
Interest cost		15			15			28			26
Expected return on assets		(21	)		(20	)		(39	)		(36	)
Amortization of prior service cost		2			2			3			4
Net periodic benefit cost	$	6		$	6		$	11		$	10

The components of net periodic benefit cost, other than service cost, are included in the line item Other nonoperating income, net, in the consolidated statements of earnings and comprehensive earnings. Based on the roles of the employees, service cost is included in the Cost of revenues or Selling, general and administrative expenses line items in the consolidated statements of earnings and comprehensive earnings.

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's financial condition, results of operations or cash flows, as a whole, based on currently available facts.

Letters of Credit

In the normal course of business, the Company provides certain third parties with standby letter of credit agreements guaranteeing its payment for certain insurance claims, contract performance and permit requirements. At June 30, 2024, the Company was contingently liable for $33 million in letters of credit.

Page 20 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

10.

Segments

The Building Materials business contains two reportable segments: the East Group and the West Group. The Company also has a Magnesia Specialties reportable segment. The Chief Operating Decision Maker's evaluation of performance and allocation of resources are based primarily on earnings from operations. Segment earnings from operations include revenues less cost of revenues; selling, general and administrative expenses; other operating income and expenses, net; and exclude interest income and expense; other nonoperating income and expenses, net; and income tax expense. Corporate loss from operations primarily includes depreciation; expenses for corporate administrative functions; acquisition, divestiture and integration expenses; and other nonrecurring income and expenses not attributable to operations of the Company's operating segments.

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

The following table displays selected financial data for the Company’s reportable segments. Revenues, as presented on the consolidated statements of earnings and comprehensive earnings, reflect the elimination of intersegment revenues, which represent sales from one segment to another segment. Revenues and earnings (loss) from operations reflect continuing operations only.


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(Dollars in Millions)
Revenues:
East Group	$	823		$	735		$	1,349		$	1,265
West Group		860			1,005			1,505			1,746
Magnesia Specialties		81			81			161			164
Total	$	1,764		$	1,821		$	3,015		$	3,175


Earnings (Loss) from operations:
East Group	$	249		$	227		$	378		$	337
West Group		171			240			1,470			334
Magnesia Specialties		25			23			48			43
Total reportable segments		445			490			1,896			714
Corporate		(47	)		(27	)		(77	)		(55	)
Consolidated earnings from operations		398			463			1,819			659
Interest expense		40			42			80			84
Other nonoperating income, net		(14	)		(19	)		(46	)	$	(35	)
Consolidated earnings from continuing operations before income tax expense	$	372		$	440		$	1,785		$	610

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

Page 21 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)


	June 30,		December 31,
	2024		2023
	(Dollars in Millions)
Assets employed:
East Group	$	7,687	$	5,131
West Group		7,516		7,697
Magnesia Specialties		261		250
Total reportable segments		15,464		13,078
Corporate		869		2,047
Total	$	16,333	$	15,125

11.

Revenues and Gross Profit

The following tables, which are reconciled to consolidated amounts, provide revenues and gross profit (loss) by line of business: Building Materials (further divided by product line) and Magnesia Specialties. Interproduct revenues represent sales from the aggregates product line to the cement and ready mixed concrete and asphalt and paving product lines. Effective January 1, 2024, the Company combined the cement and ready mixed concrete product lines. This change was driven by the reduced significance of each of these product lines relative to the Building Materials business and consolidated operating results from recent divestitures. Additionally, there is a significant relationship between these product lines, as the ready mixed concrete product line is a significant customer of the cement product line. Revenues and gross profit (loss) reflect continuing operations only.

Page 22 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(Dollars in Millions)
Revenues:
Building Materials business:
Aggregates	$	1,242		$	1,151		$	2,127		$	2,063
Cement and ready mixed concrete		261			413			526			753
Asphalt and paving services		245			241			303			299
Less: interproduct revenues		(65	)		(65	)		(102	)		(104	)
Total Building Materials business		1,683			1,740			2,854			3,011
Magnesia Specialties		81			81			161			164
Total	$	1,764		$	1,821		$	3,015		$	3,175

Gross profit (loss):
Building Materials business:
Aggregates	$	392		$	371		$	632		$	609
Cement and ready mixed concrete		72			129			103			187
Asphalt and paving services		37			36			15			16
Total Building Materials business		501			536			750			812
Magnesia Specialties		27			28			56			53
Corporate		(11	)		(4	)		(16	)		(2	)
Total	$	517		$	560		$	790		$	863

The above information for 2023 has been reclassified to conform to current-year presentation. For the quarter ended June 30, 2023, the cement product line reported revenues of $198 million, inclusive of $56 million to the ready mixed concrete product line, and gross profit of $93 million. For the quarter ended June 30, 2023, the ready mixed concrete product line reported revenues of $271 million and gross profit of $35 million. For the six months ended June 30, 2023, the cement product line reported revenues of $366 million, inclusive of $104 million to the ready mixed concrete product line, and gross profit of $140 million. For the six months ended June 30, 2023, the ready mixed concrete product line reported revenues of $491 million and gross profit of $47 million. Revenues from sales of cement to the ready mixed concrete product line were previously eliminated in the interproduct revenues line.

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. Customer payments for the paving operations are based on a contractual billing schedule and are typically paid-when-paid, meaning the Company is paid once the customer is paid.

Future revenues from unsatisfied performance obligations at June 30, 2024 and 2023 were $377 million and $358 million, respectively, where the remaining periods to complete these obligations ranged from one month to 18 months and one month to 28 months, respectively.

Page 23 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Service Revenues. Service revenues, which include paving services located in California and Colorado, were $117 million and $108 million for the three months ended June 30, 2024 and 2023, respectively, and reported in the West Group. Service revenues for the six months ended June 30, 2024 and 2023 were $143 million and $134 million, respectively.

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:


	June 30, 2024		December 31, 2023
	(Dollars in Millions)
Costs in excess of billings	$	17	$	5
Billings in excess of costs	$	10	$	10

Revenues recognized from the beginning balance of contract liabilities for the three months ended June 30, 2024 and 2023 were $6 million and $5 million, respectively, and $8 million for both the six months ended June 30, 2024 and 2023.

Retainage, which primarily relates to the paving services, represents amounts that have been billed to customers but payment is withheld until final acceptance of the performance obligation by the customer. Retainage, which is included in Other current assets on the Company’s consolidated balance sheets, was $12 million and $17 million at June 30, 2024 and December 31, 2023, respectively.

12.

Supplemental Cash Flow Information

Noncash investing and financing activities are as follows:


	Six Months Ended
	June 30,
	2024		2023
	(Dollars in Millions)
Accrued liabilities for purchases of property, plant and equipment	$	49	$	63
Right-of-use assets obtained in exchange for new operating lease liabilities	$	43	$	29
Right-of-use assets obtained in exchange for new finance lease liabilities	$	9	$	16
Remeasurement of operating lease right-of-use assets	$	3	$	1
Remeasurement of finance lease right-of-use assets	$	25	$	—
Acquisition of assets through asset exchange	$	—	$	5

Page 24 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

(UNAUDITED) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Supplemental disclosures of cash flow information are as follows:


	Six Months Ended
	June 30,
	2024		2023
	(Dollars in Millions)
Cash paid for interest, net of capitalized amount	$	76	$	80
Cash paid for income taxes, net of refunds	$	374	$	83

13.

Other Operating Income, Net

Other operating income, net, is comprised generally of gains and losses on divestitures and the sale of assets; asset and portfolio rationalization charges; recoveries and losses related to certain customer accounts receivable; recoveries and losses on the resolution of contingency accruals; rental, royalty and services income; and accretion expense, depreciation expense and gains and losses related to asset retirement obligations. For the six months ended June 30, 2024, other operating income, net, included a $1.3 billion pretax gain on the divestiture of the South Texas cement business and certain of its related ready mixed concrete operations, which was partially offset by a $50 million pretax, noncash asset and portfolio rationalization charge.

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

Page 25 of 41

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended June 30, 2024

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.